Federal

Election

Commission

Annual Report 2005

Federal Election Commission

Washington, DC 20463
Commissioners

Michael E. Toner, Chairman

Robert D. Lenhard, Vice Chairman

David M. Mason, Commissioner

Hans A. von Spakovsky, Commissioner

Steven T. Walther, Commissioner

Ellen L. Weintraub, Commissioner

Statutory Officers

Robert J. Costa, Acting Staff Director

Lawrence H. Norton, General Counsel

Lynne A. McFarland, Inspector General

The Annual Report is prepared by:

Gregory J. Scott, Assistant Staff Director,

Information Division

Carrie Hoback, Public Affairs Specialist, 

Information Division

Carlin E. Bunch, Production

Paul Clark, Ph.D., Statistician, 
FEDERAL ELECTION COMMISSION 

WASHINGTON, D.C. 20463 

OFFICE OF THE CHAIRMAN 

June 1, 2006 

The President of the United States 

Members of The United States Senate 

Members of The United States House of Representatives, 

Dear Mr. President, Senators and Representatives: 

We are pleased to submit for your information the 31st Annual Report of the Federal 

Election Commission, pursuant to 2 U.S.C.§438(a)(9). The Annual Report 2005 

describes the activities performed by the Commission in the last calendar year. 

During this non-election year, the Commission issued 20 advisory opinions, collected 

nearly $2.5 million in civil penalties and closed 12 litigation cases. At the same time, the 

agency efficiently received and made public volumes of financial data, conducted 

numerous audits of political committees to ensure compliance with the law, and 

continued to promote compliance with campaign finance laws through a variety of 

outreach programs. 

The Commission also completed a number of significant rulemakings, including new 

regulations that allow corporate members of trade associations to utilize payroll 

deductions when making contributions to the trade association's separate segregated fund 

(SSF). Additionally, several rulemakings were approved this year in response to a court 

challenge to a number of regulations the agency had promulgated to implement the 

Bipartisan Campaign Reform Act. 

We hope that you will find this annual report to be a useful summary of the 

Commission's efforts to implement the Federal Election Campaign Act. 

Respectfully, 

Michael E. Toner 

Chairman 
Table of Contents

Executive Summary 1

 

Chapter One

Keeping the Public Informed 3

Public Disclosure 3

Educational Outreach 5

Chapter Two

Administering the Law 9

Regulations 9

Advisory Opinions 10

Compliance 10

Results of Compliance Initiatives 14

Audit 15

Litigation 15

Chapter Three 

Legal Issues 17

Shays v. FEC 17

Payroll Deductions for Contributions to 

Trade Association SSF 22

Contributions 22

Political Committee Status, Definition of 

Contribution and Allocation for PACs 24

Millionaires’ Amendment 25

Soft Money 26

Chapter Four

Presidential Public Funding 29

2004 Shortfall 29

Chapter Five

The Commission 31

Commissioners 31

Inspector General 31

Equal Employment Opportunity 31

Ethics 31

FEC’s Budget 32

Fiscal Year 2006 Budget 32

Chapter Six

Campaign Finance Statistics 35

Party Committees 35

Congressional Committees 41

Political Action Committees 43

Appendices

1. Biographies of Commissioners and Officers 45

2. Chronology of Events 49

3. FEC Organizational Chart 53

4. FEC Offices 55

5. Statistics on Commission Operations 59

6. 2005 Federal Register Notices 65

7. 2005 Advisory Opinions 67
Charts and Tables

Chapter One

Keeping the Public Informed

Chart 1-1:

Size of Detailed Database by Election Cycle 4

Chapter Two

Administering the Law

Chart 2-1: 11

Civil Penalties for Standard Enforcement Process 

by Calendar Year 

Chart 2-1: 11

Median Civil Penalty by Calendar Year 

Chart 2-3: 12

Ratio of Active to Inactive Cases by Calendar Year 

Chart 2-4: 13

Cases Dismissed Under 

Enforcement Priority System 

Chart 2-5: 13

Number of Respondents and Pending Cases

 by Calendar Year

Chapter Five

The Commission

Chart 5-1: 32

Functional Allocation of Budget 

Chart 5-2: 33

Divisional Allocation of Budget by Percentage 

Chapter Six

Campaign Finance Statistics

Table 6-1: 35

Overall Financial Activity of 

National Party Committees 

Table 6-2: 39

Party Committees’ Support of 

Federal Candidates, 2005 

Table 6-3: 42 

Individual Contributions to House, 

Senate and Presidential Committees 

Chart 6-1: 36 

Total Fundraising by National Party Committees, 

Non-Election Years 

Chart 6-2: 37

Total Individual Contributions to Parties, 

Non-Election Years 

Chart 6-3: 38

Ratio of Hard Money Contributions by 

Amount to DNC, Non-Election Years 

Chart 6-4: 38

Ratio of Hard Money Contributions by 

Amount to RNC, Non-Election Years 

Chart 6-5: 40

Total Disbursements of Federal Funds and 

Nonfederal Funds for Shared Activities by 

 State Party Committees, Non-Election Years 

Chart 6-6: 41

Congressional Campaign Fundraising, 

Non-Election Years 

Chart 6-7: 42

Total Individual Contributions to Congressional 

Candidates, Non-Election Years 

Chart 6-8: 43

Number of PACs in Non-Election Years 

Chart 6-9: 43

PAC Receipts in Non-Election Years 

Chart 6-10: 44

PAC Contributions to Republican Candidates 

Chart 6-11: 44

PAC Contributions to Democratic Candidates 
1

Executive Summary

During its thirtieth year of operations, the Federal 

Election Commission (FEC or Commission) continued to fulfill its mission of disclosing and publishing 

campaign finance information, enforcing campaign 

finance laws and overseeing the public funding of 

Presidential elections. Throughout 2005, the FEC 

provided almost immediate public access to campaign finance reports and educated the regulated 

community, while carrying out enforcement initiatives 

and performing additional audits of political committees. Implementing the Bipartisan Campaign Reform 

Act of 2002 (BCRA) continued to be a major focus as 

the Commission defended the statute and its implementing regulations in court and issued numerous 

advisory opinions interpreting provisions of the new 

law. Court decisions invalidated some of the many 

BCRA rules promulgated by the Commission requiring the issuance of several new regulations during 

the year. 

In 2005, the Commission streamlined disclosure 

of sources and amounts of funds spent on campaign 

activity. All the reports filed by committees were entered into the FEC’s computer database and made 

available to the public within only 48 hours of receipt. The vast majority of these reports are now filed 

electronically, which allows the public access within 

minutes of receipt by the FEC. The FEC also significantly enhanced its online disclosure of information 

during 2005 by updating the Enforcement Query 

System (EQS). Initially, the EQS contained complete 

public case files for all Matters Under Review (MURs) 

closed since January 1, 2002. During 2005, however, 

staff updated the system to provide documents from 

closed MURs dating back to January 1, 1999, and all 

Alternative Dispute Resolution (ADR) cases since the 

program’s establishment in October of 2000. 

The FEC continued to promote compliance with 

campaign finance laws through a variety of outreach 

programs and the publication of educational materials. A notable update to the agency’s web site 

in 2005 was a hypertext version of the FEC’s Court 

Case Abstracts publication. This continuously-updated online index of FEC litigation replaced the paper 

publication that had typically been updated only on 

an annual basis. In addition to providing educational 

materials to the regulated community through the 

FEC’s web site, Commissioners and FEC staff hosted 

a full series of training conferences in Washington, 

D.C. and other regional locations, as well as a variety

of roundtable workshops, seminars, public speaking

engagements and state outreach programs.

In 2005, the Commission’s Reports Analysis Division (RAD) increased the efficiency of its document 

review when compared to past election cycles. Additionally, RAD, in coordination with the Information 

Technology Division, launched the first two phases 

of a web-based review system. Three more phases 

are in development. The first two phases allow for 

greater sharing of information within and outside the 

Division, increase management’s ability to assign and 

track work, provide analysts better control over work 

assignments and consolidate filers’ information for 

easier access.

Through its standard enforcement process, the 

FEC entered into conciliation agreements requiring 

the payment of more than $2.5 million in total civil 

penalties during 2005. The Commission’s efficient 

and effective enforcement process allows the Office 

of General Counsel to focus its resources on the most 

serious violations of the Federal Election Campaign 

Act while other matters were referred to the Administrative Fine Program and Alternative Dispute Resolution (ADR) program. 

The ADR program produced a total of 60 separate 

negotiated agreements based on 60 cases during 

2005. In addition, the FEC’s Administrative Fine Program continued to encourage compliance with the 

law’s reporting deadlines by assessing civil money 

penalties for violations involving failure to file reports 

on time or at all, including failure to file 48-hour 

notices. During 2005, the Administrative Fine Program processed 209 cases and assessed a total of 

$498,748 in fines for the U.S. Treasury. 

The FEC’s Audit Division conducted numerous 

audits of political committees to ensure compliance 

with campaign finance laws in 2005. For the 2004 

election cycle, the Audit division released 50 audits 

of non-Presidential committees (authorized and unauthorized) and eleven audits of publicly funded Presidential committees. 

Throughout the year, the FEC provided guidance 

to the regulated community through advisory opin-
2 Executive Summary

ions (AO) and new regulations. During 2005, the 

Commission issued 20 AOs. Some of the AOs provided compliance information to federal officeholders 

running as nonfederal candidates as well as clarified 

the Commission’s interpretation of the press exemption and the Millionaire’s Amendment. The FEC also 

completed rulemakings in response to the needs of 

the regulated community, including new regulations 

that allow corporate members of trade associations to 

utilize payroll deductions when making contributions 

to the trade association’s separate segregated fund 

(SSF). 

Several regulations were approved this year in 

response to a court challenge to a small number 

of the regulations the agency had promulgated to 

implement the BCRA. In July 2005, the U.S. Court of 

Appeals for the District of Columbia Circuit upheld 

the appealed portion of the District Court‘s 2004 decision in Shays v. FEC that invalidated several Commission regulations. After the Court of Appeals declined to rehear the appeal en banc, the Commission 

announced that it would substantially expedite work 

on the affected regulations to ensure that new rules 

would be in place in time for the 2006 elections. 

During 2005, the Commission initiated nine 

rulemakings to address all of the regulations affected 

by Shays. By the end of 2005, the Commission approved final rules in four of the rulemakings, including 

candidate solicitation at state, district and local party 

fundraising events; the de minimis exemption for the 

disbursement of Levin funds by state, district and 

local party committees; state, district and local party 

committee salaries and wages; and electioneering 

communications. The remaining five rulemakings 

included the definitions of “agent”; “Federal Election 

Activity” (FEA); “solicit” and “direct”; coordinated 

communications; and “public communications.”1

The Commission was also involved in four lawsuits 

related to political committee status. Two of the four 

challenged the Commission’s decision to conclude 

its rulemaking on political committee status without 

adopting a regulation defining “major purpose.” Another arose from rules the agency promulgated in 

2004 that require groups to treat as federal funds the 

proceeds of solicitations that indicate receipts will 

be used to support a federal candidate and change 

the allocation required for certain expenditures. The 

fourth lawsuit was an enforcement suit filed by the 

Commission itself charging that an organization failed 

to register as a political committee. Those cases 

were pending at the close of 2005. 

The material that follows details the FEC’s activities 

during 2005. Supplemental information on most topics may also be found in issues of the FEC’s monthly 

newsletter, the Record, that were published during 

the past year.

1

 The Commission completed all of the final five 

rulemakings by April 7, 2006. See Chapter 3 for more 

details.
 

3

Chapter One

Keeping the Public Informed

Keeping the public informed is central to the FEC’s 

mission. In order to ensure that voters can make 

informed decisions on Election Day, the agency’s 

public disclosure and educational outreach programs 

provide the electorate with a wealth of information 

about various aspects of federal campaign finance 

law. The financial reports of all federal political committees are available to members of the general public, providing an added incentive for the regulated 

community to comply with the law. Educational outreach helps those committees achieve compliance 

by providing the information necessary to understand 

the requirements of the law.

Throughout 2005, the Commission maintained 

its commitment to customer service and expanded 

public access to Commission information. As detailed below, the Commission implemented changes 

throughout the year that will further enhance the disclosure and educational outreach programs.

Public Disclosure

During 2005, the disclosure of the sources and 

amounts of funds spent on federal campaign activity 

continued to be the focal point of the Commission’s 

work. The Commission received the reports filed by 

committees, reviewed them to ensure compliance 

with the law, entered the data into the FEC’s computer database and made the reports available to the 

public within 48 hours of receipt.

Electronic Filing

Now in its fifth year of operation, the Commission’s 

mandatory electronic filing program continued to pay 

disclosure dividends in 2005. Under the program, 

committees that receive contributions or make expenditures in excess of $50,000 in a calendar year, 

or expect to do so, must file their campaign finance 

reports electronically.1 Committees that are required 

to file electronically, but instead file on paper, are 

considered nonfilers and could be subject to enforcement actions, including administrative fines. In order 

to file electronically, committee treasurers obtain 

passwords from the FEC and use software to fill out 

the reports, which they can send to the Commission 

via Internet connection, modem or floppy disk. The 

FEC’s validation system verifies that the reports meet 

certain criteria and informs the committees of problems that need to be fixed.

In February of 2005, the Commission updated its 

electronic filing format from Version 5.1 to Version 5.2 

in order to reflect changes in Commission regulations 

that took effect on January 1, 2005. Beginning with 

the February monthly report, political action committees (PACs) and party committees were required to 

use the FEC’s revised Form 3X, which contained updated H Schedules that conform to the new allocation 

rules for PACs.

State Filing Waivers

The Commission’s State Filing Waiver Program, 

which began in October 1999, continued to ease the 

reporting and recordkeeping burdens for political 

committees and state election offices. With the addition of Montana in August 2005, all 50 states and 

two U.S. territories have now qualified for the waiver.2

Under the program, filers whose reports are available 

on the FEC web site need not file duplicate copies of 

their reports in states and territories that provide public access to the Commission’s web site.

Imaging and Processing Data

The Commission also continued its work in 2005 to 

make the reports it receives quickly and easily available to the public. The Commission scans all of the 

paper reports filed with the agency to create digital 

images of the documents, which are then accessible 

to the public in the FEC’s Public Disclosure Office 

or on the Commission’s web site. In addition to the 

digital imaging system, the Commission codes and 

enters the information taken from campaign finance 

1

 Mandatory electronic filing requirements do not apply 

to Senate candidates’ committees and other committees 

that only support Senate candidates.

2

 As of December 31, 2005, the FEC had certified the 

territories of American Samoa and Virgin Islands for the State

Filing Waiver Program. Only Guam and Puerto Rico are not 

currently in the State Filing Waiver Program.
 

4 Chapter One

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. For electronic filings, 

this process is completely automated. 

Public Access to Data

As a result of modernized hardware, software and 

communications infrastructure, the Commission’s 

retrieval system allows anyone with access to the 

Commission web site—www.fec.gov—to examine the 

FEC’s campaign finance disclosure database. The 

system also allows users to perform complex search 

functions. 

The Commission’s disclosure database, which 

contains millions of transactions, enables researchers 

to select a profile of a committee’s financial activity 

Chart 1-1

Size of Detailed Database by Election Cycle

Year Number of Detailed Entries*

1990 767,000

1991 444,000†

1992 1,400,000 

1993 472,000

1994 1,364,000

1995 570,000 

1996 1,887,160

1997 619,170

1998 1,652,904

1999 840,241

2000 2,390,837

2001 661,591

2002 2,281,963

2003 1,109,946

2004 2,131,999

2005 929,465

* Figures for even-numbered years reflect the cumulative total

for each two-year election cycle.

†

 The FEC began entering nonfederal account data in 1991.

for each election cycle. Researchers can also access information on contributions by using a variety 

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

name, date, amount or geographic location).

Visitors to the Office of Public Disclosure can use 

computer terminals to inspect digital images of reports and to access the disclosure database and 

more than 25 different campaign finance indices that 

organize the data in different ways. Visitors can also 

access the FEC’s web site, which offers search and 

retrieval of more than three million images of report 

pages dating back to 1993 and over two million database entries since 1997. 

The Office of Public Disclosure continues 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.

Throughout the agency’s history, the Commission 

has continued to improve disclosure information’s accessibility and availability to members of the public, 

the press and the regulated community. This year 

was no exception. During 2005, the Office of Public 

Disclosure held extended hours to provide more opportunities for research and inquiries on site at the 

Commission. Additionally, as detailed below, the 

Commission continued to improve the quality and 

quantity of information available on its web site. 

Enforcement Query System

In 2005, the Commission continued to update 

and expand its Enforcement Query System (EQS). 

Launched in December 2003, the EQS program is a 

web-based search tool that allows users to find and 

examine public documents in closed Commission enforcement matters. Using current scanning, optical 

character recognition and text search technologies, 

the system permits intuitive and flexible searches 

of case documents and other materials. Previously, 

these documents were available only at the Commission’s offices in Washington, and only on paper or 

microfilm. Users of the system can search for specific 

words or phrases from the text of all public case 

documents. They can also identify single MURs or 

groups of cases by searching additional identifying 
Keeping the Public Informed 5

information about cases. Included among these criteria are case names and numbers, complainants and 

respondents, timeframes, dispositions, legal issues 

and penalty amounts.

Initially, the EQS contained complete public case 

files for all MURs closed since January 1, 2002, and 

at the end of 2004 it included all documents from 

MURs closed since January 1, 2000. In the past 

year, however, staff updated the system to provide 

documents from MURS closed since January 1, 

1999. In addition, the Commission expanded the 

EQS to include all closed Alternative Dispute Resolution (ADR) cases since the ADR program began in 

October of 2000.

Review of Reports

The Commission’s Reports Analysis Division (RAD) 

reviews all reports to track compliance with the law 

and to ensure that the public record provides a full 

and accurate portrayal of campaign finance activity. 

During 2005, RAD analysts completed their reviews 

much more efficiently than in past election cycles. For 

instance, staff reduced the time between the receipt 

and review of reports by 30 percent when compared 

to 2003. RAD also collaborated with other divisions 

to provide greater accessibility and more efficient 

service to members of the regulated community.

In 2005, RAD, in coordination with the Information 

Technology Division, launched the first two phases of 

a web-based review system. Three more phases are 

in development. The first two phases allow for greater sharing of information within the Division and outside it, increase management’s ability to assign and 

track work, provide analysts with better control over 

work assignments and consolidate information about 

filing entities for easier access. It is expected that, 

when completed, most of the review of documents 

will be as fully automated as possible, significantly 

enhancing RAD’s efficiency and production. Other 

programs related to non- or late filing and administrative fines have been developed in coordination with 

ITD that, when fully implemented, will provide further 

efficiencies.

Educational Outreach

Throughout the year, the Commission continued to 

promote voluntary compliance with the law by educating committees about the law’s requirements.

Home Page (www.fec.gov)

The FEC’s web site offers members of the public, 

press and regulated community the ability to obtain 

an array of information with ease. Visitors can access 

publications, current laws and regulations, notices of 

proposed rulemakings, public comments, final rules 

and explanations and justifications, advisory opinion 

requests and agenda documents considered in open 

meetings. Visitors can also search for advisory opinions (AOs) on the web by using key words or phrases 

or by entering the year and AO number. Researchers 

may also read agency news releases, review federal 

election results, voter registration and turnout statistics and look up reporting dates. Finally, the National 

Mail Voter Registration Form, FEC registration and 

reporting forms, copies of the Record newsletter, the 

Campaign Guide series and other agency publications may all be downloaded from www.fec.gov.

Among the many updates and additions to the 

agency’s web site during 2005, the most notable was 

a new hypertext version of the FEC’s Court Case Abstracts publication. This continuously-updated online 

index of FEC litigation replaced the paper publication 

that had typically been updated on an annual basis. In the online edition, FEC court cases are listed 

alphabetically by non-FEC litigant or according to 

subject matter. Each index entry links to a summary 

and, in some instances, court opinions and additional 

documents pertaining to the case.

In addition to improving the web site, the Commission now participates in a government-wide erulemaking initiative. This program offers the public 

a single online point of access to rulemakings from a 

variety of government agencies. While information on 

FEC rulemakings continues to be available on www.

fec.gov, some of the members of the public may now 

elect to obtain information and comment on active 

rulemakings through www.regulations.gov. 
6 Chapter One

Telephone Assistance

A committee’s first contact with the Commission is 

often a telephone call to the agency’s toll-free information hotline. FEC staff members research relevant 

advisory opinions and litigation, as needed, to answer specific inquiries. Callers receive FEC documents, publications and forms at no cost. In 2005, 

the Information Division responded to 11,064 callers 

with compliance questions. The monthly average 

was 922, peaking in the month of January with 1,054 

calls. 

E-mail Inquiries

As the use of the Internet has increased in recent

years, the FEC has made e-mail available to the public and regulated community as a form of communication with the Commission. Information Division 

staff typically respond to the e-mails within 10 days of 

receipt of the request. The number of questions and 

comments sent to the Commission’s primary information account (Info@fec.gov) has increased dramatically. Even though 2005 was not a federal election 

year, Information Division staff responded to more 

e-mail inquiries (1,374) than during the 2004 Presidential election year.

 Other Commission offices with public e-mail addresses include: Alternative Dispute Resolution, Audit, the Commission Secretary, Congressional Affairs, 

Electronic Filing, Equal Employment Opportunity, 

Information, Information Technology, the Inspector 

General, the Law Library, Human Resources and 

Labor Relations, Press, Public Records and the Staff 

Director.

Faxline

The Commission’s automated Faxline allows the 

public to obtain publications or other documents 

quickly and easily. During the year, 161 callers 

sought information from the 24-hour Faxline and received 207 documents.

Reporting Assistance

During 2005, the FEC’s Information Division provided basic reporting assistance to callers who wished 

to preserve their anonymity, while RAD’s Campaign 

Finance Analysts answered more complex reporting 

and compliance questions from committees calling 

on the toll-free line. 

The Commission continued to encourage compliance with the law by mailing committees reminders 

of upcoming reporting deadlines three weeks before 

the due dates. The Record, the FEC’s monthly newsletter, and the FEC’s web site also listed reporting 

schedules and requirements, including new requirements imposed as part of the Bipartisan Campaign 

Reform Act of 2002 (BCRA).

Roundtables

As part of its educational outreach activities, the 

FEC’s Information Division holds roundtable workshops for the regulated community. These smallerscale workshops generally focus on new regulations, 

reporting requirements or other discrete topics. The 

Commission hosted 5 roundtables in 2005 with more 

than 100 participants. 

At the reporting roundtables led by staff from Information and RAD, attendees received guidance on 

reporting issues for candidates, PACs and parties, including disclosure requirements under the BCRA and 

recent FEC regulations. Attendees also had an opportunity to meet their committee’s RAD analyst and 

staff from the Commission’s Electronic Filing Office.

The Commission also hosted a roundtable session 

for political committee treasurers to discuss treasurer 

responsibilities, including reporting, recordkeeping 

and compliance with the limits and prohibitions of the 

Federal Election Campaign Act (the Act). Staff also 

addressed the Commission’s recent policy statement 

on treasurer liability.

In response to increased activity by 527 political 

organizations not registered with the FEC, the Commission hosted a joint roundtable with the Internal 

Revenue Service (IRS) in January 2005 that focused 

on each agency’s jurisdiction over these organizations. Commission staff focused on new FEC rules 

on political committee status and allocation for PACs, 

while IRS staff covered rules pertaining to 527s’ obligations under the tax code. 
Keeping the Public Informed 7

Seminars 

In addition to the 527 organization roundtable, 

the Commission hosted a one-day seminar for 

nonconnected PACs and 527 organizations in November. The seminar addressed issues such as 

fundraising and reporting. Commissioners and experienced staff discussed recent changes to campaign 

finance law, including the new allocation and solicitation rules. 

State Outreach

As part of the FEC’s State Outreach Program, Public Affairs Specialists conducted informal meetings in 

different cities across the country to brief PACs, party 

committees and candidate committees on areas of 

the law specific to their needs. In 2005, FEC staff 

held workshops in Savannah, Georgia; Denver, Colorado; and Portland, Oregon.

Conferences

Also during 2005, the Commission conducted several conferences attended by approximately 560 individuals to help candidates and committees understand and comply with the law. Commissioners and 

staff members from the Information Division, Office 

of General Counsel, Reports Analysis Division, Congressional Affairs Office and Press Office conducted 

workshops to help educate the regulated community. 

The Commission launched its conference season 

with a conference for House and Senate Campaigns 

and political party committees held in Washington, 

D.C. An additional Washington, D.C., conference

was held for corporations and their PACs. In June,

the FEC hosted a conference for trade associations,

labor organizations and membership organizations

in Chicago. Regional conferences were held in San

Diego and San Antonio. The conferences consisted

of a series of workshops that explained how the Act

applies to House and Senate campaigns, political

party committees and corporations, labor organizations, trade associations, membership organizations

and their respective PACs. The workshops specifically addressed recent changes to campaign finance

law and focused on fundraising and reporting rules.

Tours and Visits

In addition to holding conferences and roundtable 

sessions, the Commission welcomes individuals and 

groups who visit the FEC. Visitors to the Commission during 2005, including 21 student groups and 

21 foreign delegations, listened to presentations 

about campaign finance law and, in some instances, 

toured the agency’s Office of Public Disclosure. During 2005, the Commission made an effort not only to 

welcome visitors to the Commission but also to make 

official appearances, domestically and abroad.

Media Assistance

The Commission’s Press Office continued to field 

questions from media representatives and navigate 

reporters through the FEC’s vast pool of information. 

Press office staff responded to 5,200 calls from members of the press and prepared 142 news releases 

during 2005. Many of these releases alerted reporters to new campaign finance data and contained 

statistical graphs and tables. Releases concerning 

enforcement matters at the Commission include 

explanatory material to provide a more complete 

description of the statutory framework of the allegations and the resolution of the matter. As part of the 

web site update, current and archived press releases 

were organized chronologically and according to 

subject matter.

Publications

In 2005, the Commission produced a number of 

documents to help committees, the press and the 

general public understand the law and find information about campaign finance. The FEC’s Information 

Division continued to revise guides and brochures 

to reflect changes resulting from the BCRA and its 

implementing regulations. 

The following brochures were completed and 

made available to the public: Contributions, Committee Treasurers and FEC and the Federal Campaign 

Finance Law. These brochures are available on the 

Commission’s web site or they may be obtained via 

mail by contacting the Information Division. 

Commission staff also updated the Campaign 

Guide for Nonconnected Committees to reflect the 
8 Chapter One

BCRA amendments and implementing regulations. 

In the closing of 2005, the Commission also began 

updating the Campaign Guide for Corporations 

and Labor Organizations. Until those updates are 

completed, the agency made available a Campaign 

Guide Supplement—a compilation of Record newsletter articles summarizing provisions of the BCRA.

In September, the Commission published the Thirty 

Year Report which commemorates the Commission’s 

30-year anniversary. Rather than chronicle the entire 30-year period, the report focuses on significant

Commission actions of recent years. It includes:

•An historical context for the report;

•An overview of the Commission’s administration,

enforcement, interpretation and defense of the Act;

•Key issues the Commission is currently debating or

has recently resolved; and

•FEC statistics to supplement the continuing national

debate on the structure and role of the Commission, the place of party committees in the electoral

process and the influence of independent organizations on the electoral process.

The Thirty Year Report provides a portrait of an 

agency that has accomplished much, even as it has 

grappled with difficult issues whose resolution has 

helped define the proper balance between governmental interests and constitutionally protected political activity. 

As in past years, the Commission distributed more 

than 10,000 free copies of its Record newsletter each 

month. The newsletter summarizes recent advisory 

opinions, compliance cases, audits, litigation and 

changes in regulations. It also provides campaign 

finance statistics in graph and table format. 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

9

Chapter Two

Administering the Law

As part of its mission to administer, interpret, enforce and defend the Federal Election Campaign Act 

(the Act), the Commission promulgates regulations 

and issues advisory opinions (AOs). The regulations 

interpret and implement the statutory requirements 

enacted by Congress. AOs, in turn, clarify how the 

statute and regulations apply to real-life situations 

brought to the Commission by candidates, political 

committees and others in the regulated community. 

The agency’s enforcement actions promote compliance by correcting violations and demonstrating to 

the regulated community that violations can result 

in civil penalties and other remedial action. In cases 

where the Commission cannot reach an agreement 

with a respondent, the agency may seek relief in 

courts. The FEC also has primary responsibility for 

defending the Act and regulations against court challenges. During 2005, the Commission completed 

work on 10 rulemakings, issued 20 AOs, signed 46 

conciliation agreements, collected nearly $2.5 million 

in total civil penalties and closed 12 litigation cases.

Regulations

Congressional action, judicial decisions, petitions 

for rulemaking or other changes in campaign finance 

law or practices may necessitate that the Commission update or create new regulations. Consequently, the FEC undertakes rulemakings to revise existing 

campaign finance rules or create new ones.

Notices of proposed rulemakings (NPRMs) are published in the Federal Register, on the FEC’s web site and

on the U.S. Government web site (www.regulations.gov).

The notices provide an opportunity for members of the

public and regulated community to review rules, submit written comments to the Commission and testify at

public hearings held at the FEC when appropriate. The

Commission considers public comments and testimony

when deliberating on the final rules in open meetings.

The text of final rules and corresponding Explanation

and Justification (E&J) are published in the Federal Register and sent to the House of Representatives and Senate once they have been approved. The Commission

announces the effective date of the final rule, which is

at least 30 days after the final rule and its E&J are published in the Federal Register.

In 2005, nine of the Commission’s rulemakings 

were initiated in response to court decisions in Shays 

v. FEC that invalidated several of the regulations the

Commission promulgated to implement the Bipartisan

Campaign Reform Act of 2002 (BCRA).

Rulemakings Completed in 2005

The Commission completed work on the following 

new regulations during 2005:

•Contributions by Minors, NPRM approved April 1,

2004, final rules approved January 27, 2005.

•Filing by Priority Mail, Express Mail and Overnight

Delivery, NPRM approved December 16, 2004, final

rules approved March 10, 2005.

•Party Committee Donations to Tax-Exempt Organizations and Political Organizations, NPRM approved

December 2, 2004, final rules approved March 10,

2005.

•Civil Penalties Adjusted for Inflation, final rules approved June 9, 2005.

•Candidate Solicitation at State, District and Local

Party Fundraising Events, NPRM approved February 14, 2005, public hearing held on May 17, 2005,

revised E&J approved June 23, 2005.

•Payroll Deductions for Trade Association SSFs,

NPRM approved December 16, 2004, public hearing held on May 17, 2005, final rules approved July

14, 2005.

•“De Minimis” Exemption for Disbursement of Levin 

Funds by State, District and Local Party Committees, NPRM approved January 27, 2005, final rules 

approved November 10, 2005. 

•State, District and Local Party Committee Salaries

and Wages, NPRM approved April 28, 2005, public

hearing held on August 4, 2005, reopening of comment period approved August 22, 2005, final rules

approved December 1, 2005.

•Electioneering Communications, NPRM approved

August 18, 2005, public hearing held on October

20, 2005, final rules approved December 15, 2005.

•Administrative Fine Program, final rules approved

December 15, 2005.
10 Chapter Two

Other Rulemakings in Progress

In addition to completing the preceding rules, the 

Commission initiated regulatory actions by issuing an 

NPRM regarding:

•Definition of “Agent” for Coordinated and Independent Expenditures and Nonfederal Funds Regulations, NPRM approved January 27, 2005, public

hearing held on May 17, 2005.

•Internet Communications, NPRM approved March

24, 2005, public hearing held on June 28 and 29,

2005.

•Definition of Federal Election Activity, NPRM approved April 28, 2005, public hearing held on

August 4, 2005, extension of comments on NPRM

August 22, 2005.

•Definition of “Solicit” and “Direct,” NPRM approved

September 22, 2005, public hearing held on November 15, 2005.

•Coordinated Communications, NPRM approved

December 8, 2005.

Advisory Opinions

The Commission responds to questions about how 

the law applies to specific situations by issuing AOs. 

When the Commission receives a complete request 

for an AO, it generally has 60 days to respond. If, 

however, a candidate’s campaign submits a complete request within 60 days before an election, and 

the request presents a specific transaction or activity 

that directly relates to that election, the Commission 

must respond within 20 days. The Office of General 

Counsel (OGC) prepares a draft opinion, which the 

Commissioners discuss and vote on during an open 

meeting. A draft opinion must receive at least four 

favorable votes to be approved.

In 2005, the Commission received 20 complete advisory opinion requests. Several of the AOs that were 

issued addressed the matter of federal officeholders 

running as nonfederal candidates, ballot initiatives 

and the Millionaire’s Amendment. These and other 

AOs issued during the year are explored in greater 

detail in Chapter 3 “Legal Issues.”

Compliance

The FEC has implemented a series of changes in 

recent years aimed at improving the efficiency and 

effectiveness of its enforcement programs. These 

management initiatives have included improved 

prioritization of cases; use of the standard enforcement process for more complicated cases; an Administrative Fine Program for routine filing violations; 

and Alternative Dispute Resolution (ADR) to address 

some routine matters more flexibly. In 2005, the FEC 

obtained civil penalties and fines through the standard enforcement process, ADR and the Administrative Fine Program totaling nearly $2.5 million. 

The Standard Enforcement Process

Under the standard enforcement process set forth 

at 2 U.S.C. §437g, the Commission learns of possible election law violations in five ways. First, the 

agency’s monitoring process may discover potential 

violations through a review of a committee’s reports or 

through a Commission audit. Second, potential violations may be brought to the Commission’s attention 

through the complaint process. This process enables 

anyone to file a sworn complaint alleging violations 

and explaining the basis for the allegations. Third, 

the referral process enables other government agencies to refer possible violations to the FEC. Fourth, 

the Commission may investigate a possible violation 

based on news articles and similar published accounts. Finally, any person or entity who believes it 

may have committed a violation may bring the matter 

sua sponte to the Commission’s attention.

As required by 2 U.S.C §437g, the FEC’s 

OGC reviews and investigates enforcement matters, 

or matters under review (MUR). OGC makes recommendations to the Commission regarding the disposition of matters and negotiates conciliation agreements requiring the payment of civil penalties.

In the first step of the standard enforcement process, OGC recommends whether the Commission 

should find “reason to believe,” that is, whether an 

investigation is warranted. If the Commission determines there is “reason to believe” a violation has 

been or may have been committed, respondents are 

notified and, if necessary, an investigation is opened. 
2,500

2,000

1,500

1,000

500

0 2000 2001 2002 2003 2004 2005

11

50

40

30

20

10

0 2000 2001 2002 2003 2004 2005

Administering the Law

The Commission has authority to subpoena information and ask a federal court to enforce a subpoena. 

After the investigation, the General Counsel sends 

a brief to the respondent, stating his position on the 

legal and factual issues of the case and recommending whether the Commission should find “probable 

cause to believe” a violation has occurred. In addition to briefs prepared by the General Counsel, the 

Commission will consider respondents’ reply briefs 

supporting their positions. If the Commission finds 

that there is probable cause to believe that a violation of the Act has occurred, it is required to enter 

into conciliation with the respondents for a period of 

at least 30 days. If the Commission and respondent 

are not able to resolve the case through a conciliation 

agreement, the Commission may initiate a civil action 

for relief in federal district court. In matters resolved 

through the standard enforcement process, the FEC’s 

OGC negotiated $1,807,769 in civil penalties in 2005. 

Chart 2-1

Civil Penalties for Standard Enforcement Process

by Calendar Year

In Thousands of Dollars

Administrative Fine Program

Under the Administrative Fine Program, the Commission assesses civil money penalties for late and 

nonfiled reports. Penalty amounts are determined by 

the number of days a report was late, the amount of 

financial activity involved and any prior penalties for 

violations under the administrative fine regulations. 

Initially, Congress authorized the Program as a 

pilot, only in place for violations occurring between 

July 14, 2000, and December 31, 2001. Since then, 

however, Congress has extended authorization for 

the Administrative Fine Program several times. Most 

recently, on November 30, 2005, President Bush 

signed the Transportation, Treasury, Housing and 

Urban Development, Judiciary, District of Columbia, 

and Independent Agencies Appropriations Act, 2006, 

which extended the Congressional authorization for 

the program from December 31, 2005, to December 

31, 2008.

Chart 2-2

Median Civil Penalty by Calendar Year

In Thousands of Dollars
12 Chapter Two

How the Program Works

Prior to establishing the Administrative Fine Program, the Commission handled violations involving 

late and nonfiled reports under its standard enforcement procedures, as described above. The Administrative Fine Program has created a streamlined process for addressing these reporting violations. 

Administrative fine actions originate in the Reports 

Analysis Division (RAD). RAD monitors committees 

registered with the Commission for possible filing 

violations and recommends to the Commission those 

committees that appear to be in violation. If the Commission finds “reason to believe” (RTB) that a committee and its treasurer have violated the applicable 

reporting provisions, RAD provides a written notification to the committee and its treasurer containing the 

factual and legal basis of its finding and the amount 

of the proposed civil money penalty. The respondents have 40 days from the date of the RTB finding 

to either pay the designated penalty or submit a written response to the Office of Administrative Review. 

The response should provide proper supporting documentation outlining why they believe the Commission’s finding and/or penalty has been administered 

erroneously. If they submit a response to the Office 

of Administrative Review, RAD forwards its information about the case to that office for consideration by 

an impartial reviewing officer who was not involved in 

the original RTB recommendation.

After reviewing the RTB finding and the respondents’ written submission, the reviewing officer forwards a recommendation to the Commission along 

with all documentation. The respondents may submit 

written responses to the reviewing officer’s recommendation. A final determination is then made by the 

Commission as to whether the respondents violated 

the law. The Commission assesses a civil money 

penalty if a violation has occurred and the respondents have not demonstrated the existence of “extraordinary circumstances” that prevented them from 

filing the report in a timely manner.

Should the respondents fail to pay the civil money 

penalty or submit a challenge within the original 40 

days, the Commission will issue a final determination 

with an appropriate civil money penalty. The respondents will then have an additional 30 days after receipt of the FEC’s final determination to pay the penalty or to seek judicial review. After the Commission’s 

final determination, the respondents can challenge 

the penalty by taking the matter to federal district 

Active Cases Inactive Cases

2000 2001 2002 2003 2004 2005

(207 Cases) (197 Cases) (166 Cases) (188 Cases) (153 Cases) (197 Cases)

Chart 2-3

Ratio of Active to Inactive Cases by Calendar Year
Administering the Law 13

court, but they cannot raise any new arguments not 

raised during the administrative process.

The Commission may transfer cases to the U.S. 

Department of Treasury for collection when respondents fail to pay the penalty or seek judicial review 

after a final determination has been made. Alternatively, the Commission may decide to file suit in the 

appropriate U.S. district court to collect owed civil 

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

Calculating Penalties

Under the program, respondents may face administrative penalties that vary depending on the interaction of the following factors:

•Election sensitivity of the report;

•Whether the committee is a late filer (and the number of days late) or a nonfiler;

•The amount of financial activity in the report; and

•Prior civil money penalties for reporting violations.

Administrative Fines in 2005

During 2005, the Commission processed 209 cases and assessed a total of $498,748 in fines. 

Alternative Dispute Resolution Program

The FEC’s Alternative Dispute Resolution (ADR) 

program was established in October of 2000 as a pilot to determine the viability of using ADR procedures 

to address and resolve campaign finance law violations. Now in its third year as a permanent program 

at the Commission, the ADR Office (ADRO) continues 

to negotiate expeditious settlements of cases through 

mutually agreeable terms that promote compliance 

with the Act and Commission regulations. If the 

respondent(s) and the Commission representative 

are unable to resolve the matter, mediation is available by mutual agreement. All ADR settlements are 

submitted to the Commission for final approval. Thus 

far, no cases have required mediation. 

 

Cases Dismissed Under

Enforcement Priority System

Low-Rated Cases

Stale Cases

Number of Cases

50

40

30

20

10

0

1999 2000 2001 2002 2003 2004 2005

Chart 2-5

Number of Respondents and Pending Cases by Calendar Year

Respondents Cases

Number

3,000

2,500

2,000

1,500

1,000

500

0

1999 2000 2001 2002 2003 2004 2005

Chart 2-4
14 Chapter Two

However, not all cases are eligible for the ADR 

program. Cases may be assigned to the program 

only after they have been reviewed to determine suitability. A case, for example, will be excluded from 

ADR consideration if it:

•Raises issues requiring a definitive resolution for

precedential value;

•Raises issues that bear on government policy;

•Affects other persons or organizations that are not

parties to the proceeding; or

•Would benefit from a full public record of the proceeding.

Additional internal factors help to determine 

whether a case is appropriate for ADR. Such factors 

are addressed on a case-specific basis.

The program’s success in reaching its goal of 

expediting the resolution of enforcement matters is 

evident in changes that have taken place both at the 

Commission and within the regulated community. For 

example, ADR has established a presence among 

the regulated community, with members of the election bar requesting that matters be considered by the 

program. Moreover, the process has become more 

efficient under procedures adopted by RAD, the Audit Division and OGC that allow cases to be referred 

directly to ADR without review by OGC. 

Nearly 70 percent of the 307 cases ADRO has 

processed since its inception have been accepted 

into ADR. The remaining cases were either deemed 

inappropriate for ADR and dismissed for lack of 

evidence or dismissed due to the de minimis nature 

of the matter. ADRO did not process any cases involving respondents who rejected the ADR option. 

Sixty-seven percent of the total caseload arose from 

complaints (including MURs and Pre-MURs) filed 

with the Commission. The remainder originated as 

referrals from RAD, Audit or sua sponte submissions. 

Cases not assigned to ADR were returned to OGC for 

processing. 

ADR negotiated settlements focus on promoting 

compliance with the Act and providing committees 

with resources required to remedy past inaccuracies. 

Examples of the terms of ADR settlements include 

requiring attendance at an FEC conference or workshop, preparing a manual to help committee staff 

comply with the Commission’s regulations, and hiring 

outside auditors to review for a specific period of time 

a committee’s financial records.

ADR in 2005

In 2005, the ADR office concluded 91 cases that 

produced 60 separate agreements based on 60 cases. The Commission dismissed 28 of the remaining 

cases and returned three to OGC. Fifty-nine cases 

were assigned to ADRO during the year, and 21 remained open at year’s end.

Results of Compliance Initiatives

 As noted previously, the Commission dedicates a 

substantial portion of it resources to its compliance 

programs. In recent years, this has included an Administrative Fine Program and Alternative Dispute 

Resolution (ADR) program, in addition to the standard enforcement program. Using these three distinct 

compliance tools has allowed the Commission to 

process cases expeditiously, ensuring the agency’s 

limited resources are employed as effectively and efficiently as possible. As a result, the FEC has activated more cases, closed more cases with substantive 

action and resolved some cases that would otherwise 

have been dismissed. 

The standard enforcement program, which is the 

responsibility of the Office of General Counsel (OGC), 

often deals with complex cases involving significant 

violations of the law. The General Counsel has undertaken a number of management and organizational initiatives in the last four years to increase the efficiency of processing matters under review (MURs). 

The results of these initiatives include a more current 

caseload and higher civil penalties. Although a much 

larger percentage of the OGC’s caseload now involves the most factually and legally complex cases, 

MURs have been processed (analyzed, investigated, 

conciliated) much more expeditiously. Specifically, 

MURs closed on average 36 percent faster in 2005 

compared to 2003, and a greater percentage of the 

assigned (or active) caseload now involves the most 

recent election cycle (i.e., 2003-2004). 
Administering the Law 15

This increased efficiency has not come at the cost 

of less effective enforcement. One measure of effectiveness is the cumulative annual amount of civil penalties and fines obtained. By this measure, the FEC’s 

effectiveness continues to grow, as illustrated by the 

following: In the ten years prior to the introduction of 

the Administrative Fine and ADR programs, an average of 204 cases were closed each year with civil 

penalties averaging nearly $900,000 per year. In 

2005, approximately four years after the implementation of the Administrative Fine and Alternative Dispute 

Resolution Programs, 392 cases were closed with 

civil penalties and fines totaling nearly $2.5 million. 

Focusing on the civil penalties obtained in the standard enforcement program, 2005 marks the fourth 

consecutive year with more than $1 million in penalThe ADR program affords both the FEC and the 

respondents the opportunity to resolve cases more 

rapidly, and it provides an opportunity for the Commission to resolve more cases substantively. Since 

the program’s inception on October 1, 2000, the 

ADR Office has formally closed 219 cases, 168 with 

substantive action (77 percent). Those 168 cases 

produced 191 separate negotiated agreements, and 

yielded civil penalties totaling more than $310,000. 

On average, 123 days elapsed from the time a case 

was assigned to ADR until the Commission approved 

the agreement, closing the case. 

The Administrative Fine Program has closed 1,269 

cases since its July 14, 2000, inception and has assessed nearly $2.6 million in civil money penalties for 

cases of late and non-filed reports. In 2005, cases 

were closed on average 209 days from when the 

reports were due to be filed at the FEC. 

For the standard enforcement program itself, from 

2001 to 2005, the FEC closed 129 out of 516 cases 

with civil penalties (25 percent). Of particular note is 

that the FEC’s previous record of dismissing cases 

due to “staleness” has been all but eradicated. From 

ties. 

1995 to 2000, the FEC dismissed as “stale” 21 percent of cases. The year of 2005 was the second year 

in a row in which the FEC did not dismiss a single 

case as stale. As illustrated in Charts 2-1 through 2-

5, the FEC has made significant improvements in its 

compliance programs.

Audit

The Audit Division focused on audits of non-Presidential committees (Authorized and Non-Authorized 

combined) in 2005.1 Audits of non-Presidential committees are initiated in response to referrals from 

RAD that have been approved by the Commission. 

In 2005, the Audit Division closed 35 audits on nonPresidential committees and one audit of a Presidential committee. The division publicly released 17 

audits of non-Presidential committees and one audit 

of a Presidential committee. Seventy audits were 

pending at the end of the year. 

An increased audit presence not only contributes 

to the Commission’s enforcement efforts, but also encourages voluntary compliance among the regulated 

community. Furthermore, the broader scope of the 

audit presence provides the Commission with information that can be used to refine internal procedures 

and regulation.

Litigation

In addition to the high-profile Shays case and 

other notable legal challenges (discussed in Chapter 3), the Commission’s litigation staff resolved two 

notable enforcement matters during 2005. In June 

2005, the U.S. District Court for the Central District of 

Illinois signed a consent judgment in FEC v. Friends 

of Lane Evans et al. reflecting an agreement between 

the Commission and Friends of Lane Evans, the 17th

District Victory Fund and the Rock Island Democratic 

Central Committee. Under the consent agreement, 

the defendants neither admitted nor denied violating 

the Act, but agreed to pay civil penalties. Friends of 

Lane Evans paid a $185,000 civil penalty for violations by the Evans campaign and the 17th District 

Victory Fund, while the Rock Island Democratic Central Committee agreed to a $30,000 civil penalty for 

1

 Audits of non-Presidential committees are also referred to as Title 2 Audits, while audits of Presidential committees are also known as Title 26 Audits.
16 Chapter Three

its role in the violations. FEC v. Democratic Party of 

New Mexico also resulted in a large civil penalty with 

the Democratic Party of New Mexico and its treasurer paying a $60,000 civil penalty and transferring 

$86,900 from the Democratic Party of New Mexico’s 

federal account to its nonfederal account.
 

17 Chapter Three

Legal Issues

The FEC is the independent regulatory agency 

responsible for interpreting, administering, enforcing 

and defending the Federal Election Campaign Act 

(FECA or the Act). As part of this task, the Commission promulgates regulations implementing the Act’s 

requirements and issues advisory opinions (AOs) that 

respond to inquiries from those affected by the law. 

Additionally, the Commission has jurisdiction over 

the civil enforcement of the Act. Finally, Commission 

attorneys handle civil litigation arising out of any legal 

actions brought by or against the Commission. 

During 2005, the Commission devoted much of its 

resources to clarifying the application of the Bipartisan Campaign Reform Act of 2002 (BCRA) in light 

of decisions by the U.S. District Court for the District 

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

D.C. Circuit in Shays v. FEC. This chapter reviews

the major legal issues considered by the FEC in

rulemakings, AOs, litigation and enforcement action

in 2005.

Shays v. FEC

On July 15, 2005, the U.S. Court of Appeals for the 

District of Columbia Circuit upheld the appealed portion of the U.S. District Court for the District of Columbia’s 2004 decision in Shays v. FEC that invalidated 

several Commission regulations. (For details on the 

district court decision, see Annual Report 2004.) In 

its decision, the appeals court found that some of 

the agency’s regulations implementing provisions of 

the BCRA were invalid either because they failed to 

follow Congressional intent or because they did not 

comply with the Administrative Procedure Act’s (APA) 

rules for promulgating regulations. 

On August 29, 2005, the Commission filed with the 

U.S. Court of Appeals for the District of Columbia Circuit a petition for rehearing en banc, but on October 

21, 2005, the court denied that request. 

Background

The standard for judicial review in a case such 

as this, where a party alleges that an agency’s actions are contrary to the statute, is called Chevron review, after the Supreme Court’s decision in 

Chevron, U.S.A., Inc. v. Natural Resources Defense 

Council, 467 U.S. 837 (1984). In Chevron review, the 

court asks first whether Congress has spoken to the 

precise issue at hand. If so, then the agency’s interpretation of the statute must implement Congress’s 

unambiguous intent. If, however, Congress has not 

spoken explicitly to the question at hand, the court 

must consider whether the agency’s rules are based 

on a permissible reading of the statute. 

The courts also consider whether the FEC engaged in a reasoned analysis when it promulgated its 

regulations. Under the APA, regulations that are promulgated without a reasoned analysis may be found 

“arbitrary and capricious” and may be set aside by a 

reviewing court. 5 U.S.C. §706(2)(A). 

Appeals Court Decision

In response to the district court’s 2004 decision, 

the Commission took immediate action to bring its 

regulations into compliance, while it simultaneously 

appealed certain portions of the court’s ruling. Specifically, the Commission asked the appeals court to 

overturn the district court’s invalidation of the coordinated communications content test; the definitions 

of “solicit” and “direct”; the requirement that electioneering communications be distributed for a fee; 

the provisions for paying the salaries and wages of 

state party committee employees; and the exemption 

allowing certain de minimis federal election activity 

(FEA)1 expenses to be paid for entirely with Levin 

funds.2

Although the appeals court affirmed the district 

court’s decision to invalidate each of the regulations 

addressed in the Commission’s appeal, its rationale 

for doing so differed in some instances. While the 

district court concluded that the Commission’s rules 

on coordinated communications, salary allocation 

1

 FEA is a specifically defined term created by the 

BCRA that triggers certain payment and reporting requirements. 11 CRF 100.24(b). 2 Levin funds, a type of nonfederal funds raised only by 

state, district or local political party committees, are limited 

to donations of $10,000 per calendar year and may be 

raised from sources otherwise prohibited by the Federal 

Election Campaign Act (except foreign nationals). 11 CFR 

300.31.
18 Chapter Three

and the de minimis exception failed Chevron review, 

the appeals court found only the justification for the 

rules lacking under the APA. The courts agreed that 

regulation of electioneering communications and 

the definitions of “solicit” and “direct” failed Chevron

review. 

After the D.C. Circuit declined to rehear the appeal en banc, the Commission announced that it 

would expedite work on the affected regulations and 

complete the necessary revisions in time to be effective during the 2006 election cycle. By the end 

of 2005, the Commission had approved final rules in 

four rulemakings.3 The sections that follow detail the 

Commission’s progress.

De Minimis Exemption for the Disbursement of Levin 

Funds by State, District and Local Party Committee

Of the five regulations considered by the appeals 

court, the “de minimis exemption” was the first to be 

revised. The Commission had created the exemption to permit state, district or local party committees 

whose disbursements for certain types of FEA aggregate $5,000 or less in a calendar year to pay for 

those expenses entirely with Levin funds. 11 CFR 

300.32(c)(4). 

In January 2005, the Commission approved an 

NPRM to eliminate or modify the exemption. On November 10, 2005, after considering public comments 

and the appeals court’s decision upholding the district court’s conclusion, the Commission promulgated 

final rules that eliminate the $5,000 de minimis exemption. The revised rules require state, district and 

local committees and organizations of political parties to pay for the affected types of FEA either entirely 

with federal funds or with an allocation of federal and 

Levin funds without regard to their total amount of 

annual disbursements. The rules took effect on December 19, 2005. 

Salaries and Wages of State, District and Local Party 

Committees

On December 1, 2005, the Commission voted 

to amend its rules to permit state, district and local 

party committees to pay as allocable administrative 

expenses the salaries, wages and fringe benefits 

of employees who spend 25 percent or less of their 

compensated time in a month on FEA or activity in 

connection with a federal election (“covered employees”). The Commission’s vote culminated a 

rulemaking process that began with approval of an 

NPRM on April 28, 2005, followed by a public hearing 

on August 4, 2005.

After considering public comments and testimony 

from a public hearing and the Shays courts’ decisions, the Commission issued final rules that:

•Require state party committees either to pay the

salaries and wages of covered employees entirely

from a federal account or allocate the salaries and

wages between their federal and nonfederal accounts as administrative costs using the allocation

ratios at 106.7(d)(2)(i) through (iv);

•Establish that salaries and wages paid to employees who spend none of their compensated time in

a given month on FEA or activities in connection

with a federal election may be paid entirely with

nonfederal funds;

•Allow state party committees to use federal funds

raised at a federal/nonfederal fundraiser to pay for

FEA provided that the direct costs of the fundraiser

are paid entirely with federal funds or are allocated

according to the “funds received” method; and

•Make clear that a state party committee that raises

only federal funds at a fundraising activity must pay

the entire direct costs of the fundraising activity with

federal funds.

The revised rules also supersede AO 2003-11 to 

the extent that it allowed party committees to pay 

fringe benefits using only nonfederal funds. The rules 

now require committees to pay fringe benefits as 

administrative expenses.

Electioneering Communications

On December 15, 2005, the Commission approved 

revised rules on electioneering communications (EC) 

to comply with the Shays decisions. The vote was 

3 The Commission concluded the final five rulemakings 

by April 7, 2006.
 

19 Legal Issues

the culmination of a rulemaking process that began 

with the issuance of an NPRM in August 2005, and 

included a public hearing on October 20, 2005. Also 

during the year, the Commission issued an AO applying the press exemption to the EC rules, and the Supreme Court agreed to hear Wisconsin Right to Life’s 

challenge of the ban on corporate financing of ECs. 

Rulemaking

The revised EC rules eliminate an exemption for 

501(c)(3) organizations and redefine “publicly distributed” to exclude the requirement that ECs be distributed “for a fee.” 

In order to qualify as an EC a communication must 

be “publicly distributed.” The Commission had defined “publicly distributed” as “aired, broadcast, cablecast, or otherwise disseminated for a fee.” 11 CFR 

100.29(b)(3)(i) (emphasis added). In its final rules, 

the Commission removed “for a fee” from the regulatory definition so that any communication “aired, 

broadcast, cablecast or otherwise disseminated 

through the facilities of a television station, radio station, cable television system or satellite system,” if not 

otherwise exempted, is subject to EC regulations.4 

Advisory Opinion

In AO 2005-19, the Commission ruled on the application of the press exemption to ECs. The Commission determined that an incorporated production 

company may broadcast a radio program that references clearly identified federal candidates, even if it 

airs within 30 days of a primary election or 60 days 

of a general election in the jurisdiction in which those 

candidates are running, because its proposed activities fall within the press exemption. 

Corporations are generally prohibited from making or financing ECs. However, the EC definition 

exempts communications that appear in “a news 

story, commentary, or editorial distributed through the 

facilities of any broadcast, cable, or satellite television or radio station.” Additional restrictions apply 

if these facilities are owned or controlled by a political party, political committee or candidate. 11 CFR 

100.29(c)(2). The Commission concluded that the 

production company qualifies for the press exemption and may finance its programs by selling advertising time. 

Wisconsin Right to Life v. FEC

On September 27, 2005, the Supreme Court 

agreed to hear Wisconsin Right to Life’s challenge to 

the ban on corporate financing of ECs. The plaintiff 

asked the Court to find the ban unconstitutional as 

applied to certain grass-roots lobbying activities. 

Earlier in the year, a three-judge panel of the U.S. District Court for the District of Columbia had dismissed 

the case, with prejudice, finding that the Supreme 

Court’s decision in McConnell precluded the plaintiff’s 

challenge.5

Definition of “Solicit” and “Direct”

As noted above, the Shays courts held that the 

Commission’s definitions of “to solicit” and “to direct” 

were invalid under Chevron. To comply with the court 

decisions, the Commission published an NPRM on 

September 28, 2005. At its November 15, 2005, public hearing, the Commission heard testimony from 

witnesses supporting and opposing the proposed 

rules.6

Coordinated Communications

On December 8, 2005, the Commission approved 

an NPRM proposing changes to the so-called “content prong” of the three-part regulatory test for coordinated communications. 11 CFR 109.21(c)(4). The 

proposed rules comply with the Shays decisions that 

invalidated one aspect of the content prong. 

To satisfy the content prong a communication must 

either be: 

•An electioneering communication;

•A republication of candidate materials;

•An express advocacy message; or

4

 The revised EC rules took effect on January 20, 2006.

5

 The case was argued on January 17, 2006, and remanded to the district court on January 23, 2006. 6

 The Commission published revised definitions of 

“solicit” and “direct” in the Federal Register on March 20, 

2006 (71 FR 13926). The rules took effect on April 19, 

2006.
20 Chapter Three

•A public communication that refers to a federal candidate and is publicly distributed to voters in his/her

district within 120 days of the election.

The district court in Shays found that the content 

prong failed Chevron review. The appeals court 

disagreed, concluding, instead, that “no persuasive 

justification for . . . the 120-day timeframe,” had been 

supplied.

In response to the court’s decision, the Commission published an NPRM that presented seven alternatives to address the court’s concerns. The options 

include retaining the current rule but revising the E&J 

to further justify the 120-day timeframe, amending the 

120-day timeframe to one which is more inclusive of

public communications intended to influence federal

elections and eliminating the content standard altogether.7

Definition of Federal Election Activity (FEA)

As part of its Shays decision, the district court 

invalidated portions of the definition of FEA that 

describe voter registration activity, get-out-the-vote 

activity (GOTV) and voter identification. With regard 

to voter registration and GOTV, the court found the 

definitions were improperly promulgated under the 

APA because the initial NPRM did not indicate that 

the definitions would be limited to activities that “assist” individuals in registering or voting. The court 

also invalidated the portion of the current definition of 

GOTV that excludes communications by associations 

or similar groups of state or local candidates and/or 

officeholders that refer only to state or local candidates. With regard to the existing definition of voter 

identification, the court invalidated the exclusion of 

voter list acquisition and of the activities of groups of 

state and local candidates/officeholders. 

The Commission proposed rules to conform to the 

court’s ruling and held a public hearing on August 4, 

2005, to receive testimony on its proposals.8

 

7

 The Commission voted to approve final rules on coordinated communications on April 7, 2006. 8

 The Commission published revisions to the definition 

of “FEA” in the Federal Register on February 22, 2006 (71 

FR 8926). The Commission published interim final rules on 

the definition of “FEA” on March 22, 2006 (71 FR 14357). 

Both final and interim rules were effective March 24, 2006.

Definition of “Agent”

In another Shays rulemaking, the Commission 

approved an NPRM on January 27, 2005, requesting 

comments on how the Commission should respond 

to the district court’s concerns about the definitions 

of “agent” used in the regulations on coordinated 

and independent expenditures and the regulations 

regarding nonfederal funds. The NPRM proposed 

several alternatives to conform to the district court’s 

decision in Shays, including retaining the existing rule 

and revising its Explanation and Justification.

The existing regulations defined agent as “any 

person who has actual authority, either express or 

implied” to perform certain, specified actions, but did 

not include persons acting only with apparent authority. 11 CFR 109.3 and 300.2(b). The Commission 

held a public hearing on May 17, 2005, to receive 

testimony on the proposed rules.9

Candidate Solicitation at State, District and Local Party 

Fundraising Events

Under the Act, federal candidates, officeholders and their agents may not solicit, receive, direct, 

transfer or spend nonfederal funds in connection 

with federal or nonfederal elections. However, the Act 

permits them to speak or be featured guests at state, 

district and local party fundraisers, where nonfederal 

funds may be raised. 

The Commission had promulgated regulations that 

permit federal candidates and officeholders to speak 

at such fundraisers “without restriction or regulation.” However, in Shays the district court found that, 

although this regulation was a permissible interpretation of the statute, the Commission had not satisfied 

the APA’s “reasoned analysis” requirement.

In response, the Commission approved an NPRM 

on February 14, 2005, seeking comments on proposals either to revise the Explanation and Justification 

(E&J) for this rule or to revise the rule itself. On May 

17, 2005, the Commission held a public hearing to 

receive testimony on the proposals. Having consid9

 The revised E&J on the definition of “agent” was published in the Federal Register on January 31, 2006 (71 FR 

4975). The final rules were effective on January 31, 2006.
21 Legal Issues

ered that feedback, the Commission chose to keep 

the existing regulation, and revise the E&J to explain 

more fully its rationale. 

The Commission also considered several AOs during 2005 that applied the restrictions on nonfederal 

activity by federal candidates. (Please refer to the 

section on Soft Money for more details on these 

AOs.)

Internet Communications

The district court in Shays held that the Commission’s definitions of “public communication” and 

“generic campaign activity” impermissibly exclude 

all Internet communications. On March 24, 2005, the 

Commission approved proposed rules that would 

define paid Internet ads as “public communications.” 

The NPRM also republished and invited comments 

on the current definition of “generic campaign activity.” In addition, the Commission addressed the application of the press exemption to web sites in AO 

2005-16.

Rulemakings

The proposed addition of paid Internet ads to the 

definition of “public communication” would affect 

all other Commission rules that incorporate the term 

“public communication.” In addition to the definition 

of “generic campaign activity,” these would include 

rules governing state, district and local party committees and disclaimers. 

The NPRM also invited comments on proposals to:

•Modify the Commission’s rules as to which Internet

communications require disclaimers;

•Add new rules specifically excepting certain volunteer activity on the Internet from the definitions of

“contribution” and “expenditure”; and

•Expressly exempt from the definitions of “contribution” and “expenditure” certain media activity over

the Internet.

The rules proposed in the NPRM were intended 

primarily to ensure that political committees properly 

finance and disclose their Internet communications, 

without impeding individual citizens from using the 

Internet to speak freely regarding candidates and 

elections.

On June 28 and 29, 2005, the Commission hosted 

public hearings on its proposed rules. Twenty witnesses, including bloggers, students, economists, 

campaign finance attorneys and representatives from 

non-profit political organizations, offered opinions as 

to how the proposed rules could affect Internet activity.10

Advisory Opinion

In AO 2005-16, the Commission decided that the 

costs that a limited liability company (LLC) incurs to 

cover or carry news stories, commentary or editorials on its web sites are encompassed by the press 

exemption, and therefore do not constitute “expenditures” or “contributions” under the Act and Commission regulations.

The Act and FEC regulations define “contribution” and “expenditure” to include “anything of value 

made by any person for the purpose of influencing” a 

federal election. 2 U.S.C. §431(8)(A)(i) and (9)(A)(i). 

Costs incurred in covering or carrying news stories, 

editorials and commentary by any broadcasting station, newspaper or magazine are exempt from these 

definitions. 11 CFR 100.73 and 100.132; 2 U.S.C. 

§431(9)(B)(i). This exemption is commonly known as

the “press exemption.”

To be eligible for the press exemption, the entity 

first must qualify as a press entity and act as a press 

entity in conducting the activity at issue. The Commission considers whether the entity’s materials are 

available to the general public and are comparable in 

form to those it ordinarily issues. Second, the entity 

must not be owned or controlled by a candidate, political committee or political party. The Commission 

found that the requesting LLC qualifies as a press 

entity, noting that: 

•Its web sites are available to the general public and

are the online equivalent of a newspaper, magazine

or other periodical publication;

•A primary function of the web sites is to provide

news and information to readers;

10 The Commission published final rules on Internet 

communications in the Federal Register on April 12, 2006 

(71 FR 18589). The effective date for the final rules was 

May 12, 2006.
22 Chapter Three

•The LLC retains editorial control, produces many of

the stories that appear on the web sites and exercises day-to-day control over all content; and

•Reader comments are similar to letters to the editor.

Moreover, the LLC is neither owned nor controlled

by any political party, political committee or candidate. The operation of its web sites is at the core of 

its activities as a press entity. 

Payroll Deductions for Contributions to

Trade Association SSF

On July 14, 2005, the Commission voted to revise 

its rules to allow corporate members of a trade association to provide incidental services, including 

the use of a payroll deduction or checkoff system, to 

collect and forward voluntary employee contributions 

to the trade association’s separate segregated fund 

(SSF). The rules require any member corporation that 

provides such incidental services, and the corporation’s subsidiaries, divisions, branches and affiliates, 

to make the same services available to a labor organization representing employees of the corporation 

or the corporation’s subsidiaries, divisions, branches 

or affiliates, at cost, upon written request of the labor 

organization.

The revised rules recognize the special relationship between an association and its corporate members. A trade association has long been permitted to 

solicit contributions to its SSF from a corporate member’s stockholders and executive and administrative 

personnel and their families (the restricted class), 

so long as the corporation approves the solicitation 

ahead of time and does not approve a solicitation by 

any other trade association for the same calendar 

year. Before this rulemaking, however, the regulations did not allow member corporations to use a 

payroll deduction or checkoff system to collect contributions for a trade association PAC. 

The Commission’s action came in response to a 

rulemaking petition from America’s Community Bankers and its SSF, the America’s Community Bankers 

Community Campaign Committee. Public comments 

on the petition and the Commission’s proposed rules 

supported the change. 

Contributions

Under the Act, individuals and groups are limited 

in the amounts they may contribute to candidates for 

federal office and to the political committees which 

support them. 11 CFR 110.1, 110.2, and 110.3. Further, political committees may not retain contributions 

that exceed the donor’s contribution limit. In 2005, 

the Commission closed two enforcement matters 

regarding contribution limits and prohibitions and 

revised its rules on contributions from minors in response to the McConnell v. FEC decision. 

Contributions in the Name of Another and Corporate 

Contributions

In MUR 5405, the Commission entered into a conciliation agreement with APEX Healthcare Inc. (APEX) 

and its President and sole shareholder, James Chao. 

In the agreement, the Company and Mr. Chao agreed 

to pay a civil penalty of $275,000 for violations of the 

Act, including corporate contributions and contributions in the name of another.

The Commission found that in 2003 APEX and Mr. 

Chao used corporate funds to reimburse $69,500 in 

contributions that were made in the names of others 

to Hynes for Senate (the committee for Daniel Hynes’ 

Democratic primary campaign in Illinois) and made 

a direct $1,500 in-kind contribution to the committee. 

APEX and Mr. Chao also used corporate funds to 

reimburse a total of $6,000 in contributions that were 

made in the names of others to three other federal 

political committees in 2002.

The Act prohibits corporations from making contributions or expenditures from their general treasury 

funds in connection with any election of any candidate for federal office. The Act also prohibits any 

officer or director of any corporation from consenting 

to any expenditure or contribution by the corporation. 

2 U.S.C. §441b(a). In addition, it is unlawful for any 

person to make a contribution in the name of another, 

or for any person knowingly to permit his or her name 

to be used to make such a contribution. 2 U.S.C. 

§441f. In the conciliation agreement, APEX and Mr.

Chao admitted to violating the Act by reimbursing

contributions with corporate funds and by making an

in-kind contribution with corporate funds. Additionally,
23 Legal Issues

the Commission found reason to believe Mr. Chao’s 

violations were knowing and willful, though Mr. Chao 

neither admitted nor denied that the violations were 

knowing and willful in the conciliation agreement. 

The Commission found no reason to believe that 

the Hynes for Senate committees was aware of the 

actual source of the funds, and took no action with 

respect to the other three recipient committees. They 

have been instructed to disgorge the illegal contributions to the U.S. Treasury. The FEC also admonished 

Hynes for Senate for failing to report an in-kind contribution it received, and also admonished the conduits 

used for the corporate contributions for knowingly 

allowing their names to be used as donors for the 

corporate reimbursements.

This conciliation agreement involves the first knowing and willful violations of section 441f of the Act that 

the Commission has settled through conciliation under the new BCRA provisions. The BCRA imposed a 

new minimum civil penalty equal to 300 percent, and 

a new maximum civil penalty equal to 1,000 percent, 

of the amount in violation in cases where the Commission believes a knowing and willful violation has 

been committed. Prior to the passage of the BCRA, 

the civil penalty for knowing and willful violations of 

the Act was not subject to a statutorily mandated 

minimum amount, and the maximum civil penalty 

that could be sought was equal to 200 percent of the 

amount in violation.

Excessive and Prohibited Contributions

In MUR 5428, the Commission entered into a 

conciliation agreement with the Republican Party of 

Arkansas (the Committee) and Charles Mazander, 

as the Committee’s treasurer. This agreement stems 

from an investigation that was initiated following a 

Commission audit of the Committee.11

11 As part of MUR 5428, the Commission also reached 

a conciliation agreement with Potlach Corporation, which 

violated the Act by making a corporate contribution. The 

contribution was later refunded. 2 U.S.C. §441b(a). Potlach 

Corporation agreed to pay a $2,500 civil penalty and to disgorge to the U.S. Treasury an amount equal to the $5,000 

refunded contribution.

The Commission found multiple violations of the 

Act during the 1999-2000 election cycle, including 

the Committee’s acceptance of excessive and prohibited contributions, its failure to properly account 

for more than $2 million in media and other expenses 

for joint federal and nonfederal activity which resulted 

in the excessive use of impermissible funds for those 

expenses, and its failure to submit required disclosure information to the Commission and to maintain 

required records. The agreement required payment 

of a $360,000 civil penalty and further required the 

Committee to submit annual independent financial 

audits at Committee expense for five years.

The Act prohibits political committees from knowingly accepting contributions in excess of the Act’s 

limitations. 2 U.S.C. §441a(f). During the 1999-2000 

election cycle, the Committee received contributions 

totaling $28,500 from six individuals that exceeded 

the contribution limits. The Committee did not refund 

these contributions or pursue other remedies. 

The Act also prohibits a political committee from 

knowingly accepting or receiving prohibited contributions, including corporate contributions. 2 U.S.C. 

§441b(a). During this election cycle, the Committee

accepted prohibited corporate contributions from two

sources totaling $11,500.

Final Rules on Contributions by Minors

On January 27, 2005, the Commission approved 

final rules regarding contributions and donations by 

minors to candidates and political committees. The 

rules, which took effect on March 7, 2005, conform to 

the Supreme Court’s decision in McConnell v. FEC. In 

that decision, the Court found unconstitutional a provision of the BCRA that barred minors from making 

contributions to candidates or from making contributions or donations to political party committees. 

The practical effect of the amended regulations is 

to return the rules to their pre-BCRA state. The final 

regulations provide that an individual under 18 years 

old may make contributions to candidates and party 

committees if:

•The decision to contribute is made knowingly and

voluntarily by the minor;

•The funds, goods or services contributed are owned

or controlled by the minor, such as income earned
24 Chapter Three

by the minor, proceeds from a trust for which he or 

she is a beneficiary or funds withdrawn by the minor 

from a financial account opened and maintained in 

his or her name; and

•The contribution is not made from the proceeds of a

gift given for the purpose of making the contribution

and is not in any other way controlled by another

individual. 11 CFR 110.19.

Note that the Commission has made one substantive change from the pre-BCRA regulations by removing the requirement that a minor “exclusively” own 

or control the funds, goods or services contributed. 

Maintaining the exclusivity requirement would have 

limited some minors from contributing their personal 

funds simply because they maintained their financial 

accounts in a place where an adult co-signatory was 

required for such accounts. 

Political Committee Status, Definition of 

Contribution and Allocation for PACs

During 2005, the Commission was involved in four 

lawsuits related to political committee status. Three of 

the four arose from a rulemaking in 2004 that required 

groups to treat as federal funds the proceeds of solicitations that indicate receipts will be used to support 

a federal candidate. The new rules also increased 

the proportion of federal funds committees must use 

when paying for certain allocable expenses. These 

regulatory changes could trigger FEC registration for 

some groups that previously have not qualified as 

political committees. 

EMILY’s List, a registered nonconnected committee, initiated a court challenge against the rules contending, in part, that the Commission had exceeded 

its authority. Almost simultaneously, the Congressional sponsors of the BCRA and the Bush/Cheney 

campaign filed suit arguing that the Commission had 

not gone far enough to reign in campaign activity by 

unregistered groups.

Meanwhile, in September 2005, the Commission 

itself filed a lawsuit challenging the Club for Growth’s 

failure to register as a political committee. 

EMILY’s List v. FEC

The EMILY’s List suit alleged that the Commission’s 

solicitation and allocation rules violate the APA and 

the First Amendment, and asked the court to enjoin 

the Commission from administering or enforcing the 

regulations. 

Specifically, the rules in question define as “contributions”:

The rules also provide that a PAC that maintains 

federal and nonfederal accounts must use at least 50 

percent federal funds to pay for administrative and 

voter drive expenses and the costs of public communications that refer to a political party, but not to any 

clearly identified candidate. Voter drives and communications that refer to a clearly identified federal 

candidate, but no clearly identified state candidate, 

must be paid for entirely with federal funds.

On February 25, 2005, the U.S. District Court for 

the District of Columbia denied EMILY’s List’s request 

for a preliminary injunction, and on December 22, 

2005, the U.S. Court of Appeals for the District of 

Columbia Circuit upheld that decision. 

In denying the preliminary injunction, the district 

court concluded that there was not a substantial 

likelihood that EMILY’s List would win the case on its 

merits, nor would it or other interested parties suffer 

irreparable injury if the injunction were not granted. 

Ultimately, the district court wrote, “the interests of 

both Defendant and the public would be disserved 

by the granting of Plaintiff’s motion.” Thus, the court 

ordered that EMILY’s List’s motion for a preliminary 

injunction be denied, and the D.C. Circuit later held 

that the district court had not abused its discretion in 

denying the injunction.

The case on the merits was fully briefed and pending before the district court at year’s end.

•All funds received in response to a communication

that indicates that any portion of the funds received

will be used to support or oppose the election of a

clearly identified federal candidate; and

•At least 50 percent of the funds received from such

a communication if it refers to both federal and

nonfederal candidates.
25 Legal Issues

Advisory Opinion

After the Court denied its motion for preliminary 

injunction regarding the new regulations, EMILY’s List 

requested an AO to clarify the application of the new 

rules to its activities. In AO 2005-13, the Commission determined that EMILY’s List must use federal 

funds to pay for at least half of its administrative and 

generic voter drive expenses and communications 

that refer to a political party. Communications that 

refer to a clearly identified federal candidate must be 

financed exclusively with federal funds. In addition, 

EMILY’s List must treat as federal contributions the 

proceeds of any communication that indicates a portion of the funds received will be used to support the 

election of a clearly identified federal candidate.

Shays and Meehan v. FEC (Shays II) and 

Bush-Cheney ’04 v. FEC

While EMILY’s List argued that the Commission’s 

rules exceeded the agency’s authority, the Congressional sponsors of the BCRA and the Bush-Cheney 

campaign filed suit against the FEC for failing to issue 

more restrictive regulations interpreting the statutory 

definition of “political committee,” especially as applied to nonprofit organizations that qualify for tax exemption under 26 U.S.C. §527. (See November 2004 

Record.) In 2005, summary judgment briefs were 

submitted from both sides, but the case remained 

pending at year’s end.

FEC v. Club for Growth, Inc.

On September 19, 2005, the Commission asked 

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

to find that Club for Growth, Inc. violated the Act by 

failing to register with the FEC after meeting both the 

statutory definition of “political committee” and the 

“major purpose” test established by the Supreme 

Court.

The Act requires groups that receive contributions 

or make expenditures in excess of $1,000 during a 

calendar year, to register as a political committee. 2 

U.S.C. §§ 431(4), 433. In its landmark Buckley v. Valeo decision, the Supreme Court further defined the 

term “political committee” to include groups whose 

major purpose is to influence the election of candidates to office. 424 U.S. 1, 79 (1976).

Based on an investigation triggered by an administrative complaint, the Commission determined that 

the Club met the $1,000 threshold for registration as 

a political committee by spending millions of dollars 

on federal campaign activity during the 2000, 2002 

and 2004 election cycles, and by soliciting funds 

from donors indicating their funds would be spent 

to help elect or defeat specific federal candidates. 

The Club encouraged large donations from federally 

prohibited sources, and accepted many contributions from individuals that exceed the Act’s $5,000 

per year contribution limit on contributions to political 

committees. Some of the Club’s solicitations clearly 

indicated that the funds received would be used to 

support or oppose specific federal candidates. As a 

result, those contributions apply towards the political 

committee registration threshold. See FEC v. Survival 

Education Fund, Inc., 65 F.3d 285, 295 (2d Cir. 1995).

The Commission found that the largest component of the Club’s expenditures during the last three 

election cycles was political advertising, and that 

many of its ads contained messages that expressly 

advocated the election or defeat of clearly identified 

federal candidates. Based on those ads alone, the 

Commission alleges that the Club triggered political 

committee status in August 2000, at the latest. 

The case was pending at year’s end.

Millionaires’ Amendment

On July 26, 2005, the Commission announced civil 

penalties totaling $54,000 in the first two enforcement cases to arise from the so-called “Millionaires’ 

Amendment.” Enacted as part of the BCRA, the Millionaires’ provision increases, in some cases, the individual contribution limits and the coordinated party 

expenditure limits for qualified candidates whose 

opponent’s personal spending on the campaign exceeds certain threshold amounts. 

Background 

Under the Millionaires’ provisions, a candidate registering to run for a House or Senate seat must disclose on his/her Statement of Candidacy (FEC Form 

2) the amount by which he/she expects to exceed the

applicable $350,000 personal spending threshold. 2
26 Chapter Three

U.S.C. §434(a)(6)(B)(ii); 2 U.S.C. §441a-1(b)(1)(B); 11 

CFR 400.20. 12 Then, within 24 hours after exceeding 

the personal spending threshold, the candidates (or 

their campaign committees) must notify the Commission, and each opposing candidate. House candidates must also notify the national party committee 

of each candidate in the election. The opposing 

candidates then use that information to calculate the 

“opposition personal funds amount” (OPFA), which 

compares the overall funding of the campaigns to 

determine whether they qualify for increased limits. 

Under the Millionaires’ provisions, an expenditure 

of personal funds includes not only direct candidate 

expenditures in connection with the campaign but 

also campaign loans secured by the candidate’s 

personal funds. In addition to including loan amounts 

in a potential Form 10 filing, under the Act’s reporting requirements, political committees must report all 

loans on Schedule C and file a Schedule C-1 with the 

first report due after a new loan is obtained by either 

the committee or the candidate to demonstrate that 

the loan was obtained in accordance with normal 

lending practices.

MUR 5623

On July 18, 2005, the Commission entered into a 

conciliation agreement with the Mike Crotts for Congress Committee, Inc. and Vicki Gibbs, in her official 

capacity as committee treasurer (Respondents). The 

agreement established that Mr. Crotts failed to complete the declaration of intent to expend personal 

funds when he registered as a candidate. Further, 

after receiving a letter from RAD notifying him of the 

omission and filing an amended form declaring his 

intent to spend no personal funds above the threshold, the Crotts campaign received a $400,000 bank 

loan drawn on Mr. Crotts’s personal home equity line 

of credit. Although the loan amount exceeded the 

$350,000 personal spending threshold, the required 

FEC Form 10 was not filed in a timely manner, and 

then only after further correspondence from RAD. In 

addition, the campaign committee did not subsequently file the required Schedule C-1 disclosing the 

details of the loan.

The conciliation agreement requires the Respondents to pay a civil penalty of $40,000 and to cease 

and desist from future violations of the Millionaires’ 

provisions and other regulations involved in this case.

MUR 5488

On July 12, 2005, the Commission entered into a 

conciliation agreement with Brad Smith for Congress, 

James Bailey in his official capacity as treasurer 

and Bradley Smith (Respondents). According to the 

agreement, Mr. Smith’s opponent, Gene DeRossett, 

expended $451,000 in personal funds and subsequently filed the required Form 10. In calculating the 

OPFA, the Respondents used the correct formula, 

but they mistakenly included only net loans from the 

candidate to determine Mr. Smith’s own personal 

expenditures, rather than the gross amount of those 

loans. By using the lesser amount in the calculation, 

the Respondents erroneously believed they were 

eligible for increased contribution limits and, in fact, 

accepted $40,500 in contributions above the correct 

limits.

The agreement requires the Respondents to refund or obtain reattribution for all contributions they 

received that exceeded the correct limits, to pay a 

civil penalty of $14,000 and to cease and desist from 

violating 2 U.S.C. §441a(f). 

Soft Money

With limited exceptions, the BCRA barred national 

party committees, federal candidates and officeholders from raising or spending soft money. In 2005, 

several federal officeholders requested AOs from the 

Commission asking for permission to raise funds outside of the limitations and prohibitions of the Act for 

nonfederal campaigns. Based on various exceptions, 

most were able to do so.

In AO 2005-2, Senator Jon Corzine qualified for the 

regulatory exemption that allows a federal candidate/

officeholder to raise funds outside of the limitations 

and prohibitions of the Act for his/her own nonfederal 

campaign, in this case for governor. However, the 

12 Note that the threshold amount for House candidates 

is $350,000, while the threshold amounts for Senate races 

vary based on the voting-age population of the state.
27 Legal Issues

exemption is limited to the federal candidate’s own 

campaign and the Commission determined that any 

funds the Senator and his agents raise for other state 

and local candidates or committees must comply 

with federal law. Commission regulations do allow 

federal candidates and officeholders to appear at a 

state or local party fundraiser and solicit donations 

without regard to the amount limitations and source 

prohibitions of the Act.

The Commission reached similar conclusions in 

AO 2005-5, determining that U.S. Representative 

Ray LaHood, a federal candidate and officeholder 

exploring a gubernatorial candidacy, could use funds 

remaining in his gubernatorial exploratory commit-

tee’s account to make donations in connection with 

nonfederal elections because the funds in this ac-

count were raised in accordance with the applicable 

provisions of state law and with the Act’s contribution 

limits and source prohibitions. Exploratory committee 

funds could also be refunded to donors and donated 

to charitable organizations that do not engage in 

election activity.

Finally, in AO 2005-12 the Commission ruled that 

U.S. Representative Fattah could raise and spend 

funds for his potential mayoral campaign that exceed 

the Act’s contribution limits. The funds must only be 

raised and spent for activities that refer to his candi-

dacy for mayor of Philadelphia and/or others seeking 

that office and the amounts and sources of the funds 

must be consistent with state law. 

The Commission also received an AO request 

from two federal candidates/officeholders interested 

in raising nonfederal funds for state ballot initiatives 

not related to their own campaigns. In AO 2005-10 

the Commission concluded that U.S. Representatives 

Howard L. Berman and John T. Doolittle could so-

licit nonfederal funds for ballot measure committees 

formed solely to support or oppose ballot initiatives 

on the California special election ballot. (No federal 

candidates were on the ballot in the special election.) 

The ballot measure committees were not directly or 

indirectly established, financed, maintained or con-

trolled by Representative Berman or Representative 

Doolittle, by anyone acting on their behalf or by any 

political party committee.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

29 Chapter Four

Presidential Public Funding

Public funding has been a key part of our Presidential

election system since 1976. The program is funded

by the $3 tax checkoff and administered by the FEC.

Through the public funding program, the federal government provides matching funds to candidates seeking

their party’s Presidential nomination, financing for Presidential nominating conventions and grants to Presidential nominees for the general election campaigns. For

the 2004 Presidential elections, the Commission certified

ten candidates and two convention committees eligible

to receive public funding.

2004 Shortfall

In past Presidential election cycles, the Presidential

Election Campaign Fund (the Fund) experienced a temporary shortfall in matching funds, requiring the Fund

to make pro-rata payments to candidates until sufficient

deposits were received. For several years, the Commission has urged Congress to help alleviate the shortfall

problem. Possible solutions have included increasing

the checkoff amount and revising the “set aside” provision under which funds must be set aside for general

election and convention financing before any monies

can be used for primary matching payments.

Early projections by the Commission indicated that

January 2004 payments to eligible candidates in the

2004 primaries could be less than 20 percent of the

amount certified, even if one major party candidate did

not take federal matching funds. However, three major party candidates—Howard Dean, John Kerry and

President Bush—chose not to participate in the matching payment program, and the U.S. Treasury successfully made the January payments of $15.4 million to six

eligible Presidential candidates. The only shortfall that

occurred in the 2004 cycle took place in February, when

candidates received approximately 46 cents per dollar

certified.1

The Commission projects that the fund is likely to 

face major deficits in timely payments in the 2008 

election. The Commission is concerned that the potential for a totally open primary in both major parties 

in 2008 will further exacerbate the potential shortfall. 

Repayment of Public Funds—2004 Election

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

that received public funds to ensure that they have 

used those funds only for permissible purposes and 

that they maintained proper records and filed accurate reports. These audits are mandated under the 

Presidential Primary Matching Payment Account Act 

(Matching Fund Act) and Presidential Election Campaign Fund Act. An audit may find that a candidate 

or committee exceeded its expenditure limits, spent 

funds on nonqualified campaign expenses or ended 

the campaign with a surplus. In such instances, the 

Commission may require the candidate or committee to repay the U.S. Treasury. The Commission may 

also determine that repayment is required if it finds 

that contributions initially thought to be matchable 

were later determined to have been nonmatchable. 

Such determinations may or may not result from the 

FEC’s audit of the committee. 

The FEC plans to make final determinations in 

2006 regarding the repayment amounts for publicly 

funded candidates in the 2004 Presidential elections. 

During 2005, the Audit Division completed preliminary audit reports for six of the eight publicly-funded 

primary candidates who ran in 2004. The Commission also completed preliminary audit reports for the 

two convention committees and the two host committees. 

Sharpton Committee

On December 9, 2005, Alfred C. Sharpton agreed 

to repay the $100,000 in public funds he had received in 2004 under the Matching Fund Act, plus 

interest. In March 2004, the Commission certified that 

Rev. Sharpton’s committee was eligible to receive an 

initial $100,000 in matching funds. Since the committee’s disclosure reports revealed that Rev. Sharpton 

was close to exceeding the $50,000 personal expenditure limitation, the Commission opened an investi1

 In the 2004 election, a total of eight candidates were 

certified for Primary Matching funds: Wesley K. Clark, John 

R. Edwards, Richard A. Gephardt, Dennis J. Kucinich, Lyndon H. LaRouche, Jr., Joseph Lieberman, Ralph Nader and

Alfred C. Sharpton. The Commission later rescinded Rev.

Sharpton’s certification because he exceeded the personal

expenditure limit.
30 Chapter Four

gation to resolve whether he had exceeded this limitation. After the committee filed a disclosure report 

containing information suggesting that the candidate 

had exceeded the $50,000 personal expenditure limitation, the Commission suspended further matching 

fund payments to the Sharpton committee, pending 

an administrative review.

During that review, the Commission determined 

that Rev. Sharpton knowingly and substantially exceeded his personal expenditure limitation prior to his 

application for matching funds. All matching funds 

received by Rev. Sharpton were in excess of his entitlement because Rev. Sharpton was never eligible 

to receive matching funds. Therefore, in April 2005, 

the Commission determined that Rev. Sharpton must 

repay the $100,000 plus interest to the U.S. Treasury. 
31 Chapter Five

The Commission

Commissioners

During 2005, Scott Thomas served as Chairman 

of the Commission and Michael Toner served as Vice 

Chairman. On December 15, 2005, the Commission 

elected Commissioner Michael Toner as its Chairman 

and Commissioner Danny Lee McDonald as its Vice 

Chairman for 2006. In August of 2005, Commissioner

Bradley A. Smith resigned from the Commission.1

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

Inspector General

Under the Inspector General Act, the Commission’s Office of the Inspector General (OIG) is designed to prevent and defect fraud, waste and abuse 

in agency programs and promote economy, effectiveness and efficiency within the Commission. The 

OIG carries out its responsibilities by conducting and 

supervising audits, investigations and other inquiries 

relating to Commission programs and operations. 

In 2005, the OIG completed two audits, which inthe annual financial statement audit. The objectives 

of the OIG’s audit of the disclosure process were to 

determine the extent, if any, of disclosure differences 

between candidate contributions reported by political 

committees and related political committee contributions reported by recipient candidate committees, 

and also to assess whether an adequate process 

was in place to remedy any reporting discrepancies. In addition, the OIG completed an audit of the 

FEC’s fiscal year (FY) 2005 financial statements. The 

financial statement audit was conducted by an indecluded an audit of the FEC’s disclosure process and 

1

 Three new Commissioners were nominated to the FEC 

at the close of 2005. Robert D. Lenhard, Hans A. von Spakovsky and Steven T. Walther were nominated by President 

George W. Bush on December 16, 2005, and appointed 

by the President on January 4, 2006. Commissioner David 

Mason was reappointed by President Bush. Commissioners Scott Thomas and Danny Lee McDonald completed 

their tenure on the Commission after President Bush appointed new Commissioners to fill their expired terms. 

Commissioner Lenhard assumed the role of Vice Chairman 

for 2006.

pendent public accounting firm hired and monitored 

by the OIG. The Commission is required by the Accountability of Tax Dollars Act of 2002 to prepare and 

submit audited annual financial statements.

The OIG also completed audit follow-up work that 

resulted in the closure of twelve outstanding audit 

recommendations originally reported in the OIG’s FY 

2004 financial statement audit report on internal controls. In addition to conducting the aforementioned 

audits and the audit follow-up, the OIG also responded to several hotline complaints as well as opened 

and closed investigations in 2005.

Equal Employment Opportunity (EEO)

The FEC is committed to the principle of equal employment opportunity regardless of race, color, sex, 

religion, national origin, age, disability, sexual orientation, political affiliation and parental status. The FEC’s 

goal is to be a model employer, reflecting the values 

of fairness and integrity in our everyday operations.

Responsibility for guiding the Commission’s EEO 

program is centered on the agency’s EEO Director. 

The Commission provides policy leadership for the 

EEO program and sets a high level of expectation 

for the entire workforce to maintain a workplace free 

from discrimination, harassment and reprisal. Early 

resolution of disputes that may arise is an important 

emphasis of the FEC’s approach to EEO issues. 

The Commission reports on its progress on becoming a model EEO employer in annual reports to 

the United States Equal Employment Opportunity 

Commission and the United States Office of Personnel Management. The FEC EEO Office also maintains a web page to communicate information to 

its employees. The EEO Director consults with the 

Human Resources Director to ensure that employee 

recruitment reaches an audience reflecting the diversity of our nation.

Ethics

Staff members in the General Counsel’s office 

serve as the Commission’s ethics officials. Dissemination of information to FEC employees regarding 

compliance with the Ethics in Government Act re-
quired a number of undertakings throughout the year. 

The ethics staff conducted ethics orientation sessions 

for all new employees and provided annual ethics 

briefings to employees who are required to file public 

and confidential financial disclosure reports. In order 

to protect employees against conflict of interest and 

to help ensure that they remain impartial in the performance of their official duties, the ethics staff also 

administered the financial disclosure report system. 

Additionally, staff provided guidance to employees 

on the Standards of Ethical Conduct for Employees 

of the Executive Branch and other ethics laws and 

regulations. Finally, ethics staff ensured the Commission’s compliance with requirements of the Office of 

Government Ethics (OGE) by submitting the following 

documents to the OGE: the annual agency ethics 

program report and travel payment reports.

FEC’s Budget

The FEC’s FY 2005 final appropriation was 

$51,741,728 for 391 full time employees (FTE). The 

2005 request proposed no additional staff and reflected a four percent cost of living adjustment for 

391 FTE. The final appropriation resulted in an increase of $1,285,136 or 2.6 percent from the FY 2004 

funding level of $50,456,592. 

The Commission issued its annual Performance 

and Accountability Report (PAR) on November 15, 

2005. The Accountability of Tax Dollars Act of 2002 

extends to small agencies, such as the FEC, certain 

requirements for the preparation of financial statements, and it requires a full financial audit of the 

agency’s financial management systems and internal 

management controls. This is the second year that 

the FEC was required to produce financial statements 

and undergo a full financial audit. The FEC committed significant resources to improving its financial 

systems and preparing for the second year of full 

financial audits. 

The 2005 report contains three sections:

•“Management’s Discussion and Analysis,” which 

provides an overview of the financial and performance information addressed in the report;

•“Performance,” which reports the FEC’s accomplishments and its results in meeting its goals and objectives; and

•“Financial,” which contains details on the FEC’s 

finances.

The FEC received an unqualified opinion on all 

financial statements, with the exception of the statement of net cost. The FEC made great strides in its 

second year of producing annual audited financial 

statements.

Fiscal Year 2006 Budget

The FEC FY 2006 final appropriation was 

$54,153,000 for 391 FTE. This reflected an increase 

of $2,411,272 or approximately 4.5 percent more than 

the enacted FY 2005 appropriation of $51,741,728 

and 391 FTE. The FY 2006 final appropriation included a one percent rescission. 

Chart 5-1

Functional Allocation of Budget

Personnel $37,406,977 39,814,300

Travel/Transportation $495,251 439,980

Space Rental $4,386,000 3,895,000

Equipment Rental/Maint $819,700 449,859

Telephone/Postage $423,500 424,100

FY 2005 FY 2006

Printing $448,000 265,460

Training/Tuition $336,500 209,415

Depositions/Transcripts $50,000 50,000

Federal Agency Services $694,500 792,000

Software/Hardware $1,125,500 1,858,000

Contracts $3,316,300 3,671,737

Publications $518,500 536,665

Supplies $236,832 251,500

Equipment Purchases $1,401,168 1,234,249

Other $128,500 260,735

Total $51,741,728 54,153,000

32 Chapter Five
The Commission 33

Chart 5-2

Divisional Allocation of Budget by Percentage

Allocation of Staff

Commissioners

InspectorGeneral

StaffDirector

Administration

Audit

Information

Information Technology

Office ofGeneral Counsel

PublicDisclosureDivision

Reports AnalysisDivision

FY 2005 Actual FY 2006 Projected

0 5 10 15 20 25 30 35

Allocation of Budget

Commissioners

InspectorGeneral

StaffDirector

Administration

Audit

Information

Information Technology

Office ofGeneral Counsel

PublicDisclosureDivision

Reports AnalysisDivision

0 5 10 15 20 25 30 35
 

 

 

 

35 Chapter Six

Campaign Finance Statistics

Changes to campaign finance law resulting from

passage of the Bipartisan Campaign Reform Act of

2002 (BCRA) have had a significant effect on PACs,

party committees, candidates and even individuals

who participate in the process. Among other things,

provisions of the BCRA changed the way that candidates and committees operate by:

•Prohibiting national party committees from raising

or spending nonfederal funds, or “soft money;”

•Limiting the ability of state, district and local party

committees to spend nonfederal funds to pay for

all or part of certain activities; and

•Raising the individual contribution limits to candidates and party committees, as well as raising

the limit on the total amount that an individual can

contribute to influence federal elections over a twoyear period.

Disclosure reports filed with the FEC during the

non-election years of 2003 and 2005 have begun to

show the effects of these new provisions, both on

political committees’ fundraising activities and on

the ways in which political committees, individuals

and other groups chose to spend their funds.

Party Committees

Fundraising

Democratic and Republican party committees

raised approximately $421.0 million and spent approximately $324.5 million during the non-election

year of 2005. Republican national, state and local

committees who report to the Commission raised

$248.6 million in federal funds, or “hard money,”

during 2005. Democratic committees raised $172.4

million. Democratic party committees reported significant increases in fundraising during 2005, while

receipts of their Republican counterparts declined

slightly overall when compared with 2003. Federal

fundraising by parties has often been stable or even

declined slightly in cycles without a Presidential

campaign. While Democrats closed the relative gap

in fundraising with their Republican counterparts,

Republican party committees still raised nearly $77

million more than Democrats in 2005.

Overall, Democratic committees at the federal,

state and local levels reported raising nearly 41

Table 6-1

Overall Financial Activity of National Party Committees

In Millions of Dollars

2001 2003 2005

Federal Nonfederal Total Federal Only Federal Only

DNC $28.46 29.77 58.23 43.75 56.05

DSCC $14.55 20.73 35.27 22.8 43.61

DCCC $16.68 18.13 34.81 28.62 42.93

RNC $67.28 48.15 115.43 107.82 105.38

NRSC $25.02 23.80 48.82 26.40 35.52

NRCC $41.64 28.16 69.80 72.64 65.03
percent more in federally permissible “hard” money

during 2005 than they raised in 2003. Each of the

three national Democratic committees (Democratic

National Committee (DNC), Democratic Senatorial

Campaign Committee (DSCC) and Democratic Congressional Campaign Committee (DCCC)) reported

substantial fundraising gains, and total federal

fundraising by state and local Democratic committees also increased. Refer to Table 6-1 on the

previous page for the overall financial activity of the

national party committees in 2001, 2003 and 2005.

The strongest growth came from the DSCC whose

$43.6 million in 2005 receipts represented a 91 percent increase over 2003 levels. This total was also

about $8 million more than the National Republican

Senatorial Committee (NRSC) raised, the first time

any Democratic national committee has exceeded

the fundraising of its Republican counterpart in a

non-election year since the FEC began providing

summaries in 1985.

Republican committees’ fundraising in 2005 was

down four percent from 2003 levels. While being

surpassed by the DSCC, the NRSC was the only national Republican committee to show a fundraising

increase in 2005, up 34 percent from 2003 to $35.5

million. The Republican National Committee (RNC),

National Republican Congressional Committee

(NRCC) and state and local Republican committees

reported lower fundraising totals than in the last

non-election year.

All of the national committees have raised significantly more in hard money in 2005 than they raised

in 2001, the last year in which national parties were

permitted to also raise so-called soft money. One

major objective of the BCRA was to eliminate “soft

money” fundraising and spending by national party

committees. The new rules in which national parties were prohibited from receiving nonfederal funds

took effect in 2002. Chart 6-1 illustrates the impact

the nonfederal ban has had on the overall financial

activity of national committees in 2005, compared

with the two prior non-election years. 

Individuals continued to be the major source of

contributions for the national party committees in

Chart 6-1

Total Fundraising by National Party Committees, Non-Election Years

In Millions of Dollars

2001 2003 2005

120

100

80

60

40

20

0 RNC NRSC NRCC

120

100

80

60

40

20

0 DNC DSCC DCCC

36 Chapter Six
37 Campaign Finance Statistics

2005. Republican committees reported receiving

$222.3 million from individuals (89 percent of their

receipts) while Democrats received $130.6 million

(76 percent of their total). Under the BCRA, unlimited nonfederal contributions were banned at the

same time that the limit for federally permissible

contributions from individuals to national party committees increased from $20,000 to $25,000 adjusted

for inflation (which became $26,700 in 2005). Thus,

while in past non-election years national party committees often received very large donations from

individuals, corporations, labor unions, etc. into their

nonfederal accounts, during 2003 and 2005 the national parties could only receive up to $25,000 and

$26,700, respectively, from any individual. 

Under these new regulations, individual hard

money contributions at the federal maximum gained

significantly for the DNC and the RNC in 2003 and

2005, as illustrated by Chart 6-2. In 2001, before

the limits increased, the DNC received nearly three

percent of their total contributions from individuals

giving between $10,001 and $20,000. In 2003, approximately 11 percent of the DNC’s contributions

were from individuals giving over $20,000. In 2005

the percentage dropped to nearly seven percent. 

See Chart 6-3 on the following page for details. In

contrast, the RNC’s percentage of contributions

from individuals giving over $20,000 increased from

15 percent in 2003 to approximately 17 percent in

2005. Before the increased limits, the RNC only received seven percent of their total contributions from

individuals giving $10,001 to $20,000. Chart 6-4, on

the following page, details these results.

Smaller contributions from individuals also

played a significant role in national party committee

fundraising. Party committees must itemize contributions once they exceed $200 in the aggregate

from any individual during a calendar year. The majority of individuals who contribute to national party

committees give less than $200. The total amount of

money received in small unitemized individual contributions is consistently the largest source of contributions for both party committees. However, since

the passage of the BCRA, the overall percentage of

unitemized contributions has decreased in response

to more individuals contributing hard money at the

federal maximum. In the past three non-election

years, the DNC has raised a greater percentage of

its unitemized contributions from individuals than

the RNC. In 2005, 71 percent of the DNC’s and 61

percent of the RNC’s contributions from individuals

were less than $200. See Chart 6-3 and Chart 6-4 

on the following page for details.

Chart 6-2

Total Individual Contributions to Parties,

Non-Election Years

In Millions of Dollars

0

Democratic Party Republican Party

250

200

150

100

50

1995 1997 1999 2001 2003 2005
2001 2003 2005

38 Chapter Six

Chart 6-3

Ratio of Hard Money Contributions by Amount to DNC, Non-Election Years

>$20,000

10,001-20,000

1,001-10,000

200-1,000

Unitemized

Chart 6-4

Ratio of Hard Money Contributions by Amount to RNC, Non-Election Years

>$20,000

10,001-20,000

1,001-10,000

200-1,000

Unitemized

2001 2003 2005
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Independent Coordinated Party

39 Campaign Finance Statistics

Spending

In past years, national party committees generally supported their federal candidates indirectly

through the state parties. Since the passage of the

BCRA, national parties have spent much greater

sums on the direct support of their candidates. 

Table 6-2 summarizes contributions to federal candidates made by each national party committee and

by the state and local party committees of the two

major parties during 2005. Overall the Democratic

and Republican party committees contributed comparable sums to their candidates.

Table 6-2 also includes coordinated party expenditures made during the 2005 non-election year. 

Coordinated expenditures are expenditures that

party committees may make in connection with general elections under special limits that are adjusted

for inflation and account for each state’s voting age

population. The coordinated party expenditures

differ from direct contributions in that the party committees must spend the funds on behalf of their

nominees, rather than giving the money directly to

the campaigns. A committee may assign any portion of its coordinated party expenditures to another

committee—for example, a state party committee

may assign all or some of its spending limit to a local party committee. The coordinated party expenditure limits for the 2005-2006 election cycle are:

•$39,600 for House nominees ($79,200 for nominees in states that have only one U.S. House Representative) and

•A range from $79,200 to $2,093,800 for Senate

nominees, depending on each state’s voting age

population.

Party committees’ coordinated party expenditures

will increase during 2006, especially as the general

election draws near.

Party committees also support candidates by

making independent expenditures. Independent

expenditures are public communications expressly

advocating the election or defeat of clearly identified candidates. These expenditures are not subject

to limits so long as there is no coordination with the

campaign. Although 2005 was a non-election year,

Table 6-2 shows that party committees did make

some independent expenditures. It is likely that

these independent expenditures were in connection

with special elections held during 2005. Like coordinated expenditures, independent expenditures by

party committees will increase dramatically during

the election year.

Table 6-2

Party Committees’ Support of 

Federal Candidates, 2005

Contributions Expenditures Expenditures

DNC $5,000 $0 $361,557

DSCC 223,800 0 486,391

DCCC 83,088 397,864 78,027

Democratic

State/Local

213,677 1,545 44,316

RNC 45,200 8,860 172,009

NRSC 131,600 0 11,935

NRCC 134,695 707,224 88,667

Republican

State/Local

136,560 98,597 52,632
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

40 Chapter Six

Nonfederal Spending by State, District and Local Party 

Committees for Allocated Activities

State and local committees of the two major parties spent less money on allocable activity in 2005

than they did in 2003. The total spending was significantly less in 2003 and 2005 than it was in 2001.

This was due to the fact that the BCRA imposed

stricter requirements on the use of soft money for

some federal election activities undertaken by state

parties. This change, combined with the fact that

national committees were no longer raising soft

money and transferring it to state committees, led to

a substantial reduction in federally reported spending by these state and local parties. Total reported

spending (which includes all hard money and any

soft money used for allocable activity) by state and

local committees declined by approximately onehalf when compared with 2001. This is evinced by

Chart 6-5, which compares the total federal and

nonfederal spending reported by all Democratic

state and local party committees and all Republican state and local party committees. The chart

also shows that the hard money disbursements

remained fairly constant, while the nonfederal disbursements decreased substantially.

Levin Funds

The BCRA allowed state, district and local

parties to compensate for some portion of the

increased restriction on nonfederal spending by

allowing them to raise and spend funds in limited

amounts beyond the typical federal contribution

limits and prohibitions. These “Levin” funds (referring to the sponsor of the statutory provision)

Chart 6-5

Total Disbursements of Federal Funds and Nonfederal Funds for

Shared Activities by State Party Committees, Non-Election Years

In Millions of Dollars

Federal Funds Nonfederal Funds for Shared Activity

Democratic Party 60 60

50 50

40 40

30 30

20 20

10 10

0 0 2001 2003 2005

Republican Party

2001 2003 2005
Cash-On-Hand Disbursement Receipts

500

400

300

200

100

1991 1993 1995 1997 1999 2001 2003 2005 0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

41 Campaign Finance Statistics

are funds donated to state, district and local party

committees, in accordance with state law, potentially from corporations, labor organizations and

other individuals and persons in amounts not to

exceed $10,000 per calendar year.

A state or local party committee may allocate

the expenses associated with certain “federal

election activities” between federal funds and

Levin funds. Levin funds did not represent a significant portion of party financial activity in 2003

or 2005. State Democratic party committees did

not spend any Levin funds in 2003, but did spend

$2,725 in 2005. Republican state parties spent

$13,957 in 2003 and spent nearly five times more

in 2005 with nearly $70,000 in Levin fund expenditures.

Chart 6-6

Congressional Campaign Fundraising,

Non-Election Years

In Millions of Dollars

Congressional Committees

Democratic and Republican Congressional

campaign fundraising totaled $470.3 million in

2005, an increase of 21 percent when compared

to 2003. Candidates for the U.S. House of Representatives raised $280.1 million during 2005, an

increase of 25 percent from 2003 levels. These

campaigns spent $147.4 million, 22 percent more

than 2003. They entered the election year with

cash-on-hand of $282.7 million, up from the $221.4

million balance reported at the end of 2003.

House fundraising increases in 2005 were most

pronounced for Democratic candidates, who

raised $122 million, up 35 percent from 2003.

Republican House candidates raised $157.1 million in 2005, 18 percent more than in the previous off-year. Senate candidates raised a total of

$190.2 million in 2005, up 14 percent from 2003

levels. During 2005, Senate candidates reported

disbursements of $69.8 million, up slightly from

what was spent during the off year of the previous

cycle, and they ended 2005 with a cash balance

of $169 million. Chart 6-6 shows the increased

receipts and cash-on-hand for House and Senate campaigns since 2001. The total amount of

disbursements in non-election years has not increased at the same rate as that of receipts and

cash-on-hand amounts.

Comparing Senate races between election

cycles is problematic, however, because different

states hold Senate elections each cycle. There

were a number of competitive races in states

with large populations in 2004, so Senate activity was relatively high in 2003. Individual Senate

campaigns can also be unusually large and effect

overall totals, particularly early in the campaign

year. In 2005, for example, Hillary Clinton of New

York raised $21.4 million, more than twice the total

raised by the next largest campaign (Rick Santorum of Pennsylvania at $10.2 million).

Contributions from PACs and other candidate committees, whose limits were left largely unchanged under

BCRA, rose 34 percent to $135.6 million. This repre-
0

Democratic Republican

Candidate Candidate

200

150

100

50

1995 1997 1999 2001 2003 2005

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

42 Chapter Six

Chart 6-7

Total Individual Contributions to Congressional Candidates, Non-Election Years

In Millions of Dollars

Table 6-3

Individual Contributions to House, Senate and Presidential Committees

sented 29 percent of campaigns’ receipts, up from 26

percent in 2003, but still less than 31 percent in 2001.

Funds from candidates themselves totaled $24.1 million

or five percent of all fundraising.

Contributions from individuals remain the largest

source of funds for Congressional candidates. The

$296.7 million raised from individuals was 25 percent

more than in 2003 and represented 63 percent of all

fundraising during the year, up from 61 percent in 2003.

The BCRA increased contribution limits from $1,000 per

election to $2,000 and indexed them for inflation. The

limit in 2006 campaigns is $2,100 per election (or a total

of $4,200 for a primary and general election). Chart 6-7

shows the overall increases in individual contributions to

Democratic and Republican candidates since 2001.

Candidate committees have benefited from the

increased contribution limits. In 2003, 23 percent of

individual contributions exceeded the previous limit of

$1,000. The increased limit allowed for candidate committees to augment their fundraising significantly. During 2001 candidate committees raised approximately

$150 million, and in 2003 that number more than tripled

with contributions from individuals exceeding $400 million. Fifty-two percent of the total contributions for 2003

were over $1,000. During 2005 candidate committees

raised approximately $250 million from individual contributions. Twenty percent of the donors gave contributions over $1,000 which resulted in 48 percent of total

contributions coming from the increased limit. Table 6-3

details individual contributions at the increased limits.

n/a 108,131 64,843

Total Amount of Contributions over $1,000 n/a $218,139,368 $130,624,580

Percentage of Number of Contributions over $1,000 n/a 23% 20%

Percentage of Total Amount of Contrbutions over $1,000 n/a 52% 48%

2001 2003 2005

Number of Contributions 248,091 471,633 318,272

Total Amount of Contributions $158,433,819 $419,679,073 $270,220,807

Number of Contributions over $1,000
Chart 6-9

PAC Receipts in Non-Election Years

In Millions of Dollars

500

400

300

200

100

0

1993 1995 1997 1999 2001 2003 2005

Cooperative

Corporation

w/o Stock

Corporate

Labor

Nonconnected

Trade/Member

/Health

0

5000

4000

3000

2000

1000

1993 1995 1997 1999 2001 2003 2005

Cooperative

Corporation

w/o Stock

Corporate

Labor

Nonconnected

Trade/Member

/Health

Chart 6-8

Number of PACs in Non-Election Years

43 Campaign Finance Statistics

Political Action 

Committees

Federal political action committees (PACs) ended 2005 

with record percentage gains 

in receipts, disbursements and 

contributions when compared 

to the last non-election year. 

They raised $477.4 million 

dollars this year—27 percent 

more than in 2003—and spent 

$394.1 million—37 percent 

more than in 2003. Chart 6-

8 tracks the increasing PAC 

receipts for the non-election 

years since 1993. PAC contributions totaled $140.5 million, 

up 33 percent from the last 

non-election year. They also 

had 23 percent more cashon-hand and 12 percent less 

outstanding debt. 

While all categories of 

PACs increased their financial activity in 2005, the most 

substantial growth came from 

nonconnected committees 

(i.e. PACs not supported by 

particular corporations, labor 

organizations, trade or membership groups, etc.) who 

raised 52 percent more than 

they had in 2003, spent 65 

percent more and contributed 

60 percent more to candidates 

than in 2003.

The total number of PACs 

also increased by 320, from 

4,023 in 2003 to 4,340 in 

2005. Roughly two-thirds of 

the new committees were 

nonconnected PACs. Chart 

6-9 exhibits the increase in the

number of PACs from 1997

to 2005. Overall increases in
Chart 6-10

PAC Contributions to Republican Candidates

In Hundreds of Thousands of Dollars

900

800

700

600

500

400

300

200

100

0 1993 1995 1997 1999 2001 2003 2005

Cooperative

Corporate

Corporation w/Stock

Labor

Nonconnected

Trade/Membership

Chart 6-11

PAC Contributions to Democratic Candidates

In Hundreds of Thousands of Dollars

900

800

700

600

500

400

300

200

100

0 1993 1995 1997 1999 2001 2003 2005

Cooperative

Corporate

Corporation w/Stock

Labor

Nonconnected

Trade/Membership

44 Chapter Six

contributions ranged from 20 

percent for PAC contributions 

to Senate Democrats (to a 

total of $15.2 million) to a 45 

percent increase for House 

Republican candidates for 

a 2005 total of 62.2 million. 

While contributions to both 

Democrats and Republicans 

in both chambers were higher 

in 2005, growth rates were 

generally greater for Republican candidates in both the 

Senate and House of Representatives. Chart 6-10, on the 

following page, demonstrates 

that contributions from corporate PACs to Republican candidates grew the most in 2005 

with an increase of $11 million 

from 2003. Nonconnected 

PACs and trade and membership PACs were the next biggest contributors to Republican candidates with increases 

of approximately $6.5 million 

from the last non-election 

year. Chart 6-11 shows the 

more moderate increases of 

PAC contributions to Democratic candidates. The 2005 

non-election year was the first 

since 1993 in which Democratic candidates received 

more contributions from corporate PACs than from labor 

PACs.
45 Appendix 1

Biographies of

Commissioners and Officers

Commissioners1

Scott E. Thomas, Chairman

April 30, 2003

Scott Thomas was appointed to the Commission in 

1986 and reappointed in 1991 and 1998. He previously served as Chairman in 1987, 1993 and 1999. 

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. He worked as a staff attorney in 

the Office of General Counsel and later became an 

Assistant General Counsel for Enforcement.

A Wyoming native, Mr. Thomas graduated from 

Stanford University and holds a J.D. from Georgetown University Law Center. He is a member of the 

District of Columbia and U.S. Supreme Court bars.

Michael E. Toner, Vice-Chairman

April 30, 2007

Michael E. Toner was nominated to the Commission by President George W. Bush on March 4, 2002, 

and appointed on March 29, 2002. Mr. Toner was 

confirmed by the U.S. Senate on March 18, 2003.

Prior to being appointed to the FEC, Mr. Toner 

served as Chief Counsel of the Republican National 

Committee (RNC). Mr. Toner joined the RNC in 2001 

after serving as General Counsel of the Bush-Cheney 

Transition Team in Washington, D.C., and General 

Counsel of the Bush-Cheney 2000 Presidential Campaign in Austin, TX.

Before joining the Bush campaign in Austin, Commissioner Toner was Deputy Counsel at the RNC from 

1997-1999. Prior to his tenure at the RNC, Mr. Toner 

served as counsel to the Dole/Kemp Presidential 

Campaign in 1996.

Mr. Toner was an associate attorney at Wiley, Rein, 

& Fielding in Washington, D.C., from 1992-1996. His 

1

 On December 16, 2005, President George W. Bush 

nominated three new Commissioners to the FEC. The 

nominees include Steven T. Walther, Robert D. Lenhard and 

Hans A. von Spakovsky. Commissioner David Mason was 

nominated to serve a second term. The Commissioners 

were appointed by President Bush on January 4, 2006. 

work there included advising political committees 

and corporate clients on federal and state election 

law compliance. He was also involved in a number of 

First and Fourteenth Amendment appellate litigation 

matters, including two cases that were successful in 

the U.S. Supreme Court. 

Mr. Toner has written widely on campaign finance 

matters, including in the Washington Post, Boston 

Globe, Chicago Tribute and Washington Times. Mr. 

Toner is a lecturer in the Department of Politics at the 

University of Virginia.

Mr. Toner received a J.D. cum laude from Cornell 

Law School in 1992, an M.A. in Political Science from 

Johns Hopkins University in 1989 and a B.A. with 

distinction from the University of Virginia in 1986. He 

is a member of the District of Columbia and Virginia 

bars as well as the U.S. Supreme Court bar, the 

Fourth U.S. Circuit Court of Appeals and the U.S. 

District Courts for the District of Columbia and the 

Eastern District of Virginia.

David M. Mason, Commissioner 

April 30, 2009

David Mason was appointed to the Commission by 

President Bill Clinton in 1998. Commissioner Mason 

served as Chairman of the FEC in 2002. Prior to his 

appointment, Mr. Mason served as Senior Fellow, 

Congressional Studies at the Heritage Foundation. 

He joined Heritage in 1990 as Director of Executive 

Branch Liaison. In 1995, he became Vice President, 

Government Relations, and in 1997, Mr. Mason was 

designated Senior Fellow with a focus on research, 

writing and commentary on Congress and national 

politics.

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

John Warner, Representative Tom Bliley and then 

House Minority Whip Trent Lott. Throughout his career, he worked on numerous Congressional, Senate, 

Gubernatorial and Presidential campaigns. Additionally, Mr. Mason was a nominee for the Virginia House 

of Delegates in the 48th District in 1982.

Commissioner Mason attended Lynchburg College 

in Virginia and graduated cum laude from Claremont 

McKenna College in California. He is active in po-
46 Appendices

litical and community affairs at both the local and 

national levels. He and his wife reside in Lovettsville, 

Virginia, with their ten children.

Ellen L. Weintraub, Commissioner

April 30, 2007

Ellen Weintraub was appointed to the Federal 

Election Commission on December 6, 2002, and took 

office on December 9, 2002. She served as Chair of 

the Commission for the year 2003. Ms. Weintraub is 

the third woman to serve on the Commission.

Prior to her appointment, Ms. Weintraub was Of 

Counsel to Perkins Coie, LLP, and a member of its 

Political Law Group. There, she counseled clients on 

federal and state campaign finance laws, political 

ethics, nonprofit law, and lobbying regulation. During 

the election contest arising out of the 1996 election of 

Senator Mary Landrieu (D-LA), Ms. Weintraub served 

on the legal team that advised the Senate Rules 

Committee. Her tenure with Perkins Coie represented 

Ms. Weintraub’s second stint in private practice, having previously practiced as a litigator with the New 

York firm of Cahill Gordon & Reindel.

Before joining Perkins Coie, Ms. Weintraub was 

Counsel to the Committee on Standards of Official 

Conduct for the U.S. House of Representatives (the 

House Ethics Committee). Like the Commission, the 

Committee on Standards is a bipartisan body, evenly 

divided between Democratic and Republican members. There, Ms. Weintraub focused on implementing the Ethics Reform Act of 1989 and subsequent 

changes to the House Code of Official Conduct. She 

also served as editor in chief of the House Ethics 

Manual and as a principal contributor to the Senate 

Ethics Manual. 

Ms. Weintraub received her B.A. cum laude from 

Yale College and her J.D. from Harvard Law School. 

A native New Yorker, she is a member of the New 

York and District of Columbia bars and the Supreme 

Court bar. She currently resides in Maryland with her 

husband, Bill Dauster, and their three children.

Danny L. McDonald, Commissioner 

April 30, 2005

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

and 2000. He served as the FEC Chairman in 1983, 

1989, 1995 and 2001. Before his original appointment, Mr. McDonald managed 10 regulatory divisions as the general administrator of the Oklahoma 

Corporation Commission. He previously served as 

secretary of the Tulsa County Election Board and as 

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

of the Advisory Panel to the FEC’s Clearinghouse on 

Election Administration. 

A native of Sand Springs, Oklahoma, Commissioner McDonald graduated from the Oklahoma State 

University and attended the John F. Kennedy School 

of Government at Harvard University.

Bradley A. Smith

April 30, 2005

Bradley Smith was nominated to the Commission by President Clinton on February 9, 2000, and 

confirmed by the U.S. Senate on May 24, 2000. 

Commissioner Smith resigned from the Commission on August 21, 2005. Prior to his appointment, 

Commissioner Smith was Professor of Law at Capital 

University Law School in Columbus, Ohio. His areas 

of specialty were Election Law, Comparative Election 

Law, Jurisprudence, Law & Economics and Civil Procedure. Mr. Smith returned to the faculty of Capital 

after he resigned from the FEC.

Prior to joining the faculty at Capital in 1993, Mr. 

Smith had practiced with the Columbus law firm of 

Vorys, Sater, Seymour & Pease. Throughout his career, he has also served as the United States Vice 

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

Manager of the Small Business Association of Michigan. During his tenure at the Small Business Association, Mr. Smith’s responsibilities included management of the organization’s political action committee.

Commissioner Smith received his B.A. cum laude

from Kalamazoo College in Kalamazoo, Michigan, 

and his J.D. from Harvard Law School.
Appendices 47

Statutory Officers

James A. Pehrkon, Staff Director

James Pehrkon retired from his post as FEC Staff 

Director on December 15, 2005. Mr. Pehrkon be-

came Staff Director on April 14, 1999, after serving as 

Acting Staff Director for eight months. Prior to that, 

Mr. Pehrkon served for 18 years as the Commission’s 

Deputy Staff Director with responsibilities for manag-

ing the FEC’s budget, administration and computer 

systems. Among the agency’s first employees, Mr. 

Pehrkon is credited with setting up the FEC’s Data 

Systems Development Division. He directed the data 

division before assuming his duties as Deputy Staff 

Director. 

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

undergraduate degree from Harvard University and 

did graduate work in foreign affairs at Georgetown 

University.

Lawrence H. Norton, General Counsel

Lawrence Norton became General Counsel of 

the FEC on September 17, 2001. Prior to joining 

the Commission, Mr. Norton served as an Associate 

Director at the Commodity Futures Trading Commis-

sion for five years. He also worked as an Assistant 

Attorney General in the Maryland Attorney General’s 

office.

Mr. Norton graduated Order of the Coif from the 

University of Maryland School of Law.

Lynne A. McFarland, Inspector General

Lynne McFarland became the FEC’s first perma-

nent Inspector General in February 1990. She came 

to the Commission in 1976, first as a reports analyst. 

Later, she worked as a program analyst in the Office 

of Planning and Management.

A Maryland native, Ms. McFarland holds a sociol-

ogy degree from the Frostburg State College and is a 

member of the Institute of Internal Auditors.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

49 Appendix 2

2005 Chronology of Events

January

 1 – Chairman Scott E. Thomas and Vice-Chairman Michael E. Toner begin their one-year 

terms of office.

12 – EMILY’s List files a complaint in the U.S. 

District Court for the District of Columbia 

challenging the Commission’s new regulations regarding certain solicitations and 

allocation ratios for PACs.

19 – Commission conducts joint FEC-IRS workshop for PACs and other 527 organizations.

23 – Commission conducts reporting roundtables for candidates, PACs and party committees.

25 – FEC issues semi-annual PAC count.

27 – Commission approves final rules regarding 

contributions and donations by minors to 

candidates and political party committees.

27 – Commission approves NPRM seeking comments on proposed revisions to the definitions of “agent.” 

27 – Commission approves NPRM seeking comments on proposed changes to its regulations on the disbursement of Levin funds by 

state, district and local party committees.

27 – Commission certifies $20,023.37 in federal 

matching funds to two Presidential candidates for the 2004 election.

31 – 2004 year-end reports due.

February

14 – Commission approves NPRM seeking comments on proposed changes to its rule governing appearances by federal candidates 

and officeholders at state, district and local 

party fundraisers.

17 – U.S. District Court for the District of Columbia in Judicial Watch, Inc. v. FEC grants the 

FEC’s motion for summary judgment finding that the FEC’s decision to dismiss an 

administrative complaint was supported by 

substantial evidence and thus not contrary 

to law. 

20 – Monthly reports due.

24 – Commission certifies $5,142.50 in federal 

matching funds to one Presidential candidate for the 2004 election.

25 – U.S. District Court for the District of Columbia in EMILY’s List v. FEC denies the plaintiff’s request for a preliminary injunction.

28 – U.S. District Court for the District of Columbia in Alliance for Democracy v. FEC, grants 

the Commission’s motion to dismiss this 

case, finding that the plaintiffs lack standing.

March

10 – Commission approves final rules on filing 

by Priority Mail, Express Mail and Overnight 

Delivery service.

10 – Commission approves final rules on political 

party committee donations to certain tax-exempt organizations and political organizations.

15-17 – Commission holds conference in Washington, D.C., for candidates and party committees.

20 – Monthly reports due.

23 – Commission conducts roundtable on Treasurers’ Responsibilities.

24 – Commission approves NPRM seeking comments on proposed rules to include paid 

Internet ads in the definition of public communication.

25 – Commission sends annual legislative recommendations to the President and Congress.

29 – Commission certifies $53,237 in federal 

matching fund payments to two Presidential 

candidates in the 2004 primaries. This is 

the final matching payment for Presidential 

candidates in the 2004 primaries.

April

 6 - Commission conducts reporting roundtable 

for candidate committees.

12 – Commission submits FY2006 budget request to Congress.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

50 Appendices

13 – U.S. Court of Appeals for the District of 

Columbia Circuit in Jim Sykes v. FEC et al.

grants the Commission’s motion for summary affirmation.

15 – Quarterly reports due.

20 – Monthly reports due.

25-27 – Commission holds conference in Washington, D.C., for corporations and their PACs.

26 – U.S. District Court for the Western District

of Tennessee in Augusti and Augusti for 

Congress v. FEC grants in part the Commission’s motion to dismiss.

28 – Commission approves NPRM concerning 

the definition of federal election activity.

28 – Commission approves NPRM proposing 

changes to its regulations regarding state, 

district and local party committee payment 

of certain salaries and wages.

29 – U.S. District Court for the District of New 

Mexico in FEC v. Democratic Party of New 

Mexico finds the party violated the Act by 

using a nonfederal account to make public 

communications in connection with a federal election, making excessive contributions 

and failing to report certain coordinated 

expenditures.

May

 9 – U.S. District Court of the District of Columbia 

in Wisconsin Right to Life v. FEC dismisses, 

with prejudice, as applied challenge to 

electioneering communications rules. 

16 – U.S. District Court for the District of Columbia in Citizens for Responsibility and Ethics 

in Washington v. FEC grants the FEC’s motion for summary judgment.

17 – Commission holds a public hearing regarding the proposed rules on federal candidate 

and officeholder solicitations at state, district and local party committee fundraisers; 

the definition of “agent”; and payroll deductions for contributions to a trade association’s SSF.

20 – Monthly reports due.

23 – Wisconsin Right to Life appeals to the Supreme Court.

June

1-3 – Commission holds conference in Chicago,

IL, for trade associations, membership organizations, labor organizations and their 

PACs.

 9 – Commission adopts final rules that adjust 

civil penalties for inflation.

10 – U.S. Court of Appeals for the District of 

Columbia in John Hagelin, et al. v. FEC

finds that the FEC’s decision to dismiss an 

administrative complaint was supported by 

substantial evidence and thus not contrary 

to law.

15 – Quarterly reports due.

20 – Monthly reports due.

23 – Commission approves a revised Explanation and Justification for its rule regarding 

appearances by federal candidates and officeholders at state, district and local party 

fundraisers.

27 – U.S. District Court for the Central District of 

Illinois in FEC v. Friends of Lane Evans, et 

al. signs a consent judgment reflecting an 

agreement in the case between the Commission and friends of Lane Evans, the 17th

District Victory Fund and the Rock Island 

Democratic Central Committee.

28-29 – Commission hosts a public hearing concerning proposed rules that would include

some paid Internet ads within the definition 

of public communication.

July

 5 – Commission approves the final audit report 

on the Democrat, Republican, Independent 

Voter Education Political Campaign Committee (DRIVE).

13 – Commission conducts reporting roundtables for candidates, PACs and party committees.

14 – Commission approves final rules on payroll deductions for contributions to a trade 

association’s SSF.

15 – U.S. Court of Appeals for the District of 

Columbia in Shays and Meehan v. FEC upholds the appealed portion of the District 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Appendices 51

Court’s September 18, 2004, decision invalidating several Commission regulations.

20 – Monthly reports due.

26 – Commission announces civil penalties 

totaling more than $50,000 in the first two 

enforcement cases to arise from the “Millionaires’ Amendment.”

26-27 – Commission holds state outreach sessions

in Savannah, GA.

31 – Mid-Year reports due.

August

 4 – Commission holds a public hearing on proposed rules regarding the definition of federal election activity and state, district and 

local party committee payments of certain 

salaries and wages.

8 – Montana joins FEC’s state filing waiver program.

10 – In Augusti and Augusti for Congress v. FEC, 

plaintiff voluntarily dismisses the compliant.

10-11 – Commission holds state outreach sessions

in Denver, CO.

18 – Commission approves NPRM seeking comments on proposed changes to its rules 

defining electioneering communications.

20 – Monthly reports due.

22 – Commission extends comment period on 

proposed rules regarding federal election 

activity and party committee salary allocation.

23-24 – Commission holds state outreach sessions

in Portland, OR.

29 – In Shays and Meehan v. FEC, Commission

files with the U.S. Court of Appeals for the 

District of Columbia Circuit a petition for 

rehearing en banc.

30 – U.S. District Court for the Western District 

of Louisiana in Cooksey v. FEC grants the 

Commission’s motion to dismiss this case.

September

14-15 – Commission holds conference in San Diego,

CA, for campaigns, parties and corporate/

labor/trade PACs.

19 – FEC asks the U.S. District Court for the 

District of Columbia to find that Club for 

Growth, Inc. violated the Act by failing to 

register with the Commission after meeting both the statutory definition of “political 

committee’” and the “major purpose” test 

established by the Supreme Court.

20 – Monthly reports due.

22 – Commission approves NPRM on the definitions of “solicit” and “direct.”

27 – Supreme Court agrees to hear Wisconsin 

Right to Life’s as-applied challenge to the 

ban of corporate financing of electioneering 

communications.

October

15 – Quarterly reports due.

17 – Revised FEC Forms 5 and 10 become effective.

20 – Monthly reports due.

20 – Commission holds a public hearing on proposed rules regarding electioneering communications.

21 – U.S. Court of Appeals for the District of 

Columbia declines to rehear en banc the 

Commission’s appeal of Shays v. FEC.

25-26 – Commission holds conference in San Antonio, TX, for campaigns, parties and corporate/labor/trade PACs.

27 – U.S. District Court for the District of Columbia in Citizens for Responsibility and Ethics 

in Washington v. FEC grants a joint motion 

to dismiss this case, which challenged the 

Commission’s refusal to provide documents 

relating to an ongoing enforcement matter.

November

10 – Commission adopts final rules eliminating 

the de minimis exemption for Levin Fund 

disbursements by state, district and local 

party committees and organizations.

15 – U.S. District Court for the District of Columbia in Citizens for Responsibility and Ethics 

in Washington (CREW) v. FEC grants the 

FEC’s motion for summary judgment finding 
 

 

 

 

 

 

 

 

 

 

52 Appendices

that CREW lacked standing to challenge the 

Commission’s dismissal of its administrative 

complaint.

15 – Commission holds public hearing on proposed rules amending the definitions of 

“solicit” and “direct.”

16 – Commission conducts seminar for 

nonconnected PACs.

20 – Monthly reports due.

22 – U.S. District Court for the Northern District 

of Florida in FEC v. Reform Party of the 

United States of America orders defendant 

to repay the U.S. Treasury for impermissible 

Presidential nominating convention expenses.

30 – President Bush signs Transportation, Treasury, Housing and Urban Development, Judiciary, District of Columbia, and Independent Agencies Appropriations Act, 2006, 

extending the Administrative Fine Program 

through December 31, 2008.

30 – Michael G. Liffrig asks the U.S. District 

Court of North Dakota to find that the FEC 

is no longer permitted to require him to file 

disclosure reports.

December

1 – Commission adopts final rules on state, district and local party committee payments of 

certain salaries and wages. 

8 – Commission approves NPRM seeking comments on proposed changes to its rules 

defining coordinated communications.

9 – Alfred C. Sharpton agrees to repay public 

funds he received in 2004 under the Presidential Primary Matching Payment Account 

Act.

 14 – Commission elects Michael E. Toner as its 

Chairman and Danny Lee McDonald as its 

Vice Chairman for 2006.

 15 – Commission adopts final rules on electioneering communications.

 15 – Commission adopts final rules extending the 

Administrative Fine Program through December 31, 2008.

 20 – Monthly reports due.

22 – U.S. Court of Appeals for the District of Columbia upholds the District Court’s refusal to 

grant EMILY’s List’s request for preliminary 

injunctive relief in EMILY’s List v. FEC.
 

 

 

 

 

 

 

 

 

 

53 Appendix 3

FEC Organizational Chart

The Commissioners1

Scott E. Thomas, Chairman

Michael E. Toner, Vice Chairman

David M. Mason, Commissioner

Danny L. McDonald, Commissioner

Ellen L. Weintraub, Commissioner

Bradley A. Smith, Commissioner2

1 Steven T. Walther, Robert D. Lenhard and Hans A. von Spakovsky were

appointed to the Commission on January 4, 2006 (See Appendix 1).

General Counsel 

Lawrence H. Norton

Staff Director

James A. Pehrkon3

lnspector General

Lynne McFarland

Enforcement

Litigation

Policy

Complaints

Examination&

Legal

Administration

Law Library

General Law

& Advice

Deputy Staff Director

Management/CFO

Deputy StaffDirector

Information Technology/CIO

Deputy Staff Director

Audit & Review

Administration Audit

Finance ReportsAnalysis

Administrative

Review

Budget,

Planning&

Management

ElectronicFiling&

DisclosureSystems

Infrastructure

Management

Data Entry &

Coding

ITSupportServices

Business

Application

Development&

Support

Commission

Secretary

Congressional

Affairs

EqualEmployment

Opportunity

Information

AlternativeDispute

Resolution

Enterprise

Architecture

Press Office

PublicDisclosure

HumanResources

&LaborRelations

Management

Deputy General 

Counsel

2 Bradley A. Smith resigned from the Commission on August 21, 2005. 3 James A. Pehrkon retired from his post as Staff Director on December 15, 2005.
55 Appendix 4

FEC Offices

This appendix briefly describes the offices within 

the Commission, located at 999 E Street, NW, Washington, DC 20463. The offices are listed alphabetically, with local telephone numbers given for offices 

that provide services to the public. Commission offices can also be reached toll-free at 800/424-9530 

and locally at 202/694-1100.

Administration

The Administration Division consists of a Finance 

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

programs. The Administration Office is responsible 

for procurement, contracting, space management, 

records management, telecommunications, building security and maintenance. In addition, the office 

handles printing, document reproduction and mail 

services.

Audit

Many of the Audit Division’s responsibilities concern the Presidential public funding program. The 

division evaluates the matching fund submissions of 

Presidential primary candidates and determines the 

amount of contributions that may be matched with 

federal funds. As required by law, the division audits 

all public funding recipients.

In addition, the division audits those committees 

that, according to FEC determinations, have not met 

the threshold requirements for substantial compliance 

with the law. Audit Division resources are also used in 

the Commission’s investigations of complaints.

Commission Secretary

The Commission Secretary is responsible for all 

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

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

The Secretary also logs, circulates and tracks 

numerous materials not related to Commission meetings, and records the Commissioners’ votes on these 

matters. All matters on which a vote is taken are entered into the Secretary’s database.

Commissioners

The six Commissioners, no more than three of 

whom may represent the same political party, are 

appointed by the President and confirmed by the 

Senate. 

The Commissioners serve full time and are responsible for administering and enforcing the Federal 

Election Campaign Act. They generally meet twice 

a week, once in closed session to discuss matters 

that, by law, must remain confidential, and once in a 

meeting open to the public. At these meetings, they 

formulate policy and vote on significant legal and 

administrative matters.

Congressional, Legislative and

Intergovernmental Affairs

This office serves as primary liaison with Congress 

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

about Commission decisions and, in turn, for keeping 

the agency up to date on legislative developments. 

Local phone: 202/694-1006; toll-free 800/424-9530.

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. 

In addition, the EEO office recommends affirmative 

action recruitment, hiring and career advancement. 

The office encourages the informal resolution of complaints during the counseling stage.
56 Appendices

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 Office of General Counsel (OGC) consists of 

five organizational units: (1) the Policy Division; (2) 

the Enforcement Division; (3) the Litigation Division; 

(4) the General Law and Advice Division; and (5) the

Office of Complaints Examination and Legal Administration.

Policy Division—The Policy Division drafts, for 

Commission consideration, advisory opinions and 

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

the Policy Division provides legal advice in response 

to legislative inquiries, legal reviews for all Commission publications and training and advice to Commission staff concerning changes in the law. 

Enforcement Division—The Enforcement Division 

investigates alleged violations of the law, negotiates 

conciliation agreements and recommends civil penalties for individuals and entities that have violated the 

Act.

Litigation Division—The Litigation Division handles 

all civil litigation arising out of any legal actions 

brought by or against the Commission. The Litigation 

Division is the exclusive representative of the Commission before the federal district and circuit courts, 

and the Supreme Court with respect to Title 26 matters. 

General Law and Advice Division—The General 

Law and Advice Division is responsible for processing all audit and repayment matters, as well as handling debt settlements, administrative terminations 

and administrative fines matters. In addition, the division handles all administrative law, disclosure, FOIA, 

Privacy Act, employment and labor law matters, and 

it administers the Commission’s Ethics in Government 

Act program. 

Office of Complaints Examination and Legal Administration—The Office of Complaints Examination 

and Legal Administration provides central docketing 

functions for OGC; provides administrative IT and information services for OGC; and tracks performance 

data for OGC.

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 Internet, email, 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; toll-free 

phone: 800/424-9530.

Information Technology 

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 

IT 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 provide a tool for monitoring contribution limits. The division also publishes the 

Reports on Financial Activity series of periodic studies on campaign finance and generates statistics for 

other publications.

Among its duties related to internal operations, the 

division provides computer support for the agency’s 

automation systems and for administrative functions 

such as management information, document tracking, personnel and payroll systems as well as the 

MUR prioritization system. 

Local phone: 202/694-1250; toll-free phone: 

800/424-9530.
Appendices 57

Inspector General

The FEC’s Inspector General (IG) has two major 

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

agency and to improve the economy and effectiveness of agency operations. The IG is required to report its activities to Congress on a semiannual basis. 

These reports may include descriptions of any serious problems or deficiencies in agency operations as 

well as corrective steps taken by the agency.

Law Library

The Commission law library, a government document depository, is located on the eighth floor and 

is open to the public. The library contains a basic 

reference collection, which includes materials on 

campaign finance reform, election law and current 

political activity. Visitors to the law library may use its 

computers to access the Internet and FEC databases. FEC advisory opinions and computer indices of 

enforcement proceedings (MURs) may be searched 

in the law library or the Public Records Office. Local 

phone: 202/694-1600; toll-free 800/424-9530.

Office of Administrative Review

The Office of Administrative Review (OAR) was 

established in 2000 after statutory amendments 

permitted the Commission to impose civil money 

penalties for violations of certain reporting requirements. Under the program, if the Commission finds 

“reason to believe” (RTB) that a committee failed to 

file a required report or notice, or filed it late, it will 

notify the committee of its finding and the amount of 

the proposed civil money penalty. Within 40 days, the 

committee may challenge the RTB finding. OAR reviews these challenges and may recommend that the 

Commission uphold the RTB finding and civil money 

penalty, uphold the RTB finding but modify or waive 

the civil money penalty, determine that no violation 

occurred or terminate its proceedings, or uphold the 

RTB finding and waive the civil money penalty if the 

committee demonstrates extraordinary circumstances. OAR also serves as the Commission’s liaison with 

the U.S. Department of the Treasury on debt collection matters involving unpaid civil money penalties 

under this program.

Office of Alternative Dispute Resolution

The FEC established the Alternative Dispute 

Resolution (ADR) office to provide parties in enforcement actions with an alternative method for resolving 

complaints that have been filed against them or for 

addressing issues identified in the course of an FEC 

audit. The program is designed to promote compliance with the federal campaign finance law and 

Commission regulations, and to reduce the cost of 

processing complaints by encouraging settlements 

outside the agency’s normal enforcement track. 

Office of Budget, Planning and

Management

This office develops the Commission’s strategic 

plan and 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 and 

provides monthly reports measuring the progress of 

each division in achieving the plan’s objectives.

Office of Human Resources and Labor 

Relations

The Human Resources Office provides policy 

guidance and operational support to managers and 

staff in all areas of human resources management. 

The office plays a critical role in helping the Commission meet strategic performance goals by attracting, 

developing, and retaining a highly qualified, diverse 

workforce and providing results-driven approaches 

to position management and classification, pay administration and compensation, performance management and human resource development. The 

office also provides expert consultation regarding 

employee benefits and wellness and family-friendly 

programs that sustain and enhance the employeremployee relationship. Additionally, the office admin-
58 Appendices

isters the Commission’s labor-management relations 

program. Finally, the Human Resources Office processes all personnel actions and maintains all official 

personnel records for Commission employees.

Press Office

Staff in 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 federal political 

committees 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 include computer indexes, advisory opinions 

and closed MURs. 

The division’s Processing Office receives incoming 

reports and processes them into formats that 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; Faxline: 202/501-3413.

Reports Analysis

Campaign finance analysts assist committee officials in complying with reporting requirements and 

conduct detailed examinations of the campaign finance reports filed by political committees. If an error, omission or prohibited activity (e.g., an excessive 

contribution) is discovered in the course of reviewing 

a report, the analyst sends the committee a letter 

which requests that the committee either amend its 

reports or provide further information concerning a 

particular problem. By sending these letters (RFAIs), 

the Commission seeks to ensure full disclosure and 

to encourage the committee’s voluntary compliance 

with the law. Analysts also provide frequent telephone 

assistance to committee officials and encourage 

them to call the division with reporting questions or 

compliance problems. Local phone: 202/694-1130; 

toll-free phone 800/424-9530.

Staff Director and Deputy Staff Directors

The Staff Director is responsible for appointing 

staff, with Commission approval, and for implementing agency policy. The Staff Director monitors the 

administration of the agency by overseeing the Commission’s public disclosure activities, audit program, 

outreach efforts and review of reports.

Three Deputy Staff Directors assist in this supervision, one in the areas of budget and administration, 

another in information technology and the third in the 

areas of audit and review.
Other Committees 

59

Summary of Disclosure Files

Appendix 5

Statistics on Commission 

Operations

Total Filers 

Existing in 

2005

Filers 

Terminated 

as of 

12/31/05

Continuing

Filers as of

12/31/05

Number of

Reports and 

Statements

in 2005

Gross Receipts

in 2005

(dollars)

Gross 

Expenditures

in 2005

(dollars)

Presidential Candidate 

Committees 216 85 131 363 13,247,617 28,852,466

Senate Candidate Committees 

472 147 325 1596 240,160,412 112,958,629

House Candidate Committees 2,063 471 1,592 6,742 248,315,809 139,288,048 

Federal Party Committees 428 96 386 3,995 112,100,066 30,304,913 

Delegate Committees 1 1 0 0 0 0

Nonparty Committees 

Labor Committees 

Corporate Committees 

Membership, Trade and 

307 

1,710 

2,687 

23 

141 

348 

284 

1,569 

993 

1,665 

9,445 

10,377 

34,438,990 

35,502,100 

108,456,008 

29,404,241

32,4696,876

96,225,926

Communication Cost Filers 344 0 344 13 0 107,668

 

Independent Expenditures by 

Persons Other Than 

Political Committees

487 22 465 30 44,802 68,947

Electioneering Communications 48 0 48 1 139,000 57,350
60 Appendices

Divisional Statistics for Calendar Year 2005

 Total 

Administrative Division

Contracting and procurement transactions 1,103

Publications prepared for print 23

Pages of photocopying 16,000,000

Information Division 

Telephone inquiries 11,064

E-mail Inquiries 1,374

Information letters 2

Distribution of FEC materials 3,751

Prior notices (sent to inform filers

 of reporting deadlines) 18,973

Other mailings 57

Visitors 527

Public appearances by Commissioners 

 and staff 115

Roundtable workshops 5

Publications 35

Press Office

News releases 142

Telephone inquiries from press 5,200

Visitors 220

Freedom of Information Act 

 (FOIA) requests 47

Fees for materials requested under FOIA

(transmitted to U.S. Treasury) 0

Total

Reports Analysis Division 

Paper Documents processed 13,383 

Reports reviewed 52,082

Telephone assistance and meetings 6,963

Requests for additional information (RFAIs) 9,623

Compliance matters referred to Office 

 of General Counsel or Audit Division 140

Administrative Fine cases initiated 196

Information Technology1

Documents receiving Pass I coding 14,682

Documents receiving Pass III coding 43,327

Documents receiving Pass I entry 52,547

Documents receiving Pass III entry 21,575

Transactions receiving Pass III entry 

 • In-house 790,895

 • Contract 147,338

Public Disclosure Division

Campaign finance material processed 

 (total pages) 1,604,646

Cumulative total pages of documents 

 available for review 30,469,535

Requests for campaign finance reports 3,886

Visitors 5,580

Total people served 22,383

Information telephone calls 12,917

Computer printouts provided 35,553

Faxline requests 161

Total income (transmitted to U.S. Treasury) 9,858

Contacts with state election offices 2,964

Notices of failure to file with state 

 election offices 14

1

 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.
Total

Office of General Counsel

 Administrative Terminations

 Pending at beginning of 2005 0

 Opened 572

 Closed 483

 Pending at end of 2005 90

 Advisory opinions 

 Requests pending at beginning of 2005 2

 Requests received 20

 Issued 20

 Not issued 1

 Pending at end of 2005 1

 Compliance cases2

 Pending at beginning of 2005 258

 Opened 128

 Closed 95

Transferred to ADR 75

 Pending at end of 2005 216

Ethics Guidance

Pending at beginning of 2005 0

86

85

1

orts 

f 2005 3

84

83

4 

643

Visitors 468

egal Review Audits

Pending at beginning of 2005 7

Opened 49

Closed 52

 Pending at end of 2005 4

L

 Opened 

 Closed 

 Pending at end of 2005

Financial Disclosure Rep

 Pending at beginning o

 Opened 

 Closed 

 Pending at end of 2005

Law Library 

 Telephone Inquiries 

Total

Appendices 61

Legal Review FECA

Pending at beginning of 2005 3

Opened 44

Closed 37

Pending at end of 2005 7

Legal Review Non-FECA

Pending at beginning of 2005 14

Opened 210

Closed 203

Pending at end of 2005 21

Litigation

Cases pending at beginning of 2005 48

 Cases opened 6

 Cases closed 12

Cases pending at end of 2005 42 

Regulations

Notices of Proposed Rulemaking 9

Final or Interim Final Rules with 

Explanation and Justification 10

Public Rulemaking Hearings 5

Notice of Availability 0

Reports Filed with Office of Government Ethics

Pending at beginning of 2005 1

Opened 9

Closed 9

Pending at end of 2005 1

Special Projects

Pending at beginning of 2005 9

Opened 31

Closed 31

Pending at end of 2005 9

2

 In annual reports previous to 1994, the category “compliance

cases” included only Matters Under Review (MURs). As a result 

of the Enforcement Priority System (EPS), the category has been 

expanded to include internally-generated matters in which the 

Commission has not yet made reason-to-believe findings.
62 Appendices

Status of Audits, 2005

Pending 

at Beginning 

of Year 

Opened Closed Pending 

at End

of Year

Presidential 5 6 1 10

Presidential Joint Fundraising 0 0 0 0

Senate 0 6 0 6

House 3 18 5 16

Party (National) 0 0 0 0

Party (Other) 

Nonparty (PACs) 

6 

8 

0 

1 

6 

6 

0

3

Total 22 31 18 35

Audits Completed by Audit Division, 1975 – 2005

 Total 

Presidential 131

Presidential Joint Fundraising 12

Senate 35

House 206

Party (National) 47

Party (Other) 175

Nonparty (PACs) 106

Total 712
 

Appendices 63

Audit Reports Publicly Released

Year Title 23 Title 264 Total

1976 3 1 4

1977 6 6 12

1978 985 10 108

1979 755 9 84

1985 485 11 59

1981 275 13 40

1982 19 1 20

1983 22 0 22

1984 15 2 17

1985 4 9 13

1986 10 4 14

1987 12 4 16

1988 8 0 8

1989 2 7 9

1990 1 6 7

1991 5 8 13

1992 9 3 12

1993 10 2 12

1994 5 17 22

1995 12 0 12

1996 23 0 23

1997 7 6 13

1998 5 7 12

1999 20 7 27

2000 14 0 14

2001 15 1 16

2002 20 13 33

2003 21 4 25

2004 27 0 27

2005 17 1 18

Total 560 152 712

3 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). 4 Title 26 audits: The Commission must give priority to 

these mandatory audits of publicly funded committees. 5

 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.
65 Appendix 6

2005 Federal Register

Notices

2005-1

Filing dates for the California Special Election in the 

5th Congressional District; Notice of filing dates for 

Special Election (70 FR 3926, January 27, 2005).

2005-2

De Minimis Exemption for Disbursement of Levin 

Funds by State, District, and Local Party Committees; 

Notice of Proposed Rulemaking (70 FR 5385, February 2, 2005).

2005-3

Definition of “Agent” for BCRA Regulations on NonFederal Funds or Soft Money and Coordinated and 

Independent Expenditures; Notice of Proposed 

Rulemaking (70 FR 5382, February 2, 2005).

2005-4

Contributions and Donations by Minors; Final Rules 

(70 FR 5565, February 3, 2005).

2005-5

Price Index Increases for Expenditure and Contribution Limitations; Notice of Expenditure and Contribution Limitation Increases (70 FR 7109, February 10, 

2005).

2005-6

Candidate Solicitation at State, District and Local Party Fundraising Events; Notice of Proposed 

Rulemaking (70 FR 9013, February 24, 2005).

2005-7

Price Index Increases for Expenditure and Contribution; Corrected Notice of Expenditure and Contribution Limitation Increases (70 FR 11658, March 9, 

2005).

2005-8

Political Party Committees Donating Funds to Certain 

Tax-Exempt Organizations and Political Organizations; Final Rules (70 FR 12787, March 16, 2005).

2005-9

Filing Documents by Priority Mail, Express Mail and 

Overnight Delivery Service; Final Rules (70 FR 13089, 

March 18, 2005).

2005-10

Internet Communications; Notice of Proposed 

Rulemaking (70 FR 16967, April 4, 2005).

2005-11

Notice of Public Hearings for Candidate Solicitation 

at State, District and Local Party Fundraising Events; 

Definition of “Agent” for BCRA Regulations; Payroll 

Deductions by Member Corporations for Contributions to a Trade Association’s Separate Segregated 

Fund (70 FR 21163, April 25, 2005).

2005-12

State, District and Local Party Committee Payment 

of Certain Salaries and Wages; Notice of Proposed 

Rulemaking (70 FR 23072, May 4, 2005).

2005-13

Definition of Federal Election Activity; Notice of Proposed Rulemaking (70 FR 23068, May 4, 2005).

2005-14 

Filing dates for the Ohio Special Election in the 2nd

Congressional District; Notice of Filing Dates for Special Election (70 FR 28304, May 17, 2005).

2005-15

Travel on Behalf of Candidates and Political Committees; Announcement of Effective Date (70 FR 33689, 

June 15, 2005).

2005-16

Inflation Adjustments for Civil Monetary Penalties; 

Final Rules (70 FR 34633, June 9, 2005)

2005-17

Candidate Solicitation at State, District and Local 

Party Fundraising Events; Revised Explanation and 

Justification (70 FR 37649, June 30, 2005).
66 Appendices

2005-18

Payroll Deductions by Member Corporations for Contributions to a Trade Association’s Separate Segregated Fund; Final Rules (70 FR 41939, July 21, 2005).

2005-19

Notice of Public Hearings for State, District and Local Party Committee Payment of Certain Salaries and 

Wages; Definition of Federal Election Activity (70 FR 

42282, July 22, 2005).

2005-20

Electioneering Communications; Notice of Proposed 

Rulemaking (70 FR 49508, August 24, 2005).

2005-21

Filing Dates for the California Special Election in the 

48th Congressional District; Notice of Filing Dates for 

Special Election (70 FR 50347, August 26, 2005).

2005-22

State, District and Local Party Committee Payment of 

Certain Salaries and Wages; Reopening of Comment 

Period (70 FR 51302, August 30, 2005).

2005-23

Definition of Federal Election Activity; Reopening of 

Comment Period (70 FR 51302, August 30, 2005).

2005-24

Definitions of “Solicit” and “Direct;” Notice of Proposed Rulemaking (70 FR 56599, September 28, 

2005.)

2005-25

Electioneering Communications; Notice of Public 

Hearing (70 FR 60744, October 19, 2005).

2005-26

$5,000 Exemption for Disbursements of Levin Funds 

by State, District and Local Party Committees and 

Organizations; Final Rules (70 FR 69631, November 

17, 2005).

2005-27

State, District and Local Party Committee Payment 

of Certain Salaries and Wages; Final Rules (70 FR 

75379, December 20, 2005).

2005-28

Coordinated Communications; Notice of Proposed 

Rulemaking (70 FR 73946, December 14, 2005).

2005-29

Electioneering Communications; Final Rules (70 FR 

75713, December 21, 2005).

2005-30

Extension of Administrative Fine Program; Final Rules 

(70 FR 75717, December 21, 2005).

2005-31

Filing Dates for the California Special Election in the 

50th Congressional District, Notice of Filing Dates for 

Special Election (71 FR 1427, January 9, 2006).
67 Appendix 7

2005 Advisory Opinions

AO 2004-43

Sale of ad time not a contribution (Missouri Broadcasters Association; issued February 14, 2005).

AO 2004-45

Accounting method for determining excess contributions under Millionaires’ Amendment (Ken Salazar 

and Salazar for Senate; issued January 27, 2005).

AO 2005-1

Indian tribe not a federal contractor (Mississippi Band 

of Choctaw Indians; issued March 14, 2005).

AO 2005-2

Fundraising by federal officeholder for nonfederal 

campaigns (Senator Jon Corzine and Corzine for 

Governor, Inc.; issued April 22, 2005).

AO 2005-3

Affiliation of membership organizations (American 

College of Obstetricians and Gynecologists; issued 

April 22, 2005).

AO 2005-4

Assignment and reporting restitution owed to committee (John Boehner and Friends of John Boehner; 

issued May 5, 2005).

AO 2005-5

Federal officeholder’s use of funds from nonfederal 

exploratory committee (Representative Ray LaHood; 

issued June 10, 2005).

AO 2005-6

Former officeholder’s donations of remaining campaign funds to charity (Friends of McInnis Canyons 

National Conservation Area; issued June 23, 2005).

AO 2005-7

Application of the press exemption and coordinated 

communications rule to periodicals owed by a candidate (Andy Mayberry for Congress; issued August 

19, 2005).

AO 2005-9

Use of campaign funds to pay travel expenses of a 

federal officeholder’s minor children (Friends of Chris 

Dodd 2004; issued August 19, 2005).

AO 2005-10

Fundraising by federal candidates and officeholders 

for ballot initiative committees (Representatives Howard L. Berman and John T. Doolittle; issued August 

22, 2005).

AO 2005-11

Use of campaign funds to pay for legal expenses 

(Friends of Duke Cunningham; issued September 26, 

2005).

AO 2005-12

Fundraising and spending by a federal candidate/officeholder for his nonfederal exploratory committee 

(Representative Chaka Fattah; issued September 22, 

2005).

AO 2005-13

Nonconnected PAC’s application of allocation of 

expenses and treatment of solicitation proceeds as 

contributions (EMILY’s List; issued October 20, 2005).

AO 2005-14

Solicitation of regional trade association’s members 

for contributions to the SSF of the federation of regional trade associations (Association of KFC Franchisees, Inc. and AKFCF PAC; issued October 20, 

2005).

AO 2005-15

Termination and reorganization of state party committee (Republican State Executive Committee of West 

Virginia; issued October 20, 2005).

AO 2005-16

Application of the press exemption to Internet websites (Fired UP! LLC; issued November 18, 2005).
68 Appendices

AO 2005-17

Membership organization/trade association affiliation 

and solicitation (American Crystal Sugar Company 

and Red River Valley Sugarbeet Growers Association, 

Inc.; issued November 4, 2005).

AO 2005-18

Use of campaign funds for a radio program hosted 

by a Federal candidate/officeholder (Representative 

Silvestre Reyes; issued November 18, 2005).

AO 2005-19

Application of the press exemption to a radio program (Paradigm Shift Productions; issued December 

9, 2005).