Federal 

Election 

Commission 

Annual Report 1998 
Federal 

Election 

Commission 

Annual Report 1998 

Federal Election Commission 

Washington, DC 20463 
Commissioners 

Scott E. Thomas, Chairman 

Darryl R. Wold, Vice Chairman 

Lee Ann Elliott, Commissioner 

David M. Mason, Commissioner 

Danny L. McDonald, Commissioner 

Karl J. Sandstrom, Commissioner 

Statutory Officers 

James A. Pehrkon, Staff Director 

Lawrence M. Noble, General Counsel 

Lynne A. McFarland, Inspector General 

The Annual Report is prepared by: 

Louise D. Wides, Assistant Staff Director,

 Information Division 

Gregory J. Scott, Senior Communications Specialist, 

Information Division 

Robert W. Biersack, Supervisory Statistician,

 Data Division 

R. Blake Lange, Chart Design,

 Administrative Division 
Table of Contents 

Introduction 1 

Chapter One 

The Commission 

Commissioners 3 

Staff Director 3 

The FEC’s Budget 4 

Audit of Commission Operations 6 

Computer Upgrades 6 

Ethics 6 

Inspector General 6 

Chapter Two 

Keeping the Public Informed 

Public Disclosure 7 

Educational Outreach 9 

Office of Election Administration 11 

Chapter Three 

Interpretation and Enforcement of the Law 

Regulations 13 

Advisory Opinions 13 

Enforcement 13

Chapter Four 

Legal Issues 

Corporate/Labor Communications 17 

Soft Money 20 

Definition of Member 22 

Enforcement and Legal Standing 23 

Limited Liability Company 26 

Contributions in the Name of Another 27 

Party Status 28 

Major Purpose Test 29 

Chapter Five 

Presidential Public Funding 

Shortfall Predicted for 2000 31 

Public Funding Regulations 31 

Electronic Filing by Presidential Campaigns 32 

Update on Presidential Debate Lawsuits 32 

Audits of 1996 Presidential Campaigns 32 

Repayments 33 

Chapter Six 

Legislative Recommendations 37 

Chapter Seven 

Campaign Finance Statistics 57 

Appendices

1. Biographies of Commissioners 

and Officers 69 

2. Chronology of Events 73 

3. FEC Organization Chart 75 

4. FEC Offices 77 

5. Statistics on Commission Operations 81 

6. 1998 Federal Register Notices 85 

7. Recipients of Public Funding 87 
Table of Charts 

Chapter One 

The Commission 

Chart 1-1: 

Functional Allocation of Budget 4 

Chart 1-2: 

Divisional Allocation 5 

Chapter Two 

Keeping the Public Informed 

Chart 2-1: 

Size of the Detailed Database 8 

Chapter Three 

Interpretation and Enforcement of the Law 

Chart 3-1: 

Conciliation Agreements by Calendar Year 15 

Chart 3-2: 

Median Civil Penalty by Calendar Year 15 

Chart 3-3: 

Ratio of Active to Inactive Cases by Calendar Year 15 

Chart 3-4: 

Cases Dismissed under EPS 16 

Chart 3-5 

Average Number of Respondents and 

Enforcement Cases by Calendar Year 16 

Chapter Five 

Presidential Public Funding 

Chart 5-1: 

1996 Presidential Audit Reports 

and Determinations 34 

Chapter Seven 

Campaign Finance Statistics 

Chart 7-1: 

Number of PACs, 1974-1998 57 

Chart 7-2: 

House Candidates’ Sources of Receipts: 

Two-Year Election Cycle 58 

Chart 7-3: 

Senate Candidates’ Sources of Receipts: 

Two-Year Election Cycle 59 

Chart 7-4: 

House and Senate Activity by Election Cycle 60 

Chart 7-5: 

PAC Contributions to Candidates by Party 

and Type of PAC 61 

Chart 7-6: 

PAC Contributions to House and Senate 

Candidates by Party and Candidate Status 62 

Chart 7-7: 

PAC Contributions to House Candidates 

by Type of PAC and Candidate Status 63 

Chart 7-8: 

Major Party Federal Account Receipts: 1998 64 

Chart 7-9: 

Party Federal and Nonfederal Receipts 65 

Chart 7-10: 

Sources of Party Receipts 66 

Chart 7-11: 

Projected Shortfall in the Presidential 

Election Campaign Fund 67 
Introduction 1 

Introduction 

Change and reevaluation were the watchwords at 

the Federal Election Commission during 1998. Three 

new Commissioners came aboard in the second half 

of the year, as two retiring Commissioners departed; 

the agency’s longtime staff director resigned to pursue another opportunity; and the agency underwent a 

Congressionally-mandated audit of its operations. 

Amid all of this activity, the Commission continued 

to promote compliance with the law through educational outreach and disclosure, to advise the regulated 

community through regulations and advisory opinions, 

to monitor the financing of the 1998 elections and to 

investigate a myriad of alleged campaign finance 

violations. 

Virtually all of these endeavors benefited from 

changes in computer technology. Enhancements to 

the agency’s internet web site and its electronic filing 

program improved disclosure; a searchable document 

imaging system helped to streamline investigations 

that involved large collections of documents; and a 

new computerized case management system—designed to manage and track the agency’s enforcement and litigation cases—was tested during 1998. 

In addition to its oversight of the 1998 elections, the 

Commission worked to conclude its audits and investigations from 1996 and began to look ahead to the 

2000 elections. The Commission warned of a significant shortfall in the Presidential Election Campaign 

Fund during the 2000 elections—so severe that qualified primary candidates might not receive their full 

entitlements until after the general election. 

The material that follows details the Commission’s 

1998 activities. Additional information concerning 

most matters may be found in the 1998 issues of the 

FEC newsletter, the Record. 
The Commission 3 Chapter One 

The Commission 

During 1998, the FEC welcomed three new Commissioners, bade farewell to two departing Commissioners and to the agency’s longtime staff director, 

and underwent a Congressionally-mandated audit of 

its operations. The agency also rejected a rulemaking 

petition asking for a change in the structure of the sixmember Commission. These, and other developments, are described in the pages that follow. 

Commissioners 

On July 30, 1998, the Senate confirmed the nominations of David M. Mason, Karl J. Sandstrom and 

Darryl R. Wold to the Commission, and the renomination of Commissioner Scott E. Thomas. Commissioners Mason and Sandstrom assumed their duties in 

August; Commissioner Wold, in September. Mr. Mason filled the vacancy created by Trevor Potter’s October 1995 resignation. Mr. Sandstrom and Mr. Wold 

replaced Commissioners John Warren McGarry and 

Joan D. Aikens, respectively. 

During the first eight months of the year, Commissioner Aikens served as Chairman of the Commission, and Mr. Thomas as its Vice Chairman. After Mrs. 

Aikens’s departure, Mr. Thomas became Acting 

Chairman of the Commission. 

On December 10, 1998, the Commission elected 

Mr. Thomas to be its 1999 Chairman and Mr. Wold to 

be its 1999 Vice Chairman. For biographies of the 

Commissioners and statutory officers, see Appendix 

1. 

Rulemaking Petition on Composition of 

Commission 

On January 22, 1998, the Commission declined to 

open a rulemaking in response to a petition for 

rulemaking submitted by the National Reform Party 

Organizing Committee. The petition had asked the 

Commission to amend its rules either to require that 

two members of the six-member FEC be members of 

minor parties or to expand the Commission by three 

seats reserved exclusively for minor party representatives. 

The petitioner had argued that its rights and those 

of other minor parties were infringed by what it 

claimed was a statutory requirement (2 U.S.C. 

§437c(a)(1)) that the Commission be composed of 

three Republicans and three Democrats. 1 

In the Commission’s response, it stated that the 

request was outside of its jurisdiction, citing Art. II, § 

2, cl. 2 of the U.S. Constitution, which provides that 

the President shall make appointments, with the advice and consent of the Senate. The Commission 

further stated that Congress, by law, had established 

the six-member Federal Election Commission and 

that it alone has the authority to reconfigure the Commission. 

The Commission also noted that, while the Commission has always been made up of three Democrats and three Republicans, that composition is not 

stipulated by the Act. The statute merely says that no 

more than three Commissioners may be affiliated with 

the same party. Additionally, 2 U.S.C. §437c(c) requires a four-vote majority to approve any formal 

Commission actions, thus ensuring that no political 

party can dictate the Commission’s actions. 

Staff Director 

John C. Surina, the Commission’s longtime staff 

director, resigned in 1998, to become Director of the 

U.S. Department of Agriculture’s Office of Ethics. His 

last day at the FEC was July 31. The Commission 

immediately launched a nationwide search for a replacement, and expected to select a new staff director 

in early 1999. In the interim, Deputy Staff Director 

James A. Pehrkon served as the agency’s Acting 

Staff Director. 

1 The Reform Party made a similar argument in a lawsuit 

it filed against the FEC, and others, in 1998 (National Committee of the Reform Party v. FEC). On February 27, 1998, 

the U.S. District Court for the Northern District of California 

dismissed the case for lack of standing and failure to state a 

claim upon which relief could be granted. On February 9, 

1999, the U.S. Court of Appeals for the Ninth Circuit affirmed that judgment. (For a discussion of “standing,” see 

page 23.) 
4 Chapter One 

The FEC’s Budget 

Fiscal Year 1998 

Congress appropriated $31.65 million to fund the 

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

earmarked for a PriceWaterhouseCoopers audit of 

the Commission’s operations. (See page 6.) More 

than $4 million of the remaining $30.9 million was set 

aside for specific nonpersonnel uses, yielding an operational budget of roughly $26.8 million. The bulk of 

the $4 million set-aside was devoted to computer 

enhancements, including $1.3 million for computerized litigation and enforcement document support. 

(See page 14.) Although the appropriation fell short o

the Commission’s request, the 313.5 FTE staffing 

authorization was an increase over the actual FY 

1997 staffing level of 297 FTE. 

Fiscal Year 1999 

The Commission received a $36.5 million FY 1999

appropriation, the full amount the agency had requested.2

 Congress earmarked nearly $4.5 million of 

the budget for computerization, and fenced off more 

than $1 million, pending a Commission plan for the 

use of those funds. While Congress encouraged the 

agency to use the fenced-off amount to improve its 

enforcement program, it stipulated that no additional 

staff could be hired for enforcement. Moreover, Congress set a 347 FTE cap on overall staffing. The 

agency had hoped to increase its work force to 360 

FTE by adding 47 positions—37 of which would have 

been in compliance and enforcement. 

In March 1998, FEC Vice Chairman Scott Thomas 

testified in support of the Commission’s staffing increase before the House Appropriations Subcommittee on Treasury, Postal Service and General Government. He argued that “the time has come to, in essence, put more cops on the beat.” 

f 

“Our main message is simple: we need more staff 

to do a better job of ensuring compliance with existing 

laws,” he said. 

Mr. Thomas acknowledged that in recent years 

congressional budget committees have required the 

FEC to use funding increases to improve its computerization efforts and make campaign finance data 

more readily accessible to the public. He stated that, 

while the Commission has endorsed those goals, “it is 

imperative to have both modern technology and more 

staff if the laws on the books are to mean anything.” 

He added: “Without adequate staff to enforce existing 

disclosure requirements and contribution restrictions, 

reliable disclosure will fade, and contributions of any 

amount from any source may become the norm.” 

Budget Allocation: FYs 1998 and 1999 

Budget allocation comparisons for FYs 1997 and 

1998 appear in the table and charts that follow. 

CHART 1-1 

Functional Allocation of Budget 

FY 1998 FY 1999 

Personnel $20,595,216 23,407,500 

Travel/Transportation 195,538 347,500 

Space Rental 2,509,470 3,251,000 

Phones/Postage 497,966 515,412 

Printing 277,242 330,205 

Training/Tuition 96,584 304,395 

Contracts/Services 2,326,013 3,940,210 

Maintenance/Repairs 466,633 381,450 

Software/Hardware 381,710 1,390,500 

Federal Agency Service 1,102,782 1,713,550 

Supplies 345,497 293,778 

Publications 250,353 341,500 

Equipment Purchases 1,130,979 633,000 

Total $30,175,983 36,850,000 2

 During its debate concerning the Commission’s FY 99 

budget, Congress considered instituting term limits for two 

of the agency’s three statutory officers—the staff director 

and general counsel. After a contentious debate within 

Congress and in the news media, the proposal was abandoned. 
The Commission 5 

CHART 1-2 

Divisional Allocation 

FY 1998 Actual 

FY 1999 Projected

 Percent 

Allocation of Budget 0 5 10 15 20 25 30 35

Commissioners 

Inspector General 

Staff Director 

Administration 

Audit 

Information 

Clearinghouse 

Office of General Counsel 

Data Systems Development 

Public Disclosure Division 

Reports Analysis Division 

ADP/Electronic Filing 

Percent 

0 5 10 15 20 25 30 35 Allocation of Staff 

Commissioners 

Inspector General 

Staff Director 

Administration 

Audit 

Information 

Clearinghouse 

Office of General Counsel 

Data Systems Development 

Public Disclosure Division 

Reports Analysis Division 
6 Chapter One 

Audit of Commission Operations 

As part of the Commission’s FY 1998 appropriation, Congress earmarked $750,000 for an independent audit of the FEC. Congress directed the General 

Accounting Office (GAO) to contract for a technological and performance audit and management review of 

the FEC. The Congress requested an impartial assessment of: 

• The overall effectiveness of the FEC in meeting its 

statutory responsibilities; 

• The appropriateness and effectiveness of the FEC 

organizational structure, systems and performance 

measures for accomplishing its mission; 

• The adequacy of the FEC’s strategic information 

resource management plan as a tool for increasing 

FEC efficiency and effectiveness through the use of 

data processing systems; 

• The adequacy of the FEC’s human resource programs for obtaining and maintaining adequate staff 

expertise and organizational capacity; 

• The adequacy and completeness of internal management and financial controls systems to efficiently 

and effectively serve the FEC management needs 

and the reliability of information provided by these 

systems; and 

• The satisfaction of the regulated community with the 

products and services the FEC provides. 

The GAO contracted with PricewaterhouseCoopers 

LLP to perform this assessment, which was to be 

submitted to the Congress no later than January 31, 

1999. The assessment began on June 16, 1998, and 

the project closure conference was held with FEC 

management on January 15, 1999. 

Computer Upgrades 

During 1998, the Commission continued to enhance its computer capabilities in several areas. As 

detailed in Chapter 2, the agency implemented a voluntary electronic filing program, distributed filing software to help committees submit reports in electronic 

form and introduced a searchable database of campaign finance reports on its internet web site. The 

Commission also migrated its staff to a groupware 

environment and undertook case management and 

legal research initiatives to benefit the Office of General Counsel (OGC). 

Ethics 

During 1998, the ethics staff administered the 

Commission’s Ethics in Government Act program, 

which included providing ethics orientation to all new 

employees and training all employees required to file 

public and confidential financial disclosure reports. 

The ethics staff also published an intraagency newsletter to further advise all staff on the standards of 

ethical conduct. They also administered the 

Commission’s public and confidential financial disclosure report system, which helps ensure that employees remain impartial in the performance of their official duties. Finally, the ethics staff submitted required 

reports with the Office of Government Ethics, including the annual agency ethics report, the financial disclosure reports filed by Presidential and Vice Presidential candidates and semiannual travel payment 

reports. 

Inspector General 

Under the Inspector General Act, the Commission’s 

Office of the Inspector General (OIG) is authorized to 

conduct audits and investigations of FEC programs to 

find waste, fraud and abuse. The OIG audited several 

facets of Commission operations in 1998, including 

the agency’s employee appraisal process, its management of desktop and laptop computers and the 

FEC’s recreation association (FECREC). The office 

also monitored the Commission’s progress in assuring 

that its computer systems are Year 2000 compatible. 

The Inspector General also testified before the 

Subcommittee on Government Management, Information and Technology concerning oversight of the FEC. 

At the committee chairman’s request, the OIG provided detailed information concerning its audits over 

the last four years. 
Keeping the Public Informed 7 Chapter Two 

Keeping the Public Informed 

Since its inception, the Commission has disclosed 

campaign finance data and provided information on 

the election law to both the general public and the 

regulated community. Doing so helps to create an 

educated electorate, and it promotes compliance with 

the campaign finance law. 

Both the public disclosure program and the 

agency’s educational outreach efforts promote compliance. Public scrutiny of campaign finance records 

encourages the regulated community to comply with 

the law, while educational outreach to the regulated 

community helps promote compliance by fostering 

understanding of the law. 

Public Disclosure 

Disclosing the sources and amounts of funds spent 

on federal campaign activity continued to be the centerpiece of the Commission’s work during 1998. 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 information available to the public. 

Over the last few years, computers have greatly 

enhanced the disclosure process. As detailed below, 

the Commission now uses computer technology in 

virtually every aspect of the disclosure process, from 

electronic filing to distributing information over the 

internet. 

Electronic Filing 

In January 1997, the Commission introduced an 

interim electronic filing program that allowed committees to file reports via computer disk. In 1998, the 

Commission launched the second phase of that program, permitting filers to submit reports to the Commission by modem and via the internet. 

To assist electronic filers, the agency created and 

distributed free filing software—FECFile. In March 

1998, the second version of that software became 

available. The new version had a number of enhancements, such as importing capabilities, direct modem 

and Internet transmission capabilities, data purging 

(the ability to maintain records over a long period of 

time) and data masking (restricted data entry fields to 

assist the user in entering the correct information). 

With the new software, electronic filers could send 

their computer-prepared reports electronically through 

a direct transmission to the FEC. To take advantage 

of this, committees used a new Digital Encrypted 

Password (DEP) system being implemented by the 

FEC. Committees that chose to send their reports 

through a direct dial connection (via a modem) or a 

TCP/IP (Internet access) were not required to send a 

hard copy of the report’s Summary Page containing 

the treasurer’s signature.1

 Instead, the committee 

treasurer would transmit a password to the FEC along 

with the encrypted file and the committee’s FEC identification number. 

In 1998, the FEC requested proposals from software companies wherein the Commission would 

make small payments to a company in exchange for 

its allowing the FEC to test its program for compliance with electronic filing and for providing electronic 

filing support to its customers. Based on those tests, 

in November 1998, the Commission announced two 

brands of reporting software that were compatible 

with the requirements of the FEC’s electronic filing 

program. Filers using the latest version of Campaign 

Manager made by Aristotle Publishing, Inc., or Keep 

in Touch made by Gnossos Software could be assured that their electronic filings would comply with 

FEC reporting requirements and that their vendor 

would be able to assist them with electronic filing. In 

the past, committees using commercial software 

usually prepared reports on computers, printed out 

the result and mailed the pages to the FEC. 

The Commission believes that political committees 

using FEC-compatible commercial software will find 

electronic filing a quick, flexible and efficient way to 

1

 Please note, certain reporting forms require additional 

documentation: Form 8 requires signatures of all creditors, 

Schedule C1 requires bank signatures and copies of loan 

agreements, and Form 5 and Schedule E must be notarized. Electronic filers are required to file hard copies of any 

of the above schedules (or a digitized version submitted as 

a separate file), along with the signed Summary Page, with 

their diskette. Committees filing through a direct dial connection, or TCP/IP, must send a hard copy of the above 

schedules to the FEC. 
8 Chapter Two 

file their reports. The agency anticipates working with 

other commercial vendors in the future to ensure 

compatibility of their software with the electronic filing 

program. 

Imaging and Processing Campaign Finance Data 

The Commission scans all of the reports filed with 

the agency to create digital images of the documents. 

(Senate candidates continue to file with the Secretary 

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

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

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

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

Records Office or on the Commission’s internet web 

site. In November 1998, the agency added a new 

imaging machine that should speed scanning and 

filming of reports in the 2000 election cycle. 

In addition to the digital imaging system, the Commission codes and enters information from campaign 

finance reports into the agency’s disclosure database, 

which contains data from 1977 to the present. 

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

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

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

the name Smith and operating in Washington, the 

report referred to. 

Public Access to Campaign Data 

During 1998, the Commission greatly enhanced the 

availability of campaign finance data via its internet 

web site—www.fec.gov. Perhaps the most exciting of 

these enhancements was the new query system that 

allowed visitors to access the name and contribution 

amount of any individual who contributed $200 or 

more to a federal political committee during the 1997-

1998 election cycle. The query system also allowed 

users to access lists of PACs or party committees that 

contributed to specific candidates and to view lists of 

CHART 2-1 

Size of the Detailed Database 

Election Cycle No. of Detailed Entries* 

1986 526,000 

1987 262,000 

1988 698,000 

1989 308,000† 

1990 767,000 

1991 444,000‡ 

1992 1,400,000 

1993 472,000 

1994 1,364,000 

1995 570,000 

1996 1,887,160 

1997 619,170 

1998 1,652,904 

* Figures for even-numbered years reflect the cumulative 

total for each two-year election cycle. 

† The entry threshold for individual contributions was 

dropped from $500 to $200 in 1989. 

‡ Nonfederal account data was first entered in 1991. 

candidates to whom selected PACs and parties contributed. The system, which is updated daily, became 

available on July 21. 

When using the web site query system, visitors 

could also access digitized copies of the actual reports filed by House candidates, PACs and party 

committees. Although the Commission has been using the digital imaging system for several years, the 

agency first made the images available on its web site 

in December 1997. These first images were for the 

1998 election cycle only. Throughout 1998, the Commission continued to add images to its web site; not 

just images of newly-filed reports, but also images of 

reports dating back to the 1995-1996 election cycle. 

During the closing weeks of the 1998 campaign, the 

Commission added search functions to help visitors 

locate special filings concerning last-minute contribu-
Keeping the Public Informed 9 

tions and independent expenditures. During 1998, 

web page visitors accessed the imaging and query 

systems more than three million times. 

The Commission’s disclosure database, which 

contains millions of transactions, enabled researchers 

to select information in a flexible way. For example, 

the database could instantly produce a profile of a 

committee’s financial activity for each election cycle. 

As another example, researchers could customize 

their searches for information on contributions by 

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

recipient’s name, date, amount or geographic location). 

Visitors to the Public Records Office could 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. Those outside Washington, 

DC, could access the information via the internet or 

Direct Access Program, or order it using the 

Commission’s toll-free number. 

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

candidates and Commission documents such as 

press releases, audit reports, closed enforcement 

cases (MURs) and agenda documents. 

The FEC also continued to offer on-line computer 

access to the disclosure database to 1,357 subscribers to the thirteen-year-old Direct Access Program 

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

interested citizens. DAP saved time and money for 

the Commission because providing information on 

line is more efficient than processing phone orders for 

data. During 1998, the Commission’s State Access 

Program gave 41 state or local election offices free 

access to the database. In return, state offices helped 

the Commission track candidate committees that had 

failed to file copies of their FEC reports with the appropriate state, as required under federal law. 

Review of Reports 

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

and accurate portrayal of campaign finance activity. 

When analysts find that a report contains errors or 

suggests violations of the law, they send the reporting committee a request for additional information 

(RFAI). The committee treasurer can then make additions or corrections to the report. Apparent violations, 

however, may be referred to the Audit Division or the 

Office of General Counsel for possible enforcement 

action. 

The increases in financial activity disclosed by 

PACs and party committees over the last several 

election cycles have placed greater demands on the 

Commission’s reports analysts—longer reports take 

longer to review. Given that fact, the agency changed 

some of its procedures during 1998 to ensure the 

continued quality and timely review of all active committees’ reports. For example, the Commission aggressively pursued the administrative termination of 

committees having little or no activity, allowing reports 

analysts to concentrate on active, on-going committees. 

Analysts continued to use the Commission’s computer imaging system to view reports at their own 

desks, and they applied refined computer programming tools to help them identify possible compliance 

problems more quickly. The agency also used technology to reduce its administrative workload by automating its nonfiler notification program. 

Educational Outreach 

The Commission continued to promote voluntary 

compliance with the law by educating committees 

about the law’s requirements. 

Home Page (www.fec.gov) 

In its third year of operation, the Commission’s web 

site offered visitors a variety of resources. In addition 

to reviewing the statistical data described above, visitors could access brochures on a variety of topics, 

read agency press releases, review national election 

results and voter registration and turnout statistics, 

look up reporting dates and download the national 

mail voter registration form, FEC reporting forms, 

copies of the Record newsletter, the Campaign 
10 Chapter Two 

Guides for PACs, parties and candidates and other 

agency publications. The Record was placed on the 

Commission’s home page the same day that copy 

was sent to the printer. This meant that the public 

could access the newsletter a full week before the 

printed copy was available. 

Telephone Assistance 

A committee’s first contact with the Commission is 

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

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

documents, publications and forms. In 1998, the Information Division responded to 61,046 callers with compliance questions. 

Faxline and Computer Faxing 

The Commission automated Faxline continued to 

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

During 1998, 4,908 callers sought information from 

the 24-hour Faxline and received 6,429 documents. 

Reporting Assistance 

During 1998, reports analysts, assigned to review 

committee reports, were also available to answer 

complex reporting and compliance-related questions 

from committees calling on the toll-free line. 

The Commission continued to encourage timely 

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

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

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

Conferences 

Leading up to the 1998 elections, the agency conducted a full program of conferences to help candidates and committees understand and comply with 

the law. The Commission held a Washington, DC, 

conference for candidate committees in February, a 

regional conference in Denver in March and a Washington, DC, conference for nonconnected PACs in 

April. 

Both the regional conferences and those held in 

Washington featured workshops on the Commission’s 

electronic filing program and on the impact that recent 

court decisions have had on the federal election law. 

Tours and Visits 

Visitors to the FEC during 1998, including 33 student groups and 33 foreign delegations, listened to 

presentations about the campaign finance law and, in 

some cases, toured the agency’s Public Records 

office. 

Media Assistance 

The Commission’s Press Office continued to field 

questions from the press and navigate reporters 

through the FEC’s vast pool of information. Press 

Office staff responded to 15,514 calls and visits from 

media representatives and prepared 60 news releases. These releases alerted reporters to new campaign finance data and illustrated the statistics in 

tables and graphs. 

Publications 

During 1998, the Commission published several 

documents to help committees, the press and the 

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

site. 

The Commission updated its “Filing a Complaint” 

and “Free Publications” brochures, and published a 

new edition of its Selected Court Case Abstracts, 

1976-September 1998 (CCA). The CCA is a collection 

of summaries of court cases pertinent to the Federal 

Election Campaign Act. Most originally appeared in 

the FEC’s monthly newsletter, the Record. 

As in past years, the Commission continued to 

provide 10,474 free subscriptions to the award-winning Record. The newsletter summarizes recent advisory opinions, litigation, changes in regulations, audit 

reports and compliance cases. It also includes graphs 

and charts on campaign finance statistics. 

The Combined Federal/State Disclosure Directory 

1998 directs researchers to federal and state offices 

that provide information on campaign finance, candidates’ personal finances, lobbying, corporate registra-
Keeping the Public Informed 11 

tion, election administration and election results. The 

Commission also published a new edition of 

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

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

disclosure directory and PAC listing were available 

not only in print and on the web, but also on computer 

disks formatted for popular hardware and software. 

The web page version of the Disclosure Directory 

includes hyperlinks to the web pages of state offices 

and e-mail addresses for state officials. 

The Commission also published Campaign Finance Law 98—a summary of state campaign finance 

laws—and posted “quick reference charts” from it on 

the FEC web site. 

Office of Election Administration 

During 1998 the Office of Election Administration 

held its Advisory Panel Meeting of state and local 

election officials outside the Washington, DC, metropolitan area for the first time in three years. The meeting took place in Portland, Oregon, and more than 

150 election officials from around the country attended. The attendees discussed numerous topics, 

including year 2000 compliance in election offices, 

recent election case law and methods for confirming 

identity through biometric technology. 

The OEA also released several publications during 

1998, including: 

• Innovations in Election Administration Volume 16 -

Using the Internet in Election Offices; 

• Innovations in Election Administration Volume 17 -

Acquiring Election Systems and Equipment; 

• The Election Directory (Section 2) - Addresses for 

Notices Canceling Prior Voter Registrations; and 

• Frequently Asked Questions About the Voting Systems Standards—a brochure produced in conjunction with the National Association of State Election 

Directors (NASED). 

The OEA also continued its work with Management 

Technologies Corp. (MANTECH) to complete a requirements analysis concerning an update of the Performance and Test Standards for Punchcard, 

Marksense and Direct Recording Electronic Voting 

Systems. 

In addition, OEA staff briefed foreign visitors from 

over 45 countries on the Constitutional and administrative structure of the U.S. election system. 
Interpreting and Enforcing the Law 13 Chapter Three 

Interpreting and Enforcing 

the Law 

As part of its mission to administer and enforce the 

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

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

conclusions reached in previous advisory opinions. 

Advisory opinions, in turn, clarify how the statute and 

regulations apply to real-life situations. 

The agency’s enforcement actions also promote 

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

result in civil penalties and remedial action. 

Regulations 

The rulemaking process generally begins when the 

Commission votes to seek public comment on proposed rules by publishing the rules in the Federal 

Register. The agency may also invite those making 

written comments to testify at a public hearing. The 

Commission considers all timely comments when 

deliberating on the final rules in open meetings. Once 

approved, the text of the final regulations and the 

explanation and justification are published in the Federal Register and sent to the U.S. House and Senate. 

The Commission publishes a notice of effective date 

after the final rules have been before Congress for 30 

legislative days.1 

Rulemakings Completed in 1998 

The following new rule took effect in 1998: 

• New regulations requiring publicly funded Presidential campaigns that maintain computerized campaign 

finance records to file their reports electronically took 

effect November 13. (See page 32.) 

Other Rulemakings in Process2 

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

1

 This requirement to wait 30 legislative days before 

publishing the effective date applies only to regulations 

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

 In November 1998, the Commission established a new 

monthly internal reporting schedule to track the status of its 

pending rulemakings. 

• It held a public hearing on February 11 concerning 

its NPRM on recordkeeping and reporting requirements, and proposed revisions to Forms 3 and 3X. 

• It held a public hearing on April 29 concerning its 

Notice of Proposed Rulemaking (NPRM) on the 

definition of “member.” On December 16, the Commission published a second NPRM on this subject. 

(See page 22.) 

• It published an NPRM on July 13 in response to two 

petitions that asked the FEC to curb or ban soft 

money. The Commission held a public hearing on 

November 18. (See page 20.) 

• It published an NPRM on December 18 concerning 

the status of limited liability companies under federal 

election law. (See page 26.) 

• It published an NPRM on December 16 concerning 

the public funding of Presidential primary and general election candidates. (See page 31.) 

Advisory Opinions 

The Commission responds to questions about how 

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

request for an advisory opinion, it generally has 60 

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

opinion must receive at least four favorable votes to 

be approved. 

The Commission issued 26 advisory opinions in 

1998. Of that number, five addressed the status of 

party committees, three examined party committees’ 

use of “soft money” and two covered limited liability 

companies. These and other 1998 advisory opinions 

are discussed in Chapter Four, “Legal Issues.” 

Enforcement 

The Enforcement Process 

The Commission learns of possible election law 

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

monitoring process—potential violations are discovered through a review of a committee’s reports or 

through a Commission audit. The second is the complaint process—anyone may file a complaint, which 
14 Chapter Three 

alleges violations and explains the basis for the allegations. The third is the referral process—possible 

violations discovered by other agencies are referred 

to the Commission. 

Each of these can lead to the opening of a Matter 

Under Review (MUR). Internally generated cases 

include those discovered through audits and reviews 

of reports and those referred to the Commission by 

other government agencies. Externally generated 

cases spurred by a formal, written complaint receive a 

MUR number once the Office of General Counsel 

determines whether the document satisfies specific 

criteria for a proper complaint. 

The General Counsel recommends whether there 

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

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

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

end of an investigation, the General Counsel prepares 

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

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

If the Commission finds “probable cause to believe” 

the respondents violated the law, the agency attempts 

to resolve the matter by entering into a conciliation 

agreement with them. (Some MURs, however, are 

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

to the public. 

Prioritization and Computer Initiatives 

During 1998, the Commission continued to use a 

prioritization system to focus its limited resources on 

more significant enforcement cases. 

Now in its sixth year of operation, the Enforcement 

Priority System (EPS) has helped the Commission 

manage its heavy caseload involving thousands of 

respondents and complex financial transactions. The 

Commission instituted the system after recognizing 

that the agency did not have sufficient resources to 

pursue all of the enforcement matters that came before it. Under the system, the agency uses formal 

criteria to decide which cases to pursue. Among those 

criteria are: the intrinsic seriousness of the alleged 

violation, the apparent impact the alleged violation 

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

matter. The Commission continually reviews the EPS 

to ensure that the agency uses its limited resources to 

best advantage. 

In addition, during 1998, the Office of General 

Counsel (OGC) began using a computerized system 

to image documents and create a searchable database. Developed with help from a support contractor, 

the new system was designed to help streamline the 

investigation of cases that involve large collections of 

documents.

 Also during 1998, the counsel’s office developed 

a new computerized case management system that 

will help manage and track the agency’s enforcement 

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

The Commission expects to implement the new system fully in 1999. 

Despite the prioritization system and computer 

initiatives, the number and complexity of enforcement 

cases continued to exceed the Commission’s enforcement capabilities. During 1998, the agency had nearly 

as many cases awaiting assignment as it had being 

actively pursued. 

Statistics: Civil Penalties, Active/Inactive Cases 

and Number of Respondents 

Chart 3-1 compares civil penalties negotiated in 

1998 conciliation agreements with those of previous 

years. In Chart 3-2, the median civil penalty negotiated in 1998 is compared with the median civil penalty 

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

to inactive enforcement cases over the last three 

years. Chart 3-4 examines the numbers and types of 

cases dismissed under the EPS over the last six 

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

number of respondents per enforcement action during 

1998. 
CHART 3-1 

Conciliation Agreements 

by Calendar Year 

9897969594939291908988878685

Number of Agreeements 

Total Civil Penalty Amount 

Number Thousands of Dollars 

300 2000 

250 

1500 

200 

150 1000 

100 

500 

50 

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

CHART 3-2 

Median Civil Penalty 

by Calendar Year 

Dollars 

10,000 

8,000 

6,000 

4,000 

2,000 

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

Interpreting and Enforcing the Law 15 

CHART 3-3 

Ratio of Active to Inactive Cases by Calendar Year 

Active Cases 

Inactive Cases 

1995 1996 1997 1998 

(294 Cases) (272 Cases) (296 Cases) (188 Cases) 
16 Chapter Three 

CHART 3-4 

Cases Dismissed under EPS 

Stale Cases 

Low-Rated Cases 

250 

200 

150 

100 

50 

0 

1993 1994 1995 1996 1997 1998 

CHART 3-5 

Average Number of Respondents and 

Enforcement Cases by Calendar Year 

Respondents 

Cases 

2,500 

2,000 

1,500 

1,000 

500 

0 

1995 1996 1997 1998 
Legal Issues 17 Chapter Four 

Legal Issues 

As the independent regulatory agency responsible 

for administering and enforcing the Federal Election 

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

requirements and issues advisory opinions that apply 

the law to specific situations. The Commission also 

has jurisdiction over the civil enforcement of the Act. 

This chapter examines major legal issues confronting 

the Commission during 1998 as it considered regulations, advisory opinions, litigation and enforcement 

actions. 

Corporate/Labor Communications 

The Act prohibits corporations and labor organizations from using their treasury funds to make contributions or expenditures in connection with federal elections. 2 U.S.C. §441b. However, the statute and FEC 

regulations contain several exceptions that permit 

corporations and unions to form PACs and, under 

certain circumstances, to communicate their views on 

matters related to federal elections. During 1998, the 

courts handed down two decisions concerning these 

exceptions, and the Commission considered two 

rulemaking petitions aimed at altering the exceptions 

themselves. 

MCFL Nonprofits 

One of the rulemaking petitions the Commission 

considered concerned the exception to the corporate 

ban that permits a narrow category of nonprofit ideological corporations to use their treasury funds to 

make independent expenditures. 11 CFR 114.10. 

The regulatory exception stems from the Supreme 

Court’s 1986 decision in FEC v. Massachusetts Citizens for Life (MCFL) in which the court concluded that 

§441b could not constitutionally prohibit certain types 

of nonprofit corporations from making independent 

expenditures using their corporate treasury funds. 

Subsequently, the Commission promulgated new 

regulations that attempted to codify the MCFL exemption. 11 CFR 114.10. Under the regulations, in order 

for a nonprofit corporation to qualify for the exemption, it must have certain characteristics, as listed 

below: 

• The corporation’s express purpose is to promote 

political ideas, and it cannot engage in business 

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

• The corporation does not have shareholders or other 

persons who have a claim on its assets or earnings, 

or for whom there are disincentives to disassociate 

themselves from the organization on the basis of its 

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

• The corporation was not established by a business 

corporation or labor union and does not directly or 

indirectly accept donations or anything of value from 

such entities. If the corporation cannot demonstrate 

this, it must have a policy not to accept donations 

from business corporations or labor unions (11 CFR 

114.10(c)(4)(i), (ii), (iii)). 

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

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

In November 1997, the James Madison Center for 

Free Speech filed a rulemaking petition asking the 

Commission to revise these rules to conform with the 

decision of the U.S. Court of Appeals for the Eighth 

Circuit in Minnesota Citizens Concerned for Life v. 

FEC (MCCL). The Eighth Circuit had declared 11 

CFR 114.10 invalid because it denied the exemption 

to voluntary political associations that “conduct minor 

business activities or accept insignificant corporate 

donations.” 113 F.3d 129 at 130-131. In the Eighth 

Circuit’s view, this infringed upon those associations’ 

First Amendment rights. 

After publishing a Notice of Availability and receiving comments on the Center’s petition, the Commission voted on May 21, 1998, not to open a 

rulemaking. In denying the petition, the Commission 

noted that courts recognize that a decision by one 

circuit court is binding only in that circuit. No other 

appellate courts have found the Commission’s regulations regarding qualified nonprofit corporations invalid. 

The Commission also believed that the Eighth Circuit erred in its interpretation of MCFL in MCCL. The 

FEC interpreted the MCFL decision to mean that, to 

qualify for the exemption allowing a nonprofit organization to make independent expenditures, a nonprofit 

organization had to satisfy all the characteristics listed 

in that decision, including the requirements that the 

organization not engage in business activities and not 

accept any contributions from corporations. 
18 Chapter Four 

Express Advocacy 

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

at the Commission during 1998. Like the qualified 

nonprofit rules described above, the express advocacy regulations resulted from the Supreme Court’s 

MCFL decision. The MCFL Court, citing First Amendment concerns, held that the ban on corporate and 

labor organization independent expenditures could 

only be constitutionally applied in instances where the 

money was used to expressly advocate the election 

or defeat of a clearly identified candidate for federal 

office. In response to this decision, the Commission 

prescribed a new regulatory definition of express advocacy. The definition was based largely on two court 

opinions: the Supreme Court’s opinion in Buckley v. 

Valeo and the Ninth Circuit Court of Appeals opinion 

in FEC v. Furgatch. 

Subpart (a) of 11 CFR 100.22 reflects the examples of phrases that constitute express advocacy 

listed in the Buckley opinion: “vote for,” “elect,” “support,” “cast your ballot for,” “vote against,” “defeat,” 

“reject.” 

Subpart (b) is based, inter alia, on the Furgatch 

decision. The court of appeals had held that language 

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

reasonable interpretation. 

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

April 1997, Right to Life of Dutchess County, Inc., 

(RLDC), a nonprofit membership corporation based in 

New York, filed suit asking the U.S. District Court for 

the Southern District of New York to find that the FEC 

acted contrary to law in promulgating subpart (b) of 

the express advocacy definition. 

On June 1, 1998, the district court determined that 

subpart (b) violates the First Amendment and enjoined the FEC from enforcing it against RLDC. The 

court found that the regulation was “unconstitutionally 

overbroad” and beyond the scope of §441b, as interpreted by the courts. 

In its suit, RLDC said it intended to make communications to its members and the general public—using 

newsletters, voter guides, columns, press conferences, fliers and other methods—about the stances of 

federal candidates on abortion. RLDC would pay for 

such communications from its general treasury, and 

would accept donations—even from corporations—in 

order to fund such endeavors. RLDC maintained that, 

under subpart (b) of the Commission’s regulations, its 

expenditures would be classified as express advocacy, but that, under the Buckley decision, they would 

not. The group further argued that the threat of FEC 

enforcement action for exercising what it considered 

its constitutional rights chilled its First Amendment 

guarantee of free expression. 

Prior to issuing its opinion, the court determined 

that RLDC had standing to litigate this case. The court 

said that, in cases involving possible limits on First 

Amendment rights, a credible threat of prosecution is 

sufficient injury to confer standing. (For more information on legal standing, see “Enforcement and Legal 

Standing” on page 23.) 

In its opinion, the district court recognized that 

RLDC’s publications would be timed to influence voters when they went to the polls, but it held that subsection (b) of the Commission’s express advocacy 

definition was constitutionally invalid because it “encompasses substantially more communication than is 

permissible” under 2 U.S.C. §441b, as narrowed by 

the Supreme Court in Buckley and MCFL. It stated 

that the Supreme Court requirement of express or 

explicit words of advocacy (of the election or defeat of 

a candidate) is necessary in order to avoid restrictions 

on “issue advocacy,” which is not regulated by the 

FEC and is protected by the First Amendment. 

The court did, however, reject RLDC’s argument 

that the New York district court was bound by the 

decision from the First Circuit appellate court in Maine 

Right to Life Committee, Inc., v. FEC (MRLC), which 

had also found subsection (b) to be unconstitutional. 

The court said that it is a well-settled principle in federal court that a decision in one circuit is not binding 

on federal courts in another circuit. 

The Commission split 3-3 on whether to appeal the 

RLDC decision. Absent a majority vote, the Commission did not file an appeal. 

Petition for Rulemaking. In October 1997, the 

James Madison Center for Free Speech filed a 

rulemaking petition urging the Commission to repeal 
Legal Issues 19 

11 CFR 100.22(b) to conform with the First Circuit’s 

decision earlier that year in MRLC. 

After publishing a Notice of Availability and receiving comments on the petition, the Commission voted 

on February 12, 1998, not to alter its rules. 

The petitioners had asked for the rulemaking following the Supreme Court’s refusal to review the First 

Circuit’s decision in MRLC. The petitioners claimed 

that the Commission had violated the Administrative 

Procedure Act by failing to follow the First Circuit’s 

ruling on a nationwide basis. 

The appellate court for the Fourth Circuit (FEC v. 

Christian Action Network) and a district court in New 

York (RLDC) have reached conclusions similar to 

MRLC. However, these rulings conflict with the decision of the Ninth Circuit Court of Appeals in 

Furgatch—on which 11 CFR 100.22(b) is largely 

based. It is well established that the decision of one 

U.S. circuit court of appeals is not binding outside its 

circuit and that the Supreme Court’s declining to hear 

a case implies nothing as to the merits of the lower 

court decision. Where circuit court opinions disagree, 

the Supreme Court has long recognized that an 

agency is free to adhere to its preferred interpretation 

of regulations and laws in all circuits where the courts 

have not rejected such interpretation. 

Additionally, a majority of the Commission believed 

that the definition of express advocacy at paragraph 

100.22(b) was constitutional. For example, in MCFL, 

the Supreme Court held that materials that were “marginally less direct than ‘vote for Smith’” were, nevertheless, express candidate advocacy, even though 

the materials themselves stated that they were not 

endorsing particular candidates. 

Voter Guides and Voting Records. Under the 

exceptions to §441b, corporations and unions may 

make certain types of communications related to federal elections. Generally, corporations and unions 

may direct to their restricted class1 communications 

that expressly advocate the election or defeat of candidates. Independent communications that go to 

people outside this restricted class may not contain 

an express advocacy message. 

Specific regulations at 11 CFR 114.4(c)(4) and (5) 

permit corporations and unions to produce and distribute nonpartisan voter guides and voting records to the 

general public, subject to certain restrictions. Both of 

these provisions have been the subject of court action 

during the last couple of years. 

Clifton v. FEC. In June 1997, the U.S. Court of 

Appeals for First Circuit invalidated two aspects of the 

regulations governing corporate and union produced 

voter guides and voting records. The appeals court 

declared the voting record regulation at 11 CFR 

114.4(c)(4) invalid only insofar as the regulation “may 

purport to prohibit mere inquiries to candidates”; it 

declared the voter guide regulation at 11 CFR 

114.4(c)(5) invalid only insofar as it limited contact 

with candidates to written inquiries and replies, and 

imposed an equal space and prominence restriction. 

114 F.3d 1309, 1317 (1st Cir. 1997). With regard to 

the plaintiffs’ challenge to the “electioneering message” portion of the voter guide regulation, the appeals court referred the matter to the district court 

because, it said, there had been inadequate briefing 

on the issue. 

On April 30, 1998, the U.S. District Court for the 

District of Maine declared the “electioneering message” provisions to be invalid because they were 

inseverable from the regulations struck down by the 

First Circuit.2

 The court therefore found it unnecessary 

to consider whether the “electioneering message” 

provisions would otherwise be valid under the statute 

and the Constitution. (U.S. District Court for the District of Maine, 96-66-P-H.) 

1

 A corporation’s restricted class consists of its executive 

and administrative personnel, stockholders and the families 

of both of those groups. A labor union’s restricted class 

consists of its executive and administrative personnel, 

members and the families of both of those groups. 

2

 The sections in question—11 CFR 114.4(c)(5)(ii)(D) 

and (E)—stated that voter guides prepared on the basis of 

written responses from candidates to questions posed by a 

corporation or labor organization 1) could not include an 

“electioneering message” and 2) could not score or rate the 

candidates’ responses in a way that conveyed an “electioneering message.” 
20 Chapter Four 

Soft Money 

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

outside the limitations and prohibitions of the Act that 

may be permissible under various state laws—continued to receive considerable attention during 1998. 

Soft Money Rulemaking 

In 1997, President Clinton and five members of 

Congress submitted rulemaking petitions that asked 

the Commission to examine its rules governing soft 

money in light of the influence soft money had on 

political campaigns during the 1996 election cycle. 

The Commission published a Notice of Availability 

on the issue, and received 188 comments in response. Based on those comments, on July 13, 1998, 

the Commission published a Notice of Proposed 

Rulemaking (NPRM) that would change the way party 

committees raise and spend soft money. Alternatives 

listed in the NPRM included leaving the FEC’s current 

regulations unchanged, prohibiting national party 

committees from receiving and using soft money and 

modifying the way soft money is raised and used by 

national and state party committees. 

The Commission held a public hearing concerning 

its proposed rules on November 18, 1998, at which a 

member of Congress, attorneys for a national party 

committee and representatives from several interest 

groups testified. The Commission’s proposed rules 

drew sharply divergent opinions from the witnesses. 

While one side suggested that soft money is a viable 

way for party committees to support their nonfederal 

candidates, the other side argued that the large, unregulated contributions have made meaningless the 

contribution limits of the federal election statute. 

At year’s end, the Commission was reviewing the 

comments and testimony before determining how it 

would proceed with this rulemaking. 

Enforcement and Litigation 

While the Commission considered a regulatory 

change, the courts reviewed the agency’s current soft 

money rules in several 1998 cases. 

Ohio Democratic Party v. FEC and RNC v. FEC. 

On June 25, 1998, the U.S. District Court for the District of Columbia denied motions by the Ohio Democratic Party (ODP) and the Republican National Committee (RNC) for a preliminary injunction to prevent 

the FEC from enforcing its allocation regulation found 

at 11 CFR 106.5 and interpreted in AO 1995-25. The 

regulation requires the plaintiffs to pay a portion of 

what they term “issue advocacy” advertisement costs 

with hard money (i.e., funds that comply with the law’s 

contribution limits and prohibitions). Both committees 

filed suits in 1998 charging that application of the 

allocation regulation to any advertisements that do 

not expressly advocate the election or defeat of a 

clearly identified federal candidate was unconstitutional. The two suits were subsequently consolidated. 

The ODP and RNC claimed that the FEC’s allocation regulation violates the First and Fifth Amendments to the Constitution. The ODP and RNC further 

alleged that the FEC lacks the authority to promulgate 

these rules because they attempt to regulate expenditures that do not expressly advocate the election or 

defeat of a federal candidate. The plaintiffs told the 

court that they would suffer irreparable harm if the 

injunction were not granted. 

When the district court denied a preliminary injunction, the ODP and RNC filed an emergency motion for 

an injunction pending an appeal. The U.S. Court of 

Appeals for the District of Columbia Circuit denied 

that motion and, subsequently, affirmed the district 

court’s decision denying a preliminary injunction . 

The case was pending at year’s end.3 

FEC v. California Democratic Party. In another 

case involving the Commission’s soft money rules, on 

June 11, 1998, the U.S. District Court for the Eastern 

District of California denied the California Democratic 

Party’s (CDP’s) motion to dismiss a complaint filed 

against it by the FEC. The FEC had alleged that the 

CDP had violated the Act when it used only 

nonfederal funds to pay for a voter registration drive 

conducted by a ballot measure committee instead of 

allocating the costs between its federal and 

nonfederal accounts. The court rejected arguments 

that the Commission’s allocation regulation is inconsistent with the Act or the Constitution. 

This case, also, was pending at year’s end. 

3

 ODP withdrew its suit in February 1999. 
Legal Issues 21 

RNC v. FEC and DSCC v. FEC. There were developments in three other soft money cases during 1998: 

one involving the Republican National Committee 

(RNC) and two involving the Democratic Senatorial 

Campaign Committee (DSCC). 

RNC v. FEC. On April 7, 1998, the parties agreed 

to dismiss this case with prejudice and to pay their 

own legal expenses. The RNC had asked the U.S. 

District Court for the District of Columbia to find that 

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

filed with the agency was contrary to law. 

In its initial administrative complaint, filed in 1995, 

the RNC had charged that the Democratic National 

Committee (DNC) had impermissibly used soft money 

to pay all the expenses of a nationwide media campaign that highlighted the party’s legislative proposals 

for health care reform. A few days after this case was 

dismissed , the RNC filed its suit challenging the validity of the same allocation regulation that had been the 

basis for this administrative complaint. (See page 20.) 

DSCC v. FEC. On April 10, 1998, the U.S. Court of 

Appeals for the District of Columbia Circuit remanded 

two cases to the district court after finding that the 

question of standing had not been resolved. (See 

page 24.) 

The cases, which date back to 1993, involve allegations by the DSCC that the Commission had not 

acted quickly enough to pursue its administrative 

complaints. The complaints alleged that the National 

Republican Senatorial Committee (NRSC) made soft 

money donations to nonparty organizations, which 

then used the money to support the Republican 

nominees in Senate races in 1992 and 1994. 

Advisory Opinions 

The Commission applied its current soft money 

allocation rules in three 1998 advisory opinions. 

AO 1998-21. In AO 1998-21, the Commission ruled 

that the National Republican Senatorial Committee 

(NRSC) could not deviate from the minimum federal 

allocation percentage found at 11 CFR 106.5(c)(2) for 

its administrative and get-out-the-vote drive expenses 

incurred during the 1998 election cycle. The regulations require Senate and House campaign committees to pay for administrative and generic voter drive 

expenses with at least 65 percent in federal funds 

during an election year. The committees may pay for 

no more than 35 percent of those expenses with 

nonfederal funds. 

The NRSC planned to promote a number of 

nonfederal candidates during the 1998 election cycle 

with funds from its nonfederal account. It anticipated 

that more than 35 percent of its total candidate-specific disbursements during this time would be on behalf of nonfederal candidates. The NRSC asserted 

that, if it adhered to the minimum federal percentage, 

it would end up paying a disproportionate share of its 

total administrative and generic voter drive expenses 

from its federal accounts. 

The NRSC proposed that, when allocating its expenses prior to the 1998 election, it would use the 

Commission’s allocation ratio, subject to the minimum 

federal percentage. After the election, however, it 

would calculate the actual ratio of federal candidatespecific expenditures to total candidate-specific disbursements during the entire election cycle. If the 

actual nonfederal portion exceeded 35 percent, the 

committee would make a transfer from its nonfederal 

to its federal account so that the amount spent on 

administrative and generic voter expenses reflected 

the actual ratio of federal and nonfederal candidate 

disbursements. 

Since the plain language of the regulation prohibits 

committees from paying more than 35 percent of administrative and generic voter drive expenses with 

nonfederal funds, the Commission could not authorize 

the NRSC plan. 

AO 1998-18. In AO 1998-18, the Commission concluded that the Washington State Democratic Committee had to pay for a “testing the waters” poll entirely from its federal account despite the fact that the 

person whose prospects were being tested ultimately 

declined to seek federal office. 

FEC regulations exempt from the definitions of 

“contribution” and “expenditure” funds raised and 

spent to “test the waters” for a potential candidacy. If 

the individual decides to run for federal office, those 

funds become reportable contributions and expenditures. Regardless of that decision, however, the regulations require that only federally permissible funds be 
22 Chapter Four 

used to “test the waters.” As a result, the Commission 

concluded that the state party had to pay for the poll 

from its federal account, even though the potential 

candidate decided not to run. 

AO 1998-9. In AO 1998-9, the Commission determined that the Republican Party of New Mexico 

(RPNM) could not treat certain disbursements for a 

special election as generic voter drive costs and could 

not use any nonfederal funds to pay for them. Instead, 

the disbursements at issue had to be considered either coordinated expenditures (441a(d) expenditures) 

or independent expenditures, both of which had to be 

paid for with funds from its federal account. 

In connection with a special election to fill the seat 

left vacant by the death of Congressman Steven 

Schiff, the RPNM proposed communications (e.g., by 

telephone, television, radio and direct mail) urging the 

general public to vote Republican in the special election. One of the proposed communications said, in 

part, “On Tuesday, June 23, please vote in the special 

election for Congress. Vote Republican to continue 

the work of Steve Schiff.” 

Commission regulations permit party committees to 

allocate the costs of generic voter drive activities between their federal and nonfederal accounts as long 

as the activities do not mention a specific candidate11 

CFR 106.5(a)(2)(iv). 

In this case, because only one office was at stake 

in the June 23 special election and because the party 

had nominated only one candidate, the RPNM’s proposed communication could mean no other candidate 

than that nominee. As a result, the Commission concluded that the RPNM’s disbursements would be considered either coordinated expenditures subject to its 

limit for the special election, or independent expenditures. 

Definition of Member 

During 1998, the Commission continued to consider alternatives to its regulatory definition of 

“member,”which had been partially invalidated by the 

DC circuit court of appeals. The definition is important 

because, under the Act, only “members” of an incorporated membership organization (and the 

organization’s executive and administrative personnel 

and the families of both groups) may be solicited for 

contributions to the organization’s separate segregated fund, commonly called a political action committee or PAC. Additionally, only members are allowed to 

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

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

one of the following three criteria: 

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

one member of the association’s “highest governing 

body” or for those who choose at least one member 

of that body; or 

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

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

association’s highest governing board. 

In addition, one might qualify as a member by virtue of having an organizational and financial attachment to the association that is significant enough to 

confer membership status, as determined by the 

Commission on a case-by-case basis. 11 CFR 

114.1(e)(2), 100.8(b)(4)(iv)(B). 

Rulemaking 

The Commission published a Notice of Proposed 

Rulemaking (NPRM) on who qualifies as a member of 

a membership association in December 1997, in response to a petition for rulemaking filed by the National Right to Life Committee, Inc. The petition 

sought revisions in the regulations in light of the decision in Chamber of Commerce of the United States v. 

FEC. In that case, the U.S. Court of Appeals for the 

District of Columbia Circuit held that the FEC’s rules 

on who could be considered a member were unduly 

restrictive as applied to the U.S. Chamber of Commerce and the American Medical Association. 11 

CFR 100.8(b)(4)(iv) and 114.1(e). 

In its decision, the court of appeals concluded that 

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

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

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

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

ruled that “members of nonstock corporations were to 
Legal Issues 23 

be defined . . . by analogy to stockholders of business 

corporations and members of labor unions . . . . 

[which] suggest[ed] that some relatively enduring and 

independently significant financial or organizational 

attachment is required . . . .” According to the court of 

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

as if the Supreme Court had used the conjunctive 

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

other indications of organizational attachment.” 

In response to the court’s decision, the 

Commission’s initial NPRM sought comments on 

three alternative definitions of member. All three alternatives would have retained the three preliminary 

requirements set forth in the current rules: that the 

membership association specifically provide for members in its articles and by-laws, expressly solicit members and acknowledge the acceptance of membership 

by, e.g., sending a membership card or including the 

new member on a mailing list. The alternatives differed on the amount of dues required and whether 

any additional organizational attachments were necessary. (See Annual Report 1997 for details.) 

The Commission held a public hearing concerning 

these proposals on April 29, 1998, but commenters 

offered no consensus on which alternative would best 

suit membership organizations. 

After considering these comments, the Commission published a second Notice of Proposed 

Rulemaking (NPRM) on December 16, 1998, offering 

further proposals. 

The second NPRM focused primarily on the attributes of membership organizations. It suggested 

revisions to the preliminary requirements that an organization must meet to qualify as a membership organization—changes that were not proposed in the original NPRM. The proposed changes would: 

• Replace the requirement that a membership organization expressly provide for members in its articles 

and bylaws with a more general statement that such 

organizations should be composed of members; 

• Require that a membership organization be self 

governing; 

• Require membership organizations to inform their 

members of their rights, qualifications and obligations under the organization’s articles, bylaws and 

other formal organization documents, and to make 

these documents available to their members; and 

• Clarify that the current membership communications 

exception at 11 CFR 100.8(b)(4) applies only to 

communications made at the direction or control of a 

membership organization, and not of any outside 

party. 

The second NPRM also addressed the definition 

of member, as explained below. The proposal would 

require members to renew membership in writing on 

an annual basis, as well as meet one of the following 

requirements: 

• Members would have to pay annual dues set by the 

membership organization. The regulations would 

not specify a minimum amount of dues. 

• In those situations where members were not required to pay a specific amount of annual dues, 

membership organizations would have to provide 

“direct and enforceable participatory and governing 

rights” to members. The new rules would provide 

some examples of the types of activities that would 

signify a sufficient organizational attachment, but 

they would not set out an exhaustive list. 

• Retired union members who had paid dues and 

been active members of the organization for at least 

10 years would be granted member status. Their 

past membership, the Commission suggested, 

would satisfy the requirement of a significant financial attachment to the membership organization and 

their union insurance policies and retirement benefits 

would provide significant organizational attachment. 

Comments on the proposed rules were due by 

February 1, 1999.4 

Enforcement and Legal Standing 

During 1998, the Commission faced several court 

challenges regarding its enforcement activity. Under 2 

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

with the FEC may seek court intervention if the 

4

 The Commission held a public hearing on March 17, 

1999, concerning the proposed rules. 
24 Chapter Four 

agency fails to complete action on the complaint 

within 120 days. The court then reviews the 

Commission’s actions on the matter, and determines 

whether the agency acted contrary to law. 

In many of this year’s cases, the legal standing of 

those bringing the challenge was also at issue. If 

there is no standing, the court lacks jurisdiction to 

consider the case. 

To demonstrate standing to litigate an issue in federal court, the plaintiff must satisfy a three-part test 

established by the Supreme Court in Lujan v. Defenders of Wildlife (1992). First, the plaintiff must have 

suffered an “injury in fact—an invasion of a legally 

protected interest which is (a) concrete and particularized and (b) actual or imminent, not conjectural or 

hypothetical.” Second, the injury must be “fairly traceable to the challenged act of the defendant.” And 

third, the injury must be “likely to be redressed by a 

favorable decision.” In short, the test requires injury in 

fact, causation and redressability. 

In its 1998 decision in Steel Co. v. Citizens for a 

Better Environment, the U.S. Supreme Court held 

that, in most circumstances, federal courts must determine whether the plaintiff in a case has legal standing before reaching the merits of the case. 

DSCC v. FEC 

Based on the Steel Co. ruling, on April 10, 1998, 

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

Circuit remanded two enforcement-related cases to 

the district court after finding that the question of 

standing had not been resolved. Both of these cases 

had been filed by the Democratic Senatorial Campaign Committee (DSCC) against the FEC. The court 

declined to reach any other issue in these cases until 

the standing question was resolved. 

The suits challenge the FEC’s response to administrative complaints the DSCC had filed alleging that 

the National Republican Senatorial Committee 

(NRSC) had made soft money donations to nonparty 

organizations, which then had used the money to 

support the Republican nominees in Senate races in 

1992 and 1994. 

At year’s end, the cases were pending in the district court. 

Akins v. FEC 

Later in the year, on June 1, the U.S. Supreme 

Court ruled that James Akins and several other 

former government officials had standing to challenge 

the Commission’s dismissal of an administrative complaint they had filed in 1989 against the American 

Israel Public Affairs Committee (AIPAC). 

The complaint had alleged, inter alia, that AIPAC, 

an organization that lobbies public officials and disseminates information about federal candidates and 

officeholders, had failed to register and report as a 

political committee after it had made contributions to 

and expenditures on behalf of federal candidates in 

excess of $1,000.5 

Injury in Fact. The Court found that the injury in 

fact in this case was that the plaintiffs were prevented 

from obtaining the statutorily-required information 

about AIPAC’s donors and the organization’s campaign-related contributions and expenditures that 

could have helped them to cast a more educated 

vote. It said that there is no reason to doubt that this 

information would have helped the plaintiffs evaluate 

candidates for public office, especially those candidates who received assistance from AIPAC. Thus, the 

court said, the injury in this case was both “concrete” 

and “particular.” The FEC argued that the lawsuit 

involved only a “generalized grievance” shared by 

many (a kind of grievance for which standing usually 

is not conferred); the Supreme Court disagreed. In 

such cases of “generalized grievance,” the Court said, 

the harm is usually “of an abstract and indefinite nature”—not the kind of concrete harm that the Court 

found here. 

Causation and Redressability. The high Court 

also found that the harm asserted by the plaintiffs was 

“fairly traceable” to the FEC’s decision to dismiss their 

administrative complaint, and that the courts have the 

power to redress this harm. 

In addition to finding standing under the three-part 

test, the Court also found that the plaintiffs’ inability to 

5

 The Commission dismissed the complaint because, in 

its view, AIPAC did not qualify as a political committee since 

its major purpose was not influencing federal elections. (For 

further discussion of “major purpose,” see page 29.) 
Legal Issues 25 

obtain information about AIPAC’s campaign-related 

finances satisfied prudential standing because it was 

the kind of injury that the Act seeks to address. 

The Court did not address the merits of the case, 

but instead referred matters concerning AIPAC’s 

membership and major purpose to the Commission 

for further consideration. (See pages 22 and 29, respectively.) 

Judicial Watch, Inc. v. FEC 

In a ruling based on the Akins decision, the U.S. 

District Court for the District of Columbia denied the 

FEC’s motion to dismiss this suit, finding that Judicial 

Watch, Inc., had standing to challenge the agency’s 

dismissal of an administrative complaint it had filed. 

The dismissed complaint alleged that the White 

House, Democratic National Committee (DNC), Department of Commerce and Clinton administration 

had sold seats on foreign trade missions for large 

campaign contributions to the DNC and the Clinton/ 

Gore 1996 reelection campaign. Judicial Watch contended that the contributions violated 18 U.S.C. §600, 

a criminal statute which makes it unlawful to promise 

any special benefit or treatment as a reward for political activities in support of or opposition to a particular 

candidate, election or political event. 

The FEC moved to dismiss this case for lack of 

standing. The FEC claimed that Judicial Watch failed 

to allege an injury to itself flowing from the 

Commission’s dismissal of its administrative complaint. 

The court disagreed. It pointed out that, in Akins, 

the Supreme Court concluded that, for purposes of 

standing, an injury was created when a plaintiff failed 

to obtain information that had to be publicly disclosed. 

Thus, affected voters who do not have access to such 

information have standing to sue. The district court 

held that, in this case, information that trade mission 

seats may have been exchanged for contributions to 

the DNC and Clinton/Gore committee was “important 

and useful to voters.” 

The FEC also argued that Judicial Watch did not 

have standing because its administrative complaint 

failed to identify violations of the Act over which the 

Commission had jurisdiction. The complaint only alleged possible criminal violations, and did not allege 

that any information required by the Act to be disclosed had been withheld. The court stated, however, 

that no complainant is required to supply the FEC 

with a “legal theory” under the Act in order for the 

agency to pursue an administrative complaint. “At 

minimum, the FEC, as an agency acting in the public 

interest, should not interpret complaints narrowly,” the 

court stated. 

Although neither party had addressed the merits, 

and the administrative record had not yet been filed, 

the court, sua sponte, granted summary judgment to 

Judicial Watch and remanded the case to the Commission. The court concluded that the matters outlined in the administrative complaint could raise reporting issues. The court suggested that a contribution in exchange for participation in trade missions 

might be classified as an offset to a contribution, a 

refund of a contribution or a disbursement. If so, the 

court indicated that the DNC and Clinton/Gore committee might have had an obligation to report such 

transactions. 

The court further noted that the FEC did not notify 

Judicial Watch that its administrative complaint was 

deficient, as the court decided is required by 11 CFR 

111.5. The court also stated that, “If ... the allegations 

were not within its prosecutorial jurisdiction, the FEC 

should have referred the matter to the Department of 

Justice or the appropriate agency.” 

The court also dismissed the FEC’s argument that 

a huge backlog of cases at the agency required it to 

dismiss this complaint because of a lack of financial 

and human resources. Although the court had not 

seen the administrative record, it said the FEC could 

not rely on this rationale because it had not been 

raised in the administrative proceedings. 

The court remanded the case to the FEC and ordered it to decide whether to pursue the administrative complaint within 120 days. The FEC appealed, 

and the D.C. Circuit granted the Commission a stay of 

the district court’s decision pending appeal. 

Gottlieb v. FEC 

In another enforcement-related suit, the U.S. Court 

of Appeals for the District of Columbia Circuit affirmed 

a lower court ruling that dismissed Gottlieb v. FEC for 

lack of standing. 
26 Chapter Four 

Alan Gottlieb, together with several other voters 

and organizations, had filed an administrative complaint with the FEC in March 1995 alleging that President Clinton’s 1992 campaign received $1.4 million in 

excess of its entitlement under the Presidential Primary Matching Payment Account Act. According to 

the complaint, the excess payment occurred because, 

following President Clinton’s nomination, his campaign transferred $1.4 million in private contributions 

to his General Election Legal and Accounting Compliance Fund (GELAC Fund) instead of using the funds 

to pay his primary debts. According to appellants, the 

transfer violated 11 CFR 9003.3(a)(1), as it was written at the time of the alleged violation, because the 

regulation permitted transfers of funds only in excess 

of amounts needed to pay primary debts. 

The Commission dismissed the administrative 

complaint after deadlocking in a 3-3 vote. Mr. Gottlieb 

then filed suit, asking the district court to find that the 

FEC’s action had been contrary to law. The district 

court found that the appellants did not have standing 

to pursue their claims in court because they had not 

been harmed by the Commission’s decision. In its 

May 22 decision affirming the lower court, the appellate court called Mr. Gottlieb’s claims of injury “speculative” and “amorphous.” 

Hollenbeck v. FEC 

In another case dismissed for lack of standing, the 

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

the FEC’s motion to dismiss Hollenbeck v. FEC. 

Thomas Hollenbeck, a Pennsylvania resident, had 

filed suit against the FEC after it had dismissed his 

administrative complaint alleging that a 1994 candidate for federal office had accepted excessive loans. 

In its July 27 decision, the district court concluded 

that Mr. Hollenbeck did not meet the requirements for 

standing because he failed to allege a “concrete and 

particularized injury” to himself that came about as a 

result of the Commission’s dismissal of a complaint 

alleging a violation of the Act. Mr. Hollenbeck, the 

court said, only vaguely alleged an injury, claiming 

violations of his First and Fourteenth Amendment 

rights and the need to protect the public from abuses 

by federal candidates. 

Limited Liability Company 

Neither the Act nor FEC regulations specifically 

address the status of limited liability compani

(LLCs), which bear some resemblance to bot

rations and partnerships. However, the Com

has addressed the status of LLCs, case by ca

several advisory opinions, including two issue

1998. Concerned about this case-by-case ap

the Commission published a notice of propos

rulemaking on the subject on December 18, 1

In the 1998 advisory opinions, the Commis

stood by the precedent it had established in p

opinions, determining that LLCs in California 

nois should not be considered either partners

corporations. Instead, the Commission concluded, in 

each case, that the LLC would be considered “any 

other organization or group of persons” for purposes 

of the Act. As such, it could use its treasury funds to 

influence federal elections without also attributing its 

contributions to its individual members. 

In making this determination, the Commission 

noted: 

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

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

• The state’s requirements for naming the LLC; 

• The corporate attribute of limitation of liability for all 

members; and 

• The lack of the general corporate attributes of free 

transferability of interests and continuity of life. 

The Commission’s approval of LLC contributions 

was further conditioned on the assumption that none 

of the members of the LLC was in a category prohibited from contributing to federal elections—corporations, foreign nationals or federal contractors. See 

AOs 1998-11 and 1998-15. 

The Commission’s proposed rules offer two alternatives, both of which would abandon the precedent 

of these advisory opinions. One alternative would 

treat LLCs as partnerships. As such, contributions 

made by the LLC would count not only against its own 

contribution limit, but proportionally against each contributing partner’s limit. Under the other alternative, an 

es 

h corpomission 

se, in 

d during 

proach, 

ed 

998. 

sion 

revious 

and Illihips or 
Legal Issues 27 

LLC’s status would be determined by its federal tax 

classification—either as a partnership or as a corporation.6 

Contributions in the Name of 

Another 

Under the Act and Commission regulations, it is 

illegal for one person to make a contribution in the 

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

of this provision often involve attempts to mask other 

transgressions. During 1998, the Commission concluded a number of enforcement actions involving 

§441f in which respondents had attempted to conceal 

excessive contributions and corporate contributions 

by laundering money through lawful contributors. 

MUR 4704 

In Matter Under Review (MUR) 4704, the American 

Family Life Assurance Company (AFLAC) paid an 

$80,000 civil penalty for making corporate contributions in the names of others, in violation of 2 U.S.C. 

§§ 441b(a) and 441f. The violations occurred when 

AFLAC Vice-President Warren B. Steele II asked two 

of the company’s sales representatives and their 

wives each to contribute $1,000 to help retire Henry 

Espy’s 1994 campaign debt, and then authorized 

AFLAC to reimburse them for their contributions. 

While Mr. Steele knew that the reimbursement was 

improper and that it violated AFLAC policies, he nonetheless orchestrated the repayments, identifying them 

as administrative expenses. When AFLAC discovered 

the reimbursements, it requested a full refund from 

the sales representatives and their wives. 

The Commission concluded that AFLAC knowingly 

and willfully violated both the 441f ban on contributions in the name of another and the 441b(a) prohibition against corporate contributions. 

This MUR grew out of Independent Counsel 

Donald C. Smaltz’s investigation of Mr. Espy’s 

brother, former Agriculture Secretary Mike Espy. 

MUR 4772 

In another case involving corporate contributions 

made in the names of others (MUR 4772), Sun-Land 

Products of California paid an $80,000 civil penalty for 

knowingly and willfully violating §§441b(a) and 441f. 

During the 1992 campaign, Sun-Land’s Board of 

Directors paid 16 nonmanagement directors $2,500 

stipends and suggested they make contributions to 

certain political campaigns and groups. Between 

March and May of that year, Sun-Land sent the collective contributions from some of the 16 employees it 

targeted to the Bush-Quayle ’92 Primary Committee. 

Some of the stipend recipients sent contributions directly to Bush-Quayle ’92 using their own names or 

the names of family members. In all, the targeted 

employees sent $16,000 to Bush-Quayle ’92. 

In 1993, Sun-Land repeated its stipends-for-contributions plan. This time, the company collected and 

sent contributions to Campaign America, a federal 

PAC. Again, some of the targeted employees sent 

contributions directly to the PAC in their names or the 

names of family members. Campaign America received a total of $21,000 in contributions from SunLand employees. 

This matter was referred to the FEC by the Department of Justice. 

MUR 4582 

In MUR 4582, three individuals paid a total of 

$15,500 in civil penalties for their role in a contribution 

reimbursement scheme developed by their attorney, 

Lalit Gadhia. 

During the 1993-1994 election cycle, Mr. Gadhia 

asked many individuals, including three clients, to 

make contributions to the Indian-American Leadership 

Investment Fund (IALIF) or to certain candidate committees. Mr. Gadhia promised them that their contributions would be reimbursed in cash as long as they or 

someone else could provide him a contribution in the 

form of a personal check of $1,000. In the end, the 

6

 The Notice of Proposed Rulemaking also included a 

proposal that would permit subchapter S corporations to 

make contributions that are attributed only as personal 

contributions from the individual stockholders of the corporation. 
28 Chapter Four 

clients, those whom they solicited and others contributed more than $40,000. Mr. Gadhia subsequently 

reimbursed these individuals for their contributions 

and those they solicited. 7 

The candidate committees that received contributions from the three clients included Ben Cardin for 

Congress, Citizens for Sarbanes, Robb for the Senate, Murtha for Congress and Citizens for Senator 

Wofford. All of these committees have since disgorged the funds from their accounts, and paid the 

money to the U.S. Treasury. 

Party Status 

The Commission issued four advisory opinions in 

1998 that addressed state party committee status and 

one that addressed both state and national party status. These designations are important because the 

Act grants qualified state and national party committees certain spending rights that are not available to 

other types of committees. A state or national party, 

for example, may make coordinated party expenditures in support of its general election nominees, and 

may authorize qualified local party committees to 

spend against its coordinated expenditure limit. 2 

U.S.C. §441a(d). As another example, state party 

committees may spend unlimited amounts for certain 

activities that benefit federal candidates but are not 

considered contributions or expenditures. These “exempt activities” include preparing and distributing 

slate cards, sample ballots and campaign materials, 

and conducting voter drives on behalf of the party’s 

Presidential and Vice Presidential nominees. 2 U.S.C. 

§431(8)(B)(v), (x) and (xi). 

State Party Status 

Under the Act and Commission regulations, a 

“state committee” is defined as an organization which, 

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

state level, as determined by the Commission. 

In AO 1992-30, the Commission established two 

criteria necessary to qualify as a state committee of a 

political party. First, the organization must engage in 

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

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

state organization must gain ballot access for its federal candidates who, in turn, must qualify as “candidates” as defined at 2 U.S.C.§431(2). 

Applying these criteria to the factual circumstances 

of the 1998 advisory opinion requests, the Commission concluded that the Green Party of New Mexico, 

the Reform Party of Idaho, the Maine Green Party 

Council and the American Heritage Party in Washington satisfied the requirements for state party status. 

(See Advisory Opinions 1997-29, 1998-3, 1998-23 

and 1998-24.) 

National Party Status 

The Act defines a national party committee as the 

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

the national level. The Commission relies on several 

criteria to determine whether a political party has 

demonstrated sufficient activity on the national level to 

qualify. Those criteria include: 

• Nominating qualified candidates for President and 

various Congressional offices in numerous states; 

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

basis; 

• Publicizing the party’s supporters and primary issues 

throughout the nation; 

• Holding a national convention; 

• Setting up a national office; and 

• Establishing state affiliates. 

A party cannot qualify for national committee status 

if its activity is focused only on the Presidential and 

Vice Presidential election, if the activity is limited to 

one state or if the party has only a few federal candidates on a limited number of state ballots. Nevertheless, ballot access for Presidential candidates is a 

prerequisite for any organization trying to attain national committee status. 

7

 Lalit Gadhia was criminally prosecuted, convicted and 

incarcerated for these actions. Subsequently, the Commission found probable cause to believe that Mr. Gadhia knowingly and willfully made contributions in the names of others 

and solicited contributions from foreign nationals. 
Legal Issues 29 

The Commission applied these criteria to the facts 

outlined in Advisory Opinion 1998-2 and determined 

that the Reform Party USA qualified as a “national 

committee” for purposes of the Act. The Commission 

also determined that 29 Reform Party affiliates satisfied the two criteria for state party status. 

Major Purpose Test 

In 1998, the Supreme Court reviewed Akins v. 

FEC, a case involving the definition of “political committee.” The Act defines a political committee as any 

group of persons that either receives contributions or 

makes expenditures exceeding $1,000 per year for 

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

§431(4). In applying this definition, the Commission 

has considered an additional factor—whether a 

group’s major purpose is the nomination or election of 

candidates. 

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

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

“need only encompass organizations that are under 

the control of a candidate or the major purpose of 

which is the nomination or election of a candidate.” 

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

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

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

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

that the American Israel Public Affairs Committee 

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

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

on the Act’s definition of political committee and that 

the major-purpose test was inapplicable when an 

organization made coordinated expenditures or contributions.

 In 1997, the U.S. Supreme Court granted the petition for certiorari filed by the Solicitor General on behalf of the Commission in this case. On June 1, 1998, 

the Court ruled that the plaintiffs in Akins had standing 

to challenge the Commission’s dismissal of their administrative complaint. (See page 23.) With regard to 

the “major purpose” test, the Court referred the matter 

back to the FEC because of uncertainty about the 

threshold issue of AIPAC’s “membership.” 

The FEC had held that AIPAC’s campaign-related 

communications were directed to many people who 

did not qualify as “members” under the Act. (This was 

important because communications directed to a 

membership organization’s own members are not 

considered “contributions” or “expenditures” under the 

Act, and do not count toward the $1,000 statutory 

threshold for “political committee” status.) Since that 

decision, however, the Commission has had to revisit 

its member regulations because of the decision in 

Chamber of Commerce of the United States v. FEC. 

In that case, an appellate court said that the FEC’s 

regulations defining “member” were invalid because 

they were unduly restrictive. The Commission is in the 

process of conducting a rulemaking that would modify 

language in its regulations to effectively broaden the 

class of people who would qualify as members of 

membership organizations. (See page 22.) 

If the Commission now concludes that AIPAC’s 

supporters are “members” under the Act, then its disbursements for communications to them would not 

count as the kind of expenditures that could trigger 

the requirement to register and report as a political 

committee. In that case, there would be no need to 

address whether the “major purpose” test was applicable—the issue that was before the Court. 

On the other hand, the court said, if the Commission again concludes that AIPAC’s supporters are not 

members, then the Commission and the lower courts, 

in reconsidering the plaintiffs’ arguments, can reevaluate AIPAC’s claims and actions, including questions 

related to whether AIPAC qualified as a political committee and to the relevance of the major-purpose test 

in that regard. 
Presidential Public Funding 31 Chapter Five 

Presidential Public Funding 

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

$3 tax checkoff, the federal government provides 

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

Shortfall Predicted for 2000 

During 1998, the Commission warned of a significant shortfall in the Presidential Election Campaign 

Fund during the 2000 Presidential elections. That 

forecast was based on several factors: 

• Payments from the Fund are adjusted for inflation, 

but Fund receipts are not. 

• It is likely that three parties will participate in the 

public funding program in 2000. 

• There will be open races for the 2000 Democratic 

and Republican nominations. 

• Participation in the tax checkoff is likely to remain 

the same over the next two years. 

Projected payments for the 2000 Democratic and 

Republican national conventions are $13.3 million 

each. Assuming the Reform Party seeks and qualifies 

for public funding, it should receive about $2.5 million 

for its convention, based on its performance in the 

1996 election. Public funding for the general election 

for the two major parties is projected to be approximately $67.9 million a piece. The Reform Party nominee is projected to receive about $12.7 million. 

With regard to matching primary funds, Treasury 

Department regulations require that the payments be 

made from funds actually contained in the Presidential Fund, minus the amount needed for the general 

election and convention payments. In effect, payments for the general election and conventions must 

be set aside. Receipts anticipated from taxpayers 

filing their returns in the year of the election cannot be 

used. Funds left over, after monies for the conventions and general election are set aside, are parceled out to qualified primary candidates. 

Total primary matching funds available through the 

end of 2000 are estimated to be $91.2 million, but 

demand for those funds is estimated to run from $95 

to $105 million. While the total amounts needed and 

available will approach a balance by the end of the 

year, the bulk of the demand will occur early in the 

year before new checkoff receipts are deposited. 

Consequently, a shortfall is expected at the beginning 

of the 2000 election year. (The demand figure, however, is a rough estimate, given the uncertainty over 

the number of primary candidates who will raise sufficient matchable contributions (individual donations of 

$250 or less) to qualify for primary funding.) 

It appears likely that primary candidates will get 

only a portion of their entitlements early in the primary 

season—when the money is often most needed. 

During the last Presidential election cycle, the first 

payment to qualified primary candidates on January 

1, 1996, represented 60 percent of what they were 

entitled to receive. Most candidates were able to secure bridge loans until checkoff receipts for 1996 

overcame the shortfall in April. 

In the coming election, the shortfall may be more 

severe. The agency estimated in 1998 that, depending on the number of participating candidates and the 

amount of matchable contributions they raise, initial 

matching payments on January 2, 2000, might represent less than 40 percent of the funding to which the 

candidates are entitled.1 

If a significant number of candidates remain eligible 

for matching funds throughout the Presidential primaries, subsequent entitlements may not be fully funded 

until new checkoff moneys are received in 2001. That 

means that, based on these projections, primary candidates may not get their full share of the fund until 

after the general election has been decided. 

Public Funding Regulations 

In preparation for the 2000 election, the Commission published a Notice of Proposed Rulemaking 

(NPRM) on December 16, 1998, outlining proposed 

changes to the rules governing Presidential primary 

and general election candidates. Many of the propos1

 A staff memo to the Commissioners, dated March 12, 

1999, revised the projection. The memo estimated that the 

initial payout could be as low as 32 cents on the dollar. 
32 Chapter Five 

als were designed to address issues that arose during 

the past election cycle, and to anticipate issues that 

might arise in 2000. 

The NPRM addressed the following topics: 

• Coordination between publicly funded presidential 

candidates and their political parties 

• Qualified campaign expenses 

• Compliance and fundraising costs 

• Modification of the audit and repayment process 

• Bases for repayment determinations 

• Net outstanding campaign obligations/capital assets 

• Transportation and services provided to the media 

• Documentation of disbursements 

• Matching fund documentation 

• Pre-nomination Vice Presidential committees 

• Nominating conventions and host committees 

• Technical and conforming amendments 

The deadline for comments was February 1, 1999. 

Electronic Filing by Presidential 

Campaigns 

New regulations mandating electronic filing of reports by Presidential campaign committees that receive public funding and maintain computerized campaign finance records became effective November 13, 

1998. The new regulations require the Presidential 

committees to file reports with the FEC by either mailing a diskette with the information on it or transmitting 

the data via the Internet. 

Electronic filing by Presidential committees is intended to enhance public disclosure and to save a 

substantial amount of time and Commission resources. While the number of Presidential contenders 

is usually small, their reports can be voluminous, 

stretching for hundreds and sometimes thousands of 

pages. 

Update on Presidential Debate 

Lawsuits 

In April 1998, Perot ’96, Inc., and the Natural Law 

Party (NLP), along with its 1996 Presidential and Vice 

Presidential candidates, filed lawsuits asking the U.S. 

District Court for the District of Columbia to find that 

the FEC acted contrary to law when it dismissed their 

administrative complaints. The complaints alleged 

several violations of campaign finance law related to 

the Commission on Presidential Debate’s (CPD’s) 

sponsorship of Presidential debates in 1996. The 

plaintiffs also asked the court to order the Commission to take action on those complaints. 

In the alternative, Perot ‘96 and the NLP asked the 

court to find that the FEC’s regulations governing 

nonpartisan candidate debates found at 11 CFR 

110.13 and 114.4(f), as applied by the Commission 

when it dismissed their complaints against the CPD, 

are inconsistent with the Act. They contend that the 

regulations, as applied, constitute an illegal exception 

to the statutory ban on corporate contributions and 

expenditures under 2 U.S.C. §441b. While the law 

generally prohibits corporations from making contributions or expenditures in connection with federal elections, Commission regulations make an exception for 

bona fide nonprofit corporations to sponsor public 

debates among candidates, provided they follow rules 

for conducting such debates. The plaintiffs argued 

that, if the court finds that these regulations are invalid, it should then declare that all expenditures 

made or contributions received by the CPD are unlawful under the Federal Election Campaign Act (the 

Act). 

The cases were pending at year’s end. 

Audits of 1996 Presidential 

Campaigns 

By December 1998, the Commission had approved 

final audit reports for all but five of the 1996 publicly 

funded Presidential primary and general election campaigns and nominating conventions. Four of the remaining audit reports were pending before the Commission, and the fifth was scheduled to be presented 

in early 1999. 

The law requires the Commission to audit all Presidential candidates and convention committees receiving federal funds to ensure that the funds are not misused and that the committees maintain proper 

records. The chart on pages 34-35 tracks the 

Commission’s progress through December 31, 1998. 
Presidential Public Funding 33 

Repayments 

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

received public funds to ensure that they used those 

funds only for qualified campaign expenses and that 

they maintained proper records and filed accurate 

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

audit finds that a candidate or committee exceeded its 

expenditure limits, spent public funds on nonqualified 

expenses or ended the campaign with a surplus. In 

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

Treasury. During 1998, after auditing several 1996 

Presidential campaigns, the Commission determined 

that some repayments were required. 

Perot ‘96 

Based on its audit of Perot ’96, the Presidential 

campaign committee of Reform Party nominee Ross 

Perot, the FEC determined that the committee had to 

repay to the U.S. Treasury $2,310,127 in public funding it received during the 1996 Presidential election. 

This is the amount by which the candidate exceeded 

his entitlement. 

The excess entitlement resulted primarily from the 

inclusion of more than $1.4 million in projected litigation expenses in the committee’s Statement of Net 

Outstanding Qualified Campaign Expenses. Perot ’96 

had budgeted that amount to cover expenses it expected to incur for litigation related to the 1996 Presidential election. While the committee argued that the 

$1.4 million was directly related to the 1996 campaign, the audit report concluded that the projected 

litigation expenses were not qualified campaign expenses because they were not incurred prior to the 

close of the expenditure report period—December 5, 

1996—and were not valid winding-down costs. 11 

CFR 9004.4(a). 

Hagelin for President 

The Commission determined that Dr. John Hagelin 

For President, 1996, the Presidential campaign committee of Natural Law Party nominee Dr. John 

Hagelin, conducted its campaign with no material 

problems in complying with the Act and Commission 

regulations. The committee had received $504,831 

from the U.S. Treasury. 

Fulani Repayment Stay Lifted 

On September 18, 1998, the Commission voted to 

lift the stay on repayment, which it had granted 

Lenora B. Fulani and the Fulani for President Committee. The Commission had stayed $115,875.54 of the 

repayment determination while the committee disputed some of the issues in the Commission’s final 

determination. The Commission lifted the stay after 

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

Circuit denied the committee’s petition seeking judicial 

review of the FEC’s repayment determination of 

$117,269. 

The Commission also granted the committee a 90-

day extension to make the repayment, and concluded 

that the committee had to pay interest on the repayment amount, dating back to August 1997—the original due date for the repayment. 
Approved Received Payment

CHART 5-1 (Part A)1996 Presidential Audit Reports and Determinations

Primary Election Candidate Committees

Candidate/Committee Released/ Approved Public Funds Received Repayment/ Payment Bases for Repayment/Payme

Alexander for President 6/19/97 6/19/97 $4,573,444 $884,993 Matching Funds received in excess of entitleme

campaign expenses and stale-dated checks† 

Buchanan for President 

----

$10,983,475 $13,429* 

Clinton/Gore ‘ 96 12/3/98 

--

$13,412,198 $5,500* Stale-dated checks† and contributions submitte

which were subsequently refunded 

Dole for President 12/3/98 

--

$13,545,771 $13,250* Contributions submitted for matching, which we

refunded 

Gramm for President 6/26/97 6/26/97 $7,356,221 $417,363 Matching Funds received in excess of entitleme

checks† and contributions submitted for matchisubsequently refunded 

Hagelin for President 5/11/98 5/11/98 $504,831 0 N/A Keyes for President 1/15/98 1/15/98 $2,145,766 $84,736 Nonqualified campaign expenses and stale-dat

La Rouche for President 7/17/97 7/17/97 $624,692 $174,623 Surplus repayment, matching funds received in 

entitlement and contributions submitted for mat

subsequently refunded or returned as unpaid by 

Lugar for President 9/18/97 5/19/98 $2,657,244 $14,294 Nonqualified campaign expenses and stale-dat

Specter for President 6/12/97 6/12/97 $1,010,457 $97,311 Stale-dated checks† and prohibited contribution

Wilson for President 7/31/97 8/27/97 $1,724,257 $104,740 Nonqualified campaign expenses and stale-dat

* Final repayment determinations are pending Commission final vote or committee appeal.† Stale-dated checks are returned to the General Fund of the US Treasury.‡ The Commission also audited the Kemp for Vice President Committee.
Approved Received Payment

Approved Received Payment

CHART 5-1 (Part B)1996 Presidential Audit Reports and Determinations

Convention and Host Committees

Committee Name Released/ Approved Public Funds Received Repayment/ Payment Bases for Repayment/Payme

DNC Convention 6/25/98 $12,364,000 $185,759 Unspent federal funds and nonqualified conven

RNC Convention 4/23/98 $12,364,000 $4700 Stale-dated checks† 

DNC Host/Chicago 6/18/98 6/25/98 N/A 

RNC Host/San Diego 4/23/98 N/A 

General Election Candidate Committees

Candidate/Committee Released/ Approved Public Funds Received Repayment/ Payment Bases for Repayment/Payme

Clinton/Gore ‘ 96 General 

--

$61,820,000 0* 

Dole for President General‡ 12/3/98 

--

$61,820,000 0* 

Perot ‘ 96 General 12/4/97 12/4/97 $29,055,400 $1,706,915 Funds received in excess of entitlement 

* Final repayment determinations are pending Commission final vote or committee appeal.† Stale-dated checks are returned to the General Fund of the US Treasury.‡ The Commission also audited the Kemp for Vice President Committee.
Legislative Recommendations 37 Chapter Six 

Legislative 

Recommendations 

In early 1999, the Federal Election Commission 

submitted to Congress and the President two separate sets of legislative recommendations. The first set 

contained three recommendations that the Commission deemed urgent. The second set, comprising 38 

additional recommendations, was divided into two 

parts. The first contained recommendations to ease 

the burden on political committees or to streamline 

administration of the law. The second contained primarily technical recommendations aimed at correcting 

outdated or inconsistent parts of the law. The entire 

collection of 41 recommendations follows. 

Urgent Recommendations: 

Disclosure 

Electronic Filing Threshold (revised 1999)1 

Section: 2 U.S.C. §434(a) 

Recommendation: The Commission recommends that 

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

reports electronically. 

Explanation: Public Law 104-79, effective December 

28, 1995, authorized the electronic filing of disclosure 

reports with the FEC. As of January 1997, political 

committees (except for Senate campaigns) may opt to 

file FEC reports electronically. 

The FEC has created the electronic filing program 

and is providing software to committees in order to 

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

Congress should consider requiring committees that 

meet a certain threshold of financial activity to file 

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

reports more easily and efficiently, resulting in better 

use of Commission resources. Moreover, information 

in the FEC’s database would be standardized for 

committees at a certain threshold, thereby enhancing 

public disclosure of campaign finance information. In 

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

and file reports. 

Legislative Language: 

ELECTRONIC FILING THRESHOLD 

Section 302(a) of the Federal Election Campaign Act 

of 1971 (2 U.S.C. 434(a)) is amended by striking 

paragraph (11) and inserting the following: 

‘(11)(A) The Commission shall promulgate a regulation under which a person required to file a designation, statement, or report under this Act— 

‘(i) is required to maintain and file a 

designation, statement, or report for any 

calendar year in electronic form accessible by 

computers if the person has, or has reason to 

expect to have, aggregate contributions or 

expenditures in excess of a threshold amount 

determined by the Commission; and 

‘(ii) may maintain and file a designation, 

statement, or report in electronic form or an 

alternative form if not required to do so under 

the regulation promulgated under clause (i). 

‘(B) The Commission shall make a designation, statement, report, or notification that is filed electronically 

with the Commission accessible to the public on the 

Internet not later than 24 hours after the designation, 

statement, report, or notification is received by the 

Commission. 

‘(C) In promulgating a regulation under this paragraph, the Commission shall provide methods (other 

than requiring a signature on the document being 

filed) for verifying designations, statements, and reports covered by the regulation. Any document verified under any of the methods shall be treated for all 

purposes (including penalties for perjury) in the same 

manner as a document verified by signature.’. 

1

 This recommendation was also made by 

PricewaterhouseCoopers LLP in its Technology and Performance Audit and Management Review of the Federal Election Commission, pages 4-34 and 5-2. 
38 Chapter Six 

Campaign-Cycle Reporting2 

Section: 2 U.S.C. §434 

Recommendation: The Commission recommends that 

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

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

required. 

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

requirements, the committee must track donations on 

a calendar year basis. Second, to comply with the 

law’s contribution limits, the committee must track 

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

law’s recordkeeping requirements less burdensome to 

committees. (Likewise, the Commission recommends 

that contribution limits be placed on a campaign-cycle 

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

This change would also benefit public disclosure of 

campaign finance activity. Currently, contributions 

from an individual are itemized only if the individual 

donates more than $200 in the aggregate during a 

calendar year. Likewise, disbursements are itemized 

only if payments to a specific payee aggregate in 

excess of $200 during a calendar year. Requiring 

itemization once contributions from an individual or 

disbursements to a payee aggregate in excess of 

$200 during the campaign would capture information 

of interest to the public that is currently not available. 

Moreover, to determine the actual campaign finance 

activity of a committee, reporters and researchers 

must compile the total figures from several year-end 

reports. In the case of Senate campaigns, which may 

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

particularly helpful. 

Legislative Language: 

CAMPAIGN CYCLE REPORTING 

Paragraphs (2), (3), (4), (6), and (7) of section 304(b) 

of the Federal Election Campaign Act of 1971 (2 

U.S.C. 434(b)(2), (3), (4), (6), and (7)) are amended 

by inserting after “calendar year” each place it appears the following: “(election cycle, in the case of an 

authorized committee of a candidate for Federal office).” 

Contributions and Expenditures 

Application of $25,000 Annual Limit 

Section: 2 U.S.C. §441a(a)(3) 

Recommendation: The Commission recommends that 

Congress consider modifying the provision that limits 

individual contributions to $25,000 per calendar year 

so that an individual’s contributions count against his 

or her annual limit for the year in which they are 

made. 

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

contribution to a candidate made in a nonelection 

year counts against the individual donor’s limit for the 

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

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

Candidate Smith in an election year contributes to her 

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

his limit for the year in which he contributed. Unaware 

that the contribution actually counts against the year 

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

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

requiring contributions to count against the limit of the 

calendar year in which the donor contributes, 

confusion would be eliminated and fewer contributors 

would inadvertently violate the law. The change would 

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

use of our data base, we could more easily monitor 

contributions made by one individual regardless of 

whether they were given to retire the debt of a 

2

 This recommendation was also made by 

PricewaterhouseCoopers LLP in its Technology and Performance Audit and Management Review of the Federal Election Commission, pages 4-29 and 5-2. 
Legislative Recommendations 39 

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

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

limits. Nor would it affect the total amount that any 

individual could contribute in connection with federal 

elections. 

Legislative Language: 

APPLICATION OF $25,000 ANNUAL LIMIT 

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

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

Part A: Other Recommendations* 

Disclosure 

Incomplete or False Contributor Information 

(1999) 

Section: 2 U.S.C. §434 

Recommendation: Congress should amend the Act to 

address the recurring problem of committees’ failure 

to provide full disclosure about their contributors. 

First, Congress might wish to prohibit the acceptance 

of contributions until the contributor information is 

obtained and recorded in the committee’s records. 

Second, Congress might wish to amend the law to 

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

Explanation: There is consistent concern expressed 

by the Commission, the public and the press about 

the failure of candidates and political committees to 

report the addresses and occupations of many of their 

contributors. Some press reports have suggested 

that this requirement is deliberately evaded in order to 

obfuscate the special-interest origins of contributions. 

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

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

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

efforts” regulations at 11 CFR 104.7 to specify that a 

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

(including a statement of the law) and making one 

follow-up request for each contribution lacking the 

required information. See 58 FR 57725 (October 27, 

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

Even with stronger regulations in place, however, 

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

An inducement to campaigns and political committees 

to fulfill this responsibility would be to prohibit the 

acceptance and/or expenditure of contributions until 

the contributor information is obtained and recorded in 

the committee’s records. In the case of publicly 

funded Presidential campaigns, Congress may wish 

to tie the eligibility of a campaign to receive public 

funding to its ability to gather contributor information. 

These restrictions would have an immediate effect 

upon a committee’s ability to effectively campaign 

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

obtain the information promptly. Moreover, violations 

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

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

clear that the contributor or committee is liable for 

submitting information known by the provider of the 

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

* The date, 1999, appearing after the name of a recommendation, indicates the recommendation was new in 1999. 

Those recommednations without any date were carried 

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

Waiver Authority 

Section: 2 U.S.C. §434 

Recommendation: The Commission recommends that 

Congress give the Commission the authority to adjust 

the filing requirements or to grant general waivers or 

exemptions from the reporting requirements of the 

Act. 

Explanation: In cases where reporting requirements 

are excessive or unnecessary, it would be helpful if 

the Commission had authority to suspend the reporting requirements of the Act. For example, the Commission has encountered several problems relating to 

the reporting requirements of authorized committees 

whose respective candidates were not on the election 

ballot. The Commission had to consider whether the 

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

the following circumstances: 

• The candidate withdraws from nomination prior to 

having his or her name placed on the ballot. 

• The candidate loses the primary and therefore is not 

on the general election ballot. 

• The candidate is unchallenged and his or her name 

does not appear on the election ballot. 

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

monthly filers to file Monthly reports on the 20th day 

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

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

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

before the election. As a result of these specific due 

dates mandated by the law, the 1998 October 

Monthly report, covering September, was required to 

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

to be postmarked October 19, one day before the 

October Monthly. A waiver authority would enable the 

Commission to eliminate the requirement to file the 

monthly report, as long as the committee includes the 

activity in the Pre-General Election Report and files 

the report on time. The same disclosure would be 

available before the election, but the committee would 

only have to file one of the two reports. 

In other situations, disclosure would be served if the 

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

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

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

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

such a situation, the Commission should have the 

authority to adjust the filing requirements to allow for a 

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

report), which would provide more relevant disclosure 

to the public. 

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

Commission as Sole Point of Entry for Disclosure 

Documents (revised 1999)3 

Section: 2 U.S.C. §432(g) 

Recommendation: The Commission recommends that 

it be the sole point of entry for all disclosure documents filed by federal candidates and political committees. This would primarily affect Senate candidate 

committees, but would also apply to the Republican 

and Democratic Senatorial Campaign Committees. 

Under current law, those committees alone file their 

reports with the Secretary of the Senate, who then 

forwards microfilmed copies to the FEC. 

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

3

 This recommendation was also made by 

PricewaterhouseCoopers LLP in its Technology and Performance Audit and Management Review of the Federal Election Commission, pages 4-37 and 5-2. 
Legislative Recommendations 41 

for reports filed by House candidates from the Clerk of 

the House to the FEC. However, Senate candidates 

and the Senatorial Campaign Committees still must 

file their reports with the Secretary of the Senate, who 

then forwards the copies on to the FEC. A single point 

of entry is desirable because it would conserve government resources and promote public disclosure of 

campaign finance information. 

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

Secretary of the Senate. Consequently, the FEC must 

ship the reports back to the Senate. Disclosure to the 

public is delayed and government resources are 

wasted. 

Public Law 104-79 also authorized the electronic filing 

of disclosure reports with the FEC. As of January 

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

all could opt to file FEC reports electronically. This 

filing option is unavailable to Senate campaigns and 

to the Senatorial Campaign Committees, though, 

because the point of entry for their reports is the Secretary of the Senate. It should be noted, however, 

that the FEC is working closely with the Secretary of 

the Senate to improve disclosure within the current 

law. For example, the FEC and the Secretary of the 

Senate are exploring ways to implement digital imaging of reports and to develop the capacity of the 

Secretary’s office to accept electronically filed reports. 

While these measures, once completed, will undoubtedly improve disclosure, absent mandatory electronic 

filing, a single point of entry remains desirable. It is 

important to note as well that, if the Congress adopted 

mandatory electronic filing, the recommendation to 

change the point of entry for Senate filers would be 

rendered moot. 

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

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

FEC. In order to eliminate the State filing requirement 

for Senate candidates and the Senatorial Campaign 

Committees, it would be necessary for a State to have 

electronic access to reports filed with the Secretary of 

the Senate, as well as to reports filed with the Federal 

Election Commission. In other words, unless the FEC 

becomes the point of entry for reports filed by Senate 

candidates and the Senatorial Campaign Committees, 

either the States will need to have the technological 

and financial capability to link up electronically with 

two different federal offices, or these committees must 

continue to file copies of their reports with the State. 

We also reiterate here the statement we have made 

in previous years because it remains valid. A single 

point of entry for all disclosure documents filed by 

political committees would eliminate any confusion 

about where candidates and committees are to file 

their reports. It would assist committee treasurers by 

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

conflicts may arise when more than one office sends 

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

personnel, equipment and data processing. 

The Commission has authority to prepare and publish 

lists of nonfilers. It is extremely difficult to ascertain 

who has and who has not filed when reports may 

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

difficult for the Commission to track responses to 

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

timely manner, even though they were sent on time 

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

not in compliance. A single point of entry would eliminate this confusion. Finally, the Commission notes 

that the report of the Institute of Politics of the John F. 

Kennedy School of Government at Harvard University, An Analysis of the Impact of the Federal Election 

Campaign Act, 1972-78, prepared for the House Ad-
42 Chapter Six 

ministration Committee, recommended that all reports 

be filed directly with the Commission (Committee 

Print, 96th Cong., 1st Sess., at 122 (1979)). 

Fraudulent Solicitation of Funds (revised 1999) 

Section: 2 U.S.C. §441h 

Recommendation: Section 441h prohibits fraudulent 

misrepresentation such as speaking, writing or acting 

on behalf of a candidate or committee on a matter 

which is damaging to such candidate or committee. It 

does not, however, prohibit persons from fraudulently 

soliciting contributions. The Commission recommends 

that a provision be added to this section prohibiting 

persons from fraudulently misrepresenting themselves 

as representatives of candidates or political parties for 

the purpose of soliciting contributions. 

Explanation: The Commission has received a number 

of complaints that substantial amounts of money were 

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

complained that contributions which people believed 

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

the contributors were harmed by such diversion. The 

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

so. The contributors’ funds were used in a manner 

they did not intend. The Commission has been unable 

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

Draft Committees (revised 1999) 

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

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

Recommendation: The Commission recommends that 

Congress consider the following amendments to the 

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

committees are “political committees” subject to the 

Act’s provisions. 

1. Bring Funds Raised and Spent for Undeclared but 

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

clearly identified individual to seek nomination for 

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

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

within the definition of “expenditure” funds expended 

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

2. Restrict Corporate and Labor Organization Support 

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

corporations, labor organizations and national banks 

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

3. Limit Contributions to Draft Committees. The law 

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

nomination or election of a clearly identified individual 

for any federal office which exceed the contribution 

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

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

law should clarify that a draft committee is separate 

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

Explanation: These proposed amendments were 

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

Machinists Non-Partisan Political League and FEC v. 

Citizens for Democratic Alternatives in 1980 and of 

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

FEC v. Florida for Kennedy Committee. The District of 

Columbia Circuit held that the Act, as amended in 

1979, regulated only the reporting requirements of 

draft committees. The Commission sought review of 

this decision by the Supreme Court, but the Court 

declined to hear the case. Similarly, the Eleventh 

Circuit found that “committees organized to ‘draft’ a 

person for federal office” are not “political committees” 

within the Commission’s investigative authority. The 
Legislative Recommendations 43 

Commission believes that the appeals court rulings 

create a serious imbalance in the election law and the 

political process because a nonauthorized group 

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

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

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

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

and private, into the federal electoral process through 

unlimited contributions made to nonauthorized draft 

committees that support a person who has not yet 

become a candidate. These recommendations seek 

to avert that possibility. 

Contributions and Expenditures 

Contributions by Foreign Nationals (1999) 

Section: 2 U.S.C. §441e 

Recommendation: The Commission recommends 

that Congress explicitly clarify that section 441e of the 

Act applies to both contributions and expenditures 

received and made in connection with both federal 

and nonfederal elections. 

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

contributions by foreign nationals, as applying to both 

federal and nonfederal elections. However, some 

recent court decisions have rejected this interpretation. While the Commission continues to believe that 

the statute permits, and the legislative history supports, application of section 441e to nonfederal elections, statutory clarification of this point would be useful. Congress could clarify section 441e either by 

changing the term “contribution” to “donation,” or by 

explicitly applying the definition of contribution included in section 441b(b)(2) to section 441e. In this 

regard, Congress may also wish to note that, while 

section 441b (banning corporate, national bank, and 

union spending in connection with elections) prohibits 

both “contributions” and “expenditures,” section 441e 

(foreign nationals) prohibits “contributions” only. The 

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

which prohibits both contributions and expenditures 

by foreign nationals. A statutory clarification would 

make clear Congress’s intent. 

Election Period Limitations for Contributions to 

Candidates (revised 1999) 

Section: 2 U.S.C. §441a 

Recommendation: The Commission recommends that 

limits on contributions to candidates be placed on an 

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

Explanation: The contribution limitations affecting 

contributions to candidates are structured on a “per 

election” basis, thus necessitating dual bookkeeping 

or the adoption of some other method to distinguish 

between primary and general election contributions. 

The Commission has had to adopt several rules to 

clarify which contributions are attributable to which 

election and to assure that contributions are reported 

and used for the proper election. Many enforcement 

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

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

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

failure to fully document which election was intended. 

Sometimes the apparent “excessives” for a particular 

election turn out to be simple reporting errors where 

the wrong box was checked on the reporting form. 

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

is applicable. Further, several enforcement cases 

have been generated based on the use of general 

election contributions for primary election expenses or 

vice versa. 

Most of these complications would be eliminated with 

adoption of a simple “per cycle” contribution limit. 

Thus, multicandidate committees could give up to 

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

to an authorized committee at any point during the 

election cycle. The Commission and committees 

could get out of the business of determining whether 

contributions are properly attributable to a particular 
44 Chapter Six 

election, and the difficulty of assuring that particular 

contributions are used for a particular election could 

be eliminated. 

It would be advisable to clarify that if a candidate has 

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

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

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

because at the Presidential level candidates might opt 

to take public funding in the general election and 

thereby be precluded from accepting contributions, 

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

should be retained for Presidential candidates. 

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

primary or general election, but this would be tempered by the tendency of campaigns to plan their 

fundraising and manage their resources so as not to 

be left without fundraising capability at a crucial time. 

Moreover, adoption of this recommendation would 

eliminate the current requirement that candidates who 

lose the primary election refund or redesignate any 

contributions collected for the general election. 

Distinguishing Official Travel from Campaign 

Travel 

Section: 2 U.S.C. §431(9) 

Recommendation: The Commission recommends that 

Congress amend the FECA to clarify the distinctions 

between campaign travel and official travel. 

Explanation: Many candidates for federal office hold 

elected or appointed positions in federal, state or local 

government. Frequently, it is difficult to determine 

whether their public appearances are related to their 

official duties or whether they are campaign related. A 

similar question may arise when federal officials who 

are not running for office make appearances that 

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

behalf of specific candidates. 

Another difficult area concerns trips in which both 

official business and campaign activity take place. 

There have also been questions as to how extensive 

the campaign aspects of the trip must be before part 

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

criteria for determining when such activity is campaign 

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

of a trip. This will also help Congress determine when 

official funds must be used under House or Senate 

Rules. 

Contributions from Minors 

Section: 2 U.S.C. §441a(a)(1) 

Recommendation: The Commission recommends that 

Congress establish a presumption that contributors 

below age 16 are not making contributions on their 

own behalf. 

Explanation: The Commission has found that contributions are sometimes given by parents in their 

children’s names. Congress should address this potential abuse by establishing a minimum age for contributors, or otherwise provide guidelines ensuring 

that parents are not making contributions in the name 

of another. 

Lines of Credit and Other Loans Obtained by 

Candidates (revised 1999) 

Section: 2 U.S.C. §431(8)(B)(vii) 

Recommendation: The Commission recommends that 

Congress provide guidance on whether candidate 

committees may accept contributions which are derived from advances from a financial institution, such 

as advances on a candidate’s brokerage account, 

credit card, or home equity line of credit, and, if so, 

Congress should also clarify how such extensions of 

credit should be reported. 

Explanation: The Act currently exempts from the definition of “contribution” loans that are obtained by political committees in the ordinary course of business 

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

§431(8)(B)(vii). Loans that do not meet the requirements of this provision are either subject to the Act’s 
Legislative Recommendations 45 

contribution limitations, if received from permissible 

sources, or the prohibition on corporate contributions, 

as appropriate. 

Since this aspect of the law was last amended in 

1979, however, a variety of financial options have 

become more widely available to candidates and 

committees. These include a candidate’s ability to 

obtain advances against the value of a brokerage 

account, to draw cash advances from a candidate’s 

credit card, or to make draws against a home equity 

line of credit obtained by the candidate. In many 

cases, the credit approval, and therefore the check 

performed by the lending institution regarding the 

candidate’s creditworthiness, may predate the 

candidate’s decision to seek federal office. Consequently, the extension of credit may not have been 

made in accordance with the statutory criteria such as 

the requirement that a loan be “made on a basis 

which assures repayment.” In other cases, the 

extension of credit may be from an entity that is not a 

federally-insured lending institution. The Commission 

recommends that Congress clarify whether these 

alternative sources of financing are permissible and, if 

so, specify standards to ensure that these advances 

are commercially reasonable extensions of credit. 

Broader Prohibition Against Force and Reprisals 

(revised 1999) 

Section: 2 U.S.C. §441b(b)(3)(A) 

Recommendation: The Commission recommends that 

Congress revise the FECA to make it unlawful for a 

corporation, labor organization or separate segregated fund to use physical force, job discrimination, 

financial reprisals or the threat thereof to obtain a 

contribution or expenditure on behalf of any candidate 

or political committee. 

Explanation: Current §441b(b)(3)(A) could be interpreted to narrowly apply to the making of contributions or expenditures by a separate segregated fund 

which were obtained through the use of force, job 

discrimination, financial reprisals and threats. Thus, 

Congress should clarify that corporations and labor 

organizations are prohibited from using such tactics in 

the solicitation of contributions for the separate segregated fund. In addition, the FEC has revised its rules 

to clarify that it is not permissible for a corporation or a 

labor organization to use coercion, threats, force or 

reprisal to urge any individual to contribute to a candidate or engage in fundraising activities. See 60 FR 

64260 (December 14, 1995). However, Congress 

should include language to cover such situations. 

Enforcement 

Addition of Commission to the List of Agencies 

Authorized to Issue Immunity Orders According to 

the Provisions of Title 18 (1999) 

Section: 18 U.S.C. §6001(1) 

Recommendation: The Commission recommends 

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

Commission to the list of agencies authorized to issue 

immunity orders according to the provisions of title 18. 

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

as amended, the Presidential Election Campaign 

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

any proceeding or investigation, to order testimony to 

be taken by deposition and to compel testimony and 

the production of evidence under oath pursuant to 

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

called to testify or provide other information refuses to 

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

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

immunity for information provided to the Commission. 

A number of other independent agencies do have 

access to such a mechanism. 

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

§§6001-6005. 18 U.S.C. §§ 6002 and 6004(a) provide that if a witness asserts his Fifth Amendment 

privilege against self-incrimination and refuses to 

answer questions at any “proceeding before an 
46 Chapter Six 

agency of the United States,” the agency may seek 

approval from the Attorney General to immunize the 

witness from criminal prosecution for testimony or 

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

or information). If the Attorney General approves the 

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

to the witness, he cannot continue to refuse to testify 

in the inquiry. The order issued by the agency only 

immunizes the witness as to criminal liability, and 

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

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

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

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

mechanism described above. The term is currently 

defined to mean an executive department or military 

department, and certain other persons or entities, 

including a large number of enumerated independent 

federal agencies. The Commission is not one of the 

enumerated agencies. When the provision was 

added to title 18 in 1970, the enumerated agencies 

were those which already had immunity-granting 

power, but additional agencies have been substituted 

or added since then. Adding the Commission as one 

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

would facilitate its obtaining of information relevant to 

the effective execution of its enforcement responsibilities. 

Fines for Reporting Violations (revised 1999)4 

Section: 2 U.S.C. §437g 

Recommendation: The Commission recommends that 

Congress consider granting the Commission authority 

to assess administrative fines for straightforward violations relating to the reporting of receipts and disbursements. 

Explanation: In maintaining a regulatory presence 

covering all aspects of the Act, even the most simple 

and straightforward strict liability disclosure violations, 

e.g., the late filing or non-filing of required reports, 

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

procedures provide a number of procedural protections, and the Commission has no authority to impose 

penalties. Instead, the Commission can only seek a 

conciliation agreement, and without a settlement can 

only pursue a de novo civil action in federal court. 

This process can be unnecessarily time and resource 

consuming for all parties involved when applied to 

ministerial-type civil violations that are routinely 

treated via administrative fines by many other states 

and federal regulatory agencies. Nondeliberate and 

straightforward reporting violations would not have to 

be treated as full blown enforcement matters if the 

Commission had authority to assess fines for such 

violations, subject to a reasonable appeal procedure. 

The Commission would consider a number of factors 

(e.g., the election sensitivity of the report and the previous compliance record of the committee). Addition 

of such authority would introduce greater certainty to 

the regulated community about the consequences of 

noncompliance with the Act’s filing requirements, as 

well as lessen costs and lead to efficiencies for all 

parties, while maintaining the Commission’s emphasis 

on the Act’s disclosure requirements. The Commission would attempt to implement this on a trial basis. 

Enhancement of Criminal Provisions 

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

Recommendation: The Commission recommends that 

it have the ability to refer appropriate matters to the 

Justice Department for criminal prosecution at any 

stage of a Commission proceeding. 

Explanation: The Commission has noted an upsurge 

of §441f contribution reimbursement schemes, that 

may merit heavy criminal sanction. Although there is 

4

 This recommendation was also made by 

PricewaterhouseCoopers LLP in itsTechnology and Performance Audit and Management Review of the Federal Election Commission, pages 4-78 and 5-2. 
Legislative Recommendations 47 

no prohibition preventing the Department of Justice 

from initiating criminal FECA prosecutions on its own, 

the vehicle for the Commission to bring such matters 

to the Department’s attention is found at 

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

the Commission has found probable cause to believe 

that a criminal violation of the Act has taken place.5 

Thus, even if it is apparent at an early stage that a 

case merits criminal referral, the Commission must 

pursue the matter to the probable cause stage before 

referring it to the Department for criminal prosecution. 

To conserve the Commission’s resources, and to 

allow the Commission to bring potentially criminal 

FECA violations to the Department’s attention at the 

earliest possible time, the Commission recommends 

that consideration be given to explicitly empower the 

Commission to refer apparent criminal FECA violations to the Department at any stage in the enforcement process. 

Audits for Cause 

Section: 2 U.S.C. §438(b) 

Recommendation: The Commission recommends that 

Congress expand the time frame, from 6 months to 12 

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

Explanation: Under current law, the Commission must 

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

place until almost 2 months after the election, and 

because additional time is needed to computerize 

campaign finance information and review reports, 

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

Modifying Terminology of “Reason to Believe” 

Finding (revised 1999) 

Section: 2 U.S.C. §437g 

Recommendation: The Commission recommends that 

Congress modify the language pertaining to “reason 

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

allow the Commission to open an investigation with a 

sworn complaint, or after obtaining evidence in the 

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

terminology to “reason to open an investigation.” 

Explanation: Under the present statute, the Commission is required to make a finding that there is “reason 

to believe a violation has occurred” before it may investigate. Only then may the Commission request 

specific information from a respondent to determine 

whether, in fact, a violation has occurred. The statutory phrase “reason to believe” is misleading and 

does a disservice to both the Commission and the 

respondent. It implies that the Commission has evaluated the evidence and concluded that the respondent 

has violated the Act. In fact, however, a “reason to 

believe” finding simply means that the Commission 

believes a violation may have occurred if the facts as 

described in the complaint are true. An investigation 

permits the Commission to evaluate the validity of the 

facts as alleged. 

It would therefore be helpful to substitute words that 

sound less accusatory and that more accurately reflect what, in fact, the Commission is doing at this 

early phase of enforcement. 

In order to avoid perpetuating the erroneous conclusion that the Commission believes a respondent has 

violated the law every time it finds “reason to believe,” 

the statute should be amended. 

5 The Commission has the general authority to report 

apparent violations to the appropriate law enforcement 

authority (see 2 U.S.C. §437d(a)(9)), but read together with 

§437g, §437d(a)(9) has been interpreted by the Commission to refer to violations of law unrelated to the 

Commission’s FECA jurisdiction. 
48 Chapter Six 

Public Financing 

Averting Impending Shortfall in Presidential 

Public Funding Program (1999) 

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

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

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

Explanation: The Presidential public funding program 

faces a shortfall for the election of 2000 because participation in the checkoff program is declining and the 

checkoff is not indexed to inflation while payouts are 

indexed. This shortfall will impact foremost upon primary candidates. The Commission projects that, in 

January 2000, the U.S. Treasury will be able to provide approximately 32 percent of the public funds to 

which qualified Presidential candidates will be entitled 

to receive. Specifically, an estimated $20.4 million will 

be available for distribution to qualified primary candidates on January 1, 2000, after the Treasury sets 

aside the convention and general election grants.6 

However, the Commission expects the entitlement as 

of that date to be $62.9 million, which equates to 32 

cents on the dollar. Moreover, the total entitlement for 

primary candidates for the entire election cycle is 

estimated to be $98.7 million. Thus, if FEC staff estimates and presumptions are correct, a significant 

shortfall will exist throughout calendar year 2000 and 

into 2001. Solvency would not be restored until April 

2001 with the deposit of the March 2001 checkoff 

receipts. The Commission recommends that Congress take appropriate action to avoid this impending 

shortfall. 

Qualifying Threshold for Eligibility for Primary 

Matching Funds (revised 1999) 

Section: 26 U.S.C. §9033 

Recommendation: The Commission recommends that 

Congress raise the qualifying threshold for eligibility 

6

 The Commission estimates that a total of $28.9 million 

will be paid in convention grants and $147.2 million will be 

set aside for use by general election candidates. 

for publicly funded Presidential primary candidates 

and make it adjustable for inflation. 

Explanation: The present law sets a very low bar for 

candidates to qualify for federal primary matching 

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

each of at least 20 states from individual donations of 

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

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

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

not be so high as to deprive potentially late blooming 

candidates of public funds, nor so low as to permit 

individuals who are clearly not viable candidates to 

exploit the system. 

Rather than raise the set dollar threshold, which 

would eventually require additional inflationary adjustments, Congress may wish to express the threshold 

as a percentage of the primary spending limit, which 

itself is adjusted for inflation. For example, a percentage of 5% of the 1996 spending limit would have 

computed to a threshold of a little over $1.5 million. In 

addition, the test for broad geographic support might 

be expanded to require support from at least 30 

states, as opposed to 20, which is the current statutory requirement. 

State Expenditure Limits for Publicly Financed 

Presidential Primary Campaigns 

Section: 2 U.S.C. §441a 

Recommendation: The Commission recommends that 

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

Explanation: The Commission has now administered 

the public funding program in five Presidential elections. Based on our experience, we believe that the 

limitations could be removed with no material impact 

on the process. 
Legislative Recommendations 49 

Our experience has shown that, in past years, the 

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

New Hampshire. In most other states, campaigns 

have been unable or have not wished to expend an 

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

administration of the entire program has resulted in 

limiting disbursements in these two primaries alone. 

With an increasing number of primaries vying for a 

campaign’s limited resources, however, it would not 

be possible to spend very large amounts in these 

early primaries and still have adequate funds available for the later primaries. Thus, the overall national 

limit would serve as a constraint on state spending, 

even in the early primaries. At the same time, 

candidates would have broader discretion in the running of their campaigns. 

Our experience has also shown that the limitations 

have been only partially successful in limiting expenditures in the early primary states. The use of the 

fundraising limitation, the compliance cost exemption, 

the volunteer service provisions, the unreimbursed 

personal travel expense provisions, the use of a personal residence in volunteer activity exemption, and a 

complex series of allocation schemes have developed 

into an art which, when skillfully practiced, can partially circumvent the state limitations. 

Finally, the allocation of expenditures to the states 

has proven a significant accounting burden for campaigns and an equally difficult audit and enforcement 

task for the Commission. For all these reasons, the 

Commission decided to revise its state allocation 

regulations for the 1992 Presidential election. Many of 

the requirements, such as those requiring distinctions 

between fundraising and other types of expenditures, 

were eliminated. However, the rules could not undo 

the basic requirement to demonstrate the amount of 

expenditures relating to a particular state. Given our 

experience to date, we believe that this change to the 

Act would still be of substantial benefit to all parties 

concerned. 

Fundraising Limitation for Publicly Financed 

Presidential Primary Campaigns 

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

Recommendation: The Commission recommends that 

the separate fundraising limitation provided to publicly 

financed Presidential primary campaigns be combined 

with the overall limit. Thus, instead of a candidate’s 

having a $10 million (plus COLA 7) limit for campaign 

expenditures and a $2 million (plus COLA) limit for 

fundraising (20 percent of overall limit), each candidate would have one $12 million (plus COLA) limit for 

all campaign expenditures. 

Explanation: Campaigns that have sufficient funds to 

spend up to the overall limit usually allocate some of 

their expenditures to the fundraising category. These 

campaigns come close to spending the maximum 

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

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

do not spend up to the overall expenditure limit, the 

separate fundraising limit is meaningless. Many 

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

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

the state limitations are eliminated or appropriately 

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

recommendation, however, are substantial. They 

include a reduction in accounting burdens and a simplification in reporting requirements for campaigns, 

and a reduction in the Commission’s auditing task. 

For example, the Commission would no longer have 

to ensure compliance with the 28-day rule, i.e., the 

rule prohibiting committees from allocating expenditures as exempt fundraising expenditures within 28 

days of the primary held within the state where the 

expenditure was made. 

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

annually. 
50 Chapter Six 

Eligibility Requirements for Public Financing 

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

Recommendation: The Commission recommends that 

Congress amend the eligibility requirements for publicly funded Presidential candidates to make clear that 

candidates who have been convicted of a willful violation of the laws related to the public funding process 

or who are not eligible to serve as President will not 

be eligible for public funding. 

Explanation: Neither of the Presidential public financing statutes expressly restricts eligibility for funding 

because of a candidate’s prior violations of law, no 

matter how severe. And yet public confidence in the 

integrity of the public financing system would risk 

serious erosion if the U.S. Government were to provide public funds to candidates who had been convicted of felonies related to the public funding process. Congress should therefore amend the eligibility 

requirements to ensure that such candidates do not 

receive public financing for their Presidential campaigns. The amendments should make clear that a 

candidate would be ineligible for public funds if he or 

she had been convicted of fraud with respect to raising funds for a campaign that was publicly financed, 

or if he or she had failed to make repayments in connection with a past publicly funded campaign or had 

willfully disregarded the statute or regulations. See 

LaRouche v. FEC, 992 F.2d 1263 (D.C. Cir. 1993) 

cert. denied, 114 S. Ct. 550 (1993). In addition, Congress should make it clear that eligibility to serve in 

the office sought is a prerequisite for eligibility for 

public funding. 

Applicability of Title VI to Recipients of Payments 

from the Presidential Election Campaign Fund 

Section: 26 U.S.C. §§9006(b), 9008(b)(3) and 9037. 

Recommendation: The Commission recommends that 

Congress clarify that committees receiving public 

financing payments from the Presidential Election 

Campaign Fund are exempt from the requirements of 

Title VI of the Civil Rights Act of 1964, as amended. 

Explanation: This proposed amendment was 

prompted by the decision of the U.S. District Court for 

the District of Columbia in Freedom Republicans, Inc., 

and Lugenia Gordon v. FEC, 788 F. Supp. 600 

(1992), vacated, 13 F.3d 412 (D.C. Cir 1994). The 

Freedom Republicans’ complaint asked the district 

court to declare that the Commission has jurisdiction 

to regulate the national parties’ delegate selection 

process under Title VI. It also requested the court to 

order the Commission to adopt such regulations, direct the Republican Party to spend no more of the 

funds already received for its 1992 national nominating convention, and seek refunds of moneys already 

disbursed if the Republican Party did not amend its 

delegate selection and apportionment process to 

comply with Title VI. The district court found that the 

Commission “does have an obligation to promulgate 

rules and regulations to insure the enforcement of 

Title VI. The language of Title VI is necessarily broad, 

and applies on its face to the FEC as well as to both 

major political parties and other recipients of federal 

funds.” 788 F. Supp. at 601. 

The Commission appealed this ruling on a number of 

procedural and substantive grounds, including that 

Title VI does not apply to the political parties’ apportionment and selection of delegates to their 

conventions. However, the court of appeals overruled 

the district court decision on one of the non-substantive grounds, leaving the door open for other lawsuits 

involving the national nominating conventions or other 

recipients of federal funds certified by the Commission. No. 92-5214, slip op. at 15. 

In the Commission’s opinion, First Amendment concerns and the legislative history of the public funding 

campaign statutes strongly indicate that Congress did 

not intend Title VI to permit the Commission to dictate 

to the political parties how to select candidates or to 

regulate the campaigns of candidates for federal office. Nevertheless, the potential exists for persons 

immediately prior to an election to invoke Title VI in 

the federal courts in a manner that might interfere with 

the parties’ nominating process and the candidates’ 

campaigns. The recommended clarification would 

help forestall such a possibility. 
Legislative Recommendations 51 

For these reasons, Congress should consider adding 

the following language to the end of each public financing provision cited above: “The acceptance of 

such payments will not cause the recipient to be conducting a ‘program or activity receiving federal financial assistance’ as that term is used in Title VI of the 

Civil Rights Act of 1964, as amended.” 

Enforcement of Nonwillful Violations 

Section: 26 U.S.C. §§9012 and 9042 

Recommendation: The Commission recommends that 

Congress consider amending the Presidential Election Campaign Fund Act and the Presidential Primary 

Matching Payment Account Act to clarify that the 

Commission has authority for civil enforcement of 

nonwillful violations (as well as willful violations) of the 

public funding provisions. 

Explanation: Section 9012 of the Presidential Election 

Campaign Fund Act and §9042 of the Presidential 

Primary Matching Payment Account Act provide only 

for “criminal penalties” for knowing and willful violations of the spending and contribution provisions and 

the failure of publicly funded candidates to furnish all 

records requested by the Commission. The lack of a 

specific reference to nonwillful violations of these 

provisions has raised questions regarding the 

Commission’s ability to enforce these provisions 

through the civil enforcement process. 

In some limited areas, the Commission has invoked 

other statutes and other provisions in Title 26 to carry 

out its civil enforcement of the public funding provisions. It has relied, for example, on 2 U.S.C. §441a(b) 

to enforce the Presidential spending limits. Similarly, 

the Commission has used the candidate agreement 

and certification processes provided in 26 U.S.C. 

§§9003 and 9033 to enforce the spending limits, the 

ban on private contributions, and the requirement to 

furnish records. Congress may wish to consider revising the public financing statutes to provide explicit 

authority for civil enforcement of these provisions. 

Part B: Technical 

Recommendations 

Disclosure 

Candidates and Principal Campaign Committees 

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

Recommendation: The Commission recommends that 

Congress revise the law to require a candidate and 

his or her principal campaign committee to register 

simultaneously. 

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

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

designating the principal campaign committee, which 

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

the candidate’s designation to register. This schedule 

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

financial activity that occurred prior to the registration 

is not disclosed until the committee’s next upcoming 

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

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

individual becomes a candidate, the unregistered 

committee would not have to file a report on that date 

and disclosure would be delayed. The next report 

might not be filed for 3 more months. By requiring 

simultaneous registration, the public would be assured of more timely disclosure of the campaign’s 

activity. 

Filing Reports Using Registered or Certified Mail 

(revised 1999) 

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

and(a)(5) 

Recommendation: The Commission recommends 

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

report is postmarked by a specific date. Instead, Con-
52 Chapter Six 

gress should consider simply requiring political committees to file their reports with the Commission (or 

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

report. 

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

provided that the report is postmarked by a certain 

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

postmarked by the due date if sent by registered or 

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

To minimize this delay in disclosure, Congress should 

eliminate the option in the law that allows committees 

to rely on the postmark of a registered or certified 

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

law. This approach would result in more effective 

public disclosure of campaign finance information, 

because reports would be available for review at an 

earlier point before the election. It would also simplify 

the law and eliminate confusion about the appropriate 

due date for a report. 

Monthly Reporting for Congressional Candidates 

Section: 2 U.S.C. §434(a)(2) 

Recommendation: The Commission recommends that 

the principal campaign committee of a Congressional 

candidate have the option of filing monthly reports in 

lieu of quarterly reports. 

Explanation: Political committees, other than principal 

campaign committees, may choose under the Act to 

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

when they have a high volume of activity. Under those 

circumstances, accounting and reporting are easier 

on a monthly basis because fewer transactions have 

taken place during that time. Consequently, the 

committee’s reports will be more accurate. 

Principal campaign committees can also have a large 

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

schedule so that their reporting covers less activity 

and is easier to do. 

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

primary election. In States where a primary is held in 

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

disclosed until after the election. To remedy this, 

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

file quarterly or monthly. However, where the timing 

of a primary will cause an overlap of reporting due 

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

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

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

$1,000 or more during the period immediately before 

the primary, regardless of their reporting schedule. 

Reporting Deadlines for Semiannual, Year-End 

and Monthly Filers 

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

Recommendation: The Commission recommends that 

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

the close of books for the report. 

Explanation: Committees are often confused because 

the filing dates vary from report to report. Depending 

on the type of committee and whether it is an election 

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

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

that monthly, quarterly, semiannual and year-end 

reports are due 15 days after the close of books of 
Legislative Recommendations 53 

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

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

fifteenth of the month would not be unduly burdensome. 

Facsimile Machines (revised 1999) 

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

Recommendation: The Commission recommends that 

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

technologies such as e-mail. 

Explanation: Independent expenditures that are made 

between 20 days and 24 hours before an election 

must be reported within 24 hours. The Act requires 

that a last-minute independent expenditure report 

must include a certification, under penalty of perjury, 

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

or suggestion of, any candidate or any authorized 

committee or agent of such committee.” This requirement appears to foreclose the option of using a facsimile machine or other electronic technology to file 

the report. The next report the committee files, however, which covers the reporting period when the expenditure was made, must also include the certification, stating the same information. Given the time 

constraint for filing the report, the requirement to include the certification on the subsequent report, and 

the availability of modern technology that would facilitate such a filing, Congress should consider allowing 

such filings via telephonically transmitted facsimiles 

(“fax” machines) or by other technologies such as email. This could be accomplished by allowing the 

committee to fax or e-mail a copy of the schedule 

disclosing the independent expenditure and the certification. The original schedule would be filed with the 

next report. Acceptance of such a filing method would 

facilitate timely disclosure and simplify the process for 

the filer. 

Reporting of Last-Minute Independent 

Expenditures 

Section: 2 U.S.C. §434(c) 

Recommendation: The Commission recommends that 

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

Explanation: The statute requires that independent 

expenditures aggregating $1,000 or more and made 

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

election be reported within 24 hours after they are 

made. This provision is in contrast to other reporting 

provisions of the statute, which use the words “shall 

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

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

mail and postmarked within 24 hours of when the 

expenditure is made? Should Congress decide that 

committees must report the expenditure within 24 

hours after it is made, committees should be able to 

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

Require Monthly Filing for Certain Multicandidate 

Committees 

Section: 2 U.S.C. §434(a)(4) 

Recommendation: The Commission recommends that 

multicandidate committees which have raised or 

spent, or which anticipate raising or spending, over 

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

an election year. 

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

during an election year. Quarterly filers that make 

contributions or expenditures on behalf of primary or 

general election candidates must also file pre-election 

reports. 

Presidential candidates who anticipate receiving contributions or making expenditures aggregating 

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

requirement to multicandidate committees which have 

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

The requirement would simplify the filing schedule, 

eliminating the need to calculate the primary filing 

periods and dates. Filing would be standardized— 

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

more influential committees’ reports. Although the 

total number of reports filed would increase, most 

reports would be smaller, making it easier for the 

Commission to enter the data into the computer and 

to make the disclosure more timely. 

Point of Entry for Pseudonym Lists 

Section: 2 U.S.C. §438(a)(4) 

Recommendation: The Commission recommends that 

Congress make a technical amendment to section 

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

House. 

Explanation: Section 438(a)(4) outlines the processing 

of disclosure documents filed under the Act. The section permits political committees to “salt” their disclosure reports with 10 pseudonyms in order to detect 

misuse of the committee’s FEC reports and protect 

individual contributors who are listed on the report 

from unwanted solicitations. The Act requires committees who “salt” their reports to file the list of pseudonyms with the appropriate filing office. 

Public Law No. 104-79 (December 28, 1995) changed 

the point of entry for House candidate reports from 

the Clerk of the House to the FEC, effective December 31, 1995. As a result, House candidates must 

now file pseudonym lists with the FEC, rather than the 

Clerk of the House. To establish consistency within 

the Act, the Commission recommends that Congress 

amend section 438(a)(4) to delete the reference to the 

Clerk of the House as a point of entry for the filing of 

pseudonym lists. 

Contributions and Expenditures 

Certification of Voting Age Population Figures and 

Cost-of-Living Adjustment 

Section: 2 U.S.C. §441a(c) and (e) 

Recommendation: The Commission recommends that 

Congress consider removing the requirement that the 

Secretary of Commerce certify to the Commission the 

voting age population of each Congressional district. 

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

the remaining information concerning the voting age 

population for the nation as a whole and for each 

state. In addition, the same deadline should apply to 

the Secretary of Labor, who is required under the Act 

to provide the Commission with figures on the annual 

adjustment to the cost-of-living index. 

Explanation: In order for the Commission to compute 

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

the Secretary of Commerce certifies the voting age 

population of the United States and of each state. 2 

U.S.C. §441a(e). The certification for each Congressional district, also required under this provision, is 

not needed. 

In addition, under 2 U.S.C. §441a(c), the Secretary of 

Labor is required to certify the annual adjustment in 

the cost-of-living index. In both instances, the timely 

receipt of these figures would enable the Commission 

to inform political committees of their spending limits 

early in the campaign cycle. Under present circumstances, where no deadline exists, the Commission 

has sometimes been unable to release the spending 

limit figures before June. 

Honorarium 

Section: 2 U.S.C. §431(8)(B)(xiv) 

Recommendation: The Commission recommends that 

Congress should make a technical amendment, deleting 2 U.S.C. §431(8)(B)(xiv), now contained in a list of 

definitions of what is not a contribution. 
Legislative Recommendations 55 

Explanation: The 1976 amendments to the Federal 

Election Campaign Act gave the Commission jurisdiction over the acceptance of honoraria by all federal 

officeholders and employees. 2 U.S.C. §441i. In 1991, 

the Legislative Branch Appropriations Act repealed 

§441i. As a result, the Commission has no jurisdiction 

over honorarium transactions taking place after August 14, 1991, the effective date of the law. 

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

change to §431(8)(B)(xiv) deleting the reference to 

honorarium as defined in former §441i. This would 

delete honorarium from the list of definitions of what is 

not a contribution. 

Acceptance of Cash Contributions 

Section: 2 U.S.C. §441g 

Recommendation: The Commission recommends that 

Congress modify the statute to make the treatment of 

2 U.S.C. §441g, concerning cash contributions, consistent with other provisions of the Act. As currently 

drafted, 2 U.S.C. §441g prohibits only the making of 

cash contributions which, in the aggregate, exceed 

$100 per candidate, per election. It does not address 

the issue of accepting cash contributions. Moreover, 

the current statutory language does not plainly prohibit cash contributions in excess of $100 to political 

committees other than authorized committees of a 

candidate. 

Explanation: Currently this provision focuses only on 

persons making the cash contributions. However, 

these cases generally come to light when a 

committee has accepted these funds. Yet the Commission has no recourse with respect to the committee in such cases. This can be a problem, particularly 

where primary matching funds are received on the 

basis of such contributions. 

While the Commission, in its regulations at 11 CFR 

110.4(c)(2), has included a provision requiring a committee receiving such a cash contribution to promptly 

return the excess over $100, the statute does not 

explicitly make acceptance of these cash contributions a violation. The other sections of the Act dealing 

with prohibited contributions (i.e., §§ 441b on corporate and labor union contributions, 441c on contributions by government contractors, 441e on contributions by foreign nationals, and 441f on contributions in 

the name of another) all prohibit both the making and 

accepting of such contributions. 

Secondly, the statutory text seems to suggest that the 

prohibition contained in §441g applies only to those 

contributions given to candidate committees. This 

language is at apparent odds with the Commission’s 

understanding of the Congressional purpose to prohibit any cash contributions which exceed $100 in 

federal elections. 

Enforcement 

Subpoena and Reason-to-Believe Notification 

Signature Authority 

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

Recommendation: The Commission recommends 

that Congress clarify these provisions to permit any 

member of the Commission to sign duly-authorized 

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

Chairman and Vice Chairman. 

Explanation: Section 437d(a)(3) grants the Commission the power to issue subpoenas requiring the attendance and testimony of witnesses and the production of documentary evidence. This provision specifies that subpoenas be signed by the Chairman or 

Vice Chairman of the agency. In those instances 

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

Vice Chairman are available to sign, the subpoena is 

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

issued in a more timely manner. 

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

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

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

Public Financing 

Deposit of Repayments 

Section: 26 U.S.C. §9007(d) 

Recommendation: The Commission recommends that 

Congress revise the law to state that: All payments 

received by the Secretary of the Treasury under subsection (b) shall be deposited by him or her in the 

Presidential Election Campaign Fund established by 

§9006(a). 

Explanation: This change would allow the Fund to 

recapture monies repaid by convention-related committees of national major and minor parties, as well as 

by general election grant recipients. Currently the 

Fund recaptures only repayments made by primary 

matching fund recipients. 

Contributions to Presidential Nominees Who 

Receive Public Funds in the General Election 

Section: 26 U.S.C. §9003 

Recommendation: The Commission recommends that 

Congress clarify that the public financing statutes 

prohibit the making and acceptance of contributions 

(either direct or in-kind) to Presidential candidates 

who receive full public funding in the general election. 

Explanation: The Presidential Election Campaign 

Fund Act prohibits a publicly financed general election 

candidate from accepting private contributions to defray qualified campaign expenses. 26 U.S.C. 

§9003(b)(2). The Act does not, however, contain a 

parallel prohibition against the making of these contributions. Congress should consider adding a section 

to 2 U.S.C. §441a to clarify that individuals and committees are prohibited from making these contributions. 

Miscellaneous 

Ex Officio Members of Federal Election 

Commission 

Section: 2 U.S.C. §437c(a)(1) 

Recommendation: The Commission recommends that 

Congress amend section 437c by removing the Secretary of the Senate, the Clerk of the House, and their 

designees from the list of the members of the Federal 

Election Commission. 

Explanation: In 1993, the U.S. Court of Appeals for 

the District of Columbia ruled that the ex officio membership of the Secretary of the Senate and the Clerk 

of the House on the Federal Election Commission 

was unconstitutional. (FEC v. NRA Political Victory 

Fund, 6 F.3d 821 (D.C. Cir. 1993), cert. dismissed for 

want of jurisdiction, 115 S. Ct. 537 (12/6/94).) This 

decision was left in place when the Supreme Court 

dismissed the FEC’s appeal on the grounds that the 

FEC lacks standing to independently bring a case 

under Title 2. 

As a result of the appeals court decision, the FEC 

reconstituted itself as a six-member body whose 

members are appointed by the President and confirmed by the Senate. Congress should accordingly 

amend the Act to reflect the appeals court’s decision 

by removing the references to the ex officio members 

from section 437c. 
57 

Chapter Seven 

Campaign Finance 

Statistics 

CHART 7-1 

Number of PACs, 1974-1998 

2000 

1500 

1000 

500 

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

Year 

Corporate 

Nonconnected 

Trade/Membership/Health 

Labor 

Other 

Campaign Finance Statistics
CHART 7-2 

House Candidates’ 

Sources of Receipts: 

Two-Year Election Cycle 

Individuals 

PACs 

Candidate 

Other Receipts 

Open Seat Candidates 

Millions of Dollars 

300 

250 

200 

150 

100 

50 

0 1992 1994 1996 1998 

Incumbents 

Millions of Dollars 

300 

240 

180 

120 

60 

0 1992 1994 1996 1998 

58 Chapter Seven 

Challengers 

Millions of Dollars 

300 

250 

200 

150 

100 

50 

0 1992 1994 1996 1998 
CHART 7-3 

Senate Candidates’ 

Sources of Receipts: 

Two-Year Election Cycle 

Individuals 

PACs 

Candidate 

Other Receipts 

Challengers 

Millions of Dollars 

150 

90 

120 

60 

30 

0 1992 1994 1996 1998 

Open Seat Candidates 

Millions of Dollars 

150

120 

90 

60 

30 

0 1992 1994 1996 1998 

Campaign Finance Statistics 59 

Incumbents 

Millions of Dollars

150 

120 

90

60 

30 

0 1992 1994 1996 1998 
Receipts 

Disbursements 

60 Chapter Seven 

CHART 7-4 

House and Senate Activity 

by Election Cycle 

Millions of Dollars 

0 

100 

200 

300 

400 

500 

600 

700 

800 

1988 1990 1992 1994 1996 1998 
Campaign Finance Statistics 61 

CHART 7-5 

PAC Contributions to Candidates 

by Party and Type of PAC 

Democratic Candidates 

Republican Candidates 

1996 Election Cycle 

Millions of Dollars 

100 

80 

60 

40 

20 

0 

Corp. Labor Trade/ Non- Other 

PACs PACs Member/ Connected PACs 

Health PACs 

PACs 

1998 Election Cycle 

Millions of Dollars 

100 

80 

60 

40 

20 

0 

Corp. Labor Trade/ Non- Other 

PACs PACs Member/ Connected PACs 

Health PACs 

PACs 
CHART 7-6 

PAC Contributions to House and Senate Candidates 

by Party and Candidate Status 

1994 

1996 

1998 

Millions of Dollars 

200 

150 

100 

50 

0 Incumbents Nonincumbents 

Millions of Dollars 

120 

100 

80 

60 

40 

20 

0 Republicans Democrats 

62 Chapter Seven 
Campaign Finance Statistics 63 

CHART 7-7 

PAC Contributions to House Candidates 

by Type of PAC and Candidate Status 

1994 

1996 

1998 

Percent 

100 

80 

60 

40 

20 

0 Corp. Labor Noncon. Trade 

Incumbents 

Percent 

100 

80 

60 

40 

20 

0 Corp. Labor Noncon. Labor 

Challengers 
National Committee 

National Senatorial Committee 

National Congressional Committee 

State/Local Committees 

64 Chapter Seven 

CHART 7-8 

Major Party Federal 

Account Receipts: 1998 

Millions of Dollars 

120 

100 

80 

60 

40 

20 

0 

Democrats Republicans 
CHART 7-9 

Party Federal and 

Nonfederal Receipts 

Federal Receipts 

Nonfederal Receipts 

Campaign Finance Statistics 65 

Democratic National Committee (DNC) 

1993-94 1995-96 1997-98 

$83.86 million $210.3 million $122.6 million 

Republican National Committee (RNC) 

1993-94 1995-96 1997-98 

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

Sources of Party Receipts 

1996 

1998 

66 Chapter Seven 

DNC Federal Receipts by Source 

Millions of Dollars 

0 40 80 120 

Individuals 

$200 or less 

Individuals 

over $200 

PACs 

Other 

RNC Federal Receipts by Source 

Millions of Dollars 

0 40 80

Individuals 

$200 or less 

Individuals 

over $200 

PACs 

Other 

120 

DNC Nonfederal Receipts by Source 

Millions of Dollars 

0 20 40

Corporate 

Labor 

PAC 

Individual 

Within 

Party 

Other 

60

RNC Nonfederal Receipts by Source 

Millions of Dollars 

0 20 40

Corporate 

Labor 

PAC 

Individual 

Within 

Party 

Other 

60 
CHART 7-11 

Projected Shortfall in the 

Presidental Election Campaign Fund* 

Estimated Cumulative Payments 

Estimated Cumulative Entitlements 

Estimated Shortfall 

Campaign Finance Statistics 67 

Millions of Dollars 

120 

100 

80 

60 

40 

20 

0 

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

2000 2001 

* The estimated entitlement reflects the amount of public funds the Commission expects qualified candidates to be eligible 

to receive. The estimated payment is the amount of public funds projected to be available to fulfill those entitlements. 
Appendices 69 

Appendix 1 

Biographies of 

Commissioners 

and Officers 

Commissioners 

Joan D. Aikens, Chairman 

April 30, 19951 

Commissioner Aikens served as Chairman during 

the first eight months of 1998, before retiring on September 18. One of the original members of the Commission, Commissioner Aikens was first appointed in 

1975. Following the reconstitution of the FEC that 

resulted from the Supreme Court’s Buckley v. Valeo 

decision, President Ford reappointed her to a fiveyear term. In 1981, President Reagan named Commissioner Aikens to complete a term left open because of a resignation and, in 1983, once again reappointed her to a full six-year term. Most recently, 

Commissioner Aikens was reappointed by President 

Bush in 1989. She previously served as FEC Chairman in 1978, 1986 and 1992. 

Before her 1975 appointment, Commissioner 

Aikens was an executive with Lew Hodges Communications, a public relations firm in Valley Forge, Pennsylvania. She was also a member of the Pennsylvania 

Republican State Committee, president of the Pennsylvania Council of Republican Women and on the 

board of directors of the National Federation of Republican Women. A native of Delaware County, Pennsylvania, Commissioner Aikens has been active in a 

variety of volunteer organizations and was a member 

of the Commonwealth Board of the Medical College of 

Pennsylvania and a past President of Executive 

Women in Government. She is currently a member of 

the board of directors of Ursinus College, where she 

received her B.A. degree and an honorary Doctor of 

Law degree. 

Scott E. Thomas, Vice Chairman 

April 30, 2003 

Mr. Thomas was appointed to the Commission in 

1986 and reappointed in 1991 and 1998. He served 

as acting Chairman during the last four months of 

1998, and was elected Chairman for 1999. He previously served as Chairman in 1987 and 1993. Prior to 

serving as a Commissioner, Mr. Thomas was the 

executive assistant to former Commissioner Thomas 

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

Counsel for Enforcement. 

A Wyoming native, Mr. Thomas graduated from 

Stanford University and holds a J.D. degree from 

Georgetown University Law Center. He is a member 

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

bars. 

Lee Ann Elliott, Commissioner 

April 30, 1999 

Commissioner Elliott was first appointed in 1981 

and reappointed in 1987 and 1994. She served as 

Chairman in 1984, 1990 and 1996. Before her first 

appointment, Commissioner Elliott was vice president 

of a political consulting firm, Bishop, Bryant & Associates, Inc. From 1961 to 1979, she was an executive 

of the American Medical Political Action Committee. 

Commissioner Elliott was on the board of directors of 

the American Association of Political Consultants and 

on the board of the Chicago Area Public Affairs 

Group, of which she is a past president. She was also 

a member of the Public Affairs Committee of the U.S. 

Chamber of Commerce. In 1979, she received the 

Award for Excellence in Serving Corporate Public 

Affairs from the National Association of Manufacturers. A native of St. Louis, Commissioner Elliott graduated from the University of Illinois. She also completed Northwestern University’s Medical Association 

Management Executive Program and is a Certified 

Association Executive. 

David M. Mason, Commissioner 

April 30, 2003 

David M. Mason was nominated to the Commission 

by President Clinton on March 4, 1998, and confirmed 

by the U.S. Senate on July 30, 1998. 

Prior to his appointment, Mr. Mason served as 

Senior Fellow, Congressional Studies, at the Heritage 

Foundation. He joined Heritage in 1990 as Director of 

1 Term expiration date. 
70 Appendices 

Executive Branch Liaison. In 1995 he became Vice 

President, Government Relations, and in 1997 Mr. 

Mason was designated Senior Fellow with a focus on 

research, writing and commentary on Congress and 

national politics. 

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

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

numerous Congressional, Senate, Gubernatorial and 

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

the 48th District in 1982. 

Commissioner Mason attended Lynchburg College 

in Virginia and graduated cum laude from Claremont 

McKenna College in California. He is active in political 

and community affairs at both the local and national 

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

with their six children. 

Danny L. McDonald, Commissioner 

April 30, 1999 

Now serving his fourth term as Commissioner, Mr. 

McDonald was first appointed to the Commission in 

1981 and was reappointed in 1987 and 1994. Before 

his original appointment, he managed 10 regulatory 

divisions as the general administrator of the Oklahoma Corporation Commission. He had previously 

served as secretary of the Tulsa County Election 

Board and as chief clerk of the board. He was also a 

member of the Advisory Panel to the FEC’s National 

Clearinghouse on Election Administration. 

A native of Sand Springs, Oklahoma, Mr. 

McDonald graduated from Oklahoma State University 

and attended the John F. Kennedy School of Government at Harvard University. He served as FEC Chairman in 1983, 1989 and 1995. 

John Warren McGarry, Commissioner 

April 30, 1995 

Mr. McGarry retired from the Commission on August 11, 1998. First appointed to the Commission in 

1978, Mr. McGarry was reappointed in 1983 and 

1989. He served as FEC Chairman in 1981, 1985, 

1991 and 1997. Before his 1978 Commission appointment, Commissioner McGarry served as special 

counsel on elections to the House Administration 

Committee. He previously combined private law practice with service as chief counsel to the House Special Committee to Investigate Campaign Expenditures, a special committee established by Congress 

every election year through 1972. Before his work 

with Congress, Commissioner McGarry was the Massachusetts assistant attorney general. 

After graduating cum laude from Holy Cross College, Commissioner McGarry did graduate work at 

Boston University and earned a J.D. degree from 

Georgetown University Law School. 

Karl J. Sandstrom, Commissioner 

April 30, 2001 

Karl J. Sandstrom was nominated to the Commission by President Clinton on July 13, 1998, and confirmed by the U.S. Senate on July 30, 1998. 

Prior to his appointment, Commissioner Sandstrom 

served as Chairman of the Administrative Review 

Board at the Department of Labor. From 1988 to 1992 

he was Staff Director of the House Subcommittee on 

Elections, during which time he also served as the 

Staff Director of the Speaker of the House’s Task 

Force on Electoral Reform. From 1979 to 1988, Commissioner Sandstrom served as the Deputy Chief 

Counsel to the House Administration Committee of 

the House of Representatives. In addition, he has 

taught public policy as an Adjunct Professor at American University. 

Commissioner Sandstrom received a B.A. degree 

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

George Washington University and a Masters of the 

Law of Taxation from Georgetown University Law 

Center. 

Darryl R. Wold, Commissioner 

April 30, 2001 

Darryl R. Wold was nominated to the Commission 

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

Prior to his appointment, Commissioner Wold had 

been in private law practice in Orange County, CA, 
Appendices 71 

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

counsel for election law litigation and enforcement 

defense matters to Reed and Davidson, a California 

law firm. Mr. Wold’s practice included representing 

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

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

business practice emphasized business litigation and 

advice to closely-held companies. 

Commissioner Wold graduated cum laude from 

Claremont McKenna College in California and earned 

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

the California bar, and is admitted to practice before 

the United States Supreme Court. 

Statutory Officers 

John C. Surina, Staff Director 

John Surina resigned his post as FEC staff director 

on July 31, 1998, to become Director of the U.S. Department of Agriculture’s Office of Ethics. 

Before joining the Commission in 1983, Mr. Surina 

was assistant managing director of the Interstate 

Commerce Commission, where he was detailed to the

“Reform 88” program at the Office of Management 

and Budget. He was also an expert-consultant to the 

Office of Control and Operations, EOP-Cost of Living 

Council-Pay Board, and he served on the technical 

staff of the Computer Sciences Corporation. During 

his Army service, Mr. Surina was executive officer of 

the Special Security Office, where he supported senior U.S. delegates to NATO’s civil headquarters in 

Brussels. Mr. Surina served as 1991 chairman of the 

Council on Government and Ethics Laws (COGEL). 

A native of Alexandria, Virginia, Mr. Surina holds a 

degree in Foreign Service from Georgetown University. He also attended East Carolina University and 

American University. 

Lawrence M. Noble, General Counsel 

Lawrence Noble became General Counsel in 1987, 

after serving as Acting General Counsel. He joined 

the Commission in 1977, becoming the Deputy General Counsel in 1983. He previously served as Assistant General Counsel for Litigation and as a litigation 

attorney. Before his FEC service, he was an attorney 

with the Aviation Consumers Action Project. 

A native of New York, Mr. Noble holds a degree in 

political science from Syracuse University and a J.D. 

degree from the National Law Center at George 

Washington University. He is a member of the bars for 

the U.S. Supreme Court, the U.S. Court of Appeals 

for the D.C. Circuit and the District of Columbia. He is 

also a member of the American and District of Columbia Bar Associations. 

Lynne McFarland, Inspector General 

Lynne McFarland became the FEC’s first permanent Inspector General in February 1990. She came 

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

Later, she worked as a program analyst in the Office 

of Planning and Management. 

A Maryland native, Ms. McFarland holds a sociology degree from Frostburg State College and is a 

member of the Institute of Internal Auditors. 
Appendices 73 

Appendix 2 

Chronology of Events 

January 

1 — Chairman Joan D. Aikens and Vice Chairman Scott E. Thomas begin their one-year 

terms of office. 

15 — FEC releases audit report on Alan Keyes for 

President committees. 

22 — Commission denies rulemaking petition on 

its composition. 

27 — FEC releases 1997 year-end PAC count. 

31 — 1997 year-end report due. 

February 

3 — New York holds special general election in 

6th Congressional District. 

11 — Commission holds public hearing on proposed changes to recordkeeping and reporting rules. 

12 — Commission denies rulemaking petition on 

express advocacy. 

19 — FEC releases audit report on Democratic 

Party of Illinois. 

23 — FEC holds candidate conference in Washington, DC. 

27 — FEC releases audit report on Bob Barr-Congress. 

— District court dismisses Reform Party’s constitutional challenge to public funding rules. 

(National Committee of the Reform Party v. 

FEC) 

March 

1 — Enhanced version of FECFile electronic 

filing software becomes available. 

6 — FEC releases statistics on Congressional 

candidate activity during 1997. 

12 — FEC submits 60 legislative recommendations to President and Congress. 

19 — Vice Chairman Scott E. Thomas testifies 

before House Appropriations Subcommittee 

on FY 1999 budget request. 

25-27— FEC holds regional conference in Denver, 

CO. 

April 

1 — FEC publishes Innovations in Election Administration 16: Using the Internet in Election Offices. 

7 — California holds special general elections in 

9th and 44th Congressional Districts. 

15 — First quarter report due. 

— FEC publishes Combined Federal/State 

Disclosure and Election Directory 1998. 

27 — FEC holds nonconnected conference in 

Washington, DC. 

28 — Commission adds images of reports from 

1995-96 election cycle to web site. 

29 — Commission holds public hearing on proposed rules defining member. 

30 — District court invalidates FEC rule on voter 

guides. (Clifton v. FEC) 

May 

8 — FEC releases 15-month Congressional election figures. 

21 — Commission denies rulemaking petition on 

expenditures by qualified nonprofits. 

29 — FEC releases audit report on Lugar for 

President committees. 

June 

1 — FEC submits to President and Congress 

23rd annual report. 

— Supreme Court finds plaintiffs have standing 

to challenge FEC’s dismissal of complaint 

and refers questions on membership status 

back to Commission. (Akins v. FEC ) 

— District court finds portion of FEC’s express 

advocacy definition unconstitutional and 

enjoins Commission from enforcing it. (Right 

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

8 — FEC releases 15-month statistics on political 

party activity. 

18 — FEC releases audit report on Darrell Ealum 

for Congress. 

23 — New Mexico hold special general election in 

1st Congressional District. 
74 Appendices 

25 — District court denies preliminary injunction 

to prevent FEC enforcement of allocation 

rules. (Ohio Democratic Party v. FEC and 

RNC v. FEC) 

July 

1 — FEC publishes “Filing a Complaint” brochure. 

6 — FEC releases audit report on 1996 Committee on Arrangements for the Republican 

National Convention. 

15 — Second quarter report due. 

— FEC releases audit report on 1996 Democratic National Convention Committee and 

Chicago’s Committee ‘96. 

21 — Commission adds search function to report 

image database on web site. 

— FEC releases 1998 mid-year PAC count. 

30 — Senate confirms nominations of David M. 

Mason, Karl J. Sandstrom and Darryl R. 

Wold to Commission, and the renomination 

of Commissioner Scott E. Thomas. 

31 — FEC Staff Director John Surina resigns to 

become Director of the U.S. Department of 

Agriculture’s Office of Ethics. 

— FEC releases audit report on San Diego 

Host Committee/Sail to Victory ‘96. 

August 

1 — James A. Pehrkon appointed Acting Staff 

Director of FEC. 

11 — Commissioner John Warren McGarry retires. 

14 — FEC releases 18-month report on Congressional candidate activity. 

September 

18 — Chairman Joan D. Aikens retires. 

24 — FEC releases 18-month PAC statistics. 

October 

1 — FEC publishes 1998 edition of PACronyms. 

15 — Third quarter report due. 

19 — Commission begins adding reports on lastminute campaign activity to web site. 

20 — FEC publishes 1998 edition of Selected 

Court Case Abstracts. 

22 — Pre-general election report due. 

27 — FEC releases pre-general election statistics 

on political party activity. 

29 — FEC releases statistics on 1998 House and 

Senate campaign spending. 

November 

13 — New regulations mandating electronic filing 

by Presidential campaigns take effect. 

18 — Commission holds public hearing on proposed soft money regulations. 

December 

3 — Post-general election report due. 

10 — FEC elects Scott E. Thomas and Darryl R. 

Wold as 1999 Chairman and Vice Chairman. 
Appendices 75 Appendix 3 

FEC Organization Chart 

General Counsel 

Public Financing, 

Ethics and 

Special Projects 

Deputy Staff Director 

for Management 

Data Systems 

Development 

Planning and 

Management 

Administration 

Equal Employment 

Opportunity 

Commission 

Secretary 

Public 

Disclosure 

Office of Election 

Administration 

Audit 

Staff Director Inspector General

Information 

Congressional 

Affairs 

Personnel 

Labor/Management 

Press Office 

Policy 4 

Reports 

Analysis 

Litigation 

Enforcement 

The Commissioners1 

Joan D. Aikens, Chairman2 

Scott E. Thomas, Vice Chairman3 

Lee Ann Elliott, Commissioner 

David M. Mason, Commissioner 

Danny L. McDonald, Commissioner 

John Warren McGarry, Commissioner 

Karl J. Sandstrom, Commissioner 

Darryl R. Wold, Commissioner 

1

 Commissioners Aikens and McGarry retired in 1998. 

2 Scott E. Thomas was elected 1999 Chairman. 

3 Darryl R. Wold was elected 1999 Vice Chairman. 

4 Policy covers regulations, advisory opinions, legal review and administrative law. 
Appendices 77 

Appendix 4 

FEC Offices 

This appendix briefly describes the offices within 

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

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

and locally on 202-694-1100. 

Administration 

The Administration Division is the Commission’s 

“housekeeping” unit and is responsible for accounting, 

procurement and contracting, space management, 

payroll, travel and supplies. In addition, several support functions are centralized in the office such as 

printing, document reproduction and mail services. 

The division also handles records management, telecommunications, inventory control and building security and maintenance. 

Audit 

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

division evaluates the matching fund submissions of 

Presidential primary candidates and determines the 

amount of contributions that may be matched with 

federal funds. As required by law, the division audits 

all public funding recipients. 

In addition, the division audits those committees 

which, according to FEC determinations, have not 

met the threshold requirements for substantial compliance with the law. Audit Division resources are also 

used in the Commission’s investigations of complaints. 

Commission Secretary 

The Secretary to the Commission handles all administrative matters relating to Commission meetings, 

including agenda documents, Sunshine Act notices, 

minutes and certification of Commission votes. The 

office also circulates and tracks numerous materials 

not related to meetings, and records the Commissioners’ tally votes on these matters. 

Commissioners 

The six Commissioners—no more than three of 

whom may represent the same political party—are 

appointed by the President and confirmed by the Senate. 

The Commissioners serve full time and are responsible for administering and enforcing the Federal Election Campaign Act. They generally meet twice a 

week, once in closed session to discuss matters that, 

by law, must remain confidential, and once in a meeting open to the public. At these meetings, they formulate policy and vote on significant legal and administrative matters. 

Congressional, Legislative and 

Intergovernmental Affairs 

This office serves as primary liaison with Congress 

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

about Commission decisions and, in turn, for keeping 

the agency up to date on legislative developments. 

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

Data Systems Development 

This division provides computer support for the 

entire Commission. Its responsibilities are divided into 

two general areas. 

In the area of campaign finance disclosure, the 

Data Systems Development Division enters information into the FEC database from all reports filed by 

political committees and other entities. The division is 

also responsible for the computer programs that sort 

and organize campaign finance data into indexes 

These indexes permit a detailed analysis of campaign finance activity and, additionally, provide a tool 

for monitoring contribution limits. The indexes are 

available online through the Data Access Program 

(DAP), a subscriber service managed by the division. 

The division also publishes the Reports on Financial 

Activity series of periodic studies on campaign finance 

and generates statistics for other publications. 
78 Appendices 

Among its duties related to internal operations, the 

division provides computer support for the agency’s 

automation systems and for administrative functions 

such as management information, document tracking, 

personnel and payroll systems as well as the MUR 

prioritization system. 

Local phone: 202-694-1250; toll-free phone: 800-

424-9530. 

Equal Employment Opportunity 

(EEO) and Special Programs 

The EEO Office advises the Commission on the 

prevention of discriminatory practices and manages 

the agency’s EEO Program. 

The office is also responsible for: developing a 

Special Emphasis Program tailored to the training and 

advancement needs of women, minorities, veterans, 

special populations and disabled employees; and 

recommending affirmative action recruitment, hiring, 

and career advancement. The office encourages the 

informal resolution of complaints during the counseling stage. 

Additionally, the office develops and manages a 

variety of agency-wide special projects. These include 

the Combined Federal Campaign, the U.S. Savings 

Bonds Drive and workshops intended to improve employees’ personal and professional lives. 

General Counsel 

The General Counsel directs the agency’s enforcement activities, represents and advises the Commission in any legal actions brought before it and serves 

as the Designated Agency Ethics Official. The Office 

of General Counsel handles all civil litigation, including Title 26 cases that come before the Supreme 

Court. The office also drafts, for Commission consideration, advisory opinions and regulations as well as 

other legal memoranda interpreting the federal campaign finance law. 

Information 

In an effort to promote voluntary compliance with 

the law, the Information Division provides technical 

assistance to candidates, committees and others 

involved in elections through the world wide web, 

letters, phone conversations, publications and conferences. Responding to phone and written inquiries, 

members of the staff provide information on the statute, FEC regulations, advisory opinions and court 

cases. Staff also lead workshops on the law and produce guides, pamphlets and videos on how to comply 

with the law. Located on the second floor, the division 

is open to the public. Local phone: 202-694-1100; tollfree phone: 800-424-9530 (press 1 on a touch-tone 

phone). 

Inspector General 

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

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

agency and to improve the economy and effectiveness of agency operations. The IG files reports notifying Congress of any serious problems or deficiencies 

in agency operations and of any corrective steps 

taken by the agency. 

Law Library 

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

open to the public. The federal law collection includes 

materials on campaign finance reform, election law 

and current political activity. Visitors to the law library 

may use its computers to access the Internet and 

FEC databases. FEC advisory opinions and computer 

indices of enforcement proceedings (MURs) may be 

searched in the law library or the Public Disclosure 

Division. Local phone: 202-694-1600; toll-free: 800-

424-9530. 
Appendices 79 

Office of Election Administration 

The Office of Election Administration (OEA), located on the second floor, assists state and local 

election officials by responding to inquiries, publishing 

research and conducting workshops on all matters 

related to election administration. Additionally, the 

OEA answers questions from the public and briefs 

foreign delegations on the U.S. election process, including voter registration and voting statistics. 

Local phone: 202-694-1095; toll-free phone: 800-

424-9530 (press 4 on a touch-tone phone). 

Personnel and Labor/Management 

Relations 

This office provides policy guidance and operational support to managers and staff in a variety of 

human resource management areas. These include 

position classification, training, job advertising, recruitment and employment. The office also processes 

personnel actions such as step increases, promotions, leave administration, awards and discipline, 

performs personnel records maintenance and offers 

employee assistance program counseling. Additionally, Personnel administers the Commission’s labormanagement relations program and a comprehensive 

package of employee benefits, wellness and familyfriendly programs. 

Planning and Management 

This office develops the Commission’s budget and, 

each fiscal year, prepares a management plan determining the allocation and use of resources throughout 

the agency. Planning and Management monitors adherence to the plan, providing monthly reports measuring the progress of each division in achieving the 

plan’s objectives. 

Press Office 

Staff of the Press Office are the Commission’s 

official media spokespersons. In addition to publicizing Commission actions and releasing statistics on 

campaign finance, they respond to all questions from 

representatives of the print and broadcast media. 

Located on the first floor, the office also handles requests under the Freedom of Information Act. Local 

phone: 202-694-1220; toll-free 800-424-9530. 

Public Disclosure 

The Public Disclosure Division processes incoming 

campaign finance reports from political committees 

and candidates involved in federal elections and 

makes the reports available to the public. Located on 

the first floor, the division’s Public Records Office has 

a library with ample work space and knowledgeable 

staff to help researchers locate documents and computer data. The FEC encourages the public to review 

the many resources available, which also include 

computer indexes, advisory opinions and closed 

MURs. 

The division’s Processing Office receives incoming 

reports and processes them into formats which can 

be easily retrieved. These formats include paper, 

microfilm and digital computer images that can be 

easily accessed from terminals in the Public Records 

Office and those of agency staff. 

The Public Disclosure Division also manages 

Faxline, an automated faxing service for ordering FEC 

documents, forms and publications, available 24 

hours a day, 7 days a week. 

Local phone: 202-694-1120; toll-free phone: 800-

424-9530 (press 3 on a touch-tone phone); Faxline: 

202-501-3413. 

Reports Analysis 

Reports analysts assist committee officials in complying with reporting requirements and conduct detailed examinations of the campaign finance reports 

filed by political committees. If an error, omission or 

prohibited activity (e.g., an excessive contribution) is 

discovered in the course of reviewing a report, the 

analyst sends the committee a letter which requests 

that the committee either amend its reports or provide 

further information concerning a particular problem. 

By sending these letters (RFAIs), the Commission 
80 Appendices 

seeks to ensure full disclosure and to encourage the 

committee’s voluntary compliance with the law. Analysts also provide frequent telephone assistance to 

committee officials and encourage them to call the 

division with reporting questions or compliance problems. Local phone: 202-694-1130; toll-free phone 

800-424-9530 (press 2 on a touch-tone phone). 

Staff Director and Deputy Staff 

Director 

The Staff Director carries the responsibilities of 

appointing staff, with the approval of the Commission, 

and implementing Commission policy. The Staff Director oversees the Commission’s public disclosure 

activities, outreach efforts, review of reports and the 

audit program, as well as the administration of the 

agency. 

The Deputy Staff Director has broad responsibility 

for assisting in this supervision, particularly in the 

areas of budget, administration and computer systems. 
Appendices 81 

Appendix 5 

Statistics on Commission 

Operations 

Summary of Disclosure Files 

Total Filers 

Existing in 

1998 

Filers 

Terminated 

as of 

12/31/98 

Continuing 

Filers as of 

12/31/98 

Number of 

Reports and 

Statements 

in 1998 

Gross Receipts 

in 1998 

(dollars) 

Gross 

Expenditures 

in 1998 

(dollars) 

Presidential Candidate 

Committees 413 52 361 311 3,826,007 7,119,855 

Senate Candidate Committees 676 236 440 1,893 216,905,461 269,135,130 

House Candidate Committees 3,169 1,144 2,025 11,659 364,246,494 387,189,706 

Party Committees 

Federal Party Committees 

Reported Nonfederal

596 184 412 3,156 402,117,253 396,377,381 

Party Activity 111 — 111 433 174,414,116 177,204,190 

Delegate Committees 10 2 8 — — — 

Nonparty Committees 

Labor Committees 352 31 327 2,727 60,122,334 64,402,963 

Corporate Committees 

Membership, Trade and

1,836 269 1,569 13,433 77,774,908 86,472,854 

Other Committees 2,431 521 1,910 13,858 151,689,854 166,401,691 

Communication Cost Filers 229 — 229 80 — 3,556,158 

Independent Expenditures by 

Persons Other Than 

Political Committees 

402 58 344 88 801,536 835,676 
82 Appendices 

Divisional Statistics for Calendar Year 1998 

Total 

Reports Analysis Division 

Documents processed 64,977 

Reports reviewed 43,103 

Telephone assistance and meetings 11,432 

Requests for additional information (RFAIs) 6,957 

Second RFAIs 3,340 

Data coding and entry of RFAIs and 

miscellaneous documents 19,153 

Compliance matters referred to Office 

of General Counsel or Audit Division 23 

Data Systems Development Division * 

Documents receiving Pass I coding 61,110 

Documents receiving Pass III coding 49,838 

Documents receiving Pass I entry 64,535 

Documents receiving Pass III entry 49,120 

Transactions receiving Pass III entry 

• In-house 143,254 

• Contract 1,113,929 

Public Records Office 

Campaign finance material processed 

(total pages) 1,359,035 

Cumulative total pages of documents 

available for review 15,683,118 

Requests for campaign finance reports 6,048 

Visitors 13,310 

Total people served 19,358 

Information telephone calls 16,164 

Computer printouts provided 49,178 

Faxline requests 4,852 

Total income (transmitted to U.S. Treasury) $42,288 

Contacts with state election offices 3,523 

Notices of failure to file with state 

election offices 236 

Total 

Administrative Division 

Contracting and procurement transactions 2,027 

Publications prepared for print 35 

Pages of photocopying 11,430,200 

Information Division 

Telephone inquiries 61,046 

Information letters 109 

Distribution of FEC materials 8,894 

Prior notices (sent to inform filers 

of reporting deadlines) 48,516 

Other mailings 11,331 

Visitors 76 

Public appearances by Commissioners 

and staff 169 

State workshops 0 

Publications 24 

Press Office 

News releases 60 

Telephone inquiries from press 13,217 

Visitors 2,297 

Freedom of Information Act 

(FOIA) requests 486 

Fees for materials requested under FOIA 

(transmitted to U.S. Treasury) $51,020 

Office of Election Administration 

Telephone inquiries 4,707 

National surveys conducted 8 

Individual research requests 230 

Materials distributed * 5,582 

Election presentations/conferences 20 

Foreign briefings 62 

Publications 4 

* Computer coding and entry of campaign finance information 

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

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

III, itemized information is coded and entered. 

* Figure includes National Voter Registration Act materials. 
Appendices 83 

Total 

Office of General Counsel 

Advisory opinions 

Requests pending at beginning of 1998 6 

Requests received 27 

Issued 26 

Not issued * 5 

Pending at end of 1998 2 

Compliance cases † 

Pending at beginning of 1998 207 

Opened 168 

Closed 164 

Pending at end of 1998 211 

Litigation 

Cases pending at beginning of 1998 35 

Cases opened 17 

Cases closed 21 

Cases pending at end of 1998 31 

Cases won 10 

Cases lost 4 

Cases settled‡ 7 

Law Library

 Telephone inquiries 743 

 Visitors 1,172 

* Three advisory opinion requests were withdrawn and two 

failed to garner the four Commission votes necessary for passage. † In annual reports previous to 1994, the category “compliance 

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

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

expanded to include internally-generated matters in which the 

Commission has not yet made reason to believe findings. 

‡ Cases settled includes cases withdrawn, dismissed or remanded. 

Audit Reports Publicly Released 

Year Title 2 * Title 26 † Total 

1976 3 1 4 

1977 6 6 12 

1978 98 ‡ 10 108 

1979 75 ‡ 9 84 

1980 48 ‡ 11 59 

1981 27 ‡ 13 40 

1982 19 1 20 

1983 22 0 22 

1984 15 2 17 

1985 4 9 13 

1986 10 4 14 

1987 12 4 16 

1988 8 0 8 

1989 2 7 9 

1990 1 6 7 

1991 5 8 13 

1992 9 3 12 

1993 10 2 12 

1994 5 17 22 

1995 12 0 12 

1996 23 0 23 

1997 6 6 12 

1998 5 7 12 

Total 425 126 551 
84 Appendices 

Audits Completed by Audit Division, 1975– 1998 

Total 

Presidential 106 

Presidential Joint Fundraising 11 

Senate 23 

House 152 

Party (National) 46 

Party (Other) 135 

Nonparty (PACs) 78 

Total 551 

* Audits for cause: The FEC may audit any registered political 

committee: 1) whose reports do not substantially comply with the 

law; or 2) if the FEC has found reason to believe that the committee 

has committed a violation. 2 U.S.C. §§438(b) and 437g(a)(2). † Title 26 audits: The Commission must give priority to these 

mandatory audits of publicly funded committees. ‡ Random audits: Most of these audits were performed under 

the Commission’s random audit policy (pursuant to the former 2 

U.S.C. §438(a)(8)). The authorization for random audits was repealed by Congress in 1979. 

Status of Audits, 1998 

Pending Opened Closed Pending 

at Beginning at End 

of Year of Year 

Presidential 11 2 7 6 

Presidential Joint Fundraising 0 1 0 1 

Senate 1 0 1 0 

House 3 0 3 0 

Party (National) 1 0 0 1 

Party (Other) 2 5 1 6 

Nonparty (PACs) 0 4 0 4 

Total 18 12 12 18 
Appendices 85 Appendix 6 

1998 Federal Register 

Notices 

1998-1 

Filing Dates for the New York Special Election (63 FR 

2240, January 14, 1998) 

1998-2 

Privacy Act of 1974; Republication and Notice of New 

Routine Uses for Disclosure (63 FR 3895, January 

27, 1998) 

1998-3 

Definition of Member of a Membership Association; 

Notice of Proposed Rulemaking; Technical Correction 

(63 FR 3851, January 27, 1998) 

1998-4 

Composition of the Commission; Notice of Disposition 

of Petition for Rulemaking (63 FR 4404, January 29, 

1998) 

1998-5 

Filing Dates for the California Special Election (63 FR 

5380, February 2, 1998) 

1998-6 

Definition of Express Advocacy; Notice of Disposition 

of Petition for Rulemaking (63 FR 8363, February 19, 

1998) 

1998-7 

Filing Dates for the California Special Election (63 FR 

9232, February 24, 1998) 

1998-8 

Definition of Member of a Membership Association; 

Public Hearing on Proposed Rules (63 FR 10783, 

March 5, 1998) 

1998-9 

Filing Dates for New Mexico Special Election (63 FR 

19260, April 17, 1998) 

1998-10 

Qualified Nonprofit Corporations; Notice of Disposition 

of Petition for Rulemaking (63 FR 29358, May 29, 

1998) 

1998-11 

Electronic Filing of Reports by Publicly Financed 

Presidential Primary and General Election Candidates; Notice of Proposed Rulemaking (63 FR 33012, 

June 17, 1998) 

1998-12 

Prohibited and Excessive Contributions; “Soft Money”; 

Notice of Proposed Rulemaking (63 FR 37722, July 

13, 1998) 

1998-13 

Electronic Filing of Reports by Publicly Financed 

Presidential Primary and General Election Candidates; Final Rule and Transmittal of Regulations to 

Congress (63 FR 45679, August 27, 1998) 

1998-14 

Prohibited and Excessive Contributions; “Soft Money”; 

Extension of Comment Period and Change of Public 

Hearing Date (63 FR 48452, September 10, 1998) 

1998-15 

Prohibited and Excessive Contributions; “Soft Money”; 

Change of Public Hearing Date (63 FR 55056, October 14, 1998) 

1998-16 

Electronic Filing of Reports by Publicly Financed 

Presidential Primary and General Election Candidates: Final Rule; Announcement of Effective Date 

(63 FR 63388, November 13, 1998) 

1998-17 

Definition of “Member” of a Membership Association; 

Notice of Proposed Rulemaking (63 FR 69224, December 16, 1998) 

1998-18 

Public Financing of Presidential Primary and General 

Election Candidates; Notice of Proposed Rulemaking 

(63 FR 69524, December 16, 1998) 
86 Appendices 

1998-19 

Treatment of Limited Liability Companies Under the 

Federal Election Campaign Act; Notice of Proposed 

Rulemaking (63 FR 70065, December 18, 1998) 
 

 

 

Appendices 87 Appendix 7 

Recipients of Public Funding 

1996 Presidential Election

 Original Net Public 

Candidate/ Amount Date Audit Repayment Money 

Committee Certified Released to Date to Date 

Primary 

Lamar Ale xander (R) $4,573,443.84 06/19/97 $ 884,993.00 $ 3,688,450.84 

Pat Buc hanan (R) 10,983,474.85 ----- 13,428.99 10,970,045.86 

William J . Clinton (D) 13,412,197.51 12/03/98 5,500.00 13,406,697.51 

Rober t J. Dole (R) 13,545,770.94 12/03/98 13,250.00 13,532,520.94 

Phil Gramm (R) 7,356,221.26 06/26/97 417,363.00 6,938,858.26 

John Hagelin (NL) 504,830.79 05/11/98 0.00 504,830.79 

Alan K eyes (R) 2,145,766.41 01/15/98 84,736.00 2,061,030.41 

Lyndon LaRouc he (D) 624,692.04 07/17/97 174,623.31 450,068.73 

Richard G. Lugar (R) 2,657,244.26 09/18/97 14,294.00 2,642,950.26 

Arlen Specter (R) 1,010,457.16 06/12/97 97,311.00 913,146.16 

Pete Wilson (R) 1,724,257.09 07/31/97 104,739.60 1,619,517.49 

Total Primary $ 58,538,356.15 $1,810,238.90 $ 56,728,117.25 

Convention 

Democratic $ 12,364,000.00 06/18/98 $ 185,758.95 $ 12,178,241.05 

Republican 12,364,000.00 12/04/97 470.12 12,363,529.88 

Total Convention $ 24,728,000.00 $ 186,229.07 $ 24,541,770.93 

General 

Clinton/Gore (D) $ 61,820,000.00 12/03/98 $ 0.00 $ 61,820,000.00 

Dole/K emp (R) 61,820,000.00 12/03/98 0.00 61,820,000.00 

Perot 29,055,400.00 12/04/97 1,706,915.00 27,348,485.00 

Total General $152,695,400.00 $1,706,915.00 $150,988,485.00 

Grand Total $235,961,756.15 $3,703,382.97 $232,258,373.18 
1992 Presidential Election 

Candidate/

Committee

 Original

 Amount 

 Certified

Date Audit

 Released

 Repayment

 to Date

 Net Public 

 Money 

to Date 

Primary 

Larr y Agran (D) 

Edmund G. Brown, Jr. (D) 

Pat Buc hanan (R) 

George Bush (R) 

Bill Clinton (D) 

Lenora B. Fulani (NA) 

John Hagelin (NLP) 

Tom Harkin (D) 

Bob K errey (D) 

Lyndon H. LaRouc he (D) 

Paul Tsongas (D)

Doug Wilder (D) 

Total Primary 

$ 269,691.68 

 4,239,404.83 

 5,199,987.25 

 10,658,520.94

12,536,135.47 

2,013,323.42 

 353,159.89 

 2,103,361.85 

 2,195,529.81 

570,507.92 

 3,003,981.09 

 289,026.67 

$ 43,432,630.82 

06/08/93 

05/24/94

10/11/94

12/27/94

12/27/94

04/21/94

09/14/94

03/15/94

03/03/94

11/30/94 

12/16/94 

04/21/94

$ 0.00 

191,805.96 

365,055.34 

0.00

 1,353,159.82 

1,394.00 

2,907.00 

35,316.00 

7,937.00 

292,090.93 

10,567.00 

11,515.00 

$2,271,748.05 

$ 269,691.68 

4,047,598.87 

4,834,931.91 

10,658,520.94 

11,182,975.65 

2,011,929.42 

350,252.89 

2,068,045.85 

2,187,592.81 

278,416.99 

2,993,414.09 

277,511.67 

$ 41,160,882.77 

Convention 

Democratic 

Republican 

Total Convention 

$ 11,048,000.00 

 11,048,000.00 

$ 22,096,000.00 

03/10/94 

06/23/94

$ 37,337.79 

$ 43,692.18 

6,354.39 

$ 11,010,662.21 

11,041,645.61 

$ 22,052,307.82 

General 

George Bush (R) 

Bill Clinton (D) 

Total General

$ 55,240,000.00 

 55,240,000.00 

$110,480,000.00 

12/27/94 

12/27/94

$ 155,400.89 

217,345.44

$ 372,746.33

$ 55,084,599.11 

55,022,654.56 

$110,107,253.67 

Grand Total $176,008,630.82 $2,688,186.56 $173,320,444.26 

88 Appendices 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Appendices 89 

1988 Presidential Election

 Original Net Public 

Candidate/ Amount Date Audit Repayment Money 

Committee Certified Released to Date to Date 

Primary 

Bruce Babbitt (D) $ 1,078,939.44 05/25/89 $ 1,004.80 $ 1,077,934.64 

George Bush (R) 8,393,098.56 01/30/92 113,079.70 8,280,018.86 

Rober t Dole (R) 7,618,115.99 04/11/91 235,821.53 7,382,294.46 

Michael Dukakis (D) 9,040,028.33 10/10/91 485,000.00 8,555,028.33 

Pete du Pont (R) 2,550,954.18 03/09/89 25,775.49 2,525,178.69 

Lenora B. Fulani (NA) 938,798.45 11/02/89 16,692.11 922,106.34 

Richard Gephardt (D) 3,396,276.37 05/23/91 121,572.28 3,274,704.09 

Alber t Gore , Jr. (D) 3,853,401.56 07/13/89 4,327.41 3,849,074.15 

Alexander Haig (R) 538,539.20 06/22/89 8,834.14 529,705.06 

Gary Har t (D) 1,124,708.09 01/25/90 38,215.79 1,086,492.30 

Jesse Jac kson (D) 8,021,707.31 04/22/92 75,000.00 7,946,707.31 

Jack Kemp (R) 5,984,773.65 07/25/91 103,555.03 5,881,218.62 

Lyndon LaRouc he (D) 825,576.99 05/17/90 4,795.32 820,781.67 

Pat Rober tson (R) 10,410,984.83 03/26/92 0.00 10,410,984.83 

Paul Simon (D) 3,774,344.77 08/29/91 0.00 3,774,344.77 

Total Primary $ 67,550,247.72 $1,233,673.60 $ 66,316,574.12 

Convention 

Democratic $ 9,220,000.00 11/21/89 $ 57,294.06 $ 9,162,705.94 

Republican 9,220,000.00 10/25/89 32,506.57 9,187,493.43 

Total Convention $ 18,440,000.00 $ 89,800.63 $ 18,350,199.37 

General 

George Bush (R) $ 46,100,000.00 10/03/91 $ 134,834.71 $ 45,965,165.29 

Michael Dukakis (D) 46,100,000.00 10/31/91 334,683.20 45,765,316.80 

Total General $ 92,200,000.00 $ 469,517.91 $ 91,730,482.09 

Grand Total $178,190,247.72 $1,792,992.14 $176,397,255.58 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

90 Appendices 

1984 Presidential Election

 Original Net Public 

Candidate/ Amount Date Audit Repayment Money 

Committee Certified Released to Date to Date 

Primary 

Reubin Aske w (D) $ 976,179.04 08/02/84 $ 5,073.55 $ 971,105.49 

Alan Cranston (D) 2,113,736.44 08/22/85 26,539.56 2,087,196.88 

John Glenn (D) 3,325,382.66 08/19/85 76,146.29 3,249,236.37 

Gary Har t (D) 5,333,785.31 06/26/86 1,295.52 5,332,489.79 

Ernest Hollings (D) 821,599.85 09/10/84 15,605.59 805,994.26 

Jesse Jac kson (D) 3,053,185.40 07/19/85 4,538.50 3,048,646.90 

Sonia Johnson (C) 193,734.83 06/25/85 0.00 193,734.83 

Lyndon LaRouc he (D) 494,145.59 10/29/85 0.00 494,145.59 

George McGovern (D) 612,734.78 02/11/85 67,726.51 545,008.27 

Walter Mondale (D) 9,494,920.93 10/28/86 290,140.55 9,204,780.38 

Ronald Reagan (R) 10,100,000.00 07/10/86 403,086.49 9,696,913.51 

Total Primary $ 36,519,404.83 $ 890,152.56 $ 35,629,252.27 

Convention 

Democratic $ 8,080,000.00 09/05/85 $ 20,654.60 $ 8,059,345.40 

Republican 8,080,000.00 04/28/86 306,454.29 7,773,545.71 

Total Convention $ 16,160,000.00 $ 327,108.89 $ 15,832,891.11 

General 

Walter Mondale (D) $ 40,400,000.00 02/05/87 $ 181,945.30 $ 40,218,054.70 

Ronald Reagan (R) 40,400,000.00 05/11/87 277,244.82 40,122,755.18 

Total General $ 80,800,000.00 $ 459,190.12 $ 80,340,809.88 

Grand Total $133,479,404.83 $1,676,451.57 $ 131,802,953.26 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Appendices 91 

1980 Presidential Election

 Original Net Public 

Candidate/ Amount Date Audit Repayment Money 

Committee Certified Released to Date to Date 

Primary 

John B. Ander son (R) $ 2,733,077.02 12/18/80 $ 412,267.54 $ 2,320,809.48 

Howard H. Baker, Jr. (R) 2,635,042.60 12/18/80 104,074.58 2,530,968.02 

Edmund G. Brown, Jr. (D) 892,249.14 12/16/80 18,980.02 873,269.12 

George Bush (R) 5,716,246.56 02/04/81 39,691.01 5,676,555.55 

Jimm y Carter (D) 5,117,854.45 01/21/81 111,431.13 5,006,423.32 

Phillp M. Crane (R) 1,899,631.74 11/14/80 468.00 1,899,163.74 

Rober t J. Dole (R) 446,226.09 12/16/81 3,369.44 442,856.65 

Edward M. Kenned y (D) 4,134,815.72 09/28/81 18,534.17 4,116,281.55 

Lyndon H. LaRouc he (D) 526,253.19 04/15/81 55,751.45 470,501.74 

Ronald Reagan (R) 7,330,262.78 02/02/81 1,052,647.87 6,277,614.91 

Total Primary $ 31,431,659.29 $1,817,215.21 $ 29,614,444.08 

Convention 

Democratic $ 4,416,000.00 04/29/81 $ 732,473.24 $ 3,683,526.76 

Republican 4,416,000.00 04/09/81 21,395.44 4,394,604.56 

Total Convention $ 8,832,000.00 $ 753,868.68 $ 8,078,131.32 

General 

John B. Ander son (I) $ 4,242,304.00 10/19/81 $ 48,786.01 $ 4,193,517.99 

Jimm y Carter (D) 29,440,000.00 08/18/81 87,232.02 29,352,767.98 

Ronald Reagan (R) 29,440,000.00 12/11/81 279,278.95 29,160,721.05 

Total General $ 63,122,304.00 $ 415,296.98 $ 62,707,007.02 

Grand Total $103,385,963.29 $2,986,380.87 $100,399,582.42 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

92 Appendices 

1976 Presidential Election

 Original Net Public 

Candidate/ Amount Date Audit Repayment Money 

Committee Certified Released to Date to Date 

Primary 

Bir ch Bayh (D) $ 545,710.39 06/16/78 $ 0.00 $ 545,710.39 

Llo yd Bentsen (D) 511,022.61 08/29/77 0.00 511,022.61 

Edmund G. Brown, Jr. (D) 600,203.54 09/28/77 306.00 599,897.54 

Jimm y Carter (D) 3,886,465.62 04/02/79 132,387.60 3,754,078.02 

Frank Chur ch (D) 640,668.54 07/18/77 0.00 640,668.54 

Gerald For d (R) 4,657,007.82 03/30/78 148,140.41 4,508,867.41 

Fred Harris (D) 639,012.53 05/17/79 7,798.32 631,214.21 

Henry Jac kson (D) 1,980,554.95 01/25/78 17,603.78 1,962,951.17 

Ellen McCormac k (D) 247,220.37 08/24/77 0.00 247,220.37 

Ronald Reagan (R) 5,088,910.66 04/13/78 611,141.89 4,477,768.77 

Terry Sanf ord (D) 246,388.32 10/14/76 48.04 246,340.28 

Milton Shapp (D) 299,066.21 03/20/78 299,066.21 0.00 

Sargent Shriver (D) 295,711.74 05/17/79 1,553.00 294,158.74 

Morris Udall (D) 2,020,257.95 06/18/79 43,113.28 1,977,144.67 

GeorgeWallace (D) 3,291,308.81 04/03/78 45,380.98 3,245,927.83 

Total Primary $24,949,510.06 $1,306,539.51 $23,642,970.55 

Convention 

Democratic $ 2,185,829.73 12/20/77 $ 170,093.16 $ 2,015,736.67 

Republican 1,963,800.00 07/10/78 382,205.36 1,581,594.64 

Total Convention $ 4,149,629.73 $ 552,298.42 $ 3,597,331.31 

General 

Jimm y Carter (D) $21,820,000.00 06/04/79 $ 57,762.21 $21,762,237.79 

Gerald For d (R) 21,820,000.00 03/24/78 44,655.00 21,775,345.00 

Total General $43,640,000.00 $ 102,417.21 $43,537,582.79 

Grand Total $72,739,139.79 $1,961,255.14 $70,777,884.65