Federal 

Election 

Commission

Annual Report 2003

Federal Election Commission

Washington, DC 20463
Commissioners

Bradley A. Smith, Chairman

Ellen L. Weintraub, Vice Chair

David M. Mason, Commissioner

Danny L. McDonald, Commissioner

Scott E. Thomas, Commissioner

Michael E. Toner, Commissioner

Statutory Officers

James A. Pehrkon, Staff Director

Lawrence H. Norton, General Counsel

Lynne A. McFarland, Inspector General

The Annual Report is prepared by:

Gregory J. Scott, Assistant Staff Director,

Information Division

Amy L. Kort, Ph.D., Senior Technical Writer, 

Information Division

Michelle L. Ryan, Public Affairs Specialist

Paul Clark, Ph.D., Statistician, 

Information Technology Division
June 1, 2004

The President of the United States

Members of The United States Senate

Members of The United States House of Representatives

Dear Mr. President, Senators and Representatives:

We are pleased to submit for your information the 29th Annual Report of the Federal

Election Commission, pursuant to 2 U.S.C. §438(a)(9). The Annual Report 2003

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

During 2003, the Commission again completed a number of significant rulemakings,

including new rules to implement the “Millionaires’Amendment” and reporting

procedures under the Bipartisan Campaign ReformAct of 2002 and revised rules on party

committee phone banks, multicandidate committee status, leadership PACs, candidate

travel and the financing of Presidential candidates and conventions. In addition, the

Commission issued 35 Advisory Opinions, doubling the number issued in 2002.

The Commission also initiated a broad review of its enforcement procedures.

Commissioners testified on FEC enforcement procedures before the Committee on House

Administration and held a public hearing to receive comments on those procedures.

In addition, the Commission unveiled a web-based search tool to facilitate public

examination of documents regarding closed Matters Under Review.

This report also includes the twelve legislative recommendations the Commission

recently adopted and transmitted to the President and the Congress for consideration. We

hope that Congress will consider adopting these proposals, which we believe would be

beneficial changes in campaign finance law.

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

efforts to implement the Federal Election Campaign Act.

Respectfully,

Bradley A. Smith

Chairman
Table of Contents

Executive Summary 1

Chapter One

Keeping the Public Informed

Public Disclosure 3

Educational Outreach 6

Office of Election Administration 8

Chapter Two 

Interpreting and Enforcing the Law

Regulations 9

Advisory Opinions 10

Enforcement 10

Administrative Fine Program 13

Alternative Dispute Resolution Program 14

Audit 14

Chapter Three

Legal Issues

BCRA Challenges 17

Soft Money 17

Use of Campaign Funds 21

Leadership PACs 21

Corporate Contributions 22

Sale and Use of Contributor Information 24

Campaign Travel 25

Earmarking 26

Administrative Fines 29

Chapter Four

Presidential Public Funding

Shortfall 31

Certification of Public Funds 31

Revised Regulations on the Public 

Financing of Presidential Candidates

and Nominating Conventions 32

Repayment of Public Funds 34

Chapter Five

The Commission

Commissioners 37

Inspector General 37

Equal Employment Opportunity 37

Ethics 37

The FECʼs Budget 37

Chapter Six

Legislative Recommendations 41

Chapter Seven

Campaign Finance Statistics 53

Appendices

1. Biographies of Commissioners

and Officers 61

2. Chronology of Events 65

3. FEC Organization Chart 69

4. FEC Offices 71

5. Statistics on Commission Operations 77

6. 2003 Federal Register Notices 81

7. 2003 Advisory Opinions 83
Table of Charts

Chapter One

Keeping the Public Informed

Chart 1-1: 

Size of Detailed Database by Election Cycle 4

Chapter Two 

Interpreting and Enforcing the Law

Chart 2-1:

Conciliation Agreements by Calendar Year 11

Chart 2-2:

Median Civil Penalty by Calendar Year 11

Chart 2-3:

Ratio of Active to Inactive Cases by Calendar Year 12

Chart 2-4:

Cases Dismissed under EPS 12

Chart 2-5:

Average Number of Respondents and 

 Enforcement Cases by Calendar Year 12

Chapter Five

The Commission

Chart 5-1:

Divisional Allocation of Budget 38

Chart 5-2:

Functional Allocation of Budget 39

Chapter Seven

Campaign Finance Statistics

Chart 7-1:

Number of PACs, 1974-2003 53

Chart 7-2:

PAC Contributions to House and Senate

Candidates in Nonelection Years 54

Chart 7-3:

House and Senate Campaign

Fundraising in Nonelection Years 55

Chart 7-4:

Contributions to House and Senate

Candidates from Individuals During

Off Year of Election Cycle 56

Chart 7-5:

Fundraising by All Committees of

National Party 57

Chart 7-6:

Democratic National Committee

Nonelection Year Fundraising 58

Chart 7-7:

Republican National Committee

Nonelection Year Fundraising 59
1

Executive Summary

Throughout 2003, the Federal Election Commission (FEC) continued to implement the newly enacted

Bipartisan Campaign Reform Act of 2002 (BCRA) by 

issuing many new regulations and advisory opinions

and by making internal adjustments to enforce the

new law. The agency emphasized education of the

regulated community and accessibility of information

provided to the public.

As the agency worked to implement the new law, 

it also devoted considerable resources to defending

its constitutionality. In May, the U.S. District Court for 

the District of Columbia issued an opinion in McConnell v. FEC that upheld some BCRA provisions, found 

others unconstitutional and determined some to be 

nonjusticiable. The court stayed its decision, pending 

an appeal to the Supreme Court. As the year drew 

to a close, the Commission celebrated a significant 

victory as the high court upheld the two principal features of the BCRA: the control of soft money and the

regulation of electioneering communications. Only

the BCRAʼs ban on contributions from minors and its 

provisions limiting party committeesʼ ability to finance 

both coordinated and independent expenditures were

struck down. 

In addition to the BCRA litigation, another Supreme 

Court decision upheld the constitutionality of the Federal Election Campaign Actʼs ban on corporate contributions as applied to nonprofit advocacy corporations 

(so-called MCFL corporations). On June 16, 2003, 

the Court overruled the U.S. Court of Appeals for the 

4th Circuit in Beaumont v. FEC, concluding that the

prohibition on contributions by corporations is constitutional as applied to nonprofit MCFL-type advocacy 

corporations, such as North Carolina Right to Life, Inc.

The Commission continued to make its enforcement process more effective and efficient by reorganizing the Office of General Counsel and implementing changes in case management. Through

its standard enforcement process, the FEC entered

into conciliation agreements requiring the payment

of more than $2 million in total civil penalties during

2003. Some of these penalties were among the highest in the history of the Commission. In MUR 4931, for 

example, the agency entered into conciliation agreements that resulted in civil penalties of $849,000—the

highest cumulative civil penalty in FEC history. The 

Commission obtained more in civil penalties in 2003

than in any previous year, including three of the ten 

largest penalties ever obtained by the FEC. The 

Commission also obtained more penalties in excess

of $50,000 than in the previous three years combined.

Other FEC programs intended to promote compliance and expedite the resolution of enforcement

matters continued to pay dividends during 2003. The 

Alternative Dispute Resolution (ADR) program, which

completed its first year as a permanent program at the 

Commission, had produced a total of 103 separate

negotiated agreements based on 78 cases by the end

of 2003. In addition, the FECʼs Administrative Fine 

program continued to encourage compliance with the

lawʼs reporting deadlines by assessing civil money 

penalties for violations involving failure to file reports 

on time or at all, including failure to file 48-hour notices. During 2003, the Administrative Fines office processed 379 cases and collected a total of $455,581 

in fines for the U.S. Treasury. During the three years

the program has been in place, the rate of timely filing 

has increased. For example, nine percent of the 2003

Year End Reports were filed late, a 10 percentage 

point improvement from 1999 when 19 percent of the

Year End Reports were filed late.

The FEC also continued to promote compliance by

educating the regulated community and by making information more accessible to the public. Commissioners and FEC staff hosted a full series of conferences 

in Washington, DC, and regional locations, as well 

as roundtable workshops, public speaking engagements and state outreach programs. The agency also 

posted the latest information on the BCRA in a special 

section of its web site. In an effort to improve public 

access to information from closed enforcement matters, the Commission unveiled the Enforcement Query 

System (EQS) on December 11, 2003. The program

is a web-based search tool that allows users to find 

and examine public documents regarding closed Matters Under Review (MURs). Previously, these documents were available only on paper or microfilm at 

the Commissionʼs offices in Washington. Initially, only 

those cases closed since January 2002 were available in EQS. The staff continues to add cases closed 

prior to 2002 as well as those closed in the current 

year. Other FEC compliance actions (Alternative Dis-
2 Executive Summary

pute Resolution cases and Administrative Fines) will 

be included in the system at a later date. Additionally, 

the Commission began a redesign of the FEC web

site in an effort to improve navigation and to provide 

easier access to the FECʼs growing online services.

The agency also provides guidance to the regulated community through advisory opinions (AOs) and

regulations. During 2003, the Commission issued 35

AOs—double the number issued in the previous year. 

Many of these involved novel issues under the BCRA.

In addition, the FEC completed significant rulemakings regarding leadership PACs, candidate travel and 

phone banks. The agency also completed a comprehensive review and overhaul of its public financing 

rules for candidates and party committee conventions

in time for the beginning of the 2004 Presidential election campaign season.

In December 2003, the President appointed Commissioners to the newly created Election Assistance 

Commission, which will assume duties previously

performed by the FECʼs Office of Election Administration (OEA). During its last year as a part of the FEC,

the OEA completed a number of significant projects. 

Most involved implementing changes resulting from

the Help America Vote Act that Congress enacted 

during 2002 to improve the administration of federal

elections. In addition, the OEA sent a report to Congress that documented the impact of the National

Voter Registration Act of 1993 (NVRA) during the 

2001-2002 election cycle, and made recommendations for improvements in election administration. The 

OEA also revised the National Mail Voter Registration 

Form. 

The material that follows details the FECʼs activities during 2003. Supplemental information on most

topics may be found in issues of the FECʼs monthly 

newsletter, the Record, that were published during the 

past year.
3

Chapter One

Keeping the Public Informed

The FECʼs public disclosure and educational outreach programs work together to educate the electorate about the various aspects of federal campaign

finance law. The financial reports of all federal political committees are accessible to members of the 

general public, providing an added incentive for the

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

by providing the information necessary to understand

the requirements of the law.

Throughout 2003, the Commission demonstrated

an ongoing commitment to increasing the availability

and improving the accessibility of information and resources provided by the FEC. As detailed below, new 

regulations and other changes went into effect during 

the year that will lead to further enhancement of the

disclosure and educational outreach programs.

Public Disclosure

During 2003, the disclosure of the sources and

amounts of funds spent on federal campaign activity

continued to be the focal point of the Commissionʼs 

work. The Commission received the reports filed by 

committees, reviewed them to ensure compliance

with the law, entered the data into the FECʼs computer 

database and made the reports available to the public

within 48 hours of receipt.

Electronic Filing

The Commissionʼs mandatory electronic filing 

program continued to pay disclosure dividends in

2003. Under the program, committees that receive

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

or expect to do so, must file their campaign finance 

reports electronically.1 Committees that are required

to file electronically but instead file on paper are considered nonfilers and could be subject to enforcement 

actions, including administrative fines. In order to file 

electronically, committee treasurers obtain passwords 

from the FEC and use software to fill out the reports,

which they can send to the Commission via internet 

1

 Mandatory electronic filing requirements do not apply to 

Senate committees.

connection, modem or floppy disk. The FECʼs validation system verifies that the reports meet certain criteria and informs the committees of problems that need

to be fixed.

Throughout 2003, the Reports Analysis and Information Technology divisions worked to ensure that 

both the Commissionʼs free FECFile electronic filing 

software and other commercially available software

allowed users to comply with BCRA-related changes

to reporting. Additionally, they made efforts to improve compliance by clarifying outgoing messages

and error codes that may be received during filing 

attempts.

State Filing Waivers

The Commissionʼs State Filing Waiver Program 

continued to ease the reporting and recordkeeping

burdens for political committees and state election

offices. The program, which began in October 1999,

includes 51 states and territories that have qualified 

for the waiver.

2

 Under the program, filers whose reports are available on the FEC web site need not file 

duplicate copies of their reports in states that provide

public access to the Commissionʼs web site.

Imaging and Processing Data

The Commission also continued its work in 2003 to 

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

paper reports filed with the agency to create digital 

images of the documents, which are then accessible 

2 As of December 31, 2003, the FEC had certified that 

the following states and territories qualify for filing waivers: 

Alabama, Alaska, American Samoa, Arizona, Arkansas, 

California, Colorado, Connecticut, Delaware, District of 

Columbia, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana,

Iowa, Kansas, Kentucky, Louisiana, Maine, Massachusetts, 

Maryland, Michigan, Minnesota, Mississippi, Missouri, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, 

New York, North Carolina, North Dakota, Ohio, Oklahoma, 

Oregon, Pennsylvania, Rhode Island, South Carolina, South

Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Virgin 

Islands, Washington, West Virginia, Wisconsin and Wyoming. Guam, Montana and Puerto Rico are not currently in

the State Filing Waiver Program.
 

4 Chapter One

to the public in the FECʼs Public Disclosure Office or 

on the Commissionʼs web site. In addition to the digital imaging system, the Commission codes and enters

the information taken from campaign finance reports 

into the agencyʼs disclosure database, which contains 

data from 1977 to the present. Information is coded 

so that committees are identified consistently throughout the database. For electronic filings, this process is 

completely automated. 

CHART 1-1

Size of Detailed Database by Election Cycle

Year Number of Detailed Entries*

1990 767,000

1991 444,000†

1992 1,400,000 

1993 472,000

1994 1,364,000

1995 570,000 

1996 1,887,160

1997 619,170

1998 1,652,904

1999 840,241

2000 2,390,837

2001 661,591

2002 2,281,963

2003 1,109,946

* Figures for even-numbered years reflect the cumulative 

total for each two-year election cycle.

† The FEC began entering nonfederal account data in 1991.

Public Access to Data

Due to modernized hardware, software and communications infrastructure, the Commissionʼs retrieval 

system allows anyone with access to the Commission

web site—www.fec.gov—to access the FECʼs campaign finance disclosure database. The new system

also allows users to perform complex search functions. 

The Commissionʼs disclosure database, which 

contains millions of transactions, enables researchers 

to select a profile of a committeeʼs financial activity for 

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

elements (e.g., donorʼs name, recipientʼs name, date, 

amount or geographic location).

Visitors to the Office of Public Disclosure can 

use computer terminals to inspect digital images of

reports, access the disclosure reports and access

the disclosure database and more than 25 different 

campaign finance indices that organize the data in 

different ways. Visitors can also access the FECʼs 

web site, which offers search and retrieval of more 

than 3 million images of report pages dating back to

1993 and over 2 million database entries since 1997. 

Those outside Washington, DC, can access the information via the Internet or the Direct Access Program, 

or order it using the Commissionʼs toll-free number.

The Office of Public Disclosure continues to make 

available microfilmed copies of all campaign finance 

reports, paper copies of reports from Congressional

candidates and Commission documents such as 

press releases, audit reports, closed enforcement

cases (MURs) and agenda documents.

The Commission has continued to make improvements to its disclosure system throughout the history

of the agency. This year was no exception. Continued

advances in computer technology greatly enhanced

the disclosure process in 2003. As part of a continuing effort to improve the publicʼs access to and understanding of FEC compliance actions, the Commission

implemented several disclosure initiatives, including

an interim policy regarding the placement of documents from closed enforcement cases on the public

record and the launch of a new searchable MUR database. Together these initiatives represent an effort to 

improve the transparency of Commission actions by

raising enforcement disclosure to the same high level

the Commission has sought for campaign finance 

reports and other public information. Moreover, the 

Commission acted during the year to aid filers in complying with new disclosure requirements mandated

under the Bipartisan Campaign Reform Act of 2002 

(BCRA). 
Keeping the Public Informed 5

Enforcement Query System

On June 11, 2003, Chair Weintraub announced 

that the Commission would add a searchable MUR 

database to the agencyʼs web site by the end of the 

year to improve public access to enforcement documents. FEC Staff Director James Pehrkon unveiled 

the agencyʼs new Enforcement Query System (EQS) 

on December 11, 2003. The program is a web-based

search tool that allows users to find and examine public documents regarding closed Commission enforcement matters. Using current scanning, optical character recognition and text search technologies, the

system permits intuitive and flexible searches of case 

documents and other materials. Previously, these 

documents were available only at the Commissionʼs 

offices in Washington, and only on paper or microfilm. 

Users of the system can search for specific words or

phrases from the text of all public case documents.

They can also identify single MURs or groups of

cases by searching additional identifying information

about cases prepared as part of the Case Management System. Included among these criteria are case

names and numbers, complainants and respondents,

timeframes, dispositions, legal issues and penalty 

amounts. 

Initially, the EQS contained complete public case 

files for all MURs closed since January 1, 2002. In 

addition to adding all cases closed subsequently, staff 

will work to add cases closed prior to 2002. Other 

FEC compliance actions (Alternative Dispute Resolution cases and Administrative Fines) will be included 

in the system at a later date.

Disclosure Policy

In December, the Commission also approved a 

Statement of Policy Regarding Disclosure of Closed

Enforcement and Related Files that identified the 

categories of records that will be released to the public once enforcement cases are closed. The new FEC 

policy provides for the release of additional documents when enforcement cases are closed. These will 

include original complaints or internal FEC referrals

that initiate enforcement actions, along with reports

and briefs from the Office of General Counsel (OGC)

and responses to those reports and briefs by respondents. The Policy Statement is an interim measure, 

and the Commission intends to conduct a rulemaking

in 2004 to address materials to be placed on the public record. 

Review of Reports

The Commissionʼs Reports Analysis Division (RAD) 

reviews all reports to track compliance with the law

and to ensure that the public record provides a full

and accurate portrayal of campaign finance activity. 

When Campaign Finance Analysts find that a report 

contains errors or suggests violations of the law, they 

send the reporting committee a Request for Additional 

Information (RFAI). In 2003, the procedure for sending RFAI letters changed. Previously, committees 

were sent up to two RFAI letters and allowed up to 

60 days total to respond to both letters. Over half of 

the RFAI letter recipients did not respond to the first 

letter. Under the new procedure, however, analysts 

now send only one letter requesting additional information, allowing respondents 30 days to reply. This 

is intended to prevent duplication and enable analysts

more time to review reports. After receipt of the letter, 

the committee treasurer can make additions or corrections to the report, which are then added to the public

record. Apparent violations, however, may be referred 

to the Audit Division or to the Office of General Counsel for possible enforcement action.

RAD has also implemented a number of innovations to helps its Campaign Finance Analysts handle 

an increasing number of campaign finance transactions. ICF Consulting assessed efficiencies in RADʼs 

operations and issued a report on January 21, 2003,

suggesting changes to improve efficiency. Based on 

those recommendations, the division strengthened

management capabilities, assigning new assistant

branch chiefs and implementing standardized training

and practice in both the authorized and nonauthorized

branches. The divisionʼs mentoring program continued to help newer staff learn from those with more 

experience, allowing the division to fulfill its functions 

with greater success. Additionally, committees are 

now encouraged to call their analysts directly rather

than calling a central number to make the process

more efficient. Finally, RAD continues to work closely 
6 Chapter One

with the Office of Administrative Review to streamline 

the compliance process for administrative fines. 

Educational Outreach

Throughout the year, the Commission continued to 

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

Home Page (www.fec.gov)

In its seventh year of operation, the Commissionʼs 

web site offers visitors a variety of resources. Visitors 

can search for advisory opinions (AOs) on the web by

using key words or phrases or by entering the year

and AO number, and can access a variety of rulemaking documents, including Notices of Proposed Rulemaking and final rules. Researchers may also access

brochures on a variety of campaign finance related 

issues, read agency news releases, review federal

election results and voter registration and turnout

statistics, look up reporting dates and download the

national mail voter registration form, FEC registration

and reporting forms, copies of the Record newsletter, 

the Campaign Guide series and other agency publications. Additionally, a section of the web site is devoted exclusively to the BCRA, providing links to the

Federal Election Campaign Act as amended by the 

BCRA, summaries of major BCRA-related lawsuits

and final rules and summaries. 

As part of an ongoing endeavor to make the Commission more accessible to the public, Chair Weintraub initiated an effort to reconfigure the FEC web 

site. Throughout 2003, the Commission made considerable progress in redesigning the site to meet the

needs of the regulated community, researchers and 

the general public. The completed project is expected

to be unveiled in 2004. 

Telephone Assistance

A committeeʼs first contact with the Commission is 

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

advisory opinions and litigation, as needed, to answer

specific inquiries. Callers receive FEC documents, 

publications and forms at no cost. In 2003, the Information Division responded to 29,457 callers with compliance questions. The monthly average was 2,455,

peaking in July with 3,686 calls. 

Faxline

The Commissionʼs automated Faxline allows the 

public to obtain publications or other documents

quickly and easily. During the year, 336 callers 

sought information from the 24-hour Faxline and received 475 documents.

Reporting Assistance

During 2003, Campaign Finance 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 FECʼs monthly 

newsletter, and the FECʼs web site also listed reporting schedules and requirements, including new requirements imposed as part of the BCRA.

Roundtables

As part of its education outreach activities, the FEC

holds roundtable sessions for the regulated community. The maximum number of participants for the

roundtables is typically 12 participants per session,

but interest in the new BCRA provisions prompted the 

agency to expand the sessions to permit up to 35 attendees. The Commission hosted 6 roundtables during 2003, including sessions on new BCRA provisions 

regarding soft money, electioneering communications, 

contribution limits and prohibitions, coordinated and

independent expenditures, and the so-called millionairesʼ amendment.

State Outreach

During the summer of 2003, the Commission held

informal state outreach workshops in Nashville, TN, 

and Austin, TX. The sessions were intended to help

educate members of the regulated community in regions that were not within proximity of Washington, 

DC, or any of the scheduled regional conferences on

the BCRAʼs changes to campaign finance law. More 

than 100 representatives from candidate committees, 
Keeping the Public Informed 7

separate segregated funds and state and local party

committees attended these workshops. 

Conferences

Also during 2003, the agency conducted a full program of conferences to help candidates and committees understand and comply with the law. In Washington, DC, the Commission hosted three conferences 

for candidates, parties, corporations, trade associations, membership organizations and labor organizations. In addition, the agency held regional conferences in Chicago and Boston. The final conference was 

to have been held in San Diego, but was canceled

due to hazardous conditions in the surrounding area.

Registrants were offered a free one-day seminar in 

Los Angeles or discounted admission to a future conference in lieu of the canceled event.

The conferences featured hands-on workshops in

the fundamental areas of campaign finance law. Additionally, Commissioners and staff conducted specialized sessions on the BCRAʼs changes to the federal 

campaign finance law and reporting requirements.

Tours and Visits

In addition to holding conferences and roundtable

sessions, the Commission welcomes individuals and 

groups who visit the FEC. Visitors to the Commission during 2003, including 105 groups and foreign

delegations, listened to presentations about campaign

finance law and, in some instances, toured the agencyʼs office of Public Disclosure.

Media Assistance

The Commissionʼs Press Office continued to field 

questions from media representatives and navigate

reporters through the FECʼs vast pool of information. Press office staff responded to 8,389 calls and 

visits from members of the press and prepared 94

news releases during 2003. Many of these releases

alerted reporters to new campaign finance data and 

contained statistical graphs and tables. As part of its

efforts to improve disclosure regarding enforcement 

actions, the Commission expanded its news releases

regarding completed enforcement actions. The new 

structure adds explanatory material to provide a more 

complete description of the statutory framework of the

allegations and the resolution of the matter. 

Publications

During 2003, the Commission produced a number

of documents to help committees, the press and the

general public understand the law and find information about campaign finance. Throughout the year, 

the Commission updated brochures to reflect changes 

from the BCRA. The following brochures were completed and made available to the public during the 

year: Contribution Limits, FEC and the Federal Campaign Finance Law, Foreign Nationals, FAQ on the 

BCRA and Other New Rules and Special Notices on 

Political Ads and Solicitations. In light of the pending

litigation surrounding the new law, the agency did not 

go to the expense of printing these brochures, but

rather made them available on the agencyʼs web site. 

Commission staff also worked to revise the Campaign Guide series to reflect the BCRA amendments, 

and expects to publish new guides in 2004. In the interim, the agency made available a Campaign Guide

Supplement—a compilation of Record newsletter 

articles summarizing provisions of the BCRA.

As in past years, the Commission distributed more

than 10,000 free subscriptions to the Record. The 

newsletter summarizes recent advisory opinions,

compliance cases, audits, litigation and changes in

regulations. It also provides campaign finance statistics in graph and table format.

Although the concentration of the FEC is on federal

campaign finance disclosure, the Commission also 

provides some state information to the public with the 

Combined Federal/State Disclosure Directory 2003. 

This manual directs researchers to federal and state 

disclosure offices that provide information on campaign finance, candidatesʼ personal finances, lobbying, corporate registration, election administration and

election results. In an effort to make Commission 

resources more accessible, the disclosure directory

was available in print, online and on computer disks

formatted for popular hardware and software. The 

online version of the Disclosure Directory includes hyperlinks to the web pages of state offices and e-mail 

addresses for state officials.
8 Chapter One

Office of Election Administration

During 2003, the FEC Office of Election Administration (OEA) completed a number of significant projects. 

Throughout the year, efforts were devoted to implementing changes that resulted from the Help America 

Vote Act (HAVA) passed during 2002 to improve election administration in federal elections. 

On June 30, 2003, the Commission approved the

Office of Election Administrationʼs report to Congress 

documenting the impact of the National Voter Registration Act of 1993 (NVRA) during the 2001-2002 

election cycle, and making recommendations for

improvements in election administration. In the current report to Congress, the Commission reiterated its

recommendations that:

• The U.S. Postal Service create a new class of mail 

for "official election material," provided at the most

reduced rates possible for the first class treatment 

of this mail, and provide space in their postal lobbies

free of charge to state and local election officials for 

voter registration material; and

• States develop and implement an on-going, periodic training program for relevant motor vehicle and

agency personnel regarding their duties and responsibilities under the NVRA as implemented by the 

stateʼs law.

In addition, the Office of Election Administration 

recently revised the National Mail Voter Registration 

Form. The form has been updated to reflect new requirements set forth in HAVA. The following are highlights of the changes that were made:

• Questions were added to the form asking applicants

if they are a citizen of the United States, and if they

will be 18 years of age on or before election day. 

Applicants are also informed that they should not

complete the form if they checked “No” in response

to either question.

• A statement was added informing the applicant that 

if the form is submitted by mail and he or she is

registering for the first time, appropriate information 

must be submitted with the mail-in registration form

in order to avoid additional identification requirements upon voting at the polls for the first time. 

• These changes comply with revisions made to state

law since the form was last revised in July 2002. (As 

of this date, many states remain in the process of

amending and updating their election laws and procedures to reflect the new provisions of HAVA.)

• All states that are covered by NVRA now allow individuals to print the form from the FEC web site, complete the application and mail it to their State election 

officer.

Finally, as 2003 came to an end, the OEA produced 

three new brochures on voting system usability. They

are designed to meet the needs of vendors, buyers

and election officials:

• “Developing a User-Centered Voting System” is 

written for voting system developers and helps them

design systems that are easier for voters to use.

• “Procuring a User-Centered Voting System” is written to assist state and local officials in purchasing

a system that is best suited for their constituentsʼ

needs. It helps them to identify those characteristics

which make a voting system easier to use.

• “Usability Testing of Voting Systems” assists both 

developers and election officials in their evaluation of

voting system usability. It provides guidance on how 

to test varied systems for ease of use.

The brochures were available through the Office of 

Election Administration, the Information Division and 

in PDF form on the Commissionʼs web site.
9

Chapter Two

Interpreting and

Enforcing the Law

As part of its mission to administer, interpret and 

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

opinions to promote compliance with the law. The 

regulations explain the law in detail, and implement

the statutory requirements legislated by Congress.

Advisory opinions, in turn, clarify how the statute and

regulations apply to real-life situations.

The agencyʼs enforcement actions also promote 

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

result in civil penalties and remedial action.

Regulations

Congressional action, judicial decisions, petitions

for rulemaking or other changes in campaign finance 

law or practices may necessitate that the Commission

update or create new regulations. Consequently, the 

FEC undertakes rulemakings when appropriate to

revise existing campaign finance rules or create new 

ones.

Notices of proposed rules are published in the Federal Register and on the U.S. Government web site 

(www.regulations.gov). The notice provides an opportunity for members of the public and regulated community to review the rules and submit written comments to the Commission. The Commission considers the comments and testimony when deliberating on

the final rules in open meetings. The text of the final 

rules and corresponding Explanation and Justification 

are published in the Federal Register and sent to the 

House of Representatives and Senate once they have

been approved. The Commission announces the effective date, which is at least 30 days after the notice

of final rule in the Federal Register, in the Explanation

and Justification of the final rules.

Rulemakings Completed in 2003

The Commission completed an historic set of rulemakings in 2002 regarding the Bipartisan Campaign

Reform Act (BCRA). Throughout the beginning of

2003, the Commission successfully completed the following BCRA-related regulations:

• Rules regarding the reporting of electioneering communications and independent expenditures, monthly 

reporting by national political party committees and

quarterly reporting by principal campaign committees for the House of Representatives and Senate

took effect February 3, 2003.

• Regulations that implement the BCRAʼs “Millionairesʼ

Amendment,” allowing increased contribution limits

and other compensating advantages for certain candidates facing wealthy, self-financed opponents took 

effect on February 26, 2003.

In addition, the Commission completed work on the

following new rules during 2003:

• Rules regarding the public financing of Presidential 

candidates and conventions were revised to administer more effectively the public financing programs 

and to reflect changes from the BCRA. The revisions took effect on November 28, 2003.

• Revised regulations regarding multicandidate political committee status, annual contributions by persons other than multicandidate committees to national party committees, contributions to candidates

for more than one federal office and biennial contribution limits for individuals took effect December 15, 

2003.

• New rules regarding the proper attribution of a party

committeeʼs or party organizationʼs disbursements 

for telephone bank communications that refer to a

clearly identified candidate took effect on December 

15, 2003.

• Leadership PAC rules that address the relationship 

between authorized committees and unauthorized 

committees that are associated with a federal candidate or officeholder took effect on December 31, 

2003.

• Candidate travel regulations that establish uniform

payment rates for all federal election travel on either

government or private aircraft and other conveyances took effect January 14, 2004. 

Other Rulemakings in Process

In addition to completing the preceding rules, the

Commission took the following regulatory actions:

• The Commission proposed new rules addressing

when the proceeds of a political committeeʼs rental, 

sale or exchange of its mailing list would be consid-
10 Chapter Two

ered a contribution to the committee subject to the

prohibitions and limitations of the FECA. The rulemaking was terminated on November 14, 2003.

• The Commission received a petition for rulemaking regarding payroll deduction contributions to a

trade associationʼs separate segregated fund. The 

Commission was urged to allow trade associationsʼ

member corporations to use payroll deduction plans

to collect such contributions.

Advisory Opinions

The Commission responds to questions about how

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

request for an advisory opinion, it generally has 60

days to respond. If, however, a candidateʼs campaign 

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

the Commission must respond within 20 days. The 

Office of General Counsel prepares a draft opinion,

which the Commissioners discuss and vote on during an open meeting. A draft opinion must receive at 

least four favorable votes to be approved.

Many of the advisory opinions the Commission

issued in 2003 dealt with issues related to the BCRA, 

including several concerning the solicitation of funds

by federal candidates and officeholders. These and 

other advisory opinions issued during the year are

explored in greater detail in Chapter 3 “Legal Issues.”

Enforcement

The Enforcement Process

The Commission learns of possible election law

violations in four ways. First, the agencyʼs monitoring 

process may discover potential violations through a

review of a committeeʼs reports or through a Commission audit. Second, potential violations may be

brought to the Commissionʼs attention through the 

complaint process. This process enables anyone to

file a sworn complaint alleging violations and explaining the basis for the allegations. Third, the referral 

process enables other government agencies to refer 

possible violations to the FEC. Finally, any person or 

entity who believes it has committed a violation may

bring the matter sua sponte to the Commissionʼs attention.

Each of the preceding may lead to a Matter Under

Review (MUR). Internally generated cases include

those revealed in audits and reviews of reports and

those referred to the Commission by other government agencies. Externally generated cases initiated

by a formal, written complaint receive a MUR number

once the Office of General Counsel (OGC) determines that the document satisfies specific criteria for 

a proper complaint.

The General Counsel recommends whether the 

Commission should find “reason to believe” and 

whether an investigation is warranted. If the Commission determines there is “reason to believe” a 

violation has been committed, respondents are notified and, if necessary, an investigation is started. The 

Commission has authority to subpoena information

and ask a federal court to enforce a subpoena. After 

the investigation, the General Counsel sends a brief

to the respondent, stating the issues involved and

recommending whether the Commission should find 

“probable cause to believe” a violation has occurred.

In addition to briefs prepared by the General Counsel, the Commission will consider respondentsʼ reply 

briefs supporting their positions.

In a continuing effort to improve the efficacy of 

the agency, the FEC held a public hearing regarding 

the Commissionʼs enforcement process on June 11, 

2003. Representatives of national party committees,

counsel for members of the regulated community

and public interest groups testified at the hearing. 

The open forum enabled the Commission to hear

testimony regarding issues that face members of the

public, counsel who practice before the Commission

and complainants and respondents who interact with

FEC staff.

Enforcement Initiatives

The Commission continued to focus its resources 

on more significant enforcement cases by continuing 

to use a prioritization system throughout 2003.
Interpreting and Enforcing the Law 11

Now in its eleventh year of operation, the Enforcement Priority System (EPS) has helped the Commission manage a substantial caseload involving

thousands of respondents and complex financial 

transactions. The FEC created and implemented the

EPS 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

Commission uses formal criteria to decide which 

cases to pursue. The following are among the criteria 

considered by the EPS: intrinsic seriousness of the

alleged violation, the apparent impact of the alleged

violation on the electoral process, the topicality of the

activity and the development of the law on the subject 

matter. The Commission continually reviews the EPS

to ensure that its resources are used to the agencyʼs 

best advantage.

MUR 4931 and MUR 5229 were among the most

significant cases concluded in 2003. MUR 4931, 

involving corporate contributions and contributions

in the name of another, resulted in civil penalties of 

$849,000—the highest cumulative civil penalty in

the history of the Commission. MUR 5229 involved 

the untimely transfer of contributions by a collecting 

agent. The cumulative civil penalty of $262,500 is the

largest ever obtained in an enforcement matter arising from the review of political committee disclosure

reports by the Commissionʼs Reports Analysis Division. These and other MURs are further discussed in 

Chapter 3 “Legal Issues.”

Chart 2-1

Conciliation Agreements by Calendar Year

Number of Agreements

Conciliation Agreements Total Civil Penalty by Calendar Amount Year

CHART 2-1

Conciliation Agreements

by Calendar Year

Number of Agreements

Total Civil Penalty Amount

Number Thousands of Dollars

120 2000

100

1500

80

60 1000

40

500

20

0 0 93 94 95 96 97 98 99 00 01 02 03

40

Thousands of Dollars

500

Chart 2-2

Median Civil Penalty Agreements

by Calendar Year

CHART 2-2

Median Civil Penalty

by Calendar Year

Dollars

20000

15000

10000

5000

0 93 94 95 96 97 98 99 00 01 02 03
12 Chapter Two Chart 2-3 Active Cases

Ratio of Active to Inactive Cases by Inactive Cases Calendar Year

CHART 2-3

Ratio of Active to Inactive Cases by Calendar Year

Active Cases

Inactive Cases

Chart 2-3

Ratio of Active to Inactive Cases by

Calendar Year

1999 2000 2001

(193 Cases) (207 Cases) (197 Cases)

2002 2003

(166 Cases) (188 Cases)

Low-Rated Cases

Respondents

Cases CHART 2-4

Cases Dismissed Under EPS

CHART 2-5

Cases Dismissed Under EPS

Pending Cases by Calendar Year

Monthly Average Number of Respondents and

Monthly Average Number of Respondents and

Stale Cases

Low-Rated Cases

Number of Cases

60

50

40

30

20

10

0

1999 2000 2001 2002 2003

Average Number of Respondents and

Enforcement Cases by Calendar Year

1000

1500

2000

2500

3000

1999 2000 2001 2002 2003

Number

1000

1500

Cases

Respondents
Interpreting and Enforcing the Law 13

Administrative Fine Program

The Administrative Fine program began in July 

2000 and was originally mandated to last only through

December 31, 2001.2 However, the program has 

continually proven to be an integral part of the Commissionʼs effort to promote timely compliance with the 

lawʼs reporting deadlines. The program allows the 

Commission to assess civil money penalties for violations involving:

• Failure to file reports on time;

• Failure to file reports at all; and 

• Failure to file 48-hour notices.

How the Program Works

Prior to the establishment of the Administrative 

Fine program, the Commission handled reporting violations under its regular enforcement procedures, as

previously described in the chapter. The Administrative Fine program has created a streamlined process

for these violations. 

Administrative fine actions originate in the Reports 

Analysis Division (RAD). RAD monitors committees 

registered with the Commission for possible filing 

violations and recommends to the Commission those 

committees that appear to be in violation. If the Commission finds “reason to believe” (RTB) that a committee has violated the applicable reporting provisions,

RAD provides a written notification to the committee 

and its treasurer containing the factual and legal basis of its finding and the amount of the proposed civil

money penalty. The respondents have 40 days from

the date of the RTB finding to either pay the designated penalty or submit to the Office of Administrative 

Review a written response. The response should

provide proper supporting documentation outlining

why the committee believes the Commissionʼs fine 

and/or penalty has been administered erroneously. 

If the committee submits a response to the Office of

Administrative Review, RAD forwards its information 

to that office for consideration by an impartial reviewing officer who was not involved in the original RTB 

recommendation.

2 As part of the FY 2004 appropriations process, Congress extended it to cover reporting periods through December 31, 2005.

The reviewing officer forwards a recommendation 

to the Commission along with all documentation after

reviewing the RTB finding and the respondentʼs written submission. A respondent may submit written 

responses to the reviewing officerʼs recommendation. 

A final determination is then made by the Commission as to whether the respondent violated the law. 

The Commission assesses a civil money penalty if

a violation has occurred and the respondent has not

demonstrated the existence of “extraordinary circumstances.”

Should a respondent fail to pay the civil money

penalty or submit a challenge within the original 40

days, the Commission will issue a final determination 

with an appropriate civil money penalty. The respondent will then have an additional 30 days after receipt

of the FECʼs final determination to pay the penalty or 

to seek judicial review.

The Commission may transfer cases to the U.S.

Department of Treasury for collection when a respondent fails to pay the monetary penalty or to seek judicial review after a final determination has been made. 

Alternatively, the Commission may decide to file suit 

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

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

Calculating Penalties

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

• Election sensitivity of the report;

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

• The amount of financial activity in the report;

• Prior civil money penalties for reporting violations.

Administrative Fines in 2003

During 2003, the Commission processed 379 cases and collected a total of $455,581 in fines. Overall, 

the FEC publicly released a total of 862 cases by the

close of 2003, with penalties totaling $1,155,877.

Throughout the year, all but one of the court cases 

challenging the Commissionʼs final administrative 

fine determination were resolved in the Commissionʼs 

favor. See Lovely v. FEC, 2004 WL 424034 (D.Mass. 

Mar 09, 2004).
14 Chapter Two

Alternative Dispute Resolution

Program

In 2003, the Alternative Dispute Resolution (ADR) 

program completed its first year as a permanent program at the FEC. The program was established in

October of 2000 as a pilot to determine the viability of

using ADR procedures to address and resolve campaign finance law violations. One primary goal of the

program is to expedite the resolution of enforcement

matters through expanded use of negotiations with

respondents. The significance of the program is reflected in the procedures adopted during the year by

the Reports Analysis and Audit Divisions that enable 

cases to be referred to ADR without being reviewed 

by the Office of General Counsel.

Not all cases are eligible for the ADR program. 

Cases may be assigned to the program after they

have been reviewed by the Office of General Counsel 

and the ADR Office to determine suitability. Cases 

will be excluded from ADR consideration under the 

following circumstances:

• The case raises issues requiring a definitive resolution for precedential value;

• The case raises issues that bear on government

policy;

• The cases effect other persons or organizations that 

are not parties to the proceeding; and/or 

• The matter would benefit from a full public record of 

the proceeding.

Additionally, internal factors help determine whether a case is appropriate for ADR and are addressed 

on a case-specific basis.

The goal of ADR negotiations is to reach an expeditious resolution through mutually agreeable terms

which promote compliance with the Act and Commission regulations. Mediation to resolve a negotiation

impasse is available by mutual agreement between

the respondent(s) and the Commission representative. Negotiations reached through direct and, when

necessary, mediated negotiations are submitted to 

the Commission for final approval. None of the cases 

have yet required mediation.

Since the inception of the program, the Office has 

processed 149 cases, of which 58 percent were accepted into ADR. The remaining cases were either 

deemed inappropriate for ADR or involved respondents who rejected the ADR option. Seventy-seven

percent of the total caseload arose from complaints

filed with the Commission. The remainder originated

as referrals from the Reports Analysis Division, Audit 

or sua sponte submissions. Cases not assigned to

ADR were returned to OGC for processing or dismissed. At the close of 2003, 86 cases assigned to

ADR during the programʼs tenure had produced 103 

separate negotiated agreements based on 78 cases.

Of that total, all except four were approved by the

Commission. A number of cases had multiple parties, 

which led to multiple agreements. The remaining 8

cases were in various stages of negotiations at the

close of the year.

The Office completed the cases in an average of

118 days from the time the case was assigned to ADR 

until the agreement was reviewed and/ or approved

by the Commission. The Office, however, aims to 

further expedite the process in order to meet its goal

of resolving cases, in the negotiation portion of the

process, within 77 days.

Audit

Over the past several years, the Audit Division has 

worked to develop a stand-alone Title 2 audit function 

and to increase the audit presence in the regulated

community. Since the mandatory audits of publicly 

funded Presidential campaigns have traditionally

required a large portion of the Divisionʼs resources, 

relatively few other audits could be accomplished.

However, with the increased use of computer technology, including electronic filing of disclosure reports, 

some streamlining of audit procedures, the Divisionʼs 

reorganization and the addition of modest staff resources, progress has been made.

In the 1998 election cycle the Division audited 35

non-Presidential committees (Authorized and NonAuthorized combined). In the 2000 election cycle—a

Presidential election cycle—the number rose to 39,

an 11 percent increase. In the 2002 election cycle the 

number will be approximately 55, a 57 percent increase over 1998 and a 41 percent increase over the

2000 election cycle.
Interpreting and Enforcing the Law 15

An increased audit presence not only contributes to

the Commissionʼs enforcement efforts, but also encourages voluntary compliance among the regulated

community. Furthermore, the broader scope of the 

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

and regulation.
17

Chapter Three

Legal Issues

The FEC is the independent regulatory agency responsible for interpreting, administering and enforcing

the Federal Election Campaign Act (FECA/the Act). 

As part of this task, the Commission promulgates

regulations implementing the Actʼs requirements and 

issues advisory opinions that apply the law to particular circumstances brought forth by requesters for official determination by the FEC. Additionally, the Commission has jurisdiction over the civil enforcement of

the Act. Throughout 2003, the Commission continued

to face legal issues and judicial challenges related to

the Bipartisan Campaign Act of 2002 (BCRA). This 

chapter sets forth major legal issues considered by

the FEC in rulemakings, advisory opinions, litigation

and enforcement actions in 2003.

BCRA Challenges 

McConnell v. FEC

Most provisions of the BCRA took effect on November 6, 2002. As soon as the BCRA was enacted in 

March 2002, however, a number of parties filed challenges to the constitutionality of several BCRA provisions. Senator Mitch McConnell and others alleged

that aspects of the BCRA violated the First, Fifth and 

Tenth Amendments and the principles of federalism. 

The National Rifle Associationʼs complaint alleged 

similar constitutional violations resulting from the

BCRAʼs limits and prohibitions on electioneering communications. These cases were consolidated around 

McConnell v. FEC and heard by a three-judge panel

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

On May 2, 2003, the District Court determined that

certain provisions were constitutional, while a number

of others were unconstitutional or nonjusticiable. The 

District Court issued a stay of its ruling on May 19,

2003, while the case received an expedited appellate

review by the Supreme Court.

On December 10, 2003, the Supreme Court issued

a ruling upholding the two principal features of the

BCRA: the control of soft money and the regulation of

electioneering communications. The following provisions were upheld by the Court:

• National party committeesʼ use of soft money;

• State and local party committeesʼ use of soft money;

• Party solicitations for and donations to 501(c) and

527 organizations;

• Federal candidatesʼ and officeholdersʼ solicitation, 

direction, transfer and use of soft money;

• State and local candidates and officeholdersʼ use of 

soft money for public communications that promote

or oppose federal candidates; and 

• Electioneering communications.

The Court found unconstitutional the BCRAʼs ban 

on contributions from minors and the so-called “choice 

provision,” which provides that a party committee cannot make both coordinated and independent expenditures on behalf of a candidate after that candidateʼs 

general election nomination.1 The Supreme Courtʼs 

decision affirmed in part and reversed in part the U.S. 

District Court for the District of Columbiaʼs decision in 

this matter. For additional information, please consult

the FECʼs 2004 edition of Court Case Abstracts.

Soft Money

The BCRA prohibits national party committees 

and federal candidates and officeholders from raising 

funds not subject to the prohibitions, limits and reporting requirements of the Act, i.e. nonfederal funds or 

“soft money.” Provisions of the BCRA also address 

the activities of state and local party committees, significantly expanding the Actʼs treatment of these committeesʼ activities. For example, the rules provide a

new definition of “federal election activity” and require 

parties to finance these activities using more federally

permissible funds. In addition, the rules provide for a

special category of funds, called “Levin funds,” that

may be used, usually in allocation with federal funds,

by state and local party committees for certain federal

election activities. These provisions were among

those challenged in litigation, but ultimately upheld

by the Supreme Court. In addition to judicial review

of these rules, the Commission was asked to issue a 

1 The Court additionally ruled on a number of other challenges from the plaintiffs, including finding their challenge to 

the so-called Millionairesʼ Amendment to be nonjusticiable.
18 Chapter Three

number of advisory opinions regarding the application

of the new soft money provisions.

Shays and Meehan v. FEC

On October 8, 2002, Representatives Christopher

Shays and Martin Meehan filed a complaint in the 

U.S. District Court for the District of Columbia challenging the Commissionʼs “soft money” regulations. 

They amended their complaint on January 21, 2003,

adding challenges to the “coordination” and “electioneering communications” regulations. The complaint

charges that the FEC regulations “contravene the

language” of the BCRA and will “frustrate the purpose 

and intent of the BCRA by allowing soft money to continue to flow into federal elections and into the federal 

political process.” The plaintiffs ask that the court invalidate the FEC regulations on the grounds that they

are arbitrary and capricious, an abuse of discretion, in

excess of the FECʼs statutory jurisdiction or authority 

and otherwise not in accordance with law.

The plaintiffs contend that these regulations contravene the BCRA in terms of the:

• Creation of so-called “sham party entities”;

• Definitions of “solicit,” “direct,” “agent” and “federal

election activity”;

• Payment of solicitation costs for raising “Levin

funds”;

• Treatment of state party office building funds;

• Exemption for certain charitable corporations; and 

• Description of coordination.

This case was pending in the U.S. District Court for

the District of Columbia at the yearʼs end.

Advisory Opinions involving Federal Candidates

and Officeholders

During 2003, the Commission issued a number of

advisory opinions regarding the solicitation of nonfederal funds by federal candidates and officeholders 

and agents acting on their behalf. Generally, these 

opinions permitted the aforementioned individuals to

attend and speak at events where nonfederal funds

were raised. In some cases, however, the candidates 

or officeholders were required to issue a disclaimer

indicating that they were not soliciting any funds from

sources or in amounts that would be impermissible

under federal law.

Solicitation for Nonfederal Elections 

In AO 2003-3, for example, the Commission determined that Representative Eric Cantor could solicit

donations to state or local candidates as long as the

funds solicited were within the limitations and prohibitions of the Act. To ensure compliance, the solicitations would need to include language informing potential donors that Representative Cantor would only be

soliciting funds within the aforementioned limitations

and prohibitions.

In AO 2003-12, the Commission went a step further, concluding that a state referendum committee 

established by Representative Jeff Flake could only 

raise and spend funds within the limits and prohibitions of the Act. See 2 U.S.C.§§441(e)(1) and 

441a(a)(1), (2) and (3). Based on Representative

Flakeʼs connection to the committee, its work concerning the ballot initiative and its voter registration,

get-out-the-vote and advertising that clearly identifies 

federal candidates would all be considered in connection with an election. 

AO 2003-10, dealt with questions concerning

fundraising by a candidateʼs agent. The Commission 

determined that Rory Reid, a Commissioner of Clark

County, Nevada, and son of U.S. Senator Harry Reid, 

could raise nonfederal funds for the Nevada State 

Democratic Party without being considered an agent

of Senator Reid, even if he had acted and continued 

to act as the Senatorʼs fundraising agent in other circumstances. Commissioner Reidʼs fundraising activities would only be attributed to a federal candidate

or officeholder if he is acting on the actual authority, 

express or implied, of that candidate or officeholder. 

Federal Officeholder’s Appearance in Nonfederal 

Candidate’s Ad

Under the BCRA, candidates for state or local 

office must use only federal funds to pay for a public communication that refers to a clearly identified 

federal candidate and promotes, supports, attacks

or opposes any candidate for federal office. 11 CFR 

300.71. Nonfederal funds (i.e., funds that do not comply with the limits and prohibitions of the Act) may not 

be used to pay for such an advertisement. 2 U.S.C.

§441i(f). A state or local candidate may spend nonfederal funds for a public communication in connection 
Legal Issues 19

with an election for state or local office that refers to a 

federal candidate so long as the communication does

not promote, support, attack or oppose any candidate

for federal office. 11 CFR 300.72.

In AO 2003-25, the Commission concluded that 

U.S. Senator Evan Bayhʼs appearance in a television 

advertisement for Jonathan Weinzapfel, a mayoral 

candidate in the city of Evansville, Indiana, did not

promote or support Senator Bayh; accordingly, the 

Weinzapfel Committee could use nonfederal funds to 

pay for the advertisement. In addition, the Commission concluded that the ad was not an in-kind contribution because it did not meet any of the content

standards of the Commissionʼs coordination regulations (the communication was not an electioneering

communication, it did not contain express advocacy

related to the election or defeat of a federal candidate, 

it was not the republication of Senator Bayhʼs campaign materials, and it did not air less that 120 days

before an election where he appeared on the ballot).

11 CFR 109.21.

Solicitation for Membership Organizations

In addition to addressing whether federal candidates and officeholders may solicit funds in connection with nonfederal elections, the Commission also 

addressed whether they may solicit funds for nonprofit 

membership organizations. In AO 2003-5, the Commission determined that a federal candidate or officeholder may perform limited activity for a membership

organization. The National Association of Home Builders of the United States (NAHB), and its separate

segregated fund (SSF), BUILD-PAC, hold events in 

conjunction with NAHBʼs annual convention that raise 

money for BUILD-PAC and raise funds and awareness for NAHBʼs “Voter Mobilization” program. According to the opinion issued by the Commission, the

federal officeholder or candidate may be listed as a

featured speaker, attend the organizationʼs meetings 

and the membersʼ sporting event and make specific 

solicitations for the Voter Mobilization program.2

Solicitation for Legal Expenses

In AO 2003-15, the Commission determined that 

donations to a legal expense trust fund established by

U.S. Representative Denise Majette for the sole purpose of defending against a lawsuit challenging Georgiaʼs open primary election system are not subject to 

the limits, restrictions and reporting requirements of

the Act, because the donations are not in connection 

with a federal election. The Commission found no 

indication in the legislative history of the BCRA that 

Congress intended the new fundraising restrictions

to change longstanding interpretations found in Congressional policy and Commission advisory opinions

concerning legal defense funds. In fact, after it enacted the BCRA, the U.S. House of Representatives

adopted a House Rule that permits Members to accept donations for their legal expense funds subject to

certain restrictions. H.R. Res. 5, 108th Cong. (2003). 

Solicitation for Scholarship Fund

In AO 2003-20, the Commission concluded that 

U.S. Representative Silvestre Reyes could solicit donations for a scholarship fund established in his name

by the Hispanic College Fund, Inc., a nonprofit corporation. The amounts raised by Representative Reyes

on behalf of the scholarship fund will not be used in

connection with a federal or nonfederal election and, 

thus, are not subject to the limits, prohibitions and

reporting requirements of the Act. 

Advisory Opinions Involving National Party

Committees

On November 6, 2002, provisions of the BCRA

took effect that banned national party committees 

2 The Commission determined that a plan to invite the

Secretary of Housing and Urban Development to an event

is not subject to the limitations of the BCRA or the Act, because the Secretary is not a federal candidate or elected

officeholder and, as such, is not subject to the Actʼs provisions regarding participation at events and solicitations. 11 

CFR 100.3 and 100.4.
20 Chapter Three

from soliciting, receiving, directing, transferring or

spending nonfederal funds. 2 U.S.C. §441i(a) and

11 CFR 300.10(a). Prior to the BCRA, national party

committees could raise and spend nonfederal funds

using separate nonfederal accounts. During 2003, the

FEC issued the following advisory opinions concerning the soft money prohibition and national party committees.

Lease of Mailing List and Sale of Advertising 

Space and Trademark License

In AO 2002-14, the Commission concluded that 

the national committee of the Libertarian Party of the

United States, the Libertarian National Committee, 

Inc. (LNC), could, under the circumstances presented,

rent its mailing list at the usual and normal charge in 

a bona fide armʼs length transaction without the rental 

payments resulting in a contribution or donation to the

LNC. As a result, rental payments could come from 

sources otherwise prohibited from contributing to a

national party committee and in amounts in excess of

the contribution limits. Receipts from rental payments

would be considered federal funds usable by the LNC

for any purposes permitted under the Act and Commission regulations. Likewise, the LNC may exchange

its mailing lists, or portions of the lists, of equal value

with any outside organization, provided that the lists

or list portions that are exchanged are of equal value.

(See discussion of AO 2003-19 below.)

The Commission also considered the sale of party

trademarks and advertising space in the partyʼs publication. Unlike with mailing lists, it is difficult, if not impossible, to determine the fare market value for advertising space in the Libertarian Party News and for the

licensing of the Libertarian Party trademarks. The sale 

of advertising space in a political committeeʼs newsletter is also inherently susceptible to use for political

fundraising rather than for commercial purposes. As a 

result, the Commission concluded that payments for

either advertising space or trademark licensing would

be treated as a contribution in its full amount and subject to the Actʼs limits and prohibitions.

Affinity Credit Card Program

The Commission concluded in AO 2003-16 that 

Providian National Bank (Providian) may offer an affinity credit card program (the Affinity Program) giving 

credit card holders the option of making political contributions to a national party committee using rewards

and rebates that cardholders have earned through

the use of their credit cards. The proposed program

will not result in any prohibited contributions under the

Act. 

Unlike previous proposed credit card arrangements

that were not approved by the Commission, Providianʼs Affinity Program included a rebate credit card and 

bonus feature. Cardholders may choose to keep for

themselves the rebates and bonuses they accumulate

by using their card through Providian or to forward

them to the national party committee. 

National Party Committee’s Sale of Office 

Equipment

According to AO 2003-19, the Democratic Congressional Campaign Committee (DCCC) may sell its

used office equipment and furniture to corporations,

labor organizations and other sources prohibited from

contributing to a national party committee.

In the past, the Commission has used certain criteria to determine whether a market transaction by a

national party committee would constitute a prohibited

receipt of funds. See AO 2002-14. Applying a similar 

analysis to this case, the DCCC may sell its office 

equipment and furniture at a price that does not exceed the usual and normal charge because:

• The goods were purchased for everyday business

and not as a means of raising funds;

• The goods have an ascertainable market value; and

• It is an isolated disposal of unwanted and depreciated committee assets, and thus is not inherently

susceptible to use for political fundraising.

In addition, to ensure that the assets are sold for 

the usual and normal charge, the sale may not be

advertised in any contribution solicitation.

Payments received through these transactions are

not subject to the Actʼs contribution limits and may 

come from otherwise prohibited sources. The payments will be considered federal funds and may be

used by the DCCC for federal election purposes.
Legal Issues 21

Use of Campaign Funds

The Bipartisan Campaign Reform Act deleted the 

phrase “for any other lawful purpose” from the list

of permissible uses of campaign funds at 2 U.S.C.

§439a, and the Commission subsequently removed

that phrase from its regulations. Therefore, in addition 

to paying expenses in connection with the campaign

for federal office, campaign funds may be used only

for non-campaign purposes included in an exhaustive

list found at 11 CFR 113.2 (a), (b), and (c): ordinary

and necessary expenses incurred in connection with

the duties of a federal officeholder, donations to a 

charitable organization and transfers to a national,

state or local committee of a political party committee.

In 2003, the Commission issued four advisory opinions regarding the use of campaign funds.

Advisory Opinions

In AO 2003-17, the Commission determined that 

James W. Treffinger, a former Senate candidate facing criminal indictments, may use campaign funds to

pay for the portion of legal fees that relate to his status as a candidate for federal office. He was indicted 

in the District of New Jersey on 20 counts of criminal

activity relating primarily to alleged schemes to defraud the Essex County government. Mr. Treffinger 

asked the Commission if his excess campaign funds

could be used to pay for his legal defense.

The Commission determined that nine of the 20 

criminal counts in the indictment against Mr. Treffinger 

related directly to his federal campaign. Accordingly, 

Mr. Treffinger may pay 45 percent (9/20) of his legal 

expenses with his campaign funds.

Treffingerʼs committee must maintain the appropriate documents of any disbursements made to pay

these legal fees, and must report all such disbursements with the FEC as operating expenditures, with

the purpose noted.

In AO 2003-18, the Commission addressed the 

issue of transferring General Election funds to a

charitable organization. Because Mr. Smith was not 

a candidate in the general election, the committee did

not have the option of donating the funds from general 

election contributions to the American Patriot Foundation, a charitable organization. 

In AO 2003-26, the Commission determined that 

a Senate campaign committee may not use its campaign funds to refund improper contributions received

by the candidateʼs former state campaign committee. 

The facts before the Commission in this case did not 

support a conclusion that a refund of the improper

state contributions would be in connection with either 

of Senator Voinovichʼs campaigns for federal office; 

nor would the refund comply with any of the other

three permissible non-campaign uses of campaign

funds.

In AO 2003-30, the Commission concluded that the 

Fitzgerald for Senate Committee could use its remaining cash-on-hand for any of the permissible uses of

campaign funds listed in FEC regulations, including

the repayment of personal loans made by the candidate during the 1998 elections. Recently enacted

regulations that limit campaignsʼ ability to repay certain candidate loans do not apply to these repayments

because the loans in question pre-date these rules.

Leadership PACs

The Act does not specifically address or define 

“leadership PACs.” Generally speaking, though, leadership PACs are formed by federal officeholders and/

or federal candidates. The committee raises funds 

in order to make contributions to other federal candidates to gain support when the officeholder seeks 

a leadership position in Congress and subsidize the

officeholderʼs travel when he or she campaigns for 

other federal candidates. Additionally, these committees may be used to make contributions to party

committees, including state party committees in key

states, or donations to candidates for state or local 

office. 

The Commission first addressed leadership PACs 

in a 1978 advisory opinion where it concluded that a

political action committee formed in part by a Congressman was not considered an authorized committee of that Congressman as long as he did not

authorize the committee in writing. See AO 1978-

12. As a result, contributors to the leadership PAC 

were not considered to make contributions to the 

Congressmanʼs campaign. In the advisory opinion, 
22 Chapter Three

the Commission further noted that—assuming that the

committee was not affiliated with the Congressmanʼs 

principal campaign committee—persons could contribute up to $5,000 per year to the leadership PAC, 

which is the contribution limit for a multicandidate 

PAC. The Commission has continued to hold the 

policy that committees formed or used by a candidate

or officeholder to further his or her campaign are affiliated; those formed or used for other purposes are not.

The BCRA places new limits on the amounts and 

types of funds that may be solicited, received, directed, transferred or spent by federal candidates and

officeholders, their agents and entities directly or indirectly established, financed, maintained or controlled 

by, or acting on behalf of, the candidate or officeholder. These limits apply to both federal and nonfederal

elections. 2 U.S.C. §441i(e)(1) and 11 CFR 300.60 

and 300.61. In the new “soft money” rules, the Commission acknowledged that the BCRAʼs limitations 

apply to leadership PACs. In 2003, the Commission 

completed a rulemaking addressing concerns about

the BCRAʼs effect on leadership PACs. 

Regulations

On November 20, 2003, the Commission approved

final rules to address the relationship between a federal candidateʼs authorized committee and leadership 

PACs. The final rules state that authorized committees and leadership PACs will not be considered affiliated. As a result, certain disbursements by a leadership PAC will be treated as in-kind contributions to the 

candidate associated with it. 

New 11 CFR 100.5(g)(5) clarifies the relationship 

between an authorized committee and a leadership

PAC by removing the possibility that a candidateʼs authorized committee can be affiliated with an entity that 

is not another authorized committee, even if the candidate established, financed, maintained or controlled 

that entity.3 Thus, a leadership PAC that provides 

3 This decision does not affect affiliation between an authorized committee and a joint fundraising committee under

2 U.S.C. §432(e)(3)(ii) and 11 CFR 102.13(c), nor does it 

affect the ability of a national party committee to be designated as the principal campaign committee for the partyʼs 

Presidential nominee under 2 U.S.C. §432(e)(3)(i) and 11 

CFR 102.12(c)(2).

funds, goods or services to any authorized committee 

will make a contribution to that committee subject to

the Actʼs contribution limits.4

The new regulation also applies to entities that are

not political committees. Thus, if a federal officeholder 

or candidate established an entity that was not a political committee under the Act, such as a state ballot 

initiative committee, the Commission would not examine the transactions between the federal candidate/officeholder and the ballot initiative committee to determine whether that committee was affiliated with the 

candidate/officeholderʼs authorized campaign committee. See AO 2003-12. Instead, the Commission would 

consider whether the ballot initiative committee made 

in-kind contributions to the federal candidate/officeholder.

Under the Commissionʼs previous reporting regulation at 11 CFR 102.2(B)(1)(i), a principal campaign 

committee was required to disclose the names and

addresses of any unauthorized committees with which

it was affiliated. Because the new rule eliminates the 

possibility of such a relationship, the Commission has

revised this regulation to require only that the names

and addresses of affiliated authorized committees be 

disclosed.

Corporate Contributions

The Act prohibits corporations and labor organizations from using their treasury funds to make

contributions or expenditures in connection with

federal elections. 2 U.S.C. §441b. During 2003, the

Supreme Court ruled on the constitutionality of that

ban and related provisions of FEC regulations. The 

case involved a so-called “MCFL” organization, which

qualifies for a constitutionally mandated exception 

4 The Commission additionally noted that one complication in any scheme to make authorized committees and

leadership PACs affiliated is that these types of committees 

are subject to different contribution limits and, thus, requiring them to abide by a singe contribution limit would mean

choosing a limitation that was is not intended for one of the

committees. Consequently, it is logical to view an authorized 

committee and a leadership PAC as separate committees.
 

 

Legal Issues 23

from the Actʼs prohibition on corporate expenditures in 

connection with a federal election. See FEC v. Massachusetts Citizens for Life, Inc., (MCFL) 479 U.S.

238 (1986).5 This case and an enforcement matter 

involving prohibited corporate contributions, are described below.

Christine Beaumont, et al. v FEC

North Carolina Right to Life, Inc., a nonprofit advocacy corporation, three of its officers and Christine

Beaumont, a North Carolina voter (NCRL), filed suit 

against the FEC asking the court to declare 441b and

its implementing regulations overly broad and unconstitutional and issue a permanent injunction barring

the FEC from enforcing the Act and these regulations 

against the plaintiffs.

On January 24, 2001, the U.S. District Court for the

Eastern District of North Carolina, Northern Division, 

permanently enjoined the Commission from relying

on, enforcing or prosecuting against the plaintiffs violations of 441b. The Commission appealed the district court decision, and on January 25, 2002, the U.S.

Court of Appeals for the 4th Circuit found that a complete ban on corporate contributions and expenditures

in connection with federal elections, with an exception to the corporate expenditure ban “so narrow that

NCRL does not fit into it,” burdened the plaintiffsʼ First 

Amendment speech and association interests.

The Solicitor General appealed the case to the

Supreme Court solely on the issue of the constitutionality of the ban against contributions from nonprofit 

5

 Under the Commission regulations a corporation is

considered a “qualified nonprofit corporation” if it meets the 

following criteria: its only express purpose is the promotion

of political ideas; it cannot engage in business activities; it

has no shareholders and no persons who are offered and 

receive any benefit that is a disincentive to disassociate 

from the corporation on the basis of the corporationʼs position on a political issue; it was not established by a business

corporation and does not directly or indirectly accept donations or anything of value from business corporations; and

it is described in the Internal Revenue Code at 26 U.S.C. 

§501(c)(4). 11 CFR 114.10(c).

advocacy corporations.6 The Court agreed to hear

the case because on this issue the U.S. Court of Appeals for the 4th Circuit was in conflict with the U.S. 

Court of Appeals for the 6th Circuit. On June 16, 2003, 

the U.S. Supreme Court, overruling the U.S. Court of

Appeals for the 4th Circuit, held that the prohibition on

contributions by corporations is constitutional as applied to nonprofit MCFL-type advocacy corporations, 

such as North Carolina Right to Life, Inc.

According to the Court, ruling in favor of NCRL

would mean recasting its understanding of the “risks

of harm” of corporate political contributions, their

“expressive significance” and the deference owed 

to Congress on how to treat them. Additionally, the 

Court pointed out that recognizing that the “degree of

scrutiny runs on the nature of the activity regulated is

the only practical way to square two leading cases,” 

National Right to Work and MCFL. Having found that

the prohibition on corporate contributions is constitutional as applied to NCRL, the Supreme Court ordered that the judgment of the U.S. Court of Appeals 

for the 4th Circuit in Beaumont v. FEC be reversed.

Enforcement

In MUR 4931, the Commission entered into conciliation agreements with Audiovox Corporation (Audiovox), its Executive Vice President, six of its executives 

and several other individuals and Audiovox distributors, resulting in civil penalties of $849,000—the highest cumulative civil penalty in the history of the Commission. This matter was referred to the Commission 

by the U.S. Department of Justice on March 2, 1999.

The conciliation agreements settle violations of the

Act resulting from the reimbursement of individualsʼ

contributions to federal candidates, both by Audiovox 

and its subsidiaries, and personally by the Executive

Vice President. The agreements provide, among other 

penalties, that Audiovox and six of its executives will 

6 The Court noted that as a result it had no occasion to 

address whether NCRL was entitled to an MCFL-type exception to the ban on corporate independent expenditures.

The Court also quoted from its decision in MCFL noting

that MCFLʼs formal policy against accepting donations from 

corporations was “essential to our holding.
24 Chapter Three

pay $620,000 and the Executive Vice President will 

pay $130,000 from his personal funds.

Seven additional respondents, including three of

Audiovoxʼs distributors, acknowledged violations of 

the Actʼs prohibitions on corporate contributions and 

contributions in the name of another and agreed to

pay a total of $99,000 in civil penalties. Additionally, 

in all the conciliation agreements, the respondents

agree not to commit further violations.

Trade Associations

A trade association that has a separate segregated 

fund (SSF) may solicit contributions from its restricted

classes in a variety of ways. Some of the most common methods include: oral solicitations, solicitations 

by mail, solicitations in internal publications, solicitations at conventions and solicitations through the internet. In addition to soliciting its own restricted class,

a trade association or its SSF may get permission

from a member corporation to solicit that memberʼs 

restricted class under certain circumstances for contributions to the associationʼs SSF. In 2003, the Commission received a rulemaking petition and issued

an advisory opinion related to the ability of corporate

members of trade associations to implement payroll

deduction plans to collect SSF contributions.

Regulations

On September 3, 2003, the Commission received a

Petition for Rulemaking asking it to amend its rules to

allow corporate members of trade associations to use

payroll deduction to facilitate voluntary contributions

to the associationʼs separate segregated fund.7

Under Commission regulations, a trade association

may use any method to solicit voluntary contributions

or facilitate the making of voluntary contributions to its

SSF, except that a member corporation may not use 

a payroll deduction or check-off system for executive 

and administrative personnel contributing to the associationʼs SSF. See 11 CFR 114.8(e)(3). However, 

corporate members may manually facilitate the mak7 The rulemaking petition was submitted by Americaʼs 

Community Bankers (ACB), a trade association representing community banks, and its SSF, COMPAC.

ing of contributions to the trade associationʼs SSF by 

collecting and forwarding checks from their restricted

classes in accordance with AO 2003-27. 

Advisory Opinion

In AO 2003-22, the Commission determined that 

executives of member corporations may collect and

forward contribution checks to the SSF of the American Bankers Association (ABA), a trade association 

for the banking industry, so long as a payroll deduction or check-off system is not used. The member 

corporations must first give ABA permission to solicit 

their restricted class. 

The Commission regulations appear to contemplate that executives of member corporations may

collect and forward contribution checks for the trade 

association SSF by means other than a payroll deduction or check-off system. Thus, executives of 

ABA member corporations may collect and forward 

contributions to ABAʼs SSF by using the corporationʼs 

inter-office mail system, by hand collection, by providing envelopes and postage for contributors to send

their checks to ABAʼs SSF or by other similar means, 

where those corporations and the associationʼs SSF 

have complied with 11 CFR 114.5(a) and 114.8(b), (c) 

and (d).

Sale or Use of Contributor 

Information

The Act prohibits anyone from selling or using 

the names and addresses of individual contributors, 

copied from FEC reports for the purpose of soliciting

contributions for any commercial purpose. 2 U.S.C. 

§438 (a)(4). This “sale or use” restriction, however, 

does not apply to the names and addresses of political committees that are listed in reports filed with the 

Commission. Committees are allowed to “salt” their 

reports with up to ten fictitious names to detect impermissible uses of individual contributor information by

other organizations. 11 CFR 104.3 (e). In 2003, the 

Commission issued an advisory opinion regarding the

sale and use of contributor information for communication purposes. 
Legal Issues 25

Advisory Opinion

In AO 2003-24, the Commission concluded that 

the National Center for Tobacco-Free Kids (NCTFK) 

may not use contributor information contained in the

disclosure reports filed with the Commission to communicate with the public.

NCTFK wished to obtain from FEC disclosure 

reports the names of individuals who make contributions to political committees in order to send NCTFK

information to those individuals via direct mail. The 

proposed communications were to take various forms,

including: providing information on issues; urging

recipients to contact a federal officeholder about the 

subject of the communication; and allowing recipients to indicate their interest in receiving additional

information which would result in their receipt of communications that might include a solicitation for funds.

(NCTFK indicated that none of the communications

sent to such individuals would expressly advocate the

election or defeat of any candidate, nor would such

communications constitute electioneering communications as defined in 2 U.S.C. §434(f)(3).)

The Commission reads section 438(a)(4) to be

a broad protective measure intended to guard the

privacy of the contributors who are named in FEC 

reports. Although not all of the proposed communications were for fundraising purposes, they presented

the possibility of repetitive and intrusive communications to contributors critical of the tobacco industry. 

The Commission concluded that the proposed activity

would be impermissible under section 438(a)(4).8

Campaign Travel

In the past, when a candidate or other campaign

passenger used an airplane owned by a corporation

or other organization that was not in the business of 

providing commercial air travel, the candidateʼs authorized committee was required to reimburse the service 

provider at either the first-class airfare or the normal 

charter rate, depending on whether a destination city 

was served by regularly scheduled commercial air

service. 11 CFR 114.9(e)(1). The FEC completed a

rulemaking in 2003 addressing the issue of campaign

travel by candidates and other political committees. 

Regulations

On December 4, 2003, the Commission approved

new and revised rules governing the rates and timing

for payment for travel via non-commercial means of

transportation, such as a corporate jet, on behalf of

political committees and candidates. The new rules 

establish a uniform valuation scheme for campaign

travel that does not depend on whether the service

provider is a corporation, labor organization, individual, partnership, limited liability company or other entity. 

The final rules apply to federal candidates, including

publicly funded Presidential candidates, and other

individuals traveling on behalf of candidates, party

committees and other political committees where the

travel is in connection with a federal election. 

For air travel, the regulations provide three valuation methods that apply in different situations, requiring: 

• The lowest unrestricted and non-discounted firstclass airfare available for the dates traveled, or within seven calendar days, for travel between two cities

with regularly scheduled first-class airline service;9

• The lowest unrestricted and non-discounted coach 

airfare available for the dates traveled, or within 

seven calendar days, for travel between a city

served by regularly scheduled coach airline service

but not regularly scheduled first-class airline service 

and a city served by regularly scheduled coach service, whether or not the latter city also has regularly

scheduled first-class services; and 

• The charter rate for a comparable commercial airplane of sufficient size to accommodate all of the

campaign travelers, including members of the news

media, and security personnel for travel between two 

9

 See Advisory Opinion 1999-13 for a discussion of when 

ice. In addition, a

ermits the use of a 

ernment airplane to

a city is served by first-class airline serv

special provision in 11 CFR 100.93(e) p

first-class airfare rate for travel on a gov

or from a military base.

8

 In addition, the Commission recognizes the legitimate 

interests of the owners of the mailing lists used to solicit the 

political contributions that resulted in the disclosure of the 

individualsʼ information in the FEC reports.
 

26 Chapter Three

cities not served by regularly scheduled first-class 

or coach airline service, or between such a city and

a different city with regularly scheduled first-class or 

coach commercial airline service. 

The new rules do not require a campaign traveler

to pay in advance of travel, but they establish a strict

deadline of payment within seven calendar days of

the departure of the flight.

For other means of travel not operated for commercial passenger service, such as limousines, other

automobiles, trains, helicopters and buses, a political

committee must pay the service provider an amount

equal to the normal and usual fare or rental charge for

a comparable commercial conveyance that is capable

of accommodating the same number of campaign

travelers, including any members of the news media,

and security personnel. Payment for travel must be

made 30 calendar days from the receipt of the invoice, but no more than 60 calendar days following

the date the travel commenced. 

Earmarking 

An earmarked contribution is one which the contributor directs (either orally or in writing) to a clearly

identified candidate or his or her authorized committee through an intermediary or conduit. The conduit 

or intermediary may be an unregistered entity, such 

as an individual or group, or a registered political

committee with regular reporting obligations. 11 CFR 

110.6 (b). Earmarking contributions is sometimes referred to as “bundling” contributions because, in many

cases, the conduit receives several contributions that 

are earmarked for a candidate and forwards them 

together. In previous advisory opinions, the Commission has examined earmarking proposals involving

the collecting and forwarding of contributions to designated federal candidates. See AOs 1996-18, 1996-1, 

1995-15, 1988-16, and 1986-4. In 2003, the Commission issued an advisory opinion regarding the earmarking of contributions for a presumptive nominee.

Advisory Opinion

In AO 2003-23, the FEC determined that Women 

Engaged in Leadership, Education and Action in Democracy (“WE LEAD”) may collect and forward earmarked contributions to the presumptive Democratic

Presidential nominee so long as certain conditions are

met regarding reporting and transmittal of funds.

The Commission determined that WE LEAD may

collect and forward contributions for an undesignated

candidate since the candidate is identifiable as to a 

specific office, party affiliation and election cycle.10

Additionally, WE LEAD described a clear method 

whereby the recipient will be identified and the committee will not exercise any direction or control over

who will be the recipient campaign or party committee. Furthermore, the Commission determined that 

the contributions and a transmittal report must be

forwarded within ten days after the candidate is identified.11

If the presumptive nominee is not determined

within seven days of the Democratic National Convention, WE LEAD will forward the contributions to the 

DNC. Neither the Federal Election Campaign Act nor 

Commission regulations address contributions earmarked for committees other than campaigns, but the

Commission does not hold that it is forbidden. 11 CFR 

110.6 and AOs 1981-57 and 1983-18.

If the contributions are forwarded to the DNC, then 

the amount of time allowable before forwarding varies

according to the amount of the contribution. Contributions of $50 or less must be forwarded within 30 days

of receipt. Contributions over $50 must be forwarded

within 10 days of receipt. 11 CFR 102.8(b)(1)–(2). 

Requirements regarding solicitation and reporting of

earmarked contributions and handling of excessive

contributions also apply to contributions forwarded to

the DNC. 

The Commission also addressed the issue of solicitation costs. According to the opinion, if the solicita10 The Commission has issued similar opinions regarding

situations in which there is no definite candidate. Earmarking proposals have been acceptable under these circumstances when the candidate is identifiable by a specific 

office, party affiliation and election cycle. See AOs 1977-16 

and 1982-23.

11 Generally, earmarked contributions must be forwarded 

within ten days of receipt. 11 CFR 102.8. However, that is 

not possible in this instance since the recipient is unknown. 
Legal Issues 27

tion is coordinated with the recipient campaign or its

agents, then the direct cost of the solicitation will be

considered an in-kind contribution. If the solicitation 

is not coordinated, however, the costs will be considered an independent expenditure. 11 CFR 100.16. 

In each instance, the communication must carry the

appropriate disclaimers. 11 CFR 110.11.

FEC v. Toledano

On November 7, 2002, the U.S. Court of Appeals 

for the Ninth Circuit affirmed the decision of the U.S. 

District Court for the Central District of California 

granting the Commission summary judgment in this

case and imposing a $7,500 fine against James Toledano. The appeals court also ordered Mr. Toledano to 

pay the Commissionʼs attorneyʼs fees on this appeal 

as a sanction for his “bad-faith conduct and abuse of 

the judicial process.”

The appeals court found that Mr. Toledano violated 

2 U.S.C. §432(b), which requires persons who receive

contributions in excess of $50 to forward these contributions to the committeeʼs treasurer within 10 days 

after receiving them. In 1996 Mr. Toledano, who was 

then the chairman of the Orange County Democratic

Party (the Party), received a $10,000 contribution

check made out to the Party, which he used to print 

and mail pamphlets supporting a Congressional candidate. Mr. Toledano did not forward the contribution 

to the committee treasurer within 10 days or even

inform him of it.

On appeal, Mr. Toledano argued, among other 

things, that his actions did not violate 2 U.S.C.

§432(b) given that he “had de facto authority to act

as treasurer” because he was convinced that the real 

treasurer was “incompetent and failed to discharge his 

duties responsibly.” The court found that Mr. Toledano 

was not a designated agent of the treasurer and could

not exercise the treasurerʼs authority under the statute 

or Commission regulations. The court further concluded that “to recognize unauthorized ʻde facto agentsʼ of 

the treasurer and thus open up multiple points of entry

and exit through which campaign funds may flow is to 

create predictable confusion and unravel the whole

statutory scheme.” The court concluded that by failing 

to forward the contribution to the Partyʼs treasurer, Mr. 

Toledano prevented the contribution, which turned out 

to be excessive, from being scrutinized by the Partyʼs 

treasurer for its legality.

The court affirmed all aspects of the district courtʼs 

order granting the Commission summary judgment

and imposing a $7,500 fine. The court also referred 

the case to the Appellate Commissioner for a determination of the Commissionʼs attorneyʼs fees and 

related expenses in defending this case on appeal. 

Enforcement 

During 2003, the Commission defended in court

its disclosure policy regarding closed Matters Under

Review (MURs), held hearings and testified before 

Congress concerning its enforcement procedures

and issued a policy statement regarding deposition

transcripts in nonpublic investigations. Late in the 

year, the agency issued an interim policy regarding 

the release of closed enforcement files and unveiled 

a new system to improve public access to those files. 

In the midst of all this activity, the agency also closed 

a number of significant MURs, a couple of which are 

summarized below.

AFL-CIO and DNC Services Corp./DNC v. FEC

On June 17, 1997, the Commission found reason 

to believe that the plaintiffs had violated the Act during the 1995-96 election cycle (MURs 4291, et al.).

At the conclusion of its investigation, the Commission

voted to take no further action on MURs 4291, et al., 

and to close the files. In keeping with its long-standing

practice of disclosing the investigatory record once

a MUR is closed, the Commission planned to make

public a portion of the investigatory file. The plaintiffs 

claimed that public disclosure of the files would cause 

irreparable injury by revealing confidential information 

and by chilling the plaintiffsʼ future efforts to engage 

in political activities. The plaintiffs asked the Commission not to make the documents public; however, the 

Commission denied their requests on the grounds that 

the Commissionʼs regulations under the Act and the 

Freedom of Information Act (FOIA) required disclosure of the MUR files.

The plaintiffs filed suit in district court to challenge 

the Commissionʼs determination. The district court 

concluded that the plain language of the Act barred 
28 Chapter Three

the Commission from publicizing investigative materials and, thus, that the Commissionʼs interpretation 

of the statute ran counter to Congressional intent. 2

U.S.C. §437g(a)(12)(A). The court found that the Actʼs 

provision requiring that MUR determinations be made

public was a limited exception to the Actʼs confidentiality provision, not a directive to end the protection of

that provision.

On June 20, 2003, the U.S. Court of Appeals for 

the District of Columbia Circuit upheld the U.S. District Court for the District of Columbiaʼs decision in 

this case, but on different grounds. The appeals court 

found that the FECʼs practice of disclosing documents 

obtained during an investigation was based on a regulation that, “while not contrary to the plain language

of the statute, is nevertheless impermissible because

it fails to account for the substantial First Amendment 

interests implicated in releasing political groupsʼ strategic documents and other internal materials.”

Procedures and Disclosure Policy

As the MUR disclosure litigation progressed, the

Commission launched a broad review of its enforcement procedures. On June 11, 2003, the Commission 

conducted a public hearing to receive comments on

its enforcement practices and procedures. The comments focused on the agencyʼs procedures for:

• Designating additional respondents in a complaint;

• Advising witnesses about the confidentiality requirements of the Act (2 U.S.C. §437g(a)(12));

• Considering motions from complainantsʼ and respondentsʼ attorneys;

• Providing deposition transcripts and documents to

respondents; 

• Granting respondents extensions of time to respond

to the probable cause brief; 

• Allowing respondents to appear before the Commission;

• Releasing documents from enforcement matters in

proximity to an election;

• Releasing its directives and penalty guidelines;

• Bringing MURs to a timely conclusion;

• Prioritizing cases; 

• Dividing responsibility for enforcement of the Act with 

the Department of Justice; and

• Dealing with situations where the six Commissioners

vote 3-3 at the “reason-to-believe” stage of an investigation.

Soon after the public hearing, the Commission

issued a Statement of Policy announcing a change in

its enforcement practices to allow deponents to obtain

a copy of the transcript of their own deposition so long

as there is no good cause to limit the deponent to an

opportunity only to review and sign the transcript.

On October 16, Commission Chair Ellen Weintraub 

and Vice-Chairman Bradley Smith testified before 

the Committee on House Administration, which had 

invited the Commissioners to speak about the FECʼs 

enforcement procedures. Chair Weintraub and ViceChairman Smith briefed the House Members on the 

enforcement procedures hearing held in June and on

steps the Commission has taken to respond to the

public comments it received.

Both Commissioners urged Congress to make

necessary changes to the statute in order to allow

the proposed reforms. For example, they asked Congress to change the language of the Act to replace a 

“reason to believe” finding with a finding of “reason to 

open an investigation into allegations” as the trigger

for the Commissionʼs opening of an investigation.

In December 2003, the Commission announced an 

interim enforcement disclosure policy and unveiled a

new web-based Enforcement Query System (EQS).

As detailed in Chapter 1, the disclosure policy identifies which enforcement documents can be made 

available to the public, and the EQS improves public

access to those documents.

Key Enforcement Cases Closed

In MUR 5270, the Commission entered into a conciliation agreement with the American Federation of 

State, County and Municipal Employees-Public Employees Organization to Promote Legislative Equality

(AFSCME PEOPLE) and its treasurer William Lucy

concerning the committeeʼs failure to report transfers 

of funds from its federal account to its nonfederal 

accounts. AFSCME PEOPLE and Mr. Lucy admitted to reporting violations that spanned six years and

involved more than $10 million, and agreed to pay a

$60,000 civil penalty. They also agreed to cease and

desist from violating the Actʼs reporting requirements 
 

 

Legal Issues 29

at section 434 and to properly disclose all future

transfers from the committeeʼs federal accounts to its 

nonfederal accounts.12

From 1995 through September 2000, AFSCME 

PEOPLE failed to report in excess of $10 million in

disbursements that the committee made in the form 

of transfers from its federal account to its nonfederal 

accounts. The failure to report these disbursements 

also caused the committee to make corresponding

overstatements of its beginning and ending cash-onhand in reports filed during this period. 

In MUR 5229, the Commission entered into conciliation agreements with New Yorkʼs Health and Human 

Service Union 1199/SEIU, AFL-CIO13 (1199), two of 

its separate segregated funds and Service Employees

International Union Political Campaign Committee

(SEIU COPE), resulting in $262,500 in civil penalties.

The conciliation agreements primarily resolved violations of the Act stemming from 1199ʼs failure to transfer timely to its separate segregated funds and its

international unionʼs separate segregated fund political contributions collected from 1199ʼs members. This 

cumulative civil penalty is the largest ever obtained

in an enforcement matter arising from the review of

political committee disclosure reports by the Commissionʼs Reports Analysis Division. 

The union may support its SSF by acting as a “collecting agent.”14 The SSF is responsible for ensuring

that its collecting agent complies with Commission

regulations and must disclose contributions it receives

through a collecting agent, along with its other financial activity, in its regularly scheduled reports. See 

12 The Commission took into account AFSCME PEOPLE 

and Mr. Lucyʼs self-reporting of the violations and voluntary 

corrective measures when it considered an appropriate civil

penalty in this matter.

13 1199 is also known as Local 1199NY, Service 

Employees International Union and frequently known as

1199, the National Health and Human Service Employees 

Union.

14 Under the Commission regulations, a collecting agent

is an organization or committee that collects and transmits

contributions to an SSF to which the collecting agent is

related. 11 CFR 102.6(b)(1).

11 CFR 102.6(c)(1). The SSF must also report the 

identification of any person who makes a contribution 

aggregating more than $200 during the calendar year, 

together with the date and amount of the contribution.

2 U.S.C. §434(b)(3).15

According to the conciliation agreements, between

at least January 1997 and September 1999, 1199 

collected approximately $3.9 million in a general

bank account and kept large amounts of unreported

contributions in this account for many months. When 

1199ʼs leadership decided to spend money on a federal activity, the necessary funds were transferred to 

Local 1199 PAC and used immediately to make a contribution. After spending the funds, Local 1199 PAC 

would report a zero cash-on-hand balance. 1199 also 

transferred contributions from the general fund to other political committees, including SEIU COPE, after

the 30-day transfer window had closed. As a result, 

over $1.9 million in contributions were not reported in

a timely fashion, and the separate segregated funds

consistently understated their available cash-on-hand

in reports filed with the Commission.

Pursuant to these conciliation agreements, SEIU

COPE paid $75,000 in civil penalties, and 1199 and 

its SSFs paid $187,500 in civil penalties. In addition, 

the respondents agreed, among other things, to cease 

and desist from similar violations of the Act and to 

have representatives attend an appropriate FEC training conference. 

Administrative Fines

The Administrative Fine program was instituted in 

July 2000, and has been extended past its original

mandate that ended on December 31, 2001. The 

program has proven to be successful in increasing the

timeliness of filing and using the Commissionʼs limited 

resources to handle an extensive caseload. Under 

the administrative fines regulations, respondents may 

challenge the Commissionʼs RTB finding and/or proposed civil money penalty based, among other things, 

15 For a “person” other than a natural person, identification means the personʼs full name and address. 2 U.S.C. 

§431(13)(B).
30 Chapter Three

on the “existence of extraordinary circumstances beyond the respondentsʼ control that were for a duration 

of at least 48 hours and prevented them from timely

filing the report.” 11 CFR 111.35. The regulations

also provide several broad examples of circumstances that will not be considered “extraordinary circumstances.” During 2003, district courts issued rulings in

a number of cases in which the respondents filed suit, 

contesting the Commissionʼs final determination. The 

Commission won all but one of the challenges. The 

Commission also amended its administrative fines 

regulations.

Final Rules on Administrative Fines Regulations

On March 6, 2003, the Commission approved final 

rules amending its administrative fines regulations. 

The amendments to the regulations implemented

changes regarding the structure and application of the

Commissionʼs civil penalties schedules, the scope of 

“extraordinary circumstances” considered by the FEC

in penalty assessment and procedures for respondent

notification. The new regulations were implemented 

to:

• Reduce the civil money penalties for political committees with less than $50,000 in financial activity 

(total receipts plus total disbursements) in a reporting period who file reports late or not at all;

• Create two additional levels-of-activity brackets in

the civil penalty schedules for such committees to

make further distinctions in the amount of the civil 

penalty assessed; and

• Exclude certain nonfederal activity from the level-ofactivity calculation on which civil penalties for unauthorized committees are based. 

The Commission not only adjusted the penalty

schedules, but amended the list of specific “extraordinary circumstances” that the Commission will consider in determining whether to assess a civil money

penalty. The revised rules added staff “inexperience” 

and “unavailability”—including that of the treasurer—

to the examples of circumstances that are not considered “extraordinary.” 11 CFR 111.35(b)(4)(iii). Finally, 

the Commission added new regulations to explain

how respondents will be notified of reason-to-believe 

findings, final determinations and all other communications under the administrative fine regulations. 
31

Chapter Four

Presidential Public Funding

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

funded by the $3 tax checkoff and administered by 

the Federal Election Commission. Through the public

funding program, the federal government provides

matching funds for Presidential nominating conventions and grants to Presidential nominees for the

general election campaigns. In 2003, the Commission certified candidates and convention committees 

for public funding for the 2004 Presidential election.

In addition, the FEC completed a rulemaking to administer more effectively the public finance programs 

and to address the effect of the Bipartisan Campaign 

Reform Act of 2002 (BCRA) on the public funding of 

Presidential candidates and nominating conventions.

Shortfall for 2004

In the past two Presidential election cycles, the

Presidential Election Campaign Fund (the Fund) has

experienced a temporary shortfall in matching funds,

requiring the Fund to make pro-rata payments to

candidates until sufficient deposits are received. On 

December 1, 2003, seven Presidential candidates in 

the 2004 primary elections submitted matching fund

requests, totaling over $15 million.1 These requests

were the first received from any candidates for the

2004 election cycle. The Fund reported a balance 

of $16.7 million, after setting aside funds for general

election and national convention payments.2 Thus, all 

candidates were paid their full entitlement on January

2, 2004. FEC staff did not anticipate that any shortfall 

in the Fund will last beyond April 2004.

1 These seven candidates were Wesley Clark, John 

Edwards, Richard Gephardt, Dennis Kucinich, Lyndon LaRouche, Joseph Lieberman and Al Sharpton. George W. 

Bush, Howard Dean, John Kerry and Carol Mosely-Braun

did not participate in the matching payment program.

2 This amount includes deposits made to the Fund

through October 2003.

Certification of Public Funds

Primary Matching Funds

Presidential candidates eligible to participate in

the matching fund program receive matching federal

dollars for a portion of the contributions they raise.

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

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

20 states. The FEC reviews this threshold submission 

to determine whether the candidate has met the eligibility requirements. The candidate must also agree

to comply with the law in a letter of agreement and

certification. Once the Commission has determined 

a candidate to be eligible, the federal government will

match up to $250 per contributor, but only contributions from individuals qualify for matching.

Presidential candidates may establish their eligibility during the year prior to the election (i.e., in 2003 for

2004 primaries), and, once eligible, they may submit

additional contributions for matching funds (called

matching fund submissions ) on specific dates. 

Convention Funds

Federal election law permits all eligible national

committees of major and minor parties to receive public funds to pay the officials costs of their Presidential

nominating conventions.

Under the statute, major party conventions are fully

funded at $4 million plus an adjustment for inflation 

since 1974. On June 27, 2003, the Commission certified that the Republican and Democratic convention

committees met all eligibility requirements for public

funding. Each received $14,592,000 from the U.S. 

Treasury for planning and conducting their respective 

2004 Presidential nominating conventions.

The Presidential Election Campaign Fund Act also 

permits a minor party to receive federal funding for

holding its convention. A minor party is defined as 

a political party whose candidate for the Presidency

in the preceding Presidential election received more

than five percent but less than 25 percent of the total

popular votes cast. No minor party Presidential candidate in the 2000 general election received more than

five percent of the popular vote.
32 Chapter Four

General Election Grants

The Presidential nominee of each major party may

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

a cost of living adjustment) for the general election

campaign. In addition, minor and new party candidates may qualify for partial funding in the general

election based on their partyʼs electoral performance. 

Minor party candidates may receive public funds

based on the ratio of their partyʼs vote in the previous Presidential election to the average vote for the

major partiesʼ candidates in that election.3 New party

candidates may receive public funds after the election

if they receive five percent or more of the vote. The 

amount granted to a new party candidate is based

on the ratio of the new party candidateʼs vote to the 

average vote for the major partiesʼ candidates in the 

election.

The Commission projected that the major party

nominees who choose to accept public funding will

receive at least $74.4 million each to finance their 

campaigns. Participants in the general election public funding program must spend only those funds

awarded by the Commission and raised by the $3 tax

checkoff through the U.S. Department of Treasury. 

They may not supplement public funds with any private contributions for the campaign. However, nominees may raise private funds to cover certain legal

and accounting costs, which are not subject to the

spending limit.

Revised Regulations on the

Public Financing of Presidential

Candidates and Nominating

Conventions

On July 24, 2003, the Commission approved revisions to its regulations governing the public funding of

Presidential campaigns and nominating conventions.

11 CFR parts 9001-9039. The revised rules, among 

other things, apply certain parts of the BCRA to Presidential nominating conventions, address the solicita3

 “Minor party candidates” refers to nominees of parties

whose Presidential candidates received between five and 

25 percent of the vote in the preceding election.

tion and uses of General Election Legal and Accounting Compliance (GELAC) funds, adopt regulations

concerning winding down costs and create a shortfall

bridge loan exemption.

Nominating Conventions

Application of the BCRA to convention funding. 

The Commission adopted new regulations to address

the BCRAʼs application to convention activities. Under 

the BCRA, national party committees, their agents

and any committee directly or indirectly established,

maintained, financed or controlled by a national party 

committee are generally barred from raising or spending funds outside the limits and prohibitions of the Act. 

Because convention committees are, as a matter of 

law, agents of a national party committee and established, financed, maintained and controlled by that

committee, these restrictions also apply to convention committees.4

 11 CFR 9008.55(a). See 2 U.S.C. 

§441i(a) and 11 CFR 300.10(a). The new regulations

do not, however, significantly alter the pre-BCRA rules 

governing the financing of the national conventions, 

and convention committees may continue to receive

in-kind donations from host committees and municipal

funds to cover certain convention expenses specified 

in the regulations.

In addition, federal candidates and officeholders may continue to solicit funds on behalf of host

committees and municipal funds. Under the BCRA,

federal candidates and officeholders may make a 

“general solicitation” on behalf of a 501(c) organization so long as the organizationʼs principal purpose is 

not to conduct certain federal election activity and the

solicitation does not specify how the funds should be

used. 2 U.S.C. §441i(e)(4)(A). Because the principal

purpose of host committees and municipal funds is

to promote commerce in the host city, new 11 CFR 

4 The Commission also determined that host committees, 

which typically do not have the authority to solicit, direct

or receive any contribution, donation or transfer of funds

on behalf of a national party committee, are not presumed

to be agents of the party or convention committee or to

be directly or indirectly established, financed, maintained 

or controlled by them. Committees should look to 11 CFR 

300.2(b)(1) and 300.2(c) for guidance.
Presidential Public Funding 33

9008.55(d) provides that federal candidates and officeholders may make general solicitations without

restriction on source or amount on behalf of 501(c)

host committees or municipal funds, provided that

the solicitations do not specify how the funds will or

should be spent. 

Host committees and municipal funds. The new 

rules also provide for more similar treatment of host

committees and municipal funds. Both host committees and municipal funds must now file an FEC Form 

1, Statement of Organization, within 10 days of their

formation or within 10 days after the convention city

is selected, whichever date is later. 11 CFR 9008.51. 

Moreover, both types of committees have increased 

reporting responsibilities and must comply, as appropriate, with the filing requirements.

The Commission removed the requirement that

only “local” businesses, labor organizations, other organizations and individuals are permitted to make donations to host committees and municipal funds. The 

Commission determined that this restriction no longer

served a meaningful purpose because the disbursements that host committees and municipal funds are

permitted to make are consistent with the narrow purpose of promoting commerce in the convention city. 

Candidates’ use of public funds. The new rules 

allow candidates, including candidates who fail to win

their partyʼs nomination, to treat expenses related to 

the national nominating convention as qualified campaign expenses up to $50,000. 11 CFR 9034.4(a)(6).

GELAC Funds

The new regulations change the starting date for

GELAC solicitations from June 1 of the year in which

a Presidential election is held to April 1 of that year. 

The Commission determined that the earlier starting date was appropriate given the early primary

dates for some states in the 2004 elections. 11 CFR 

9003.3(a)(1)(i). The new rules also permit publicly

funded Presidential candidates, under certain circumstances, to redesignate the excessive portion of a primary contribution to the GELAC fund without obtaining a signed, written document from the contributor. 

11 CFR 9003.3(a)(1). See 11 CFR 110.1(b)(5)(ii)(B). 

In addition, under the new rules, Presidential 

candidates may use remaining GELAC funds to pay 

their primary committeeʼs winding down costs, and 

they must use GELAC funds to pay any of their primary committeeʼs required repayments to the U.S. 

Treasury before the GELAC funds can be dispensed 

under 2 U.S.C. §439a, which describes how campaigns may use funds remaining after campaign expenses are paid. 11 CFR 9003.3(a)(2)(i)(D) and (I); 

9003.3(a)(2)(iv).

Winding Down Expenses

For general election candidates, the Commission

has adopted a “winding down limitation” that caps the

total amount of public funds that can be used for winding down expenses at the lesser of 2.5 percent of the

expenditure limitation or 2.5 percent of the total of:

• The candidateʼs expenditures subject to the expenditure limitation as of the end of the expenditure report

period; plus

• The candidateʼs expenses exempt from the expenditure limitation, such as fundraising expenses, as of

the end of the expenditure report period.

Regardless of the above calculations, the smallest winding down limitation will be $100,000. 11 CFR 

9004.11(b). 

The Commission adopted similar regulations to

address primary candidatesʼ winding down expenses. 

However, for primary election candidates, the applicable winding down limitations are 10 percent, rather

than 2.5 percent, of the candidateʼs expenditures 

and expenses or of the expenditure limit. 11 CFR 

9034.11(b).

The new rules also allow winding down expenses

to be allocated between the candidateʼs primary and 

general election campaigns using any reasonable

allocation method. An allocation method will be considered reasonable so long as it divides the total winding down costs between the primary and the general

election committees and results in no less than one 

third of the total winding down costs allocated to each

committee. 11 CFR 9004.11(c) and 90034.11(c).

Shortfall Bridge on Loan Exemption

During recent election cycles, the Presidential Primary Matching Payment Account has occasionally 

contained insufficient funds to meet the entitlements 
 

34 Chapter Four

of all primary candidates on the dates the payments

were due. Often candidates obtained, at additional 

costs, “bridge loans” to pay their expenses until they

received their full entitlements several months later. 

The Commission is creating a new “shortfall bridge

loan exemption” from candidatesʼ expenditure limits. 

See 11 CFR 9035.1(c)(3). Under this exemption, interest charges accrued during the shortfall period on

loans secured or guaranteed by matching funds will

not count toward the candidateʼs expenditure limitation. 

Pre-candidacy Payments by Multicandidate

Committees

The new rules enable Presidential candidates to reimburse multicandidate committees for the payment of 

certain expenses made during the “testing the waters”

or pre-candidacy period. These expenses include,

among other things, polling expenses, compensation

of staff, administrative costs and expenses of individuals seeking to become delegates to the national

convention. Payment by a multicandidate committee

is an in-kind contribution to, and qualified expense 

by, a Presidential candidate even if it is made before 

the person becomes a candidate. 11 CFR 9034.10 

(a). However, if the candidateʼs authorized committee 

reimburses the multicandidate committee within 30 

days of becoming a candidate, the payment will not

be considered an in-kind contribution for either entity. 

11 CFR 9034.10(b).

Repayment of Public Funds

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

received public funds to ensure that they used those

funds only for qualified campaign expenses and that 

they maintained proper records and filed accurate 

reports. These audits are mandated under the 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 repay

the U.S. Treasury. The 2000 Presidential audits were 

completed during 2003.5 Additionally, the Commission faced a legal challenge regarding alleged violations of the Presidential Primary Matching Payment

Account Act (the Matching Payment Act) in the 1996 

Presidential election.

2000 Election

On May 1, 2003, the Commission made a determination that the LaRouche Committee for a New 

Bretton Woods (the Committee) must repay $236,692 

to the U.S. Treasury for public funds it used during 

the 2000 primary elections. The largest portion of the

repayment, $163,272, represents primary matching

payments that the Committee received in excess of

its entitlement. Another $70,139 represents apparent

non-qualified campaign expenses that the Committee 

incurred by overpaying vendors for campaign work.

The remaining $3,281 represents stale-dated checks. 

Advisory Opinions

In AO 2003-35, the Commission concluded that 

Congressman Richard A. Gephardt, a Presidential 

candidate in 2004, could choose to withdraw from the 

Presidential Primary Matching Payment Account Actʼs 

(the Matching Payment Act) public funding program 

even though the Commission had already certified his 

eligibility to receive funds under the program, so long

as he made the request to withdraw before the payment date for receiving funds.6

 Withdrawing from the

program would not require him to refund any contributions or obtain the contributorsʼ authorization to retain 

the contributions. Moreover, if he withdrew from the 

program, Congressman Gephardt would not be bound

by the legal requirements imposed as a result of participating in the public funding program.

Neither the Matching Payment Act nor its legislative 

history addresses a candidate whom the Commission

has certified as eligible to receive payments but who

no longer wished to participate in the program. How5 The majority of 2000 Presidential audits were completed in 2002 and summarized in the 2002 Annual Report. 

6

 Congressman Gephardt accepted $3,131,788.10 in

matching fund payments on January 2, 2004. 
Presidential Public Funding 35

ever, the legislative history does expressly recognize 

that a Presidential primary candidateʼs participation in 

the program is voluntary. See H.R. Conf. Rep. No. 93-

1438, at 116 (1974). Moreover, the Matching Payment 

Actʼs dependence on a candidateʼs written agreement 

and certification implicitly recognizes the voluntary

nature of participation in the program. In addition, the

Supreme Court held that the voluntary nature of all

of the public funding programs permits the related

expenditure limits, while it at the same time found

expenditure limits that were not voluntarily accepted

as part of a public funding program to be unconstitutional. See Buckley v Valeo, 424 U.S. 1, 57 n. 65 

(1976). The voluntary nature of the program supports 

the conclusion that a candidate may withdraw from

the program prior to receiving payments.

Finally, the Matching Payment Act, Commission 

regulations and the U.S. Treasury Department all 

require the Secretary of the Treasury to distribute the 

available funds equally and to consider the sequence

in which the funds are certified for candidates. 26 

U.S.C. §9037(b). In the event of a shortfall, the Secretary considers all funds certified for all candidates 

in order to determine how the funds should be distributed. If the Commission withdraws its certification 

of funds for a candidate, those funds will become 

available for distribution to the remaining eligible candidates. Thus, withdrawing the certification of eligibility 

for a candidate prior to the date of payment would not

prejudice the other fund recipients.

In light of all of these factors, the Commission

would withdraw a certification of a candidateʼs eligibility to receive matching funds prior to the initial

payment date for that candidate if the Commission

received a written request to do so signed by the candidate.7 The Commissionʼs withdrawal of its certification would constitute its agreement to a candidateʼs 

request to rescind the Candidate and Committee

Agreements and Certifications. 

Having already made his threshold submission,

Congressman Gephardtʼs only legal option to delay 

payment was to request that the Commission withdraw its certification, which, if agreed to by the Commission, would nullify the agreement in its entirety. 

No provision of law would prevent the Congressman

from submitting another Candidate and Committee

Agreement and Certifications at a later point, and any 

matchable contributions may be included in a subsequent threshold submission.

7 The certification of funds must not be pledged as security for private financing.
37

Chapter Five

The Commission

Commissioners

During 2003, Ellen L. Weintraub served as Chair of 

the Commission and Bradley A. Smith served as Vice 

Chairman. On December 18, 2003, the Commission 

elected Commissioner Smith as its Chairman and 

Commissioner Weintraub as its Vice Chair for 2004.

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

Inspector General

Under the Inspector General Act, the Commissionʼs 

Office of the Inspector General (OIG) is authorized to

conduct audits and investigations of FEC programs

to find waste, fraud and abuse to promote economic

effectiveness and efficiency within the Commission.

Equal Employment Opportunity

(EEO)

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

utilizing mediation to resolve informally EEO matters

since 1994.

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

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

in formal complaints. Prior to filing an EEO complaint, 

employees may agree to meet voluntarily, separately 

or jointly, with the EEO Director or Personnel Director, 

an EEO Counselor and/or the party allegedly responsible for the discrimination or wrongdoing. If attempts

to resolve the problem fail, the employee may proceed with EEO counseling and may file a formal EEO 

complaint or grievance, if applicable.

Ethics

Staff members in the General Counselʼs office 

serve as the Commissionʼs ethics officials. Dissemination of information to FEC employees regarding compliance with the Ethics in Government Act 

required a number of undertakings throughout the 

year. The ethics staff conducted ethics orientation 

sessions for all new employees, and provided annual

ethics briefings to employees who are required to file 

public and confidential financial disclosure reports. In 

order to help ensure that employees remain impartial

in the performance of their official duties, the ethics 

staff also administered the financial disclosure report 

system. Additionally, staff provided guidance to employees on the Standards of Ethical Conduct for Employees of the Executive Branch. Finally, the ethics 

staff ensured the Commissionʼs compliance with requirements of the Office of Government Ethics (OGE)

by submitting the following documents to the OGE:

the annual agency ethics program report, financial 

disclosure reports filed by Presidential candidates and 

travel payment reports.

At the 2003 Government Ethics Conference, the 

Commission received an Outstanding Ethics Program 

Award in recognition of its development and management of the ethics program.

FECʼs Budget

Fiscal Year 2003

The initial FEC FY 2003 budget request was 

$45,244,000 for 362 full time employees (FTE). Upon

enactment of the BCRA amendments to the Act, the 

Commission requested additional funds for implementing the BCRA changes. The request included an

additional 31 FTE and brought the total request for FY

2003 to $50,610,200 and 393 FTE. (The FEC agreed

that enactment of a FY 2002 supplemental request 

for $750,000 for additional space would reduce this

request by $750,000.)

The enacted FY 2003 appropriation, reduced by 

.65% across-the-board-rescission, was $49,541,871 

with 389 FTE.
38 Chapter Five

FY 2003 Actual

FY 2004 Projected

Allocation of Staff 0 5 10 15 20 25 30 35

Commissioners

Inspector General

Staff Director

Administration

Audit

Information

Office of Election Administration

Office of General Counsel

Information Technology

Public Disclosure Division

Reports Analysis Division

Allocation of Budget

Commissioners

Inspector General

Staff Director

Administration

Audit

Information

Office of Election Administration

Office of General Counsel

Information Technology

Public Disclosure Division

Reports Analysis Division

0 5 10 15 20 25 30 35

Chart 5-2

Divisional Allocation

FY 2003 Actual

FY 2004 Projected

Allocation of Staff

Allocation of Budget

Commissioners

Inspector General

Staff Director

Administration

Audit

Information

Office of Election Administration

Office of General Counsel

0 5 10 15 20 25 3

0 5 10 15 20 25 3

Commissioners

Inspector General

Staff Director

Administration

Audit

Information

Office of Election Administration

Office of General Counsel

Information Technology

Public Disclosure Division

Reports Analysis Division

Chart 5-2

Divisional Allocation

CHART 5-1 

Divisional Allocation of Budget 
The Commission 39

CHART 5-2

Functional Allocation of Budget

FY 2003 FY 2004

Personnel $32,481,924 35,975,300

Travel/Transportation 293,973 351,324

Space Rental 3,632,968 3,767,404

Equipment Rental/Maint 493,205 545,000

Telephone/Postage 450,302 420,000

Printing 572,506 529,000

Training/Tuition 195,635 271,875

Depositions/Transcripts 49,576 53,500

Federal Agency Services 2,533,284 475,000

Software/Hardware 3,111,094 1,125,500

Contracts 2,215,728 2,649,062

Publications 447,314 480,675

Supplies 312,882 365,000

Equipment Purchases 2,692,173 3,039,126

Other 59,307 94,638

Total $49,541,871 50,142,404
41

Chapter 6

Legislative Recommendations

In early May 2004, the Federal Election Commission

submitted to Congress and the President 12 legislative recommendations—four priority recommendations and eight additional recommendations, including

proposed amendments to address problems that the

regulated community and the Commission have encountered. 

Part I: Priority Recommendations

Contributions/Expenditures

Use of Contributed Amounts For Certain Purposes 

(2004) 

Section: 2 U.S.C. §439a

Recommendation: The Commission recommends 

that Congress amend 2 U.S.C. §439a(a) to allow, as a 

permissible use of Federal campaign funds, donations

to State and local candidates, subject to the limits and

prohibitions of State law, and to allow the use of Federal campaign funds for any other lawful purpose that

does not violate subsection (b) of section 439a. 

Explanation: BCRA amended 2 U.S.C. §439a. In the 

floor debate on BCRA, Senator Feingold stated that

the intent of the revised section 439a was to codify

the Commissionʼs then current regulations on the use 

of campaign funds. Section 439a, as amended by

BCRA, lists four explicitly permitted uses of campaign

funds in paragraphs (a)(1)-(4) and then, in subsection

(b), states that campaign funds may not be converted

to personal use. However, unlike the pre-BCRA version of section 439a and unlike the pre-BCRA regulations to which Senator Feingold referred, the use of

campaign funds for “any other lawful purpose” (so

long as they are not converted to personal use) is no

longer listed as a statutorily permitted use. In postBCRA rulemakings and advisory opinions, the Commission has had no choice but to interpret this statutory deletion as meaning that the list of permissible

uses in section 439a(a) is exhaustive.

Given Senator Feingoldʼs assertion that the BCRA

amendments were intended to codify the pre-BCRA

regulations, it appears that the narrowing of the statute may have been inadvertent. The Commission 

suggests that the use of campaign funds for lawful

purposes that do not constitute personal use is consistent with purposes of FECA. Therefore, the Commission recommends that section 439a(a) be amended to permit explicitly the use of campaign funds for

“any other lawful purpose” that does not constitute

personal use of those funds. 

The question of whether section 439a still permits a

donation of campaign funds by an authorized committee to a non-Federal campaign has lately arisen with

considerable frequency. This was a common practice before the passage of BCRA. It is not, however, 

clear under post-BCRA section 439a whether such a 

donation is an “otherwise authorized expenditure” in

connection with the Federal candidateʼs campaign for 

Federal office. See 2 U.S.C. §439a(a)(1). The Commission believes that such use of campaign funds is

fully consistent with the purposes of FECA, and thus,

that section 439a(a) be amended to permit explicitly

donation of campaign funds by an authorized committee to a non-Federal campaign to the extent allowed

by applicable State law. This statutory change would

allow a Federal candidate or officeholder to donate his 

or her campaign funds to State and local candidates,

even if he or she is no longer a candidate for Federal

office. It would also permit Federal candidates and

officeholders who decide to run for non-Federal offices to donate their Federal campaign funds to their

own campaigns for State and local offices, if State law 

permits.

Legislative Language: 

Section 312a(a) of the Federal Election Campaign Act 

of 1971 (2 U.S.C. §439a(a)) is amended:

(1) by striking the “or” at the end of paragraph (a)(3);

(2) by striking the period, and adding a semi-colon at

the end of paragraph (a)(4);

(3) by adding a new paragraph (a)(5) to read as follows: “(5) for donations to State and local candidates subject to the provisions of State law; or”;

and
 

42 Chapter Six

(4) by adding a new paragraph (a)(6) to read as follows: “(6) for any other lawful purpose unless prohibited by subsection (b) of this section.”.

Increasing the Amount That Authorized 

Committees May Give to Authorized Committees 

of Other Candidates (2004)

Section: 2 U.S.C. §432(e)(3)(B)

Recommendation: The Commission recommends 

that Congress amend 2 U.S.C. §432(e)(3)(B) so that

the term “support” will not include a contribution by

any authorized committee in amounts of $2,000 or

less (rather than the current $1,000 or less) to an

authorized committee of any other candidate.

Explanation: Under the Act, with certain exceptions, 

no political committee which supports or has supported more than one candidate may be designated

as an authorized committee. 2 U.S.C. §432(e)(3)(A).

“Support” is defined to exclude a contribution by any 

authorized committee in an amount of $1,000 or less 

to an authorized committee of any other candidate.

Prior to BCRA, the amount of this “support” limitation and the contribution limitation for candidates 

and authorized committees with respect to any election for Federal office were both $1,000. 2 U.S.C. 

§§432(e)(3)(B) and former 441a(a)(1)(A). In BCRA, 

Congress raised the section 441a(a)(1)(A) contribution limitation for candidates and authorized committees to $2,000, but did not change the 2 U.S.C.

§432(e)(3)(B) support limitation. To the extent the 

resulting variance between these sections of the Act 

may have been an oversight, the Commission recommends that the section 432(e)(3)(B) limit be increased

to $2,000, consistent with 2 U.S.C. §441a(a)(1)(A). 

Legislative Language:

Section 302(e)(3)(B) of the Federal Election Campaign Act of 1971 (2 U.S.C. §432(e)(3)(B)) is amended by striking “$1,000” and inserting in its place

“$2,000”.

Compliance

Modifying Terminology of “Reason to Believe” 

Finding (2004)

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 or referral 

are true. An investigation permits the Commission to

evaluate the validity of the facts as alleged. It would 

therefore be helpful to substitute words that sound

less accusatory and that more accurately reflect what, 

in fact, the Commission is doing at this early phase of

enforcement.

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

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

the statute should be amended. Note that the change

in terminology recommended by the Commission

would not change the standard that this finding simply 

represents that the Commission believes a violation 
Legislative Recommendations 43

may have occurred if the facts as described are accurate. 

Disclosure

Electronic Filing of Senate Reports (Revised 2004)

Sections: 2 U.S.C. §§432(g) and 434(a)(11)

Recommendation: The Commission recommends 

that Congress require:

• Mandatory electronic filing, at a date to be determined by Congress, for all Senate candidates (or

those candidatesʼ authorized committees) and for 

those persons and political committees filing designations, statements, reports or notifications pertaining only to Senate elections if they have, or have

reason to expect to have, aggregate contributions

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

year. 

• Electronically filed designations, statements, reports 

or notifications pertaining only to Senate elections to

be forwarded to the Commission within 24 hours of 

receipt and to be made accessible to the public on

the Internet, if Congress does not change the point

of entry for filings pertaining only to Senate elections. 

Explanation: Public Law 106-58 required, among other things, that the Commission make electronic filing 

mandatory for political committees and other persons

required to file with the Commission who, in a calendar year, have, or have reason to expect to have, 

total contributions or total expenditures exceeding

a threshold set by the Commission ($50,000). The 

Bipartisan Campaign Reform Act of 2002 (Public Law 

No. 107-155) required the Commission to develop

software and software standards that will allow information concerning reportable receipts and disbursements to be “transmitted immediately” and posted

on the Commissionʼs web site “immediately upon 

receipt.” BCRA also expanded the class of persons 

required to file electronically, mandating that “each 

candidate for Federal office (or that candidateʼs authorized committee) shall use software” that meets the 

new standards once such software is made available 

to the candidate. 2 U.S.C. §434(a)(12)(C). The plain

language of this statutory revision does not appear to

exempt Senate candidates and their authorized committees from the electronic filing requirements, but it

does not specify where the electronic reports must

be filed. Thus, a plain reading of these new requirements indicates that all Senate candidates and their 

authorized committees must use software, presumably to file electronically, with the Senate (or with 

the FEC). (The Commission notes that legislation is

currently pending (S.1874) in the Senate to mandate

electronic filing by Senate campaigns.)

Data from electronically filed reports is received, processed and disseminated more easily and efficiently, 

resulting in better use of resources. Reports that

are filed electronically are normally available within

five minutes and detailed data is available in the 

Commissionʼs databases within 24 to 48 hours. In 

contrast, the time between the receipt of a report filed

through the paper filing system and its appearance 

on the Commissionʼs web site is 48 hours. It can take 

as long as 30 days before some detailed data filed on 

paper is available in the Commissionʼs databases. 

Disclosure delays are likely to severely impede the

effective implementation of several requirements of 

the Act. For example, the “Millionairesʼ Amendment” 

is predicated on the timely availability of disclosure

documents. 2 U.S.C. §§441a(i)(1)(E) and 441a1(a)(2)(B). In other cases, the Act requires the disclosure of specific expenditures within 24 or 48 hours 

from the time they are made.

Electronic filing (by means other than diskette) is also

unaffected by disruptions in the delivery of first class 

mail, such as those arising from the presence of anthrax powder in the Senate buildings and U.S. Postal

Service facilities in 2001 and the more recent discovery of Ricin in mail delivered to the Senate office 

buildings. In each case, the disruptions have significantly delayed amendments to Senate campaign reports that were filed via regular mail. In 2001, reports 
 

 

44 Chapter Six

submitted by regular mail took months to arrive at the

Secretary of the Senate (and the FEC), delaying disclosure. In contrast, amendments electronically filed 

during the same time periods by other types of filers 

were received and processed in a timely manner.

Legislative Language:

Section 304(a)(11)(D) of the Federal Election Campaign Act of 1971 (2 U.S.C. 434(a)(11)(D)) is amended to read as follows: “As used in this paragraph, the

terms “designation”, “statement”, or “report” mean a

designation, statement or report, respectively, which-

- (i) is required by this Act to be filed with the Commission, or (ii) is required under section 302(g) to be filed 

with the Secretary of the Senate and forwarded by the

Secretary to the Commission.”

Section 302(g)(2) of the Federal Election Campaign

Act of 1971 (2 U.S.C. 432(g)(2)) is amended by inserting “or 1 working day in the case of a designation,

statement, or report filed electronically” after “2 working days”.

Section 304(a)(11)(B) of the Federal Election Campaign Act of 1971 (2 U.S.C. 434(a)(11)(B)) is amended by inserting “, or filed with the Secretary of the

Senate under section 302(g)(1) and forwarded to the

Commission,” after “Act”.

Part II: Non-Priority/Substantive 

or Technical Legislative 

Recommendations

Contributions/Expenditures

Multicandidate Political Committee Contribution 

Limitations and Non-multicandidate Political 

Committee Contribution Limitations (Revised

2004)

Section: 2 U.S.C. §441a(a)(2) and 441a(c)

Recommendation: The Commission recommends 

that Congress consider indexing for inflation the contribution limitations applicable to multicandidate political committees and adjusting the amount such committees may contribute to national party committees

to harmonize these limits with the limits applicable to

non-multicandidate political committees. 

Explanation: A political committee qualifies for multicandidate status if it has been registered with the

Commission for six months or more, has received 

contributions from more than 50 persons, and has

contributed to five or more Federal candidates. 2 

U.S.C. §441a(a)(4). 

FECA, prior to BCRA, provided a significantly higher 

limit on contributions to candidates for political committees with multicandidate status than for those 

without that status ($5,000 per election versus $1,000

per election). BCRA raised and indexed for inflation 

the contribution limit on non-multicandidate committees (to $2,000 per election), and such limit eventually

will become higher than the limit imposed on multicandidate committees. It is important to note that a

committee cannot opt out of multicandidate status.

Instead, under section 441a(a)(4), a committee automatically triggers multicandidate status once it meets

the specific requirements listed above.

In addition, the limit for contributions to national 

party committees from multicandidate committees is

$15,000 per year (as it was prior to BCRA), yet BCRA

increased the limit on contributions to the same national party committees from non-multicandidate committees from $20,000 to $25,000 per year. 2 U.S.C. 

§441a(a)(2)(B), (1)(B). Moreover, only the contribution limit for non-multicandidate committees is indexed 

for inflation, which means that over time the current 

$10,000 difference will only increase.

Congress should consider revising the statute to give

multicandidate committees allowances at least as 

generous as those given to non-multicandidate committees.

Legislative Language:

Section 315 of the Federal Election Campaign Act of 

1971 (2 U.S.C. §441a) is amended—
Legislative Recommendations 45

(1) in subparagraph (a)(2)(B), by striking “$15,000”

and inserting in lieu thereof “$25,000”;

(2) in clause (i) of subparagraph (c)(1)(B), by inserting “(a)(2)(A), (a)(2)(B),” after “(a)(1)(B),”;

(3) in subparagraph (c)(1)(C), by inserting “(a)(2)(A),

(a)(2)(B),” after “(a)(1)(B),”;

(4) in clause (ii) of subparagraph (c)(2)(B), by inserting “(a)(2)(A), (a)(2)(B),” after “(a)(1)(B),”.

Modifying the Definition of Federal Election 

Activity to Simplify Compliance for State, District

and Local Party Committees Where Certain

Employees Spend More than 25 Percent of Their

Time In Connection with a Federal Election 

Section: 2 U.S.C. §431(20)(A)(iv)

Recommendation: The Commission recommends that 

Congress amend 2 U.S.C. §431(20)(A)(iv) to allow

State, district and local political party committees to

comply with that provision of the Act in biweekly, semimonthly or monthly periods, in conformity with the

period of time a party committee selects for payroll 

purposes. Currently, section 431(20)(A)(iv) requires 

compliance in monthly periods.

Explanation: Under BCRA, “services provided during

any month by an employee of a State, district or local

committee of a political party who spends more than

25 percent of that individualʼs compensated time during that month on activities in connection with a Federal election” are Federal election activity. 2 U.S.C. 

§431(20)(A)(iv). Several party committees have informed Commission staff that this provision imposes a 

difficult compliance burden because the committeesʼ

payroll periods frequently are different than monthly 

periods. The compliance burden for party committees

will be lessened if such committees can elect a section 431(20)(A)(iv) compliance period that is the same

as the payroll period used by the committees (e.g.,

biweekly, semimonthly or monthly payroll period). 

For example, a party committee that conducts payroll

operations on a biweekly basis can also determine on

a biweekly basis whether or not an employee meets

the 25 percent test, and thus whether the employee

must be compensated from the committeeʼs Federal 

account.

Legislative Language:

Section 301(20)(A)(iv) of the Federal Election Campaign Act of 1971 (2 U.S.C. §431(20)(A)(iv)) is 

amended:

(1) by striking “any month” and inserting in lieu thereof “a payroll period of a State, district or local committee of a political party”;

(2) by striking “a State, district or local committee of

a political party” and inserting in lieu thereof “that

party committee”;

(3) by striking “that month” and inserting in lieu thereof “that payroll period”;

(4) by inserting at the end the following: “For purposes of this subparagraph, a payroll period may be a

biweekly, semimonthly or monthly period.”.

Federal Candidates Soliciting, Receiving Or

Spending Funds (2004)

Section: 2 U.S.C. §441i(e)(1) and (e)(2)

Recommendations: The Commission recommends 

that Congress amend 2 U.S.C. §441i(e)(1) to clarify

the circumstances in which recall elections, referenda 

and initiatives, recounts, redistricting, legal defense

funds, and related activities fall within the scope of activities that are “in connection with a Federal election” 

and are thus subject to the §441i(e)(1) restrictions.

The Commission also recommends that Congress

clarify whether under §441i(e)(1)(A) a candidate or officeholder may solicit, direct, or transfer funds to entities not required to file reports with the Commission.

In addition, the Commission recommends that Congress amend 2 U.S.C. §441i(e)(1)(B) to make clear

that this provision does not prohibit a Federal candidate or officeholder from spending his or her own personal funds in connection with an election other than 

an election for Federal office, and recommends that 

Congress amend 2 U.S.C. §441i(e)(2) to clarify that

the phrase, “refers only to such State or local candidate,” does not apply to non-communicative activity.

Explanation: Section 441i(e)(1)(A) prohibits a Federal

candidate or officeholder and certain entities from 

soliciting, receiving, directing, transferring, spending, 
46 Chapter Six

or disbursing, in connection with a Federal election

funds that are outside the limitations, prohibitions, and

reporting requirements of the Act. Because these 

prohibitions are limited in scope to specific activities 

conducted “in connection with an election for Federal 

office,” the Commission requests additional guidance

from Congress as to the meaning of this phrase in

this context. Specifically, Congress should consider 

amending the statute to clarify the circumstances in

which it intends recall elections, referenda and initiatives, recounts, redistricting, candidate litigation costs

and legal defense funds to be encompassed and thus

subject to the restrictions in §441i(e).

In addition, because this prohibition extends to the

solicitation of funds not “subject to the ... reporting

requirements of the Act,” Congress should consider 

resolving the potential ambiguity that might arise in

situations where a candidate wishes to solicit funds 

on behalf of an entity in connection with a Federal

election, including Federal election activity, when that 

entity is not yet (or may not ever be) required to file 

reports with the Commission. Even though such an

organizationʼs funds are not subject to the reporting 

requirements of the Act, they may be subject to the 

limitations and prohibitions of the Act.

Section 441i(e)(1)(B) similarly prohibits a Federal

candidate or officeholder and certain entities from 

soliciting, receiving, directing, transferring, spending, or disbursing, in connection with a non-Federal 

election, funds that are outside the limitations and 

prohibitions of the Act. As written, the verbs “spend”

and “disburse” in section 441i(e)(1)(B) arguably apply

to a Federal candidateʼs or officeholderʼs donation of 

his or her personal funds in connection with a State or

local candidate or ballot measure election. This provision is meant to prevent corruption or the appearance

of corruption of Federal candidates and officeholders 

resulting from large soft money donations made at

their behest. However, there is little or no chance of 

such corruption in the context of a Federal candidate

or officeholder donating his or her own funds. Thus, 

to the extent section 441i(e)(1)(B) can be read to 

prevent such individual donations, the Commission

recommends that Congress amend this provision to

remove the ambiguity.

Section 441i(e)(2) is an exception to the general rule

at 2 U.S.C. §441i(e)(1)(B); the latter provision prohibits a Federal candidate or officeholder from soliciting, receiving, or spending funds in connection with

a non-Federal election that are outside the amount 

limitations and source prohibitions of the Act. In order to qualify for the section 441i(e)(2) exception,

a Federal candidate or officeholder must meet two 

requirements: (1) any solicitation, receipt, or spending of funds by the Federal candidate or officeholder 

must be permitted under State law; (2) such solicitation, receipt, or spending must “refer only to such

State or local candidate, or to any other candidate for

the State or local office sought by such candidate, or

both.” The second condition is unclear insofar as how 

non-communicative activity, such as receiving funds, 

can “refer to” any candidate. The Commission recommends that Congress clarify this language to make

clear that the second condition refers to public communications, as defined in 2 U.S.C. §431(22).

Legislative Language:

Section 323(e)(1)(B) of the Federal Election Campaign Act of 1971 (2 U.S.C. §441i(e)(1)(B)) is amended by inserting “(except for the candidateʼs personal 

funds)” after “spend funds” and after “disburse funds”.

Section 323(e)(2) of the Federal Election Campaign

Act of 1971 (2 U.S.C. §441i(e)(2)) is amended by inserting “, in the case of a public communication,” prior

to the phrase “refers only to”.
 

 

Legislative Recommendations 47

Compliance

Fraudulent Misrepresentation of Campaign

Authority 

Section: 2 U.S.C. §441h

Recommendation: The Commission recommends 

that Congress revise the prohibitions on fraudulent

misrepresentation of campaign authority to encompass all persons purporting to act on behalf of candidates and real or fictitious political committees and 

political organizations. In addition, the Commission 

recommends that Congress remove the requirement

that the fraudulent misrepresentation must pertain to

a matter that is “damaging” to another candidate or

political party. 

Explanation: 2 U.S.C. §441h(a) prohibits a Federal candidate or his or her agent or employee from

fraudulent misrepresentation such as speaking,

writing, or otherwise acting on behalf of a candidate

or political party committee on a “matter which is

damaging to such other candidate or political party”

or an employee or agent of either. The Commission 

recommends that this prohibition be extended to any

person who would disrupt a campaign by such unlawful means, rather than being limited to candidates and

their agents and employees. Proving damages as a

threshold matter is often difficult and unnecessarily

impedes the Commissionʼs ability to pursue persons 

who employ fraud and deceit to undermine campaigns. Fraudulent solicitations of funds on behalf of 

a candidate or political party committee were recently

prohibited in BCRA without any required showing of 

damage to the misrepresented candidate or political

party committee. See §441h(b). 

In addition, while both §§441h(a) and (b) directly address fraudulent actions “on behalf of any other candidate or political party,” they do not address situations 

where a person falsely claims to represent another

type of political committee or claims to be acting on

behalf of a fictitious political organization, rather than

an actual political party or a candidate. For example,

the narrow scope of the existing language does not 

bar fraudulent misrepresentation or solicitation on behalf of a corporate or union separate segregated fund

or a non-connected political committee.

Congress should consider revising the statute to

strengthen these important prohibitions on fraudulent

activity.

Legislative Language:

Section 322 of the Federal Election Campaign Act of 

1971 (2 U.S.C. §441h) is amended:

(1) in subsection (a), by striking “who is a candidate

for Federal office or an employee or agent of such

a candidate”;

(2) in paragraph (a)(1), by striking “or political party

or employee or agent thereof on a matter which is

damaging to such other candidate or political party or employee or agent thereof” and inserting in

lieu thereof “, political party, other real or fictitious 

political committee or organization, or employee

or agent of any of the foregoing,”;

(3) in paragraph (b)(1), by striking “or political party”

and inserting in lieu thereof “, political party, other 

real or fictitious political committee or organization, or employee or agent of any of the foregoing,”.

Disclosure

Increasing and Indexing all pre-BCRA Registration 

and Reporting Thresholds for Inflation 

Sections: 2 U.S.C. §§431 and 434

Recommendation: The Commission recommends 

that Congress increase and index for inflation all preBCRA registration and reporting thresholds. 

Explanation: Most of the Actʼs registration and reporting thresholds were set in 1974 and 1979. Because 

over twenty years of inflation had effectively reduced 

the Actʼs contribution limits in real dollars, the BCRA

increased some contribution limits to partially adjust

for inflation, and then indexed those limits: contributions to candidates and national party committees by

individuals and non-multicandidate committees, the 
 

48 Chapter Six

biennial aggregate contribution limit for individuals

and the limit on contributions to Senate candidates by

certain national party committees. The Commission 

proposes extending this approach to all pre-BCRA

registration and reporting thresholds, which have similarly been effectively reduced as a result of inflation.

Increasing and then indexing these thresholds would

ease the registration and reporting burdens on

smaller political committees who, in some cases, are

unaware of the Actʼs registration and reporting provisions. Moreover, by increasing and then indexing the 

thresholds for inflation, Congress would help to ensure that some committees and persons who lack the

resources and technical expertise to comply with the

Actʼs registration and reporting requirements would 

not have to do so. Finally, because of the effect of 

inflation, increasing and then indexing the registration

and reporting thresholds would continue to capture

the significant financial activity envisioned when Congress enacted the FECA.

Making Permanent the Administrative Fine 

Program for Reporting Violations (Revised 2004)

Section: 2 U.S.C. §437g

Recommendation: The Commission recommends that 

Congress make permanent the Commissionʼs authority to assess administrative fines for straightforward 

violations of the law requiring timely reporting of receipts and disbursements. The Commissionʼs current 

Administrative Fine Program only covers violations

that relate to reporting periods through December 31,

2005.

Explanation: On January 23, 2004, President Bush

signed the Consolidated Appropriations Act, 2004, 

which extended the Administrative Fine Program to 

cover violations of 2 U.S.C. §434(a) that relate to

reporting periods through December 31, 2005. Since 

the Administrative Fine program was implemented 

with the 2000 July Quarterly report, the Commission has processed and made public 935 cases, with

$1,228,749 in fines collected. The Administrative Fine 

Program has been remarkably successful: over the 

course of the program, the number of late and nonfiled reports has generally decreased. As a result, the 

Administrative Fine Program has become an integral

part of the Commissionʼs mission to administer and 

enforce the Act. By making the program permanent,

Congress would ensure that the Commission would

not lose one of the most cost-effective and successful 

programs in its history.

Under the Administrative Fine Program, the Commission considers reports to be filed late if they are 

received after the due date, but within 30 days of that

due date. Election-sensitive reports are considered

late if they are filed after their due date, but at least

five days before the election. (Election sensitive reports are those filed immediately before an election

and include pre-primary, pre-special, pre-general, October quarterly and October monthly reports.) Committees filing reports after these dates are considered

nonfilers. Civil money penalties for late reports are

determined by the amount of activity on the report, the

number of days the report was late and any prior penalties for violations under the administrative fine regulations. Penalties for nonfiled reports are determined 

by the estimated amount of activity on the report and

any prior violations. Committees have the option to

either pay the civil penalty assessed or challenge the

Commissionʼs finding and/or proposed penalty.

Public Financing

Stabilizing the Presidential Public Funding

Program (Revised 2004)

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

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

stabilize the Presidential public funding program for

upcoming election years.

Explanation: The Presidential public funding program

has experienced shortfalls during each of the last

three Presidential elections. The shortfalls are a result of declining participation in the check-off program 

and the fact that the checkoff is not indexed to infla-
 

 

 

Legislative Recommendations 49

tion while payouts are indexed. To date, the shortfalls 

have principally affected primary candidates, whose 

funding is given lowest priority under the law. In February 2004, when the U.S. Treasury made its second 

payment for the 2004 elections, it was only able to

provide approximately 46 percent of the public funds

that qualified Presidential candidates were entitled to 

receive. 

Specifically, only a little over $2.3 million was available for distribution to qualified primary candidates on 

February 1, 2004, after the Treasury paid the convention grants and set aside the general election grants.1

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

qualified candidates were entitled to receive) on that 

date was 5 million, twice as much as the amount of 

available public funds. By February 2004, total payments made to primary candidates exceeded $20.4

million. 

The 2004 shortfall could have been considerably

more severe had three major party candidates not

opted out of public funding for the primary. While this 

left more money for candidates who chose to participate in the program, the candidates who opted out

appeared to do so out of a desire to spend beyond

the spending limits. Their ability to operate outside

the restrictions of the public funding program may

encourage more candidates to opt out in future election years. 

The Commission recommends several specific legislative changes. First, to alleviate future shortfalls, 

the statute should be revised so that Treasury will be 

able to rely on expected proceeds from the voluntary

checkoff, rather than relying solely on actual proceeds 

on hand as of the dates of the matching fund payments. Since large infusions of voluntary checkoff 

proceeds predictably occur in the first few months of 

the election year, including such estimated proceeds 

in the calculation of funds available for matching fund 

1 The Commission certified a total of $29.18 million in 

convention grants, and $149.2 million was set aside for use

by general election candidates.

payouts would virtually eliminate the shortfall in the

near future. Because estimates for expected payouts

are an acceptable part of the calculations (e.g., setting aside sufficient funds to cover general election 

payouts), estimates of the checkoff proceeds could 

be incorporated, as well. A very simple change in the 

wording of 26 U.S.C. §9037 would accomplish this:

changing “are available” to “will be available.” Expected payments should be based on sound statistical 

methods to produce a cautious, conservative estimate

of the funds that will be available to cover convention 

and general election payments. 

A second revision in the statute would further the 

long-term stability of the presidential public funding

program: indexing the voluntary checkoff amount 

to inflation. Although the checkoff amount was increased from $1 to $3 beginning with 1993 returns,

there was no indexing built in to account for further

inflation thereafter. Although other factors influence 

the fundʼs balance, including the number of candidates participating, the number of contributions they

can have matched, the taxpayer participation rate and

deposits of repayments, an indexing of the checkoff 

amount for inflation would help guarantee some money coming in to replenish the public funding program.

Miscellaneous

Pay Level for the General Counsel and Creation of

Senior Executive Service Positions (2004)

Sections: 2 U.S.C. §437c(f)(1); 5 U.S.C. §3132(a)(1)

Recommendation: The Commission recommends 

that Congress revise section 437c(f)(1) to state that

the General Counsel shall be paid at a rate not to exceed the rate of basic pay in effect for level IV of the 

Executive Schedule (5 U.S.C. §5315), and that Congress amend 5 U.S.C. §3132(a)(1) by deleting subsection (C), which specifically excludes the Federal 

Election Commission from eligibility for the creation of

Senior Executive Service positions.

Explanation: The Commission believes that two statutory changes are needed to bring the Commissionʼs 

personnel structure in line with that of other compa-
50 Chapter Six

rable federal agencies. This would ensure that the 

Commission is able to compete with other government agencies and the private sector in recruiting and

retaining key management personnel, including the

General Counsel. These changes would also enable the Commission, like other agencies, to move to

merit-based pay systems for top executives.

First, the FECA creates the statutory office of General 

Counsel and provides that the compensation of the

General Counsel shall not exceed the rate of basic 

pay in effect for level V of the Executive Schedule 

(currently $128,200). The Commission believes that 

this rate of pay is too low in light of the significant responsibilities entrusted to this statutory officer and in 

comparison to the salary rates of General Counsels of

other agencies who have equivalent responsibilities.

The FECʼs General Counsel manages and directs a 

law office of approximately 125 persons. The General 

Counsel is also responsible for overseeing the Commissionʼs enforcement program, federal litigation in 

district and appellate courts, public financing matters, 

conducting rulemakings, drafting advisory opinions,

and providing general guidance on other legal matters.

Under the present compensation structure, the General Counsel is paid less than the highest paid GS15 in the Washington, D.C. area, and less than the 

overwhelming majority of SES employees. Congress

recently restructured the SES compensation system

into a performance-based, payband system. National 

Defense Authorization Act for Fiscal Year 2004 (Pub. 

L 108-136, Nov. 24, 2003). For 2004, individuals 

serving in SES positions are compensated in a payband between $104,927 and $145,600 (or $158,100

in agencies with a certified SES performance appraisal system). Increasing the General Counselʼs pay will 

ensure that the Commission can retain highly qualified 

individuals to serve as General Counsel as well as 

enable it to remain competitive in the marketplace for

federal executives when a vacancy arises. 

Second, the current pay and benefits structure hinders the Commissionʼs ability to recruit talented executives from other agencies and retain high-performing senior managers, while conversion to SES would 

enhance this ability. The Commission is prohibited by

law from creating Senior Executive Service positions

within the agency. 5 U.S.C. §3132(a)(1)(C). Consequently, unlike other agencies, the Commissionʼs 

senior managers are employed in Senior Level positions. These executives, consisting of two Deputy

Staff Directors, a Deputy General Counsel, and four 

Associate General Counsels, oversee major programmatic areas and supervise not only staff, but other 

managers as well. However, OPMʼs Guide to the 

Senior Executive Service indicates that the Senior 

Level system is for non-executive positions. In fact, 

the OPM Guide provides that supervisory duties

should occupy less than 25 percent of a Senior Level

employeeʼs time. At the Commission, by contrast,

supervisory and executive responsibilities occupy 100

percent of the time of SL employees. 

In terms of total compensation and benefits, individuals serving in Senior Level positions are under-compensated for the responsibilities and duties required

by these positions, and under-compensated when

compared to individuals serving in similar capacities

at virtually all other Federal agencies. Conversion 

to SES would also allow higher pay ranges for these

positions and enable the Commissionʼs senior managers to receive performance awards and other benefits 

not available to Senior Level employees. Perhaps

most significantly, this includes the ability to carry over 

many more days of annual leave than Senior Level

employees. Given that high-level managers frequently work extended periods in which they cannot

use much leave, especially in the aftermath of BCRA,

an executiveʼs ability to accumulate and defer leave is 

not only an important benefit to him or her, but is also 

a valuable tool for the agency to ensure that executives are available to accomplish agency priorities. 

Accordingly, the Commission believes that current 

Senior Level positions within the agency should be

converted to SES positions and that any future Senior Level positions be created in the SES. There is a 

trend toward performance-based pay for executives

throughout the government; converting the current

Senior Level positions into SES positions would ensure performance-based pay is similarly emphasized 
Legislative Recommendations 51

for the Commissionʼs senior executive positions. The 

Commission is confident that conversion of Senior 

Level positions to SES positions will assist in retaining highly qualified individuals and will attract superior 

candidates when vacancies arise, thus permitting the

Commission to remain competitive in the marketplace

for federal executives. 

Legislative Language:

Section 310(f)(1) of the Federal Election Campaign

Act of 1971 (2 U.S.C. §437c(f)(1)) is amended by

striking “V” and inserting in lieu thereof “IV”. 

Section 3132(a)(1)(C) of Title 5 of the United States 

Code is amended by striking “Federal Election Commission, or”.
53

Chapter Seven

Campaign Finance Statistics

Labor

Other

CHART 7-1 e

Number of PACs, 1974-2003 Campaign Finance Statistics

Corporate

Nonconnected

Trade/Membership/Health

Labor

Other

2000

1500

1000

500

0 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03

Corporate

Nonconnected

Trade/Membership/H alth

2000

1500

1000

500

74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03
54 Chapter Seven

CHART 7-2

PAC Contributions to House and Senate 

Candidates in Nonelection Years

Republicans

Democrats

Millions of Dollars

15

12

9

6

3

0 1993 1995 1997 1999 2001 2003

Senate Candidates

0

10

20

30

40

50

1993 1995 1997 1999 2001 2003

Millions of Dollars

House Candidates
Campaign Finance Statistics 55

CHART 7-3

House and Senate Campaign Fundraising

in Nonelection Years

Chart 6-5

House Campaign Fundraising

in Nonelection Years

Millions of Dollars

250

200

Receipts from Other Sources

Receipts from PACs

Receipts from Individuals

5

20

150

10

5

0

Millions of Dollars

2 0

0

0

0

1993 1995 1997 1999 2001 2003

House Candidates

S

Millions of Dollars

250

200

150

100

50

0 1993 1995 1997 1999

Senate Candidates

2001 2003
CHART 7-4

Contributions to House and Senate 

Candidates from Individuals During Off

Year of Election Cycle

Contributions

Number of Candidates

Millions of Dollars

150

Candidates

1200

120

90

60

1000

800

30

0 94 96 98 00 02 04 600

House Candidates

150 150

120

90

60

120

30

0 94 96 98 00 02 04 90

Millions of Dollars Candidates

Senate Candidates

56 Chapter Seven
Campaign Finance Statistics 57

CHART 7-5

Fundraising by All Committees of 

National Party

Nonfederal*

Federal

Chart 6-11

Fundraising by All Republican National

* As of November 6, 2002, national party committees were barred from raising and spending nonfederal funds. 2 U.S.C. 

§441i(a).

1999 2001 2003*

Democratic Committees

0

50

100

150

200

Millions of Dollars

1999 2001 2003*

Republican Committees

0

50

100

150

200

Millions of Dollars
58 Chapter Seven

CHART 7-6

Democratic National Committee

Nonelection Year Fundraising

Federal Dollars

Nonfederal Dollars*

Chart 6-8

Democratic National Committee

* As of November 6, 2002, national party committees were barred from raising and spending nonfederal funds. 2 U.S.C. 

§441i(a).

Millions of Dollars

0

20

40

60

80

100

1993 1995 1997 1999 2001 2003
Campaign Finance Statistics 59

CHART 7-7

Republican National Committee 

Nonelection Year Fundraising

Federal Dollars

Nonfederal Dollars*

Chart 6-9

* As of November 6, 2002, national party committees were barred from raising and spending nonfederal funds. 2 U.S.C. 

§441i(a).

Millions of Dollars

0

20

40

60

80

100

1993 1995 1997 1999 2001 2003*
61

Appendix 1

Biographies of

Commissioners 

and Officers

Commissioners

Ellen L. Weintraub, Chair

April 30, 20071

Ellen Weintraub was appointed to the Federal 

Election Commission on December 6, 2002, by President George W. Bush. On December 9, 2002, Chair 

Weintraub began her tenure with the FEC as the third 

woman to serve on the Commission. Prior to her appointment, Ms. Weintraub was Of Counsel to Perkins 

Coie, LLP, and a member of its Political Law Group. 

During that time, she counseled clients on federal and

state campaign finance laws, political ethics, nonprofit 

law and lobbying regulation. Ms. Weintraub served 

on the legal team that advised the Senate Rules Committee during an election contest that arose out of the

1996 election of Senator Mary Landrieu (D-LA). During a previous stint in private practice, Ms. Weintraub 

practiced as a litigator with the New York firm of Cahill 

Gordon & Reindel.

Prior to her tenure at Perkins Coie, Ms. Weintraub 

was Counsel to the Committee on Standard of Official 

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

House Ethics Committee). The Committee on Standards is structured in a manner similar to the Commission in which a bipartisan body is evenly divided

between Republican and Democratic members. Ms. 

Weintraubʼs focus during that time was the implementation of the Ethics Reform Act of 1989 and subsequent changes to the House Code of Official Conduct. 

She also served as editor in chief of the House Ethics 

Manual and as a principal contributor to the Senate

Ethics Manual. Ms. Weintraub also advised Members 

on investigations and frequently had lead responsibility for the Committeeʼs public education and compliance intitiatives.

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

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

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

York and District of Columbia bars and the Supreme 

Court bar. She currently resides in Maryland with her

husband, Bill Dauster, and their three children.

1 Term expiration date.

Bradley A. Smith, Vice Chairman

April 30, 2005

Bradley Smith was nominated to the Commission

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

his appointment, Commissioner Smith was Professor

of Law at Capital University Law School in Columbus,

Ohio. His areas of specialty were Election Law, Comparative Election Law, Jurisprudence, Law & Economics and Civil Procedure.

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

Smith had practiced with the Columbus law firm of Vorys, Sater, Seymour & Pease. Throughout his career, 

he has also served as the United States Vice Consul 

in Guayaquil, Equador, worked as a consultant in the 

health care field and served as General Manager of 

the Small Business Association of Michigan. During his tenure at the Small Business Association, Mr. 

Smithʼs responsibilities included management of the 

organizationʼs political action committee.

Commissioner Smith received his B.A. cum laude

from Kalamazoo College in Kalamazoo, Michigan,

and his J.D. from Harvard Law School.

David M. Mason, Commissioner

April 30, 2003

David Mason was nominated to the Commission 

by President Clinton on March 4, 1998, and confirmed 

by the U.S. Senate on July 30, 1998. Prior to his 

appointment, Mr. Mason served as Senior Fellow, 

Congressional Studies, at the Heritage Foundation.

He joined Heritage in 1990 as Director of Executive

Branch Liaison. In 1995, he became Vice President, 

Government Relations, and in 1997, Mr. Mason was 

designated Senior Fellow with a focus on research,

writing and commentary on Congress and national

politics.

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

John Warner, Representative Tom Bliley and then 

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

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

of Delegates in the 48th District in 1982.
62 Appendices

Commissioner Mason attended Lynchburg College 

in Virginia and graduated cum laude from Claremont 

McKenna College in California. He is active in political and community affairs at both the local and national levels. Commissioner Mason served as Chairman 

of the FEC in 2002. He and his wife reside in Lovettsville, Virginia, with their ten children.

Danny L. McDonald, Commissioner

April 30, 2005

Now serving his fourth term as Commissioner, 

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

2000. Before his original appointment, Mr. McDonald 

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 the chief clerk of the

board. He was also a member of the Advisory Panel 

to the FECʼs Clearinghouse on Election Administration.

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

University and attended the John F. Kennedy School 

of Government at Harvard University. He served as 

the FEC Chairman in 1983, 1989, 1995 and 2001.

Scott E. Thomas, Commissioner

April 30, 2003

Scott Thomas was appointed to the Commission 

1986 and reappointed in 1991 and 1998. He served 

as acting chairman during the last four months of

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

serving as a Commissioner, Mr. Thomas was the executive assistant to former Commissioner Thomas E. 

Harris. He originally joined the FEC as a legal intern

in 1975. He worked as a staff attorney in the Office of 

General Counsel and later became an Assistant General Counsel for Enforcement.

A Wyoming Native, Mr. Thomas graduated from

Stanford University and holds a J.D. from Georgetown

University Law Center. He is a member of the District 

of Columbia and U.S. Supreme Court bars.

Michael E. Toner, Commissioner

April 30, 2007

Michael E. Toner was nominated to the Federal 

Election Commission by President George W. Bush 

on March 4, 2002, and appointed on March 29, 2002.

Mr. Toner was confirmed by the United States Senate 

on March 18, 2003. 

Prior to being appointed to the FEC, Mr. Toner 

served as Chief Counsel of the Republican National

Committee. Mr. Toner joined the RNC in 2001 after 

serving as General Counsel of the Bush-Cheney

Transition Team in Washington, DC, and General 

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

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

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

served as counsel to the Dole/Kemp Presidential

Campaign in 1996.

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

& Fielding in Washington, DC, from 1992-1996. His 

work there included advising political committees and

corporate clients on federal and state election law

compliance. He was also involved in a number of 

First and Fourteenth Amendment appellate litigation 

matters, including two cases that were successful in

the U.S. Supreme Court.

Mr. Toner has written widely on campaign finance 

matters, including in the Washington Post, Boston 

Globe, Chicago Tribune and Washington Times. Mr. 

Toner is a lecturer in the Department of Politics at the 

University of Virginia.

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

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

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

distinction from the University of Virginia in 1986. He 

is a member of the District of Columbia and Virginia 

bars as well as the United States Supreme Court bar, 

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

District Courts for the District of Columbia and the 

Eastern District of Virginia.
Appendices 63

Statutory Officers

James A. Pehrkon, Staff Director

James Pehrkon became Staff Director on April 

14, 1999, after serving as Acting Staff Director for 

eight months. Prior to that, Mr. Pehrkon served for 

18 years as the Commissionʼs Deputy Staff Director 

with responsibilities for managing the FECʼs budget, 

administration and computer systems. Among the

agencyʼs first employees, Mr. Pehrkon is credited with 

setting up the FECʼs Data Systems Development Divi

-

sion. He directed the data division before assuming

his duties as Deputy Staff Director.

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

undergraduate degree from Harvard University and

did graduate work in foreign affairs at Georgetown 

University.

Lawrence H. Norton, General Counsel

Lawrence Norton became General Counsel of the 

FEC on September 17, 2001. Prior to joining the

Commission, Mr. Norton served as an Associate Di-

rector at the Commodity Futures Trading Commission 

for five years. He also worked as an Assistant Attor-

ney General in the Maryland Attorney Generalʼs office.

Mr. Norton graduated Order of the Coif from the 

University of Maryland School of Law.

Lynne A. McFarland, Inspector General

Lynne McFarland became the FECʼs first perma-

nent Inspector General in February 1990. She came 

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

Later, she worked as a program analyst in the Office 

of Planning and Management.

A Maryland native, Ms. McFarland holds a sociol-

ogy degree from the Frostburg State College and is a

member of the Institute of Internal Auditors.
65

Appendix 2

Chronology of Events

January

1— Chair Ellen L. Weintraub and Vice-Chairman 

Bradley A. Smith begin their one-year terms 

of office.

2 – Commission issues summary of financial 

activity of House and Senate campaign

committees, chronicling overall receipts and

disbursements since 1990.

14 – Commission issues semi-annual PAC count.

February

5 – Commission holds BCRA roundtable session regarding “Disclaimers, Use of Campaign Funds and Fraudulent Solicitations.”

12 – FEC holds BCRA roundtable session regarding “Coordinated and Independent Expenditures.”

19 – Commission holds BCRA roundtable session regarding the so-called “Millionairesʼ

Amendment.”

26 – Commission holds public hearing on Leadership PAC NPRM.

March

6 – FEC approves final rules on “Administrative

Fines Regulations.”

12-13 – FEC holds conference for House and Senate campaigns and political party committees in Washington, DC.

20 – The U.S. Court of Appeals for the Sixth 

Circuit grants motion to voluntarily dismiss

the defendantsʼ appeal in FEC v. Freedom’s 

Heritage Forum, regarding the failure to

include disclaimers in express advocacy

communications. 

21 – Commission submits to Congress its budget

request for FY 2004.

April

3 – FEC approves a Notice of Proposed Rulemaking on “Public Financing of Presidential

Candidates and Nominating Conventions.”

15 – Quarterly report due.

29-30 – FEC holds conference in Washington, DC 

for corporations.

May

2 – The U.S. District Court for the District of 

Columbia issues opinion in McConnell et al. 

v. FEC upholding certain provisions of the Bipartisan Campaign Reform Act, invalidating 

others and finding some provisions nonjusticiable.

8 – FEC submits seven legislative recommendations to Congress and President Bush.

19 – The U.S. District Court for the District of 

Columbia grants a stay in McConnell et al. v. 

FEC regarding constitutionality of BCRA.

21-22 – Commission holds conference in Boston for 

House and Senate campaigns.

June

4 – FEC releases for public comment an updated draft of the national mail voter registration

form that reflects information required by the

Help America Vote Act.

5 – In Stevens v. FEC, the U.S. District Court 

for the Northern District of Illinois grants the

Commissionʼs motion to dismiss the plaintiffsʼ complaint challenging the Commissionʼs 

final determination regarding the untimely

filing of the committeeʼs report.

6 – FEC holds public hearing on proposed

changes to its rules governing publicly financed Presidential candidates and national 

nominating conventions.

11 – FEC holds public hearing on enforcement

procedures.

16 – In Christine Beaumont, et al. v. FEC, Supreme Court rules that the prohibition on

contributions by corporations is constitutional as applied to MCFL- type advocacy

corporations.

17-18 – FEC holds conference for labor organizations in Washington, DC.

20 – U.S. Court of Appeals for upholds the decision in AFL-CIO and DNC Services Corp. 

v. FEC concerning availability of closed enforcement files.

27 – FEC certifies Democratic and Republican

partiesʼ convention committeesʼ eligibility for 

public funding.
66 Appendices

30 – Commission approves the Office of Election 

Administrationʼs report to Congress documenting impact of the National Voter Registration Act of 1993.

July

3 – Commission certifies eligibility of Howard 

Deanʼs Presidential primary committee to 

receive primary matching funds.

24 – FEC approves final rules on “The Public

Financing of Presidential Candidates and

Nominating Conventions.”

August

14 – FEC issues Statement of Policy announcing

change in its enforcement practices to allow

deponents to obtain a copy of the transcript

of their own deposition.

14 – U.S. District Court for the District of Kentucky at Louisville issues an agreed order

regarding the involvement of Timothy Hardy 

in FEC v. Freedom’s Heritage Forum.

14 – FEC approves a Notice of Proposed Rulemaking on “Multicandidate Committees and

Biennial Contribution Limits.”

14 – Commission approves a Notice of Proposed

Rulemaking on “Candidate Travel.”

18 – U.S. District Court for the District of South 

Carolina, Columbia Division, grants Commissionʼs motion for summary judgment in 

Cannon v. FEC, regarding the failure to file a 

required disclosure report.

18 – U.S. District Court for the Eastern District 

of Pennsylvania grants summary judgment

in favor of Greenwood for Congress, Inc. in

challenge to FECʼs administrative fine.

28 – Commission approves Notice of Proposed

Rulemaking on “Party Committee Phone

Banks.”

28 – FEC approves Notice of Proposed Rulemaking on “Political Committeesʼ Mailing Lists.”

29 – FEC issues semi-annual PAC count.

30 – U.S. Court for the District of Columbia grants

the Commissionʼs motion for summary judgment in Judicial Watch and Peter F. Paul v. 

FEC regarding the Commissionʼs alleged 

failure to respond to an administrative complaint.

September

3 – Commission receives Petition for Rulemaking on “Trade Association Use of Payroll 

Deduction.”

9-10 – FEC holds regional conference in Chicago

for House and Senate campaigns, political

party committees and corporations, labor

organizations, trade associations and membership organizations.

30 – U.S. District Court for the District of Columbia grants plaintiffʼs request to dismiss 

with prejudice Luis M. Correa, et al. v. FEC,

regarding the failure to file a required disclosure report in a timely manner.

October

1 – Commission holds public hearing on Notices

of Proposed Rulemakings concerning: multicandidate committees and biennial contribution limits, candidate travel and political

committee mailing lists.

8 – Commission certifies eligibility of Lyndon 

LaRoucheʼs Presidential primary committee to receive Presidential primary matching 

payments.

15 – Quarterly report due.

16 – Chair Weintraub and Vice-Chairman Smith 

testify before Committee on House Administration on FEC enforcement procedures.

November

6 – FEC approves final rules on “Party Committee Phone Banks.”

6 – Commission approves a Notice of Disposition, terminating its rulemaking on “Political

Committeesʼ Mailing Lists.”
Appendices 67

14 – Commission certifies eligibility of Joseph 

Liebermanʼs Presidential primary commit-

tee to receive Presidential primary matching 

payments.

20 – FEC approves final rules to address relation-

ship between federal candidateʼs authorized 

committee and “Leadership PAC.”

28 – Amended rules governing public funding

of Presidential campaigns and nominating

conventions take effect.

December

2 – Commission certifies eligibility of Richard 

Gephardtʼs Presidential primary committee 

to receive Presidential primary matching 

payments.

2 – Commission certifies eligibility of Wesley 

Clarkʼs Presidential primary committee to 

receive Presidential primary matching pay-

ments.

4 – Commission approves final rules on “Travel 

on Behalf of Candidates and Political Com-

mittees.”

4 – Commission certifies eligibility of John Ed-

wardsʼ Presidential primary committee to 

receive Presidential primary matching pay-

ments.

10 – Supreme Court issues ruling in McConnell 

v. FEC upholding two principal features of

Bipartisan Campaign Reform Act: control of 

soft money and regulation of electioneering

communications.

11 – FEC Staff Director James Pehrkon unveils 

agencyʼs new Enforcement Query System.

11 – FEC approves Statement of Policy Regard-

ing Disclosure of Closed Enforcement and

Related Files identifying categories of re-

cords to be released publicly.

18 – Commission elects Bradley Smith as Chair-

man and Ellen Weintraub as Vice Chair for 

2004.

23 – Commission certifies eligibility of Dennis 

Kucinichʼs Presidential primary committee to 

receive Presidential primary matching pay-

ments.
69

Appendix 3

FEC Organizational Chart

General Counsel

 Lawrence H. Norton

Complaints

Examination and 

Legal Administration

Deputy Staff Director

for Management

Information 

Technology

Planning and

Management

Administration Equal Employment

Opportunity

Commission 

Secretary

Public 

Disclosure

Audit

Inspector General

Lynne McFarland

Staff Director 

James A. Pehrkon

Information 

Congressional

Affairs

Personnel

Labor/Management

Press Office

Policy

Reports

Analysis

Litigation

Enforcement

The Commissioners

Administrative 

Review

Alternative Dispute

Resolution

Election 

Administration

Deputy Staff Director

for Audit & Review

Ellen L. Weintraub, Chair1

Bradley A. Smith, Vice Chairman2

David M. Mason, Commissioner

Danny L. McDonald, Commissioner

Scott E. Thomas, Commissioner

Michael E. Toner, Commissioner

General Law and 

Advice

1 Bradley A. Smith was elected 2004 Chairman.

2 Ellen L. Weintraub was elected 2004 Vice Chair.
71

Appendix 4

FEC Offices

This appendix briefly describes the offices within 

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

provide services to the public. Commission offices can 

also be reached toll-free at 800-424-9530 and locally

at 202-694-1100.

Administration

The Administration Division consists of a Finance 

Office and an Administration Office. The Finance Office administers the agencyʼs accounting and payroll 

programs. The Administration Office is responsible for 

procurement, contracting, space management, records management, telecommunications, building security and maintenance. In addition, the office handles 

printing, document reproduction and mail services.

Audit

Many of the Audit Divisionʼs responsibilities concern the Presidential public funding program. The 

division evaluates the matching fund submissions of

Presidential primary candidates and determines the

amount of contributions that may be matched with

federal funds. As required by law, the division audits 

all public funding recipients.

In addition, the division audits those committees 

that, according to FEC determinations, have not met

the threshold requirements for substantial compliance

with the law. Audit Division resources are also used in 

the Commissionʼs investigations of complaints.

Commission Secretary

The Commission Secretary is responsible for all

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

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

The Secretary also logs, circulates and tracks

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

matters. All matters on which a vote is taken are entered into the Secretaryʼs database.

Commissioners

The six Commissioners—no more than three of 

whom may represent the same political party—are

appointed by the President and confirmed by the Senate. 

The Commissioners serve full time and are responsible for administering and enforcing the Federal Election Campaign Act. They generally meet twice a week, 

once in closed session to discuss matters that, by law, 

must remain confidential, and once in a meeting open 

to the public. At these meetings, they formulate policy 

and vote on significant legal and administrative matters.

Congressional, Legislative and

Intergovernmental Affairs

This office serves as primary liaison with Congress

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

about Commission decisions and, in turn, for keeping

the agency up to date on legislative developments.

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

Equal Employment Opportunity

(EEO) and Special Programs

The EEO Office advises the Commission on the 

prevention of discriminatory practices and manages

the agencyʼs EEO Program.

The office is also responsible for developing a

Special Emphasis Program tailored to the training and

advancement needs of women, minorities, veterans, 

special populations and disabled employees. In addition, the EEO office recommends affirmative action 

recruitment, hiring and career advancement. The office encourages the informal resolution of complaints

during the counseling stage.

Additionally, the office develops and manages a 

variety of agency-wide special projects. These include 

the Combined Federal Campaign, the U.S. Savings 
 

72 Appendices

Bonds Drive and workshops intended to improve employeesʼ personal and professional lives.

General Counsel

The General Counselʼs Office performs its responsibilities through the Enforcement Litigation, Policy

and General Law and Advice Divisions and the Office 

of Complaint Examination and Legal Administration. 

The Policy Division drafts, for Commission consideration, advisory opinions and regulations as well

as other legal memoranda interpreting the federal

campaign finance law. In addition, the Policy Division 

provides legal advice in response to legislative inquiries and advises other divisions within the agency on

legal matters. The Policy Division also provides staff 

training throughout the agency concerning changes in

the law. 

The Enforcement Division investigates alleged violations of the law, negotiates conciliation agreements 

and recommends civil penalties for individuals and

entities that have violated the Act. 

The Litigation Division handles all civil litigation, including Title 26 cases that come before the Supreme 

Court, and represents and advises the Commission

regarding any legal actions brought by or against the

Commission. 

The General Law and Advice Division is responsible for processing all audit and repayment matters,

as well as handling debt settlements, administrative

terminations and administrative fines matters.1 In addition, this Division handles all administrative law, disclosure, FOIA, Privacy Act, employment and labor law 

matters, and it administers the Commissionʼs Ethics in 

Government Act program.

The Complaints Examination and Legal Administration Office is responsible for processing all incoming

enforcement matters (including Audit referrals) and 

tracking performance data for all of the Office of Gen1 The General Law and Advice Division was created 

during 2003. It assumed all the responsibilities of the Public

Financing, Ethics and Special Projects Division, except for

enforcement matters, and the administrative law responsibilities that formerly resided with the Policy Division.

eral Counselʼs (OGC) activities.2 This Office is also 

responsible for managing and monitoring all IT projects within OGC and managing the Law Library. 

Information

In an effort to promote voluntary compliance with 

the law, the Information Division provides technical 

assistance to candidates, committees and others involved in elections through the Internet, email, letters,

phone conversations, publications and conferences.

Responding to phone and written inquiries, members

of the staff provide information on the statute, FEC 

regulations, advisory opinions and court cases. Staff 

also lead workshops on the law and produce guides,

pamphlets and videos on how to comply with the

law. Located on the second floor, the division is open 

to the public. Local phone: 202-694-1100; toll-free 

phone: 800-424-9530.

Information Technology 

This division provides computer support for the

entire Commission. Its responsibilities are divided into

two general areas.

In the area of campaign finance disclosure, the IT

Division enters information into the FEC database 

from all reports filed by political committees and

other entities. The division is also responsible for the 

computer programs that sort and organize campaign

finance data into indexes.

These indexes permit a detailed analysis of campaign finance activity and provide a tool for monitoring 

contribution limits. The 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.

Among its duties related to internal operations, the

division provides computer support for the agencyʼs 

automation systems and for administrative functions

such as management information, document tracking, 

2 This division was created during 2003.
Appendices 73

personnel and payroll systems as well as the MUR

prioritization system.

Local phone: 202-694-1250; toll-free phone: 800-

424-9530.

Inspector General

The FECʼs Inspector General (IG) has two major 

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

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

These reports may include descriptions of any serious

problems or deficiencies in agency operations as well 

as corrective steps taken by the agency.

Law Library

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

open to the public. The library contains a basic reference collection, which includes materials on campaign

finance reform, election law and current political activity. Visitors to the law library may use its computers 

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

proceedings (MURs) may be searched in the law

library or the Public Disclosure Division. Local phone:

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

Office of Administrative Review

The Office of Administrative Review (OAR) was established in 2000 after statutory amendments permitted the Commission to impose civil money penalties

for violations of certain reporting requirements. Under 

the program, if the Commission finds “reason to believe” (RTB) that a committee failed to file a required 

report or notice, or filed it late, it will notify the committee of its finding and the amount of the proposed

civil money penalty. Within 40 days, the committee 

may challenge the RTB finding. OAR reviews these 

challenges and may recommend that the Commission uphold the RTB finding and civil money penalty, 

uphold the RTB finding but modify or waive the civil 

money penalty, determine that no violation occurred 

or terminate its proceedings. OAR also serves as the

Commissionʼs liaison with the U.S. Department of the 

Treasury on debt collection matters involving unpaid 

civil money penalties under this program.

Office of Alternative Dispute 

Resolution

The FEC established the Alternative Dispute Resolution (ADR) office to provide parties in enforcement 

actions with an alternative method for resolving complaints that have been filed against them or for addressing issues identified in the course of an FEC audit. The program is designed to promote compliance 

with the federal campaign finance law and Commission regulations, and to reduce the cost of processing

complaints by encouraging settlements outside the

agencyʼs normal enforcement track. 

Office of Election Administration

The Office of Election Administration (OEA) assists state and local election officials by responding to 

inquiries, publishing research and conducting workshops on all matters related to election administration.

Additionally, OEA answers questions from the public 

and briefs foreign delegations on the U.S. election

process, including voter registration and voting statistics. 

On April 1, 2004, the Office of Election Administration, including all staff and equipment, was formally 

transferred to the newly established Election Assistance Commission.

Office of Personnel and Labor 

Relations

The Personnel Office provides policy guidance

and operational support to managers and staff in all 

areas of human resources management. The office 

plays a critical role in helping the Commission meet

strategic performance goals by attracting, developing,

and retaining a highly qualified, diverse workforce and 
74 Appendices

providing results-driven approaches to position management and classification, pay administration and 

compensation, performance management and human resource development. Personnel also provides

expert consultation regarding employee benefits and 

wellness and family-friendly programs that sustain

and enhance the employer-employee relationship.

Additionally, the office administers the Commissionʼs 

labor-management relations program. Finally, the 

Personnel Office processes all personnel actions and

maintains all official personnel records for Commission employees.

Planning and Management

This office develops the Commissionʼs budget and, 

each fiscal year, prepares a management plan determining the allocation and use of resources throughout

the agency. Planning and Management monitors 

adherence to the plan and provides monthly reports

measuring the progress of each division in achieving

the planʼs objectives.

Press Office

Staff in the Press Office are the Commissionʼs 

official media spokespersons. In addition to publicizing Commission actions and releasing statistics on

campaign finance, they respond to all questions from 

representatives of the print and broadcast media.

Located on the first floor, the office also handles requests under the Freedom of Information Act. Local 

phone: 202-694-1220; toll-free 800-424-9530.

Public Disclosure

The Public Disclosure Division processes incoming

campaign finance reports from federal political committees and makes the reports available to the public.

Located on the first floor, the divisionʼs Public Records 

Office has a library with ample work space and knowledgeable staff to help researchers locate documents 

and computer data. The FEC encourages the public 

to review the many resources available, which include 

computer indexes, advisory opinions and closed

MURs. 

The divisionʼs Processing Office receives incoming 

reports and processes them into formats that can be

easily retrieved. These formats include paper, microfilm and digital computer images that can be easily

accessed from terminals in the Public Records Office 

and those of agency staff.

The Public Disclosure Division also manages Faxline, an automated faxing service for ordering FEC

documents, forms and publications, available 24

hours a day, 7 days a week.

Local phone: 202-694-1120; toll-free phone: 800-

424-9530; Faxline: 202-501-3413.

Reports Analysis

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

conduct detailed examinations of the campaign

finance reports filed by political committees. If an error, omission or prohibited activity (e.g., an excessive 

contribution) is discovered in the course of reviewing

a report, the analyst sends the committee a letter

which requests that the committee either amend its

reports or provide further information concerning a

particular problem. By sending these letters (RFAIs), 

the Commission seeks to ensure full disclosure and 

to encourage the committeeʼs 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; tollfree phone 800-424-9530 (press 2 on a touch-tone

phone).

Staff Director and Deputy Staff

Directors

The Staff Director is responsible for appointing 

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

administration of the agency by overseeing the Commissionʼs public disclosure activities, audit program, 

outreach efforts and review of reports.
Appendices 75

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

computer systems and the other in the areas of audit

and review.
 

77

Appendix 5

Statistics on Commission 

Operations

Summary of Disclosure Files

Total Filers 

Existing in

2003

Filers 

Terminated 

as of 

12/31/03

Continuing

Filers as of

12/31/03

Number of

Reports and 

Statements

in 2003

Gross Receipts

in 2003

(dollars)

Gross 

Expenditures

in 2003

(dollars)

Presidential Candidate 

Committees 

193 26 167 726 637,186,116 292,672,439

Senate Candidate Committees 470 117 353 2,081 319,500,451 145,811,898

House Candidate Committees 2,147 576 1,571 8,982 397,203,746 228,091,846

Party Committees

Federal Party Committees 495 95 400 3,140 785,386,220 628,559,803

Reported Nonfederal

 Party Activity 

178 22 156 0 19,796 89,486

Delegate Committees 1 0 1 5 0 132

Nonparty Committees 

Labor Committees 318 16 302 1,903 132,148,409 89,192,225

Corporate Committees 1,626 117 1,509 10,181 135,023,039 110,539,995

Membership, Trade and 

Other Committees 

2,414 314 2,100 10,784 269,663,522 209,288,079

Communication Cost Filers 293 0 293 28 0 2,123,226

Independent Expenditures by

Persons Other Than 

Political Committees

354 13 341 76 1,191,252 912,160
Divisional Statistics for Calendar Year 2003

Total

Reports Analysis Division

Documents processed 20,599

Reports reviewed 58,537

Telephone assistance and meetings 17,161

Requests for additional information (RFAIs) 8,647

Second RFAIs 3,697

Data coding and entry of RFAIs and 

 miscellaneous documents 30,807

Compliance matters referred to Office 

 of General Counsel or Audit Division 43

Administrative Fine cases initiated 282

Information Technology*

Documents receiving Pass I coding 15,481

, Documents receiving Pass III coding 44,197

Documents receiving Pass I entry 57,654

Documents receiving Pass III entry 20,984

Transactions receiving Pass III entry 

 • In-house 1,023,984

 • Contract 140,123

Public Disclosure Division

Campaign finance material processed 

 (total pages) 1,555,967

Cumulative total pages of documents 

 available for review 24,006,799

Requests for campaign finance reports 4,980

Visitors 7,528

Total people served 24,292

Information telephone calls 11,784

Computer printouts provided 37,429

Faxline requests 336

Total income (transmitted to U.S. Treasury) 10,703

Contacts with state election offices 3,367

Notices of failure to file with state 

 election offices 2

*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

Commissionʼs receipt of the report. During the second phase, Pass 

III, itemized information is coded and entered.

 Total

Administrative Division

Contracting and procurement transactions 1,090

Publications prepared for print 47

Pages of photocopying 22,000,000

Information Division 

Telephone inquiries 29,457

Information letters 201

Distribution of FEC materials 4,927

Prior notices (sent to inform filers 

 of reporting deadlines) 16,600

Other mailings 13,396

Visitors 111

Public appearances by Commissioners 

 and staff 21

Roundtable workshops 6

Publications 16

Press Office

News releases 94

Telephone inquiries from press 7,467

Visitors 922

Freedom of Information Act 

 (FOIA) requests 47

Fees for materials requested under FOIA

 (transmitted to U.S. Treasury) 0

Office of Election Administration

Telephone inquiries 3,806

National surveys conducted 3

Individual research requests 563

Materials distributed * 4,107

Election presentations/conferences 35

Foreign briefings 10

Publications 41

Public Hearings 0 

78 Appendices

,

* Figure includes National Voter Registration Act materials.
Total

Office of General Counsel

Advisory opinions 

Requests pending at beginning of 2003 

Requests received 

Issued 

2

40

35

Not issued 5

Pending at end of 2003 

Compliance cases†

Pending at beginning of 2003 

Opened 

Closed 

5

188

64

96

Transferred to ADR 53

Pending at end of 2003 

Law Library 

Telephone inquiries 

 Visitors 

103

548

322

Legal Review FECA

Pending at beginning of 2003 

Opened in 2003 

Closed in 2003 

7

45

43

Pending at end of 2003 

Litigation

Cases pending at beginning of 2003 

Cases opened 

Cases closed 

9

41

9

13

Cases pending at end of 2003 

Cases won 

37

5

Cases lost 2

Cases won/lost 

Miscellaneous Cases‡

2

4

Regulations

Notices of Proposed Rulemaking 

Final or Interim Final Rules with

5

 Explanation and Justification 

Public Rulemaking Hearings 

9

3

Appendices 79

†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.

‡

Four cases were voluntarily withdrawn by the plaintiff: three 

were withdrawn prior to dispositive motions; one was withdrawn

after dispositive motion.

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

19805 48‡ 11 59

1981 27‡ 13 40

1982 19 1 20

1983 22 0 22

1984 15 2 17

1985 4 9 13

1986 10 4 14

1987 12 4 16

1988 8 0 8

1989 2 7 9

1990 1 6 7

1991 5 8 13

1992 9 3 12

1993 10 2 12

1994 5 17 22

1995 12 0 12

1996 23 0 23

1997 7 6 13

1998 5 7 12

1999 20 7 27

2000 14 0 14

2001 15 1 16

2002 20 13 33

2003 21 4 25

Total 516 151 667 

*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 Commissionʼs 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.
Audits Completed by Audit Division, 1975 – 2003

 Total 

Presidential 130

Presidential Joint Fundraising 12

Senate 29

House 192

Party (National) 47

Party (Other) 165

Nonparty (PACs) 92

Total 667

80 Appendices

Status of Audits, 2003 

Pending

 at Beginning

of Year 

Opened Closed Pending

at End

Year

Presidential 4 0 4 0

Presidential Joint Fundraising 0 0 0 0

Senate 0 8 1 7

House 2 18 10 10

Party (National) 0 0 0 0

Party (Other) 6 1 6 1

Nonparty (PACs) 4 10 4 10

Total 16 37 25 28
81

Appendix 6

2003 Federal Register

Notices 

2003-1

Contribution Limitations and Prohibitions: Corrections 

(68 FR 1793, January 14, 2003).

2003-2

BCRA Technical Corrections (68 FR 2871, January 

22, 2003).

2003-3

Increased Contribution and Coordinated Party Expenditure Limits for Candidates Opposing Self-Financed

Candidates, Interim Final Rules (68 FR 3970, January

27, 2003).

2003-4

Filing Dates for the Texas Special Election in the 

19th Congressional District (68 FR 5020, January 31,

2003)

2003-5 

Notice of Public Hearing (68 FR 7728, February 18,

2003).

2003-6

Administrative Fines Regulations, Final Rules (68 FR

12572, March 17, 2003).

2003-7

Correction to Administrative Fines Regulations, Final Rules and Explanation and Justification (68 FR 

16715, April 7, 2003).

2003-8

Public Financing of Presidential Candidates and Nominating Conventions (68 FR 18484, April 15, 2003).

2003-9

Notice of Public Hearing and Request for Public Comment on Enforcement Procedures (68 FR 23311, May 

1, 2003)

2003-10

Extension of Public Comment Period for Public Financing of Presidential Candidates and Nominating

Conventions (68 FR 26237, May 15, 2003).

2003-11

Filing Date for the Texas Special Election in the 19th

Congressional District (68 FR 28006, May 22, 2003).

2003-12

Public Financing of Presidential Candidates and

Nominating Conventions, Final Rules (68 FR 47386,

August 8, 2003).

2003-13

Notice of Proposed Rulemaking on Multicandidate

Committees and Biennial Contribution Limits (68 FR

50488, August 21, 2003).

2003-14

Notice of Proposed Rulemaking on Candidate Travel 

(68 FR 50481, August 22, 2003).

2003-15

Statement of Policy Regarding Deposition Transcription in Nonpublic Investigations (68 FR 50688, August 

22, 2003).

2003-16

Notice of Proposed Rulemaking on Party Committee

Telephone Banks (68 FR 52529, September 4, 2003).

2003-17

Notice of Proposed Rulemaking on Mailing Lists of

Political Committees (68 FR 52531, September 4,

2003).

2003-18

Payroll Deduction Contributions to a Trade Associationʼs Separate Segregated Fund (68 FR 60887, October 24, 2003)

2003-19

Multicandidate Committees and Biennial Contribution Limits, Final Rules (68 FR 64512, November 14,

2003).

2003-20

Party Committee Phone Banks, Final Rules (68 FR

64517, November 14, 2003).
82 Appendices

2003-21

Mailing Lists of Political Committees, Notice of Disposition, Termination of Rulemaking (68 FR 64571, 

November 14, 2003).

2003-22

Leadership PACs, Final Rules (68 FR 67013, December 1, 2003).

2003-23

Public Financing of Presidential Candidates and Nominating Conventions, Announcement of Effective Date 

and Correction (68 FR 66699, November 28, 2003).

2003-24

Travel on Behalf of Candidates and Political Committees, Final Rules (68 FR 69583, December 15, 2003)

2003-25

Statement of Policy regarding Disclosure of Closed

Enforcement and Related Files (68 FR 70426, December 18, 2003).
83

Appendix 7

2003 Advisory Opinions

This appendix includes a comprehensive list of the

Advisory Opinions (AOs) issued by the Commission

throughout the year. Some of these advisory opinions

are explored in greater detail in Chapter 3 “Legal Issues.”

AO 2002-14: National Party committeeʼs lease of 

mailing list and sale of ad space and trade-mark license (Libertarian National Committee, Inc.; issued

January 31, 2003).

AO 2002-15: Affiliation of trade associations consisting of physician members who specialize in urology

(American Association of Clinical Urologists and 

American Urological Association, Inc.; issued February 4, 2003).

AO 2003-1: Nonconnected committeeʼs allocation of 

administrative expenses (NORPAC; issued March 7, 

2003).

AO 2003-2: Socialist Workers Party disclosure exemption (Socialist Workers Party National Campaign 

Committee; issued April 4, 2003)

AO 2003-3: Solicitation of funds for nonfederal candidates by federal candidates and officeholders (Representative Eric Cantor; issued April 25, 2003).

AO 2003-4: Corporationʼs matching charitable contribution plan (Freeport—McMoRan Copper and Gold,

Inc; issued April 29, 2003).

AO 2003-5: Federal Candidateʼs or officeholderʼs 

participation in membership organization fundraising

events (National Association of Home Builders of the 

United States and BUILD-PAC; issued July 14, 2003).

AO 2003-6: Transfer of payroll deduction authority 

from subsidiary to parent corporationʼs PAC (Public 

Service Enterprises Group, Inc.; issued May 9, 2003).

AO 2003-7: State leadership PACʼs refund of nonfederal funds (Virginia Highlands Advancement Fund; 

issued May 16, 2003).

AO 2003-10: Solicitation of nonfederal funds by relative of federal candidate or officeholder (Rory Reid, 

son of Senator Harry Reid; issued June 13, 2003).

AO 2003-11: State party committeeʼs payment of 

employee benefits (Michigan Democratic State Party; 

issued August 7, 2003).

AO 2003-12: Federal candidate/officeholderʼs support of ballot initiative (Representative Jeff Flake; 

issued July 29, 2003).

AO 2003-13: Qualification of “Members-in-Training” 

as members of membership organization (American

Academy of Ophthalmology, ORTHPAC; issued June 

2, 2003).

AO 2003-14: Distribution of apron pins bearing PAC 

name (Home Depot, Inc.; issued June 20, 2003).

AO 2003-15: Donations to legal expense trust fund of

federal officeholder (Representative Denise Majette;

issued August 14, 2003).

AO 2003-16: Affinity credit card program between

national bank and national party committee (Providian

National Bank; issued August 14, 2003).

AO 2003-17: Use of campaign funds to pay for criminal defense (James W. Treffinger; issued July 25, 

2003).

AO 2003-18: Impermissibility of transfer of general

election funds to charitable organization (Bob Smith

for Senate; issued July 28, 2003).

AO 2003-19: National party committeeʼs sale of office equipment (Democratic Congressional Campaign

Committee; issued August 25, 2003).

AO 2003-20: Federal officeholder solicitation for 

scholarship fund (Representative Silvestre Reyes; issued August 29, 2003).
84 Appendices

AO 2003-21: Disaffiliation of corporationsʼ PACs 

(Lehman Brothers Holdings, Inc. and Peabody Energy

Corporation; issued September 26, 2003).

AO 2003-22: Contributions collected and forwarded 

to trade association SSF by executives of member

corporations (American Bankers Association; issued 

August 28, 2003).

AO 2003-23: Earmarking contributions to Presumptive Presidential Nominee (Women Engaged in Leadership, Education and Action in Democracy; issued 

November 7, 2003).

AO 2003-24: Prohibition of the sale and use of contributor information (National Center for Tobacco-Free 

Kids; issued October 10, 2003).

AO 2003-25: Federal candidate appearing in an advertisement endorsing a nonfederal candidate (Senator Evan Bayh; issued October 17, 2003).

AO 2003-26: Impermissible use of campaign funds

by Senate campaign (Voinivich for Senate; issued 

November 7, 2003).

AO 2003-27: Status of state party as state committee

of political party (Missouri Green Party: issued November 7, 2003).

AO 2003-28: LLCʼs nonconnected PAC may become 

an SSF (Horizon Lines Associates Good Government 

Fund; issued November 24, 2003).

AO 2003-29: Transfer of funds from a nonfederal 

PAC to a federal PAC of an incorporated membership 

organization (National Fraternal Order of Police; issued November 25, 2003).

AO 2003-30: Retiring campaign debt and repaying

candidate loans (Fitzgerald for Senate Committee;

issued December 19, 2003).

AO 2003-31: Candidateʼs loans to campaign apply 

to Millionairesʼ Amendment threshold (Senator Mark 

Dayton; issued December 19, 2003).

AO 2003-32: Federal candidateʼs use of surplus 

funds from nonfederal campaign account (Inez Tenenbaum; issued December 19, 2003).

AO 2003-33: Charitable matching plan with prize for

donors. (Anheuser Busch Companies, Inc.; issued

December 12, 2003).

AO 2003-34: Reality television to simulate Presidential campaign (Showtime Networks, Viacom and TMD 

Productions; issued December 19, 2003).

AO 2003-35: Presidential candidate may withdraw

from matching payment program (Gephardt for President, Inc.; issued December 12, 2003).