September 2003 Federal Election Commission Volume 29, Number 9

Table of Contents

800 Line

1 Preparing for the 2004 Elections

Regulations

1 Final Rules on the Public

Financing of Presidential

Candidates and Nominating

Conventions

3 Notice of Proposed Rulemaking

on Multicandidate Committees

and Biennial Contribution Limits

4 Notice of Proposed Rulemaking

on Candidate Travel

4 Federal Register

7 Advisory Opinions

Administrative Fines

12 Committees Fined for Late and

Nonfiled Reports

Alternative Dispute Resolution

13 ADR Update

Publications

14 Commission Releases Federal

Elections 2002

Outreach

14 Conferences in Chicago and San

Diego

15 Public Appearances

15 Index

Compliance 800 Line

Preparing for the 2004

Elections

This article examines issues that

individuals who are considering

running for federal office, federal

candidates and their ongoing

committees need to pay special

attention to as they begin planning

for the 2004 elections:1

• Testing the waters;

• Registering as a candidate;

• Redesignating an existing campaign committee; and

• Authorizing additional committees.

Testing the Waters

Before deciding to campaign for

federal office, an individual may

first want to “test the waters”—in

other words, explore the feasibility

of becoming a candidate. An

individual who merely tests the

waters, but does not campaign for

Regulations

Final Rules 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 Bipartisan Campaign Reform Act of 2002

(BCRA) to Presidential nominating conventions;

• Harmonize the rules governing

municipal funds and host committees;

• Subject municipal funds to the

same disclosure rules as host

committees;

• Delete the requirement that only

“local” individuals and “local”

entities may donate to host committees and municipal funds;

• Modify several provisions governing the General Election Legal and

Accounting Compliance Funds

(GELAC);

• Limit the use of public funds for

winding down costs for primary

and general election Presidential

candidates; and

1 An ongoing committee is any committee that plans to continue to raise funds

and make expenditures (other than for

the purposes of paying winding down

costs and retiring past election debts in

preparation for terminating as a

campaign committee). See 11 CFR

116.1(a) and (b).

(continued on page 6)

(continued on page 2)
Federal Election Commission RECORD September 2003

2

Federal Election Commission

999 E Street, NW

Washington, DC 20463

800/424-9530

202/694-1100

202/501-3413 (FEC Faxline)

202/219-3336 (TDD for the

 hearing impaired)

Ellen L. Weintraub, Chair

Bradley A. Smith, Vice Chairman

David M. Mason, Commissioner

Danny L. McDonald,

 Commissioner

Scott E. Thomas, Commissioner

Michael E. Toner, Commissioner

James A. Pehrkon, Staff Director

Lawrence H. Norton, General

 Counsel

Published by the Information

 Division

Greg J. Scott, Assistant Staff

 Director

Amy Kort, Editor

http://www.fec.gov

• Create a new “shortfall bridge loan

exemption” from a primary

candidate’s overall expenditure

limit.

Presidential Nominating

Conventions

Application of the BCRA to

convention funding. The Commission adopted new 11 CFR section

9008.55 to address the BCRA’s

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

Federal Election Campaign Act (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.1

 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 current

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.

Federal candidates and officeholders may make a “general

solicitation” on behalf of a 501(c)

organizations so long as the

organization’s principal purpose is

not to conduct certain federal

election activity and the solicitation

does not specify how the funds

should be used. 11 CFR 300.65.

Because the principal purpose of

host committees and municipal

funds is to promote commerce in the

host city, new 11 CFR 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 provide for

more similar treatment of host

committees and municipal funds.

The regulations define municipal

funds as accounts or funds owned

by a government agency, municipality or municipal corporation whose

“receipt and use of funds is subject

to the control of officials of the state

or local government.” 11 CFR

9008.50(c). 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. Moreover,

both types of committees have

increased reporting responsibilities

and must comply, as appropriate,

with the filing requirements at 11

CFR part 104. 11 CFR 9008.51.

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.

Candidate’s use of public funds.

The new rules allow candidates,

including candidates who fail to win

their party’s 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

Solicitation of 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 prohibited

GELAC solicitations before the

June 1 start date to ensure that

GELAC funds were not used to

defray primary election expenses

and to help candidates avoid the

refund of GELAC funds if the

candidate did not win the nomination. The Commission determined

that the earlier starting date was

appropriate given the early primary

1 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.

Regulations

(continued from page 1)
September 2003 Federal Election Commission RECORD

3

dates for some states in the 2004

elections. 11 CFR 9003.3(a)(1)(i).

Redesignations. 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).

Use of Funds. Under the new

rules, Presidential candidates may

use remaining GELAC funds to pay

their primary committee’s winding

down costs, and they must use

GELAC funds to pay any of their

primary committee’s 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 candidate’s expenditures

subject to the expenditure limitation as of the end of the expenditure report period; plus

• The candidate’s 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

candidates’ winding down expenses.

However, for primary election

candidates, the applicable winding

down limitations are 10 percent

rather than 2.5 percent of the

candidate’s expenditures and

expenses or the expenditure limit.

11 CFR 9034.11(b).

The new rules also allow winding

down expenses to be allocated

between the candidate’s 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 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

candidates’ expenditure limits at

new 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 candidate’s expenditure

limitation.

Additional Information

The full text of these final rules,

and their Explanation and Justification, are available on the FEC’s web

site at http://www.fec.gov/

register.htm, along with a transcript

of the June 6, 2003, public hearing

on these rules. The final rules were

published in the August 8, 2003,

Federal Register (68 FR 47386).✦

—Amy Kort

Notice of Proposed

Rulemaking on

Multicandidate Committees

and Biennial Contribution

Limits

On August 14, 2003, the Commission approved a Notice of

Proposed Rulemaking (NPRM)

proposing changes to its current

rules governing:

• Multicandidate political committee

status; and

• Biennial contribution limits for

individuals.1

The NPRM was published in the

August 21, 2003, Federal Register

(68 FR 50488) and is available on

the FEC web site at http://

www.fec.gov/register.htm.

Multicandidate Committees

Under the Federal Election

Campaign Act (the Act) and Commission regulations, a

“multicandidate committee” means

a political committee that has been

registered with the Commission or

the Secretary of the Senate for at

least six months, has received

contributions from more than 50

persons and, except for a state party

committee, has made contributions

to five or more federal candidates. 2

U.S.C. §441a(a)(4) and 11 CFR

100.5(e)(3). Prior to the Bipartisan

Campaign Reform Act of 2002

(BCRA), multicandidate committees

had significantly higher contribution

limits to candidates than did committees without multicandidate

status. However, the BCRA raised

the contribution limits for nonmulticandidate committees to

$2,000 per election to a candidate

1 The NPRM also proposes making a

conforming amendment to 11 CFR

110.1(c)(3) to reflect a statutory change

that raised the annual contribution limit

by persons other than political committees to national party committees from

$20,000 to $25,000.

(continued on page 4)
Federal Election Commission RECORD September 2003

4

and $25,000 per year to a national

party committee.2

 Moreover, the

non-multicandidate committee

limits are indexed for inflation and

may increase over time, while the

multicandidate committee limits are

not indexed for inflation.

These statutory changes have

raised the issue of whether a political committee may “opt out” of

multicandidate status, even though it

has met the requirements described

above. The Commission has preliminarily concluded that under the

Act a political committee becomes a

multicandidate committee by

operation of law rather than by

choice. See 2 U.S.C. §441a(a)(4).

The Commission proposes amending its regulations to clarify that a

political committee automatically

becomes a “multicandidate committee” once it satisfies the statutory

definition and to require a committee to certify its multicandidate

status within 10 days of this date.

The Commission requests comments

on these proposed rules, as well as

any alternative proposals for making

multicandidate status optional.

Biennial Limits

The BCRA replaced the annual

contribution limit for individuals

with new biennial contribution

limits. The BCRA also removed

language from the Act that provided

that contributions to a candidate

counted against the individual’s

annual limit for the year of the

election for which the contribution

was made. However, the Commission retained this language in its

regulation at 11 CFR 110.5(c). The

Commission proposes amending

this section to affirmatively state

that, for the purposes of the biennial

contribution limits, a contribution to

a candidate will be attributed to the

two-year period in which the

contribution is actually made,

regardless of when the candidate’s

election is held. The Commission

seeks comments on whether this

proposed revision is consistent with

the BCRA and—if the revision is

made—when it should become

effective.

Comments

Public comments on these

proposals must be submitted, in

written or electronic form, to Mai T.

Dinh, Acting Assistant General

Counsel. Comments may be sent by:

• E-mail to multicand03@fec.gov

(e-mailed comments must include

the commenter’s full name, e-mail

address and postal address);

• Fax to 202/219-3923 (send a

printed copy follow-up to ensure

legibility); or

• Overnight mail to the Federal

Election Commission, 999 E Street

NW, Washington, DC 20436.

All comments must be received

by September 19, 2003. If sufficient

requests to testify are filed with the

Commission, it will hold a public

hearing on these proposed rules on

October 1. Commenters who wish

to testify at the hearing must

indicate this intent in their written or

electronic comments.✦

—Amy Kort

2 A multicandidate committee, on the

other hand, may contribute $5,000 per

election to a candidate and $15,000 per

year to a national party committee.

Regulations

(continued from page 3)

Notice of Proposed

Rulemaking on Candidate

Travel

On August 14, 2003, the Commission approved a Notice of

Proposed Rulemaking (NPRM)

requesting comments on proposed

regulations that would establish a

simple, uniform payment system

covering all candidate travel on

either government or private airplanes and other means of transportation. The NPRM was published in

the August 21, 2003, Federal

Register (68 FR 50481) and is

available on the FEC web site at

http://www.fec.gov/register.htm.

General Rule

The Commission proposes

several changes to the candidate

travel rules at 11 CFR 114.9(e),

which address airplanes and other

means of travel owned or leased by

corporations or labor organizations.

The Commission seeks to replace

section 114.9(e) with new section

100.93, and to broaden these rules to

include means of transportation

owned by any person or government

entity.1

 Under the proposed rules, a

candidate or authorized committee

would not receive a contribution if

the committee paid the service

provider the full value of the

transportation within a time-frame

specified in these rules. The Commission seeks comments on these

proposed changes, as well as

proposals to succinctly define such

concepts as “campaign traveler” and

“service provider.”

Travel via Private Plane

Under the current rules, when a

candidate or other campaign passen1 Campaign travel using a commercial

airline or other means of commercial

transportation would continue to be

subject to the more general definition in

11 CFR 100.52, which describes the

provision of any goods or services at

less than the usual and normal charge

as an in-kind contribution.

Federal Register

Federal Register notices are

available from the FEC’s Public

Records Office, on the FEC web

site at http://www.fec.gov/

register.htm and from the FEC

faxline, 202/501-3413.

Notice 2003-12

Public Financing of Presidential

Candidates and Nominating

Conventions, Final Rules (68 FR

47386, August 8, 2003)
September 2003 Federal Election Commission RECORD

5

ger uses an airplane owned by a

person who is not in the business of

providing commercial air travel, the

candidate’s authorized committee

must pay the service provider in

advance at either the first-class

airfare or the normal charter rate,

depending on whether a destination

city is served by regularly scheduled

commercial air service. 11 CFR

114.9(e)(1). The charter rate represents the actual cost that a campaign

would incur, but for the use of the

corporate or labor airplane, to reach

a particular destination by air when

that destination is not served by

commercial air service. A candidate

campaigning in major metropolitan

areas with regularly scheduled

commercial air service, however,

will generally be able to use a

private plane and reimburse only the

equivalent of a first-class airfare.

The Commission is concerned that

this reimbursement scheme might be

unnecessarily complex and negatively affect campaigning in rural

areas. The Commission seeks

comments on three alternative

reimbursement rules:

1. The first alternative would set the

payment rate for each individual

traveling for campaign purposes

at the amount of the lowest nondiscounted first-class airfare to

the closest airport that has such

service, regardless of whether the

actual destination airport is

served by regularly scheduled

commercial air service. Under

this proposal, the campaign

committee could also reimburse

the provider of a private plane at

the coach rate to a destination

airport that is regularly served by

coach airline service but not

first-class service. Committees

would have seven calendar days

from the date of travel to reimburse the service provider rather

than paying in advance. Allowing for payment after travel is

completed would assure that the

addition of last minute passengers would not cause the service

provider to inadvertently make a

contribution to the candidate in

the amount of those passengers’

fares.

2. The second alternative would

provide for two different payment rates, closely following the

travel valuation rules under the

House and Senate ethics rules.

The first payment rate would

apply to a previously or regularly

scheduled flight by the plane’s

owner or operator between cities

with regularly scheduled commercial service. Under these

circumstances, the campaign

would pay the cost of a first-class

ticket from the point of departure

to the destination. If only coach

service is available, the coach

rate would apply. The second

payment rate would apply to a

flight scheduled specifically for

campaign travel or when routes

do not have regularly scheduled

commercial service. In this case,

the committee must pay the

charter rate.

3. The third alternative would

establish a uniform rule requiring

the committee to pay the normal

and usual cost of chartering a

plane of sufficient size to accommodate all campaign travelers,

plus the news media and security

personnel where applicable.

Because the campaign would be

responsible for the cost of

chartering the entire plane, the

addition of last minute travelers

would not increase the cost and

the payment amount would be

known prior to the time of

departure. Thus, under this

option, the Commission would

continue to require payment in

advance for the use of all airplanes not normally used for

commercial passenger service.

The Commission requests

comments on any of these proposals, as well as other suggestions for

establishing air travel rates.

Other Transportation

The Commission proposes

requiring travel via means other

than airplane to be paid for within

30 calendar days of the receipt of

the invoice, but no more than 60

calendar days after the date the

travel commenced.

Government Conveyances

The proposed rules would apply

the general rules for travel on

noncommercial aircraft and other

means of transportation to travel on

planes or other vehicles owned or

leased by the federal government or

any state or local government,

including such travel by publicly

funded Presidential and VicePresidential candidates.

Comments

The Commission invites comments on these proposed rules, as

well as any other proposed revisions

to the treatment of candidate travel

expenses. Public comments must be

submitted, in written or electronic

form, to Mai T. Dinh, Acting

Assistant General Counsel. Comments may be sent by:

• E-mail to travel2003@fec.gov (emailed comments must include the

commenter’s full name, e-mail

address and postal address);

• Fax to 202/219-3923 (send a

printed copy follow-up to ensure

legibility); or

• Overnight mail to the Federal

Election Commission, 999 E Street

NW, Washington, DC 20436.

All comments must be received

by September 19, 2003. If sufficient

requests to testify are filed with the

Commission, it will hold a public

hearing on these proposed rules on

October 1. Commenters who wish

to testify at the hearing must

indicate this intent in their written or

electronic comments.✦

—Amy Kort
Federal Election Commission RECORD September 2003

6

800 Line

(continued from page 1)

3 This requirement applies to all

candidates, including incumbents who

qualify as candidates for a future

election (see below).

office, does not have to register or

report as a candidate even if the

individual raises or spends more

than $5,000—the dollar threshold

that would normally trigger candidate registration.

Individuals who are testing the

waters must still, however, comply

with the contribution limits and

prohibitions of the Federal Election

Campaign Act (the Act). See AO

1998-18. Moreover, once an individual begins to campaign or

decides to become a candidate,

funds that were raised or spent to

test the waters apply to the $5,000

threshold for qualifying as a “candidate.”2

 11 CFR 100.72(a) and

100.131(a).

Testing the Waters vs. Campaigning. An individual may conduct a

variety of activities to test the

waters. Examples of permissible

testing-the-waters activities include

polling, travel and telephone calls

undertaken to determine whether the

individual should become a candidate. 11 CFR 100.72(a) and

100.131(a).

Certain activities, however,

indicate that the individual has

decided to become a candidate and

is no longer testing the waters. In

that case, once the individual has

raised or spent more than $5,000, he

or she must register as a candidate.

Intent to become a candidate is

apparent, for example, when individuals:

• Make or authorize statements that

refer to themselves as candidates

(“Smith in 2004” or “Smith for

Senate”);

• Use general public political

advertising to publicize their

intention to campaign;

• Raise more money than what is

reasonably needed to test the

waters or amass funds (seed

money) to be used after candidacy

is established;

• Conduct activities over a protracted period of time or shortly

before the election; or

• Take action to qualify for the

ballot. 11 CFR 100.72(b) and

100.131(b).

Recordkeeping. An individual

who tests the waters must keep

financial records. If the individual

later becomes a candidate, the

money raised and spent to test the

waters must be reported by the

campaign as contributions and

expenditures. 11 CFR 101.3.

Organizing a Testing-the-Waters

Committee. An individual may

organize a committee for testing the

waters. An exploratory committee

or a testing-the-waters committee is

not considered a political committee

under the Act and is not required to

register with the FEC or to file

reports. The name of the testing-thewaters committee, and statements

made by committee staff, must not

refer to the individual as a candidate. Thus, for instance, a testingthe-waters committee may be named

“Sam Jones Exploratory Committee,” but not “Sam Jones for Congress.”

If the committee’s activities go

beyond testing the waters and the

committee begins to campaign, the

committee must register with the

FEC (as explained below). If the

potential candidate decides to run

for federal office and becomes a

candidate, then he or she may

designate the exploratory committee

as the principal campaign committee.

Registration by Candidates and

Their Committees

An individual running for federal

office must register with the FEC

once he or she becomes a “candidate” under the Act and Commission regulations. 11 CFR 101.1(a)

and 102.12(a).3

 An individual

becomes a “candidate” when the

individual (or persons authorized to

conduct campaign activity on his or

her behalf) receives over $5,000 in

contributions or makes over $5,000

in expenditures. 11 CFR 100.3(a)(1)

and (2). Unauthorized campaign

activity on behalf of an individual

running for federal office may also

trigger candidate status unless the

individual disavows the activity by

writing a letter to the FEC within 30

days after being notified by the

agency that unauthorized activity

reported to the FEC has exceeded

$5,000. 11 CFR 100.3(a)(3).

U.S. House candidates and their

principal campaign committees file

their FEC statements and amendments directly with the FEC. U.S.

Senate candidates and their principal

campaign committees file with the

Secretary of the Senate. 11 CFR

Part 105.

Filing a Statement of Candidacy.

Candidates must file a Statement of

Candidacy on FEC Form 2 within

15 days after becoming a “candidate.” 11 CFR 101.1(a). Under the

Commission’s regulations implementing the Bipartisan Campaign

Reform Act’s “Millionaires’

Amendment,” House and Senate

candidates must disclose on their

Statement of Candidacy the amount

by which their personal spending for

the primary and general elections

will exceed the applicable threshold

amount set out in the regulations:

• For House candidates the threshold

amount is $350,000;

• For Senate candidates the threshold amount is $150,000 plus an

amount equal to $0.04 multiplied

by the voting age population in

their state. 11 CFR 400.9 and

400.20.

2 “Candidate” has a special definition

under the Federal Election Campaign

Act, as explained in this article under

the heading “Registration by Candidates and Their Committees.”
September 2003 Federal Election Commission RECORD

7

4 Filers can send a copy of the form, or

the information required on the form, to

the FEC either via fax at 202/219-0174

or via e-mail at 2022190174@fec.gov.

5 Committees that are not required to

file electronically under 11 CFR 104.18

may nevertheless choose to file their

reports and statements electronically

rather than on paper.

A candidate who does not

anticipate exceeding the threshold

may declare $0.

In addition to sending a paper

copy of the Statement to the Secretary of the Senate, Senate candidates

must also send copies by fax or email to the Commission and to each

opposing candidate.4

 11 CFR

400.20(b)(1).

House candidates who do not

intend to exceed the personal

spending threshold may send a

paper copy of FEC Form 2 to the

Commission and must also fax or email copies of the form to each

opposing candidate.5 11 CFR

400.20(b)(2). However, House

candidates who raise or spend more

than $50,000 in a calendar year, or

who expect to do so, must file their

Statement of Candidacy (and all

future reports, notices or statements)

electronically. 11 CFR 104.18. As a

result, House candidates who

declare their intent to exceed the

threshold amount in personal

spending must file FEC Form 2

electronically in addition to sending

copies to opposing candidates via

fax or e-mail. 11 CFR 400.20(b)(2).

Registration by Principal Campaign Committee. Within 10 days

after the candidate files FEC Form

2, the principal campaign committee

or other authorized committee must

register by filing FEC Form 1,

Statement of Organization, with the

Commission or the Secretary of the

Senate, as appropriate. 11 CFR

102.1(a). Please note that the name

of the committee must include the

candidate’s name. 11 CFR

102.14(a). Additionally, the principal campaign committees of House

and Senate candidates must disclose

on FEC Form 1 the committee’s fax

number and web site URL, if

available, and e-mail address. 11

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

Ballot Access. Registration with

the FEC does not mean that the

individual has qualified for the

ballot. State law governs ballot

access requirements for federal

offices; for information, consult the

appropriate state authority (generally, the secretary of state’s office).

Candidates Who Ran in a

Previous Election

A candidate who ran in 2002, or

another previous election, must file

a new FEC Form 2 (Statement of

Candidacy) within 15 days after

qualifying as a candidate (as described above) for the 2004 election

or another future election. The

candidate may either designate a

new principal campaign committee

or redesignate his or her previous

principal campaign committee (if it

has not terminated). A newly

designated committee will receive a

new FEC identification number,

while a redesignated committee will

retain its original identification

number.

If the candidate redesignates an

existing committee, the committee

need only amend its FEC Form 1

(Statement of Organization) if there

has been any change in the information, such as a change in the

committee’s name. The committee

must file the amendment within 10

days of the change in information.

11 CFR 102.2(a)(2).

Other Authorized Committees

In addition to designating the

principal campaign committee, a

candidate may designate other

authorized committees to receive

contributions and make expenditures on his or her behalf, using the

following steps:

• The candidate designates the

additional authorized committee

by filing a written designation with

the principal campaign committee.

11 CFR 101.1(b) and 102.13(a)(1).

• Within 10 days of being designated by the candidate, the authorized committee must register by

filing a Statement of Organization

(FEC Form 1) with the candidate’s

principal campaign committee. 11

CFR 102.1(b). The name of the

authorized committee must include

the candidate’s name. 11 CFR

102.14(a).

• The principal campaign committee, in turn, files both forms with

the appropriate federal, and if

necessary state, offices, as explained above.

More Information

If you have any questions or

would like more information about

any of these requirements, please

call the FEC’s Information Division

at 800/424-9530 (press 1, then 3) or

202/694-1100.✦

—Amy Kort

Advisory

Opinions

AO 2003-12

Federal Candidate/

Officeholder’s Support of

Ballot Initiative

U.S. Representative Jeff Flake

may serve as Chairman of a state

committee seeking to qualify a state

referendum and solicit funds on the

committee’s behalf, and the committee may conduct voter registration, get-out-the-vote activities and

an advertising campaign that clearly

identifies federal candidates.

However, since Representative

Flake established the committee,

and all of the committee’s intended

activities are either in connection

with a federal election or “in

connection with an election other

(continued on page 8)
Federal Election Commission RECORD September 2003

8

than an election for Federal office,”

the committee and Mr. Flake may

only raise and spend funds within

the limits and prohibitions of the

Federal Election Campaign Act (the

Act). See 2 U.S.C. §§441(e)(1) and

441a(a)(1), (2) and (3).

Background

Representative Flake is a candidate for re-election in 2004, and his

principal campaign committee is

Jeff Flake for Congress. Stop

Taxpayer Money for Politicians

(STMP) is a so-called “527 organization” that was established in

January 2003. Representative Flake

signed the documents that formed

STMP and was STMP’s first

Chairman. Representative Flake

resigned from STMP in March, but

now intends to resume his role as

Chairman and to have staff and

agents of Jeff Flake for Congress

provide significant support to

STMP. STMP plans to promote a

state referendum to repeal portions

of Arizona’s campaign finance

statute.

Analysis

Application of the Act to STMP.

The Bipartisan Campaign Reform

Act of 2002 (BCRA) prohibits

federal candidates and officeholders,

as well as their agents and entities

“directly or indirectly established,

financed, maintained, or controlled”

by them, from soliciting, receiving,

directing, transferring or spending:

• Funds in connection with a federal

election, including funds for

“federal election activity,” unless

the funds are subject to the limits,

prohibitions and reporting requirements of the Act; and

• Funds in connection with any

election other than an election for

federal office unless the funds are

not from sources barred from

contributing to federal elections or

in excess of the Act’s contribution

an initiative or ballot measure for

the ballot.2

Moreover, Representative Flake

established STMP. The ten factors

in 11 CFR 300.2(c), derived from

the affiliation factors in 11 CFR

100.5(g) and 110.3, are used to

determine whether a person or entity

“directly or indirectly established,

financed, maintained, or controlled”

another person or entity for purposes of BCRA. Because Representative Flake was among the people

who formed STMP, signed documents with the Arizona Secretary of

State forming the committee and

was its first Chairman, and because

a campaign consultant to Representative Flake also aided STMP with

its campaign filings, Representative

Flake had an active and significant

role in the committee’s formation.

11 CFR 300.2(c)(2)(ix).3

 As a result,

STMP and all of Representative

Flake’s activities on its behalf are

restricted by the Act’s fundraising

limits and prohibitions.

Organizing and staffing STMP;

coordination. Representative Flake

may serve as Chair, Officer or

1 The Commission found that the

phrasing “any election other than an

election for federal office” differs

significantly from the wording of other

provisions of the Act, such as the

prohibition on contributions and

expenditures “in connection with any

election to any political office” by

national banks and corporations

organized by the authority of Congress.

2 U.S.C. §441b(a). Where Congress

uses different terms, it must be presumed that it means different things.

The Commission determined that

Congress expressly chose to limit the

reach of section 441b(a) to elections for

a “political office” and broadened the

sweep for the restrictions at section

441i(e)(1)(B).

2 Some ballot initiative and referenda

questions do not qualify for the ballot

and never appear before voters on any

ballot. The Commission found that

there is a clear delineation between

pre-ballot qualification activities,

which do not occur in close proximity

to an election, and post-ballot qualification activities, which do occur close

to an election. All activities of a ballot

measure committee will be considered

“in connection with any election other

than an election for federal office”

once the initiative or referendum

qualifies for the ballot.

3 STMP is not affiliated with Jeff Flake

for Congress because the relationship

is sufficiently similar to that between a

campaign committee and a traditional

leadership PAC. STMP and Representative Flake may raise up to a total of

$5,000 per calendar year from any

particular permissible source without

regard to the amounts contributed to

Jeff Flake for Congress.

Advisory Opinions

(continued from page 7)

limits for candidates and political

committees.

2 U.S.C. §441i(e)(1)(A) and (B);

11 CFR 300.61 and 300.62.

The scope of section

441i(e)(1)(B), which describes “any

election other than an election for

Federal office,” is not limited to

elections for political office.

STMP’s planned activities—other

than its federal election activity

(FEA) and electioneering communications, which would be in connection with a federal election—would

fall into this category.1

 The Commission determined that all activities

of a ballot measure committee

established, financed, maintained or

controlled by a federal candidate are

“in connection with any election

other than an election for Federal

office,” including the signature

gathering and ballot qualification

stage and activity to win passage of

the measure after it qualifies for the

ballot. In contrast, the activities of a

ballot measure committee that is not

established, financed, maintained or

controlled by a federal candidate,

officeholder or an agent of either are

not “in connection with any election

other than an election for Federal

office” until the committee qualifies
September 2003 Federal Election Commission RECORD

9

Director of STMP, STMP may

employ agents and employees of

and consultants to Jeff Flake for

Congress, and these individuals may

participate in all aspects of STMP’s

governance.

These individuals’ participation

in STMP’s activities could contribute to a particular STMP communication being “coordinated” with

Representative Flake or Jeff Flake

for Congress. Commission regulations define “coordinated” as “made

in cooperation, consultation, or

concert with, or at the request or

suggestion of, a candidate, a

candidate’s authorized committee,

or their agents.” 11 CFR 109.20(a).

The regulations further provide a

three-pronged test that must be

satisfied to conclude that payments

for a coordinated communication

are made for influencing a federal

election and, thus, constitute in-kind

contributions. 11 CFR 109.21(a)(1).

Fundraising for STMP while it is

a 527 organization. Representative

Flake may support STMP by

hosting, speaking and appearing as a

featured guest at fundraising events

and soliciting for STMP by phone or

by signing fundraising letters.

However, he must comply with the

Act’s restrictions on fundraising by

federal candidates and officeholders,

and cannot solicit funds that are

outside of the Act’s amount limits

and source prohibitions.4

 11 CFR

300.60(d), 300.61 and 300.62.

Fundraising for STMP if it

becomes a tax-exempt organization.

Under the Act, a federal candidate

or officeholder may make a “general

solicitation” for a 501(c) organization, without regard to the Act’s

limits and prohibitions, if the

organization does not as its principal

purpose engage in certain types of

FEA and the solicitation does not

specify how the funds will or should

be spent. The candidate or officeholder may make a “specific

solicitation,” limited to $20,000 per

contributor, per year, in certain

cases where the organization does

not meet these criteria. 2 U.S.C.

§441(e)(4). However, the candidate

or officeholder cannot make a

“general solicitation” or a “specific

solicitation” on behalf of a 501(c)

organization that he or she established, financed, maintains or

controls. Thus, Representative Flake

can only solicit up to $5,000 per

contributor per year on behalf of

STMP even if it becomes a nonprofit organization.

Public Advocacy. Representative

Flake may publicly urge voters to

sign petitions during the signature

gathering and ballot qualification

phase and publicly advocate his

support for the measure during the

initiative campaign phase. However,

any solicitations he makes on the

committee’s behalf must comply

with the limits and prohibitions of

the Act.

Activities paid for by STMP.

Some of STMP’s planned voter

registration, get-out-the vote activities and public communications will

likely constitute FEA, which,

because Representative Flake

established the committee, must be

paid with funds subject to the limits,

prohibitions and reporting requirements of the Act.5

 Other voter

registration activity will not constitute FEA, and may be paid with

funds that comply with the Act’s

amount limitations and source

prohibitions, but not its reporting

requirements. Also, because STMP

may only raise and spend money

that is legal under the Act, it must

pay its staff with federally permissible funds.

Because STMP’s activities are

“in connection with any election

other than an election for Federal

office,” and because STMP is

established, financed, maintained or

controlled by Representative Flake,

STMP cannot use funds that are

legal under Arizona law but impermissible under the Act for any

activities, including to pay for

activities that advocate ballot

measures and/or state candidates,

such as messages that say:

• “Support Ballot Measure X”;

• “Support Ballot Measure X. Go

vote on November 2”; or

• “Support Ballot Measure X and

State Senator Jones and State

Representative Smith by voting on

November 2.”

Electioneering Communications.

STMP also plans to broadcast ads in

support of the ballot measure that

will clearly identify a federal

candidate, be publicly distributed

within 60 days of the general

election and be able to be received

by at least 50,000 people in the

Representative’s congressional

district or throughout the state.

These ads would be “electioneering

communications” as defined in

Commission regulations, and funds

from national banks, labor organizations or foreign nationals could not

be used to pay for the ads. See 2

U.S.C. §§441b(b)(2), 441e(a)(2); 11

CFR 100.29(a) and 114.2.

STMP may broadcast these ads

because it will only have permissible funds in its accounts to pay its

expenses, including these communications.6

 STMP must disclose,

4 AO 2003-3 describes how a federal

candidate or officeholder may participate in a state committee fundraiser.

Note, however, that, unlike a state party

committee, STMP could not use

nonfederal funds to pay for the

fundraiser because it can only raise

and spend federal funds.

5 Because only state, local and district

party committees can raise and spend

Levin funds, STMP cannot pay for any

activities by allocating the costs

between federal and Levin funds.

6 STMP is an unincorporated organization. Were it incorporated, it would be

barred from making electioneering

communications unless it met the

Commission’s criteria for a qualified

nonprofit corporation. 11 CFR

114.2(b)(2)(iii) and 114.10.

(continued on page 10)
Federal Election Commission RECORD September 2003

10

Advisory Opinions

(continued from page 9)

AO 2003-17

Use of Campaign Funds to

Pay for Criminal Defense

James W. Treffinger, a former

Senate candidate facing criminal

indictments, may use campaign

funds to pay for the portion of his

legal fees that relate to his status as

a candidate for federal office.

Mr. Treffinger was a Senate

candidate from New Jersey during

the 2000 and 2002 elections, and

also the County Executive for Essex

County, New Jersey. 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.

According to federal law, there

are four categories of permissible

uses of campaign funds:

• Otherwise authorized expenditures

in connection with a candidate’s

campaign for federal office;

campaign. Under the Act, however,

such payment by Essex County is

considered an excessive in-kind

contribution to Mr. Treffinger’s

campaign that must be refunded.

Therefore, the AO requires Mr.

Treffinger to refund the $29,471

contribution to Essex County within

30 days of receipt of the AO rather

than after his September 10 sentencing under his plea agreement. This

payment must take priority over the

payment of any legal fees by the

committee.

Date Issued: July 17, 2003;

Length: 10 pages.✦

—Gary Mullen

AO 2003-18

Transfer of General Election

Funds to a Charitable

Organization

Because the candidate failed to

reach the general election, the Bob

Smith for U.S. Senate committee

may not transfer funds designated

for the general election to a charitable organization.

Background

Bob Smith was a candidate for

the U.S. Senate from New Hampshire in 2002, but was defeated in

the primary.

His committee, Bob Smith for

U.S. Senate, received contributions

designated for the general election.

The committee contacted the

general election contributors and

offered a refund of their contributions. Refund checks were then sent

to every contributor that either

requested a refund or failed to

respond to the letter. Each check

bore the restriction that it must be

cashed within 90 days. Roughly

$60,000 in refund checks were not

cashed.

Mr. Smith sought to transfer any

remaining committee funds to the

American Patriot Fund (APF), a

charitable organization established

among other things, the identification of the person making the

disbursement for the ad, of any

person sharing or exercising direction or control over the activities of

that person, as well as certain

payments for electioneering communications and certain donors to

STMP. 2 U.S.C. §434(f) and 11

CFR 104.20. Representative Flake,

his agents and consultants to Jeff

Flake for Congress may participate

in the creation, production and

distribution of the ads. However, as

discussed above, such activity may

contribute to the ad satisfying the

test for a “coordinated communication,” in which case the ad would be

considered and in-kind contribution.

Date Issued: July 29, 2003;

Length: 19 pages.✦

—Amy Kort

• Ordinary and necessary expenses

incurred in connection with a

federal officeholder’s duties;

• Contributions to charitable organizations; and,

• Transfers to national, state or local

party committees.

Federal law generally prohibits

the conversion of campaign funds to

“personal use,” which occurs when

funds are used for expenses that

would exist “irrespective” of the

candidate’s election campaign or

duties as a federal officeholder. 11

CFR 113.1(g). The question of

whether the payment of legal fees

constitutes personal use is dealt with

on a case-by-case basis.

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. The criminal

indictments for which Mr.

Treffinger may use his campaign

funds include:

• Submitting a false quarterly report

to the FEC;

• Defrauding Essex county by using

Essex County Employees to staff

his campaign at the expense of the

County;

• Aiding and assisting his campaign

in making false reports to the

Commission; and

• Knowingly and willfully conspiring to misrepresent himself and a

committee under his control.

Treffinger’s 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. Under his plea

agreement with the U.S. Attorney,

Mr. Treffinger is required to pay

$29,471 in restitution to Essex

County for the monies paid by the

county to two of its employees who

were working for Mr. Treffinger’s
September 2003 Federal Election Commission RECORD

11

cashed. However, another regulation

allows six months from a refund

check’s date for the check to be

cashed or deposited before it must

be disgorged to the U.S. Treasury.2

In this case, the Commission

granted the committee an additional

90 days from its receipt of this

advisory opinion to complete the

refund process. Any general election

contributions in the committee’s

possession at the end of 90 days

must be disgorged to the U.S.

Treasury on that date.

Date Issued: July 28, 2003;

Length: 4 pages.✦

—Phillip Deen

1 If the American Patriot Fund was

denied 501(c)(3) status, the funds

would be given to another charitable

organization.

2 Under Commission regulations

implementing the so-called

“Millionaire’s Amendment,” refund

checks for “excess contributions” must

be issued within 50 days of the relevant

election, and any refund check not

cashed or deposited within six months

of the date on the check must be

disgorged to the Treasury. 11 CFR

400.53. See also 11 CFR 400.51.

Advisory Opinion Requests

AOR 2003-20

Congressman’s solicitation of

donations to charitable organization

that awards scholarships (The

Honorable Silvestre Reyes and The

Hispanic College Fund, Inc., July,

18, 2003)

AOR 2003-21

Disaffiliation of corporations’

SSFs (Lehman Brothers, Inc., July,

22, 2003)

AOR 2003-22

Collection and forwarding of

contributions to trade association

SSF by executives of corporate

members (American Bankers

Association, July 28, 2003)✦

by Mr. Smith that was seeking

501(c)(3) status from the IRS.1

Analysis

A candidate committee may

accept funds for the general election

prior to the primary if the contributions are specifically designated for

the general election and if the

committee employs a reasonable

accounting method to distinguish

them from primary election contributions. 11 CFR 102.9(e).

If the candidate does not reach

the general election, contributions

designated for the general election

must, within 60 days, be refunded to

the contributor, redesignated to a

different election or a combination

of both. 11 CFR 110.1(b)(5) and

110.2(b)(5). Commission regulations do not provide for these

contributions to be donated to

charity. See 11 CFR 102.9(e)(3),

110.1(b)(3)(i) and 110.2(b)(3)(i).

Because Mr. Smith was not a

candidate in the general election, the

committee did not have the option

of donating to APF funds from the

uncashed refunds of general election

contributions. The Act and Commission regulations do not directly

address the situation where an

attempt to refund such contributions

proves unsuccessful. However, in

analogous circumstances the

regulations require disgorgement to

the U.S. Treasury. See 11 CFR

300.12(c) and (d) and 9007.6,

9008.16 and 9038.6.

In addition, the regulations

governing such refunds of general

election contributions do not specify

a time-frame in which the refund

process must be completed—that is,

in which the refund checks must

clear the committee’s bank accounts. In this case, the committee

properly issued refund checks, and it

allowed 90 days for the checks to be

BCRA on the FEC’s

Web Site

 The Commission has added a

new section to its web site

(www.fec.gov) devoted to the

Bipartisan Campaign Reform Act

of 2002 (BCRA).

The page provides links to:

• The Federal Election Campaign

 Act, as amended by the BCRA;

• Summaries of major BCRA-

 related changes to the federal

 campaign finance law;

• Summaries of current litigation

 involving challenges to the new

 law;

• Federal Register notices

announcing new and revised

Commission regulations that

 implement the BCRA;

• BCRA-related advisory

 opinions; and

• Information on educational

 outreach offered by the

Commission, including

upcoming Roundtable sessions

 and the Commission’s

2003 conference schedule.

 The section also allows

individuals to view the

Commission’s calendar for

rulemakings, including dates for

the Notices of Proposed

Rulemaking, public hearings,

final rules and effective dates for

regulations concerning:

• Soft money;

• Electioneering Communications;

• Contribution Limitations and

 Prohibitions;

• Coordinated and Independent

 Expenditures;

• The Millionaires’ Amendment;

• Consolidated Reporting rules;

 and

• Other provisions of the BCRA.

 The BCRA section of the web

site will be continuously updated.

Visit www.fec.gov and click on

the BCRA icon.
Federal Election Commission RECORD September 2003

12

Committees Fined for

Nonfiled and Late Reports

The Commission recently

publicized its final action on 35 new

Administrative Fine cases, bringing

the total number of cases released to

the public to 640, with $883,604 in

fines collected.

Civil money penalties for late

reports are determined by the

number of days the report was late,

the amount of financial activity

involved and any prior penalties for

violations under the administrative

fines regulations. Penalties for late

reports—and for reports filed so late

as to be considered nonfiled—are

also determined by the financial

activity for the reporting period and

any prior violations. Election

sensitive reports, which include

reports and notices filed prior to an

election (i.e., 12 day pre-election,

October quarterly and October

monthly reports), receive higher

penalties. Penalties for 48-hour

notices that are filed late or not at all

are determined by the amount of the

contribution(s) not timely reported

and any prior violations.

The committees and the treasurers are assessed civil money penalties when the Commission makes its

final determination. Unpaid civil

money penalties are referred to the

Department of the Treasury for

collection.

The committees listed in the chart

at right, along with their treasurers,

were assessed civil money penalties

under the administrative fines

regulations.

Closed Administrative Fine case

files are available through the FEC

Press Office, at 800/424-9530 (press

2), and the Public Records Office, at

800/424-9530 (press 3).✦

—Amy Kort

Administrative

Fines

Committees Fined and Penalties Assessed

1

This penalty was reduced due to the level of activity on the report.

2

The Commission took no further action in this case.

 1. Alexa for Congress $600

 2. Barcia for Congress July Quarterly 2002 $1,725

 3. Barcia for Congress October Quarterly 2002 $825

 4. Battles for Congress $700

 5. Ben Allen for Congress $2,100

6. Bill Martin Congressional Committee $275

7. Borski for Congress Committee $2,700

8. Casey for Congress Committee $275

9. Celanese Americas Corporation PAC $1,000

10. Christy Ferguson for Congress Committee $500

11. Composition Roofers Local Union #30

Political Action & Education Fund $600

12. Condit for Congress $250

13. Conservative Leadership PAC $1,500

14. Dan Hagood for Congress, Inc. $900

15. Donna 2002 Congressional Campaign Committee $1,000

16. Drobac for Congress $950

17. Ducworth for Congress $1,775

18. Florida Sugar Cane League PAC $1,500

19. Friends of Ken Eggleston $01

20. Gerald Willis for Congress $900

21. Handrahan for Congress $1,050

22. Harmsen for Congress $1,800

23. Hornberger for Senate $650

24. Indiana BANKPAC—Federal $600

25. International Brotherhood of Boilermakers,

Blacksmiths, Forgers & Helpers of America

(Local 169 Boilermakers PAC) $450

26. International Federation/Professional and

Technical Engineers Legislative Education

Action Program—PAC $2,000

27. McCoy for Congress $01

28. Patriot PAC $2,500

29. Phil Sudan for Congress $775

30. Ron Daugherty for Congress

October Quarterly 2002 ____2

31. Ron Daugherty for Congress

12-Day Pre-General 2002 ____2

32. Sean Mahoney for Congress $9,000

33. Society of Thoracic Surgeons PAC (STS PAC) $1,188

34. Supporters of Engineers Local 3

Endorsed Candidates (SELEC) $1,000

35. Tom Sawyer Committee $1,550
September 2003 Federal Election Commission RECORD

13

Alternative

Dispute

Resolution

ADR Program Update

The Commission recently

resolved 13 additional cases under

the Alternative Dispute Resolution

(ADR) program. The respondents,

the alleged violations of the Federal

Election Campaign Act (the Act)

and the penalties assessed are listed

below.

1. The Commission reached

agreement with Dutch

Ruppersberger for Congress, its

treasurer, David Deger, and C. A.

Dutch Ruppersberger concerning the

use of nonfederal funds to purchase

materials for a federal campaign.

The respondents agreed to appoint

an FEC compliance officer and have

a staff person attend an FECsponsored seminar within the next

year. (ADR 081; MUR 5267)

2. The Commission reached

agreement with Ross for Congress

and its treasurer, Veronica McLeod,

regarding the committee’s failure to

disclose loan information, including

failing to file Schedule C-1 and to

clarify whether the candidate used

personal funds or borrowed loan

money from another source. The

respondents agreed to work with the

FEC staff to file amended reports in

order to terminate the committee.

(ADR 084)

3. The Commission reached

agreement with Mark Fleisher

concerning his failure to register and

report timely. Mr. Fleisher acknowledged that his Statement of Candidacy was not filed timely and

accepted admonishment for the late

filing. The ADR Office concluded,

based on a review of documents,

that allegations that Mr. Fleisher

exceeded the reporting threshold

were unsubstantiated. The ADR

Office determined that the aforementioned resolutions conclude this

matter, and the Commission concurred by dismissing the matter.

(ADR 088; MUR 5291)

4. The Commission closed the

case involving the Jeff Ballenger for

Congress Committee and M.

Eastman Chance, its treasurer. The

case had concerned the failure to

provide a signed Schedule C-1 for

one loan reported as coming from a

lending institution and the failure to

clarify the source of another loan

reported as coming from the candidate. Because the respondents had

filed revised reports with the

required documentation, the ADR

Office recommended the case be

closed and the Commission concurred by closing the file. (ADR

093)

5. The Commission reached

agreement with the Committee to

Elect Lindsey Graham and its

treasurer, Neil Byerley, concerning

excessive contributions. The respondents acknowledged that a violation

of the Act occurred and, upon

learning of the prohibited contributions, issued refunds of all excessive

contributions—with the exception

of $810 that was disgorged to the

U.S. Treasury. In addition, the

respondents sent committee staff to

an FEC seminar on campaign

finance in February 2003, instituted

new procedures for recording and

reporting campaign finances and

have agreed to appoint an FEC

Compliance Officer. In their negotiated settlement with the Commission, the respondents agreed to pay

a $1,000 civil penalty. (ADR 103)

6. The Commission reached

agreement with the Marquette

County Democratic Party and

William G. Davis, its treasurer,

regarding the committee’s failure to

register. The respondents acknowledged the requirement to register

and subsequently filed a Statement

of Organization. The respondents

agreed to select a representative to

attend an FEC-sponsored workshop

within the next year and to maintain

permanent files with copies of

federal election laws, regulations

and guidelines regarding FECrelated activity. (ADR 105; MUR

5311)

7. The Commission reached

agreement with Sean Mahoney for

Congress and its assistant treasurer,

James McKay, concerning the

committee’s failure to accurately

disclose loans. The respondents

agreed to amend reports previously

filed with the Commission, create

procedures to avoid similar reporting errors and send a representative

to an FEC-sponsored workshop

within the next year. (ADR 107)

8. The Commission reached

agreement with the Leelanau

County Democratic Committee and

John C. Dick, its treasurer, regarding the committee’s failure to

register. The respondents acknowledged that they violated the Act

when they failed to register with the

Commission and agreed to complete

the registration process. The respondents will also establish and maintain a file on FEC regulations to

provide guidance on matters pertaining to federal election campaign

activity and attend an FEC-sponsored workshop within the next

year. (ADR 108; MUR 5309)

9. The Commission reached

agreement with Phelps for Congress, its treasurer Todd Stonewater,

David Phelps and Great Ideas for

Advertising, Inc., regarding corporate contributions and excessive

contributions. Phelps for Congress,

Mr. Stonewater and Mr. Phelps

acknowledged that a violation of the

Act occurred during the tenure of a

previous treasurer. On learning of

the prohibited and excessive contributions, the current treasurer

refunded the contributions. Phelps

for Congress, Mr. Stonewater and

Mr. Phelps agreed to terminate the

committee and to pay a $300 civil

penalty.

Great Ideas for Advertising, Inc.,

acknowledged that a violation

occurred and, on learning of the

prohibited contribution, secured a

(continued on page 14)
Federal Election Commission RECORD September 2003

14

refund. This respondent agreed to

circulate a memorandum to all

corporate officers and staff concerning the prohibition against contributions or expenditures in connection

with federal elections.

The ADR Office recommended

that the Commission dismiss the

matter as it pertained to Larry’s

Electric, Diefenbach Construction,

Arclay Company, LLC, Medicap

Pharmacy and Kevin Davis. The

Commission agreed. (ADR 113;

MUR 5303)

10. The Commission reached

agreement with the Clinton Township Democratic Club and Judith L.

Strong, its treasurer, regarding the

committee’s failure to file campaign

finance reports. The respondents

acknowledged that they violated the

Act and agreed to hire an accountant

familiar with the Commission’s

reporting requirements to regularly

review their records and reports.

The respondents also agreed to send

a representative to an FEC-sponsored workshop within the next year

and to pay a $500 civil penalty.

(ADR 114; MUR 5306)

11. The Commission reached

agreement with the Mike Halleck

for Congress Committee, is treasurer Charles Presley, and the

Columbiana County (Ohio) Republican Central Committee regarding

excessive contributions. Mike

Halleck for Congress and Mr.

Presley acknowledged accepting an

excessive contribution and failing to

refund the excessive portion during

the 30-day period provided for in

Commission regulations. These

respondents agreed to attend an

FEC-sponsored seminar within the

next year, file for termination and

pay a $250 civil penalty.

The Columbiana County Republican Central Committee agreed to

select a committee representative to

attend an FEC-sponsored workshop

within the next year, establish and

maintain a file on FEC regulations

to provide guidance to the committee on matters pertaining to federal

election campaign activity and pay a

$250 civil penalty. (ADR 118; MUR

5324)

12. The Commission dismissed

another matter as it pertained to the

Halleck for Congress Committee

and Mr. Presley, and reached

agreement on the matter with the

Gallia County Republican Century

Club and its treasurer Thomas

Moulton, Jr., concerning excessive

contributions.

A review of the Halleck for

Congress Committee’s reports

confirmed that the excessive contribution in question was refunded to

the contributor within the required

30-day period. The ADR Office thus

concluded that allegations that the

Halleck for Congress Committee

and Mr. Presley violated the Act

were unsubstantiated in this matter,

and the Commission concurred by

dismissing the matter as it pertained

to these respondents.

The Commission reached agreement in the matter pertaining to the

Gallia County Republican Century

Club and Mr. Moulton. The respondents acknowledged that their

contribution to the Halleck for

Congress Committee exceeded the

Act’s contribution limits. These

respondents agreed to establish and

maintain a file on FEC regulations

to provide guidance to the Club on

matters pertaining to federal election

campaign activity and to pay a $200

civil penalty. (ADR 121; MUR

5329)

13. The Commission reached

agreement with the Hagelin 2000

Committee and its treasurer,

Blanche Woodward, concerning

corporate contributions and excessive contributions discovered during

a Commission audit. The respondents agreed to acknowledge the

errors that contributed to the audit

findings and the admonishment

conveyed in the text of the agreement. The respondents will complete their FEC reports and then file

for termination in accordance with

the provision of the Act. (ADR

123)✦

—Amy Kort

Publications

Commission Releases

Federal Elections 2002

The Commission has released

Federal Elections 2002, detailing

the official primary, runoff and

general election results for the 2002

Congressional elections. For each

state, Federal Elections 2002 lists

the names of candidates on the

ballot, party affiliations and the

number and percentages of votes

each candidate received. It also

provides charts that illustrate and

summarize election results. The

publication’s statistical data, which

is based on official figures provided

by state election officials, includes

election results as amended through

May 2003.

Federal Elections 2002 is available on the FEC web site at http://

www.fec.gov/pubrec/fe2002/

cover.htm. To obtain a free copy, or

for more information, contact the

Public Records Office at 800/424-

9530 (press 3) or 202/694-1120.✦

—Amy Kort

Alternative Dispute

Resolution

(continued from page 13)

Conferences in Chicago and

San Diego

In September and October the

Commission will hold conferences

for House and Senate campaigns,

political party committees and

corporations, labor organizations,

trade associations, membership

organizations and their respective

PACs. The conferences will consist

of a series of workshops conducted

by Commissioners and experienced

FEC staff who will explain how the

Outreach
September 2003 Federal Election Commission RECORD

15

federal campaign finance law, as

amended by the Bipartisan Campaign Reform Act of 2002 (BCRA),

applies to each of these groups.

Workshops will specifically address

rules for fundraising and reporting,

and will explain the new provisions

of the BCRA. A representative from

the IRS will also be available to

answer election-related tax questions.

Conference in Chicago

The FEC will hold a conference

in Chicago, IL, September 9-10,

2003, at the Millennium

Knickerbocker Hotel. The registration fee for this conference is $395,

which covers the cost of the conference, materials and meals, plus a

$10 late fee (for registration forms

received after August 18).

The Millennium Knickerbocker

Hotel is located at 163 E. Walton

Place on Chicago’s “Magnificent

Mile.” Call 800/621-8140 or 312/

751-8100 to make reservations, or

access the Millennium

Knickerbocker’s reservations web

page via the FEC web site at http://

www.fec.gov/pages/

infosvc.htm#Conferences.

Conference in San Diego

The FEC will hold a conference

in San Diego, CA, October 28-29,

2003, at the Hyatt Regency Islandia.

The registration fee is $385, which

covers the cost of the conference,

materials and meals. A $10 late fee

will be assessed for registration

forms received after October 6.

The Hyatt Regency Islandia is

located at 1441 Quivira Road on

San Diego’s Mission Bay. A room

rate of $159 per night is available

for conference attendees who make

reservations on or before October 6.

To make reservations call 800/233-

1234 and state that you are attending

the FEC conference, or access the

Hyatt Regency Islandia’s reservations web page via the FEC web site

at http://www.fec.gov/pages/

infosvc.htm#Conferences.

Registration Information

Conference registration information is available online. Conference

registrations will be accepted on a

first-come, first-served basis. FEC

conferences are selling out quickly

this year, so please register early.

For registration information:

• Call Sylvester Management

Corporation at 800/246-7277;

• Visit the FEC web site at http://

www.fec.gov/pages/

infosvc.htm#Conferences; or

• Send an e-mail to

lauren@sylvestermanagement.com.✦

—Amy Kort

The first number in each citation

refers to the “number” (month) of

the 2003 Record issue in which the

article appeared. The second

number, following the colon,

indicates the page number in that

issue. For example, “1:4” means

that the article is in the January

issue on page 4.

Advisory Opinions

2002-12: Disaffiliation of corporations and their PACs, 2:8

2002-14: National party

committee’s lease of mailing list

and sale of ad space and trademark license, 3:5

Index

2002-15: Affiliation of trade associations, 4:8

2003-1: Nonconnected committee’s

allocation of administrative

expenses, 4:9

2003-2: Socialist Workers Party

disclosure exemption, 5:1

2003-3: Solicitation of funds for

nonfederal candidates by federal

candidates and officeholders, 6:1

2003-4: Corporation’s matching

charitable contribution plan, 6:3

2003-5: Federal candidate’s or

officeholder’s participation in

membership organization

fundraising events, 8:1

2003-6: Transfer of payroll deduction authority, 7:4

2003-7: State leadership PAC’s

refund of nonfederal funds, 7:5

2003-10: Solicitation of nonfederal

funds by relative of federal

candidate, 8:6

2003-12: Federal candidate/

officeholder’s support of ballot

initiative, 9:7

2003-13: Qualification of “Members-in-Training” as members of

membership organization, 8:7

2003-14: Distribution of apron pins

bearing PAC name, 8:8

2003-17: Use of campaign funds to

pay for criminal defense, 9:10

2003-18: Impermissibility of

transfer of general election funds

to charitable organization, 9:10

Compliance

ADR program cases, 2:11; 3:3;

5:10; 7:10; 8:11; 9:13

Letter notification procedures, 3:2

Administrative Fine program cases,

1:25; 2:13; 3:4; 5:7; 7:6; 8:11;

9:12

MUR 5187: Corporate reimbursements of contributions, 1:22

MUR 5208: Facilitation by national

bank, 2:1

MUR 5270: Failure to accurately

report disbursements and cash-onhand, 6:7

Public hearing on enforcement

procedures, 6:7; 7:7

(continued on page 16)

Public Appearances

September 3, 2003

American University

Washington, DC

Vice-Chairman Smith

September 16, 2003

The Claremont Institute

Washington, DC

Commissioner Mason
FEDERAL ELECTION COMMISSION

999 E Street, NW

Washington, DC 20463

Official Business

Penalty for Private Use, $300

Presorted Standard

Postage and Fees Paid

Federal Election Commission

Permit Number G-31

Printed on recycled paper

Federal Election Commission RECORD September 2003

Court Cases

_____ v. FEC

– AFC-CIO and DNC Services

Corp./DNC, 8:1

– Cox, 8:3

– Cunningham, 1:19

– Greenwood for Congress, 4:4

– Hawaii Right to Life, Inc., 1:20

– Lovely, 3:4

– Luis M. Correa, 5:5

– McConnell et al., 6:1

– Stevens, 8:3

FEC v. _____

– Beaumont, 1:20; 7:1

– California Democratic Party, 5:5

– Dear for Congress, 8:4

– Fulani, 2:8

– Freedom’s Heritage Forum, 2:8;

5:5

– Toledano, 1:20

Regulations

Administrative fines, final rules, 4:1

BCRA reporting, final rules, 1:14

BCRA technical amendments, 2:6

Biennial limit, clarification, 2:1

Brokerage loans and credit lines, 2:4

Candidate travel, Notice of Proposed Rulemaking, 9:4

Contribution limits increase, 1:6

Contribution limits and prohibitions;

delay of effective date, 2:6

Coordinated and independent

expenditures, final rules, 1:10

Disclaimers, fraudulent solicitation,

civil penalties and personal use of

campaign funds, final rules, 1:8

Leadership PACs, NPRM, 2:4

Millionaires’ Amendment, interim

final rules, 2:2

Multicandidate committees and

biennial contribution limits,

Notice of Proposed Rulemaking,

9:3

Public Presidential funding and

conventions, NPRM, 5:1; postponement of hearing date, 6:9;

public hearing, 7:8; final rules,

9:1

Reports

April reporting reminder, 4:1

Draft forms and e-filing formats

available for public comment, 1:2

Filing form 3Z-1, 7:2

New forms available, 3:1

July reporting reminder, 7:1

Reports due in 2003, 1:3

Statements of Candidacy/Organization for authorized committees, 3:2

Texas special election reporting, 4:4

Index

(continued from page 2)