20864 Federal Register / Vol. 52, No. 106 / W ednesday, June 3, 1987 / Rules and Regulation^

FEDERAL ELECTION COMMISSION

11 CFR Parts 106,9001 Through 9007,

9012, and 9031 Through 9039

[Notice 1987-7]

Public Financing of Presidential

Primary and General Election

Candidates

a g e n c y : Federal Election Commission. 

a c t io n : Final rule and announcement of 

transmittal of regulations to Congress.

s u m m a r y : The Commission has revised 

its regulations governing publicly 

financed Presidential candidates. These 

regulations will be effective for the 1988 

elections. Major areas of change include 

new provisions on the use of candidate 

credit cards, settled debts, sources of 

funds for making repayments, and 

winding down costs. The new rules 

specify certain categories of committee 

obligations that may not serve as the 

basis for receiving additional matching 

funds. They also provide procedures for 

seeking rehearing of Commission final 

determinations and stays of repayment 

determinations pending an appeal. 

Further information on these and other 

revisions is provided in the 

supplementary information which 

follows.

d a t e : Further action, including the 

announcement of an effective date, will 

be taken after these regulations have 

been before Congress for 30 legislative 

days pursuant to 2 U.S.C. 438(d) and 26 

U.S.C. 9009(c) and 9039(c).

FOR FURTHER INFO RM ATION CONTACT:

Ms. Susan E. Propper, Assistant General 

Counsel, 999 E Street, NW., Washington, 

DC 20463, (202) 376-5690 or (800) 424- 

9530.

SUPPLEMENTARY INFO RM ATION: The 

Commission is publishing today the final 

text of revised rules to govern the public 

financing process for Presidential 

primary and general election 

candidates. A Notice of Proposed 

Rulemaking was published by the 

Commission on August 5,1986 to seek 

comment on proposed revisions to these 

regulations. 51 FR 28154. Of the 

comments received, five addressed the 

public financing proposals.1 In addition, 

the Commission held a public hearing on 

December 3,1988 on the proposed rules 

at which one witness appeared.

Section 438(d) of Title 2, United States 

Code, and 26 U.S.C. 9009(c) and 9039(c),

1 These and other comments also addressed a set

of proposals in the August 5 Notice concerning bank

loans to candidates and political committees. The

bank loan questions have now been made the

subject of a separate rulemaking project. See 52 FR

2416 (January 22,1987).

require that any rule or regulation 

prescribed by the Commission to carry 

out the provisions of Titles 2 and 26 of 

the United States Code be transmitted to 

the Speaker of the House of 

Representatives and the President of the 

Senate 30 legislative days before they 

are finally promulgated. These 

regulations were transmitted to 

Congress on May 26,1987.

Explanation and Justification

In the course of this rulemaking, the 

Commission considered several 

proposals for change that it did not 

ultimately incorporate into the revised 

rules. The most extensive of these 

involved a re-examination of the current 

entitlement and repayment processes for 

Presidential primary candidates. This 

inquiry was largely initiated by certain 

comments received in response to the 

Notice of Proposed Rulemaking. 

Questions were raised regarding the 

Commission’s authority to limit postineligibility entitlement, particularly for 

primary candidates who remain eligible 

through the date of nomination. Other 

issues included the Commission’s 

method of calculating repayments for 

non-qualified campaign expenses that 

remain unpaid after the candidate’s date 

of ineligibility and whether certain 

committee obligations such as 

repayments should increase the 

candidate’s entitlement to matching 

funds. These issues received detailed 

consideration during this rulemaking. 

Their impact was contrasted with the 

Commission’s present practice and 

analyzed under the current statute and 

case law. Following this analysis, the 

Commission determined to retain its 

current entitlement and repayment 

systems. Although the Commission 

remains open to suggestions that will 

improve its administration of the 

matching fund program and ease the 

burden of compliance for candidates, 

the Commission found the present 

practice to be more consistent with the 

spirit of the law and, in some cases, 

more streamlined in its application than 

the recommendations offered.

Two other issues that were raised for 

comment in the Notice of Proposed 

Rulemaking did not result in new 

regulations. One of these areas 

concerned expenditures made during the 

primary election period that benefit the 

candidate’s general election campaign. 

The Commission determined not to add 

new regulations on this point, because 

the existing law and regulations are 

sufficient to support Commisssion action 

in an appropriate case.

The second point involved the 

potential impact of changes in primary 

dates in the 1988 election cycle on the

application of the 10% and 20% rules.

See 11 CFR 9033.5 and 9033.8. While 

these date changes could affect the 

continued funding of certain primary 

candidates, the Commission felt that a 

new rule may require legislative action. 

Therefore, the Commission will continue 

to apply the 10% and 20% rules in their 

current form.

One general change was made 

throughout these regulations. All time 

periods within which a candidate must 

act or respond to a Commission 

notification now run from the date of 

service of the Commission notice 

instead of the date it is received by the 

candidate. If the notice is mailed, 3 days 

will be added to the response time in 

accordance with 11 CFR 111.2(c).

It should be noted that the regulations 

appear here in numerical order rather 

than the order in which they will be 

used by the candidates, due to the 

numbering of the corresponding 

statutory provisions. Thus, § 106.2 and 

Parts 9031 through 9039 govern the 

public financing program for 

Presidential primary candidates while 

Parts 9001 through 9007 and 9012 apply 

to publicly funded general election 

candidates.

Section 106.2 State Allocation of

Expenditures Incurred by Authorized

Committees o f Presidential Primary

Candidates Receiving Matching Funds

Paragraph (a)(1) contains a new 

sentence that requires a candidate to 

produce supporting documentation to 

show that a particular allocation method 

ar claim of exemption was reasonable if 

the Commission disputes it. As proposed 

in the August 5 Notice, the focus of this 

provision was on proving or disproving 

the appropriateness of a particular 

expenditure allocation. Under the 

revised standard, the candidate s 

response will be acceptable if he or she 

can demonstrate that a reasonable 

allocation method was applied to the 

expenditure in question.

When evaluating whether or not an 

office is a bona fide regional office, the 

Commission will consider factors such 

as the geographic proximity of the states 

covered, the timing of the primaries 

involved, and the amount of effort 

directly focussed on seeking the 

nomination in each state. The 

Commission also will consider these 

factors in determining whether the 

allocation method used for that office, 

such as the voting age population of 

each state, was reasonable under the 

circumstances.

In paragraph (b)(2)(i)(A), the last

sentence has been modified to provi

i _____iatVioti thp cost oi an
20865 Federal Register / Vol. 52, No. 106 / Wednesday, June 3, 19B7 / Rules and Regulations

advertisement does not have to be 

allocated to a particular state.

Paragraph (b)(2)(iii) has been 

amended to specify the meaning of the 

term “subsistence.” Thus, the exemption 

for expenses of an individual who 

remains in a state less than five 

consecutive days does not apply to 

expenses incurred by that individual 

which do not qualify as “subsistence.” 

For example, if the individual makes 

expenditures for holding a meeting, 

those costs will be allocable to the state 

because they do not meet the definition 

of subsistence.

There are several changes in 

paragraph (b)(2)(iv), defining overhead 

expenditures of State and regional 

offices. First, the revisions state that 

only overhead expenditures of 

committee offices may be included in 

this figure, which is significant for 

calculating compliance and fundraising 

exemptions. Thus, if a program is 

conducted from a vendor’s office, such 

as a phone bank, the overhead costs of 

that office may not be included in the

computation under this section. In 

addition, the term “telephone service 

base charges” has been broadened in 

these rules to include intra-state phone 

calls as overhead expenditures unless 

the charges relate to a special program 

or activity such as voter registration or 

get out the vote efforts. Inter-state calls 

remain exempt from allocation under 

paragraph (b)(2)(v).

Several changes also appear in 

paragraph (c)(5), on compliance costs 

and fundraising expenditures. First, the 

regulations now include crossreferences to the alternative allocation 

methods in the Commission’s Financial 

Control and Compliance Manual. These 

references have been reworded from the 

language in the August 5 Notice to make 

clear that the allocation methods in the 

Manual are not the exclusive 

alternatives available to candidates. 

Second, this section now offers 

illustrative definitions of exempt 

compliance and fundraising costs. Of 

particular interest is the inclusion of 

matching fund submission preparation 

costs as exempt compliance costs, 

mtially, one-half of these costs were 

proposed as exempt fundraising 

expenses. The comments received in 

resp°nse t° this proposal in the Notice 

oi Proposed Rulemaking urged the 

Commission to treat the full amount of 

nese preparation costs as a compliance 

expense because these costs are 

incurred to comply with the statutory 

and regulatory requirements for 

matchable contributions. In making this 

c ange, the Commission sought to limit 

ne scope of this exemption to those

costs directly related to compliance with 

the format and matchability 

requirements. This exemption does not 

cover costs associated with general 

contribution processing. While a portion 

of general contribution processing costs 

will also be exempt, the amount that is 

exempt will vary from campaign to 

campaign. In contrast, the full amount of 

submission preparation costs are 

exempted under this provision for all 

campaigns.

PART 9001—SCOPE

There is no change in Part 9001.

PART 9002—DEFINITIONS

There is no change in §§ 9002.1 

through 9002.10.

Section 9002.11 Q ualified Campaign Expense

Paragraph (b)(3) has been revised to 

explain how expenditures made by a 

general election candidate that further 

the election of other candidates for 

public office will be treated. It provides 

a mechanism for determining the extent 

to which such expenditures will be 

considered qualified campaign 

expenses. The language now found in 

paragraph (b)(3) was proposed for 

comment as new paragraph (d) in the 

Notice of Proposed Rulemaking.

There is no change in §§ 9002.12 

through 9002.15.

PART 9003—ELIGIBILITY FOR 

PAYMENTS

Section 9003.1 Candidate and

Committee Agreements

A new requirement has been added to 

paragraph (b)(4) of this section, which 

expands the definition of records to be 

produced at the audit. If the committee 

maintains its records of receipts and 

disbursements on computer, it must 

produce a computer tape containing that 

information upon request. If necessary, 

the committee will also be asked to 

explain the software capabilities of the 

system but will not be expected to 

produce the software itself.

Section 9003.2 Candidate

Certifications

Paragraph (c) of this section, 

governing the use of the candidate’s 

personal funds, contains two new 

subsections. Subsection (c)(7) states that 

repayments will not be subject to the 

$50,000 limit on expenditures from a 

candidate’s personal funds. To ensure 

that the candidate's ability to make 

unlimited repayments does not lead to a 

disregard for the restrictions imposed on 

publicly funded campaigns, this 

subsection also provides that a knowing

violation of the expenditure limits may 

cause the Commission to seek civil 

penalties in addition to any repayment 

determinations.

New subsection (c)(8) addresses the 

application of the $50,000 limit to 

disbursements made on a credit card for 

which the candidate is jointly or solely 

liable. Charges on the candidate’s credit 

card will count against the $50,000 limit 

unless they are paid in full by the 

committee, including any finance charge 

billed, no later than 60 days after the 

closing date on the billing statement.

The "closing date” is defined by this 

section as the date after which no 

further charges are included on that 

particular billing statement. In drafting 

this provision, the Commission 

considered several different dates from 

which the window for payment could 

start. One option was the payment due 

date, which was rejected because 

certain credit cards are due "upon 

receipt” and, therefore, not all credit 

cards set a definite date for payment on 

the billing statement. Other dates that 

were considered and rejected were the 

posting date or transaction date for a 

particular disbursement. Since there 

would be so many of these dates, they 

were considered to be too difficult for 

committees to track. Moreover, 

sometimes charges are not included on 

the next billing statement, which could 

interfere with the committee’s efforts to 

comply with the limits. The closing date 

appeared to be the most ascertainable of 

the dates that could be used, and will 

allow both committees and the 

Commission to determine when 

payment must be made.

It should be noted that the committee 

must pay the credit card bill within 60 

days after the closing date to avoid 

having the charges applied against the 

candidate’s $50,000 limit. Even if the 

candidate initially pays the amount due, 

the time within which the committee 

must reimburse the candidate still runs 

from the closing date on the billing 

statement. To facilitate the treasurer’s 

review of the disbursements and to 

ensure that the time limits are met, the 

committee may want to obtain a credit 

card specifically for the candidate's 

campaign charges, for which the bill is 

sent directly to the committee.

Section 9003.3 Allowable

Contributions

In the Notice of Proposed Rulemaking, 

the Commission proposed a revision of 

paragraph (a)(l)(iii) of this section 

limiting the ability of candidates to 

transfer contributions designated for the 

primary election to the legal and 

accounting compliance fund for the
20866 Federal Register / Vol. 52, No. 106 / W ednesday, June 3, 1987 / Rules and Regulations

general election campaign. Under the 

proposed rule, candidates could transfer 

these contributions only after receiving 

a redesignation from the contributor or a 

reattribution to another contributor in 

combination with a redesignation for the 

general election. The comments on this 

proposed rule urged that the 

Commission permit a negative 

confirmation approach, under which a 

candidate would simply inform 

contributors of the impending transfer 

and would be permitted to redeposit the 

funds unless the contributor objected.

After considering the comments and 

testimony received on this point, the 

Commission determined to retain the 

proposed rule. This section requires 

publicly funded candidates to follow the 

procedures recently promulgated in 

§ § 110.1 and 110.2 for redesignation and 

reattribution of contributions. See 52 FR 

760. Publicly funded candidates are 

required to comply with all regulations 

applicable to Title 2 candidates. 

Moreover, to permit a negative 

confirmation in this case would conflict 

with the Commission’s efforts to make 

clear in the new regulations that only 

the contributor, and not the candidate, 

may make contribution designations.

Other changes in § 9003.3 are 

consistent with the revisions to § 106.2. 

Thus, overhead expenditures now 

include all telephone charges except for 

those related to a special program, such 

es a voter registration effort. (Note that 

there is no distinction in the general 

election provisions between intra- and 

inter-state calls, because there are no 

state expenditure limits in the general 

election.) See paragraphs (a)(2)(ii)(A),

(b)(6)(i) and (c)(6)(i). In addition, this 

section now contains cross-references to 

the alternative allocation methods in the 

Financial Control and Compliance 

Manual for exempting compliance and 

fundraising costs. See paragraphs 

(a)(2)(ii)(A), (b)(9) and (c)(10).

Section 9003.4 Expenses Incurred Prior

to the Beginning o f the Expenditure

Report Period or Prior to Receipt o f

Federal Funds

There are no changes in this section.

Section 9003.5 Documentation o f

Disbursements

A new paragraph (d) has been added 

to this section, setting forth the 

recordkeeping requirements for capital 

assets and other assets. The lists 

maintained under paragraph (d) will 

assist the candidate and the 

Commission in determining which 

assets must be included on the 

statement of net outstanding qualified 

campaign expenses and how to assess 

their value. See § 9004.9.

PART 9004—ENTITLEMENT OF 

ELIGIBLE CANDIDATES TO 

PAYMENTS; USE OF PAYMENTS

There are no changes in § § 9004.1 

through 9004.3.

Section 9004.4 Use o f Payments

Paragraph (b)(2) has been broadened 

to state that the Commission will charge 

the full amount of debts incurred by a 

candidate against the expenditure limit, 

regardless of the amount for which the 

debts may have been settled.2 Under 

this rule, a candidate may not reduce the 

amount of expenditures counting against 

the limit by settling debts. The only 

exception is for debt settlements that 

reasonably resolve a bona fide dispute 

with the creditor. Such disputes would 

include questions regarding the value of 

the goods or services received, 

compliance with the contract between 

the candidate and the vendor or 

whether the vendor had been authorized 

to provide goods or services to the 

committee, but do not include 

settlements reached due to the 

candidate’s inability to pay. Bona fide 

disputes must be documented through 

correspondence, memoranda and any 

agreements entered into by the parties 

detailing the original amount of the 

obligation, the basis for the dispute and 

how the resolution was reached.

Paragraph (b)(4) has been revised to 

cross-reference the provision in § 9003.3 

that allows candidates to use funds in 

their legal and accounting compliance 

fund to pay civil and criminal penalties. 

Candidates may also raise additional 

funds, not subject to the contribution 

limits, to pay such penalties.

New paragraph (b)(6) provides that no 

payments may be made to the candidate 

from accounts containing public funds 

except to reimburse the candidate for 

legitimate campaign expenses. 

Candidates may not receive a salary for 

services performed for the campaign nor 

may a candidate receive compensation 

for lost income while campaigning. This 

new provision also would prohibit 

payments to a candidate for personal 

expenses such as mortgage payments or 

a child’s educational expenses. Thus, 

the candidate may only receive funds 

for expenses directly related to the 

campaign, such as his or her travel and 

subsistence costs.

New paragraph (c) specifies the 

sources of funds from which repayments 

may be made. There is no limit on the 

amount of a candidate’s personal funds 

that may be used for this purpose, as 

provided in 11 CFR 9003.2(c). Funds

2 Note that all debts must be settled in

accordance with the procedures <)f 11 CFR 114.10.

raised to make repayments will be 

subject to the limitations and 

prohibitions of the Act and must be 

aggregated with any contributions 

previously received from a contributor.

Section 9004.6 Reimbursements for

Transportation and Services Made

A vailable to Media Personnel

Candidates may continue to bill the 

media under these rules for the costs of 

transportation and services provided to 

media personnel. The amount billed may 

equal 110% of the actual direct cost of 

providing such transportation and 

services. Although the full amount spent 

by the campaign for media services is a 

qualified campaign expense that counts 

against the overall expenditure limit, 

candidates may deduct the media 

reimbursements received from that 

overall limit up to 100% of the direct cost 

of providing the services. Thus, if the 

direct cost of a reporter’s plane ride is 

$200, the campaign may bill the reporter 

$220 for the flight. If the campaign 

receives $150 from the reporter in return, 

it may only deduct $150 from expenses 

applied against the limit because the 

deduction is dependent upon the amount 

of reimbursements received. Conversely, 

if the campaign receives the full $220 

from the reporter, it may only deduct 

$200 from the limit because the 

deduction may not exceed the direct 

cost to the campaign under the rules that 

were applicable to the 1984 election 

cycle.

There are two reasons why the 1984 

rules allow campaigns to bill 110% of 

their direct costs to the media even 

though only 100% may be offset against 

the limit. First, the 110% figure eases the 

burden of accounting precisely for such 

costs in the heat of the campaign. In 

addition, this allowance permits 

reimbursements received from some 

media organizations to compensate for 

those that do not pay in full.

The revised rules expand the ability of 

campaigns to deduct media 

reimbursements from the overall limit if 

the reimbursements exceed the actual 

direct cost of providing the services. 

Paragraph (d)(1) now provides that 

committees may deduct an additional 

3% of the direct cost of providing 

services to the media if reimbursements 

in that amount are received. The 

additional 3% is intended to cover the 

administrative cost to the campaign of 

making media travel arrangements, 

tracking which media personnel are 

accompanying the candidate on each leg 

of the campaign, and billing the media 

organizations for their share of the 

expenses. These administrative costs 

are not part of the direct cost of
Federal Register / Vol. 52, No. 106 / Wednesday, June 3, 1987 / Rules and Regulations 20867

providing media transportation and 

services and may not be included in the 

calculation of direct costs for billing 

purposes, whether the committee uses 

its own staff to perform these tasks or 

hires a travel consultant and collection 

agency.

In practical terms, this new provision 

would continue to limit the amount 

billed to 110% of the direct cost of the 

services but would allow committees to 

deduct 103% rather than 100% of the 

direct costs from the expenditure limit if 

sufficient reimbursements are received. 

Thus, if a reporter is billed $220 for a 

$200 plane flight, and the reporter 

remitted the full $220, the committee 

could offset $206 rather than $200 

against the limit. If the reporter pays 

less than the actual cost, such as $150, 

the offset is limited to the amount of the 

reporter’s reimbursement. Note that this 

new provision does not increase the 

amount a campaign may bill for 

providing services, and only increases 

the size of the offset against the 

expenditure limit if the reimbursements 

exceed 100% of the direct cost to the 

campaign.

There are no changes in § § 9004.7 and 

9004.8.

Section 9004.9 Net Outstanding

Qualified Campaign Expenses

In the August 5 Notice, it was 

proposed to add a requirement that 

statements filed under this section be 

signed by the treasurer. After further 

consideration, the Commission decided 

it was unnecessary to include this 

requirement as it is already set forth in 

§ 104.14. Thus, all statements should be 

signed in accordance with § 104.14.

The definition of “cash on hand” in 

paragraph (a)(2) has been revised to 

follow the explanation of that term in 

the recent revision of § 110.1(b)(3)(ii)(A). 

See 52 FR 760, 770 (January 9,1987).

A new subsection (a)(3) has been 

added to provide that the outstanding 

obligations included on the NOQCE 

statement may not include debts for 

non-qualified campaign expenses, 

repayment obligations, or amounts paid 

to secure a surety bond pending an 

appeal of a Commission repayment 

determination. These amounts may not 

serve as a basis for retaining federal 

funds that would otherwise be repaid to 

the U.S. Treasury under 11 CFR 

9007.2(b)(3).

In paragraph (d)(1), the Commission 

«as revised the concept of capital assets 

that must be included on the NOQCE 

statement. Under the new rule, the basic 

threshold for determining whether an 

item must be included on the NOQCE 

statement is the item’s original purchase 

Price, rather than its value at the end of

the campaign. The regulations then 

permit campaigns to deduct a standard 

40% depreciation percentage from the 

purchase price to ascertain the value of 

the item for the NOQCE statement. 

Campaigns may, however, provide 

documentation showing that a higher 

depreciation allowance should be given 

for a particular item. The documentation 

provided may include an independent 

appraisal of the item’s value at the end 

of the campaign.

In the case of items purchased during 

the candidate's primary Campaign, some 

commenters urged that the Commission 

permit committees to deduct 40% for the 

primary and another 40% for 

depreciation during the general election 

campaign. However, the Commission 

has decided, given the short duration of 

the general election campaign, that only 

one 40% deduction may be taken for 

items used in both campaigns. The value 

of items transferred from the primary to 

the general election campaign should be 

calculated based on the cost of the items 

less the 40% depreciation percentage.

Paragraphs (d) (1) and (2) also cross 

reference the new recordkeeping 

requirements for capital assets and 

other assets at § 9003.5(d).

Finally, new paragraph (e) establishes 

a requirement that committees 

demonstrate the commercial 

reasonableness of a determination that 

a debt of $500 or more owed to the 

committee is wholly or partially 

uncollectible. Accounts receivable of 

less than $500 may be written off as 

uncollectible without any showing that 

the decision not to pursue payment was 

commercially reasonable.

Former paragraph (e) has been 

redesignated as paragraph (f).

Section 9004.10 Sale o f Assets

Acquired for Fundraising Purposes

There is no change in this section.

PART 9005—CERTIFICATION BY 

COMMISSION

There are no changes in this Part.

PART 9006—REPORTS AND 

RECORDKEEPING

There are no changes in this Part.

PART 9007—EXAMINATIONS AND 

AUDITS; REPAYMENTS

Section 9007.1 Audits

Paragraph (e)(3) has been modified to 

reflect the Commission’s revised 

Sunshine Act regulations. See 11 CFR 

Part 2. Since portions of final audit 

reports are considered by the 

Commission in open session, this 

subsection has been revised to indicate 

that the Commission will provide the

candidate with a copy of the open 

session agenda document 24 hours 

before that document is released to the 

public.

Section 9007.2 Repayments

Throughout this section, the time 

periods within which the candidate must 

take action now run from the date of 

service instead of the date of the 

candidate’s receipt of a Commission 

notice or determination. As indicated in 

paragraph (e) of this section, the time 

period for service by mail will be 

calculated in accordance with 11 CFR

111.2(c).

In paragraph (d)(2), the time within 

which the candidate must make 

repayment after the Commission’s final 

determination has been extended from 

20 to 30 days. This time period is now 

co-extensive with the time for filing a 

notice of appeal under 26 U.S.C. 9011(a), 

or for filing a petition for rehearing or a 

stay of the final repayment 

determination under 11 CFR 9007.5.

Section 9007.3 Extensions o f Time

There are no changes in this section. 

Section 9007.4 Additional Audits

There are no changes in this section.

Section 9007.5 Petitions for Rehearing;

Stays o f Repayment Determinations

This new section establishes 

procedures under which candidates may 

request reconsideration of Commission 

determinations. It also sets forth for the 

first time in the regulations the 

procedures the Commission will follow 

in considering stays of repayment 

determinations pending the candidate’s 

appeal.

Paragraph (a) sets the standards a 

candidate must meet to file a petition for 

rehearing. The intent of these provisions 

is to ensure that such petitions are not 

filed as a dilatory tactic. Rather, this 

section provides a mechanism under 

which a candidate may respond to 

Commission arguments he or she did not 

previously have an opportunity to 

respond to. Candidates may also raise 

new information that could not have 

been brought to the Commission’s 

attention earlier.

Under paragraph (b), candidates must 

raise all issues and arguments in support 

of their case at the appropriate stage of 

the Commission proceeding. By doing 

so, the Commission will have the 

opportunity to decide all issues before a 

matter goes to litigation. The 

Commission thereby hopes to narrow 

the issues that may otherwise result in 

litigation and ensure that it has
20888 Federal Register / Vol. 52, No. 106 / W ednesday, June 3, 1987 / Rules and Regulations

addressed all of the issues in a matter 

before a court is asked to rule on them.

Paragraph (c) establishes three 

avenues for seeking a stay of a 

Commission repayment determination 

pending the candidate’s appeal of that 

determination. Candidates may place 

the amount at issue in an interestbearing escrow account, may secure a 

surety bond guaranteeing payment of 

the amount in question plus interest, or 

may seek to qualify under the criteria 

set forth in paragraph (c)(2)(iii).

Stays are not automatic; rather, the 

candidate must demonstrate that he or 

she has met the conditions for granting a 

stay under one of the three options 

provided. If the candidate fails to do so, 

repayment must be made, 

notwithstanding the pending appeal. If 

the candidate is only contesting a 

portion of the Commission’s repayment 

determination, the amount not at issue 

on appeal must be repaid within the 

time specified in 11 CFR 9007.2.

One goal of these stay procedures is 

to protect the public treasury in the 

event the Commission’s repayment 

determination is upheld on appeal. Thus, 

for example, if the candidate chooses to 

establish an escrow account for the 

funds, all withdrawals from the account 

must be contingent on the joint 

signatures of the candidate or his or her 

agent and a representative of the 

Commission. Further, all amounts 

stayed must be repaid with interest if 

the Commission’s determination is 

upheld.

Interest begins to accrue under these 

rules 30 days after the Commission’s 

final repayment determination. This is 

the date by which repayment would 

have been due if the candidate had not 

appealed the final determination and 

sought a stay.

The criteria in paragraph (c)(2)(iii) 

follow the standards used by the ■ 

Commission to date. They are 

augmented, however, in paragraph (c)(3) 

to provide further guidance on when an 

applicant has shown a strong likelihood 

of success on the merits of the appeal. 

This paragraph incorporates the 

approach taken by the United States 

Court of Appeals for the District of 

Columbia in Washington Metropolitan

Area Transit Commission v. Holiday

Tours, Inc., 559 F.2d 841 (D.C. Cir. 1977).

Section 9007.6 Stale-dated Committee

Checks

In past election cycles, questions have 

arisen regarding the appropriate 

disposition of checks written to 

creditors or to contributors that remain 

outstanding after the campaign is over. 

Sometimes the payee cannot be located, 

other times the payee declines to cash

the check. This new section makes clear 

that committees should bring these 

checks to the Commission’s attention in 

a timely fashion.

If the committee has made attempts to 

pay the funds as intended, and has been 

unsuccessful, the committee must remit 

a check payable to the U.S. Treasury for 

the amount outstanding. The amount so 

paid will not reduce or increase the 

committee’s repayment obligation. 

Moreover, the committee may not use 

these funds for other purposes, such as 

to pay other obligations, because to do 

so could result in the receipt of a 

prohibited or excessive contribution 

from the original payee.

The Commission considered and 

rejected other possible dispositions of 

such funds, including a donation to a 

charitable organization, because these 

alternatives could be subject to varying 

interpretations, not all of which would 

be appropriate recipients of funds from 

a federally-funded campaign. Thus, the 

Commission determined to require that 

all such funds be paid to the Treasury.

PART 9012—UNAUTHORIZED 

EXPENDITURES AND 

CONTRIBUTIONS

Section 9012.6 has been deleted from 

this Part following the Supreme Court’s 

decision in NCPAC v. FEC, 470 U.S. 480 

(1985).

PART 9031—SCOPE

There are no changes in this Part 

PART 9032—DEFINITIONS

There are no changes in this Part.

PART 9033—ELIGIBILITY FOR 

PAYMENTS

Section 9033.1 Candidate and

Committee Agreements

Paragraph (b)(5) has been amended to 

expand the definition of records that 

must be produced at the audit If the 

committee maintains its records of 

receipts and disbursements on 

computer, it must produce a computer 

tape containing that information upon 

request. If necessary, the committee will 

also be asked to explain the software 

capabilities of the system but will not be • 

expected to produce the software itself. 

Committees may also choose to submit 

computer tapes with their matching fund 

submissions but are not required to do 

so under this provision.

During the 1984 election cycle, the 

Commission received several requests 

from committees to change the person or 

the bank depository named as the 

recipient for committee matching funds. 

Paragraph (b)(7) now provides that these 

requests must be made in writing and

must be signed by the candidate or 

committee treasurer before they will be 

effective.

There are no changes in §§ 9033.2 and 

9033.3.

Section 9033.4 Matching Payment

Eligibility Threshold Requirements

Two points were proposed for 

inclusion in this section in the August 5 

Notice, both of which were removed 

from the final version of the regulations. 

First, the Notice proposed to extend the 

time within which the Commission 

would make threshold certifications 

during the Presidential election year 

from 15 to 30 business days. One 

commenter raised concerns that 30 

business days could intrude significantly 

on the primary election schedule and 

that a delay of that duration could have 

a substantiaHmpact on the candidates 

affected. The Commission agreed with 

this comment and returned to the 

original 15 day period, noting however 

that this target date for certifying 

eligibility has some flexibility under the 

regulations.

A second point the Commission 

considered was whether to provide 

opportunities to cure deficiencies in a 

threshold submission before the 

Commission initiates more formal 

proceedings to find the candidate 

ineligible or to find that particular 

contributions are non-matchable. As 

proposed in the Notice of Proposed 

Rulemaking, the Commission would 

provide a maximum of two opportunities 

to cure deficiencies in the submission. 

One commenter asked that the 

Commission make this provision 

mandatory, so that candidates would 

always have up to two opportunities to 

cure.

The Commission decided it was

innecessary to include this provision in 

he regulations. It is reflected, however, 

n the Commission’s Guideline for 

Presentation in Good Order as an 

jpportunity that the staff will provide in 

in appropriate case. The time for 

naking a certification under the 

•egulations will be tolled pending the 

Commission’s receipt of the corrected 

mbmission items.

The final rule has been reorganized so 

hat the time frames for Commission 

jxamination of threshold submissions 

ire more clearly stated. In addition, the 

Commission has added a new paragraph 

b) as a result of an issue raised in the 

Notice of Proposed Rulemaking. This 

ssue concerned the potential effect of a 

candidate’s past actions in an earlier 

Dublicly funded campaign on the 

Commission's eligibility certification for

► Viof r o n r lir lo to 1TI n P W p lR d tlO Il CVC1 6 *
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New paragraph (b) provides notice that 

the Commission may consider relevant 

information in its possession, including 

the candidate’s past actions, when 

determining the candidate’s eligibility 

for matching funds.

Examples of factors the Commission 

may consider under this provision 

include a candidate's repudiation of an 

earlier candidate agreement in which he 

or she promised to pay any necessary 

repayments and civil penalties, or the 

appearance of patent irregularities 

suggesting the possibility of fraud in 

earlier matching fund submissions that 

seem to be recurring in the new request 

for certification. In some cases, the 

Commission may delay certification in 

the new election cycle until the earlier 

problem is resolved. The most egregious 

situations could result in a Commission 

denial of eligibility.

Secfion 9033.5 Determination of

Ineligibility

There are no changes in this section.

Section 9033.6 Determination of

Inactive Candidacy

There are no substantive changes in 

this section; however, the time within 

which a candidate may respond to a 

Commission notification has been 

changed to run from the date of service 

of the Commission’s notice.

Section 9033.7 Determination o f Active Candidacy

Paragraph (b) of this section has been 

amended to provide that the 

Commission may make a finding that a 

candidate is actively campaigning in a 

state more than 10 days after the 

candidate’s certification under § 9033.5 

that he or she will not be an active 

candidate in that primary. This 

provision will cover situations in which 

the candidate’s certification is made 

earlier than the regulations require. If 

the candidate later appears to be 

pursuing the nomination in that state, 

and that activity occurs too late for the 

Commission to take action within the 

normal 10 day period, the Commission 

will act as soon as practicable to 

determine whether the candidate is 

actively campaigning in that state. No 

comments were received on this 

proposal in the August 5 notice.

Section 9033.8 Eligibility Reestablishment of

In response to one of the comments on 

the Notice of Proposed Rulemaking, the 

Commission has added a new sentence 

to paragraph (c) of this section. This 

new sentence provides that expenses 

incurred during the period a candidate 

was ineligible as a result of the 10% rule

may be defrayed with matching funds as 

qualified campaign expenses if the 

candidate later re-establishes eligibility 

under this section. This approach is 

consistent with the Commission’s 

treatment of contributions received 

during an ineligible period as being 

matchable after eligibility is 

reestablished.

Section 9033.9 Failure To Comply With

Disclosure Requirements or Expenditure

Limitations

There are no substantive changes in 

this section; however, the time within 

which a candidate may respond to a 

Commission notification now runs from 

date of service instead of date of receipt 

of the Commission’s notice.

Section 9033.10 Procedures for Initial

and Final Determinations

Two cross-references have been 

added to this section. Paragraph (a)(6) 

provides that these procedures apply to 

Commission inquiries regarding a 

candidate’s statement of net outstanding 

campaign obligations. In addition, new 

paragraph (e) alerts candidates to the 

new procedures for filing a petition for 

rehearing of a final determination.

One commenter suggested that the 

Commission revise this section to 

include the relevant time periods for 

candidate responses to a Commission 

initial determination. This section 

contains the procedures for Commission 

determinations under six different 

substantive provisions. The response 

times vary under each of these 

provisions. For this reason, the 

Commission has determined that it 

would be less confusing to have the 

response times included in the 

substantive provisions rather than in 

this procedural section, to reduce the 

chance that a candidate would follow 

the wrong timetable.

Another point raised by that 

commenter was a suggestion to limit the 

time for making a Commission 

determination under this section. The 

Commission did not find that a selfimposed time limit would be appropriate 

for these determinations. In all cases, 

the Commission will continue to 

consider these issues as quickly as 

possible while allowing for full 

consideration of the circumstances of 

each case.

Section 9033.11 Documentation of

Disbursements

A new paragraph (d) has been added 

to this section, setting forth the 

recordkeeping requirements for capital 

assets and other assets. The lists 

maintained under this paragraph will 

assist the candidate and the

Commission in determining which 

assets must be included on the 

statement of net outstanding campaign 

obligations and how to assess their 

value. See section 9034.5.

PART 9034—ENTITLEMENTS

Section 9034.1 Candidate Entitlements

There are no changes in this section.

Section 9034.2 Matchable

Contributions

The Notice of Proposed Rulemaking 

contained three proposed changes in 

this section. None of these proposals 

was retained in the final regulations.

First, the Commission deleted 

proposed paragraph (c)(3)(iii), which 

would have expressly prohibited the 

attribution of a partnership contribution 

to any non-partner, including a partner’s 

spouse. This provision was deemed 

unnecessary in light of the Commission’s 

recently promulgated revision of 11 CFR

110.1, under which partnership 

contributions may only be attributed to 

individual partners. Publicly financed 

candidates are subject to that 

regulation, as they are to all Title 2 

regulations.

Second, in paragraph (c)(4), the 

Commission deleted the reference to 

traveller’s checks, on the theory that 

such checks are an example of “similar 

negotiable instruments’’ already covered 

in that provision. Thus, traveller’s 

checks submitted for matching must be 

accompanied by all required 

documentation at the time of their initial 

submission.

Paragraph (c)(4)(ii) does include, 

however, a new requirement to include 

the “name of the issuer of the negotiable 

instrument" for contributions covered by 

this paragraph. “Name of the issuer" 

means the name of the company, bank 

or agency that issued the negotiable 

instrument, such as the Postal Service or 

American Express, and not the name of 

the contributor. Since these 

contributions are not written on the 

contributor’s bank account, the 

Commission needs additional 

information to help identify the 

negotiable instrument during the 

submission review process.

Finally, the Commission deleted 

proposed paragraph (c)(8), which would 

have required that written instruments 

made payable for more than $1,000 be 

accompanied by documentation 

showing that the excessive portion was 

either reattributed to another 

contributor or refunded to the original 

contributor. Upon further consideration 

of this proposal, the Commission 

decided to continue to match the legal
23870 Federal Register / Vol. 52, No. 106 / W ednesday, June 3, 1987 / Rules and Regulations

portion of such contributions and to take 

appropriate action through the 

enforcement process, if necessary, 

concerning any excessive amount.

Section 9034.3 Non-matchable

Contributions

There are no changes in this section.

Section 9034.4 Use o f Contributions

and Matching Payments

The Commission received three 

comments in response to its proposal to 

limit winding down costs to qualified 

campaign expenses incurred before the 

candidate's date of ineligibility for 

goods and services received before that 

date. The main objective of that 

proposal was to ensure that candidates 

did not use matching funds for 

obligations incurred before their 

ineligibility date that are used to 

continue the candidates' campaign after 

that date.

One concern of the comments was 

that the proposal would force 

candidates to choose termination over 

continuing to campaign in order to 

receive winding down costs. To avoid 

this result, the Commission revised 

paragraph (a)(3) to allow for delayed 

payment of winding down costs if the 

candidate continues his or her campaign 

after the date of ineligibility. Only those 

winding down costs that relate to the 

period after the candidate has 

withdrawn or after the date of the 

nomination will be qualified campaign 

expenses.

Paragraph (a)(4), regarding payment of 

federal income taxes, has also been 

revised from the version that appeared 

in the August 5 notice. The final rule 

provides that payment of federal income 

taxes is a qualified campaign expense 

but does not count against either the 

state or overall expenditure limits. This 

result recognizes that federal taxes are 

payments to the U.S. Treasury and 

therefore may be exempted from any 

repayment consequences.

Paragraph (b)(2) has been amended to 

alert candidates to the new provision on 

debt settlements, which states that such 

settlements generally will not reduce the 

amount of expenditures counting against 

the limits.

Paragraph (b)(3) has been revised to 

include a parallel provision to the new 

section on winding down costs in 

paragraph (a)(3) of this section. Thus, 

paragraph (b)(3) now states that 

expenses incurred before the 

candidate's date of ineligibility for items 

or services to be provided after that 

date, such as expenses for continuing 

the candidate’s campaign when he or 

she is no longer eligible for public 

funding, are not qualified campaign

expenses. Expenses that meet the 

definition of winding down costs are 

exempted if they are incurred in 

accordance with paragraph (a)(3).

New paragraph (b)(5) treats any 

payment made to a candidate as a nonqualified campaign expense unless the 

payment is a reimbursement for 

legitimate campaign expenses. 

Candidates may not receive a salary for 

services performed for the campaign nor 

may a candidate receive compensation 

for lost income while campaigning. This 

new provision also would prohibit 

payments to a candidate for personal 

expenses such as mortgage payments or 

a child’s educational expenses. Thus, 

the candidate may only receive funds 

for expenses directly related to the 

campaign, such as his or her travel and 

subsistence costs.

New paragraph (c) specifies the 

sources of funds from which repayments 

may be made. There is no limit on the 

amount of a candidate’s personal funds 

that may be used for this purpose, as 

provided in 11CFR 9035.2(a). Funds 

raised to make repayments will be 

subject to the limitations and 

prohibitions of the Act and must be 

aggregated with any contributions 

previously received from a contributor.

Former paragraph (c) of this section 

has been re-designated as paragraph (d).

Section 9034.5 N et Outstanding

Campaign Obligations

The August 5 notice included a 

sentence in paragraph (a) of this section 

requiring treasurers to sign ail 

statements of net outstanding campaign 

obligations (“NOCO Statements”). This 

sentence was removed from the final 

regulations as unnecessary since 

treasurers are required to sign all 

reports and statements filed with the 

Commission under 11 CFR 104.14.

The definition of “cash on hand” in 

paragraph (a)(2) has been revised to 

follow the explanation of that term in 

the recent revision of § 110.1(b)(3)(ii)(A). 

See 52 FR 760, 770 (January 9,1987).

A new paragraph (b) has been added 

to provide that the outstanding 

obligations included on the NOCO 

statement may not include debts for 

non-qualified campaign expenses, 

repayment obligations, or amounts paid 

to secure a surety bond pending an 

appeal of a Commission repayment 

determination. These amounts will not 

serve as the basis for the candidate’s 

additional entitlement to matching 

funds.

In paragraph (c)(1), the Commission 

has revised the concept of capital assets 

that must be included on the NOCO 

statement. Under the new rule, the basic 

threshold for determining whether an

item must be included on the NOCO 

statement is the item’s original purchase 

price, rather than its value at the end of 

the campaign. The regulations then 

permit campaigns to deduct a standard 

40% depreciation percentage from the 

purchase price to ascertain the value of 

the item for the NOCO statement. 

Campaigns may, however, provide 

documentation showing that a higher 

depreciation allowance should be given 

for a particular item. The documentation 

provided may include an independent 

appraisal of the item’s value at the end 

of the campaign.

Paragraphs (d) (1) and (2) also crossreference the new recordkeeping 

requirements for capital assets and 

other assets at § 9033.11(d).

Finally, new paragraph (e) establishes 

a requirement that committees 

demonstrate the commercial 

reasonableness of a determination that 

a debt of $500 or more owed to the 

committee is wholly or partially 

uncollectible. Accounts receivable of 

less than $500 may be written off as 

uncollectible without any showing that 

the decision not to pursue payment was 

commercially reasonable.

Former paragraphs (c), (d) and (e) 

have been redesignated as paragraphs

(e), (f) and (g). Paragraph (f) also now 

requires committees to include a brief 

explanation of changes in a NOCO 

statement from the one filed previously. 

This will help the Commission to track 

the committee’s financial status more 

accurately.

Section 9034.6 Reimbursements for

Transportation and Services Made

Available to Media Personnel

Candidates may continue to bill the 

media under these rules for 

transportation and services provided to 

media personnel while they are 

travelling with the candidate. The 

amount billed may equal 110% of the 

actual direct cost of providing such 

transportation and services. Although 

the full amount spent by the campaign 

for media services is a qualified 

campaign expense that counts against 

the overall expenditure limit, candidates 

may deduct the media reimbursements 

received from that overall limit up to 

100% of the direct cost of providing the 

services. Thus, if the direct cost of a 

reporter’s plane ride is $200, the 

campaign may bill the reporter $220 for 

the flight. If the campaign receives $150 

from the reporter in return, it may only 

deduct $150 from expenses applied 

against the limit because the deduction 

is dependent upon the amount of 

reimbursements received. Conversely, if 

the campaign receives the full $220 from
Federal Register / Vol. 52, No. 106 / Wednesday, June 3, 1987 / Rules and Regulations 20871

the reporter, it may only deduct $200 

from the limit because the deduction 

may not exceed the direct cost to the 

campaign under the current rules.

There are two reasons why the 

current rules allow campaigns to bill 

110% of their direct costs to the media 

even though only 100% may be offset 

against the limit. First, the 110% figure 

eases the burden of accounting precisely 

for such costs in the heat of the 

campaign. In addition, this allowance 

permits reimbursements received from 

some media organizations to 

compensate for those that do not pay in 

full.

The revised rules expand the ability of 

campaigns to deduct media 

reimbursements from the overall limit if 

the reimbursements exceed the actual 

direct cost of providing the service. 

Paragraph (d)(1) now provides that 

committees may deduct an additional 

3% of the direct cost of providing 

services to the media if reimbursements 

in that amount are received. The 

additional 3% is intended to cover the 

administrative cost to the campaign of 

making media travel arrangements, 

tracking which media personnel are 

accompanying the candidate on each leg 

of the campaign, and billing the media 

organizations for their share of the 

expenses. These administrative costs 

are not part of the direct cost of 

providing media transportation and 

services and may not be included in the 

calculation of direct costs for billing 

purposes, whether the committee uses 

its own staff to perform these tasks or 

hires a travel consultant and collection 

agency.

In practical terms, this new provision 

would continue to limit the amount 

billed to 110% of the direct cost of the 

services but would allow committees to 

deduct 103% rather than 100% of the 

direct costs from the expenditure limit if 

sufficient reimbursements are received. 

Thus, if a reporter is billed $220 for a 

$200 plane flight, and the reporter 

remitted the full $220, the committee 

could offset $206 rather than $200 

against the limit. If the reporter pays 

less than the actual cost, such as $150, 

the offset is limited to the amount of the 

reporter’s reimbursement. Note that this 

new provision does not increase the 

amount a campaign may bill for 

providing services, and it only increases 

the size of the offset against the 

expenditure limit if the reimbursements 

exceed 100% of the direct cost to the 

campaign.

Section 9034.7

Expenditures

Allocation o f Travel

There are no changes in this section.

Section 9034.8 Joint Fundraising

Paragraph (c)(7)(i) has been amended 

to make clear that each contribution 

must be allocated according to the 

agreed upon formula rather than 

dividing the proceeds as a whole. This 

requirement is intended to ensure that 

committees do not “trade” contributions 

in order to maximize the matchability of 

their receipts. It also re-emphasizes that 

the only three exceptions to this 

allocation are those set forth in 

paragraphs (c)(7) (ii), (iii) and (iv).

A new sentence has been added to 

paragraph (c)(7)(iv) to clarify when a 

contribution is considered earmarked. 

Contributions should be made payable 

to the joint fundraising committee to 

avoid possible earmarking problems. 

However, committees may contact 

contributors for a written statement 

indicating that their contribution was 

intended as part of the general proceeds 

if it is made payable to one of the 

participants.

New paragraph (c)(8)(i)(C) requires 

that participants allocate the cost of a 

series of events on a per-event basis 

even if the participants remain the same 

throughout the series of joint fundraising 

activities.

Finally, paragraph (c)(9)(ii) has been 

revised to make clear that candidates 

must report their allocated share of joint 

fundraising expenses paid by the 

fundraising representative. These 

expenditures will count against the 

overall expenditure limit and may also, 

in appropriate cases, be allocated to a 

particular state.

Section 9034.9 Sale o f Assets Acquired

for Fundraising Purposes

There are no changes in this section.

PART 9035—EXPENDITURE 

LIMITATIONS

Section 9035.1 Campaign Expenditure

Limitation

Paragraph (a)(2) has been added to 

state that the Commission will charge 

the full amount of debts incurred by a 

candidate against the expenditure limits, 

regardless of the amount for which the 

debts may have been settled.3 Under 

this rule, a candidate may not reduce the 

amount of expenditures counting against 

the limits by settling debts. The only 

exception is for debt settlements that 

reasonably resolve a bona fide dispute 

with the creditor. Such disputes would 

include questions regarding the value of 

the goods or services received, 

compliance with the contract between 

the candidate and the vendor, or

3 Note that ail debts must be settled in

accordance with the procedures of 11 CFR 114.10.

whether the vendor had been authorized 

to provide goods or services to the 

committee, but do not include 

settlements reached due to the 

candidate's inability to pay. Bona fide 

disputes must be documented through 

correspondence, memoranda and any 

agreements entered into by the parties, 

detailing the original amount of the 

obligation, the basis for the dispute and 

how the resolution was reached.

Paragraph (c) has been revised in 

several respects. First, a sentence has 

been added to cross-reference the 

alternative methods for calculating the 

compliance and fundraising exemptions 

found in the Commission’s Financial 

Control and Compliance Manual. These 

references have been reworded from the 

language in the August 5 Notice to make 

clear that the allocation methods in the 

Manual are not the exclusive 

alternatives available to candidates. In 

addition, two new subparagraphs have 

been added to provide illustrative 

definitions of exempt compliance and 

fundraising costs. Of particular interest 

is the inclusion of matching fund 

submission preparation costs as exempt 

compliance costs. Initially, one-half of 

these costs were proposed as exempt 

fundraising expenses.

The comments received in response to 

this proposal in the Notice of Proposed 

Rulemaking urged the Commission to 

treat the full amount of these 

preparation costs as a compliance 

expense because these costs are 

incurred to comply with the statutory 

and regulatory requirements for 

matchable contributions. In making this 

change, the Commission sought to limit 

the scope of the exemption to those 

costs directly related to compliance with 

the format and matchability 

requirements. This exemption does not 

cover costs associated with general 

contribution processing. While a portion 

of general contribution processing costs 

will also be exempt, the amount that is 

exempt will vary from campaign to 

campaign. In contrast, the full amount of 

submission preparation costs are 

exempted under this provision for all 

campaigns.

Section 9035.2 Limitation on

Expenditures from Personal or Family

Funds

Paragraph (a)(1) has been revised to 

state that repayments will not be subject 

to the $50,000 limit on expenditures from 

a candidate’s personal funds. To ensure 

that the candidate’s ability to make 

unlimited repayments does not lead to a 

disregard for the restrictions imposed on 

publicly funded campaigns, this 

subsection also provides that a knowing
20872 Federal Register / Vol. 52, No. 106 / W ednesday, June 3, 1987 / Rules and Regulation^

violation of the expenditure limits may 

cause the Commission to seek civil 

penalties in addition to any repayment 

determinations.

New subsection (a)(2) addresses the 

application of the $50,000 limit to 

disbursements made on a credit card for 

which the candidate is jointly or solely 

liable. Charges on the candidate’s credit 

card will count against the $50,000 limit 

unless they are paid in full by the 

committee, including any finance charge 

billed, no later than 60 days after the 

closing date on the billing statement.

The “closing date” is defined by this 

section as the date after which no 

further charges are included on that 

particular billing statement. In drafting 

this provision, the Commission 

considered several different dates from 

which the window for payment could 

start. One option was die payment due 

date, which was rejected because 

certain credit cards are due “upon 

receipt” and, therefore, not all credit 

cards set a definite date for payment on 

the billing statement. Other dates that 

were considered and rejected were the 

posting date or transaction date for a 

particular disbursement. Since there 

would be so many of these dates, they 

were considered to be too difficult for 

committees to track. Moreover, 

sometimes charges are not included on 

the next billing statement, which could 

interfere with the committee’s efforts to 

comply with the limits. The closing date 

appeared to be the most ascertainable of 

the dates that could be used, and will 

allow both committees and the 

Commission to determine when 

payment must be made.

It should be noted that the committee 

must pay the credit card bill within 60 

days after the closing date to avoid 

having the charges applied against the 

candidate’s $50,000 limit. Even if the 

candidate initially pays the amount due, 

the time within which the committee 

must reimburse the candidate still runs 

from the closing date on the billing 

statement. To facilitate the treasurer’s 

review of the disbursements and to 

ensure that the time limits are met, the 

committee may want to obtain a credit 

card specifically for the candidate’s 

campaign charges, for which the bill is 

sent directly to the committee.

PART 9036—REVIEW OF SUBMISSION 

AND CERTIFICATION OF PAYMENTS 

BY COMMISSION

Section 9036.1 Threshold Submission

The August 5 Notice included a 

sentence in paragraph (a) of this section 

requiring treasurers to sign all threshold 

submissions. This sentence was 

removed from the final regulations as

unnecessary since treasurers are 

required to sign all reports and 

statements filed with the Commission 

under 11 CFR 104.14.

Three format requirements for 

threshold submissions that were 

proposed in the August 5 Notice were 

also deleted from the final rules as 

unnecessary. Proposed paragraph (b)(5) 

would have required a listing of 

refunded contributions regardless of 

whether they were submitted for 

matching. This proposed requirement 

was removed because the relevant 

information can be obtained either 

through the committee’s reports or 

during the Commission’s audit. Proposed 

paragraphs (b) (6) and (7) contained 

good order requirements for joint 

fundraising and entertainment event 

contributions. Since these requirements 

are already found in 11 CFR 9034.2(c)

(5), (6) and (7), it was unnecessary to 

repeat them in this section.

Section 9036.2 Additional Submissions

for Matching Fund Payments

In the August 5 Notice, the 

Commission proposed to revise 

paragraph (a) to be more explicit 

regarding the designation of dates for 

candidate submissions. Since this was 

not a substantive change, the 

Commission decided to retain the 

current language of this section and to 

continue to notify candidates of their 

designated submission dates when they 

are found eligible to receive matching 

funds.

The Notice of Proposed Rulemaking 

also included a proposed signature 

requirement for treasurers. As in 

§ 9036.1, this sentence was removed as 

unnecessary since treasurers must sign 

all reports and statements in accordance 

with 11 CFR 104.14.

Paragraph (b)(1) has been amended to 

specify that only the matchable 

contributions from the threshold 

submission should be included in the 

candidate’s first regular submission 

under this section. Since the 

Commission reviews all contributions 

submitted in the threshold submission, 

the nonmatchable contributions are 

identified for the committee’s 

information. If the committee includes 

the nonmatchable contributions in its 

first submission, it will increase the 

error rate for the submission, which will 

in turn affect the committee’s holdback 

percentage. See 11 CFR 9036.2(c)(l)(i).

Proposed subparagraph (b)(l)(iv), 

which would have required a listing of 

refunded contributions, was deleted 

from the final rules consistent with the 

deletion of that requirement from 

§ 9036.1.

Paragraph (b)(2) has been revised 

slightly with respect to the procedures 

for letter requests. The changes make 

clear that a letter request must be fully 

documented on the next date on which 

the candidate is scheduled to make a 

regular submission, that is, two weeks 

after the letter request. This 

documentation must be submitted on 

that date even if the candidate has no 

new contributions to submit for 

matching at that time. The Commission 

will not accept future letter requests 

from the candidate until the last letter 

request has been documented.

Moreover, a candidate’s failure to 

document a letter request can lead to a 

Commission repayment determination 

under 11 CFR 9038.2 that the candidate 

has received matching funds in excess 

of his or her entitlement.

In paragraphs (c)(l)(ii) and (c)(2), the 

Commission has extended the time 

within which it will certify any 

additional amounts to which the 

candidate is entitled by an additional 5 

business days. While many 

certifications will be completed in less 

time, this change will provide sufficient 

time for necessary data entry and other 

review tasks in large submissions. This 

change will have limited impact on 

candidates, however, since most of the 

funds requested in a submission will be 

certified shortly after receipt of the 

documentation. Only the amount not 

immediately paid under the “holdback 

procedure will come under this 

extended time frame. See 

§ 9036.2(c)(l)(i).

In addition, the Commission has 

lowered the error rate in paragraphs

(c)(l)(ii) and (c)(2) that will lead to an 

expanded review. Under the revised 

rules, the Commission will review an 

expanded sample of submitted 

contributions for matchability when the 

projected dollar value of the nonmatchable contributions contained in 

the submission exceeds 10% of the 

amount requested, instead of 15%.

Section 9036.3 Submission Errors and

Insufficient Documentation

There are no changes in this section.

Section 9036.4 Commission Review of

Submissions

Paragraph (c) has been revised to 

include the requirement that candidates 

notify the Commission when a 

contribution that has been submitted for 

matching does not qualify as a 

matchable contribution because it has 

been refunded.
/ W ednesday, June 3, 1987 / Rules and Regulations 20873

Section 9036.5 Resubmissions

For the first time, the regulations now 

contain a cutoff date for resubmitting 

contributions. As provided in paragraph 

(b), no contributions may be resubmitted 

for matching later than the first Tuesday 

in September of the year following the 

Presidential election year. This date 

allows a substantial amount of time for 

committees to obtain any additional 

documentation but also puts committees 

on notice that all submission activity 

must be completed on time. It will also 

allow the Treasury Department to close 

out its public funding function before the 

/ end of that fiscal year. Note that the 

cutoff dates for initial submissions occur 

earlier in the year. See 11 CFR 9036.6.

Section 9036.6 Con tinuation o f

Certification

The revised rules extend the cutoff . 

date by which all contributions must be 

initially submitted for matching and also 

set two cutoff dates rather than one. 

Instead of the fourth Monday in January, 

the final submission dates are the fourth 

Monday in February and the second 

Monday in March. These new dates 

reflect the Commission’s experience in 

the 1984 election cycle, in which several 

committees requested a one month 

extension of the last submission date.

By setting two dates, the Commission 

hopes to avoid the problem of having all 

campaigns make their last submission 

on the same date. Under the new rule, 

the last date for a committee will 

depend upon that committee’s 

designated submission schedule.

PART 9037—PAYMENTS

There are no changes in this Part.

PART 9038—EXAMINATIONS AND 

AUDITS

Section 9038.1 Audit

The time periods for candidate 

responses in this section now run from 

the date of service rather than the date 

of receipt of the Commission’s notice.

Paragraph (e)(3) has been modified to 

reflect the Commission’s revised 

Sunshine Act regulations. See 11 CFR 

Part 2. Since portions of final audit 

reports are considered by the 

Commission in open session, this 

subsection has been revised to indicate 

mat the Commission will provide the 

candidate with a copy of the open 

session agenda document 24 hours 

before that document is released to the 

public.

Section 9038.2 Repayments

aa basis ^or repayment has been 

f j Para8raph (b)(l)(v). If matching 

mnds have been paid to the candidate

on the basis of debts included on the 

NOCO statement and the candidate 

settles the debts for less than the 

amount reflected on the NOCO 

statement, resulting in a matching fund 

entitlement of less than the amount 

paid, the Commission will seek a 

repayment of the excessive amount 

paid.

Paragraph (b)(2) (iii) has been revised 

to reflect the Commission’s procedure 

for determining when a candidate no 

longer has matching funds in his or her 

account. After this point, the 

Commission will not examine committee 

expenditures to determine if federal 

funds were used for non-qualified 

campaign expenses. The approach 

adopted by the Commission for this 

purpose is to review the expenditures 

made after the committee has received 

its last matching fund payment, using 

the assumption that the federal funds 

are used on a 100% basis until they are 

spent.

Throughout this section, the time 

periods within which the candidate must 

take action now run from the date of 

service rather than the date of the 

candidate’s receipt of a Commission 

notice or determination. As indicated in 

paragraph (e) of this section, the time 

period for service by mail will be 

calculated in accordance with 11 CFR 

111.2(c).

In paragraph (d)(2), the time within 

which the candidate must make 

repayment after the Commission’s final 

determination has been extended from 

20 to 30 days. This time period is now 

coextensive with the time for filing a 

notice of appeal under 26 U.S.C. 9041(a), 

and for filing a petition for rehearing or 

a stay of the final repayment 

determination under 11 CFR 9038.5.

Section 9038.3 Liquidation o f

Obligations; Repayment

There are no changes in this section. 

Section 9038.4 Extensions o f Time

There are no changes in this section.

Section 9038.5 Petitions for Rehearing;

Stays o f Repayment Determinations

This new section establishes 

procedures under which candidates may 

request reconsideration of Commission 

determinations. It also sets forth for the 

first time in the regulations the * 

procedures the Commission will follow 

in considering stays of repayment 

determinations pending the candidate's 

appeal.

Paragraph (a) sets the standards a 

candidate must meet to file a petition for 

rehearing. The intent of these provisions 

is to ensure that such petitions are not 

filed as a dilatory tactic. Rather, this

section provides a mechanism under 

which a candidate may respond to 

Commission arguments he or she did not 

previously have an opportunity to 

respond to. Candidates may also raise 

new information that could not have 

been brought to the Commission’s 

attention earlier.

Under paragraph (b), candidates must 

be sure to raise all issues and arguments 

in support of their case at the 

appropriate stage of the Commission 

proceeding. By doing so, the 

Commission will have the opportunity to 

respond to, and perhaps resolve, such 

arguments before a matter goes to 

litigation. The Commission thereby 

hopes to narrow the issues that may 

otherwise result in litigation and ensure 

that it has addressed all of the issues in 

a matter before a court is asked to rule 

on them.

Paragraph (c) establishes three 

avenues for seeking a stay of a 

Commission repayment determination 

pending the candidate’s appeal of that 

determination. Candidates may place 

the amount at issue in an interestbearing escrow account, may secure a 

surety bond guaranteeing payment of 

the amount in question plus interest, or 

may seek to qualify under the criteria 

set forth in paragraph (c)(2)(iii).

Stays are not automatic; rather, the 

candidate must demonstrate that he or 

she has met the conditions for granting a 

stay under one of the three options 

provided. If the candidate fails to do so, 

repayment must be made, 

notwithstanding the pending appeal. If 

the candidate is only contesting a 

portion of the Commission’s repayment 

determination, the amount not at issue 

on appeal must be repaid within the 

time specified in 11 CFR 9038.2.

One goal of these stay procedures is 

to protect the public treasury in the 

event the Commission's repayment 

determination is upheld on appeal. Thus, 

for example, if the candidate chooses to 

establish an escrow account for the 

funds, all withdrawals from the account 

must be contingent on the joint 

signatures of the candidate or his or her 

agent and a representative of the 

Commission. Further, all amounts 

stayed must be repaid with interest if 

the Commission’s determination is 

upheld. Interest begins to accrue under 

these rules 30 days after the 

Commission’s final repayment 

determination. This is the date by which 

repayment would have been due if the 

candidate had not appealed the final 

determination and sought a stay.

The criteria in paragraph (c)(2)(iii) 

follow the standards used by the 

Commission to date. They are
20874 Federal Register / Vol. 52, No. 106 / W ednesday, June 3, 1987 / Rules and Regulations

augmented, however, in paragraph (c)(3) 

to provide further guidance on when an 

applicant has shown a strong likelihood 

of success on the merits of the appeal. 

This paragraph incorporates the 

approach taken by the United States 

Court of Appeals for the District of 

Columbia in Washington Metropolitan

Area Transit Commission v. Holiday

Tours, Inc., 559 F.2d 841 (D.C. Cir. 1977).

Section 9038.6 Stale-dated Committee

Checks

In past election cycles, questions have 

arisen regarding the appropriate 

disposition of checks written to 

creditors or to contributors that remain 

outstanding after the campaign is over. 

Sometimes the payee cannot be located, 

other times the payee declines to cash 

the check. This new section makes clear 

that committees should bring these 

checks to the Commission’s attention in 

a timely fashion.

If the committee has made attempts to 

pay the funds as intended, and has been 

unsuccessful, the committee must remit 

a check payable to the U.S. Treasury for 

the amount outstanding. The amount so 

paid will not reduce or increase the 

committee’s repayment obligation. 

Moreover, the committee may not use 

these funds for other purposes, such as 

to pay other obligations, because to do 

so could result in the receipt of a 

prohibited or excessive contribution 

from the original payee.

The Commission considered and 

rejected other possible dispositions of 

such funds, including a donation to a 

charitable organization, because these 

alternatives could be subject to varying 

interpretations, not all of which would 

be appropriate recipients of funds from 

a federally-funded campaign. Thus, the 

Commission determined to require that 

all such funds be paid to the Treasury.

PART 9039—REVIEW AND 

INVESTIGATION AUTHORITY

There are no changes in this Part.

Certification of No Effect Pursuant to 5 

U.S.C. 605(b) (Regulatory Flexibility 

Act)

The attached final rules, if 

promulgated, will not have a significant 

economic impact on a substantial 

number of small entities. The basis for 

this certification is that few, if any, 

small entities are affected by these 

rules. Further, any entities affected are 

already required to comply with the 

statutory requirements in these areas.

List of Subjects 

11 CFR Part 106

Campaign funds, Political committees 

and parties, Political candidates.

11 CFR Parts 9001-9005

Campaign funds. Political candidates, 

Elections.

11 CFR Part 9006

Campaign funds, Reporting 

requirements, Political candidates, 

Elections.

11 CFR Part 9007

Campaign funds, Administrative 

practice and procedure, Political 

candidates.

11 CFR Part 9012

Political candidates, Political 

committees and parties, Elections.

11 CFR Parts 9031-9035

Campaign funds, Political candidates, 

Elections.

11 CFR Part 9036

Administrative practice and 

procedure, Campaign funds, Political 

candidates.

11 CFR Parts 9037-9039

Campaign funds, Administrative 

practice and procedure, Political 

candidates.

PART 106—[AMENDED]

11 CFR Part 106 is amended as 

follows:

1. The authority citation for Part 106 is 

revised to read as follows:

Authority: 2 U.S.C. 441a(b), 441a(g)

2. Section 106.2 is revised to read as 

follows:

§ 106.2 S tate A llo cation o f E xpenditures

In cu rred by A uthorized C om m ittees o f

P residential P rim ary C an d id ates R eceiving

M atching Funds.

(a) General. (1) This section applies to 

Presidential primary candidates 

receiving or expecting to receive federal 

matching funds pursuant to 11 CFR Parts 

9031 et seq. Except for expenditures 

exempted under 11 CFR 106.2(c), 

expenditures incurred by a candidate’s 

authorized committee (s) for the purpose 

of influencing the nomination of that 

candidate for the office of President 

with respect to a particular State shall 

be allocated to that State. An 

expenditure shall not necessarily be 

allocated to the State in which the 

expenditure is incurred or paid. In the 

event that the Commission disputes the 

candidate’s allocation or claim of 

exemption for a particular expense, the

candidate shall demonstrate, with 

supporting documentation, that his or 

her proposed method of allocation or 

claim of exemption was reasonable.

(2) Disbursements made prior to the 

time an individual becomes a candidate 

for the purpose of determining whether 

that individual should become a 

candidate pursuant to 11 CFR 100.7(b)(1) 

and 100.8(b)(1), i.e., payments for testing 

the waters, shall be allocable 

expenditures under this section if the 

individual becomes a candidate.

(b) Method of allocating expenditures

among states—(1) General allocation

method. Unless otherwise specified 

under 11 CFR 106.2(b)(2), an expenditure 

incurred by a candidate’s authorized 

committee(s) for the purpose of 

influencing the nomination of that 

candidate in more than one State shall 

be allocated to each State on a 

reasonable and uniformly applied basis.

(2) Specific allocation methods.

Expenditures that fall within the 

categories listed below shall be 

allocated based on the following 

methods. The method used to allocate a 

category of expenditures shall be based 

on consistent data for each State to 

which an allocation is made.

(i) Media expenditures—(A) Print

media. Except for expenditures 

exempted under 11 CFR 106.2(c), 

allocation of expenditures for the 

publication and distribution of 

newspaper, magazine and other types of 

printed advertisements distributed in 

more than one State, including any 

commission charged for the purchase of 

print media, shall be made using relative 

circulation percentages in each State or 

an estimate thereof. For purposes of this 

section, allocation to a particular State 

will not be required if less than 3% of the 

total estimated readership of the 

publication is in that State.

(B) Broadcast media. Except for 

expenditures exempted under 11 CFR 

106.2(c), expenditures for radio, 

television and similar types of 

advertisements purchased in a 

particular media market that covers 

more than one State shall be allocated 

to each State in proportion to the 

estimated audience. This allocation of 

expenditures, including any commission 

charged for the purchase of broadcast 

mpHia shall be made using industry

market data.

(C) Refunds for media expenditures.

Refunds for broadcast time or 

advertisement space, purchased but not 

used, shall be credited to the States on 

the same basis as the original allocation.

(D) Limits on allocation of media

expenditures. No allocation of media 

expenditures shall be made to any Sta e
20875 Federal Register / Vol, 52, No. 106 / W ednesday, June 3, 1987 / Rules and Regulations

in which the primary election has 

already been held.

(ii) Salaries. Except for expenditures 

exempted under 11 CFR 106.2(c), 

salaries paid to persons working in a 

particular State for five consecutive 

days or more, including advance staff, 

shall be allocated to each State in 

proportion to the amount of time spent 

in that State during a payroll period.

(iii) Intra-state travel and subsistence expenditures. Travel and subsistence 

expenditures for persons working in a 

State for five consecutive days or more 

shall be allocated to that State in 

proportion to the amount of time spent 

in each State during a payroll period. 

This same allocation method shall apply 

to intra-state travel and subsistence 

expenditures of the candidate and his 

family or the candidate’s 

representatives. For purposes of this 

section, “subsistence” includes only 

expenditures for personal living 

expenses related to a particular 

individual travelling on committee 

business, such as food or lodging.

(iv) Overhead expenditures—(A) 

Overhead expenditures of State offices.

Except for expenditures exempted under 

11 CFR 106.2(c), overhead expenditures 

of committee offices located in a 

particular State shall be allocated to 

that State. For purposes of this section, 

overhead expenditures include, but are 

not limited to, rent, utilities, office 

equipment, furniture, supplies, and 

telephone service base charges.

Telephone service base charges” 

include any regular monthly charges for 

committee phone service, and charges 

for phone installation and intra-state 

phone calls other than charges related to 

a special use such as voter registration 

or get out the vote efforts. Inter-state 

calls are not included in “telephone 

service base charges.”

Overhead expenditures o f regional offices. Except for expenditures 

exempted under 11 CFR 106.2(c), 

overhead expenditures of a committee 

regional office or any committee office 

with responsibilities in two or more 

States shall be allocated to each state 

on a reasonable and uniformly applied 

oasis. For purposes of this section, 

overhead expenditures include but are 

oot limited to, rent, utilities, office 

equipment, furniture, supplies, and 

i.^eP^one service base charges. 

Telephone service base charges” 

include any regular monthly charges for 

committee phone service, and charges 

or phone installation and intra-state 

Phone calls other than charges related to 

a special use such as voter registration 

°r get out the vote efforts. Inter-state 

ca *8 are not included in “telephone 

service base charges.”

(v) Expenditures fo r Inter-state

telephone calls. Expenditures for 

telephone calls between two States need 

not be allocated to any State.

(vi) Public opinion po ll expenditures.

Expenditures incurred for the taking of a 

public opinion poll covering only one 

State shall be allocated to that State. 

Except for expenditures incurred in 

conducting a nationwide poll, 

expenditures incurred for the taking of a 

public opinion poll covering two or more 

States shall be allocated to those States 

based on the number of people 

interviewed in each State.

(c) Expenditures exempted from

allocation—(1) N ational campaign expenditures—(i) Operating

expenditures. Expenditures incurred for 

administrative, staff, and overhead 

expenditures of the national campaign 

headquarters need not be allocated to 

any State. Overhead expenditures shall 

be defined as in 11 CFR 106.2(b)(2)(iv).

(ii) N ational advertising. Expenditures 

incurred for advertisements on national 

networks, national cable or in 

publications distributed nationwide 

need not be allocated to any State.

(iii) Nationwide polls. Expenditures 

incurred for the taking of a public 

opinion poll which is conducted on a 

nationwide basis need not be allocated 

to any State.

(2) M edia production costs.

Expenditures incurred for production of 

media advertising, whether or not that 

advertising is used in more than one 

State, need not be allocated to any 

State.

(3) Expenditures fo r transportation and services made available to media.

Expenditures incurred by the 

candidate's authorized committee(s) to 

provide transportation and services for 

media personnel need not be allocated 

to any State. Reimbursement for such 

expenditures shall be made in 

accordance with 11 CFR 9034.6.

(4) Inter-state travel. Expenditures 

incurred for inter-state travel costs, such 

as travel between State campaigns or 

between State offices and national 

campaign headquarters, need not be 

allocated to any State.

(5) Compliance costs and fundraising

expenditures. An amount equal to 10% 

of campaign workers’ salaries and 

overhead expenditures in a particular 

State may be excluded from allocation 

to that State as an exempt compliance 

cost. An additional amount equal to 10% 

of such salaries and overhead 

expenditures in a particular State may 

be excluded from allocation to that 

State as exempt fundraising 

expenditures, but this exemption shall 

not apply within 28 calendar days of the 

primary election as specified in 11 CFR

110.8(c)(2). Any amounts excluded for 

fundraising expenditures shall be 

applied against the fundraising 

expenditure limitation under 11 CFR 

100.8(b)(21). If the candidate wishes to 

claim a larger compliance or fundraising 

exemption for any person, the candidate 

shall establish allocation percentages 

for each individual working in that 

State. The candidate shall keep detailed 

records to support the derivation of each 

percentage in accordance with 11 CFR 

106.2(e). Alternatively, the Commission’s 

Financial Control and Compliance 

Manual for Presidential Primary 

Candidates contains some other 

accepted allocation methods for 

calculating a compliance or fundraising 

exemption.

(i) Exempt compliance costs are those 

legal and accounting costs incurred 

solely to ensure compliance with 26 

U.S.C. 9031 et seq., 2 U.S.C. 431 et seq.

and 11 CFR Chapter I, including the 

costs of preparing matching fund 

submissions. The costs of preparing 

matching fund submissions shall be 

limited to those functions not required 

for general contribution processing and 

shall include the costs associated with: 

Generating the matching fund 

submission list and the matching fund 

computer tape for each submission, 

edits of the contributor data base that 

are related to preparing a matching fund 

submission, making photocopies of 

contributor checks, and seeking 

additional documentation from 

contributors for matching purposes. The 

costs associated with general 

contribution processing shall include 

those normally performed for 

fundraising purposes, or for compliance 

with the recordkeeping and reporting 

requirements of 11 CFR Part 100 et seq.,

such as data entry, batching 

contributions for deposit, and 

preparation of FEC reports.

(ii) Exempt fundraising expenditures 

are those expenses associated with the 

solicitation of contributions. They 

include printing and postage for 

solicitations, airtime for fundraising 

advertisements and the cost of meals 

and beverages for fundraising receptions 

or dinners.

(d) Reporting. All expenditures 

allocated under this section shall be 

reported on FEC Form 3P, page 3.

(e) Recordkeeping. All assumptions 

and supporting calculations for 

allocations made under this section 

shall be documented and retained for 

Commission inspection. For compliance 

and fundraising deductions that exceed 

the 10% exemptions under 11 CFR 

106.2(c)(5), such records shall indicate 

which duties are considered compliance
20876 Federal Register / Vol. 52, No. 106 / W ednesday, June 3, 1987 / Rules and Regulations

or fundraising and the percentage of 

time each person spends on such 

activity.

11 CFR Subchapter E is amended as 

follows:

1. By revising Parts 9001 through 9007 

to read as follows:

PART 9001—SCOPE

Sec.

9001.1 Scope.

Authority: 26 U.S.C. 9009(b).

§ 9001.1 S cope.

This subchapter governs entitlement 

to and use of funds certified from the 

Presidential Election Campaign Fund 

under 26 U.S.C. 9001 et seg. The 

definitions, restrictions, liabilities and 

obligations imposed by this subchapter 

are in addition to those imposed by 

sections 431-455 of Title 2, United States 

Code, and regulations prescribed 

thereunder (11 CFR Parts 100 through 

115). Unless expressly stated to the 

contrary, this subchapter does not alter 

the effect of any definitions, restrictions, 

obligations and liabilities imposed by 

sections 431-455 of Title 2 United States 

Code, or regulations prescribed 

thereunder (11 CFR Parts 100 through 

115).

PART 9002—DEFINITIONS

Sec.

9002.1 Authorized committee.

9002.2 Candidate.

9002.3 Commission.

9002.4 Eligible candidates.

9002.5 Fund.

9002.6 Major party.

9002.7 Minor party.

9002.8 New party.

9002.9 Political committee.

9002.10 Presidential election.

9002.11 Qualified campaign expense.

9002.12 Expenditure report period.

9002.13 Contribution.

9002.14 Secretary.

9002.15 Political party.

Authority: 26 U.S.C. 9002 and 9009(b).

§ 9002.1 A u th o rized co m m ittee.

(a) Notwithstanding the definition at 

11 CFR 100.5, “authorized committee” 

means with respect to a candidate (as 

defined at 11 CFR 9002.2) of a political 

party for President and Vice President, 

any political committee that is 

authorized by a candidate to incur 

expenses on behalf of such candidate. 

The term “authorized committee" 

includes the candidate's principal 

campaign committee designated in 

accordance with 11 CFR 102.12, any 

political committee authorized in writing 

by the candidate in accordance with 11 

CFR 102.13, and any political committee 

not disavowed by the candidate 

pursuant to 11 CFR 100.3(a)(3). If a party

has nominated a Presidential and a Vice 

Presidential candidate, all political 

committees authorized by that party’s 

Presidential candidate shall also be 

authorized committees of the Vice 

Presidential candidate and all political 

committees authorized by the Vice 

Presidential candidate shall also be 

authorized committees of the 

Presidential candidate.

(b) Any withdrawal of an 

authorization shall be in writing and 

shall be addressed and filed in the same 

manner provided for at 11 CFR 102.12 or 

102.13.

(c) Any candidate nominated by a 

political party may designate the 

national committee of that political 

party as that candidate's authorized 

committee in accordance with 11 CFR 

102.12(c).

(d) For purposes of this subchapter, 

references to the “candidate” and his or 

her responsibilities under this 

subchapter shall also be deemed to refer 

to the candidate’s authorized 

committee(s).

§ 9002.2 Candidate.

(a) For the purposes of this 

subchapter, “candidate” means with 

respect to any presidential election, an 

individual who—

(1) Has been nominated by a major 

party for election to the Office of 

President of the United States or the 

Office of Vice-President of the United 

States; or

(2) Has qualified or consented to have 

his or her name appear on the general 

election ballot (or to have the names of 

electors pledged to him or her on such 

ballot) as the candidate of a political 

party for election to either such office in 

10 or more States. For the purposes of 

this section, "political party” shall be 

defined in accordance with 11 CFR 

9002.15.

(b) An individual who is no longer 

actively conducting campaigns in more 

than one State pursuant to 11 CFR 9004.8 

shall cease to be a candidate for the 

purpose of this subchapter.

§ 9002.3 Commission.

“Commission” means the Federal 

Election Commission, 999 E Street, NW., 

Washington, DC 20463.

§ 9002.4 Eligible candidates.

“Eligible candidates” means those 

Presidential and Vice Presidential 

candidates who have met all applicable 

conditions for eligibility to receive 

payments from the Fund under 11 CFR 

Part 9003.

§9002.5 Fund.

"Fund” means the Presidential 

Election Campaign Fund established by 

26 U.S.C. 9006(a).

§ 9002.6 Major party.

“Major party” means a political party 

whose candidate for the office of 

President in the preceding Presidential 

election received, as a candidate of such 

party, 25 percent or more of the total 

number of popular votes received by all 

candidates for such office. For the 

purposes of 11 CFR 9002.6, "candidate” 

means, with respect to any preceding 

Presidential election, an individual who 

received popular votes for the office of 

President in such election.

§ 9002.7 Minor party.

"Minor party” means a political party 

whose candidate for the office of 

President in the preceding Presidential 

election received, as a candidate of such 

party, 5 percent or more, but less than 25 

percent, of the total number of popular 

votes received by all candidates for 

such office. For the purposes of 11 CFR

9002.7, "candidate” means with respect 

to any preceding Presidential election, 

an individual who received popular 

votes for the office of President in such 

election.

§ 9002.8 New party.

“New party” means a political party 

which is neither a major party nor a 

minor party.

§ 9002.9 Political committee.

For purposes of this subchapter, 

"political committee” means any 

committee, club, association, 

organization or other group of persons 

(whether or not incorporated) which 

accepts contributions or makes 

expenditures for the purpose of 

influencing, or attempting to influence, 

the election of any candidate to the 

office of President or Vice President of 

the United States; except that for the 

purpose of 11 CFR 9012.6, the term 

"political committee” shall be defined in 

accordance with 11 CFR 100.5.

§ 9002.10 Presidential election.

"Presidential election” means the 

election of Presidential and Vice 

Presidential electors.

§ 9002.11 Qualified campaign expense.

(a) "Qualified campaign expense 

means any expenditure, including a 

purchase, payment, distribution, loan, 

advance, deposit, or gift of money or 

anything of value—

(1) Incurred to further a candidate s 

campaign for election to the office of
20877 Federal_Register / Vol. 52, No. 106 / Wednesday, June 3, 1987 / Rules and Regulations

President or Vice President of the 

United States;

(2) Incurred within the expenditure 

report period, as defined under 11 CFR

9002.12, or incurred before the beginning 

of such period in accordance with 11 

CFR 9003.4 to the extent such 

expenditure is for property, services or 

facilities to be used during such period; 

and

(3) Neither the incurrence nor the 

payment of such expenditure constitutes 

a violation of any law of the United 

States, any law of the State in which 

such expense is incurred or paid, or any 

regulation prescribed under such 

Federal or State law, except that any 

State law which has been preempted by 

the Federal Election Campaign Act of 

1971, as amended, shall not be 

considered a State law for purposes of 

this subchapter. An expenditure which 

constitutes such a violation shall 

nevertheless count against the 

candidate’s expenditure limitation if the 

expenditure meets the conditions set 

forth at 11 CFR 9002.11(a) (1) and (2).

(b)(1) An expenditure is made to 

further a Presidential or Vice

Presidential candidate’s campaign if it is 

incurred by or on behalf of such 

candidate or his or her authorized 

committee. For purposes of 11 CFR 

9002.11(b)(1), any expenditure incurred 

by or on behalf of a Presidential 

candidate of a political party will also 

be considered an expenditure to further 

the campaign of the Vice Presidential 

candidate of that party. Any 

expenditure incurred by or on behalf of 

the Vice Presidential candidate will also 

be considered an expenditure to further 

the campaign of the Presidential 

candidate of that party.

(2) An expenditure is made on behalf 

of a candidate if it is made by—

(i) Any authorized committee or any 

other agent of the candidate for the 

purpose of making an expenditure; or

(ii) Any person authorized or 

requested by the candidate, by the 

candidate’s authorized committee(s), or 

by an agent of the candidate or his or 

her authorized committee(s) to make an 

expenditure; or

(iii) A committee which has been 

requested by the candidate, the 

candidate’s authorized committee(s), or 

an agent thereof to make the 

expenditure, even though such 

committee is not authorized in writing.

(3) Expenditures that further the 

election of other candidates for any 

public office shall be allocated in 

accordance with 11 CFR 106.1(a) and 

will be considered qualified campaign 

expenses only to the extent that they 

specifically further the election of the 

candidate for President or Vice

President. A candidate may make 

expenditures under this section in 

conjunction with other candidates for 

any public office, but each candidate 

shall pay his or her proportionate share 

of the cost in accordance with 11 CFR 

106.1(a).

(4) Expenditures by a candidate’s 

authorized committee(s) pursuant to 11 

CFR 9004.6 for the travel and related 

ground service costs of media shall be 

qualified campaign expenses. Any 

reimbursement for travel and related 

services costs received by a candidate’s 

authorized committee shall be subject to 

the provisions of 11 CFR 9004.6.

(5) Legal and accounting services 

which are provided solely to ensure 

compliance with 2 U.S.C. 431 et. seq., or 

26 U.S.C. 9001, et seq., shall be qualified 

campaign expenses which may be paid 

from payments received from the Fund. 

If federal funds are used to pay for such 

services, the payments will count 

against the candidate's expenditure 

limitation. Payments for such services 

may also be made from an account 

established in accordance with 11 CFR

9003.3 or may be provided to the 

committee in accordance with 11 CFR 

100.7(b)(14) and 100.8(b)(15). If payments 

for such services are made from an 

account established in accordance with 

11 CFR 9003.3, the payments do not 

count against the candidate's 

expenditure limitation. If payments for 

such services are made by a minor or 

new party candidate from an account 

containing private contributions, the 

payments do not count against that 

candidate’s expenditure limitation. The 

amount paid by the committee shall be 

reported in accordance with 11 CFR Part 

9006. Amounts paid by the regular 

employer of the person providing such 

services pursuant to 11 CFR 100.7(b)(14) 

and 100.8(b)(15) shall be reported by the 

recipient committee in accordance with 

11 CFR 104.3(h).

(c) Expenditures incurred either 

before the beginning of the expenditure 

report period or after the last day of a 

candidate’s eligibility will be considered 

qualified campaign expenses if they 

meet the provisions of 11 CFR 9004.4(a). 

Expenditures described under 11 CFR 

9004.4(b) will not be considered 

qualified campaign expenses.

§ 9002.12 Expenditure report peripd.

“Expenditure report period” means, 

with respect to any Presidential election, 

the period of time described in either 

paragraph (a) or (b) of this section, as 

appropriate.

' (a) In the case of a major party, the 

expenditure report period begins on 

September 1 before the election or on 

the date on which the major party’s

presidential nominee is chosen, 

whichever is earlier; and the period ends 

30 days after the Presidential election.

(b) In the case of a minor or new 

party, the period will be the same as 

that of the major party with the shortest 

expenditure report period for that 

Presidential election as determined 

under paragraph (a) of this section.

§ 9002.13 Contribution.

“Contribution” has the same meaning 

given the term under 2 U.S.C. 431(8),

441b and 441c, and under 11 CFR 100.7, 

and 11 CFR Parts 114 and 115.

§ 9002.14 Secretary.

“Secretary" means the Secretary of 

the Treasury.

§ 9002.15 Political party.

“Political party” means an 

association, committee, or organization 

which nominates or selects an 

individual for election to any Federal 

office, including the office of President 

or Vice President of the United States, 

whose name appears on the general 

election ballot as the candidate of such 

association, committee, or organization.

PART 9003—ELIGIBILITY FOR

PAYMENTS

Sec.

9003.1 Candidate and committee 

agreements.

9003.2 Candidate certifications.

9003.3 Allowable contributions.

9003.4 Expenses incurred prior to the 

beginning of the expenditure report 

period or prior to receipt of Federal 

funds.

9003.5 Documentation of disbursements. 

Authority: 28 U.S.C. 9003 and 9009(b).

§ 9003.1 Candidate and committee 

agreements.

(a) General. (1) To become eligible to 

receive payments under 11 CFR Part 

9005, the Presidential and Vice 

Presidential candidates of a political 

party shall agree in a letter signed by 

the candidates to the Commission that 

they and their authorized committee(s) 

shall comply with the conditions set 

forth in 11 CFR 9003.1(b).

(2) Major party candidates shall sign 

and submit such letter to the 

Commission within 14 days after 

receiving the party’s nomination for 

election. Minor and new party 

candidates shall sign and submit such 

letter within 14 days after such 

candidates have qualified to appear on 

the general election ballot in 10 or more 

states pursuant to 11 CFR 9002.2(a)(2). 

The Commission, on written request by 

a minor or new party candidate, at any 

time prior to the date of the general
20878 Federal Register / Vol. 52, No. 106 / W ednesday, June 3, 1987 / Rules and Regulations

election, may extend the deadline for 

filing such letter except that the 

deadline shall be a date prior to the date 

of the general election.

(b) Conditions. The candidates shall:

(1) Agree that they have the burden of 

proving that disbursements made by 

them or any authorized committee(s) or 

agent(s) thereof are qualified campaign 

expenses as defined in 11 CFR 9002.11.

(2) Agree that they and their 

authorized committee(s) shall comply 

with the documentation requirements 

set forth at 11 CFR 9003.5.

(3) Agree that they and their 

authorized committee(s) shall provide 

an explanation, in addition to complying 

with the documentation requirements, of 

the connection between any 

disbursements made by the candidates 

or the authorized committee (s) of the 

candidates and the campaign if 

requested by the Commission.

(4) Agree that they and their 

authorized committee(s) shall keep and 

furnish to the Commission all 

documentation relating to receipts and 

disbursements including any books, 

records (including bank records for all 

accounts), all documentation required 

by this subchapter including those 

required to be maintained under 11 CFR

9003.5, and other information the 

Commission may request. The records 

provided at the time of the audit shall 

also include production of magnetic 

computer tapes containing all 

information required by law to be 

maintained regarding the committee’s 

receipts and disbursements, if the 

committee maintains its records on 

computer. Upon request, documentation 

explaining the computer system’s 

software capabilities shall also be 

provided.

(5) Agree that they and their 

authorized committee(s) shall permit an 

audit and examination pursuant to 11 

CFR Part 9007 of all receipts and 

disbursements including those made by 

the candidate, all authorized committees 

and any agent or person authorized to 

make expenditures on behalf of the 

candidate or committee(s). The 

candidate and authorized committee(s) 

shall facilitate the audit by making 

available in one central location, office 

space, records and such personnel as 

are necessary to conduct the audit and 

examination, and shall pay any amounts 

required to be repaid under 11 CFR Part 

9007.

(6) Submit the name and mailing 

address of the person who is entitled to 

receive payments from the Fund on 

behalf of the candidates; the name and 

address of the depository designated by 

the candidates as required by 11 CFR 

Part 103 and 11 CFR 9005.2; and the

name under which each account is held 

at the depository at which the payments 

from the Fund are to be deposited.

(7) Agree that they and their 

authorized committee(s) shall comply 

with the applicable requirements of 2 

U.S.C. 431 et seq., 26 U.S.C. 9001 et seq.,

and the Commission’s regulations at 11 

CFR Parts 100-115, and 9001-9012.

(8) Agree that they and their 

authorized committee(s) shall pay any 

civil penalties included in a conciliation 

agreement entered into under 2 U.S.C.

437g against the candidates, any 

authorized committees of the candidates 

or any agent thereof.

§ 9003.2 C an did ate c e rtifica tio n s.

(a) Major party candidates. To be 

eligible to receive payments under 11 

CFR Part 9005, each Presidential and 

Vice Presidential candidate of a major 

party shall, under penalty of perjury, 

certify to the Commission:

(1) That the candidate and his or her 

authorized committee(s) have not 

incurred and will not incur qualified 

campaign expenses in excess of the 

aggregate payments to which they will 

be entitled under 11 CFR Part 9004.

(2) That no contributions have been or 

will be accepted by the candidate or his 

or her authorized committee(s); except 

as contributions specifically solicited 

for, and deposited to, the candidate’s 

legal and accounting compliance fund 

established under 11 CFR 9003.3(a); or 

except to the extent necessary to make 

up any deficiency in payments received 

from the Fund due to the application of 

11 CFR 9005.2(b).

(b) Minor and new party candidates.

To be eligible to receive any payments 

under 11 CFR Part 9005, each 

Presidential and Vice Presidential 

candidate of a minor or new party shall, 

under penalty of perjury, certify to the 

Commission:

(1) That the candidate and his or her 

authorized committee(s) have not 

incurred and will not incur qualified 

campaign expenses in excess of the 

aggregate payments to which the eligible 

candidates of a major party are entitled 

under 11 CFR 9004.1.

(2) That no contributions to defray 

qualified campaign expenses have been 

or will be accepted by the candidate or 

his or her authorized committee(s) 

except to the extent that the qualified 

campaign expenses incurred exceed the 

aggreg ate payments received by such 

candidate from the Fund under 11 CFR

9004.2.

(c) A ll candidates. To be eligible to 

receive any payment under 11 CFR

9004.2, the Presidential candidate of 

each major, minor or new party shall 

certify to the Commission, under penalty

of perjury, that such candidate will not 

knowingly make expenditures from his 

or her personal funds, or the personal 

funds of his or her immediate family, in 

connection with his or her campaign for 

the office of President in excess of 

$50,000 in the aggregate.

(1) For purposes of this section, the 

term "immediate family” means a 

candidate’s spouse, and any child, 

parent, grandparent, brother, halfbrother, sister, or half-sister of the 

candidate, and the spouses of such 

persons.

(2) Expenditures from personal funds 

made under this paragraph shall not 

apply against the expenditure 

limitations.

(3) For purposes of this section, the 

terms "personal funds” and "personal 

funds of his or her immediate family” 

mean:

(i) Any assets which, under applicable 

state law, at the time he or she became a 

candidate, the candidate had legal right 

of access to or control over, and with 

respect to which the candidate had 

either:

(A) Legal and rightful title, or

(B) An equitable interest.

(ii) Salary and other earned income 

from bona fide employment; dividends 

and proceeds from the sale of the 

candidate’s stocks or other investments; 

bequests to the candidate; income from 

trusts established before candidacy; 

income from trusts established by 

bequest after candidacy of which the 

candidate is a beneficiary; gifts of a 

personal nature which had been 

customarily received prior to candidacy; 

proceeds from lotteries and similar legal 

games of chance.

(iii) A candidate may use a portion of 

assets jointly owned with his or her 

spouse as personal funds. The portion of 

the jointly owned assets that shall be 

considered as personal funds of the 

candidate shall be that portion which is 

the candidate’s share under the 

instrument(s) of conveyance or 

ownership. If no specific share is 

indicated by any instrument of 

conveyance or ownership, the value oi 

one-half of the property used shall be 

considered as personal funds of the 

candidate.

(4) For purposes of this section,

expenditures from personal funds made 

by a candidate of a political party for 

the office of Vice President shall be 

considered to be expenditures made y 

the candidate of such party for the office 

of President. , (5) Contributions made by members oi

a candidate’s family from funds which 

do not meet the definition of personal 

funds under 11 CFR 9003.2(c)(3) shall not
20879 £ederal_Register^/ V°I. 52, No. 106 / Wednesday, June 3, 1987 / Rules and Regulations

count against such candidate’s $50,000 

expenditure limitation under 11 CFR 

9003.2(c).

(6) Personal funds expended pursuant 

to this section shall be first deposited in 

an account established in accordance 

with 11 CFR 9003.3 (b) or (c).

(7) The provisions of this section shall 

not operate to limit the candidate’s 

liability for, nor the candidate’s ability 

to pay, any repayments required under

II CFR Part 9007. If the candidate or his 

or her committee knowingly incurs 

expenditures in excess of the limitations 

of 11 CFR 110.8(a), the Commission may 

seek civil penalties under 11 CFR Part

III in addition to any repayment 

determinations made on the basis of 

such excessive expenditures.

(8) Expenditures made using a credit 

card for which the candidate is jointly or 

solely liable will count against the limits 

of this section to the extent that the full 

amount due, including any finance 

charge, is not paid by the committee 

within 60 days after the closing date of 

the billing statement on which the 

charges first appear. For purposes of this 

section, the “closing date” shall be the 

date indicated on the billing statement 

which serves as the cutoff date for 

determining which charges are included 

on that billing statement.

(d) Form. Major party candidates shall 

submit the certifications required under 

11 CFR 9003.2 in a letter which shall be 

signed and submitted within 14 days 

after receiving the party’s nomination 

for election. Minor and new party 

candidates shall sign and submit such 

letter within 14 days after such 

candidates have qualified to appear on 

the general election ballot in 10 or more 

States pursuant to 11 CFR 9002.2(a)(2). 

The Commission, upon written request 

by a minor or new party candidate made 

at any time prior to the date of the 

general election, may extend the 

deadline for filing such letter, except 

that the deadline shall be a date prior to 

the day of the general election.

§ 9003.3 Allowable contributions.

(a) Legal and accounting compliance

fund-m ajor party candidates—(1) 

Sources, (i) A major party candidate 

may accept contributions to a legal an< 

accounting compliance fund if such 

contributions are received and 

disbursed in accordance with this 

section. A legal and accounting 

compliance fund may be established b; 

such candidate prior to being nominate 

or selected as the candidate of a 

political party for the office of Présider 

or Vice President of the United States.

(A) All solicitations for contributions 

t0 this fund shall clearly state that sue!

contributions are being solicited for this 

fund.

(B) Contributions to this fund shall be 

subject to the limitations and 

prohibitions of 11 CFR Parts 110,114, 

and 115.

(ii) Funds remaining in the primary 

election account of a candidate, which 

funds are in excess of any amount 

required to be reimbursed to the 

Presidential Primary Matching Payment 

Account under 11 CFR 9038.2, may be 

transferred to the legal and accounting 

compliance fund without regard to the 

contribution limitations of 11 CFR Part 

110 and used for any purpose permitted 

under this section.

(iii) Contributions that are made after 

the beginning of the expenditure report 

period but which are designated for the 

primary election, and contributions that 

exceed the contributor’s limit for the 

primary election, may be deposited in 

the legal and accounting compliance 

fund if the candidate obtains the 

contributor’s redesignation, or a 

reattribution to a joint contributor, in 

accordance with 11 CFR 110.1. The 

contributions so received and deposited 

shall be subject to the contribution 

limitations applicable for the general 

election, pursuant to 11 CFR 

110.1(b)(2)(i).

(2) Uses, (i) Contributions to the legal 

and accounting compliance fund shall 

be used only for the following purposes:

(A) To defray the cost of legal and 

accounting services provided solely to 

ensure compliance with 2 U.S.C. 431 et

seq., and 26 U.S.C. 9001 et seq., in 

accordance with 11 CFR 9003.3(a)(2)(ii);

(B) To defray in accordance with 11 

CFR 9003.3(a)(2)(ii)(A), that portion of 

expenditures for payroll, overhead, and 

computer services related to ensuring 

compliance with 2 U.S.C. 431 et seq. and 

26 U.S.C. 9001 et seq.;

(C) To defray any civil or criminal 

penalties imposed pursuant to 2 U.S.C. 

437g or 26 U.S.C. 9012;

(D) To make repayments under 11 

CFR 9007.2;

(E) To defray the cost of soliciting 

contributions to the legal and accounting 

compliance fund; and

(F) To make a loan to an account 

established pursuant to 11 CFR 9003.4 to 

defray qualified campaign expenses 

incurred prior to the expenditure report 

period or prior to receipt of federal 

funds, provided that the amounts so 

loaned are restored to the legal and 

accounting compliance fund.

(ii)(A) Expenditures for payroll 

(including payroll taxes), overhead and 

computer services, a portion of which 

are related to ensuring compliance with 

Title 2 and Chapter 95 of Title 26, shall 

be initially paid from the candidate’s

federal fund account under 11 CFR

9005.2 and may be later reimbursed by 

the compliance fund. For purposes of 11 

CFR 9003.3(a)(2)(i)(B), a candidate may 

use contributions to the compliance fund 

to reimburse his or her federal fund 

account an amount equal to 10% of the 

payroll and overhead expenditures of 

his or her national campaign 

headquarters and state offices.

Overhead expenditures include, but are 

not limited to rent, utilities, office 

equipment, furniture, supplies and ail 

telephone charges except for telephone 

charges related to a special use such as 

voter registration and get out the vote 

efforts. In addition, a candidate may use 

contributions to the compliance fund to 

reimburse his or her federal fund 

account an amount equal to 70% of the 

costs (other than payroll) associated 

with computer services. Such costs 

include but are not limited to rental and 

maintenance of computer equipment, 

data entry services not performed by 

committee personnel, and related 

supplies. If the candidate wishes to 

claim a larger compliance exemption for 

payroll or overhead expenditures, the 

candidate shall establish allocation 

percentages for each individual who 

spends all or a portion of his or her time 

to perform duties which are considered 

necessary to ensure compliance with 

Title 2 or Chapter 95 of Title 26. The 

candidate shall keep detailed records to 

support the derivation of each 

percentage. Such records shall indicate 

which duties are considered compliance 

and the percentage of time each person 

spends on such activity. If the candidate 

wishes to claim a larger compliance 

exemption for costs associated with 

computer services, the candidate shall 

establish allocation percentages for 

each computer function that is 

considered necessary, in whole or in 

part, to ensure compliance with 2 U.S.C 

431 et seq. and 26 U.S.C. 9001 et seq. The 

allocation shall be based on a 

reasonable estimate of the costs 

associated with each computer function, 

such as the costs for data entry services 

performed by persons other than 

committee personnel and processing 

time. The candidate shall keep detailed 

records to support such calculations.

The records shall indicate which 

computer functions are considered 

compliance-related and shall reflect 

which costs are associated with each 

computer function. The Commission’s 

Financial Control and Compliance 

Manual for General Election Candidates 

Receiving Public Funding contains some 

accepted alternative allocation methods 

for determining the amount of salaries
20880 Federal Register / Vol. 52, No. 106 / W ednesday, June 3, 1987 / Rules and Regulations

and overhead expenditures that may be 

considered exempt compliance costs.

(B) Reimbursement from the 

compliance fund may be made to the 

separate account maintained for federal 

funds under 11 CFR 9005.2 for legal and 

accounting compliance services 

disbursements that are initially paid 

from the separate federal funds account. 

Such reimbursement must be made prior 

to any final repayment determination by 

the Commission pursuant to 11 CFR

9007.2. Any amounts so reimbursed to 

the federal fund account may not 

subsequently be transferred back to the 

legal and accounting compliance fund.

(iii) Amounts paid from this account 

for the purposes permitted by 11 CFR 

9003.3(a)(2)(i) (A) through (E) shall not 

be subject to the expenditure limits of 2 

U.S.C. 441a(b) and 11 CFR 110.8. (See 

also 11 CFR 100.8(b}(15)). When the 

proceeds of loans made in accordance 

with 11 CFR 9003.2(a)(2) (i)(F) are 

expended on qualified campaign 

expenses, such expenditures shall count 

against the candidate’s expenditure 

limit.

(iv) Contributions to or funds 

deposited in the legal and accounting 

compliance fund may not be used to 

retire debts remaining from the 

Presidential primaries, except that, if 

after payment of all expenses relating to 

the general election, there are excess 

campaign funds, such funds may be 

used for any purpose permitted under 2 

U.S.C. 439a and 11 CFR Part 113, 

including payment of primary election 

debts.

(3) Deposit and disclosure, (i)

Amounts received pursuant to 11 CFR 

9003.3(a)(1) shall be deposited and 

maintained in an account separate from 

that described in 11 CFR 9005.2 and 

shall not be commingled with any 

money paid to the candidate by the 

Secretary pursuant to 11 CFR 9005.2.

(ii) The receipts to and disbursements 

from this account shall be reported in a 

separate report in accordance with 11 

C râ 9006.1(b)(2). All contributions made 

to this account shall be recorded in 

accordance with 11 CFR 102.9. 

Disbursements made from this account 

shall be documented in the same 

manner provided in 11 CFR 9003.5.

(b) Contributions to defray qualified

campaign expenses—major party

candidates. (1) A major party candidate 

or his or her authorized committee(s) 

may solicit contributions to defray 

qualified campaign expenses to the 

extent necessary to make up any 

deficiency in payments received from 

the Fund due to the application of 11 

CFR 9005.2(b).

(2) Such contributions may be 

deposited in a separate account or may

be deposited with federal funds received 

under 11 CFR 9005.2. Disbursements 

from this account shall be made only to 

defray qualified campaign expenses and 

to defray the cost of soliciting 

contributions to such account. All 

disbursements from this account shall 

be documented in accordance with 11 

CFR 9003.5 and shall be reported in 

accordance with 11 CFR 9006.1.

(3) A candidate may make transfers to 

this account from his or her legal and 

accounting compliance fund.

(4) The contributions received under 

this section shall be subject to the 

limitations and prohibitions of 11 CFR 

Parts 110,114 and 115 and shall be 

aggregated with all contributions made 

by the same persons to the candidate’s 

legal and accounting compliance fund 

under 11 CFR 9003.3(a) for the purposes 

of such limitations.

(5) Any costs incurred for soliciting 

contributions to this account shall not 

be considered expenditures to the extent 

that the aggregate of such costs does not 

exceed 20 percent of the expenditure 

limitation under 11 CFR 9003.2(a)(1). 

These costs shall, however, be reported 

as disbursements in accordance with 11 

CFR Part 104 and 11 CFR 9006.1. For 

purposes of this section, a candidate 

may exclude from the expenditure 

limitation an amount equal to 10% of the 

payroll (including payroll taxes) and 

overhead expenditures of his or her 

national campaign headquarters and 

state offices as exempt fundraising 

costs.

(6) Any costs incurred for legal and 

accounting services which are provided 

solely to ensure compliance with 2 U.S.C 

431 et seq. and 26 U.S.C. 9001 et seq.

shall not count against the candidate’s 

expenditure limitation. For purposes of 

this section, a candidate may exclude 

from the expenditure limitation an 

amount equal to 10% of the payroll 

(including payroll taxes) and overhead 

expenditures of his or her national 

campaign headquarters and state 

offices. In addition, a candidate may 

exclude from the expenditure limitation 

an amount equal to 70% of the costs 

(other than payroll) associated with 

computer services.

(i) For purposes of 11 CFR 9003.3(b)(6), 

overhead costs include, but are not 

limited to, rent, utilities, office 

equipment, furniture, supplies and all 

telephone charges except for telephone 

charges related to a special use such as 

voter registration and get out the vote 

efforts.

(ii) For purposes of 11 CFR 9003.3(b)(6) 

costs associated with computer services 

include, but are not limited to, rental 

and maintenance of computer 

equipment, data entry services not

performed by committee personnel, and 

related supplies.

(7) If the candidate wishes to claim a 

larger compliance or fundraising 

exemption under 11 CFR 9003.3(b) (5) or

(6) for payroll and overhead 

expenditures, the candidate shall 

establish allocation percentages for 

each individual who spends all or a 

portion of his or her time to perform 

duties which are considered compliance 

or fundraising. The candidate shall keep 

detailed records to support the 

derivation of each percentage. Such 

records shall indicate which duties are 

considered compliance or fundraising 

and the percentage of time each person 

spends on such activity.

(8) If the candidate wishes to claim a 

larger compliance exemption under 11 

CFR 9003.3(b)(6) for costs associated 

with computer services, the candidate 

shall establish allocation percentages 

for each computer function that is 

considered necessary, in whole or in 

part, to ensure compliance with 2 U.S.C. 

431 et seq. and 26 U.S.C. 9001 et seq. The 

allocation shall be based on a 

reasonable estimate of the costs 

associated with each computer function, 

such as the costs for data entry services 

performed by other than committee 

personnel and processing time. The 

candidate shall keep detailed records to 

support such calculations. The records 

shall indicate which computer functions 

are considered compliance-related and 

shall reflect which costs are associated 

with each computer function.

(9) The Commission’s Financial 

Control and Compliance Manual for 

General Election Candidates Receiving 

Public Funding contains some accepted 

alternative allocation methods for 

determining the amount of salaries and 

overhead expenditures that may be 

considered exempt compliance costs or 

exempt fundraising costs.

(c) Contributions to defray qualified

campaign expenses minor and new

party candidates. (1) A minor or new 

party candidate may solicit 

contributions to defray qualified 

campaign expenses which exceed the 

amount received by such candidate from 

the Fund, subject to the limits of 11 CFR 

9003.2(b).

(2) The contributions received under 

this section shall be subject to the 

limitations and prohibitions of 11 CFR 

Parts 110,114 and 115.

(3) Such contributions may be 

deposited in a separate account or m a y

be deposited with federal funds received 

under 11 CFR 9005.2. Disbursements 

from this account shall be made only for 

the following purposes:
20881 Federal Register / Vol. 52, No. 106 / W ednesday, June 3, 1987 / Rules and Regulations

(i) To defray qualified campaign 

expenses;

(ii) To make repayments under 11 CFR 

9007.2;

(iii) To defray the cost of soliciting 

contributions to such account;

(iv) To defray the cost of legal and 

accounting services provided solely to 

ensure compliance with 2 U.S.C. 431 et

seq. and 26 U.S.C. 9001 et seq.

(4) All disbursements from this 

account shall be documented in 

accordance with 11 CFR 9003.5 and shall 

be reported in accordance with 11 CFR 

Part 104 and § 9006.1.

(5) Any costs incurred for soliciting 

contributions to this account shall not 

be considered expenditures to the extent 

that the aggregate of such costs does not 

exceed 20 percent of the expenditure 

limitation under 11 CFR 9003.2(a)(1). 

These costs shall, however, be reported 

as disbursements in accordance with 11 

CFR Part 104 and § 9006.1. For purposes 

of this section, a candidate may exclude 

from the expenditure limitation an 

amount equal to 10% of the payroll 

(including payroll taxes) and overhead 

expenditures of his or her national 

campaign headquarters and state offices 

as exempt fundraising costs.

(6) Any costs incurred for legal and 

accounting services which are provided 

solely to ensure compliance with 2 U.S.C 

431 et seq. and 26 U.S.C. 9001 et seq.

shall not count against the candidate’s 

expenditure limitation. For purposes of 

this section, a candidate may exclude 

from the expenditure limitation an 

amount equal to 10% of the payroll 

(including payroll taxes) and overhead 

expenditures of his or her national 

campaign headquarters and state 

offices. In addition, a candidate may 

exclude from the expenditure limitation 

an amount equal to 70% of the costs 

(other than payroll) associated with 

computer services.

(i) For purposes of 11 CFR 9003.3(c)(6), 

overhead costs include, but are not 

limited to, rent, utilities, office 

equipment, furniture, supplies and all 

telephone charges except for telephone 

charges related to a special use such as 

voter registration and get out the vote 

efforts.

(ii) For purposes of 11 CFR 9003.3(c)(6) 

costs associated with computer services 

include but are not limited to, rental and 

maintenance of computer equipment, 

data entry services not performed by 

committee personnel, and related 

supplies.

(7) If the candidate wishes to claim a 

larger compliance or fundraising 

exemption under 11 CFR 9003.3(c)(6) for 

Payroll and overhead expenditures, the 

candidate shall establish allocation 

percentages for each individual who

spends all or a portion of his or her time 

to perform duties which are considered 

compliance or fundraising. The 

candidate shall keep detailed records to 

support the derivation of each 

percentage. Such records shall indicate 

which duties are considered compliance 

or fundraising and the percentage of 

time each person spends on such 

activity.

(8) If the candidate wishes to claim a 

larger compliance exemption under 11 

CFR 9003.3(c)(6) for costs associated 

with computer services, the candidate 

shall establish allocation percentages 

for each computer function that is 

considered necessary, in whole or in 

part, to ensure compliance with 2 U.S.C. 

431 et seq. and 26 U.S.C. 9001 et seq. The 

allocation shall be based on a 

reasonable estimate of the costs 

associated with each computer function, 

such as the costs for data entry services 

performed by other than committee 

personnel and processing time. The 

candidate shall keep detailed records to 

support such calculations. The records 

shall indicate which computer functions 

are considered compliance-related and 

shall reflect which costs are associated 

with each computer function.

(9) The candidate shall keep and 

maintain a separate record of 

disbursements made to defray exempt 

legal and accounting costs under 11 CFR 

9003.3(c) (6) and (7) and shall report 

such disbursements in accordance with 

11 CFR Part 104 and 11 CFR 9006.1.

(10) The Commission’s Financial 

Control and Compliance Manual for 

General Election Candidates Receiving 

Public Funding contains some accepted 

alternative allocation methods for 

determining the amount of salaries and 

overhead expenditures that may be 

considered exempt compliance costs or 

exempt fundraising costs.

§ 9003.4 Expenses incurred prior to the

beginning of the expenditure report period

or prior to receipt of Federal funds.

(a) Permissible expenditures. (1) A 

candidate may incur expenditures 

before the beginning of the expenditure 

report period, as defined at 11 CFR 

9002.12, if such expenditures are for 

property, services or facilities which are 

to be used in connection with his or her 

general election campaign and which 

are for use during the expenditure report 

period. Such expenditures will be 

considered qualified campaign 

expenses. Examples of such 

expenditures include but are not limited 

to: Expenditures for establishing 

financial accounting systems, 

expenditures for organizational planning 

and expenditures for polling.

(2) A candidate may incur qualified 

campaign expenses prior to receiving 

payments under 11 CFR Part 9005.

(b) Sources. (1) A candidate may 

obtain a loan which meets the 

requirements of 11 CFR 100.7(b)(ll) for 

loans in the ordinary course of business 

to. defray permissible expenditures 

described in 11 CFR 9003.4(a). A 

candidate receiving payments equal to 

the expenditure limitation in 11 CFR 

110.8 shall make full repayment of 

principal and interest on such loans 

from payments received by the 

candidate under 11 CFR Part 9005 within 

15 days of receiving such payments.

(2) A major party candidate may 

borrow from his or her legal and 

accounting compliance fund for the 

purposes of defraying permissible 

expenditures described in 11 CFR 

9003.4(a). All amounts borrowed from 

the legal and accounting compliance 

fund must be restored to such fund after 

the beginning of the expenditure report 

period either from federal funds 

received under 11 CFR Part 9005 or 

private contributions received under 11 

CFR 9003.3(b). For candidates receiving 

federal funds, restoration shall be made 

within 15 days after receipt of such 

funds.

(3) A minor or new party candidate 

may defray such expenditures from 

contributions received in accordance 

with 11 CFR 9003.3(c).

(4) (i) A candidate who has received 

federal funding under 11 CFR Part 9031 

et seq., may borrow from his or her 

primary election campaign an amount 

not to exceed the residual balance 

projected to remain in the candidate’s 

primary account(s) on the basis of the 

formula set forth at 11 CFR 9038.3(c). A 

major party candidate receiving 

payments equal to the expenditure 

limitation shall reimburse amounts 

borrowed from his or her primary 

campaign from payments received by 

the candidate under 11 CFR Part 9005 

within 15 days of such receipt.

(ii) A candidate who has not received 

federal funding during the primary 

campaign may borrow at any time from 

his or her primary account(s) to defray 

such expenditures, provided that a 

major party candidate receiving 

payments equal to the expenditure 

limitation shall reimburse all amounts 

borrowed from his or her primary 

campaign from payments received by 

the candidate under 11 CFR Part 9005 

within 15 days of such receipt.

(5) A candidate may use personal 

funds in accordance with 11 CFR 

9003.2(c), up to his or her $50,000 limit, to 

defray such expenditures.
20882 Federal Register / Vol. 52, No. 106 / W ednesday, June 3, 1987 / Rules and Regulations

(c) Deposit and disclosure. Amounts 

received or borrowed by a candidate 

under 11 CFR 9003.4(b) to defray 

expenditures permitted under 11 CFR 

9003.4(a) shall be deposited in a 

separate account to be used only for 

such expenditures. All receipts and 

disbursements from such account shall 

be reported pursuant to 11 CFR 9006.1(a) 

and documented in accordance with 11 

CFR 9003.5.

§ 9003.5 Docum entation o f

disbursem ents.

(a) Burden of proof. Each candidate 

shall have the burden of proving that 

disbursements made by the candidate or 

his or her authorized committee(s) or 

persons authorized to make 

expenditures on behalf of the candidate 

or authorized committee(s) are qualified 

campaign expenses as defined in 11 CFR 

9002.11. The candidate and his or her 

authorized committee(s) shall obtain 

and furnish to the Commission at its 

request any evidence regarding qualified 

campaign expenses made by the 

candidate, his or her authorized 

committees and agents or persons 

authorized to make expenditures on 

behalf of the candidate or committee(s) 

as provided in 11 CFR 9003.5(b).

(b) Documentation required. (1) For 

disbursements in excess of $200 to a 

payee, the candidate shall present 

either:

(i) A receipted bill from the payee that 

states the purpose of the disbursement; 

or

(ii) If such a receipt is not available, a 

cancelled check negotiated by the 

payee, and

(A) One of the following documents 

generated by the payee: A bill, invoice, 

or voucher that States the purpose of the 

disbursement; or

(B) Where the documents specified in 

11 CFR 9003.5(b)(l)(ii)(A) are not 

available, a voucher or 

contemporaneous memorandum from 

the candidate or the committee that 

states the purpose of the disbursement; 

or

(iii) If neither a receipted bill as 

specified in 11 CFR 9003.5(b)(l)(i) nor 

the supporting documentation specified 

in 11 CFR 9003.5(b)(l)(ii) is available, a 

cancelled check negotiated by the payee 

that states the purpose of the 

disbursement.

(iv) Where the supporting 

documentation required in 11 CFR 

9003.5(b)(1) (i), (ii) or (iii) is not 

available, the candidate or committee 

may present a cancelled check and 

collateral evidence to document the 

qualified campaign expense. Such 

collateral evidence may include but is 

not limited to:

(A) Evidence demonstrating that the 

expenditure is part of an identifiable 

program or project which is otherwise 

sufficiently documented such as a 

disbursement which is one of a number 

of documented disbursements relating to 

a campaign mailing or to the operation 

of a campaign office;

(B) Evidence that the disbursement is 

covered by a pre-established written 

campaign committee policy, such as a 

per diem policy.

(2) For all other disbursements the 

candidate shall present:

(i) A record disclosing the full name 

and mailing address of the payee, the 

amount, date and purpose of the 

disbursement, if made from a petty cash 

fund; or

(ii) A cancelled check negotiated by 

the payee that states the full name and 

mailing address of the payee, and the 

amount, date and purpose of the 

disbursement.

(3) For purposes of this section:

(i) “Payee” means the person who 

provides the goods or services to the 

candidate or committee in return for the 

disbursement; except that an individual 

will be considered a payee under this 

section if he or she receives $500 or less 

advanced for travel and/or subsistence 

and if the individual is the recipient of 

the goods or services purchased.

(ii) “Purpose" means the full name 

and mailing address of the payee, the 

date and amount of the disbursement, 

and a brief description of the goods or 

services purchased.

(c) Retention o f records. The 

candidate shall retain records with 

respect to each disbursement and 

receipt, including bank records, 

vouchers, worksheets, receipts, bills and 

accounts, journals, ledgers, fundraising 

solicitation material, accounting systems 

documentation, and any related 

materials documenting campaign 

receipts and disbursements, for a period 

of three years pursuant to 11 CFR 

102.9(c), and shall present these records 

to the Commission on request.

(d) List of capital and other assets— 

(1) Capital assets. The candidate or 

committee shall maintain a list of all 

capital assets whose purchase price 

exceeded $2000 when acquired by the 

campaign. The list shall include a brief 

description of each capital asset, the 

purchase price, the date it was acquired, 

the method of disposition and the 

amount received in disposition. For 

purposes of this section, “capital asset" 

shall be defined in accordance with 11 

CFR 9004.9(d)(1).

(2) Other assets. The candidate or 

committee shall maintain a list of other 

assets acquired for use in fundraising or 

as collateral for campaign loans, if the

aggregate value of such assets exceeds 

$5000. The list shall include a brief 

description of each such asset, the fair 

market value of each asset, the method 

of disposition and the amount received 

in disposition. The fair market value of 

other assets shall be determined in 

accordance with 11 CFR 9004.9(d)(2).

PART 9004—ENTITLEMENT OF

ELIGIBLE CANDIDATES TO

PAYMENTS; USE OF PAYMENTS

Sec.

9004.1 Major parties.

9004.2 Pre-election payments for minor and 

new party candidates.

9004.3 Post-election payments.

9004.4 Use of payments.

9004.5 Investment of public funds.

9004.6 Reimbursements for transportation 

and services made available to media 

personnel.

9004.7 Allocation of travel expenditures.

9004.8 Withdrawal by candidate.

9004.9 Net outstanding qualified campaign 

expenses.

9004.10 Sale of assets acquired for fundraising purposes.

Authority: 26 U.S.C. 9004 and 9009(b).

§ 9004.1 Major parties.

The eligible candidates of each major 

party in a Presidential election shall be 

entitled to equal payments under 11 CFR 

Part 9005 in an amount which, in the 

aggregate, shall not exceed $20,000,000 

as adjusted by the Consumer Price 

Index in the manner described in 11 CFR 

110.9(c).

§ 9004.2 Pre-election payments for minor

and new party candidates.

(a) Candidate o f a minor party in the

preceding election. An eligible 

candidate of a minor party is entitled to 

preelection payments:

(1) If he or she received at least 5% of 

the total popular vote as the candidate 

of a minor party in the preceding 

election whether or not he or she is the 

same minor party’s candidate in this 

election.

(2) In an amount which is equal, in the 

aggregate, to a proportionate share of 

the amount to which major party 

candidates are entitled under 11 CFR

9004.1.

The aggregate amount received by a 

minor party candidate shall bear the 

same ratio to the amount received by 

the major party candidates as the 

number of popular votes received by the 

minor party Presidential candidate in 

the preceding Presidential election bears 

to the average number of popular votes 

received by all major party candidates 

in that election.

(b) Candidate of a minor party in the

current election. The eligible candidate
Federal Register / Vol. 52, No. 106 / W ednesday, June 3, 1987 / Rules and Regulations 20333

of a minor party whose candidate for 

the office of President in the preceding 

election received at least 5% but less 

than 25% of the total popular vote is 

eligible to receive pre-election 

payments. The amount which a minor 

party candidate is entitled to receive 

under this section shall be computed 

pursuant to 11 CFR 9004.2(a) based on 

the number of popular votes received by 

the minor party’s candidate in the 

preceding Presidential election; 

however, the amount to which the minor 

party candidate is entitled under this 

section shall be reduced by the amount 

to which the minor party’s Presidential 

candidate in this election is entitled 

under 11 CFR 9004.2(a), if any.

(c) New party candidate. A candidate 

of a new party who was a candidate for 

the office of President in at least 10 

States in the preceding election may be 

eligible to receive preelection payments 

if he or she received at least 5% but less 

than 25% of the total popular vote in the 

preceding election. The amount which a 

new party candidate is entitled to 

receive under this section shall be 

computed pursuant to 11 CFR 9004.2(a) 

based on the number of popular votes 

received by the new party candidate in 

the preceding election. If a new party 

candidate is entitled to payments under 

this section, the amount of the 

entitlement shall be reduced by the 

amount to which the candidate is 

entitled under 11 CFR 9004.2(a), if any.

§ 9004.3 Post-election payments.

(a) Minor and new party candidates.

Eligible candidates of a minor party or 

of a new party who, as candidates, 

receive 5 percent or more of the total 

number of popular votes cast for the 

office of President in the election shall 

be entitled to payments under 11 CFR 

Part 9005 equal, in the aggregate, to a 

proportionate share of the amount 

allowed for major party candidates 

under 11 CFR 9004.1. The amount to 

which a minor or new party candidate is 

entitled shall bear the same ratio to the 

amount received by the major party 

candidates as the number of popular 

votes received by the minor or new 

party candidate in the Presidential 

election bears to the average number of 

popular votes received by the major 

party candidates for President in that 

election.

(b) Amount o f entitlement. The 

a8gregate payments to which an eligible 

candidate shall be entitled shall not 

exceed an amount equal to the lower of:

(1) The amount of qualified campaign 

expenses incurred by such eligible 

candidate and his or her authorized 

committee(s), reduced by the amount of 

contributions which are received to

defray qualified campaign expenses by 

such eligible candidate and such 

committee(s); or

(2) The aggregate payments to which 

the eligible candidates of a major party 

are entitled under 11 CFR 9004.1, 

reduced by the amount of contributions 

received by such eligible candidates and 

their authorized committees to defray 

qualified campaign expenses in the case 

of a deficiency in the Fund.

(c) Amount o f entitlement lim ited by

pre-election payment. If an eligible 

candidate is entitled to payment under 

11 CFR 9004.2, the amount allowable to 

that candidate under this section shall 

also be limited to the amount, if any, by 

which the entitlement under 11 CFR 

9004.3(a) exceeds the amount of the 

entitlement under 11 CFR 9004.2.

§ 9004.4 Use of payments.

(a) Qualified campaign expenses. An 

eligible candidate shall use payments 

received under 11 CFR Part 9005 only for 

the following purposes:

(1) A candidate may use such 

payments to defray qualified campaign 

expenses;

(2) A candidate may use such 

payments to repay loans that meet the 

requirements of 11 CFR 100.7(a)(1) or 

100.7(b)(ll) or to otherwise restore funds 

(other than contributions received 

pursuant to 11 CFR 9003.3(b) and 

expended to defray qualified campaign 

expenses) used to defray qualified 

campaign expenses;

(3) A candidate may use such 

payments to restore funds expended in 

accordance with 11 CFR 9003.4 for 

qualified campaign expenses incurred 

by the candidate prior to the beginning 

of the expenditure report period.

(4) Winding down costs. The following 

costs shall be considered qualified 

campaign expenses:

(1) Costs associated with the 

termination of the candidate’s general 

election campaign such as complying 

with the post-election requirements of 

the Act and other necessary 

administrative costs associated with 

winding down the campaign, including 

office space rental, staff salaries and 

office supplies; or

(ii) Costs incurred by the candidate 

prior to the end of the expenditure 

report period for which written 

arrangement or commitment was made 

on or before the close of the expenditure 

report period.

(b) Non-qualified campaign expenses.

(1) General. The following are examples 

of disbursements that are not qualified 

campaign expenses.

(2) Excessive expenditures. An 

expenditure which is in excess of any of 

the limitations under 11 CFR 9003.2 shall

not be considered a qualified campaign 

expense. The Commission will calculate 

the amount of expenditures attributable 

to these limitations using the full 

amounts originally charged for goods 

and services rendered to the committee 

and not the amounts for which such 

obligations were later settled and paid, 

unless the committee can demonstrate 

that the lower amount paid reflects a 

reasonable settlement of a bona fide 

dispute with the creditor.

(3) Expenditures incurred after the

close o f the expenditure report period.

Any expenditures incurred after the 

close of the expenditure report period, 

as defined in 11 CFR 9002.12, are not 

qualified campaign expenses except to 

the extent permitted under 11 CFR 

9004.4(a)(4).

(4) Civil or criminal penalties. Civil or 

criminal penalties paid pursuant to the 

Federal Election Campaign Act are not 

qualified campaign expenses and cannot 

be defrayed from payments received 

under 11 CFR Part 9005. Penalties may 

be paid from contributions in the 

candidate’s legal and accounting 

compliance fund, in accordance with 11 

CFR 9003.3(a)(2)(i)(C). Additional 

amounts may be received and expended 

to pay such penalties, if necessary.

These funds shall not be considered 

contributions or expenditures but all 

amounts so received shall be subject to 

the prohibitions of the Act. Amounts 

received and expended under this 

section shall be reported in accordance 

with 11 CFR Part 104.

(5) Solicitation expenses. Any 

expenses incurred by a major party 

candidate to solicit contributions to a 

legal and accounting compliance fund 

established pursuant to 11 CFR 9003.3(a) 

are not qualified campaign expenses 

and cannot be defrayed from payments 

received under 11 CFR Part 9005.

(6) Payments to candidate. Payments 

made to the candidate by his or her 

committee, other than to reimburse 

funds advanced by the candidate for 

qualified campaign expenses, are not 

qualified campaign expenses.

(c) Repayments. Repayments may be 

made only from the following sources: 

Personal funds of the candidate (without 

regard to the limitations of 11 CFR 

9003.2(c)), contributions and federal 

funds in the committee’s account(s), and 

any additional funds raised subject to 

the limitations and prohibitions of the 

Federal Election Campaign Act of 1971, 

as amended.

§ 9004.5 Investment of public funds.

Investment of public funds or any 

other use of public funds to generate 

income is permissible, provided that an
20884 Federal Register / Vol. 52, No. 106 / W ednesday, June 3, 1987 / Rules and Regulations

amount equal to all net income derived 

from such investments, less Federal,

State and local taxes paid on such 

income, shall be repaid to the Secretary. 

Any net loss resulting from the 

investment of public funds will be 

considered a non-qualified campaign 

expense and an amount equal to the 

amount of such net loss shall be repaid 

to the United States Treasury as 

provided under 11 CFR 9007.2(b)(2)(i).

§ 9004.6 Reimbursements for

transportation and services made available

to media personnel.

(a) If an authorized committee incurs 

expenditures for transportation, ground 

services and facilities (including air 

travel, ground transportation, housing, 

meals, telephone service, typewriters) 

made available to media personnel, 

such expenditures will be considered 

qualified campaign expenses subject to 

the overall expenditure limitations of 11 

CFR 9003.2 (a)(1) and (b)(1).

(b) If reimbursement for such 

expenditures is received by a 

committee, the amount of such 

reimbursement for each individual shall 

not exceed either: The individual’s pro 

rata share of the actual cost of the 

transportation and services made 

available; or a reasonable estimate of 

the individual’s pro rata share of the 

actual cost of the transportation and 

services made available. An individual’s 

pro rata share shall be calculated by 

dividing the total number of individuals 

to whom such transportation and 

services are made available into the 

total cost of the transportation and 

services. The total amount of 

reimbursements received from an 

individual under this section shall not 

exceed the actual pro rata cost of the 

transportation and services made 

available to that person by more than 

10% .

(c) The total amount paid by an 

authorized committee for the cost of 

transportation or for ground services 

and facilities shall be reported as an 

expenditure in accordance with 11 CFR 

104.3(b)(2)(i). Any reimbursement 

received by such committee for 

transportation or ground services and 

facilities shall be reported in accordance 

with 11 CFR 104.3(a)(3)(ix).

(d) (1) The committee may deduct from 

the amount of expenditures subject to 

the overall expenditure limitation of 11 

CFR 9003.2 (a)(1) and (b)(1) the amount 

of reimbursements received for the 

actual cost of transportation and 

services provided under paragraph (a) of 

this section. The committee may also 

deduct from the overall expenditure 

limitation an additional amount of 

reimbursements received equal to 3% of

the actual cost of tranportation and 

services provided under this section as 

the administrative cost to the committee 

of providing such services to media 

personnel and seeking reimbursement 

for them. If the committee has incurred 

higher administrative costs in providing 

these services, the committee must 

document the total cost incurred for 

such services in order to deduct a higher 

amount of reimbursements received 

from the overall expenditure limitation. 

Amounts reimbursed that exceed the 

amount actually paid by the committee 

for transportation and services provided 

under paragraph (a) of this section plus 

the amount of administrative costs 

permitted by this section shall be repaid 

to the Treasury. Amounts paid by the 

committee for transportation, services 

and administrative costs for which no 

reimbursement is received will be 

considered qualified campaign expenses 

subject to the overall expenditure 

limitation in accordance with paragraph 

(a) of this section.

(2) For the purposes of this section, 

"administrative costs” shall include all 

costs incurred by the committee for 

making travel arrangements for media 

personnel and for seeking 

reimbursements, whether performed by 

committee staff or independent 

contractors.

§ 9004.7 Allocation of travel expenditures.

(a) Notwithstanding the provisions of 

11 CFR Part 106, expenditures for travel 

relating to a Presidential or Vice 

Presidential candidate’s campaign by 

any individual, including a candidate, 

shall, pursuant to the provisions of 11 

CFR 9004.7(b), be qualified campaign 

expenses and be reported by the 

candidate’s authorized committee(s) as 

expenditures.

(b) (1) For a trip which is entirely 

campaign-related, the total cost of the 

trip shall be a qualified campaign 

expense and a reportable expenditure.

(2) For a trip which includes 

campaign-related and non-campaign 

related stops, that portion of the cost of 

the trip allocable to campaign activity 

shall be a qualified campaign expense 

and a reportable expenditure. Such 

portion shall be determined by 

calculating what the trip would have 

cost from the point of origin of the trip to 

the first campaign-related stop and from 

the stop through each subsequent 

campaign-related stop to the point of 

origin. If any campaign activity, other 

than incidental contacts, is conducted at 

a stop, that stop shall be considered 

campaign-related.

(3) For each trip, an itinerary shall be 

prepared and such itinerary shall be

made available for Commission

inspection.

(4) For trips by government

conveyance or by charter, a list of all

passengers on such trip, along with a

designation of which passengers are and

which are not campaign-related, shall be

made available for Commission

inspection.

(5) If any individual, including a

candidate, uses government conveyance

or accommodations paid for by a

government entity for campaign-related

travel, the candidate’s authorized

committee shall pay the appropriate

government entity an amount equal to:

(i) The first class commercial air fare

plus the cost of other services, in the

case of travel to a city served by a

regularly scheduled commercial service;

or

(ii) The commercial charter rate plus

the cost of other services, in the case of

travel to a city not served by a regularly

scheduled commercial service.

(6) Travel expenses of a candidate’s

spouse and family when accompanying

the candidate on campaign-related

travel may be treated as qualified

campaign expenses and reportable

expenditures. If the spouse or family

members conduct campaign-related

activities, their travel expenses shall be

qualified campaign expenses and

reportable expenditures.

(7) If any individual, including a

candidate, incurs expenses for

campaign-related travel, other than by

use of government conveyance or

accommodations, an amount equal to

that portion of the actual cost of the

conveyance or accommodations which

is allocable to all passengers, including

the candidate, travelling for campaign

purposes shall be a qualified campaign

expense and shall be reported by the

committee as an expenditure.

(i) If the trip is by charter, the actual

cost for each passenger shall be

determined by dividing the total

operating cost for the charter by the

total number of passengers transported.

The amount which is a qualified

campaign expense and a reportable

expenditure shall be calculated in

accordance with the formula set forth at

11 CFR 9004.7(b)(2) on the basis of the

actual cost per passenger multiplied by

the number of passengers travelling for

campaign purposes.

(ii) If the trip is by non-charter

commercial transportation, the actual

cost shall be calculated in accordance

with the formula set forth at 11 CFR

9004.7(b)(2) on the basis of the

commercial fare. Such actual cost shall

be a qualified campaign expense and a

reportable expenditure.
^çderaj-^RegisteT-^-VoL—SZ, No. 106 / W ednesday, June 3, 1987 / Rules and Regulations 20885

§ 9004.8 Withdrawal by candidate.

(a) Any individual who is not actively 

conducting campaigns in more than one 

State for the office of President or Vice 

President shall cease to be a candidate 

under 11 CFR 9002.2.

(b) An individual who ceases to be a 

candidate under this section shall:

(1] No longer be eligible to receive any 

payments under 11 CFR 9005.2 except to 

defray qualified campaign expenses as 

provided in 11 CFR 9004.4.

(2) Submit a statement, within 30 

calendar days after he or she ceases to 

be a candidate, setting forth the 

information required under 11 CFR 

9004.9(c).

§ 9004.9 Net outstanding qualified

campaign expenses.

(a) Candidates receiving post-election

funding. A candidate who is eligible to 

receive post-election payments under 11 

CFR 9004.3 shall file, no later than 20 

calendar days after the date of the 

election, a preliminary statement of that 

candidate’s net outstanding qualified 

campaign expenses. The candidate’s net 

outstanding qualified campaign 

expenses under this section equal the 

difference between 11 CFR 9004.9(a) (1) 

and (2).

(1) The total of:

(1) All outstanding obligations for 

qualified campaign expenses as of the 

date of the election; plus

(ii) An estimate of the amount of 

qualified campaign expenses that will 

be incurred by the end of the 

expenditure report period; plus

(iii) An estimate of necessary winding 

down costs as defined under 11 CFR 

9004.4(a)(4); less

(2) The total of:

(i) Cash on hand as of the close of 

business on the day of the election, 

including: All contributions dated on or 

before that date; currency; balances on 

deposit in banks, savings and loan 

institutions, and other depository 

institutions; traveller’s checks; - 

certificates of deposit; treasury bills; 

and any other committee investments 

valued at fair market value;

(ii) The fair market value of capital 

assets and other assets on hand; and

(iii) Amounts owed to the campaign in 

the form of credits, refunds of deposits, 

returns, receivables, or rebates of 

qualified campaign expenses; or a 

commercially reasonable amount based 

on the collectibility of those credits, 

returns, receivables or rebates.

(3) The amount submitted as the total 

of outstanding campaign obligations 

under paragraph (a)(1) of this section 

shall not include any accounts payable 

for nonqualified campaign expenses nor 

any amounts determined or anticipated

to be required as a repayment under 11 

CFR Part 9007 or any amounts paid to 

secure a surety bond under 11 CFR 

9007.5(c).

(b) A ll candidates. Each candidate, 

except for individuals who have 

withdrawn pursuant to 11 CFR 9004.8, 

shall submit a statement of net 

outstanding qualified campaign 

expenses no later than 30 calendar days 

after the end of the expenditure report 

period. The statement shall contain the 

information required by 11 CFR 9004.9(a) 

(1) and (2), except that the amount of 

outstanding obligations under 11 CFR 

9004.9(a)(l)(i) and the amount of cash on 

hand, assets and receivables under 11 

CFR 9004.9(a)(2) shall be complete as of 

the last day of the expenditure report 

period.

(c) Candidates who withdraw. An 

individual who ceases to be a candidate 

pursuant to 11 CFR 9004.8 shall file a 

statement of net outstanding qualified 

campaign expenses no later than 30 

calendar days after he or she ceases to 

be a candidate. The statement shall 

contain the information required under 

11 CFR 9004.9(a) (1) and (2), except that 

the amount of outstanding obligations 

under 11 CFR 9004.9(a)(l)(i) and the 

amount of cash on hand, assets and 

receivables under 11 CFR 9004.9(a)(2) 

shall be complete as of the day on which 

the individual ceased to be a candidate.

(d) (1) Capital assets. For purposes of 

this section, the term ‘‘capital asset” 

means any property used in the 

operation of the campaign whose 

purchase price exceeded $2000 when 

acquired by the campaign. Property that 

must be valued as capital assets under 

this section includes, but is not limited 

to, office equipment, furniture, vehicles 

and fixtures acquired for use in the 

operation of the candidate’s campaign, 

but does not include property defined as 

‘‘other assets” under 11 CFR 9004.9(d)(2). 

A list of all capital assets shall be 

maintained by the committee in 

accordance with 11 CFR 9003.5(d)(1).

The fair market value of capital assets 

may be considered to be the total 

original cost of such items when 

acquired less 40%, to account for 

depreciation, except that items acquired 

after the date of ineligibility must be 

valued at their fair market value on the 

date acquired. If the candidate wishes to 

claim a higher depreciation percentage 

for an item, he or she must list that 

capital asset on the statement 

separately and demonstrate, through 

documentation, the fair market value of 

each such asset.

(2) Other assets. The term "other 

assets” means any property acquired by 

the campaign for use in raising funds or 

as collateral for campaign loans. "Other

assets” must be included on the 

candidate’s statement of net outstanding 

qualified campaign expenses if the 

aggregate value of such assets exceeds 

$5000. The value of "other assets” shall 

be determined by the fair market value 

of each item on the last day of the 

expenditure report period or the day on 

which the individual ceased to be a 

candidate, whichever is earlier, unless 

the item is acquired after these dates, in 

which case the item shall be valued on 

the date it is acquired. A list of other 

assets shall be maintained by the 

committee in accordance with 11 CFR 

9003.5(d)(2).

(e) Collectibility o f accounts

receivable. If the committee determines 

that an account receivable of $500 or 

more, including any credit, refund, 

return or rebate, is not collectible in 

whole or in part, the committee shall 

demonstrate through documentation that 

the determination was commercially 

reasonable. The documentation shall 

include records showing the original 

amount of the account receivable, copies 

of correspondence and memoranda of 

communications with the debtor 

showing attempts to collect the amount 

due, and an explanation of how the 

lesser amount or full writeoff was 

determined.

(f) Review o f candidate statement—

(1) General. The Commission will 

review the statement filed by each 

candidate under this section. The 

Commission may request further 

information with respect to statements 

filed pursuant to 11 CFR 9004.9(b) during 

the audit of that candidate’s authorized 

committee(s) under 11 CFR Part 9007.

(2) Candidate eligible for post-election

funding, (i) If, in reviewing the 

preliminary statement of a candidate 

eligible to receive post-election funding, 

the Commission receives information 

indicating that substantial assets of that 

candidate’s authorized committee(s) 

have been undervalued or not included 

in the statement or that the amount of 

outstanding qualified campaign 

expenses has been otherwise overstated 

in relation to campaign assets, the 

Commission may decide to temporarily 

postpone its certification of funds to that 

candidate pending a final determination 

of whether the candidate is entitled to 

all or a portion of the funds for which he 

or she is eligible based on the 

percentage of votes the candidate 

received in the general election.

(ii) Initial determination. In making a 

determination under 11 CFR 

9004.9(f)(2)(i), the Commission will 

notify the candidate within 10 business 

days after its receipt of the statement of 

its initial determination that the
20886 Federal Register / Vol. 52, No. 106 / W ednesday, )une 3, 1987 / Rules and Regulations

candidate is not entitled to receive the 

full amount for which the candidate may 

be eligible. The notice will give the legal 

and factual reasons for the initial 

determination and advise the candidate 

of the evidence on which the 

Commission’s initial determination is 

based. The candidate will be given the 

opportunity to revise the statement or to 

submit, within 10 business days, written 

legal or factual materials to demonstrate 

that the candidate has net outstanding 

qualified campaign expenses that entitle 

the candidate to post-election funds.

Such materials may be submitted by 

counsel if the candidate so desires.

(iii) Final determination. The 

Commission will consider any written 

legal or factual materials submitted by 

the candidate before making its final 

determination. A final determination 

that the candidate is entitled to receive 

only a portion or no post-election 

funding will be accompanied by a 

written statement of reasons for the 

Commission’s action. This statement 

will explain the legal and factual 

reasons underlying the Commission’s 

determination and will summarize the 

results of any investigation on which the 

determination is based.

(iv) If the candidate demonstrates that 

the amount of outstanding qualified 

campaign expenses still exceeds 

campaign assets, the Commission will 

certify the payment of post-election 

funds to which the candidate is entitled.

(v) Petitions for rehearing. The 

candidate may file a petition for 

rehearing of a final determination under 

this section in acccordance with 11 CFR 

9007.5(a).

§ 9004.10 Sale of assets acquired for

fundraising purposes.

(a) General. A minor or new party 

candidate may sell assets donated to the 

campaign or otherwise acquired for 

fundraising purposes subject to the 

limitations and prohibitions of 11 CFR

9003.2, Title 2, United States Code, and 

11 CFR Parts 110 and 114. This section 

will only apply to major party 

candidates to the extent that they sell 

assets acquired either for fundraising 

purposes in connection with his or her 

legal and accounting compliance fund or 

when it is necessary to make up any 

deficiency in payments received from 

the Fund due to the application of 11 

CFR 9005.2(b).

(b) Sale after end of expenditure

report period. A minor or new party 

candidate, or a major party candidate in 

the event of a deficiency in the 

payments received from the Fund due to 

the application of 11 CFR 9005.2(b), 

whose outstanding debts exceed the 

cash on hand after the end of the

expenditure report period as determined 

under 11 CFR 9002.12, may dispose of 

assets acquired for fundraising purposes _ 

in a sale to a wholesaler or other 

intermediary who will in turn sell such 

assets to the public provided that the 

sale to the wholesaler or intermediary is 

an arms-length transaction. Sales made 

under this subsection will not be subject 

to the limitations and prohibitions of 

Title 2, United States Code and 11 CFR 

Parts 110 and 114.

PART 9005—CERTIFICATION BY

COMMISSION

Sec.

9005.1 Certification of payments for 

candidates.

9005.2 Payments to eligible candidates from 

the fund.

Authority: 26 U.S.C. 9005 and 9009(b).

§ 9005.1 Certification of payments for

candidates.

(a) Certification o f payments for

major party candidates. Not later than

10 days after the Commission 

determines that the Presidential and 

Vice Presidential candidates of a major 

party have met all applicable conditions 

for eligibility to receive payments under

11 CFR 9003.1 and 9003.2, the 

Commission shall certify to the 

Secretary that payment in full of the 

amounts to which such candidates are 

entitled under 11 CFR Part 9004 should 

be made pursuant to 11 CFR 9005.2.

(b) Certification o f pre-election

payments for minor and new party

candidates. (1) Not later than 10 days 

after a minor or new party candidate 

has met all applicable conditions for 

eligibility to receive payments under 11 

CFR 9003.1, 9003.2 and 9004.2, the 

Commission will make an initial 

determination of the amount, if any, to 

which the candidate is entitled. The 

Commission will base its determination 

on the percentage of votes received in 

the official vote count certified in each 

State. In notifying the candidate, the 

Commission will give the legal and 

factual reasons for its determination and 

advise the candidate of the evidence on 

which the determination is based.

(2) The candidate may submit, within 

15 days after the Commission’s initial 

determination, written legal or factual 

materials to demonstrate that a 

redetermination is appropriate. Such 

materials may be submitted by counsel 

if the candidate so desires.

(3) The Commission will consider any 

written legal or factual materials timely 

submitted by the candidate in making its 

final determination. A final 

determination of certification by the 

Commission will be accompanied by a 

written statement of reasons for the

Commission’s action. This statement 

will explain the reasons underlying the 

Commission’s determination and will 

summarize the results of any 

investigation on which the 

determination is based.

(c) Certification o f minor and new

party candidates for post-election

payments. (1) Not later than 30 days 

after the general election, the 

Commission will determine whether a 

minor or new party candidate is eligible 

for post-election payments.

(2) The Commission’s determination 

of eligibility will be based on the 

following factors:

(i) The candidate has received at least 

5% or more of the total popular vote 

based on unofficial vote results in each 

State;

(ii) The candidate has filed a 

preliminary statement of his or her net 

outstanding qualified campaign 

expenses pursuant to 11 CFR 9004.9(a); 

and

(iii) The candidate has met all 

applicable conditions for eligibility 

under 11 CFR 9003.1 and 9003.2.

(3) The Commission will notify the 

candidate of its initial determination of 

the amount, if any, to which the 

candidate is entitled, give the legal and 

factual reasons for its determination and 

advise the candidate of the evidence on 

which the determination is based. The 

Commission will also notify the 

candidate that it will deduct a 

percentage of the amount to which the 

candidate is entitled based on the 

unofficial vote results when the 

Commission certifies an amount for 

payment to the Secretary. This 

deduction will be based on the average 

percentage differential between the 

unofficial and official vote results for all 

candidates who received public funds in 

the preceding Presidential general 

election.

(4) The candidate may submit within 

15 days after the Commission’s initial 

determination written legal or factual 

materials to demonstrate that a 

redetermination is appropriate. Such 

materials may be submitted by counsel 

if the candidate so desires.

(5) The Commission will consider any 

written legal or factual materials timely 

submitted by the candidate in making its 

final determination. A final 

determination of certification by the 

Commission will be accompanied by a 

written statement of reasons for the 

Commission’s action. This statement 

will explain the reasons underlying the 

Commission’s determination and will 

summarize the results of any 

investigation on which the 

determination is based.
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(d) All certifications made by the 

Commission pursuant to this section 

shall be final and conclusive, except to 

the extent that they are subject to 

examination and audit by the 

Commission under 11 CFR Part 9007 and 

judicial review under 26 U.S.C. 9011.

§ 9005.2 Payments to eligible candidates

from the fund.

(a) Upon receipt of a certification from 

the Commission under 11 CFR 9005.1 for 

payment to the eligible Presidential and 

Vice Presidential candidates of a 

political party, the Secretary shall pay to 

such candidates out of the Fund the 

amount certified by the Commission. 

Amounts paid to a candidate shall be 

under the control of that candidate.

(b) (1) If at the time of a certification 

from the Commission under 11 CFR 

9005.1, the Secretary determines that the 

monies in the Fund are not, or may not 

be, sufficient to satisfy the full 

entitlements of the eligible candidates of 

all political parties, he or she shall 

withhold an amount which is 

determined to be necessary to assure 

that the eligible candidates of each 

political party will receive their pro rata 

share.

(2) Amounts withheld under 11 CFR 

9005.2(b)(1) shall be paid when the 

Secretary determines that there are 

sufficient monies in the Fund to pay 

such amounts, or pro rata portions 

thereof, to all eligible candidates from 

whom amounts have been withheld.

(c) Payments received from the Fund 

by a major party candidate shall be 

deposited in a separate account 

maintained by his or her authorized 

committee, unless there is a deficiency 

in the Fund as provided under 11 CFR 

9005.2(b)(1). In the case of a deficiency, 

the candidate may establish a separate 

account for payments from the Fund or 

may deposit such payments with 

contributions received pursuant to 11 

CFR 9003.3(b); The account(s) shall be 

maintained at a State bank, federally 

chartered depository institution or other 

depository institution, the deposits or 

accounts of which are insured by the 

Federal Deposit Insurance Corporation 

or the Federal Savings and Loan 

Insurance Corporation.

(d) No funds other than the payments 

received from the Treasury, 

reimbursements, or income generated 

through use of public funds in 

accordance with 11 CFR 9004.5, shall be 

deposited in the account described in 11 

CFR 9005.2(c). “Reimbursements” shall 

include, but are not limited to, refunds of 

deposits, vendor refunds, 

reimbursements for travel expenses 

under 11 CFR 9004.6 and 9004.7 and

reimbursements for legal and accounting 

costs under 11 CFR 9003.3(a)(2)(ii)(B).

PART 9006—REPORTS AND

RECORDKEEPING

Sec.

9006.1 Separate reports.

9006.2 Filing dates.

Authority: 9006 and 9009(b).

§ 9006.1 S eparate reports.

(a) The authorized committee(s) of a 

candidate shall report all expenditures 

to further the candidate’s general 

election campaign in reports separate 

from reports of any other expenditures 

made by such committee(s) with respect 

to other elections. Such reports shall be 

filed pursuant to the requirements of 11 

CFR Part 104.

(b) The authorized committee(s) of a 

candidate shall file separate reports as 

follows:

(1) One report shall be filed which 

lists all receipts and disbursements of:

(1) Contributions and loans received 

by a major party candidate pursuant to 

11 CFR Part 9003 to make up 

deficiencies in Fund payments due to 

the application of 11 CFR Part 9005;

(ii) Contributions and loans received 

pursuant to 11 CFR 9003.2(b)(2) by a 

minor, or new party for use in the 

general election;

(iii) Receipts for expenses incurred 

before the beginning of the expenditure 

report period pursuant to 11 CFR 9003.4;

(iv) Personal funds expended in 

accordance with 11 CFR 9003.2(c); and

(v) Payments received from the Fund.

(2) A second report shall be filed 

which lists all receipts of and 

disbursements from, contributions 

received for the candidate’s legal and 

accounting compliance fund in 

accordance with 11 CFR 9003.3(a).

§ 9006.2 Filing dates.

The reports required to be filed under 

11 CFR 9006.1 shall be filed during an 

election year on a monthly or quarterly 

basis as prescribed at 11 CFR 

104.5(b)(1). During a nonelection year, 

the candidate’s principal campaign 

committee may elect to file reports 

either on a monthly or quarterly basis in 

accordance with 11 CFR 104.5(b)(2).

PART 9007—EXAMINATIONS AND

AUDITS; REPAYMENTS

Sec.

9007.1 Audits.

9007.2 Repayments.

9007.3 Extensions of time.

9007.4 Additional audits.

9007.5 Petitions for rehearing; stays of 

repayment determinations.

9007.6 Stale-dated committee checks. 

Authority: 26 U.S.C. 9007 and 9009(b).

§9007.1 Audits.

(a) General. (1) After each 

Presidential election, the Commission 

will conduct a thorough examination 

and audit of the receipts, disbursements, 

debts and obligations of each candidate, 

his or her authorized committee(s), and 

agents of such candidates or 

committees. Such examination and audit 

will include, but will not be limited to, 

expenditures pursuant to 11 CFR 9003.4 

prior to the beginning of the expenditure 

report period, contributions to and 

expenditures made from the legal and 

accounting compliance fund established 

under 11 CFR 9003.3(a), contributions 

received to supplement any payments 

received from the Fund, and qualified 

campaign expenses.

(2) In addition, the Commission may 

conduct other examinations and audits 

from time to time as it deems necessary 

to carry out the provisions of this 

subchapter.

(3) Information obtained pursuant to 

any audit and examination conducted 

under 11 CFR 9007.1(a) (1) and (2) may 

be used by the Commission as the basis, 

or partial basis, for its repayment 

determinations under 11 CFR 9007.2.

(b) Conduct o f fieldwork. (1) The 

Commission will give the candidate’s 

authorized committee at least two 

weeks’ notice of the Commission’s 

intention to commence fieldwork on the 

audit and examination. The fieldwork 

will be conducted at a site provided by 

the committee.

(i) Office space and records. On the 

date scheduled for the commencement 

of fieldwork, the candidate or his or her 

authorized committee(s) shall provide 

Commission staff with office space and 

committee records in accordance with 

the candidate and committee agreement 

under 11 CFR 9003.1(b)(6).

(ii) Availability of committee

personnel. On the date scheduled for the 

commencement of fieldwork, the 

candidate or his or her authorized 

committee(s) shall have committee 

personnel present at the site of the 

fieldwork. Such personnel shall be 

familiar with the committee’s records 

and operation and shall be available to 

Commission staff to answer questions 

and to aid in locating records.

(iii) Failure to provide staff, records or

office space. If the candidate or his or 

her authorized committee(s) fail to 

provide adequate office space, 

personnel or committee records, the 

Commission may seek judicial 

intervention under 2 U.S.C. 437d or 26 

U.S.C. 9010(c) to enforce the candidate 

and committee agreement made under 

11 CFR 9003.1(b). Before seeking judicial 

intervention, the Commission will notify
20888 Federal Register / Vol. 52, No. 106 / W ednesday, June 3, 1987 / Rules and Regulations

the candidate of his or her failure to 

comply with the agreement and will 

recommend corrective action to bring 

the candidate into compliance. Upon 

receipt of the Commission’s notification, 

the candidate will have ten (10) 

calendar days in which to take the 

corrective action indicated or to 

otherwise demonstrate to the 

Commission in writing that he or she is 

complying with the candidate and 

committee agreements.

(iv) If, in the course of the audit 

process, a dispute arises over the 

documentation sought or other 

requirements of the candidate 

agreement, the candidate may seek 

review by the Commission of the issues 

raised. To seek review, the candidate 

shall submit a written statement within 

10 days after the disputed Commission 

staff request is made, describing the 

dispute and indicating the candidate’s 

proposed alternative(s).

(2) Fieldwork will include the 

following steps designed to keep the 

candidate and committee informed as to 

the progress of the audit and to expedite 

the process:

(i) Entrance conference. At the outset 

of the fieldwork, Commission staff will 

hold an entrance conference, at which 

the candidate’s representatives will be 

advised of the purpose of the audit and 

the general procedures to be followed. 

Future requirements of the candidate 

and his or her authorized committee, 

such as possible repayments to the 

United States Treasury, will also be 

discussed. Committee representatives 

shall provide information and records 

necessary to conduct the audit, and 

Commission staff will be available to 

answer committee questions.

(ii) Review o f records. During the 

fieldwork, Commission staff will review 

committee records and may conduct 

interviews of committee personnel. 

Commission staff will be available to 

explain aspects of the audit and 

examination as it progresses. Additional 

meetings between Commission staff and 

committee personnel may be held from 

time to time during the fieldwork to 

discuss possible audit findings and to 

resolve issues arising during the course 

of the audit.

(iii) Exit conference. At the conclusion 

of the fieldwork, Commission staff will 

hold an exit conference to discuss with 

committee representatives the staff s 

preliminary findings and 

recommendations which the 

Commission staff anticipates that it may 

present to the Commission for approval. 

Commission staff will advise committee 

representatives at this conference of the 

projected timetable regarding the 

issuance of an audit report, the

committee’s opportunity to respond 

thereto, and the Commission’s initial 

and final repayment determinations 

under 11 CFR 9007.2.

(3) Commission staff may conduct 

additional fieldwork after the 

completion of the fieldwork conducted 

pursuant to 11 CFR 9007.1(b) (1) and (2). 

Factors that may necessitate such 

follow-up fieldwork include, but are not 

limited to, the following:

(1) Committee response to audit 

findings;

(ii) Financial activity of the committee 

subsequent to the fieldwork conducted 

pursuant to 11 CFR 9007.1(b)(1);

(iii) Committee responses to 

Commission repayment determinations 

made under 11 CFR 9007.2.

(4) The Commission will notify the 

candidate and his or her authorized 

committee if follow-up fieldwork is 

necessary. The provisions of 11 CFR 

9007.1(b)(1) and

(2) will apply to any additional 

fieldwork conducted.

(c) Preparation o f interim audit report.

(1) After the completion of the fieldwork 

conducted pursuant to 11 CFR 

9007.1(b)(1), the Commission will issue 

an interim audit report to the candidate 

and his or her authorized committee.

The interim audit report may contain 

Commission findings and 

recommendations regarding one or more 

of the following areas:

(1) An evaluation of procedures and 

systems employed by the candidate and 

committee to comply with applicable 

provisions of the Federal Election 

Campaign Act, Presidential Election 

Campaign Fund Act and Commission 

regulations;

(ii) Accuracy of statements and 

reports filed with the Commission by the 

candidate and committee;

(iii) Compliance of the candidate and 

committee with applicable statutory and 

regulatory provisions in those instances 

where the Commission has not 

instituted any enforcement action on the 

matter(s) under the provisions of 2 

U.S.C. 437g and 11 CFR Part 111; and

(iv) Preliminary calculations regarding 

future repayments to the United States 

Treasury.

(2) The candidate and his or her 

authorized committee will have an 

opportunity to submit in writing within 

30 calendar days of service of the 

interim report, legal and factual 

materials disputing or commenting on 

the contents of the interim report. Such 

materials may be submitted by counsel 

if the candidate so desires.

(3) The Commission will consider any 

written legal and factual materials 

submitted by the candidate or his or her 

authorized committee in accordance

with 11 CFR 9007.1(c)(2) before 

approving and issuing an audit report to 

be released to the public. The contents 

of the publicly-released audit report may 

differ from that of the interim report 

since the Commission will consider 

timely submissions of legal and factual 

materials by the candidate or committee 

in response to the interim report.

(d) Preparation of publicly-released

audit report. An audit report prepared 

subsequent to an interim report will be 

publicly released pursuant to 11 CFR 

9007.1(e). This report will contain 

Commission findings and 

recommendations addressed in the 

interim audit report but may contain 

adjustments based on the candidate’s 

response to the interim report. In 

addition, this report will contain an 

initial repayment determination made 

by the Commission pursuant to 11 CFR 

9007.2(c)(1) in lieu of the preliminary 

calculations set forth in the interim 

report.

(e) Public release of audit report. (1) 

After the candidate and committee have 

had an opportunity to respond to a 

written interim report of the 

Commission, the Commission will make 

public the audit report prepared 

subsequent to the interim report, as 

provided in 11 CFR 9007.1(d).

(2) If the Commission determines, on 

the basis of information obtained under 

the audit and examination process, that 

certain matters warrant enforcement 

under 2 U.S.C. 437g and 11 CFR Part 111, 

those matters will not be contained in 

the publicly-released report. In such 

cases, the audit report will indicate that 

certain other matters have been referred 

to the Commission’s Office of General 

Counsel.

(3) The Commission will provide the 

candidate and the committee with 

copies of the agenda document 

containing those portions of the final 

audit report to be considered in open 

session 24 hours prior to releasing the 

agenda document to the public. The 

Commission will also provide the 

candidate and committee with copies of

the final audit report 24 hours before 

releasing the report to the public.

(4) Addenda to the audit report may 

be issued from time to time as 

circumstances warrant and as 

additional information becomes 

available. Such addenda may be based 

in part on follow-up fieldwork 

conducted under 11 CFR 9007.1(b)(3) and 

will be Dlaced on the public record.

§ 9007.2 Repayments.

(a) General. (1) A candidate who has 

received payments from the Fund under 

11 CFR Part 9005 shall pay the United
Federal Register / Vol. 52, No. 106 / W ednesday, June 3, 1987 / Rules and Regulations 20889

States Treasury any amounts which the 

Commission determines to be repayable 

under this section. In making repayment 

determinations under this section, the 

Commission may utilize information 

obtained from audits and examinations 

conducted pursuant to 11 CFR 9007.1 or 

otherwise obtained by the Commission 

in carrying out its responsibilities under 

this subchapter.

(2) The Commission will notify the 

candidate of any repayment 

determinations made under this section 

as soon as possible, but not later than 3 

years after the close of the expenditure 

report period.

(3) Once the candidate receives notice 

of the Commission’s final repayment 

determination under this section, the 

candidate should give preference to the 

repayment over all other outstanding 

obligations of his or her committee, 

except for any federal taxes owed by 

the committee.

(b) Bases for repayment. The 

Commission may determine that an 

eligible candidate of a political party 

who has received payments from the 

Fund must repay the United States 

Treasury under any of the 

circumstances described below,

(1) Payments in excess o f candidate’s

entitlement. If the Commission 

determines that any portion of the 

payments made to the candidate was in 

excess of the aggregate payments to 

which such candidate was entitled, it 

will so notify the candidate, and such 

candidate shall pay to the United States 

Treasury an amount equal to such 

portion.

(2) Use o f funds for non-qualified

campaign expenses, (i) If the 

Commission determines that any 

amount of any payment to an eligible 

candidate from the Fund was used for 

purposes other than those described in 

paragraphs (b)(2)(i) (A) through (C) of 

this section, it will notify the candidate 

of the amount so used, and such 

candidate shall pay to the United States 

Treasury an amount equal to such 

amount.

(A) To defray qualified campaign 

expenses;

(B) To repay loans, the proceeds of 

which were used to defray qualified 

campaign expenses; and

(C) To restore funds (other than 

contributions which were received and 

expended by minor or new party 

candidates to defray qualified campaign 

expenses) which were used to defray 

qualified campaign expenses.

(ii) Examples of Commission 

repayment determinations under 11 CFR 

9007.2(b)(2) include, but are not limited 

to the following:

(A) Determinations that a candidate, a 

candidate’s authorized committee(s) or 

agent(s) have incurred expenses in 

excess of the aggregate payments to 

which an eligible major party candidate 

is entitled;

(B) Determinations that amounts spent 

by a candidate, a candidate's authorized 

committee (s) or agent(s) from the Fund 

were not documented in accordance 

with 11 CFR 9003.5;

(C) Determinations that any portion of 

the payments made to a candidate from 

the Fund was expended in violation of 

State or Federal law; and

(D) Determinations that any portion of 

the payments made to a candidate from 

the Fund was used to defray expenses 

resulting from a violation of State or 

Federal law, such as the payment of 

fines or penalties.

(in) In the case of a candidate who 

has received contributions pursuant to 

11 CFR 9003.3 (b) or (c), the amount of 

any repayment sought under this section 

shall bear the same ratio to the total 

amount determined to have been used 

for nonqualified campaign expenses as 

the amount of payments certified to the 

candidate from the Fund bears to the 

total amount of deposits of contributions 

and federal funds, as of December 31 of 

the Presidential election year.

(3) Surplus. If the Commission 

determines that a portion of payments 

from the Fund remains unspent after all 

qualified campaign expenses have been 

paid, it shall so notify the candidate, 

and such candidate shall pay the United 

States Treasury that portion of surplus 

funds.

(4) Income on investment o f payments

from the fund. If the Commission 

determines that a candidate received 

any income as a result of investment or 

other use of payments from the Fund 

pursuant to 11 CFR 9004.5, it shall so 

notify the candidate and such candidate 

shall pay to the United States Treasury 

an amount equal to the amount 

determined to be income, less any 

Federal, State or local taxes on such 

income.

(5) Unlawful acceptance of

contributions by an eligible candidate of

a major party. If the Commission 

determines that an eligible candidate of 

a major party, the candidate’s 

authorized committee(s) or agent(s) 

accepted contributions to defray 

qualified campaign expenses (other than 

contributions to make up deficiencies in 

payments from the Fund, or to defray 

expenses incurred for legal and 

accounting services in accordance with 

11 CFR 9003.3(a)), it shall notify the 

candidate of the amount of contributions 

so accepted, and the candidate shall pay

to the United States Treasury an amount 

equal to such amount.

(c) Repayment determination

procedures. The Commission repayment 

determination will be made in 

accordance with the procedures set 

forth at 11 CFR 9007.2 (c)(1) through

(c)(4).

(1) Initial determination. The 

Commission will provide the candidate 

with a written notice of its initial 

repayment determination(s). This notice 

will be included in the Commission’s 

publicly-released audit report pursuant 

to 11 CFR 9007.1(d) and will set forth the 

legal and factual reasons for such 

determination(s). Such notice will also 

advise the candidate of the evidence 

upon which any such determination is 

based. If the candidate does not dispute 

an initial repayment determination of 

the Commission within 30 calendar days 

after service of the notice, such initial 

determination will be considered a final 

determination of the Commission.

(2) Submission o f written materials. If 

the candidate disputes the Commission’s 

initial repayment determination(s), he or 

she shall have an opportunity to submit 

in writing, within 30 calendar days after 

service of the Commission’s notice, legal 

and factual materials to demonstrate 

that no repayment, or a lesser 

repayment, is required. The Commission 

will consider any written legal and 

factual materials submitted by the 

candidate within this 30 day period in 

making its final repayment 

determination(s). Such materials may be 

submitted by counsel if the candidate so 

desires.

(3) Oral presentation. A candidate 

who has submitted written materials 

under 11 CFR 9007.2(c)(2) may request 

that the Commission provide such 

candidate with an opportunity to 

address the Commission in open 

session. If the Commission decides by 

an affirmative vote of four (4) of its 

members to grant the candidate’s 

request, it will inform the candidate of 

the date and time set for the oral 

presentation. At the date and time set 

by the Commission, the candidate or 

candidate’s designated representative 

will be allotted an amount of time in 

which to make an oral presentation to 

the Commission based upon the legal 

and factual materials submitted under 

11 CFR 9007.2(c)(2). The candidate or 

representative will also have the 

opportunity to answer any questions 

from individual members of the 

Commission.

(4) Final determination. In making its 

final repayment determination(s), the 

Commission will consider any 

submission made under 11 CFR
20890 Federal Register / Vol. 52, No. 106 / W ednesday, June 3, 1987 / Rules and Regulations

9007.2(c)(2) and any oral presentation 

made under 11 CFR 9007.2(c)(3). A final 

determination that a candidate must 

repay a certain amount will be 

accompanied by a written statement of 

reasons for the Commission’s actions. 

This statement will explain the reasons 

underlying the Commission’s 

determination and will summarize the 

results of any investigation upon which 

the determination is based.

(d) Repayment period. (1) Within 90 

calendar days of service of the notice of 

the Commission’s initial repayment 

determination(s), the candidate shall 

repay to the United States Treasury 

amounts which the Commission has 

determined to be repayable. Upon 

application by the candidate, the 

Commission may grant an extension of 

up to 90 calendar days in which to make 

repayment.

(2) If the candidate submits written 

materials under 11 CFR 9007.2(c)(2) 

disputing the Commission’s initial 

repayment determination(s), the time for 

repayment will be suspended until the 

Commission makes its final repayment 

determination(s). Within 30 calendar 

days after service of the notice of the 

Commission’s final repayment 

determination(s), the candidate shall 

repay to the United States Treasury 

amounts which the Commission has 

determined to be repayable. Upon 

application by the candidate, the 

Commission may grant an extension of 

up to 90 calendar days in which to make 

repayment.

(e) Computation of time. The time 

periods established by this section shall 

be computed in accordance with 11 CFR 

111.2.

(f) Additional repayments. Nothing in 

this section will prevent the Commission 

from making additional repayment 

determinations on one or more of the 

bases set forth at 11 CFR 9007.2(b) after 

it has made a final determination on any 

such basis. The Commission may make 

additional repayment determinations 

where there exist facts not used as the 

basis for a previous final determination. 

Any such additional repayment 

determination will be made in 

accordance with the provisions of this 

section.

(g) Newly-discovered assets. If, after 

any initial or final repayment 

determination made under this section, 

a candidate or his or her authorized 

committee(s) receives or becomes aware 

of assets not previously included in any 

statement of net outstanding qualified 

campaign expenses submitted pursuant 

to 11 CFR 9004.9, the candidate or his or 

her authorized committee(s) shall 

promptly notify the Commission of such 

newly-discovered assets. Newlydiscovered assets may include refunds, 

rebates, late-arriving receivables, and 

actual receipts for capital assets in 

excess of the value specified in any 

previously-submitted statement of net 

outstanding qualified campaign 

expenses. Newly-discovered assets may 

serve as a basis for additional 

repayment determinations under 11 CFR 

9007.2(f).

(h) Limit on repayment. No repayment 

shall be required from the eligible 

candidates of a political party under 11 

CFR 9007.2 to the extent that such 

repayment, when added to other 

repayments required from such 

candidates under 11 CFR 9007.2, 

exceeds the amount of payments 

received by such candidates under 11 

CFR 9005.3.

(i) Petitions for rehearing; stays

pending appeal. The candidate may file 

a petition for rehearing of a final 

repayment determination in accordance 

with 11 CFR 9007.5(a). The candidate 

may request a stay of a final repayment 

determination in accordance with 11 

CFR 9007.5(c) pending the candidate’s 

appeal of that repayment determination.

§ 9007.3 Extensions of time.

(a) It is the policy of the Commission 

that extensions of time under 11 CFR 

Part 9007 will not be routinely granted.

(b) Whenever a candidate has a right 

or is required to take action within a 

period of time prescribed by 11 CFR Part 

9007 or by notice given thereunder, the 

candidate may apply in writing to the 

Commission for an extension of time in 

which to exercise such right or take such 

action. The candidate shall demonstrate 

in the application for extension that 

good cause exists for his or her request.

(c) An application for extension of 

time shall be made at least 7 calendar 

days prior to the expiration of the time 

period for which the extension is sought. 

The Commission may, upon a showing 

of good cause, grant an extension of 

time to a candidate who has applied for 

such extension in a timely manner. The 

length of time of any extension granted 

hereunder shall be decided by the 

Commission and may be less than the 

amount of time sought by the candidate 

in his or her application.

(d) If a candidate fails to seek an 

extension of time, exercise a right or 

take a required action prior to the 

expiration of a time period prescribed 

by 11 CFR Part 9007, the Commission 

may, on the candidate’s showing of 

excusable neglect:

(1) Permit such candidate to exercise 

his or her right(s), or take such required 

action(s) after the expiration of the 

prescribed time period; and

(2) Take into consideration any 

information obtained in connection with 

the exercise of any such right or taking 

of any such action before making 

decisions or determinations under 11 

CFR Part 9007.

§ 9007.4 Additional audits.

In accordance with 11 CFR 104.16(c), 

the Commission, pursuant to 11 CFR 

111.10, may upon affirmative vote of four 

members conduct an audit and field 

investigation of any committee in any 

case in which the Commission finds 

reason to believe that a violation of a 

statute or regulation over which the 

Commission has jurisdiction has 

occurred or is about to occur.

§ 9007.5 Petitions for rehearing; stays of

repayment determinations.

(a) Petitions for rehearing. (1) 

Following the Commission’s final 

repayment determination or a final 

determination that a candidate is not 

entitled to all or a portion of postelection funding under 11 CFR 9004.9(f), 

the candidate may file a petition for 

rehearing setting forth the relief desired 

and the legal and factual basis in 

support. To be considered by the 

Commission, petitions for rehearing 

must:

(1) Be filed within 20 calendar days 

following service of the Commission’s 

final determination;

(ii) Raise new questions of law or fact 

that would materially alter the 

Commission’s final determination; and

(iii) Set forth clear and convincing 

grounds why such questions were not 

and could not have been presented 

during the earlier determination process.

(2) If a candidate files a timely 

petition under this section challenging a 

Commission final repayment 

determination, the time for repayment 

will be suspended until the Commission 

serves notice on the candidate of its 

determination on the petition. The time 

periods for making repayment under 11 

CFR 9007.2(d)(2) shall apply to any 

amounts determined to be repayable 

following the Commission’s 

consideration of a petition for rehearing 

under this section.

(b) Effect of failure to raise issues.

The candidate’s failure to raise an 

argument in a timely fashion during the 

initial determination process or in a 

petition for rehearing under this section, 

as appropriate, shall be deemed a 

waiver of the candidate’s right to 

present such arguments in any future 

stage of proceedings including any 

petition for review filed under 26 U.S.C. 

9011(a). An issue is not timely raised in 

a petition for rehearing if it could have
Federal Register / Vol. 52, No. 106 / W ednesday, June 3, 1937 / Rules and Regulations 20891

been raised earlier in response to the 

Commission’s initial determination.

(c) Stay o f repayment determination

pending appeal. (l)(i) The candidate 

may apply to the Commission for a stay 

of all or a portion of the amount 

determined to be repayable under this 

section or under 11 CFR 9007.2 pending 

the candidate’s appeal of that 

repayment determination pursuant to 26 

U.S.C. 9011(a). The repayment amount 

requested to be stayed shall not exceed 

the amount at issue on appeal.

(ii) A request for a stay shall be made 

in writing and shall be filed within 30 

calendar days after service of the 

Commission’s decision on a petition for 

rehearing under paragraph (a) or, if no 

petition for rehearing is filed, within 30 

calendar days after service of the 

Commission’s final repayment 

determination under 11 CFR 9007.2(c)(4).

(2) The Commission’s approval of a 

stay request will be conditioned upon 

the candidate’s presentation of evidence 

in the stay request that he or she:

(i) Has placed the entire amount at 

issue in a separate interest-bearing 

account pending the outcome of the 

appeal and that withdrawals from the 

account may only be made with the joint 

signatures of the candidate or his or her 

agent and a Commission representative: 

or

(ii) Has posted a surety bond 

guaranteeing payment of the entire 

amount at issue plus interest; or

(iii) Has met the following criteria:

(A) He or she will suffer irreparable 

injury in the absence of a stay; and, if 

so, that

(B) He or she has made a strong 

showing of the likelihood of success on 

the merits of the judicial action.

(C) Such relief is consistent with the 

public interest; and

(D) No other party interested in the 

proceedings would be substantially 

harmed by the stay.

(3) In determining whether the 

candidate has made a strong showing of 

the likelihood of success on the merits 

under paragraph (c)(2)(iii)(B) of this 

section, the Commission may consider 

whether the issue on appeal presents a 

novel or admittedly difficult legal 

question and whether the equities of the 

case suggest that the status quo should 

be maintained.

(4) All stays shall require the payment 

of interest on the amount at issue. The 

amount of interest due shall be 

calculated from the date 30 days after 

service of the Commission’s final 

repayment determination under 11 CFR 

9007.2(c)(4) and shall be the greater of:

(i) An amount calculated in 

accordance with 28 U.S.C. 1961 (a) and 

(b); or

(ii) The amount actually earned on the 

funds set aside under this section.

§ 9007.6 Stale-dated com m ittee checks.

If the committee has checks 

outstanding to creditors or contributors 

that have not been cashed, the 

committee shall notify the Commission. 

The committee shall inform the 

Commission of its efforts to locate the 

payees, if such efforts have been 

necessary, and its efforts to encourage 

the payees to cash the outstanding 

checks. The committee shall also submit 

a check for the total amount of such 

outstanding checks, payable to the 

United States Treasury.

2. By revising Part 9012 to read as 

follows:

PART 9012—UNAUTHORIZED

EXPENDITURES AND

CONTRIBUTIONS

Sec.

9012.1 Excessive expenses.

9012.2 Unauthorized acceptance of 

contributions.

9012.3 Unlawful use of payments received 

horn the fund.

9012.4 Unlawful misrepresentations and 

falsification of statements, records or 

other evidence to the Commission; 

refusal to furnish books and records.

9012.5 Kickbacks and illegal payments. 

Authority: 26 U.S.C. 9012.

§ 9012.1 Excessive expenses.

(a) It shall be unlawful for an eligible 

candidate of a political party for 

President and Vice President in a 

Presidential election or the candidate’s 

authorized committee(s) knowingly and 

willfully to incur qualified campaign 

expenses in excess of the aggregate 

payments to which the eligible 

candidates of a major party are entitled 

under 11 CFR Part 9004 with respect to 

such election.

(b) It shall be unlawful for the 

national committee of a major or minor 

party knowingly and willfully to incur 

expenses with respect to a presidential 

nominating convention in excess of the 

expenditure limitation applicable with 

respect to such committee under 11 CFR 

Part 9008, unless the incurring of such 

expenses is authorized by the 

Commission under 11 CFR 9008.7(a)(3).

§9 012.2 Unauthorized acceptance of

contributions.

(a) It shall be unlawful for an eligible 

candidate of a major party in a 

Presidential election or any of his or her 

authorized committees knowingly and 

willfully to accept any contribution to 

defray qualified campaign expenses, 

except to the extent necessary to make 

up any deficiency in payments received 

from the Fund due to the application of

11 CFR 9005.2(b), or to defray expenses 

which would be qualified campaign 

expenses but for 11 CFR 9002.11(a)(3).

(b) It shall be unlawful for an eligible 

candidate of a political party (other than 

a major party) in a Presidential election 

or any of his or her authorized 

committees knowingly and willfully to 

accept and expend or retain 

contributions to defray qualified 

campaign expenses in an amount which 

exceeds the qualified campaign 

expenses incurred in that election by 

that eligible candidate or his or her 

authorized committee(s).

§ 9012.3 Unlawful use o f paym ents

received from the fund.

(a) It shall be unlawful for any person 

who receives any payment under 11 

CFR Part 9005, or to whom any portion 

of any payment so received is 

transferred, knowingly and willfully to 

use, or authorize the use of, such 

payment or any portion thereof for any 

purpose other than—

(1) To defray the qualified campaign 

expenses with respect to which such 

payment was made; or

(2) To repay loans the proceeds of 

which were used, or otherwise to restore 

funds (other than contributions to defray 

qualified campaign expenses which 

were received and expended) which 

were used, to defray such qualified 

campaign expenses.

(b) It shall be unlawful for the 

national committee of a major or minor 

party which receives any payment under 

11 CFR Part 9008 to use, or authorize the 

use of, such payment for any purpose 

other than a purpose authorized by 11 

CFR 9008.6.

§ 9012.4 Unlawful m isrepresentations and

falsification o f statem ents, records or other

evidence to th e comm ission; refusal to

furnish books and records.

It shall be unlawful for any person 

knowingly and willfully—

(a) To furnish any false, fictitious, or 

fraudulent evidence, books or 

information to the Commission under 11 

CFR Parts 9001-9008, or to include in 

any evidence, books or information so 

furnished any misrepresentation of a 

material fact, or to falsify or conceal any 

evidence, books or information relevant 

to a certification by the Commission or 

any examination and audit by the 

Commission under 11 CFR Parts 9001 et

seq.; or

(b) To fail to furnish to the 

Commission any records, books or 

information requested by the 

Commission for purposes of 11 CFR 

Parts 9001 et seq.
20892 Federal Register / Vol. 52, No. 106 / W ednesday, June 3, 1987 / Rules and Regulations

§ 9012.5 K ickbacks and illegal paym ents.

(a) It shall be unlawful for any person 

knowingly and willfully to give or 

accept any kickback or any illegal 

payment in connection with any 

qualified campaign expenses of any 

eligible candidate or his or her 

authorized committee(s).

(b) It shall be unlawful for the 

national committee of a major or minor 

party knowingly and willfully to give or 

accept any kickback or any illegal 

payment in connection with any 

expense incurred by such committee 

with respect to a Presidential 

nominating convention.

11 CFR is amended by revising 

Subchapter F to read as follows:

SUBCHAPTER F— PRESID EN TIA L

ELECTION CAM PAIGN FUND:

PRESID EN TIA L PRIM ARY M ATCHING FUND

Part

9031 Scope.

9032 Definitions.

9033 Eligibility for payment.

9034 Entitlements.

9035 Expenditure limitations.

9036 Review of submission and certification 

of payments by commission.

9037 Payments.

9038 Examinations and audits.

9039 Review and investigation authority.

SUBCHAPTER F— PRESID EN TIA L

ELECTIO N CAMPAIGN FUND:

PRESIDENTIAL PRIM ARY M ATCHING FUND

PART 9031—SCOPE

Sec.

9031.1 Scope.

Authority: 26 U.S.C. 9031 and 9039(b).

§ 9031.1 Scope.

This subchapter governs entitlement 

to and use of funds certified from the 

Presidential Primary Matching Payment 

Account under 26 U.S.C. 9031 et seq. The 

definitions, restrictions, liabilities and 

obligations imposed by this subchapter 

are in addition to those imposed by 

sections 431-455 of Title 2, United States 

Code, and regulations prescribed 

thereunder (11 CFR Parts 100 through 

115). Unless expressly stated to the 

contrary, this subchapter does not alter 

the effect of any definitions, restrictions, 

obligations and liabilities imposed by 

sections 431-455 of Title 2, United States 

Code, or regulations prescribed 

thereunder (11 CFR Parts 100 through 

115).

PART 9032—DEFINITIONS

Sec.

9032.1 Authorized committee.

9032.2 Candidate.

9032.3 Commission.

9032.4 Contribution.

9032.5 Matching payment account.

Sec.

9032.6 Matching payment period.

9032.7 Primary election.

9032.8 Political committee.

9032.9 Qualified campaign expense.

9032.10 Secretary.

9032.11 State.

Authority: 26 U.S.C. 9032 and 9039(b).

§ 9032.1 Authorized committee.

(a) Notwithstanding the definition at 

11 CFR 100.5, “authorized committee” 

means with respect to candidates (as 

defined at 11 CFR 9032.2) seeking the 

nomination of a political party for the 

office of President, any political 

committee that is authorized by a 

candidate to solicit or receive 

contributions or to incur expenditures 

on behalf of the candidate. The term 

"authorized committee” includes the 

candidate’s principal campaign 

committee designated in accordance 

with 11 CFR 102.12, any political 

committee authorized in writing by the 

candidate in accordance with 11 CFR

102.13. and any political committee not 

disavowed by the candidate in writing 

pursuant to 11 CFR 100.3(a)(3).

(b) Any withdrawal of an 

authorization shall be in writing and 

shall be addressed and filed in the same 

manner provided for at 11 CFR 102.12 or

102.13.

(c) For the purposes of this 

subchapter, references to the 

“candidate” and his or her 

responsibilities under this subchapter 

shall also be deemed to refer to the 

candidate’s authorized committee(s).

(d) An expenditure by an authorized 

committee on behalf of the candidate 

who authorized the committee cannot 

qualify as an independent expenditure.

(e) A delegate committee, as defined 

in 11 CFR 100.5(e)(5), is not an 

authorized committee of a candidate 

unless it also meets the requirements of 

11 CFR 9032.1(a). Expenditures by 

delegate committees on behalf of a 

candidate may count against that 

candidate’s expenditure limitation under 

the circumstances set forth in 11 CFR

110.14.

§ 9032.2 Candidate.

“Candidate” means an individual who 

seeks nomination for election to the 

office of President of the United States. 

An individual is considered to seek 

nomination for election if he or she—

(a) Takes the action necessary under 

the law of a State to qualify for a 

caucus, convention, primary election or 

runoff election;

(b) Receives contributions or incurs 

qualified campaign expenses;

(c) Gives consent to any other person 

to receive contributions or to incur

qualified campaign expenses on his or 

her behalf; or

(d) Receives written notification from 

the Commission that any other person is 

receiving contributions or making 

expenditures on the individual’s behalf 

and fails to disavow that activity by 

letter to the Commission within 30 

calendar days after receipt of 

notification.

§ 9032.3 Com m ission.

“Commission” means the Federal 

Election Commission, 999 E Street, NW., 

Washington, DC 20463.

§ 9032.4 Contribution.

For purposes of this subchapter, 

"contribution” has the same meaning 

given the term under 2 U.S.C. 431(8)(A) 

and l i CFR 100.7, except as provided at 

11 CFR 9034.4(b)(4).

§ 9032.5 Matching paym ent ac c o u n t

“Matching payment account” means 

the Presidential Primary Matching 

Payment Account established by the 

Secretary of the Treasury under 26 

U.S.C. 9037(a).

§ 9032.6 Matching paym ent period.

“Matching payment period” means 

the period beginning January 1 of the 

calendar year in which a Presidential 

general election is held and may not 

exceed one of the following dates:

(a) For a candidate seeking the 

nomination of a party which nominates 

its Presidential candidate at a national 

convention, the date on which the pârty 

nominates its candidate.

(b) For a candidate seeking the 

nomination of a party which does not 

make its nomination at a national 

convention, the earlier of—

(1) The date the party nominates its 

Presidential candidate, or

(2) The last day of the last national 

convention held by a major party in the 

calendar year.

§ 9032.7 Prim ary election.

(a) “Primary election” means an 

election held by a State or a political 

party, including a runoff election, or a 

nominating convention or a caucus

(1) For the selection of delegates to a 

national nominating convention of a 

political party;

(2) For the expression of a preference

for the nomination of Presidential 

candidates; . ,

(3) For the purposes stated in both 

paragraphs (1) and (2) of this section; or

(4) To nominate a Presidential 

candidate.

(b) If separate primary elections are 

held in a State by the State and a 

political party, the primary election tor
Federal Register / Vol. 52, No. 106 / W ednesday, June 3, 1987 / Rules and Regulations 20893

the purposes of this subchapter will be 

the election held by the political party.

§ 9032.8 Political com m ittee.

“Political committee” means any 

committee, club, association, 

organization or other group of persons 

(whether or not incorporated) which 

accepts contributions or incurs qualified 

campaign expenses for the purpose of 

influencing, or attempting to influence, 

the nomination of any individual for 

election to the office of President of the 

United States.

§ 9032.9 Q ualified cam paign expense.

(a) “Qualified campaign expense” 

means a purchase, payment, 

distribution, loan, advance, deposit, or 

gift of money or anything of value—

(1) Incurred by or on behalf of a 

candidate or his or her authorized 

committees from the date the individual 

becomes a candidate through the last 

day of the candidate’s eligibility as 

determined under 11 CFR 9033.5;

(2) Made in connection with his or her 

campaign for nomination; and

(3) Neither the incurrence nor 

payment of which constitutes a violation 

of any law of the United States or of any 

law of any State in which the expense is 

incurred or paid, or of any regulation 

prescribed under such law of the United 

States or of any State, except that any 

Statedaw which has been preempted by 

the Federal Election Campaign Act of 

1971, as amended, will not be 

considered a State law for purposes of 

this subchapter.

(b) An expenditure is made on behalf 

of a candidate, including a Vice 

Presidential candidate, if it is made by—

(1) An authorized committee or any 

other agent of the candidate for 

purposes of making an expenditure;

(2) Any person authorized or 

requested by the candidate, an 

authorized committee of the candidate, 

or an agent of the candidate to make the 

expenditure; or

(3) A committee which has been 

requested by the candidate, by an 

authorized committee of the candidate, 

or by an agent of the candidate to make 

the expenditure, even though such 

committee is not authorized in writing.

(c) Expenditures incurred either 

before the date an individual becomes a 

candidate or after the last day of a 

candidate’s eligibility will be considered 

qualified campaign expenses if they 

meet the provisions of 11 CFR 9034.4(a). 

Expenditures described under 11 CFR 

9034.4(b) will not be considered 

qualified campaign expenses.

§ 9032.10 Secretary.

For purposes of this subchapter, 

"Secretary” means the Secretary of the 

Treasury.

§9032.11 State.

“State” means each State of the 

United States, Puerto Rico, the Canal 

Zone, the Virgin Islands, the District of 

Columbia, and Guam.

PART 9033—ELIGIBILITY FOR

PAYMENTS

Sec.

9033.1 Candidate and committee 

agreements.

9033.2 Candidate and committee 

certifications; threshold submission.

9033.3 Expenditure limitation certification.

9033.4 Matching payment eligibility 

threshold requirements.

9033.5 Determination of ineligibility date.

9033.6 Determination of inactive candidacy.

9033.7 Determination of active candidacy.

9033.8 Reestablishment of eligibility.

9033.9 Failure to comply with disclosure 

requirements or expenditure limitations.

9033.10 Procedures for initial and final 

determinations.

9033.11 Documentation of disbursements. 

Authority: 26 U.S.C. 9033 and 9039(b).

§ 9033.1 C andidate and com m ittee

agreem ents.

(a) General. (1) A candidate seeking 

to become eligible to receive 

Presidential primary matching fund 

payments shall agree in a letter signed 

by the candidate to the Commission that 

the candidate and the candidate’s 

authorized committee(s) will comply 

with the conditions set forth in 11 CFR 

9033.1(b). The candidate may submit the 

letter containing the agreements 

required by this section at any time after 

January 1 of the year immediately 

preceding the Presidential election year.

(2) The Commission will not consider 

a candidate’s threshold submission until 

the candidate has submitted a candidate 

agreement that meets the requirements 

of this section.

(b) Conditions. The candidate shall 

agree that:

(1) The candidate has the burden of 

proving that disbursements by the 

candidate or any authorized 

committee(s) or agents thereof are 

qualified campaign expenses as definèd 

at 11 CFR 9032.9.

(2) The candidate and the candidate’s 

authorized committee(s) will comply 

with the documentation requirements 

set forth in 11 CFR 9033.11.

(3) The candidate and the candidate’s 

authorized committee(s) will provide an 

explanation, in addition to complying 

with the documentation requirements, of 

the connection between any 

disbursements made by the candidate or

authorized çommittee(s) of the 

candidate and the campaign if requested 

by the Commission.

(4) The candidate and the candidate’s 

authorized committee(s) will keep and 

furnish to the Commission all 

documentation for matching fund 

submissions, any books, records 

(including bank records for all accounts) 

and supporting documentation and other 

information that the Commission may 

request.

(5) The candidate and the candidate’s 

authorized committee(s) will keep and 

furnish to the Commission all 

documentation relating to 

disbursements and receipts including 

any books, records (including bank 

records for all accounts), all 

documentation required by this section 

including those required to be 

maintained under 11 CFR 9033.11, and 

other information that the Commission 

may request. The records provided at 

the time of the Commission’s audit shall 

also include production of magnetic 

computer tapes containing all 

information required by law to be 

maintained regarding the committee’s 

receipts and disbursements, if the 

committee maintains its records on 

computer. Upon request, documentation 

explaining the computer systems 

software capabilities shall also be 

provided.

(6) The candidate and the candidate’s 

authorized committee(s) will permit an 

audit and examination pursuant to 11 

CFR Part 9038 of all receipts and 

disbursements including those made by 

the candidate, all authorized 

committee(s) and any agent or person 

authorized to make expenditures on 

behalf of the candidate or committee(s). 

The candidate and authorized 

committee(s) shall facilitate the audit by 

making available in one central location, 

office space, records and such personnel 

as are necessary to conduct the audit 

and examination, and shall pay any 

amounts required to be repaid under 11 

CFR Parts 9038 and 9039.

(7) The candidate and the candidate’s 

authorized committee(s) will submit the 

name and mailing address of the person 

who is entitled to receive matching fund 

payments on behalf of the candidate 

and the name and address of the 

national or State bank designated by the 

candidate as a campaign depository as 

required by 11 CFR Part 103 and 11 CFR 

9037.3. Changes in the information 

required by this paragraph shall not be 

effective until submitted to the 

Commission in a letter signed by the 

candidate or the Committee treasurer.

(8) The candidate and the candidate's 

authorized committee(s) will prepare
20894 Federal Register / Vol. 52, No. 106 / W ednesday, June 3, 1987 / Rules and Regulations

matching fund submissions in 

accordance with the Federal Election 

Commission’s Guideline for Presentation 

in Good Order.

(9) The candidate and the candidate’s 

authorized committeefs) will comply 

with the applicable requirements of 2 

U.S.C. 431 et seq.\ 26 U.S.C. 9031 et seq.

and the Commission’s regulations at 11 

CFR Parts 100-115, and 9031-9039.

(10) The candidate and the 

candidate’s authorized committee(s) will 

pay any civil penalties included in a 

conciliation agreement imposed under 2 

U.S.C. 437g against the candidate, any 

authorized committee of the candidate 

or any agent thereof.

§ 9033.2 C andidate and com m ittee

certifications; threshold subm ission.

(a) General. (1) A candidate seeking 

to become eligible to receive 

Presidential primary matching fund 

payments shall make the certifications 

set forth in 11 CFR 9033.2(b) to the 

Commission in a written statement 

signed by the candidate. The candidate 

may submit the letter containing the 

required certifications at any time after 

January 1 of the year immediately 

preceding the Presidential election year.

(2) The Commission will not consider 

a candidate’s threshold submission until 

the candidate has submitted candidate 

certifications that meet the requirements 

of this section.

(b) Certifications. (1) The candidate 

shall certify that he or she is seeking 

nomination by a political party to the 

Office of President in more than one 

State. For purposes of this section, in 

order for a candidate to be deemed to be 

seeking nomination by a political party 

to the office of President, the party 

whose nomination the candidate seeks 

must have a procedure for holding a 

primary election, as defined in 11 CFR

9032.7, for nomination to that office. For 

purposes of this section, the term 

“political party” means an association, 

committee or organization which 

nominates an individual for election to 

the office of President. The fact that an 

association, committee or organization 

qualifies as a political party under this 

section does not affect the party’s status 

as a national political party for purposes 

of 2 U.S.C. 441a(a)(l)(B) and 

441a(a)(2)(B).

(2) The candidate and the candidate’s 

authorized committee(s) shall certify 

that they have not incurred and will not 

incur expenditures in connection with 

the candidate’s campaign for 

nomination, which expenditures are in 

excess of the limitations under 11 CFR 

Part 9035.

(3) The candidate and the candidate’s 

authorized committee(s) shall certify:

(i) That they have received matchable 

contributions totalling more than $5,000 

in each of at least 20 States; and

(ii) That the matchable contributions 

are from individuals who are residents 

of the State for which their contributions 

are submitted.

(iii) A maximum of $250 of each 

individual’s aggregate contributions will 

be considered as matchable 

contributions for the purpose of meeting 

the thresholds of this section.

(iv) For purposes of this section, 

contributions of an individual who 

maintains residences in more than one 

State may only be counted toward the 

$5,000 threshold for the State from 

which the earliest contribution was 

made by that contributor.

(c) Threshold submission. To become 

eligible to receive matching payments, 

the candidate shall submit 

documentation of the contributions 

described in 11 CFR 9033.2(b)(3) to the 

Commission for review. The submission 

shall follow the format and requirements 

of 11 CFR 9036.1.

§ 9033.3 E xpenditure lim itation

certification.

(a) If the Commission makes an initial 

determination that a candidate or the 

candidate’s authorized committee(s) 

have knowingly and substantially 

exceeded the expenditure limitations at 

11 CFR Part 9035 prior to that 

candidate’8 application for certification, 

the Commission may make an initial 

determination that the candidate is 

ineligible to receive matching funds.

(b) The Commission will notify the 

candidate of its initial determination, in 

accordance with the procedures outlined 

in 11 CFR 9033.10(b). The candidate may 

submit, within 20 calendar days after 

service of the Commission’s notice, 

written legal or factual materials, in 

accordance with 11 CFR 9033.10(b), 

demonstrating that he or she has not 

knowingly and substantially exceeded 

the expenditure limitations at 11 CFR 

Part 9035.

(c) A final determination of the 

candidate’s ineligibility will be made by 

the Commission in accordance with the 

procedures outlined in 11 CFR 

9033.10(c).

(d) A candidate who receives a final 

determination of ineligibility under 11 

CFR 9033.3(c) shall be ineligible to 

receive matching fund payments under 

11 CFR 9034.1.

§ 9033.4 M atching paym ent eligibility

threshold requirem ents.

(a) The Commission will examine the 

submission made under 11 CFR 9033.1 

and 9033.2 and either—

(1) Make a determination that the 

candidate has satisfied the minimum 

contribution threshold requirements 

under 11 CFR 9033.2(c); or

(2) Make an initial determination that 

the candidate has failed to satisfy the 

matching payment threshold 

requirements. The Commission will 

notify the candidate of its initial 

determination in accordance with the 

procedures outlined in 11 CFR 

9033.10(b). The candidate may, within 30 

calendar days after service of the 

Commission’s notice, satisfy the 

threshold requirements or submit in 

accordance with 11 CFR 9033.10(b) 

written legal or factual materials to 

demonstrate that he or she has satisfied 

those requirements. A final 

determination by the Commission that 

the candidate has failed to satisfy 

threshold requirements will be made in 

accordance with the procedures outlined 

in 11 CFR 9033.10(c).

(b) In evaluating the candidate’s 

submission under 11 CFR 9033.1 and

9033.2, the Commission may consider 

other information in its possession, 

including but not limited to past actions 

of the candidate in an earlier publiclyfinanced campaign, that is relevant to a 

determination regarding the candidate’s 

eligibility for matching funds.

(c) The Commission will make its 

examination and determination under 

this section as soon as practicable. 

During the Presidential election year, the 

Commission will generally complete its 

review and make its determination 

within 15 business days.

§ 9033.5 D eterm ination o f ineligibility date.

The candidate’s date of ineligibility 

shall be whichever date by operation of 

11 CFR 9033.5 (a), (b) or (c) occurs first. 

After the candidate’s date of 

ineligibility, he or she may only receive 

matching payments to the extent that he 

or she has met outstanding campaign 

obligations as defined in 11 CFR 9034.5.

(a) Inactive candidate. The 

ineligibility date shall be the day on 

which an individual ceases to be a 

candidate because he or she is not 

actively conducting campaigns in more 

than one State in connection with 

seeking the Presidential nomination. 

This date shall be the earliest of

(1) The date the candidate publicly 

announces that he or she will not be 

actively conducting campaigns in more 

than one State; or

(2) The date the candidate notifies the 

Commission by letter that he or she is 

not actively conducting campaigns in 

more than one State; or

(3) The date which the Commission 

determines under 11 CFR 9033.6 to be
Federal Register / Vol. 52, No. 106 / W ednesday, June 3, 1987 / Rules and Regulations 20895

the date that the candidate is not 

actively seeking election in more than 

one State.

(bj Insufficient votes. The ineligibility 

date shall be the 30th day following the 

date of the second consecutive primary 

election in which such individual 

receives less than 10 percent of the 

number of popular votes cast for all 

candidates of the same party for die 

same office in that primary election, if 

the candidate permitted or authorized 

his or her name to appear on the ballot, 

unless the candidate certifies to the 

Commission at least 25 business days 

prior to the primary that he or she will 

not be an active candidate in the 

primary involved.

(1) The Commission may refuse to 

accept the candidate’s certification if it 

determines under 11 CFR 9033.7 that the 

candidate is an active candidate in the 

primary involved.

(2) For purposes of this paragraph, if 

the candidate is running in two primary 

elections in different States on the same 

date, the highest percentage of votes the 

candidate receives in any one State will 

govern. Separate primary elections held 

in more than one State on the same date 

are not deemed to be consecutive 

primaries. If two primary elections are 

held on the same date in the same State 

(e.g., a primary to select delegates to a 

national nominating convention and a 

primary for the expression of preference 

for the nomination of candidates for 

election to the office of President), the 

highest percentage of votes a candidate 

receives in either election will govern. If 

two or more primaries are held in the 

same State on different dates, the 

earliest primary will govern.

(c) End of matching payment period.

The ineligibility date shall be the last 

day of the matching payment period for 

the candidate as specified in 11 CFR

9032.6.

(d) Reestablishment o f eligibility. If 

the Commission has determined that a 

candidate is ineligible under 11 CFR 

9033.5 (a) or (b), the candidate may 

reestablish eligibility to receive 

matching funds under 11 CFR 9033.8.

§ 9033.6 D eterm ination o f inactive

candidacy.

la) General. The Commission may, on 

the basis of the factors listed in 11 CFR 

9033.6(b) below, make a determination 

that a candidate is no longer actively 

seeking nomination for election in more 

than one State. Upon a final 

determination by the Commission that a 

candidate is inactive, that candidate 

will become ineligible as provided in 11 

CFP 9033.5.

(b) Factors considered. In making its 

determination of inactive candidacy, the

Commission may consider, but is not 

limited to considering, the following 

factors:

(1) The frequency and type of public 

appearances, speeches, and 

advertisements;

(2) Campaign activity with respect to 

soliciting contributions or making 

expenditures for campaign purposes;

(3) Continued employment of 

campaign personnel or the use of 

volunteers;

(4) The release of committed 

delegates;

(5) The candidate urges his or her 

delegates to support another candidate 

while not actually releasing committed 

delegates;

(6) The candidate urges supporters to 

support another candidate.

(c) Initial determination. The 

Commission will notify the candidate of 

its initial determination in accordance 

with the procedures outlined in 11 CFR 

9033.10(b) and will advise the candidate 

of the date on which active campaigning 

in more than one State ceased. The 

candidate may, within 15 business days 

after service of the Commission’s notice, 

submit in accordance with 11 CFR 

9033.10(b) written legal or factual 

materials to demonstrate that he or she 

is actively campaigning in more than 

one State.

(d) Final determination. A final 

determination of inactive candidacy will 

be made by the Commission in 

accordance with the procedures outlined 

in 11 CFR 9033.10(c).

§ 9033.7 D eterm ination o f active

candidacy.

(a) Where a candidate certifies to the 

Commission under 11 CFR 9033.5(b) that 

he or she will not be an active candidate 

in an upcoming primary, the 

Commission may, nevertheless, on the 

basis of factors listed in 11 CFR 

9033.6(b), make an initial determination 

that the candidate is an active candidate 

in the primary involved.

(b) The Commission will notify the 

candidate of its initial determination 

within 10 business days of receiving the 

candidate’s certification under 11 CFR 

9033.5(b) or, if the timing of the activity 

does not permit notice during the 10 day 

period, as soon as practicable following 

campaign activity by the candidate in 

the primary state. The Commission’s 

initial determination will be made in 

accordance with the procedures outlined 

in 11 CFR 9033.10(b). Within 10 business 

days after service of the Commission's 

notice the candidate may submit, in 

accordance with 11 CFR 9033.10(b), 

written legal or factual materials to 

demonstrate that he or she is not an

active candidate in the primary 

involved.

(c) A final determination by the 

Commission that the candidate is active 

will be made in accordance with the 

procedures outlined in 11 CFR 

9033.10(c).

§ 9033.8 Reestablishm ent o f eligibility.

(a) Candidates found to be inactive. A 

candidate who has become ineligible 

under 11 CFR 9033.5(a) on the basis that 

he or she is not actively campaigning in 

more than one State may reestablish 

eligibility for matching payments by 

submitting to the Commission evidence 

of active campaigning in more than one 

State. In determining whether the 

candidate has reestablished eligibility, 

the Commission will consider, but is not 

limited to considering, the factors listed 

in 11 CFR 9033.6(b). The day the 

Commission determines to be the day 

the candidate becomes active again will 

be the date on which eligibility is 

reestablished.

(b) Candidates receiving insufficient

votes. A candidate determined to be 

ineligible under 11 CFR 9033.5(b) by 

failing to obtain the required percentage 

of votes in two consecutive primaries 

may have his or her eligibility 

reestablished if the candidate receives 

at least 20 percent of the total number of 

votes cast for candidates of the same 

party for the same office in a primary 

election held subsequent to the date of 

the election which rendered the 

candidate ineligible.

(c) The Commission will make its 

determination under 11 CFR 9033.8 (a) or 

(b) without requiring the individual to 

reestablish eligibility under 11 CFR

9033.1 and 2. A candidate whose 

eligibility is reestablished under this 

section may submit, for matching 

payment, contributions received during 

ineligibility. Any expenses incurred 

during the period of ineligibility that 

would have been considered qualified 

campaign expenses if the candidate had 

been eligible during that time may be 

defrayed with matching payments.

§ 9033.9 Failure to com ply with disclosure

requirem ents or expenditure lim itations.

(a) If the Commission receives 

information indicating that a candidate 

or his or her authorized committee(s) 

has knowingly and substantially failed 

to comply with the disclosure 

requirements of 2 U.S.C. 434 and 11 CFR 

Part 104, or that a candidate has 

knowingly and substantially exceeded 

the expenditure limitations at 11 CFR 

Part 9035, the Commission may make an 

initial determination to suspend 

payments to that candidate.
20896 Federal Register / Vol. 52, No. 106 / W ednesday, June 3, 1987 / Rules and Regulations

(b) The Commission will notify the 

candidate of its initial determination in 

accordance with the procedures outlined 

in 11 CFR 9033.10(b). The candidate will 

be given an opportunity, within 20 

calendar days after service of the 

Commission’s notice, to comply with the 

above cited provisions or to submit in 

accordance with 11 CFR 9033.10(b) 

written legal or factual materials to 

demonstrate that he or she is not in 

violation of those provisions.

(c) Suspension of payments to a 

candidate will occur upon a final 

determination by the Commission to 

suspend payments. Such final 

determination will be made in 

accordance with the procedures outlined 

in 11 CFR 9033.10(c).

(d) (1) A candidate whose payments 

have been suspended for failure to 

comply with reporting requirements may 

become entitled to receive payments if 

he or she subsequently files the required 

reports and pays or agrees to pay any 

civil or criminal penalties resulting from 

failure to comply.

(2) A candidate whose payments are 

suspended for exceeding the 

expenditure limitations shall not be 

entitled to receive further matching 

payments under 11 CFR 9034.1.

§ 9033.10 Procedures fo r initial and final

determ inations.

(а) General. The Commission will 

follow the procedures set forth in this 

section when making an initial or final 

determination based on any of the 

following reasons.

(1) The candidate has knowingly and 

substantially exceeded the expenditure 

limitations of 11 CFR Part 9035 prior to 

the candidate’s application for 

certification, as provided in 11 CFR 

9033.3;

(2) The candidate has failed to satisfy 

the matching payment threshold 

requirements, as provided in 11 CFR 

9033.4;

(3) The candidate is no longer actively 

seeking nomination in more than one 

state, as provided in 11 CFR 9033.6;

(4) The candidate is an active 

candidate in an upcoming primary 

despite the candidate’s assertion to the 

contrary, as provided in 11 CFR 9033.7;

(5) The Commission receives 

information indicating that the 

candidate has knowingly and 

substantially failed to comply with the 

disclosure requirements or exceeded the 

expenditure limits, as provided in 11 

CFR 9033.9; or

(б) The Commission receives 

information indicating that substantial 

assets of the candidate’s authorized 

committee have been undervalued or 

not included in the candidate’s

statement of net outstanding campaign 

obligations or that the amount of 

outstanding campaign obligations has 

been otherwise overstated in relation to 

campaign assets, as provided in 11 CFR 

9034.5(g).

(b) Initial determination. If the 

Commission makes an initial 

determination that a candidate may not 

receive matching funds for one or more 

of the reasons indicated in 11 CFR 

9033.10(a), the Commission will notify 

the candidate of its initial 

determination. The notification will give 

the legal and factual reasons for the 

determination and advise the candidate 

of the evidence on which the 

Commission’s initial determination is 

based. The candidate will be given an 

opportunity to comply with the 

requirements at issue or to submit, 

within the time provided by the relevant 

section as referred to in 11 CFR 

9033.10(a), written legal or factual 

materials to demonstrate that the 

candidate has satisfied those 

requirements. Such materials may be 

submitted by counsel if the candidate so 

desires.

(c) Final determination. The 

Commission will consider any written 

legal or factual materials timely 

submitted by the candidate before 

making its final determination. A final 

determination that the candidate has 

failed to satisfy the requirements at 

issue will be accompanied by a written 

statement of reasons for the 

Commission’s action. This statement 

will explain the legal and factual 

reasons underlying the Commission’s 

determination and will summarize the 

results of any investigation upon which 

the determination is based.

(d) Effect on other determinations. If 

the Commission makes an initial 

determination under this section, but 

decides to take no further action at that 

time, the Commission may use the legal 

and factual bases on which the initial 

determination was based in any future 

repayment determination under 11 CFR 

Part 9038 or 9039. A determination by 

the Commission under this section may 

be independent of any Commission 

decision to institute an enforcement 

proceeding under 2 U.S.C. 437g.

(e) Petitions for rehearing. Following a 

final determination under this section, 

the candidate may file a petition for 

rehearing in accordance with 11 CFR 

9038.5(a).

§ 9033.11 D ocum entation o f

disbursem ents.

(a) Burden o f proof. Each candidate 

shall have the burden of proving that 

disbursements made by the candidate or 

his or her authorized committee(s) or

persons authorized to make 

expenditures on behalf of the candidate 

or committee(s) are qualified campaign 

expenses as defined in 11 CFR 9032.9. 

The candidate and his or her authorized 

committee(s) shall obtain and furnish to 

the Commission on request any 

evidence regarding qualified campaign 

expenses made by the candidate, his or 

her authorized committees and agents or 

persons authorized to make 

expenditures on behalf of the candidate 

or committee(s) as provided in 11 CFR 

9033.11(b).

(b) Documentation required. (1) For 

disbursements in excess of $200 to a 

payee, the candidate shall present 

either:

(1) A receipted bill from the payee that 

states the purpose of the disbursement, 

or

(ii) If such a receipt is not available, a 

cancelled check negotiated by the 

payee, and

(A) One of the following documents 

generated by the payee: A bill, invoice, 

or voucher that states the purpose of the 

disbursement; or

(B) Where the documents specified in 

11 CFR 9033.11(b)(l)(ii)(A) are not 

available, a voucher or 

contemporaneous memorandum from 

the candidate or the committee that 

states the purpose of the disbursement; 

or

(iii) If neither a receipted bill as 

specified in 11 CFR 9033.11(b)(l)(i) nor 

the supporting documentation specified 

in 11 CFR 9033.11(b)(l)(ii) is available, a 

cancelled check negotiated by the payee 

that states the purpose of the 

disbursement.

(iv) Where the supporting 

documentation required in 11 CFR 

9033.11(b)(1) (i), (ii) or (iii) is not 

available, the candidate or committee 

may present a cancelled check and 

collateral evidence to document the 

qualified campaign expense. Such 

collateral evidence may include but is 

not limited to:

(A) Evidence demonstrating that the 

expenditure is part of an identifiable 

program or project which is otherwise 

sufficiently documented such as a 

disbursement which is one of a number 

of documented disbursements relating to 

a campaign mailing or to the operation 

of a campaign office;

(B) Evidence that the disbursement is 

covered by a preestablished written 

campaign committee policy, such as a 

per diem policy.

(2) For all other disbursements the 

candidate shall present:

(i) A record disclosing the 

identification of the payee, the amount,
Federal Register / Vol. 52, No. 106 / W ednesday, June 3, 1987 / Rules and Regulations 20897

date and purpose of the disbursement, if 

made from a petty cash fund; or

(ii) A cancelled check negotiated by 

the payee that states the identification 

of the payee, and the amount, date and 

purpose of the disbursement.

(3) For purposes of this section,

(1) “Payee” means the person who 

provides the goods or services to the 

candidate or committee in return for the 

disbursement; except that an individual 

will be considered a payee under this 

section if he or she receives $500 or less 

advanced for travel and/or subsistence 

and if he or she is the recipient of the 

goods or services purchased.

(ii) “Purpose” means the identification 

of the payee, the date and amount of the 

disbursement, and a description of the 

goods or services purchased.

(c) Retention o f records. The 

candidate shall retain records, with 

respect to each disbursement and 

receipt, including bank records, 

vouchers, worksheets, receipts, bills and 

accounts, journals, ledgers, fundraising 

solicitation material, accounting systems 

documentation, matching fund 

submissions, and any related materials 

documenting campaign receipts and 

disbursements, for a period of three 

years pursuant to 11 CFR 102.9(c), and 

shall present these records to the 

Commission on request.

(d) List o f capital and other assets— 

(1) Capital assets. The candidate or 

committee shall maintain a list of all 

capital assets whose purchase price 

exceeded $2,000 when acquired by the 

campaign. The list shall include a brief 

description of each capital asset, the 

purchase price, the date it was acquired, 

the method of disposition and the 

amount received in disposition. For 

purposes of this section, “capital asset" 

shall be defined in accordance with 11 

CFR 9034.5(c)(1).

(2) Other assets. The candidate or 

committee shall maintain a list of other 

assets acquired for use in fundraising or 

as collateral for campaign loans, if the 

a§gregate value of such assets exceeds 

$5,000. The list shall include a brief 

description of each such asset, the fair 

market value of each asset, the method 

of disposition and the amount received 

in disposition. The fair market value of 

other assets shall be determined in 

accordance with 11 CFR 9034.5(c)(2).

PART 9034—ENTITLEMENTS

Sec.

9034.1 Candidate entitlements.

9034.2 Matchable contributions.

9034.3 Non-matchable contributions.

9034.4 Use of contributions and matching 

payments.

Sec.

9034.5 Net outstanding campaign 

obligations.

9034.6 Reimbursements for transportation 

and services made available to media 

personnel.

9034.7 Allocation of travel expenditures.

9034.8 Joint fundraising.

9034.9 Sale of assets acquired for 

fundraising purposes.

Authority: 26 U.S.C. 9034 and 9039(b).

§ 9034.1 C andidate Entitlem ents.

(a) A candidate who has been notified 

by the Commission under 11 CFR 9036.1 

that he or she has successfully satisfied 

eligibility and certification requirements 

is entitled to receive payments in an 

amount equal to the amount of each 

matchable campaign contribution 

received by the candidate, except that a 

candidate who has become ineligible 

under 11 CFR 9033.5 may not receive 

further matching payments regardless of 

the date of deposit of the underlying 

contributions if he or she has no net 

outstanding campaign obligations as 

defined in 11 CFR 9034.5.

(b) If on the date of ineligibility a 

candidate has net outstanding campaign 

obligations as defined under 11 CFR 

9034.5, that candidate may continue to 

receive matching payments for 

matchable contributions received and 

deposited on or before December 31 of 

the Presidential election year provided 

that on the date of payment there are 

remaining net outstanding campaign 

obligations, i.e., the sum of the 

contributions received on or after the 

date of ineligibility plus matching funds 

received on or after the date of 

ineligibility is less than the candidate’s 

net outstanding campaign obligations. 

This entitlement will be equal to the 

lesser of:

(1) The amount of contributions 

submitted for matching; or

(2) The remaining net outstanding 

campaign obligations.

(c) A candidate whose eligibility has 

been reestablished under 11 CFR 9033.8 

or who after suspension of payments 

has met the conditions set forth at 11 

CFR 9033.9(d) is entitled to receive 

payments for matchable contributions 

for which payments were not received 

during the ineligibility or suspension 

period.

(d) The total amount of payments to a 

candidate under this section shall not 

exceed 50% of the total expenditure 

limitation applicable under 11 CFR Part 

9035.

§ 9034.2 M atchable contributions.

(a) Contributions meeting the 

following requirements will be 

considered matchable campaign 

contributions.

(1) The contribution shall be a gift of 

money made: By an individual; by a 

written instrument and for the purpose 

of influencing the result of a primary 

election.

(2) Only a maximum of $250 of the 

aggregate amount contributed by an 

individual may be matched.

(3) Before a contribution may be 

submitted for matching, it must actually 

be received by the candidate or any of 

the candidate’s authorized committees 

and deposited in a designated campaign 

depository maintained by the 

candidate’s authorized committee.

(4) The written instrument used in 

making the contribution must be dated, 

physically received and deposited by 

the candidate or authorized committee 

on or after January 1 of the year 

immediately preceding the calendar 

year of the Presidential election, but no 

later than December 31 following the 

matching payment period as defined 

under 11 CFR 9032.6. Donations received 

by an individual who is testing the 

waters pursuant to 11 CFR 100.7(b)(1) 

and 100.8(b)(1) may be matched when 

the individual becomes a candidate if 

such donations meet the requirements of 

this section.

(b) For purposes of this section, the 

term “written instrument" means a 

check written on a personal, escrow or 

trust account representing or containing 

the contributor’s personal funds; a 

money order; or any similar negotiable 

instrument.

(c) The written instrument shall be: 

Payable on demand; and to the order of, 

or specifically endorsed without 

qualification to, the Presidential 

candidate, or his or her authorized 

committee. The written instrument shall 

contain: The full name and signature of 

the contributor(s); the amount and date 

of the contribution; and the mailing 

address of the contributor(s).

(1) In cases of a check drawn on a 

joint checking account, the contributor is 

considered to be the owner whose 

signature appears on the check.

(i) To be attributed equally to other 

joint tenants of the account, the check or 

other accompanying written document 

shall contain the signature(s) of the joint 

tenant(s). If a contribution on a joint 

account is to be attributed other than 

equally to the joint tenants, the check or 

other written documentation shall also 

indicate the amount to be attributed to 

each joint tenant.

(ii) In the case of a check for a 

contribution attributed to more than one 

person, where it is not apparent from the 

face of the check that each contributor is 

a joint tenant of the account, a written 

statement shall accompany the check
208S8 Federal Register / Vol. 52, No. 106 / W ednesday, June 3, 1987 / Rules and Regulations

stating that the contribution was made 

from each individual’s personal funds in 

the amount so attributed and shall be 

signed by each contributor.

(2) Contributions in the form of checks 

drawn on an escrow or trust account are 

matchable contributions, provided that:

(i) The contributor has equitable 

ownership of the account; and

(ii) The check is accompanied by a 

statement, signed by each contributor to 

whom all or a portion of the contribution 

is being attributed, together with the 

check number, amount and date of 

contribution. This statement shall 

specify that the contributor has 

equitable ownership of the account and 

the account represents the personal 

funds of the contributor.

(3) Contributions in the form of checks 

written on partnership accounts or 

accounts of unincorporated associations 

or businesses are matchable 

contributions, so long as:

(i) The cheek is accompanied by a 

statement, signed by each contributor to 

whom all or a portion of the contribution 

is being attributed, together with the 

check number, amount and date of 

contribution. This statement shall 

specify that the contribution is made 

with the contributor’s personal funds 

and that the account on which the 

contribution is drawn is not maintained 

or controlled by an incorporated entity; 

and

(ii) The aggregate amount of the 

contributions drawn on a partnership or 

unincorporated association or business 

does not exceed $1,000 to any one 

Presidential candidate seeking 

nomination.

(4) Contributions in the form of money 

orders, cashier’s checks, or other similar 

negotiable instruments are matchable 

contributions, provided that:

(i) At the time it is initially submitted 

for matching, such instrument is signed 

by each contributor and is accompanied 

by a statement which specifies that the 

contribution was made in thè form of a 

money order, cashier’s check, traveller’s 

check, or other similar negotiable 

instrument, with the contributor’s 

personal funds;

(ii) Such statement identifies the date 

and amount of the contribution made by 

money order, cashier’s check, traveller’s 

check, or other similar negotiable 

instrument, the check or serial number, 

and the name of the issuer of the 

negotiable instrument; and

(iii) Such statement is signed by each 

contributor.

(5) Contributions in the form of the 

purchase price paid for the admission to 

any activity that primarily confers 

private benefits in the form of 

entertainment to the contributor (i.e.,

concerts, motion pictures) are 

matchable. The promotional material 

and tickets for the event shall clearly 

indicate that the ticket purchase price 

represents a contribution to the 

Presidential candidate.

(6) Contributions in the form of a 

purchase price paid for admission to an 

activity that is essentially political are 

matchable. An “essentially political’’ 

activity is one the principal purpose of 

which is political speech or discussion, 

such as the traditional political dinner or 

reception.

(7) Contributions received from a joint 

fundraising activity conducted in 

accordance with 11 CFR 9034.8 are 

matchable, provided that such 

contributions are accompanied by a 

copy of the joint fundraising agreement 

when they are submitted for matching.

§ 9034.3 N on-m atchable contributions.

A contribution to a candidate other 

than one which meets the requirements 

of 11 CFR 9034.2 is not matchable. 

Contributions which are not matchable 

include, for example:

(a) In-kind contributions of real or 

personal property;

(b) A subscription, loan, advance, or 

deposit of money, or anything of value;

(c) A contract, promise, or agreement, 

whether or not legally enforceable, such 

as a pledge card or credit card 

transaction, to make a contribution for 

any such purposes (but a gift of money 

by written instrument is not rendered 

unmatchable solely because the 

contribution was preceded by a promise 

or pledge);

(d) Funds from a corporation, labor 

organization, government contractor, 

political committee as defined in 11 CFR 

100.5 or any group of persons other than 

those under 11 CFR 9034.2(c)(3);

(e) Contributions which are made or 

accepted in violation of 2 U.S.C. 441a, 

441b, 441c, 441e, 441f, or 441g;

(f) Contributions in the form of a 

check drawn on the account of a 

committee, corporation, union or 

government contractor even though the 

funds represent personal funds 

earmarked by a contributing individual 

to a Presidential candidate;

(g) Contributions in the form of the 

purchase price paid for an item with 

significant intrinsic and enduring value, 

such as a watch;

(h) Contributions in the form of the 

purchase price paid for or otherwise 

induced by a chance to participate in a 

raffle, lottery, or a similar drawing for 

valuable prizes;

(i) Contributions which are made by 

persons without the necessary donative 

intent to make a gift or made for any

purpose other than to influence the 

result of a primary election; and

(j) Contributions of currency of the 

United States or currency of any foreign 

country.

§ 9034.4 Use o f contributions and

m atching paym ents.

(a) Qualified campaign expenses—(1) 

General. Except as provided in 11 CFR 

9034.4(b)(3), all contributions received 

by an individual from the date he or she 

becomes a candidate and all matching 

payments received by the candidate 

shall be used only to defray qualified 

campaign expenses or to repay loans or 

otherwise restore funds (other than 

contributions which were received and 

expended to defray qualified campaign 

expenses), which were used to defray 

qualified campaign expenses.

(2) Testing the waters. Even though 

incurred prior to the date an individual 

becomes a candidate, payments made 

for the purpose of determining whether 

an individual should become a 

candidate, such as those incurred in 

conducting a poll, shall be considered 

qualified campaign expenses if the 

individual subsequently becomes a 

candidate and shall count against that 

candidate’s limits under 2 U.S.C.

441a(b). See 11 CFR 100.8(b)(1).

(3) Winding down costs, (i) Costs 

associated with the termination of 

political activity, such as the costs of 

complying with the post election 

requirements of the Act and other 

necessary administrative costs 

associated with winding down the 

campaign, including office space rental, 

staff salaries and office supplies, shall 

be considered qualified campaign 

expenses. A candidate may receive and 

use matching funds for these purposes 

either after he or she has notified the 

Commission in writing of his or her 

withdrawal from the campaign for 

nomination or after the date of the 

party’s nominating convention, if he or 

she has not withdrawn before the 

convention.

(ii) If the candidate has become 

ineligible due to the operation of 11 CFR 

9033.5(b), he or she may only receive 

matching funds to defray costs incurred 

before the candidate’s date of 

ineligibility, for goods and services to be 

received before the date of ineligibility 

and for which written arrangement or 

commitment was made on or before the 

candidate’s date of ineligibility, until the 

candidate is eligible to receive winding 

down costs under paragraph (a)(3)(i) of 

this section.

(4) Taxes. Federal income taxes paid 

by the committee on non-exempt 

function income, such as interest,
/ Vol» 52, No. 106 / W ednesday, June 3, 1987 / Rules and Regulations 20899

dividends and sale of property, shall be 

considered qualified campaign 

expenses. These expenses shall not, 

however, count against the state or 

overall expenditure limits of 11 CFR 

9035.1(a).

(b) Non-qualified campaign

expenses—( 1) General. The following 

are examples of disbursements that are 

not qualified campaign expenses.

(2) Excessive expenditures. An 

expenditure which is in excess of any of 

the limitations under 11 CFR Part 9035 

shall not be considered a qualified 

campaign expense. The Commission will 

calculate the amount of expenditures 

attributable to the limitations in 

accordance with 11 CFR 9035.1(a)(2).

(3) Post-ineligibility expenditures.

Any expenses incurred after a 

candidate’s date of ineligibility, as 

determined under 11 CFR 9033.5, are not 

qualified campaign expenses except to 

the extent permitted under 11 CFR 

9034.4(a)(3). Any expenses incurred 

before the candidate’s date of 

ineligibility for goods and services to be 

received after the candidate’s date of 

ineligibility are not qualified campaign 

expenses.

(4) Civil or criminal penalties. Civil or 

criminal penalties paid pursuant to thé 

Federal Election Campaign Act are not 

qualified campaign expenses and cannot 

be defrayed from contributions or 

matching payments. Any amounts 

received or expended to pay such 

penalties shall not be considered 

contributions or expenditures but all 

amounts so received shall be subject to 

the prohibitions of the Act. Amounts 

received and expended under this 

section shall be reported in accordance 

with 11 CFR Part 104.

(5) Payments to candidate. Payments 

made to the candidate by his or her 

committee, other than to reimburse 

funds advanced by the candidate for 

qualified campaign expenses, are not 

qualified campaign expenses.

(c) Repay men ts. Repayments may be 

made only from the following sources: 

Personal funds of the candidate (without 

regard to the limitations of 11 CFR 

9035.2(a)), contributions and matching 

payments in the committee’s âccount(s), 

and any additional funds raised subject 

to the limitations and prohibitions of the 

Federal Election Campaign Act of 1971, 

as amended.

(d) Transfers to other campaigns. If a 

candidate has received matching funds 

and is simultaneously seeking 

nomination or election to another 

Federal office, no transfer of funds 

between his or her principal campaign 

committees or authorized committees 

may be made. See 2 U.S.C. 441a(a)(5)(C) 

and 11 CFR 110.3(a)(2)(v).

§ 9034.5 Net outstanding campaign

obligations.

(a) Within 15 calendar days after the 

candidate’s date of ineligibility, as 

determined under 11 CFR 9033.5, the 

candidate shall submit a statement of 

net outstanding campaign obligations. 

The candidate’s net outstanding 

campaign obligations under this section 

equal the difference between 

paragraphs (a) (1) and (2) of this section:

(1) The total of all outstanding 

obligations for qualified campaign 

expenses as of the candidate’s date of 

ineligibility as determined under 11 CFR 

9033.5, plus estimated necessary 

winding down costs as defined under 11 

CFR 9034.4(a)(3), less

(2) The total of:

(i) Cash on hand as of the close of

business on the last day of eligibility

(including all contributions dated on or

before that date whether or not

submitted for matching; currency;

balances on deposit in banks, savings

and loan institutions, and other

depository institutions; traveller’s

checks; certificates of deposit; treasury

bills; and any other committee

investments valued at fair market

value);

(ii) The fair market value of capital

assets and other assets on hand; and

(iii) Amounts owed to the campaign in

the form of credits, refunds of deposits,

returns, receivables, or rebates of

qualified campaign expenses; or a

commercially reasonable amount based

on the collectibility of those credits,

returns, receivables or rebates.

(b) The amount submitted as the total 

of outstanding campaign obligations 

under paragraph (a)(1) of this section 

shall not include any accounts payable 

for nonqualified campaign expenses nor 

any amounts determined or anticipated 

to be required as a repayment under 11 

CFR Part 9038 or any amounts paid to 

secure a surety bond under 11 CFR 

9038.5(c).

(c) (1) Capital assets. For purposes of 

this section, the term “capital asset” 

means any property used in the 

operation of the campaign whose 

purchase price exceeded $2000 when 

acquired by the campaign. Property that 

must be valued as capital assets under 

this section includes, but is not limited 

to, office equipment, furniture, vehicles 

and fixtures acquired for use in the 

operation of the candidate's campaign, 

but does not include property defined as 

“other assets" under 11 CFR 9034.5(c)(2). 

A list of all capital assets shall be 

maintained by the Committee in 

accordance with 11 CFR 9033.11(d). The 

fair market value of capital assets may 

be considered to be the total original 

cost of such items when acquired less

40%, to account for depreciation, except 

that items acquired after the date of 

ineligibility must be valued at their fair 

market value on the date acquired. If the 

candidate wishes to claim a higher 

depreciation percentage for an item, he 

or she must list that capital asset on the 

statement separately and demonstrate, 

through documentation, the fair market 

value of each such asset.

(2) Other assets. The term “other 

assets” means any property acquired by 

the campaign for use in raising funds or 

as collateral for campaign loans. "Other 

assets” must be included on the 

candidate’s statement of net outstanding 

campaign obligations if the aggregate 

value of such assets exceeds $5,000. The 

value of “other assets" shall be 

determined by the fair market value of 

each item on the candidate’s date of 

ineligibility or on the date the item is 

acquired if acquired after the date of 

ineligibility. A list of other assets shall 

be maintained by the committee in 

accordance with 11 CFR 9033.11(d)(2).

(d) Collectibility of accounts

receivable. If the committee determines 

that an account receivable of $500 or 

more, including any credit, refund, 

return or rebate, is not collectible in 

whole or in part, the committee shall 

demonstrate through documentation that 

the determination was commercially 

reasonable. The documentation shall 

include records showing the original 

amount of the account receivable, copies 

of correspondence and memoranda of 

communications with the debtor 

showing attempts to collect the amount 

due, and an explanation of how the 

lesser amount or full writeoff was 

determined.

(e) Contributions received from joint 

fundraising activities conducted under 

11 CFR 9034.8 may be used to pay a 

candidate’s outstanding campaign 

obligations.

(1) Such contributions shall be 

deemed monies available to pay 

outstanding campaign obligations as of 

the date these funds are received by the 

fundraising representative committee 

and shall be included in the candidate’s 

statement of net outstanding campaign 

obligations.

(2) The amount of money deemed 

available to pay a candidate’s net 

outstanding campaign obligations will 

equal either—

(i) An amount calculated on the basis 

of the predetermined allocation formula, 

as adjusted for 2 U.S.C. 441a limitations; 

or

(ii) If a candidate receives an amount 

greater than that calculated under 11 

CFR 9034.5(e)(2)(i), the amount actually 

received.
20990 Federal Register / Vol. 52, No. 106 / W ednesday, June 3, 1987 / Rules and Regulations

(f) The candidate shall submit a 

revised statement of net outstanding 

campaign obligations with each 

submission for matching funds 

payments filed after the candidate’s 

date of ineligibility. The revised 

statement shall reflect the financial 

status of the campaign as of the close of 

business on the last business day 

preceding the date of submission for 

matching funds. The revised statement 

shall also contain a brief explanation of 

each change in the committee’s assets 

and obligations from the previous 

statement.

(g) (1) If the Commission receives 

information indicating that substantial 

assets of the candidate’s authorized 

committee(s) have been undervalued or 

not included in the statement or that the 

amount of outstanding campaign 

obligations has been otherwise 

overstated in relation to campaign 

assets, the Commission may decide to 

temporarily suspend further matching 

payments pending a final determination 

whether the candidate is entitled to 

receive all or a portion of the matching 

funds requested.

(2) In making a determination under 

11 CFR 9034.5(g)(1), the Commission will 

follow the procedures for initial and 

final determinations under 11 CFR 

9033.10 (b) and (c). The Commission will 

notify the candidate of its initial 

determination within 15 business days 

after receipt of the candidate’s 

statement of net outstanding campaign 

obligations. Within 15 business days 

after service of the Commission’s notice, 

the candidate may submit written legal 

or factual materials to demonstrate that 

he or she has net outstanding campaign 

obligations that entitle the campaign to 

further matching payments.

(3) If the candidate demonstrates that 

the amount of outstanding campaign 

obligations still exceeds campaign 

assets, he or she may continue to 

receive matching payments.

(4) Following a final determination 

under this section, the candidate may 

file a petition for rehearing in 

accordance with 11 CFR 9038.5(a).

§ 9034.6 Reimbursements for

transportation and services made available

to media personnel.

(a) If an authorized committee incurs 

expenditures for transportation, ground 

services and facilities (including air 

travel, ground transportation, housing, 

meals, telephone service, and 

typewriters) made available to media 

personnel, such expenditures will be 

considered qualified campaign expenses 

subject to the overall expenditure 

limitations of 11 CFR 9035.1(a).

(b) If reimbursement for such 

expenditures is received by a 

committee, the amount of such 

reimbursement for each individual shall 

not exceed either: The individual’s pro 

rata share of the actual cost of the 

transportation and services made 

available; or a reasonable estimate of 

the individual’s pro rata share of the 

actual cost of the transportation and 

services made available. An individual’s 

pro rata share shall be calculated by 

dividing the total number of individuals 

to whom such transportation and 

services are made available into the 

total cost of the transportation and 

services. The total amount of 

reimbursements received from an 

individual under this section shall not 

exceed the actual pro rata cost of the 

transportation and services made 

available to that person by more than 

10%.

(c) The total amount paid by an 

authorized committee for the cost of 

transportation or for ground services 

and facilities shall be reported as an 

expenditure in accordance with 11 CFR 

104.3(b)(2)(i). Any reimbursement 

received by such committee for 

transportation or ground services and 

facilities shall be reported in accordance 

with 11 CFR 104.3(a)(3)(ix).

(d) (1) The committee may deduct from 

the amount of expenditures subject to 

the overall expenditure limitation of 11 

CFR 9035.1(a) the amount of 

reimbursements received for the actual 

cost of transportation and services 

provided under paragraph (a) of this 

section. The committee may also deduct 

from the overall expenditure limitation 

an additional amount of reimbursements 

received equal to 3% of the actual cost of 

transportation and services provided 

under this section as the administrative 

cost to the committee of providing such 

services to media personnel and seeking 

reimbursement for them. If the 

committee has incurred higher 

administrative costs in providing these 

services, the committee must document 

the total cost incurred for such services 

in order to deduct a higher amount of 

reimbursements received from the 

overall expenditure limitation. Amounts 

paid by the committee for 

transportation, services and 

administrative costs for which no 

reimbursement is received will be 

considered qualified campaign expenses 

subject to the overall expenditure 

limitation in accordance with paragraph

(a) of this section.

(2) For the purposes of this section, 

“administrative costs” shall include all 

costs incurred by the committee for 

making travel arrangements for media 

personnel and for seeking

reimbursements, whether performed by 

committee staff or independent 

contractors.

§ 9034.7 Allocation of travel expenditures.

(a) Notwithstanding the provisions of 

11 CFR Part 106, expenditures for travel 

relating to the campaign of a candidate 

seeking nomination for election to the 

office of President by any individual, 

including a candidate, shall, pursuant to 

the provisions of 11 CFR 9034.7(b), be 

qualified campaign expenses and be 

reported by the candidate’s authorized 

committee(s) as expenditures.

(b) (1) For a trip which is entirely 

campaign-related, the total cost of the 

trip shall be a qualified campaign 

expense and a reportable expenditure.

(2) For a trip which includes 

campaign-related and non-campaign 

related stops, that portion of the cost of 

the trip allocable to campaign activity 

shall be a qualified campaign expense 

and a reportable expenditure. Such 

portion shall be determined by 

calculating what the trip would have 

cost from the point of origin of the trip to 

the first campaign-related stop and from 

that stop through each subsequent 

campaign-related stop, back to the point 

of origin. If any campaign activity, other 

than incidental contacts, is conducted at 

a stop, that stop shall be considered 

campaign-related.

(3) For each trip, an itinerary shall be 

prepared and such itinerary shall be 

made available for Commission 

inspection.

(4) For trips by government 

conveyance or by charter, a list of all 

passengers on such trip, along with a 

designation of which passengers are and 

which are not campaign-related, shall be 

made available for Commission 

inspection.

(5) If any individual, including a 

candidate, uses government conveyance 

or accomodations paid for by a 

government entity for campaign-related 

travel, the candidate’s authorized 

committee shall pay the appropriate 

government entity an amount equal to:

(i) The first class commercial air fare 

plus the cost of other services, in the 

case of travel to a city served by a 

regularly scheduled commercial service; 

or

(ii) The commercial charter rate plus 

the cost of other services, in the case of 

travel to a city not served by a regularly 

scheduled commercial service.

(6) Travel expenses of a candidate’s 

spouse and family when accompanying 

the candidate on campaign-related 

travel may be treated as qualified 

campaign expenses and reportable 

expenditures. If the spouse or family
Federal Register / V ol 52, No. 106 / W ednesday, June 3, 1987 / Rules and Regulations 20901

members conduct campaign-related 

activities, their travel expenses will be 

treated as qualified campaign expenses 

and reportable expenditures.

(7) If any individual, including a 

candidate, incurs expenses for 

campaign-related travel, other than by 

use of government conveyance or 

accommodations, an amount equal to 

that portion of the actual cost of the 

conveyance or accommodations which 

is allocable to all passengers, including 

the candidate, traveling for campaign 

purposes will be a qualified campaign 

expense and shall be reported by the 

committee as an expenditure.

(1) If the trip is by charter, the actual 

cost for each passenger shall be 

determined by dividing the total 

operating cost for the charter by the 

total number of passengers transported. 

The amount which is a qualified 

campaign expense and a reportable 

expenditure shall be calculated in 

accordance with the formula set forth at 

11 CFR 9034.7(b)(2) on the basis of the 

actual cost per passenger multiplied by 

the number of passengers traveling for 

campaign purposes.

(ii) If the trip is by non-charter 

commercial transportation, the actual 

cost shall be calculated in accordance 

with the formula set forth at 11 CFR 

9034.7(b)(2) on the basis of the 

commercial fare. Such actual cost shall 

be a qualified campaign expense and a 

reportable expenditure.

§ 9034.8 Joint Fundraising.

(a) General—(1) Permissible

participants. Presidential primary 

candidates who receive matching funds 

under this subchapter may engage in 

joint fundraising with other candidates, 

political committees or unregistered 

committees or organizations.

(2) Use of funds. Contributions 

received as a result of a candidate’s 

participation in a joint fundraising 

activity under this section may be—

(i) Submitted for matching purposes in 

accordance with the requirements of 11 

CFR 9034.2 and the Federal Election 

Commission’s Guideline for Presentation 

in Good Order;

(ii) Used to pay a candidate’s net 

outstanding campaign obligations as 

provided in 11 CFR 9034.5;

(iii) Used to defray qualified campaign 

expenses;

(iv) Used to defray exempt legal and 

accounting costs; or

(v) If in excess of a candidate’s net 

outstanding campaign obligations or 

expenditure limit, used in any manner 

consistent with 11 CFR 113.2, including 

repayment of funds under 11 CFR Part 

9038.

(b) Fundraising representatives—(1) 

Establishment or selection o f

fundraising representative. The 

participants in a joint fundraising effort 

under this section shall either establish 

a separate committee or select a 

participating committee, to act as 

fundraising representative for all 

participants. The fundraising 

representative shall be a reporting 

political committee and an authorized 

committee of each candidate.

(2) Separate fundraising committee as

fundraising representative. A separate 

fundraising committee established by 

the participants to act as fundraising 

representative for all participants 

shall—

(i) Be established as a reporting 

political committee under 11 CFR 100.5;

(ii) Collect contributions;

(iii) Pay fundraising costs from gross 

proceeds and funds advanced by 

participants; and

(iv) Disburse net proceeds to each 

participant.

(3) Participating committee as

fundraising representative. A 

participant selected to act as fundraising 

representative for all participants

shall—

(i) Be a political committee as defined 

in 11 CFR 100.5;

(ii) Collect contributions; however, 

other participants may also collect 

contributions and then forward them to 

the fundraising representative as 

required by 11 CFR 102.8;

(iii) Pay fundraising costs from gross 

proceeds and funds advanced by 

participants; and

(iv) Disburse net proceeds to each 

participant.

(4) Independent fundraising agent.

The participants or the fundraising 

representative may hire a commercial 

fundraising firm or other agent to assist 

in conducting the joint fundraising 

activity. In that case, however, the 

fundraising representative shall still be 

responsible for ensuring that the 

recordkeeping, reporting and 

documentation requirements set forth in 

this subchapter are met.

(c) Joint fundraising procedures. Any 

joint fundraising activity under this 

section shall be conducted in 

accordance with the following 

requirements:

(1) Written agreement. The 

participants in a joint fundraising 

activity shall enter into a written 

agreement, whether or not all 

participants are political committees 

under 11 CFR 100.5. The written 

agreement shall identify the fundraising 

representative and shall state a formula 

for the allocation of fundraising 

proceeds. The participants shall also use

the formula to allocate the expenses 

incurred for the fundraising activity. The 

fundraising representative shall retain 

the written agreement for a period of 

three years and shall make it available 

to the Commission on request.

(2) Funds advanced for fundraising

costs, (i) Except as provided in 11 CFR 

9034.8(c)(2)(ii), the amount of funds 

advanced by each participant for 

fundraising costs shall be in proportion 

to the allocation formula agreed upon 

under 11 CFR 9034.8(c)(1).

(ii) A participant may advance more 

than its proportionate share of the 

fundraising costs; however, the amount 

advanced which is in excess of the 

participant’s proportionate share shall 

not exceed the amount that participant 

could legally contribute to the remaining 

participants. See 11 CFR 102.12(c)(2) and 

Part 110.

(3) Fundraising notice. In addition to 

any notice required under 11 CFR 110.11, 

a joint fundraising notice shall be 

included with every solicitation for 

contributions.

(i) This notice shall include the 

following information:

(A) The names of all committees 

participating in the joint fundraising 

activity whether or not such committees 

are political committees under 11 CFR 

100.5;

(B) The allocation formula to be used 

for distributing joint fundraising 

proceeds;

(C) A statement informing 

contributors that, notwithstanding the 

stated allocation formula, they may 

designate their contributions for a 

particular participant or participants; 

and

(D) A statement informing 

contributors that the allocation formula 

may change if a contributor makes a 

contribution which would exceed the 

amount that contributor may give to any 

participant.

(ii) If one or more participants engage 

in the joint fundraising activity solely to 

satisfy outstanding debts, the notice 

shall also contain a statement informing 

contributors that the allocation formula 

may change if a participant receives 

sufficient funds to pay its outstanding 

debts.

(4) Separate depository account, (i) 

The participants or the fundraising 

representative shall establish a separate 

depository account to be used solely for 

the receipt and disbursement of the joint 

fundraising proceeds. All contributions 

deposited into the separate depository 

account must be permissible under Title 

2, United States Code. Each political 

committee shall amend its Statement of
2G902 Federal Register / Vol. 52, No. 106 / W ednesday, June 3, 1987 / Rules and Regulations

Organization to reflect the account as an 

additional depository.

(ii) The fundraising representative 

shall deposit all joint fundraising 

proceeds in the separate depository 

account within ten days of receipt as 

required by 11 CFR 103.3. The 

fundraising representative may delay 

distribution of the fundraising proceeds 

to the participants until all contributions 

are received .and all expenses are paid.

(iii) For contribution reporting and 

limitation purposes, the date of receipt 

of a contribution by a participating 

political committee is the date that the 

contribution is received by the 

fundraising representative. The 

fundraising representative shall report 

contributions in the reporting period in 

which they are received. Participating 

political committees shall report joint 

fundraising proceeds in accordance with 

11 CFR 9034.8(c)(9) when such funds are 

received from the fundraising 

representative.

(5) Recordkeeping requirements, (i) 

The fundraising representative and 

participating committees shall screen all 

contributions received to insure that the 

prohibitions and limitations of 11 CFR 

Parts 110 and 114 are observed. 

Participating political committees shall 

make their contributor records available 

to the fundraising representative to 

enable the fundraising representative to 

carry out its duty to screen 

contributions.

(ii) The fundraising representative 

shall collect and retain contributor 

information with regard to gross 

proceeds as required under 11 CFR 102.8 

and shall also forward such information 

to participating political committees.

(iii) The fundraising representative 

shall retain the records required under 

11 CFR 9033.11 regarding fundraising 

disbursements for a period of three 

years. Commercial fundraising firms or 

agents shall forward such information to 

the fundraising representative.

(6) Contribution limitations. Except to 

the extent that the contributor has 

previously contributed to any of the 

participants, a contributor may make a 

contribution to the joint fundraising 

effort which contribution represents the 

total amount that the contributor could 

contribute to all of the participants 

under the applicable limits of 11 CFR

110.1 and 110.2.

(7) Allocation o f gross proceeds, (i)

The fundraising representative shall 

allocate proceeds according to the 

formula stated in the fundraising 

agreement. Each contribution received 

shall be allocated among the 

participants in accordance with the 

allocation formula, unless the 

circumstances described in paragraphs

(c)(7) (ii), (iii) or (iv) of this section 

apply. Funds may not be distributed or 

reallocated so as to maximize the 

matchability of the contributions.

(ii) If distribution according to the 

allocation formula extinguishes the 

debts of one or more participants or if 

distribution under the formula results in 

a violation of the contribution limits of 

11 CFR 110.1(b), the fundraising 

representative may reallocate the 

surplus funds. Candidates seeking to 

extinguish outstanding debts shall not 

reallocate in reliance on the receipt of 

matching funds to pay the remainder of 

their debts; rather, all funds to which a 

participant is entitled under the 

allocation formula shall be deemed 

funds available to pay the candidate’s 

outstanding campaign obligations as 

provided in 11 CFR 9034.5(c).

(iii) Reallocation shall be based upon 

the remaining participants’ 

proportionate shares under the 

allocation formula. If reallocation results 

in a violation of a contributor’s limit 

under 11 CFR 110.1, the fundraising 

representative shall return to the 

contributor the amount of the 

contribution that exceeds the limit.

(iv) Earmarked contributions which 

exceed the contributor’s limit to the 

designated participant under 11 CFR 

Part 110 may not be reallocated by the 

fundraising representative without the 

written permission of the contributor. A 

written instrument made payable to one 

of the participants shall be considered 

an earmarked contribution unless a 

written statement by the contributor 

indicates that it is intended for inclusion 

in the general proceeds of the 

fundraising activity.

(8) Allocation o f expenses and

distribution o f net proceeds, (i) If 

participating committees are not 

affiliated as defined in 11 CFR 110.3 

prior to the joint fundraising activity and 

are not committees of the same political 

party:

(A) After gross contributions are 

allocated among the participants under 

11 CFR 9034.8(c)(7), the fundraising 

representative shall calculate each 

participant’s share of expenses based on 

the percentage of the total receipts each 

participant had been allocated. To 

calculate each participant’s net 

proceeds, the fundraising representative 

shall subtract the participant’s share of 

expenses from the amount that « 

participant has been allocated from 

gross proceeds.

(B) A participant may only pay 

expenses on behalf of another 

participant subject to the contribution 

limits of 11 CFR Part 110.

(C) The expenses from a series of 

fundraising events or activities shall be

allocated among the participants on a 

per-event basis regardless of whether 

the participants change or remain the 

same throughout the series.

(ii) If participating committees are 

affiliated as defined in 11 CFR 110.3 

prior to the joint fundraising activity or 

if participants are party committees of 

the same political party, expenses need 

not be allocated among those 

participants. Payment of such expenses 

by an unregistered committee or 

organization on behalf of an affiliated 

political committee may cause the 

unregistered organization to become a 

political committee.

(iii) Payment of expenses may be 

made from gross proceeds by the 

fundraising representative.

(9) Reporting o f receipts and

disbursements—(i) Reporting receipts.

(A) The fundraising representative shall 

report all funds received in the reporting 

period in which they are received. Each 

Schedule A filed by the fundraising 

representative under this section shall 

clearly indicate that the contributions 

reported on that schedule represent joint 

fundraising proceeds.

(B) After distribution of net proceeds, 

each participating political committee 

shall report its share of net proceeds 

received as a transfer-in from the 

fundraising representative. Each 

participating political committee shall 

also file a memo Schedule A itemizing 

its share of gross receipts as 

contributions from original contributors 

to the extent required under 11 CFR 

104.3(a).

(ii) Reporting disbursements. The 

fundraising representative shall report 

all disbursements in the reporting period 

in which they are made. Each 

participant shall report in a memo 

schedule B his or her total allocated 

share of these disbursements in the 

same reporting period in which net 

proceeds are distributed and reported 

and include the amount on page 4 of 

Form 3-P, under “Expenditures Subject 

to Limit.’’

§ 9034.9 Sale of assets acquired for

fundraising purposes.

(a) General. A candidate may sell 

assets donated to the campaign or 

otherwise acquired for fundraising 

purposes (See 11 CFR 9034.5(b)(2)), 

subject to the limitations and 

prohibitions of Title 2, United States 

Code and 11 CFR Parts 110 and 114.

(b) Sale after end o f matching

paym ent period. A candidate whose 

outstanding debts exceed his or her cash 

on hand after the end of the matching 

payment period as determined under 11 

CFR 9032.6 may dispose of assets
Federal Register / Vol. 52, No. 106 / W ednesday, June 3, 1987 / Rules and Regulations 20903

acquired for fundraising purposes in a 

sale to a wholesaler or other 

intermediary who will in turn sell such 

assets to the public, provided that the 

sale to the wholesaler or intermediary is 

an arms-length transaction. Sales made 

under this subsection will not be subject 

to the limitations and prohibitions of 

Title 2, United States Code and 11 CFR 

Parts 110 and 114.

PART 9035—EXPENDITURE

LIMITATIONS

Sec.

9035.1 Campaign expenditure limitation.

9035.2 Limitation on expenditures from 

personal or family funds.

Authority: 26 U.S.C. 9035 and 9039(b).

§ 9035.1 Campaign expenditure limitation.

(a) (1) No candidate or his or her 

authorized committee(s) shall knowingly 

incur expenditures in connection with 

the candidate’s campaign for 

nomination, which expenditures, in the 

aggregate, exceed $10,000,000 (as 

adjusted under 2 U.S.C. 441a(c)), except 

that the aggregate expenditures by a 

candidate in any one State shall not 

exceed the greater of: 16 cents (as 

adjusted under 2 U.S.C. 441a(c)) 

multiplied by the voting age population 

of the State (as certified under 2 U.S.C. 

441a(e)); or $200,000 (as adjusted under 2 

U.S.C. 441a(c)).

(2) The Commission will calculate the 

amount of expenditures attributable to 

the overall expenditure limit or to a 

particular state using the full amounts 

originally charged for goods and 

services rendered to the committee and 

not the amounts for which such 

obligations were settled and paid, 

unless the committee can demonstrate 

that the lower amount paid reflects a 

reasonable settlement of a bona fide 

dispute with the creditor.

(b) Each candidate receiving or 

expecting to receive matching funds 

under this subchapter shall also allocate 

his or her expenditures in accordance 

with the provisions of 11 CFR 106.2.

(c) A candidate may exclude from the 

overall expenditure limitation of 11 CFR

9035.1 an amount equal to 10% of 

salaries and overhead expenditures of 

his or her national campaign 

headquarters and state offices as an 

exempt legal and accounting compliance 

cost under 11 CFR 100.8(b)(15). For 

purposes of this section overhead 

expenditures include, but are not limited 

to rent, utilities, office equipment, 

furniture, supplies, and telephone base 

service charges. An additional amount 

of 10% of such salaries and overhead 

expenditures may be excluded from the 

overall expenditure limitation of 11 CFR

9035.1 as exempt fundraising

expenditures but this exemption shall 

not apply within 28 days of the primary 

election as specified in 11 CFR 

110.8(c)(2). Any amount excluded for 

fundraising expenditures shall be 

applied against the fundraising 

expenditure limitation under 11 CFR 

100.8(b)(21). If the candidate wishes to 

claim a larger compliance or fundraising 

exemption for any person, the candidate 

shall establish allocation percentages 

for each individual who spends all or a 

portion of his or her time to perform 

duties which are considered compliance 

or fundraising. The candidate shall keep 

detailed records to support the 

derivation of each percentage. Such 

records shall indicate which duties are 

considered compliance or fundraising 

and the percentage of time each person 

spends on such activity. Alternatively, 

the Commission’s Financial Control and 

Compliance Manual for Presidential 

Primary Candidates contains some other 

accepted allocation methods for 

calculating a compliance or fundraising 

exemption.

(1) Exempt compliance costs are those 

legal and accounting costs incurred 

solely to ensure compliance with 26 

U.S.C. 9031 et seq., 2 U.S.C. 431 et seq.,

and 11 CFR Chapter I, including the 

costs of preparing matching fund 

submissions. The costs of preparing 

matching fund submissions shall be 

limited to those functions not required 

for general contribution processing and 

shall include the costs associated with: 

Generating the matching fund 

submission list and the matching fund 

computer tape for each submission, 

edits of the contributor data base that 

are related to preparing a matching fund 

submission, making photocopies of 

contributor checks, and seeking 

additional documentation from 

contributors for matching purposes. The 

costs associated with general 

contribution processing shall include 

those normally performed for 

fundraising purposes, or for compliance 

with the recordkeeping and reporting 

requirements of 11 CFR Part 100 et seq.,

such as data entry, batching 

contributions for deposit, and 

preparation of FEC reports.

(2) Exempt fundraising expenses are 

those expenses associated with the 

solicitation of contributions. They 

include printing and postage for 

solicitations, air time for fundraising 

advertisements and the cost of meals 

and beverages for fundraising receptions 

or dinners.

(d) The expenditure limitations of 11 

CFR 9035.1 shall not apply to a 

candidate who does not receive 

matching funds at any time during the 

matching payment period.

§ 9035.2 Limitation on expenditures from

personal or family funds.

(a) (1) No candidate who has accepted 

matching funds shall knowingly make 

expenditures from his or her personal 

funds, or funds of his or her immediate 

family, in connection with his or her 

campaign for nomination for election to 

the office of President which exceed 

$50,000, in the aggregate. This section 

shall not operate to prohibit any 

member of the candidate’s immediate 

family from contributing his or her 

personal funds to the candidate, subject 

to the limitations of 11 CFR Part 110. The 

provisions of this section also shall not 

limit the candidate's liability for, nor the 

candidate’s ability to pay, any 

repayments required under 11 CFR Part 

9038. If the candidate or his or her 

committee knowingly incurs 

expenditures in excess of the limitations 

of 11 CFR 110.8(a), the Commission may 

seek civil penalties under 11 CFR Part 

111 in addition to any repayment 

determinations made on the basis of 

such excessive expenditures.

(2) Expenditures made using a credit 

card for which the candidate is jointly or 

solely liable will count against the limits 

of this section to the extent that the full 

amount due, including any finance 

charge, is not paid by the committee 

within 60 days after the closing date of 

the billing statement on which the 

charges first appear. For purposes of this 

section, the ‘‘closing date” shall be the 

date indicated on the billing statement 

which serves as the cutoff date for 

determining which charges are included 

on that billing statement.

(b) For purposes of this section, the 

term "immediate family" means a 

candidate, spouse, and any child, 

parent, grandparent, brother, halfbrother, sister, or half-sister of the 

candidate, and the spouses of such 

persons.

(c) For purposes of this section, 

"personal funds” has the same meaning 

as specified in 11 CFR 110.10.

PART 9036—REVIEW OF SUBMISSION

AND CERTIFICATION OF PAYMENTS

BY COMMISSION

Sec.

9036.1 Threshold submission.

9036.2 Additional submissions for matching 

fund payments.

9036.3 Submission errors and insufficient 

documentation.

9036.4 Commission review of submissions.

9036.5 Resubmissions.

9036.6 Continuation of certification.

Authority: 26 U.S.C. 9036 and 9039(b).
20904 Federal Register / Vol. 52, No. 106 / W ednesday, June 3, 1987 / Rules and Regulations

§ 9036.1 Threshold submission.

(a) Time for submission o f threshold

submission. At any time after January 1 

of the year immediately preceding the 

Presidential election year, the candidate 

may submit a threshold submission for 

matching fund payments in accordance 

with the format for such submissions set 

forth in 11 CFR 9036.1(b). The candidate 

may submit the threshold submission 

simultaneously with or subsequent to 

his or her submission of the candidate 

agreement and certifications required by 

11 CFR 9033.1 and 9033.2.

(b) Format for threshold submission.

(1) For each State in which the 

candidate certifies that he or she has 

met the requirements of the 

certifications in 11 CFR 9033.2(b), the 

candidate shall submit an alphabetical 

list of contributors showing:

(1) Each contributor’s full name and 

residential address;

(ii) The occupation and name of 

employer for individuals whose 

aggregate contributions exceed $200 in 

the calendar year;

(iii) The date of deposit of each 

contribution into the designated 

campaign depository;

(iv) The full dollar amount of each 

contribution submitted for matching 

purposes;

(v) The matchable portion of each 

contribution submitted for matching 

purposes;

(vi) The aggregate amount of all 

matchable contributions from that 

contributor submitted for matching 

purposes;

(vii) A notation indicating which 

contributions were received as a result 

of joint fundraising activities.

(2) The candidate shall submit a fullsize photocopy of each check or written 

instrument and of supporting 

documentation in accordance with 11 

CFR 9034.2 for each contribution that the 

candidate submits to establish eligibility 

for matching funds. For purposes of the 

threshold submission, the photocopies 

shall be segregated alphabetically by 

contributor within each State, and shall 

be accompanied by and referenced to 

copies of the relevant deposit slips.

(3) The candidate shall submit bank 

documentation, such as bank-validated 

deposit slips or unvalidated deposit 

slips accompanied by the relevant bank 

statements, which indicate that the 

contributions submitted were deposited 

into a designated campaign depository.

(4) For each State in which the 

candidate certifies that he or she has 

met the requirements to establish 

eligibility, the candidate shall submit a 

listing, alphabetically by contributor, of 

all checks returned by the bank to date 

as unpaid (e.g., stop payments, nonsufficient funds) regardless of whether 

the contribution was submitted for 

matching. This listing shall be 

accompanied by a full-size photocopy of 

each unpaid check, and copies of the 

associated debit memo and bank 

statement.

(5) The candidate shall submit all 

contributions in accordance with the 

Federal Election Commission’s 

Guideline for Presentation in Good 

Order.

(6) Contributions that are not 

submitted in compliance with this 

section shall not count toward the 

threshold amount.

(c) Threshold certification by

commission. (1) After the Commission 

has determined under 11 CFR 9033.4 that 

the candidate has satisfied the eligibility 

and certification requirements of 11 CFR

9033.1 and 9033.2, the Commission will 

notify the candidate in writing that the 

candidate is eligible to receive primary 

matching fund payments as provided in 

11 CFR Part 9034.

(2) If the Commission makes a 

determination of a candidate’s eligibility 

under 11 CFR 9036.1(a) in a Presidential 

election year, the Commission shall 

certify to the Secretary, within 10 

calendar days after the Commission has 

made its determination, the amount to 

which the candidate is entitled.

(3) If the Commission makes a 

determination of a candidate’s eligibility 

under 11 CFR 9036.1(a) in the year 

preceding the Presidential election year, 

the Commission will notify the 

candidate that he or she is eligible to 

receive matching fund payments; 

however, the Commission’s 

determination will not result in a 

payment of funds to the candidate until 

after January 1 of the Presidential 

election year.

§ 9036.2 Additional submissions for

matching fund payments.

(a) Time for submission o f additional

submissions. The candidate may submit 

additional submissions for payments to 

the Commission on dates to be 

determined and published by the 

Commission.

(b) Format for additional submissions.

The candidate may obtain additional 

matching fund payments subsequent to 

the Commission’s threshold certification 

and payment of primary matching funds 

to the candidate by filing an additional 

submission for payment. All additional 

submissions for payments filed by the 

candidate shall be made in accordance 

with the Federal Election Commission’s 

Guideline for Presentation in Good 

Order.

(1) The first submission for matching 

funds following the candidate’s

threshold submission shall contain all 

the matchable contributions included in 

the threshold submission and any 

additional contributions to be submitted 

for matching in that submission. This 

submission shall contain all the 

information required for the threshold 

submission except that:

(1) The candidate is not required to 

resubmit the candidate agreement and 

certifications of 11 CFR 9033.1 and 

9033.2;

(ii) The candidate is required to 

submit an alphabetical list of 

contributors, but not segregated by State 

as required in the threshold submission;

(iii) The candidate is required to 

submit a listing, alphabetical by 

contributor, of all checks returned 

unpaid, but not segregated by State as 

required in the threshold submission;

(iv) The occupation and employer’s 

name need not be disclosed on the 

contributor list for individuals whose 

aggregate contributions exceed $200 in 

the calendar year, but such information 

is subject to the recordkeeping and 

reporting requirements of 2 U.S.C. 432

(c)(3), 434(b)(3)(A) and 11 CFR 

102.9(a)(2), 104.3(a)(4)(i); and

(v) The photocopies of each check or 

written instrument and of supporting 

documentation shall either be 

alphabetized and referenced to copies of 

the relevant deposit slip, but not 

segregated by State as required in the 

threshold submission; or such 

photocopies may be batched in deposits 

of 50 contributions or less and crossreferenced by deposit number and 

sequence number within each deposit on 

the contributor list.

(2) Following the first submission 

under 11 CFR 9036.2(b)(1), candidates 

may request additional matching funds 

on dates prescribed by the Commission 

by making a letter request in lieu of 

making a full submission as required 

under 11 CFR 9036.2(b)(1), however, 

letter requests may not be submitted 

after the candidate’s date of ineligibility. 

Letter requests shall state an amount of 

matchable contributions not previously 

submitted for matching and shall 

provide bank documentation, such as 

bank-validated deposit slips or 

unvalidated deposit slips accompanied 

by the relevant bank statement, 

demonstrating that the committee has 

received the funds for which matching 

payments are requested. The amount 

requested for matching may include 

contributions received up to the last 

business day preceding the date of the 

request. On the next submission date as 

designated for that committee after a 

letter request has been made, the 

committee shall submit the
Federal Register / Vol. 52, No. 106 / W ednesday, June 3, 1987 / Rules and Regulations 20905

documentation required under 11 CFR 

9036.2(b)(lJ for all contributions 

included in the letter request, as well as 

any contributions submitted for 

matching in that full submission. A 

committee may not submit two 

consecutive letter requests, but the 

committee may choose to make a full 

regular submission on a date designated 

by the Commission as a letter request 

date for that committee.

(c) Certification o f additional

payments by Commission. (l)(i) When a 

candidate who is eligible under 11 CFR 

9033.4 submits an additional submission 

for payment in the Presidential election 

year, the Commission may certify to the 

Secretary within 5 business days after 

the Commission’s receipt of information 

submitted by the candidate under 11 

CFR 9036.2(a), an amount based on the 

holdback procedure described in the 

Federal Election Commission’s 

Guideline for Presentation in Good 

Order. If the candidate makes a letter 

request, the Commission may certify to 

the Secretary an amount which is less 

than that requested based upon the ratio 

of verified matchable contributions to 

total deposits for that committee in the 

committee’s last regular submission.

(ii) The Commission will certify to the 

Secretary any additional amount to 

which the eligible candidate is entitled, 

if any, within 20 business days after the 

Commission’s receipt of information 

submitted by the candidate under 11 

CFR 9036.2(a), unless the projected 

dollar value of the nonmatchable 

contributions contained in the 

submission exceeds 10% of the amount 

requested. In the latter case, the 

Commission will certify any additional 

amount within 25 business days. See 11 

CFR 9036.4 for Commission procedures 

for certification of additional payments.

(2) After a candidate’s date of 

ineligibility, the Commission will certify 

to the Secretary, within 20 business 

days after receipt of a submission by the 

candidate under 11 CFR 9036.2(a), an 

amount to which the ineligible candidate 

is entitled in accordance with 11 CFR 

9034.1(b), unless the projected dollar 

value of the nonmatchable contributions 

contained in the submission exceeds

10% of the amount requested. In the 

latter case, the Commission will certify 

any amount to which the ineligible 

candidate is entitled within 25 business 

days.

. (d) Additional submissions submitted

m non-Presidential election year. The 

candidate may submit additional 

contributions for review during the year 

Preceding the Presidential election year; 

however, the amount of each submission 

made during this period must exceed 

$50,000. Additional submissions filed by

a candidate in a non-Presidential 

election year will not result in payment 

of matching funds to the candidate until 

after January 1 of the Presidential 

election year.

§ 9036.3 Submission errors and

insufficient documentation.

Contributions which are otherwise 

matchable may be rejected for matching 

purposes because of submission errors 

or insufficient supporting 

documentation. Contributions, other 

than those defined in 11 CFR 9034.3 or in 

the form of money orders, cashier’s 

checks, or similar negotiable 

instruments, may become matchable if 

there is a proper resubmission in 

accordance with 11 CFR 9036.5 and

9036.6. Insufficient documentation or 

submission errors include but are not 

limited to:

(a) Discrepancies in the written 

instrument, such as:

(1) Instruments drawn on other than 

personal accounts of contributors and 

not signed by the contributing 

individual;

(2) Signature discrepancies; and

(3) Lack of the contributor’s signature, 

the amount or date of the contribution, 

or the listing of the committee or 

candidate as payee.

(b) Discrepancies between listed 

contributions and the written instrument 

or supporting documentation, such as:

(1) The listed amount requested for 

matching exceeds the amount contained 

on the written instrument;

(2) A written instrument has not been 

submitted to support a listed 

contribution;

(3) The submitted written instrument 

cannot be associated either by 

accountholder identification or signature 

with the listed contributor; or

(4) A discrepancy between the listed 

contribution and the supporting bank 

documentation or the bank 

documentation is omitted.

(c) Discrepancies within or between 

contributor lists submitted, such as:

(1) The address of the contributor is 

omitted or incomplete or the 

contributor's name is alphabetized 

incorrectly, or more than one contributor 

is listed per item;

(2) A discrepancy in aggregation 

within or between submissions which 

results in a request that more than $250 

be matched for that contributor, or a 

listing of a contributor more than once 

within the same submission; or

(3) A written instrument has been 

previously submitted and matched in 

full or is listed twice in the same 

submission.

(d) The omission of information, 

supporting statements, or

documentation required by 11 CFR

9034.2.

§ 9036.4 Commission review of

submissions.

(a) Non-acceptance o f submission for

review o f matchability. The Commission 

will make an initial review of each 

submission made under 11 CFR Part 

9036 to determine if it substantially 

meets the format requirements of 11 CFR 

9036.1(b) and 9036.2(b) and the Federal 

Election Commission’s Guideline for 

Presentation in Good Order. If the 

Commission determines that a 

submission does not substantially meet 

these requirements, it will not review 

the matchability of the contributions 

contained therein. In such a case, the 

Commission will return the submission 

to the candidate and request that it be 

corrected in accordance with the format 

requirements. If the candidate makes a 

corrected submission within 3 business 

days after the Commission’s return of 

the original, the Commission will review 

the corrected submission prior to the 

next regularly-scheduled submission 

date. Corrected submissions made after 

this three day period will be reviewed 

subsequent to the next regularlyscheduled submission date.

(b) Acceptance o f submission for

review o f matchability. If the 

Commission determines that a 

submission made under 11 CFR Part 

9036 satisfies the format requirements of 

11 CFR 9036.1(b) and 9036.2(b) and the 

Federal Election Commission’s 

Guideline for Presentation in Good 

Order, it will review the matchability of 

the contributions contained therein. The 

Commission, in conducting its review, 

may utilize statistical sampling 

techniques. Based on the results of its 

review, the Commission may calculate a 

matchable amount for the submission 

which is less than the amount requested 

by the candidate. If the Commission 

certifies for payment to the Secretary an 

amount that is less than the amount 

requested by the candidate in a 

particular submission, or reduces the 

amount of a subsequent certification to 

the Secretary by adjusting a previous 

certification made under 11 CFR 

9036.2(c)(1), the Commission will notify 

the candidate in writing of the following:

(1) The amount of the difference 

between the amount requested and the 

amount to be certified by the 

Commission;

(2) The amount of each contribution 

and the corresponding contributor's 

name for each contribution that the 

Commission has rejected as 

nonmatchable and the reason that it is 

not matchable; or if statistical sampling
20906 Federal Register / Vol. 52, No. 106 / W ednesday, June 3, 1987 / Rules and Regulations

is used, the estimated amount of 

contributions by type and the reason for 

rejection;

(3) The amount of contributions that 

have been determined to be matchable 

and that the Commission will certify to 

the Secretary for payment; and

(4) A statement that the candidate 

may supply the Commission with 

additional documentation or other 

information in the resubmission of any 

rejected contribution under 11 CFR 

9036.5 in order to show that a rejected 

contribution is matchable under 11 CFR

9034.2.

(c) Adjustment o f amount to be

certified by Commission. The candidate 

shall notify the Commission as soon as 

possible if the candidate or the 

candidate’s authorized committee(s) has 

knowledge that a contribution submitted 

for matching does not qualify under 11 

CFR 9034.2 as a matchable contribution, 

such as a check returned to the 

committee for insufficient funds or a 

contribution that has been refunded, so 

that the Commission may properly 

adjust the amount to be certified for 

payment.

(d) Commission audit o f submissions.

The Commission may determine, for the 

reasons stated in 11 CFR Part 9039, that 

an audit and examination of 

contributions submitted for matching 

payment is warranted. The audit and 

examination shall be conducted in 

accordance with the procedures of 11 

CFR Part 9039.

§ 9036.5 Resubmissions.

(a) Alternative resubmission methods.

Upon receipt of the Commission’s notice 

of the results of the submission review 

pursuant to 11 CFR 9036.4(b), a 

candidate may choose to:

(1) Resubmit the entire submission; or

(2) Make a written request for the 

identification of the specific 

contributions that were rejected for 

matching, and resubmit those specific 

contributions.

(b) Time for presentation of

resubmissions. If the candidate chooses 

to resubmit any contributions under 11 

CFR 9036.5(a), the contributions shall be 

resubmitted on dates to be determined 

and published by the Commission. The 

candidate may not make any 

resubmissions later than the first 

Tuesday in September of the year 

following the Presidential election year.

(c) Format for resubmissions. All 

resubmissions filed by the candidate 

shall be made in accordance with the 

Federal Election Commission’s 

Guideline for Presentation in Good 

Order. In making a presentation of 

resubmitted contributions, the candidate 

shall follow the format requirements as

specified in 11 CFR 9036.2(b)(1), except 

that:

(1) The candidate need not provide 

photocopies of written instruments, 

supporting documentation and bank 

documentation unless it is necessary to 

supplement the original documentation.

(2) Each resubmitted contribution 

shall be referenced to the submission in 

which it was first presented.

(3) Each list of resubmitted 

contributions shall reflect the aggregate 

amount of contributions submitted for 

matching from each contributor as of the 

date of the original submission.

(4) Each list of resubmitted 

contributions shall reflect the aggregate 

amount of contributions submitted for 

matching from each contributor as of the 

date of the resubmission.

(5) Each list of resubmitted 

contributions shall only contain 

contributions previously submitted for 

matching and no new or additional 

contributions.

(6) Each resubmission shall be 

accompanied by a statement that the 

candidate has corrected his or her 

contributor records (including the data 

base for those candidates maintaining 

their contributor list on computer).

(d) Certification o f resubmitted

contributions. Contributions that the 

Commission determines to be matchable 

will be certified to the Secretary within 

15 business days. If the candidate 

chooses to request the specific 

contributions rejected for matching 

pursuant to 11 CFR 9036.5(a)(2), the 

amount certified shall equal only the 

matchable amount of the particular 

contribution that meets the standards on 

resubmission, rather than the amount 

projected as being nonmatchable based 

on that contribution due to the sampling 

techniques used in reviewing the 

original submission.

(e) Initial determinations. If the 

candidate resubmits a contribution for 

matching and the Commission 

determines that the rejected 

contribution is still nonmatchable, the 

Commission will notify the candidate in 

writing of its determination. The 

Commission will advise the candidate of 

the legal and factual reasons for its 

determination and of the evidence on 

which that determination is based. The 

candidate may submit written legal or 

factual materials to demonstrate that the 

contribution is matchable within'30 

calendar days after service of the 

Commission’s notice. Such materials 

may be submitted by counsel if the 

candidate so desires.

(f) Final determinations. The 

Commission will consider any written 

legal or factual materials timely 

submitted by the candidate in making its

final determination. A final 

determination by the Commission that a 

contribution is not matchable will be 

accompanied by a written statement of 

reasons for the Commission’s action. 

This statement will explain the reasons 

underlying the Commission’s 

determination and will summarize the 

results of any investigation upon which 

the determination is based.

§ 9036.6 Continuation of certification.

Candidates who have received 

matching funds and who are eligible to 

continue to receive such funds may 

continue to submit additional 

submissions for payment to the 

Commission on dates specified in the 

Federal Election Commission’s 

Guideline for Presentation in Good 

Order. The Commission will notify each 

candidate of the last date on which 

contributions may be submitted for the 

first time for matching in the year 

following the election. Hie last date for 

first-time submissions will be either the 

last Monday in February or the second 

Monday in March of the year following 

the election, depending on the 

submission schedule the Commission 

has designated for the candidate. No 

contribution will be matched if it is 

submitted after the last submission date 

designated for that candidate, regardless 

of the date the contribution was 

deposited.

PART 9037—PAYMENTS

Sec.

9037.1 Payments of Presidential primary 

matching funds.

9037.2 Equitable distribution of funds.

9037.3 Deposits of Presidential primary 

matching funds.

Authority: 26 U.S.C. 9037 and 9039(b).

§ 9037.1 Payments of Presidential primary

matching funds.

Upon receipt of a written certification 

from the Commission, but not before the 

beginning of the matching payment 

period, the Secretary will promptly 

transfer the amount certified from the 

matching payment account to the 

candidate.

§ 9037.2 Equitable distribution of funds.

In making such transfers to 

candidates of the same political party, 

the Secretary will seek to achieve an 

equitable distribution of funds available 

in the matching payment account, and 

the Secretary will take into account, in 

seeking to achieve an equitable 

distribution of funds available in the 

matching payment account, the 

sequence in which such certifications 

are received.
Federal Register / Vol. 52, No. 106 / Wednesday, June 3, 1987 / Rules and Regulations 20907

§ 9037.3 Deposits of Presidential primary

matching funds.

Upon receipt of any matching funds, 

the candidate shall deposit the full 

amount received into a checking 

account maintained by the candidate’s 

principal campaign committee in the 

depository designated by the candidate.

PART 9038—EXAMINATIONS AND

AUDITS

Sec.

9038.1 Audit.

9038.2 Repayments.

9038.3 Liquidation of obligations; 

repayment.

9038.4 Extensions of time.

9038.5 Petitions for rehearing; stays of 

repayment determinations.

9038.6 Stale-dated committee checks. 

Authority: 26 U.S.C. 9038 and 9039(b).

§9038.1 Audit

(a) Ùeneral. (1) The Commission will 

conduct an audit of the qualified 

campaign expenses of every candidate 

and his or her authorized committee(s) 

who received Presidential primary 

matching funds. The audit may be 

conducted at any time after the date of 

the candidate’s ineligibility.

(2) In addition, the Commission may 

conduct other examinations and audits 

from time to time as it deems necessary 

to carry out the provisions of this 

subchapter.

(3) Information obtained pursuant to 

any audit and examination conducted

under 11 CFR 9038.1(a) (1) and (2) may 

be used by the Commission as the basis, 

or partial basis, for its repayment 

determinations under 11 CFR 9038.2.

(b) Conduct o f fieldwork. (1) The 

Commission will give the candidate’s 

authorized committee at least two 

weeks’ notice of the Commission’s 

intention to commence fieldwork on the 

audit and examination. The fieldwork 

shall be conducted at a site provided by 

the committee.

(i) Office space and records. On the 

date scheduled for the commencement 

of fieldwork, the candidate or his or her 

authorized committee(s) shall provide 

Commission staff with office space and 

committee records in accordance with 

the candidate and committee agreement 

under 11 CFR 9033.1(b)(6).

(ii) Availability o f committee

personnel. On the date scheduled for the 

commencement of fieldwork, the 

candidate or his or her authorized 

committee(s) shall have committee 

personnel present at the site of the 

fieldwork. Such personnel shall be 

familiar with the committee’s records 

and operation and shall be available to 

Commission staff to answer questions 

and to aid in locating records.

(iii) Failure to provide staff, records or

office space. If the candidate or his or 

her authorized committee(s) fail to 

provide adequate office space, 

personnel or committee records, the 

Commission may seek judicial 

intervention under 2 U.S.C. 437d or 26 

U.S.C. 9040(c) to enforce the candidate 

and committee agreement made under 

11 CFR 9033.1(b). Before seeking judicial 

intervention, the Commission will notify 

the candidate of his or her failure to 

comply with the agreement and will 

recommend corrective action to bring 

the candidate into compliance. Upon 

receipt of the Commission’s notification, 

the candidate will have 10 calendar 

days in which to take the corrective 

action indicated or to otherwise 

demonstrate to the Commission in 

writing that he or she is complying with 

the candidate and committee agreement.

(iv) If, in the course of the audit 

process, a dispute arises over the 

documentation sought or other 

requirements of the candidate 

agreement, the candidate may seek 

review by the Commission of the issues 

raised. To seek review, the candidate 

shall submit a written statement, within 

10 calendar days after the disputed 

Commission staff request is made, 

describing the dispute and indicating the 

candidate's proposed altemative(s).

(2) Fieldwork will include the 

following steps designed to keep the 

candidate and committee informed as to 

the progress of the audit and to expedite 

the process;

(i) Entrance conference. At the outset 

of the fieldwork, Commission staff will 

hold an entrance conference, at which 

the candidate’s representatives will be 

advised of the purpose of the audit and 

the general procedures to be followed. 

Future requirements of the candidate 

and his or her authorized committee, 

such as possible repayments to the 

United States Treasury, will also be 

discussed. Committee representatives 

shall provide information and records 

necessary to conduct the audit, and 

Commission staff will be available to 

answer committee questions.

(ii) Review o f records. During the 

fieldwork, Commission staff will review 

committee records and may conduct 

interviews of committee personnel. 

Commission staff will be available to 

explain aspects of the audit and 

examination as it progresses. Additional 

meetings between Commission staff and 

committee personnel may be held from 

time to time during the fieldwork to 

discuss possible audit findings and to 

resolve issues arising during the course 

of the audit.

(iii) Exit conference. At the conclusion 

of the fieldwork, Commission staff will

hold an exit conference to discuss with 

committee representatives the staffs 

preliminary findings and 

recommendations which the 

Commission staff anticipates that it may 

present to the Commission for approval. 

Commission staff will advise committee 

representatives at this conference of the 

projected timetable regarding the 

issuance of an audit report, the 

committee’s opportunity to respond 

thereto, and the Commission’s initial 

and final repayment determinations 

under 11 CFR 9038.2.

(3) Commission staff may conduct 

additional fieldwork after the 

completion of the fieldwork conducted 

pursuant to 11 CFR 9038.1(b) (1) and (2). 

Factors that may necessitate such 

follow-up fieldwork include, but are not 

limited to, the following:

(i) Committee responses to audit 

findings;

(ii) Financial activity of the committee 

subsequent to the fieldwork conducted 

pursuant to 11 CFR 9038.1(b)(1);

(iii) Committee responses to 

Commission repayment determinations 

made under 11 CFR 9038.2.

(4) The Commission will notify the 

candidate and his or her authorized 

committee if follow-up fieldwork is 

necessary. The provisions of 11 CFR 

9038.1(b) (1) and (2) shall apply to any 

additional fieldwork conducted.

(c) Preparation o f interim audit report.

(1) After the completion of the fieldwork 

conducted pursuant to 11 CFR 

9038.1(b)(1), the Commission will issue 

an interim audit report to the candidate 

and his or her authorized committee.

The interim audit report may contain 

Commission findings and 

recommendations regarding one or more 

of the following areas:

(i) An evaluation of procedures and 

systems employed by the candidate and 

committee to comply with applicable 

provisions of the Federal Election 

Campaign Act, Primary Matching 

Payment Account Act and Commission 

regulations;

(ii) Eligibility of the candidate to 

receive primary matching payments;

(iii) Accuracy of statements and 

reports filed with the Commission by the 

candidate and committee;

(iv) Compliance of the candidate and 

committee with applicable statutory and 

regulatory provisions except for those 

instances where the Commission has 

instituted an enforcement action on the 

matter(s) under the provisions of 2 

U.S.C. 437g and 11 CFR Part 111; and

(v) Preliminary calculations regarding 

future repayments to the United States 

Treasury.
20908 Federal Register / Vol. 52, No. 106 f W ednesday, June 3, 1987 / Rules an d Regulations

(2J The candidate and his or her 

authorized committee will have an 

opportunity to submit,, in writing, within 

30 calendar days after service of the 

interim report, legal and factual 

materials disputing or commenting on 

the contents of the interim report. Such 

materials may be submitted by counsel 

if the candidate so desires.

(3) The Commission will consider any 

written legal and factual materials 

submitted by the candidate or his or her 

authorized committee in accordance 

with 11 CFR 9038.1(c)(2) before 

approving and issuing an audit report to 

be released to the public. The contents 

of the publicly-released audit report may 

differ from that of the interim report 

since the Commission will consider 

timely submissions of legal and factual 

materials by the candidate or committee 

in response to the interim report.

(d) Preparation o f publicly-released

audit report. An audit report prepared 

subsequent to an interim report will be 

publicly released pursuant to 11 CFR 

9038.1(e). This report will contain 

Commission findings and 

recommendations addressed in the 

interim audit report but may contain 

adjustments based, on the candidate’s 

response to the interim report In 

addition, this report will contain an 

initial repayment determination made 

by the Commission pursuant to 11 CFR 

9038.2(c)(1) in lieu of the preliminary 

calculations set forth in the interim 

report.

(e) Public release o f audit report (1) 

After the candidate and committee have 

had an opportunity to respond to a 

written interim report of the 

Commission, the Commission will make 

public the audit report prepared 

subsequent to the interim report, as 

provided in 11 CFR 9038.1(d).

(2) If the Commission determines, on 

the basis of information obtained under 

the audit and examination process, that 

certain matters warrant enforcement 

under 2 U.S.C. 437g and 11 CFR Part 111, 

those matters will not be contained in 

the publicly-released report. In such 

cases, the audit report will indicate that 

certain other matters have been referred 

to the Commission’s Office of General 

Counsel.

(3) The Commission will provide the 

candidate and the committee with 

copies of the agenda document 

containing those portions of the final 

audit report to be considered in open 

session 24 hours prior to releasing the 

agenda document to the public. The 

Commission will also provide the 

candidate and committee with copies of 

the final audit report 24 hours before 

releasing the report to the public.

(4) Addenda to the audit report may 

be issued from time to time as 

circumstances warrant and as 

additional information becomes 

available. Such addenda may be based, 

in part, on follow-up fieldwork 

conducted under 11 CFR 9038.1(b)(3), 

and will be placed on the public record.

§ 9038.2 Repayments.

(a) General: (1) A candidate who has 

received payments from the matching 

payment account shall pay the United 

States Treasury any amounts which the 

Commission determines to be repayable 

under this section. In making repayment 

determinations under this section, the 

Commission may utilize information 

obtained from audits and examinations 

conducted pursuant to 11 CFR 9038.1 

and Part 9039 or otherwise obtained by 

the Commission in carrying out its 

responsibilities under this subchapter.

(2) The Commission will notify the 

candidate of any repayment 

determinations made under this section 

as soon as possible, but not later than 3 

years after the end of the matching 

payment period.

(3) Once die candidate receives notice 

of the Commission’s final repayment 

determination under this section, the 

candidate should give preference to the 

repayment over all other outstanding 

obligations of his or her committee, 

except for any federal taxes owed by 

the committee.

(b) Bases for repayment—(1) 

Payments in excess o f candidate’s

entitlement. The Commission may 

determine that certain portions of the 

payments made to a candidate from the 

matching payment account were in 

excess of the aggregate amount of 

payments to which such candidate was 

entitled. Examples of such excessive 

payments include, but are not limited to, 

the following:

(i) Payments made to the candidate 

after the candidate’s date of ineligibility 

where it is later determined that the 

candidate had no net outstanding 

campaign obligations as defined in 11 

CFR 9034.5;

(ii) Payments or portions of payments 

made to the candidate which are later 

determined to have been excessive due 

to the operation of the Commission’s 

expedited payment procedures as set 

forth in the Federal Election 

Commission’s Guideline For 

Presentation In Good Order;

(hi) Payments or portions of payments 

made on the basis of matched 

contributions later determined to have 

been non-matchable;

(iv) Payments or portions of payments 

made to the candidate which are later 

determined to have been excessive due

to the candidate’s failure to include 

funds received by a fundraising 

representative committee under 11 CFR 

9034.8 on the candidate’s statement of 

net outstanding campaign obligations 

under 11 CFR 9034.5; and

(v) Payments or portions of payments 

made to the candidate on the basis of 

the debts reflected in the candidate’s 

statement of net outstanding campaign 

obligations, which debts are later settled 

for an amount less than that stated in 

the statement of net outstanding 

campaign obligations.

(2) Use o f funds for non-qualified

campaign expenses. (i) The Commission 

may determine that amount(s) of any 

payments made to a candidate from the 

matching payment account were used 

for purposes other than those set forth in 

paragraphs (b)(2)(i) (A)-(C) of this 

section:

(A) Defrayal of qualified campaign 

expenses;

(B) Repayment of loans which were 

used to defray qualified campaign 

expenses; and

(C) Restora tion of funds (other than 

contributions which were received and 

expended to defray qualified campaign 

expenses) which were used to defray 

qualified campaign expanses.

pi) Examples of Commission 

repayment determinations under 11 CFR 

9038.2(b)(2) include, but are not limited 

to, the following:

(A) Determinations that a candidate, a 

candidate’s authorized committee(s) or 

agents have made expenditures in 

excess of the limitations set forth in 11 

CFR 9035;

(B) Determinations that funds 

described m 11 CFR 9038.2(b)(2)(il were 

expended in violation of state or federal 

law; and

(C) Determinations that funds 

described in 11 CFR 9038.2(b)(2)(i) were 

expended for expenses resulting from a 

violation of state or federal law, such as 

the payment of fines or penalties.

(in) The amount of any repayment 

sought under this section shall bear the 

same ratio to the total amount 

determined to have been used for nonqualified campaign expenses as the 

amount of matching funds certified to 

the candidate bears to the total amount 

of deposits of contributions and 

matching funds, as of the candidate’s 

date of ineligibility. To determine at 

what point committee accounts no 

longer contain matching funds for the 

purpose of seeking repayment for nonqualified campaign expenses, the 

Commission will review committee 

expenditures from the date of the last 

matching fund payment to the 

candidate, using the assumption that the
Federal Register / Vol. 52, No. 106 / W ednesday, June 3, 1987 / Rules and Regulations 20909

last payment has been expended on a 

last-in, first-out basis.

(3) Failure to provide adequate

documentation. The Commission may 

determine that amount(s) spent by the 

candidate, the candidate’s authorized 

committee(s), or agents were not 

documented in accordance with 11 CFR 

9033.11. The amount of any repayment 

sought under this section shall be 

determined by using the formula set 

forth in 11 CFR 9038.2(b)(2)(iii).

(4) Surplus. The Commission may 

determine that the candidate’s net 

outstanding campaign obligations, as 

defined in 11 CFR 9034.5, reflect a 

surplus.

(c) Repayment determination

procedures. Commission repayment 

determinations will be made in 

accordance with the procedures set 

forth at 11 CFR 9038.2(c) (1) through (4), 

of this section.

(1) Initial determination. The 

Commission will provide the candidate 

with a written notice of its initial 

repayment determination(s). This notice 

will be included in the Commission’s 

publicly-released audit report, pursuant 

to 11 CFR 9038.1(d), and will set forth 

the legal and factual reasons for such 

determination(s). Such notice will also 

advise the candidate of the evidence 

upon which any such determination is 

based. If the candidate does not dispute 

an initial repayment determination of 

the Commission within 30 calendar days 

after service of the notice, such initial 

determination will be considered a final 

determination of the Commission.

(2) Submission o f written materials. If 

the candidate disputes the Commission’s 

initial repayment determination(s), he or 

she shall have an opportunity to submit 

in writing, within 30 calendar days after 

service of the Commission’s notice, legal 

and factual materials to demonstrate 

that no repayment, or a lesser 

repayment, is required. The Commission 

will consider any written legal and 

factual materials submitted by the 

candidate within this 30 day period in 

making its final repayment 

determination(s). Such materials may be 

submitted by counsel if the candidate so 

desires.

(3) Oral presentation. A candidate 

who has submitted written materials 

under 11 CFR 9038.2(c)(2) may request 

that the Commission provide such 

candidate with an opportunity to 

address the Commission in open 

session. If the Commission decides by 

an affirmative vote of four (4) of its 

members to grant the candidate’s 

request, it will inform the candidate of 

the date and time set for the oral 

Presentation. At the date and time set 

by the Commission, the candidate or

candidate’s designated representative 

will be allotted an amount of time in 

which to make an oral presentation to 

the Commission based upon the legal 

and factual materials submitted under 

11 CFR 9038.2(c)(2). The candidate or 

representative will also have the 

opportunity to answer any questions 

from individual members of the 

Commission.

(4) Final determination. In making its 

final repayment determination(s), the 

Commission will consider any 

submission made under 11 CFR 

9038.2(c)(2) and any oral presentation 

made under 11 CFR 9038.2(c)(3). A final 

determination that a candidate must 

repay a certain amount will be 

accompanied by a written statement of 

reasons for the Commission’s actions. 

This statement will explain the reasons 

underlying the Commission’s 

determination and will summarize the 

results of any investigation upon which 

the determination is based.

(d) Repayment period. (1) Within 90 

calendar days after service of the notice 

of the Commission’s initial repayment 

determination(s), the candidate shall 

repay to the Secretary amounts which 

the Commission has determined to be 

repayable. Upon application by the 

candidate, the Commission may grant 

an extension of up to 90 calendar days 

in which to make repayment.

(2) If the candidate submits written 

materials under 11 CFR 9038.2(c)(2) 

disputing the Commission’s initial 

repayment determination(s), the time for 

repayment will be suspended until the 

Commission makes its final repayment 

determination(s). Within 30 calendar 

days after service of the notice of the 

Commission’s final repayment 

determination(s), the candidate shall 

repay to the Secretary amounts which 

the Commission has determined to be 

repayable. Upon application by the 

candidate, the Commission may grant 

an extension of up to 90 days in which 

to make repayment.

(e) Computation of time. The time 

periods established by this section shall 

be computed in accordance with 11 CFR 

111.2.

(f) Additional repayments. Nothing in 

this section will prevent the Commission 

from making additional repayment 

determinations on one or more of the 

bases set forth at 11 CFR 9038.2(b) after 

it has made a final determination on any 

such basis. The Commission may make 

additional repayment determinations 

where there exist facts not used as the 

basis for a previous final determination. 

Any such additional repayment 

determination will be made in 

accordance with the provisions of this 

section.

(g) Newly-discovered assets. If, after 

any initial or final repayment 

determination made under this section, 

a candidate or his or her authorized 

committee(s) receives or becomes aware 

of assets not previously included in any 

statement of net outstanding campaign 

obligations submitted pursuant to 11 

CFR 9034.5, the candidate or his or her 

authorized committee(s) shall promptly 

notify the Commission of such newlydiscovered assets. Newly-discovered 

assets may include refunds, rebates, 

late-arriving receivables, and actual 

receipts for capital assets in excess of 

the value specified in any previouslysubmitted statement of net outstanding 

campaign obligations. Newly-discovered 

assets may serve as a basis for 

additional repayment determinations 

under 11 CFR 9038.2(f).

(h) Petitions for rehearing; stays

pending appeal. The candidate may file 

a petition for rehearing of a final 

repayment determination in accordance 

with 11 CFR 9038.5(a). The candidate 

may request a stay of a final repayment 

determination in accordance with 11 

CFR 9038.5(c) pending the candidate’s 

appeal of that repayment determination.

§ 9038.3 Liquidation of obligations;

repayment

(a) The candidate may retain amounts 

received from the matching payment 

account for a period not exceeding 6 

months after the matching payment 

period to pay qualified campaign 

expenses incurred by the candidate.

(b) After all obligations have been 

liquidated, the candidate shall so inform 

the Commission in writing.

(c) (1) If on the last day of candidate 

eligibility the candidate’s net 

outstanding campaign obligations, as 

defined in 11 CFR 9034.5, reflect a 

surplus, the candidate shall within 30 

calendar days of the ineligibility date 

repay to the Secretary an amount which 

represents the amount of matching funds 

contained in the candidate’s surplus.

The amount shall be an amount equal to 

that portion of the surplus which bears 

the same ratio to the total surplus that 

the total amount received by the 

candidate from the matching payment 

account bears to the total deposits made 

to the candidate’s accounts.

(2) For purposes of this section, total 

deposits shall be considered all deposits 

to all candidate accounts minus 

transfers between accounts, refunds, 

rebates, reimbursements, checks 

returned for insufficient funds, proceeds 

of loans and other similar amounts.

(3) Notwithstanding the payment of 

any amounts to the United States 

Treasury under this section, the
23910 Federal Register / Vol. 52, No. 106 / W ednesday, June 3, 1387 / Rules and Regulations

Commission may make surplus 

repayment determination(s) which 

require repayment in accordance with 

11 CFR 9038.2.

§ 9038.4 Extensions o f tim e.

fa) It is the policy of the Commission 

that extensions of time under 11 CFR 

Part 9038 shall not he routinely granted.

(b) Whenever a candidate has a right 

or is required to take action within a 

period of time prescribed by 11 CFR Part 

9038 or by notice given thereunder, the 

candidate may apply in writing to the 

Commission for an extension of time in 

which to exercise such right or take such 

action. The candidate shall demonstrate 

in the application for extension that 

good cause exists for his or her request

(cl An application for extension of 

time shall be made at least 7 calendar 

days prior to the expiration of the time 

period for which the extension is sought 

The Commission may, upon a showing 

of good cause, grant an extension of 

time to a candidate who has applied for 

such extension in a timely manner. The 

length of time of any extension granted 

hereunder will be decided by the 

Commission and may be less than the 

amount of time sought by the candidate 

in his or her application.

(d) If a candidate fails to seek an 

extension of time, exercise a right or 

take a required action prior to the 

expiration of a time period prescribed 

by 11 CFR Part 9038 the Commission 

may, on the candidate’s showing of 

excusable neglect:

(1) Permit such candidate to exercise 

his or her right(s), or take such required 

action(s) after the expiration of the 

prescribed time period; and

(2J Take into consideration any 

information obtained in connection with 

the exercise of any such right or taking 

of any such action before making 

decisions or determinations under 11 

CFR Part 9038.

§ 9038.5 Petitions for rehearing; stays of

repayment determinations.

(a) Petitions for rehearing. (1} 

Following the Commission’s final 

determination under 11 CFR 9033.10 or 

9034.5(g) or the Commission’s final 

repayment determination under 11 CFR 

9038.2(c)(4)1, the candidate may file a 

petition for rehearing setting forth the 

relief desired and the legal and factual 

basis m support. To be considered by 

the Commission, petitions for rehearing 

must:

(i) Be filed within 20 calendar days 

after service of the Commission’s final 

determination;

(ii) Raise new questions of law or fact 

that would materially alter the 

Commission’s final determination; and

(iii) Set forth clear and convincing 

grounds why such questions were not 

and could not have been presented 

during the earlier determination process.

(2) If a candidate files a timely 

petition under this section challenging a 

Commission final repayment 

determination, the time for repayment of 

the amount at issue will be suspended 

until the Commission serves notice on 

the candidate of its determination on the 

petition. The time periods for making 

repayment under 11 CFR 9038.2Cd)(2) 

shall apply to any amounts determined 

to be repayable following the 

Commission’s consideration of a petition 

for rehearing under this section.

(b) Effect o f failure to raise issues.

The candidate’s failure to raise an 

argument in a timely fashion during the 

initial determination process or in a 

petition for rehearing under this section, 

as appropriate, shall be deemed a 

waiver of the candidate’s right to 

present such arguments in any future 

stage of proceedings including any 

petition for review filed under 26 U.S.C. 

9041(a). An issue is not timely raised in 

a petition for rehearing if it couM have 

been raised earlier in response to the 

Commission’s initial determination.

(c) Stay o f repayment determination

pending appeal (l)(i) The candidate 

may apply to die Commission for a stay 

of all or a portion of the amount 

determined to be repayable under this 

section or under 11 CFR 9038.2 pending 

the candidate’s appeal of that 

repayment determination pursuant to 26 

U.S.C. 9041(a). The repayment amount 

requested to be stayed shall not exceed 

the amount at issue on appeal.

(ii) A request for a stay shall be made 

in writing and shall be filed within 30 

calendar days after service of the 

Commission’s decision on a petition for 

rehearing under paragraph (a), or, if no 

petition for rehearing is filed, within 30 

calendar days after service of the 

Commission’s final repayment 

determination under 11 CFR 9038.2(cK4).

(2) The Commission’s approval of a 

stay request will be conditioned upon 

the candidate’s presentation of evidence 

in the stay request that he or she:.

(i) Has placed the entire amount at 

issue in a separate interest-bearing 

account pending the outcome of the 

appeal and that withdrawals from the 

account may only be made with the joint 

signatures of the candidate or his or her 

agent and a Commission representative; 

or

(ii) Has posted a surety bond 

guaranteeing payment of the entire 

amount at issue plus interest; or

(iii) Has met the following criteria:

(A) He or she will suffer irreparable 

injury in the absence of a stay; and, if 

so, that

(B) He or she has made a strong 

showing of the likelihood of success on 

the merits of the Judicial action.

(C) Such relief is consistent with the 

public interest; and

(D) No other party interested in the 

proceedings would be substantially 

harmed by the stay.

(3) In determining whether the 

candidate has made a strong showing of 

the likelihood of success on the merits 

under paragraph (c)(2)(in)(B) of this 

section, the Commission may consider 

whether the issue on appeal presents a 

novel or admittedly difficult legal 

question and whether the equities of the 

case suggest that the status quo should 

be maintained.

(4) All stays shall require the payment 

of interest on the amount at issue. The 

amount of interest due shall be 

calculated from the date 30 days after 

service of the Commission’s final 

repayment determination under 11 CFR 

9038.2(c)(4) and shall be the greater of:

(i) An amount calculated in 

accordance with 28 U.S.C. 1961 (a) and 

(b); or

(ii) The amount actually earned on the 

funds set aside under this section.

§ 9038.6 S tale-dated com m ittee checks.

If the committee has checks 

outstanding to creditors or contributors 

that have not been cashed, the 

committee shall notify the Commission. 

The committee shall inform the 

Commission of its efforts to locate the 

payees, if such efforts have been 

necessary, and its efforts to encourage 

the payees to cash the outstanding 

checks. The committee shall also submit 

a check for the total amount of such 

outstanding checks, payable to the 

United States Treasury.

PART 9039—-REVIEW AND

INVESTIGATION AUTHORITY

Sec.

9039.1 Retention of books and records.

9039.2 Continuing review.

9039.3 Examinations and audits; 

investigations.

Authority: 26 U.S.C. 9039.

§ 9039.1 R etention o f books and records.

The candidate and his or her 

authorized committee(s) shall keep all 

books, records and other information 

required under 11 CFR 9033.11, 9034.2 

and Part 9036 for a period of three years 

pursuant to 11 CFR 102.9(c) and shall 

furnish such books, records and 

information to the Commission on 

request.
20911 Federal Register / Vol. 52, No. 106 / Wednesday, June 3, 1987 / Rules and Regulations

§ 9039.2 Continuing review.

(a) In reviewing candidate 

submissions made under 11 CFR Part 

9036 and in otherwise carrying out its 

responsibilities under this subchapter, 

the Commission may routinely consider 

information from the following sources:

(1) Any and all materials and 

communications which the candidate 

and his or her authorized committee(s) 

submit or provide under 11 CFR Part 

9036 and in response to inquiries or 

requests of the Commission and its staff;

(2) Disclosure reports on file with the 

Commission; and

(3) Other publicly available 

documents.

(b) In carrying out the Commission’s 

responsibilities under this subchapter, 

Commission staff may contact 

representatives of the candidate and his 

or her authorized committee(s) to 

discuss questions and to request 

documentation concerning committee 

activities and any submission made 

under 11 CFR Part 9036.

§ 9039.3 Examinations and audits;

investigations.

(a) General. (1) The Commission will 

consider information obtained in its 

continuing review under 11 CFR 9039.2 

in making any certification, 

determination or finding under this 

subchapter. If the Commission decides 

by an affirmative vote of four of its 

members that additional information 

must be obtained in connection with any 

such certification, determination or

finding, it will conduct a further inquiry. 

A decision to conduct an inquiry under 

this section may be based on 

information that is obtained under 11 

CFR 9039.2, received by the Commission 

from outside sources, or otherwise 

ascertained by the Commission in 

carrying out its supervisory 

responsibilities under the Presidential 

Primary Matching Payment Account Act 

and the Federal Election Campaign Act.

(2) An inquiry conducted under this 

section may be used to obtain 

information relevant to candidate 

eligibility, matchability of contributions 

and repayments to the United States 

Treasury. Information obtained during 

such an inquiry may be used as the 

basis, or partial basis, for Commission 

certifications, determinations and 

findings under 11 CFR Parts 9033, 9034, 

9036 and 9038. Information thus 

obtained may also be the basis of, or be 

considered in connection with, an 

investigation under 2 U.S.C. 437g and 11 

CFR Part 111.

(3) Before conducting an inquiry under 

this section, the Commission will 

attempt to obtain relevant information 

under the continuing review provisions 

of 11 CFR 9039.2. Matching payments 

will not be withheld pending the results 

of an inquiry under this section unless 

the Commission finds patent 

irregularities suggesting the possibility 

of fraud in materials submitted by, or in 

the activities of, the candidate or his or 

her authorized committee(s).

(b) Procedures. (1) The Commission 

will notify the candidate of its decision 

to conduct an inquiry under this section. 

The notice will summarize the legal and 

factual basis for the Commission’s 

decision.

(2) The Commission’s inquiry may 

include, but is not limited to, the 

following:

(i) A field audit of the candidate’s 

books and records;

(ii) Field interviews of agents and 

representatives of the candidate and his 

or her authorized committee(s);

(iii) Verification of reported 

contributions by contacting reported 

contributors;

(iv) Verification of disbursement 

information by contacting reported 

vendors;

(v) Written questions under order;

(vi) Production of documents under 

subpoena;

(vii) Depositions.

(3) The provisions of 2 U.S.C. 437g and 

11 CFR Part 111 will not apply to 

inquiries conducted under this section 

except that the provisions of 11 CFR 

111.12 through 111.15 shall apply to any 

orders or subpoenas issued by the 

Commission.

Dated: May 26,1987.

Scott E. Thomas,

Chairman, Federal Election Commission.

[FR Doc. 87-12281 Filed 6-2-87; 8:45 am] 

BILLING CODE 6715-01-M