November 1999 Federal Election Commission Volume 25, Number 7

Table of Contents

Regulations

1 Rules on LLCs Take Effect

1 Campaign Finance Disclosure by

PACs

Court Cases

2 FEC v. Public Citizen

4 FEC v. Friends of Jane Harman

4 FEC v. Dave Gentry for Congress

Committee

 4 Advisory Opinions

Statistics

 7 Mid-Year Reports Show Increase

in Fundraising for Parties, Senate

and House

 8 Public Appearances

Legislation

 8 Appropriations Bill Makes

Amendments to FECA

Information

 8 Second Report on Status of PwC

Audit Recommendations

Submitted to Congress

 9 Federal Register

Outreach

 9 Monthly Roundtable Sessions

 10 Conference Schedule

Public Funding

10 Buchanan, Gore, Keyes and

LaRouche Eligible for Matching

Funds

 10 Index

New Rules Governing

Contributions by LLCs Take

Effect

The FEC’s new rules regarding

contributions by Limited Liability

Companies (LLCs) will become

effective on November 12, 1999.

See Federal Register Announcement of Effective Date (64 FR

55125, October 12, 1999).

The new rules follow the Internal

Revenue Service’s “check the box”

approach in classifying LLCs.

Under the new rules, an LLC will be

treated as a partnership under the

Federal Election Campaign Act (the

Act) unless it opts to be treated as a

corporation for tax purposes.

Consistent with the IRS’s approach,

publicly traded LLCs will also be

treated as corporations under the

Act.

See page 1 of the August 1999

Record for a more detailed discussion of these new rules. Alternatively, you may obtain a free copy

of the final rules as they appeared in

the Federal Register (64 FR 37397,

July 12, 1999) through the FEC

Faxline. Dial 202/501-3413 and

request document 236.✦

Regulations

 (continued on page 2)

Comments Sought on

Changes to Campaign

Finance Disclosure by PACs

On October 5, 1999, the Commission approved for publication a

Notice of Availability relating to its

regulations governing campaign

finance disclosure by PACs. 11

CFR 100.6, 102.9(a)(3), 100.12,

104.8(d)(4) and 104.13. The notice

invites comments on a petition for

rulemaking submitted to the FEC by

the Project on Government Oversight (POGO).

The petition urges the Commission to take six actions with regard

to reports filed by PACs. It is based

on a March 5, 1998, POGO Report

entitled Re-Establishing Institutional Integrity at the FEC: Ten

Common Sense Campaign Finance

Disclosure Reforms.

Commission regulations at 11

CFR 200.2(b)(3) require rulemaking

petitions to “identify the specific

section(s) of the regulations to be

affected.” Two of the requested

changes and portions of two others

address internal Commission

procedures, and therefore do not

comply with this requirement. One

requests the Commission to group

its data by two and six-year campaign cycles. A second requests the

Commission to eliminate duplicate

entries on its databases. A third

requests the Commission to compare PAC disbursements with
Federal Election Commission RECORD November 1999

2

Federal Election Commission

999 E Street, NW

Washington, DC 20463

800/424-9530

202/694-1100

202/501-3413 (FEC Faxline)

202/219-3336 (TDD for the

 hearing impaired)

800/877-8339 (FIRS)

Scott E. Thomas, Chairman

Darryl R. Wold, Vice Chairman

Lee Ann Elliott, Commissioner

David M. Mason, Commissioner

Danny L. McDonald,

 Commissioner

Karl J. Sandstrom, Commissioner

James A. Pehrkon, Staff Director

Lawrence M. Noble, General

 Counsel

Published by the Information

 Division

Louise D. Wides, Director

Jennifer A. Han, Editor

http://www.fec.gov

Regulations

(continued from page 1) Court Cases

candidate receipts. A final

recommended procedural change

addresses Commission procedures

after the agency is notified of a

returned contribution.

The remaining portions of the

Petition propose the following

regulatory changes:

• Revise 11 CFR 100.6 to require

Federal PACs to list any soft

money account to which they

forward checks as an affiliated

organization on their Statement of

Organization;

• Revise 11 CFR 102.9(a)(3) to

require candidates who receive

PAC contributions to maintain

records that list the full name of

the PAC and the PAC’s FEC

identification number;

• Revise 11 CFR 100.12 to require

political committees who receive

PAC contributions to include the

PAC’s full name, address and FEC

identification number in their

reports to the Commission;

• Revise 11 CFR 104.8(d)(4) to

require PACs to notify the Commission within ten days of receiving a returned contribution; and

• Revise 11 CFR 104.13 to require

PACs to notify the Commission

within ten days of any in-kind

contribution.

The Notice of Availability seeks

comments on whether the FEC

should initiate a rulemaking in

response to the petition. The

Commission routinely provides an

opportunity for comments on

rulemaking petitions before the

agency considers the merits of the

petition.

The petition and notice are

available from the Public Records

Office at 800/424-9530 (press 3) or

202.694-4140; through the FEC’s

Faxline at 202/501-3413 (document

243); and at the FEC’s web site—

www.fec.gov (click on Campaign

Finance Law Resources). The

notice was published in the Federal

Register on October 13, 1999. 64

FR 55440.

Public comments must be submitted in either written or electronic

form to Rosemary C. Smith, Acting

Assistant General Counsel. Written

comments should be mailed to the

Federal Election Commission, 999

E St., NW, Washington, DC 20463.

Faxed comments should be transmitted to 202/219-3923, with a copy

mailed to the preceding address to

ensure legibility. Comments also

may be sent via e-mail to

PACreports@fec.gov. Electronic

submissions must include the

commenter’s full name, e-mail

address and postal mail address.

The deadline for comments is

November 12, 1999.✦

FEC v. Public Citizen, Inc.,

et al.

On September 15, 1999, the U.S.

District Court for the Northern

District of Georgia, Atlanta Division, dismissed an enforcement case

brought by the Federal Election

Commission (the FEC or Commission) against Public Citizen, Inc.,

and it separate segregated fund,

Public Citizen’s Fund for a Clean

Congress (the Fund).

The Commission had alleged that

the Fund had violated section 441b

of the Federal Election Campaign

Act (the Act) by making excessive

in-kind contributions to Herman

Clark, a 1992 primary opponent of

former Representative Newt

Gingrich. The Commission maintained that the contributions resulted

from the fact that the Fund had

coordinated several expenditures,

made in opposition to Mr. Gingrich,

with the Clark campaign. The court

ruled that the expenditures were

permissible independent expenditures—not coordinated expenditures.

The court also ruled in favor of

the Fund on eight other charges

brought against it, including charges

that, in some or all cases, it failed to:

• Report expenditures as contributions;

• Indicate, in disclaimers, whether

its television advertisement and

flyers were authorized by a

candidate;

• Inform contributors about the

political purpose of the fund;

• Inform contributors of their right

to refuse to contribute without

reprisal; and

• Inform contributors that a checklist

for donations, reading “$20, $40,

$50, OTHER,” was merely a

suggestion.
November 1999 Federal Election Commission RECORD

3

Background

Public Citizen, Inc. (Public

Citizen) is an incorporated, nonprofit membership organization. It

created the Fund in 1992. The

Fund, in turn, sponsored several

communications that opposed Newt

Gingrich in the 1992 primary for

Georgia’s Sixth Congressional

District: a television ad, a direct

mailing and a series of flyers—all of

which urged voters to “Boot Newt”

in the upcoming primary.

Coordination

The FEC alleged that the expenditures against Mr. Gingrich,

totaling $59,200, were not independent expenditures but, rather, were

coordinated expenditures, which

resulted in excessive contributions

on behalf of Mr. Gingrich’s opponent, Mr. Clark. 2 U.S.C.

§441a(a)(1)(A).

The Act defines independent

expenditure as an expenditure which

expressly advocates the election or

defeat of a clearly identified candidate and which is not made in

concert with, or at the request or

suggestion of, the candidate or the

campaign. 2 U.S.C. §431(17).

FEC regulations elaborate on this

definition. They add the following

presumption:

“An expenditure will be presumed to be so made [in cooperation

with the campaign] when it is based

on information about the candidate’s

plans, projects, or needs provided to

the expending person by the candidate, or by the candidate’s agents

with a view toward having an

expenditure made.” 11 CFR

109.1(b)(4)(i)(A).

The Commission had argued that

repeated contacts between the Fund

and representatives of Mr. Clark’s

campaign constituted coordination.

The court disagreed.

The court held that, “even

construed most favorably for the

FEC,” the evidence did not support

the allegation that the expenditures

by the Fund were coordinated with

the Clark campaign. Coordination,

the court stated, implies “‘some

measure of collaboration beyond a

mere inquiry as to the position taken

by a candidate on an issue.’”1

The court ruled that, because the

expenditures had not been coordinated with the Clark campaign, the

Fund did not need to report them as

contributions.

Disclaimers

The FEC alleged that the Fund

failed to include the disclaimer

required by 2 U.S.C. §441d(a) in the

“Boot Newt” television advertisement or in the “Boot Newt” flyers.

The statute states that, whenever

a person makes an independent

expenditure (see definition above),

the communication must disclose

both the name of the person who

paid for the communication and the

fact that the communication was not

authorized by the candidate or his/

her committee.

Although the Clark campaign

identified who paid for the ads, it

did not include a disclaimer stating

whether or not the communications

had been authorized by a candidate.

Based on a 6th Circuit decision,2

the court found that the disclaimer

requirement was broader than

necessary to achieve the

government’s interests in notifying

the public of the source of campaign

funds, in preventing actual and

perceived corruption in the political

process, and in creating a

recordkeeping method to detect

violations of the Act’s contribution

limitations—interests identified by

the Supreme Court in Buckley v.

Valeo. The court stated that the

disclaimer used by the Fund, which

stated that the ads were paid for by

the Fund, was sufficient to accomplish all three of the government’s

objectives. The additional requirement that the disclaimer identify

whether the communication was

authorized by any candidate or

candidate’s committee, the court

said, violated the Fund’s First

Amendment rights.

Special Fundraising Notices by

Corporations and Labor

Organizations

Purpose and Rights. The FEC

alleged that the Fund’s solicitation

letters failed to make adequate

disclosures required by the Act.

First, two letters violated 2 U.S.C.

§441b(b)(3)(B) and 11 CFR

114.5(a)(3) by failing to inform

solicitees of the political purposes of

the Fund. One solicitation stated

that the Fund planned to vote out

targeted incumbents by using

“everything—T.V., radio, door-todoor canvassing—to let their

constituents know what their

members of Congress have been up

to for the past few years.” In

another solicitation, the Fund asked

for solicitees’ help “to tackle nine

other House members.” The court

stated that it was uncertain how the

Fund could have been more explicit

in stating the political purpose of

their solicitation, and concluded that

the letter did not violate 2 U.S.C.

§441b(b)(3)(B).

Additionally, the FEC alleged

that both letters violated 2 U.S.C.

§441b(b)(3)(C) and 11 CFR

114.5(a)(4) by failing to inform

solicitees of their right to refuse to

contribute to the Fund without

reprisal. The court dismissed this

charge, stating that the purpose of

the notice was “to prevent organizations with economic leverage over

employees or members from using

that leverage to coerce involuntary

donations.” It was nonsensical, the

1 Clifton v. Federal Election Commission, 114, F.3d 1309, 1311 (1st Cir.

1997), citing Buckley V. Valeo, 424

U.S. 1, 46-47 and n.53 96 S.Ct. 612,

647-48 and n. 53 46 L.Ed.2d 659

(1976).

2 Kentucky Right to Life, Inc. v. Terry,

108 F.3d 637, 647-48 (6th Cir. 1997).

 (continued on page 4)
Federal Election Commission RECORD November 1999

4

court stated, for Public Citizen, a

purely voluntary, nonprofit membership organization, to include such a

disclaimer since it controlled no

benefits that could be denied to its

individual members.

Lastly, the FEC alleged that the

Fund violated 2 U.S.C.

§441b(b)(3)(C) and 11 CFR

114.5(a)(2), which requires that,

when a corporation suggests a

contribution guideline in a solicitation for its separate segregated fund,

the solicitees must be informed that

the guidelines are merely suggestions and that solicitees are free to

contribute more or less than the

suggested amount. The court found

that the Fund’s solicitation included

an alternative called “other,”

making it clear to the solicitee that

the listed amounts were suggestions

only. Therefore, the court stated,

the letter was not violative of the

Act.✦

Court Cases

(continued from page 3)

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Record Available on

the Internet

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other issues of the Record starting

with January 1996 are available

through the Internet as PDF files.

Visit the FEC’s World Wide Web

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

click on “What’s New” for this

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will need Adobe® Acrobat®

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a link that will take you to Adobe’s

web site, where you can download

the latest version of the software

for free.

FEC v. Friends of Jane

Harman

On October 19, 1999, the FEC

appealed this case to the U.S. Court

of Appeals for the Ninth Circuit.

The U.S. District Court for the

Central District of California,

Western Division, had ruled in favor

of the FEC, finding that Friends of

Jane Harman had violated 2 U.S.C.

§441b(a), but had denied any

remedy for the violations found.

The FEC is appealing the district

court’s denial of remedy. See the

October 1999 Record, p. 4, and the

November 1998 Record, p. 3.✦

FEC v. Dave Gentry for

Congress Committee, et. al.

On September 28, 1999, the U.S.

District Court for the Middle

District of Florida, Orlando Division, found in a default judgment

that the Dave Gentry for Congress

Committee (the Committee) and its

treasurer violated the Federal

Election Campaign Act (the Act)

when they failed to comply with the

Act’s reporting requirements. Mr.

Gentry was defeated in the 1996

general election for Florida’s 5th

congressional district.

The Committee and its treasurer

violated 2 U.S.C. §§434(a)(2)(A)(i),

(ii) and (iii) and 434(a)(2)(B)(ii) by

failing to file five reports of receipts

and disbursements until after the

deadlines established by the Act.1

Specifically, they failed to file the

reports listed below in a timely

manner.

• The 1995 Year End Report

• The April 1995 Quarterly Report

• The July 1996 Quarterly Report

• The 1996 12 Day Pre-Primary

Report

1 For further information on filing FEC

reports, refer to the Campaign Guide

for Congressional Candidates and

Committees, pp.35-37.

• The 1996 30 Day Post-General

Election Report

The court ordered the Committee

and its treasurer to pay a civil

penalty of $25,000 to the FEC

within fifteen days of the final order

and default judgment.✦

Advisory

Opinions

AO 1999-20

Solicitation of Insurance

Agents by Corporation

The Equitable Companies, Inc.,

Political Action Committee (EQUIPAC) may change its official name

to Equitable Life Assurance Society

of the United States Political Action

Committee to reflect the full name

of its connected organization.

Further, it may continue to use its

current acronym. The insurance

agents of its connected organization,

Equitable Life Assurance Society of

the United States (Equitable Life),

may not be solicited for contributions to EQUI-PAC.

Committee Name

Commission regulations state that

the name of any separate segregated

fund (SSF) must include the full

name of its connected organization.

11 CFR 102.14(c). An SSF established by a subsidiary does not need

to include the name of its parent or

another subsidiary of its parent in its

name. In this case, the committee is

required to use the full name of its

connected organization in its name,

but it does not have to use the name

of the holding company (soon to be

called AXA Financial, Inc.) that

owns Equitable Life, the connected

organization. EQUI-PAC may,

therefore, change its official name to

Equitable Life Assurance Society of

the United States PAC.
November 1999 Federal Election Commission RECORD

5

The regulations permit an SSF to

use a clearly recognized abbreviation or acronym provided that the

SSF uses both the abbreviation (or

acronym) and the full official name

in its Statement of Organization, in

all reports filed by the SSF and in all

disclaimer notices. 11 CFR

102.14(c); see also Advisory

Opinions 1993-7 and 1987-26. In

this case, the appearance of EQUI in

public materials (e.g., Web site)

supports the claim that the acronym

is clearly recognized. Consequently, Equitable Life may use

EQUI-PAC as a PAC abbreviation.

Solicitation of Insurance Agents

Under the Federal Election

Campaign Act (the Act), a corporation or its SSF may solicit contributions to the SSF from its

stockholders and their families and

from its executive and administrative personnel and their families. 2

U.S.C. §441b(b)(4)(A). Commission regulations provide that individuals paid on a commission basis

may be considered employees only

if the corporation withholds income

taxes from their wages. 11 CFR

114.1(c)(3). The Equitable Life

insurance agents are paid on commission. Since, however, they are

not subject to income tax withholdAO 1999-22

Use of Merchant ID Number

to Collect Internet

Contributions Submitted for

Matching Payment

Aristotle Publishing, Inc.

(Aristotle) may use its own merchant ID number to collect credit

card contributions for its clients via

the Internet. It may not, however,

use a single merchant ID number for

contributions to Presidential campaigns that are to be submitted for

Federal matching payments.

Aristotle’s overall plan to help

political committees and candidates

raise funds through the Internet is

permissible. See details below.

Basic Plan for Internet

Contributions

Screening Contributions. A

candidate utilizing Aristotle’s

Internet contributions service

downloads the software from

Aristotle’s Web site at the

candidate’s own expense. Internet

contributions are then screened for

impermissible or nonmatchable

contributions through a series of

measures.

First, through the candidate’s

Web site, contributors view the

contribution solicitation form,

informing them of the contribution

limits and source restrictions of the

Federal Election Campaign Act

(Act).

Second, a prospective donor will

be required to provide detailed

information, including:

• The contributor’s name;

• The contributor’s name as it

appears on the card;

• The billing address on record with

the issuer of the card;

• The card number;

• The expiration date;

• The contributor’s mailing address;

and

• The amount of the contribution.

The FEC Takes Visa and Mastercard

 FEC customers can pay for FEC materials with Visa or Mastercard. Most

FEC materials are available free of charge, but some are sold, including

financial statistical reports ($10 each), candidate indexes ($10) and PAC

directories ($13.25). The FEC also has a 5¢ per page copying charge for paper

documents and a 15¢ per page copying charge for microfilmed documents.

 Paying by credit card has its advantages. For instance, since the FEC will not

fill an order until payment is received, using a credit card speeds delivery by

four to five days.

 Visitors to the FEC’s Public Records Office may make payments by credit

card. Regular visitors, such as researchers and reporters, who in the past have

paid for FEC materials out of their own pockets, may make payments with a

company credit card.

 The credit card payment system also reduces costs and paperwork associated

with check processing, enabling FEC staff to better serve the walk-in visitor.

ing (even though they are subject to

FICA and receive benefits from

Equitable Life), they cannot be

solicited as members of the executive or administrative class.

FEC regulations state that a

corporation may also make two

written SSF solicitations to all of its

employees and their families,

regardless of whether these employees are stockholders or executive

personnel. 11 CFR 114.6. Again,

since the agents are not subject to

income tax withholding, they may

not be solicited under the twice

yearly solicitation procedures for

nonexecutive employees.

Issued: September 30, 1999;

Length: 6 pages.✦

 (continued on page 6)
Federal Election Commission RECORD November 1999

6

the campaigns in accordance with

the time requirements of the Act.

Recordkeeping. Aristotle will

provide committees with:

• The committee’s account number;

• The contributor’s name and

address;

• The contributor’s employer and

occupation;

• The date and total amount of the

contribution;

• The unique contribution confirmation number; and

• The address verification used

(billing address and zip code; also

voter record matches if applicable).

Aristotle will retain all contributor-supplied information, records of

each deposit into each political

committee account, and records of

transfers to each political committee. Aristotle affirms that it will

make such records available at the

Commission’s request or as otherwise required by law.

Use of Aristotle’s Merchant ID

Number. As part of the transaction

described above, Aristotle will use

its own “merchant ID number” for

clients for whom it is collecting and

forwarding credit card contributions.

(Aristotle does not help campaigns

obtain their own merchant ID

numbers for the various credit cards

they use. ) Each contributor will be

notified in the “real time” confirmation that the credit card bill will

reflect a contribution processed

through

“campaigncontribution.com”—not

the name of the committee.

Cost of Service. The company

will receive, as its fee, a negotiated

percentage of the contributions.

Depending on the terms of the

contract, the company or the campaign will pay the credit card

processing fee. The company will

pay other transaction-based fees

associated with collecting and

forwarding the funds. The amount

of such fees will be directly related

to the volume of contributions

received by a campaign.

Such costs, along with costs

associated with account servicing,

recordkeeping, accounting, billing

review and legal review, will

normally be included in overhead

and will be covered by the fees

deducted by Aristotle from actual

contributions received. The pricing

for each committee will include

allowance for an adequate profit.

Commission Analysis of the Basic

Plan. The screening procedures in

Aristotle’s plan are well within the

“safe harbor” discussed in Advisory

Opinion 1999-9 for matching

contributions. See the July 1999

Record, p.5. They permit the

committee to rely on Aristotle’s

services to submit evidence that the

contributor affirmed that the contribution came from personal funds.

Aristotle’s plan provides for

adequate compensation, and its

procedures will be in the normal

course of business for a vendor

within its industry dealing with a

similarly situated, nonpolitical

client. With these arrangements, the

vendor will avoid providing services

to a political committee without

charge or at less than the usual and

normal charge—which would result

in a prohibited corporate contribution.

Aristotle’s proposal to place

contributions raised through the

Internet in a banking account

separate from the corporation’s own

funds and to maintain separate book

accounts for each political customer

ensures that there will be no commingling of corporate and campaign

funds. The Commission also noted

Aristotle’s intention to use FDICinsured depository institutions for

these accounts and to provide the

treasurers of its political committee

clients with the identity of the

depository bank which, in turn, the

committees would disclose to the

Commission. In light of these

precautions, for contributions that

Third, if a prospective donor fails

to provide all of the required

information or fails to check any of

the attestation boxes,1

 the contribution will be rejected. The contributor will then be prompted to either

correct the omission or inaccurate

information, or cancel the transaction.

Fourth, any contribution to a

candidate in excess of $1,000 will

be rejected at the Web site.

Fifth, all contributor names will

be matched against a nationwide file

of public voter registration records.

Processing Contributions. Once

the online form has been completed,

the donor transmits it for “real time”

processing. The credit card data is

sent directly to the credit processing

company, which cross-checks the

submitted information with the

processing company’s own records.

The processing company then sends

a message to the contributor notifying him or her that the contribution

has been rejected or approved.

All approved contributions are

deposited into a bank account

established by Aristotle exclusively

for political committee proceeds.

This account is not only separate

from Aristotle’s other corporate

accounts, but is also maintained at

an entirely different financial

institution. To facilitate any audit

process and to avoid commingling

committee proceeds with Aristotle’s

corporate funds, Aristotle will

maintain separate book accounts for

each political customer. All Internet

contributions will be forwarded to

1 Prospective donors will be required

to check off an attestation box, affirming that they have been made aware of

the Act’s contribution limits and source

restrictions. For candidates who do not

wish to accept contributions from

minors, Aristotle will include an

additional attestation that the contributor is at least 18 years old.

Advisory Opinions

(continued from page 5)
November 1999 Federal Election Commission RECORD

7

Need FEC Material

in a Hurry?

 Use FEC Faxline to obtain FEC

material fast. It operates 24 hours

a day, 7 days a week. More than

300 FEC documents—reporting

forms, brochures, FEC

regulations—can be faxed almost

immediately.

 Use a touch tone phone to dial

202/501-3413 and follow the

instructions. To order a complete

menu of Faxline documents, enter

document number 411 at the

prompt.

are not submitted under the Matching Fund Act, the use of Aristotle’s

own merchant ID to collect contributions for multiple clients is

permissible under the Act.

Matching Fund Payments

Through Internet

For purposes of federal matching

payments,2

 a contribution is a gift of

money made by a written instrument

that identifies the person making the

contribution. 11 CFR 9034.2.

In the case of a contribution made

over the Internet, a “written instrument” is an electronic record of the

transaction created and transmitted

by the credit cardholder that can be

maintained electronically and

reproduced in a written form by the

recipient candidate or candidate’s

committee. 11 CFR 9034.2(b). A

written instrument, for these purposes, includes the name of the

cardholder and the card number.

Contributions by credit or debit

card are matchable contributions

provided that the committee can

provide evidence that the contributor has affirmed that the contribution is from personal funds and not

from sources prohibited by law. 11

CFR 9034.2(c)(8)(ii).

Aristotle may not use its own

merchant ID number for contributions to Presidential campaigns that

will be submitted for Federal

matching payments. Regulations

for matchable contributions emphasize the identification of the committee receiving the contribution.

The regulations implementing the

Matching Act require that the

instrument conveying the contribution be “payable on demand; and to

the order of, or specifically endorsed

without qualification to the Presidential candidate, or his or her

2 Partial public funding is available to

Presidential primary candidates in the

form of matching payments. The

federal government will match up to

$250 of an individual’s total contribution to an eligible candidate.

authorized committee.” 11 CFR

9034.2(b). This requirement is

necessary as a means of assuring not

only that the contributor intends to

make a campaign contribution, but

also that the contributor intends his

or her money to go to the specific

candidate named on the credit card

bill, as opposed to a different

candidate who may also be doing

business with the same vendor.

When Aristotle uses its own merchant ID, the name of the committee

receiving the contribution is not

itemized on the monthly credit card

bill received by the contributor.

Without such disclosure on the bill,

the contributor cannot review his or

her contribution to verify the

amount, date or other information

regarding the use of a particular card

to make the contribution.

Issued: September 23, 1999;

Length: 12 pages.✦

Advisory Opinion Requests

Advisory opinion requests are

available for review and comment in

the Public Records Office.

AOR 1999-28

Solicitation of PAC contributions from—and sending election

advocacy communications to—

restricted class of foreign corporation and its U.S. subsidiaries by one

of U.S. subsidiaries (BacardiMartini USA, Inc., September 15,

1999; 17 pages)

AOR 1999-29

Fundraising exemption from state

expenditure limit for direct mailing

sent by Presidential campaign more

than 28 days before primary or

caucus (Bill Bradley for President,

Inc., October 12, 1999; 2 pages)✦

Statistics

Midyear Disclosure Reports

Show Increase in

Fundraising Activity for

Party Committees, Senate

and House

Midyear disclosure reports filed

by the two major political parties

and Senate and House candidates

show an increase in fundraising

activity when compared to the sixmonth filings in past cycles.

Major Political Parties Show

Large Gain in ‘Soft Money’

Contributions

Republican and Democratic party

committees continued to raise

record amounts of soft money.

Republicans raised $30.9 million in

soft money for the first six months

of this year, a 42 percent increase

when compared to the first six

months of the 1997-98 election

cycle. Democrats raised $26.4

million, a 93 percent increase. Soft

money refers to funds raised outside

the limitations and prohibitions of

the Federal Election Campaign Act.

Soft money, which cannot be used

in connection with federal elections,

must be deposited in separate,

 (continued on page 8)
Federal Election Commission RECORD November 1999

8

Public Appearances

November 2-5, 1999

American Corporate Counsel

Association

San Diego, California

Lawrence Noble, General

Counsel

November 3, 1999

Leadership Institute

Arlington, Virginia

David Mason, Commissioner

nonfederal accounts.

The same reports show that

Republican party committees raised

$66.4 million for federal elections

and spent $56.7 million from their

federal (hard money) accounts,

while the Democrats had receipts of

$38.1 million and expenditures of

$36.1 million. Contributions from

individuals constituted the bulk of

the receipts for both parties.

Six-Month Senate Fundraising

Figures

According to the statistics, 73

candidates competing for 33 Senate

seats in 2000 raised $50 million and

spent $12.2 million during the first

six months of 1999. By contrast, in

1997, 58 candidates raised $42.6

million during the first six months

of the cycle.

Mid-Year House Fundraising

House incumbents (a total of 435)

reported receipts of $77.9 million, a

$25 million increase from the

comparable period for incumbents

in 1997. Total receipts for the

freshmen were also significantly

higher (on a per-candidate basis)

than in previous cycles.

For additional information on any

of the above three topics, visit the

FEC’s Web site (http://

www.fec.gov) or request a copy of

the agency’s three September 22

press releases (call 800/424-9530

Fiscal 2000 Appropriations

Bill Makes Amendments to

FECA

On September 29, 1999, President Clinton signed the fiscal 2000

Appropriations bill. The bill

contains the following three amendments to the Federal Election

Campaign Act:

• Mandatory electronic filing;

• Administrative fine schedule for

certain kinds of reporting violations; and

• Reporting on an election-cycle

basis (as opposed to calendar year

reporting).✦

Second Report to Congress

on Status of

PricewaterhouseCoopers

Recommendations

Following publication of the

PricewaterhouseCoopers audit of

the Federal Election Commission,

the Committee on House Administration, chaired by Representative

Bill Thomas, requested that the

Commission report to the Committee every six months on its progress

in implementing the recommendations contained in the audit. The

second report was sent to the

Committee on September 24, 1999.

The report indicated that, in the

last six months, the Commission had

implemented the following recommendations contained in the audit:

• Set up Internet connections on

several PCs in the Public Records

Division so that the public can

access the FEC web page.

• Prepare and maintain documentation supporting Enforcement

Priority System (EPS) caseactivation decisions.

• Select a permanent Staff Director

tasked to improve overall organizational performance.

• Encourage more collaboration and

communication among existing

work groups.

Copies of the report are available

from the FEC’s Public Records

Office at 800/424-9530 (press 3) or

202/694-1120.✦

Change of Address

Political Committees

 Treasurers of registered political

committees automatically receive

the Record. A change of address

by a political committee (or any

change to information disclosed

on the Statement of Organization)

must, by law, be made in writing

on FEC Form 1 or by letter. The

treasurer must sign the

amendment and file it with the

Secretary of the Senate or the

FEC (as appropriate) and with the

appropriate state office.

Other Subscribers

 Record subscribers who are not

registered political committees

should include the following

information when requesting a

change of address:

• Subscription number (located on

the upper left corner of the

mailing label);

• Subscriber’s name;

• Old address; and

• New address.

 Subscribers (other than political

committees) may correct their

addresses by phone as well as by

mail.

and press 3 for the Public Records

Office or press 5 and ask for the

Press Office).✦

Statistics

(continued from page 7)

Information

Legislation
November 1999 Federal Election Commission RECORD

9

Outreach

Date Subject Intended Audience

November 3 Update on New FEC • Trade/Member PACs

9:30 - 11 a.m. Regulations • Recipients of

• Definition of Member Contributions from

• Contributions from LLCs (e.g., PACs and

Limited Liability Campaigns)

Companies • LLCs

(Code #1199) • Lawyers, Accountants

and Consultants to

Above

Roundtable Schedule

December 1 Reporting • PACs

9:30 - 11 a.m. Requirements for 2000 • House and Senate

• Deadlines Campaigns

• Pitfalls to Avoid • Political Party

(Code #1299) Committees

• Lawyers, Accountants

and Consultants to

Above

January 5 Supporting Presidential • PACs

9:30 - 11 a.m. Candidates • Corporations, Labor

• PAC Contributions Organizations and

• Independent Trade Associations

Expenditures • Lawyers, Accountants

• Internal and Consultants to

 Communications by Above

 Corporations, Labor

 Organizations and

 Trade Associations

(Code #100)

Filled!

Waiting List

Only

Federal Register

Federal Register notices are

available from the FEC’s Public

Records Office.

Notice 1999-19

Treatment of Limited Liability

Companies Under the Federal

Election Campaign Act;

Announcement of Effective Date

(64 FR 55125, October 12, 1999)

Notice 1999-20

Reporting by Political Action

Committees; Rulemaking

Petition; Notice of Availability

(64 FR 55440, October 13, 1999)

FEC Conducts Monthly

Roundtable Sessions

The FEC is conducting monthly

roundtable sessions for the regulated

community at its offices in Washington. The roundtable sessions,

limited to 12 participants per

session, focus on a range of topics.

See the table at right for dates and

topics.

Registration is $25 and will be

accepted on a first-come, firstserved basis. Please call the FEC

before registering or sending money

to be sure that openings remain in

the session of your choice. Prepayment is required. The registration

form is available at the FEC’s Web

site—http://www.fec.gov—and

from Faxline, the FEC’s automated

fax system (202/501-3413, request

document 590). For more information, call 800/424-9530 or 202/694-

1100.

Individuals who have signed up

for a roundtable but who will be

unable to attend are strongly encouraged to call the FEC and cancel

their registration so that the next

person on the waiting list may

attend in their place.✦
Federal Election Commission RECORD November 1999

10

Index

Regional Conference (includes

candidate, corporate/labor and

party workshops)

Date: November 15-17, 1999

Location: San Francisco

(Grand Hyatt)

Registration: $250

Candidate Conference

Date: February10-11, 2000

Location: Washington, DC

(Hyatt Regency Capitol Hill)

Registration: To be determined

Regional Conference (includes

candidate, corporate/labor and

party workshops)

Date: March 8-10, 2000

Location: Miami, FL

(Sheraton Biscayne Bay)

Registration: $240

Corporate and Labor

Conference

Date: April 2000

Location: Washington, DC

Registration: To be determined

Membership and Trade

Association Conference

Date: May 16-17, 2000

Location: Washington, DC

Registration: To be determined

Public Funding

Buchanan, Gore, Keyes and

LaRouche Declared Eligible

for Matching Funds

On September 30, the FEC

certified 2000 Presidential hopefuls

Pat Buchanan, Vice President Al

Gore, Alan Keyes and Lyndon

LaRouche as eligible to receive

public matching funds. Thus far,

nine 2000 Presidential candidates

have qualified for public funding.

In addition to the four mentioned

above, Bill Bradley, Gary Bauer,

Dan Quayle, Senator John McCain

and Elizabeth Dole have all been

certified by the FEC. These candidates will receive their first payment

from the Presidential Public Funding Program in January 2000.

To establish eligibility for the

Presidential public funding program,

a candidate must submit documentation showing that he or she has

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

20 states. Only contributions

received from individuals, and only

up to $250 of a contributor’s total,

are matchable. This threshold

submission is reviewed by the

FEC’s Audit Division. The candidate must also certify that he or she

will abide by spending limits, use

funds for campaign-related expenses

only, agree to an FEC audit and

otherwise comply with the election

law.

Once Presidential candidates

establish eligibility for matching

funds, they may submit additional

contributions for matching fund

consideration on a monthly basis.

The federal government will match

an eligible campaign’s matchable

contributions on a dollar-for-dollar

basis.✦

The first number in each citation

refers to the “number” (month) of

the 1999 Record issue in which the

article appeared. The second

number, following the colon,

indicates the page number in that

issue. For example, “1:4” means

that the article is in the January

issue on page 4.

Advisory Opinions

1998-22: Application of expenditure

definition and disclaimer requirements to web site containing

express advocacy, 1:16

1998-23: Status as state committee

of political party, 1:16

1998-26: Candidate committee’s

acceptance of loan repayment

from contested election trust fund

that contains funds loaned to it by

candidate, 3:5

1998-27: Status as state committee

of political party, 3:6

1999-1: Use of campaign funds to

pay salary to candidate, 4:5; 6:6

1999-2: Use of corporate treasury

funds to provide meals to employees attending candidate forums,

4:6

1999-3: Use of digital signatures by

restricted class to authorize

payroll deductions, 5:5

1999-4: Applicability of contribution limits to local party organization conducting federal activity

and affiliated with state party

committee, 6:3

1999-5: Revising state party ballot

composition ratio for new executive office, 6:4

FEC Conference Schedule

 The FEC continues its series of conferences on campaign finance this fall.

See below for details. To register for any conference, call Sylvester

Management at 800/246-7277 or send an e-mail to

tsylvester@worldnet.att.net. For program information, call the FEC’s

Information Division at 800/424-9530 or 202/694-1100. A regularly updated

schedule for the conferences and a downloadable invitation/registration form

appear at the FEC’s Web site. Go to http://www.fec.gov/pages/infosvc.htm for

the latest information.
November 1999 Federal Election Commission RECORD

11

1999-6: Use and publication of

information about annuity allotment program permitting union

member retirees to make contributions to SSF, 6:4

1999-7: Free hyperlinks on government web site to web sites of

candidates, 6:5

1999-8: Investment of excess campaign funds in mutual funds, 6:6

1999-9: Matching credit card

contributions received by Presidential primary candidates via

Internet, 7:5

1999-10: SSF solicitation of member policyholders of mutual

insurance company, 7:7

1999-11: Federal candidate’s use of

funds from state-level account, 7:7

1999-12: Preemption of Pennsylvania disclosure requirements 8:4

1999-13: Use of Corporate Aircraft,

8:4

1999-14: Testamentary bequests

that exceed contribution limits,

9:7

1999-15: Membership status of

unincorporated unit of trade

association, 9:7

1999-16: Solicitation of chapter

members of trade association, 9:9

1999-18: Calculation of allocation

ratio by local party committee,

9:10

1999-19: Contributions from living

trust, 10:5

1999-20: Solicitation of Insurance

Agents by Corporation, 11:4

1999-22: Use of Merchant ID

Number to Collect Internet

Contributions Submitted for

Matching Payment, 11:5

Compliance

MUR 4546: Failure to provide

contributor information and

demonstrate “best efforts,” 5:8

MUR 4632: Untimely reports;

failure to amend Statement of

Organization; treasurer’s absence,

7:10

MUR 4750: Excessive contributions, 1:13

MUR 4751: Excessive and improper

transfers of nonfederal funds,

excessive contributions, corporate

contributions, 2:2

MUR 4796: Corporate contributions, contributions in the names

of others, 1:13

MUR 4797/4798: Prohibited

transfers from unregistered party

organization to party committees,

failure to allocate, 8:6

MUR 4834: Foreign national

contribution, contribution in the

name of another, 3:7

MUR 4879: Corporate contributions

in the names of others, 8:6

Court Cases

FEC v. _____

– Al Salvi for Senate Committee

(98C-4933), 4:5

– Christian Coalition, 9:4, 10:5

– Colorado Republican Federal

Campaign Committee, 4:1

– Dave Gentry for Congress Committee, 7:10, 11:4

– Forbes, 4:5

– Friends of Jane Harman, 10:4,

11:4

– Public Citizen, 11:2

_____ v. FEC

– Hooker, 10:4

– Judd, 1:3; 4:5

– Judicial Watch, 7:8

– Mariani, 2:1

– National Committee of the Reform

Party, 4:4

– Perot ’96 (98-1022), 6:1

– RNC (98-5263), 1:2

– Virginia Society for Human Life,

10:5

Other

– Burris v. Russell, 1:3

– Cincinnati v. Kruse, 1:3

– Fireman v. United States, 5:7

– USA v. Hsia, 7:9

Regulations

Debates, 7:5

Definition of “Member” of Membership Association, 1:10; 3:1;

5:6, 9:1

Electronic FOIA, 4:7

Express Advocacy, 3:2; 6:7

Limited Liability Companies, 1:11;

8:1, 11:1

Matching Credit Card and Debit

Card Contributions in Presidential

Campaigns, 7:4, 9:3

PAC Disclosure, 11:1

Party Committee Coordinated

Expenditures and Media Travel,

9:12

Public Financing of Presidential

Primary and General Election

Candidates, 1:7; 3:1; 5:6, 10:1

Soft money, 1:12

Status of, 3:3

Voter Guide Petition, 9:13

Reports

Electronic filing, 1:6; 2:1

Reports due in 1999, 1:4

Reports due in July, 7:1

Special election, California, 8:9

Special election, Georgia, 2:3

Special election, Louisiana, 4:7

Statistics

Congressional, 2:4; 6:8; 11:7

PAC, 3:11; 7:2, 9:18

Party, 3:4; 6:8; 11:7
FEDERAL ELECTION COMMISSION

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Federal Election Commission RECORD Month 1999