May 2003 Federal Election Commission Volume 29, Number 5

Table of Contents

1 Advisory Opinions

Regulations

1 Notice of Proposed Rulemaking

on the Public Financing of

Presidential Candidates and

Nominating Conventions

3 Federal Register

Court Cases

5 FEC v. Freedom’s Heritage Forum

5 New Litigation

Budget

6 Commission Submits 2004 Budget

Request

Administrative Fines

7 Committees Fined for Nonfiled

and Late Reports

Statistics

8 PAC and Party Activity Increases

Publications

9 Updated Commission Regulations

Available

Alternative Dispute Resolution

10 ADR Program Update

Outreach

10 Spring Conference Schedule

10 Public Appearances

11 Index

Compliance Advisory Regulations

Opinions

AO 2003-2

Socialist Workers Party

Disclosure Exemption

The Socialist Workers Party

National Campaign Committee and

committees supporting candidates of

the Socialist Workers Party (SWP)

remain exempt from some FEC

disclosure requirements for political

committees.

Under the Federal Election

Campaign Act (the Act), political

committees are required to file

reports with the FEC disclosing

their receipts and disbursements,

including the identification of

individuals and other persons who

have made contributions aggregating $200 or more during a calendar

year. 2 U.S.C. §434(b)(3), (5) and

(6). According to FEC regulations,

identification, in the case of an

individual, includes his or her full

name, mailing address, occupation

and the name of his or her employer.1

 Under the Act, the treasurer

1 11 CFR 100.12 includes this definition for an individual, but also includes

the definition of identification for any

other person as the person’s full name

and address.

(continued on page 3)

Notice of Proposed

Rulemaking on the Public

Financing of Presidential

Candidates and Nominating

Conventions

On April 3, 2003, the Commission approved a Notice of Proposed

Rulemaking (NPRM) requesting

comments on proposed changes to

its rules governing publicly financed

Presidential candidates and national

nominating conventions. The rules

at issue implement the provisions of

the Presidential Election Campaign

Fund Act (the Fund Act) and the

Presidential Matching Payment

Account Act (the Matching Payment

Act), which:

• Establish eligibility requirements

for Presidential candidates and

convention committees seeking

public funds;

• Indicate how funds received under

the public financing system may

be spent; and

• Require the Commission to audit

publicly financed committees and

seek repayments where appropriate.

The Commission proposes

revisions to these rules to implement

relevant provisions of the Bipartisan

Campaign Reform Act of 2002

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

2

Federal Election Commission

999 E Street, NW

Washington, DC 20463

800/424-9530

202/694-1100

202/501-3413 (FEC Faxline)

202/219-3336 (TDD for the

 hearing impaired)

Ellen L. Weintraub, Chair

Bradley A. Smith, Vice Chairman

David M. Mason, Commissioner

Danny L. McDonald,

 Commissioner

Scott E. Thomas, Commissioner

Michael E. Toner, Commissioner

James A. Pehrkon, Staff Director

Lawrence H. Norton, General

 Counsel

Published by the Information

 Division

Greg J. Scott, Assistant Staff

 Director

Amy Kort, Editor

http://www.fec.gov

(BCRA) and to respond to issues

that arose while administering the

public funding program during

recent election cycles.

Presidential Candidates

Winding down costs. The proposed rules would make several

changes to Commission regulations

governing winding down costs,

including limiting the length of time

during which a committee could use

public funds to pay winding down

expenses and limiting the total

amount of winding down expenses

that could be paid, in whole or in

part, with public funds. The Commission also requests comments on

alternatives to these proposed new

regulations, such as disallowing the

use of public funds to pay winding

down costs or more precisely stating

in the regulations what types of

expenses are permissible winding

down expenses.

The proposed rules would also

clarify which costs constitute

primary winding down costs for

candidates who participate in both

primary and general elections, and

the Commission seeks comments on

methods of allocating winding down

expenses between primary and

general election committees and on

whether and to what extent General

Election Legal and Accounting

Compliance (GELAC) funds may be

used to pay primary winding down

expenses. Additionally, the Commission seeks comments on whether

certain convention expenses incurred by Presidential primary

candidates after their dates of

ineligibility should be considered

qualified campaign expenses.

Primary Expenditure Limitations

and Repayments. The Commission

also proposes to clarify its rules

concerning which expenses apply to

the expenditure limitations for

Presidential primary candidates and

repayments based on expenditures

in excess of these limitations. Some

of the proposed changes in the

regulations would, for example,

address the extent to which in-kind

contributions, coordinated expenditures, coordinated communications,

coordinated party expenditures and

coordinated party communications

would count against the expenditure

limitations, particularly in light of

the Commission’s recent

rulemaking on coordinated and

independent expenditures. The

Commission also requests comments on whether similar changes

should be made to the regulations

governing publicly funded general

election Presidential candidates.

GELAC funds. In addition, the

Commission is considering making

changes to its regulations concerning the use of GELAC funds in

order to:

• Update the list of permissible uses

of GELAC funds, consistent with

the BCRA;

• Require candidates to use GELAC

funds to make primary campaign

repayments if the primary committee cannot make them before

excess or remaining GELAC funds

may be used for other purposes;

• Change or eliminate the June 1

starting date for candidates soliciting or accepting direct contributions to their GELAC funds; and

• Apply the Commission’s new rules

concerning the reattribution and

redesignation of individual contributions to GELAC contributions.

Other candidate issues. The

NPRM proposes a number of

additional revisions to its regulations concerning Presidential

candidates, such as allowing publicly funded candidates to receive

salary from their campaign committees, under limited circumstances

and in limited amounts, and creating

a new “shortfall exemption” from a

primary candidate’s overall expenditure limitation to mitigate the

effect of delayed or deficient

payments of matching funds.

National Nominating Conventions

The Commission also proposes

revisions to its regulations concerning national nominating conventions

in order to implement the BCRA’s

ban on the use of nonfederal funds

by national party committees and to

further clarify other requirements.

BCRA provisions concerning

nonfederal funds. Under the BCRA,

a national committee of a political

party may not solicit, receive or

direct to another person a contribution, donation or transfer of funds or

anything of value, or spend any

funds, that are not subject to the

limits, restrictions and reporting

requirements of the Federal Election

Campaign Act. This prohibition also

applies to agents acting on behalf of

the national party committee and to

entities directly or indirectly established, financed, maintained or

controlled by a national party

committee. 2 U.S.C. §§441i(a)(1)

and (2).

The Commission seeks comments

on whether host committees and

Regulations

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

3

(continued on page 4)

Federal Register

Federal Register notices are

available from the FEC’s Public

Records Office, on the FEC web

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

register.htm and from the FEC

faxline, 202/501-3413.

Notice 2003-8

Public Financing of Presidential

Candidates and Nominating

Conventions (68 FR 18484,

April 15, 2003)

municipal funds for national nominating conventions are “agents” of a

national party committee or are

directly or indirectly established,

financed, maintained or controlled

by that committee. The BCRA also

prohibits an entity directly or

indirectly established, financed,

maintained or controlled by, or

acting on behalf of, a federal

candidate or officeholder from

raising or spending nonfederal funds

in connection with a federal election. 2 U.S.C. §441(e)(1). The

NPRM requests comments on

whether expenses of a host or

municipal committee are in connection with a federal election.

Convention committees, in

contrast, are as a matter of law

directly or indirectly established,

financed, maintained or controlled

by a national party committee. Thus,

the proposal would ban convention

committees from raising and

spending nonfederal funds. The

Commission seeks comments on

whether this prohibition would bar

convention committees from

accepting many of the in-kind

donations typically provided by host

committees and municipal funds.

The NPRM also poses other

questions concerning the application

of BCRA provisions to convention

activities, such as whether:

• Host committees and municipal

funds would be eligible to make a

certification that they do not make

expenditures or disbursements in

connection with a federal election

under 11 CFR 300.11(d), and

whether they would be eligible for

the exceptions from the ban on

solicitations by federal candidates

and officeholders at 11 CFR

300.65;

• A convention committee may

offset in-kind contributions

received from host committees in

the form of impermissible expenses with convention committee

expenditures that could have been

paid by the host committee;

• Commercial vendors may provide

goods and services to convention

committees at discounted rates or

no charge under certain circumstances; and

• Private events held by corporations, labor organizations and other

groups in the convention city are

subject to Commission regulations

solely on that basis.

Other issues. The Commission is

proposing a number of other

changes to the regulations, which

are not directly related to the

BCRA. For example, the NPRM

includes a proposal to treat host

committees and municipal committees similarly in its regulations,

except that municipal organizations,

which are subject to governmental

controls, would not be routinely

audited by the Commission. The

NPRM also proposes revising

Commission regulations that define

“convention expenses” and removing the requirement that donations

to host committees and municipal

funds be from “local” businesses

and organizations. Finally, the

Commission asks whether its final

regulations relating to the financing

of national nominating conventions

should be effective for the 2004

elections, or postponed until the

2008 elections.

Additional Information

The full text of the NPRM was

published in the April 15, 2003,

Federal Register (68 FR 18484) and

is available on the Commission’s

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

register.htm. Public comments must

be submitted, in either written or

electronic form, to Mai T. Dinh,

Acting Assistant General Counsel.

Comments may be sent by:

• E-mail to pubfund2004@fec.gov

(e-mailed comments must include

the commenter’s full name, e-mail

address and postal address);

• Fax to 202/219-3923 (send a

printed copy follow-up to ensure

legibility); or

• Overnight mail to the Federal

Election Commission, 999 E Street

NW, Washington, DC 20436.

All comments must be received

by May 9, 2003. If sufficient

requests to testify are filed with the

Commission, it will hold a public

hearing on these proposed rules on

May 19, 2003. Commenters who

wish to testify at the hearing must

indicate this intent in their written or

electronic comments.✦

—Amy Kort

Advisory Opinions

(continued from page 1)

of a political committee is required

to put forth his or her best efforts to

obtain this information.2

In Buckley v. Valeo, 424 U.S. 1

(1976), the Supreme Court recognized that, under certain circumstances, the Act’s disclosure

requirements as applied to a minor

party would be unconstitutional

because the threat to their First

Amendment rights resulting from

disclosure would outweigh the

interest in disclosure. According to

the Court’s opinion, “minor parties

must be allowed sufficient flexibility in the proof of injury to assure a

fair consideration of their claim [for

a reporting exemption] . . . The

2 For more information regarding the

“best efforts” provision, please consult

11 CFR 104.7.
Federal Election Commission RECORD May 2003

4

evidence offered need only show a

reasonable probability that the

compelled disclosure of a party’s

contributors’ names will subject

them to threats, harassment, or

reprisals from either the government

or private parties.” 424 U.S. at 74.

The Socialist Worker Party has

been a minor party in the United

States since 1938. SWP candidates

have participated in every presidential election since 1948. Although

they have consistently fielded

candidates for federal, state and

local elections, none have ever been

elected to office. Furthermore, SWP

candidates have received very low

vote totals.

The SWP national committee and

committees supporting SWP

candidates were first granted a

partial reporting exemption in 1979

by the U.S. District Court for the

District of Columbia, permitting

them to file disclosure reports

without providing the identification

of their contributors. When the

exemption expired in 1984, the

court approved an updated settlement agreement that extended the

exemption until the end of 1988.

When this renewed exemption

expired, the SWP missed the

deadline for reapplication for the

exemption through the courts.

Subsequently, they have sought

extension of this exemption from

the Federal Election Commission.

The Commission has granted

extension of the partial reporting

exemption to the SWP in Advisory

Opinions 1990-13 and 1996-46.

Opinions issued by the Commission

have considered both current and

historical incidents of systematic

harassment of SWP supporters by

governmental as well as private

entities.

In making a determination, the

Commission has examined evidence

of the following provided by the

party: the electoral status of the

SWP, the history of government

Advisory Opinions

(continued from page 3)

Advisory Opinion Requests

AOR 2003-5

Participation of federal candidates and officeholders and other

individuals covered by the Federal

Election Campaign Act in conventions, forums and other activities of

trade association that engages in

federal election activities and

activities in connection with a

federal election (National Association of Home Builders of the United

States, January 17, 2003)

AOR 2003-6

Transfer of SSF contributors’

payroll deduction authorizations to

an affiliated SSF in the absence of

payroll consolidation resulting from

a merger or acquisition (Public

Service Enterprise Group, Inc.,

March 11, 2003)

AOR 2003-7

Refund to donors of unexpected

tax refund received by nonfederal

committee administered by a

Member of Congress that had

previously disbursed all funds and

ceased activities (Virginia Highlands Advancement Fund, March

17, 2003)

AOR 2003-8

The requester withdrew his

request for this advisory opinion on

March 28, 2003. The request, filed

on March 17, 2003, sought the

Commission’s opinion on the role of

a Member of Congress in the

leadership of a state party committee that raises and spends soft

money.

AOR 2003-9

Whether candidate’s interest

payments on 1998 campaign loan

are “expenditure(s) from personal

funds” for the 2004 election cycle

under the Millionaires’ Amendment

(Senator Peter G. Fitzgerald, March

27, 2003)

harassment, fears expressed by party

supporters and harassment and

violence from private sources. The

SWP remains a minor party that has

never applied or qualified for

national committee status.3

 Although it appears that government

harassment has abated, harassment

from the private sector along with

the historical treatment of party

supporters appear to have a chilling

effect on possible membership in or

association with the SWP.

The totality of evidence from

1997-2002 indicates that the there is

a reasonable probability that contributors to and vendors doing

business with the SWP and committees supporting SWP candidates

would face threats, harassment or

reprisal if their names and information about them were disclosed.

Consequently, the Commission has

extended the partial reporting

exemption to the Socialist Workers

Party National Campaign Committee and committees supporting SWP

candidates. Furthermore, the

Commission has renewed a provision from AO 1996-46 that requires

SWP committees to assign a code

number to each individual or entity

from whom it receives contributions

in excess of $200 during a calendar

year. This allows FEC staff and

members of the public who review

their reports to determine whether

any contributor has exceeded the

contribution limits found at 2 U.S.C.

§441a.

SWP committees must comply

with all other requirements of the

Act and FEC regulations, such as

filing reports in a timely manner,

maintaining records of contributions

of disbursements and complying

with the limits and prohibitions of

the Act. This exemption is effective

through December 31, 2008.✦

—Michelle L. Ryan

3 See 2 U.S.C §431(14) and Advisory

Opinions 2001-13, 1998-2, 1995-16,

and 1992-30.
May 2003 Federal Election Commission RECORD

5

Court Cases

FEC v. Freedom’s Heritage

Forum

On March 20, 2003, the U.S.

District Court of Appeals for the

Sixth Circuit granted Freedom’s

Heritage Forum and Frank Simon’s

motion to voluntarily dismiss their

appeal of the March 28, 2002,

decision in this case by the U.S.

District Court for the Western

District of Kentucky at Louisville.

See the August 2002 Record, page

2.

U.S. District Court of Appeals for

the Sixth Circuit, 03-5178; U.S.

District Court for the Western

District of Kentucky at Louisville,

3:98CV549-S.✦

—Amy Kort

New Litigation

Luis M. Correa, et. al. v. FEC

On March 3, 2003, the Comitè

Jose Hernandez Mayoral

Comisionado Residente, Inc., (the

Committee) and its treasurer Luis

M. Correa filed a petition in the U.S.

District Court for the District of

Puerto Rico challenging the

Commission’s final determination

that the Committee violated 2

U.S.C. §434(a) by failing to file its

2001 Year-End report in a timely

manner and the assessment of a

$1,000 civil money penalty. The

plaintiffs’ petition alleges that they

were unable to file the report

electronically by the January 31,

2002, deadline because of electronic

data conversion and transmission

problems for which the Commission

was responsible.

Background. On June 14, 2002,

the Commission found reason to

believe that the plaintiffs violated 2

U.S.C. §434(a) by failing to file the

report in a timely manner and made

an initial determination to assess a

$1,000 civil money penalty. The

plaintiffs filed a challenge to the

preliminary determination and

penalty on July 24, 2002.

On January 24, 2003, the Commission made its final determination

that the Committee had violated 2

U.S.C. §434(a) and assessed the full

$1,000 civil money penalty. The

FEC Reviewing Officer, in recommending that the Commission make

this final determination, found that

the plaintiffs had failed to show that

timely filing had been prevented by

“extraordinary circumstances”

beyond their control under 11 CFR

111.35.

Court Petition. The petition

claims that, despite attempts to gain

technical support from the Commission, the Committee did not receive

adequate assistance with its electronic data problems until after the

filing deadline. The plaintiffs claim

that they were not responsible for

the late filing because the

FEC v. California Democratic

Party, et al.

On March 17, 2003, the Commission filed a complaint in the U.S.

District Court for the District of

California, Sacramento Division,

against the California Democratic

Party (CDP), its federal account, the

Democratic State Central Committee of California-Federal, its

nonfederal account, the Democratic

State Central Committee of California-Non-federal, and Katherine

Moret, the treasurer of the CDP’s

federal and nonfederal accounts The

Commission alleges that in its getout-the-vote (GOTV) activities for a

1998 special election, the CDP:

• Violated the Federal Election

Campaign Act’s (the Act) ban on

corporate and labor union contributions;

• Failed to report its activities as

independent expenditures; and

• Failed to include the required

disclaimer on GOTV communications.

Background. Under the Act,

political party committees must only

spend funds that are consistent with

the limits and prohibitions of the

Act to influence a federal election.

Among other restrictions, the Act

prohibits corporations and labor

unions from making any contribution in connection with a federal

election, and also prohibits a

political committee from receiving

(continued on page 6)

AOR 2003-10

Nonfederal fundraising on behalf

of a state party committee by person

who may under some circumstances

be an agent of a federal officeholder

(Nevada State Democratic Party and

Rory Reid, Commissioner of Clark

County Nevada, April 2, 2003)

AOR 2003-11

State party committee employee

fringe benefits treated as “salaries

and wages” under allocation regulations (Michigan Democratic State

Central Committee, March 31,

2003)

AOR 2003-12

Relationship between referendum

committee and federal officeholder/

candidate under BCRA rules

regarding establishment and control

of committee, candidate fundraising,

“federal election activity” and

electioneering messages (Stop

Taxpayer Money for Politicians

Committee and U.S. Representative

Jeff Flake, March 4, 2003)✦

Commission’s technical support

staff sent data to an incorrect e-mail

account, and because the

Commission’s electronic filing

system software could not accept

Spanish characters.

The plaintiffs ask the court to set

aside the Commission’s final

determination and penalty assessment.

U.S. District Court for the

District of Puerto Rico, 03-1208.✦

—Phillip Deen
Federal Election Commission RECORD May 2003

6

1 The Act defines an “independent

expenditure” as an expenditure that

expressly advocates the election or

defeat of a clearly identified federal

candidate and is not made in cooperation or consultation with any candidate,

candidate’s committee or their agents

and is not made in concert with or at

the request or suggestion of any of

these. 2 U.S.C. §431(17). See also 11

CFR 109.1(b)(4). Independent expenditures must be paid for with federally

permissible funds and must be reported

under 2 U.S.C. §§434(b)(4)(H)(iii) and

(6)(B)(iii).

such a contribution. 2 U.S.C. §441b.

See also 2 U.S.C. §§431(8), 441a,

441(b), 441(c), 441(e), 441(f) and

441(g); 11 CFR parts 100, 110, 114

and 115. A party committee that

maintains both federal and

nonfederal accounts may pay for

some mixed federal/nonfederal

activities with a combination of

federal and nonfederal funds using

the allocation rules set forth in

Commission regulations. See 11

CFR 106.5. However, any expenditure made by a political party

committee for activities that urge

the public to vote for a clearly

identified federal candidate must be

made with federally permissible

funds.

In the 22nd Congressional District

of California, a special general

election was held on March 10,

1998, to fill a House seat left vacant

after the death of Walter Capps.

This federal office was the only

office on the ballot for the special

election, and Lois Capps was the

only candidate on the ballot nominated by the Democratic Party.

According to the complaint, the

CDP paid $99,097 for direct mailings and radio advertisements that

contained statements urging the

public to vote on March 10th for

Lois Capps. In its FEC disclosure

reports, the CDP reported the

expenditures for these communications as mixed federal/nonfederal

activity, and it paid for the costs of

these communications with funds

from both its federal and nonfederal

accounts. Of the $99,097 spent on

the communications, $77,281 came

from the CDP’s nonfederal funds,

which, the Commission contends,

contained funds prohibited under the

Act, including corporate and union

funds.

The Commission asserts that

these communications violated the

Act in several respects. First, a

GOTV drive conducted in connection with an election in which only

Court Cases

(continued from page 5)

Budget

Commission Submits Budget

Request for 2004

On March 21, 2003, the Commission submitted to Congress and the

Office of Management and Budget a

$50,440,000 budget request for

fiscal year (FY) 2004. The FY2004

proposal requests an increase of

only 1.8 percent over the enacted

FY2003 appropriation of

$49,541,871, representing a continuation of that funding level, adjusted

for inflation and salary and benefits

increases. The requested budget

appropriation is identical to the

Administration’s budget mark for

the FEC—both seek funding

approval for a total of 391 FEC

employees in FY2004.

The executive summary of the

budget request cites several FEC

successes over the past two years,

including meeting the statutory and

court deadlines associated with the

Bipartisan Campaign Reform Act,

expanding the Commission’s

compliance program with the

addition of the Administrative Fine

and Alternative Dispute Resolution

programs, implementing mandatory

federal candidates appear on the

ballot is not a mixed federal/

nonfederal activity. The expenditures for these communications were

required to have been paid entirely

from federal funds. 2 U.S.C.

§441(b); 11 CFR 102.5. Second, the

Commission contends that these

communications, which included

phrases such as “Continue the

Walter Capps Tradition” and “Vote

Democratic” in the “Special Election, Tuesday, March 10,” expressly

advocated the election or defeat of a

clearly identified federal candidate

and, thus, required a disclaimer

stating both who paid for the

communication and whether it was

authorized by a candidate. 2 U.S.C.

§441d(a) and 11 CFR 110.11(a)(1).

These communications did not

contain the required disclaimers.

Third, the Commission argues that

the communications were independent expenditures and that the

committee violated the Act by

failing to properly disclose them as

such in its FEC reports.1

Relief. The Commission asks that

the court:

• Declare that the defendants

violated these provisions of the

Act and Commission regulations;

• Permanently enjoin the defendants

from further such violations of the

Act;

• Order the defendants to transfer

$77,281 from the Democratic State

Central Committee of CaliforniaFederal to the CDP’s nonfederal

account;

• Order the defendants to correct

reports for the 1998 special general

election in order to accurately

describe these activities as independent expenditures; and

• Assess an appropriate civil penalty

against the defendants jointly and

severally for each violation found,

not in an amount to exceed the

greater of $5,500 or the amount of

the expenditures involved for each

violation.

See 2 U.S.C. §437g(a)(6)(B) and

11 CFR 111.24.

U.S. District Court for the

District of California, Sacramento

Division, 1:02CV00875.✦

—Amy Kort
May 2003 Federal Election Commission RECORD

7

Committees Fined for

Nonfiled and Late Reports

The Commission recently

publicized its final action on 18 new

Administrative Fine cases, bringing

the total number of cases released to

the public to 519, with $722,221 in

fines collected.

Civil money penalties for late

reports are determined by the

number of days the report was late,

the amount of financial activity

involved and any prior penalties for

violations under the administrative

fines regulations. Penalties for late

Administrative

Fines

Committees Fined and Penalties Assessed

1 The Commission took no further action in this case.

2 This civil money penalty has not been collected.

3 The Commission waived the $8,000 civil money penalty because the

respondents were able to demonstrate the existence of extraordinary

circumstances that were beyond their control.

4 This civil money penalty was reduced from $11,375 due to the level of

activity on the report.

5 The Commission’s finding in this case was unsuccessfully challenged in

the U.S. District Court, Southern District of Indiana. See Jeremiah T.

Cunningham, et al. v. FEC, in the January 2003 Record, page 19.

 1. Clay Jr. for Congress ____1

2. Del Webb Corporation Employees Fund for Better Government $3,500

 3. Dub Maines for Congress $2,7002

 4. Giordano for United States Senate Mid-Year 2001 $03

 5. Giordano for United States Senate Year-End 2001 ____1

 6. Gormley for Senate Primary Election Fund ____1

 7. Guy Gregg for U.S. Senate ____1

 8. Helms for Senate Committee (2002) ____1

 9. Jim Sullivan for Congress $2,7002

10. Kalogianis for Congress, Inc. $2,4752

11. Louisiana Sheriffs’ Association – Louisiana

Sheriffs’ & Deputies’ Political Action Committee $850

12. McNary for Congress Committee $1,5752, 4

13. National Italian American Political Action Committee $2,7002

14. Raczkowski for Senate $6,0002

15. Republicans for Phil Bradley $1,8502

16. Robert W. Rock for Congress $4,5002, 5

17. Ross for Congress July Quarterly 2002 $5,5002

18. Ross for Congress 12-Day Pre-Primary 2002 $6,0002

electronic filing and issuing the

Voting Systems Standards (VSS).

The Summary concludes, “The

success of these initiatives has

resulted, and will continue to result

in, improved disclosure through

electronic filing, improve compliance through varied enforcement

programs, and improved federal

election administration through

updating and enhancing the VSS.

When considered within the context

of the continuing record levels of

total federal campaign finance

activity each election cycle, . . .

these initiatives have enabled the

Commission to handle an expanding

workload without proportionate

requests for additional staff.

“In order to continue reaping the

benefits of automation in our

disclosure and compliance programs

without adding additional staff, it is

imperative that the Commission

receive the requested resources in

FY2004 to continue to implement

the automated review of financial

disclosure reports, to initiate the

portal development project to

enhance the analysis and accessibility of information, and to continue

the alternative compliance

programs.”✦

—Amy Kort

reports—and for reports filed so late

as to be considered nonfiled—are

also determined by the financial

activity for the reporting period and

any prior violations. Election

sensitive reports, which include

reports and notices filed prior to an

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

October quarterly and October

monthly reports), receive higher

penalties. Penalties for 48-hour

notices that are filed late or not at all

are determined by the amount of the

contribution(s) not timely reported

and any prior violations.

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

final determination. Unpaid civil

money penalties are referred to the

Department of the Treasury for

collection.

The committees listed in the chart

above, along with their treasurers,

were assessed civil money penalties

under the administrative fines

regulations.

Closed Administrative Fine case

files are available through the FEC

Press Office, at 800/424-9530 (press

2), and the Public Records Office, at

800/424-9530 (press 3).✦

—Amy Kort
Federal Election Commission RECORD May 2003

8

0

150

300

450

600

750

 92 94 96 98 00 02 

Millions of Dollars

Nonfederal

Federal

Democrats

0

150

300

450

600

750

 92 94 96 98 00 02 

Millions of Dollars

Nonfederal

Federal

Republicans

Party Committee Federal and Nonfederal Receipts—1992-2002

Statistics

PAC and Party Activity

Increases

Financial activity by political

party committees and political

action committees (PACs) increased, in some cases sharply,

during 2001-2002, when compared

to recent comparable cycles. The

Commission has compiled the

following statistics based on political committees’ financial disclosure

reports.

Democratic and Republican Party

Committees

Political committees of the two

major parties reported raising more

than $1.15 billion and spending

$1.13 billion during 2001-2002—an

increase of 73 percent over 1997-

1998, the most recent campaign

with no Presidential race on the

ballot. The two parties raised a total

of $658.8 million in federal funds,

an increase of 33 percent over the

1998 cycle. Nonfederal funds (“soft

money”) raised by national parties

totaled $496 million, a 98 percent

increase over 1998 totals. The

recently-enacted Bipartisan Campaign Reform Act of 2002 now bars

national party committees from

raising or spending nonfederal funds

and further restricts the raising and

spending of these funds by state and

local party committees.

In 2002, Democratic committees

for the first time reported more

nonfederal receipts by national

committees than federal receipts for

national, state and local committees

combined. Both parties raised more

nonfederal funds in 2002 than they

had in 2000, in spite of the open

Presidential campaign waged that

year. See the chart below.

Party support for Congressional

candidates in the form of direct

contributions, coordinated expenditures and independent expenditures

made by party committees totaled

$22.6 million for Republican

committees and $11.1 million for

Democratic party committees. The

Republican total was dominated by

the Republican National Committee

(RNC), which made $14.1 million

in coordinated expenditures on

behalf of Senate and House candidates in 2002. The Senate and

House campaign committees of the

two parties, by contrast, spent much

less in direct support of their

candidates than they had in the mid1990s, before the extensive use of

nonfederal funds by these organizations.

Republican national committees

transferred $42.3 million in federal

funds and $103.3 million in

nonfederal funds to their state and

local organizations, while Democratic national committees transferred $39 million in federal funds

and $119.6 million in nonfederal

funds to state and local party

committees.
May 2003 Federal Election Commission RECORD

9

PACs

From January 1, 2001, through

December 31, 2002, PACs raised

$685.3 million and spent $656.5

million, each up 13 percent over

1999-2000. As of December 31,

2002, cash on hand for the 4,594

federal PACs totaled $184.3 million.

PAC contributions to federal

candidates during 2001-2002 totaled

$282 million, up 9 percent from

1999-2000. Most of the money—

$266.1 million—was given to

candidates seeking election in 2002.

The remaining $15.9 million went to

candidates running for office in

future years or to debt retirement for

candidates in past cycles.

House candidates received $212

million from PACs, up 8 percent

from the previous cycle. As in past

years, incumbent candidates received the largest portion of PAC

funds. See the chart below for more

information on contributions from

corporate, labor, nonconntected and

trade association PACs to incumbent candidates and challengers.

Senate candidates received $70

million from PACs, an increase of

14 percent. Republican Congressional candidates received $145.4

million, an increase of 7 percent

from the previous cycle, while

Democrats received $136.5 million,

up 11 percent.

In addition to making $282

million in contributions, PACs made

$14 million in independent expenditures for and against candidates. Of

this, $12.7 million was spent to

support various candidates, and $1.3

million was spent to oppose

candidates.✦

—Amy Kort

0

20

40

60

80

100

Corp. Labor Noncon. Trade

Percentage

Incumbents Challengers

PAC Contributions to House Candidates by Type of PAC and Candidate Status—

1998-2002

0

20

40

60

80

100

Corp. Labor Noncon. Trade

Percentage

2002

2000

1998

Publications

Updated Commission

Regulations Available

The new edition of the Commission regulations at Title 11 of the

Code of Federal Regulations are

now available. Current as of February 2003, this edition of 11 CFR

incorporates amendments made by

the Bipartisan Campaign Reform

Act of 2002 (BCRA).

The Commission has mailed

copies of the new edition of the

regulations to registered political

committees. Free copies are also

available to the public. Simply call

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

202/694-1100.✦

—Amy Kort
Federal Election Commission RECORD May 2003

10

Outreach

Spring Conference Schedule

Conference for Candidates and

Party Committees

In response to the overwhelming

demand for the FEC’s March

conference for House and Senate

candidates and political party

committees, the Commission will

hold a second conference for

candidates and party committees

May 21-22 at the Royal Sonesta

Hotel in Boston. The conference

will consist of a series of workshops

conducted by Commissioners and

experienced FEC staff who will

explain how the federal campaign

finance law, as amended by the

Bipartisan Campaign Reform Act of

2002 (BCRA), applies to House and

Senate candidates and party committees. Workshops will specifically

address new rules for fundraising,

new restrictions on the use of

nonfederal funds or “soft money,”

new requirements for communications and revised reporting requirements. A representative from the

IRS will also be available to answer

election-related tax questions

The registration fee for the

conference is $385, which covers

the cost of the conference, materials

and meals. A ten dollar late fee will

be assessed for registration forms

received after April 27. Because

demand for this conference is

exceptionally high, the FEC can

only accept conference registrations

from two attendees representing any

given organization.

The Royal Sonesta Hotel is

located at 5 Cambridge Parkway,

Cambridge, MA. A room rate of

$179 per night is available to

conference attendees who make

room reservations on or before April

27.

Conference for Trade

Associations, Membership

Organizations and their PACs

The FEC will hold a conference

for trade associations, membership

and labor organizations and their

PACs June 16-17 in Washington,

DC. Commissioners and experienced FEC staff will conduct a

series of workshops to address how

the campaign finance law affects

these associations and organizations.

Seminars and workshops will also

discuss how the BCRA affects trade

associations, member and labor

organizations and their PACs. In

addition, a representative from the

IRS will be available to answer

election-related tax questions.

The registration fee for the

conference is $385, which covers

the cost of the conference, materials

and meals. The registration form

must be received by May 23—a ten

dollar late fee will be assessed for

late registrations. Because demand

for this conference is exceptionally

high, the FEC can only accept

conference registrations from two

attendees representing any given

association or organization.

The conference will be held at the

Loews L’Enfant Plaza Hotel, 480

L’Enfant Plaza, SW., Washington,

DC. A room rate of $189 per night

is available to conference attendees

who make room reservations on or

before May 23.

Public Appearances

May 5, 2003

Enable America

Linthicum Heights, MD

Chair Weintraub

May 28, 2003

Federalist Society—Capital

District Lawyers Chapter

Albany, NY

Vice-Chairman Smith

Alternative

Dispute

Resolution

ADR Program Update

The Commission recently

resolved two additional cases under

the Alternative Dispute Resolution

(ADR) program. The respondents,

the alleged violations of the Federal

Election Campaign Act (the Act)

and the penalties assessed are listed

below.

1. The Commission reached

agreement with Citizens to Elect

Rick Larsen and its treasurer,

Robert Anderson, concerning

excessive contributions. The

respondents acknowledged that a

violation occurred due to committee staffs’ misunderstanding

of the Act and agreed to appoint

a staff person to serve as the FEC

compliance officer and to have

this individual attend an FECsponsored seminar within the

next year. (ADR 078)

2. The Commission reached

agreement with Craig Schelske,

Craig Schelske for Congress and

its treasurer, Lesley Lyons,

concerning corporate contributions, violations of the Act’s

disclaimer provisions and the

committee’s failure to file timely

Statements of Candidacy and

Organization. The respondents

acknowledged inadvertent

violations of the Act, and they

agreed to pay a $500 civil

penalty and to have a staff

member attend an FEC-sponsored seminar within the next

year. (ADR 083)✦

—Amy Kort
May 2003 Federal Election Commission RECORD

11

Registration Information

Complete conference registration

information is available online.

Conference registrations will be

accepted on a first-come, firstserved basis. Attendance is limited,

and FEC conferences are selling out

quickly this year, so please register

early. For registration information:

• Call Sylvester Management

Corporation at 800/246-7277;

• Visit the FEC web site at http://

www.fec.gov/pages/

infosvc.htm#Conferences; or

• Send an e-mail to

toni@sylvestermanagement.com.✦

—Amy Kort

The first number in each citation

refers to the “number” (month) of

the 2003 Record issue in which the

article appeared. The second

number, following the colon,

indicates the page number in that

issue. For example, “1:4” means

that the article is in the January

issue on page 4.

Advisory Opinions

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

2002-14: National party

committee’s lease of mailing list

and sale of advertising space and

trademark license, 3:5

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

2003-1: Nonconnected committee’s

allocation of administrative

expenses, 4:9

2003-2: Socialist Workers Party

disclosure exemption, 5:1

Compliance

Cases resolved under Alternative

Dispute Resolution program,

2:11; 3:3; 5:10

Committees fined under Administrative Fine program, 1:25; 2:13;

3:4; 5:7

MUR 5187: Corporate reimbursements of contributions, 1:22

MUR 5208: Facilitation of contributions by national bank, 2:1

Court Cases

_____ v. FEC

– Cunningham, 1:19

– Greenwood for Congress, 4:4

– Hawaii Right to Life, Inc., 1:20

– Lovely, 3:4

– Luis M. Correa, 5:5

FEC v. _____

– Beaumont, 1:20

– California Democratic Party, 5:5

– Fulani, 2:8

– Freedom’s Heritage Forum, 2:8;

5:5

– Toledano, 1:20

Index Regulations

Administrative fines, final rules, 4:1

BCRA reporting, final rules, 1:14

BCRA technical amendments, 2:6

Biennial limit, clarification, 2:1

Brokerage loans and lines of credit,

effective date, 2:4

Contribution limits increase, 1:6

Contribution limitations and prohibitions; delay of effective date

and correction, 2:6

Coordinated and independent

expenditures, final rules, 1:10

Disclaimers, fraudulent solicitation,

civil penalties and personal use of

campaign funds, final rules, 1:8

Leadership PACs, Notice of Proposed Rulemaking, 2:4

Millionaires’ Amendment, interim

final rules, 2:2

Public financing of Presidential

candidates and nominating

conventions, Notice of Proposed

Rulemaking, 5:1

Reports

April reporting reminder, 4:1

Draft forms and e-filing formats

available for public comment, 1:2

New forms available, 3:1

Reports due in 2003, 1:3

Statements of Candidacy and

Statements of Organization for

authorized committees require

new information, 3:2

Texas special election reporting, 4:4

Conference Schedule

for 2003

Conference for House and

Senate Campaigns and Political

Party Committees

May 21-22, 2003

Boston, MA

Conference for Trade

Associations, Membership and

Labor Organizations and their

PACs

June 16-17, 2003

Washington, DC

Regional Conference for House

and Senate Campaigns,

Political Party Committees and

Corporate/Labor/Trade PACs

September 9-10, 2003

Chicago, IL

Regional Conference for House

and Senate Campaigns,

Political Party Committees and

Corporate/Labor/Trade PACs

October 28-29, 2003

San Diego, CA

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