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e A “reason to believe” finding followed by conciliation would be appropriate when
the Commission is certain that a violation has occurred and the seriousness of the
violation warrants conciliation.

A “reason to believe” finding by itself does not establish that the law has been
violated. When the Commission later accepts a conciliation agreement with a
respondent, the conciliation agreement speaks to the Commission’s ultimate conclusions.
When the Commission does not enter into a conciliation agreement with a respondent,
and does not file suit, a Statement of Reasons, a Factual and Legal Analysis, or a General
Counsel’s Report may provide further explanation of the Commission’s conclusions.

The Commission has previously used the finding “reason to believe, but take no
further action” in cases where the Commission finds that there is a basis for investigating
the matter or attempting conciliation, but the Commission declines to proceed for
prudential reasons. As discussed below, the Commission believes that resolving these
matters through dismissal or dismissal with admonishment more clearly conveys the
Commission’s intentions and avoids possible confusion about the meaning of a reason to
believe finding.

B. Dismissal and Dismissal with Admonishment

Under Heckler v. Chaney, 470 U.S. 821 (1985), the Commission has broad
discretion to determine how to proceed with respect to complaints or referrals. The
Commission has exercised its prosecutorial discretion under Heckler to dismiss matters

that do not merit the additional expenditure of Commission resources.’ As with other

' The FECA and Commission regulations also recognize the Commission’s authority to dismiss
enforcement matters. See 2 U.S.C. § 437g(a)(1); 11 C.F.R. §§ 111.6(b) and 111.7(b).


This notice represents a general statement of policy announcing the general
course of action that the Commission intends to follow. This policy statement does not
constitute an agency regulation requiring notice of proposed rulemaking, opportunities
for public participation, prior publication, and delay effective under 5 U.S.C. 553 of the
Administrative Procedures Act ("APA"). As such, it does not bind the Commission or
any member of the general public. The provisions of the Regulatory Flexibility Act, 5
U.S.C. 605(b), which apply when notice and comment are required by the APA or

another statute, are not applicable.


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consistency and promote understanding of the Commission’s reasons for taking action.
Thus, the Commission is issuing this policy statement to assist complainants,
respondents, and the public in understanding the Commission’s findings at this stage of
the enforcement process.

Generally speaking, at the initial stage in the enforcement process, the
Commission will take one of the following actions with respect to a MUR: (1) find
“reason to believe” a respondent has violated the Act; (2) dismiss the matter; (3) dismiss
the matter with admonishment; or (4) find “no reason to believe” a respondent has
violated the Act. This policy statement is intended to clarify the circumstances under
which the Commission uses each of these dispositions.

A. “Reason to believe”

The Act requires that the Commission find “reason to believe that a person has
committed, or is about to commit, a violation” of the Act as a predicate to opening an
investigation into the alleged violation. 2 U.S.C. § 437g(a)(2). The Commission will
find “reason to believe” in cases where the available evidence in the matter is at least
sufficient to warrant conducting an investigation, and where the seriousness of the
alleged violation warrants either further investigation or immediate conciliation. A
“reason to believe” finding will always be followed by either an investigation or pre-
probable cause conciliation. For example:

e A “reason to believe” finding followed by an investigation would be appropriate
when a complaint credibly alleges that a significant violation may have occurred,
but further investigation is required to determine whether a violation in fact

occurred and, if so, its exact scope.


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actions taken by the Commission, dismissal of a matter requires the vote of at least four
Commissioners.

Pursuant to the exercise of its prosecutorial discretion, the Commission will
dismiss a matter when the matter does not merit further use of Commission resources,
due to factors such as the small amount or significance of the alleged violation, the
vagueness or weakness of the evidence, or likely difficulties with an investigation, or
when the Commission lacks majority support for proceeding with a matter for other
reasons. For example, a dismissal would be appropriate when:

e The seriousness of the alleged conduct is not sufficient to justify the likely cost
and difficulty of an investigation to determine whether a violation in fact
occurred; or

e The evidence is sufficient to support a “reason to believe” finding, but the
violation is minor.

The Commission may also dismiss when, based on the complaint, response, and
publicly available information, the Commission concludes that a violation of the Act did
or very probably did occur, but the size or significance of the apparent violation is not
sufficient to warrant further pursuit by the Commission. In this latter circumstance, the
Commission will send a letter admonishing the respondent. For example, a dismissal
with admonishment would be appropriate when:

e A respondent admits to a violation, but the amount of the violation is not
sufficient to warrant any monetary penalty; or

¢ Acomplaint convincingly alleges a violation, but the significance of the violation

is not sufficient to warrant further pursuit by the Commission.


AGENDA DOCUMENT NO. 07-14

FEDERAL ELECTION COMMISSION
Washington, D.C. 20463

February 27, 2007

MEMORANDUM

TO: The Commission

FROM: Thomasenia P. Duneart 0
Acting General Counsel
Rhonda J. Vosdingh fe Von
Associate General Counse
Mark D. Shonkwiler 944
Assistant General Counsel
Lynn Y. Tran Ut
Attorney

SUBJECT:

=CEIVED
J ELECTION
iSSION

1$
SE TARIAT

2001 FEB 27 A % 52

REENDA ITER
for Keating of D3-0/- 07 |

SUBMITTED LATE

Draft Proposed Policy Statement Regarding Commission Action in Matters at the

Initial Stage in the Enforcement Process

Please find attached a draft Proposed Policy Statement Regarding Commission Action in
Matters at the Initial Stage in the Enforcement Process. The Office of General Counsel has been
asked to submit this document to the Commission Secretary in anticipation of the Open Session
on March 1, 2007.

Attachment


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C. “No reason to beli

The Commission will make a determination of “no reason to believe” a violation
has occurred when the available information does not provide a basis for proceeding with
the matter. The Commission finds “no reason to believe” when the complaint, any
response filed by the respondent, and any publicly available information, when taken
together, fail to give rise to a reasonable inference that a violation has occurred, or even if ©
the allegations were true, would not constitute a violation of the law. For example, a “no
reason to believe” finding would be appropriate when:

e A violation has been alleged, but the respondent’s response or other evidence

convincingly demonstrates that no violation has occurred;

e Acomplaint alleges a violation but is either not credible or is so vague that an

investigation would be effectively impossible; or

¢ Acomplaint fails to describe a violation of the Act.

If the Commission, with the vote of at least four Commissioners, finds that there
is “no reason to believe” a violation has occurred or is about to occur with respect to the
allegations in the complaint, the Commission will close the file and respondents and the
complainant will be notified.

D. Conclusion

This policy enunciates and describes the Commission’s standards for actions at
the point of determining whether or not to open an investigation or to enter into
conciliation with respondents prior to a finding of probable cause to believe. The policy
does not confer any rights on any person and does not in any way limit the right of the

Commission to evaluate every case individually on its own facts and circumstances.


COIDNAARWN

ee
- oO

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FEDERAL ELECTION COMMISSION

11 CFR Part 111 201 FEB 21 A % 52
[NOTICE 2007- ]

STATEMENT OF POLICY REGARDING
COMMISSION ACTION IN MATTERS AT THE
INITIAL STAGE IN THE ENFORCEMENT PROCESS

AGENCY: Federal Election Commission

ACTION: Statement of Policy

SUMMARY: The Federal Election Commission (“Commission”) is issuing a
Policy Statement to clarify the various ways that the Commission
addresses Matters Under Review (“MURs”’) at the initial stage of
enforcement proceedings. The Commission may take any of the
four following actions at this stage: (1) find “reason to believe,”
(2) “dismiss,” (3) “dismiss with admonishment,” and (4) find “no
reason to believe.”

EFFECTIVE

DATE: [Insert Date of Publication in Federal Register]

FOR FURTHER

INFORMATION

CONTACT: Mark Shonkwiler, Assistant General Counsel, or Lynn Tran,

Attorney, Enforcement Division, Federal Election Commission,
999 E Street N.W., Washington, D.C. 20463, (202) 694-1650 or

(800) 424-9530.


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SUPPLEMENTARY
INFORMATION:

The Federal Election Campaign Act of 1971, as amended, 2 U.S.C. § 431 et seq.
(“FECA” or “the Act”), grants the Commission “exclusive jurisdiction with respect to
civil enforcement” of the provisions of the Act and Chapters 95 and 96 of Title 26.

2 U.S.C. § 437c(b)(1). Enforcement matters come to the Commission through
complaints from the public; information ascertained in the ordinary course of the
Commission’s supervisory responsibilities, including referrals from the Commission’s
Reports Analysis and Audit Divisions; referrals from other government agencies; and
self-reported submissions.

The FECA provides that “upon receiving a complaint” or upon the basis of
information ascertained in the course of carrying out its supervisory responsibilities, the
Commission “shall make an investigation of such alleged violation” of the Act where the
Commission, with the vote of four members, determines that there is “reason to believe
that a person has committed, or is about to commit” a violation of the Act. 2 U.S.C.

§ 437g(a)(2); see also 11 C.F.R. § 110.10(f). Commission “reason to believe” findings
have caused confusion in the past because they have been viewed as definitive
determinations that a respondent violated the Act. In fact, “reason to believe” findings
indicate only that the Commission found sufficient legal justification to open an
investigation to determine whether a violation of the Act has occurred. Indeed, the
Commission has recommended that Congress modify the FECA to clarify this point. See
Legislative Recommendations in 2003 and 2004 FEC Annual Reports. Other kinds of

dispositions at this preliminary stage would also benefit from clarification to ensure