August 2006 Federal Election Commission Volume 32, Number 8

Table of Contents Court Cases

Davis v. FEC

Jack Davis, a candidate for the 

House of Representatives in New 

York’s 26th District, has asked the 

U.S. District Court for the District 

of Columbia to declare certain 

provisions of the Bipartisan Campaign Reform Act (BCRA) known 

as the “Millionaires’ Amendment” 

unconstitutional, and to issue an 

injunction barring the FEC from 

enforcing those provisions.

Background

Under the Millionaires’ Amendment, candidates who spend more 

than certain threshold amounts of 

their own personal funds on their 

campaigns might render their opponents eligible to receive contributions from individuals at an 

increased limit. 2 U.S.C. 441a-1. 

For House candidates, the threshold amount is $350,000. This level 

of personal campaign spending 

could trigger increased limits 

for the self-financed candidate’s 

opponent depending upon the 

opponent’s own campaign expenditures from personal funds and 

the amount of funds the candidate 

has raised from other sources. If 

increased limits are triggered, then 

the eligible candidate may receive 

contributions from individuals 

(continued on page 2)

 Court Cases

 1 Davis v. FEC

 2 FEC v. Club for Growth, Inc.

 3 Randall v. Sorrell

 Compliance

 1 Policy Statement on

 Payroll Deduction

 Recordkeeping

 5 Advisory Opinions

 9 Nonfilers

 Information

9 FEC Welcomes New Staff Director

 Publications

 9 Annual Report 2005

 9 Shays Supplement

 10 Roundtable Workshop

 11 Index

Compliance

(continued on page 8)

Policy Statement on Payroll 

Deduction Recordkeeping

On July 7, 2006, the Commission published a Statement of 

Policy to announce that retaining 

signed payroll deduction authorization forms (PDAs) is not the 

only way committees can satisfy 

the recordkeeping requirements 

for the resulting contributions. 71 

FR 38513. The statement explains 

that other evidence may be acceptable, including records of the 

transmittal of funds from employers or collecting agents, such 

as spreadsheets, computerized 

records, wire transfer records, or 

other written or electronic records.

The Commission still considers 

the retention of PDAs to be a good 

recordkeeping practice and in 

some cases PDAs may serve as the 

best documentation of an authorized deduction.

Background

Corporations, labor organizations, and trade associations are 

prohibited from making contributions in connection with a federal 

election, but may establish and 

support a separate segregated fund 

(SSF). See 11 CFR 144.2(f). The 

sponsoring organization may—

among other things—use a payroll 
Federal Election Commission RECORD August 2006

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)

Michael E. Toner, Chairman

Robert D. Lenhard, 

 Vice Chairman

David M. Mason, Commissioner

Hans A. von Spakovsky, 

 Commissioner

Steven T. Walther, Commissioner

Ellen L. Weintraub, Commissioner

Patrina M. Clark,

 Staff Director

Lawrence H. Norton, 

 General Counsel

Published by the Information

 Division

Greg J. Scott, Assistant Staff

 Director

Meredith E. Metzler, Editor

http://www.fec.gov

at three times the usual limit of 

$2,100 per election and may benefit from party coordinated expenditures in excess of the usual limit.

Complaint

On March 30, 2006, the plaintiff, Jack Davis, declared his candidacy for the House seat in New 

York’s 26th District. Mr. Davis 

intends to spend over $350,000 of 

his own funds on his campaign, 

expenditures which will trigger the 

requirements of the “Millionaires’ 

Amendment,” and may result in 

increased contribution limits for 

his opponent. 

Mr. Davis contends that the 

Millionaires’ Amendment infringes upon his First Amendment 

right to free speech and his Fifth 

Amendment right to equal protection. Mr. Davis also alleges that 

the additional disclosure requirements for self-financed candidates 

required by the Millionaires’ 

Amendment impose an unfair 

burden on his right to speak in 

support of his own candidacy. He 

also asserts that the Millionaires’ 

provisions “dramatically tilt the 

field” in favor of incumbents by 

allowing larger contributions and 

by not adequately factoring in 

large “war chests” of campaign 

funds raised in previous elections 

in determining whether a candidate is eligible to receive contributions at an increased limit.

On July 11, 2006, the district court granted the plaintiff’s 

request that the case be heard by 

a three-judge panel of the U.S. 

Court of Appeals for the District 

of Columbia Circuit, as required 

by 2 U.S.C. 437h.

—Gary Mullen

FEC v. Club for Growth, Inc.

On June 5, 2006, the U.S. 

District Court for the District of 

Columbia issued a memorandum 

opinion and order denying Club 

for Growth, Inc.’s (the Club’s) 

motion to dismiss. In its motion to dismiss, the Club claimed 

that because the Federal Election Commission (FEC) failed to 

follow proper procedures before 

bringing this lawsuit, the court 

lacked subject-matter jurisdiction. 

In the opinion denying the Club’s 

motion, the court found that the 

FEC was in compliance with the 

enforcement provisions of the Federal Election Campaign Act (the 

Act). Specifically, the court found 

that the FEC’s failure to provide 

timely notice of the administrative complaint constituted harmless error; the agency was entitled 

to deference in its conciliation 

procedures; and the Commission 

properly ratified its decision to file 

suit.

Background

The Democratic Senatorial 

Campaign Committee filed an 

administrative complaint with the 

Commission alleging, among other 

things, that the Club, a Virginia 

corporation registered with the 

Internal Revenue Service (IRS) as 

a political organization under Section 527 of the Internal Revenue 

Code, had improperly failed to 

register with the FEC as a political 

committee. On October 19, 2004, 

the Commission authorized an 

administrative investigation after 

finding reason to believe that the 

Club accepted contributions and 

made expenditures in excess of 

the $1,000 registration threshold, 

and violated the Act by failing to 

register as a political committee.

The Club received notification 

on July 21, 2005, from the FEC 

General Counsel that the Commission had found probable cause 

to believe the Club violated the 

Act and authorized filing a lawsuit in District Court if the parties 

could not reach an agreement. On 

September 19, 2005, the General 

Counsel notified the Club that the 

Commission rejected their September 14, 2005, offer and filed 

suit. See November 2005 Record, 

page 1.

Court Decision

The Club made three distinct 

arguments in support of its motion 

to dismiss, each rejected by the 

court for the reasons set out below.

First, the Club argued the FEC 

failed to provide timely notice of 

the allegations made against it. 

Under the Act, the Commission 

shall notify any person alleged 

to have committed a violation 

within five days after the FEC’s 

receipt of the complaint. 2 U.S.C. 

437g(a)(1). In this case, the FEC 

sent notice of the administrative 

complaint to Stephen Moore, who 

served as the Club’s President, as 

well as Treasurer of the Club for 

Growth, Inc. PAC (the PAC). The 

notification was addressed to Mr. 

Court Cases

(continued from page 1)
August 2006 Federal Election Commission RECORD

3

Moore as Treasurer of the PAC. 

After realizing the error, the FEC 

sent notice to Mr. Moore again, 

this time addressing the document 

to him as President of the Club. In 

its opinion, the court did not agree 

with the Club’s claim that this 

error resulted in untimely notification. Though the original (and 

timely) notice was sent to him 

in his capacity as PAC Treasurer 

rather than as President of the 

Club, the court noted that through 

Mr. Moore, the Club had notice.

In the motion to dismiss, the 

Club also argued that the FEC’s 

conciliation proposals were not 

made in good faith. The Act requires the Commission to attempt, 

for a period of at least 30 days, 

to correct or prevent violations 

by informal means, and to enter 

into a conciliation agreement with 

any person involved. 2 U.S.C. 

437g(a)(4)(A)(i). In assessing 

whether the FEC complied with 

this statutory provision, the court 

afforded high deference to the 

agency’s action. The court’s opinion also noted that the Club provided no evidence or argument to 

support this claim, except that they 

did not like the FEC’s conciliatory 

offers. The opinion also reasoned 

that the Act requires the Commission to come to the conciliation 

table, but does not instruct it on 

the nature of its offerings. The 

court agreed with the FEC’s argument that, in showing deference, 

the court should not scrutinize the 

FEC’s conciliation offers. 

Lastly, the Club argued that 

the Commission violated the Act 

by authorizing the lawsuit prior 

to the completion of the conciliation process. During the course of 

the conciliation process, the FEC 

General Counsel sent an undated 

letter to the Club indicating that 

the Commission had authorized 

suit be filed in District Court if 

the parties were unable to reach 

an agreement. Although the court 

held that the initial contingent suit 

authorization, prior to completion 

of the conciliation process, was 

contrary to law under 2 U.S.C. 

437g(a)(6)(A), it found that the 

FEC cured the defective vote by 

later ratifying its first action. On 

December 5, 2005, the Commission reaffirmed authorization for 

the General Counsel to pursue 

litigation. In its opinion, the court 

noted that the FEC’s reaffirmation 

constituted a subsequent review of 

evidence, and since the December 

5 action came after 30 days of 

conciliation efforts, it was consistent with the requirements of the 

Act.

U.S. District Court for the District of Columbia, 05-1851(RMU).

—Elizabeth Kurland

Randall v. Sorrell (04-1528, 

04-1530 and 04-1697)

On June 26, 2006, the U.S. 

Supreme Court issued a ruling 

in Randall et al. v. Sorrell et. al. 

finding that Vermont state laws 

that limit contributions and expenditures for nonfederal elections are 

unconstitutional.

Background

In 1997, Vermont enacted new 

campaign finance laws (Pub. Act. 

No. 64 (Act 64)) that imposed 

mandatory expenditure limits on 

the total amount a candidate for 

state office could spend during 

a two-year election cycle. The 

expenditure limits ranged from 

$2,000 to $300,000 depending on 

the state office sought. Incumbents seeking re-election were 

limited to spending no more than 

85 to 90 percent of the applicable limit. Expenditures over 

$50 made by others on behalf of 

a candidate counted against the 

candidate’s expenditure limit if 

they were facilitated, solicited 

or approved by the candidate’s 

campaign, and also counted as a 

contributions in such an instance. 

Party expenditures that “primarily” benefited six or fewer candidates also counted against the 

candidate’s expenditure limit, as 

well as the party’s contribution 

limit. 

In addition to expenditure limits, Act 64 also imposed contribution limits ranging from $200 to 

$400 on individuals and political 

committees (including political 

parties) making donations to candidates and $2,000 on donations 

to parties. The national, state and 

local affiliates of a party were considered affiliated for purposes of 

the contribution limits. Although 

the expenditure limits in Act 64 

were indexed for inflation, the 

contribution limits were not. 

Act 64 was challenged in the 

U.S. District Court for the District of Vermont by a group of 

individual contributors, voters, 

candidates and political committees. The district court ruled that 

Act 64’s expenditure limits were 

unconstitutional on First Amendment grounds, but upheld most of 

the contribution limits. 

On appeal, a divided panel of 

the U.S. Court of Appeals for the 

Second Circuit upheld the contribution limits, and concluded that 

the expenditure limits “may” be 

constitutional. The appeals court 

found that the Vermont law was 

supported by compelling interests 

in preventing corruption, and the 

appearance of corruption, and an 

interest in limiting the amount of 

time state officials must spend 

raising funds for their campaigns.1

 

The court of appeals remanded the 

case to the district court for it to 

determine whether the expenditure limits were narrowly tailored. 

Before the district court was able 

to take action on the remand, the 

parties sought review of the court 

of appeals ruling by the Supreme 

Court.

(continued on page 4)

1

 Landell v. Sorrell, 118 F. Supp. 2d 470 

(Vt. 2000).
Federal Election Commission RECORD August 2006

4

Supreme Court Ruling

In its petition, the respondents 

asked the Supreme Court to overrule Buckley v. Valeo, 424 US 1 

(1976), or in the alternative, to 

distinguish Buckley from the present case. In Buckley , the Supreme 

Court upheld federal election 

contribution limitations as constitutional, but held that expenditure 

limitations then contained in the 

Federal Election Campaign Act 

violated the First Amendment. 

The Court noted in Buckley that 

the need to prevent “corruption 

and the appearance of corruption” 

provided a sufficient justification 

for federal contribution limitations, but not for expenditure 

limitations because they impose a 

significantly more severe restriction on First Amendment rights. 

In its ruling in Randall v. Sorrell, written by Justice Breyer, 

joined in full by Chief Justice 

Roberts, and joined in part by 

Justice Alito, the Court declined 

to overrule or distinguish Buckley. Instead, the Court concluded 

that the expenditure limits were 

not substantially different from 

those at issue in Buckley, and that 

Vermont’s justification for imposing the limits was similar to Congress’ rationale for imposing the 

expenditure limits overturned in 

Buckley. The Court also rejected 

the argument that expenditure 

limits are necessary to reduce the 

time spent fundraising, noting that 

the Buckley court had considered 

and rejected this justification for 

expenditure limits.

In regard to Act 64’s contribution limits, the Supreme Court 

held that the limits in question 

were so severe as to violate the 

First Amendment. Basing their 

opinion again on Buckley, the 

Court said that it had to “determine whether Act 64’s contribution limits prevented candidates 

from ‘amassing the resources 

necessary for effective [campaign] 

advocacy’” by being too low 

and strict. In reviewing Act 64’s 

limits, the Court noted that “contribution limits that are too low 

can also harm the electoral process 

by preventing challengers from 

mounting effective campaigns,” 

concluding that the Vermont law 

limited contributions to an amount 

well below the limits at issue in 

Buckley, that the limits were well 

below the lowest amount ever 

previously upheld, and that they 

were the lowest limits in the nation. Based on its determination 

that these considerations amounted 

to “danger signs” that the Vermont contribution limits might 

be unacceptably low, the Court 

then considered whether the limits 

were “closely drawn” to match 

Vermont’s interests in adopting the 

law.

The Court relied on five factors 

in deciding that the limits were not 

narrowly tailored: (1) the significant restrictions on funding for 

challengers, (2) the harm caused to 

contributors in terms of the right 

to associate in a political party, as 

represented by the limits imposed 

on the ability of a Vermont political party to assist its candidates’ 

campaigns, (3) the treatment by 

Act 64 of certain volunteer expenses for travel and campaign 

materials as contributions, rather 

than as exempted expenses, (4) the 

lack of adjustment of the contribution limits for inflation, and 

(5) the lack of justifications that 

would warrant a low and restrictive contribution limit. Taken 

together, the Court ruled that these 

five factors led to the conclusion 

that Act 64’s contribution limits were not narrowly tailored to 

prevent corruption, but instead 

threatened to impose excessive 

burdens on the First Amendment 

interests of candidates, parties and 

volunteers, and thus, violated the 

First Amendment.

Justice Alito filed an opinion 

concurring in the judgment and 

joining the opinion in part, stating 

his separate view that the respondents did not adequately present 

reasons why the Court should 

reexamine Buckley. Justice Kennedy filed an opinion concurring 

in the Court’s judgment but noting his skepticism of the current 

campaign finance legal system. 

Justice Thomas, joined by Justice 

Scalia, filed an opinion concurring 

in the Court’s judgment striking 

down Act 64 as unconstitutional, 

but disagreeing with the Court’s 

rationale on the grounds that, in 

their view, Buckley was wrongly 

decided. Justice Souter, joined 

by Justice Ginsberg and in part by 

Justice Stevens, filed a dissenting opinion in which they explain 

that they would have upheld 

Vermont’s contribution limits, and 

would have declined to rule on the 

expenditure limits until further 

fact-finding was completed by the 

district court. Justice Stevens 

filed a dissenting opinion stating 

his belief that Buckley’s decision 

on expenditure limits was wrong 

and should be overruled. 

—Dorothy Yeager

Court Cases

(continued from page 3)

Federal Register

Federal Register notices are 

available from the FEC’s Public 

Records Office, on the web 

site at www.fec.gov/law/law_

rulemakings.shtml and from the 

FEC Faxline, 202/501-3413.

Notice 2006-11

Statement of Policy; 

Recordkeeping Requirements for 

Payroll Deduction Authorizations 

(71 FR 38513, July 7, 2006)
August 2006 Federal Election Commission RECORD

5

Advisory

Opinions

Advisory Opinion 2006-10

LLC’s PSAs Permissible 

under FECA

Public service announcements 

created and broadcast by EchoStar Satellite LLC (“EchoStar”) 

that feature federal candidates are 

not coordinated communications 

because they would qualify for the 

charitable solicitation exemption 

provided that both the solicitations 

and the organizations for which 

the funds are solicited comply 

with the requirements of 11 CFR 

300.65. 

Background

EchoStar, a limited liability 

company treated as a corporation for tax and FECA purposes, 

provides satellite TV service under 

the brand name “DISH Network.” 

See 11 CFR 110.1(g). EchoStar 

plans to air public service announcements (“PSAs”) nationwide 

featuring prominent Americans, 

including incumbent Members of 

Congress, promoting and soliciting donations to charitable organizations. 

EchoStar will write the script 

for the PSAs, which will not 

include campaign materials or 

expressly advocate the election or 

defeat of a federal candidate. The 

PSAs will not mention a political 

party, campaign, or election, nor 

will the PSAs solicit contributions 

for any political campaign or committee. Furthermore, EchoStar 

will avoid making electioneering 

communications by airing the 

PSAs outside of the candidate’s 

jurisdiction or prior to the applicable electioneering communication 

time period.

Analysis

The Act and Regulations define 

“contribution” and “expenditure” 

to include any gift of money or 

“anything of value” for the purpose of influencing a federal 

election. 2 U.S.C. 431(8)(A) and 

(9)(A); 11 CFR 100.52(a) and 

100.111(a). An in-kind contribution includes an expenditure made 

by a person in cooperation with 

or at the request or suggestion 

of a candidate or the candidate’s 

committees or agents. 2 U.S.C. 

441a(a)(7)(B)(i). A coordinated 

communication is considered an 

in-kind contribution by the person paying for the communication unless the communication 

falls within an exception from 

the definition of contribution. 2 

U.S.C. 441a(a)(7)(B)(i); 11 CFR 

109.21(b). The Act and Commission regulations prohibit a 

corporation from making any 

contribution or expenditure in connection with a federal election. 2 

U.S.C. 441b(a); 11 CFR 114.1(a); 

11 CFR 114.2(b)(1) and (b)(2). 

Thus a corporation is prohibited 

from paying for a coordinated 

communication. See 11 CFR 

109.22.

A communication may be considered coordinated if it fulfills a 

three-prong test. First, the communication must be paid for, in 

whole or in part, by a person other 

than the federal candidate or the 

candidate’s committee. Second, 

the communication must fulfill at 

least one of six conduct standards 

set forth in 11 CFR 109.21(d). 

Third, the communication must 

meet at least one of the four 

content standards in 109.21(c). 

See 71 FR 33190 (June 8, 2006) 

(publishing revised Commission 

regulations regarding coordinated 

communications). The definition 

of coordinated communications 

contains exemptions, including 

one for certain endorsements and 

solicitations by federal candidates. 

See 11 CFR 109.21(f) – (h).

The regulations exempt from 

the definition of “coordinated 

communications” public communications in which the federal candidate solicits funds for a 501(c) 

non-profit organization as long 

as the organization (1) does not 

engage in activities in connection 

with an election or (2) the organization’s principal purpose is not to 

conduct election activity, and the 

solicitation is not to raise funds 

for activities in connection with an 

election. 11 CFR 109.21(g) and 

300.65. To qualify for this exemption, the public communications 

may not promote, support, attack, 

or oppose the soliciting candidate 

or the candidate’s opponent. 11 

CFR 109.21(g).

EchoStar’s PSAs are satellite communications and thus are 

within the definition of a public 

communication. 11 CFR 100.26. 

Commission 

Calendar Always 

Up-to-Date 

 Between issues of the Record, 

you can stay up-to-date on the 

latest FEC activity by visiting 

the Commission Calendar on 

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

gov/Fec_calendar/maincal.cfm. 

The Calendar lists Commission 

meetings, reporting deadlines, 

conferences and outreach events, 

advisory opinion and rulemaking 

comment periods and other useful 

information. Each calendar entry 

links directly to the relevant 

documents, so you can quickly 

access detailed information on the 

subjects that interest you. 

 While you’re visiting www.fec.

gov, be sure to explore the rest 

of our site to review the latest 

campaign finance reports and 

data, research enforcement actions 

and litigation, read press releases 

and get help complying with the 

law. Visit today and add our site to 

your favorites.

(continued on page 6)
Federal Election Commission RECORD August 2006

6

Advisory Opinions

(continued from page 5)

Advisory Opinion 2006-17

Berkeley Electric 

Cooperative, Inc. (BEC)

An electric cooperative may solicit its executive and administrative personnel and its members for 

contributions to its own separate 

segregated fund (SSF) and to the 

SSF of an affiliated organization. Furthermore, the cooperative 

may use proposed forms to solicit 

contributions from its executive 

and administrative personnel and 

its employees who are members, 

and it may use payroll deduction 

to collect and forward the contributions.

Background

The Berkeley Electric Cooperative, Inc. (BEC) is an incorporated 

electric distribution cooperative. 

BEC is composed of dues-paying 

members who agree to purchase 

electricity from the cooperative 

and comply with all other provisions of the organization’s Articles 

of Incorporation and Bylaws. 

Many of BEC’s employees, including executive and administrative personnel, are also members 

of BEC. The Berkeley Electric 

Cooperative, Inc. Political Action 

Committee (BEC PAC) is registered with the FEC as a federal 

PAC.

The National Rural Electric 

Cooperative Association (NRECA) 

is a non-profit corporation under 

the District of Columbia Cooperative Association Act. NRECA 

was established to provide informational services to rural electric 

cooperatives and others seeking 

the advancement and development of rural electrification in the 

United States. ACRE is NRECA’s 

federally registered PAC. The 

Commission previously determined that NRECA is affiliated 

with its member cooperatives.1 

BEC is a member cooperative of 

NRECA. Thus, BEC is affiliated 

with NRECA.

BEC wishes to use a specific 

form to solicit contributions for 

BEC PAC and ACRE. The proposed form would offer three options for contributing:

• Recommended contribution 

amounts to be deducted from the 

employee’s paycheck each pay 

period;

•A one-time contribution, determined by the contributor; or

• An election not to participate.

The form notes that the contribution amounts are merely suggestions and employees may elect to 

give more or less. Additionally, 

the form indicates the voluntary 

nature of contributions and the 

political purpose of BEC PAC.

BEC has asked the Commission 

to address the following questions:

• May BEC solicit its executive 

and administrative personnel, and 

its members, including members 

who are employees, for contributions to BEC PAC?

• May BEC solicit its executive 

and administrative personnel, and 

its members, including members 

who are employees, for contributions to ACRE?

• If BEC may solicit these persons 

for contributions, may it use proposed solicitation forms, and may 

it collect contributions from them 

by via payroll deduction plans?

Campaign Guides 

Available

 For each type of committee, a 

Campaign Guide explains, in clear 

English, the complex regulations 

regarding the activity of political 

committees. It shows readers, 

for example, how to fill out FEC 

reports and illustrates how the law 

applies to practical situations.

 The FEC publishes four 

Campaign Guides, each for a 

different type of committee, 

and we are happy to mail your 

committee as many copies as 

you need, free of charge. We 

encourage you to view them on 

our web site www.fec.gov.

 If you would like to place an 

order for paper copies of the 

Campaign Guides, please call the 

Information Division at 800/424-

9530. 1

 See Advisory Opinion 1999-40 for 

additional information.

The federal candidates will appear in the PSAs to solicit funds 

for charitable organizations and 

will not promote, support, attack, 

or oppose their candidacies or 

those of their opponents. See AO 

2003-25. As a result, the PSAs 

will qualify for the solicitation 

exemption as long as the organizations qualify as 26 U.S.C. 501(c) 

organizations and the solicitations 

comply with 11 CFR 300.65. See 

11 CFR 109.21(g). 

Additionally, if the PSAs are 

distributed more than 90 days 

before a Congressional candidate’s 

election or 120 days before a 

presidential candidate’s election, 

or outside the featured candidate’s 

jurisdiction, the PSAs would not 

fulfill the content prong of the 

coordination test regardless of 

their subject matter. See 11 CFR 

109.2(c)(4); 71 FR 33190 (June 8, 

2006). However, if the communications were distributed during 

the applicable time period within 

the candidate’s jurisdiction and 

did not solicit funds for a 501(c) 

organization, the PSAs would be 

considered coordinated communications.

Since the proposed PSAs qualified for the charitable solicitation 

exemption, the Commission did 

not consider the application of the 

press exemption. 

Date Issued: June 30, 2006

Length: 7 pages

—Meredith E. Metzler
August 2006 Federal Election Commission RECORD

7

Analysis

May BEC solicit its executive 

and administrative personnel and 

its members, including members 

who are employees, for contributions to BEC PAC?

Yes. Under the Act and Commission regulations, a membership 

organization or a cooperative may 

solicit contributions to its SSF 

from its members and its executive 

and administrative personnel. See 

2 U.S.C. 441(b)(4)(C) and 11 CFR 

114.7(a). Therefore, BEC may 

solicit its executive and administrative personnel, and its members, including employees who 

are members, for contributions to 

BEC PAC.

May BEC solicit its executive 

and administrative personnel and 

its members, including members 

who are employees, for contributions to ACRE?

Yes. In Advisory Opinion 

1999-40, the Commission determined that, as affiliates of 

NRECA, distribution cooperatives 

are local units of NRECA and 

may act as collecting agents for 

contributions to NRECA’s SSF, 

ACRE. Thus, BEC may solicit, 

collect and forward contributions 

from its restricted class for ACRE. 

Because BEC and NRECA are affiliated, their SSFs are considered 

one political committee and share 

contribution limitations. See 11 

CFR 114.7(k)(1).

If BEC may solicit these persons for contributions, may it use 

proposed solicitation forms, and 

may it collect contributions from 

them by via payroll deduction 

plans?

Yes. Under the Act and Commission regulations, SSFs must 

inform employees of the political 

purpose of the fund and indicate 

that any employee or member 

solicited may refuse to contribute 

without reprisal. Additionally, it 

must be clear that any contribution guidelines are merely suggestions and the individual may 

contribute more or less or nothing 

and individuals will not be advantaged or disadvantaged in accord 

with the amount they contribute. 

See 11 CFR 114.5. All written 

solicitations for contributions to 

the organization’s PAC that is addressed to an employee must contain statements that comply with 

these requirements. The Commission determined that the proposed 

form meets all FEC requirements 

in this regard.2

The Act and Commission regulations allow a corporation to enroll members of its restricted class 

in a payroll deduction plan that 

deducts contributions from payroll 

checks to make contributions to 

the SSF. See 11 CFR 114.2(f)(4). 

Therefore, BEC may use payroll 

deduction to collect and forward 

contributions to BEC PAC from 

solicitable class. Additionally, 

BEC may use payroll deductions 

to collect contributions to ACRE 

because it is collecting agent for 

ACRE. BEC may pay any and all 

costs incurred for soliciting and 

transmitting funds to ACRE since 

they are affiliated.3

Length: 8 pages

Date: June 23, 2006

—Michelle Ryan

2

 The proposed form identifies five different categories of employees: supervisory, hourly employees, non-supervisory hourly employees, supervisory 

salaried employees, non supervisory 

salaried employees and salaried staff. 

The Commission advised BEC to 

modify the form to clarify that BEC is 

only soliciting contributions from its 

solicitable class.

3

 See Advisory Opinion 2000-15 for 

additional information regarding the 

ability of affiliated entities to act as collecting agents, using a payroll deduction 

plan.

Enforcement Query 

System Available on 

FEC Web Site

 The FEC continues to update 

and expand its Enforcement 

Query System (EQS), a webbased search tool that allows 

users to find and examine public 

documents regarding closed 

Commission enforcement matters. 

Using current scanning, optical 

character recognition and text 

search technologies, the system 

permits intuitive and flexible 

searches of case documents and 

other materials. 

 Users of the system can search 

for specific words or phrases 

from the text of all public case 

documents. They can also 

identify single matters under 

review (MURs) or groups of 

cases by searching additional 

identifying information about 

cases prepared as part of the 

Case Management System. 

Included among these criteria 

are case names and numbers, 

complainants and respondents, 

timeframes, dispositions, legal 

issues and penalty amounts. The 

Enforcement Query System may 

be accessed on the Commission’s 

web site at www.fec.gov.

 Currently, the EQS contains 

complete public case files for all 

MURs closed since January 1, 

1999. In addition to adding all 

cases closed subsequently, staff is 

working to add cases closed prior 

to 1999. Within the past year, 

Alternative Dispute Resolution 

(ADR) cases were added to the 

system. All cases closed since the 

ADR program’s October 2000 

inception can be accessed through 

the system.
Federal Election Commission RECORD August 2006

8

Compliance

(continued from page 1)

deduction system to collect and 

forward contributions from members of its restricted class to the 

SSF. 11 CFR 114.2(f)(4)(i). The 

SSF must maintain records allowing the Commission to determine 

that the source and amount of 

contributions are accurately reported. See 11 CFR 104.14(b)(1) 

and 104.8(b). In the past, the 

Commission has required original 

signed PDAs as proof that an SSF 

had fulfilled its recordkeeping requirements for payroll deductions 

under 11 CFR 104.14(b)(1).

Evidence of Recordkeeping

As a result of the policy statement, the Commission no longer 

requires original PDAs as the 

sole proof that a committee has 

fulfilled its recordkeeping requirements with respect to payroll 

contributions. The Commission 

continues to encourage committees to retain original PDAs, but 

will now accept other forms of 

documentation including spreadsheets, wire transfer records, or 

other electronic or written records.

—Meredith E. Metzler

Advisory Opinion Request

AOR 2006-21

Application of the Millionaires’ 

Amendment to personal funds 

spent before primary to attack a 

presumptive general election opponent (Senator Maria Cantwell 

and Cantwell 2006, July 11, 2006)

Advisory Opinions

(continued from page 7)

Advisory Opinion 2006-18

Committee May Promote 

Candidate’s Book Sales

A campaign committee may 

incur costs to promote the candidate’s book without violating the 

ban on personal use of campaign 

funds because the candidate will 

donate all royalties to charity.

Background

The Kay Granger Campaign 

Fund seeks to promote the candidate’s children’s book What’s 

Right About America: Celebrating 

Our Nation’s Values using paid 

committee personnel, the committee’s web site and the committee’s 

mailing list of e-mail addresses. 

The committee sought to advertise 

the book on the campaign web 

site and provide information on 

how to order a copy of the book. 

Paid committee personnel would 

plan book-related events, draft 

and send e-mails to the mailing 

list and handle any public or press 

inquiries about the book. The 

costs incurred by the committee 

would be more than a de minimis

expense. The candidate and the 

publisher arranged for all royalNeed FEC Material 

in a Hurry?

 Use FEC Faxline to obtain 

FEC material fast. It operates 

24 hours a day, 7 days a week. 

Hundreds of 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.

ties to be paid directly to 501(c)(3) 

charitable organizations, with the 

candidate reporting income and 

taking deductions to the IRS only 

as required and permitted by tax 

law.

Analysis

A candidate’s campaign committee has wide discretion in the 

use of campaign funds but neither 

the candidate nor any other person 

may use contributions for personal use. 11 CFR 113.1(g) and 

113.2(e)(5). Personal use of campaign funds occurs when a “contribution or amount is used to fulfill 

any commitment, obligation, or 

expense of a person that would exist irrespective of the candidate’s 

election campaign or individual’s 

duties as a holder of Federal office.” 2 U.S.C. 439a(b)(2). An 

author’s book-marketing expenses 

exist irrespective a candidate’s 

campaign, thus ordinarily a 

candidate’s campaign committee may not use contributions to 

pay the expense. See AO 2006-7 

(permitting the use of campaign 

funds to market a candidate’s 

book on the campaign committee’s 

website where the candidate retained the royalties but the committee incurred only de minimis

expense). In this situation, since 

Representative Granger’s royalties 

will be donated to two charitable 

organizations, the committee may 

promote the book using campaign 

funds because the candidate will 

not personally gain from the use of 

campaign assets for the expenses. 

See 11 CFR 113.1(g)(2) (providing that the donation of campaign 

funds to a charitable organization 

is not personal use).

The Commission expressed no 

opinion as to the application of 

House rules or tax law, as those areas fall outside its jurisdiction.

Length: 4 pages

Date: June 23, 2006

—Meredith E. Metzler
August 2006 Federal Election Commission RECORD

9

Information

FEC Names New Staff 

Director

On July 10, 2006, Patrina M. 

Clark began her tenure as Staff Director of the Federal Election Commission, succeeding Acting Staff 

Director Robert Costa. In her new 

position, Ms. Clark is responsible 

for managing the overall operation 

of the Commission.

Prior to her appointment, Ms. 

Clark served as Regional Executive 

Director for Naval District Washington. As the senior civilian official in 

the region, she managed the Human 

Resources, Information Technology, 

Comptroller and Public Affairs offices, among other activities. Before 

her service with the Department of 

the Navy, she held a number of key 

positions with the Internal Revenue 

Service, most recently as Director, 

Cooperative Efforts and Strategic 

Support.

A Texas native, Ms. Clark began 

her undergraduate studies at the 

University of Texas as a National 

Merit Scholar and University of 

Texas Presidential Scholar. She 

completed her undergraduate studies 

at Thomas Edison State College with 

an emphasis in Communications 

and Human Resources Management. 

Ms. Clark has a graduate certificate 

from the Cornell University School 

of Industrial Labor Relations in Human Resources Management and a 

Master’s Certificate in Project Management from George Washington 

University (GWU). She was awarded a joint certificate in Advanced 

Public Policy Leadership from the 

Brookings Institution and GWU, 

and is a graduate of GWU’s Senior 

Executive Development Program. 

She recently completed Georgetown 

University’s Senior Executive Leadership Continuing Studies Certificate 

Program and is certified as a Senior 

Human Resources Professional by 

the Human Resources Certification 

Institute.

Publications

FEC Annual Report 2005

Available Online

The Commission’s Annual Report 

2005 is now available online at 

http://www.fec.gov/pdf/ar05.pdf. 

Printed copies are available. To 

order a free copy, contact the Information Division at 800/424-9530 or 

locally at 202/694-1100.

Shays Rulemaking 

Supplement Available

A Record supplement summarizing the regulatory changes the 

Commission made in the last year as 

a result of the Shays v. FEC litigation is now available on the FEC 

web site. Printed copies are available 

from the Information Division.

Nonfilers

Congressional Committees 

Fail to File Reports

The Fleming for U.S. Senate 

Campaign Committee and the 

Bill Bowlin for Senate Committee 

failed to file 12-Day Pre-Runoff 

reports for the June 27, 2006, 

Senate runoff election in Mississippi. The Maatta for Congress 

Campaign Committee failed to 

file a 12-Day Pre-Runoff report 

for the South Carolina, District 1 

runoff election also held on June 

27, 2006. 

Prior to the reporting deadline, 

the Commission notified committees of their filing obligations. 

Committees that failed to file the 

required reports were subsequently 

notified that their reports had not 

been received and that their names 

would be published if they did not 

respond within four business days.

The Federal Election Campaign 

Act requires the Commission to 

publish the names of principal 

campaign committees if they fail 

to file 12-day pre-election reports 

or the quarterly report due before 

the candidate’s election. 2 U.S.C. 

437g(b). The agency may also pursue enforcement actions against 

nonfilers and late filers on a caseby-case basis.

—Meredith E. Metzler

Back Issues of the 

Record Available on 

the Internet

 This issue of the Record and all 

other issues of the Record starting 

with January 1996 are available 

on the FEC web site as PDF files. 

Visit the FEC web site at http://

www.fec.gov/pages/record.shtml 

to find monthly Record issues. 

 The web site also provides 

copies of the Annual Record Index

for each completed year of the 

Record, dating back to 1996. The 

Annual Record Index list Record

articles for each year by topic, 

type of Commission action and, in 

the case of advisory opinions, the 

names of individuals requesting 

Commission action.

You will need Adobe® Acrobat® Reader software to view the 

publication. The FEC’s web site 

has a link that will take you to 

Adobe’s web site, where you can 

download the latest version of the 

software for free.
Federal Election Commission RECORD August 2006

10

Workshop on General 

Election Filing Requirements

The Commission will host a 

roundtable workshop at its Washington, DC, headquarters this fall on 

general election filing requirements. 

Intended as a general session for 

all types of political organizations 

and committees, this workshop will 

address special issues that arise with 

FEC filing in the last months of the 

election year. Workshop topics will 

include:

• Tricky filing schedules for all FEC 

filers in October

• The Post-General Report required 

of all FEC filers

• The Post-Election Detailed Summary Page (filed by campaigns)

• 48-hour notices of contributions 

(filed by campaigns)

• 48-hour and 24-hour reports of 

independent expenditures (filed by 

PACs and parties) and

• 24-hour notices of electioneering 

communications (filed by individuals and 527 organizations)

Immediately following the 

workshop, attendees will have the 

opportunity to talk with the analyst 

who reviews their report at a “meet 

and greet” with campaign finance 

analysts from the FEC’s Reports 

Analysis Division. 

The workshop is scheduled for 

September 6, 2006, from 9:30 to 

11:00 a.m. at the FEC’s headquarters 

in Washington, DC, with the “meet 

and greet” following immediately 

afterwards from 11:00 to 11:30 a.m. 

There is no charge. Attendance is 

limited to 30 people and pre-registration is required. Registration is 

accepted on a first-come, first-served 

basis. Please call (202/694-1100) 

or e-mail Conferences@fec.gov the 

Commission prior to registration 

to ensure space is available. The 

registration form is available on the 

Outreach

FEC’s web site at http://www.fec.

gov/outreach.shtml#roundtables and 

from Faxline, the FEC’s automated 

fax system at 202/501-3414 (request document 590). For questions 

about the program, please e-mail 

Conferences@fec.gov or call the 

Information Division at 1-800/424-

9530 (press 6) or locally at 202/694-

1100.

—Dorothy Yeager

All political committees should provide a current e-mail 

address on their Statement of Organization (FEC Form 1), and 

committees that file electronically must provide one. It’s important 

to keep all contact information on the Statement of Organization 

up-to-date, because the FEC uses it to send committees 

important compliance information. As the agency begins to 

communicate with committees electronically, keeping the 

committee’s e-mail address current will be even more important. 

E-mail communication will allow the agency to provide more 

timely and tailored information to committees, in addition to 

saving tax dollars. Watch for more information about this exciting 

new program and be sure to keep your committee’s e-mail 

address current on your Form 1. The form is available from the 

Commission or on its web site at www.fec.gov/info/forms.shtml

A message from the FEC Information Division

www.fec.gov / 800-424-9530 / info@fec.gov
August 2006 Federal Election Commission RECORD

11

The first number in each citation refers to the numeric month of 

the 2006 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 four.

Index

Advisory Opinions

2005-16: Press Exemption Applied 

to Web Sites, 1:11

2005-18: Candidate May Host Radio 

Program, 1:12

2005-19: Radio Program Qualifies 

for Press Exemption, 2:3

2005-20: Payroll Deduction for LLP 

PAC, 3:8

2006-1: Committee May Accept 

Discount in Normal Course of 

Business, 4:4

2006-2: LLC Does Not Qualify as 

Membership Organization, 4:4

2006-3: Common Username and 

Password Acceptable for SSF Web 

Site, 5:6

2006-4: Candidate Contributions to 

Ballot Initiative Committee, 5:6

2006-6: Millionaires’ Amendment 

Applied to California Special 

Election, 4:5

2006-7: Committee May Promote 

Candidate’s Book on Web Site, 

6:4

2006-8: Corporation Collecting and 

Forwarding Contributions from 

Individuals to Political Committees, 6:4

2006-9, 6:5

2006-10: LLC’s PSAs Permissible 

under FECA, 8:5

2006-11: Allocation of Payment for 

Mass Mailings, 6:5

2006-12: Labor Organization Affiliation During Merger, 6:6

2006-13: Candidate’s Compensation 

According to Firm’s Plan is not a 

Contribution, 6:7

2006-15: Domestic Subsidiaries of 

Foreign Corporation May Donate 

to State and Local Elections, 7:5

2006-16: Misappropriated Funds, 

6:8

2006-17: Berkeley Electric Cooperative, Inc., 8:6

2006-18: Committee May Promote 

Candidate’s Book Sales, 8:8

2006-19: Local Party Communications Not FEA, 7:5

Compliance

Administrative Fine Program Extended, 1:15

Administrative Fine Update, 5:9

Alternative Dispute Resolution Update, 1:15, 2:7, 3:9, 5:10, 7:9

MURs 5305 & 5398: Corporate and 

Excessive Contributions in the 

Name of Another, 5:8

MUR 5388: Accepting Excessive 

Contributions, 6:2

MUR 5390: Chartered Corporation 

Pays Record $3.8M Civil Penalty, 

6:1

MUR 5453: Excessive and Prohibited Contributions, 4:8

MUR 5628: Contributions in the 

Name of Another, 1:14

MUR 5635: No-Risk Contract Results in Corporate Contributions, 

2:6

Nonfilers, 7:8, 8:9

Policy Statement on Payroll Deduction Recordkeeping, 8:1

Sharpton Repayment Agreement, 2:6

Correction

2006 Coordinated Party Expenditures, 4:11

Reports Due in 2006, 2:10

Court Cases

____ v. FEC

– CCL, 5:7, 6:3

– CREW, 1:13

– Davis, 8:1

– EMILY’s List, 2:5

– LaRouche, 4:7

– Liffrig v. FEC, 2:5

– Kean for Congress, 3:7

– Shays II, 6:1

– Wisconsin Right to Life, 3:1 

FEC v. ____

– Club for Growth, 8:2

– Kalogianis, 3:8

– Reform Party, 1:13

Randall v. Sorrell, 8:3

Information

FEC Names New Staff Director, 8:9

IRS Report on Political Activity 

Compliance by Exempt Organizations, 4:9

Party Activities

2006 Coordinated Party Expenditure 

Limits, 3:5

Regulations

Coordinated Communications 

NPRM, 1:2; final rules, 7:1

Electioneering Communications, 

final rules, 2:1

FEA final rules, 3:2

FEA interim final rule, 5:3

Internet final rules, 5:1

Petition for Rulemaking, EC Exemption, 4:2

Public Hearing on Coordinated 

Communications, 3:3

Revised E&J for “Agent,” 3:1

Solicit and Direct, final rules, 4:1

State, District and Local Party Committee Wages, final rules, 1: 3

Reports

Alabama Primary Runoff Delayed, 

6:9

April Quarterly Reporting Reminder, 

4:1

California Special Election Reporting: 50th District, 2:4

Connecticut Convention Reporting 

Dates, 6:9

Due in 2006, 1:4, 2:10

FECFile Update, 3:11

FEC Form Instructions Revised, 6:9

July Reporting Reminder, 7:1

Statistics

Congressional Campaigns Raise 

$657.2M, 7:6

Major Parties Raise $555.2M, 7:7

PACs Raise $477.4M in 2005, 4:7

Party Committees Raise Over $430 

Million, 5:10

Senate Fundraising Figures, 2:8

Web Site

Administrative Fines Calculator, 

2:10

Commission Calendar Always UpTo-Date, 1:18

(continued on page 12)
Federal Election Commission RECORD August 2006

PRESORTED STANDARD

U.S. POSTAGE

PAID

FEDERAL ELECTION COMMISSION

FEDERAL ELECTION COMMISSION 

999 E Street, NW

Washington, DC 20463

Official Business

Penalty for Private Use, $300

E&J Compilation Now Available on 

FEC Web Site, 4:10

E-mail @ FEC.gov, 7:10

FEC Web Site Presents Podcasts, 2:9

FEC Launches Treasurers’ Web 

Page with RSS, 7:10

New Search Engine for FEC Web 

Site, 4:10

Index

(continued from page 11)