September 2004 Federal Election Commission Volume 30, Number 9

Table of Contents

 Regulations

 1 Political Committee Rules 

Approved

 4 Rulemaking Petition

 Court Cases

 1 Wisconsin Right to Life, Inc. v 

FEC

 3 LaRouche’s Committee for a New 

Bretton Woods v FEC

 3 New Litigation

 4 Nonfilers

 4 Advisory Opinions

 Public Funding

 7 Public Funding for Kerry-Edwards

 8 Matching Fund Certifications

 8 Publications

 Administrative Fines

 9 Fines Assessed

 Outreach

 10 Reporting Roundtables

 Information

10 IRS 527 Disclosure Initiative

 10 Index

 

Regulations Court Cases

Wisconsin Right to Life, 

Inc. v FEC

On August 17, 2004, the U.S. 

District Court for the District of 

Columbia denied Wisconsin Right 

to Life, Inc.’s (WRTL) motion for 

a preliminary injunction that would 

have exempted certain WRTL broadcast ads from the ban on corporate 

funding of electioneering communications. 

Background

WRTL had filed suit in the U.S. 

District Court for the District of 

Columbia on July 26, 2004, asking 

the court to find the prohibition on 

the use of corporate funds to pay 

for electioneering communications 

unconstitutional as applied to certain 

grass-roots lobbying activities, 

including three specific advertisements that were attached to WRTL’s 

complaint. The plaintiffs also asked 

the court to preliminarily and permanently enjoin the Commission from 

enforcing this prohibition against 

WRTL for any of these communications. 

On July 29, the court granted 

the plaintiff’s unopposed motion to 

have the case heard by a three-judge 

(continued on page 4) (continued on page 2)

Political Committee Rules 

Approved

On August 19, 2004, the Commission approved final rules that may 

require more so-called 527 organizations to register and report with the 

FEC, beginning in 2005. In general, 

the new regulations:

• Expand the definition of contribution to include funds received as 

a result of a communication that 

indicates any portion of those funds 

will be used to support or oppose 

the election of a clearly identified 

federal candidate; and

• Define the types of costs that federal PACs may allocate between their 

federal and nonfederal accounts, 

and modify the allocation methods 

they must use.

The Commission is finalizing the 

Explanation and Justification that 

will accompany the final rules, and 

will publish both in the Federal Register and on the FEC website, www.

fec.gov. A complete summary of the 

new rules will appear in the October 

Record. 

 —Elizabeth Kurland
Federal Election Commission RECORD September 2004

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)

Bradley A. Smith, Chairman

Ellen L. Weintraub, Vice Chair

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

Meredith Trimble, Associate 

 Editor

http://www.fec.gov

panel, and also granted its motion to 

expedite proceedings on the request 

for a preliminary injunction.1

Under the Federal Election 

Campaign Act (the Act) and Commission regulations, an electioneering communication is defined, with 

some exceptions, as any broadcast, 

cable or satellite communication that 

refers to a clearly identified federal 

candidate and is publicly distributed 

for a fee within 60 days before the 

general election or 30 days before 

a primary election or a nominating 

convention for the office sought by 

the candidate. 2 U.S.C. §434(f)(3) 

and 11 CFR 100.29. Corporations 

may not make electioneering communications using their general treasury funds.2

 2 U.S.C. §§441b(a)-(b) 

and 11 CFR 114.2 and 114.14. 

The Plaintiff’s grass-roots lobbying efforts involve broadcast ads 

paid for by WRTL asking Wisconsin 

listeners to contact U.S. Senators 

Kohl and Feingold and to ask them 

to vote against anticipated filibusters 

of federal judicial nominees. Senator Feingold is up for re-election this 

year, and some of the intended ads 

will run during the electioneering 

communications periods for Wisconsin’s primary and general elections. 

According to WRTL, because 

their ads express an opinion on 

pending Senate legislative activity, 

urge listeners to contact their Senators and do not refer to any political party or support or attack any 

candidate, they constitute bona fide

grass-roots lobbying. They argue 

that these ads are not the “functional 

equivalent of express advocacy,” 

and, thus, there is no constitutional 

justification for the prohibition on 

corporate payments for these ads 

or for requiring the ads to be paid 

for through a political action committee. See McConnell v FEC, 124 

S. Ct. at 696. WRTL asserts that 

in this instance the prohibition on 

corporate-sponsored electioneering 

communications unconstitutionally 

burdens the rights of free speech, 

free association and petitioning the 

government—all in violation of the 

First Amendment.

District Court Decision

The three-judge court rejected 

WRTL’s motion for a preliminary 

injunction, finding that it did not 

demonstrate that: (1) WRTL had a 

substantial likelihood of success on 

the merits; (2) WRTL would suffer 

irreparable harm in the absence of an 

injunction; (3) an injunction would 

not cause substantial injury to other 

parties; and (4) the public interest 

would be furthered by the injunction.

Substantial likelihood of success 

on the merits. In McConnell v FEC, 

124 S. Ct. 619 (2003), the Supreme 

Court upheld the electioneering 

communication provisions of the 

BCRA in their entirety. Furthermore, the reasoning of the court left 

no room for the kind of “as applied” 

challenge brought by WRTL. The 

Supreme Court expressly stated 

that it upheld all applications of the 

primary definition of electioneering 

communication, suggesting little 

likelihood of success for an “as 

applied” challenge to a particular 

application of that definition. This 

deliberate upholding of “all applications” stands in contrast to the 

court’s explicit acknowledgment that 

other parts of the statute, which it 

also upheld, might be subject to “as 

applied” challenges in the future.

Plaintiff would suffer irreparable harm if an injunction is not 

granted. The court concluded that 

the actual limitation on WRTL’s 

freedom of speech is not nearly as 

great as WRTL had argued. WRTL 

is not precluded from forwarding its 

message or from exposing the public 

to the advertisements at issue. The 

BCRA does not prohibit the speech 

in question, it only requires that 

corporations and labor organizations 

engaging in such speech channel 

their spending through PACs. In 

McConnell, the Supreme Court 

noted that corporations remain free 

to organize and administer separate 

segregated funds (PACs) for the 

purpose of financing electioneering 

communications. 

An injunction would not cause 

substantial injury to other parties. 

It is the statutory duty of the FEC 

to enforce the BCRA. To the extent 

the injunction is entered, the FEC 

Court Cases

(continued from page 1)

1

 The Bipartisan Campaign Reform Act 

of 2002 (BCRA) provides for such expedited review of constitutional challenges 

to its provisions. See BCRA 403, 116 

Stat. at 113-114.

2

 Commission regulations provide an 

exception allowing “qualified nonprofit 

corporations” to pay for electioneering 

communications. 11 CFR 114.2(b)(2). 

However, WRTL alleges that it does not 

meet the definition of a qualified nonprofit corporation. 11 CFR 114.10.
September 2004 Federal Election Commission RECORD 

3

could not properly perform this duty, 

which is a substantial injury to the 

FEC.

Public interest would be furthered 

by the injunction. The Supreme 

Court has determined that the provisions of the BCRA serve compelling 

government interests. McConnell, 

124 S. Ct. at 695-96. As a result, interference with executing the BCRA 

by enjoining its enforcement does 

not further the public interest

The district court further ordered 

all parties to file appropriate supplemental memoranda addressing the 

potential dismissal of the matter, and 

denied WRTL’s subsequent request 

to enter an injunction while WRTL 

pursued an appeal.

Appeal

WRTL has appealed the district 

court’s decision to the U.S. Court of 

Appeals for the District of Columbia 

Circuit, and has requested an injunction from the D.C. Circuit pending 

this appeal.

U.S. District Court for the District 

of Columbia, CV04-1260 (DBS, 

RWR, RJL).

 —Meredith Trimble

LaRouche’s Committee for a 

New Bretton Woods v FEC

On July 29, 2004, the U.S. Court 

of Appeals for the District of Columbia granted the Commission’s motion to dismiss this case. LaRouche’s 

Committee for a New Bretton 

Woods (LCNBW) had asked the 

court to review the FEC’s final determination requiring the committee to 

repay to the U.S. Treasury a portion 

of the Presidential primary matching funds it received for the 2000 

Presidential election. The court concluded that the appeal was premature 

because LCNBW had filed with the 

Commission a timely petition for 

reconsideration, and the committee 

may not seek judicial review until 

the rehearing has concluded. See the 

June 2004 Record, page 7, and the 

May 2004 Record, page 15. 

 —Amy Kort

New Litigation

FEC v Reform Party of the USA

On July 21, 2004, the Federal 

Election Commission (FEC) filed an 

action with the U.S. District Court 

for the Northern District of Florida 

to collect $333,558 from the Reform Party of the United States of 

America (RPUSA or Party) and its 

treasurer, William D. Chapman, Sr., 

and the Reform Party 2000 Convention Committee and its treasurer, 

Gerald M. Moan. The suit arises 

from a final determination by the 

FEC regarding the financing of the 

RPUSA’s 2000 Presidential nominating convention, during which 

the Party spent some of the public 

money grant it received to pay for 

convention expenditures not permitted by law.

Background. Under the Presidential Election Campaign Fund Act 

(the Fund Act), the national party 

committee of an eligible major or 

minor party is entitled to receive 

public funding to finance the party’s 

presidential nominating convention. 

26 U.S.C. §9008. To receive these 

funds, the national committee must 

establish a convention committee 

that “shall be responsible for conducting the day to day arrangements 

and operations of that party’s presidential nominating convention.” 11 

CFR 9008.3(a)(2). The convention 

committee may use the funds only 

to pay for permissible convention 

expenses, defined as “all expenses 

incurred by or on behalf of a political party’s national committee or 

convention committee with respect 

to and for the purpose of conducting 

a presidential nominating convention 

or convention-related activities.” 11 

CFR 9008.7(a)(4).

The Fund Act also requires that 

the FEC conduct an audit of any 

committee that receives public funding. The Final Audit Report, adopted by the FEC on September 26, 

2002, included a determination that 

the defendants must repay $333,558 

to the U.S. Treasury for expenditures 

that were not permissible convention expenses or were not properly 

documented. 11 CFR 9008.7(a) and 

9008.10. The RPUSA submitted 

a timely request for administrative 

review of the repayment determination, and after review, the FEC 

upheld the repayment determination. 

The RPUSA requested reconsideration of the FEC’s repayment determination, which the FEC rejected as 

untimely. The RPUSA then filed a 

petition for review in the U.S. Court 

of Appeals for the District of Columbia Circuit, which the D.C. Circuit 

dismissed as untimely. 

Court complaint. In its court 

complaint, the FEC asserts that the 

repayment determination is now 

“final and conclusive” and the merits 

of the repayment determination are 

not subject to judicial review. The 

defendants have not paid any of 

the $333,558 debt. The FEC asks 

the court to declare that the defendants are obliged to pay to the U.S. 

Treasury $333,558, plus interest, 

order defendants to make that repayment, and to give preference to the 

repayment over all other outstanding 

obligations of the committee, other 

than federal taxes.

U.S. District Court for the 

Northern District of Florida, CV 

04-00079.

 —Meredith Trimble

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 Use a touch tone phone to dial 

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Federal Election Commission RECORD September 2004

4

Regulations

(continued from page 1)

Rulemaking Petition Seeks 

New EC Exemption 

On July 20, 2004, the Commission received a Petition for Rulemaking that asks the Commission 

to revise its electioneering communications regulations by providing 

a separate exception for advertisements of political documentary 

films that do not promote, support, 

attack or oppose a candidate for 

federal office and that are made in 

the ordinary course of business. See

11 CFR 100.29. The Commission 

will publish a Notice of Availability in the Federal Register seeking 

comments on whether to initiate a 

rulemaking in response to this petition. The deadline for comments is 

30 days after the notice is published.

With certain exceptions, an 

electioneering communication is 

any communication that refers to a 

clearly identified federal candidate; 

is “publicly distributed” over television or radio within 60 days before 

a general election or 30 days before 

a primary election or a national 

nominating convention; and, in the 

case of Congressional candidates, is 

targeted to the relevant electorate. 

See 2 U.S.C. §434(f)(3)(a)(i) and 11 

CFR 100.29. Corporations and labor 

unions are prohibited from directly 

or indirectly financing electioneering 

communications.

The rulemaking petition was 

submitted by Mr. Robert F. Bauer, 

acting on his own behalf and not on 

behalf of any client or third party. 

The full text of the notice is 

available on the FEC web site at 

http://www.fec.gov and from the 

FEC faxline, 202/501-3413. The 

Commission requests comments on 

whether the Commission should initiate a rulemaking on “electioneering 

communications” and on whether 

there are other issues regarding the 

electioneering communication rules 

that should also be addressed in a 

rulemaking at this time. Public comments must be submitted, in either 

written or electronic form, to Brad 

Deutsch, Assistant General Counsel. 

Comments may be sent by:

• E-mail to ECADSNOA@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.

 —Meredith Trimble

Nonfilers

Congressional Committees 

Fail to File Reports

Favazza for Congress, the Steve 

Dennis for Congress Committee 

and the Committee to Elect Charles 

E. Berry failed to file 12-Day PrePrimary reports for the August 3, 

2004, primary election in Missouri. 

Friends of John Conyers failed to 

file a 12-Day Pre-Primary report for 

the Michigan primary election also 

held on August 3. In addition, the 

Steve Dennis for Congress Committee (MO) and the Simon Pristoop for 

Congress Committee (FL) failed to 

file July Quarterly reports.

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 case-by-case basis. 

 —Amy Kort

AO 2004-18

Campaign Committee’s 

Purchase of Candidate’s 

Book at Discounted Price

The Friends of Joe Lieberman Committee (the Committee) 

may buy copies of Senator Joseph 

Lieberman’s book at a discounted 

price that will be made available to 

other purchasers under a customary 

practice in the publishing industry. 

The books will be given to campaign 

supporters and contributors.

Background

Under Senator Lieberman’s 

publishing contract, if the publisher 

determines that his book is no longer 

“readily saleable at regular prices 

within a reasonable time,” it may 

designate its remaining stock of copies as “remainder copies” and sell 

them at a steep discount. The publisher recently made this determination and, pursuant to the publishing 

contract, offered the book to Senator 

Lieberman at a discounted price of 

$3.40 per copy before offering this 

price to other buyers. The Committee intends to purchase a few 

hundred of the thousands of remaining copies in order to distribute them 

as gifts to campaign supporters. 

The Committee will not otherwise 

promote or sell the book. Senator 

Lieberman will waive any potential 

royalties or royalty credits that might 

result from this purchase.

Advisory

Opinions
September 2004 Federal Election Commission RECORD 

5

Analysis

In-kind contributions. Under the 

Federal Election Campaign Act (the 

Act), a contribution includes the 

provision of goods or services at less 

than the usual and normal charge—

in other words, at less than the price 

of those goods in the market from 

which they ordinarily would have 

been purchased at the time of the 

contribution. 11 CFR 100.52(d)(1) 

and (2). In the past, the Commission 

has determined that the purchase of 

goods or services at a discount does 

not result in a contribution when the 

discounted items are made available 

in the ordinary course of business 

and on the same terms and conditions to the vendor’s other customers 

that are not political committees. See 

AOs 2001-8, 1996-2, 1995-46 and 

1994-10.

In this case, the practice of discounting books when they are no 

longer saleable at the regular price 

is standard in the publishing industry. In addition, the publisher set 

the price for the remainder copies 

of Senator Lieberman’s book in the 

ordinary course of its business based 

on its estimation of the fair market 

value of the book as a remainder. 

Thus, the Committee will pay the 

usual and normal charge for this 

type of purchase, and no in-kind 

contribution will result.

Personal use of campaign funds. 

The Act provides for four categories 

of permissible uses of campaign 

funds, including otherwise authorized expenditures that are made in 

connection with the candidate’s federal campaign. 2 U.S.C. §439a(b)(1) 

and 11 CFR 113.2(a), (b) and (c). 

In no case, however, may campaign funds be used for an expense 

that would exist irrespective of the 

candidate’s campaign or duties as a 

federal officeholder, and thus be converted to “personal use.” 2 U.S.C. 

§439a(b)(1) and 11 CFR 113.1(g). 

In this case, the funds will be 

used for an otherwise authorized 

expenditure made in connection with 

Senator Lieberman’s campaign, and 

the expense would not exist irrespective of the campaign because:

• The books will only be used as 

gifts to campaign supporters and 

the Committee will not promote or 

sell the book; thus, the Committee 

will use them only for the purpose 

of influencing Senator Lieberman’s 

re-election to federal office;

• The Committee will not buy more 

books than it needs for this purpose; and

• Senator Lieberman will not receive 

any royalties or royalty credits as a 

result of the Committee’s purchase 

of the books, nor will the purchase 

increase his opportunity to receive 

future royalties.1

Thus, the Committee’s purchase 

of the books is permissible under the 

Act and Commission regulations. 

The Committee should report funds 

it spends on the books as operating 

expenditures for the 2006 election 

cycle. 2 U.S.C. §§434(b)(4)(A) and 

(5)(A); 11 CFR 104.3(b)(2)(i) and 

(b)(4)(i).

Date Issued: July 15, 2005; 

Length: 7 pages.

 —Amy Kort

1

 Although the personal use regulations 

permit a candidate to rent space, equipment or other items to his principal 

campaign committee at the usual and 

normal charge, Senator Lieberman’s 

waiver of royalties and royalty credits 

that would otherwise result from the sale 

of copies of his book to the Committee 

precludes the use of the sale as a device 

to use the Committee to benefit him financially. See 11 CFR 113.1(g)(1)(i)(E) 

and AOs 2001-8 and 1995-46.

AO 2004-20

Connecticut Party 

Convention Still Considered 

an “Election”

Despite a change in Connecticut state law, party conventions in 

Connecticut continue to be separate 

elections under the Federal Election Campaign Act (the “Act”). As 

a result, Democratic House candidate Diane Farrell, who did not 

participate in Connecticut’s August 

10, 2004, primary, may not accept 

undesignated primary contributions 

after May 10, 2004, the date of her 

Democratic district convention. 

Likewise, her principal campaign 

committee, Farrell for Congress (the 

“Committee”), was not required to 

file a pre-primary report in connection with the August 10, 2004 

primary.

Background

Diane Farrell is the Democratic 

candidate for the U.S. House of Representatives from Connecticut’s 4th

Congressional District. The Democratic Party in Connecticut held its 

convention for the U.S. House on 

May 10, 2004. The primary elections for all offices in Connecticut 

were held on August 10, 2004. 

Since the Democratic Party endorsed 

Ms. Farrell as its candidate for the 

4th Congressional District, and no 

other member of the Democratic 

Party met the requirements to challenge her endorsement, Ms. Farrell 

is the Democratic Party’s nominee 

and her name did not appear on the 

primary election ballot.

Until January 1, 2004, Connecticut law provided that if a candidate 

received his or her party’s endorsement at the party’s convention, and if 

no other candidate received at least 

15 percent of the endorsement vote 

at the convention, then no primary 

would be held for that office and 

the party-endorsed candidate would 

be deemed lawfully chosen as the 

(continued on page 6)
Federal Election Commission RECORD September 2004

6

party’s nominee. In 2003, Connecticut enacted a new law, effective 

January 1, 2004, that provides for 

an additional route for a candidate’s 

name to be placed on the primary 

ballot. The new law permits any 

registered member of the party, even 

if that member has not received 15 

percent of the endorsement vote at 

the party convention, access to the 

primary ballot if they file a petition with signatures of at least two 

percent of the party members in the 

state or district (whichever applies) 

within 14 days after the end of the 

convention.

Analysis

Definition of “election.” The Act 

and Commission regulations define 

an “election” to include “a general, 

special, primary, or runoff election” 

and “a convention or caucus of a political party which has the authority 

to nominate a candidate.” 2 U.S.C. 

§§431(1)(A) and (B); 11 CFR 100.2. 

The question of whether a particular 

event meets the definition of “election” is determined by an analysis of 

state law.

In Advisory Opinion 1976-58, 

analyzing Connecticut’s old law, the 

Commission determined that party 

conventions were elections for purposes of the Act. This was because 

it was “possible under Connecticut 

law for the convention’s ‘party-endorsed candidate’ to be ‘deemed 

... chosen as the nominee’” if no 

other candidate received the required 

percentage of the delegates’ votes 

or filed a “candidacy” for nomination. The Commission noted that 

in such a case, the endorsement at 

the convention was “tantamount 

to a nomination of the candidate,” 

and thus, the party convention had 

the “authority to nominate” candidates. Therefore, candidates could 

be involved in two elections during 

the primary process—the convention 

and the primary (if necessary)—and 

could then be entitled to two separate contribution limits.

The new Connecticut law does 

not materially change this situation 

for purposes of the Act. The only 

difference between Connecticut’s 

old and new laws is that there are 

now two ways (i.e., receiving at least 

15 percent of the endorsement vote 

or filing a petition), rather than one, 

to challenge the party convention’s 

endorsement. However, under the 

new law, as under the old law, if no 

party member challenges the party’s 

endorsement, the party-endorsed 

candidate will be deemed chosen 

as the party’s nominee solely by 

virtue of the party’s endorsement 

and without being required to take 

any additional steps to secure the 

nomination. Therefore, Connecticut party conventions still have the 

authority to nominate candidates and 

thus continue to be elections under 

the Act. In this instance, no Democratic primary took place for the 4th

Congressional District, and, therefore, the only election Ms. Farrell 

was involved in during this primary 

process was the May 10 Democratic 

district convention.

Treatment of undesignated contributions received after the party 

convention. Commission regulations provide that contributions 

not designated in writing by the 

contributor for a particular election 

are presumed to be made for the 

next election after the contribution 

is made. 11 CFR 110.1(b)(2)(ii). 

Furthermore, “[c]ontributions designated in writing for a particular 

election, but make after that election, 

shall be made only to the extent that 

the contribution does not exceed net 

debts outstanding from such election.” 11 CFR 110.1(b)(3)(i).

Because the Commission has determined that the May 10 Democratic district convention was the only 

election Ms. Farrell was involved 

in during the primary season, the 

Committee must treat undesignated 

contributions made after May 10, 

2004, as contributions to the general 

election. 11 CFR 110.1(b)(2)(ii). 

However, the Committee may use 

contributions raised after May 10 

to the extent necessary to retire 

net debts outstanding. 11 CFR 

110.1(B)(3)(i).

Reporting. Under Commission 

regulations, a Congressional candidate’s principal campaign committee must file a pre-election report 

“no later than 12 days before any 

primary or general election in which 

the candidate seeks election.” 11 

CFR 104.5(a)(2)(i)(A). Because the 

May 10 convention was an election 

and no primary was held for the 4th

Congressional District on August 10, 

the Committee fulfilled its pre-election reporting requirement by filing 

its pre-convention report. The Committee did not need to file a pre-primary report in connection with the 

August 10, 2004, primary election.

Date Issued: July 20, 2004; 

Length: 7 pages.

 —Elizabeth Kurland

Advisory Opinions

(continued from page 5)

AO 2004-22

Unlimited Transfers to State 

Party Committee

U.S. Representative Doug 

Bereuter, a retiring member of 

Congress, may make unlimited 

transfers of campaign funds to the 

Nebraska State Republican Party 

(the Party). The Party, in turn, may 

use these funds to renovate its office 

building. Under the Federal Election 

Campaign Act (the Act), transfers to 

a state party committee are a permitted use of contributions received by 

a principal campaign committee. 2 

U.S.C. §439a.

Background

Representative Bereuter resigned 

from the U.S. House of Representatives and will not run for re-election. 

His principal campaign committee, 

Bereuter for Congress, recently 

transferred $5,000 from its campaign 

account to the Party to defray the 

costs of remodeling the Party’s of-
September 2004 Federal Election Commission RECORD 

7

fice building. Bereuter for Congress 

intends to transfer another $10,000 

to $15,000 to fund further remodeling. 

Analysis

The Act lists four permissible 

uses for campaign funds and provides that campaign funds must not 

be converted to the personal use of 

any individual. 2 U.S.C. §§439a 

and 439a(b). One permissible use 

of funds is for unlimited transfers 

to a state party committee. 2 U.S.C. 

§439a(a)(4); 11 CFR 113.2(c). 

These provisions of the Act do not 

limit the ways that the state party 

committee can use the funds, nor do 

they restrict the amount that may be 

transferred in any specific period of 

time.1 

Thus, Bereuter for Congress 

may transfer $10,000 to $15,000 

in campaign funds to the Party for 

the purpose of remodeling its party 

headquarters. Any or all of the funds 

may be transferred before August 

31, 2004.

Date Issued: July 23, 2004; 

Length: 2 pages.

 —Amy Kort

1

 A transfer pursuant to 2 U.S.C. 

§439a(a)(4) and 11 CFR 113.2(c) is not 

subject to the contribution limitation 

in 2 U.S.C. §441a(a)(1)(D) or 11 CFR 

110.1(c)(5). Such a transfer is also consistent with the regulations addressing 

office buildings of state or local party 

committees in 11 CFR 300.35.

Alternative Disposition of 

Advisory Opinion Request

AOR 2004-21

On August 6, 2004, the requestors 

withdrew Advisory Opinion Request 

2004-21, regarding a commercial 

web site designed to allow contributors to direct contributions to charity 

when an equal contribution was 

made to a competing candidate or 

cause.

 —Amy Kort

Advisory Opinion Requests

AOR 2004-26

Volunteer work—including decision-making—by foreign national 

in federal candidate/officeholder’s 

campaign and political committee 

activities (Congressman Jerry Weller 

and Zury Rios Sosa, July 13, 2004)

AOR 2004-27

Campaign’s payment of back pay 

to former employees for time they 

volunteered services while campaign 

was low on funds (Quayle 2000 

Committee, July 14, 2004)

AOR 2004-28

Authority of state to require state 

party committee to publicly disclose 

names of donors to building fund 

account (Iowa Ethics and Campaign 

Disclosure Board, July 22, 2004) 

AOR 2004-29

Federal candidate/officeholder’s 

support of state ballot referendum 

committees that he did not establish 

(Representative Todd Akin and Todd 

Akin for Congress, July 20, 2004)

AOR 2004-31

Ads containing references to a 

name shared by a candidate, his 

son, and their incorporated business 

as potential prohibited electioneering communications (Russ Darrow 

Group, Inc., July 30, 2004)

AOR 2004-32

Affiliation resulting from a private investment firm holding voting 

stock of a corporation, enabling the 

corporation’s PAC to solicit directors 

and senior employees of the firm 

(Spirit Airlines, Inc., July 22, 2004) 

(continued on page 8)

Public Funding for KerryEdwards

On July 30, 2004, the Commission approved public funding for 

the general election campaign of 

Democratic Presidential nominee 

John Kerry and his Vice-Presidential 

running mate Senator John Edwards. 

The U.S. Treasury Department made 

the payment of $74.620 million 

shortly thereafter.

Under the Presidential Election 

Campaign Fund Act, the Democratic and Republican nominees 

are each entitled to a grant of $20 

million increased by a cost-of-living adjustment (COLA). In order to 

receive public funding, the KerryEdwards campaign agreed to abide 

by the overall spending limit and 

other legal requirements, including 

a post-campaign audit. Additionally, as major party nominees, they 

agreed to limit campaign spending 

to the amount of the public funding grant and not to accept private 

contributions for the campaign. They 

also agreed not to spend more than 

$50,000 in the aggregate of their 

own personal funds. The campaign 

may, however, accept contributions 

designated for its general election 

legal and compliance (GELAC) 

fund. This fund is a special account 

maintained exclusively to pay for the 

expenses related to complying with 

the campaign finance law. Compliance expenses do not count against 

the expenditure limit. Contributions 

to the GELAC fund are, however, 

subject to the limits, prohibitions 

and reporting requirements of the 

federal campaign finance laws.

The Democratic National Committee may spend an additional 

Public 

Funding
Federal Election Commission RECORD September 2004

8

Public Funding

(continued from page 7)

Commission Certifies 

Matching Funds for 

Presidential Candidates

On July 22 and 30, 2004, the 

Commission certified $427,744.66 

in federal matching funds to four 

Presidential candidates. The U.S. 

Treasury Department made the 

payments on August 2, 2004. These 

certifications raise to $27,495,425.98 

the total amount of federal funds 

certified thus far to eight Presidential 

candidates.

Presidential Matching Payment 

Account

Under the Presidential Primary 

Matching Payment Account Act, the 

federal government will match up to 

$250 of an individual’s total contributions to an eligible Presidential 

primary candidate. A candidate must 

establish eligibility to receive matching payments by raising in excess of 

$5,000 in each of at least 20 states 

(i.e., over $100,000). Although an 

individual may contribute up to 

$2,000 to a primary candidate, only 

a maximum of $250 per individual 

applies toward the $5,000 threshold in each state. Candidates who 

receive matching payments must 

agree to limit their committee’s 

spending, limit their personal spending for the campaign to $50,000 and 

submit to an audit by the Commission. 26 U.S.C. §§9033(a) and (b) 

and 9035; 11 CFR 9033.1, 9033.2, 

9035.1(a)(2) and 9035.2(a)(1).

Candidates may submit requests 

for matching funds once each 

month. The Commission will certify 

an amount to be paid by the U.S. 

Treasury the following month. 26 

CFR 702.9037-2. Only contributions 

from individuals in amounts of $250 

or less are matchable. 

The chart above lists the amount 

most recently certified to each 

eligible candidate who has elected 

to participate in the matching fund 

program, along with the cumulative 

amount that each candidate has been 

certified to date. 

Nominating Conventions

The Commission has previously 

certified $14,924,000 to each of 

the two major political parties for 

their 2004 Presidential Nominating 

Conventions.

 —Amy Kort

Matching Funds for 2004 Presidential Candidates: 

July Certification

Candidate Certification Cumulative

July 2004 Certifications

Wesley K. Clark (D)1 $0 $7,615,360.39

John R. Edwards (D)2 $83,430.52 $6,604,769.40

Richard A. Gephardt (D)3 $0 $4,104,319.82

Dennis J. Kucinich (D)4 $186,000.00 $2,847,079.59

Lyndon H. LaRouche, Jr. (D)5 $0 $1,408,993.13

Joseph Lieberman (D)6 $9,966.00 $4,267,796.85

Ralph Nader (D) $148,348.14 $547,106.80

Alfred C. Sharpton (D) $0 $100,000.007

1 General Clark publicly withdrew from the Presidential race on February 11, 2004.

2 Senator Edwards publicly withdrew from the Presidential race on March 3, 2004.

3 Congressman Gephardt publicly withdrew from the Presidential race on January 2, 

2004.

4 Congressman Kucinich became ineligible to receive matching funds on March 4, 

2004.

5 Mr. LaRouche became ineligible to receive matching funds on March 4, 2004.

6 Senator Lieberman publicly withdrew from the Presidential race on February 3, 

2004.

7

 On May 10, 2004, the Commission determined that Reverend Sharpton must repay 

this amount to the U.S. Treasury for matching funds he received in excess of his entitlement. See the July 2004 Record, page 8.

Publications

Updated Brochures Available

The Commission has recently 

updated its “Independent Expenditures” and “Local Party Activity” 

brochures to reflect changes in the 

law made by the Bipartisan Campaign Reform Act of 2002. 

The brochures are currently available on the FEC web site at http://

www.fec.gov. A limited number of 

printed copies will also be available 

for those without Internet access. To 

request a printed copy, call the Information Division at 800/424-9530 or 

202/694-1100.

$16,249,699 for coordinated expenditures on behalf of the Kerry-Edwards campaign. These funds are 

subject to the limits, prohibitions 

and disclosure requirements of the 

Federal Election Campaign Act.

 —Amy Kort
September 2004 Federal Election Commission RECORD 

9

Committees Fined for 

Nonfiled and Late Reports

The Commission recently publicized its final action on 30 new 

Administrative Fine cases, bringing 

the total number of cases released to 

the public to 973, with $1,322,312 in 

fines collected by the FEC.

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 nonfiled 

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 committee and the treasurer 

are assessed civil money penalties 

when the Commission makes its 

final determination. Unpaid civil 

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 and Public Records Office at 800/424-9530.

 —Amy Kort

Administrative 

Fines 1. Americans for Common Sense Government $2,400

 2. Americans United in Support of Democracy $1,593 

 3. America’s PAC $2,700 

 4. Bankers United in Legislative Decisions 

 AKA BUILD (FKA Iowa Bankers Association) ____1

 5. Buckley02 $275 

 6. Bricklayers and Allied Craftworkers Local No. 3 

 New York, Niagra Falls/Buffalo Chapter PAC $8252, 3

 7. Campaign for U. N. Reform PAC (Now named “Citizens 

 for Global Solutions PAC—Global Solutions PAC”) ____1

 8. Cohen for New Hampshire $8504

 9. Cox for U.S. Senate Committee, Inc. $ 22,150 

10. David Langston for Congress $04

11. Ed Tinsley for Congress $04

12. Friends of Bob Gross Committee 

 July Quarterly 2002 $2,7002 

13. Friends of Bob Gross Committee 

 October Quarterly 2002 $2,7002

14. Friends of Roger Kahn Inc. $04

15. Jim Baker for Congress $2,700 

16. Keyspan Energy PAC (KEYPAC) ____1

17. Mark A. Augusti for Congress $7502

18. Meeks for Congress $11,275 

19. Mike Greene for Congress Committee $10,1252

20. National Committee for an Effective Congress $9,000

21. New Mexicans for Bill Richardson $4,100 

22. Office of the Commissioner of Major League Baseball PAC $400 

23. Philip Lowe for Congress $23,7502

24. Plumbers Union Local 690 of the United Association 

 of Journeyman and Apprentices of the Plumbing and 

 Pipefitting Industry of the United States and Canada 

 Local Election Political Action Fund ____1

25. Pro-Life Campaign Committee 

 30 Day Post-General 2002 $12,000 

26. Pro-Life Campaign Committee 

 Year End 2002 $6,000 

27. Ross For Congress 

 July Quarterly 2003 $9,6252

28. Ross For Congress October 

 Quarterly 2003 $11,0002

29. Saltchuk Resources Inc. PAC (AKA SALTCHUK PAC) $825 

30. Strickland for Colorado, Inc. $6,400 

1

The Commission took no further action in this case.

2

 This civil money penalty has not been collected.

3 This civil money penalty was reduced after being recalculated for a late 

report rather than for a nonfiled report.

4

This civil money penalty was reduced due to the level of activity on the report.

Committees Fined for and Penalties Assessed
Federal Election Commission RECORD September 2004

10

The first number in each citation 

refers to the “number” (month) of 

the 2004 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

2003-28: Nonconnected PAC 

established by limited liability 

company composed entirely of 

corporations may become an SSF 

with the limited liability company 

as its connected organization, 1:20

2003-29: Transfer of funds from a 

nonfederal PAC to a federal PAC 

of an incorporated membership 

organization, 1:21

2003-30: Retiring campaign debt 

and repaying candidate loans, 2:1

2003-31: Candidate’s loans to 

campaign apply to Millionaires’ 

Amendment threshold, 2:2

2003-32: Federal candidate’s use 

of surplus funds from nonfederal 

campaign account, 2:4

2003-33: Charitable matching plan 

with prizes for donors, 2:5

2003-34: Reality television show to 

simulate Presidential campaign, 

2:6

2003-35: Presidential candidate may 

Outreach Index

Roundtable Schedule

Date Subject Intended Audience 

October 6

9:30-11 a.m.

Reception

11-11:30 a.m.

October 6

1:30-3 p.m.

Reception

3-3:30 p.m.

Election Year Reporting 

for Candidates and Their 

Committees, plus “Meet 

Your Analyst” reception

Election Year Reporting 

for PACs and Party Com- mittees, plus “Meet Your 

Analyst” reception

Individuals responsible 

for filing FEC reports for 

Candidate Committees 

(Up to 30 may Attend)

Individuals responsible 

for filing FEC reports for 

PACs and Party Com- mittees (Up to 30 may 

Attend)

Reporting Roundtables

On October 6, 2004, the Commission will host two roundtable 

sessions on election year reporting, 

including new disclosure requirements under the Bipartisan Campaign Reform Act of 2002 (BCRA). 

See the chart below for details. 

Both sessions will be followed by 

a half-hour reception at which each 

attendee will have an opportunity to 

meet the campaign finance analyst 

who reviews his/her committee’s 

reports. Representatives from the 

FEC’s Electronic Filing Office will 

also be available to meet with attendees.

Attendance is limited to 30 

people per session, and registration 

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

before registering or sending money 

to ensure that openings remain. The 

registration form is available on the 

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

and from Faxline, the FEC’s automated fax system (202/501-3413, 

request document 590). For more 

information, call the Information 

Division at 800/424-9530, or locally 

at 202/694-1100.

 —Amy Kort

withdraw from matching payment 

program, 2:7

2003-36: Fundraising by federal 

candidate/officeholder for section 

527 organization, 2:8

2003-37: Nonconnected PAC’s use 

of nonfederal funds for campaign 

activities, 4;4

2003-38: Funds raised and spent 

by federal candidate on behalf of 

redistricting committee to defray 

legal expenses incurred in redistricting litigation, 3:14

2003-39: Charitable matching plan 

conducted by collecting agent of 

trade association, 3:10

2003-40: Reporting independent 

expenditures and aggregation for 

Information

IRS 527 Disclosure Initiative

On August 19, 2004, the Internal 

Revenue Service (IRS) announced a 

new initiative to improve reporting 

and disclosure by tax-exempt “section 527” political groups. 

In the initial stage of the program, 

the IRS will immediately begin 

contacting a cross-section of 527 

groups to request that they explain 

and correct apparent discrepancies in 

their existing filings prior to upcoming filing deadlines. These deadlines 

include September 20 (for monthly 

filers) or October 15 (for quarterly 

filers), as well as October 21 for 

pre-election reports.

An organization that fails to timely report, fails to include all required 

information about contributions and 

disbursements, or that reports incorrect information is required to pay 

35 percent of the amount related to 

the failure. There is an exception for 

reasonable cause.

The filings, as well as information on the filing requirements and 

upcoming dates, are available on the 

IRS.gov website at www.irs.gov/polorgs. 

—Submitted by the IRS
September 2004 Federal Election Commission RECORD 

11

and press release policy for closed 

MURs; “enforcement profile” 

examined, 1:6; EQS update, 7:10

MUR 4818/4933: Contributions in 

the name of another and excessive 

contributions, 8:1

MUR 4919: Fraudulent misrepresentation of opponent’s party through 

mailings and phone banks, 6:2

MUR 4953: Party misuse of nonfederal funds for allocable expense, 

6:3

MUR 5197: Donations from Congressionally chartered corporations, 4:13

MUR 5199: Campaign committee’s 

failure to report recount activities, 

6:4

MUR 5229: Collecting agent’s failure to transfer contributions, 1:7

MUR 5279: Partnership contributions made without prior agreement of partners to whom contributions were attributed, 8:3

MUR 5328: Excessive contributions 

to and from affiliated leadership 

PACs, 5:1

MUR 5357: Corporation’s reimbursement of contributions, 2:1

Naming of treasurers in enforcement 

matters, proposed statement of 

policy, 3:4

Nonfilers, 3:16; 4:13, 6:7; 7:5; 8:13; 

9:4

Court Cases 

_____ v. FEC

– Akins, 4:10

– Alliance for Democracy, 3:8

– Cooksey, 8:11

– Cox for Senate, 3:4

– Hagelin, 4:11; 8:9

– Kean for Congress, 3:7

– Lovely, 5:12

– McConnell, 1:1

– LaRouche’s Committee for a New 

Bretton Woods, 6:7; 9:3

– O’Hara, 6:6; 8:11

– Wilkinson, 4:9

– Wisconsin Right to Life, Inc., 9:1

– Sykes, 4:12

FEC v. _____ 

– California Democratic Party, 4:9; 

8:10

– Dear for Congress, 8:10

– Friends of Lane Evans, 3:9

– Malenick, 5:13

– Reform Party of the USA, 9:3

Regulations

Administrative Fine program extension, final rule, 3:1

Contributions by minors, Notice of 

Proposed Rulemaking, 5:3

Electioneering communications, 

FCC database, 3:3

Electioneering Communication 

Exemption, Petition for Rulemaking, 9:4

Federal election activity periods, 3:1

Inaugural committees, Notice of 

Proposed Rulemaking, 5:1

Leadership PACs, final rules, 1: 18

Overnight delivery service, safe harbor for timely filing of reports, 3:1

various elections, 3:11

2004-1: Endorsement ads result in 

contribution if coordinated communications; “stand-by-your-ad” 

disclaimer for ad authorized by 

two candidates, 3:12

2004-2: Contributions from testamentary trusts, 4:8

2004-3: Conversion of authorized 

committee to multicandidate committee, 5:5

2004-4: Abbreviated name of trade 

association SSF, 5:7

2004-6: Web-based meeting services 

to candidates and political committees, 5:7

2004-7: MTV’s mock Presidential 

election qualifies for press exemption—no contribution or electioneering communication results, 5:8

2004-8: Severance pay awarded to 

employee who resigns to run for 

Congress, 6:4

2004-9: State committee status, 5:10

2004-10: “Stand by your ad” disclaimer for radio ads, 6:5

2004-12: Regional party organization established by several state 

party committees, 8:4

2004-14: Federal candidate’s appearance in public service announcements not solicitation, coordinated 

communication or electioneering 

communication, 8:6

2004-15: Film ads showing federal 

candidates are electioneering communications, 8:8

2004-17: Federal candidate’s compensation for part-time employment, 8:8

2004-18: Campaign committee’s 

purchase of candidate’s book at 

discounted price, 9:4

2004-20: Connecticut party convention considered an election, 9:5

2004-22: Unlimited transfers to state 

party committee, 9:6

Compliance

ADR program cases, 1:25; 4:15; 7:9; 

8:11

Administrative Fine program cases, 

1:24; 4:14; 6:9; 9:9

Enforcement Query System available on web site, disclosure policy 

for closed enforcement matters 

Party committee coordinated and 

independent expenditures, Notice 

of Proposed Rulemaking, 8:1

“Political committee” definition, 

definition of “independent expenditure,” allocation ratio for 

nonconnected PACs, Notice 

of Proposed Rulemaking, 4:1; 

Public hearing, 5:3; extension of 

Commission’s consideration, 6:1; 

Rules approved, 9:1

Public access to materials from 

closed enforcement matters, Petition for Rulemaking, 3:4

Public financing of Presidential 

candidates and nominating conventions, correction and effective 

date, 1:19

Travel on behalf of candidates and 

political committees, final rules, 

1:19

Reports

Due in 2004, 1:9

April reminder, 4:1

Convention reporting for Connecticut and Virginia, 5:10

July reminder, 7:1

Kentucky special election reporting, 

1:9

North Carolina special election 

reporting, 7:9
FEDERAL ELECTION COMMISSION

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Washington, DC 20463

Official Business

Penalty for Private Use, $300

PRESORTED STANDARD

U.S. POSTAGE

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Federal Election Commission RECORD September 2004