October 2001 Federal Election Commission Volume 27, Number 10

Table of Contents

1 Advisory Opinions

Staff

1 Lawrence H. Norton Appointed

General Counsel

3 Robert J. Costa Named Deputy

Staff Director for Audit and

Review

3 Public Appearances

Court Cases

3 New Litigation

3 On Appeal

Reports

4 South Carolina Special Election

Reporting

Statistics

5 Midyear PAC Count Shows Slight

Decrease from January 2001

Administrative Fines

5 Committees Fined for Late and

Nonfiled Reports

Outreach

6 FEC Announces Regional

Conference in San Francisco

6 Index

Compliance Advisory

Opinions

Staff

AO 2001-11

Late Transfer from

Nonfederal to Federal

Account of State Party

Committee

In order to resolve a bank account

transfer problem, the Democratic

Party of Virginia (the Party) may

make a one-time transfer from its

nonfederal account to its federal

account outside the normal 70-day

window for such transfers. 11 CFR

106.5(g)(2)(ii).

Background

On June 18, 2001, in accord with

the Party’s ordinary practice,

Executive Director Alan Moore

faxed a written request to the bank

asking that $43,679.88 be transferred from the Party’s nonfederal

account to its federal account. This

transfer was to cover allocable

administrative expenses for the

period of April 20 through May 3,

2001. On July 12, 2001, the Party

reviewed its June bank statements

and discovered that the requested

transfer had not been made. They

immediately contacted the bank.

Neither the bank nor the Party could

locate any written record to confirm

(continued on page 2)

Lawrence H. Norton

Appointed General Counsel

On September 17, 2001,

Lawrence H. Norton, formerly an

official with the Commodity Futures

Trading Commission, became the

FEC’s General Counsel. Mr. Norton

replaced former FEC General

Counsel Lawrence M. Noble.

Before joining the FEC, Mr.

Norton served as the Associate

Director of the Division of Enforcement at the Commodity Futures

Trading Commission and as an

Assistant Director at the Federal

Trade Commission. In addition, he

was a frequent speaker on federal

regulatory issues, a standing member of multi-agency task forces and

an adjunct instructor with the

National Institute of Trial Advocacy.

Before joining the federal government, Mr. Norton was an Assistant Attorney General in the Civil

Litigation Division of the Maryland

Attorney General’s Office. He is a

graduate of the University of

Maryland School of Law.

—Amy Kort

(continued on page 3)
Federal Election Commission RECORD October 2001

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)

Danny L. McDonald, Chairman

David M. Mason, Vice Chairman

Karl J. Sandstrom, Commissioner

Bradley Smith, Commissioner

Scott E. Thomas, Commissioner

Darryl R. Wold, Commissioner

James A. Pehrkon, Staff Director

Lawrence H. Norton, General

 Counsel

Published by the Information

 Division

Greg J. Scott, Acting Assistant

 Staff Director

Amy Kort, Editor

http://www.fec.gov

the bank’s receipt of the transfer

request. However, Mr. Moore

submitted a signed, sworn declaration to the Commission that he

specifically remembered faxing the

request to the bank and that, to the

best of his knowledge, the bank

received the request and failed to

honor it.1

 The Party disclosed the

disbursements for which the

nonfederal portion was to be

transferred in its pre-special election

report, which was timely filed on

June 7. A post-special election

report, recording several transfers

(but not the transfer requested on

June 18), was filed on July 19.

Analysis

Commission regulations require

that a state party committee with

separate federal and nonfederal

accounts must pay the expenses of

mixed federal and nonfederal

activities, including administrative

expenses such as rent, utilities,

office supplies and salaries (except

for such expenses directly attributable to a clearly identified candidate), from its federal account or a

separate allocation account. 11 CFR

106.5(g)(1). The committee may

transfer funds from its nonfederal

account to its federal account solely

to cover the nonfederal share of the

allocable expense. Such a transfer

must be made no more than 10 days

before, and no more than 60 days

after, the payments for the allocable

expense. 11 CFR 106.5 (g)(2)(ii).

Any transfer from the nonfederal

account made outside this window

is “presumed to be a loan or contribution from the nonfederal account

to a federal account, in violation of

the Act.” 11 CFR 106.5(g)(2)(iii).

If the wire transfer had been

made on June 18, it would have

been timely for all of the disbursements covered in the amount of the

transfer. The Commission relies

upon the representations in the

advisory opinion request, and in

particular on Mr. Moore’s declaration under penalty of perjury that he

faxed the request to the bank, as

truthful descriptions of the Party’s

actions with respect to the attempted

transfer of funds. In past advisory

opinions, the Commission has

addressed situations where contribution monies were not received by a

political committee, or deposited by

it in a timely manner, because of

circumstances outside the control of

the committee or its agents. AO’s

1999-23, 1993-5 and 1992-42. The

Party’s situation is analogous to

those dealt with in previous advisory opinions in that the required

action was not performed. The

Commission also found significant

that the Party:

• Made the transfer request in a

timely manner, so that the relevant

transfer would have been made

between 46 and 59 days after the

disbursements;

• Discovered that the transfer was

not made and notified the bank of

the discovery within 30 days after

the requested transfer date and

before the filing due date for the

report that would have disclosed

the transfer; and

• Expeditiously submitted this

advisory opinion request to the

Commission.

Given the bank’s of control over

the means of transfer and the Party’s

actions with respect to the requested

transfer, the Party may make the

transfer, originally requested on

June 18, from its nonfederal to its

federal account. The transfer must

occur within 15 days of the Party’s

receipt of this advisory opinion.

Reporting

The transfer must be disclosed on

the Party’s next scheduled report.

The Party must report the date the

transfer actually occurred, and must

include an explanatory note with the

report stating that:

• The transfer was not made within

the 70-day window of 11 CFR

106.5(g)(2)(ii) because of special

circumstances; and

• The Commission expressly

allowed the Party to make the

transfer in this advisory opinion,

which should be cited by number.

Date Issued: August 23, 2001;

Length: 5 pages.✦

—Gary Mullen

1

 A copy of the written request to the

bank was attached to the declaration.

Advisory Opinions

(continued from page 1)

Advisory Opinion Requests

AOR 2001-13

Status of Green Party as national

committee of political party (Green

Party of the United States, August

13, 2001)

AOR 2001-14

Local party’s allocation of

payments for employee’s salary,

benefits and cell phone usage (Los

Angeles County Democratic Central

Committee, August 31, 2001)✦
October 2001 Federal Election Commission RECORD

3

Staff

(continued from page 1)

Robert J. Costa Named

Deputy Staff Director for

Audit and Review

The Commission has appointed

Robert J. Costa to be the agency’s

first Deputy Staff Director for Audit

and Review. In this newly-created

position, Mr. Costa will oversee

both the Audit and the Reports

Analysis Divisions.

Mr. Costa joined the FEC in 1975

and in 1977 became the Assistant

Staff Director for the Audit Division, where he managed the

Commission’s Title 2 and Title 26

audit programs. Prior to joining the

Commission, Mr. Costa worked for

the General Accounting Office and

the Senate Select Committee on

Presidential Campaign Finance

Activity.✦

—Amy Kort

Court Cases

New Litigation

Judicial Watch, Inc. v. FEC

On August 17, 2001, Judicial

Watch, Inc., a nonprofit, public

interest organization, asked the U.S.

District Court for the District of

Columbia to find that the Commission acted contrary to law when it

failed to respond to the

organization’s administrative

complaint. The April 10, 2001,

administrative complaint alleged

that Representative Tom DeLay and

the National Republican Congressional Committee (NRCC) sold

meetings with top Bush Administration officials in exchange for

campaign contributions to the

NRCC. Judicial Watch contended

that the NRCC was required to

report these meetings to the Commission as “offsets to contributions.” 2 U.S.C. §434(b) and 11

CFR 104.3. Judicial Watch asked

the Commission to investigate

because it believed that the meetings

had not been reported and would not

be reported in the future.

In its request for declaratory

relief, Judicial Watch alleges that

the Commission did not act on the

complaint within 120 days, as

required by the Federal Election

Campaign Act. Judicial Watch asks

that the court:

• Declare the Commission’s failure

to act on the complaint contrary to

law;

• Direct the Commission to act

within 30 days; and

• Retain jurisdiction over this action.

U.S. District Court for the

District of Columbia,

1:01CV01747.✦

—Amy Kort

On Appeal

FEC v. NRA

On August 23, 2001, the Court of

Appeals for the District of Columbia Circuit denied the

Commission’s petitions to have this

case reheard by a panel of the court

and heard en banc. The Commission had asked the court to revisit a

portion of its June 29, 2001, ruling.

The court had held that in 1980 the

National Rifle Association (NRA)

qualified for a limited exemption to

the Federal Election Campaign

Act’s ban on corporate contributions and expenditures. This case

was summarized in the August 2001

Record, p. 3.

Although the court denied the

FEC’s petitions, it did—at the

Commission’s request—clarify that

the NRA’s 1980 exemption applied

only to corporate independent

expenditures and not to corporate

contributions to candidates.✦

—Jim Wilson

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 (go to www.fec.gov,

then click on “Campaign Finance

Law Resources” and then scroll

down to “Publications”).

 If you would like to place an

order for paper copies of the

Campaign Guides, please call

800-424-9530, press 1, then 3.

Public Appearances

October 10

George Washington University

Washington D.C.

George Smaragdis

October 15-16

Hillsdale College

Scottsdale, Arizona

Commissioner Smith

October 19-20

American Bar Association Standing

Committee on Election Law

Santa Fe, New Mexico

Vice Chairman Mason

October 24

Cumberland School of Law

Federalist Society

Birmingham, Alabama

Commissioner Smith

October 31

American University

Washington D.C.

Jim Wilson
Federal Election Commission RECORD October 2001

4

South Carolina Special

Election Reporting

The Special Election to fill the

U.S. House seat of the late Congressman Floyd Spence in the

Second Congressional district of

South Carolina will be held on

December 18, 2001. The Special

Primary will be October 30 and the

Special Runoff, if needed, will be

November 13. Committees involved

in any of these elections should

consult the accompanying chart for

filing information.1

Note that 48-hour notices are

required of authorized committees

that receive contributions of $1,000

or more between October 11 and

October 27 for the Special Primary,

between November 29 and December 15 for the Special General and

between October 25 and November

10 for the Special Runoff, if that

election is held.

Reports filed electronically must

be submitted by midnight on the

filing date. A committee required to

file electronically that files instead

on FEC paper reporting forms will

be considered a nonfiler.

Reports filed on paper and sent

by registered or certified mail must

be postmarked by the mailing date;

reports sent by any other means

(including reports sent via first class

mail) must be received by the

Commission’s close of business on

the filing date.

For more information about any

of these filing requirements, please

call the FEC’s Information Division

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

202/694-1100.✦

—Amy Kort

1

 These committees include authorized

committees of candidates running in the

election and other political committees

(including PACs) that support these

candidates and do not file monthly.

Reports South Carolina Special Election Reporting

For Committees Involved Only in the Special Primary Election:

Close of Reg./Cert. Filing

Books Mail Date Date

Pre-Primary Report October 10 October 15 October 18

Year-End Report December 31 January 31 January 31, 2002

For Committees Involved in Both the Special Primary and

Special General If Only Two Elections are Held:

Close of Reg./Cert. Filing

Books Mail Date Date

Pre-Primary Report October 10 October 15 October 18

Pre-General Report November 28 December 3 December 6

Post-General and

Year-End Report1 January 7 January 17 January 17, 2002

For Committees Involved in Only the Special Primary and

Special Runoff:

Close of Reg./Cert. Filing

Books Mail Date Date

Pre-Primary Report October 10 October 15 October 18

Pre-Runoff Report October 24 October 29 November 1

Year-End Report December 31 January 31 January 31, 2002

For Committees Involved in the Special Primary, Special

Runoff and Special General:

Close of Reg./Cert. Filing

Books Mail Date Date

Pre-Primary Report October 10 October 15 October 18

Pre-Runoff Report October 24 October 29 November 1

Pre-General Report November 28 December 3 December 6

Post-General and

Year-End Report1 January 7 January 17 January 17, 2002

1

Committees should file a consolidated Post-General and Year-End Report

by the filing date of the Post-General Report. Note that PACs and parties,

which must aggregate activity on a calendar-year basis, will be required to

file this report on two separate forms—one form to cover the 2001 activity

(labeled as the Year-End Report) and another form to cover only 2002

activity (labeled as the Post-General Report).
October 2001 Federal Election Commission RECORD

5

(continued on page 6)

Committees Fined for

Nonfiled and Late Reports

The Commission recently

publicized its final action on 52 new

Administrative Fine cases, bringing

the total number of cases released to

the public to 240.

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

fine 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 preprimary, October quarterly and

October monthly reports), receive

Administrative

Fines

Trade/ Corp. w/o

Member/ Coop- Capital NonCorporate Labor Health erative Stock connected1 Total

Jul. ’95 1,670 334 804 43 129 1,002 3,982

Dec. ’95 1,674 334 815 44 129 1,020 4,016

Jul. ’96 1,645 332 829 43 126 1,058 4,033

Dec. ’96 1,642 332 838 41 123 1,103 4,079

Jul. ’97 1,602 332 826 41 118 953 3,875

Dec. ’97 1,597 332 825 42 117 931 3,844

Jul. ’98 1,565 325 820 43 112 897 3,762

Dec. ’98 1,567 321 821 39 115 935 3,798

Jul. ’99 1,540 318 826 38 115 941 3,778

Jan. ’00 1,548 318 844 38 115 972 3,835

Jul. ’00 1,523 316 812 39 114 902 3,706

Jan . ’01 1,545 317 860 41 118 1,026 3,907

Jul. ’01 1,525 314 872 41 118 1,007 3,877

1Nonconnected PACs must use their own funds to pay fundraising and administrative expenses, while the other categories of PACs have corporate or labor “connected organizations” that are permitted to pay those expenses for their PACs. On

the other hand, nonconnected PACs may solicit contributions from the general

public, while solicitations by corporate and labor PACs are restricted.

Midyear PAC Count Shows

Slight Decrease from

January 2001

The FEC’s semiannual PAC

count reveals a small decrease in the

number of PACs since the last count

was taken in January 2001. The

table at right shows the midyear and

year-end PAC figures since 1995.

To see a complete listing of PAC

statistics dating back to 1975, visit

the FEC’s web site (http://

www.fec.gov) or request a copy of

the agency’s August 21, 2001, press

release (call 800/424-9530 and press

3 for the Public Records Office or

press 2 for the Press Office).✦

Statistics

Committees Fined and Penalties Assessed

 1. AAN-Nursery Industry PAC $950

 2. American Academy of Emergency Medicine PAC $775

 3. American Concrete Pavement Association PAC $900

 4. American Meat Institute PAC $375

 5. American Moving and Storage Association $750

 6. Americans for Sound Energy Policy $1,800

 7. ARPAC $900

 8. Autonation Inc. Political Action Committee (Pre-General) $1,000

 9. Autonation Inc. Political Action Committee (Post-General) $900

10. Azinger for Congress Committee $2,7001

11. Campaign America Inc. $900

12. Clarke 2000 $3,0001

13. Dooley for Congress $5,5001

14. Driscoll for Congress $250

15. Dunn Lampton for Congress $4,500

16. Eva Clayton Committee for Congress $3,100

17. Federal Independent Campaign Committee $775

18. First Health Group Corp. $500

17. Friends of John Conyers $3,500

20. Friends of John LaFalce $5,000

21. GAF Corporation and International Specialty Products Inc. $900

1 This civil money penalty has not been collected.
Federal Election Commission RECORD October 2001

6

The first number in each citation

refers to the “number” (month) of

the 2001 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

Alternative disposition of 2001-5,

5:6

2000-24: Preemption of state

election law mandating fixed

allocation ratio for administrative

and voter drive expenses, 2:2

2000-27: Status of party as state

committee, 3:6

2000-28: Disaffiliation of trade

associations and their PACs, 2:3

2000-30: Nonconnected PAC’s

receipt and use of securities, 5:1

2000-32: Reporting uncollectable

loan, 1:9

2000-34: Name and acronym of

SSF, 2:5

Index

22. Gerald C. “Jerry” Weller for Congress $9,000

23. The Green/Green Party USA $575

24. Humane USA PAC $550

25. International Council of Cruise Lines PAC $3,3751

26. Internet Leadership PAC $825

27. Kilian for Congress Committee $02

28. Lawyers for Better Government Fund-Federal $900

29. Libertarian Party of Illinois $2,7001

30. McNary for Congress Committee $6,5001

31. National Association of Mortgage Brokers PAC $2,700

32. National Community Pharmacists Association PAC $425

33. National Fisheries Institute Fisheries PAC $9001

34. National Pest Control Association PAC $300

35. Park Place Entertainment Federal PAC Inc. $900

36. Paul Williams for Congress (October Quarterly) $1,8001

37. Paul Williams for Congress (Post-General) $1,8001

38. Political Action Council of Educators

(United Teachers—Los Angeles) $900

39. Prairie Leadership Committee $900

40. Qwest Communications International Inc. PAC $900

41. Re-Elect Freshman of the Republican Majority (Reform PAC) $3,500

42. Reliant Energy Entex Citizenship Responsibility Group $475

43. Rite Aid PAC $2,700

44. Rod Martin for Congress, Inc. $4751

45. Ryder Empls PAC $900

46. Services Group of America PAC $400

47. Southdown Inc. PAC (Pre-General) $1,000

48. Southdown Inc. PAC (Post General) $250

49. Transport Workers Union-Local 100

Political Contributions Committee $2,600

50. Troutt for Congress $2,7001

51. Waddell & Reed Financial Inc. PAC $775

52. 1199 & 32 BJ/144 SEIU Homecare PAC $1,800

Administrative Fines

(continued from page 5)

1 This civil money penalty has not been collected.

2Penalty reduced due to lack of activity on the report.

Committees Fined and Penalties Assessed, Cont.

higher penalties. The committees

and the treasurers are assessed civil

money penalties when the Commission makes its final determination.

Unpaid civil money penalties are

referred to the Department of the

Treasury for collection.

The committees listed in the chart

on page 5 and below, along with

their treasurers, were assessed civil

money penalties under the administrative fine regulations.

Closed Administrative Fine case

files are available through the FEC

Press Office, at 800/424-9530 (press

2) and the Public Records Office, at

800/424-9530 (press 3).✦

—Phillip Deen

Outreach

FEC Announces Regional

Conference in San Francisco

On February 5-7, 2002, the FEC

will hold a conference in San

Francisco for candidates, political

action committees (PACs) and party

committees. The conference will

consist of a series of workshops

presented by Commissioners and

experienced FEC staff, who will

explain how the requirements of the

federal election law apply to candidate committees, parties and PACs.

The conference will be held at the

Grand Hyatt hotel, located on Union

Square. More specific information

about this conference will be made

available in future issues of the

Record.✦

—Amy Kort
October 2001 Federal Election Commission RECORD

7

2000-35: Status of party as state

committee, 1:10

2000-36: Disaffiliation of nonconnected PACs, 2:5

2000-37: Use of campaign funds to

purchase and present Liberty

Medals, 2:6

2000-38: Registration of party

committee due to delegate

expenses, 2:7

2000-39: Status of party as state

committee, 2:8

2000-40: Donations to legal defense

fund of Member of Congress, 3:7

2001-1: Use of political party’s

office building fund to pay

building renovation costs and

fundraising expenses of building

fund, 4:5

2001-2: Status of party as state

committee, 4:6

2001-3: Use of campaign funds to

purchase an automobile for

campaign purposes, 5:5

2001-4: Use of electronic signatures

for PAC contributions by payroll

deduction, 6:6

2001-6: Status of party as state

committee, 6:7

2001-7: Nonaffiliation of LLC PAC

with SSFs of member companies

of the LLC, 8:6

2001-8: Campaign committee’s

purchase of candidate’s book for

distribution to contributors, 8:9

2001-9: Former Senator’s use of

excess campaign funds to pay

expenses resulting from media

inquiries made after his term

expired, 9:1

2001-10: Employment of

candidate’s spouse by campaign

committee, 9:4

2001-11: Late transfer from

nonfederal to federal account of

state party committee after bank

transfer problem, 10:1

Compliance

Committees fined under Administrative Fines Program, 2:6, 4:7, 5:7,

6:5, 7:8, 9:6, 10:5

MUR 4594: Prohibited Foreign

National Contributions, 6:8

MUR 4762: Prohibited union

contributions and other violations,

2:9

MUR 5029: Contributions in the

name of another made by corporation and government contractor,

2:10

Court Cases

_____ v. FEC

– AFL-CIO and DNC Services

Corp./DNC, 9:8

– Beaumont, 2:8, 3:2, 5:6, 6:9

– Buchanan, 1:10

– Cunningham, 8:4

– DNC, 2:8. 3:2

– Dole, 5:6

– Judicial Watch, 10:3

– Kieffer, 7:7

– Miles for Senate, 3:3

– Nader, 4:8, 6:9

– Natural Law Party of the United

States of America, 1:10, 2:8, 3:2

FEC v. _____

– Colorado Republican Federal

Campaign Committee, 8:1

– Friends for Fasi, 6:8

– NRA, 8:3, 10:3

– Toledano, 7:8

Other

– Hooker v. All Campaign Contributors, 1:10

– Hooker v. Sundquist, 4:8

Regulations

Advance Notice of Proposed

Rulemaking on definition of

“political committee,” 4:1

Notice of Proposed Rulemaking on

brokerage loans and lines of

credit, 9:1

Notice of Proposed Rulemaking on

reporting of independent expenditures and last-minute contributions, 6:1

Final rules for general public

political communications coordinated with candidates and party

committees; independent expenditures, 1:2, 6:3

Reports

Amendments to Statements of

Organization, 2:1

Arkansas special election, 9:5

Arizona state filing waiver, 6:10

California special election, 3:5

Committees required to file tax

returns, 3:4

Florida special election, 7:4

July reporting reminder, 7:1

Massachusetts special election, 7:6

Nevada state filing waiver, 2:2

Pennsylvania special election, 4:5

Reports due in 2001, 1:4

South Carolina special election,

10:4

Virginia special election, 5:6

PACronyms Available

 The Commission annually

publishes PACronyms, an

alphabetical listing of acronyms,

abbreviations and common names

of political action committees

(PACs).

 For each PAC listed, the index

provides the full name of the

PAC, its city, state, FEC

identification number and, if not

identifiable from the full name,

its connected, sponsoring or

affiliated organization.

 The index is helpful in identifying PACs that are not readily

identified in their reports and

statements on file with the FEC.

 To order a free copy of

PACronyms, call the FEC’s

Disclosure Division at 800/424-

9530 (press 3) or 202/694-1120.

PACronyms also is available on

diskette for $1 and can be

accessed free under the “Using

FEC Services” icon at the FEC’s

web site—http://www.fec.gov.
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Washington, DC 20463

Official Business

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Printed on recycled paper

Federal Election Commission RECORD October 2001