October 2002 Federal Election Commission Volume 28, Number 10

Table of Contents

Regulations

1 Notice of Proposed Rulemaking

on Disclaimers, Fraudulent

Solicitation, Civil Penalties and

Personal Use of Campaign Funds

4 Notice of Proposed Rulemaking

on Coordinated and Independent

Expenditures

Reports

1 October Reporting Reminder

2 Federal Register

Court Cases

7 New Litigation

8 Advisory Opinions

Alternative Dispute Resolution

9 ADR Program Update

Compliance

9 Nonfilers

Statistics

10 Congressional Campaign

Fundraising Declines in 2002

11 Public Appearances

11 Index

Regulations Reports

October Reporting

Reminder

Committees should take note of

the following due dates for October

reports:

• Third Quarter reports for quarterly

filers are due on October 15 (close

of books, September 30);

• October monthly reports for

monthly filers are due on October

20 (close of books, September 30);

and

• Pre-general reports are due on

October 24 (close of books,

October 16). Candidate committees must file this report if their

candidate is running in the general

election. PACs and party committees that file quarterly must file

this report if they make contributions or expenditures between the

1st and 16th of October in connection with a federal election. PACs

and party committees that file on a

monthly schedule must file a pregeneral report in lieu of the

scheduled November monthly

report.

In addition to these reports,

candidate committees may also have

to file 48-hour notices of last-minute

contributions, and PACs and party

committees may need to file 24-

Notice of Proposed

Rulemaking on Disclaimers,

Fraudulent Solicitation, Civil

Penalties and Personal Use of

Campaign Funds

On August 29, 2002, the Commission published in the Federal

Register a Notice of Proposed

Rulemaking (NPRM) seeking

comments on proposed regulations

to implement provisions of the

Bipartisan Campaign Reform Act of

2002 (BCRA). These provisions:

• Specify new requirements for

disclaimers accompanying radio,

television and print campaign

communications;

• Expand the scope of the statutory

prohibition on fraudulent misrepresentation;

• Increase the civil penalties for

violating the ban on contributions

in the name of another; and

• Codify several aspects of the

current regulatory test for the

permissible use of campaign funds

by candidates and federal officeholders.

The proposed rules are available

on the FEC web site at http://

www.fec.gov/register.htm and were

(continued on page 3) (continued on page 2)
Federal Election Commission RECORD October 2002

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)

David M. Mason, Chairman

Karl J. Sandstrom, Vice Chairman

Danny L. McDonald,

 Commissioner

Bradley A. Smith, Commissioner

Scott E. Thomas, Commissioner

Michael E. Toner, Commissioner

James A. Pehrkon, Staff Director

Lawrence H. Norton, General

 Counsel

Published by the Information

 Division

Greg J. Scott, Assistant Staff

 Director

Amy Kort, Editor

http://www.fec.gov

Reports

(continued from page 1)

hour notices to disclose any lastminute independent expenditures.

Filing Electronically

Under the Commission’s mandatory electronic filing regulations,

individuals and organizations that

receive contributions or make

expenditures in excess of $50,000 in

a calendar year—or that expect to

do so—must file all reports and

statements with the FEC electronically. Electronic filers who instead

file on paper or submit an electronic

report that does not pass the validation test will be considered nonfilers

and may be subject to enforcement

actions (including administrative

fines). If the report passes the

validation test and is accepted, the

filer will receive a faxed or e-mailed

receipt; if a filer does not receive

this receipt, he or she should assume

that the report is not successfully

filed.

Senate committees and other

committees that file with the

Secretary of the Senate are not

subject to the mandatory electronic

filing rules, but may file an unofficial copy of their reports with the

Commission in order to speed

disclosure. 11 CFR 104.18.

Filing by Mail

All reports sent via first-class or

overnight mail must be received by

the Commission by the filing date,

or by the Friday before if the due

date falls on a weekend or federal

holiday. Thus, in the case of the

October monthly report, reports

filed by first-class or overnight mail

must be received by the Commission on or before Friday, October

18.

October monthly and quarterly

reports sent by registered or certified mail must be postmarked by the

filing date to be considered timely

filed. The pre-general report,

however, must have a registered or

certified postmark on or before

October 21 in order to be considered

timely filed. A committee sending

its reports via registered or certified

mail should keep its mailing receipt

with the U.S. Postal Service postmark as proof of filing. The U.S.

Postal Service does not keep

complete records of items sent by

certified mail.

Please note that the Postal

Service continues to irradiate mail

directed to many federal agencies,

including the FEC. This process has

not only delayed mail delivery, but

it has also damaged and in some

cases destroyed pieces of mail. As a

result, committees that file reports

with the Commission may want to

consider submitting their reports by

some means other than regular U.S.

mail. Alternative methods include:

• Electronic filing;

• Overnight mail delivery; and

• Hand delivery.

If you use one of these alternate

methods, your report must be

received by the Commission on or

before the filing date to be timely

filed (or by October 18 for the

October monthly report). Committees that choose to file electronically

can download free FECFile software

from the FEC web site at http://

www.fec.gov/elecfil/electron.html,

and may contact the Commission’s

Electronic Filing office for assistance at 800/424-9530 or 202/694-

1307.

Additional Information

For more information on 2002

reporting dates:

• See the reporting tables in the

January 2002 Record, page 4;

• Call and request the reporting

tables from the FEC at 800/424-

9530 (press 1, then 3) or 202/694-

1100;

• Fax the reporting tables to yourself

using the FEC’s Faxline (202/501-

3413, document 586); or

• Visit the FEC’s web page at http://

www.fec.gov/pages/report.htm to

view the reporting tables online.✦

—Amy Kort

Federal Register

Federal Register notices are

available from the FEC’s Public

Records Office, on the FEC web

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

register.htm and from the FEC

faxline, 202/501-3413.

Notice 2002-15

Notice of Proposed Rulemaking

on Disclaimers, Fraudulent

Solicitation, Civil Penalties and

Personal Use of Campaign Funds

(67 FR 55348, August 29, 2002).

Notice 2002-16

Notice of Proposed Rulemaking

on Coordinated and Independent

Expenditures (67 FR 60042,

September 24, 2002).
October 2002 Federal Election Commission RECORD

3

Regulations

(continued from page 1)

open for comments until September

27, 2002.

Disclaimers

Under the Federal Election

Campaign Act (the Act) and current

regulations, communications that

expressly advocate the election or

defeat of a clearly-identified candidate or that solicit funds must

include disclaimers identifying who

paid for and, in some cases, who

authorized the communication. 11

CFR 110.11. The BCRA expands

this disclaimer requirement to reach

“any communication” made by a

political committee—including

communications that do not expressly advocate the election or

defeat of a clearly-identified federal

candidate or solicit a contribution—

and also requires that “electioneering communications” include

disclaimers.1The BCRA also

requires that additional, more

specific information be included in

some disclaimers. For example,

under the BCRA a disclaimer for a

communication that is not authorized by a candidate must include

the permanent street address,

telephone number or web site

address of the person who paid for

the communication.

The NPRM proposed replacing

current section 11 CFR 110.11 with

a new section with the same number

that incorporates these statutory

changes. The proposed regulations

would clarify that the disclaimer

requirements in this section apply

only to “communications through

any broadcast, cable or satellite

transmission, newspaper, magazine,

outdoor advertising facility, mailing

or other type of general public

political advertising.” The Commission requested comments on how to

define such terms as “communication” for the purposes of the section.

The NPRM also sought comments on proposed regulations that

require all disclaimers to be “clear

and conspicuous” and that specify

additional requirements for communications disseminated by various

media. In the case of printed communications, for example, the

BCRA requires that the disclaimer

be of a “sufficient type size.” The

Commission asked whether the

regulations should define “sufficient

type size” and, if so, whether it

should be defined in relation to the

type size of other text used in the

communication, and/or whether the

Commission should include a safe

harbor for disclaimers of at least a

specified size. The NPRM posed

similar questions about defining a

“reasonable degree of color contrast” between the background and

the printed disclaimer.

In the case of radio and television

communications that are authorized

by a candidate, the BCRA requires

the candidate to deliver the communication orally, identifying himself

or herself and stating that he or she

has approved the communication.

For televised communications, the

BCRA also requires that a fullscreen view or picture of the candidate appear while he or she voices

the disclaimer. The disclaimer must

also appear in writing for at least

four seconds at the end of the ad

with a “reasonable degree of color

contrast” between the printed

statement and the background. The

Commission asked whether and how

to define safe harbors for both the

spoken and printed disclaimers.

Disclaimers for radio and television communications that are not

authorized by a candidate must

include the name of the political

committee or other person who is

responsible for the ad and, if

applicable, the name of the sponsoring committee’s connected organization. In the case of a televised ad,

the disclaimer must be spoken by a

representative of the committee that

paid for it. The Commission sought

comments on whether the regulation

should specify who may represent

the ad’s sponsor for this purpose.

Prohibitions on Fraudulent

Solicitations

The BCRA prohibits any person

from fraudulently misrepresenting

that he or she is acting on behalf of

a candidate or political party for the

purpose of soliciting contributions

or donations. It also prohibits

persons from participating in, or

conspiring to participate in, plans to

make such fraudulent misrepresentations. The proposed rules would

create a new section to implement

this provision. The new section

1

 “Electioneering communications” are

addressed in a separate rulemaking.

See the September 2002 Record, page

10.

(continued on page 4)

FEC Accepts Credit

Cards

 The Federal Election

Commission now accepts

American Express, Diners Club

and Discover Cards in addition to

Visa and MasterCard. While most

FEC materials are available free

of charge, some campaign finance

reports and statements, statistical

compilations, indexes and

directories require payment.

Walk-in visitors and those

placing requests by telephone

may use any of the above-listed

credit cards, cash or checks.

Individuals and organizations

may also place funds on deposit

with the office to purchase these

items. Since pre-payment is

required, using credit cards or

funds placed on deposit can speed

the processing and delivery of

orders. For further information,

contact the Public Records Office

at 800/424-9530 (press 3) or 202/

694-1120.
Federal Election Commission RECORD October 2002

4

would also include the

Commission’s existing prohibition

on fraudulent misrepresentations by

candidates and their agents, which is

currently found at 11 CFR 110.9(b).

Increase in Civil Penalties

The BCRA raises civil penalties

for knowing and willful violations

of the Act’s prohibition on contributions made in the name of another.

The proposed rules would reorganize 11 CFR 111.24(a) to separately

address such violations and set the

civil penalties at:

• No less than 300 percent of the

amount of the contribution involved; and

• No more than $50,000 or an

amount equal to 1,000 percent of

the amount of the contribution

involved, whichever is greater.

Personal Use of Campaign Funds

The BCRA codifies many of the

Commission’s current regulations

concerning candidates’ personal use

of campaign funds, including the socalled “irrespective” test, which

states that “personal use” means the

use of excess campaign funds for

any expense “that would exist

irrespective of the candidate’s

campaign or duties as a Federal

officeholder.” 11 CFR 113.1(g) and

113.2. The Commission’s regulations include a list of uses that

constitute per se personal use of

campaign funds. 11 CFR

113.1(g)(1)(i). The Commission

proposed keeping most of its

personal use regulations unchanged,

but making three additions to its list

of per se personal uses:

1. Non-campaign-related vehicle

expenses;

2. Vacations and non-campaign

related travel; and

3. Salary payments or other compensation to the candidate to

defray the cost of income lost as

a result of campaigning.

The Commission sought comments on whether candidates who

are also federal officeholders could

use campaign funds to pay for travel

that is not related to the campaign

but rather to officeholder duties and

whether such travel should be

considered on a case-by-case basis.

The Commission also proposed

adding a recordkeeping requirement

for vehicles that are used in part for

the campaign and in part for personal use. This proposed regulation

is based on AO 2001-3, where the

Commission advised a member of

Congress who proposed to pay for a

vehicle with campaign funds and

use it for a combination of campaign, official and personal uses, to

keep a log or other record to document the dates and expenses related

to personal use.

Availability of Comments

The Commission will make every

effort to post public comments on its

web site within 10 business days of

the close of the comment period.✦

—Amy Kort

Notice of Proposed

Rulemaking on Coordinated

and Independent

Expenditures

On September 12, 2002, the

Commission approved a Notice of

Proposed Rulemaking (NPRM)

seeking comments on proposed

changes to its regulations on coordinated and independent expenditures.

The proposed rules would implement provisions of the Bipartisan

Campaign Reform Act (BCRA)

that:

• Require additional reporting of

independent expenditures;

• Define coordination between a

candidate or a political party and a

person making a communication;

and

• Address independent and coordinated expenditures by political

party committees.

The NPRM was published in the

September 24, 2002, Federal

Register (67 FR 60042), and is open

to public comments until October

11, 2002.

Definition of Agent

Proposed 11 CFR 109.3 would

define the term “agent” for use

throughout part 109, which addresses independent and coordinated

expenditures. The proposed definition focuses on whether a purported

agent has “actual authority, either

express or implied,” to act on behalf

of the principal by engaging in one

of a list of specified actions. The

Commission seeks comments on

whether a person must be “acting

within the scope of his or her

authority as an agent” while engaged in the action in question

before he or she is considered an

agent. The Commission also seeks

comments on whether a person who

is authorized by a candidate or

political party committee to solicit

or receive contributions or other

transfers of funds, and who holds a

formal or honorary position with the

campaign or party committee,

Regulations

(continued from page 3)

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

through the Internet as PDF files.

Visit the FEC’s World Wide Web

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

click on “What’s New” for this

issue. Click “Campaign Finance

Law Resources” to see back issues. Future Record issues will be

posted on the web as well. 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.
October 2002 Federal Election Commission RECORD

5

PACronyms, Other

PAC Publications

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 at www.fec.gov/

pages/pacronym.htm.

Other PAC indexes, described

below, may be ordered from the

Disclosure Division. Prepayment

is required.

• An alphabetical list of all

 registered PACs showing each

 PAC’s identification number,

 address, treasurer and

 connected organization ($13.25).

• A list of registered PACs

 arranged by state providing the

 same information as above

 ($13.25).

• An alphabetical list of

 organizations sponsoring PACs

 showing the PAC’s name and

 identification number ($7.50).

 The Disclosure Division can

also conduct database research to

locate federal political committees

when only part of the committee

name is known. Call the telephone

numbers above for assistance or

visit the Public Records Office in

Washington at 999 E St., NW.

should be considered per se to be an

agent of that candidate or party

committee.

Independent Expenditure

Reporting

New Requirement. The BCRA

adds a new reporting requirement

for political committees and persons

who make independent expenditures

that aggregate $10,000 or more. In

addition to existing reporting

requirements for independent

expenditures, new “48-hour reports”

must be received by the Commission within two days after the

$10,000 threshold is reached at any

time during the campaign, up to and

including the 20th day before an

election.

The Commission seeks comment

on a number of issues involving

both 48- and 24-hour notices of

independent expenditures, including

whether a person or political

committee should calculate the

aggregate amount of independent

expenditures to date by:

• Only including disbursements for

communications that have been

publicly distributed; or

• Also including any disbursements

made for communications and

contracts obligating funds for

communications.

Coordination

BCRA repealed Commission

regulations defining a “coordinated

general public political communication” and instructed the Commission

to promulgate new rules on “coordinated communications paid for by

persons other than candidates,

authorized committees of candidates, and party committees.” Pub.

L. 107-155, sec. 214(c) (March 27,

2002).

The proposed rules would

introduce the three required elements of a “coordinated communication.” For a communication to be

deemed “coordinated,” all three

parts of the test would have to be

satisfied. The three parts of the test

include:

• The requirement that a communication be paid for by someone

other than the candidate, the

candidate’s committee or a party

committee;

• A “content standard” regarding the

subject matter of the communication; and

• A “conduct standard” regarding

interactions between the person

paying for the communication and

the candidate or political party

committee or their agents.

Content Standard. The purpose of

the proposed content standards is to

determine whether a communication

is reasonably related to an election.

A communication that met any of

the standards would be judged to

have met the content standard. The

proposed content standards are:

1. The communication meets the

proposed definition of “electioneering communication”;1

2. Republication, dissemination or

distribution of candidate campaign materials in a communication would amount to a contribution;2 or

3. The communication expressly

advocates the election or defeat

of a clearly identified candidate

for federal office.

The NPRM also provides a fourth

content standard in the form of three

alternatives that are framed in terms

of a “public communication” that

refers to a clearly identified candi1

 For the proposed rules regarding

electioneering communications, see the

Federal Register notice at 67 FR 51131

and the September 2002 Record, page

10.

2 In order for a communication to be

deemed coordinated under this content

standard, the sixth conduct standard

(below) must be satisfied.

(continued on page 6)
Federal Election Commission RECORD October 2002

6

date. The Commission seeks

comment on these and other possible content standards.

Conduct Standard. Under the

proposed rules, if one of the conduct

standards is met, and the first two

parts of the test (the content standards and the source of payment)

are also met, then the communication would be coordinated. The

conduct standards are:

1. A communication is made at the

“request or suggestion” of, or is

agreed to by, a candidate,

candidate’s committee or political party committee;

2. A candidate or political party

committee is “materially involved in decisions” about the

communication;

3. A communication is created,

produced or distributed after one

or more substantial discussions

between the person paying for

the communication and the

candidate clearly identified in the

communication, his or her

opponent or a political party

committee;

4. A person paying for a communication uses a “common vendor”

whose previous or current

relationship with the candidate or

political party committee allows

the vendor to acquire material

information about the plans,

projects, activities or needs of the

candidate or political party

committee, and the vendor

actually makes use of or conveys

this material information to the

payor;

5. A communication is paid for by a

person formerly employed by a

candidate or political party

committee during the election

cycle in which the communication is first publicly distributed,

and this person makes use of or

conveys material information

about the plans, projects, activities or needs of the candidate or

political party committee; or

6. The candidate or his or her

committee engages in any of the

conduct named in the first three

conduct standards with regards to

the subsequent dissemination,

distribution or republication of

campaign materials prepared by

that candidate.

The Commission seeks comment

on whether any exceptions to the

proposed content or conduct standards should be included in the final

rule.

Coordinated and Independent

Expenditures by Party

Committees3

The BCRA sets new restrictions

on political party committees’

coordinated party expenditures,

independent expenditures, transfers

and assignments of coordinated

party expenditure authorizations. 2

U.S.C. §441a(d)(4). The proposed

rules would implement these

restrictions by combining all

political committees established and

maintained by a national political

party into one group and all political

committees established and maintained by a given state political

party into another group for the

purposes of determining each

group’s permissible activities on

behalf of a general election nominee. The Commission requests

comments on the proposed combination of committees into these

national and state groups.

Coordinated or Independent

Expenditures. Under the proposed

rules, as soon as a political committee within a political party group

makes an independent expenditure

or a coordinated party expenditure

with respect to a candidate after

nomination, all political committees

within that political party group are

bound during the remainder of the

election cycle to whichever type of

expenditure the first political

committee makes.

Prohibited Transfers. Under the

BCRA, transfers of funds and some

assignments of authority to make

coordinated party expenditures

between political committees in

different political party groups

would be prohibited after:

1. A political committee within a

political party group makes a

coordinated party expenditure in

connection with the general

election campaign of a candidate;

and

2. A political committee within

another political party group

makes or intends to make an

independent expenditure with

respect to the same candidate.

After these two events, no

political committee within one

political party group electing to

make coordinated party expenditures would be able to make any

transfers to or receive any transfers

from any political committee within

the political party group electing to

make independent expenditures

during the remainder of the election

cycle. Also, after these two events

take place, no political committee

within a political party group

electing to make coordinated party

expenditures would be able to

assign authority to make coordinated party expenditures to any

political committee within the

political party group electing to

make independent expenditures

during the remainder of the election

cycle.

The Commission seeks comments

on such issues as whether to require

party committees to keep track of

the expenditure activities of other

party committees within the same or

another political party group, and/or

3 Prior to the enactment of BCRA, the

Commission had prohibited political

party committees from making independent expenditures. In FEC v.

Colorado Republican Federal Campaign Committee (“Colorado I”), the

Supreme Court held that political party

committees may make independent

expenditures. 518 U.S. at 611-612

(1996).

Regulations

(continued from page 5)
October 2002 Federal Election Commission RECORD

7

New Litigation

Stevens v. FEC

On May 7, 2002, William J.

Stevens and the Libertarian Party of

Illinois (the Party) filed a complaint

in the U.S. District Court for the

Northern District of Illinois, Eastern

Division, asking the court to set

aside or modify the Commission’s

final determination that the Party,

and its former treasurer Mr. Stevens,

failed to file a required disclosure

report. The plaintiffs also asked the

court to enjoin the Commission

from enforcing a civil money

penalty it assessed under the administrative fine regulations.

Court Complaint. According to

the complaint, in March 2002 the

Commission made a final determination that Mr. Stevens and the

Party had violated the Federal

Election Campaign Act (the Act) by

failing to file a 2001 Mid-Year

Report. 2 U.S.C. §434(a). The

Commission also assessed a $7,875

civil money penalty under its

Administrative Fine program based,

according to the complaint, on “an

assumed level of activity in the

amount of $108,755.” Under the

Commission’s Administrative Fine

regulations, penalties for nonfiled

reports are determined by the

estimated level of activity on the

report and any prior violations under

the administrative fine regulations.

11 CFR 111.43.

Mr. Stevens and the Party claim

that, because they did not raise any

federal campaign funds during the

reporting period in question and

allocated only $14,552.64 as shared

federal/nonfederal activity, they

were not involved in any substantial

activity that fell within the

Commission’s jurisdiction. The

plaintiffs allege that in determining

Court Cases BCRA on the FEC’s

Web Site

 The Commission has added a

new section to its web site

(www.fec.gov) devoted to the

Bipartisan Campaign Reform Act

of 2002 (BCRA).

The new page provides links to:

• The Federal Election Campaign

 Act, as amended by the BCRA;

• Summaries of major BCRA-

 related changes to the federal

 campaign finance law;

• Summaries of current litigation

 involving challenges to the new

 law;

• Federal Register notices

 announcing new and revised

 Commission regulations that

 implement the BCRA; and

• Information on educational

 outreach offered by the

 Commission, including

 upcoming Roundtable sessions

 and the Commission’s tentative

 2003 conference schedule.

 The new section also allows

individuals to view the

Commission’s calendar for

rulemakings, including projected

dates for the Notices of Proposed

Rulemaking, public hearings,

final rules and effective dates for

regulations concerning:

• Soft money;

• Electioneering Communications;

• Contribution Limitations and

 Prohibitions;

• Coordinated and Independent

 Expenditures;

• The Millionaires’ Amendment;

• Consolidated Reporting rules;

 and

• Other provisions of the BCRA.

 The BCRA section of the web

site will be continuously updated.

Visit www.fec.gov and click on

the BCRA icon.

how to track committees’ “intent to

make” independent expenditures.

Presidential Candidates. Finally,

Congress, at 2 U.S.C. §441a(d)(4),

may have effectively repealed the

prohibition on national party

committee independent expenditures

in support of general election

Presidential candidates. 11 CFR

110.7(a)(5). As already mentioned,

a national party committee can

make independent expenditures with

respect to a candidate. Since this

provision appears to equally apply

to party committee expenditures in

support of presidential or Congressional candidates, a national party

committee would appear able to

make independent expenditures with

respect to a presidential candidate,

regardless of whether a presidential

candidate accepts public funding.

Comments

The full text of the NPRM is

available on the FEC web site at

http://www.fec.gov/register.htm and

from the FEC faxline, 202/501-

3413.

All comments should be addressed to Mr. John Vergelli, Acting

Assistant General Counsel, and

must be submitted in either written

or electronic form by October 11,

2002. The Commission will hold a

public hearing on October 23 and

24. Commenters wishing to testify

must so indicate in their comments.

Written comments should be sent to

the Federal Election Commission,

999 E Street NW, Washington, DC

20463. Faxed comments should be

sent to 202/219-3923, with a printed

copy follow-up to insure legibility.

Electronic mail comments should be

sent to BCRAcoord@fec.gov and

must include the full name and

postal service address of the

commenter. Comments that do not

contain this information will not be

considered. No oral comments can

be accepted.

—Jim Wilson

(continued on page 8)
Federal Election Commission RECORD October 2002

8

Advisory

Opinions

AO 2002-9

Disclaimer Exception

Applied to Political Ads Sent

Via Short Messaging Service

Target Wireless may send

political ads to wireless phone

subscribers via Short Messaging

Service (SMS) without including a

disclaimer stating who paid for the

ad and whether it was authorized by

a candidate. SMS messages, like

the penalty, the Commission

overestimated the amount of activity

on the nonfiled report by calculating

the penalty based on the Party’s

federal and nonfederal activity. The

complaint also claims that the

Commission counted the same funds

twice by determining the penalty

according to both receipts and

disbursements.

The plaintiffs ask the court to

declare that “the application of the

Federal Election Campaign Act is

limited to federal election campaigns and cannot be applied to nor

include non-federal funds nor nonfederal activities.” They ask the

court to:

• Find that the plaintiffs are not in

violation of 2 U.S.C. §434(a) and

declare the civil money penalty

null and void;

• Enjoin the Commission from

enforcing the civil money penalty;

and

• Enter an order and judgment

setting aside the Commission’s

final determination or modifying it

to limit its application to federal

funds and activities only.

U.S. District Court for the

Northern District of Illinois, Eastern

Division, 02C-3291.✦

—Amy Kort

Commission regulations also

include exceptions to the disclaimer

requirement. For example, small

items upon which a disclaimer

cannot be conveniently printed, such

as bumper stickers, pins, buttons

and pens, do not require disclaimer.

11 CFR 110.11(a)(6)(i).

Some wireless telephone providers offer subscribers the option of

receiving “content,” such as news or

sports scores, on their wireless

phone screens through SMS. Target

Wireless proposes allowing political

advertisers to append messages such

as “Kids are Winners with Smith.”

SMS messages are limited to 160

characters in length, and the entire

message—including the sports or

news information, the political ad

and any disclaimer included—must

not use more than this number of

letters, symbols, spaces, punctuation

marks and single digits. Moreover,

it is not possible to send a two-part

message (with a total of 320 characters) because each SMS message is

treated as a separate message and

chances are remote that the two

messages would arrive on the

subscriber’s screen in tandem.

Application to Proposal

Given these facts, the disclaimer

exception for small items applies to

SMS messages that contain political

ads. The wireless telephone screens

and SMS technology limit the size

and the length of the information

that can be conveyed, thus placing

limits on the length of a political ad

that are similar to those that exist

with bumper stickers and other

small items.

Commissioners Smith and Toner

issued a concurring opinion on

September 4.

Date Issued: August 23, 2002;

Length: 4 pages.✦

—Amy Kort

1

 The Bipartisan Campaign Reform Act

of 2002 (BCRA), which will take effect

on November 6, 2002, mandates

additional disclaimer requirements.

First, the disclaimer requirements will

apply to “any” communication financed by a political committee

through any type of general public

political advertising, not just those that

expressly advocate the election or

defeat of a clearly-identified candidate

or that solicit a contribution. 2 U.S.C.

§441d(a). Second, all persons who

finance electioneering communications

will be subject to 2 U.S.C. §441d(a).

Third, for communications that are not

authorized by a candidate or

candidate’s committee, disclaimers will

have to include the “permanent street

address, telephone number or World

Wide Web address of the person who

paid for the communication.” 2 U.S.C.

§441d(a)(3).

bumper stickers, pins and other

small objects, are limited in the size

and length of the messages they can

contain, and thus the small-item

exception from the Commission’s

disclaimer requirement applies to

SMS messages. 2 U.S.C. §441d and

11 CFR 110.11 and 110.11(a)(6)(i).

Background

Under the Federal Election

Campaign Act and Commission

regulations, communications that

solicit a contribution or expressly

advocate the election or defeat of a

clearly-identified candidate and are

distributed through general public

political advertising must contain a

disclaimer. 2 U.S.C. §441d and 11

CFR 110.11. The disclaimer must

indicate who paid for the communication and, if made in support of a

candidate, whether that candidate or

a candidate’s committee authorized

the communication. If the

candidate’s committee both authorizes and pays for the communication, then the disclaimer must state

that the communication was paid for

by the campaign committee. 11 CFR

1109.3, 110.11(a)(1) and

110.11(a)(5).1

Court Cases

(continued from page 7)
October 2002 Federal Election Commission RECORD

9

Advisory Opinion Request

AOR 2002-12

Disaffiliation of SSFs of health

insurance companies (American

Medical Security, Inc., September 9,

2002)✦

Alternative

Dispute

Resolution

ADR Program Update

The Commission recently

resolved two additional cases under

the Alternative Dispute Resolution

(ADR) program. The respondents, the

alleged violations of the Federal

Election Campaign Act (the Act) and

the penalties assessed are listed below.

1. The Commission dismissed the

matter concerning the Idaho

Christian Coalition after the

ADR office determined that the

allegations of the complaint,

regarding prohibited corporate

and in-kind contributions, were

unsubstantiated. (ADR 030;

MUR 5070)

2. The Commission reached

agreement with Engle for

Congress, its treasurer, Debby

Linhardt, and Michael Feinstein

concerning excessive contributions. Engle for Congress and its

treasurer acknowledged that an

inadvertent software error

resulted in their violation of the

Act, but that they refunded the

excessive contribution upon

discovering it. The committee

and its treasurer agreed to pay a

$1,000 civil penalty and to attend

an FEC-sponsored seminar for

candidate committees. Mr.

Feinstein acknowledged that he

had unintentionally made the

excessive contribution and agreed

to pay a $500 civil penalty. (ADR

060; MUR 5214)✦

—Amy Kort

Nonfilers

The campaign committees of the

candidates listed below failed to file

required campaign finance reports.

The Federal Election Campaign Act

requires the Commission to publish

the names of principal campaign

committees if they fail to file 12 day

Compliance

Candidate Office Sought Report Not Filed

Christian-Christensen, Donna M. House, VI Pre-Primary

Farrin, James House NY/08 Pre-Primary 1

Fisher, Ada M. Senate NC Pre-Primary 1

Gonzaga, Luiz House MA/10 Pre-Primary

Goss, Porter J. House FL/14 Pre-Primary 2

Lawrence, Robert I. House WA/06 Pre-Primary

O’Grady, Marilyn F. House NY/04 Pre-Primary 2

Parke, Gregory T. House VT/01 Pre-Primary

Pina, Albert R. House AZ/07 Pre-Primary

Skorski, Alan House NY/04 Pre-Primary

Thomas, Deborah House AZ/06 Pre-Primary

Xuna, John (AKA Juan) House FL/22 Pre-Primary

1 This candidate’s committee filed a Pre-Primary report with insufficient coverage

dates.

2 This candidate’s committee is required to file electronically, but instead filed a

paper copy of the report. Electronic filers who file on paper are considered

nonfilers.

pre-election reports or the quarterly

report due before the candidate’s

election. 2 U.S.C. §§437g(b) and

438 (a)(7). The agency may also

pursue enforcement actions against

nonfilers and late filers under the

Administrative Fine program on a

case-by-case basis.✦

—Amy Kort
Federal Election Commission RECORD October 2002

1 0

Congressional Campaign

Fundraising Declines in 2002

Election Cycle

Congressional campaigns raised

$604.6 million between January 1,

2001, and June 30, 2002, a decline

of seven percent from the record

levels reached in the 2000 campaign. During the first 18 months of

the campaign, 1,746 Senate and

House candidates spent $357.7

million, down 11 percent from the

same period in 1999-2000. Candidates also reported cash on hand of

$373.2 million, a four percent

increase from 1999-2000.

Contributions from individuals

totaled $353.1 million and continue

to be the largest source of receipts

for Congressional candidates,

representing 58.4 percent of all

fundraising as of June 30, 2002.

Contributions from PACs and other

committees represented 27.9 percent

of funds raised, and candidates

themselves contributed or loaned a

total of $54.6 million, representing

nine percent of Congressional

campaign receipts.

Senate Campaigns

The decline in financial activity

is confined to the Senate, where

candidates in this cycle’s 34 Senate

races reported receipts of $202.2

million, 22 percent lower than in

1999-2000 (see chart below). Senate

candidates made disbursements of

$109.8 million, 35 percent lower

than in the 2000 cycle.

Comparisons across election

cycles are particularly difficult for

Senate races, however. More smallpopulation states are holding Senate

elections this year, and a few

campaigns can significantly affect

totals. For example, as of June 30,

2000, there were three Senate

campaigns with receipts more than

two-times greater than those of the

largest 2002 campaign.

House Campaigns

Fundraising in House campaigns

increased slightly during the first 18

months of the 2002 cycle. House

campaigns raised $402.4 million, up

two percent from 2000 levels, and

spent $247.9 million, up six percent.

These increases are confined to

incumbent and open seat candidates

from both parties—the financial

activity of challengers is lower than

in the 2000 cycle.

Additional Information

The chart below shows the 18-

month Senate and House receipts

dating back to the 1992 election

cycle. A press release dated September 9, 2002, provides detailed

information about Congressional

fundraising and spending, including

rankings of Senate and House

campaigns for receipts, disbursements, cash-on-hand, debts and

major sources of receipts. The press

release is available:

• On the FEC web site at

www.fec.gov/news.html;

• From the Public Records office

(800/424-9530, press 3) and the

Press Office (800/424-9530, press

5); and

• By fax (call the FEC Faxline at

202/501-3413 and request document 616).✦

—Amy Kort

Statistics

0

150

300

450

'92 '94 '96 '98 '00 '02 0

500

1000

1500

2000

Millions of Dollars Candidates

0

150

300

450

'92 '94 '96 '98 '00 '02 0

500

1000

1500

2000

Millions of Dollars Candidates

Level of Activity

Number of Candidates

Senate Candidate Receipts House Candidate Receipts

18-Month Receipts of Congressional Candidates—1992-2002
October 2002 Federal Election Commission RECORD

1 1

The first number in each citation

refers to the “number” (month) of

the 2002 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 2001-15,

3:9; 2001-20, 3:9

2001-13: National committee status

of party committee, 1:11

2001-16: Extension of 70-day

window for transferring funds for

allocable expenses after suspension of party fundraising due to

national emergency, 2:1

2001-17: Reporting contributions

made via single check split

between federal and nonfederal

accounts, 3:5

2001-18: Affiliation between LLC

PAC and PACs of corporate

owners in 60-40 joint venture, 3:7

2001-19: Non-preemption of state

law prohibiting political

committee’s bingo license, 3:8

2002-1: Coalition of minor parties

supporting candidate(s) who

together gain five percent of vote

not eligible for Presidential public

funding, 4:3

2002-2: Preemption of state law

barring lobbyist from fundraising

for Congressional candidate who

is member of Maryland General

Assembly, 4:4

2002-3: State committee status, 6:6

2002-4: Name and Abbreviation of

SSF, 6:7

2002-6: State committee status, 7:4

2002-8: Return of federal funds

from nonfederal account to

federal account, 9:13

2002-9: Disclaimer exception

applied to political ads sent via

short messaging service, 10:8

2002-10: State committee status,

9:14

Compliance

Administrative Fine program

extended, 1:13

Cases resolved under Alternative

Dispute Resolution program, 7:6;

9:16. 10:9

Committees fined under Administrative Fine program, 1:13; 2:7;

3:11; 5:5, 6:10; 8:6; 9:18

MUR 5041: Contribution in the

name of another made by corporation, 8:5

Nonfilers, 6:5; 7:7; 10:9

Court Cases

_____ v. FEC

– AFL-CIO, 2:3; 3:5

– Alliance for Democracy, 5:3

– Baker, 4:3

– Beaumont, 3:4

– Common Cause and Democracy

21, 2:4

– Echols, 5:3; 6:4

– Friends for Houghton, 9:15

– Graham, 7:5

– Judicial Watch, Inc., and Peter F.

Paul, 3:3

– McConnell, 5:3; 6:4

– Miles for Senate, 3:1

– NRA, 5:3

– Schaefer, 9:16

– Stevens, 10:7

– Wertheimer, 1:12

FEC v. _____

– Democratic Party of New Mexico,

7:5

– Freedom’s Heritage Forum, 8:2

– Specter ’96, 5:3

– Triad Management Services, 8:4

Regulations

Administrative fines, Notice of

Proposed Rulemaking, 6:2

Allocation of candidate travel

expenses, interpretation, 3:2

Brokerage loans and lines of credit,

final rules, 7:2

Candidate debates, petition for

rulemaking, 6:4

Civil penalties, no increase, 3:2

Contribution and expenditure

definitions, Notice of Proposed

Rulemaking, 7:3; final rules, 9:9

Contribution limitations and prohibitions, Notice of Proposed

Rulemaking, 9:11

Coordinated and independent

expenditures, Notice of Proposed

Rulemaking, 10:4

Disclaimers, fraudulent solicitation,

civil penalties and personal use of

campaign funds, Notice of

Proposed Rulemaking, 10:1

“Electioneering Communications,”

Notice of Proposed Rulemaking,

9:10

Independent expenditure reporting,

final rules, 5:2; effective date, 7:1

Soft money rules, Notice of Proposed Rulemaking, 6:1; final

rules, 9:1

Use of Internet, public hearing, 3:1

Reports

Alaska and Iowa certified for state

filing waiver, 7:1

April reporting reminder, 4:1

Independent expenditure reporting,

new forms, 6:9; effective date 7:1

Iowa convention reporting, 7:4

IRS filing requirements, 1:11; 6:8

Louisiana primary, 8:1

North Carolina primary, 8:2

October reporting reminder, 10:1

Reports due in 2002, 1:2

Virginia convention reporting, 5:6

48-hour notice periods for 2002

primaries, 3:10

Index

Public Appearances

October 1, 2002

COGEL

Ottawa, Canada

Chairman Mason

Commissioner Thomas

October 30, 2002

The Federalist Society,

University of Richmond School

of Law

Richmond, VA

Commissioner Smith
FEDERAL ELECTION COMMISSION

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Federal Election Commission RECORD October 2002