July 2001 Federal Election Commission Volume 27, Number 7

Table of Contents

Reports

1 July Reporting Reminder

4 Florida Special Election

6 Massachusetts Special Election

800 Line

1 Candidate Committee Termination

and Debt Settlement

4 Public Appearances

Audits

5 Audit of Democratic Party of

Illinois

6 Audit of California State

Republican Party

Court Cases

7 Marilyn Kieffer v. FEC

8 FEC v. James Toledano

8 Advisory Opinions

Administrative Fines

8 Committees Fined for Nonfiled

and Late Reports

Compliance

9 Nonfiler

Alternative Dispute Resolution

9 ADR Program Update

Statistics

9 Increased Financial Activity

10 Index

Reports 800 Line

July Reporting Reminder

Committees filing semi-annually

with the Commission this year have

a report due on July 31. This report

covers financial activity from

January 1 (or the day after the

closing date of the last report)

through June 30.

Presidential committees filing on

a quarterly basis have a report due

to the Commission on July 15. This

report covers financial activity from

April 1 through June 30.

Monthly filers have a report due

on July 20. This report covers

financial activity for the month of

June.

Special Notice to Congressional

Candidate Committees

In 2001, all principal campaign

committees of congressional

candidates1

 file on a semi-annual

schedule. Committees must file a

mid-year report by the July 31,

1

 An individual becomes a candidate for

the purposes of the Act when his or her

campaign exceeds $5,000 in either

contributions or expenditures. Once

the campaign exceeds this threshold, it

must register and report with the

Commission. If the campaign has not

crossed the $5,000 threshold, it is not

required to file reports.

(continued on page 4)

Candidate Committee

Termination and Debt

Settlement

Once a principal campaign

committee of a candidate registers

with the Federal Election Commission (the Commission), that committee must continue to file regular

reports until it is officially terminated by the Commission. To be

officially terminated, a campaign

committee must file a termination

report and receive written notice

from the Commission that the

termination report has been accepted.

If a candidate drops out of an

election but does not file a termination report that is accepted by the

Commission, that candidate’s

principal campaign committee must

continue to file reports on its

original reporting schedule for that

election cycle. For example, campaigns that raise or spend more than

$5,000 for the 2002 election cycle

(and thus trigger registration and

reporting requirements) must file

quarterly reports beginning in 2002,

even if the candidate drops out of

the race before the primary election,

loses the primary or drops out of the

race before the general election.

(continued on page 2)
Federal Election Commission RECORD July 2001

2

Eligibility for Termination

An authorized committee may

terminate its registration and

reporting obligations by filing a

termination report, provided that:

• It has ceased raising and spending

funds (11 CFR 102.3(a)(1));

• It has extinguished all debts and, if

the committee is a principal

campaign committee, the debts of

any other committees authorized

by the candidate for the election

cycle have also been extinguished

(11 CFR 102.3(a)(1)(b));

• It does not have any funds or

assets available to pay debts owed

by another committee authorized

by the same candidate, regardless

of the election cycle (11 CFR

116.2(c)(1)(ii)); and

• It is not involved in an ongoing

FEC enforcement matter, audit or

court case.

Termination Report

If a committee is eligible to

terminate, it may file a termination

report at any time.

When filing a termination report,

the treasurer should check the

“Termination Report” box on the

Form 3 Summary Page (Line 4).

The termination report for an

authorized committee must include:

• The disclosure of all receipts and

disbursements not previously

reported;

• A statement explaining how any

excess campaign funds will be

used and, if applicable, whether

the funds will be used for the

individual’s duties as a federal

officeholder; and

• An assurance that assets will not

be converted to personal use. 11

CFR 102.3(a).

Even after filing a termination

report, the committee must continue

to file regularly-scheduled reports

until it receives written notice from

the Commission that the termination

report has been accepted.

Termination of Committees With

Debts

A terminating committee—that

is, a committee that raises contributions and makes expenditures only

for the purpose of paying debts and

winding-down expenses—can

eliminate its debts in one of two

ways: It may assign its debts to

another committee of the same

candidate, or it may settle them for

less than the amount owed. 11 CFR

116.1(a), 116.2(a) and 116.2(c)(3).

These procedures are explained

below.

Assigning Debts to Another

Committee

To expedite termination, an

authorized committee that qualifies

as a terminating committee and has

no cash on hand or assets available

to pay its debts may assign them to

another authorized committee of the

same candidate,1

 provided that:

• The assignment is permitted under

applicable state laws (e.g., laws on

debts and creditors);

• The committee assigning the debts

was organized for an election

already held;

• No later than 30 days before the

assignment takes place, the

assigning committee notifies each

creditor in writing of the name and

address of the committee assuming

the debt; and

• The committee assuming the debts

notifies the Commission in writing

that it has assumed the obligation

to pay and report the debts. (The

committee uses separate schedules

to report the debts and the contributions raised to retire them).

Once the debts are assigned, the

assigning committee may file a

termination report. 11 CFR

116.2(c)(3).

Settling Debts

An authorized committee may

extinguish its debts by settling them

for less than the amount owed if:

• The committee qualifies as a

terminating committee;

• The candidate does not have

another authorized committee with

enough funds to pay all or part of

the debts; and

• The committee files a debt settlement plan (see below), which is

subject to Commission review, and

complies with the other rules

governing debt settlement. 11

CFR 116.1(a), 116.2(c)(1) and

116.7.

Note that a committee may not

terminate and must continue to file

its reports until the debt settlement

process is concluded.

1

 Special rules apply to Presidential

candidate committees receiving public

funds. See 11 CFR 116.2(c)(3).

800 Line

(continued from page 1)

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

Lois G. Lerner, Acting General

 Counsel

Published by the Information

 Division

Louise D. Wides, Director

Amy Kort, Editor

Phillip Deen, Associate Editor

http://www.fec.gov
July 2001 Federal Election Commission RECORD

3

Debts Subject to Settlement

The following debts may be

settled for less than the amount

owed in accordance with debt

settlement procedures:

• Debts owed to commercial vendors;2

• Salary owed to employees;

• Debts arising from advances by

individuals (e.g., campaign staff

using personal funds or credit

cards to pay campaign expenses);

and

• Loans owed to political committees or individuals—including the

candidate.

All such settlements must be

made in the ordinary course of

business. The Commission will

review them to ensure that they are

not in violation of the Federal

Election Campaign Act (the Act) or

Commission regulations. 11 CFR

116.2(a).

Debts Owed to Commercial

Vendors. A commercial vendor

(incorporated or unincorporated)

may settle a debt for less than the

amount owed provided that:

• Credit was initially extended in the

ordinary course of business (see 11

CFR 116.3);

• The committee undertook all

reasonable efforts to pay the debt,

such as raising funds, reducing

overhead and liquidating assets;

and

• The vendor pursued remedies to

collect the debt as vigorously as

those pursued to collect debts from

nonpolitical debtors in similar

circumstances. Remedies might

include, for example, late fee

charges, referral to a collection

agency or litigation. 11 CFR

116.4(d). The creditor is not,

however, required to pursue

activities that are unlikely to result

in the reduction of the debt.

Salary Owed to Staff. Unpaid

salary owed to a committee employee may be settled for less than

the amount owed or entirely forgiven, or alternatively it may be

converted to volunteer work if the

employee signs a statement agreeing

to the arrangement. 11 CFR 116.6.

Other Amounts Owed to Staff and

Other Individuals. When a committee owes money to staff or other

individuals who have used personal

funds to pay expenses on the

committee’s behalf, these debts may

be settled for less than the amount

owed or entirely forgiven. 11 CFR

116.5(d).

Loans from Individuals and

Political Committees. Loans (except

bank loans—see below) may also be

settled for less than the amount

owed or entirely forgiven. 11 CFR

100.7(a)(1).

Creditor’s Rights

A commercial vendor or other

creditor—including a committee

employee—is not required to settle

or forgive debts owed by a committee. 11 CFR 116.4(e), 116.5(d) and

116.6(b).

Debts Not Subject to Settlement

Two categories of debts may not

be settled for less than the amount

owed but must be disclosed in a

debt settlement plan:

• Bank loans (including lines of

credit);3

 and

• Repayment obligations of publicly-funded campaigns. 11 CFR

116.7(c).

Debt Settlement Plans

Debt settlement plans are filed on

FEC Form 8. The Commission

recommends that committees

include as many settlement agreements as possible in one plan. 11

CFR 116.7(a). A committee,

however, must postpone making

actual payments to creditors until

after the Commission has reviewed

the debt settlement plan. Moreover,

the committee must continue to

report its debt until the Commission

has completed its review. 11 CFR

116.7 (a) and (d).

Once the Commission has

reviewed the debt settlement plans,

the committee may pay the creditors

the agreed-upon amounts and then

file a termination report.

Bankruptcy

If a candidate or committee is

released from debts through a

bankruptcy court decree pursuant to

11 U.S.C. Chapter 7, the committee

must include in a debt settlement

plan the court order and a list of the

obligation from which the committee is released. 11 CFR 116.7 (g).

Disputed Debts

A disputed debt is a disagreement

between a creditor and a committee

about the existence of a debt or the

amount owed. If something of

value was provided, the committee

must report the following information on Schedule D until the dispute

is resolved:

• The amount the committee admits

is owed;

• The amount the creditor claims is

owed; and

• Any amounts the committee has

paid the creditor.

The committee may note in its

report that disclosure of the disputed

debt is not an admission of liability

or a waiver of its claim against the

creditor.

Note that, in a debt settlement

plan, a terminating committee must

describe any disputed debts and the

committee’s efforts to resolve them.

11 CFR 116.10.

2

 A commercial vendor is a business or

an individual who provides goods or

services to a candidate or political

committee and whose usual business is

the provision of those goods or services. 11 CFR 116.1(c).

3

 Under extraordinary circumstances,

such as the death or bankruptcy of the

candidate, settlement of a bank loan

may be appropriate. The Commission

will consider specific situations on a

case-by-case basis. (continued on page 4)
Federal Election Commission RECORD July 2001

4

Unpayable Debts

If a committee has an outstanding

debt that is at least two years old

and that cannot be paid because the

creditor has gone out of business or

cannot be located, the committee

may request a determination from

the Commission that the debt is

unpayable. See 11 CFR 116.9.

Administrative Termination

An authorized committee that is

inactive and wishes to terminate but

cannot reach settlement agreements

with its creditors may ask the

Commission for administrative

termination. See 11 CFR 102.4 for

further details.

If you have any questions, call

the Information Division at 800/

424-9530 (press 1, then 3) or 202/

694-1100.✦

800 Line

(continued from page 3)

Reports

(continued from page 1)

2001, filing date and a year-end

report by the January 31, 2002,

filing date.

Campaigns that raise or spend

more than $5,000 for the 2002

election cycle (thus triggering

registration and reporting requirements) must file quarterly reports

beginning in 2002, even if the

candidate withdraws from the race

prior to the primary election, loses

the primary or drops out of the race

prior to the general election. Committees must continue to file reports

until they file a termination report

2

 The Commission has certified that the

following states and territories qualify

for filing waivers: Alabama, American

Samoa, Arizona, Arkansas, California,

Colorado, Connecticut, Delaware,

Florida, Georgia, Hawaii, Idaho,

Illinois, Indiana, Kansas, Kentucky,

Louisiana, Maine, Maryland, Michigan,

Minnesota, Mississippi, Missouri,

Nebraska, Nevada, New Hampshire,

New Jersey, New Mexico, New York,

North Carolina, North Dakota, Ohio,

Oklahoma, Oregon, Pennsylvania,

Rhode Island, South Carolina, South

Dakota, Tennessee, Texas, Utah,

Vermont, Virginia, Virgin Islands,

Washington, West Virginia, Wisconsin

and Wyoming. Committees that file

their reports at the FEC need not file

copies in these states.

Florida Special Election

Reporting

The Special Election to fill the

U.S. House seat being vacated by

Congressman Joe Scarborough in

Florida’s First Congressional district

will be held on October 16, 2001.

The Special Primary will be on July

24 and the Special Runoff, if

needed, will be September 4.

Committees involved in any of these

elections should consult the accomand the Commission notifies them

in writing that their termination

report has been accepted. See

related article on page 1.

Election Cycle Reporting

Beginning with the reporting

periods that start on or after January

1, 2001, authorized committees of

federal candidates must aggregate

and report receipts and disbursements on an election-cycle basis.

For more information see the

November 2000 Record, page 2, or

call the FEC’s Information Division

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

202/694-1100.

Electronic Filing

Political committees that receive

contributions or make expenditures

in excess of $50,000 in a calendar

year, or that expect to do so, must

submit their reports electronically.

A committee required to file

electronically that files instead on

FEC paper reporting forms will

be considered a nonfiler. For

additional information on electronic

filing, see the January 2001 Record,

page 7, or call the FEC’s Electronic

Filing Office at 800/424-9530 or

202/694-1307.

Receipt of Reports

Reports sent by registered or

certified mail must be postmarked

by the filing date.

Reports sent by other means must

be received by federal and state

filing offices by the filing date.2

Other means of delivering reports

could include standard mail delivery, Express Mail service or shipping through one of the

nongovernment services, such as

Federal Express.

Electronically-filed reports must

be received by federal and state

filing offices by midnight, eastern

time, on the filing date. Electronic

filers will receive e-mail or fax

confirmation that their report has

been received by the Commission.

Electronic filers should note that

they must still send a copy of their

reports to applicable state election

offices in states that do not qualify

for the state filing waiver.2

Filing Schedules

For a complete list of the 2001

reporting dates:

• See the January 2001 Record, p. 4;

• Log on to http://www.fec.gov and

click on the “Candidate and

Committee Guide” icon;

• Request a copy from FEC Faxline

by calling 202/501-3413 (request

document 586); or

• Call 800/424-9530 (press 1, then

3) and ask that the 2001 reporting

schedule handout be mailed to

you.✦

Public Appearances

July 12, 2001

American Bankers Association

Washington, DC

Dorothy Yeager
July 2001 Federal Election Commission RECORD

5

(continued on page 6)

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.

Florida Special Election Reporting

For Committees Involved Only in the Special Primary Election:

Close of Reg./Cert. Filing

Books Mail Date Date

Pre-Primary and

Mid-Year Report1 July 4 July 9 July 12

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 and

Mid-Year Report1 July 4 July 9 July 12

Pre-General Report September 26 October 1 October 4

Post-General Report November 5 November 15 November 15

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

For Committees Involved in Only the Special Primary and

Special Runoff:

Close of Reg./Cert. Filing

Books Mail Date Date

Pre-Primary and

Mid-Year Report1 July 4 July 9 July 12

Pre-Runoff Report August 15 August 20 August 23

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 and

Mid-Year Report1 July 4 July 9 July 12

Pre-Runoff Report August 15 August 20 August 23

Pre-General Report September 26 October 1 October 4

Post-General Report November 5 November 15 November 15

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

1Committees should file a consolidated Pre-Primary and Mid-Year Report

by the filing date of the Pre-Primary Report, as listed above.

panying chart for filing information.1

Note that 48-hour notices are

required of authorized committees

that receive contributions of $1,000

or more between July 5 and July 21

for the special primary, between

September 27 and October 13 for

the Special General Election and

between August 16 and September 1

for the Special Runoff, if needed.

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.✦

Audits

Audit of Democratic Party of

Illinois

On May 18, 2001, the Commission approved the final audit report

on the Democratic Party of Illinois

(DPI). The report found that the DPI

received apparent corporate contributions, inaccurately disclosed

campaign expenditures and deposited nonfederal funds into a federal

account.

Corporate Contributions

Under the Federal Election

Campaign Act, any corporate

contribution or expenditure in

connection with any federal election

is prohibited. 2 U.S.C. §441b(a).
Federal Election Commission RECORD July 2001

6

Audit of California State

Republican Party

On May 24, 2001, the Commission approved the final audit report

on the California State Republican

Party. The report found that, during

the 1998 election cycle, the party

made excessive coordinated party

expenditures on behalf of the Matt

Fong for Senate Committee and

Bordonaro for Congress.

1Reports filed electronically must be submitted by midnight on the filing

date. A committee required to file electronically that instead files 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.

Massachusetts Special Election Reporting

 The Special Election to fill the U.S. House seat of the late Congressman

Joseph Moakley in the Ninth Congressional District will be held on October

16, 2001. The parties will nominate candidates for that election in Special

Primary Elections on September 11, 2001. Note that 48-hour notices are

required of authorized committees that receive contributions of $1,000 or

more between August 23 and September 8 for the Special Primary Election

and between September 27 and October 13 for the Special General Election.

Committees (including PACs) involved in any of these elections must follow

the appropriate reporting schedule below.1

For Committees Involved Only in the Special Primary Election:

Close of Reg./Cert. Filing

Books Mail Date Date

Pre-Primary Report August 22 August 27 August 30

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

For Committees Involved in Both the Special Primary Election and the Special General:

Close of Reg./Cert. Filing

Books Mail Date Date

Pre-Primary Report August 22 August 27 August 30

Pre-General Report September 26 October 1 October 4

Post-General Report November 5 November 15 November 15

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

The DPI received $38,800 from 22

incorporated entities. The contributions were drawn from the accounts

of incorporated law firms and from

individuals’ corporate accounts. The

DPI argued that the contributions

were distributed among the partners

and that contributors who used

corporate checks were advised to

donate only money that was from

their personal funds.

However, it could not be established that the contributions did not

in fact come from corporate accounts. In response, the DPI refunded all but $400 to the

contributors. The $400, which could

not be refunded, was given to the

U.S. Treasury.

Inaccurate Disclosure of

Expenditures

The DPI incorrectly reported

disbursements for get-out-the-vote

(GOTV) drives. These disbursements were incorrectly itemized on

Schedule B instead of Schedule H-4,

which committees use to disclose

the allocation of disbursements

between federal and nonfederal

accounts. 11 CFR 106.5(a)(2)(i) and

(iv). The date and amount of

withdrawals for the GOTV activities

were also misreported. Upon

request, the committee submitted

the amended forms, correcting the

disclosure.

Deposit of Nonfederal Funds into

a Federal Account

The DPI deposited a total of

$15,557 into its federal accounts to

offset operating expenditures. The

committee did not then reimburse its

nonfederal accounts for their share

of the offsets, as required by 11

CFR 106.5(g)(1)(i) and (2)(B), thus

retaining impermissible nonfederal

funds in a federal account. Upon

request, the DPI reimbursed the

nonfederal account $11,196, for the

nonfederal share of the offsets, and

amended the appropriate reporting

forms.✦

Background

Under 2 U.S.C. §441a(d), state

and national party committees may

make coordinated party expenditures on behalf of their general

election nominees. These expenditures do not count against contribution limits, but have their own

limits, dependent upon the office

sought. In the case of Senate and

House nominees, the state party has

Audits

(continued from page 5)
July 2001 Federal Election Commission RECORD

7

tee. Therefore, the CRP had not

exceeded their overall coordinated

party expenditure limits.

The CRP could not provide proof

of prior written authorization. They

did, however, provide affidavits

from Michael Schroeder, the former

chairman of the CRP, and Mitch

Bainwol, the former Executive

Director of the RNC, which asserted

that the RNC had provided prior

authorization. Also, the RNC argued

that their Party Rule 34(f) prevented

them from directly supporting Matt

Fong, resulting in a transfer of

spending authority to the CRP.

The Commission did not accept

either of these explanations. First,

proof of written authorization was

never established. Second, circumvention of the RNC’s party rule

through such a transfer would seem

to undermine the intent of the rule.

Third, the CRP’s original disclosure

forms did not indicate a need for

additional spending authority,

because their own coordinated party

expenditure limits did not seem to

have been exceeded.

The CRP has filed amended

reports correctly itemizing all

coordinated party expenditures for

the two candidates. Also, as recommended, the CRP reimbursed their

nonfederal account $111,961 for

over-funding of federal activity.2

The Commission also recommended that the CRP seek refunds

from the Fong and Bordonaro

committees.

Misstatement of Financial Activity. In large part because the CRP’s

disbursements were understated by

$1,740,744, the party’s cash on hand

was overstated by $1,742,757. The

CRP has filed a comprehensive

report that materially corrects the

original reports.3

Reporting Errors. The CRP

incorrectly reported contributions

from individuals, identifying the

wrong account holder on joint and

single accounts. Such errors were

attributed to inadequate computer

software. The CRP asserts that they

have revised their donor receipt

procedures.

Additionally, the CRP did not file

debt schedules for the period of July

1, 1998, through December 31,

1998. Amended schedules were

submitted, which corrected any

discrepancy.

The CRP also did not properly

itemize 88 refunds totalling

$33,080. Upon recommendation, the

refunds were itemized on amended

schedules.

The CRP received a loan in the

amount of $300,000, which they

repaid with interest. However, the

committee did not properly itemize

the receipt of the loan. To correct this

reporting error, they later submitted an

updated Schedule C-1.✦

1

 See Campaign Guide for Political

Party Committees p. 16. It is the

responsibility of the assigning agent to

monitor and disclose coordinated party

expenditures made by designated

agents. See Campaign Guide for

Political Party Committees p. 41.

2

 The CRP has argued that this finding

should be deferred until after the

Supreme Court rules on the constitutionality of coordinated party expenditure limits in FEC v. Colorado Republican Federal Campaign Committee.

3

 Before becoming aware of the

Commission’s audit, the CRP had

begun amending their reports to

account for the additional disbursements.

(continued on page 8)

its own spending limits, which are

separate from those of the national

party.

Under commission regulations,

one committee may assign all or

part of its coordinated party expenditure authority to another party

committee. 11 CFR 110.7(a)(4) and

11 CFR 110.7(c). To do so, however, the assigning agent must first,

in a written agreement, authorize

the spending and specify the

amount that the designated agent

may spend.1

Audit Findings

Coordinated Party Expenditures.

The audit found that the California

State Republican Party (CRP)

exceeded the coordinated party

expenditure limit in the amount of

$845,554 for the Matt Fong for

Senate Committee and $2,663 for

Bordonaro for Congress. These

expenditures expressly advocated

the election of a candidate and were

made in coordination with the

campaigns. Therefore, they could

not be considered independent

expenditures.

Moreover, the CRP misreported

coordinated party expenditures by

reporting some disbursements as

operating expenditures and failing

to report other disbursements in any

of the committee’s pre-audit

disbursement totals. Additionally, a

portion of the funds spent on behalf

of the Fong and Bordonaro committees came from the CRP’s

nonfederal account and were never

reported on the committee’s FEC

disclosure reports.

The CRP claimed that the

Republican National Committee

(RNC) had transferred spending

authority to the state party commitCourt Cases

Marilyn Kieffer v. FEC

On April 23, 2001, plaintiffs filed

a complaint in the U.S. District

Court for the Central District of

Illinois. The complaint appeals a

civil money penalty the Commission

imposed on Bayne for Congress (the

Committee) and Ms. Kieffer, as

treasurer, for failure to file the

Committee’s 2000 October Quarterly Report. The Committee

attempted to file a termination

report in June of 2000.
Federal Election Commission RECORD July 2001

8

Administrative

Fines

Committees Fined for

Nonfiled and Late Reports

On June 1 and June 7 , 2001, the

Federal Election Commission

publicized its final action on 39 new

Administrative Fine cases, bringing

the total number of cases to 103.

Most of the committees listed below

failed to file or filed late election

sensitive reports. Under the Administrative Fine program, late and

nonfiled election sensitive reports,

which include reports and notices

filed prior to an election (i.e., 12 day

pre-primary, October quarterly and

October monthly reports), incur

higher civil money penalties.

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.

1

 The following committees and their

treasurers were assessed civil money

penalties under the Administrative Fine

regulations:

American Academy of Emergency

Medicine PAC ($525), American Meat

Institute PAC ($1,275 ), Bill Bradley

for President Inc. ($3,050), California

Voter Guide ($1,000), Cincinnati Bell

Inc. FED PAC ($425), Citizens for the

Republic ($1,350), Clarke 2000

($3,000), Committee on Arrangements

for the 2000 Republican National

Convention ($6,500), Committee to

Elect Tony Fusco to Congress

($2,025), Committee to Elect Kevin

McKeigue for US Senate ($1,800),

E*Trade Group Inc., PAC ($1,725),

Eva Clayton Committee for Congress

($4,000), Democratic Foundation of

the Desert ($750), Friends of Mark

Brewer Committee (penalty reduced to

$0 due to lack of activity on report),

Hergert for US Senate ($900),

Hutchins for Congress ($1,125),

International Association of Holiday

Inns Inc., PAC ($400), International

Council of Cruise Lines PAC ($2,000),

Janezich for US Senate Committee

($1,725), Jeff Wright for Congress

Exploratory Committee (penalty

reduced to $0 due to lack of activity on

report), Judy Smith for Congress

($900), Law Enforcement Alliance of

America Inc., Fund for Responsible

Government ($2,000), Lee Steers for

Congress/2000 ($525), Libertarian

Party of Illinois ($3,000), Local Union

Drive No. 25 ($600), Macomb County

Democratic Committee ($1,125),

Marriott International Inc. PAC

($2,150), Meeks for Congress 2000

($750), PECO Energy Company PAC

($2,000), Pegram for Congress ($475),

Peter Abair for Congress Committee

($900), Plumbers Local Union No. 1

NYC PAC ($1,775), TACO PAC

($3,000), Tom Foley for US Senate

($375), Troutt for Congress ($425),

Troutt for Congress ($275), Viacom

International Inc., PAC ($800), West

Virginia Republican State Executive

Committee ($1,050), Wisconsin Right

to Life PAC ($850).

FEC v. James Toledano

On May 3, 2001, the U.S. District

Court for the Central District of

California granted the

Commission’s request for summary

judgment, ruling that James

Toledano violated 2 U.S.C.

§432(b)(2) of the Federal Election

Campaign Act. This provision

requires persons who receive

contributions for a political committee in excess of $50 to forward these

contributions to the committee’s

treasurer within 10 days after

receiving them.

In 1996, Mr. Toledano, then chair

of the Orange County Democratic

Central Committee, failed to present

$10,000 in contributions to the

party’s treasurer. Instead, he

deposited the funds into a separate

bank account and used them to

support a congressional candidate in

the 1996 primary election, all

without the treasurer’s knowledge or

consent. The court imposed a

$7,500 civil penalty. See the June

2000 Record p. 9.

U.S. District Court for the

Central District of California, CV

00-6526-GAF.✦

Advisory

Opinions

Advisory Opinion Requests

AOR 2001-9

Use of excess campaign funds to

pay expenses resulting from media

inquiries concerning former Senator

and made after his term expired

(Kerrey for U.S. Senate Committee,

June 4, 2001)

AOR 2001-10

Employment of candidate’s spouse

by campaign committee (Jesse L.

Jackson, Jr. For Congress Campaign

Committee, June 11, 2001)✦

Court Cases

(continued from page 7)

In December 2000, the Commission found reason to believe that the

Committee and Ms. Kieffer had

violated 2 U.S.C. §434(a), which

requires the timely filing of reports

by political committees, by not

filing the Committee’s October

2000 Quarterly Report. The Commission assessed a civil money

penalty in the amount of $4,500 in

accordance with 11 CFR 111.43.

U.S. District Court for the

Central District of Illinois, 01-

4029.✦

The committees and their treasurers

are assessed civil money penalties

when the Commission makes its

final determination.1

 Unpaid civil
July 2001 Federal Election Commission RECORD

9

Compliance

Nonfiler

The Diane Watson for Congress

Committee failed to file electronically a pre-runoff report for the June

5, 2001, runoff election to select

candidates for California’s 32nd

congressional district. Instead, the

committee filed a paper report. The

Commission sent a Mandatory

Electronic Filing Notice on May 30,

2001, notifying the committee that

their paper filing was not valid and

that they must file their report

electronically.

Under the Mandatory Electronic

Filing regulation, any committee

that receives contributions or makes

expenditures in excess of $50,000 in

the current calendar year, or that

reasonably expects to do so, must

submit its reports electronically. If a

committee required to file electronically files a report on paper, the

Commission considers the report to be

nonfiled. 11 CFR 104.18 (a)(2). These

rules effect reporting periods beginning on or after January 1, 2001.

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 and

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.

For more information on the Administrative Fine program, see the

accompanying article on page 8.✦

Alternative

Dispute

Resolution

ADR Program Update

On May 3, 2001, the Commission

reached agreement, under the

Alternative Dispute Resolution

(ADR) program, with the Let’s Go

ForWard Hawaii Committee. The

Committee was levied an $800 civil

money penalty for excessive contributions and failure to file timely

disclosure reports. They also agreed

to work with the Reports Analysis

Division to correct incomplete

reports, file amendments to reports

and file for termination.

Closed ADR-negotiated settlement summaries are available from

the Public Records Office at 999 E

Street, NW., Washington, DC

20463. The Public Records Office

may also be contacted at 800/424-

9530 (press 3).✦

Statistics

money penalties are referred to the

Department of the Treasury for

collection.

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).✦

Increased Financial Activity

Financial activity by Congressional candidates, political parties

and political action committees

(PACs) increased sharply during the

recent 1999-2000 election cycle,

compared to the 1997-1998 cycle.

The Commission compiled the

following statistics based on political committees’ financial disclosure

reports covering the period between

January 1, 1999, and December 31,

2000.

Congressional Candidate

Committees

For the first time, Congressional

financial activity surpassed the $1

billion mark, totaling $1.047 billion

raised and $1.006 billion spent. This

rise marks an increase of 34 percent

in receipts and 36 percent in disbursements over the 1997-1998

election cycle. In the House, 2,083

candidates raised $610.4 million and

spent $572.3 million, an increase of

24 percent and 26 percent, respectively. In the Senate, 333 candidates

raised $437 million and spent

$434.7 million, up 52 percent and

51 percent.

As in past elections, candidates

competing for open seats spent more

than did challengers or incumbents.

Median spending by candidates of

both major parties increased over

that of the 1998 elections. See graph

on page 10.

Political Parties

Political party fundraising was

also up during the 1999-2000

election cycle. Republican

fundraising outpaced that of the

Democrats by $715.7 million to

$520.4 million. Republicans totaled

$465.8 million in federal receipts to

the Democrats’ $275.2 million. This

increase, however, marked only a 12

percent increase over the last

election cycle for the Republicans,

while the Democrats’ receipts

increased 24 percent. In nonfederal

funds, Republican national party

committees raised $249.9 million

while Democratic national party

committees raised $245.2 million,

an increase of 81 percent and 98

percent, respectively. Nonfederal

money comprised 47 percent of total

receipts for Democrats and 35

percent for Republicans.

PACs

PAC financial activity also

increased during the 2000 election

cycle. PACs raised $604.9 million

and spent $579.4 million, an increase of roughly 20 percent. PAC

contributions to federal candidates

totaled $259.8 million, up 17

percent. Republican congressional

candidates received $136.2 million

to Democrat’s $123.1 million, an

(continued on page 10)
Federal Election Commission RECORD July 2001

10

0.0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

1.0

1.1

1.2

Republicans Democrats

Index

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

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

increase of 17 percent and 19

percent, respectively. In addition,

PACs made $21 million in independent expenditures.

Additional Details

Additional details are available in

news releases dated May 15, 2001,

and May 31, 2001. The releases

include party fund transfers, summary data of parties by committee,

candidate and election cycle,

summary of PAC data by type of

PAC, total receipts and total contributions and summary of congressional data by House and Senate

candidates, type of receipt and type

of disbursement. The news releases

are available:

• On the FEC Web site at http//

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 documents 612 (Congressional), 613

(Party) and 614 (PAC)).✦

Statistics

(continued from page 9)

(continued on page 12)

0.0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

1.0

1.1

1.2

Republicans Democrats

Millions of dollars

Open Seats

Challengers

Incumbents

Median Spending by Congressional Candidates

2000 General Election 1998 General Election

Open Seats

Challengers

Incumbents

Millions of dollars
July 2001 Federal Election Commission RECORD

11

Order Form

Name:________________________________________________________

Name of Committee:____________________________________________

Address:____________________________________ City:______________

State:______ Zip Code:_______________

Publication Number of Copies

Commission Regulations at 11 CFR:

Federal Election Campaign Act:

Please fold this form into thirds, seal it and drop it in the mail.

Updated FECA and CFR Available

The 2001 editions of the Federal Election Campaign Act and FEC

regulations at 11 CFR are available. The Commission has mailed

copies of these publications to registered committees; however, due

to a mailing error, some committees may not have received their

copies.

If you are a registered committee that has not received the 2001

editions of the FECA and FEC Regulations—or if you would

simply like to receive a free copy of these publications—please fill

out the postage-paid order form below, fold it into thirds and drop it

into any mailbox. You may also order copies of these publications

by phone; call 800/424-9530 (press 1, then 3) or 202/694-1100.
FEDERAL ELECTION COMMISSION

999 E Street, NW

Washington, DC 20463

Official Business

Penalty for Private Use, $300

Presorted Standard

Postage and Fees Paid

Federal Election Commission

Permit Number G-31

Printed on recycled paper

Federal Election Commission RECORD July 2001

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

Compliance

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

6:5, 7:8

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

– Beaumont, 2:8, 3:2, 5:6, 6:9

– Buchanan, 1:10

– DNC, 2:8. 3:2

– Dole, 5:6

– 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. _____

– Friends for Fasi, 6:8

– Toledano, 7:8

Other

– Hooker v. All Campaign Contributors, 1:10

– Hooker v. Sundquist, 4:8

Regulations

Advanced Notice of Proposed

Rulemaking on definition of

“political committee,” 4:1

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

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

Virginia special election, 5:6

Index

(continued from page 10)