July 1999 Federal Election Commission Volume 25, Number 7

Table of Contents

Reports

1 July Reporting Reminder

Outreach

1 Partnership Conference

3 Monthly Roundtable Sessions

3 FEC Conference Schedule

Statistics

2 PAC Activity Increases

3 Public Appearances

Regulations

4 Matching Credit Card Contributions

5 Petition to Change Debate Rules

4 Federal Register

5 Advisory Opinions

Court Cases

8 Judicial Watch v. FEC

9 USA v. Hsia

10 New Litigation

Compliance

10 MUR 4632

Audits

10 Clinton, Dole ’96 Campaigns

Public Funding

11 Bauer, Quayle Eligible

Budget

11 Thomas, Wold Present Budget

Electronic Filing

12 Electronic Filing Survey

Information

12 Meeting Documents Via E-Mail

Publications

12 FEC Issues ’98 Annual Report

13 Results of 1998 Federal Elections

800 Line

13 $25,000 Annual Limit

14 Index

Reports

July Reporting Reminder

Several different types of reports

are required in July.

Committees filing semiannually

with the Commission this year have a

report due on July 31. The reports

cover 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. These

reports cover financial activity from

April 1 through June 30. Monthly

filers have a report due on July 20.

These reports cover financial activity

for the month of June.

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.

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 the filing date. Efilers will receive e-mail or fax

(continued on page 2)

July Conference for

Partnerships and LLCs

 The FEC has expanded the

scheduled partnership conference

by a half a day and will now

include information pertaining to

political activity by limited

liability companies (LLCs) that

are considered partnerships under

the U.S. tax code.

 The conference will be held

July 28-29 at the Westin Hotel

in Washington, DC. The

registration fee is $230 and the

registration deadline is July 15.

 The conference will be

presented by Commissioners

and FEC staff, who will explain

federal election rules governing

partnership PACs, partnership

support for PACs and federal

candidates, and individual

partner involvement in federal

elections. Upcoming changes to

FEC regulations concerning

LLCs will also be discussed. In

addition, the seminar will offer a

workshop on the FEC

enforcement process.

 To register, call Sylvester

Management at 800/246-7277 or

send an e-mail to

tsylvester@worldnet.att.net. For

program information, call the

FEC’s Information Division at

800/424-9530 or 202/694-1100.
Federal Election Commission RECORD July 1999

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)

800/877-8339 (FIRS)

Scott E. Thomas, Chairman

Darryl R. Wold, Vice Chairman

Lee Ann Elliott, Commissioner

David M. Mason, Commissioner

Danny L. McDonald,

 Commissioner

Karl J. Sandstrom, Commissioner

James A. Pehrkon, Staff Director

Lawrence M. Noble, General

 Counsel

Published by the Information

 Division

Louise D. Wides, Director

Angela Rucker, Editor

http://www.fec.gov

Reports

(continued from page 1)

confirmation that their report has

been received by the Commission.

E-filers should note that they must

still send a copy of their reports to

applicable state election offices by

the filing deadline.

Filing Schedules

To view a copy of the 1999

reporting dates:

• See the January 1999 Record, p. 4;

• Log on to http://www.fec.gov and

click on “Help for Candidates,

Parties and PACs”;

• Request a copy from FEC Faxline

by calling 202/501-3413 (request

document 586); or

• Call 800/424-9530 and ask that the

1999 reporting schedule handout

be mailed to you. ✦

Statistics

PAC Activity Increases

During the 1997-98 election cycle,

political action committees (PACs)

raised $502.6 million, a 15 percent

increase over their 1995-96 statistics.

PACs spent $470.8 million during

the most recent election cycle,

posting a 10 percent increase over

1995-96. PACs ended 1998 with

$138 million in cash on hand.

Just under half of total PAC

spending—about $219.9 million—

went to federal candidates, and all

but $13.1 million of that total was

for candidates running in 1997-98.

The remainder, or about $13.1

million, was contributed to candidates running for office in the future

or for debt retirement.

As in previous elections, the bulk

of PAC contributions went to

incumbents, while contributions to

$0

$50

$100

$150

$200

Incumbents Challengers Open Seats

1992 1994 1996 1998

Millions

Distribution of PAC Contributions for ’92—’98

Election Cycles

challengers and open-seat candidates trailed behind. Republicans

also edged out Democrats for the

most PAC contributions. Republican

candidates received $108 million

from PACs, while Democrats

reported $98.3 million from PACs.

In addition, PACs made $9.3

million in independent expenditures.

This article and the accompanying graph are based on data taken

from a June 8 news release. The

release covers the full cycle from

January 1, 1997, through December

31, 1998, and includes a number of

statistical tables and “Top 50” lists

for PACs. It is available at the

following places:

• FEC Web site (http://

www.fec.gov; select “News

Releases and Media Advisories”);

• FEC Public Records and Press

offices (800/424-9530); and

• FEC Faxline (202/501-3413,

document 611). ✦
July 1999 Federal Election Commission RECORD

3

Partnership and Limited

Liability Company (LLC)

Conference

Date: July 28-29, 1999

Location: Washington, DC

(Westin Hotel)

Registration: $230

Regional Conference (includes

candidate, corporate/labor and

party workshops)

Date: September 27-29, 1999

Location: Chicago, IL

(Fairmont Hotel)

Registration: $265

Regional Conference (includes

candidate, corporate/labor and

party workshops)

Date: November 15-17, 1999

Location: San Francisco

(Grand Hyatt)

Registration: To be determined

FEC Conference Schedule

 The FEC is sponsoring a series of conferences on campaign finance. See

below for details. To register for any conference, call Sylvester Management

at 800/246-7277 or send an e-mail to tsylvester@worldnet.att.net. For program

information, call the FEC’s Information Division at 800/424-9530 or 202/694-

1100. A regularly updated schedule for the conferences and a downloadable

invitation/registration form appear at the FEC’s Web site. Go to http://

www.fec.gov and click on “Help for Candidates, Parties and PACs” for the

latest information.

Date Subject Intended Audience

July 7

9:30 -11 a.m.

Using Prizes or

Entertainment to Raise

SSF Funds

(Code #799)

•

•

Corporate/Labor/Trade

PAC Staff

Lawyers, Accountants

and Consultants to

PACs

August 4

9:30 -11 a.m.

Corporate Mergers and

Spin-Offs —Effect on

the SSF

(Code #899)

•

•

Corporate PAC Staff

Lawyers, Accountants

and Consultants to

Corporate PACs

September 1

9:30 -11 a.m.

Fundraising Through

Payroll Deductions

(Code #999)

•

•

Corporate PAC Staff

Lawyers, Accountants

and Consultants to

Corporate PACs

FEC Conducts Monthly

Roundtable Sessions

The FEC is conducting monthly

roundtable sessions for the regulated

community at its offices in Washington. The roundtable sessions,

limited to 12 participants per

session, focus on a range of topics.

See the table below, right, for dates

and topics.

Registration is $25 and will be

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

before registering or sending money

to be sure that openings remain in

the session of your choice. Prepayment is required. The registration

form is available at the FEC’s Web

site (http://www.fec.gov) and from

Faxline, the FEC’s automated fax

system (202/501-3413, request

document 590). For more information, call 800/424-9530 or 202/694-

1100.

Individuals who have signed up

for a roundtable but who will be

unable to attend are strongly encouraged to call the FEC and cancel

their registration so that the next

person on the waiting list may

attend in their place. ✦

Candidate Conference

Date: February 2000

Location: Washington, DC

Registration: To be determined

Regional Conference (includes

candidate, corporate/labor and

party workshops)

Date: March 2000

Location: Miami, FL

Registration: To be determined

Corporate and Labor

Conference

Date: May 2000

Location: Washington, DC

Registration: To be determined

Membership and Trade

Association Conference

Date: June 2000

Location: Washington, DC

Registration: To be determined

Public Appearances

July 16

American Bankers Association

Long Beach, CA

Dorothy Yeager, Senior Public

Affairs Specialist

July 19

George Washington University

Washington, DC

Scott Thomas, Chairman

Roundtable Schedule

Outreach

Filled!

Waiting List

Only
Federal Election Commission RECORD July 1999

4

Regulations

Final Rules for Matching

Credit Card Contributions

Sent to Congress

On June 8, the Commission

approved final rules that allow

certain kinds of contributions made

by credit or debit card to be matched

under the Presidential Primary

Matching Payment Account Act. The

new rules will allow candidates to

receive matching funds for the first

$250 of an individual’s contribution

made by credit card over the Internet.

The final rules were published in

the June 17, 1999, Federal Register

and transmitted to Congress for a

30-legislative day review period.

Unless Congress and the President

disapprove the regulations, they will

be applicable retroactively to credit

and debit card contributions made

on or after January 1, 1999.

Commission Regulations and

Advisory Opinions

Under the Matching Payment

Act, the first $250 of each eligible

contribution—from an individual—

is matched by the federal government as long as certain conditions

are met. A Presidential candidate

must raise at least $100,000, collecting $5,000 in matchable contributions in at least 20 different states,

and must agree to other conditions

found in the Matching Payment Act.

26 U.S.C. §§9033, 9034.

For purposes of federal matching

payments, a contribution is considered a gift of money made by a

written instrument that identifies the

person making the contribution. 11

CFR 9034.2. The regulations go on

to define “written instrument” to

mean “a check written on a personal

escrow or trust account representing

or containing the contributor’s

personal funds; a money order; or

any similar negotiable instrument.”

Current regulations at 11 CFR

9034.3(c) list credit card transactions among several types of

nonmatchable contributions.

The Commission has authorized

the use of credit cards for unmatched contributions since 1978

(AO 1978-68), and has allowed

corporations to reimburse their

political action committees for

service charges incurred by credit

card contributions (AO 1984-45).

The Commission has also approved

advisory opinions that allow:

automatic fund transfers from

contributors’ bank accounts to

committee accounts (AO 1989-26);

contributions and membership dues

paid to a PAC with a credit card

(AO 1990-4); and contributions to

campaign committees made by

advance authorization of credit card

charges (AO 1991-1).

In AO 1995-9, the Commission

authorized non-matchable contributions made with a credit card over

the Internet, but stipulated that

appropriate safeguards were needed

to screen out excessive and prohibited contributions. AO 1995-35 gave

the requester permission to solicit

matchable contributions over the

Internet, where contributors were

asked to make their contributions

via personal check and mail them to

the campaign. And, most recently,

the Commission approved AO

1999-9, which, pending the enactment of the rules discussed below,

would allow contributions made by

credit cards over the Internet to be

matched. See next page for a

summary of this advisory opinion.

Before AO 1999-9, the Commission had declined to match credit

card contributions to primary

Presidential candidates, stating that

contributions submitted for matching funds require a higher documentation standard to prevent fraud than

credit card transactions provide.

The Commission has now

concluded that, with proper safeguards, credit card contributions can

be matchable. It cited these reasons:

• The use of credit cards has expanded

dramatically since the issue was last

considered by the FEC in 1983.

• Credit and debit card contributions

present no greater danger of fraud

than do other contributions so long

as adequate precautions are taken.

• This policy would make it possible

to solicit and receive contributions

over the Internet, consistent with

the Commission’s interest in using

the medium where appropriate.

Amendments to Regulations

The Commission is making the

following changes to its regulations:

• Amend 11 CFR 9034.2(b) to

clarify that the term “written

instrument” also means a transaction slip or other writing signed by

a credit or debit cardholder, or, in

the case of the Internet, an electronic record of the transaction

made by credit or debit card that

can be maintained electronically

and reproduced in written form by

the recipient candidate committee.

• Revise 11 CFR 9034.2(c) to clarify

that the term “signature” includes

an actual signature by the

cardholder/contributor on a

transaction slip or other writing,

or, in the case of the Internet, the

full name and card number of the

cardholder/contributor entered and

transmitted by the cardholder.

• Amend 11 CFR 9034.2(c)(8)(i) to

state that credit card and debit card

contributions are matchable

Federal Register

 Federal Register notices are

available from the FEC’s Public

Records Office.

Notice 1999-8

Presidential Debates; Notice of

Availability of Petition for

Rulemaking (64 FR 31159, June

10, 1999)

Notice 1999-9

Matching Credit Card and Debit

Card Contributions in

Presidential Campaigns; Final

rules and transmittal of

regulations to Congress (64 FR

32394, June 17, 1999)
July 1999 Federal Election Commission RECORD

5

provided that the written instrument and signature requirements

are satisfied. New rules at (c)(8)(ii)

state that credit and debit card

contributions will be matched if

the requesting committee provides

evidence that the contributor has

affirmed that the contribution is

from personal funds and not from

any prohibited source.

• Delete credit card transactions

from the definition of

nonmatchable contributions found

at 11 CFR 9034.3(c).

As with other contributions,

committees will be required to

exercise “best efforts” to report all

contributions and to identify contributors whose aggregate contributions exceed $200 in a calendar

year. Committees may send a

follow-up request via e-mail for

contributions received over the

Internet. AO 1995-9. Additionally,

the Commission states that the costs

associated with processing credit

and debit card contributions are an

allowable fundraising expense.

Additional documentation

requirements may be addressed in

the Commission’s final rules

regarding the public funding process, and will be included in Guideline for Presentation in Good Order,

where the FEC spells out requirements for submitting contributions

for matching funds.

Certain Credit Card Contributions

Taken by Telephone Not Included

Credit card transactions conducted

solely by telephone are not matchable under the new rules because

they do not meet the statutory

“signature” requirement. However, if

a committee receives written verification of a credit card phone contribution from the contributor, then the

contribution may be matched.

More Information

The full text of the final rules

appears in the Federal Register (64

FR 32394), which is available

through FEC Faxline. Dial 202/501-

3413 and request document 240. ✦

FEC Seeks Comments on

Petition Urging Changes to

Debate Regulations

On June 3, the Commission

approved a Notice of Availability in

response to a petition that it amend

its rules for debates by Presidential

and Vice Presidential candidates. The

deadline for comments is July 12.

The petition, from William T. and

Mary Clare Wohlford and Martin T.

Mortimer, all members of their

respective state Reform Party

organizations (Virginia and Pennsylvania), urges the Commission to

establish objective criteria for

debate participants, rather than

leaving it to the discretion of the

debate-staging organizations.

The debate regulations state that

staging organizations must use preestablished objective criteria to

determine which candidates can

participate in a debate. 11 CFR

110.13(c). The petition recommends

that the Commission change its

regulations to allow debates to be

open to any candidate who has a

mathematical potential to win the

election (is on the ballot in enough

states to earn the requisite 270

electoral votes) and has spent at

least $500,000 on the campaign by

the end of the month preceding the

date of the first scheduled debate

held on or after September 1 of the

election year. The petition recommends that candidates have equal

access to debates held before

September 1 without regard to ballot

access and financial considerations.

The Notice of Availability seeks

comments on whether the FEC

should initiate a rulemaking in

response to the petition. The Commission routinely provides an

opportunity for comments on

rulemaking petitions before the

agency considers the merits of the

petition.

The notice, published in the June

10, 1999, Federal Register (64 FR

31159), is available from the

following sources:

• Public Records at 800/424-9530;

• FEC Faxline at 202/501-3413

(request document 239); and

• FEC’s Web site—http://

www.fec.gov (select “What’s

New!”).

Public comments must be submitted in either written or electronic

form to Rosemary C. Smith, Senior

Attorney. Written comments should

be mailed to the Federal Election

Commission, 999 E St., NW,

Washington, DC 20463. Faxed

comments should be transmitted to

202/219-3923, with a copy mailed

to the preceding address to ensure

legibility. Comments also may be

sent by e-mail to debates@fec.gov.

Electronic submissions must include

the commenter’s full name, e-mail

address and postal mail address. ✦

Advisory

Opinions

AO 1999-9

Matching Credit Card

Contributions Received Over

the Internet

Bill Bradley for President, Inc.,

may request matching funds for

credit and debt card contributions it

receives over the Internet. This

advisory opinion has been approved

by the Commission on a provisional

basis. The Commission on June 11

submitted a final regulation to

Congress and the President that

would permit matching payments

for credit card transactions. See

previous page for a summary of the

regulations.

The Commission’s regulation at

11 CFR 9034.3(c) lists contributions

that cannot be matched, and includes credit card transactions.

Nonetheless, the Commission, after

studying the legal and policy issues

(continued on page 6)
Federal Election Commission RECORD July 1999

6

Advisory Opinions

(continued from page 5)

involved with credit card transactions, has now determined that such

contributions should be matchable

and has amended the applicable

regulations. Unless Congress and

the President disapprove the new

regulation, it will be applicable

retroactively to credit card contributions made on or after January 1,

1999.

Bradley Plan

Bill Bradley, who has announced

a run for President in 2000, has

qualified for federal matching funds

for the first $250 of primary election

contributions received from individuals. See the May 1999 Record,

p. 2. The Committee plans to solicit

and accept contributions from

supporters through its Web site—

http://www.billbradley.com—and

would like to match those contributions as well. Prospective contributors would contribute by filling out

and submitting an electronic form

found on the campaign Web site.

The form would include a place for

the contributor to type in a credit or

debit card number, or to provide

information to facilitate an electronic fund transfer to the Committee. The Committee would pay all

applicable processing fees.

Screening Procedures

The Committee intends to use an

Internet credit card processing

company, which can compare

contributor information submitted to

the Committee with records on file

with the issuer of the credit card.

This should allow the Committee to

more confidently identify its contributors. Listed below are other

measures the Committee intends to

take to ensure compliance with the

Federal Election Campaign Act (the

Act) and FEC regulations.

• The Web page that contains the

contribution solicitation form

would post language in a clear and

conspicuous manner regarding

prohibited sources of contributions

and contribution limits in federal

elections.

• Contributors would have to

successfully complete the electronic form and decide to transmit

it to the Committee before a

contribution was made. This form

would require information about

the contributor (name, name as it

appears on the credit card, billing

address, residential address, credit

card number and amount of

contribution). If the contributor

failed to provide the requested

information or left a field blank on

the electronic form, the Web site

would prompt the contributor to

provide the missing information.

• If the residential and billing

addresses typed into the electronic

form were different, the Web site

would display a message reminding the prospective contributor that

the Committee cannot accept

corporate contributions. The Web

site would then prompt the prospective contributor to correct

inaccurate or missing information

or cancel the transaction.

• The Web site would require

contributors to check a series of

boxes attesting that their contribution was made with funds from

permissible sources and was in

compliance with the Act’s contribution limits. The Web site would

prompt the prospective contributor

to correct inaccurate or missing

information or cancel the transaction.

Once the form was completed

and transmitted to the Committee, a

credit card processing company

would cross-check the contributor

information against its own records.

The Committee would then send a

message to the contributor either

alerting him or her that the contribution had been rejected by the

processing company or informing

the contributor that it had been

approved. The Committee also

intends to follow all other procedures for receiving contributions,

such as verifying that contributors

have not exceeded their limits.

Commission Regulations

For purposes of federal matching

payments, a contribution is a gift of

money made by a written instrument

that identifies the person making the

contribution. 11 CFR 9034.2. As

stated above, credit card contributions do not, under current regulations, qualify as a written

instrument. In previous advisory

opinions, however, the Commission

has concluded that credit card

transactions solicited through the

Internet are permissible. AOs 1995-

35 and 1995-5. In these and other

advisory opinions, the Commission

has attempted to interpret the Act

and FEC regulations in a manner

consistent with technological

innovations where the use of such

technology would not compromise

campaign finance laws.

In fact, in a recent advisory

opinion, AO 1999-3, the Commission approved Microsoft Corporate

Political Action Committee’s

request to accept electronic signatures to authorize payroll deductions

to the PAC. The Commission

reasoned that the electronic signature, coupled with safeguards to

guarantee its authenticity, functioned as a unique identifier of the

authorizing employee and did not

run contrary to any specific rule.

See the May 1999 Record, p. 5.

The same type of analysis is

applicable to the Committee’s

request. The Commission notes the

numerous safeguards built into the

proposal, relating to both contributor identification and screening for

impermissible contributions. The

screening procedures would “allow

the Committee to verify the identity

of those who contribute via credit

card with the same degree of

confidence that political committees

generally accept checks via direct

mail and other forms of solicitation

that are consistent with Commission

regulations.”
July 1999 Federal Election Commission RECORD

7

The Commission has concluded,

however, that committees should

delete all credit card expiration

dates from any matching fund

submission documents—both

electronic and paper—that are

provided to the Commission to

prevent that information, in conjunction with a credit card number,

from being misused.

With the checkoff questions, the

electronic contributor form is the

functional equivalent of a written

instrument. The contributor’s

response to the questions on the

form would be tantamount to a

written signature on that form. The

Commission notes that the Committee must retain the electronic

records in a form that can be printed

on paper as needed. The Commission further notes that the screening

procedures detailed by the Committee provide a “safe harbor” for other

Presidential committees that elect to

seek federal matching payments for

credit card contributions they

receive over the Internet, but the

Commission does not mandate the

use of the safeguards specifically

mentioned in this advisory opinion.

Date Issued: June 10, 1999;

Length: 8 pages. ✦

AO 1999-10

Solicitation of Mutual

Insurance Company

Policyholders

The Nationwide Political Participation Committee may solicit

contributions from member policyholders of its connected organizations, Nationwide Mutual Insurance

Company and Nationwide Mutual

Fire Insurance Company. The

policyholders—including those who

are independent contractor agents—

are considered members for purposes of Commission regulations.

 The Federal Election Campaign

Act (the Act) states that an incorporated membership organization or a

separate segregated fund established

by such an organization may solicit

voluntary contributions to its SSF

from the organization’s members

and their families, as well as the

executive and administrative

personnel and their families. 2

U.S.C. §441b(b)(4)(C). Commission

regulations use the term “membership association” to describe entities

covered by this section and define it

as a membership organization,

cooperative or corporation without

capital stock that provides for

members in its bylaws, expressly

solicits members and acknowledges

the acceptance of membership. 11

CFR 114.1(e)(1).

The term “member” is defined in

Commission regulations and has

been interpreted in FEC v. National

Right to Work Committee and

Chamber of Commerce v. FEC. In

NRWC, the U.S. Supreme Court

suggested that members are to be

defined, at least in part, by analogy

to stockholders of business corporations and members of labor unions.

The Nationwide companies

qualify as membership associations

under Commission regulations. The

bylaws of the companies, which are

mutual insurance companies,

provide for members, who are the

policyholders. The companies solicit

new members, or policyholders, as a

matter of doing business. Finally,

the companies acknowledge the

acceptance of membership in the

policy documents they issue to

policyholders.

Similar to stockholders in a

corporation, the Nationwide companies’ policyholders have both a

financial attachment to and participatory rights in the companies.

Policyholders are considered owners

of a mutual insurance company and

they pay significant premiums. In

addition, each policyholder has a

right to vote at the Nationwide

companies’ annual and special

meetings, including the right to vote

for the companies’ governing

bodies.

Therefore, the Committee may

solicit policyholders for contributions so long as the policyholders

are not otherwise prohibited by the

Act from making contributions.

Date Issued: May 14, 1999;

Length: 5 pages. ✦

AO 1999-11

Federal Candidate’s Use of

State Campaign Account

Dianne Byrum, a member of the

Michigan State Senate and a Congressional candidate for the 2000

election cycle, may continue to

advertise weekly coffees using

billboards paid by her Michigan

State Senate campaign account.

For about seven years, Ms.

Byrum has conducted weekly

“coffees” in restaurants located in

the districts she has represented to

allow constituents to discuss items

of state interest or pending state

legislation. The coffees have been

advertised on billboards located in

her state legislative district, paid

with state campaign funds. The

billboards have a picture of Ms.

Byrum and invite the public to join

her for coffee and conversation. The

billboards list her State senate phone

number and advise the public to call

there for time and location.

During her candidacy for the U.S.

House of Representatives, Ms.

Byrum will continue to serve in the

Michigan State Senate and intends

to continue her weekly coffees. She

also plans to continue advertising

the coffees through billboards.

Commission regulations define

“contribution” and “expenditure” to

include any gift, loan or payment of

money or anything of value made

for the purpose of influencing a

federal election.

In the past, when determining

whether expenses incurred for

events involving federal candidates

were made “for the purpose of

influencing a federal election,” the

Commission examined the stated

(continued on page 8)
Federal Election Commission RECORD July 1999

8

purpose of the activities. In several

advisory opinions, the Commission

concluded that events in which

federal officeholders participated in

their capacities as officeholders

were not “for the purpose of influencing a federal election” simply

because the officeholders might be

candidates for election to federal

office.1

 Thus, payments for the

expenses of such events were not

contributions to that officeholder’s

campaign, absent any campaign

activity at that event.

In this case, based on the facts

listed below, the costs related to the

coffees (including the billboards)

are neither contributions nor expenditures. They may, therefore, be

paid for with state campaign funds.

• The purpose of these disbursements is to support Ms. Byrum in

her State legislative capacity.

• Neither she nor her representatives

will solicit contributions or expressly advocate her election to

federal office during the course of

the coffees.

• Discussion at the events will be

limited to issues relating to her

constituents’ needs and issues

affecting her state senatorial

district.

• No advertising of the events will

take place outside her state senate

district.

• The scope of advertising and the

frequency of the events will be

unchanged from previous years.

• Information relating to participants

at the events will not be provided

to nor made available for use by

her Congressional campaign

committee.

Date Issued: May 21, 1999;

Length: 4 pages. ✦

Advisory Opinions

(continued from page 7)

1

 See AOs 1994-15, 1992-5, 1991-17,

1988-27, 1981-37 and 1980-89.

Advisory Opinion Requests

Advisory opinion requests are

available for review and comment in

the Public Records Office.

AOR 1999-13

Valuation of air transportation

provided to candidate on aircraft not

licensed for commercial use (National Republican Congressional

Committee, May 11, 1999; 3 pages

plus 30-page attachment)

AOR 1999-14

Solicitations for bequests that

exceed individual’s annual contribution limit to nonconnected PAC held

in escrow (Council for a Livable

World, May 25, 1999; 2 pages)

AOR 1999-15

Membership status of timeshare

owner members (American Resort

Development Association, June 3,

1999; 2 pages plus 60-page attachment)

AOR 1999-16

Solicitation of chapter members by

trade group PAC (Commercial

Finance Association, June 4, 1999;

3 pages plus 37-page attachment)

AOR 1999-17

Use of the Internet in 2000 Presidential election (Governor George

W. Bush for President Exploratory

Committee, Inc., June 7, 1999; 4

pages) ✦

Court Cases

Judicial Watch v. FEC

On May 7, the U.S. Court of

Appeals for the District of Columbia

Circuit reversed a lower court ruling

and dismissed this case. The appeals

court found that Judicial Watch

lacked standing to challenge the

FEC’s decision to dismiss an

administrative complaint it filed

with the agency.

That complaint, filed in August

1996, alleged that the White House,

the Democratic National Committee

(DNC), the Department of Commerce and the Clinton administration had sold seats on foreign trade

missions in exchange for campaign

contributions to the DNC and

Clinton/Gore 1996. In its district

court complaint, filed in February

1998, Judicial Watch alleged that

the respondents had violated 18

U.S.C. §600, which makes it

unlawful to promise any special

benefit or treatment as a reward for

political activities in support of or

opposition to a candidate, election

or political event. See the April

1998 Record, p. 4.

The FEC moved for dismissal of

the case for lack of standing. In July

1998, the U.S. District Court for the

District of Columbia denied that

motion and granted summary

judgment to Judicial Watch, remanding the case to the FEC to

allow the agency to decide whether

to pursue the administrative complaint. See the September 1998

Record, p. 3. The FEC appealed this

ruling.

Appeals Court Decision

In order to establish standing,

Judicial Watch had to show that it

had suffered an injury in fact, that

there was a causal connection

between the injury and the conduct

being complained about, and that it

was likely that the injury would be

redressed by a favorable decision.

Need FEC Material

in a Hurry?

 Use FEC Faxline to obtain FEC

material fast. It operates 24 hours

a day, 7 days a week. More than

300 FEC documents—reporting

forms, brochures, FEC

regulations—can be faxed almost

immediately.

 Use a touch tone phone to dial

202/501-3413 and follow the

instructions. To order a complete

menu of Faxline documents, enter

document number 411 at the

prompt.
July 1999 Federal Election Commission RECORD

9

In its memorandum opinion, the

appellate court concluded that

Judicial Watch failed to show that it

suffered an injury stemming from

the FEC’s dismissal of its administrative complaint. The court said it

was too late for Judicial Watch now

to argue that its complaint should be

read to allege reporting violations,

and that the FEC’s dismissal

deprived the group and its members

of information to which they are

entitled. In Common Cause v. FEC,

the appeals court had found that, if

an organization has simply been

“deprived of the knowledge as to

whether a violation of the law has

occurred,” then its injury is no more

than a general “interest in enforcement of the law” and not sufficient

for standing.1

The court noted that Judicial

Watch failed to make even a nominal allegation of reporting violations

in its complaint. If, however,

Judicial Watch has a viable claim of

reporting violations, the court stated

that it should file a new complaint

with the FEC asserting those

violations.

The appellate court also agreed

with the FEC that the district court

erred in granting summary judgment

for Judicial Watch on the merits

before the FEC had answered the

complaint.

U.S. Court of Appeals for the

District of Columbia Circuit, 98-

5355; U.S. District Court for the

District of Columbia, 98-0386. ✦

1

 Common Cause v. FEC, 108 F.3d 413

(D.C. Cir. 1997).

USA v. Hsia

On May 18, the U.S. Court of

Appeals for the District of Columbia

Circuit reversed a district court

decision to dismiss five counts of a

six-count criminal indictment

charging Maria Hsia, a Democratic

fundraiser, with collecting and

disguising impermissible contributions in the 1995-96 election cycle.

The five counts of the indictment

that have now been reinstated

accuse Ms. Hsia of causing the

Clinton/Gore ’96 Primary Committee, the Democratic National

Committee and The Friends of

Patrick J. Kennedy ’96 to make

false statements in their reports filed

with the FEC. The appellate court

also denied Ms. Hsia’s cross-appeal

of the remaining count in the

indictment, which accuses her of

conspiracy to defraud the FEC and

the Immigration and Naturalization

Service.

The court remanded the case to

the U.S. District Court for the

District of Columbia for further

proceedings.

The Department of Justice (DOJ),

which filed this suit, alleges that Ms.

Hsia and the International Buddhist

Progress Society (IBPS), an incorporated, tax-exempt religious

organization in California, funneled

money through straw donors to

various campaigns. The indictment

alleges that Ms. Hsia and IBPS

asked nuns, monks and others with

ties to IBPS to make contributions

to Democratic campaigns, and later

reimbursed them with IBPS funds.

Ms. Hsia is also accused of using

straw donors to funnel money from

two clients of her Los Angeles

immigration consultant business to

Democratic campaigns.

The Federal Election Campaign

Act (the Act) prohibits corporations

from making contributions in

connection with any federal election. 2 U.S.C. §441b(a). The Act

also prohibits any person from

making a contribution in the name

of another. 2 U.S.C. §441f. Additionally, the U.S. tax code bars

certain organizations, such as IBPS,

from participating in any political

campaigns. 26 U.S.C. §501(c)(3).

Finally, under 18 U.S.C. §§2 and

1001, it is unlawful to willfully

cause an offense by another person

against the United States.

Appeals Court Decision

The appeals court first addressed

the willful nature of Ms. Hsia’s

alleged conduct. The district court

had concluded that Ms. Hsia’s

actions were not willful because the

DOJ failed to show that she knew

her conduct was unlawful. The

appellate court, however, stated that

the government need not prove that

Ms. Hsia knew that her conduct was

unlawful; only that she knew that

the information provided to the

political committees regarding the

sources of contributions was false

and that she intentionally caused

false statements to be made by

another.

The appeals court also rejected

the district court’s finding that the

causal link between Ms. Hsia’s

conduct and the false statements in

the political committees’ reports

was too “attenuated.” In fact, the

appeals court concluded the conduit

scheme together with the names on

the checks caused false statements

to be made by the political committees. The appellate court pointed to

several cases where the courts

previously upheld applying the

“false statement prohibition” to

conduit contribution schemes. In

those cases, defendants used straw

donors to conceal their own contributions. Here, Ms. Hsia did not

funnel her own money to straw

donors: instead, the money belonged

to immigration clients or to IBPS.

Hsia, however, arranged for the

conduits to do their part. The

distinction of whose money was

used is irrelevant to this situation,

the appeals court found. FEC

regulations state that a contribution

made by check should be reported

as a contribution by the last person

signing it. 11 CFR 104.8(c). “The

simple interposition of conduits to

sign the checks is certainly enough

to ‘cause’ a committee to make false

statements in its report,” the appeals

court wrote in its decision.

(continued on page 10)
Federal Election Commission RECORD July 1999

10

Court Cases

(continued from page 9)

The appeals court also rejected

the lower court’s finding that the

contributor information filed with

the Commission by the three

committees was “literally true.” The

district court had reasoned that,

because the indictment did not

allege that the committees’ treasurers had any wrongful knowledge

about the true contributors, the

statements in their reports had to be

considered in compliance with the

Act, and therefore not false.

This reasoning assumes that the

safe harbor provision protecting

treasurers of political committees

who use “best efforts” to report all

required information, 11 CFR 104.7,

modifies the substantive reporting

requirements of the Act. However,

the court added, “it would make no

sense for Congress to allow treasurers to rely on the provision of

information by others while at the

same time giving others a virtual

carte blanche to provide inaccurate

information.”

U.S. Court of Appeals for the

District of Columbia Circuit, 98-

3114 and 98-3125. ✦

New Litigation

FEC v. David Gentry for

Congress Committee

The FEC asks the court to find

that the David Gentry for Congress

Committee and its treasurer failed to

file on time five reports it was

required to disclose to the FEC

during the 1995-96 election cycle. 2

U.S.C. §§434(a)(2)(A)(i), (ii) and

(iii) and 434(a)(2)(B)(ii).

The Commission contends that

the Committee, which supported the

primary and general election efforts

of Raymond Davis Gentry, Jr., a

candidate for Florida’s 5th congressional district, filed late its 1995

year-end report, April and July 1996

quarterly reports, 1996 pre-primary

report and 1996 post-general report.

Compliance

Attempts to reach a conciliation

agreement with the Committee over

the alleged violations failed.

In addition to finding that the

Committee and its treasurer violated

the Federal Election Campaign Act,

the FEC asks the court to assess a

civil penalty against both, permanently enjoin them from similar

violations and award the FEC its

costs in this court action.

U.S. District Court for the Middle

District of Florida, Orlando Division, 99-435-CIV-ORL-22A, April

12, 1999. ✦

MUR 4632

Committee to Pay $50,000

for Late Reports, No

Designated Treasurer

The Nevada State Republican

Central Committee will pay a

$50,000 civil penalty for failing to

file most of its 1995-96 reports on

time, failing to amend its Statement

of Organization following a vacancy

in the treasurer position and receiving contributions and making

expenditures without a treasurer’s

authorization.

The Federal Election Campaign

Act (the Act) requires all political

committees to file disclosure reports

with the Commission on either a

monthly or quarterly basis. 2 U.S.C.

§434(a)(4)(B). The Act also requires

that every political committee have

a treasurer, and that no contribution

or expenditure be accepted or made

by or on behalf of a political committee when the treasurer position is

vacant. A treasurer must authorize

any expenditure made for or on

behalf of a political committee. 2

U.S.C. §432(a). The Act goes on to

require committees to report any

change in information previously

submitted to the FEC in a Statement

Audits

of Organization no later than 10

days after the date of the change. 2

U.S.C. §433(c).

The Nevada committee violated

all of these provisions. Between

February 1995 and April 1996, it

filed nearly all of its reports late—

from as few as 23 days to as many

as 245 days after the due dates. In

all, the committee was tardy in

disclosing more than $725,000 in

receipts and more than $650,250 in

disbursements for the 14-month

period.

The Nevada committee also had

no treasurer for several months in

1995, yet it continued to receive

contributions and make expenditures. In addition, when a former

treasurer resigned from the committee in March 1995, the committee

failed to notify the FEC of this

change within the required time

period.

The Commission entered into a

conciliation agreement with the

committee after finding probable

cause to believe that it had violated

the Act. This is not the first conciliation agreement signed between the

Nevada committee and the FEC.

Previously, in April 1996, the

committee paid a $1,200 civil

penalty for its failure to file a

disclosure report timely. ✦

Commission Completes

Audits of Clinton, Dole ’96

Campaigns

The FEC has determined that the

Clinton and Dole primary and

general election Presidential campaigns must repay the U.S. Treasury

for public funds they used during

the 1996 election. The Commission

made its determinations after

conducting audits of the committees, which is required for any
July 1999 Federal Election Commission RECORD

11

Public Funding

authorized candidate committee that

receives federal funds under the

Presidential Election Campaign

Fund Act and the Presidential

Primary Matching Payment Account

Act. 26 U.S.C. §§9007.1(a) and

9038.1(a).

Clinton Committees

President Bill Clinton’s 1996

primary committee, Clinton/Gore

’96 Primary Committee, Inc., must

repay $126,680 to the Treasury. The

Commission found that the primary

committee paid for $114,450 in

nonqualified campaign expenses—

among the expenses were catering

services, equipment, staff salaries,

office overhead and consulting

work—that should have been paid

for with general election funds. The

Commission also found $12,230 in

stale-dated checks.

Clinton/Gore ’96 General Committee, Inc., and Clinton/Gore ’96

General Election Legal and Accounting Compliance Fund must

repay $16,412 to the Treasury. Here,

the Commission cited $12,427 in

apparent nonqualified campaign

expenses related to air travel to the

Democratic National Convention

and $3,985 in interest earned on

federal funds.

Dole Committees

Former Senator Bob Dole’s 1996

primary committee, Dole for

President, Inc., must repay $515,272

to the Treasury. The Commission

noted a surplus repayment of

$283,481 resulting from amounts

due from the general election

campaign for winding-down expenses paid on its behalf, $6,255 in

nonqualified campaign expenses and

$225,536 in stale-dated checks.

Dole/Kemp ’96, Inc., and Dole/

Kemp ’96 Compliance Committee,

Inc., must repay $3.2 million to the

Treasury. The Dole committees

exceeded the 1996 Presidential

general election expenditure limit

($61.82 million), which accounts for

the bulk of the repayment. The

largest factor in the excessive

spending related to overbilling the

press and Secret Service for travel

on the campaign. The Commission

also cited $574,158 in nonqualified

campaign expenses related to

expenses that should have been paid

by Dole for President; $46,510 in

interest income earned by the two

committees; and $44,046 in staledated checks. The Commission also

determined that Dole/Kemp ’96

should refund $1.15 million to press

representatives and $65,754 to the

Secret Service for overcharging

them for campaign travel.

The four audit reports are available from the FEC’s Public Records

Office by calling 800/424-9530 or

202/694-1120. ✦

Bauer, Quayle Eligible for

Matching Funds

On May 27, both Republican

Presidential candidates Gary L.

Bauer and Dan Quayle became

eligible for public matching funds

for their primary election races.

They join Democrat Bill Bradley,

who became eligible for matching

funds on March 25.

To establish eligibility, a candidate must raise $100,000 by collecting $5,000 in matchable

contributions in at least 20 different

states. Only contributions received

from individuals, and only up to

$250 of a contributor’s total, are

matchable by the federal government.

Eligible candidates must agree to

limit their spending, use funds for

campaign-related expenses only,

keep financial records and submit

their records to an FEC audit.

Once declared eligible, candidates can submit additional contributions for matching funds on the

first business day of every month.

The U.S. Treasury will begin paying

out the FEC-certified amounts in

January 2000. Currently, the maximum amount a 2000 Presidential

primary candidate can receive in

matching funds is calculated at

$16.75 million.

Matching fund submissions are

available at the FEC’s Web site—

http://www.fec.gov—as

downloadable FTP files. Go to

“Financial Information About

Candidates, Parties and PACs” and

follow the links. Instructions are on

the Web site.

Copies of submissions are also

available from the FEC’s Public

Records Office. Call 800/424-9530

or 202/694-1120. ✦

Budget

Thomas, Wold Present

Budget Request on Hill

FEC Chairman Scott E. Thomas

and Vice Chairman Darryl R. Wold,

who chairs the FEC’s Finance

Committee, presented the

Commission’s FY 2000 budget

request to the Committee on House

Administration on May 18.

Mr. Wold said the FEC is seeking

$38.6 million and 356.5 staff

members for FY 2000, a net increase of $1.7 million (4.5 percent)

and 9.5 staff members over FY

1999. The Vice Chairman noted that

the majority of the requested budget

increase was due to inflation, while

the remainder was for additional

staff resources, primarily in enforcement programs.

He said that three of the requested additional staff would be

added to the FEC’s Audit Division

“to handle the anticipated increase

in the number of funding requests in

the Presidential matching fund

program in the 2000 elections,” and

(continued on page 12)
Federal Election Commission RECORD July 1999

12

Publications

Electronic

Filing

Electronic Filing Survey

Last month many political

committees received a survey from

the Electronic Filing Office requesting information that will be used to

help improve and promote the

electronic filing process. The FEC

would like to thank those who

responded promptly.

Due to an intermittent fax line

problem, however, it is possible that

some faxed surveys were only

partially received or were not

received at all. Consequently, if

your committee returned the survey

via fax, the Commission would

appreciate your faxing it again.

FEC Issues ’98 Annual

Report

The FEC’s Annual Report 1998 is

now available. The report describes

the FEC’s actions during the last

calendar year and includes the

legislative recommendations the

Commission recently transmitted to

the President and Congress for

consideration.

The report discusses some of the

issues with which the Commission

has recently grappled, including

independent expenditures by party

committees and nonprofits, express

advocacy and soft money. New to

the report this year is a listing of all

recipients of public funding since

the program began in 1976, how

much each candidate received and

how much each repaid the U.S.

Treasury.

The report also documents the

rapidly increasing demands on the

Commission’s limited resources

brought about by record-level

campaign finance activity during the

1997-98 election cycle. In addition,

the report contains the latest figures

on what is predicted to be a severe

Budget

(continued from page 11)

Information

that six of the additional requested

staff would be added in the General

Counsel’s Office “to improve our

compliance efforts, both in regular

enforcement matters and in the

Presidential public funding program.”

Mr. Wold added: “We believe

that our budget request, including

the modest increase over the current

fiscal year, is consistent with, and

justified by, the PwC

[PricewaterhouseCoopers] Report

and the recommendations it contains.”

Mr. Thomas briefed committee

members on the status of various

recommendations contained in the

PwC management and performance

audit of the FEC, which was completed earlier this year. “The FEC

has made substantial progress in

responding to the PwC recommendations,” he said. “Already the FEC

has undertaken concrete action on

19 of the 21 recommendations

[contained in the report].” ✦

Meeting Documents Now

Available Via E-Mail

The Commission will now send

draft advisory opinions and agendas

for open meetings to your electronic

mailbox. Those with standing

requests to receive these documents

and anyone else who requests draft

advisory opinions or meeting

agendas from the Public Records

Office may now opt for either email or paper delivery.

Previously, these documents were

only available to the public as paper

copies.

Any person may submit written

comments concerning advisory

opinion requests made public at the

Commission. In order to be considered by the Commission, the

comments must be submitted within

the 10-day comment period (or any

extension of the comment period).

11 CFR 112.3. This comment period

begins with the public release of

advisory opinion drafts.

Draft advisory opinions will be emailed on the Thursday preceding

the Thursday morning meeting at

which the draft will be on the

agenda for Commission consideration. Meeting agendas will be emailed on the Tuesday prior to the

Thursday meeting. If the Public

Records Office receives any draft

advisory opinions or meeting

agendas after the scheduled e-mail

date, that office will send them out

as well. The documents will appear

as attachments to the e-mail.

The Public Records Office is

contacting requesters who currently

receive meeting documents on paper

to inform them of the new service. If

you have not been contacted and

wish to change your delivery from

paper to e-mail, or, if you wish to

sign up to receive draft advisory

opinions and meeting agendas by email, call the Public Records Office

at 800/424-9530 or 202/694-1120. ✦

If your committee has not yet

responded to the survey, the agency

requests that you do so now, as the

FEC would like to receive as many

responses as possible even though

the suggested deadline has passed. If

your committee needs a copy of the

survey, please e-mail a request with

a fax number to electronic@fec.gov

or call 202/694-1321 (toll free: 800/

424-9530 and ask for the Electronic

Filing Office) and a survey form

will be sent to you. ✦
July 1999 Federal Election Commission RECORD

13

Results of 1998 Federal

Elections Published

The FEC has released Federal

Elections 98, a 130-page publication

containing the official primary, runoff and general election results for

the 1998 Congressional elections.

This is the ninth edition of this

biennial series, and it is designed to

provide an historical record of

federal election results.

For each state, the publication

lists the names of candidates on the

ballot, write-in candidates, party

affiliations and the number and

percentage of votes each candidate

received, as provided by state

election officials. New this year are

a chart showing the state-by-state

votes cast for the House members

by party, designation of incumbents

who sought reelection and statistics

on the partisan makeup of Congress

after the election.

The publication is available at the

FEC’s Web site—http://

www.fec.gov. Click on “What’s

New!” or look for it under “About

Elections and Voting.” To obtain a

copy of Federal Elections 98, or for

more information, call the Public

Records office at 800/424-9530 or

at 202/694-1120. ✦

800 Line shortfall in public funding for the

2000 Presidential election. A number

of statistical tables and charts are

included in the report as well.

Free copies are available by

calling the FEC’s Information

Division at 800/424-9530 or 202/

694-1100. The report is also available at the FEC’s Web site—http://

www.fec.gov. Click “Help for

Candidates, Parties and PACs.” ✦

$25,000 Annual Limit

Individuals are subject to a

$25,000 annual limit on the total

contributions they make to federal

candidates, party committees and

political action committees. An

individual also has separate limits for

contributions to candidate committees, national party committees, state

party committees and PACs.

Here is a review of the basic rules

for contributions by individuals:

• An individual may contribute a

maximum of $1,000 per election to

a candidate. Typically, that would

allow an individual to give $1,000

to a candidate’s primary race and

$1,000 to the candidate’s general

election run.

• An individual may contribute up to

$20,000 to each national party

committee per year. Note that this

limit applies to contributions to a

national committee’s federal, or

hard money, account only.

• An individual may contribute up to

$5,000 per year to a state party

committee (including local committees subordinate to the committee). Again, this contribution

would be deposited in a

committee’s federal account.

• An individual may contribute up to

$5,000 per year to a PAC (a

corporate or labor separate segregated fund or a nonconnected

PAC).

How the $25,000 Limit Works

Contributions to Candidates. A

contribution to a federal candidate

counts against an individual’s

annual limit for the year in which

the candidate’s election is held,

regardless of the year in which the

contribution is made. 11 CFR

110.5(c). Put another way, any

contribution to a candidate’s 2000

campaign, regardless of whether it is

made in 1999, 2000 or 2001 (designated to retire a 2000 campaign

debt), would count against a

contributor’s $25,000 annual

contribution limit for 2000.

This also holds true when an

individual earmarks a contribution

for a 2000 candidate, and those

contributions are transmitted by a

conduit or intermediary. Similarly,

contributions made in 1999 to an

individual who is “testing the waters”

for a 2000 election, and who later

decides to declare his or her candidacy, count against the contributor’s

$25,000 annual limit for 2000.

PACs and Party Committees. In

contrast to a contribution to a

candidate, a contribution made to a

federal PAC or party committee

counts against the contributor’s

annual limit for the year in which

the contribution is actually made. 11

CFR 110.5(c)(3). If, for example, an

individual makes a $20,000 contribution to a national committee in

1999, it counts against the

contributor’s $25,000 annual limit

for 1999.

Occasionally, contributors

inadvertently exceed their annual

$25,000 contribution limit when

they make contributions to a candidate in a nonelection year. Here is a

typical scenario: a contributor

wishes to support Candidate Smith

in her 2000 election and contributes

to her campaign in November

1999—the year before the election.

The contributor assumes that the

contribution counts against his limit

for the year in which he contributed,

1999. Unaware that the contribution

actually counts against the year in

which Candidate Smith’s election is

held, 2000, the contributor makes

other contributions during the

election year and inadvertently

exceeds his $25,000 limit for 2000.

Other Transactions to Watch Out

For

Caution should be taken not to

exceed the $25,000 annual limit.

Violations can occur when contribu-

(continued on page 14)
Federal Election Commission RECORD July 1999

14

Index

The first number in each citation

refers to the “number” (month) of

the 1999 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

1998-22: Application of expenditure

definition and disclaimer requirements to web site containing

express advocacy, 1:16

1998-23: Status as state committee

of political party, 1:16

1998-26: Candidate committee’s

acceptance of loan repayment

from contested election trust fund

that contains funds loaned to it by

candidate, 3:5

1998-27: Status as state committee

of political party, 3:6

1999-1: Use of campaign funds to

pay salary to candidate, 4:5; 6:6

1999-2: Use of corporate treasury

funds to provide meals to employees attending candidate forums,

4:6

1999-3: Use of digital signatures by

restricted class to authorize

payroll deductions, 5:5

1999-4: Applicability of contribution limits to local party organization conducting federal activity

800 Line

(continued from page 13)

tors are making joint contributions

and contributions to political

committees with federal and

nonfederal accounts.

Joint Contributions. A joint

contribution typically occurs when a

contributor and another individual

each make a contribution using a

single check. The key here is to

inform the recipient committee how

the contribution is to be attributed to

each individual. A contributor can

do this by including a letter with the

contribution or by noting a preference on the check (or other written

instrument). If both individuals sign

the check or a letter sent along with

the check, but provide no direction

for the distribution of the funds, the

money will be attributed equally

between the individuals. If, however, only one individual signs the

check (or letter), then the entire

amount is attributed to that one

person. This could be a problem,

especially if the contributor is about

to reach the $25,000 limit. If, for

example, a married couple intends

to contribute a combined amount of

$5,000 to a state party, but only one

spouse signs the check (or covering

letter), then the entire amount counts

against the signer’s annual $25,000

limit.

Contributions to Committees with

Federal and Nonfederal Accounts.

Some PACs maintain separate

accounts for federal and nonfederal

activity. If an individual intends to

give money to the nonfederal

account, but the committee inadvertently deposits it into the federal

account, there could be a problem if

the deposit causes the contributor to

go over his or her annual $25,000

limit. To avoid this, contributors

should specify the account into

which they want their funds placed.

A contributor can do this by including a letter with the contribution or

by noting a preference on the check

(or other written instrument).

Exceeding the $25,000 Annual

Contribution Limit

Exceeding the $25,000 annual

limit is a violation of federal law

and can result in civil penalties of as

much as twice the amount of the

contributions involved. The contributor and the committees receiving the contributions are legally

responsible for making sure that

contributions do not exceed the

limits. 11 CFR 110.5(b), 110.9(a).

Contributors who inadvertently

exceed the $25,000 annual limit for

the year 2000 should take immediate corrective action by following

one of the options listed below. The

Commission might view a corrective action by the contributor as a

mitigating circumstance and decrease a potential penalty accordingly.

• Obtain a refund from committees

that received the excess contributions.

• Reattribute the excess portion of a

joint contribution to a joint contributor (for example, a spouse), if

his or her limits have not yet been

exhausted.

• Redesignate the excess portion of a

contribution for another election in

a year other than 2000.

• Request a transfer of the excess

contributions to a PAC or party

committee’s nonfederal accounts.

FEC Efforts to Modify the

Regulation

In its latest legislative recommendations to Congress, the FEC asked

lawmakers to consider modifying

the provision that limits individual

contributions to $25,000 per calendar year so that an individual’s

contributions to candidates count

against his or her annual limit for

the year in which they are made. See

the May 1999 Record, p. 4. Congress has not yet taken any action on

the FEC’s proposal.

Information

For more information about the

$25,000 annual limit, see “The

$25,000 Annual Contribution Limit”

brochure. To obtain a copy:

• Go to http://www.fec.gov (select

“Help for Candidates, Parties and

PACs” and then click “Brochures

Index”);

• Dial the FEC’s automated fax

system, FEC Faxline, at 202/501-

3413 (request document 728); or

• Call 800/424-9530 and request a

copy be mailed to you. ✦
July 1999 Federal Election Commission RECORD

15

and affiliated with state party

committee, 6:3

1999-5: Revising state party ballot

composition ratio for new executive office, 6:4

1999-6: Use and publication of

information about annuity allotment program permitting union

member retirees to make contributions to SSF, 6:4

1999-7: Free hyperlinks on government web site to web sites of

candidates, 6:5

1999-8: Investment of excess campaign funds in mutual funds, 6:6

1999-9: Matching credit card

contributions received by Presidential primary candidates via

Internet, 7:5

1999-10: SSF solicitation of member policyholders of mutual

insurance company, 7:7

1999-11: Federal candidate’s use of

funds from state-level account, 7:7

Compliance

MUR 4546: Failure to provide

contributor information and

demonstrate “best efforts,” 5:8

MUR 4632: Untimely reports;

failure to amend Statement of

Organization; treasurer’s absence,

7:10

MUR 4750: Excessive contributions, 1:13

MUR 4751: Excessive and improper

transfers of nonfederal funds,

excessive contributions, corporate

contributions, 2:2

MUR 4796: Corporate contributions, contributions in the names

of others, 1:13

MUR 4834: Foreign national

contribution, contribution in the

name of another, 3:7

Court Cases

FEC v. _____

– Al Salvi for Senate Committee

(98C-4933), 4:5

– Colorado Republican Federal

Campaign Committee, 4:1

– David Gentry for Congress

Committee, 7:10

– Forbes, 4:5

_____ v. FEC

– Judd, 1:3; 4:5

– Judicial Watch, 7:8

– Mariani, 2:1

– National Committee of the Reform

Party, 4:4

– Perot ’96 (98-1022), 6:1

– RNC (98-5263), 1:2

Other

– Burris v. Russell, 1:3

– Cincinnati v. Kruse, 1:3

– Fireman v. United States, 5:7

– USA v. Hsia, 7:9

Regulations

Debates, 7:5

Definition of “Member” of Membership Association, 1:10; 3:1; 5:6

Electronic FOIA, 4:7

Express Advocacy, 3:2; 6:7

Limited Liability Companies, 1:11

Matching Credit Card and Debit

Card Contributions in Presidential

Campaigns, 7:4

Public Financing of Presidential

Primary and General Election

Candidates, 1:7; 3:1; 5:6

Soft money, 1:12

Status of, 3:3

Reports

Electronic filing, 1:6; 2:1

Reports due in 1999, 1:4

Reports due in July, 7:1

Special election, Georgia, 2:3

Special election, Louisiana, 4:7

Statistics

Congressional, 2:4; 6:8

PAC, 3:11; 7:2

Party, 3:4; 6:8

Change of Address

Political Committees

 Treasurers of registered political

committees automatically receive

the Record. A change of address

by a political committee (or any

change to information disclosed

on the Statement of Organization)

must, by law, be made in writing

on FEC Form 1 or by letter. The

treasurer must sign the

amendment and file it with the

Secretary of the Senate or the

FEC (as appropriate) and with the

appropriate state office.

Other Subscribers

 Record subscribers who are not

registered political committees

should include the following

information when requesting a

change of address:

• Subscription number (located on

the upper left corner of the

mailing label);

• Subscriber’s name;

• Old address; and

• New address.

 Subscribers (other than political

committees) may correct their

addresses by phone as well as by

mail.
FEDERAL ELECTION COMMISSION

999 E Street, NW

Washington, DC 20463

Official Business

Penalty for Private Use, $300

Bulk Rate Mail

Postage and Fees Paid

Federal Election Commission

Permit Number G-31

Printed on recycled paper

Federal Election Commission RECORD July 1999

FEC will hold Conference for Partnerships and LLCs in July.

For story, see p. 1.