April 2004 Federal Election Commission Volume 30, Number 4

Table of Contents

Regulations

1 Notice of Proposed Rulemaking

on Political Committee Definition

3 Federal Register

Reports

1 April Reporting Reminder

4 Advisory Opinions

Court Cases

9 Wilkinson v. FEC

9 FEC v. California Democratic

Party, et al.

10 New Litigation

13 Nonfilers

Compliance

13 MUR 5197: Contributions from

Congressionally Chartered

Corporations

Administrative Fines

14 Fines Assessed

Alternative Dispute Resolution

15 ADR Update

Public Funding

15 Matching Fund Certifications

17 Sharpton Eligible for Matching

Funds

Statistics

17 Congressional Fundraising

Outreach

18 Roundtables

18 Conferences

19 Index

Compliance Regulations Reports

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

April Reporting Reminder

Committees filing on a quarterly

basis must file their first quarterly

report by April 15. The report

covers financial activity from

January 1 (or the day after the

closing date of the last report)

through March 31.

In addition to filing quarterly

reports, committees of House and

Senate candidates active in the 2004

primary and runoff elections must

file pre-election reports and may

have to file 48-hour notices of lastminute contributions of $1,000 or

more. Political action committees

(PACs) and party committees filing

on a quarterly basis may also have

to file pre-election reports and 48-

or 24-hour reports of independent

expenditures, depending on the

timing of their activities.

National party committees, PACs

following a monthly filing schedule

and state, district and local party

committees that engage in reportable federal election activity must

file a monthly report by April 20.

(See the April 2003 Record, page 5,

for more information on monthly

filing for state, district and local

party committees.)

Under the Commission’s mandatory electronic filing regulations,

Notice of Proposed

Rulemaking on the

Definition of Political

Committee

On March 4, 2004, the Commission approved a Notice of Proposed

Rulemaking (NPRM) seeking

comments on whether to amend the

definition of “political committee”

applicable to nonconnected committees. As part of that proposal, the

Commission is considering revising

its regulations to address whether

and when disbursements for certain

election activity should be treated as

expenditures. The NPRM includes

proposed rules to implement both of

these changes, as well as related

amendments to the allocation

regulations for nonconnected

committees and separate segregated

funds.

The full text of the NPRM was

published in the March 11, 2004,

Federal Register (69 FR 11736),

and is available on the FEC web site

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

The Commission will hold a public

hearing on these proposed rules

April 14 and 15, 2004, beginning at

10:00 a.m.
Federal Election Commission RECORD April 2004

2

Federal Election Commission

999 E Street, NW

Washington, DC 20463

800/424-9530

202/694-1100

202/501-3413 (FEC Faxline)

202/219-3336 (TDD for the

 hearing impaired)

Bradley A. Smith, Chairman

Ellen L. Weintraub, Vice Chair

David M. Mason, Commissioner

Danny L. McDonald,

 Commissioner

Scott E. Thomas, Commissioner

Michael E. Toner, Commissioner

James A. Pehrkon, Staff Director

Lawrence H. Norton, General

 Counsel

Published by the Information

 Division

Greg J. Scott, Assistant Staff

 Director

Amy Kort, Editor

http://www.fec.gov

Reports

(continued from page 1)

individuals and organizations1 that

receive contributions or make

expenditures in excess of $50,000 in

a calendar year—or expect to do

so—must file all reports and statements with the FEC electronically.

Electronic filers who instead file on

paper or submit an electronic report

that does not pass the Commission’s

validation program will be considered nonfilers and may be subject to

enforcement actions, including

administrative fines.

Senate committees and other

committees that file with the

Secretary of the Senate are not

subject to the mandatory electronic

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

with the FEC in order to speed

disclosure.

The Commission’s electronic

filing software, FECFile 5, can be

downloaded from the FEC’s web

site, www.fec.gov (click on the

Electronic Filing icon). Filers may

also use commercial or privatelydeveloped software as long as the

software meets the Commission’s

format specifications, which are

available on the Commission’s web

site.

For those filers who are not

required to file their reports electronically, paper forms are available

on the FEC’s web site (http://

www.fec.gov/reporting.html) and

from FEC Faxline, the agency’s

automated fax system (202/501-

3413).

Additional Information

For more information on 2004

reporting dates:

• See the reporting table in the

January 2004 Record;

• Call and request the reporting

tables from the FEC at 800/424-

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

1100;

• Fax the reporting tables to yourself

using the FEC’s Faxline (202/501-

3413, document 586); or

• Visit the FEC’s web site at

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

view the reporting tables online.✦

—Elizabeth Kurland

1 The regulation covers individuals and

organizations required to file reports

with the Commission, including any

person making an independent expenditure. However, disbursements for

electioneering communications do not

count toward the $50,000 threshold.

Background

Currently, the Federal Election

Campaign Act (the Act) and Commission regulations define a “political committee,” in part, as “any

committee, club, association, or

other group of persons” that receives contributions or makes

expenditures in excess of $1,000

during a calendar year. 2 U.S.C.

§431(4)(A); 11 CFR 100.5(a).1

 An

expenditure is defined as “any

purchase, payment, distribution,

loan advance, deposit, or gift of

money or anything of value” made

by any person for the purpose of

influencing a federal election, or a

written contract or agreement to do

so. 2 U.S.C. §431(9)(A). Organizations whose expenditures (or

contributions) exceed the $1,000

threshold must register and file

reports with the FEC.

In McConnell v. FEC, the

Supreme Court upheld most of the

Bipartisan Campaign Reform Act of

2002 (BCRA). The BCRA categorized certain election-related

activities undertaken by party

committees as “federal election

activity” (FEA), including:

• Voter registration activity during

the 120 days before a regularly

scheduled federal election;

• Voter identification, get-out-thevote (GOTV) and generic campaign activity in connection with

an election in which a candidate

for federal office appears on the

ballot; and

• A public communication that

refers to a clearly identified federal

candidate and that promotes,

attacks, supports or opposes a

candidate for that office. 11 CFR

100.24.

The Court found that the first two

types of FEA listed above “confer

substantial benefits on federal

candidates,” and that any “public

communication that promotes or

attacks a clearly identified federal

candidate directly affects the

election in which he is participating.”

The Court also upheld the

regulation of “electioneering

communications” (which include

television and radio ads that refer to

Regulations

(continued from page 1)

1 See also 2 U.S.C. §431(4)(B) and (C)

and 11 CFR 100.5(b) and (c).
April 2004 Federal Election Commission RECORD

3

a clearly identified federal candidate

and are distributed in close proximity to an election) even though the

communications do not contain

express advocacy. See 2 U.S.C.

§434(f)(3); 11 CFR 100.29. The

Court found some of these ads to be

“the functional equivalent of express

advocacy.”

The Commission seeks comments

on whether the Supreme Court’s

treatment of FEA and electioneering

communications requires or permits

it to change its regulations defining

“expenditure” and “contribution” to

include these concepts, and to what

extent these activities should count

toward the $1,000 political committee registration threshold. In the

alternative, the Commission asks

whether it can expand the regulatory

definitions of contribution and

expenditure in the absence of new

legislation, and, if it may permissibly do so, whether it should redefine

such fundamental and statutory

terms without further Congressional

guidance. Finally, the Commission

seeks comments on whether it

should delay the effective date of

any of the proposed rules described

below, or any other changes to the

regulatory definition of political

committee, if it adopts revisions to

its regulations during the current

election cycle.

Proposed Rules

The Commission is considering

amending the current definition of

political committee at 11 CFR

100.5 to:

• Include a test to determine whether

a committee’s “major purpose” 2 is

the nomination or election of one

or more federal candidates; and/or

• Count payments for electioneering

communications and the three

types of FEA listed above toward

the $1,000 expenditure thresholds.

Major purpose test. The Commission asks whether any “major

purpose test” included in the

definition of “political committee”

should require that the election or

nomination of a candidate be the

predominate purpose of the organization or whether the major purpose

standard is satisfied when these

activities are only one of the

committee’s major purposes. The

proposed rules contain a series of

tests for determining whether a

committee has the election or

nomination of a candidate as a

major purpose, such as whether the

committee:

• Makes statements demonstrating

that this is its major purpose and

spends more than $10,000 during

the year (or in any of the previous

four years) on any combination of

contributions, expenditures, FEA

or electioneering communications.

• Makes more than 50 percent of its

annual disbursements during the

year (or in any of the previous four

years) for any combination of

contributions, expenditures, FEA

or electioneering communications.

• Makes more than $50,000 in total

disbursements during the year (or

in any of the previous four years)

for any combination of contributions, expenditures, FEA or

electioneering communications.

The proposed rules contain two

alternatives for a fourth test that

addresses entities organized under

section 527 of the tax code. The

first alternative would consider all

527 organizations to have the

nomination or election of candidates

as a major purpose, with five

exceptions. Under the second

alternative proposed test, any 527

organization would automatically

have the election or nomination of a

candidate as a major purpose,

without any exceptions.

Expenditures. The Commission is

considering amending its general

definition of “expenditure” to

include payments for the three types

of FEA listed above and for electioneering communications. The

NPRM also outlines a narrower

approach, which would incorporate

the concepts of FEA but would also

re-examine those activities to

determine whether they are the

functional equivalent of the same

activities carried out by a party

committee when they are undertaken by another type of entity. The

proposed rules would distinguish

between partisan and nonpartisan

FEA by, for example, stating that

voter registration or GOTV activities that promote, attack, support or

oppose a political party or a federal

or nonfederal candidate are partisan.

Similarly, if information concerning

likely party or candidate preference

was used to determine which voters

to encourage to register or to vote,

then the activity is partisan. Partisan

voter drives would, with some

exceptions, be considered expenditures. Other activities that might be

considered expenditures under the

proposed rules include public

communications that refer to a

clearly identified federal candidate

and promote, support, attack or

2

 In Buckley v. Valeo, the Supreme

Court found that the definition of

political committee “need only encompass organizations that are under the

control of a candidate or the major

purpose of which is the nomination or

election of a candidate” and does not

“reach groups engaged purely in issue

discussion.” Buckley v. Valeo, 424

U.S. 1, 79 (1976).

Federal Register

Federal Register notices are

available from the FEC’s Public

Records Office, on the FEC web

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

register.htm and from the FEC

faxline, 202/501-3413.

Notice 2004-6

Political Committee Status;

Notice of Proposed Rulemaking

(69 FR 11736, March 11, 2004)

(continued on page 4)
Federal Election Commission RECORD April 2004

4

Coordination

Under the Act and Commission

regulations, expenditures that are

coordinated with a candidate or

political party committee are in-kind

contributions to that candidate or

party committee, or they may be

coordinated party expenditures on

behalf of a candidate. See 11 CFR

109.20(a) and (b), 109.21 and

109.37. The Commission’s determinations in this opinion are based on

the assumption that ABC’s activities

are not coordinated with a federal

candidate, authorized committee,

political party committee or the

agents of any of these.2

Neither the Act nor Commission

regulations expressly address

coordination with other political

committees or with 527 political

organizations or section 501(c)(3)

organizations. See 2 U.S.C.

§441a(a)(7)(B) and 11 CFR Part

109. Thus, ABC is not categorically

prohibited from consulting with, or

acting in concert with, these other

organizations. However, depending

on the particular circumstances,

such cooperation could be a factor

leading to a conclusion that ABC

controls or is otherwise affiliated

with such a group, that the group is

acting as ABC’s agent or that the

group has made an in-kind contribution to ABC.

Communications

Under the Bipartisan Campaign

Reform Act of 2002 (BCRA), an

electioneering communication is a

“broadcast, cable, or satellite”

communication that refers to a

clearly identified federal candidate,

is publicly distributed for a fee

within 60 days before a general

election or 30 days before a primary

election and, in the case of a communication that refers to a Congressional candidate, is “targeted to the

2 The Commission also concluded that a

prior contribution by ABC to a candidate, in and of itself, does not establish

that ABC’s GOTV activities are

coordinated with the candidate.

Regulations

(continued from page 3)

oppose any candidate for that office

or that promote or oppose a political

party.

Other issues. In addition, the

NPRM proposes rules to identify

more specifically the funds that a

nonfederal committee may convert

to federal funds when it becomes a

federal committee and to amend the

allocation regulations governing

separate segregated funds and

nonconnected committees with

federal and nonfederal accounts.

The proposed allocation rules would

address a committee’s payments for

activities that might be included in

the definition of “expenditure,” as

described above, and also propose a

minimum federal percentage for

certain expenses. Finally, the NPRM

proposes revisions to the regulations

that bar corporations and labor

organizations from making disbursements for certain” “partisan”

communications outside of their

restricted class.

Public Comments

The deadline for public comments on this NPRM is April 5 for

those who wish to testify at the

public hearing and April 9 for all

other commenters. Comments must

be submitted, in either written or

electronic form, to Mai T. Dinh,

Acting Assistant General Counsel,

and may be sent by:

• E-mail to

politicalcommitteestatus@fec.gov

(e-mailed comments must include

the commenter’s full name, e-mail

address and postal address);

• Fax to 202/219-3923 (send a

printed copy follow-up to ensure

legibility); or

• Overnight mail to the Federal

Election Commission, 999 E Street

NW, Washington DC, 20436.✦

—Amy Kort

Advisory

Opinions

AO 2003-37

Nonconnected PAC’s Use of

Nonfederal Funds for

Campaign Activities

Americans for a Better Country

(ABC), a nonconnected political

committee with federal and

nonfederal accounts, must use funds

from its federal account to pay for

communications that meet the

criteria for an electioneering communication and for public communications that promote, attack, support

or oppose a clearly identified federal

candidate, even if those communications do not expressly advocate the

election or defeat of a federal

candidate.1

 In addition, ABC’s

planned voter drive activities are

entirely or in part for the purpose of

influencing a federal election and

must be paid for entirely with

federal funds or allocated between

federal and nonfederal funds under

Commission regulations. Finally,

with respect to fundraising, federal

candidates and officeholders may

speak at ABC’s federal and

nonfederal fundraising events and

may solicit contributions to ABC’s

federal and nonfederal accounts so

long as they only solicit contributions and donations that are within

the limits and prohibitions of the

Federal Election Campaign Act (the

Act).

1 In this opinion, the Commission did

not address the legal status of organizations that are not political committees

under the Act, including organizations

operating under section 501(c)(3) and

section 501(c)(4) of the Internal

Revenue Code. The Commission will

address the definition of “political

committee” in a rulemaking. See

related article on political committee

status, page 1.
April 2004 Federal Election Commission RECORD

5

relevant electorate.” 2 U.S.C.

§434(f)(3)(A)(i) and 11 CFR

100.29. However, when a political

committee makes a communication

that would otherwise meet the

definition of “electioneering communication,” that communication is

treated as an expenditure and must

be reported as such.3

 Thus, ABC

must use federal funds to pay for

these communications.

Moreover, if ABC funds a

communication that does not have

all the characteristics of an electioneering communication but refers to

a clearly identified federal candidate

and promotes, attacks, supports or

opposes that candidate, it still must

treat the costs of the communication

as an expenditure and pay those

costs entirely from its federal

account. For example, a communication by ABC that identifies

federal candidates and states that

those candidates have “led the fight

in Congress for a stronger defense

and stronger economy” would

promote, support, attack or oppose

those clearly identified federal

candidates. If made by a political

committee, this communication

would be for the purpose of influencing a federal election and thus,

as explained above, must be reported as an “expenditure” even

though it does not contain express

advocacy. 2 U.S.C. §431(9).4

Voter Registration, GOTV and

Voter Identification Activities

ABC proposes to fund certain

activity that may be paid for with a

mix of federal and nonfederal funds.

Commission regulations provide

that a political committee with

separate federal and nonfederal

accounts must make all disbursements, contributions, expenditures

and transfers in connection with any

federal election from its federal

account. 11 CFR 102.5(a)(1)(i).5

 For

nonconnected political committees,

expenditures such as in-kind contributions and independent expenditures made on behalf of more than

one clearly identified federal

candidate must be allocated to each

such candidate according to the

benefit reasonably expected to be

derived, e.g. by the space or time

devoted to each candidate in a

communication as compared to the

total space or time devoted to all the

candidates. 11 CFR 106.1. This rule

also applies to allocating payments

involving both expenditures on

behalf of one or more clearly

identified federal candidates and

disbursements on behalf of one or

more clearly identified nonfederal

candidates. 11 CFR 106.1(a).

For communications by a

nonconnected political committee

that are for voter identification,

voter registration or get-out-the-vote

purposes (GOTV) that are not

coordinated with a candidate and

that do not refer to any clearly

identified federal candidate, Commission regulations require the use

of at least some federal funds

because these communications are

in part for the purpose of influencing a federal election. 11 CFR 106.6

Nonconnected committees must

allocate expenses for these activities

between their federal and nonfederal

accounts based on the ratio of

federal expenditures to total federal

and nonfederal disbursements made

by the committee during the twoyear federal election cycle.

Voter registration and GOTV

public communications that expressly advocate the election or

defeat of or otherwise promote,

support, attack or oppose a clearly

identified federal candidate. ABC

intends to include in its voter

registration and get-out-the-vote

efforts messages that contain

specific phrases such as “vote for

George W. Bush for President” or

“It’s your duty to register to vote so

that you can support George Bush’s

reelection as President of the United

States.” These communications

constitute express advocacy.6

 11

CFR 100.22(a). Other messages

refer directly to an explicit act of

support for a clearly identified

candidate, such as “If you care

about keeping the strong defense

President Bush has put in place, go

out and vote November 2.” These

messages promote, support, attack

or oppose a clearly identified federal

candidate. Still other planned

messages promote, support, attack

or oppose a clearly identified federal

candidate in a different way, including messages such as “President

3 See Electioneering Communications;

Final Rules, 67 FR 65190, 65197

(October 23, 2002).

4 Moreover, there is no basis under

Commission regulations for allocating

the costs of this communication

between ABC’s federal and nonfederal

accounts, because the communication

refers only to federal candidates. See

11 CFR 106.1 and 106.6.

5 Allocation by state, district and local

party committees is also governed by

11 CFR Part 300.

6 Specifically, 11 CFR 100.22(a)

provides that “expressly advocating”

means any communication that “[u]ses

phrases such as ‘vote for the President,’ ‘re-elect your Congressman,’

‘support the Democratic nominee,’

‘cast your ballot for the Republican

challenger for U.S. Senate in Georgia,’

‘Smith for Congress,’ ‘Bill McKay in

’94,’ ‘vote Pro-Life’ or ‘vote proChoice’ accompanied by a listing of

clearly identified candidates described

as Pro-Life or Pro-Choice, ‘vote

against Old Hickory,’ ‘defeat’ accompanied by a picture of one or more

candidate(s), ‘reject the incumbent,’ or

communications of campaign slogan(s)

or individual word(s), which in context

can have no other meaning than to urge

the election or defeat of one or more

clearly identified candidate(s), such as

posters, bumper stickers, advertisements, etc. which say ‘Nixon’s the

One,’’ ‘Carter ’76,’ ‘Reagan/Bush’ or

‘Mondale!’ . . .”

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

6

mention specific candidates but

encourage the support of candidates

associated with particular issues. 11

CFR 106.6(b)(2)(iii). For example,

a communication might state that

“From the war on terror, to cutting

taxes, to improving education—we

all have a duty to elect leaders who

put America first and not the liberal

special interest groups.”

In other cases, the communication might simply involve an

individual calling on behalf of ABC

and asking the recipient to vote on

November 2, without words encouraging support for candidates of any

party or associated with any position

on any issue.

In either case, the communication

does not mention a clearly identified

federal candidate and, thus, may be

paid for with entirely federal funds

or allocated between ABC’s federal

and nonfederal accounts. 11 CFR

106.6.8

Fundraising for voter registration and GOTV. ABC plans to fund

voter registration and GOTV

activities with money that was

raised through solicitations that

mention a specific federal candidate,

even though the eventual voter

registration or GOTV communication does not. For example, the

solicitation may say “Give money to

an effort that will help President

Bush and Republican candidates,”

while the subsequent GOTV communication states “Go out and vote.

The election is important. It’s your

civic duty.”

Under the Act, a contribution

includes “any gift, subscription, loan

advance, or deposit of money or

anything of value for the purpose of

influencing any election for Federal

office.” 2 U.S.C. §431(8). The

solicitations described above

indicate that the funds will be used

to promote or support a clearly

identified federal candidate and do

not identify any other federal or

nonfederal candidates or elections.

Based on these facts, these funds are

being raised to influence a federal

election. Therefore, the contributions raised will be subject to the

contribution limits and source

prohibitions of the Act, and ABC

may not raise nonfederal funds

using those fundraising messages.9

To avoid the receipt of contributions

in violation of the Act, ABC should

indicate in its solicitations that it

may accept only contributions

within the limitations and prohibitions of the Act. See 11 CFR

102.5(a)(2)(iii).

The subsequent voter registration

or GOTV messages described above

will not refer to a federal candidate,

a political party or generically to

candidates supporting positions on

specific issues. They do not have to

be funded entirely with federal

funds. However, these subsequent

messages must be funded as allocable generic voter drive expenses.

11 CFR 106.6(c).10

Advisory Opinions

(continued from page 5)

8 The Commission’s analysis of these

types of communications is not dependent upon whether the communications

are targeted to geographic areas or

demographic voter groups that have

been identified as Republican based on

earlier voter identification efforts.

9 These communications are not a

mixed federal/nonfederal fundraising

activity and therefore are not subject to

11 CFR 106.6(d).

10 The Commission notes that the

definition of “generic voter drives” in

11 CFR 106.6(b)(2)(iii) includes”

“voter identification, voter registration,

and get-out-the-vote-drives, or any

other activities that urge the general

public to register, vote or support

candidates of a particular party or

associated with a particular issue,

without mentioning a specific candidate.” A plain reading of this language

indicates that the phrase “candidates of

a particular party or associated with a

particular issue” applies to the word

“support ” but does not apply to the

other activities mentioned in the

regulation.

Bush has led the fight in Congress

for a stronger defense and economy.

Call him and tell him to keep

fighting for you.”

The messages that promote or

support President Bush’s election

must be paid for entirely with

federal funds since he is the only

candidate clearly identified. 11 CFR

106.1. Communications that clearly

identify both federal and nonfederal

candidates would require allocation

among the candidates, with federal

funds used to pay for the portion

attributable to the federal candidates.

Communications that clearly

identify one federal candidate and

expressly advocate his election

while at the same time urging

generic support for the entire party

ticket (for instance, with a reference

to “the entire Republican team”),

may be paid for with a portion of

nonfederal funds. In these communications, part of the message is

attributable to the clearly identified

candidate according to the benefit

reasonably expected to be derived,

and the remaining generic part of

the message is allocable between

ABC’s federal and nonfederal

accounts. See 11 CFR 106.1(a) and

106.6. ABC’s generic voter drives

that do not mention a specific

candidate must be paid with entirely

federal funds or allocated. 7 11 CFR

106.6.

Voter registration and GOTV

public communications that do not

mention a clearly identified federal

candidate. ABC also plans to make

public communications that do not

7 The Commission accepts the representation that ABC is not established,

financed, maintained or controlled by a

national, state, district or local party

committee. Therefore, the provisions of

2 U.S.C. §441i that turn on those types

of federal election activity by party

committees do not apply to ABC as if it

were a party committee.
April 2004 Federal Election Commission RECORD

7

Voter identification communications that clearly identify a federal

candidate and ask questions in a

manner that promotes his candidacy. ABC plans to fund mass

mailings and telephone banks to

identify voters, which candidates

they support and which issues

motivate them. The message will

contain several questions, such as:

• “Do you believe your taxes are too

high?”

• “Are you in favor of improving

education?”

• “Are you in favor of President

Bush’s efforts to lower taxes?”

The communication will finish

with a question as to whether the

reader or listener intends to vote on

November 2. No other candidate is

mentioned. This communication

promotes and supports President

Bush by referencing his “efforts to

lower taxes,” and thus, it must be

paid for entirely with federal funds.

Fundraising

Fundraising by federal candidates and officeholders. A federal

candidate or officeholder may solicit

funds for ABC’s federal account so

long as he or she only asks for

federally permissible funds, and

may solicit funds for ABC’s

nonfederal account so long as he or

she only asks for funds that are

within the Act’s contribution limits

and source prohibitions. See AOs

2003-36, 2003-5 and 2003-3.

Under Commission regulations,

contributions may be deposited in

ABC’s federal account if they:

• Were designated for ABC’s federal

account;

• Result from a solicitation that

expressly states that the contribution will be used in connection

with a federal election; or

• Are from contributors who have

been informed that all contributions are subject to the prohibitions

and limitations of the Act. See AO

2000-25.

Appearance at nonfederal

fundraisers. Federal candidates/

officeholders may attend and speak

at fundraising events for ABC’s

nonfederal account that raise funds

outside the Act’s contribution limits

and source prohibitions, but they

may not solicit funds that are

outside the limits and prohibitions

of the Act.11 AOs 2003-36 and

2003-03.

If a federal candidate or officeholder, or an agent of either, makes

a solicitation, that solicitation must

include or be accompanied by a

clear and conspicuous message

indicating that the individual is only

asking for funds that comply with

the limits and prohibitions of the

Act. He or she may also give a

speech soliciting funds generally,

without mentioning specific

amounts, sources or limitations, so

long as written notices are clearly

and conspicuously displayed at the

event indicating that the federal

candidate/officeholder is soliciting

only federally permissible fundsor

if a public oral disclaimer is made.

See AOs 2003-36 and 2003-03.

Federal candidates/officeholders

as featured speakers, or as hosts, for

fundraising events for ABC’s

nonfederal account. The Act’s and

regulation’s restrictions apply to an

invitation to a nonfederal fundraiser

when:

• The invitation constitutes a solicitation for funds; and

• A federal candidate/officeholder

agreed to be featured or named in

the invitation.

The mere mention of a federal

candidate/officeholder in the text of

a written invitation does not,

without more, constitute a solicitation or direction of nonfederal funds

by that person. However, if the

invitation is a solicitation, a

candidate’s agreement to be mentioned in the invitation as an honored guest, featured speaker or host

constitutes a solicitation by the

candidate. Thus, if a candidate

agrees to be named in a fundraising

solicitation as an honored guest,

featured speaker or host, or if the

invitation constitutes a solicitation

for any other reason, then the

solicitation must contain a clear and

conspicuous statement that the

entire solicitation is limited to funds

that comply with the Act’s limits

and prohibitions.12 See AOs 2003-

36 and 2003-03.

Written solicitations for ABC’s

nonfederal account. Federal candidates/officeholders may not sign

written solicitations for ABC’s

nonfederal account that raise funds

outside the Act’s contribution limits

and source prohibitions. 2 U.S.C.

§441i(e)(1)(B); 11 CFR 300.62; AO

2003-03.

Solicitations using federal

candidates’ names. ABC may use

the names of specific federal

candidates in its solicitations for

federal funds, stating, for example,

“ABC supports President Bush’s tax

cuts to stimulate the economy. Give

to ABC so that we can support

President Bush’s agenda.” ABC

may make such statements so long

as it does not coordinate the communications with any candidates

and the candidates will not solicit,

receive, direct, transfer, spend or

disburse funds outside of the limits,

11 Commission regulations establish

that a federal officeholder or candidate

will not be held liable for soliciting

funds in violation of section

441i(e)(1)(B) or section 300.62 merely

by virtue of attending or participating

in any manner in connection with a

fundraising event at which nonfederal

funds are raised.

12 Even if the invitation includes a

disclaimer, a federal candidate or

officeholder must still comply with the

disclaimer requirements described

above if he or she solicits funds at the

actual event.

(continued on page 8)
Federal Election Commission RECORD April 2004

8

Advisory Opinions

(continued from page 7)

AO 2004-2

Contributions from

Testamentary Trusts

The National Committee for an

Effective Congress (NCEC), a

registered nonconnected committee,

may accept contributions from

testamentary trusts established by

individuals for the purpose of

making contributions to NCEC.

Background

NCEC plans to accept contributions from testamentary trusts. The

terms of the trusts would limit the

trusts to making the maximum

annual contribution permitted under

the Federal Election Campaign Act

(the Act). The aggregated contributions from all trusts created by the

testator would not exceed the

aggregate biennial limit on contributions from individuals.

A contributing testamentary trust

will set as a condition of its contribution that NCEC may not pledge,

assign or otherwise obligate anticipated contributions in order to

realize in whole or in part the

present value of future contributions. NCEC will not knowingly

accept contributions from any

testamentary trust where the trustee

exercises any discretion over

whether a contribution is made or

over the amount of a contribution.

NCEC will have no involvement in

the administration of the testamentary trust, and trusts from which

NCEC would accept contributions

would be created and funded only

through the estates of individuals

who were legally qualified at the

time of their deaths to make contributions under the Act.

Analysis

In past advisory opinions, the

Commission concluded that the

testamentary estate of a decedent is

the successor legal entity to the

testator and qualifies as a “person”

under the Act, subject to the same

limitations and prohibitions applicable to the decedent in the his or

her lifetime. Thus, a political

committee may accept contributions

from an individual’s estate made

through a testamentary trust, which

in aggregate do not exceed $5,000

per calendar year. AOs 1999-14

and 1988-8; see also AO 1983-13.

In AO 1999-14, the Commission

overturned its previous determination that a political committee may

receive a lump sum testamentary

gift in excess of $5,000. In that

opinion, the Commission concluded

that such a testamentary gift would

amount to a contribution for the

entire bequest at the time the funds

were distributed from the estate and

into the political committee’s

escrow account, and therefore

would constitute an excessive

contribution in the amount that

exceeded $5,000.1

 Under the

Commission’s regulations, a contribution is “made” when the contributor delivers the contribution to the

political committee. 11 CFR

110.1(b)(6). The Commission’s

determination that a testamentary

gift in the form of a lump sum

bequest is unlawful under the Act

hinged on the fact that the political

committee would control the entire

1 AO 1999-14 superseded AO 1988-8

and AO 1983-13 to the extent that those

advisory opinions permitted acceptance

of excessive contributions into an

escrow account, but left intact portions

of those advisory opinions permitting a

testamentary trust to make, and a

political committee to accept, a

contribution not exceeding the contribution limits in 2 USC §441a(a)(1).

prohibitions or reporting requirements of the Act.

However, ABC may not solicit

nonfederal funds in this way. If

ABC uses the names of specific

federal candidates in a manner that

conveys its plan to use those funds

to support or oppose specific federal

candidates, then the funds raised

will be contributions subject to the

Act’s contribution limits and source

prohibitions. See 2 U.S.C. §431(8).

Invitations to issues forum and

nonfederal fundraiser. ABC may

sponsor an issues forum at which

federal officeholders or candidates

speak, but no funds are raised, and

then adjourn later in the same day to

a different location for a nonfederal

fundraiser. However, if the invitation to the issues forum and the

fundraiser are included in the same

mailing, then the entire mailing

must comply, as appropriate, with

the disclaimer requirements for

federal candidates/officeholders

who are named in invitations as

featured speakers or hosts for a

nonfederal fundraising event.

Donations from foreign nationals. ABC may not raise and spend

funds from its nonfederal accounts

from foreign nationals or from

foreign corporations or labor

organizations for voter registration

and voter mobilization activities.

The Act, as amended by the BCRA,

prohibits foreign nationals from,

among other things, directly or

indirectly making a contribution or

donation of money or other thing of

value in connection with a federal,

state or local election.13 2 U.S.C.

§441e(a)(1)(A); 11 CFR 110.20.

Also, it is unlawful for a person to

solicit, accept or receive a contribution or donation from a foreign

national. 2 U.S.C. §441e(a)(2). See

also 11 CFR 110.20(g) and (h).

13 This prohibition is not limited to

elections for political office.

Accordingly, ABC must not deposit

such funds into its federal or

nonfederal account. Nothing in the

Act or Commission regulations

creates an exception on the basis of

the political committee’s intended

use for the foreign national funds.

Date Issued: February 18, 2004;

Length: 21 pages.✦

—Amy Kort
April 2004 Federal Election Commission RECORD

9

amount of the testamentary gift,

even when placed in escrow.

In this case, NCEC may accept

contributions under the facts and

circumstances described above

because the testamentary trust,

unlike an escrow account, is beyond

NCEC’s control. However, NCEC

may accept contributions only from

trusts for which neither NCEC nor

an officer, director, employee,

member, agent or affiliated organization of NCEC serves as trustee.

This condition will ensure that

NCEC does not exercise any control

over the undistributed trust funds or

interest amounts. NCEC must report

contributions accepted from testamentary trusts at the time of receipt

and disclose the name of both the

trust and the decedent. AO 1988-8.

Date Issued: February 26, 2004;

Length: 4 pages.✦

—Amy Pike

Alternative Disposition of

Advisory Opinion Request

AOR 2004-5

On February 27, 2004, the

requesters withdrew Advisory

Opinion Request 2004-5, which had

posed questions concerning the

voter mobilization and fundraising

activities of a nonconnected political

committee with federal and

nonfederal accounts.✦

—Amy Kort

Advisory Opinion Requests

AOR 2004-8

Severance package provided by

corporation to employee who

resigns to run for Congress (American Sugar Cane League, February

11, 2004)

AOR 2004-9

Political committee’s status as

state party committee (The Green

Rainbow Party, February 23,

2004)✦

Court Cases

FEC v. California

Democratic Party, et al.

On February 13, 2004, the U.S.

District Court for the Eastern

District of California granted the

Commission’s motion for summary

judgment in this case, finding that

the defendants violated the Federal

Election Campaign Act (the Act)

by:

• Using nonfederal funds to pay for

mass mailings and radio advertisements that constituted express

advocacy of a clearly identified

federal candidate;

• Failing to include the required

disclaimers; and

• Failing to report the ads as independent expenditures.

Background

Under the Act, political party

committees may only spend funds

that are consistent with the limits

and prohibitions of the Act to

influence a federal election. Among

other restrictions, the Act prohibits

corporations and labor unions from

making any contributions in connection with a federal election, and also

prohibits a political committee from

receiving such contributions. 2

U.S.C. §441b. See also 2 U.S.C.

§§431(8), 441a, 441(b), 441(c),

441(e), 441(f) and 441(g); 11 CFR

parts 100, 110, 114 and 115. A party

committee that maintains both

federal and nonfederal accounts may

pay for some mixed federal/

nonfederal activities with a combination of federal and nonfederal

funds using the allocation rules set

forth in Commission regulations.1

However, any expenditure made by

a political party committee for

activities that expressly advocate the

election or defeat of a clearly

identified federal candidate must be

made with federally permissible

funds.

In the 22nd Congressional District

of California, a special general

election was held on March 10,

1998, to fill a House seat left vacant

after the death of Walter Capps.

This federal office was the only

office on the ballot for the special

election, and Lois Capps was the

only Democratic candidate on the

ballot. The California Democratic

Party (CDP) paid $99,097 for direct

mailings and radio advertisements

that contained statements such as

“Continue the Walter Capps Tradition” and “Vote Democratic” in the

“Special Election, Tuesday, March

10.” In its FEC disclosure reports,

the CDP reported the expenditures

for these communications as mixed

federal/nonfederal activity, and it

paid for the costs of these communications with funds from both its

1 The defendants’ activities described in

this case occurred before the Bipartisan

Campaign Reform Act of 2002 took

effect. Thus, the court considered the

statutory and regulatory provisions in

effect at that time.

Wilkinson v FEC

On February 3, 2004, the U.S.

District Court for the District of

Utah, Central Division, granted the

FEC and Clark Wilkinson’s joint

motion to dismiss this case. Mr.

Wilkinson had asked the court to set

aside the Commission’s final

determination that, as treasurer of

the Friends of Bob Gross Committee, he failed to file the Committee’s

July and October 2002 quarterly

reports. Mr. Wilkinson had also

asked the court to set aside the

Commission’s assessment of $5,400

in civil money penalties under its

administrative fines regulations. 11

CFR 111.30-111.45. See the November 2003 Record, page 8.

U.S. District Court for the

District of Utah, Central Division,

2:03-CV-00734.✦

—Amy Kort

(continued on page 10)
Federal Election Commission RECORD April 2004

10

Because these ads expressly

advocated the election of a clearly

identified federal candidate and

were not coordinated with any

candidate, the court concluded that

they were independent expenditures.

Thus, CDP was required to pay for

them with federal funds and include

a disclaimer stating who paid for the

communication and that it was not

authorized by any candidate. CDP

was also required to report the

payments as independent expenditures on its FEC disclosure reports.

The court granted the FEC’s request

for partial summary judgment,

declaring that the defendants

violated the Act by paying for the

ads in part with funds from CDP’s

nonfederal account and failing to

include a complete disclaimer and

properly report the ads. The court

denied the defendants’ motion for

summary judgment.

U.S. District Court for the

Eastern District of California, S-03-

0547 FCD DAD.✦

—Amy Kort

Court Cases

(continued from page 9)

New Litigation

Akins et al. v. FEC

On November 25, 2003, James E.

Akins and several other individuals

filed a complaint with the U.S.

District Court for the District

Columbia requesting that the court

find that the Commission acted

contrary to law when it dismissed

the plaintiff’s administrative complaint dated May 20, 2002 (MUR

5272). The administrative complaint

alleged that the American Israel

Public Affairs Committee (AIPAC)

failed to disclose its candidatecoordinated express advocacy

communications as required by the

Federal Election Campaign Act (the

Act). 2 U.S.C. §431(9)(B)(iii). In

their complaint filed with the

District Court, the plaintiffs allege

that the FEC’s dismissal of the

complaint against AIPAC has

harmed the electoral process by not

enforcing the provisions of federal

law that require public disclosure of

such communications. The plaintiffs

allege that they also have been

harmed by being denied their legal

right to access such information and

use it to inform policymakers and

the general public about the activities and influence of AIPAC.

Background. The Act requires

incorporated membership organizations to report disbursements for

express advocacy communications

to their members when the cost of

such communications aggregates

over $2,000 for all candidates

running in the same election. 2

U.S.C. §431(9)(B)(iii).

In its investigation MUR 2084,

which resulted from a previous

complaint filed by the plaintiffs

against AIPAC, the Commission

found that:

• AIPAC was a membership organization under federal law; and

• AIPAC’s meetings with candidates

and its sharing of campaign

information with its members

demonstrated a serious interest in

influencing federal elections.

However, in MUR 2804, the

Commission made no determination

regarding whether the cost of

AIPAC’s communications exceeded

$2,000 in connection with any

election.

On May 20, 2002, the plaintiffs

filed an additional complaint, MUR

5272, alleging that the facts found in

MUR 2804 indicated that AIPAC

failed to disclose the cost of having

members travel to and attend

meetings with candidates to discuss

their campaigns and issues once

those costs exceeded $2,000. In

MUR 5272, the plaintiffs asked that

the Commission:

• Find through investigation that

AIPAC’s costs for advocacy

communications to its members

exceeded $2,000 during an election; and,

• Order AIPAC to disclose the cost

of such communications with the

federal and nonfederal accounts. Of

the $99,097 spent on the communications, $77,281 came from the

CDP’s nonfederal funds. The ads

included disclaimers stating that

they were paid for by CDP, but did

not state whether the ads were

authorized by any candidate or

candidate’s committee. See the May

2003 Record, page 5.

Court Decision

The only contested issue before

the court was whether Lois Capps

was “clearly identified” in the

defendants’ ads. The court found

that Ms. Capps was clearly identified in the ads under Buckley v.

Valeo, 424 U.S. 1 (1976) and FEC

v. Furgatch, 807 F.2d 875 (9th Cir.

1987).2

 In FEC v. Furgatch, the

appeals court held that a communication is “express advocacy” under

the Act if, “when read as a whole,

and with limited reference to

external events,” it is “susceptible of

no other reasonable interpretation

but as an exhortation to vote for or

against a specific candidate.” In this

case, the court found that when the

language of the ads was taken as a

whole, “including the fact that the

March 10th special election was a

single-office, federal-only election

with one Democratic candidate,” the

ads “clearly identify a candidate

under Buckley and Furgatch.” The

court reasoned that because the ads’

directive to “vote Democratic” in

the “March 10th special election” left

only one action for the public to

take to follow the ads’ instructions,

“reasonable minds could not dispute

that the subject Advertisements

urged readers to vote for Lois Capps

in the March 10 special election.”

2 The FEC moved for summary judgment only as to whether CDP violated

the Act and not as to any civil penalty

or other remedy the court may order as

a result.
April 2004 Federal Election Commission RECORD

11

Commission in accord with federal

law.

The Commission dismissed MUR

5272 as a matter of prosecutorial

discretion. The Commission noted

that the plaintiffs’ complaint did not

cite any specific instances of

communications containing express

advocacy made by AIPAC and that

they could not substantiate the claim

that AIPAC had engaged in membership communications subject to

the reporting requirements of the

Act.

Court Complaint. The plaintiffs

contend that the Commission’s

dismissal of MUR 5272 was arbitrary, capricious and contrary to

law. Plaintiffs claim that the evidence gathered in the investigation

of MUR 2804 is sufficient to prove

that AIPAC made communications

to its members in excess of $2,000

for an election.

The plaintiffs ask the court to:

• Assume jurisdiction of this case;

• Declare the Commission’s dismissal of the plaintiff’s administrative complaint to be arbitrary,

capricious and contrary to law;

• Remand the matter to the Commission and order the agency to decide

on the basis of the evidence

presented in MUR 2804 whether

AIPAC has made unreported

membership communications;

• Award plaintiffs costs and attorneys’ fees; and

• Afford plaintiffs such additional

relief as the court deems just.

U.S. District Court for the

District of Columbia,

1:03CV02431.✦

—Gary Mullen

John Hagelin, et. al. v. FEC

On February 11, 2004, John

Hagelin, Ralph Nader, Patrick

Buchanan, Howard Phillips, Winona

LaDuke, the Natural Law Party, the

Green Party of the United States and

the Constitution Party asked the

U.S. District Court for the District

Enforcement Query

System Now Available

on FEC Web Site

 The FEC recently launched its

Enforcement Query System

(EQS), a web-based search tool

that allows users to find and

examine public documents

regarding closed Commission

enforcement matters. Using

current scanning, optical

character recognition and text

search technologies, the system

permits intuitive and flexible

searches of case documents and

other materials.

 Users of the system can search

for specific words or phrases

from the text of all public case

documents. They can also

identify single matters under

review (MURs) or groups of

cases by searching additional

identifying information about

cases prepared as part of the Case

Management System. Included

among these criteria are case

names and numbers,

complainants and respondents,

timeframes, dispositions, legal

issues and penalty amounts. The

Enforcement Query System may

be accessed on the Commission’s

web site at www.fec.gov.

 Currently, the EQS contains

complete public case files for all

MURs closed since January 1,

2002. In addition to adding all

cases closed subsequently, staff is

working to add cases closed prior

to 2002. All MURs closed in

2001 will be included in the

system by July 2004, and cases

closed in 2000 will be available

by the end of 2004. Other FEC

compliance actions (Alternative

Dispute Resolution cases and

Administrative Fines) will also be

included in the system at a later

date.

of Columbia to find that the Commission failed to act expeditiously

on an administrative complaint

dated June 17, 2003. The administrative complaint alleged that the

Commission on Presidential Debates, Inc. (CPD) violated the

Federal Election Campaign Act (the

Act) in 2000, that it continues to

violate the Act and that its actions

have a direct impact on the 2004

Presidential election cycle currently

underway. Specifically, the judicial

complaint alleged that CPD:

• Has a de facto monopoly on the

nationally televised Presidential

and Vice-Presidential debates;

• Is unlawfully raising corporate

monies that advance and stage

those debates to the benefit of the

two major parties; and

• Exercises unlawfully partisan

control over the national candidate

debates and undermines the

plaintiffs’ rights.

The judicial complaint noted the

need for expeditious action as the

first of the three Presidential debates

and one Vice-Presidential debate for

the 2004 elections have been

scheduled by the CPD and will be

held beginning September 30, 2004.

Background. The CPD, a

nonprofit, 501(c)(3) corporation,

sponsored four nationally televised

debates between the Presidential and

Vice-Presidential candidates of the

Republican and Democratic Parties

in the 2000 elections. The Act

exempts nonpartisan activity

designed to encourage individuals to

vote or to register to vote from the

definition of regulated expenditures.

2 U.S.C. §431(9)(B)(ii). The

Commission has interpreted this

statute to permit nonprofit 501(c)(3)

or (c)(4) organizations that do not

endorse, support or oppose political

candidates or parties to stage

candidate debates per 11 CFR

110.13(a); see 11 CFR 114.4 (f).

Additionally, such a qualifying

(continued on page 12)
Federal Election Commission RECORD April 2004

12

The plaintiff asks the court,

among other things, to:

• Certify this action as a class action

against all individuals and political

committees who are not Alaska

residents and who have made or

may make contributions to a

Senate candidate in Alaska;

• Convene a three-judge panel, or

certify the questions raised in this

complaint to the U.S. Court of

Appeals for the District of Columbia pursuant to 2 U.S.C. §437h;

• Enter a declaratory judgment that

the Act severely burdens the

plaintiff’s exercise of his right to

political association to the extent

that it authorizes non-Alaska

residents to contribute to Alaska’s

Senate candidates; and

• Preliminarily and permanently

enjoin the individuals and political

Court Cases

(continued from page 11)

Jim Sykes v. FEC, et al.

On February 24, 2004, Jim

Sykes, the Green Party’s presumptive 27 year old nominee in Alaska’s

November 2 Senate election, filed a

complaint in the U.S. District Court

for the District of Columbia. The

plaintiff asks the court to find

unconstitutional provisions of the

Federal Election Campaign Act (the

Act) that allow non-Alaska residents to make contributions to a

Senate candidate in Alaska’s 2004

general election, either personally or

through political committees. The

plaintiff alleges that these nonresident contributions unconstitutionally burden his First and Fifth

Amendment rights to associate

politically, both as a candidate and a

voter, with other Alaska voters.

1 The term “political committee” means

any committee, club, association or

other group of persons which receives

contributions aggregating in excess of

$1,000 during a calendar year or which

makes expenditures aggregating in

excess of $1,000 during a calendar

year.

nonprofit organization may use its

own funds and accept funds donated

by corporations or labor organizations to defray costs incurred in

staging candidate debates. 11 CFR

114.4(f)(1).

Administrative Complaint. The

plaintiffs alleged that the CPD was

founded and controlled by the

Republican and Democratic Parties

and their representatives. They

argued that the CPD raised significant monies and obtained numerous

corporate co-sponsors of its debates

in 2000, including Philip Morris,

Anhueser-Busch, AT&T and 3Com.

According to the administrative

complaint, because the CPD does

not meet the criteria for a qualifying

organization under 11 CFR 110.13

and 114.4(f)(1), the corporate

monies raised and expended were

illegal contributions and expenditures. Furthermore, the plaintiffs

claim that CPD meets the definition

of political committee under the

Act1

 and is required to register and

report with the FEC.

Court Complaint. The administrative complaint, along with

corroborating exhibits, was filed on

June 17, 2003. As of February 11,

2004, the FEC had taken no final

action on the complaint. The

plaintiffs allege that the FEC’s

inaction causes them direct harm in

that they cannot fully assess their

prospects of running a successful

campaign in a lawful election

process without knowing whether

the CPD will sponsor the major

debates in 2004 to their exclusion.

Additionally, the plaintiffs allege

that they have been denied disclosure information that will assist

them in competing against, and

educating the public about, the

major party candidates in the 2004

elections, including their receipt of

corporate monies through the CPD.

The complaint notes that the FEC

has the authority to obtain the

following remedies through the

conciliation process or through

pursuit of a civil enforcement

action:

• Cause the CPD to cease and desist

all activities as a Presidential and

Vice-Presidential debate staging

organization;

• Cause the CPD to file disclosure

reports for the 2000 and 2004

elections; and

• Impose lawful sanctions and other

remedies that may be appropriate.

Relief. The plaintiffs ask the

court to declare that the FEC’s

failure to act on the administrative

complaint is contrary to law and

direct the FEC to act on the complaint within 30 days. 2 U.S.C.

§437(g)(a)(8)(A) and (C). ✦

—Meredith Trimble

Public Appearances

March 31-April 3, 2004

Center for Responsive Politics

Los Angeles, CA

Robert Biersack

April 2, 2004

Institute of International

Education

Washington, DC

Meredith Trimble

April 4-6, 2004

Association of Private Enterprise

Education

Nassau, Bahamas

Chairman Smith

April 23-24, 2004

Amherst College/Committee for

the American Founding

Amherst, MA

Chairman Smith

April 24, 2004

University of St. Thomas Law

School Federalist Society

St. Paul, MN

Allison Hayward
April 2004 Federal Election Commission RECORD

13

MUR 5197: Contributions

from Congressionally

Chartered Corporations

The Commission recently entered

into conciliation agreements with

the Republican National Committee

(RNC), the National Republican

Senatorial Committee (NRSC) and

the Federal National Mortgage

Association (Fannie Mae), resolving

violations of the Federal Election

Campaign Act (the Act). The

conciliation agreements resulted in

civil penalties totaling $132,000.

The FEC’s investigation stemmed

from a complaint filed by John

Berthoud, President of the National

Taxpayers Union.

Background

The Act prohibits Congressionally chartered corporations from

making contributions or expenditures in connection with any federal

or nonfederal election to political

office. 2 U.S.C. §441b(a). However,

the law in effect at the time provided for an exception for donations

to national and state party committees if the donations were specifically designated to pay for the

construction or purchase of an office

facility that was not acquired for the

purpose of influencing the election

of any candidate in any particular

federal election—the so-called

“building fund” exemption. See

former 2 U.S.C. §431(8)(B)(viii)

and AOs 2001-12, 2001-1, 1998-8,

1997-14 and 1983-8.1

Conciliation Agreements

According to the conciliation

agreements, from 1998 to 2000

Fannie Mae contributed $51,470 to

the Republican Governors’ AssociaCompliance tion, and these funds were deposited

in the Republican National State

Elections Committee account of the

RNC, which was not a building fund

account. The RNC also improperly

deposited $250,000 received from

the Federal Home Loan Mortgage

Corporation (Freddie Mac) in its

general nonfederal account in 2001,

even though the donation had been

properly designated for the building

fund.

Fannie Mae also made contributions of $50,000 to the 1999 SenateHouse Dinner Committee and

$100,000 to the 2000 House-Senate

Dinner Committee that did not

contain contemporaneous building

fund designations. The Dinner

Committees did, however, deposit

these funds in building fund accounts.

The Commission additionally

found that the NRSC improperly

deposited three different donations it

received from Freddie Mac (totaling

$130,250) into nonfederal accounts

not designated as building funds.

These donations were refunded in

2001 ($130,000) and 2003 ($250).

The FEC voted to take no further

action against Freddie Mac but sent

it an admonishment letter regarding

a $3,000 contribution made to the

National Republican Congressional

Committee (NRCC) without a

designation to a building fund. The

$3,000 was properly deposited by

the NRCC.

In their conciliation agreements,

the respondents agreed to cease and

desist from further violations of

section 441b of the Act. Fannie Mae

agreed to pay a $10,000 civil

penalty, the NRSC agreed to pay a

$24,000 penalty and the RNC

agreed to pay a $98,000 penalty.

Documents from this matter are

available through the Enforcement

Query System on the Commission’s

web site at www.fec.gov by entering

5197 under case number.✦

—Amy Kort

1 The Bipartisan Campaign Reform Act

of 2002, which took effect November 6,

2002, removed the building fund

exemption for national party committees.

Congressional Committees

Fail to File Pre-Primary

Reports

The Byron for Congress and

McPeek for Congress committees

failed to file 12-Day Pre-Primary

reports for the March 2 primary

elections in California and Maryland, respectively, and Sam Texas

and John Kelley for Congress failed

to file these reports for the March 9

Texas primary.

Prior to the reporting deadlines,

the Commission notified committees involved in these primaries of

their potential filing requirements.

Committees that failed to file the

reports were subsequently notified

that their reports had not been

received and that their names would

be published if they did not respond

within four business days.

The Federal Election Campaign

Act requires the Commission to

publish the names of principal

campaign committees if they fail to

file 12 day pre-election reports or

the quarterly report due before the

candidate’s election. 2 U.S.C.

§437g(b). The agency may also

pursue enforcement actions against

nonfilers and late filers on a caseby-case basis.✦

—Amy Kort

Nonfilers

committees named in this action,

and the members of the classes

they represent, from contributing

to Senate candidates in Alaska and

direct these defendants to seek

refunds of contributions they have

already made.

U.S. District Court for the

District of Columbia,

1:04CV00293.✦

—Amy Kort
Federal Election Commission RECORD April 2004

14

Committees Fined for

Nonfiled and Late Reports

The Commission recently

publicized its final action on 44 new

Administrative Fine cases, bringing

the total number of cases released to

the public to 918, with $1,211,163

in fines collected by the Commission.

Civil money penalties for late

reports are determined by the

number of days the report was late,

the amount of financial activity

involved and any prior penalties for

violations under the administrative

fines regulations. Penalties for late

reports—and for reports filed so late

as to be considered nonfiled—are

also determined by the financial

activity for the reporting period and

any prior violations. Election

sensitive reports, which include

reports and notices filed prior to an

election (i.e., 12 day pre-election,

October quarterly and October

monthly reports), receive higher

penalties. Penalties for 48-hour

notices that are filed late or not at all

are determined by the amount of the

contribution(s) not timely reported

and any prior violations.

The committees and the treasurers are assessed civil money penalties when the Commission makes its

final determination. Unpaid civil

money penalties are referred to the

Department of the Treasury for

collection.

The committees listed in the chart

at right, along with their treasurers,

were assessed civil money penalties

under the administrative fines

regulations.

Closed Administrative Fine case

files are available through the FEC

Press Office, at 800/424-9530 (press

2), and the Public Records Office, at

800/424-9530 (press 3).✦

—Amy Kort

Administrative

Fines

Committees Fined and Penalties Assessed

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

2 This penalty has not been collected.

3 The Commission took no further action in this case.

4 See Greenwood for Congress v. FEC, U.S. District Court for the Eastern

District of Pennsylvania, 03-0307, summarized in the October 2003, Record,

page 13.

5 This penalty was reduced due to the Commission’s intermittent server

problems on the due date.

1. ACA International PAC (ACPAC)

October Quarterly 2002 $3,000

2. ACA International PAC (ACPAC)

12 Day Pre-General 2002 $1,000

3. ACA International PAC (ACPAC)

30 Day Post-General 2002 $3,200

 4. Barham for Congress $01

5. Bexar County Democratic Party $5,0001

 6. Bundgaard for Congress $3,5002

 7. C. Patrick Meece for Congress $9002

8. Candice McElyea for Congress Committee $1,8002

9. Comite Jose Hernandez-Mayoral Comisionado

Residente, Inc., $1,000

10. Committee to Elect Clinton B. LeSueur ____3

11. Committee to Elect Kutsch $1,8002

12. Committee to Elect Madeleine Z. Bordallo 2002

30 Day Post General 2002 $1,8002

13. Committee to Elect Madeleine Z. Bordallo 2002

Year-End 2002 $1,1252

14. Continental Airlines Inc. Employee Fund for a

Better America (FKA Continental Holdings PAC) $2,000

15. Day & Zimmerman, Inc., Federal PAC

(aka DAYPAC-Federal) $1,000

16. Democratic Party of Orange County FED PAC $1,125

17. Donzella J. James for Congress $900

18. Ed Tinsley for Congress $01

19. Eva Clayton Committee for Congress $1,800

20. Fitzgerald for Senate Inc. $1,350

21. Friends of Heidi for Congress $1,8002

22. Friends of Israel PAC (FRIPAC) $1,250

23. Friends of John Conyers $2,1002

24. Friends of Margaret Workman

2003 April Quarterly $1,3502

25. Friends of Margaret Workman

July Quarterly 2003 $1,3501,2

26. Greenwood for Congress ____4

27. Jeff Ballenger for Congress $4001,5

28. Jim Sullivan for Congress $4,050
April 2004 Federal Election Commission RECORD

15

Committees Fined and Penalties Assessed, cont.

29. Kansas City Southern Employee PAC $1,000

30. Keyes 2000 Inc. $1,3502

31. Marvin Scott for U.S. Senate $3,275

32. McLane Company Inc. Federal PAC $1,000

33. Mike Greene For Congress Committee

2003 April Quarterly $6,7502

34. Mike Greene for Congress Committee

July Quarterly 2003 $6,7502

35. Lockheed Martin Employees PAC

February Monthly 2003 $4,500

36. Lockheed Martin Employees PAC

March Monthly 2003 $4,225

37. Maryland Association for Concerned Citizens PAC $900

38. Massachusetts Republican State Congressional Committee $2,450

39. Philip Lowe for Congress April Quarterly 2003 $16,6252

40. Philip Lowe for Congress July Quarterly 2003 $16,6252

41. PAC of Focal Communications Corporation $1,8002

42. Ross for Congress $9,6252

43. Swing States for a Conservative White House PAC, Inc., $1,5002,6

44. Women’s Political Committee—Federal Fund $2,500

2 This penalty has not been collected.

6 This penalty was reduced due to the Commission’s intermittent server

problems and the failure of the Commission’s software manual and web site

to include the “one report per disk” policy.

Alternative

Dispute

Resolution

ADR Program Update

The Commission recently

resolved four additional cases under

the Alternative Dispute Resolution

(ADR) program. The respondents,

the alleged violations of the Federal

Election Campaign Act (the Act)

and the final disposition of the cases

are listed below.

1. The Commission closed the

case involving Friends of Nancy

Kaszak, its treasurer Sharon

Eiseman, Emily’s List, its treasurer

Ellen R. Malcolm and Illinois

Women Vote! regarding alleged

excessive in-kind contributions. The

ADR Office recommended the case

be dismissed and the Commission

agreed to close the file. (ADR 138/

MUR 5249)

2. The Commission closed the

case involving Friends of Margaret

Workman, its treasurer Albert V.

Mays, Jr., Emily’s List and its

treasurer Ellen R. Malcolm regarding alleged excessive in-kind

contributions. The ADR Office

recommended the case be dismissed

and the Commission agreed to close

the file. (ADR 139/MUR 5269)

3. The Commission reached

agreement with Rehberg for Congress and Lorna Kuney, its treasurer, concerning the committee’s

failure to include the required

disclaimer on a highway sign (the

complaint was similar to one filed in

2000 by the same complainant.) The

respondents acknowledged the

omission of the disclaimer and

agreed to pay a $450 civil penalty.

In order to avoid similar violations

in the future, they agree to set up

and maintain in the committee’s

offices guidelines governing federal

election campaign activities, with

particular emphasis on the regulations governing disclaimers. The

committee will also identify one

staff member to serve as FEC

compliance officer. (ADR 140/

MUR 5323)

4. The Commission reached

agreement with the Washtenaw

County Democratic Party and its

treasurer, Barbara R. Fuller, regarding the committee’s failure to

register and report with the FEC.

The respondents acknowledged

violations of the Act and agreed to

pay a $750 civil penalty. In order to

resolve this matter and avoid similar

errors in the future, they agreed to

file the appropriate registration

forms with the FEC and to establish

and maintain a resource file to

provide guidance on the Act’s

requirements. Also, within the next

year, the respondents will send an

appropriate representative to attend

an FEC seminar on federal election

campaign reporting requirements.

(ADR 130/ MUR 5312)✦

—Amy Kort

Commission Certifies

Matching Funds for

Presidential Candidates

On March 1, 2004, the Commission certified $3,421,597.65 in

federal matching funds to six

Presidential candidates for the 2004

Public Funding

(continued on page 16)
Federal Election Commission RECORD April 2004

16

Matching Funds for 2004 Presidential Candidates:

February Certification

Candidate Certification Cumulative

February 2004 Certifications

Wesley K. Clark (D)1 $1,790,626.91 $6,938,619.76

John R. Edwards (D)2 $807,731.99 $4,473,607.23

Richard A. Gephardt (D)3 $303,099.88 $4,002,241.82

Dennis J. Kucinich (D)4 $228,481.67 $3,075,300.72

Lyndon H. LaRouche, Jr. (D)5 $106,500.73 $1,190,099.97

Joseph Lieberman (D)6 $185,156.47 $4,179,217.70

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

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

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

2004.

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

2004.

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

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

2004.

a public grant of $20 million (plus a

cost of living adjustment) for

campaigning in the general election.

For the 2004 general election, the

public grant amount will be $74.62

million. To be eligible to receive

public funding in the general

election, the candidate must limit his

spending to the amount of the grant

and may not accept private contributions for the campaign. Private

donations may, however, be accepted into a separate fund maintained exclusively to pay for legal

and accounting expenses associated

with complying with the campaign

finance law. These legal and accounting expenses are not subject to

the spending limit.✦

—Amy Kort

Sharpton Eligible for

Matching Funds

On March 11, 2004, the Commission certified that Alfred C.

Sharpton’s Presidential primary

committee, Sharpton 2004, is

eligible to receive Presidential

primary matching payments. 26

U.S.C. §9033(a) and (b); 11 CFR

9033.1 and 9033.3.

Under the Presidential Primary

Matching Payment Account Act, the

federal government will match up to

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

primary candidate. A candidate

must establish eligibility to receive

matching payments by raising in

excess of $5,000 in each of at least

20 states (i.e., over $100,000).

Although an individual may contribute up to $2,000 to a primary

candidate, only a maximum of $250

per individual applies toward the

Public Funding

(continued from page 15)

election. Thus far, the six eligible

candidates have been certified

$23,859,087.20. By comparison, in

2000 matching fund payments

during a comparable period went to

eight candidates, totalling

$43,212,364.99.

Presidential Matching Payment

Account

Under the Presidential Primary

Matching Payment Account Act, the

federal government will match up to

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

primary candidate. A candidate

must establish eligibility to receive

matching payments by raising in

excess of $5,000 in each of at least

20 states (i.e., over $100,000).

Although an individual may contribute up to $2,000 to a primary

candidate, only a maximum of $250

per individual applies toward the

$5,000 threshold in each state.

Candidates who receive matching

payments must agree to limit their

spending and submit to an audit by

the Commission. 26 U.S.C.

§9033(a) and (b); 11 CFR 9033.1

and 9033.3.

Candidates may submit requests

for matching funds once each

month. The Commission will certify

an amount to be paid by the U.S.

Treasury the following month. Only

contributions from individuals in

amounts of $250 or less are matchable.

The chart at right lists the amount

certified to each candidate in

January, along with the cumulative

amount that each candidate has been

certified to date.

The Commission has also certified $14,592,000 to each of the two

major political parties, for their

2004 Presidential Nominating

Conventions.

General Election Funding

The Presidential nominee of each

major party may become eligible for
April 2004 Federal Election Commission RECORD

17

$5,000 threshold in each state.

Candidates who receive matching

payments must agree to limit their

spending and submit to an audit by

the Commission.✦

—Amy Kort

0

30

60

90

120

150

94 96 98 00 02 04 600

800

1000

1200

Millions of Dollars Candidates

0

30

60

90

120

150

94 96 98 00 02 04 90

120

150

Millions of Dollars Candidates

Contributions

Number of Candidates

Contributions to House and Senate Candidates from Individuals During

Off Year of Election Cycle—1994-2004

House Candidates Senate Candidates

Congressional Fundraising

Increases in 2003

During the first year of

fundraising under the Bipartisan

Campaign Reform Act’s increased

contribution limits, Congressional

campaign fundraising totaled $390.1

million. The 2003 fundraising totals

represent an increase of 32.2 percent

when compared to totals from 2001,

the last non-election year. One of

the changes in the new law doubled

the individual contribution limit to

$2,000 per candidate per election.

Much of the increase in

fundraising was found in Senate

campaigns, where candidates raised

a total of $166.7 million in 2003, up

72 percent from 2001 levels.

Comparisons between election

cycles are problematic, however,

because different states hold Senate

elections each cycle, and many

small population states held Senate

races in 2002. This year, by contrast, California, New York and

Pennsylvania have Senate campaigns, and Illinois and Florida,

among other states, have open seat

Senate races. Also, some states have

earlier Congressional primaries this

year to correspond with Presidential

primary elections, which may

account for some of the increased

financial activity in 2003.

House candidates raised $223.4

million during 2003, an increase of

12.7 percent from 2001 levels.

Contributions from individuals

remain the largest source of funds

for Congressional candidates. The

$237.6 million raised from individuals in 2003 was 40 percent more

than in 2001, and it represented 61

percent of all fundraising during the

year, up from 58 percent in

2001. The charts below show nonelection year contributions from

individuals to House and Senate

candidates over the past six election

cycles. (Note that, although in some

years fundraising totals may be

similar between House and Senate

races, House races involve significantly more candidates than do

Senate races.)

Contributions from PACs and

other candidate committees, whose

limits were left largely unchanged

under the BCRA, rose 11 percent to

$101.5 million. This amount

represented 26 percent of all receipts, down from 31 percent in

2001. Funds from candidates

themselves totaled $33.1 million or

eight percent of all

fundraising. While campaigns

showed more dependence on

individuals in 2003, the breakdown

of sources of receipts is very similar

to that in 1999, suggesting that the

new contribution limits have not

significantly changed candidates’

reliance on various types of donors

in the first year of the new law’s

implementation.

Statistics

(continued on page 18)
Federal Election Commission RECORD April 2004

18

Campaign Finance Law

Training Conferences

Corporations and their PACs

The FEC will hold a conference

in Washington, DC, for corporations

and their PACs April 22-23, 2004.

Outreach

Date Subject Intended Audience

Roundtable Schedule

April 7 Election Year Reporting for Individuals respon9:30 - 11 a.m. PACs and Party Committees, sible for filing FEC

Reception plus “Meet Your Analyst” reports for PACs and

11-11:30 a.m. reception Parties (Up to 30 may

(Session number 0401A) attend)

April 7 Election Year Reporting for Individuals respon1:30 - 3 p.m. Candidates and their Committees, sible for filing FEC

Reception plus “Meet Your Analyst” reports for Candidate

3-3:30 p.m. reception Committees (Up to 30

(Session number 0401B) may attend)

Reporting Roundtables

On April 7, 2004, the Commission will host two roundtable

sessions on election year reporting,

including new disclosure requirements under the Bipartisan CamStatistics

(continued from page 17)

Additional Information

A press release dated March 3,

2004, contains:

• Summaries for 2004 cycle Congressional campaigns;

• Comparisons over the past six

election cycles;

• A listing for each Senate candidate

covering the full six-year cycle and

each House candidate for 2003;

and

• Top 50 lists for Senate and House

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

major sources of receipts.

The press release is available on

the FEC web site at http://

www.fec.gov/news.html and from

the FEC’s Public Records Office

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

Office (800/424-9530, press 5).✦

—Amy Kort

paign Reform Act of 2002. See the

chart below for details. Both sessions will be followed by a halfhour reception at which each

attendee will have an opportunity to

meet the campaign finance analyst

who reviews his/her committee’s

reports. Representatives from the

FEC’s Electronic Filing Office will

also be available to meet with

attendees.

Attendance is limited to 30

people per session, and registration

($25) will be accepted on a firstcome, first-served basis. Please call

the FEC before registering or

sending money to ensure that

openings remain. Prepayment is

required. The registration form is

available on the FEC’s web site at

http://www.fec.gov/pages/

infosvc.htm and from Faxline, the

FEC’s automated fax system (202/

501-3413, request document 590).

For more information, call 800/424-

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

1100.✦

—Jim Wilson

Commissioners and experienced

FEC staff will explain the campaign

finance law’s requirements for these

groups, including regulations

concerning fundraising methods,

corporate communications, the use

of corporate facilities and reporting.

An IRS representative will be

available to answer election-related

tax questions.

The conference will be held at the

Loews L’Enfant Plaza Hotel in

Washington, DC, near the National

Mall and Smithsonian museums.

The conference registration fee is

$360, which covers the cost of the

conference, materials, meals and a

$10 late fee added for registrations

received on or after March 23.

The Loews L’Enfant Plaza Hotel

is located at 480 L’Enfant Plaza

SW., Washington, DC. Parking is

available at the hotel for a fee of $15

per day and $22 overnight. To

make reservations, call toll free

(800/635-5065) or locally (202/484-

1000, ext. 5000).

Trade Associations, Membership

Organizations and their PACs

The FEC will hold a conference

in Boston, MA, May 25-26, 2004,

for trade associations, membership

organizations and their respective

PACs. The conference will consist

of a series of workshops conducted

by Commissioners and experienced

FEC staff who will explain how the

federal campaign finance law

applies to each of these groups.

Workshops will specifically address

rules for fundraising and reporting

and will focus on aspects of the

campaign finance law that are

uniquely applicable to trade associations and membership organizations.

A representative from the IRS will

also be available to answer electionrelated tax questions.

The conference will be held at the

Royal Sonesta Hotel Boston. The

conference registration fee is $335,

which covers the cost of the conference, materials and meals. A $10

late fee will be added as of April 28.
April 2004 Federal Election Commission RECORD

19

The first number in each citation

refers to the “number” (month) of

the 2004 Record issue in which the

article appeared. The second

number, following the colon,

indicates the page number in that

issue. For example, “1:4” means

that the article is in the January

issue on page 4.

Advisory Opinions

2003-28: Nonconnected PAC

established by LLC composed

entirely of corporations may

become an SSF with LLC as its

connected organization, 1:20

2003-29: Transfer of funds from a

nonfederal PAC to a federal PAC

of an incorporated membership

organization, 1:21

2003-30: Retiring campaign debt

and repaying candidate loans, 2:1

2003-31: Candidate’s loans to

campaign apply to Millionaires’

Amendment threshold, 2:2

2003-32: Federal candidate’s use of

surplus funds from nonfederal

campaign account, 2:4

2003-33: Charitable matching plan

with prizes for donors, 2:5

2003-34: Reality television show to

simulate Presidential campaign,

2:6

2003-35: Presidential candidate may

withdraw from matching payment

program, 2:7

2003-36: Fundraising by federal

candidate/officeholder for section

527 organization, 2:8

2003-37: Nonconnected PAC’s use

of nonfederal funds for campaign

activities, 4;4

2003-38: Funds raised and spent by

federal candidate on behalf of

redistricting committee to defray

legal expenses incurred in redistricting litigation, 3:14

AO 2003-39: Charitable matching

plan conducted by collecting

agent of trade association, 3:10

AO 2003-40: Reporting independent

expenditures, 3:11

2004-1: Endorsement ads result in

contribution if coordinated

communications, 3:12

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

Compliance

ADR program cases, 1:25; 4:15

Administrative Fine program cases,

1:24; 4:14

Enforcement Query System, disclosure policy for closed enforcement matters and press release

policy for closed MURs; “enforcement profile” examined, 1:6

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

MUR 5229: Collecting agent’s

failure to transfer contributions,

1:7

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

Naming of treasurers in enforcement

matters, proposed statement of

policy, 3:4

Nonfilers, 3:16; 4:13

Court Cases

_____ v. FEC

– Akins, 4:10

– Alliance for Democracy, 3:8

– Cox for Senate, 3:4

– Hagelin, 4:11

– Kean for Congress, 3:7

– McConnell, 1:1

– Wilkinson, 4:9

– Sykes, 4:12

FEC v. _____

– California Democratic Party, 4:9

– Friends of Lane Evans, 3:9

Regulations

Administrative Fine program

extension, final rule, 3:1

Electioneering communications,

FCC database, 3:3

Federal election activity periods, 3:1

Leadership PACs, final rules, 1: 18

Political committee definition,

Notice of Proposed Rulemaking,

4:1

Overnight delivery safe harbor, 3:1

Index

Conference Schedule

for 2004

Conference for Corporations

and their PACs

April 22-23, 2004

Washington, DC

Conference for Trade

Associations, Membership

Organizations and their PACs

May 25-26, 2004

Boston, MA

The Royal Sonesta Hotel Boston

is located just across the river from

downtown Boston at Five Cambridge Parkway, Cambridge, MA. A

room rate of $179 single or double

will be available for reservations

made on or before April 27. To

make reservations, call toll free (1-

800-SONESTA) or locally (617-

806-4200) and state that you are

attending the FEC conference.

Registration

Complete conference program

and registration information is

available online. Conference

registrations will be accepted on a

first-come, first-served basis, and

registrations are limited to two

representatives per organization.

FEC conferences are selling out

quickly, so please register early. For

registration information concerning

any FEC conference:

• Call Sylvester Management

Corporation at 800/246-7277;

• Visit the FEC web site at http://

www.fec.gov/pages/

infosvc.htm#Conferences; or

• Send an e-mail to

lauren@sylvestermanagement.com.✦

—Amy Kort

(continued on page 20)
FEDERAL ELECTION COMMISSION

999 E Street, NW

Washington, DC 20463

Official Business

Penalty for Private Use, $300

Federal Election Commission RECORD April 2004

PRESORTED STANDARD

U.S. POSTAGE

PAID

FEDERAL ELECTION COMMISSION

Public access to materials from

closed enforcement matters,

Petition for Rulemaking, 3:4

Public financing of Presidential

candidates and nominating

conventions, correction and

effective date, 1:19

Travel on behalf of candidates and

political committees, final rules,

1:19

Reports

Due in 2004, 1:9

April reminder, 4:1

Kentucky special election reporting,

1:9

Index

(continued from page 20)