AGENDA DOCUMENT NO. 14-6.31\. 

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December 9, 2014 

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MEMORANDUM AGENDA ITEM 

TO: The Commission 

THROUGH: Alec Palmer fP 

Staff Director 

FROM: J. Duane Pugh Jr. J 1>~' 

Director 

Amy E. P~ke ~ ( 

Deputy Duector - -

For Meeting of Jd-,-11-('-/ 

SUBMITTED LATE 

Congressional, Legislative and Intergovernmental Affairs 

SUBJECT: Draft Legislative Recommendations 2014 

Attached for your approval are seven draft Legislative Recommendations. The 

recommendations are: 

1. Electronic Filing of Senate Reports 

2. Electronic Filing of Electioneering Communication Reports 

3. Authority to Create Senior Executive Service Positions 

4. Fraudulent Misrepresentation of Campaign Authority 

5. Make Permanent the Administrative Fine Program for Reporting Violations 

6. Increase and Index for Inflation Registration and Reporting Thresholds 

7. Authority to Accept Gifts 

Once the Commission has approved the draft Legislative Recommendations, we 

will prepare transmittal letters to the President and Congress for the Chairman's 

signature. 

Attachment 
Electronic Filing of Senate Reports 

Sections: 52 U.S.C. § 30102(g) (formerly 2 U.S.C. § 432(g)) 

Recommendation: Congress should require electronic filing for all Senate candidates and their 

authorized committees (and for those persons and political committees filing designations, 

statements, reports or notifications pertaining only to Senate elections) if they have, or have 

reason to expect to have, aggregate contributions or expenditures in excess of the threshold 

amount determined by the Commission. 

Explanation: The Treasury and General Government Appropriations Act, 2000, Public 

Law 106-58, § 639, 113 Stat. 430, 476 (1999), required that the Commission make electronic 

filing mandatory for political committees and other persons required to file with the Commission 

who, in a calendar year, have, or have reason to expect to have, total contributions or total 

expenditures exceeding a threshold amount set by the Commission (which is currently $50,000). 

However, because Senate candidates file with the Secretary of the Senate, the mandatory 

electronic filing provisions do not apply to Senate candidates and their committees. 

Reports that are filed electronically are normally available to the public, and may be 

downloaded, within minutes. In contrast, the time between the receipt of a report filed through 

the paper filing system and its initial appearance on the Commission's web site is 48 hours. 

Moreover, a Senate campaign filing often consists of thousands of pages, and data from the 

filings themselves take up to 30 days to be integrated into the Commission's searchable 

databases. If such reports were electronically filed, the data could be made available to the 

public within a few days. Electronic filings are also not subject to delay due to post office 

processing or disruptions in the delivery of mail, such as those arising from security measures 

put in place after the discovery of anthrax powder and ricin in mail in 2001, 2004 and 20 13. 

Compared to data from paper reports, data from electronically filed reports is received, 

processed and disseminated more easily and efficiently, resulting in better use of resources. In 

fact, the Commission estimates at least $430,000 per year in costs directly attributable to current 

Senate filing procedures would be saved by requiring electronic filing. In addition to these 

savings for the Commission, the Secretary of the Senate would also realize savings, and 

committees that file reports could substantially reduce their processing costs. 

Increases in the volume of Senate paper filings in the 2014 election posed a challenge to 

paper handling capacities of the Federal Election Commission and the Secretary ofthe Senate. 

For example, the number of Senate paper report pages filed for the third quarter of 20 14 was 

140,854 as of December 2, 2014, exceeding the number filed for the corresponding report in the 

2012 election by 47%. This is a significant increase from 2012, which was also a record-setting 

year. The increasingly high volume of paper reports has caused delays in providing these reports 

to the public and makes the need to institute electronic filing urgent. 

The Commission notes that two bills that would require Senate campaigns to file reports 

with the Federal Election Commission, rather than the Secretary of the Senate, have been 

referred out of committee and are pending before the Senate. See Senate Campaign Disclosure 
Parity Act, S. 375, 1131

h Cong. (2013); Legislative Branch Appropriations Act, 2015, H.R. 4487, 

113 th Cong. (20 14 ). Either bill, if passed, would make those committees subject to mandatory 

electronic filing at the Federal Election Commission. 

Legislative Language: 

Section 302(g) of the Federal Election Campaign Act of 1971 (52 U.S.C. § 301 02(g) (formerly 2 

U.S.C. § 432(g))) is amended to read as follows: 

"(g) Filing with Commission-All designations, statements, and reports required to be filed 

under this Act shall be filed with the Commission." 

2 
Electronic Filing of Electioneering Communication Reports 

Section: 52 U.S.C. § 30104(a)(11)(A)(i) (formerly 2 U.S.C. § 434(a)(11)(A)(i)) 

Recommendation: Congress should require reports of electioneering communications to be filed 

electronically with the Commission, rather than on paper. 

Explanation: The Treasury and General Government Appropriations Act, 2000, Public Law 106-

58, § 639, 113 Stat. 430, 476 (1999), required that the Commission make electronic filing 

mandatory for political committees and other persons required to file with the Commission who, 

in a calendar year, have, or have reason to expect to have, total contributions or total 

expenditures exceeding a threshold amount set by the Commission (which is currently $50,000). 

In addition, many independent expenditure reports are already subject to mandatory electronic 

filing under 52 U.S.C. § 30104(a)(11)(A)(i). However, because electioneering communication 

reports are not filed by political committees, and because funds spent for electioneering 

communications are reported as "disbursements," and not as "expenditures," the mandatory 

electronic filing provisions generally do not apply to electioneering communication reports. 

Compared to data from paper reports, data from electronically filed reports is received, 

processed and disseminated more easily and efficiently, resulting in better use of resources. 

Reports that are filed electronically are normally available to the public, and may be 

downloaded, within minutes. In contrast, the time between the receipt of a report filed through 

the paper filing system and its initial appearance on the Commission's web site is 48 hours. 

Electronic filings are not subject to delay due to post office processing or disruptions in 

the delivery of mail, such as those arising from security measures put in place after the discovery 

of anthrax powder and ricin in mail in 2001, 2004 and 2013. Because of these security measures, 

the Commission's receipt of mailed paper filings is delayed. In contrast, electronic filings are 

not subject to these delays. 

Only entities that report more than $50,000 of electioneering communications would be 

subject to mandatory electronic filing under the proposal. The current threshold selected by the 

Commission ensures that entities with limited financial resources can file reports on paper, which 

avoids the limited cost of internet access and a computer sufficient to file reports. 

Legislative Language: 

Section 304(a)(11)(A)(i) of the Federal Election Campaign Act of 1971 (52 U.S.C. 

§ 30104(a)(11)(A)(i) (formerly 2 U.S.C. § 434(a)(11)(A)(i))) is amended by inserting "or makes 

or has reason to expect to make electioneering communications" after "expenditures". 

3 
Authority to Create Senior Executive Service Positions 

Sections: 5 U.S.C. § 3132(a)(l) 

52 U.S.C. § 30106(f)(l) (formerly 2 U.S.C. § 437c(f)(l)) 

Recommendation: Congress should delete the exclusion of the Federal Election Commission 

from eligibility for the Senior Executive Service (SES) under the Civil Service Reform Act of 

1978 (as amended by the Federal Election Campaign Act Amendments of 1979). See Public 

Law96-187, § 203,93 Stat. 1339,1368 (1980), codified at 5 U.S.C. § 3132(a)(l)(C). 

Additionally, Congress should revise section 306 of the Federal Election Campaign Act of 1971, 

Public Law 92-225, 86 Stat. 3 (1972), as amended ("FECA"), to delink the salaries ofthe Staff 

Director and the General Counsel from Level IV and Level V of the Executive Schedule. 

Explanation: The Commission believes that these statutory changes are needed to bring the 

Commission's personnel structure in line with that of other comparable federal agencies. This 

would ensure that the Commission is better able to compete with other government agencies in 

recruiting and retaining key management personnel. 

Currently, the Commission is prohibited by law from creating Senior Executive Service 

positions within the agency. 5 U.S.C. § 3132(a)(1)(C). The Commission recommends that it be 

made eligible to create Senior Executive Service positions because: (1) the agency currently has 

several top management positions that the Commission believes would fully satisfy the criteria 

for SES positions set forth in 5 U.S.C. § 3132 (e.g, directing the work of an organizational unit, 

monitoring progress toward organizational goals, etc.); and (2) the SES system would provide 

institutional benefits to the agency and agency employees. 

As a result ofthe current prohibition, the Commission's senior managers (other than the 

Staff Director and the General Counsel) are employed in Senior Level positions. The current 

Senior Level positions (the ChiefFinancial Officer, four Deputy Staff Directors, two Deputy 

General Counsels, and three Associate General Counsels) oversee major programmatic areas and 

supervise not only staff, but other managers as well. Although these ten top management 

positions are designated as Senior Level, because supervisory and executive responsibilities 

occupy 100% of the time of the employees filling these positions, the positions would be more 

appropriately designated as SES. 1 

The FEC's expenses would not increase significantly if it were permitted to participate in 

the SES program. In 2008, legislation brought the salary ranges for Senior Level employees into 

parity with Senior Executive Service employees. See Senior Professional Performance Act of 

2008, Public Law 110-372, 122 Stat. 4043 (2008). Like SES employees, Senior Level 

employees may now carry over 720 hours of annual leave into the next year, rather than the 

In fact, OPM's guidance on the Senior Level positions indicates that the Senior Level system is generally 

for positions in which supervisory duties occupy less than 25% of the employee's time. See 

http://www .opm. gov /poI icy-data-oversight/sen ior-executi ve-service/scienti fie-sen ior-leve !-positions/ (last visited 

Dec. 5, 2014). OPM's guidance does note, however, that "in a few agencies [such as the Federal Election 

Commission] that are statutorily exempt from inclusion in the Senior Executive Service (SES), executive positions 

are staffed with SL employees." 

4 
previous Senior Level limit of240. Nonetheless, theSES system would provide institutional 

benefits to the Commission and its employees by enhancing the quality and quantity of the pool 

of persons available to fill vacancies that may arise. 

SES candidates must go through a competitive selection process in order to enter a 

Candidate Development Program. Completion of a Candidate Development Program by 

candidates within the agency ensures that a cadre of SES-approved employees is available for 

selection and thereby assists in good succession planning. In addition, the SES system enables 

agencies to hire experienced and skilled leaders from a government-wide, not just intra-agency, 

pool with relative ease and with the assurance that all such employees have met the same 

standards of development and experience. For example, because SES-certified applicants from 

outside the agency will have met all of the Executive Core Qualifications, the Commission 

would be able to evaluate their applications with the assurance that fundamental competencies 

have already been developed. 

The current provision in FECA specifies that the Staff Director and General Counsel are 

to be paid at Level IV and Level V ofthe Executive Schedule, respectively. Both positions 

supervise personnel at the GS-15 and Senior Level pay scales, which often provide higher 

salaries than Levels IV and V of the Executive Schedule. The Staff Director and General 

Counsel have significant responsibilities and oversight duties with respect to both administrative 

and legal areas, as well as management over almost all agency personnel. According to 

recruiting specialists working with the Commission, the current limit makes attracting a strong 

pool of applicants to these positions more challenging. The appointment and retention of these 

key leaders have been identified as ongoing management and performance challenges to the 

Commission by the Inspector General in the 2014 Agency Financial Report and in previous 

Performance and Accountability Reports. The General Counsel's position is currently vacant. 

The Commission proposes removing the statutory references to the Executive Schedule, 

so that the Staff Director and General Counsel would be compensated under the same schedule 

as the Commission's other senior managers. This revision will remedy the current situation 

where the Commission's top managers are compensated at a lower rate than many of their direct 

reports, and will ensure that the Commission can retain highly qualified individuals to serve in 

those positions as well as enable it to remain competitive in the marketplace for Federal 

executives when filing the current vacancy or when further vacancies arise. This change will not 

require an increase in the Commission's appropriation request. 

Accordingly, the Commission believes that the positions of Staff Director and General 

Counsel, as well as the current Senior Level positions within the agency, would be more 

appropriately categorized as SES positions. Because salary ranges for Senior Executive Service 

employees and Senior Level employees are in parity, as discussed above, the foregoing 

amendments will affect the salary expenses for only two positions: the Staff Director and the 

General Counsel. 

5 
Legislative Language: 

Section 306(f)(l) ofthe Federal Election Campaign Act of 1971 (52 U.S.C. § 30106(f)(l) 

(formerly 2 U.S.C. § 437c(f)(1))) is amended by striking the second and third sentences. 

Section 3132(a)(l )(C) of Title 5, United States Code, is amended by striking "the Federal 

Election Commission, or". 

6 
Fraudulent Misrepresentation of Campaign Authority 

Section: 52 U.S.C. § 30124 (formerly 2 U.S.C. § 441h) 

Recommendation: Congress should revise the prohibitions on fraudulent misrepresentation of 

campaign authority to encompass all persons purporting to act on behalf of candidates and real or 

fictitious political committees and political organizations. In addition, Congress should remove 

the requirement that the fraudulent misrepresentation must pertain to a matter that is "damaging" 

to another candidate or political party. 

Explanation: The Federal Election Campaign Act prohibits a Federal candidate or his or her 

agents or employees from fraudulent misrepresentation such as speaking, writing or otherwise 

acting on behalf of a candidate or political party committee on a "matter which is damaging to 

such other candidate or political party" or an employee or agent of either. See 52 U.S.C. 

§ 30124(a). The Commission recommends that this prohibition be extended to any person who 

would disrupt a campaign by such unlawful means, rather than being limited to candidates and 

their agents and employees. Proving damages as a threshold matter is often difficult and 

unnecessarily impedes the Commission's ability to pursue persons who employ fraud and deceit 

to undermine campaigns. Fraudulent solicitations of funds on behalf of a candidate or political 

party committee have been prohibited without any required showing of damage to the 

misrepresented candidate or political party committee. See Bipartisan Campaign Reform Act of 

2002, § 309, Public Law 107-155, 116 Stat. 81, 104 (2002) ("BCRA"), codified at 52 U.S.C. § 

30124(b). 

In addition, while both subsections (a) and (b) of 52 U.S.C. § 30124 directly address 

fraudulent actions "on behalf of any other candidate or political party," they do not address 

situations where a person falsely claims to represent another type of political committee or 

claims to be acting on behalf of a fictitious political organization, rather than an actual political 

party or a candidate. For example, the current statute does not bar fraudulent misrepresentation 

or solicitation on behalf of a corporate or union separate segregated fund or a non-connected 

political committee. 

Legislative Language: 

Section 322 of the Federal Election Campaign Act of 1971 (52 U.S.C. § 30124 (formerly 2 

U.S.C. § 441h)) is amended: 

(1) in subsection (a), by striking "who is a candidate for Federal office or an employee or 

agent of such a candidate"; 

(2) in paragraph (a)(l), by striking "candidate or political party or employee or agent 

thereof on a matter which is damaging to such other candidate or political party or 

employee or agent thereof' and inserting "candidate, political party, other real or 

fictitious political committee or organization, or employee or agent of any of the 

foregoing,"; and 

7 
(3) in paragraph (b)( 1 ), by striking "candidate or political party or employee or agent 

thereof' and inserting "candidate, political party, other real or fictitious political 

committee or organization, or employee or agent of any of the foregoing,". 

8 
Making Permanent the Administrative Fine Program for Reporting Violations 

Section: 52 U.S.C. § 30109 (formerly 2 U.S.C. § 437g) 

Recommendation: Congress should make permanent the Commission's authority to assess 

administrative fines for violations of the law requiring timely reporting of receipts and 

disbursements. The Commission's current Administrative Fine Program only covers violations 

that relate to reporting periods through December 31, 2018. 

Explanation: On December 26, 2013, President Obama signed legislation that extended the 

Administrative Fine Program, which authorized the Commission to include in the Program 

certain violations of2 U.S.C. §§ 434 and 437 (now 52 U.S.C. §§ 30104 and 30105) that relate to 

reporting periods through December 31,2018. See Public Law 113-72, 127 Stat. 1210 (2013). 

Since the Administrative Fine program was implemented in 2000 through the end of fiscal year 

2014, the Commission has processed and made public 2,683 cases, with more than $5 million in 

fines assessed. The Administrative Fine Program has been remarkably successful: over the 

course of the program, the number of late and nonfiled reports has dramatically decreased. For 

election cycles 1992 through 2000, an average of 21% of campaign finance reports were filed 

late. Since the inception of the Administrative Fine Program, the percentage of late reports has 

dropped to below 10%. As a result, the Administrative Fine Program has become an integral 

part of the Commission's mission to administer and enforce the Act. With fewer late reports and 

fewer challenges to administrative fines, the Commission has been able to reduce the number of 

employees who work on this program. By making the program permanent, Congress would 

ensure that the Commission would not lose one of the most cost-effective and successful 

programs in its history. 

Under the Administrative Fine Program, the Commission considers reports to be filed 

late if they are received after the due date, but within 30 days of that due date. Election-sensitive 

reports are considered late if they are filed after their due date, but at least five days before the 

election. (Election sensitive reports are those filed immediately before an election and include 

pre-primary, pre-special, pre-general, October quarterly and October monthly reports.) 

Committees filing reports after these dates are considered nonfilers. Civil money penalties for 

late reports are determined by the amount of activity on the report, the number of days the report 

was late and any prior penalties for violations under the administrative fine regulations. 

Penalties for nonfiled reports are determined by the estimated amount of activity on the report 

and any prior violations. Committees have the option to challenge the Commission's finding, 

proposed penalty or both, or they may pay the civil penalty assessed. 

Legislative Language: 

Section 309(a)(4)(C)(v) of the Federal Election Campaign Act of 1971 (52 U.S.C. 

§ 30109(a)(4)(C)(v) (formerly 2 U.S.C. § 437g(a)(4)(C)(v))) is amended to read as follows: 

"This subparagraph shall apply with respect to violations that relate to reporting periods that 

begin on or after January 1, 2000.". 

9 
Increase and Index for Inflation Registration and Reporting Thresholds 

Sections: 52 U.S.C. §§ 30101, 30104 and 30116 (formerly 2 U.S.C. §§ 431,434 and 441a) 

Recommendation: Congress should increase and index for inflation certain registration and 

reporting thresholds in the Federal Election Campaign Act that have not been changed since the 

1970s. 

Explanation: Most of the Federal Election Campaign Act's contribution limits and registration 

and reporting thresholds were set in the 1970s. Because over twenty years of inflation had 

effectively reduced FECA's contribution limits in real dollars, the Bipartisan Campaign Reform 

Act of 2002 increased most of the Act's contribution limits to adjust for some of the effects of 

inflation. Furthermore, BCRA indexed these limits for inflation to address inflation in future. 

The Commission proposes extending this approach to registration and reporting thresholds, 

which have been effectively reduced by inflation since those thresholds were established in 1971 

or 1979. 

Since 1971, FECA has provided that any group of persons that receives contributions or 

makes expenditures in excess of $1,000 in a calendar year must register and report as a political 

committee. 52 U.S.C. § 30101(4)(A). FECA also requires political committees to abide by the 

contribution limits and source prohibitions specified in FECA. Since 1979, FECA has provided 

that local political party organizations are also subject to a $1,000 threshold for (federal) political 

committee status. 52 U.S.C. § 30101(4)(C). The Commission recommends that Congress 

increase these thresholds to amounts determined appropriate by Congress, and then index those 

amounts for inflation to prevent erosion in the future. 

Raising this threshold would be particularly beneficial for local and Congressional 

district committees of political parties. These organizations frequently breach the $1,000 

threshold. An increased threshold would permit limited spending on federal elections without 

triggering federal political committee status for local and Congressional district committees of 

political parties. 

Since 1979, FECA has required persons (other than political committees) who make 

independent expenditures in excess of $250 in a calendar year to report such expenditures to the 

Commission. 52 U.S.C. § 30104(c)(l). The Commission recommends that Congress increase 

this threshold to an amount determined by Congress and index this amount for inflation. 

Increasing these thresholds would take into account many years of inflation and the 

general increase in campaign cost and ease the compliance burdens on smaller organizations and 

individuals. Additionally, by increasing the thresholds, Congress would exempt some 

individuals and small organizations that engage in only minimal spending from the Act's 

registration and reporting requirements. Increasing the registration and reporting thresholds to 

compensate for inflation would leave significant financial activity subject to regulation as 

intended by Congress when it enacted the FECA. 

10 
Legislative language: 

Section 301 ofthe Federal Election Campaign Act of 1971 (52 U.S.C. § 30101 (formerly 2 

U.S.C. § 431)) is amended: 

(1) in paragraph (4)(A), by striking both references to "$1,000" and by inserting a 

dollar amount determined by Congress; and 

(2) in paragraph ( 4)(C), by striking both references to "$5,000" and both references to 

"$1 ,000" and by inserting dollar amounts determined by Congress. 

Section 304 ofthe Federal Election Campaign Act of 1971 (52 U.S.C. § 30104 (formerly 2 

U.S.C. § 434)) is amended, in paragraph (c)(l) by striking "$250" and inserting a dollar amount 

determined by Congress. 

Section 315(c) of the Federal Election Campaign Act of 1971 (52 U.S.C. § 30116(c) (formerly 2 

U.S.C. § 441a(c))) is amended-

(1) in paragraph (1), by inserting after subparagraph (C) the following: 

"(D) In any calendar year after 2015-

(i) a threshold established by section 301(4)(A) or (4)(C) shall be 

increased by the percent difference determined under subparagraph (A); 

(ii) each amount so increased shall remain in effect for the calendar year; 

and 

(iii) if any amount after adjustment under clause (i) is not a multiple of 

$100, such amount shall be rounded to the nearest multiple of $1 00."; 

(2) in paragraph (2)(B)(i), by deleting "and" at the end; 

(3) in paragraph (2)(B)(ii), by replacing the period at the end with"; and"; and 

( 4) by inserting after paragraph (2)(B)(ii) the following: 

"(iii) for purposes of section 301(4)(A) or (4)(C), calendar year 2015.". 

11 
Authority to Accept Gifts 

Section: 52 U.S.C. § 30107 (formerly 2 U.S.C. § 437d) 

Recommendation: Congress should authorize the Commission to accept gifts that will assist the 

Commission in carrying out its functions. 

Explanation: Congress has provided authority to numerous Federal departments and agencies to 

accept gifts that will assist that department or agency in carrying out its duties. See, e.g., 5 

U.S.C. app. § 403(b)(l) (Office of Government Ethics); 28 U.S.C. § 524(d) (Department of 

Justice); 40 U.S.C. § 3175 (General Services Administration). In the absence of specific 

statutory authority, a government agency may not accept donations of goods or services from 

private sources. See U.S. Gov't Accountability Office, GAO B-289903, Gifts of Goods and 

Services to the Government (2002). The Commission is currently without such authority, but 

wishes to be able to accept gifts, should any offers be received. 

State disclosure agencies have received donated services and products for information 

technology projects to promote and enhance the transparency of data disclosed to the 

government. Such donations have come from individuals or organizations that support the 

agencies' mission of enhancing transparency. 

The Federal Election Commission would like to be authorized to accept similar gifts and 

would use those gifts to continue its efforts to facilitate transparency in the federal campaign 

finance system through a state-of-the-art, web-based public disclosure system, ensuring that the 

vast quantity of campaign finance data is available to the public quickly and in a manner that is 

easy for the general public to sort and search. Such gifts are an example of the gifts the 

Commission would be authorized to accept under the proposal, and all accepted gifts would be 

used to assist the Commission in carrying out its mission. 

The Commission recognizes that vigilant review would be required to limit conflicts of 

interest and would promulgate a regulation to disclose any gifts prior to acceptance. 

Legislative Language: 

Section 307 ofthe Federal Election Campaign Act of 1971 (52 U.S.C. § 30107 (formerly 

2 U.S.C.§ 437d)) is amended by adding at the end the following new subsection: 

"(f) Authority to accept gifts. 

"( 1) The Commission is authorized to accept and utilize on behalf of the 

United States, any gift, donation, bequest, or devise of money, use of 

facilities, personal property, or services for the purpose of aiding or 

facilitating the work of the Federal Election Commission. 

12 
"(2) No gift may be accepted-

"(A) that attaches conditions inconsistent with applicable laws or 

regulations; or 

"(B) that is conditioned upon or will require the expenditure of 

appropriated funds that are not available to the Federal Election 

Commission. 

"(3) Prior to accepting any gift pursuant to the authority provided by this 

subsection, the Commission shall promulgate a regulation that requires the 

public disclosure of the donor of the gift, the date of the gift, and a 

description of the nature, value and intended use of the gift." 

13