June 2004 Federal Election Commission Volume 30, Number 6

Table of Contents

 

 Legislation

 1 Legislative Recommendations Sent 

to President and Congress

 Regulations

 1 Commission to Address Proposed 

Rulemaking on Definition of 

Political Committee in August

 Compliance

 2 MUR 4919: Fraudulent Scheme to 

Deceive Voters

 3 MUR 4953: Party Misuse of Soft 

Money

 4 MUR: 5199: Campaign 

Committeeʼs Failure to Report 

Recount Activities

4 Advisory Opinions

 Court Cases

 6 New Litigation

 7 Nonfilers

 Public Funding

 8 Commission Certifies Matching 

Funds for Presidential Candidates

 Administrative Fines

 9 Committees Fined for Late and 

Nonfiled Reports

 Outreach

 10 Reporting Roundtables

 10 Public Appearances

 Publications

 10 Annual Report 2003

 10 New Campaign Guide

 11 Index (continued on page 2) (continued on page 2)

Commission to Address 

Proposed Rulemaking on 

the Definition of “Political 

Committee” in August

On May 13, 2004, the Commission voted to extend for 90 days 

its consideration of proposed rules 

concerning the definition of “political committee.” By the end of this 

period, the Commission may decide 

to:

• Issue final rules; 

• Issue a second Notice of Proposed 

Rulemaking to offer commenters a 

more focused proposal; or 

• Defer or close the rulemaking and 

instead look for guidance from 

Congress.

The Commission published a 

Notice of Proposed Rulemaking 

(NPRM) on March 11, 2004, 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 

Legislation Regulations

Commission Sends 

Annual Legislative 

Recommendations to 

President and Congress

On April 29, 2004, the Commission transmitted to Congress and 

the President its annual recommendations for changes to the Federal 

Election Campaign Act (the Act). 

Of the 12 recommendations transmitted, the Commission identified 

four as high priority:

• Restoring “any lawful purpose” 

as a permissible use of campaign 

funds under 2 U.S.C. §439a, including specifically the donation of 

federal campaign funds to state and 

local races (subject to state law);

• Increasing the contribution limit 

under 2 U.S.C. §432(e)(3)(B) that 

authorized committees may give 

to authorized committees of other 

candidates, from $1,000 per election, to $2,000 per election;

• Replacing the “reason to believe” 

terminology used in the Act to describe the Commissionʼs decision 

to open an investigation with terminology that sounds less accusatory; 

and

• Requiring Senate campaign committees to file electronically at 
Federal Election Commission RECORD June 2004

2

Regulations

(continued from page 1)

Federal Election Commission

999 E Street, NW

Washington, DC 20463

800/424-9530

202/694-1100

202/501-3413 (FEC Faxline)

202/219-3336 (TDD for the

 hearing impaired)

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

amendments to the allocation regulations for nonconnected committees 

and separate segregated funds. See 

the April 2004 Record, page 1.

The full text of the NPRM was 

published in the Federal Register

(68 FR 11736) and is available on 

the FEC web site at http://www.fec.

gov/register.htm, along with public 

comments on the NRPM. The Commission held a public hearing on the 

proposed rules in April. See the May 

2004 Record, page 3.

 —Amy Kort

MUR 4919: Fraudulent 

Scheme to Deceive Voters 

The FEC recently entered into 

conciliation agreements with Adrian 

Plesha and Charles Ball for Congress (Ball for Congress) resulting 

from their fraudulent misrepresentation of their opponentʼs party and a 

Congressman from a neighboring 

district in mailings and phone calls 

during the 1998 campaign. The 

Commission found probable cause 

to believe that Mr. Plesha and Ball 

for Congress had knowingly and 

willfully violated the Federal Election Campaign Act (the Act).1

Shortly before the 1998 general 

election, Ball for Congress, acting through its campaign manager 

Adrian Plesha, covertly arranged 

and financed the dissemination 

of approximately 40,000 letters 

and 10,000 phone calls that urged 

registered Democrats not to vote for 

Representative Ellen Tauscher. The 

letters and phone calls came from 

the “East Bay Democratic Committee,” a fictitious organization created 

by Mr. Plesha and Ball for Congress. 

The letters contained a false address 

and falsely used neighboring Democratic Congressman George Millerʼs 

name as the signatory. 

The Act prohibits federal 

candidates or their agents from 

fraudulently misrepresenting any 

committee under their control as 

speaking or writing on behalf of any 

other candidate or political party 

Legislation

(continued from page 1)

1

 The Act explicitly provides that the 

Commission may find that violations 

are knowing and willful. 2 U.S.C.

§437g(a)(5)(B). The knowing and willful 

standard requires knowledge that one is 

violating the law.

Compliance

the same thresholds as House and 

Presidential campaign committees.

Among the other eight recommendations transmitted this year 

are the following new recommendations:

• Revising the prohibitions on 

fraudulent misrepresentation of 

campaign authority to capture all 

persons falsely purporting to act 

on behalf of candidates and real or 

fictitious political committees and 

organizations;

• Revisiting the pay levels for the 

Commissionʼs General Counsel 

and permitting the Commission to 

create Senior Executive Service 

positions to help recruit and retain 

key personnel;

• Modifying the definition of federal election activity at 2 U.S.C. 

§431(20)(A)(iv) to allow state, district and local party committees to 

determine each pay period (rather 

than each month) whether employees must be paid using federal or 

nonfederal funds; and

• Clarifying the circumstances under 

which federal candidates may 

solicit, receive or spend funds for 

nonfederal candidates and other 

types of political accounts, including recall elections, referenda and 

initiatives, legal defense funds and 

related activities.

Additionally, the Commission 

updated four recommendations that 

have been put forward in past years:

• Harmonizing the limits for multicandidate political committees with 

those of non-multicandidate committees by indexing the multicandidate limits for inflation;

• Stabilizing the Presidential public 

funding program to avert possible 

shortfalls in future election cycles;

• Increasing and indexing for inflation all pre-BCRA registration and 

reporting thresholds to ease the 

registration and reporting burdens 

on smaller political committees 

that may lack the resources and 

expertise to comply with the Act; 

and

• Making permanent the Administrative Fine program for violations of 

the law requiring timely reporting 

of receipts and disbursements.

The full text of the Commissionʼs 

2004 legislative recommendations 

is available on the FEC web site at 

http://www.fec.gov/pages/legislative_recommendations_2004.htm.

 —Dorothy Yeager
June 2004 Federal Election Commission RECORD 

3

on a matter that is damaging to that 

other candidate or party. 2 U.S.C. 

§441h, 11 CFR 110.9(b). 2 Additionally, the law requires any person 

who expressly advocates the election or defeat of a federal candidate 

through a mass mailing to include a 

disclaimer stating who paid for and 

authorized the mailing. 2 U.S.C. 

§441d(a), 11 CFR 110.11(a).

Mr. Plesha knowingly made false 

statements to the FEC, denying 

involvement in or knowledge of this 

scheme when in fact he had created, authorized and distributed the 

fabricated letters and calls. To avoid 

being identified as the true sponsor of the communications, Ball for 

Congress and Mr. Plesha omitted the 

required disclaimers, created phony 

invoices, used stamps rather than the 

committeeʼs postal meter and asked 

vendors to hide any links between 

the communications and Ball for 

Congress.

Charles Ball for Congress has 

paid a $24,000 civil penalty and also 

has agreed to cease and desist from 

further violations of sections 441d(a) 

and 441h of the Act.

Mr. Plesha will pay a $60,000 

civil penalty and also has agreed to 

cease and desist from further violations of section 441h of the Act. 

Additionally, the FEC referred Mr. 

Plesha to the Department of Justice 

for criminal prosecution. Mr. Plesha 

pled guilty to making false statements to the FEC and was sentenced 

to three years of probation, a $5,000 

fine and 160 hours of community 

service.

Additional information on this 

case is available from the Commissionʼs Public Records Office and 

through the Enforcement Query System on the FECʼs web site. Search 

for case number 4919.

 —Jim Wilson

2

 All of the facts recounted in this case 

occurred prior to the effective date of 

the Bipartisan Campaign Reform Act 

of 2002 (BCRA). Accordingly, unless 

noted otherwise, all citations are to the 

Act as it read prior to the effective date 

of the BCRA. Likewise, all citations to 

the Commissionʼs regulations are to the 

2002 edition of Title 11 Code of Federal 

Regulations, which was published prior 

to the Commissionʼs promulgation of 

any regulations under the BCRA.

MUR 4953: Party Misuse of 

Soft Money

As part of a conciliation agreement with the Commission, the 

National Republican Congressional 

Committee (NRCC/the Committee) 

has agreed to pay a $280,000 civil 

penalty stemming from its 1999 

transfer of $500,000 in nonfederal 

funds or “soft money” to the U.S. 

Family Network (USFN).

Background

Under the law in effect at the 

time, national party committees, 

such as the NRCC, that made 

disbursements in connection with 

federal and nonfederal elections 

were required to allocate the costs of 

certain allocable activities, including 

so-called party issue advertisements, 

between their federal and nonfederal 

accounts. 11 CFR 106.5(a). Additionally, a party committee was 

required to allocate a donation to 

a third party if it gave nonfederal 

funds to that party with the knowledge that all or part of the funds 

would be used to conduct activities 

that would be allocable if engaged in 

directly by the party committee.1

NRCC

In October of 1999, more than a 

year before the November 7, 2000, 

general election, House Republicans 

inaugurated a multi-pronged project 

called “Stop the Raid!” As part of 

this project, the NRCC sponsored 

television advertisements in the 

districts of eight to ten Democratic 

federal candidates who were viewed 

as vulnerable to an electoral challenge in 2000. These advertisements 

accused the Democrats of planning 

to raid the Social Security Trust 

Fund surplus in the Fiscal Year 2000 

budget for “more big government 

programs.” The NRCC allocated 

the costs of these advertisements 

between its federal and nonfederal 

funds.

The USFN solicited the NRCC 

for $500,000 in nonfederal funds for 

“media and grassroots” during the 

week of October 4, 1999, and again 

during the week of October 11, 

1999. After initially denying both 

these requests, the NRCC transferred 

$500,000 in nonfederal funds to the 

USFN on October 20, 1999. The 

donation was made without following the NRCCʼs usual procedures 

to approve and process substantial 

donations. 

The founder of the USFN, Ed 

Buckham, had previously agreed 

with Jim Ellis, who was affiliated with Americans for Economic 

Growth (AEG), that AEG would 

broadcast radio ads relating to the issue of Social Security. After receipt 

of the NRCCʼs $500,000 donation, 

the USFN transferred $300,000 to 

AEG. A portion of that money was 

subsequently used to pay for radio 

ads that criticized alleged Democratic efforts to spend portions of the 

Social Security surplus for “foreign 

aid and big government programs.”

Agents of the NRCC had knowledge of the USFNʼs intention to 

forward all or part of the $500,000 

donation to a third party to pay for 

issue advertisements. Therefore, 

the Committee violated the Federal 

Election Campaign Act by using 

nonfederal funds to pay for an activity that should have been allocated 

between its federal and nonfederal 

accounts.

1

 The regulations that governed the ability of national party committees to raise 

soft money have changed since 1999. 

As a result of the Bipartisan Campaign 

Reform Act, national party committees 

have been prohibited from soliciting, 

receiving, directing to another person or 

spending nonfederal funds since November 6, 2002. (continued on page 4)
Federal Election Commission RECORD June 2004

4

Advisory

Opinions

AO 2004-8

Severance Pay Awarded to 

Employee Who Resigns To 

Run for Congress

In keeping with its past practice, 

the American Sugar Cane League 

(ASCL) may provide severance pay 

and health insurance benefits to a 

former executive who is running for 

Congress without violating the Federal Election Campaign Actʼs (the 

Act) prohibition on contributions by 

corporations.

account designated “Bush-Cheney 

2000, Inc.—Media.” After the November 7, 2000, Presidential election, the Committee redesignated 

this bank account “Bush-Cheney 

2000, Inc.—Recount Fund.” The 

account was used to raise funds 

and pay costs associated with the 

recount; however, the Committee failed to include that activity 

in disclosure reports filed with the 

Commission. Filings submitted to 

the IRS in 2002 and 2003 suggest 

that the recount account raised approximately $11 million and spent 

approximately $13 million.

Bush-Cheney 2000 admitted that 

the failure to report the receipts 

and disbursements associated with 

its recount activity and to properly 

itemize them where appropriate 

violated the Act. In addition to 

paying the $90,000 civil penalty, 

the Committee agreed to cease and 

desist from violating these sections 

of the Act and agreed to disclose its 

recount receipts and disbursements 

to the FEC.

Additional information on this 

case is available from the Commissionʼs Public Records Office and 

through the Enforcement Query System on the FECʼs web site. Search 

for case number 5199. 

 —Meredith Trimble

MUR 5199: Campaign 

Committeeʼs Failure to 

Report Recount Activities

The Commission recently entered 

into a conciliation agreement with 

Bush-Cheney 2000, Inc. resulting in 

a $90,000 civil penalty. The conciliation agreement resolves violations 

of the Federal Election Campaign 

Act (the Act) stemming from BushCheney 2000ʼs failure to report to 

the FEC receipts and disbursements 

associated with its recount activities.

Background

The Act requires authorized committees of candidates for federal office to report the total amount of all 

receipts and disbursements, and to 

itemize certain transactions when the 

aggregate amount or value exceeds 

$200 in an election cycle. In Advisory Opinions 1998-26 and 1978-92, 

the Commission held that while 

separate organizations established 

solely to fund a recount effort would 

not be required to file disclosure 

reports, a federal political committee establishing a bank account for 

recount purposes must report those 

receipts and disbursements.

Conciliation Agreement

On April 19, 2004, the Commission entered into a conciliation 

agreement with Bush-Cheney 2000, 

Inc. According to the agreement, 

Bush-Cheney 2000 held a bank 

Conciliation

The NRCC and its treasurer, 

Christopher J. Ward, agreed to pay 

a $280,000 civil penalty as part of 

its conciliation agreement with the 

Commission.

For additional information on this 

case, please visit the Commissionʼs 

Public Records Office or consult 

the Enforcement Query System on 

the FECʼs web site and enter case 

number 4953.

 —Michelle Ryan

Compliance

(continued from page 3) 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 Commissionʼs 

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.
June 2004 Federal Election Commission RECORD 

5

Background

ASCL, a nonprofit corporation 

representing Louisiana sugar cane 

growers and processors, plans to 

provide Charles Melancon, its former President and General Manager, 

a proposed severance package of full 

salary and full health insurance coverage for one year. Mr. Melancon, 

who held his position with ASCL for 

11 years, resigned on February 20, 

2004, in order to become a candidate 

for the U.S. House of Representatives.

ASCL has offered severance 

benefits to certain former employees since 1987. While there is no 

written policy for offering severance benefits and no formula for 

the calculation of those benefits, 

ASCL considers such factors as the 

position held, the length of time 

employed and the evaluation of job 

performance in determining whether 

to offer severance benefits and the 

size of those benefits. The content 

of severance packages granted to 

employees in the past varies. For 

example, a Vice President and General Manager with 15 years tenure 

received 3 months pay without 

continuation of health benefits; more 

recently, an employee with a total 

of 24 years of service, including 16 

years as Vice President and Director 

of Research, received one yearʼs full 

pay and health benefits coverage, 

his company-owned computer and 

the option to purchase his company 

owned car for its “Blue Book” value. 

In its request, ASCL noted that the 

severance package it is prepared 

to offer Mr. Melancon is identical 

to the package individual board 

members considered for him in 2001 

when there was no prospect of his 

becoming a federal candidate. 

Analysis

As an incorporated entity, ASCL 

is prohibited from making any “contribution or expenditure” in connection with a federal election 2 U.S.C. 

§441b(a); 11 C.F.R. 114.2(b)(1). 

The term “contribution” includes 

“any gift, loan, advance or deposit 

of money or anything of value made 

by any person for the purpose of 

influencing any election for Federal 

office.” 2 U.S.C. §431(8)(A). Thus, 

ASCL may only provide Mr. Melancon with the proposed severance 

package if it does not constitute a 

contribution under the Act or Commission regulations. 

The Act also prohibits the conversion of campaign funds to any 

“personal use.” If a third party pays 

a candidateʼs expenses that would 

otherwise be deemed “personal 

use” expenses, the payments are 

considered contributions unless the 

third party would have made the 

payments “irrespective of the candidacy.” 11 CFR 113.1(g)(6). For 

example, compensation payments 

are considered contributions unless:

• The compensation results from 

bona fide employment that is genuinely independent of the candidacy;

• The compensation is exclusively in 

consideration of services provided 

by the employee as a part of this 

employment; and

• The compensation does not exceed 

the amount that would be paid to 

any other similarly qualified person 

for the same work over the same 

period of time.

Applying these criteria, ASCLʼs 

proposed severance package will 

not result in a prohibited corporate 

contribution. ASCL has a sufficient 

corporate record of providing severance packages to departing employees to demonstrate that the package 

for Mr. Melancon relates exclusively 

to services rendered in his bona fide

employment with ASCL. Additionally, the proposed package appears 

to be proportionate to past severance 

packages offered by ASCL.

Mr. Melanconʼs proposed severance package differs from a proposal 

for partial paid leave considered in 

AO 2000-1, where the Commission 

determined that partial paid leave 

for a federal candidate would not 

be compensation “irrespective of 

the candidacy” because the decision 

AO 2004-10

“Stand By Your Ad” 

Disclaimer Requirements for 

Radio Advertisements

A ten-second message sponsored 

by a federal candidate and read live 

on the air by a Metro Networks 

reporter must include the disclaimer 

statement required for candidatesponsored radio ads; however, as 

an exception to the general rule, a 

Metro Networks reporter may read 

the required “stand by your ad” 

statement, rather than the federal 

candidate authorizing the sponsorship message. 

Background

Under the Bipartisan Campaign 

Reform Actʼs so-called “stand by 

your ad” requirement, radio advertisements authorized by a federal 

candidate must include “an audio 

statement by the candidate” that 

identifies the candidate and states 

that he or she has approved the communication. 11 CFR 110.11(c)(3)(i). 

to grant the request was solely at 

the discretion of the firm and based 

on factors not exclusively tied to 

services provided by the employee. 

In contrast, while the determination 

by ASCL was discretionary in part, 

it focused on factors related solely 

to Mr. Melanconʼs service, such as 

length of service, position and job 

performance. Moreover, the fact 

that a similar package was proposed 

for Mr. Melancon years before he 

considered running for office is 

additional evidence that ASCLʼs 

proposed package is compensation 

“irrespective of the candidacy.” 

Concurring Opinion

Commissioner McDonald issued 

a concurring opinion on May 6, 

2004.

Date Issued: April 30, 2004; 

Length: 5 pages.

 —Amy Pike

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

6

Court Cases

New Litigation

Shawn OʼHara v. FEC

On March 29, 2004, the National 

Committee of the Reform Party of 

the USA (RPUSA) and its Chairman, Shawn OʼHara, petitioned 

the U.S. Court of Appeals for the 

District of Columbia Circuit to review the Commissionʼs final deterAdvisory Opinion Requests

AOR 2004-14

Federal candidateʼs appearance in 

public service announcement (U.S. 

Representative Tom Davis, April 23, 

2004)

AOR 2004-15

Permissibility of corporatesponsored radio and television ads 

referring to federal candidates aired 

within 30 days of Presidential primary to promote DVD sales (David 

T. Hardy and Bill of Rights Educational Foundation, March 15, 2004)

AOR 2004-16

Corporationʼs purchase of advertising space to publish political party 

committeesʼ positions on campaignissues (Altria Group, Inc. and Altria 

Corporate Services, Inc., May 11, 

2004)

AOR 2004-17

Compensation for federal candidateʼs part-time consulting work as 

possible contribution to campaign 

(Becky Armendariz Klein, May 11, 

2004)

Alternate Disposition of 

Advisory Opinion Request

AOR 2004-13

This request was closed without issuance of an opinion because 

it did not qualify as an advisory 

opinion request. The request posed 

a hypothetical situation rather than 

setting forth a specific transaction or 

activity as required under 11 CFR 

112.1(b).

Submitted by Allyson Schwartz 

for Congress, the request asked 

2

 AO 2004-1 addressed the “stand 

by your ad” requirement for a television communication authorized by two 

federal candidates. The Commission 

permitted one candidate to speak for 

both candidates so long as the approval 

statement conveyed that both candidates 

approved the advertisement. 

1

 The Commission assumes for the 

purposes of this request that the federal 

candidate would not be physically present with the reporter, and thus would not 

be available to read the statement. 

The message need not be read live 

in real time by the candidate, but the 

candidate must speak the required 

authorization statement. 

Metro Networks is a national 

company that provides more than 

2,000 radio stations throughout the 

United States with live traffic, news, 

sports and weather reports. Metro 

Networks generates revenue by selling ten-second “live read” sponsorship messages that the companyʼs 

reporters read at the end of their 

reports. An “opening mention” 

precedes the actual report and also 

identifies the person purchasing the 

sponsorship message. 

Metro Networks intends to 

market the ten-second sponsorship 

messages to federal candidates. 

However, Metro Networks stated 

that the live nature of the reports 

and limitations of their broadcasting equipment make it “physically 

impossible” for them to include any 

statement spoken by a candidate 

himself or herself. The reports are 

produced live in Metro Networks 

studios and from mobile units and 

aircrafts with Metro Networks 

reporters interacting live in real time 

with radio station personnel. Therefore, Metro Networks asserted that 

its reporter would be able to read a 

statement for a sponsoring candidate, but Metro Networks would not 

be equipped to play a recorded voice 

of a candidate. 

Analysis

The Commission has long recognized that in certain circumstances it 

is impracticable to provide a full disclosure statement in the prescribed 

manner. For example, an exception 

in Commission regulations covers 

skywriting, water towers, wearing 

apparel or other means of displaying 

an advertisement when full application of the disclaimer requirement 

would be “impracticable.” 11 CFR 

110.11(f)(1)(ii) 

Advisory Opinions

(continued from page 5)

In this case, the specific physical and technological limitations 

Metro Networks describes make it 

impracticable to require the approving candidate to speak the “stand 

by your ad” statement himself or 

herself. Thus, while the disclaimer 

is required, it is permissible for a 

Metro Networks reporter to speak 

for the candidate, or candidates, who 

authorized the advertisement.1 This 

approach is practical and as faithful 

as possible to the “stand by your ad” 

statute, while avoiding unnecessary 

burdens on political speech that 

could result from a rigid application 

of all disclaimer provisions in all 

instances. See AO 2004-1.2 

 An appropriate disclaimer 

statement to be read by the Metro 

Networks reporter would be, “Paid 

for by the committee to re-elect 

candidate ABC. ABC approved this 

message.”

 —Kathy Carothers

whether any candidate-contributed 

funds carried over from her opposing candidateʼs primary election to 

her general election campaign would 

be considered an “expenditure from 

personal funds” in the general election for purposes of the “Millionairesʼ Amendment.”
June 2004 Federal Election Commission RECORD 

7

LaRoucheʼs Committee for a New 

Bretton Woods v FEC

On April 9, 2004, LaRoucheʼs 

Committee for a New Bretton 

Woods (LCNBW) asked the U.S. 

Court of Appeals for the District of 

Columbia to review the FECʼs determination requiring the committee to 

repay to the U.S. Treasury a portion 

of the Presidential primary matching funds it received for the 2000 

Presidential election. The March 1, 

2004, repayment determination resulted from LCNBWʼs non-qualified 

campaign expenses and its receipt 

of funds in excess of its entitlement. 

See the May 2004 issue of the Record, page 15. 

On April 27, 2004, the Commission moved to dismiss this case on 

the ground that the court lacked 

jurisdiction because LCNBW is also 

concurrently seeking an administrative reconsideration from the Commission.

 —Amy Kort

Congressional Committees 

Fail to File Reports

The following Congressional 

campaign committees failed to file 

required disclosure reports:

• Bryan S. Coffman Congressional 

Campaign Committee (12-Day 

Pre-Primary report for Kentucky 

primary election);

• Jim Holt for U.S. Senate (12-Day 

Pre-Primary report for Arkansas 

primary election);

• Hoosiers for Hardy (12-Day PrePrimary report for Indiana primary 

election);

• Kannensohn for Congress (April 

Quarterly report and 12-Day 

Pre-Primary report for Kentucky 

primary election); and

• Swint for Congress Committee 

(12-Day Pre-Primary report for 

West Virginia Primary)

Prior to the reporting deadlines, 

the Commission notified committees 

of their filing obligations. Committees that failed to file the required 

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 candidateʼs 

election. 2 U.S.C. §437g(b). The 

agency may also pursue enforcement 

actions against nonfilers and late filers on a case-by-case basis. 

 —Amy Kort

Nonfilers

Correction

FEC v. Malenick, et al. 

The May 2004 Record incorrectly 

stated that under FEC v. 

Massachusetts Citizens for Life, 

479 U.S. 238 (1986), and Buckley 

v. Valeo, 424 U.S.1, 79 (1976), 

“An organization that is regulated 

under the Act as a ʻpolitical 

committeeʼ must also have as its 

major purpose the nomination or 

election of a federal candidate” 

(emphasis added). The 

statement should have read, “An 

organization that is regulated 

under the Act as a ʻpolitical 

committeeʼ must also have as its 

major purpose the nomination or 

election of a candidate.” 

mination that the Committee repay 

$333,558, plus interest, to the United 

States Treasury. 

Background. On September 26, 

2002, the Commission issued the 

Final Report of the Audit Division 

on the Reform Party 2000 Convention Committee, which included 

a determination that the RPUSA 

repay to the U.S. Treasury $333,558 

of the federal funding it received 

for the RPUSAʼs 2000 Presidential 

nominating convention. The Commission based its determination 

on audit findings that the RPUSA 

spent a portion of its public funds on 

expenditures not considered permissible under the Presidential Election 

Campaign Fund Act. The RPUSA 

was notified of the Commissionʼs 

repayment determination and provided with a copy of the Final Audit 

Report on September 30, 2002. 

On November 26, 2002, the 

RPUSA submitted a written request for administrative review of 

the repayment determination. On 

October 8, 2003, the Commission issued its Post-Administrative 

Review Repayment Determination, 

ordering the $333,558 repayment to 

the U.S. Treasury. The RPUSA was 

notified of this action on October 

14, 2003, and provided with a copy 

of the Commissionʼs Statement of 

Reasons. 

In a letter dated November 14, 

2003, the RPUSA requested that 

the Commission rehear its repayment determination; the request was 

denied on February 18, 2004.

Court Action. On March 31, 

2004, the U.S. Court of Appeals 

for the District of Columbia Circuit 

ordered on its own motion that the 

RPUSA show cause why its petition 

for review should not be dismissed 

for lack of jurisdiction for failure to 

timely file. 

U.S. Court of Appeals for the District of Columbia Circuit, 04-1106.

 —Elizabeth Kurland
Federal Election Commission RECORD June 2004

8

Matching Funds for 2004 Presidential Candidates: 

April Certification

Candidate Certification Cumulative 

April 2004 Certifications

Wesley K. Clark (D)1 $62,789.71 $7,615,360.39

John R. Edwards (D)2 $412,963.51 $6,521,338.88

Richard A. Gephardt (D)3 $0 $4,104,319.82

Dennis J. Kucinich (D)4 $248,001.095 $3,075,300.72

Lyndon H. LaRouche, Jr. (D)6 $62,879.82 $1,339,344.85

Joseph Lieberman (D)7 $24,121.00 $4,257,830.85

Alfred C. Sharpton (D)8 $0 $100,000.00

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 This certification was part of a prior certification that had not been fully paid. The 

Commission recertified the candidate for this amount on April 30, 2004. Thus, this 

amount in not included in the candidateʼs cumulative certifications.

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

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

2004.

8 Reverend Sharpton became ineligible to receive matching funds on March 15, 2004.

Commission Certifies 

Matching Funds for 

Presidential Candidates

On April 30, 2004, the Commission certified $810,755.13 in federal 

matching funds to five Presidential 

candidates for the 2004 election. The 

U.S. Treasury Department made the 

payments on May 3, 2004. Thus far, 

the seven eligible candidates have 

been certified $27,013,495.51. 

Presidential Matching Payment 

Account

Under the Presidential Primary 

Matching Payment Account Act, the 

federal government will match up to 

$250 of an individualʼs 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 committeeʼs 

spending, limit their personal spending for the campaign to $50,000 and 

submit to an audit by the Commission. 26 U.S.C. §§9033(a) and (b) 

and 9035; 11 CFR 9033.1, 9033.2, 

9035.1(a)(2) and 9035.2(a)(1).

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. 26 

CFR 702.9037-2. Only contributions 

from individuals in amounts of $250 

or less are matchable. 

The chart at right lists the amount 

most recently certified to each 

eligible candidate who has elected 

to participate in the matching fund 

program, along with the cumulative 

amount that each candidate has been 

certified to date. 

Sharpton—Suspension of 

Public Funds

On March 11, 2004, the Commission determined Reverend Alfred C. 

Sharpton eligible to receive matching funds. At the same time, the 

Commission opened an investigation to resolve whether Reverend 

Sharpton had exceeded his $50,000 

personal expenditure limitation. See 

11 CFR 9039.3. On March 29, the 

Commission made an initial determination to suspend matching payments to Reverend Sharpton based 

on his committeeʼs March 2004 

monthly report, which showed that 

he had made expenditures from his 

personal funds that were more than 

Public Funding

double the $50,000 limit. 11 CFR 

9033.9(a).

On April 21, 2004, Reverend 

Sharpton and his principal campaign 

committee submitted materials 

in response to the Commissionʼs 

subpoena and initial determination to suspend funds. 11 CFR 

9033.9(b) and 9033.10(b). The 

information showed that Reverend 

Sharpton knowingly and substantially exceeded his $50,000 personal 

expenditure limitation. Therefore, 

on April 29, 2004, the Commission made a final determination to 

suspend matching fund payments 

to Reverend Sharpton and Sharpton 

2004. The Commission had certified 
June 2004 Federal Election Commission RECORD 

9

 

 

 

 1. American Nursery and Landscape Association—PAC 

 12 Day Pre-General 2002 $1,000 

 2. American Nursery and Landscape Association—PAC 

 30 Day Post General 2002 $906 

 3. Campaign for Americaʼs Future $145 

 4. Committee to Elect Frank W. Ballance Jr. $01

 5. DeLay for Congress $3,5002

 6. Friends of Jim Farrin $1,100 

 7. Gay and Lesbian Victory Fund $3,100 

 8. Jones, Walker, Waechter, Poitevent, 

 Carrere & Denegre PAC $1,000 

 9. Local 617 COPE Committee $7003

10. Louisville & Jefferson County Republican 

 Executive Committee $2,850 

11. Mel Watt for Congress Committee $01

12. Mike Greene for Congress Committee $7,8752

13. Monterey County Republican Central Committee Fed $580 

14. NEWSTAR PAC (FKA The New Century Federal PAC) $750 

15. Old National Bank In Evansville OLBANK PAC $900 

16. Patriot PAC $1,350 

17. Philip Lowe for Congress $19,0002

18. Salem Communications Corporation PAC $1,100 

19. Select Milk Producers PAC $2,250 

20. Sheet Metal Workers International, 

 Association Local 28 PAC $2,175 

21. Snyder for Congress Campaign Committee $2,000 

22. Stace Williams for US Congress $4,5002

23. Sutton for Congress $253

24. Van Auken for Congress Committee $2,000 

25. White Mountain PAC $4,550 

Committees Fined for 

Nonfiled and Late Reports

The Commission recently publicized its final action on 25 new 

Administrative Fine cases, bringing 

the total number of cases released to 

the public to 943, with $1,239,644 in 

fines collected by the FEC.

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 nonfiled 

reports—and for reports filed so late 

as to be considered nonfiled—are 

also determined by the financial 

activity for the reporting period and 

any prior violations. 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 committee and the treasurer 

are assessed civil money penalties 

when the Commission makes its 

Administrative 

Fines

Committees Fined and Penalties Assessed

1

The Commission waived this civil money penalty because the respondents 

have demonstrated the existence of extraordinary circumstances that were 

beyond their control and that were for a duration of at least 48 hours.

2

 This civil money penalty has not been collected.

3 This civil money penalty was reduced due to the level of activity on the report.

$79,708.99 in matching payments 

to Reverend Sharpton on April 1. 

The U.S. Treasury was scheduled 

to pay these funds on May 1. See 

26 CFR 702.9037-2. However, as a 

result of the Commissionʼs April 29 

final determination, the Commission 

notified the Treasury not to pay this 

amount. See 11 CFR 9033.9(d)(2). 

A candidate whose payments are 

suspended for exceeding the expenditure limitation is not entitled to 

receive any further matching payments. 11 CFR 9033.9(d)(2).

 —Amy Kort

final determination. Unpaid civil 

penalties are referred to the Department of the Treasury for collection.

The committees listed in the chart 

above, 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 and Public Records Office at 800/424-9530.

 —Amy Kort
Federal Election Commission RECORD June 2004

10

Outreach Publications

Reporting Roundtables

On July 7, 2004, the Commission 

will host two roundtable sessions on 

election year reporting, including 

new disclosure requirements under 

the Bipartisan Campaign Reform 

Act of 2002 (BCRA). See the chart 

below for details. Both sessions will 

be followed by a half-hour reception 

at which each attendee will have an 

opportunity to meet the campaign 

finance analyst who reviews his/her 

committeeʼs reports. Representatives 

from the FECʼs Electronic Filing 

Office will also be available to meet 

with attendees.

Attendance is limited to 30 

people per session, and registration 

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

before registering or sending money 

to ensure that openings remain. The 

registration form is available on the 

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

pages/infosvc.htm and from Faxline, 

the FECʼs automated fax system 

(202/501-3413, request document 

590). For more information, call the 

Information Division at 800/424-

9530, or locally at 202/694-1100.

 —Amy Kort

Roundtable Schedule

Date Subject Intended Audience

July 7

9:30-11 a.m.

Reception

11-11:30 a.m.

July 7

1:30-3 p.m.

Reception

3-3:30 p.m.

Election Year Reporting 

for Candidates and Their 

Committees, plus “Meet 

Your Analyst” reception

Election Year Reporting 

for PACs and Party Com- mittees, plus “Meet Your 

Analyst” reception

Individuals responsible 

for filing FEC reports for 

Candidate Committees 

(Up to 30 may Attend)

Individuals responsible 

for filing FEC reports for 

PACs and Party Committees (Up to 30 may 

Attend)

New Campaign Guide for 

Congressional Candidates 

and Committees Available 

Online

A revised version of the Campaign Guide for Congressional 

Candidates and Committees is now 

available on the FEC web site at 

http://www.fec.gov/pages/candguide2004/contents.htm. The new 

guide provides Congressional candidates and their committees with 

clear explanations of the Federal 

Election Campaign Act, as amended 

by the Bipartisan Campaign Reform 

Act of 2002, and Commission reguFEC Annual Report 2003 

Available Online

The Commissionʼs Annual Report 

2003 is now available online at 

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

htm. Printed copies of the report will 

also be available in June. To order 

a free copy, contact the Information 

Division at 800/424-9530, or locally 

at 202/694-1100.

 —Amy Kort

Public Appearances

June 9, 2004

University of Pennsylvania

Washington, DC

Chairman Smith

Jason Bucelato

June 9, 2004

Aspin Center

Washington, DC

Commissioner McDonald

June 11-13, 2004

California Political Attorneys 

Association

Indian Wells, CA

Chairman Smith

June 14, 2004

State Department/Foreign Service 

Nationals

Washington, DC

Vice-Chair Weintraub

June 18-20, 2004

American Constitution Society

Washington, DC

Chairman Smith

lations and advisory opinions. The 

guide also provides clear reporting 

advice, along with examples of how 

to report common transactions. 

A printed version of the Campaign Guide for Congressional 

Candidates and Committees will be 

available later this summer and will 

be sent immediately to all registered 

candidate committees. The availability of the printed version will be 

announced in a future issue of the 

Record. 

 —Amy Kort
June 2004 Federal Election Commission RECORD 

11

contribution if coordinated communications, 3:12

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

2004-3: Conversion of authorized 

committee to multicandidate committee, 5:5

2004-4: Abbreviated name of trade 

association SSF, 5:7

2004-6: Web-based meeting services 

to candidates and political committees, 5:7

2004-7: MTVʼs mock Presidential 

election qualifies for press exemption, 5:8

2004-8: Severance pay awarded to 

employee who resigns to run for 

Congress, 6:4

2004-9: State committee status, 5:10

2004-10: “Stand by your ad” disclaimer for radio ads, 6:5

Compliance

ADR program cases, 1:25; 4:15

Administrative Fine program cases, 

1:24; 4:14; 6:9

Enforcement Query System, disclosure policy for closed enforcement 

matters and press release policy 

for closed MURs; “enforcement 

profile” examined, 1:6

MUR 4919: Fraudulent misrepresentation of opponentʼs party through 

mailings and phone banks, 6:2

MUR 4953: Party misuse of nonfederal funds for allocable expense, 

6:3

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

MUR 5199: Campaign committeeʼs 

failure to report recount activities, 

6:4

MUR 5229: Collecting agentʼs failure to transfer contributions, 1:7

MUR 5328: Excessive contributions 

to and from affiliated leadership 

PACs, 5:1

MUR 5357: Corporationʼs reimbursement of contributions, 2:1

Naming of treasurers in enforcement 

matters, proposed statement of 

policy, 3:4

Nonfilers, 3:16; 4:13, 6:7

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: Candidateʼs loans to 

campaign apply to Millionairesʼ 

Amendment threshold, 2:2

2003-32: Federal candidateʼs 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 PACʼs 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

2003-39: Charitable matching plan 

conducted by collecting agent of 

trade association, 3:10

2003-40: Reporting independent 

expenditures, 3:11

2004-1: Endorsement ads result in 

Index

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

– Lovely, 5:12

– McConnell, 1:1

– LaRoucheʼs Committee for a New 

Bretton Woods, 6:7

– OʼHara, 6:6

– Wilkinson, 4:9

– Sykes, 4:12

FEC v. _____ 

– California Democratic Party, 4:9

– Friends of Lane Evans, 3:9

– Malenick, 5:13

Regulations

Administrative Fine program extension, final rule, 3:1

Contributions by minors, Notice of 

Proposed Rukemaking, 5:3

Electioneering communications, 

FCC database, 3:3

Federal election activity periods, 3:1

Inaugural committees, Notice of 

Proposed Rulemaking, 5:1

Leadership PACs, final rules, 1: 18

Overnight delivery safe harbor, 3:1

Political committee definition, Notice of Proposed Rulemaking, 4:1; 

Public hearing, 5:3; extension of 

Commissionʼs consideration, 6:1

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

Convention reporting for Connecticut and Virginia, 5:10

Kentucky special election reporting, 

1:9
FEDERAL ELECTION COMMISSION

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Federal Election Commission RECORD June 2004