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107TH CONGRESS REPT. 107–131 " ! HOUSE OF REPRESENTATIVES 1st Session Part 1

BIPARTISAN CAMPAIGN REFORM ACT OF 2001

JULY 10, 2001.—Committed to the Committee of the Whole House on the State of

the Union and ordered to be printed

Mr. NEY, from the Committee on House Administration,

submitted the following

ADVERSE REPORT

together with

MINORITY VIEWS

[To accompany H.R. 2356]

[Including cost estimate of the Congressional Budget Office]

The Committee on House Administration, to whom was referred

the bill (H.R. 2356) to amend the Federal Election Campaign Act

of 1971 to provide bipartisan campaign reform, having considered

the same, report unfavorably thereon without recommendation

The Committee on House Administration, to whom was referred

the bill (H.R. 2356) to amend the Federal Election Campaign Act

of 1971 to reform the financing of campaigns for elections for Federal office, and for other purposes, having considered the same, report unfavorably thereon.

DISCUSSION OF THE LEGISLATION

The Committee on House Administration has unfavorably reported H.R. 2356, the ‘‘Bipartisan Campaign Finance Reform Act’’.

While the bills bearing the name of our colleagues Mr. Shays and

Mr. Meehan have changed and evolved over the years, the core

principal underlying their legislation had always been their purported ‘‘ban’’ on soft money. In fact, no bill to ever carry the ShaysMeehan label would have really banned soft money, in as much as

restrictions on soft money expenditures were never even sought

(except for the constitutionally suspect attempt to restrict issue advertising). Rather, Shays-Meehan and other reform proponents always used the term ‘‘ban’’ to mean a prohibition on donations of

soft money to political parties. The true test of what constituted
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‘‘real’’ reform had always been whether or not soft money was

‘‘banned’’ as that term was defined by reform proponents, i.e. a

simple donation ban. H.R. 2356 fails even this meager test. It permits donations of soft money, in amounts up to $10,000 per source,

to state and local parties, and it does nothing to stop the flow of

soft money to any organization other than a political party. Accordingly, H.R. 2356 fails to ban soft money under any definition.

Though the recognition that political parties play an important

role in registering voters and getting them to the polls, and should

be able to raise non-federal funds for these purposes, could be regarded as a modest improvement over the complete assault on political parties in previous iterations of Shays-Meehan, the Committee still reported H.R. 2356 unfavorably due to numerous fatal

flaws. Though different in many respects from prior versions, the

new Shays-Meehan bill remains an unconstitutional, ill-considered

piece of legislation. No evidence has been produced to this Committee of a ‘‘corruption’’ problem stemming from soft money contributions to political parties. Even if there had been such a showing, H.R. 2356 does not even attempt to be a narrowly tailored

remedy. If it were ever to become law, it would have precisely the

opposite effect its proponents intend. Rather than diminish the

power of ‘‘special interest’’ groups, it would actually make these

groups even more powerful than they are today. Independent advocacy groups, unions and corporations would see their power and influence rise, while our national political parties would be debilitated. The result would be destabilization and factionalism, neither

of which is in the best interest of our country.

Under H.R. 2356, for the first time, House and Senate candidates

would be treated differently under federal election law, in terms of

individual contribution limits. As drafted, H.R. 2356 would allow

House candidates to raise only $1,000 per individual per election,

while Senate candidates would be permitted to raise $2,000 per individual per election. There is no substantive policy rationale for

such disparate treatment of candidates for the two different Houses

of Congress. The provision is cynically included for no reason other

than its sponsors’ belief that it increases their chances of cobbling

together a majority on the House floor. No evidence was provided

at any point indicating that House Members are more likely to be

corrupted by a $1001 donation then our Senate colleagues, yet that

would be the only constitutionally acceptable premise for this proposed disparate treatment. It is understandable why our colleagues

in the other body would have no problem with such a provision, but

it is inconceivable why any House Member would support such an

unfair and unbalanced provision.

Additionally, Senate candidates receive more preferential treatment in the form of a ‘‘millionaire’s amendment’’ that permits them

to raise amounts five times greater than those permitted all other

candidates, when faced with an opponent who spends over a certain amount of personal funds on their campaign. House candidates

who find themselves in a race against a wealthy opponent receive

no such relief. Again, the provision is included only to maximize

the bill’s chances for passage, there being no policy rationale for

such disparate treatment.
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CONSTITUTIONALLY PROTECTED ISSUE ADVOCACY

As it has in the past, H.R. 2356 attempts to impose unconstitutional restrictions on protected expression. Those who seek to impose such restrictions argue that they are necessary because unions

and corporations are using issue advertisements to influence campaigns in a manner not intended or permitted by the Federal Election Campaign Act.

The bright line test between express and issue advocacy was laid

down by the Supreme Court in Buckley v. Valeo, and it has been

reaffirmed repeatedly by lower courts since. Numerous attempts by

the Federal Election Commission to expand its regulatory reach

over communications which do not expressly advocate the election

or defeat of clearly identified federal candidates (the definition of

issue ads) have been rejected by the courts.

Those who advocate new restrictions on non-express advocacy

communications are frustrated by these court decisions. But it is

the First Amendment on which the Supreme Court and other

courts rely for the proposition that express terms of advocacy are

required for a communication to be subject to government regulation. Those who seek greater regulation seem to view the First

Amendment, not as a protection to the citizens from government

regulation of political speech, but rather as a ‘‘loophole’’ to be closed

in order to expand Congress’s ability to regulate elections. Of

course, the First Amendment, which begins ‘‘Congress shall make

no law * * *’’ was specifically designed to preclude the government

from restricting the speech of the people. Some Members of Congress may feel frustrated by the things being said about them, but

the First Amendment prevents Congress and its Members from

using their powers to restrict, regulate or punish their critics.

It is not as if, in some shortsighted fashion, the Supreme Court

failed to foresee the potential electoral impact of this kind of issue

advocacy. The decision to leave such communications unrestricted

was not an oversight that requires Congressional correction, rather,

it was a deliberate refusal to permit government intrusion on protected expression. As the Court said:

Discussion of public issues and debate on the qualifications of candidates are integral to the operation of the system of government established by our Constitution. The

First Amendment affords the broadest protection to such

political expression in order ‘‘to assure [the] unfettered

interchange of ideas for the bringing about of political and

social changes desired by the people.’’ Buckley v. Valeo,

424 U.S. 1, 14 (1976).

The attempt by H.R. 2356 to restrict issue advocacy is an unconstitutional overreach and would likely be struck down by the Court.

As this is the only provision in the bill which attempts to restrict

how unions, corporations, and advocacy groups spend their organizations’ treasury funds, as opposed to donating them, the result

will be a political world where ‘‘special interest’’ groups have absolutely unfettered ability to spend soft dollars, while the political

parties, forbidden from receiving such funds, will not be able to

spend any. Clearly, H.R. 2356 is not a bill that will minimize the

influence of ‘‘special interests’’ as such interests are often referenced by the advocates of H.R. 2356.
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In addition, H.R. 2356 is not narrowly tailored to address a particular or compelling governmental interest. In fact, disclosure of

the identity of sponsors of communications is the only interest

identified by the advocates of H.R. 2356 to justify government regulation of speech which the Supreme Court has previously ruled is

not subject to government regulation. If indeed disclosure is the

compelling governmental interest, the provisions of H.R. 2356 extend far beyond the degree of regulation necessary to achieve the

goal. In fact, H.R. 2356 has the ultimate effect of chilling and even

precluding certain communications by creating an expansive regulatory system which dictates not only disclosure but also the permissible sources of funding, the timing and content of speech otherwise protected by the First Amendment.

COORDINATION

The expansive definition of behaviors that constitute coordination

between citizens, citizens groups and candidates for public office

would discourage (if not eliminate) communications between citizens and their elected representatives. Under H.R. 2356, any payment made pursuant to a ‘‘general or particular understanding’’ with an elected official would be treated as a contribution and

therefore severely limited. Further, such ‘‘coordination’’ does not

even require ‘‘collaboration or agreement’’ to establish coordination.

With such a vague and sweeping definition, a simple meeting between an individual and his/her Member of Congress could trigger

an FEC investigation into the subject of the meeting and the issues

discussed. As Lawrence Gold, Associate General Counsel for the

AFL–CIO testified; ‘‘In its investigation into alleged coordination,

the [FEC] has used its subpoena power to seek to identify, and inquire into the details of virtually every contact between a corporation or union, acting through it officers, directors, members and allies, and a candidate, political party, or anyone else who might be

acting on the candidate’s behalf.’’ Unquestionably, this will have a chilling effect on the rights of

citizens and citizen groups to speak and associate freely. This provision is in direct conflict with one of the stated goals of the proponents, i.e. that reform will make citizens more willing to become

involved in politics. Clearly the opposite is true. People who know

that a simple meeting with a Congressman could trigger a costly

and burdensome investigation will simply disassociate themselves

from politics.

The First Amendment not only protects political speech but also

the right of the citizens to petition their government for redress of

grievances. H.R. 2356 ignores this protected right afforded the people by the First Amendment and would convert such activities to

potentially incriminating evidence of illegal political campaign activity through ‘‘coordination’’. The definition of ‘‘coordination’’ is largely left to the Federal Election Commission, other than directing the Commission to define

‘‘coordination’’ expansively and with utter disregard for the applicable decisions of the Supreme Court and other federal courts over

the past twenty-five years. Such important definitions should not

and cannot be delegated by the Congress with nothing more than

a list of the factors the Federal Election Commission should consider, with no legislative guidance as to the decision the Commis-
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sion is to make with respect to each of the factors. H.R. 2356 also

repeals the regulations adopted by the Federal Election Commission on the subject of ‘‘coordination’’ which resulted from a decision

of the federal district court in FEC v. Christian Coalition. In other

words, H.R. 2356 specifically directs the federal agency charged

with enforcing the law to promulgate regulations on a subject in direct contravention of an order of the federal court to that agency.

Such disregard of the law is not appropriate by either the agency

or the Congress.

SUMMARY OF THE LEGISLATION

SECTION-BY-SECTION DESCRIPTION

TITLE I—REDUCTION OF SPECIAL INTEREST INFLUENCE

Sec. 101. Soft money of political parties

• Prohibits national party committees (including an officer or

agent acting on their behalf and entities they directly or indirectly

establish, finance, maintain, or control) from soliciting, receiving,

directing, transferring, or spending money that is not regulated by

federal election law (soft money). • In general, prohibits soft money spending for a federal election

activity by state and local party committees (including an officer or

agent acting on their behalf and entities they directly or indirectly

establish, finance, maintain, or control) or by a group of state or

local candidates or officials. • Allows state and local parties to use some funds raised in accord with state law (soft money) for voter registration drives in the

last 120 days of a federal election, voter identification efforts, getout-the-vote drives (GOTV), and generic activities, if they: match

soft money equally with hard money (i.e., a 50–50 allocation formula); do not refer to a clearly identified federal candidate; do not

pay for broadcast, cable, or satellite communications (unless they

refer solely to state and local candidates); receive no donations

from any person (including an entity established, financed, maintained, or controlled by that person) in amounts greater than

$10,000 a year for such activities; and use only funds raised by the

state, district, or local party expressly for such purposes and include no funds transferred from other party committees (and

agents or officers acting on their behalf or entities they directly or

indirectly establish, finance, maintain, or control). Prohibits any

funds for special soft money accounts from being solicited, received,

directed, transferred, or spent in the name of national parties or

federal candidates or officials or by joint fundraising activities by

two or more party committees.

• Defines federal election activity to include: (1) voter registration

drives in the last 120 days of a federal election; (2) voter identification, GOTV, and generic activity in connection with an election in

which a federal candidate is on the ballot; (3) public communications that refer to a clearly identified federal candidate and promote, support, attack, or oppose a candidate for that office (regardless of whether it expressly advocates a vote for or against); or (4)

services by a state or local party employee who spends at least 25%

of paid time in a month on activities in connection with a federal

election.
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• Defines generic campaign activity as one that promotes a party

but not a federal or non-federal candidate.

• Defines public communications as communications by broadcast, cable, satellite, newspaper, magazine, outdoor advertising,

mass mailing (over 500 identical or substantially similar pieces

mailed within 30 days of each other), or phone bank (over 500 identical or substantially similar calls made within 30 days of each

other).

• Allows state parties to spend soft money on activities exclusively devoted to non-federal elections.

• Prohibits party committees from using soft money to raise

funds for use at least in part on federal election activities.

• Prohibits party committees (and officers or agents acting in

their behalf and entities they directly or indirectly establish, finance, maintain, or control) from raising money for, or giving to,

Internal Revenue Code § 501(c) or § 527 tax-exempt organizations

(other than political committees as defined by federal election law).

• Prohibits federal candidates, officeholders, agents, or entities

they directly or indirectly establish, maintain, finance, or control

from raising soft money in connection with a federal election (including any federal election activity) or any money from sources beyond federal limits and prohibitions in non-federal elections (unless

candidate or official is also a state or local candidate, raising funds

for that campaign).

• Allows federal candidates and officials to raise money for taxexempt organizations engaged primarily in voter registration and

GOTV, subject to a limit of $10,000 per donor (i.e., limit on individual contributions to state party committee under this bill).

• Does not restrict ability of federal candidates and officials to

raise money to influence state reapportionment decisions.

Sec. 102. Increased contribution limits for state committees of political parties and aggregate contribution limit for individuals

• Raises limit on individual contributions to a state party committee to $10,000 per year.

• Raises aggregate individual limit to $30,000 per year

(*superceded by $37,500 limit in sec. 308).

Sec. 103. Reporting requirements

• Codifies FEC regulations on disclosure of all national party activity-federal and non-federal.

• Requires disclosure by state and local parties of spending on

federal election activities, including any soft money permitted to be

used for such activities. • Ends building fund exemption.

TITLE II—NONCANDIDATE CAMPAIGN EXPENDITURES

Subtitle A—Electioneering Communications

Sec. 201. Disclosure of electioneering communications

• Requires disclosure of electioneering communications by any

spender exceeding an aggregate of $10,000 per year in such disbursements (including contracts to disburse), within 24 hours of

the first and each subsequent $10,000 disbursement.
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• Requires disclosure to include: identification of spender, custodian of books, and any entity exercising control over activity; principal place of business (if not an individual); amount of disbursements of over $200 and identification of recipient; identification of

donors of $1,000 or more (either to a separate segregated fund devoted exclusively to such activities or, if none, to organization

itself); and notation as to election and candidates to which communications pertain.

• Defines electioneering communication as a broadcast, cable, or

satellite advertisement that refers to a clearly identified federal

candidate, made within 60 days of a general election or 30 days of

a primary, and, if not for President or Vice President, is targeted

to relevant electorate (i.e., communication is received by 50,000 or

more persons in state, for Senate elections, or district, for House

elections); exempts news events, expenditures, independent expenditures, debates, and others who may be exempted by FEC.

• If definition of electioneering communication is ruled unconstitutional, provides alternate definition (based on 1987 9th Circuit

ruling in FEC v. Furgatch): a broadcast, cable, or satellite communication that promotes, supports, attacks, or opposes a candidate,

regardless of whether it expressly advocates a vote for or against

a candidate, and is suggestive of no plausible meaning other than

an exhortation to vote for or against a candidate); nothing in provision alters 11 CFR 100.22(b), FEC regulation defining express advocacy.

Sec. 202. Coordinated communications as contributions

• Treats an electioneering communication that is coordinated

with a candidate, agent, or party as a contribution to and expenditure by candidate or party.

Sec. 203. Prohibition of corporate and labor disbursements for electioneering communications

• Bans funding of electioneering communications with funds from

union or certain corporate funds; but exempts Internal Revenue

Code § 501(c)(4) or § 527 tax-exempt corporations making electioneering communications with funds solely donated by individuals

who are citizens or permanent resident aliens.

Sec. 204. Rules relating to certain targeted electioneering communications

• Removes exemption for § 501(c)(4) or § 527 tax-exempt corporations making targeted electioneering communications.

Subtitle B—Independent and Coordinated Expenditures

Sec. 211. Definition of independent expenditure

• Defines independent expenditure as an expenditure by a person expressly advocating the election or defeat of a clearly identified candidate, and that is not made in concert or cooperation with,

at request or suggestion of, or pursuant to any particular or general understanding with candidate, party, or agent.
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Sec. 212. Reporting requirements for certain independent expenditures

• Requires a 48 hour notice of independent expenditures of $10,000 or more, up to 20 days before an election (and 24 hour notice of expenditures above $1,000 in last 20 days, same as currently).

Sec. 213. Independent versus coordinated expenditures by party

• Prohibits parties from making both independent and coordinated expenditures for a general election candidate.

Sec. 214. Coordination with candidates or political parties

• Includes in definition of contribution any coordinated expenditure or other disbursement made in connection with candidate’s

campaign, and expenditures or disbursements made in coordination

with party, regardless of whether communication contains express

advocacy. • Treats an electioneering communication that is coordinated

with a candidate, agent, or party as a contribution to and expenditure by candidate or party. • Defines coordinated expenditure or other disbursement as a

payment made in concert or cooperation with, at request or suggestion of, or pursuant to any particular or general understanding

with candidate or party.

• Repeals new FEC rules, and directs FEC to promulgate new

regulations within 90 days of enactment on coordination; specifies

new rules will not require explicit collaboration or agreement to establish coordination; specifies rules will address issues of: republication of campaign material, common vendors, prior employment

status, and substantial discussion with candidate or party.

TITLE III—MISCELLANEOUS

Sec. 301. Use of contributed amounts for certain purposes

• Codifies FEC regulations on permissible uses for campaign

funds.

• Retains ban on personal use.

Sec. 302. Prohibition of fundraising on federal property

• Bans solicitation or receipt of contributions, including soft

money, by federal officials and from anyone, who is located in any

federal government building used to discharge official duties.

Sec. 303. Strengthening foreign money ban

• Bans direct or indirect contributions from foreign nationals (including soft money), or their solicitation or receipt, or any promise

to make such donations, in connection with any U.S. election, to

any party committee, or for any expenditure, independent expenditure, or electioneering communication (retains permanent resident

alien exemption).

Sec. 304. Modification of individual contribution limits in response

to expenditures from personal funds

• In Senate elections: raises limits on individual and party support for a Senate candidate whose opponent exceeds designated
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level of spending from personal funds (as defined) in campaign; creates threshold of $150,000 + 4 ¢ times number of eligible voters in

state; if opposition personal funds amount (personal spending of

candidate minus that of opponent) exceeds threshold amount: (a)

by 2–4 times, then limit on individual contributions to opponent is

tripled; (b) by 4–10 times, then limit on individual contributions to

opponent is raised 6-fold; and (c) by 10 times, then limit on individual contributions to opponent is raised 6-fold and limit on party

coordinated expenditures for opponent is removed; aggregate individual limit would be raised to extent of increased contribution limits; limits would be raised only to extent of 110% of total opposition

personal funds amount.

• In all elections: limits repayment of candidate loans to

$250,000, from amounts contributed after election.

Sec. 305. Television media rates

• Changes basis for lowest unit rate for TV, cable, and satellite

broadcast time (applicable in last 45 days of a primary and 60 days

of a general election) to comparison with the same amount of time

for the same period during prior 180 days.

• Requires such rates to be available to national parties buying

time for ‘‘coordinated expenditures’’ on behalf of their candidates.

• Makes lowest unit rate time on broadcast TV, cable, or satellite non-preemptible, unless for circumstances beyond broadcaster’s control.

• Provides for random audits by FCC to ensure compliance by

broadcasters.

Sec. 306. Limitation on availability of lowest unit charge for federal

candidates attacking opposition

• Requires federal candidate broadcast ads sold at lowest unit

rate and that include direct reference to opponents to include candidate photo or image on TV and a statement of candidate approval

(printed on TV and spoken by candidate on radio).

Sec. 307. Software for filing reports and prompt disclosure of contributions

• Requires FEC to promulgate standards for and to provide

standardized software for filing reports electronically; requires candidates’ use of such software; and requires FEC to post information

received electronically on Internet as soon as practicable.

Sec. 308. Modification of contribution limits

• In Presidential and Senate elections: raises limit on individual

contributions to candidates to $2,000 per candidate, per election (in

House elections: retains $1,000 limit).

• Raises limit on individual contributions to national party committees to $25,000 per year.

• Raises aggregate individual limit on all contributions to federal

candidates, PACs, and parties to $37,500 per year (*superceding

$30,000 limit in sec. 102).

• Raises special limit on combined contributions to Senate candidates by national and senatorial party committees to $35,000 in

year of election.
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• Provides for indexing for inflation of limits on individual contributions to candidates and national parties, on aggregate annual

individual contributions, and on party contributions to Senate candidates, in odd-numbered years beginning in 2003, with 2001 as

the base year and all amounts rounded to the nearest $100.

Sec. 309. Donations to presidential inaugural committee

• Requires disclosure to FEC of donations of over $200 to presidential inaugural committees within 90 days of event.

• Bans foreign national donations to inaugural committees.

Sec. 310. Prohibition on fraudulent solicitation of funds

• Prohibits fraudulent misrepresentation in the solicitation of

campaign funds.

Sec. 311. Study and report on clean money, clean elections laws

• Directs GAO to study and report to Congress statistics for and

effects of public funding systems in Arizona and Maine.

Sec. 312. Clarity standards for identification of sponsors of electionrelated advertising

• Requires sponsorship identification on all election-related advertising (including electioneering communications) by political

committees and enhanced visibility of such identification in the

communication.

Sec. 313. Increase in penalties

• Increases criminal penalties for knowing and willful violations

involving contributions, expenditures, or donations in amounts aggregating from $2,000 to $25,000 in a year: a fine under Title 18

or up to one year in prison, or both.

• Increases criminal penalties for knowing and willful violations

involving amounts aggregating $25,000 or more: a fine under Title

18 or up to five years in prison, or both.

Sec. 314. Statute of limitations

• Changes statute of limitations for criminal violations of federal

election law, from three to five years.

Sec. 315. Sentencing guidelines

• Directs U.S. Sentencing Commission to promulgate guidelines

and make legislative or administrative recommendations regarding

penalties for violating federal election law, per specified considerations.

Sec. 316. Increase in penalties imposed for violations of conduit contribution ban

• Imposes specific penalties for knowing and willful violations of

ban on contributions made in the name of another: (a) in civil

cases: between 300% of violation amount and the greater of

$50,000 or 1000% of violation amount; and (b) in criminal cases:

two years in prison for up to $25,000 violation amount, or fine of

between 300% of violation amount and the greater of $50,000 or

1000% of violation amount, or prison and fine.
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Sec. 317. Restriction on increased contribution limits by taking into

account candidate’s available funds

• In Senate elections: in calculating opposition personal funds

amount, considers candidate warchests, by including gross receipts

advantage of candidate opposed by wealthy candidate (i.e., 50% of

gross receipts of candidate minus 50% of gross receipts of wealthy

opponent, as of June 30 and Dec. 31 of year before election).

Sec. 318. Clarification of right of nationals of the United States to

make political contributions

• Clarifies that ban on contributions and donations from foreign

nationals does not include U.S. nationals.

Sec. 319. Prohibition of contribution by minors

• Prohibits contributions to candidates and donations to party

committees by individuals 17 years of age and younger.

Sec. 320. Definition of contributions made through intermediary or

conduit for purposes of applying contribution limits

• Considers contributions solicited by a candidate to support his

or her election and arranged or suggested to be spent by or through

an intermediary or conduit to assist that candidate’s election as a

contribution to the candidate.

Sec. 321. Prohibiting authorized committees from forming joint

fundraising committees with political party committees

• Prohibits federal candidates’ authorized committees from forming joint fundraising committees with any party committee.

Sec. 322. Regulations to prohibit efforts to evade requirements

• Requires FEC to promulgate regulations to prohibit efforts to

evade or circumvent limitations, prohibitions, and reporting requirements of federal election law.

TITLE IV—SEVERABILITY; EFFECTIVE DATE

Sec. 401. Severability

• If any provision of the Act or its amendments, or its application to any person or circumstance, is held unconstitutional, the remainder of the Act and its amendments, and its application to any

person or circumstance, shall not be affected by the holding.

Sec. 402. Effective date

• Generally, within 30 days of enactment.

• Provides transition rules for spending of soft money by national parties: (a) allows parties to spend without restriction soft

money raised between effective date and 90 days thereafter; (b)

until March 31, 2002, national parties may transfer soft money

funds to state or local parties or to §501(c) or §527 tax-exempt organizations; and (c) at any time after the effective date, national

parties may use such funds to defray costs of construction or purchase of a party office building or facility.
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Sec. 403. Judicial review

• Provides for expedited review to the U.S. District Court for

D.C. (and exclusive venue) for declaratory judgment and injunctive

relief on constitutional grounds; provides direct appeal to the U.S.

Supreme Court from any final order or judgment; and provides for

expedited consideration by both courts. • Provides that if any person aggrieved by the statute brings an

action for declaratory or injunctive relief, which challenges the constitutionality and names the U.S. as defendant, within 90 days of

enactment: (a) action shall be heard by three-judge court in the

U.S. District Court for D.C.; (b) copy of complaint shall be delivered

promptly to Clerk of the House and Secretary of the Senate; (c) a

final decision shall be reviewable only by direct appeal to U.S. Supreme Court; and (d) expedited consideration shall be provided by

both courts. • Further provides that in any action challenging the constitutionality, any Member of the House or Senate shall have the right

to intervene.

TITLE V—ADDITIONAL DISCLOSURE PROVISIONS

Sec. 501. Internet access to records

• Requires all reports filed with FEC to be posted on Internet

and available for inspection within 48 hours, or 24 hours if filed

electronically.

Sec. 502. Maintenance of website of election reports

• Requires FEC to maintain central web site of all publicly available election-related reports

Sec. 503. Additional monthly and quarterly disclosure reports

• Requires candidates to file monthly reports in election years

and quarterly reports in non-election years • Requires national party committees to file monthly reports in

all years

Sec. 504. Public access to broadcasting records

• Requires broadcasters to maintain and make available for public inspection: records of broadcast time requests by candidates or

by other entities whose message relates to political matters of national importance, including messages about a legally qualified candidate, a federal election, or a legislative issue of public importance

• Requires records to include: whether request was accepted;

rate charged; date and time message aired; class of time purchased;

identification of candidate and office, election, or issue referred to;

and identity of purchaser, including officers of any non-candidate

entity

COMMITTEE CONSIDERATION OF THE LEGISLATION

INTRODUCTION AND REFFERAL

On January 31, 2001, Mr. Shays introduced H.R. 380, which was

referred to the Committee on House Administration, and in addition to the Committees on Education and the Workforce, Government Reform, the Judiciary, Ways and Means, and Rules, for a pe-
13

riod to be subsequently determined by the Speaker, in each case for

consideration of such provisions as fall within the jurisdiction of

the committee concerned.

On May 22, 2001, the House received S. 27, a bill introduced by

Senator McCain and Senator Feingold that had been adopted by

the Senate, and was referred to the Committee on House Administration, and in addition to the Committees on Energy and Commerce, and the Judiciary, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.

On June 28, 2001, Mr. Shays and Mr. Meehan introduced H.R.

2356, which was referred to the Committee on House Administration, and in addition to the Committees on Energy and Commerce,

and the Judiciary, for a period to be subsequently determined by

the Speaker, in each case for consideration of such provisions as

fall within the jurisdiction of the committee concerned.

HEARINGS

The Committee on House Administration held five hearings on

campaign finance reform over four months in 2001.

On March 17, 2001, the Committee held the first hearing on

Campaign Finance Reform. This hearing was a field hearing, held

in Phoenix, Arizona. Members present: Mr. Ney, Mr. Ehlers, Mr.

Mica, Mr. Linder, Mr. Doolittle. Witnesses: Eleanor Eisenberg, Executive Director, Arizona Civil Liberties Union; Lynn Wardle, Professor, J. Reuben Clarke Law School, Brigham Young University;

Ann Eschinger, President, Arizona League of Women Voters; Landis Aiden, Citizen Activist; Senator Scott Bundgaard, Arizona State

Legislature; Dennis Burke, Executive Director, Arizona Good Government Association; Joseph F. Yuhas, Executive Director, Arizona

Restaurant Association; Lee Ann Elliott, Former Chairperson of the

Federal Election Commission.

On May 1, 2001, the Committee held its second hearing on Campaign Finance Reform. Members present: Mr. Ney, Mr. Ehlers, Mr.

Linder, Mr. Hoyer, Mr. Fattah, Mr. Davis Witnesses: Mr. Gephardt, Mr. DeLay, Mr. Shays, Mr. Meehan, Senator Hagel, Senator

McConnell, Senator Feingold.

On June 14, 2001, the Committee held its third hearing on Campaign Finance Reform. Members present were: Mr. Ney, Mr. Mica,

Mr. Linder, Mr. Reynolds, Mr. Hoyer and Mr. Davis. Witnesses:

James Bopp, Jr., Bopp, James Madison Center for Free Speech;

Cleta Mitchell, Foley & Lardner; Joel M. Gora, Professor, Brooklyn

Law School, former Associate Legal Director, American Civil Liberties Union; Laurence Gold, Associate General Counsel, AFL–CIO;

E. Joshua Rosenkranz, President & CEO, Brennan Center for Justice; Donald J. Simon, General Counsel, Common Cause.

On June 21, 2001, the Committee held its fourth hearing on

Campaign Finance Reform. Members present: Mr. Ney, Mr. Ehlers,

Mr. Linder and Mr. Hoyer. Witnesses: Mr. Hutchinson testified on

H.R. 1150, Mr. Wynn, Mr. Price (NC) testified on H.R. 156, Mr.

Terry testified on H.R. 1039, Ms. Mink testified on H.R. 289, Mr.

Linder testified on H.R. 1080, Mr. Moore testified on H.R. 365, Mr.

Doolittle testified on H.R. 1444, Mr. Tierney testified on H.R. 1637,

Mr. Faleomavaega testified on H.R. 1447. Mr Linder introduced the
14

written testimony of Phil Kent, President, Southeastern Legal

Foundation.

On June 28, 2001, the Committee held its fifth hearing on Campaign Finance reform. Members present: Mr. Ney, Mr. Ehlers, Mr.

Mica, Mr. Linder, Mr. Doolittle, Mr. Reynolds, Mr. Hoyer, Mr.

Fattah, Mr. Davis. Witnesses: Mr. Petri testified on H.R. 150 and

H.R. 151, Mr. Bereuter testified on H.R. 35, Mr. Shaw testified on

H.R. 1516, Mr. English testified on H.R. 1445, Mr. Calvert testified

on H.R. 2122, Mr. Barr and Mr. Gonzalez.

MARKUP

On Thursday, June 28, 2001, the Committee met to mark up

H.R. 2360 and H.R. 2356. The Committee unfavorably reported

H.R. 2356 by recorded vote (5–3) a quorum being present. No

amendments were offered to H.R. 2356.

MATTERS REQUIRED UNDER THE RULES OF THE HOUSE

COMMITTEE RECORD VOTES

Clause 3(b) of House rule XII requires the results of each record

vote on an amendment or motion to report, together with the

names of those voting for and against, to be printed in the committee report. The only recorded vote requested during consideration of H.R. 2356 occurred on the vote to report the bill unfavorably to the House.

Member Yes No Present

Mr. Ney ...................................................................................................................................... X ............. .............

Mr. Ehlers .................................................................................................................................. X ............. .............

Mr. Mica .................................................................................................................................... X ............. .............

Mr. Linder .................................................................................................................................. X ............. .............

Mr. Doolittle .............................................................................................................................. X ............. .............

Mr. Reynolds ............................................................................................................................. X ............. .............

Mr. Hoyer ................................................................................................................................... ............. X .............

Mr. Fattah ................................................................................................................................. ............. X .............

Mr. Davis ................................................................................................................................... ............. X .............

Total ............................................................................................................................. 5 3 .............

COMMITTEE OVERSIGHT FINDINGS

In compliance with clause 3(c)(1) of rule XIII of the Rules of the

House of Representatives, the Committee states that the findings

and recommendations of the Committee, based on oversight activities under clause 2(b)(1) of rule X of the Rules of the House of Representatives, are incorporated in the descriptive portions of this report.

OVERSIGHT FINDINGS OF COMMITTEE ON HOUSE ADMINISTRATION

The Committee states, with respect to clause 3(c)(4) of rule XII

of the Rules of the House of Representatives, that the Committee

on Government Reform and Oversight did not submit findings or

recommendations based on investigations under clause 4(c)(2) of

rule X of the Rules of the House of Representatives.
15

CONSTITUTIONAL AUTHORITY

In compliance with clause 3(d)(1) of rule XIII, the Committee

states that Article 1, Section 4 of the U.S. Constitution grants Congress the authority to make laws governing the time, place and

manner of holding Federal elections.

FEDERAL MANDATES

The Committee states, with respect to section 423 of the Congressional Budget Act of 1974, that the bill does not include any

significant Federal mandate.

PREEMPTION CLARIFICATION

Section 423 of the Congressional Budget Act of 1974 requires the

report of any committee on a bill or joint resolution to include a

committee statement on the extent to which the bill or joint resolution is intended to preempt state or local law. The Committee

states that H.R. 2360 is not intended to preempt any state or local

law.

COMMITTEE COST ESTIMATE

Clause 3(c)(2) of rule XII requires each committee report that accompanies a measure providing new budget authority, new spending authority, or changing revenues or tax expenditures to contain

a cost estimate, as required by section 308(a)(1) of the Congressional Budget Act of 1974, as amended and, when practicable with

respect to estimates of new budget authority, a comparison of the

total estimated funding level for the relevant program (or programs) to the appropriate levels under current law.

Clause 3(d)(2) of rule XIII requires committees to include their

own cost estimates in certain committee reports, which include,

when practicable, a comparison of the total estimated funding level

for the relevant program (or programs) with the appropriate levels

under current law.

The Committee adopts as its own the cost estimate prepared by

the Director of the Congressional adopts as its own the cost estimate prepared by the Director of the Congressional Budget Office,

pursuant to section 403 of the Congressional Budget Act of 1974.

In compliance with clause 3(c)(2) of rule XIII of the Rules of the

House of Representatives, the Committee sets forth, with respect to

the bill, the following estimate and comparison prepared by the Director of the Congressional Budget Office under section 403 of the

Congressional Budget Act of 1974:

(CBO ESTIMATE NOT AVAILABLE AT TIME OF FILING)

CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

In compliance with clause 3(e) of rule XIII of the Rules of the

House of Representatives, changes in existing law made by the bill,

as reported, are shown as follows (existing law proposed to be omitted is enclosed in black brackets, new matter is printed in italic,

existing law in which no change is proposed is shown in roman):
16

FEDERAL ELECTION CAMPAIGN ACT OF 1971

* * * * * * *

TITLE III—DISCLOSURE OF FEDERAL CAMPAIGN FUNDS

DEFINITIONS

SEC. 301. When used in this Act:

(1) * * *

* * * * * * *

(8)(A) The term ‘‘contribution’’ includes—

(i) any gift, subscription, loan, advance, or deposit of money

or anything of value made by any person for the purpose of influencing any election for Federal office; øor¿

(ii) the payment by any person of compensation for the personal services of another person which are rendered to a political committee without charge for any øpurpose.¿ purpose;

(iii) any coordinated expenditure or other disbursement made

by any person in connection with a candidate’s election, regardless of whether the expenditure or disbursement is for a communication that contains express advocacy; or

(iv) any coordinated expenditure or other disbursement made

in coordination with a national committee, State committee, or

other political committee of a political party by a person (other

than a candidate or a candidate’s authorized committee) in connection with an election, regardless of whether the expenditure

or disbursement is for a communication that contains express

advocacy.

(B) The term ‘‘contribution’’ does not include—

(i) * * *

* * * * * * *

ø(viii) any gift, subscription, loan, advance, or deposit of

money or anything of value to a national or a State committee

of a political party specifically designated to defray any cost for

construction or purchase of any office facility not acquired for

the purpose of influencing the election of any candidate in any

particular election for Federal office;¿

ø(ix)¿ (viii) any legal or accounting services rendered to or on

behalf of—(I) * * *

* * * * * * *

ø(x)¿ (ix) the payment by a State or local committee of a political party of the costs of campaign materials (such as pins,

bumper stickers, handbills, brochures, posters, party tabloids,

and yard signs) used by such committee in connection with volunteer activities on behalf of nominees of such party: Provided,

That—

(1) * * *

* * * * * * *

ø(xi)¿ (x) the payment by a candidate, for nomination or election to any public office (including State or local office), or authorized committee of a candidate, of the costs of campaign materials which include information on or reference to any other
17

candidate and which are used in connection with volunteer activities (including pins, bumper stickers, handbills, brochures,

posters, and yard signs, but not including the use of broadcasting, newspapers, magazines, billboards, direct mail, or

similar types of general public communication or political advertising): Provided, That such payments are made from contributions subject to the limitations and prohibitions of this

Act;

ø(xii)¿ (xi) the payment by a State or local committee of a

political party of the costs of voter registration and get-out-thevote activities conducted by such committee on behalf of nominees of such party for President and Vice President: Provided,

That—

(1) * * *

* * * * * * *

ø(xiii)¿ (xii) payments made by a candidate or the authorized

committee of a candidate as a condition of ballot access and

payments received by any political party committee as a condition of ballot access;

ø(xiv)¿ (xiii) any honorarium (within the meaning of section

323 of this Act); and

ø(xv)¿ (xiv) any loan of money derived from an advance on

a candidate’s brokerage account, credit card, home equity line

of credit, or other line of credit available to the candidate, if

such loan is made in accordance with applicable law and under

commercially reasonable terms and if the person making such

loan makes loans derived from an advance on the candidate’s

brokerage account, credit card, home equity line of credit, or

other line of credit in the normal course of the person’s business.

(C) For purposes of subparagraph (A)(iii) and (iv), the term ‘‘coordinated expenditure or other disbursement’’ means a payment

made in concert or cooperation with, at the request or suggestion of,

or pursuant to any general or particular understanding with, such

candidate, the candidate’s authorized political committee, or their

agents, or a political party committee or its agents.

* * * * * * *

ø(17) The term ‘‘independent expenditure’’ means an expenditure

by a person expressly advocating the election or defeat of a clearly

identified candidate which is made without cooperation or consultation with any candidate, or any authorized committee or agent of

such candidate, and which is not made in concert with, or at the

request or suggestion of, any candidate, or any authorized committee or agent of such candidate.¿

(17) INDEPENDENT EXPENDITURE.—The term ‘‘independent expenditure’’ means an expenditure by a person—

(A) expressly advocating the election or defeat of a clearly

identified candidate; and

(B) that is not made in concert or cooperation with, at the

request or suggestion of, or pursuant to any general or particular understanding with, such candidate, the candidate’s
18

authorized political committee, or their agents, or a political party committee or its agents.

* * * * * * *

(20) FEDERAL ELECTION ACTIVITY.— (A) IN GENERAL.—The term ‘‘Federal election activity’’ means—

(i) voter registration activity during the period that

begins on the date that is 120 days before the date a

regularly scheduled Federal election is held and ends

on the date of the election;

(ii) voter identification, get-out-the-vote activity, or

generic campaign activity conducted in connection with

an election in which a candidate for Federal office appears on the ballot (regardless of whether a candidate

for State or local office also appears on the ballot);

(iii) a public communication that refers to a clearly

identified candidate for Federal office (regardless of

whether a candidate for State or local office is also

mentioned or identified) and that promotes or supports

a candidate for that office, or attacks or opposes a candidate for that office (regardless of whether the communication expressly advocates a vote for or against a

candidate); or

(iv) services provided during any month by an employee of a State, district, or local committee of a political party who spends more than 25 percent of that individual’s compensated time during that month on activities in connection with a Federal election.

(B) EXCLUDED ACTIVITY.—The term ‘‘Federal election activity’’ does not include an amount expended or disbursed

by a State, district, or local committee of a political party

for— (i) a public communication that refers solely to a

clearly identified candidate for State or local office, if

the communication is not a Federal election activity described in subparagraph (A)(i) or (ii);

(ii) a contribution to a candidate for State or local office, provided the contribution is not designated or

used to pay for a Federal election activity described in

subparagraph (A);

(iii) the costs of a State, district, or local political

convention;

(iv) the costs of grassroots campaign materials, including buttons, bumper stickers, and yard signs, that

name or depict only a candidate for State or local office; and

(v) the cost of constructing or purchasing an office facility or equipment for a State, district, or local committee.

(21) GENERIC CAMPAIGN ACTIVITY.—The term ‘‘generic campaign activity’’ means a campaign activity that promotes a political party and does not promote a candidate or non-Federal

candidate.

(22) PUBLIC COMMUNICATION.—The term ‘‘public communication’’ means a communication by means of any broadcast, cable,
19

or satellite communication, newspaper, magazine, outdoor advertising facility, mass mailing, or telephone bank to the general public, or any other form of general public political advertising.

(23) MASS MAILING.—The term ‘‘mass mailing’’ means a mailing by United States mail or facsimile of more than 500 pieces

of mail matter of an identical or substantially similar nature

within any 30-day period.

(24) TELEPHONE BANK.—The term ‘‘telephone bank’’ means

more than 500 telephone calls of an identical or substantially

similar nature within any 30-day period.

(25) ELECTION CYCLE.—The term ‘‘election cycle’’ means the

period beginning on the day after the date of the most recent

election for the specific office or seat that a candidate is seeking

and ending on the date of the next election for that office or

seat. For purposes of the preceding sentence, a primary election

and a general election shall be considered to be separate elections.

(26) PERSONAL FUNDS.—The term ‘‘personal funds’’ means an

amount that is derived from—

(A) any asset that, under applicable State law, at the

time the individual became a candidate, the candidate had

legal right of access to or control over, and with respect to

which the candidate had—

(i) legal and rightful title; or

(ii) an equitable interest;

(B) income received during the current election cycle of

the candidate, including—

(i) a salary and other earned income from bona fide

employment;

(ii) dividends and proceeds from the sale of the candidate’s stocks or other investments;

(iii) bequests to the candidate;

(iv) income from trusts established before the beginning of the election cycle;

(v) income from trusts established by bequest after

the beginning of the election cycle of which the candidate is the beneficiary;

(vi) gifts of a personal nature that had been customarily received by the candidate prior to the beginning

of the election cycle; and

(vii) proceeds from lotteries and similar legal games

of chance; and

(C) a portion of assets that are jointly owned by the candidate and the candidate’s spouse equal to the candidate’s

share of the asset under the instrument of conveyance or

ownership, but if no specific share is indicated by an instrument of conveyance or ownership, the value of 1⁄2 of the

property.

ORGANIZATION OF POLITICAL COMMITTEES

SEC. 302. (a)***

* * * * * * *
20

(e)(1)***

* * * * * * *

(6) No authorized committee of a candidate for Federal office may

form a joint fundraising committee with any political committee of

a political party.

* * * * * * *

REPORTS

SEC. 304. (a)(1)***

(2) If the political committee is the principal campaign committee

of a candidate for the House of Representatives or for the Senate—

(A) in any calendar year during which there is regularly

scheduled election for which such candidate is seeking election,

or nomination for election, the treasurer shall file the following

reports:

(i) * * *

* * * * * * *

ø(iii) additional quarterly reports, which shall be filed no

later than the 15th day after the last day of each calendar

quarter, and which shall be complete as of the last day of

each calendar quarter: except that the report for the quarter ending December 31 shall be filed no later than January 31 of the following calendar year; and¿

(iii) additional monthly reports, which shall be filed not

later than the 20th day after the last day of the month and

shall be complete as of the last day of the month, except

that monthly reports shall not be required under this

clause in November and December and a year end report

shall be filed not later than January 31 of the following

calendar year.

(B) in any other calendar year øthe following reports shall be

filed:

ø(i) a report covering the period beginning January 1

and ending June 30, which shall be filed no later than July

31; and

ø(ii) a report covering the period beginning July 1 and

ending December 31, which shall be filed no later than

January 31 of the following calendar year.¿ the treasurer

shall file quarterly reports, which shall be filed not later

than the 15th day after the last day of each calendar quarter, and which shall be complete as of the last day of each

calendar quarter, except that the report for the quarter ending December 31 shall be filed not later than January 31

of the following calendar year.

(3) If the committee is the principal campaign committee of a

candidate for the office of President—

(A) in any calendar year during which a general election is

held to fill such office—

(i) * * *

(ii) the treasurer of the other principal campaign committees of a candidate for the office of President shall file

a pre-election report or reports in accordance with paragraph (2)(A)(i), a post-general election report in accordance
21

with paragraph (2)(A)(ii), and øquarterly reports¿ monthly

reports in accordance with paragraph (2)(A)(iii); and

* * * * * * *

(4) All political committees other than authorized committees of

a candidate shall file either—

(A)(i)***

* * * * * * *

(iv) in any other calendar year, a report covering the period

beginning January 1 and ending June 30, which shall be filed

no later than July 31 and a report covering the period beginning July 1 and ending December 31, which shall be filed no

later than January 31 of the following calendar year; or

Notwithstanding the preceding sentence, a national committee of a

political party shall file the reports required under subparagraph

(B).

* * * * * * *

(5) If a designation, report, or statement filed pursuant to this

Act (other than under paragraph (2)(A)(i) or (4)(A)(ii)ø, or the second sentence of subsection (c)(2)¿) is sent by registered or certified

mail, the United States postmark shall be considered the date of

filing of the designation, report, or statement.

(6)(A)***

(B) NOTIFICATION OF EXPENDITURE FROM PERSONAL FUNDS.— (i) DEFINITION OF EXPENDITURE FROM PERSONAL FUNDS.—In

this subparagraph, the term ‘‘expenditure from personal funds’’

means—

(I) an expenditure made by a candidate using personal

funds; and

(II) a contribution or loan made by a candidate using

personal funds or a loan secured using such funds to the

candidate’s authorized committee.

(ii) DECLARATION OF INTENT.—Not later than the date that is

15 days after the date on which an individual becomes a candidate for the office of Senator, the candidate shall file a declaration stating the total amount of expenditures from personal

funds that the candidate intends to make, or to obligate to

make, with respect to the election that will exceed the State-byState competitive and fair campaign formula with—

(I) the Commission; and

(II) each candidate in the same election.

(iii) INITIAL NOTIFICATION.—Not later than 24 hours after a

candidate described in clause (ii) makes or obligates to make an

aggregate amount of expenditures from personal funds in excess

of 2 times the threshold amount in connection with any election,

the candidate shall file a notification with—

(I) the Commission; and

(II) each candidate in the same election.

(iv) ADDITIONAL NOTIFICATION.—After a candidate files an

initial notification under clause (iii), the candidate shall file an

additional notification each time expenditures from personal

funds are made or obligated to be made in an aggregate

amount that exceed $10,000 with—

(I) the Commission; and
22

(II) each candidate in the same election.

Such notification shall be filed not later than 24 hours after the

expenditure is made.

(v) CONTENTS.—A notification under clause (iii) or (iv) shall

include—

(I) the name of the candidate and the office sought by the

candidate;

(II) the date and amount of each expenditure; and

(III) the total amount of expenditures from personal

funds that the candidate has made, or obligated to make,

with respect to an election as of the date of the expenditure

that is the subject of the notification.

(C) NOTIFICATION OF DISPOSAL OF EXCESS CONTRIBUTIONS.—In

the next regularly scheduled report after the date of the election for

which a candidate seeks nomination for election to, or election to,

Federal office, the candidate or the candidate’s authorized committee shall submit to the Commission a report indicating the

source and amount of any excess contributions (as determined under

paragraph (1) of section 315(i)) and the manner in which the candidate or the candidate’s authorized committee used such funds.

(D) ENFORCEMENT.—For provisions providing for the enforcement

of the reporting requirements under this paragraph, see section 309.

ø(B)¿ (E) The notification required under this paragraph shall be

in addition to all other reporting requirements under this Act.

* * * * * * *

(8) The requirement for a political committee to file a øquarterly

report under paragraph (2)(A)(iii) or paragraph (4)(A)(i)¿ monthly

report under paragraph (2)(A)(iii) or paragraph (4)(A) shall be

waived if such committee is required to file a pre-election report

under paragraph (2)(A)(i), or paragraph (4)(A)(ii) during the period

beginning on the 5th day after the close of the calendar quarter

and ending on the 15th day after the close of the calendar quarter.

* * * * * * *

(11)(A)***

ø(B) The Commission shall make a designation, statement, report, or notification that is filed electronically with the Commission

accessible to the public on the Internet not later than 24 hours

after the designation, statement, report, or notification is received

by the Commission.¿

(B) The Commission shall make a designation, statement, report,

or notification that is filed with the Commission under this Act

available for inspection by the public in the offices of the Commission and accessible to the public on the Internet not later than 48

hours (or not later than 24 hours in the case of a designation, statement, report, or notification filed electronically) after receipt by the

Commission.

(12) SOFTWARE FOR FILING OF REPORTS.—

(A) IN GENERAL.—The Commission shall—

(i) promulgate standards to be used by vendors to develop software that—

(I) permits candidates to easily record information concerning receipts and disbursements required to be reported under this Act at the time of

the receipt or disbursement;
23

(II) allows the information recorded under subclause (I) to be transmitted immediately to the

Commission; and

(III) allows the Commission to post the information on the Internet immediately upon receipt; and

(ii) make a copy of software that meets the standards

promulgated under clause (i) available to each person

required to file a designation, statement, or report in

electronic form under this Act.

(B) ADDITIONAL INFORMATION.—To the extent feasible, the

Commission shall require vendors to include in the software developed under the standards under subparagraph

(A) the ability for any person to file any designation, statement, or report required under this Act in electronic form.

(C) REQUIRED USE.—Notwithstanding any provision of

this Act relating to times for filing reports, each candidate

for Federal office (or that candidate’s authorized committee)

shall use software that meets the standards promulgated

under this paragraph once such software is made available

to such candidate.

(D) REQUIRED POSTING.—The Commission shall, as soon

as practicable, post on the Internet any information received under this paragraph.

(c)(1)***

(2) Statements required to be filed by this subsection shall be

filed in accordance with subsection (a)(2), and shall include—

(A) * * *

* * * * * * *

(C) the identification of each person who made a contribution

in excess of $200 to the person filing such statement which was

made for the purpose of furthering an independent expenditure.

øAny independent expenditure (including those described in subsection (b)(6)(B)(iii) aggregating $1,000 or more made after the

20th day, but more than 24 hours, before any election shall be filed

within 24 hours after such independent expenditure is made. Such

statement shall be filed with the Secretary or the Commission and

the Secretary of State and shall contain the information required

by subsection (b)(6)(B)(iii) indicating whether the independent expenditure is in support of, or in opposition to, the candidate involved. Notwithstanding subsection (a)(5), the time at which the

statement under this subsection is received by the Secretary, the

Commission, or any other recipient to whom the notification is required to be sent shall be considered the time of filing of the statement with the recipient.¿

* * * * * * *

(e) POLITICAL COMMITTEES.—

(1) NATIONAL AND CONGRESSIONAL POLITICAL COMMITTEES.—

The national committee of a political party, any national congressional campaign committee of a political party, and any

subordinate committee of either, shall report all receipts and

disbursements during the reporting period.

(2) OTHER POLITICAL COMMITTEES TO WHICH SECTION 323 APPLIES.—
24

(A) IN GENERAL.—In addition to any other reporting requirements applicable under this Act, a political committee

(not described in paragraph (1)) to which section 323(b)(1)

applies shall report all receipts and disbursements made

for activities described in section 301(20)(A).

(B) SPECIFIC DISCLOSURE BY STATE AND LOCAL PARTIES

OF CERTAIN NONFEDERAL AMOUNTS PERMITTED TO BE

SPENT ON FEDERAL ELECTION ACTIVITY.—Each report by a

political committee under subparagraph (A) of receipts and

disbursements made for activities described in section

301(20)(A) shall include a disclosure of all receipts and disbursements made section 323(b)(2)(A) and (B).

(3) ITEMIZATION.—If a political committee has receipts or disbursements to which this subsection applies from or to any person aggregating in excess of $200 for any calendar year, the political committee shall separately itemize its reporting for such

person in the same manner as required in paragraphs (3)(A),

(5), and (6) of subsection (b).

(4) REPORTING PERIODS.—Reports required to be filed under

this subsection shall be filed for the same time periods required

for political committees under subsection (a)(4)(B).

(f) DISCLOSURE OF ELECTIONEERING COMMUNICATIONS.— (1) STATEMENT REQUIRED.—Every person who makes a disbursement for the direct costs of producing and airing electioneering communications in an aggregate amount in excess of

$10,000 during any calendar year shall, within 24 hours of

each disclosure date, file with the Commission a statement containing the information described in paragraph (2).

(2) CONTENTS OF STATEMENT.—Each statement required to be

filed under this subsection shall be made under penalty of perjury and shall contain the following information:

(A) The identification of the person making the disbursement, of any person sharing or exercising direction or control over the activities of such person, and of the custodian

of the books and accounts of the person making the disbursement.

(B) The principal place of business of the person making

the disbursement, if not an individual.

(C) The amount of each disbursement of more than $200

during the period covered by the statement and the identification of the person to whom the disbursement was made.

(D) The elections to which the electioneering communications pertain and the names (if known) of the candidates

identified or to be identified.

(E) If the disbursements were paid out of a segregated

bank account which consists of funds contributed solely by

individuals who are United States citizens or nationals or

lawfully admitted for permanent residence as defined in

section 1101(a)(2) of the Immigration and Nationality Act

(8 U.S.C. 1101(a)(2)) directly to this account for electioneering communications, the names and addresses of all

contributors who contributed an aggregate amount of

$1,000 or more to that account during the period beginning

on the first day of the preceding calendar year and ending

on the disclosure date. Nothing in this subparagraph is to
25

be construed as a prohibition on the use of funds in such

a segregated account for a purpose other than electioneering

communications.

(F) If the disbursements were paid out of funds not described in subparagraph (E), the names and addresses of

all contributors who contributed an aggregate amount of

$1,000 or more to the person making the disbursement during the period beginning on the first day of the preceding

calendar year and ending on the disclosure date.

(3) ELECTIONEERING COMMUNICATION.—For purposes of this

subsection— (A) IN GENERAL.—(i) The term ‘‘electioneering communication’’ means any broadcast, cable, or satellite communication which— (I) refers to a clearly identified candidate for Federal

office;

(II) is made within— (aa) 60 days before a general, special, or runoff

election for the office sought by the candidate; or

(bb) 30 days before a primary or preference election, or a convention or caucus of a political party

that has authority to nominate a candidate, for the

office sought by the candidate; and

(III) in the case of a communication which refers to

a candidate for an office other than President or Vice

President, is targeted to the relevant electorate.

(ii) If clause (i) is held to be constitutionally insufficient

by final judicial decision to support the regulation provided

herein, then the term ‘‘electioneering communication’’ means any broadcast, cable, or satellite communication

which promotes or supports a candidate for that office, or

attacks or opposes a candidate for that office (regardless of

whether the communication expressly advocates a vote for

or against a candidate) and which also is suggestive of no

plausible meaning other than an exhortation to vote for or

against a specific candidate. Nothing in this subparagraph

shall be construed to affect the interpretation or application

of section 100.22(b) of title 11, Code of Federal Regulations.

(B) EXCEPTIONS.—The term ‘‘electioneering communication’’ does not include— (i) a communication appearing in a news story, commentary, or editorial distributed through the facilities

of any broadcasting station, unless such facilities are

owned or controlled by any political party, political

committee, or candidate;

(ii) a communication which constitutes an expenditure or an independent expenditure under this Act;

(iii) a communication which constitutes a candidate

debate or forum conducted pursuant to regulations

adopted by the Commission, or which solely promotes

such a debate or forum and is made by or on behalf

of the person sponsoring the debate or forum; or

(iv) any other communication exempted under such

regulations as the Commission may promulgate (consistent with the requirements of this paragraph) to en-
26

sure the appropriate implementation of this paragraph,

except that under any such regulation a communication may not be exempted if it meets the requirements

of this paragraph and is described in section

301(20)(A)(iii).

(C) TARGETING TO RELEVANT ELECTORATE.—For purposes

of this paragraph, a communication which refers to a clearly identified candidate for Federal office is ‘‘targeted to the

relevant electorate’’ if the communication can be received by

50,000 or more persons—

(i) in the district the candidate seeks to represent, in

the case of a candidate for Representative in, or Delegate or Resident Commissioner to, the Congress; or

(ii) in the State the candidate seeks to represent, in

the case of a candidate for Senator.

(4) DISCLOSURE DATE.—For purposes of this subsection, the

term ‘‘disclosure date’’ means—

(A) the first date during any calendar year by which a

person has made disbursements for the direct costs of producing or airing electioneering communications aggregating in excess of $10,000; and

(B) any other date during such calendar year by which

a person has made disbursements for the direct costs of

producing or airing electioneering communications aggregating in excess of $10,000 since the most recent disclosure

date for such calendar year.

(5) CONTRACTS TO DISBURSE.—For purposes of this subsection, a person shall be treated as having made a disbursement if the person has executed a contract to make the disbursement.

(6) COORDINATION WITH OTHER REQUIREMENTS.—Any requirement to report under this subsection shall be in addition to any

other reporting requirement under this Act.

(7) COORDINATION WITH INTERNAL REVENUE CODE.—Nothing

in this subsection may be construed to establish, modify, or otherwise affect the definition of political activities or electioneering activities (including the definition of participating in, intervening in, or influencing or attempting to influence a political campaign on behalf of or in opposition to any candidate for

public office) for purposes of the Internal Revenue Code of 1986.

(g) TIME FOR REPORTING CERTAIN EXPENDITURES.—

(1) EXPENDITURES AGGREGATING $1,000.—

(A) INITIAL REPORT.—A person (including a political committee) that makes or contracts to make independent expenditures aggregating $1,000 or more after the 20th day,

but more than 24 hours, before the date of an election shall

file a report describing the expenditures within 24 hours.

(B) ADDITIONAL REPORTS.—After a person files a report

under subparagraph (A), the person shall file an additional

report within 24 hours after each time the person makes or

contracts to make independent expenditures aggregating an

additional $1,000 with respect to the same election as that

to which the initial report relates.

(2) EXPENDITURES AGGREGATING $10,000.—
27

(A) INITIAL REPORT.—A person (including a political committee) that makes or contracts to make independent expenditures aggregating $10,000 or more at any time up to

and including the 20th day before the date of an election

shall file a report describing the expenditures within 48

hours.

(B) ADDITIONAL REPORTS.—After a person files a report

under subparagraph (A), the person shall file an additional

report within 48 hours after each time the person makes or

contracts to make independent expenditures aggregating an

additional $10,000 with respect to the same election as that

to which the initial report relates.

(3) PLACE OF FILING; CONTENTS.—A report under this

subsection— (A) shall be filed with the Commission; and

(B) shall contain the information required by subsection

(b)(6)(B)(iii), including the name of each candidate whom

an expenditure is intended to support or oppose.

(h) REPORTS FROM INAUGURAL COMMITTEES.—The Federal Election Commission shall make any report filed by an Inaugural Committee under section 510 of title 36, United States Code, accessible

to the public at the offices of the Commission and on the Internet

not later than 48 hours after the report is received by the Commission.

ENFORCEMENT

SEC. 309. (a)(1)***

* * * * * * *

(5)(A)***

(B) If the Commission believes that a knowing and willful violation of this Act or of chapter 95 or chapter 96 of the Internal Revenue Code of 1954 has been committed, a conciliation agreement

entered into by the Commission under paragraph (4)(A) may require that the person involved in such conciliation agreement shall

pay a civil penalty which does not exceed the greater of $10,000 or

an amount equal to 200 percent of any contribution or expenditure

involved in such violation (or, in the case of a violation of section

320, which is not less than 300 percent of the amount involved in

the violation and is not more than the greater of $50,000 or 1000

percent of the amount involved in the violation).

(6)(A)***

* * * * * * *

(C) In any civil action for relief instituted by the Commission

under subparagraph (A), if the court determines that the Commission has established that the person involved in such civil action

has committed a knowing and willful violation of this Act or of

chapter 95 or chapter 96 of the Internal Revenue Code of 1954, the

court may impose a civil penalty which does not exceed the greater

of $10,000 or an amount equal to 200 percent of any contribution

or expenditure involved in such violation (or, in the case of a violation of section 320, which is not less than 300 percent of the amount

involved in the violation and is not more than the greater of $50,000

or 1000 percent of the amount involved in the violation).
28

(b) Before taking any action under subsection (a) against any

person who has failed to file a report required under section

304(a)(2)(A)(iii) for the øcalendar quarter¿ month immediately preceding the election involved, or in accordance with section

304(a)(2)(A)(i), the Commission shall notify the person of such failure to file the required reports. If a satisfactory response is not received within 4 business days after the date of notification, the

Commission shall, pursuant to section 311(a)(7), publish before the

election the name of the person and the report or reports such person has failed to file.

* * * * * * *

(d)(1)ø(A) Any person who knowingly and willfully commits a violation of any provision of this Act which involves the making, receiving, or reporting of any contribution or expenditure aggregating

$2,000 or more during a calendar year shall be fined, or imprisoned

for not more than one year, or both. The amount of this fine shall

not exceed the greater of $25,000 or 300 percent of any contribution

or expenditure involved in such violation.¿ (A) Any person who

knowingly and willfully commits a violation of any provision of this

Act which involves the making, receiving, or reporting of any contribution, donation, or expenditure—

(i) aggregating $25,000 or more during a calendar year shall

be fined under title 18, United States Code, or imprisoned for

not more than 5 years, or both; or

(ii) aggregating $2,000 or more (but less than $25,000) during a calendar year shall be fined under such title, or imprisoned for not more than one year, or both.

* * * * * * *

(D) Any person who knowingly and willfully commits a violation

of section 320 involving an amount aggregating more than $10,000

during a calendar year shall be—

(i) imprisoned for not more than 2 years if the amount is less

than $25,000 (and subject to imprisonment under subparagraph (A) if the amount is $25,000 or more);

(ii) fined not less than 300 percent of the amount involved in

the violation and not more than the greater of—

(I) $50,000; or

(II) 1,000 percent of the amount involved in the violation;

or

(iii) both imprisoned under clause (i) and fined under clause

(ii).

* * * * * * *

øUSE OF CONTRIBUTED AMOUNTS FOR CERTAIN PURPOSES

øSEC. 313. Amounts received by a candidate as contributions

that are in excess of any amount necessary to defray his expenditures, and any other amounts contributed to an individual for the

purpose of supporting his or her activities as a holder of Federal

office, may be used by such candidate or individual, as the case

may be, to defray any ordinary and necessary expenses incurred in

connection with his or her duties as a holder of Federal office, may

be contributed to any organization described in section 170(c) of the

Internal Revenue Code of 1954, or may be used for any other law-
29

ful purpose, including transfers without limitation to any national,

State, or local committee of any political party; except that no such

amounts may be converted by any person to any personal use,

other than to defray any ordinary and necessary expenses incurred

in connection with his or her duties as a holder of Federal office.¿

SEC. 313. USE OF CONTRIBUTED AMOUNTS FOR CERTAIN PURPOSES.

(a) PERMITTED USES.—A contribution accepted by a candidate,

and any other donation received by an individual as support for activities of the individual as a holder of Federal office, may be used

by the candidate or individual— (1) for otherwise authorized expenditures in connection with

the campaign for Federal office of the candidate or individual;

(2) for ordinary and necessary expenses incurred in connection with duties of the individual as a holder of Federal office;

(3) for contributions to an organization described in section

170(c) of the Internal Revenue Code of 1986; or

(4) for transfers to a national, State, or local committee of a

political party.

(b) PROHIBITED USE.— (1) IN GENERAL.—A contribution or donation described in

subsection (a) shall not be converted by any person to personal

use.

(2) CONVERSION.—For the purposes of paragraph (1), a contribution or donation shall be considered to be converted to personal use if the contribution or amount is used to fulfill any

commitment, obligation, or expense of a person that would exist

irrespective of the candidate’s election campaign or individual’s

duties as a holder of Federal office, including— (A) a home mortgage, rent, or utility payment;

(B) a clothing purchase;

(C) a noncampaign-related automobile expense;

(D) a country club membership;

(E) a vacation or other noncampaign-related trip;

(F) a household food item;

(G) a tuition payment;

(H) admission to a sporting event, concert, theater, or

other form of entertainment not associated with an election

campaign; and

(I) dues, fees, and other payments to a health club or recreational facility.

* * * * * * *

LIMITATIONS ON CONTRIBUTIONS AND EXPENDITURES

SEC. 315. (a)(1) øNo person¿ Except as provided in subsection (i),

no person shall make contributions—

(A) to any candidate and his authorized political committees

with respect to any election for Federal office which, in the aggregate, exceed ø$1,000¿ $2,000 (or, in the case of a candidate

for Representative in or Delegate or Resident Commissioner to

the Congress, $1,000);

(B) to the political committees established and maintained

by a national political party, which are not the authorized political committees of any candidate, in any calendar year

which, in the aggregate, exceed ø$20,000; or¿ $25,000;
30

(C) to any other political committee (other than a committee

described in subparagraph (D)) in any calendar year which, in the aggregate, exceed $5,000ø.¿; or

(D) to a political committee established and maintained by a

State committee of a political party in any calendar year which,

in the aggregate, exceed $10,000.

(3) No individual shall make contributions aggregating more

than ø$25,000¿ $37,500 in any calendar year. For purposes of this

paragraph, any contribution made to a candidate in a year other

than the calendar year in which the election is held with respect

to which such contribution is made, is considered to be made during the calendar year in which such election is held.

* * * * * * *

(7) For purposes of this subsection— (A) * * *

ø(B)(i) expenditures made by any person in cooperation, consultation, or concert, with, or at the request or suggestion of,

a candidate, his authorized political committees, or their

agents shall be considered to be a contribution to such candidate;

ø(ii) the financing by any person of the dissemination, distribution, or republication, in whole or in part, of any broadcast or any written, graphic, or other form of campaign materials prepared by the candidate, his campaign committees, or

their authorized agents shall be considered to be an expenditure for purposes of this paragraph; and¿

(B) a coordinated expenditure or disbursement described in— (i) section 301(8)(A)(iii) shall be considered to be a contribution to the candidate and an expenditure by the candidate; and

(ii) section 301(8)(A)(iv) shall be considered to be a contribution to, and an expenditure by, the political party committee;

(C) if—

(i) any person makes, or contracts to make, any disbursement for any electioneering communication (within the

meaning of section 304(f)(3)); and

(ii) such disbursement is coordinated with a candidate or

an authorized committee of such candidate, a Federal,

State, or local political party or committee thereof, or an

agent or official of any such candidate, party, or committee;

such disbursement or contracting shall be treated as a contribution to the candidate supported by the electioneering communication or that candidate’s party and as an expenditure by

that candidate or that candidate’s party; and

ø(C)¿ (D) contributions made to or for the benefit of any candidate nominated by a political party for election to the office

of Vice President of the United States shall be considered to

be contributions made to or for the benefit of the candidate of

such party for election to the office of President of the United

States.

* * * * * * *

(8) For purposes of the limitations imposed by this section, all

contributions made by a person, either directly or indirectly, on be-
31

half of a particular candidate, øincluding contributions which are

in any way earmarked or otherwise directed through an intermediary or conduit to such candidate,¿ including contributions

which are in any way earmarked or otherwise arranged or directed

through an intermediary or conduit to such candidate, or solicited

by such candidate to support the candidate’s election and arranged

or suggested by the candidate to be spent by or through an intermediary to support or assist the candidate’s election, shall be treated as contributions from such person to such candidate. The intermediary or conduit shall report the original source and the intended recipient of such contribution to the Commission and to the

intended recipient.

* * * * * * *

(c)(1)(A) At the beginning of each calendar year (commencing in

1976), as there become available necessary data from the Bureau

of Labor Statistics of the Department of Labor, the Secretary of

Labor shall certify to the Commission and publish in the Federal

Register the percent difference between the price index for the 12

months preceding the beginning of such calendar year and the

price index for the base period. øEach limitation established by

subsection (b) and subsection (d) shall be increased by such percent

difference. Each amount so increased shall be the amount in effect

for such calendar year.¿

(B) Except as provided in subparagraph (C), in any calendar year

after 2002—

(i) a limitation established by subsection (a)(1)(A), (a)(1)(B),

(a)(3), (b), (d), or (h) 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 $100.

(C) In the case of limitations under subsections (a)(1)(A), (a)(1)(B),

(a)(3), and (h), increases shall only be made in odd-numbered years

and such increases shall remain in effect for the 2-year period beginning on the first day following the date of the last general election in the year preceding the year in which the amount is increased

and ending on the date of the next general election.

(2) For purposes of paragraph (1)—

(A) * * *

(B) the term ‘‘base period’’ ømeans the calendar year 1974¿

means—

(i) for purposes of subsections (b) and (d), calendar year

1974; and

(ii) for purposes of subsections (a)(1)(A), (a)(1)(B), (a)(3),

and (h) calendar year 2001.

(d)(1) Notwithstanding any other provision of law with respect to

limitations on expenditures or limitations on contributions, the national committee of a political party and a State committee of a political party, including any subordinate committee of a State committee, may make expenditures in connection with the general election campaign of candidates for Federal office, subject to the limita-
32

tions contained in paragraphs (2) øand (3)¿, (3), and (4) of this subsection.

* * * * * * *

(4) INDEPENDENT VERSUS COORDINATED EXPENDITURES BY

PARTY.—

(A) IN GENERAL.—On or after the date on which a political party nominates a candidate, a committee of the political party shall not make both expenditures under this subsection and independent expenditures (as defined in section

301(17)) with respect to the candidate during the election

cycle.

(B) CERTIFICATION.—Before making a coordinated expenditure under this subsection with respect to a candidate,

a committee of a political party shall file with the Commission a certification, signed by the treasurer of the committee, that the committee, on or after the date described in

subparagraph (A), has not and shall not make any independent expenditure with respect to the candidate during

the same election cycle.

(C) APPLICATION.—For purposes of this paragraph, all

political committees established and maintained by a national political party (including all congressional campaign

committees) and all political committees established and

maintained by a State political party (including any subordinate committee of a State committee) shall be considered

to be a single political committee.

(D) TRANSFERS.—A committee of a political party that

submits a certification under subparagraph (B) with respect to a candidate shall not, during an election cycle,

transfer any funds to, assign authority to make coordinated

expenditures under this subsection to, or receive a transfer

of funds from, a committee of the political party that has

made or intends to make an independent expenditure with

respect to the candidate.

* * * * * * *

(h) Notwithstanding any other provision of this Act, amounts totaling not more than ø$17,500¿ $35,000 may be contributed to a

candidate for nomination for election, or for election, to the United

States Senate during the year in which an election is held in which

he is such a candidate, by the Republican or Democratic Senatorial

Campaign Committee, or the national committee of a political

party, or any combination of such committees.

(i) INCREASED LIMIT TO ALLOW RESPONSE TO EXPENDITURES

FROM PERSONAL FUNDS.—

(1) INCREASE.—

(A) IN GENERAL.—Subject to paragraph (2), if the opposition personal funds amount with respect to a candidate for

election to the office of Senator exceeds the threshold

amount, the limit under subsection (a)(1)(A) (in this subsection referred to as the ‘‘applicable limit’’) with respect to

that candidate shall be the increased limit.

(B) THRESHOLD AMOUNT.—

(i) STATE-BY-STATE COMPETITIVE AND FAIR CAMPAIGN

FORMULA.—In this subsection, the threshold amount
33

with respect to an election cycle of a candidate described in subparagraph (A) is an amount equal to the

sum of—

(I) $150,000; and

(II) $0.04 multiplied by the voting age population.

(ii) VOTING AGE POPULATION.—In this subparagraph,

the term ‘‘voting age population’’ means in the case of

a candidate for the office of Senator, the voting age

population of the State of the candidate (as certified

under section 315(e)).

(C) INCREASED LIMIT.—Except as provided in clause (ii),

for purposes of subparagraph (A), if the opposition personal

funds amount is over—

(i) 2 times the threshold amount, but not over 4 times

that amount—

(I) the increased limit shall be 3 times the applicable limit; and

(II) the limit under subsection (a)(3) shall not

apply with respect to any contribution made with

respect to a candidate if such contribution is made

under the increased limit of subparagraph (A) during a period in which the candidate may accept

such a contribution;

(ii) 4 times the threshold amount, but not over 10

times that amount—

(I) the increased limit shall be 6 times the applicable limit; and

(II) the limit under subsection (a)(3) shall not

apply with respect to any contribution made with

respect to a candidate if such contribution is made

under the increased limit of subparagraph (A) during a period in which the candidate may accept

such a contribution; and

(iii) 10 times the threshold amount—

(I) the increased limit shall be 6 times the applicable limit;

(II) the limit under subsection (a)(3) shall not

apply with respect to any contribution made with

respect to a candidate if such contribution is made

under the increased limit of subparagraph (A) during a period in which the candidate may accept

such a contribution; and

(III) the limits under subsection (d) with respect

to any expenditure by a State or national committee of a political party shall not apply.

(D) OPPOSITION PERSONAL FUNDS AMOUNT.—The opposition personal funds amount is an amount equal to the excess (if any) of—

(i) the greatest aggregate amount of expenditures

from personal funds (as defined in section 304(a)(6)(B))

that an opposing candidate in the same election makes;

over
34

(ii) the aggregate amount of expenditures from personal funds made by the candidate with respect to the

election.

(E) SPECIAL RULE FOR CANDIDATE’S CAMPAIGN FUNDS.— (i) IN GENERAL.—For purposes of determining the aggregate amount of expenditures from personal funds

under subparagraph (D)(ii), such amount shall include

the gross receipts advantage of the candidate’s authorized committee.

(ii) GROSS RECEIPTS ADVANTAGE.—For purposes of

clause (i), the term ‘‘gross receipts advantage’’ means

the excess, if any, of— (I) the aggregate amount of 50 percent of gross

receipts of a candidate’s authorized committee during any election cycle (not including contributions

from personal funds of the candidate) that may be

expended in connection with the election, as determined on June 30 and December 31 of the year

preceding the year in which a general election is

held, over

(II) the aggregate amount of 50 percent of gross

receipts of the opposing candidate’s authorized

committee during any election cycle (not including

contributions from personal funds of the candidate) that may be expended in connection with

the election, as determined on June 30 and December 31 of the year preceding the year in which a

general election is held.

(2) TIME TO ACCEPT CONTRIBUTIONS UNDER INCREASED

LIMIT.—

(A) IN GENERAL.—Subject to subparagraph (B), a candidate and the candidate’s authorized committee shall not

accept any contribution, and a party committee shall not

make any expenditure, under the increased limit under

paragraph (1)—

(i) until the candidate has received notification of the

opposition personal funds amount under section

304(a)(6)(B); and

(ii) to the extent that such contribution, when added

to the aggregate amount of contributions previously accepted and party expenditures previously made under

the increased limits under this subsection for the election cycle, exceeds 110 percent of the opposition personal funds amount.

(B) EFFECT OF WITHDRAWAL OF AN OPPOSING CANDIDATE.—A candidate and a candidate’s authorized committee shall not accept any contribution and a party shall

not make any expenditure under the increased limit after

the date on which an opposing candidate ceases to be a

candidate to the extent that the amount of such increased

limit is attributable to such an opposing candidate.

(3) DISPOSAL OF EXCESS CONTRIBUTIONS.— (A) IN GENERAL.—The aggregate amount of contributions

accepted by a candidate or a candidate’s authorized committee under the increased limit under paragraph (1) and
35

not otherwise expended in connection with the election with

respect to which such contributions relate shall, not later

than 50 days after the date of such election, be used in the

manner described in subparagraph (B).

(B) RETURN TO CONTRIBUTORS.—A candidate or a candidate’s authorized committee shall return the excess contribution to the person who made the contribution.

(j) LIMITATION ON REPAYMENT OF PERSONAL LOANS.—Any candidate who incurs personal loans made after the date of enactment

of the Bipartisan Campaign Reform Act of 2001 in connection with

the candidate’s campaign for election shall not repay (directly or in- directly), to the extent such loans exceed $250,000, such loans from

any contributions made to such candidate or any authorized committee of such candidate after the date of such election.

CONTRIBUTIONS OR EXPENDITURES BY NATIONAL BANKS, CORPORATIONS, OR LABOR ORGANIZATIONS

SEC. 316. (a)***

(b)(1)***

(2) For purposes of this section and section 12(h) of the Public

Utility Holding Company Act (15 U.S.C. 79l(h)), the term ‘‘contribution or expenditure’’ øshall include¿ includes a contribution or expenditure, as those terms are defined in section 301, and also includes any direct or indirect payment, distribution, loan, advance,

deposit, or gift of money, or any services, or anything of value (except a loan of money by a national or State bank made in accordance with the applicable banking laws and regulations and in the

ordinary course of business) to any candidate, campaign committee,

or political party or organization, in connection with any election

to any of the offices referred to in this section or for any applicable

electioneering communication, but shall not include (A) communications by a corporation to its stockholders and executive or administrative personnel and their families or by a labor organization to

its members and their families on any subject; (B) nonpartisan registration and get-out-the-vote campaigns by a corporation aimed at

its stockholders and executive or administrative personnel and

their families, or by a labor organization aimed at its members and

their families; and (C) the establishment, administration, and solicitation of contributions to a separate segregated fund to be utilized

for political purposes by a corporation, labor organization, membership organization, cooperative, or corporation without capital stock.

(c) RULES RELATING TO ELECTIONEERING COMMUNICATIONS.—

(1) APPLICABLE ELECTIONEERING COMMUNICATION.—For purposes of this section, the term ‘‘applicable electioneering communication’’ means an electioneering communication (within the

meaning of section 304(f)(3)) which is made by any entity described in subsection (a) of this section or by any other person

using funds donated by an entity described in subsection (a) of

this section.

(2) EXCEPTION.—Notwithstanding paragraph (1), the term

‘‘applicable electioneering communication’’ does not include a

communication by a section 501(c)(4) organization or a political

organization (as defined in section 527(e)(1) of such Code) made

under section 304(f)(2)(E) or (F) of this Act if the communication is paid for exclusively by funds provided directly by indi-
36

viduals who are United States citizens or nationals or lawfully

admitted for permanent residence as defined in section

1101(a)(2) of the Immigration and Nationality Act (8 U.S.C.

1101(a)(2)). For purposes of the preceding sentence, the term

‘‘provided directly by individuals’’ does not include funds the

source of which is an entity described in subsection (a) of this

section.

(3) SPECIAL OPERATING RULES.—

(A) DEFINITION UNDER PARAGRAPH (1).—AN ELECTIONEERING COMMUNICATION SHALL BE TREATED AS MADE BY AN

ENTITY DESCRIBED IN SUBSECTION (A) IF AN ENTITY DESCRIBED IN SUBSECTION (A) DIRECTLY OR INDIRECTLY DISBURSES ANY AMOUNT FOR ANY OF THE COSTS OF THE COMMUNICATION.

(B) EXCEPTION UNDER PARAGRAPH (2).—A SECTION

501(C)(4) ORGANIZATION THAT DERIVES AMOUNTS FROM BUSINESS ACTIVITIES OR RECEIVES FUNDS FROM ANY ENTITY DESCRIBED IN SUBSECTION (A) SHALL BE CONSIDERED TO HAVE

PAID FOR ANY COMMUNICATION OUT OF SUCH AMOUNTS UNLESS SUCH ORGANIZATION PAID FOR THE COMMUNICATION

OUT OF A SEGREGATED ACCOUNT TO WHICH ONLY INDIVIDUALS CAN CONTRIBUTE, AS DESCRIBED IN SECTION

304(F)(2)(E).

(4) DEFINITIONS AND RULES.—For purposes of this

subsection—

(A) the term ‘‘section 501(c)(4) organization’’ means—

(i) an organization described in section 501(c)(4) of

the Internal Revenue Code of 1986 and exempt from

taxation under section 501(a) of such Code; or

(ii) an organization which has submitted an application to the Internal Revenue Service for determination

of its status as an organization described in clause (i);

and

(B) a person shall be treated as having made a disbursement if the person has executed a contract to make the disbursement.

(5) COORDINATION WITH INTERNAL REVENUE CODE.—Nothing

in this subsection shall be construed to authorize an organization exempt from taxation under section 501(a) of the Internal

Revenue Code of 1986 to carry out any activity which is prohibited under such Code.

(6) SPECIAL RULES FOR TARGETED COMMUNICATIONS.—

(A) EXCEPTION DOES NOT APPLY.—Paragraph (2) shall

not apply in the case of a targeted communication that is

made by an organization described in such paragraph.

(B) TARGETED COMMUNICATION.—For purposes of subparagraph (A), the term ‘‘targeted communication’’ means

an electioneering communication (as defined in section

304(f)(3)) that is distributed from a television or radio

broadcast station or provider of cable or satellite television

service and, in the case of a communication which refers to

a candidate for an office other than President or Vice President, is targeted to the relevant electorate.
37

(C) DEFINITION.—For purposes of this paragraph, a communication is ‘‘targeted to the relevant electorate’’ if it

meets the requirements described in section 304(f)(3)(C).

* * * * * * *

PUBLICATION AND DISTRIBUTION OF STATEMENTS AND SOLICITATIONS

SEC. 318. (a) øWhenever¿ Whenever a political committee makes

a disbursement for the purpose of financing any communication

through any broadcasting station, newspaper, magazine, outdoor

advertising facility, mailing, or any other type of general public political advertising, or whenever any person makes øan expenditure¿

a disbursement for the purpose of financing communications expressly advocating the election or defeat of a clearly identified candidate, or solicits any contribution through any broadcasting station, newspaper, magazine, outdoor advertising facility, ødirect¿

mailing, or any other type of general public political advertising or

makes a disbursement for an electioneering communication (as defined in section 304(f)(3)), such communication—

(1) * * *

* * * * * * *

(3) if not authorized by a candidate, an authorized political

committee of a candidate, or its agents, shall clearly state the

name and permanent street address, telephone number, or

World Wide Web address of the person who paid for the communication and state that the communication is not authorized

by any candidate or candidate’s committee.

* * * * * * *

(c) SPECIFICATION.—Any printed communication described in subsection (a) shall— (1) be of sufficient type size to be clearly readable by the recipient of the communication;

(2) be contained in a printed box set apart from the other contents of the communication; and

(3) be printed with a reasonable degree of color contrast between the background and the printed statement.

(d) ADDITIONAL REQUIREMENTS.— (1) AUDIO STATEMENT.— (A) CANDIDATE.—Any communication described in paragraphs (1) or (2) of subsection (a) which is transmitted

through radio or television shall include, in addition to the

requirements of that paragraph, an audio statement by the

candidate that identifies the candidate and states that the

candidate has approved the communication.

(B) OTHER PERSONS.—Any communication described in

paragraph (3) of subsection (a) which is transmitted

through radio or television shall include, in addition to the

requirements of that paragraph, in a clearly spoken manner, the following statement: ‘‘lllll is responsible for

the content of this advertising.’’ (with the blank to be filled

in with the name of the political committee or other person

paying for the communication and the name of any connected organization of the payor). If transmitted through

television, the statement shall also appear in a clearly read-
38

able manner with a reasonable degree of color contrast between the background and the printed statement, for a period of at least 4 seconds.

(2) TELEVISION.—If a communication described in paragraph

(1)(A) is transmitted through television, the communication

shall include, in addition to the audio statement under paragraph (1), a written statement that— (A) appears at the end of the communication in a clearly

readable manner with a reasonable degree of color contrast

between the background and the printed statement, for a

period of at least 4 seconds; and

(B) is accompanied by a clearly identifiable photographic

or similar image of the candidate.

øCONTRIBUTIONS BY FOREIGN NATIONALS¿ CONTRIBUTIONS AND

DONATIONS BY FOREIGN NATIONALS

SEC. 319. ø(a) It shall be unlawful for a foreign national directly

or through any other person to make any contribution of money or

other thing of value, or to promise expressly or impliedly to make

any such contribution, in connection with an election to any political office or in connection with any primary election, convention,

or caucus held to select candidates for any political office; or for

any person to solicit, accept, or receive any such contribution from

a foreign national.¿

(a) PROHIBITION.—It shall be unlawful for—

(1) a foreign national, directly or indirectly, to make—

(A) a contribution or donation of money or other thing of

value, or to make an express or implied promise to make

a contribution or donation, in connection with a Federal,

State, or local election;

(B) a contribution or donation to a committee of a political party; or

(C) an expenditure, independent expenditure, or disbursement for an electioneering communication (within the

meaning of section 304(f)(3)); or

(2) a person to solicit, accept, or receive a contribution or donation described in subparagraph (A) or (B) of paragraph (1)

from a foreign national.

(b) As used in this section, the term ‘‘foreign national’’ means—

(1) a foreign principal, as such term is defined by section 1(b)

of the Foreign Agents Registration Act of 1938 (22 U.S.C.

611(b)), except that the term ‘‘foreign national’’ shall not include any individual who is a citizen of the United States; or

(2) an individual who is not a citizen of the United States or

a national of the United States (as defined in section 101(a)(22)

of the Immigration and Nationality Act) and who is not lawfully admitted for permanent residence, as defined by section

101(a)(20) of the Immigration and Nationality Act (8 U.S.C.

1101(a)(20)).

* * * * * * *

FRAUDULENT MISREPRESENTATION OF CAMPAIGN AUTHORITY

SEC. 322. (a) IN GENERAL.—No person who is a candidate for

Federal office or an employee or agent of such a candidate shall—
39

(1) * * *

* * * * * * *

(b) FRAUDULENT SOLICITATION OF FUNDS.—No person shall—

(1) fraudulently misrepresent the person as speaking, writing,

or otherwise acting for or on behalf of any candidate or political

party or employee or agent thereof for the purpose of soliciting

contributions or donations; or

(2) willfully and knowingly participate in or conspire to participate in any plan, scheme, or design to violate paragraph (1).

SEC. 323. SOFT MONEY OF POLITICAL PARTIES.

(a) NATIONAL COMMITTEES.—

(1) IN GENERAL.—A national committee of a political party

(including a national congressional campaign committee of a

political party) may not solicit, receive, or direct to another person a contribution, donation, or transfer of funds or any other

thing of value, or spend any funds, that are not subject to the

limitations, prohibitions, and reporting requirements of this

Act.

(2) APPLICABILITY.—The prohibition established by paragraph

(1) applies to any such national committee, any officer or agent

acting on behalf of such a national committee, and any entity

that is directly or indirectly established, financed, maintained,

or controlled by such a national committee.

(b) STATE, DISTRICT, AND LOCAL COMMITTEES.—

(1) IN GENERAL.—Except as provided in paragraph (2), an

amount that is expended or disbursed for Federal election activity by a State, district, or local committee of a political party

(including an entity that is directly or indirectly established, financed, maintained, or controlled by a State, district, or local

committee of a political party and an officer or agent acting on

behalf of such committee or entity), or by an association or similar group of candidates for State or local office or individuals

holding State or local office, shall be made from funds subject

to the limitations, prohibitions, and reporting requirements of

this Act.

(2) APPLICABILITY.—

(A) IN GENERAL.—Notwithstanding clause (i) or (ii) of

section 301(20)(A), and subject to subparagraph (B), paragraph (1) shall not apply to any amount expended or disbursed by a State, district, or local committee of a political

party in existence as of the date of the enactment of the Bipartisan Campaign Reform Act of 2001 for an activity described in either such clause to the extent the amounts expended or disbursed for such activity are allocated under

regulations prescribed by the Commission which require

not less than 50 percent of the amounts expended or disbursed be paid from a Federal allocation account consisting

solely of contributions subject to the limitations, prohibitions, and reporting requirements of this Act (not including

funds specifically authorized to be spent under subparagraph (B)(iii)).

(B) CONDITIONS.—Subparagraph (A) shall only apply

if—
40

(i) the activity does not refer to a clearly identified

candidate for Federal office;

(ii) the amounts expended or disbursed are not for

the costs of any broadcasting, cable, or satellite communication, other than a communication which refers

solely to a clearly identified candidate for State or local

office;

(iii) the amounts expended or disbursed which are

not from a Federal allocation account described in subparagraph (A) are paid from amounts which are donated in accordance with State law and which meet

the requirements of subparagraph (C), except that no

person (including any person established, financed,

maintained, or controlled by such person) may donate

more than $10,000 to a State, district, or local committee of a political party in a calendar year for such

expenditures or disbursements; and

(iv) the amounts expended or disbursed are made

solely from funds raised by the State, local, or district

committee which makes such expenditure or disbursement, and do not include any funds provided to such

committee from— (I) any other State, local, or district committee of

any State party,

(II) the national committee of a political party

(including a national congressional campaign committee of a political party),

(III) any officer or agent acting on behalf of any

committee described in subclause (I) or (II), or

(IV) any entity directly or indirectly established,

financed, maintained, or controlled by any committee described in subclause (I) or (II).

(C) PROHIBITING INVOLVEMENT OF NATIONAL PARTIES, FEDERAL CANDIDATES AND OFFICEHOLDERS, AND STATE PARTIES ACTING JOINTLY.—Notwithstanding subsection (e)

(other than subsection (e)(3)), amounts specifically authorized to be spent under subparagraph (B)(iii) meet the requirements of this subparagraph only if the amounts— (i) are not solicited, received, directed, transferred, or

spent by or in the name of any person described in subsection (a) or (e); and

(ii) are not solicited, received, or directed through

fundraising activities conducted jointly by 2 or more

State, local, or district committees of any political

party or their agents, or by a State, local, or district

committee of a political party on behalf of the State,

local, or district committee of a political party or its

agent in one or more other States.

(c) FUNDRAISING COSTS.—An amount spent by a person described

in subsection (a) or (b) to raise funds that are used, in whole or in

part, for expenditures and disbursements for a Federal election activity shall be made from funds subject to the limitations, prohibitions, and reporting requirements of this Act.

(d) TAX-EXEMPT ORGANIZATIONS.—A national, State, district, or

local committee of a political party (including a national congres-
41

sional campaign committee of a political party), an entity that is directly or indirectly established, financed, maintained, or controlled

by any such national, State, district, or local committee or its agent,

and an officer or agent acting on behalf of any such party committee

or entity, shall not solicit any funds for, or make or direct any donations to—

(1) an organization that is described in section 501(c) of the

Internal Revenue Code of 1986 and exempt from taxation under

section 501(a) of such Code (or has submitted an application for

determination of tax exempt status under such section) and that

makes expenditures or disbursements in connection with an

election for Federal office (including expenditures or disbursements for Federal election activity); or

(2) an organization described in section 527 of such Code

(other than a political committee, a State, district, or local committee of a political party, or the authorized campaign committee of a candidate for State or local office).

(e) FEDERAL CANDIDATES.— (1) IN GENERAL.—A candidate, individual holding Federal office, agent of a candidate or an individual holding Federal office, or an entity directly or indirectly established, financed,

maintained or controlled by or acting on behalf of 1 or more

candidates or individuals holding Federal office, shall not— (A) solicit, receive, direct, transfer, or spend funds in connection with an election for Federal office, including funds

for any Federal election activity, unless the funds are subject to the limitations, prohibitions, and reporting requirements of this Act; or

(B) solicit, receive, direct, transfer, or spend funds in connection with any election other than an election for Federal

office or disburse funds in connection with such an election

unless the funds— (i) are not in excess of the amounts permitted with

respect to contributions to candidates and political

committees under paragraphs (1), (2), and (3) of section

315(a); and

(ii) are not from sources prohibited by this Act from

making contributions in connection with an election for

Federal office.

(2) STATE LAW.—Paragraph (1) does not apply to the solicitation, receipt, or spending of funds by an individual described

in such paragraph who is also a candidate for a State or local

office solely in connection with such election for State or local

office if the solicitation, receipt, or spending of funds is permitted under State law and refers only to such State or local

candidate, or to any other candidate for the State or local office

sought by such candidate, or both.

(3) FUNDRAISING EVENTS.—Notwithstanding paragraph (1) or

subsection (b)(2)(C), a candidate or an individual holding Federal office may attend, speak, or be a featured guest at a fundraising event for a State, district, or local committee of a political party.

(4) LIMITATION APPLICABLE FOR PURPOSES OF SOLICITATION

OF DONATIONS BY INDIVIDUALS TO CERTAIN ORGANIZATIONS.—In

the case of the solicitation of funds by any person described in
42

paragraph (1) on behalf of any entity described in subsection (d)

which is made specifically for funds to be used for activities described in clauses (i) and (ii) of section 301(20)(A), or made for

any such entity which engages primarily in activities described

in such clauses, the limitation applicable for purposes of a donation of funds by an individual shall be the limitation set

forth in section 315(a)(1)(D).

(5) TREATMENT OF AMOUNTS USED TO INFLUENCE OR CHAL- LENGE STATE REAPPORTIONMENT.—Nothing in this subsection

shall prevent or limit an individual described in paragraph (1)

from soliciting or spending funds to be used exclusively for the

purpose of influencing the reapportionment decisions of a State

or the financing of litigation which relates exclusively to the reapportionment decisions made by a State.

(f) STATE CANDIDATES.— (1) IN GENERAL.—A candidate for State or local office, individual holding State or local office, or an agent of such a candidate or individual may not spend any funds for a communication described in section 301(20)(A)(iii) unless the funds are

subject to the limitations, prohibitions, and reporting requirements of this Act.

(2) EXCEPTION FOR CERTAIN COMMUNICATIONS.—Paragraph

(1) shall not apply to an individual described in such paragraph if the communication involved is in connection with an

election for such State or local office and refers only to such individual or to any other candidate for the State or local office

held or sought by such individual, or both.

PROHIBITION OF CONTRIBUTIONS BY MINORS

SEC. 324. An individual who is 17 years old or younger shall not

make a contribution to a candidate or a contribution or donation

to a committee of a political party.

REGULATIONS TO PROHIBIT EFFORTS TO EVADE REQUIREMENTS

SEC. 325. The Commission shall promulgate regulations to prohibit efforts to evade or circumvent the limitations, prohibitions,

and reporting requirements of this Act.

TITLE IV—GENERAL PROVISIONS

* * * * * * *

PERIOD OF LIMITATIONS

SEC. 406. (a) No person shall be prosecuted, tried, or punished

for any violation of title III of this Act, unless the indictment is

found or the information is instituted within ø3¿ 5 years after the

date of the violation.

* * * * * * *

SECTION 607 OF TITLE 18, UNITED STATES CODE

§ 607. Place of solicitation

ø(a) It shall be unlawful for any person to solicit or receive any

contribution within the meaning of section 301(8) of the Federal
43

Election Campaign Act of 1971 in any room or building occupied

in the discharge of official duties by any person mentioned in section 603, or in any navy yard, fort, or arsenal. Any person who violates this section shall be fined under this title or imprisoned not

more than three years, or both.¿

(a) PROHIBITION.—

(1) IN GENERAL.—It shall be unlawful for any person to solicit

or receive a donation of money or other thing of value in connection with a Federal, State, or local election from a person who

is located in a room or building occupied in the discharge of official duties by an officer or employee of the United States. It

shall be unlawful for an individual who is an officer or employee of the Federal Government, including the President, Vice

President, and Members of Congress, to solicit or receive a donation of money or other thing of value in connection with a

Federal, State, or local election, while in any room or building

occupied in the discharge of official duties by an officer or employee of the United States, from any person.

(2) PENALTY.—A person who violates this section shall be

fined not more than $5,000, imprisoned more than 3 years, or

both.

(b) The prohibition in subsection (a) shall not apply to the receipt

of contributions by persons on the staff of a Senator or Representative in, or Delegate or Resident Commissioner to, the Congress or

Executive Office of the President, provided, that such contributions

have not been solicited in any manner which directs the contributor to mail or deliver a contribution to any room, building, or

other facility referred to in subsection (a), and provided that such

contributions are transferred within seven days of receipt to a political committee within the meaning of section 302(e) of the Federal Election Campaign Act of 1971.

SECTION 315 OF THE COMMUNICATIONS ACT OF 1934

SEC. 315. FACILITIES FOR CANDIDATES FOR PUBLIC OFFICE.

(a) IN GENERAL.—If any licensee shall permit any person who is

a legally qualified candidate for any public office to use a broadcasting station, he shall afford equal opportunities to all other such

candidates for that office in the use of such broadcasting station:

Provided, That such licensee shall have no power of censorship

over the material broadcast under the provision of this section. No

obligation is hereby imposed under this subsection upon any licensee to allow the use of its station by any such candidate. Appearance by a legally qualified candidate on any—

(1) * * *

* * * * * * *

ø(b) The charges¿

(b) CHARGES.—

(1) IN GENERAL.—Except as provided in paragraph (2), the

charges made for the use of any broadcasting station by any

person who is a legally qualified candidate for any public office

in connection with his campaign for nomination for election, or

election, to such office shall not exceed—
44

ø(1)¿ (A) subject to paragraph (3), during the forty-five days

preceding the date of a primary or primary runoff election and

during the sixty days preceding the date of a general or special

election in which such person is a candidate, the lowest unit

charge of the station for the same class and amount of time for

the same period; and

ø(2)¿ (B) at any other time, the charges made for comparable

use of such station by other users thereof.

(2) TELEVISION.—The charges made for the use of any television broadcast station, or by a provider of cable or satellite

television service, to any person who is a legally qualified candidate for any public office in connection with the campaign of

such candidate for nomination for election, or election, to such

office, or to a national committee of a political party making expenditures under section 315(d) of the Federal Election Campaign Act of 1971 on behalf of such candidate in connection

with such campaign, shall not exceed, during the periods referred to in paragraph (1)(A), the lowest charge of the station

(at any time during the 180-day period preceding the date of the

use) for the same amount of time for the same period.

(3) CONTENT OF BROADCASTS.— (A) IN GENERAL.—In the case of a candidate for Federal

office, such candidate shall not be entitled to receive the

rate under paragraph (1)(A) or (2) for the use of any broadcasting station unless the candidate provides written certification to the broadcast station that the candidate (and

any authorized committee of the candidate) shall not make

any direct reference to another candidate for the same office, in any broadcast using the rights and conditions of access under this Act, unless such reference meets the requirements of subparagraph (C) or (D).

(B) LIMITATION ON CHARGES.—If a candidate for Federal

office (or any authorized committee of such candidate)

makes a reference described in subparagraph (A) in any

broadcast that does not meet the requirements of subparagraph (C) or (D), such candidate shall not be entitled to receive the rate under paragraph (1)(A) or (2) for such broadcast or any other broadcast during any portion of the 45-

day and 60-day periods described in paragraph (1)(A), that

occur on or after the date of such broadcast, for election to

such office.

(C) TELEVISION BROADCASTS.—A candidate meets the requirements of this subparagraph if, in the case of a television broadcast, at the end of such broadcast there appears simultaneously, for a period no less than 4 seconds—

(i) a clearly identifiable photographic or similar

image of the candidate; and

(ii) a clearly readable printed statement, identifying

the candidate and stating that the candidate has approved the broadcast and that the candidate’s authorized committee paid for the broadcast.

(D) RADIO BROADCASTS.—A candidate meets the requirements of this subparagraph if, in the case of a radio broadcast, the broadcast includes a personal audio statement by

the candidate that identifies the candidate, the office the
45

candidate is seeking, and indicates that the candidate has

approved the broadcast.

(E) CERTIFICATION.—Certifications under this section

shall be provided and certified as accurate by the candidate

(or any authorized committee of the candidate) at the time

of purchase.

(F) DEFINITIONS.—For purposes of this paragraph, the

terms ‘‘authorized committee’’ and ‘‘Federal office’’ have the

meanings given such terms by section 301 of the Federal

Election Campaign Act of 1971 (2 U.S.C. 431).

(c) PREEMPTION.— (1) IN GENERAL.—Except as provided in paragraph (2), a licensee shall not preempt the use of a television broadcast station, or a provider of cable or satellite television service, by an

eligible candidate or political committee of a political party who

has purchased and paid for such use pursuant to subsection

(b)(2).

(2) CIRCUMSTANCES BEYOND CONTROL OF LICENSEE.—If a

program to be broadcast by a television broadcast station, or a

provider of cable or satellite television service, is preempted because of circumstances beyond the control of the station, any

candidate or party advertising spot scheduled to be broadcast

during that program may also be preempted.

(d) RANDOM AUDITS.— (1) IN GENERAL.—During the 45-day period preceding a primary election and the 60-day period preceding a general election, the Commission shall conduct random audits of designated market areas to ensure that each television broadcast

station, and provider of cable or satellite television service, in

those markets is allocating television broadcast advertising time

in accordance with this section and section 312.

(2) MARKETS.—The random audits conducted under paragraph (1) shall cover the following markets:

(A) At least 6 of the top 50 largest designated market

areas (as defined in section 122(j)(2)(C) of title 17, United

States Code).

(B) At least 3 of the 51–100 largest designated market

areas (as so defined).

(C) At least 3 of the 101–150 largest designated market

areas (as so defined).

(D) At least 3 of the 151–210 largest designated market

areas (as so defined).

(3) BROADCAST STATIONS.—Each random audit shall include

each of the 3 largest television broadcast networks, 1 independent network, and 1 cable network.

(e) POLITICAL RECORD.—

(1) IN GENERAL.—A licensee shall maintain, and make available for public inspection, a complete record of a request to purchase broadcast time that— (A) is made by or on behalf of a legally qualified candidate for public office; or

(B) communicates a message relating to any political

matter of national importance, including— (i) a legally qualified candidate;

(ii) any election to Federal office; or
46

(iii) a national legislative issue of public importance.

(2) CONTENTS OF RECORD.—A record maintained under paragraph (1) shall contain information regarding— (A) whether the request to purchase broadcast time is accepted or rejected by the licensee;

(B) the rate charged for the broadcast time;

(C) the date and time on which the communication is

aired;

(D) the class of time that is purchased;

(E) the name of the candidate to which the communication refers and the office to which the candidate is seeking

election, the election to which the communication refers, or

the issue to which the communication refers (as applicable);

(F) in the case of a request made by, or on behalf of, a

candidate, the name of the candidate, the authorized committee of the candidate, and the treasurer of such committee; and

(G) in the case of any other request, the name of the person purchasing the time, the name, address, and phone

number of a contact person for such person, and a list of

the chief executive officers or members of the executive committee or of the board of directors of such person.

(3) TIME TO MAINTAIN FILE.—The information required under

this subsection shall be placed in a political file as soon as possible and shall be retained by the licensee for a period of not

less than 2 years.

ø(c)¿ (f) DEFINITIONS.—For purposes of this section— (1) the term ‘‘broadcasting station’’ includes a community antenna television system, a television broadcast station, and a

provider of cable or satellite television service; and

(2) the term ‘‘licensee’’ and ‘‘station licensee’’ when used with

respect to a community antenna television system mean the

operator of such system.

ø(d)¿ (g) REGULATIONS.—The Commission shall prescribe appropriate rules and regulations to carry out the provisions of this section.

TITLE 36, UNITED STATES CODE

* * * * * * *

SUBTITLE I—PATRIOTIC AND NATIONAL

OBSERVANCES AND CEREMONIES

* * * * * * *

CHAPTER 5—PRESIDENTIAL INAUGURAL CEREMONIES

* * * * * * *

§ 510. Disclosure of and prohibition on certain donations

(a) IN GENERAL.—A committee shall not be considered to be the

Inaugural Committee for purposes of this chapter unless the committee agrees to, and meets, the requirements of subsections (b) and

(c).
47

(b) DISCLOSURE.— (1) IN GENERAL.—Not later than the date that is 90 days after

the date of the Presidential inaugural ceremony, the committee

shall file a report with the Federal Election Commission disclosing any donation of money or anything of value made to the

committee in an aggregate amount equal to or greater than

$200.

(2) CONTENTS OF REPORT.—A report filed under paragraph

(1) shall contain— (A) the amount of the donation;

(B) the date the donation is received; and

(C) the name and address of the person making the donation.

(c) LIMITATION.—The committee shall not accept any donation

from a foreign national (as defined in section 319(b) of the Federal

Election Campaign Act of 1971 (2 U.S.C. 441e(b))).

ø§ 510.¿ § 511. Authorization of appropriations

(a) AUTHORIZATION.—Necessary amounts are authorized to be

appropriated— (1) * * *

* * * * * * *
(48)

MINORITY VIEWS OF STENY H. HOYER, CHAKA FATTAH,

AND JIM DAVIS

The ‘‘Bipartisan Campaign Reform Act of 2001’’ (H.R. 2356),

sponsored by Rep. Christopher Shays and Rep. Martin Meehan, is

a serious, comprehensive proposal that addresses two of the most

serious ills infecting American political campaigns today: (1) unregulated soft money contributions and (2) undisclosed issue advocacy.

There simply is too much special-interest money from too few

sources flowing into party committees in the form of soft money,

and onto the airwaves in the form of thinly disguised political advertisements paid for with unrestricted dollars from entities that

are permitted, under today’s broken campaign finance regime, to

disclose as much or as little about their operations as they choose.

Many of these entities are barred by the Federal Election Campaign Act (FECA) from raising and spending any money to influence federal campaigns. Increased reliance on soft money shows no

signs of abating, and is of particular concern.

On June 28, 2001, the Committee Majority chose to report H.R.

2356 with an unfavorable recommendation. Given that nearly identical legislation passed the House of Representatives by strong bipartisan majorities in 1998 and 1999, we find it unfortunate that

Committee Majority acted as it did.

We urge our colleagues in both parties to ignore the Committee’s

unfavorable recommendation and judge H.R. 2356 on one simple

strength: its ambition to require that all activities aimed at influencing federal elections be paid for only with fully disclosed and

reasonably limited amounts of money known as ‘‘hard money’’ and

to eliminate the most pernicious factor in today’s political system,

the unlimited, largely undisclosed money known as ‘‘soft money.’’

SOFT MONEY

H.R. 2356 is the only bill reported by the Committee that contains a comprehensive ban on soft money. Simply put, Shays-Meehan not only limits but outlaws all soft money contributions to the

national parties, ensuring that every penny collected by the parties

conforms with FECA. In practice, no individual, however wealthy,

could contribute more than $75,000 in a two-year election cycle to

influence federal elections under Shays-Meehan. No corporation or

union that has exploited the soft money loophole to get around

FECA’s prohibition on direct giving would be permitted to influence

federal campaigns except through a federally regulated political action committee.

H.R. 2356’s soft money ban contrasts sharply with H.R. 2360, the

other bill reported by the Committee, which would place a very

high $75,000 annual cap on soft money to the national parties. In

a nation where the median income for a family of four is approxi-
49

mately $59,000, we believe a cap of $75,000 is not a cap at all. To

make matters worse, H.R. 2356’s ‘‘cap’’ would apply to each of three

national committee in the two parties. In theory, a corporation,

union, or wealthy individual could give as much as $900,000 in soft

money in a two-year election cycle, assuming it sought to curry

favor with both parties and contributed the maximum amount to

each. Combined with H.R. 2360’s proposed increases in hard money

contributions, a wealthy individual could contribute as much as

$1,335,000 in hard and soft money in a two-year election cycles.

The very nature of soft money—unlimited contributions from the

corporations and unions that are prohibited from making direct

‘‘hard money’’ contributions—violates the spirit and intenet of the

modern federal election system that traces its origins back to 1907,

when Republican President Theodore Roosevelt signed legislation

prohibiting corporations and insurance companies from using treasury money to influence federal elections.

Soft money includes money from corporations and unions that is

not supposed to be influencing federal elections at all. Yet, it has

gradually come to be the dominant form of campaign dollars in the

27 years since Congress last enacted comprehensive campaign finance reform. H.R. 2356 addresses public concerns over soft money

by prohibiting soft money contributions to national political parties

and curtailing soft money activities conducted by state and local

parties.

Soft money contributions to political parties exist solely because

of an unfortunate loophole opened by the Federal Election Commission that elections lawyers, political consultants, and wealthy special interests have exploited with unusual skill and sophistication.

With each passing election cycle, soft money contributions to state

and national parties have increased in volume until a trickle has

turned into a torrent. Between 1996 and 2000, the total amount of

soft money contributed to national parties grew from approximately

$250 million to over $500 million. Given the vast number of uses

to which political parties may legally put soft money, and the relative ease with which they can raise soft money compared to hard

money, it is not surprising that parties have developed a significant

dependence on a handful of super-wealth soft money contributors

to finance their political and administrative operations.

This increase has led to more direct and blatant attempts by contributors to purchase access and influence the political process, and

has driven an ever-increasing ‘‘dollars race’’ between the party committees. In fact, the amounts of money sought and the increasingly

constant appeals for soft dollars have led many leaders in the business community to join the call for reforming the soft money system.

H.R. 2356 would prohibit all soft money contributions from corporations, labor groups, and wealthy individuals. It would also end

virtually all ‘‘backdoor’’ soft money to state, local, and district parties, while recognizing the role that sharply limited soft money can

play in legitimate voter turnout and registration efforts at the state

and local level. To that end, H.R. 2356 allows soft money contributions to state and local parties to be used for limited voter registration and get-out-the-vote activity, but caps it at $10,000 per donor.
50

Furthermore, the measure doubles from $5,000 to $10,000 the

amount of hard money individuals may contribute to state parties.

In short, under the Shays-Meehan bill, national, state, local, and

district parties could continue to raise and spend sufficient resources to register and educate voters, support candidates, and promote broad-based platforms that are central ingredients of a

healthy and vital representative-democracy.

ISSUE ADVOCACY

The Shays-Meehan bill also would provide a reasonable solution

to the problem of unlimited and undisclosed advertising that fails

to qualify as ‘‘express advocacy’’ under federal election law, even

though it clearly is designed to influence the outcome of an election. As a result of a series of court decisions, the term ‘‘express

advocacy’’ currently refers only to those communications that include the so-called ‘‘magic words,’’ such as ‘‘vote for candidate X’’ or ‘‘defeat candidate Y.’’ There are three consequences when advertising does not meet

this narrow express advocacy standard: First, it may be paid for

with unlimited amounts of money from any source, including corporations and labor groups. Second, neither the amount spent nor

the source of the funding need be disclosed to the public. Third, the

advertising is not required to carry a truthful disclaimer to inform

the voter who actually paid for the communication.

Since 1996, so-called ‘‘issue advertising’’ abuses have exploded. The Annenberg Public Policy Center estimates that between $275

million and $340 million was spent on issue advertising in 1998,

the last election year for which data are available. However, no one

can be certain of the exact figure since no disclosure is required.

Both political parties, as well as a wide range of interest groups

and entities whose origin and purpose remain largely a mystery,

have exploited issue advocacy in recent elections to run ads that

clearly are designed to advocate the election or defeat of specific

federal candidates, but evade federal election regulations by avoiding the ‘‘magic words.’’ Since these ads stop just short of using the

magic words, their sponsors are not subject to full public disclosure,

the ads need carry no disclaimer, and they may be paid for with

unlimited dollars from any source.

Insufficient disclosure is a serious problem that real reform must

address. Messages are not identifiable for most audiences until

they are sourced. As a result, viewers rarely interpret messages

without interpreting the credibility of the source who is sponsoring

the message. As long as pseudonymous groups are able to communicate to the electorate, the ability of the electorate to judge the legitimacy of the message that is being offered is seriously weakened.

Voters cannot confidently determine how much credibility to lend

a communication when they do not know the source of the communication. In short, without real disclosure of the sources of money

funding sham issue ads, the ability of the voters to make informed

decisions is severely undermined.

H.R. 2356 addresses the problem by providing a clear distinction

between advertising seeking to persuade voters on issues and

‘‘sham’’ issue advertising—advertising that clearly is intended to

promote the election or defeat of a federal candidate. It would cre-
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ate a new class of ads called ‘‘electioneering communications,’’ defined as ‘’broadcast, cable, or satellite ads that mention the name

or show the likeness of a clearly identified federal candidate within

60 days of a general or 30 days of a primary, and is targeted at

the candidate’s state or district.’’ Under this provision, corporations

and labor unions would have to finance their ads through their

PAC’s, and a range of other groups would have to disclose their

spending and donors.

It bears emphasizing that passage of the ‘’electioneering communications’’ provision would in no way abridge the free speech rights

of any group or individual. For those groups and individuals interested in promoting the election or defeat of the federal candidates

of their choice, it would simply require that they play by the same

rules that currently apply to candidates and political action committees. These modest burdens placed on groups and individuals

seeking to engage in what most reasonable people already assume

is express advocacy will not limit their ability to reach voters. In

addition, the increased disclosure and disclaimer requirements will

cast sunlight on political spending and fundraising by interest

groups, providing voters with valuable information with which to

judge their credibility and motives.

OTHER PROVISIONS

Beyond correcting major systemic problems in today’s campaign

finance system, H.R. 2356 would accomplish several other necessary but less crucial fixes to the campaign finance system.

For example, the measure retains the 1974 $1,000 limit on individual contributions per election to House candidates, while acknowledging that 27 years of inflation has sharply reduced its purchasing power. To account for future inflation, H.R. 2356 indexes

this $1,000 limit, a sensible provision that ensures increases in the

hard money limit do not outpace the economy as a whole and

widen the gap between wealthy contributors and contributors of

more modest means.

H.R. 2356 also provides for better and more vigorous enforcement

of federal election laws, tougher penalties for those who are found

to have knowingly broken the laws, and more rapid disclosure of

campaign activities.

CONCLUSION

True campaign finance reform aims to accomplish three goals:

1. Completely end the unregulated, unlimited flow of soft

money into the political parties;

2. Require that political advertising that any reasonable

viewer would say are designed to influence a federal election

be paid for with hard money.

3. Respect the right of organizations to communicate with

their members about key issues affecting them.
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In our view, H.R. 2356 is the only measure before the House that

deserves to be called true reform. We are confident our colleagues

on both sides of the aisle will agree. If history is any guide, they

will. In 1998 and 1999, a similar Shays-Meehan bill passed 252– 179 and 252–177, respectively. We urge our colleague to show this

same strong bipartisan support this year and pass H.R. 2356.

STENY H. HOYER.

CHAKA FATTAH.

JIM DAVIS.

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