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�1.
F E C Twenty Year Report
2.
F E C Campaign Laws
3.
1997 Legislative Recomendations
4.
Common Cause v. Federal Election Commission
-Augusts, 1987
-August 25, 1988
5.
Business Week Commentary - Howard Gleckman
- Four Simple Ways to Clean up Campaign Finance (March 3, 1997)
6.
F E C Standards
- Alternative 1
- Alternative 2
7.
F E C Press Releases
8.
New York Review of Books
- The Curse of American Politics by Ronald Dworkin
9.
Statemnt in Support of Overturning Buckley v. Valeo
10.
Oklahoma City University Law Review
- Fact-Finding in First Amendment Litigation: The Case of Campaign
Finance Reform. (Spring, 1996)
11.
Yale Law Journal
- Faulty Assumptions and Undemocratic Consequences of Campaign
Finance Reform (January 1996)
12.
Case Western Reserve Law Review
- Time to Develop a Post-Buckley Approach to regulating the
Contributions and Expenditures of Political Parties.
�1.
F E C Twenty Year Report
2.
FEC Campaign Laws
3.
1997 Legislative Recomendations
4.
Common Cause v. Federal Election Commission
-Augusts, 1987
-August 25, 1988
5.
Business Week Commentary - Howard Gleckman
- Four Simple Ways to Clean up Campaign Finance (March 3, 1997)
6.
F E C Standards
- Alternative 1
- Alternative 2
7.
F E C Press Releases
8.
New York Review of Books
- The Curse of American Politics by Ronald Dworkin
9.
Statemnt in Support of Overturning Buckley v. Valeo
10.
Oklahoma City University Law Review
- Fact-Finding in First Amendment Litigation: The Case of Campaign
Finance Reform. (Spring, 1996)
11.
Yale Law Journal
- Faulty Assumptions and Undemocratic Consequences of Campaign
Finance Reform (January 1996)
12.
Case Western Reserve Law Review
- Time to Develop a Post-Buckley Approach to regulating the
Contributions and Expenditures of Political Parties.
13.
Statistics
�Clinton Presidential Records
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1
�THE FEDERAL ELECTION COMMISSION
Twenty Year
Report
APRIL 1995
�FEDERAL ELECTION COMMISSION
Danny L. McDonald. Chairman (1995)
Lee Ann Elliott, Vice Chairman (1995)
Joan D. Aikens, Commissioner
John Warren McGarry. Commissioner
Trevor Potter, Commissioner
Scott E. Thomas, Commissioner
John C. Surina, Staff Director
Lawrence M. Noble, General Counsel
Lynne A. McFarland, Inspector General
Prepared by:
Louise D. Wides, Assistant Staff Director,
Information Division
Gregory J. Scott, Writer, Information Division
Robert W. Biersack, Supervisory Statistician,
Data Division
R. Blake Lange, Chart Design, Administrative
Division
�TABLE OF CONTENTS
Introduction
Chapter 1
Historical Context
Early Reform
The 1971 Election Laws
1974 Amendments
Buckley v. Valeo
1976 Amendments
1979 Amendments
Subsequent Amendments
Chapter 2
Administering and Enforcing the FECA
Customer Service
Enforcement
Presidential Public Funding
National Clearinghouse on
Election Administration
Chapter 3
Key Issues Before the Commission
Corporate Communications
Soft Money
Personal Use of Campaign Funds
Best Efforts
Foreign Nationals
1
2
2
3
4
4
5
5
5
6
7
10
12
15
16
16
19
22
23
23
Chapter 4
Continuing Debate Over Reform
The Role of Political Parties
The Role of PACs
The Cost of Campaigns
25
25
27
32
Conclusion
35
Appendices
1. FEC Commissioners and
Officers 1975-1995
2. FEC Budget and Staffing History
3. FEC Organization Chart
36
38
39
�TABLE OF CHARTS
Chapter 2
Administering and Enforcing the FECA
2-1:
Overall Financial Activity
Reported to the FEC
6
2-2:
Telephone Inquiries on the 800-line
7
2-3:
8
Persons Served in Public Records
2-4:
Direct Access Usage by Month
9
2-5:
Number of Detailed Contribution and
9
Expenditure Transactions Processed
2-6:
Number of Phone Calls
9
to the Press Office
2-7:
Number of Reports Reviewed by the
Reports Analysis Division
10
2-8(a) Conciliation Agreements and Civil
Penalties by Calendar Year
11
2-8(b) Median Civil Penalty
by Calendar Year
11
2-9:
Presidential Fund Income
Tax Checkoff Status
13-14
Chapter 3
Key Issues Before the Commission
3-1(a): Party Federal and
Nonfederal Receipts
3-1 (b): Sources of Party Receipts
3-1(c): Party Federal and
Nonfederal Disbursements
20
21
21
Chapter 4
Continuing Debate Over Reform
4-1:
Sources of Campaign Receipts
4-2:
Federal Spending
by PACs and Parties
4-3:
Number of PACs
Registered with FEC
4-4:
PAC Contributions
by Type of Campaign
4-5:
Contributions by the
50 Largest Committees
4-6:
Possible Effect of
$2,000 PAC Limit in 1992
4-7:
Congressional Campaign Activity
4-8:
Comparison of Presidential
and Congressional Spending
Appendix 2
FEC Budget and Staffing History
26
27
29
29
30
31
32
33
38
�NTRODUCTION
Twenty years ago. Congress created the Federal Election Commission (FEC) to administer and
enforce the Federal Election Campaign Act
(FECA)—the statute that governs the financing of
federal elections. The regulation of federal campaigns emanated from a congressional judgment
that our representative form of government needed
protection from the corrosive influence of unlimited and undisclosed political contributions. The
laws were designed to ensure that candidates in
federal elections were not—or did not appear to
be—beholden to a narrow group of people. Taken
together, it was hoped, the laws would sustain and
promote citizen confidence and participation in the
democratic process.
Guided by this desire to protect the fundamental tenets of democracy, Congress created an
independent regulatory agency—the FEC—to disclose campaign finance information; to enforce the
limits, prohibitions and other provisions of the
election law; and to administer the public funding
of Presidential elections.
Fulfilling that mission places the agency at the
center of constitutional, philosophical and political
debate. On one hand, the Commission must administer and enforce the FECA, which the Supreme
Court has said serves a legitimate governmental interest. On the other hand, the Commission must remain mindful of the Constitutional freedoms of
speech and association, and the practical implications of its actions. The Commission, of course,
does not bear this responsibility alone. Congress
and the courts must also balance these competing
interests.
This tension between valid governmental interests and certain constitutional guarantees frames
many of the issues discussed in this report. While
the report commemorates the Commission's 20th
anniversary, it does not chronicle the entire 20-year
period. Instead, it offers a current snapshot of the
agency, focusing on significant Commission actions of recent years.
Chapter 1 provides an historical context for
the report.
Chapter 2 looks at the Commission's administration and enforcement of the FECA.
Chapter 3 examines some of the key issues the
Commission is currently debating or has recently
resolved.
Chapter 4 offers FEC statistics to supplement
the continuing national debate on the role of PACs
and parties, and the costs of political campaigns.
What emerges from this discussion is a portrait of an agency that has accomplished much,
even as it has grappled with difficult issues whose
resolution has helped define the proper balance between governmental interests and constitutionallyprotected political activity. The Commission's administration and enforcement of the FECA have
also helped ensure the continued legitimacy of our
representative form of government.
�CHAPTER 1
HISTORICAL CONTEXT
The origins of campaign financing in the
United States date back to 1791, when groups supporting and opposing Alexander Hamilton published competing newspapers designed to sway
the electorate. These minimal expenditures set the
tone for campaigns over the next several decades.
In the Presidential election of 1832, however,
the financing of campaigns changed. The Bank of
the United States, whose charter-renewal was
threatened by President Andrew Jackson, spent
heavily to elect Henry Clay, who supported renewal of the bank's charter. The bank's tactics
backfired, however, when Jackson characterized it
as a "money monster," and won reelection.
During the 1840s and 50s, the size of the electorate grew and so did the amount of campaign
spending. Still, during the pre-Civil War period,
"costs were relatively moderate, corruption...was
the exception rather than the rule, fundraising was
conducted in an amateur fashion, and the alliance
between economic interests and politicians, though
growing, was loose and flexible." (Thayer, Who
Shakes the Money Tree, p. 35) By contrast, the postwar years have been called the most corrupt in U.S.
history. Historian Eugene H. Roseboom describes
financier Marcus A. Hanna's fundraising for President McKinley's 1896 campaign:
"For banks the [campaign finance] assessment was fixed at one quarter of one percent of their capital. Life insurance companies contributed liberally, as did nearly all
the great corporations. The Standard Oil
Company gave $250,000 to Hanna's war
chest. The audited accounts of the national
committee revealed collections of about
$3,500,000." (CQ, Dollar Politics, p. 3)
The drive to institute comprehensive campaign finance reform began around the turn of the
century, when the muckrakers revealed the financial misdeeds of the 1896 election.' Their stories of
corporations financing candidates' campaigns in
hopes of influencing subsequent legislation
prompted President Theodore Roosevelt to proclaim: "All contributions by corporations to any
political committee or for any political purpose
should be forbidden by law." In 1907, Congress
passed the Tillman Act, which prohibited corporations and national banks from contributing money
to federal campaigns. Three years later. Congress
passed the first federal campaign disclosure legislation. Originally, the law applied only to House
elections, but Congress amended the law in 1911 to
cover Senate elections as well, and to set spending
limits for all Congressional candidates.
The Federal Corrupt Practices Act of 1925,
which applied to general election activity only,
strengthened disclosure requirements and increased expenditure limits. The Hatch Act of 1939
and its 1940 amendments asserted the right of Congress to regulate primary elections and included
The first campaign finance law actually predates these practices
Congress passed legislalion in 1867 that prohibited Federal officers
from soliciting Navy Yard workers for contributions.
�provisions limiting contributions and expenditures
in Congressional elections. The Taft-Hartley Act of
1947 barred both labor unions and corporations
rom making expenditures and contributions in
federal elections.
These legislative initiatives, taken together,
sought to:
• Limit contributions to ensure that wealthy
individuals and special interest groups did
not have a disproportionate influence on federal elections',
• Prohibit certain sources of funds for federal
campaign purposes:
• Control campaign spending, which tends to
fuel reliance on contributors and fundraisers;
and
• Require public disclosure of campaign finances to deter abuse and to educate the electorate.
None of these laws, however, created an institutional framework to administer the campaign finance provisions effectively. As a result, those provisions were largely ignored. The laws had other
flaws as well. For example, spending limits applied
only to committees active in two or more states.
Further, candidates could avoid the spending limit
and disclosure requirements altogether because a
candidate who claimed to have no knowledge of
spending on his behalf was not liable under the
1925 Act.
When Congress passed the more stringent disclosure provisions of the 1971 Federal Election
Campaign Act (FECA), the shortcomings of the
earlier laws became apparent. In 1968, still under
the old law. House and Senate candidates reported
spending $8.5 million, while in 1972, after the passage of the FECA, spending reported by Congressional candidates jumped to $88.9 million.
2
• Congressional Quarterly Weekly Report. Vol. xxvii. No. 49. December 5.
1969. p. 243.>; Clerk of the House. The Annual Statistical Report of
Contributions and Expenditures Made During (he 1972 Election
Campaigns for the U.S. House of Representatives'' (1974). p 161.
Secretary of the Senate. "The Annual Statistical Report of Receipts
and Expenditures Made in Connection with Elections for the U.S.
Senate in 1972'' lundatedl. p 3:).
r
The Federal Election Campaign Act of 1971
(P.L. 92-225). together with the 1971 Revenue Act
(P.L. 92-178). fundamentally changed the federal
campaign finance laws. The FECA. effective April
7, 1972, not only required full reporting of campaign contributions and expenditures, but also limited spending on media advertisements and limited spending from candidates' personal funds.
(These limits were later repealed to conform with
judicial decisions.)
3
The FECA also provided the basic legislative
framework for corporations and labor unions to establish separate segregated funds. popularly referred to as PACs (political action committees). Although the Tillman Act and the Taft-Hartley Act of
1947 banned direct contributions by corporations
and labor unions to influence federal elections, the
FECA provided an exception whereby corporations and unions could use treasury funds to establish, operate and solicit voluntary contributions for
the organization's PAC. These voluntary donations
from individuals could then be used to contribute
to federal campaigns.
4
Under the Revenue Act—the first of a series of
laws designed to implement federal financing of
Presidential elections—citizens could check a box
on their tax forms authorizing the federal government to use one of their tax dollars to finance Presidential campaigns in the general election. Congress implemented the program in 1973 and, by
1976, enough tax money had accumulated to fund
the 1976 Presidential election—the first publicly
funded federal election in U.S. history.
5
Like its predecessors, the Federal Election
Campaign Act of 1971 did not provide for a single,
independent body to monitor and enforce the law.
Instead, the Clerk of the House, the Secretary of the
Senate and the Comptroller General of the United
States, head of the General Accounting Office
(GAO), monitored compliance with the FECA. The
Justice Department was responsible for prosecuting violations of the law referred by the three su-
'Contribution'' and "expenditure'' are defined in 2 U.S.C and 11
CFR
' Separate segregated fund"' is described in 2 U.S.C and 11 CFR.
fn 1966. Congress enacted a law to provide for public funding of
Presidential elections, but suspended the law a yeat later. It would
have included a taxpayers' checkoff provision similar to that later
embodied in the 1971 law.
�pervisory officials. Following the 1972 elections,
however, the Justice Department prosecuted few of
the 7,100 cases referred to it."
In 1974, following the documentation of campaign abuses in the 1972 Presidential elections, a
consensus emerged to create an independent body
to ensure compliance with the campaign finance
laws. Comprehensive amendments to the FECA
(P.L. 93-443) established the Federal Election Commission, an independent agency to assume the administrative functions previously divided between
Congressional officers and GAO. The Commission
was given jurisdiction in civil enforcement matters,
authority to write regulations and responsibility
for monitoring compliance with the FECA. Additionally, the amendments transferred from GAO to
the Commission the function of serving as a national clearinghouse for information on the administration of elections.
Under the 1974 amendments, the President,
the Speaker of the House and the President pro
tempore of the Senate each appointed two of the
six voting members of the newly created Commission. The Secretary of the Senate and the Clerk of
the House were designated as nonvoting, ex officio
Commissioners. The first Commissioners were
sworn in on April 14, 1975.
The 1974 amendments also expanded the public funding system for Presidential elections. The
amendments provided for partial federal funding,
in the form of matching funds, for Presidential primary candidates and also extended public funding
to political parties to finance their Presidential
nominating conventions.
Complementing these provisions, Congress
also enacted strict limits on both contributions and
expenditures. These limits applied to all candidates
for federal office and to political committees influencing federal elections.
7
"Comptroller General of tlie United States. "Report of the Office of
Federal Elections of the General Accounting Office in Administering
the Federal Election Campaign Act of 1971" (February 197.>). pp. 23
and 24.
r
;
"Political commiitee" is defined in 2 U S C. and 11 CFR.
Another amendment relaxed the prohibition
on contributions from federal government contractors. The FECA, as amended, permitted corporations and unions with federal contracts to establish
and operate PACs.
The constitutionality of key provisions of the
1974 amendments was immediately challenged in
a lawsuit filed by Senator James L. Buckley (Conservative Party, New York) and Eugene McCarthy
(former Democratic Senator from Minnesota)
against the Secretary of the Senate, Francis R.
Valeo. The Supreme Court handed down its ruling
on January 30, 1976. Buckley v. Valeo, 424 U.S. 1
(1976).
In its decision, the Court upheld contribution
limits because they served the government's interest in safeguarding the integrity of elections by
preventing even the appearance of corruption of
public officials. However, the Court overturned the
expenditure limits, stating: "It is clear that a primary effect of these expenditure limitations is to
restrict the quantity of campaign speech by individuals, groups and candidates. The
restrictions...limit political expression at the core of
our electoral process and of First Amendment freedoms.'' Acknowledging that both contribution and
spending limits had First Amendment implications, the Court stated that the new law's "expenditure ceilings impose significantly more severe restrictions on protected freedoms of political expression and association than do its limitations on financial contributions." The Court implied, however, that the expenditure limits placed on publicly
funded candidates were constitutional because
Presidential candidates were free to disregard the
limits if they chose to reject public financing; later,
the Court affirmed this ruling in Republican National Committee v. FEC. 445 U.S. 955 (1980).
The Court also sustained other public funding
provisions and upheld disclosure and
recordkeeping requirements. However, the Court
found that the method of appointing FEC Commissioners violated the constitutional principle of
separation of powers, since Congress, not the President, appointed four of the Commissioners, who
�8
exercised executive powers. As a result, beginning
on March 22, 1976, the Commission could no
longer exercise its executive powers. The agency
resumed full activity in May, when, under the 1976
amendments to the FECA, the Commission was reconstituted and the President appointed six Commission members, who were confirmed by the Senate.
9
In response to the Supreme Court's decision.
Congress again revised the campaign finance legislation. The new amendments, enacted on May 11,
1976, repealed most expenditure limits (except for
candidates who accepted public funding) and revised the provision governing the appointment of
Commissioners.
Among the 1976 amendments were provisions
to limit the scope of PAC fundraising by corporations and labor organizations. Preceding this curtailment of PAC solicitations, the FEC had issued
an advisory opinion, AO 1975-23 (the SunPAC
opinion), confirming that the 1971 law permitted a
corporation to use treasury money to establish, operate and solicit contributions to a PAC. The opinion also permitted corporations and their PACs to
solicit the corporation's employees as well as its
stockholders. The 1976 amendments, however, put
significant restrictions on PAC solicitations, specifying who could be solicited and how solicitations
would be conducted. In addition, a single contribution limit was adopted for all PACs established by
the same union or corporation.
"Similarly, in 1993, the U S. Court of Appeals for the District of
Columbia ruled that the Commission's two Congressionallyappointed fx officio members "violate[d| the Constitution's
separation of powers." In compliance with the court's decision, the
Commission reconstituted itself as a six-member body, comprising
only the Presidentially-appointed
Commissioners. As a precaution,
the reconstituted Commission ratified all of its previous decisions to
ensure uninterrupted enforcement of the FECA. The Commission
petitioned the Supreme Court for a writ of certiorari in the case, but
m December 1994. the Court dismissed the Commission's
petition,
concluding that the agency lacked statutory authority to seek
Supreme Court review on its own, in cases arising under the FECA.
The Court's decision left standing the appeals court ruling. (FEC v
NRA Politiail Victory Fund)
'The Supreme Court stayed its judgment concerning Commission
powers for 30 days: the stay was extended once.
Building upon the experience of the 1976 and
1978 elections, Congress made further changes in
the law. The 1979 amendments to the FECA (P.L.
96-187), enacted on January 8, 1980, included provisions that simplified reporting requirements, encouraged party activity at state and local levels and
increased the public funding grants for Presidential
nominating conventions.
Since 1979, Congress has adopted several
amendments of more limited scope, including provisions to:
• Ban honoraria for federal officeholders;
• Repeal the "grandfather clause" that had
permitted some Members of Congress to convert excess campaign funds to personal use
(see page 22); and
• Increase funding for national nominating
conventions.
In addition. Congress enacted legislation that:
• Assigned significant new administrative
duties to the Commission under the National
Voter Registration Act (see page 15): and
• Increased the tax checkoff for the Presidential Election Campaign Fund from $1 to $3.
(see page 12.)
Although Congress has continued over the
years to consider major reform of the current election laws, in recent years relatively few changes to
the law have occurred. The focus of activity has, in
effect, shifted from legislative initiatives to administrative and judicial actions. New developments
have occurred at the Federal Election Commission,
as it has attempted to implement and enforce the
law, and in the courts. These developments are the
subject of the next two chapters.
�CHAPTER 2
ADMINISTERING AND ENFORCING THE FECA
The Federal Election Campaign Act (FECA)
regulates the financing of elections for federal office. It limits the sources and amounts of funds
used to support candidates for federal office, requires disclosure of campaign finance information
and—in tandem with the Primary Matching Pay-
ment Act and the Presidential Election Campaign
Fund Act—provides for the public funding of
Presidential elections. (Chart 2-1 provides a
glimpse of the activity regulated by the federal
election law.)
CHART 2-1
Overall Financial Activity Reported to the FEC
1
Inflation Adjusted Amounts
Actual Amounts
Millions
siiooor
Millions
$3,000 r
•'J Soft Money
j Other*
$2,500
', Presidential Convention
$2,500
Presidential General
Presidential Primary
$2,000
PACs
$2,000
Parties
Senate Candidates
51.500
House Candidates
$1,500
$1,000
$1,000
$500
$500
$0
$0
1976 1978 1980 1982 1984 1986 1988 1990 1992 1994
1976 1978 1980 1982 1984 1986 1988 1990 1992 1994
Activity is expressed in 1994 dollars. This means the values in earlier
years have been increased to account for inflation between lhat vear
and 1994.
'The "Other" category includes communication costs and
independent expenditures.
10
�As the agency charged with administering
and enforcing the FECA, the Federal Election Commission has four major responsibilities:
As questions about the FECA arise, committee
staff can choose from a variety of FEC services designed to help them understand the law and voluntarily comply with its provisions. (These services
are available to anyone interested in learning about
the law. As shown in Chart 2-2, thousands of callers dial the toll-free information hotline for help
each year.) Public affairs specialists answer their
questions about the law, and reports analysts, who
review the actual reports filed by committees, are
also available to respond to questions and offer
guidance on the law. (The Commission's Audit
staff helps Presidential committees comply with
the special rules that govern publicly funded campaigns.) Committee staff can also attend instructional workshops and conferences and/or request
free FEC publications that explain particular aspects of the law. Should committee staff need a
publication or other document quickly, they can
call the agency's automated "flashfax" system and
receive the document immediately by fax, 24 hours
a day, seven days a week. More than 2,500 documents were faxed during the system's first six
months of operation Guly - December 1994).
• Providing disclosure of campaign finance
information;
• Ensuring that candidates, committees and
others comply with the limitations, prohibitions and disclosure requirements of the
FECA:
• Administering the public funding of Presidential elections; and
• Serving as a clearinghouse for information
on election administration.
This chapter highlights the Commission's
stewardship of the FECA, focusing on recent improvements the agency has made in carrying out
its responsibilities.
Since its beginning, 20 years ago, the FEC has
prided itself in providing outstanding service to
the public, the press and the regulated community.
Transcending the Commission's prescribed duties,
the commitment to customer service is most evident in the Commission's efforts to encourage voluntary compliance with the FECA and to facilitate
public access to campaign finance data. This section demonstrates how the agency's outreach and
disclosure programs serve the agency's customers.
If a committee wants official, legally binding
guidance from the Commission, it may request an
advisory opinion (AO). The Commission responds
to these requests within 60 days, or within 20 days
if a candidate's committee submits the request just
CHART 2-2
Telephone Inquiries on the 800-line
120.000
Outreach
For political committees, outreach begins
early. A committee's first contact with the FEC often comes through the agency's toll-free information hotline. Staff from the Information Division
explain the requirements of the FECA and send the
committee a registration packet that contains forms
and publications geared toward its needs.
100.000
80.000
(10.000
When a committee submits its registration
documents, the Commission's Data staff assign it
an identification number and enter the registration
information into the FEC database. Microfilm and
paper copies of the registration are placed on the
public record, and the committee is automatically
added to the mailing list for all official notices and
correspondence from the Commission, including
the agency's award-winning monthly newsletter,
the Record.
•000
1.0
4
20.000
76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94
11
�before an election. An AO answers the requesting
committee's question and also serves as a precedent for other committees in similar situations. The
Commission has issued more than 1.000 AOs since
1975.
To further assist committees, the Commission
sends reminder notices along with the necessary
reporting forms shortly before reports are due.
Disclosure
Disclosing the sources and amounts of funds
used to finance federal elections is perhaps the
most important of the FEC's duties. In fact, it
would be virtually impossible for the Commission
to effectively fulfill any of its other responsibilities
without disclosure. The Commission could not, for
example, enforce the law without knowledge of
each committee's receipts and disbursements. Disclosure also helps citizens evaluate the candidates
running for federal office and it enables them,
along with the agency, to monitor committee compliance with the election law. Given these facts, the
Commission has devoted substantial resources to
providing effective access to campaign finance
data.
When a committee files its FEC report, the
Commission's Public Records Office ensures that a
copy is available for public inspection within 48
hours. Simultaneously, the agency's Data staff begins to enter the information disclosed in the report into the FEC computer database. The amount
of information disclosed has grown dramatically
over the years. By December 1994, more than 12
million pages of information were available for
public review.
In the Public Records Office citizens can inspect microfilm and paper copies of committee reports, as well as the FEC's computer database and
more than 25 different computer indexes that make
the data more accessible. (The G Index, for example, lists individuals who have given more than
$200 to a committee during an election cycle. The K
and L Indexes offer broader "bank statement"
views of receipts and disbursements for PACs, parties and candidates.) Public Records staff assist
thousands of callers and visitors every year. (See
Chart 2-3.)
On-line computer access to a committee's financial data is also available in a number of state
CHART 2-3
Persons Served in Public Records
5 ().()()()
-10.000
:io.ooo
zo.ooo
10.000
•3 tilTf i . ^
78 79 80 81 82 83 84 85 86 87
89 90 91 92 93 94
offices through the State Access Program (SAP),
and to individual subscribers linked by modem to
the Commission's Direct Access Program (DAP).
These systems afford access not only to raw financial data, but also to the various categorical indexes
mentioned above. (Chart 2-4 tracks DAP usage
since December 1989.)
In the near future, computers will play an
even larger role in disclosure. The Commission is
adding a digital imaging system to permit a user to
view a committee's report on a high resolution
computer screen (or a paper copy). just as the
document appeared in its original form. Further,
the Commission plans to develop and implement
an electronic filing program within the next few
years to expedite disclosure and to ease the data
entry burden the agency now faces. (See Chart 2-5.)
Members of the news media may review
committee reports using any of the methods described above, and may receive assistance from the
Commission's Press Office. Staff answer reporters'
questions, issue press releases summarizing campaign finance data and significant FEC actions, and
respond to requests under the Freedom of Information Act (FOIA). The press office logs thousands of
calls each year. (See Chart 2-6.)
�CHART 2-4
Direct Access Usage by Month
Hours
350
300
k
250
200
150
50
f..
\
100
A
/
i.y
1090
/*
\
1992
1991
CHART 2-5
Number of Detailed Contribution
and Expenditure Transactions Processed*
1993
199.1
CHART 2-6
Number of Phone Calls
to the Press Office
1.000.000
25.000
800,000
20.000
G00.000
15.000
•0.0
1000
10.000
200.000
5.000
, i «^ di I p & ?
^ jj n ^ ^ 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94
78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94
"The Commission lowered its data entry threshold from $500 to $200
in 1989, and began entering soft money transactions in 1991.
13
�The Commission also makes available a variety of agency documents, including: advisory opinions, closed enforcement and litigation files, audit
reports and both written minutes and audio tapes
of Commission meetings.
CHART 2-7
Number of Reports Reviewed
by the Reports Analysis Division
5().0()()
As effective as the Commission's efforts to encourage voluntary compliance with the FECA have
been, none would have succeeded without the deterrent provided by the agency's enforcement program. As noted in Chapter 1, earlier campaign finance laws were largely ineffectual because no
single, independent agency handled enforcement.
By contrast, under the current law, the Commission has exclusive jurisdiction over civil enforcement.
•lO.OOO
30.000
f
20.000
Enforcement cases are generated through
complaints filed by the public, referrals from other
federal and state agencies and the FEC's own
monitoring procedures. The Commission's Reports
Analysis Division reviews each report a committee
files in order to ensure the accuracy of the information on the public record and to monitor the
committee's compliance with the law. If the information disclosed in a report appears to be incomplete or inaccurate, the reviewing analyst sends the
committee a request for additional information
(RFAI). The committee may avoid a potential enforcement action and/or audit by responding
promptly to such a request. (Most responses take
the form of an amended report.) Although the
Commission does not have authority to conduct
random audits of committees, it can audit a committee "for cause'' when the committee's reports
indicate violations of the law. (Chart 2-7 tracks report review activity.)
10.000
ih,
ijij*"
%§ *** iff? »./
t
i * - J k ^ tjfa -fe sty . i
79 80 81 82 83 84 85 8 87 88 89 90 91 92 93 94
G
court. Likewise, when Commission actions are
challenged in court, the Commission conducts its
own defensive litigation. The Commission has
been involved in more than 350 court cases since
1980.
2
3
Prioritization
Until recently, the Commission handled every
enforcement matter, regardless of its significance.
As the number and complexity of cases increased,
a backlog developed, jeopardizing the
Commission's ability to effectively enforce the law.
Given its limited resources, the Commission recognized that it could not enforce the law effectively if
it continued to handle every enforcement matter
1
The agency must attempt to resolve enforcement matters through conciliation. If conciliation
fails, however, the Commission (rather than the
Justice Department) may take a respondent to
-With regard to cases that are appealed to tlie Supreme Court,
however, the high Court ruled, in December 1994. that the FEC could
not unilaterally bring cases before it. except those involving the
Presidential public funding program. Instead, the Commission must
ask the Justice Department either to represent the agency or to grant
approval for the Commission lo represent itself before the Court
(FEC v. NRA PoUtical Victoiy Fund)
'In iis legislative recomniendations. the Commission has asked
Congress to reinstate the agency's authority to conduct random
audits. Congress revoked that authority as part of the 1979
amendments to the FECA.
'The Commission has won 90 percent of those cases (excluding cases
lhat were dismissed).
14
�that came before it. As a result, the Commission
developed an enforcement prioritization system.
Under this system, the Commission ranks enforcement cases based on specific criteria, and assigns
only the more significant cases to staff. Less significant cases are held until staff becomes available,
and those that do not warrant further consideration are dismissed. While the prioritization system ensures that the agency devotes its resources
to the more significant cases on its docket, the
Commission continues to pursue a wide range of
cases at all times.
The Commission introduced the prioritization
system in 1993. At the same time, the Commission
began to seek higher civil penalties when it found
serious violations of the law. The agency believes
that this combination of prioritization and higher
penalties will help deter future violations of the
law. (As shown in Chart 2-8, the agency's new approach has had a significant impact.)
CHART 2-8(a)
Conciliation Agreements and
Civil Penalties by Calendar Year*
CHART 2-8(b)
Median Civil Penalty
by Calendar Year*
Thousands
$2,000
Number
$5,000
m
$4,000
$1,500
300
$3,000
200
El.000
$2,000
100
$500
11.000
$0
80
87
88
89
90
91
92
93
8(i
" A n enforcement case may include several respondents. Because
some respondents enter into conciliation agreements more quickly
than otheis. agreements calling for civil penalties in a single
enforcement case may be concluded i n different years The figures in
this chart represent the total penalties included in all conciliation
agreements entered into d u i ing the calendar year specified, whether
or not the case itself was concluded d u r i n g that year.
Note that conciliation agreements for a given case are not made
public until the entire case closes.
15
87
88
89
90
91
92
93
94
�Every Presidential election since 1976 has
been financed with public funds. While the concept
of public funding dates back to the turn of the century, a public funding program was not implemented until the early 1970s.
Congress designed the program to correct the
problems perceived in the Presidential electoral
process. Those problems were believed to include:
• The disproportionate influence (or the appearance of influence) of the wealthiest contributors;
• The demands of fundraising that prevented
some candidates from adequately presenting
their views to the public; and
• The increasing cost of Presidential campaigns,
which effectively disqualified candidates who
did not have access to large sums of money.
funds. The time required for these audits, and the
campaigns' response to the Commission's conclusions, can extend several years after the election.
These delays have frustrated everyone involved,
including the Commission, the candidates and the
public.
To minimize these frustrations, the Commission recently introduced a number of innovations
to expedite the presidential audit process. In 1991
and 1992, the agency revised its regulations,
amended its audit procedures, expanded its use of
technology and increased staffing to hasten the
completion and disclosure of Presidential audits.
The new methods have paid off. The agency issued
the final audit reports of ail the 1992 Presidential
candidates by the end of 1994. In past elections,
some reports had taken up to four years to complete.
1
To address these problems, Congress devised
a program that combines public funding with limitations on contributions and expenditures. The
program has three parts:
• Matching funds for primary candidates;
• Grants to sponsor political parties' Presidential nominating conventions; and
• Grants for the general election campaigns
of major party nominees and partial funding
for qualified minor and new party candidates.
Based on statutory criteria, the Commission
determines which candidates and committees are
eligible for public funds, and in what amounts. The
U.S. Treasury then makes the necessary payments.
Later, the Commission audits all of the committees
that received public funds to ensure that they used
the funds properly. Based on the Commission's
findings, committees may have to make repayments to the U.S. Treasury.
Audits
Ensuring the proper use of public funds requires Commission auditors to review thousands
of transactions involving millions of dollars for
each Presidential candidate who receives public
'See S. Rep. No. 93-689. pp. 1-10 (1974).
Tax Checkoff
The public funding program is exclusively
funded by the dollars that taxpayers designate for
the Presidential Election Campaign Fund on their
1040 tax forms. Beginning in 1980, fewer and fewer
taxpayers designated a dollar to the Presidential
Fund, even as Fund payments to candidates increased with inflation. (See Chart 2-9.)
The Commission warned Congress of an impending shortfall in the Fund and launched a public education program, urging taxpayers to "make
an informed choice'' regarding the checkoff.
In August 1993, Congress preserved the Fund
in the short run by increasing the checkoff amount
from $1 to $3. The legislation did not, however, index the checkoff amount to inflation. Since payments from the Fund will continue to increase with
inflation, a shortfall at some future point remains
inevitable. Should a shortfall occur, current law requires the U.S. Department of Treasury to allocate
remaining funds, giving first priority to the conventions, second priority to the general election
and third priority to the primaries. (For further information, see The Presidential Public Funding Program, a 1993 FEC publication.)
�3
-
>
3 a- £a
February 1995
FEDERAL ELECTION COMMISSION
PRESS OFFICE
(202)219-4155
(800)424-9530
O
a
PRESIDENTIAL FUND — INCOME TAX CHECKOFF STATUS
o
OO
CALENDAR YEAR
19
94
19
93
19
92
19
91
19
90
18
99
18
98
18
97
18
96
1985
% MUSI
9,603,292
13,670,027
16,726,726
11,537,067
9,281,193
5,667,974
903,022
1,155,429
1,181,278
722,307
128,420
! 496,442
4,169,736
5,626,467
5,020,155
5,582,833
3,555,265
1,936,487
337,847
4 84 1
5,7
172,882
227,725
52,672
( 185,784
5,350,532
6,543,872
5,731339
5,808,728
3,635,585
1,119,885
254,933
502,316
201,739
194241
6,8
37 1
( 55,917
3,859,981
8,967,739
6,419,427
5,854,209
4,845,602
958,772
506,805
364,392
144,866
294,056
50,570
( 191,076
3,851,840
9,103,550
6,395,132
5,519,508
4,707,103
1228,985
434,132
545,024
162,037
258,973
65,619
$ 51,752
3,350,332
7 231,448
6,300,921
7,536,090
3,903,518
14 20 1
,0,3
1,347,288
669,189
172,340
250,685
70,052
$ 189239
3,577,465
7217,318
6,998,769
7295,836
3216,574
2,219,724
1,096,980
686,710
155,329
279,726
80,317
( 1 00 1
8,2
2,193,576
9,554,967
7,148,608
6,615,806
4,071,899
2,033,012
830,094
100,870
550,265
267,288
1 55 1
0,4
$ 93,644
2,433,902
7,928,518
9,944248
6,718,371
4,092,492
2,453,593
947,562
690,992
100,254
260,196
90,065
( 22,489
758,295
7,535,879
8,590,753
8,235,644
2,986*13
3,455,350
19 01 1
,1,4
587,237
310,643
229,308
90,209
r-t-
05
r-t-
JNAY
AUR
FEBRUARY
MRH
AC
APRIL
MY
A
JUNE
JULY
AGS
U UT
SEPTEMBER
OCTOBER
N VME
OE BR
DECEMBER
'
TOTAL CHECK-OFF
YEAR-TO-DATE
(71,316,995
(27,636,982
$29,592,73 5
(32,322,336
(32,462,979
(32,285,646
$33,013,987
(33,651,947
(35,753,837
(34,712,761
TOTAL REPAYMENTS YEARTO-DATE
$136,601.00
(129,707 22
(566,078.68
(595,419.14
(39,148.13
(22,024.32
$103,499.76
(357,307.09
(61,640.71
(61,839.97
(568,434.92
(1,048,364.31
(153,191,152.59
(21,200,000.00
(2,426.42
(1,843,016.67
(158,560,804.63
(17,784,000.00
(5,596.22
(1,617,841.66
(101,664,546.86
(30,779,385.78
(4,061,060.87
(127,144,468.62
(115,426,713.48
(82,927,012.77
(52,462,359.12
$177,905,676.99
(161,680,422.90
(125 370,541.41
TOTAL DISBURSEMENTS
YEAR-TO-DATE
F N BALANCE
UD
NOTES:
• MONTHLY DEPOSIT FIGURES ARE NOT AVAILABLE FOR THE YEARS 1973 - 1975.
• 1973 TAX RETURNS PROVIDED TAXPAYERS THE OPPORTUNITY TO DESIGNATE FUNDS FOR 1972 AND 1973
• FIGURES FOR 1973 THROUGH 1976 CAN NOT BE VERIFIED
• ALL MONTHLY DEPOSIT FIGURES HAVE BEEN PROVIDED BV TLIE U S. DEPARTMENT OF Tl IE TREASURY.
ACCORDING IO INTERNAL REVENUE SFIRVICE INFORMATION. THE PERCENT ACF. OF LAX RETURNS PROCESSED INDICATING ONE OR TWO DOLLAR DESIGNATIONS WAS'
1976 RETURNS-27 5 %
1980 RETURNS-ZSJ %
1984 RETURNS-23 0 %
1988 RETURNS —20 I %
1992 RETURNS- 18 9%
1977 RETURNS-28 6%
1981 RETURNS —27 0%
1985 RETURNS—23.0 %
1989 RETURNS — 19 8%
1993 RET URNS — 1 -I 5%,
1978 RF.TURNS-25 4 %
1982 REniRNS-24 2 %
1986 RETURNS-21.7 %
1990 RF.TURNS-19.5 %
1979 RUTllRNS-27.4%
1983 RFTURNS-23.7 %
1U87 RE njRNS -21.0 %
1991 RETURNS— 17.7 %
c
oo
^
�^
§
3
February 1995
FEDERAL ELECTION COMMISSION
PRESS OFFICE
(202)219-4155
(800)424-9530
o
00
I—h
r—h
19M
18
93
1982
1981
1980
17
99
1978
1977
17
96
JNAY
AUR
FBUR
ERAY
MRH
AC
APRIL
MY
A
JN
UE
JULY
AGS
U UT
S PE B R
ETME
OT BR
CO E
N VME
OE BR
DCME
E E BR
S 169^32
3,769,428
8,732337
5,482,270
8,465,697
2,757257
3,171,247
1,113,469
669,569
208,484
205,530
291,141
( 319,570
4,077,295
8347,655
7,527,099
5,778,132
2,987,695
3,000,431
2,071,316
583,082
172,454
182,126
84,213
( 457372
3,790,858
11,013,954
6,338,933
7,427,745
4,145,029
4,193,252
1,049,706
272,412
143312
129,927
61,382
( 684,510
4,141,426
11254,856
7,424,035
7,665,407
4,592,000
3,773,686
871342
300,194
140,723
134,997
65,376
$ 326,184
7,247,271
8,625,855
7,186,840
6,563,699
3,933,738
4,061,737
409,085
235,375
109,983
104,440
34,210
$ 482,973
4,583,893
9,637324
6,713,117
6,581,790
4,233,077
3,035,907
264,192
166,705
123,841
83,457
34,571
$ 689,488
5,986292
9,006,764
9,765,133
5,941,997
4,851326
2224313
409288
136,750
127,755
69,867
36,716
$ 746,685
7,811,426
10,472,777
7,054,795
6,029,693
3,618,171
350,497
225,626
40,564
33,632
$ 876,771
7,487,457
8,828,310
7,090211
6,073361
2,725332
323,616
128,536
88,078
47,965
36,413
24,895
TOTAL C E KO F
HC- F
YEAR-TO-DATE
$35,036,761
(35,631,068
(39,023382
(41,049,052
$38,838,417
$35,941,347
$39 246,689
(36,606,008
(33,731,945
T TLRPY ET YA OA E A M NS E R
T - AE
OD T
(505,807.15
(21399.13
(58,399.69
$202,287.60
$1,094,097.68
$23,473.82
$163,725.41
$1,037,029.10
•0-
(120,149,768.18
(11,786,485.65
(1,070.22
$630,255.73
$101,427,115.89
$1,050,000.00
$6,000.00
(521,124.42
(69,467,521.18
$92,713,782.10
(177,320,982.13
(153,454,500.65
$114,373289.18
$73,752205.31
$135,246,806.52
$100,331,985.70
$60,927,571 29
(23,805,658 61
CLN A YA
AE D R E R
T T L DS U S M N S
OA IB RE E T
YEAR-TO-DATE
FN BLNE
U D AA C
CL
>
W ^
X SL CO
?r
PRESIDENTIAL FUND — INCOME TAX CHECKOFF STATUS
o
C
^
'
�cruitment offices and at offices that issue driver's
licenses (hence the nickname, the "Motor Voter"
law).
The Commission's National Clearinghouse on
Election Administration serves as a central exchange for information and research on issues related to the administration of federal elections.
Clearinghouse programs fall into three broad categories:
• Conducting research, both contract and inhouse;
• Providing information by participating in
meetings of state and local election officials,
briefing foreign visitors and maintaining a
library of election information: and
• Monitoring federal legislation that affects
the administration of elections.
Products of Clearinghouse research span a variety of topics including state campaign finance
law, election case law, state ballot access procedures and state procedures for contested elections
and recounts. The Clearinghouse also publishes the
FEC Joumal of Election Administration and a continuing series of monographs describing recent
technological and administrative innovations in
state and local election offices.
As required under the NVRA, the Clearinghouse informed state and local election officials
and public interest groups about the law's requirements and published a guide for the states entitled
Implementing the National Voter Registration Act of
1993: Requirements. Issues. Approaches, and Examples.
In June 1994, the Commission published final
rules concerning the information that states must
provide to the FEC for its report to Congress on the
NVRA's effect on the administration of federal
elections. The rules also describe the national mail
voter registration form.
The Clearinghouse designed the voter registration form in consultation with state election officials and made it publicly available in January
1995. Under the NVRA, states must accept and use
the form as a means of applying for voter registration or updating registration data.
5
In 1980, Congress directed the Commission to
study the feasibility of developing performance
standards for voting systems used in the United
States. After a decade of research and dialogue, the
Clearinghouse published Performance and Test Standards for Punchcard, Marksense, and Direct Recording
Electronic Voting Systems. This document provides
voluntary performance and test standards that
states and voting systems vendors may use to improve the accuracy, integrity and reliability of computer-based voting systems.
Following the passage of the National Voter
Registration Act of 1993, the Clearinghouse helped
states implement the new law. Congress enacted
the NVRA to facilitate and increase voter registration by providing opportunities to register at a
number of different state agencies or offices. Citizens may, for example, register to vote at state offices that provide public assistance and at those
that provide state-funded services to persons with
disabilities. States must also offer voter registration
via a mail-in registration form, at armed forces re-
'In December 1994. the governor of California filed a lawsuit
challenging the constitutionality of the NVRA. In January 1995. the
Justice Department sued California. Illinois and Pennsylvania for
refusing to comply with the statute Two other states. Michigan and
South Carolina, also failed to comply, but were not named in the suit.
In the wake of the Justice Department's action. South Carolina filed a
preemptive lawsuit to prevent the governmeni from forcing it to
comply with the law. Nonetheless, in February 1995. the Justice
Department filed suit against South Carolina. At the lime of
publication, none of these cases had been resolved.
�CHAPTER 3
KEY ISSUES BEFORE THE COMMISSION
" [SJafeguarding the integrity of the electoral
process without...impinging upon the rights of individual citizens and candidates to engage in political debate and discussion." Those words, from
the Supreme Court's Buckley v. Valeo decision, describe the balance that the Commission has tried to
achieve as it has administered and enforced the
Federal Election Campaign Act. During the last 20
years, the Commission has wrestled with many
difficult issues, often searching for ways to balance
the governmental interest of ensuring the integrity
of the electoral process and our representative
form of government with the constitutional rights
to free speech and free association. This chapter examines that search, focusing particularly on a few
of the difficult issues that the Commission is currently addressing or has recently resolved.
to provide an unfair advantage in the political marketplace." (FEC v. Massachusetts Citizens for Life). At
the same time, however, the power to regulate corporate communications is limited by the constitutional protections for political speech.
Section 441b of the FECA prohibits all contributions and expenditures by corporations and labor organizations in connection with federal elections. The Supreme Court's 1986 decision in FEC v.
Massachusetts Citizens for Life (MCFL) altered the
application of that ban in two ways. First, the
Court effectively narrowed the scope of the prohibition by concluding that "an expenditure must
constitute 'express advocacy' [i.e., expressly advocate the election or defeat of a clearly identified
candidate] in order to be subject to the prohibition
of §441b." Second, the Court held that §441b's ban
on independent expenditures—which by definition
include express advocacy—is unconstitutional as
applied to a small group of incorporated, nonprofit
organizations that meet certain criteria.
1
The extent to which the FECA may limit election-related communications by corporations has
been among the most contentious and constitutionally significant topics of debate in recent years,
both in the courts and at the Federal Election Commission. As the Supreme Court has noted, "the
special characteristics of the corporate structure require particularly careful regulation. " (FEC v. National Right to Work Committee). The Court has
warned that "Direct corporate spending on political activity raises the prospect that resources
amassed in the economic marketplace may be used
This section explores the implications of the
MCFL decision, looking first at the express advocacy standard, then at the so-called "MCFL exemption" for nonprofit corporations and. finally, at the
Commission's rulemaking to implement the MCFL
decision.
'Tlie cnse involved an MCFL-produced newsletter that advocated the
election of pro-life candidates
20
�penditures^ by an individual, the U.S. Court of Appeals for the Ninth Circuit concluded that "[political] speech need not include any of the words
listed in Buckley to be express advocacy under the
Act, but must, when read as a whole, and with limited reference to external events, be susceptible of
no other reasonable interpretation but as an exhortation to vote for or against a specific candidate. "
Express Advocacy
For some time after the MCFL ruling, it was
the Commission's view that the Court's application
of the express advocacy standard was dictum (a
statement, but not a binding ruling) because it was
unnecessary to the Court's resolution of the case.
However, a subsequent decision by the U.S. Court
of Appeals for the First Circuit in Fauctier v. FEC
reasoned that express advocacy was essential to
the application of 441b's prohibition on corporate
expenditures. Since the Supreme Court declined to
review that decision, the agency has followed the
express advocacy standard.
Elaborating on this standard, the appeals
court held that a political communication would
constitute express advocacy if:
• The communication "is unmistakable and
unambiguous, suggestive of only one plausible meaning," even if "not presented in the
clearest, most explicit language";
Defining express advocacy, and distinguishing it from issue advocacy, have proven to be
daunting tasks for the courts and the Commission.
• The communication "presents a clear plea
for action"; and
The "express advocacy" standard was first
employed in the landmark Supreme Court case,
Buckley v. Valeo (although not in the context of
§44lb). In its decision, the Court defined express
advocacy as "communications that in express
terms advocate the election or defeat of a clearly
identified candidate for federal office," including
"communications containing express words of advocacy of election or defeat, such as 'vote for,'
'elect,' 'support,' 'cast your ballot for,' 'Smith for
Congress,' 'vote against,' 'defeat,' [or] 'reject.'"
• There can be no reasonable doubt about
"what action is advocated."
The appeals court concluded that this express
advocacy standard would "preserve the efficacy of
the Act without treading upon the freedom of political expression."
The court warned that a more rigid application of the Buckley definition "would preserve the
First Amendment right of unfettered expression
only at the expense of eviscerating the Federal
Election Campaign Act. 'Independent' campaign
spenders working on behalf of candidates could remain just beyond the reach of the Act by avoiding
certain key words while conveying a message that
is unmistakably directed to the election or defeat of
a named candidate."
In MCFL, which is the only post-Budc/ey Supreme Court decision involving express advocacy,
the Court applied its Buckley definition and concluded that the MCFL's "Special Election Edition"
newsletter did contain express advocacy, despite
the absence of explicit "Vote for Smith" language.
"The publication not only urges voters to
vote for 'pro-life' candidates, but also
identifies and provides photographs of
specific candidates fitting that description.
The Edition cannot be regarded as a mere
discussion of public issues that by their
nature raise the names of certain politicians. Rather, it provides in effect an explicit directive: vote for these (named)
candidates. The fact that this message is
marginally less direct than 'Vote for
Smith' does not change its essential nature."
The district court decision in FEC v. National
Organization for Women relied on the Furgatch test,
concluding: "The words listed in Buckley are not
the only ones which will be deemed express advocacy."
•'An independent expenditure is an expenditure for a comniuuication
which expressly advocates the election or defeat of a clearly
identified candidate and which is not made in cooperation or
consultation with or at the request or suggestion of. or with the prior
consent of any candidate or his or her authorized committees or
campaign agents. 2 U.S C. §431(17). Persons making certain
independent expenditures must report them and include a
disclaimer 2 U.S.C. §§434(l>)(6)(B)(ih) and (C) and 44 Id.
The courts have offered additional interpretations of Buckley's express advocacy definition. In
FEC v. Furgatch, which involved independent ex-
21
�In Faucher v. FEC (noted earlier), however, the
U.S. Court of Appeals for the First Circuit seemed
to eschew the Furgatch interpretation of Buckley.
"In our view, trying to discern when issue advocacy... crosses the threshold and becomes express
advocacy invites just the sort of constitutional
questions the Court sought to avoid in adopting
the bright-line express advocacy test in Buckley."
The Court identified three features of MCFL
that were essential to its ruling that MCFL was exempt from the ban on corporate independent expenditures. Those features are:
• The organization is a nonprofit ideological
corporation formed "for the express purpose
of promoting political ideas, and cannot engage in business activities."
More recent decisions on express advocacy
have relied on a similar interpretation of Buckley. In
FEC v. Colorado Republican Federal Campaign Committee, a district court cited Furgatch. but concluded: "Trying to determine whether the surrounding circumstances, coupled with the implications of the [publication], constitute express advocacy' leads to the type of semantic dilemma which
the Court sought to avoid by adopting a bright-line
rule." The court "decline[d] to blur Buckley's
bright-line rule." (Significantly, this case—for the
first time—applied the express advocacy standard
to §441a(d), which governs coordinated political
party expenditures. The Commission has appealed
the decision.)
• It has "no shareholders or other persons
affiliated so as to have a claim on its assets or
earnings."
• It has not been established by a corporation
or labor union and has a policy "not to accept
contributions from such entities."
In subsequent cases, courts have applied this
three-part test to other organizations. In Austin v.
Michigan Chamber of Commerce, for example, the Supreme Court upheld the application of a Michigan
statute containing prohibitions similar to those
found in §441b. The Court concluded that the
Chamber of Commerce did not qualify for the
MCFL exemption because it did not meet the threepart test.
Similarly, in FEC v. Survival Education Fund.
Inc.. a district court concluded that "expressions of
hostility to the positions of an official, implying
that that official should not be reelected—even
when that implication is quite clear—do not constitute the express advocacy which runs afoul of the
statute." (The Commission has also appealed this
decision.)
In fact, the Court concluded that the Chamber
did not possess any of the three essential features:
• The Chamber's activities were not limited
to political and public educational purposes.
• "[T]he Chamber's members [were] more
similar to the shareholders of a business corporation than to the members of MCFL" because the members had an economic disincentive to withdraw support from the organization if they disagreed with its political views.
The range of express advocacy definitions espoused by the courts—from "bright line" to "reasonable interpretation"—has profoundly affected
the Commission's consideration of new regulations
governing corporate communications. (See FEC
Rulemaking, below.)
• The Chamber had no policy against accepting contributions from corporations or unions,
and, because three-fourths of the Chamber's
members were business corporations, the
organization's treasury contained corporate
funds in the form of membership dues.
The MCFL Exemption
In the portion of the MCFL decision that resolved the case, the Supreme Court concluded that
"§441b's restriction on independent spending is
unconstitutional as applied to MCFL." The Court
explained that:
FEC Rulemaking
Shortly after the MCFL decision, the National
Right to Work Committee (NRWC) filed a petition
asking the FEC to rewrite its rules to adopt the
Court's conclusion that "express advocacy" is the
proper standard for determining when communications by corporations and labor organizations are
"Some corporations have features more
akin to voluntary political associations
than business firms, and therefore should
not have to bear burdens on independent
spending solely because of their incorporated status."
22
�prohibited under §44lb. The Conunission responded by publishing an Advance Notice of ProDosed Rulemaking seeking comments on how the
igency should respond to the MCFL decision.
soft money - n. [slang]: funds raised and/or
spent outside the limitations and prohibitions of
the Federal Election Campaign Act. Sometimes
referred to as nonfederal funds, soft money often includes corporate and/or labor treasury
funds, and individual contributions in excess of
the federal limits, which cannot legally be used
in connection with federal elections, but can be
used for other purposes.
The Commission received more than 17,000
comments in response to the Advance Notice, most
of which supported the NRWC's position on express advocacy. Nevertheless, the comments, the
testimony at public hearings on the subject and discussions among the Commissioners themselves all
revealed a wide range of views on how broadly or
narrowly the Commission should define express
advocacy. Some encouraged the Commission to
limit express advocacy to the words and phrases
spelled out in Buckley, while others—citing MCFL
and Furgatch—favored a broader interpretation.
Soft money is one of the most difficult issues
the Commission has addressed during the last 20
years. The origins of "soft money" lie in the United
States' federal system of government. The Constitution grants each state the right to regulate certain
activities within that state. In the area of campaign
finance, each state may establish its own rules for
financing the nonfederal elections held within its
borders. As a result, committees that support both
federal and nonfederal candidates frequently must
adhere to two different sets of campaign finance
rules—federal and state. (Sometimes, cities and
counties create yet a third set of rules governing
the financing of local elections.)
In the wake of the Austin decision, the Commission published a second notice inviting comments on express advocacy and the MCFL exemption. Again, most of the those commenting supported adoption of a narrow express advocacy
standard. Several also offered suggestions for
implementing the MCFL exemption.
In its attempt to craft regulations, the Commission has struggled to find an express advocacy
definition that is narrow enough to avoid impinging upon First Amendment rights, but broad
enough to ensure the effectiveness of the federal
election laws. The definition must distinguish express advocacy from issue advocacy without creating a loophole that would, in effect, allow corporations, labor unions and individuals to sidestep the
requirements of the election law.
Acknowledging this fact, FEC regulations permit committees to establish separate bank accounts
for federal and nonfederal activity. Only funds deposited into the federal bank account are subject to
the limitations, prohibitions and disclosure requirements of the FECA. The nonfederal or "soft
money" account is subject only to state laws, which
may be more permissive than the FECA. As a result, only funds from the federal account may be
used to influence federal elections.
In August 1994, the Commission tentatively
approved an express advocacy definition, but has
not taken final action on the rulemaking.
Some expenses incurred by these committees,
however, may in fact relate to both federal and
nonfederal elections. Party committees, for example, may purchase generic get-out-the-vote advertisements that benefit both their federal and
nonfederal candidates. To pay for these ads, committees must use federal funds for the portion that
benefits federal candidates, but may use soft
money for the rest (i.e.. the portion that benefits
nonfederal candidates).
The Commission is also considering proposals
to implement the MCFL exemption allowing certain nonprofit advocacy groups to make independent expenditures using treasury funds. In addition, the rulemaking proposals under consideration would revamp the applicable standards for
corporate and union activities such as the publication of voter guides and candidate endorsements,
in line with the MCFL decision.
During the 1980s, some argued that—among
other things—committees were underestimating
the federal share of their expenses. As a result, soft
money covered not only the costs attributable to
23
�nonfederal candidates, but also those related to
federal candidates. At the time, FEC regulations required committees to allocate expenses between
their federal and nonfederal accounts on a "reasonable basis. '" Some public interest groups believed
this standard was too vague and failed to provide a
framework for monitoring improper use of soft
money in federal elections.
Despite these significant new regulations,
some legislators and public interest groups are still
concerned about the effects of soft money. They
say. for example, that soft money spending—even
for the nonfederal share of expenses—influences
federal elections because it permits committees to
conserve federal funds that can later be spent to
support federal candidates.
In November 1984, Common Cause submitted
a rulemaking petition asking the Commission to
adopt more stringent rules to preclude allocation
and thereby close the perceived soft money loophole. In 1986, after conducting public hearings, the
Commission concluded that evidence of improper
use of soft money in federal elections was insufficient to justify the rule changes suggested in the
Common Cause petition.
Many are also concerned about the way committees raise soft money. They believe that the active role federal candidates and their associates
play in raising large sums of soft money, at the
very least, creates an appearance of undue influence by the contributors on the federal candidates
involved.
Others, however, view federal regulation of
soft money as an unwarranted intrusion into the financing of nonfederal elections. They argue, in
part, that complex federal regulations may have a
chilling effect on grassroots electoral activity.
(Ironically, some states regulate the financing of
their nonfederal elections so strictly that federally
permissible funds cannot legally be spent for state
and local activity.)
Common Cause responded by filing a suit
against the FEC. The suit asked the U.S. District
Court for the District of Columbia to declare that
the Commission had acted contrary to law by denying the rulemaking, and to order the Commission to act on the petition. The court upheld the
Commission's decision to deny the rule changes
Common Cause had requested, but it did order the
FEC to clarify its allocation regulations.
In June 1990, after evaluating information
gathered from a questionnaire, from responses to a
notice of proposed rulemaking and from testimony
at hearings, the Commission approved new regulations. The rules:
CHART 3-1(a)
Party Federal and
Nonfederal Receipts
• Specify formulas that committees must use
to determine the amount of federal funds required to be spent for any activity that benefits both federal and nonfederal candidates;
NonledeiTil Receipts
Federal Receipts
Democratic National Committee (DNC)
• Require expanded reporting of shared federal/nonfederal spending; and
• Establish the presumption that funds raised
through activities that mention a federal candidate are federal funds.
i!m:s-!M
Republican National Committee (RNC)
As a result of the revised rules, which took effect January 1, 1991, the national party committees
now disclose all of the receipts and disbursements
of their soft money accounts. (See Chart 3-1) Other
committees that maintain two accounts—federal
and nonfederal—must report detailed information
on their shared expenses and also show the
amount of soft money used to pay the nonfederal
portion of those expenses.
: i-s-.i.'.
1991-92
24
1993-94
�CHART 3-1(b)
Sources of Party Receipts
riiM
DNC Federal Receipts by Source
RNC Federal Receipts by Source
Olher
Other
PACs
PACs
Individual over $200
Individual ovei $200
Individual $200 or less
Individual $200 or less
-I
0
r
>
I
I
I
I
10
15
20
25
Millions of Dollars
'M)
I
;i5
0
DNC Nonfederal Receipts by Source
10
20
:i0
-0
1
50
Millions of Dollars
(iO 70
RNC Nonfederal Receipts by Source
Within Party
Within Party
Other
Other
Individual
Individual
PAC
PAC
r
*S5
Labor
Labor
Corporate
Corporate
10
15
Millions of Dollars
20
25
10
15
Millions of Dollars
CHART 3-1(c)
Party Federal and Nonfederal Disbursements - 1994
20
25
Nonfederal
Federal
DNC
RNC
Other
Other
Building Fund
Building Fund
Federal Operating
Expenses
Federal Operating
Expenses wmmwitezmamw*iissm»mmmm&«.
Transfers to States
a
Transfers to States * '
Other Joint
B 8 W t i
*
Other Joint
Joint Fundraising
Joint Fundraising
Joint Administrative
loint Administrative
Coordinated Expend
Coordinaled Expend
Contributions
Contributions
-I
(i
8
1
1
Millions of Dollars
12
M
25
10
15
20
25
Millions of Dollars
30
35
�In adopting its soft money allocation rules, the
Commission proceeded as far as its statutory authority would permit, short of barring the combined use of federal and nonfederal funds altogether. It then asked Congress to consider whether
legislation was needed to deal not only with the
way soft money is spent, but also with the way it is
raised. In the package of legislative recommendations sent to the President and Congress in 1994,
the Commission asked Congress to consider
changes in several areas, including:
meals, to pay for pleasure and vacation trips, to
pay for club dues and tickets to theater and sporting events... claiming these activities are related to
campaign or official duties." Others complained
that 'some campaign coffers are regarded as slush
funds to be used by incumbents for whatever purposes meet their fancy." (Fritz/Morris, p. 9)
In response to the criticism, Congress repealed
the "grandfather clause" by passing the Ethics Reform Act of 1989. That statute extended the personal use ban to all candidates, including Members
of the House and Senate who served in the 103d
Congress or a subsequent Congress, but it did not
define "personal use."
• Expanding disclosure of soft money receipts;
• Prohibiting the use of a federal candidate's
name or appearance to raise soft money:
• Requiring that all party activity which is
not exclusively on behalf of nonfederal candidates be paid for with federally permissible
funds.
With the repeal of the "grandfather clause."
the Commission expected additional questions regarding the scope of the personal use ban. As a result, the Commission initiated a rulemaking to define the term. Conflicting comments and testimony
at public hearings demonstrated the controversial
nature of the issue: One person's "personal use" is
another's legitimate campaign expenditure.
Congress banned personal use of excess campaign funds as part of the 1979 amendments to the
FECA. That ban, however, did not apply to candidates who were Members of Congress on January
8, 1980 (due to the so-called "grandfather clause").
nor did it define the parameters of "personal use."
After carefully considering the issues, the
Commission adopted detailed regulations that define personal use, and offer specific examples of expenses that the Commission will consider personal.
Generally, under the new rules, expenses that
would exist regardless of an individual's campaign
for federal office or duties as a federal officeholder
are deemed personal. Examples include:
• Confining soft money fundraising and
spending to nonfederal election years; and
• Household expenses;
Since most of the candidates initially seeking
guidance under this section were incumbents, who
were exempt under the "grandfather clause," the
Commission was rarely called upon to address the
personal use issue. When questions did arise, the
Commission tried to find answers that took into account both Congress's desire to prohibit the (undefined) "personal use" of campaign contributions
and the need to give candidates and campaigns the
discretion to conduct their campaigns as they saw
fit. Once again, the Commission was called upon to
find a balance between legislative interests and
constitutional freedoms, mindful of practical considerations.
• Funeral expenses;
• Tuition payments;
• Entertainment expenses; and
• Membership dues at clubs.'
The Commission was unable to resolve the
question of whether campaigns may pay a salary
to a candidate during the campaign. Some Commissioners maintained that salary payments represented an illegal conversion of campaign funds to
personal use. Others argued that banning campaign salaries unfairly disadvantaged challengers.
They pointed out that challengers often had to
leave their jobs in order to campaign, while incum-
As years passed, public interest groups and
the press began to focus public attention on the
way certain Members of Congress and other candidates spent their campaign funds. Common Cause,
for example, alleged that "Members are using campaign funds to buy cars, to pay for clothes and
While these expenses ate generally considered personal, the
tegulations do specify certain exceptions.
26
�bents continued to draw their Congressional salaries throughout the campaign. In its rulemaking,
the Commission considered two proposals to address the salary question: one would have banned
candidate salaries; the other would have allowed
candidates to receive a salary equal to the one they
were forced to give up in order to campaign. Neither proposal, however, garnered support from a
majority of the Commissioners.
"best efforts" to obtain and report contributor information. The steps include:
• Requesting contributor information in the
initial solicitation;
• Making a follow-up request solely devoted
to seeking the missing information (if necessary);
• Reporting the information; and
The new regulations took effect in 1995.
• Filing necessary amendments to disclose
previously unreported information.
Given the importance of disclosure and the
evidence of past noncompliance in this area, the
Commission also specified the language to be used
in the request and its minimum type size, the timing and content of any follow-up request, and the
applicable reporting requirements.
Disclosure... is the single greatest check on
the excesses of campaign finance...." (Sabato, p. 63)
That is why the Commission devotes so much
time, effort and money to ensure that campaign finance information is readily accessible to the public, and that the information is accurate and complete.
The three national Republican party committees filed suit against the Commission challenging
the rules. They argued that the requirements violated free speech rights, exceeded the
Commission's statutory authority and were contrary to Congressional intent. The U.S. District
Court for the District of Columbia, granting the
FEC's request for summary judgment, rejected the
parties' challenge. (The case is on appeal.)
J
Under the Act and FEC regulations, a committee must disclose the name, mailing address, occupation and employer of each individual who contributes a total of more than $200 in any calendar
year. Although the rules do not compel individual
contributors to provide this information, a committee must make its "best efforts" to obtain and report it. Should the committee fail to fully identify a
contributor on its report, it must be able to demonstrate that it made its "best efforts" to do so.
Through its regular review of reports and its
enforcement actions, the Commission discovered
that some committees routinely failed to disclose
the occupation and employer for a large percentage of their $200-plus contributors. At that time,
committees could satisfy the "best efforts" requirement by making at least one written or oral request
for contributor information per solicitation. Some
committees, however, printed these requests in
small type, and did not adequately convey the importance of providing the information. Given these
facts, the Commission decided to initiate a
rulemaking to strengthen and clarify the "best efforts" standard.
Background
Section 44le of the Federal Election Campaign
Act explicitly prohibits foreign nationals from
making contributions in connection with any U.S.
election (federal, state or local), either directly or
through another person. The contribution ban
originated in the 1966 amendments to the Foreign
Agents Registration Act, and was incorporated directly into the FECA ten years later. In 1989, the
Commission modified its regulations to clarify that
expenditures by foreign nationals—like contributions—are prohibited. The ban applies to individuals who are not U.S. citizens (except those with
"green cards" ') and to foreign governments, politir
After soliciting public comments, conducting
hearings and surveying the regulated community
on the subject, the Commission promulgated new
regulations in 1994 that specify the steps committees must take to demonstrate that they made their
'The Republican National Committee. National Republican Senatorial
Committee and the National Republican Congressional Committee.
'A green card" indicates thai an individual has been lawfully
admitted for permanent residence in the United States
27
�cal parties, partnerships, associations and corporations. 11 CFR 110.4(a).
taken action in several enforcement matters. In
1994, for example, the Commission concluded two
investigations that uncovered more than $312,000
in illegal foreign donations to state and local campaigns in Hawaii. (MURs 2892 and 3460) The illegal donors were mostly foreign-owned U.S. corporations that had either used funds provided by
their foreign owners or allowed foreign individuals
to make decisions (either directly or indirectly)
concerning the contributions. The Commission
fined the donors a total of $219,225 and sent admonishment letters to the recipient candidates and
party committees instructing them to refund the illegal donations or otherwise rid their accounts of
the money.
Foreign-Owned Corporations
The Commission has been asked, on numerous occasions, how the ban affects foreign-owned
corporations which are located in the United
States. In response, the Commission created a twopart test to determine whether these companies
could establish federal PACs (hereafter referred to
as separate segregated funds or SSFs) or make contributions and expenditures to influence state and
local elections. Under the test, a foreign-owned
corporation could not establish an SSF or make
nonfederal contributions or expenditures if:
6
• Foreign nationals made any decisions regarding the SSF's activities or the company's
nonfederal contributions or expenditures; or
• The funds used to run the SSF or to make
federal (SSF) or nonfederal (corporate) contributions or expenditures came from the foreign
owner. (See also AOs 1992-16, 1990-8, 1989-29,
1989-20, 1985-3 and 1982-10.)
The Commission codified this test in 1989
when it prescribed 11 CFR 110.4(a)(3). That section
clarifies that foreign nationals cannot participate,
even indirectly, in election-related decisions.
7
The two-part test, in effect, respects both a legitimate government interest (prohibiting foreign
involvement in U.S. elections) and the constitutional guarantees of free speech and association.
On the one hand, the test ensures that foreign entities will not influence U.S. elections while, on the
other hand, it preserves the rights of domestic corporations and their U.S. employees to form an SSF
to support federal candidates and/or to make
nonfederal corporate contributions or expenditures, subject to state law.
Despite the clear standards the Commission
established, violations of the foreign national ban
have occurred. Consequently, the Commission has
'Tlie FIICA prohibiis corporate contributions and expenditures in
connection with federal elections. 2 U.S.C. 441b. Some states,
however, allow corporations to use their treasury funds to support
nonfederal candidates.
'In I9!)0. the Commission considered, but rejected, a proposed rule
that would have treated a domestic corporation as a foreign national
if its foreign ownership exceeded 50 percent.
28
�CHAPTER 4
CONTINUING DEBATE OVER REFORM
Although the last major amendments to the
Federal Election Campaign Act (FECA) were
adopted in 1979, campaign finance reform continues to spark debate both within Congress and
throughout the country. This chapter examines
some of the fundamental issues at the top of the reform agenda, supplemented by FEC statistical
data.
Some suggest that the FECA has further
weakened the parties. "The regulation of political
finance... seldom took direct aim at party organizations and practices. Nevertheless, it has altered the
parties' roles, the base of resources, and the campaign environment to which they must adapt. "
(Price, Bringing Back the Parties, p. 239) It is argued,
for example, that the Presidential public funding
program, which provides public money directly to
qualified candidates, has further reduced the parties' role in selecting Presidential nominees by encouraging the trend toward candidate-centered
politics. (Price, p. 243)
For many years conventional wisdom has
held that political parties are gradually becoming
less relevant in the American political arena. Up
until the 1950s and '60s, the parties dominated the
electoral process. (Sorauf, Inside Campaign Finance,
p. 3) Then, a number of factors—including social,
political, technological and governmental
changes—coalesced to reduce party influence.
Critics believe that the FECA has also bolstered PACs at the parties' expense: "[Ajs PACs
began gathering strength in the 1970s, the parties
began a steady decline in power." (Sabato, p. 17) In
fact, they say, "PACs have emerged as major competitors of the parties in financing campaigns, aggregating interests, and claiming the attention and
loyalty of candidates and officeholders. " (Price, p.
244)
• Direct primaries limited the role parties
played in selecting nominees.
• Changes in civil service laws limited patronage, which parties had used to reward
loyalists.
Many attribute this turn of events to the
FECA's contribution limits. They affect both the
How of money into the parties and the stream of
party contributions to candidates. Although the
limit on individual contributions to parties
($20.000/year to a national party committee and
$5,000/year to a state party) is higher than (or
equal to) the limit on contributions to PACs
($5.000/year), some suggest that the party limit
poses a greater obstacle. Party fundraising, they
say, tends to rely on long-term relationships between the party and wealthy donors. These con-
• Higher education levels spawned issueoriented campaigns, where voters and candidates were less reliant on party guidance.
• Television replaced the party as the primary link between candidates and voters.
(Sabato, Paying for Elections: The Campaign Finance Thicket, p. 47 and Crotty, American Parties in Decline, p. 75)
29
�tributors. who once gave in abundance, must now
curtail their federal contributions to comply with
the limits (or contribute nonfederal "soft money").
Issue-oriented PACs, on the other hand, may inspire immediate enthusiasm among a multitude of
individual contributors who may contribute less
individually, but make up for it in their numbers.
(Price, p. 244)
CHART 4-1
Sources of Campaign Receipts
On the other side of the equation, parties and
PACs both may contribute $5,000 per election to a
candidate,' but PAC contributions consistently
comprise a higher percentage of candidates' total
funds. Even if one accounts for the parties' additional coordinated party expenditures, which can
amount to hundreds of thousands of dollars per
candidate, the parties' piece of the campaign pie
remains comparatively small. (See Chart 4-1.) The
discrepancy can be attributed largely to the fact
that there are thousands of federally-registered
PACs and only a relative handful of registered
party committees. Prior to the passage of the
FECA, there were virtually no PACs at all. In addition, state and local party committees tend to support only candidates within their geographic area,
whereas PACs often support candidates throughout the country.
MO
O
House Candidates
Millions
$500
Olher*
Candidaie
.' - Party
PACs
Individuals
$300
$200
2
$100
1978
The Commission's regulations concerning
"soft money have also drawn fire from some critics. They argue that the Commission's complex
"soft money" allocation rules have discouraged
grassroots party organizations from engaging in
federal election activities—contributing to party
decline. (Price, p. 245)
1980 1982 1984 1980 1988 1990 1992 1994
Senate Candidates
Millions
$400
3 Other*
31 Candidate
Party
$350
PACs
Individuals
$300
$250
$200
'A party's national committee and Senate campaign committee share
a special limit for Senate candidates: $17,500 pet candidate for the
entiie campaign period.
$150
'Parly committees are the only privately financed entities that are
subject to expenditure limits. (Committees that participate in the
Presidential public funding program may voluntarily agree to limit
their spending in exchange for public funds.) Unlike PACs and
individuals, parties cannot make unlimited "independent
expenditures'' to support or oppose particular candidates. The party
committees are presumed to be acting in coordination with their
nominees.
$100
$50
$1
1
'As noted in Chapter 3. the term soft money '' refers to funds raised
and/or spent outside the limitations, prohibitions and disclosure
requirements of the Federal Flection Campaign Act These funds are
used to support stale and local candidates, and to pay the nonfederal
portion of certain expenses that benefit both federal and nonfederal
candidates.
1978
1980
1982
1984
1986
1988
1990
9192
1994
'The Other'' category includes dividend or interest income, refunds
or rebates from vendors and other miscellaneous receipts.
30
�Many, however, find the critics' evidence of
party decline inconclusive. They discount, for example, the significance of PAC/party contribution
omparisons, noting that—despite the PACs' apparent dominance—the amounts raised and spent
by parties generally indicate growth, rather than
decline. Further, they point out, the true importance of parties cannot be measured by contributions and expenditures alone. Parties produce generic materials and engage in other activities that
also benefit federal candidates. For example, as a
result of the 1979 amendments to the FECA, state
and local party committees may produce and distribute slate cards and sample ballots, as well as
yard signs, bumper stickers and other campaign
materials that aid federal candidates, but are not
considered contributions or coordinated party expenditures. As another example, parties may engage in generic voter identification and get-outthe-vote drives which have a significant impact on
elections. Yet these activities are not considered
contributions or expenditures. (See Chart 4-2.)
CHART 4-2
Federal Spending by PACs and Parties*
Millions
l )()0
r
$•100
$300
$200
$100
Regardless of their stance on the strength or
weakness of the parties, virtually all observers
agree that parties are essential to American politics. The parties provide stability, unity and accountability in policymaking, and they increase
Tectoral competition by funding challengers more
jften than PACs or individuals do. (Magleby/
Nelson, The Money Chase: Congressional Campaign
Finance Reform, p. 121)
1978
1980
1982
1984
1986
1988
1990
1992
1994
'Parties tnust use their own funds to pay administrative and
solidtalion expenses. By contrast, a separate segregated fund's
connected corporation or labor union may pay its administrative and
solicialion expenses.
Others believe that the election laws already
favor parties, and the candidates they support, in
relation to independent candidates (i.e., those not
affiliated with any political party). Independents,
they note, enjoy none of the financial advantages
that come with party affiliation: party contributions, coordinated party expenditures, generic support, etc.
These facts have led some to push for statutory changes that would strengthen the parties:
"Given parties' vital centrality in the American system, they should be accorded special, preferential
treatment in the statutes that limit and regulate
campaign finance." (Sabato, p. 50) Some, for example, advocate increasing the amount parties
may contribute to candidates. They argue that such
an increase would not risk the "fat cat" or special
interest concerns inherent in increasing the individual or PAC limits, and that it might aid
policymaking by holding legislators more accountable to the party. (Cantor, CRS Issue Brief: Campaign
Financing, p. 6) Others, however, warn that unless
soft money donations to party committees are
reigned in, any increased role for parties in the
funding process may only undermine the efforts
made to reduce the deleterious effect of large special interest contributions.
Background
The term "political action committee" (PAC)
actually refers to two distinct types of political
committees—separate segregated funds (SSFs) and
nonconnected committees. SSFs are PACs sponsored by corporations, labor organizations, trade
associations and other incorporated groups. The
sponsoring organization may pay the costs associated with operating its SSF. Nonconnected committees, on the other hand, are not sponsored by a
31
�corporate or labor entity. They must pay their own
administrative expenses. Both types of PACs may
contribute up to $5,000 per election to a federal
candidate—assuming the PAC qualifies as a
multicandidate committee. (Chart 4-3 tracks the
number of PACs registered with the FEC over the
last 20 years.)
The Case for PACs
PAC supporters contend that critics have exaggerated PACs' negative effects on elections and
legislation. In fact, they say, "PACs are both natural and inevitable in a free, pluralistic democracy...
[T|he vibrancy and health of a democracy depend
in good part on the flourishing of interest groups
and associations among its citizenry." (Sabato. p. 4)
The Case Against PACs
In recent years, many have warned of the deleterious effect that PACs, and the "special interests" they represent, have on elections and legislation. Some PACs, critics note, have sufficient resources to dominate the financing of campaigns.
(See Chart 4-1, p.26.) Many find the discrepancy
between the contribution limit for individuals
($1,000 per election) and the limit for
multicandidate PACs ($5,000 per election) particularly troubling.
In fact, some have suggested that PACs are at
least partially responsible for the increased number
of minorities elected to Congress. They note that
minority candidates are seldom wealthy, and often
represent predominantly poor districts where most
individuals cannot afford to contribute: "If your
district is poor, you're not wealthy and you're excluded from affluent circles, it's hard to raise
money." (Rep. Eva Clayton (D-NC), as quoted in
Congressional Quarterly. Sept. 25. 1993.) White candidates, they argue, are more likely to be wealthy
and/or have access to wealth. Without PAC funding, some say minority candidates could not amass
sufficient funds to communicate effectively with
the electorate.
4
PAC critics also cite instances of sizable contributions that appear to sway the votes of particular members of Congress. During 1994, for example, several studies linked contributions from
insurance and health industry PACs to the demise
of health reform legislation in the 103d Congress.
Implicit in these studies, and others like them, is
the notion that "special interest" PACs subvert the
"public interest" by making large campaign contributions.
PAC supporters also dispute the critics' contention that a PAC's success in furthering its "special interest" necessarily subverts the "public interest." Instead, they note that PACs represent a variety of individual interests that, when combined,
create the "public interest."
Supporters also question the extent to which
PAC contributions actually influence legislation:
The critics argue that PACs, in serving their
own "special interests," are more likely than individuals to contribute to incumbents instead of challengers. (Magleby/Nelson, p. 54) In recent years,
more than 70 percent of all PAC contributions have
gone to incumbent candidates. (See Chart 4-4.) Further, they note, if a PAC supports an incumbent
who loses, the PAC will sometimes make post-election, debt-retirement contributions to the winning
challenger to ensure the committee's continued access to the legislative process. (Magleby/Nelson, p.
54) In particularly close races, critics cite instances
of PACs contributing to both candidates. In short,
critics believe, "PACs exist for one purpose: to buy
influence with members of Congress." (Fritz/
Morris, p. 172)
"It is naive to contend that PAC money
never influences decisions, but it is unjustifiably cynical to believe that PACs always, or even usually, push the voting
buttons in Congress." (Sabato, p. 15)
Rather, they argue, PACs influence only those
narrow issues of little significance to other influence seekers (constituents, parties, etc.). In fact, research has shown that constituency concerns, party
loyalty and the personal beliefs of officeholders affect Congressional voting much more than PAC
contributions do. (Sorauf, pp. 163-174)
PAC defenders also dispute the critics' studies
linking large PAC contributions to legislative actions. They say that the studies often "establish
correlation, not cause," and that they tend to focus
only on PACs' "success" in legislative battles, ignoring the fact that other PACs were on the "los-
'To qualify as a multicanclidau; commiuee. a PAC musl receive
contributions from more than S contributors, be registered with the
O
FEC at least six months and contribute to at least five federal
candidates. 11 CFR 100.5(e)(3).
32
�CHART 4-3
Number of PACs Registered with FEC
Corporate
Trade/Membership/Health
Labor
Cooperative
Nuiicormeciecl
Corporation w ' o Stock
Total Registered as of 12/31
Number Contributing to Federal Candidates
2.000
2.000
150
.0
1.500
100
.0
.000
500
500
74
76
78
80
82
84
86
90
92
94
80
82
84
86
88
90
CHART 4-4
PAC Contributions by Type of Campaign
92
94
: Incumbents
Challengers
Open Seats
% of all PAC Contributions
100
90
80
70
60
TP"
50
V
—33-
40
«;,-,<
30
•a
20
1978
1980
1982
1984
1986
33
1988
1990
1992
1994
�ing" side. (Sorauf, p. 165) Others contend that
PACs do not make contributions to influence future votes on legislation at all. Instead, they contribute to demonstrate their agreement with past
legislative actions. (Cantor, p. 3)
PAC supporters warn that a ban on PAC
money would raise constitutional questions regarding free speech and association. (Cantor, p. 5)
Supporters also fear that reducing or eliminating
PAC contributions would prove counterproductive
because it would reduce the overall amount of
money available for campaigns, making each contribution worth more to the recipient candidate.
(Sorauf, p. 200) Others believe that reduced limits
or a total ban on PAC contributions would encourage other types of spending, such as soft money
and independent expenditures, which are more
difficult to track. Similarly, if individuals replaced
their PAC donations with personal contributions to
candidates, some argue that disclosure would suffer. The occupation and employer of an individual
contributor (reported by the recipient committee)
might not convey the contributor's political motivation, whereas the political interest behind a PAC
contribution is self evident. An individual might,
for example, work for a corporation, belong to a labor union and support certain social causes. The
reported occupation and employer information
would not account for the individual's union membership or interest in social causes as possible motivations for the contribution.
Supporters also fault the critics for lumping
all PACs into the same undesirable category. Few
PACs, for example, actually contribute large
amounts of money: "PACs are like the opera; a few
heavyweights get to sing the arias and there are a
lot of spear carriers mulling around at the back of
the stage." (Zuckerman, Political Finance & Lobby
Reporter, Oct. 12, 1994) (See Chart 4-5.)
PAC Reform
In response to the critics' concerns, Congress
has considered several proposals to reduce the influence of PACs. Among them were President
Bush's recommendation to ban corporate/labor
PACs and President Clinton's proposal to reduce
PACs' contribution limit and to cap candidates' total PAC receipts. (Chart 4-6 projects the effects of
one of the proposed reforms.)
CHART 4-5
Contributions by the 50 Largest Committees - 1994
• i i $ Contributed by All PACs
H $ Contributed by 50 Largest PACs
Type of PAC/Number Contributing
Corporate
1.457
Nonconnected
493
Trade/Membership/
Hea "
Other
161
10
20
30
Millions of Dollars
34
40
�CHART 4-6
Possible Effect of $2,000 PAC Limit in 1992
-M Actual 1992 Contributions ($5,000 Linnt)
:
., 1992 Contributions Acijusleil foi $2,000 Limit
Senate Democrats
Senate Republicans
Millions
$30
Millions
$30
$25
$25
$20
$20
$15
$15
$10
$10
$5
$5
$0
$0
Corporate
Labor
Non
connected
Ttade
Other
1
5>
si
Corporate
Nonconnected
Trade
Other
Millions
$30
$25
-a
•Si
2
$20
Labor
;i '
House Republicans
House Democrats
Millions
$30
$25
a*'
JL
$15
$10
$5
$0
Corporate
Labor
Non
connected
Ttade
Corporate
Other
35
Labot
Nonconnected
Trade
Other
�CHART 4-7
Congressional Campaign Activity
In its landmark Buckley v. Valeo decision, the
Supreme Court concluded that "[t]he First Amendment denies government the power to determine
that spending to promote one's political views is
wasteful, excessive or unwise.'' As a result, the
Court declared the FECA's limits on congressional
campaign spending unconstitutional. (The Court
upheld only those spending limits that apply to
Presidential candidates who voluntarily choose to
accept public funding.)
iMillions
$ 1.0()()
'M Cungressional Campaign Activity
Adjusted for Inflation*
SO
HO
$000
In the wake of the Court's decision, congressional campaign spending has increased from
$194.8 million in 1978 to $761.6 million in 1994, an
increase of 291 percent. Adjusted for inflation,
spending increased 48 percent over the period. (See
Chart 4-7.)
MOU
i •
$200
Spending Limits
Some political observers believe that campaigns are too expensive, arguing that the high
"price of admission" to Congress excludes all but
the wealthy and those who are willing and able to
raise large sums of money. (Magleby/Nelson, p.
45) Voters are left to wonder "who... represents
their interests—the millionaires who finance their
own races or the millionaires who finance the others." (Ellen Miller, "The Influence Game," from The
Hill, Oct. 26, 1994) The solution, they believe, is
spending limits.
$0
1078
1980
1982
1984
1980
1988
1990
1992
1994
'Activity is expressed in 1994 dollars. This means the values in earlier
years have been increased to accounl for inflatiou between lhal year
and 1994
fundraising discourages qualified challengers from
running, and prevents incumbents from devoting
as much time as they should to their legislative duties. In a survey conducted by the Center for Responsive Politics, 52 percent of the senators surveyed said fundraising significantly reduced their
legislative time. Another 12 percent thought the
demands of fundraising had at least some negative
impact. (Magleby/Nelson, p. 44)
Ironically, some supporters of spending limits
contend that the Act's contribution limits—which
have not been adjusted for inflation—exacerbate
the problem by forcing candidates to spend more
time raising funds. The $1,000 per election limit on
individual contributions to candidates, established
in 1974, is worth less than half that amount today.
As a result, they say, candidates spend more time
raising money, and tend to focus their fundraising
efforts on the sources that can contribute the most.
Unfortunately, from their perspective, those
sources are special-interest PACs (discussed above)
and influential fundraisers who bundle together
many individual contributions and deliver them to
the campaign. They say these "bundlers" pose a
particular threat because they represent the very
type of "fat cat" influence-seekers that the Act
sought to eliminate. (Fritz/Morris, p. 157)
Others contend that incumbents raise and
spend more than they actually need to get reelected. They say that incumbent fundraising and
spending is "driven by the urge to build a political
empire, not by the seriousness of the opposition."
(Fritz/Morris, p. 3) They note that in 1990, for example, incumbents spent less than 40 percent of
their campaign funds to communicate with voters.
Most of their money went to create what one critic
calls a "gold-plated permanent political machine"—a well-funded campaign organization
used to discourage challengers from entering the
race. (Fritz/Morris, p. 27) Supporters of spending
limits say that, without a legislative change, the
Among backers of spending limits, many are
also concerned that the constant demand of
36
�amounts raised and spent by these incumbents will
continue to grow in direct relation to the availability of campaign contributions. (Fritz/Morris, p. 2)
CHART 4-8
Comparison of Presidential
and Congressional Spending
Those who favor spending limits in congressional campaigns recognize that such a reform
would have to comply with the restrictions of the
Buckley decision. The limits would have to be voluntary. Many advocate a system similar to that
used for Presidential elections—candidates would
agree to limit spending in exchange for public
funding. (Chart 4-8 compares Congressional and
Presidential spending.) Several legislative proposals have incorporated this approach, including the
separate bills passed by the House and Senate in
1994.
Cungiesskmal
.•ijj Presidential
Millions
$8001
$700
$600
$500
$10
-0
$300
Opposition to Spending Limits
Some, however, are concerned that spending
limits would create as many problems as they
solve. They argue, for example, that spending limits would reduce electoral competition because
challengers need to raise and spend a considerable
amount of money to offset the incumbents' inherent advantages. (Teixeira, "Beyond Spending Limits: An Alternative Approach to Campaign Reform," p. 3)
$200
$100
1
-4
$0
1978
1980
1982
1984
1986
1988
1990
1992 1994
public disclosure, without any contribution or expenditure limits.
Instead of limiting spending, some scholars
advocate "floors without ceilings"—offering public
funds to provide campaigns a financial base without limiting campaign communications by capping
spending. Under this approach, public funds
would be given to both challengers and incumbents. Even though incumbents would likely raise
much more than challengers in private funds, the
public funding base would enable the challenger to
mount a competitive campaign. Several studies
have demonstrated that challengers gain more per
dollar spent than incumbents do. In fact, where
challengers have had a sufficient financial base,
there is some evidence that increases in incumbent
spending yield diminishing returns. (Sorauf, p.
178)
Underlying these suggested solutions is a firm
belief that campaign spending is not out of control.
Some suggest that, when adjusted for inflation,
spending is relatively flat. (See Chart 4-7, p. 32.)ln
fact, these political observers maintain that campaign spending is comparatively low: "Americans
spend more on chewing gum than they do on elective politics...." (Alexander, "Election Reform and
Reality," p. 4)
There are many in this camp who argue that
the spending increases decried by the critics
largely reflect the increased importance of media in
campaigns and inflationary pressure. The high cost
of television advertising and the expense of raising
enough inflationarily-devalued contributions to
pay for it have created a costly electoral process.
(Cantor, p. 2)
Others, however, object to both spending limits and "floors without ceilings," in part because
they oppose the public funding provisions inherent
in each. They view public funding as wasteful government spending, and say that the public does not
want tax money spent to finance elections. Instead,
these observers favor a system based solely on
Finally, there are many who adhere to the
Bucicley view that a restriction on spending is a restriction on free speech. In their view, continued
37
�protection of First Amendment rights precludes
the imposition of limits on campaign spending.
Regardless of their opinion on the cost of campaigns, however, most observers agree that too
many voters cast their ballots without adequate information about the candidates running. Perhaps,
as one observer suggested, candidates raise too
much but spend too little. (Sorauf, p. 189)
38
�CONCLUSION
For two decades, the Federal Election Commission has administered and enforced the Federal
Election Campaign Act—balancing the governmental interest in ensuring the integrity of our
electoral process against the protection of the constitutional rights to free speech and association.
• Ensuring easy public access to campaign
finance data;
• Applying modern information technology
to enhance disclosure;
• Helping reporters, academicians and the
general public utilize and understand the
data; and
Achieving that balance has become an increasingly arduous task, given the complex legal issues
that have come before the agency in recent years.
Nevertheless, the Commission has made significant strides in a number of areas. During the last
several years, the agency has, for example:
• Helping candidates and committees understand and comply with the law.
Finally, in recent years, the agency has significantly improved the way it processes its work. The
innovations include:
• Promulgated regulations to curb the alleged
improper use of soft money and to improve
its disclosure;
• Prioritizing enforcement matters to ensure
that the agency devotes its limited resources
to the most significant enforcement cases;
• Sought to define the parameters of the "express advocacy " standard and its application
to the ban on corporate and union expenditures and other provisions of the Act;
• Assessing much higher civil penalties for
violations of the law as a way of deterring
future violations; and
• Worked to ensure that foreign-owned U.S.
corporations cannot become vehicles for prohibited foreign contributions or expenditures:
• Streamlining audit procedures to expedite
the conclusion of Presidential audits.
On its 20th birthday, the Federal Election
Commission has much to celebrate. Not only is the
agency fulfilling its mission, it is—in the processhelping to define the proper role of government
and the reach of constitutional protections.
• Improved disclosure by adopting more
stringent "best efforts" regulations; and
• Defined what constitutes an unlawful conversion of campaign funds to personal use.
The Commission also takes pride in its 20 year
commitment to customer service. As part of that
commitment, the agency has devoted substantial
resources to:
39
�APPENDIX 1
FEC COMMISSIONERS AND OFFICERS 1975-1995
Joan D. Aikens April 1975 - April 1995 (reappointed May 1976, December 1981, August
1983 and October 1989).
Thomas B. Curtis April 1975 - May 1976.
Thomas E. Harris April 1975 - October 1986 (reappointed May 1976 and June 1979).
Neil O. Staebler April 1975 - September 1978 (reappointed May 1976).
Vernon W. Thomson April 1975 - June 1979; January 1981 - December 1981 (reappointed
May 1976).
Robert O. Tiernan April 1975 - November 1981 (reappointed May 1976).
William L. Springer May 1976 - January 1979.
John Warren McGarry October 1978 - April 1995 (reappointed July 1983 and October 1989).
Max L. Friedersdorf March 1979 - December 1980.
Frank P. Reiche July 1979 - August 1985.
Lee Ann Elliott December 1981 - April 1999 (reappointed July 1987 and July 1994).
Danny L. McDonald December 1981 - April 1999 (reappointed July 1987 and July 1994).
Thomas J. Josefiak August 1985 - December 1991.
Scott E. Thomas October 1986 - April 1997 (reappointed November 1991).
Trevor Potter November 1991 - April 1997.
40
�Clerk of the House
W. Pat Jennings April 1975 - November 1975.
Edmund L. Henshaw, Jr. December 1975 - January 1983.
Benjamin J. Guthrie January 1983 - January 1987.
Donnald K. Anderson January 1987 - October 1993.'
Secretary of the Senate
Francis R. Valeo April 1975 - March 1977.
Joseph Stanley Kimmitt April 1977 - January 1981.
William F. Hildenbrand January 1981 - January 1985.
Jo-Anne L. Coe January 1985 - January 1987.
Walter J. Stewart January 1987 - October 1993.'
Staff Director
Orlando B. Potter May 1975 - July 1980.
B. Allen Clutter, I I I September 1980 - May 1983.
John C. Surina July 1983 - .
General Counsel
John G. Murphy, Jr. May 1975 - December 1976.
William C. Oldaker February 1977 - October 1979.
Charles N. Steele December 1979 - March 1987.
Lawrence M. Noble October 1987 -.
Inspector General
Lynne A. McFarland February 1990
' hi 1993. an appeals court ruled that the presence of nonvoting Congressionally appointed ex officio members on the
Commission violated the Constitution's separation of powers The Supreme Court dismissed the Commission 's
appeal lor lack of jurisdiction. FEC v NRA Political Victory Fund Subsequent to the appeals court decision the
Commission reconstituted itself as a six member body
41
�APPENDIX 2
FEC BUDGET AND STAFFING HISTORY
Millions
$35
:
FTE
350
:
:»!. Stnlfing
i^i Actual Funding
Funding Adjusted for Inflation *
$30
3(H)
$25
250
$20
200
I
*4
$15
150
-is
si
m
^9
$10
100
— w —
•i
«3
3
V
$5
50
"V
.4
'|
$0
76
77
78
7!)
80
81
82
83
84
85
86
•Activity is expressed in 1994 dollars. This means the values in earlier
vears have been increased to account for inflation between that year
and 1994.
'Full-time equivalent employees.
42
87
89
90
91
92
93
94
95
�APPENDIX 3
FEC ORGANIZATION CHART
Commissioners
PublicFunding
Ethics and
Special Projects
Inspector General
Staff Director
General Counsel
Deputy Staff Director
for Management
Audit
Commission
Secretary
Administration
Clearinghouse
Congressional
Affairs
Data Systems
Development
Information
Equal Employment
Opportunity
Planning and
Management
Public
Disclosure
Personnel
Labor/Management
Reports
Analysis
Press Office
Policy
regulations, advisory
opinions, legal review
ind administrative
law)
Enforcement
Litigation
43
�Clmton Presidential Records
Digital Records Marker
This is not a presidential record. This is used as an administrative
marker by the William J. Clinton Presidential Library Staff.
This marker identifies the place of a tabbed divider. Given our
digitization capabilities, we are sometimes unable to adequately
scan such dividers. The title from the original document is
indicated below.
Divider Title:
�delegates •
http://www.fec.gov/into/delegate.htm
National Convention Delegates
June 1996
This material explains FEC rules governing thefinancingof delegate selection activity with respect to a
national nominating convention.
Contents
Delegates and Delegate Committees
Funds Raised and Spent for Delegate Activity
Contribution Prohibitions and Limits
Expenditures
Affiliation
Rouse Candidates as Delegates: Use of Campaign Funds for Travel
Delegates and Delegate Committees
Definition of Delegate
The term "delegate" means an individual who is seeking selection as a delegate, or who has already been
selected as a delegate, at any level of the delegate selection process (local, state or national).
110.14(b)(1).!
Definition of Delegate Committee
A "delegate committee"2 is a group that raises or spends funds to influence the selection of one or more
delegates. A delegate committee may be a group of delegates (defined above) or a group that supports
delegates. 110.14(b)(2).
FEC Reporting by Registered Delegate Committee
A delegate committee becomes a "political committee" under federal law once it receives contributions
or makes expenditures exceeding $1,000 in a calendar year. 100.5(a) and (e)(5). At that point, the
committee must register with the FEC within 10 days and begin filing periodic FEC reports on its
receipts and disbursements. 102.1(d) and 104.1(a). All pre-registration activity must be disclosed in the
first report. 104.3(a) and (b). Note that a delegate committee that has triggered status as a federal
political committee must include the word "delegate" or "delegates" in its name. It may also include the
name of the Presidential candidate it supports. 102.14(b)(1).
FEC Reporting by Individual Delegates and Unregistered Delegate Committees
Individual delegates and delegate committees that have not qualified as political committees under
federal law are not required to register or file regular reports. But, if they make independent expenditures
exceeding $250, they must disclose the expenditures on FEC Form 5. 109.2(a). (Independent
expenditures are discussed later in this material.)
Funds Raised and Spent for Delegate Activity
Funds raised and spent for delegate selection are considered "contributions" and "expenditures" made for
the purpose of influencing a federal election^ and are therefore subject to the federal law's prohibitions
and limits.4 110.14(c)(1). For example, a delegate must use funds permissible under federal law to pay
for travel to attend the national convention and related food and lodging expenses. Advisory Opinion
1980-64. The next two sections discuss contributions and expenditures in detail.
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03/24/97 11:17:00
�delegates"
http://www.fec.gov/info/delegate.htin
Contribution Prohibitions and Limits
Please note that the prohibitions and limits apply to contributions of goods and services (in-kind
contributions) as well as monetary contributions. 100.7(a)(lXn) and (iii).
Prohibitions
Individual delegates and delegate committees may not accept any contributions from prohibited sources.
110.14(c)(2). The following entities are prohibited from making contributions:
• Banks and other corporations (including nonprofit corporations);
• Labor organizations;
D Citizens of foreign countries (except "green card" holders—those admitted to the United States for
permanent residence); and
• Federal government contractors (such as partnerships and sole proprietors with federal contracts).
110.4(a); 114.2(a) and (b); 115.2; 115.4; 115.5.
Limits on Contributions to Delegates
• Contributions to a delegate committee are subject to an aggregate limit of $5,000 per calendar
year. 110.1(d)(1) and (mX2); 110.14(gXl).
• Contributions to an individual delegate are not subject to any per delegate limit. 110.1(m)(l);
110.14(d)(1). Note that contributions to a delegate from the committee of a Presidential candidate
receiving public funds count against the candidate's expenditure limits.5 110.14(d)(2).
• Contributions from an individual to a delegate or delegate committee count against the donor's
$25,000 annual limit on total contributions. 110.5(e); 110.14(d)(1) and (g)(2).
Limits on Contributions Made by Delegates to Candidates
When a delegate or delegate committee makes an expenditure that benefits a Presidential or other federal
candidate,6 the expenditure may result in an in-kind contribution to that candidate (as explained under
"Dual-Purpose Expenditures for Communications,"; below). Such contributions—or anything of value
given to the candidate-count against the contribution limits. 100.7(a)(1).
A delegate or delegate committee may contribute a maximum of $ 1,000 to a federal candidate, per
election. 110.1(b)(1). The primary and general are considered separate elections but, in the case of
Presidential candidates, the entire primary season is considered only one election. 110.1 (])(!).
Note that a contribution to a candidate must be reported by the candidate's committee. For this reason,
when making an in-kind contribution, a delegate or delegate committee should notify the candidate's
committee of the monetary value. Note also that in-kind contributions generally count against a publicly
funded Presidential candidate's expenditure limits.
Expenditures
Expenditures for Delegate Selection Only
Expenditures made by delegates and delegate committees solely to further their selection are not
considered contributions to any candidate and are not chargeable to a publicly funded candidate's
spending limits. This type of expenditure might include, for example:
a A communication which advocates the selection of delegates only;
• Travel and subsistence expenses related to the delegate selection process and the national
nominating convention. 110.14(e)(1) and (h)(1).
Dual-Purpose Expenditures for Communications
2 of 6
03/24/97 11:17:01
�delegates •
http://www.fec.gov/info/deIegate.htin
An individual delegate or a delegate committee may pay for communications that both:
• Advocate the selection of an individual delegate or the delegates promoted by the delegate
committee; and
• Refer to, provide information on, or expressly advocate the election or defeat of a Presidential
candidate (or candidate for any public office). 110.14(f) and (i).
As explained in more detail below, a portion of a dual-purpose expenditure may have to be allocated as
an in-kind contribution or an independent expenditure on behalf of any federal candidate mentioned in
the ad. Moreover, the communication may have to include a disclaimer notice (also explained below).
Materials Distributed by Volunteers
Dual-purpose expenditures for campaign materials such as pins, bumper stickers, handbills, brochures,
posters and yard signs are not considered in-kind contributions on behalf of the federal candidate
mentioned in the materials as long as the materials are used in connection with volunteer activities (i.e.,
are distributed by volunteers) and are not conveyed through public political advertising.? 110.14(f)(1)
and (i)(l).
Public Ads: In-Kind Contributions
A portion of a dual-purpose expenditure is considered an in-kind contribution to the referenced
candidate if the communication:
• Is conveyed through public political advertising (or is not distributed by volunteers); and
• Is made in cooperation or consultation with, or at the request or suggestion of, the Presidential
candidate (or other federal candidate) or the candidate's campaign.
The contribution counts against a publicly funded Presidential candidate's expenditure limits.
110.14(f)(2)(i)and (i)(2)(i).
Public Ads: Independent Expenditures
A portion of a dual-purpose expenditure for a communication that is conveyed through public political
advertising is considered an independent expenditure (rather than an in-kind contribution) on behalf of
the candidate if the communication:
• Expressly advocates the election (or defeat) of a clearly identified candidate; and
• Is not made with the cooperation or prior
• consent of, or in consultation wit or at the request or suggestion of, the candidate or the candidate's
campaign. 110.14(f)(2)(ii) and (i)(2)(ii).
Independent expenditures are not subject to the contribution limits and are not chargeable to a publicly
funded Presidential candidate's expenditure limits. 110.14(f)(2)(ii) and (i)(2)(ii). Note that independent
expenditures must carry a disclaimer notice (see below). Note also the reporting requirements for
individual delegates and unregistered delegate committees at the beginning of this article. For more
information on independent expenditures, consult 11 CFR Part 109.
Allocation of Dual-Purpose Expenditures
The amount of a dual-purpose expenditure allocated as an in-kind contribution or independent
expenditure on behalf of a candidate must be in proportion to the benefit the candidate receives, based
on factors such as the amount of space or time devoted to the candidate compared with total space or
time. 106.1(a)(1).
Expenditures to Reproduce Candidate Materials
3 of 6
03/24/97 11:17:01
�delegates-
http://www.fec.gov/into/delegate.htm
Expenditures by a delegate or delegate committee to reproduce (in whole or in part) or to disseminate
materials prepared by a Presidential candidate's committee (or other federal candidate's committee) are
considered in-kind contributions to the candidate. Although subject to contribution limits, this type of
contribution is not chargeable to a publicly funded Presidential candidate's spending limits as long as the
expenditure was not made in consultation or coordination with, or at the request or suggestion of, the
candidate or the candidate's campaign. 110.14(f)(3) and (i)(3). If the materials are conveyed through
public political advertising, they may have to include a disclaimer notice.
Disclaimer Notices
A communication must clearly and conspicuously display a disclaimer notice if it:
• Expressly advocates the election or defeat of a clearly identified federal candidate or solicits
contributions; and
• Is conveyed through public political advertising.8 110.11(a)(1).
Authorized by Candidate
If the communication is authorized by the candidate's campaign, it must display the following notice:
"Paid for by [name of delegate or delegate committee] and authorized by [name of candidate's
committee]." 110.1 l(a)(l)(ii).
Not Authorized by Candidate
If the communication is not authorized by the candidate's campaign (as in the case of independent
expenditures), it must display the following notice: "Paid for by [name of delegate or delegate
committee] and not authorized by any candidate or candidate's committee." 110.1 l(a)(l)(iii).
Affiliation
Delegate committees—including unregistered committees—need to determine whether thay are affiliated
with another delegate committee or a candidate's committee because affiliated committees are
considered one political committee for purposes of the contribution limits—they share the same limits on
contributions re ceived and made. 110.3(a)(1). (There is, however, no limit on funds transferred between
affiliated committees. 102.6(a)(l)(i).)
Between Delegate and Presidential Committees
Factors Indicating Affiliation
In determining whether a delegate committee and a Presidential committee are affiliated, the
Commission may consider, among other factors, whether:
• The Presidential campaign9 played a significant role in forming the delegate committee.
D Any delegate associated with a delegate committee has been or is on the staff of the Presidential
committee.
• The committees have overlapping officers or employees.
• The Presidential committee provides funds or goods to the delegate committee in a significant
amount or on an ongoing basis (not including a transfer of joint fundraising proceeds).
• The Presidential campaign suggests or arranges for contributions to be made to the delegate
committee.
• The committees show similar patterns of contributions received.
• One committee provides a mailing list to the other committee.
• The Presidential campaign provides on going administrative support to the delegate committee.
• The Presidential campaign directs or organizes the campaign activities of the delegate committee.
• The Presidential campaign files statements or reports on behalf of the delegate committee.
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�delegates-
http://www.fec.gov/info/delegate.htm
110.14(j). See also, for example, Advisory Opinion 1988-1.
Effect on Expenditure Limits
Ifa delegate committee is affiliated with the committee of a Presidential candidate receiving public
funds, all of the delegate committee's expenditures count against the Presidential candidate's expenditure
limits.
Between Delegate Committees
Delegate committees established,financed,maintained or controlled by the same person or group are
affiliated. Factors that indicate affiliation between delegate committees are found at 100.5(g)(2) of FEC
regulations. 110.14((k).
House Candidates as Delegates: Use of Campaign Funds for
Travel
While campaign hands may not be used to pay for anyone's personal expenses (i.e., expenses that would
exist irrespective of the candidate's campaign or his/her duties as a federal officeholder), candidates who
attend the convention as delegates may use campaign funds to pay for their own convention-related
travel, food and lodging expenses. 110.14(c) and (e). The Commission recently issued advisory opinions
clarifying that such candidates may also use campaign funds to pay the travel and subsistence expenses
of other individuals (e.g., spouse, child. Congressional staff person) in connection with the convention if
the individual will be engaging in significant campaign-related or officeholder-related activity on the
candidate's behalf during the convention. 113.1(g) and 113.2(d); Advisory Opinions 1996-20, 1996-19
and 1995-47. (These opnions are available through Flashfax.)
Although the use of campaign funds to pay someone's personal expenses is a violation of the personal
use prohibition, when travel involves both personal activities and campaign (or officeholder) activities,
campaign funds may be used to pay the personal portion of travel and subsistence costs if the individual
reimburses the campaign within 30 days. 113.1(g)(l)(iiXC).
1. Citations in this appendix are to FEC regulations, found at title 11 of the Code of Federal Regulations
(11 CFR). To order a free copy, call 800/424-9530 and press 1.
2. In this material,the term "committee" refers to unregistered organizations as well as "political
committees" registered with the FEC.
3. A national nominating convention is considered a federal election. 100.2(e).
4. Ballot access fees paid by a individual delegate to a political party are not considered contributions or
expenditures; nor are administrative payments made by a party committee (including an unregistered
organization) for sponsoring a convention or caucus to select delegates. Nevertheless, the funds used to
pay these expenses are subject to the law's prohibitions and limits. 110.14(c)(l)(i) and (ii).
5. Presidential primary candidates receiving public funding must comply with an overall spending limit
and a spending limit in each state. 9035.1.
6. A federal candidate is a candidate seeking election to the Presidency, the Vice Presidency, the U.S.
Senate or the U.S. House of Representatives. 100.4.
7. For purposes of the delegate selection regulations, public political advertising means political
advertising conveyed through broadcasting, newspapers, magazines, billboards, direct mail or similar
types of general public communication. 110.14(f)(2) and (i)(2). Direct mail means mailings by
commercial vendors or mailings made from lists not developed by the individual delegate or delegate
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http://www.fec.gov/info/delegate.htm
committee. 110.14(f)(4) and (i)(4).
8. For purposes of the disclaimer regulations, the definition of public political advertising is generally
the same as the definition in footnote 7, with two exceptions: (1) posters and yard signs are considered
public political advertising; and (2) direct mail means a mailing of over 100 substantially similar pieces
of mail. 110.11(a)(1) and (3).
9. Campaign refers to the candidate, his or her authorized committee and other persons associated with
the committee.
Flashfax documents may be ordered 24 hours a day, 7 days a week by calling 202/501-3413 on a touch
tone phone. You will be asked for the numbers of the documents you want, your fax number and your
telephone number. The documents will be faxed shortly thereafter. The Flashfax document numbers for
the cited advisory opinions are: AO 1996-20 - 620; AO 1996-19 -619; AO 1995-47 - 747.
6 of 6
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�FEDERAL ELECTION COMMISSION
http://www.fec.gov/pages/citnOOO 1 .htm
Supporting Federal Candidates: A Guide For Citizens
Supporting Federal Candidates: A Guide For
Citizens
The purpose of this internet publication is to encourage citizens to take an active part in the
Federal election process. There are several ways you may support Federal candidates and political
committees involved in Federal elections. These activities, however, are subject to the Federal campaign
finance law. For example, the law limits the amount of money you may contribute and prohibits
contributions from certain sources. This intenet publication explains how to participate in Federal
elections in compliance with the law.
It is important to note that this intenet publication focuses on political activity in Federal elections
- not State or local. Federal elections are those for the President and Vice President, the U.S. Senate and
the U.S. House of Representatives.
• How Much May Be Contributed
• Prohibited Contributions
• What Counts as a Contribution
Volunteering
Travel Expenses
•
Business Services
•
Independent Expenditures
•
Acting as a Group
•
Campaign Finance Information
•
Filing a Complaint
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03/24/97 11:18:40
�FEDERAL ELECTION COMMISSION
http ://w ww. fee. go v/pages/c itn0002. htm
Supporting Federal Candidates: A Guide For Citizens
How Much May Be Contributed
Your contributions to Federal candidates and committees are limited under the law. You, the
contributor, and the committee you are giving to are both legally responsible for making sure that your
contribution does not exceed your contribution limits.
•
•
•
•
•
•
Contribution Limits
$25,000 Annual Limit
Presidential Campaigns
Designated Contributions
Joint Contributions
Contributions by Family Members
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03/24/97 11:22:53
�FEDERAL ELECTION COMMISSION
http://www.fec.gov/pages/citn0021 .htm
Supporting Federal Candidates: A Guide For Citizens
Contribution Limits
An individual may give a maximum of:
• $1,000 per election to a Federal candidate or the candidate's campaign committee. Notice that
the limit applies separately to each election. Primaries, runoffs and general elections are
considered separate elections.
• $5,000 per calendar year to a PAC or State party committee. This limit applies to a PAC
(political action committee) or a State (or local) party committee that supports Federal candidates.
(PACs are neither party committees nor candidate committees. Some PACs are sponsored by
corporations and unions & trade, industry and labor PACs. Other PACs, often ideological, do not
have a corporate or labor sponsor and are therefore called nonconnected PACs.) Party committees
and PACs use your contributions to make their own contributions to Federal candidates to fund
other election-related activities.
n $20,000 per calendar year to a national party committee. This limit applies separately to a
party's national committee, House campaign committee and Senate campaign committee.
• $25,000 total per calendar year. This annual limit places a ceiling on your total contributions
• $100 in currency (cash) to any political committee. (Anonymous cash contributions may not
exceed $50.) Contributions exceeding $100 must be made by check, money order or other written
instrument.
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03/24/97 11:23:18
�FEDERAL ELECTION COMMISSION
http://www.tec.gov/pages/citn0023.htm
Supporting Federal Candidates: A Guide For Citizens
$25,000 Annual Limit
You have an annual limit of $25,000 on your total contributions to Federal candidates and Federal
political committees. Your contribution to a candidate counts against your annual limit for the year in
which the candidate seeks election, regardless of when you make the contribution. For example, if you
contribute to a candidate the year before the election, the contribution counts against the annual limit for
the election year. Similarly, if you make a contribution to a candidate the year after the election to help
retire campaign debts, the contribution counts against your annual limit for the previous year. (See also
Designated Contributions)
On the other hand, your contribution to a Federal party committee or PAC counts against your
annual limit for the year in which the contribution is made, as long as the contribution is not earmarked
for a specific candidate.
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03/24/97 11:23:39
�FEDERAL ELECTION COMMISSION
http://www.fec.gov/pages/citn0026.htm
Supporting Federal Candidates: A Guide For Citizens
Presidential Campaigns - Campaign Limits
The contribution limits work a little differently for Presidential campaigns. In the case of a
Presidential candidate running in various State primaries, you may contribute up to $1,000 for the entire
primary campaign period - not $1,000 for each State primary in which the candidate runs.
Your contributions may be supplemented with Federal (U.S. Treasury) funds. I f a Presidential
primary candidate has qualified for the Federal matching fund program, up to $250 of your total
contributions to that candidate may be matched with Federal funds. Contributions must be in the form of
a check or other written instrument. (Note that some contributions are not matchable, such as currency,
loans, goods and services, and any type of contribution from a political committee.)
In the general election, however, you may not make any contributions to the campaigns of
Democratic or Republican nominees who receive Federal flinds. (Federal funding in the general election
takes the form of direct government grants rather than matching payments.) You may nevertheless
designate a contribution of up to $1,000 to the candidate's compliance fund, a special account used to
pay for certain legal and accounting expenses. You may also contribute up to $1,000 to the general
election campaign of any Presidential candidate who is not a Federally funded Democratic or
Republican nominee.
Federal funds used in Presidential elections come from the dollars voluntarily checked off by
taxpayers on their Federal income tax returns. (The checkoff does not affect the total amount of taxes
paid or any refund due.)
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03/24/97 11:24:16
�FEDERAL ELECTION COMMISSION
http://www.tec.gov/pages/citn0024.htm
Supporting Federal Candidates: A Guide For Citizens
Designated Contributions
The Commission encourages you, when making a contribution to a candidate, to specify which
election the contribution is for. By designating the contribution in this way, there will be no confusion as
to which election limit applies to your contribution. To designate a contribution, you write the name of
the specific election on your check (or other written instrument). Or you may attach a signed statement
with the same information.
If you do not designate a contribution to a candidate, your contribution automatically applies to
your $1,000 limit for the candidate's next election. In other words, if you make an undesignated
contribution after the candidate has won the primary but before the general election, your contribution
counts against your $1,000 limit for the general. Similarly, if you make an undesignated contribution
after the general election, it automatically applies toward the limit for the next election in which the
candidate runs for Federal office.
If, however, you want a contribution to count against your limit for an election other than the
candidate's upcoming election, you must designate the contribution. For example, suppose you want
your contribution to count against the candidate's general election, even though the primary has not yet
taken place. In this case, you must designate the contribution for the general. Or, if you want to help a
candidate retire campaign debts for a past election, you must designate your contribution for that specific
election.
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ofl
03/24/97 11:26:45
�FEDERAL ELECTION COMMISSION
http://www.tec.gov/pages/citn0027.htm
Supporting Federal Candidates: A Guide For Citizens
Joint Contributions
If two or more individuals want to make a contribution using one check drawn on a joint account,
all the contributors must sign the check or an attached statement. The check or signed statement may
show how much should be attributed to each donor; otherwise, the contribution is equally divided
among the contributors.
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Federal Candidates - A Guide For Citizens
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03/24/97 11:26:13
�FEDERAL ELECTION COMMISSION
http://www.tec.gov/pages/citn0028.htm
Supporting Federal Candidates: A Guide For Citizens
Contributions from Family Members
A husband and wife each have separate contribution limits, even if only one spouse has an
income. For example, a couple may contribute a $2,000 check to a candidate's primary campaign as long
as both sign the check (or an attached statement - See Joint Contributions ).
Children under 18 may make contributions, subject to the limits, as long as the child knowingly
and voluntarily decides to contribute. The child must own or control the funds, such as the proceeds of a
trust or money held in a savings account under the child's name. Children may not use money that is
provided by their parents specifically for the purpose of making a contribution. This would be a
contribution in the name of another, which is prohibited .
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03/24/97 11:26:23
�FEDERAL ELECTION COMMISSION
http://www.fec.gov/pages/citn0003.htm
Supporting Federal Candidates: A Guide For Citizens
Prohibited Contributions
While most individuals are free to make political contributions, two categories of individuals are
prohibited by law from making contributions: foreign nationals and individuals under contract to the
Federal government. These and other prohibitions on contributions are explained below.
•
•
•
•
•
Foreign Nationals
Federal Government Contractors
Corporations and Unions
Contributions in the Name of Another
Excessive Contributions
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1 ofl
03/24/97 11:28:48
�FEDERAL ELECTION COMMISSION
http://www.fec.gov/pages/citn0029.htm
Supporting Federal Candidates: A Guide For Citizens
Prohibited Contributions - Foreign Nationals
Foreign nationals may not make contributions in connection with any election - Federal, State or
local. This prohibition does not apply to foreign citizens who are lawfully admitted for permanent
residence in the United States (those who have "green cards").
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1 ofl
03/24/97 11:31:34
�FEDERAL ELECTION COMMISSION
http://www.fec.gov/pages/citn0030.htm
Supporting Federal Candidates: A Guide For Citizens
Prohibited Contributions - Federal Government Contractors
Individuals under contract to the Federal government may not make contributions to influence
Federal elections. For example, if you are under contract as a consultant to a Federal agency, you may
not contribute to Federal candidates or political committees. Or, if you are the sole proprietor of a
business that has a contract with the Federal government, you may not make contributions from either
your personal funds or your business account. But, if you are merely employed by a company (or
partnership) with Federal government contracts, you are permitted to make contributions from your
personal funds.
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1 ofl
03/24/97 11:32:14
�FEDERAL ELECTION COMMISSION
http://www.fec.gov/pages/citn0031 .htm
Supporting Federal Candidates: A Guide For Citizens
Prohibited Contributions - Corporations and Unions
The law also prohibits contributions from corporations and labor unions. This prohibition applies
to any incorporated organization, profit or nonprofit. For example, the owner of an incorporated "mom
and pop" grocery store is not permitted to use a business account to make contributions. Instead, the
owner would have to use a personal account. A corporate employee may make contributions through a
nonrepayable corporate drawing account, which allows the individual to draw personal funds against
salary, profits or other compensation.
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1 ofl
03/24/97 11:32:29
�FEDERAL ELECTION COMMISSION
http://www.fec.gov/pages/citn0032.htm
Supporting Federal Candidates: A Guide For Citizens
Prohibited Contributions - Contributions in the Name of Another
Contributions made in the name of another are also prohibited. An individual who has already
contributed up to the limit for a candidate's election may not give money to another person to make a
contribution to the same candidate. Similarly, a corporation is prohibited from using bonuses or other
methods of reimbursing employees for their contributions. Remember, parents may not make a
contribution in the name of a child.
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1 ofl
03/24/97 11:32:54
�FEDERAL ELECTION COMMISSION
http ://www. fee. go v/pages/c itn0033. htm
Supporting Federal Candidates: A Guide For Citizens
Prohibited Contributions - Excessive Contributions
Contributions that exceed the law's limits are prohibited.
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1 ofl
03/24/97 11:33:15
�FEDERAL ELECTION COMMISSION
http://www.fec.gov/pages/citn0004.htm
Supporting Federal Candidates: A Guide For Citizens
What Counts as a Contribution
Most people think of contributions as donations of checks or currency. While these are common
ways of making a contribution, anything of value given to influence a Federal election is considered a
contribution. This section describes several forms of giving that are considered contributions under the
Federal campaign law. All the contributions you make - whatever their form - count against your annual
$25,000 limit and your separate committee limits.
•
•
•
•
Donated Items as Services
Fundraising Tickets and Items
Loans and Loan Endorsements
Support Given to "Test the Waters"
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03/24/97 11:33:28
�FEDERAL ELECTION COMMISSION
http://www.fec.gov/pages/citn0034.htm
Supporting Federal Candidates: A Guide For Citizens
Donated Items as Services
The donation of office machines, furniture, supplies - anything of value - is an in-kind
contribution. The value of the donated item (the usual and normal charge) counts against the
contribution limits. A donation of paid services is also considered an in-kind contribution. For example,
if you pay a consultant's fee or a printing bill for services provided to a campaign, you have made an
in-kind contribution in the amount of the payment.
If you sell an item or service and ask the committee to pay less than the usual and normal charge,
you have also made an in-kind contribution to the committee in the amount of the discount.
Under limited exceptions in the law, you may provide certain goods and services without making
a contribution to the committee. These exceptions are discussed under Volunteering, Travel Expenses
and Business Services.
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03/24/97 11:34:11
�FEDERAL ELECTION COMMISSION
http://www.fec.gov/pages/citn0035.htm
Supporting Federal Candidates: A Guide For Citizens
Fundraising Tickets and Items
Yet another way of making a contribution is to purchase a fundraising item or a ticket to a
fundraiser. The full purchase price counts as a contribution. If you pay $100 for a ticket to a fundraising
event like a dinner, you have made a $100 contribution (even though your meal may have cost the
committee $30). Or, if you pay $15 for a T-shirt sold by a campaign, your contribution amounts to $15
(even though the T-shirt may have cost the committee $5).
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03/24/97 11:34:29
�FEDERAL ELECTION COMMISSION
http://www.tec.gov/pages/citn0036.htm
Supporting Federal Candidates: A Guide For Citizens
Loans and Loan Endorsements
If you loan money to a candidate or political committee, you have made a contribution, even if
you charge interest on the loan. The outstanding amount of the loan counts against the contribution
limits. Loan repayments, therefore, decrease the amount of your contribution. Nevertheless, if your loan
exceeds the limits, it is an illegal contribution, even if it is later repaid in full.
Endorsements and guarantees of bank loans are also considered contributions. Endorsers and
guarantors are liable for equal portions of a loan unless the agreement states otherwise. You alone,
therefore, may not endorse a $5,000 loan to a candidate committee. There must be four other individual
endorsers so that each one is liable only for $1,000, the per-election limit. Repayments made on a loan
reduce the amount of your liability and thus reduce the amount of your contribution.
Federal Candidates - A Guide For Citizens
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ofl
03/24/97 11:37:35
�FEDERAL ELECTION COMMISSION
http://www.fec.gov/pages/citn0037.htm
Supporting Federal Candidates: A Guide For Citizens
Support Given to "Test the Waters"
You may wish to support a prospective candidate who is "testing the waters" - exploring the
feasibility of becoming a candidate. Your total donations are limited to $1,000, just as if they were given
to an actual candidate. If the individual who is testing the waters later becomes a candidate, the
candidate's committee will report your donations as contributions.
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03/24/97 11:37:17
�FEDERAL ELECTION COMMISSION
http://www.tec.gov/pages/citn0005.htm
Supporting Federal Candidates: A Guide For Citizens
r
Volunteering
• Personal Services
• Home Events
n Corporate/Union Facilities
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03/24/97 11:37:48
�FEDERAL ELECTION COMMISSION
http://www.f'ec.gov/pages/citn0041 .htm
Supporting Federal Candidates: A Guide For Citizens
Personal Services
An individual may help candidates and committees by volunteering personal services. For
example, you may want to take part in a voter drive or offer your skills to a political committee. Your
services are not considered contributions as long as you are not paid by anyone. (If your services are
compensated by someone other than the committee itself, the payment is considered a contribution by
that person to the committee.)
As a volunteer, you may spend unlimited money for normal living expenses.
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03/24/97 11:38:05
�FEDERAL ELECTION COMMISSION
http ://www. tec .go v/pages/c itn0042. htm
Supporting Federal Candidates: A Guide For Citizens
Home Events
In volunteering your services, you may use your home for activities benefiting a candidate or
political party without making a contribution. If you live in an apartment complex, you may use the
recreation room; any small fee you pay is not considered a contribution. You may also use a church or
community room, if the room is regularly made available for noncommercial purposes, without regard to
political affiliation. Any nominal rental fee you pay is not considered a contribution.
You might want to hold a fundraising party or reception in your home, or in a church or
community room. Your costs for invitations and for food and beverages served at the event are not
considered contributions if they remain under certain limits. These expenses on behalf of a candidate are
limited to $ 1,000 per election; expenses on behalf of a political party are limited to $2,000 per year. (A
husband and wife may each spend up to the limit. Their combined limits would be: $2,000 per
candidate, per election, and $4,000 per year for a political party.) Any amount spent in excess of the
limits is a contribution to the candidate or party committee-
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03/24/97 11:38:31
�FEDERAL ELECTION COMMISSION
http://www.fec.gov/pages/citn0045.htm
Supporting Federal Candidates: A Guide For Citizens
Corporate/Union Facilities
If you are an employee, stockholder or member of a corporation or labor union, you may use the
organization's facilities - for example, the phone - in connection with your volunteer activities, subject to
the rules and practices of the organization. The activity, however, cannot prevent an employee from
completing normal work; nor can it interfere with the organization's normal activity.
If your activity exceeds "incidental use" of the facilities - one hour a week or four hours a month you must reimburse the corporation or union the usual and normal rental charge within a commercially
reasonable time. If you use the organization's equipment to produce campaign materials for a candidate,
you must reimburse the organization regardless of how much time you spend. Any reimbursement you
make to a corporation or union for the use of its facilities is considered a contribution from you to the
political committee that you are helping.
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03/24/97 11:38:41
�FEDERAL ELECTION COMMISSION
http://www.fec.gov/pages/citn0006.htm
Supporting Federal Candidates: A Guide For Citizens
Travel Expenses
You may spend up to $1,000 per election for your own travel on behalf of a candidate, and $2,000
per year for party-related travel, without making a contribution. (If you are reimbursed for your travel
expenses by someone other than the committee, the payment is considered a contribution from that
person to the committee.)
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03/24/97 11:38:56
�FEDERAL ELECTION COMMISSION
http://www.tec.gov/pages/citn0007.htm
Supporting Federal Candidates: A Guide For Citizens
Business Services
n Discounts on Food and Drink
• Legal and Accounting Services
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03/24/97 11:39:23
�FEDERAL ELECTION COMMISSION
http://www.fec.gov/pages/citn0046.htm
Supporting Federal Candidates: A Guide For Citizens
Discounts on Food and Drink
If you are in the business of selling food and beverages, your business may offer a discount to
candidates and party committees without making a contribution, even if your business is incorporated.
The discount price must at least equal the cost of the items. The value of the discount - the difference
between the normal charge and the amount paid by the committee - must, however, remain within
certain limits. The limit for a discount to a candidate is $1,000 per election; the limit for a political party
is $2,000 per year. Once the limits are exceeded, the excess amount is a contribution. An incorporated
business may not exceed the limits since contributions from corporations are prohibited.
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03/24/97 11:39:40
�FEDERAL ELECTION COMMISSION
http://www.fec.gov/pages/citn0047.htm
Supporting Federal Candidates: A Guide For Citizens
Legal and Accounting Services
Businesses, including corporations, may support candidates in yet another way. If the business
employs individuals who perform legal or accounting services, the business may provide unlimited free
services to a political committee as long as certain qualifications are met:
•
•
•
•
First, the firm may provide services to a candidate committee or PAC only for the purpose of
helping the committee comply with the Federal campaignfinancelaw.
Second, services on behalf of a party committee may be provided for any purpose that does not
directly further the election of a Federal candidate.
Third, the firm must use its own regular employees (not outside consultants) to perform the
service. The business may not hire additional personnel to free regular employees to provide the
service.
Fourth, the recipient committee must report the value of the service (the amount paid by the
employer).
Of course, an individual may personally volunteer legal or accounting services (uncompensated)
to a committee; the above restrictions would not apply.
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03/24/97 11:39:56
�FEDERAL ELECTION COMMISSION
http://www.fec.gov/pages/citn0008.htm
Supporting Federal Candidates: A Guide For Citizens
Independent Expenditures
Independent expenditures provide yet another way to support Federal candidates. An independent
expenditure is money spent for a communication that expressly advocates the election or defeat of a
candidate. It is "independent" only if the individual making the expenditure does not coordinate or
consult in any way with the candidate campaign benefiting from the communication. Independent
expenditures are not considered contributions and are unlimited. You may spend any amount on each
communication as long as the expenditure is truly independent.
You may, for example, pay for an advertisement in a newspaper or on the radio urging the public
to vote for the candidate you want elected. Or you may produce and distribute posters or yard signs
telling people not to vote for a candidate you oppose.
When making an independent expenditure, you must include a notice stating that you have paid
for the communication and that it is not authorized by any candidate's committee. ("Paid for by John
Doe and not authorized by any candidate's committee.") Additionally, once you spend more than $250
on independent expenditures during a year, you must file a report with the Federal Election Commission,
either FEC Form 5 or a signed statement containing the same information.
Because this brief explanation does not cover all you need to know before making an independent
expenditure, you should first call, e-mail or write the Commission for more information.
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03/24/97 11:41:14
�FEDERAL ELECTION COMMISSION
http://www.t'ec.gov/pages/citn0009.htm
Supporting Federal Candidates: A Guide For Citizens
Acting as a Group
If you and other individuals act together as a group to conduct Federal election activity, the group
may become a "political committee." Under the Federal campaign finance law, a group that raises or
spends over $1,000 per year to influence Federal elections must register, keep records on financial
transactions and file reports on the committee's activities.
If you are interested in forming a group to participate in Federal elections and anticipate raising or
spending more that $1,000 during a calendar year, you should e-mail, write or phone the Commission
and request materials to register the group as a political committee.
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jppc
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�FEDERAL ELECTION COMMISSION
http://www.fec.gov/pages/citnOO I O.htm
Supporting Federal Candidates: A Guide For Citizens
Campaign Finance Information
The Federal campaign finance law requires most participants in the election process to submit
reports on their financial activity. These reports are then put on the public record. Generally, an
individual is not required to report. Political committees, however, must file detailed reports on the
money they raise and spend. You, as a contributor, will be asked to provide information to the recipient
committee for its reports.
• Contributor Information
• Information Available to the Public
Back to Supporting Federal Candidates - A Guide For Citizens
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�FEDERAL ELECTION COMMISSION
http://www.fec.gov/pages/citn0048.htm
Supporting Federal Candidates: A Guide For Citizens
Contributor Information
If you contribute more than $200, the recipient committee is required to publicly disclose on a
financial report your name, address, occupation and employer, as well as the date and amount of your
contribution. Committees request this information even for smaller contributions since the $200
reporting threshold applies to the aggregate total of a donor's contributions to one committee during a
calendar year. For example, you may make several small contributions to a committee during a year.
Once these contributions add up to over $200, the committee must report the contributor information.
Note that if you collect and forward contributions to a committee, you must transmit them within a
specified period of time and must also provide the committee with certain information on the
contributors. Additionally, you may have reporting obligations.
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�FEDERAL ELECTION COMMISSION
http://www.fec.gov/pages/citn0049.htm
Supporting Federal Candidates: A Guide For Citizens
Information Available to the Public
As a voter, you may be interested in learning how a particular candidate finances his or her
campaign. Who is contributing? How much? Is the candidate using personal funds to finance the
campaign? Does the committee have debts? Or you may want to know which candidates a party
committee or PAC is supporting, and how much the committee is giving.
This information is available to the public in the campaign finance reports regularly filed by all
political committees supporting Federal candidates. The Commission's Public Records Office keeps all
reports on file and will send you copies of specific reports, upon request. You can also order computer
printouts focused on the information you want. Call the toll-free number, 800-424-9530, or
202-219-4140.
The campaign records office in your State also keeps copies of reports filed by political
committees active within the State. (Call the Commission for the address and telephone number of your
State office.)
It is also possible to access the Commission's data base directly from a computer at home or in
your office. To find out how to do this, call the Commission at either 800-424-9530 or 202-219-3730.
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�FEDERAL ELECTION COMMISSION
http://www.fec.gov/pages/citnOOI 1 .htm
Supporting Federal Candidates: A Guide For Citizens
Filing a Complaint
If you believe a violation of the Federal campaign finance law has taken place, you may file a
complaint with the Federal Election Commission. Send the Commission a letter explaining why you (the
complainant) believe the law may have been violated, describe the specific facts and circumstances and
name the individuals or organizations responsible (the respondents). Your complaint should also indicate
which allegations are based on personal knowledge rather than on outside sources (for example,
newspaper articles). The letter must be sworn to, signed and notarized. Complaints of alleged violations
receive case numbers and are called MURs, Matters Under Review. (For more information on how to
file a complaint, call the FEC.)
The Commission sends a copy of the complaint to the respondents, who have the opportunity to
explain why the Commission should not pursue the complaint (for example, because no violation
occurred or because there were mitigating factors). The agency considers the views of both sides and
may conduct an investigation to gather facts. Until the MUR is resolved, the Commission must keep all
phases of the proceedings confidential, as required by law. After it makes a decision, the agency notifies
the complainant and the respondents. The file on the MUR is then made public.
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�Th,e FEC and the Federal Campaign Finance Law
http://www.t'ec.gov/pages/fecfeca.htm
The FEC and the Federal Campaign Finance
Law
Published in August 1996
Contents
• Introduction
• Historical Background
D The Commission
• Commissioners
• Public Meetings
• The Campaign Finance Law
• Disclosure
n Contribution Limits
• Prohibited Contributions and Expenditures
• Independent Expenditures
• Corporate and Union Activity
• Political Party Activity
n The Presidential Election Campaign Fund Act
• The FEC's Role
• Administering the Public Funding Program
• Facilitating Disclosure
• Clarifying the Law
Outreach
• Enforcing the Law
• How to Get More Information
• Free Publications
• Office of Election Administration
• Election Law Library
• Help from Other Agencies (Links to Other Web Sites)
Introduction
The Federal Election Commission (FEC) is the independent regulatory agency charged with
administering and enforcing the federal campaignfinancelaw. The FEC has jurisdiction over the
financing of campaigns for the U.S. House, the U.S. Senate, the Presidency and the Vice Presidency.
Federal campaign finance law covers three broad subjects, which are described in this brochure:
• Public disclosure of funds raised and spent to influence federal elections;
• Restrictions on contributions and expenditures made to influence federal elections; and
• The public financing of Presidential campaigns.
This brochure provides general information only. The descriptions of the law and the Commission are
not intended to be exhaustive.
For more information on the subjects discussed in this brochure, call, write or visit:
Federal Election Commission
999 E Street, N.W.
Washington, D.C. 20463
800/424-9530
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202/219-3420 (local)
202/219-3336 (for the hearing impaired)
Historical Background
As eady as 1905, President Theodore Roosevelt recognized the need for campaignfinancereform and
called for legislation to ban corporate contributions for political purposes. In response, Congress enacted
several statutes between 1907 and 1966 which, taken together, sought to:
• Limit the disproportionate influence of wealthy individuals and special interest groups on the
outcome of federal elections;
• Regulate spending in campaigns for federal office; and
• Deter abuses by mandating public disclosure of campaign finances.
In 1971, Congress consolidated its earlier reform efforts in the Federal Election Campaign Act (FECA),
instituting more stringent disclosure requirements for federal candidates, political parties and political
action committees (PACs). Still, without a central administrative authority, the campaign finance laws
were difficult to enforce.
Following reports of serious financial abuses in the 1972 Presidential campaign. Congress amended the
FECA in 1974 to set limits on contributions by individuals, political parties and PACs. The 1974
amendments also established an independent agencythe Federal Election Commission (FEC) to enforce
the law, facilitate disclosure and administer the public funding program. Congress made further
amendments to the FECA in 1976 following a constitutional challenge in the Supreme Court case
Buckley v. Valeo ; major amendments were also made in 1979 to streamline the disclosure process and
expand the role of political parties.
Public funding of federal elections originally proposed by President Roosevelt in 1907 began to take
shape in 1971 when Congress set up the income tax checkoff to provide for the financing of Presidential
general election campaigns and national party conventions. Amendments to the Intemal Revenue Code
in 1974 established the matching fund program for Presidential primary campaigns.
The FEC opened its doors in 1975 and administered the first publicly funded Presidential election in
1976.
The Commission
Commissioners
The FEC has six voting members who serve staggered six-year terms. The Commissioners are appointed
by the President with the advice and consent of the U.S. Senate. No more than three Commissioners may
belong to the same political party. The Commissioners elect two members each year to act as Chairman
and Vice Chairman.
Public Meetings
The Commission normally holds a public meeting each week. At this meeting, the Commissioners adopt
new regulations, issue advisory opinions, approve audit reports concerning Presidential campaign
committees, and take other actions to administer the campaign finance law.
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In addition, the Commissioners meet regularly in closed sessions to discuss pending enforcement
actions, litigation and personnel matters.
The Campaign Finance Law
The Federal Election Campaign Act
The basic provisions of the FECA are described below.
Disclosure
The FECA requires candidate committees, party committees and PACs to file periodic reports disclosing
the money they raise and spend. Candidates must identify, for example, all PACs and party committees
that give them contributions, and they must identify individuals who give them more than $200 in a
year. Additionally, they must disclose expenditures exceed ing $200 per year to any individual or
vendor.
Contribution Limits
The FECA places limits on contributions by individuals and groups to candidates, party committees and
PACs. The chart below shows how the limits apply to the various participants in federal elections.
Contribution
Limits
To a
candidate
or candidate
committee
per
election
To a
national
party
committee
per
calendar
year
To any
Total per
other
calendar
political
year
committee
per
calendar
year"
Individual
may give:
$1,000
$20,000
$5,000
$25,000
Multicandidate
committee*
may give:
$5,000
$15,000
$5,000
No limit
Other political
committee
may give:
$1,000
$20,000
$5,000
No limit
*Exception: Ifa contributor givestoa committee knowing that a
substantia/portion of tbe contribution will be usee/tosupport a
oarticu/ar candidate, then the contribution counts against the
donor's Imt forthatcandidate (firstco/umn on the chart).
*A multicandidate committee is a political committee with more than
so contributors which has been registered for at least 6 months
and, with the exception of state party committees, has made
contributions to 5 or more candidates for federal office.
Prohibited Contributions and Expenditures
The FECA places prohibitions on contributions and expenditures by certain individuals and
organizations. The following are prohibited from making contributions or expenditures to influence
federal elections:
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•
•
•
•
http://www.fec.gov/pages/fecfeca.htm
Corporations;
Labor organizations;
Federal government contractors; and
Foreign nationals.
Furthermore, with respect to federal elections:
• No one may make a contribution in another person's name.
• No one may make a contribution in cash of more than $100.
In addition to the above prohibitions on contributions and expenditures in federal election campaigns,
the FECA also prohibits foreign nationals, national banks and other federally chartered corporations
from making contributions or expenditures in connection with state and local elections.
Independent Expenditures
Under federal election law, an individual or group (such as a PAC) may make unlimited "independent
expenditures" in connection with federal elections.
An independent expenditure is an expenditure for a communication which expressly advocates the
election or defeat of a clearly identified candidate and which is made independently from the candidate's
campaign. To be considered independent, the communication may not be made with the cooperation or
consent of the candidate or his or her campaign; nor may it be made upon a request or suggestion of
either the candidate or the campaign. While there is no limit on how much anyone may spend on an
independent expenditure, the law does require persons making independent expenditures to report them
and to disclose the sources of the funds they used. The public can review these reports at the FEC's
Public Records Office.
Corporate and Union Activity
Although corporations and labor organizations may not make contributions or expenditures in
connection with federal elections, they may establish PACs. Corporate and labor PACs raise voluntary
contributions from a restricted class of individuals and use those funds to support federal candidates and
political committees. Click here to download the Campaign Guide for Corporations and Labor
Organizations.
Apart from supporting PACs, corporations and labor organizations may conduct other activities related
to federal elections, within certain guidelines. For more information, call the FEC or consult 11 CFR
Part 114.
Political Party Activity
Political parties are active in federal elections at the local, state and national levels. Most party
committees organized at the state and national levels as well as some committees organized at the local
level are required to register with the FEC and file reports disclosing their federal campaign activities.
Party committees may contribute funds directly to federal candidates, subject to the contribution limits.
National and state party committees may make additional "coordinated expenditures," subject to limits,
to help their nominees in general elections. Finally, state and local party committees may spend
unlimited amounts on certain grassroots activities specified in the law without affecting their other
contribution and expenditure limits (for example, voter drives by volunteers in support of the party's
Presidential nominees and the production of campaign materials for volunteer distribution).
Party committees must register and file disclosure reports with the FEC once their federal election
activities exceed certain dollar thresholds specified in the law.
The Presidential Election Campaign Fund Act
Under the Internal Revenue Code, qualified Presidential candidates receive money from the Presidential
Election Campaign Fund, which is an account on the books of the U.S. Treasury.
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The Fund is financed exclusively by a voluntary tax checkoff. By checking a box on their income tax
returns, individual taxpayers may direct $3 of their tax to the Fund (up to $6 for joint filers). Checking
the box does not increase the amount a taxpayer owes or reduce his or her refund; it merely directs that
three dollars from the U.S. Treasury be used in Presidential elections. Checkoff funds may not be spent
for other federal programs.
The funds are distributed under three programs:
Primary Matching Payments
Eligible candidates in the Presidential primaries may receive public funds to match the private
contributions they raise. While a candidate may raise money from many different sources, only
contributions from individuals are matchable; contributions from PACs and party committees are not.
Furthermore, while an individual may give up to $1,000 to a primary candidate, only the first $250 of
that contribution is matchable.
To participate in the matching fund program, a candidate must demonstrate broad-based support by
raising more than $5,000 in matchable contributions in each of 20 different states. Candidates must
agree to use publicfimdsonly for campaign expenses, and they must comply with spending limits.
Beginning with a $10 million basefigure,the overall primary spending limit is adjusted each
Presidential election year to reflect inflation. In 1996, the limit was $30.91 million.
General Election Grants
The Republican and Democratic candidates who win their parties' nominations for President are each
eligible to receive a grant to cover all the expenses of their general election campaigns. The basic $20
million grant is adjusted for inflation each Presidential election year. In 1996, the grant was $61.82
million.
Nominees who accept the funds must agree not to raise private contributions (from individuals, PACs or
party committees) and to limit their campaign expenditures to the amount of public funds they receive.
They may use the funds only for campaign expenses.
A third party Presidential candidate may qualify for some public funds after the general election if he or
she receives at least five percent of the popular vote.
Party Convention Grants
Each major political party may receive public funds to pay for its national Presidential nominating
convention. The statute sets the base amount of the grant at $4 million for each party, and that amount is
adjusted for inflation each Presidential election year. In 1996, the major parties each received $12.36
million.
Other parties may also be eligible for partial publicfinancingof their nominating conventions, provided
that their nominees received at least five percent of the vote in the previous Presidential election.
The FEC's Role
Administering the Public Funding Program
The FEC administers the public funding program by determining which candidates are eligible to
receive the funds. The Secretary of the Treasury makes the payments.
Committees receiving public funds must keep detailed records of their financial activities. After the
elections, the FEC audits each publicly funded committee. If an audit reveals that a committee has
exceeded the spending limits or used public funds for impermissible purposes, the committee must pay
back an appropriate amount to the U.S. Treasury.
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Facilitating Disclosure
Public Records Office
7. Campaign Finance Materials
Reports filed by registered political committees (such as candidates' campaigns, party committees and
PACs) are available for inspection and copying in the FEC's Public Records Office. The Commission
makes the reports public within 48 hours after their receipt.
Visitors may access the FEC's computer database, which contains helpful indexes on several types of
campaign finance activities (large contributions, PAC contributions, etc.). The agency's database is also
accessible from the Secretary of State's office in many state capitals.
Members of the public who are equipped with a computer modem may reach the FEC's database by
subscribing to the on-line Direct Access Program (DAP).
2. Other Documents
In addition to campaign finance reports (dating back to 1972), the Public Records Office makes
available:
•
•
•
•
•
•
•
Statistical summaries of reported campaign activities;
FEC advisory opinions and advisory opinion requests;
Files on closed enforcement actions;
Personal financial statements filed by Presidential candidates;
Audit reports;
Rulemaking proposals and related documents;
Commission meeting agenda items and other public documents.
5. How to Get Copies of Documents
The Public Records Office is open from 9 to 5 on weekdays (with extended hours during filing periods).
The Office operates as a library facility, and staff members are on hand to assist visitors in locating
documents and using the computer. Most document requests may also be made by telephone or mail.
Click here for the address and phone numbers. Some documents are also available by fax via the FEC's
automated Flashfax system. To access the system, phone 202/501-3413.
Copies of reports filed by federal candidates are also available in the Secretary of State's office in each
candidate's home state and in the public records office of the Clerk of the House or the Secretary of the
Senate, as appropriate.
Press Assistance
The FEC's Press Office also promotes disclosure by issuing press releases covering statistical
information and the agency's activities.
Reporters inquiring about disclosure, enforcement actions and other aspects of the law should ask for the
Press Office when calling or visiting the agency.
Clarifying the Law
Regulations
The Commission clarifies the FECA and the public funding statutes through regulations, codified in
Title 11 of the Code of Federal Regulations. Copies of Title 11 are available from the Commission free
of charge.
Advisory Opinions
The Commission issues written advisory opinions (AOs) to persons seeking guidance on the application
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of the campaign finance law to their own specific activities.
Individuals and organizations involved in an activity approved in an AO may rely on the AO without
risk of enforcement action by the FEC, provided that they act in accordance with the AO's provisions.
Outreach
The FEC places a high priority on helping candidates and committees understand and voluntarily
comply with the law. To achieve this goal, the Commission produces videotapes and free publications,
and hosts conferences in major cities to educate campaign workers, PACs and party committees about
the law. In addition, anyone may obtain personal assistance by calling the FEC's toll free number
(800/424-9530) or by visiting the agency's Information Division.
Enforcing the L a w
Review of Reports
FEC staff review each report filed by federal candidates and committees to ensure that they have
complied with the disclosure requirements and the limits and prohibitions on contributions.
In some cases, FEC staff refer apparent violations or deficiencies in reporting to the Commission for
enforcement action (see below), but reporting problems are often resolved by asking filers to voluntarily
correct or clarify something in their reports. These communications are always on file in the FEC's
Public Records Office.
Enforcement Actions
The Commission has exclusive jurisdiction over the civil enforcement of the federal campaign finance
law.
FEC staff may generate enforcement actions (called Matters Under Review, or MURs) in the course of
reviewing the reports filed by committees. In addition, individuals and groups outside the agency may
initiate MURs by filing complaints (see below). Other government agencies may also refer enforcement
matters to the FEC.
If four of the six Commissioners vote to find reason to believe that a violation of the law has occurred,
the Commission may investigate the matter. If the investigation confirms that the law has been violated,
the Commission tries to resolve the matter by reaching a conciliation agreement with the respondents.
The agreement may require them to pay a civil penalty and take other remedial steps. If an agreement
cannot be reached, however, the Commission may file suit against the appropriate persons in a U.S.
District Court.
As required by law, the Commission keeps enforcement matters strictly confidential until they are
concluded. Once the Commission has closed a MUR, the pertinent documents are placed on the public
record.
Filing a Complaint
Anyone who believes that a violation of the law has occurred may file a complaint with the FEC. The
complaint should contain a statement of facts related to the alleged violation and any supporting
evidence available.
The complaint must be signed and contain the complainant's name and address. It must also be sworn to
and notarized. A step-by-step description of the enforcement process is available in the brochure Filing a
Complaint.
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How to Get More Information
Free Publications
· The FEC Record (monthly newsletter - automatic subscription for registered committees)
· Federal Election Campaign Laws
· FEC Regulations (11 CFR)
· Campaign Guide series (click to download: Congressional Candidates; Party Committees;
Corporations and Labor Organizations; Nonconnected Committees)
See the brochure Free Publications for a complete list.
Office of Election Administration
The FEC's Office of Election Administration serves as a central exchange for information and research
on issues related to the administration of federal elections on the state and local level.
The OEA's publications, which are available at cost, include comparative studies on ballot access,
computerized voting systems, polling place access for the elderly and handicapped, and other studies on
election-related topics.
Election L a w Library
The FEC's depository library, administered by the Office of the General Counsel, is open to the public.
The collection includes basic legal research sources and materials emphasizing campaign finance law.
Help from Other Agencies
Many election-related topics are not under the jurisdiction of the FEC. Some of these topics are listed
below, for your convenience, along with the appropriate agency or officer to contact for more
information. (Consult the FEC's Combined Federal/State Disclosure Directory, available from the
Public Records Office, for a more exhaustive list of topics and agencies.)
Ballot Access
Contact the Secretary of State in your state capital for information on how to get your name or party
listed on the ballot.
Voter Registration, Polling Times and Places
Contact your city or county clerk.
Absentee Ballots
Contact your city or county clerk. If you are overseas at election time, your nearest U.S. Consulate can
help you get an absentee ballot.
Military personnel should contact the Defense Department's Federal Voting Assistance Program at
703/695-9330.
Voting Rights
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If you believe your right to vote has been denied due to racial or ethnic discrimination, contact the U.S.
Department of Justice, Civil Rights Division, at 202/307-2767.
Election Fraud
If you believe that a federal election has been administered fraudulently, contact the nearest branch of
the Federal Bureau of Investigation (FBI).
Contested Elections
For information on how to challenge the results of a federal election, contact the Secretary of State in
your state capital.
TV and Radio Broadcasting
Contact the Political Programming Branch of the Federal Communications Commission (FCC) at
202/418-1440.
Phone Solicitations
Contact the FCC's Common Carrier Branch at 202/632-7553.
Personal Finances of Congressional Candidates
• House: Contact the House Committee on Standards of Official Conduct, 202/225-7103.
• Senate: Contact the Senate Select Committee on Ethics, 202/224-2981.
Tax Questions
To get a taxpayer ID number for a political committee, call 800/TAX-FORM.
For other tax-related questions, political committees should contact the Exempt Organizations Technical
Division of the Intemal Revenue Service at 202/622-8100.
Political Activity of Federal/D.C. Government Employees
Contact the U.S. Office of Special Counsel (Merit Systems Protection Board) at 800/85-HATCH.
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The $3 Tax Checkoff
Published in December 1993
Contents
•
n
•
•
•
•
•
•
•
•
•
•
•
•
What Happens to My Three Dollars?
Who Receives the Checkoff Dollars?
Why Did Congress Adopt the Public Funding Law?
May Any Candidate Receive the Public Funds?
Must Candidates Accept Public Funds?
In the General Election, Do Candidates Benefit from Any Other Financial Resources, Besides the
Public Funds?
How Much Money Has Been Given Out?
How Do Candidates Spend Their FundsT
Does Anyone Monitor Candidates' Use of Funds?
Who Administers the Checkoff Program?
Is the Checkoff Used for AdministeringThe Public Funding Program?
What Would Happen If Checkoff Dollars Ran Short?
Does Checking ' Yes" Increase My Tax?
The Taxpayer's Choice
Do you want $3 of your federal tax to go to the Presidential Election Campaign Fund?
Yes
No
As a U.S. taxpayer, you are asked to make this choice when you fill out your 1040 federal income tax
return. Before you exercise that choice, you may have some questions:
· What is the checkoff for?
· Who receives the money?
· How is the money spent?
· Does the checkoff increase my tax?
This brochure provides some answers.
What Happens to My Three Dollars?
When you check "yes," three of your tax dollars are placed in the Presidential Election Campaign Fund.
During each of the last five years, approximately 33 million taxpayers have checked the "yes" box.
Every four years, the federal government distributes dollars from the Fund (sometimes called public
funds or federal funds) to qualified Presidential candidates and national party committees for use in the
Presidential elections. Whatever money is left over at the end of the Presidential election remains in the
fund and is used in the next election, four years later.
Who Receives the Checkoff Dollars?
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$3 fSx Checkoff
Presidential Nominees in the General Election. The Republican and
Democratic nominees in the general election receive a fixed amount of
checkoff dollars. Nominees from other political parties may qualify for
a smaller, proportionate amount of checkoff funds if they receive over
five percent of the vote.
Presidential Primary Candidates. Candidates in the Presidential
primaries may receive checkoff dollars, in the form of matching funds.
Contributions of up to $250 from individuals are matched dollar for
dollar. PAC and party contributions are not matchable.
Party Nominating Conventions. The national parties receive checkoff funds to cover the costs of their
national conventions held every four years to select their Presidential nominees.
Why Did Congress Adopt the Public Funding L a w ?
Congress set up the checkoff in the early 1970's as an alternative way of funding Presidential elec tions.
Candidates that choose to accept public funds can reduce their dependence on large contributions from
individuals and groups. In the general election, the public funding system places the two major-party
nominees on an equal financial footing in the campaign.
May Any Candidate Receive the Public Funds?
No. The Federal Election Commission (FEC) certifies the eligibility only of those candidates who meet
the strict qualifications established by Congress.
• Checkoff dollars are given only to Presidential candidates who demonstrate broad national
support.
• General election nominees must agree not to accept any private contributions (from individuals or
PACs, for example).
• Candidates must promise not to spend more than $50,000 of their own money on their campaign.
• Recipients of public funds must adhere to a limit on total spending.
Must Candidates Accept Public Funds?
No. A candidate may choose not to participate in the public funding program. In that case, the candi date
is not bound by the expenditure limits.
In the General Election, Do Candidates Benefit from Any Other Financial
Resources, Besides the Public Funds?
Yes. Individuals and political committees may spend money to publicly express their support for or
against candidates, provided there is no coordination with the candidate's campaign. Additionally, the
law allows party committees to spend a limited amount on behalf of their Presidential nominees.
How Much Money Has Been Given Out?
For the general election, the law provides a fixed amount indexed to inflation. In 1976, each major-party
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nominee received $21.8 million. By 1992, reflecting inflationary trends, that amount grew to $55.2
million.
In the Presidential primaries, the total amount paid to campaigns varies from year to yea r. In 1992, 11
primary candidates received a total of $42.7 million in matching funds. Most candidates ran as
Republicans or Democrats; two third-party candi dates also qualified for public funds.
Convention funding is a fixed amount indexed to inflation. In 1992, each major party received $10.6
million to conduct its Presidential nominating con vention.
How Do Candidates Spend Their Funds?
Candidates spend the checkoff dollars on campaign advertising, campaign staff, campaign travel,
fundraising and other campaign expenses. They may not use the federal money for personal expenses or
for any purpose not related to the campaign.
Does Anyone Monitor Candidates' Use of Funds?
Yes. At the end of every Presidential election, the FEC audits the campaigns that receive
public funds. Any unused funds or funds that were not spent for campaign purposes must
?e returned to the U.S. Treasury. Since 1976, approximately $8.7 million has been returned
to the Treasury.
Who Administers the Checkoff Program?
The FEC administers and enforces the public funding program. For example, the agency:
• Certifies the eligibility of the candidates and the amount of matching funds primary candidates
receive;
• Audits the committees that receive public funds;
• Publishes the campaign finance data reported by the candidates and committees; and
• Investigates alleged violations when justified and may initiate civil court actions to enforce the
law.
The IRS monitors the flow of checkoff dollars into the Fund, and the Treasury Department makes the
actual payments to candidates and committees.
Is the Checkoff Used for Administering the Public Funding Program?
No. All of the checkoff money is used for funding Presidential elections.
Costs of administering the program are covered by the FEC's budget, appropriated each year by
Congress.
What Would Happen I f Checkoff Dollars Ran Short?
If a shortfall occurred in the Presidential Fund, the Secretary of the Treasury would allocate the remain
ing funds among the eligible candidates and committees. The law requires that priority be given first to
party nominating conventions, then to general election nominees and last to primary election candidates.
If there were insufficient funds for the primary election candidates, the Treasury would provide only
partial matching funds.
Does Checking "Yes" Increase My Tax?
Checking the "yes" box does not increase the amount of tax you owe, nor does it decrease any refund to
which you are entitled.
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The Taxpayer's Choice
^dl^flH
™" U g ^ - ^ f f i t t ^ ^ ^
^ J-J
In establishing the checkoff program, Congress left the single most
important decision to you, the taxpayer. You decide whether you want three
dollars of your tax to be used for the Presidential funding program described
in this brochure. The choice is yours to voluntarily check yes or no.
The Fund is not a separate account but is actually part of the U.S. Treasury.
In order to qualify for matching funds, a candidate in the primary elections must first raise over $5,000
in each of 20 states (i.e., over $100,000), consisting of small contributions ($250 or less) from
individuals.
Back to the FEC Home Page
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�IndependenJ Expenditures
http://www.fec.gov/pages/indexp.htm
Independent Expenditures
Contents
n What is an Independent Expenditure
• Who May Make Independent Expenditures
• What is Not an Independent Expenditure
• Public Notice Required
• Reporting Requirements
This document defines the term independent expenditure and explains reporting and other requirements
involved in making independent expenditures. Citations refer to Federal Election Commission
regulations, contained in title 11 of the Code of Federal Regulations (11 CFR). Advisory opinions (AOs)
issued by the Commission are cited as well. If you have any questions after reading this appendix, please
call the Commission: 800/424-9530 (toll free) or 202/219-3420.
What Is an Independent Expenditure
An independent expenditure is an expenditure for a communication which expressly advocates the
election or defeat of a clearly identified candidate but which is made independently of any candidate's
campaign. Independent expenditures are special because, unlike contributions, they are not subject to
any limits. However, an expenditure is "independent" only if it meets certain conditions: It must not be
made with the cooperation or consent of, or in consultation with, or at the request or suggestion of, any
candidate or any of his or her agents or authorized committees 109.1(a). An expenditure which does not
meet the above criteria for independence is considered a contribution, as explained below.
Who May Make Independent Expenditures
Generally, individuals, groups and committees permitted to make contributions in connection with
federal elections may make independent expenditures. Those persons prohibited from making
contributions or expenditures in connection with federal electionsfor example, incorporated entities,
labor organizations and individuals or businesses under contract to the federal govemmentare similarly
prohibited from making independent expenditures. However, there are two exceptions to this rule.
Party Committees Impermissible
Although political party committees may make contributions and other kinds of expenditures, they are
"deemed incapable of making 'independent expenditures.'" AO 1980-119. See also 110.7(a)(5) and
(b)(4); AOs 1985 -14 and 1984-15.
Certain Nonprofit CorporationsPermissible
The Supreme Court carved out a limited exception to the general prohibition on corporate expenditures
in Federal Election Commission v. Massachusetts Citizens for Life, Inc. (MCFL), 479 U.S. 238 (1986).
The Court said that MCFL, a non profit corporation, could make independent expenditures because it
had three essential features:
1. It "was formed for the express purpose of promoting political ideas" and did not "engage in
business activities."
2. It had "no shareholders or other persons affiliated so as to have a claim on its assets or earnings."
3. It "was not established by a business corporation or a labor union" and did not "accept
contributions from such entities."
The Court also noted MCFL's small size and lack of formal organization.
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What is Not an Independent Expenditure
When an expenditure for a communication expressly advocating a candidate's election or defeat is made
under the cir cumstances described below, it results in an in-kind contribution rather than an independent
expenditure and therefore counts against the spender's contribution limit for the candidate's election.
109.1(c).
Coordination with Candidate's Campaign
Any expenditure made in cooperation or consultation with the candidate's campaign or as a result of a
request, sugges tion, or prior consent from the candidate or the campaign is an in-kind contribution, not
an independent expenditure. 109.1(b)(4Xi) and (c). See AO 1984-30.
Direction by Campaign Employee
An expenditure made on behalf of a candidate but directed by a current or former officer or employee of
that candidate's committee or by a person who has received compensation or reimbursement from the
campaign is presumed not to be in dependent. 109.1(b)(4)(i)(B). See also AOs 1983-26, 1980-116 and
1979-80.
Use of Common Vendors
The independence of an expenditure made for a communication in support of a candidate (or in
opposition to his or her opponent) may be compromised if the person making the communication and
the candidate's campaign use the same consultant or vendor. See AOs 1982-20 and 1979-80.
Solicitations on Behalf of a Candidate
An expenditure made for a communication that solicits the public for contributions on behalf of a
candidate is an in-kind contribution if the person making the communication collects and forwards the
money to the candidate's committee. See AO 1980-46.
Candidate-Prepared Material
Any expenditure to distribute or republish campaign material (print or broadcast) produced or prepared
by a candidate's campaign is an in-kind contribution, not an independent expenditure. 109.1(d).
Prior Contributions May Affect Independence
A person making an independent expenditure should be aware that making certain types of in-kind
contributions to a particular candidate may jeopardize that person's ability, in the future, to make
independent expenditures on behalf of that same candidate.
For example, i f a multicandidate committee provided paid staff or services to a candidate's primary
campaign, then the committee would have direct knowledge of the candidate's campaign strategy, plans
or needs. Therefore, expenditures by that committee during the general election could not be considered
independent. AO 1984-30.
Example
An individual, not previously involved in Candidate Smith's campaign and without ever contacting any
of his campaign staff, purchases a newspaper advertisement supporting Smith. The payment for the ad is
an independent expenditure. If, however, before purchasing the ad, the individual consults with
Candidate Smith or his campaign staff as to how he or she can help the campaign or when Smith wants
the newspaper ad to appear, the individual makes an in-kind contribution. Or, if the individual pays for a
campaign ad that uses text actually prepared by Smith's campaign, the individual makes an in -kind
contribution to the candidate. (An in-kind contribution, when combined with all other contributions from
the same indi vidual, is limited to $1,000 per candidate, per election. 110.1(b).)
Public Notice Required
An independent expenditure must include a clear and conspicuous public notice. The notice must:
• Identify the name of the person or committee that paid for the expenditure and
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• State that the communication is not authorized by the candidate or his or her authorized committee.
109.3; 110.1 l(a)(l )(iii).
Example: Paidfor by the ABC PAC and not authorized by any candidate or candidate's committee.
Reporting Requirements
Political Committee
A federally registered political committee reports independent expenditures on Schedule E of FEC Form
3X. A political committee must itemize each independent expenditure which exceeds $200 or which,
when added to previous indepen dent expenditures made on behalf of (or in opposition to) the same
candidate, aggregates over $200 during a calendar year. Schedule E instructions explain what itemized
information must be dis closed. (Independent expenditures of $200 or less must be subtotaled and
reported as unitemized expenditures on Schedule E.) 104.3(b)(3)(vii) and 104.4(a).
Any Other Person
Any other person (individual or group) must file a report with the FEC on Form 5 at the end of the first
reporting pe riod in which independent expenditures aggregate more than $250 and must continue to file
reports in any sue ceeding reporting period during the same year in which additional independent
expenditures of any amount are made. 109.2(a). Form 5 instructions explain what information must be
disclosed.
Certification
Both Schedule E (used by political committees) and Form 5 (used by others) require a certification,
under penalty of perjury, that the expenditure meets the standards for independence. Both forms must
also be notarized. 104.3(b)(3)(vii)(B) and 109.2(a)(1).
24-Hour Pre-Election Reports
Any independent expenditure of $ 1,000 or more (in the aggregate) which is made after the 20th day, but
more than 24 hours, before the day of an election must be reported within 24 hours after the expenditure
is made. The report must in elude all the information required on Schedule E or Form 5 and must be
filed with the FEC, the Secretary of the Senate or the Federal Election Commission, as appropriate.
104.4 and 109.2(b). A political committee must disclose a last-minute independent expenditure a second
time on a Schedule E filed with its next scheduled report. The committee may, if it wishes, note that the
expenditure was previously reported.
Contributions to Committees Making Independent Expenditures
Contributions to a political committee making independent expenditures are subject to the donor's limit
for that committee. However, if a donor knows that a substantial portion of his or her contribution to a
committee will be spent on behalf of a particular candidate, the contribution counts, instead, against the
donor's per-election limit with respect to that candidate. 110.1(h).
Definitions:
A candidate is "clearly identified" in a communication when his or her name, nickname, photograph or
drawing appears, or when his or her identity is apparent by unambiguous reference. 100.17.
A multicandidate committee is a poilitical committee that has been registered at least 6 months, has
more than 50 contributors and, with the exception of state party committees, has made contributions to
at least 5 candidates for federal office. 100.5(e)(3).
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The $25,000 Annual Contribution Limit
Published in August 1996
•
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•
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Introduction
Annual Limit of $25,000
Problem Areas to Watch Out For
I f Your Contributions Exceed the $25,000 Annual Limit
Other Limitations on Personal Contributions
Introduction
This brochure focuses on the $25,000 annual limit on all contributions made by an individual to
influence federal electionsT (A section at the end of this brochure discusses other limitations that apply
to contributions made by an individual.)
Call the FEC if you have any questions after reading this brochure:
Federal Election Commission
Washington, D.C.
202/219-3420 (local)
800/424-9530 (toll free)
202/219-3336 (for hearing impaired)
Annual Limit of $25,000
As an individual, you are subject to an annual limit of $25,000 on contributions
made to federal candidates, party committees and political action committees or
PACs. 2 U.S.C. §441a(a)(3); 11 CFR 110.5.
Contributions to Federal Candidates
Your contribution to a federal candidate2 counts against your annual limit for the year in which the
candidate's election is held, regardless of the year in which the contribution is made. 11 CFR
110.5(c). For purposes of the $25,000 limit, you should carefully account for contributions given in one
year but attributed to another.
Examples: All of the following contributions to candidates would count against your annual $25,000
limit for 1996:
n Any contribution to a candidate's 1996 campaign that is made in 1995, 1996 or 1997 (to retire a
1996 campaign debt) or any other year.3 11 CFR 110.5(c)(2).
• Contributions earmarked for a 1996 candidate through a conduit or intermediary who forwards the
contribution to that candidate. 110.5(c)(3)(ii).
• Contributions made to an individual who is "testing the waters" to determine whether or not to run
in 1996, if that individual later becomes a candidate for 1996. 11 CFR 100.7(b)(1).
Contributions to PACs and Party Committees
In contrast to a contribution made to a candidate, your contribution to a federal PAC or a federal
political party committee counts against your annual limit for the year in which the contribution is
actually made, unless you earmark the contribution for a particular candidate whose election falls in a
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different year. 11 CFR 110.5(c)(3).
Example: In 1995, you make a contribution of $20,000 to a national party committee. The contribution
thus counts against your 1995 annual $25,000 limit.
Problem Areas to Watch Out For
The Commission cautions you to be especially aware of two situations that could cause you to
inadvertently exceed the $25,000 annual limit:
• Joint contributions; and
• Contributions to political committees that have separate accounts for federal and nonfederal
election activity.
Joint Contributions
A joint contribution typically occurs when you and another individual each make a contribution using a
single check or written instrument. If you both sign the check or an attached note, the contribution
counts equally against your respective limits unless you specify, in writing, a different split. 11 CFR
110.1(10(1) and (2).
If, however, you alone sign the check or note, the recipient committee must attribute the entire amount to
you. That amount will count against your annual $25,000 limit. See 11 CFR 104.8(c).
Example: In 1996, you and your spouse intend to contribute a combined amount of $5,000 to a political
action committee. However, you alone sign the check. As a result, the entire contribution is attributed to
you and counts against your annual $25,000 limit for 1996.
On the other hand, if each of you signed the check, $2,500 would count against your 1996 $25,000 limit,
and $2,500, against your spouse's $25,000 limit.
Separate Accounts: Federal and Nonfederal
Some political action committees and political party committees (particularly state and national party
committees) have separate accounts for federal and nonfederal election activity. Contributions deposited
into the federal account are viewed as federal contributions and count against the annual $25,000 limit.
Contributions to the nonfederal account, however, do not.
To avoid the possibility of a committee's depositing your contribution into the federal account without
your knowledge or consent, the Commission recommends that you specify the account into which you
want the funds placed, either directly on the check or in an accompanying note. See AO 1988-18.
If Your Contributions Exceed the $25,000 Annual Limit
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Exceeding the $25,000 annual limit results in a violation of federal law. An
individual who exceeds the annual limit faces a potential penalty equal to the
amount of contributions involved (or up to twice this amount in the case of a
knowing and willful
violation).4
If you inadvertently exceed the $25,000 annual limit, the Commission advises
that you immediately take one or more of the steps listed below. Viewing
such actions as mitigating circumstances, the Commission may decrease any
potential penalty.
Steps to Take:
1. Obtain refunds from any type of committee.
2. Reattribute a joint contribution made to any type of committee.
3. Redesignate contributions made to candidates.
4. Ask PACs and party committees to transfer your contributions to their nonfederal accounts.
1. Obtain Refunds From Committee
Contact any type of committee to obtain a refund of those contributions that caused you to exceed the
$25,000 limit. With regard to contributions made to candidates, be sure to request refunds from those
candidates who ran for election in the calendar year for which you exceeded the annual limit.
The Commission recommends that you document your requests in writing.
2. Reattribute Joint Contributions
In the case of a contribution that was intended to be a joint contribution, but which was accompanied by
only one contributor's signature, instruct the commit tee (any type), in writing, to reattribute a portion of
the contribution to the other individual. Make sure:
• You and the other donor both sign the statement instructing the committee to reattribute the
contribution;
• The reattribution does not cause either of you to exceed your contribution limits; and
• The reattribution occurs within 60 days of the treasurer's receipt of the contribution. See 11 CFR
110.1(k)(3)(ii).
Ask the committees to give you a written confirmation that your contributions were reattributed.
3. Redesignate Contributions
Redesignate your contribution to a candidate's committee by asking the committee to apply your
contribution to another election (in which the candidate is running) held in a calendar year for which
you have not used up your $25,000 limit. Make sure:
• You make the request in writing and sign it;
• The redesignation does not cause you to exceed the $1,000 limit for that particular election or the
$25,000 limit for the year in which that election is held; and
• The redesignation occurs within 60 days of the treasurer's receipt of the contribution. See 11 CFR
110.1(b)(5)(ii).
Ask the committee to provide written confirmation that it has processed your redesignation.
4. Request Transfers to Nonfederal Accounts
Contact PACs and party committees to request that they transfer your contributions from their federal
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accounts to their nonfederal accounts, assuming that such transfers are legal under state law. See 11 CFR
102.6(a). The Commission recommends that you make requests in writing, and ask for written
confirmation that the committees have made the requested transfers.
Other Limitations on Personal Contributions
This section defines "contribution" and explains other limitations that apply when individuals make
personal contributions. For more information on specific types of contributions and the contribution
limits, consult the FEC publication Supporting Federal Candidates: A Guide for Citizens.
Definition of Contribution
Federal law defines a contribution as anything of value given to influence a federal election, including:
•
•
•
n
•
•
Donations of checks or currency;
Donated items or services;
Purchases of fundraising tickets and items;
Loans;
Endorsements and guarantees of bank loans; and
Advances of personal funds. 2 U.S.C. §431(8)(A).
Limitations on Contributions You Make
The value of the contributions you make counts against dollar limits. You, the contributor, and the
committees you contribute to are legally responsible for making sure that your contributions do not
exceed your contribution limits. See 2 U.S.C. §441a and 11 CFR 110.1. The law places the
following limits on any type of contribution you make to influence federal elections:
Contribution Limits
Recipient
State Party Committee
Limit
$1,000 per election,5_
per candidate
$20,000 per calendar
year
$5,000 per calendar
year6
Political Action
Committee
$5,000 per calendar year
Candidate Committee
National Party
Committee
1. Citations contained in this brochure refer to federal law, contained in Title 2 of the United States Code
(2 U.S.C), to Federal Election Commission (FEC) regulations, contained in Title 11 of the Code of
Federal Regulations (11 CFR), and to advisory opinions (AOs). The reader should not rely solely on this
brochure, but should also consult the Federal Election Campaign Act, Commission regulations and
advisory opinions.
2. Contributions to federal candidates are also subject to a limit of $1,000 per candidate, per election.
(Federal candidates are candidates running for election to the U.S. House, U.S. Senate or U.S.
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Presidency.) For more information, see the last section of this brochure.
3. A contribution to retire debts from a candidate's previous election must be designated for that specific
election in writing. 11 CFR 110.1(b)(2)(i) and (ii).
4. For more information on the enforcement process, order the FEC brochure Filing a Complaint.
5. A primary, runoff and general are each considered separate elections.
6. Because local party committees are presumed to be affiliated with the party's state committee, a
contribution to a local party committee counts against the contributor's limit for the state party. 11 CFR
110.3(b)(3).
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�Foreign Nationals
http://www.fec.gov/pages/foreign.htni
Foreign Nationals
Published in May 1994
Contents
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Introduction
The Prohibition
Who is a Foreign National
Domestic Subsidiaries and Foreign-Owned Corporations
Volunteer Activity
Nonelection Activity by Foreign Nationals
Monitoring Prohibited Contributions
Introduction
The ban on political contributions and expenditures by foreign
nationals was first enacted in 1966 as part of the amendments to the
Foreign Agents Registration Act (FARA), an "internal security" statute.
The goal of the FARA was to minimize foreign intervention in U.S.
elections by establishing a series of limitations on foreign nationals.
These included registration requirements for the agents of foreign
principals and a general prohibition on political contributions by
foreign nationals. In 1974, the prohibition was incorporated into the
Federal Election Campaign Act (the Act), which gave the Federal
Election Commission (FEC) jurisdiction over its enforcement and
interpretation.
This brochure has been developed to help clarify the rules regarding the
political activity of foreign nationals; however, it is not intended to provide an exhaustive discussion of
the election law. If you have any questions after reading this brochure, please call the FEC in
Washington, DC, at 800-424-9530 or 202-219-3420. Members of the press should contact the FEC Press
Office at 202-219-4155 or at the 800 number listed above.
Except where otherwise noted, all citations refer to the Act and FEC regulations. Advisory opinions
(AOs) issued by the Commission are also cited.
The Prohibition
Under the Act, foreign nationals are prohibited from making contributions or expenditures (including
independent expenditures) in connection with any U.S. election (federal, state or local), either directly or
through another person. Furthermore, the acceptance of contributions from foreign nationals by
candidates or political committees, is prohibited in all U.S. elections federal, state and local. 2 U.S.C.
§441e; 11 CFR 110.4(a) and 110.9(a).
Who is a Foreign National
The following groups and individuals are considered "foreign nationals" and are therefore subject to the
prohibition:
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Foreign governments;
Foreign political parties;
Foreign corporations;
Foreign associations;
Foreign partnerships;
Individuals with foreign citizenship; and
Immigrants not possessing a "green card".
Immigrants
An immigrant is eligible to make a contribution if the immigrant has a
"green card" indicating that he or she has been lawfully admitted for
permanent residence in the United States.
Domestic Subsidiaries and Foreign-Owned Corporations
A U.S. subsidiary of a foreign corporation or a U.S. corporation that is owned by foreign nationals may
be subject to the prohibition, as discussed below.
PAC Contributions for Federal Activity
A domestic subsidiary of a foreign corporation may NOT establish a federal political committee (or
PAC) to make federal contributions if:
(1) The foreign parent corporationfinancesthe PAC's establishment, administration, or solicitation
costs; or
(2) Individual foreign nationals:
•
•
•
•
Participate in the operation of the PAC;
Serve as officers of the PAC;
Participate in the selection of persons who operate the PAC; or
Make decisions regarding PAC contributions or expenditures. 11 CFR 110.4(a)(2) and (3). (See
also AOs 1990­8, 1989­29, and 1989­20.)
Corporate Contributions for Nonfederal Activity
Additionally, a domestic subsidiary of a foreign corporation (or a domestic corporation owned by
foreign nationals) may NOT donate funds or anything of value in connection with state or local elections
if:
(1) These activities are financed by the foreign parent or owner; or
(2) Individual foreign nationals are involved in any way in the making of donations to nonfederal
candidates and committeesT
Please note that many states place additional restrictions on donations made to nonfederal candidates and
committees. 11 CFR 110.4 (a)(3). (See also AOs 1992­16, 1985­3, 1982­10 and MUR
2892).
Volunteer Activity
Generally, an individual may volunteer personal services to a federal candidate or federal political
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committee without making a contribution. The Act provides this volunteer "exemption" as long as the
individual performing the service is not compensated by anyone. 11 CFR 100.7(b)(3). The Commission
has addressed the applicability of this exemption to volunteer activity by a foreign national, as explained
below.
In Advisory Opinion 1987­25, the Commission allowed a foreign national student to provide
uncompensated volunteer services to a Presidential campaign. By contrast, the decision in AO
1981­51 prohibited a foreign national artist from donating his services in connection with
fundraising for a Senate campaign.2
Nonelection Activity by Foreign Nationals
Despite the general prohibition on foreign national contributions, foreign
nationals may lawfully engage in political activity that is not connected with any
election to political office (federal, state or local). The FEC has clarified such
activity with respect to individuals' activity.
In Advisory Opinion 1989­32, the Commission concluded that although
foreign nationals could make disbursements solely to influence ballot issues, a
foreign national could not contribute to a ballot committee that had coordinated
its efforts with a nonfederal candidate's re-election campaign.
In Advisory Opinion 1984­41, the Commission allowed a foreign national
to underwrite the broadcast of political ads that attempted to expose the alleged
political bias of the media. The Commission found that these ads were not election influencing because
they did not mention candidates, political offices, political parties, incumbent federal officeholders or
any past or future federal election.3
Monitoring Prohibited Contributions
When a federal political committee (a committee involved in federal election activity) receives a
contribution it believes may be from a foreign national, it must:
• Return the contribution to the donor without depositing it; or
• Deposit the contribution and take steps to determine its legality, as described below.
Either action must be taken within 10 days of the treasurer's receipt. 11 CFR 103.3 (b)(1).
If the committee decides to deposit the contribution, the treasurer must make sure that the funds are not
spent because they may have to be refunded. Additionally, he or she must maintain a written record
explaining why the contribution may be prohibited.4 11 CFR 103.3(b)(4) and (5). The legality of the
contribution must be confirmed within 30 days of the treasurer's receipt, or the committee must issue a
refund.5 11 CFR 103.3(b)(1).
If the committee deposits a contribution that appears to be legal, but later discovers that the deposited
contribution is from a foreign national, it must refund the contribution within 30 days of making the
discovery. If a committee lacks sufficient funds to make a refund when a prohibited contribution is
discovered, it must use the next funds it receives. 11 CFR 103.3(b)(l)and(2).
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1. This means that foreign nationals may not participate in donation activity, allocate funds for
donations, or make decisions regarding donations (e.g., selecting the recipients, approving the making of
donations or approving the issuance of donation checks).
2. The Commission has stated that this opinion is not superseded by AO 1987­25. Individuals may
obtain further guidance in this area by requesting an advisory opinion about their own proposed activity.
3. Individuals and committees should consider requesting an advisory opinion before engaging in other
types of political activity involving foreign nationals.
4. This information must be included when the receipt of the contribution is reported.
5. Evidence of legality includes, for example, a written statement from the contributor explaining why
the contribution is legal (e.g. donor has a green card), or an oral explanation that is recorded in a
memorandum.
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�Federal and State Laws
http://www.fec.gov/pages/statefed.htm
Federal and State Campaign Finance Laws
Published in October 1995
Contents
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•
•
•
•
•
•
Introduction
When Federal Law Takes Precedence
Examples of Federal Preemption
When Federal Law Does Not Supersede State Law
Nonfederal and Federal Accounts
Nonfederal/Federal Transfers oTTunds
Unregistered Organizations
Introduction
Federal and state campaign finance laws often address similar political activities. Consequently, when
organizations and individuals choose to support both federal and nonfederal candidates, they may have
to determine whether federal or state laws govern a particular election activity. This brochure has been
developed to help state election officials, political committees,J_ and political organizations understand
the areas of campaign finance that are subject to the Federal Election Campaign Act and those that are
subject to state law. It is not intended to provide an exhaustive discussion of election laws, but to clarify
the jurisdictional difference between federal and state election laws.
Citations refer to the Federal Election Campaign Act and Federal Election Commission regulations.
Advisory Opinions (AOs) issued by the Commission are also cited. For more information on the
subjects discussed in this brochure, please call or write:
Federal Election Commission
999 E Street, NW
Washington, DC 20463
800/424-9530
202/219-3420
202/219-3336 (TDD)
When Federal Law Takes Precedence
Where federal laws and state laws appear to overlap, the Federal Election Campaign Act (the Act) and
Commission regulations take precedence in two broad areas:
1. Prohibitions on election-financing activities by foreign nationals, national banks and federally
chartered corporations (2 U.S.C. §44le and 11 CFR 110.4(a); §441b(a) and 11 CFR 114.2(a)); and
2. Laws that pertain to the financing of federal elections (2 U.S.C. §453; 11 CFR 108.7(a)).
Prohibitions on Foreign Nationals, National Banks and Federally Chartered
Corporations
Under the Act, federal law regulates nonfederal election activity by the sources listed below:
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Foreign Nationals >Prohibition. The Act prohibits foreign nationals from making contributions or
expenditures in connection with any United States election (federal, state or local), either directly or
through another person. 2U.S.C. §441e; 11 CFR 110.4(a)(1). The following groups and individuals are
considered "foreign nationals" and are therefore subject to the prohibition:
Foreign governments
Foreign political parties
Foreign corporations
Foreign associations
Foreign partnerships
Federal Law Governs. In a recent enforcement case, the Commission reaffirmed that only federal law
applied to contributions by foreign nationals in connection with state and local election activity and that
Hawaii law could not permit what federal law prohibited. See MUR 2892.
Subsidiary of Foreign Corporation and Nonfederal Activity. A domestic subsidiary of a foreign
corporation (or a domestic corporation owned by foreign nationals) may not donate funds or anything of
value in connection with state or local elections if:
1. These activities arefinancedby the foreign parent or owner; or
2. Individual foreign nationals are involved in any way in the making of donations to nonfederal
candidates and committees.2 11 CFR 110.4(a)(3). See AOs 1992-16, 1985-3 and 1982-10.
Many states place additional restrictions on donations to nonfederal candidates and committees.
Subsidiary of Foreign Corporation and Political Committee Contributions. A domestic subsidiary of a
foreign corporation may not establish a nonfederal or federal committee to make contributions in
connection with any election if:
1. The foreign parent finances the committee's establishment, administration or solicitation costs; or
2. Individual foreign nationals:
• Participate in the operation of the committee;
• Serve as officers of the committee;
• Participate in the selection of persons who operate the committee; or
• Make decisions regarding committee contributions or expenditures. 11 CFR 110.4(a)(2) and (3). See
AOs 1990-8, 1989-29 and 1989-20.
National Banks and Federally Chartered Corporations
The Act also prohibits national banks and corporations organized by authority of any law of Congress
(for example, federal savings banks) from making contributions or expenditures in connection with any
election federal, state or local. 2 U.S.C. §441b(a); 11 CFR 114.2(a). They may, however, set up separate
segregated funds (also called PACs) for this purpose.3 11 CFR 114.2(a)(2); AO 1987-14.
Note: State-chartered banks should consult state laws as to the permissibility of their involvement in
nonfederal election activity.
Federal Election Laws
With respect to the financing of federal elections, federal law specifically supersedes state law in the
following areas:
1. The organization and registration of political committees supporting federal candidates;
2. The disclosure of receipts and expenditures in connection with federal elections by federal candidates
and political committees; and
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3. The limits on contributions and expenditures that apply to federal candidates and political committees.
11 CFR 108.7(b).
Examples of Federal Preemption
Listed below are selected situations in which the Commission has ruled that the Act supersedes state or
local laws.
State Public Financing and Spending Limits
• The Act preempts a Minnesota law under which candidates for the House and Senate received state
funding if they agreed to abide by spending limits. AO 1991-22.
• The Act also preempts a New Hampshire law that restricted party spending on behalf of federal
candidates. AO 1989-25.
Contributions to Federal Candidates or Committees
• Federal law preempts Minnesota, Wisconsin and California laws that prohibited or restricted
contributions from lobbyists to the federal campaign committees of state and local officials who were
running for federal office. AOs 1994-2, 1993-25, 1988-21 and 1978-66.
• Federal law preempts a Tennessee law that prohibited contributions to a party committee from a federal
candidate's committee that had incorporated for liability purposes only. AO 1993-8.
• The Act preempts a Washington law that prohibited fundraising for debt retirement at certain times by
a state representative who had unpaid debts from his previous federal election campaign. AO 1992-43.
Fundraising by PACs
• The Act supersedes state laws that prohibit a corporation from using payroll deduction to raise funds
for its federal PAC. AO 1982-29.
• The Act also supersedes an Oregon law that prohibited a corporation from matching contributions to its
federal PAC with charitable donations. AO 1990-6.
Registration, Records and Reporting
• The Act preempts a North Carolina law with respect to the determination of who has title to and
ownership of committee records. AO 1995-10.
• Federal law supersedes a Rhode Island law that imposed registration, reporting and contribution
requirements on the federal account of a state party committee. AO 1993-14.
• The Act preempts an Alabama law that directed how federal candidates must designate their
committees. AO 1978-54.
Building Funds
• Federal law preempts Michigan, Tennessee and West Virginia laws that prohibited the committees of
state-wide political parties from receiving corporate contributions for the construction or purchase of
office buildings. AOs 1993-9, 1991-5 and 1986-40.
Advertising by/for Federal Candidates
The Act preempts state and local laws that require campaign ads to disclose information not required
under federal law. The Commission specifically concluded that federal committees do not have to
comply with state and local laws that require campaign ads to include:
• The candidate's party affiliation. AO 1978-24.
• The names of campaign officers responsible for the ads. AO 1980-36.
• Specific wording in campaign logos. AO 1986-11.
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• An anti-littering warning. AO 1981-27.
Allocation of Expenses Between Federal and Nonfederal Accounts
• Federal law preempts Massachusetts and Ohio laws that regulated methods of allocating expenses from
nonfederal and federal accounts. AOs 1993-17 and 1993-21.
When Federal Law Does Not Supersede State Law
The Act and Commission regulations do not supersede state laws governing the following areas:
• Methods of qualifying candidates and political party organizations for the ballot;
• Dates and places of elections;
• Voter registration;^
• Prohibitions on false registration, voting fraud, theft of ballots and similar offenses;
• Candidates' disclosure of their personalfinancesS(11 CFR 108.7(c)); and
• Activity by state and local candidates and their committees (unless they engage in sufficient federal
election activity to trigger the Act's provisions).
In a number of advisory opinions, the Commission has determined that the Act does not preempt state
laws. For example, the Commission said the Act did not preempt:
• A state law prohibiting a committee from making payments for "walk around services" on election day
i.e., payments to campaign workers for distributing campaign literature (AO 1980-47); or
• Applicable state laws restricting transfers received by a state campaign committee from a federal
candidate's committee (AOs 1993-10, 1986-5 and 1985-2).
Nonfederal and Federal Accounts
Political committees that engage in both federal and nonfederal election activities must follow certain
rules to ensure that the federal activity isfinancedwith funds that comply with the limits and
prohibitions of federal law. Federal activity includes, for example:
• Contributions and expenditures on behalf of specific federal candidates;
• Contributions to federally registered PACs;
• Transfers of funds and payments made to a federally registered party committee; and
• Payments for voter drives and other activities that influence federal elections even if they do not
promote specific candidates.
An organization that is active in both federal and nonfederal elections and that has qualified as a political
committee has two options. It can:
• Establish a separate account for federal activity and a second account used exclusively for state and
local activity; or
• Conduct both federal and nonfederal activity from one account. 11 CFR 102.5(a)(l)(i) and (ii).
Two Accounts
If an organization uses two accounts, the federal account alone must register as a federal political
committee, subject to federal reporting rules and other requirements. Only funds permissible under the
Act may be deposited into the federal account, and all federal activity must be transacted from this
account. The nonfederal account is generally not subject to the Act's reporting requirements; however,
the federal account must disclose the nonfederal portion of disbursements for shared federal/nonfederal
activity, in addition to its own portion. 11 CFR 102.5(aXl)(i); see also 11 CFR 104.10, 106.5(g) and
106.6(e).
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In addition, the nonfederal account may be subject to state reporting requirements.
One Account
Alternatively, an organization may conduct both federal and nonfederal activity from one account, and
treat that account as a federal political committee. Contributions to the account must comply with federal
limits and prohibitionsregardless of whether the funds are ultimately used for federal or nonfederal
elections. All receipts and disbursemeats, including those that pertain to nonfederal election activity,
must be reported. 11 CFR 102.5(a)(l)(ii).
Nonfederal/Federal Transfers of Funds
Between Candidate Committees Established by the Same Candidate
Under FEC regulations, a candidate's federal campaign committee may not accept funds or assets
transferred from a committee established by the same candidate for a nonfederal election campaign. 11
CFR 110.3(d).
There are two exceptions:
• If the two committees share facilities and personnel, the nonfederal committee may transfer funds to
the federal committee to cover its portion of shared allocable expenses. See AO 1994-37.
• If the nonfederal committee purchases assets from the federal committee, it may transfer funds as
payment to the federal committee. See AO 1989-4.
Between Affiliated PACs
The Commission has permitted the transfer of funds from a nonfederal PAC to an affiliated federal PAC,
subject to certain restrictions on transferred funds. However, the transferred funds are considered
contributions and may trigger registration and reporting requirements for the nonfederal PAC. 11 CFR
102.6(a)(l)(i) and (a)(2); AOs 1990-16 and 1983-3.
Between Accounts of the Same Organization
A transfer of funds from an organization's federal account to its state account is permissible under the
Act. However, any applicable state laws which limit or prohibit such a transfer would not be preempted
or superseded by federal law. See AO 1983-42.
Conversely, an organization may not transfer funds from its nonfederal account to the federal account
except under specific circumstances described below:
Collecting Agent Activity
A nonfederal account may act as a collecting agent for contributions to the federal account without
triggering registration requirements. 11 CFR 102.6(b)(2). See AO 1984-31.
Allocated Expense Payments
In the case of a committee that supports both federal and nonfederal candidates, a nonfederal account
may transfer funds to the federal account to cover the nonfederal portion of shared expenses benefiting
both federal and nonfederal candidates or committees. 11 CFR 102.5(a)(l)(i) and 106.6(eXl)(i).
Unregistered Organizations
An organization which does not qualify as a federal political committee but which nevertheless wants to
influence federal election activity must comply with certain federal rules.
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Permissible Funds Only for Federal Activity
The organization must use permissible funds to pay for federal election activities. To ensure this, it must
adopt one of the two following approaches:
1. It must be able to demonstrate through a reasonable accounting method that it has sufficient funds
permissible under federal law to cover the amount of the federal disbursement at the time it is made.
This includes direct monetary contributions to federal candidates and committees and the federal share
of disbursements for activities, such as voter drives, that benefit federal candidates.
2. Alternatively, it must make the federal disbursement from a separate account reserved for funds
permissible under federal law. 11 CFR 102.5(b). See "Two Accounts" above.
Becoming a Federal Political Committee
When a political organization^ makes federal contributions or expenditures (or a combination of both)
aggregating over $ 1,000 per year, it becomes a political committee. Within 10 days of exceeding this
threshold, the committee must register with the FEC.7 11 CFR 100.5(a) and 102.1(d).
1. A "political committee" is a specially defined term in the Act and regulations. Not all groups active in
federal elections are considered political committees under federal law. For more information, consult 11
CFR 100.5.
2. This means that foreign nationals may not participate in donation activity, allocate funds for
donations, or make decisions regarding donations (e.g., selecting the recipients, approving the making of
donations or approving the issuance of donation checks).
3. Even if organized solely for nonfederal activity, the separate segregated fund of a national bank or
federally chartered corporation must comply with federal rules on soliciting contributions at 11 CFR
114.5, but not with the Act's disclosure rules. See AO 1987-14.
4. In 1993, however, Congress adopted the National Voter Registration Act, which requires states to
implement voter registration procedures including registration of individuals applying for driver's
licenses, registration by mail, and registration at designated government agencies. 42 U.S.C. 1973gg-l et
seq.
5. The Ethics Reform Act of 1989 requires personal financial disclosure reports from federal candidates.
6. The term "political organization" means a party, committee, association, fund or other organization
(whether or not incorporated) organized and operated primarily for the purpose of accepting
contributions or making expenditures to influence elections or appointments to public office. 26
U.S.C.§527(e).
7. A local party organization may also trigger federal registration requirements if it spends over $5,000
per year for exempt party activities or receives over $5,000 per year in contributions to influence federal
elections.
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Public Funding of Presidential Elections
August 1996
Contents
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Introduction
What is Public Funding?
When and How Did it Begin?
How Does Public Funding Work?
Primary Matching Funds
General Election Funding
Expenditure Limits for Publicly Funded Candidates
Convention Funding
What is the FEC's Role?
Eligibility for Public Funds
Repayments of Public Funds
How Can I Support My Candidate?
How Can I Obtain Copies of Reports?
How Can I Get More Information?
Introduction
This brochure gives a brief history of Presidential election public funding and an overview of how the
process works. The brochure also explains the ways individuals may support publicly funded
Presidential candidates and the various materials on Presidential campaign finance available from the
Federal Election Commission.
The brochure was written to help students, reporters and other members of the general public understand
the basics of public funding. It was not written for Presidential candidates and committees that wish to
apply for public funds. They should consult the federal public funding laws and Commission
regulations.
What is Public Funding?
Public funding of Presidential elections means that qualified Presidential candidates receive federal
government funds to pay for the valid expenses of their political campaigns in both the primary and
general elections. National political parties also receive federal money for their national nominating
conventions.
When and How Did it Begin?
The Federal Election Commission administered the first public funding program in 1976. Eligible
Presidential candidates used federal funds in their primary and general election campaigns, and the
major parties used public funds to pay for their nominating conventions. Legislation for public financing
of Presidential candidates was first proposed, however, in 1907. In his State of the Union message that
year. President Theodore Roosevelt recommended public financing of federal elections and a ban on
private contributions.
In 1966, Congress enacted the first public funding legislation, but suspended it a year later. That law
would have made U.S. Treasury funds available to eligible nominees in the Presidential general election
through payments to their political parties. Funds would have come from a Presidential Election
Campaign Fund in the U.S. Treasury consisting of dollars voluntarily checked off by taxpayers on their
federal income tax returns. A subsidy formula would have determined the amount of public funds
available to eligible candidates.
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In 1971, Congress adopted similar provisions, which formed the basis of the public funding system in
effect today. Under the 1971 Revenue AcU the nominee, rather than the party, receives the public funds
accumulated through the dollar checkoff. The Revenue Act also placed limits on campaign spending by
Presidential nominees who receive public money and a ban on all private contributions to them.
In a parallel development, Congress passed the 1971 Federal Election Campaign Act,2 which required
full, detailed reporting of campaign contributions and expenditures by all federal candidates, including
Presidential candidates. The 1974 AmendmentsS to the Federal Election Campaign Act completed the
system we now have for public financing of Presidential elections. Those Amendments extended the
public funding provisions of the Revenue Act to Presidential primary elections4 and the Presidential
nominating conventions of national parties. Court challenges to the expenditure limits followed soon
after Congress passed the 1974 Amendments. However, the Supreme Court, in two separate suits, first
implied and later affirmed that expenditure limits for publicly funded Presidential candidates are
constitutional. (See Buckley v. Valeo (1976) and Republican National Committee v. FEC (1980).) In
1976, Congress made minor changes to the public funding provisions and in 1979 and 1984 increased
the public funding entitlement and spending limit for national nominating conventions.5
How Does Public Funding Work?
To qualify for public funding, Presidential candidates and party convention committees must first meet
various eligibility requirements, such as agreeing to limit campaign spending to a specified amount.
Once the Federal Election Commission determines that eligibility requirements have been met, it
certifies the amount of public funds to which the candidate or convention committee is entitled. The U.S.
Treasury then makes the actual payments from the Presidential Election Campaign Fund. This fund
consists of dollars voluntarily checked off by taxpayers on their federal income tax returns. (In 1993, the
taxpayer checkoff was increased from $1 to $3. Public Law 103-66) The checkoff neither increases the
amount of taxes owed nor decreases any refund due for the tax year in which the checkoff is made.
Primary Matching Funds
Partial public funding is available to Presidential primary candidates in the form of matching payments.
The federal government will match up to $250 of an individual's total contributions to an eligible
candidate.
Only candidates seeking nomination by a political party to the office of President are eligible to receive
primary matching funds. In addition, a candidate must establish eligibility by showing broad-based
public support. He or she must raise in excess of $5,000 in each of at least 20 states (i.e., over $100,000).
Although an individual may contribute up to $1,000 to a primary candidate, only a maximum of $250
per individual applies toward the $5,000 threshold in each state.
Candidates also must agree to:
• Limit campaign spending for all primary elections to $10 million plus a cost-of-living adjustment
(COLA).6 This is called the national spending limit.
• Limit campaign spending in each state to $200,000 plus COLA, or to a specified amount based on the
number of voting age individuals in the state (plus COLA), whichever is greater.
• Limit spending from personal funds to $50,000.
The campaign finance law exempts the payment of some expenses from the spending limits. Certain
fundraising expenses (up to 20 percent of the expenditure limit) and legal and accounting expenses
incurred solely to ensure the campaign's compliance with the law do not count against the expenditure
limits.
Once they have established eligibility for matching payments. Presidential candidates may receive
public funds to match contributions from individual contributors, up to $250 per individual. The
contributions must be in the form of a check or money order. (Purchases of tickets to fundraisers and
contributions collected through joint fundraising are matchable contributions, but loans, cash
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contributions, goods or services, contributions from political committees and contributions which are
illegal under the campaignfinancelaw are not matchable.)
Even if they no longer campaign actively in primary elections, candidates may continue to request public
funds to pay off campaign debts until late February or early March of the year following an election.
(However, to qualify for matching funds, contributions must be deposited in the campaign account by
December 31 of the election year.) Eligible candidates may receive public funds equaling up to half of
the national spending limit for the primary campaign. Because candidates receive many nonmatchable
contributions, such as those from political committees, they generally raise more money than they
receive in matching funds.
General Election Funding
The Presidential nominee of each major party may become eligible for a public grant of $20 million
(plus a cost-of-living adjustment) for campaigning in the general election.7 To be eligible to receive the
public funds, the candidate must limit spending to the amount of the grant and may not accept private
contributions for the campaign. Private contributions may, however, be accepted for a special account
maintained exclusively to pay for legal and accounting expenses associated with complying with the
campaignfinancelaw. These legal and accounting expenses are not subject to the expenditure limit.
In addition, candidates may spend up to $50,000 from their own personal funds. Such spending does not
count against the expenditure limit.
Minor party candidates and new party candidates may become eligible for partial public funding of their
general election campaigns. (A minor party candidate is the nominee of a party whose candidate
received between 5 and 25 percent of the total popular vote in the preceding Presidential election. A new
party candidate is the nominee of a party that is neither a major party nor a minor party.) The amount of
public funding to which a minor party candidate is entitled is based on the ratio of the party's popular
vote in the preceding Presidential election to the average popular vote of the two major party candidates
in that election. A new party candidate receives partial public funding after the election if he/she
receives 5 percent or more of the vote. The entitlement is based on the ratio of the new party candidate's
popular vote in the current election to the average popular vote of the two major party candidates in the
election.
Although minor and new party candidates may supplement public funds with private contributions and
may exempt some fundraising costs from their expenditure limit, they are otherwise subject to the same
spending limit and other requirements that apply to major party candidates.
Expenditure Limits for Publicly Funded Candidates*
Primary
Candidates
National
Spending
Limit
State
Limit
Spending
Exempt F u n d r a i s i n g
Limit
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General E l e c t i o n
Major P a r t y
Minor o r New
Nominees
P a r t y Nominees
$10 m i l . +
COLA**
$20 m i l .
COLA* *
The g r e a t e r
o f $200,000
+ COLA o r
16* x s t a t e
VAP***
+ COLA
None
20% o f
national
Not a p p l i c a b l e
$20 m i l . + COLA
None
of n a t i o n a l l i m i t
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limit
Maximum P u b l i c
Funds Candidate
May Receive
50% o f
national
limit
Same as
national
limit
Percentage o f n a t i o n a l
l i m i t based c a n d i d a t e ' s
popular vote.
National Party
Spending L i m i t
f o r Candidate****
Not a p p l i c a b l e
2* x VAP
o f U.S.
+ COLA
2* x VAP o f U.S. +
COLA
L i m i t on Spending
from Candidate's
Personal Funds
$50,000
$50,000
$50,000
*Legal and accounting expenses incurred solely to ensure the campaign's compliance with the law are
exempt from all expenditure limits.
+
*Spending limits are increased by the cost-of-living adjustment (COLA), which the Department of
Labor calculates annually using 1974 as the base year.
***VAP j
s
Voting Age Population, which the Department of Commerce calculates annually.
****The national committee of a political party may make special, limited expenditures, called
coordinated party expenditures or 441a(d) expenditures, on behalf of its Presidential nominee, even if
the nominee does not accept public funds. Coordinated party expenditures are not considered
contributions and do not count against a publicly funded campaign's candidate expenditure limit.
Convention Funding
Each major political party is entitled to $4 million (plus cost-of-living adjustments)8 to finance its
national Presidential nominating convention. A qualified minor party may become eligible for partial
convention funding based on its Presidential candidate's share of the popular vote in the preceding
Presidential election.
A party convention committee may not spend more than the amount to which the major party is entitled.
Contributions may be accepted, however, for a special account maintained exclusively to pay for legal
and accounting expenses associated with complying with the campaignfinancelaw. Contributions to
this account count against the donor's annual limit for the Party. Certain supplemental services may also
be provided by the host state and city governments and by local groups such as businesses and labor
unions. The host city may, for example, provide additional public transportation to and from the
convention site. Or a business may sell or rent chairs, podiums, tables or other equipment to the
convention committee at discount rates.
What is the FEC's Role?
The Federal Election Commission ensures that candidates and convention committees requesting public
funds have satisfied the eligibility requirements. The FEC then certifies payments of federal funds,
which are actually made by the U.S. Treasury. Before certifying matching payments to primary
candidates, the FEC first reviews submitted contributions to make sure they meet the requirements for
matchability. Additionally, the FEC audits all public funding recipients to ensure that the funds were
spent in compliance with the law. Under certain circumstances, the FEC may require the repayment of
public funds.
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Eligibility for Public Funds
To be eligible for public funds, a Presidential candidate or a party convention committee must first
submit a letter of agreement and a written certification in which the candidate or committee agrees to:
• Spend public funds only for campaign-related expenses or, in the case of a party convention, for
convention-related expenses;
• Limit spending to amounts specified by the campaign finance law;
• Keep records and, if requested, supply evidence of qualified expenses;
• Cooperate with an audit of campaign or convention expenses;
• Repay public funds, if necessary; and
• Pay any civil penalties imposed by the FEC.
Primary candidates must additionally certify that they have met the "threshold requirement" for
eligibility by raising in excess of $5,000 in each of 20 states (see "Primary Matching Funds," above). A
candidate may satisfy eligibility requirements and submit private contributions for matching payments
any time after January 1 of the year before a Presidential general election. Actual payments are not
made, however, until after January 1 of the Presidential election year.
Repayments of Public Funds
The Commission requires candidates and convention committees to repay public funds to the U.S.
Treasury when the FEC audit determines that:
• The amount of public funds received exceeds the amount to which the candidate or convention
committee is entitled;
• Spending limits are exceeded;
• Public funds are used for purposes other than qualified campaign expenses;
• Surplus funds remain after debts and obligations have been paid;
• Interest is earned on invested public funds; or
• The spending of public funds is not sufficiently documented.
Presidential candidates and convention committees may challenge any FEC repayment determination by
following the procedures spelled out in FEC regulations.
How Can I Support My Candidate?
The following paragraphs have been written exclusively for individuals, to explain how they may
support Presidential candidates. (Political committees and other organizations should call the
Commission in Washington, D.C, toll free 800/424-9530 or 202/219-3420.)
Contributions to Primary Candidates9
You may contribute up to $ 1,000 to a Presidential candidate in the primary election campaign, whether
or not the candidate accepts matching funds. (The $1,000 limit applies to the entire primary process,
rather than to a single primary held in a particular state.)
Contributions to Major Party Nominees in the General Election
A major party nominee who has accepted public funding for the general election may not accept any
contributions to further his election. You may, however, help a publicly funded nominee by contributing
to the candidate's compliance fund. A compliance fund is a special account maintained by publicly
funded nominees solely for paying legal and accounting expenses incurred in complying with the
campaign finance law. You may contribute up to $1,000 to the compliance fund of a major party
nominee.
In the case of a major party nominee who is not publicly funded, you may contribute up to $1,000 to
his/her general election campaign.
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Contributions to Minor and New Party Nominees in the General Election
You may contribute up to $1,000 to the general election campaign of a minor or new party candidate,
whether or not the candidate accepts public funds.
Independent Expenditures
In both the primary and general elections, you may make your own "independent expenditures" to
support or oppose a Presidential candidate, whether or not the candidate receives public funds. An
independent expenditure is an expenditure for a communication that expressly advocates the election or
defeat of a clearly identified candidate. An independent expenditure is not considered a contribution and
therefore does not count against contribution limits as long as the expenditure is completely independent
of the candidate's campaign. This means you may not make the expenditure at the request or suggestion
of the candidate or his/her aides or with their consent. Nor may you consult or cooperate in any way with
the candidate or campaign aides. Additionally, you may not use any material prepared by the candidate
or campaign in the communication.
Within these restrictions, you may, for example, place an ad on a billboard or in a newspaper urging the
public to vote for your candidate. However, you must place a notice on the communication stating that
you have paid for it and that it has not been authorized by any candidate (e.g., "Paid for by John Doe and
not authorized by any candidate").
You must file a report with the Commission when the total amount of your independent expenditures
aggregates over $250 during the calendar year. For more reporting information, call the Commission in
Washington, D.C, toll free 800/424-9530 or 202/219-3420.
Volunteer Services
You may volunteer your services to a Presidential candidate's primary and general election campaigns
(whether or not the candidate receives public funding) and to the candidate's political party. However,
you must volunteer the services on your own time, not on your employer's time.
You may also pay for certain expenses as a volunteer. As long as you do not exceed certain limits, the
money does not count as a contribution to the candidate. However, if you exceed the limits placed on
these expenses, the amount over the limit counts as a contribution. Therefore, when spending money on
volunteer activity for major party nominees receiving public funds, you must not exceed the limits.
You may travel on behalf of the candidate, spending up to $1,000 both in the primary and general
election campaigns. In addition, you may spend up to $2,000 annually for travel on behalf of the
candidate's party. You may spend any amount in normal living expenses incurred while traveling or
engaging in other volunteer activity.
You may hold a reception in your home or in a church or community room for the candidate or the
candidate's party. You may spend up to $1,000, both in the primary and general elections, for food,
beverage and invitations associated with the candidate's reception. For a reception held to benefit the
candidate's party, you may spend up to $2,000 annually for the same items.
Contributions to Party Committees
You may contribute up to $20,000 a yearlO to a national party committee and up to $5,000 a year to a
state or local party committee. (A state party committee and the local party committees within that state
usually share one $5,000 annual limit on contributions from a person.) Although major party committees
are not permitted to contribute to their nominee in the general election if he or she accepts public funds,
the national committee of a political party may support the nominee by making special, limited
expenditures on his or her behalf, as indicated in the Chart on Expenditure Limits. The party's national
committee may designate a state or local party committee to make these expenditures. In addition, state
and local party committees may conduct voter drives on behalf of the Presidential nominee and
distribute pins, bumper stickers and other campaign materials benefiting the nominee.
How Can I Obtain Copies of Reports?
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http://www.fec.gov/pages/pubtund.htm
All campaign finance reports filed by Presidential committees and political committees supporting
Presidential candidates are available for review and copying at the FEC's Public Records Office. 11 The
_
office puts reports on the public record within 48 hours after their receipt. They contain detailed
campaign finance information, including itemized accounts of contributions and expenditures in excess
of $200 and debts and obligations owed to or by the candidate or committee. Additionally, the Public
Records Office makes available computer indexes, statistical studies summarizing data taken from
reports and lists of individuals whose contributions enabled Presidential candidates to qualify for
matching funds.
The office also receives and makes public the reports on personal finances filed by Presidential and Vice
Presidential candidates (except incumbent officeholders, who file with the Office of Government
Ethics). These reports are required under the Ethics in Government Act of 1978, over which the FEC has
no enforcement jurisdiction.
Those outside the Washington area may request documents by phone or mail. When identifying the
documents you want, please try to include as much information as possible, such as the full name of the
political committee reporting, the date or type of report or document desired, and your address and
telephone number. The FEC charges 5 cents per photocopied page, and 15 cents per page for paper
copies made from microfilm, payable in advance.
Sometimes a preliminary phone call can help you pinpoint your request and thereby expedite the FEC's
response. Call toll free 800/424-9530 and ask for the Public Records Office or call 202/219-4140.
How Can I Get More Information?
This brochure is not exhaustive in its descriptions. Should you have any questions or wish to order other
FEC publications, contact the Federal Election Commission, 999 E Street, N.W., Washington, D.C.
20463. Call toll free 800/424-9530 or 202/219-3420.
1. See the Presidential Election Campaign Fund Act, 26 U.S.C. §9001 et seq. (Public Law 92-178).
2. See 2 U.S.C. §431 et seq. (Public Law 92-225).
3. Public Law 93-443.
4. See the Presidential Primary Matching Payment Account Act, 2 U.S.C. §9031 et seq.
5. Public Laws 94-283 (1976 Amendments), 96-187 (1979 Amendments) and 98-355 (1984).
6. The cost-of-living adjustment (COLA) is calculated annually by the Labor Department, using 1974 as
the base year. In 1996, the COLA brought the national spending limit to $30.91 million.
7. In 1996, the cost-of-living adjustment (COLA) brought the public funding entitlement for a major
party nominee to $61.82 million.
8. In 1996, the cost-of-living adjustment (COLA) brought the convention committee entitlement to a
total of $12,364 million.
9. Contributions may not be made by foreign nationals or by individuals who are federal government
contractors.
10. Total contributions by individuals in connection with federal elections may not exceed $25,000 a
year.
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11. Reports related to U.S. House and Senate candidates are also available. The Public Records Office
maintains a complete set of reports from 1972 to the present.
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Dublin Core
The Dublin Core metadata element set is common to all Omeka records, including items, files, and collections. For more information see, http://dublincore.org/documents/dces/.
Title
A name given to the resource
Michael Waldman
Description
An account of the resource
<p>Michael Waldman was Assistant to the President and Director of Speechwriting from 1995-1999. His responsibilities were writing and editing nearly 2,000 speeches, which included four State of the Union speeches and two Inaugural Addresses. From 1993 -1995 he served as Special Assistant to the President for Policy Coordination.</p>
<p>The collection generally consists of copies of speeches and speech drafts, talking points, memoranda, background material, correspondence, reports, handwritten notes, articles, clippings, and presidential schedules. A large volume of this collection was for the State of the Union speeches. Many of the speech drafts are heavily annotated with additions or deletions. There are a lot of articles and clippings in this collection.</p>
<p>Due to the size of this collection it has been divided into two segments. Use links below for access to the individual segments:<br /><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0469-F+Segment+1">Segment One</a><br /><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0469-F+Segment+2">Segment Two</a></p>
Creator
An entity primarily responsible for making the resource
Michael Waldman
Office of Speechwriting
Date
A point or period of time associated with an event in the lifecycle of the resource
1993-1999
Identifier
An unambiguous reference to the resource within a given context
2006-0469-F
Extent
The size or duration of the resource.
Segment One contains 1071 folders in 72 boxes.
Segment Two contains 868 folders in 66 boxes.
Provenance
A statement of any changes in ownership and custody of the resource since its creation that are significant for its authenticity, integrity, and interpretation. The statement may include a description of any changes successive custodians made to the resource.
Clinton Presidential Records: White House Staff and Office Files
Publisher
An entity responsible for making the resource available
William J. Clinton Presidential Library & Museum
Format
The file format, physical medium, or dimensions of the resource
Adobe Acrobat Document
Text
A resource consisting primarily of words for reading. Examples include books, letters, dissertations, poems, newspapers, articles, archives of mailing lists. Note that facsimiles or images of texts are still of the genre Text.
Original Format
The type of object, such as painting, sculpture, paper, photo, and additional data
paper
Dublin Core
The Dublin Core metadata element set is common to all Omeka records, including items, files, and collections. For more information see, http://dublincore.org/documents/dces/.
Title
A name given to the resource
CFR [Campaign Finance Reform] - FEC [Federal Election Commission] [1]
Creator
An entity primarily responsible for making the resource
Office of Speechwriting
Michael Waldman
Is Part Of
A related resource in which the described resource is physically or logically included.
Box 55
<a href="http://clinton.presidentiallibraries.us/items/show/36404"> Collection Finding Aid</a>
<a href="https://catalog.archives.gov/id/7763296">National Archives Catalog Description</a>
Identifier
An unambiguous reference to the resource within a given context
2006-0469-F Segment 2
Provenance
A statement of any changes in ownership and custody of the resource since its creation that are significant for its authenticity, integrity, and interpretation. The statement may include a description of any changes successive custodians made to the resource.
White House Staff and Office Files
Publisher
An entity responsible for making the resource available
William J. Clinton Presidential Library & Museum
Format
The file format, physical medium, or dimensions of the resource
Adobe Acrobat Document
Medium
The material or physical carrier of the resource.
Preservation-Reproduction-Reference
Date Created
Date of creation of the resource.
6/3/2015
Source
A related resource from which the described resource is derived
7763296
42-t-7763296-20060469F-Seg2-055-004-2015