September 2004 Federal Election Commission Volume 30, Number 9

Table of Contents Regulations Court Cases

Regulations 1 Political Committee Rules Political Committee Rules Wisconsin Right to Life, Approved Approved Inc. v FEC 4 Rulemaking Petition On August 19, 2004, the Commis- On August 17, 2004, the U.S. sion approved final rules that may District Court for the District of Court Cases require more so-called 527 organiza- 1 Wisconsin Right to Life, Inc. v Columbia denied Wisconsin Right tions to register and report with the to Life, Inc.’s (WRTL) motion for FEC FEC, beginning in 2005. In general, 3 LaRouche’s Committee for a New a preliminary injunction that would Bretton Woods v FEC the new regulations: have exempted certain WRTL broad- 3 New Litigation • Expand the definition of contribu- cast ads from the ban on corporate tion to include funds received as funding of electioneering communi- 4 Nonfilers a result of a communication that cations. indicates any portion of those funds 4 Advisory Opinions Background will be used to support or oppose WRTL had filed suit in the U.S. Public Funding the election of a clearly identified federal candidate; and District Court for the District of 7 Public Funding for Kerry-Edwards Columbia on July 26, 2004, asking 8 Matching Fund Certifications • Define the types of costs that feder- al PACs may allocate between their the court to find the prohibition on the use of corporate funds to pay 8 Publications federal and nonfederal accounts, and modify the allocation methods for electioneering communications unconstitutional as applied to certain Administrative Fines they must use. 9 Fines Assessed grass-roots lobbying activities, The Commission is finalizing the including three specific advertise- Outreach Explanation and Justification that ments that were attached to WRTL’s 10 Reporting Roundtables will accompany the final rules, and complaint. The plaintiffs also asked will publish both in the Federal Reg- the court to preliminarily and perma- Information ister and on the FEC website, www. nently enjoin the Commission from 10 IRS 527 Disclosure Initiative fec.gov. A complete summary of the enforcing this prohibition against new rules will appear in the October WRTL for any of these communica- 10 Index Record. tions. —Elizabeth Kurland On July 29, the court granted the plaintiff’s unopposed motion to have the case heard by a three-judge

(continued on page 4) (continued on page 2) Federal Election Commission RECORD September 2004

Court Cases and 11 CFR 100.29. Corporations substantial likelihood of success on (continued from page 1) may not make electioneering com- the merits; (2) WRTL would suffer panel, and also granted its motion to munications using their general trea- irreparable harm in the absence of an expedite proceedings on the request sury funds.2 2 U.S.C. §§441b(a)-(b) injunction; (3) an injunction would for a preliminary injunction.1 and 11 CFR 114.2 and 114.14. not cause substantial injury to other Under the Federal Election The Plaintiff’s grass-roots lob- parties; and (4) the public interest Campaign Act (the Act) and Com- bying efforts involve broadcast ads would be furthered by the injunc- mission regulations, an electioneer- paid for by WRTL asking Wisconsin tion. ing communication is defined, with listeners to contact U.S. Senators Substantial likelihood of success some exceptions, as any broadcast, Kohl and Feingold and to ask them on the merits. In McConnell v FEC, cable or satellite communication that to vote against anticipated filibusters 124 S. Ct. 619 (2003), the Supreme refers to a clearly identified federal of federal judicial nominees. Sena- Court upheld the electioneering candidate and is publicly distributed tor Feingold is up for re-election this communication provisions of the for a fee within 60 days before the year, and some of the intended ads BCRA in their entirety. Further- general election or 30 days before will run during the electioneering more, the reasoning of the court left a primary election or a nominating communications periods for Wiscon- no room for the kind of “as applied” convention for the office sought by sin’s primary and general elections. challenge brought by WRTL. The the candidate. 2 U.S.C. §434(f)(3) According to WRTL, because Supreme Court expressly stated their ads express an opinion on that it upheld all applications of the pending Senate legislative activity, primary definition of electioneering 1 urge listeners to contact their Sena- communication, suggesting little The Bipartisan Campaign Reform Act likelihood of success for an “as of 2002 (BCRA) provides for such expe- tors and do not refer to any politi- dited review of constitutional challenges cal party or support or attack any applied” challenge to a particular to its provisions. See BCRA 403, 116 candidate, they constitute bona fide application of that definition. This Stat. at 113-114. grass-roots lobbying. They argue deliberate upholding of “all ap- that these ads are not the “functional plications” stands in contrast to the equivalent of express advocacy,” court’s explicit acknowledgment that and, thus, there is no constitutional other parts of the statute, which it Federal Election Commission justification for the prohibition on also upheld, might be subject to “as 999 E Street, NW corporate payments for these ads applied” challenges in the future. Washington, DC 20463 or for requiring the ads to be paid Plaintiff would suffer irrepa- 800/424-9530 for through a political action com- rable harm if an injunction is not 202/694-1100 mittee. See McConnell v FEC, 124 granted. The court concluded that 202/501-3413 (FEC Faxline) S. Ct. at 696. WRTL asserts that the actual limitation on WRTL’s 202/219-3336 (TDD for the in this instance the prohibition on freedom of speech is not nearly as hearing impaired) corporate-sponsored electioneering great as WRTL had argued. WRTL communications unconstitutionally is not precluded from forwarding its Bradley A. Smith, Chairman message or from exposing the public Ellen L. Weintraub, Vice Chair burdens the rights of free speech, free association and petitioning the to the advertisements at issue. The David M. Mason, Commissioner BCRA does not prohibit the speech Danny L. McDonald, government—all in violation of the First Amendment. in question, it only requires that Commissioner corporations and labor organizations Scott E. Thomas, Commissioner Michael E. Toner, Commissioner District Court Decision engaging in such speech channel The three-judge court rejected their spending through PACs. In James A. Pehrkon, Staff Director WRTL’s motion for a preliminary McConnell, the Supreme Court Lawrence H. Norton, General noted that corporations remain free Counsel injunction, finding that it did not demonstrate that: (1) WRTL had a to organize and administer separate Published by the Information segregated funds (PACs) for the Division purpose of financing electioneering Greg J. Scott, Assistant Staff 2 Commission regulations provide an communications. Director exception allowing “qualified nonprofit An injunction would not cause Amy Kort, Editor corporations” to pay for electioneering substantial injury to other parties. Meredith Trimble, Associate communications. 11 CFR 114.2(b)(2). It is the statutory duty of the FEC Editor However, WRTL alleges that it does not to enforce the BCRA. To the extent http://www.fec.gov meet the definition of a qualified non- the injunction is entered, the FEC profit corporation. 11 CFR 114.10.

2 September 2004 Federal Election Commission RECORD

could not properly perform this duty, New Litigation to the U.S. Treasury for expenditures which is a substantial injury to the that were not permissible conven- FEC. FEC v Reform Party of the USA tion expenses or were not properly Public interest would be furthered On July 21, 2004, the Federal documented. 11 CFR 9008.7(a) and by the injunction. The Supreme Election Commission (FEC) filed an 9008.10. The RPUSA submitted Court has determined that the provi- action with the U.S. District Court a timely request for administrative sions of the BCRA serve compelling for the Northern District of Florida review of the repayment determi- government interests. McConnell, to collect $333,558 from the Re- nation, and after review, the FEC 124 S. Ct. at 695-96. As a result, in- form Party of the United States of upheld the repayment determination. terference with executing the BCRA America (RPUSA or Party) and its The RPUSA requested reconsidera- by enjoining its enforcement does treasurer, William D. Chapman, Sr., tion of the FEC’s repayment deter- not further the public interest and the Reform Party 2000 Conven- mination, which the FEC rejected as The district court further ordered tion Committee and its treasurer, untimely. The RPUSA then filed a all parties to file appropriate supple- Gerald M. Moan. The suit arises petition for review in the U.S. Court mental memoranda addressing the from a final determination by the of Appeals for the District of Colum- potential dismissal of the matter, and FEC regarding the financing of the bia Circuit, which the D.C. Circuit denied WRTL’s subsequent request RPUSA’s 2000 Presidential nomi- dismissed as untimely. to enter an injunction while WRTL nating convention, during which Court complaint. In its court pursued an appeal. the Party spent some of the public complaint, the FEC asserts that the money grant it received to pay for repayment determination is now Appeal convention expenditures not permit- “final and conclusive” and the merits WRTL has appealed the district ted by law. of the repayment determination are court’s decision to the U.S. Court of Background. Under the Presi- not subject to judicial review. The Appeals for the District of Columbia dential Election Campaign Fund Act defendants have not paid any of Circuit, and has requested an injunc- (the Fund Act), the national party the $333,558 debt. The FEC asks tion from the D.C. Circuit pending committee of an eligible major or the court to declare that the defen- this appeal. minor party is entitled to receive dants are obliged to pay to the U.S. U.S. District Court for the District public funding to finance the party’s Treasury $333,558, plus interest, of Columbia, CV04-1260 (DBS, presidential nominating convention. order defendants to make that repay- RWR, RJL). 26 U.S.C. §9008. To receive these ment, and to give preference to the —Meredith Trimble funds, the national committee must repayment over all other outstanding establish a convention committee obligations of the committee, other LaRouche’s Committee for a than federal taxes. New Bretton Woods v FEC that “shall be responsible for con- ducting the day to day arrangements U.S. District Court for the On July 29, 2004, the U.S. Court and operations of that party’s presi- Northern District of Florida, CV of Appeals for the District of Colum- dential nominating convention.” 11 04-00079. bia granted the Commission’s mo- CFR 9008.3(a)(2). The convention —Meredith Trimble tion to dismiss this case. LaRouche’s committee may use the funds only Committee for a New Bretton to pay for permissible convention Woods (LCNBW) had asked the expenses, defined as “all expenses court to review the FEC’s final deter- Need FEC Material incurred by or on behalf of a politi- in a Hurry? mination requiring the committee to cal party’s national committee or repay to the U.S. Treasury a portion convention committee with respect Use FEC Faxline to obtain of the Presidential primary match- to and for the purpose of conducting FEC material fast. It operates ing funds it received for the 2000 a presidential nominating convention 24 hours a day, 7 days a week. Presidential election. The court con- or convention-related activities.” 11 Hundreds of FEC documents— cluded that the appeal was premature CFR 9008.7(a)(4). reporting forms, brochures, FEC because LCNBW had filed with the The Fund Act also requires that regulations—can be faxed almost Commission a timely petition for the FEC conduct an audit of any immediately. reconsideration, and the committee committee that receives public fund- Use a touch tone phone to dial may not seek judicial review until ing. The Final Audit Report, ad- 202/501-3413 and follow the the rehearing has concluded. See the opted by the FEC on September 26, instructions. To order a complete June 2004 Record, page 7, and the 2002, included a determination that menu of Faxline documents, enter May 2004 Record, page 15. the defendants must repay $333,558 document number 411 at the —Amy Kort prompt.

3 Federal Election Commission RECORD September 2004

Regulations that should also be addressed in a pre-election reports or the quarterly (continued from page 1) rulemaking at this time. Public com- report due before the candidate’s ments must be submitted, in either election. 2 U.S.C. §437g(b). The Rulemaking Petition Seeks written or electronic form, to Brad agency may also pursue enforcement New EC Exemption Deutsch, Assistant General Counsel. actions against nonfilers and late fil- On July 20, 2004, the Commis- Comments may be sent by: ers on a case-by-case basis. sion received a Petition for Rule- —Amy Kort making that asks the Commission • E-mail to [email protected] to revise its electioneering commu- (e-mailed comments must include nications regulations by providing the commenter’s full name, e-mail a separate exception for advertise- address and postal address); ments of political documentary • Fax to 202/219-3923 (send a Advisory films that do not promote, support, printed copy follow-up to ensure Opinions attack or oppose a candidate for legibility); or • Overnight mail to the Federal federal office and that are made in AO 2004-18 the ordinary course of business. See Election Commission, 999 E Street NW, Washington, DC 20436. Campaign Committee’s 11 CFR 100.29. The Commission Purchase of Candidate’s will publish a Notice of Availabil- —Meredith Trimble ity in the Federal Register seeking Book at Discounted Price comments on whether to initiate a The Friends of Joe Lieber- rulemaking in response to this peti- man Committee (the Committee) tion. The deadline for comments is Nonfilers may buy copies of Senator Joseph 30 days after the notice is published. Lieberman’s book at a discounted With certain exceptions, an Congressional Committees price that will be made available to electioneering communication is Fail to File Reports other purchasers under a customary any communication that refers to a practice in the publishing industry. clearly identified federal candidate; Favazza for Congress, the Steve The books will be given to campaign is “publicly distributed” over televi- Dennis for Congress Committee supporters and contributors. sion or radio within 60 days before and the Committee to Elect Charles a general election or 30 days before E. Berry failed to file 12-Day Pre- Background a primary election or a national Primary reports for the August 3, Under Senator Lieberman’s nominating convention; and, in the 2004, primary election in Missouri. publishing contract, if the publisher case of Congressional candidates, is Friends of John Conyers failed to determines that his book is no longer targeted to the relevant electorate. file a 12-Day Pre-Primary report for “readily saleable at regular prices See 2 U.S.C. §434(f)(3)(a)(i) and 11 the Michigan primary election also within a reasonable time,” it may CFR 100.29. Corporations and labor held on August 3. In addition, the designate its remaining stock of cop- unions are prohibited from directly Steve Dennis for Congress Commit- ies as “remainder copies” and sell or indirectly financing electioneering tee (MO) and the Simon Pristoop for them at a steep discount. The pub- communications. Congress Committee (FL) failed to lisher recently made this determina- The rulemaking petition was file July Quarterly reports. tion and, pursuant to the publishing submitted by Mr. Robert F. Bauer, Prior to the reporting deadline, contract, offered the book to Senator acting on his own behalf and not on the Commission notified committees Lieberman at a discounted price of behalf of any client or third party. of their filing obligations. Commit- $3.40 per copy before offering this The full text of the notice is tees that failed to file the required price to other buyers. The Com- available on the FEC web site at reports were subsequently noti- mittee intends to purchase a few http://www.fec.gov and from the fied that their reports had not been hundred of the thousands of remain- FEC faxline, 202/501-3413. The received and that their names would ing copies in order to distribute them Commission requests comments on be published if they did not respond as gifts to campaign supporters. whether the Commission should ini- within four business days. The Committee will not otherwise tiate a rulemaking on “electioneering The Federal Election Campaign promote or sell the book. Senator communications” and on whether Act requires the Commission to pub- Lieberman will waive any potential there are other issues regarding the lish the names of principal campaign royalties or royalty credits that might electioneering communication rules committees if they fail to file 12-day result from this purchase.

4 September 2004 Federal Election Commission RECORD

Analysis the expense would not exist irrespec- AO 2004-20 In-kind contributions. Under the tive of the campaign because: Connecticut Party Federal Election Campaign Act (the • The books will only be used as Convention Still Considered Act), a contribution includes the gifts to campaign supporters and an “Election” provision of goods or services at less the Committee will not promote or than the usual and normal charge— Despite a change in Connecti- sell the book; thus, the Committee in other words, at less than the price cut state law, party conventions in will use them only for the purpose of those goods in the market from Connecticut continue to be separate of influencing Senator Lieberman’s which they ordinarily would have elections under the Federal Elec- re-election to federal office; been purchased at the time of the tion Campaign Act (the “Act”). As • The Committee will not buy more contribution. 11 CFR 100.52(d)(1) a result, Democratic House can- books than it needs for this pur- and (2). In the past, the Commission didate Diane Farrell, who did not pose; and has determined that the purchase of participate in Connecticut’s August • Senator Lieberman will not receive goods or services at a discount does 10, 2004, primary, may not accept any royalties or royalty credits as a not result in a contribution when the undesignated primary contributions result of the Committee’s purchase discounted items are made available after May 10, 2004, the date of her of the books, nor will the purchase in the ordinary course of business Democratic district convention. increase his opportunity to receive and on the same terms and condi Likewise, her principal campaign - future royalties.1 tions to the vendor’s other customers committee, Farrell for Congress (the that are not political committees. See Thus, the Committee’s purchase “Committee”), was not required to AOs 2001-8, 1996-2, 1995-46 and of the books is permissible under the file a pre-primary report in con- 1994-10. Act and Commission regulations. nection with the August 10, 2004 In this case, the practice of dis- The Committee should report funds primary. counting books when they are no it spends on the books as operating Background longer saleable at the regular price expenditures for the 2006 election Diane Farrell is the Democratic is standard in the publishing indus- cycle. 2 U.S.C. §§434(b)(4)(A) and candidate for the U.S. House of Rep- try. In addition, the publisher set (5)(A); 11 CFR 104.3(b)(2)(i) and resentatives from Connecticut’s 4th the price for the remainder copies (b)(4)(i). Congressional District. The Demo- of Senator Lieberman’s book in the Date Issued: July 15, 2005; cratic Party in Connecticut held its ordinary course of its business based Length: 7 pages. convention for the U.S. House on on its estimation of the fair market —Amy Kort May 10, 2004. The primary elec- value of the book as a remainder. tions for all offices in Connecticut Thus, the Committee will pay the were held on August 10, 2004. usual and normal charge for this Since the Democratic Party endorsed type of purchase, and no in-kind Ms. Farrell as its candidate for the contribution will result. 4th Congressional District, and no Personal use of campaign funds. other member of the Democratic The Act provides for four categories Party met the requirements to chal- of permissible uses of campaign lenge her endorsement, Ms. Farrell funds, including otherwise autho- is the Democratic Party’s nominee rized expenditures that are made in and her name did not appear on the connection with the candidate’s fed- primary election ballot. eral campaign. 2 U.S.C. §439a(b)(1) Until January 1, 2004, Connecti- and 11 CFR 113.2(a), (b) and (c). 1 cut law provided that if a candidate In no case, however, may cam- Although the personal use regulations received his or her party’s endorse- paign funds be used for an expense permit a candidate to rent space, equip- ment at the party’s convention, and if that would exist irrespective of the ment or other items to his principal campaign committee at the usual and no other candidate received at least candidate’s campaign or duties as a 15 percent of the endorsement vote federal officeholder, and thus be con- normal charge, Senator Lieberman’s waiver of royalties and royalty credits at the convention, then no primary verted to “personal use.” 2 U.S.C. would be held for that office and §439a(b)(1) and 11 CFR 113.1(g). that would otherwise result from the sale of copies of his book to the Committee the party-endorsed candidate would In this case, the funds will be precludes the use of the sale as a device be deemed lawfully chosen as the used for an otherwise authorized to use the Committee to benefit him fi- expenditure made in connection with nancially. See 11 CFR 113.1(g)(1)(i)(E) Senator Lieberman’s campaign, and and AOs 2001-8 and 1995-46. (continued on page 6)

5 Federal Election Commission RECORD September 2004

Advisory Opinions could then be entitled to two sepa- election. 11 CFR 110.1(b)(2)(ii). (continued from page 5) rate contribution limits. However, the Committee may use The new Connecticut law does contributions raised after May 10 party’s nominee. In 2003, Con- not materially change this situation to the extent necessary to retire necticut enacted a new law, effective for purposes of the Act. The only net debts outstanding. 11 CFR January 1, 2004, that provides for difference between Connecticut’s 110.1(B)(3)(i). an additional route for a candidate’s old and new laws is that there are Reporting. Under Commission name to be placed on the primary now two ways (i.e., receiving at least regulations, a Congressional candi- ballot. The new law permits any 15 percent of the endorsement vote date’s principal campaign commit- registered member of the party, even or filing a petition), rather than one, tee must file a pre-election report if that member has not received 15 to challenge the party convention’s “no later than 12 days before any percent of the endorsement vote at endorsement. However, under the primary or general election in which the party convention, access to the new law, as under the old law, if no the candidate seeks election.” 11 primary ballot if they file a peti- party member challenges the party’s CFR 104.5(a)(2)(i)(A). Because the tion with signatures of at least two endorsement, the party-endorsed May 10 convention was an election percent of the party members in the candidate will be deemed chosen and no primary was held for the 4th state or district (whichever applies) as the party’s nominee solely by Congressional District on August 10, within 14 days after the end of the virtue of the party’s endorsement the Committee fulfilled its pre-elec- convention. and without being required to take tion reporting requirement by filing Analysis any additional steps to secure the its pre-convention report. The Com- Definition of “election.” The Act nomination. Therefore, Connecti- mittee did not need to file a pre-pri- and Commission regulations define cut party conventions still have the mary report in connection with the an “election” to include “a general, authority to nominate candidates and August 10, 2004, primary election. special, primary, or runoff election” thus continue to be elections under Date Issued: July 20, 2004; and “a convention or caucus of a po- the Act. In this instance, no Demo- Length: 7 pages. litical party which has the authority cratic primary took place for the 4th —Elizabeth Kurland to nominate a candidate.” 2 U.S.C. Congressional District, and, there- §§431(1)(A) and (B); 11 CFR 100.2. fore, the only election Ms. Farrell The question of whether a particular was involved in during this primary event meets the definition of “elec- process was the May 10 Democratic AO 2004-22 tion” is determined by an analysis of district convention. Unlimited Transfers to State state law. Treatment of undesignated con- Party Committee In Advisory Opinion 1976-58, tributions received after the party U.S. Representative Doug analyzing Connecticut’s old law, the convention. Commission regula- Bereuter, a retiring member of Commission determined that party tions provide that contributions Congress, may make unlimited conventions were elections for pur- not designated in writing by the transfers of campaign funds to the poses of the Act. This was because contributor for a particular election Nebraska State Republican Party it was “possible under Connecticut are presumed to be made for the (the Party). The Party, in turn, may law for the convention’s ‘party-en- next election after the contribution use these funds to renovate its office dorsed candidate’ to be ‘deemed is made. 11 CFR 110.1(b)(2)(ii). building. Under the Federal Election … chosen as the nominee’” if no Furthermore, “[c]ontributions des- Campaign Act (the Act), transfers to other candidate received the required ignated in writing for a particular a state party committee are a permit- percentage of the delegates’ votes election, but make after that election, ted use of contributions received by or filed a “candidacy” for nomina- shall be made only to the extent that a principal campaign committee. 2 tion. The Commission noted that the contribution does not exceed net U.S.C. §439a. in such a case, the endorsement at debts outstanding from such elec- the convention was “tantamount tion.” 11 CFR 110.1(b)(3)(i). Background to a nomination of the candidate,” Because the Commission has de- Representative Bereuter resigned and thus, the party convention had termined that the May 10 Democrat- from the U.S. House of Representa- the “authority to nominate” candi- ic district convention was the only tives and will not run for re-election. dates. Therefore, candidates could election Ms. Farrell was involved His principal campaign committee, be involved in two elections during in during the primary season, the Bereuter for Congress, recently the primary process—the convention Committee must treat undesignated transferred $5,000 from its campaign and the primary (if necessary)—and contributions made after May 10, account to the Party to defray the 2004, as contributions to the general costs of remodeling the Party’s of-

6 September 2004 Federal Election Commission RECORD

fice building. Bereuter for Congress Advisory Opinion Requests intends to transfer another $10,000 to $15,000 to fund further remodel- AOR 2004-26 Public ing. Volunteer work—including deci- Funding sion-making—by foreign national Analysis in federal candidate/officeholder’s The Act lists four permissible campaign and political committee Public Funding for Kerry- uses for campaign funds and pro- activities (Congressman Jerry Weller Edwards vides that campaign funds must not and Zury Rios Sosa, July 13, 2004) On July 30, 2004, the Commis- be converted to the personal use of sion approved public funding for any individual. 2 U.S.C. §§439a AOR 2004-27 the general election campaign of and 439a(b). One permissible use Campaign’s payment of back pay Democratic Presidential nominee of funds is for unlimited transfers to former employees for time they John Kerry and his Vice-Presidential to a state party committee. 2 U.S.C. volunteered services while campaign running mate Senator John Edwards. §439a(a)(4); 11 CFR 113.2(c). was low on funds (Quayle 2000 The U.S. Treasury Department made These provisions of the Act do not Committee, July 14, 2004) the payment of $74.620 million limit the ways that the state party AOR 2004-28 shortly thereafter. committee can use the funds, nor do Under the Presidential Election they restrict the amount that may be Authority of state to require state party committee to publicly disclose Campaign Fund Act, the Demo- transferred in any specific period of cratic and Republican nominees 1 names of donors to building fund time. are each entitled to a grant of $20 Thus, Bereuter for Congress account (Iowa Ethics and Campaign Disclosure Board, July 22, 2004) million increased by a cost-of-liv- may transfer $10,000 to $15,000 ing adjustment (COLA). In order to in campaign funds to the Party for receive public funding, the Kerry- the purpose of remodeling its party AOR 2004-29 Federal candidate/officeholder’s Edwards campaign agreed to abide headquarters. Any or all of the funds by the overall spending limit and may be transferred before August support of state ballot referendum committees that he did not establish other legal requirements, including 31, 2004. a post-campaign audit. Addition- Date Issued: July 23, 2004; (Representative Todd Akin and Todd Akin for Congress, July 20, 2004) ally, as major party nominees, they Length: 2 pages. agreed to limit campaign spending —Amy Kort AOR 2004-31 to the amount of the public fund- Ads containing references to a ing grant and not to accept private Alternative Disposition of name shared by a candidate, his contributions for the campaign. They Advisory Opinion Request son, and their incorporated business also agreed not to spend more than as potential prohibited electioneer- $50,000 in the aggregate of their ing communications (Russ Darrow AOR 2004-21 own personal funds. The campaign Group, Inc., July 30, 2004) On August 6, 2004, the requestors may, however, accept contributions designated for its general election withdrew Advisory Opinion Request AOR 2004-32 2004-21, regarding a commercial legal and compliance (GELAC) Affiliation resulting from a pri- fund. This fund is a special account web site designed to allow contribu- vate investment firm holding voting tors to direct contributions to charity maintained exclusively to pay for the stock of a corporation, enabling the expenses related to complying with when an equal contribution was corporation’s PAC to solicit directors made to a competing candidate or the campaign finance law. Compli- and senior employees of the firm ance expenses do not count against cause. (Spirit Airlines, Inc., July 22, 2004) —Amy Kort the expenditure limit. Contributions to the GELAC fund are, however, subject to the limits, prohibitions and reporting requirements of the 1 A transfer pursuant to 2 U.S.C. federal campaign finance laws. §439a(a)(4) and 11 CFR 113.2(c) is not The Democratic National Com- subject to the contribution limitation mittee may spend an additional in 2 U.S.C. §441a(a)(1)(D) or 11 CFR 110.1(c)(5). Such a transfer is also con- sistent with the regulations addressing office buildings of state or local party committees in 11 CFR 300.35. (continued on page 8)

7 Federal Election Commission RECORD September 2004

Public Funding Matching Funds for 2004 Presidential Candidates: (continued from page 7) July Certification $16,249,699 for coordinated expen- Candidate Certification Cumulative ditures on behalf of the Kerry-Ed- July 2004 Certifications wards campaign. These funds are subject to the limits, prohibitions Wesley K. Clark (D)1 $0 $7,615,360.39 and disclosure requirements of the 2 Federal Election Campaign Act. John R. Edwards (D) $83,430.52 $6,604,769.40 —Amy Kort Richard A. Gephardt (D)3 $0 $4,104,319.82 Dennis J. Kucinich (D)4 $186,000.00 $2,847,079.59 Commission Certifies Matching Funds for Lyndon H. LaRouche, Jr. (D)5 $0 $1,408,993.13 Presidential Candidates Joseph Lieberman (D)6 $9,966.00 $4,267,796.85 On July 22 and 30, 2004, the Commission certified $427,744.66 Ralph Nader (D) $148,348.14 $547,106.80 in federal matching funds to four Presidential candidates. The U.S. Alfred C. Sharpton (D) $0 $100,000.007 Treasury Department made the 1 payments on August 2, 2004. These General Clark publicly withdrew from the Presidential race on February 11, 2004. certifications raise to $27,495,425.98 2 Senator Edwards publicly withdrew from the Presidential race on March 3, 2004. the total amount of federal funds 3 Congressman Gephardt publicly withdrew from the Presidential race on January 2, certified thus far to eight Presidential 2004. candidates. 4 Congressman Kucinich became ineligible to receive matching funds on March 4, Presidential Matching Payment 2004. Account 5 Mr. LaRouche became ineligible to receive matching funds on March 4, 2004.

Under the Presidential Primary 6 Matching Payment Account Act, the Senator Lieberman publicly withdrew from the Presidential race on February 3, federal government will match up to 2004. $250 of an individual’s total contri- 7 On May 10, 2004, the Commission determined that Reverend Sharpton must repay butions to an eligible Presidential this amount to the U.S. Treasury for matching funds he received in excess of his en- primary candidate. A candidate must titlement. See the July 2004 Record, page 8. establish eligibility to receive match- ing payments by raising in excess of Treasury the following month. 26 $5,000 in each of at least 20 states CFR 702.9037-2. Only contributions Publications (i.e., over $100,000). Although an from individuals in amounts of $250 individual may contribute up to or less are matchable. Updated Brochures Available $2,000 to a primary candidate, only The chart above lists the amount The Commission has recently a maximum of $250 per individual most recently certified to each updated its “Independent Expendi- applies toward the $5,000 thresh- eligible candidate who has elected tures” and “Local Party Activity” old in each state. Candidates who to participate in the matching fund brochures to reflect changes in the receive matching payments must program, along with the cumulative law made by the Bipartisan Cam- agree to limit their committee’s amount that each candidate has been paign Reform Act of 2002. spending, limit their personal spend- certified to date. The brochures are currently avail- ing for the campaign to $50,000 and able on the FEC web site at http:// submit to an audit by the Commis- Nominating Conventions The Commission has previously www.fec.gov. A limited number of sion. 26 U.S.C. §§9033(a) and (b) printed copies will also be available and 9035; 11 CFR 9033.1, 9033.2, certified $14,924,000 to each of the two major political parties for for those without Internet access. To 9035.1(a)(2) and 9035.2(a)(1). request a printed copy, call the Infor- Candidates may submit requests their 2004 Presidential Nominating Conventions. mation Division at 800/424-9530 or for matching funds once each 202/694-1100. month. The Commission will certify —Amy Kort an amount to be paid by the U.S.

8 September 2004 Federal Election Commission RECORD

Administrative Committees Fined for and Penalties Assessed Fines 1. Americans for Common Sense Government $2,400 2. Americans United in Support of Democracy $1,593 3. America’s PAC $2,700 Committees Fined for 4. Bankers United in Legislative Decisions Nonfiled and Late Reports AKA BUILD (FKA Iowa Bankers Association) ____1 The Commission recently pub- 5. Buckley02 $275 licized its final action on 30 new 6. Bricklayers and Allied Craftworkers Local No. 3 Administrative Fine cases, bringing New York, Niagra Falls/Buffalo Chapter PAC $8252, 3 the total number of cases released to 7. Campaign for U. N. Reform PAC (Now named “Citizens the public to 973, with $1,322,312 in for Global Solutions PAC—Global Solutions PAC”) ____1 fines collected by the FEC. 8. Cohen for New Hampshire $8504 Civil money penalties for late 9. Cox for U.S. Senate Committee, Inc. $ 22,150 reports are determined by the num- 10. David Langston for Congress $04 ber of days the report was late, the 11. Ed Tinsley for Congress $04 amount of financial activity involved 12. Friends of Bob Gross Committee and any prior penalties for viola- July Quarterly 2002 $2,7002 tions under the administrative fines 13. Friends of Bob Gross Committee regulations. Penalties for nonfiled October Quarterly 2002 $2,7002 reports—and for reports filed so late 14. Friends of Roger Kahn Inc. $04 as to be considered nonfiled—are 15. Jim Baker for Congress $2,700 also determined by the financial 16. Keyspan Energy PAC (KEYPAC) ____1 activity for the reporting period and 17. Mark A. Augusti for Congress $7502 any prior violations. Election sensi- 18. Meeks for Congress $11,275 tive reports, which include reports 19. Mike Greene for Congress Committee $10,1252 and notices filed prior to an election 20. National Committee for an Effective Congress $9,000 (i.e., 12-day pre-election, October 21. New Mexicans for Bill Richardson $4,100 quarterly and October monthly 22. Office of the Commissioner of Major League Baseball PAC $400 reports), receive higher penalties. 23. Philip Lowe for Congress $23,7502 Penalties for 48-hour notices that are 24. Plumbers Union Local 690 of the United Association filed late or not at all are determined of Journeyman and Apprentices of the Plumbing and by the amount of the contribution(s) Pipefitting Industry of the United States and Canada not timely reported and any prior Local Election Political Action Fund ____1 violations. 25. Pro-Life Campaign Committee The committee and the treasurer 30 Day Post-General 2002 $12,000 are assessed civil money penalties 26. Pro-Life Campaign Committee when the Commission makes its Year End 2002 $6,000 final determination. Unpaid civil 27. Ross For Congress penalties are referred to the Depart- July Quarterly 2003 $9,6252 ment of the Treasury for collection. 28. Ross For Congress October The committees listed in the chart Quarterly 2003 $11,0002 above, along with their treasurers, 29. Saltchuk Resources Inc. PAC (AKA SALTCHUK PAC) $825 were assessed civil money penal- 30. Strickland for Colorado, Inc. $6,400 ties under the administrative fines regulations. Closed Administrative Fine case 1The Commission took no further action in this case. files are available through the FEC 2 Press Office and Public Records Of- This civil money penalty has not been collected. fice at 800/424-9530. 3 This civil money penalty was reduced after being recalculated for a late —Amy Kort report rather than for a nonfiled report. 4This civil money penalty was reduced due to the level of activity on the report.

9 Federal Election Commission RECORD September 2004

Outreach Information Index

Reporting Roundtables IRS 527 Disclosure Initiative The first number in each citation On October 6, 2004, the Com- On August 19, 2004, the Internal refers to the “number” (month) of mission will host two roundtable Revenue Service (IRS) announced a the 2004 Record issue in which the sessions on election year reporting, new initiative to improve reporting article appeared. The second num- including new disclosure require- and disclosure by tax-exempt “sec- ber, following the colon, indicates ments under the Bipartisan Cam- tion 527” political groups. the page number in that issue. For paign Reform Act of 2002 (BCRA). In the initial stage of the program, example, “1:4” means that the article See the chart below for details. the IRS will immediately begin is in the January issue on page 4. Both sessions will be followed by contacting a cross-section of 527 Advisory Opinions a half-hour reception at which each groups to request that they explain 2003-28: Nonconnected PAC attendee will have an opportunity to and correct apparent discrepancies in established by limited liability meet the campaign finance analyst their existing filings prior to upcom- company composed entirely of who reviews his/her committee’s ing filing deadlines. These deadlines corporations may become an SSF reports. Representatives from the include September 20 (for monthly with the limited liability company FEC’s Electronic Filing Office will filers) or October 15 (for quarterly as its connected organization, 1:20 also be available to meet with at- filers), as well as October 21 for 2003-29: Transfer of funds from a tendees. pre-election reports. nonfederal PAC to a federal PAC Attendance is limited to 30 An organization that fails to time- of an incorporated membership people per session, and registration ly report, fails to include all required organization, 1:21 is accepted on a first-come, first- information about contributions and 2003-30: Retiring campaign debt served basis. Please call the FEC disbursements, or that reports incor- and repaying candidate loans, 2:1 before registering or sending money rect information is required to pay 2003-31: Candidate’s loans to to ensure that openings remain. The 35 percent of the amount related to campaign apply to Millionaires’ registration form is available on the the failure. There is an exception for Amendment threshold, 2:2 FEC web site at http://www.fec.gov reasonable cause. 2003-32: Federal candidate’s use and from Faxline, the FEC’s auto- The filings, as well as informa- of surplus funds from nonfederal mated fax system (202/501-3413, tion on the filing requirements and campaign account, 2:4 request document 590). For more upcoming dates, are available on the 2003-33: Charitable matching plan information, call the Information IRS.gov website at www.irs.gov/pol- with prizes for donors, 2:5 Division at 800/424-9530, or locally orgs. 2003-34: Reality television show to at 202/694-1100. —Submitted by the IRS simulate Presidential campaign, —Amy Kort 2:6 2003-35: Presidential candidate may withdraw from matching payment program, 2:7 Roundtable Schedule 2003-36: Fundraising by federal Date Subject Intended Audience candidate/officeholder for section 527 organization, 2:8 2003-37: Nonconnected PAC’s use October 6 Election Year Reporting Individuals responsible of nonfederal funds for campaign 9:30-11 a.m. for PACs and Party Com- for filing FEC reports for activities, 4;4 Reception mittees, plus “Meet Your PACs and Party Com- 2003-38: Funds raised and spent 11-11:30 a.m. Analyst” reception mittees (Up to 30 may by federal candidate on behalf of Attend) redistricting committee to defray legal expenses incurred in redis- October 6 Election Year Reporting Individuals responsible tricting litigation, 3:14 1:30-3 p.m. for Candidates and Their for filing FEC reports for 2003-39: Charitable matching plan Reception Committees, plus “Meet Candidate Committees conducted by collecting agent of 3-3:30 p.m. Your Analyst” reception (Up to 30 may Attend) trade association, 3:10 2003-40: Reporting independent expenditures and aggregation for

10 September 2004 Federal Election Commission RECORD

various elections, 3:11 and press release policy for closed – Malenick, 5:13 2004-1: Endorsement ads result in MURs; “enforcement profile” – Reform Party of the USA, 9:3 contribution if coordinated com- examined, 1:6; EQS update, 7:10 munications; “stand-by-your-ad” MUR 4818/4933: Contributions in Regulations disclaimer for ad authorized by the name of another and excessive Administrative Fine program exten- two candidates, 3:12 contributions, 8:1 sion, final rule, 3:1 2004-2: Contributions from testa- MUR 4919: Fraudulent misrepresen- Contributions by minors, Notice of mentary trusts, 4:8 tation of opponent’s party through Proposed Rulemaking, 5:3 2004-3: Conversion of authorized mailings and phone banks, 6:2 Electioneering communications, committee to multicandidate com- MUR 4953: Party misuse of nonfed- FCC database, 3:3 mittee, 5:5 eral funds for allocable expense, Electioneering Communication 2004-4: Abbreviated name of trade 6:3 Exemption, Petition for Rulemak- association SSF, 5:7 MUR 5197: Donations from Con- ing, 9:4 2004-6: Web-based meeting services gressionally chartered corpora- Federal election activity periods, 3:1 to candidates and political com- tions, 4:13 Inaugural committees, Notice of mittees, 5:7 MUR 5199: Campaign committee’s Proposed Rulemaking, 5:1 2004-7: MTV’s mock Presidential failure to report recount activities, Leadership PACs, final rules, 1: 18 election qualifies for press exemp- 6:4 Overnight delivery service, safe har- tion—no contribution or election- MUR 5229: Collecting agent’s fail- bor for timely filing of reports, 3:1 eering communication results, 5:8 ure to transfer contributions, 1:7 Party committee coordinated and 2004-8: Severance pay awarded to MUR 5279: Partnership contribu- independent expenditures, Notice employee who resigns to run for tions made without prior agree- of Proposed Rulemaking, 8:1 Congress, 6:4 ment of partners to whom contri- “Political committee” definition, 2004-9: State committee status, 5:10 butions were attributed, 8:3 definition of “independent ex- 2004-10: “Stand by your ad” dis- MUR 5328: Excessive contributions penditure,” allocation ratio for claimer for radio ads, 6:5 to and from affiliated leadership nonconnected PACs, Notice 2004-12: Regional party organiza- PACs, 5:1 of Proposed Rulemaking, 4:1; tion established by several state MUR 5357: Corporation’s reim- Public hearing, 5:3; extension of party committees, 8:4 bursement of contributions, 2:1 Commission’s consideration, 6:1; 2004-14: Federal candidate’s appear- Naming of treasurers in enforcement Rules approved, 9:1 ance in public service announce- matters, proposed statement of Public access to materials from ments not solicitation, coordinated policy, 3:4 closed enforcement matters, Peti- communication or electioneering Nonfilers, 3:16; 4:13, 6:7; 7:5; 8:13; tion for Rulemaking, 3:4 communication, 8:6 9:4 Public financing of Presidential 2004-15: Film ads showing federal candidates and nominating con- candidates are electioneering com- Court Cases ventions, correction and effective munications, 8:8 _____ v. FEC date, 1:19 2004-17: Federal candidate’s com- – Akins, 4:10 Travel on behalf of candidates and pensation for part-time employ- – Alliance for Democracy, 3:8 political committees, final rules, ment, 8:8 – Cooksey, 8:11 1:19 2004-18: Campaign committee’s – Cox for Senate, 3:4 purchase of candidate’s book at – Hagelin, 4:11; 8:9 Reports discounted price, 9:4 – Kean for Congress, 3:7 Due in 2004, 1:9 2004-20: Connecticut party conven- – Lovely, 5:12 April reminder, 4:1 tion considered an election, 9:5 – McConnell, 1:1 Convention reporting for Connecti- 2004-22: Unlimited transfers to state – LaRouche’s Committee for a New cut and Virginia, 5:10 party committee, 9:6 Bretton Woods, 6:7; 9:3 July reminder, 7:1 – O’Hara, 6:6; 8:11 Kentucky special election reporting, Compliance – Wilkinson, 4:9 1:9 ADR program cases, 1:25; 4:15; 7:9; – Wisconsin Right to Life, Inc., 9:1 North Carolina special election 8:11 – Sykes, 4:12 reporting, 7:9 Administrative Fine program cases, FEC v. _____ 1:24; 4:14; 6:9; 9:9 – California Democratic Party, 4:9; Enforcement Query System avail- 8:10 able on web site, disclosure policy – Dear for Congress, 8:10 for closed enforcement matters – Friends of Lane Evans, 3:9

11 Federal Election Commission RECORD September 2004

FEDERAL ELECTION COMMISSION 999 E Street, NW PRESORTED STANDARD Washington, DC 20463 U.S. POSTAGE PAID FEDERAL ELECTION COMMISSION

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