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Proposed Rule

Rulemaking Petition: Reporting by Political Action Committees Notice of Disposition

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Federal Election Commission.


Notice of Disposition of Petition for Rulemaking.


The Commission announces its disposition of a Petition for Rulemaking filed on September 20, 1999 by the Project on Government Oversight (“POGO”). The Petition urged the Commission to revise various rules concerning reports filed by political action committees (“PACs”). The Commission has decided not to initiate a rulemaking in response to the Petition at this time. The Petition is available for inspection in the Commission's Public Records Office, through its FAXLINE service, and on its website,


November 2, 2000.

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Ms. Rosemary C. Smith, Assistant General Counsel, or Ms. Mai T. Dinh, Attorney, 999 E Street, NW., Washington, DC 20463, (202) 694-1650 or (800) 424-9530.

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On September 20, 1999, the Commission received a Petition for Rulemaking from POGO. The Petition urged the Commission to take six actions with regard to reports filed by PACs by revising various sections in 11 CFR parts 100, 102, and 104.

The Commission published a Notice of Availability (“NOA”) on the Petition on October 13, 1999, 64 FR 55440. The NOA stated that several of the recommended actions address Commission internal procedures that are not properly the subject of rulemaking. Therefore, the Commission sought comments only on the four suggested actions that can be addressed through rulemaking.

The Commission received twenty-one timely comments and four late comments in response to the NOA from twenty-four commenters. Detailed comments were submitted by Congresswoman Carolyn B. Maloney; Democracy Advocate, U.S. Public Interest Research Group; Money and Politics Iowa; Institute for Social Justice; University of Maryland Department of Government and Politics; Michigan Citizen Action; Ohio Citizen Action; Common Cause; Center for Responsive Government; University of Akron's Ray C. Bliss Institute of Applied Politics; and Project on Government Oversight. In addition to these comments, the Commission received comments expressing general support for the Petition from two individuals and substantially similar comments from eleven commenters including Colby College, Illinois Legislative Studies Center Sunshine Project, and Government Accountability Project. On November 2, 2000, the Commission voted to decline to open a new rulemaking in response to the Petition at this time for reasons stated below. Start Printed Page 66937

A. Issues on Which Comments Were Sought in the NOA

In the NOA, the Commission identified four recommendations in the Petition that were appropriate for rulemaking and sought comments on these recommendations. The issues on which comments are sought include (1) revising 11 CFR 100.6 to require PACs to list, as an affiliated organization on their Statement of Organization, any soft money account to which they forward checks; (2) revising 11 CFR 102.9(a)(3) to require candidates who receive PAC contributions to maintain records that list each PAC's full name and Commission identification number, and revising 11 CFR 100.12 to require them to include this information on their FEC reports; (3) revising 11 CFR 104.8(d)(4) to require PACs to notify the Commission within ten days of receiving a returned contribution; and (4) revising 104.13(a)(2) to require PACs to notify candidates within ten days of any in-kind contribution.

All of the commenters expressed support for the Petition and encouraged the Commission to adopt all six of POGO's recommendations through rulemaking. The commenters who submitted the substantially similar comments stated that the Commission should initiate a new rulemaking project to correct problems with reporting by PACs because “proper disclosure is at the core of what the Commission should be doing, making these reforms vital to the continued integrity of the FEC.” Other commenters characterized the recommendations as “common-sense,” “simple bookkeeping procedures,” “minor,” or “technical”, that would improve the Commission's operations and the reporting and disclosure procedures resulting in more accurate information. Three commenters also supported these recommendations because they would make campaign finance information more understandable to the public. Three commenters made detailed comments on one specific recommendation. Their comments are discussed below.

1. Soft Money Accounts

The Petition suggested that the Commission amend section 100.6 to require “federal PACs [to] list as an affiliated organization on their statement of organization or amendment thereto, any soft money account(s) to which it forwards checks.” The Commission has concluded that it would be more appropriate to address this issue, if at all, in the context of the soft money rulemaking project rather than in a separate rulemaking project.

2. Eliminate Irregular PAC Names

The Petition recommended that the FEC require PACs and political committees to use the PACs' full names and PAC FEC identification numbers when making, receiving, or reporting PAC contributions. POGO pointed to the FEC's PACRONYMS publication, a guide to PAC names, as illustrative of the need for use of uniform names. The Petition suggested that amendments to sections 102.9(a)(3), 102.10, and 100.12 would achieve this result. The Commission has amended its forms and electronic filing software to allow all political committees to include the names and FEC identification numbers of political committees on Schedule A on a voluntary basis.

3. Candidates Report Returned Contributions

The Petition urged the Commission to amend section 104.8(d)(4) to require PACs to notify the Commission of a returned contribution within ten days of the PAC's receipt of the returned contribution. Three commenters included comments specific to this recommendation. They expressed concerns about the impact of the lack of such notice on candidates who refuse to accept PAC contributions. The commenters argued that these candidates may be unfairly challenged by the press or the public on their assertions that they do not accept PAC contributions if a PAC reports making a contribution but does not report in a more timely manner that the contribution was returned.

Generally, the Federal Election Campaign Act (“FECA”) requires unauthorized committees to file their reports to the Commission on a monthly basis, or on a quarterly basis during an election year, and on a semi-annual basis during a non-election year. See 2 U.S.C. 434(a)(4), 11 CFR 104.5(c). Nothing in the FECA requires unauthorized committees to report returned contributions within ten days of receipt. Therefore, an amendment to the FECA would be necessary before the Commission could amend its rules to require reporting returned contributions within ten days.

4. Notify Candidates of All “In-Kind” Contributions

The Petition suggested that the Commission amend section 104.13(a)(2) to require PACs to notify candidates of all “in-kind” services provided to the candidate within ten days of providing the services. Nothing in the FECA requires unauthorized committees to notify candidates when they make in-kind contributions. Consequently, a statutory amendment would be needed before the Commission could impose a new ten day reporting requirement on unauthorized committees.

B. Issues Not Appropriate for Rulemaking

The Petition also contains three recommendations that the Commission concluded could not be implemented through rulemaking.[1] See NOA, 64 FR 55440 (October 13, 1999). Further discussion of these recommendations follows below.

1. Compare PAC Disbursements With Candidate Receipts

The Petition recommended that the FEC compare PAC disbursements with candidate receipts and adopt procedural steps to trigger Requests for Additional Information (“RFAI”) if there are discrepancies above a certain dollar amount. While the Commission recognizes the POGO's concerns, this recommendation goes to internal procedures and is not an appropriate subject for rulemaking.

2. Group FEC Data by Two and Six-year Campaign Cycles

The Petition recommended that the FEC's system in the Public Record Office and on the Internet allow users to list contributions by individuals and PACs on an election-cycle basis. The recent amendment to FECA contained in the Treasury and General Government Appropriations Act, 2000, Public Law 106-58, 106th Cong., Section 640, 113 Stat. 430 (1999), mandating election-cycle reporting provided the authorization for the Commission to amend its regulations to implement election-cycle reporting. The Commission has published final rules at 11 CFR part 104, 65 FR 42619 (July 11, 2000), and has revised its forms to implement election-cycle reporting for authorized committees. See id. at 42620-42623 (Explanation and Justification of the final rules for Election Cycle Reporting by Authorized Committees). It is also in the process of converting to election-cycle reporting, which should allow retrieval of information on an election-cycle basis.

3. Eliminate Duplicate Entries

POGO stated that its report highlighted the problem of duplicate Start Printed Page 66938entries in the Commission's databases. To address this problem, the Petition suggested that the Commission's systems identify transactions that appear to be duplicates and that the Reports Analysis Division send out request for additional information notices to clarify the duplication. As stated above, the Commission's internal procedures, including RFAI notices, are not an appropriate subject for rulemaking. However, the Commission notes that the upcoming expansion of its electronic filing program may eliminate many duplicate entries.

C. Additional Issues Not Included in the Petition

Two commenters included three additional suggestions in their comments on the Petition. They are: (1) Implement better enforcement tools such as random audits, the publication of a list of committees who file incomplete reports, and a schedule of fees for non-compliance; (2) require electronic filing for all committees; and (3) require Senate candidates to file reports directly with the FEC. One of these commenters also added another recommendation requiring multi-candidate entities to issue separate checks to each separate recipient. Because these suggestions are beyond the scope of the Petition for Rulemaking, the Commission will not initiate a new rulemaking project in response to these additional recommendations. In addition, some of the suggestions, such as random audits, are beyond the Commission's statutory authority.

However, the Commission has implemented or is about to implement new programs and procedures since the publication of the NOA that address several of these issues. The new Administrative Fines program, 65 FR 31787 (May 19, 2000) ( to be codified at 11 CFR part 111, subpart B), that went into effect in July, 2000, will assess civil money penalties in accordance with the schedules of penalties on political committees who fail to file their reports in a timely manner. The Commission will also require political committees whose annual contributions or expenditures exceed or are expected to exceed $50,000 to file their reports electronically beginning in January, 2001. 65 FR 38415 (June 21, 2000) (to be codified at 11 CFR 104.18). However, electronic filing cannot be extended to all political committees absent further amendments to the FECA. A legislative change would also be needed for senatorial candidates to file directly with the FEC. However, the Secretary of the Senate has automated the transfer of information from the Senate Public Records' Office to the FEC and the information can be viewed in electronic form on the Commission's website at

While the Commission has decided not to initiate a new rulemaking in response to this petition, changes the Commission is making to its operations, computer systems, forms, and regulations, as described above, will further POGO's goal of enhancing timely and accurate dissemination of campaign finance information to the public. Accordingly, no further action on the Petition for Rulemaking will be taken at this time. See 11 CFR 200.4.

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Dated: November 2, 2000.

Darryl R. Wold,

Chairman, Federal Election Commission.

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1.  The Petition's first recommendation actually contained two separate recommendations—first, to compare PAC disbursements with candidate receipts and second, to require PACs to list soft money accounts as affiliated organizations. The second recommendation was included among the list of recommendations on which the Commission sought comments in the NOA.

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[FR Doc. 00-28601 Filed 11-7-00; 8:45 am]