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Proposed Rule

Notice of Disposition Regarding Party Committee Transfers of NonFederal Funds for Payment of Allocable Expenses

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Federal Election Commission.


Notice of disposition.


The Commission will not issue a statement of enforcement policy regarding party committee transfers of nonfederal funds for payment of allocable expenses. On November 7, 2001, the Commission requested comments on a Draft Statement of Policy. The Draft Statement indicated that in light of the suspension of fundraising activities by some party committees after the terrorist attacks of September 11, 2001, the Commission would consider exercising its prosecutorial discretion by not pursuing prima facie violations of the 60 day limit for party committee transfers of nonfederal funds to pay for the nonfederal share of allocable expenses. After receiving and considering public comments, the Commission declined to adopt a final Statement of Policy by a 3-3 vote.


November 29, 2001.

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Rosemary C. Smith, Assistant General Counsel, or Richard Ewell, Staff Attorney, 999 E Street, NW, Washington, DC 20463, (202) 694-1650 or (800) 424-9530.

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The Commission's regulations at 11 CFR 106.1 and 106.5 allow party committees to defray the costs of activities that relate to both federal and nonfederal elections by allocating the costs between their federal and nonfederal accounts, so long as they pay an amount equal to or greater than the federal portion of these expenses with funds that are permissible under the Federal Election Campaign Act, 2 U.S.C. § 431 et seq. [“FECA” or “the Act”]. The Commission's regulations provide that party committees, after paying an allocable expense, have a 60 day “window” to transfer funds from a nonfederal account to cover the nonfederal portion of the allocable expense. See 11 CFR 106.5(g)(1)(i) and (ii); 11 CFR 106.5(g)(2)(ii)(B).

In many instances, party committees plan and execute allocable activities based, in part, on the expectation that they will subsequently receive nonfederal funds that can be transferred to their federal or allocation accounts before the expiration of the 60-day transfer window in section 106.5(g)(2)(ii)(B). In light of the fact that some party committees temporarily suspended their fundraising activities in the immediate aftermath of the September 11, 2001 terrorist attacks, these party committees may not have sufficient funds in their nonfederal accounts to make transfers to their federal accounts or allocation accounts within the required 60 day transfer window.

Consequently, the Commission sought and received public comment on a draft proposal to exercise its prosecutorial discretion by not pursuing prima facie violations of the 60 day time limit for a specified period of time. See 66 FR 56247 (Nov. 7, 2001). On November 29, 2001, the Commission declined to adopt a final statement of policy by a vote of 3-3. See Agenda Document Number 01-61. Because the motion did not receive an affirmative vote of four members of the Commission, the Commission is announcing that no further action on the proposed statement of policy will be taken at this time. See 2 U.S.C. 437c(c).

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Dated: December 18, 2001.

David M. Mason,

Vice Chairman, Federal Election Commission.

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[FR Doc. 01-31616 Filed 12-26-01; 8:45 am]