[House Hearing, 108 Congress]
[From the U.S. Government Publishing Office]
HEARING ON FEDERAL ELECTION COMMISSION ENFORCEMENT PROCEDURES
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HEARING
before the
COMMITTEE ON HOUSE ADMINISTRATION
HOUSE OF REPRESENTATIVES
ONE HUNDRED EIGHTH CONGRESS
FIRST SESSION
__________
HEARING HELD IN WASHINGTON, DC, OCTOBER 16, 2003
__________
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COMMITTEE ON HOUSE ADMINISTRATION
BOB NEY, Chairman
VERNON J. EHLERS, Michigan JOHN B. LARSON, Connecticut
JOHN L. MICA, Florida Ranking Minority Member
JOHN LINDER, Georgia JUANITA MILLENDER-McDONALD,
JOHN T. DOOLITTLE, California California
THOMAS M. REYNOLDS, New York ROBERT A. BRADY, Pennsylvania
Professional Staff
Paul Vinovich, Staff Director
George Shevlin, Minority Staff Director
FEDERAL ELECTION COMMISSION ENFORCEMENT PROCEDURES
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THURSDAY, OCTOBER 16, 2003
House of Representatives,
Committee on House Administration,
Washington, DC.
The committee met, pursuant to call, at 3:00 p.m., in room
1310, Longworth House Office Building, Hon. Robert W. Ney
(chairman of the committee) presiding.
Present: Representatives Ney, Ehlers, Linder, Doolittle,
Larson, Millender-McDonald, and Brady.
Staff Present: Paul Vinovich, Staff Director; Matt
Petersen, Counsel; Jeff Janas, Professional Staff; Jennifer
Hing, Assistant Clerk; George F. Shevlin, Minority Staff
Director; Charles Howell, Minority Chief Counsel; Tom Hicks,
Minority Professional Staff; and Matt Pinkus, Minority
Professional Staff.
The Chairman. The committee will come to order. The
committee is meeting today to discuss the enforcement
procedures at the Federal Elections Commission. The FEC is
unique among Federal agencies in that its regulatory activities
deeply implicate a poor constitutional liberty; namely,
political speech. Although agencies charged with overseeing
commodities, financial transactions, or public safety may
incidentally affect the political process, the actions of the
FEC have a direct and substantial impact on our Nation's
political dialogue and electoral system. Our Founding Fathers
deemed the freedom of speech, especially the ability to speak
freely on political matters, to be so vital to a healthy
democratic republic that they enshrined protections for speech
in the first amendment to the Constitution.
The founders also included the due process clause in the
Bill of Rights to ensure that fair procedures govern any
administrative or legal proceeding conducted by the government.
Any examination of the FEC's enforcement procedures must
determine not only whether they efficiently achieve their
enforcement objectives but also the extent to which they
respect and fully comply with these two constitutional
principles. The Federal Election Campaign Act gives to the FEC
exclusive jurisdiction over civil enforcement of the act.
Enforcement actions taken by the FEC are conducted
according to procedures set forth in the act and internal
Commission directives. In the past, many in the regulated
community have expressed concerns about the FEC enforcement
process. These criticisms, from what we have been told, have
focused on the inability of respondents in enforcement actions
to appear before the FEC to present an oral argument; the FEC
practice of naming nearly everyone mentioned in a complaint as
a respondent, even if they have little or no involvement in the
alleged violation; the FEC's confidentiality advisement which
has often impeded the ability of respondents to gather facts,
even from friendly witnesses; and the limited ability of
respondents to access all the evidence against them and to
challenge the recommendations made by the FEC's Office of
General Counsel.
In addition to these complaints it has been alleged that
the burden--and I want to repeat, alleged--that the burden of
FEC enforcement activity is unevenly borne by grass-roots
volunteers and small political actors whose lack of experience
and inability to afford sophisticated legal counsel leave them
less equipped to navigate the complexities of the act.
It would indeed be a cruel irony if our Federal campaign
finance system, whose aim is to reduce cynicism and encourage
political involvement among our Nation's citizenry, ended up
stifling grass-roots activism by disproportionately penalizing
civic-minded individuals with fewer resources and less
expertise.
This past summer the FEC held a hearing and sought public
comment on its enforcement procedures, and we give the FEC
credit for that. We commend them for taking this proactive step
of critically examining some procedures to see where it can
improve its performance by making its procedures more fair and
more efficient. As a result of that hearing, the FEC recently
announced certain alterations to its deposition policies. We
hope this will be the FEC's first step in a continuing process
of evaluating the effectiveness of its enforcement procedures.
I also want to commend the FEC for a pretty difficult job
and a lot of time that the FEC puts into this. And again, it is
something I know is difficult to balance at times, but I do
commend you for having the hearing.
So the purpose of today is, again, to air some of these
issues and to hear testimony on it. And with that, at this
point I would like to recognize Mr. Larson, our Ranking Member,
for any remarks he may have.
Mr. Larson. Thank you, Mr. Chairman. Obviously, in light of
the upcoming election cycle relating to the Federal Elections
Commission, there certainly is a great deal of interest in many
of our minds. I want to thank you certainly for holding this
hearing on such a timely matter, and I want to thank our
esteemed panelists and the witnesses for their participation
and the insights they will share with us.
Recently, as you have noted, the FEC responded to requests
for copies of transcripts of those deposed by the FEC. While
this policy change is certainly a step in the right direction,
it is only a small step. I believe a giant leap forward is
needed to bring some clarity to our election guidelines. At
issue today is how the FEC responds to enforcement issues. Yet
it is not only its response that warrants discussion, but also
the confusing interpretations and the lack of clarity about the
Federal election guidelines that must be addressed as well.
These issues are of great concern not only to those who are
inspired to run for political office, but also those who
already hold such office.
As the Chairman points out, we recognize clearly the
difficulty of the task and the awesome responsibility and job
that members of the Federal Election Commission have, and
appreciate your hard work. And I hope you further appreciate
the need, especially amongst Members who we talk to on a daily
basis, treasurers of committee, people who--do not possess the
same legal minds and background, who are anxious and earnest to
be involved in our political process, yet look at some of the
laws associated with us and are sometimes intimidated by them.
So I thank the Chairman again for providing the opportunity
for us to have the Commission enlighten us and to bring greater
clarity and more light to these important issues, especially in
lieu of the landmark legislation that was passed in this body
just last year, and certainly that has the interest of a number
of our colleagues. I spoke with Mr. Meehan earlier today, who
shares a number of concerns as they relate to making sure that
we go forward with the reforms of the landmark legislation that
was passed last year.
And with that, Mr. Chairman, I yield back the balance of my
time.
[The statement of Mr. Larson follows:]
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The Chairman. I want to thank our Ranking Member.
Just as a footnote, too, this doesn't just provide some
type of clarity and service to incumbents, I think actually
what you do is very, very important to the challengers to
Members of the House. After all, if you are an incumbent and
you have a campaign account and you are raising money, you can
have accountants, people that are challenging and may not have
those economic resources. As I warn them these days, they are
going to have be very, very careful and that is why clarity is
going to be important. Otherwise, I tell them, they need to
hire an accountant, an attorney, and a bail bondsman maybe, in
order to run for Congress. So the clarity I think is going to
be very important for the challengers, frankly, probably more
so even than the incumbents.
And, Mr. Linder, do you have a statement? Mr. Brady?
With that, we will go ahead and commence with testimony
from our witnesses. And we are honored today to have a number
of distinguished individuals testifying before the committee.
On our first panel we will hear from Commissioner Ellen
Weintraub, the current Chair of the FEC, and Commissioner
Bradley A. Smith, the current Vice Chair of the FEC.
STATEMENTS OF ELLEN L. WEINTRAUB, CHAIR, FEDERAL ELECTION
COMMISSION; AND BRADLEY A. SMITH, VICE CHAIRMAN, FEDERAL
ELECTION COMMISSION
The Chairman. And Commissioner Weintraub, we will begin
with you. Thank you.
STATEMENT OF ELLEN L. WEINTRAUB
Ms. Weintraub. Good afternoon, Mr. Chairman and members of
the committee, and thank you for inviting me here today. As a
former House staffer, it is always a pleasure to be back on the
Hill and particularly to be here since, when I was on the Hill,
I worked at the House Ethics Committee and had many, many
conversations and contacts with the staff of the House
Administration Committee in my time here.
I am pleased to appear before you to discuss the Federal
Election Commission's enforcement procedures. As someone who
practiced election law before joining the Commission last
December, I am particularly interested in seeing that the
Commission enforces the law fairly and efficiently. I had the
good fortune of having arrived at the Commission at a time when
there was a great deal of interest on the parts of
commissioners, agency staff, and those who practice before the
Commission in improving the enforcement process.
I was therefore happy to convene an unusual hearing on June
11 of this year, focusing on the Commission's enforcement
procedures. We invited the regulated and reform communities in
to critique our performance and offer suggestions on how we can
improve. I am not aware of other agencies so frankly inviting
criticism in this way, and I think it is a tribute to our
general counsel and his staff that all of the testimony was
received without defensiveness and with an open mind. This
reflects our current general counsel's enforcement philosophy
that the investigative process is not an adversary proceeding
and that his primary responsibility in that process is to
provide the Commission with objective recommendations based on
a fair reading of the record and careful, thorough
consideration of the issues.
The Commission received a number of thoughtful, sensible
suggestions, both in writing and in oral testimony. We may not
adopt every suggestion that has been made, but all of the
testimony is being given serious consideration. At the hearing
we discussed such topics as the timeliness of investigations,
an area of particular concern to me as a former practitioner--
and any of my enforcement staff can tell you that I am just a
demon on the subject whenever I feelthere is unnecessary delay
in the process--whether the Commission should adopt a publicly
available civil penalty schedule, which I personally favor and I think
would really enhance the regulated community sense of the fairness of
the process; the appropriate scope of treasurer liability; the method
by which respondents are identified; the agency's discovery practices;
and concerns about the statutory trigger for initiating an
investigation, which is currently a finding by the Commission that
there is ``reason to believe'' that the law has been violated.
Although I do not share all of Vice Chairman Smith's views,
I join him in urging you to consider amending the language of
the statute so that the trigger for an investigation would be a
Commission finding not of reason to believe that the law has
been violated, but of reason to investigate whether the law has
been violated, which would more accurately reflect the status
of our knowledge at that preliminary stage and not create a
misleading appearance as to what the Commission has actually
found at that point.
In response to that hearing, the Commission has already
made several modifications to its enforcement procedures.
Witnesses are now given access to their deposition transcripts.
The Office of General Counsel is currently drafting
recommendations for changing our practices with respect to
naming treasurers as respondents. Our staff is developing new
language for our confidentiality advisement to clarify that
there are no statutory restrictions on witnesses' cooperation
with respondents' counsel. We are developing a new policy on
sua sponte submissions. The Commission is implementing a
variety of internal management controls to speed the
disposition of cases, and we are also on track to have the
public records for closed Matters Under Review, what we call
MURs, available on the FEC's Web site by the end of the year.
We won't have all of the MURs for all time up, but we will have
the current election cycle up and we will continue to work to
build that database so that anybody, anywhere in the country,
will have access to these historical precedents that now are
currently only available if you come into the office. It is my
personal belief that increased efficiency and increased
transparency will go a long way towards alleviating any
remaining concerns of the regulated community about the
agency's enforcement practices.
Now is an ideal time for the Commission to make as much
headway as possible on these issues as we await the Supreme
Court's opinion on the constitutionality of the bipartisan
Campaign Reform Act. We appreciate the interest that the House
Administration Committee has shown in the FEC's enforcement
procedures, and of course I would be happy to answer any
questions that you have.
The Chairman. I want to thank Chairwoman Weintraub for your
testimony.
[The statement of Ms. Weintraub follows:]
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The Chairman. And we will move on now to Commissioner
Smith.
STATEMENT OF BRADLEY A. SMITH
Mr. Smith. Thank you, Mr. Chairman, Congressman Larson, and
members of the committee. I will avoid repeating things that
the Chair has said, but I will note that I am in agreement with
virtually all and perhaps all of what she said. Perhaps I
didn't pay quite enough attention to know if it is absolutely
all.
I want to start by stressing one point. It is sometimes
suggested that the Commission need not concern itself with due
process of respondents because, in fact, if respondents refuse
to pay a fine assessed by the Commission, the Commission must
take them to court where the Commission is the plaintiff and
bears the burden of proof, and there they can get the due
process to which they are entitled.
I hope that people would instinctively feel that that seems
an incorrect way for a government agency to operate, but I
would further point out that that simply does not reflect the
reality of the Commission. Twenty years ago the chairman of the
Section on Administrative Law of the ABA appeared before this
same committee and noted that the respondents before the
Commission are denied many basic due process rights. And while
many of those procedures have changed, some have not. And the
ABA at that time noted that the Commission has, quote, de facto
adjudicative phases and functions. And that is the truth. In
fact, 99 percent of all cases before the FEC and over 96
percent of those in which we find a violation are adjudicated
without going to court. So truly the FEC is where cases end,
not where they begin, and thus process is particularly
important.
The Chair has noted that progress is being made, that there
is a new climate at the FEC which I think is beneficial. I
would also highlight additionally that we have created
programs. The administrative fines program created by Congress
pursuant to an FEC recommendation, the alternative dispute
resolution program created by the Commission, have helped to
speed the handling of a large number of matters and I think
have been very positively received by all segments of the
public.
Additionally, I agree that we have an excellent management
team in place. Our general counsel, Larry Norton, deputy
general counsel, Jim Kahl, associate general counsel for
enforcement, Rhonda Vosdingh, have all been in their positions
only 25 months or less, and they are working to implement a
number of managerial changes that improve our handling of
complaints. For example, to lend a few facts to what the Chair
has already pointed out, since 2000 the number of inactive
cases sitting at the Commission on a monthly average has
declined from 98 to 57. The number of cases dismissed as stale,
in other words simply dismissed because we didn't get to them,
has dropped by 92 percent. The median time to conclusion of a
case has dropped by 28 percent. So I think the Commission is
making progress.
Chair Weintraub has also mentioned a number of things that
are being changed: the ability to get your own deposition, and
hopefully very soon we will see a new confidentiality statement
that will resolve those concerns; new policy statements on
treasurer liability and sua sponte submissions. I think there
are some other areas of process that need to be considered and
the Chair has mentioned one, changing the RTB terminology. I
think that could be done without a statutory change, but a
statutory change would certainly clarify that.
Additionally, there is no right to a hearing before the
Commission, as Chairman Ney mentioned. And I think this is
something that really ought to be considered, and the Congress
may want to consider whether it should be done by statute. In
fact, our counsel's people come up to the table and they are
present at the hearing room to argue the position of the
counsel, which in this scenario is that the Commission should
find probable cause. It seems odd, then, that there is no right
for the opposing counsel to be present to make the argument.
And while I think people from the counsel's office make an
honest, fair, professional attempt to present the case and its
weaknesses, human nature tells us that there are different
incentives that someone who has recommended that the Commission
find probable cause may find it very difficult to turn around
and at the table adequately represent the interest of the
respondent.
A second issue that I think is very important is access to
the documents, depositions and interrogatories, that are
produced during a hearing. Your lawyers or the lawyers of
anybody who appears before the Commission have no right to see
these documents. They do not get to see these investigatory
documents even at the stage at which we are finding probable
cause. At that stage, we are clearly in an adjudicatory mode
and I think it is very important that someone see these.
Defendants see things differently than our own lawyers. So what
our own lawyers think is relevant may not be what the
defendants think is relevant, and I think that is something
that very definitely needs to be reviewed.
Additionally, there are areas that Congress might want to
look at. It would be helpful to have some guidance as to what
should be made public, and I think you will hear witnesses
later complain about the Commission's past policies of making
information public.
And in my last few seconds I will note as well, I think in
the end, the most important thing for Congress is to make clear
that it does view process as important at the Commission. I
think most of these changes can be made at the Commission
level, but some expression that that is the desire of Congress
and that there is this type of oversight I think is very
beneficial. Thank you.
[The statement of Mr. Smith follows:]
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The Chairman. I want to thank you, Commissioner Smith and
Chair Weintraub, for your testimony. I also, before I ask a
question, wanted to also make a comment. I think you have--your
information specialists I think are tremendous. And I
personally have called on questions that we have, which is the
way you should do it before you expend funds. Whether you give
your name or you don't give your name, it is irrelevant on how
fast the call is answered. I think they have done a good job.
They get back to you. I know you are probably getting thousands
of calls, but I just want to tell you I think the information
specialists have really done a pretty good job.
Ms. Weintraub. I think so, too.
The Chairman. Thanks. The question I have is the outlines
of the FEC enforcement process are set forth in the act. How
much discretion and authority do you have to modify its current
enforcement procedures? We can start with either one.
Ms. Weintraub. I think that we have a great deal of
flexibility in modifying our enforcement procedures. It is like
everything else that happens at the Commission, it requires
four votes.
I do want to say that I respect everyone's concerns about
the due process that is afforded to people at the Commission. I
have a different perspective from the Vice Chairman on that. I
am very concerned that affording the kind of hearing that he is
talking about could bog down the process. We are potentially
talking about an awful lot of hearings which would slow down
the process considerably. It would force our staff to take
their time away from processing more cases to preparing for the
hearings. And I am not sure that we would actually gain that
much at the end of the process. I know lawyers would feel
better about having an opportunity to come in, but I think it
would also exacerbate the difference between the savvy
Washington insiders and the people who are out in the
heartlands, who wouldn't know enough to hire some of the fine
counsel that are sitting behind me today to come in and
represent them.
The Chairman. Can I ask you one question? Not to interrupt,
but from your opinion having stated that, is it a financial
consideration? In other words, if there were more finances
available, would it be a good thing to do, or it goes beyond
that with you?
Ms. Weintraub. I just don't think that it is--I suppose
more finances would help. Then we would have more staff. But I
don't see it primarily as a financial matter. The practices
that the Commission follows are consistent and, in fact, afford
more rights to respondents, more opportunities to respond than
other similar agencies. We have looked at the practices at the
SEC and the FTC and the CFTC, and none of those agencies offer
the kind of opportunities that we do. Respondents receive a
copy of the complaint and they get an opportunity to respond to
that. Then if the Commission finds reason to believe, we open
an investigation, the respondents receive a detailed statement
of the factual and legal basis for the investigation and they
again have a chance to respond to that. And if the general
counsel reaches the point where he recommends that the
Commission find probable cause, respondents again receive a
brief, setting out all of the arguments and they have a chance
to respond to that.
And I think that it is very important to correct the
impression that the counsel's office functions as a prosecutor.
There are many, many times when the counsel comes to us and
says ``don't go forward.'' We do not think there is reason to
investigate. We do not think there is reason to find probable
cause here at the end of an investigation. I think that the
notion that we have a bunch of prosecutors who are out to get
people fundamentally misapprehends what happens at the agency.
In terms of the document production, again, it would be a
cumbersome process. We would have to prepare confidentiality
logs. We would have arguments over attorney-client privilege.
We would then have to be litigating over that, which again
would slow down the process. And I am very concerned about the
pace at which these cases proceed as it is. Again, I think that
all of these things would give a big advantage to the savvy
Washington insiders who would have access and knowledge of who
to hire to go in there and represent them, whereas the people
out in the heartlands who perhaps would not have the resources
or the sophistication to hire those kinds of lawyers or to come
in and examine the documents would be disadvantaged.
The Chairman. Do you think that the general counsel should
have more prosecutorial powers?
Ms. Weintraub. I don't think it is a prosecutorial role. We
are an administrative agency. I don't think he is looking to
prosecute people.
The Chairman. Mr. Smith.
Mr. Smith. Mr. Chairman, if I may add a few comments? I
think this shows why some congressional direction as to how
important you feel these kinds of due process rights are would
be helpful. I think that if you--when the comparison is made to
other agencies, that is made on the basis of generally what
rights the person has before the case goes before an
administrative law judge or before the agency otherwise is
launching an adjudicatory suit; in other words there is not
such a lengthy investigatory process. And this is the point I
attempted to emphasize at the beginning, is that the practical
reality is the Commission is adjudicating cases. We are the
final stopping point.
Now, there are reasons, for example, why we might limit
hearings. For example, people in courts are not entitled to
hearings on absolutely everything. You can't demand a jury
trial for your speeding offense generally, and so on. But
certainly I think that we would have the flexibility, I think
the Commission has it, but again Congress could direct it or at
least give us directions to have at least some hearings where,
for example, the case is knowing and willful and therefore
potentially could lead to a criminal investigation, or where
the violation exceeds a particular amount. Criteria can be
developed.
Similarly, on the production of documents as it stands now,
people are not allowed to see even exculpatory information,
information that we uncover that might tend to show that they
are not guilty of some type of violation. And I think to most
lawyers' ears, that instinctively just sends off dozens of red
flags. Would there be some added difficulty for the Commission?
Yes. But this is something that prosecutors in various agencies
in the government live with all the time. In fact, in my mind
it is an argument for not only giving exculpatory information,
but for essentially giving all of the information that is
uncovered in the investigation at the probable cause stage.
We have--back to the issue of oral hearings, we have oral
hearingsunder title 26 when we handle repayments for public
funds in the Presidential elections. I think all of us find those oral
hearings to be extremely helpful on the Commission, and I have found
when we have had those hearing the counsel and being able to ask
questions directly about interpretations of the fact affect things. The
counsel is not a prosecutor. The counsel is put in a difficult
position. But it is worth noting that when we had our hearing on June
11, the agency's prior general counsel of 14 years emphasized that we
were exactly a prosecutorial body and he was a prosecutor.
So you see that there are different views here and the
views that hold sway now may not hold sway in the future, and
that is why it is worth it to institutionalize some of these
problems.
Finally, whether the counsel views himself as a prosecutor
or not, as I say, it is simply human nature. Yes, the counsel
also recommends that we not go forward with a case; but when
the counsel recommends that we do go forward, human nature
tells us that when we have that meeting and the counsel is
sitting at the table--and we sit at a table much as you do, and
the counsel sits at the end of that table with his staff and
participates in the discussion and the debate--human nature
tells us that he is not going to represent the interest of the
defendant the same way the defendant would. No matter how
competent, no matter how professional the lawyers there are,
they have made already their finding and recommendation and
there is going to be a human nature tendency to defend that.
The Chairman. It raises two more questions. Some of the
answers. Under the current law, could the FEC alter its
enforcement procedures to allow for oral arguments? Can it do
that?
Ms. Weintraub. Yes, I believe that it can.
The Chairman. And Commissioner?
Mr. Smith. I agree.
The Chairman. Okay. The second--you mentioned exculpatory
evidence is withheld from respondents. What would be the
enforcement rationale for this policy to withhold?
Mr. Smith. If I may, I think there have been three that
have been offered. First--and I think all of them lack merit,
and this was discussed even 20 years ago in the ABA report--the
first is that it is necessary to protect the integrity of the
investigation, but, of course, at the probable cause stage the
investigation is concluded, so I am not sure that that holds
merit.
Second, that it is necessary under the confidentiality
clause of the statute which prohibits the fact of
investigations from being made public. But that turns the
confidentiality clause on its head. That clause is intended to
prevent candidates and campaigns and committees who have been
accused from being unfairly smeared in the press during the
pendency of the complaint. It is not intended to keep them from
getting the information they need when they need it.
Finally, the argument is that certain materials would be
privileged, but of course one would not suggest that privileged
materials would be turned over, or memoranda, to the
Commission. Rather, we are talking about the documents that are
uncovered through document requests, the interrogatories and
the deposition transcripts. And so I think that these can be
required. I think they ought to be required. It would certainly
be possible to do it with some exception that could be made
where there is a belief that revealing the information would,
for example, harm an investigation.
But I think the general rule when we are dealing with the
first amendment rights of citizens participating in politics is
that we should be aiming to give them as much process as we
possibly can that is consistent with us fulfilling our role
rather than taking the view it is much easier for us, it is
much more convenient for us, it is much less work for us if we
kind of trim that process back.
The Chairman. Thank you. Chair.
Ms. Weintraub. I think it is more than a matter of
administrative convenience. I do think that it would slow down
the process substantially. We would get bogged down in
litigation over whether we had produced every document that we
were supposed to produce. And again I think the current
situation, and it has been alluded to earlier, where cases
sometimes get resolved years after the original litigation is
filed serves no one. It doesn't serve the complainants. It
doesn't serve the respondent. It doesn't serve the regulated
community. It doesn't serve the reform community and it
certainly doesn't make the agency look very good.
So I am reluctant to engage in extended exercises that I
think will impair that important goal of getting the cases
resolved quicker.
The confidentiality concerns are not always unidimensional
because frequently we have more than one respondent. So if you
have more than one respondent and we are gathering information
from more than one respondent at the same time, each could have
confidentiality concerns about their own documents that they
didn't want to share with another respondent in the case.
And perhaps the strongest argument is that I think it is a
solution in search of a problem. Before the recent AFL-CIO case
which limited the documents that we would produce after an
investigation, the agency routinely produced everything in
their files at the conclusion of an investigation. I am not
aware of anybody ever coming forward and saying, ``Aha, I found
this document that you didn't share with me and this would have
made a difference in the resolution of my case.'' I don't think
it has ever happened. It was my experience as a practitioner
that I always felt that I knew more about the case than the FEC
lawyers did on the other side. You have the benefit when you
are representing the respondent that you have a little bit
franker access to the facts of the case. And I think there is
really no evidence that this has ever actually posed an
obstacle to anybody.
The Chairman. Thank you. Mr. Larson.
Mr. Larson. Thank you, Mr. Chairman. I want to thank the
panelists as well, Madam Chairman, Vice Chair.
I have three questions that I would like to ask. The first,
cuts right to the chase. Members of the reform community have
called for the FEC to be abolished. Many have called it the
Failure-to-Enforce Commission. They view the FEC as too lax in
its enforcement. What would be your answer to those critics?
And hasn't the present structure of three Democrats and three
Republicans, without a tie-breaking entity been problematic,
and would an odd number of commissioners serve to break that
deadlock?
Ms. Weintraub. I think that it is not true that we are the
failure-to-enforce Commission. In fact, if wewere, I think the
regulated community wouldn't be nearly so concerned about our
enforcement procedures. Our penalties have been increasing in amount
and in frequency over the last few years, and I think that it is really
a misnomer entirely.
As to the question of deadlock in the proposal to abolish
the agency and substitute one with an odd number of
commissioners, I am very sympathetic to the concerns of the
reform community when we have a deadlock situation. I know it
is personally very frustrating to me when this happens, but it
doesn't happen very often. Our staff did a study and they came
up with a figure of 3 percent of all the decisions resulted in
a 3-3 split. So it is not a problem that comes up on a daily
basis. Usually we work to find common grounds. And usually we
find it. As I said, it doesn't happen all the time. But when it
does, it is--you know, it is frustrating, but I think we create
a larger problem by having an odd number of commissioners.
Right now there are three Democrats and three Republicans. If
we had an odd number of commissioners, there would be either
more Republicans than Democrats or vice versa. And I think that
that would create a very, very dangerous situation when we are
talking about people who supervise the political process and
look at campaigns.
If it is true, as the proponents of this proposal suggest,
that we vote on party lines all the time, then creating a
situation where there are more of one party than the other
would be extremely dangerous to the party in the minority. I
think that there are current tendencies to avoid deadlock, we
wouldn't have the same brakes on because there wouldn't be any
need to try and work together if you knew that you could just
roll the other side any time. So I sympathetic to the concerns.
I understand where they are coming from, and I know they are
very sincerely held, but I am not in favor of that proposal.
Mr. Smith. If I can add briefly, and I think one thing to
note, you see that we exchange our views pretty strongly and we
are not afraid to do that. But the fact is that shouldn't
overshadow the fact that on the majority of the things we tend
to be in agreement that we are talking about today, and this is
one of those again.
I would add just a couple of points on the deadlocks. Not
only as the Chair says is the percentage of deadlock votes, or
3-3 votes would be a better way to put it, very very small; a
deadlock is not to say that the Commission did not decide the
issue. It decides the issue and in the vast majority of cases
it decides it as clearly as the vote. In other words, if the
Commission votes 3 to 3 not to pursue a violation, that is as
final a decision as a vote 5 to 1 not to pursue a violation. So
I think far too much can be made of that issue. Sometimes I
have heard it said, well, the Commission deadlocks on important
votes. But when you actually ask what are important votes, I
remember some of the ones that I have seen cited. One was the
Commission split 3 to 3 on whether it should file an amicus
brief in Federal court on a case involving State law. I don't
see that as a really important issue. And if that is the best
that people can come up with, I suggest that this is not really
as great a problem as is suggested.
Also, when we talk about even or odd number members of the
Commission, the one other possibility that the Chair did not
mention would be to have an independent designated. I just know
that that does occur in some States and I don't think that it
really makes any difference. You still have the same problem.
And of course the fights over who that independent is become
fierce because, as we know, there are independents who almost
always vote Republican and there are independents who almost
always vote Democratic. And it is a little facile to suggest
that that would solve the problem.
Mr. Larson. As a follow-up to that question, what is your
view of the legislation that Shays-Meehan, H.R. 2709,
introduced calling for a new agency? Their agency would be the
Federal Election Administration, the FEA, replacing the Federal
Election Commission, with enhanced authority to enforce Federal
campaign finances laws. Are you familiar with their proposal?
Ms. Weintraub. I am. And that is basically what I was
talking about when I talked about the proposal to avoid the 3-3
split by having an odd number of commissioners. I think that is
the heart of the proposal, and I think it is also its greatest
weakness.
Mr. Smith. If I may add just a bit. I am not familiar with
all the details of the proposal, but I have written an article
which is cited in my testimony, entitled ``The Toothless
Anaconda'' actually, which discusses--this was written before
this bill was introduced, but it essentially discusses the same
type of proposals and I think explains at length why the
Commission really wouldn't solve such problems that are alleged
to exist.
I would also note in terms of lax enforcement, in my
prepared testimony which I have submitted, I cite a number of
recent cases. It is worth noting in the last year the
Commission has assessed in one case a fine of over $800,000. In
another case we fined a sitting Congressman over $200,000 for
taking too much money from his parents, not the most nefarious
violation that one could ever imagine and not something that I
think speaks of lax enforcement.
Mr. Larson. Some groups, the Campaign Finance Institute,
Common Cause, Alliance for Better Campaigns, are endorsing a
fix to the Presidential public finance system that if left in
the current state will not survive the 2008 election cycle.
What is your feeling on that? And should these proposals
include congressional races? And what is your opinion in
general on our public financing of campaigns and the extension
of those to congressional races?
Ms. Weintraub. I am not fluent in all of the details of the
proposal that you allude to. I am familiar with this in its
basic outlines, and I will add that a couple of our colleagues,
Commissioners Thomas and Toner, put forth another proposal to
try and fix the Presidential financing system. I think both of
these proposals go towards the same end of getting more money
in the system, getting it to candidates earlier, and making it
a more attractive package so that more people will want to
participate rather than opt out of the system.
I am in favor of either of those proposals. Whatever could
get the votes I would be in favor of it. In terms of extending
it to congressional races, I have to say, frankly, I just don't
see any appetite out there for the kind of investment that that
would require of public dollars. I might in a hypothetical
world say that would be a good idea, but I just don't see that
there is much support for it out there, given how vastly
expensive it would be.
Mr. Larson. Mr. Smith.
Mr. Smith. I really have nothing to add. I would tend to
agree with that. I think if Congress were going toconsider
reform of the Presidential system, I think that the Toner-Thomas
proposals probably make sense. My general view is those proposals do
ask for a considerable added sum to be spent on government campaigns,
government financed campaigns, and I am just not sure that in a time
where people keep talking about the need to get the budget under
control and pay for other things, prescription drug benefits and
antiterrorism and numerous other things, that that is where the public
really wants to see its money spent. But that is a political judgment
that is your area of competence where the public wants its money spent,
not mine.
If you were looking for something on the Presidential
system, I think that would be a good place to start. I do note
that of the public, only a very small percentage check the box
on tax forms now, and I will say that having studied elections
for a long time as an academic, I have not really seen the
clear, concrete benefits from government financing systems.
That is, I don't think people look at Arizona and say that
Arizona with its government financing is inherently governed
better than New Mexico with its private financing and unlimited
corporate contributions or that other States, those kind of
comparisons can be drawn. But I think really that becomes more
of a political issue for Members of Congress, and you may have
a very different view as to the possible benefits.
Mr. Larson. Is it a political issue or a philosophical
issue?
Mr. Smith. Well, it is political, philosophical. I assume
that your politics are driven by your philosophy of government.
Mr. Larson. Well, I have always noticed that people who
aren't in elective office refer to them as political issues. We
think sometimes that heads of commissions should look at this
philosophically and express their opinion as well, so that we
are better informed of your views on these issues.
Mr. Smith. Well, I mean my view would be--and I have
written again, articles on it which I would be happy to call
the Commission's attention to--my general sense is that there
are potential benefits.
Mr. Larson. I am interested in the toothless Anaconda, you
know, because that sounds like something that is going to
squeeze the death out of you but then not eat you.
Mr. Smith. That is sort of the idea. I would say on the
government financing system, I think that a system potentially
could be designed which would have certain benefits. But my
sense is that that is more of a theoretical design; that in
practice, government finance campaigns almost immediately tend
to become outdated. They can't keep up with the changes in
campaigns, in our system, where we have a robust first
amendment and people are going to participate on their own. You
can't really stop outside groups from participating so you
can't stop the concerns about corruption directly by simply
having the candidates themselves be government financed. You
can't address the--all of the concerns about equality because
there will still be millionaires out there spending money on
their own, doing things like that. So that is how I tend to
ultimately to look at the issue. So you asked, and that is sort
of my view on it.
Mr. Larson. I am happy to hear it. Thank you.
Mr. Smith. Thank you.
The Chairman. Just a question of the Ranking Member. The
new bill, the FEA, what does that stand for?
Mr. Larson. It stands for the Federal Elections
Administration.
The Chairman. I heard the term Federal Execution
Administration. That is why I was just kind of curious.
Mr. Ehlers.
Mr. Ehlers. Thank you, Mr. Chairman.
Mr. Larson. Don't tell Mr. Shays I said that.
The Chairman. I have already informed him.
Mr. Ehlers. Fortunately we don't have capital punishment in
Michigan, except by the Federal Government. Your comment about
Arizona reminded me, I was out there for a hearing on elections
issues at one point, shortly after that law passed, and the
advocates there testified very strongly in favor of public
financing. But it turns out most people don't know that over 50
percent of the campaign for public financing was financed by
one wealthy individual and the proposal definitely would not
have passed without that large contribution. So I thought that
was an interesting side light.
I do want to thank the Commission, as the Chairman did, for
their helpfulness. And particularly my campaign staff. I have
told them definitely we are never going to do anything wrong,
and don't ever make me hire an attorney. And so far they have
succeeded. But they check with you frequently on questions of
interpretation and always have been given good responses rather
rapidly, and I appreciate that.
We even--my first election was a special election. We had
just a few weeks before the primary, a few weeks between the
primary and the general. The paperwork was sloppy. The reports
were inaccurate. I thought I might go to jail before I was
sworn in. But we just got a CPA and sent him down to your
headquarters here in Washington and worked through the whole
thing in 4 hours and got it straightened out, and I was very
appreciative of your staff's willingness to do that and sit
down and take that time. So I just want to say the only
experience I have had with you has been very positive.
On the proposal for the--for having an odd number
Commission, it seems to be very strange. You have to recognize
that in a political partisan situation, there are times you
simply have to have the same number on both sides. And you are
well aware of that with your experience on the so-called ethics
committee, which is Standards of Official Conduct Committee.
That would never work if we were not an even number on both
sides. So I think the FEC should remain with the same number on
both sides.
In addition to that, we have too many odd organizations in
Washington already, so clearly we don't want to have--give you
an odd number.
I have no specific questions beyond that. I just wanted to
make those observations. And thank you. Thank both of you for
your work.
Mr. Smith. Perhaps, Congressman, I could make a couple of
observations in response. First, I will just point out it is
good to hear from you, because I am a native Michiganian
myself. I remember that long Michigan debate as to whether we
are Michiganians or Michiganders.
Mr. Ehlers. We are still Michiganders.
Mr. Smith. And we were Michiganians at some point. Or maybe
not. I don't know. I was on the losing side of that one.
But one thing I would add, you mentioned I think our staff
can be very helpful, and I think one thing we do is avery good
public outreach effort to explain things. But I think it is worth it to
go back a little bit. Congressman Larson mentioned my article, ``A
Toothless Anaconda.'' that was a bit of play off the critique that the
Commission is a toothless tiger, that you don't necessarily need teeth
to kill your victims.
I think it is worth noting that I have found that while the
Commission may not be overly frightening to a lot of folks in
Washington, it can be very confusing and frightening to folks
at the grass roots. And you talk about your lawyers trying to
make sure nothing goes wrong. When you decide to run for
Congress, you get a package. If you ask the Commission what do
you need to comply with, you will get a package of materials.
And I just saw it today, and I wish I had thought of it and
brought it down. It is several pounds. I can't remember the
exact weight. But somebody had calculated the exact weight. It
totals, hundreds and hundreds if not over thousands of pages.
It is very complex.
And I find when I go to a party convention, people say,
``well what do you do?'' And I say, ``well, I am a commissioner
at the Federal Election Commission.'' And they have left the
punch bowl and are across the room before the words finish
coming out of my mouth. It can be a very frightening
organization to these types of groups. And I think that is
worth keeping in mind.
Mr. Ehlers. If I may reclaim my time. I would like to
mention that the weight of that package is probably as much our
fault as yours. And I sometimes long for the day when we simply
say, the only thing you have to do is count the money
accurately and record it all and who it came from, because we
have imposed so many different regulations on myself. I, in
fact, recall a businessman who complained to me more years
about the paperwork that we create for business. Then he ran
for office as a State legislator, and his next comment to me
was, ``You treat yourself worse than you treated us.'' we in
fact have created more paperwork for ourselves than we have for
a lot of other people. And I really decry that. I think it
should be simple and straightforward, because we want to
encourage citizens to run for public office and not discourage
them, and currently we discourage them.
Ms. Weintraub. If I might, just a brief comment also.
Speaking as somebody who used to work for the House Ethics
Committee, I find that people are extremely friendly to Federal
election commissioners by comparison. But I want to thank you
for your kind comments about our staff. I do think that the
public outreach that we do is one of the best aspects of the
agency, and the people who work in that division do a terrific
job, and in fact we routinely go around the country to try to
reach out to people. We do make it as accessible as possible
for people who are not Washington insiders.
The Chairman. Thank you. Gentlelady, Congresswoman
Millender-McDonald? Gentleman.
Mr. Brady. Just briefly. I, like my colleague, ran in a
special election and was completely confused on what I had to
do. It has been quite some time, and since then I am still
completely confused to what I have to do, and you probably have
a staff member directly assigned to me all the time, and I just
appreciate that and I thank him or her, wherever they may be.
Mr. Larson. Just a follow-up to that, because you mentioned
that you do the outreach. I am curious. How many programs do
you conduct annually for outreach? And are they in every region
of the country? And do you have the budget to accommodate that?
Ms. Weintraub. We usually do, I am going to have to give
you an approximate figure, but I can get back to you with the
exact number. But I think we probably do about half a dozen
conferences a year, some of them in Washington and some of them
around the country. Usually three of them are in other places.
This year we went to Boston, Chicago, and San Diego. San Diego
one is the one that is coming up in another couple of weeks.
And our commissioners go out to those conferences.
I have been to all of the conferences around the country
this year to do that kind of outreach and to show people that
we really do care.
Mr. Larson. What is the attendance at the conferences?
Ms. Weintraub. Could be 80 people, could be 100 people. It
is usually in that range. The first conference that we did this
year in Washington right after BCRA passed was standing room
only. There were a lot of people who wanted to come to that.
And then the staff go around and do separate conferences, just
sort of 1-day mini-conferences in different parts of the
country, and they will do maybe three or four.
Mr. Larson. Like somebody in Idaho was interested or--does
the staff go out there?
Ms. Weintraub. We don't necessarily have one in Idaho. But
we have been to Denver, we have been to Chicago, we are going
to Tampa, San Diego, Seattle, and San Francisco. We try to
cover both coasts. And then somewhere in the middle. And
somewhere in the south maybe, somewhere in the north, we try
and spread it around. I think it is really a valuable thing
that the agency does. And the feedback that I get when I go to
these conferences is that people really do appreciate our
coming out.
Mr. Larson. I think they would be extraordinarily valuable,
and to Mr. Smith's point, especially if you are in the
hinterlands, so to speak. And you receive, as Mr. Ehlers points
out, a pound of documents; that has got to be pretty
intimidating in and of itself.
The thrust of my question is do you feel that you have
enough resources? Does the Commission feel it has enough
resources to carry out its function?
Ms. Weintraub. I feel pretty comfortable that we are doing
a good job with the resources that we have. If you want to give
us more resources we would be happy to have more conferences. I
will go Idaho if you want me to.
Mr. Larson. Thank you.
The Chairman. Gentlelady.
Ms. Millender-McDonald. Thank you, Mr. Chairman, and it is
good to be here. It is good to have you here. I am sorry I had
to step out, but the floor action has us coming and going. More
going than coming.
When I left, Mr. Smith was suggesting that a lot of the
cases you have to throw out because, I guess, the time
limitations on some of the cases. And is it because of a lack
of personnel that you are having a backlog of these cases?
The other thing that I want to ask is the lacks in
enforcement, and given the structure of three Democrats, three
Republicans, who breaks the tie if there is a tie to be broken
or the deadlock or whatever? Is this composition workable?
Mr. Smith. You referred to my comments as you stepped out.
I don't recall at what point you stepped out. I had mentioned
that the Commission had substantially reduced the number of
cases that are simply not gotten to. In fact in the last fiscal
year, it was one.
Like any government agency, like any private business, like
any household, sure we could use more money. That would be
nice.
Ms. Millender-McDonald. I am not advocating on that.
Mr. Smith. Right. Particularly, I think that it would be--I
think that due process rights are important and I think that if
it is true that there is a concern that that would slow the
process, that it would be valuable to provide the resources to
provide that due process. I think that generally, though, we
have been able to cut the backlog. Not only the number of
dismissals for stale cases cut down to one in the last fiscal
year, but the time it has taken to process cases we have cut
considerably. And this week the Counsel's Office provided us
with ambitious goals on further shortening processing time. We
have been able to cut this down through good management in the
Counsel's office and through introduction of programs such as
admin fines and the alternative dispute resolution program.
So there are ways to address this beyond simply constantly
pleading for more money. And I just would say that I think we
do the best we can with the resources that we have, and we will
continue to do that. I don't think in my mind that the real
problem is that we are not getting to cases at all. It is that
cases could be sped up with our current resources and I think
we are working on that.
And then on the deadlock issue we did have a colloquy a bit
on that. And as the Chair pointed out in response to an earlier
question, we deadlock about 3 percent of the time or have 3-3
votes I prefer to say. And as I pointed out, the fact that we
tie 3-3 does not necessarily mean that the issue is not
resolved. In fact in the vast majority of cases it clearly
resolves the issue. In an enforcement matter, a 3-3 vote is
just as decisive a vote as a 6-0 vote not to go forward. It
decides the issue.
Ms. Millender-McDonald. So does it stay in its present form
when you have the 3-3? You say it is a decision nonetheless.
Which way does it go if 3 is for and 3 is opposed?
Mr. Smith. Tie goes to the defendant. The statute requires
four votes to move forward on any particular matter.
And I think that system actually has worked very well. I
find it ironic that many of the people who criticize the
Commission and criticize that structure and say they deadlock
all the time 3-3, which first is not true, those same people
when allegations are made that the Commission has been partisan
in the past would be the first to point out that well, no, the
Commission structure requires at least one Democrat to chase
any Democrat, at least one Republican to vote to chase any
Republican. They will go right back to that bipartisan
structure to defend allegations that the Commission has been
partisan or too aggressive. So I think that bipartisan
structure serves a real purpose and people who levy the
complaint know it serves a purpose. They rely on that purpose
themselves. Frankly, I think that argument is a red herring. It
is an argument that people instinctively think sounds true, but
once you know what goes on at the Commission and see the
figures, it is a red herring argument I think.
Ms. Weintraub. I do not disagree with anything that the
Vice Chairman has said on this point. I would add that it is a
misperception to think that when we walk into the room the
first thing that happens is three people vote one way and three
people vote the other way and we start dickering on who is
going to change their vote. I think that philosophical
approaches to the law more often governs than partisan
differences. Sometime we deadlock 3 to 3 and it is not along
partisan lines. Sometimes people who normally do not agree with
each other agree with each other. Sometimes I will go over and
join my Republican colleagues and sometimes I am the sole vote
and everyone is voting against me. It varies from one case to
the next.
But the fact that there are three and three of us forces us
to work together a lot more than we otherwise would. It forces
us to seek common ground.
Ms. Millender-McDonald. That is one way to look at it.
The Chairman. I know we have a second panel, but I have a
brief question. The FEC in the past has come under some debate
for designating additional respondents in a complaint that have
only the most tenuous connections to the alleged violation. And
a lot of times the individuals are not made aware of the
reasons why they have been named as a respondent. Would it
hinder your enforcement process at all for the respondents that
they be given a brief explanation as to why they have been
designated as such?
Ms. Weintraub. No, I don't think so. Usually people are
designated as respondents because they are named in the
complaint, and they may not be formally named but they are
mentioned in there somewhere and they get a copy of the
complaint, so they are on notice as to what the general basis
of it is. Sometimes we have what are called internally
generated respondents who are not necessarily named in the
complaint formally and the General Counsel's Office recommends
that we proceed against them because there is information in
the complaint that suggests they may have violated the law.
I think this is another area where the Vice Chairman and I
agree. We should be providing notice to those individuals at
some point before we make any decisions with respect to them.
And I know that the General Counsel's Office is currently
working on preparing a new policy on naming respondents which I
expect to have within a matter of weeks.
It is an area that we are well aware of and that we have
been working on. It has been a problem in the past, but I think
we are addressing it.
Mr. Smith. I would add only that I think it is being
addressed and I think we are better about not--one of my
favorite stories was we had a person file a complaint a couple
of years ago and he had worked for the campaign and had not
been paid his salary. And he was accusing the campaign of
various activities, misuse of funds and so on. But he said, ``I
keep trying to get what I am owed and they will not pay me. In
effect I was forced to make a $10,000 contribution to the
campaign.'' So we named him as a respondent for having made an
excessive contribution to the campaign because he was
complaining about not getting his salary.
I think that was an outlier even at that time, butsometimes
it shows that the process got out of hand. I think that has changed and
I think there has been a strong effort to be more careful about naming
respondents. But I think one reason this is a problem or at least
perceived as such by people who practice before us is that they do not
know how we do it. And the Commission has--you may hear in the second
panel, they talk about sort of secret procedures and so on, and there
are a lot of procedures at the Commission simply have not been
regularized or made public so the public does not understand what is
going on. And as you know, when people do not understand what is going
on, that is when they get suspicious and nervous and feel they are not
being treated fairly and that is when they feel they can't trust their
government.
We need to work on that. I think we are. I don't know
exactly what to do but I think we need to continue working
there.
The Chairman. I want to thank both the Chair and the
Commissioner. Personal note to Commissioner. I know you were
born in Michigan. You worked in Columbus, Ohio. I hope you
remember when the Buckeyes go up to Michigan pretty soon to
topple Michigan where your loyalties lie.
Mr. Smith. Are you asking me to state at this time?
The Chairman. If you would like to, which team you are
going to root for.
Mr. Smith. I will confess----
The Chairman. Thank you very much. I appreciate it. Thank
you. And we will begin with the second panel.
I want to welcome panel two. We have James Bopp, Jr.,
partner of Bopp, Coleson & Bostrom, General Counsel, James
Madison Center for Free Speech; Don McGahn, General Counsel,
National Republican Committee; Karl Sandstrom, Partner, Perkins
Coie, Former Commissioner of the FEC; and Marc Elias, Partner,
Perkins Coie.
STATEMENTS OF JAMES BOPP, JR., PARTNER, BOPP, COLESON &
BOSTROM, GENERAL COUNSEL, JAMES MADISON CENTER FOR FREE SPEECH;
DON McGAHN, GENERAL COUNSEL, NATIONAL REPUBLICAN CONGRESSIONAL
COMMITTEE; KARL SANDSTROM, PARTNER, PERKINS COIE, FORMER
COMMISSIONER, FEDERAL ELECTION COMMISSION; AND MARC ELIAS,
PARTNER, PERKINS COIE
The Chairman. We will welcome the panelists and will start
with Mr. Bopp.
STATEMENT OF JAMES BOPP, JR.
Mr. Bopp. Thank you very much, Mr. Chairman. The topic
before this committee is really an important one. The
enforcement procedures of the Federal Election Commission and
more generally, the matters that come under its jurisdiction go
to the very heart of the health of our democracy. The FEC,
unlike any other governmental agency, is charged specifically
with regulating the four indispensable democratic freedoms that
are necessary for us to conduct our representative democracy.
So not only are they charged with regulating such activities in
those circumstances in which there is a sufficiently compelling
governmental interest, but also they are active in
investigating whether or not violations have occurred of the
act.
These investigations themselves impinge, infringe, and can
violate the first amendment rights of our citizens. This is
most obvious, I think, in the fact that the FEC routinely
accumulates a lot of documents that go to the political
strategies and plans, be they legislative, campaign-related or
whatever, the disclosure of which would seriously jeopardize
the ability of those groups to conduct their first amendment-
protected activities.
Thus I view the Federal Election Commission, even though it
is not an adjudicatory agency--and shouldn't be in my
judgment--that the Federal constitutional guarantees of due
process are applicable because the activities, the matters
which are within the supervision and jurisdiction of the
Commission, go to first amendment-protected rights and how they
conduct their activities also can violate those rights. And as
a result, due process is required in order to ensure that the
citizens are protected from the government.
Now, there is another danger with the Federal Election
Commission. That would be the danger that it could be used for
partisan advantage. And I think, frankly, every campaign for
Congress, in their plan, has a chapter on when they are going
to file an FEC complaint to smear their opponent, to try to
divert their attention, to waste their resources, et cetera.
And having the Commission 3 to 3 means that it is very
difficult to use the Commission for a partisan advantage.
Secondly, the Commission is a governmental agency and
powerful governmental officials are apt to use government
agencies to chill citizens from criticizing them. So that is
also a danger.
And finally is the danger that an agency such as this would
simply become overzealous. This warning was really issued in
1980 in a second circuit case where Judge Kaufman said, quote:
This danger, that is infringement of the first amendment rights
of citizens, is especially acute when an official agency of the
government has been created to scrutinize the content of
political expression, for such bureaucracies feed upon speech
and almost inevitably come to view unrestrained expression as a
potential evil to be tamed, muzzled, or sterilized.
I would want to report to you all that in my judgment, the
Commission has fulfilled some of those fears. That is, that it
is fair to say that the Commission has engaged in a wide
variety of overenforcement, particularly against issue advocacy
speech where the Commission for 25 years, through a series of
enforcement actions and regulatory efforts, were seeking to
draw within the jurisdiction of the FEC issue advocacy by
citizen groups which the U.S. Supreme Court has said repeatedly
has the highest form of first amendment protection.
The result has been costly and intrusive investigations,
often with an eye toward shaping the law rather than pursuing
somebody who has obviously violated the law. The Christian
Coalition case which I recount is a tragic example of the
overenforcement, overinvestigation, and misuse of the agencyin
my judgment to try to impinge upon--intentionally impinge upon the
first amendment rights of citizens.
Well, this could get worse. The Bipartisan Campaign Reform
Act--I view that anachronism as saying before campaigning,
retain an attorney--would vastly increase the authority of the
Federal Election Commission to investigate first amendment-
protected activities.
So as a result, I would just mention two essential reforms
in my judgment. One is to separate the conflicting role that
the general counsel currently has between being an
investigator, a prosecutor, and a legal advisor to the agency
and the Commission.
I think that these create an inherent conflict and that
historically--I am not talking about the current general
counsel--but historically, the role that the general counsel
has assumed is one as a prosecutor, no matter what stage they
are at. And secondly, I would urge the Congress to incorporate
into the FECA the decision of the D.C. Circuit in AFL-CIO vs.
FEC which limited release of documents at case closure. I am
very concerned that--and I would commend the Commission and
this committee for their efforts that they have launched in the
self-examination and trying to, I think, address some of the
problems that the past has revealed.
The Chairman. Thank you.
[The statement of Mr. Bopp follows:]
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The Chairman. Mr. McGahn.
STATEMENT OF DON McGAHN
Mr. McGahn. Thank you, Mr. Chairman. Mr. Chairman, members
of the committee, thank you for inviting me to testify here.
The FEC enforcement process is a mystery to most people.
Believe it or not, even to some practitioners who specialize in
this area.
As has been alluded to in others' comments, I think it was
Commissioner Smith who mentioned this, there are many mystery
procedures and sort of insider things that occur. That is the
first theme I want to hit. The problem with those, even if you
eventually understand them, is that those who understand them
the quickest tend to be the ones who are the most sophisticated
actors; that is to say, incumbents or people who are political
professionals. Those who are attempting to become involved in
the political process for the first time, a volunteer
treasurer, a first-time candidate, a college student
volunteering for a campaign, are the ones most susceptible to
these procedures and with the most to lose.
This is not the sort of message we need to be sending. I
think the message needs to be more people should be involved in
politics, not less. There ought to be more people excited about
being involved in politics, not scared. Based upon my own
personal experience, I have had several clients who have run
for Congress, have made mistakes that perhaps if they had
thought about it ahead of time they maybe would not have made,
but they were mistakes and they were excellent candidates just
in the wrong election cycle or the wrong district. And there
are several that I wish would run again, but they won't because
they have gone through the FEC gauntlet. And I understand from
my other colleagues in the Bar that the same happens on the
other side of the aisle; that there are several very fine
people who want to run but really get somewhat petrified.
This week I taught a candidates school for new candidates
and I can tell you, without revealing any of my insider
baseball or whether there is something in a notebook about
filing FEC complaints during the campaign, that these
candidates are very, very worried about all the things they
read in the newspaper about criminal penalties and fines and
all sorts of things.
And any potential reforms I think flow from that premise.
Whether it is clarifying whether or not the treasurer is
liable, and when is the treasurer liable versus when the
candidate is liable, this is amorphous and I don't think there
is a clear answer to this day. What does it take to start an
investigation at the FEC? Is it reason to believe? That is the
what the law says. What does that mean? It begs the central
question, is that a reason to investigate or is that a reason
to believe that there has been a violation of law?
The notion that I do not actually feel as if you have
gotten your day in court, so to speak, as Commissioner Smith
mentioned. Many, many, many, many of the cases do not go to
litigation. They are resolved by the Commission through
conciliation, and people pay a fine which is voluntary. But in
my experience it certainly does not feel voluntary when you
look at cost of litigating the matter versus the cost of paying
the fine, which will be much less than litigating.
I do not advocate oral argument in every matter or somehow
slowing down the process any more than it can be slowed down.
But having been someone who has done criminal defense work and
has worked in a prosecutor's office and done extensive motions
practice, although it may be a cultural shock to the FEC, it is
possible to not slow down the process but still give folks a
hearing when it is warranted. I am not advocating a hearing at
all times, but it should be in the discretion of the Commission
to grant an argument at times when the case may warrant it.
Having spoken to others after certain matters haveclosed,
it seems it would have been helpful to the commissioners to have heard
from the lawyers or the respondents personally, because although they
believe that sometimes the briefing that goes on is thorough, sometimes
oral argument does bring out things that are not abundantly clear in
the paper that is presented to the Commission.
The confidentiality provision is another mystery to many
people. It is, in many instances, a sword for the Commission
and not a shield for the respondents. I believe the original
intent was to protect respondents, not to enable the Commission
to hide the ball, so to speak. If a party is deposed in a case
in which you are a respondent, you are not entitled to be there
to partake in the deposition or at least observe.
I have had at least one situation where I had a client who
had a former employee who was being deposed, and attorney-
client privileges were potentially going to arise, and I was
not allowed in the deposition to object on behalf of my client
for attorney-client privilege purposes. That is one extreme
example, but the concept of attorney-client privilege has come
up in the first panel. One of the first two panelists mentioned
it.
These are the fundamental rights protections. Whether or
not it is an adjudication or not, whether or not it is an
administrative agency or something that requires due process,
the effective result is that it is an adjudication for most,
and that therefore the protections ought to be there, and
sometimes they are not.
With that, I conclude, and look forward to answering any
questions you may have.
The Chairman. Thank you.
[The statement of Mr. McGahn follows:]
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The Chairman. Mr. Sandstrom.
STATEMENT OF KARL SANDSTROM
Mr. Sandstrom. Chairman Ney, Mr. Larson, and members of the
committee, I want to thank you for the opportunity to appear
here today. I spent 12 years of my life working as a staff
member for the Committee on House Administration. The Committee
on House Administration is the smallest committee on the Hill
and also the oldest. And the reason it is the oldest committee
is because the first thing the original Congress had to deal
with was an election matter, and it is good to see 200 years
later you are still dealing with election matters.
And in that regard, I would like to commend the committee,
because it proved last year that it was ``The Little Engine
That Could,'' and passed the Help America Vote Act. And all of
the members of this committee are be commended for the effort
you put into that. It was a tremendous service to the country.
The subject of today's hearing, the proper enforcement of
our campaign finance laws, is of increasing importance in light
of the Bipartisan Campaign Reform Act. The new law
fundamentally reshapes the enforcement landscape. Prior law
focused on regulating financial transactions, primarily the
reporting and acceptance of contributions. The new law expands
the scope of regulation to cover political communications
generally. The old law imposed liability primarily on political
committees and, to a lesser extent, on unfortunate treasurers.
The new law imposes personal liability on candidates, their
agents, and their vendors.
Under BCRA, political activity that had been the exclusive
province of State law is now subject to Federal regulation.
Lastly, BCRA places greater reliance on criminal penalties to
achieve compliance.
An unavoidable consequence of these changes is an extension
of the Federal Election Commission enforcement jurisdiction.
The demand placed on the Commission to enforce the law over a
substantial and large swath of political activity and to do so
in a constitutionally sensitive manner is potentially crushing.
It will strain the Commission's resources and test its
judgment. The Commission's task is not made easier by the fact
that it operates in a politically charged environment.
Enforcing campaign finance laws is a political act. Complaints
are filed for political reasons. The resolution of a complaint
has political consequences. This does not mean that the FEC
cannot be fair and impartial in enforcing the law, but quite
the opposite; it means that the FEC must be. Commissioners must
be willing to take fire from the left and the right, from
Democrats and Republicans and from reformers and from skeptics.
Importantly, the process must be fair and heedful of what
is being regulated. Enforcement insensitive to the political
arena in which it operates exacts a high price. Political
participants can be unjustifiably tarred, political activity
can be chilled, election outcomes can be affected.
The first obligation of the Commission is to tell the
public what the law is. Clear rules must precede enforcement.
Enforcement proceedings should not be the occasion for the
Commission to articulate how it intends to enforce the law.
Ambiguity in the law shouldn't be resolved by enforcement. When
it comes to the regulation of politics, fair notice is
essential.
It is far too difficult to get people to participate in
politics. Uncertainty in the law dampens participation. Vague
standards are not the only enemy of participation. Strident
enforcement is also a culprit. Harsh penalties for inadvertent
violations assure that the uncomprehending violator will
abandon politics. Drawn-out investigations sideline even the
wrongly accused. Any regime of campaign finance law that relies
primarily on the threat of severe penalties ultimately will
fail. Voluntary compliance and correction must be the goal.
In recent years, the Commission has made great strides
inimplementing alternatives to the traditional enforcement process. The
administrative fine program for late filers has improved the timeliness
of reports by referring enforcement resources on more important
matters. The alternative dispute resolution process allows inadvertent,
unaggravated violations to be resolved with expenditure of no
investigatory resources.
The Commission's willingness to dismiss matters because the
complaint fails to state a violation of law has allowed the
Commission to timely respond to frivolous, politically inspired
complaints. All these changes should be applauded and
expansions of these efforts should be encouraged.
Because of the enhancement of criminal penalties under
BCRA, what, other than misdemeanors, are now felonies? The
Commission will need to revisit its working relationship with
the Department of Justice. All indications are that the
Department of Justice is going to be less willing to defer to
the Commission. The number of concurrent investigations is
undoubtedly going to increase. This is going to prove to be a
challenge of civil enforcement.
Subjects, targets, and even witnesses in a criminal
investigation will be less likely to cooperate with the
Commission until the criminal matter is resolved.
My colleague, Mark Elias, has addressed a number of
specifics of the enforcement process that could be improved.
The Commission has been open to change. Listening to the
concerns of those who practice before it, and generally to the
public, is not a sign of weakness but of strength. You cannot
effectively regulate taverns from a monastery. You cannot
regulate politics without a knowledge of how it is practiced.
The Commission needs to reach out, and unless it does it will
be unable to discharge the immense responsibility that the new
law imposes upon it.
The Chairman. Thank you.
[The statement of Mr. Sandstrom follows:]
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The Chairman. Mr. Elias.
STATEMENT OF MARC ELIAS
Mr. Elias. Thank you, Chairman Ney, Congressman Larson, and
members of the committee. I want to thank you for the
opportunity to appear and testify before you today.
The issue you consider, the Federal Election Commission's
enforcement procedures, is an important one not only for the
agency, but for the regulated community as well.
For the last 10 years as an attorney at Perkins Coie, I
have represented officeholders, candidates, party committees,
PACs, and individuals all in matters before the Federal
Election Commission. My firm, as some of you on the committee
know, represents both the Democratic Senatorial and Democratic
Congressional Campaign Committees. I have seen the good and the
bad in the FEC's process. I have filed complaints against my
clients' adversaries and defended more than my fair share filed
against my clients.
I have conciliated FEC complaints, what I refer to as MURs,
and have litigated against the agency in Federal court when the
process failed. On a handful of occasions I have sued the FEC
when the agency has failed to act on a complaint that my client
filed. Several months ago I had the opportunity to testify
before the FEC itself regarding this same topic.
I think it is important to recognize at the outset the
commissioners' initiative in seeking comments from the
regulated community about how the enforcement process works and
how it could be improved.
I have been impressed by the Commission's focus on this
subject and the steps it has taken towards reform so far. In
particular, the Commission and its general counsel deserve
credit for reforms and changing the rule on access to
deposition transcripts. While only one change, it is an
important step towards a more transparent and open enforcement
regime.
During the FEC's review, it sought comments on specific
topics. I would ask the committee to allow me to submit for the
record the written comments my firm submitted in connection
with the FEC's hearing.
For the sake of brevity I would like to amplify on a few of
these. Before I do, I would also like to say that my partner,
Bob Bauer, was out of town today or otherwise would have liked
to have been here as well. And the comments I offer reflect his
thoughts on this as well.
First, I would like to stress how important time is in the
enforcement process. In nearly every matter, clients are
acutely aware of how long the FEC takes to review and dispose
of enforcement matters. Several years ago I litigated a case
against the FEC over its failure to act in a timely fashion on
a complaint that had been filed by the Democratic Senatorial
Campaign Committee. Just by way of background, the complaint
was filed shortly before the special runoff election. Then-
Senator Wyche Fowler was in a runoff against his challenger
Paul Coverdell. That complaint was filed prior to the 1992
cycle.
In 1997 we were in Federal court with the FEC, arguing over
why a complaint that the FEC itself ranked in its top tier of
most important complaints had still not been resolved. The FEC
at the time acknowledged that it would not resolve the case
within the 5-year statute of limitations and offered the court
an estimate of between 3.3 and 4.6 years to resolve a typical
complaint.
From the respondent's perspective, the length of the
typical MUR means that a quick vindication is almost never
possible. A complaint facing a newly filed MUR is told that it
will be years before the matter is resolved and indeed it may
be more than a year before anyone at the agency even reads the
complaint to see whether it has any merit.
Things are no better for the party filing the complaint.
From the perspective of the complaining party, the likely delay
facing them is simply disheartening. The enforcement process
offers no real avenues for addressing harms occurringin
realtime during hotly contested elections. The result is that all too
often the enforcement process becomes a burden to a defunct campaign
who has alleged the offending conduct is years in the past.
More than once I have had to explain to a client that,
despite the fact that the campaign was years behind them and
that there was no money left in the campaign or prospect to
raise any more, they could not terminate their campaign because
the FEC had not yet acted on a MUR.
I would also like to highlight the uncertain role that
campaign treasurers face in the current enforcement process. As
members of this committee know, every political committee must
have a treasurer. In fact, he or she is the only statutory
officer of the committee. While treasurers are often nothing
more than symbolic figures in a campaign, they learn in an
enforcement process they, and they alone, will be named as a
respondent. Even when the conduct at issue has nothing to do
with reporting or compliance, the treasurer is named in the
enforcement process and any resulting litigation.
For a significant number of individuals, this has become
unacceptable and finding campaign treasurers is increasingly
difficult. Some campaign treasurers simply refuse to allow
campaigns to settle matters with the FEC because they will be
named and are afraid of the stigma that will be associated with
it. The current practice blurs the distinction between those
situations where the Commission intends to impose individual
liability for fines and penalties upon a treasurer and those
circumstances where the treasurer is simply named in his or her
official capacity.
Finally, I just want to say a brief word about how
respondents are named in enforcement matters. For years the FEC
has maintained what I describe as a curious process for naming
respondents, which I noticed when I was a young associate, by
the fact I would file FEC complaints against adversaries--and,
I will acknowledge, typically Republicans--and I learn years
later that a whole group of people who I had never contemplated
to be respondents had wound up having to respond to the FEC
complaint. I think Commissioner Smith noted in his written
testimony that I over time developed a theory that the FEC
simply scanned all incoming complaints for proper nouns and
simply all proper nouns became respondents in the FEC
complaint. I am relieved to hear that that is not as simplistic
a process as I thought, although I remain puzzled by the
criteria that are used.
I would like only to add that the burden and time
associated with responding to complaints when you are
representing someone who was not even named by the complaining
party is worth review and consideration.
Again I want to thank you for having me here today, and I
would be happy to answer any questions.
[The statement of Mr. Elias follows:]
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The Chairman. I want to thank the panel for your testimony.
I wanted to ask about what your thoughts were briefly on the
possibility of being able to withdraw a complaint. And this has
been raised several times, I know, before different people.
Somebody files a complaint, it goes on and on. They take a look
at it and say, I was wrong, I shouldn't have filed it. I guess
the backup question would be, would they pay some type of
penalty or legal fees or something of that nature? Do you have
any thoughts on that? Because you cannot withdraw a complaint
once it begins, as I understand it. Yes?
Mr. Sandstrom. It would be a difficult choice to allow
someone to withdraw a complaint, where the Commission has
confirmed there has been a violation of law. If the Commission
has actually begun an investigation, has determined that there
is likelihood of a violation, the Commission can hardly
acquiesce in that violation.
The Chairman. I wonder if the Commission has not determined
it, it just begins and the person says, I did it, I was wrong.
Mr. Sandstrom. Certainly I think the Commission could
entertain that, but you would have to be concerned whether
somebody had been politically pressured to withdraw a
legitimate complaint. That complaint, once it is out there, has
made that person a target and they may have wanted to relieve
the political pressure that has been brought upon them.
The Chairman. Anybody else that wants to answer these, just
feel free.
Mr. McGahn. The notion of withdrawing a complaint, I agree
with Mr. Sandstrom in what he said, is difficult once the
agency makes a finding that there is some violation.
The Chairman. What about pre-finding?
Mr. McGahn. That is the point I want to address. First of
all, the complaints are filed under oath, so the person filing
the complaint does have to go under oath and have a notary
print the complaint and file it. And so there is some liability
to the person filing it if they file a false complaint.
However, if the person files what he or she thinks is a
truthful complaint--let's say it is based on information and
belief, which is an acceptable standard to file a complaint--
but then discovers that they were just wrong, based on new
information, I am not aware of any formal procedure that would
allow that person to withdraw the complaint or otherwise
correct it.
I have had this situation arise. The advice is, if the
person filing the complaint could send a letter to the
commission saying, gee, I think I got the facts wrong--but
whether or not the Commission entertains that is not mandatory,
nor is I think there any formal provision.
The Chairman. Under the law, the Commission can entertain,
they can look at it, but I don't think that can cause a
withdrawal.
The other question I wanted to throw out is probably a
complete pipedream that would cost the Commission a lot of
money. And I should have asked the Commission, but I didn't
think of it. In the State of Ohio we have an Election
Commission. It is different. Part of it I do not agree with.
They monitor your free speech. You make a statement in the
newspaper and say, my opponent is not a good supporter of this
or that issue, they can actually take you to the Elections
Commission for what you said in the newspaper, which I think
someday will be very unconstitutional in the State of Ohio
because it is monitoring speech.
But on the other hand, the Ohio Election Commission does do
something, though, on the filing of these, whether it is on
speech or violation of the use of funds. And if it is a
certain--and I wish I could remember what the time frame is,
but if within a certain time period before that election
something is filed, the Election Commission does an expedited
basic emergency hearing so a decision is basically made before
that election.
What that does in our process, you have to think twice
before you file, if you are going to file something frivolous,
to file 2 weeks before the election this outrageous filing,
that is going to be decided before the election. And if you
filed something that is frivolous and it is shown frivolous,
you will probably lose on a vote, and then it is going to be
held against the person in the election.
Do you think there is an ability or enough money that there
could be an expedited procedure if something is filed within a
certain time--6 weeks before the election, 2 weeks before the
election? Would that help? Would that hurt? Or is that probably
impossible?
Mr. Sandstrom. I would just note the Commission is
fallible. And would you want the Commission determining the
fate of an election based on wrongful findings? If you have a
rush to judgment; you run a great risk of making a bad
judgment.
Mr. Elias. I agree with Karl. I am not sure I would want
them making a rush to judgment. I do think, however, that a
process whereby at least a threshold determination is made
whether or not to find reason to believe, I think you are
right----
The Chairman. I apologize. I don't know the exact section
of law in Ohio. There might be a preliminary decision in Ohio.
I probably misstated. They do not decide the case but they make
a preliminary decision in a stated period of time that there is
probable reason to advance or not. There is something there in
the law, and I wish I knew it.
Mr. Elias. I think everyone here on this panel has had a
client who has had a complaint filed against them that has no
merit. But since it will take the Commission months or years to
even look at the complaint, no less dismiss it, that complaint
looms during the pendency of the election. So even at a
minimum, if there was some rule that there would be some at
least screening of those complaints by the Commission so that
complaints that are clearly not meritorious could be screened
out prior to elections, that I think would be helpful.
The Chairman. Which brings me to another question. Would
there ever be the ability of the FEC to basically try to screen
actions against--try to prescreen about inexperienced political
actors, as they may be called, that are making these filings
and some of them are inexperienced or they are volunteers?
Would there be an ability to prescreen those, or is that
probably impossible?
Mr. Bopp. That would require a considerable refinement of
the FEC's current procedures, and certainly we know as lawyers
disciplinary commissions often have a series of filters where
they filter through complaints and try to quickly dispose of
those that, on their face, have no merit and try to categorize
ones depending upon their potential severity and treat them
differently. That might have some merit.
The Chairman. I think I confused you, Mr. Sandstrom, on my
question. But if somebody in good faith brings something to the
FEC, they are inexperienced and they are volunteer, and I
wonder if there is a pre-way to say this is very clearly not a
violation, but if you want to file it you can. And in good
faith, they do not file it because they are really not an
experienced person. I guess that was the nature of my question.
Mr. Sandstrom. I am fully with the Chairman's desire to
find ways by which matters that shouldn't be before the
Commission because they are frivolous, they are not
substantiated, the person was operating on facts they have now
determined to be false, would have an opportunity to have that
matter taken out of the political process. So there is
vindication for the accused. To the extent the Chairman is
looking for a way to give early vindication, I am fully
supportive of the Commission exploring it.
And the Commission has done a much better job. They
actually now find no reason to believe on occasion. They will
actually look at a complaint and say this does not rise to a
level where the facts that have been alleged constitute a
violation. So you get an opportunity to get those matters
dismissed at an early stage. I think the Commission should
improve on this process and try to make those findings even
earlier.
The Chairman. I believe we had occasions where somebody
would write here to House Administration and say, a sitting
Member of Congress didn't have a right to run because they are
a sitting Member, and we want an investigation of their
election process. And we look at that and have to do an
official dismissal, and we come to a quick conclusion that that
is something that we shouldn't spend a lot of time on. I was
comparing it to that.
My last question: In your opinion, would greater procedural
fairness--which has been an issue--would that actually result
in more compliance with the law or would it result in less
compliance with the law?
Mr. Sandstrom. Maybe because I am a former commissioner, I
have some fairly strong views on a number of these issues and
am more than happy to offer them. I think oral hearings are a
bad idea. There is a difference between a commissioner and a
judge. I was in a previous life the chairman of an
administrative review board which I reviewed along with my
board members, administrative law judges' decisions. The judges
are the ones who sat through all the testimony, sat through the
cross-examination, made credibility judgments with respect to
witnesses. The Commission is not in a position to do that. No
lawyer coming before them is offering fact testimony. It is
onlythen questions of law.
If the question of law is whether the law is ambiguous, I
question whether the Commission should be prosecuting that
matter. So I really do not believe that with respect to having
an oral hearing, you would do anything positive and you may
disrupt the process because there is a real danger here. That
is what I would call ``partisan creep.'' It is difficult for
three Democrats and three Republicans to judge people of their
own party. That sympathy would likely come out in a hearing. It
is just natural. You are more likely to be sympathetic to your
witness, and therefore hearings would change the dynamics of
the Commission in a way that I think would not be to anyone's
benefit.
Mr. Bopp. Thank you, Mr. Chairman. I really do not know the
answer to your question. That is, I don't know whether or not
there would be more willing enforcement or compliance with the
FECA or not with procedures, because I don't think procedures
are intended for that purpose. I think the purpose of the
procedures is to ensure that the FEC, in carrying out its
activities that inherently impinge on first amendment rights,
does the minimum amount of damage to our democracy and to the
exercise of those rights in carrying out their investigatory
responsibilities.
So simply the government asking questions of a private
citizen about their first amendment activities is itself a
violation of their rights. It chills them, it inhibits them. So
I think the purpose of heightened procedures is to ensure that
agreed important work of the Federal Election Commission is
done with minimal damage to our democracy.
The Chairman. Thank you. Mr. Larson.
Mr. Larson. Thank you. And I want to thank the panelists,
and I have a couple of questions I would like to get to. The
Chairman has asked a couple of them already.
My first question has to deal with something you mentioned
earlier, Marc, and that was with regard to the new law that is
going into effect. I say this in general terms, because just a
hunch on my part that most Members of Congress have not
thoroughly read or understand the ramifications of this law.
While people may be used to the fact of the treasurer and the
treasurer's statutory cite and authority, you mentioned
something about agents, and could you explain or elaborate what
that means and what the ramification of that is?
Mr. Elias. Sure. For a number of years before the new law
predictably--several times a cycle I would get a call from a
candidate who would say, would you mind talking to so-and-so, I
want him to be my treasurer. I would say, sure. They would say,
he is a little nervous; could you tell him this is not that big
of a deal? I would say, okay, I will do the best I can. And in
the back of my mind I always knew that the treasurer was, in
fact, the only person who was going to be on the hook. That no
matter what went wrong, who was solicited, what was done right
or wrong, what was reported or wasn't reported, it was only the
treasurer who could potentially have a problem. The candidate
would not and, by and large, the people who worked for the
campaign would not.
The 2004 cycle has ushered in a new conversation. Now it is
candidates calling and officeholders calling. I hear now it is
no longer Joe Smith the treasurer who is liable. They say, now
it is me. And that is one of the big changes in the Bipartisan
Campaign Reform Act. The ban, for example, on soliciting soft
money is not a ban on treasurers. It is not a ban on campaign
workers. It is a ban on officeholders and candidates, and it is
a ban on officeholders and candidates and their agents and
individuals acting on their behalf.
So if candidate so-and-so goes out now and solicits soft
money, it is that officeholder or that candidate who has now
broken the campaign finance laws, not the treasurer. And that
is also true with respect to individuals who are acting as
agents on behalf of the candidate.
Mr. Larson. How would you define an agent?
Mr. Elias. This was a subject of some discussion among the
Commission, so I will inevitably get an electroshock from one
of them if I get this wrong. An agent is someone who acts on
behalf of a candidate or officeholder, with actual authority to
act on behalf of the officeholder, and in their capacity to act
on behalf of the officeholder or candidate. So they need to be
empowered by the officeholder or candidate to be acting on
their behalf and they need to be acting in that capacity when
they do the action.
Mr. Larson. How many people in a campaign do you think feel
that they are empowered by the candidate?
Mr. Elias. An increasing number of people do not want to be
empowered by the candidate. And all the joking aside, there has
already been significant discussion and at least one advisory
opinion, which I submitted on behalf of a relative of an
officeholder, as to whether or not what is now known as the
two-hat theory, which is whether it is--you have Jeb Bush in
Florida or a family member of a Member of Congress--whether
they can continue to raise money for State candidates as they
always had, or whether they are somehow wearing a hat acting on
behalf of their relative. And the Commission I think sensibly
came to the conclusion that you can raise multiple hats.
But it now raises this unfortunate question where now
people call, if I am an agent, how do I know which hat I am
wearing? And you have to sort of search inside your soul, and
when you are doing this, are you acting on behalf of the
Federal officeholder or on someone else's behalf? It is a real
problem. I think the Commission has taken a sensible and
practical approach to interpreting it.
Mr. Larson. Is there a solution, as Mr. Sandstrom alluded
to before, where we can draw bright lines? Where there can be--
where we can make clear the intent?
Mr. Elias. Yes. And I think the Commission has done as good
a job of that, both through their regulations on the agent, and
also in the advisory opinion that I alluded to.
Mr. Bopp. And I think in interpreting the BCRA, the
Commission has made sincere efforts to draw bright lines. You
should know, however, Congressman, that Mr. Shays and Mr.
Meehan disagree with the regulation that drew the bright line
on who is an agent, that is, you have to have express
authority. They have sued the Commission to overturn that
regulation, because they want liability cast on all Members of
Congress by the actions of any person with apparent authority.
So that even if you have told someone you are not to do this or
do this for me, if they go out and do it and they have apparent
authority because of their position with your candidacy, you
are liable.
Mr. Larson. Well, I wish Mr. Shays and Mr. Meehan were here
to respond, but I will follow up with that.
That leads into my next question and one that I was asking
the previous panelists. So is there enough money for the FEC to
broadly reach out and explain to the candidatesand the
treasurers and the agents in this process to inform them of these new
rules and regulations inasmuch as this portion of the law takes effect
November 1st, if I am correct?
Mr. Bopp. It took effect last November 1st. And my sense of
it is no, they do not have enough money to do this role, and
this is a very salutary role for the Commission to undertake.
Mr. Elias. I will answer by saying I don't know whether
they have enough money. I will say one thing that I do think is
important, and that is as the Commission goes forward,
especially after the McConnell litigation is resolved, that in
addition to the trainings, the need for them to do whatever new
implementing regulations quickly and to resolve advisory
opinion requests quickly is as important, frankly, as the
trainings that I think go on out in the countryside, which are
vital.
And, again, I want to say I think the Commission has done a
very good job here so far in coming to clear lines in their
regulatory and advisory opinion process.
Mr. Larson. Should the Commission do a study of the
ambiguities in the existing law and correct those or come up
with suggestions?
Mr. Sandstrom. The Commission should be always doing a
continuous study of ambiguities in law. You referred to these
public information sessions. During those conferences,
questions come up that the staff can't answer. One of the
obligations of that staff should be ``if I can't answer it, the
Commission needs to give me an answer.'' If the Commission
can't provide an answer, then it does need to do a regulation
or find some means to publicly answer.
So this is one avenue, this constant feedback from staff
should be part of the regular process by which the Commission
goes about providing clear rules.
Mr. Larson. Anyone else on the panel wish to respond to
that?
Just out of curiosity, I know the Chairman has stepped out,
but I think it would be interesting on the part of the
committee to hold a symposium for members so that they can
fully appreciate, or hopefully understand--we all know how
enlightened every Member of Congress is on every salient issue
before them but, nonetheless, I do think that, especially given
the criminality involved with these issues, that members
hopefully ought to be more aware of them, or at least more
informed about the various consequences and some of the
remedies and procedures and who to go to and how to contact
them and how to avoid any of the problematic concerns that the
law anticipates might happen.
Mr. Doolittle [presiding]. While the Chair is gone and I am
filling in for him, let me say I agree completely. This change
in the law was designed, frankly, to take away the bright lines
and make things more subjecting, more blurred, more questions
of fact. For potential defendants that is a problem. So I think
our members ought to realize just the possible jeopardy they
are now going to be placed in by these changes, and I think one
of the best things this committee could do would be to try and
shine a light on that. Knowledge will give us power to act
effectively.
Has Mrs.----
Mr. Larson. She has not.
Mr. Doolittle. You are recognized.
Ms. Millender-McDonald. I agree with you, but I am of the
ilk that everything falls back to me, so I see that as my being
liable, irrespective of the new law or the old law. But I will
take you one by one to get you back to some of the things you
said.
Mr. Bopp, you mentioned in your testimony, I have read,
that you are here as a practitioner and not one who is
representing any client.
Mr. Bopp. Yes.
Ms. Millender-McDonald. Given that, you have said that the
general counsel of the FEC wears many hats; he or she is a
prosecutor, investigator, regulator, all of the other things
that you said. And you said that this FEC tends to infringe on
the first amendment right.
Given that, then would it be--should we, then, look at--and
I am not sure you said this, because I wrote side-bar notes,
the FEC complaints are used for partisan advantage. If you did
say that, then would it be best that we create a new FEC agency
that has a nonpartisan person at the helm?
Mr. Bopp. Well, there are proposals that the agency be
reformed as either with a single administrator or I think you
asked earlier having an odd commissioner. Well, if that is the
way it would be conducted, then I want to be either the odd
commissioner or the single administrator because I would be the
most important person in this town. I would have the unilateral
authority to derail candidacies by launching investigations and
enforcement actions. I would have the ability unilaterally to
smear candidates and other groups or citizens that want to
participate in some way in our democracy. I would have the
power to stifle speech that I disapproved of and disliked.
That is why--I mean, I would have more power to affect
ultimately our government than anyone. And it seems to me that
we have gone through a period now of 3 years where we have seen
in Florida the problem of lawyers, courts, you know, trying to
determine the outcome of elections. We then saw the same sorry
spectacle in California, efforts to derail democracy--derail
democracy as I would view it----
Ms. Millender-McDonald. I am a Californian.
Mr. Bopp [continuing]. With the lawsuits and judges and the
court orders to stop or put off the election.
If we had that kind of system, I think we should just
cancel elections and just have the lawyers, the courts, and the
Federal bureaucrats decide who is going to run our country.
Ms. Millender-McDonald. That is preposterous, yes.
Mr. McGahn.
Mr. McGahn. McGahn.
Ms. Millender-McDonald. You said that people see the FEC as
a mystery. What type of mystery--I may have not noted some of
those things that you quoted as a mystery--but what would be
the mystery that some folks see at the FEC?
Mr. McGahn. There are several instances of either internal
procedures or investigatory procedures that are either
counterintuitive or not publicly disclosed. There is, or so I
have heard--I have never worked at the Commission so I do not
have any firsthand knowledge of this--it has been mentioned in
other hearings that there is a schedule of some sort that
listed fines for certain offenses, or some table where you have
a pretty good idea of where you are going to end up in the
conciliation process. That is not a document that I can get.
That is not a public document.
So when clients ask me, once they have done something that
they think is wrong, what do you think the damage is going to
be fine-wise, I have to use my best guess just basedon research
of other MURs and that sort of thing. But yet there is some internal
schedule. A public agency, one would think, would have to make that
public, but so far it has not been made public.
The second area is in the depositions and the like. As I
mentioned in my opening, if you are a respondent to a matter
under review, you are not entitled to be in depositions, for
example, where your case is being discussed. And that is
irrespective of whether or not there are issues that you really
ought to be there for or not. On the one hand the Commission
says that that would somehow compromise the enforcement process
or somehow impinge upon the confidentiality provisions in the
statute, but on the other hand it is counterintuitive to people
that they do not get to be a part of that.
The third thing is the notion of appearing before the
Commission in some capacity. Time and time again, people are
shocked, stunned and amazed, that they are presented with
preapproved conciliation agreements by a faceless Commission
that they have never seen, never met, in a building that they
will never step into. And I have alluded and been misquoted in
alluding to Kafka's ``The Trial.'' There is a lawyer who is the
go-between who speaks the dialect of the faceless government
agency who becomes the shuttle back and forth, and the poor
respondent did not know what is happening day to day. They know
they are in trouble but they just do not know quite sure why.
At the end of the day if you give people hearings, is it
going to change the cases? Probably not. Lawyers are lawyers
and the arguments are the arguments. At the end of the day, the
charm and charisma of a certain attorney is probably not going
to change the Commission's mind. But the respondents,
particularly those who they mentioned who are the novice
political actors, come away feeling they got more of a fair
shake. The feeling is that there is not a fair shake. There is
a cloud of secrecy over the Commission, and that is why I think
the more it can be opened up, it may not change the result of
cases, nor would I think it would enhance the process, simply
because people would have more confidence and trust in what is
going on.
Ms. Millender-McDonald. Mr. Sandstrom, given that you are a
former commissioner and the statement was made by Mr. Bopp that
the general counsel in and of itself wears a lot of hats, how
do you respond to that? Because it seems as though Mr. Bopp,
not putting words in your mouth, but has the appearance that
this general counsel really has too many different areas that
he or she has to contend with under the cloak of general
counsel.
Mr. Sandstrom. First, I would agree with something that Jim
said, that in fact he would be an odd commissioner. But, I
think it is very important to know that there is a trade-off
once you go to hearings, mini-trials. I mean, the costs,
anybody that is familiar with administrative law proceedings
before ALJs understand they involve all the expense that a
regular trial would. They involve witnesses, cross-examining
them, reviewing documents, so if you actually want the general
counsel not just to be the attorney to the Commission advising
the commission on whether to proceed with the matter, based
upon the general counsel and their staffs' judgment set forth
in a document about whether this matter merits finding probable
cause that having been responded to, you would have to look at
what is the alternative. Is the alternative actually worse than
the current process? And I would posit that it could well turn
out to be much worse.
Don, another good friend said you would like some of the
mystery taken out. And maybe his clients would like to sit
through an administrative law judge type trial. I don't think
so. I don't think that would be healthy for the process. The
fact that we have so few cases actually going to trial is a
good thing. If the Commission was actually bringing more cases
in courts, because more things merited going to court and could
not be worked out for conciliation, that would be worse for the
system. So----
Ms. Millender-McDonald. So a lot of the cases are resolved
outside of court?
Mr. Sandstrom. Almost all of the cases. I heard the figure
like 98 percent. That is healthy, even though I understand that
the Commission has maybe undue leverage in those cases.
Because, the respondent's choice is either to give in at the
conciliation or have to go to court and trial. But if the
choice is to have the trial earlier, I think you are going to
lose out there and you are going to turn something into a very
adversarial proceeding where currently it is not an adversarial
proceeding even though to many I understand why it appears to
be.
Ms. Millender-McDonald. Mr. Elias, given the fact that Mr.
Sandstrom has said that most of the cases are resolved outside
of court, and you raise the issue that a screening process
might be important to have initially as opposed to I guess the
fact finding that goes on given the cases that come before this
Commission, would it then be proper to try to have the
screening before the fact finding mission, or should we have
the fact finding mission and just ignore screening to try to
alleviate some of the time element that some of these cases
imposes?
Mr. Elias. Let me just start by commenting on the question
about an independent administrator. If it is going to be an
Independent rather than a Democrat or Republican, I would
commend either Senator Jeffords or Congressman Sanders as the
kind of Independent that I would like to see handling it. In
terms of your question, I think the question of screening gets
to whether there are certain kinds of complaints that come in
for which no facts could be found for which there is going to
be a violation. A lot of FEC complaints come in that are very,
very straightforward. They allege that, you know, candidate so
and so failed to report X poll and the response comes in and
says we did report it, here it is on our FEC report. And it is
very, very frustrating to people, frankly, in you all's
position that you call me and say what do we do. We got this
complaint and we reported it and I have a copy of the page and
I say, well, we will put together a response and we will attach
the page and we will reference it. And then you naturally
assume that that means it is over. And you say, well, when will
the FEC tell us that we didn't do anything wrong so that I can
tell the newspaper that we are right. And I will tell you,
well, it will likely be several months at a minimum, more
likely more than a year before the FEC says something.
I get letters. To be honest with you, one of the problems
with the FEC is they send the letters and simplytell you what
MER number it was. I get letters telling me that complaints have been
dismissed. I can barely figure out who the client was, I mean it was so
long ago. I mean, 4 years, and I am glad to hear the FEC is speeding up
their process and I have no doubt that that is the case and I think
that is great. But we are right now as a law firm dealing with a number
of complaints that relate to the 1998 cycle.
Now, why are we dealing with complaints against the 1998
cycle? Because it is 5 years from the end of the 1998 cycle, so
the general counsel's office is pushing through all of the MERs
that are approaching the 5-year statute of limitations. Now
that is appropriate. They ought to because they ought not to go
stale. They ought to be resolved in a timely fashion. But my
idea of screening is that some number of MERs we ought to be
able to just get knocked out of the box rather than them sit
for months before some human being looks at them.
Ms. Millender-McDonald. And that should be done by general
counsel?
Mr. Elias. Someone under the general counsel's auspices. I
don't know who within the organization would do it.
Ms. Millender-McDonald. So to all of you, should that be a
restructuring of FEC given the new laws that we have because it
seems like these laws are absolutely far riskier, I guess you
might say, or certainly puts us in a different position than
what the old laws were? Should there be a restructuring of the
FEC whereby more accountability is brought to bear and this
screening process is done by someone who has the legitimacy to
do that and then dispose of it?
Don't all speak at once.
Mr. Bopp. I think both those would be, are salutary
proposals. The additional one that you have referred to is my
concern that I have expressed in my testimony that the general
counsel has multiple hats that I think are conflicting and has
compromised how that office has conducted its respective roles
because, in my view, in my practitioner's view, the
prosecutorial role has seemed to historically come to the fore,
even at the earliest stages of looking at complaints, certainly
in the cases of investigations that I am familiar with. So you
know, I think that the prosecutorial role is one. I think that
the advice that the general counsel is now obligated to give,
which is intended and should be objective, you know, legal
advice, you know, is a completely different role. And I think
the agency would function better and each of these roles would
be served better by separating those roles.
The Chairman. Thank you.
Ms. Millender-McDonald. No other comments on that.
Mr. Elias. I would just say I think that, to get back to
the screening role, I think that the agency can't let the
perfect be the enemy of the good.
Ms. Millender-McDonald. I am sorry?
Mr. Elias. The agency can't let the perfect be the enemy of
the good. And if some numbers of complaints get screened out
that maybe shouldn't have in an ideal world, great. I mean the
FEC recently dismissed a complaint involving whether Wal-Mart
could put out a magazine. I might have seen life--I might have
seen called balls and strikes slightly different than they did,
but God bless them. They at least called balls and strikes in a
fashion that didn't take more than a year or so. And I think if
cases just moved quicker, whether it was always the result that
I would like or the result that Don McGahn would like, I think
we would all be happier.
The Chairman. Thank you.
Ms. Millender-McDonald. You know, Mr. Chairman, this has
been a very informative panel, it has raised a lot of issues,
and has raised my eyebrows. And as Mr. Elias said, our
treasurers have been pretty much symbolic, a symbolism, but
they were really liable for anything that would come to bear in
terms of infractions. And now the tide has turned. I agree with
the ranking member. We should look at some type of symposium to
instruct these Members or to at least inform the Members of the
new laws and how they are now applied as opposed to the old
laws that were applied differently.
The Chairman. Thank you. When I was out of the room and I
came back in, Mr. Larson had informed me of your statement, and
you know I think we can do that. Just add a couple of things.
We have I know with other incumbents stressed to them to call.
And one of the reasons, as I interpreted or also with some
legal advice, some Members of Congress may agree to go ahead
and put their name to something for a local party and to try to
help out and the next thing you know everybody's going to be
drug into a real problem. And then obviously there is going to
be anger within your own party because of what you did to them
because you know they didn't know it. And I think these are
general concerns and in discussions that we have I would even
venture to say that some of the people that were participants
in writing the law are not able to clearly answer some of the
questions that are asked of them.
So we have tried to warn people to call attorneys, pick an
attorney, would take it one step further, too. We can do this
for the incumbent and I have no problem in doing it. I would
also urge both political parties and any other political party
to do it for challengers. We can't do it for challengers, but I
think that they should do it for challengers so that if you
have got John or Susie Smith out there they might spend a grand
total of $6,000 or 7,000 but that has them making a filing.
They should also have the availability to know what they are
into so they don't make some kind of mistake on only spending
5,000 and also have a legal problem.
So I think the more we can educate, the better off we would
be. And I am going to now refer to, if the FEA is created, my
candidate for life time appointment as head of that
organization, Mr. Doolittle. He is unbiased.
Ms. Millender-McDonald. Oh, yeah, right.
Mr. Doolittle. Mr. Chairman, I can guarantee you I would do
my part to try and uphold the freedom of speech. It seems to
have fallen by the board in recent times. I truly apologize for
missing the first panel. I just had--something came up and this
was the best I could do. So some of these concerns I can't
fully address although let me ask if we get to submit questions
in writing.
The Chairman. Without objection.
Mr. Doolittle. And I will want to do that. But I am
concerned, I understand the Department of Justice's Public
Integrity Unit has stated they intend to make violations of the
Federal Election Campaign Act a greater priority and intend to
ratchet up investigations against candidates. And pursuant to
that, I understand the Department of Justice has asked the FEC
to renegotiate at some, I don't know, 20-year-plus old
memorandum of understanding which sets forth the civil versus
the criminal responsibilities of each agency. And I guess I
would like to know, if one of thepeople at this panel can tell
me, how do cases get referred from the FEC to the Department of
Justice?
Mr. Sandstrom. Having referred a couple of matters or voted
on such matters when I was on the Commission a referral
requires a majority vote of the Commission. At least four
commissioners must support the referral. It usually comes at
the probable cause stage if it involves a FECA violation.
Referral matters that may involve, for instance, false
statements may be handled differently. But that is one of the
things that really needs to be worked out between the
Department of Justice and the FEC, what is going to be the
referral policy going forward.
Mr. Doolittle. Well, does it concern any of you that--I
don't know. I mean, America is about the freedom of speech.
That is, I thought that provision of the Constitution was put
in to preclude exactly what Congress has recently done because
it seems like we are abridging the freedom of speech in the
name of some supposedly greater value. I don't know what could
be greater. So does it concern you that now we are going to be
sort of threatening people with criminal prosecution for things
that I thought were sort of in the protected realm?
Mr. Bopp. Well, if I may, I am one of the counsel
representing clients in McConnell vs. FEC that has sued many of
the provisions of the Bi-Partisan Company Reform Act. And the
fundamental concern there is I think the one that you are
expressing. The first amendment says quote, Congress shall make
no law. Well, BCRA was 90 pages. We now have over a thousand
pages of FEC regulations and explanations of those regulations,
all of which people are now supposed to try to understand that
govern a multiple--many different organizations and individuals
in many different ways. I think we are into a culture of
regulation of what the founders intended to be a free
marketplace, which was to be our elections and our speech and
our association. And we are soon going to reach the point where
the only people that will participate are the wealthy, the
corrupt, the reckless and the ignorant. I mean, that is what we
are getting to. And as we add layer upon layer of regulation,
what we are talking about here and I think what I have been
talking about is how can we ameliorate, you know, what the
essential feature of the regulatory regime that has now been
imposed upon our democracy.
Mr. Sandstrom. Mr. Doolittle, I am very sympathetic to your
question, but I think it may oversimplify. If I am an employer
and I shake down employees for contributions, that should be
criminally prosecuted. If I receive foreign money or route it
through some American citizen, that probably should be
prosecuted. In the past the Department of Justice has shown
good judgment, I think, with respect to matters that they have
prosecuted. The future is open to question. And that is where I
think your question is most legitimate, is asking how will this
expanded felony jurisdiction of the Department of Justice be
employed. And if it is employed in some of the areas that Mr.
Bopp is most concerned with, the content of communication,
private political conversations and such, then I think there is
real danger there. But I think you still need to retain
criminal enforcement for the truly aggravated violations, for
instance, foreign national contributions, conduit contributions
and such.
Mr. Doolittle. Well, I think if it were confined to that we
would all have a better comfort level. But I think we are all
aware of examples where you have some prosecutor some place
that is out to make a name for himself, and I just worry about
this. I think this is very much subject to abuse. Yes, sir.
Mr. Bopp. If I might make one more comment on that. The
problem here is we are in a downward spiral. The more
regulation, the more laws you pass, the more incentives there
are for people who are otherwise corrupt to violate the law.
The law abiding obey. The one who is prepared to skirt the law
gains an advantage in an election which occurs at a given point
in time and we can never go back. So they win the election by
corrupt practices, and the more restrictions on law abiding
people, the more opportunity and incentive there is for the
corrupt to violate laws. Therefore, the reformers, correctly
understanding that, then say, well, then therefore we need to
increase penalties.
Mr. Doolittle. Yeah it is a self-fulfilling prophecy and
this will only go from bad to worse if we continue down this
road just as it has gone from bad to worse. It was bad. Now it
is worse. It will be yet worse than this. Some day we are going
to have a Congress and a Supreme Court that will give a literal
reading of the Constitution like has been done in the past but
not now. I hope we will follow Ms. Millender-McDonald's
recommendation and really get into this.
Let me say if you have ever had the misfortune to be on the
receiving end of one of these investigations, it is very
troubling. You all of a sudden learn what your real rights are
and aren't and there are very few real rights that you have as
a practical matter. You don't even get--you know, under the
present practices you don't even have to have exculpatory
information turned over to you by the FEC. They can at their
discretion withhold that. And I just think there is some real
unfairness that has been--even, I was looking for this. The
head of the American Bar Association in 1983 recommended that
access be given to documents, interrogatories and depositions
at the probable cause stage and yet as I understand it that
really has not happened. You know, here we are 20 some years
later. And unfortunately, by the time you discover what your
rights really are it is too late. You know, you are then the
defendant.
But I think it is our job as the policy makers to try and
stand up for the rights of the accused. It troubles me. I think
of my first race for the State Senate and I got a friend to be
my treasurer. I would never do that to a friend today. I mean,
there was never even possibility of any--I mean, as long as he
was trying to be honest he would be okay. But today, you would
have to go to a professional and you are going to pay. I didn't
pay my treasurer anything. He volunteered. You would have to
pay someone to do this today because they incur liabilities.
And you know this is just one of the things that raises the
cost of campaigns, and all these big reformers constantly
complain about the amount of money we are spending on these
campaigns when they through their onerous regulation have
caused a lot of it.
So anyway my time is up, Mr. Chairman. It was a good
hearing, the part I was here for, and I look forward to the
next one.
The Chairman. Thank you. Also wanted to note too, leaving
ourselves out of it for a second, just to make a warning out
there to challengers, challengers and their treasurers can get
themselves in horrific problems, end up having to hire an
attorney, maybe to have a campaign accountof you know 30,000
some dollars and they expended it. They hire an attorney. They end up
with a bill of 50,000 and lose their house or have to mortgage it or
whatever they have to do because they don't even have the resources we
do with campaign accounts where we can raise money, hire the attorneys,
and I just think also, and again, if somebody's committing a wrongful
act, sure. But I think and what was passed, which I didn't support, but
what was passed, if not defined very, very clearly and carefully, then
I believe a lot of challengers, not so much us, where we can put an
attorney on retainer, you know, call the attorney and they push the
clock and bill us. But a lot of challengers, I think, are going to not
have that luxury and the average citizens will start--after a couple of
people owe 50 or 60,000 and somebody loses their house the average
citizen might say, wait a minute. So then you are back to where you've
got to be a State Senator or State Rep or somebody on the inside to run
for a public office because you know you have been around, you know
people, you have raised contributions.
So I just think this should be very chilling, again if it
is not spelled out exactly what you do and how you do it from a
very complicated law, which I didn't agree with campaign
finance reform. But you know it is here and if the Supreme
Court acts then I think it has got to be spelled out very, very
carefully and that is just as much a problem for challengers as
it is for incumbents.
Ms. Millender-McDonald. Mr. Chairman, I will defer to the
ranking member.
Mr. Larson. Thank you. Just a couple of quick points here.
First, I would hope and I know that we have already chatted
with the first panel, but it seems, that a symposia or some
gathering where we can bring Members together would be entirely
appropriate. But I would also think that the Commission has got
to have something like the 10 most commonly asked questions by
campaigns of the Commission so that that would be something
that could be put out for everybody's perusal. And then also, a
sense from people who handle these issues on a regular basis,
the most avoidable offenses, commonly made mistakes by
campaigns with a fuller, hopefully a better or fuller
appreciation with the bright lines that need to be drawn, to
amplify these concerns for both incumbents and challengers
alike.
And finally, why I share a number of the concerns that have
been raised here and we talked earlier about philosophical
concerns, and I certainly can appreciate those who say, well,
you know, if there were no regulations at all then you know
clearly we would operate in the spirit of a free marketplace by
reporting everything. There is also a whole other philosophy
that says that if there was public financing of campaigns, and
we reclaim the air waves that belong to the public, there would
be free access to disseminate information during an election
for the public as well. So I just raise that point
philosophically.
The Chairman. Gentlelady.
Ms. Millender-McDonald. I think only, Mr. Chairman, that
given the information that we have received this committee I
think would be best to send a letter to our colleagues just
talking about some of the critical issues that have come before
this committee today and to tell them that given that, we
should perhaps convene a symposium to talk about these issues,
because they are most critical from the treasurer to all other
aspects of what we have heard today.
The Chairman. Mr. McGahn, are we allowed to send such a
letter? I thought I would ask you since you are with the NRCC.
Mr. McGahn. Yes.
The Chairman. Thank you. We have it from our expert legal
counsel. With that, I want to thank all of the witnesses who
worked hard to prepare for I think two good panels and a good
hearing. I also want to thank our members for being here today
and also Mr. Larson's staff as well as the staff of the members
for preparing and participating in this hearing.
I ask unanimous consent that members and witnesses have 7
legislative days to submit material for the record, and those
statements and materials will be entered in the appropriate
place in the record without objection. The material will be so
entered. I also ask unanimous consent that the staff be
authorized to make technical and conforming changes on all
matters considered by the committee at today's hearing. Without
objection, so ordered. And having completed our business, the
hearing is adjourned.
Ms. Millender-McDonald. Don't adjourn before I commend you
and the ranking member on the minority procurement workshop or
seminar that we had. The ranking member came before the
Congressional Black Caucus. He took some of their questions and
their concerns under advisement. He presented it to you. The
two of you are not minorities by virtue of our looking at you,
but you were very sensitive to that issue, and with that, let
me commend you and thank you so much for that. It was
extraordinarily successful and we look forward to more of
those, and thank you both so much.
The Chairman. Well, I thank the gentlelady for her comments
and we had minority entrepreneurs and business people from
across the country, as you know. I want to thank Congressman
Larson and yourself. You were there and the members also, the
minority leader, Congresswoman Pelosi, and the Speaker of the
House, Speaker Hastert was very supportive, and appreciate your
comments.
With that, the hearing is adjourned.
[Whereupon, at 5:26 p.m., the committee was adjourned.]