[Congressional Record Volume 144, Number 13 (Monday, February 23, 1998)]
[Senate]
[Pages S837-S839]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. CLELAND:
  S. 1664. A bill to reform Federal election campaigns; to the 
Committee on Rules and Administration.


       THE FEDERAL ELECTION ENFORCEMENT AND DISCLOSURE REFORM ACT

  Mr. CLELAND. Mr. President, the year 1996 witnessed both a record 
high in the amount of money spent in pursuit of federal office--a 
staggering $1 billion, an increase of 73 percent just since 1992--and 
the second worst turnout in American history. In 1996, some $220 
million was spent on Senate races alone--an average of $4.5 million per 
campaign. Members of Congress combined currently raise an average of 
about $1 million a day. It has been estimated that if these trends 
continue, by the year 2025 it will take $145 million to finance an 
average Senate campaign. This is truly a ridiculous situation.
  When I came to the Senate last year, I volunteered to serve on the 
Governmental Affairs Committee. Sitting in the Committee's hearings on 
campaign finance abuses and listening to the sordid tale of the 1996 
money chase was a most unsettling experience. What I witnessed, heard 
and read made me even more convinced that we must strengthen our 
campaign financing laws, now, and provide strong enforcement through 
the Federal Election Commission of these laws, now, or risk seeing our 
election process be swept away in a tidal wave of money.
  At the conclusion of the Governmental Affairs hearings, I wrote to 
the Committee Chairman to make four basic recommendations as 
appropriate follow-ons to the investigation:
  (1) That we refer all evidence in the Committee's possession of 
alleged illegal acts to the Justice Department;
  (2) That we hold additional hearings on both FEC enforcement and 
``gray areas'' in current law, such as the Pendleton Act and the 
definition of campaign coordination;
  (3) That we mutually work for passage of McCain-Feingold as the best 
first step in curing our system-wide campaign finance problem; and
  (4) That, to the maximum extent feasible, the Majority and Minority 
work to produce a joint final report, with bipartisan conclusions and 
recommendations.
  While the jury is still out on my first three suggestions, clearly 
the final one--concerning a bipartisan committee report--will, 
unfortunately, not be adopted. The separate, partisan reports which are 
apparently to be released this week represent a lost opportunity to 
present a strong, united case for reform.
  Regardless of what action the Senate takes, or fails to take, on 
McCain-Feingold, we need to turn to additional reforms in order to 
further improve our electoral process. I am pleased today to introduce 
the Federal Election Enforcement and Disclosure Reform Act which is 
aimed at dealing with two of the biggest problems confronting our 
current federal campaign system: the inability of the Federal Election 
Commission (FEC), as currently constituted and funded, to adequately 
enforce election laws; and the significant gaps in existing campaign 
finance disclosure requirements.
  Let me be very clear that I continue to believe that enactment of 
McCain-Feingold, even in its reduced form, is an essential step for the 
Senate to take this year in beginning the process of repairing a 
campaign finance system which is totally out of control. Banning soft 
money and imposing disclosure and contribution requirements on sham 
issue ads aired close to an election, as provided for under McCain-
Feingold, are absolutely vital reforms, without which the campaign 
finance system will only grow less accountable, and more vulnerable to 
the appearance, if not the fact, of undue influence by big money.
  Nonetheless, I recognize that the issues raised by McCain-Feingold, 
in all of its forms, have become highly politicized and polarized, and 
continue to face a filibuster which threatens the Senate's ability to 
act on this legislation. Consequently, in addition to continuing to 
urge Senate adoption of McCain-Feingold, I want to broaden the scope of 
debate, and to begin the process of seeking common ground on important 
reforms which are, by and large, outside of the purview of McCain-
Feingold.
  As previously discussed, one of the most glaring deficiencies in our 
current federal campaign system is the ineffectiveness of its supposed 
referee, the Federal Election Commission. The FEC, whether by design or 
through circumstance, has been beset by partisan gridlock, uncertain 
and insufficient resources, and lengthy proceedings which offer no hope 
of timely resolution of charges of campaign violations.
  Thus, the first major element of my bill is to strengthen the ability 
of the Federal Election Commission to be an effective and impartial 
enforcer of federal campaign laws. Among the most significant FEC-
related changes I am proposing are the following:
  Alter the Commission structure to remove the possibility of partisan 
gridlock by establishing a 7-member Commission, appointed by the 
President based on qualifications, for single 7-year terms. The 
Commission would be composed of two Republicans, two Democrats, one 
third party member, and two members nominated by the Supreme Court.
  Give the FEC independent litigating authority, including before the 
Supreme Court, and establish a right of private civil action to seek 
court enforcement in cases where the FEC fails to act, both of which 
should dramatically improve the prospects for timely enforcement of the 
law.
  Provide sufficient funding of the FEC from a source independent of 
Congressional intervention by the imposition of filing fees on federal 
candidates, with such fees being adequate to meet

[[Page S838]]

the needs of the Commission--estimated to be $50 million a year.
  A second major component of the Federal Election Enforcement and 
Disclosure Reform Act is to create a new Advisory Committee on Federal 
Campaign Reform to provide for a body outside of Congress to 
continually review and recommend changes in our federal campaign 
system. The Committee would be charged, ``to study the laws (including 
regulations) that affect how election campaigns for Federal office are 
conducted and the implementation of such laws and may make 
recommendations for change,'' which are to be submitted to Congress by 
April 15 of every odd-numbered year. As with the FEC, the Advisory 
Committee would receive independent and sufficient funding via the new 
federal candidate filing fees.
  The impetus for the Advisory Committee is two-fold: (1) To build a 
``continuous improvement'' mechanism into the Federal campaign system, 
and (2) to address the demonstrable fact that Congress responds slowly, 
if a all, to the need for changes and updates in our campaign laws. In 
both instances, the conclusion is the same: we cannot afford to wait 
twenty-five years or until a major scandal develops to adapt our 
campaign finance system to changing circumstances.
  The final section of my bill seeks to enhance the effectiveness of 
campaign contribution disclosure requirements. As Justice Brandeis 
observed, ``Publicity is justly commended as a remedy for social and 
industrial diseases. Sunlight is said to be the best of disinfectants; 
electric light the most effective policeman.'' This is certainly true 
in the realm of campaign finance, and perhaps the most enduring legacy 
of the Watergate Reforms of a quarter-century ago is the expanded 
campaign and financial disclosure requirements which emerged. By and 
large, they have served us well, but as with everything else, they need 
to be periodically reviewed and updated in light of experience. 
Therefore, based in part on testimony I heard during last year's 
Governmental Affairs Committee investigation and in part on the FEC's 
own recommendations for improved disclosure, my bill will make several 
changes in current disclosure requirements.
  Specifically, I am recommending two reforms which will make it more 
difficult for contributors and campaigns alike to turn a blind eye to 
current disclosure requirements by, first, preventing a campaign from 
depositing a contribution until all of the requisite disclosure 
information is provided; and second, requiring those who contribute 
$200 or more to provide a signed certification that their contribution 
is not from a foreign national, and is not the result of a contribution 
in the name of another person.
  In addition, my legislation adopts a number of disclosure 
recommendations made by the FEC in its 1997 report to Congress, 
including provisions: requiring all reports to be filed by the due date 
of the report; requiring all authorized candidate committee reports to 
be filed on a campaign-to-date basis, rather than on a calendar year 
cycle; and mandating monthly reporting for multi candidate committees 
which have raised or spent, or anticipate raising or spending, in 
excess of $100,000 in the current election cycle.
  In developing this legislation, I have been pleased to have the input 
and advice from a variety of individuals and organizations interested 
in the subject of campaign finance reform. In particular, while none of 
them bear any responsibility for the finished product, I would like to 
acknowledge and thank the Reform Party and its founder Ross Perot, and 
chairman Russ Verney, Common Cause, and its president Ann McBride and 
vice president Meredith McGehee, and the Federal Election Commission 
and its assistant general counsel Susan Propper for their insights.
  It is easy to be pessimistic when considering campaign finance reform 
efforts. The public and the media are certainly expecting this Congress 
to fail to take significant action to clean up the scandalous campaign 
system under which we now run. But ladies and gentlemen of the Senate, 
I suggest that we cannot afford the luxury of complacency. We may think 
we will be able to win the next re-election because the level of 
outrage and the awareness of the extent of the vulnerability of our 
political system have perhaps not yet reached critical mass. But I am 
confident that it is only a matter of time, and perhaps the next 
election cycle--which will undoubtedly feature more unaccountable soft 
money, more sham issue ads of unknown parentage, more circumvention of 
the spirit and in some cases the letter of current campaign finance 
law--before the scales are decisively tilted in favor of reform.
  We will have campaign finance reform. The only question is whether 
this Congress will step up to the plate, and fulfill its 
responsibilities, to give the American public a campaign system they 
can have faith in and which can preserve and protect our noble 
democracy as we enter a new century.
  Mr. President. I ask unanimous consent that a summary of my bill be 
printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

 Summary of the Federal Election Enforcement and Disclosure Reform Act


                             I. FEC Reform

       A. The Federal Election Commission (FEC) would be 
     restructured as follows:
       The Commission will be composed of 7 members appointed by 
     the President who are specially qualified to serve on the 
     Commission by reason of relevant--
       --two Republican members appointed by the President;
       --two Democratic members appointed by the President;
       --one member appointed by the President from among all 
     other political parties whose candidates received at least 3% 
     of the national popular vote in the most recent Presidential 
     or U.S. House or U.S. Senate elections; in the event no third 
     party reaches this threshold, the President may consider all 
     third parties in making this appointment; and
       --two members appointed by the President from among 10 
     nominees submitted by the U.S. Supreme Court. One of these 
     two members would be chosen by the Commission to serve as 
     Chairman, and the other would serve as Vice Chairman.
       Relevant knowledge (for purposes of qualification for 
     appointment to the FEC) is defined to include:
       --A higher education degree in government, politics, or 
     public or business administration, or 4 years of relevant 
     work experience in the fields of government or politics, and
       --A minimum of two years experience in working on or in 
     relation to Federal election law or other Federal electoral 
     issues, or four years of such experience at the state level.
       Commissioners will be limited to one 7 year term.
       B. The FEC would be given the following additional powers:
       Electronic filing of all reports required to be filed with 
     the FEC would be mandatory, with a waiver permitted for 
     candidates or other entities whose total expenditures or 
     receipts fall below a threshold amount set by the Commission 
     (similar to Section 301(a) of modified McCain-Feingold bill). 
     The requirement for the submission of hard (paper) copies of 
     such reports would be continued.
       The Commission would be authorized to conduct random audits 
     and investigations in order to increase voluntary compliance 
     with campaign finance laws (same as Section 303 of modified 
     McCain-Feingold bill).
       The FEC would be authorized to seek court enforcement when 
     the Commission believes a substantial violation is occurring, 
     failure to act will result in ``irreparable harm'' to an 
     affected party, expeditious action will not cause ``undue 
     harm'' to the interests of other parties, and the public 
     interest would best be served by the issuance of an 
     injunction (same as Section 303 of S. 25).
       The Commission would be authorized to implement expedited 
     procedures for complaints filed within 60 days of a general 
     election (same as Section 309 of S. 25).
       Penalties for knowing and willful violations of the Federal 
     Election Campaign Act would be increased (same as Section 305 
     of S. 25).
       The Commission would be expressly granted independent 
     litigating authority, including before the Supreme Court 
     (same as Section 304 of HR 493).
       Private individuals or groups would be authorized to 
     independently seek court enforcement when the FEC fails to 
     act within 120 days of when a complaint is filed. A ``loser 
     pays" standard would apply in such proceedings.
       The Commission would be authorized to levy fines, not to 
     exceed $5,000, for minor reporting violations, and to publish 
     a schedule of fines for such violations.
       Candidates for the Senate would be required to file with 
     the FEC rather than the Secretary of the Senate (same as 
     Section 301(b) of modified McCain-Feingold bill).
       C. The FEC would be provided with resources in the 
     following manner:
       Consistent with its expanded duties, the FEC would be 
     authorized to receive $50 million in FY1999 and FY2000, with 
     this amount indexed for inflation thereafter.
       The funding would be derived from a ``user fee'' imposed on 
     federal candidate and party committees. The FEC would 
     establish a fee schedule and determine the requisite fee

[[Page S839]]

     level to fund the operations of the FEC and the new Advisory 
     Committee on Federal Campaign Reform. This determination will 
     include a waiver for the first $50,000 raised by campaigns.


           ii. advisory committee on federal campaign reform

       A. A new Advisory Committee on Federal Campaign Reform 
     would be created.
       B. The Committee would be composed of 9 members, who are 
     specially qualified to serve on the Committee by reason of 
     relevant knowledge, to be appointed as follows: 1 appointed 
     by the President of the United States, 1 appointed by the 
     Speaker of the House, 1 each appointed by the Majority and 
     Minority Leaders of the U.S. House and Senate, 1 appointed by 
     the Supreme Court, 1 appointed by the Reform Party (or 
     whatever third party's candidate for President received the 
     largest number of popular votes in the most recent 
     Presidential election), and 1 appointed by the American 
     Political Science Association. Committee members would elect 
     the Chairman.
       C. Committee members would each serve four-year terms, and 
     would be limited to two consecutive terms.
       D. The appointees by the Supreme Court, the Reform Party 
     (or other third party), and the American Political Science 
     Association must be individuals who, during the five years 
     before their appointment, have not held elective office as a 
     member of the Democratic or Republican Parties, have not 
     received any wages or salaries from the Democratic or 
     Republican Parties, or have not provided substantial 
     volunteer services or made any substantial contribution to 
     the Democratic or Republican Parties, or to a Democratic or 
     Republican Party public office-holder or candidate for 
     office.
       E. Relevant knowledge (for purposes of qualification for 
     appointment to the Committee) is defined to include:
       A higher education degree in government, politics, or 
     public or business administration, or 4 years of relevant 
     work experience in the fields of government or politics, and
       A minimum of two years experience in working on or in 
     relation to national campaign finance or other electoral 
     issues, or four years of such experience at the state level.
       F. The Committee would be authorized to spend $1 million a 
     year in its first year, indexed for inflation thereafter. 
     Funding would be provided by the new campaign user fee 
     discussed above.
       G. The Committee would be required to monitor the operation 
     of federal election laws and to submit a report, including 
     recommended changes in law, to Congress by April 15 of every 
     odd numbered year.
       H. Congress would be required to consider the Committee's 
     recommendations under ``fast track'' procedures to guarantee 
     expeditious consideration in both houses of Congress.


               iii. enhanced campaign finance disclosure

       A. Campaigns would be prohibited from putting contributions 
     which lack all requisite contributor information into any 
     account other than an escrow account from which money cannot 
     be spent. Contributions placed in such an account would not 
     be subject to the current ten-day maximum holding period on 
     checks.
       B. A new requirement would be placed on contributions in 
     excess of $200 (aggregate): a written certification by the 
     contributor that the contribution is not derived from any 
     foreign income source, and is not the result of a 
     reimbursement by another party.
       C. The current option to file reports submitted by 
     registered or certified mail based on postmark date would be 
     deleted, thus requiring all reports to be filed by the due 
     date of the report.
       D. Authorized candidate committee reports would be required 
     to be filed on a campaign-to-date basis, rather than on a 
     calendar year cycle.
       E. Monthly reporting would be mandated for multi candidate 
     committees which have raised or spent, or anticipate raising 
     or spending, in excess of $100,000 in the current election 
     cycle.
       F. The requirement for filing of last-minute independent 
     expenditures would be clarified to make clear that such 
     report must be received within 24 hours after the independent 
     expenditure is made.
       G. Campaign disbursements to secondary payees who are 
     independent subcontractors would have to be reported.
       H. Political committees, other than authorized candidate 
     committees, which have received or spent, or anticipate 
     receiving or spending, $100,000 or more in the current 
     election cycle would be subjected to the same ``last minute'' 
     contribution reporting requirements as candidate committees. 
     (Under current law, all contributions of $1,000 or more 
     received after the 20th day, but before 48 hours, before an 
     election must be reported to the FEC within 48 hours.)
                                 ______