[Congressional Record Volume 149, Number 101 (Thursday, July 10, 2003)]
[Senate]
[Pages S9246-S9248]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. McCAIN (for himself and Mr. Feingold):
  S. 1388. A bill to amend the Federal Election Campaign Act of 1971 to 
replace the Federal Election Commission with the Federal Election 
Administration, and for other purposes; to the Committee on Rules and 
Administration.
  Mr. McCAIN. Madam President, last year, Congress took the important 
step of restoring the health and integrity of our campaign finance 
system when it enacted the Bipartisan Campaign Reform Act of 2002, 
BCRA. However, the Federal Election Commission, FEC, has continually 
acted as a bureaucratic barrier to reform of the system. Time and time 
again, these unelected officials of the FEC have thwarted the 
enforcement of the Nation's campaign finance laws in deference to the 
partisan wishes of those who have appointed them.
  Along with Senator Feingold, I rise today to introduce legislation 
entitled the Federal Election Administration Act of 2003. This 
legislation creates a new independent agency, the Federal Election 
Administration, FEA, which replaces the Federal Election Commission in 
order to create a new system that finally enforces Federal campaign 
finance laws.
  Although it was set up to administer and enforce the Federal campaign 
finance laws, the FEC has not been doing its job. The FEC is a weak and 
failing agency, structured by Congress to be slow and ineffective, 
composed of commissioners whose appointments are tightly controlled by 
the Members of Congress and political parties they regulate, and has 
been impeded by a continual lack of resources. This legislation 
replaces the current system with a more effective campaign finance 
enforcement system.
  In its current form, the FEC has been faced with three major 
problems. The first problem has been that the FEC was structured by 
Congress to be ineffective.
  Prior to the creation of the FEC, Members of Congress feared that 
this proposed enforcement agency ran the risk of becoming too powerful. 
To ease these fears, Congress structured an agency designed to fail 
from the start. The FEC has six members, no more than three of whom can 
be members of the same political party. In practice, this has meant 
that there have been three Republicans and three Democrats as 
commissioners. Only stalemate and inaction on key issues have resulted. 
On important issues the votes have often been cast on a partisan basis, 
resulting in 3-3 deadlocks. Furthermore, the affirmative votes of four 
members are necessary for the FEC to act. Therefore, 3-3 ties have led 
to inaction.
  Partisanship has encroached upon nearly every major decision the 
FEC's six commissioners make. These partisan standoffs have stopped the 
FEC from enforcing actions against politicians and special interest 
groups, even when the FEC's general counsel has recommended that such 
enforcement proceed. FEC votes have been politicized to the point where 
commissioners of both parties have banded together to reject their 
staff's enforcement recommendations to serve the special interests of 
both parties.
  The FEC has lacked important powers. The FEC cannot make its own 
findings that a violation occurred, cannot seek court injunctions to 
stop illegal activity, and cannot conduct random audits of campaigns. 
The FEC cannot directly impose penalties, except in very minor matters. 
In short, the FEC can do little to enforce the law. Compounding this 
problem is that the FEC has sole jurisdiction over all enforcement of 
campaign finance laws. No matter how slow the FEC's proceedings are, no 
one can seek civil enforcement of the law through the courts. All 
complaints must be filed

[[Page S9247]]

with the FEC and only the FEC has the authority to act on them.
  This legislation addresses this first problem. First, the new Federal 
Election Administration will consist of only three members to remove 
the possibility of deadlocked votes. There is a Chairman and two 
additional members, all of whom are appointed by the President with the 
advice and consent of the Senate. The Chairman will serve a term of ten 
years and will have broad powers to manage and administer the agency, 
including the power to hire the staff director and general counsel, and 
to set the budget for the agency. The two other members will each serve 
six year terms and cannot come from the same political party.
  In the FEA, enforcement proceedings for violations of campaign 
finance laws will be conducted before impartial administrative law 
judges, similar to those in agencies such as the SEC and the EPA. An 
administrative law judge, ALJ, will conduct an enforcement proceeding 
after the three-member FEA, by majority vote, makes an initial 
determination to pursue an enforcement action. The FEA general counsel 
will represent the FEA in enforcement proceedings. The ALJ will have 
the authority to make findings of fact and reach conclusions of law. 
The general counsel and any respondent will have the right to appeal an 
ALJ decision to the FEA. The decision of the FEA regarding such an 
appeal will constitute final agency action and be subject to judicial 
review. By using ALJs, a system would be established for real 
enforcement not subject to partisan pressure.
  An ALJ will have the authority to find that violations of law have 
occurred, and to impose civil penalties and issue cease and desist 
orders, subject to an appeal to the FEA. The decision by the FEA 
regarding such an appeal will be final agency action and be subject to 
judicial review. The FEA will have the authority to apply to a federal 
district court for a temporary restraining order or preliminary 
injunction to prevent violations of law that would result in 
substantial harm to the public interest. The FEA will also have the 
authority to conduct a limited number of random audits of campaign 
committees.
  Unlike the FEC, the FEA will have real authority to act in a timely 
and effective way to function as a real enforcement agency.
  The second problem with the FEC is that the commissioners appointed 
to the FEC have been chosen based on their political allegiances rather 
than their qualifications and commitment to administer and enforce the 
law. As a result of this process, the FEC is a highly politicized 
agency beholden to the interests of federal officeholders and party 
leaders who name the commissioners and the campaign finance community 
the agency is supposed to regulate.
  FEC commissioner nominations are supposed to originate with the 
President and be confirmed by the Senate, but Congress really has the 
control over who is nominated. Nominees to the FEC are selected by 
party leaders in Congress and made official by the White House. Where 
the President has objected to a choice promoted by Congress, the 
congressional leaders have insisted on their nominees, and have usually 
won. Another issue is that few FEC commissioners have a background in 
enforcing laws. Most have come from the community that the FEC 
oversees--Congress, the political parties, and those in the campaign 
finance system.

  An example of the disproportionate control Congress has over FEC 
appointments was shown by the appointment of Bradley A. Smith in 2000 
as a commissioner. The Smith case showed that an avowed opponent of the 
campaign finance laws--someone who had called the laws unconstitutional 
and urged their repeal--could be forced onto the FEC by his Senate 
sponsors over the objection of the President, who nevertheless 
nominated him. Despite resistance, President Clinton named Smith to the 
FEC after Senate Republican leaders insisted on the nomination. The 
further inappropriateness of Smith serving on the FEC was shown when in 
February 2002 he actively participated in the efforts in the House of 
Representative by reform opponents to kill campaign finance reform 
legislation. Smith joined with another FEC member who also opposed 
campaign finance laws. The two commissioners inserted themselves into 
the fight during House consideration of the Shays-Meehan campaign 
finance reform bill by helping House Republican leaders work to defeat 
the bill.
  Clearly, the fact that FEC commissioners have become so publicly 
partisan in the policy debates on the election laws places in doubt the 
FEC's ability to credible enforce the law when its own commissioners 
openly denigrate the validity of those laws.
  This legislation addresses this second problem by the following 
means. An individual may not be appointed to the new Federal Election 
Administration if he or she is serving or has served as a member of the 
FEC subject to a term limit or during the four previous years, was a 
candidate or elected officeholder, an officer, employee or attorney of 
a candidate, officeholder or political party, or employed in certain 
executive branch positions. Such strict criteria on who may be 
appointed to the FEA would provide the best opportunity for obtaining 
highly qualified and publicly credible and unbiased individuals to 
effectively and impartially enforce the campaign finance laws.
  The last major problem with the FEC is that Congress has constantly 
abused its budget and oversight authority over the FEC. Time and time 
again, Congress has cut its budget. This legislation addresses this 
problem by having the budget of the new Federal Election Administration 
established by Congress based on a budget request prepared by its 
chairman and submitted directly to Congress. The General Accounting 
Office, GAO, will conduct periodic studies of the funding for the new 
FEA and submit recommendations to Congress on the level of funding 
necessary to provide adequate resources for the FEA to fulfill its 
duties. Unlike the FEC, the new agency will have the means to ensure 
that it will receive the adequate resources to effectively enforce the 
campaign finance laws.
  In conclusion, the fact that FEC commissioners were never able to 
find significant campaign finance violations by federal candidates and 
their political parties in the Democratic and Republican campaign 
finance abuses that occurred in the 1996 elections--especially in the 
abuses of President Bill Clinton, his campaign officials and his 
political party--is the classic example of the problems with the FEC. 
Furthermore, when Congress enacted the Bipartisan Campaign Reform Act 
of 2002, BCRA, the FEC undermined this new law by issuing regulations 
to implement BCRA that seriously weakened the law's main provisions. 
Both examples highlight the FEC's history of failure as an oversight 
and enforcement agency and the need for its overhaul. Effective 
enforcement is essential for laws such as BCRA to work in the long run, 
and achieving that requires the establishment of a new system to 
enforce campaign finance laws.
  With the establishment of this new Federal Election Administration to 
replace the FEC as a more effective enforcement agency, the campaign 
finance laws will now finally be taken seriously by candidates, 
parties, donors, and the public. Once this new agency is set up, the 
regulated community will comply with campaign finance laws because 
those laws can no longer be violated without punishment.
  Mr. FEINGOLD. Madam President, I am pleased to join with my partner 
in reform, the senior Senator from Arizona, to introduce the Federal 
Election Administration Act of 2003. When the Bipartisan Campaign 
Reform Act was signed into law, Senator McCain and I and 
Representatives Shays and Meehan said we would continue our partnership 
to make sure that the law we passed is properly enforced. Much of what 
we tried to do in BCRA was caused by failures of the federal Election 
Commission to enforce the law. In particular, the soft money loophole 
was created by FEC rulings in the late 70s and early 80s, and 
exacerbated by failures to stop the wholesale evasion of the law in the 
90s.
  We wanted to give the FEC a fair chance to implement the new law. In 
BCRA itself, we provided deadlines for promulgating regulations so 
parties, candidates, and outside groups would know and understand the 
new rules of the game by the time the new law went into effect the day 
after the last election. We participated in those rulemakings 
throughout last summer

[[Page S9248]]

and fall, giving the FEC our very best effort to answer questions that 
were raised about the meaning and effect of BCRA.
  The FEC met the deadlines, but not our expectations. Time after time, 
the FEC opened loopholes or potential loopholes rather than trying to 
faithfully discern the intent of the law. It acted as a super 
legislature, substituting its policy judgments for those of the 
Congress.
  So the seeds of the bill that we are introducing today were sown in 
the weeks and months following enactment of the McCain-Feingold/Shays-
Meehan bill. After careful consideration, it is our judgment that the 
current structure of the FEC cannot meet the challenges of enforcing 
the election laws in the 21st century. A new start is needed, and this 
is a good time to do it, with the recent enactment of BCRA and a 
presidential election just around the corner.
  In this bill, we replace the FEC with a new agency, the Federal 
Election Administration. The FEA will continue performing the reporting 
and disclosure function of the FEC in largely the same way. With 
respect to enforcement, we have followed the model of other successful 
regulatory agencies such as the EPA, the NLRB, and the SEC. The new 
Federal Election Administration will have a strong Chair and a corps of 
Administrative Law Judges to adjudicate complaints that the 
Administration's professional staff will bring. The new agency will 
have the power to determine violations of the election laws and assess 
penalties, subject, of course, to judicial review.
  Our bill envisions a smaller body than the FEC, three members instead 
of six, with an odd number of members to try to avoid the gridlock that 
the current equal number of Democratic and Republican Commissioners 
allows and even encourages. The Chair will have a ten-year term to 
encourage independence. The other members of the FEA will have 
staggered six-year terms. Our hope is that the new agency will not be 
the captive of the political parties, but instead, led by a strong and 
independent Chair, will be the respected watchdog that the American 
people want to see.
  It is sad when the agency charged with enforcing the election laws is 
jokingly referred to as the Failure to Enforce Commission. The American 
people urged Congress to enact the Bipartisan Campaign Reform Act and 
they support it now. They want to see candidates and parties abide by 
it and by punished if they don't. This new agency will provide a new 
and better structure for achieving that goal. I want to thank my friend 
Senator McCain for all of this work on campaign finance reform over the 
last eight years, and I look forward to working closely with him again 
to pass this bill.
                                 ______