[House Report 106-295]
[From the U.S. Government Publishing Office]
106th Congress Report
HOUSE OF REPRESENTATIVES
1st Session 106-295
======================================================================
CAMPAIGN REFORM AND ELECTION INTEGRITY ACT OF 1999
_______
August 5, 1999.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
_______
Mr. Thomas, from the Committee on House Administration, submitted the
following
R E P O R T
together with
ADDITIONAL VIEWS
[To accompany H.R. 2668]
[Including cost estimate of the Congressional Budget Office]
The Committee on House Administration, to whom was referred
the bill (H.R. 2668) to amend the Federal Election Campaign Act
of 1971 to reform the financing of campaigns for election for
Federal office, and for other purposes, having considered the
same, report favorably thereon with an amendment and recommend
that the bill as amended do pass.
The amendment is as follows:
Strike out all after the enacting clause and insert in lieu
thereof the following:
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Campaign Reform and
Election Integrity Act of 1999''.
(b) Table of Contents.--The table of contents of this Act is as
follows:
Sec. 1. Short title; table of contents.
Sec. 2. References in act.
TITLE I--BAN ON FOREIGN CONTRIBUTIONS
Sec. 101. Extension of ban on foreign contributions to all campaign-
related disbursements; protecting equal participation of eligible
voters.
TITLE II--IMPROVING REPORTING OF INFORMATION
Sec. 201. Mandatory electronic filing for certain reports; expediting
reporting of information.
Sec. 202. Reporting of secondary payments; expansion of other types of
information reported.
Sec. 203. Disclosure requirements for certain soft money expenditures
of political parties.
TITLE III--STRENGTHENING ENFORCEMENT AND ADMINISTRATION OF FEDERAL
ELECTION COMMISSION
Sec. 301. Standards for initiation of actions and written responses by
Federal Election Commission.
Sec. 302. Banning acceptance of cash contributions greater than $100.
Sec. 303. Deposit of certain contributions and donations to be returned
to donors in Treasury account.
Sec. 304. Alternative procedures for imposition of penalties for
reporting violations.
Sec. 305. Abolition of ex officio membership of Clerk of House of
Representatives and Secretary of Senate on Commission.
Sec. 306. Broader prohibition against force and reprisals.
Sec. 307. Signature authority of members of Commission for subpoenas
and notification of intent to seek additional information.
TITLE IV--SIMPLIFYING AND CLARIFYING FEDERAL ELECTION LAW
Sec. 401. Application of aggregate contribution limit on calendar year
basis during non-election years.
Sec. 402. Treatment of lines of credit obtained by candidates as
commercially reasonable loans.
Sec. 403. Repeal Secretary of Commerce reports on district-specific
population.
Sec. 404. Technical correction regarding treatment of honoraria.
TITLE V--EFFECTIVE DATE
Sec. 501. Effective date.
SEC. 2. REFERENCES IN ACT.
Except as otherwise specifically provided, whenever in this Act an
amendment is expressed in terms of an amendment to or repeal of a
section or other provision, the reference shall be considered to be
made to that section or other provision of the Federal Election
Campaign Act of 1971.
TITLE I--BAN ON FOREIGN CONTRIBUTIONS
SEC. 101. EXTENSION OF BAN ON FOREIGN CONTRIBUTIONS TO ALL CAMPAIGN-
RELATED DISBURSEMENTS; PROTECTING EQUAL
PARTICIPATION OF ELIGIBLE VOTERS.
(a) Prohibition on Disbursements by Foreign Nationals.--Section 319
(2 U.S.C. 441e) is amended--
(1) in the heading, by striking ``contributions'' and
inserting ``donations and other disbursements'';
(2) in subsection (a), by striking ``contribution'' each
place it appears and inserting ``donation or other
disbursement''; and
(3) in subsection (a), by striking the semicolon and
inserting the following: ``, including any donation or other
disbursement to a political committee of a political party and
any donation or other disbursement for an independent
expenditure;''.
(b) Codification of Regulations Prohibiting Use of Foreign Funds by
Multicandidate Political Committees; Protecting Equal Participation of
Eligible Voters in Campaigns and Elections.--Section 319 (2 U.S.C.
441e) is amended--
(1) by redesignating subsection (b) as subsection (d); and
(2) by inserting after subsection (a) the following new
subsections:
``(b) It shall be unlawful for any person organized under or created
by the laws of the United States or of any State or other place subject
to the jurisdiction of the United States to make any donation or other
disbursement to any candidate for political office in connection with
an election for any political office, or to make any donation or other
disbursement to any political committee or to any organization or
account created or controlled by any United States political party,
unless such donation or disbursement is derived solely from funds
generated from such person's own business activities in the United
States.
``(c) Nothing in this Act may be construed to prohibit any individual
eligible to vote in an election for Federal office from making
contributions or expenditures in support of a candidate for such an
election (including voluntary contributions or expenditures made
through a separate segregated fund established by the individual's
employer or labor organization) or otherwise participating in any
campaign for such an election in the same manner and to the same extent
as any other individual eligible to vote in an election for such
office.''.
(b) Effective Date.--The amendments made by this section shall apply
with respect to contributions, donations, and other disbursements made
on or after the date of the enactment of this Act.
TITLE II--IMPROVING REPORTING OF INFORMATION
SEC. 201. MANDATORY ELECTRONIC FILING FOR CERTAIN REPORTS; EXPEDITING
REPORTING OF INFORMATION.
(a) Requiring Electronic Filing Within 24 Hours of Certain
Contributions and Independent Expenditures Made Within 90 Days of
Election.--
(1) In general.--Section 304(a) (2 U.S.C. 434(a)) is amended
by adding at the end the following new paragraph:
``(12)(A) Notwithstanding any other provision of this Act, each
political committee described in subparagraph (B)(i) that receives a
contribution in an amount equal to or greater than $200, and any person
described in subparagraph (B)(ii) who makes an independent expenditure,
during the period which begins on the 90th day before an election and
ends at the time the polls close for such election shall, with respect
to any information required to be filed with the Commission under this
section with respect to such contribution or independent expenditure,
file and preserve the information using electronic mail, the Internet,
or such other method of instantaneous transmission as the Commission
may permit, and shall file the information within 24 hours after the
receipt of the contribution or the making of the independent
expenditure.
``(B) For purposes of subparagraph (A)--
``(i) a political committee described in this clause is a
political committee that has received an aggregate amount of
contributions equal to or greater than $50,000 with respect to
the election cycle involved; and
``(ii) a person described in this clause is a person who
makes an aggregate amount of independent expenditures during
the election cycle involved or during any of the 2 previous 2-
year general election cycles in an amount equal to or greater
than $10,000.
``(C) The Commission shall make the information filed under this
paragraph available on the Internet immediately upon receipt.''.
(2) Internet defined.--Section 301(19) (2 U.S.C. 431(19)) is
amended to read as follows:
``(19) The term `Internet' means the international computer network
of both Federal and non-Federal interoperable packet-switched data
networks.''.
(b) Requiring Reports of Certain Filers to be Transmitted
Electronically; Certification of Private Sector Software.--Section
304(a)(11)(A) (2 U.S.C. 434(a)(11)(A)) is amended by striking the
period at the end and inserting the following: ``, except that in the
case of a report submitted by a person who reports an aggregate amount
of contributions or expenditures (as the case may be) in all reports
filed with respect to the election cycle involved (taking into account
the period covered by the report) in an amount equal to or greater than
$50,000, the Commission shall require the report to be filed and
preserved by electronic mail, the Internet, or such other method of
instantaneous transmission as the Commission may permit. The Commission
shall certify (on an ongoing basis) private sector computer software
which may be used for filing reports by such methods.''.
(c) Requiring Reports for All Contributions Made Within 20 Days of
Election; Requiring Reports To Be Made Within 24 Hours.--Section
304(a)(6)(A) (2 U.S.C. 434(a)(6)(A)) is amended--
(1) by striking ``after the 20th day, but more than 48 hours
before any election'' and inserting ``during the period which
begins on the 20th day before an election and ends at the time
the polls close for such election''; and
(2) by striking ``48 hours'' the second place it appears and
inserting the following: ``24 hours (or, if earlier, by
midnight of the day on which the contribution is deposited)''.
(d) Requiring Actual Receipt of Certain Independent Expenditure
Reports Within 24 Hours.--
(1) In general.--Section 304(c)(2) (2 U.S.C. 434(c)(2)) is
amended in the matter following subparagraph (C)--
(A) by striking ``shall be reported'' and inserting
``shall be filed''; and
(B) by adding at the end the following new sentence:
``Notwithstanding subsection (a)(5), the time at which
the statement under this subsection is received by the
Secretary, the Commission, or any other recipient to
whom the notification is required to be sent shall be
considered the time of filing of the statement with the
recipient.''.
(2) Conforming amendment.--Section 304(a)(5) (2 U.S.C.
434(a)(5)) is amended by striking ``or (4)(A)(ii)'' and
inserting ``or (4)(A)(ii), or the second sentence of subsection
(c)(2)''.
(e) Change in Certain Reporting From a Calendar Year Basis to an
Election Cycle Basis.--
(1) In general.--Section 304(b) (2 U.S.C. 434(b)) is
amended--
(A) by inserting ``(or election cycle, in the case of
an authorized committee of a candidate for Federal
office)'' after ``calendar year'' each place it appears
in paragraphs (2), (3), (4), and (7); and
(B) in paragraph (6)(A), by striking ``calendar
year'' and inserting ``election cycle''.
(2) Election cycle defined.--Section 301 (2 U.S.C. 431) is
amended by adding at the end the following:
``(20) Election cycle.--Except as the Commission may otherwise
provide, the term `election cycle' means, with respect to an election,
the period beginning on the day after the date of the most recent
general election for the office involved and ending on the date of the
election.''.
(f) Clarification of Permissible Use of Facsimile Machines and
Electronic Mail to File Reports.--Section 304(a)(11)(A) (2 U.S.C.
434(a)(11)(A)) is amended by striking ``method,'' and inserting the
following: ``method (including by facsimile device or electronic mail
in the case of any report required to be filed within 24 hours after
the transaction reported has occurred),''.
SEC. 202. REPORTING OF SECONDARY PAYMENTS; EXPANSION OF OTHER TYPES OF
INFORMATION REPORTED.
(a) Requiring Record Keeping and Report of Secondary Payments by
Campaign Committees.--
(1) Reporting.--Section 304(b)(5)(A) (2 U.S.C. 434(b)(5)(A))
is amended by striking the semicolon at the end and inserting
the following: ``, and, if such person in turn makes
expenditures which aggregate $5,000 or more in an election
cycle to other persons (not including employees) who provide
goods or services to the candidate or the candidate's
authorized committees, the name and address of such other
persons, together with the date, amount, and purpose of such
expenditures;''.
(2) Record keeping.--Section 302 (2 U.S.C. 432) is amended by
adding at the end the following new subsection:
``(j) A person described in section 304(b)(5)(A) who makes
expenditures which aggregate $5,000 or more in an election cycle to
other persons (not including employees) who provide goods or services
to a candidate or a candidate's authorized committees shall provide to
a political committee the information necessary to enable the committee
to report the information described in such section.''.
(3) No effect on other reports.--Nothing in the amendments
made by this subsection may be construed to affect the terms of
any other recordkeeping or reporting requirements applicable to
candidates or political committees under title III of the
Federal Election Campaign Act of 1971.
(b) Including Report on Cumulative Contributions and Expenditures in
Post Election Reports.--Section 304(a)(7) (2 U.S.C. 434(a)(7)) is
amended--
(1) by striking ``(7)'' and inserting ``(7)(A)''; and
(2) by adding at the end the following new subparagraph:
``(B) In the case of any report required to be filed by this
subsection which is the first report required to be filed after the
date of an election, the report shall include a statement of the total
contributions received and expenditures made as of the date of the
election.''.
(c) Including Information on Aggregate Contributions in Report on
Itemized Contributions.--Section 304(b)(3) (2 U.S.C. 434(b)(3)) is
amended--
(1) in subparagraph (A), by inserting after ``such
contribution'' the following: ``and the total amount of all
such contributions made by such person with respect to the
election involved''; and
(2) in subparagraph (B), by inserting after ``such
contribution'' the following: ``and the total amount of all
such contributions made by such committee with respect to the
election involved''.
SEC. 203. DISCLOSURE REQUIREMENTS FOR CERTAIN SOFT MONEY EXPENDITURES
OF POLITICAL PARTIES.
(a) Transfers of Funds by National Political Parties.--Section
304(b)(4) (2 U.S.C. 434(b)(4)) is amended--
(1) by striking ``and'' at the end of subparagraph (H);
(2) by adding ``and'' at the end of subparagraph (I); and
(3) by adding at the end the following new subparagraph:
``(J) in the case of a political committee of a
national political party, all funds transferred to any
political committee of a State or local political
party, without regard to whether or not the funds are
otherwise treated as contributions or expenditures
under this title;''.
(b) Disclosure by State and Local Political Parties of Information
Reported Under State Law.--Section 304 (2 U.S.C. 434) is amended by
adding at the end the following new subsection:
``(d) If a political committee of a State or local political party is
required under a State or local law, rule, or regulation to submit a
report on its disbursements to an entity of the State or local
government, the committee shall file a copy of the report with the
Commission at the time it submits the report to such an entity.''.
TITLE III--STRENGTHENING ENFORCEMENT AND ADMINISTRATION OF FEDERAL
ELECTION COMMISSION
SEC. 301. STANDARDS FOR INITIATION OF ACTIONS AND WRITTEN RESPONSES BY
FEDERAL ELECTION COMMISSION.
(a) Standard for Initiation of Actions by FEC.--Section 309(a)(2) (2
U.S.C. 437g(a)(2)) is amended by striking ``it has reason to believe''
and all that follows through ``of 1954,'' and inserting the following:
``it has a reason to seek additional information regarding a possible
violation of this Act or of chapter 95 or chapter 96 of the Internal
Revenue Code of 1986 that has occurred or is about to occur (based on
the same criteria applicable under this paragraph prior to the
enactment of the Campaign Reform and Election Integrity Act of
1999),''.
(b) Requiring FEC to Provide Written Responses to Questions.--
(1) In general.--Title III (2 U.S.C. 431 et seq.) is amended
by inserting after section 308 the following new section:
``other written responses to questions
``Sec. 308A. (a) Permitting Responses.--In addition to issuing
advisory opinions under section 308, the Commission shall issue written
responses pursuant to this section with respect to a written request
concerning the application of this Act, chapter 95 or chapter 96 of the
Internal Revenue Code of 1986, a rule or regulation prescribed by the
Commission, or an advisory opinion issued by the Commission under
section 308, with respect to a specific transaction or activity by the
person, if the Commission finds the application of the Act, chapter,
rule, regulation, or advisory opinion to the transaction or activity to
be clear and unambiguous.
``(b) Procedure for Response.--
``(1) Analysis by staff.--The staff of the Commission shall
analyze each request submitted under this section. If the staff
believes that the standard described in subsection (a) is met
with respect to the request, the staff shall circulate a
statement to that effect together with a draft response to the
request to the members of the Commission.
``(2) Issuance of response.--Upon the expiration of the 3-day
period beginning on the date the statement and draft response
is circulated (excluding weekends or holidays), the Commission
shall issue the response, unless during such period any member
of the Commission objects to issuing the response.
``(c) Effect of Response.--
``(1) Safe harbor.--Notwithstanding any other provisions of
law, any person who relies upon any provision or finding of a
written response issued under this section and who acts in good
faith in accordance with the provisions and findings of such
response shall not, as a result of any such act, be subject to
any sanction provided by this Act or by chapter 95 or chapter
96 of the Internal Revenue Code of 1986.
``(2) No reliance by other parties.--Any written response
issued by the Commission under this section may only be relied
upon by the person involved in the specific transaction or
activity with respect to which such response is issued, and may
not be applied by the Commission with respect to any other
person or used by the Commission for enforcement or regulatory
purposes.
``(d) Publication of Requests and Responses.--The Commission shall
make public any request for a written response made, and the responses
issued, under this section. In carrying out this subsection, the
Commission may not make public the identity of any person submitting a
request for a written response unless the person specifically
authorizes to Commission to do so.
``(e) Compilation of Index.--The Commission shall compile, publish,
and regularly update a complete and detailed index of the responses
issued under this section through which responses may be found on the
basis of the subjects included in the responses.''.
(2) Conforming amendment.--Section 307(a)(7) (2 U.S.C.
437d(a)(7)) is amended by striking ``of this Act'' and
inserting ``and other written responses under section 308A''.
(c) Standard Form for Complaints; Stronger Disclaimer Language.--
(1) Standard form.--Section 309(a)(1) (2 U.S.C. 437g(a)(1))
is amended by inserting after ``shall be notarized,'' the
following: ``shall be in a standard form prescribed by the
Commission, shall not include (but may refer to) extraneous
materials,''.
(2) Disclaimer language.--Section 309(a)(1) (2 U.S.C.
437g(a)(1)) is amended--
(A) by striking ``(a)(1)'' and inserting
``(a)(1)(A)''; and
(B) by adding at the end the following new
subparagraph:
``(B) The written notice of a complaint provided by the Commission
under subparagraph (A) to a person alleged to have committed a
violation referred to in the complaint shall include a cover letter (in
a form prescribed by the Commission) and the following statement: `The
enclosed complaint has been filed against you with the Federal Election
Commission. The Commission has not verified or given official sanction
to the complaint. The Commission will make no decision to pursue the
complaint for a period of at least 15 days from your receipt of this
complaint. You may, if you wish, submit a written statement to the
Commission explaining why the Commission should take no action against
you based on this complaint. If the Commission should decide to seek
additional information, you will be notified and be given further
opportunity to respond.' ''.
SEC. 302. BANNING ACCEPTANCE OF CASH CONTRIBUTIONS GREATER THAN $100.
Section 315 (2 U.S.C. 441a) is amended by adding at the end the
following new subsection:
``(i) No candidate or political committee may accept any
contributions of currency of the United States or currency of any
foreign country from any person which, in the aggregate, exceed
$100.''.
SEC. 303. DEPOSIT OF CERTAIN CONTRIBUTIONS AND DONATIONS TO BE RETURNED
TO DONORS IN TREASURY ACCOUNT.
(a) In General.--Title III (2 U.S.C. 431 et seq.) is amended by
adding at the end the following new section:
``treatment of certain contributions and donations to be returned to
donors
``Sec. 323. (a) Transfer to Commission.--
``(1) In general.--Notwithstanding any other provision of
this Act, if a political committee intends to return any
contribution or donation given to the political committee, the
committee shall transfer the contribution or donation to the
Commission if--
``(A) the contribution or donation is in an amount
equal to or greater than $500 (other than a
contribution or donation returned within 90 days of
receipt by the committee); or
``(B) the contribution or donation was made in
violation of section 315, 316, 317, 319, or 320 (other
than a contribution or donation returned within 90 days
of receipt by the committee).
``(2) Information included with transferred contribution or
donation.--A political committee shall include with any
contribution or donation transferred under paragraph (1)--
``(A) a request that the Commission return the
contribution or donation to the person making the
contribution or donation; and
``(B) information regarding the circumstances
surrounding the making of the contribution or donation
and any opinion of the political committee concerning
whether the contribution or donation may have been made
in violation of this Act.
``(3) Establishment of escrow account.--
``(A) In general.--The Commission shall establish a
single interest-bearing escrow account for deposit of
amounts transferred under paragraph (1).
``(B) Disposition of amounts received.--On receiving
an amount from a political committee under paragraph
(1), the Commission shall--
``(i) deposit the amount in the escrow
account established under subparagraph (A); and
``(ii) notify the Attorney General and the
Commissioner of the Internal Revenue Service of
the receipt of the amount from the political
committee.
``(C) Use of interest.--Interest earned on amounts in
the escrow account established under subparagraph (A)
shall be applied or used for the same purposes as the
donation or contribution on which it is earned.
``(4) Treatment of returned contribution or donation as a
complaint.--The transfer of any contribution or donation to the
Commission under this section shall be treated as the filing of
a complaint under section 309(a).
``(b) Use of Amounts Placed in Escrow To Cover Fines and Penalties.--
The Commission or the Attorney General may require any amount deposited
in the escrow account under subsection (a)(3) to be applied toward the
payment of any fine or penalty imposed under this Act or title 18,
United States Code, against the person making the contribution or
donation.
``(c) Return of Contribution or Donation After Deposit in Escrow.--
``(1) In general.--The Commission shall return a contribution
or donation deposited in the escrow account under subsection
(a)(3) to the person making the contribution or donation if--
``(A) within 180 days after the date the contribution
or donation is transferred, the Commission has not made
a determination under section 309(a)(2) to seek
additional information regarding whether or not the
contribution or donation was made in violation of this
Act; or
``(B)(i) the contribution or donation will not be
used to cover fines, penalties, or costs pursuant to
subsection (b); or
``(ii) if the contribution or donation will be used
for those purposes, that the amounts required for those
purposes have been withdrawn from the escrow account
and subtracted from the returnable contribution or
donation.
``(2) No effect on status of investigation.--The return of a
contribution or donation by the Commission under this
subsection shall not be construed as having an effect on the
status of an investigation by the Commission or the Attorney
General of the contribution or donation or the circumstances
surrounding the contribution or donation, or on the ability of
the Commission or the Attorney General to take future actions
with respect to the contribution or donation.''.
(b) Amounts Used to Determine Amount of Penalty for Violation.--
Section 309(a) (2 U.S.C. 437g(a)) is amended by inserting after
paragraph (9) the following new paragraph:
``(10) For purposes of determining the amount of a civil penalty
imposed under this subsection for violations of section 323, the amount
of the donation involved shall be treated as the amount of the
contribution involved.''.
(c) Donation Defined.--Section 323, as added by subsection (a), is
amended by adding at the end the following:
``(d) Donation Defined.--In this section, the term `donation' means a
gift, subscription, loan, advance, or deposit of money or anything else
of value made by any person to a national committee of a political
party or a Senatorial or Congressional Campaign Committee of a national
political party for any purpose, but does not include a contribution
(as defined in section 301(8)).''.
(d) Disgorgement Authority.--Section 309 (2 U.S.C. 437g) is amended
by adding at the end the following new subsection:
``(e) Any conciliation agreement, civil action, or criminal action
entered into or instituted under this section may require a person to
forfeit to the Treasury any contribution, donation, or expenditure that
is the subject of the agreement or action for transfer to the
Commission for deposit in accordance with section 323.''.
(e) Effective Date.--The amendments made by subsections (a), (b), and
(c) shall apply to contributions or donations refunded on or after the
date of the enactment of this Act, without regard to whether the
Federal Election Commission or Attorney General has issued regulations
to carry out section 323 of the Federal Election Campaign Act of 1971
(as added by subsection (a)) by such date.
SEC. 304. ALTERNATIVE PROCEDURES FOR IMPOSITION OF PENALTIES FOR
REPORTING VIOLATIONS.
(a) In General.--Section 309(a)(4) (2 U.S.C. 437g(a)(4)) is amended--
(1) in subparagraph (A)(i), by striking ``clause (ii)'' and
inserting ``clause (ii) and subparagraph (C)''; and
(2) by adding at the end the following new subparagraph:
``(C)(i) Notwithstanding subparagraph (A), in the case of a violation
of any requirement under this Act relating to the reporting of receipts
or disbursements, the Commission may--
``(I) find that a person committed such a violation on the
basis of information obtained pursuant to the procedures
described in paragraphs (1) and (2); and
``(II) based on such finding, require the person to pay a
civil money penalty in an amount determined under a schedule of
penalties which is established and published by the Commission
and which takes into account the amount of the violation
involved, the existence of previous violations by the person,
and such other factors as the Commission considers appropriate
(but which in no event exceeds $20,000).
``(ii) The Commission may not make any determination adverse to a
person under clause (i) until the person has been given written notice
and an opportunity to be heard before the Commission.
``(iii) Any person against whom an adverse determination is made
under this subparagraph may obtain a review of such determination by
filing in the United States District Court for the District of Columbia
or for the district in which the person resides or transacts business
(prior to the expiration of the 30-day period which begins on the date
the person receives notification of the determination) a written
petition requesting that the determination be modified or set aside.''.
(b) Conforming Amendment.--Section 309(a)(6)(A) (2 U.S.C.
437g(a)(6)(A)) is amended by striking ``paragraph (4)(A)'' and
inserting ``paragraph (4)''.
(c) Effective Date.--The amendments made by this section shall apply
with respect to violations occurring on or after January 1, 2001.
SEC. 305. ABOLITION OF EX OFFICIO MEMBERSHIP OF CLERK OF HOUSE OF
REPRESENTATIVES AND SECRETARY OF SENATE ON
COMMISSION.
Section 306(a) (2 U.S.C. 437c(a)) is amended--
(1) in paragraph (1), by striking ``the Secretary of the
Senate and the Clerk'' and all that follows through ``right to
vote, and''; and
(2) in paragraphs (3), (4), and (5), by striking ``(other
than the Secretary of the Senate and the Clerk of the House of
Representatives)'' each place it appears.
SEC. 306. BROADER PROHIBITION AGAINST FORCE AND REPRISALS.
Section 316(b)(3) (2 U.S.C. 441b(b)(3)) is amended--
(1) by redesignating subparagraphs (A) through (C) as
subparagraphs (B) through (D); and
(2) by inserting before subparagraph (B) (as so redesignated)
the following new subparagraph:
``(A) for such a fund to cause another person to make a
contribution or expenditure by physical force, job
discrimination, financial reprisals, or the threat of force,
job discrimination, or financial reprisal;''.
SEC. 307. SIGNATURE AUTHORITY OF MEMBERS OF COMMISSION FOR SUBPOENAS
AND NOTIFICATION OF INTENT TO SEEK ADDITIONAL
INFORMATION.
(a) Issuance of Subpoenas.--Section 307(a)(3) (2 U.S.C. 437d(a)(3))
is amended by striking ``signed by the chairman or the vice chairman''
and inserting ``signed by any member of the Commission''.
(b) Notifications of Intent to Seek Additional Information.--Section
309(a)(2) (2 U.S.C. 437g(a)(2)) is amended by striking ``through its
chairman or vice chairman'' and inserting ``through any of its
members''.
TITLE IV--SIMPLIFYING AND CLARIFYING FEDERAL ELECTION LAW
SEC. 401. APPLICATION OF AGGREGATE CONTRIBUTION LIMIT ON CALENDAR YEAR
BASIS DURING NON-ELECTION YEARS.
Section 315(a)(3) (2 U.S.C. 441a(a)(3)) is amended by striking the
second sentence.
SEC. 402. TREATMENT OF LINES OF CREDIT OBTAINED BY CANDIDATES AS
COMMERCIALLY REASONABLE LOANS.
Section 301(8)(B) (2 U.S.C. 431(8)(B)) is amended--
(1) by striking ``and'' at the end of clause (xiii);
(2) by striking the period at the end of clause (xiv) and
inserting ``; and''; and
(3) by adding at the end the following new clause:
``(xv) any loan of money derived from an advance on a
candidate's brokerage account, credit card, home equity line of
credit, or other line of credit available to the candidate, if
such loan is made in accordance with applicable law and under
commercially reasonable terms and if the person making such
loan makes loans in the normal course of the person's
business.''.
SEC. 403. REPEAL SECRETARY OF COMMERCE REPORTS ON DISTRICT-SPECIFIC
POPULATION.
(a) Repeal Report by Secretary of Commerce on District-Specific
Voting Age Population.--Section 315(e) (2 U.S.C. 441a(e)) is amended by
striking ``States, of each State, and of each congressional district''
and inserting ``States and of each State''.
(b) Deadline for Reporting of Certain Annual Estimates to
Commission.--
(1) Price index.--Section 315(c)(1) (2 U.S.C. 441a(c)(1)) is
amended--
(A) by striking ``At the beginning'' and inserting
``Not later than February 15''; and
(B) by striking ``as there become available necessary
data from the Bureau of Labor Statistics of the
Department of Labor,''.
(2) Voting age population.--Section 315(e) (2 U.S.C. 441a(e))
is amended by striking ``During the first week of January 1975,
and every subsequent year,'' and inserting ``Not later than
February 15 of 1975 and each subsequent year,''.
SEC. 404. TECHNICAL CORRECTION REGARDING TREATMENT OF HONORARIA.
Section 301(8)(B) (2 U.S.C. 431(8)(B)), as amended by section 402, is
further amended--
(1) by adding ``and'' at the end of clause (xiii);
(2) by striking clause (xiv); and
(3) by redesignating clause (xv) as clause (xiv).
TITLE V--EFFECTIVE DATE
SEC. 501. EFFECTIVE DATE.
Except as otherwise specifically provided, this Act and the
amendments made by this Act shall apply with respect to elections
occurring after January 2001.
Purpose of the Legislation
The purpose of H.R. 2668, the Campaign Reform and Integrity
Act of 1999, is to reform the federal election process by: (1)
providing citizens with timely information about campaign
contributions and expenditures; (2) fostering election rules
that encourage candidates to run for office and; (3) protecting
the integrity of American elections from foreign influences.
In a representative democracy, the critical link between
the people and their government is a system of free, open, and
honest elections through which people choose who will represent
their views in matters of public policy. Election laws should
encourage, not discourage, persons from running for public
office.
No element of our electoral process is more important than
the Constitutionally guaranteed rights of free speech and
assembly. The ability of individuals and candidates to speak
their views freely and vigorously provides a strong foundation
for competitive elections and is the ultimate protection
against tyranny. The U.S. Supreme Court has held that excessive
regulation of campaign processes interferes with these
Constitutional rights. In the landmark case of Buckley v. Valeo
(1976), the Supreme Court held that mandatory limits on
campaign expenditures are unconstitutional and further held
that only ``corruption or the appearance of corruption'' could
justify limits on campaign contributions.
We believe these objectives can be accomplished without any
infringements on those freedoms.
Summary of the Legislation
strengthen the ban on foreign contributions while protecting rights of
U.S. citizens
This bill clarifies one of the principal areas of murkiness
that fostered the abuses of 1996, thus closing a major loophole
in the law. H.R. 2668 states clearly that the ban on foreign
contributions extends to all campaign-related disbursements,
including soft money. It is similar to provisions in bills
offered by Reps. Shays (H.R. 417), Burton (H.R. 1747), Gillmor
(H.R. 1778), and Hoyer (H.R. 1818). The Administration and a
Federal District Judge have interpreted current law as banning
only federal contributions from foreign sources. This provision
bans any disbursement that would include donations or spending
for any federal, state or local campaign.
The bill also seeks to insure that contributed funds come
from U.S. sources and protects the rights of all Americans to
contribute. It codifies current Federal Election Commission
(FEC) regulations that require PAC, corporation or union
contributions to come from U.S. sources, i.e., generated from
business activities within the U.S. (Also included in the
Gillmor bill). And it protects the existence of PACs sponsored
by U.S. subsidiaries of foreign-owned corporations, so long as
their contributions come from eligible U.S. voters (included in
the Gillmor and Shays bills). These sections effective upon
enactment.
improve and expedite disclosure
H.R. 2668 would greatly improve public access to campaign
funding information. It requires electronic filing of
contributions and expenditures by committees raising or
spending over $50,000 in an election cycle (also included in
the Hutchinson bill, with similar provisions in the Doolittle
(H.R. 1922), Hoyer and Shay's bills). All major committees
would be required to file reports electronically, and the FEC
would be required to post such reports on the Internet within
24 hours after they are received.
Also, to expedite disclosure in the period leading up to an
election, the bill requires electronic filing within 24 hours
during the last 90 days of an election, identifying: (1)
contributions of $200 or more by committees that file
electronically; and (2) independent expenditures by committees
that have spent more than $10,000 in the current or either two
prior election cycles. (The Doolittle bill has a similar
provision, but applies to all contributions in the last 90
days.)
The bill also would change reporting from a calendar year
basis to an election cycle basis (as recommended by the FEC and
by the Hoyer bill). This would reduce confusion and costly
errors in many campaigns' FEC filings. Reports would aggregate
all contributions made to date in an election cycle, rather
than just the calendar year, so accidental receipt of excess
contributions would be easier for candidates to prevent.
Disclosure would also be enhanced by a requirement to
report secondary payments by major entities (recommended by the
FEC and the Dreier bill, H.R. 32). Major consultants and
campaign subcontractors such as advertising agencies would be
required to report their expenditures to the campaign for
inclusion in the campaign's report, so that campaigns could not
hide expenditures by subcontracting them. There is a $5,000
threshold to ensure that small entities are not unduly
burdened.
Another area targeted for greater disclosure pertains to
soft money. H.R. 2668 requires national parties to disclose to
the FEC any transfers of funds to state and local affiliates,
and it requires state and local parties to file with the FEC
copies of any reports required under their respective state or
local laws (contained in the Doolittle bill). This provision
would increase the information available to the public on state
and local political party finances, without usurping state
prerogatives to regulate their own elections.
The Committee's bill requires post-election reports to show
cumulative contributions and expenditures (as recommended by
the FEC and the Dreier bill). This will enable the public to
see more readily the total amounts contributed and spent in
each primary and general election. Similarly, the bill requires
data on aggregate contributions in itemized contribution
reports. When a particular contribution is reported, the report
would also list the total contribution from that particular
person in that election cycle.This will help campaigns to avoid
accidental acceptance of contributions in amounts over the contribution
limits.
Finally, the bill ensures the permissibility of FAX and
electronic mail to file reports, to allow candidates and
committees not required to file electronically to use the
latest technology for reporting (recommended by the FEC and the
Hoyer bill).
improve and streamline fec enforcement
The Committee's bill changes FEC standards for initiation
of actions from ``reason to believe'' a violation has been
committed to ``reason to seek additional information''
regarding a possible violation, and requires a standard
complaint form with a revised FEC disclaimer (a modified FEC
recommendation). These provisions ensure that when the FEC
announces the beginning of a more detailed inquiry into a
possible violation, the phraseology does not imply guilt of the
subject of the inquiry. When complaints are filed, the notice
will contain language indicating that filing of the complaint
does not reflect any verification or official sanction by the
FEC regarding the merits of the compliant.
The bill also establishes procedures for written responses
to questions on election law by the FEC (included in the Dreier
bill). Where the answers to election law questions are clear
and unambiguous, the FEC could use a procedure for providing an
answer in writing that the requester can rely upon. Currently
such answers can be obtained on a toll-free telephone line, but
they are not in writing, and the person requesting the answer
cannot rely on them. ``Safe harbor protection'' would be
afforded anyone who relies in good faith on a written response.
Easing the regulatory burden on the FEC was the goal of
another of the bill's provisions, to allow administrative
procedures for imposing fines of up to $20,000 for reporting
violations (as recommended in the recent Independent Audit).
This creates a simplified procedure for the FEC to
administratively handle reporting violations. Before imposing a
fine, the FEC must provide an opportunity for the person to be
heard before the Commission, and the person has the right to a
court appeal.
To deal with the complicated issues surrounding
contributions of questionable legality, the Committee bill
adopts a proposal by Rep. Gekas in the 105th Congress (H.R.
1494), which is also contained in the Shays measure. This
``tainted money'' provision requires that possibly illegal
contributions, held longer than 90 days, be returned to the FEC
and held in escrow instead of being returned directly to the
donor, until the nature of any violation has been established.
other provisions
The bill contains a number of provisions recommended by the
FEC and contained in the Hoyer bill (H.R. 1818).
First, it bans acceptance of cash contributions over $100;
the law now only bans making them.
Second, it clarifies that the aggregate individual
contribution limit ($25,000 per year) is to be applied on a
calendar year basis during non-election years. Current law
applies a contribution to a candidate to the year of the next
election, instead of when it was made; this creates confusion
about which year to apply a contribution and creates accidental
violations that consume needless energy and time at the FEC.
Third, the bill treats lines of credit as commercially
reasonable loans. New forms of credit such as credit card
advances and home equity loans would be allowed for campaign
purposes, if they were offered on commercially reasonable
terms.
Fourth, the bill broadens the law's prohibition against
force and reprisals. Current law prohibits coerced
contributions or expenditures by a PAC, but not necessarily
contributions to a PAC. This would prohibit a corporation or
labor union from using coercion to force contributions by an
individual to a PAC or to a candidate.
Fifth, the bill repeals a requirement for the Secretary of
Commerce to file reports on congressional district population
with the FEC. This was originally intended to be used to
calculate congressional district spending limits enacted in
1974, but struck down by the Supreme Court in the 1976 Buckley
ruling.
Sixth, H.R. 2668 deletes references to honoraria in the
FECA, as the FEC no longer has jurisdiction in this area.
Finally, the bill removes language authorizing ex officio
FEC membership of the Clerk of the House and Secretary of the
Senate (as recommended by the FEC). House and Senate rules no
longer provide for membership of the Clerk and the Secretary;
these provisions in federal election law are outdated and
should be removed.
section-by-section description
Section 1. Short title
(a) Entitles bill the ``Campaign Reform and Election
Integrity Act of 1999.''
(b) Table of contents.
Section 2. References in act
(a) States that references in bill are to Federal Election
Campaign Act of 1971, unless otherwise stated.
Title I--Ban on Foreign Contributions
Section 101. Extending the ban on foreign contributions to
all campaign disbursements; protecting equal
participation of eligible voters
(a) Adds soft money disbursements and independent
expenditures to prohibited election-related financing by
foreign nationals.
(b) Codifies regulations prohibiting contributions or
donations to candidates, committees, and parties from funds not
generated from business activities in the U.S. of an entity
``organized under or created by the laws of the U.S.''
(c) States that nothing in the Act prohibits anyone
eligible to vote in federal elections from contributing or
spending money in support of candidates, including through a
separate segregated fund set up by his/her employer or union.
(d) Makes this section effective on date of enactment.
Title II--Improving Reporting of Information
Section 201. Requiring electronic filing for certain
activity and expediting its reporting
(a) Requires electronic disclosure within 24 hours during
last 90 days of election of contributions of $200 or more to
committees required to file electronically, and of independent
expenditures (if total independent expenditures by spender
reached at least $10,000 in that or either two previous
election cycles), with immediate Internet posting by FEC.
(b) Requires electronic disclosure by all committees with
aggregate election cycle contributions or expenditures of at
least $50,000, with FEC to certify private sector software for
such filings.
(c) Requires candidate committee notices of contributions
of $1,000 or more in the last 20 days of an election to cover
activity through poll closing (rather than 48 hours before),
and requires filing within 24 hours of receipt (rather than 48
hours), or, if earlier, by midnight of the day of deposit.
(d) Requires receipt of reports within 24 hours of
independent expenditures made in the last 20 days of an
election.
(e) Requires reporting on election cycle, rather than
calendar year basis, to facilitate monitoring of adherence to
contribution limits. Defines election cycle as beginning on the
day after the most recent general election for that office and
ending on the date of that election.
(f) Allows 24-hour notices to be filed by FAX or email.
Section 202. Requiring reporting of secondary payments and
of cumulative information
(a) Requires record-keeping and disclosure by political
committees of secondary payees once an intermediate agent
spends at least $5,000 in that election cycle for goods and
services in support of a candidate.
(b) Requires post-election reports to include cumulative
information on contributions and expenditures as of Election
Day.
(c) Requires itemized receipt reports to include total
contributions by a contributor in that election.
Section 203. Requiring disclosure of certain soft money by
political parties
(a) Requires disclosure by national parties of all funds
transferred to state and local affiliates, whether or not funds
are regulated by federal election law.
(b) Requires state and local parties to file copies with
the FEC of any disclosure reports required under state and
local laws.
Title III--Strengthening Enforcement and Administration of Federal
Election Commission
Section 301. Changing standards for initiating actions and
allowing written responses to certain questions
(a) Changes standard for initiating action from ``reason to
believe'' to ``reason to seek additional information''
regarding possible violations.
(b) Requires FEC to issue written responses to questions
where the law is clear and unambiguous, and applies ``safe
harbor'' protection for anyone acting in good faith, relying on
written response. Requires FEC to publish requests and
responses and to compile an index thereof.
(c) Requires standard form for complaints. Requires clear
statements by FEC to the object of any complaint filed that the
matter is under investigation and has not been verified or
proven.
Section 302. Banning acceptance of cash contributions
greater than $100
(a) Prohibits receipt of cash contributions--in U.S. or
foreign currency--in excess of $100.
(b) Provides that money in the account may be used to
determine the amount of fines and penalties.
(c) Defines donation for the purposes of this section as
applicable only to national party committees.
(d) Permits conciliation agreement or other enforcement
action to require forfeiture to the Treasury of funds held in
escrow.
(e) Makes this section effective on date of enactment.
Section 303. Depositing certain contributions and donations
to be returned in Treasury escrow account
(a) Provides that contributions over $500 that a committee
intends to return (after 90 days of receipt) be placed in an
FEC escrow account, pending investigation of possible
violations.
(b) Provides that money in the account would be used toward
fines, penalties, and investigation costs.
(c) Provides that contributions in escrow account would be
returned to donors if no reason to seek further information
regarding a possible violation is found within 180 days of
deposit.
Section 304. Creating alternative procedures for imposing
penalties for reporting violations
(a) Allows FEC to create an administrative fine schedule
for minor reporting violations, taking into account amount of
violation (which may not exceed $20,000), any prior violations,
and other factors.
Section 305. Abolishing ex officio memberships on Federal
Election Commission
(a) Abolishes ex officio FEC membership of House Clerk and
Secretary of Senate.
Section 306. Broadening prohibition against force and
reprisals
(a) Broadens prohibition against force and reprisals by
separate segregated funds, to cover causing another person to
make a contribution or expenditure under said conditions.
Section 307. Giving signature authority to members of
Commission
Allows the issuance of (a) subpoenas and (b) notifications
of intent to seek additional information, with the signature of
any member of the Commission (not just the chair or vice
chair).
Title IV--Simplifying and Clarifying Federal Election Law
Section 401. Applying aggregate contribution limit on
calendar year basis in all years
(a) Applies contributions in an off-election year toward an
individual's aggregate limit for that year, not the election
year.
Section 402. Treating candidates' lines of credit as
commercially reasonable loans
(a) Exempts from ``contribution'' definition, candidate
loans based on lines of credit, such as an advance on a
candidate's credit card or home equity line of credit provided
that the loan is made under commercially reasonable terms and
in the normal course of business.
Section 403. Repealing reports on district-specific
population and changing deadlines for submitting
certain information to FEC
(a) Repeals requirement that Secretary of Commerce report
voting age population by congressional district.
(b) Requires price index and voting age population data by
February 15 of each year.
Section 404. Technical correction regarding treatment of
honoraria
(a) Deletes honoraria reference as exemption from
``contribution'' definition
Title V--Effective Date
Section 501. Effective with respect to elections occurring
after January 2001 except as otherwise provided.
Committee Consideration of the Legislation
Introduction and Referral
On Monday, August 2, 1999, Mr. Thomas, Mr. Ney, Mr.
Boehner, Mr. Ehlers, Mr. Mica and Mr. Ewing introduced H.R.
2668 that was referred to the Committee on House
Administration.
Hearings
The Committee on House Administration held four days of a
hearing on Campaign Reform over two months in 1999.
On June 17, 1999, the Committee held the first day of the
hearing on Campaign Reform. Members present: Mr. Boehner, Mr.
Ehlers, Mr. Mica, Mr. Ewing, Mr. Hoyer, and Mr. Davis.
Witnesses: Mr. Gilchrest testified on H.R. 593 and H.R. 594.
Mr. Calvert testified on H.R. 1880. Mr. Sabo testified on H.R.
1171.
On June 29, 1999, the Committee held the second day of the
hearing on Campaign Reform. Members present: Mr. Thomas, Mr.
Boehner, Mr. Ney, Mr. Mica, Mr. Ewing, Mr. Hoyer, Mr. Fattah,
and Mr. Davis. Witnesses: Mr. Shays testified on H.R. 417, Mr.
Hutchinson testified on H.R. 1867, Mr. Regula testified on H.R.
1641, Ms. Mink testified on H.R. 399 and H.R. 400, Mr. Gillmor
testified on H.R. 1778 (sharing time with Mr. Tanner), and Mr.
Andrews testified on H.R. 331.
On July 13, 1999, the Committee held the third day of the
hearing on Campaign Reform. Members present: Mr. Boehner, Mr.
Ney, Mr. Ewing, Mr. Hoyer, and Mr. Davis. Witnesses: Mr. Dreier
submitted written testimony on H.R. 32, Mr. Doolittle testified
on H.R. 1922, Mr. Burton testified on H.R. 1747, Mr. Bereuter
testified on H.R. 69, Mr. Pitts testified on H.R. 223, Mr.
Goodling testified on H.R. 2467, Mr. Price testified on H.R.
227, Mr. Paul testified on H.R. 2026 and H.R. 2027, and Mr.
Watkins testified on H.R. 696.
On July 22, 1999, the Committee held the fourth day of the
hearing on Campaign Reform. Members present: Mr. Thomas, Mr.
Boehner, Mr. Ehlers, Mr. Hoyer, Mr. Fattah, and Mr. Davis.
Witnesses: Roger Pilon, Director, Center for Constitutional
Studies, CATO Institute; Laura Murphy, Legislative Director,
American Civil Liberties Union; Don Simon, Acting President,
Common Cause; Jim Miller, Author of Monopoly Politics, former
Director OMB; Burt Neuborne, Director, Brennan Center for Law
and Justice; James Bopp, James Madison Center for Free Speech;
Bob Dahl, Fair Government Foundation; Paul Sullivan, Americans
Back in Charge Foundation; David O'Steen, Executive Director,
National Right to Life Committee; Cheryl Perrin.Executive
Director, Campaign for America; Amy Kauffman, Research Fellow, Hudson
Institute; and Kathleen Hall Jamieson, Dean, the Annenberg School of
Communication.
markup
On Monday August 2, 1999 the Committee met to mark up H.R.
2668, H.R. 417, H.R. 1867, and H.R. 1922. The Committee
favorably reported H.R. 2668, as amended, by voice vote a
quorum being present. During the markup six amendments were
offered by Mr. Hoyer. Mr. Hoyer's third amendment was agreed to
by unanimous consent.
amendment No. 1
Offered by Mr. Hoyer. The amendment consisted of two
sections: (1) required that all political action committees
raising or spending more than $100,000 per year file monthly
reports with the Federal Election Commission and; (2) provided
the option that all political action committees may file
monthly. The amendment was divided by unanimous consent. The
first section was rejected by a show of hands. The second
section was rejected by a show of hands.
amendment No. 2
Offered by Mr. Hoyer. The amendment authorized the Federal
Election Commission to audit a committee, for cause, for up to
one (1) year after an election. Rejected by recorded vote. As
required by Clause 3(b) of rule XIII the recorded vote is
reported below.
------------------------------------------------------------------------
Member Yes No Present
------------------------------------------------------------------------
Mr. Thomas.................... ............ X ............
Mr. Boehner................... ............ X ............
Mr. Ehlers.................... ............ X ............
Mr. Ney....................... ............ X ............
Mr. Mica...................... ............ ............ ............
Mr. Ewing..................... ............ X ............
Mr. Hoyer..................... X ............ ............
Mr. Fattah.................... X ............ ............
Mr. Davis..................... X ............ ............
-----------------------------------------
Total................... 3 5 ............
------------------------------------------------------------------------
amendment No. 3
Offered by Mr. Hoyer. The amendment authorized all FEC
Commissioner to sign subpoenas and reason-to-believe
notifications approved by the Commission. Agreed to by
unanimous consent.
amendment no. 4
Offered by Mr. Hoyer. The amendment increased eligibility
threshold for primary matching funds from 20 to 30 states,
eliminate state specific expenditure limits for primary
candidates, eliminate separate limit on expenditures for
fundraising for primary candidates, change eligibility
requirements for public financing, change deposit of repayments
into the Presidential Election Campaign Fund instead of the
general fund of the Treasury, and ban contributions to
Presidential candidates certified to receive public financing.
Withdrawn by Mr. Hoyer without objection.
amendment no. 5
Offered by Mr. Hoyer. The amendment provided an
authorization of $38.516 million for the Federal Election
Commission budget. Rejected by voice vote.
amendment no. 6
Offered by Mr. Hoyer. The amendment required the FEC to
update national voting system standards. Rejected by a show of
hands.
Need for the Legislation
The Committee is reporting out four measures addressing the
entire gamut of approaches to federal campaign finance reform.
Three of them make fairly sweeping changes in the law--H.R. 417
(Shays-Meehan), H.R. 1867 (Hutchinson), and H.R. 1922
(Doolittle)--each taking vastly different approaches from one
another. All of these are well intended, and all seek to reform
federal campaign finance laws in accord with the philosophies
of their sponsors. Supporters of each bill believe that it,
maybe alone, constitutes ``true reform,'' the changes really
needed to resolve the seemingly never-ending campaign finance
debate. Too often over the years, and increasingly so it seems,
the good has been seen as the enemy of the perfect when it
comes to campaign finance reform.
And while the debate continues, certain problems magnify in
their seriousness, and yet nothing is enacted. It has been 20
years since Congress has actually enacted any significant
changes in the laws first passed in the 1970s. While waiting
for a bipartisan consensus, so critical in this area, to
develop, countless, sorely needed improvements in the operation
of current law go unmade.
The fourth bill the Committee is reporting--H.R. 2668
(Chairman Thomas)--offers Congress the chance to make many of
the changes to improve current law around which consensus has
already developed. It contains a wide array of recommendations
culled from bills introduced by Democrats and Republicans,
endorsed by the FEC, or contained in recommendations of the
recent Independent Audit of the FEC. The Committee believes
that this bill will move the ball forward in creating a more
workable, rational regulatory system.
While the Committee is reporting H.R. 2668 favorably--and
unanimously, it is sending forth the Shays-Meehan bill with an
unfavorable recommendation. We believe that it is unbalanced,
unworkable, and, most of all, unconstitutional. We find merit
in the twoother bills--H.R. 1867 and H.R. 1922--which we are
reporting without recommendation. We welcome the vigorous debate that
the House will undoubtedly have on these measures. But, once again,
while awaiting the much-desired consensus on sweeping reforms, we
commend to your attention H.R. 2668, as a first step toward addressing
the important issues raised in the conduct of our elections and their
financing.
Matters Required Under the Rules of the House
committee record votes
Clause 3(b) of House rule XIII requires the results of each
record vote on an amendment or motion to report, together with
the names of those voting for and against, to be printed in the
committee report. The only recorded vote requested during
consideration of H.R. 2668 occurred on Amendment No. 2 offered
by Mr. Hoyer.
------------------------------------------------------------------------
Member Yes No Present
------------------------------------------------------------------------
Mr. Thomas.................... ............ X ............
Mr. Boehner................... ............ X ............
Mr. Ehlers.................... ............ X ............
Mr. Ney....................... ............ X ............
Mr. Mica...................... ............ ............ ............
Mr. Ewing..................... ............ X ............
Mr. Hoyer..................... X ............ ............
Mr. Fattah.................... X ............ ............
Mr. Davis..................... X ............ ............
-----------------------------------------
Total................... 3 5 ............
------------------------------------------------------------------------
committee oversight findings
In compliance with clause 3(c)(1) of rule XIII of the Rules
of the House of Representatives, the Committee states that the
findings and recommendations of the Committee, based on
oversight activities under clause 2(b)(1) of rule X of the
Rules of the House of Representatives, are incorporated in the
descriptive portions of this report.
oversight findings of committee on government reform
The Committee states, with respect to clause 3(c)(4) of
rule XIII of the Rules of the House of Representatives, that
the Committee on Government Reform and Oversight did not submit
findings or recommendations based on investigations under
clause 4(c)(2) of rule X of the Rules of the House of
Representatives.
constitutional authority
In compliance with clause 3(d)(1) of rule XIII, the
Committee states that Article I, Section 4 of the U.S.
Constitution grants Congress the authority to make laws
governing the time, place and manner of holding Federal
elections.
federal mandates
The Committee states, with respect to section 423 of the
Congressional Budget Act of 1974, that the bill does not
include any significant Federal mandate.
preemption clarification
Section 423 of the Congressional Budget Act of 1974
requires the report of any committee on a bill or joint
resolution to include a committee statement on the extent to
which the bill or joint resolution is intended to preempt state
or local law. The Committee states that H.R. 2668 is not
intended to preempt any state or local law.
statement on budget authority and related items
The bill does not provide for new budget authority.
committee cost estimate
Clause 3(c)(2) of rule XIII requires each committee report
that accompanies a measure providing new budget authority, new
spending authority, or new credit authority or changing
revenues or tax expenditures to contain a cost estimate, as
required by section 308(a)(1) of the Congressional Budget Act
of 1974, as amended and, when practicable with respect to
estimates of new budget authority, a comparison of the total
estimated funding level for the relevant program (or programs)
to the appropriate levels under current law.Clause 3(d)(2) of
rule XIII requires committees to include their own cost estimates in
certain committee reports, which include, when practicable, a
comparison of the total estimated funding level for the relevant
program (or programs) with the appropriate levels under current law.
The Committee adopts as its own the cost estimate prepared
by the Director of the Congressional Budget Office, pursuant to
section 403 of the Congressional Budget Act of 1974.
Congressional Budget Office Cost Estimate
In compliance with clause 3(c)(2) of rule XIII of the Rules
of the House of Representatives, the Committee sets forth, with
respect to the bill, the following estimate and comparison
prepared by the Director of the Congressional Budget Office
under section 403 of the Congressional Budget Act of 1974:
August 4, 1999.
Hon. William M. Thomas,
Chairman Committee on House Administration, House of Representatives,
Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 2668, the Campaign
Reform and Election Integrity Act of 1999.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contacts are John R.
Righter (for federal costs) and John Harris (for the private-
sector impact).
Sincerely,
Dan L. Crippen, Director.
Enclosure.
H.R. 2668 would make numerous amendments to the Federal
Election Campaign Act of 1971, including:
(1) banning political contributions by noncitizens,
(2) expanding the reporting of information to the
Federal Election Commission (FEC),
(3) requiring daily disclosure by political
committees of certain contributions and expenditures at
the end of an election cycle,
(4) requiring the electronic filing of information
for campaigns that spend or raise more than $50,000,
(5) requiring political committees to temporarily
deposit with the Treasury certain contributions to be
returned to the donor pending investigation by the FEC
of possible violations, and
(6) authorizing the FEC to create an administrative
fine schedule for minor reporting violations.
Subject to the availability of appropriated funds, CBO
estimates that implementing H.R. 2668 would cost the FEC about
$1 million in fiscal year 2000. In future years, the bill might
increase or decrease costs to the FEC, but CBO estimates that
the net change in costs is not likely to be significant.
Enacting the bill also would increase collections of fines
and penalties, but CBO estimates that any such increase would
not be significant. Because the bill would affect receipts,
pay-as-you-go procedures would apply.
H.R. 2668 contains no intergovernmental mandates as defined
in the Unfunded Mandates Reform Act (UMRA) and would impose no
costs on state, local, or tribal governments. The bill would
impose new private-sector mandates on individuals, businesses,
candidates for federal office, and political parties. CBO has
not yet completed an estimate of the costs of these mandates,
but will provide such an estimate at a later date.
Estimated cost to the Federal Government: CBO estimates
that implementing H.R. 2668 would increase discretionary
spending for administrative costs of the FEC by about $1
million in fiscal year 2000. For future years, CBO estimates
that the net change in FEC costs would probably not be
significant. Implementing the bill would also affect receipts,
but CBO estimates that the annualamounts of such changes are
also not likely to be significant. The cost of this legislation fall
within budget function 800 (general government).
Discretionary Spending.--After the 2000 cycle for federal
elections, H.R. 2668 would require that political committees
with aggregate contributions or expenditures of $50,000 or more
file their reports electronically with the FEC. During the 90
days preceding an election, the bill would require that
committees report daily on any contribution of $200 or more
that they receive and that individuals report daily on certain
types of expenditures in support of or against a candidate or
candidates. The FEC would be required to process and post the
information immediately on its Internet site. In addition, the
bill would make several minor changes in how the FEC
administers and investigates violations of the Federal Election
Campaign Act.
Based on information from the FEC, and subject to the
availability of appropriated funds, CBO estimates that
implementing H.R. 2668 cost the FEC about $1 million in fiscal
year 2000. This cost would cover the one-time expenses of
reconfiguring the FED's information systems to handle the
increased workload from accepting and processing daily reports,
as well as writing new regulations implementing the bill's
provisions and printing and mailing materials informing
candidates and political committees of the new requirements.
In future years, the FEC would have to monitor political
parties' compliance with the bill's provisions and comply with
the bill's changes in issuing opinions and investigating
possible violations. The increase in costs from complying with
the provisions would be offset by the bill's provision allowing
the FEC to streamline its investigation of certain reporting
requirements. CBO estimates that the net change in such costs
would not be significant.
Government Receipts.--Enacting H.R. 2668 would likely
increase collections of fines and penalties for violations of
campaign finance law. This bill also would require that
campaigns deposit certain contributions with the Treasury,
which could then be applied toward any fines or penalties, and
would allow the FEC to administer an alternative fine schedule
for minor reporting violations. CBO estimates that the
additional collections of penalties and fines would not be
significant.
Escrow Fund.--H.R. 2668 would require political committees
to deposit in an escrow fund at the Treasury any contribution
or donation they receive that is equal to or greater than $500
and that the committee has not returned within 90 days of its
receipt. The contribution would be held pending an
investigation by the FEC. Depending on the results of that
investigation, the contribution could be returned--with
interest--to the donor, applied toward any fines, penalties, or
costs associated with the investigation, or some combination of
the two. The FEC would have 180 days to complete its
investigation. Deposits to or withdrawals from the escrow fund
would not be considered budgetary transactions. However, the
bill specifies that some of the amounts deposited into the
escrow fund could be used to offset costs of FEC
investigations. Any such use of escrow funds would affect
direct spending, but CBO expects that the amounts involved
would be less than $500,000 a year.
Pay-as-you-go considerations: The Balanced Budget and
Emergency Deficit Control Act specifies pay-as-you-go
procedures for legislation affecting direct spending or
receipts. These procedures would apply to H.R. 2668 because it
could affect both direct spending and receipts, but CBO
estimates that the annual of such changes would not be
significant.
Estimated impact on State, local, and tribal governments:
H.R. 2668 contains no intergovernmental mandates as defined in
UMRA and would impose no costs on state, local, or tribal
governments.
Estimated impact on the private sector: The bill would
impose new private-sector mandates on individuals, businesses,
candidates for federal office, and political parties. CBO has
not yet completed an estimate of the costs of these mandates,
but will provide such an estimate at a later date.
Estimate prepared by: Federal costs: John R. Righter;
Impact on the private sector: John Harris.
Estimate approved by: Robert A. Sunshine, Deputy Assistant
Director for Budget Analysis.
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italic, existing law in which no change is
proposed is shown in roman):
FEDERAL ELECTION CAMPAIGN ACT OF 1971
* * * * * * *
TITLE III--DISCLOSURE OF FEDERAL CAMPAIGN FUNDS
definitions
Sec. 301. When used in this Act:
(1) * * *
* * * * * * *
(8)(A) * * *
(B) The term ``contribution'' does not include--
(i) * * *
* * * * * * *
(xiii) payments made by a candidate or the authorized
committee of a candidate as a condition of ballot
access and payments received by any political party
committee as a condition of ballot access; and
[(xiv) any honorarium (within the meaning of section
323 of this Act).]
(xiv) any loan of money derived from an advance on a
candidate's brokerage account, credit card, home equity
line of credit, or other line of credit available to
the candidate, if such loan is made in accordance with
applicable law and under commercially reasonable terms
and if the person making such loan makes loans in the
normal course of the person's business.
* * * * * * *
[(19) The term ``Act'' means the Federal Election Campaign
Act of 1971 as amended.]
(19) The term ``Internet'' means the international computer
network of both Federal and non-Federal interoperable packet-
switched data networks.
(20) Election cycle.--Except as the Commission may otherwise
provide, the term ``election cycle'' means, with respect to an
election, the period beginning on the day after the date of the
most recent general election for the office involved and ending
on the date of the election.
organization of political committees
Sec. 302. (a) * * *
* * * * * * *
(j) A person described in section 304(b)(5)(A) who makes
expenditures which aggregate $5,000 or more in an election
cycle to other persons (not including employees) who provide
goods or services to a candidate or a candidate's authorized
committees shall provide to a political committee the
information necessary to enable the committee to report the
information described in such section.
* * * * * * *
reports
Sec. 304. (a)(1) * * *
* * * * * * *
(5) If a designation, report, or statement filed pursuant to
this Act (other than under paragraph (2)(A)(i) or [(4)(A)(ii)]
or (4)(A)(ii), or the second sentence of subsection (c)(2) is
sent by registered or certified mail, the United States
postmark shall be considered the date of filing of the
designation, report, or statement.
(6)(A) The principal campaign committee of a candidate shall
notify the Secretary or the Commission, and the Secretary of
State, as appropriate, in writing, of any contribution of
$1,000 or more received by any authorized committee of such
candidate [after the 20th day, but more than 48 hours before
any election] during the period which begins on the 20th day
before an election and ends at the time the polls close for
such election. This notification shall be made within [48
hours] 24 hours (or, if earlier, by midnight of the day on
which the contribution is deposited) after the receipt of such
contribution and shall include the name of the candidate and
the office sought by the candidate, the identification of the
contributor, and the date of receipt and amount of the
contribution.
(B) The notification required under this paragraph shall be
in addition to all other reporting requirements under this Act.
(7)(A) The reports required to be filed by this subsection
shall be cumulative during the calendar year to which they
relate, but where there has been no change in an item reported
in a previous report during such year, only the amount need be
carried forward.
(B) In the case of any report required to be filed by this
subsection which is the first report required to be filed after
the date of an election, the report shall include a statement
of the total contributions received and expenditures made as of
the date of the election.
* * * * * * *
(11)(A) The Commission shall permit reports required by this
Act to be filed and preserved by means of computer disk or any
other appropriate electronic format or [method,] method
(including by facsimile device or electronic mail in the case
of any report required to be filed within 24 hours after the
transaction reported has occurred), as determined by the
Commission[.], except that in the case of a report submitted by
a person who reports an aggregate amount of contributions or
expenditures (as the case may be) in all reports filed with
respect to the election cycle involved (taking into account the
period covered by the report) in an amount equal to or greater
than $50,000, the Commission shall require the report to be
filed and preserved by electronic mail, the Internet, or such
othermethod of instantaneous transmission as the Commission may
permit. The Commission shall certify (on an ongoing basis) private
sector computer software which may be used for filing reports by such
methods.
* * * * * * *
(12)(A) Notwithstanding any other provision of this Act, each
political committee described in subparagraph (B)(i) that
receives a contribution in an amount equal to or greater than
$200, and any person described in subparagraph (B)(ii) who
makes an independent expenditure, during the period which
begins on the 90th day before an election and ends at the time
the polls close for such election shall, with respect to any
information required to be filed with the Commission under this
section with respect to such contribution or independent
expenditure, file and preserve the information using electronic
mail, the Internet, or such other method of instantaneous
transmission as the Commission may permit, and shall file the
information within 24 hours after the receipt of the
contribution or the making of the independent expenditure.
(B) For purposes of subparagraph (A)--
(i) a political committee described in this clause is
a political committee that has received an aggregate
amount of contributions equal to or greater than
$50,000 with respect to the election cycle involved;
and
(ii) a person described in this clause is a person
who makes an aggregate amount of independent
expenditures during the election cycle involved or
during any of the 2 previous 2-year general election
cycles in an amount equal to or greater than $10,000.
(C) The Commission shall make the information filed under
this paragraph available on the Internet immediately upon
receipt.
(b) Each report under this section shall disclose--
(1) * * *
(2) for the reporting period and the calendar year
(or election cycle, in the case of an authorized
committee of a candidate for Federal office), the total
amount of all receipts, and the total amount of all
receipts in the following categories:
(A) * * *
* * * * * * *
(3) the identification of each--
(A) person (other than a political committee)
who makes a contribution to the reporting
committee during the reporting period, whose
contribution or contributions have an aggregate
amount or value in excess of $200 within the
calendar year (or election cycle, in the case
of an authorized committee of a candidate for
Federal office), or in any lesser amount if the
reporting committee should so elect, together
with the date and amount of any such
contribution and the total amount of all such
contributions made by such committee with
respect to the election involved;
(B) political committee which makes a
contribution to the reporting committee during
the reporting period, together with the date
and amount of any such contribution and the
total amount of all such contributions made by
such committee with respect to the election
involved and the total amount of all such
contributions made by such person with respect
to the election involved;
* * * * * * *
(4) for the reporting period and the calendar year
(or election cycle, in the case of an authorized
committee of a candidate for Federal office), the total
amount of all disbursements, and all disbursements in
the following categories:
(A) * * *
* * * * * * *
(H) for any political committee other than an
authorized committee--
(i) * * *
* * * * * * *
(v) any other disbursements; [and]
(I) for an authorized committee of a
candidate for the office of President,
disbursements not subject to the limitation of
section 315(b); and
(J) in the case of a political committee of a
national political party, all funds transferred
to any political committee of a State or local
political party, without regard to whether or
not the funds are otherwise treated as
contributions or expenditures under this title;
(5) the name and address of each--
(A) person to whom an expenditure in an
aggregate amount or value in excess of $200
within the calendar year is made by the
reporting committee to meet a candidate or
committee operating expense, together with the
date, amount, and purpose of such operating
expenditure[;], and, if such person in turn
makes expenditures which aggregate $5,000 or
more in an election cycle to other persons (not
including employees) who provide goods or
services to the candidate or the candidate's
authorized committees, the name and address of
such other persons, together with the date,
amount, and purpose of such expenditures;
* * * * * * *
(6)(A) for an authorized committee, the name and
address of each person who has received any
disbursement not disclosed under paragraph (5) in an
aggregate amount or value in excess of $200 within the
[calendar year] election cycle, together with the date
and amount of any such disbursement;
* * * * * * *
(7) the total sum of all contributions to such
political committee, together with the total
contributions less offsets to contributions and the
total sum of all operating expenditures made by such
political committee, together with total operating
expenditures less offsets to operating expenditures,
for both the reporting period and the calendar year (or
election cycle, in the case of an authorized committee
of a candidate for Federal office); and
(c)(1) * * *
(2) Statements required to be filed by this subsection shall
be filed in accordance with subsection (a)(2), and shall
include--
(A) * * *
* * * * * * *
Any independent expenditure (including those described in
subsection (b)(6)(B)(iii) aggregating $1,000 or more made after
the 20th day, but more than 24 hours, before any election shall
be [reported] filed within 24 hours after such independent
expenditure is made. Such statement shall be filed with the
Secretary or the Commission and the Secretary of State and
shall contain the information required by subsection
(b)(6)(B)(iii) indicating whether the independent expenditure
is in support of, or in opposition to, the candidate involved.
Notwithstanding subsection (a)(5), the time at which the
statement under this subsection is received by the Secretary,
the Commission, or any other recipient to whom the notification
is required to be sent shall be considered the time of filing
of the statement with the recipient.
* * * * * * *
(d) If a political committee of a State or local political
party is required under a State or local law, rule, or
regulation to submit a report on its disbursements to an entity
of the State or local government, the committee shall file a
copy of the report with the Commission at the time it submits
the report to such an entity.
* * * * * * *
federal election commission
Sec. 306. (a)(1) There is established a commission to be
known as the Federal Election Commission. The Commission is
composed of [the Secretary of the Senate and the Clerk of the
House of Representatives or their designees, ex officio and
without the right to vote, and] 6 members appointed by the
President, by and with the advice and consent of the Senate. No
more than 3 members of the Commission appointed under this
paragraph may be affiliated with the same political party.
(3) Members shall be chosen on the basis of their experience,
integrity, impartiality, and good judgment and members [(other
than the Secretary of the Senate and the Clerk of the House of
Representatives)] shall be individuals who, at the time
appointed to the Commission, are not elected or appointed
officers or employees in the executive, legislative, or
judicial branch of the Federal Government. Such members of the
Commission shall not engage in any other business, vocation, or
employment. Any individual who is engaging in any other
business, vocation, or employment at the time of his or her
appointment to the Commission shall terminate or liquidate such
activity no later than 90 days after such appointment.
(4) Members of the Commission [(other than the Secretary of
the Senate and the Clerk of the House of Representatives)]
shall receive compensation equivalent to the compensation paid
at level IV of the Executive Schedule. (5 U.S.C. 5315)
(5) The Commission shall elect a chairman and a vice chairman
from among its members [(other than the Secretary of the Senate
and the Clerk of the House of Representatives)] for a term of
one year. A member may serve as chairman only once during any
term of office to which such member is appointed. The chairman
and the vice chairman shall not be affiliated with the same
political party. The vice chairman shall act as chairman in the
absence or disability of the chairman or in the event of a
vacancy in such office.
* * * * * * *
powers of the commission
Sec. 307. (a) The Commission has the power--
(1) * * *
* * * * * * *
(3) to require by subpena, [signed by the chairman or
the vice chairman] signed by any member of the
Commission, the attendance and testimony of witnesses
and the production of all documentary evidence relating
to the execution of its duties;
* * * * * * *
(7) to render advisory opinions under section 308 [of
this Act] and other written responses under section
308A;
* * * * * * *
other written responses to questions
Sec. 308A. (a) Permitting Responses.--In addition to issuing
advisory opinions under section 308, the Commission shall issue
written responses pursuant to this section with respect to a
written request concerning the application of this Act, chapter
95 or chapter 96 of the Internal Revenue Code of 1986, a rule
or regulation prescribed by the Commission, or an advisory
opinion issued by the Commission under section 308, with
respect to a specific transaction or activity by the person, if
the Commission finds the application of the Act, chapter, rule,
regulation, or advisory opinion to the transaction or activity
to be clear and unambiguous.
(b) Procedure for Response.--
(1) Analysis by staff.--The staff of the Commission
shall analyze each request submitted under this
section. If the staff believes that the standard
described in subsection (a) is met with respect to the
request, the staff shall circulate a statement to that
effect together with a draft response to the request to
the members of the Commission.
(2) Issuance of response.--Upon the expiration of the
3-day period beginning on the date the statement and
draft response is circulated (excluding weekends or
holidays), the Commission shall issue the response,
unless during such period any member of the Commission
objects to issuing the response.
(c) Effect of Response.--
(1) Safe harbor.--Notwithstanding any other
provisions of law, any person who relies upon any
provision or finding of a written response issued under
this section and who acts ingood faith in accordance
with the provisions and findings of such response shall not, as a
result of any such act, be subject to any sanction provided by this Act
or by chapter 95 or chapter 96 of the Internal Revenue Code of 1986.
(2) No reliance by other parties.--Any written
response issued by the Commission under this section
may only be relied upon by the person involved in the
specific transaction or activity with respect to which
such response is issued, and may not be applied by the
Commission with respect to any other person or used by
the Commission for enforcement or regulatory purposes.
(d) Publication of Requests and Responses.--The Commission
shall make public any request for a written response made, and
the responses issued, under this section. In carrying out this
subsection, the Commission may not make public the identity of
any person submitting a request for a written response unless
the person specifically authorizes to Commission to do so.
(e) Compilation of Index.--The Commission shall compile,
publish, and regularly update a complete and detailed index of
the responses issued under this section through which responses
may be found on the basis of the subjects included in the
responses.
enforcement
Sec. 309. (a)(1)(A) Any person who believes a violation of
this Act or of chapter 95 or chapter 96 of the Internal Revenue
Code of 1954 has occurred, may file a complaint with the
Commission. Such complaint shall be in writing, signed and
sworn to by the person filing such complaint, shall be
notarized, shall be in a standard form prescribed by the
Commission, shall not include (but may refer to) extraneous
materials, and shall be made under penalty of perjury and
subject to the provisions of section 1001 of title 18, United
States Code. Within 5 days after receipt of a complaint, the
Commission shall notify, in writing, any person alleged in the
complaint to have committed such a violation. Before the
Commission conducts any vote on the complaint, other than a
vote to dismiss, any person so notified shall have the
opportunity to demonstrate, in writing, to the Commission
within 15 days after notification that no action should be
taken against such person on the basis of the complaint. The
Commission may not conduct any investigation or take any other
action under this section solely on the basis of a complaint of
a person whose identity is not disclosed to the Commission.
(B) The written notice of a complaint provided by the
Commission under subparagraph (A) to a person alleged to have
committed a violation referred to in the complaint shall
include a cover letter (in a form prescribed by the Commission)
and the following statement: ``The enclosed complaint has been
filed against you with the Federal Election Commission. The
Commission has not verified or given official sanction to the
complaint. The Commission will make no decision to pursue the
complaint for a period of at least 15 days from your receipt of
this complaint. You may, if you wish, submit a written
statement to the Commission explaining why the Commission
should take no action against you based on this complaint. If
the Commission should decide to seek additional information,
you will be notified and be given further opportunity to
respond.''
(2) If the Commission, upon receiving a complaint under
paragraph (1) or on the basis of information ascertained in the
normal course of carrying out its supervisory responsibilities,
determines, by an affirmative vote of 4 of its members, that
[it has reason to believe that a person has committed, or is
about to commit, a violation of this Act of chapter 95 or
chapter 96 of the Internal Revenue Code of 1954,] it has a
reason to seek additional information regarding a possible
violation of this Act or of chapter 95 or chapter 96 of the
Internal Revenue Code of 1986 that has occurred or is about to
occur (based on the same criteria applicable under this
paragraph prior to the enactment of the Campaign Reform and
Election Integrity Act of 1999), the Commission shall, [through
its chairman or vice chairman] through any of its members,
notify the person of the alleged violation. Such notification
shall set forth the factual basis for such alleged violation.
The Commission shall make an investigation of such alleged
violation, which may include a field investigation or audit, in
accordance with the provisions of this section.
* * * * * * *
(4)(A)(i) Except as provided in [clause (ii)] clauses (ii)
and subparagraph (C), if the Commission determines, by an
affirmative vote of 4 of its members, that there is probable
cause to believe that any person has committed, or is about to
commit, a violation of this Act or of chapter 95 or chapter 96
of the Internal Revenue Code of 1954, the Commission shall
attempt, for a period of at least 30 days, to correct or
prevent such violation by informal methods of conference,
conciliation, and persuasion, and to enter into a conciliation
agreement with any person involved. Such attempt by the
Commission to correct or prevent such violation may continue
for a period of not more than 90 days. The Commission may not
enter into a conciliation agreement under this clause except
pursuant to an affirmative vote of 4 of its members. A
conciliation agreement, unless violated, is a complete bar to
any further action by the Commission, including the bringing of
a civil proceeding under paragraph (6)(A).
* * * * * * *
(C)(i) Notwithstanding subparagraph (A), in the case of a
violation of any requirement under this Act relating to the
reporting of receipts or disbursements, the Commission may--
(I) find that a person committed such a violation on
the basis of information obtained pursuant to the
procedures described in paragraphs (1) and (2); and
(II) based on such finding, require the person to pay
a civil money penalty in an amount determined under a
schedule of penalties which is established and
published by the Commission and which takes into
account the amount of the violation involved, the
existence of previous violations by the person, and
such other factors as the Commission considers
appropriate (but which in no event exceeds $20,000).
(ii) The Commission may not make any determination adverse to
a person under clause (i) until the person has been given
written notice and an opportunity to be heard before the
Commission.
(iii) Any person against whom an adverse determination is
made under this subparagraph may obtain a review of such
determination by filing in the United States District Court for
the District of Columbia or for the district in which the
person resides or transacts business (prior to the expiration
of the 30-day period which begins on the date the person
receives notification of the determination) a written petition
requesting that the determination be modified or set aside.
(6)(A) If the Commission is unable to correct or prevent any
violation of this Act or of chapter 95 or chapter 96 of the
Internal Revenue Code of 1954, by the methods specified in
paragraph (4)[(A)], the Commission may, upon an affirmative
vote of 4 of its members, insitute a civil action for relief,
including a permanent or temporary injunction, restraining
order, or any other appropriate order (including an order for a
civil penalty which does not exceed the greater of $5,000 or an
amount equal to any contribution or expenditure involved in
such violation) in the district court of the United States for
the district in which the person against whom such action is
brought is found, resides, or transacts business.
* * * * * * *
(10) For purposes of determining the amount of a civil
penalty imposed under this subsection for violations of section
323, the amount of the donation involved shall be treated as
the amount of the contribution involved.
* * * * * * *
(e) Any conciliation agreement, civil action, or criminal
action entered into or instituted under this section may
require a person to forfeit to the Treasury any contribution,
donation, or expenditure that is the subject of the agreement
or action for transfer to the Commission for deposit in
accordance with section 323.
* * * * * * *
limitations on contributions and expenditures
Sec. 315. (a)(1) * * *
* * * * * * *
(3) No individual shall make contributions aggregating more
than $25,000 in any calendar year. [For purposes of this
paragraph, any contribution made to a candidate in a year other
than the calendar year in which the election is held with
respect to which such contribution is made, is considered to be
made during the calendar year in which such election is held.]
* * * * * * *
(c)(1) [At the beginning] Not later than February 15 of each
calendar year (commencing in 1976), [as there become available
necessary data from the Bureau of Labor Statistics of the
Department of Labor,] the Secretary of Labor shall certify to
the Commission and publish in the Federal Register the percent
difference between the price index for the 12 months preceding
the beginning of such calendar year and the price index for the
base period. Each limitation established by subsection (b) and
subsection (d) shall be increased by such percent difference.
Each amount so increased shall be the amount in effect for such
calendar year.
* * * * * * *
(e) [During the first week of January 1975, and every
subsequent year,] Not later than February 15 of 1975 and each
subsequent year, the Secretary of Commerce shall certify to the
Commission and publish in the Federal Register an estimate of
the voting age population of the United [States, of each State,
and of each congressional district] States and of each State as
of the first day of July next preceding the date of
certification. The term ``voting age population'' means
resident population, 18 years of age or older.
* * * * * * *
(i) No candidate or political committee may accept any
contributions of currency of the United States or currency of
any foreign country from any person which, in the aggregate,
exceed $100.
contributions or expenditures by national banks, corporations, or labor
organizations
Sec. 316. (a) * * *
(b)(1) * * *
* * * * * * *
(3) It shall be unlawful--
(A) for such a fund to cause another person to make a
contribution or expenditure by physical force, job
discrimination, financial reprisals, or the threat of
force, job discrimination, or financial reprisal;
[(A)] (B) for such a fund to make a contribution or
expenditure by utilizing money or anything of value
secured by physical force, job discrimination,
financial reprisals, or the threat of force, job
discrimination, or financial reprisal; or by dues,
fees, or other moneys required as a condition of
membership in a labor organization or as a condition of
employment, or by moneys obtained in any commercial
transaction;
[(B)] (C) for any person soliciting an employee for a
contribution to such a fund to fail to inform such
employee of the political purposes of such fund at the
time of such solicitation; and
[(C)] (D) for any person soliciting an employee for a
contribution to such a fund to fail to inform such
employee, at the time of such solicitation, of his
right to refuse to so contribute without any reprisal.
* * * * * * *
[contributions] donations and other disbursements by foreign nationals
Sec. 319. (a) It shall be unlawful for a foreign national
directly or through any other person to make any [contribution]
donation or other disbursement of money or other thing of
value, or to promiseexpressly or impliedly to make any such
[contribution] donation or other disbursement, in connection with an
election to any political office or in connection with any primary
election, convention, or caucus held to select candidates for any
political office[;], including any donation or other disbursement to a
political committee of a political party and any donation or other
disbursement for an independent expenditure; or for any person to
solicit, accept, or receive any such [contribution] donation or other
disbursement from a foreign national.
(b) It shall be unlawful for any person organized under or
created by the laws of the United States or of any State or
other place subject to the jurisdiction of the United States to
make any donation or other disbursement to any candidate for
political office in connection with an election for any
political office, or to make any donation or other disbursement
to any political committee or to any organization or account
created or controlled by any United States political party,
unless such donation or disbursement is derived solely from
funds generated from such person's own business activities in
the United States.
(c) Nothing in this Act may be construed to prohibit any
individual eligible to vote in an election for Federal office
from making contributions or expenditures in support of a
candidate for such an election (including voluntary
contributions or expenditures made through a separate
segregated fund established by the individual's employer or
labor organization) or otherwise participating in any campaign
for such an election in the same manner and to the same extent
as any other individual eligible to vote in an election for
such office.
[(b)] (d) As used in this section, the term ``foreign
national'' means--
(1) * * *
* * * * * * *
treatment of certain contributions and donations to be returned to
donors
Sec. 323. (a) Transfer to Commission.--
(1) In general.--Notwithstanding any other provision
of this Act, if a political committee intends to return
any contribution or donation given to the political
committee, the committee shall transfer the
contribution or donation to the Commission if--
(A) the contribution or donation is in an
amount equal to or greater than $500 (other
than a contribution or donation returned within
90 days of receipt by the committee); or
(B) the contribution or donation was made in
violation of section 315, 316, 317, 319, or 320
(other than a contribution or donation returned
within 90 days of receipt by the committee).
(2) Information included with transferred
contribution or donation.--A political committee shall
include with any contribution or donation transferred
under paragraph (1)--
(A) a request that the Commission return the
contribution or donation to the person making
the contribution or donation; and
(B) information regarding the circumstances
surrounding the making of the contribution or
donation and any opinion of the political
committee concerning whether the contribution
or donation may have been made in violation of
this Act.
(3) Establishment of escrow account.--
(A) In general.--The Commission shall
establish a single interest-bearing escrow
account for deposit of amounts transferred
under paragraph (1).
(B) Disposition of amounts received.--On
receiving an amount from a political committee
under paragraph (1), the Commission shall--
(i) deposit the amount in the escrow
account established under subparagraph
(A); and
(ii) notify the Attorney General and
the Commissioner of the Internal
Revenue Service of the receipt of the
amount from the political committee.
(C) Use of interest.--Interest earned on
amounts in the escrow account established under
subparagraph (A) shall be applied or used for
the same purposes as the donation or
contribution on which it is earned.
(4) Treatment of returned contribution or donation as
a complaint.--The transfer of any contribution or
donation to the Commission under this section shall be
treated as the filing of a complaint under section
309(a).
(b) Use of Amounts Placed in Escrow To Cover Fines and
Penalties.--The Commission or the Attorney General may require
any amount deposited in the escrow account under subsection
(a)(3) to be applied toward the payment of any fine or penalty
imposed under this Act or title 18, United States Code, against
the person making the contribution or donation.
(c) Return of Contribution or Donation After Deposit in
Escrow.--
(1) In general.--The Commission shall return a
contribution or donation deposited in the escrow
account under subsection (a)(3) to the person making
the contribution or donation if--
(A) within 180 days after the date the
contribution or donation is transferred, the
Commission has not made a determination under
section 309(a)(2) to seek additional
information regarding whether or not the
contribution or donation was made in violation
of this Act; or
(B)(i) the contribution or donation will not
be used to cover fines, penalties, or costs
pursuant to subsection (b); or
(ii) if the contribution or donation will be
used for those purposes, that the amounts
required for those purposes have been withdrawn
from the escrow account and subtracted from the
returnable contribution or donation.
(2) No effect on status of investigation.--The return
of a contribution or donation by the Commission under
this subsection shall not be construed as having an
effect on the status of an investigation by the
Commission or the Attorney General of the contribution
or donation or the circumstances surrounding the
contribution or donation, or on the ability of the
Commission or the Attorney General to take future
actions with respect to the contribution or donation.
(d) Donation Defined.--In this section, the term ``donation''
means a gift, subscription, loan, advance, or deposit of money
or anything else of value made by any person to a national
committee of a political party or a Senatorial or Congressional
Campaign Committee of a national political party for any
purpose, but does not include a contribution (as defined in
section 301(8)).
Views of Committee Members
Clause 3(a) of rule XIII requires each committee to afford
a two day opportunity for members of the committee to file
supplemental, minority, or additional views and to include the
views in its report. The Committee on House Administration
Minority members have submitted dissenting views.
ADDITIONAL VIEWS
On August 2, 1999, the Committee on House Administration
reported out four bills: three measures aimed at reforming the
campaign finance system, and the Chairman's Federal Election
Commission reform bill, H.R. 2668. Only H.R. 2668 received the
unanimous support of the Committee. In fact, it was the only
bill favorably reported by the Committee. While we believe that
the Chairman's bill contains much-needed and long-overdue
process and housekeeping fixes related to the Federal Election
Commission (FEC), it does nothing to address soft money or the
explosion of undisclosed issue advocacy, and has little to do
with campaign finance reform. As Rep. Hoyer noted at the
Committee meeting, it would be a ``cynical, Machiavellian
ruse'' if H.R. 2668 were used to prevent H.R. 417, the
bipartisan Shays-Meehan bill that passed the House by a
significant Majority of 252-179 less than a year ago, from once
again receiving a vote on the floor.
In 1996, Meg Greenfield, a columnist for Newsweek magazine,
compared the campaign finance laws to a squirrel baffle, a
device designed to keep squirrels from reaching food. While it
took humans months to construct the baffle, it took a
particular determined squirrel only one day to penetrate it.
And once one squirrel was through, a veritable army of
squirrels was soon going back and forth. Her point was not that
campaign finance reform was a fruitless endeavor, but rather
that ``pretty much all reforms have a limit on them: the number
of years it will take for motivated people to learn how to
manipulate the system to their advantage.'' We agree that
reform is a cyclical process, and that it is to be expected
that in the 20 years since we last visited this area, new ways
of penetrating the baffle of campaign finance laws have
emerged.
Two key ``penetrations'' have come in the form of unlimited
``soft'' money contributions from corporations, unions and
individuals and in the explosion of ``issue'' advertisements
that are not about issues at all, but instead are designed to
advocate the election or defeat of particular candidates
without abiding by rules that govern the candidates themselves.
We believe that any real campaign finance reform must address
both problems.
Despite the bipartisan support H.R. 417, the Majority voted
it out of Committee unfavorably, unwilling to accord it even
the courtesy granted to H.R. 1922 and H.R. 1867, both of which
were reported without recommendation. In essence, the Committee
favorably reported a bill that has little to do with campaign
finance, was undecided as to two bills that failed to receive
150 votes each last year, and opposed the one campaign finance
reform bill that has the demonstrated bipartisan support needed
to pass the House.
H.R. 2668 in and of itself is a worthy bill. The Federal
Election Commission faces a formidable task not faced by any
other executive branch agency in that it is directly
responsible for regulating the behavior of the very Members of
Congress who in turn determine the agency's budget. As a
result, even small procedural changes that would normally be
routine often fail to get accomplished. H.R. 2668 combines many
of these needed small fixes in one legislative package. While
it does not hold itself out as a campaign finance reform bill,
and makes no attempt to address the two key problems with the
campaign finance system--soft money and the explosion of sham
issue advertisements we support H.R. 2668.
In fact, 15 of the 26 provisions contained in H.R. 2668
were taken from H.R. 1818, sponsored by Rep. Hoyer along with
Reps. Fattah and Davis. H.R. 1818 is designated to fine-tune
current FEC pracatices and clarify inconsistencies in current
law that have confused FEC officials, contributors, and
candidates alike. Almost every provision either has the support
of all six FEC Commissioners, or is taken directly from the
recommendations of the audit of the FEC by
PricewaterhouseCoopers last year. As Rep. Hoyer stated when
H.R. 1818 was introduced in May, ``The Congress needs to take
steps to restore the public trust and ensure that laws are
fully enforced. A fully empowered FEC is step 1, and campaign
finance reform is step 2.''
Like H.R. 1818, H.R. 2668 accomplishes step 1. It mandates
much needed electronic filing, ensuring that public access to
information about a candidate's sources of funding keeps pace
in the emerging age of the Internet. H.R. 2668 also requires
quicker disclosure of independent expenditures and last minute
contributions, and make it simplier for contributors to comply
with the annual $25,000 limit. H.R. 2668 also places
significant new reporting requirements on all political
committees, requiring a daily reporting of all contributions
received in excess of $200 in the 90-day period preceding both
the primary and the primary and the general election. While in
the electronic age, this requirement certainly does not
constitute the burden on candidates and PACs that it once would
have, we remain concerned that this provision may need some
further consideration and perhaps modification prior to
enactement.
In additional to laudable enhancements of public disclose,
H.R. 2668, like H.R. 1818, broadens candidates ability to use
brokerage accounts and other available lines of credit commonly
available, and it creates an automatic fine system for minor
reporting violations.
While we support H.R. 2668, we nonetheless regret that a
number of provisions contained in H.R. 1818 are not included in
this bill. During the Committee's consideration, we offered six
amendments, each provisions of H.R. 1818 that we believe should
be included in any FEC reform bill.
Amendment 1 would have required all PACs raising or
spending in excess of $100,000 to file monthly reports, and it
would have created an optional structure to allow other
committees to file monthly reports if they wished. While this
amendment was intended to serve the interests of public
disclosure and also to reduce the bookkeeping demands upon
Committees, the Majority chose not to adopt this non-
controversal provision. Although the provision has the support
of all six FEC Commissioners, the Majority claimed there had
been insufficient time to consult with those affected by the
amendment.
Amendment 2 would have extended the period during which the
FEC could initiate audits for cause from six months to one year
after an election. Because it takes two months for financial
information to be filed, much less analyzed, staff has
insufficient time to determine what Committees should be
audited for cause. Although this provision was again supported
by all six FEC Commissioners, the Majority did not adopt the
amendment. Amendment 3 consisted of a tiny housekeeping change
regarding Commissioners authority to sign documents which was
accepted.
Amendment 4 included a series of non-controversial changes
to the Presidential public financing system. These changes
would have included a prohibition on individuals previously
convicted of fraudulent use of public funding receiving funds
in future elections. The provisions would also have reduced
bookkeeping burdens on those candidates receiving public funds.
This amendment was laid aside at the request of the Chairman,
who stated a preference to revisit this issue in a suspension
bill at a later time. We look forward to working with the
Chairman and the Majority on this issue in the future.
Amendment 5 would have authorized the FEC for the first
time in many years. This amendment would have lent the stamp of
legitimacy to an agency that is perpetually under-funded and
under-staffed. Amendment 6 would have mandated that the FEC
update the election equipment standards used by states to
ensure that voting equipment is accurate and secure. The
standards have not been updated since 1990 and the FEC
generally will not agree to an update without explicit
Congressional instruction. Although this provision has the
support of every Secretary of State in the country, the
Majority voted not to accept this amendment. We regret the
Majority's unwillingness to accept such a straightforward
amendment that goes to the heart of the Committee's
jurisdiction, and would ensure the accuracy and security of
voting equipment used in elections nationwide.
Thus, given the fact that H.R. 2688 addresses much-needed
FEC reform, we believe this legislation should receive a vote
separate and apart from consideration of meaningful campaign
finance reform such as the Shays-Meehan bill, H.R. 417. We are
particularly concerned that opponents of meaningful campaign
finance reform intend to use H.R. 2668 in a cynical attempt to
kill the Shays-Meehan bill in this session. For example, we
oppose any attempt to permit H.R. 2668 to become a substitute
bill for H.R. 417. These two bills, as discussed above, address
two different topics--campaign finance reform and FEC reform--
and should not be equated.
Steny H. Hoyer.
Chaka Fattah.
Jim Davis.