[Federal Register Volume 59, Number 70 (Tuesday, April 12, 1994)]
[Unknown Section]
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From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-8690]
[[Page Unknown]]
[Federal Register: April 12, 1994]
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FEDERAL ELECTION COMMISSION
11 CFR Part 102
[Notice 1994-5]
Special Fundraising Projects and Other Use of Candidate Names by
Unauthorized Committees
AGENCY: Federal Election Commission.
ACTION: Final rule; transmittal of regulations to Congress.
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SUMMARY: The Commission is amending its regulations regarding an
unauthorized committee's use of a candidate's name in the title of a
special fundraising project or other communication on behalf of the
unauthorized committee. The amendment permits such use, if the title
clearly indicates opposition to the named candidate.
DATES: Further action, including the announcement of an effective date,
will be taken after these regulations have been before Congress for 30
legislative days pursuant to 2 U.S.C. 438(d). A document announcing the
effective date will be published in the Federal Register.
FOR FURTHER INFORMATION CONTACT:
Ms. Susan E. Propper, Assistant General Counsel, 999 E Street NW.,
Washington, DC 20463, (202) 219-3690 or (800) 424-9530.
SUPPLEMENTARY INFORMATION: On July 10, 1992, the Commission sent to
Congress new rules on special fundraising projects and other uses of
candidate names by unauthorized committees. The rules prohibit the use
of a candidate's name in the title of any fundraising project or other
communication by any committee that has not been authorized by the
named candidate. 11 CFR 102.14(a). The rules became effective on
November 4, 1992. 57 FR 47258 (Oct. 15, 1992).
The rules construe 2 U.S.C. 432(e)(4), a provision of the Federal
Election Campaign Act [``FECA'' or ``the Act''] that prohibits the use
of a candidate's name in the name of an unauthorized political
committee. Prior to the 1992 revision, the Commission had construed
this prohibition as applying only to the name under which a committee
registers with the Commission [the ``registered name''].
The Notice of Proposed Rulemaking [``NPRM''] was published in the
Federal Register on April 15, 1992, 57 FR 13056. The Commission
received 14 comments in response to this Notice. The final rules were
published on July 15, 1992. 57 FR 31424.
On February 5, 1993, the Commission received a Petition for
Rulemaking from Citizens Against David Duke [``CADD''], a proposed
project of the American Ideas Foundation. The petition requested that
the Commission reconsider and repeal the new rules, with particular
emphasis on those titles that indicate opposition to, rather than
support for, a named candidate.
The Commission published a Notice of Availability in the Federal
Register on March 3, 1993. 58 FR 12189. Three comments were received in
response to this Notice.
In response to these comments, the Commission published an NPRM
proposing that the rule be amended so as to permit the use of candidate
names in titles that clearly indicate opposition to the named
candidate. 58 FR 65559 (Dec. 15, 1993). The Commission received four
comments in response to this Notice, three of which reflected in whole
or in part comments submitted earlier in the course of the rulemaking.
Section 438(d) of Title 2, United States Code, requires that any
rules or regulations prescribed by the Commission to carry out the
provisions of Title 2 of the United States Code be transmitted to the
Speaker of the House of Representatives and the President of the Senate
30 legislative days before they are finally promulgated. These
regulations were transmitted to Congress on April 6, 1994.
Explanation and Justification
In Common Cause v. FEC, 842 F.2d 436 (D.C. Cir. 1988), the United
States Court of Appeals for the District of Columbia Circuit upheld the
Commission's authority to interpret the prohibition at 2 U.S.C.
432(e)(4) on the use of a candidate's name in the name of an
unauthorized committee as applying only to the name under which the
committee registered with the Commission, since ``[an] agency's
construction, if reasonable, must ordinarily be honored.'' Id. at 439-
40. However, the court recognized that an interpretation imposing a
more extensive ban on the use of candidate names by unauthorized
committees, such as prohibiting their use in the titles of any
fundraising projects sponsored by an unauthorized committee, ``could
also be accommodated within the provision's literal language.'' Id. at
440.
Some commenters on both the 1992 and the current NPRM noted that
this rulemaking implicates protected first amendment rights, and that
any infringement on these rights is subject to strict scrutiny by
reviewing courts. However, it is well established that first amendment
rights are not absolute when balanced against the government's interest
in protecting the integrity of the electoral process. ``Even a
`significant interference' with protected rights [ ] may be sustained
if the State demonstrates a sufficiently important interest and employs
means closely drawn to avoid unnecessary abridgment'' of those rights.
Buckley v. Valeo, 424 U.S. 1, 25 (1975) (citations omitted). The Common
Cause court deferred to the Commission's judgment that literal
adherence to the language of section 432(e)(4), coupled with the
disclaimer requirements of 2 U.S.C. 441d(a), struck the proper balance
at that time. 842 F.2d at 440. Section 441d(a)(3) requires that
communications by unauthorized committees include a disclaimer that
clearly identifies who paid for the communication, and states whether
it was authorized by any candidate or candidate's committee.
The Common Cause decision grew out of the 1980 presidential
election. Since that time, the Commission has become increasingly
concerned over the possibility for confusion or abuse under the
interpretation upheld in that case, that is, limiting the FECA's
``name'' prohibition to a committee's registered name. Aware of these
constitutional concerns, the 1992 NPRM sought comments on two
modifications to the rules then in effect that fell short of an overall
ban.
Under the first proposal, the political committee sponsoring the
project would have been required to include in the required disclaimer
the name of the committee paying for the project, as well as a
statement whether the project had been authorized by the candidate
whose name appeared in the title, or by any other candidate. As part of
this proposal, the Commission also sought comments on whether
disclaimer size and/or location requirements should be imposed in this
situation. Second, a committee would not have been allowed to accept
checks received in response to a special project solicitation, unless
the checks were made payable to the registered name of the committee.
However, the Commission also sought comments on a proposed total
bar on the use of a candidate's name in the project title of an
unauthorized committee's special fundraising project; and several
commenters endorsed this approach. After considering all comments
received in response to that Notice, the Commission decided that the
total ban was justified.
The rulemaking record contains substantial evidence that potential
contributors often confuse an unauthorized committee's registered name
with the names of its fundraising projects, and wrongly believe that
their contributions will be used in support of the candidate(s) named
in the project titles. Although one commenter on the present rulemaking
stated that the Commission had overstated the potential for fraud and
abuse in this area, no comment provided information to refute this
earlier determination.
This rule is narrowly designed to further the legitimate
governmental interest in minimizing the possibility of fraud and abuse
in this situation. Committees are not barred from establishing
specially designated projects: They are free to choose whatever project
title they desire, as long as it does not include the name of a federal
candidate. Also, committees may freely discuss any number of
candidates, by name, in the body of a communication. The newly-revised
rule further enhances unauthorized committees' constitutional rights by
exempting from the ban those titles that clearly indicate opposition to
the named candidate.
It is clear from the rulemaking record that the situation today
differs significantly from that of the early 1980's, when the Common
Cause case was litigated. Prior to the adoption of the 1992 rules, the
use of candidate names in the titles of projects or other unauthorized
communications had increasingly become a device for unauthorized
committees to raise funds or disseminate information. Under the former
interpretation, a candidate who objected to the use of his or her name
in this manner, who shared in none of the funds received in response to
the solicitation, and/or who disagreed with the views expressed in the
communication, was largely powerless to stop it. For example, in 1984 a
United States Senator requested, and received, permission to obtain
from Commission records the names and addresses of those who had
responded to unauthorized solicitations made in his name, to inform
these contributors that he had not authorized the solicitation.
However, he could not suggest that contributors send donations instead
to his campaign committee. See Advisory Opinion 1984-2.
An examination of the record in the 1992 rulemaking, which contains
information that was not available when that NPRM was put out for
comment, further supports the Commission's conclusion that this balance
has now shifted so as to justify a broader interpretation. For example,
a comment from an authorized committee of a major party presidential
candidate stated that an unauthorized project using that candidate's
name raised over $10,000,000 during the 1988 presidential election
cycle, despite the candidate's disavowal of and efforts to stop these
activities. The same unauthorized committee was raising money by means
of a comparable project, using that same candidate's name, in the 1992
election cycle. This comment added that two other unauthorized projects
by that same committee raised over $4,000,000 and nearly $400,000 in
the name of two other presidential candidates in the 1988 election
cycle. None of the named candidates received any of the money that was
collected in their names. One of these candidates, a United States
Senator, also submitted comments asking that the pertinent rules be
strengthened.
In addition, a television documentary, a videotape of which was
placed in the rulemaking record, detailed how an unauthorized Political
Action Committee had, over several election cycles, established
numerous projects whose titles included the names of federal
candidates. The named candidates had no connection with the projects,
had not authorized the use of their names in this manner, and received
no money from the $9 million raised in response to these appeals.
Program investigators found that elderly people are particularly
vulnerable to being misled in this manner, since they may not notice or
fail to fully comprehend the disclaimers included with the
solicitations.
Such cases point up the potential for confusion or abuse when an
unauthorized committee uses a candidate's name in the title of a
special fundraising project, or other designation under which the
committee operates. A person who receives such a communication may
confuse the project name with the committee's registered name, and thus
may not understand that the communication is made on behalf of the
unauthorized committee rather than the candidate whose name appears in
the project's title. Potential donors may think they are giving money
to the candidate named in the project's title, when this is not the
case.
Some comments that opposed any modifications to the former standard
argued that current disclaimer requirements at section 441d(a)(3) were
sufficient to minimize the potential for confusion in this area. Others
suggested stronger, or larger, disclaimers, in place of the overall
ban. One suggested that the disclaimer be in as large and as bold a
typeface as the largest, boldest use of the candidate's name anywhere
in the communication. The Commission believes that such an approach
could be more burdensome than the current ban, while still not solving
the potential for fraud and abuse in this area. The requirement that
checks be made only to the sponsoring committee's registered name would
similarly not ensure that the contributor did not erroneously believe
the money would be used to support the candidate(s) named in the
project's title. It also would be difficult, if not practically
impossible, to monitor and enforce, since nothing on the public record
reflects who the payee is on a contributor's check.
It is important to note that the ban applies only to project
titles, and not to the body of the accompanying communication.
Unauthorized committees remain free to discuss candidates throughout
the communication; and to use candidates' names as frequently, and
highlight them as prominently (in terms of size, typeface, location,
and so forth) as they choose. In other words, while a committee could
not establish a fundraising project called ``Citizens for Doe,'' if Doe
is a federal candidate, it could use a subheading such as ``Help Us
Elect Doe to Federal Office,'' and urge Doe's election, by name, in
large, highlighted type, throughout the communication.
Also, by amending the regulation to exclude from the ban names that
indicate opposition to the named candidate, the Commission has acceded
to the petitioner's main concern, amending the rules to permit the
American Ideas Foundation to use the names of federal candidates in
titles that clearly indicate opposition to such candidates. As stated
in its summary of the petition (petition, p. 1), ``There is no danger
of confusion or abuse inherent in the use of a candidate's name by a
committee or project which opposes the candidate.'' The Commission
recognizes that the potential for fraud and abuse is significantly
reduced in the case of such titles, and has accordingly revised its
rules to permit them.
The petition also asked that the rule exclude from the ban the use
of candidate names in titles by those committees ``that are authorized
to use the candidate's name, which are engaged in activities which will
not actively mislead the public or injure the candidate, or which
otherwise clearly indicate that they are unauthorized.'' However, if a
candidate authorizes the use of his or her name in a fundraising
project, the committee becomes an authorized committee, and this rule
would not apply. The phrase ``engaged in activities which will not
actively mislead the public or injure the candidate'' is vague and
would result in the need to determine on a case-by-case basis whether
covered communications met this test. The Commission has already
determined that a stronger disclaimer requirement would not be
sufficient in and of itself to meet this concern. Given the wide range
of options that committees continue to have regarding use of candidate
names, imposing further requirements could well prove more burdensome
than the present approach.
The NPRM proposed that exempted titles would have to ``clearly and
unambiguously [show] opposition to the named candidate by using words
such as `defeat' or `oppose.''' The requirement that such specific
``triggering words'' be included in the title has been deleted from the
final rule, since the Commission recognizes that certain titles, such
as ``Citizens Fed Up with Doe,'' may clearly and unambiguously indicate
opposition to a candidate even though no individual word in the title
has that import.
One commenter argued that legislative action is necessary to
effectuate this change, noting that the Commission has in the past
included this issue in the legislative recommendations it submits to
Congress each year. However, it is well established that courts will
not rely on an agency's legislative recommendation to undermine the
agency's construction of a statute as authorizing it to act. The
Supreme Court has stated that holding an agency's legislative
recommendation against it is disfavored, because ``[p]ublic policy
requires that agencies feel free to ask [Congress for] legislation,''
and this freedom to act would be chilled if such requests could later
be held against them. Wong Yang Sung v. McGrath, 339 U.S. 33, 47
(1950); see also, Warner-Lambert Co. v. FTC, 562 F.2d 749, 758 n. 39
and cases cited therein (D.C. Cir. 1977), cert. denied, 435 U.S. 950
(1978).
The Commission notes that David Duke is not currently a candidate
for federal office, so the use of his name in a project title is not
prohibited by these rules. Should he again become a federal candidate,
such use of his name would be governed by these revised rules.
Certification of No Effect Pursuant to 5 U.S.C. 605(B) [Regulatory
Flexibility Act]
This final rule will not have a significant economic impact on a
substantial number of small entities. The basis for this certification
is that any small entities affected are already required to comply with
the Act's requirements in this area. Also, the rule broadens the
Commission's interpretation of these requirements.
List of Subjects in 11 CFR Part 102
Campaign funds, Political candidates, Political committees and
parties, Reporting requirements.
For the reasons set out in the preamble, subchapter A, chapter I of
title 11 of the Code of Federal Regulations is amended to read as
follows:
PART 102--REGISTRATION, ORGANIZATION, AND RECORDKEEPING BY
POLITICAL COMMITTEES (2 U.S.C. 433)
1. The authority citation for part 102 continues to read as
follows:
Authority: 2 U.S.C. 432, 433, 438(a)(8), 441d.
2. Section 102.14 is amended by adding paragraph (b)(3) to read as
follows:
Sec. 102.14 Names of political committees (2 U.S.C. 432(e)(4) and
(5)).
* * * * *
(b) * * *
(3) An unauthorized political committee may include the name of a
Sec. candidate in the title of a special project name or other
communication if the title clearly and unambiguously shows opposition
to the named candidate.
* * * * *
Dated: April 6, 1994.
Trevor Potter,
Chairman.
[FR Doc. 94-8690 Filed 4-11-94; 8:45 am]
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