[Federal Register Volume 62, Number 86 (Monday, May 5, 1997)]
[Proposed Rules]
[Pages 24367-24374]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-11590]
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Proposed Rules
Federal Register
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This section of the FEDERAL REGISTER contains notices to the public of
the proposed issuance of rules and regulations. The purpose of these
notices is to give interested persons an opportunity to participate in
the rule making prior to the adoption of the final rules.
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Federal Register / Vol. 62, No. 86 / Monday, May 5, 1997 / Proposed
Rules
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FEDERAL ELECTION COMMISSION
11 CFR Parts 100, 104, 109, and 110
[Notice 1997-8]
Independent Expenditures and Party Committee Expenditure
Limitations
AGENCY: Federal Election Commission.
ACTION: Notice of proposed rulemaking.
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SUMMARY: The Federal Election Commission is considering proposed new
rules regarding independent expenditures and coordinated expenditures
made by national, state and local party committees on behalf of federal
candidates. The Commission is also considering possible changes to the
regulations regarding the definition of ``coordination,'' which would
apply to party committees as well as other committees, corporations,
labor organizations, and individuals. These topics were the subject of
a recent Supreme Court opinion concerning portions of the Federal
Election Campaign Act of 1971, as amended (the Act or FECA). This
notice addresses issues raised by the Democratic Senatorial Campaign
Committee and the Democratic Congressional Campaign Committee in a
Petition for Rulemaking filed with the Commission on July 11, 1996. The
draft rules which follow do not represent a final decision by the
Commission regarding the petition or the Supreme Court opinion. Further
information is provided in the supplementary information which follows.
DATES: Comments must be received on or before May 30, 1997. If the
Commission receives requests to testify, it will hold a hearing on June
18, 1997 at 10:00 a.m. Persons wishing to testify should so indicate in
their written comments.
ADDRESSES: Comments must be made in writing and addressed to: Ms. Susan
E. Propper, Assistant General Counsel, 999 E Street, N.W., Washington,
D.C. 20463. The hearing will be held in the Commission's ninth floor
meeting room, 999 E Street, N.W., Washington, D.C.
FOR FURTHER INFORMATION CONTACT: Ms. Susan E. Propper, Assistant
General Counsel, or Ms. Rosemary C. Smith, Senior Attorney, or Ms.
Teresa A. Hennessy, Attorney, at (202) 219-3690 or toll free (800) 424-
9530.
SUPPLEMENTARY INFORMATION: The Commission is seeking public comment on
proposed revisions to 11 CFR 110.7 regarding coordinated and
independent expenditures by party committees. In addition, comment is
sought on a revised definition of coordination, located in new 11 CFR
100.23, which would apply to determining whether payments constitute
independent expenditures, coordinated expenditures, or in-kind
contributions. Corresponding amendments would also be made to sections
100.7(a) (contributions), 104.4(a) (reporting), 109.1(b) (definitions),
110.1 (contribution limits), 110.2 (multicandidate committee limits),
and 110.11 (disclaimers). These proposals are intended to implement the
Supreme Court's plurality opinion in Colorado Republican Federal
Campaign Committee v. Federal Election Commission, 116 S. Ct. 2309
(1996) (Colorado) concerning the expenditure limitations of section
441a(d) of the FECA, 2 U.S.C. 431 et seq. In that decision, the Court
concluded that political parties are capable of making independent
expenditures on behalf of their candidates for federal office, and that
it would violate the First Amendment to subject such independent
expenditures to the expenditure limits found in section 441a(d) of the
FECA. Id. at 2315.
Section 441a(d) permits national, state, and local committees of
political parties to make limited general election campaign
expenditures on behalf of their candidates, which are in addition to
the amount they may contribute directly to those candidates. 2 U.S.C.
441a(d). These section 441a(d) expenditures are commonly referred to as
``coordinated expenditures.'' Prior to the Colorado case, it was
presumed that party committees could not make expenditures independent
of their candidates. Please note that not all coordinated expenditures
constitute communications. In fact, party committees may use their
coordinated expenditure limits to pay for other types of expenses
incurred by candidates, including staff costs, polling and other
services.
Based on the Colorado Supreme Court decision, the Democratic
Senatorial Campaign Committee and the Democratic Congressional Campaign
Committee filed a Petition for Rulemaking urging the Commission to: (1)
repeal or amend 11 CFR 110.7(b)(4) to the extent that it prohibited
national committees of political parties from making independent
expenditures for congressional candidates; (2) repeal or amend 11 CFR
Part 109 with respect to which expenditures qualify as ``independent'';
and (3) issue new rules to provide meaningful guidance regarding
independent expenditures by the national committees of political
parties. Please note that although the Petition for Rulemaking urged
changes only in the rules applicable to national committees of
political parties, the Commission's rulemaking will also cover possible
changes to the provisions governing state and local party committees.
In response to the Colorado decision, the Commission promulgated a
Final Rule on August 7, 1996 which repealed paragraph (b)(4) of section
110.7. See 61 F.R. 40961 (Aug. 7, 1996). On the same date, the
Commission also published a Notice of Availability seeking comment on
the remainder of the Petitioners' requests. See 61 F.R. 41036 (Aug. 7,
1996). No statements supporting or opposing the petition were received
by the close of the comment period.
The attached proposed rules are explained more fully below.
Section 100.7--Contribution
The Commission is proposing adding new language to the definition
of contribution in 11 CFR 100.7(a) regarding coordinated communications
and other things of value. Comments are sought on two different
alternative versions of this new provision. Alternative 1-A would
specify that the term ``contribution'' includes a payment for a
communication or anything of value which is coordinated with a
candidate, authorized committee or other political committee.
Alternative 1-B is similar, except that it would include the concept
that the communication or thing of value must be for the purpose of
influencing a federal election. Coordination is discussed in greater
detail below. Please note that under either alternative this
[[Page 24368]]
new provision would apply not only to contributions from party
committees, but also to any other person, including individuals,
corporations, labor organizations, and nonconnected committees, who
coordinate with candidates or committees. Alternative 1-A of the
proposed rule would also reference 11 CFR 114.2(c), which explains that
some forms of coordination by a corporation or labor organization may
not necessarily result in the making of a contribution.
Section 100.23--Coordination
The Commission's current regulations at 11 CFR 109.1(b)(4) indicate
that an expenditure will be presumed to be coordinated rather than
independent when it is ``[b]ased on information about the candidate's
plans, projects or needs provided to the expending person by the
candidate or the candidate's agents, with a view toward having an
expenditure made,'' or when it is ``[m]ade by or through any person who
is, or has been, authorized to raise or expend funds, who is, or has
been, an officer of an authorized committee, or who is, or has been,
receiving any form of compensation or reimbursement from the candidate,
the candidate's committee or agent.'' 11 CFR 109.1(b)(4)(i). The
present language is drawn from the statutory definitions of
``independent expenditure'' at 2 U.S.C. 431(17) and ``contribution'' at
2 U.S.C. 441a(a)(7)(B). The FECA defines independent expenditure to
mean ``an expenditure by a person expressly advocating the election or
defeat of a clearly identified candidate which is made without
cooperation or consultation with any candidate, or any authorized
committee or agent of such candidate, and which is not made in concert
with, or at the request or suggestion of, any candidate, or any
authorized committee or agent of such candidate.'' 2 U.S.C. 431(17);
See also 11 CFR 109.1(a). Similarly, in Colorado, the Court referred to
independent expenditures as those which are ``developed * * *
independently and not pursuant to any general or particular
understanding with [the candidates and their agents].'' 116 S. Ct. at
2315.
While the Commission does not propose to change its definition of
independent expenditure in 11 CFR 109.1(a), the attached draft rules
would more clearly tie the concept of what negates the independence of
expenditures to a revised explanation of what constitutes coordination.
Accordingly, the Commission seeks comments on replacing the current
language in section 109.1(b)(4) with new language in section 100.23
that more fully explains what is meant by ``coordination with a
candidate.'' Comments are sought on several different alternative
versions of this provision. The proposed rule would add some new
examples of coordination, although these would not constitute an
exhaustive list. The examples include situations set out in section
441a(a)(7)(B) of the FECA where a person finances the reproduction,
republication, display, distribution or other form of dissemination of
the candidate's campaign materials, with several exceptions. The
exceptions consist of situations where the campaign materials are used
in communications that advocate the candidate's defeat, or that are
incorporated into an exempt news story, commentary or editorial, or
that are incorporated into a corporation's or labor organization's
expression of its own views. See 11 CFR 100.7(b)(2), 114.3(c)(1) and
Advisory Opinion 1996-48.
The new language in section 100.23(a)(1) would retain some portions
of the language of current 11 CFR 109.1(b)(4), which is based on
section 431(17) of the FECA, with regard to payments made in
cooperation or consultation or concert with, or at the request or
suggestion of, any candidate, or any authorized committee or agent of a
candidate. Alternative 2-A would not provide separate definitions for
each term contained in section 431(17). It incorporates both the
statutory standard and language from the plurality opinion in Colorado.
Alternatives 2-B, 2-C and 2-D would define the terms to provide
guidance to the regulated community. However, the definitions in
Alternative 2-B are broader and more inclusive than in Alternatives 2-C
or 2-D. The definitions in Alternative 2-C would and to stress the
mutuality of the plan of action connoted by the statutory terms which
make up ``coordination.'' Alternative 2-D generally follows Alternative
2-C, except for other changes described below.
Alternatives 2-A, 2-B, and 2-C also propose to add new language to
the definition of coordination in proposed section 100.23(a) based on
the plurality opinion in Colorado. The plurality indicated that
independent expenditures are those which are ``developed . . .
independently and not pursuant to any general or particular
understanding with [the candidates and their agents].'' Colorado at
2315. These alternatives indicate that coordination occurs when there
is a general or particular understanding or arrangement with a
candidate. Alternative 2-D of proposed section 100.23(a) excludes this
new language in favor of the statutory language. Comments are sought
concerning whether the new language should be added to the definition
of ``coordination'' or whether the Supreme Court intended this phrase
to be limited to its discussion of independent expenditures made by
party committees.
In addition, comments are sought as to whether coordination between
a person making an expenditure and a candidate or campaign committee
only results from a specific agreement on a particular advertisement or
communication, or other expenditure, or whether a more general
understanding or arrangement is sufficient to constitute coordination.
In paragraph (a)(3), of new section 100.23, Alternative 3-A would
continue the Commission's current approach of including payments based
on information about the candidate's plans, projects or needs provided
to the expending person by the candidate or the candidate's agents or
authorized committee. However, Alternative 3-A of the revised rules
would eliminate the current language regarding information provided
``with a view toward having an expenditure made. This alternative takes
the view that the term ``with a view toward having an expenditure
made'' requires a subjective determination of the candidate's or
committee's intentions, and the receipt of such information from the
candidate is sufficient to establish coordination. In contrast,
Alternatives 3-B and 3-C would retain the phrase ``with a view toward
having an expenditure made'' to provide further guidance in defining
the statutory term ``for the purpose of influencing a federal
election'' in light of the examples given in proposed section 100.23(a)
(1), (2), and (3). Alternative 3-C would define what is not meant by
``coordination'' so as to clarify the limits of the term to the
regulated community. Comments are sought as to whether an exchange of
information regarding the expending person's plans, projects or needs
also results in ``coordination.''
All the alternatives would also eliminate the current language
indicating when expenditures will be ``presumed'' to be coordinated.
This ``presumption'' has not provided sufficient certainty to the
regulated community.
Proposed new section 100.23 also explains more fully who is
considered to be an agent of a candidate. Alternative 4-A of paragraph
(b) of this draft rule would indicate that agents include persons who
during the same election cycle in which the payment is made hold
executive, policymaking, or
[[Page 24369]]
other significant advisory or fundraising positions with the
candidate's authorized committee; or have participated in strategic or
policymaking discussions with the candidate or campaign officials; or
provide campaign-related services such as polling, media advice, direct
mail, fundraising or campaign research. Alternative 4-B of paragraph
(b) of this draft rule would add an additional provision that agents
must have an express or implied grant of authority from the principal
to act on its behalf either generally or with regard to particular
matters. However, under both of these alternatives the rules would
specifically exclude entities that are not actively involved in
campaign decision-making, such as messenger and delivery services, and
other passive vendors. In addition, under proposed paragraph (c), as
under current 11 CFR 109.1, coordination would not result merely from
providing the expending person with Commission guidelines on
independent expenditures.
Additional issues related to coordination by party committees are
discussed below. These include the related questions of whether there
should be a different definition of ``independent expenditure'' and a
different standard as to what constitutes ``coordination'' for party
committees than for individuals and other political committees.
Section 109.1--Independent Expenditure Definition
The proposed regulations would make one modification to 11 CFR
109.1(a), which defines ``person'' for purposes of making independent
expenditures. The definition of ``person'' already includes political
committees. Nevertheless, the attached rules would add a reference to
party committees to recognize that, consistent with Colorado, party
committees may make independent expenditures.
In paragraph (b)(4) of section 109.1, Alternative 5-A would modify
the definition of the phrase ``made with the cooperation or with the
prior consent of, or in consultation with, or at the request of
suggestion of'' by referring the reader to the definition of
``coordination'' in 11 CFR 100.23. Alternative 5-B would eliminate
paragraph (b)(4) of this section.
Section 110.7--Party Committee Coordinated Expenditures and Independent
Expenditures
Section 110.7 of the Commission's regulations implements a
statutory exception to the contribution limits set forth at 2 U.S.C.
441a. This exception allows national, state and subordinate committees
of political parties to make expenditures up to specifically prescribed
amounts on behalf of the general election campaigns of federal
candidates without counting such expenditures against the committees'
contribution limits. See 2 U.S.C. 441a(d). These expenditures are
commonly referred to as ``coordinated'' because the FECA permits party
committees to make such expenditures after extensive consultation with
the candidates and their campaign staffs. Prior to the Colorado
decision, the Commission's regulations at 11 CFR 110.7(a)(5) and (b)(4)
also barred national, state and local party committees from making
independent expenditures. As noted above, at an earlier point in this
rulemaking, the Commission repealed paragraph (b)(4) of this section,
although paragraph (a)(5), barring national party committees from
making independent expenditures in the general election campaigns of
Presidential candidates, remains in effect. See 61 F.R. 40961 (Aug. 7,
1996).
In Colorado, the Supreme Court's plurality opinion delivered by
Justice Breyer (joined by Justices O'Connor and Souter) held that,
``The independent expression of a political party's views is `core'
First Amendment activity no less than is the independent expression of
individuals, candidates, or other political committees. [Citation
omitted]'' Colorado at 2316. The plurality stated, ``We therefore
believe this Court's prior case law controls the outcome here. We do
not see how a Constitution that grants to individuals, candidates, and
ordinary political committees the right to make unlimited independent
expenditures could deny the same right to political parties.'' Id. at
2317. The First Amendment rights of individuals and political
committees to make independent expenditures were initially delineated
by the Supreme Court in Buckley v. Valeo, 424 U.S. 1 (1976) (Buckley),
and Federal Election Commission v. National Conservative Political
Action Committee, 470 U.S. 480 (1985) (NCPAC), respectively. With
respect to coordinated expenditures, the Supreme Court's Colorado
decision did not modify or eliminate the existing statutory limits on
coordinated expenditures. The plurality opinion did not reach the
broader question of whether ``the First Amendment forbids congressional
efforts to limit coordinated expenditures as well as independent
expenditures.'' Colorado at 2319. However, those limits are the subject
of pending judicial proceedings.
In light of the Colorado decision, the Commission is seeking
comments on several proposed amendments to 11 CFR 110.7, including
alternative language, regarding both coordinated and independent
expenditures. First, the title of this section, and the references to
``expenditures'' found throughout, would be modified to clarify which
portions of this section apply to expenditures which are coordinated
with the candidate on whose behalf they are made, and which portions
apply to independent expenditures. For the convenience of the reader,
titles for each paragraph would also be added.
1. Independent Expenditures for Congressional Candidates
In light of the prior repeal of 11 CFR 110.7(b)(4), the attached
proposed rules do not limit the total amount of money political party
committees at all levels may devote to independent expenditures on
behalf of their congressional candidates. However, funds used to make
independent expenditures would continue to be subject to FECA
requirements. Party committee expenditures on behalf of House and
Senate candidates would not count towards the contribution limits when
those expenditures are genuinely independent of the candidates in that
election. Conversely, party committee expenditures on behalf of
candidates which do not qualify as independent must be treated as
either in-kind contributions subject to the limits of section 441a(a)
or (h) of the Act (See 2 U.S.C. 441a(a)(7)(B)), or as coordinated
expenditures subject to the limits of section 441a(d) of the Act,
unless they qualify as exempt activities under 2 U.S.C. 431(8)(B)(v),
(x) and (xii) and 431(9)(B)(iv), (viii) and (ix).
The Colorado opinion indicates that political party committees have
the same rights to make independent expenditures as other persons
covered by the FECA. Colorado at 2317. Consequently, under the proposed
new rules, independent expenditures made by political party committees
would be treated as subject to the same standards and conditions as
independent expenditures made by other entities. This includes the same
standards for avoiding coordination with candidates, as well as the
same reporting requirements, disclaimers and contribution limits.
Nevertheless, comments are requested as to whether different standards
should apply to party committees.
The Petition for Rulemaking argued that party committees are in
regular contact with their candidates, help develop candidate messages
and campaign strategy, and routinely share
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overlapping consultants, pollsters, fundraisers and other campaign
agents. According to the petition, these consultations, discussions,
and arrangements involve face-to-face meetings, telephone
conversations, and exchanges of paper and electronic mail on a regular
basis, sometimes daily, and take place at both the staff level and
higher levels. If the party has such ties to a candidate, it would be
difficult for the committees to achieve sufficient insulation from that
candidate so as to avoid any general or particular understanding that
would result in coordination, thereby destroying the independence of
their expenditures. As Justice Kennedy stated, concurring in the result
in Colorado, in most cases, the answer to the question of ``whether a
party's spending is made `in cooperation, consultation, or concert
with' its candidate * * * will be yes * * *.'' Colorado at 2322.
Nevertheless, the Court found it was possible for the Colorado
Republican Party to make independent expenditures in the specific
circumstances presented in the Colorado case. These circumstances
included the fact that the expenditures were made months before the
primary election, three individuals were vying for the nomination, and
no general election candidate had yet been selected. Id. at 2315. It
was also significant that the only ``politically relevant individuals''
to read the script were the state party chairman, executive director
and political director. Id. In Advisory Opinion 1984-30, the Commission
concluded that contacts during the primary campaign would raise a
rebuttable presumption that general election expenditures would be
based on the information about the candidate's plans, projects or needs
raised in the course of such contacts.
Nevertheless, the Commission seeks comments as to whether and how a
party committee could make expenditures which are genuinely independent
of a candidate when the party committee has already made, or is in the
process of making, coordinated expenditures or in-kind contributions
for that candidate. For example, would it be feasible for a party
committee to create a separate subdivision or other unit for the
exclusive purpose of making independent expenditures, and to
sufficiently insulate this unit from its regular staff and its daily
campaign activities? Would this separate unit have to be established
before the beginning of the election cycle, or before the first
campaign-related discussions any party officials or staff have with the
candidate's campaign staff? In the alternative, would it be sufficient
for the party committee to create this organization at any time before
the party's nominee is chosen? Does a party committee's ability to make
independent expenditures end when it nominates a candidate? Once a
party committee has coordinated with a particular candidate in a given
election, would it ever be possible to cease coordinating and begin
making independent expenditures with respect to that particular
candidate and election?
Similarly, if party committees are affiliated, the question arises
as to whether coordination by one party committee automatically
destroys the ability of other affiliated party committees to make
independent expenditures. In this regard, comments are sought as to
whether there may be a significant distinction between the relationship
between national, state and local committees on the one hand, and the
relationship between the national committee and its House and Senate
campaign committees? Another question concerns candidates who are
nominated at state party conventions. If the candidate who is nominated
faces little or no opposition at the convention, does this mean the
party organization staging the convention has sufficiently coordinated
with the nominee so as to preclude subsequent independent expenditures
by the state or local party committee in connection with the general
election campaign?
2. Independent Expenditures for Presidential Campaigns
In Colorado, the Supreme Court indicated that its decision involved
only congressional races, and did not ``address issues that might grow
out of the public funding of Presidential campaigns.'' Id. at 2314.
Previously, in NCPAC, the Supreme Court addressed the constitutionality
of one public-funding provision, section 9012(f) of the Presidential
Election Campaign Fund Act. 26 U.S.C. 9001 et seq. This provision
barred political committees from expending more than $1000 to further
the election of publicly-funded Presidential candidates in the general
election. The Supreme Court found 26 U.S.C. 9012(f) to violate the
First Amendment to the extent that it limited independent expenditures
by nonconnected political committees. NCPAC at 497. The Court
emphasized the ``fundamental constitutional difference between money
spent to advertise one's views independently of a candidate's campaign
and money contributed to the candidate to be spent on his campaign. * *
* [T]he absence of prearrangement and coordination undermines the value
of the expenditure to the candidate, and thereby alleviates the danger
that expenditures will be given as a quid pro quo for improper
commitments from the candidate.'' Id. at 497-98. However, this case did
not involve political party committees.
For a number of reasons, the proposed rules in paragraph (a)(4) of
section 110.7 would continue the current ban on national party
committees making independent expenditures on behalf of the general
election campaigns of Presidential candidates. One reason for retaining
these regulations is that they may still be necessary to implement the
provisions of 2 U.S.C. 441a(d), which were not invalidated by the
Supreme Court. The rules recognize that it may be difficult, perhaps
impossible, for a national party committee to be wholly independent of
its presidential candidate if the chair of the national party was
selected by the Presidential candidate or has worked closely with his
or her campaign staff over a period of time. Accordingly, the
Commission seeks comments regarding the extent of coordination between
party committees and Presidential candidates, in practice. Sections
432(e)(3)(A)(i) and 441a(d)(2) of the FECA allow the national committee
of a political party to serve as the principal campaign committee or
authorized committee of its Presidential candidate. See 11 CFR
102.12(c)(1) and 9002.1(c). In such a case, it does not seem possible
for party committees to operate independently of the candidate and the
candidate's agents.
Comments are also sought on several other issues addressed in
proposed paragraph (a)(4) of section 110.7. First, should the ban on
independent expenditures be extended to include those made in
connection with Presidential primaries? Secondly, should this provision
explicitly bar congressional campaign committees, as well as state and
local party committees, from making these independent expenditures? The
Commission is considering whether coordination between a national party
committee and its Presidential candidate destroys the ability of
affiliated state or local party committees to make independent
expenditures on behalf of that candidate. In the alternative, are such
independent expenditures precluded only when the state or local party
committee, itself, coordinates with the Presidential candidate's
committee? Another approach would be to establish a rebuttable
presumption that any party committee communications mentioning
Presidential candidates are coordinated
[[Page 24371]]
with those candidates in both the primary and the general election.
Another issue concerns the role of public funding. Comments are
sought on whether the ban on party committee independent expenditures
for Presidential candidates should only apply to those party committees
whose nominees accept public funding. Alternative 6-B of section
110.7(a) would implement this approach. In contrast, Alternative 6-A
would cover all Presidential candidates. Comments are also sought on
revising 11 CFR 110.7 and 9008.3(a)(4) to condition the grant of public
funding for national nominating conventions on the party committee's
and convention committee's agreement not to make independent
expenditures for either the primary or general election campaigns of
its Presidential and Vice Presidential candidates. Such a requirement,
while not appearing in the attached draft rules, would be predicated on
the assumption that nominating conventions are extensively coordinated
with these candidates, thereby precluding the possibility of
simultaneous or subsequent independent expenditures. However, this may
not be true if the nomination is still being contested by the time of
the convention.
3. Other Changes to Section 110.7
The Commission seeks comments on adding language to paragraph (c)
of section 110.7 to set forth the Commission's current policy regarding
the assignment of coordinated expenditure limits. The revised rule
would state that whenever a party committee authorizes another party
committee to use part or all of its coordinated expenditure limitation,
the authorization must be in writing, must specify a dollar amount, and
must be made before the committee so authorized actually makes the
coordinated expenditure. See Campaign Guide for Political Party
Committees (1996). This would apply to both the national committee and
state committees. Consequently, it would replace the language in
current paragraph (a)(4), that permits national committees of political
parties to assign their spending limits but does not specify how this
should be accomplished. Comments are requested as to whether copies of
such written authorizations should be attached to the committees'
disclosure reports.
New paragraph (d) of section 110.7 would indicate that the
explanation of ``coordinated'' in 11 CFR 100.23 and 109.1(b)(4) would
apply in determining whether expenditures are coordinated for purposes
of the coordinated expenditure limits of 11 CFR 110.7. Please note that
under the proposed rules, the Commission's standards for determining
whether a communication by a party committee is a coordinated
expenditure under 2 U.S.C. 441a(d) would continue to depend on whether
it contains an electioneering message and mentions a clearly identified
candidate.
Section 104.4(a)--Reporting Independent Expenditures
Paragraph (a) of this section sets out the reporting obligations of
political committees making independent expenditures. The draft rules
which follow would add a specific reference to party committees to make
clear that national, state and subordinate committees of political
parties would be subject to the same reporting requirements as other
political committees. Consequently, other regulations which establish
reporting requirements would apply in the same manner and to the same
extent that they apply to other political committees making independent
expenditures. E.g. 11 CFR 104.3(b)(3)(vii)(A) through (C) and 104.5(g).
Section 110.1(n) and 110.2(k)--Contributions to Committees Making
Independent Expenditures
The Commission requests comments on proposed new paragraph (n) of
section 110.1 and new paragraph (k) of section 110.2, which would
replace current paragraphs (d)(2) of these sections regarding the
application of the contribution limits to contributions to committees
that make independent expenditures. These sections need to be updated
because current paragraphs (d)(2) of each section recognize that non-
party committees may make independent expenditures, but do not
contemplate party committees doing so. Individuals may donate up to
$20,000 to national party committees. Consequently, under the proposed
new language, the $20,000 contribution limit would continue to apply
when the recipient national party committee uses the contribution to
make independent expenditures.
Section 110.11(a)--Party Committee Disclaimers
The Commission seeks comments on two changes to paragraph (a)(2) of
section 110.11 regarding disclaimers for party committee
communications. First, new language would be added to paragraph
(a)(2)(i) to state that the required disclaimer for communications
which constitute coordinated expenditures must indicate who authorized
the communication. Accordingly, the present language in paragraph
(a)(2)(ii) would be deleted. Currently, 11 CFR 110.11(a)(2)(ii) states
that coordinated expenditures need not include an authorization
statement if the communication is made before the party's candidate is
nominated. However, in the event that the Commission decides to
continue to treat party committee communications mentioning
Presidential candidates as inherently coordinated, comments are sought
as to whether paragraph (a)(2)(ii) should remain as it is now and not
require party committees to state which Presidential candidates
authorized these pre-primary communications.
Second, new paragraph (a)(2)(ii) would indicate that when party
committees make independent expenditure communications, the disclaimer
must state that the party committee paid for the communication, and
that the communication is not authorized by any candidate or authorized
committee. Given that independent expenditures contain express
advocacy, they are subject to the disclaimer requirements of 2 U.S.C.
Sec. 441d.
The Commission welcomes comments on proposed new 11 CFR 100.23, the
proposed amendments to 11 CFR 100.7(a), 104.4(a), 109.1(b), 110.1,
110.2, 110.7, and 110.11(a) as well as the issues raised in this
notice.
Certification of No Effect Pursuant to 5 U.S.C. 605(b) [Regulatory
Flexibility Act]
These proposed rules will not, if promulgated, have a significant
economic impact on a substantial number of small entities. The basis
for this certification is that the rules would conform to a recent
Supreme Court decision by permitting, but not requiring, small entities
to make independent expenditures. Therefore, no significant economic
impact would result.
List of Subjects
11 CFR Part 100
Elections.
11 CFR Part 104
Campaign funds, Political committees and parties, Reporting and
recordkeeping requirements.
11 CFR Part 109
Elections, Reporting and recordkeeping requirements.
[[Page 24372]]
11 CFR Part 110
Campaign funds, Political committees and parties.
For the reasons set out in the preamble, it is proposed to amend
Subchapter A, Chapter I of title 11 of the Code of Federal Regulations
as follows:
PART 100--SCOPE AND DEFINITIONS (2 U.S.C. 431)
1. The authority citation for Part 100 would continue to read as
follows:
Authority: 2 U.S.C. 431, 438(a)(8).
2. Section 100.7 would be amended by adding new paragraph (a)(5) to
read as follows:
Sec. 100.7 Contribution (2 U.S.C. 431(8)).
(a) * * *
Alternative 1-A
(5) Any payment made for a communication or anything of value that
is made in coordination with a candidate, or a candidate's authorized
committee or agent, or in coordination with a political committee or
its agent, except as otherwise provided in 11 CFR 114.2(c).
Alternative 1-B
(5) Any payment made for a communication or anything of value that
is made for the purpose of influencing any election for Federal office
and that is made in coordination with a candidate, or a candidate's
authorized committee or agent, or in coordination with a political
committee or its agent, except as otherwise provided.
(End of Alternatives for Sec. 100.7)
* * * * *
3. Part 100 would be amended by adding new section 100.23 to read
as follows:
Sec. 100.23 Coordination (2 U.S.C. 431(17).
(a) Payments made in ``coordination'' with a candidate include:
Alternative 2-A
(1) Payments made by any person in cooperation, consultation or
concert with, at the request or suggestion or direction of, or pursuant
to any general or particular understanding or arrangement with a
candidate or a candidate's authorized committee or agent;
Alternative 2-B
(1) Payments made by any person in cooperation, consultation or
concert with, at the request or suggestion or direction of, or pursuant
to any general or particular understanding or arrangement with a
candidate or a candidate's authorized committee or agent, as defined
below:
(i) In cooperation or concert with means acting, working or
operating together, or conferring or discussing or jointly deciding or
planning for one or more persons to take action(s);
(ii) In consultation with means providing information to one or
more persons and obtaining their reactions, suggestions or responses;
(iii) At the request, suggestion or direction of means asking,
ordering, requiring, indicating, telling, or otherwise expressly or
impliedly expressing the hope or desire that one or more persons take
action(s);
(iv) Pursuant to any general or particular understanding or
arrangement means an express or implied agreement or intention for one
or more persons to take action necessary to achieve a common goal;
Alternative 2-C
(1) Payments made by any person in cooperation, consultation or
concert with, at the request or suggestion or direction of, or pursuant
to any general or particular understanding or arrangement with a
candidate or a candidate's authorized committee or agent as defined
below. See the definition of person in 11 CFR 109.1(b)(1).
(i) In cooperation with means the act of persons working or
operating together in the formation of a plan;
(ii) In consultation with means a meeting of persons to discuss,
decide, or plan something;
(iii) In concert with means an agreement of two or more persons in
a design or plan;
(iv) At the request, suggestion or direction of means asking,
ordering, requiring, indicating, telling, or otherwise expressly or
impliedly expressing the hope or desire that one or more persons take
action(s);
(v) Pursuant to any general or particular understanding or
arrangement means an express or implied agreement or intention for one
or more persons to take action necessary to achieve a common goal;
Alternative 2-D
(1) Payments made by any person in cooperation, consultation or
concert with, at the request or suggestion or direction of a candidate
or a candidate's authorized committee or agent as defined below. See
the definition of person in 11 CFR 109.1(b)(1).
(i) In cooperation with means the act of persons working or
operating together in the formation of a plan;
(ii) In consultation with means a meeting of persons to discuss,
decide, or plan something;
(iii) In concert with means an agreement of two or more persons in
a design or plan;
(iv) At the request, suggestion or direction of means asking,
ordering, requiring, indicating, telling, or otherwise expressly or
impliedly expressing the hope or desire that one or more persons take
action(s);
(End of Alternatives for Paragraph (a)(1))
(2) Payments made by any person to finance the dissemination,
distribution, display, republication or reproduction, in whole or in
part, of any broadcast or any written, graphic or other form of
campaign materials prepared by the candidate or any agent or authorized
committee of the candidate, but not including the use of those
materials in communications that advocate the candidate's defeat or are
incorporated into a news story, commentary or editorial exempted under
11 CFR 100.7(b)(2) or are incorporated into a corporation's or labor
organization's expression of its own views under 11 CFR 114.3(c)(1);
and
Alternative 3-A
(3) Payments made based on information about the candidate's plans,
projects or needs provided to the expending person by the candidate, or
the candidate's authorized committee or agents.
Alternative 3-B
(3) Payments made based on information about the candidate's plans,
projects or needs provided to the expending person by the candidate, or
the candidate's authorized committee or agents with a view toward
having an expenditure made.
Alternative 3-C
(3) Payments made based on information about the candidate's plans,
projects or needs provided to the expending person by the candidate, or
the candidate's authorized committee or agents with a view toward
having an expenditure made, but not including mere contacts with
persons who are not empowered to commit their organizations, or which
do not result in coordinated action with persons empowered to commit
their organization, or which do not meet the definition of coordination
as defined in (a)(1) of this section.
[[Page 24373]]
(End of Alternatives for Paragraph (a)(3))
(b) A candidate's agents include persons who during the same
election cycle in which the payment is made--
Alternative 4-A
(1) Hold or have held executive, policymaking, or other significant
advisory or fundraising positions with the candidate's authorized
committee;
(2) Have participated in strategic or policymaking communications
with the candidate or campaign officials; or
(3) Are providing or have provided campaign-related services such
as polling, media advice, direct mail, fundraising or campaign
research, unless such persons do not make decisions, or participate in
decision-making, regarding the candidate's plans, projects or needs.
Alternative 4-B
(1) Have an express or implied grant of authority from the
principal to act on its behalf either generally or only with regard to
particular matters; and
(2) (i) Hold or have held executive, policymaking, or other
significant advisory or fundraising positions with the candidate's
authorized committee;
(ii) Have participated in strategic or policymaking communications
with the candidate or campaign officials; or
(iii) Are providing or have provided campaign-related services such
as polling, media advice, direct mail, fundraising or campaign
research, unless such persons do not make decisions, or participate in
decision-making, regarding the candidate's plans, projects or needs.
(End of Alternatives for Paragraph (b))
(c) Payments made in coordination with a candidate do not include
payments by any person whose only contact with the candidate,
candidate's authorized committee or agents is to receive Commission
guidelines on independent expenditures.
PART 104--REPORTS BY POLITICAL COMMITTEES (2 U.S.C. 434)
4. The authority citation for part 104 would continue to read as
follows:
Authority: 2 U.S.C. 431(1), 431(8), 431(9), 432(i), 434,
438(a)(8), 438(b), 439a.
5. Section 104.4 would be amended by revising paragraph (a) to read
as follows:
Sec. 104.4 Independent expenditures by political committees (2 U.S.C.
434(c)).
(a) Every political committee, including a party committee, which
makes independent expenditures shall report all such expenditures on
Schedule E in accordance with 11 CFR 104.3(b)(3)(vii). Every person
(other than a political committee) shall report independent
expenditures in accordance with 11 CFR part 109.
* * * * *
PART 109--INDEPENDENT EXPENDITURES (2 U.S.C. 431(17), 434(c))
6. The authority citation for part 109 would continue to read as
follows:
Authority: 2 U.S.C. 431(17), 434(c), 438(a)(8), 441d.
7. Section 109.1 would be amended by revising paragraphs (b)(1) and
(b)(4) to read as follows:
Sec. 109.1 Definitions (2 U.S.C. 431(17).
* * * * *
(b) * * *
(1) Person means an individual, partnership, committee (including a
party committee), association, qualified nonprofit corporation under 11
CFR 114.10(c), or any organization or group of persons, including a
separate segregated fund established by a labor organization,
corporation, or national bank (See part 114) but does not mean a labor
organization, corporation not qualified under 11 CFR 114.10(c), or
national bank.
* * * * *
Alternative 5-A
(4) Made with the cooperation or with the prior consent of, or in
consultation with, or at the request or suggestion of, a candidate or
any agent or authorized committee of the candidate means coordination
with the candidate prior to the publication, distribution, display or
broadcast of the communication, as defined in 11 CFR 100.23.
Alternative 5-B
(No Corresponding Provision)
* * * * *
PART 110--CONTRIBUTION AND EXPENDITURE LIMITATIONS AND PROHIBITIONS
8. The authority citation for part 110 would continue to read as
follows:
Authority: 2 U.S.C. 431(8), 431(9), 432(c)(2), 437d(a)(8), 441a,
441b, 441d, 441e, 441f, 441g and 441h.
9. In section 110.1, paragraph (d)(2) would be removed, paragraph
(d)(1) would be redesignated as paragraph (d), and a new paragraph (n)
would be added to read as follows:
Sec. 110.1 Contributions by persons other than multicandidate
political committees (2 U.S.C. 441a(a)(1)).
* * * * *
(n) Contributions to committees making independent expenditures.
The limitations on contributions of this section also apply to
contributions made to political committees making independent
expenditures under 11 CFR part 109.
10. In section 110.2, paragraph (d)(2) would be removed, paragraph
(d)(1) would be redesignated as paragraph (d), and a new paragraph (k)
would be added to read as follows:
Sec. 110.2 Contributions by multicandidate political committees (2
U.S.C. 441a(a)(2)).
* * * * *
(k) Contributions to multicandidate political committees making
independent expenditures. The limitations on contributions of this
section also apply to contributions made to multicandidate political
committees making independent expenditures under 11 CFR Part 109.
11. Section 110.7 would be revised to read as follows:
Sec. 110.7 Party committee coordinated expenditures and independent
expenditures (2 U.S.C. 441a(d)).
(a) Presidential elections. (1) The national committee of a
political party may make coordinated expenditures in connection with
the general election campaign of any candidate for President of the
United States affiliated with the party.
(2) The coordinated expenditures shall not exceed an amount equal
to 2 cents multiplied by the voting age population of the United
States.
(3) Any coordinated expenditure under paragraph (a) of this section
shall be in addition to--
(i) Any expenditure by a national committee of a political party
serving as the principal campaign committee of a candidate for
President of the United States; and
(ii) Any contribution by the national committee to the candidate
permissible under 11 CFR 110.1 or 110.2.
Alternative 6-A
(4) Political party committees may not make independent
expenditures (See 11 CFR Part 109) in connection with an election
campaign of a candidate for nomination or election to the office of
President of the United States.
Alternative 6-B
(4) Political party committees affiliated with a publicly funded
Presidential candidate may not make independent expenditures (See 11
CFR
[[Page 24374]]
Part 109) in connection with an election campaign of a candidate for
nomination or election to the office of President of the United States.
(End of Alternatives for Paragraph (a)(4))
(5) Any coordinated expenditures made by the national, state and
subordinate committees of a political party pursuant to paragraph (a)
of this section on behalf of that party's Presidential candidate shall
not count against the candidate's expenditure limitations under 11 CFR
110.8.
(b) Other federal elections. (1) The national committee of a
political party, and a State committee of a political party, including
any subordinate committee of a State committee, may each make
coordinated expenditures in connection with the general election
campaign of a candidate for Federal office in that State who is
affiliated with the party.
(2) The coordinated expenditures shall not exceed--
(i) In the case of a candidate for election to the office of
Senator, or of Representative from a State which is entitled to only
one Representative, the greater of--
(A) Two cents multiplied by the voting age population of the State;
or
(B) Twenty thousand dollars; and
(ii) In the case of a candidate for election to the office of
Representative, Delegate, or Resident Commissioner in any other State,
$10,000.
(3) Any coordinated expenditure under paragraph (b) of this section
shall be in addition to any contribution by a committee to the
candidate permissible under 11 CFR 110.1 or 110.2.
(c) Assignment of coordinated expenditure limits; compliance. The
national committee and State committees of a political party may make
the coordinated expenditures specified in this section by designating
another party committee as its agent, provided that before the
coordinated expenditure is made, the national or State committee
specifies in writing the amount the designated party committee may
spend. For limitation purposes, ``State committee'' includes
subordinate State committees. State committees and subordinate State
committees combined shall not exceed the limits in paragraph (b)(2) of
this section. To ensure compliance with the limitations, the State
committee shall administer the limitation in one of the following ways:
(1) The State central committee shall be responsible for insuring
that the coordinated expenditures of the entire party organization are
within the limitations, including receiving reports from any
subordinate committees making coordinated expenditures under paragraph
(b) of this section, and filing consolidated reports showing all
expenditures in the State with the Commission; or
(2) Any other method, submitted in advance and approved by the
Commission which permits control over expenditures.
(d) Definition of coordinated expenditure. The provisions of 11 CFR
100.23 and 109.1(b)(4) will apply for purposes of determining whether
an expenditure is coordinated under this section.
12. Section 110.11 would be amended by revising paragraph (a)(2) to
read as follows:
Sec. 110.11 Communications; advertising (2 U.S.C. 441d).
(a) * * *
(2) Independent and coordinated party expenditures. (i) For a
communication paid for by a party committee pursuant to 2 U.S.C.
441a(d), the disclaimer required by paragraph (a)(1) of this section
shall identify the committee that makes the expenditure as the person
who paid for the communication, regardless of whether the committee was
acting in its own capacity or as the designated agent of another
committee, and shall identify the candidate(s) or authorized
committee(s) who authorized the communication.
(ii) For a communication made by a party committee which
constitutes an independent expenditure, the disclaimer required by
paragraph (a)(1) of this section shall state that the party committee
paid for the communication and that the communication is not authorized
by any candidate or candidate's committee.
* * * * *
Dated: April 30, 1997.
John Warren McGarry,
Chairman, Federal Election Commission.
[FR Doc. 97-11590 Filed 5-2-97; 8:45 am]
BILLING CODE 6715-01-P