[Federal Register Volume 64, Number 236 (Thursday, December 9, 1999)]
[Proposed Rules]
[Pages 68951-68956]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-31825]


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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. 64, No. 236 / Thursday, December 9, 1999 / 
Proposed Rules  

[[Page 68951]]


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FEDERAL ELECTION COMMISSION

11 CFR Part 100

[Notice 1999-27]


General Public Political Communications Coordinated With 
Candidates

AGENCY: Federal Election Commission.

ACTION: Supplemental Notice of Proposed Rulemaking.

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SUMMARY: The Commission is proposing new rules to address coordinated 
communications made in support of or in opposition to clearly 
identified candidates, that are paid for by persons other than 
candidates, candidates' authorized committees, and party committees. 
Please note that the draft rules that follow do not represent a final 
decision by the Commission on the issues presented by this rulemaking. 
Further information is provided in the supplementary information that 
follows.

DATES: Comments must be received on or before January 24, 2000. If the 
Commission receives requests to testify, it will hold a hearing on 
these proposed rules on February 16, 2000, at 10:00 a.m. Persons 
wishing to testify at the hearing should so indicate in their written 
or electronic comments.

ADDRESSES: All comments should be addressed to Rosemary C. Smith, 
Assistant General Counsel, and must be submitted in either written or 
electronic form. Written comments should be sent to the Federal 
Election Commission, 999 E Street, NW, Washington, DC 20463. Faxed 
comments should be sent to (202) 219-3923, with printed copy follow-up 
to insure legibility. Electronic mail comments should be sent to 
[email protected]. Commenters sending comments by electronic mail 
should include their full name and postal service address within the 
text of their comments. Comments that do not contain the full name, 
electronic mail address and postal service address of the commenter 
will not be considered. The hearing will be held in the Commission's 
ninth floor meeting room, 999 E Street, NW, Washington, DC.

FOR FURTHER INFORMATION CONTACT: Ms. Rosemary C. Smith, Assistant 
General Counsel, or Ms. Rita A. Reimer, Attorney, 999 E Street, NW, 
Washington, DC 20463, (202) 694-1650 or (800) 424-9530 (toll free).

SUPPLEMENTARY INFORMATION: The Commission is seeking public comment on 
proposed rules that would address coordinated communications made in 
support of or in opposition to clearly identified candidates, that are 
paid for by persons other than candidates, candidates' authorized 
committees, and party committees. The Commission is also seeking 
comment on whether these same rules, or a different standard, should 
apply to expenditures, including communications, made by party 
committees that are coordinated with the parties' candidates.
    The Federal Election Campaign Act, 2 U.S.C. 431 et seq. (``FECA'' 
or the ``Act'') prohibits corporations and labor organizations from 
using general treasury funds to make contributions to a candidate for 
federal office. 2 U.S.C. 441b(a). It also imposes various limits on the 
amount of money or in-kind contributions other persons may contribute 
to federal campaigns. 2 U.S.C. 441a(a). While individuals and persons 
other than corporations and labor organizations can make independent 
expenditures in connection with federal campaigns, these expenditures 
must be made without cooperation or consultation with any candidate, or 
any authorized committee or agent of a candidate; and they shall not be 
made in concert with, or at the request or suggestion of, any 
candidate, or any authorized committee or agent of a candidate. 2 
U.S.C. 431(17).
    Expenditures that are coordinated with a candidate or campaign are 
considered in-kind contributions. As such, they are subject to the 
various limits and prohibitions set out in the Act. Buckley v. Valeo, 
424 U.S. 1, 46-47 (1976) (footnote omitted) (``Buckley''); Federal 
Election Commission v. The Christian Coalition, 52 F.Supp.2d 45, 85 
(D.D.C. 1999) (``Christian Coalition''). The Act defines 
``contribution'' at 2 U.S.C. 431(8) to include any gift, subscription, 
loan, advance, or deposit of money or anything of value made by any 
person for the purpose of influencing any election for federal office.
    The proposed rules, which define the term coordinated general 
public political communication, would be located in a new section of 
the Commission's rules, 11 CFR 100.23. They are intended to incorporate 
into the Commission's rules the standard articulated by the United 
States District Court for the District of Columbia in the Christian 
Coalition decision, supra. This is a supplemental Notice of Proposed 
Rulemaking (``NPRM'') to a 1997 NPRM that addressed coordinated 
activities between candidates and political parties. 62 FR 24367 (May 
5, 1997).

A. History of the Rulemaking

    In 1997, the Commission published a Notice of Proposed Rulemaking 
(``NPRM'') seeking comments on proposed revisions to 11 CFR 110.7, 
which implements the provisions of 2 U.S.C. 441a(d) regarding party 
committee coordinated expenditures and spending limits. 62 FR 24367 
(May 5, 1997). Section 441a(d) of the FECA 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 amounts they may contribute directly to those 
candidates. These section 441a(d) expenditures are commonly referred to 
as ``coordinated party expenditures'' because such expenditures can be 
made after extensive consultation with the candidates and their 
campaign staffs.
    Former 11 CFR 110.7(b)(4) had presumed that party committees were 
incapable of making independent expenditures, because of the close 
relationship between candidates and their party. This regulation was 
implicated by the Supreme Court's plurality opinion in Colorado 
Republican Federal Campaign Committee v. Federal Election Commission, 
518 U.S. 604 (1996) (Colorado). 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 coordinated expenditure limits found in section 441a(d) of the 
FECA. Id. at 613-14.
    Following the Colorado Supreme Court decision, and in response to a

[[Page 68952]]

rulemaking petition, the Commission promulgated a Final Rule on August 
7, 1996 that repealed paragraph (b)(4) of section 110.7 to the extent 
that this paragraph prohibited national and state committees of 
political parties from making independent expenditures for 
congressional candidates. 61 FR 40961 (Aug. 7, 1996). On the same date, 
the Commission published a Notice of Availability seeking comment on 
other significant issues arising from the Colorado decision. 61 FR 
41036 (Aug. 7, 1996). These included possible amendments to 11 CFR Part 
109, the Commission's rules addressing independent expenditures by any 
person, and 11 CFR 110.7 to provide standards for determining when 
party committee expenditures qualify as ``independent'' or are 
considered ``coordinated'' with federal candidates. Another issue 
raised was whether to modify or repeal the rule barring national party 
committees from making independent expenditures on behalf of 
Presidential candidates in the general election. See 11 CFR 
110.7(a)(5). No statements supporting or opposing the petition were 
received by the close of the comment period.
    On May 5, 1997 the Commission issued an NPRM in which it sought 
comments on proposed revisions to these regulations. 62 FR 24367 (May 
5, 1997). Ten comments were received in response to this NPRM. On June 
18, 1997, the Commission held a public hearing on this rulemaking, at 
which six witnesses testified.
    The Commission subsequently decided to hold the 1997 rulemaking in 
abeyance until it received further direction from the courts. The 
coordinated spending limits were invalidated on Constitutional grounds 
by the district court in Colorado Republican Federal Campaign Committee 
v. Federal Election Commission, 41 F.Supp.2d 1197 (D. Colo. 1999), on 
remand from the Colorado Supreme Court decision. This case is currently 
on appeal to the Court of Appeals for the Tenth Circuit, with oral 
argument scheduled for early next year.
    On December 16, 1998, the Commission published a new NPRM putting 
forth proposed amendments to its rules governing publicly financed 
Presidential primary and general election candidates. 63 FR 69524 (Dec. 
16, 1998). Issues concerning coordination between party committees and 
their Presidential candidates, which had been raised in the earlier 
NPRM, were addressed in the public funding rulemaking. For example, the 
1998 NPRM put forward narrative proposals regarding a content-based 
standard for coordinated communications made to the general public. It 
also sought comment on coordination between the national committees of 
political parties and their Presidential candidates with respect to 
poll results, media production, consultants, and employees whose 
services are intended to benefit the parties' eventual Presidential 
nominees.
    The Commission received seven written comments on coordinated 
expenditures in response to the 1998 NPRM. The Commission subsequently 
reopened the comment period and held a public hearing on March 24, 
1999, at which four witnesses presented testimony on coordination 
issues.
    On November 3, 1999, the Commission promulgated new paragraph (d) 
of section 110.7, addressing pre-nomination coordinated expenditures. 
64 FR 59606 (Nov. 3, 1999). The new paragraph states that party 
committees may make coordinated expenditures in connection with the 
general election campaign before their candidates have been nominated. 
It further states that all pre-nomination coordinated expenditures 
shall be subject to the section 441a(d) coordinated expenditure 
limitations, whether or not the candidate with whom they are 
coordinated receives the party's nomination. Please note that new 
paragraph 110.7(d) applies to all federal elections. For additional 
information, see Explanation and Justification to Section 110.7, Party 
Committee Coordinated Expenditures and Spending Limits (2 U.S.C. 
441a(d)), 64 FR 42579, 42580-81 (Aug. 5, 1999).
    At this point, the Commission is continuing to evaluate possible 
amendments to 11 CFR 110.7 and 109.1 regarding the definitions of 
``coordinated'' and ``independent'' expenditures, the standards 
applicable to party committee advertisements directed to the general 
public, and the possible repeal or modification of 11 CFR 110.7(a)(5), 
which currently bars national party committees from making independent 
expenditures in connection with Presidential general election 
campaigns. Consequently, revised proposals on these topics may be put 
out for additional public comment in the future. In addition, the 
Commission may consider amending 11 CFR 109.1(b)(4) to refer to the 
coordination standard in 11 CFR 100.23 applicable to general public 
political communications. However, in addition to the specific 
proposals discussed below that address other types of coordinated 
communications, comments are sought as to whether it would be advisable 
to continue to await further judicial resolution of the Constitutional 
question involving the limits on coordinated party expenditures before 
issuing new rules on such spending.

B. Post-Colorado Judicial Opinions

1. The Christian Coalition Decision

    The Christian Coalition case arose out of an FEC enforcement action 
alleging coordination between the Christian Coalition and various 
federal campaigns in connection with the 1990, 1992, and 1994 
elections, resulting in disbursements from the general corporate 
treasury for voter guides, ``get out the vote'' activities, direct 
mailings and payments to speakers. The Christian Coalition 
characterized these activities as independent corporate speech, and the 
FEC alleged that because of the varying degrees of interaction between 
the Christian Coalition and those candidates and their campaigns, the 
activities should be treated as in-kind contributions that violated the 
Act's contribution limits and/or prohibitions.
    In setting out a working definition of ``coordination'' to address 
this situation, the Christian Coalition court explained that ``the 
standard for coordination must be restrictive, limiting the universe of 
cases triggering potential enforcement actions to those situations in 
which the coordination is extensive enough to make the potential for 
corruption through legislative quid pro quo palpable without chilling 
protected contact between candidates and corporations and unions.'' 52 
F.Supp.2d at 88-89. The court continued that ``First Amendment clarity 
demands a definition of 'coordination'' that provides the clearest 
possible guidance to candidates and constituents, while balancing the 
Government's compelling interest in preventing corruption of the 
electoral process with fundamental First Amendment rights to engage in 
political speech and political association.'' Id. at 91. In its opinion 
the district court referred to ``expressive expenditures,'' as opposed 
to expenditures for other types of campaign support, and defined a 
``coordinated expressive expenditure'' as ``one for a communication 
made for the purpose of influencing a federal election in which the 
spender is responsible for a substantial portion of the speech and for 
which the spender's choice of speech has been arrived at after 
coordination with the campaign.'' Id. at 85, n. 45.
    The court went on to explain that ``an expressive expenditure 
becomes `coordinated,' where the candidate or her agents can exercise 
control over, or

[[Page 68953]]

where there has been substantial discussion or negotiation between the 
campaign and the spender over a communication's: (1) contents; (2) 
timing; (3) location, mode, or intended audience (e.g., choice between 
newspaper or radio advertisement); or (4) `volume' (e.g., number of 
copies of printed materials or frequency of media spots). `Substantial 
discussion or negotiation' is such that the candidate and spender 
emerge as partners or joint venturers in the expressive expenditure, 
but the candidate and spender need not be equal partners.'' Id. at 92. 
The court acknowledged that ``a standard that requires 'substantial' 
anything leaves room for factual dispute,'' but reasoned that the 
standard reflects a reasonable balance between possibly chilling some 
protected speech and the need to protect against the ``real dangers to 
the integrity of the electoral process'' expressive expenditures may 
present. Id.
    The district court proceeded to apply this standard to the 
challenged campaign activities. In most instances the court did not 
find coordination. For example, the court found no coordination between 
the Christian Coalition and the Bush-Quayle campaign in the preparation 
of voter guides in connection with the 1992 Presidential campaign, 
explaining that, while the campaign was generally aware President Bush 
would compare favorably in the eyes of the target audience with the 
other candidates profiled in the guides, the campaign staff did not 
seek to discuss the issues that would be profiled or how they would be 
worded. Nor did they seek to influence the Coalition's decisions as to 
how many guides would be produced, and when and where they would be 
distributed. Id. at 93-95. Similarly, the fact that a Coalition 
official served as a volunteer in a 1994 House campaign and also made 
decisions as to where the Coalition's voter guides would be distributed 
in connection with the House campaign did not amount to coordination 
where the official did not make his decisions based on any discussions 
or negotiations with the campaign for which he volunteered. Id. at 95-
96. In contrast, the court found coordination where the Coalition 
provided a Senate campaign consultant with a commercially valuable 
mailing list. Id. at 96. The Commission subsequently decided not to 
appeal the district court's decision.

2. The Clifton and Public Citizen Decisions

    In Clifton v. Federal Election Commission, 114 F.3d 1309 (1st Cir. 
1997), cert. denied, 118 S.Ct. 1036 (1998) (``Clifton''), a three-judge 
panel of the United States Court of Appeals for the First Circuit ruled 
in a split decision that coordination in the context of voter guides 
``implie[s] some measure of collaboration beyond a mere inquiry as to 
the position taken by a candidate on an issue.'' 114 F.3d at 1311, 
citing Buckley, 424 U.S. at 46-47 and n. 53 (1976). Over a strong 
dissent, the panel invalidated those portions of the Commission's voter 
guide regulations at 11 CFR 114.4(c)(5)(i), (ii)(C) that limit any 
contact with candidates to written inquiries and replies, and generally 
require all candidates for the same office to receive equal space and 
prominence in the guide. Id. at 1317. The court also invalidated the 
Commission's voting record rules at 11 CFR 114.4(c)(4) to the extent 
they limit contact with candidates to written inquiries on candidates' 
positions. Id. In Federal Election Commission v. Public Citizen, Inc., 
1999 WL 731056 (N.D. Ga. 1999), a federal district court followed the 
Clifton ``collaboration'' language in holding that contacts between a 
public interest group and a candidate made in connection with an 
advertising campaign to defeat a candidate for the House of 
Representatives were not coordinated for purposes of the FECA. The 
Commission did not appeal that portion of the Public Citizen decision 
that addresses the coordination standard.

C. Proposed Rules

    The Commission is proposing to add a new section 11 CFR 100.23 to 
its rules, to address coordinated communications made in connection 
with federal campaigns that are paid for by persons other than 
candidates, candidates' authorized committees, and party committees. 
The Commission believes it is appropriate to place this language in a 
separate section of the rules to properly alert the regulated community 
of this standard.
    The proposed new section, which would be entitled Coordinated 
General Public Political Communications, would largely follow the 
language of the Christian Coalition decision, discussed above. The 
Commission is, however, proposing to use the phrase ``general public 
political communication'' in place of ``expressive expenditure,'' the 
term used by the Christian Coalition court, because that term may not 
give the regulated community adequate notice of the types of 
communications that would be covered by these rules.
    The Commission is proposing to define the term ``general public 
political communications'' to include those made through a broadcasting 
station, including a cable television operator; newspaper; magazine; 
outdoor advertising facility; mailing or any electronic medium, 
including over the Internet or on a web site. It would be limited to 
those communications having an intended audience of over one hundred 
people. See proposed 11 CFR 100.23(e)(1). Including cable television 
broadcasts is consistent with the Commission's candidate debate 
regulations at 11 CFR 100.13(a)(2), while including communications made 
over the Internet reflects the expanding role of that medium in federal 
campaigns. The exclusion of communications with an intended audience of 
one hundred people or fewer mirrors the Commission's disclaimer rules 
at 11 CFR 110.11(a)(3), which exempt from the disclaimer requirements 
direct mailings of one hundred pieces or less.
    Please note that the term ``general public political 
communication'' is similar to the term ``general public political 
advertising,'' which appears in three places in the Act and in several 
sections of the regulations. The term has similar and generally 
consistent meanings in the Act and the Commission's rules. For example, 
the definitions of ``contribution'' and ``expenditure'' at 2 U.S.C. 
431(8)(B)(v) and 431(9)(B)(iv) respectively refer to ``broadcasting 
stations, newspapers, magazines, or similar types of general public 
political advertising.'' Section 441d(a) of the Act, which addresses 
communications that require a disclaimer, includes the same list and 
adds outdoor advertising facilities and direct mailings. The 
corresponding rules are found at 11 CFR 100.7(b)(9) (definition of 
``contribution''), 100.8(b)(10) (definition of ``expenditure''), and 
110.11(a)(1) (communications requiring disclaimers). Consequently, the 
Commission believes the term ``general public political 
communications'' describes the types of communications the court had in 
mind in Christian Coalition in a manner consistent with sections 431(8) 
and (9) and 441d(a) of the Act.
    The proposed rules in 11 CFR 100.23 would also be limited to 
communications that include a ``clearly identified candidate.'' The 
term ``clearly identified candidate'' would have the same meaning as 
that in 11 CFR 100.17 and 2 U.S.C. 431(17). Thus, it would include 
instances where the candidate's name, nickname, photograph, or drawing 
appears, or the identity of the candidate is otherwise apparent through 
an unambiguous reference such as ``the President,'' ``your 
Congressman,'' or ``the incumbent,'' or through an

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unambiguous reference to his or her status as a candidate such as ``the 
Democratic Presidential nominee'' or ``the Republican candidate for 
Senate in the State of Georgia.''
    Proposed paragraph 11 CFR 100.23(c) contains the text of the 
coordination standard. The Commission is seeking comments on 
alternative language at two places in this paragraph. The first would 
appear in the introductory portion of the paragraph. Under Alternative 
1-A, a communication would be considered to be coordinated if the 
communication was paid for by persons other than the candidate, the 
candidate's authorized committee, or a party committee, and was 
created, produced or distributed as discussed below.
    Alternative 1-B would add the additional qualification that the 
communication be distributed primarily in the geographic area in which 
the candidate was running in order to be considered coordinated with a 
candidate or party committee. Alternative 1-B is intended to address 
the concern that the costs of national legislative campaigns that refer 
to clearly-identified candidates, and may be endorsed by or designed by 
one or more of the named candidates, not be considered expenditures on 
behalf of those candidates' campaigns. For example, expenditures made 
in connection with a national campaign to support the so-called 
``Shays-Meehan'' campaign finance legislation would not be considered 
contributions to Rep. Shays or Rep. Meehan, even if the group 
distributing the advertisement had consulted with them to design the 
national advertising campaign in support of their legislation and 
referred to it as the ``Shays-Meehan bill'' in the advertising.
    One potential concern with the geographic limitation language 
proposed in Alternative 1-B is that in many parts of the country the 
media market may cover several adjacent states. Thus, political 
advertisements broadcast from a station in these areas arguably may not 
be ``distributed primarily in the geographic area in which [a] 
candidate [is] running.'' For example, much television and radio 
advertising made in connection with New Hampshire elections is aired 
over Boston broadcast media, because there is no other major city from 
which to air these broadcasts. Many broadcasts aimed at New Jersey 
elections are aired over New York City media because a large number of 
New Jersey voters receive these broadcasts.
    Alternative 1-B would also exclude from the definition of 
coordination communications in which a candidate in one state solicits 
funds on behalf of a candidate in another, as long as contributors were 
asked to send their contributions directly to the candidate on whose 
behalf they were made. Similarly, Alternative 1-B would not cover an 
outside organization's solicitations on behalf of a candidate, if these 
were made primarily outside the geographic area in which the candidate 
was running, and if the outside organization does not collect and 
forward the contributions to the candidate.
    The Commission welcomes comments on alternative ways to accomplish 
the desired result of Alternative 1-B through means other than the 
proposed geographic limitation language.
    The Commission is also seeking comment on two alternatives of a 
provision to be located in 11 CFR 100.23(c)(1) that addresses 
communications made at the request or suggestion of the candidate or 
campaign. Alternative 2-A would state that coordination occurs when a 
communication is created, produced or distributed at the request or 
suggestion of, or when authorized by, a candidate, candidate's 
authorized committee, a party committee, or the agent of any of the 
foregoing. Alternative 2-B would limit such coordination to those 
instances where the parties also discuss the content, timing, location, 
mode, intended audience, volume of distribution or frequency of 
placement of that communication, the result of which is collaboration 
or agreement.
    Alternative 2-A reflects the following language in the Christian 
Coalition decision, in which the court stated, ``The fact that the 
candidate has requested or suggested that a spender engage in certain 
speech indicates that the speech is valuable to the candidate, giving 
such expenditures sufficient contribution-like qualities to fall within 
the Act's prohibition on contributions.'' 52 F.Supp.2d at 91. 
Alternative 2-B would further restrict coordinated communications to 
those instances in which discussion of these additional topics takes 
place.
    Proposed 11 CFR 100.23(c)(2) would treat communications as 
coordinated after the candidate or the candidate's agent, or a party 
committee or its agent, has exercised control or decision-making 
authority over the content, timing, location, mode, intended audience, 
volume of distribution, or frequency of placement of the communication.
    Under proposed 11 CFR 100.23(c)(3), a communication would be 
considered coordinated if it was made after substantial discussion or 
negotiation between the creator, producer or distributor of the 
communication, or person paying for the communication, and a candidate, 
candidate's authorized committee or a party committee, regarding the 
content, timing, location, mode, intended audience, volume of 
distribution or frequency of placement of that communication, the 
result of which is collaboration or agreement. It would further provide 
that substantial discussion or negotiation could be evidenced by one or 
more meetings, conversations or conferences regarding the value or 
importance of that communication for a particular election.
    The Commission recognizes, as did the Christian Coalition court, 
that use of the term ``substantial'' means that enforcement matters 
involving this standard will likely be fact-specific. 52 F.Supp.2d at 
92. However, it may be possible to clarify the application of this 
standard to specific facts and circumstances by use of the Commission's 
advisory opinion process. See 2 U.S.C. 437f.
    Consistent with the Buckley, Christian Coalition and Clifton 
decisions, the proposed rules would provide at 11 CFR 100.23(d) that a 
candidate's or political party's response to an inquiry regarding the 
candidate's or the party's position on legislative or public policy 
issues does not alone make the communication coordinated.
    As discussed above, although money spent on these communications is 
referred to as a coordinated expenditure, the expenditure is treated 
under the FECA as an in-kind contribution. Thus, the proposed rules 
state at 11 CFR 100.23(b) that any general public political 
communication that includes a clearly identified candidate and is 
coordinated with that candidate, an opposing candidate, or a party 
committee supporting or opposing that candidate is both an expenditure 
under 11 CFR 100.8(a) and an in-kind contribution under 11 CFR 
100.7(a)(1)(iii). As such, it is subject to the contribution limits of 
2 U.S.C. 441a and must be reported as a contribution and an expenditure 
as required at 2 U.S.C. 434.

D. Hypotheticals

    In order to properly evaluate the practical effect of the proposed 
coordination regulations, certain Commissioners seek comment on the 
following hypotheticals. In particular, the Commissioners would like 
comments on whether (1) the activities described in the hypotheticals 
constitute coordination under the draft language contained in the 
Notice of

[[Page 68955]]

Proposed Rulemaking; and (2) whether the communications described in 
the hypotheticals are subject to the Commission's jurisdiction.
    I. Candidate Smith is slightly behind in the polls, low on money, 
and needs help. It is the week before the election and he knows that a 
wealthy contributor is planning to run an independent expenditure 
advertisement to assist the Smith campaign. Smith contacts the 
contributor and complains that nobody has focused on an important 
matter in the campaign: various problems in the personal life of his 
opponent, Congressman Jones. Because of this oversight, candidate Smith 
believes that Congressman Jones is viewed in a better light by the 
electorate. Candidate Smith, however, does not want to run such an 
advertisement himself for fear of being accused of negative 
advertising.
    During his meeting with candidate Smith, the wealthy supporter 
says, ``That's a great idea! Thanks for the information.'' After the 
meeting, the wealthy supporter changes the advertisement to say: 
``Congressman Jones is a liar, tax cheat, wife-beater, and absentee 
legislator--keep that in mind on Tuesday.'' The advertisement runs on 
the weekend before the election. Is this a coordinated expenditure? 
Would it make a difference if the wealthy supporter said nothing during 
his meeting with the candidate?
    II. The Texas Savings and Loan League would like to reinforce the 
public's confidence in the safety of deposits in federally insured 
Texas Savings and Loan institutions. To this end, it runs a public 
service announcement featuring the State's senior United States Senator 
who is also a candidate for re-election. The advertisement, which runs 
in January of the election year, opens with a live picture of the 
Senator against a background with the Texas Savings and Loan 
Association and logo:
    ANNOUNCER: ``Senator William Moore.''
    SENATOR MOORE: ``For fifty-four years now, savings and loan 
deposits have been guaranteed by the United States government. 
Throughout all of that time, not one penny of insured deposits has been 
lost in Texas, or anywhere else in the country. Your deposit of up to 
$100,000 is as good as gold in a federally insured Texas savings and 
loan. As safe as Fort Knox.''
    BILLBOARD: ``This message brought to you as a public service by 
your local Savings and Loan Association.''
    Since the candidate appeared in the advertisement, it would appear 
to have been ``coordinated'' or made in cooperation with the candidate. 
As such, should the advertisement be viewed as an in-kind contribution 
to the Moore campaign? Or, does content and timing matter? What if the 
advertisement ran the week before the election and concluded with the 
words, ``Please support Senator William Moore!''? Before deciding 
whether to apply the Commission's coordination regulations, should the 
Commission decide whether the content of the advertisement is ``in 
connection with'' or ``for the purpose of influencing'' an election? If 
so, should the Commission provide guidance to the regulated community 
and define those terms in the coordination rulemaking?

E. Coordinated Party Expenditures

    As explained above, the Commission has an ongoing rulemaking 
addressing coordinated party expenditures, i.e., political party 
expenditures that are coordinated with particular candidates. The 
details of those proposals, which included several alternatives, can be 
found in the NPRM published on May 5, 1997. 62 FR 24367 (May 5, 1997). 
That rulemaking had been held in abeyance because the issues are 
involved in ongoing litigation. However, the Commission welcomes 
comments on whether the standard for coordination proposed in this 
supplemental NPRM on coordination should be applied to political party 
expenditures for general public political communications that are 
coordinated with particular candidates. If not, (1) why should a 
different standard be applied to coordination in that context? (2) What 
should that different standard be?
    The Commission also welcomes comments on any related issue.

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 court 
decisions that expand the definition of certain coordinated 
communications made in support of or in opposition to clearly 
identified candidates. Therefore, no significant economic impact would 
result.

List of Subjects in 11 CFR Part 100

    Elections.
    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. Part 100 would be amended by adding new section 100.23 to read 
as follows:


Sec. 100.23  Coordinated General Public Political Communications.

    (a) Scope. This section applies to general public political 
communications paid for by persons other than candidates, authorized 
committees, and party committees.
    (b) Treatment as expenditures and contributions. Any general public 
political communication that includes a clearly identified candidate 
and is coordinated with that candidate, an opposing candidate or a 
party committee supporting or opposing that candidate is both an 
expenditure under 11 CFR 100.8(a) and an in-kind contribution under 11 
CFR 100.7(a)(1)(iii).

Alternative 1-A for Paragraph (c) Introductory Text

    (c) Coordination with candidates and party committees. A general 
public political communication is considered to be coordinated if the 
communication is paid for by any person other than the candidate, the 
candidate's authorized committee, or a party committee, and is created, 
produced or distributed--

Alternative 1-B for Paragraph (c) Introductory Text

    (c) Coordination with candidates and party committees. A general 
public political communication is considered to be coordinated if the 
communication is distributed primarily in the geographic area in which 
a candidate is running, is paid for by any person other than that 
candidate, the candidate's authorized committee, or a party committee, 
and is created, produced or distributed--

Alternative 2-A for Paragraph (c)(1)

    (1) At the request or suggestion of, or authorized by, the 
candidate, the candidate's authorized committee, a party committee, or 
the agent of any of the foregoing;

Alternative 2-B for Paragraph (c)(1)

    (1) At the request or suggestion of, or authorized by, the 
candidate, the candidate's authorized committee, a party committee, or 
the agent of any of the foregoing regarding the content, timing, 
location, mode, intended audience, volume of distribution or

[[Page 68956]]

frequency of placement of that communication, the result of which is 
collaboration or agreement;
    (2) After the candidate or the candidate's agent, or a party 
committee or its agent, has exercised control or decision-making 
authority over the content, timing, location, mode, intended audience, 
volume of distribution, or frequency of placement of that 
communication; or
    (3) After substantial discussion or negotiation between the 
creator, producer or distributor of the communication, or the person 
paying for the communication, and the candidate, the candidate's 
authorized committee or a party committee, regarding the content, 
timing, location, mode, intended audience, volume of distribution or 
frequency of placement of that communication, the result of which is 
collaboration or agreement. Substantial discussion or negotiation may 
be evidenced by one or more meetings, conversations or conferences 
regarding the value or importance of that communication for a 
particular election.
    (d) Exception. A candidate's or political party's response to an 
inquiry regarding the candidate's or party's position on legislative or 
public policy issues does not alone make the communication coordinated.
    (e) Definitions. For purposes of this section:
    (1) General public political communications include those made 
through a broadcasting station (including a cable television operator), 
newspaper, magazine, outdoor advertising facility, mailing or any 
electronic medium, including the Internet or on a web site, with an 
intended audience of over one hundred people.
    (2) Clearly identified has the same meaning as set forth in 11 CFR 
100.17.

    Dated: December 3, 1999.
Scott E. Thomas,
Chairman, Federal Election Committee.
[FR Doc. 99-31825 Filed 12-8-99; 8:45 am]
BILLING CODE 6715-01-P