[Federal Register Volume 68, Number 84 (Thursday, May 1, 2003)]
[Notices]
[Pages 23311-23314]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-10701]


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FEDERAL ELECTION COMMISSION

[Notice 2003-9]


Enforcement Procedures

AGENCY: Federal Election Commission.

ACTION: Notice of public hearing and request for public comment.

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SUMMARY: The Federal Election Commission is announcing a public hearing 
on the enforcement processes of the Federal Election Campaign Act of 
1971, as amended (``the FECA'' or ``the Act''), and its implementing 
regulations. The Commission seeks comments from the public on the 
FECA's enforcement procedures administered by the Commission.

DATES: Comments must be received on or before May 30, 2003. A public 
hearing will be held on Wednesday, June 11, 2003, from 10 a.m. to 5 
p.m. at the Federal Election Commission, 999 E Street, NW., 9th floor 
Hearing Room, Washington, DC 20463. Commenters wishing to testify at 
the hearing must so indicate in their written or electronic comments.

ADDRESSES: All comments should be addressed to Susan L. Lebeaux, 
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]. Persons sending requests and comments by electronic 
mail must include their full name, electronic mail address and postal 
service address within the text of the request or comments. If the 
electronic comments include an attachment, the attachment must be in 
the Adobe Acrobat (.pdf) or Microsoft Word (.doc) format. Commenters 
are strongly encouraged to submit comments electronically to ensure 
timely receipt and consideration. The Commission will make every effort 
to post public comments on its Web site within ten business days of the 
close of the comment period.

FOR FURTHER INFORMATION CONTACT: Susan L. Lebeaux, Assistant General 
Counsel, Office of General Counsel, or Ruth Heilizer, Staff Attorney, 
999 E Street, NW., Washington, DC 20463, (202) 694-1650 or (800) 424-
9530.

SUPPLEMENTARY INFORMATION:

Background and Hearing Goals

    The Commission is currently examining its enforcement practices and 
procedures. The Commission is conducting this review to determine if 
issues have arisen that require reexamination or adaptation of 
enforcement practices and procedures. The Commission will use the 
comments received to determine whether internal directives or practices 
should be adjusted, and/or whether rulemaking in this area is advised. 
The Commission has made no decisions in this area, and may choose to 
take no action.
    The Federal Election Act of 1971, as amended, 2 U.S.C. 431 et seq. 
(``FECA'' or ``the Act''), grants to the Commission ``exclusive 
jurisdiction with respect to civil enforcement'' of the provisions of 
the Act and Chapters 95 and 96 of Title 26. 2 U.S.C. 437c(b)(1). 
Enforcement matters come to the Commission through complaints from the 
public, referrals from the Reports Analysis and Audit Divisions, 
referrals from other agencies, sua sponte submissions, and through 
agency personnel. Enforcement matters are processed, numbered as 
Matters Under Review (MURs), and assigned to enforcement attorneys. The 
Commission investigates MURs pursuant to the compliance procedures set 
forth at 11 CFR part 111, and various internal directives.
    In the course of addressing its administrative obligations, the 
Commission periodically reviews its programs. For example, the 
Commission recently reviewed its Alternative Dispute Resolution and 
Audit procedures and is currently reviewing its Reports Analysis 
Division procedures. The intent behind this Notice of Inquiry is to 
examine the

[[Page 23312]]

enforcement practices and procedures, many of which have been in place 
since the Commission was founded; and to give the regulated community 
and representatives of the public an opportunity to bring general 
enforcement policy concerns before the Commission.
    In inviting a constructive dialogue concerning its enforcement 
procedures, the Commission asks those who submit comments to be 
cognizant of the fact that statutory requirements, such as 
confidentiality and privacy mandates, may be implicated by certain 
proposals. Thus, the Commission would appreciate if participants would 
specify in their written remarks whether their proposals are compatible 
with applicable statutes or would require legislative action.
    The Commission would like to see addressed the issues that face 
counsel who practice before the Commission, complainants and 
respondents who directly interact with the FEC, witnesses, other third 
parties, and the general public. The Commission seeks general comments 
on how the FEC's enforcement procedures have been helpful or unhelpful 
in working through enforcement cases. The Commission is not interested 
in complaints or compliments about individual FEC employees, but seeks 
input on structural and policy issues. The Commission would also 
benefit from hearing about practices and procedures used by other civil 
law enforcement agencies when acting in a prosecutorial (i.e., non-
adjudicative) capacity. For example, do such agencies provide greater 
or lesser transparency? What opportunities exist for presenting or 
addressing issues, evidence, or potential claims that might be the 
basis of a subsequent adjudicative proceeding? The Commission would 
also be interested in any studies, surveys, research or other empirical 
data that might support changes in its enforcement procedures.

General Topics for Specific Comments

    The Commission welcomes input on any aspect of its enforcement 
procedures. Among the topics on which the Commission will accept 
comment are those below. However, the list is not seen as exhaustive 
and comments are encouraged on other issues as well.

1. Designating Respondents in a Complaint

    In addition to respondents named in the complaint, the Commission 
may designate additional respondents from information ascertained in 
the normal course of carrying out its supervisory responsibilities. 2 
U.S.C. 437(a)(2); 11 CFR 111.8(a). As a simple example, a complaint may 
allege that a campaign accepted an illegal contribution from 
Corporation X, but name only the campaign as a respondent. The 
Commission may add the alleged donor as a respondent. This has been 
done on a case-by-case basis. In some cases, the Commission has been 
criticized for designating too many additional respondents who may only 
have tangential interaction with the allegations in the complaint. At 
other times, the Commission has been criticized for failing to give 
early notice and an opportunity to address allegations that give rise 
to potential liability to persons who may be generated as respondents 
at the reason to believe stage or after the investigation is underway. 
The Commission seeks comments as to how the Commission designates 
respondents. In what circumstances and at what time is it appropriate 
to designate additional respondents? What criteria should the 
Commission apply?

2. Confidentiality Advisement

    Under 2 U.S.C. 437g(a)(12), an investigation shall not be made 
public without the consent of the respondents. To ensure the 
confidentiality of investigations, including the protection of 
respondents from premature disclosure, Commission staff advises 
witnesses (usually orally, but sometimes in writing) of this statutory 
requirement. The Commission has received comments in the past from 
respondents that this advisement has been interpreted by some third 
party witnesses (such as vendors) as preventing them from speaking to 
respondents and thus interfering with the respondent's own 
investigation of the events in question. See generally MUR 4624 
Coalition; Carol F. Lee, The Federal Election Commission, The First 
Amendment, and Due Process, 89 Yale L.J. 1199, 1209-1210 (1980). Should 
the Commission clarify its confidentiality advisement to address this 
issue? If so, how? What, if any, language should be included in an oral 
or written advisement to explicitly exclude communications with third 
party witnesses that are initiated by respondents? Is the Commission 
obliged to inform witnesses that they can speak to respondents? Is the 
Commission permitted to identify the respondents so as to convey such 
permission? Is there a better way in which to ensure confidentiality?

3. Motions Before the Commission

    Both complainants' and respondents' attorneys have occasionally put 
forward motions for the Commission to consider, including motions to 
dismiss and reconsider. Although neither the FECA nor the Commission's 
regulations provide for consideration of such motions, and the 
Administrative Procedure Act, 5 U.S.C. 551 et seq. (``APA'') does not 
require that agencies entertain such motions in nonadjudicative 
proceedings,\1\ the Commission has reviewed these motions on a case-by-
case basis. The Commission requests comments on whether procedures for 
consideration of these motions should be formalized in a rulemaking. If 
yes, what motions should be considered and what should the time frame 
be for consideration? Should there be a requirement that in order to 
trigger the Commission's review, the motion must contain genuinely new 
material that respondents had no opportunity to present previous to the 
subject findings? Should the motions be considered even though this 
would extend the time that a MUR remains active? Should parties be 
required to toll the statute of limitations for periods in which 
motions are under consideration by the Commission?
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    \1\ Note, however, that unless otherwise prohibited by law, it 
is always within the agency's discretion to afford more procedure 
than that required by the APA. Chrysler Corp. v. Brown, 441 U.S. 281 
(1979).
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4. Deposition and Document Production Practices

    When Commission attorneys take a respondent's sworn testimony at an 
enforcement deposition authorized by section 437d(a)(4), only the 
deponent and his or her counsel may attend. The respondent has the 
right to review and sign the transcript, but normally a respondent is 
not allowed to obtain a copy of, or take notes on, his or her own 
transcript until the investigation is complete, i.e. after all 
depositions have been taken.
    If the General Counsel decides to recommend that the Commission 
find probable cause to believe that a respondent has violated the Act, 
the Act requires that the General Counsel so notify the respondent, and 
provide a brief on the legal and factual issues in the case. The Act 
entitles respondents to submit, within 15 days, a brief stating their 
position on the factual and legal issues of the case. 2 U.S.C. 
437g(a)(3). Although nothing in the FECA requires that documents or 
deposition transcripts be provided to respondents at this stage, 
respondents are generally provided, upon request, with the documents 
and depositions of other respondents and third party witnesses that are 
referred to in the General Counsel's brief.

[[Page 23313]]

Respondents, however, may deem other information that the Commission 
does not disclose as valuable to the respondents' defense. Note that 
this practice can cause delay because, upon receiving these documents 
and depositions, respondents' counsel often seek an extension of time 
since counsel must submit the reply brief within 15 days of receiving 
the General Counsel's probable cause brief. Should counsel have access 
to all documents prior to the probable cause stage?
    The Commission's practice in providing depositions and documents to 
respondents contrasts with the practice of some other civil law 
enforcement agencies during the investigative stage of their 
proceedings, in which the only deposition transcript supplied to the 
respondent is the respondent's own deposition. Further, during the 
pendancy of an investigation, section 6b of the APA, 5 U.S.C. 555(c), 
grants investigative agencies the right to deny the request of a 
witness for copies of transcripts of his or her own testimony based on 
``good cause,'' such as concerns that witnesses still to be examined 
might be coached. Commercial Capital Corp. v. SEC, 360 F.2d 856, 858 
(7th Cir. 1966). On the other hand, it can be suggested the 
Commission's practice contrasts with procedural rights afforded in 
litigation matters under the Federal Rules of Civil Procedure, which 
give litigants the right to attend the depositions of all persons 
deposed in their case and obtain copies of all deposition transcripts.
    The Commission would like comments on whether and when the 
respective depositions (respondent, other respondents, and witness) 
should be released and to whom the depositions should be released. 
Should respondents be allowed full access to the depositions of all 
other respondents, including those with the same and those with 
competing interests, prior to the Commission's decision to sue in 
court? If so, should this occur only at the probable cause stage or at 
some point during the investigation? If the latter, when? Would full 
access to the deposition transcripts of all other respondents increase 
the likelihood of a public disclosure in violation of 2 U.S.C. 
437g(a)(12)? If full access were to be granted prior to the probable 
cause stage, would it compromise the effectiveness of the Commission's 
investigations? Should respondents be allowed to attend depositions of 
other respondents, including those with the same and those with 
competing interests? If so, in what circumstances? One change in 
practice to make transcripts of a respondent's own testimony more 
readily available would be for the Office of General Counsel routinely 
to allow deponent-respondents to procure immediately a copy of their 
own transcript unless on a case-by-case basis the General Counsel 
concludes (or the Commission concludes, on the recommendation of the 
General Counsel) that it is necessary to the successful completion of 
the investigation to withhold the transcript until completion of the 
investigation.
    Similarly, the Commission seeks comments on whether all relevant 
documents that would be required to be disclosed in civil litigation 
pursuant to Federal Rule of Civil Procedure 26(a) should be provided 
with the probable cause brief. Would it be practical to do so in cases 
involving voluminous records and multiple respondents? Who should bear 
the costs of copying documents and ordering deposition transcripts from 
court reporters? Would providing all such materials and allowing time 
for their review further delay the submission of responsive briefs? 
Would doing so compromise investigations? Should this be done on a 
case-by-case basis? Would some standard other than Rule 26(a) of the 
Federal Rules of Civil Procedure provide a more workable standard?
    The Commission seeks comments on these or other approaches to 
balancing its need to conduct effective investigations with the 
interests of respondents seeking to support their positions before the 
Commission.

5. Extensions of Time

    Under what circumstances, if any, should extensions of time be 
granted to respondents to respond to the probable cause brief? Are 
there particular situations in which extensions of time should be 
denied? If extensions are granted, should they be contingent on 
respondents' agreements to toll the statute of limitations for the 
extension period?

6. Appearance Before the Commission

    Pursuant to the FECA, Respondents are permitted to present their 
position through written submissions in response to the complaint and 
the General Counsel's probable cause brief, and may also do so at the 
reason-to-believe stage pursuant to Commission practice. Neither the 
FECA nor the APA specifically provide that respondents also be 
permitted the opportunity to appear and present their positions in 
person, and the Commission has no procedure allowing such appearances 
in the context of MURs.\2\ The Commission seeks comment on whether 
respondents should be entitled to appear before the Commission, either 
pro se or through counsel, at the probable cause stage and on motions 
to quash subpoenas. If so, should appearances be limited to certain 
types of hearings and cases? If so, what should be the limiting 
criteria? What should be the scope and form of the personal appearance? 
Should the Commission be permitted to draw an adverse inference if 
respondents decline to answer certain questions or do not fully answer 
them? Allowing counsel to appear would add an additional procedural 
right, but would also lengthen the enforcement process. How would this 
additional step be balanced with the timeliness of completing a MUR? Is 
the Commission justified in prolonging the process? Would this 
complicate the process or add unnecessary time constraints? What would 
respondents achieve that they are not already afforded by the statutory 
process? Would affording the opportunity to appear in person before the 
Commission at the probable cause stage diminish respondents' interest 
in conciliating at an earlier stage? Would it place respondents with 
limited resources, or those located far from Washington, at a 
comparative disadvantage, and if so, is this a valid reason to restrict 
personal appearances for all respondents? In cases involving multiple 
respondents, how would the Commission protect the confidentiality of 
other respondents also wishing to appear? The Commission would also 
benefit from hearing about whether other civil law enforcement agencies 
provide for personal appearances before agency decision-makers.
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    \2\ However, the Office of General Counsel, which may be 
recommending action adverse to the respondent, is present to answer 
questions of law and fact for the Commission.
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7. Releasing Documents or Filing Suit Before an Election

    The Commission's practice is to release to the public closed 
enforcement matters in the normal course of business, even if this 
occurs immediately prior to, or following, an election that may involve 
one of the respondents in the matter. Upon resolution of an enforcement 
matter, the Commission could not deny a FOIA request for disclosure of 
conciliation agreements or other dispositions simply because of the 
proximity of an upcoming election. Furthermore, the FECA provides for 
expedited conciliation immediately prior to an election, which allows 
voters to

[[Page 23314]]

consider a Commission determination that a campaign has not violated 
the FECA as alleged in a complaint, or alternatively, that a campaign 
has accepted responsibility for an election law violation. 2 U.S.C. 
437g(a)(4)(A)(ii).
    On the other hand, the Commission is sensitive to the fact that 
releasing documents or filing suit before an election, even when it 
occurs in the normal course of business, may influence election 
results. The Commission seeks comment on whether consideration of an 
upcoming election should or should not be considered when releasing 
documents. In particular, should the Commission adopt a policy of not 
releasing outcomes of cases for some period immediately preceding an 
election? If so, should that policy apply only to violations from a 
previous cycle? Would such a policy invite respondents to employ 
dilatory tactics for the apparent purpose of keeping information 
confidential until the election is over? Should the same considerations 
apply to when the Commission has completed the administrative process 
and is prepared to file an enforcement action in federal court? What if 
the statute of limitations is due to run before or shortly after the 
election?

8. Public Release of Directives and Guidelines

    In an effort to assure greater uniformity in sentencing, the 
Federal courts in the 1980s adopted sentencing guidelines. Should the 
Commission make public its penalty guidelines in a similar manner? Do 
other civil law enforcement agencies do so? If the Commission publishes 
such guidelines, would they be applicable without exception or with 
only a few specified exceptions? Should the Commission give up its 
discretion and flexibility to depart from its guidelines in instances 
when it feels that fairness or public policy requires another result? 
Would such guidelines minimize or even eliminate negotiations over what 
constitutes an appropriate penalty? Are there other directives that 
should be publicly available, including those pertaining to enforcement 
procedures? Should more procedural information be available via the Web 
site and other publications?

9. Timeliness

    Though the Commission in recent years has reduced its case backlog, 
it has still been criticized in some quarters for lack of timeliness. 
Are there specific practices or procedures that the Commission could 
implement, consistent with the FECA and the APA, that could reduce the 
time it takes to process MURs? Does the agency have too few staff 
assigned to handle its workload? Can the Commission afford respondents 
with more procedural rights without sacrificing its goal of conducting 
timely investigations? Should respondents be afforded more process than 
is required by the FECA or the APA when the likely result will be 
longer proceedings? How should a respondent's timeliness in responding 
to discovery requests and subpoenas and orders, or the lack thereof, be 
weighed in the balance? Has any particular stage of the enforcement 
procedure been a source of timeliness problems?

10. Prioritization

    The Commission has adopted an Enforcement Priority System to focus 
resources on cases that most warrant enforcement action. Should the 
Commission give lesser or greater priority to cases that require 
complex investigations and/or raise issues where there is little 
consensus about the application of the law--such as coordination, 
qualified non-profit corporation status, and express advocacy/issue ad 
analysis? Since cases involving these issues often involve large 
amounts of spending, and hence large potential violations, should these 
be the cases given high priority?

11. Memorandum of Understanding With the Department of Justice

    The Commission for years has divided responsibility for the 
enforcement of FECA with the Department of Justice. A 1977 Memorandum 
of Understanding has dictated that the Department of Justice should 
handle ``significant and substantial knowing and willful'' violations 
and the Commission should handle the rest. Is this still a valid 
demarcation of responsibility? Does anything in BCRA suggest a 
different approach is appropriate?

12. Dealing With 3-3 Votes at ``Reason To Believe'' Stage

    On some occasions the six commissioners split 3-3 on whether to 
find ``reason to believe'' and hence whether to conduct an 
investigation of the alleged violations in a complaint. Should the 
Commission adopt a policy of proceeding with an investigation in such 
circumstances where the Office of General Counsel has so recommended? 
Would a legislative change be required to permit an investigation in 
such circumstances?

13. Other Issues

    As noted above, the Commission welcomes comments on other issues 
relevant to the processing of MURs.

    Dated: April 25, 2003.
David M. Mason,
Commissioner, Federal Election Commission.
[FR Doc. 03-10701 Filed 4-30-03; 8:45 am]
BILLING CODE 6715-01-P