[Federal Register Volume 69, Number 67 (Wednesday, April 7, 2004)]
[Proposed Rules]
[Pages 18301-18304]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-7855]


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FEDERAL ELECTION COMMISSION

11 CFR Part 110

[Notice 2004-7]


Inaugural Committee Reporting and Prohibition on Accepting 
Foreign National Donations

AGENCY: Federal Election Commission.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Federal Election Commission seeks comments on proposed 
rules setting forth reporting requirements for Presidential inaugural 
committees and prohibiting Presidential inaugural committees from 
accepting donations from foreign nationals. These regulations would 
implement requirements of the Bipartisan Campaign Reform Act of 2002. 
The Commission has made no final decision on the issues presented in 
the rulemaking. Further information is provided in the supplementary 
information that follows.

DATES: Comments must be received on or before May 7, 2004. If the 
Commission receives sufficient requests to testify, it may hold a 
hearing on these proposed rules. Commenters wishing to testify at the 
hearing must so indicate in their written or electronic comments.

ADDRESSES: All comments should be addressed to John C. Vergelli, Acting 
Assistant General Counsel, and must be submitted in either electronic 
or written form. Commenters are strongly encouraged to submit comments 
electronically to ensure timely receipt and consideration. Electronic 
mail comments should be sent to [email protected] and must include 
the full name, electronic mail address, and postal service address of 
the commenter. Electronic mail comments that do not contain the full 
name, electronic mail address, and postal service address of the 
commenter will not be considered. If the electronic mail comments 
include an attachment, the attachment must be in the Adobe Acrobat 
(.pdf) or Microsoft Word (.doc) format. Faxed comments should be sent 
to (202) 219-3923, with printed copy follow-up to ensure legibility. 
Written comments and printed copies of faxed comments should be sent to 
the Federal Election Commission, 999 E Street, NW., Washington, DC 
20463. The Commission will post public comments on its web site. If the 
Commission decides that a public hearing is necessary, the hearing will 
be held in its ninth floor meeting room, 999 E. St., NW., Washington, 
DC.

FOR FURTHER INFORMATION CONTACT: John C. Vergelli, Acting Assistant 
General Counsel, or Esa L. Sferra, Attorney, 999 E Street, NW., 
Washington, DC 20463, (202) 694-1650 or (800) 424-9530.

SUPPLEMENTARY INFORMATION: Section 308 of the Bipartisan Campaign 
Reform Act of 2002 (``BCRA''), Public Law 107-155, 116 Stat. 81 (March 
27, 2002), amended 36 U.S.C. 510 and the Federal Election Campaign Act 
of 1971, as amended (``FECA'' or ``the Act''), 2 U.S.C. 431 et seq., by 
establishing new requirements for inaugural committees. These 
committees are appointed by the President-elect to be in charge of the 
Presidential inaugural ceremony and activities connected with the 
ceremony. Chapter 5 of title 36 of the United States Code provides the 
inaugural committee with special privileges in the District of Columbia 
for the five days before and the four days after the inauguration 
ceremony. Under 36 U.S.C. 511, Congress may make appropriations for the 
District of Columbia to pay for the swearing-in ceremony, however, all 
other activities, including parades, galas, and balls, are paid for by 
the inaugural committee.
    Prior to BCRA's enactment, inaugural committees had no disclosure 
responsibilities and could accept donations from foreign nationals. 
Under section 308 of BCRA, in order for a committee to be considered 
the inaugural committee, it must agree to disclose all donations it 
receives aggregating $200 or more, and it must not accept a donation 
from any foreign national.
    The Commission proposes to add new 11 CFR 104.21 to the reporting 
rules in 11 CFR part 104 to set forth inaugural committee reporting 
requirements. These proposed requirements are minimal compared to the 
Act's reporting requirements for political committees. The Commission's 
rules on foreign national contributions and expenditures are found at 
11 CFR 110.20. A new paragraph would be added to this section to ban 
the acceptance of foreign national donations by inaugural committees.

I. Proposed 11 CFR 104.21. Reporting by Inaugural Committees

    Paragraph (a)(1) of proposed 11 CFR 104.21, Definitions, would 
define ``inaugural committee.'' The definition proposed is identical to 
that in 36 U.S.C. 501(1) and in the municipal regulations of the 
District of Columbia (see D.C. Mun. Regs., tit. 24, section 899).\1\ 
The

[[Page 18302]]

proposed definition states that an ``inaugural committee'' is the 
committee appointed by the President-elect to be in charge of the 
Presidential inaugural ceremony and functions and activities connected 
with the ceremony. This proposed definition would presume that only one 
committee may be named.
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    \1\ The District Columbia has statutory authority to regulate 
many aspects of the activities of the Inaugural Committee, such as 
the inaugural parade route, public safety at inaugural events, and 
concession sales permits at inaugural events. See e.g., 36 U.S.C. 
502.
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    Paragraph (a)(2) of proposed 11 CFR 104.21 would define 
``donation.'' The proposed definition would be based on that at 11 CFR 
300.2(e), stating that a donation means a payment, gift, subscription, 
loan, advance, deposit, or anything of value given to an inaugural 
committee. This proposed definition would be similar to the definition 
of ``contribution,'' except that contributions are made for purpose of 
influencing a Federal election. See 11 CFR 100.51 through 100.56 and 
114.1(a)(1). Monies and other things of value given to an inaugural 
committee would be ``donations'' because the inaugural committee is not 
a political committee and things of value given to it are not for the 
purpose of influencing a Federal election. See also, 11 CFR 300.2(e). 
The Commission seeks comment on this definition of ``donation.''
    Proposed 11 CFR 104.21(b) would set forth the steps necessary for a 
committee appointed by the President-elect to be considered the 
inaugural committee under these regulations. BCRA section 308 expressly 
provides that a committee must ``agree to'' abide by certain 
requirements to be considered the inaugural committee. 36 U.S.C. 
510(a). The Commission interprets this statutory language to require an 
affirmative action on the part of the inaugural committee. The proposed 
rule would implement this requirement by requiring the inaugural 
committee to file a letter with the Commission within 15 days of being 
appointed. The letter would have to contain the name and address of the 
inaugural committee, the name of its chairperson or other officer who 
will serve as the point of contact for the Commission, and a statement 
indicating that the inaugural committee will comply with the disclosure 
requirements in proposed 11 CFR 104.21(c) and the ban on accepting 
foreign national donations in proposed 11 CFR 110.20(j).
    The Commission seeks comment on whether such a filing requirement 
would be necessary. Alternatively, the Commission seeks comment on 
whether a new FEC form would be preferable to a letter-filing. Finally, 
the Commission seeks comment on whether the inaugural committee should 
be free to designate a person other than the chairperson or other 
officer as the point of contact with the Commission.
    Proposed 11 CFR 104.21(c) would set forth the disclosure 
requirements for inaugural committees. Proposed paragraph (c)(1) would 
require the chairperson or other officer identified in the letter-
filing required by proposed paragraph (b) of this section to be 
responsible for signing and filing the report. Although BCRA section 
308 does not explicitly require a signature on the report, the 
Commission's reporting regulations provide generally that ``[e]ach 
individual having the responsibility to file a designation, report or 
statement * * * shall sign the original designation, report or 
statement,'' unless it is electronically filed. 11 CFR 104.14(a). The 
Commission seeks comments on this proposed requirement for a signature 
on the report required by BCRA section 308.
    The proposed rules do not address the scope of the Commission's 
authority to enforce these proposed provisions, or to audit inaugural 
committees. In this regard, the Commission notes that 36 U.S.C. 508 
provides that the ``Mayor of the District of Columbia, or other 
official having jurisdiction in the premises, shall enforce'' the 
chapter of title 36 in which BCRA section 308 is codified. The 
Commission seeks comment on whether it has authority to enforce the 
rules proposed in this rulemaking, including authority to audit 
inaugural committees, or whether its authority is limited to receiving 
and publicizing the reports called for by BCRA section 308 (36 U.S.C. 
510).
    Proposed paragraph (c)(2), When to file, would implement the 
statutory requirement that the inaugural committee must file its report 
with the Commission no later than 90 days after the date of the 
inaugural ceremony. In keeping with other reporting deadlines in 
Commission regulations, the proposed rule would require the reports be 
received by the Commission by 11:59 p.m. Eastern Standard/Daylight Time 
on the 90th day after the date of the inaugural ceremony. See 
generally, 11 CFR 100.19(b).
    Proposed paragraph (c)(3), Where to file, would state that all 
letters, statements, and reports filed by inaugural committees must be 
filed with the Federal Election Commission.
    Proposed paragraph (c)(4), How to file, would set forth the methods 
of filing an inaugural committee could use to file the 90-day report. 
The proposed rules would permit inaugural committees to file on paper 
or, alternatively, would permit, but not require, the use of the 
Commission's electronic filing system. 2 U.S.C. 434(a)(11)(i), (ii). 
The Commission has tentatively concluded that an inaugural committee 
will not be subject to the mandatory electronic filing requirements. 
The mandatory electronic filing requirement applies if a person 
receives or makes, or has reason to expect to receive or make, in 
excess of $50,000 in contributions or expenditures in a calendar year. 
11 CFR 104.18(a)(1). The funds received and spent by the inaugural 
committee will presumably be donations and disbursements of non-Federal 
funds, not contributions and expenditures of Federal funds. Thus, the 
proposed rules would not make inaugural committees subject to the 
Commission's mandatory electronic filing regulations at 11 CFR 104.18; 
such filing would be at the election of the inaugural committee. The 
Commission requests comments on whether inaugural committees should be 
required to file electronically.
    Proposed paragraph (c)(5) would require an inaugural committee to 
file the 90-day report on new FEC Form 13, which the Commission would 
create.
    Proposed paragraph (c)(6), Contents of Reports, would set forth the 
information inaugural committees would be required to disclose in their 
reports. The proposed rules at 11 CFR 104.21(c)(6)(i), (ii), and (iii), 
would track 36 U.S.C. 510(b) by requiring disclosure of the name and 
address of each person making donations aggregating equal to, or in 
excess of, $200, the amount of each such donation, and the date that 
each such donation was received. Inaugural committees would be required 
to report all donations made by a person whose total donations 
aggregate $200 or more. This is similar to Commission regulations at 11 
CFR 104.3(a)(4)(i) requiring political committees to itemize all 
contributions from a person once that person's contributions exceed 
$200 in the aggregate.
    Proposed paragraph (d) would require the inaugural committee to 
maintain records in accordance with the requirements of 11 CFR 104.14. 
The Commission requests comments on whether inaugural committees should 
be required to comply with the Commission's established recordkeeping 
regulations for political committees. See 11 CFR 104.14(b). 
Alternatively, should the Commission set forth recordkeeping rules 
specifically for inaugural committees? Should there be any 
recordkeeping requirements?

[[Page 18303]]

II. Proposed 11 CFR 110.20(j). Donations by Foreign Nationals to 
Inaugural Committees

    Current 11 CFR 110.20 prohibits contributions, donations, 
expenditures, independent expenditures, and disbursements by foreign 
nationals in connection with any election. Section 110.20 implements 2 
U.S.C. 441e, which was amended by BCRA. See generally Final Rule and 
Explanation and Justification, ``Contribution Limits and 
Prohibitions,'' 67 FR 69928, 69940 (November 19, 2002).
    In addition to these prohibitions codified at 2 U.S.C. 441e, BCRA 
also prohibits an inaugural committee from accepting a donation from a 
foreign national. 36 U.S.C. 510(c). Proposed new paragraph (j) of 11 
CFR 110.20 would implement BCRA section 308 by prohibiting foreign 
nationals from directly or indirectly donating to an inaugural 
committee. Proposed paragraph (j) would also prohibit any person from 
knowingly soliciting, accepting or receiving donations to an inaugural 
committee from a foreign national. In both of these respects, proposed 
paragraph (j) generally follows the structure of the current provisions 
of section 110.20.
    BCRA section 308 does not explicitly forbid donations by a foreign 
national to an inaugural committee. On its face, section 308 merely 
forbids acceptance of such a donation by an inaugural committee. The 
Commission seeks comment on whether the proposed rule's explicit 
prohibition on donations by a foreign national would be a permissible 
interpretation of BCRA section 308; e.g., as a necessary implication of 
the ban on acceptance.
    Although BCRA section 308 does not expressly establish a knowledge 
standard with regard to its prohibition on acceptance of foreign 
national donations, proposed paragraph (j) would prohibit only the 
knowing solicitation, acceptance, or receipt of a donation from a 
foreign national. In proposed paragraph (j), ``knowingly'' would have 
the same meaning as is set out in current paragraph (a)(4) of section 
110.20. The Commission has read a ``knowingly'' standard into its rules 
banning the acceptance of foreign national contributions and donations 
by other persons. See 11 CFR 100.20(g) and the Final Rule and 
Explanation and Justification, ``Contribution Limits and 
Prohibitions,'' 67 FR 69928, 69940 (November 19, 2002).
    ``Donation,'' as used in proposed paragraph (j) would have the same 
meaning as in 11 CFR 110.20(a)(2), which uses the definition of 
``donation'' at 11 CFR 300.2(e). ``Foreign national'' would have the 
same meaning as in 2 U.S.C. 441e(b) and 11 CFR 110.20(a)(3). Proposed 
paragraph (j) would include a reference to proposed 11 CFR 104.21(a)(1) 
for the definition of ``inaugural committee.''

Certification of No Effect Pursuant to 5 U.S.C. 605(b) (Regulatory 
Flexibility Act)

    The attached proposed rules, if promulgated, would not have a 
significant economic impact on a substantial number of small entities. 
The basis of this certification is that this proposed rule affects only 
Presidentially appointed inaugural committees, of which there will be 
only one every four years. The inaugural committee does not appear to 
be a small entity within the meaning of 5 U.S.C. 601(3)-(6). Even if 
the inaugural committee is deemed a small entity, the new reporting 
requirements would require the filing of only one letter and one 
report. There would be no ongoing reporting requirement. Therefore, any 
increase in the cost of compliance would not impose a significant 
economic burden on a substantial number of these entities.

List of Subjects

11 CFR Part 104

    Campaign funds, Political committees and parties, Reporting and 
recordkeeping requirements.

11 CFR Part 110

    Campaign funds, Political committees and parties.
    For the reasons set forth in the preamble, the Federal Election 
Commission proposes to amend subchapter A of chapter I of title 11 of 
the Code of Federal Regulations as follows:

PART 104--REPORTS BY POLITICAL COMMITTEES, PERSONS MAKING 
ELECTIONEERING COMMUNICATIONS AND INAUGURAL COMMITTEES (2 U.S.C. 
434, 36 U.S.C. 510)

    1. The title of part 104 would be revised to read as set forth 
above.
    2. The authority citation for part 104 would be revised to read as 
follows:

    Authority: 2 U.S.C. 431(1), 431(8), 431(9), 432(i), 434, 
438(a)(8), 438(b), 439a, and 36 U.S.C. 510.

    3. New Sec.  104.21 would be added to read as follows:


Sec.  104.21  Reporting by inaugural committees.

    (a) Definitions. (1) Inaugural committee. Inaugural committee means 
the committee appointed by the President-elect to be in charge of the 
Presidential inaugural ceremony and functions and activities connected 
with the inaugural ceremony.
    (2) Donation. For purposes of this section, donation means a 
payment, gift, subscription, loan, advance, deposit, or anything of 
value given to an inaugural committee.
    (b) Filing by inaugural committees. In order to be considered the 
inaugural committee under 35 U.S.C. chapter 5, within 15 days of 
appointment by the President-elect, the appointed committee must file a 
letter with the Commission containing the following:
    (1) The name and address of the inaugural committee;
    (2) The name of the chairperson, or the name and title of another 
officer who will serve as the point of contact; and
    (3) A statement agreeing to comply with paragraph (c) of this 
section and 11 CFR 110.20(j).
    (c) Reporting requirements of inaugural committees. (1) Who must 
report. The chairperson or other officer identified in the filing 
required by paragraph (b) of this section shall sign and file a report 
in accordance with this paragraph (c) of this section.
    (2) When to file. The inaugural committee must file a report with 
the Commission not later than the 90th day following the date on which 
the Presidential inaugural ceremony is held. This report must be timely 
filed in accordance with 11 CFR 100.19.
    (3) Where to file. All letters, statements, and reports required 
under this section, as well as any amendment(s) thereto, shall be filed 
with the Federal Election Commission, 999 E Street, NW., Washington, DC 
20463.
    (4) How to file. An inaugural committee must file its letters, 
statements, and reports in original form, however, an inaugural 
committee may choose to file its reports in an electronic format that 
meets the requirements of 11 CFR 104.18.
    (5) Form. An inaugural committee must file the report required by 
this paragraph on FEC Form 13.
    (6) Contents of reports. Each report filed with the Commission 
under this section must contain:

    (i) The name and address of the person making each donation of 
money or of anything of value aggregating $200 or more;
    (ii) The amount of each such donation; and
    (iii) The date each such donation is received by the inaugural 
committee.


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    (d) Recordkeeping. All inaugural committees that file statements 
and reports under this section must maintain records in accordance with 
11 CFR 104.14.

PART 110--CONTRIBUTION AND EXPENDITURE LIMITATIONS AND PROHIBITIONS

    4. The authority citation for part 110 would be revised to read as 
follows:

    Authority: 2 U.S.C. 431(8), 431(9), 432(c)(2), 437d, 438(a)(8), 
441a, 441b, 441d, 441e, 441f, 441g, 441h, and 441k, and 36 U.S.C. 
510.

    5. The title to Sec.  110.20 would be revised and paragraph (j) 
would be added to read as follows:


Sec.  110.20  Prohibition on contributions, donations, expenditures, 
independent expenditures, and disbursements by foreign nationals (2 
U.S.C. 441e, 36 U.S.C. 510).

* * * * *
    (j) Donations by foreign nationals to inaugural committees. A 
foreign national shall not, directly or indirectly, make a donation to 
an inaugural committee, as defined in 11 CFR 104.21(a)(1). No person 
shall knowingly solicit, accept or receive from a foreign national any 
donation to an inaugural committee.

    Dated: April 1, 2004.
Bradley A. Smith,
Chairman, Federal Election Commission.
[FR Doc. 04-7855 Filed 4-6-04; 8:45 am]
BILLING CODE 6715-01-P