453 makes it clear that the do's and don'ts set forth in the FECA are to be the only rules with which a federal candidate must contend. Accordingly, for all practical purposes campaign financing matters involving candidates for federal office are exclusively matters of federal jurisdiction and concern.

Background

D. REPORTING AND CAMPAIGN
ORGANIZATION STATUTES

The first attempt at requiring federal candidates to disclose the identities of their campaign contributors was contained in the 1925 Corrupt Practices Act, 2 U.S.C. 241 et seq. While salutary in its purpose, it was so imprecise and riddled with exceptions that it could be safely honored more in the breach than in the observance.

In the interest of obtaining full financial disclosure from all contenders for federal office, the Congress in 1972 replaced the Corrupt Practices Act with the Federal Election Campaign Act (Public Law 92-225). In its original version, the FECA was largely an attempt to enact an enforceable sunshine law for federal campaigns. However, until the creation of the Federal Election Commission in 1974, the primary enforcement remedy for violations of these disclosure laws was criminal prosecution. This in turn created situation where most technical violations went unattended for lack of prosecutive merit. Nevertheless, several "Watergate" cases were predicated on the original FECA; and through the testing of the law that ensued, it was found to be sound. See e.g. United States v. Finance Committee to Re-Elect the President, 507 F.2d 1194 (D.C. cir. 1974); United States v. National Committee for Impeachment, 469 F.2d 1135 (2d cir. 1972).

The 1974 FECA (Public Law 93-443) created the Federal Election Commission and gave it broad noncriminal enforcement powers to address, rectify, and where necessary administratively punish nonfeasant violations of this malum prohibitum regulatory law. These powers were further refined and expanded in the 1976 FECA (Public Law 94-283) and in the 1979 FECA (Public Law 96-187).

Today, the role of the Justice Department in the enforcement of the reporting and organizational requirements contained in the FECA is confined to prosecution of aggravated violations involving conscious evasion of the law. See generally AFL-CIO v. FEC, 628 F.2d 97, 100-101 (D.C. Cir. 1980). Primary responsibility for seeing that these statutory requirements are obeyed rests with the Federal Election Commission, which is now equipped with appropriate remedies to deal with this type of violation. 2 U.S.C. 437g(a).

Set forth below is a brief description of the reporting and campaign organizational requirements that are contained in the FECA.

2 U.S.C. 431. Definitions

This is the definitional section, applicable to the entire FECA, including the campaign financing statutes discussed in the previous section of this booklet. Summarized here are several of the more important terms.

"Election" means any election, convention, or caucus held to nominate or elect a federal candidate for the House, Senate or Presidency. Section 431(1). A "candidate" is an individual who seeks federal office. An individual is deemed to seek federal office if he or she has either received contributions aggregating over $5,000, has made expenditures aggregating over $5,000, or has authorized another person to do so on his or her behalf. Section 431(2).

"Federal office" means the office of President or Vice President, Senator or Representative in Congress, or Delegate or Resident Commissioner to Congress. Section 431(3).

"Political committee" means any club, association, or group of persons which has received, or which anticipates receiving, contributions exceeding $1,000; or which has made, or which anticipates making expenditures over $1,000 within a calendar year. It also includes "separate segregated funds" established by corporations and unions regardless of the amounts they receive or spend for political purposes. Section 431(4).

"Contribution" and “expenditure" are critical definitions. Virtually all of the FECA's requirements are phrased in terms of making or receiving "contributions" or "expenditures." They include the receipt or disbursement of virtually anything of value "for the purpose of influencing any election for federal office." Section 431(8) and Section 431(9).7 These terms are subject to a number of important exceptions, such as volunteer services provided to candidates and committees, unreimbursed travel expenses incurred by volunteers, in-kind donations of homes and refreshments for fundraising purposes, news stories and editorials, legal and accounting services, nonpartisan activity to encourage registration and voting, partisan activity by state and local party committees for voter registration and get-out-the-vote drives, and communications by organizations to their members on any subject.

2 U.S.C 432. Organization of political committees

All "political committees" are required to have a treasurer, who must approve all expenditures made by the committee. Section 432(a). Persons who receive contributions on behalf of a political committee must forward them to the committee's treasurer within 10 days. If the contribution is over $50, they must also supply the treasurer with the name and address of the donor. Section 432(b). The treasurer is required to maintain records of all contributions to and expenditures by the committee, including the name and address of anyone making a contribution over $50. Sections 432(c) and (d).

"For a discussion of the difference between a “contribution” and an “expenditure,” see pp. 34, supra.

Candidates are required to designate a principal campaign committee within 15 days of attaining candidate status. They may also designate subordinate "authorized committees." Section 432(e)(1). Subordinate committees must file required information with the candidate's principal campaign committee, which is, in turn, responsible for consolidating the information thus received and reporting it to the FEC. Section 432(f). An independent committee, i.e. one not "authorized" by any candidate, is prohibited from using the name of any candidate in its name; an authorized committee's name must include the name of the authorizing candidate; and a political committee not affiliated with a candidate must identify in its title the connected corporation, union, or other entity which established it. Sections 432(e)(4) and (5).

All political committees subject to the FECA must designate a state bank or federally chartered or insured banking institution as their campaign depository. They must deposit all contributions into this depository, and make all expenditures by check drawn on this depository. Petty cash disbursements up to $100 are permitted to be made in currency. Section 432(h).

2 U.S.C. 433. Registration of political committees

A political committee must file a statement of organization within 10 days of becoming a political committee, or within 10 days of being designated as a candidate's "authorized committee." Subordinate committees must register with the principal campaign committee of the candidate involved, which in turn must include the pertinent data on the registration statement it files with the FEC. The registration statement must list information as to the committee's officers, connected organizations, banks used, and the candidate authorizing the committee, if any. Sections 433(a) and (b).

A political committee which has no outstanding debts may terminate its reporting obligations by filing a statement that it will no longer receive contributions or make expenditures. Section 433(d).

2 U.S.C. 434. Reporting requirements

Section 434(a) contains deadlines for the filing of pre-election, post-election, quarterly, and monthly reports. Section 434(b) sets forth the actual items that must be reported. These include total cash on hand at the beginning of the reporting period, total contributions received and expenditures made during the reporting period and the calendar year, detailed information with respect to contributions and expenditures aggregating over $200 per year, and all outstanding debts owed by or to the political committee.

Persons or committees making "independent expenditures" aggregating over $250 per year (e.g. persons or committees who personally pay for things like advertisements in newspapers without consultation or coordination with a candidate's campaign organization) must individually submit reports to the FEC. Section 434(c).

2 U.S.C. 437. Reports on convention financing

Section 437 requires that committees or organizations representing a State, political subdivisions of a State, or national political parties, report all sources of their funding, and the purpose for which such funds were spent, in connection with the location and conducting of national nominating conventions.

2 U.S.C. 437c. Federal Election Commission

This section establishes the Federal Election Commission, which is composed of six voting members appointed by the President, no more than three of whom may be affiliated with the same political party. There are also two nonvoting members of the FEC: the Clerk of the House of Representatives and the Secretary of the Senate. This section also provides that the FEC shall have exclusive jurisdiction over civil enforcement of the FECA and the public financing provisions of the Internal Revenue Code. Four of the six Commissioners must approve enforcement and interpretative actions.

2 U.S.C. 437d. Powers of the Commission

Secton 437d sets forth the FEC's authority to require written answers and testimony under oath; issue subpoenas for witnesses and documents; initiate, defend and appeal civil actions to enforce the FECA; render advisory opinions; develop forms and rules; conduct investigations; and report apparent violations to the appropriate law enforcement authorities.

2 U.S.C. 437f. Advisory opinions

Section 437f contains the procedures under which the Commission issues advisory opinions concerning the FECA and the Commission's regulations. Any person may request an opinion, the FEC must respond within 60 days (or within 20 days if the request is made on behalf of a candidate within the 60-day period before an election), and the opinion must relate to a rule of law contained in the FECA or the Commission's regulations. Requests for advisory opinions are made public. Written comments may be submitted by interested parties. Both requestors and other persons in similar situations may rely on these opinions, which as such have the same practical effect as regulations.

2 U.S.C. 437h. Judicial review

This section establishes procedures for expedited judicial review of issues involving the constitutionality of substantive provisions contained in the FECA. It does not confer standing on those wishing to raise constitutional challenges. Rather, it merely provides a procedure for expedited review of such issues in certain situations. This expedited review provision has been a source of substantial judicial confusion and litigation. See e.g. BREADPAC v. FEC, 455 U.S.

577 (1982); California Medical Association v. FEC, 641 F.2d 619 (9th Cir. 1981), aff'd 453 U.S. 182 (1981); Athens Lumber Co. v. FEC, 531 F.Supp. 756 (M.D. Ga. 1981); rev., 689 F.2d 1006 (11th Cir. 1982);, rev. en banc, 718 F.2d 367 (11th Cir. 1983).

2 U.S.C. 438. Administrative provisions

The administrative duties of the FEC are set forth here. They include the duty to prepare forms, publish and make available reports, develop cross-indexing systems, prescribe rules and regulations, publish lists of filers and non-filers, and conduct audits and field investigations.

2 U.S.C. 439. Statements filed with State officers

This section requires that copies of all filings made pursuant to the FECA in Washington, D.C. be filed with the Secretary of State of the jurisdiction from which the candidate (or in the case of political committees the candidate(s) supported) is standing for nomination or election. The Secretaries of State, in turn, are required to make this information available to the public locally.

Enforcement

Under the present FECA, as amended in 1976 and 1979, violations of the recordkeeping, reporting, and campaign organizational provisions of the Federal Election Campaign Act are enforced through the same mechanisms as the campaign financing portions of the Act.

Nonfeasant and inadvertent violations of these disclosure and organizational requirements are subject to several overlapping layers of administrative and civil sanctions, including the administrative equivalent of mandatory injunctions and noncriminal fines. 2 U.S.C. 437g(a)-437g(c). The enforcement of these noncriminal remedies is the exclusive responsibility of the Federal Election Commission. 2 U.S.C. 437c(b)(1), 437d(e), 437d(a)(6), and 437d(a)(9).

Intentional and factually aggravated violations of the reporting and recordkeeping provisions of the FECA are subject to criminal prosecution under 2 U.S.C. 437g(d). Violations of this criminal penalty section are misdemeanors, subject to fines equal to the greater of $25,000 or 300% of the amount involved in the violation, and/or a year imprisonment. Criminal prosecutions under this penal sanction are the responsibility of the Department of Justice, and may be initiated without prior consultation with the Commission just as would be the case with other federal crimes. United States v. International Union of Operating Engineers, 638 F.2d 1161 (9th Cir. 1979); United States v. Tonry, 433 F.Supp. 630 (E.D. La. 1977); United States v. Jackson, 433 F.Supp. 239 (W.D. N.Y. 1977), aff'd, 586 F.2d 732 (2d Cir. 1978).

The Justice Department and the Commission have a Memorandum of Understanding concerning the handling and disposition of FECA matters arising within the broad area of concurrent jurisdiction we share under this unique