As part of its mission to administer and enforce the Federal Election Campaign Act, the Commission promulgates regulations and issues advisory opinions to promote voluntary compliance with the law. The regulations explain the law in detail, often incorporating conclusions reached in previous advisory opinions. Advisory opinions, in turn, clarify how the statute and regulations apply to real-life situations. In 1996, for example, several advisory opinions dealt with questions concerning the new rules on the personal use of campaign funds.
The agency's enforcement actions also promote compliance by correcting past violations and demonstrating to the regulated community that violations can result in civil penalties and remedial action.
The rulemaking process generally begins when the Commission votes to seek public comment on proposed rules by publishing the rules in the Federal Register. The agency may also invite those making written comments to testify at a public hearing. The Commission considers all comments when deliberating on the final rules in open meetings. Once approved, the text of the final regulations and the explanation and justification are published in the Federal Register and sent to the U.S. House and Senate. The Commission publishes a notice of effective date after the final rules have been before Congress for 30 legislative days.
Rulemakings Completed in 1996
New and revised rules in the following areas became effective in 1996:
Other Rulemakings in Process
In addition to completing the above rules, the Commission also:
The Commission responds to questions about how the law applies to specific situations by issuing advisory opinions. When the Commission receives a valid request for an advisory opinion, it generally has 60 days to respond. The Office of General Counsel prepares a draft opinion, which the Commissioners discuss and vote upon during an open meeting. A draft opinion must receive at least four favorable votes to be approved.
The Commission issued 51 advisory opinions in 1996. Of that number, 5 dealt with the status of party committees, 13 dealt with application of personal use rules and 3 dealt with the Act's news story exemption. These and other 1996 advisory opinions are discussed in Chapter Four, "Legal Issues."
The Enforcement Process
The Commission learns of possible violations in three ways. The first is
the agency's monitoring process--potential violations are discovered through
a review of a committee's reports or through a Commission audit. The second
is the complaint process--anyone may file a complaint, which alleges violations and explains
the basis for the allegations. The third is the referral process--possible
violations discovered by other agencies are referred to the Commission.
Each of these can lead to the opening of a Matter Under Review (MUR). Internally generated cases include those discovered through audits and reviews of reports and those referred to the Commission by other government agencies. Externally generated cases spurred by a formal, written complaint receive a MUR number once the Office of General Counsel determines whether the document satisfies specific criteria for a proper complaint.
The General Counsel recommends whether there is "reason to believe" the respondents have committed a violation. If the Commission finds there is "reason to believe," it sends letters of notification to the respondents and investigates the matter. The Commission has authority to subpoena information and can ask a federal court to enforce a subpoena. At the end of an investigation, the General Counsel prepares a brief which states the issues involved and recommends whether the Commission should find "probable cause to believe" a violation has occurred. Respondents may file briefs supporting their positions.
If the Commission finds "probable cause to believe" the respondents violated the law, the agency attempts to resolve the matter by entering into a conciliation agreement with them. (Some MURs, however, are conciliated before the "probable cause" stage.) If conciliation attempts fail, the agency may file suit in district court. A MUR remains confidential until the Commission closes the case and releases the information to the public.
Prioritization
To ensure that its limited resources are devoted to the most significant
enforcement matters, the Commission has instituted a "prioritization
system" to help manage its caseload.
Now in its third year of operation, the prioritization system has helped the Commission manage its heavy caseload involving thousands of respondents and complex financial transactions. The Commission believed it would never have enough resources to pursue all enforcement matters, so it adopted formal criteria to decide which cases to pursue. Among those criteria are: the presence of knowing and willful intent, the apparent impact the alleged violation had on the electoral process, the amount of money involved, the age and timing of the violation, and whether a particular legal area needs special attention.
In 1996, the FEC pursued cases in several enforcement areas, including: contributions by minors, contributions in the name of another, foreign contributions and reporting violations.
Civil Penalties
The Commission continued to impose significant civil penalties for serious
violations of the law. In 1996, penalties from conciliation agreements totaled
$1,229,754.
Chart 3-1 compares civil penalties negotiated in 1996 conciliation agreements with those of previous years. In Chart 3-2, the median civil penalty negotiated in 1996 is compared with the median civil penalty of previous years. Chart 3-3 tracks the number of complaints filed during the months preceding the last several federal elections.