FEDERAL ELECTION COMMISSION

SURVEY FOR

ELECTRONIC FILING

FINAL REPORT

Submitted to the

FEDERAL ELECTION COMMISSION

by

Carlyn & Company

December 1997

CONTENTS

_________________________________________________________________________

INTRODUCTION 1

BACKGROUND 2

SURVEY METHODOLOGY 4

Sampling Frame 4

Sampling Procedure 5

Survey Instrument 6

First Mailing 7

Second Mailing 7

Response Rates 8

Comparison of Respondents and Nonrespondents 8

Weighting 9

FINDINGS 10

Question 1: Basic Committee Information 10

Question 2: Number of Computers 11

Question 3: Type of Computer System 11

Question 4: Access to a Modem 12

Question 5: Access to the Internet 12

Question 6: Own Web Site 13

Question 7: Maintenance of Financial Information 13

Question 8: Method of Preparing FEC Reports 13

Question 9: FEC Software 14

Question 10: Benefits of Electronic Filing 16

Question 11: Obstacles to Electronic Filing 18

Question 12: Likelihood of Filing Electronically in 1998 20

Additional Recommendations from Respondents 21

CONCLUSIONS 22

INTRODUCTION

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A primary mission of the Federal Election Commission (FEC) is to facilitate prompt public disclosure of the campaign finance activity reported by candidates and political committees involved in federal elections. In support of this mission, Congress passed Public Law 104-79 in 1995, which required the FEC to develop and implement a system permitting the electronic filing of financial disclosure reports by candidate campaign and other political committees. The purpose of introducing a voluntary electronic filing system was to expedite the FEC reporting process, increase the accuracy of the information disclosed, and improve the efficiency of the reporting process for filing committees and the FEC.

After promulgating regulations and developing procedures to permit the electronic filing of FEC reports, there was a clear need to gather additional information from the various committees required to file disclosure reports. The FEC decided to conduct a formal survey to answer two basic questions:

Survey results would be used to ensure that the new electronic filing system would be as compatible as possible with the needs and capabilities of the filing community. The Commission recognized that the committees required to file FEC reports are major stakeholders and that their input is critical to the ultimate success of the FEC's electronic filing system.

In June 1997, the FEC engaged the services of an independent consulting firm, Carlyn & Company, to design and implement the FEC Survey for Electronic Filing. This report is a summary of the survey methodology and findings.

BACKGROUND

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The Federal Election Commission (FEC) was established by Congress in 1975 for the purpose of administering and enforcing the Federal Election Campaign Act (FECA), the statute that governs the financing of federal elections. Congress created the FEC as an independent regulatory agency with authority to: (1) disclose campaign finance information; (2) enforce the contribution limits set by Congress; and (3) administer the public funding of Presidential elections. The FEC is composed of six Commissioners, with no more than three permitted to be members of the same political party.

Regulations require that candidate campaign and other political committees keep accurate records of all their financial transactions and submit disclosure reports to the FEC on a regular basis. The following types of committees are required to regularly file FEC reports:

During 1995-96, more than 8,000 committees filed financial reports with the FEC on a monthly, quarterly, or semi-annual basis. All of these reports were mailed or personally delivered to the FEC in hard-copy format. The reports of the larger committees were frequently several hundred pages in length.

Congress passed Public Law 104-79 in December 1995. The new law instructed the FEC to develop and implement a voluntary electronic filing system that would allow the committees to file their FEC reports electronically rather than on paper. An electronic filing system was especially needed to address the rapidly rising volume of paper reports being received and processed by the FEC. As an example of the substantial administrative burden experienced by FEC staff, over 1.8 million detailed entries were made to the agency's disclosure database during the 1995-96 election cycle, requiring 30 to 40 days to complete the data coding and entry process. A successful electronic filing system would reduce the amount of data subject to manual processing, eliminate the possibility of data entry errors, and significantly reduce the time required to make data available to the public.

To accomplish the goals of the proposed electronic filing system, the FEC's Data Systems Development Division completed the following tasks in 1996:

During 1997, FEC staff have focused their efforts on implementing these improvements and helping committees that are computerized file their FEC reports electronically via computer disk. The FEC is also developing a simple software package to help committees keep computerized records of their receipts and disbursements and submit them electronically. In addition, the Commission is developing systems that will permit committees to transmit their reports to the FEC electronically via modem or via the Internet in 1998.

In order to help ensure that the new electronic filing system is compatible with the needs of the filing community, the Commission decided to conduct a user survey regarding the electronic filing initiative. The survey was designed to obtain the following information:

This information will be used to improve the system, identify potential barriers to electronic filing, accommodate wherever possible the needs of the regulated community, and encourage the rapid implementation of the new electronic filing system.

SURVEY METHODOLOGY

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Given the large number and variety of committees that are required to submit disclosure reports to the FEC, the FEC Survey for Electronic Filing was designed as a mail survey incorporating stratified random sampling. The sampling strategy and data collection methodology were chosen in order to ensure the validity of the findings, and ultimately, to provide key information to the FEC for use in future decisionmaking regarding the electronic filing of FEC reports.

Sampling Frame. The target population for the survey was the universe of political committees that are required to regularly file FEC reports - specifically, all political action committees, political party committees, and campaign committees of incumbent and nonincumbent candidates running for the Senate and House of Representatives. To define the target population in a concrete way, a sampling frame was used for the survey. It consisted of a list of 4,730 committees that were registered with the FEC as of July 1997, with the following breakdown:

Committees known to have terminated operations prior to July 1997 were not included in the sampling frame. Also, Presidential campaign committees and other (miscellaneous) committees were not included because they are largely inactive at the start of an off-year Congressional election cycle.

For each committee, the following basic information maintained in FEC databases was used for the survey:

Sampling Procedure. Given the large number, geographical dispersion, and variety of committees filing FEC reports, it was decided that the most cost-effective approach would be to conduct a mail survey using stratified random sampling. The sampling frame was divided into the following eight strata (mutually exclusive subsets or groups):

  • 1. Small PACs.
  • 2. Small party committees.
  • 3. Large PACs.
  • 4. Large party committees.
  • 5. Campaign committees of current Senate members (incumbents).
  • 6. Campaign committees of current House members (incumbents).
  • 7. Campaign committees of new Senate candidates (nonincumbents).
  • 8. Campaign committees of new House candidates (nonincumbents).
  • For survey purposes, small committees were defined as those having financial disbursements totaling less than $100,000 and large committees were defined as those with disbursements totaling $100,000 or more during the 1995-96 election cycle. These strata were chosen in order to guarantee adequate representation of each of the major types of committees, to ensure that the committees with the largest amount of financial resources were adequately represented, and to reduce sampling error.

    To select committees to be surveyed, a simple random sample was drawn from each of the first four strata using a random number generator algorithm. This procedure ensured that each of the committees within a given stratum had an equal chance of being selected. Because of the importance of obtaining the views of current members of Congress and because of the relatively small number of committees for new Congressional candidates, it was decided that survey questionnaires would be mailed to all of the campaign committees of both current members of the Senate and House of Representatives as well as new candidates, and that all of their returned questionnaires would be included in the analysis.

    The total sample consisted of 1,093 committees, and the number of committees sampled within each stratum is shown in the following table:


                                                                              
            SURVEY SAMPLE SIZES                                               
                                                                              
    
                                         Total Number of                      
                                           Committees          Number of      
                                           (Population    Committees Sampled  
                                              Size)                           
    
                                                                                
    Small Committees (<$100K)                                                   
    
         PACs                                  2,888                 124        
    
         Party Committees                        233                  92        
    
    Large Committees (>$100K)                                                   
    
         PACs                                    766                 115        
    
         Party Committees                        162                  81        
    
    Incumbent Campaign Committees                                               
    
         Current Senate Members                   97                  97        
    
         Current House Members                   439                 439        
    
    Nonincumbent Campaign Committees                                            
    
         New Senate Candidates                    36                  36        
    
         New House Candidates                    109                 109        
    
                                                                                
         TOTAL                                 4,730               1,093        
    
    
    

    All of the sample sizes were generated using "finite-population correction" and were based on a 95% confidence interval, with the goal of obtaining a precision rate (margin of error) for each stratum of +10% or better (lower) and an overall precision rate of +6% or better.

    Survey Instrument. A draft survey instrument was developed in the form of a self-administered written questionnaire to be completed by the person in each organization who is most responsible for keeping committee records and preparing FEC reports (generally the committee's treasurer). A small pilot study was conducted which indicated that respondents were quite willing to complete the questionnaire and they had little difficulty understanding the questions. The pilot also found that the respondents were able to complete the questionnaire in less than 10 minutes, a time requirement that was considered reasonable. Several questions were reworded based on pilot results and recommendations of FEC staff.

    The final questionnaire (presented in Exhibit 1) was relatively concise and could be printed on the front and back of one 8½ x 11 sheet. The survey instrument contained a brief introduction, 12 questions (mostly closed-ended), an open-ended request for additional recommendations, and instructions on how to return the completed questionnaire by mail or fax. The first eight questions pertained to the committee's computer capabilities and the last four questions concerned the respondent's attitude toward electronic filing.

    First Mailing. An accompanying cover letter (presented in Exhibit 2) described the purpose of the survey, assured participants that their responses would be kept confidential, and encouraged them to complete the questionnaire. The cover letter was signed by the Chairman of the Federal Election Commission, and a pre-addressed stamped return envelope was enclosed. For each of the 1,093 committees selected for the survey, an ID label was attached to the committee's questionnaire and a corresponding mailing label was attached to a 9 x 12 mailing envelope, addressed to the committee treasurer. The survey questionnaires were mailed on August 5, 1997 with address correction requested.

    Upon return, each questionnaire was date-stamped and logged into a receipt control system. Completed questionnaires were then reviewed for legibility and responses were entered into a database management system, using computerized edit checks and other verification procedures to ensure quality control. A total of 451 completed survey questionnaires (41%) were returned during the first month.

    In addition to the completed questionnaires, 25 noncompleted questionnaires were returned with a forwarding address correction provided by the U.S. Postal Service. After being logged into the system with the revised address, they were re-mailed to the new address. An additional 17 questionnaires were returned (to sender) with no forwarding address. In these cases, an attempt was made to obtain a different address from FEC staff. In 12 cases, another address was identified and the questionnaires were re-mailed.

    Second Mailing. A second mailing was conducted on September 5, 1997, for the purpose of encouraging the remaining committees to participate in the FEC Survey for Electronic Filing. The accompanying cover letter (presented in Exhibit 3) was signed by the FEC Staff Director. An additional 208 completed survey questionnaires (19%) were returned during the second month. During the third month, questionnaires continued to arrive, although at a lower rate. An attempt was made to call the treasurers of non-responding committees to encourage them to complete the questionnaires and approximately 50 phone calls were made. This strategy proved to be relatively ineffective, primarily because the FEC does not currently maintain committee phone numbers and few of the committees are listed in telephone directories.

    Response Rates. At the conclusion of the data collection period, a total of 736 completed questionnaires had been returned, representing an overall response rate of 69%. The response rates for the different types of committees (strata) ranged from 61% to 83% (shown in Exhibit 4). Of the 736 respondents, 80 (11%) chose to return their questionnaires via fax, and the remainder (89%) used the stamped envelope provided. A total of 21 noncompleted questionnaires were returned, representing only 2% of the committees sampled. Of these noncompleted questionnaires, 13 were returned with no forwarding address and 8 were not completed because the committees had recently terminated operations.

    The response rates achieved for the FEC Survey on Electronic Filing are exceptionally high for a mail survey and underscore the respondents' interest in communicating their views to the FEC. The high response rates yielded a precision rate for each stratum of +10% or better (lower) and an overall precision rate of +6% or better. In other words, the FEC can be confident that the survey results for a particular stratum are representative of all of the committees of that type, within 10 percentage points. For example, the survey found that 18% of the sampled small PACs are not computerized at the present time. Applying the +10% precision rate, the FEC can be 95% confident that between 8% and 28% of all of the small PACs in the country are not computerized. Similarly, the FEC can be confident that the overall survey results (presented as weighted averages) are representative of all of the committees required to file FEC reports, within 6 percentage points. For example, the survey found that 15% of all of the sampled committees are not computerized at the present time. Applying the +6% precision rate, the FEC can be 95% confident that between 9% and 21% of all the committees filing FEC reports are not computerized. These precision rates should be taken into account in interpreting all of the survey results presented in this report.

    Comparison of Respondents and Nonrespondents. Comparisons of respondents and nonrespondents were made to assess the external validity of the survey results - the extent to which the findings can be generalized to the target population. Specifically, comparisons were made to determine if the respondents were significantly different from the nonrespondents in each of the first four strata (those in which random sampling had been used). Within each PAC and party committee group, the respondents and nonrespondents were compared with respect to their financial disbursements during the 1995-96 election cycle, using the Wilcoxon summed rank test. No significant differences were found between the respondents and nonrespondents in three of the four groups. However, the test revealed that the small party committees that responded to the survey had significantly higher median 1995-96 disbursements ($11,067) compared to those that did not respond ($4,898), with only a 5% probability that these differences could have occurred by chance (p=.05). It is not surprising that the higher-funded small party committees were more likely to complete the survey questionnaire than those with less funding, particularly since the smallest of these committees frequently have shoestring budgets and short life-spans. Given this result, caution should be taken when interpreting the survey findings for the small party committees because there is a potential for nonresponse bias; the respondents may not be representative of the entire population of small party committees. Caution should also be taken when interpreting the findings for the nonincumbent campaign committees. The committees that decided to register with the FEC by July 1997, 16 months prior to the next election, may not be representative of all of the nonincumbent campaign committees that register with the FEC by November 1998.

    Weighting. In presenting the survey findings, weighted averages were used to estimate the responses of all FEC filers, including those who did not respond to the survey. Specifically, the achieved sample of 736 responding committees was weighted to reflect their actual distribution in the target population. For example, because 61.1% of all FEC filers are small PACs, their responses were given a correspondingly high weight in estimating the responses of all FEC filers (shown in the exhibits as total weighted averages). Similarly, group weighted averages were used to estimate the responses of all committees of a certain type (e.g., the group of incumbent campaign committees). The responses of the two types of committees comprising each group were weighted to reflect their actual distribution within the group. For example, because 81.9% of all incumbent campaign committees represent House members and only 18.1% represent Senate members, the House committee responses were given a weight of .819 and the Senate committee responses were given a weight of .181 in estimating the responses of all incumbent campaign committees. When estimating responses for a subpopulation (such as all computerized FEC filers), a similar approach was employed, using weights that reflected the estimated distribution of the different types of committees within the target subpopulation.

    FINDINGS

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    Question 1: Basic Committee Information. To obtain basic information about each committee, respondents were asked to list their committee's phone number, fax number, and electronic mail (e-mail) address, if available. Nearly all of the respondents (95%) listed a phone number, with little variation in this percentage among the different types of committees. The percentage was slightly higher (97%) for committees that are computerized. As shown in Exhibit 5, the survey also found that 86% of FEC filers have a fax number (90% of those that are computerized). There was considerable variation among the committees regarding fax capability. For example, only 43% of the small party committees listed a fax number, whereas 96% of the large party committees listed one.

    Because e-mail is one option that is being considered with respect to the electronic filing of FEC reports, an important issues is the percentage of committees having e-mail capability. The findings (shown in Exhibit 5) revealed that approximately one-third (31%) of the committees required to file FEC reports currently have an e-mail address. The percentage was higher (37%) for computerized committees. The survey also found that there is substantial variation among the different types of committees in e-mail capability. Specifically, only 19% of the small party committees use e-mail, compared to 58% of the large party committees. However, the percentage was higher (34%) for small party committees that are computerized, compared to 59% of large party committees that are computerized. A surprising finding was that only 21% of the incumbent campaign committees listed an e-mail address (22% of those that are computerized), a percentage which was nearly identical for both Senate and House committees. The committees of nonincumbent Senate and House candidates, on the other hand, were more likely to be e-mail users - 32% of all nonincumbent campaign committees (40% of those that are computerized). It should be noted that these percentages underestimate the capability for e-mail among computerized committees. Specifically, the survey found that e-mail addresses were listed by only 60% of FEC filers that reported having access to the Internet (Question 5). The remaining 40% either chose not to list an e-mail address or their committee has not established an e-mail account. In either case, their computer system has the capability for e-mail.

    Because many FEC reports are frequently filed with inaccurate ID numbers, all respondents were asked to list their committee's FEC ID number. The findings (shown in Exhibit 5) revealed that 70% of the respondents correctly identified their FEC ID number. Of the entire group, 12% reported an incorrect ID number and 18% did not answer this item. The small PACs had the highest percentage of erroneous FEC ID numbers (15%), while the campaign committees for incumbent Senate members had the lowest error rate (only 2%). Surprisingly, the campaign committees for incumbent House members had a much higher error rate (14%) than their Senate counterparts. Also, the small PACs/party committees had a much higher error rate (14%) than the large PACs/party committees (4%). All of the percentages were nearly the same for computerized filers.

    Question 2: Number of Computers. Because the electronic filing of financial disclosure reports requires committees to have a computer, a fundamental question is the extent to which they are currently computerized. Respondents were asked, "How many personal computers does your committee currently have?" The survey results (presented in Exhibit 6) revealed that 15% of the committees required to file FEC reports have no computer at the present time, 37% have one computer, and 48% have two or more computers. Clear differences were found in the computer capabilities of the various types of committees. Specifically, nearly half (45%) of the small party committees are not computerized compared to only 1% of the large party committees. Overall, the incumbent campaign committees and the large PACs/party committees are most likely to be computerized, with over 95% of them having at least one computer.

    Committees that reported having two or more computers were asked if their computers were connected through a network, a factor to be taken into consideration when developing an electronic filing software. The question was also designed to further assess their level of computerization. The survey results revealed that 37% of all FEC filers use a networked computer system; of those having two or more computers, 75% use a networked system. A further examination of committees having two or more computers revealed major differences among the different types of committees, with a much higher percentage of the PACs and party committees connecting their computers through a network, compared to the campaign committees. Another finding was that both the incumbent and nonincumbent Senate campaign committees are more likely than House committees to be networked.

    >Question 3: Type of Computer System. Because an electronic filing system should be as compatible as possible with the computer systems currently used by the committees, respondents who use a computer were asked, "What type of computer system do you use?" The survey results (presented in Exhibit 7) showed that 88% are currently using an IBM-compatible Windows system, 7% are using a DOS-based system alone (not in combination with other systems), and 2% are using a MAC system alone. Only three respondents (less than 1%) reported that they used another system (UNIX in all three cases). Several respondents reported using a mixed platform but this approach was not common; the survey found that only 2% of computerized FEC filers use both Windows and DOS, and only 2% use both Windows and MAC.

    The high percentage of Windows users was consistent across all types of committees. Results also showed that approximately half (51%) of all FEC filers who use a computer are currently using Windows 95 or Windows NT. An interesting finding was that nearly two-thirds (64%) of the nonincumbent campaign committees, which are presumably the most recently established committees, use Windows 95 or Windows NT. A few respondents representing other types of committees mentioned that they were planning to replace their DOS or Windows 3.1 system with Windows 95 in the near future. The lowest usage of Windows 95/NT (38%) was reported by the small party committees.

    Question 4: Access to a Modem. Because the FEC is considering the electronic transmission of FEC reports via modem, respondents who use a computer were asked, "Does the computer that you use for FEC reporting have access to a modem?" The survey results (presented in Exhibit 8) revealed that approximately three-fourths (72%) of computerized FEC filers have access to a modem, with little variation among the different types of committees. However, only 42% of computerized filers reported that their modem has a separate phone line, a configuration that simplifies electronic transmission via modem. For example, if there are any problems in transmission or questions at the receiving end, a separate phone line permits the transmitting party to be contacted by telephone during the transmission, with full view of the computer screen. Transmission problems are much more difficult to diagnose without a dedicated modem phone line. As expected, the small party committees are the least likely and the large party committees are the most likely to have separate modem lines. As a group, approximately half (51%) of the computerized large PACs/party committees currently have separate lines.

    Question 5: Access to the Internet. Because the transmission of FEC reports via the Internet is another option that is being considered with respect to electronic filing, respondents who use a computer were asked, "Do you have Internet access?" Survey results (presented in Exhibit 8) showed that approximately two-thirds (64%) of computerized FEC filers have access to the Internet. Surprisingly, less than half (48%) of the incumbent campaign committees have Internet access although about three-fourths of them (74%) have a modem.

    Question 6: Own Web Site. Respondents who use a computer were also asked, "Does your organization have its own Web site?" The survey found that about half of all computerized FEC filers (49%) currently have their own Web site (as shown in Exhibit 8), an indication that they have experience using the Internet. The large PACs/party committees are most likely to have a Web site, followed by the small PACs. An unexpected finding was that only 11% to 14% of incumbent campaign committees have a Web site, although a much higher percentage of nonincumbent campaign committees (33% to 38%) use this method of communicating with constituents and other interested parties.

    Question 7: Maintenance of Financial Information. To better understand how the committees maintain the information that is reported to the FEC, participants were asked, "Who maintains your committee's financial information?" A solid majority (84%) replied that the person who prepares their FEC reports also maintains their financial information (as shown in Exhibit 9). There was little variation among the different types of committees, with one exception: a very high percentage of the small party committees (96%) reported that the preparer of their FEC reports is responsible for maintaining their financial information. Of all FEC filers, 8% rely on another office in their organization (such as the payroll office) to maintain their financial information, 4% use an outside vendor, and 4% use a combination of methods.

    Question 8: Method of Preparing FEC Reports. Question 8 asked, "How do you currently prepare your FEC reports?" Respondents were instructed to check all preparation methods that apply to their committee. The survey results (presented in Exhibit 10) revealed striking differences among the various types of committees. Approximately two-thirds (66%) of FEC filers prepare their reports entirely manually, with the findings ranging from only 5% of incumbent Senate campaign committees to 89% of small party committees. Additional analyses were conducted for respondents who use a computer and the results showed that a large proportion (59%) of computerized FEC filers prepare their reports entirely manually.

    Altogether, 18% of all FEC filers (21% of computerized filers) use an off-the-shelf commercial campaign management package alone (not in combination with other software) to prepare their FEC reports, again with much variation among the committees. Specifically, 62% of the incumbent campaign committees and 52% of the large party committees use campaign software packages alone to prepare FEC reports. The small PACs/party committees are the least likely to use a campaign package, with a usage rate of only 7%. A total of 19 different campaign software packages were listed by the respondents; survey results indicated that nearly all of the packages are capable of generating both FEC report summary pages as well as detailed schedules.

    Customized software (customized either in-house or by an outside vendor) is the only method that 7% of all FEC filers use to prepare FEC reports (9% of computerized filers). Incumbent Senate campaign committees are the most likely to choose this option (18%), followed by the large PACs/party committees (13%). Commercial spreadsheet or database packages are used alone by only 3% of all FEC filers (4% of computerized filers), with small PACs/party committees being the least likely to use this approach. A total of 11 different spreadsheet and database packages were listed by the respondents. Most of the packages appear to be capable of generating both detailed schedules and summary pages, although many FEC filers reported that they only use the spreadsheet/database software to generate detailed schedules. In addition, a number of committees (6% of all filers and 7% of those that are computerized) use a combination of software approaches to prepare their FEC reports, with most of them combining customized software with either a commercial campaign package or a spreadsheet/database package.

    Question 9: FEC Software. Question 9 was phrased as follows: "The FEC is developing a simple, user-friendly software package to help committees file their FEC reports electronically (as well as keep accurate records of their receipts and disbursements). This will be free software and will include technical support. If you find the software meets these standards, would your committee use it for electronic filing?" As shown in Exhibit 11, the committees reacted positively to the offer, with 38% of all FEC filers responding "definitely yes" and another 43% responding "probably yes." Only 17% indicated that they would probably not use the FEC software, and 2% did not answer the question and were categorized as "unsure." Overall, the small PACs and large party committees were the most interested, and the small party committees and nonincumbent Senate campaign committees were the least interested in using FEC software. The smaller committees were especially appreciative that the FEC software and technical assistance would be offered free of charge. Several commented that they could not afford the high-priced commercial campaign packages, and one respondent mentioned the difficulties his committee was currently facing due to their software vendor going out of business.

    The FEC's offer to provide technical support to help committees with electronic filing was appreciated by many respondents representing a broad range of committees. One person requested that the FEC establish a toll-free number for technical assistance, and another requested that the FEC provide 7x24 support (7 days a week, 24 hours a day), especially near FEC reporting due dates. One respondent was less optimistic in her assessment of technical assistance, stating that "the FEC is already overloaded. Last-minute questions about filing could add to the backlog, causing late or erroneous filings."

    Question 9 generated a large number of written comments and suggestions. Many respondents presented "wish lists" of the features they hoped would be included in the FEC software package, citing specific needs that their current software does not address. The most frequently mentioned software suggestions are listed below, with the number of times they were mentioned shown in brackets:

    Another group of respondents expressed concern that FEC software and electronic filing would require duplication of work on their part. One respondent, who is the treasurer of a small party committee, explained this view in a letter he sent along with his questionnaire:

    For most successful campaigns and committees, filing FEC disclosure reports is the end result, and a relatively unimportant output of a much longer process of fundraising. This process begins with identifying a donor base ... targeting donors for various ranges of contributions ... contacting those donors using personalized fundraising letters, call sheets for telephone contact, perhaps links to automated dialing systems, and assignment lists for particular solicitors. The process continues with tracking the results of each type of solicitation, recording pledges, producing "bills" or reminders, and ultimately recording receipt of the contributions and then generating thank-you notes. Producing the financial disclosure reports is almost an afterthought, an issue of interest only to the committee's treasurer. Also ... the fundraising/tracking software package is routinely linked to, or is an integral part of, the database of campaign volunteers ... and it is often linked to the master list of all registered voters. Therefore, even if the FEC provides a free package for recording and reporting contributions, it is unlikely to replace the basic fundraising and volunteer tracking system the campaign is using. It would then become a secondary system, requiring replicate input, and the campaign would then need to carefully ensure that the two systems are synchronized. Since most campaigns use volunteer labor, and since the fundraising system is really the one driving most campaign activities, it is almost inevitable that some data will be entered in one system and not the other, generating a massive task of reconciling data.

    To avoid duplication of effort, several respondents recommended that the FEC develop a system that focuses solely on the production and electronic transmission of FEC reports, rather than attempting to include other campaign functions. Instead of getting into the software business, a few suggested that the FEC specify the formatting and transmission requirements, and encourage the major vendors to modify their software accordingly. By taking advantage of the expertise of campaign software vendors when launching electronic filing, the likelihood of success would be greater. One respondent suggested that the FEC establish a formal process for certifying whether particular vendor software packages comply with FEC reporting rules and electronic filing requirements.

    Question 10: Benefits of Electronic Filing. Questions 10 and 11 were designed to gain a better understanding of what FEC filers perceive to be the benefits and obstacles to electronic filing. Question 10 asked, "Do you consider any of the following to be benefits of electronic filing?" A list of six potential benefits was presented, including "other benefits" (with space for comments) as well as the response, "We do not see any benefits of electronic filing." Question 11 was worded in a similar way, asking, "Do you consider any of the following to be obstacles to electronic filing?" A list of seven potential obstacles was presented, including "other obstacles" (with space for comments) and the response, "We do not see any obstacles to electronic filing." Analyses of Questions 10 and 11 revealed that FEC filers generally have a favorable attitude toward the electronic filing of disclosure reports, with more than twice as many respondents checking benefits compared to obstacles. Also, a sizable proportion (29%) indicated that they do not see any obstacles to electronic filing, compared to only 15% who indicated that they do not see any benefits.

    As shown in Exhibit 12, 70% of FEC filers believe that electronic filing should save them time (after the initial setup). In their comments, several respondents stated that electronic filing would probably give them a few additional days to prepare and verify lengthy FEC reports, since the lead time required to mail the reports would no longer be necessary. During campaigns, this additional time would be particularly beneficial, as well as the assurance that their reports will reach the FEC by the due date.

    Another potential benefit, cited by 63% of FEC filers, is that their paperwork would be reduced. Many respondents, however, stated that electronic filing would not totally eliminate their need to produce hard copies of their FEC reports. They cited the following reasons for needing hard-copy reports: (1) to do a final review for accuracy before the electronic transmission; (2) to file a copy with the state; and (3) to keep a copy on file for reference purposes. Although they do not envision a paperless system, many respondents stated that their photocopying needs would be reduced if they filed their FEC reports electronically. An electronic system would also save storage space and the paperwork would be more manageable. One respondent considered such a move to be consistent with an environmentally conscious government, stating that "it would cut down on the use of paper and save hundreds of trees."

    Approximately half of FEC filers (48%) believe that electronic filing would give everyone quicker and better access to information. Several respondents stated that they feel the public should have prompt access to accurate campaign finance information, and electronic filing should reduce the time required by FEC staff to prepare information for public release. Another potential benefit, cited by 43% of respondents, is that using FEC-approved electronic filing software would help them comply with FEC reporting rules. Several stated that their current campaign software packages do not have the capability to produce all of the FEC schedules, and it is hard for them to keep on top of changes in the campaign finance laws. One respondent said that if her committee had FEC software, "we would not have to fight with other software vendors over compliance and reporting issues."

    One-third of FEC filers (33%) believe that filing software may increase the accuracy of their records. A few respondents explained that their accuracy could be improved if they had an integrated software package that eliminated their current system which requires them to enter data twice and keep two sets of books. However, several voiced concerns that new electronic filing software may not be totally debugged and may produce inaccurate FEC reports, and yet the committees will still be legally responsible for any errors.

    A total of 47 respondents listed other benefits of electronic filing. The most common one was saving postage costs and "11th hour trips to the post office." Respondents also cited the advantages of having their data computerized and thus more accessible for their own needs as well as for FEC reporting. One person commented that it would assist his committee in internal audits. Three respondents volunteered to help the FEC implement electronic filing, either by beta testing the new system, participating in a demonstration program, and/or sitting on an advisory committee. Several respondents summed up their attitude toward electronic filing with such positive statements as, "It's a good idea and will put us in the 21st century;" "I encourage you to continue studies of modernization;" and "I think it's great!" Another simply stated that it will be "more fun."

    Question 11: Obstacles to Electronic Filing. As mentioned previously, a much lower proportion of respondents checked obstacles to electronic filing compared to benefits. Also, only 15% indicated that they do not see any benefits to electronic filing (with responses ranging from 25% of small party committees seeing no benefits to only 7% of large PACs). Despite their relatively positive attitude toward electronic filing, however, the survey revealed that many FEC filers have specific concerns about filing FEC reports electronically.

    As shown in Exhibit 13, 31% of FEC filers are concerned about ensuring the authenticity and security of their reports during transmission; the highest concern (50%) was exhibited by incumbent campaign committees. Regarding authenticity, many questioned how signatures would be handled and how the FEC would confirm receipt of a report filed electronically (the equivalent of a certified mail receipt). There were also concerns about computer "glitches," line noise, computer/modem problems on either end, damaged diskettes, potential loss of data transmitting large files (such as those over 5 megabytes), and penalties that might be incurred if technical problems resulted in FEC reports not reaching their destination on time. One respondent suggested that FEC reports be transmitted as "read-only" files so they would be tamper-proof. In addition, there was mention of the potentially serious problem of peak time overload and FEC modems being inadequate, particularly around the time of the FEC filing dates. A few respondents also expressed general fears about Internet security, including concerns about viruses being downloaded off the Internet and hackers moving money around (e.g., putting money in PACs). One person stated that her committee may need an "Internet security guard" to prevent someone from logging onto their system.

    An obstacle for 24% of all FEC filers is that they do not believe they have the capability at this time to file their disclosure reports electronically. As expected, there were significant differences among the various types of committees. For example, 60% of the small party committees responded that they do not have the capability, compared to only 18% to 21% of the large party committees, large PACs, and small PACs. Of the campaign committees, 30% to 37% believe they do not currently have the capability for electronic filing. In their comments, many of the smaller committees cited low activity, the grass-roots nature of their committee, very few employees (only volunteers in some cases), and inadequate funds to purchase a computer, modem, dedicated phone line, and software. As one respondent stated, "Making electronic filing mandatory would discriminate against poorer committees unable to afford all this fancy hoo-ha."

    Another potential obstacle cited by 17% of all FEC filers is that the public may gain access to more detailed contributor information via the Internet. This concern is somewhat higher among the large PACs/party committees and incumbent campaign committees (22% to 23%) and lower among the small PACs/party committees (14%). Several respondents commented on this issue. One stated her concern that contributors would not like the idea of their names and/or addresses being available on the Internet. Others expanded on this point, saying that individuals and commercial organizations (including mail houses) would have easier access to donor information and could use the list without the committee's permission. Another person stated that "even though people are not supposed to use FEC information to solicit contributions, my guess is that it is done anyway."

    Overall, the survey found that there is the least concern about the other three potential obstacles listed in Question 11: the inconvenience of software changes, the earlier release of FEC reports filed electronically, and being put at a disadvantage if electronic filing is not mandatory for all committees. Although only 10% to 11% of all FEC filers consider these three issues to be potential obstacles, the percentage is higher for certain types of committees. Specifically, 28% of the large party committees feel that modifying their current software would not be worth the effort, and 22% to 24% of nonincumbent and incumbent campaign committees also believe software modification would be an obstacle for them. Many respondents commented that they are comfortable with their present system, their current software has multiple uses in handling a variety of campaign management tasks as well as generating FEC reports, and they do not want to convert to another system. Some added that converting their large database would be a major undertaking. One respondent suggested that this obstacle would be greatly reduced if the FEC allowed committees to maintain their present software systems and focused instead on the electronic transmission of files. Several others emphasized the difficulty of making major software changes during an election year, suggesting that the new program be implemented at the beginning of the next election cycle (1999) when there would be fewer filing dates.

    Regarding the question of a voluntary electronic filing system, about one-third (33% to 35%) of incumbent and nonincumbent Senate campaign committees believe that electronic filing may put them at a disadvantage if it is not mandatory for all committees. These committees are also the most concerned about electronically filed FEC reports being released to the public sooner than those filed on paper, with 25% to 33% of the incumbent and nonincumbent Senate campaign committees citing this issue as an obstacle. Surprisingly, only one respondent commented on either of these issues, stating that although he recommends that electronic filing be a voluntary option, "it does appear that if our committee chose to file electronically while an opponent did not, we may be in a situation of competitive disadvantage. I am concerned that an opponent may be able to use the disbursement data before we could have equal access to the opponent's as a measure of countering any claims made against our candidate."

    A total of 117 respondents listed other obstacles to electronic filing. In addition to commenting on the potential obstacles listed in the questionnaire, several respondents cited their need to comply with state reporting requirements as well as federal requirements. They would like the FEC to coordinate with state authorities so their committees will not have to maintain two separate systems. Also, a few respondents expressed concern that the FEC's attempts to develop electronic filing software will prove to be much more difficult than anticipated, which they indicated has been the experience of several state and local governments.

    Question 12: Likelihood of Filing Electronically in 1998. The final survey question asked, "Looking ahead, how likely is it that you will file your FEC reports electronically in 1998?" As shown in Exhibit 14, only about one-third (32%) of FEC filers believe that they are not likely to file electronically next year. The highest negative response came from incumbent Senate campaign committees (a group with many members not facing re-election in 1998) and small party committees (the least computerized group). Approximately one-fourth (26%) of all FEC filers believe that it is very likely that they will file their FEC reports electronically in 1998, another 41% believe it is quite likely, and less than 1% did not answer the question and were categorized as "unsure."

    Those who responded as being very likely or somewhat likely to file electronically were asked which method they would prefer - disk, modem, or the Internet. The majority (57%) responded that they would prefer to file via modem, with little variation among the different types of committees. Filing via the Internet was the preferred choice for one-third (33%) of the respondents, with 41% of the small PACs/party committees preferring this option compared to only 12% of the incumbent campaign committees. The low preference among incumbents may be due to their lack of familiarity with the Internet, as shown in their responses to Questions 5 and 6. Overall, the least preferred electronic filing method was via disk, with 26% choosing this option. Incumbent campaign committees as a group had a higher preference (36%) for filing via disk, especially incumbent Senate committees (48%).

    Additional Recommendations from Respondents. At the end of the questionnaire, the FEC encouraged respondents to include any additional recommendations they may have about electronic filing. Over 250 respondents (34%) took the time to write comments and suggestions on their questionnaires, and five individuals enclosed letters describing their views in more detail. In addition, 645 respondents (88%) agreed to participate in followup interviews, although it was later decided that such interviews were not needed to complete the FEC Survey for Electronic Filing.

    CONCLUSIONS

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    In summary, the FEC Survey for Electronic Filing clearly achieved its two primary goals: to identify the current computer capabilities of the different types of candidate campaign and other political committees, and to gain a better understanding of their attitudes toward the electronic filing of FEC reports. The high response rate and written comments offered by a large number of respondents indicates a strong interest among the FEC filing community in the issue of electronic filing.

    Regarding computer capabilities, the survey found striking differences among the different types of committees. Although a large proportion (85%) of the committees required to file FEC reports are currently computerized, only 55% of the small party committees have even one computer, compared to 99% of the large party committees. Windows systems are the most popular among all computerized filers, with Windows 95 and Windows NT being the current favorites. Of the computerized filers, approximately three-fourths have access to a modem, two-thirds have access to the Internet, half have their own Web site, and nearly 40% currently have an e-mail address. The survey also revealed that the incumbent campaign committees are the least likely of all the committees to have access to the Internet, their own Web site, or e-mail.

    There was little variation among the different types of committees with respect to who maintains the committee's financial information, with a solid majority (84%) indicating that it is the person who prepares their FEC reports rather than another office in their organization or an outside vendor. A key finding was that nearly two-thirds of all filers prepare their FEC reports entirely manually, despite the generally high level of computerization. There was substantial variation among the different types of committees, however, in their report preparation method. For example, over half of the incumbent campaign committees and large party committees use campaign software packages to prepare their FEC reports, compared to less than 10% of the small PACs/party committees. Over 80% of survey participants responded positively to the FEC's offer of free software and technical assistance to help committees with electronic filing, although many indicated they have a greater need for a comprehensive campaign management package than a simple software package to help them file their FEC reports electronically.

    Regarding attitudes toward electronic filing, the survey found that FEC filers have a generally positive attitude toward filing their FEC reports electronically. The most frequently mentioned benefits cited by respondents were that electronic filing should save them time (after the initial setup), their paperwork would be reduced, and electronic filing would give everyone quicker and better access to information. Many FEC filers, however, have specific concerns about filing FEC reports electronically. Their greatest concern involves ensuring the authenticity and security of their reports during transmission. Another obstacle for approximately one-fourth of all FEC filers (60% of the small party committees) is that they do not believe they have the capability at this time to file their FEC reports electronically. A potential obstacle to electronic filing for a smaller percentage of filers (17%) is that the public may gain access to more detailed contributor information via the Internet. Taken together, the two questions regarding potential benefits and obstacles to electronic filing generated a great deal of comment and useful information for the FEC.

    In conclusion, the results of the FEC Survey for Electronic Filing illustrate the variation in computer capabilities and attitudes within the filing community. However, they also underscore the high level of computerization and the positive attitude that most FEC filers have toward the electronic filing of disclosure reports. The Commission is very appreciative of the time taken by the respondents to complete the survey questionnaire and offer specific recommendations. With this information, the FEC is in a much better position to develop an electronic filing system that fits the needs and capabilities of the filing community as well as the needs of the Commission.