Civil penalties adjusted for inflation (2009)

On July 1, 2009, the Commission published final rules that apply cost-of-living adjustments to certain civil monetary penalties under the Federal Election Campaign Act (FECA), the Presidential Election Campaign Fund Act and the Presidential Primary Matching Payment Account Act. The Federal Civil Penalties Inflation Adjustment Act of 1990 (Inflation Adjustment Act), as amended, requires federal agencies to adjust for inflation the civil monetary penalties within their jurisdiction at least once every four years according to detailed formulae.

The Inflation Adjustment Act requires the Commission to adjust civil penalties by a Cost of Living Adjustment (COLA), which is defined as the percentage by which the U.S. Department of Labor’s Consumer Price Index for all urban consumers (CPI) for June of the year preceding the adjustment exceeds the CPI for June of the year in which each civil penalty was last set or adjusted. The amount of the resulting increase is then subject to rounding rules based on the size of the civil penalty. The Inflation Adjustment Act imposes a 10 percent cap on the first adjustment under its rules, but no cap on subsequent adjustments.

The adjusted penalty amounts took effect July 1, 2009, when the final rules were published in the Federal Register, and only apply to violations that occur after that date. The Commission previously applied the Inflation Adjustment Act formulae to its civil penalties in 1997, 2002 and 2005.

Civil penalties adjustments

The Federal Election Campaign Act provides for civil penalties for any person who violates any portion of the FECA or chapters 95 and 96 of Title 26. The FECA's civil penalties are organized into two tiers. The higher tier applies to "knowing and willful" violations of the FECA or chapters 95 and 96 of Title 26, the lower to those that are not "knowing and willful." While the amounts paid in each enforcement case are arrived at through a conciliation process, Commission regulations at 11 CFR 111.24 specify the civil penalty amounts established by 2 U.S.C. §§437g(a)(5), (6) and (12) and 441f, as adjusted by the Inflation Adjustment Act. The adjustments for 2009 are as follows:

• For violations that are not knowing and willful, the previous $6,500 civil penalty is now $7,500;
• For violations that are knowing and willful, the previous $11,000 civil penalty is now $16,000;
• For knowing and willful contributions made in the name of another, the previous $55,000 civil penalty is now $60,000;
• For violations of confidentiality that are not knowing and willful, the previous $2,200 civil penalty is now $3,200; and
• For knowing and willful violations of the confidentiality rules, the previous $6,500 civil penalty is now $6,500. 11 CFR 111.24(a) and (b).

Administrative fines

The FECA permits the Commission to assess civil penalties for violations of the reporting requirements of 2 U.S.C. §434(a) in accordance with the schedule of penalties established and published by the Commission. 2 U.S.C. §437g(a)(4)(C). Each schedule contains penalties for late-filed reports and penalties for non-filed reports. A report is considered to be late-filed if the committee submits it within a certain number of days after the deadline. Reports filed later than that are considered nonfiled. 11 CFR 111.43(e). Penalty calculations are based not only on the tardiness of the report, but also the level of activity, or the estimated level of activity, as appropriate, and other factors. 111.43(d). An administrative fine calculator is available on the FEC's website at https://transition.fec.gov/af/af_calc.shtml.

Civil penalties for 48-hour notices

Principal campaign committees are required to report, within 48 hours of receipt, any contributions of $1,000 or more that are received after the 20th day, but more than 48 hours before, any election. 2 U.S.C. §434(a)(6). The FECA permits the Commission to assess civil penalties for violations of the 48-hour notice reporting requirement. The Commission last adjusted the civil penalties for these reporting violations in 2005. However, under the rounding rules for the calculation of adjustments, no changes were required forcivil penalties for timely filing of 48- hour notices by principal campaign committees.

Additional information

The final rule and its Explanation and Justification were published in the Federal Register on July 1, 2009 (74 FR 31345) and are available on the FEC web site at http://www.fec.gov/law/cfr/ej_compilation/2009/notice_2009-09.pdf.