Commission adopts procedural rules for audit hearings

The Commission is instituting a pilot program that provides political committees that are audited pursuant to the Federal Election Campaign Act (the Act) with the opportunity to have a hearing before the Commission prior to the Commission"s adoption of a Final Audit Report on the matter. The Commission has previously adopted a similar program for hearings at the "probable cause" stage of the enforcement process. The audit hearings will provide audited committees with the opportunity to present oral arguments to the Commission directly and give the Commission an opportunity to ask relevant questions prior to adopting a Final Audit Report.

Background

On January 14-15, 2009, the Commission held public hearings regarding procedures and processes that it uses to resolve enforcement cases. Many commenters at the hearing praised the FEC's program for holding probable cause hearings during the enforcement process, and some commenters requested that a similar procedure be adopted with respect to other Commission processes, including audits.

Accordingly, the Commission has established a new pilot program that will allow a committee that is being audited by the Commission's Audit Division to request a hearing in cases where the Audit Division's draft Final Audit Report concludes that the committee violated the Act or Commission regulations. The pilot program became effective on July 27, 2009. The Commission will evaluate this pilot program after one calendar year and consider whether it should be made permanent, be discontinued or be modified.

Opportunity to request a hearing

Under current Commission procedures, once the Commission's Audit Division completes its audit field work, it conducts an exit conference at which it presents its preliminary findings to the audited committee. Based on the field work and the committee’s response at the exit conference, the Audit Division prepares an interim or preliminary audit report that, in certain situations, the Commission considers in executive session prior to the report being sent to the committee being audited. The committee then has the opportunity to respond in writing. The Audit Division subsequently prepares a draft Final Audit Report for Commission consideration. If one or more Commissioners object to the report, the matter is discussed and decided in an open meeting of the Commission.

The Commission wishes to provide those committees being audited with an opportunity to address the Commission directly and in person, before the Commission considers adopting any Audit Division findings that the committee violated the Act or Commission regulations.

When the Audit Division prepares its draft Final Audit Report and recommends that the Commission adopt findings that a violation of the Act or regulations occurred, it shall attach a cover letter informing the committee of the opportunity to provide a written response and request an oral hearing before the Commission, which the committee must request within 15 days after receiving the draft Final Audit Report. Requests for a hearing must be made in writing and must be filed with the committee's response.

The Commission will grant a request for an oral hearing if any two Commissioners vote affirmatively. Hearings are voluntary, and the Commission will draw no adverse inference based on the committee's request for, or waiver of, such a hearing. Each request for a hearing must state specifically why the committee is requesting the hearing and what issues the committee expects to address. The Commission will determine the format and time allotted for each hearing at its discretion.

Hearing procedures

Once the Commission has granted an oral hearing, committees or their counsel will have the opportunity to present their arguments and the Commissioners may pose questions to the committee or their counsel, if represented. Committees are expected only to raise issues that were identified in their hearing request. The Commission may request that the committee submit supplementary information or briefing after the hearing. Hearings may be held in either open or closed session depending on the issues. If the hearing is held in closed session, the transcript will become part of the record of the audit and may be relied upon for Commission determinations. The Commission may make transcripts public after the matter is closed in accordance with Commission policies on disclosure. For hearings held in open session, the audio recording will be placed on the FEC website.

Additional information

The full text of the Commission action is available at http://www.fec.gov/law/cfr/ej_compilation/2009/notice_2009-12.pdf.