March 3, 1997

Advisory to News Editors, Correspondents, Broadcasters

There have been recent stories and queries by the media concerning soft money expenditures by the national political party committees. The following is offered as guidance:

If national party committees choose to use some nonfederal funds (soft money, i.e., money in amounts or from sources that are prohibited under federal law), they must comply with Federal Election Commission regulations on allocation. These regulations require national party committees to allocate, between their federal and non-federal accounts, all expenses for activity that jointly benefit both federal and non-federal candidates and elections. Examples of allocable activity include administrative and generic voter drive expenses.

These costs must be allocated according to a fixed percentage, a percentage that varies depending on which type of national committee is making the expenditure and whether the activity is in a Presidential year. The "parent" National Committees (DNC and RNC) during Presidential years are required to allocate at least 65 percent of all expenses for joint activity to their federal accounts. In all other years, at least 60 percent of such costs must be allocated to federal accounts.

For the National Parties'''' Senate and House campaign committees, a minimum of 65 percent of the described costs every year must be allocated to federal accounts, but a higher percent may apply instead, depending upon the amounts of specific candidate spending by these committees.

National party committees may use federal funds (hard dollars) to cover 100 percent of their shared federal/non-federal expenses, but if they use some soft money, they must follow the allocation rules explained above. The 35 percent (non-federal) figure is the maximum allowable amount of soft money for shared expenses. There is no minimum amount required for the soft money allocations.

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The next scheduled Capitol Hill hearing on the FEC budget is March 13, before a subcommitee of Chairman Bob Livingston''''s House Appropriations Committee. Commissioners testified January 30 before Chairman John Warner''''s Senate Committee on Rules and Administration, citing the need for fiscal year 1997 supplemental funding of $1.7 million and FY''''98 amendment of $4.9 million to the FEC''''s request (to OMB) of $29.3 million.

The Commission''''s present operating FY''''97 budget is $28.16 million. A wire story following the January 30 hearing contained a typo that moved the decimal point one space to the right. Please adjust that decimal point if you''''re using that number as a reference. Also, $2.5 million of the present $28.16 has been earmarked ("fenced") by Congress for computerization modernization.

On the latter point, keep in mind that although Congress passed Public Law 104-79 in 1995, making electronic filing of campaign reports voluntary for House candidates beginning February 1, 1997, along with the FEC as point of entry, there was never counterpart legislation for Senate candidates, who still file with the Secretary of the Senate and only on paper. PACs, party committees, and Presidential candidates previously filed with the FEC and may now file their reports electronically also. The Federal Register of August 15, 1996 (p.42371) contains final regulations on this law.

And, for those of you doing budget stories, the FEC Press Office has a historical year-by-year breakdown of the FEC''''s appropriations.

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In a media advisory dated February 6, we sought to dispel some amount of confusion regarding issue advertisements and independent expenditures. In an effort to keep the distinction simple, we omitted some clarifying wording that prompted some queries for further clarification. Attached is a revised version of the entire February 6 advisory, with the clarifications in italics. Please replace your previous media advisory (if indeed you kept it) of February 6 with the revised version.

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Should you desire guidance on the aforementioned or other issues involving the FEC, contact: FEC Press Office, 999 E St. NW, Washington, DC 20463, phone 202-219-4155. The FEC Website is htp//www:fec.gov.

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February 6, 1997

(Revised March 3, clarifications in italics)

Advisory to News Editors, Correspondents, Broadcasters:

The ongoing nationwide discussion on campaign finance abuses and reform has brought many new participants into the debate. Although beneficial to the debate, it has led to some amount of misunderstanding of the standard terms of art, in turn confusing the dialogue.

Specifically, the FEC has encountered the misuse of the term "independent expenditure," erroneously used to describe any political ad that is financed outside the purview of the federal election law. Often, speakers, broadcasters, and reporters use "independent expenditures" to describe what are, in fact, "issue advertisements."

For the record, these two terms have distinct meanings under the law and are mutually exclusive. To assist you in understanding and clarifying this issue, the following definitions are offered:

• Issue Advertisement: A public advertisement, not sponsored by a federal office candidate or political committee, encouraging readers or listeners to take action to advance whatever public cause is being promoted. An issue advertisement may implicate electoral politics, but it cannot contain "express advocacy." The Federal Election Commission has no jurisdiction over issue advertisements unless they have been coordinated with a candidate or the candidate''''s committee. Assuming there has been no such coordination, issue ads not sponsored by a political committee would not be reportable and soft money may be used to pay for them.

These ads differ from independent expenditures which expressly advocate the election or defeat of a clearly identified candidate (see p.2):

• Independent Expenditures: A public advertisement expressly advocating the election or defeat of a clearly identified candidate which is not made in cooperation or consultation with any federal candidate or his/her committee. Independent expenditures can be made without limit. However, they are subject to Federal Election Commission regulations in the following ways:

There are various court decisions involving issue advocacy and express candidate advocacy, some pertinent cases for your research purposes being FEC v. Massachusetts Citizens for Life, Maine Right to Life Committee v. FEC, and FEC v. Furgatch.

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If you desire further clarification on items in this advisory or anything involving campaign finance, the Federal Election Campaign Act, or the Federal Election Commission, contact the FEC Press Office, 999 E St. NW, Washington, DC 20463, 202-219-4155.

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