Bipartisan Campaign Reform Act of 2002: Summary and Comparison with Previous Law

Order Code RL31402

CRS Report for Congress

Received through the CRS Web

Bipartisan Campaign Reform Act of 2002:

Summary and Comparison with Previous Law

Updated January 9, 2004

name redacted

Specialist in American National Government

Government and Finance Division

name redacted

Legislative Attorney

American Law Division

Congressional Research Service ˜ The Library of Congress

Bipartisan Campaign Reform Act of 2002:

Summary and Comparison with Previous Law

Summary

The Bipartisan Campaign Reform Act of 2002 (BCRA) was enacted on March

27, 2002 as P.L. 107-155. It passed the House on February 14, 2002, as H.R. 2356

(Shays-Meehan), by a 240-189 vote. Its companion measure, on which it was largely

based, had initially been passed by the Senate in 2001 as S. 27 (McCain-Feingold).

On March 20, 2002, however, the Senate approved the House-passed H.R. 2356 by

a 60-40 vote, thus avoiding a conference to reconcile differences between S. 27 and

H.R. 2356. A series of technical amendments to the bill was passed later that day by

the House, in the form of H.Con.Res. 361, which directed the Clerk of the House to

make specified corrections in the enrolled H.R. 2356. The Senate approved the

concurrent resolution on March 22, thus clearing the measure for the President.

The two primary features of P.L. 107-155 are restrictions on party soft money

and issue advocacy. First, the new Act generally bans the raising of soft money by

national parties and federal candidates or officials and restricts soft money spending

by state parties on what the Act defines as “federal election activities.” The Act does,

however, allow for some use of soft money under certain conditions for specified

federal election activities by state and local parties.

Second, the Act regulates issue advocacy by creating a new term in federal

election law, “electioneering communication”— political advertisements that “refer”

to a clearly identified federal candidate and are broadcast within 30 days of a primary

or 60 days of a general election. Generally, the Act prohibits unions and certain

corporations from spending treasury funds for such “electioneering

communications.” For those individuals and groups permitted to finance such

communications, it requires disclosure of disbursements of over $10,000 and the

identity of donors of $1,000 or more.

The Act generally took effect on November 6, 2002, the day after the 2002

general elections. Certain provisions, however, had different effective dates, either

to allow a transition period or, as in the case of increased contribution limits, to make

the new rules coincide with the calendar year.

On December 10, 2003, in McConnell v. FEC (No. 02-1674), the U.S. Supreme

Court upheld the constitutionality of key provisions of BCRA. A 5-to-4 majority of

the Court upheld most portions of the law, including the key provisions relating to

political party soft money and electioneering communications. The Court, however,

invalidated two provisions of the law: the prohibition of contributions by minors age

17 and under and the provision requiring political parties to choose between

coordinated and independent expenditures during the post-nomination, pre-election

campaign period.

Contents

Bipartisan Campaign Reform Act of 2002(P.L. 107-155): Summary

and Comparison with Previous Law* . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

Hard Money Sources: Individuals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

Hard Money Sources: Political Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

Hard Money Sources: Candidates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

Independent Expenditures (Hard Money) . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Coordination (Hard and Soft Money) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Soft Money: Party . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Issue Advocacy (Soft Money) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

FEC Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

FEC Enforcement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

Advertising . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

Foreign Money . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

Bipartisan Campaign Reform Act of 2002:

Summary and Comparison with

Previous Law

This report summarizes the Bipartisan Campaign Reform Act of 2002 (P.L. 107155) and compares it with the previous law (in most cases, the Federal Election

Campaign Act (FECA), 2 U.S.C. § 431 et seq.). In general, the new Act took effect

on November 6, 2002, the day after the 2002 general elections, although certain

provisions had different effective dates, as noted herein.

On December 10, 2003, the Supreme Court, in McConnell v. FEC, struck down

two provisions of BCRA, dealing with contributions by minors and political party

coordinated and independent expenditures. This revised report reflects the Court’s

ruling on those provisions, as noted herein.1

Much of the recent campaign finance debate has revolved around the issues of

so-called hard and soft money. In general, the term “hard money” has been used to

refer to funds raised and spent according to the limits, prohibitions, and disclosure

requirements of federal election law. By contrast, “soft money” has been used to

describe funds raised and spent outside the federal election regulatory framework, but

which may have at least an indirect impact on federal elections. Since the new

statute described herein became effective, however, regulation was extended to some

aspects of soft money that hitherto had not been regulated by federal election law.

The Report consists of a table providing a detailed comparison of the new Act

and relevant previous law, organized according to major topics covered. The table

provides the Act’s section numbers, and for previous law, U.S. Code (U.S.C.) and

Code of Federal Regulations (C.F.R.) citations and selected, abbreviated courtdecision summaries. In the text summarizing the Act, italics are used to denote

technical corrections made under H.Con.Res. 361, which was adopted following

passage of H.R. 2356.2 In the case of the two provisions struck down by the Supreme

Court in McConnell v. FEC, the table shows the BCRA provision as originally

enacted, highlighted with a reference that the Court invalidated these sections.

1

For a discussion of the majority opinion in McConnell v. FEC, see: CRS Report RS 21693,

Campaign Finance Law: The Supreme Court Upholds Key Provisions of BCRA in

McConnell v. FEC, by (name redacted).

2

For a legislative history of floor amendments, see: CRS Report RL31290, Campaign

Finance Bills Passed in the 107th Congress: Comparison of S. 27 (McCain-Feingold), H.R.

2356 (Shays-Meehan), and Current Law, by (name redacted) and (name redacted).

CRS-2

Bipartisan Campaign Reform Act of 2002

(P.L. 107-155): Summary and Comparison with

Previous Law*

Relevant Previous Law

Bipartisan Campaign Reform Act

Hard Money Sources: Individuals

Limit on contributions to candidates:

$1,000 per candidate, per election; not

indexed [2 USC §441a(a)(1)(A)]

Limit on contributions to state party

committee:

$5,000 per year to federal account, not

indexed [2 USC §441a(a)(1)(C)]

Limit on contributions to national

party committee:

$20,000 per year to federal account, not

indexed [2 USC § 441a(a)(1)(B)]

Limit on aggregate contributions:

$25,000 per year to PACs, parties, and

candidates, not indexed

[2 USC §441a(a)(3)]

Raises limit to $2,000 per candidate, per

election, indexed for inflation [Sec. 307]

Raises limit to $10,000 per year [Sec. 102]

Raises limit to $25,000 per year, indexed

for inflation [Sec. 307]

Raises limit to $95,000 per 2-year cycle,

with sub-limits:

(a) $37,500 to all candidates;

(b) $57,500 to all PACs and parties (no

more than $37,500 of which is to state and

local parties and PACs); indexed [Sec. 307]

Hard Money Sources: Political Parties

Special limit on contributions to

Senate nominees:

$17,500 in election year, by national

and senatorial party committees

combined, not indexed

[2 USC §441a(h)]

Raises limit to $35,000 in year of election,

indexed for inflation [Sec. 307]

Hard Money Sources: Candidates

Personal use of campaign funds:

Bans candidate personal use

[2 USC §439a]

Regulations enumerate personal uses

[11 CFR§113.1(g)]

Codifies FEC regulations on permissible

uses for campaign funds; clarifies that

transfers of excess funds to national, state,

and local parties are not subject to limits;

retains ban on personal use [Sec. 301]

* Italics reflect technical corrections per H.Con.Res. 361, passed after H.R. 2356. The term

“GOTV” is used in the table to denote get-out-the-vote drives.

CRS-3

Relevant Previous Law

Candidate loans to campaign:

No rules regarding amount of candidate

loans that can be paid from postelection contributions

Wealthy candidates:

Contribution limits are the same for all

candidates, regardless of whether

opponents spend large amounts from

personal funds

[2 USC § 441a(a)(1)(A)]

In Buckley v. Valeo (424 U.S. 1, 51-54

(1976)), Supreme Court struck down

limits on spending from personal funds

by candidates

Bipartisan Campaign Reform Act

Limits repayment of loans to $250,000,

from amounts contributed after election

[Sec. 304]

In Senate elections:

- Raises limits on individual and party

support for Senate candidate whose

opponent exceeds designated threshold

level of personal campaign funding

- Creates threshold of $150,000 + 4¢ times

number eligible voters in state

- Once “opposition personal funds amount”

(personal spending of candidate minus that

of opponent) exceeds threshold by: (a) from

2 to under 4 times, then limit on individual

contributions to opponent is tripled; (b)

from 4 to under10 times, then limit on

individual contributions to opponent is

raised 6-fold; (c) 10 times, then limit on

individual contributions to opponent is

raised 6-fold and lifts limit on party

coordinated expenditures for opponent

- Limits would be raised only to extent of

110% of total “opposition personal funds

amount” [Sec. 304]

In House elections:

- Raises limits on individual and party

support for House candidate whose

opponent exceeds threshold of $350,000 in

personal campaign funding

- Once “opposition personal funds amount”

(personal spending of candidate minus that

of opponent) exceeds threshold, then limit

on individual contributions to opponent is

tripled and limit on party coordinated

expenditures for opponent is lifted

- Limits would be raised only to extent of

100% of total “opposition personal funds

amount” [Sec. 319]

In House and Senate elections

- Aggregate individual limit raised to extent

of higher contribution limits

- In calculating “opponent personal funds

amount,” subtracts “gross receipts

advantage” of candidate opposed by

wealthy candidate (50% of gross receipts of

candidate minus 50% of gross receipts of

wealthy opponent, as of Jun. 30 and Dec.

31 of prior year) [Secs. 316/319]

CRS-4

Relevant Previous Law

Bipartisan Campaign Reform Act

Independent Expenditures (Hard Money)

Definition:

An expenditure by a person expressly

advocating election or defeat of a

clearly identified candidate, made

without cooperation or consultation

with candidate (or authorized

committee or agent), and not made in

concert with, or at request or

suggestion of, any candidate (or agent

or committee) [2 USC §431(17)]

Special disclosure rules:

Requires 24-hour notice of independent

expenditures of $1,000 or more made in

last 20 days of election, up to 24 hours

prior to election [2 USC § 434(c)(2)]

Party spending for party candidates:

Parties may make expenditures in

connection with a general election of a

federal candidate’s campaign, subject

to limits, also known as the

“coordinated party expenditure limits”

[2 USC §441a(d)]

In Colorado Republican Federal

Campaign Committee v. FEC

(Colorado I) (518 U.S. 604 (1996)),

Supreme Court ruled that, as applied to

CO Republican Party, the coordinated

party expenditure limit was

unconstitutional, and that parties can

make independent expenditures on

behalf of candidates; in Colorado II,

(No. 00-191 slip op. (June 25, 2001)),

Court upheld the constitutionality of

the coordinated party expenditure limit

Defines independent expenditure as an

expenditure by a person expressly

advocating the election or defeat of a

clearly identified candidate, and that is not

made in concert or cooperation with, or at

request or suggestion of a candidate, party,

or agent [Sec. 211]

- Requires 24-hour notice of independent

expenditures of $1,000 or more made or

contracted to be made in last 20 days of

election, up to 24 hours prior to election

(notice due at FEC within 24 hours)

- Adds requirement for a 48-hour notice of

independent expenditures of $10,000 or

more, made or contracted to be made up to

20 days before an election [Sec. 212]

After date of party nomination, prohibits

party from making coordinated

expenditures for a candidate it has made

independent expenditures for and from

making independent expenditures for a

candidate it has made coordinated

expenditures for [Sec. 213]

Invalidated by Supreme Court in its

December 10, 2003 ruling in McConnell

v. FEC

CRS-5

Relevant Previous Law

Bipartisan Campaign Reform Act

Coordination (Hard and Soft Money)

Definition:

Statute:

FECA does not define “coordination”

or “coordinated activity” per se

FEC Regulations:

New FEC coordination rules define

“coordinated general public political

communications” as coordinated

communications including clearly

identified candidates, paid for by

persons other than candidates/parties,

including express or issue advocacy;

communication will be considered

coordinated if: it is made at request or

suggestion of candidate or party,

candidate/party had control or

substantial decision-making authority,

or candidate/party engaged in

substantial discussion or negotiation

with those involved in creating,

producing, distributing, or paying for

communication

[11 CFR §100.23 (2001)]

Consequences of coordination:

- Expenditures made in cooperation,

consultation, or concert with, or at the

request or suggestion of, a candidate or

agents shall be considered a

contribution to candidate

[2 USC §441a(a)(7)(B)(i)]

- Financing of dissemination,

distribution, or republication, in whole

or part, of any broadcast or materials

prepared by candidate or agents shall

be considered an expenditure subject to

relevant limits

[2 USC §441a(a)(7)(B)(ii)]

(For express advocacy discussion, see

“Soft Money: Party” & “Issue

Advocacy” sections)

Statute:

No provision

FEC Regulations:

- Repeals new FEC rules as of date new

regulations are promulgated

- Directs FEC to promulgate new

regulations on coordinated communications

by persons other than candidates,

authorized committees, or parties

- Specifies new rules will not require

agreement or formal collaboration to

establish coordination

- Specifies rules will address issues of: (1)

republication of campaign material; (2)

common vendors; (3) prior employment

status; and (4) substantial discussion with

candidate or party [Sec. 214]

- Treats an “electioneering communication”

that is coordinated with a candidate, agent,

or party as a contribution to and

expenditure by candidate or party [Sec.202]

- Treats expenditures by any person made

in cooperation, consultation, or concert

with, or at request or suggestion of, any

party committee as a contribution to that

party committee [Sec. 214]

CRS-6

Relevant Previous Law

Bipartisan Campaign Reform Act

Soft Money: Party

National party committees:

May raise soft money (i.e., generally,

funds from sources or in amounts

banned under federal election law), so

long as funds are deposited in nonfederal accounts, and may distribute

funds, in accord with FEC allocation

formulae [11 CFR §106.5]

State and local party committees:

May spend soft money on the state

portion of mixed (federal/state)

activities, according to detailed

allocation requirements

[11 CFR §106.5]

Prohibits a national party committee,

including entities directly or indirectly

established, financed, maintained, or

controlled by such committee or agent

acting on its behalf, from soliciting,

receiving, directing, transferring, or

spending soft money [Sec. 101]

- In general, bans soft money spending for

a “federal election activity” by state/local

party committees, including an entity

directly or indirectly established, financed,

maintained, or controlled by a state or local

party committee (and agent acting on its

behalf), or by an association or group of

state/local candidates or officials

- However, allows state, district, or local

party committee to use some funds raised

under state law for an allocable share (at

FEC-determined ratios) of a voter

registration drive in last 120 days of a

federal election, voter ID, GOTV, and

generic activity, if it: (1) does not refer to a

federal candidate; (2) does not pay for a

broadcast, cable, or satellite communication

(unless it refers solely to state or local

candidates); (3) takes no more than $10,000

a year (or less, if state law so limits) from

any person (including an entity person

establishes, finances, maintains, or

controls) for such activity; (4) uses only

funds raised by that party committee

expressly for such purposes, with no

transfers from other party committees (and

agents/officers acting on their behalf or

entity they directly/indirectly establish,

finance, maintain, or control); and (5) uses

no funds that were solicited, received,

directed, transferred, or spent by or in name

of natl. party, federal candidate or official,

or joint fundraising activities by 2 or more

state/local party committees [Sec. 101]

- Prohibits state/local candidates from using

soft money for public communications that

promote/attack a clearly identified federal

candidate, but exempts communications

referring to a federal candidate who is also

a state/local candidate

CRS-7

Relevant Previous Law

Bipartisan Campaign Reform Act

Federal or non-federal activity:

FEC allocation rules offer guidance in

determining if activity is federal or

non-federal election related, by such

means as “ballot composition” (for

administration and generic voter

drives), “time and space” allotted in a

communication, etc. [11 CFR §106.1]

"Federal election activity" defined to

include: (1) voter registration drives in last

120 days of a federal election; (2) voter

identification, GOTV drives, and generic

activity in connection with an election in

which a federal candidate is on the ballot;

(3) “public communications” that refer to a

clearly identified federal candidate and

promote, support, attack, or oppose a

candidate for that office (regardless of

whether they expressly advocate a vote for

or against); or (4) services by a state or

local party employee who spends at least

25% of paid time in a month on activities in

connection with a federal election

[Sec. 101]

Definition of activity generally

triggering application of federal

election law — Express advocacy:

Sup. Court, in Buckley v. Valeo (424

U.S. 1, 44 (1976)) and FEC v. Mass.

Citizens for Life (479 U.S. 238, 249

(1986)), generally construed federal

campaign law to reach only funds used

for independent communications by

non-political committees that include

express words advocating election or

defeat of clearly identified candidate;

in lower courts, prevailing view is,

generally, that regulation of such

communications that do not contain

specific express advocacy words (or

“magic words,” e.g., “vote for,”

“defeat”) is not constitutional; but

see,11 CFR §106.5(b), subjecting

national party disbursements for nonexpress advocacy communications to

allocation formulae, requiring specific

% of hard money, §104.9(c), requiring

reporting of natl. party soft money, and

§106.5(b), (c), & (d), requiring party

allocation of generic voter drive costs

Public political communications:

Defined by new regulations as those

made through broadcast (including

cable), newspaper, magazine, outdoor

advertising facility, mailing or any

electronic medium, including Internet

or Web site, with intended audience of

over 100 people

[11 CFR §100.23(e)(1) 2001]

Generic activity:

No provision

Defines “public communications” as those

made by broadcast, cable, satellite,

newspaper, magazine, outdoor advertising,

mass mailing (over 500 identical or

substantially similar pieces mailed within

30 days of each other), or phone bank (over

500 identical or substantially similar calls

made within 30 days of each other)

[Sec. 101]

Defines “generic campaign activity” as one

that promotes a party but not a federal or

non-federal candidate [Sec. 101]

CRS-8

Relevant Previous Law

Permissible state/local party

spending:

State/local parties may spend money

on federal and non-federal races, if they

allocate funds between hard and soft

money [11 CFR §106.5]

Fundraising costs:

Parties may allocate costs

[11 CFR §106.5(f)]

Support for tax-exempt groups:

No restrictions on parties’ ability to

support tax-exempt groups

Federal candidates/officeholders:

Role in raising soft money:

May participate in fundraisers without

restriction

Bipartisan Campaign Reform Act

State parties may spend soft money on

activities that are not “federal election

activities,” including: public

communications referring solely to

state/local candidates; contributions to

state/local candidates; state, district, or

local convention costs; and grassroots

materials only depicting state/local

candidates [Sec. 101]

Prohibits party committees from using soft

money to raise funds for use at least in part

on “federal election activities” [Sec. 101]

Prohibits party committees or agents from

raising money for, or giving or directing

money to, an Internal Revenue Code

§501(c) tax-exempt organization that makes

disbursements in connection with a federal

election (including a “federal election

activity”) or a §527 tax-exempt

organization (if not a federal political

committee) [Sec. 101]

Role in raising soft money:

- Prohibits federal candidates,

officeholders, agents, or entities they

directly or indirectly establish, maintain,

finance, or control from raising soft money

in connection with a federal election

(including any “federal election activity”)

or any money from sources beyond federal

limits and prohibitions in non-federal

elections

- Ban does not apply to an individual who

is or was also a state or local candidate, for

activity allowed under state law and that

refers only to the state/local candidate or

opponents; does not prohibit appearing,

speaking, or being featured guest at

state/local party fundraiser [Sec. 101]

CRS-9

Relevant Previous Law

Federal candidates/officeholders:

Role in tax-exempt fundraising:

No restrictions

Disclosure by national parties:

Regulations require disclosure of all

receipts and disbursements

[11 CFR §104.8, 104.9]

State/local party disclosure:

Required for activity by federal

accounts only [2 USC § 434]

All mixed activities must be funded

through federal accounts

[11 CFR § 106.5(a)]

Building funds:

Donations to national/state party

building funds are exempt

[2 USC §431(8)(B)(viii)]

Bipartisan Campaign Reform Act

Role in tax-exempt fundraising:

Regardless of other soft money restrictions,

allows federal candidates/officials to make:

(a) unrestricted general solicitations on

behalf of 501(c)s involved in federal

elections where solicitation doesn’t specify

how funds will be used, unless

organization’s principal purpose is voter

registration in last 120 days of federal

election, GOTV, voter ID, or generic

activity where a federal candidate is on

ballot; and (b) solicitations for 501(c)s

involved in federal elections specifically

for such activities, or for general use by

501(c) whose principal purpose is those

activities, with solicitations only to

individuals, subject to a $20,000 per donor

limit [Sec. 101]

Codifies FEC regulations on disclosure of

all activity—federal and non-federal

[Sec. 103]

- Requires disclosure of “federal election

activities” by state/local party committees

including entities directly or indirectly

established, financed, maintained, or

controlled by either state/local party

committee and agent or by state/local

candidates and officials, subject to $5,000

threshold in aggregate activity per year

- Disclosure must include all amounts

raised and spent by special soft money

accounts that are allowed to be used for

“federal election activities” [Sec. 103]

Ends building fund exemption; clarifies

that state law is to govern exclusively in

regulating spending on state and local

party buildings [Sec. 103]

CRS-10

Relevant Previous Law

Bipartisan Campaign Reform Act

Issue Advocacy (Soft Money)

Definition of activity generally

triggering application of federal

election law—

Express advocacy: Supreme Court, in

Buckley v. Valeo (424 U.S. 1, 44

(1976)) and FEC v. Massachusetts

Citizens for Life (479 U.S. 238, 249

(1986)), generally construed federal

campaign law to reach only funds used

for independent communications by

non-political committees that include

express words of advocacy of election

or defeat of a clearly identified

candidate; prevailing view in lower

courts is that, generally, regulation of

such communications that do not

contain specific express words of

advocacy (also referred to as the

“magic words,” e.g., “vote for” or

“defeat”) is unconstitutional; FEC,

therefore, has had some difficulty in

enforcing its more encompassing

regulation, which includes a

“reasonable person” standard for

determining whether such

communications constitute “express

advocacy” [11 CFR §100.22]

Targeted communications:

Not defined

Disclosure:

Communications by non-political

committees that avoid explicit

advocacy language are outside purview

of, and hence not subject to, FECA

disclosure; but spending on such

activities may be disclosed if group is

“political organization” under Internal

Rev. Code (26 USC §527)

“Electioneering communication”:

Defined as a broadcast, cable, or satellite

advertisement that “refers” to a clearly

identified federal candidate, is made within

60 days of a general election or 30 days of

a primary, and, if for House or Senate

elections, “is targeted to the relevant

electorate”

- Exempts news events, “expenditures,”

“independent expenditures,” debates, and

others by FEC regulation

- Provides alternative definition of

“electioneering communication,” in the

event that the first definition is ruled

unconstitutional [based on FEC v. Furgatch

(807 F.2d 857 (9th Cir. 1987), cert. denied,

484 U.S. 850 (1987))]: i.e., broadcast,

cable, or satellite communication that

promotes/supports or attacks/opposes a

candidate (regardless of whether it

expressly advocates a vote for or against a

candidate), and is suggestive of no

plausible meaning other than an exhortation

to vote for or against a candidate; nothing

in provision alters 11 CFR 100.22(b), FEC

regulation defining express advocacy

[Sec. 201]

(In context of electioneering

communications prohibited by 501(c) and

527 corporations:)

“Targeted to the relevant electorate”

defined as a communication that can be

received by 50,000 or more persons in state

or district where Senate or House election,

respectively, is occurring [Sec. 201]

Requires disclosure to FEC of

disbursements for direct costs of producing

and airing “electioneering

communications” by any spender exceeding

$10,000 annual aggregate in such

disbursements, within 24 hours of the first

and each subsequent $10,000 amount

[Sec. 201]

CRS-11

Relevant Previous Law

Contents of disclosure:

Only for activities meeting express

advocacy standard and for FECAdefined political committees —

Statement of organization identifies

name of spender, sponsor (if any),

treasurer, custodian of books, and

banks

[2 USC § 433]

Periodic disclosure reports list

aggregate cash on hand, receipts,

expenditures, transfers, loans, rebates,

refund dividends, and interest (and, for

presidential candidates, public funds);

itemized identification on contributions

received and expenditures made of over

$200 per year, with name, address,

occupation, and principal place of

business of donor or recipient

Bipartisan Campaign Reform Act

For “electioneering communications”:

- Identification of spender, custodian of

books, and any entity exercising control

over activity

- principal place of business

- identification of disbursements of over

$200

- identification of donors of $1,000 or more

(either to a separate segregated fund

devoted exclusively to such activities, with

funds only from U.S. citizens or nationals

or permanent resident aliens, or, if no

separate segregated fund, to organization

itself)

- notation as to election and candidates to

which communications pertain [Sec. 201]

For persons other than political

committees, disclosure requirements

are triggered once independent

expenditures over $250 in a calendar

year are made [2 USC § 434]

Corporations and labor unions:

FECA bans union and corporate

general treasury spending to influence

federal elections, subject to Supreme

Court imposed express advocacy

standards [2 USC §441b(a)]

In FEC v. Massachusetts Citizens for

Life (MCFL) (479 U.S. 238, 259

(1986)), Court held that ban on

corporate general treasury spending

cannot be constitutionally applied to

non-profit political or ideological

corporations that do not accept

donations from for-profit corporations

and unions and whose members have

no economic incentive in the

organization’s political activities

As a result of court decisions,

communications by non-political

committees that avoid explicit

advocacy language are generally

outside purview of FECA regulation

Bans funding of “electioneering

communications” with funds from union or

certain corporate funds; but exempts

Internal Revenue Code §501(c)(4) or §527

tax-exempt corporations making

“electioneering communications” with

funds solely donated by individuals who

are U.S. citizens or nationals or permanent

resident aliens [Sec. 203] . . .

unless a communication is a “targeted”

communication, i.e., it was distributed from

a broadcaster or cable or satellite service

and is received by 50,000 or more persons

in state or district where Senate or House

election, respectively, is occurring

[Sec. 204]

CRS-12

Relevant Previous Law

Coordination—

FECA does not define “coordination”

or “coordinated activity” per se, but:

- Expenditures made in cooperation,

consultation, or concert with, or at the

request or suggestion of, a

candidate/agent shall be deemed a

contribution to the candidate

[2 USC §441a(a)(7)(B)(i)]

- Financing of dissemination,

distribution, or republication, in whole

or part, of any candidate-prepared

materials/broadcasts is considered an

expenditure, subject to relevant limits

[2 USC§441a(a)(7)(B)(ii)]

New FEC coordination rules define

“coordinated general public political

communications” as coordinated

communications concerning clearly

identified candidates, paid for by

persons other than candidates/parties,

including express or issue advocacy; a

communication will be considered

coordinated if: it is made at request or

suggestion of candidate or party;

candidate or party had control or

substantial decision-making authority;

or candidate or party engaged in

substantial discussion or negotiation

with those involved in paying for,

creating, producing, or distributing

communication

[11 CFR §100.23 (2001)]

Bipartisan Campaign Reform Act

Treats an “electioneering communication”

that is coordinated with a candidate, agent,

or party as a contribution to and

expenditure by candidate or party

[Sec. 202]

CRS-13

Relevant Previous Law

Broadcast attribution:

Federal Communications Act imposes

general requirement that political

radio/TV ads include notice of who

paid for ads [47 USC § 317]

Bipartisan Campaign Reform Act

(See discussion under “Advertising”

section)

FCC regulations further require paid

TV political ads and other matters

involving the discussion of

controversial issues of public

importance to provide “true identity” of

sponsor “with letters equal to or greater

than four percent of the vertical picture

height that air for not less than four

seconds” and require broadcasters to

disclose extent to which any “film,

record, transcription, talent, script, or

other material” related to an ad was

furnished to the broadcaster in

connection with the airing of a political

advertisement or other matter involving

the discussion of a controversial issue

of public importance

[47 CFR § 73.1212]

Broadcast public inspection files:

When political ad was paid for by a

corporation, committee, association, or

unincorporated group, FCC regulations

also require broadcaster to maintain

records of group’s governing personnel,

available for public inspection

[47 CFR § 73.1212]

Requires broadcasters to maintain and

make available for public inspection

records of broadcast time requests by

candidates or by other entities whose

messages relate to political matters of

national importance, including messages

about a legally qualified candidate, a

federal election, or a legislative issue of

public importance; requires records to

include: whether request was accepted; rate

charged; date and time message aired; class

of time purchased; identification of

candidate and office, election, or issue

referred to; and identity of purchaser,

including officers of any non-candidate

entity [Sec. 504]

CRS-14

Relevant Previous Law

Bipartisan Campaign Reform Act

FEC Disclosure

Availability of reports:

- Requires all reports filed

electronically to be posted on FEC Web

site within 24 hours of receipt

[2 USC §434(a)(11)(B)]

- Requires paper reports to be available

for public inspection at FEC within 48

hours of receipt [2 USC §438(a)(4)]

Central website:

No provision

Standardized software:

No provision

Filing schedule for candidates:

Principal campaign committees of

candidates must file quarterly, preelection, and, for general, post-election

reports in election years, and semiannual reports in non-election years;

presidential candidates with actual or

expected contributions or expenditures

over $100,000 must file monthly in

presidential election years [2 USC

§434(a)]

Filing schedule for parties:

Non-candidate committees (including

parties) may file: (a) quarterly, preelection, and, for general, post-election

reports in election yrs., and semiannual reports in non-election years; or

(b) monthly reports [2 USC §434(a)]

Requires all reports filed with FEC to be

posted on Internet and available for

inspection within 48 hours, or 24 hours if

filed electronically [Sec. 501]

Requires FEC to maintain central Web site

of all publicly available election-related

reports [Sec. 502]

Requires FEC to develop and provide

standardized software for filing reports

electronically, and requires candidates’ use

of such software [Sec. 306]

Requires candidates to file quarterly reports

in non-election years [Sec. 503]

Requires national party committees to file

monthly reports in all years [Sec. 503]

CRS-15

Relevant Previous Law

Bipartisan Campaign Reform Act

FEC Enforcement

Criminal penalties:

For knowing and willful violations

involving contributions/expenditures of

$2,000 or more per year: a fine

equaling the greater of $25,000 or

300% of amount involved or up to one

year in prison, or both

[2 USC §437g(d)(1)(A)]

Statute of limitations:

Three years for criminal violations of

FECA [2 USC §455(a)]

Sentencing guidelines:

No provision

Penalties for violating ban on

contributions made in the name of

another:

No specific penalties

Increases criminal penalties for knowing

and willful violations involving

contribution/expenditure/donation amounts

aggregating from $2,000 to less than

$25,000 in a year: a fine under Title 18

(USC) or up to one year in prison, or both;

for knowing and willful violations

involving amounts aggregating $25,000 or

more: a fine under Title 18 or up to five

years in prison, or both [Sec. 312]

Changes to five years, for criminal

violations of FECA [Sec. 313]

Directs U.S. Sentencing Commission to

promulgate guidelines and make legislative

or administrative recommendations

regarding penalties for violating federal

election law, per specified considerations:

reflect serious nature; enhancement for

foreign national violation, large number of

illegal transactions, large dollar amount of

violations, misuse of government funds, or

intent to gain federal government benefits;

assure consistency with FEC regulations;

account for aggravating or mitigating

circumstances; and comply with purposes

of 18 USC §3553(a)(2) [Sec. 314]

Civil: Imposes penalties, for knowing and

willful violations, of between 300% of

violation amount and the greater of $50,000

or 1000% of violation amount

Criminal: For knowing/willful violations

in amounts of over $10,000, imposes

penalties of two years in prison for up to

$25,000 violation amount, or fine of

between 300% of violation amount and the

greater of $50,000 or 1000% of violation

amount, or prison and fine [Sec. 315]

CRS-16

Relevant Previous Law

Bipartisan Campaign Reform Act

Advertising

Candidate appearance in ads:

No content requirements for lowest unit

rate (LUR) ads

Sponsor Identification:

Public political advertisements, from

expenditures by any person, including

express advocacy, or those containing

contribution solicitations, must state

clearly who paid for communication

and whether a candidate authorized it

[2 USC §441d]

Requires federal candidate broadcast ads

that are sold at lowest unit rate and that

include direct reference to opponents to

include candidate photo or image on TV

and a statement of candidate approval

(printed on TV and spoken by candidate on

radio) [Sec. 305]

- Adds requirement for sponsor

identification by political committees for

any public political advertising (including

“electioneering communications”)

- Requires specific minimal standards to

enhance visibility of such identification in

the communication, including an audio

statement of candidate or sponsor approval

in TV and radio ads; also in TV ads,

requires a written statement of

responsibility that appears in a clearly

readable manner, with a reasonable degree

of color contrast, for at least four seconds,

and is conveyed in an unobscured, fullscreen view of candidate/sponsor (or with

image and voice-over thereof) [Sec. 311]

Foreign Money

Prohibits direct or indirect

contributions or anything of value, or

their solicitation, from foreign

nationals, in connection with election

to any political office; exempts

permanent resident aliens

[2 USC §441e]

- Bans direct or indirect contributions from

foreign nationals (including soft money), or

their solicitation or receipt, or any promise

to make such donations, in connection with

any U.S. election, to a national party

committee, or for any expenditure,

disbursement, or independent expenditure

for an “electioneering communication”

(retains permanent resident alien

exemption) [Sec. 303]

- Clarifies that ban does not apply to U.S.

nationals [Sec.317]

Miscellaneous

Fundraising on government

property:

Bans solicitation or receipt of

contributions, as defined by FECA, in

any room or building used by federal

officials or employees to discharge

official duties [18 USC § 607]

Bans solicitation or receipt of

contributions, including soft money, from

anyone or by federal officials, while in any

federal government building used to

discharge official duties [Sec. 302]

CRS-17

Relevant Previous Law

Inaugural committees:

Donations to presidential inaugural

committees are not considered

contributions under FECA [see, e.g.,

FEC Advisory Opinion 1980-144]

Fraudulent misrepresentation:

Bans candidates’ fraudulent

misrepresentation on a matter that is

damaging to other candidates or parties

[2 USC §441h]

Contributions by minors:

No different treatment for minors and

adults

Bipartisan Campaign Reform Act

- Requires FEC disclosure of over-$200

donations to presidential inaugural

committees within 90 days of event

- Bans foreign national donations

[Sec. 308]

- Prohibits fraudulent misrepresentation in

the solicitation of campaign funds

- Bans knowing and willful participation in

conspiracy to engage in such violations

[Sec. 309]

Bans contributions to candidates and

donations to parties by individuals 17 years

of age and younger [Sec. 318]

Invalidated by Supreme Court in its

December 10, 2003 ruling in McConnell

v. FEC

GAO Study:

No provision

Expedited review:

Provides for expedited judicial review

by appropriate district court, certifying

all constitutional questions, to the court

of appeals for the circuit involved,

sitting en banc [2 USC § 437h] (Prior

to 1988 amendments, FECA also

provided expedited, direct appeal to

U.S. Supreme Court) [P.L.100-352]

Directs GAO to study and report to

Congress statistics for and effects of public

funding systems in AZ and ME [Sec. 310]

- Provides that if any action is brought for

declaratory or injunctive relief challenging

the constitutionality of the Act, it shall be

filed in U.S. District Court for D.C. and

heard by a 3-judge court; a copy of the

complaint shall be delivered promptly to

the Clerk of the House and the Secretary of

the Senate; a final decision shall be

reviewable only by direct appeal to the U.S.

Supreme Court (notice of appeal to be filed

within 10 days, and jurisdictional statement

to be filed within 30 days); expedited

consideration to be provided by both

courts; and right of intervention provided

to House/Senate Members[Sec. 403(a),(b)]

- Expressly provides that any Member of

Congress may challenge the Act’s

constitutionality, seeking declaratory or

injunctive relief [Sec. 403(c)]

CRS-18

Relevant Previous Law

Partial Invalidity:

If any provision of the Act, or its

application to any person or

circumstance, is held invalid, the

validity of the remainder and its

application to other persons and

circumstances shall not be affected.

[2 USC § 454]

—

Bipartisan Campaign Reform Act

Severability:

If any provision of the Act or its

amendments, or its application to any

person or circumstance, is held

unconstitutional, the remainder of the Act

and its amendments, and its application to

any person or circumstance, shall not be

affected by the holding [Sec. 401]

Effective date:

- Generally: Nov. 6, 2002, unless otherwise

provided [Sec. 402]

- For all hard money contribution limit

changes: Jan. 1, 2003 [Secs. 307; 402]

- Severability; effective dates; regulations;

judicial review: upon enactment [Sec. 402]

- Runoffs, recounts, and contested elections

arising from Nov. 5, 2002 elections to be

conducted under same rules as other 2002

elections, including those on soft money

spending by state/local parties [Sec. 402]

Transition rules for soft money:

- Prior to Jan. 1, 2003, parties may spend

soft money raised before effective date to

retire outstanding debts and obligations in

connection with elections held through

Nov. 5, 2002, provided that no soft money

is used to repay hard money debts

- At no time after effective date may

national parties use soft money to defray

costs of construction or purchase of a party

office building or facility [Sec. 402]

—

Regulations:

Requires FEC to promulgate regulations

within 90 days of enactment to carry out

provisions of Title 1 (on soft money) and

within 270 days to carry out other

provisions of Act [Sec. 402]

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