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FEC Lays Ground Work for Compliance Actions

The Federal Election Commission has issued an interpretive ruling to make it absolutely clear that it will go after those candidates, including members of Congress, who do not fully disclose the ultimate recipients of payments.

The Commission appears to have gone out of its way to clarify a basic requirement of their regulations. This may be in response to an audit or investigation where a committee, member of Congress, or respondent may have argued the requirement wasn’t clear enough. In such cases, the Commission usually highlights the topic and provides more education on the issue. Then the Commission starts to go after those who do not comply and imposes larger civil penalties.

The Commission approved an
Interpretive Rule on Reporting Ultimate Payees of Political Committee Disbursements.
The rule clarifies the Commission’s interpretation of the regulatory requirement that political committees report the full name and address of each person to whom they make expenditures or other disbursements aggregating more than $200 per calendar year, or per election cycle for authorized committees, and the date, amount and purpose of such payments, in three situations. The three situations are:

1. when a political committee reimburses an individual who advanced personal funds to pay committee expenses aggregating more than $200 to a single vendor;
2. when a political committee pays a credit card bill that includes a charge of more than $200 for a single vendor; and
3. when a candidate uses personal funds to pay his or her authorized committee’s expenses that aggregate more than $200 to a single vendor without receiving reimbursement.

An example regularly seen over the years is when an authorized campaign committee reports making a disbursement of several thousand dollars to a member of Congress, and simply lists “reimbursement” for purpose of disbursement, and without any other details. The Commission is left wondering if there were any ultimate vendors who were paid more than $200 and should have been identified. Now, if violations are found through audits or investigations, or other means, the penalties will be larger.

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