Campaign Finance: Legislative Developments and Policy Issues in the 110th Congress

Campaign Finance: Legislative Developments and
Policy Issues in the 110 Congress
Updated October 22, 2008
R. Sam Garrett
Analyst in American National Government
Government and Finance Division

Campaign Finance: Legislative Developments and
Policy Issues in the 110th Congress
During the 110th Congress, the House and Senate’s campaign finance work has
overlapped in three areas. First and most significantly, a lobbying and ethics law
enacted in September 2007, the Honest Leadership and Open Government Act
(HLOGA; P.L. 110-81, which was S. 1), contains some campaign finance provisions.
Second, P.L. 110-433 (H.R. 6296) will extend the Federal Election Commission’s
(FEC) Administrative Fine Program (AFP) until 2013. Third, the Committee on
House Administration and the Senate Rules and Administration Committee have held
hearings on automated political telephone calls (also known as “robo calls” or “auto
calls”), a subject that is related to campaign finance.
Otherwise, the House and Senate have largely focused on different campaign
finance issues. Specifically, the House has passed three bills, not passed by the
Senate, containing campaign finance provisions. First, H.R. 3032 would allow
candidates to designate an individual to disburse remaining campaign funds if the
candidate dies. Second, H.R. 2630 would restrict campaign and leadership political
action committee (PAC) payments to candidate spouses. Third, a provision in the
House-passed version of an appropriations bill (H.R. 3093) would have prohibited
spending Justice Department funds on criminal enforcement of the Bipartisan
Campaign Reform Act (BCRA) “electioneering communication” provision.
However, the language was not included in the FY2008 consolidated appropriations
law (P.L. 110-161).
Similarly, the Senate has largely considered legislation not considered in the
House. The Senate’s campaign finance activity has also been confined largely to
hearings. S. 223, which would require electronic filing of campaign disclosure
reports was reported from the Rules and Administration Committee but has not
received floor consideration. During the spring and summer of 2007, the committee
also held hearings on coordinated party expenditures (S. 1091) and congressional
public financing legislation (S. 1285).
Non-legislative items are also noteworthy. Following a Senate impasse over
four nominees to the Federal Election Commission (FEC) during the first session of
the 110th Congress, the Commission lacked the quorum necessary to make major
policy decisions between January and June 2008. Senate confirmations of five
nominees on June 24, 2008, restored the FEC to full capacity. FEC rulemakings are
ongoing or expected in response to legislative activity, and Supreme Court rulings
addressing electioneering communications (Federal Election Commission v.
Wisconsin Right to Life, Inc.) and the “Millionaire’s Amendment” (Davis v. Federal
Election Commission).
This report will be updated in the event of other significant legislative or policy
developments in the 110th Congress.

Brief Historical Overview...........................................1
FEC Nominations and the Commission’s Operating Status.................1
Overview of the Nominations Dispute.........................2
Campaign Finance Legislation in the 110th Congress......................3
Campaign Finance Provisions in HLOGA...........................4
Bundling .................................................4
Campaign Travel..........................................6
The Administrative Fine Program.................................7
Senate Activity on Other Campaign Finance Legislation...............8
House Activity on Other Campaign Finance Legislation...............8
Hearings on Automated Political Calls.............................9
Other Recent Developments........................................10
Electioneering Communications.................................10
FEC Rulemaking.........................................11
“Millionaire’s Amendment”....................................12
Conclusion and Analysis...........................................13

Campaign Finance: Legislative
Developments and Policy Issues in the
110 Congress
Brief Historical Overview
Federal campaign finance law emphasizes limits on contributions, restrictions
on funding sources, and public disclosure of information about fundraising and
spending. These goals and others are embodied in the 1971 Federal Election
Campaign Act (FECA), which remains the cornerstone of the nation’s campaign
finance law.1 Major FECA amendments (in 1974, 1976, and 1979) expanded the
presidential public-financing system and placed limits on campaign contributions and
ex penditures. 2
After these post-Watergate efforts to reduce the risk or appearance of corruption,
campaign finance received relatively little legislative attention until the late 1990s.
The Bipartisan Campaign Reform Act of 2002 — also known as “BCRA” or
“McCain-Feingold” for its principal Senate sponsors — constituted the first major
change to the nation’s campaign finance laws since 1979.3 Among other points,
BCRA banned large corporate and union donations to political parties (soft money)
in federal elections and restricted certain political advertising preceding elections
(electioneering communications). Much of the policy activity since that time has
emphasized implementing BCRA, particularly at the FEC and in the courts.
FEC Nominations and the
Commission’s Operating Status
Due to the loss of its quorum between January and June 2008, the FEC was
unable to execute some of its core functions, including rulemaking to implement

1 2 U.S.C. 431 § et seq.
2 The Supreme Court struck down mandatory spending limits, except those accepted
voluntarily in exchange for public campaign financing, in its 1976 Buckley v. Valeo
decision. See CRS Report RL30669, The Constitutionality of Campaign Finance
Regulation: Buckley v. Valeo and Its Supreme Court Progeny, by L. Paige Whitaker.
3 On BCRA, see P.L. 107-155; 116 Stat. 81. For additional information, see CRS Report
RL31402, Bipartisan Campaign Reform Act of 2002: Summary and Comparison with
Previous Law, by Joseph E. Cantor and L. Paige Whitaker. Cantor is now retired from CRS.
Contact R. Sam Garrett with questions regarding Mr. Cantor’s portfolio.

campaign finance law.4 On June 24, 2008, the Senate confirmed five nominations
to the agency.5 Together with a sixth commissioner who continues to serve in
holdover status, the FEC is now back at full strength. The new Commission held its
first open meeting on July 10, 2008. At that meeting, Donald McGahn was
unanimously elected chairman. Steven Walther was unanimously elected vice
Pending issues facing the Commission include rulemaking to implement
portions of the Honest Leadership and Open Government Act of 2007 (HLOGA,
discussed later in this report), pending enforcement cases and advisory opinion
requests, and administering the presidential public campaign financing program.6
The Commission may also need to respond to ongoing litigation surrounding BCRA.
Overview of the Nominations Dispute. During the first session of theth

110 Congress, the Senate considered four nominations — those of Robert D.

Lenhard (D), David M. Mason (R), Steven T. Walther (D), and Hans A. von
Spakovsky (R) — to the six-seat FEC. Mason originally began serving at the
Commission in 1998 and had been re-nominated. Lenhard, Walther, and von
Spakovsky were serving in recess-appointments at the agency. Amid controversy
surrounding the von Spakovsky nomination in particular, and over whether the
nominations should be considered separately or as a group, the Senate declined to
confirm or reject any of the nominations.
The three recess appointees’ terms subsequently expired at the end of the firstth
session of the 110 Congress, leaving the agency with just two sitting commissioners
(Mason (R) and Ellen L. Weintraub (D)).
The stalemate over FEC nominations continued with few developments between
January and April of 2008. In April, Lenhard requested that his nomination be
withdrawn.7 In May 2008, in addition to withdrawing Lenhard’s nomination,8
President Bush withdrew the Mason and von Spakovsky nominations. This series
of events left the Walther nomination pending and Weintraub in holdover status.

4 For additional discussion, see CRS Report RS22780, The Federal Election Commission
(FEC) With Fewer than Four Members: Overview of Policy Implications, by R. Sam
5 “Confirmations,” Congressional Record, daily edition, vol. 154 (June 24, 2008), p. S6096.
6 For additional information on presidential public financing, see CRS Report RL34534,
Public Financing of Presidential Campaigns: Overview and Analysis, by R. Sam Garrett.
On convention financing, which is an element of the presidential public financing program,
see CRS Report RL34630, Federal Funding of Presidential Nominating Conventions:
Overview and Policy Options, by R. Sam Garrett and Shawn Reese.
7 Matthew Murray, “Democratic FEC Nominee Withdraws; Reid Blasts White House,” Roll
Call, April 14, 2008, at [

22987-1.html ?type=pf].

8 On von Spakovsky, see, for example, Matthew Murray, “FEC May Be Back in Business
Soon,” Roll Call, May 19, 2008, p. A1.

Also in April 2008, the President nominated Cynthia L. Bauerly (D), Caroline
C. Hunter (R), and Donald F. McGahn II (R) to the Commission. The Senate Rules
and Administration Committee held a confirmation hearing on the Bauerly, Hunter,
and McGahn nominations on May 21, 2008. The committee favorably reported all
three nominations on May 22, 2008. Also on May 22, the White House announced
the President’s intention to nominate Matthew S. Petersen (R) to the Commission.9
The Rules and Administration Committee did not hold a confirmation hearing on
Petersen (a staffer on the committee).
On June 24, 2008, the Senate confirmed Bauerly, Hunter, McGahn, Petersen,
and Walther. The five new commissioners joined Ellen Weintraub, who continues
to serve at the FEC in holdover status. McGahn was elected the Commission’s
Between January and June 2008, the FEC’s operating status was significant
because, under FECA, at least four Commissioners must vote affirmatively to
approve, among other things, agency rules, enforcement decisions, and advisory
opinions.10 The Commission also could not implement legislation without at least
four Commissioners in office.11
Campaign Finance Legislation
in the 110th Congress
Legislative activity regarding campaign finance has occurred on two fronts
during the 110th Congress. First, and most notably, the Honest Leadership and Open
Government Act (HLOGA) contains some campaign finance provisions, but the law
is primarily devoted to lobbying and ethics. HLOGA and the AFP extension were
the only legislation changing campaign financing policy to become law during the
110th Congress. Second, various other bills that emphasize campaign finance have
been the subject of committee or floor action, but none have become law. Overall,
approximately 50 bills that would affect campaign finance policy have been
introduced in the 110th Congress.12 The following discussion provides additional
details on campaign finance bills that have been the subject of committee action or
floor votes during the 110th Congress.

9 White House, Office of the Press Secretary, “Personnel Announcement,” May 22, 2008,
at [].
10 CRS Report RS22780, The Federal Election Commission (FEC) With Fewer than Four
Members: Overview of Policy Implications, by R. Sam Garrett.
11 This assumes that at least four Commissioners could reach agreement.
12 This total is approximate because of varying ways in which “campaign finance” could be
classified. The total does not include FEC appropriations legislation. On that topic, see the
FEC portion of CRS Report RL33998, Financial Services and General Government
(FSGG): FY2008 Appropriations, Garrett L. Hatch, Coordinator.

Campaign Finance Provisions in HLOGA
S. 1, which became P.L. 110-81 on September 14, 2007, contains two
significant campaign finance provisions: one related to bundling and another related
to travel aboard private aircraft.13 Both were seen as sources of potential abuse in the
past. The law also prohibits Member attendance at presidential convention events
in their honor if registered lobbyists or “private entit[ies]” that hire lobbyists pay for
the events.14 It also requires additional disclosure about lobbyists’ contributions
(exceeding $200) to political committees, presidential inaugural committees, and
presidential libraries.15
FEC rulemaking (discussed below) is required to implement the bundling and
campaign travel portions of HLOGA (sections 204 and 601 respectively). Although
the travel section took effect upon the bill’s enactment, the FEC in late 2007 adopted
rules providing its interpretation of the law. HLOGA requires the FEC to promulgate
regulations implementing the bundling provision within six months of enactment
(March 14, 2008), although the lack of a quorum prevented the agency from doing
Bundling. “Bundling” refers to a campaign fundraising practice in which an
intermediary — often a lobbyist — either receives contributions and passes them to
a campaign or is credited with soliciting contributions that a campaign receives
directly. Before HLOGA became law, although FEC regulations on “earmarked”
contributions technically restricted bundling, they were viewed as largely
inapplicable to designated campaign fundraisers, including certain lobbyists. In
response, HLOGA requires disclosure of bundling activities by registered lobbyists.
Specifically, political committees (candidate committees, party committees, and
PACs) must report to the FEC the name, address, and employer of each Lobbying
Disclosure Act (LDA)-registered lobbyist “reasonably known” to have made at least
two bundled contributions totaling more than $15,000 during specified six-month
reporting periods.17 HLOGA only requires disclosure of bundling by registered
lobbyists — not other fundraisers. Therefore, HLOGA will provide more
transparency than was previously available about which lobbyists arrange bundled
contributions. However, it does not mandate disclosure of bundled contributions that
do not meet the time and monetary thresholds discussed above or require information
about bundling by non-lobbyists.

13 See also CRS Report RL34166, Lobbying Law and Ethics Rules Changes in the 110th
Congress, by Jack Maskell. That report provides additional discussion and analysis.
14 121 Stat. 753; 121 Stat. 767. Exceptions exist for presidential or vice-presidential
15 121 Stat. 743.
16 121 Stat. 744-121 Stat. 745.
17 121 Stat. 744. On LDA, see 2 U.S.C. § 1601 et seq.

FEC Rulemaking. The FEC issued a notice of proposed rulemaking (NPRM)
on the bundling issue on October 30, 2007.18 Most notably, and consistent with
HLOGA, the FEC’s proposed rules would require political committees to report
bundled contributions if the same source arranged or was credited with arranging two
or more contributions totaling at least $15,000 during a six-month period. (The FEC
also solicited comments about an alternative proposal for quarterly reporting.)19 The
proposed rules would also add the term “lobbyist/registrant PACs” — those
committees “established or controlled” by registered lobbyists — to existing
examples of political committees subject to FECA regulation and bundling
disclosure. 20
Despite some specificity, the NPRM did not address how all reporting issues
would be resolved. Rather, throughout the document, the Commission posed several
questions about a range of issues, such as how widely disclosure requirements should21
apply and how committees should determine whether contributions were bundled.
Parts of the NPRM suggested that bundling disclosure could apply beyond lobbyists
per se. Specifically, the FEC asked whether Congress intended for bundling
disclosure to apply only to contributions arranged by registered lobbyists (who would
be known as “lobbyist/registrants” under proposed rules), or also to fundraising by
other actors. The latter could include non-lobbyist employees at lobbying22
organizations or hosts of fundraisers at which bundling occurs. Several interested
parties, including Members of Congress, submitted comments responding to the
A September 17, 2008, FEC hearing explored many of the issues raised in the
NPRM. In particular, discussion and debate among Commissioners and witnesses
(election lawyers and interest-group representatives) addressed how bundling
activities should be reported to the FEC, which activities should be reported, and how
fundraising should be reported if several individuals are involved in fundraising at
a single event. The FEC has yet to announce final bundling rules. As noted
previously, HLOGA requires the FEC to issue bundling rules within six months of
the law’s enactment (the relevant deadline would have been March 14, 2008).
However, the agency was unable to act between January and June 2008 due to the
loss of its quorum. On July 28, 2008, FEC Chairman Donald F. McGahn reportedly
stated that bundling regulations could not realistically be promulgated in time to
affect the 2008 elections.23 If it chose to do so, Congress could legislate bundling-
disclosure details that would normally be left to the FEC.

18 Federal Election Commission, “Reporting Contributions Bundled by Lobbyists,
Registrants and the PACs of Lobbyists and Registrants,” 72 Federal Register 62600,
November 6, 2007. Although the Commission approved the NPRM on October 30, it was
not published in the Federal Register until November 6, 2007.
19 Ibid., pp. 62606-62607.
20 Ibid.
21 Ibid., pp. 62603-62604.
22 Ibid., pp. 62602-62603.
23 Kenneth P. Doyle, “Already Too Late to Act on ‘Bundling’ Rule Affecting 2008 Contest,
FEC Chairman Says” Daily Report for Executives, July 29, 2008, p. A-6.

Campaign Travel. HLOGA restricts campaign travel on private,
non-commercial aircraft. Before HLOGA became law, political committees were
permitted to reimburse those providing private aircraft at the rate of first-class travel
as long as commensurate first-class commercial service were available for the route24
flown. Reimbursement at non-discounted coach or charter rates was required if
commensurate first-class service were unavailable on that route. Under the new law,
Senators, candidates, and staff may continue to travel on private aircraft only if they
reimburse the entity providing the aircraft for the “pro rata share of the fair market
value” for rental or charter of a comparable aircraft. Those amounts could be well
above the old first-class rate that applied to most flights before the law took effect.
Unlike their Senate counterparts, House Members, candidates, and staff are
“substantially banned” from flying aboard private, non-commercial aircraft, as the25
law precludes reimbursements for such flights.
FEC Rulemaking. Under rules adopted by the FEC on December 14, 2007,
all Senate, presidential, and vice-presidential campaign travel must be reimbursed at
the “pro-rata share” of the charter rate, regardless of the route flown.26 Consistent
with HLOGA, political committees related to House of Representatives candidates
are prohibited from making reimbursements for campaign travel aboard private
aircraft, which essentially bans such travel. The “pro-rata share” reimbursement
standard for Senate, presidential, and vice-presidential travel is based on the number
of candidate committees (i.e., candidate campaigns) represented on a flight. If more
than one candidate is represented on a flight, reimbursement would be shared among
the relevant candidate committees.
Specifically, political committees must provide reimbursement for all campaign
travelers’ shares of the “normal and usual charter fare or rental charge for travel on
a comparable aircraft or comparable size.”27 These requirements also apply to travel
on behalf of PACs, including leadership PACs, and party committees, although
candidate committees represented on the flight would be responsible for covering
costs for those travelers.28 Travel aboard government aircraft must also be
reimbursed at the per-person charter rate or at the rate the government entity

24 Campaigns must reimburse service-providers for travel (or other services) so that vendors
do not make, or campaigns do not receive, prohibited “in-kind” contributions that are
excessively expensive, come from prohibited sources, or both.
25 121 Stat. 774; and CRS Report RL34166, Lobby Law and Ethics Rules Changes in the

110th Congress, by Jack Maskell.

26 The new rules have not been published in the Federal Register. The rules are available
on the Commission’s website. See “Draft Final Rule on Campaign Travel,” FEC open
meeting agenda document no. 07-94, at [].
27 On the quoted material see FEC, “Draft Final Rule on Campaign Travel,” p. 7.
28 The FEC reportedly chose this arrangement out of concern that party and PAC officials
providing travel reimbursement could indirectly subsidize candidate travel, which HLOGA
sought to restrict (telephone consultation between Duane Pugh, Deputy Director,
Congressional Affairs, FEC, and R. Sam Garrett, January 10, 2008). Conversely, under the
new rules, candidates are arguably subsidizing party or PAC travel. The FEC could clarify
this issue when it considers a related “explanation and justification” document, which is
discussed in the text of this report.

providing the aircraft specifies for “private travel.”29 Certain exceptions exist for
travel aboard aircraft owned or leased by a candidate or an immediate family
member, but reimbursement for campaign travel is nonetheless required.30
Before publishing the final travel rules in the Federal Register, the Commission
must approve an “explanation and justification” (E&J) document summarizing the
public comments the FEC received and the agency’s reasoning in interpreting the
law. These documents typically provide additional information about how the
Commission intends to enforce the new rules and what those rules mean in practice.
Although the FEC approved final travel rules in December 2007, it did not formally
consider an E&J document. That document cannot be approved without affirmative
votes from at least four Commissioners. The matter remains pending.
The Administrative Fine Program
P.L. 110-433, which originated as H.R. 6296 (Brady), will extend until 2013 the
FEC’s authority to conduct the Administrative Fine Program (AFP). The House
passed the bill on July 15, 2008, under suspension of the rules and by voice vote.
The Senate passed the bill by unanimous consent on October 2, 2008. President
George W. Bush signed the bill into law on October 16, 2008.
The AFP sets standard penalties for routine financial-reporting violations and
requires fewer resources than the Commission’s full enforcement process. Since the
program’s inception in FY2000, the FEC has processed more than 1,600 enforcement
cases, and assessed more than $3.1 million in fines, through the AFP.31 Revenues
from the program are deposited into the U.S. Treasury and do not directly benefit the
Congress first granted authority for the AFP in the Treasury and General
Government Appropriations Act of 2000 and has extended the program three times.32
Because AFP legislative language has always included a “sunset” date, the program
is not permanent. The previous authorization to conduct the AFP would have expired
on December 31, 2008.33 Although AFP extensions have been traditionally handled
through the appropriations process, H.R. 6296 was a stand-alone measure that
amended FECA.

29 FEC, “Draft Final Rule on Campaign Travel,” pp. 8-9.
30 Ibid., pp. 9-10.
31 The precise numbers as of May 2008 were 1,629 and $3,157,682, respectively. The FEC
and Treasury Department have been unable to collect the full amount due in some cases.
This information comes from a telephone consultation between the author and Duane Pugh,
director, legislative affairs, FEC, June 5, 2008.
32 On the program’s creation, see P.L. 106-58; 113 Stat. 476. Extensions occurred in 2001
(115 Stat. 555), 2004 (118 Stat. 359), and 2005 (119 Stat. 2493-2494).
33 119 Stat. 2493-2494. See also 2 U.S.C. § 437g(a)(4)(C).

Senate Activity on Other Campaign Finance Legislation
Other than HLOGA and H.R. 6296, no campaign finance measures have passed
the Senate during the 110th Congress. However, the Rules and Administration
Committee has held hearings on four bills. First, on March 28, 2007, the committee
held a hearing on S. 223 (Feingold), which would require Senate campaign
committees (including candidate committees and party committees) to file campaign
finance disclosure reports electronically. Currently, Senate campaign committees are
the only federal political committees not required to do so. The bill has not received
floor consideration, despite attempts to bring it up by unanimous consent. Second,
on April 18, 2007, the committee considered S. 1091 (Corker), which would lift
existing limits on coordinated expenditures that political parties may make on behalf
of candidate campaigns. S. 1091 remains in committee. Third, on June 20, 2007, the
committee held a hearing on S. 1285 (Durbin), which proposes a voluntary system
to publicly finance Senate campaigns.34 That bill also has not been subject to
additional legislative action. Finally, the committee considered S. 2624 (Feinstein)
at a February 27, 2008, hearing on automated political telephone calls. That topic is
discussed below in more detail. The bill has not been subject to additional legislative
House Activity on Other Campaign Finance Legislation
The House has passed three bills (in addition to lobbying reform measures and
H.R. 6296) containing campaign finance provisions. First, H.R. 3093, the House
version of the FY2008 Commerce, Justice, Science, and Related Agencies
appropriations bill, contained an amendment sponsored by Representative Pence that
would have prohibited spending funds for criminal enforcement of BCRA’s35
electioneering communication provision (discussed below). However, the measure
was not included in companion Senate legislation or the FY2008 consolidated36
appropriations law.
A second House bill, H.R. 2630 (Schiff), would prohibit candidate campaign
committees and leadership PACs from paying candidate spouses for campaign work.
The bill would also require disclosure of certain payments to other family members.
It would not affect spouses working for other campaigns (e.g., as political
consultants). Another provision in the bill would hold candidates personally liable
for violations of the new restrictions (if they knew violations occurred). That
proposal marks a departure from existing FECA requirements, which largely hold

34 CRS Report RS22644, Coordinated Party Expenditures in Federal Elections: An
Overview, by R. Sam Garrett and L. Paige Whitaker; and CRS Report RL33814, Public
Financing of Congressional Elections: Background and Analysis, by R. Sam Garrett,
provide additional discussion of coordinated party expenditures and public financing of
congressional elections, respectively.
35 H.R. 3093 as passed by the House, Sec. 711.
36 The consolidated appropriations bill is H.R. 2764, which became P.L. 110-161.

campaign organizations and treasurers (not candidates) responsible for compliance.37
H.R. 2630 passed the House on July 23, 2007, without a committee hearing. It has
not been considered in the Senate.
Third, the House passed H.R. 3032 (Jones, NC) on July 15, 2008, under
suspension of the rules and by voice vote. The bill would permit candidates to
designate to the FEC an individual (or a backup) to spend campaign funds if the
candidate dies. Upon the candidate’s death, only the designee would have authority
to disburse campaign funds. Currently, campaign treasurers have authority over
campaign funds, as is discussed below. The bill would not relieve treasurers from
FEC reporting responsibilities. The bill could alleviate the potential for asset
disputes following candidate deaths, provided that designees would be more faithful
to candidates’ wishes than would be treasurers. To that end, H.R. 3032 also permits
candidates to provide instructions for disbursing campaign funds in the event of their
H.R. 3032 would provide more candidate control over campaign assets than
currently exists. FECA is largely silent on candidate responsibility for campaign
operations, including spending. In fact, treasurers — not candidates — are legally
responsible for disbursing campaign funds (and for most FEC compliance) regardless
of whether the candidate is living or dead.38 FECA also does not specify a role for
candidates in campaign financial decisions. Accordingly, although H.R. 3032 would
provide a legal mechanism for circumventing the treasurer after a candidate dies, the
bill would not provide additional remedies for such action while the candidate is
living. This may be a minor distinction due to candidates’ de facto influence over
their campaigns, despite FECA’s general silence on the issue. Nonetheless, if
Congress chose to enact H.R. 3032 and felt it were important to create parity in
candidates’ abilities to direct campaign spending in life and after death, it could
amend FECA to create a clearer candidate role over campaign funds regardless of
whether the candidate is living or dead. Congress might also provide explicit
permission in FECA for candidates to hire and fire campaign treasurers.
Hearings on Automated Political Calls
Also during the 110th Congress, House and Senate committees have held
hearings on automated political telephone calls (also known as “robo calls” or “auto
calls”). This issue is related to campaign finance because FEC reporting and
disclaimer requirements apply to many such calls. Legislation aimed at restricting
automated political calls also often references or would amend FECA. Another CRS
report provides additional detail.39 Several bills introduced in the 110th Congress
would address automated political calls in some way, but none has been reported
from committee or received floor consideration.

37 2 U.S.C. § 432; 434.
38 See, for example, 2 U.S.C. § 432(a).
39 CRS Report RL34361, Automated Political Telephone Calls (“Robo Calls”) in Federal
Campaigns: Overview and Policy Options, by R. Sam Garrett and Kathleen Ann Ruane.

The Committee on House Administration, Subcommittee on Elections, held an
oversight hearing on automated political calls on December 6, 2007. In addition to
providing background information about automated calls practices, Members and
witnesses at the hearing considered whether, or if, automated calls could be
constitutionally restricted. Some Members also emphasized the value of official
(franked) automated calls to arrange telephone-based town hall meetings. The Senate
Rules and Administration Committee also held a hearing on the calls, and related bill
S. 2624 (Feinstein), on February 27, 2008. Discussion at that hearing emphasized
voter and candidate frustration with the calls, and whether the calls could be
constitutionally restricted.
Other Recent Developments
Electioneering Communications
BCRA prohibits corporate and union treasury funds from financing political
advertising known as electioneering communications.40 Under BCRA, electioneering
communications are broadcast, cable, or satellite political advertising aired within 30
days of a primary election (or convention or caucus) or 60 days of a general election
(or special or runoff election) that refers to a “clearly identified” federal candidate
and is targeted to the relevant electorate.41 Before BCRA became law, such
advertising was often viewed as thinly veiled electioneering by corporations and
unions, although some observers contended that the advertising reflected sponsors’
policy positions.
On June 25, 2007, the U.S. Supreme Court issued a 5-4 decision in Federal
Election Commission v. Wisconsin Right to Life, Inc. (WRTL II).42 In brief, the case
considered whether the electioneering communication provision prohibited the group
Wisconsin Right to Life (WRTL) from paying for advertising, mentioning a Senate
candidate, it intended to run during the 2004 election cycle. The Court held that the
electioneering communication provision was unconstitutional as applied to the
WRTL ads. Shortly thereafter, the FEC announced that it would revise its
electioneering communications rules.

40 2 U.S.C. § 441b(b)(2).
41 See Title II of BCRA at 116 Stat. 88 and 2 U.S.C. § 434(f)(3)(A)(I).
42 For additional detail and a legal analysis of the case, see CRS Report RS22687, The
Constitutionality of Regulating Political Advertisements: An Analysis of Federal Election
Commission v. Wisconsin Right to Life, Inc., by L. Paige Whitaker.

FEC Rulemaking. The FEC held hearings on its electioneering
communications rulemaking on October 17-18, 2007.43 The Commission approved44
final rules in December 2007. Although corporate and union treasury funds are
generally prohibited in federal elections, the new rules allow payments for certain
electioneering communications that focus on public policy issues rather than electing
or defeating federal candidates.45 As with other electioneering communications,
certain information about spending on, and donations received for, these
advertisements must be reported to the FEC.46 The advertisements must also contain
disclaimers identifying the person or organization responsible for the electioneering
The new rules also require that electioneering communications paid for with
corporate or union treasury funds must meet three “safe harbor” criteria intended to
ensure that the advertising is not directly aimed at electing or defeating candidates.
Specifically, the advertising may not: (1) mention “any election, candidacy, political
party, opposing candidate, or voting by the general public” or (2) take a position on
a candidate’s “character, qualifications, or fitness for office.” Third, the
advertisement must either “[focus] on a legislative, executive or judicial matter or
issue,” such as urging the public or candidates to adopt a policy position, or propose
“a commercial transaction” (e.g., an advertisement for a candidate’s business).48

43 The hearings focused on two alternative rules: one that would have allowed corporate and
union-funded electioneering communications but would have maintained FEC reporting and
disclaimer requirements, and another that would have exempted corporate and union-funded
electioneering communications from FEC reporting and disclaimer requirements. On the
two alternative proposals, see Federal Election Commission, “Electioneering
Communications,” 72 Federal Register 50271, August 31, 2007. The hearings also
addressed whether revisions to the electioneering communications rules required changes
to the Commission’s regulations on “express advocacy,” which explicitly calls for election
or defeat of federal candidates. In particular, debate focused on 11 C.F.R. 100.22(b).
44 Federal Election Commission, “Electioneering Communications,” 72 Federal Register

50271, December 26, 2007, p. 72899.

45 Under the new rules, advertising funded by corporate and union treasury funds must be
“susceptible of no reasonable interpretation other than as an appeal to vote for or against a
clearly identified Federal candidate,” the same standard the Court articulated in WRTL II.
See ibid., p. 72914.
46 Ibid., pp. 72900-72901; pp. 72911-72913. Under the rules, spending on electioneering
communications that exceeds $10,000 in a calendar year must be reported to the FEC.
Donations exceeding $1,000 to fund such advertising, received since the start of the year
preceding the reporting period, must also be reported.
47 Ibid., pp. 72900-72901; see also 11 C.F.R. 110.11(a). The word “disclaimer” appears as
a term of art in FEC regulations, although its definition in that context generally differs from
the literal one. Rather than renouncing responsibility (as the literal definition of
“disclaimer” implies), disclaimers required by FEC regulations generally signal that the
sponsoring committee was, in fact, responsible for a communication. On the other hand,
disclaimers on communications that are not authorized by principal campaign must note that
candidates were not responsible for the communication.
48 Ibid., p. 72903; p. 72914.

Overall, the new rules permit corporations and unions to fund issue-oriented
advertising in ways that were prohibited by BCRA. For those who view issue
advertising as thinly veiled electoral advocacy, the rules could be seen as a loophole
that allows otherwise prohibited corporate and union money to influence elections
— the same concern that motivated BCRA’s electioneering communications
provision that was held unconstitutional as applied to the WRTL ads. On the other
hand, the FEC’s explanatory statement accompanying the new rules suggests that
even general references to elections or candidates (e.g., election dates or a party
name) could void the safe harbor protection for corporate and union spending.49 If
the Commission reaches such a determination in future enforcement cases,
electioneering communications funded by corporate or union treasury funds would
have to be strictly related to public policy issues, although they could be aired during
election periods. Precise implications of the new rules are likely to become clearer
over time, as advertisers test the rules during the 2008 election cycle and beyond and
as the FEC considers future advisory opinions and enforcement cases. Additional
litigation, which has been common following BCRA rulemakings, is also possible.
“Millionaire’s Amendment”
On June 26, 2008, a 5-4 majority of the U.S. Supreme Court declared the
“Millionaire’s Amendment” unconstitutional in Davis v. Federal Election
Commission.50 (Another CRS product provides a legal analysis of the case.51) The
Millionaire’s Amendment, which was enacted in BCRA, permitted congressional
candidates facing certain self-financed opponents to receive larger campaign
contributions than would normally be permitted. In some cases, political parties
could also make unlimited coordinated expenditures on behalf of campaigns facing
self-financed opponents.
The FEC issued a public statement on July 25, 2008, noting that the “Court’s
analysis in Davis precludes enforcement of the House provision of the [Millionaire’s
Amendment] and effectively precludes enforcement of the Senate provision as
well.”52 Accordingly, the amendment’s reporting requirements and increased
contribution limits no longer apply. The Commission will initiate a rulemaking to
comport with the ruling, but “will no longer enforce the Amendment.”53

49 Ibid., p. 72903.
50 554 U.S. ___ (2008); see 2 U.S.C. § 441a-1 and 2 U.S.C. § 441a(I).
51 CRS Report RS22920, Campaign Finance Law and the Constitutionality of the
“Millionaire’s Amendment”: An Analysis of Davis v. Federal Election Commission, by L.
Paige Whitaker.
52 Federal Election Commission,” Public Statement on the Supreme Court’s Decision in
Davis v. FEC,” press release July 25, 008, at
[http://www.fec.go v/ press/press2008/220080725millionaire.shtml].
53 Ibid.

On October 2, 2008, the Commission approved a notice of proposed rulemaking
in light of Davis.54 Essentially, the FEC proposes to repeal its rules originally
promulgated to implement the Millionaire’s Amendment language in BCRA
(particularly rules currently at 11 C.F.R. § 400). Repealing these and other relevant
rules would clarify that the Millionaire’s Amendment is no longer applicable in
House and Senate elections. Such a repeal would be consistent with the
Commission’s stated practice of no longer enforcing the Amendment. The public
comment period on the proposed repeal of the FEC’s Millionaire’s Amendment rules
will close on November 21, 2008.
Conclusion and Analysis
HLOGA represents the most significant legislative development related toth
campaign finance during the 110 Congress. More than 50 other campaign finance
bills have been introduced in the 110th Congress, but few have received major
legislative attention. Other significant campaign finance developments have
occurred away from Capitol Hill, particularly at the FEC and in the federal courts.
FEC activity has focused on rulemakings in response to recent congressional
activity, particularly regarding HLOGA. The campaign travel rules are relatively
straightforward and consistent with the new lobbying and ethics law. Those rules,
however, could be clarified by an E&J statement that has yet to be considered. The
bundling and electioneering communications rulemakings (the latter was undertaken
in response to the Supreme Court’s ruling in WRTL II) are more complicated and, in
some cases, less clear. Although the proposed bundling rules are consistent with
HLOGA’s content, the many questions and regulatory alternatives posed in the
NPRM and at the September 2008 FEC hearing suggest that the agency is still
considering how to implement that section of the law. Similarly, although the
Commission has already adopted final electioneering communications rules, what
those rules mean in practice will depend on how the FEC decides to pursue future
enforcement and advisory cases. These issues could also be revisited now that
additional Commissioners are in office.
The long-term effect of the FEC’s inability to consider major policy questions
between January and June 2008 remains to be seen.55 It is clear, however, that the
agency faces a substantial rulemaking and enforcement backlog in the short term.
The fact that four of six Commissioners are new to the agency could also delay some
The HLOGA rulemaking is perhaps the most prominent one now facing the
FEC. The absence of bundling rules means that certain disclosure required under
HLOGA is not occurring, nor can it occur until the agency tells political committees
how to report their bundled contributions. The schedule set forth in HLOGA would

54 Federal Election Commission, “Increased Contribution and Coordinated Party
Expenditure Limits for Candidates Opposing Self-financed Candidates,” 73 Federal
Register 62224, October 20, 2008.
55 As noted previously, two Commissioners did remain in office during the 2008
“shutdown,” and staff continued doing work that did not require Commission approval.

have facilitated partial reporting for the 2008 cycle. It now appears, however, that
bundling disclosure as envisioned in HLOGA will not take effect until the 2010
Even if bundling-disclosure rules were in place now, however, they would not
necessarily alter fundraising practices. Indeed, as was discussed at the September 17
FEC hearing, HLOGA requires more transparency about bundling, but does not
restrict the practice. In addition, and as noted previously, although the HLOGA
travel rules also have yet to be finalized via publication in the Federal Register,
implementation of those rules is perhaps a less pressing matter because the relevant
portion of the law took effect upon enactment, whereas the FEC bundling-disclosure
provisions in HLOGA require Commission action to take effect.
Overall, recent changes in campaign finance policy have been incremental, as
has been the case since FECA became law in the 1970s. Congress generally did not
focus on campaign finance legislation in the immediate aftermath of FECA and
BCRA, perhaps because passing those laws had required substantial momentum that
was difficult to replicate in the short term. That pattern could also hold following
HLOGA, although most of that bill was related to lobbying and ethics rather than
campaign finance. Even if Congress decides not to undertake major legislative
activity on campaign finance in the near future, non-legislative activity is likely to
keep campaign finance before the public and lawmakers. This is particularly true
given the high-profile 2008 elections and heavy spending that has and will
accompany those contests. Litigation, and the FEC’s response, is also likely to
continue shaping the policy environment. These events demonstrate that the
evolution of campaign finance policy occurs not only in Congress, but also at the
FEC, in the courts, in other federal agencies, and, perhaps most of all, in campaigns
themselves. As long as those campaigns continue, Congress will be faced with
questions about how to regulate political money.