FEC SEEKS COMMENT ON DRAFT POLICY
REGARDING PARTY COMMITTEE FUND-TRANSFERS

WASHINGTON – The Federal Election Commission is seeking public comment through November 14 on a proposed statement of policy regarding party committee transfers of non-federal funds.

            Due to the suspension of fundraising activities by some party committees after the terrorist attacks of September 11, the Commission is considering exercising its discretion by not pursuing apparent violations of the 60-day time limit for party committee transfers of non-federal funds (“soft” money) to pay for the non-federal share of allocable expenses.

            Commission regulations (11 CFR 106.1 and 106.5) allow party committees to defray the costs of activities that relate to both federal and non-federal elections by allocating the costs between their federal and non-federal accounts, so long as they pay an amount equal to or greater than the federal portion of these expenses with funds that are permissible (“hard” money limits) under the Federal Election Campaign Act (FECA).

            Party committees allocate these expenses by paying the entire amount of the expense from a federal account or allocation account, and transferring funds from a non-federal account to cover the non-federal portion of the allocable expenses, with the regulations establishing a time period, or “window,” during which these non-federal transfers may be made.   The regulations stipulate these funds may not be transferred more than 10 days before or more than 60 days after the payments for which they are designated are made.

            In many instances, party committees plan and execute allocable activities based, in part, on the expectation that they will subsequently receive non-federal funds that can be transferred to their federal or allocation accounts before the expiration of the 60-day time.

            Since some party committees voluntarily suspended their fundraising activities in the immediate aftermath of the unprecedented events of September 11, the Commission recognizes that some party committees may not have sufficient funds in their non-federal accounts to make transfers to their federal accounts or allocation accounts in a timely manner – within 60 days of when the committee pays the allocable expenses for which those funds would be transferred.

            Under the policy being considered, the Commission would not pursue an untimely party committee transfer made to cover the non-federal share of an allocable expense paid between August 27, 2001 and November 1, 2001, if the transfer is made no later than December 31, 2001, and is fully disclosed on the party committee’s year-end report.  Alternatively, the Commission would not pursue an untimely party committee transfer made to cover the non-federal share of an allocable expense paid between August 27, 2001 and December 31, 2001, if the transfer is made no later than March 1, 2002, and is fully disclosed on the party committee’s applicable report.

            The public is invited to comment on any aspect of the policy being considered by the Commission, including its scope and duration, or on any other circumstance arising out of the attacks of September 11 that should be addressed.  After reviewing the comments, the Commission will issue a final Statement of Policy.

            Comments must be submitted on or before November 14, 2001.  All comments should be addressed to Rosemary C. Smith, Assistant General Counsel, and must be submitted in either written or electronic form.  Written comments should be sent to the Federal Election Commission, 999 E. Street, NW, Washington, DC 20463.  Faxed comments should be sent to (202) 219-3923, with printed follow-up.  Electronic mail comments should be sent to transfers@fec.gov. Those sending comments by electronic mail must include their full name, electronic mail address and postal service address within the text of their comments.  The Commission will make every effort to have public comments posted on its web site within 10 business days of the close of the comment period.

            Full text of the proposed policy statement may be found on the FEC’s website at http://www.fec.gov/agenda/notice2001-15/notice2001-15.pdf.

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