FY 2003 FEC Budget Request

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This document is part of the Congressional Justification Budget Request for FY 2003 presented to the Congress Pursuant to GPRA and OMB A-11 by the Federal Election Commission on February 25, 2002.


APPENDIX I

ADMINISTRATIVE FINE PROGRAM

FEBRUARY 25, 2002

Submitted to Congress/OMB

 

The Commission’s Administrative Fine Program was designed to improve timely disclosure of campaign finance activity through improving the timely filing of disclosure reports. It was also designed to automate and regularize the enforcement of the filing provisions, and to remove late and non-filer cases from the more costly and time-consuming FEC enforcement process. It was further designed to regularize and standardize the collection of fines and penalties for late and non-filers. Finally, the program was designed to increase the ability of the Commission to process and close more enforcement actions with a higher percentage of cases resolved with substantive Commission action instead of dismissal without action.

From FY 1995 (when the Enforcement Priority System, or EPS, was installed) through FY 2000, the Commission averaged 205 case closures each fiscal year. In FY 2001, the Commission closed a total of 520 enforcement matters or compliance actions, including cases in the Administrative Fine Program and the ADR program. This represents a 154% increase. The FEC anticipates that the Administrative Fine Program will continue to enable the Commission to close more enforcement cases and to assign OGC enforcement resources to more complex, substantive matters.

The FEC enforcement goals, established in the FEC Strategic Plan and the Annual Performance Plans, seek to activate more enforcement cases and to reduce the number of cases dismissed without substantive action. These goals build upon the FY 2000 record when the FEC closed over 70% of the cases processed with some form of substantive action and over 50% of the average monthly caseload was actively being processed. Since 1995 all enforcement cases are triaged through the Enforcement Priority System (EPS), and cases are held in the Central Enforcement Docket (CED) until activated.

The Administrative Fine Program has allowed the Commission to expand the scope and reach of the enforcement process, by streamlining the case resolution process for late and non-filers, and by expediting the resolution of cases that might not have been activated under the EPS, and might never have reached substantive resolution under the formal enforcement process. This is in response to both recommendations from the PricewaterhouseCoopers (PwC) review of the FEC and a desire by the Commission to improve the timeliness of FEC compliance actions. The Administrative Fine Program was also congressionally authorized in the Commission’s appropriations legislation.

In addition to increasing the number of cases closed, the Administrative Fine Program expedites and streamlines the enforcement process for late and nonfiler cases. This program has improved compliance with the FECA in terms of the timely filing of reports. For example, only 11% of the 2000 Year-End Reports were filed late, while 24% and 22% of the 1998 and 1996 Year-End Reports, respectively, were filed late. Because timely filing is key to prompt disclosure of campaign finance information, the administrative fine program apparently has enhanced timely disclosure of campaign finance data.

Since the inception of the program, 311 cases have been placed on the public record, and civil money penalties totaling almost $400,000 have been collected as of January 31, 2002. During this time frame the Commission found Reason to Believe (RTB) in 461 cases, made 395 final determinations, and received 310 payments. To date the Commission has processed 158 challenges in the Administrative Fine Program, completing 111 of those challenges, with the civil penalty upheld in 80 of the cases (19 cases had the civil penalty reduced and 12 cases had the civil penalty waived.) As of January 31, 67 cases had been referred to Treasury, with 3 appeals filed and pending by the respondents. Treasury had collected payments in 7 cases.

The Office of Administrative Review (OAR) is staffed with two persons, and is assisted by staff in the Reports Analysis Division (RAD) where reports are reviewed and the compliance referral process is initiated. RAD staff had initial responsibility for the late and non-filing compliance processes, and assists OAR in tracking filers and identifying late and non-filers. As a result of the Administrative Fine program, RAD was given two additional FTE starting in FY 2000 and 2001.

As a result, with slightly less than 2 FTE in direct work on the program, supplemented with about 2 FTE in RAD support, a total of 429 RTB findings and 363 final determinations were made in FY 2001. In addition, 148 challenges were received, with 79 of those completed by the close of FY 2001. By all measures: the increase in timely filings; the streamlining of the late and non-filer compliance process; and the expansion of the scope of the FEC enforcement program; the Administrative Fine program has been successful.