D. Solution: Require Use Of PAC ID Number
It is the FEC's and the candidate's job to make the connection between the two names clear to citizens unfamiliar with PAC acronyms. All PACs should be required to include their PAC ID number on their checks, a remedy that could easily be implemented. This number should be used anytime the PAC is identified, providing three methods, including the name and address on the check, to connect the money with the contributor. By doing so, the identity of the PAC will never be in question and it will be clear to the public the source of each candidate's money.
The House electronic filing program should also be modified to accept a PAC name only if the matching ID number is also included. Once the FEC receives the information, an automated program could be used to compare the data with the data received from the PACs. When the numbers do not match, a list could be generated, which would then be sent to both candidates and PACs.
E. Problem: Senate Contribution Information Not Readily Available
In 1999 the House moved to implement electronic filing. This is a very important step that allows the candidates to use a program disseminated by the FEC to file their reports. The electronic form is standardized and should enable the FEC to correct some of the problems highlighted in POGO's first report.
The Senate, however, continues to use an antiquated paper system to file their often handwritten reports. Without electronic filing in the Senate, the public loses. The public cannot readily find this information because it is not in an easily accessible location or form nor is it made public in a timely manner. For this investigation, POGO had to pay for the FEC to print out each file individually at a cost of $1330 for thousands of pages.
Paper filing carries with it an added opportunity for mistakes to be made. For example, in the last election, before electronic filing was enacted, the totals on the FEC's website did not match the paper filings summary page numbers for Representatives David Smith (D- WA), Jerry Weller (R-IL), and David Weldon (R-FL). This problem was created by the incorrect key punching of data by the FEC. The numbers were grossly inaccurate. For example, the FEC under-reported Smith's summary pages by approximately $47,000, Weller's by approximately $60,000, and Weldon's by $50,000.
Solutions: Senate Should File Electronically
All Senatorial candidates should file electronically, in order to remedy the problems previously outlined.
F. Problem: PAC's Do Not Report Returned Checks
"We've never taken a PAC check since I first ran in 1992, and yet because we send them back and they don't give the rapid response you want them to give, we have some opponent that's demagoging there, knows darn well I don't take them, but, gee, he can find something in the record, because we had to file a notice that it was there, that we've sent it back... But anyhow, that's the kind of thing about which I think your [POGO's] suggestions would be very helpful." Representative Stephen Horn (R-CA)
The current regulations state that PACs are required to report to the FEC when the candidate refuses to accept the contribution. If the FEC compared the PACs' information to that of the candidates', it would be apparent that the PACs frequently fail to comply with this requirement5.
On the FEC's public website, Representatives and Senators who do not take PAC money are nearly always shown to have accepted contributions. This information has been used by opponents who have then charged that PAC money was accepted by their non-PAC taking opponents. Or the reverse can happen, as in Lautenberg's case, where a candidate is credited for accepting no PAC money when in fact he did.
Solution: Enforce Laws Requiring The Reporting Of Returned Checks
The FEC should enforce existing laws requiring the reporting of returned checks and reject filings from PACs or candidates which incorrectly omit returned checks. The FEC would be required to cross-reference the data for this solution to be possible.
G. Problem: Partial Amendment Filings Create Confusion
When House candidates were filing on paper, it was necessary that they only resubmit the parts of their reports with updates or corrections to simplify key-punching for the FEC. However this created confusion when attempting to follow the money because it was unclear which parts of each filing were new.
With the current plan to file electronically, candidates still will not be required to submit total updates. Confusion will continue to result from this policy. For example, when all of Senator John Breaux's (D-LA) amendments are incorporated into his total, his filings come closer to matching his PAC-reported contributions. The FEC, however, did not include the candidate's mid-year report amendment numbers in his total, which resulted in the large discrepancy of $57,075.
Solution: Require The Re-Submission Of Entire Reports When Filing Amendments
With the electronic filing system, the confusion could easily be cleared up by requiring candidates to resubmit the entire filing when amending the originals. Because of the electronic filing system, no extra work would be necessary for the FEC staff and it would greatly increase the clarity of the information.
Background
POGO's previous report outlined the many problems with the FEC's oversight. POGO's ten common sense reforms functioned as a spring board from which change could move forward.
POGO commends the House for requiring candidates to electronically file reports, and the Senate for beginning to report information directly to the FEC. The FEC is to be commended for implementing a number of the reforms indicated in POGO's 1998 report including grouping data by two- and six-year campaign cycles for both the House and the Senate.
In 1999, POGO initiated a rulemaking within the FEC to enact the other recommended reforms which could be implemented internally. This move was met with resistance from inside the FEC despite strong public support and was subsequently denied.
Within the rulemaking, POGO requested that the FEC utilize checks and balances which would compare PAC and candidate databases, standardize PAC names, eliminate duplicate entries within both databases, enforce the law stating that all PACs report returned checks, and require PACs to notify all candidates of "in-kind" contributions.
Unfortunately, the FEC has not acted on these reforms to date, nor does the Senate have any plans to implement electronic filing.
Investigation Methodology
To begin the investigation POGO asked FECInfo, a company run by former FEC officials, to compile data about candidates in the 1997-1998 filing cycle. This cycle was chosen over the 1998-2000 cycle to eliminate the likelihood that candidates had not yet filed all of their amended statements. This data was obtained from the FEC's FTP database website, which is open to the public but only accessible by computer specialists.
In the PAC-reported contributions made to candidates, the FEC does not separate political party PAC money from non-party PAC money. On the candidate-reporting form, however, the FEC does differentiate between party money (section 11b) and non-party money (section 11c). Therefore POGO combined section 11b with section 11c in order to compare like-quantities.
From this data, POGO only chose to analyze candidates who were incumbents. This subset of data was further refined to identify those candidates who had the largest discrepancy between PAC-reported contributions and candidate-reported receipts.
From there, POGO investigated the filings of the two Democrats and two Republicans in both the House and the Senate with the largest such discrepancies who were still in Congress. The Senators are Barbara Boxer (D-CA), John Breaux (D-LA), Michael Crapo (R-ID), and Don Nickels (R-OK). The Representatives are Richard Gephardt (D-MO), David Smith (D-WA), David Weldon (R-FL) and Gerald Weller (R-IL). Additionally, POGO investigated the filings of all candidates who, according to the FEC, had taken no PAC money for that period. In the Senate these are Joseph Biden (D-DE), John Edwards (D-NC), Herb Kohl (D-WI), Frank Lautenberg (D-NJ), and Patrick Leahy (D-VT). In the House these are William Archer (R-TX), Jay Dickey (R-AR), James Demint (R-SC), James Greenwood (R-PA), Steve Horn (R-CA), James Leach (R-IA), Martin Meehan (D-MA), Marshall Sanford (R-SC), Ralph Regula (R-OH), and Zach Wamp (R-TN).
Once POGO had these names, all of their filings were retrieved. The Representatives' information was downloaded from the FEC's website. POGO then printed all of the reports for these candidates for 1997 and 1998. For the Senate side, POGO requested the filings from the FEC.
POGO also took all of the information for each candidate for the 1996-1998 election cycle from the PAC side of the FEC website and converted it into Excel tables.
Once POGO had compiled all of the information, the data was manually compared and then double-checked.
POGO then compiled a list of contributions which could not be found. This information was included in a letter sent out to the candidates requesting clarification of these missing contributions and asking the candidates to respond by a given date. POGO made follow up calls to these offices, seeking further clarification if necessary. POGO received responses from four candidates.
Finally, POGO compiled the macro statistics to show how these seemingly minor problems, when combined, wreak havoc on the campaign finance-reporting system.
