Campaign Finance Enforcement

DisclaimerDisclaimer: This presentation is intended as a : This presentation is intended as a general interpretive resource only. Where important general interpretive resource only. Where important

legal rights are concerned, you should consult with legal rights are concerned, you should consult with your own attorney to be fully and properly advised.your own attorney to be fully and properly advised.

Committee ABCs

ACTIVE and OPEN committees are responsible for TIMELY FILING

ALL campaign finance reports, according to the state’s filing schedule

Failure to file campaign finance reports timely results in a civil penalty of $50 per day, up to $1,000

CEB Committee Inventory• Create database to track campaign finance issues

– Create columns:• Committee Name• Address• Contact Info

– E-mail is a great (and cheap!) way to communicate

• Dates of each filing• Open/closed

Organizing campaign finance information in one source is helpful in minimizing long-term efforts to mail notices, administratively disband, enforce law, etc.

• Candidates (CFA-1)• Political Action Committees (CFA-2)• Regular Party Committees (CFA-3)

Types of Committees

Candidates (CFA-1)

• Candidate Committees– Must be opened within ten days of raising/spending $100– No fundraising?

• Must still open a committee no later than NOON February 12, 2016, if candidate in primary

• Candidate must sill meet state’s reporting schedule, even if $0 balance

Candidates CANNOT WAIT until filing a declaration of candidacy before opening a campaign finance committee, if they want to start raising money!

IC 3-9-1-3

Candidates (CFA-1)• What happens when candidate doesn’t open a

committee?– CEB MUST open a campaign finance committee for

delinquent candidates by February 29, 2016• File a CFA-1 on the candidate’s behalf

– Use contact information from CAN-2 to complete the top portion– Enter office sought– Name candidate treasurer AND chairperson of the committee– No signature required

» Might write a note in the “Office Only” space the committee was administratively opened on XX date

Candidates (CFA-1)

• Who is required to file a CFA-1?– Candidates on the Primary Election Ballot whose

office sought salary is minimum of $5,000• What if salary is less than $5,000?

– If candidate raises/spends $500, must open committee (CFA-1) within ten days

Political Action Committees (CFA-2)

• PACs file with either CEB or IED, depending on intent– Intending to contribute to a legislative or

statewide candidate?• File with IED

– Intending to contribute to local candidates only?• File with CEB

EXAMPLE: Hoosiers Supporting Mickey Mouse Fan Club

Regular Party Committees (CFA-3)

• ALL county party committees MUST have a committee on file with either CEB or IED, depending on intent– Intending to contribute to legislative or statewide

candidate?• File with IED

– Intending to contribute ONLY to local candidates?• File with CEB

EXAMPLE: Monroe County Democratic Central Committee

What is a CFA-11?

• Notes large contributions of at least $1000 in a specific time period before each election– $1000 is aggregate, by contributor, in the period

• ex. Joe gives candidate A $500 on October 11 and $500 on November 3, candidate A must filed CFA-11 noting $1,000 aggregate by November 7 (Nov. 5 is Saturday)

– Supplemental filing period for 2016• April 9, 2016 – May 1, 2016• October 10, 2016 – November 6, 2016

CFA-11 filings ONLY apply to candidates!

CFA-11: Large Contributions

• May be submitted by FAX or hand-delivered• Filed within 48 hours of receipt during the

large contribution periods– Late filing? Civil penalty schedule ($50/day)

is the same for all delinquent reports

Sometimes candidates will submit a CFA-11 outside of the reporting period; that’s OK! Accept but remind candidate it’s not necessary to file supplemental reports outside of the reporting period

Delinquency Notice Requirements• Annual Report (Jan. 20, 2016)

– CEB must send delinquency notice (see Form 1 in tool kit) by February 19, 2016

• PrePrimary Report (Apr. 15, 2016)– CEB must send notice by May 15, 2016

• PreElection Report (Oct.21, 2016)– CEB must send notice by November 20, 2016

CEB is NOT legally required to proactively remind candidates to file campaign finance reports on time; however, to minimize your enforcement costs and effort, consider implementing a notice process.

Penalty Schedule

• Delinquent Reports– $50 per day, up to $1,000

• Starts at noon (12:00:01) on filing deadline day– Includes all days (weekends and weekdays)

• Defective Reports– $10 per day, up to $100

• CEB must give committee 5 days to cure defective report before assessing fine

– 5 days after receipt of notice of defective report, delivered by certified mail

Administrative Disband• CEB can disband a committee if all of the following are true:

– No reports filed in 3 years– Less than $1,000 cash on hand; and– No debts to or from the committee

• Steps1. Must decide to take action by January 312. Notice sent to last known address of both chairman and treasurer3. At hearing, board makes specific findings4. May waive any penalty previously imposed 5. Must publish notice of action in paper

This is a discretionary action for the CEB; not a requirement (IC 3-9-1-12)

CF Enforcement Proceedings

• Applicable Law– Indiana Open Door Law (IC 5-14-1.5)– Administrative Orders and Procedures Act

(AOPA) (4-21.5-3)– Indiana Election Law (IC 3-9-4)

Open Door Law Requirements

• Public Notice Requirement– Meeting notice must be posted 48 hours before

(excluding weekends and holidays)• Notice should include date, time & location

– See Form 2 in tool kit

– Notices must also be mailed, emailed or FAXed to media, if requested in writing by Jan. 1 of the year

– Agenda, if used, must be posted at entrance prior to meeting

Open Door Law Requirements

• Generally, notice is not required to be published in newspaper– Publication of notice is not required for a

campaign finance enforcement hearing unless the meeting also contains agenda items that require published notice

AOPA Requirements• Administrative Orders & Procedures Act (AOPA)

applies to finance hearings– Requires Individual Notice to Committee

• At Least 5 Days Notice (excluding Sat, Sun, and holiday) – (IC 4-21.5-3-20)

• Content of Notice a) Time, Place, and Nature of Hearing; b) Possibility of default for not appearing, and c) Contact information (IC 4-21.5-3-20(c))

» See form 3 in tool kit

– Issue Order • See form 5 in tool kit

IC 3-9-4-17(j)

AOPA Requirements

• AOPA requires testimony of witnesses be given under oath

– Any CEB member may administer • See Form 4 in tool kit

– CEB may subpoena persons and papers

• Proceedings may be informal without resorting to rules of evidence applicable to courts

IC 4-21.5-3-26(b) | IC 4-21.5-3-25(b)

Enforcement Proceeding Overview

• CEB Must:– Conduct a public fact-finding hearing

• Give “notice” (see form 3 in tool kit)• Provide an “opportunity to be heard”

– Vote in public meeting whether to waive, reduce, or assess penalty

• Vote must be unanimous to waive or reduce penalty

– Adopt written order (see form 5 in tool kit)

• Parties have 30 days to appeal decision– Requires civil case to be filed in circuit court

Enforcement Proceeding

• Delinquency Notice (see form 1 in tool kit)– Audit for late reports– Mail notice not later than 30 days after deadline

• Does not need to be sent via certified letter• Refer

• Hearing Notice – See form 3 in tool kit– Refer to AOPA requirements

Hearing Overview• CEB presents evidence against committee• Committee given opportunity to defend• CEB may ask questions• CEB can waive or reduce penalty by unanimous vote

if “unjust under the circumstances” – IC 3-9-4-17; IC 3-9-4-19 – See Form 5 in tool kit

• CEB must vote to assess penalty

Fines• Committees MUST* be assessed a fine based on the

schedule outlined in law– $50 per day, up to $1,000– *IC 3-9-4-17 uses “shall” in some subsections, but “may” in other

subsections when it comes to the Board imposing a civil penalty• CEB should read this statute carefully to decide under which circumstances they will

impose a civil penalty

Waiving/Reducing Fines• Any reduction or waiver of a CF fine MUST be

unanimous!– CEB may want to consider adopting a uniform, non-

discriminatory waiver/reduction policy• CEB policy could set a different fine schedule IF person/campaign

representative attends the hearing• Still allows the CEB some discretion to further reduce or waive

fines for committees with extenuating circumstance like a death or hospitalization

Proxies and Collecting Fines• Proxy

– An individual may serve as proxy if a member has a conflict of interest and is unable to remain impartial

• Should be filed ahead of meeting• See form 6 in tool kit

• Collecting Fines– Non-reverting finance account– Funds available, with the approval of the county council, to

supplement funds appropriated for any election-related purposes

– County attorney may be able to assist you with the collection of unpaid fines

IC 3-6-5-4.5 | IC 3-9-4-17(j)(k)

Practical Advice for Candidates• File on time even if you are unsure if accurate or

incomplete– You will avoid fine– You will be able to amend

• Close the Committee if you are defeated or you are finished with it– Committees do not automatically close!

• Remain open until final/disband report is filed– Open committees must adhere to the state’s campaign

finance reporting schedule• Until closed, subject to fines if deliquent!

Questions?