[EL] Technology to facilitate compliance

Sun Aug 14 17:52:08 PDT 2011

This is a fascinating discussion for someone like me who uses campaign
finance data and writes software (albeit not very well most of the
time). In terms of the FEC filings, even campaigns with experience get
things wrong in the electronic filings. The most recent round of
presidential filings saw Ron Paul and Rick Santorum's campaigns had
trouble recording expenditure data - they both properly indicated memo
entries but neither campaign tied them back to the original
transactions in the way that the instructions dictate. In Santorum's
case, there was nothing at all to tie them back except for the fact
that they were filed immediately after the original transaction (which
is easy for a person to see but hard for a computer to figure out).
Certainly this causes additional work for the FEC and anyone else who
might be trying to work with those filings.

Derek Willis
dwillis at gmail.com

On Sun, Aug 14, 2011 at 8:29 PM, Smith, Brad <BSmith at law.capital.edu> wrote:
> By the way, to give some sense of things, in recent years the typical
> Fortune 500 company PAC has spent approximately $1 million per year on
> administration, or roughly half of its total take. I think we can safely
> assume that for smaller PACs, the administrative costs are an even higher
> percentage of the amount raised and spent.
>
> Bradley A. Smith
> Josiah H. Blackmore II/Shirley M. Nault Designated Professor of Law
> Capital University Law School
> 303 E. Broad St.
> Columbus, OH 43215
> (614) 236-6317
> http://www.law.capital.edu/Faculty/Bios/bsmith.asp
> ________________________________
> From: law-election-bounces at department-lists.uci.edu on behalf of Smith, Brad
> Sent: Sun 8/14/2011 8:24 PM
> To: Volokh, Eugene; law-election at department-lists.uci.edu
> Subject: Re: [EL] Technology to facilitate compliance
>
> Well, first it is the forms. It's not that they are computerized or not -
> it's that they exist. Filling in the data is not that hard - that's not the
> problem. Rather, it is figuring out where the data go, and keeping track of
> the underlying numbers.  The forms are typically quite complex, and we
> forget that most people are not used to dealing with forms and legaleze
> instructions. (Some might recall the John Stoessel episode in which he asked
> "reform" spokespersons to fill out forms, which most couldn't do; a couple
> studies, one, I believe, by Jeffrey Milyo, found that people couldn't
> complete the forms correctly even with direct monetary incentives to do so.
> If you want to try, go to the FEC website, pull up some basic forms, and see
> how you do). It is very difficult for an amatuer to know how to classify
> various expenditures and income, for example, and especially what to do with
> even minor asset sales and the like. The laws also make the book-keeping for
> routine old time fundraising - selling ice cream at the county fair, passing
> the hat at a rally, speech, or gathering; selling some t-shirts, etc -
> virtually impossible. This points up the second problem, knowing and
> complying with the underlying rules. Third, it is the formal accounting
> systems that must be established to comply with the law. Fourth, it is the
> threat of legal liability and fines for mistakes. The more heavily reliant a
> campaign is on volunteers, the more likely it is that one or more of those
> volunteers will make mistakes subjecting the campaign to liability. Thus
> volunteers are in some cases outright discouraged, and in others kept on a
> tight leash - they can lick envelopes, for example, but are discouraged or
> prohibited from asking for funds or arranging events.
>
> I estimate overall that a very small, ongoing campaign that wants to be
> relieved of these duties should budget $3000 to $5000 a month for
> professional fees. For many small campaigns, even that amount will be far
> too low. Add in the fear of violations, and that stomps out a lot of
> activity. Of course, a single complaint can raise that cost dramatically,
> even if the complaint ultimately fails to even meet the relatively low
> "reason to believe" standard. An initial response to a complaint is
> typically $5000 to $10,000. Having seen the operations from inside, I would
> not advise a campaign to responde without counsel. Obviously, a complaint
> that leads to a full investigation can cost tens or even hundreds of
> thousands of dollars, even if the complaint is dismissed before trial.
>
> Potential fines for violations are typically substantial for small
> violators. For example, a campaign with $2500 in expenses that fails to file
> a report faces a $250 fine for a first time violation. If that is
> an "election sensitive report," however, they are looking at a $550 fine for
> a first time offense. These are fines that go through the FEC's
> "administrative fines" system. The minimum fine for anything that must go
> through regular enforcement is historically $1000. The statute generally
> authorizes fines for unintentional violations of up to $5000 or the amount
> in question, whichever is larger. The FEC calculates the amount in question
> so as to raise liability: e.g., before Citizens United, if a small business
> spent $1.32 to mail three solicitations from the company CEO, and because of
> that raised $6000, the FEC views the amount of the violation as $6000, not
> the $1.32 actually spent. PAC treasurers are personally liable for fines if
> the PAC cannot (or will not) pay it.
>
> Bradley A. Smith
> Josiah H. Blackmore II/Shirley M. Nault Designated Professor of Law
> Capital University Law School
> 303 E. Broad St.
> Columbus, OH 43215
> (614) 236-6317
> http://www.law.capital.edu/Faculty/Bios/bsmith.asp
> ________________________________
> From: law-election-bounces at department-lists.uci.edu on behalf of Volokh,
> Eugene
> Sent: Sun 8/14/2011 7:41 PM
> To: law-election at department-lists.uci.edu
> Subject: Re: [EL] Technology to facilitate compliance
>
>                 So – and again a naïve question – what, practically is the
> burden of compliance (especially as to disclosure) for small campaigns?  I’m
> not doubting that there is such a burden; I just want a better sense of what
> it is, and whether it can be mitigated.
>
>
>
>                 Eugene
>
>
>
> From: law-election-bounces at department-lists.uci.edu
> [mailto:law-election-bounces at department-lists.uci.edu] On Behalf Of Smith,
> Brad
> Sent: Sunday, August 14, 2011 4:15 PM
> To: law-election at department-lists.uci.edu
> Subject: Re: [EL] Technology to facilitate compliance
>
>
>
> The automation rule is the norm at the FEC, which provides free software,
> and in many if not most states. Many small campaigns, however, still have
> difficulties with using the software.
>
>
>
> The technical filling of data, however, is not the real problem, though it
> does add to the costs and fears that people have. And believe me, people do
> have fears.
>
>
>
> Bradley A. Smith
>
> Josiah H. Blackmore II/Shirley M. Nault Designated Professor of Law
>
> Capital University Law School
>
> 303 E. Broad St.
>
> Columbus, OH 43215
>
> (614) 236-6317
>
> http://www.law.capital.edu/Faculty/Bios/bsmith.asp
>
>
>
> ________________________________
>
> From: law-election-bounces at department-lists.uci.edu on behalf of Volokh,
> Eugene
> Sent: Sun 8/14/2011 5:52 PM
> To: law-election at department-lists.uci.edu
> Subject: Re: [EL] Technology to facilitate compliance
>
>
>
>         I agree entirely that the government should provide the software --
> which will often be as simple as a Web page (with supporting software)
> hosted on the jurisdiction's election commission Web site, or perhaps a
> spreadsheet template that people could fill in and that the Web page could
> accept for batch uploads, plus perhaps some software to provide automatic
> schedule reminder e-mails to everyone who signs up.  But this is not rocket
> science; this would be a simple application of well-understood, routinely
> used technology.
>
>         Indeed, I would think there should be a general principle, whether
> enacted in statute or just as a strongly accepted guideline -- let's call it
> the Automation Rule:  Every disclosure and reporting regulation imposed by
> election law must be accompanied with government-provided software, and that
> proper use of such software would fully discharge the user's legal
> obligations under the jurisdiction's election law.  Naturally, the software
> also has to be made easy to use, and it's hard to come up with a purely
> legal rule to make sure that it is easy enough to use.  But it seems to me
> that if the Automation Rule isn't an existing norm already, it should be.
>
>         Eugene
>
>> -----Original Message-----
>> From: law-election-bounces at department-lists.uci.edu [mailto:law-election-
>> bounces at department-lists.uci.edu] On Behalf Of Larry Levine
>> Sent: Sunday, August 14, 2011 12:23 PM
>> To: 'Kathay Feng'; Volokh, Eugene; law-election-bounces at department-
>> lists.uci.edu; law-election at department-lists.uci.edu
>> Subject: Re: [EL] Check out Study shows who breaks campaign laws-
>> ThePuebloChieftai...
>>
>> Transaction costs are just a very small part of the matter. It is the
>> rules
>> about what needs to be reported and upon what schedule that creates the
>> traps. These rules often differ from jurisdiction to jurisdiction and
>> change
>> from election cycle to election cycle within the same jurisdiction. If the
>> government is going to require automated (electronic) filing of
>> contributions and expenditures, then the government should either provide
>> the software and hardware needed to comply free of charge, or allow those
>> costs to fall beyond the limits of spending on a campaign.
>> The difficulty with so much of what we enact in the way of reporting
>> reforms
>> is that they may apply well to big statewide races or even to legislative
>> races. But when you come down to a city council campaign in a town of just
>> a
>> few thousand people, or in a very small school district those requirements
>> become burdensome.
>> Larry
>>
>> -----Original Message-----
>> From: law-election-bounces at department-lists.uci.edu
>> [mailto:law-election-bounces at department-lists.uci.edu] On Behalf Of Kathay
>> Feng
>> Sent: Sunday, August 14, 2011 11:58 AM
>> To: Volokh, Eugene; law-election-bounces at department-lists.uci.edu;
>> law-election at department-lists.uci.edu
>> Subject: Re: [EL] Check out Study shows who breaks campaign laws-
>> ThePuebloChieftai...
>>
>> Automation is certainly a practical solution that would help. In
>> California,
>> we had a bi- and non-partisan group of reformers, the regulated community,
>> citizen groups and others that all agreed that greater automation would
>> help
>> with disclosure, and significantly lower transaction costs for both
>> campaigns and the government.  The idea is still stuck in the mud, though.
>> Sent via BlackBerry by AT&T
>>
>> -----Original Message-----
>> From: "Volokh, Eugene" <VOLOKH at law.ucla.edu>
>> Sender: law-election-bounces at department-lists.uci.edu
>> Date: Sun, 14 Aug 2011 10:41:53
>> To:
>>
>> law-election at department-lists.uci.edu<law-election at department-lists.uci.edu>
>> Subject: Re: [EL] Check out Study shows who breaks campaign laws
>>       -       ThePuebloChieftai...
>>
>>       A naïve question:  Could some of these problems -- at least to
>> filing -- be relieved with automation (and might they already be so
>> relieved), especially with automation that the jurisdiction is willing to
>> certify as sufficient?  For instance, I certainly sympathize with concerns
>> about the burden of reporting contributions and expenditures, but what if
>> State X, when it enacts some such disclosure restrictions, provides that
>> the
>> obligation is discharged if a campaign worker goes to a particular Web
>> site
>> and accurately enters all the data he's asked to enter?  Likewise, I take
>> it
>> that whatever software is used to gather credit card donations via the Web
>> presumably already creates a data file that can just be sent to the
>> election
>> authorities to discharge the disclosure obligations.  Or am I missing
>> something big here?
>>
>>       Eugene
>>
>> > On Sun, Aug 14, 2011 at 1:05 PM, Larry Levine
>> > <larrylevine at earthlink.net>
>> wrote:
>> > > You've touched a nerve. We have "reformed" our way into a time when
>> > > one cannot run an election campaign of any size, or a PAC, or
>> > > conduct activities of a state or local political party or club
>> > > without the cost of a professional treasurer and an attorney on
>> > > retainer. At the same time we are placing limits on the amounts of
>> > > contributions and the permissible expenditures in campaign without
>> > > allowing for these "overhead" items to come from a separate account.
>> > > Gone is the day when a volunteer can be the treasurer of a campaign
>> > > for a friend if the campaign is of any consequential size. On top of
>> > > that, we have created a thicket of regulations and requirements that
>> > > differ from state to state and from jurisdiction to jurisdiction
>> > > within a state, thus making it virtually impossible for a campaign
>> > > and/or a candidate to avoid violations without the services of an
>> > > elections attorney who is watching over every facet of the campaign.
>> > > And all in aide of stamping out the perception of corruption. Tell
>> > > me, is the perception any less now than when we started the "reforms"
>> some 40 years ago?
>> > >
>> > > Larry
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