[EL] Technology to facilitate compliance
Larry Levine
larrylevine at earthlink.net
Sun Aug 14 18:24:02 PDT 2011
L.A. City has a requirement that a campaign send to the Ethics Commission a
copy of any piece of voter mail or hand out material at the same time it is
distributed to the public. For a single violation – an oversight, mistake or
bad postal delivery – the commission staff routinely imposes a find of
$2,000.
Larry
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 5:24 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
<mailto:law-election at department-lists.uci.edu%3claw-election at department-list
s.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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