Federal Election Commission Main Page
FEDERAL ELECTION COMMISSION
Washington, DC 20463
January 27, 2005
CERTIFIED MAIL
RETURN RECEIPT REQUESTED
ADVISORY OPINION 2004-45
Marc E. Elias, Esq.
Rebecca H. Gordon, Esq.
Perkins Coie
607 Fourteenth Street, NW
Washington, DC 20005-2011
Dear Mr. Elias and Ms. Gordon:
We are responding to your inquiry on behalf of Senator
Ken Salazar and his principal campaign committee, Salazar
for Senate (the "Salazar Committee") regarding the
application of the Federal Election Campaign Act of 1971, as
amended (the "Act"), and Commission regulations, to the
Salazar Committee's spending of contributions it raised
during the 2004 election cycle under increased contribution
limits pursuant to the "Millionaires' Amendment." See 2
U.S.C. 441a-1 and 441a(i); 11 CFR Part 400. The Salazar
Committee may use a last-in, first-out method of accounting
to determine whether, now that the election is over, any of
those contributions constitute "excess contributions" that
must be returned to contributors.
Background
The facts of this request are presented in your letter
dated December 14, 2004.
Senator Salazar was the Democratic candidate for the
Senate from Colorado in the 2004 general election. His
Republican opponent in that election was Peter Coors. On
October 23, 2004, Mr. Coors's principal campaign committee,
Pete Coors for Senate, Inc. (the "Coors Committee"), filed
with the Secretary of the Senate an Initial Notification of
Expenditures from Personal Funds on FEC Form 10, indicating
that Mr. Coors had spent $1,051,000 from personal funds in
connection with his general election campaign. The Salazar
Committee received a copy of this filing that evening.
As the provisions of the Millionaires' Amendment
permit, the Salazar Committee began raising funds from
individuals under an increased contribution limit of $6,000
on October 24, 2004. From that date through November 2,
2004 - the date of the general election - the Salazar
Committee raised $1,308,533 in contributions. Of this
amount, $564,046 was attributable to the portion of
individual contributions raised pursuant to the
Millionaires' Amendment that exceeded the normal $2,000
limit.
Between October 24 and December 6, 2004, the Salazar
Committee paid $1,610,641 in campaign expenses in connection
with the 2004 general election. As of December 6, 2004,
over $100,000 in 2004 general election expenses remained
outstanding and were being processed for payment. The
Salazar Committee intends to use a "last-in, first-out"
("LIFO") method of accounting to determine whether any of
its remaining cash-on-hand is comprised of funds that were
contributed under the increased limits provided for by the
Millionaires' Amendment.
Questions Presented
1. May the Salazar Committee use a LIFO method of
accounting to determine whether it has "excess
contributions" that must be refunded to contributors?
Legal Analysis and Conclusions
Yes, the Salazar Committee may use the LIFO method of
accounting, a generally accepted accounting principle, to
determine whether it has "excess contributions" that must be
refunded to contributors.
The Act and Commission regulations require candidates
receiving increased contributions under the Millionaires'
Amendment to refund, within fifty days of the election, all
"excess contributions" that are not spent in connection with
that election. 2 U.S.C. 441a(i)(3) and 441a-1(a)(4); 11 CFR
400.51 and 400.53. An "excess contribution" is the amount
of each contribution raised in an amount above the usual
$2,000 limit that is not otherwise spent "in connection with
the election" to which it relates. 11 CFR 400.50. Neither
the Act nor Commission regulations specify a particular
accounting method that candidate committees must use to
determine whether their remaining cash-on-hand after an
election contains any excess contributions. Because LIFO is
a generally accepted accounting principle, the Commission
concludes that the Salazar Committee may use this method for
the purpose of determining whether its remaining cash-on-
hand after the election contains any excess contributions.
This response constitutes an advisory opinion
concerning the application of the Act and Commission
regulations to the specific transaction or activity set
forth in your request. See 2 U.S.C. 437f. The Commission
emphasizes that, if there is a change in any of the facts or
assumptions presented, and such facts or assumptions are
material to a
conclusion presented in this advisory opinion, then the
requestor may not rely on that conclusion as support for its
proposed activity.
Sincerely,
(signed)
Scott E. Thomas
Chairman