[Federal Register: November 19, 2007 (Volume 72, Number 222)]
[Rules and Regulations]
[Page 64919-64921]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr19no07-1]
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Rules and Regulations
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains regulatory documents
having general applicability and legal effect, most of which are keyed
to and codified in the Code of Federal Regulations, which is published
under 50 titles pursuant to 44 U.S.C. 1510.
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[[Page 64919]]
FEDERAL ELECTION COMMISSION
11 CFR Part 111
[Notice 2007-21]
Procedural Rules for Probable Cause Hearings
AGENCY: Federal Election Commission.
ACTION: Rule of Agency Procedure.
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SUMMARY: The Federal Election Commission (``Commission'') is making
permanent a program that allows respondents in enforcement proceedings
under the Federal Election Campaign Act, as amended (``FECA''), to have
a hearing before the Commission. Hearings will take place prior to the
Commission's consideration of the General Counsel's recommendation on
whether to find probable cause to believe that a violation has
occurred. The Commission will grant a request for a probable cause
hearing if any two commissioners agree to hold a hearing. The program
will provide respondents with the opportunity to present arguments to
the Commission directly and give the Commission an opportunity to ask
relevant questions. Further information about the procedures for the
program is provided in the supplementary information that follows.
DATES: Effective November 19, 2007.
FOR FURTHER INFORMATION CONTACT: Mark D. Shonkwiler, Assistant General
Counsel, 999 E Street, NW., Washington, DC 20463, (202) 694-1650 or
(800) 424-9530.
SUPPLEMENTARY INFORMATION: The Federal Election Commission is making
permanent a program to afford respondents in pending enforcement
matters the opportunity to participate in hearings (generally through
counsel) and present oral arguments directly to the Commissioners,
prior to any Commission determination of whether to find probable cause
to believe respondents violated FECA.\1\
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\1\ The Commission is appending to this statement a general
description of its enforcement procedures (``Basic Commission
Enforcement Procedure''). These procedures are prescribed by statute
and regulation. See 2 U.S.C. 437g; 11 CFR part 111.
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I. Background
On June 11, 2003, the Commission held a hearing concerning its
enforcement procedures. The Commission received comments from those in
the regulated community, many of whom argued for increased transparency
in Commission procedures and expanded opportunities to contest
allegations.\2\ In response to issues raised at the hearing, the
Commission has made a number of changes and clarifications. These
changes and clarifications include allowing respondents to have access
to their deposition transcripts, See Statement of Policy Regarding
Deposition Transcripts in Nonpublic Investigations, 68 FR 50688 (August
22, 2003), and clarifying questions concerning treasurer liability for
violations of the FECA, See Statement of Policy Regarding Treasurers
Subject to Enforcement Proceedings, 70 FR 3 (January 3, 2005).
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\2\ The comments from these 2003 proceedings are available
online at http://www.fec.gov/agenda/agendas2003/notice2003-09/
comments.shtml.
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On December 8, 2006, the Commission published a proposal for a
pilot program for probable cause hearings, and sought comments from the
regulated community. See Proposed Policy Statement Establishing Pilot
Program for Probable Cause Hearings, 71 FR 71088 (Dec. 8, 2006). The
comment period on the proposed policy statement closed on January 5,
2007. The Commission received four comments, all of which endorsed the
proposed pilot program for probable cause hearings. These comments are
available at http://www.fec.gov/law/policy.shtml#proposed under the
heading ``Pilot Program for Probable Cause Hearings.''
On February 8, 2007, the Commission decided by a vote of 6-0 to
institute the pilot program. The program went into effect on February
16, 2007. The pilot program was designed to remain in effect for at
least eight months, after which time a vote would be scheduled on
whether the program should continue. The Commission finds that the
pilot program has been successful and hence, is issuing this notice to
announce that the Commission has determined to make the program
permanent.
II. Procedures for Probable Cause Hearings
A. Opportunity To Request a Hearing
A respondent may request a probable cause hearing when the
enforcement process reaches the probable cause determination stage (see
11 CFR 111.16-111.17) and the respondent submits a probable cause
response brief to the Office of General Counsel. The General Counsel
will attach a cover letter to its probable cause brief to inform the
respondent of the opportunity to request an oral hearing before the
Commission. See 11 CFR 111.16(b). Hearings are voluntary and no adverse
inference will be drawn by the Commission based on a respondent's
request for, or waiver of, such a hearing. The respondent must include
a written request for a hearing as a part of the respondent's filed
reply brief under 11 CFR 111.16(c). Each request for a hearing must
state with specificity why the hearing is being requested and what
issues the respondent expects to address. Absent good cause, to be
determined at the sole discretion of the Commission, late requests will
not be accepted. Respondents are responsible for ensuring that their
requests are timely received. All requests for hearings, scheduling and
format inquiries, document submissions, and any other inquiries related
to the probable cause hearings should be directed to the Office of
General Counsel.
The Commission will grant a request for an oral hearing if any two
Commissioners agree that a hearing would help resolve significant or
novel legal issues, or significant questions about the application of
the law to the facts. The Commission will inform the respondent whether
the Commission is granting the respondent's request within 30 days of
receiving the respondent's brief.
B. Hearing Procedures
The purpose of the oral hearing is to provide a respondent an
opportunity to present the respondent's arguments in person to the
Commissioners before the Commission makes a determination as to whether
there is ``probable cause to believe'' that the respondent violated
[[Page 64920]]
the Act or Commission regulations. Consistent with current Commission
regulations, a respondent may be represented by counsel, at the
respondent's own expense, or may appear pro se at a probable cause
hearing. See 11 CFR 111.23. Respondents (or their counsel) will have
the opportunity to present their arguments, and Commissioners, the
General Counsel, and the Staff Director will have the opportunity to
pose questions to the respondent, or respondent's counsel, if
represented.
At the hearing, respondents are expected to raise only issues that
were identified in the respondent's hearing request. Such issues must
have been previously presented during the enforcement process, either
in the response, during the investigation or pre-probable cause
conciliation, or in the reply brief. Respondents may discuss any issues
presented in the enforcement matter, including potential liability and
calculation of a civil penalty, and should be prepared to address
questions related to the complaint, their initial response, and any
other material they have submitted to the Commission. The reply brief
should include specific citations to any authorities (including prior
Commission actions) on which the respondent is replying or intends to
cite at the hearing. If respondents discover new information after
submission of the reply brief, or need to raise new arguments for
similarly extenuating circumstances, they should notify the Commission
as soon as possible prior to the hearing. Commissioners may ask
questions on any matter related to the enforcement proceedings and
respondents are free to raise new issues germane to any response.
Hearings are confidential and not open to the public; generally
only respondents and their counsel may attend. Attendance by any other
parties must be approved by the Commission in advance.
The Commission will determine the format and time allotted for each
hearing at its discretion. Among the factors that the Commission may
consider are agency time constraints, the complexity of the issues
raised, the number of respondents involved, and the extent of
Commission interest. The Commission will determine the amount of time
allocated for each portion of the hearing, and each time limit may vary
from hearing to hearing. The Commission anticipates that most hearings
will begin with a brief opening statement by respondent or respondent's
counsel, followed by questioning from the Commissioners, General
Counsel, and Staff Director. Hearings will normally conclude with the
respondent or respondent's counsel's closing remarks.
Third party witnesses or other co-respondents may not be called to
testify at a respondent's oral hearing, nor may a respondent's counsel
call the respondent to testify. However, the Commission may request
that the respondent submit supplementary information or briefing after
the probable cause hearing. The Commission discourages voluminous
submissions. Supplementary information may be submitted only upon
Commission request and no more than ten days after such a request from
the Commission, unless the Commission's request for information imposes
a different, Commission-approved deadline. Materials requested by the
Commission, and materials considered by the Commission in making its
``probable cause to believe'' determination, may be made part of the
public record pursuant to the Commission's Statement of Policy
Regarding Disclosure of Closed Enforcement and Related Files, 68 FR
70426 (Dec. 18, 2003).
The Commission will have transcripts made of the hearings. The
transcripts will become a part of the record of the enforcement matter
and may be relied upon for determinations made by the Commission.
Respondent may be bound by any representations made by respondent or
respondent's counsel at a hearing. The Commission will make the
transcripts available to the respondent as soon as practicable after
the hearing, and the respondent may purchase copies of the transcript.
Transcripts will be made public after the matter is closed in
accordance with Commission policies on disclosure.\3\
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\3\ The Commission's Statement of Policy Regarding Disclosure of
Closed Enforcement and Related Files, 68 FR 70426 (Dec. 18, 2003) is
hereby amended to include disclosure of transcripts from probable
cause hearings.
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C. Cases Involving Multiple Respondents
In cases involving multiple respondents, the Commission will decide
on a case-by-case basis whether to structure any hearings separately or
as joint hearings for all respondents. Respondents are encouraged to
advise the Commission of their preferences. Co-respondents may request
joint hearings if each participating co-respondent provides an
unconditional waiver of confidentiality with respect to other
participating co-respondents and their counsel and a nondisclosure
agreement. If separate hearings are held, each respondent will have
access to the transcripts from the hearing of that respondent, but
transcripts of other co-respondents' hearings will not be made
available unless co-respondents specifically provide written consent to
the Commission granting access to such transcripts.
D. Scheduling of Hearings
The Commission will seek to hold the hearing in a timely manner
after receiving respondents' request for a hearing. The Commission will
attempt to schedule the hearings at a mutually acceptable date and
time. However, if a respondent is unable to accommodate the
Commission's schedule, the Commission may decline to hold a hearing.
The Commission reserves the right to reschedule any hearing. Where
necessary, the Commission reserves the right to request from a
respondent an agreement tolling any upcoming deadline, including any
statutory deadline or other deadline found in 11 CFR part 111.
E. Conclusion
Probable cause hearings are optional and no negative inference will
be drawn if respondents do not request a hearing. Currently, the
majority of the Commission's cases are settled through pre-probable
cause conciliation. Proceeding to probable cause briefing requires a
substantial investment of the Commission's limited resources.
Consistent with the goal of expeditious resolution of enforcement
matters, the Commission encourages pre-probable cause conciliation. The
Commission has a practice in many cases of reducing the civil penalty
it seeks through its opening settlement offer in pre-probable cause
conciliation. However, once pre-probable cause conciliation has been
terminated, this reduction (normally 25%) is no longer available and
the civil penalty will generally increase.
This notice establishes rules of agency practice or procedure. This
notice does not constitute an agency regulation requiring notice of
proposed rulemaking, opportunities for public participation, prior
publication, and delay effective under 5 U.S.C. 553 of the
Administrative Procedures Act (``APA''). The provisions of the
Regulatory Flexibility Act, 5 U.S.C. 605(b), which apply when notice
and comment are required by the APA or another statute, are not
applicable.
Dated: November 5, 2007.
Robert D. Lenhard,
Chairman, Federal Election Commission.
Note: The following Appendix will not appear in the Code of
Federal Regulations.
[[Page 64921]]
Appendix: Basic Commission Enforcement Procedure
The Commission's enforcement procedures are set forth at 11 CFR
part 111. An enforcement matter may be initiated by a complaint or
on the basis of information ascertained by the Commission in the
normal course of carrying out its supervisory responsibilities. 11
CFR 111.3. If a complaint substantially complies with certain
requirements set forth in 11 CFR 111.4, within five days of receipt
the Office of General Counsel notifies each party determined to be a
respondent that a complaint has been filed, provides a copy of the
complaint, and advises each respondent of Commission compliance
procedures. 11 CFR 111.5. A respondent then has 15 days from receipt
of the notification from the Office of General Counsel to submit a
letter or memorandum to the Commission setting forth reasons why the
Commission should take no action on the basis of the complaint. 11
CFR 111.6.
Following receipt of such letter or memorandum, or expiration of
the 15-day period, the Office of General Counsel may recommend to
the Commission whether or not it should find ``reason to believe''
that a respondent has committed or is about to commit a violation of
the Act or Commission regulations. 11 CFR 111.7(a).\4\ With respect
to internally-generated matters (e.g., referrals from the
Commission's Audit or Reports Analysis Divisions), the Office of
General Counsel may recommend that the Commission find ``reason to
believe'' that a respondent has committed or is about to commit a
violation of the Act or Commission regulations on the basis of
information ascertained by the Commission in the normal course of
carrying out its supervisory responsibilities, or on the basis of a
referral from an agency of the United States or any state. If the
Commission determines by an affirmative vote of four members that it
has ``reason to believe'' that a respondent violated the Act or
Commission regulations, the respondent must be notified by letter of
the Commission's finding(s). 11 CFR 111.9(a).\5\ The Office of
General Counsel will also provide the respondent with a Factual and
Legal Analysis, which will set forth the bases for the Commission's
finding of reason to believe.
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\4\ The Office of General Counsel may also recommend that the
Commission find no ``reason to believe'' that a violation has been
committed to is about to be committed, or that the Commission
otherwise dismiss a complaint without regard to the provisions of 11
CFR 111.6(a). 11 CFR 111.7(b).
\5\ If the Commission finds no ``reason to believe,'' or
otherwise terminates its proceedings, the Office of General Counsel
shall advise the complainant and respondent(s) by letter. 11 CFR
111.9(b).
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After the Commission makes a ``reason to believe'' finding, an
investigation is conducted by the Office of General Counsel, in
which the Commission may undertake field investigations, audits, and
other methods of information-gathering. 11 CFR 111.10. Additionally,
the Commission may issue subpoenas to order any person to submit
sworn written answers to written questions, to provide documents, or
to appear for a deposition. 11 CFR 111.11-111.12. Any person who is
subpoenaed may submit a motion to the Commission for it to be
quashed or modified. 11 CFR 111.15.
Following a ``reason to believe'' finding, the Commission may
attempt to reach a conciliation agreement with the respondent(s)
prior to reaching the ``probable cause'' stage of enforcement (i.e.,
a pre-probable cause conciliation agreement). See 11 CFR 111.18(d).
If the Commission is unable to reach a pre-probable cause
conciliation agreement with the respondent, or determines that such
a conciliation agreement would not be appropriate, upon completion
of the investigation referenced in the preceding paragraph, the
Office of General Counsel prepares a brief setting forth its
position on the factual and legal issues of the matter and
containing a recommendation on whether or not the Commission should
find ``probable cause to believe'' that a violation has occurred or
is about to occur. 11 CFR 111.16(a).
The Office of General Counsel notifies the respondent(s) of this
recommendation and provides a copy of the probable cause brief. 11
CFR 111.16(b). The respondent(s) may file a written response to the
probable cause brief within fifteen days of receiving said brief. 11
CFR 111.16(c). After reviewing this response, the Office of General
Counsel shall advise the Commission in writing whether it intends to
proceed with the recommendation or to withdraw the recommendation
from Commission consideration. 11 CFR 111.16(d).
If the Commission determines by an affirmative vote of four
members that there is ``probable cause to believe'' that a
respondent has violated the Act or Commission regulations, the
Commission authorizes the Office of General Counsel to notify the
respondent by letter of this determination. 11 CFR 111.17(a). Upon a
Commission finding of ``probable cause to believe,'' the Commission
must attempt to reach a conciliation agreement with the respondent.
11 CFR 111.18(a). If no conciliation agreement is finalized within
the time period specified in 11 CFR 111.18(c), the Office of General
Counsel may recommend to the Commission that it authorize a civil
action for relief in the appropriate court. 11 CFR 111.19(a).
Commencement of such civil action requires an affirmative vote of
four members of the Commission. 11 CFR 111.19(b). The Commission may
enter into a conciliation agreement with respondent after
authorizing a civil action. 11 CFR 111.19(c).
[FR Doc. E7-22524 Filed 11-16-07; 8:45 am]
BILLING CODE 6715-01-P