expenses counting as an expenditure on behalf of the Presidential candidate.

There are also a number of changes which should be made in the statute to enable the Federal Election Commission to better perform its mission.

One problem which the Commission often faces is the limited availability of the advisory opinion procedure. When coupled with the prohibition on giving an opinion of an advisory nature outside the formal advisory opinion process of section 4371, the restrictions on standing to receive an advisory opinion severely hamper the FEC's ability to advise certain parties on how they may comply with the act. To encourage voluntary compliance with the act, the Commission suggests that any person subject to the provisions of the act should have standing to request an advisory opinion on the applicability of the act or our regulations to a specific factual situation in which the requestor is involved.

To reduce delays, our recommendations also include proposals for shortening the regulation review period, and the conciliation period for enforcement actions.

The judicial review provisions of the FECA also have created a unique procedural problem for the Federal courts and the Commission requests that the Congress address several specific alternatives outlined in our recommendations.

All of the Commission recommendations are based on the experience gained in administering the FECA for the past 4 years. The Commission believes these recommendations will improve the clarity of the act, reduce the burdens on those required to comply with it, encourage more party and local activity, and enable the Commission to more efficiently carry out its responsibilities.

We look forward to working with the committee toward what we are sure is a mutual goal-a Federal Election Campaign Act which is more effective and less burdensome for those required to comply with it.

Thank you, Senator.

The CHAIRMAN. Thank you very much, Mr. Chairman.

[At this point, the committee received testimony on another legislative measure.]

The CHAIRMAN. We now return to the Federal Election Commission legislation.

You recommended that we should exempt or limit the activity in connection with delegation selection from the definition of contributions and expenditures, and such provisions have been included partially in the committee working draft. Maybe you could tell us some of the difficulties encountered in the 1976 Presidential campaign with respect to reporting of financial activity by delegates, and do you see any problems in excluding all contributions to a delegate in the definition, as opposed to just contributions to party committees.

Mr. TIERNAN. Well, Senator, this was an area that was extremely difficult for the Commission because of the late start into the 1976 election cycle. Also, because we had to distinguish from the authorized delegate, and the unauthorized, but pledged delegate, to a particular candidate, it was difficult in establishing and relating those costs or

expenditures made by the delegate as an expenditure made by the candidate himself or his committee.

We have recommended that these expenditures would be exempted from the definition of contributions and expenditures.

We also suggested some other alternatives, if the committee did not want to fully exempt those expenditures; but I think the Commission does feel that they all should be exempted. We do not see any great possibility of harm in the process; in fact, we think that in the selection of delegates, the various candidates and committees competing against each other is pretty much of a safeguard in that area.

The CHAIRMAN. I notice also that you recommended that both corporations and labor unions be prohibited from giving honoraria to Federal candidates.

What would be your reaction to the thought that they should be permitted to do so, but within the limits of the statute-$2,000 per appearance or $25,000 per year?

Mr. TIERNAN. Well, we see that as applying only to incumbents. In fairness, we think it should be applied across the board. That's why we make that suggestion. So it would not only apply to limitations that a Senator or Congressman has to observe through the rules adopted by the appropriate Congressional body, but it would also apply to all "candidates". It applies to anyone, whether he's a Federal officeholder or not.

The CHAIRMAN. But one could make it apply to everybody if you excepted those limitations?

Mr. TIERNAN. Yes; you could. That's another alternative the committee may want to undertake.

The CHAIRMAN. It might be more politically easy to get through, I would think.

Mr. TIERNAN. Right.

The CHAIRMAN. We have so much to try to get through this morning that I'm going to desist with any more questions at this time and will submit some for the record, if I might, because we have more witnesses to follow you and a full agenda of business.

Senator Hatfield?

Senator HATFIELD. Do I detect a desire on the part of the chairman to have the rest of us follow

The CHAIRMAN. Oh, no.

Senator HATFIELD. Mr. Chairman, section 330 of the discussion draft would require the congressional candidate to file a statement with the Commission prior to the election on whether or not he intends to spend in excess of $35,000 of his own funds.

Now, according to our record, there was testimony before this committee in the 95th Congress relating to a similar proposal, and at that time the Commission indicated that such a provision would produce major administrative problems-I believe that was the phraseology used by the witness at that time.

Would you comment on problems which the Commission foresees in insuring compliance with this provision now as compared to the testimony of the Commission before the 95th Congress?

Mr. TIERNAN. Senator, I see no change in the position of the Commission. We think that would be a nightmare. Administratively I don't think we could handle it. If it were adopted by the Senate, we would

certainly try to implement it. But with the proposed timeframe, and the requirement of notifying all the other candidates of filings by the other candidates, it really is, we think, a poorly conceived idea. I think it has application in a very limited area, probably limited to one or two States, where they might have a unique situation.

Senator HATFIELD. Mr. Chairman, as you know, one of the concerns of this committee has been the length of time taken to complete audits. That is, the Commission's responsibilities have seemingly involved an inordinate amount of time. If the committee should decide to include a requirement that such audits be completed within a certain timeframe-in other words, we mandate it in the changes of the rules— what would the Commission feel would be a reasonable period of time?

Mr. TIERNAN. Well, Senator, I would say, on the basis of the experience we had with the 1976 elections, the 1980 Presidential audits, in all likelihood, will be handled in a different manner. I think the statutory limitation on completing these audits now is 3 years after the final payment, or after expiration of eligibility for payment for a candidate. I don't know whether or not there are some constraints we may have with regard to staff, but I think the Commission will approach it differently. I think we will put all the candidates initially on notice of deadlines.

I think the Commission's feeling was perhaps on the lenient side because it was the first time we were doing these procedures. As you know, we were just initiating the process of giving some guidance to campaigns, and also changing some requirements with regard to reporting certain transactions and maintaining documentation. This wasn't fully understood by all of the candidates. Some of these candidates were not well financed or well organized. So when we did the audits with them, we probably bent over a bit too much; but then that established a precedent, and we were sort of bound into that situation.

I think the Commission is going to be approaching the audits for the 1980 Presidential elections in a little different light. As I indicated the last time we testified, we have established teams that now work with each candidate as they file with the Commission. The teams are comprised of a member from the audit staff, a member from the reports analysis division, and a member of the General Counsel's office. So we are working very closely with these committees in the early stages, much more so today than we were able to do in 1976. If the committee was to put a specific time limit in it, I would suggest-I would say 2 years would be a reasonable figure. I think the Commission will probably take less time than that, but here again, I can't anticipate all the difficulties that the Commission will face. And, as you know, the makeup in the membership of the Commission itself changes, and so I'm just speaking as one Commissioner. We have not taken a formal position on a changed time limitation, but in discussions with the Vice Chairman and other members of the Commission, I think that we will be in a much better position to get these audits completed

Senator HATFIELD. It might be helpful to us if the Commission did discuss it informally amongst themselves and

Mr. TIERNAN. We would be happy to supply a statement for the committee.

Senator HATFIELD. One last question, Mr. Chairman.

An amendment included in the draft bill directs the Commission to work closely with the Internal Revenue Service in promulgating rules and regulations which are mutually consistent.

My question is, have you had experience, or have political candidates or committees encountered problems of inconsistencies, say, between the Federal election laws and the tax laws?

Mr. TIERNAN. Well, there have been some areas of interpretation by the Internal Revenue Service that appear to be in conflict with the FECA and some of the interpretations the Commission has made; for example, on how candidates or committees handle the excess moneys, excess campaign contributions.

Our General Counsel, Mr. Oldaker, is here with me, and we have had a good working relationship with all other Federal agencies. For example, in the area of the Federal Communications Commission, we were able to come out with a joint statement, a disclaimer, that was in conformity with the statutory language of the FCC and our own language. We have resolved that, and we could initiate a similar relationship with Internal Revenue.

If we do have a situation where we are not able to resolve our differences, we feel there is a responsibility to notify both the Senate and the House oversight committees.

Senator HATFIELD. Could you provide for the record specific instances in which there have been such inconsistencies and how you have resolved those?

Mr. TIERNAN. Yes, we will.

Senator HATFIELD. Mr. Friedersdorf, I invite your comments on any of the questions I have raised, if you would care to make some.

Mr. FRIEDERSDORF. As the newest Commissioner, Senator, I was involved in only the final consideration of three or four of the audits, so I can't speak as a Commissioner who was involved at the outset. But I support what the chairman said insofar as our expectations for completions of audits following the 1980 Presidential election. I think there's a very definite attitude among the Commission, from the Commissioners I have talked to, about expediting the 1980 Presidential audits.

I would not, as one Commissioner, be at all reluctant to support a statutory deadline for the completion of those audits. I think if there has been any error on the part of the Commission, it has been my observation that the Commission has erred on the side of leniency and restraint with some of the committees and candidates in providing their documentation. I am not criticizing that because I wasn't on the Commission at that time and didn't know the specifics. But there were a lot of delays by the committees in their failure to provide the documentation and not because of the Commission's slowness in handling the documentation after it was there.

We have a good audit team organization in place for the Presidential candidates, and I feel certain that the Federal Election Commission's record insofar as completing Presidential audits will be much. much better after the 1980 elections.

Senator HATFIELD. Mr. Vice Chairman, speaking of delays, do you feel handicapped as a member of the Commission, as a minority member of the Commission, in the fact that the Senate has had this long

delay that involves confirmation of the newest appointee by the President to the Commission?

Mr. FRIEDERSDORF. It is not helpful. It hasn't hurt insofar as our handling of routine business week to week. But, if I can speak honestly

Senator HATFIELD. And candidly.

Mr. FRIEDERSDORF [continuing]. And candidly, I happened to go through some delay myself, so I know the mental anguish and strain

Senator HATFIELD. That's why I asked the question.

Mr. FRIEDERSDORF [continuing]. And tension that this invokes.

For example, Commissioner Thompson, whose term has expired, has experienced difficulty in keeping staff. It is difficult for him to keep up with paperwork. I think it's a handicap not only to him but to the entire Commission to have this delay.

Senator HATFIELD. Thank you.

Mr. Chairman, would you comment on that same question?

Mr. TIERNAN. Well, Senator, frankly, we have been concerned about all the delays that we have had, and it doesn't help the morale of the Commission.

As the vice chairman indicated, Commissioner Thompson's executive assistant has left and gone to another job. His secretary had planned to leave; she had made plans to go to Florida, so he is without a secretary. My secretary and the other secretaries of the Commissioners are doing the work of his secretary. It does create some problems.

More than that, I can't say. We do have a full membership, and Commissioner Thompson participates in all meetings. I am sure it creates some problems for the nominee who is waiting, and not knowing when he's coming on board, and affects whatever plans he may have made to terminate his employment, or whatever. So it does create some problems, but I'm sure you have seen that many times with other nominees.

Senator HATFIELD. I would like the record to clearly show that Chairman Pell and this committee handled the whole matter very expeditiously, working against difficulties at the time of quorums and other such matters as normally beset any committee. But Chairman Pell persevered and we handled it, as I say, very efficiently. So this delay to which I have referred and to which the Commissioners have responded, has been due to the fact that a minority within a minority, a very few, have been seeking this delay as a matter of strategy. I am hopeful the leadership of the Senate will exercise its responsibility by bringing this matter to a conclusion.

Because as Mr. Friedersdorf indicates, there is personal involvement as well as Commission involvement. This particular nominee has severed his source of livelihood based on good faith that his candidacy would be confirmed in normal procedures, and as of the 1st of July he severed his source of income. So there is that kind of economic impact upon this man.

I think, too, that when you consider that we ask good people to offer their services to Federal, State, and local governments, they expect those matters to be handled in a fair and expeditious manner.

Mr. TIERNAN. I might say, Senator, that we have been really blessed in the sense that Commissioner Thompson could have just packed and