Agency Procedure for Disclosure of Documents and Information in the Enforcement Process, 34986-34992 [2011-14096]

Agencies

• Federal Election Commission

[Federal Register Volume 76, Number 115 (Wednesday, June 15, 2011)]
[Notices]
[Pages 34986-34992]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-14096]



[[Page 34986]]

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FEDERAL ELECTION COMMISSION

[Notice 2011-06]


Agency Procedure for Disclosure of Documents and Information in 
the Enforcement Process

AGENCY: Federal Election Commission.

ACTION: Notice of Agency Procedure.

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SUMMARY: The Federal Election Commission (``Commission'') is 
establishing an agency procedure to formally define the scope of 
documents that will be provided to respondents by the agency, and to 
formalize the agency's process of disclosing such documents, during the 
Commission's investigation in enforcement matters brought under the 
Federal Election Campaign Act of 1971, as amended (the Act).

DATES: Effective June 30, 2011.

FOR FURTHER INFORMATION CONTACT: William A. Powers or Ana J. Pena-
Wallace, Attorneys, 999 E Street, NW., Washington, DC 20463, (202) 694-
1650 or (800) 424-9530.

SUPPLEMENTARY INFORMATION:

I. Recent Changes to the Commission's Enforcement Procedures

    The Commission has, in recent years, adopted several changes to its 
enforcement process in an effort to provide complainants, respondents 
and the public with greater transparency with respect to the 
Commission's process.
    On May 1, 2003, the Commission published a Notice of Public Hearing 
and Request for Public Comment concerning its enforcement 
procedures.\1\ The Commission received written comments from the 
public, many of which urged increased transparency in Commission 
procedures and expanded opportunities to contest allegations.\2\ On 
June 11, 2003, the Commission held an open hearing on its enforcement 
procedures during which the Commission considered written comments 
received and oral testimony from several witnesses. In response to 
issues raised in written comments and at the hearing, the Commission 
issued several new agency procedures.\3\
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    \1\ See Enforcement Procedures, 68 FR 23311 (May 1, 2003), 
available at http://www.fec.gov/agenda/agendas2003/notice2003-09/fr68n084p23311.pdf.
    \2\ Comments and statements for the record are available at 
http://www.fec.gov/agenda/agendas2003/notice2003-09/comments.shtml.
    \3\ See Statement of Policy Regarding Deposition Transcripts in 
Nonpublic Investigations, 68 FR 50688 (Aug. 22, 2003), available at 
http://www.fec.gov/agenda/agendas2003/notice2003-15/fr68n163p50688.pdf; Statement of Policy Regarding Treasurers Subject 
to Enforcement Proceedings, 70 FR 3 (Jan. 3, 2005), available at 
http://www.fec.gov/law/policy/2004/notice2004-20.pdf; Procedural 
Rules for Probable Cause Hearings, 72 FR 64919 (Nov. 19, 2007), 
available at http://www.fec.gov/law/cfr/ej_compilation/2007/notice_2007-21.pdf.
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    On December 8, 2008, the Commission issued a Notice of Public 
Hearing and Request for Public Comment regarding the compliance and 
enforcement aspects of its agency procedures.\4\ There were numerous 
written comments filed in response to the Notice and on January 14-15, 
2009, the Commission received testimony at a public hearing.\5\
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    \4\ See Agency Procedures, 73 FR 74495 (Dec. 8, 2008), available 
at http://www.fec.gov/law/policy/enforcement/notice_2008-13.pdf.
    \5\ The comments received by the Commission, as well as the 
transcript of the hearing are available at http://www.fec.gov/law/policy/enforcement/publichearing011409.shtml.
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    Some commenters proposed alternative procedures with respect to 
information and documents in the possession of the Commission. One 
commenter recommended instituting a program whereby potential 
respondents in internally generated matters \6\ would be given a 
written summary of the matter and an opportunity to respond in writing 
before the Commission makes a reason to believe (RTB) finding and to 
provide earlier notice to respondents about the Office of General 
Counsel's (OGC) recommendation to the Commission.\7\ Other commenters 
urged the Commission to adopt procedures to provide respondents with 
the opportunity to review and respond to any adverse course of action 
recommended by the Commission's Office of General Counsel before the 
Commission considers such recommendation.\8\ Still others requested 
even more general access by respondents to documents and information 
held by the Commission.\9\
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    \6\ Enforcement matters may be internally generated based on 
information ascertained by the Commission in the normal course of 
carrying out its supervisory responsibilities. See 2 U.S.C. 437g. 
These non-complaint generated matters can arise from internal 
referrals to the Office of General Counsel from the Commission's 
Reports Analysis Division or Audit Division.
    \7\ See Comment of Scott E. Thomas dated January 5, 2009, 
available at http://www.fec.gov/law/policy/enforcement/2009/comments/comm15.pdf.
    \8\ See Comments of Perkins Coie LLP Political Law Group dated 
January 5, 2009, available at http://www.fec.gov/law/policy/enforcement/2009/comments/comm25.pdf.
    \9\ See Comments of Election Law and Government Ethics Practice 
Group of Wiley Rein LLP dated January 5, 2009, available at http;//
www.fec.gov/law/policy/enforcement/2009/comments/comm33.pdf; 
Comments of Perkins Coie LLP Political Law Group dated January 5, 
2009, available at http://www.fec.gov/law/policy/enforcement/2009/comments/comm25.pdf; Comments of Laurence E. Gold dated January 5, 
2009, available at http://www.fec.gov/law/policy/enforcement/2009/comments/comm20.pdf; Comments of Robert K, Kelner dated January 5, 
2009, available at http://www.fec.gov/law/policy/enforcement/2009/comments/comm10.pdf.
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    The Commission has since updated and augmented several of its 
procedures including the adoption of: (1) A pilot program providing 
opportunity to persons requesting an advisory opinion to appear before 
the Commission to answer questions,\10\ (2) a pilot program providing 
audited committees with an opportunity to request a hearing before the 
Commission prior to the Commission's adoption of a Final Audit 
Report,\11\ and (3) a procedure providing respondents with notice of a 
non-complaint generated referral \12\ and an opportunity to respond 
prior to the Commission's consideration of whether it has reason to 
believe that a violation has occurred.\13\ Further, in December 2009, 
the Commission issued a Guidebook for Complainants and Respondents on 
the FEC Enforcement Process, which provides a step-by-step guide to 
assist and educate complainants, respondents and the public concerning 
the Commission enforcement process.\14\
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    \10\ See Advisory Opinion Procedures, 74 FR 32160 (July 7, 
2009), available at http://www.fec.gov/law/cfr/ej_compilation/2009/notice_2009-11.pdf.
    \11\ See Procedural Rules for Audit Hearings, 74 FR 33140 (July 
10, 2009), available at http://www.fec.gov/law/cfr/ej_compilation/2009/notice_2009-12.pdf.
    \12\ Non-complaint generated referrals, also referred to as 
``internally generated matters,'' are based on information 
ascertained by the Commission in the normal course of carrying out 
its supervisory responsibilities. See 2 U.S.C. 437g and note 6 
above.
    \13\ See Procedural Rule for Notice to Respondents in Non-
Complaint Generated Matters, 74 FR 38617 (August 4, 2009), available 
at http://www.fec.gov/law/cfr/ej_compilation/2009/notice_2009-18.pdf.
    \14\ This Guidebook is available at http://www.fec.gov/em/respondent_guide.pdf.
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    The procedure set forth herein formalizes the Commission's policy 
on disclosure to respondents of relevant information gathered by the 
Commission in the investigative stage of its enforcement proceedings.

II. Disclosure of Exculpatory Information

A. Criminal Proceedings: The Constitutional Obligation Under Brady--the 
Government's Duty To Disclose

    One issue that must inform the Commission in its consideration of 
any procedure regarding the disclosure of documents and information to 
respondents in the enforcement process is whether, and to what extent, 
there are relevant requirements or constraints imposed by the United 
States Constitution. The seminal Supreme Court case involving the 
Constitutional

[[Page 34987]]

parameters required by, and imposed upon, the government, in the 
context of criminal proceedings, is Brady v. Maryland.\15\ Brady held 
that the Due Process Clause of the Fifth Amendment to the United States 
Constitution requires the government to provide criminal defendants 
with exculpatory evidence--i.e., ``evidence favorable to an accused,'' 
that is ``material to guilt or punishment''--known to the government 
but unknown to the defendant.
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    \15\ Brady v. Maryland, 373 U.S. 83, 87-88 (1963) (Brady).
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    As noted, the Supreme Court in Brady held that the Due Process 
Clause requires the government to provide criminal defendants with 
exculpatory or potentially exculpatory evidence that is ``material to 
guilt or punishment.'' ``The rationale underlying Brady is not to 
supply a defendant with all the evidence in the Government's possession 
which might conceivably assist in the preparation of his defense, but 
to assure that the defendant will not be denied access to exculpatory 
evidence known only to the Government.'' \16\ Brady is a rule of 
disclosure, not of discovery.\17\ Therefore, Brady obligations apply 
even when a defendant does not request the evidence.\18\ The 
obligations also apply regardless of the good faith of the 
prosecutor.\19\ However, no constitutional duty exists under Brady to 
provide evidence already in the defendant's possession or which can be 
obtained with reasonable diligence.\20\
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    \16\ United States v. LeRoy, 687 F.2d 610, 619 (2d Cir. 1983) 
(citations omitted).
    \17\ See United States v. Bagley, 473 U.S. 667, 675 n.7 (1985) 
(Bagley).
    \18\ See United States v. Agurs, 427 U.S. 97, 107-10 (1976).
    \19\ Brady, 373 U.S. at 87.
    \20\ See, e.g., United States v. Meros, 866 F.2d 1304, 1308 
(11th Cir 1989); Hoke v. Netherland, 92 F.3d 1350, 1355-56 (4th Cir. 
1996); United States v. Beaver, 524 F.2d 963, 966 (5th Cir. 1975).
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    In Giglio v. United States, 405 U.S. 150, the Supreme Court went 
one step further by requiring disclosure in criminal proceedings 
``[w]hen the `reliability of a particular witness may well be 
determinative of guilt or innocence,' '' and the prosecution has 
evidence that impeaches that witness' testimony.\21\ ``Such 
[impeachment] evidence is `evidence favorable to an accused' so that if 
disclosed and used effectively, it may make the difference between 
conviction and acquittal.'' \22\ For example, courts have held that 
impeachment evidence for a key testifying witness includes but is not 
limited to the following: Prior statements by a witness that are 
materially inconsistent with the witness's trial testimony; \23\ a 
conviction of perjury; \24\ prosecutorial intimidation of a witness; 
\25\ and plea bargains and informal statements by the prosecution that 
a witness would not be prosecuted in exchange for his testimony.\26\
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    \21\ Giglio v. United States, 405 U.S. 150, 154-55 (1972) 
(Giglio).
    \22\ Bagley, 473 U.S. at 676 (quoting Brady, 373 U.S. at 87).
    \23\ Id. at 677.
    \24\ United States v. Cuffie, 80 F.3d 514, 517-19 (D.C. Cir. 
1996).
    \25\ Simmons v. Beard, 581 F.3d 158, 169 (3rd Cir. 2009).
    \26\ Giglio, 405 U.S. at 154-55; United States v. Edwards, 191 
F. Supp. 2d 88, 90 (D.D.C. 2002); United States v. Buettner-Janusch, 
500 F. Supp. 1287, 1288 (S.D.N.Y. 1980).
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    Because Brady disclosure in criminal proceedings is required under 
the Due Process Clause, legal privileges against discovery such as 
attorney-client, work-product, or deliberative process do not allow the 
government in criminal proceedings to avoid disclosure on these 
grounds.\27\ However, courts have recognized that Brady does not apply 
to attorney strategies, legal theories, and evaluations of evidence 
because they are not ``evidence.'' \28\
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    \27\ See Charles Alan Wright & Arthur R. Miller, Federal 
Practice & Procedure 254 (4th ed. 2009); United States v. Goldman, 
439 F. Supp. 337, 350 (S.D.N.Y. 1977).
    \28\ Morris v. Ylst, 447 F.3d 735, 742 (9th Cir. 2006); U.S. v. 
NYNEX Corp., 781 F. Supp. 19, 25-26 (D.D.C. 1991); see Williamson v. 
Moore, 221 F.3d 1177, 1182 (11th Cir. 2000).
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B. The Legal, Professional, and Ethical Duties To Disclose--the 
Lawyer's Independent Obligations in Criminal Proceeding

    In addition to, and quite separate from, the Constitutional 
requirements in criminal cases, there is broad acceptance in the legal 
and judicial professions that there is also an ethical obligation to 
provide exculpatory or incriminating information to respondents and 
litigants that, if not provided, may negatively impact the ability of a 
respondent or litigant to obtain a just result through a fair and 
impartial proceeding with the government.
    For example, Rule 3.8(d) of the American Bar Association's Model 
Rules of Professional Conduct (ABA Model Rules), imposes an ethical 
duty on criminal prosecutors that is separate and independent from the 
Constitutional disclosure obligations addressed in Brady. The ABA Model 
Rules are in force in most State courts and many Federal Courts. 
Specifically, Rule 3.8(d) requires that a criminal prosecutor ``make 
timely disclosure to the defense of all evidence or information known 
to the prosecutor that tends to negate the guilt of the accused or 
mitigates the offense'' so that the defense can make meaningful use of 
the evidence and information in making such decisions as whether to 
plead guilty and how to conduct its defense.\29\
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    \29\ See American Bar Association, Model Rules of Professional 
Conduct, Rule 3.8, Special Responsibilities of a Prosecutor, 
available at http://www.abanet.org/cpr/mrpc/rule_3_8.html. See 
also Formal Opinion 09-454, Prosecutor's Duty to Disclose Evidence 
and Information Favorable to the Defense, American Bar Association, 
Standing Committee on Ethics and Professional Responsibility, 
available at http://www.nacdl.org/public.nsf/whitecollar/
ProsecutorialMisconduct/$FILE/09-454.pdf.
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    The Supreme Court has also referred to the status of a U.S. 
Attorney in the ``Federal system'' as ``the representative not of an 
ordinary party to a controversy, but of a sovereignty whose obligation 
to govern impartially is as compelling as its obligation to govern at 
all; and whose interest, therefore, in a criminal prosecution is not 
that it shall win a case, but that justice shall be done.''\30\ 
Therefore, both Constitutional issues and ethical issues must be 
considered when a procedure such as the one enunciated here today is 
formulated and adopted.
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    \30\ Berger v United States, 295 U.S. 78, 88 (1935); see also 
Statement of Attorney General Eric Holder Regarding United States v. 
Theodore F. Stevens, available at http://www.justice.gov/opa/pr/2009/April/09-ag-288.html.
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C. Disclosure in Governmental Civil Proceedings

    Courts have held that the Due Process Clause does not require 
application of Brady in administrative proceedings.\31\ Nevertheless, 
some Federal agencies recently have applied Brady principles to their 
civil administrative enforcement proceedings. For example, the Federal 
Energy Regulatory Commission (FERC) recently issued a policy statement 
that provides respondents with access to certain exculpatory evidence 
during that agency's investigations and adjudications.\32\ Under FERC's 
regulations, FERC can conduct either an informal or formal 
investigation. The new FERC Policy Statement provides, in relevant part 
that ``[d]uring the course of an investigation * * *, Enforcement staff 
will scrutinize materials it receives

[[Page 34988]]

from sources other than the investigative subject(s) for material that 
would be required to be disclosed under Brady. Any such materials or 
information that are not known to be in the subject's possession shall 
be provided to the subject.'' \33\
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    \31\ Mister Discount Stockbrokers v. SEC, 768 F.2d 875, 878 (7th 
Cir. 1985) (no right to exculpatory evidence in National Association 
of Securities Dealers (NASD) proceedings which are treated the same 
as administrative agency action); Sanford v. NASD, 30 F. Supp. 2d 1, 
22 n.12 (D.D.C. 1998) (same); NLRB v. Nueva Eng'g, Inc., 761 F.2d 
961, 969 (4th Cir. 1985) (``[W] e find Brady inapposite and hold 
that the ALJ properly denied Nueva's demand for exculpatory 
materials.'').
    \32\ See FERC Policy Statement on Disclosure of Exculpatory 
Materials, Docket No. PL10-1-000, 129 FERC 61,248 (Dec. 17, 2009) 
(FERC Policy Statement), available at http://www.ferc.gov/whats-new/comm-meet/2009/121709/M-2.pdf.
    \33\ See FERC Policy Statement at paragraph 9.
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    Similarly, the Securities and Exchange Commission (SEC) adopted a 
rule of practice in 1995 for its civil enforcement proceedings whereby 
its Division of Enforcement shall make available for inspection and 
copying ``documents obtained by the Division prior to the institution 
of proceedings, in connection with the investigation leading to the 
Division's recommendation to institute proceedings.'' \34\ The SEC rule 
permits certain documents to be withheld by the agency, including those 
documents that are privileged, pre-decisional or work product, a 
document that would identify a confidential source, or documents 
identified to a hearing officer as being properly withheld for good 
cause.\35\
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    \34\ See 17 CFR 201.230(a)(1) (2010), available at http://edocket.access.gpo.gov/cfr_2010/aprqtr/pdf/17cfr201.230.pdf.
    \35\ 17 CFR 201.230(b)(1).
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    However, SEC rule 201.230(b)(2) specifically states that nothing in 
the rule ``authorizes the [SEC's] Division of Enforcement in connection 
with an enforcement or disciplinary proceeding to withhold, contrary to 
the doctrine of Brady, * * * documents that contain material 
exculpatory evidence.'' \36\ Although the SEC has limited the 
application of rule 201.230 to require the ``production of examination 
and inspection reports to circumstances where the Division of 
Enforcement intends to introduce the report into evidence, either in 
reliance on the report to prove its case, or to refresh the 
recollection of any witness,'' this limitation ``does not alter the 
requirement that the Division produce documents containing material 
exculpatory evidence as required by Brady v. Maryland.'' \37\
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    \36\ 17 CFR 201.230(b)(2).
    \37\ See Securities and Exchange Commission, Explanation and 
Justification: Adoption of Amendments to the Rules of Practice and 
Delegations of Authority of the Commission, 69 FR 13166, 13170 (Mar. 
19, 2004), available at http://www.sec.gov/rules/final/34-49412.htm.
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    As with FERC and the SEC, the Commodity Futures Trading Commission 
(CFTC) also provides for disclosure of certain information during the 
``discovery'' phase of its formal adjudications.\38\ In addition to a 
prehearing exchange of documents, identities of witnesses, and an 
outline of its case, the CFTC's Division of Enforcement ``shall make 
available for inspection and copying by the respondents'' certain 
documents.\39\ These documents include all documents subpoenaed by the 
CFTC and all transcripts of investigative testimony and exhibits to 
those transcripts.\40\ However, the Division of Enforcement may 
withhold, for example, the identity of a confidential source, 
confidential investigatory techniques, and other confidential 
information, such as trade secrets.\41\ Privileged documents and 
information may also be withheld by CFTC's Division of Enforcement.\42\
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    \38\ See 17 CFR 10.42 (2010), available at http://edocket.access.gpo.gov/cfr_2010/aprqtr/pdf/17cfr10.42.pdf.
    \39\ See 17 CFR 10.42(a)(1) & (2); 17 CFR 10.42(b)(1).
    \40\ Id. See also In re First National Monetary Corp., Opinion 
and Order, CFTC No. 79-56, CFTC No. 79-57 (Nov. 13, 1981) (Any 
material * * * known to the Division of Enforcement, or which by the 
exercise of due diligence may become known to the Division, that is 
arguably exculpatory and material to guilt or punishment within the 
meaning of Brady [and its progeny] should be either provided to 
respondent directly, or provided to the [ALJ], for his determination 
as to whether it is productible [sic] or not).
    \41\ 17 CFR 10.42(b)(2).
    \42\ 17 CFR 10.42(b)(3).
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    In the case of this Commission, as a Federal agency engaged in 
proceedings to find liability of persons under Federal laws, whose 
conduct can lead to civil penalties and potentially has the reach of 
the criminal system, it has been the Commission's practice to provide 
certain types of information to respondents. The Commission is 
formalizing its practice to ensure effective and fair enforcement of 
the Act.
    The Commission recognizes that Brady was decided in the context of 
a criminal proceeding and that its holding, therefore, does not extend, 
by its own terms, to a Federal agency civil enforcement agency 
proceeding. However, the Commission is empowered (a) To civilly pursue 
matters that may have potential criminal consequences, and (b) to 
engage respondents in the enforcement process, and possibly in 
litigation if the Commission and respondents are unable to reach a 
mutually acceptable voluntary conciliation agreement, where a Court may 
impose a civil monetary penalty, injunctive, or other relief. See 2 
U.S.C. 437g(a)(6)(A).
    The Commission has also entered into a Memorandum of Understanding 
with the Department of Justice (DOJ) whereby the Commission will refer 
certain matters to the DOJ for criminal prosecution review and whereby 
DOJ will refer matters to the Commission.\43\ Nothing in the procedure 
adopted herein is intended to impact in anyway the Commission's conduct 
with respect to, and relationship with, the DOJ, including any 
agreement between the Commission and the DOJ whereby the Commission 
agrees not to disclose information obtained from the DOJ. The procedure 
adopted herein provides for mandatory withholding of information by the 
Office of General Counsel of any documents or information submitted to 
the Commission by the DOJ either pursuant to an agreement between the 
Commission and the DOJ or simply upon request from the DOJ not to 
disclose the information.\44\ Moreover, the procedure adopted herein 
protects from disclosure not only the information submitted by the DOJ 
but also any information that was derived from such information, 
including all separate documents quoting, summarizing, or otherwise 
using information provided by the DOJ.\45\
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    \43\ See Department of Justice and Federal Election Commission, 
Memorandum of Understanding, 43 F 5441 (Feb. 8, 1978).
    \44\ See Updated Formal Procedure at paragraph (b)(1)(v), below.
    \45\ Id.
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    Accordingly, the Constitutional and ethical principles of fairness 
and due process in Brady, as well as the procedures adopted by other 
Federal agencies, inform the Commission's adoption of the procedure 
announced today in its civil administrative enforcement process.
    In summary, while the Commission does not believe that the 
Constitution requires the agency to institute a procedure requiring 
disclosure of documents and information, including exculpatory 
information, to respondents in its civil enforcement process, the 
Commission's enforcement proceedings may, in some instances, inform 
potential or concurrent criminal proceedings. Accordingly, adopting a 
formal internal procedure requiring disclosure of information to 
respondents will (1) Eliminate uncertainty regarding the Commission's 
position on this issue, (2) serve the Commission's goal of providing 
fairness to respondents, and (3) set forth a written procedural 
framework within which disclosures are made.

III. Current Disclosure Process

    Before the Commission may determine that there is probable cause to 
believe a violation of the Act has occurred or is about to occur, the 
Act permits respondents to present directly to the Commission their 
interests and positions on the matter under review.

[[Page 34989]]

The Commission's General Counsel shall notify respondents prior to any 
recommendation to the Commission by the General Counsel to proceed to a 
vote on probable cause.\46\ Included in this notification is a written 
brief stating the position of the General Counsel on the legal and 
factual issues of the case to which respondents may reply.\47\ This 
allows the Commission to be informed not only by the recommendations of 
its General Counsel, but also by the factual presentations and legal 
arguments of respondents. By requirement of the Act, or by its 
discretion, the Commission has similar procedures at various stages of 
the enforcement process to keep the Commissioners informed both by its 
staff and by respondents.
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    \46\ See 2 U.S.C. 437g(a)(3).
    \47\ See 2 U.S.C. 437g(a)(3); see also 11 CFR 111.16.
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    In addition, while the Commission may attempt to conciliate matters 
with respondents at any time, the Act requires the Commission to 
attempt conciliation after it finds probable cause.\48\ If the 
Commission determines that there is probable cause, the Act requires 
that, for a period of at least 30 day (or at least 15 days, if the 
probable cause determination occurs within 45 days of an election), the 
Commission must attempt to correct or prevent the violation through 
conference, conciliation, and persuasion.\49\
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    \48\ See 2 U.S.C. 437g(a)(4).
    \49\ Id.
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    The General Counsel provides a probable cause brief to respondents 
presenting OGC's analysis of the information and may address any 
available exculpatory evidence. The Commission's current practice at 
the probable cause stage has generally been to provide respondents, 
upon request, with information cited or relied upon (whether or not 
cited) in the General Counsel's probable cause brief. Where possible, 
this has included documents containing the information upon which OGC 
is relying to support its recommendation to the Commission that there 
is probable cause to believe a violation of the Act has occurred. This 
production of documents is subject to all applicable privileges and 
confidentiality considerations, including the confidentiality 
provisions of the Act. Where such considerations apply, OGC has 
generally provided only the relevant information derived from the 
document, and not the document itself. Examples of the types of 
documents OGC has provided at this stage are deposition transcripts, 
responses to formal discovery, and documents obtained in response to 
requests for documents. In instances where OGC obtains factual 
information from a source other than the respondent that tends to 
exculpate the respondent, OGC may note the existence of the information 
in its brief, particularly if OGC does not know whether a respondent is 
already aware of the information.\50\ In instances where OGC provides 
mitigating or exculpatory information, OGC provides any documents cited 
to in connection with that information, such production is also subject 
to the same privilege and confidentiality concerns noted above.
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    \50\ When advising the Commission on whether OGC intends either 
to proceed with its probable cause recommendation or to withdraw the 
recommendation, OGC will also provide and discuss the potentially 
exculpatory evidence, as well as any available mitigating evidence. 
See 11 CFR 111.16(d).
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    In two limited instances, OGC may provide information to 
respondents earlier than the probable cause stage in the enforcement 
process. First, pursuant to the Commission's Statement of Policy 
Regarding Deposition Transcriptions in Nonpublic Investigations, all 
deponents, including respondent deponents, may obtain a copy of the 
transcript of their own deposition, including any exhibits that may 
have been obtained from sources other than the respondent, provided 
there is no good cause to limit the deponent's access to the 
transcript.\51\ Second, OGC may share information, including documents, 
with respondents during the post-investigative pre-probable cause 
conciliation process to assist in explaining the factual basis for a 
violation. That information may include documents not already in the 
respondent's possession. This practice is used solely for the purpose 
of facilitating conciliation.
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    \51\ See Statement of Policy Regarding Deposition Transcriptions 
in Nonpublic Investigations, 68 FR 50688 (Aug. 22, 2003), available 
at http://www.fec.gov/agenda/agendas2003/notice2003-15/fr68n163p50688.pdf.
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    As the current practice has demonstrated, the Commission's probable 
cause considerations and subsequent conciliation efforts are furthered 
when, in presenting their respective positions, respondents have the 
greatest practicable access to documents and information gathered by 
the agency, including certain information that might be favorable to 
the respondent. This allows both the Commission's Office of General 
Counsel and the respondents that are under investigation to present 
fully informed submissions and frame legal issues for the Commission's 
consideration.
    At the same time, however, the Act and other laws restrict 
information that the Commission may make public without the consent of 
persons under investigation.\52\ Investigations that involve multiple 
respondents, each of whom may be at different stages of the enforcement 
process, raise questions as to what documents and information the 
Commission may disclose to any given respondent before determining 
probable cause.
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    \52\ See, e.g., 2 U.S.C. 437g(a)(4)(B)(i) and (a)(12).
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    The procedure adopted herein is not intended to expand the 
disclosure of information regarding a co-respondent as to any such 
information that is subject to existing confidentiality requirements 
under the Act. In order to reconcile the Commission's interests in 
permitting respondents to present fully their positions without 
compromising the Commission's confidentiality obligations, the 
Commission is formalizing its procedure. This agency procedure 
clarifies how the Commission will, consistent with the confidentiality 
provisions of 2 U.S.C. 437g(A)(12), enhance its enforcement process by 
permitting increased access to documents and information held by the 
Commission.
    This procedure will allow efficient, fair and just resolution of 
issues regarding disclosure of exculpatory information and avoid 
unnecessary consumption of respondent and Commission staff resources in 
future proceedings.

IV. The Updated Formal Procedure

    The Commission is formalizing its agency procedure to provide 
respondents in enforcement proceedings with relevant information 
ascertained by the Commission as the result of an investigation. The 
Commission believes that, while not mandated by the Constitution, the 
principle of Brady, and its judicial progeny, should apply following 
investigations conducted under Section 437g of the Act and Subpart A of 
Part 111 of the Commission's regulations.\53\
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    \53\ See generally 2 U.S.C. 437g and 11 CFR part 111.
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    The Commission believes that formalizing the procedure will promote 
fairness in the Commission's Section 437g enforcement process. The 
Commission also believes the procedure articulated in this Notice will 
promote administrative efficiency and certainty, and will contribute to 
the Commission's goal of open, fair and just investigations and 
enforcement proceedings.
    For purposes of this procedure, the term ``documents'' includes 
writings, drawings, graphs, charts, photographs, recordings and other 
data compilations, including data stored by computer, from which 
information can be obtained.

[[Page 34990]]

    For purposes of this procedure, the term ``exculpatory 
information'' means information gathered by the Office of General 
Counsel in its investigation, not reasonably knowable by the 
respondent, that is relevant to a possible violation of the Act or the 
Commission's regulations, under investigation by the Commission and 
that may tend to favor the respondent in defense of violations alleged 
or which would be relevant to the mitigation of the amount of any civil 
penalty resulting from a finding of such a violation by a court.
    The procedure is as follows:

(a) Documents To Be Produced or Made Available

    (1) Subject to paragraphs (b) through (e) of this procedure, and 
unless otherwise directed by the Commission, by an affirmative vote of 
four or more Commissioners,\54\ the Office of General Counsel shall 
make available to a respondent all relevant documents gathered by the 
Office of General Counsel in its investigation, not publicly available 
and not already in the possession of the respondent, in connection with 
its investigation of allegations against the respondent. This includes 
any documents that contain exculpatory information, as defined herein. 
This shall not include any documents created internally by a 
Commissioner or by a member of a Commissioner's staff. This shall be 
done either by producing copies in electronic format or permitting 
inspection and copying of such documents. The documents covered by this 
procedure shall include:
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    \54\ In any instance in which the Office of General Counsel has 
concerns that disclosure of information pursuant to this procedure 
would lead to a result that is materially inconsistent with either 
the Commission's administrative responsibilities or with the 
promotion of fairness and efficiency in the Commission's enforcement 
process, the Office of General Counsel may seek formal guidance from 
the Commission on how it should proceed.
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    (i) Documents, not in possession of a respondent, turned over in 
response to any subpoenas or other requests, written or otherwise;
    (ii) All deposition transcripts and deposition transcript exhibits; 
and
    (iii) Any other documents, not otherwise publicly available and not 
in possession of a respondent, gathered by the Commission from sources 
outside the Commission.
    (2) Nothing in this paragraph (a) shall limit the authority of the 
Commission, by an affirmative vote of four or more Commissioners, to 
make available or withhold any other document, or shall limit the 
capacity of a respondent to seek access to, or production of, a 
document through timely written requests to the Commission subsequent 
to the production of documents pursuant to paragraph (d) below. If 
respondent submits such a written request, respondent must, if 
requested to do so by the Commission, sign a tolling agreement for the 
time necessary to resolve the request.
    (3) Nothing in this procedure requires the Office of General 
Counsel to conduct any search for materials other than those it 
receives in the course of its investigatory activities. This procedure 
does not require staff to conduct any search for exculpatory materials 
that may be found in the offices of other agencies or elsewhere.

(b) Documents That May Be Withheld

    (1) Unless otherwise determined by the Commission, as provided in 
subparagraph (2) below, the Office of General Counsel shall withhold a 
document or a category of documents from a respondent if:
    (i) The document contains privileged information, such as, but not 
limited to, attorney-client communications, attorney-work product, 
staff-work product or work product subject to the deliberative process 
privilege; provided, however, if the document contains only a portion 
of material that should not be disclosed, if possible to do so 
effectively, the Office of General Counsel shall excise or redact from 
such document any information that prevents disclosure if the remaining 
portion is informative and otherwise qualifies for disclosure as 
provided herein, prior to disclosing the document or information 
contained therein;
    (ii) The document or category of documents is determined by the 
General Counsel to be not relevant to the subject matter of the 
proceeding;
    (iii) The Commission is prevented by law or regulation from 
disclosing the information or documents, including, under certain 
circumstances, information obtained from, or regarding, co-respondents; 
\55\
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    \55\ See paragraph (e) of this procedure addresses issues 
regarding documents and information that may be subject to 
confidentiality pursuant to sections 437g(a)(4)(B)(i) and 
437g(a)(12) of the Act. 2 U.S.C. 437g(a)(4)(B)(i) and 437g(a)(12).
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    (iv) The document contains information only a portion of which 
prevents disclosure as provided herein, and that portion cannot be 
excised or redacted without affecting the main import of the document; 
or
    (v) The Commission obtained the information or documents from the 
Department of Justice or another government entity, either pursuant to 
a written agreement with the Department of Justice, or the other 
government entity, not to disclose the information, documents or 
category of documents or upon written request from the Department of 
Justice, or the other government entity. Withholding any such 
information obtained from the Department of Justice also includes 
withholding any information that was derived from such information, 
including all separate documents quoting, summarizing, or otherwise 
using information provided by the other government entity.
    (2) For any document withheld by the General Counsel pursuant to 
subparagraphs (1)(i)-(1)(iv) above, the Commission may, pursuant to a 
timely written request by the respondent or otherwise, consider whether 
to make available such document and, after consideration of relevant 
law and regulation, by an affirmative vote of four or more 
Commissioners, may determine, consistent with relevant law and 
regulation, whether or not it is appropriate to produce such document. 
If respondent submits such a written request, it must be within 15 days 
of the Commission's production of documents and respondent must, if 
requested to do so by the Commission, sign a tolling agreement for the 
time necessary to resolve the request.
    (3) For any document withheld by the General Counsel pursuant to a 
written agreement with, or written request from, the Department of 
Justice or the other government entity under subparagraph (1)(v) above, 
the General Counsel shall provide a report to the Commission 
identifying the documents and information that has been withheld and 
providing the Commission with a copy of the written agreement with, or 
request from, the Department of Justice or the other government entity.

(c) Withheld Document List

    (1) Within ten business days of receipt of documents disclosed 
pursuant to paragraph (d) below, a respondent may request in writing 
that the Commission direct the General Counsel to produce to the 
respondent a list of documents or categories of documents withheld 
pursuant to paragraph (b)(1) of this procedure. If respondent submits 
such a written request, respondent must sign a tolling agreement for 
the time necessary, not to exceed 60 days, for the General Counsel to 
provide the list of documents, unless the Commission, by an affirmative 
vote of four or more Commissioners, determines that a tolling agreement 
is not required. Requests for a list of documents or categories of 
documents shall be granted, unless the Commission, by an

[[Page 34991]]

affirmative vote of four or more Commissioners, denies the request, in 
whole or in part. Once the Commission has voted upon the written 
request, respondent may not seek reconsideration of that decision.
    (2) When similar documents are withheld pursuant to paragraph 
(b)(1), those documents may be identified by category instead of by 
individual document.

(d) Timing of Production or Inspection and Copying

    (1) The disclosure of documents and information referenced herein 
shall be made pursuant to a timely written request by the respondent 
filed within fifteen days of the dates specified in subparagraphs (i) 
and (ii) below, and subject to paragraph (e), or unless otherwise 
determined by the Commission by an affirmative vote of four or more 
Commissioners. The General Counsel shall produce in electronic format, 
or commence making documents available to a respondent for inspection 
and copying pursuant to this procedure, at the earlier of the 
following:
    (i) The date of the General Counsel's notification to a respondent 
of a recommendation to the Commission to proceed to a vote on probable 
cause; or
    (ii) No later than seven days after certification of a vote by the 
Commission to conciliate with a respondent.

(e) Issues Respecting Documents Provided by, or Relating to, Co-
respondents

    (1) If there is more than one respondent that is under 
investigation in the same matter, or in related matters, before the 
General Counsel may produce documents, other than exculpatory 
information or documents cited or relied on in the General Counsel's 
brief that accompanies its notice of a recommendation to vote on 
probable cause, to one co-respondent that either (a) have been provided 
to the Commission by another co-respondent or (b) that relate to 
another co-respondent, the General Counsel must obtain a 
confidentiality waiver from the co-respondent who provided the document 
or about whom the document relates. Additionally, the respondent 
receiving such documents may be required to sign a nondisclosure 
agreement to keep confidential any document or information it obtains 
from the Commission.
    (2) If the co-respondent who provided the document or about whom 
the document relates does not agree to provide a confidentiality 
waiver, the General Counsel shall, if it is possible to do so 
effectively, in accordance with 2 U.S.C. 437g(a)(4)(B)(i) and 
437g(a)(12), summarize or redact those portions of the document or 
documents that are subject to confidentiality under the Act, or are 
determined to be in the category of documents to be withheld under 
paragraph (b) in order to remove that portion of material that may not 
be disclosed.
    (3) If the co-respondent who provided the document or about whom 
the document relates does not agree to provide a confidentiality waiver 
and it is not possible to effectively summarize or redact those 
portions of the document or documents that are subject to 
confidentiality, the General Counsel shall seek direction from the 
Commission, by an affirmative vote of four or more Commissioners, 
regarding how to balance the competing concerns of disclosure and 
confidentiality. In any event, the General Counsel shall produce 
complete or appropriately redacted copies of those documents cited or 
relied on in the brief that accompanies its notice of a recommendation 
to vote on probable cause, whether or not the documents have been 
specifically identified in the brief.
    (4) If the confidentiality issue cannot be resolved with respect to 
a co-respondent (e.g., lack of waiver, ineffective redaction, etc.), 
the General Counsel may, in an appropriate case make a recommendation 
to the Commission for segregation of the matters under review.
    (5) If any document or information provided to the Commission by a 
one co-respondent contains exculpatory information, or is cited or 
relied on in the General Counsel's brief that accompanies its notice of 
a recommendation to vote on probable cause for another co-respondent, 
that information or document will be provided to the other co-
respondent, which shall be subject to the same redactions described in 
paragraph (b)(1)(i).
    (6) Before disclosing any portion of the document that raises an 
unresolved confidentiality issue, the General Counsel shall seek a 
determination by the Commission, by an affirmative vote of four or more 
Commissioners, that disclosure of a document containing exculpatory 
information (redacted, summarized, or in any other way altered) 
conforms to the confidentiality provisions of 2 U.S.C. 437g(a)(4)(B)(i) 
and 437g(a)(12).

(f) Place of Inspection and Copying Costs and Procedures

    (1) Documents subject to inspection and copying pursuant to this 
procedure shall be made available to the respondent for inspection and 
copying at the Commission's office, or at such other place as the 
Commission, in writing, may agree. A respondent shall not be given 
custody of the documents or leave to remove the documents from the 
Commission's offices pursuant to the requirements of this procedure 
unless formal written approval is provided by an affirmative vote of 
four or more Commissioners.
    (2) The respondent may obtain a photocopy of any documents made 
available for inspection. The respondent is responsible for all costs 
related to photocopying of any documents.

(g) Continuing Obligation To Produce During Conciliation

    (1) If, prior to the completion of an investigation, the Commission 
votes to enter into conciliation, the General Counsel shall take 
reasonable and appropriate steps to limit any further formal 
investigation related to that respondent, so long as the respondent 
enters into a tolling agreement of the applicable statute of 
limitation. If there is no such tolling agreement, the formal 
investigation and conciliation may take place simultaneously. The 
tolling agreement must have a specific time for its duration approved 
by the Commission, by an affirmative vote of four or more 
Commissioners, and shall not be open-ended. If there is more than one 
respondent under investigation in the same matter, or in related 
matters, and the Commission votes to enter into conciliation with one 
or more respondents prior to the completion of a formal investigation, 
the General Counsel shall take reasonable and appropriate steps to 
limit any further formal investigation as to those respondents in 
conciliation, so long as the respondents enter into a tolling agreement 
of the applicable statute of limitation. If the Commission receives 
documents in the course of the formal investigation as to respondents 
not in conciliation that would otherwise be required to be produced 
under this procedure during such investigation, the Commission shall 
promptly produce them to the respondent in conciliation pursuant to 
this procedure.
    (2) If the Commission receives documents during such conciliation, 
from whatever source, the General Counsel shall within a reasonable 
period of time inform the respondent of any documents obtained that 
would

[[Page 34992]]

otherwise be required to be produced under this procedure, and as to 
such documents, the General Counsel shall timely produce them to the 
respondent, consistent with the statutory confidentiality provision 
preventing disclosure of any information derived in connection with 
conciliation attempts. 2 U.S.C. 437g(a)(4)(B).

V. Failure To Produce Documents as Required Herein--Remedies and 
Consequences

    In the event that a document required to be made available to a 
respondent pursuant to this procedure is not made available, no 
reconsideration by the Commission is required, unless the Commission 
concludes, by an affirmative vote of four or more Commissioners, that 
there is a reasonable likelihood that the decision of the Commission or 
result of the conciliation would have been different than the one made 
had such disclosure taken place. Any failure by the Commission to make 
a document available does not create any rights for a respondent to 
seek judicial review, nor any right for a defendant in litigation to 
request or receive a dismissal or remand or any other judicial remedy. 
A respondent may not request reconsideration by the Commission more 
than ten days after the conclusion of conciliation.

VI. Consequences of Disclosure

    Disclosure of documents pursuant to this procedure is not an 
admission by the Commission that the information or document exculpates 
or mitigates respondent's liability for potential violations of the 
Act.

VII. Applicability During Civil Litigation

    In any civil litigation with the respondent, the discovery rules of 
the court in which the matter is pending, and any order made by that 
court, shall govern the obligations of the Commission. The intention of 
the Commission is for this procedure to serve as internal guidance only 
and the procedure adopted herein does not create any rights that are 
reviewable or enforceable in any court.

VIII. Annual Review

    No later than June 1 of each year, the General Counsel shall 
prepare and distribute to the Commission a report describing the 
application of the procedure adopted herein over the previous year. 
This annual report shall include the General Counsel's assessment of 
whether, and to what extent, the procedure has provided an appropriate 
balance between the Commission's interest in providing respondents with 
relevant documents and information and the confidentiality provisions 
of the Act, consistent with the Commission's goal of maintaining open, 
fair and just investigations and enforcement proceedings, along with 
any recommendations from the General Counsel regarding how the 
Commission could better accomplish that goal.

IX. Conclusion

    Failure to adhere to this procedure does not create a 
jurisdictional bar for the Commission to pursue all remedies to correct 
or prevent a violation of the Act.
    This notice establishes an internal agency procedure for disclosing 
to respondents documents and information acquired by the agency during 
its investigations in the enforcement process. This procedure sets 
forth the Commission's intentions concerning the exercise of its 
discretion in its enforcement program. However, the Commission retains 
that discretion and will exercise it as appropriate with respect to the 
facts and circumstances of each enforcement matter it considers. 
Consequently, this procedure does not bind the Commission or any member 
of the general public, not does it create any rights for respondents or 
third parties. As such, 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 Procedure 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.

    On behalf of the Commission.

    Dated: June 2, 2011.
Caroline C. Hunter,
Vice Chair, Federal Election Commission.
[FR Doc. 2011-14096 Filed 6-14-11; 8:45 am]
BILLING CODE 6715-01-P