Self Reporting of Campaign Finance Violations by FEC



                                        Rules and Regulations                                                                                             Federal Register
                                                                                                                                                          Vol. 72, No. 65

                                                                                                                                                          Thursday, April 5, 2007

                                        This section of the FEDERAL REGISTER                    at the time of a misappropriation, and                         and the value of the petty cash fund
                                        contains regulatory documents having general            the post-discovery steps described                             should be no more than $500.
                                        applicability and legal effect, most of which           below are followed by the committee,
                                        are keyed to and codified in the Code of                                                                          B. Post-Discovery of Misappropriation
                                                                                                the FEC will not seek a monetary
                                        Federal Regulations, which is published under                                                                     Activity
                                                                                                penalty on the political committee for
                                        50 titles pursuant to 44 U.S.C. 1510.                                                                               As soon as a misappropriation is
                                                                                                filing incorrect reports due to the
                                        The Code of Federal Regulations is sold by              misappropriation of committee funds.1                     discovered, the political committee:
                                        the Superintendent of Documents. Prices of              The Commission will also consider the                     b Notifies relevant law enforcement of
                                        new books are listed in the first FEDERAL               presence of some, but not all, of these                        the misappropriation.
                                        REGISTER issue of each week.                            practices, or of comparable safeguards,                   b Notifies the FEC of the
                                                                                                as a mitigating factor in considering any                      misappropriation.
                                                                                                monetary liability resulting from a                       b Voluntarily files amended reports to
                                        FEDERAL ELECTION COMMISSION                             misappropriation.2                                             correct any reporting errors due to
                                                                                                                                                               the misappropriation, as required
                                        11 CFR Part 104                                         A. Internal Controls                                           by the FEC.
                                                                                                b All bank accounts are opened in the                       This notice represents a general
                                        [NOTICE 2007–9]
                                                                                                    name of the committee, never an                       statement of policy announcing the
                                        Statement of Policy; Safe Harbor for                        individual, using the committee’s                     general course of action that the
                                        Misreporting Due to Embezzlement                            Employer Identification Number,                       Commission intends to follow. This
                                                                                                    not an individual’s Social Security                   policy statement does not constitute an
                                        AGENCY:    Federal Election Commission.                     Number.                                               agency regulation requiring notice of
                                        ACTION:   Statement of policy.                          b Bank statements are reviewed for                        proposed rulemaking, opportunities for
                                                                                                    unauthorized transactions and                         public participation, prior publication,
                                        SUMMARY: The Commission is issuing a                                                                              and delay in effective date under 5
                                                                                                    reconciled to the accounting
                                        Statement of Policy to announce that it                     records each month. Further, bank                     U.S.C. 553 of the Administrative
                                        is creating a safe harbor for the benefit                   records are reconciled to disclosure                  Procedures Act (‘‘APA’’). As such, it
                                        of political committees that have certain                   reports prior to filing. The                          does not bind the Commission or any
                                        internal controls in place to prevent                       reconciliations are done by                           member of the general public. The
                                        misappropriations and associated                            someone other than a check signer                     provisions of the Regulatory Flexibility
                                        misreporting. Specifically, the                             or an individual responsible for                      Act, 5 U.S.C. 605(b), which apply when
                                        Commission does not intend to seek                          handling the committee’s                              notice and comment are required by the
                                        civil penalties against a political                         accounting.                                           APA or another statute, are not
                                        committee for filing incorrect reports                  b Checks in excess of $1000 are                           applicable.
                                        due to the misappropriation of                              authorized in writing and/or signed                     Dated: March 22, 2007.
                                        committee funds if the committee has                        by two individuals. Further, all                      Robert D. Lenhard,
                                        the specified safeguards in place.                          wire transfers are authorized in                      Chairman, Federal Election Commission.
                                        EFFECTIVE DATE: April 5, 2007.                              writing by two individuals. The                       [FR Doc. E7–6299 Filed 4–4–07; 8:45 am]
                                        FOR FURTHER INFORMATION CONTACT: Mr.                        individuals who may authorize                         BILLING CODE 6715–01–P
                                        Joseph Stoltz, Assistant Staff Director,                    disbursements or sign checks
                                        Audit Division, 999 E Street, NW.,                          should be identified in writing in
                                        Washington, DC 20463, (202) 694–1200.                       the committee’s internal policies.                    FEDERAL ELECTION COMMISSION
                                        SUPPLEMENTARY INFORMATION: The                          b An individual who does not handle
                                        Commission has encountered a dramatic                       the committee’s accounting or have                    11 CFR Part 111
                                        increase in the number of cases where                       banking authority receives                            [Notice 2007–8]
                                        political committee staff                                   incoming checks and monitors all
                                        misappropriates committee funds.                            other incoming receipts. This                         Policy Regarding Self-Reporting of
                                        Misappropriations are often                                 individual makes a list of all                        Campaign Finance Violations (Sua
                                        accompanied by the filing of inaccurate                     committee receipts and places a                       Sponte Submissions)
                                        disclosure reports with the FEC, leaving                    restrictive endorsement, such as:
                                                                                                    For Deposit Only to the Account of                    AGENCY:    Federal Election Commission.
                                        committees vulnerable to a FEC
                                        enforcement action and potential                            the Payee’’ on all checks.                            ACTION:   Statement of Policy.
                                        liability for those reporting errors. In                b If the committee has a petty cash
                                                                                                                                                          SUMMARY: In order to encourage the self-
                                        response to the rise in this activity, the                  fund, an imprest system 3 is used,
                                                                                                                                                          reporting of violations about which the
                                        Commission has concluded that the                          1 The internal controls set forth here represent the   Commission would not otherwise have
                                        following internal controls are minimal                 minimum efforts a committee must take to qualify          learned, the Commission will generally
                                        safeguards a committee should                           for this safe harbor. The FEC provides additional
                                        implement to prevent misappropriations                  guidance on internal controls best practices at           the last replenishment and the remaining cash
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                                        and associated misreporting.                               always equals the stated amount of the fund. When
                                                                                                   2 This policy does not absolve or mitigate FEC
                                           This policy does not impose new legal                                                                          the fund is replenished the amount of the
                                                                                                liability for individuals responsible or complicit in     replenishment equals the amounts recorded since
                                        requirements on political committees;                   the misappropriations.                                    the prior replenishment and should bring the cash
                                        rather it creates a safe harbor. If the                    3 An imprest fund is one in which the sum of the       balance back to the stated amount. Only one person
                                        following internal controls are in place                disbursements recorded in the petty cash log since        should be in charge of the fund.

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                                        16696               Federal Register / Vol. 72, No. 65 / Thursday, April 5, 2007 / Rules and Regulations

                                        offer penalties between 25% and 75%                     the Commission’s Audit or Reports                     to the Commission’s attention violations
                                        lower than the Commission would                         Analysis Divisions).2                                 of the FECA and Commission
                                        otherwise have sought in identical                         The Commission recently has seen an                regulations and who cooperates with
                                        matters arising by other means. The                     increase in self-reported violations,                 any resulting investigation will also
                                        Commission will also use a new                          which may be attributable, at least in                generally receive appropriate
                                        expedited procedure through which the                   part, to greater attention being placed on            consideration in the terms of an
                                        Commission may allow individuals and                    compliance programs for areas of                      eventual conciliation agreement. For
                                        organizations that self-report violations               potential organizational liability, and               example, the Commission may do one
                                        and that make a complete report of their                recognition that addressing a problem                 or more of the following:
                                        internal investigation to proceed                       through self-auditing and self-reporting                 • Take no action against particular
                                        directly into conciliation prior to the                 may help minimize reputational harm.                  respondents;
                                        Commission determining whether their                    The increase in the number of self-
                                                                                                                                                         • Offer a significantly lower penalty
                                        conduct may have violated statutes or                   reported matters has highlighted the
                                                                                                                                                      than what the Commission otherwise
                                        regulations within its jurisdiction. This               need to increase the transparency of
                                                                                                                                                      would have sought in a complaint-
                                        policy also addresses various issues that               Commission policies and procedures.
                                                                                                Moreover, the Commission seeks to                     generated matter involving similar
                                        can arise in connection with parallel                                                                         circumstances or, where appropriate, no
                                        criminal, administrative or civil                       provide appropriate incentives for this
                                                                                                demonstration of cooperation and                      civil penalty;
                                                                                                responsibility.                                          • Offer conciliation before a finding
                                        DATES:   Effective April 5, 2007.                          On December 8, 2006, the                           of probable cause to believe a violation
                                        FOR FURTHER INFORMATION CONTACT:                        Commission published a proposed                       occurred, and in certain cases proceed
                                        Mark Shonkwiler, Assistant General                      policy statement on self-reporting of                 directly to conciliation without the
                                        Counsel, or April J. Sands, Attorney,                   violations. See Proposed Policy                       Commission first finding reason to
                                        Enforcement Division, Federal Election                  Regarding Self-Reporting of Campaign                  believe that a violation occurred;
                                        Commission, 999 E Street, NW.,                          Finance Violations (Sua Sponte                           • Refrain from making a formal
                                        Washington, DC 20463, (202) 694–1650                    Submissions), 71 FR 71090 (December                   finding that a violation was knowing
                                        or (800) 424–9530.                                      8, 2006). The comment period ended on                 and willful, even where the available
                                        SUPPLEMENTARY INFORMATION:                              January 29, 2007. Two comments were                   information would otherwise support
                                                                                                received. One of the comments                         such a finding;
                                        I. Goals and Scope of the Policy                        supported the proposed policy and                        • Proceed only as to an organization
                                          The Commission periodically receives                  suggested some minor revisions. The                   rather than as to various individual
                                        submissions from persons who self-                      other comment opposed the proposed                    agents or, where appropriate, proceed
                                        report statutory or regulatory violations               policy.                                               only as to individuals rather than
                                        of which the Commission had no prior                       This policy provides an overview of                organizational respondents;
                                        knowledge. The Commission considers                     the factors that influence the                           • Include language in the conciliation
                                        such self-reports (which also are                       Commission’s handling and disposition                 agreement that indicates the level of
                                        referred to as sua sponte submissions)                  of self-reported matters. It should be                cooperation provided by respondents
                                        as information ascertained in the normal                noted that while cooperation in general,              and the remedial action taken.
                                        course of carrying out its supervisory                  and self-reporting in particular, will be
                                                                                                considered by the Commission as                          Additionally, in cases where the
                                        responsibilities pursuant to 2 U.S.C.                                                                         submission includes privileged or
                                        437g(a)(2), and may investigate if it                   mitigating factors, they do not excuse a
                                                                                                violation of the Act or end the                       sensitive information, the Commission
                                        determines there is reason to believe a                                                                       may work with the submitter to protect
                                        violation has occurred. The Commission                  enforcement process. Also, this policy
                                                                                                does not confer any rights on any person              privileged information from public
                                        also investigates complaints reporting                                                                        disclosure while still allowing the
                                        the potentially illegal conduct of                      and does not in any way limit the right
                                                                                                of the Commission to evaluate every                   Commission to verify the sufficiency of
                                        another, submitted pursuant to 2 U.S.C.                                                                       the submission.
                                        437g(a)(1), but which also, by                          case individually on its own facts and
                                        implication, provide a basis for                        circumstances.3                                       III. Factors Considered in Self-Reported
                                        investigating the complainant itself.1 As               II. Self-Reporting of FECA Violations                 Matters
                                        a general proposition, self-reported
                                                                                                   Self-reporting of violations typically               The Commission may take into
                                        matters, when accompanied by full
                                                                                                allows respondents to resolve their civil             account various factors in considering
                                        cooperation, will be resolved more
                                                                                                liability in a manner which has the                   how to proceed regarding self-reported
                                        quickly and on more favorable terms
                                                                                                potential to: (1) Reduce the investigative            violations. In general, more expedited
                                        than identical matters arising by other
                                                                                                burden on both the Commission and                     processing and a more favorable
                                        means (e.g., those arising via external
                                                                                                themselves; (2) demonstrate their                     outcome will result when the self-
                                        complaints, referrals from other
                                                                                                acceptance of organizational or personal              reporting party can show that upon
                                        government agencies, or referrals from
                                                                                                responsibility and commitment to                      discovery of the potential violations,
                                          1 If a person who self-reports a violation of the     internal compliance; and (3) conclude                 there was an immediate end to the
                                        FECA also makes specific allegations as to other        their involvement in the Commission’s                 activity giving rise to the violation(s);
                                        persons not joining in the submission, and              enforcement process on an expedited                   the respondent made a timely and
                                        particularly where the person making the                                                                      complete disclosure to the Commission
                                        submission seeks to assign primary responsibility
                                                                                                basis. As a result, a person who brings
                                        for the violations to another person (including an
                                                                                                                                                      and fully cooperated in the disposition
                                        organization’s former officers or employees), the         2 When violations are found, FECA requires the      of the matter; and the respondent
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                                        Commission, acting through its Office of General        Commission to attempt to correct or prevent           implemented appropriate and timely
                                        Counsel, may advise the self-reporting person that      violations through conciliation agreements before     corrective measures, including internal
                                        a portion of the relevant materials should be re-       suit may be filed in federal district court.
                                        submitted as a complaint to which other persons           3 Some violations, for instance, are subject to a   safeguards necessary to prevent any
                                        would be allowed to respond prior to any findings       mandatory minimum penalty prescribed by statute.      recurrence. Further detail as to these
                                        by the Commission.                                      See 2 U.S.C. 437g(a)(6)(C).                           factors is supplied below.

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                                                            Federal Register / Vol. 72, No. 65 / Thursday, April 5, 2007 / Rules and Regulations                                               16697

                                        Nature of the Violation                                 of excessive or prohibited contributions                 • Respondents alert the Commission
                                          (1) The type of violation: Whether the                and instructed recipients to disgorge                 to potential violations before the
                                        violation was knowing and willful, or                   such funds to the U.S. Treasury;                      violation had been or was about to be
                                        resulted from reckless disregard for legal                 (5) Post-discovery compliance                      discovered by any outside party,
                                        requirements or deliberate indifference                 measures: Whether there are assurances                including the Commission;
                                        to indicia of wrongful conduct;                         that the conduct is unlikely to recur;                   • The violation immediately ceased
                                        negligent; an inadvertent mistake; or                   whether the respondent has adopted                    and was promptly reported to the
                                        based on the advice of counsel; 4                       and ensured enforcement of more                       Commission upon discovery;
                                          (2) The magnitude of the violation:                   effective internal controls and                          • Respondents take appropriate and
                                        Whether the violation resulted from a                   procedures designed to prevent a                      prompt corrective action(s) (e.g.,
                                        one-time event or an ongoing pattern of                 recurrence of the violation; and whether              changes to internal procedures to
                                        conduct repeated over an extended                       the respondent provided the                           prevent a recurrence of the violation;
                                        period of time (and whether there was                   Commission with sufficient information                increased training; disciplinary action
                                        a history of similar conduct); how many                 for it to evaluate the measures taken to              where appropriate);
                                        people were involved in or were aware                   correct the situation and ensure that the                • Respondents amend reports or
                                        of the violation and the relative level of              conduct does not recur.                               disclosures to correct past errors, if
                                        authority of these people within the                                                                          applicable;
                                                                                                Disclosure and Cooperation                               • Any appropriate refunds, transfers,
                                        organization; whether individuals were
                                        coerced into participating in the                          (6) Full disclosure of the violation to            and disgorgements are made and/or
                                        violation; the amount of money                          the Commission: Whether steps were                    waived; and
                                        involved either in terms of absolute                    taken upon learning of the violation;                    • Respondents fully cooperate with
                                        dollar amount or in terms of the                        whether the disclosure was voluntary or               the Commission in ensuring that the sua
                                        percentage of an entity’s activity; and                 made in recognition that the violation                sponte submission is complete and
                                        the impact the violation may have had                   had been or was about to be discovered,               accurate.
                                        on any federal election;                                or in recognition that a complaint was                   In addition, the Commission may
                                          (3) The origin of the violation:                      filed, or was about to be filed, by                   grant a civil penalty reduction of up to
                                        Whether the conduct was intended to                     someone else; and whether a                           75% to respondents for violations in sua
                                        advance the organization’s interests or                 comprehensive and detailed disclosure                 sponte submissions based on other
                                        to defraud the organization for the                     of the results of its internal review was             factors such as submissions that were
                                        personal gain of a particular individual;               provided to the Commission in a timely                uncovered as a result of independent
                                        whether there were compliance                           fashion;                                              experts that were hired by respondents
                                        procedures in place to prevent the type                    (7) Full cooperation with the                      to conduct a thorough review,
                                        of violation now uncovered and, if so,                  Commission: Whether the respondent                    investigation or audit, or an equally
                                        why those procedures failed to stop or                  promptly made relevant records and                    comprehensive internal review,
                                        deter the wrongful conduct; and                         witnesses available to the Commission,                investigation or audit. In order to
                                        whether the persons with knowledge of                   and made all reasonable efforts to secure             receive this reduction, respondents
                                        the violation were high-level officials in              the cooperation of relevant employees,                must also meet the above criteria for a
                                        the organization.                                       volunteers, vendors, donors and other                 50% reduction and provide the
                                                                                                staff without requiring compulsory                    Commission with all documentation of
                                        Extent of Corrective Action and New                     process; whether the respondent agreed                the experts’ review, investigation, or
                                        Self-Governance Measures                                to waive or toll the statute of limitations           audit.5
                                          (4) Investigative and corrective                      for activity that previously had been                    The required scope of the review,
                                        actions: Whether the violation                          concealed or not disclosed in a timely                investigation or audit will depend on
                                        immediately ceased upon its discovery;                  fashion.                                              the circumstances. For example, if an
                                        how long it took after discovery of the                    The Commission recognizes that all of              organization discovers that an
                                        violation to take appropriate corrective                the above-listed factors will not be                  employee, stockholder or member may
                                        measures, including disciplinary action                 relevant in every instance of self-                   have reimbursed political contributions
                                        against persons responsible for any                     reporting of potential FECA violations,               with organization funds, the
                                        misconduct; whether there was a                         nor is the Commission required to take                Commission would consider a thorough
                                        thorough review of the nature, extent,                  all such factors into account. In                     review to include: Identification of all
                                        origins, and consequences of the                        addition, these factors should not be                 political contributions made by the
                                        conduct and related behavior; whether                   viewed as an exhaustive list.                         suspect employee subsequent to and for
                                        the respondent expeditiously corrected                                                                        at least three years prior to the
                                        and clarified the public record by                      IV. Reduction in Penalties for Self-                  suspected reimbursement (and
                                        making appropriate and timely                           Reporting Matters                                     extending further if additional suspect
                                        disclosures as to the source and                          The Commission will generally                       contributions are found); a review of
                                        recipients of any funds involved in a                   reduce opening civil penalty offers by                contributions by anyone associated with
                                        violation; whether a federal political                  between 25% and 75% compared with                     the organization (including, but not
                                        committee promptly made any                             identical matters arising from a                      limited to, relatives and subordinates)
                                        necessary refunds of excessive or                       complaint or by other means. The                      corresponding in time or recipient to the
                                        prohibited contributions; and whether                   amount of the reduction depends on the                suspected reimbursed contributions; a
                                        an organization or individual                           facts and circumstances of a particular               review of the organization’s
                                        respondent waived its claim to refunds                  case. The Commission will consider the                compensation (especially bonus) and
                                                                                                                                                      expense reimbursement policies and
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                                                                                                factors set forth above.
                                           4 A respondent seeking to defend conduct based
                                                                                                  Absent unusual circumstances, the
                                        on advice of counsel may not simultaneously                                                                     5 As discussed above, the Commission will,

                                        withhold documentary or other evidence
                                                                                                Commission will grant a civil penalty                 where appropriate, work with the submitter to
                                        supporting that assertion based on the attorney-        reduction of 50% to respondents who                   protect privileged information from public
                                        client privilege.                                       meet the following criteria:                          disclosure.

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                                        16698               Federal Register / Vol. 72, No. 65 / Thursday, April 5, 2007 / Rules and Regulations

                                        practices for the relevant periods to                   respondents to resolve certain matters                conciliation without requiring
                                        identify potential contribution                         short of the Commission finding that                  respondents to admit that their conduct
                                        reimbursements. Similarly, if an                        there is reason to believe that a violation           was knowing and willful, even where
                                        organization discovers it has misstated                 has occurred. Examples of matters that                there is evidence that may be viewed as
                                        financial information on its reports, the               might be eligible for such treatment                  supporting this conclusion. The
                                        Commission would consider a through                     include:                                              Commission has followed this practice
                                        review to include: An audit reconciling                   • Matters in which an individual                    in several self-reported matters where
                                        bank and internal financial records with                contributor discovers that he or she                  the organizational respondents
                                        FEC reports for the period in which the                 inadvertently violated the individual
                                                                                                                                                      promptly self-reported and took
                                        error was discovered, any subsequent                    aggregate election cycle contribution
                                                                                                                                                      comprehensive and immediate
                                        reporting periods, and prior reporting                  limit contained in 2 U.S.C. 441a(a)(3);
                                                                                                  • Matters in which a political                      corrective action that included the
                                        periods for at least a year prior to the
                                        error (and extending further if                         committee seeks to disclose and correct               dismissal of all individual corporate
                                        additional errors are found); a review                  relatively straightforward reporting                  officers whose actions formed the basis
                                        addressing internal controls and                        violations;                                           for the organization’s potential knowing
                                        reporting procedures and identifying                      • Matters in which a contributor and                and willful violation.
                                        weaknesses contributing to the errors                   a political committee jointly seek to                    The Commission has the statutory
                                        and remedies for those weaknesses.                      resolve their liability for a simple and              authority to refer knowing and willful
                                           The Commission will be the sole                      inadvertent excessive or prohibited                   violations of the FECA to the
                                        arbiter of whether the facts of each case               contribution; and                                     Department of Justice for potential
                                        warrant a particular reduction in the                     • Matters in which the initial self-
                                                                                                                                                      criminal prosecution, 2 U.S.C.
                                        penalty. The Commission will generally                  reporting submission by the
                                                                                                respondents is sufficiently thorough that             437g(a)(5)(C), and to report information
                                        not give a respondent the benefit of this                                                                     regarding violations of law not within
                                        policy if the respondent is the subject of              only very limited, if any, follow-up by
                                                                                                the Office of the General Counsel is                  its jurisdiction to appropriate law
                                        a criminal or other government
                                                                                                necessary to complete the factual                     enforcement authorities. 2 U.S.C.
                                        investigation. In considering
                                        appropriate penalties, the Commission                   record.                                               437d(a)(9). The Commission will take
                                        will also consider the presence of                                                                            into consideration the fact of self-
                                                                                                VI. Parallel Proceedings                              reporting in deciding whether to refer a
                                        aggravating factors, such as knowing
                                        and willful conduct or involvement by                      The Commission recognizes that                     matter. However, the Commission will
                                        senior officials of an entity.                          persons self-reporting to the                         not negotiate whether it refers, reports,
                                                                                                Commission may face special concerns                  or otherwise discusses information with
                                        V. Fast-Track Resolution                                in connection with parallel criminal                  other law enforcement agencies.
                                           The Commission will generally not                    investigations, State administrative                  Although the Commission cannot
                                        make a reason-to-believe finding or                     proceedings, and/or civil litigation. The             disclose information regarding an
                                        open a formal investigation for                         Commission expects that persons who                   investigation to the public, it can and
                                        respondents that self-report violations,                self-report to the Commission will                    does share information on a confidential
                                        if: (1) All potential respondents in a                  inform the Commission of any existing                 basis with other law enforcement
                                        matter have joined in a self-reporting                  parallel proceedings. The Commission                  agencies.
                                        submission that acknowledges their                      encourages persons who self-report to
                                        respective violations of the FECA; (2)                  the Commission also to self-report                    VII. Conclusion
                                        those violations do not appear to be                    related violations to any law
                                        knowing and willful; (3) the submission                 enforcement agency with jurisdiction                    The Commission seeks to encourage
                                        is substantially complete and reasonably                over the activity. This will assist the               the self-reporting of violations. To that
                                        addresses the significant questions or                  Commission, where appropriate and                     end, the Commission has adopted this
                                        issues related to the violation; and (4)                possible, in working with other federal,              policy that explains that sua sponte
                                        the factual and legal issues are                        state, and local agencies to facilitate a             submissions will, in general, receive
                                        reasonably clear. Accordingly, the                      global and/or contemporaneous                         more expedited processing and more
                                        Commission is modifying its current                     resolution of related violations by a self-           favorable outcomes than identical
                                        practice to allow for an expedited Fast-                reporting person. The possibility of such             matters arising by other means.
                                        Track Resolution (‘‘FTR’’) for a limited                a resolution is enhanced when the self-                 This notice represents a general
                                        number of matters involving self-                       reporting person expresses a willingness              statement of policy announcing the
                                        reported violations. This procedure is                  to engage other government agencies                   general course of action that the
                                        available at the Commission’s                           that may have jurisdiction over the
                                                                                                                                                      Commission intends to follow. This
                                        discretion, but may be requested by                     conduct and to cooperate with joint
                                                                                                                                                      policy statement does not constitute an
                                        respondents.                                            discovery and disclosure of facts and
                                           Respondents eligible for the FTR                                                                           agency regulation requiring notice of
                                                                                                settlement positions with respect to the
                                        process will meet with the Office of                    different agencies.                                   proposed rulemaking, opportunities for
                                        General Counsel to negotiate a proposed                    In situations where contemporaneous                public participation, prior publication,
                                        conciliation agreement before the                       resolution of parallel matters is not                 and delay in effective date under 5
                                        Commission makes any formal findings                    feasible, the Commission will consider                U.S.C. 553 of the Administrative
                                        in the matter. Although the Commission                  whether terms contained in a                          Procedures Act (‘‘APA’’). As such, it
                                        is always free to reject or seek                        conciliation agreement with the                       does not bind the Commission or any
                                        modifications to a proposed conciliation                Commission may affect potential                       member of the general public. The
                                                                                                                                                      provisions of the Regulatory Flexibility
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                                        agreement, it is expected that this                     liability the same respondent
                                        process will allow for more expedited                   realistically faces from another agency.              Act, 5 U.S.C. 605(b), which apply when
                                        processing of certain types of violations               In appropriate cases, where there has                 notice and comment are required by the
                                        where factual and legal issues are                      been self-reporting and full cooperation,             APA or another statute, are not
                                        reasonably clear. It also will allow                    the Commission may agree to enter into                applicable.

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                                                            Federal Register / Vol. 72, No. 65 / Thursday, April 5, 2007 / Rules and Regulations                                            16699

                                          Dated: March 27, 2007.                                DEPARTMENT OF TRANSPORTATION                          Examining the AD Docket
                                        Robert D. Lenhard,                                                                                              You may examine the AD docket on
                                        Chairman, Federal Election Commission.                  Federal Aviation Administration                       the Internet at; or in
                                        [FR Doc. E7–6185 Filed 4–4–07; 8:45 am]                                                                       person at the Docket Management
                                                                                                14 CFR Part 39
                                        BILLING CODE 6715–01–P                                                                                        Facility between 9 a.m. and 5 p.m.,
                                                                                                [Docket No. FAA–2007–27757; Directorate               Monday through Friday, except Federal
                                                                                                Identifier 2007–NM–030–AD; Amendment                  holidays. The AD docket contains this
                                                                                                39–15014; AD 2007–07–13]                              AD, the regulatory evaluation, any
                                        FARM CREDIT ADMINISTRATION                              RIN 2120–AA64                                         comments received, and other
                                                                                                                                                      information. The street address for the
                                        12 CFR Parts 611, 612, 614, 615, 618,                   Airworthiness Directives; Gulfstream                  Docket Office (telephone (800) 647–
                                        619, 620, and 630                                       Aerospace LP Model Galaxy Airplanes                   5227) is in the ADDRESSES section.
                                                                                                and Model Gulfstream 200 Airplanes                    Comments will be available in the AD
                                        RIN 3052–AC19                                                                                                 docket shortly after receipt.
                                                                                                AGENCY:  Federal Aviation
                                                                                                Administration (FAA), Department of                   FOR FURTHER INFORMATION CONTACT:
                                        Organization; Standards of Conduct                      Transportation (DOT).                                 Mike Borfitz, Aerospace Engineer,
                                        and Referral of Known or Suspected                                                                            International Branch, ANM–116, FAA,
                                                                                                ACTION: Final rule; request for
                                        Criminal Violations; Loan Policies and                                                                        Transport Airplane Directorate, 1601
                                        Operations; Funding and Fiscal                                                                                Lind Avenue, SW., Renton, Washington
                                        Affairs, Loan Policies and Operations,                  SUMMARY: We are adopting a new                        98057–3356; telephone (425) 227–2677;
                                        and Funding Operations; General                         airworthiness directive (AD) for the                  fax (425) 227–1149.
                                        Provisions; Definitions; Disclosure to                  products listed above. This AD results                SUPPLEMENTARY INFORMATION:
                                        Shareholders; Disclosure to Investors                   from mandatory continuing
                                                                                                                                                      Streamlined Issuance of AD
                                        in System-Wide and Consolidated                         airworthiness information (MCAI)
                                        Bank Debt Obligations of the Farm                       originated by an aviation authority of                  The FAA is implementing a new
                                        Credit System; Effective Date                           another country to identify and correct               process for streamlining the issuance of
                                                                                                an unsafe condition on an aviation                    ADs related to MCAI. This streamlined
                                        AGENCY:    Farm Credit Administration.                  product. The MCAI describes the unsafe                process will allow us to adopt MCAI
                                                                                                condition as:                                         safety requirements in a more efficient
                                        ACTION:   Announcement of effective date.                                                                     manner and will reduce safety risks to
                                                                                                  Avionics and electrical wire harnesses are
                                                                                                routed behind the Primary Flight Displays             the public. This process continues to
                                        SUMMARY: The Farm Credit                                (PFD) tray at the rear of the instrument panel.       follow all FAA AD issuance processes to
                                        Administration (FCA) published a final                  In some cases, the wire harness has been              meet legal, economic, Administrative
                                        rule under parts 611, 612, 614, 615, 618,               found to be chafing on the PFD tray. That             Procedure Act, and Federal Register
                                        619, 620, and 630 on February 2, 2006.                  could result in electrical arcing and shorting        requirements. We also continue to meet
                                        This final rule amended our regulations                 and subsequent loss of systems essential for          our technical decision-making
                                        affecting the governance of the Farm                    safe flight.                                          responsibilities to identify and correct
                                        Credit System and became effective on                     This AD requires actions that are                   unsafe conditions on U.S.-certificated
                                        April 5, 2006 (71 FR 18168, April 11,                   intended to address the unsafe                        products.
                                        2006), except for the amendments to                     condition described in the MCAI.                        This AD references the MCAI and
                                        §§ 611.210(a)(2), 611.220(a)(2)(i) and                  DATES: This AD becomes effective April                related service information that we
                                        (ii), 611.325, and 620.21(d)(2). This                   20, 2007.                                             considered in forming the engineering
                                        document announces the effective date                     The Director of the Federal Register                basis to correct the unsafe condition.
                                        of those delayed portions of the rule.                  approved the incorporation by reference               The AD contains text copied from the
                                                                                                of a certain publication listed in the AD             MCAI and for this reason might not
                                        EFFECTIVE DATE:  The effective date for                 as of April 20, 2007.                                 follow our plain language principles.
                                        the amendments to §§ 611.210(a)(2),                       We must receive comments on this                    Discussion
                                        611.220(a)(2)(i) and (ii), 611.325, and                 AD by May 7, 2007.
                                        620.21(d)(2), published February 2,                     ADDRESSES: You may send comments by                      The Civil Aviation Authority of Israel
                                        2006, at 71 FR 5740, is April 5, 2007.                  any of the following methods:                         (CAAI), which is the aviation authority
                                                                                                  • DOT Docket Web site: Go to                        for Israel, has issued Israeli
                                        FOR FURTHER INFORMATION CONTACT:   Gary                                                                       Airworthiness Directive 31–07–01–12,
                                        Van Meter, Deputy Director, Office of          and follow the
                                                                                                instructions for sending your comments                dated February 15, 2007 (referred to
                                        Regulatory Policy, Farm Credit                                                                                after this as ‘‘the MCAI’’), to correct an
                                        Administration, McLean, VA 22102–                         • Fax: (202) 493–2251.                              unsafe condition for the specified
                                        5090, (703) 883–4232, TTY (703) 883–                      • Mail: Docket Management Facility,                 products. The MCAI states:
                                        4434; or Laura D. McFarland, Senior                     U.S. Department of Transportation, 400                  Avionics and electrical wire harnesses are
                                        Attorney, Office of General Counsel,                    Seventh Street, SW., Nassif Building,                 routed behind the Primary Flight Displays
                                        Farm Credit Administration, McLean,                     Room PL–401, Washington, DC 20590–                    (PFD) tray at the rear of the instrument panel.
                                        VA 22102–5090, (703) 883–4020, TTY                      0001.                                                 In some cases, the wire harness has been
                                        (703) 883–4020.                                           • Hand Delivery: Room PL–401 on                     found to be chafing on the PFD tray. That
                                        (12 U.S.C. 2252(a)(9) and (10))                         the plaza level of the Nassif Building,               could result in electrical arcing and shorting
                                                                                                400 Seventh Street, SW., Washington,                  and subsequent loss of systems essential for
                                          Dated: April 2, 2007.                                                                                       safe flight.
rwilkins on PROD1PC63 with RULES

                                                                                                DC, between 9 a.m. and 5 p.m., Monday
                                        Roland E. Smith,
                                                                                                through Friday, except Federal holidays.                The corrective actions include
                                        Secretary, Farm Credit Administration Board.              • Federal eRulemaking Portal: http://               inspecting the wiring harness for
                                        [FR Doc. E7–6357 Filed 4–4–07; 8:45 am]        Follow the                       chafing, performing repairs if required;
                                        BILLING CODE 6705–01–P                                  instructions for submitting comments.                 and inspecting the wire harnesses for

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