Federal 

Election 

Commission 

Annual Report 1979 

Federal Election Commission 

1325 K Street, N.W. 

Washington, D.C. 20463 
Commissioners 

Robert 0. Tiernan, Chairman 

Max L. Friedersdorf, Vice Chairman 

Joan D. Aikens 

Thomas E. Harris 

John W. McGarry 

Frank P. Reiche 

Ex Officio Commissioners 

Edmund L. Henshaw, Clerk of the House 

J. S. Kimmitt, Secretary of the Senate 

Statutory Officers 

Orlando B. Potter, Staff Director 

Charles N. Steele, General Counsel 

The Annual Report 1979 was written and published by the Commission's Office of Publications. 

For sale by the Superintendent of Documents, U.S. Government 

Printing Office, Washington, D.C. 20402. 
FEDERAL ELECTION COMMISSION 

WASHINGTON, D.C. 20463 

To the President of the United States: 

To the Congress of the United States: 

We submit for your consideration the fifth annual report of 

the Federal Election Commission, as required by the Federal 

Election Campaign Act of 1971, as amended. This Annual Report 

1979 describes the activities performed by the Federal Election 

Commission in carrying out its duties under the Act and lists 

the Commission's recommendations for legislative action. We 

hope you will find this a useful summary of the Commission's 

efforts to implement the Federal Election Campaign Act. 

Respectfully, 

W?~~-""'~ 1

Rx:ERT 0. TIERNAN 

Chairman 
Table of 

Contents 

Page 

Overview 1 

Chapter 1. 

Preparations for the Presidential Election 3 

Disclosure 3 

Monitoring Public Funding 4 

Assistance to Presidential Campaigns 5 

Certifications and Audits 5 

Advisory Opinions 7 

Revised Regulations 9 

Chapter 2. 

Administration of the Election Law 13 

Disclosure 13 

Monitoring the Election Law 15 

Assistance to Candidates and 17 

Committees 

Advisory Opinions 20 

Enforcement 21 

Chapter 3. 

Summary of the 1979 Amendments to 27 

the Federal Election Campaign Act 

Chapter 4. 

Legislative Recommendations 37 

Chapter 5. 

The Commission 43 

Appendices 

1. Biographical Data on Commissioners 47 

rflnd Statutory Officers 

2. ·'"'FEC Organization Chart 49 

3. Chronology of Events, 1979 51 

4. Statistics on Division Operations 55 

5. The FEC's Budget 59 

6. FEC Advisory Opinions: 61 

Summaries 

7. Computer Indexes Available 85 

8. Clearinghouse Studies 87 

9. FEC Testimony 89 

10. FEC Federal Register Notices, 1979 91 

11. Public Funding Expenditure Limits 95 

12. Assistance Available from the FEC 97 
Overview 

During 1979, the Federal Election Commission 

prepared for the 1980 Presidential elections 

while making a concerted effort to improve the 

overall administration of the election law. To 

this end, the Commission modified a number of 

programs to facilitate smooth administration of 

public financing in the 1980 Presidential elections. Procedures were developed, for example, 

to expand the scope of information available on 

Presidential campaign finance activity; ensure 

swift certification of public funds; and undertake timely, thorough audits of candidates and 

national nominating conventions receiving public funds. The Commission also prescribed revised regulations governing the public funding of 

Presidential primary campaigns and national 

nominating conventions. Chapter 1 describes 

these programs. 

Other program refinements were undertaken, 

when necessary, to improve FEC administration 

of disclosure and compliance in general. These 

program changes are discussed in Chapter 2. 1 

On December 20, 1979, Congress passed H. R. 

5010,2 amending the election law to streamline reporting and bookkeeping requirements 

and to give party organizations more latitude 

in participating in activities related to Federal 

elections. The Commission immediately took 

steps to make a smooth transition to operating 

under the revised law.3 During the final weeks 

of 1979, the Commission began to revise FEC 

regulations, reporting procedures and informational mailings. The impact of the new law is 

summarized in Chapter 3. 

Chapter 4 includes the Commission's recommendations for legislative changes. 

During 1979, the Commission's internal administration changed significantly as a resu It of a 

collective bargaining agreement negotiated 

between FEC management and representatives 

of the National Treasury Employees Union 

(NTEU), the exclusive bargaining unit for the 

Commission. The final chapter discusses the 

labor/management issue and other aspects of 

internal administration. 

1For detailed descriptions of the Commission's ongoing opera· 

tions, see the FEC's 1977 and 1978 Annual Reports, available 

in the Public Records Office. 

2President Carter signed the bill into law (Pub. L. No. 96-187) 

on January 8, 1980. 

3Except where noted, legal citations in the text are to the Federal Election Campaign Act as amended in 1974 and 1976 

(prior to 1979 amendments). as contained in title 2 of the 

United States Code. Note also that citations to the FEC regulations (11 CFR ), which may be found in Chapter 11 of the Code 

of Federal Regulations, do not reflect the 1979 amendments to 

the election law. 
Chapter 3 1 

Preparations for the 

Presidential Election 

The Commission allocated substantial staff resources during 1979 to its preparations for the 

1980 Presidential elections. During 1978, the 

Commission had begun to reassess the public 

financing program for the 1976 Presidential 

elections and to develop new programs based 

on this examination. It had held hearings on the 

public financing regulations, had approved new 

Presidential reporting forms and had developed 

an outreach program for Presidential candidates 

and their authorized committees. 

During 1979, the Commission continued revising the public financing program to accommodate the practical political situations encountered by Presidential campaigns during the 1976 

elections and to correct procedural deficiencies in the Commission's own administration 

of the program. 

By the end of 1979, a number of new programs 

were in place which enabled the Commission to: 

- Provide more complete public disclosure of 

Presidential campaign finance activity; 

- Monitor Presidential campaign activity more 

thoroughly; 

- Provide Presidential campaigns with more 

effective technical assistance in establishing 

proper recordkeeping, accounting and reporting procedures; 

- Expedite both the certifications of public 

funds and audits of campaigns receiving pub1ic funds; and 

- Facilitate compliance with the election law by 

revising the public financing regulations and 

by issuing a series of advisory opinions on 

permissible activities related to Presidential 

campaign finance activity. 

Disclosure 

During 1979, the Commission developed programs to expand the scope of information 

available to the public on Presidential campaign 

finance activity. In addition to enhancing disclosure, the new programs allowed the Commission 

to monitor the receipt and expenditure of public 

funds more effectively. Moreover, because a 

number of the programs were computer-based, 

they were implemented at lower costs to the 

Commission than the manual disclosure and 

monitoring procedures used to administer the 

1976 public funding program. 

Expanding Disclosure 

For the first time, the Commission made 

available information submitted by Presidential 

candidates seeking eligibility for public funding 

of their primary campaigns. In addition to the 

reports filed by Presidential candidates on their 

campaign finance activity, the Public Records 

Office released Iists of contributions (alphabetized by contributor) for which candidates 

had requested matching payments. During 1979, 

the Public Records Office released the contributor lists for seven Presidential candidates. 

This office also made available to the public the 

personal financial disclosure statements required 

of all Presidential and Vice Presidential candidates under the 1978 Ethics in Government Act. 

Presidential and Vice Presidential candidates 

must file the Ethics Act reports with the Commission within 30 days of becoming a candidate, 

under the election law, and on or before May 15 

of each successive year in which the individual 

continues to be a candidate. (Certain high-level 

FEC staff, as Federal employees, are also required to file reports under the Ethics Act.) 

While the Commission serves as a filing office for 

the reports, the Office of Government Ethics 

oversees enforcement of the Ethics Act. 1 

The Commission also provided increased disclosure of Presidential campaign finance activity 

by expanding the types of data entered into 

its computer-based information system and by 

generating new disclosure programs from this 

data base. For example, the Reports Analysis 

Division expanded data coding and entry of 

information contained in Presidential reports 

1For more information on this program, contact: The Office of 

Government Ethics, 1900 Eye Street, N.W., Room 5315, 

Washington, O.C. 20415. 
4 

to include all summary information on campaign receipts and expenditures (including 

receipt of Federal funds), information on 

exempt fundraising, legal and accounting disbursements, and all information on expenditures 

of public funds in primary campaigns on a 

State-by-State basis. 

The Commission also entered into its computer 

system information contained on lists submitted 

with matching fund requests. 2 This new data 

base could provide such up-to-date information 

on matching fund requests as total contributions 

submitted for matching funds (by each candidate and a summary figure for all candidates) 

and total certifications made by the Commission. 

Drawing on the expanded data base for Presidential campaign finance activity, the Data 

Systems Development Division developed other 

computer programs that provided a context in 

which to analyze and understand this activity. 

For example, the division revised a program 

(Standard Index E)3 which listed all unauthorized - in addition to authorized - campaign 

committees operating on behalf of, or against, a 

single candidate. Another computer program 

presented the candidate's campaign finance activity on a State-by-State basis, and summarized 

activity by all Presidential campaigns within a 

particular State. 

The Reports on Financial Activity of Presidential Prenomination Campaigns will, however, 

provide the most comprehensive compilation of 

statistics. Developed during 1979 by the Data 

Systems Development Division as a new addition 

to the Commission's Reports on Financial Activity series,4 this new series of reports will present 

comparative statistics on the campaign finance 

activity of major and minor party Presidential 

candidates. In 1980, interim reports containing 

cumulative data will be released monthly during 

the primary season and will include activity 

reported through the previous month. 

Increased Efficiency of the 

Disclosure Process 

The Commission took several steps to increase 

the efficiency of the disclosure process as well. 

It assigned top priority to computer entry of 

data from Presidential campaign finance reports. 

It also initiated a voluntary program whereby 

Presidential candidates could submit matching 

fund information on computer tapes. 5 

Monitoring Public Funding 

With the aid of a Review Manual for Presidential Candidates developed in 1979, a special Presidential team of reports analysts began reviewing 

Presidential campaign finance reports. Standardized procedures established by the manual helped ensure more evenhanded treatment of all 

campaigns as well as a more accurate review of 

reports. Moreover, by using the expanded data 

base of information on Presidential campaigns 

and the new computer programs (described 

above), the Presidential team of reports analysts 

could monitor campaign activity more thoroughly.6 For example, the team could crosscheck itemized loan information against summary loan figures. Or, data entry of funds spent 

in primary campaigns would allow the analysts 

to monitor State-by-State spending limits for 

candidates rece1vmg matching funds more 

efficiently than the manual system used for the 

1976 primary campaigns. Similarly, the computer program linking all of a candidate's authorized and unauthorized committees could be used 

to monitor compliance with the contribution 

limits. 

2An alphabetical listing of the contributors and the amounts of 

their contributions. 

3see also Appendix 7. 

4 For a more detailed discussion of this disclosure series, see 

page 5 of the F EC's 1978 Annual Report. 

5see page 6. 

6The Commission also established new audit procedures to ver· 

ify expenditures of public funds by Presidential campaigns 

and convention committees. See page 5 below. 
5 

Assistance to 

Presidential Campaigns 

Outreach Program 

The Commission's outreach program directly 

assisted Presidential candidates in complying 

with the election law. By assigning an auditor 

and reports analyst to work with a particular 

Presidential campaign on an ongoing basis, the 

Commission effectively coordinated FEC activity related to that campaign. And, by being 

readily accessible for a quick, informed resolution of most problems, these experts helped 

Presidential candidates establish sound reporting 

and accounting systems in the early stages of 

campaign activity. 

The Audit Division initiated FEC contact with 

candidates by sending a series of letters to 

each candidate, identifying the auditor and reports analyst assigned to the campaign, informing them of the dates on which contributions 

could be submitted for matching funds and 

providing each candidate with a Financial Control and Compliance Manual for Presidential 

Candidates Receiving Public Financing. As one 

of several publications supplementing the candidate outreach program, this compliance manual 

included guidelines for establishing accounting, 

budgeting and reporting systems. 

The Commission also distributed two other new 

publications: the FEC Guideline for Presentation in Good Order and the Campaign Guide for 

Presidential Candidates and Their Committees. 

The FEC Guideline for Presentation in Good 

Order included details on: supporting documentation required for matching funds; unmatchable 

contributions; criteria for rejection of matching 

fund submissions; submission and resubmission 

days; and procedures for resubmissions. The 

Campaign Guide for Presidential Candidates and 

Their Committees covered the basic requirements of the Act and regulations as they apply 

to all Presidential candidates, regardless of 

whether they receive public funds. An additional 

chapter (VIII) of the Guide outlined the special 

requirements of those candidates seeking matching funds .. 

Threshold Audits 

In conjunction with the outreach program, the 

Commission performed a threshold audit of the 

principal campaign committee of each Presidential candidate who established matching fund 

eligibility. Based on findings of the audit, the 

Commission would make any recommendations 

necessary to improve the committee's bookkeeping and accounting procedures. By performing a 

thorough audit in the early stages of the campaign, the Commission hoped to conserve resources that would otherwise be required to resolve problems at a later stage. 

The threshold audits, together with the outreach 

program, were also intended to reinforce the 

Audit Division's efforts to expedite certification 

of matching funds and post-election audits of 

publicly funded Presidential campaigns and convention committees. By educating campaign 

staff on the proper format for submitting 

matchable contributions, for example, the Commission expected to certify requests for matching funds promptly and to minimize the need 

for additional back-up documents. The Commission could also expect to reduce the time required for post-election audits if campaigns 

established sound accounting procedures for 

expending public funds. 

Certifications and Audits 

During 1979, the Audit Division established new 

procedures to accelerate matching fund certifications and audits of public fund recipients, 

while maintaining existing standards of accuracy 

and thoroughness. All procedures were given a 

thorough legal review by the Office of General 

Counsel. 

Expediting Matching Fund Certifications 

To expedite review and certification of matching 

fund · requests, the Commission engaged the 

accounting firm of Ernst & Whinney and, in 

October 1979, the Commission adopted the 

firm's proposals for a Probability Proportional 

to Size (PPS) statistical sampling method. 
6 

Samples selected were evaluated to determine 

whether they met requirements for matchable 

contributions. 

Adoption of the PPS method required data 

entry of information contained in the candidate's matching fund request list. 7 To expedite 

data entry and verification procedures, the Commission invited Presidential campaigns to submit 

certain information required for matching fund 

requests on computer tapes as well as on a printed listing. 

The new data base on matching fund requests 

also increased efficient management of the 

certification program by providing accurate, 

up-to-date information on the status of certifications. For example, audit staff could use 

computer print-outs to determine total matching 

funds certified to a candidate and total contributions submitted by the candidate for matching. Based on this information, audit staff could 

readily determine the candidate's remaining 

entitlement to matching funds. 8 Additionally, 

print-outs could be used to supply the candidate 

with a status report on matching funds requested and certified, permitting the candidate 

to adjust matching fund requests accordingly. 

In addition, to expedite final approval of matching fund payments during those weeks when the 

Commission did not meet in formal session, the 

Commissioners approved certifications on a tally 

vote basis. As of December 31, 1979, the Commission had certified to the U.S. Treasury initial 

payments of $300,000 for the Democratic 

National Committee's national nominating convention and $750,000 to the Republican National Committee for its convention. The Commission also certified primary matching payments for the following candidates: President Jimmy Carter, Senator Howard H. Baker, 

Jr., and Mr. Lyndon H. LaRouche. Actual payments by the U.S. Treasury to the candidates, 

however, could not be made until after January 

1, 1980. 26 U.S.C. §9034(a). 

Expediting Audits 

The Commission took several steps to expedite 

audits of Presidential campaigns receiving public 

funds. Using the Arthur Andersen report as a 

basis for reexamining the audit program (see 

page 16), the Commission modified its procedures for auditing 1980 Presidential campaigns, as follows: 9 

Threshold Audits. The Commission decided to 

conduct threshold audits of campaigns receiving 

matching funds in order to detect - and help 

correct - recordkeeping problems at an early 

stage of the campaign. 

Pre-Election Release of Primary Audits. The 

Commission planned to conduct audits of the 

two nominees for President immediately after 

their respective nominating conventions (provided the candidates received primary matching 

payments). In addition, the Audit Division 

would give priority to completing these audits as 

soon as possible after the conventions, with the 

objective of releasing final audit reports by the 

end of the calendar year. 

Post-Audit Work and Review of Audit Findings 

by the Office of General Counsel and the Cornmission. The Commission adopted a series of internal audit deadlines for release of audit reports. It also established a timetable of 18 weeks 

for release of the final audit report after completion of fieldwork. To ensure adherence to the 

timetable, the Commission established the following procedures: 

7see also page 3. 

8Eiigible primary candidates are entitled to 50 percent of the 

national spending limit for matching fund recipients (i.e., 50 

percent of $10 million plus a cost-of-living adjustment). 26 

U.S.C. Section 9034(b). 

9 For complete details on changes in Presidential audit procedures, see Commission Memorandum No. 79-287, available 

from the Public Records Office. 
7 

-The Commission would place a one-month 

deadline on any inquiry made to a Secretary 

of State to determine the status of apparent 

corporate contribution(s) to a campaign. 

- No extensions would be granted to Presidential committees for responding to the Commission's letter of audit findings. 

- In cases where the Commission determined 

that a compliance matter (MUR) should be 

opened, the final letter of audit findings 

would not address the MUR but would state 

that the audit uncovered other matters which 

were referred to the Office of General Counsel for review. 

- All Presidential committee responses would 

be noted in the final letter of audit findings. 

Any failure to comply with the Audit Division's recommendations would result in a referral to the Office of General Counsel for 

possible initiation of a compliance matter 

(MUR), and the final letter of audit findings 

would note that a matter had been referred to 

the Office of General Counsel. 

- All final letters of audit findings would 'be 

forwarded to the Commission for final review 

prior to public release. 

Release of 1976 Audits. To expedite the release 

of the remaining audits of the 1976 Presidential 

campaigns, the Commission began to release 

audit reports to the public immediately after it 

had approved the final report and determined 

the final repayment amount, if any. Previously, 

the Commission's policy had been to provide the 

audited committee with a copy of the final audit 

report, resolve any conflicts about repayment 

amounts and await receipt of final repayment 

before releasing the audit report to the public. 

Advisory Opinions 

To facilitate compliance with the election law 

by Presidential candidates and committees, as 

well as committees of national nominating conventions, the Commission issued a series of 

advisory opinions delineating permissible activities in connection with Presidential campaigns. 

Draft Committees1 0 

Advisory Opinions 1979-40 and 1979-49 addressed three important issues raised by "draft 

committees" (i.e., unauthorized committees disavowed by the individual whose candidacy the 

committee promotes): 

1. Are "draft committees" political committees 

which are required to register and report? 

2. Do the contribution limits of the Act apply to 

contributions accepted by the draft committee from individual donors? 

3. Do any expenditure or contribution limits 

apply to the expenditures which the draft 

committee makes to promote an individual's 

entry into the 1980 Presidential elections? 

In Advisory Opinion 1979-40, issued to the 

Florida for Kennedy Committee, the Commission determined that, since the Florida for Kennedy Committee was an unauthorized draft 

committee which had been disavowed by Senator Kennedy, and since Senator Kennedy was 

not a "candidate" under the election law (at 

the time the request was considered), the committee could accept contributions of more than 

$1,000, but not more than $5,000, from individual contributors during a calendar year. 1 1 (The 

opinion did not address the then hypothetical 

question of how contributions to the draft 

committee would affect the contributor's right 

to make future contributions to Senator Kennedy if he eventually became a candidate.) The 

Commission placed no limit on the amount of 

money which the committee could spend in the 

State to promote Senator Kennedy's entry into 

the 1980 Presidential primary elections. 

The rationale underpinning the Commission's 

decision not to place limits on expenditures by 

101n legislative recommendations made to the Congress in its 

1975 Annual Report, the Commission had suggested that the 

limits on contributions to candidates also be applied to contributions to draft committees. In its 1976 Report, the Commission had suggested that such contributions be subject to 

the election law's reporting requirements. 

11 2 U.S.C. Section 441a(a)(1 )(C). 
8 

the Florida for Kennedy Committee was restated in Advisory Opinion 1979-49, an opinion 

issued to the Independent Campaign to Elect 

William E. Simon President. In this opinion, the 

Commission determined that the election law 

does not prescribe expenditure limits for unauthorized political committees whose activities 

have been disavowed by the individual being 

supported by the committee. Since Mr. Simon 

was not a candidate, the committee's expenditures on his behalf were not considered in-kind 

contributions or independent expenditures. 

Therefore, the expenditures were not subject to 

the $1,000 per election limit on in-kind contributions or to the special reporting requirements 

that apply to independent expenditures. (However, an individual's contributions to the committee would count against his or her $25,000 

per calendar year contribution limit for Federal 

elections.) Moreover, since the Simon for 

President Committee was a political committee 

registered under the Act, committee expenditures, as well as committee receipts, were 

governed by all other reporting requirements of 

the election law. 

Committee for an Alternative 

Presidential Candidate 

In another opinion issued in 1979,AO 1979-41, 

the Commission focused on permissible activities 

of a political committee formed to find a Presidential candidate who would be the appropriate 

standard bearer for the committee's espoused 

principles. The Commission determined in this 

opinion that the National Committee for a 

Democratic Alternative had to register with the 

FEC and report as a political committee since the 

committee anticipated raising or spending over 

$1,000 to influence the 1980 Presidential 

elections. The committee planned to influence 

the elections by seeking " ... a better Democratic candidate for President in 1980," by 

stimulating debate on the policies of the Carter 

administration, by taking out newspaper ads 

specifically identifying Carter as the Democrat 

to whom an alternative was needed, and by 

distributing information on the delegate selection process. 

Other Activities 

Several other advisory opinions issued in 1979 

helped clarify the types of pre-election activity 

that are subject to the Federal election law 

(AO's 1979-7 and 1979-71) and the kinds of 

activities that individuals may undertake on 

behalf of Presidential campaigns (AO's 1979-22 

and 1979-65). 

In AO 1979-7, the Commission determined that 

the expenses connected with an Affirmative 

Action Program for selecting delegates to the 

1980 Democratic National Convention were not 

subject to the reporting obligations governing 

Presidential nominating conventions. Moreover, 

the funds received and payments made for the 

Affirmative Action Program did not constitute 

"contributions" or "expenditures" since they 

did not influence the election of any person to 

Federal office or the results of a primary. Therefore, expenditures for the program were not 

subject to the election law's limits and did not 

have to be defrayed with funds from the State 

Committee's Federal account. However, since 

the State Committee's expenditures for the 

Affirmative Action Program were in connection 

with a Federal election, the State Committee 

could not use prohibited contributions (e.g., 

contributions from labor organizations or corporations) to pay for them. 

AO 1979-71 clarified the definition of an 

"election" under the Act. In this opinion, the 

Commission determined that PASPAC, a separate segregated fund, had no reporting obligations with regard to the Iowa Presidential 

caucuses held in January 1980 since the 

caucuses did not constitute an "election" under 

the Act. The caucuses did not constitute an 

election because they did not: 

1. Have the authority to nominate a Presidential 

candidate; 

2. Express a preference for Presidential nominees by a formal primary ballot process; or 

3. Select delegates to a national nominating convention by a formal primary ballot process. 
9 

Two other advisory opinions issued in 1979, AO 

1979-22 and 1979-65, dealt with activities of 

persons working on behalf of Presidential campaigns. In AO 1979-22, the Commission determined that legal services to ensure compliance 

with the Act provided to the Carter/Mondale 

Presidential Committee (the Committee) by an 

associate of a law firm did not count as either 

contributions or expenditures under the election 

law. The amounts paid by the Committee for 

these services were not, therefore, subject to the 

Committee's overall expenditure limits, although 

they were reportable (2 U.S.C. § §431(e)(4) and 

(f)(4)(J)). However, amounts paid by the Committee for any "other legal and political duties" 

rendered by the same lawyer to the Committee 

were subject to the Committee's overall expenditure limits. Moreover, the Committee had to 

reimburse the lawyer's firm for any expenses 

incurred by the law firm as a result of the 

lawyer's "other legal and political duties" (e.g., 

use of the law firm's telephones). 

In AO 1979-65, the Commission said that the 

staff of an inactive Kennedy draft committee 

(the Committee) could communicate and cooperate with the same candidate's Presidential campaign committee. The facts presented by the 

Committee did not suggest that the individuals 

involved would simultaneously be officers or 

principals of two active committees raising funds 

for a Federal election or that they would 

become officers of the Kennedy campaign. 

Moreover, except for payment of outstanding 

debts, the draft committee had become inactive. 

Therefore, provided that none of the candidate's 

campaign staff participated in the effort to retire 

the draft committee's debt, staff of the draft 

committee could participate as individuals in the 

candidate's campaign without effect on the draft 

committee. 

Revised Regulations 

During 1979, the Commission sent to Congress 

revisions of FEC regulations governing the public financing of Presidential primary elections 

and national nominating conventions. These 

revised regulations were part of a major project 

undertaken by the Office of General Counsel to 

reexamine all FEC regulations and make revisions where necessary. 

The Commission prescribed the primary election 

regulations in October 1979 and regulations 

governing the financing of national nominating 

conventions in December 1979. Regulations governing certain provisions of primary matching 

fund eligibility were pending before Congress at 

the end of 1979. The Commission also submitted to Congress proposed regulations governing 

funding of Federal candidate debates in December 1979. Brief summaries of these revised 

regulations appear below. 

Primary Matching Fund Regulations1 2 

The revised regulations governing the Presidential Matching Payment Account codify and 

delineate Commission policies and procedures, 

as follows: 

Candidate Responsibility for Documenting Qualified Campaign Expenses. Under the statute, as 

well as the new regulations, the candidate is 

required to "obtain and furnish any evidence the 

Commission may request" regarding qualified 

campaign expenditures. The regulations also 

provide that the candidate must assume " ... the 

burden of proving that expenditures ... are 

qualified campaign expenses." Finally, the regulations specify the documentation which is required as proof that the expenditure was actually made and was related to the campaign. 

Definition of Qualified Expense. "Qualified 

campaign expenses" include expenditures made 

in connection with the campaign between the 

date the individual becomes a candidate and the 

date the candidacy is terminated. Expenses 

incurred before the date candidacy is established 

12see 11 CFR, Parts 9032-9038, as revised and renumbered in 

1979. 
10 

may be qualified campaign expenses if they are 

incurred for the purpose of determining whether 

an individual should become a candidate ("testing the waters"); expenses incurred after the 

date candidacy is terminated may be qualified 

campaign expenses if they are related to termination of campaign activity ("winding down" 

costs). 

To ensure that public funds are spent only on 

qualified campaign expenses, the new regulations specify that all funds (both private 

contributions and public matching funds) may 

be spent only to defray qualified campaign expenses. This prohibits a candidate who accepts 

public funds from using either private contributions, including those he or she received 

prior to establishing his/her eligibility, or public 

funds for nonqualified campaign expenses. The 

purpose of this regulation was to avoid a situation where a candidate would require more 

public funding to restore private funds diverted 

to nonqualified expenditures. 

The regulations entitle a candidate to matching 

funds after his/her date of ineligibility only if he 

or she has net outstanding campaign obligations 

on that date. Matching payments will be made 

only if the sum of private contributions plus 

matching funds does not exceed the reported 

debt. 

Recordkeeping Requirements. All submissions 

to the FEC must be prepared in accordance with 

the format described in the FEC Guideline for 

Presentation in Good Order. This requirement 

will expedite the processing of matching fund 

requests by the Commission. Furthermore, it is 

the candidate's responsibility to facilitate an 

FEC audit by gathering all records in a centralized location and providing the necessary space 

and personnel to assist in performing the audit. 

Finally, all bank records and supporting documentation for matching fund submissions must 

be provided by the candidate. 

Disputes Procedure. In those cases where a 

candidate may choose to challenge a Commission determination (initial certification, inactive 

candidacy, suspension of payments, additional 

certification, active candidacy, repayments), a 

procedure has been standardized to conform 

with due process requirements. The candidate 

has an opportunity to respond to a Commission 

decision within a specified time, engage counsel 

if he/she so desires and submit written evidence 

in support of his/her position. The Commission 

is required to thoroughly investigate the evidence submitted, and provide a statement of 

reasons underlying its final determination. 

Applications of Expenditure Limit. Under the 

new regulations, for any candidate seeking 

public funds, the expenditure limits will apply 

from the beginning of the candidacy rather than 

from the time when the candidate is certified as 

being eligible to receive public matching funds. 

Consequently, a candidate who has exceeded the 

expenditure limits before applying for matching 

funds will be ineligible to receive public funds. 

The regulations also provide procedures for 

candidates to challenge a Commission determination that they are ineligible for public funds. 

National Nominating Convention 

Regulations1 3 

The regulations governing national nominating 

conventions define the process by which certain 

political parties may qualify for public funds to 

finance their conventions. The proposed regulations cover: 

1. The establishment of a convention committee 

that is responsible for conducting the day-today operations of the convention, receiving all 

public funds and private contributions and 

making all expenditures on behalf of the 

national committee. 

2. The payment schedule, providing for a lump 

sum payment of all public funds to which the 

13See 11 CFR, Parts 107, 114 and 9008, as revised and renumbered in 1979. 
11 

convention committee is entitled, once it has 

established its eligibility. Formerly, the entitlement was disbursed in quarterly pay-· 

ments. 

3. The permissible uses for public funds, including advances which the national committee 

makes to the convention committee and excluding payment of civil or criminal penalties 

resulting from a violation of the Act. 

4. The limits on the total amount the party may 

spend on its convention (i.e., the statutory 

entitlement of $3 million14 plus the cost-ofliving adjustment) in any combination of private contributions and public funds; and a 

provision for additional expenditures, though 

not additional public funds, in "extraordinary 

and unforeseen circumstances" (e.g., a natural 

disaster). 

5. The permissible contributions and in-kind 

donations to the convention committee and 

the host committee (during the "life of the 

convention") from "local businesses," municipal corporations, government agencies, local 

labor organizations, corporations, banks and 

individuals. The regulations define "life of the 

convention" and "local business." 

o. Permissible expenditures by local government 

agencies and municipal corporations for the 

convention. 

7. The registration and reporting requirements 

of the convention committee and all other 

organizations (the host committee, State or 

local government agencies and municipal 

corporations) that deal with national party 

officials in making convention arrangements. 

8. The circumstances under which a repayment 

of public funds is required, and a procedure 

to resolve disputes when the committee challenges a Commission determination that repayment is required. 

New Regulations Proposed on 

Candidate Debates 

On December 27, 1979, the Commission submitted to Congress proposed regulations on the 

financing and sponsorship of Federal candidate 

debates, including debates by Presidential 

candidates. Previous candidate debate regulations, proposed to Congress on June 12, 1979, 

were disapproved by the Senate on September 

18, 1979.15 After the Senate's disapproval, the 

Commission held public hearings on October 23 

and 24, 1979. Regulations submitted by the 

Commission on December 27, 1979, provide 

that: 

Funds to Stage Nonpartisan Candidate Debates 

Are Neither Contributions Nor Expenditures. 

The Act provides that funds spent for nonpartisan activity designed to encourage individuals to 

register to vote or to vote are exempt from the 

definition of contribution or expenditure. 

Therefore, since the educational purpose of 

nonpartisan candidate debates is similar to the 

purpose underlying nonpartisan voter registration and get-out-the-vote activities, the proposed 

regulations provide a similar exemption for 

funds received and spent by certain nonprofit 

organizations to stage candidate debates. 

Certain Nonprofit Organizations and Bona Fide 

News Media Corporations May Stage Candidate 

Debates. The proposed regulations permit 

nonprofit organizations which do not endorse, 

support or oppose political candidates or political parties to stage nonpartisan debates. Specifically included are: 

1. All organizations exempt from Federal taxation under 2 U.S.C. §501 (c)(3). (Under the 

14Under the Federal Election Campaign Act of 1971, as amended in 1974, the statutory entitlement for each party was $2 

million. That figure was increased to $3 million by the 1979 

amendments (Pub. L. No. 96-1871 signed into law on January 

8, 1980. 

151n discussing the proposed veto of the debate regulations on 

the Senate floor, September 18, 1979, Senator Claiborne Pell, 

Chairman of the Senate Rules Committee, stated: " ... any 

regulation which could be interpreted as being burdensome to 

organizations which are likely to sponsor candidate debates, 

or which could in any way impede the heretofore successful 

debate procedure that has evolved through direct arrangements made between sponsors and candidates should not be 

allowed to take effect." (See the Congressional Record, September 18,1979,.5.12821.) 
12 

tax code, these organizations are prohibited 

from participating in or intervening in any 

political campaign.) 

2. Any organization exempt from Federal taxation under 26 U.S.C. § 501 (c)(4), provided it 

does not engage in any political campaign 

activities. 

The proposed regulations would also permit 

broadcasters, bona fide newspapers, news gathering services, magazines and other periodical 

publications to stage nonpartisan candidate 

debates. The proposed regulations define "bona 

fide," and specifically exclude from that definition news media that are owned or controlled by 

a political party, political committee or candidate, and periodical publications which are 

house organs. 

Debate Structure Is Left to the Discretion of the 

Staging Organization. Rather than prescribing a 

precise structure for the debates, the proposed 

regulations specify only a general standard. To 

be considered nonpartisan, a debate must: 

1. Include at least two candidates; and 

2. Not promote or advance one candidate over 

another. 

Labor Organizations and Corporations May Contribute to Nonprofit Nonpartisan Staging Organizations. In the same way that labor organizations and corporations are permitted to donate 

funds for registration and get-out-the-vote 

activities conducted in conjunction with a 

nonprofit organization, the proposed regulations permit them to donate funds to nonprofit, nonpartisan organizations for staging 

candidate debates. 

Broadcasters, newspapers, magazines and other 

periodicals are also permitted to use their own 

funds to stage nonpartisan debates. Consistent 

with ordinary practice and applicable FCC regulations, broadcasters may accept both regular 

commercial advertising and underwriting by 

corporations and labor organizations to finance 

the broadcast of debates staged or covered by 

the broadcaster. Similarly, newspapers, magazines and other periodicals may accept regular paid advertising in an issue which covers a 

debate, whether staged by the newspaper or another entity. Broadcasters, newspapers, magazines and other periodicals may not, however, 

accept direct corporate or labor organization 

payments (other than for regular commercial 

advertising) to finance the staging of debates. 
Chapter 13 2 

Administration of the 

Election Law 

During 1979, the Commission continued to 

administer the election law by disclosing campaign finance information, monitoring potential 

violations of the election law, providing assistance to Federal candidates and committees registered with the Commission, issuing advisory 

opinions and enforcing the election law. When 

necessary, the Commission modified programs 

to improve its administration of the law and to 

conserve its resources. Program developments 

and refinements that are not specifically related 

to the 1980 Presidential elections are discussed 

below. 1 

Disclosure 

To better administer the election law's disclosure provisions, 2 the Commission improved the 

processing of campaign finance information, 

made more information available to the public 

and instituted a new policy on the availability 

of information. 

Improved Processing 

of Campaign Information 

In January 1979, the Commission's Reports 

Analysis Division established a data entry team 

to enter data disclosed on campaign finance 

reports into the FEC's computer information 

system. In July 1979, the division also established new positions to code data for computer 

entry. In previous years, data coding and entry 

had been done by an outside contractor or by 

reports analysts in conjunction with their review of reports. By creating teams that specialized in either data coding or entry tasks, the 

Commission improved the accuracy of these 

operations. 

More Information 

Available to the Public 

In 1979, the Commission published two interim 

studies in its Reports on Financial Activity 

series, a comprehensive study of campaign 

finance activity by candidates, party committees 

and nonparty committees. 3 

The Commission released Interim Report No. 

4 on party and nonparty committees in May 

1979, and Interim Report No. 5 on U.S. Senate 

and House campaigns in June 1979. These 

cumulative studies were based on information 

compiled from campaign finance reports filed 

with the Commission from January 1, 1977, 

through December 31, 1978, and entered into 

the Commission's computer system. Information 

taken from amended reports received by March 

16, 1979, was also included. Figures in these 

studies would be subject to change after the 

Commission received and computerized all 

1978-79 reports and amendments. 

The statistical studies included figures on 

receipts and disbursements, as well as debt status 

and cash-an-hand. Typical studies contained in 

Interim Report No. 4 are presented in the charts 

below. Note that in the charts, adjusted disbursements are gross disbursements (i.e., fundraising and administrative costs in addition to 

contributions to candidates) minus transfers out 

to affiliated committees; adjusted receipts are 

gross receipts minus transfers in from affiliated 

committees. All dollar amounts represent millions of dollars. 

The Reports on Financial Activity series, along 

with other campaign finance information, is 

available to the public in the Commission's 

Public Records Office. 4 

1For more detailed descriptions of the Commission's ongoing 

operations, see the FEC's 1977 and 1978 Annual Reports. 

Programs specifically related to the 1980 Presidential elections 

are discussed in Chapter 1. 

2See 2 U.S.C. Section 438(a)(4) (the election law as amended 

in 1979). 

3The Commission also developed a disclosure series for the 

1979·80 Presidential election cycle. See page 4. 

4 For a listing of FEC information available in the Public 

Records Office, see Appendix 12. 
14 

Financial Activity of Nonparty Political Committees 

January 1, 1977 - December 31, 1978 

Committees 

Contributing 

to Federal 

Candidates 

Contributions 

to Federal 

Candidates 

Committee 

Type 

Committees 

Registered 

Adjusted 

Disbursements 

Adjusted 

Receipts 

Latest 

Cash-on-Hand 

Corporate PAC's 821 697 $ 9.8 $15.3 $17.7 $ 3.9 

Labor PAC's 281 211 10.3 18.9 19.8 4.8 

Political Committees with no 

connected 

organization 

254 120 2.5 16.8 15.4 .9 

T rade/Mem bersh ip/ 

Health PAC's 

543 399 11.5 24.4 25.2 3.6 

Cooperative PAC's 12 11 .9 2.0 2.0 1.4 

Corporations 

Without Stock 

PAC's 

27 21 . 1 .4 .4 .06 

TOTALS 1,938 1,459 $35.1 $77.8 $80.5 $14.7 

Financial Activity of Party Political Committees 

January 1, 1977 - December 31, 1978 

Democrats 

Committee 

Type 

Committees 

Registered 

Committees 

Contributing 

to Federal 

Candidates 

Contributions 

to Candidates 

Expenditures 

on Behalf of 

Federal 

Candidates 

Adjusted 

Disbursements 

Adjusted 

Receipts 

National 9 3 $ .06 $ .06 $12.4 $11.3 

Senatorial .4 0 .9 .3 

Congressional 5 .5 0 2.5 2.8 

State/Local 303 80 .4 .2 8.1 7.7 

Other* 8 5 .4 0 3.3 3.3 

TOTALS 326 90 $1.8 $.3 $27.2 $25.4 

*Other includes Association of State Democratic Chairpersons, other National committees and Presidential convention committees. 
15 

Republicans 

Committee 

Type 

Committees 

Registered 

Committees 

Contributing 

to Federal 

Candidates 

Contributions 

to Candidates 

Expenditures 

on Behalf of 

Federal 

Candidates 

Adjusted 

Disbursements 

Adjusted 

Receipts 

National 9 3 $ .9 $ .3 $36.0 $34.2 

Senatorial 2 .5 2.6 11.7 12.0 

Congressional 2 2 1.8 .8 15.7 14.1 

State/Local 337 107 .7 .4 19.9 20.1 

Other* 9 2 .6 0 2.4 4.4 

TOTALS 359 115 $4.5 $4.1 $85.7 $84.8 

*Other includes National fundraising, other National committees and Presidential convention committees. 

New Policy on Availability of Information 

In December 1979, the Commission adopted a 

policy which reduced fees for information made 

available to the public in the FEC's Public 

Records Office. The policy also addressed the 

availability of standard computer indexes. The 

Commission would continue to make available 

to the public all standard computer indexes on 

Federal campaign finance activity. 5 Complete 

A, B, C, D, E and G indexes would be issued 

every six months. Under the new policy, however, persons who made 20 or more requests for 

computer printouts of information on individual 

candidates or committees available in the 

indexes - or who requested a computer search 

of the entire individual contributor file for a 

particular candidate - would be charged actual 

costs of computer resources required to fill the 

requests. 

The Data Systems Development Division would 

also make available at cost computer tapes on 

statistical information contained in the Reports 

5see Appendix 7 for a full description of these standard indexes. 

on Financial Activity series. Beginning with the 

1979-80 election cycle, the Commission would 

release this information at the end of each twoyear election cycle. 

Monitoring the Election Law6 

The Commission took the following measures to 

monitor potential violations of the election law 

more effectively: it revised procedures for review and analysis of campaign finance reports; 

it enhanced computer capabilities; and it developed new audit procedures based on a major 

reassessment of its audit program. 

Review of Reports 

To utilize limited staff resources efficiently, 

while continuing to ensure a thorough review 

of reports showing substantial campaign finance 

activity, the Reports Analysis Division continued to code and enter into the Commission's 

computer 100 percent of relevant data from all 

6see Chapter 3 of the F EC's 1978 Annual Report for a fu II description of the Commission's procedures for monitoring compliance with the election law. 
16 

campaign finance reports, 7 but the division no 

longer reviewed every report it received. Instead, 

threshold criteria were established for the review 

of reports. Using the Commission's computerbased indexes, analysts did a complete review of 

all reports that met the threshold criteria to be 

sure they were complete and accurate and that 

the reporting committee had complied with the 

election law. To detect reporting problems in 

reports below the threshold, staff employed a 

computerized error-listing system. Since the 

error-listing system cross-checked data for consistency (e.g., whether subtotaled receipts added 

up to gross receipts), analysts could use it to 

identify reporting errors, as well as errors in data 

coding and entry procedures. An analyst could 

then thoroughly review a report with a reporting 

problem. 

Computer Capabilities 

A computer program, developed in 1978 and 

implemented in 1979, enabled reports analysts 

to monitor individual contributions to candidates, national party committees and other 

oolitical committees to determine possible instances of excessive contributions. The computer program also allowed the Commission to 

monitor contributions by political' committees 

as follows: multicandidate committees could 

be monitored for contributions to candidates, 

national party committees and other political 

committees; and party committees could be 

monitored for transfers to candidates and other 

political committees. 

New Audit Procedures 

Recognizing the need to accelerate the audit 

process, the Commission engaged Arthur 

Andersen and Company and Accountants for 

the Public Interest (API) to assess FEC audit 

procedures. 8 The Andersen report identified 

problem areas and made recommendations to 

substantially reduce the time required to complete audits and release them to the public. In 

December 1979, the Commission approved the 

following Andersen recommendations for discretionary audits: 9 

Change the Objective of the Audit Process. The 

FEC should consider establishing a more limited 

audit objective rather than attempt to verify 

each transaction of every political committee 

audited. Carrying out this recommendation, the 

Commission adopted as the main objective of 

the audit process the following principles: 

With its limited resources, the Commission 

will attempt to expand its coverage to the 

maximum extent possible by identifying areas 

of, and concentrating on candidates and committees with, greatest risk of noncompliance; 

by streamlining audit procedures and limiting 

their scope when possible and appropriate; 

and by pursuing and focusing on only those 

matters involving questions of substantial 

noncompliance with the Act. 

Establish Thresholds. The Andersen report 

pointed out that the required resolution of 

minor discrepancies had proven time consuming 

for both campaign staffs and FEC auditors. 

Therefore, the Andersen report recommended 

that thresholds be established so that only 

significant problems would be included in audit 

reports and/or referred to the General Counsel. 

Expedite Release ofAudit Findings. To expedite 

disclosure of audit reports, the Andersen report 

recommended ti1at audit findings letters, indicating the scope and findings of the audit, be issued 

to the audited committee within a specified 

period of time after the completion of the field 

work. The audited committee would then be 

given a reasonable period for response. At the 

7For a description of data coding and entry procedures, see the 

F EC's 1978 Annual Report, pp. 3-5. 

8For a full description of former audit procedures, see pages 

19-20 of the FEC's 1978 Annual Report and pages 12-15 of 

the 1977 Annual Report. See Appendix 4 for the status of 

audits conducted in 1979. 

9 An Andersen report recommendation to establish an audit 

advisory committee was pending before the Commission at 

the end of 1979. The Commission did not adopt Andersen 

recommendations to limit the number of audit reports reviewed by the Commission or to continue random audits. See the 

November 1979 issue of the FEC Record and Commission 

Memorandum No. 79-342. 
17 

end of that period, the findings letter, together 

with a summary of issues resolved by the FEC 

and the committee, would be released as the 

final audit report. 

Separate Audit Reports from Compliance Matters (MUR's). The Andersen report noted that 

many audit reports were delayed in the Office of 

General Counsel, pending the resolution of legal 

questions raised by potential compliance matters 

(MUR's). In those cases where a MUR had been 

opened, the Andersen report suggested that the 

Audit Division issue an audit findings letter that 

would not address the M U R issue, but rather 

would state that the Office of General Counsel 

was reviewing a matter uncovered during the 

audit. 

Implementing the two above recommendations, 

the Commission established new procedures1 0 

whereby each audit report was circulated to the 

Commissioners for approval. If they approved 

the audit report, the Commission would release 

it to the public after the auditee had received a 

copy. If the Commissioners did not approve the 

circulated report, they then voted on whether to 

consider the matter in an open or closed session. 

In addition, any audit report which was considered in open session, but not given final approval 

by the Commission, would be available to the 

public as an interim report. When the Commission later approved the final audit report, that 

report would replace the interim report as the 

final public document. 

The Commission established two separate timetables for the release of discretionary audit 

reports. Final reports for Track A audits, i.e., 

audits with no unresolved legal issues, would be 

released to the public 10 weeks after completion of field work. Final audit reports for Track 

B audits, i.e., audits with unresolved legal issues, 

would be released 12 weeks after completion 

of field work. 

Establish Proper Campaign Accounting Systems. 

The Andersen report noted that political committees with adequate recordkeeping systems 

produced more accurate disclosure reports. The 

report recommended, therefore, that the Commission develop a simple bookkeeping system 

specifically tailored to the needs of small, parttime campaign committees. Such a manual 

would be produced in addition to the existing 

FEC manuals for political committees and 

Presidential campaigns. 

Miscellaneous Measures. The Commission also 

adopted Andersen report recommendations 

requiring strict deadlines for each FEC division 

or office involved in the audit process and a 

stronger recruiting program for the Audit Division. 

Assistance to Candidates 

and Committees 

The FEC offers assistance to Federal candidates 

and committees to help them comply with the 

election law and regulations. For example, Com-

. mission staff respond to telephone inquiries and 

provide candidates and committees with the 

forms, pamphlets and personal assistance they 

need to report correctly and otherwise comply 

with the election law. The Commission also 

keeps the public and media abreast of Federal 

campaign finance activity, FEC policies and 

other activities by disseminating a monthly 

newsletter, press releases and other informational materials. 

During 1979, the Commission expanded these 

efforts to include more active seminar and press 

programs, as well as other outreach activities. 10Although the Commission conducts as much of its business as 

possible in open sessions, it had previously discussed audit reports in its (closed) executive sessions, on the grounds that: 

1) the reports might involve initiation of a compliance matter; 

or 2) they might significantly frustrate implementation of a 

proposed Commission action. 
18 

Regional Seminars 

During 1979, the Commissioners and FEC staff 

conducted four campaign finance seminars to 

meet the information needs of candidates, political committees, parties, separate segregated 

funds (political action committees or PAC's) and 

the public. The seminars were coordinated with 

the regional seminars held by the FEC's Clearinghouse on Election Administration. Seminar 

sites included Madison, Wisconsin; Sacramento, 

California; Philadelphia, Pennsylvania; and 

Austin, Texas. An additional seminar was scheduled for Winston-Salem, North Carolina, in 

January 1980. 

The seminars provided an overview of the Federal Election Campaign Act and the FEC, and 

featured three separate workshops: one on 

reporting requirements of the Act; another on 

requirements of party committees under the 

Act; and a third workshop on requirements of 

PAC's under the Act. To accommodate the 

participants' different interests, several workshops were split into two groups. In a PAC 

workshop in Sacramento, for example, one 

group focused on the legal aspects of PAC 

activity (case law, closed compliance cases, 

relevant advisory opinions); a second group 

focused on the "nuts and bolts" of PAC activities such as establishing a PAC, conducting 

solicitations and undertaking other communication activities. 

The seminars were, in effect, a two-way learning 

process. During each of the seminars, Commissioners and staff devoted a good deal of time to 

answering specific questions. They, in turn, had 

an opportunity to learn more about the difficulties that participants had encountered in 

applying the election law or regulations to practical political situations. 

The FEC's Clearinghouse on Election Administration conducted two-day regional seminars 

simultaneously with the campaign finance 

seminar program. Geared to the information 

needs of State and local election officials, the 

Clearinghouse seminars were developed, and 

conducted, with the assistance of election 

officials from around the country. Seminar 

workshops concentrated exclusively on the 

administration of elections, touching on the 

everyday problems administrators face in training poll workers; selecting polling place locations; voting; planning, managing and costing 

elections; maintaining registration files; registration outreach programs; media relations; 

and counting votes on election night. 

Coordination of the Clearinghouse seminars 

with the FEC seminars on campaign finance 

activity had the advantage of allowing seminar 

attendees to select from a wide range of workshops. Conducting the seminar series in a nonelection year enabled participants to obtain 

information needed before embarking on their 

1980 campaign activities. 

Press Outreach and FOIA 

During 1979, the Press Office intensified its 

outreach efforts. To expand and diversify its 

news audience, the office developed a national 

·mailing list which categorized media contacts 

on a State-by-State basis. The list supplemented 

an existing list of approximately 400 Washington-based media contacts. The office also 

managed to double press release mailings, extend 

press release coverage to identify closed compliance cases (MUR's), and develop a new press 

packet. The packet contained biographical 

sketches of the Commissioners, statistical charts 

on campaign finance activity, FEC budget information and FEC Campaign Guides. One of the 

Press Office's more effective outreach programs 

offered editorial boards of publications, news 

services and broadcasters on-the-record briefings 

with the F EC's Chairman and other Commissioners to help dispell the image of a faceless 

bureaucracy. 

Manpower limitations, however, required the 

Press Office to allot most of its time to responding to queries from the media, primarily through 

telephone calls and discussions requested by 

reporters. Before 1979, a major portion of telephone queries were from Washington-based 
19 

reporters. During 1979, however, approximately 

50 percent of all questions came from news 

reporters and editors throughout the country, 

indicating a broader awareness of the Commission and the Federal election law. The Press 

Office also briefed a growing number of foreign 

correspondents, based both in Washington and 

overseas. 

In 1979, the Press Office handled a larger number of requests filed under the Freedom of Information Act (FOIA): 91 FOIA requests were 

filed in 1979 as compared to 36 in 1978. These 

requests were quite specific and reflected a more 

sophisticated understanding of the election law 

and the FEC than in previous years. The increased complexity of requests, along with a greater 

number filed, required more staff time than had 

been needed in previous years. 

Other Outreach Programs 

For the first time, the Commission began publishing summaries of closed compliance cases 

(MU R's) 11 in its monthly newsletter, the FEC 

Record. These Record summaries provided information on how the Commission resolved 

potential violations of the Act. Selected from 

MUR's closed after January 1, 1979, the summaries did not describe every stage in the compliance process; nor did they disclose the identity of those involved. Rather, they provided 

only enough background to make clear the 

Commission's determination. The full text of 

any M U R closed between 1976 and 1979 was, 

however, available for review and purchase in 

the Commission's Public Records Office. 

The FEC's Information Division12 initiated 

several other programs in 1979 to increase the 

agency's contact with candidates, committees 

and the general public. For example, the Public 

Communications Office began developing a 

national network of contacts. Each information 

specialist in the office was assigned to a multiState region of the country (e.g., the Southwest 

or Midwest). The specialist periodically contacted various persons in the region who were 

directly involved or interested in Federal elections. Contacts included Secretaries of State, 

election officials and persons associated with 

public interest groups or party organizations. 

By creating a two-way information flow 

between Commission staff and persons involved 

in Federal elections, the contact system would 

serve a variety of purposes. Staff could target 

information to specific audiences, gain knowledge about the types of information needed 

in a particular region and publicize appearances 

by Commissioners and staff. 

The Public Communications Office also improved and accelerated dissemination of information. 

The office began to tailor informational mailings 

to specific categories of filers (e.g., Presidential 

committees or PAC's). Additionally, it distributed approximately 26,000 copies of the FEC's 

general information brochure, The FEC and the 

Federal Election Campaign Act, to a wide variety of professional, party and public interest 

groups. 

To keep FEC staff up-to-date on Commission 

activities, the Public Communications Office 

expanded internal communication efforts by 

revamping the FEC's internal newsletter, The 

FEC Slate; by improving the FEC's referral 

guide to other related government agencies and 

offices; and by coordinating training sessions 

for interested staff. 

11 Compliance cases, referred to as MUR's (matters under review), stem from possible violations of the Act, which come 

to the Commission's attention either through formal complaints originating outside the Commission or as a result of 

the FEC's own internal monitoring procedures. The Federal 

Election Campaign Act of 1971, as amended in 1974 and 

1976, required that investigations remain confidential until 

the Commission made a final determination and the case was 

closed. At that point, the case file, including the complaint, 

the findings of the General Counsel's Office and the Commission's actions, were made available to the public. 

12See Chapter 2 of the F EC's 1978 Annual Report for a full description of the division's operations. 
20 

Advisory Opinions 

The Commission issued 64 advisory op1mons 

during 1979 to persons13 who raised questions 

about the application of the election law or FEC 

regulations to specific factual situations. Any 

person who requests an opinion and acts in 

accordance with the opinion is not subject to 

any sanctions under the election law. The opinion may also be relied on by any other person 

involved in a specific transaction which is 

" ... indistinguishable in all its material aspects ... from the activity or transactions discussed in the advisory opinion."14 Several 

opinions that addressed significant issues in 

1979 are briefly summarized below. These opinions and all others issued in 1979 are summarized in greater detail in Appendix 6. 

Voter Registration and 

Get-Out-the-Vote Drives 

Two opinions clarified the circumstances under 

which a labor organization or corporation may 

be involved in get-out-the-vote and registration 

drives. In AO 1978-102, the Commission determined that the United Mine Workers (UMW) 

could not use general treasury funds to finance 

the expenses of radio and television ads urging 

UMW members to vote for candidates friendly 

to labor, even though they did not identify or 

endorse any specific candidate(s) for Federal 

office or any political party because: 

1. The election law prohibits expenditures by 

labor unions in connection with Federal elections. Although 2 U.S.C. §441(b)(2)(B) permits the use of general treasury funds to conduct get-out-the-vote drives, it restricts such 

drives to union members and their families. 

2. If a get-out-the-vote drive extends beyond 

union members and their families, Commission regulations require that it be jointly 

sponsored by the union and a nonprofit or 

civic organization that does not endorse candidates or political committees (11 CF R 

114.4(d)). 

In this case, the UMW had used "general circulation" media to broadcast its get-out-the-vote 

message to an audience that included the general 

public as well as th~ union members for which 

it had been targeted. However, the union was 

the sole sponsor of the ads and thus failed to 

meet the statutory requirement for joint sponsorship with a nonprofit or civic association. 

The Commission, therefore, required the Coal 

Miners Political Action Committee to reimburse 

the general treasury of UMW for union funds 

which were used to conduct the get-out-the-vote 

drive. 

Another opinion addressed voter registration 

activities conducted by a corporate separate 

segregated fund (i.e., a political action committee or PAC). In AO 1979-48, the Commission determined that Rexnord, Inc.'s political 

action committee could pay for an advertisement, carried in a general circulation newspaper, 

which read "Please Register to Vote" and which 

included the identification of "Rexnord, Inc." 

in a lower corner of the advertisement. The 

Commission determined, however, that Rexnord, 

Inc. could not use corporate funds to pay for 

the ad since it was not restricted to Rexnord's 

stockholders and executive or administrative 

personnel. Since the ad would reach a broader 

audience, Rexnord was required to jointly sponsor the activity with a civic or nonprofit organization that did not support or endorse candidates or political parties (11 CFR 114.4(d) 

(1)) -unless the expenses were paid from Rexnord's separate segregated fund. (Commissioner 

Max L. Friedersdorf filed a dissenting opinion to 

AO 1979-48.) 

13Prior to the 1979 amendments, advisory opinions could be 

issued only to Federal officeholders, candidates and political 

committees. During 1979, opinions were issued according to 

this provision. See 2 U.S.C. Section 437f(b)(2) of the Federal 

Election Campaign Act, as amended in 1974 and 1976. Under 

the 1979 amendments of the Act, any person may request an 

advisory opinion. 2 U.S.C. Section 437(a)(1 I (the election law 

as amended in 1979). 

14see 2 U.S.C. Section 437f(c) (the election law as amended in 

1979). 
21 

Other Activities of Corporations 

and Labor Organizations 

Other advisory opinions issued by the Commission in 1979 further clarified permissible activities by labor organizations and corporations. 

They are briefly summarized below: 

AO 1979-21 concluded that costs for a payroll 

deduction system to collect voluntary contributions were not negotiable between a corporation 

and a union. The opinion stated that the separate segregated fund of the Communications 

Workers of America (CWA) had to reimburse the 

New York Telephone Company for costs incurred by the company in making a payroll deduction plan available to CWA members. The 

deduction plan would be used to collect political 

contributions from CWA members for the 

union's separate segregated fund. (Commissioner 

Thomas E. Harris filed a dissenting opinion.) 

AO 1979-25 dealt with a union's payment of expenses for interns working in a Congressional 

office. In the opinion, the Commission determined that, since the interns were performing 

constituent services rather than conducting 

political electioneering, union payment of 

intern expenses would not constitute "contributions" under the election law. 

AO 1979-36 addressed whether expenses incurred by a corporation that had contracted to 

conduct a direct mail fundraising program for 

a Congressional candidate's campaign committee would be "contributions" under the election 

law. The Commission determined that the expenses were not campaign contributions, as long 

as the fundraising contract between the corporation and the campaign committee conformed 

with ordinary business practices in the direct 

mail industry. However, to avoid making an 

illegal contribution to the committee, the 

corporation had to bill the committee for its 

services and any expenses incurred in conducting 

the fundraiser, as provided by the terms of the 

contract. 

AO 1979-17 addressed whether a national party 

committee could accept funds or services from 

national or State chartered banks in return for 

the committee's endorsement of the banks' 

credit card program. The Commission determined 

that there is no explicit exception under 2 

U.S.C. §441b which would permit a political 

party committee to view payments from a corporation or national bank (not made as loans in 

the ordinary course of business) as consideration 

for services rendered, rather than as political 

contributions. The only circumstances under 

which the national party committee could accept such corporate funds (other than loans 

from national banks) would be if they were used 

exclusively for non-Federal elections or to 

acquire an office facility and equipment that 

would not be used for purposes of influencing 

the elections of candidates for Federal office. 

(Commissioners Joan D. Aikens and Max L. 

Friedersdorf filed a dissenting opinion to AO 

1979-17.) 

Central Reference and Indexing System 

To consolidate all information pertaining to 

advisory opinions in a central source, the Data 

Systems Development Division started preliminary research on a Central Reference and Indexing System (CRIS) in 1979. As the first phase 

of a comprehensive information retrieval system 

covering all phases of Commission activity, this 

system will index and cross reference advisory 

opinions by subject categories and by code and 

regulation citations. The computer-based system 

will replace several manual systems, including 

the Subject Index to Advisory Opinions issued 

periodically by the Commission. 

Enforcement 

Enforcement Trends 

In 1979, the Commission entered its fourth year 

as the independent regulatory agency with jurisdiction over civil enforcement of the election 

law.1 5 A number of discernible trends, highlighted below, emerged from its enforcement 

activities during 1979. 

15See 2 U.S.C. Section 437d(e) (the election law as amended in 

1979). 
22 

Annual Caseload - Chart I 

Status of Cases 1977 1978 1979 

Pending at the Beginning 78 93 173 

of Year 

Opened During Year 133 481 268 

Closed During Year 118 401 288 

Pending at End of Year 93 173 153 

Disposition of Cases - Chart II 

6-1-75 to 

12-31-77 1978 1979 

Files* Closed After 

Preliminary Review 273 169 36 

Files Closed After 

Investigation 35 97 86 

Conciliation Agreements Signed 48 97 116 

Files Closed Prior to 

Authorizing Civil 

Action 

Nonfilers 

Other 

0 

1 

64 

7 

150 

6 

Files Closed with 

Authorization of 

Civil Action 

Nonfilers 

Other 

36 

10 

16 

21 

4 

8 

Total Files Closed 403 471 406

*A MUR may contain more than one file. 

As indicated by Chart I above, the enforcement 

caseload in the Office of General Counsel 

doubled during 1979 when compared to 1977, 

the previous nonelection year. During 1979, the 

Commission disposed of 65 percent of its caseload. Chart II indicates that in 1979 the majority of all cases proceeded beyond preliminary 

review and required investigation,1 6 reversing 

the trend of previous years. This phenomenon 

may reflect the more sophisticated nature of 

recent complaints, filed by a public increasingly 

knowledgeable about election law. A number of 

such complaints contained detailed factual presentations and developed complex legal arguments. Moreover, a growing number of these 

complaints were systemic. For example, one 

case required staff to examine the entire solicitation process of a corporate separate segregated fund (a political action committee or 

·PAC) as it affected administrative and executive personnel (MUR 1040).1 7 

The changing nature of cases resulted in a shift 

of staff resources as well. The average amount 

of time taken to find "no reason to believe" in 

cases dating from 1978 was nine weeks; for the 

most recent cases in 1979, an average time of 

less than one week was required. However, the 

increasingly complex nature of a number of 

externally generated complaints resulted in a 

longer initial investigation period. 

1 6 under the Federal Election Campaign Act of 1971 , as amended in 1974 and 1976, a compliance matter could be closed 

after a preliminary review during which the Commission 

found no "reason to believe" a violation of the Act had occurred or after an investigation during which the Commission 

found no "reasonable cause to believe" a violation had occurred. In the event that a compliance matter proceeded beyond 

the investigative stage (i.e., RCTB), the Commission resolved 

the matter either through conciliation or litigation. NOTE: 

During 1979, the Office of General Counsel processed compliance cases in accordance with procedures established under 

the Federal Election Campaign Act of 1971, as amended in 

1974 and 1976 (the Act). The 1979 amendments to the Act 

later modified these procedures. See 2 U.S.C. Section 437g(a) 

et seq. (the election law as amended in 1979). 

1 7 Files of these closed MUR's are available in the F EC's Public 

Records Office. 
23 

The Office of General Counsel concluded 116 

conciliation agreements in 1979, 19 more than 

it had in 1978. It also took an additional 11 

cases to court. The increased offensive litigation workload required almost twice the budget 

and staff resources allocated to the program in 

the Commission's FY 1979 Management Plan. 

Matters Under Review (MUR's)18 

MUR's 916 and 780,19 both resolved by conciliation agreements, exemplify how compliance 

matters can clarify provisions of the election 

law. 

MUR 916, concerning the use of Federal facilities by a Federal officeholder, helped clarify 

what constitutes a campaign expenditure by 

an incumbent officeholder.20 (See 11 CF R 

104.3(a)(1) and 104.1(a).) In January 1979, an 

individual had filed a complaint alleging that 

an incumbent used his Congressional district 

office as sole headquarters for his 1978 reelection campaign and did not disclose any 

contributions or expenditures for use of the 

Federal office space. 

The General Counsel pointed out in its report 

that, in an earlier compliance matter (MUR 

672), the Commission had confirmed that the 

"United States is not a 'person' within the meaning of the Act's contribution reporting provisions."21 The use of government facilities or 

services, therefore, could not be deemed a campaign expenditure. Furthermore, the General 

Counsel pointed out that in two earlier advisory 

opinions (AO 1976-34 and 1976-44), the Commrss1on had established the general principle 

that Congress did not intend legislatively appropriated funds to be considered contributions 

under 2 U.S.C. §431(e). Finally, the Commission had found no reason to believe, in previous 

MUR's, that a violation of the Act had occurred 

when there was no reporting of services and 

goods allegedly provided by the Federal government and State government to Federal candidates. 

MUR 780 dealt with whether a national Senatorial committee had exceeded its authority under 

2 U.S.C. §441a(d) by making special party 

expenditures on behalf of a Senatorial candidate 

as agent of both a State party committee and 

the national party committee.22 The General 

Counsel reported in this case that Commission 

regulations (11 CFR 110.7(a)(4)) specifically 

grant to the national committee of a political 

party the right to designate an agent to make 

special party ( §441 a(d)) expenditures on its 

behalf. While the regulations do not specifically 

grant that same authority to a State committee, 

neither do they prohibit it. In the absence of 

any specific prohibition, the General Counsel 

did not consider such designation improper. 

Moreover, since 2 U.S.C. §441a(a)(4) permits 

unlimited transfers of funds between and among 

political committees which are national and 

State committees of the same political party, the 

General Counsel said it was immaterial which 

committee's funds had been expended under 

§441a(d). 

Litigation 

Clarification of the Law. Several issues resolved 

through litigation in 1979 also helped clarify 

certain provisions of the election law. A suit 

brought by Barnstead for Congress Committee 

(Barnstead Committee) further clarified the 

types of expenses which, under the election law, 

are exempt from the definition of "expenditures" in connection with a Federal election. In 

Barnstead for Congress Committee v. FEC, et 

18Except where otherwise noted, all citations in this section 

refer to the Federal Election Campaign Act, as amended, 

prior to its being amended in 1979. 

19see the explanation of a MUR on page 19, footnote 11. 

2°For a more detailed summary of this MUR, see the November 1979 issue of the FEC Record. 

21 This finding was codified in the 1979 amendments to the 

election law which specifically exclude Federal Government 

from the definition of "person." See 2 U.S.C. Section 431 (11) 

(the election law as amended in 1979). 

22For a more detailed summary of this MUR, see the October 

1979 issue of the FEC Record. 
24 

a/., the Barnstead Committee alleged that the 

sponsors of a televised film about House Speaker 

Tip O'Neill (whom Barnstead had opposed in 

the general election) had violated §441 b of the 

election law. This provision prohibits corporate 

contributions or expenditures in connection 

with Federal elections. The Barnstead Committee contended that, since Speaker O'Neill was 

officially a candidate at the time the ftlm was 

broadcast, the film was " ... in essence a campaign film, which enhanced the political standing of one candidate over another." It argued 

that costs incurred in producing and broadcasting the film, therefore, were expenditures in 

connection with a Federal election. 

The FEC, on the other hand, maintained that 

the costs incurred in sponsoring the film by 

the WGBH Educational Foundation (Public 

Broadcasting, Channel 2), the Corporation for 

Public Broadcasting and the Quaker Oats Corporation were news story expenses exempt from 

the definition of "expenditures" under §431(f) 

(4)(A) of the election law. This provision of the 

law states that expenditures do not include: 

" ... any news story, commentary or editorial 

distributed through the facilities of any broadcasting station, newspaper, magazine, or other 

periodical publication, unless such facilities are 

owned or controlled by any political party, 

political committee or candidate." 

The U.S. District Court for the District of 

Columbia dismissed the suit in June 1979, upholding the FEC's determination that the costs 

involved in sponsoring the broadcast were, in 

fact, exempt from the definition of "expenditure" under the election law. 

A suit filed by the FEC against the American 

Federation of State, County and Municipal Employees (AFSCME) clarified the meaning of 

"communications costs" made by a corporation 

or union to expressly advocate the election or 

defeat of a clearly identified candidate. 2 3 The 

Commission alleged that AFSCME had violated 

the disclosure requirements of 2 U.S.C. §431(f) 

(4)(C) by failing to report certain costs incurred 

in communicating with its membership. The 

Act specifically excludes from the definition of 

"expenditure" any communications made by a 

membership organization or a corporation to its 

members or stockholders. The Act requires, 

however, that the costs directly attributable to 

communications expressly advocating the election or defeat of a clearly identified candidate 

be reported to the Commission if they exceed 

$2,000 per election. 

The communication in question was a political 

poster circulated by AFSCME to its members 

immediately before the 1976 general election. 

The poster depicted a caricature of President 

Ford, wearing a lapel button with the words 

"Pardon Me," and embracing former President 

Richard Nixon. The poster contained a quote 

taken from a speech given by Ford as Vice 

President: "I can say from the bottom of my 

heart - the President of the United States is 

innocent and he is right." 

In May 1979, the District Court for the District of Columbia dismissed the suit. In the first 

attempt to apply the Supreme Court's "express 

advocacy" test, the court found that, although 

the Nixon-Ford poster included a clearly identified candidate and may have tended to influence 

voting, it primarily concerned a public issue and 

did not unambiguously relate to a particular 

candidate's campaign. Therefore, the court 

found that the poster expenses were not required to be reported under 2 U.S.C. §431 (f) 

(4)(C). 

Commission's Enforcement Powers. In its short 

existence, the Commission has established 

before the courts its broad powers as a regulatory agency. For example, by consistently upholding the Commission's powers to obtain additional information from respondents during the 

agency's enforcement proceedings, the courts 

23 For more details on this case, see the July 1979 issue of the 

FEC Record. 
25 

have recognized the FEC's authority24 to 

actively investigate alleged violations of the 

election law. 

The courts have also upheld the Commission's 

exclusive primary jurisdiction over enforcement 

of the Act. In 1979, for example, Federal courts 

dismissed 20 suits which were brought by 

Henry Walther against Federal candidates and 

committees on whose behalf the Commission 

appeared as a friend of the court. 25 In dismissing the suits, the courts found that Mr. Walther 

had not followed the statutory procedure set 

forth in 2 U.S.C. §437g(a)(9). This provision of 

the election law states that parties contending 

the Commission has acted contrary to law in 

dismissing a compliance matter must file a complaint against the Commission (rather than 

against the respondent(s) named in the complaints). In August 1979, therefore, the District 

Court for the District of Columbia determined 

that it was "clearly without subject matter jurisdiction [for the court] to entertain Mr. Walther's 

attempt at the direct enforcement of the Federal 

election law." 

Similarly, in a suit brought against the FEC by 

the Committee to Elect Lyndon LaRouche, 

the courts upheld the Commission's statutory 

role with regard to the Presidential Primary 

Matching Account (26 U.S.C. §9031 etseq.). In 

1976, the Commission had denied primary 

matching funds to Lyndon LaRouche, U.S. 

Labor Party Presidential candidate, on the 

grounds that Mr. LaRouche's matching fund 

requests lacked proper documentation. Mr. 

LaRouche stated that he was eligible for funds 

because he had raised at least $5,000 in contributions of $250 or less in each of at least 

20 states, the contribution threshold for matching fund eligibility.26 The Commission's denial 

of matching funds had previously been upheld 

by the district court. However, Mr. LaRouche 

and his campaign committee appealed the 

FEC's determination. On August 23, 1979, the 

U.S. Court of Appeals for the District of Columbia upheld the Commission's determination in 

Committee to Elect Lyndon LaRouche v. 

FEC. 27 The court concluded that, if the initial 

matching fund submission contains "patent 

irregularities suggesting the possibility of fraud, 

the Commission is authorized to conduct an 

investigation during the certification process to 

determine whether the candidate, in fact, has 

raised the threshold amount." 

For the most part, the courts· have shown 

deference to the FEC's judgment in dismissing 

complaints filed with the Commission. In June 

1979, for example, the U.S. District Court for 

the District of Columbia granted summary 

judgment to the FEC in two consolidated suits 

filed by Henry Walther against the FEC on 

November 3 and 21, 1978. (The courts had 

previously dismissed 20 suits brought by Mr. 

Walther against Federal candidates and committees on whose behalf the F EC had appeared as a 

friend of the court. ) 

The suits contended that the Commission had 

acted contrary to law in dismissing 45 complaints filed by Mr. Walther and the National 

Right to Work Committee pursuant to 2 U.S.C. 

§437g(a)( 1). The court determined that the 

Commission's decision not to investigate the 

complaints was "eminently reasonable" and was 

not arbitrary or capricious, the standard for 

judicial review of Commission actions.28 

24See 2 U.S.C. Section 437d(a) (the election law as amended in 

1979). 

25For more details, see the June and September 1979 issues of 

the FEC Record. 

26See 11 CFR 9033.2(c)(1 ), as revised and renumbered in 1979. 

27 For a detailed summary of this suit, see the October 1979 

issue of the FEC Record. 

28For more details on this suit, see the June and September 

1979 issues of the FEC Record. 
26 

Constitutionality of the Election Law. Several 

suits in 1979, going beyond the Supreme Court's 

Buckley v. Valeo 29 decision of 1976, further 

clarified the constitutionality of the election 

law. In FEC v. Milton Weinsten and Winfield 

Manufacturing Company, for example, the Commission alleged that Milton Weinsten, President 

of Winfield Manufacturing Company (a government contractor), had violated the ban on 

corporate contributions when he used corporate 

funds to reimburse employees of Winfield Manufacturing Company for contributions they had 

made to the 1976 Presidential primary campaign 

of Milton Shapp. Defendants sought to have 

various corporate prohibitions in the Act declared unconstitutional. Their argument stated 

that, taken together, Buckley v. · Valeo, which 

upheld contribution limits, and First National 

Bank of Boston v. Bellotti, which overturned a 

State law prohibiting bank expenditures to 

influence the outcome of ballot questions, 

demonstrate the unconstitutionality of those 

prohibitions. The United States District Court 

for the Southern District of New York, however, 

concluded that the following provisions of the 

Act are constitutional: 

- the prohibition on corporate contributions or 

expenditures in connection with Federal 

elections (2 U.S.C. §441b); 

- the prohibition on contributions by government contractors (2 U.S.C. §441c);and 

- the prohibition on contributions. made in 

another person's name (2 U.S.C. § 441f). 

In reaching its conclusion, the court relied on 

United States v. Chesnut. 30 That decision upheld the ban on corporate contributions because 

the ban: 1) avoided the deleterious influence on 

Federal elections of money supplied by "those 

who exercise control over large aggregations of 

capital," and 2) prevented "corporate and union 

officials from using corporate or general union 

funds for political purposes without the consent 

of stockholders and union members." Following 

the court's decision, a consent judgment was 

entered into on June 11, 1979, in which the 

defendants admitted violations and agreed to 

pay a civil penalty. 

Another suit decided in 1979 dealt with the 

constitutionality of the election law's reporting 

requirements. In Socialist Workers Party v. 

FEC, the FEC concurred, without necessarily 

agreeing to all the facts presented, that the 

Socialist Workers Party (SWP) should not be 

compelled to comply with the reporting requirements of the election law (which require identification of individuals) until the close of the 

1984 reporting period. SWP had filed suit 

against the Commission in July 1976, alleging 

that specific disclosure provisions of the election 

law deprived SWP and its supporters of certain 

First Amendment rights.31 The consent decree 

approved in January 1979 by the U.S. District 

Court for the District of Columbia noted that 

SWP and those connected with it "have been 

subjected to systematic harassment" by individuals and agencies other than the FEC. Citing 

the standard for the potential unconstitutional application of the disclosure provisions 

in the 1976 Supreme Court decision (Buckley v. 

Valeo, 424 U.S. 1), the Court's order stated that 

SWP had demonstrated at least "a reasonable 

probability that the compelled disclosure" of 

names of its contributors and recipients of its 

expenditures would continue to "subject them 

to threats, harassment, or reprisals from either 

government officials or private parties." (Buckley v. Valeo, 424 U.S. 1 at 74.) 

29For a detailed discussion of the Buckley v. Valeo decision, see 

the F EC's 1976 Annual Report. 

30See United States v. Chesnut, 394 F.Supp. 581 (S.D.N. Y. 

1975), aff'd., 533 F.2d 40, 50-51 (2d Cir. 1976). 

31 For more details on this suit, see the March 1979 issue of the 

FEC Record. 
Chapter 3 21 

Summary of the 

1979 Amendments to 

the Federal Election 

Campaign Act 

On January 8, 1980, the President signed into 

law the 1979 amendments to the Federal Election Campaign Act of 1971, as amended (Public 

Law 96-187). This chapter highlights major 

changes in the law with particular focus on: 

- Changes that apply to all groups; 

- New provisions that affect specific groups 

(candidates, their authorized committees, 

party political committees and other political 

committees); and 

-Amendments that modify Commission powers. 

All citations in this chapter are to the Federal 

Election Campaign Act of 1971, as amended 

(including the 1979 amendments), as contained 

in Title 2 of the United States Code. Generally, 

this chapter includes only major revisions or 

modifications to the law. Occasionally, however, 

to avoid possible confusion, the summary also 

identifies certain provisions of the election law 

that have been retained in their original form. 

Those seeking guidance for their own activity 

should consult the full text of the Act, as 

amended. 

Changes That Affect 

All Committees 

Registration 

The 1979 amendments: 

1. Eliminate requirement that each political 

committee have a chairman. Retain requirement that each committee have a treasurer 

and that no contribution or expenditure be 

made when there is a vacancy. Section 432(a). 

2. Reduce the 11 categories of information required on the Statement of Organization to 

six. The following five categories have been 

eliminated: the area, scope and jurisdiction of 

the committee; the names, addresses and 

positions of committee officers other than the 

treasurer; a statement whether the committee 

is a continuing one; the disposition of residual 

funds which will be made in the event of 

dissolution; and a statement of the reports 

required to be filed by the committee with 

State or local officers. Section 433(b). 

3. Add requirement that the type of committee 

and the type of its connected organization or 

affiliated committee (if any) be included in 

the Statement of Organization. Section 433(b). 

4. Require only authorized committees to list 

candidates supported. Section 433(b). 

Recordkeeping 

The 1979 amendments: 

1. Retain $50 threshold for keeping records of 

contributions. Section 432(c) (2). 

2. Reduce recordkeeping requirements by increasing from $100 to $200 per calendar year 

the threshold requirement for keeping detailed records (i.e., occupation and name of employer) on aggregate contributions from the 

same person. Section 432(c)(3). 

3. Retain requirement for keeping records of all 

disbursements. Section 432(c) (5). 

4. Modify requirements for documentation and 

detailed recordkeeping of disbursements so 

that the requirements apply only to those 

disbursements exceeding $200 (formerly 

$100) and not to aggregate expenditures (as 

formerly required). Reduce required documentation for such disbursements to a receipt, 

invoice or canceled check. Section 432(c)(5). 

5. Modify the definition of "identification." For 

recordkeeping and reporting purposes, "identification" for an individual must include the 

individual's name, mailing address, occupation 

and the name of his/her employer. For any 

other person, identification must include the 

person's full name and address. Section 

431(13). 

6. Add provision that the committee will be 

considered to be in compliance with the Act 

if the treasurer is able to demonstrate that 

"best efforts" have been made to obtain, 

maintain and submit the information required 

by the Act. Section 432(i). 
28 

Political Advertising/Solicitation Notices 

The 1979 amendments: 

1. Repeal requirement for the following notice, 

formerly ·required on all campaign solicitations by a political committee: 

A copy of our report is filed with the 

Federal Election Commission, and is 

available for purchase from the Federal Election Commission, Washington, 

D.C. 

2. Extend the requirement for an authorization 

notice, previously required only for candidate 

advocacy statements, to solicitation statements as well. Thus, under the new amendments, a communication that expressly advocates the election or defeat of a clearly identified candidate or solicits contributions through 

any broadcasting station, newspaper, magazine, outdoor advertising facility, direct mailing or any other type of general public political advertising, must include an authorization 

notice, as indicated below: 

a. If the communication is paid for and authorized by a candidate or his/her authorized political committee or its agents, it 

must state that the communication has 

been paid for by the authorized political 

committee. 

b. If the communication is authorized by the 

candidate or his/her authorized political 

committee or its agents, but paid for by 

another person, it must state that the 

communication has been authorized by the 

committee, and paid for by a specific person. 

c. If the communication is not authorized by 

the candidate or his/her authorized political committee or its agents, it must clearly 

state that the communication has not been 

authorized by the candidate or his/her committee and must clearly state the name of 

the person who paid for the communication. 

Bank Loans 

The amendments extend the contribution 

exemption for bank loans to include loans made 

. by Federally chartered depository institutions or 

depository institutions which are insured by the 

Federal Deposit Insurance Corporation, the 

Federal Savings and Loan Insurance Corporation 

or the National Credit Union Administration -

in addition to the currently exempted loans 

fmm State and national banks. Section 431(8) 

(B)(vii). 

Reporting 

Contents. The amendments redefine and reorder 

reporting categories under which receipts and 

disbursements must be reported. (New forms 

will reflect these changes.) Section 434(b). 

Itemization. The amendments reduce reporting 

requirements by raising from $100 to $200 the 

threshold for itemizing receipts and disbursements. 

48-Hour Reports. The amendments modify the 

requirement for 48-hour reports and limit it to 

principal campaign committees, which are 

responsible for reporting last-minute contributions received by all authorized committees. 

Formerly, contributions of $1,000 or more 

which were received after the 15th day but more 

than 48 hours before an election had to be 

reported by the recipient committee within 48 

hours of their receipt. The amendments extend 

the 48-hour reporting period to cover contributions received after the 20th day but more than 

48 hours before the election. Section 434(a)(6) 

(A). 

Termination 

The amendments eliminate the financial activity 

threshold ($1 ,000 or less) for termination. 

Instead, a committee may terminate only when 

it has provided the Commission with written 

notification that it will no longer receive any 

contributions or make any disbursements. 

Amendments retain, however, former requirement that the committee have no outstanding 

debts or obligations. Section 433(d). 
29 

Changes That Affect 

Candidates and Their 

Authorized Committees 

Definition of Candidate 

The amendments establish a $5,000 threshold 

which, alone, triggers candidate status. An individual becomes a candidate only after he/she receives contributions or makes expenditures in 

excess of $5,000. This eliminates the former 

provision that an individual became a candidate 

either when he/she made any expenditures or 

received any contributions, or when the individual took appropriate action under State law to 

qualify for election to Federal office. Section 

431 (2). 

Candidate's Responsibilities 

The 1979 amendments: 

1. Eliminate candidate's reporting responsibilities; instead the candidate's principal campaign committee reports all financial activities 

of the campaign. Section 434(a)( 1 ). 

2. Add provision that candidates may accept 

contributions or make expenditures only as 

agents of their authorized committees. Section 432(e)(2). 

3. Modify requirement for designation of campaign depository(ies) so that only the committee - not the candidate - may make the 

designation. In addition to national or State 

banks the amendments add the following 

finan~ial institutions to the list of permissible 

depositories: Federally chartered depository 

institutions or depository institutions insured 

by the Federal Deposit Insurance Corporation, the Federal Savings and Loan Insurance 

Corporation or the National Credit Union 

Administration. Section 432(h)( 1). 

Designations by Candidate 

Principal Campaign Committee. The 1979 

amendments: 

1. Require that each candidate (except nominated Vice Presidentiai candidates) designate 

a principal campaign committee in writing 

within 15 days after the individual becomes a 

candidate. Formerly, Commission regulations 

provided 30 days for designation of principal 

campaign committees. (The principal campaign committee need not register until candidate status is triggered, i.e., the $5,000 threshold is exceeded.) Section 432(e)( 1). 

2. Add requirement that candidate's name be included in the name of any authorized committees, including the principal campaign 

committee. Section 432(a)(4). 

Authorized Committees. The 1979 amendments: 

1. Add provision that candidate must file written designations of any additional authorized 

committees with principal campaign committee. The principal campaign committee must 

file all designations with the appropriate 

supervisory authority. Section 432(e)( 1 )(f). 

2. Modify registration requirements so that 

authorized committees must file Statements 

of Organization with the principal campaign 

committee (rather than with the FEC, Senate 

or House) within 10 days of their designation 

by the candidate. Section 433(a). 

3. Add requirement that candidate's name be 

included in the name of any authorized committee. Section 432(e)(4). 

4. Add provision that no committee which supports more than one candidate may be designated as an authorized committee. Amendments define "support," making clear the 

term does not include a contribution of 

$1,000 or less to another candidate's authorized committee. Add provision that candidates may, nevertheless, designate committees 

established solely for joint fundraising purposes as authorized committee. Retain the 

provision that Presidential candidates may 

designate the national committee as the 

principal campaign cdrnmittee. Section 432 

(e)(3). 
30 

Contributions 

Definition. The 1979 amendments repeal from 

the definition of contribution "written contract, 

promise or agreement, whether or not legally 

enforceable, to make a contribution ..." 

Section 431 (8)(A). 

Excess Campaign Funds. The 1979 amendments 

modify provision on use of excess campaign 

funds. Candidates who were not U.S. House or 

Senate Members on January 8, 1980, may not 

convert surplus funds to personal use. Add 

prov1s1on permitting candidates and their 

authorized committees to transfer unlimited 

excess campaign funds to party political committees. Section 439a. 

Contribution Exemptions. The 1979 amendments expand contribution exemptions (i.e., 

payments exempted from the definition of 

contribution) for certain volunteer activities on 

behalf of candidates by: 

1. Establishing a $1,000 limit (per candidate, 

per election) for certain types of volunteer 

activity that individuals may conduct on 

behalf of candidates. Formerly, the Act 

placed a $500 limit on such activities. Any 

payments exceeding the $1,000 limit are 

not exempt. Sections 431(8)(B)(ii), (iii) 

and (iv). 

2. Extending the exemption to permit the 

volunteer to conduct candidate-related activities in a church or community room that is 

used on a regular basis by members of a 

community for noncommercial purposes. 

Formerly, individuals were limited to the use 

of their residential premises for such purposes. Section 431(8)(B)(ii). 

The 1979 amendments also add a provision permitting any candidate (Federal, State or local) 

or his/her authorized committee to make payments for campaign materials (e.g., pins, bumper 

stickers, handbills, brochures, etc.) which include information on or reference to other candidates and which are used in connection with 

volunteer activities. The payments must be made 

from funds that are permissible under the Act 

and may not be made for general public communication or public political advertising. Section 431 (8)(B)(xi). 

Reporting 

Who Reports. The 1979 amendments eliminate 

requirement that candidates file reports; instead, 

amendments require that all reports be filed by 

the treasurer of the candidate's principal campaign committee. Section 434(a)(2)(A). 

Number of Reports. The amendments reduce 

the number of required reports from a maximum of 24 reports, per election cycle, to a 

maximum of 9. See below. 

When Congressional Campaigns File. With regard 

to an election year, the 1979 amendments: 

1. Eliminate contribution and expenditure 

thresholds for quarterly reports. Quarterly 

reports must be filed regardless of amounts 

received or expended. Quarterly reports 

must be filed by the 15th day after the 

close of each calendar quarter (rather than 

by the 10th day as formerly required) except the 4th quarter report (year-end report) 

which must be filed by January 31 of the 

following year. Section 434(a)(2)(iii). 

2. Eliminate requirement for post-primary election report. 

3. Retain requirement for pre-primary and pregeneral election reports. Those reports are due 

on the 12th day before the election (rather 

than on the 10th day as formerly required). If 

sent by registered or certified mail, they must 

be postmarked no later than the 15th day 

before an election (rather than the 12th day 

as formerly required). The reports must be 

complete as of the 20th day before the 

election (rather than the 15th day as formerly 

required). Section 434(a)(2)(A)(i). 

4. Retain requirement for a post-general election report, filed by the 30th day after any 

general election and complete as of the 

20th day after the election. Section 434(a) 

(2)(A)(ii). 

5. Waive the requirement for a quarterly report 

if a pre-election report is due with in the 
31 

period beginning on the 5th day and ending 

on the 15th day after the close of a calendar 

quarter. Section 434(a) (8). 

The 1979 amendments eliminate requirement 

for quarterly reports in a nonelection year. 

Instead, amendments require two semiannual 

reports. The first report, covering January 

through June, must be filed by July 31; the 

second report, covering July through December, 

must be filed by January 31 of the following 

year. Sections 434(a)(2)(B)(i) and (ii). 

When Presidential Campaigns File. With regard 

to a Presidential election year, the 1979 amendments establish rules for filing either quarterly 

or monthly reports: 

1. Presidential campaign committees which have 

received or spent $100,000, or which anticipate receiving or spending that amount, must 

file monthly reports for the first nine months, 

plus pre- and post-general election reports and 

a year-end report. If, at any time during the 

year, a Presidential campaign committee 

reaches the $100,000 threshold, it must file a 

monthly report for the next reporting period 

after the threshold has been reached. Sections 

434(a)(3)(A)(i) and (iii). 

2. Other Presidential principal campaign committees (which do not exceed the $100,000 

threshold) must file quarterly reports and 

pre-election and post-general election reports. 

Section 434(a)(3)(A)(ii). 

During a nonelection year, the 1979 amendments retain option for Presidential committees 

to file either monthly or quarterly reports. Quarterly reports must be filed by the 15th day after 

the close of the calendar quarter rather than on 

the 1Oth day as formerly required. Sections 

434(a)(3)(B)(i) and (ii). 

Special Elections. The 1979 amendments add 

provision that requires the Commission, within 

five days after a State sets the date for a special 

election, to establish filing dates for reports 

required of candidate committees involved in 

that special election and committees that support them. The Commission is also required to 

notify these principal campaign committees of 

the filing dates. Section 434(a)(9). 

Changes That Affect 

Political Parties 

Registration 

Which Committees Must Register? The 1979 

amendments relax registration requirements for 

party organizations by modifying definition of 

"political committees." Local party committees 

are not considered political committees and will 

not incur registration and reporting obligations 

unless they: 

- receive contributions aggregating more than 

$5,000 a year; 

- spend more than $5,000 a year for payments 

that are exempted from the definition of contribution or expenditure (see below); 

- make aggregate contributions exceeding 

$1,000 a year; or 

- make aggregate expenditures exceeding 

$1,000 a year. Section 431(4)(C). 

When Must They Register? The amendments 

require party political committees to file a 

Statement of Organization within ten days after 

becoming a political committee within the 

meaning of the Act. Section 433(a). 

Contribution Exemptions 

Volunteer Activity by Individuals on Behalf of 

Party Committees. The amendments extend to 

party political committees several contribution 

exemptions (i.e., payments exempted from the 

definition of contribution) formerly granted to 

candidate-related activities. 

1. The amendments permit volunteers to use 

real or personal property, including the cost 

of invitations, food and beverages, for partyrelated activities conducted at an individual's 

residence or a church or community room. 

The amendments establish a $2,000 annual 

limit, per individual, on behalf of all political 

committees of a political party. Section 431 

(8)(B)(ii). 
32 

2. The amendments permit vendors to sell discounted food and beverages to party committees provided that the charge to the committee at least equals the vendor's cost. The 

amendments establish a $2,000 annual limit, 

per vendor, on behalf of all political committees of a political party. Section 431 (8)(B) 

(iii). 

3. The 1979 amendments permit volunteers to 

pay their own travel expenses made on behalf 

of a party political committee. The amendments establish a $2,000 annual limit, per 

individual, for travel on behalf of all political 

committees of a political party. Section 431 

(B)(B)(iv). 

Campaign Materials. The 1979 amendments 

permit State and local party committees to 

make payments (exempted from contributions) 

for certain campaign materials (e.g., bumper 

stickers, pins) used by such committees in connection with volunteer activities on behalf of 

party candidates. The funds used for the payments must be: 

- made from contributions permissible under 

the Act; 

- not designated for a particular candidate; and 

- not used for broadcasting, newspapers, magazines, billboards, direct mail or other similar 

types of general public political advertising. 

Section 431 (B)(B)(x). 

Voter Registration and Get-Out-the-Vote. The 

1979 amendments add exemption for payments 

for voter registration and get-out-the-vote activities conducted by State or local party committees on behalf of Presidential candidates, provided that the funds used for these activities are: 

- made from contributions permissible under 

the Act; 

- not designated for a particular candidate; and 

- not used for broadcasting, newspapers, magazines, billboards, direct mail or other similar 

types of general public political advertising. 

Section 431 (8)(B)(xii). 

Legal and Accounting Services. The 1979 

amendments extend to all party political committees the provision permitting them to accept 

legal or accounting services, provided the services are paid for by the accountant's or lawyer's 

regular employer and are not attributable to 

activities which directly further the election of 

any candidate to Federal office. The amendments retain requirement that the amount paid 

or incurred by the regular employer, although 

not considered a contribution, must be reported 

by the committee receiving the services. Section 

431 (B)(B)(ix)(l). 

Ballot Access. The 1979 amendments add exemption for payments received by party political committees from candidates as a condition 

of ballot access. Section 431(8)(B)(xiii). 

Slate Card. The amendments retain the slate 

card exemption. Section 431(8)(B)(v). 

Excess Campaign Funds. The amendments permit candidates and their authorized committees 

to transfer unlimited excess campaign funds to 

party political committees. Section 439a. 

Reporting 

The amendments reduce the number of reports 

required by party political committees. 

During an Election Year. The 1979 amendments: 

1. Eliminate contribution and expenditure 

thresholds for quarterly reports. Quarterly 

reports must be filed regardless of amounts 

received or spent. Quarterly reports must be 

filed by the 15th day after the close of each 

calendar quarter (rather than by the 10th day 

as formerly required) except the 4th quarter 

report (year-end report), which must be filed 

by January 31 of the following calendar year. 

Section 434(a)(4)(A)(i). 

2. Add option to file monthly rather than quarterly reports. Section 434(a)(4)(B). 

3. Retain requirement for pre-primary and pregeneral election reports. Those reports are 

due on the 12th day before an election 

(rather than on the 10th day as formerly 

required). If sent by registered or certified 
33 

mail, they must be postmarked no later than 

the 15th day before an election (rather than 

the 12th day as formerly required). The 

reports must be complete as of the 20th day 

before an election (rather than the 15th day 

as formerly required). Section 434(a)(4)(A) 

(ii). 

4. Eliminate the requirement for a post-primary 

election report. 

5. Retain requirement for a post-general election 

report, filed by the 30th day after the general 

election and complete as of the 20th day after 

the election. Section 434(a)(4)(A)(iii). 

During a Nonelection Year. The 1979 amendments: 

1. Eliminate requirement for quarterly reports. 

2. Establish two options for reporting: 

a. Semiannual reports. The first report, covering the period from January through June, 

must be filed by July 31. The second 

report, covering the period from July 

through December, must be filed by 

January 31 of the following year. Section 

434(a)(4)(A)(iv); or 

b. Monthly reports. Section 434(a)(4)(B). 

Public Financing 

The amendments increase from $2,000,000 to 

$3,000,000 the amouJ'lt of public funds available 

to the national committees of major political 

parties for their nominating conventions. Section 9008(b)( 1 ). 

Changes That Affect 

Nonparty, Noncandidate 

Committees 

Definitions 

Separate Segregated Fund. The 1979 amendments: 

1. Expand definition of political committee to 

include "any separate segregated fund established under ... [the Act] ," regardless of the 

amount of financial activity. Section 431(4) 

(B). 

2. Add requirement that each separate segregated fund include the name of its connected 

organization in the committee's name. Section 432(e)(5). 

3. Add requirement that a separate segregated 

fund must register within ten days of its 

"establishment." Section 433(a). 

Connected Organization. The 1979 amendments add definition of connected organization 

as one "which is not a political committee but 

which directly or indirectly establishes, administers or financially supports a political committee." Section 431(7). 

Unauthorized · Committee. The 1979 amendments: 

1. Retain $1,000 per calendar year campaign 

activity threshold for qualifying as a political 

committee. Section 431 (4)(A). 

2. Add provision that prohibits an unauthorized 

political committee from including the name 

of any candidate in its name. Section 432(e) 

(4). 

Reporting 

When Reports Are Filed. Same as for party 

committees (above). 

Reports Filed With State Offficers. The 1979 

amendments add a provision permitting political committees (other than authorized committees) to file only that portion of the report 

applicabl-e' to candidates seeking election in the 

particular State. Section 439(a)(2)(B). 

Independent Expenditures 

The 1979 amendments: 

1. Reduce reporting requirements for independent expenditures by persons other than political committees by: 

a. Raising the reporting threshold from $100 

to $250; and 

b. Raising from $100 to $200 the threshold 

for reporting the identity of any person 

who makes a contribution toward the 

independent expenditure. Section 434(c). 
34 

2. Modify requirement for 24-hour pre-election 

report of independent expenditures aggregating $1,000 or more which are made shortly 

before an election. Formerly, such reports 

were required when independent expenditures 

were made after the 15th day but more than 

24 hours before the election. The amendments extend that period to cover such 

independent expenditures made after the 

20th day but more than 24 hours before the 

election. Section 434(c)(2). 

Changes That Affect 

Commission Powers 

Advisory Opinions 

The 1979 amendments extend the right to 

request an advisory opinion to any person 

affected by the Act as long as the request relates 

to a specific transaction or activity which that 

person intends to undertake. Section 437f. 

Regulations 

The 1979 amendments: 

1. Add new provision which states that any 

person who relies on any Commission rule or 

regulation and acts in good faith in accordance with the rule or regulation shall not be 

subject to any sanction provided by the Act 

or Chapters 95 and 96 of Title 26 of the 

United States Code. Section 438(e). 

2. Add provision for expediting regulations that 

implement the 1979 amendments. 

Enforcement 

Complaint. The amendments retain prov1s1on 

that any person may file a written, signed and 

notarized complaint, but add that such complaints are made under penalty of perjury. Also 

add requirement that the Commission notify the 

respondent within five days after the complaint 

is received. Before the Commission can take any 

action on a complaint, other than a vote to dismiss, the person named in the complaint has 15 

days after the notification in which to demonstrate, in writing, why no action should be taken 

against him/her. Section 437g(a)(1). 

Reasonable Cause to Believe. The amendments 

eliminate "reasonable cause to believe" stage in 

enforcement process. The Commission will 

proceed from "reason to believe" to "probable 

cause to believe." 

Probable Cause to Believe and Respondent's 

Right to Reply. The amendments add provision 

stipulating that respondent be notified of a 

recommendation by the General Counsel that 

the Commission proceed to a vote on "probable 

cause to believe" the Act has been violated. The 

notification must include a brief, setting forth 

the General Counsel's position on the legal and 

factual issues. Within 15 days, the respondent 

may submit a reply to the General Counsel's 

brief, which, if submitted, must be considered 

by the Commission before it makes a determination. Section 437g(a) (3). 

Conciliation Agreement. The amendments modify conciliation provision so that the Commission 

attempts conciliation only if, by an affirmative 

vote of four Commissioners, it finds "probable 

cause to believe," rather than "reasonable cause 

to believe," as formerly required. Section 437g 

(a)(4)(A)(i). 

Confidentiality. The amendments require (prior 

to the final closing of an enforcement case) the 

written consent of the respondent and the Commission before the Commission may make 

public any action or information derived in connection with a conciliation attempt. Formerly, 

the respondent's written consent was required to 

make any notification or investigation public 

prior to the closing of a case. The amendments 

retain, however, the requirement that the Commission place a conciliation agreement on the 

public record, once it has been finalized. Section 

437g(a)(4) (B) (i). 

Commission Action. The amendments extend 

from 90 to 120 days the period within which 

the Commission must act on a complaint filed 

by an individual. If the Commission does not 

act on a complaint within 120 days, the complainant may file with the District Court. Section 437g(a) (8) (A). 
35 

Clearinghouse 

The 1979 amendments: 

1. Modify provision for the Commission to act 

as a national clearinghouse "for the compilation of information and review of procedures 

with respect to the administration of Federal 

elections." Section 438(a)(10). 

2. Add provision which requires the Commission, in cooperation with the National Bureau 

of Standards, to conduct a preliminary study 

on the future development of voluntary 

engineering and procedural performance 

standards for voting systems used in the 

United States. The Commission must report 

the resu Its of the study to Congress and 

include recommendations for the implementation of a program of such standards. 
Chapter 37 4

Legislative 

Recommendations 

' 

The Commission is required to include in its annual report "any legislative or other actions the 

Commission considers appropriate." (2 U.S.C. 

§438(a)(9), formerly 2 U.S.C. §437e.) On January 8, 1980, the Federal Election Campaign Act 

Amendments of 1979 were enacted (Public Law 

96-187). The 1979 Amendments incorporate 

many of the improvements in the Act the Commission has recommended over the past three 

years. The Commission applauds the Congress' 

efforts in election campaign law reform and is 

confident that the 1979 Amendments will result 

in a significant decrease in reporting burdens on 

candidates and committees. We hope the Amendments will also encourage more vigorous volunteer activity at the grass roots level. 

It is too early to determine whether improvements will be needed to the changes made in the 

1979 Amendments. There are, however, several 

areas not addressed by the 1979 Amendments in 

which the Commission made recommendations 

in the past. The Commission reiterates its support for these changes and includes them in the 

following list of legislative recommendations. 

Reporting 

General Waiver Authority 

In the past, there have been instances when the 

Commission may have wished to suspend the 

reporting requirements of the law in cases where 

reports or requirements were excessive or unnecessary. To further reduce needlessly burdensome disclosure requirements, the Commission 

should have authority to grant general waivers or 

exemptions from the extensive reporting, 

recordkeeping and organizational requirements 

of the Act. Each proposal for a general waiver 

would, of course, be submitted to Congress in 

the form of a regulation subject to legislative 

review. 

Point of Entry 

The Commission recommends that it be the sole 

point of entry for all disclosure documents filed 

by Federal committees. A single point of entry 

would eliminate any confusion about where candidates and committees are to file their reports. 

It would assist committee treasurers by having 

one office with which to file, correspond and 

ask questions. At present, conflicts may arise 

when more than one office sends out materials, 

makes requests for additional information and 

answers questions relating to the interpretation 

of the law. A single point of entry should also 

reduce the cost to the Federal government of 

maintaining three different offices, especially in 

the area of personnel, equipment and data processing. 

The Commission has authority to prepare and 

publish lists of nonfilers. It is extremely difficult 

to ascertain who has and who has not filed when 

reports may have been filed at or are in transit 

between two different offices. Separate points 

of entry also make it difficult for the Commission to track responses to compliance notices. 

Many responses and/or amendments may not be 

received by the Commission in a timely manner, 

even though they were sent on time by the candidate or committee. The delay in transmittal 

between two offices sometimes leads the Commission to believe that candidates and committees are not in compliance. A single point of 

entry would eliminate this confusion. The Commission notes that the report of the Institute of 

Politics of the John F. Kennedy School of Government at Harvard University, An Analysis of 

the Impact of the Federal Election Campaign 

Act, 1972-78, prepared for the House Administration Committee, recommends that all reports 

be filed directly with the Commission (Committee Print, 96th Cong., 1st Sess., at 122 (1979)). 

State Filing Officers 

The 1979 Amendments significantly ease the 

burden on Secretaries of State and equivalent 

State filing officers by reducing retention requirements. Another concern expressed by State 

officers not addressed in the 1979 Amendments 

is the absence of reimbursement by the Federal 

government for costs incurred in receiving, indexing and maintaining Federal disclosure reports. Such Federal payments could be made on 
38 

an electoral vote basis, or some other equitable 

formula, that would require minimal administrative overhead. 

Contribution and Expenditure 

Limitations 

Election Period Limitations 

The contribution limitations are structured on a 

"per-election" basis, thus necessitating dual 

bookkeeping or the adoption of some other 

method to distinguish between primary and general election contributions. The Act could be 

simplified by changing the contribution limitations from a "per-election" basis to an "annual" 

or "election-cycle" basis. If an annual limitation 

is chosen, contributions made to a candidate in a 

year other than the calendar year in which the 

election is held should be considered to have 

been made during the election year. Thus, multicandidate committees could give up to $10,000 

and all other persons could give up to $2,000 to 

an authorized committee at any point during the 

election cycle. 

Contributions to National 

Party Committees 

An individual may give $20,000 to the committees established and maintained by a national 

political party, but a multicandidate committee 

may give only $15,000. This appears to be different from the treatment accorded contributio~s to a.ca~~idate's authorized committees by 

wh1ch an md1v1dual may contribute only $1,000 

per election while a multicandidate committee 

may give $5,000 per election. 

Contributions by Minors 

The Act does not stipulate at what age a minor 

child may make contributions. Presently, the 

Commission is forced to rely on subjective criteria such as whether "the decision to contribute 

is made knowingly or voluntarily by the minor 

child." Congress should establish an age below 

which contributions by children would be considered to have been made by the parent and 

subject to the parent's $1,000 contribution limitation. 

Multicandidate Committee 

Qualification Requirements 

In order to attain qualified mu lticandidate committ~e status to be eligible to give $5,000 per 

election to Federal candidates, political committees could be required to make contributions of 

$100 or some other specified sum to five Federal candidates. Under the present Act, a political 

committee need give as little as $1 to four candid.ates in order to be eligible to give $5,000 to the 

fifth candidate, provided all other criteria are 

met. 

Contributions to Draft Committees 

Consideration should be given to the application 

of contribution limitations to draft movements. 

Since the $1,000 limitation on contributions by 

persons other than multicandidate committees 

applies only to candidates, a person may give up 

to $5,000 per year - the limit applicable to 

"other political committees" - to a draft committee. Precisely this situation was presented in 

Advisory Opinion 1979-40. Congress may wish 

to amend the statute to make the $1 000 limitation, rather than the $5,000 limitati~n, applicable to contributions to political committees 

whose purpose is to influence a clearly identified 

individual or individuals to become a candidate. 

Although the limitation on contributions by 

multicandidate committees to candidates or to 

draft committees is $5,000, multicandidate committees, as well as other persons, may make two 

contributions toward the nomination of an individual - one contribution to a draft movement 

and, if the individual later becomes a candidate 

another contribution to the candidate's author: 

ized committee. Accordingly, Congress may 

wish to consider amending the Act to provide 

that a person who has contributed to a draft 

committee with the knowledge that his or her 

~ontr.i~uti~n ~i.ll be expended to draft a clearly 

1dent1f1ed md1v1dual will, for the purposes of the 

contribution limitations, be considered to have 

made a contribution to a "candidate." If that 

individual should become a candidate the contributors to the draft movement wo~ld be eligible to give to the candidate's authorized com-
39 

mittees only to the extent their earlier aggregate 

contributions did not exceed the "candidate" 

limits. 

Voluntary Services 

The Act places no limit on the services that a 

professional may donate to a candidate. For 

example: a professional entertainer may participate in a concert for the benefit of a candidate 

without the proceeds of that concert counting 

toward the entertainer's contribution limitations. Congress may wish to circumscribe the use 

of volunteer professional services when they are 

donated solely for fundraising rather than for 

actual campaigning. 

Corporate and Labor Organization 

Political Activity 

Registration and Get-Out-The-Vote 

Congress may wish to delineate by statute the 

extent to which the Act allows corporations and 

labor organizations to conduct nonpartisan registration and get-out-the-vote campaigns to assist 

the general public without the sponsorship of a 

nonpartisan organization, so long as they merely 

urge people to register and to vote. The current 

language of 2 U.S.C. § 441 b(b)(2)(C) has been 

construed as permitting corporations and labor 

organizations to participate in such activities 

only if they are cosponsored with and conducted by an organization which does not support or endorse candidates or political parties. 

The present restrictive statutory language therefore deters corporations and labor organizations 

from unilaterally engaging in nonpartisan public 

service activity relating to citizen participation 

in the election process. 

Trade Association 

Solicitation Approval. 

Trade association political action committees 

must obtain the separate and specific approval 

of each member corporation to solicit their executive and administrative personnel. Some 

trade associations have thousands of members, 

and it is a considerable administrative burden to 

obtain approval to solicit every year. The oneyear limitation should be removed, and the trade 

association should be allowed to solicit until the 

corporation revokes its approval. 

Presidential Elections 

Delegate Selection 

Amendments are needed to delineate the status 

of delegates and delegate-candidates to Presidential nominating conventions and the applicability of the disclosure provisions and contribution 

and expenditure limitations to their activities. 

The Commission is attempting to deal with the 

application of the contribution and expenditure 

limits and reporting requirements of the Act to 

delegate selection through regulations. This task 

is complicated, however, because the statute 

gives no explicit guidance as to the status of delegates. Congress should define the extent to 

which financial activity in connection with delegate selection is subject to the Act. 

Compliance Funds 

The Act specifically excludes from the definition of "contribution" the payment of legal and 

accounting services by a regular employer to insure compliance with the Federal Election Campaign Act and Chapters 95 and 96 of the Internal Revenue Code. The Commission's regulations specifically permit a Presidential campaign 

to set up a separate account containing private 

monies to be used for compliance purposes. A 

major party Presidential candidate may not 

otherwise receive private contributions. In order 

to insure the integrity of the Presidential general 

election public financing provisions and to eliminate the need for any private contributions in 

the general election, the Presidential Election 

Campaign Fund Act should be amended to provide a block grant of a specified amount for legal 

and accounting services for each candidate and 

committee receiving public funds. Similar grants, 

perhaps on a pro rata basis, should be considered 

for candidates who receive matching funds in 

the primary election. 
40 

Presidential Election 

Campaign Fund 

Under current provisions, the Secretary of the 

Treasury is required to place first priority on 

funds for convention financing; second priority 

on funds for general election financing; and 

third priority on the matching payment account 

fund. Since the primaries occur before the general election, the Secretary may not have a clear 

idea of the amount to reserve for the general 

election. The Secretary may determine that a 

substantial portion of the entire fund needs to 

be reserved for a number of possible qualified 

nominees in the general election, thus denying 

Presidential primary candidates their full entitlements. On the other hand, the Secretary may 

make a determination which would not reserve 

sufficient monies for the general election fund 

to pay new party candidates who qualify in the 

general election. Since the amount in the fund is 

a fixed amount in that it is limited by the number of dollars received as a resu It of the tax 

checkoff provision, the Secretary may be faced 

with a situation where he or she must risk depleting the general election fund to assure full 

entitlement for Presidential primary candidates. 

Under some circumstances, the present system 

could be unworkable. It should therefore be 

modified either to guarantee full entitlement to 

all qualified candidates or to eliminate discretion 

by the Secretary and the Commission in determining how to distribute partial entitlements. 

Repayments to the Fund 

Repayments under the Presidential Primary 

Matching Payment Account Act (Chapter 96, 26 

U.S.C.) are made to the Presidential Election 

Campaign Fund, while repayments under the 

Presidential Election Campaign Fund Act (Chapter 95, 26 U.S.C.) are made to the general fund 

of the Treasury. All repayments should be made 

to the Presidential Election Campaign Fund so 

that dollars checked off by taxpayers for the 

Fund do not indirectly end up in the general 

fund. 

Use of Contributions Matched 

by Federal Funds 

26 U.S.C. §9038(b)(2)(B) requires the repayment of any matching funds used for any purpose other than " ... to restore funds ... which 

were used, to defray qualified campaign expenses." This provision requires the repayment 

of an amount equal to any expenditure from 

matching funds or private contributions made 

for nonqualified campaign expenses. (See 11 

CFR 9038.2(a)(2).) The Congress may wish to 

more clearly state in section 9038(b)(2)(B) that 

a candidate who accepts public funding may not 

make expenditures from public funds or private 

contributions for other than qualified campaign 

expenses. 

Qualified Campaign Expense 

Chapters 95 and 96 of Title 26 of the Internal 

Revenue Code contain different definitions of 

"qualified campaign expense." Chapter 95 defines a "qualified campaign expense" to mean an 

expense incurred to further the election of a 

Presidential candidate. Chapter 96 defines "qualified campaign expense" to mean an expense incurred in connection with a campaign for nomination to the office of President. The Commission recommends that the broader definition 

contained in Chapter 96 be incorporated into 

Chapter 95. 

Fundraising Exemption 

Congress may wish to consider the resu Its of the 

application of the 20 percent fundraising exemption as it is presently drafted. The Act clearly 

makes the 20 percent fundraising exemption 

applicable to the entire $10 million limit for 

Presidential primary candidates, although the 

legislative history indicates a Congressional intent to apply the exemption only to the $5 million privately raised. Further, the 20 percent 

fundraising exemption applies to Presidential 

nominees who accept partial public funding for 

the general election. The application of the 

fundraising exemption in this situation has the 

effect of increasing the nominee's spending ceiling and placing nominees who have elected to 

accept full funding at a lower spending limit. 
41 

The 20 percent fundraising exemption should 

be eliminated and the expenditure limitation 

raised accordingly. 

Commission Duties, Powers 

and Authority 

Number of Legislative Days 

for Regulation Review 

Congress should reduce the current 30 legislative 

days for the review of regulations to 15 legislative days. 

Judicial Review 

The Act contains different judicial review provisions, which Congress should consider conforming to each other. As noted by the Court of 

Appeals for the District of Columbia, no apparent reason exists for the different review provisions in Chapters 95 and 96 of Title 26. This 

anomaly creates difficulties for the courts because cases brought under one chapter often 

also involve questions relating to the other chapter. Congress should consider making the provisions of 26 U.S.C. § 9011, including the provisions for expedited review of §9011(b), 

apply to Chapter 96. This could be done by 

changing § § 9040 and 9041 so they become 

identical to § §9010 and 9011. 

Additionally, the Congress should address what 

the Supreme Court called "the jurisdictional 

ambiguities" resulting from Title 2 having a 

totally different expedited review provision (2 

U.S.C. §437h) for questions of constitutionality 

than for questions of statutory construction. 

The legislative history of §437h indicates it was 

intended to provide a vehicle for the challenge 

to the 1974 Amendments heard by the Court in 

Buckley v. Valeo. It has since outlived its purpose and should be repealed. By giving precedence to constitutional questions it is inconsistent with the traditional practice of the courts 

in not addressing constitutional questions when 

a case may be resolved on statutory grounds. 

Legal challenges to the Act, whether constitutional or statutory, could still be considered by 

the courts without §437h through the ordinary 

provisions for judicial review in Title 28, United 

States Code. 

Technical Amendments 

26 u.s.c. §527(f)(3) 

The cross-reference in 26 U.S.C. §527(f)(3) 

should be changed from "section 610 of Title 

18" to "section 441 b of Title 2." 

26 u.s.c. §9011(b)(1) 

The term "contrue" in 26 U.S.C. §9011(b)(1) 

should be "construe." 
Chapter 43 5 

The Commission 

The Commissioners and Statutory Officers 1 

During 1979, two new Commissioners were 

appointed to the Commission for six-year 

terms. 2 Max L. F riedersclorf was sworn in as 

Commissioner on March 1 and Frank P. Reiche 

on July 31. Commissioner Thomas E. Harris was 

reappointed by the President and reconfirmed 

by the Senate for his second term on the Commission on June 19. 

On May 17, the Commissioners unanimously 

elected Vice Chairman Robert 0. Tiernan to 

a one-year term as FEC Chairman and Commissioner Max L. Friedersdorf as Vice Chairman. 

On December 6, the Commissioners appointed 

Charles N. Steele as FEC General Counsel. 

Management Plan 

The Commission's appropriation for FY 1980 

was $8.646 million, representing a 4.3 percent 

increase over the 1979 appropriation.3 Based on 

this budget appropriation, the Commission's 

Management Plan4 for FY 1980 called for some 

major program realignments and resource reallocations, while maintaining existing levels 

of staffing for each division and office. Under 

the plan, for example, the Reports Analysis 

Division continued to code and enter into the 

Commission's computer 100 percent of relevant data from all campaign finance reports, 

but no longer reviewed every report it received. 

To support this shift in program priorities, the 

division reassigned a portion of its review staff 

to dCita coding and entry. In addition, because of 

the Commission's increased emphasis on Presidential campaigns, several analysts were reassigned to a new team established to review Presidential campaign finance reports and to provide 

candidates and their committees with assistance. 

The Management Plan channeled the Office of 

General Counsel's enforcement resources into 

defensive litigation (i.e., suits brought against 

the Commission) and the resolution of formal 

complaints originating outside the Commission. 

Internal referrals of compliance matters involving the public financing provisions of the law 

continued to receive priority over other internal 

referrals. The Commission sought to reduce 

offensive litigation (i.e., suits initiated by the 

Commission) by continuing to place emphasis 

on conciliation of cases where possible. 

The Audit Division's programs were realigned to 

devote the bulk of the division's resources to the 

1980 Presidential public financing program. The 

Management Plan reduced the discretionary 

audit program to two referral audits, 10 nonparty committee audits and the resolution of 

audits begun in FY 1979. These reductions 

would permit the division to make a full-scale 

effort to expedite audits of publicly funded 

Presidential candidates. 

Internal Review 

As part of a systematic internal review program 

initiated during 1979, the Office of Planning 

and Management undertook a review of the 

Public Disclosure Division, the first of several 

division-wide evaluations. The Office of Planning 

and Management tried to determine whether 

program objectives were being achieved in the 

most cost effective way. It confined its review to 

the division's programs, with some consultation 

with other offices where operations overlapped. 

The review of the Public Disclosure Division 

focused on two major programs: the Public 

Records Office (which provides reports and 

other documents to the public) and the Microfilm Processing Branch (which microfilms 

1Biographical sketches of the Commissioners and statutory officers appear in Appendix 1. 

2six Commissioners are appointed by the President to serve staggered, six-year terms. No more than three members of the Commission may be affiliated with the same political party. 

3expenditures from the FEC's FY 1979 budget appropriation 

and proposed expenditures from the FY 1980 budget appropriation are detailed in Appendix 5. An accompanying graph 

compares budget allocations for FY 1980 and FY 1981. 

4The Management Plan is prepared by the Commission's Office 

of Planning and Management in cooperation with the managers 

of each division or office. It encompasses all FEC programs for 

the fiscal year. 
44 

reports and other documents). To evaluate 

the Public Records Office's services, the Office 

of Planning and Management conducted a survey 

of 1,735 persons who had used the office's 

services. Findings of the survey, which had a 

31.4 percent response rate, indicated that 92 . 

percent of survey respondents used the FEC as 

their primary source of campaign finance information. A majority of respondents (92 percent) 

said that the helpfulness and attitude of the staff 

were good to excellent, 86 percent of those who 

responded believed that the hours of operation 

were sufficient during the nonelection year, and 

97 percent of the respondents believed that the 

extended operating hours during the peak election period were good to excellent. The survey 

also revealed that a majority of respondents (52 

percent) preferred using paper copy files to 

other information tools, such as microfilm 

reader printers. 

In general, the Office of Planning and Management concluded that the Public Disclosure 

Division was achieving its objectives in an 

efficient and effective manner, but made some 

recommendations for improvement. For example, the office recommended that the division 

reduce paper document storage by microfilming 

audit reports and increase indexing and cross 

referencing of certain Commission documents. 

Complete findings of the review, as well as 

recommendations for program changes, are 

contained in the final report presented to the 

Commission by the Staff Director. 5 

labor/Management Relations 

·In June 1979, the Commission and the National 

Treasury Employees Union (NTEU) successfully 

negotiated the Commission's first collective 

bargaining agreement. The contract was one of 

the first in the Federal sector to be negotiated 

under the Civil Service Reform Act of 1978. 

During negotiations, labor and management 

representatives of the Commission reached 

agreement on a broad range of issues covering 

personnel procedures and labor/management 

relations. The contract details the rights of 

employees as well as the retained rights of 

management. 

Although the contract covers only members 

of the officially recognized bargaining unit, 

personnel policies and procedures contained 

in the agreement will have a significant, longterm impact on all FEC employees. Many of 

these new policies and procedures were designed 

to improve employee morale and performance. 

As a result of the contract, for example, the 

Commission adopted: 

- A flexible working hours system; 

- New merit selection procedures; 

- Revised grievance procedures, with employee 

access to binding arbitration; and 

- Explicit policy statements on leave earning 

and usage. 

Provisions of the new Civil Service Reform Act 

also required both negotiating parties to adopt 

a new system for evaluating employee performance, as well as written performance standards 

for each position. 

To help the Commission draft and implement 

the new contract, the Commission hired a 

Special Assistant to the Staff Director for Labor 

and Management Relations and allocated additional resources to collective bargaining negotiation sessions. Four management staff members 

comprised Management's team; an equal number 

of employees represented the Union. Between 

January and June, the negotiating teams met 

in more than 20 sessions, averaging five hours 

each, to draft the contract. They spent additional time preparing for the sessions and 

apprising the Commissioners of their progress. 

Following the successful negotiation of the contract, the Commission conducted a series of 

management training sessions to prepare supervisors for their new responsibilities under the 

5eopies of the complete report, Commission Memorandum No. 

671, are available from the FEC's Public Records Office. 
45 

contract. Additional training sessions were held 

to assist managers in the ongoing preparation of 

the new performance evaluation system. 

Implementing the new contract during 1979 

placed substantial demands on FEC staff time 

and required an unanticipated allocation of 

resources. In 1979, approximately $42,400 in 

direct personnel costs were devoted to this 

program, including time spent in negotiations, 

management training, contract implementation 

and contract administration. 
Appendix 1 47 

Biographical Data on 

Commissioners and 

Statutory Officers 

Commissioners 

Robert 0. Tiernan, Chairman 

April 30, 1981 * 

Robert Tiernan, currently Chairman, served as a 

Democratic Member of Congress from Rhode 

Island for eight years, and prior to that as a 

State legislator for seven years. An attorney, he 

was born in Providence, Rhode Island, and 

graduated from Providence College and Catholic 

University Law School. Mr. Tiernan has been 

admitted to practice in all Federal courts, the 

State of Rhode Island, and the District of 

Columbia. He has held various national and 

State party positions. Originally appointed for 

two years, he received a five-year term upon 

reconstitution of the Commission. 

Max L. Friedersdorf, Vice Chairman 

April 30, 1983 

Max L. Friedersdorf, Vice Chairman of the Commission, served as Staff Director of the Senate 

Republican Policy Committee from January 

1977 until his appointment to the Commission 

in February 1979. A native of Indiana, Mr. 

Friedersdorf received his B.A. from Franklin 

College in 1952 and earned an M.A. from American University in 1970. He pursued a journalism 

career in Indiana before serving as administrative 

assistant and press secretary for former Congressman Richard L. Roudebush (R-Ind.) from 

1961 to 1970. In 1970, he was Director of 

Congressional Relations for the Office of Economic Opportunity. From 1971 to 1977, Mr. 

Friedersdorf served in several White House posts. 

He was Deputy Assistant for Congressional 

Affairs to President Nixon from 1971 to 1974. 

He continued as Deputy Assistant to President 

Ford until 1975, when he became the President's Assistant for Legislative Affairs. 

Joan D. Aikens 

April 30, 1981 

Mrs. Aikens served as Commission Chairman 

between May 1978 and May 1979. She was 

formerly Vice President of Lew Hodges/Communications, a public relations firm located in 

Valley Forge, Pennsylvania. From 1972 until 

1974, she was president of the Pennsylvania 

Council of Republican Women and served on 

the Board of Directors of the National Federation of Republican Women. A native of Delaware County, Pennsylvania, Mrs. Aikens has 

been active in a variety of volunteer organizations. She received her B.A. from Ursinus 

College, Collegeville, Pennsylvania. Her original 

appointment to the Federal Election Commission in 1975 was for a one-year term. She was 

reappointed for five years when the FEC was 

reconstituted. 

Thomas E. Harris 

April30, 1985 

Mr. Harris was Commission Chairman between 

May 1977 and May 1978. Before serving on the 

Commission, he was associate general counsel to 

the AFL-CIO in Washington, D.C., from 1955 to 

1975. He had held the same position with the 

CIO from 1948 until it merged with the AF Lin 

1955. Prior to that, he was an attorney in private practice and with various government 

agencies. A native of Little Rock and a 1932 

graduate of the University of Arkansas, Mr. 

Harris is a 1935 graduate of Columbia University 

Law Shool, where he was on the Law Review 

and was a Kent Scholar. After graduation, he 

clerked one year for Supreme Court Justice 

Harlan F. Stone. He was originally appointed to 

the Commission for a four-year term and upon 

reconstitution received a three-year appointment. In 1979, President Carter reappointed him 

and, on June 19, 1979, the U.S. Senate reconfirmed Mr. Harris for a six-year term. 

John W. McGarry 

April 30, 1983 

Mr. McGarry served as special counsel on elections to the Committee on House Administration from 1973 until his appointment to the 

Commission in February 1979. A native of 

Massachusetts, Mr. McGarry served in the Navy 

during World War II. After the war, he graduated 

from Holy Cross College and earned a law degree 

*Term expiration date. at Georgetown Law Center. From 1959 to 1962I 
48 

Commissioner McGarry was Assistant Attorney 

General for Massachusetts. In 1962, he was 

named chief counsel for the House Special Committee to Investigate Campaign Expenditures. 

Frank P. Reiche 

April 30, 1985 

Before his appointment to the Commission in 

July 1979, Mr. Reiche served as Chairman of the 

first New Jersey Election Law Enforcement 

Commission for five years. Prior to that, Mr. 

Reiche served in a variety of Republican party 

positions, including eight years as a Republican 

county committeeman. An attorney specializing 

in taxation, Mr. Reiche graduated from Columbia University Law School in 1959, and received 

a Master of Laws degree in taxation from New 

York University in 1966. Prior to that, he received his A.B. from Williams College in 1951 

and an M.A. in Foreign Affairs from George 

Washington University in 1959. Mr. Reiche was 

with the Princeton firm of Smith, Stratton, Wise 

and Heher from 1962 until his appointment to 

the Commission. 

Ex Officio Commissioners 

Edmund L. Henshaw, Jr. 

Edmund L. Henshaw, an Ex Officio Member of 

the Commission, was elected Clerk of the House 

of Representatives on December 17, 1975. Prior 

to that, he served as Executive Director of the 

Democratic National Congressional Committee 

from 1972 to 1975, and as Research Director of 

the Democratic National Congressional Committee from 1955 to 1972. He received a B.S. 

degree from the University of Maryland in 1954, 

and attended George Washington University Law 

School from 1955 to 1956. 

Douglas Patton, attorney, serves as Special 

Deputy to the Clerk of the House at the Commission. 

Joseph Stanley Kimmitt 

Stanley Kimmitt, an Ex Officio Member of the 

Commission, was elected Secretary of the Senate 

in April 1977. He previously served as Secretary 

of the Majority for the Senate (1966-77) and as 

Administrative Assistant to the Majority Leader 

of the Senate. A native of Great Falls, Montana, 

he holds a B.S. degree in political science from 

Utah State University. Mr. Kimmitt also attended the University of Montana and did graduate 

work at George Washington University. Mr. 

Kimmitt was inducted as a private in the U.S. 

Army in 1941 and retired as a colonel in 1966. 

Harriet Robnett, attorney, serves as Special 

Deputy to the Secretary of the Senate at the 

Commission. 

Statutory Officers 

Orlando B. Potter, Staff Director 

Before joining the Commission, Orlando Potter 

was consultant to the Secretary of the U.S. 

Senate in the administration of campaign disclosure laws. Prior to that, he was legislative 

assistant to U.S. Senator Claiborne Pell, and in 

1968 was a candidate for the U.S. House of 

Representatives from New York. Mr. Potter 

previously was a Washington correspondent and 

editorial writer for the Providence (R.I.) Journal 

Bulletin. A 1950 graduate of Hamilton College, 

Mr. Potter also holds a master's degree from 

Yale University. He received a Congressional 

Staff Fellowship from the American Political 

Science Association in 1970, and did graduate 

work in computer science at American University. 

Charles N. Steele, General Counsel 

Charles N. Steele began serving as General 

Counsel on December 6, 1979, after being 

Associate General Counsel for Enforcement and 

Litigation from April 1977 through October 

1979 and Acting General Counsel from November 1979 through December 5, 1979. Mr. Steele 

received an A.B. from Harvard College in 1960 

and an LL.B. from Harvard Law School in 1965. 

Prior to coming to the Commission in January 

1976, Mr. Steele was a staff attorney with the 

Appellate Court Branch of the National Labor 

Relations Board. 
The Commissioners 

Robert 0. Tiernan, Chairman 

Max L. Friedersdorf, Vice Chairman 

Joan D. Aikens, Commissioner 

Thomas E. Harris, Commissioner 

John W. McGarry, Commissioner 

Frank P. Reiche, Commissioner 

J. S. Kimmit, Ex Officio/Senate 

Edmund L. Henshaw, Jr., Ex Officio/House 

rl Office of PIann i ng j and Management Office of Office of - .___ General Counsel Staff Director LfL---~S~e~cr~e~ta~r~y----~ 

Administration 

Regulations 

and Legislation 

Audit 

Advisory 

Opinions Data Systems 

Development 

Information Enforcement Services 

Public 

Disclosure 

Litigation 

Reports 

Analysis 

I ____::...._~ 

Commission I 

Appendix 2 49 

FEC Organization Chart 
50 

January 

1 - National Clearinghouse on Election 

Administration announces availability 

of three major reports: Statewide 

Registration Systems, Ballot Access 

and Contested Elections and Recounts. 

2 - U.S. District Court for the District of 

Columbia approves a consent decree 

in a suit filed by the Socialist Workers 

Party (SWP) against the FEC and 

Common Cause (which had intervened 

as co-defendant). 

24 - Commission releases summary 1977-

78 information on nonparty political 

committees, updating the data contained in Reports on Financial Activity, Interim Report Number 2 

(September 1978). 

25 - Commission approves the addition of 

two minoritv language representatives, 

Mr. AI Perez and Mr. Henry Der, to 

the fu II Advisory Panel of the National Clearinghouse on Election Administration. 

29-31 - National Clearinghouse on Election 

Administration SPOnsors an Advisory 

Panel Meeting to discuss regional 

workshops and projects dealing with 

State and local election administration. 

30 - Commission releases summary information for 1977-78 Congressional 

candidates, updating data contained in 

Reports on Financial Activity, Interim 

Report Number 3 (September 1978). 

31 - 1979 year-end report due. 

February 

15 - Commissioners present budget testimony to the House Appropriations 

Subcommittee on Treasury, Postal 

Services and General Government. 

16 - Commission submits to Congress proposed revisions to the regulations 

governing the Presidential Primary 

Matching Payments Account. 

21 - U.S. Senate confirms the nomination 

of two new Commissioners: Democrat 

John W. McGarry and Republican 

Max L. Friedersdorf. 

March 

1 - U.S. District Court for the District of 

Columbia grants summary judgment 

to Citizens for the Republic (CF R), 

defendants in a suit filed by the FEC. 

- Max L. Friedersdorf sworn in as FEC 

Commissioner. 

8 - Commission submits report on 1978 

activities under the Freedom of Information Act (FOIA) to Congress and 

the President. 

15 - FEC Chairman Joan Aikens testifies 

before the House Administration 

Committee on H.R. 1, a proposed bill 

providing public financing for general 

election campaigns for the House of 

Representatives. 

22 - Commission approves new contract 

for computer services. 

31 - Commission transmits to Congress and 

the President its Annual Report for 

1978. 

April 

1 - National Clearinghouse on Election 

Administration announces availability 

of Election Case Law '78 and Election 

Law Updates '78. 

10 - Quarterly report due. 

15 - Office account report due. 

26 - F EC's Public Records Office begins to 

make available personal financial disclosure reports required of all Presidential and Vice Presidential candidates under the Ethics in Government 

Act of 1978. 

- Commission modifies procedures for 

reviewing audit reports. 
Appendix 51 3 

Chronology of Events, 

1979 

May 

2 - Commission representative testifies 

before the Senate Rules Committee 

on S. 994, a bill to reimburse State 

election offices for expenses incurred 

in fulfilling the Federal Election Campaign Act's State disclosure requirements. 

3 - Commission approves new data entry 

procedures for the 1980 Presidential 

elections. 

- Commission prescribes Guideline for 

Presentation in Good Order, a format 

for submitting matching fund requests. 

7 - Commission formally prescribes new 

regulations governing the administration of the Presidential Primary 

Matching Payments Account. 

- The Commission and the Service Station Dealers PAC agree to a consent 

judgment issued by the U.S. District 

Court for the Eastern District of 

Pennsylvania. 

1 0 - Commission releases Reports on 

Financial Activity, Interim Report 

Number 4, on 1977-78 activity of 

party and nonparty political committees. 

14 - U.S. District Court for the District of 

Columbia dismisses a suit which the 

FEC had filed against the American 

Federation of State, County and 

Municipal Employees (AFSCME). 

17 - Commission unanimously elects Vice 

Chairman Robert 0. Tiernan as its 

new Chairman and Commissioner 

Max L. Friedersdorf as its new- Vice 

Chairman. 

- Commission adopts new procedures 

for the release of the remaining audits 

of 1976 Presidential candidates in the 

primary and general elections. 

June 

1 - Commission begins publishing summaries of selected compliance cases 

(MUR's), which have been closed and 

put on the public record, in the FEC 

Record. 

7 - Commission authorizes a review of 

FEC audit procedures and practices 

by Arthur Andersen and Company in 

conjunction with Accountants for 

the Public Interest (API). 

8 - U.S. District Court for the Southern 

District of New York issues a consent judgment in a suit which the FEC 

had filed against Milton Weinsten and 

the Winfield Manufacturing Company 

on March 2, 1978. 

12 - Commission publicizes in the Federal 

Register the availability of a comprehensive Index of Multicandidate Political Committees. 

14 - Commission engages accounting firm 

of Ernst & Whinney to refine aggregation sampling techniques for verifying 

matching fund requests. 

15 - U.S. District Court for the District of 

Columbia grants summary judgment 

to the FEC in a suit which Henry 

Walther filed against the F EC on 

November 21, 1978. 

19 - Senate reconfirms six-year term for 

Commissioner Thomas E. Harris. 

25 - Commissioner Harris sworn in for 

second term as Commissioner. 

28 - Commission transmits to Congress 

proposed regulations governing the 

funding, sponsorship and structure 

of Federal candidate debates. (See 

September 17.) 

- Commission adopts procedures for 

certification of public funds for 

national party committee nominating conventions. 

- Commission certifies to the U.S. 

Treasury an initial payment of 

$750,000 for the Republican National 

Committee's national nominating convention. 
52 

July 

9 - Collective bargaining agreement 

between FEC and National Treasury 

Employees Union (NTEU) becomes 

effective. 

1 0 - Quarterly report due. 

13 - Chairman Robert 0. Tiernan, accompanied by Vice Chairman Max L. 

Friedersdorf, testifies before the 

Senate Rules Committee on revisions 

to the Federal Election Campaign Act 

of 1971, as amended. 

22-24 - National Clearinghouse on Election 

Administration holds Regional Seminar on Election Administration in 

Madison, Wisconsin. 

23 - Commission holds Campaign Finance 

Seminar in Madison, Wisconsin. 

25 - Senate confirms nomination of Frank 

P. Reiche as FEC Commissioner. 

31 - Supreme Court Justice William R. 

Rehnquist swears Frank Reiche in as 

FEC Commissioner. 

August 

1 - National Clearinghouse on Election 

Administration announces availability 

of an updated Election Directory '19. 

16 - Commission certifies to the U.S. 

Treasury an initial payment of 

$300,000 for the Democratic National 

Committee's national nominating convention. 

19-21 - National Clearinghouse on Election 

Administration holds Regional Seminar on Election Administration in 

Sacramento, California. 

20 - Commission holds Campaign Finance 

Seminar in Sacramento, California. 

23 - U.S. Court of Appeals for the District 

of Columbia upholds the Commission's action in denying primary 

matching fund payments to Lyndon 

LaRouche, a candidate of the U.S. 

Labor Party, during the 1976 Presidential primary campaign. 

September 

1 - Commission announces availability of 

the Financial Control and Compliance 

Manual for Presidential Candidates 

Receiving Public Financing (Primary 

Election Financing). 

6 - Commission approves procedures for 

public disclosure of information from 

contributions submitted by Presidential candidates who seek public matching funds for the 1980 elections. 

17 - U.S. Senate disapproves FEC's proposed regulations on candidate debates. (See June 28.) 

October 

10 - Quarterly report due. 

15 - Office account report due. 

16 - Commission and the Eastside Democratic Committee agree to a consent 

judgment issued by the U.S. District 

Court for the District of Maryland. 

18 - Commission approves PPS (Probability Proportional to Size) statistical 

sampling technique for processing, 

verifying and certifying matching 

fund requests. 

23-24 - Commission holds hearings on the 

Federal funding of candidate debates. 

25 - Commission approves new Presidential audit procedures. 

26 - Commission submits to Congress proposed revisions to the Convention 

Financing Regulations. 

November 

1 - Commission determines Senator 

Howard Baker (R-Tenn.) is eligible to 

receive primary matching fund payments. 

20 - Commission determines President 

Jimmy Carter is eligible to receive 

primary matching fund payments. 
53 

27 - Commission holds repayment hearings 

for the Udall '76 Committee (the 

Committee), to provide the Committee with a final opportunity to contest 

the Commission's determination that 

the Committee make a partial repayment of public funds to the U.S. 

Treasury. 

December 

2-4 - National Clearinghouse on Election 

Administration holds Regional Seminar on Election Administration in 

Philadelphia, Pennsylvania. 

3 - Commission holds Campaign Finance 

Seminar in Philadelphia, Pennsylvania. 

6 -- Charles N. Steele appointed FEC 

General Counsel. 

9-11 - National Clearinghouse on Election 

Administration holds Regional Seminar on Election Administration in 

Austin, Texas. 

1 0 - Commission holds Campaign Finance 

Seminar in Austin, Texas. 

13 - Commission adopts new fee schedule 

for information available in the Public 

Records Office. 

18 - Commission determines Lyndon LaRouche is eligible for primary matching fund payments. 

19 - Commission certifies primary matching funds to Presidential primary candidates Senator Howard H. Baker, Jr. 

and President Jimmy Carter. 

20 - Congress adopts amendments to the 

Federal Election Campaign Act of 

1971 (H.R. 5010). 

- Commission approves new discretionary audit procedures. 

21 - Commission transmits regulations 

governing Federal candidate debates 

to Congress. 

28 - Commission prescribes regulations 

governing Presidential nominating 

conventions. 

- Commission certifies primary matching payments to Lyndon LaRouche. 
Appendix 55 4 

Statistics on 

Division Operations 

Summary of Disclosure Files 

Presidential 1,137 $64,399,814 $60,205,849 

Candidates 209 42 106 61 

Committees 179 24 0 155 

Senate 1,710 32,594,384 22,944,344 

Candidates 422 253 128 41 

Committees and 504 117 0 387 

Office Accounts 

House 6,320 30,166,477 23,794,064 

Candidates 1,739 1,306 336 97 

Committees and 1,951 474 0 1,477 

Office Accounts 

Party 544 66 0 478 1,770 121,594,114 109,594,852 

National Level Committees 47 3 0 44 

State Level Committees 147 6 0 141 

Local Level Committees 340 56 0 284 

Convention Committees 5 0 0 5 

Delegates 5 1 0 4 

Nonparty 2,085 85 0 2,000 12,497 55,402,198 34,934,082 

Labor Committees 257 17 0 240 

Corporate Committees 969 20 0 949 

Membership, Trade & 859 48 0 811 

Other Committees 

Communication Cost Filers 84 0 0 84 7 0 2,771 

Independent Expenditures 160 44 0 116 494 985,646 967,662 

by Persons Other Than 

Political Committees 
56 

Reports Analysis Division 

Documents processed (Pass I),* 36,581 

filed and controlled 

Documents processed for 18,975 

itemized information (Pass II and II I) 

Items entered (individual 178,604 

transactions) 

Reports reviewed 21,507 

Requests for Additional Informa­ 4,506 

tion (including surface violations)** 

Publication of names of candidates 1,496 

and committees failing to file reports 

Compliance matters referred to 229 

the Office of General Counsel 

or Audit Division 

Assistance to Secretaries of State 798 

(State Election Offices) 

Notices of failure to file with State 386 

election offices 

Public Records Office 

Campaign finance reports made 2,409,000 

available to the public 

(total pages) 

Visitors served 10,087 

Responses to telephone and letter 4,344 

requests for campaign finance reports 

Responses to other telephone 18,254 

requests for information 

Statements and reports copied 352,390 

for requesters (total no. of pages) 

Public Communications Office 

Responses to Information Requests by Federal 

Candidates, Committees and the General Public: 

Telephone inquiries 34,000 

General information letters 250 

Requests for FEC materials 10,000 

Requests from visitors to 304 

the Commission 

Outreach Programs Sponsored by 

the Commission: 

FEC seminars 4 

Informational mailings 11 

Public appearances by Commissioners 15 

and FEC staff 

*Computer entry of campaign finance information occurs in 

two phases. In the first phase (PASS ll, summary information, 

including microfilm location, gross receipts and gross expenditures, is entered into the computer within 48 hours of its 

receipt. During the second phase (PASS II and Ill), itemized 

information is entered. 

**If an error or omitted information is discovered on a report, 

the Commission sends the filer a Request for Additional 

Information (RFAI). Similarly, if a preliminary review of a 

report indicates on its face an "apparent violation," a Surface 

Violation Letter is sent to the filer. 
57 

Status of Audits* 

Audits Field Internal Audits 

Required Work Field Review of Completed Audits 

by Audit in Work Audit in & Released to Be 

Type of Committee Audited Policy Progress Completed Progress to Public Scheduled 

Presidential Candidate 

Public Financing (1976) 19 0 19 0 19 0 

Presidential Candidate 

No Public Financing ( 1976) 17 0 17 10 7 0 

Congressional Candidate 

Random (1976) 106 0 106 0 106 0 

State Party 71 0 71 17 54 0 

Congressional Party 9 0 9 0 9 0 

National Party 20 19 12 7 0 

Non-Party, Non-Candidate 51 34 17 17 16 

Referral Audits** 9 0 9 6 3 0 

*Figures reflect status of all FEC audits as of December 31, 1979. 

**Referral Audits include candidates and committees, in categories not directly covered by the Audit Policy, which are referred to the 

Audit Division by the Reports Analysis Division or the Office of General Counsel. 
Appendix 59 5 

The FEC's Budget 

In Fiscal Year 1979, the Commission received an annual budget appropriation of $8,000,000 plus a 

supplemental appropriation of $293,000 to compensate for the October 1978 cost-of-living increase. 

These monies were expended during the fiscal year as follows: 

Commission and staff salaries, including benefits $5,518,025 

Consultants 50 

Travel 187,582 

Transportation & Motor Pool 10,507 

Commercial Space 9,401 

Equipment Rental 214,999 

Printing 187,647 

Contracts 1,207,394 

Administrative Expenses 111,748 

Supplies 111,180 

Library Materials 23,177 

Telephone, Telegraph 195,632 

Postage 39,050 

Space Rental 344,972 

Equipment Purchases 36,294 

GSA, Services, Other 88,535 

TOTAL $8,286,193 * 

For Fiscal Year 1980, the Commission received an annual appropriation of $8,646,000. Expenditure 

of these funds is budgeted as follows: 

Commission and staff salaries, including benefits $5,989,498 

Consultants 10,000 

Travel 209,832 

Transportation & Motor Pool 9,706 

Commercial Space 10,000 

Equipment Rental 155,200 

Printing 284,308 

Contracts 1,013,842 

Administrative Expenses 65,590 

Supplies 109,000 

Library Materials 38,500 

Telephone, Telegraph 168,900 

Postage 60,000 

Space Rental 371,624 

Equipment Purchases 50,000 

Training 30,000 

GSA, Services, Other 70,000 

TOTAL $8,646,000 

An appropriation of $11,530,160 has been requested for Fiscal Year 1981. 

*Unexpended funds were returned to the U.S. Treasury. 
60 

Budget Allocation 

The graph below compares the budget allocation of resources among FEC divisions for Fiscal Years 

1980 (approved) and 1981 (proposed). 

Percent of 

Total Budget 

25 

20 

15 

10 

5 

0 

Commissioners Staff 

Director 

Office of 

General 

Counsel 

Administration* Audit Clearinghouse Data Information 

Systems 

Development 

Public 

Disclosure 

Reports 

Analysis 

FY '80 

Approved 

*Administration budget includes rents, supplies, FY '81 reproduction services, etc., for the entire commission. Budgeted 
Appendix 6 

FEC Advisory Opinions: 

Summaries 

s1 

The following summaries of Advisory Opinions 

(AO's) include those issued between January 1, 

1979, and December 31, 1979.* Those seeking 

guidance for their own activity should consult 

the full text of an advisory opinion and not rely 

on the synopsis given here. Copies of the full 

text of AO's are available from the Office of 

Public Records at the Commission. (Telephone: 

202/523-4181 or toll free, 800/424-9530) 

AO 1978-83: Use of Authorization Form to 

Secure Corporate Approval of 

Solicitations by Trade Association 

The Construction Equipment Political Action 

Committee (CEPAC), a separate segregated fund 

of a trade association, may set up a booth at the 

annual convention of that trade association to 

attempt to secure corporate approval for CEPAC 

solicitations. Specifically, CEPAC may use the 

booth to obtain from representatives of the 

member corporations of the trade association 

their signatures on an authorization form giving 

approval for the solicitation of their stockholders and their executive and administrative 

personnel. 11 CF R 114.8. CEPAC's use of 

special authorization forms to obtain corporate 

approval to solicit authorized personnel is permissible as long as: 

-- The authorization form states its purpose and 

any limitations that CEPAC wishes to place 

on the class of persons to be solicited; and 

-- The authorization form indicates that corporate approval is required and that such solicitations must be limited to one trade association per year. 

A booth may be used to secure corporate approval for solicitations provided: 

-- The solicitation approval request is in writing; 

and 

-- The request form is signed by a person 

authorized to grant such approval. 

Once corporate approval has been granted, 

CEPAC may solicit and accept contributions 

from the personnel authorized to be solicited 

by the corporation. 

AO 1978-86: Conversion to 

Multicandidate Committee 

The Church for President Committee (the Committee), the principal campaign committee of 

Frank Church, in his bid for the Presidency, 

will become a qualified multicandidate committee as soon as it has made contributions to five 

or more candidates for Federal office. Upon 

satisfaction of that requirement, the Committee 

may contribute up to $5,000 per election to any 

candidate (and/or his/her authorized committees 

combined). 

The Commission based its conclusion on the fact 

that the Committee has already fulfilled the 

other two (of the three) prerequisites for qualification as a multicandidate committee under 2 

U.S.C. §441a(a)(4) since: 

1. It has been registered with the FEC for more 

than six months; and 

2. It has received contributions from more than 

50 persons. 

AO 1978-89: Use of Slate Card 

Exemption 

Two publications distributed respectively by 

two Republican town committees in New York 

(the Town Committees) are not permissible 

under the slate card exemption. 2 U.S.C. 

§ §431 (e)(S)(E) and 431 (f)(4)(G). Payments 

by the Town Committees for the publications 

(a pamphlet and a letter) would constitute in 

part, an in-kind contribution to the Withers'for 

Congress Comm!ttee (the Withers Committee). 

The Commission concluded that the two publications do not fall within the slate card exemption because: 

1. They contain biographical information on 

the various local, State and Federal candidates 

other than that allowed under the statute; 

*All citations in the summaries refer to the Federal Election 

Campaign Act (the Act) as amended in 1974 and 1976 and not 

to the Act as amended in 1979. 
62 

2. They outline the candidates' positions on 

specific issues; 

3. They include statements of party philosophy; 

4. The letter solicits contributions on behalf of 

the named Federal candidate, which is not 

permissible under the slate card exemption. 

Since Commission regulations preclude the 

Town Committees from making independent 

expenditures in connection with the campaign 

of a Federal candidate (11 CFR 110.7(b)(4)) 

and because the expenditures for the publica· 

tions do not appear to have been "coordinated 

party expenditures" made pursuant to 2 U.S.C. 

§ 441 a(d), an allocable portion of the payments 

for the publications would be considered an inkind contribution to the Withers Committee. 

AO 1978-91: Transfers from District 

Committees to State Party 

The Commission approved three methods 

proposed by the North Dakota Democratic-NPL 

Party (the State Party) for reporting funds 

transferred to the State Party from local legislative district committees (the District Committees). 

The State Party is organized so that each District 

Committee shares in the financial responsibility 

by raising a quota of funds from individual 

contributions and district fundraising events. In 

its request, the State party outlined the methods 

it had been using to receive and report contributions from the District Committees. It also 

proposed several methods (described below) 

whereby it would not be necessary, in most 

cases, for the District Committees to register and 

report. 

1. Contributions Received Directly by 

the State Party 

Individual, itemizible contributions received 

directly by the State Party will continue to be 

itemized on State Party reports to the Commission. Any person at the district level who 

receives a contribution for the party which 

exceeds $50 must provide a detailed account 

of the contribution to the State Party treasurer. The State Party treasurer, upon receipt 

of the contribution, must deposit it in a 

designated campaign depository within ten 

days. 

2. Transfers of Proceeds from 

District Fundraisers 

The State Committee must itemize each 

transfer of proceeds from district fundraising 

events as separate "transfers in from affiliated 

committees." In addition, the State Party 

must clearly identify the District Committee 

(by number or in some other fashion) as the 

source of the transfer. 

3. Transfers Exceeding $1,000 

If the State Party establishes a separate 

Federal campaign committee with a segregated Federal account, the amount over 

$1,000 transferred by a District Committee to 

the State Party within a calendar year could 

be placed in another account whose funds are 

not used to influence Federal elections (i.e., a 

State and/or local account). Under this 

procedure, District Committees which did not 

wish to be considered "political committees" 

as defined in the Act could retain that status. 

In this case, however, it would be the responsibility of the State Party to request assurance 

from the transferring District Committee that 

the contributions orignated from sources 

which are permissible under the Act. 

If however, the State Party maintains a single 

account for Federal and non-Federal candidates, any District Committee which transfers 

more than $1,000 to the State Party during 

the calendar year must register and report to 

the Commission. 

AO 1978-93: Use of Excess 

Campaign Funds 

Senator Lloyd Bentsen may transfer unexpended campaign funds from his 1970 campaign to 

his reelection committee for use in the 1982 

election. Commission regulations provide that 

a candidate may transfer funds from a previous 

campaign committee to a currently registered 

principal campaign committee, as long as none 

of the transfers consist of funds which would be 

in violation of the Act. 
63 

With regard to this opinion and the following 

two opinions, the Commission has no jurisdiction over the application of tax laws and House 

or Senate Rules to the situation described. 

AO 1978-94: Use of Excess 

Campaign Funds 

Excess campaign funds remaining from the principal campaign committee and three other authorized committees of the late Congressman 

Ralph H. Metcalfe may be used for several purposes consistent with State and Federal laws. 

The funds may be transferred to Federal, State 

or local election campaign committees of the 

Congressman's son, to a political ward organization, to the surviving members of the Congressman's immediate family, to employees of his 

congressional and campaign committee staffs 

and to qualified charitable organizations. 

For contribution purposes, the four campaign 

committees are considered a single committee. 

Thus, any transfers to political committees or 

candidates involved in Federal elections would 

be subject to one overall contribution limit. 

A contribution to Ralph Metcalfe, Jr., as a 

candidate for Federal office, for example, 

would be limited to $1,000 per election. Transfers to a State campaign of Ralph Metcalfe, 

Jr. would not be limited, however, since contributions made to State and local elections are not 

subject to the monetary limits of the Act. 

AO 1978-95: Use of Excess 

Campaign Funds 

Congressman James J. Florio may use excess 

campaign funds to retire a debt remaining from 

his 1977 gubernatorial campaign provided there 

are no State or Federal laws prohibiting the 

transaction. The Act provides that candidates 

for Federal office may use excess campaign 

funds to support their activities as Federal 

officeholders, to contribute to a qualified charitable organization or to defray expenses for 

"any other lawful purpose." 2 U.S.C. §439a. 

The committee should report the transfer of 

funds on the report covering the period when 

· the transfer is made. 

AO 1978-96: Honoraria 

When Congressman Clarence J. Brown accepts 

a speaking engagement, he may request that the 

sponsoring organization donate his honorarium 

to any of five charitable organizations he suggests in a letter. Under 2 U.S.C. §441i(b), if a 

sponsoring organization chooses to make a 

donation to any of the five or more charitable 

organizations suggested by Mr. Brown (instead 

of paying an honorarium to Mr. Brown), the 

payment will not count against Mr. Brown's 

honorarium limit. 

AO 1978-97: Solicitations for 

Separate Segregated Fund 

A magazine published by the National Association of Postal Supervisors (NAPS), which is 

circulated to NAPS members and approximately 

1,000 nonmembers (representing three percent 

of the circulation), may contain solicitations for, 

and articles about, NAPS' separate segregated 

fund. This conclusion is based on the fact that 

NAPS intends: 

1. To publish, along with each solicitation or 

article about its separate segregated fund (the 

Supervisors Political Action Committee), an 

explicit caveat stating that contributions from 

nonmembers are not acceptable and will be 

returned; and 

2. To screen and return contributions received 

from anyone not solicitable under 2 U.S.C. 

§441b(b)(4). 

Under these circumstances, the proposed communications will not be viewed as solicitations 

directed to persons who may not be solicited. 

AO 1978-98: Clearing Account for 

Separate Segregated Funds 

Plumbers Union Local 690 Political Action and 

Social Fund (the Fund) may use a clearing 

account for the deposit and negotiation of 

checks which combine employees' union dues 

with their political contributions. 
64 

Under the Fund's procedures, union members 

make both voluntary contributions to the Fund 

and payments to the union (e.g., dues, pension, 

etc.) through payroll checkoff plans administered by employers. Employers remit payroll 

deductions to the union in a single check issued 

monthly. The union maintains a clearing 

account to receive and separate the proceeds of 

the checks, as follows: political contributions 

are segregated from other union monies and 

sent to the Fund; union monies are forwarded 

to the union. 

The Commission based its approval of the clearing account procedure on the following assumptions: 

1. For reporting purposes, the Treasurer of the 

Fund is considered to have received contributions at the moment an employee or representative of the union receives the checks combining dues payments and voluntary contributions to the Fund. 

2. The 10-day deposit period begins to run 

when the union representative receives the 

check from the employer. By the tenth day 

after the union's receipt of the employer's 

check, a separate check must be drawn on 

the clearing account and deposited into a 

separate checking account maintained by the 

Fund at a bank depository designated by the 

Fund. 

AO 1978-99: Allocation of Debt Between 

Primary and General Elections 

The Citizens for Dale Sprik Committee (the 

Committee) may treat the entire debt for printed campaign materials as a primary debt, even 

though they were used during both the primary 

and general elections. This conclusion is based 

on the fact that the materials in question were 

ordered and received before the August 8 primary and the invoice for the materials also predated the primary. 

The Commission noted that the invoice constitutes an expenditure in the nature of a "written contract, promise or agreement ... to make 

an expenditure." 2 U.S.C. §431 (f)(2). 

If the Committee chooses to treat the debt as 

a primary election debt, it may accept contributions designated for the primary to liquidate the 

debt from those who may have exhausted their 

contribution limit with respect to the general 

election, but have not yet exhausted their limit 

with respect to the primary. (The fact that the 

candidate was unopposed in the primary is 

irrelevant for contribution purposes.) In this 

case, however, the debt must be identified on 

Schedule C of Form 3 as a primary election 

debt. 

AO 1978-100: Excess Campaign Funds 

The Committee to Reelect Senator Case may use 

excess campaign funds to assist Rutgers University in the establishment of a professorship in 

public affairs in the Senator's name. The contribution of excess campaign funds to qualified 

charitable organizations is expressly made lawful 

by 2 U.S.C. §439a. 

The Commission noted that it was unable to 

express an opinion regarding possible tax ramifications or the applicability of Senate Rules since 

those issues are not within its jurisdiction. 

AO 1978-102: Union Get-Out-the-Vote Drive 

The Coal Miners Political Action Committee 

(the Committee) must reimburse the general 

treasury of the United Mine Workers (UMW) for 

union funds which were used to conduct a 

get-out-the-vote drive. 

Prior to the 1978 general election, the UMW 

used general treasury funds to finance radio and 

television ads encouraging UMW members to 

vote. Some of the ads, which were broadcast in 

several States, endorsed specific candidates for 

State office. Others, described as "nonpartisan" 

by the Committee, were more general, urging 

UMW members to vote for candidates friendly 

to labor but not identifying or endorsing specific 
65 

, 

candidates or political parties. No candidates for 

Federal office were specifically identified or 

endorsed in any ads. 

The Commission noted that the announcements 

supporting specific State candidates were 

outside the scope of the Act. However, with 

regard to the nonpartisan ads, the Commission 

determined that they were not permissible under 

the Act because: 

1. The Act prohibits expenditures by labor 

unions in connection with Federal elections; 

although 2 U.S.C. §441 (b)(2)(B) permits the 

use of general treasury funds to conduct 

get-out-the-vote drives, it restricts those drives 

to union members and their families. 

2. Furthermore, Commission Regulations 

require that any get-out-the-vote drive which 

extends beyond union members and their 

families must be jointly sponsored by the 

union and a nonprofit or civic organization 

which does not endorse candidates or political 

parties (11 CFR 114.4(d)). 

Since the UMW get-out-the-vote drive reached 

the general public and was sponsored solely by 

the UMW, it was not conducted in compliance 

with the Act or Commission Regulations. To be 

in compliance, the Committee must allocate a 

reasonable portion of expenses for the nonpartisan activity between Federal and non-Federal 

elections. In this case, a reasonable allocation 

would be as follows: The amount allocated to 

Federal candidates should have the same ratio to 

total expenses for nonpartisan announcements 

as the number of Federal candidates has to the 

total number of candidates (local, State and 

Federal) supported by the union and its PAC. 

That amount· should then be transferred from 

the Committee to the UMW treasury. 

AO 1979-1: Personal Liability for 

Campaign Debts 

In response to a question posed by the Friends 

of Senator Otterbacher (the Committee), the 

Commission held that, as a general rule, contributions to retire debts from a past election are 

subject to the contribution limits applicable to 

that election. The Commission also explained 

that its authority to issue advisory opinions is 

limited to requests concerning the application 

of the Act or Commission Regulations to 

specific factual situations. 

The Committee had asked if payment of Committee debts by Committee agents or members 

who are held personally liable, under State law, 

would constitute contributions subject to 

limitation under the Act? 

The Commission noted that, since no State judgments had yet been rendered against any committee personnel, such a situation did not 

currently exist; if it did develop, the Commission would then give further consideration to 

the application of the Act in that specific situation. 

AO 1979-2: Refunds to Committee 

NOTE: The Commission emphasized that the 

following opinion should be narrowly read. 

Persons wishing guidance in this area should 

submit separate requests even though their 

factual situations may appear to be "indistinguishable in all . . . material aspects" from the 

situation discussed in this opinion. 

Congressman Badham is coproducer, with the 

U.S. Departments of Commerce and Defense, of 

a Federal Procurement Conference (the Conference). The Badham Congressional Committee 

(the Committee) may not accept refunds from 

the Conference for amounts which the Committee advanced to cover Conference costs because 

of the source of Conference funds. Nor may the 

Committee accept refunds directly from vendors 

to whom the Committee paid deposits after 

those vendors have been paid by the Conference. 

Conference income, derived from attendee registration fees, will consist of funds from corporations, many of which are Federal government 

contractors. In view of that fact, repayment of 

the advances to the Committee by the Con-
66 

terence or by vendors would result in the 

Committee's acceptance of indirect prohibited 

contributions from corporations and Government contractors. 

The Commission noted, however, that if the 

Committee followed the procedures below, no 

enforceable violation of the Act would occur: 

1. Before the Conference date, Representative 

Badham uses his personal funds to pay the 

vendors the same amounts the Committee has 

previously paid those vendors. 

2. The vendors immediately refund to the 

Committee the deposits the Committee has 

advanced. 

3. The Committee reports those refunds on its 

next required report. Subsequently, the 

vendors may refund to Congressman Badham 

the payments advanced by him from personal 

funds on behalf of the Conference. These 

refunds would be outside the purview of the 

Act and Commission Regulations since the 

financing of the Conference does not appear 

to involve "contributions" or "expenditures" 

made for the purpose of influencing Congressman Badham's nomination or election to 

Federal office. 

The Commission expressed no opinion regarding 

application of House Rules or the possible tax 

ramifications of this situation since those issues 

are not within its jurisdiction. 

AO 1979-3: Source of 

Contributor List 

The Committee for the Survival of a Free 

Congress (CSFC) may not copy names of contributors from a report on file with the FEC 

even though the political committee (Donor) 

which filed the report specifically authorizes 

CSFC to compile such a list from a filed report. 

The Commission approved, however, the following methods of obtaining the list, proposed as 

alternatives by CSFC: 

1. The Donor may give CSFC a photocopy of 

the list. 

2. The Donor may give CSFC, by means other 

than photocopy, the names and addresses on 

the list. 

3. The Donor may give CSFC selected names 

from the list. 

The fourth alternative, the Donor's written 

authorization for CSFC to copy names from the 

report it filed with the FEC, is not permissible 

because the Act and Commission Regulations 

prohibit use of information obtained from 

reports filed with the Commission for the purpose of soliciting contributions. 

The Commission also noted that a contributor 

list provided without charge or at less than the 

usual charge would be a contribution in-kind by 

the Donor to CSFC for purposes of disclosure 

requirements and limitations. 

AO 1979-5: Committee Termination 

The Brathwaite for Congress Committee (the 

Committee) may file a termination report if 

the Committee extinguishes its outstanding 

debts in the manner which the Committee proposed to the Commission. 

Two persons owe refunds to the Committee for 

campaign services promised but not rendered; 

the Committee owes the candidate a balance on 

an outstanding loan which exceeds the sum of 

the refunds owed to the Committee (refund 

claims). In order to extinguish its debts, the 

Committee has proposed the following transfer: 

1. The Committee will assign its two refund 

claims to the candidate. 

2. The candidate will give the Committee credit 

for a loan repayment equal to the sum of the 

two claims. Since the loan exceeds that sum, 

the candidate will forgive the remaining 

balance on the loan. 

The Commission concluded that the proposed 

assignment of Committee claims to the candidate would effectively transfer those obi igations 

owed to the Committee to the candidate. If the 
67 

candidate then forgave the balance remaining 

after the transfer, that action would extinguish 

the Committee debt. 

If the Committee has no other outstanding debts 

or obligations, and satisfies all other requirements of 11 CF R 1 02.4(a) and (b), the Committee may file a termination report and end its 

reporting obligations. 

The Commission noted that when the Committee assigns its refund claims to the candidate in 

full payment of its debt to him, that debt is 

extinguished whether or not he ever receives 

the refund payments. 

AO 1979-6: Joint Fundraising Effort 

The Shasteen for Senate Committee, the 

Bereuter for Congress Committee and the Elect 

Daub to Congress Committee (the Committees) 

may, in order to retire 1978 campaign debts, 

COflduct a joint fundraising effort in accordance 

with procedures which they have proposed to 

the Commission. The Agreement for Republican 

Unity Dinner (the Agreement), submitted by the 

Committees to the Commission, is in compliance 

with the Act and Commission Regulations 

because it contains the following conditions: 

1. The Committee will appoint a single agent 

(the Agent) who will receive all funds and 

make all disbursements in connection with 

the dinner. 

2. Each of the Committees will formally designate the bank into which the funds are 

deposited as an additional campaign depository. 

3. The Agent will pay all expenses, allocate the 

costs among the Committees in equal proportions and furnish an itemized statement of 

expenditures to each Committee. 

4. The Agent will divide the net proceeds 

equally among the Committees and furnish 

an appropriate itemization of the contributions, along with required information on 

contributors, to each Committee. 

5. If any Committee receives a contribution in 

excess of limitations allowed by the Act as a 

result of the described allocation, the excess 

will be returned to the Agent to be reallocated between the other two Committees or 

returned to the contributor. 

6. If such a reallocation of proceeds is necessary, 

a corresponding reduction in the proportion 

of the expenses attributed to the particular 

Committee will be made. 

7. Notice will be printed on all tickets, explaining the pro rata distribution of the contributions; the intended reallocation procedure, if 

it is necessary, and the availability of the 

Committees' reports from the Commission. 

The Commission noted that the recordkeeping 

and reporting obligations of the Act are triggered when the Agent receives any contribution or 

makes an expenditure on behalf of the Committees. The Agent must furnish to the Treasurer 

of each Committee complete information on 

any contribution or expenditure which, when 

allocated among the three Committees, amounts 

to more than $100 per calendar year. The Agent 

is also required to deposit all contributions in 

the designated depository within ten days. 

AO 1979-7: Delegate Selection 

Reporting obligations governing Presidential 

nominating conventions do not apply to activities which the New Jersey State Democratic 

Committee (the State Committee) undertakes to 

implement an Affirmative Action Program for 

selection of delegates to the 1980 Democratic 

National Convention. Those obligations relate 

specifically to the convention and do not extend 

to the delegate selection process which precedes 

the convention. Funds received and payments 

made for activitites would not constitute "contributions" or "expenditures" within the meaning of the Act since they are not made for the 

purpose of influencing the election of any 

person to Federal office or of influencing the 

results of a primary. Therefore, they are not 

subject to the Act's limitations and need not be 

paid from the State Committee's Federal 

account. However, other aspects of the Affirma-
68 

tive Action Program may be subject to the 

provisions of the Act and Commission Regulations, as follows: 

1. The State Committee's expenses for such 

activities are in connection with the Federal 

election process. Therefore, these expenses 

may not be paid from prohibited contributions; that is, from foreign nationals or from 

the treasuries of labor unions, corporations 

and national banks. 

2. It is not necessary that a separate account 

subject to the limits of the Act be established 

to finance the program activities. However, if 

the State Committee's regular non-Federal 

account contains contributions from prohibited sources or foreign nationals, it would 

be necessary to establish a special account to 

pay costs associated with the delegate activities. 

3. Funds received and disbursed need not be 

reported unless they are paid from the Federal account of a registered Federal campaign 

committee; if that is the case, usual reporting 

procedures would be followed. 

AO 1979-8: Administration of Trade 

Association PAC 

Executive and administrative personnel of 

member corporations which have given prior 

solicitation approval to the China Clay Producers Group, a trade association, may participate in the operation, administration and 

solicitation activities of the China Clay Producers Political Action Committee (the PAC) by 

performing occasional (4 hours per month) 

services which are incidental to their regular 

employment. 

Since, under the Act, a trade association may 

use dues monies from its corporate members for 

the establishment, administration and solicitation activities of the PAC, it may also have the 

benefit of incidental services of the members' 

executive and administrative personnel to 

conduct those same activities. 

AO 1979-9: Subordinate State Party 

Committee Retires 

Candidate's Debts 

The Texas Democratic Voter Participation 

Project (the Committee), an authorized subordinate committee of the Texas Democratic Party, 

may help five Federal candidates retire their 

1978 campaign debts provided the Committee 

observes certain conditions outlined by the 

Commission. Three of the candidates were 

candidates in the general election; the other two 

were candidates only in the primary. 

In retiring debts, the Committee may make 

direct payments to the candidates' creditors. In 

the case of primary candidates, a direct payment 

to a candidate's creditors would constitute a 

contribution. Any such payment, when combined with a preprimary contribution to the 

same candidate by the Committee, must not 

exceed the $5,000 per candidate limit applicable 

to primary election contributions. 

With regard to general election candidates, direct 

payments to a candidate's creditors would 

constitute coordinated party expenditures for 

purposes of 2 U.S.C. §441a(d)(3). All other 

expenditures the Committee has made for the 

same candidate during the general election 

campaign must be combined with the contemplated payments to creditors, and the sum may 

not exceed the §441a(d)(3) expenditure limits. 

The Committee may make additional payments 

to the creditors to the extent it has not yet 

exhausted its candidate contribution limits prior 

to the general election. 

In soliciting funds to retire the 1978 campaign 

debts, the Committee is not required to issue a 

notice stating that contributions will be used to 

retire debts of specific candidates. However, 

those notices specified by 11 CF R 102.6 are 

required. 

Individual contributions to the Committee are 

subject to the $5,000 limit on a calendar year 

basis. Any contributions made by an individual 

to the Committee during the 1979 calendar year 
69 

will be attributed to the $25,000 limit for 1979, 

despite the fact that they will be used for debts 

incurred during 1978 elections. 11 CFR 110.5 

AO 1979-10: "Union Bug" on 

Printed Materials 

Payments for all candidate printed campaign 

materials are expenditures which must be 

reported, regardless of whether a "union bug" 

appears on them. (A union bug indicates that 

the printing was done in a unionized print shop.) 

The Act and Commission Regulations do not 

cover questions related to the appearance of the 

union bug on printed materials mailable under 

the franking privilege. 

AO 1979-11: Delayed Receipt of 

Campaign Contribution 

Hoosiers for Birch Bayh (the Committee) may 

regard a campaign contribution which was made 

in 1968, but only recently received by the 

Committee, as excess campaign funds, and may 

use those funds to defray noncampaign, nonreimbursable office expenses of Senator Bayh. 2 

U.S.C. §439a. 

In 1968, the Lake County Democratic Campaign 

Committee ( LCDC) contributed the proceeds 

from a fundraiser held on behalf of Senator 

Bayh to the Committee by bank cashier's check. 

The check was neither received nor deposited by 

the Committee, and it never cleared LCDC's 

account. Bank officials recently informed the 

LCDC treasurer that the funds had remained in 

the bank's possession and would soon become 

the property of the State. The treasurer then 

issued another check in the amount of the 1968 

contribution ($3,044.07) and sent it to the 

Committee. 

For disclosure purposes, the Committee must: 

1. Report the LCDC funds as a miscellaneous 

receipt rather than as a contribution or a 

transfer from LCDC (records of contributors 

to the 1968 fundraiser do not exist); 

2. State the nature of the receipt and its intended restricted use; and 

3. Disclose disbursements from those funds and 

provide the same details for those disbursements as is required for expenditures. 

The Commission expressed no opinion as to 

possible application of the Standing Rules of the 

Senate to this situation or possible tax ramifications; both those issues are outside Commission 

jurisdiction. 

AO 1979-12: Joint Fundraising Effort by 

State and Federal Committees 

Congressman Bill Burlison may proceed with an 

arrangement he has made with the Butler 

County Democrats and the Truman Day Committee to sell tickets for their annual fundraiser 

and retain 50 percent of the proceeds he collects 

for the Burlison Committee (the Committee). 

The Committee would be required to assume a 

pro rata share of expenses for ticket production 

(and perhaps other fundraising expenses) to 

avoid accepting in-kind contributions from the 

Butler County Democrats and the Truman Day 

Committee. Similarly, the Committee must 

regard its share of ticket proceeds as contributions subject to all the limits and reporting 

requirements of the Act. 

With regard to reporting requirements, the Commission noted that neither the Butler County 

Democrats nor the Truman Day Committee is a 

registered political committee. Consequently, 

they have no reporting requirements, assuming 

that they do not engage in activities which 

would require them to be registered and file 

reports. The Committee, on the other hand, is 

subject to reporting requirements. It needs to 

report only its 50 percent share of the gross 

price of each ticket sold as itemized or unitemized contributions. 

To avoid treating all funds collected by check as 

contributions to the Committee, checks made 

payable to the Butler County Democrats or the 

Truman Day Committee must be deposited 

within 10 days of receipt in a transmittal or 

clearing account; 50 percent of the proceeds 
70 

would then be forwarded to the Committee by a 

check drawn on that account. The transmittal 

account, as well as the Committee's regular 

account, must be designated as a campaign 

depository on the candidate's and Committee's 

Statements of Organization (Form 1). Neither 

the Committee nor the transmittal account may 

accept any funds which are prohibited under the 

Act (e.g., cash contributions exceeding $100, 

treasury funds from corporations and labor 

organizations). The Commission also emphasized 

the importance of the notice to contributors 

required by 11 CFR 102.6(b). 

AO 1979-13: Solicitation for Separate 

Segregated Fund 

The Raymond Corporation (the Corporation) 

may not publish a proposed article about the 

Corporation's separate segregated fund 

(RAYPAC) in the Corporation's publication 

because the article is a contribution solicitation 

for RAYPAC and is sent to people who may not 

be solicited. The proposed article is considered a 

solicitation because it describes RAYPAC's 

activities and encourages employee participation 

in RA YPAC by commending employees who 

have already "participated in" (contributed to) 

RAYPAC. Since the publication is circulated to 

all Corporation employees (including retired 

employees) and other interested parties, the 

article would constitute an improper solicitation 

because solicitations to nonmanagerial personnel may be made only twice a year under the 

specific guidelines of 11 CFR 114.6, and contribution solicitations may not be made to nonemployees at anytime. (Retirees who hold no 

stock in the corporation and other interested 

parties are not solicitable.) The article containing the solicitation is distributed in a manner 

which does not conform to these requirements 

under the Act and Regulations and is therefore 

impermissible. 

If RAYPAC took precautionary measures to 

discourage, screen and return any contributions 

from people who RA YPAC is prohibited from 

soliciting at all or who may be solicited only 

under the conditions of CFR 114.6, and if the 

publication's circulation to those people was 

only incidental, then the inclusion of the proposed article would not be considered an improper contribution solicitation. 

AO 1979-14: State Party Registration 

Requirements 

The American Party of Georgia (the State Party) 

must register and report under the Act if it 

transfers more than $1,000 during a calendar 

year to the American Party National (the 

National Party), which is a political committee 

registered with the Commission. Since the 

National Party maintains a single account (a 

Federal account) for both Federal and nonFederal candidates (11 CFR 102.6 (a)(2)), 

the fu II amount of the State Party's transfers are 

considered contributions to influence Federal 

elections. As such, these transfers trigger the 

State Party's registration and reporting requirements under the Act. 

Should the National Party officially terminate 

its status as a political committee, transfers from 

the State to the National Party would not 

thereafter create political committee status for 

the State Party. 

AO 1979-15: Solicitation in 

Trade Association's Magazine 

The Independent Insurance Agents of America, 

Inc. (IIAA) may not publish a solicitation for its 

separate segregated Jund, the National Agents 

Political Action Committee (NAPAC), in IIAA's 

magazine. IIAA is a federation of trade associations comprised of individual and corporate 

members. Approximately 50.6 percent of the 

magazine's total circulation is to personnel of 

corporate members which have not given IIAA 

the prior solicitation approval required by 11 

CFR 114.8. Although IIAA proposed publishing, with the solicitation, an explicit caveat 

stating that contributions from nonsolicitable 

persons would be screened and returned, the 

plan is not permissible because: 

1. Circulation to nonsolicitable persons (56 percent) is not incidental. Of the nonsolicitable 
71 

group, 5.5 percent could never be solicited; 

the remaining 50.6 percent is not currently 

solicitable, but could be if their corporate 

agencies granted prior solicitation approval to 

IIAA. 

2. IIAA's proposal indicates that if a contribution from an individual in the presently 

nonsolicitable class were received simultaneously with corporate solicitation approval, that contribution would not be 

returned. This practice does not conform with 

Commission Regulations which require prior 

and not simultaneous approval (11 CF R 

114.8). 

3. The proposed solicitation requests contributions from the families of individual members 

of IIAA. While Commission Regulations 

permit the solicitation of families of personnel of corporate members who have given 

prior solicitation approval, families of individual (noncorporate) members may not be 

solicited. 

AO 1979-16: Temporary Fundraising 

Through Trust Arrangement 

A single political committee may temporarily 

solicit members of both the National Association of Women's and Children's Apparel Salesmen Guild (NAWCAS) and the National Association of Men's and Boy's Apparel Clubs, Inc. 

(NAMBAC) prior to the contemplated merger of 

those two sponsoring corporations. Until the 

merger is completed, funds will be collected, 

segregated and held by the NAWCAS/NAMBAC 

Political Action Trust, which is currently registered as a multicandidate political committee. 

The proposed arrangement is permissible since 

both corporations could currently establish their 

own separate segregated funds, and then consolidate both funds upon completion of the 

merger. 

Approval of the arrangement is conditioned on 

the corporations' compliance with the following 

procedures and restrictions, which they have 

proposed: 

1. Each corporation will solicit its own individual members, pay its own administrative and 

fundraising expenses and fully segregate all 

collected funds until the merger is completed; 

at that time, the two funds will be merged 

into a single multicandidate committee. 

2. Prior to completion of the merger, the Trust 

will not use the collected funds to contribute 

to any candidate or campaign, or to make any 

other contributions or expenditures as 

defined by the Act. 

The Commission emphasized that the Trust, as a 

currently registered political committee, is 

subject to all provisions of the Act. 

AO 1979-17: Sponsorship of 

Credit Card Program 

The Republican National Committee (the RNC) 

may not accept funds or services from national 

or State chartered banks in return for the RNC's 

endorsement of the banks' credit card programs 

(except in specifically permissible circumstances 

described at the end of this opinion). Under 

the 3 options suggested by the RNC, bank funds 

would be considered prohibited contributions -

not, as the RNC suggests, a commercial exchange between the RNC and the banks. 

Under an "affinity group" plan proposed by the 

RNC, the banks would solicit the RNC's membership, using RNC membership lists, and a 

letter signed by the Chairman of the RNC. The 

banks would expect to increase their card 

holders; in return, the RNC would be compensated under one of the following options: 

Option A: The RNC would receive no direct 

compensation, but periodically it would have 

the exclusive right to include RNC educational/ 

promotional materials with regular monthly 

statements sent to Republican sponsored card 

holders by the bank. 

Option 8: The RNC would receive a direct payment of $2.50 for each card issued as a resu It of 

the RNC solicitation letter, and would have 
72 

periodic use of the monthly statement described 

above. 

Option C: The RNC would receive direct payment, on a monthly basis, of a percentage of the 

total sales volume, or a percentage of the finance 

charge balance on Republican credit card 

accounts; it would also have periodic use of 

monthly statements. 

There is no explicit exception under 2 U.S.C. 

§441b which would permit a political party to 

view payments from a corporation or national 

bank (not made as loans in the ordinary course 

of business) as consideration for services rendered, rather than as political contributions. 

Therefore, such payments or valuable services 

(e.g., use of the monthly statement to mail RNC 

political materials without charge) would 

constitute contributions. National banks are 

prohibited from making contributions or expenditures in connection with any election (11 

CFR 114.2(a)), while State banks (chartered as 

corporations under State law) are prohibited 

from making any contributions or expenditures 

in connection with Federal elections (11 CFR 

114.2(b)). Since the contributions (payments 

and services) would be made by prohibited 

sources, the plan as proposed by the RNC 

would not be permissible. 

The RNC may, however, receive bank funds 

under options A, B or C, if they are separately 

accounted for and deposited in separate bank 

. accounts maintained exclusively for the activities described below: 

1. The RNC may accept funds from national 

banks and corporations for the construction 

or purchase of an office facility not acquired 

to influence a Federal election. Although such 

funds are considered receipts rather than contributions, they must be reported. 2 U.S.C. 

§431 (e)(5)(H). 

2. The RNC could accept funds from incorporated State banks if the funds were deposited 

in separate segregated bank accounts and used 

exclusively in connection with non-Federal 

elections. Contributions from national banks 

would not be permissible, since that prohibition extends to non-Federal as well as Federal 

elections. Similarly, Option A, which does not 

include a direct payment, is nevertheless 

impermissible for national banks, although 

incorporated State banks may mail RNC 

materials pertaining exclusively to nonFederal elections. Under the Act, national 

banks may not do so even if the mailings are 

limited to non-Federal elections. 

The Commission expressed no opinion as to the 

applicability of the Internal Revenue Code or 

State law to the proposed plan. 

AO 1979-18: Sale of Contributor List 

The Federal Election Commission's Former Employees Committee (FEC-FEC) may sell its 

contributor list to individuals, corporations, 

unions, candidates or committees. Proceeds 

from the sale will not constitute a contribution 

to the FEC-FEC if the list is sold at the "usual 

and normal charge." However, if the list is sold 

for less than the usual and normal charge, the 

FEC-FEC will have made a contribution to any 

purchaser who is a candidate or political committee. If the list is sold for more, the purchaser 

will have made a contribution to the FEC-FEC. 

The amount of the contribution would be the 

difference between the usual and normal charge 

for such a list at the time of its sale and the 

amount the purchaser actually paid for the list. 

Payments received from the sale of the list at 

usual and normal charges must be reported on 

FEC Form 3 as other income (Line 16). However, if the sale of the list results in a contribution to or by FEC-FEC, the amount exceeding 

the "usual and normal charge" must be reported 

on Form 3 as contributions from an individual 

(Line 14), a transfer from another political 

committee (Line 15), or a transfer to another 

political committee (Line 22). 

The Commission emphasized that Commission 

Regulations at 11 CFR 104.13 prohibit the use 
73 

of information copied from reports and statements filed with the Commission for the purpose of soliciting contributions or for any 

commercial purpose. 

AO 1979-19: Combined Payment to Trade 

Association and Separate 

Segregated Fund 

Individual members of the National Cattleman's 

Association (NCA) may purchase advance 

tickets for functions at the NCA annual convention and to a fundraiser sponsored by NCA's 

separate segregated fund, the Cattleman's Action 

Legislative Fund (CALF), by combining payments for both on one check. Checks may be 

made payable to NCA and must be drawn on an 

individual's personal bank account, not a 

corporate account. (Checks, however, drawn on 

a corporate account which is the nonrepayable 

drawing account of an individual NCA member 

would also be permissible.) The procedure for 

combining political contributions with payments 

to NCA is permissible provided that: 

1. Contributions by check combining payment 

for convention events and the CALF tundra iser are treated as contributions received by 

CALF on the date the combined check is 

received by any NCA employee or representative; that portion of each check representing a 

political contribution is deposited in the 

account of a bank depository designated by 

CALF within 10 days of its receipt by NCA. 

2. NCA provides, upon Commission request, all 

records of NCA bank accounts in which combined payments have been deposited. 

3. NCA makes available, upon Commission 

request, all usual accounting records of 

members' convention payments and records 

indicating which members combined payments. These records must be maintained for 

three years. 

AO 1979-21: Reimbursement for Use of 

Payroll Deduction Plan 

The Political Contributions Committee (PCC), 

the separate segregated fund of the Communications Workers of America (CWA), must reimburse the New York Telephone Company (the 

Company) for expenses incurred by the Company in making a payroll deduction available to 

CWA for the collection of political contributions 

from CWA members to the PCC. 

The Act and Commission Regulations permit a 

corporation or labor organization to use general 

treasury funds to pay for the "establishment, 

administration and solicitation of contributions 

to its separate segregated fund." 11 CFR 

114.5(b). Therefore, payment by the corporation of the expenses for payroll deduction used 

for or on behalf of CWA and PCC would be 

prohibited by 2 U.S.C. §441b. Accordingly, 

CWA must reimburse the Company. 

AO 1979-22: Legal Services Provided 

to Presidential 

Candidate Committee 

Certain legal services provided to the Carter/ 

Mondale Presidential Committee (the Committee) by Timothy G. Smith do not count as either 

contributions or expenditures as long as the 

Committee follows certain conditions, as indicated below. According to a letter of understanding between the Committee and Mr. 

Smith's regular employer, Rogers and Wells (the 

Firm), Mr. Smith receives one-third of his 

compensation from the Firm; the Committee 

pays the rest of his compensation for services he 

renders involving "primarily FECA compliance 

and campaign public financing matters," in 

addition to "some other legal and political 

duties." 

1. Compliance with the Act: Committee payments for legal services which Mr. Smith 

provides solely to ensure the Committee's 

compliance with the Act are exempt from the 

definitions of "contribution and expenditure." 2 U.S.C. § §431 (e)(4) and (f)(4)(J). 

Hence, they are not subject to the Committee's overall expenditure limitations. Nevertheless, all such payments to Mr. Smith and 

his support staff for these services must be 

reported. 

2. Other Legal Services: With regard to Committee payments for other legal and political 
74 

duties performed by Mr. Smith on behalf of 

the Committee, the compensation schedule 

established by Smith and the Firm precludes 

the Firm from making an in-kind contribution 

to the Committee. However, the Committee 

must periodically reevaluate the schedule to 

ensure that it continues to accurately reflect 

the relative amounts of time Mr. Smith 

devotes to the Firm and the Committee. 

Committee payments for any "other legal and 

political duties" which are not rendered for 

compliance purposes are reportable expenditures under the Act and are subject to the 

Committee's overall expenditure limitations. 

3. Reimbursement Schedule: Expenses which 

are incurred by the Firm as a result of Mr. 

Smith's work on behalf of the Committee 

(e.g., occasional use of telephone, support 

staff and other Firm resources) must be 

reimbursed by the committee in accordance 

with a predetermined schedule which reflects 

the actual cost of the goods and services 

provided. Amounts paid by the Committee to 

the Firm for such reimbursement would be 

reportable expenditures subject to the Committee's overall expenditure limitations. However, if use of Firm resources was incidental 

to legal and accounting services to assure compliance with the Act, reimbursements would 

be reportable but not subject to expenditure 

limitations. 

AO 1979-23: Reporting Debt 

Payments 

The Neil Wallace for Congress Committee (the 

Committee) must report its payment to extinguish a Committee debt on both Schedule C (as 

retirement of the debt) and Schedule B (as an 

expenditure), of FEC Form 3. The Act requires 

continuous reporting of all debts and obligations 

until they are extinguished. 2 U.S.C. §434(b) 

( 12). 

AO 1979-24: Sale of Campaign 

Materials 

A State political action committee (State PAC) 

may purchase unused campaign materials from 

Ronald Hein's Federal campaign committee 

(the Committee). Although the State PAC is 

permitted, under State law, to accept corporate 

contributions, no prohibited contribution to the 

Committee would result provided the materials 

are purchased at no more than the usual and 

normal charge for those materials in the market 

from which they would ordinarily be purchased. 

In addition, Mr. Hein's State Senate Committee 

may purchase the materials at the usual and 

normal charge without making a prohibited 

contribution. The Commission offered no 

guidance as to whether the State PAC could 

purchase the materials from the Committee and, 

in turn, donate them to Mr. Hein's State Senate 

Committee. That issue is beyond Commission 

jurisdiction. 

AO 1979-25: Payment of 

Intern Expenses 

The Wisconsin Education Association Council 

(the Council) may pay the expenses of teacher 

interns working in the mobile district office of 

Congressman Les Asp in. The teacher interns will 

not participate in any political activity connected with Congressman Aspin's reelection. 

They will, however, assist constituents who visit 

his office and otherwise support his activities as 

a Federal officeholder. Therefore, since the 

nature of the interns' work is constituent service 

rather than political electioneering, Council 

payment of intern expenses would not constitute "contributions" under the Act. 

Council payments would, however, constitute 

"funds donated" to support the activities of a 

Federal officeholder. Such funds must be 

disclosed on a special report as receipts (from 

the Council) and corresponding disbursements 

(to the interns). 11 CFR 113.4. 

The Commission expressed no opinion on the 

possible application of House Rules to this situation. 
75 

AO 1979-26: "Testing-the-Waters" 

Congressman Charles Grassley is not considered 

a candidate with reporting obligations under the 

Act, provided that all funds raised and spent by 

his Exploratory Committee (the Committee) are 

used exclusively for "testing-the-waters." The 

sole function of the Committee, which is registered with the Commission, is to determine the 

feasibility of Mr. Grassley's candidacy for the 

Senate from the State of Iowa. Under the Act, 

funds used solely to determine political support 

for a potential candidacy are not considered 

contributions or expenditures, unless the individual subsequently becomes a candidate. 11 

CFR 100.4(b)(1) and 100.7(b)(2). The Committee's activity, therefore, does not trigger 1980 

Senate candidate status or the registration and 

reporting requirements of the Act. Consequently, Congressman Grassley need not file a 

FEC Form 2 as a 1980 Senate candidate, and 

the Committee may terminate its registration 

with the Commission if its activities are limited 

to "testing-the-waters" for a possible 1980 

Senate candidacy. 

AO 1979-27: Administrative Expenses of 

Separate Segregated Fund 

The Associated Milk Producers, Inc. (AMPI), a 

corporation without capital stock, may use 

general treasury funds to pay the administrative 

expenses of its separate segregated fund, the 

Committee for Thorough Agricultural Education 

(C-TAPE). 2 U.S.C. §441b(b)(2)(C). 

AO 1979-28: Contribution From 

Unincorporated Association 

The Treasury Employees Political Action 

Committee (TEPAC), the separate segregated 

fund of the National Treasury Employees Union 

(NTEU), may accept a political contribution 

from an unincorporated recreation association 

of Federal employees (the Association) represented by NTEU. 

The Association maintains vending machines in 

Federal facilities, and the proposed contribution 

is comprised of profits derived from those 

machines. The contribution did not result from 

a TEPAC or NTEU solicitation. Since the 

Association is not a corporation, and assuming it 

is not a government contractor, TEPAC may 

accept the unsolicited contribution subject to 

the contribution limits. 

AO 1979-30: Transfers Among Subordinate 

Committees of State Party 

Committee 

The Jefferson-Jackson Day Committee (JJ DC), 

an unregistered fundraising committee of the 

Democratic Party, may make coordinated party 

expenditures to retire the debts of the Miller for 

Senate Committee (the Miller Committee) and 

the 1978 Virginia Democratic Campaign Committee (VDCC), provided it registers with the 

Commission, segregates its funds and organizes 

its operations in accordance with Commission 

Regulations. 

The JJDC has cash-on-hand which includes 

union and corporate funds. The Miller Committee and the VDCC have outstanding debts. The 

JJDC may transfer its surplus funds to help 

these committees retire their debts provided it: 

1. Establishes a separate Federal campaign 

committee which registers as a "political 

committee" affiliated with the Virginia 

Democratic Party; 

2. Discloses, with regard to this "political 

committee," the source of any cash-on-hand 

at the time of registration, and excludes from 

its cash any contributions not permissible 

under the Act. 

The JJDC may then make coordinated expenditures on behalf of the Miller Committee in either 

of the alternative methods it has proposed: 

1. Directly to the creditors of the Miller Committee; or 

2. As a transfer to the VDCC for payment to the 

Miller creditors. 
76 

The JJDC may also transfer additional funds to 

the VDCC to retire its debts, since Commission 

Regulations permit unlimited transfers between 

committees of the same political party. 

AO 1979-31: Solicitations by 

Independent Committee 

If Western Enterprise Political Action Committee (WEPAC) is, as it claims, an independent, 

unaffiliated committee with no connected 

organization, it may solicit and receive contributions from individuals employed by Hilton 

Hotels Corporation as well as other individuals 

and political committees. The contributions it 

receives must be within the limits of 2 U.S.C. 

§441a and otherwise lawful under the Act. 

The Commission noted that the Act prohibits 

WEPAC from receiving any contribution of 

goods, services or anything of value from Hilton 

Hotels Corporation or any other corporation (2 

U.S.C. §441b), and emphasized that WEPAC's 

receipt of a mailing list of Hilton Hotels Corporation employees would constitute a prohibited 

contribution, unless WE PAC paid the "usual and 

normal charge" for such a list. 11 CFR 114.9(d) 

and 100.4(a)(1 )(iii)(B). 

AO 1979-32: State Report Does Not 

Meet Act's Requirements 

The Kanawha County Democratic Executive 

Committee (the Committee) may not submit a 

State campaign finance report to the Commission to satisfy the Committee's 1978 filing 

obligations. The State reports fail to provide the 

mailing address, occupation and principal place 

of business of contributors to the Committee, as 

required by the Act. 2 U.S.C. §434(b). To 

satisfy the reporting requirements of the Act, 

the Committee must submit the required information to the Commission. 

AO 1979-33: Union Reimburses 

Separate Segregated Fund 

District 1199-C of the National Union of Hospital and Health Care Employees (the Union) may 

use general treasury funds to reimburse the 

District 1199-C Political Action Fund (the 

Fund) for administrative costs inadvertently 

paid by the Fund. 

The Fund spent $1,050 to purchase tickets to an 

AFL-CIO Council COPE banquet which the 

Fund believed was political campaign activity. It 

later discovered that the banquet proceeds were 

used exclusively for and contributed to a "segregated and nonpartisan register and vote campaign fund." 

A labor organization's financial support for nonpartisan registration and voter drives directed 

toward its members and their families is excluded from the Act's definition of contribution or 

expenditure. 2 U.S.C. §441b(b)(2)(B). Since the 

proceeds of the banquet were used for an 

exempt activity, the Union could have paid 

these costs directly from its treasury without 

violating the Act. 

AO 1979-34: Public Financing Payments 

for New Party Candidate 

Mr. Morris Woods, the Presidential candidate of 

the Freedom Party, is not entitled to receive 

preelection public financing payments from the 

Presidential Election Campaign Fund. A new 

party Presidential candidate is eligible only for 

"retroactive" public financing payments (i.e., 

postelection), and then only if the candidate 

receives five percent or more of the tota I number of popular votes cast for the office of 

President in the election. 11 CF R 142.3(a). 

AO 1979-35: Joint Fundraising Effort 

The Democratic Senatorial Campaign Committee (DSCC) may conduct a joint fundraising 

effort in cooperation with certain Democratic 

Senate candidates, provided that the DSCC 

adheres to those recordkeeping and reporting 

procedures which DSCC proposed to the Commission. The effort will involve giving art prints 

to contributors who donate a certain amount to 

the DSCC in conjunction with a particular 

candidate. Under the proposed procedures, the 

DSCC will act as the authorized agent of the 

candidates. The DSCC will establish a special 
77 

account which will be designated as an additional campaign depository by each participating 

candidate. The DSCC will report the proceeds 

received into the special account and, after the 

fundraising expenses have been paid, will distribute the appropriate share to each candidate. 

Each candidate's principal campaign committee 

will report its share of contributions received. In 

addition to approving the procedures proposed 

by the DSCC, the Commission noted that the 

following procedures would also be required: 

1. The DSCC, as agent of the participating candidates must deposit all contributions into the 

special account within ten days of their 

receipt. 

2. The DSCC must report gross proceeds received into the account and distribute to each 

participating candidate his or her appropriate 

share of the net proceeds (gross contributions 

less allocable share of fundraising costs). Since 

DSCC will make all fundraiser expenditures, 

the allocation of fundraising costs must be 

made on the same basis as the allocation of 

proceeds to avoid the making of an in-kind 

contribution by DSCC to any participating 

candidate. The candidates' committees need 

not report fundraiser expenditures, provided 

that they are reported by DSCC. 

3. The DSCC must report all relevant contributor information on Schedule A and disclose 

all fundraiser expenditures on Schedule B. In 

addition, the DSCC must report the distribution of net proceeds to each candidate as a 

transfer out, and note (on Schedule B) that 

the proceeds were the result of a joint fundraising effort with the particular candidate. 

4. The DSCC must furnish each candidate's principal campaign committee with aggregate 

contributor information, including the candidate's share of each gross contribution received and reported by DSCC. 

5. Each candidate's principal campaign committee must report the actual amount of the 

transfer received from the DSCC as a transfer 

in. In addition, each principal campaign 

committee must itemize (as a memo to 

Schedule A) the candidate's share of each 

gross contribution received by DSCC if that 

share, together with previous contributions 

from the same donor during the same calendar year, exceeds $100. 

The Commission noted that the artist's services 

in creating the original work of art from which 

the prints are made would constitute a volunteer 

service rather than an in-kind contribution to 

the fundraising effort. 2 U.S.C. §431 (e)(5)(A). 

AO 1979-36: Direct Mail 

Agreement 

Amounts expended in accord with a direct mail 

agreement by Working Names, Inc. during the 

initial stages of a direct mail fundraising program 

which it is conducting on behalf of the Committee for Fauntroy (the Committee) would not be 

considered campaign contributions provided 

that the proposed agreement, described below, 

conforms with ordinary business practice in the 

direct mail industry. 

Under the proposed agreement, Working Names 

will incur the initial expenses in preparing and 

mailing the fundraising materials; it will then bill 

the Committee for those expenses and its own 

fees. Contributions received as a result of the 

direct mail program will be deposited in the 

Committee's account, although 75 percent of 

those contributions will be designated as reimbursement for Working Names. The agreement 

provides that the cost to the Committee will 

generally not exceed 75 percent of all contributions collected. 

The Commission concluded that the amounts 

initially advanced by Working Names, which are 

subject to reimbursement by the Committee 

would not be campaign contributions provided 

that: 

1. The provisions regarding initial expenditures 

by Working Names and the limited liability of 

the Committee in the event of an unsuccessful 

fundraising campaign are normal industry 

practice; 

2. The terms of credit are similar to those 

extended to nonpolitical clients; and 
78 

3. Working Names charges the Committee the 

same rates it charges to all other clients for 

the same services. 

The Commission noted that if any of the provisions deviated from the normal course of doing 

business, a prohibited contribution could occur. 

AO 1979-37: Donations to 

Federal Officeholder 

Donations from partnerships, associations, corporations or unions to a trust established by 

Representative Daniel Flood to pay his legal 

defense expenses are not contributions or 

expenditures under the Act, since they are not 

made for the purpose of influencing the nomination or election of a person to Federal office. 2 

U.S.C. §431 (e) and (f). Nothing in the Act or 

Commission Regulations would limit or prohibit 

the trust from receiving donations from the 

described sources. Furthermore, neither Representative Flood nor the trust would be required 

to file campaign finance disclosure reports. 

The Commission expressed no opinion on the 

applicability of the House Rules, Federal income 

tax statutes or any other Federal law to the 

establishment and use of the trust since those 

issues are beyond Commission jurisdiction. 

AO 1979-38: Solicitation of 

Corporation's Licensees 

Hardee's Good Government Fund (the Fund) 

may solicit contributions from the executive and 

administrative personnel of Hardee's licensees 

and their families because Hardee's and its 

licensees are affiliates. 11 CFR 114.5(g)(1). 

Since Hardee's maintains continuing direction 

and control over its licensees through the 

franchise agreement, Hardee's and its licensees 

are affiliates within the meaning of the Act and 

Regulations. Therefore, solicitation of executive 

and administrative personnel of the licensees by 

Hardee's is permissible, if conducted in accordance with Commission Regulations. 

AO 1979-39: Fundraisers' Commissions 

The Crar.e for President Committee (the Committee) must treat the gross amount of all 

contributions, which are the result of solicitations by its agent, including amounts deducted 

to pay commissions to fundraisers, as the 

amount received by the Committee regardless of 

whether: 

1. The fundraiser turns the gross amount of the 

contribution over to the Committee and the 

Committee subsequently pays the fund raiser's 

commission; or 

2. The fundraiser turns the net amount of the 

contribution over to the Committee, after the 

fundraiser has deducted his commission. 

In either situation, the entire amount contributed must be treated as the contribution received by the Committee. The agent's commission, 

which is a percentage of the total contribution, 

represents part of the cost of fundraising. 

Commission Regulations provide that donation 

of all or a part of fundraising costs are included 

in the definition of "contribution." 11 CF R 

100.4(a)(2). 

AO 1979-40: Financial Activities of 

Unauthorized Committee 

The Florida for Kennedy Committee (F FKC), 

an unauthorized political committee formed to 

draft Senator Edward Kennedy as a 1980 

Presidential candidate, may receive from each 

· individual and each political committee up to 

$5,000 in contributions per calendar year. 

FFKC's expenditures are not limited by the Act. 

Contribution Limitations: Since Senator Kennedy is not a Presidential candidate and because 

FFKC is not established or maintained by a 

national political party, the $5,000 limit on 

contributions "to any other political committee" governs contributions to the F F KC. 2 

U.S.C. §441a(a)(1 )(c). 

Expenditure Limitations: The Act does not prescribe limits for the expenditures proposed by 
79 

FFKC. There are no limits on independent 

expenditures. Limits apply only if expenditures 

constitute contributions in-kind. Although 

expenditures by F F KC are not independent 

expenditures because Senator Kennedy is not a 

candidate, the limits still do not apply, because 

they are not contributions in-kind either. Since 

Senator Kennedy has not consu I ted with F F KC 

and has disavowed its activities on his behalf, the 

expenditures by FFKC are not in-kind contributions. 

The Commission declined to answer FFKC's 

hypothetical question regarding the effect which 

contributions to FFKC would have on the contributors' right to make contributions to Senator 

Kennedy should he eventually become a candidate. Advisory opinions address only specific, 

factual situations. 

AO 1979-41: Registration and Reporting 

Requirements of Political 

Committee 

The National Committee for a Democratic 

Alternative (the Committee) is a political 

committee within the meaning of the Act and is 

subject to the Act's registration and reporting 

requirements. 

The Committee's purpose is to stimulate debate 

on certain policies of the present administration 

and to seek an alternative Democratic candidate 

for President in 1980. To accomplish this end, 

the Committee intends to sponsor advertisements to express its views and solicit funds. A 

prototype of the Committee's intended ads 

specifically identifies President Carter as the 

Democrat to whom an alternative is needed, and 

includes a solicitation for contributions. 

The Committee's proposed activity, as represented by the ad, is to influence the 1980 

election. And, since the Committee has stated 

that it anticipates receiving contributions or 

making expenditures totaling more than $1,000 

during 1979, it is a political committee within 

the meaning of the Act. 2 U.S.C. §431 (d) and 

11 CFR 100.14. The Committee is therefore 

subject to all provisions of the Act. 

AO 1979-42: Administration of Separate 

Segregated Fund 

The South Carolina National Bank may pay 

premiums on liability insurance to protect the 

officers and members of its separate segregated 

fund, the South Carolina National Bank Political 

Action Committee (BANK-PAC), against liability arising from the direction of BANK-PAC_ 

Although national banks are prohibited from 

making contributions or expenditures in connection with any election, the Act specifically 

allows banks (and other corporations and labor 

organizations) to establish, administer and solicit 

funds to a separate segregated fund, from which 

political contributions and expenditures may be 

made. Since the Bank's payment of the insurance premiums is a cost of establishing and 

administering a separate segregated fund rather 

than a contribution, it is permissible under the 

Act. 

AO 1979-43: Vice Presidential 

Primary 

The New Hampshire Vice Presidential primary is 

not an "election" under the Act or Commission 

Regulations since the Democratic Vice Presidential nominee is not chosen as a direct result of 

the New Hampshire primary and because the 

Vice Presidential primary does not elect delegates to the national nominating convention. 

The primary election for Vice President is the 

Democratic National Convention since only that 

Convention has the authority to select a nominee. 

AO 1979-44: Solicitation of Executive 

and Administrative Personnel 

The Public Affairs Fund, the separate segregated 

fund of United Carolina Bank, Whiteville (Whiteville), a wholly owned subsidiary of United 

Carolina Bankshares Corporation (UCB), may 

solicit the executive and administrative personnel of UCB and each of UCB's three wholly 
80 

owned subsidiaries after an internal corporate 

reorganization is completed. Commission Regulations permit a corporation and/or its separate 

segregated fund to solicit the executive and 

administrative personnel (and their families) of 

the corporation's subsidiaries, branches, divisions and affiliates. 11 CF R 114.5(g)(1 ). Since 

UCB and its three subsidiaries will become 

affiliated entities, the Public Affairs Fund may 

lawfully solicit the executive and administrative 

personnel of the parent corporation and its 

wholly owned subsidiaries. 

The Commission noted that all separate segregated funds established by a corporation, its 

affiliates, subsidiaries, branches and divisions are 

treated as a single political committee and are 

subject to a single contribution limitation. 2 

U.S.C. §441a(a)(5). 

AO 1979-46: Permissible Contributions After 

Conversion to Multicandidate 

Committee 

Americans Organized for Responsibility (Americans) expects to qualify for status as a mu lticandidate committee after the primary election. 

Once it qualifies for multicandidate status, 

Americans may contribute up to $4,000 to 

retire the primary election debt of a candidate 

to whom it contributed $1,000 during the 

primary campaign provided that the candidate 

has a primary debt of at least $4,000 when 

he/she receives the post-primary contribution. 

The contribution must be designated in writing 

as a contribution to the primary. 

Monies donated by Americans for noncampaign 

officeholder activity are not "contributions" 

under the Act and, therefore, do not count 

against the Act's contribution limitations. Such 

monies are, however, "funds donated" (11 CF R 

113.1 ), which must be reported by Americans 

on Schedule 8, with an explanation that the 

amount is to support officeholder expenses 

rather than campaign activities. 11 CF R 

104.2(b). Furthermore, the recipient must 

report those funds as a receipt on his/her biannual report on office accounts. 11 CF R 113.4. 

The Commission expressed no op1mon on the 

possible application of the Standing Rules of the 

Senate or possible tax ramifications. Those 

issues are not within the Commission's jurisdiction. 

AO 1979-48: Voter Registration 

Advertisement 

Rexnord Inc.'s Political Action Committee (the 

PAC) may pay for an advertisement, carried in a 

general circulation newspaper, which reads 

"Please Register to Vote" and which includes 

the identification of "Rexnord, Inc." in a lower 

corner of the advertisement. 

However, Rexnord Inc. may not use corporate 

funds to pay for the ad. A corporation may 

undertake voter registration activity only if it is 

restricted to the corporation's stockholders and 

executive or administrative personnel, or if it is 

jointly sponsored by a civic or non-profit 

organization which does not support or endorse 

candidates or political parties. 11 C F R 

114.4(d)(1 ). 

AO 1979-49: Contribution and Expenditure 

Limits for Unauthorized 

Committee 

Since the Independent Campaign to Elect 

William E. Simon President (the Committee) is 

an unauthorized draft committee which has 

been disavowed by Mr. Simon, and since Mr. 

Simon is not a candidate under the Act, the 

Committee may accept contributions of more 

than $1,000 but not more than $5,000 from 

individual contributors during a calendar year. 2 

U.S.C. §441a(a)(1 )(C). Moreover, there is no 

limit on the amount of money which the Committee may spend in a State campaign to promote Mr. Simon's entry into the 1980 Presidential election. The Act does not prescribe expenditure limits for unauthorized political committees whose activities have been disavowed by the 

individual being supported by the committee. 

Since Mr. Simon is not a candidate, the Committee's expenditures on his behalf would not be 

subject to the special reporting requirements 

which apply to independent expenditures. 
81 

However, these Committee expenditures, as well 

as all Committee receipts, would be governed by 

all other reporting requirements of the Act. 

AO 1979-50: Union PAC's Solicitation 

of Nonmembers 

The Public Affairs Council (the PAC), the 

separate segregated fund of the National Federation of Federal Employees (NFFE), may not 

publish a contribution solicitation in the NFFE 

newspaper which reaches 8,000 people who are 

not members of N F FE. Those 8,000 individuals 

represent 15 percent of the newspaper's total 

circulation. Despite NFFE's intention to include 

a caveat with the solicitation, stating that only 

contributions from N F FE members and their 

families will be accepted and retained, the 

solicitation is impermissible since it would reach 

more than an incidental number of nonmembers. 

The PAC may solicit NFFE employees who are 

not NFFE members only in accordance with the 

Commission's twice-yearly solicitation Regulations. 11 CFR 114.6(c) and (d). However, the 

PAC may accept unsolicited voluntary contributions at any time from NFFE employees who 

are not N F FE members. 

AO 1979-51: Termination of Dual 

Candidacy 

The "testing-the-waters" exemption does not 

apply to funds used by Congressman Robert 

Edgar. That exemption applies only to funds 

used solely to determine political support for a 

potential candidacy. Since Congressman Edgar 

filed a statement of candidacy for the Senate 

and the Edgar for Congress Committee (the 

House Committee) has been functioning on his 

behalf, his candidacy for both offices was 

established. Therefore, the exemption does not 

apply and the Edgar for Senate Committee (the 

Senate Committee) must continue to report its 

contributions and expenditures until it has filed 

its termination report. 

Since Congressman Edgar has decided not to 

pursue a Senate candidacy, the Senate Committee may transfer its residual funds to the House 

Committee subject to the procedures which 

apply when dual Federal candidates terminate 

one candidacy and continue with the other. 11 

CFR 110.3(a)(2)(v). 

AO 1979-52: Use of Corporate 

Aircraft 

The Committee to Elect Ed Howard (the Committee) must reimburse Mr. Howard's corporation, in advance and at the usual and normal 

charge, for the candidate's use of the corporation's aircraft for campaign purposes. Since Mr. 

Howard is a pilot and will be flying the aircraft 

himself, the usual and normal charge would be 

the charter rate for an aircraft of the same class 

and type with fuel and without a pilot. 

Even though Mr. Howard is the sole stockholder 

of the corporation which owns the aircraft, 

reimbursement to the corporation for campaign 

use of the aircraft is still necessary. Commission 

Regulations do not distinguish between corporations with many stockholders and those owned 

by a single stockholder. 11 CFR 114.9(e). If, 

however, the corporation were dissolved and 

made a sole proprietorship, 11 CF R 114.9(e) 

would not apply since the Regulation governs 

only those aircraft owned (or leased) by corporations and labor unions. 

AO 1979-53: Campaign Accounts 

and Depositories 

One individual, designated as treasurer by four 

different principal campaign committees and a 

fifth political committee (the Ownership Campaign), may not use a single checking account to 

handle the financial transactions of all five committees. The Act requires a principal campaign 

committee to maintain a single checking account 

for the committee in a campaign depository 

designated by the candidate. 2 U.S.C. § §432(e) 

and 437b. Furthermore, Commission Regulations require that all expenditures by the committee be made by checks drawn on that 

account. Therefore, a separate checking account 

must be maintained for each committee. All five 

committees may, however, designate the same 
82 

bank as the depository for their separate checking accounts. 

AO 1979-56: Affiliation of Political 

Action Committees 

The proposed political action committee of 

Brunswick, a joint venture corporation established by Scott Paper Company and the Mead 

Corporation, would be affiliated with the 

political action committees of both parent 

corporations (SCOTTPAC and MEADPAC). The 

management agreement between Scott and Mead 

gives each corporation the authority to appoint 

and remove executive officers and board members of Brunswick and otherwise influence 

decisions made by Brunswick. 

When one organization has the authority to 

influence the decisions of officers or members of 

another organization, Commission Regulations 

provide that all political committees established 

by those organizations are affiliated. 11 CFR 

100.14(c)(2)(ii) and 110.3(a)(1)(iii). Thus, 

Brunswick's proposed political action committee 

would be affiliated with both SCOTTPAC and 

MEADPAC. Contributions made by SCOTTPAC 

and Brunswick's proposed committee would be 

considered to have been made by a single 

committee. Similarly, contributions made by 

MEADPAC and Brunswick's proposed committee would be considered to have been made by a 

separate single committee. 2 U.S.C. §441 a(a) 

(5). Although the proposed Brunswick committee would be affiliated with both SCOTTPAC 

and MEADPAC, the Commission found no basis 

for concluding, from the facts presented in the 

request, that SCOTTPAC and MEADPAC were 

affiliated with each other. 

AO 1979-57: Contributions by 

Money Order 

The Political Action Committee of the Veterans 

of Foreign Wars (VFW-PAC) may accept money 

orders, which represent contributions raised by 

local VFW posts, provided that the local chapters: 

1. Restrict contribution solicitations to VFW 

members (i.e., raffle tickets can be sold only 

to VFW members); 

2. Do not accept cash contributions of more 

than $100; and 

3. Record, account for, and deposit the contributions in accordance with Commission 

Regulations. 

AO 1979-59: Solicitation of Personnel 

Living Abroad 

The Container Corporation Political Action 

Committee may solicit executive employees of 

the Container Corporation (the Corporation) 

who are United States citizens assigned to a 

Corporation office in a foreign country. The 

Act prohibits contributions by foreign nationals 

(2 U.S.C. §441e), but American citizens living 

abroad are not included in that category. All 

contributions from the Corporation's foreignbased employees are subject to all applicable 

limits and prohibitions of the Act. 

AO 1979-60: Deduction Plan 

Contributions 

The Hoisting and Portable Engineers Local 

Union 101 (the Union) may solicit contributions 

to its 101 Political Fund (the PAC) by using a 

plan which would permit union members to 

authorize the deduction of a portion of the 

monies paid to their vacation fund. The amounts 

deducted would be transferred to the PAC. The 

plan would be permissible, however, only if the 

sample authorization, proposed by the Union, 

were modified to reflect the contributor's right 

to donate more or less than the amount specified on the authorization card. Commission 

Regulations require that, although a contribution guideline may be suggested, any solicitation 

must inform contributors of their right to 

contribute more or less than the suggested 

guideline, and the g'Jideline may not be enforced 

bytheunion.11 CFR 114.5(a)(2). 

AO 1979-63: Prohibited Transfer 

of Corporate Funds 

The Veterans of Foreign Wars Political Action 

Committee (VFW-PAC), the separate segregated 
83 

fund of the Veterans of Foreign Wars (the 

Corporation), may not accept unsolicited 

donations, consisting of membership dues and 

the proceeds from the sale of food and beverages, from local posts and auxiliaries. The Act 

prohibits a corporation from contributing 

general treasury funds (e.g., membership dues) 

to its separate segregated fund, and also prohibits a separate segregated fund from using 

funds obtained in commercial transactions 

conducted by local posts and auxiliaries (e.g., 

the sale of food and beverages). It would be 

permissible, however, for the Corporation to use 

these funds to pay for the administrative expenses of VFW-PAC and for the solicitation of 

contributions to VFW-PAC. 11 CFR 114.1(b) 

and 114.5(b). 

AO 1979-64: Application of the Act to 

Legislative Support Organization 

The Tourism Caucus may solicit and accept 

corporate and individual funds without regard to 

the contribution limitations and prohibitions of 

the Act. The Tourism Caucus, a legislative 

support organization created by 112 Members of 

Congress to "promote and expand the economic viability of the American industry and 

the jobs of its workers," does not expect to 

become a political committee as defined by the 

Act or to be involved in federal elections. This 

determination is based on the stated intention and proposed activities of the Caucus. 

The Commission expressed no opinion regarding 

application of the House or Senate Rules to the 

situation described. Those issues are not within 

the Commission's jurisdiction. 

AO 1979-65: Relationship Between Inactive 

Draft Committee and 

Authorized Committee 

Officers and personnel of the Virginia Democrats for Leadership and Commitment (the 

Committee), a draft Kennedy committee which 

is inactive for all purposes except debt satisfaction, may, as individuals, communicate and 

cooperate with the Kennedy Presidential campaign without creating a relationship between 

the Committee and the Kennedy campaign 

committee. The facts presented by the Committee do not suggest that the individuals involved 

would simultaneously be officers or principals of 

two active committees raising funds for a federal 

election or that they would become officers of 

the Kennedy campaign. Assuming that there was 

no coordination between Committee personnel and agents of Senator Kennedy before 

the Committee became inactive, and provided 

that no Kennedy campaign personnel participate 

in the only activity contemplated by the Committee (payment of outstanding debts), Committee personnel may participate as individuals in 

the Kennedy campaign without effect on the 

Committee. 

AO 1979-71: Committee's Pre-Election 

Reporting Obligations 

PASPAC, the separate segregated fund of the El 

Paso Company, need not file a pre-election 

report for the January 1980 Iowa Presidential 

caucuses since its contributions to a Presidential 

candidate have already been disclosed in a 

previous PASPAC report and because the Iowa 

caucuses are not "elections" under the Act. The 

Iowa precinct caucuses do not constitute an 

election under 2 U.S.C. §431 (a) because they 

do not: 

1. Have the authority to nominate a Presidential 

candidate; 

2. Express a preference for Presidential nominees by a formal primary ballot process; or 

3. Select delegates to a national nominating 

convention by a formal primary ballot process. 

The caucuses only select delegates to county 

conventions of the political parties. The fact 

that the caucuses are not an "election" has no 

effect on the application of the contribution or 

expenditure limits. 
Appendix 7 85 

Computer Indexes 

Available 

A Index: Names and Addresses 

of Candidates 

Sorted by type of office sought (President, U.S. 

Senator, U.S. Representative), and alphabetically by last name or by State/Congressional district. 

B Index: Names and Addresses 

of Committees 

Includes name of connected organization, name 

of treasurer, committee I D number, notation if 

it is "qualified" as multicandidate committee, 

and filing frequency. This index can be sorted 

alphabetically by committee name, by committee I D number, and by type (Presidential, 

Senate, House, party, nonparty). 

C Index: Disclosure Documents Filed 

by Political Committees 

Includes, for each committee, its name, ID number, list of each document filed (name of report, 

period receipts, period expenditures, coverage 

dates, number of pages and microfilm location), 

total gross receipts and expenditures, and number of pages. 

D Index: Index of Candidates 

Supported by Committees 

Includes, for each committee, its name, ID number, name of connected organization, notation if 

it is "qualified" as multicandidate committee, 

and a listing of all Federal candidates supported, 

together with total aggregate contributions to or 

expenditures on behalf of each candidate (1972-

79). In the case of party committees, special 

party expenditures (section 441a(d)) are listed 

in place of independent expenditures. 

E Index: Index of Candidates 

and Supporting Committees 

Includes for each candidate the following: 

1. Candidate name, district/State, party affiliation and candidate ID number. 

2. Listing of all documents filed by the candidate (type, coverage dates, period receipts, 

period expenditures, number of pages, microfilm location). 

3. Listing of all documents filed by the principal 

campaign committee (see C Index for explanation). 

4. Listing of all documents filed by other authorized committees of the candidate. 

5. Listing of all committees (other than those 

authorized by the candidate) forwarding contributions to the candidate, the principal campaign committee, or an authorized committee, and the aggregate total of such contributions given to date. This listing also identifies 

committees making expenditures on behalf of 

the candidate or party committees making 

special party expenditures (section 441 a (d)), 

including the aggregate total spent to date. 

6. Listing of all persons or unauthorized single 

candidate committees filing reports indicating 

they made independent expenditures on behalf of the candidate. 

7. Listing of all persons or committees filing unauthorized delegate reports. 

8. Listing of all corporations or labor unions 

filing reports of communication costs on 

behalf of the candidate. 

9. Listing of all unauthorized single candidate 

committees registering support for or against 

a candidate. The listing also identifies the 

committee's receipts and expenditures for the 

reporting period covered. 

G Index: Index of Itemized Transactions 

for Each Candidate and 

Political Committee 

Itemized receipt and disbursement transactions 

are listed, along with the amounts of the transactions, keys to reports in which the transactions were indicated, and the microfilm location 

of the transactions. Five categories are represented: 

1. Individual transactions, including individual 

contributions and loan activity. 

2. Selected loan and loan repayment transactions, including loans from banks. 

3. Unregistered political organization transactions; that is, contributions to candidates 

from organizations which are not registered 

under the election law. 

4. Corporate refund/rebate transactions with 

itemized receipts showing refunds of deposits. 
86 

5. Transactions among registered candidates/ 

committees which indicate transfers and loan 

activity. 

Y Index: Special Inquiry 

This immediate access system permits direct 

video display or printout of selected information 

in the Disclosure Information System. It consists 

of between 40 and 50 separate programs which 

may be used to locate, retrieve or display individual items or categories of information. 
Appendix 87 8 

Clearinghouse Studies 

Continuing Reports 

Election Law Updates are a quarterly series, 

cumulative through the calendar year, which 

summarize all election code changes in each of 

the 50 States. The series is designed to provide 

up-to-date election code information to State 

legislators, court officials and election administrators. 

Election Case Law reports are a quarterly series, 

cumulative through the calendar year, which 

summarize election cases in the State and Federal courts. The reports provide updates of 

judicial developments pertinent to elections. 

Campaign Finance Law is an annual report summarizing campaign finance laws in each of the 

States as well as at the Federal level. The report 

also provides a convenient chart summary of 

State and Federal requirements. 

Election Directory is an annual report which 

summarizes the responsibilities of each State's 

chief election official, election board or commission. Names, addresses and telephone numbers of State election officials, offices and 

related legislators are also provided. 

Topical Reports 

Voting Systems is a three-volume report on voting equipment currently on the market. Volume 

I describes each device in detail and offers local 

officials step-by-step procedures for defining 

equipment needs and procuring equipment. 

Volume II summarizes representative State 

codes with regard to voting equipment acquisition. Volume Ill offers recommendations for 

drafting such legislation. 

Statewide Registration Systems 1 & 2 is a report 

on computerized Statewide voter registration 

systems. Volume I examines problems involved 

in implementing a Statewide system and offers 

suggestions for overcoming them. Volume II 

describes in detail the forms, procedures, outputs and variations on the basic Statewide computerized system. 

Contested Elections and Recounts is a threevolume analysis of the laws and procedures 

governing contested elections and recounts for 

Federal offices. Volume I examines those issues 

and functions within the Federal government's 

purview, and makes recommen~tions for improving the handling of contested elections at 

the Federal level. Volume II examines State 

issues and options, and makes recommendations 

for improving the State handling of such cases. 

Volume Ill summarizes laws related to contested 

elections in each of the States and at the Federal 

level. 

Ballot Access is a four-volume report on how 

candidates gain access to the ballot for Federal 

office in each of the States. Volume I identifies 

central administrative issues and problems and 

makes recommendations for improving the 

process. Volume II describes the administrative 

process in each State. Volume Ill details State 

legal memoranda and makes recommendations 

for improving the legal process. Volume IV 

briefly summarizes ballot access requirements 

for Federal office in each State. 

Mail Registration Systems 1 discusses problems 

involved in implementing a mail registration 

system. In addition to a general description of 

how mail registration systems operate, the 

report offers practical suggestions for overcoming difficulties. 

Bilingual Election Services is a three-volume 

report on providing election services in languages 

other than English. Volume I summarizes such 

services since 1975. Volume II provides a glossary of common election terms in English along 

with their Spanish and dialectical equivalents. 

Volume Ill is a manual for local election officials. It offers practical advice on ways to: 

identify the language problems in a jurisdiction, 

provide bilingual registration services and provide bilingual balloting services. 

Election Administration is a four-volume set introducing program planning, management and 

financial control concepts into local election 
88 

administration. Volume I provides an overview 

of election functions and tasks, and introduces 

the notion of a management cycle. Volume II 

focuses on planning, provides detailed task/ 

activity checklists and flow diagrams, and 

demonstrates how tasks can be assigned. Volume Ill introduces a chart of accounts and 

demonstrates how budgets can be prepared and 

costs monitored by applying the chart to each 

election function. Volume IV is a set of legal 

memoranda summarizing State code processes 

with regard to administrative and budgeting 

responsibilities. 

Studies Currently Underway 

Training Election Officials examines the problems and methods involved in training poll 

workers, deputy registrars and chief local 

election officials for election day. A "how-to" 

volume will assist State and local officials in 

designing effective training programs. 

Election System Statistics seeks a common set 

of performance measures that local election 

officials can use to evaluate their election 

systems. Manuals will identify relevant data 

collection and analysis methods. These statistics can then be used to improve effectiveness 

and efficiency of election services. 

Registration File Maintenance and Verification 

focuses on improving the accuracy of voter registration lists around the country. Product 

manuals will offer concrete guidance in adding 

to, deleting, changing and purging file entries. 

Emphasis will be placed on verifying these steps 

by both manual and automated file systems. 

Voter Education, Information and Outreach will 

examine and evaluate existing State and local 

programs as well as look into other forms of 

mass communication and message design to 

produce a set of manuals that will help State 

and local officials develop effective education, 

information and outreach programs. 

Regional Conference Program. See Chapter 2, 

"Assistance to Committees and Candidates." 

The Commission testified before both houses of 

Congress on several bills dealing with various 

aspects of campaign financing, election reform 

and election administration. Testimony presented by the Commission focused on subjects within its area of expertise. 
Appendix 9 89 

FEC Testimony 

Amendments to the Election Law 

Testifying before the Senate Rules Committee 

on July 13, 1979, FEC Chairman Robert 0. 

Tiernan, accompanied by Vice Chairman Max L. 

Friedersdorf, recommended several revisions to 

the Federal Election Campaign Act (the Act). 

(Since 1975, in compliance with statutory 

requirements, the Commission has made annual 

recommendations for legislative revisions to the 

Act.) In his testimony, Chairman Tiernan reiterated Commission support of the recommendations the Commission had previously made and 

emphasized three areas of particular concern: 

1. Simplification. The Commission recommended that reporting requirements be simplified 

to the greatest extent possible. The FEC's 

recommendations would reduce the number 

of required reports by up to 60 percent per 

election cycle, substantially alleviating the 

burden on candidates and their committees. 

Chairman Tiernan pointed out that fewer 

reports would promote fuller compliance and 

would probably result in fewer errors. Such 

simplification, he emphasized, was not only 

consistent with full disclosure, but would 

actually improve it. 

2. Encourage Party and Grass Roots Activity. 

In response to the concern that the Act had a 

restrictive effect on party and grass roots 

political activity, the Commission recommended "vitally needed" changes to encourage local volunteer efforts and to give State 

and local party committees greater flexibility 

in their campaign activity. The Commission 

recommended that State parties be permitted 

to make coordinated expenditures (2 U.S.C. 

§441a(d)) on behalf of Presidential candidates. These expenditures would be in addition to those now made by the national 

party. 

3. Clarification. The Chairman also recommended several changes which would clarify the 

Act's requirements on contribution limitations and the public financing of Presidential 

elections. Finally, the Chairman suggested 

changes to eliminate cumbersome procedures 

and reduce delays in the administration of the 

law. One of the recommended changes would 

allow any person subject to the provisions of 

the Act to have standing to request an advisory opinion. 

The Chairman concluded by stating that the proposed revisions were designed to make the Act 

more effective and less burdensome on those 

required to comply with it. (The FEC 1978 

Annual Report contains a complete discussion 

of previous legislative recommendations.) 

A number of the Commission's recommendations were incorporated in amendments to the 

Federal Election Campaign Act (H.R. 5010) 

passed by the Senate on December 18, 1979, 

and the House on December 20, 1979,1 and 

signed by President Carter on January 8, 1980. 

(Pub. L. No. 96-187.) 

Block Grant System for-State Election Offices 

On May 2, 1979, the FEC's Coordinator of State 

Disclosure testified before the Senate Rules 

Committee on S. 994. The proposed bill would 

authorize a $250,000 appropriation to the Commission to reimburse State election offices for 

costs incurred in preserving campaign finance 

reports filed under the Federal Election Campaign Act. 2 

In his testimony, the FEC's representative 

agreed with the Senate Rules Committee staff's 

recommendation that the bill be amended to 

provide for a block grant system of distributing 

the appropriation. Under the system, the grant 

would be distributed by the Commission according to each State's total number of electoral 

votes. The States would then be free to use the 

grant without the requirement of a detailed and 

time consuming voucher system. 

1See Chapter 3 for highlights of the 1979 amendments to the 

Federal Election Campaign Act. 

2See 2 U.S.C. Section 439 (the Federal Election Campaign Act 

as amended in 1979). 
90 

The recommendations for the block grant 

system were incorporated in the bill, which 

passed the Senate on May 10, 1979. The bill 

is currently pending action in the House Administration Committee. 

Congressional Public Financing 

On March 15, 1979, Commissioner Joan Aikens 

(serving then as FEC Chairman) testified before 

the House Administration Committee on H.R. 1, 

a proposed House bill which would have provided public financing for general election campaigns for the House of Representatives. At the 

Committee's request, Commissioner Aikens, 

accompanied by the FEC's current Chairman 

Robert Tiernan (serving then as Vice Chairman), 

testified on the FEC's experience in administering public financing in the 1976 Presidential 

election. 

In its testimony, the Commission took no position on the substantive merits of public financing for Congressional elections. However, the 

Commission: 

1. Stressed the importance of effective safeguards to ensure the integrity of the public 

financing system, including a certification 

review process and post-election audits; 

2. Recommended a repayment provision for 

situations where public money is certified in 

excess of eligibility or used for nonqualified 

campaign purposes; and 

3. Expressed concern about the administrative 

problems in enforcing expenditure limits. 

The Commission estimated, in response to a 

question from the Committee, that the checkoff 

fund would require an additional $35 to $44 

million if public financing were extended to 

House candidates. In additional testimony prepared at the request of the Committee, on 

April 10, 1979, Commissioner Aikens responded 

to questions concerning the assumptions on 

which the cost estimates had been based. On 

April 23, 1979, the Commission submitted 

another estimate based on assumptions specified 

by the House Administration Committee. The 

revised figures projected that the cost to the 

checkoff fund would be $27 to $29 million if 

House candidates received public financing. 

On May 24, 1979, the House Administration 

Committee voted not to report the bill out of 

committee. 
Appendix 91 10 

FEC Federal Register 

Notices, 1979 

Notice 

1979-1 

1979-2 

1979-3 

1979-4 

1979-5 

1979-6 

1979-7 

1979-8 

1979-9 

1979-10 

1979-11 

1979-12 

1979-13 

1979-14 

Title 

Presidential Election Campaign Fund 

and Primary Matching Funds (Revised 

Regulations on Presidential Matching 

Funds) 

Presidential Election Campaign Fund and 

Primary Matching Funds; Correction 

Presidential Election Campaign Fund and 

Primary Matching Funds; Correction 

Final Rule; Announcement of Effective 

Date of Revised Regulations on Presidential 

Election Campaign Fund and Primary 

Matching Funds 

Proposed Regulations: Presidential Election 

Campaign Fund; Federal Financing of 

Conventions 

Freedom of Information Act; 

Implementation Procedures 

Index of Multicandidate Political Committees; 

Notice of Publication and Availability 

Public Records and Freedom of Information 

Act; Correction 

Funding and Sponsorship of Candidate 

Debates 

Clearinghouse Advisory Committee; 

Notice of Hearing 

Contributions to and Expenditures by 

Delegates to National Party Nominating 

Conventions; Notice of Proposed Rulemaking 

Opinion and Regulation Index Available 

Proposed Regulations: Access to Public 

Records 

Transfer of Regulations to New Chapter 

(Reorganizing and Renumbering FEC 

Regulations) 

Federal Register 

Publication Date Citation 

4/4/79 44 FR 20336 

4/13/79 44 FR 22407 

4/30/79 44 FR 25193 

5/7/79 44 FR 26733 

6/6/79 44 FR 32608 

6/8/79 44 FR 33368 

6/12/79 44 FR 33797 

6/27/79 44 FR 37491 

7/5/79 44 FR 39348 

8/20/79 44 FR 48937 

9/5/79 44 FR 51962 

9/17/79 44 FR 53800 

9/17/79 44 FR 53923 

9/27/79 44 FR 55781 
92 

Federal Register 

Notice Title Publication Date Citation 

1979-15 Proposed Regulations: Presidential Primary 

Matching Fund (Eligibility of Candidates 

Who Exceed Expenditure Limit) 

9/27/79 44 FR 55594 

1979-16 Availability of Indices to Statements 

and Reports 

10/9/79 44 FR 58140 

1979-17 Proposed Regulations on the Funding 

of Candidate Debates 

10/12/79 44 FR 59162 

1979-18 Presidential Election Campaign Fund: 

Federal Financing of Presidential Nominating 

Conventions; Transmittal of Regulations to 

Congress 

11/1/79 44 FR 63036 

' 1979-19 Presidential Election Campaign Fund: 

Eligibility of Candidates Who Exceed 

Expenditure Limitations Prior to Seeking 

Matching Funds; Transmittal of Regulations 

to Congress 

11/5/79 44 FR 63756 

1979-20 Presidential Election Campaign Fund: 

Suspension of Matching Fund Payments 

to Candidates Who Have Received Public 

Funds and Subsequently Exceed Expenditure 

Limitations; Proposed Regulations 

11/5/79 44 FR 63753 

1979-21 Funding of Federal Candidate Debates; 

Extension of Comment Period on 

Proposed Regulations 

11/7/79 44 FR64773 

1979-22 Availability of Opinion and Regulation 

Index Supplements 

12/13/79 44 FR 72226 

1979-23 Multicandidate Political Committee Index; 

Announcement of Availability 

12/27/79 44 FR 76731 

1979-24 Funding and Sponsorship of Federal 

Candidate Debates; Transmittal of 

Regulations to Congress 

12/27/79 44 FR 76734 

1979-25 Presidential Election Campaign Fund; 

Federal Financing of Presidential 

Nominating Convention; Correction 

12/31/79 44 FR 77137 
93 

Notice Title 

Federal Register 

Publication Date Citation 

1979-26 Presidential Election Campaign Fund; 

Federal Financing of Presidential Nominating 

Conventions; Final Rule; Announcement of 

Effective Date and Deletion of Existing 

Regulations 

12/31/79 44 FR 77136 
94 

Type of 

Presidential Candidate 

Exempt Fundraising 

Spending Limit Spending Limit 1 

PRIMARY ELECTION 

Primary Candidates a. National Limit: 

$10,000,000 + COLA2 

b. State Limit: 

The greater of $200,000 

+COLA or $.16 x State 

VAP3 +COLA 

a. National Exemption: 

20 Percent of the 

National Limit+ COLA 

b. State Exemption: 

20 Percent of the 

State Limit+ COLA 

Primary Candidates Not Accepting 

Public Funds 

No Limit No Limit 

GENERAL ELECTION 

Major Party4 Candidates a. National Limit: 

$20,000,000 + CO LA 

b. State Limit: 

None 

No Limit 

Minor Party5 or 

New Party Candidates6 

a. National Limit: 

$20,000,000 + COLA7 

b. State Limit: 

None 

20 Percent of 

the National Limit 

Candidates Not Accepting 

Public Funds 

No Limit No Limit 

1 Any fundraising expenditures exceeding 20 percent of the spending limits for primary elections count against the limits. 100.8(bll21 ). 

(NOTE: Fundraising expenditures targeted to a State within 28 days of the State's primary election, convention or caucus are presumed to count against the candidate's spending limit for that State. 11 0.8(c) (2).) 

2 CO LA is the cost·of-living adjustment. The Department of Labor calculates it annually, using 1974 as the base year. 

3 VAP is the Voting Age Population. The Department of Commerce calculates it annually. 

4 A major party candidate is the nominee of a party receiving 25 percent or more of the total popular votes in the preceding Presidential 

election. 140.6. · 

5 A minor party candidate is the nominee of a party receiving between 5 percent and 25 percent of the total popular votes in the preceding Presidential election. 140.7. 

6 A new party candidate is the nominee of any party receiving less than 5 percent of the total popular votes in the preceding Presidential 

election. 140.8. 

7 Minor party and new party candidates entitled to retroactive public funding in the general election may spend up to $20,000,000 + 

COLA in private contributions and public funds. 141.2(b)(1 ). Minor party and new party candidates may also spend an amount equal 

to 20 percent of the expenditure limit for fundraising purposes and not count these expenditures against the overall spending limit. 

Any fundraising costs exceeding this amount would count against the spending limit. 100.8(b) (21 ). 
Appendix 95 11 

Public Funding 

Expenditure Limits

Maximum Amount of 

Public Funds Candidate 

May Receive 

National Party Spending 

Limit for Candidate 

Limits on Spending 

from Personal Funds 

50 Percent of 

the National Limit 

Not Applicable $50,000 

Not Applicable Not Applicable No Limit 

$20,000,000 +COLA 2 cents x VAP of U.S. 

+COLA 

$50,000 

Ratio of: 8 

candidate's 

public funds popular vote 

$20,000,000 average popular 

+COLA vote of major 

party candidates 

2 cents x VAP of U.S. 

+COLA 

$50,000 

Not Applicable 2 cents x VAP of U.S. 

+COLA 

No Limit 

8 A minor or new party candidate is eligible to receive a proportionate amount of the grant available to major party candidates 

($20,000,000 + COLA). Payments are based on the ratio of the minor party or new party candidate's popular vote in the past or cur· 

rent Presidential election to the average vote received by the major party candidates. 142.2 and 142.3. 
97 Appendix 12 

Assistance Available 

from the FEC 

Publications 

-- The Federal Election Campaign Act 

FEC Regulations 

Registration Forms 

Reporting Forms 

FEC Bookkeeping and Reporting Manual 

The FEC Record, monthly newsletter 

Campaign Guide for Congressional Candidates 

and Their Committees 

Campaign Guide for Presidential Candidates 

and Their Committees 

Campaign Guide for Political Committees 

Campaign Guide for State and Subordinate 

Party Committees 

Guideline for Presentation in Good Order 

Financial Control and Compliance Manual for 

Presidential Candidates Receiving Public 

Financing (applies to Presidential Primary 

Candidates) 

The Annual Report 

The FEC and the Federa/Campaign Finance 

Law, brochure for general public 

Clarification of the Law 

General Assistance. Candidates, committees and 

the public may obtain information and materials 

from the FEC's Office of Public Communications. Contact the Commission in Washington, 

D.C. at 523-4068 or call toll-free 800-424-9530. 

Advisory Opinions. For questions relating to the 

application of the law to a specific, factual 

situation, any person may request an advisory 

opinion in writing. Requests for opinions and 

the opinions themselves are made public. A 

requesting person who in good faith acts in 

accordance with the advisory opinion will not be 

subject to any penalties with regard to the 

activity in question. See 2 U.S.C. §437f(b)(2). 

Public Records Office 

This office makes available for public inspection 

microfilm and paper copies of reports and statements filed by Federal candidates and committees ( 1972-present). Any document may be 

copied for a cost of 10 cents per page for copies 

from microfilm and 5 cents per page for copies 

from paper files.* Other documents available for 

public inspection include: 

-- FEC Disclosure Reports 

- FEC Reports on Financial Activity and 

Disclosure Series (published indexes which 

consolidate and summarize data taken from 

the financial disclosure reports) 

- Daily updated computer printouts of 

various F EC indexes, as available 

- Index of Multicandidate Political Committees 

- Index of all Registered Political Committees 

- Index of all Federal Candidates 

- Index of Political Committees and Their 

Sponsors 

- Index of Sponsors and Their Political Committees 

-- Enforcement cases (index, closed compliance 

actions) 

-- Audits (GAO 1972-74, FEC 1975-present) 

-- Court cases (Buckley v. Valeo, etc.) 

-- FEC publications (Campaign Guides, FEC 

Record, Annual Report) 

-- Presidential matching fund certifications 

-- Presidential and Vice Presidential personal 

financial disclosure statements filed under the 

Ethics in Government Act 

-- Information on contributions submitted by 

Presidential candidates to establish eligibility 

for primary matching funds 

-- Hearing transcripts (upon request) 

-- General information (newspaper articles, 

studies on campaign finance by other organizations, informational handouts) 

*Anyone using such documents is reminded, however, of the 

election law's requirement that any information copied from 

reports and statements may not be sold or useiH:ly any person 

for the purpose of soliciting contributions or for any commercial purpose, other than using the name and address of any 

political committee to solicit contributions from such a committee. 

* U.S. GOVERNMENT PRINTING OFFICE : 1980 0 - 319-927