;.9M,i. 

. ·~ ,'; .' 
: . . ~ 

·.' . 

. _'._ FEDERAL: Eucrioi: Cox:mss10N, · ·. 

:•, , T Wa,hington, v,.o.,_ Jammry(11, 197?-r .. ·· .. -.· lion. THOHAS P. 0 NEILL, . . · _._ . . . . 

. ..·· ~<ft:J;,;'J>.t/ Re~aenta#Vea, · •. . •.· . . .. 

· .. · · Diu1f lh. SPEAXER: :In accordance .with § 316(e} of. the Federal · · Election Campaign Adi of 1971, as· amended, 2 U.S.C. § 4~8, tl1e Fed-, . ·-. ~eral Election Commi~iontransinit.s l1erewith a. set of separate·pro-. ·.· .. · ·. · ~ regul8'tions which comprehensively treat th11;t Act's -requirements, : . mcluding notably the requirements imposed ·by the 1976 Amendme_nts.:·. 

Specifically-, the encJ~ures include the Discl<?sure _Regulation, Pa;rts 

100 through 108, which elaborate on the registration and rep~rt1!}g· • .. _ requirements to ~hich all Fed~ra.l candidates ai"f: subject; _the. Ind~- · pendent Expenditure Regulation, ·pa.rt 109, delmeatinl? the cond1- . t!ons_of and restr~ctions <?n !nd~pendent ·exl?enditures; tlie _Contri~u­

/ · .·· .. tion and · ~xpen_diture Lnn~tio~ Regula.t1on, ~art 110,,: desc.r1bmg ·· · . ,· . -·: the Act's limiitat1ons on oontnbutions __ and expenditures by ,ca.nd1dates,:. -, .: ·. oommi~ and other·persons; the Compliance.Procedure.Re~tion,, · Part 111, which· sets font.b the Commission's procedures fo~ treating·an · ·: . : · · enforcement activity· the Advisory OP.inion Procedure Regulation, · Part 112, reflecting the Commission's advisory~opinion function; the 

Office· Account Regulation, Part 113, establi~ .reporting requirements for office accounts pursuant to 2 U.S.C. § 439a; the CoIT)ora.te . and Le.bor Organ.imtion Activity- Regulation, Part 114, which elab- ·. : , orates the righl and duties attendant upon participation in the elec- · -- : . · toral process by corporations, unions, mem~~hip organizations and 

. ' similar entities; ·the Federal <Jontractor ·Regulation, fa.rt 115, imple-'··'. . : menting the limitations on Federal contractor election activities; the : · ,. · · · . __ · .- .Convention Financing Regt!lation, Paris 120 through .125, the Presi- •· 

·. ·. dential· Primary Matching Fund Re~lo.tion,- Parts 130 _through 134, , ·and the Generil.l Election Public_ Fmancing Regulation, Parts 140 . through 146, which respectively reflect the requirements of eha:pters • 95 and 96 of Title 26, United Sta.tes· Code, with ~rd to public financing of national :pi,rty conventions, the presidential primarv proc­ ~ and· the ipresidentiaJ. ·general election. These proposed regulations · ( .. .· were publislied for oonunent in the Federal Regiater on )Iay 26, 1976 ,. 

..·· (41 FR 21572), on_ Jun!' 25, 19~6 (41 FR 26396) and ·on July~' 1976 · . (41 FR 28413). Emns1ve hean!}gS were h~ld by the CommI$1on on. 

June 7 through 11, 1976, s.nd on July 7, 1976.: : . • · : .. : .. . · . . ·. __ . This transmittal represents a resubmission of the. regulations origi­ ., :rially sub1J?.if:too -to the· Congress on -August_ 3, 1976, as supplemented 

.•. by ,tra.nsmittals ~d ·August 5, Au~ 6, e.nd August 26, 1976. ,ve 

. : now ~~t ·them with t'!o m<?<1incation.s:·a!}:&qaition· permitting 

the distnbut1on of voter registration m.a.tenals.1n· § 114.4{ c) (2) of the 

re~ation pettai~ng to oorporate and labor organization· aet.ivity,i . published for public comment on September 10;1976·(41 FR 38522) ;· 

• : a.rid a.mend~t?nt.s to :tJie discl~sure regulation_ ~- §§ 192.9, 102:10 and : . .. 104.2 pertammgi ~ the<spec1fic1ty of expend1ture>1nformahon-. re-·. . . . . (lf ·. . . 
C') 

... . . . 

. . ', ·, ·.· .· . 

· ported to the Commission, published_ for public comment on October . .18, 1978 ( 41 FR °'5952). · .. ·. ; . ..·. , . '. . . . lt is the Cornrnission~s hope that these restUiations will ~rovide per- • 

'SODS subject to this A.ct witli a readable and practical guiae · for elf~­

tive pa.rticipa.tion :in the Federal election process. We trust the.y will 

assist ~rsons subject to the .!.ct, &nd the public in ~enJ, in going 

forward with the campa.ign process in. a ma.nner in which. all ciiizens 

may have confidence. . . · . . . ' · Sincerely yours, · · ·· · · · 

·· ·.· . · ·.·. Vza.~o~ W. T.11oxso:.r, ·_ . . Chairman/or tM Fedn-a!, Electitm C't7ffl,fl1,U8io'fi. 

Enclosure. 

. ·-
, . . . . . . . . : . . . . 

~:<"J.ffO:r ~~· Ja1i11c.1no~ OP TJa DtseLOSCU · Bi:at"t.Lno~s, . P .un 100-108 · · I ~ ·5co · I l,,v.l . pe. . . . . . . · . · ·. 

· · ThtH re~tions implement sections_ -lal-158 of Title 2 of the 

·'r'nited Stacn Code. and Chcpters 95 And 96 of.,Title i6. C'nited Sc:ites 

Code. Contributions :md espendituns nquired to be disclosed under 

Title 2 and under these re~ations do not necesarilT count for limitA· 

tion pm-poses UD~er 9 °C ~.C. i .WlL . ._ . . • . • . · . · . niese re~atiom art ISIUed pumwit to the a.uthontT of the Com- · mission eodliitd in 2 U.S~C. J§ "3id(a) (S), "3S(a) (10) a.nd :?6 C'~S.C. 

13 9009(b) and 9039(b). ·. -·. . . . ·• . :· . ·. . · 

1100.2 . Candiclat~. ._ . . . . . ._ . . . Thare are three·· ,nn for An. indiridWll. to become a candid:lte: ( 1) · 

tab action-under si:ui la Tr: (2) ncein contributions or make t%l)endi- ·. 

~ or gin c~~t to inother person to . do so: · &!id f 3) t:iil to .: · 

disavow the ncnnty of another ~rson makuur contr1bunor.s or t%• 

pen.dit~ · after tlie Commiaiou has ,i!en the indindunl written 

notice. ,. · · . . · .. ·. · _ · . . Thi ·ant two methods follow.the statutorTl:ulg,1Ajl9 of 2 l:.S.C~ · . ·. , 4'31 (b) •· The third route to -become ,. ~ndid:ite is necessar.v to pre· 

nnt J?-?SODS from· tAkinJ unauthorized · :iction which . ff'Ould m11lt 

in An· mclindu:il meetini the stAtutory_ dennidon of c:lndid:,._te. If c!le 

. ) 

I . 
._40 

- Cornrnission becomes aware of such actirity, it can·give the inditdual · . an opportunt1 to disavow_ the activity. · ·. · · · · · · 

§ 100.3 Commission.. . . 

· This section notifies the.J>ublic ·of the Federal Election Commission ·s 

address to facilitate full disclosure.· : · :. . . .· . 

· . · § 100.4 Contribution. . . 

. . This de.finition parnll_ els the statute, 2 ti.S.C. § 431 ( e). Subsidiart 

terms, such as "loan," ''money" and "an,ihing or value," nnd '·usual 

and normal charge" have been defined to unplement the st:i.tute .. A. loan 

is a contribution only to the extent of the unrepaid portion. _ The donation_of costs of fundnising has.been added in the· reg,4ation, .~ has the e;cl~ion of legal a.nu.accounting services from the • deJinit1on of contnbution. · . A.. transfer of funds from a political committee · or Qther similar 

source to another committee or ca.ndidate is reporta.ble :is a contribu- . . tion. The statute says "committee or other source." Read literalk, this 

·would mean every contribution to a._politico.l committee or cnnciidate. 

would be a transfer. The definition bu therefore been· na.rrowed to 

sources similar to politicai committees or o·rganiz:u:ions. · -· · ·_ · "Personal services rendered without cha.rge~ is defined in the re2U- . lations. as services provided when the volunteer is not being com pen- -. 

· sated by an employer for the time ~ed fo~ C!lJJlpaign activity: . . · · .. _ Paymen~. for the I?Urpose of determmmg whet~er :in mcli:ndunl · · should become a. cu.nclidate if the individual does not· subsequentlv - become a _candidate is e:s:cluded from the definition of contribution .. This e:tception was mn.de so that an individual is not discourn2ed from · "testing the wa.ters" to determine whether his candidacy ~ -feasible. 

The rental value of the use of an individual:s residence is escluded 

from the· definition of contribtttion. This_ e:.tception was m:ide because 

l!'<IUiring .disclosure in the instan~ is truly 11 de minimia m~tter. · Computation -.of the value of n. residence would :u.so be exceedm2"lv 

burdensome to the cn.ndidate t111d contributor alike. ·. · ·_ .. - • · Also excluded from the definition of contribution is a donation to · cover costs of recounts tlild election contests, since, thou~h they a.re ·. . · related t_o elections, nre . not F edera.l elections :is defined_ by · the ~~c~. - • 

§ 100.5 Support. _ _ _ _ _ _ _ · ·. 

"Support" is defined in the regulations to meo.n the ·making· of :my -

contribution or tiny el:penditure on behnlf of a candidate or_ political · .. ; committee. . ·. - .· ·_ · .. _,.· --· · · ·. . . ·_ · · 

· § · 100.s . Election. · 

General election is defined to include not onh-' the normn.l ~o,tember · election.but also a.n election 'ff9here the result will cnuse.n.n individm1I · to assume· an office '\"acant prior to the· election -for whatever re!lSort. · · This will · cover·< situations like the Yew Hampshire Senate r:ice. an 

election which is the result of the death or resignation· of the .incum- ·. bent. a.nd·even the unusual cnse where an election to fill a·two a.nd.onehn.lf month term occurs on the same dn.v as the normn.l ~o~ember -election. · · · • · · · _ 

The .definitions under "election" .a.re desined to be neutrnl as ;between party affiliated and independent ca.ndid:\tes •. Genern.lly, each .. · candidate will . participate · in two elections : The primn.ry (for. inde- · 

, f ) . 

'.} 
· 41-

.•. pend~~ts~:-. comparable' ped?d during .which.he··or· she may ~ure 

'. ' a position on the general electionballot) and the general election. . . •· The· terms "run· off election," "caucus or convention" _and "special :. 

·election"· are ,defined in the regulations to facilitate impl~mentn.tion · -· of the statute. · · · ·· · · . 

· ·. Non-major party candidates are treated·the same asJndependent· 

r.andida~. This was done because non~major parties usually do not.' · . have actual :p~mary elections an4 spel}d a gr~a.t dea! of effort to ~cure·'. ... . a ballot position. Therefore., ~heir primary JS consi~ered to occur on . ; . . the last day for a ballot position 1n the gener~l election or on the date ·< · · . of the last party primary in that state, or on the ciate of their nomina- ·· · · • tion, at th.~ choice of the candidate. . .. · · · ·. . . \ i , . · ·. •- · 

§ 100. 7 ·: · Expenditure. '.-. _ . . . . . . . . . . _ . . . . . 

. . Th~ definition of ~xpenditure_par!lllels the statt1te, 2 U.S.C~ -~ ~31 ( f) . . _. As w1tbthe definition of contribution ( § 100.4), the s~bdefinitions of · · "payme~t," "money" and.''anything of value" have been ·clarified.· .... · ·. It was suggested that only the payment of interest.on the loan·be 

treated· as an. expenditure. and not the repayment· of the loan. itself. 

'For purposes of the limitatipns under2 U.S.C. fi 441a(b)., we ·agree._'.. 

N everthe]ess, for. purposes of tl1e · disclosure regulations, the creation· .. of an obligation to repay should consti~ute an expenditu~ and must 

be reported. The reportmg for~s provide for the repo~mg of loan 

repayments in a way to eliminate double-counting. . · . · ... ·. . . · The regulations provide that only a toritte,n; contract, promise, or · ·agreement to make any expenditure •is included in_:the .definition of . . · "expenditure.'!. This is· because such written pi9 omises are likely to be · fulfilled while oral commitments are not.· . · · : · . . ·. · : · : 

·. Specifica.1ly ex~luded from the 'definition of ''expenditure" are con- .. trlbutions ··by 9:n. individual fr(!m ,perso!lal funds to a political com~_: 

·m1ttee or candidate, to clear up confusion caused by the-fact,, tbat·a · contribution and expenditure are identically defined by the ~ct. · .. : . -_· . · . ·. Also excluded froni the definition are payments for. "testing the .wa-_ 

'ters" to determine the feasibiHty of candidacy.as under!l00.4(b)(l). · .· · Definjtions of terms such as "labor organization," ' electio_n," and 

'. "members"·are supplied to help implement 2 u.e.c. § 431(f)-(4) (C), 

and the reporting obligations are set out .. The regulation provides · • that.· all primaries are one election, and .that all general .elections are· 

one election, for purposes of t.he $2,000 reporting floor. It is the Commission's intention that ·spending by one subsidiary of a corporation,.·.·· 

: orlocal of a union, sha.11 not be attributed to the parent corporation_. · or union unlessthe communication was funded or other~ise caused by 

· .. thTh:ie~tal value of a~j~dividual's residence used for cam~aign- . · . related activities,. from riori-campaign funds for: routine lh·ing ex~ . .. ·. p~nscsJ>y .a. ca~didate, ~rid Jegal .. and accm~nting ser~ces ~re e:xcludE:d._ 

·.: A·defiri1tion 1s supphed for the phrase "m connection with the sohc~_ . itation of contributions'' as used under 2 U.S.C. § 431 ( f) ( 4) (I). It is . .. -:· provided that' fundraising expenditures need not -be allocated on a_;· · 

: : state by state basis except ":he~e the fundraising !s aimed at a p3:rticu-:·· · ,·Jar ·state and takes place:w1tlmi_ 28 days of a :primary, convention or: 

.··:caucus.: ·· · · · 1 • • • • 
. . . . ... 

42 

l 100.S · Federal office. 

. Follo.ws2 U.S.C. § 4:3l(c): 

'§ 100.9 ·-·--File. filed or filing. 

Time and place of filin2 are specified so as to ~ro,·ide for ·uniformity. The authority for sucli :i. regula~ion is 2 r.S.C. § -!38 ( :1) ( 10). · · 

§ 100.10 Identification. 

Follows 2 C'.S.C. § 231 (j)·. 

§ 100.11 Occupation. • 

This term is used in the statute: but is not defined in it. 

§ 100.12 Principal pince of business. 

This term is used in the statute, bt1t is not defined in it. _ .. 

. · 1· 100.13 Person. 

This definition follows 2 t:.s.c. § ..J:31 (h). 

§ 100.H: . Political cominittee. 

The definition of princi~nl cu.mpaign committee follows 2 t".S.C. 

( d). The four types of .polit1c:il committees are: · 

(1) princ1piil campaign committee; 

· ( 2) single candidate committee ; . · · · 

(3) multicandidate committee; and . · (-I) party committee. · · · : ·' . . . 

. The definition_ of principal cn.mpaign committee follows. 2 r.s.c. 

§ -13l(n). · · . · . _ · . .·. _ 

• .\. sin2le c:mdiclate commi~tee. is a political c9mmittee other than . :i .· 

principal committee ·,vhich supports only one c:mdidate. · The definition of ··multicandidate ~licical_ committee=': follows 2 

C'.S.C. j .Yla. (a)(-'). · ·_ . . · . · · .- . : . 

TI1e definition of p'artr committee is neede~ so that it can be distin.tntlshed from other multicandidate committees. 

fhe term ··nuthorized'' is used m· the .tct but is not defined in it. 

The term ··ntfilfo.ted" is used in the .!.ct but not .defined in it. This 

definition follO\l"S the a.nti-,rnr;>liferation. ln~"Uage in 2 .'C'~S.C .. § 441 

(a) ( ..J:) , and pa.rnllels the de . · tion in § 110_.3. ·. · - . . . 

§ 100.15· Connected organization. · _ . 

This term Js defined for purposes of the Statement _of Organiza~~oil~ 

c, r ~ c ~ , ··'"' ( b) ( =>) : . _ . ._. . · .. ""' .::; • • .:J ~uu _ .. :. • · · . · . 

§ 100.16 : .· P.olitic:il party. 

This_definition follows 2 'C'.S.C. § 43l(m). · 

·§ 100.1 r . X ational committee. . · 

This definition foilo~~ ~ C.S.C. § -131 (k). 

· ·. § 100.lS Sfote. 

. Tl1is definition follo~s 2 ~iS.C. § -:1:,·n (i) •. 

~- i00.10 ~tnte committef!. subordinnte committee. ~ . . . . . 

'This dt1finition identifies those pn.rty orgnnizntions responsible' ior 

party ncth-ity below the stnte~icle le\'91!1. ._· · . _ 

§ 100.20 · . ..tct. _ . · _ : . . · . · .· · 

This definition follows 2 u.s.c.· § -!31(o),' and includes reference· 

to Cha.pters 95 ilnd 06 of TiUe 26. · ~ : · ... ~ - ,. .. 
.43 . . 

.PART 101-CANDIDATE STATUS AND DEBIGKATIONS 

§ 101.1 Duration of candidate status. 

· Candidates, u.nless their personal rep.orting requirement is waived. · continue to report until all of their personal debts concerning their · election are extinguished. They mny terminate candi.date status by letter. · · · 

·§ 101.2 Candidate designations. . . 

After becoming a candidate an individual is r~quired within 80 da,s 

to designate a principal campaign committee, and campaign depositories. This is accomplished on one form, which also contains the 

waiver request. These designations are necessary to implement 2 U.S.C. 

§§ 432(e) and437b(a)(l). . .· · · ... If a candidate receives contributions _desimated for the gen~ral elec- _ tion prior to the J>rimary election, the candidate is required to use acceptable accountmg methods to separate these contributions. Candi­ . dates have the O{ltion, among others, of maintaining separate checking 

accounts or keepmg separate records and ledgers. . _ . · 

This section allows t.he receipt of contributions for the general elec.- -· tion prior to the primary election but creates safeguards ·which niini-. 

mize the possibility of general election receipts being commingled with ' primary election receipts. . · .. · . .. . . · 

§ 101.3 Waiver of candidate reporting. . 

This section provides for the waiver· of a candidate persona11y reporting if the candidate does not make expenditures or receive contributions. Tbis section is based on 2 U.S.C. § 436 (b) (1). The waiver be- comes eft'ective at the time the application is filed. - . _ . . . . 

PART 102-·· REGISTRATION "AND ORGANIZATION" OF POLITICAL 

CoHM.11 iEES 

§ 102.l · Registration of political committees. 

· Political committees are required to file a Statement of Organization 

with the Commission, the Secretary -of the Senate or tlie Clerk of the 

·_ House of Representatives, as appropriate, pursuant to 2 U.S.C. ~ 433 

.(a). Existing committees wh~ch have ~egistered·. with. the superv!sory · officers do not have to re-register. Relief hns been given to affiliated 

committees so that all affiliates do not have to list all otl1er affiliates. 

Only the parent has that r~sponsibility. 

§ 102.2 Forms and filing. · · · 

This section follows 2 U.S.C. § 433 (b). 

§ 102.3 Changes or correction in _infonriation. 

. This section follows 2 U.S.C. § 433 ( c). 

§ 102.4 Discontinuance of registration. 

TI1is section fol1ows 2 U.S.C. § 433 ( d). 

§ 102.5 Identification number. - _ _ · · _ ·· . _ . . . ·· · . 

Each political committee is assigned an ide~tificat.ion _·number . ~(! 

implem~nt t~e !ull discl?sure p~inc~pl!s of the Act, and· for ease 1n __ clearly 1denhfymg committees with sim~lar names. . _ . · . 

) 
§ 102.6- Federal committees and a.cco_unts; separ~tion of Federal and ·. non-Federal funds. . .. . 

· This section provides two options _for ~olitical committees which · 

· pa~icip~te in state _political cump~igns. They _can either report all 

receipts ~d u~nditures or estaolish a separate Federal committee · 

· and report only Federal activity. This should be. especiallv b·enefidal · . for state political party· committees: the bulk of whose· activity is . typically on behalf of no~-F e~eral candid~tes .. The seP.gation of 

funds prevents the ~ommmgling of contr1but1ons -whlch may be 

lawful for sta.te candidates but tinla "·ful for Federal candidates. 

§ 102.7 · Organization of political·colil.mittees. . 

This section follows 2 U.S.C. §~32 (b). · · . . . · · . · This section follows 2 U.S.C. § 432(a), n.nd ·p1·ovides for continuitv · in the offices of chairman and treasurer. . • 

· § 102.8 ReceiP.ts ~f contributions. 

§ 102.9 Accounting for contributions and upenclitures. 

This section follows 2 U .S.C. § 432 ( c) a.nd ( d) . · Subsection ( e) 

reco~es that, even with a. treasurers best eiiorts, some information 

cannot be obtained. In that case, the treasurer is to keep a record of 

the ellorts to obtain it. . 

§ 102.10 Petty cash flμid. . . . . .!. PC?liticu.1 committee may maintain ·n. petty -cash fund for makin~ 

ezpenditures 'of less than $100. This secti~n implements 2- U.S.C. . . ~ l . . . 

. . . ! . § 437b(b), .· . . •. · . '•" i · § 102.11 Designation of principal campnign committee. · . ·. ' ·i • This sectj~n _follows .2 -g.s.c. § 432(e), a.n4·_requires t~at a.~rin- ... 

' . cipal campaign conmuttee de.fined _:is- n. political committee, must 

' I ·. register ~d rep~~- The . ph~ "occasional.. ~la~e~ or incident:il . 

. . •.. ~af J!~ ~:'e!tio~e statute is defined, and is limited to $1,000 per . . . 

. § · 10-2.12 . Authoriz9:tio~ of political committee. . · . · . 

This section ·provides a.. procedure for authonzat1on as referred to 

in 2 U.S.C. § 4:37b ( C) • . 

§ 102.13 Yotfoe; solicitation of contribut~ons. 

This section follows 2 U.S.C. §435 (b). 

·. § 102.14 Records; retention. , _ . ·. · . . · 

. . This section provides a·cross-reference for conT'enience . 

.. _ § 102.15 Segregated funds. . . . · -

.· This section_ follows 2 U.S.C. § 4:32 (b). 

Pa-r- ·103-C..utP.UG~ DEPOSITO~ 

§ 103.1 Yotification of the Commission. . . · · · · . . . · 

This section· :provides that the Cornrnimon be notified of the· cn.m· 

paign depositones which are designated pursuant to § 101.2 and § 102.3. . 

) 

i :: 
45 

§102.2 Depositories . . 

· Th_e section J.>ermits ol!lY ~tate·and ~ationally chartered banks·.to·be·· 

used as ~ampa1gn ~epos1tor1es as required by 2 U.S.C. § 437b (a) ( 1) 

and (a) (2). . . 

§ 103.3 Deposits and expenditures. 

All contributions must· be deposited in the appropriate campaign 

depository within 10 days. All expenditures must be made by chec;k . drawn on the appropriate account in the depository except.that expenditures for $100 or less may be made from a petty· cash fund . . Subsection (a) follows the requirements of 2 U.S.C. § 487b(b) (2). 

The 10-day deposit requirement was designed to encourage the p~ompt 

disposition of contributions rather than permit "stale" checks to be kept 

lying around or lost. In addition, some large campaigns have used the .. . date of deposit as the date of receipt for reporting purposes. The 

10-day requirement would mean reported receipt dates would be:dose 

to actual receipt. . . . · 

. . Col}tributions of q_uestion~ble legality shall eithe~ be r,etume~ ~o the . contributor or deposited while the treasurer determmes the Yahdity ·of 

the contribution. This subsection was added by the Commission at the . 

sugg~stion of .m~~y c'?mmittees ~ a guide to the proper handling of 

questionable contributions. · . . . . · 

§ 1_03.4 Vice-Presidential candidate campaign deposities .. · 

This section follows 2 U .S.C. § · 437b ( c). · · · 

PA~T l~RErORTS BY POLITICAL CoHHI'l'TEES AND CANDIDA'ID 

§ 104.1 General. . . . . . . . , . . . 

Quarterly reports are required by political co~ttees until all debts . · 

and. o~ligations are extinguished an<l a No~ice of. Terminati(!ii is ft!~.­

Candidates must also contmue to report until all debts are extmg~nshed· ·· unless a waiver is granted. Quarterly reports are required only if ·con- tributions exceed $1,000 or expenditures exceed $1,000. · ... '. · . Quarterly reports are ~uired from candidates and their committees · . · in a non-election/ear only if contributions and expenditures together . exceed $5,000. I the candidate's authorized committees receive or · .· expend in excess of these amounts, the principal campaign committee · must file a consolidated report. · '. · · · . - · . 

The reporting of debts and obligations is ~uired by the.Commission· 

under the authority of 2 U.S.C. § 484(b) ·(12). · The quarterly report · exe~ption i~ r~uired under .2 :u.s.C. § 484(a).(1) {p). 'I:'he ~uire~ . ment for notifying the Comm1ss1on that a ·comrmttee IS exempted-from 

filing quarterly reports is to _prevent. the committee from -lieing con­ . . sidered in violation for late filing. · The Commission otherwise lias no 

way to know the committee is ex~mpt. 

§ 104.2 Form and content of reports. .. . . . . . 

· · This section: generally follows 2 U.S.C. § 434 (b). Subsection (b} ( 1) 

requires a statement of cash on hand, to provide a starting point for 

each report .. S~bsection (b) (3) (ii). is f-? prevent !i recurrent problem: 

when committees reported all contributions-not Just those over $100- the inclusion of large numbers of the small contributions made it more 

)_ 
:_ 

, difficult to isolate large contributions. R~portsma.y conta.in:aUcontribu- · 

tions, but the over $100 contributions must. be :on a separate schedule 

from the under $100. . . . . . .. . . . . . Subsection (b) (7)(i) makes it explicit that campaign fund;;·may be· 

taken out of depositories for.investment purposes. The inte1~est or other 

proceeds from an investment must be reported. . ··. , .. · · . · .. · . · Subsection (c) (1) provides for consolidated repo~ts by principnl· 

campaign committees. The consolidation win include· the candidate~s · · !eport ( unless waived). and the reports of aut.horized committees. · While the statute does not specifically include the candidate's report . : in the consolidation, the Commission believes that it would be best to 

r include it· since the expenditure· limit can be most easily tracked that . . ·l wav by the principal campaign committee ... · · .. . . · , . .. ·. · · . · · Subsection ( c) (2) sets out an exception for the consolidntion re- . quirement, for the lO~day pre-election report only. Because principal 

campaign_ committ0E;s must file the co!lso~id_nted report on the same day · as authorized commit.tees must file with it, and because there nre only 

five days between the close of books and the date of filing ( three daJ:s · · 

if the. ~eport is, !11aile~)? the Commissi~n is permitting the. principal . , . campaign committee, 1£ 1t chooses, to file only a summary sheet. on the · 10th day, and a. complete consolidated report five· dn.ys b~fore. the ·elec-: 

tion.· The Commission believes this meets the requirement. for public.': : 

disclosure and relieves the committees of a difficult bu1~de11~ , ; 

· . § 104~3 ···. Disclosure of receipt and consumption of -in-kirtd · consm11p- · .. · · 

,· , · · .tions. · .• · '· . , ; · . ·•· .· · · .. · · ,· . · .· · ·. ·. . : ... 

, ·. This, section prOlides for the valuation and disclosure of in-kind ·•. 

contributions, (contributions other than cash or c.heck). Tbevaluntion . · is determined by the usual and normal charge at the time of the con- . ' . . tribution. Sine~ ij 100.4 (b) ex.clu~es certain kinds !)f in-kind donations , · · · from the defimt1on of contr1bubon, those•· donations· need not be re- . ·, · 

ported. ·· Furthermore, in-kind contributions need not be separately ·, 

· : listed in reports if the a~greaate value is less than $100 from a single · contributor. The regulation 8istinguishes between goods and services, 

and contributions to be liquidated, such as stockor,nrt objects.· 

§ 104.4 , Filing dates. · , . . , . . . . . . . . . , . 

. · All political committees and candidate's are required tofiJepre-elec- _,, · · :tion, · post-election aiid ·quarterly. reports, and an aimunl report when, 

•. ·.i:p~!f ~iddt;orlpttallfa\rro;r~~~iitfu~~~~::i~~~~:~f ~a~······· 

didate or a detail~dreport, as provided forin § 104.2(c) . .Authorized . · political committees must file pre~ and post-election reports with the : . . .· principal campaign committee o~ the Qlerk of the House or theSecre~ 

·. • ··. tapr~tf!l:t!':!~de for pre-.and po~t-eleCtiOn reporting b~- th?se po­ litical co~1mittee~ not repo~mg monthly who ~1nke contr1buhons to . Presidential candidates. , , · · i . The filing dates a.re required by the statute, 2 U.S.C. ~ 434: (a). except· · ;that this section requires that the 4th quarterly report be fi)ed by Jan-·. 

uary 31 · instead . of J ariuary 10 . for electioμ years even· though . a close , reading of the statute would ,set it for J"nuary.10. Congressional in­

.te~t seem_s to l>e for January 31. This w:as done.at the request of manv· 

i 
47 

witnesses -who wanted ·the 4th quarter.due ·date to coincide· with the· ·. annual 1-eport due date. : : . • .. · . ·. .· · · . . .. . ·· ·· · -· · · ; ·•. · · ·.· .. 

·· .. Under § 104.4 ( e), contributions · of $1,000 · or . more· received· subse-.· · quent to tlie 15th day, but more than 48 hours before an election, must· 

'. be specifically reported, but only if the $1,000 was given for that election. The Commission felt that a strict requirement of specially reporting the $1,000 received ev~l!- if it W!l5 for a. diff ere~t election, wou)d 

place an unnecessary reporting requirement on C8lld1dates. or commit.;. · . tees involved in presidential primaries. The section further provides· · for ~onthly reporting ~der 2 U.S.C. § 434(a) (3) in certain cases in~· 

stead of the usual reportmg dates. - . . Monthly reporting is _mandatory for Presidential c.andidates and · their committees, but is optional for all other multi-state committees. ·· . · This provision would greatlI ease the reporting burden during the pri- · . maries since the number of pre- and· post-primary election reports-·•··· . otherwise required could_total 56. · . . ·· 

§~ i04.5 U nifortn reporting of contributions. 

. This provision, which· requires reporting the .identification. of all 

individuals by whom a. contribution over · $100 was made, follows 

,~·U.S.C. § 434(b) (2) •. · ... · · _· · 

· § 104.6 Uniform reporting of expenditures. · · ·· 

This provision, which requires reporting the identification of all individuals to whom an expenaiture over $100·was made, follQws 2-U.S.C. 

,· ·-. § 434(b) (9). · . . · . · · . · ~ . 

. § 104.7 'Allocation o1 expenditures among candidates. . . . ... 

· '. . _· : This· section inf()rms committees .of their need · to allocate expendi~ · · . tures ma.~e for the purpose of supporting more than one· Federal _ ,- candidate. · · · · 

·· · _· § 104.8 Contiiiuo~ reporting~£ debts ·and obligations. ·· · '.. '. . 

. . . . Debts and obligations which· remain out.standing after the election·. ·. · 

. shall be continuously reported on separate schedules, with explanation, 

'.untHextinguished,under2U.S.C.§434(b){l2) . .- ·•-·· ·. · · '. · ·.· . ·· · : -A debt _or obligation_ to make an expenditure_ of $500 or less is re.:.. 

quired to oo· reported at the time of payment or no later than 60 dnvs · after the incurrence of the debt or obligation, whichever comes first. ·.A. : 

loan of money or debt or obligation over $500 Js reported as an ex- · penditure as of the time of the transaction. This section is designed. 

to prevent unnec.essary duplication of reporting operating expendi.:. 

::tures, i~e., once as a debt when incurred and again· as an ex·pendit.ure .. :.when paid, for small obligations.'•. .. ' ... · :. . .' . . 

· · §· 104.0 Waiver of reporting requirements~ · ·· . . . , . . 

. The Commission may waive under. 2 U.S.C. f436(b) (2) at its dis-·, ... · cretion the reporting requirements of political committees that 1>ri- . marily support persons seeking State orloc_al office and:do not operate.·· 

inmorethanoneState. : , ·=' '. ·". .· ·. ,: ·' ' . • :·. ' . :· .. · ··: · 

§ 104.10 , Political committees; cash on hand. . . · .· .. _ ... ·. .. . . . . _.· ,. 

· The .first report of a commi.ttee. fo!lowin~ojts ~egistration. sh.~U,tisclose the cash on hand at the time of its registration. In order todeter- :: 

:mine ~he legality ·ofthe source of the cash on·hand,.it is assum~d, that , 

... 
48 

the cash on h~nd re:presents those .contributions most recently recei.ved 

by the co:mnuttee, i.e., .the "first-in, first-out" method of ·accountmg. 

This provision is necessary, especially for political committees, which 

may register with substantial cash on hand. · 

· . § 104.11 Members of Congress; reporting exemption. 

This section follows 2 U.S.C. § 434(d), and proYides the reporting 

procedures. If a member is no_t a candidate, no repQrti_ng is required. 

§ 104.12 Formal requirements regarding reports and statements. 

This section requires -the ~individual resvonsible for submitting a • report to sign it. This prevents the shiftmg of responsibility onto 

others who are not required under the Act to ao the actual filing. 

The reporting person must retain all records relatina to the reports 

that are filed; and the rep.orts themselves for ·a perioa not less than 

three years from .the end of the year_ in which the. report .is filed. 

Under 2 U.S.C. § 455, the statute of limitations for crimmal prosecn- - tion is three years. Accordingly, to prevent the ·destruction of possible _ evidence and to assist in the routine auditing of a report, sμpporting 

records a.re required to be kept for three years. - . _. -The acknowledge~ent by the Comriussion of. the receipt :of any report does not · constitute any approval of the contents of the report. . The responsibility for the timely filing ?f reports an? thei~ accuracy 

1s placed upon those persons who are required to submit them, namely, 

the treasurer of a political commi~tee, or a candidate or. other person - ·· · -·as appropria~. _ . - . · --_... -_ . . -

§ 104.13 · Sale or use restricti._on. _ _ 

This section interprets 2 U.S.C. § 438(a}(4), prohibiting the sale or _ use of information on file with the Commission, Clerk, Secretary or a : 

state officer. It defines commercial use to exclude usa in news media 

and books. 

PART 105-Doc~NT FILING 

- § 105.1 Place of filing; House candidate~ and committees.· 

The place of filing for House candidates · and their· principal. cam­

·paign committees is the Clerk of -the House of Representatives, as 

custodian for the Commission, under 2 U.S.C. § 438(d) (1) (.A). 

§ 105.2 Place of filing; Senate candidates and committees. 

This section provides for sim~lar filing by Senate candidates and 

their committees with the Secretary of the ~enate, under 2 U.S.C. 

§ 438(d) (1) (B). . • 

§ 105.3 · Pl~c~ of filings; ·President candidates· a~-d .committees ... 

This · section provides that Presidential candidates and their principal· ·campaign· committees file reports and statements with the 

Commission. · · · .. 

§ 105.4 Place and ~ling; committees and others. 

· . This section . provides that political' commit~es ( other than candidate's committees) which· only support· House candidates file with 

the Clerk, and those supporting only Senate candidates file with the 

Secretary. . . . - . ) 

) 
~ · All other political committees, and persons · making i~dependent 

contributions and expenditures, file _ with the Commiss!on. . · This section elimin9:tes the multiplicity of filing by political com- .. mittees which has occurred in the ~t, in some cases requiring filing 

in three places. Under this regulation, -committees which support _ candidates for more than one Federal office file only with' the Com- . · . mission. · 

§ 105.5 Transmittal ·of ·microfilm copies and photocopies of original 

reports fil~d. with the Cle_rk and the S~nate Secretary to _ tne Comm1ss1on. · ·· · 

• _ This section, which requires the Clerk and the Secret~!9Y to furnish · microfilm and photocopies of reports and statements, will permit the 

Commi~ion to carry its statutory duties to _enforce the statute t2 

U.S.C. §437g) and to make documents available for public inspection 

and copying (2 U.S.C. § 438 (a) ( 4)). _ -. _ 

The Commission, tlie Clerk, and the Secretary will work out 

mutually agreeable procedures for, implementing these sections. 

"PART 106-ALLocATION OF CANDIDATE AND ColDllTI'EB' - Aru·1v1T1ES 

§ 106.1-. Allocatio~ <?f. expenditures among -·(or l;>etween) candidates· 

and act1v1ties. ... · -

Expenditures made on behalf of· more than one candidate· are to be 

allocated between the candidates ~ased on the proportion of the benefit _ -which each can reasonably be expected to denve. For, example, a bill- . board which advertised Senate candidate Smith and House candidate - -Jones in equal prominence should· be· allocated 50%-50%. . · __ 

Authorized expenditures by e, committee or candidate on behalf of 

another candidate are reported as a contribution t.o the autho~ · candidate. However, expenditures by political parties under 2 U.S.C. 

· § 441a ( d) will only be reported by the party. . . · · · The administrative expenses and other non-candidate related ex-. 

pelises of a multicandidate committee do not have· to be allocated 

amo~ candida.teS; a.s long as they are not made·· on behalf of a specific 

candidate. Where such a committee .has both Federal and non-Federal . nctivitv, administrative expenses bave to be allocated between the ·· t.wo activities on a reasonable basis. · · . 

§ 106.2 Allocation of expend_itures_ among sta~es by candidates for · . · presidential nomination. · . · · · · 

This section covers the allocation of expenditures of presidential 

candidates by state. Generally, ex~nditures must be attributed to the 

individual states based on the voting age population likely t.o be influenced by the expenditure. There are two exceptions: (1) expendi- - tures rela.ti~ to a national campaign headquarters need not be attribute4 to individua! stat.es a~d . !2.) expendituris fo~ travel between · states need not be attributed to mdividual states. · · 

) 
. . 

~,,_. _· ~ • .. ~ ............ ---·· ... -..... _____ ·----- - . __ ._.· .• -~- _:__~.:.-·..:. . ....::__.!,_·_. __ ~ •• - ...... 2;,_ __ f ••• :.·.~--IP. .. · ... ·-···· .• ~ ....... ·-·-- ........ -

50 

§ 106.3 · ..Uloca.tion of expenses between campaign a.nd non~ampo.ign . · related travel. -- - ,. . · . 

. ..ill travel _paid for by a. cn.ndidate's a.uthorized committees must be 

reported. · . · . · . 

- .!. ca.ndida.te's ca.mpaip-related tra.vel is reporta.ble,-no matter who 

pays !or i:t •. ,,nere a. .candida.te makes one c_:unpaign-rela.ted appe~rance m a. city, the tnp to ~at city is considered ca.mpaign-refated . . Incidental con~ts on an otherwise non-ca.mpa.ip stop. do not make 

the stop campo.ign-related. For e~a.mple·, if a. candidate m:.kes a. non- · p_olitica.l speech to & civic association. luncheon, a.nd on the wa.v out 

chats with a, few attendees about his upcoming campaign, that con-· 

versation would not convert the appearance into a ca.m~P.-relli.ted · event. However, if d~ the course of the Sl)eech the c:mdida.te asks 

for support, tha.t would convert a.n otherwise · non-campaign e~ent 

.· into one which is ca.mpa.ign related, and m>uld require that t_ravel costs 

be allocated, and reported as e~enditures. · .· 

Individuals other than c:in<lido.tes have to alloca.te their mi:s:ed 

camP.aign(non-campaign t!avel expenses ~n a reaso1:10.ble ba.sis. If o. 

candidn.te·s spouse Anel children travel with a, candidate but do not 

campaign, their u~nses are not reportable as expenditures.·:· . · 

Expenses incurred by. a e:1.ndidate for the Hous~ or Senate ·for tr:n·el . to or from his sta.te or district and Washington·, D.C., are not report- · able u nn e:s:penditure unless paid from a co.mpaign··account. . Candidates using. a. g<?vernmen t con veyanc~ . for cn!Dpaign travel.· 

must report as a.n expencliture the comparnble commerc1:u rn.te for ~he 

. travel. For candidates required by law or by nationnl security to_havc· 

·l special sto.fl and ~uipment, the cost of that truyel is e:s:cluded from 

? report:ible e:s:penditures. 

Pa-: 101-Co~°TE.~oN REJaorrs . 

· § 107 .l_ Reports by liunicipal and Privnte Host Commitees. 

This Section follows 2 U.S.C. § 4:3,. · 

. § 10, .2 Reports by politi~nl parties. . . . . . 

· This section follows 2 U.S.C .. § ~7 but exempts the· reporting re..; 

quirement for state nnd subordin:ite partv ·committees th:it spend funds . ·for delegate n.nd n.lternate travel e:s:perises and- for .~ertnin e~ents at 

the convention such u receptions. The Commission belie,·es that these 

types of e~penditures were not intended 'by the_ st:rtute to· be reported 

under 2U.S.C. § 4:M. . . · .· . · . 

§ 10,.3 Convention report; time and cont_ent of-filing. : 

·. This section requires the convention- report to be filed no Inter thnn 

60 davs after the convention but not Inter than 20 cln.~s before the 

general election in a.ccord:i.nce with 2 U.S.C. § 437. If there is finnncio.l 

. n.ctivity subsequent ~o tbfs report. quar~erly re~orts :1.re required to 

reflect those transactions m order to obtain full disclosure. · 

§ 107.~ Convention e:s:penses; definitio_n. . = .. 

-This section merelv refers to Part 120. of the· con'\'"ent.ion finnncin!! · proposed regula.tion; which ·cont~bs o. deto.iled definition of con,en:. 

tion e:s:penses. . , · · . ·. · ~on:: The reportin2 requirements for con~entions receh·!ng Federril 

funds under 26 ti.S.C. § 9008 n r<' tre:ited in Part 124. - .. · 
51 

PART 1()8...;..;.FILING CoPIES OF REPORTS AND STATEMENTS WITH STATE 

. OFFICERS 

§ 108.l Filing requirements. 

Follows 2 U.S.C. § 439(a.).· .. 

· § 108.2 . Filing copies of reports by Presidential and Vice-Presidential · candidates. · · .: . . · 

-· This section .. -hasically follows·2 U.S.C. § 439(a) (1) ·except that the 

copy of reports need be filed witlt the appropriate state officer on]y if 

an expenditure is made in that State during the reporting perlod. This 

eliminates the unnecessary filing of reports -with a state· which, al- . though at one time may have received a copy of a report, has no real . concern in receiving other copies of future.reports where no _expendi-· 

tures are made in that state during those subsequent reporting periods. 

§ 108.S Filing copies of reports by other Federal candidates and . . · committees. ' · .. · · · 

This section follows 2 U.S.;C. § 439(a) (2).: ·. _ 

§ 108.4 F. il!n~ copi_es of reports by committees supporting P~t~en- . · . tta1 candidates. .. . . . . - · 

. This· section permits committees which support Presidential candi- ·_ ·. dates, other than the Presidential principal campaign committee, to 

file a copy of their reports onlyin the state in which they are headquartered and iii which the recipient committee is headquartered. This · pre,~ents committees which make one contribution to a Presidential 

candidate from-having to file in every state in which th~ Presidential· 

can~idate files, whieli would serve no public purpose. · _ . . . 

§ 108.5 Time and manner of filing ~opies. . . , 

. This section requires· the filing. of ·a copy of the report with the 

appropriate state at tl1e same time the original report 1s filed on the · Federal level. · · · 

. . § 108.6 - Duty of State officers. 

This section follows 2 U.S.C. § 439 (b). · . 

§ 108.7 Effect on State law. . . 

This section follows 2 U.S.C . .- § 453. Specifically, Federal law·s1ipersedes state law concerning the organization and registration of political committees supporting federal candidates, disclosure of ·receipts 

and expenditures by Federal candidates and committees, and · limitations on·contributions and expendituies.regarding Federal candidates 

and committees. · · · · However, the ·Act does· not supersede state laws concerning the· 

~anner o_f qua;Jificatio_n -of candidates, ~ates and places of el~tio:f!-s, · voter registration, votmg fraud or candidates' pers011al financial disclosure ~ot superseded by Federal law. These types ~~ ·electoral ·matters are mterests of the. states and are not covered· in the _act. 

§ 109.8 Exemption for the District of Columbia. 

Since all'reports are filed with the Commission, Clerk or Secretary, · filing copies with the District of Columbia· government seemed to be a _ · 

needless burd~n. . . . . . . . · · . . 
. ' 

· ·/ E~:r~nos .\n Jci1a1c-lnoY roa.'.Pair.-10, · L~.uz:.-z>t.~ 

!, . · .•. · ·~.· ... ·.·. . · I 109.1 ... DlbitiODL . . · .· 

' .. ·.100 •. 1.'Thil dtbidolL pe1ral11ls ! t:.s.c. ·, "31 (p) with additicnal . ; laft1UAP. f~m ,udtl,y- Y. Val,o ~,princ that tht_t~tncliturt hf 

; co~wu~an m na&un. -~• Act 11 impltmtnttd · by d16ninr ttrms 1 

, ulld ID thi1 atatuto" Wn,aon. · · · · . · · · ·· 

·• · "Person" ii cltftziid ~ ~rd:anc1 with ! C'.S.C. I -131(h). · .. 

"E~rmly 1dTOC:1t~· 11 de!ntd ~nsistent with :he Supnmi C ourt m BuckltJ ,.. Val,o. . . · · · · . , . ·. · . · 

. ~Oearl~., idtztti4able:, is de8ned consistent_ with both· Buc!·Z,,· "· -~ . r' al,o md. t: .:,.C. I '31 (1). .· . .· · . . . · . . ·-, 

~--.-. •. -·-·-·.. ···~··--- . -. ~---~- --- ···-~--- .. ·.·---~ ,• ·-·-~-~··. ••··· ~.,;.. - -......... ··-. >-1.:t.··· . 

:: The dehiti~ of "ma~e. wi~ the cooperation' or with tht. prior . : CODHDt of, or in consultAUon."1th. o~ at the ~uat.or su1;t1t1on of. ·. · · ~ canclidAtt or an7 apnc or auth~tjzed co~~~. -of the canclidAte!' · 

implemtilts . the statute _by descnbm, . 1~cally arn~m111.t$ _ or 

conduct.that rtm0\91 ch• mdtpendent narun of the espenclitu~. : 

Th• dta.nition. of '-apncy'' unputa &11nc,- _pow~r not only :o person.'! actwulv -a.achorind, &a, :Llso to persons who Appe:ir to b:il4'e ,uch · ' ~wer: in. accordance with ~neral princieles of che 1:iw of 11=enc\" 

.. 11<>9:l(d) parallels 2 u.s.c! .&I "'1a(a) ( •) (C). HoWIT'tr, suc'h ei- . ptndituru :could be JDAde ,nthout the k:nowledp or control -,f tbti · candidate, uid this section a.iects onlT the person m11l;n1 the upencU- tun abltnt candidate cooperation or consent. . . . . ·. ' . . 1109.1 ( •) clari!es tlie . limitation on polidciil committees with 

respect to independent upenditunL . _ · . 

I 109.1 lttportmr. . . . I 109.!.(a) This section follows 9 U.S.C. 4'M(b) {13). It requi~ 

political committees to npoit tach inde~ndent es~nditure duu C?~~ _· 

c:eeds. 8100 u well as the total of unitemized •~~nclit\tres. · These re-· 

ports, which are 8.led d~ a period in which: such inde~nuent 

ez~nclituns is made, must contain the aniout aild date of the e;t· 

~diture. the D&llll of the person to whom it was made~ the nnme ~nd · otllce soqht by the candidate, and whether it, wu in support of or in · op~tion to such candidate. ,. . · . . . .. . · . . · 

§ 109.g Cb) nus section follows~ t" .S.C. I "'34( e), nquirin~ a per!On .. . to report ma manner simiJar to :L politi=l committee when indeper.d- · .... · ent upmditures and· contributions toward independent espenditures 

ann,at:e more than $100. . . · · . 

S 109 . .J: This action follows i U .S.C. § 4"ld. · . . . . . . · I 109.5 · This Metion P-rorides for tlie ~,tepo~ of. '-independent -.contribationa" 1mcl1r ! U .S.C.143'( •) .. · . . 
. NOTE: 

E&J for 

09 . . . . 

ExPLANAT!O~ .um JtnrrIFIO.ATION, P.ABT 110 Coxamo<mo1' ..um · · ·Enzxom:ru LDlrrATIONS AKI> Paomarmma . · ... · . I 110.1 . 

Thi$.seetion covers the -limitations on contributions by persons, other 

than multieandidate committees.· It follows ~he ~tat~t~ry provisions in 

2 U.S.C. § 44:la(a). (1) on the amoμnts which· md1viduals and other . persons may.contribute to a camp~ign, to party committees, e.nd to anv. 

other po]iti~a] committee. Where needed, Specific definitions haYe been 

ndded" in particular to make it clear. that each of the national committee, H~use campaign_ committee and Senate campaign committee-of·a 

~~rty may_~iie up to the .$20,0~ contri~utio~ li~it~tioμ from a. 

smgle contributor. _ . . . : . . . · - · · . . · . This -sect~on. also· provides· that .contributions made _to· committees 

whieh ·themsekes are making independent expenditures are subject to· 

limitations in this section on contributions to c-ommittees. This section · also makes clear the treatment of sucb contributions as: those from 

partnerships. tl1ose to dual Federal candidates, those to retire debts, 

and those related to spouses and minor children. It also provides that 

.f(!r con~ribntion limit!),tion· purposes an election occ~~.even if a ~anclidate 1s unopposed;.1t .sets a-date for the cutoff.of.pnmaey recetp~ 

.and t.he be~g ·of general election receipts .in .the case where, be~. 

cause.a ~m<lida~e is unoppose~;_no actua~ elec.tiQn is·held •.. ~ .. ·. · · · 

§-t 10~2 Confributions _by multica~did~te.' colmllittees .·· · . 

:rhis ~ctio~, ~l"ering ~ u~s.Q. § ~1~ (a) (2) -li:111its the co~~ribu~_ions · by mnlhcand1date eonun1ttees, makmg 1t clear _that a mulhcan~1date .. committee may cont~~ute ~p to ·$15,0QO to each of a ·party'~· national 

~m~ittees~ ~enate· campa_ign co~mittees ·and House· campai~ coni· 

m1tt(i~ •. A ·cross-reference 1s-contamed to the statntorv defimhon of 

mitlticandidate committee, which ~ppeare in§ 100.14(a) (3). Thjs.sec­ tion · also cot:ers the _special treatment. for Senate ·candidates; ·.and has 

identical ·pro:f'isions fo. those in· § 110.~ regar~ing. elections and uilop;.: · posed.can<lidates. _ ·. - ·_ - · . · · · . . · -. · .. · . ·. ·. _ .. , · · . . 

· _·This section .contains .the .Act'.'s ·anti-proliferation_·provisioris under . 2 r.s.c. § 441n(a)(4).(5) and pulls"i~to § ll(ts(a_)(.l.) (ii) the~xam- · ., pies 9£ sinl!le limitations found in the conje~nce report. This section 

also· sets out indicia of common control for those -entities not ·covered · 

~Y--~h«? per se definitjo~ _in :t~e: sta~iti;t?.: Jt proddes tliat -~he ~tiop!ll 

comm1ttee·and House campaign co~ttee of a party"each ~ave a sep:­

arate contribution limit, and that a state committee and each indepeJtdent 'subord!riate state c9mmittee bave ~parate contribution limits. . Tllis section makes clear that -transfers are· not limited in several 

~~~ incl~~ngthe l?~eeds ofjoi_nt fundr~is~~g, au~orized co~it-·­

tees of the snme ~ndidate, prel"!OllS and current campaign cc;,mm1ttees, · · primary candidate ancl the·general election c~mpail?ll .,_nd t~e sto~utocy· . p·~vision· rei?ardint h~nsfers of funds between· two principnl cam.: · p·aign-committees of.a du.al]!ecleral ~andidate. ~i~-section also ~ake!]I · it clear that party com11utte~ transfers are ·unhm1tcd. · . ) . . . . -

. J i10.4 · · Prohibited contri:bu~ions· -. ·. · · ·. : · . . - · · - , ·. · -

.. .«'hii:; secti~ri covers ·sev~re.l miscellaneous "j>rovisfon.s, ·m~ludirig the· . . J)rohihition) of rontributions hy ·foreign naitonals. contributions inthe name of another and cont.ributi~ns of currency. The currency. pro55 

L 
70 

visi~ ~~k_es ~le~r that a campaign must dispose of anonymous cash .:-- · contnbutions m excess of $50. . . · . . . · . ,t' • .• • •' •• .. I . ·• • • 

§ 110.5 · Annual limitation . 

This section covers the limitation on . indh·idual contributions of 

$25,000 to candidate and . committees in· a · calendar year· found in 2 · 

U.S.C. § 441a (a) ( 3). This section provides that this limitation applies 

to contributions made to a person who is making independent expendi- . tures. · · 

§ 110.6 · Earmarked contributions . .· . . 

-· TI1is section sets out the statutory require.meuts in 2 U.~.C. § 441a 

(a) ( e) ( 8) for the reporting of earmarked contributions and fills in the 

: details of to whom reports are to be filed, when and what information · · reports are to contain. This section . further provides that· in. the case . where a conduit exercises direction or control over the choice of the · ultimate recipient; the contribution · will be treated as a contribution 

~rom both the original contributor and the conduit . 

. · § 110.7 Party expenditures ~- . 

·. This sect.ion follows the statutory pro, .. isions in 2 U.S.C. § 4411a"(d) 

for the national committee and the state and subordinate state · committees of a political party -to make coordinated _expenditures in tbe- . general election· on behalf of presidential, Senate arid House candidates. It further provides that the committees may not make independent ex:penditures on behalf of candidates on · wl1ose behalf the 

stat!lte expli~itJy permits them to make coordinated expend~tures. The . eeebon proV1des suggested schemes for a state and. subordmate state 

<'.ommittees to coordinate their expenditures on behalf of candidates. 

It further provi_des that subordinate state patty committees may make . coordinated:,or 'unc!>Ordi.nate.d_: expenditure of up to $1,000 on behalf. 

of t.he party's Presidential ticket. These expenditures are reported to 

the Presidential candidate's principal campaign committee, hut do not 

count a{t!l.inst any spending hmitahons. This prm·ision is derived from .. 26 u.s.c. ·§ 9012£. · .. . : . · . · . . · ·. . . ... 

. § 110.8 · Presidential candidate expenditure limitations . · · : 

This section follows the statutory provisions in 2 U.S.C. § 441n(b) · reprding- the limitation on campaign expenditure for a candid_ate. 

receiving Federal funds. It sets out Commission interpretations of · when expenditures limits are counted, and in particular focuses on the 

questio!l of fundraisi_ng expenditures wh_ich may in f a_ct be a ~~paign . expenditure. It provides for the separation of t'.ampn.1gn activities fo1· 

dual candidates, and reflects Commission · policy on party building 

· n ct i ~·i ti_es. . :. · · . . . . · · _· · . · · . · · · . 

§ 110.9 lliscellaneous . . . . . 

This section co,,.ers the statutory. prm·isions regarding violat.ion of 

]imitations, fraudulent _misrepresentation of campaign a tithorit.y, nnd · the publication of consumer price index nncl Yoting age ~pnlntion 

statistics. . . . .. . . . · · · 1 · 

§ 110.10 Expenditures by candidates . . . . . . 

This section concerns candidates' expe11ditures from personal funds, 

and contains a definition of ~rso!lal funds 1comporting wit.h the statute ·. and the Supreme pourt decision m Buckley v. T7aleo, and m particular 
.. _. .... ___ .......... ~......._. ......... .-.;-....,._......_ ____ ,...._..._., ...... _ .. __ .. ~--~- ...• -- ~ 

iets forth lrhat funds Are permissible . personal funds to be used in :1 

campaign. 

§ 110.11 c~mmunications; adT'ertising . 

This section pulls together the ,arious stn.tutorv prorisions ren.rd· 

ing the discla.imers n.nd advertisin2. and follows the st:itutorv sclieme 

of providing detAils for the requirecl clisc~aimers. . .· . • . . . 

J 110.~2 Honon.riums 

nus section conta.ins the definition· oi the te'rm honornrium. sets 

forth the limit:itions on the receipt of honor-.iriums contained in the 

Act, and defines the ,arious terms in,·olved in · the·· honon.rium 

situation. 

} 
· 74 

ExPLANATIOX AND Jusm1c.ATI0Y. Fon Co~\IPLI.\XCE Rmut..~Tio~~ 

PART 111 

· § 111.1 · The compliance regulations set forth t.he procedures for. ·· · . · processing _possible violations of the ·Federal Election Campaign Act .• 

os amended, and of chapter 95 ai1d 96 of the Internal Revenue Code of 

1954. They explain to the public the steps b;t which the. Commission . will exercise the power to investigate, concilate and. prosecute .cases 

in ,·ol ving ,iolations of those statutory provisions. . , § 111.2 Provision for a complaint by a member' of the public is 

made in § 111.2 which reflects the statutory requirement :that a complaint be. sworn to and notarized and requires a complainant t-0 set 

forth specific facts substantiating·the ·complaint, not merely conclu~ 

sionary alle~tions. · . · · .. · · . . .· · · ·. · · ( · . ~ 111.3 l~tial processing will be handled by th~ General ~u~l's 

Office, which will' prepare a report on each complaint or pos.s1bJey10-
_h 

lation· discovered hY. the .staff in the conduct of the Commission's 

supervisory responsibilities, as set forth in § 111.3. This re;J?Ort will 

enable the Commi$ion to detennine if there is reason to believe that · tho Act or chapters 95 or 96 of the Internal Revenue Code of 1954: 

has been or may be violated or whether it should authorize initial 

inquiries. As required by the statute for all Commission detenninat.ions in the compliance area, the Commission vote to determine wl1ether . it has "reason to believe" requires the affirmative vote of four members. 

. · § 111.4 The statutory requirement that the Commission notify any­

: one whose alleged conduct has given the Commission reason to believe 

that the statutory provisions have been or may be violated is reflected 

; in § 111.4. That regulation also provides for the statutorily required 

'opportunity for a rcsponden·t to demonstrate that no action should. be 

taken against him or her. ·. . . · .. § 111.5 Similarly, § 111.5 provides for an_y investigation the Com- · mission finds necessary, including· either t.he statutorily mandated 

inrnsti~ntion of a complaining candidate or any necessary investigation of another candidate for the same office. 

§ 111.6 Subsequent to any investigation, the Commission may not . proceed unless it finds reasonable cause to believe that the -~tutory · · 1,rovisions have been or may he violated and attempts to adjust the . matters by -informal methods· of conference, conciliation .. and persua~ 

sion. §~ lil.6 and 111.7 provide for these steps in th~ Commission's 

p~ng of cases. . · - . · · · . · · 

§ 111.7 While-the Commission,_of course, ~onsiders that any case · may be settled ·at any time,§ 111.7 provides public notice of the man- .. datory certification period established by Congress in the 1976 amend- ments. : . · . . . · . 

1·111.s The statute also m"ndates that the.Commission will dis-._ 

close its· findinl!S·· that no violation has occurred, and· its attempts u, 

ReCUl'e conciliation agreements, including any agreement entered into. 

Inasmuch ac; tl~e .statute very specifically requires keepinl? all notifications.of apparent ,·iolations and investigations secret, and then requiN's . full publicity· after any im"e.c;t.iaat.ion aiiil conciliation. the CommisRion ha.c; i~ch1iled ~ 111.8 ~cificaUv to reflect that .:policy ~ere, whi~e 

reserving for In.fer regula.hon 'a full statement of its disclosure pol1- cie.c; unifp,r the Fre.edom of Informat.ion Act. · · § 111~9 ·Finally,§ 111.9 provides for the_ Commission's exercise of 

its discretionary power to bring civil proceedings in the event that 

it. ha.c; lw-Pn unable to obtain a conciliation agreement which satisfac- torilv a.diust.c; the matter in question. . ' . __ . · · §f 111 ~1~14 · §~ 111.10 through 111.14 provides for the· Omunission's exC\rci~ =of its power to require persons to testify or produce 

l"C('.Oms~'Ait.h"er.bv wn.y of subpoena or'de~tio!1" and provides,-~_the 

Rtn.tutP. Ftets fort.11, that any subpoena mav be :ismed over the s11,?Da- . · -tnre of thP. Chairman or Vice Chairman. These re,rulations also reflect 

the fa~t. t.hat. subpoenas or depositions are an adjunct of the Commission's investi~atory powers and that t~eir issuance remains at.the 

ni~rrtion of the Commission. . · · . .· ·. . . . . . 

Justification: for Re~ulation 111.15 

~ 111.15. :lirthe Commi$ion's view, the nature of enforcement actions under 2· U.S.C. § 487g( a) (8) is such that the investigative proceedings and su~uent Commission actions require that parties out­

> 

··.·. ---~:-···. · ..... ·_.· 

side the agency not make ex parte communications on the ·merits. of · ~dividual cases to the Commi~ioners and staff responsible for decidmg how those cases should be disposed of. 
. . EDu.~~ffO~- "-~· Jc-mnC.\ffO~ or P.urr 11!-• .\.D,-rsoaT OPl~IOX 

Ploc'Dm 

111:1.1 lttq\*.CI for adrllorr opwou 

This HCtiori protid• ~danc:t for. the prop_er submiuion of :ld,·i· ·· IOrY opinion nqu..a. le allows m "uchorizta ·a~nc. 111ch u an :ac-· 

torn17, to~~~ an 1dnso~ opinion on behalf olrht principal if :ht . princ!Pal ii clilcload &Ad bu studiq u a ~non idtndftid in the 

Act. The acdoll also IC&ta that ad rilor.y opinions .must concern 3[>• 

plication of a iJ!ural rule of law. which 11 stated iD the .-\c~ chopters 

96 or 96 of the Intamal llennue Coda of 19N or a rule or 1'9~lation . ~nscribed br ~· Commiwion, to a speciJlc factual situation iDYoh·in; 

. 

the ~utltor. . . · . · Tbii NCti~ implements :l t' .S.C. I "3if (a). 

I lli.! Pub~ aftilabillt,' of nq1111t1 

Thia Nc:tion prorldes for the public AnilAbilitT of 1dviso" O()inion r19ut1t1. -Req1111t1 . will be mad, anil4bl1 to thi public At the Com•· 

mission tor inl~ion and purchue. The,. ma,· also be publilhed b,· 

qther mtchodl and iD ori~. edited or .. paraphnsed form. u th"e 

ComJ!lislio~ copaiders appro_e._riatt. · . · Thia IICCSOll unpltmtlltl i C" .S.C. t "3:f ( C). . 

I 11!.3 . WriUl!lcomment10D riq,ests . . · Thia NCtion prorides for the submiuion · of written com.menu bv · · ~ publ~ on ~risof1. opinioA ~ums withi.n.10 days aiter P.libli?· · t1on. which tu Co1D1D1111on m&T mcreue or decreuo. Ic also ,ins ID· 

scructiom for•sabmittiq the written ,comments and proTides author· 

icy to.uten!l ~ comment period in a pudcu!Ar cue. · · · . This NCUOD Ullplemtntl ! lj .S.C.113':f ( C). . . , • . I 11a., llluuet of adYison.- opiniom . . . . . . Thia NCtion _p~vidt1. for the m&mltr o·f iau~CI of a.dTisorT opin;. 

IOU. Thell ~pLIUODI will be •nt to the· nquesttnr party 111'1 mAdt 

public. The section points out that o~m.io~ . cu only ~n"1n co the 

A.ct. chaptm 16 or ·N of the IDternal Benno• C<de of 195'. and pre­ ·scribecl repl:&tions of· the Commission. Th• section 4lso follows the · laquap of the 19~8 Amendments and Confennce Beport t p. -W:) . 

concern.in, restrictions 011 th, use of the advisorT opini~n procedure_ · to state cerwn _Jtnenl rules of 1A w until thev ~ri prescri!>ed u a rule 

or rtplation. Th• statuto" lanpap nstrictμll opinions of :m ad­

.Tile,~ nature ii ncittd in I i12..i i a) of cht re,u!ation. · Thls S-.."'CUOD further impltmtllCI 2 {; .S.C.1 °'3if (A)• 

I U!.5 Beliazu:e OD sdrilory opinions . . This IICCion clOAIT follows the ~ap of the U)i8 .\ct reprdi:ur · thON persona who ma T nlT OD an a.driso" opinion. It prorides thii, 

:1 person ii not subject to uy WlCUOll in the A.ct ( '>r chapters. 95 'lr 

06 otthe mC) if rhat penon (1) is inTolnd in A specific·t~saciit>n .-.~ or Ac:tiriCT which is indis~ble from the tr:insaction nla.ted in 

th• requeic. and (2) aca iA p>d f:uth :md consistent with the :ld· 

riso" opiniou. . . Tliis sectiollimplemtnts2 C'.S.c.1 "'3if(b)~ 

~--.-- ·-·- -;·-----~-·---~·-~·-·--·---· ·---..;·)·~--.... ___ ,. . ..:..,;..,.;_·: ... ~-----.;.._- ~-

J 11!.8 lleconsideradon of ad vilory opinions . . . . . .· . This aection allon .tbe Commiaion··to. reconsider :Ad\"'isory opin~ 

iona .. ~on ~~est of the party ":ho submi~ed.the o~ilinal request or. 

by_ a. Comaumoner who \"'ottd ,nth the maJor1ty "·hicn 1pprot"td the . opm1on. · · .· . . . . ·. 

This section ,entrally impltm,nts ~ t;.S.C. I -iSrf. See :llso 2 t"'.5.C'. :-·~ 

I "3Tc(e) whicu rtlotes to w1'itten rules foi- t&t! crndur.t of the Com• 

mi!lion:s Activities. 
"!"', ... 

.' .· ' . ' ' .· . 

lzn..~•m:t ·"8 lmuaunmr •~ 111.·0mcz •Acco~: 

. . · 1ze111 cm~.Fc:m. ·.. .· · 

. I 111.1 · Debidou . · . . 

(al Thil nbeec:tion dt8nn ~di donated!! u ,11 · funds donattd · fot chi pu~ of sup~rriu a Ftder:11 or state . .,flcehold1r1 1c:d,i. tia .acept for appropriated · fmlda or personal · funds of chi ollet· · bokltr. . . . . · · . _- . . . . · 

lb) Of4ct account ii d1tlntd u sn account ntablilhtd for the Dllr• 

pa11 of sapportinc an ollcehold1r'1 . actiTitin. · bat dou not include . · 

aeeoant1 containUlf .appropriated flmda or accounta .conliltin• tS· 

chlliT1)7 of the Denoul fanda of. the ollceholder. Because of· rtceftt . =rt chanai to the HOUII Bal• re,ardma the .. fancliu of ollceholdiq. 

acciriti-. the CODCtpt _of ~ account" hu been elimi-

( cl and (d) Federal 1H lt&tl c61boldar an clt4neci" iei,aractl• 

to man the Pnllclat. llltlllNII ef dll Hollll or Sa1t1. or ADY 1ltetecl · 

ltatl olicaholdar. · · 

·· ... ·.·J!!_·.···_.·. 

· . ( t) · E%ct11 campaip funds ii . defined u funds which esceed · clle · · amount nttded by a candid1te to cl1fny campaip espendituns. lllCl ·. ·tbt usei to-which escta campaip. funds.JDAy.be .put are set out. 

· . I 113.! "C• of funds ·. . .- · . . . . . . . .. . 

· This section malr.-es clear that anT.ucea ca.mpaJp funds and.funds· . donated may .be ued to defr:I • ispenses incurred in che onpn~ry · course of hold.inc fede~l olice. TI11y may Also be Jono.ted to " cn:,.nn- · or may be used -for uy· och1r lawful pur~ includin1 c:impAipl . eontributions to other candidaces. Such contribution would, of course, 

be subject to the normal lim.iu.tiom on amount. 

I 113.3 ·Depolits of funds dou.tecl: to. a Ftdeml or tSate o8iceholder .. 

. Thil section pro,idn that all funds donated must be · deposited 

in ·tither. o. campai,n committet's account· or :m o8lce ~count. · 

I 113.-1 : :it.ports of olb accoantl. . . . · Th• report~ prcmai~ in· the_ rtP-ations require two ~~ns per · - year, due on April 15 and October lJ. The n~m An filed m the same 

plact1 u cam~ reports, both for Ftdt:,il ollceholders and State 

odiceholden, who bepl . to npori w~m. atta~r cudidate status.· 

The re~rts must contaui th• same. information. u would be .filed 

bT A poJitical committee reprdinf · all, nctiC' Uld disbursements~ . tietJlf. that cub contribationa · OTtr 960 must reported. · · 

§ 113.S,.. Contribution and Espenditun1 limitations . · · · 

. · This section · pro'riciel. ~t coDtrib!JtiO!ll to or ezpen~tuns. fi:om ··. -· · · an oace aCCOUDt an subJec:t to· contribation and· t%pe!lcliture limita· 

tiom if they an made for tb1 P.mpoll of inauencina .A Federal tltc· 

. tion. This_section allo pro~des that.an ollce. account m&T uctpt~cr_eas- . ~ fund, from & COrp_Gr&tiOD Or UDIOD, but if thOlt. fun<U &rt rectlTtd 

bl Ill otlct &CC011Dt. tbt o8lct ICCOUDt m&T DOt be 11Hd for e&m~ip . related purpc,111. This proTilion ilconsiient with the Commiaioa'1 

treatment of any committee or account contaμil.q·funcls w}d~ thoa,h acetctahle ucltr.lt&tl l&worJ'tdtnu law otbt~tlwl 1Jtet101l laW. mAy DOI 1lllcl la eoauc:tion with •a Fed1rtl electton. . · 
I 11.U I>e!liltiODL .•·.. • • • .•.... ·... . . . . . . . . ... . ·(a) C~ tfflll E~ilurl.-Tht Commission bu set forth· 

in this deSnicion all of the Tarioas pronsiom of the Act and of the 

~plati~ ~!dch an app~blt to co~ration.ud labor orpdu·- .- ·, . .t1on aettnty m ·conuet1on 111th a .Federal elecaon. ID I (a) (ll_the . 

. ,_ wo!U ·or any other perso"":••r. acldtdJo ~· .buic dibiiion in}·· ... t:.:;.C.1-Mlb{b) (2) to mab el•~.that ~rat1om or labor orpn1-: .. , zationa may not make independent tspendicuns on behalf of Fedeml · ·.:. ·· candidata·Th1·prohibition on indt~nd1nc·_,.nditurts is butd on:·.·· 

: ._ the le~atin hisco" of the seecion.· For ~ cmcusaion '>f tht ·.lt~lo.· · :· . tl\91 hilto" SN Ci.S. ·'9. /11~l C-tt·iofl. 'Ete .• 332 C'.S. 567', rr s.: 

Ct. 129 ( lffi). As the Comt seated in that cue, · · 

_,-/:Th• 'm1 &t which' c~ hu'struck-in.1313.is::the .. ~ of 

_· corpontion ·_or" .un_ion funds' ·!o · ~ti,.,fflt', tli~ '.~1>lic ._ a1.-zargt 

·-:-to .Tote f~r .':.J>!.mcular cand1d:itt ~r A ~rt1cul~r party.:352.. 

· ·~ .S._at S39, •-•:,.Ct.at MO (tmphu11 added)~ _ · ·-- .-·_ ... --._ .• _ ...:_ · 

. . . : Sll~~ ( 2) 'bT eseme!inr ~ht listtf4cthidts f~~ tbfdefinition<:\:· ' . of contribution and espencliturt. -~ forth the permw1ble bonnds of >: · c:o~rate and la)».r orpn~ion ac:thi~ in ~nnectton with· s _F ed,~l : . 

·_· electton. n, s~dic t%em __ rnons conta1ntd m !1:'.::..C.j.Wlb(b)(.2l: . (.\). ( B). and .< C) Are in (al(:!) ( i) ·'. (ii). and· (iii> • Smee the -pi1 '9· • · · 

· ~ment of -honorarium· ( within the .. meaninr c,t 2 -l:9 .S.C. -I '"li) iJ .. ,i- ·, 
UJ~ .· 

empted from the definition of contribution in 2 U.S.C. § 431 ( e) ·( 5) (I)~ · 

the Commission e:xcluded the payment of honoraria, including ~ctual . tra 't"el and subsist~nc~ ~-~-penses, bY. corporations o~ _labor•· orguniza- . tions from _the proh1b1t1ons of tliis Part. In a.dd1t1on, the 't"_enclor . e:temption in 2 'C'.S.C. § 43l(e) (5) (C) is made ~pp}icable to corpornre·. ·vendorsbv§ (a)(2)(V). ··_ . · . . ·. . · ·. 

The e~clusion of pay~ent for legnl. or accotmting services by the· 

regular emp~oyer [2 U.~.9. §_431(e) (4) a.n~ (f) (4) (f)] from the . ~neml definitions of contnbut,on and e3:penchture was~ m the absence · of· legislatil"e historv. to. the contrari. enended. to corporations.· and . • 

labor oraa.nizations °if they are. the regular emploTers of the persons 

providing the serrices. The last sentences in § (a). ( 2} (vi) ._ and (vii) 

were added to make clear thaf enra personnel may not be hired by . · 

. th~ corpo~on or labo}:. organization :to provid.e .t~e 54:rrices. . . ~ubsect1on (a) (2) (vru) e:xempts certn.m :ict1nt1es in· connection 

with national nominating conventions. Subsection (ix) -- enends . the 

eJ:emption in 2 ti .S.C. § 431 ( e) ( 5) ( H) to corporatio·ns and la.bor orpnizntions. Finallv, § (a) (2)(:x) makes clear that anv .:i.ctirity permitted by Part 11-fis not considered a contribntion_ or e:xpenditure. . ._ The Commission rejected amendments to this section which would.· -under limited circumstances,. have allowed a co~mtion or labor organization to place ads in programs of politica.l _parties for n:itionnl, 

state or local conl"entions. The Commission partiallv ba.sed its decision 

on Int. Rev. Code· of 1054, § 276. in which Congress ·newed ndl"ertisiug _ . _ 

!n a convent~on program of a p_olitic:il pa~ .as an· ~direct contribution ·• 

1f any part. o! the. proceeds directly or mclirectly _mures to or for the 

USA of a poht1ca.l party. . · ·· . . · - . ·. .. . _ - · . 

(b) : Eata1Jliah~nt~ .:!dmi'll.i,tration and Solicitatioo l701ta.-The 

purpose of this_ section is to indicate· the_ scope_ of ·the establishment,-· 

:uiministration and solicitation e%~mption in (a) (2) (iii). The question of the deductibility of -the establishment" administration n.nd 

solicitation costs should be addressed to the Intern.a.I Rel"'enue Service. . ( c) E:1Mcr.,tivl! or· ddmi1ti.,t-rati.1:e Penonflel.-This definition ii1c'orporates the statutory de-finition and · the eJ:nlanation in· ·the_ Conference Report. B. Cd'nf. R,port 105,. 94th Con~ 2d Ses .. p. R2 

(19i6). The e:tcl1.1sion of former or retired personnel who are not stock- -holders [§ (c) (2) (iii)] is based on the ordinary meanin2 of the word . ' 

employee and personnel-one -who works for another. · Cf •. .:!llied_ · · · f!'hem.ir.al,_d: ..41li:ali W orlcer., v. _Pittab-urgh Plat, Gla,,a· Company! 404 u.s!' 15;. 92 s.ct. 3sa (1911). · .-- . · . _ . . - · · . 

The references to consultants~;fu ~ (c) (2) (iv). ·tuid to indh;dua.lR · on commission~ in ~ ( c) (3). means ·thnt such persons may be con~ . sidered ·employees if the corporntion hns the ·responsibility for the_ 

collection of. and Iiabi1it:v for. that person!'s withholdin~ ta~'. ·t,rtder ·. the Internal Rel"'e·nue Code. If· such refotionship e~ists :ind ·-if the in­ . . dividua.1 hn..c; poHcy ma]dh~. mana.2erinl. professional or supemsor:v · responsibilities, then the indh;dunl will be considered to be within the 

dennition of e~ecutil"e or administrntil"e personnel. _ .. . · · . . . · The reference to the Fair Labor Standards .\ct nnd • the reS?nfation·s -·. · . issued ptfrsunnt to that Act _semn~ :\S n. guideline is bnsed on n dis- . cussinn of Senators Packtc-ood and Cannon in the conference debntes. 

122 CMVJ. Record 56361 ( dailv ed. )Inv 3.1976). 

( d) Lao01r Oroanizati011.~This definition is the· definition in· 2 . -u.s.c. § 441b(b) (1). 

) 
·:·103 

·. · · · . ( e) · M em:b~ra.-This · definitiC?ri generally me·~ns that an indiridu!IJ 

· . will be considered a member 1f he or she satisfies the membership 

requirements of the organization. The reference to membership in a· 

federation of unions is based on a reference in the 1974legislative history · which indicates that the communication exemption extends to . communications by a federated organization of labor· unions. 120 . ·. Ooog. RecordH10330 (daily ed. October 10, 1974). The C,ommi~ion is 

of the opinion that a membership o~g!lnization, which .is subject to: 

2 U.S.C. § 441b, must have been established· fo:r purposes other than. 

making contributions to a _Federal election. This is supported by the 

communication exemption for membership groups in 2 U.S.C. § 431 . · Jf) (4) (9) whi~h d<?89 not apply to a meml?ership ~rganization which.· 

1s or~mzed pnmanly for the purpose of mfluencmg a Federal elec- . tion. Accordingly, the last ~ntence of the definition of member: was · added to indicate that a person will not be considered a· member. for · . the puryoses of the COll}munication and solici!&t!on rights 9f_ 2 'Q'.S.Q. · § 441b if the only reqmrement for membership 1n the or~mzation 1s 

a contribution to the organization's separat~_segregated fund. · ·. · • (f) Metft_o_d of Facilitating_ ·the Malci'nfl of Voluntary O()'ll,tr,,outwna.-Th1s section defines the term used m 2 U.S.C. · § 441b to mean 

the manner in which contributions are collected or received. · · ·: · . . . · (g) Method of Solir.iting: Volunt'!-ry Oontri,butiona.-· T;hi~ section· . · provides examples of the term used m the statute. . .'. . · (h) ·stockholder.-. This definition is based on an explanat.ion br. 

Senator Cannon of the conferees'. intent .. 122 Oong. Record. 86481. 

· ( daily ed. ·liay 4, 1976). This definition would ·include employees who : 

ha,·e purchased stock tl1rongh an. ~~ployee ·~tock ownership p~an if. 

the employee has a Yested beneficial mterest 1n the stock, the control 

O\·er any voting rights~ and the rii?ht to receive dividends directly. · · . ( i) Vol,ootil:r-g Oon.fributiom1.-This section defines the term used in 

2 u.s.c. § 441b to mean ~enerally contributions which ·were ,riven b~· 

individuals who were told of the political purpose of the fund and of 

their right. to refuse without. reprisal and who freely ga¥e without . nny coercion or the threat thereof. See 114.5 (a) infra. · 

· . § 114.2 · · Prohibiti~ns on Contri~utions and Expenditures. - .. . . . 

· .··. · This section sets forth the statutory _prohibition on contributions . 

· · nnd expenditures made_· b~· corporations nnd labor oriranizat.ions. ThP- .. prohibition ·on contributions and expenditures by national banks and 

rorporations organ~zed· by aut.hority of any l~w of Con~ runs to. 

state and Joe.a.I elect.Ions! ns well as Federal elections. Subsect10n (a) ( 1) 

n11ows national banks and cor~rations organized by any law of . Congress to P.nga~e in the actidties permitted to corporations e:enerall)· - under this _Part if other laws which t.hese entities are subject to so · permit. The term corporation" as used in this part. includes nationn l 

:_ bnnks and corporations organized by the. authority· of any law of· , Congress. · · - · ··· 

. -~ 114.!l Partisan Communications.·· . . _ . , ..... 

· · ·This sect.ion concerns partisan communications by n_ corporation to ·· .. .its :sto('kholder nnd executh·e or administrative personnel and their . families or hv a lahor organization to its members and their families; . 

l . SubseC'tion (b) indicntes H1at sucl1 communications are subject. to the 

reporting requirement. of 2 U.S.C. > § 431 ( f) ( 4) ( C). -· 

.. j 
·104 .· .. 

· Examples .. of the m~nner in w~ich partisan· commu.ru~ations may be made. are set forth 1n § ( c). It IS clear that a co~porat1on or labor 

organization may exp~ess its views on candidates. U.S. v. 0.1.0., 335 

U.S. 106, 68 S. Ct.1349 (1948). However; _it is the Commission's view 

that t~is provision extends to. the corporation or labor organization ~s 

distribution of its views as, for example, to why a particular candidate 

will best serve· the interests of the _corporation· or labor organization 

and is not intended to be simply a means for distributing campaign . materials produced by the candidate, his or her campaign committee, 

or authorized agents. This position is analogoqs to the statutory fre.at­ ·. ment o:f .independent expenditures which allo.ws a.·person to make 

unlimited independent expenditures expressing his or her ,iews on a · 

particular candidate but removes expenditures for the production . and distribution of a candidate's campaign materials from tl1e independent. ex.pen4iture · catego17- and "treats . such as . contrihQ.tions . t.o 

the candi~ate. 2 U.S.C. § 441a (7) .(B). . . · . . . . . . ;- Subsection· { c) (1) aflows, for example,· a corporation or labqr .or-

: ganization-to dist. ribute to it~ J>_. ermissible.gr~up edit.orial_s supporting particular candidates; pamphlets stating that the corporation or labor · organization. supports the views of a particular candidate and quot-· 

ing from campaign literature prepared by the·-candidate _which sets i forth the candidate's views on a particular issue of importance to the 

' corporation or labor organization; or sending a letter stating that the 

cor~ration or labor organization supports a pa1ticular candi4ate's 

pOSitiori on certain· -issues and· enclosing· a copy of a SJ>eech · gil·en. by.· 

the carididate on those particular ~ues. An·.· materials distributed 

in the above examples would, of course, ha Ye to be. printed or reproduced at the expense of the corporation, labor organization, or the · separate .segre~ted · fund of either. :Materials which do. not suppo1t 

particular candidates ·do not-ha,\"e to ~ printed· or reproduced at the . · . expense of the corporation,· labor organization, 01·. the separate segre-· · gated fund of either: . . .·. . . _· . · . · . · · . . . · ; . . . · 

• .\lthough .recognizmg that allowmg a corporation or labor orgn~ . . ·nizatio!1 to . inyite a ca~didate • to address Us. respective permissible · group 1s not, m tlie stnctest sense, a commumcatlon of the corp<>ration or labor organization, the Commission, nonetheless, chose to allow -·• 

for such activity [§ (c) (2) ]. Candidates appear frequently at labor · · organization conventions,. corporate executives' meetings, and similar 

functions. Such appearances .are. clearly distinguishable from the 1-e- · 

publication ·of a candidate's campai,m materials in that "overruns" 

of such materials can easily be waylaid for distribution to the general 

public. The potenti.al f~r evasion.· of t~e pro:iii~ition on cont~i~utions . and expenditures 1s virtually non-existent smce the provisions of ~ ( c) (2) apply only to functions by a corporation for its stockholders . and executive or administrative personnel and t.heir .. families or by a 

labor organization for its members and. their families. · . ·. . .The corporation orlabor organization may suggest in a communicnt.ion sent t.o stockholders .. executiYe or. administrative personnel or 

members that they contribute to -.a particular candidate· or polit.icnl . . committ.ee and provide t.he .candidate's address. The corporation or 

· : labor organization may not,. howe,·er, facilitate .t11e makmp; of con- · · tribntions to. a particular candidate or political committee, otl1er than 

its separate segregated fund, as by providing envelopes· addressed to · 

) 
105 

the can~date or committee or enrolling personsin a payr<>n deduction 

plan for contributions to that candidate or committee. : .· .·· · . · . . The t>rovision for phone_banks, § (c) (3), is based on discussion in _ legislative history. See, for example, statement of Senator Packwood, · ~22 oung. Record S3555 (daily ed. March 16, 1976). · · Sub~tion ( c) ( 4) provides ·. for registration and get-out-the-yote · drives by a corporation aimed at its·stockholders and executive or administrative personnel and their families or by a labor organization 

aimed at its members and their families. The· provision provides that · the "pu~ speech" ~pects of the drives may be partisan, such as urging .. indhiduals to vote for a particular candidate, but that when the drive . . ·. involves "speech-plus" activity, the drive. must be conducted in ·a ... 

· · nonpartisan manner. The nonpartisan.requirement is based on· 2 · 

... · U.S.C • .§ 441b(b) (2) (B) and a disc~ion of this provision by ('.,on-· 

· . ~ssman Hansen m the 1971 Amendment_s~ 117 Oong. Record .. . H11478 

· ( daily ed. November 30, 1971). · . · · . . · · · . . · · ..· · . .· 

§ 114.4 Nonpartisan Communications. · ..... 

-·. ·As provided in 2 U.S.C. § 44Ib(b) (1) (A), nonpartisan communica-· · tions on any subject ~ay be ~ade by a_ corporation. to its ~t~c~olders 

and executive ·or administrative personnel and their families or by a 

labor .or~nization to its members and their families. [§ (a)]. . · · (b) Oarufidate aM Part11. .Appearance.a.-. _Subsection· (b) . allows a. ·. corporation to permit candidates or political· party representatives on . the corporate premises to address or meet employees in addition to 

stockholders and executive or ·administrative . personnel · md a labor . organization • to p~~in~t· candid!lte or ~litical party representatives . · on the labor or~mzations premises to address or nieet employees other . than members .. This pro,·isio~ is based on trad!tional types ~f "good .. government" programs.estabbshed_by corporations for a.11 employees· 

and the traditional practice of canciidates touring the fac~hties to · shake hands with employees.·. In the conference debates, Con~ssmen . ·. '\Vig~ !lld Hays agreed that tbe bi~l would allow: s~ch activities to · .· continue 1f the programs were· condu~ted on an equitable and non-. · · partisan basis. 122 Oong. Record H3781 · ( daily ed. May 3,-1976). To : .. .. comply with the nonpartisan requirement;· the regulation requires the ,. 

·. corporati~n or_ labor. organi~at.ion_ ·'!hi~ has. p~rinitted. a. ca. n~idate 

· ( or party representabve) on its premISCS to permit all other candidates 

{or party representatives) for that se11.t the . same· opportunity · to 

appear. . -· The Commission recognizes that, for examp~e, the separate segre- . •. gated fund of a corporation· may have ·contributed ·to. one of the_ 

candidates or the corporation may have sent a partisan communica ... tion to ·its executive or administrative personnel endorsing one of the · candidates prior to the appearances of .o.11 the candidates for that seat. 

However, since. the group addressed by the .· candidates consists of 

employees outside the partisan.communication exemption, the corpora- · tion may not make any endorsement. of any of the candidates in conjunction with the appea.rances under this section. This limitation .. of . 

· con.~? applies t. o appearance. s _by. ca·n· didates on labor organization · · ... fac1bties before employees who are not members~ [§ (b) (4) and (5) · and (c) (1) and (2) ]. If the audience consists of both executive and 

administrative personnel and other employe~ who a~ not stockholders 

} 
. • . : : ~r. empl(!Y~, '.who. a~ n~t ~embers, the no~P.arlisan: ;~uifein~~ts .of . . ··. :tlus. sect101!- o.vernde the right · to ma;Jce_ partisan· co~umcations · to : 

:the mol1? limited group. : q1eariy, the ~parate · segregated fund of: a 

-corporat1on or labor organization may not make a contribution: .to any: · = .of the cand!dat.es at ~he time of the appearances; t~e corporation 01· · '. 

labor organization or its separate segregated fund may not endorse one . · of the candidates at the time of such appearances~· >. .· · .. ·. · : · . . =· · : 

· . If re~resentatives of :political -parties make ·appea.rances on ·behalf ,, . of candida~ for a particular seat such an appearance would be con-' 

.si~ered a··candidate_ appea.rance to the ext~nt that .independe~t can­ .· :d1dates for that seat who request must be give-n the same opportunity 

;.toappear ... =. . .•. _· ·. ·, • :··>:, ..... ; ·_· =.· -.•. ··: · _ · ._,: . .• ·• ·,: . : 

. ·( c) · N onpartiaan Regi8tration and•. JT oting 1nfo1w,,ation.~ubse~- _ ·. tions · ( c) and· ( d) draw .the line between "pure speech~ s.ncl ."speech 

plus" activity a~ w.asdo .. ne in. __ §_·114.~(3)_.between. § (c) (3), (>h~ne ~. a~ks, 

and § (c) (4), get-out-the-vote drn·es. Under§ (c), a corporation or, 

la~or orianization may, in c]early defined nonl?art!san · fashi?~- ur~.- . ... ~he employees of a .co~or~tio~ or: labor orgaruzat!oll to_ re~st~r or 

,·ote. If the commurucation 1s directed to both executive or admmistra.-· .. . .. tive personnel. and <>t~er em~loyees. who are. not .stockh.old~rs, _th~ no~­ ·. part1san.reqwrements of thIS·. sectu;m are _apphcable.· Th1s .. section. ts 

__ ·_, limited to posters, :riewsl~t~rs, or the like w!iich .state, ~or· e~ample,:, ·. : ··"vote", "support· the candid~te of your choice", -''cont.nbute _to the · , .. · · ··:···candidate ofyour·choice'\ or similar·nonpartisari messages. Inforin~-f.:· 

.:tion about particular candidates is limitedto eitherthe reproduction · of the entire list of candidates on the official ballot or to the distribu- · · i . tiori ~of. voter guides prepared by .organizations that '<lo; not endorse, 

:: candidates or· political parties. A corporation or :labor 9r~n~aUQn .. : may distribute to the general public, where State law permits, official·· . , .· 

. registra!ion~by=-m.ai~ ·forms, -if, _t_he · distributio~ ds d<>ne _ in . a -.~holly.· : · ·' 

.•.·nl>(c}}~:i~~~:r:~egiatmtilm ,ani.Get-f}t~-Tli~-Vot~'I)ri11e11.-' .,• 

.'Sttbsect.Ion (d) ~rtams to actualre~strat1on and· get~out-the-vote ·., · drives, such as assisting pe_rsons to register; transporting vot"rs to the : · · 

po Us, an4 providiJ?g baliysitting. service to enable voters. to go to ~he , . . ··: 

polls. This regulation follows the Conference Report langual,?8 which •·- · 

requires the drive(to.be join~l:r SJ?<?nsored 'Yith ·an or~nization: tha_t::· . . . does not endorse candidates or politica.I parbes·and conducte~ by thnt ·. orp:anization~ H .. ·Oonf. · Report, aupra, : pp. 6~4. These drives rieec.1 . , not be limited to_ employees of the·corporation_(?rlabor organizntio!l: 

but may r~ach .the ~neral public. '. . '. ; -. , > . _. ._. • ,:. ; . . . : · : . · ' > · : . ·: Snbsert1on(4) allows the orgamzaho~ conducting the .drive to use. 

:the facilities oft.he· corporation orlabo·r organization, sue~ ,as,setting 

up a tnble in a: department store to regist~J: voters~. This ~ubsection 

.-n11ows the en1ployees of a.corporlltion or the. members,or employees of-· 

'. n. labor orO'nnizn.t.ion·tonssist the organization whichis conductine: the 

drh·e. Th; employees or m~-Jtjbers m1,st, of course, be.tinder the·direct·. 

--snperYision of the organization conductinp: the .dri,·e an4 mi1st. adhere 

to the 11oni>nrti~an:requirements_~f that o,rganizatio_n.·' · ·. . . , · -'· . . .· 

·.§ l 14.5, Separate Segregated_ Funds. " · . . .· . . · _:, · . · _ ·: i , :, ·_: . - · .. : . : 

.. · (a}· T;"oluntary:·oontributi<m8.lo .a Separate :,Segreu.f4ed ·F,und.-. · . This section centralizes the requirements of the Act relatmg tc, separate .. · ~~rri?ate~ .funds:_est~blished · by. c?rporaJion~,:l~~r)·9r~nization,,.·:, 

-m~mherslnp.o_rgan~;ntipns, ~oopernhYes, ?rcor,porn.ho~s ~~th~ut _ca1n~_ .. _ _.·. 
tal stock.· Subsection· (:a) ( 1) ·ati fnrth che, st:iruton- •• prohibicion · in :l 

t'.S.C. § .Wl(b)(3) (.l.) on the use of man,~ obained bT" coercion or . mon11 requind u I, COlldirion of membership in & ltbor org:iniz:idon ... · This SICtion ·ll)tei!c:ally prohibits the US1 of ;Ji re"rs• check-orf sysre:n. . ~· COD?mi111oa iDttrpna the· ~t~to!f. term ·cc,ndidon oi membt~· .. wp:' to· mcluda ·plans· and1r whie!b • 111dinduals must mAke :1. · cona-ibu- . '. . tion in ordtr to acqtμre or remm · membership ,,.en. if.-the_ contribudon ii_ . 

: . • i.t .·r1tnndal,l1 .:t.c _:a. later date tip,~ th~. nqutsc of che concrioutor .. >· . ; . · . ;' . · .. -~ C1?~01l or -lal?or O~Clnll m~y, .~de, j-f. :! ) • 5tt~C ;~_ : 

\ ,u1d1lme for comnbations to irs Hparate ~ptid fiincl How.e'9er • . . . · Jfl11 tllfo~nt of ~y pi~llilt is stric:dy prohibited. mAd ii enfo~t-.:1.~ .. . · . · .. ;th1.-renl~ eoncnhmon 1r01dd. no lonar be voluncA?T. Cf. P11H· ··· · . : ,Ut,n Lot:11I]!1"n ,Yo. In '9. r; .SM! .W. T:-.S. 38u. 'JtJ S.Ct. ::.l-'r i 1:>~ l > --·' ·?:. :Subllc:tiom· (3),· c,). &Dd:J5) inc:orpor:r.rt the. requinmencs of ~\- . . :.tr.S.C. § .Wlb(b) (3) (B) ·-.~ ·. (C). Bec:a119' .the.Act requires t~e ~-·.?'.> 

c:I01Uns to be made d tA, t,m* nf. the sobcitanon. 3 ( 5) . ~wns a ,1,. · ..

· wt;twl soli~tado111 to contain the required ~-l~ns. Tue .A.·ct '.rf~.-:,::: 

: qm'!I the discl~res to be ID!'de by anyone sobc:JC.~. t?tployees. ~.\.c· . . · · co~y, the .~osure ~remenu appl~ t~ solic1t:1.t1on by ~ .~,m.;. · · bel'lhil' orP.JU%&tion. 51:tch !.I a trade ISSOCl&aC?n, of tli!! t%ecUctt9e or 

: :Jadmimstraii,:• ~rsam11l of_ 1ts member Ct?fP.C?rattou. :. i-.:_ :· : >:: · ~: . : · · . ··•· · , \ .. , : : 

: : . ~ _m. th~ Ccmftrec:e ~~P.)rt mclicaces. ~~~ the di5c!osures>:, . _ an t~ ·t,e made by:& labor O~OD when: solic1~ mem~rs ff'_ho, 

•, . : are· also employits·:of a co~ntion or labor o~iution. ·H ... C"nt~· ' ·.-. :._ .. Rrp!lf'l.l'U'fll'O, p. 84. th• repla.rion.acc:o~r,a~ds th! ff'Ord ,e:n--.:_· 

- · · ber-., to . ttie ~~rr. lanp.ap. · These disclosnn rl!ttu~e~tS ~ao . -. appl7 to the solicitation of members of a membership orpn1z:inon~ 

:-·· eoo~rati~ or co~ratioa -wimom: capital uock.··The · b.c:t -. chat ch~; , .. : ~lidcal .pa_!'P.* of the fad mat bt cmcl~ is in accord with I 10-2.tl _. ·· C:of th• regulations. ThtH toliciucions mns abo infonn the·member ot 

his or her ripe to !'lase ~~Q~t reprisal. -i:ius wu_d~lit to. m:Lk~ clen( . ::· th&!. th• membership o~ao~·cooperilti!•: or corporation ff!th_cmt .· 

c&P.1tal st~ may not canc:el membership, oolic:1~, or t~ke och,r g~il:iro: _ . act1ons ~ members who do not contributL ; ,>· ··: ... · · .· · ·: ,._ : . ·., •. ::· 

· · · It is tJie Commissio11:s opinion that~ su~m.corma.'9 .. snbjeet to the 

-~aiftintnts of this mbsterion. !Olicit> & · IUbOM.Wte. ·nw o·piniOri: 

_· : ~ on the_ decision }n Pl'!':i:tt-n :uid the co~~ms reftcti«?n. of.th~ ... :-_..".section of the Seiwt bill wWchwould bAve prohibited 5\tcn!Ohc1tauon. >.. 

' . (b). Tiic·ot T~~ .ll0ftit1.-~? pro\9'.sion .sets. f<?rth r~e prohi·: \ 

· h1aon -on. "tr:l~ trnsury morues tor·. ~nrnllut:on!~ a~.dtes. 1re> .. / .· 

~1 · allOTIG -subiect. ~l course, to ·:·other ·:applic9:ble : F ~et?L:. ; stnnn• :md state law. Th.• ·p~ mar not be so. numerous ?r- !O ~s-,'.• ., .. . , r,raporticn:uit!l,y 'nL!UAble .. m re!ac1on to the-.. ~_ o~ rhe r:itff, ncke~ t~n c:, 

the •rail• is, m td'~- a -n-:1clin.r~. rnoner. nt11:u1on. :The .C ommm1,:1n :\has prondtd ~ re~le·st~d&r'Cl. one-thu,i ~f.the.·mone~ con~:-:b-· · ;- nted. -~ . ~. p1d~ ·to: co~r:lno~ . or: labor or;:uuz:ic10~. usm1: -~:ie:e -­ fandmmng. d~nces.~ t"nder .. thisJ:ftllde! a sep~te < seg-r~;:it!!f, tund 

~lcl.oftl'p~ ~~··!t S30Q·purc~ ~ch·~~tu·~ money. If 

the 'fa.rid rtet1nd S900 m t9olunt:1." c:ontnbucons., the tund ff9ould n,:,t.· 

- under this ~ide, repl4ce the t~r,- mone~. If. hOTC9!T"!r." onlr $600 

WU contributed. the· !und Tffluld u..ce SIOO of \'90htnc:i"9 conrt"ib!ttion...; - · tO rtnlace the trffsmT mOUIT S1Dt:e the ~ Of ~D~ the ·mone~ · . exceeded one-third of the money contr.btited by $100. ~. · - · . . • .. . ·. ··.,.'.\, . ·. .. ·~.( · ...... .-,. '• :. ·::~·.::. ·.;· .. : : ·'.-::.·::··.:\;\: .. ,_.\;_'' ':·,,•I 

,•' 

' .. .,. ... ·. . : ' . ~· .. . .. ,:.:_.··. 

: : . ~ .· .: .. <. ·. '; ;· .~ . ' ..... ,• '., .' ... ' 
110 . 

. · cei":e:~~l co~t~hu.ti9ns;.keep the required records; deposit a.II contribuhons received 1n a separate ~count;-forward the total amount of . contributi~ns received by check drawn on that accon:i_ to the sep&r. ate 

segrega;ted fund; and p~~vide the separa~ se~ga . .fund only the 

information that it is required to disclose under tbe .A.ct. The custodian 

may not be an officer, stockholder, executive or administrative person-· 

nel or member of the corporation or the labor organization conduct- · ing the solicitation. In adai·tion, the custodian may not. be an officer or . · employee of the se~arate segreir&,ted fund except that a custodian · . ( who is not one of the persons above) may serve as the treasurer of .. ti1e se.parate segrepted fund and perform all of the rooord.keeping · .· nnd reporting ~u1rements of the Act. · ·. . . . . . 1 If the custodian is not the treasurer of the sepa.rate segrepted fund, I the treasurer must provide the custodia.n with . the ident.ification nnd 

: amount contri~uted directly to the fund by incli,·iduals solicited under 

t.hese provisions. The custodian needs this information t.o comply with 

his or her recordkeeping. and reporting obligations. . · · . ( e) ... 4. vailability of Methods.-. ..\. corporation or labor 01·ga.nization 

may not use a payroll deduction pla.n for facilitating contributions . . . sohcited under this section. See statements of Senator Cannon, 122 

· C 01ig ~ {l~cord S4156 .. ( ~.a.Hy ed. March ~4, .1.976). Th~ C~~nmi~ion is of . the opm10~ that th~ 1-eqmrecl anonymity 1s not mamta.il)ed 1f n. pay- : rolldeduct1on plan 1s used. · . , , . . · . . . 

Subsections (e) (2) and (3)· follow the expressed intent of the con- · · ferees. H. Oonf. RetJ01-t, 81.!,pra, p. 64. If the co11)0ration uses -an in- : house method, it will be ~uired to make that method a,·aila:ble to a · . · labor orga,niza.tion ";.hich 'ht.ts the ri. ght to ma.ke a solicitation uncler thi:t 

section .. !£ the co. rpora.tion does·not wish to clisclose.the.nam~·and addresses to any labor organization, the corporation and labor organization are required · to retain an . independent mailing •service. · The independent mailing service will make the mailing for 

· : for the corporation. The co!"Poration is required to make the names 

n.nd addresses of the individuals the lwbor organization is entitled to_ · . · solicit available to the independent mailing service so that t.he· ser,·ice · . may do a mailing for the laTM:>r organization. · .· . . . . . ·· Subsection· ( e) ( 4) requires-a coryorntion to notify a labor orgnniza- · 

t.ion p~ior to the_.time any solicitat1on i.s '!lade under t.his secti?n. T!tis . . provision was ·aclo~ by ,the Comm1~10n to ·prevent the s1tuat.ion . . · arising where a corporation sends a solicitation so late in the calendar·. ·· .. year that the labor organization .does not have the necessary time to · · make a solicitation in that calendar year. If this were to occur in the · · year ereceding the election, the practical effect would be that the·cor- · . porabon would have had three . opportunities to solicit contributions · · · . for the election year. If the la-bor organization, due to the constraints · of time, were unable fo make a solicitation in the calendar year before 

.\ the election, the labor organization would ·be limited to two solicita- 1 tions for that election year. )Vith the addition of this section, the corpo- . ·. ·. r ration is· required to notify the labor organization of its intent to make ·· · .. i a· .solicitation. This notification must ·be given in advance so that the. 

· ! ..labor organization·has a reasonable opportunity to make a solicitation 

• during the calendar year in which the corporation makes a solicitation . . · Sulisection (e) (5} incorporates.the co .. nf~~n~': report)anguage in 

that regardless pf th., numbe.r of labor orgamz&t1on~ wh~c~ rep~n~ 

mem~. at a given···corpora,t1on, ·only two letters requestmir r.ont.M·h11 -
i11 .• . . . 

. tions. for Jahor orga~izations' separ~te segrel{llted fnndsn~y be. ~ut . · to employees who. are not members of that umon and the stockholdel's 

of· th~ co~ration .and their families. Since the v~rious labor or anizatio.ns. all have the ri~ht to make a soli~itation, ·§ 114.6(b), he· · Con~I~!on foe~ on ·t11e fact .t~111,t a~y gn·en. empfoyee or. st · kholder could receive only two ma.1hngs per calendar year from la· o.r 

or~nizations. Consequently, th-is sul>sootion allows se,·eral, labor. r-· 

~zatJons to join together, and a single mailing may contain requ ts 

tor contributions to each of the labor organization's separate seg ·e- . gated fnnd .. 

§ 114.7 llembersbip Or~uizations, Cooperatives, or Corporations· 

without Capital Stock. 

The provlsions of 2 U.S.C. § 44lh(b) (4)(C) are contained in§ {a). 

Alt.hough corporations, national b. anks, or labor organizations may be .·· members, this section in no way waives the prohibition on contr1bu- . tions by such entities. § (b). . . . . . · . . · . . . : Subsection ( c) follows language in the Confe.rence Report ancl nn 

explanation oft.he conferees' intent by Senator Cannon.//. Oonf. Rep_t., 

su-pra, p. 63 and 1~2 (Jung. Record S6365 (daily ed. liav 3, 1976). The 

Commi~ion rejected· a proposed amendment to this .. soot.ion which, 

would have ·allowed a trade association · to solicit the executh·e and 

administrative personnel of its noncorpornte members. The Commission could find no legislative history supporting th~ proposed amend"!· 

merit. The Commission has elsewhere followed a strict reading· of-.· 

the statutory word member, as was the ·case with the question of ex- · 

tending solicitation rights to the executh·e or administrative person- · . nel of. a labor organization· who are not members. In addition .. a sole .. proprietor or partnership which is a member is not subject to provisions of this Part and _may; -the~~ore, solicit its partners and empl~yees on behalf of the trade ~1ation. . . .. ·· . · · · Subsection ( d). recognizes that certain professional groups or firms, 

such as doctors, lawyers, or accountants .. may ba,·e corporate status 

under State law. The pro,dsions of t~is Part on n)luntary contribu~ .. tions t.o separate segregated funds,§ 114.5(a), are applicable to mem- . bership organizations, cooperatives1 and corporations without capital 

stock and their separate segregate~ tunds.·§ (g). . .. ·. The right of a membership organization, cooeerati,·e., or corpora-: . . tion without capital stock to communicate·. with its members· is basecl. 

on 2 U.S.C. ~ 43l(f) ( 4) (C): which exempts communications by a mem- : . 

bership organization to its members from the definition· of expendifur-e · . if the membership organization is not organized primarily for the pur- · pose of influencing Federal ~~ections. (The 1976 amendment to this sec- . t.ion make certain of these cost~. reportable.)· Again .. this communica- ; 

tion right disting'!lishes between a communication of the organization's , °'m views .and the use of the ·organization's resources· to aid in . the. 

distribution of a candidate's material. Under the Act, expenditures 

for the dissemination, distribution, or republication of candidate ma- .·· terial are considered a contribution to the candidate. 2 U.S.C. § 441a .. 

· (a) (1) and H. O()lflJ. Rept., supra, pp. 55 and 59. Consequentl)·, such 

expenditures are not . within · the communication exemption to the · definition of expenditure. There is no corresponding exemption for 

~embersh~p organizations to the definition of contribution. 

st~ 718-,;.-77-. -· s · 

} 
112 ·. . . . 

. · The reference to mutual life insurance· comp.ailies in § ( i) .· is based . nn a discussion in the conference debates. }22 Oong. Record S6478 

· ( daily ed. May 4, 1976), · discussion between Senators Cannon and · Allen. · · . . · . 

Subsection ( j) prohibitsa membership organization; cooperative, _or 

rorporation without capital stock or a separate segre~ted fund established by such organizations from soliciting contributions_ from separate segregated funds established by its members. This subsection i~ 

based on the statute which ext~nded the solicitation right to members 

or 'f tot he stockholders and executive or administrative personnel of corporate members only. This prohibition applies equally to membership . organizations which -are trade associations and would prevent. a trade 

association or its separate segregated fund from soliciting contribu- · t.ions from separate segregated funds (political-committees) estab- ·. Jished by its corporate or noncorporate members. Although the separate Eegregated fund of a membership organization, cooperative, or 

corporation without capital stock may accept unsolicited contributions, · informinp: persons of the right to accept unsolicited contributions is in· 

itself a solicitation. This subsection would not preve~t a trade associn- ; tion, once it has obtained the required approval, from \working with the .. · officers or employees of a corporation's separate segregated fund when _.·-)· 

making its solicitation o_f the stpckholders or executh·e or adminis- •, . 

. tratiYe personnel of the corporation. 

o § 114.8 Trade Associations. , . . . . . . . . 

· (a) Defi-nition~-The ~neral definition of n trade associat.ion is 

based ·on the treatment in the tax code of business associations. See . Regulation Section 501(c) (6) of tbe Iri.ternal Re,·em.ie.Code of 1954. 

. ( c) L-hnifationa.--The ·statutory limit on solicitations by trade as-· ·· sociations of the stockholders and executh·e or ndministrat.ive · per­ . sonnel of member corporations is contained in§ (c). 2 U.S.C. § 4-41h 

(b) (4)(D). Since only ·one trade association hns the right, after ap- . . ·. provn 1 has been obtained, to ·solicit a member corporation, two trade 

associations could not enga~ in a joint fundraising of .the stockholders 

nnd f!Xerutive or administrative personnel of a member corporation. 

(d) Separate and Specipc Approvol.-The Commission has interpreted tl1e statute . as reqmring a two step. process : ( 1) the member " . \ 

corporation ·must first approve the solicitation; nnd (2) after the ap- · ' 

proval has been received, the trade association may solicit the persons 

··approved by the·membercotporation .• The trade associntion is required • to keep a copy of all appro,,.als which it rece.ives for three years from · .. the. date of the appro,·al. § (d) (2). Three.years is the·standard record_ ·. mamtenance reqmrement of the regulations. 2 U.S.C. § 436 (a) and 

. § 104.l2. ·. . · · . .. : . · . · · . . 

Because corporations may wish to see tl~e. solicitation materials a , 

trade association would use to solicit its em_Ployees, the trade asso- . ciation may enclose one copy of proposed solicitation materials in its . re~uest for aporoval. § ( d) ( 3). Such a mailing will not be. deemed a 

solicitation. However, any niai!ing which eontai11s. solicitation. m~- terials in. bulk· or an:)" reproduction ~y corpora.te. pel'S<?nnel for distn- , bu~i<?n to th~ w.ckhol~ers or executive or !L~mi!11strafave p~rsonnel to , · 

solicit contr1but1ons will be deemed a solicitation and subJect to the . · .J limitations ·of this section. · The trade association may address the 

request_ for approval or communications oth~r than· soliciiations to·_· 

_) 
··:.the. desi~d .:~preseniative, with.:lVh~m .. the ~rpotatjori· reguiarli-··:. 

corresponds . ·• . · · - · · · .· · · .: · · - .• : . · •· .. . . ·. - · · .· .·· · - _··.·:·. The 9<>~issfon· rejected _ai~pti~n-·whic~ .w<>\tld_hav(r'provid~d ~n'. ... . exemption from the two step approval/so}ic1tat1on · process for trade >: ... -.. associations with corporate members of fewer thanten·stookholders or': .• =.•:>···· 

five E!X~utive or administrative.p~rsonne}. Under the option, a_trade)/>. 

-.assoe1at1on. cou!d .have .. ma!1~ a. ~1m. ultan .. eot1s request for appr(?.yal a!}d_ /· .. · enclosed matenals · for sohc1tattons of the stockholders and executive· · . :· ~r administrative personnel of mem~er corpo~tions 0~ this ·size, and '.:. 

1f 90% of the corporate members were corporations falling within this :/,/ .. size range, the trade association could have used its memoership mail- - ·. ing list to make the simultaneous ~uest and solicitation. Althou~h _·­

adherence to the two step approval process may cause soine admims-. -· trati,·e burden for trade associations with small corporate·members, :"- ·· .. the Commission coul~ find no legisl~tive history which would have , ·- · supported the exemption from the statutory requirement for separate 

approval.- Additionally, the v.rincipal stockholder or president of a . . small corporation, who will hkely recehre the request for apprOlral, is . . . .often~t~e-only stockholder or employee who c.o.l}tri~utes to the t.r~e,'../ 

.: .. assoc1at1on's separate segregated fund. Anysol1mtat1on of other stock-. · - : ~o~ders or executiv~ or_administ~tive ~rsonncl is subject u., th~ sepa~ .. · ·. rate_ approval reqmrements of this section~ :· · -~ . <· . · . · .. :i; ,·. :: ·· 

. . . .'.Tpe member .~rporation may limit·~he grou:p which, thetrad~ a~.:. .. · ·. c1at1on maysol?c?t, but once a c~ll!orabon has g1_ven a tradt: ass,oc1ahon- · approval to sobc1t~ven to a limited extent~he oorpornhon may not·_:_: 

approve a solicitation for any other trade .associat.ion. § ( d) "( 5). An 

approval lasts through the calendar year in which it was given unl~ss_ .· withdrawn at an earHer date by the corporate member.§ (d) (4). A ·· .. corporatio11 may withdraw an approyalat any Hme. However, if an)· : . 

solicitation· has been made for the trade assoclation's segregated fund · > . 

~-<·prior to the corporation's withdra~alof the approval,the corporation_:_:,'.,_. 

'. may not approve a·ny other solicitat~oil for.a trade associatio11 during)(··· 

the calendar year.>:, < .··· . ;- : •··. . >- . · ·: '-. ·; >-.. · , _.·c:-.· · ... ::' · ·. The Commission ·reject~d.·a proposed: amendment-to :this section.· 

which would hu·e allo\Ved · ·a :trade ·association to solicit contributions · from individuals present at a trade association's meeting ifthe indi~-.::·:, . ·yidunls present were the ~ersons who customarily represented. the·:<.· 

mem!>9r corporations in dealings with the. trade assodation .a~d if the .. 

. meet.mgs we!e•regul._nrly .. sc.hed.uule.d.:m~etm. gs .. :<?f t.h. e_ asso. c. 1ation .... ~ .. nd··· 

not held for the predominant purpose·of·ra1smg.Federal campaign 

funds.·The trade·association is not prevented from.making solicit~tions:: 

·•·· at trade association·.meeti11gs bμtthe;prior.'.approval of _the :mem~r_:• 

: corporation is required. . · .: . . : . . : 

>:, . (~) ~olwitation.-Once ap:prova~ has been <?l?t!lined, then: ~s no_. 

; i -hm1tati~non the number of times a :trade .ass~iation ~1!-Y sohc1t. t~~< 

1 . persons_ approved l>y the• mE:~ber. corporation and the!81~ no _.restr1c- 'I' tion on the method. of sohc1tatmg voluntary," contr1butions or the 

method of f~cil!tating ~he making of volunt!11i contri~utions:u.s.ed by 1 

, :

1 

a trade assoc1at1on; § (e) (1) (3). The Comm1ss1on specifically reJected ,_ a prop_osal whtch would have allowed a membe:r: corporati<?n ~to us~ a , :' 

payroll ·deduct1on or)checkoff system for executive or adn11n1strat1ve_ , · ;. 

personnel_ contrjbuting to the separate segregated_ f:und. of -a trade · : 

association. . . · · · · -

. ·,.· ···:':.·: .. · . ,.· .. · . 

. ,· .·, ····:·."/ 
· 114 

~ T~ere was no legisl~~ite history. on ~he extentofcorporate·participn~ 

t1on 1n the trade assoc1aho11's so11c1tation of the stockholders ·and·execu- . t,ive or 8,!lministrative personnel of the .corporation. An argument can · . be made from t.he statutory language that tl1e exemption for solicitation costs applies only to solicitations· by· a corporation to its separate · segregated fund. Under this interpretation, a trade association would 

be required to reimburse the corporation for-any expendit.ure or assistance by t:be corporation. To require a trade association l.o reimburse 

the corporation for incidental services,· such as the distribution of t.he 

association's material. via the corpomt.ion's internal mailing system, · ·, 

· seemed tenuous since the trade association will be paying for tlie substantial costs oft.he solicitation wit.ht.he membership fees ·from cor- · . ·porations. C,onsequently, the Commission has not required the t.rade 

association to reimburse the corporation· for such incidental 

expenditures. . . -. . · · . . . . . . . · . . · The Commission has, however, followed a strict reading of what · · · constitutes a solicitation for a trade llssociation's separate ~gated 

fund fox: ~he purpose ~ft.he 1!mitation _i~ -~ U.S.9 ... ij 441h(b) f 4)·(C). ·· Any sohCJtat1on or d1stnbution of matenal sohc1tmg contnbuhons 

for a trade association by the corporation or its personnel to the stockholders or executive or ·administrative personnel of the corporat.ion is 

considere,d a solicit.at.ion subject to 'the limitations of ·2 u.s.c~ § 441h . ·. (b) (4) (D) and ~114.S(c). If, for example, a corporation ·had ·ap:. · prO\red a solicitation by one trade association., the corporation or its. 

personnel could not solicit the stockhold~rs and exeeutive personnel . for contributions _to -the separate segregated fund to_ another trade· 

association. · · · . · ·. . . : . . · : · · 

. · . · (f) SolicUatwn of a Subsid.-iary Oorporation.-· If the subsidiary, 

branch, division, or affiliate of a parent corporation is itself a separate· 

corporate entity and e. member of a t~de association, tJ1at trade 

association may, subject to the limitat.ion and appro\·al ·requirements .. . solicit the stockholders and executh·e or aclminish'1tth·e personnel of 

the snbsidiary,.brand1 .. dhrision, or affiliate corporation. This proYi~ion 

is ba.~d · on a dif.ieussion be.tween Senators Cannon and Packwood in : · . the conference debates. 122 00lflg. Recor<l S0367 ( dailj· ed. liny 8, 1976). . . ·. - . . 

(g) FederaJ:w·na of Tra,le Aa11or.1af.i01M.-In the nl,FE'n<'P of anr legis­ ·, 

lative historv on the treatment of solicitation hy federations of t.rnde .. associations/ the Commission followed- the rationale of tl1e anti".'pro- . liferat.ion pro,isions of t11e Act.in this provision. If all of the political 

commit.tef's esta.hlis11ed by t.he .federation· ancl its re,rional .. · state or . - '· 

local affiliates are one committee fort.he purpO!-;es of con'tribut.ionlimi-. ·. tat.ions. the federation. may .. under the provisions of this subsection, 

solicit the members of its regional.. state or local affilintes. If tlH~ m<>m- . her.; of the re¢onal. state. or local affilia.tes arc corporations .. t.]1e fed­ . ·eration mnv solicit the stoc.kholders and executiYe or administrntin~ 

personnP.1 of the corporations Subject. to fl1e requirenlC'-JltS of thi~ Rec- , tion. This subsection. applies .only to a federation of t.rncle nssodnt.ions 

-in the fame line of industry or commerce. :- · _.· - . · · · · ··.. (h) Oomm.uni-eatiom Otlier Than. Solicitation.fl.-· Solicitations for· 

contributions to the trade ft!,Sociation's separate scgregnted "funds nrc · . : subject to .the limitations of tllis section. Other types of communicn- · · · tiomdn connection wit.h a Federal elect.ion mn.v he sent to t.l1e·· clesi~- · nated representathre o~the corporate membef."·There is no limitation 
on the number of trade associations which ma)~ make communic:1,tions .· other than solicitations to its co~omte members. · , , 

( i) TrtμU A11ociatitm E·mployee,.-Subsection (j) specificallv sets .. forth the communication a.nd solicitation rights of tr:ide a.ssociitions 

with their own employees. Since tru.de associa.tions will Jlresumablv 

be using corporate money, communications and solicitat1011S by ch·e 

trade association are subject to the ~tations of § 114:.8. . . 

§ 114.0 'C'se · of Cor~ra.te or ~bor Orga~izacion Facilities .·lnd 

l!eans of Transportation. .• · · . . . . 

(ii) ll,s of Co-r-porate Facilltk, for l-ndi-1-·uiual rolun.teer .J..ctit-ity . I by Stockholder, and Emplmjee,.- . . . . . · . 

• . l 

(b) Uie of Lao~ Organization Facilitie, for tndiui"tlual rolun- teer .:!cti-i•ity by_· Official a,· .l! emhe1•3 a·,ul Employee, . ..,;_ ·. -: . · · · These subsections apply to incliridun.1 ,·olunteer acth·ity such ns nn 

em player using his or lier office telephone to make ca~ls in connection . . 

.. I with a Federal election. These sections are not applic:i.ble to n corpo- • ; ration:s or labor organiz:i~ion!s ·use of fa.cilities for acti rities spe- · · ' citica.llv permitted to the corporation or labor orpniz11,tion by this 

Part. The use of the co~orate . or labor orgnnization ~s facilities for· 

• 1. the e:tempted activities is permitted. In addltion, these sections only 

go to the question of whether such use wo1.tld violate Federal law; . thev do not provide a _stockholder, employee or member with a. right 

to ~e use of the facilities. Indeed, these regulations are subject to the · rules ~d pr:ictices of the corporation or lnbor. orp~zation "9hicb · may in fact prohibit any use of the facilities in ·connection with n 

F ederu.l election. · The · Commission rejected an opt.ion· · which would have · prohibited 

. the use ·of corporate labor orJ?Uniza.tion facilities for indh·idual ,·olWlteer actirity .. The Commission. took the. ~sition that . if the stock- . 

I .. bolder, emplovee . or member re1mburses the corpora.c1on or labor . or~ization for the use, such use will not be a ,·iolation of Federal 

inw .. In determining the proper formula for reimbursement, the Commission rejected an option which would ha\9e required the stockholder, 

emplovee._ or member to reimbarse for all use e,·en if the use dicl not . · resul(in any increased cost to the corporation. or labor orgn.nization. 

Rather, the Commission adopted the 'present subsections which re- ·. 

1nire an indh·iduo.l to reimburse for occasional, isolated or incidentnl · use only to the e~tent that the corporation or l:ibor or2anization iricurrs 

e~penses. abo~e its normal ·operntin:z costs ns n. result of such acti~ity. · The amount of the required reimbursement would- be the Jmonnt 

of the increa.sed costs. A description of occnsional. isolated, or ind- · dental use is contained in .H (a) (1) (i)-(ii) nnd (o) (1) (i)-(ii) :n~cl 

n. ··safe ha.rbor' is provided in§~ (o.) (1) (iii). If the :icth·it:v is more · 

than occa.siono.l. isolated or incident:il. the corporntio11 or labor.orznni- 1.ntion must be reimbursed for the normal nnd usual rent:il char!!e .. · ·· ns defined in~ 100.4:(a) (1) (iii) (B), for the use ·of the f:icilities~· .. - . Subsection ( c) pertains to the. use of ·corpor:ite or Inbor or~nizntion facilities. such as :xerorini? or mimeo~rnph m:ichines. to p1·0- d11ce election materials.· If, for eJ:nmple, n. rn.ndidnte had his or her . hnnc1b!11s _reproduced C?n a. mimeo~ph ~achine o.wned by n l:thor 

orgnn_1zatJon •. the candidate would be reqmred to re1mhurse the lnbor · or~nmznt1on m the amount of the normnl nnd · usual ch:i.r;e for pro-
116 

ducing · the handbills in the commercial market •. The reiinbursement · must be· made within a commercially reasonable time. 

U~der subsection (d), a person~ther than:a stockholder,-employc~, 

official, or member-who makes any use· of corporate or labor orgamzation. facilities will be required to· reimburse in · the amount of the· 

normal and usual rental· for the facilities. Any person who rents 

corporate or labor organization equipment or tumiture, as for example a corporation might· Joan a candidate office furniture, _i~ required 

to pay the normal and usual rental charge for the eqmpment or. 

furniture used. . · . · · . . . · 

(e) Use" of Airplanes anil Other Means of Tranaportatitm,.-Subsection (e) .allows candidate~, candidate's agent or persons tra,·eling 

on behalf of candidates to use airplanes owned or leased by a corpora~ 

tion or labor or~nization which is not licensed to offer commercia 1 . services pro~ided that the corporation or labor organization is reimbursed in advance for tl1e use. The ·advance reimbursement is required 

·because the corporation or labor organization ·is nQt in the regular 

husiness of offering commer~ial transportation·· for crecUt. Under the 

standard reimbursement formula provided in § (e) (1) (i)" and (ii), - the amount of the·required. reimbursement will he known·in ad,·ance. · · · Candidates or persons· travelinl? on behalf of ._candidates who· use.· 

ears or other means of transportation owned or leased by a .corporation or labor or,ranizat.ion must reimburse the corporation or labor 

oriran\zation . at the normal and usual rental charge. The reimbursement is_ require~ within a commercially re~sonable. time since the 

amount ( such as mileage charges) wi11 not be known prior to the use. 

~ 114.10 Extension of Credit and Settlement of Corporate Debts. 

This section, which is a modification Qf Advisory Opinion 1975-39, . pro, .. ides that a corporation may extend credit to a candidate, politfonl . . committee or other person in connection with a Federal election provided that the extension of credit is in the ordinary course of the ·· eorporation's business and that the terms of the credit are substantially · similar to extensions to nonpolitical ·debtors. § (a). Procedures for . . the settlement of corporate debts are set forth in§ (c). If a corporate 

debt -is settled in a commercialltreasonable manner, following the pro- . cedures in ~ (c), ·the settlement will not be considered an ille~a-1 

corporate contribution. 

§ 114.11 Employee Participation.Plan. .. . . . 

This section embodies a port"ion of Advisory Opinion 197~2!1 pertaining to the establishment of an employee pnrtic1pation plan by Sun . Oil Company.- The _Commission ·found no legislative.history dealing · with t.hat portion of the· Sun Oil opinion. · . · ·.. . · . Under the prO\isions of this ·section, the corporation may establish 

nn employee savings plnn and pay for the cost of mnintaining separate · · ·bank accounts for participating. employees. The p]an must be made 

available to all employi'es of the corporation inc1uding employees · who are members of a labor organizatic;m (I (b)). The employees' . money is deposited in a separate ~ank account and the· employee must . . maintain complete control over disbursements from t.he account. Com- . ·: munications. about pa.rticip.ation. in ( the plan may be conducted by 

either the cqn>oration or the labor organization· or both ( I ( c) ) • . · 

The basis for this section is that the corporate expenditure for estab- · lishing ·and administering the plan is nonpnH:.isan, in that the. plan· 
. !Ill ·: .. : ' .· ·. .:·. . . • . : . . ..: .. ; .. - . •• . • . 

::;~ion ( d) . P.9rt:uns to th!'9 corporarion5 ff9bo, .Prior to th~ 

et!ectlve . date of. tliis A.~ established a. payt"Oll dedac:tion pl.in for 

employees ·other than sockholders and e:ecutil"e or a.dministn.tiTe p~r- . sonneL. li th~ employees were solicited ud signed ".P for the pa::roll ._ deduct1on pnor to the cbte of the .\.c~ the corpor:mon m:iv continue · the plan until D«ember-31, 19i6. • .. , ... .J 

............ 

; ~ : . . ~-!:· ·, 

. ·• . . :~ '·.:_: ;'.,; · ;.~.~--.·~;~}.Ji,.~·.;i:~-~~~:;~it~·~1Jt1l~:~:[~~-~£ij~fd;~~~&~}~;~~Ik~It •. ~;, __ ,j 
120 
121 

§115.2 .Prohibitions. · · . . . . . .. . . . 

The general prohibition of § 441c (a) ( 1) . is 'set forth . in § {a) .. The 

Commission has added the term expenditure to this regulation. The 

statutory · language, which is based ori Title 18, U.S.C., 1940 Ed., 

§ 61m-:-1 (July 19, 1940, c. 640, § 5, 54 Stat. 772) , is . .. . . · : . 

It shall be unlawful for any.person • • ·• .directly or indirectly to make any contribution of money or other ·things 

of value, or to promise expressly or impHedly to make any .. . such contribution to any political party, committee, or candidate for public office or .to any _person_ for_ any political . purpose or use. · . . . . · . · . . . ·. . . . . . \ 

· It is the Commission ~s opinion that the use of the term "indirectly" \ 

· ancl the phrase ''to any person for .any political purpose or use'! in 

the original statutory language indicates a Congressional intent to in- . elude expenditures as now defined in the Act. . -·• - ·. · · -: : . 

The orir,nal ·version of this section,· · which included. the .. term 

"indirectly ' was contained in· the 194:0 extension of the Hatch Act, 

53 Stat. 1147. Section 13 of the 1940 Act made it_1inlawful :"for any 

person <¥rectly or indirectly, to make contiibutions in an aggregate· 

amount m excess of $5,000 •· •• "Senator Bankhead, who offered § 13 · . · as an am_endment,stat~d on the Senate floor: . · · 

.. We all know that money is the·. chief souree · of corrup- . tion. We all know that large contributions to political·. camp_aigns not only put the political party !lllder obligation .to . the large contnbutors, who dem.and pay 1n the way of legislation, but we also know that .large sums· of money are. used . for the purpose of conducting expensh"e campaigns through 

the newspa~rs and o, .. er the radio;· in the publication of · all sorts· of literature, true and untrue; and for the purpose 

of -paying the --e~penses of · campaigners sent out into the 

eountry to spread propaganda, both true and untrue. 86 Oong. 

Record 2720. · · . . . -

r . . The ii1ferenee is that, by. the . use ·of tl1e term indirect, :Congress ·· 1 hi tended· the prohibition to exte1!d to the spending of . funds by a 

~vernment contractor 'for c.ampaum. purposes regardless of whether . ·the funds were given to the candidates or spent by the government 

·contractor.This argument is strengthened by the fact that contribu- tion and expenditure were not pi:ecis~ly defined as t.hey now are. · · Indeed, there was some q11eshon m the earlv forties as to whether · 1 R u.s.c. -~ ~10 prohibi~d expenditures. T~~e l!lnguage or the statJtte 

clearly forbids ~1fts rhrectb1 made t.o a cancl1date or his camra1gn · or~anization. The Honse Rpecin 1 Committee to · lnvesti~ate . Campa ll?Jl ·Expenditures. st.udied the scope. of·. the· t~rm eo??t~ibution in ~ 610 nnd conc.lniled that the Act. ·was mtended to prohibit such exP"nditure.s. H.R. Rep. No. 2739. 7~th Conl!·· 2d Sesc;. 40. The ]an~1~ap:e . of ~ 441c has always been broader in that it prohibited indirect. con- · trihutions and contributions to any person .for any_ political purpose _· _ or nse. · · . · · · · 

Jn addition, the present .Act reco'!'llizes that.expenditures made by .. 

· a p<'rson in cooperation. eonsultatfon~. or concert . wit.h a -candidate .· or committee is a contribution. 2 u.s.q. § 441 (a) (7) (:B). ·. _· 

.) 
122 

.- This subsection also incorporates the ·Commission's ·earlier Advisory · Opinion -197~~9 in which _.it determined that the prohibition 

extendeq :OJl}y to Federal ~lections ~nd did not inc~ude state .pr local 

eJectiQ~-~ · : : · · . . '. · .· · . · .- . - · · · .. · : . · < .. : . . § 115.3 . Coi-porations, Labor Organizations, Membei-sliip "Orgnniza­ ..... tion~, .Cooperati~·~~ an~ Corporatioiμ; withou~ Capital - . -. ; ·. _ .: . Stock. .. -. . . . - · . . - .. ' . . _ - . . -

· Thi~:· .seQUon incor}>Orates the· statutory language of 2 -U.S.C. 

§ 441c(Q) ,:the practical effect of which is to make corporations and Jabor corpQr.ations subject to .tl1e provisions of § 441b irrespective of 

whet.her the corporation or labor organization is a Federal contractor. 

As Senator Cannon stated: · -. - _ _ - · - - . , . ! '. ~ . - . . . . . 

. . . The. substitute also makes a modification of the section per­ .·. mitting solicjtation to segregated f1md~_ by go,1ernment contractors so that. it conforms to and is governed _by the revised · provisions. which relate to corporations and laoor ·organiza- . tions .. -122 Cung. -Record S4151 ( daily ed. March 24, 1976). 

§ 115~5· Partnerships. · . . . . 

.Sl!b~ii?n (~) incorporates AdviSC?ry OJ?inion !97~1~ n,e Com-. - m1ss1on reJected a~ amendment to th!s section w~uch ·1!ould ha,:e. al- · __ ]owed a partnership to use partnerslup assets t~·-est.abbsh a p~bhcal · committee to make contributions or expenditures in Fecjeral elections. -!t ~as·the· ~~Jl!ission's opinion.-t~at. the statutory pro~ibition on 

md1rect contnbut1ons wou]d prol11b1t.tb~ use of partnership ~ts to 

set up a. political committee. · · · · · 1 . . . 

! , .§ 115.~ : :Jndividuals and Sole Propriators. _ . . 

· · This·secti~~ follows Ad,·isory (?pin.ion 197'5-31. ~ spo~se· o.f a Fecleral contractor may make a contnbuhon or expenditure m hIS or her · name rega.rdless of .. whether ~he family i~ a single or double income 

family.. · · · · 

. § 115.6 Employee Contributions or Expenditures. . _ _ 

. This section niakes ·clear· that the prohibitions ·of -this Part do not . · extend to employees of-Federal contractors. - : · : · ·_ . 

} 
.. 1134 

ED'Ll~.\TIO~· A.~ J~tAffO~ OP TD Paoto11:D lbGn.\ffO~ 

. o~ Co~:mo~ FCf.l.~C'Cfo~ ·p.lffl ·1!0-1~ . · · 

P.dT 121 mu.IL NOffllO~-. f 190.1 · Scope. . · · · . · . 

This rtnlccion ii inttndtd to interpret :and IPpi~ ~ ~ .S.C. ! 00.), 

and .! t=' ~,.c. · I ~31 ~bich proryd1 for optionAl public tiancinsr ,,i 

pra1dtnt1al nommatm;con1Uttons fftr both mAjor and minor partiH . 

. . . --· .• . .. .. : . . . . . ' - .. 

. ··has·· 

reportu:r · rtetuinmtnts,. II. '.well· u· limit th~ &IDOQDt of ,.tj:pendiu1.,t . . chat th• i•m• mar incur for the conYtntion. ·~or. part111 are tn· · 

titled . to S2 mlllion tach from th• Presidential Eleeuon C~fAiP. · 

Fud; minor. parti~ ':rt entitled to ~ pn;,portiou~• ~re_ of .S:. m.11· 

lion butd up_on the nuo of Yates rtet1Ted m che pl'ICIClina pmultntsal election to ch• TOtes nctiTed b• major P.•~ eanclidaces. Since no . · major party. pnsiducial candidite nceh·ecl the 111mcorr minimum of 

a pm:tnt of thl tow popular TOCI iA 1,i:!,. then ii DO minor putt U.At · -can qaalif7 for COATtAdOll funds for . the 1Dil conTtntion. In IDT . eYenc, major and minor parties mny not spend mon than 12 million . · for the CODYtDtion, whetlier or not tliey pcu'ticipat1 in public 8nancinr. · 

I ~"O.! Dtbidou. · . _. 

- Thi d.anitiom found·in !8.t"'.S~c. 3 900-l-an applicable to I ooos.· 

Acco~ly, thON dt!nitiou in I 900-l which. an nleTanc to con-. 

Ttncion ~CUii haTe betn Hleciea and incorporated into the rt;,i~ laticm. .. ' . . . .· . . . . . . . . (a) p~miuion.--Thil panar:1ph_ dtfin• the Ftdtnu El~.ction · · · Comm1111on.· . - -· · . . . . . . . · · ·. . 

. (b) Fund.--Thil debicion 1rhich follows !t C'.S.C. 1900-2(5) de. .. . acribes the Presidential Election Camp~ Fud trithm which r!i, · · · Secrtt~ ot ~· _Tr1U11,ff. .hu· -~eel 11p~rate accouu · in the · · ·_zwneof~tnational~.fo~~~onfbwl~.... . . . ( c) J/ a1ttr PG!"r.-nis d1hinon follows :!6 C' .:,.C •. J 000-2 ( 6) ed · is pertinent with respect to the entitlements proYisio~-of this rep· . · lation. · . . · . · · · ·· (d) J/iflor P~.-nm delnition follows !I "C.S.C. I 000-l(~l and· 

is ~rtiDem wi~ nspec:t to the mtidemec pronsiom of this np· · latloD. ·. · . . · . . . · . . . - · (•) ;\·,v. P~.-Thladthitioit follows 26 C'.S.C. I 000-:!'(8).-·· . . · (f) Ctnwffllion E~11.-This definition doe1·not ·~~r in the · · statue, u d~ for_ exam_ pie, '-qua~ed c:unpai1'!j'me~ ill !8 r .S.C . . f 9082(0) With ~ to· the pnma11 mat pannent· account. . Acconμn,t7, o~.wufu¥oned ~sed .upo~ ~be inp~c ·~tiTtcl 1,y·the· · Comm,mon from the m&Jor parties descnbma tlie nnou expenses inc:mnd in condu~ a connntion. · . . : . · · . · . Subsectiou (•) (1)-(e) (11) an not esclWii'ft espenditun cate,ories · 1tt th•r do pYe the u.tional parties ,uidance for cletermininc -what is 

·or ii not a connDtion ·~ since no national part1 !DAT_ incur 

conYention uplDN! in uct11 of 12 million.·-. . · · · · • · · · 

(r) S,on1~.-Thia parapph de!nes the Secret:t.rr of the Tnu- ·. VY of th• t'Dltid Staces. · . . · · . · · . . · . ·(h) Bt>1I Commillt1.-This dehirion relates to Po.rt 1!1 :,.s to the .. i-rmiaible scope of bOR committee accincy. · 

·._.·-.• ~r·.-.. -..... ~~ .. ·.:.~-·.·.···.-···-·---:--·- .• ···-... -· .•. • 

.. . . .. .. . . . ... ::.. . -·--...... ,·--4-·•r··:·~ ··':... • -. •· . -: '·"'. . •.. .. ~- . 
.... ·ll3s .. PART 121-LllIIT.A.TION OF EXPENDITURES 

SUBPART ...4...:.._NATIONAL . P.ARTY LiMITATIONS 

§ 121.1 ·. Major Parties. . . . . . . . . . 

This .section follows 26 U:S.C. § 9008( d) (1) which states that major pa1ties may not incur expenditures ti1at exceed their entitlement, 

nnmely $2 million. · · · . .· . · . · · . 

• /ia6 · ..•. 

§ 121.2 :Minor Parties. . . . . , . . . . · 

This section follo,vs 26 U.s:c. § 9008 ( d) (2) which· allows minor 

parties to spend the same amount for their conve!1tion as major parties. 

1 § 121.3 . Exception. . . · . . . , · . 

I This section follows 26 U.S.C. §9008(d) (3) :which gives the Commission the power to authorize the national committee of a national 

party to exceed its $2 million expenditure ceiling due to extraordinary ·· nnd unforeseen events. In no event will additional federal money. be · certified. Such extra expenses must be defrayed with private funds. 

· § 121.4 Expenditures by :Municipal Corporations and ,Agencies~ ·_· 

. This section allows for certain expenditures to. be· made by munici- . pal cor:eorations .and agencies without the value of ·those. expenditures bemg counted towa~ the national part:y's $2 million expenditure : · · 

ceiling. For example, a city may contract with the national party to 

provide ~ertain m~icipal service~ an4 faciliti~ as part of an overall 

P.ack~ge m attractmg the .c<!nvention to ·that·city. Indeed, a. rough es- . tunate shows at least $4 mdhon worth of expenditures. If this expense. 

were imputed to be an ex;eense by the national party; the$2 million 

statutory expenditure ceiling would ·be unrea.listically.Jow. See ·also ·· a similar justification for§ 121.5~ · · · · · . · · · . . '. ·. . . 

§ 121.5 Discounts by Retail Business Concerns~ · · · · · . 

· This section merely providesthat normal business discounts given to 

the national party for the purchase of goods or ser\'ices for the con~ · vention will not count.toward the expenditure limitation of. the na~ 

t.ional party. ·If the· discount is greater than· the normal one based upon. 

the q_uantity sold, then' :that· 'excessive discount becomes,. in eff~ a: 

contnbutio~, and the:feby r~d~ces the publi~.:fu~d entitl~II!e~~ by.that 

nmount. Tins langua~e 1S SJmtlarto tnat·wlilch appea~d m advisory . Opinion 197~1, published in the.Federal Register on July'l5,'l975. · · · ••. If•: · • ' ·• · ' - • .. • · • ' • • §· 121.6 . Samples and Promotional l\Iatedal. · . ·~,:., · · · · · .'. :: 

This section basically permits busiriesses to give awnv free samples 

of their products to the convention attendees provided that'such prac~ 

tice is in the ordinary course of business and 1s nonpolitical in nature. 

These expenditures will not be considered an impermissible contribution to the national party since it appears that Congress did not in- · · tend to restrict normal cominercial practices that . are nonpolitical. · • Consequently, the Ynlue of the.samples, products and promotional ma- .. te.rinl do ,not count toward the $2 million expenditure ceiling. . · 

. § 121.{ · In-Ki1icf C~ptr1~utio11s to the Host. Committee. · · 

. This section permits local ·private businesses and labor organizations 

to contribute office space, typewriters, and the like to the host corilinittee for its administrative use. Such in-kind contributions are presumnblv not politically motivated but are undertaken chiefly to promote . ecoi1omic activity ancl good will of the host city .. 

Sunr .. ~RT d-DoN.~TION OF FuNos nY Loc.,~L B~sINESSES. AND LAnoR· . · ·. ORGANIZATION;. Am~RTISING . . .. :~ .• 

~ 121.8 Donation of Funds to Host Committee. ' . . . . . 

This section permits local businesses nnd -labor organizations to make 

donations of mon~y to the host committl'e to be nsecl for purposes de-·: 
137 

sigJ!ed · to promote a good image of the host city to. the. conventio~ · at- · tendees. The section will· further permit the donor to place nonpolitical restrictions on its contribution, such· as earmarking the gift. for 

a particular project ( e.g., to pay for "Welcome" signs, etc.) or to allow 

the donor to receive some tr,pe of acknowledgement such as a "Cour- · · tes:1- of X, Y,·z Companies' notation or reference~ As provided.in.the 

explanation for § 121. 7, these donations are presumably commercially · · motivated rather than politically, and thus will not· be considered an· · · unlawful contribution. · . .. · . · . 

§ 121.9 Use of Funds l,y Host Committee. . 

· Subsection (a) . allows the host committee to use the contributed . funds to defray expenditures made for the purpose._ of promoting a ~ im~~ of the city to the convention atten.dees. . _·. · _ · . . . · · . . . . 

Subsection (b) ~rther ~xl>ands the scope of h~ committee act.n·1t.y . . . to allow the committee, 1f 1t so chooses, to use its funds to defray 

convention expenses of the national patty, provide4 that t.he source of 

these funds was local retail businesses -( whether incorporated or not) 

· _ and provided further that the amount contributed. was proportionate 

: to a reasonably expected commercial return. Funds used in this fashion 

· • shall be made from· a separate account maintained by the ~ost com- .· mittee. · · · . · . · . . · 

· An· argument could be· made that the dollar amount of conyention · expen~ such as renting a convention hall; should count. toward . the· 

$2 million . ceiling whether or not the convention ball ·or seats were 

rented. directly by the national party or by the host city and given to 

th~ ~ti~D:R~ P.arty. Othe~se. , a· national party· could avoid t!1e $2 

mdbon lumt Just by havmg_ someone else ( e.g., the host comnuttee) 

pay for the convention expense. However, it appears from the testimony of" the major parties before the Commission that the Congress . -in d~cidin~ upon a dollar figure for expendit~re limitation~ took into 

consideration only those expenses actually paid by the national partv 

for the 1972 convention ana ignored in,1ts computation the valu~ of 

servic.es provided by host cities and committees. · Section 121.9, therefore, represents.an interpretation of·26 U.S.C. § 9008(1) that the $2 

million limit ap~lies only to expenditures made '6y tM 'IULtional party, - and that expenditures made by priivate · host commltteea under· cer- tain restrictions will not be counte~ toward the ceiling. ·. ._ 

§ 121.10 Expenditures by Individuals. . . ,. . 

·_ Sqhsection (a) provides that if persons attending the con,·entfon~ ·:· . · · · .1 including candidates and d~legates, pay their own Way, or if pnid · · on their behalf by the State· or local committees of a political pnrty~ 

those expenditures will not count toward the party's limitation. · • 

1 Subsection(b) concerning legal and·accounting fees reflect the 1976 

[amendments and provide that the payment by the regular employer 

. : of a lawyer or accountant will not count as an expenditure toward:the : . · ·; $2 million limit a~d that,. unlike the ~imilar provision in Title 2 for · · _legal. and accountmg services, ·expend1tures are 'll,Ot reportable. However, any pa~ent made by the national committee for leial and 

aooo~nting services do count . against the expenditure limitation and 

are tlius reportable. -._ . .· . . . · · . · 
. 138 

. PART 122-ENTITLEMENT TO A:ND DISPOSITION OF. 

P.A.YlIENTS FROII.THE FUND . . 

§ 122.1 Major Parties. 

: ·· This section follows 26 U.S.C. § 9008 (b) (1) which entitles major 

• parties to receive payments not. exceeding,in the aggregate, $2 million. 

§ 122.2 . :Minor Parties. 

. This section follows 26 U.S.C. § 9008(b) (2) wltlch entitles minor 

parties to receiYe a proportionate share of $2 million J>ased. upon the 

number of votes they received in the preceding elec,tion. · 

§ 122.3 Adjustment of Entitlements. 

Subsection 1.2~.3 (a) ~ollows 26. U.S .. C. § ~008 (b) (~) which. pro\·idrs. 

for a cost-of-livmg adJ~ment 1dentical'to th~ adJustment foun.d m . 

. 2 u.s.q. § 441a. Subsections (b) and . ( c) p~ov1de for ft}rther adJust~ 

ments, 1f ne~acy, due. to any mterest received on t.he m,·estment of· 

public: funds and the receipt and use of anr prh·ate funds~ .·. . 

§ 122.4 Investment of Funds.'. . 

This section permits the national cOilllllittee to in,·est their public · funds, for example, in a savings account or Treasury bonds but. deducts the income so generated from the party's entitlements in order 

to preclude an overpayment. . . · · . · 

· § 122.5 . Use of Funds; 'Candidates and Delegate Expenses. 

·. This .. section follows ,and interprets 26 U.S.C. § 9008 ( c) which limits · t,1e committee's use of public funds received, includini the ~rohibition · ·against paying for ~ndidate and delega_te ~xpenses with public funds. 

Both _Parties have mformed the Comm1Ss1on that·some· delegates are 

· aoo simultaneously serving as official convention· personnel, and thus, 

their. expenses should not ~e .considered ineligible to ~ defra:ye~·. wi~ 

pubhc funds. <The Commission felt .that this exception would be m · 

keeping with the intent of Congress of prohibiting the use of public 

funds for candidates and delegates since a delegate/conV'ention em~ 

ployee would have incu1Ted a properly defrayable expense·anyway 

even if he or she were not a deleg'!l,te. . . . . · · · . . · The Commission also provided for a prohibition in · this section · against the use of public funds to incur expenses that violate Federal . · . and State law. Such provision is found j.n 26 U.S.q. § 9002{11) (C) . ··and §.9032(9) (B), the other two categones.for pubhc financmg, and · is considered by the:Coriunission to be sound public policy to include · . . it in this section also. · :: . . . · . · · ·. . . 

PART 123-PAYMENT PROCEDURE FOR PRESIDENTIAL. 

··N01IINATING CONVENTIONS 

§ 123.1 Optional Payments; Private Contributions. , 

· · ·. · This section makes. clear tha~ the publi~ financing of convenHons is . optional, and accordmgly, national parties ll}ay elect to. receive ~11, 

part, or none of the a!Ilou!lts that they are en!1tled to receive. A party 

1s free to accept contr1butions for the convention so long as the amount· 

of contributions when added to the amount of public funds requested, 

does not exceed the expenditure li~itation of $2 million. . . . . 
l 

· § 123.2 ·Transfer to the Fund. 

This section follows ~6 U .. S.C. § 9~08(f) whi~h directs the.Secretary · to transfer to the Presidential Election Campa1~ ·Fund any amounts. · remain~ in the treasury accounts· of the .respective parties after the 

convention. Funds found remainjng in the party's account could exist, . . ·for· example, where the national committee elected not to receive its .· .. fun entitlement or where its full entitlement was not paid due to ~d- .. 

. j.ustments because of any interest generated from investment of public · funds of the national party's receipt of private contributions.. . . 

§ 123.3 Information Required to Qualify for Public Funds. .. ·- .. 

. This section as well as § 123.4 interprets 26 U.S.C. § 9008(g) which 

empowers the Commission t~ devise a; payment procedure "in such . form and manner and at such times as it may require." Section 123.3 ·. outlines its procedure whereby the national committee of a major or 

·: minor party files an application statement to qualify for public fuianc­ . ing, includmg the pertinent information specified in 2 U.S.C. § .433 (b) 

as required by26U.S.C. § 9008(g). - · 

§ 123.4 . Payment Schedule. -• _ 

This section provides that· payments be· discussed in inst.allments 

rath~r than in a.lump-sum payment of $2 million. ~e statutorv j~ification for the mstallment method of pa~ent derives from tl1e lan­

~age of 26 u~.s.c~ § 9008(b) .(1)-:(2); namely, that a party is entitled 

to payments m amqunfa which, m the· aggregate shall not exceed" a . 

s~cUied amount ( emphasis added). . · . . .· · . _.· · ·. · · Subsection (a) thus outlines the steps a national committee must 

follow . in order to properly submit · an initial payment request.· The 

··.national committee .must set up a separate bank account solely for the · . . . deposit of public funds to prevent commingling with private funds in 

order to. ascertain that public funds a.re used only in accordance with . · the law. The initial payment request may not exceed 30 percent .of the 

party's ·full entitlement and· must be submitted ·by a ·statement oi · pro.jected expenses for the quarter in _which the request is· made. In 

conformity with t.he statute, payments are made aYailahle on July 1 

; of t.he ·calendar year preceding the year of the ·convention. ; 

Subsect~on (b°) prmidesfor a system of quarterly payments beginning with October 1 of the year prior to t.he c~mvention and after the· 

nn tionnl committee has qualified· for public financing· and. recei ,·ed its· 

initial payment. . · ·. . · . · · 

Subsection ( c) permits the national committee. to reqnest payments. 

more frequently than quarter Iv if it appears a deficit will occur. : . Subsection ( d) directs the Co.mmiss1on to certify for payment the 

nmount requested based upon the projected expenses, subject to deduc- . tions ns the Commission may determine. · _ · . . - · 

Subsection ·(e) ·permits ·the Commission to withhold--·payment of 

10 percent of the national party's entitlement ( e.g., $200,000) until· . . . the national committee lias subniitted their post-convent.ion 'financing· ·· · report required by 2 U.S.C. § 437, i~ order to ass~1re that if any repay- · · ,ments are required, there will be soine unexpended funds available for ; · 

:repaJ'ment purp~ses. -· .. -. · . . . . , . · . - : · . Subsection, (f) requires the Commission to certify all payme11~ .. re- .. · -quests within 5 working days aftertheir ~nbmission. : . . · 
f140 =- ·PART 12~POST-D1SBURSE}fENT PROCEDURES. 

§ 124.1 Repayments. 

This section implements 26 U.S.C. § 9008 (h) which gh·es the Com•· 

mission the same authority to require repayments as it has under· 

26 U.S.C. § 9007(b). Accordingly, this section follows § 9007(b) by 

requir~g repaY.!Dents if (a) · the payments to the national committee 

exceed its entitlement, (b) if the national committee's convention . expenses exceed its entitlementt ( c) if the national committee ac:.~· 

cepted private contributions wnich . when added to. the payments · · received exce~d its expenditure limitation, or ( d) if any public funds · were used for unlawful purposes. Repayments may be either deducted 

fro)!l ~y payment due the national party or be made payable by the 

national party to the Secretary of Treasliry. 

§ 124.2 Notification of Need for Repayment. 

This section follows 26 U.S.C. § 9008 (h) , which refers to the requirement of § 9007 ( c) that the statute of limit at.ions for notifications 

oy the Commission for repayment is 3 years from the close of the· 

conventjon. · · 

§ 124:.3 Examinations and Audits. . 

This section follows the mandate of 26 JJ.~.C. ~ OOOS(f!) that the 

Commission shall conduct an audit no latei- than December 31· after· 

the convention.· The discretionary audits and examinat.ions ·provided , for in this section are authorized under 26 U.S.C. § 9009 (b). . · . 

PART 125--CONVENTION. RErO;RTS 

§.125.1 Reports.bymmtlcipal and private host commit~.-- . 

This section is···required b_y 2 U.S.C. § 437_ and spe~ifies -that any 

group.in dealing-with officials of a.national political party,.including · cities, to file convention.'.repo$.· Howe\"'er .. no report 1s required by a 

municipality if the convention is not held in that city. __ .. · . · .. ·. 

§ 125.2 Reports by political parties. 

· This section is require4 ·by 2 U.S.C. § 437 nnd specifies that the.na-. 

tional political party file convention reports, but. exempts t.hose focal . · party committees from reporting under this section that only defray · · delegate expenses or sponsor activities at the con,·ention. 

. § 125.3 Post-convention reports; time and content of ~ling. 

Subsection (a) is required by 2 U.S.C. · ~ 437 and specifies the filing 

date and content of the post~convention report. required by the groups 

indicated in§ 125.1-.2. . · · Subsectio!1 (b) P.r«n·i<i~s fo~ continu<?~ts quarterly repo~i_ng after . the convent.ion until the reportmg comrμ1ttee has ceased achv-1ty. 

Subsection ( c) provides for the filing of a final con,·ention report. 

~, 125~4. Committees receiving Federal funds; quarterly reports. 

Although not explicitlv required by the,statute, this section req_uires 

committees receiving public funds to file quarterly reports in order 

for the Commission to monitor the spending of t~ose funds. The C'0t1nmission's authority in this· area is found. in 26 U.S.C. § 9009 (b ). · · · 

· . "§ 125.5 Conventio~ .expenses; definition. . . . . 

This sectio~. merely cross-references· the definition o, convention ex- penses to Part 120. . . -
. . . • I • • 

.. .... ·-·-·- '-'', . - .... : --··- -·-····--. ·.·· ····- ·---·-- ·-- .... ··.- --- . . . . ..... 

' . 

·154 · 

EXPLL'T.!.TION . · ...\.~L> Jt7STIFIC ...\.TIO~ . OF THE·. PRESI· 

DENTllL. PRDllRY·lL!.TCHI:X-G F'Q.'1) REGCL.\.TIO~, 

PARTS ·130-134: . 

Pa"l9 130.-DEFI~nIO~S 

. § 130.1 .. :..l~thorized committee .. 

This defi.n.i~ion generally follows 26. 'C.S.C. § 9032 ( _l) •.. 

§ 130.2 Political committee. . . . . . . . . . 

This definition follows 26 U.S~C. § 9032(8). It clitters from the defi· 

nition of "political committee:, in 2 C.S.C., § 431 ( d) in that there is no 

$1.000 minimum activitv requirement and that an individual milv be o. 

~litical conim.ittee un<ier this definition, but ·could not· be under 

Title 2. · . 

§ 130.3 ·· · Candidate. · . . 

. This definition follows 26 'C'.S.C. § 9032(2)~ :is nmended·by the 19';'6 · . !LDlendments 1:o ac,ude a person who· is no longer an o.ctive c:ind_i~lace 

m. more than one State. 

· § 13().4 ·Commission. . . . ·. . . . 

This defuiition. follows· the' Federal· Election Commission. 

· .·· . ·. § 130.5 · l!atcbing . payment . account. · · 

. . This defuiition follows 26 u.S.C. § 9032 ( 5). · 

. : § 130.6. . lratchirig payment period. 

This definition follows·.2s t;.S.C •. § 9032(6). 

§ 130.7 · Primary election. · · . · · · . · · . . . · · . . ·. · · . . . 

This definition follows 26 'C'.S.C. I 9032(.) 11nd ilicorpor.ites bv 

reference· the defuiitfon of ··election" in § 100.6 of the proposed dis~· 

closure regulations. . _· 

§ 130.8 liatchable •. e&mpaign contribution. · · . . . . . . 

· ·· .!.lthou"h the title of this definition does not :ippear e:i:plicith~ in thP .· statute, tlie language of 26 U.S.C. -ij 903" makes it clear that· noc· all .· .· contributions are matchable. The mn.1or statutory restrictions redected . · in this defuiition -are that contributions must be a gi~ of money made . . . bv a written instrument; and onlv the first S250 is .to be ~onsidered . matchable. Under § 130.S(a)(3) and 26 t7.5~C~ § 9034. the contribu- ·. 

tion must be. ~ceived. by the _ca.ndi~:ite on or a~er t~e first ~ay,.of the.· . calendar year unmedin.tely preceding the pres1dent1:il election. Ho"­

ever, the statute is silent as to the cut-off date for receiving n. matchable contribution. Considering the testimony receind .. on this poinc . · from the public the Commission believes :that designating December :u . . .. following the l~""t dav of the matching period as the cut•otf dace_ is .. · . ~uitable,since, to use" thelast day of tlie matching neriod a.s control- . Im,r, would be unfair to.the nationa.l_party who held their. convention · earlier than another pa.tty. Howel"'er, Part 133 ma.kes clear;that con· 

tributions received after a. candidate is nominated will be matched onlv · to the e:nent of outstanding debt.s incurred before the nomination. . .. · .: Within this definition, a. "gift of money made by a .writ.ten instrt1-. 

ment:' has been denned in§ 130.S(c) to meo.n a check. money order~ or 

a~y .other-negotia.b~e ~rument p~yable. on demand ~-the ~:uididn.re 

or his or her committee. The contnbutors full.nnme, s1gn:it_ure:- mall- . 

I. 
. 

1 •• . ~.) 

· ing add~, the amount and date of the gift, mJJSt appear on the instru- ment or on an attached record. · · · . · . - · . . Furthermore, this definition pro,ides for mntching contributions in . the form of c~ec~ dr:iwn on ~artnership accounts or :i.c~ou:nts of incor· 

porated associations and bUSlllesses so long as t~1e n.ggregate a~ount 

of the ch~(s) ~oes not exce~d ~1,poo :,.nd that lt be accome,1n1~d by · documentation signed by the mdinduals to whom the contr1but1on !5 . 

attributable. This _policy is in accordance with the Commission!s deci- · . · 

sion in • .\.dvisory Opini(?n 1975-1!, published in. t~e f eder'!-~ Re1ister ·. on September 3, 1973 at page ·40a.4. The <l'omm1Ss1on·s pos1t1on m the 

resru}ation that contributions from political committees are not m~tch- · ·abfe is based on it:s inte~pretn.tion of the1 last sentence in 26 C.S.C. · . § 9Q34(a.). . 

§ 130.9 . ~ onmatchable contributions ..... 

This section reflects the last sentence in 26 t:.S.C. j 90M(:,.) which . explicith· e3:cludes certain . categories of contributions . from . being . matchable. . . · . · : . . · . . · · . . Subsections (f)-(i) reflect the Con:uni~ion·s opinion thnt cert:iin· • . 

"gifts of monef . a.re, on closer exa~nntion. not really pfts since the~ 

.donative inten~ necessary to make a. gift is_lacking. P=?-rticufar,ly!" sub-, . iections (h)-(1) follow Internal Revenue ~enice· Rulings i2-411 and 

72-419 which exclude certn.hi contributions from the category of poli- · tical contributions that are deductible •.. · . . _ . . . 

·· § 130.10 Q'unlified cmnpaign e~pense. 

This definition follows 26 U .S.C. § 9032 ( 9). 

§ 130.11 . State. 

This definition follows 26 U.S.C. § 9032 (10). 

P.utT 131-EuGma.rrr FOR P . .\nIL,-rs · 

§ 131.1 . ·Candidate agreements. . .· . ; . . . . . . 

··. · . 'fbis sectio!l genera.Uy follows 26. -C:-.S.C. § 90~3(n)o.nd a~lcls the ncl­ .. ditional requirement tliat the cnndidnte a~ee to comply with .the djs­ . closure requirement of Title 2. From the -Commission!s experience. it 

is .. believed that such a condition is necessary to ensure prompt dis-· . d~re :t,y the candida.te. The n.uthority'. for adding this extra require- · i-_: ment is found in 26 U.S.C. §9033(:i) (1) ~ (2). . · · . . .· · . _. ' · -

. · J . §-131.2 · Candidate certifications, threshold ~mowit. . .· .. ·· . \ _ · . 

· ! , . This section basicallv foiloff"! 26 't;.S.C. ~-9033 (b) and prondes for l !he order.ly procedure of sub~itting .to· the·commissi~n: the n:cess:iry ' ·1 · .mformat1on and documentation. to mdude .. photocoJ?1es of cnecks t1s 

well as the residential address of e\"'erv contribt1tor .. The Commission 

' .· concluded, and the candidates. concurred •. that photo or microfilm 

copies of the checks is the best wav to a.ssure that onh· acceptable 

contributions are being matched .• .Uthou2h 26 t:.s.c. ·~ 9034 require~ 

'-m!llling' address", the Commission feIC it necessnry to require t~1e 

·· res1dent1al address, at least for. purposes of the Sl00.000 threshold. m . 

. · , order to verify the state ·residencv· requirement since the mailin!? nd-

.. dress of & contributor could verv well be t\111 Ollt•Of-~fate post office bo~. 

Section 131.2(dl~~ermits the Commission to condttct nttdits tmder · the authority of.26. U.S.C. § 9089(b), and mny. in: that c:ise. _chOOS,! . 11-Tl~fT~11· . 

I I 
156. 

to w·ah·e · the c:indidate submission procedttre of § 131.2 ( c) ( l) and 

(c) (2). · . . . ._ . . · · ·· · · .. · 

Section 131.2(f) gi,es the Commission the power to cut-off matchin!? 

{tmds i£ o. cn.ndid~te. knowi!lgly e~~eeds t.he e~P.e~diture limit in e:ic!i 

~tate. The Comm1ss1on believes this section will not onlv be the best 

deterrent to O\'"erspending but th:i.t it is also implied by the stiltute 

since the· cnndidn.te breaches tho.t a2reemenc, he or she is no .. I0n2'er ~~~~~ - . .. - § 131.3 llatching pu.yment threshold req1.:1ireinents. · . · 

Once the cn.ndida.te makes . the submission that he or she has · met 

the threshold, this section provides for the J>rocedure for prom pt l,; 

determining whether or not the can~dnte has m fact met the threshold. 

j 131.4: lI:i.tching payments in e~cess of threshold. 

· Once the threshold determination has been made under § 131.3. the· 

cim.didate is notified th.it he or she should mnke a submission in goocl 

order of the documentation of all matchable contributions up to n. 

s~iaed da.te. The formal determino.tion_by the Commission that the 

candidate has met all the requirements of 26 'C.S.C. 3 9033 is p1·0,·ided · ·by § 132.1 below. 

§ 13t.5 · Candida.ta Entitlements. 

This section follows 26 U .S .C. § 90.'34. · 

. § 131.6 E~encliture limitation. 

This sectjon follows 26 U .S.C. § 90~~ (a.). 

P .1JtT 132-Cau.1: !CA.TIO~ ,U,> DISBO.SD:CE~-r . 

§ 132.l : Initial certification;. . . . . 

This section follows 26 U.S.C. § ~036 ( n.) •. · : 

. § ~32.2 .!.dclitionn.l certifications. . . . . .· 

· This section alJows for the submission of requests for addidon:il ce1·­

ti1icntion· on tlie first. and third l!ondnn of e:1ch· month .:ind requires . the Commission to certify to the J:reasurv within 15 cn.lendnr d.1.l"S 

the a.mount to which the c:mdidate is entitled.. · . · · · • . . , ' 

· · § 132.3 . Payments and Deposits of Presidentfal. Primary lfatching .· ·· Funds. , · · . · .·. ; 

This section follows 26 'G.S.C. § 903r(b) .1.nd 2 'C'.S.C. § 4:3,b(:1.J{l) . 

_._(a) (1). . . · . .· · ·. . . . . · 

·i 132.4: ··. Insufficient -Documentation .. ·_ . . 

·, This ·section provides for the_-authority of the Commission.to reject-. 

for mn.tchin!? n. contribution · which l:icks sufficienc documentation to . ensure that the. contribution meets the defi.riition · of . --match:i.ble~' in 

. § 130.S._ ·. . 

§-132.;5_ Certific:i.tion Revie~. 

This section provides for an internal Commission renew to settle 

.disn~ments over what is a.nd what is not. ma.tchnble . ..Uthouah the 

sta~ute does not provide for such a provision! some. type of Commission. 

renew was suggested bv nearlv a.11 those who testified :it the hear.ng:s . . :lS being a. practical procedure" which would l>rovide a. middle ~ou.nd 

and hopefully ob~inte the. need to resort to Jttclicfal renew under ~6. 
157 . - . . . . 

. U.S.C; § 904:t. If the ·candidate is not satisfied with the Commissicm . decision, judicial review of course, remains· available. · · · · ·, 

PART 13~TEIWINATION OF PAY:ltE...~TS 

· . · This entire part ~s made necessary by the 1976 amendments which 

: added a new subsection. ( c) to 26 U.S.C. § 9033. . · · . . .. · 

.\ § 133:l C~ntribut~on of Cert~ficat~on. . . . .· . · . . . . . .-

; This section allows the certification prooess to contmue for 21 days 

! past the cut-off date of December 31.as .the last.date a contributio·n 

must be received in order to be matched. . · . . ·. : . . · 

· .. : § 133.2 : Ineligibility dates defined. . . . . . 

This entire section· follo~s 26.~.s.q., 9033(c) (1). Subse~tion (a). 

defines the date that a candidate 1s mehgible to receive matching fmids . ... !o be the d!Lte ~{>on which the candidateis.no longer acti¥ely con~uct- . mg campaigns m more than one State, either because the ca.ndidate 

admits the fact or upon a finding hY, the Commission of the inactive . status.· · ·. 

Subsection (b) defines the other ineli~ibility date to. be 80 da~ fol- ·. lowing ~he date on the Second Consecutive Primary Election in which 

the individual receives less than 10 percent of tl1e num~r of popular · ,·otes cast in that primary. Although subsection (b) allows the .candi.;: · date to certifI to the Commission that he or: she is not a~tive in that. 

~rimary a~d t~erefore ~!)uld not be count~d, the Commission .is· given · · the authority m Subsection (b)·(2) to make a contrary findmg. .··.:-

§ 133~3 Use of Matching Payments; Net_ Outstanding Campaign 

Obligations. · . 

· · Subsection (a) follows 26 U.S.C. § 9038(b) (2) tha.t matching funds . cari only be u~~ to defray ''qualified ca~paign expenses". ~ecause 

"quali~ed campaiw.i expenses" ~an only be mcurred by a can~idate. or . · .. authorized committees, · subsection (b) states that expenses·_ mcurred· ·. i after the date a person is no longer a candidate are simply not quali- . : fled. Therefore, matching funds can only be used to defray expenses 

incurred while the person was a candidate. · . . . · · Subsection ( c) · provides for an accounting definit.ion of outstanding . debts which is designed to maximize the use of prh,;ate ~ds _to liquidate debts rather than plan an undue burden on· .pμbhc funds. · · Subsection (d) follows·the·legislative intent of cutting off funds to . . .. \ inactive cnnqidates except to defray expenses incurred before their .·. · · ineligibilitv. Therefore, if a campaign bas no debts on the· date the · \candidate. becomes ineligible, no further matching funds are forth-

.. \\coming. Instea. d a re. pa. y~en_t is requir. ed. based. 01.1 _a_ percentage of t·.he. _·. sur_plus in the campai~ ·account as aut~orized· and compu~d by 26 · u.s.c. § 9038 (b) (3). . . . . . . . · i·· If the campai~ is in the deficiton·the date the candidate .becomes. 

ineligible, subsection ( e) provides for the continuation Qf _the match- : ing process until ~e. debts a~ liquidated. . -: , : , . . . · ·. . · . 

:§.133.4 .. Dete~~~ion o~ ~nacti~e-Candi~a~y. . .<. , · .. _··. 

This section 'gives the Commission· the -authority· to· find ,~hat a· · .· candidate is no longer active in more than·one State with proper·safe- . guards for notice and due process. Paragraph (e) ·provides suggested } - . . 
158 

criteria whic~ the Commission may ·rely on in determining whether a 

candidate is active or not. . . ·· · . . · . · 

§ 133.5 Determination of Active Candidacy._ 

This section is basically across-reference to §'133.2.(b) (2). · .· 

§ 183.6 ReestablisI:unent of Eligibility dates.· . · 

This section generally follows 26 U.S.C. § 9033 ( c) ( 4). · 

· § 133. 7 Suspension of payments. · . . . . . 

· This· section is intended to encourage the candidate to comply with .. the a~ment of § 131.1 (a) ( 4) that tlie Title 2 disclosure re.qu1remen~s · · are followed. 

PART 134-EXAHINATIONS .A~'l> .AUDITS 

· .. § 134.1 Audit. · . 

~his section follows 26 U.S.~. §§ oose (a) and 9039 (b). · 

§ 134.2 .· Repayments. . . . 

~ectiori 134.2(a) follows 26 U.S.C. @9038(b) (1) .and (2). Section .· _l~.2(b) providE:s .for Commission r':view and hearing on re~ym~t. · d1Sputes, a proV1S1on not expressly m the statute but strongly sug- · · · ~nu: the public. in its written comments an~ testimony at tlie . 

§ 1~~-3. Uquide.tion. ~f obliptio~; re:paYID:ent. · 

> Thia'8Ct¥lngenerally fo}lqws26 u.s'!c. § 9~8(b) (3). 

I . 
162 .. 

. 

EXPL.L,-A.TIOY .U-0 .J't9STIFICiTIO~ OF THr. 

G~-i:lL.\L ELECTIO~···F~-~~Cn'G 

P £ff 140-DzltD-mo~s · 

· I 1-&0.1 .• .\.uthoriztd committH. . . . 

. This .definition follows ff C-.S.C -1 900-l ( l) ~ · .. 

·. § 1-M>~ CandidAte. 

· . This dehition pn1rall1. follows !6 "C.S.C. § S00-2 ( 2). 

§ 1-I0.3 Commission. . .· . . . . . This section defines the Fedeml Election C om:nissioo. •. 

J 1.&0., . Eligible candidates. · . 

Thil definition follows 26 t9 .S.C. § 000-l (-&:) • . . ·, 

) 
I U0.5 Funds. 

This definition follows 28 U.S.C. § 9002 ( 5). . 

· I U0..8 llajor party. · 

This demution follows 26 U.S.C. § 9002 ( 8). 

§ UO.T )finor party. 

This definition follows 26 t; .S.C. J 9002 ( i). 

§ U0.8 New party. 

This definition follows 26 t;.S.C. § OOOCJ(S). 

I H0.9 ·. Political committee. . 

-This dennition follows 26 U.S.C. § 900-2(9) ud di!ers from the den-. 

nition of.political commi~~.under 2 C'.S.C. § .J:31(d) in tho.t there~ 

no $1,000 threshold of act1nty. - . · · . . · 

§ 1.J:0.10. Presidential election~ . . · 

This definition follows 26 U.S.C. § 900-2(10). · 

§ 140.11 Qualified campaign upeme. _ · .- _ .. 

This de!nition pnerally follows ge U.S.C. § 900'2(11). Subsection 

( d} hAs · been add eel to clarify the proper categoriz:ition of tr:i vel u­

~dituns bv includ~ in the definition onlv tliose tranl up_enditures 

that are incurred_bv tlie candidate for his sta.!·ud pests.·Tnvel expenses pl.id bv meclia and Secret Service pe,rsonnel to the c:impaign :lre_reimbursements :md should not be counted as a q_ualified c:impai~ 

~nse merely because the campaign made the imtial ouda;y to th_ e 

11irlines to cover the espenses of all perso.ns t~rted. 

The altenu,.tive formulation in subsection (cl)(:?) is provided in 

order to prevent the c:a.mpaig_n from overch~g the media a.nd Secret 

Service which would have the· ed'ect of reduc;inr the cost tha.t should 

be 

~ 

char2'able to the c:unpa.ip. This section. is not incompatible with 

l>v the Cinl .Aeronautics Boa.rd on political tn.veL . . . Section 140.11 ( e) states what is Ml & q~~li!ed campa.ip expense. 

For esample, since the stAtute defines qualified c:unpaugn upen-ce · to 

be one that is incurred within the e%1>_enditure· re~rt period. ·m es- . pense incurred aftn-. the period would not be considered & qualified · · · cnmpaism ~- Renee. subsection ( e) ( 1 l is proposed. .A.lthou2h . . not esplicitly prorided for in Title 28, subsection (e)(2) escludes. 

certain lepl. and. accounting services from the definition of qualified 

~:lml!Aign !.~nse in keepm, with the Congres!ion:il intent e~pttssed 

. m Title :J.·:;ee:? U.S.C. l-131(f)'( 4) (J). . · . 

§ J.J:0.12 :E%penditure report period. . 

Tha. definition follows 26 U.S.C. § 900-2(12). 

§ l.J:0.13 .. Contribution; esclu.sioos. . . 

This definition is· pronded because there is no st:itutorv definition · of "contribution:, in Ch.Apter 95 of Title 26 even though that word 

is used in § 0003(b)(i) where candid:ite, mu.ct :i.2tte not to :ic:C4!pt 

contributions if thev elect to receive public funds. Therefore, the den- . nition most likelv to comport with Con,nssionAl intent·is th:it found 

in 2 U.S.C. f 431 ( e} and 1100 . .J: of the proposed re:zufations.· However. 

that definition of ·contribution includes a loan w@c!\ the stntnte implicitlv a.llows in gs U.S.C. § 9004(c)(9). To reconcile this apparent 

contncliction, subsection (b) (1) excludes from the deiinition ot con-

') .~ 

tribution a bank loan to a. candid11te wb'.ic:h if endorsed bv the c~clidate cannot _,~cee_ d $50,000, an amount which m_ ay .. be ~ent b"' the 

candid~e himself lind~r. the· 19i6 J.me~~ents. See 26 U.S.C. f ~ . (d). ·Finally, ~e definition ucludes reUDbursements from contribu· 

!1ons bec:rns~ reimbursements are not made for the purpose of inff uencmg an election bttt are rather an accounting or billing. procedure . 

. . .. --·. - . ,.·- .... -.... -. .... •.• ··---:·- . --.-,,·-··.· .. --.,;.'--"':. 
P .\RT · t 41-ELIGIBILlTY l'OR PAntENTS 

§ Hl.1 Canclidnte agreements .. 

This section basically follo,vs 2R 'G.S.C. § 0003(a.). 

·§ 141.2 Candidate certifi~'ltions. 

· Subsection (a) basically follows 26 U.S.C. ·~ 9003(b). Subsection 

(b) . follows 26 U.S.C. § 9003 ( c). Subsection. ( e) follows the 19,G 

·~s. 

amendment codified at ·26 U.S.C. §§ 000.J:(d), (e). Subsection (d) is 

authorized by tho .last sentence in 26 U.S.C. § 9003 (b). · · · 

§ 1~1.3 ·· Allowable contribtJ~ions. 

This sect.ion recognizes that candidates may receive private contributions to defray non-9ualificd campaign expenses and sets out the 

restrictions on the handling of such moneys to prevent any. improper 

commingling with public funds. · 

P.\RT 142~E~~TLDIE~"T or Euomu C.unm>.\TES ~o PA~~~s; UsE · . . · . · . OP p .ATKUrl'I . . . . . . . 

§ 142.1 1Iajor parties. · · 

·. This section follows2G U.S.C. § 9004(a.) (1). 

1142.2 .. Minor parties. 

. This section ~o1lows 26 U.S.C. § 9004 ( a) ( 2) • 

. ·~7 

PART 143-CERTIFIC,\Tiox BY ColluISS1oy 

§ 143.1 Initial certificat.ion. 

This section follows 26 U.S.C. § 9005 ( n). 

§ 143.2 Payments .from the. fund .. 

This sect.ion follows 26 U.S.C. § 9006(c) and nlso:? U.S.C. § 43ib 

with respect to tbe use of campaign depositories. · . · . . . . . 

§ 145.3 Finality of ce1tifica.tion; hearings . 

. 1"his section generally follow~ 26 v.s.9. § ~~(~).and :ufds a p~·o- .. ns1on for nn opportumty for n hear mg 1£ certifications are cont~ted~ 

> 

~··· . . . 

·: :· .... • ·.PART·l~REPOltTS AND.RE~RD .KEEPING I· . 1': ! ~ ~ ·!· .· . •• . . . • . . -~ . . . . . . . 

§ H4:.1 · Sepe.rate reports:··\/.°:: ·r: : ·· · .. '.- . . . . . . • · This ·section ·requires· the candidates to repC?rt the general election 

campaigq separately from any _ot1!-~r ~ports. m orde~ .~.-~eep an accurate accounting of the use of p~bl~~ ~as.. . . . ~. . . ~ . . . . . . ' 

11«.2 · Allocation o{administrati:y;e· 6Xpenses. · · .. : ·.. · . >. 

This section is authorized· by. the· last. sentence ~ 26 u.s.q .. § ~ · (11) and se~s ~ be the easiest meth~ of computation.· · · .. : · -· 

,, .......... . ·,. ''1-· '. ,. ....... 

.. I 
170 

PART 14~EXA1IINATIONS AND AUDITS, REPAYMENTS 

· · § 145.1 Audits, records and investigations. 

This section follows 26 U.S.C. § 9007(a) and§ 9009(b} •. 

· § 145.2 ·Repayments. . . · · · · . . . . . : . .· · · . · 

, . 

1

This section follows 26 U .S.C • .§ 9007 (b) and the repayment scheme 

in the lfat.ching Fund regulation, § 134.2. · 

§ 145.3. Notification. 

This section follows 26 u.~.c. § 9007 ( c ). 

PART 146--0rHm EXPENDITURES· 

§ 14~.1 Expenditures by political pa~y committees. 

Notwithstanding the expenditure .. limitation applicable to the can· 

didate.s, national, State, and subordinate committees of a politica] 

pa~y m~y ~ake expenditures in connection with a. pres.idential general eJectio~ m amo!lllts that do not exceed those specified in f l.JO.r. . . . . . This section basically cross-references the party spending bm1ts 

found in§ 110.'1 · .. 0 . .