34098 Federal Register / VoL 54, No, 158 / Thursday, August 17, 1989 / R ules and Regulations

FEDERAL ELECTION COMMISSION

[N o tice 1989-1 3]

11 CFR Parts 100,102,110,114 and

9034

Affiliated Committees, Transfers,

Prohibited Contributions, Annual

Contribution Limitations and

Earmarked Contributions

AGENCY: Federal Election Commission. 

ACTION: Final Rule; Transmittal of 

regulations to Congress.

s u m m a r y : The Commission has revised 

its regulations at 11 CFR 110.3,110.4,

110.5 and 110.6, concerning affiliated 

committees, transfers, contributions in 

the name of another, annual 

contribution limits and earmarked 

contributions. These regulations 

implement the contribution limitations 

and prohibitions established by 2 U.S.C. 

441a, 441e, 441f and 441g, provisions of 

the Federal Election Campaign Act of 

1971, as amended (“the Act” or 

“FECA”), 2 U.S.C. 431 et seq. The 

revisions clarify the Commission’s 

application of the affiliation rules and 

resolve several issues concerning 

transfers between committees 

authorized by the same candidate. The 

amended rules also update the reporting 

requirements for conduits of earmarked 

contributions and define the term 

“conduit.” In addition, the Commission 

has made several corresponding 

amendments to 11 CFR 100.5(g), 102.2(b), 

110.1(f), 110.8(d), 114.5(g), 114.8(g) and 

9034.4(d) to bring those provisions into 

conformity with the amendments to 11 

CFR 110.3 through 110.6. Further 

information on these revisions is 

provided in the supplementary 

information which follows. 

d a t e s : Further action, including the 

announcement of an effective date, will 

be taken after these regulations have 

been before Congress for 30 legislative 

days pursuant to 2 U.S.C. 438(d) and 26 

U.S.C. 9039(c). A document announcing 

the effective date will be published in 

the Federal Register.

FOR FURTHER INFORM ATION CONTACT:

Ms. Susan E. Propper, Assistant General 

Counsel, 999 E Street NW., Washington, 

DC 20463, (202) 376-5690 or (800) 424- 

9530.

SUPPLEMENTARY INFORM ATION: The 

Commission is publishing today the final 

text of revisions to its regulations at 11 

CFR 110.3,110.4,110.5 and 110.6, which 

concern affiliation of political 

committees, transfers between 

committees, certain prohibited 

contributions, annual contribution limits 

for individuals, and earmarked

contributions directed through conduits 

or intermediaries. The Commission is 

also publishing conforming amendments 

to §§100.5,102.2,110.1,110.8,114.5,

114.8 and 9034.4 to reflect the changes 

made in § § 110.3 through 110.6 of the 

regulations.

On July 30,1986 the Commission 

issued a Notice of Proposed Rulemaking 

(NPRM) in which it sought comments on 

proposed revisions to these regulations. 

51 FR 27183. Ten written comments were 

received in response to the Notice. A 

public hearing was held on September 

17,1986, at which three witnesses 

presented testimony on the issues raised 

in the rulemaking.

Section 438(d) of title 2, United States 

Code, and 26 U.S.C. 9039(c), require that 

any rules or regulations prescribed by 

the Commission to carry out the 

provisions of titles 2 and 26 of the 

United States Code be transmitted to the 

Speaker of the House of Representatives 

and the President of the Senate 30 

legislative days before they are finally 

promulgated. These regulations were 

transmitted to Congress on August 14, 

1989. Please note that the methods of 

calculating legislative days are different 

under these two provisions. Although 

most of the regulations contained in this 

document implement title 2 of the United 

States Code, the conforming amendment 

to 11 CFR 9034.4 implements title 26. 

Consequently, the legislative days for 

the revisions to 11 CFR parts 100,102, 

110 and 114 will be counted separately 

from the legislative days for the 

conforming amendment to 11 CFR 

9034.4. Thus, the title 2 rules and the title 

26 rules may be promulgated on 

different dates, since the expiration of 

the time periods may not coincide.

Explanation and Justification

In revising § § 110.3 through 110.6 of 

the regulations, the Commission has 

addressed several significant issues.

The principal areas in which the rules 

published today differ from the previous 

language of these sections are as 

follows:

(1) The factors used to evaluate 

whether committees are commonly 

established, financed, maintained or 

controlled and therefore affiliated (see 

§ 110.3(a)(3));

(2) Transfers of funds between 

previous and current federal campaign 

committees of the same candidate (see 

§110.3(c)(4));

(3) Transfers of funds between 

principal campaign committees of a 

candidate who is concurrently seeking 

more than one office (see § 110.3(c)(5));

(4) New language on transfers of 

funds from a candidate’s nonfederal

campaign to that candidate’s federal 

campaign committee (see § 110.3(c)(6));

(5) New language defining the term 

“conduit or intermediary” (see

§ 110.6(b)(2)); and

(6) Reporting of earmarked, 

contributions by both the recipient 

candidate’s committee and the conduit 

or intermediary (see § 110.6(c)).

After considering the public 

comments and testimony on the current 

presumption that state and local party 

committees are affiliated, and thus 

subject to common contribution limits, 

the Commission has decided to retain 

the current language.

The Notice of Proposed Rulemaking 

also raised questions concerning 

affiliation between a candidate’s 

authorized committee and an 

unauthorized committee established, 

financed, maintained or controlled by 

the candidate or the candidate’s 

campaign organization. Having 

evaluated the two public comments and 

testimony on this complex area, the 

Commission has decided to continue to 

apply the affiliation factors at 11 CFR 

110.3(a)(3)(ii) in these instances.

Another significant issue in this 

rulemaking concerns the exercise of 

direction or control by a conduit over 

the choice of the recipient candidate for 

earmarked contributions. The 

Commission has decided to retain the 

wording of the current rules at § 110.6(d) 

and to continue to rely upon the 

standards it has delineated in previous 

decisions.

Finally, the Commission has induded 

new subheadings in each paragraph of 

§§ 110.3,110.4,110.5, and 110.6 for the 

convenience of the reader.

Section 110.3 Contribution Limitations

fo r A ffiliated Committees and Political

Party Committees; Transfers (2 U.S.C.

441a(a)(5), 441a(a)(4))

This section has been substantially 

revised to resolve a number of issues 

that have been raised during the 

administration and enforcement of this 

provision since it was promulgated in 

1977. In addition, § 110.3 has been 

retitled “Contribution limitations for 

affiliated committees and political party 

committees; Transfers” to reflect that 

several provisions pertaining to political 

party committees are located in this 

section.

Section 110.3 has been reorganized to 

some extent. As in the current rules, 

paragraph (a) implements contribution 

limitations for affiliated committees and 

explains when committees are 

considered affiliated. Revised paragraph 

(b) explains how the affiliation rules 

affect the contribution limits for political
.34099 Fédéral Register / Vol. 54, No. 158 / Thursday, August 17, 1989 / Rules and Regulations

party committees. Revised paragraph (c)

consolidates the rules located in current

paragraphs (a)(2) and (c) concerning

transfers between committees.

Section 110.3(a) Contribution

Limitations for Affiliated Committees

Section 110.3(a), as revised, follows

current § 110.3(a)(1) by applying the

FECA’s contribution limits to affiliated

committees other than political party

committees. This paragraph implements

the “anti-proliferation” provisions of 2

U.S.C. 441a(a)(5).

Paragraph (a)(1) states that general

rule the committees commonly

established, financed, maintained or

controlled are affiliated, and are

therefore subject to common

contribution limits. The new rules

modify current paragraph (a)(1) in

several respects. First, the revisions

specify that the shared contribution

limits for affiliated committees apply to

both contributions made by those

committees and to contributions they

receive. Second, the revisions clarify

that committees may be affiliated even

if one of them is not a political

committee as defined in 1 1 CFR 100.5.

Several previous advisory opinions

(AOs) have made this point, e.g. AOs

1987-12,1985-2,1984-46 and 1982-52.

Next, revisions to paragraph (a)(l)(i)

clarify that the common contribution

limits apply to all the authorized

committees of a candidate for the same

election. Separate contribution limits

would apply to a candidate’s authorized

committees for different elections.

However, transfers between authorized

committees will in some situations

require that the contributions

transferred be aggregated and subject to

a single contribution limit. See 11 CFR

110.3(c). Finally, paragraph (a)(l)(ii) has

been revised to state that in appropriate

cases, the term “local unit” may include

a franchisee, licensee, or state or

regional association. See AOs 1983-46,

1979-38,1978-61 and 1977-70.

A list of committees viewed as per se

affiliated is set forth in paragraph (a)(2).

This list is essentially the same as the

one set forth in current paragraph

(a)(l)(ii)> which was taken from the

House and Conference reports on the

1976 amendments to the FECA. H.R.

Rep. No. 94-917, 94th Cong., 2d Sess. 6

(1976); H.R. Conf. Rep. No. 94-1057, 94th

Cong., 2d Sess. 58 (1976).

One commenter questioned whether 

the proposed revisions to § 110.3(a) 

were intended to change the 

Commission’s view of Congressional 

intent to exclude the relationship 

between a labor federation, such as the 

AFL-CIO, and an international or 

national labor organization from the

affiliation rules. The commenter pointed

out that the legislative history of the

1976 FECA Amendments evidences a

decision by Congress to continue the

status quo by permitting separate

contribution limits for the separate

segregated fund of a labor federation

structured along the lines of the AFLCIO and the separate segregated fund of

an international or national labor

organization that is a member of the

labor federation. The comment argues

that this view is reflected in the set of

five interrelated anti-proliferation rules

first stated by Rep. Wayne Hays,

Chairman of the House Administration

Committee, during a markup session on

the 1976 FECA Amendments and later

restated in the House Committee and

the Conference Committee reports on

those amendments. H.R. Rep. No. 94-

917, 94th Cong., 2d Sess. 6 (1976); H.R.

Conf. Rep. No. 94-1057, 94th Cong., 2d

Sess. 58 (1976). The comment concludes

from the legislative history that

Congress was well aware of the

existence of separate segregated funds

established by such labor federations

and viewed them as separate from

political committees established by their

constituent members, entitled to

separate contribution limits.

Consequently, the commenter assumed

that the language proposed in the NPRM

was based on an intention not to apply

the affiliation factors in paragraph

(a)(3)(ii) to labor federations. However,

if that assumption was incorrect, the

comment suggested several specific

revisions to the affiliation factors, which

are addressed below in the discussion of

those paragraphs.

On several occasions, the Commission

has determined that the AFL-CIO

COPE-PCC and the separate segregated

funds of the AFL-CIO’s constituent

member unions were not affiliated under

the anti-proliferation rules established

by 2 U.S.C. 441a(a)(5). See MURs 354,

783 and 1605. These conclusions were

based upon the legislative history of

section 441a(a)(5) cited by the

commenter. Current §§ 100.5(g) and

110.3(a) incorporate the antiproliferation rules stated by Rep. Hays

and the congressional reports. These

provisions are included in the new rules

with minor, clarifying revisions.

Consequently, the revisions to

§ § 110.3(a) and 100.5(g) do not alter the

Commission’s previous decisions in

MURs 354, 783 and 1605. Under the

revised rules, there are separate

contribution limits for the separate

segregated funds of labor federations

and the separate segregated funds of

their member national and international

unions. However, this exception to the

anti-proliferation rules only applies to

labor federations whose relationships

with their member unions are structured

along the lines of the relationship that

existed between the AFL-CIO and its

member unions at the time the 1976

amendments to the FECA were enacted

by Congress.

New paragraph (a)(3) makes several

revisions to the “indicia of affiliation”

currently found in § 110.3(a)(l)(iii). First,

the terminology has been changed by

substituting “circumstantial factors” for

"indicia.” Next, new paragraph (a)(3)(i)

has been added to explain that in

making affiliation determinations, the

Commission may examine a variety of

relationships, including the relationship

between organizations sponsoring

committees, between the committees

themselves, or between one sponsoring

organization and a committee

established by another sponsoring

organization. The NPRM suggested

including language to clarify that the

factors are used to determine whether

committees are affiliated. The

Commission has now decided to add

additional language to provide a more

complete explanation of the role of the

affiliation factors set forth in paragraphs

(a)(3)(ii) (A) through (J). The

Commission will examine the factors in

evaluating the overall relationship

between committees or their sponsoring

organizations to determine whether

there is, evidence that the committees

are commonly established, financed,

maintained or controlled, and therefore

affiliated. The Commission notes that

the factors set out in § 110.3(a)(3)(ii)

could have been used to evaluate the

relationships that result when an entity

creates smaller organizational units, as

well as the relationships that result

when entities join together to create a

larger organization.

The factors, themselves, have been

revised to rework proposed language

that could have been interpreted more

broadly or narrowly than intended, and

to explain more clearly the type of

activity covered by each factor. Several

of the revisions have been made in

response to legitimate concerns raised

by the two public comments that

discussed the current indicia of

affiliation.

The first factor in paragraph

(a)(3)(ii)(A) concerns the ownership of a

controlling interest in the voting stock or

securities of an organization sponsoring

another committee. This factor is based

on current paragraph (a)(l)(iii)(A).

Paragraph (a)(3)(ii)(B) follows current

paragraph (a)(l)(iii)(B) by addressing the

authority or ability of one sponsoring

organization or committee to direct or

participate in the governance of another
34100 Federal Register / Vol. 54, No. 158 J Thursday, August 17, 1989 / Rules and Regulations

sponsoring organization or committee

through its constitution, bylaws,

contracts or other rules. One comment

on the proposed rules suggested that this

indicium also include the ability to

influence the decisions of the officers or

members of another entity. Another

commenter urged the Commission to

revise this factor to consider only

significant authority to govern another

sponsoring organization or committee.

The Commission has decided, instead of

including either of these suggestions, to

include new language in revised

paragraph (a)(3)(ii)(B) to explicitly

recognize that formal or informal

practices or procedures should be

considered in examining the relationship

between the organizations or

committees.

Revised paragraph {a)(3)(ii)(C)

concerns a committee’s or sponsoring

organization’s authority or ability to

hire, appoint, demote or otherwise

control the officers or decision-making

employees of another sponsoring

organization or committee. This

paragraph is based on current paragraph

(a)(l)(iii)(C). One commenter

recommended revising this factor to

focus only on situations where the

authority to hire, appoint or demote is

“significant.” Another comment

recommended that the current language,

which focuses on the ability to influence

decision-making, be retained. The

Commission has revised this factor by

including the authority or ability to

otherwise control the decisionmakers

because “control” is a more specific

term that more accurately describes the

kind of involvement that could lead to

affiliation.

Revised paragraph (a)(3)(ii) contains

two new factors in paragraphs (D) and

(E) which facilitate consideration of

whether the sponsoring organizations or

committees have common or

overlapping members, officers or

employees. One public comment

observed that common or overlapping

membership with another sponsoring

organization or political committee

should not be one of the criteria because

it merely reflects similar goals for the

two organizations or committees. For

this reason, the Commission has refined

the proposed rule to clarify that the

presence of common or overlapping

members, officers or employees is only

significant when it indicates a formal or

ongoing relationship between the

committees or sponsoring organizations.

Another comment argued that the

proposed rules did not clearly cover

consecutive roles an individual may

have in various organizations or

committees. Therefore, the comment

recommended that the Commission add

new language to the regulations to

permit consideration of whether a

political committee or sponsoring

organization has any members, officers

or employees who were members,

officers or employees of another

sponsoring organization or committee.

The Commission has now included new

paragraph (a)(3)(ii)(F) to address this

type of situation. New paragraph (F)

explains that consecutive roles are a

consideration only when they reveal a

formal or ongoing relationship between

sponsoring organizations or committees

or when they indicate the creation of a

successor entity.

New paragraph (a){3)(ii)(G), which is

based on current paragraph (a)(l)(iii){E),

focuses on the funding of one committee

or sponsoring organization by another.

This paragraph has been amended to

reflect the fact that the provision of

goods may be as significant as the

provision of funding. Also, language has

been added to clarify that occasional

transfers resulting from joint fundraising

activities under 1 1CFR 102.17 are not

considered in affiliation determinations.

Under section 441a{a)(5)(A) of the

FECA, the contribution limits for

affiliated committees do nct*limit

transfers between otherwise unaffiliated

committees of funds raised in

accordance with legitimate joint

fundraising activities. The proposed

rules had also included a reference to 11

CFR 1026(b)(l)(iv) regarding collecting

agents for the separate segregated fund

of a federation of labor organizations.

This reference has been deleted from

the final rules because it did not involve

a joint fundraising situation.

The single comment on the current

financing indicium of affiliation

suggested including financing that does

not involve the direct passing or

payment of funds between two entities

as an indicium of affiliation. The

comment cited instances where the

Commission has considered efforts by

one organization or committee to

arrange for contributions to be made to

another organization or committee in

determining whether they are affiliated.

MURs 1667,1704, and 1722. The

comment recommended that the

proposed regulation be redrafted to

clarify that affiliation may result when a

sponsoring organization or a committee

provides for the indirect financing of

another organization or committee. The

Commission agrees that some forms of

indirect financing should be treated as

evidence of affiliation. Accordingly, new

paragraph (a)(3)(ii)(H) has been added

to the regulations to take into account

indirect methods of financing, such as

where one entity regularly arranges for

a committee to receive contributions

from third parties.

New paragraph (a){3)(ii)(I) has been

added to permit consideration of

whether a sponsoring organization or

committee has an active or significant

role in forming another committee or

sponsoring organization. One comment

suggested that the rule should also focus

on the role played by the personnel of

an organization or committee in

determining whether one entity has a

significant role in the formation of

another. The commenter expressed the

concern that individuals may establish

several committees or organizations as

“spin-offs” and yet contend that they

are not affiliated. The commenter

recommended redrafting this language

to consider whether the members,

officers, employees or agents of an

entity had an active or leadership role in

the formation of another sponsoring

organization or committee.

Consequently, the Commission has

modified the wording of this provision to

permit consideration of whether an

agent of the sponsoring organization or

committee had this type of role.

The NPRM had proposed deleting

current paragraph (a)[l)(iii)(D), which

concerns similar patterns of

contributions. One comment urged the

Commission to reinstate this provision

because the commenter believed that

public records of contributions provide

objective evidence of affiliating conduct.

The Commission has previously

considered whether committees

received their contributions from the

same source or made contributions to

the same candidates as an indicium of

affiliation in several compliance matters

and advisory opinions. The Commission

had decided to delete this criterion from

the proposed rules because political

committees with similar political

viewpoints and objectives may tend to

make contributions to the same

candidates and receive contributions

from the same donors even though the

committees are completely independent

The Commission has now determined

that these concerns can be alleviated by

retaining this factor and adding

language in new paragraph (a)(3)(ii)(J)

explaining that similar patterns of

contributions and contributors are

evidence of affiliation only when they

indicate a formal or ongoing relationship

between the sponsoring organizations or

committees.

The Commission has evaluated the

previously proposed revisions to section

110.3(a) in light of the subsequent

decision in Federal Election

Commission v. Sailors' Union of the
Federal Register / Vol. 54, No, 158 / Thursday, August 17, 1989 / Rules and Regulations 34101

Pacific Political Fund, 828 F.2d 502 (9th

Cir. 1987). The Commission has

concluded that the unique circumstances

present in that case do not necessitate

any additional changes in the affiliation

rules.

A question that has arisen in advisory

opinions is whether affiliated

committees, such as separate segregated

funds of corporations, may disaffiliate at

some point after their parent

corporations have ceased to be

commonly owned or controlled. See

AOs 1987-21 and 1986-42. Although the

entities involved in those advisory

opinions had not reached the point of

disaffiliation, the Commission

recognizes that under the appropriate

circumstances, disaffiliation might be

possible. See AO 1983-28. The revised

rules do not address this topic because

the Commission has not had sufficient

opportunities to examine particular

situations in which corporations or other

organizations seek to sever their

connections with other corporate or

noncorporate entities and to develop

criteria for such determinations.

However, nothing contained in the new 

affiliation regulations reverses or 

modifies the Commission’s decisions on 

this subject.

There are several consequences

resulting from a determination that

committees are affiliated. First

affiliated committees share a common

contribution limit with regard to all

contributions they make or receive. If

either of the affiliated committees is a

multicandidate committee, the

multicandidate committee’s higher

contribution limit applies to

contributions made by either committee.

Another consequence of affiliation is

that there is no limit on the total amount

of funds that may be transferred

between the two committees under 11

CFR 102.6(a). However, transfers must

be made only from funds which are

permissible under the A ct Furthermore,

new § 110.3(c)(5) and current $ 110.8(d)

contain certain restrictions on transfers

between affiliated campaign committees

of a dual candidate for federal offices or

for federal and state offices. See

discussion of new § 110.3(c)(5) below.

Under § 102.2, political committees 

are required to list on their Statements 

of Organization other political 

committees with which they are 

affiliated. Accordingly, § 102.2 has been 

amended to assist the reader in locating 

the affiliation provisions in the 

regulations. However, each affiliated 

committee that qualifies as a political 

committee under the FECA is 

responsible for satisfying its own 

recordkeeping and reporting obligations

under 11 CFR parts 102 and 104. See

AOs 1985-6,1979-68 and 1979-50.

Finally, the Commission notes that 

determinations of affiliation will affect 

the ability of a corporation or federation 

of trade associations to solicit specific 

categories of individuals under 11 CFR 

114.5(g) and 114.8(g). Specifically, the 

Commission has used the indicia of 

affiliation to decide whether particular 

entities, such as franchisees, licensees, 

wholesale distributors, partnerships and 

joint ventures are “affiliates” of 

corporations for solicitation purposes. 

See AOs 1989-8,1988-46,1987-84,1985-

31,1985-7,1984-86,1988-48,1983-46,

1979-38,1978-61,1978-89 and 1977-70.

Accordingly, the Commission has 

included a cross-reference to the 

§ 100.5(g) definition of “affiliated 

committee” in the portions of §§ 114.5

and 114.8 that refer to “affiliates.” A 

similar reference has not been included, 

however in § 114.7, which addresses 

solicitations by membership 

organizations, cooperatives and 

corporations without capital stock, since 

the term “affiliate” is not used in § 114.7.

The NPRM observed that increasing 

numbers of candidates and prospective 

candidates are establishing political 

action committees (PACs) that make 

contributions to Federal, state and local 

candidates and conduct other political 

activities on instructions from or in 

conjunction with the founding 

candidates. Thus, the Commission 

sought comment on whether the indicia 

of affiliation in § 110.3(a) should 

continue to be applied to determine if 

such “candidate PACs” or “leadership 

committees” are affiliated with the 

candidates’ authorized campaign 

committees. Questions were raised in 

AO 1978-12 concerning the status of a 

committee that expected to receive the 

assistance of a congressman in raising 

funds and making contribution 

decisions. The AO indicated that the 

committee was not considered an 

authorized committee if the 

congressman had not given it written 

authorization. On the basis of the facts 

presented, the Commission assumed the 

committee would not be affiliated with 

the congressman’s principal campaign 

committee. The opinion did not, 

however, “give blanket approval for a 

general proposal” like the one described 

in the request. AO 1978-12. Thus, the 

Commission has acknowledged that 

under certain circumstances a candidate 

PAC or leadership committee may be 

considered affiliated with the 

candidate’s campaign committee for the 

purposes of the contribution limitations. 

The Commission has relied upon the 

current indicia of affiliation in § 110.3 to

determine whether particular authorized

committees and candidate PACS were

affiliated in MURs 2161,1870,1741,950

and 459. Questions of this nature were

also presented in AOs 1986-6 and 1985-

40.

Two comments were received on this

issue. One comment stated that a

candidate PAC should be viewed as

affiliated with the candidate's campaign

committee and thus both committees

should be subject to a single

contribution limit. The other commenter

submitted a draft provision that would

implement a specific p erse affiliation

rule for a candidate’s authorized

committees or exploratory committees

and any other committee established by

the same candidate or significantly

influenced by the candidate in its

solicitation, contribution or expenditure

activities.

Although the Commission considered

including in the revised regulations

language that would focus specifically

on affiliation between authorized

committees and candidate PACs or

leadership committees, the Commission

has decided instead to continue to rely

on the factors set out at 11 CFR

110.3(a)(3)(ii). After evaluating the

comments and testimony on this issue,

as well a3 the situations presented in the

previous advisory opinions and

compliance matters, the Commission

has concluded that this complex area is

better addressed on a case-by-case

basis. Thus, in an appropriate case, the

Commission will examine the

relationship between the authorized and

unauthorized committees to determine

whether they are commonly established,

financed, maintained or controlled.

Section 110.3(b) Contribution

Limitations for Political Party

Committees.

Section 110.3(b) implements section

441a(a)(5)(B) of the Act by explaining

how the FECA’s antiproliferation

provisions apply to different types of

political party committees. Although

§ 1108(b) has been reorganized, it does

not change the current rules as to when

separate contribution limits are

available for particular types of party

committees. New paragraph (b)(1)

generally follows durent paragraph

(b)(1) by providing that the contribution

limit that applies to the national

committees of a political party is

separate from the contribution limit for

the state committees of the same

political party. Please note that the

separate contribution limits in new

paragraph (b)(1) apply to contributions

made or received by national and State

party committees.
34102 Federal Register / Vol. 54, No. 158 / Thursday, August 17, 1989 / Rules and Regulations

The revised regulations delete current

paragraph (b)(3), which sets out

examples involving contributions by

national party committees, House

campaign committees, state party

committees and subordinate committees

of State parties. It did not seem

appropriate to include those examples in

the regulations since examples are

generally included in the Explanation

and Justification. Thus, these examples

are discussed below, and their deletion

from the text of the regulations does not

mean they have been invalidated.

New paragraph (b)(2) has been

reorganzied to consolidate the

provisions in current paragraphs (b)(2)(i)

and (b)(4) explaining the contribution

limits that apply to certain types of

national party committees. Under the

revised rides, the House campaign

committee and the national committee

of the same political party have separate

per election limits on contributions they

give to any federal candidate, including

a candidate for the House of

Representatives, the Senate or a

candidate seeking the party’s

nomination for President. Similarly, the

Senate campaign committee and the

national committee of the same political

party have separate per election limits

on contributions to House candidates

and candidates for President However,

with regard to contributions to Senate

candidates, the Senate campaign

committee and the national committee

of the same party share a single $17,500

limit on contributions made at any time

in the six year Senate election cycle. See

1 1 CFR 110.2(e). Finally, the Senate and

House campaign committees have

contribution limits which are separate

from each other.

New paragraph (b)(3) follows current

paragraph (b)(2)(ii) by explaining that

contributions made by a State party

committee and by subordinate State

party committees are presumed to be

made by a single committee. However,

this provision also grants these party

committees an opportunity to

demonstrate that they qualify for an

exemption from the affiliation rules,

provided they can show thay have not

received funds from any other party

committee and that they do not make

contributions in cooperation,

consultation or concert with, or at the

request or suggestion of, any other party

unit or party committee.

In applying these rules, the

Commission has encountered several

questions including who has the burden

of rebutting the presumption and what

aspects of the relationship between a

state party committee and a subordinate

state party committee should be looked

at to determine whether these

committees are affiliated. Accordingly,

the Commission sought comments on

proposed language to clarify the

application of the presumption in the

current rules and to permit

consideration of a wider range of

interactions between a state party

committee and subordinate state

committees in determining whether they

are entitled to separate contribution

limits. The criteria proposed were based

upon factors considered by the

Commission in AO 1978-9.

Five comments were received on the

proposed revisions to the rules

governing the contribution limitations

for state party committees and

subordinate state party committees. The

commenters opposing the proposed

regulation argued that county

committees and other local party units

are independent of state party

committees and are, therefore, entitled

to separate contribution limits.

However, according to these comments,

county party units partly finance state

party committees in some states, while

in other states the county parties are

financially supported by the state

political party. One state party indicated

that it has an agreement to provide

office space at no cost to one of the

county party units, in addition to

providing the county party with

financial support in a fixed amount per

month. The comments and testimony

illustrated and emphasized the

complexity and greatly varying nature of

relationshps between state party

committees, county party committees,

and other local party units.

One comment expressed the concern

that the proposed change in terminology

from “any party unit” to “the state

party" in the draft rules could permit a

subordinate party committee that

received financing from or acted in

consultation with party units other than

the state committee, such as a national

party committee, to claim that it

operated independently and was

entitled to a separate contribution

limitation. This comment supported the

approach taken in the current rules,

which examines the contacts between

the subordinate committee and any

other party unit.

In light of the questions raised

regarding the current rule and the

proposed amendments, the Commission

has reviewed the pertinent legislative

history on this matter, as well as the

1976 rulemaking proceeding which

culminated in the promulgation of the

current rule. See FEC Agenda Document

#87-79, at pp. 11-16 (July 22,1987)

(considered on Aug. 0,1987). Finally, the

Commission has examined various state

laws and the bylaws of several state

party committees to ascertain the

general structure of state party

organizations and to determine how

state and local party committees

interact with each other.

The Commission has decided not to

adopt the approach urged by the

commenters who favor treating state

and local party committees as

independent or p erse unaffiliated

because this approach would be in

conflict with some of the evidence

presented in this rulemaking and with

the legislative history of the antiproliferation provision of the Act. At

this time the Commission has

determined to retain the current

language. Accordingly, in lieu of the

language proposed in the July 30,1986

NPRM, new § 110.3(b)(3) follows the

language of current § 110.3(b)(2)(ii) by

presuming that state party committees

and subordinate state party committees

are affiliated and by granting these

committees the opportunity to

demonstrate otherwise.

Section 110.3(c) Transfers

The rules pertaining to transfers of

funds between political committees,

including campaign committees and

party committees, are currently set forth

in paragraphs (a)(2) and (c) of § 110.3.

The revised rules consolidate these

provisions into a single paragraph (c)

and resolve several significant points

that have been raised regarding

transfers. For example, new paragraph

(c) clarifies the method used to

determine whether the funds transferred

between candidate committees contain

any impermissible contributions. The

cash on hand of the transferor is

considered to consist of the funds most

recently received, and the transferor

must be able to demonstrate that it has

sufficient permissible funds on hand at

the time of the transfer. With regard to

transfers from a federal candidate’s

previous campaign committee to his or

her current campaign committee, new

paragraph (c) explains when the transfer

affects tiie original contributors’ per

election contribution limitations. The

new rules also provide additional

guidance as to when candidates are

considered to be actively seeking more

than one Federal office for purposes of

the transfer rules. Finally, new

paragraph (c) addresses transfers from a

candidate’s nonfederal campaign to the

aama candidate's Federal campaign

committee. The Commission received no

public comments on the proposed

revisions to the transfer rules or on any
Federal Register / V ol 54, No. 158 / Thursday, August 17* 1989 / Rules and Regulations 34103

of the transfer issues raised in the

NPRM.

The Commission has deleted from the

revised transfer rules the current

provision in § 110.3(a){2)(ii) allowing

transfers between a candidate’s

authorized committees in situations

where the candidate has not received a

waiver from reporting. This provision is

not needed because candidates no

longer have the option of reporting

separately from their principal campaign

committees. Moreover, transfers

between authorized committees are

covered by new paragraphs (c)(4) and

(c)(5).

New paragraph (c)(1) follows current

paragraph (c) by permitting unlimited

transfers of funds between affiliated or

unaffiliated party committees of the

same political party. Language has also

been added to paragraph (c)(1) to

explicitly state that the contribution

limitations of 1 1 CFR 110.1 and 110.2 do

not restrict transfers between affiliated

committees or by collecting agents to a

separate segregated fond. This is

consistent with 11 CFR 102.6(a)(1)

regarding affiliated committees, and

with 11 CFR 102.6(b) concerning

collecting agents. Please note, however,

that under 11 CFR 102.6{a){l)(iv), only

permissible funds may be transferred.

Furthermore, such transfers can trigger

the Act’s registration and reporting

requirements for previously unregistered

entities. See 11 CFR 1 0 2 .6 (a)(2 ).

New paragraph (c)(2) generally

follows current paragraph (a)(2)(f)

regarding the transfer of joint

fundraising proceeds. New language has

been included to clarify that under the

joint fundraising rules, a participating

committee or organization may not

receive more than its allocated share of

the funds raised.

Paragraph (c)(3) generally follows

current paragraph (a)(2)(iii) concerning

transfers between a candidate’s primary

and general election campaigns.

New § 110.3(c)(4) continues the overall

approach taken by cuiTent

§ 110.3(a)(2)(iv), which permits transfers

in either direction between a current

campaign committee and a previous

campaign committee of the same

candidate, so long as the funds do not

contain contributions in violation of die

Act. In addition, new language has been

included to clarify that transfers of

permissible funds between two previous

campaign committees of the same

candidate are also allowed under

paragraph (c)(4). This provision has also

been modified to clarify that it applies

only to transfers between a candidate’s

Federal campaign committees. Transfers

from a candidate’s nonfederal campaign

fo thè same candidate’s Fédéral

campaign committee are covered by

hew paragraph (c)(8), discussed below.

Definitions of “previous Federal 

campaign committee” and “current 

Federal campaign committee” have also 

been included in new paragraph (c)(4). 

These definitions are intended to 

distinguish transfers between previous 

and current campaign committees 

(which come within paragraph (c)(4)) 

from transfers between committees of 

dual Federal candidates (which are 

subject to somewhat different 

requirements, as set out in paragraph

(c)(5)). The phrase “previous Federal 

campaign committee” refera to a 

campaign committee that supported a 

candidate in any federal election that 

has already been held. A “current 

Federal campaign committee” refers to 

the candidate's committee that is 

working for his or her nomination or 

election in an upcoming election.

The Commission has added new

language to paragraph (c)(4) to assist

committees in determining whether

contributions to each committee from

the same contributor must be aggregated

Upon transfer, and consequently

whether the transfer would result in the

making of excessive contributions.

Under new paragraphs (c)(4) (iii) and

(iv), aggregation of contributions is

required if the transferred contributions

were made after the previous election is

over, or after the candidate withdrew

from or became ineligible to participate

in tiie previous election. However, postelection contributions need not be

aggregated if they are properly

designated for outstanding debts. Thus,

the aggregation provisions effectuate the

statutory scheme which establishes

contribution limits on a per election

basis. The new language is consistent

with the approach taken in AOs 1987-4,

1986-12,1980-30 and in revised 11 CFR

110.1(b) (1987).

Finally, the Commission notes that

questions were raised in AO 1988-5

regarding transfers by a publicly funded

Presidential campaign to a previously

publicly funded campaign committee of

the same candidate. The Commission

held that this type of transfer from a

publicly funded committee is not a

qualified campaign expense under 11

CFR 9032.9(a). Therefore, the

Commission concluded that such a

transfer is not permissible until after the

audit process is completed and any

repayment obligations and any possible

civil penalties are satisfied The new

regulations at 11 CFR 110.3(c)(4) do not

directly address the issue of

nonqualified campaign expenses

presented in AO 1988-5. However,

nothing contained in the new transfer

provisions would reverse or médüfy the

Commission’s decision in that advisory 

opinion.

Paragraph (c)(5) of §110.3 implements

thé statutory restrictions found in 2

U.S.C. 441 a (a)(5) on transfers between

principal campaign committees of a

candidate who is seeking nomination or

election to more than one Federal office.

Although new paragraph (c)(5) generally

follows current § 110.3(a)(23(v), new

language has been included to provide

further guidance on certain points. First,

the revised rules clarify when a

candidate is deemed to be seeking more

than one Federal office, and is thus

subject to the “dual candidate” transfer

rules of paragraph (c)(5). An individual

is considered to be seeking more than

one Federal office if the individualis

concurrently a candidate for more than

one Federal office during the same or

overlapping election cycles.

New paragraph (c)(5)(i) follows the

current regulations and 2 U.S.C.

44la (a)(5) (C) by prohibiting transfers

until the candidate is no longer “actively

seeking” more than one Federal office.

The revised rules continue to list the

situations where the candidate will no

longer be considered to be actively

seeking a particular office—when the

principal campaign committee has filed

a termination report or has notified the

Commission that no further campaign

activities will be conducted except for

expenditures for debt retirement

purposes. The NPRM suggested

including other situations where

candidates are prohibited from running

for more than one office by operation of

state law. Along these lines, the

Commission has now added two new

examples to paragraph (c)(5)(i): Where

the candidate is ineligible for

nomination or election to more than one

office by operation of law, such as when

the state filing deadline has passéd, and

where the individual publicly withdraws

from the race and ceases to campaign.

The first of these follows the

Commission’s decision in AO 1986-12.

New paragraph (c)(5)(ii) follows the

current rules and section 441a(a)(5HC) of

the Act by requiring aggregation of a

donor’s contributions to each committee

to the extent that such contributions are

transferred between committees.

Contributions must be excluded from

the total amount transferred to the

extent that they would exceed the

donor’s contribution limits with respect

to the committee receiving the

transferred funds.

Paragraph (c)(5)(ni) prohibits transfers

where the dual federal candidate’s

committee “has elected to receive”

public fending under tide 26. This

provision more closely conforms to fee
34104 Federal Register / Vol. 54, No. 158 / Thursday, August 17, 1989 / Rules and Regulations

language in section 441a(a)(5)(C ) of the

A ct than the wording of the current

provision. The revision clarifies that the

application of this provision does not

depend upon the timing of the receipt of

title 26 funding.

The Notice raised the question of

what is meant by “more than one

Federal office,” noting the Commission’s

decisions in AOs 1982-22 and 1978-19.

The Commission concluded in AO 1 9 8 2 -

22 that a candidate is not running for

two offices if the candidate switches

Congressional districts in response to a

court reapportionment plan. However, in

AO 1976-19, the Commission decided

that a candidate is running for two

Federal offices if he or she enters races

for two different Senate seats which

span different terms. Specific language

addressing these situations has not been

included in the amended rules because

they do not occur with sufficient

frequency to warrant mention; however,

these opinions still serve as precedent.

A nother issue addressed in the NPRM

concerned transfers betw een the

cam paign com m ittees of a candidate

w ho abandons his or her cam paign for a

second Federal office and reactivates

the previous cam paign for the first

office, w here both general elections are

to be held on the sam e day. See A O

1984-38. In such a situation the

Commission determ ined that if a

contribution to the first cam paign

com m ittee is transferred to the second

cam paign com m ittee, it must be counted

against the contribution limits for the

second office. H ow ever, the contribution

is still attributed to the contribution

limits for the first office as well, unless

the donor provides a w ritten

redesignation. The Com m ission h as

decided that this is another a re a in

w hich specific regulatory language is not

needed b ecause this type of situation

occurs infrequently.

The Commission has considered

whether the restrictions on transfers

between committees of dual candidates

should also apply to situations where an

individual is concurrently a candidate

for one office and testing the waters for

another office. Although the

Commission is unable at this time to

reach a conclusion on this issue, the

Commission has determined that even if

such transfers were permissible,

contributions received by the campaign

committee and contributions received

by the exploratory committee from the

same contributor would have to be

aggregated for purposes of the

contribution limitations of the FECA

whenever such contributions are

transferred.

Finally, the Commission notes that

additional guidance concerning the

operation of dual Federal campaign

committees may be found at 11 CFR

110.8(d).

Paragraph (c)(6) sets forth new

regulatory language concerning transfers

of funds from a candidate’s nonfederal

campaign organization to his or her

federal campaign committee. This

paragraph generally follows the

regulations concerning transfers

between previous and current federal

committees in § 110.3(c)(4) as well as the

previous advisory opinions in this area.

See AOs 1 9 8 7 -1 2 ,1 9 8 5 -2 ,1 9 8 4 -4 6 ,1 9 8 3 -

34 and 1982-52. Please note that if the

candidate is conducting dual campaigns

for state and Federal offices, the

provisions of § 110.8(d) would be

applicable instead of new § 110.3(c)(6).

Under new paragraph (c)(6), previous

nonfederal committees may transfer

funds to current federal committees, and

current nonfederal committees may

make transfers to previous federal

committees. Although the total amount

that may be transferred between the

two affiliated committees is unlimited,

the funds actually transferred must not

include any contributions from

prohibited sources or any contributions

in excess of the contribution limits. To

assure this, paragraph (c)(6)(i) states

that the committee transferring the

funds must be able to demonstrate that

it has sufficient funds on hand at the

time of the transfer that comply with the

FECA’s contribution limitations and

prohibitions. This is consistent with the

Commission’s current approach in

compliance matters. New paragraph

(c)(6)(i) also requires the transferor

committee to keep records of the

sources of funds and to make these

records available to the Commission

upon request. This is consistent with the

recordkeeping requirements for

reporting committees.

Paragraph (c)(6)(ii) addresses the

question of when contributions to the

nonfederal and federal committees must

be aggregated for purposes of the

contribution limits of the Act. In

determining whether contributions are

excessive, the amount contributed by a

particular person to the nonfederal

committee must be aggregated with any

contributions made by that person to the

federal committee if the contributions

were made after the state or local

election was held, or after the candidate

withdrew from the state or local

election, or after the candidate publicly

announces his or her candidacy for the

Federal office. However, contributions

included in the transferred amount that

were made prior to the state or local

election and while the candidate was

still in the nonfederal race do not have

to be aggregated with subsequent

contributions to the federal cam paign

com m ittee. AO 1987-12. These

requirem ents effectuate the per election

contribution limits of the FÉCA .

Consistent w ith previous Commission

determ inations, the new rules require

nonfederal to federal transfers to count

tow ard the threshold for political

com m ittee status under the A ct. See e.g.

A O s 1 9 8 7 -1 2 ,1 9 8 5 -2 and 1984-46. Thus,

under paragraph (c)(6)(iii), the

nonfederal cam paign com m ittee must

register and report if the amount

transferred exceed s $1000. A statem ent

of organization must be filed no later

than ten days after the transfer occurs.

The nonfederal com m ittee’s first report

m ust disclose cash on hand, the

source(s) of such funds, and the amount

transferred to the federal com m ittee.

This information is required under

current 11 C FR 104.12. A s noted above,

the amount transferred is com posed of

the funds m ost recently received,

excluding any am ounts that are not

perm issible under the FEC A . The

com m ittee m ust itemize the sources of

the funds transferred in a memo

Schedule A in accord an ce with current

11 CFR 104.3(a)(4). Finally, the new rules

allow the nonfederal com m ittee’s first

report to serve a s its term ination report,

if appropriate. During this rulemaking,

the Commission explored alternatives

that w ould have excluded nonfederal

com m ittees transferring over $1000 from

the FE C A ’s registration and reporting

obligations, H ow ever, the Commission

w as not able to find an alternative given

th at the Com m ission no longer h as the

authority to grant w aivers from the

reporting requirem ents of the A ct.

N ew paragraph (c)(7) h as been added

to the regulations to alert the read er that

current § 110.8(d) contains additional

provisions concerning concurrent

cam paigns for Fedeal office or for

Fed eral and nonfederal office, including

the requirem ent to m aintain com pletely

sep arate cam paign organizations. The

Commission m ay decide at a later time

to initiate a rulemaking to m ove

paragraph (d) of § 110.8 to a m ore

appropriate p lace in the regulations.

Section 110.4 Prohibited Contributions

(2 U.S.C. 441e, 4 4 lf 441g, 432(c)(2))

This section im plements sections 441e

and 441f o f the FE C A by prohibiting

contributions from foreign nationals in

connection w ith any election for local,

State or Fed eral public office, and by

prohibiting contributions in the nam e of

another. Section 110.4 also sets out

restrictions on contributions of currency,

in a cco rd an ce w ith sections 441g and

432(c)(2) of the A ct. The Com m ission
158 / Thursday, August 17, 1989 / Rules and Regulations t 34105

received no public comments on this

section.

Paragraph (a) of § 110.4 contains no

substantive changes regarding foreign

nationals.

The rules pertaining to contributions

in the name of another follow the

current provisions, except that new

paragraph Cb)(l)(iii) has been added to

specifically prohibit any person from

knowingly helping or assisting any other

person in making a contribution in the

name of another. Former paragraph

(b)(l)(iii) has been renumbered as

paragraph (b)(l)(iv). The new language

is consistent with a recent judicial

interpretation of 2 U.S.C. 441f in FECv.

Rodriguez, No. 86-687 Civ-T-IO(B) (M.D.

Fla. May 5,1987) (unpublished order

denying motion for summary judgment).

New paragraph (b)(l)(iii) applies to

those who initiate or instigate or have

some significant participation in a plan

or scheme to make a contribution in the

name of another, including those who

solicit or act as go-betweens to third

parties whose donations are reimbursed

by the individual who performs a purely

ministerial act without any knowledge

of the scheme, such as someone who

routinely reviews or approves all checks

drawn on a specific account

New paragraph (c) follows the

language of current paragraph (c)

regarding the making and receipt of cash

contributions.

Section 110.5 Annual Contribution

Limitation for Individuals (2 U.S.C.

441a(a)(3))

New section 110.5 generally follows

current § 110.5 by implementing the

$25,000 limitation on contributions made

by individuals in a calendar year. The

new provision contains several minor

clarifying revisions to the current rules.

First, the title of this section has been

amended to emphasize that the $25,000

annual limitation applies only to

contributions made by individuals. Next,

new paragraph (a), designated “Scope,"

has been added to clarify that this

section only applies to individuals

permitted to make contributions under

the Act and does not apply, for example,

to foreign nationals or federal

contractors. Accordingly, previous

paragraphs (a) through (d) have been

renumbered (b) through (e).

The wording of new § 110.5(b) has

been slightly changed from current

§ 110.5(a) to clarify that the $25,000

contribution limit applies to all

contributions made in the same calendar

year. This provision has also been

modified somewhat from the proposed

rules because the language of the

proposed rules could have been

misinterpreted to mean that the annual

limit does not apply to contributions to

delegates or contributions to persons

making independent expenditures. The

revised language clarifies that these

types of contributions are subject to the

$25,000 annual limit. The Commission

also notes that contributions to a

“testing the waters” account under

§ 101.3 are subject to the annual

contribution limit in the event that the

individual receiving the contributions

subsequently becomes a candidate. The

$25,000 annual limit also applies to

contributions to an account set up under

11 CFR 9003.3, including a legal and

accounting compliance fund.

Paragraph 110.5(c), which is based

upon current paragraph 110.5(b),

explains when contributions made in a

nonelection year are treated as made in

an election year for purposes of the

annual contribution limit. A definition of

the term “nonelection year” has been

included to avoid repetition of the

phrase “in a year other than the

calendar year in which an election is

held.”

Paragraphs (d) and (e) generally

follow current paragraphs (c) and (d),

respectively, by providing that the

$25,000 limit applies to contributions to

persons (including political committees)

making independent expenditures and

to contributions to delegates and

delegate committees. None of the public

comments addressed the possible

changes to § 110.5 put forth by the

Commission.

Section110.6 Earmarked Contributions

(2 U.S.C. 441a(a)(8))

Section 110.6 of the regulations

implements 2 U.S.C. 441a(a)(8), which

requires that all contributions made by a

person, either directly or indirectly, on

behalf of a particular candidate,

including contributions which are in any

way earmarked or otherwise directed

through an intermediary or conduit to

such candidate, must be treated as

contributions from that person to the

candidate. Under section 441a(a)(8) of

the FECA and § 110.6 of the

Commission's regulations, conduits and

intermediaries must report the original

source of the earmarked contribution, as

well as the intended recipient, to the

Commission and to the intended

recipient. Section 110.6 also provides •

that contributions over which the

conduit exercises direction or control

are treated as contributions from both

the original contributor and the conduit*

and are reportable as such. This

provision is based on the legislative

history of the 1974 amendments to the

FECA.

The title of § 110.8 has been amended

to include a réference to section

441a(a)(8) of the FECA. The current title

incorrectly refers to section

441a(a)(7)(A) of the Act.

The Commission received three

comments, and heard testimony from

one of those commenters, regarding

proposed revisions to the earmarking

regulations. Two of these comments

addressed questions concerning the

permissibility of separate segregated

funds acting as conduits, while the

comments and testimony of the third

commenter concerned the direction or

control provisions.

Section 110.6(a) General

New § 110.6(a) follows current

1110.6(a) by treating contributions

transmitted through a conduit to a

candidate as subject to the original

contributors’ limits on contributions to

that candidate.

The Notice of Proposed Rulemaking

raised the question of whether the

requirements set out in § 110.6 should

apply to contributions earmarked to a

political committee that is not an

authorized committee of any candidate,

such as a political action committee. The

Commission noted that the statutory

provision on which § 110.6 is based only

refers to contributions earmarked or

otherwise directed to a particular

candidate. None of the public comments

addressed this question.

The Commission has decided that

§ 110.6 should continue to be limited to

contributions earmarked to candidates

and their authorized committees, and

thus should not be extended to include

contributions earmarked to other types

of political committees. However, as

indicated in AOs 1983-18 and 1981-57,

conduits would not be barred from

forwarding earmarked contributions to

unauthorized committees so long as they

comply with the time limits for

forwarding the contributions, as

prescribed by 11 CFR 102.8. In such

situations, unauthorized committees are

required to report the amount received

as a contribution from the original

contributor pursuant to 11 CFR

104.3(a)(4).

Section 110.6(b) Definitions

The définition of “earmarked” in

§ 110.6(b)(1) follows the definition set

forth in current § 110.6(b)

New paragraph (b)(2) has been added

to provide a definition of the phrase

"conduit or intermediary.” The

Commission has decided that providing

a definition would be more useful than

the previously proposed approach of

simply setting forth factors or criteria for

deciding who is a conduit. Additional

guidance is needed because the question
34106 Federal Register / VoL 54, No. 158 / Thursday, August 17, 1989 / Rules and Regulations

of whether a particular individual is

acting as a conduit has been raised in

several contexts, including compliance

matters such as MUR 1690. Neither the

provisions of the FECA, nor its

legislative history, indicates what was

intended by the term “conduit or

intermediary.”

The new definition of “conduit or

intermediary” in paragraph (b)(2)

encompasses all those who receive and

forward contributions earmarked to a

candidate or authorized committee, with

certain exceptions discussed below.

Please note that this definition does not

distinguish between the term “conduit”

and the term “intermediary.” The

Commission considers these terms to be

synonymous.

The new rules recognize that certain

persons are not properly considered

conduits and are consequently not

subject to the requirements of § 110.6.

First, individuals who are employees or

full-time volunteers for a campaign, or

who are expressly authorized to engage

in fundraising on behalf of the campaign

and occupy significant positions in the

campaign organization, would be

viewed as agents of the campaign rather

than conduits so long as they do not act

on behalf of an entity prohibited from

making contributions, such as a

corporation. The Commission notes that

in determining whether an individual is

acting as an agent of the candidate’s

campaign or as an agent of another

entity, one consideration would be

whether the individual incurred any

solicitation .expenses, and if so, whether

reimbursement was provided by the

campaign committee or by any other

entity.

Other exceptions from the definition

of conduit include affiliated committees,

fundraising representatives conducting

joint fundraising with the candidate’s

campaign committee, and commercial

fundraising firms retained by the

campaign. Fundraising representatives

have been excluded because their

activities are already covered by the

joint fundraising regulations at 11 CFR

102.17 and 9034.8. In addition, the

activities of affiliated committees

receiving earmarked contributions are

governed by the affiliation rules in 11

CFR 110.3. Commercial fundraising firms

hired by the candidate’s authorized

committee are considered agents of the

committee rather than conduits.

The new definition of conduit also

explicity provides that persons who are

prohibited from making contributions or

expenditures in connection with Federal

elections are also prohibited from

serving as conduits for contributions

earmarked to candidates or their

campaign committees. Thus,

corporations, labor organizations,

government contractors and foreign

nationals are not permitted to be

conduits. This is consistent with AO

1986-4. However, this provision does not

limit the ability of an organization or a

committee, other than a foreign national,

to function as a collecting agent for a

related separate segregated fund under

11 CFR 102.6.

The Notice of Proposed Rulemaking

also sought comments on whether to

continue to permit separate segregated

funds (SSFs) to serve as conduits for

earmarked contributions. In three

previous advisory opinions the

Commission has permitted such activity.

AOs 1986-4; 1981-21; and re: AO R1976-

92. However, the House Report

accompanying the 1974 amendments to

the Act states that the earmarking

provisions "are not intended to apply to

contributions from separate segregated

funds maintained by corporations or

labor organizations because donors to

such funds must relinquish control of

their donation to the corporation or

labor organization and such donors may

not earmark or direct such donations to

any specific candidate or political

committee.” H.R. Rep. No. 93-1239, 93d

Cong., 2d Sess. 15 (1974). This statement

is repeated in the Conference Report

H.R. Conf. Rep. No. 93-1438,93d Cong.,

2d Sess. 51 (1974). Hence, the NPRM

proposed three alternative approaches;

(1) Explicitly prohibit earmarking

through SSFs; (2) Permit SSFs to receive

and forward earmarked contributions

but clarify that the contributions must

not exceed the amount that the original

contributor may donate directly to the

candidate; (3) Permit SSFs to receive

and forward earmarked contributions

but specifically prohibit the corporation

or labor organization from exercising

direction or control over the choice of

the recipient candidate.

Two comments from SSFs addressed

these concerns. One favored alternative

2, allowing earmarked contributions

through SSFs if they are limited to what

the individual could lawfully contribute

directly to the candidate. The other

comment supported the current

approach of permitting earmarking

through SSFs and stated that nothing

would be added by the adoption of

either alternative 2 or 3 because those

restrictions are already located in other

portions of the regulations. This

commenter felt that the present system

promotes support for a wider range of

candidates and political views.

Under new paragraph (b)(2), SSFs

may continue to act as conduits or

intermediaries for earmarked

contributions. However, these

earmarked contributions must not

exceed the contribution limits that apply 

to the original contributor’s donations to 

the candidate under section 441a of the 

Act. This practice is also consistent with 

§ 114.3(c)(2), which allows candidates 

and party representatives to address an 

organization’s restricted class and to 

ask that contributions to the 

organization’s SSF be designated for the 

candidate’s campaign or party. SSFs 

acting as conduits will continue to be 

required to report their conduit activities 

pursuant to section 110.65 (c) or (d). See

AO 1981-21 and re: AOR 1976-92.

Furthermore, if a SSF incurs expenses in 

soliciting contributions on behalf of 

particular candidates, those solicitation 

expenses should be reported as in-kind 

contributions or as independent 

expenditures by the SSF to the 

candidate, depending on the 

circumstances. Finally, the Commission 

had decided that where the 

circumstances demonstrate that the SSF 

exercises direction or control over 

earmarked contributions, the SSF must 

treat those contributions as 

contributions from both the original 

contributor and the SSF. This is 

consistent with the Commission’s 

decisions in AO 1986-4 and re: AOR 

1976-92.

As discussed above, under the new

definition of "conduit or intermediary” a

corporation or labor organization may

not itself act as a conduit. This

represents a continuation of the

Commission’s previous approach

regarding the permissible scope of

activities undertaken by a corporation

of labor organization not acting through

a SSF. Within the confines of 11 CFR

114.3, the corporation or labor

organization may encourage those in its

solicitable class to contribute to

particular candidates or political

committees. See Explanation and

Justification for § 114.3, H.R. Doc. No.

95-44, 95th Cong., 1st Sess. 104 (1977).

However, in AOs 1987-29,1986-4 and

1982-2 the Commission has stated that

corporations are not permitted to act as

conduits or intermediaries or facilitate

the making of contributions. If a

corporation establishes an employee

participation plan pursuant to 11 CFR

114.11, only the custodian of the

accounts, and not the corporation, may

forward employee contributions that

have accumulated in the accounts. The

Explanation and Justification for section

114.11 explains that corporations and

labor organizations are also forbidden

to exercise any direction or control over

employee contributions to such plans

because this would result in illegal

corporate expenditures. H.R. Doc. No.
Fédéral Register / Vol. 54, No. 158 / Thursday, August 17, 1989 / Rules and Regulations 34107

95-44,95th Cong., 1st Sess. 116,117

(1977).

The new definition of “conduit or

intermediary” also recognizes that those

who serve as conduits or intermediaries

are required to forward earmarked

contributions to the intended recipient

candidate committees within the time

periods prescribed by 11 CFR 102.8.

However, anyone who is prohibited

from being a conduit, but nevertheless

receives earmarked contributions, must

return them to the contributor rather

than forwarding them.

Section 110.6(c) Reporting o f

Earmarked Contributions

The Commission notes that sometimes

contributions must be reported by

several entities under different

provisions of the Act. The principal

reporting provision is 2 U.S.C. 434,

which requires political committees,

including committees authorized by

candidates, to report their receipts and

disbursements to the Commission.

Section 441a(a)(8) of the Act requires

conduits and intermediaries to report

the source and intended recipient of

earmarked contributions to the

Commission and to the intended

recipient. Section 432(b) of the FECA is

also, in some respects, a reporting

provision as it requires persons

receiving contributions for authorized

and unauthorized political committees

to forward certain information together

with the contribution to the committee’s

treasurer, but not to the Commission.

Through its regulations at part 104,

§ 102.8 and § 110.6, the Commission has

set forth a reporting and recordkeeping

system which takes into account the

overlapping requirements of these

statutory provisions.

The Commission has revised and

reorganized the provisions of § 110.6(c)

regarding the reporting of earmarked

contributions. Paragraph 110.6(c)(1)

consolidates the conduit reporting

provisions in current paragraphs (c)(1),

(e)(2), (c)(4), and (c)(5). Paragraph

110.6(c)(2) sets forth reporting

requirements for recipient candidates

and their authorized committees based

on present paragraph (c)(3).

Paragraph (c)(1) generally follows the 

provisions of current paragraph (c)(1). 

However, the new rules specify that 

information on earmarked contributions 

should be included in the conduit’s 

report for the reporting period in which 

such contributions were received, rather 

than simply stating that the information 

should be included in the conduit’s 

“next due” report.

Section 110.6(c)(1) continues the 

current requirement that conduits not 

otherwise subject to the reporting

requirements of 11 CFR part 1 0 4 must

still report earmarked contributions to

the Commission by letter. However, this

paragraph has been amended to state

that the letter is due thirty days after

forwarding the earmarked contribution.

The current rules do not specify a due

date for the letter. Two alternatives

were discussed in the NPRM—either

requiring the letter to be filed within 30

days after receiving the earmarked

contribution or within the time frames

set out in § 104.5(c) for filing reports.

The Commission concluded that it 

would be simplest to require reporting 

within thirty days after forwarding the 

earmarked contribution.

Revised paragraph (c)(1) also requires

conduits to use memo entries to report

contributions passed on by means of the

contributor’s check. The current

regulations do not specify that memo

entries be used.

New paragraph (c)(1) also

incorporates paragraph (c)(2) of the

current regulations by providing that the

information pertaining to earmarked

contributions shall be supplied to the

candidate at the same time that the

contribution itself is passed on to the

intended recipient. For clarity, this

paragraph contains a cross-reference to

the ten-day forwarding requirement of

11 CFR 102.8(a).

In addition, revised paragraph (c)(1)

follows present paragraph (c)(4)

regarding the information that the

conduit must report. Accordingly, the

conduit must report the name and

address of the contributor, the amount

of the contribution, the date the conduit

received it, the intended recipient’s

name, the date the contribution was

forwarded and whether it was

forwarded in cash, by the contributor’s

check or by the conduit’s check. For

contributions exceeding $200, the report

must also include the contributor’s

occupation and the name of his or her

employer.

Finally, the new conduit reporting

rules delete the previous exception to

the reporting requirements found in

current paragraph (c)(5) for "occasional,

isolated, or incidental physical transfers

of checks or other written instruments

payable to a candidate or his or her

authorized committee” aggregating

$1,000 or less per candidate per year.

That exception was created when the

Commission had authority to grant

waivers to the Act’s reporting

obligations. As the Commission no

longer has waiver authority, it is

necessary to delete the exception.

New § 110.6(c)(2) requires candidates

and their authorized committees to

report the receipt of earmarked

contributions. In contrast, the present

rules state that all intended recipients

must report earmarked contributions.

The Commission has decided to restrict

the reporting obligation to intended

recipients that are candidates or

authorized committees because 2 U.S.C.

441a(a)(8) refers to contributions

earmarked to a particular candidate, but

does not mention contributions

earmarked to other recipients, such as

political action committees.

Revised paragraph (c)(2) amends the

reporting requirements for candidates

and authorized committees in several

other respects. The revisions clarify the

reporting obligations that apply if the

candidate or committee receives one or

more earmarked contributions from a

conduit which in the aggregate exceed

$200 in a calendar year. The recipient

candidate or committee is required to

itemize the identification of the conduit,

the total amount received from the

conduit and the date of receipt. If

contributions from a contributor

aggregate over $200 in any calendar

year, the candidate or committee is also

required to itemize the identification of

the contributor, the amount, and the

date of receipt. For earmarked

contributions aggregating $200 or less,

the reporting requirements in 11 CFR

part 104 continue to apply.

No public comments were received

regarding the amendments to the

reporting provisions in 11 CFR

110.6(c)(1) and (2).

Section 110.6(d) Direction or Control

The new regulations do not change

the longstanding requirement that for

purposes of a conduit’s contribution

limits, a contribution is treated as made

by the conduit if the conduit exercises

any direction or control over the choice

of the recipient candidate. This rule is

based on the House Report

accompanying the 1974 amendments to

the Act. It states that "if a person

exercises any direct or indirect control

over the making of a contribution, then

such contribution shall count toward the

limitation imposed with respect to such

person under [current 2 U.S.C. 441a], but

it will not count toward such a person’s

contribution limitation when it is

demonstrated that such person

exercised no direct or indirect control

over the making of the contribution

involved.” H.R. Rep. No. 93-1239, 93d

Cong., 2d Sess. 16 (1974). The

Conference Report repeats this language

and states that the Conference

substitute is the same as the House

amendment with certain exceptions not

relevant here. H.R. Rep. No. 93-1438, 93d

Cong., 2d Sess. 51, 52 (1974).
34108 Federal Register / Vol. 54, No. 158 / Thursday, August 17, 1989 / Rules and Regulations

In the course of this rulemaking the 

Commission considered changing the 

terminology in § 110.6(d) to refer to 

“direct or indirect control over the ' 

making of an earmarked contribution” 

to more closely conform to the language 

set out in the Congressional reports 

discussed above. However, the 

Commission has now decided to retain 

the phrase “direction or control” used in 

the current regulation because this 

wording has become a commonly 

recognized term. The Commission also 

notes that a change in the wording could 

create the mistaken assumption that the 

Commission has changed the standard 

used to determine when the contribution 

counts against the conduit's contribution 

limits in addition to counting against the 

original contributor’s limits. The 

Commission intends to maintain the 

current approach regarding the 

circumstances under which the direction 

or control rule applies.

The Commission also considered

whether it would be advisable to

provide criteria or examples or a

definition of direction or control. The

legislative history provides no guidance

as to when this rule should apply. In the

past, the Commission has considered

such factors as whether the conduit

controlled the amount and timing of the

contribution, and whether the conduit

selected the intended recipient. See

MUR 1028, AO 1986-4 and re: AQR

1976-92. The Commission has also

distinguished a “suggestion” to make a

contribution from actual direction or

control over the contribution. AO 1980-

46.

In response to the questions raised in

the NPRM, one organization submitted a

written comment and testimony urging

the Commission to revise this provision

to prevent certain situations from

occurring. The commenter pointed out

that in recent years several political

committees have collected sizeable

numbers of checks made out to

particular candidates, "bundled” them

together and turned them over to the

candidates. The commenter argued that

bundling substantially undermines one

purpose of the Act, which is to limit the

actuality or appearance of corruption

resulting from large individual financial

contributions. See Buckley v. Valeo, 424

U.S. 1, 26-27 (1976). For this reason, the

commenter urged the Commission to

revise § 110.6(d) to provide that the

conduit exercises direction or control if

the conduit actively solicits others to

contribute and then turns the funds over

to the candidate in such a way that the

candidate is aware of the conduit’s role.

The Commission has carefully 

considered this comment, as well as

several different versions of possible

regulatory language. In light of the wide

variety of earmarking situations which

have arisen in the past, the Commission

is not able at this time to formulate

regulatory language that clearly

delineates situations where direction or

control exists from those in which the

conduit does not exercise direction or

control. Accordingly, the Commission

will continue to evaluate these

situations on a case-by-case basis.

However, further guidance on this can

be found in AOs 1987-29,1980-4,1980-

46 and re: AOR1976-92 as well as

MURs 1028 and 2282.

Finally, the Commission has made

several revisions to § 110.6(d)(2) to

clarify the reporting of contributions

when the conduit exercises direction or

control. The conduit’s reports to the

Commission and to the recipient should

indicate that the contribution is made by

both the orginai contributor and the

conduit, and that the entire amount is

attributed to each of them. The recipient

candidate or authorized committee

should also report the dual attribution of

the contribution.

Conforming Amendments

In addition to the foregoing revisions

to 11 CFR 110.3,110.4,110.5, and 110.8,

several amendments have been made to

other sections of the Commission’s

regulations for clarification and to make

those sections consistent with the

revised language in 11 CFR 110.3 through

110.6. The conforming amendments are

located in 11 CFR 100.5(g), 102.2(b),

110.1(f), 110.8(d), 114.5(g), 114.8(g), and

9034.4(d). The Commission received no

public comments on these changes.

Section 100J> Political Committee (2

U.S.C. 431 (4), (5), (6))

The definition of “affiliated

committee" in § 100.5(g) has been

revised to follow the language of new

§ 100.3(a).

Section 102.2 Statement o f

Organization: Forms and Committee

Identification Number (2 U.S.C. 433 (b),

(c))

The Commission has made two

conforming amendments to the rules

concerning Statements of Organization

filed by political committees. First,

Cross-references to § 110.3(a), 110.3(b),

110.14(1), and 110.14(k) have been added

to assist political committees filing

Statements of Organization in locating

the applicable provisions concerning

affiliation with other political

committees, including political party

committees and delegate committees.

Secondly, the revisions clarify that

Statement of Organization must disclose

situations where an unauthorized 

committee and a principal campaign 

committee are affiliated.

Section 100.1 Contributions by Persons

Other Than M ulticandidate Political

Committees (2 U.S.C. 441a(a)(l))

There are no substantive changes in

this section. However, in paragraph

(f)(3), the cross-reference to current

§ 110.3(a)(2)(iv) has been revised to refer

to new § 110.3(c)(4).

Section 110.8 Presidential Candidate

Expenditure Limitations

There are not substantive changes in

this section. However, in paragraph

(d)(2), regarding transfers between

committees of dual candidates, the

cross-reference to current

§ 110.3(a)(2)(iv) has been revised and

corrected to refer to new § 110.3(c)(5).

The cross-reference had incorrectly

referred to the provision on transfers

between previous and current campaign

committees rather than the provision

concerning transfers between

committees of candidates concurrently

running for more than one office.

Section 114.5 Separate Segregated

Funds

A new sentence has been added to

paragraph (g)(1) of § 114.5 to clarify that

for solicitation purposes, the affiliation

factors found in § 100.5(g)(4) shall be

used to determine whether an

organization is an affiliate of a

corporation. The new sentence is

consistent with AOs 1985-31 and 1983-

48, and thus does not represent a

substantive change.

Section 114.8 Trade Associations

A new sentence has been added to

paragraph (g)(1) of § 114.8 to clarify that

for solicitation purposes, the affiliation

factors found in § 100.5(g)(4) shall be

used to determine whether an entity is

an affiliate of a federation of trade

associations. This new sentence follows

the new language added to § 114.5(g)

and does not represent a substantive

change.

Section 9034.4 Use o f Contributions

and Matching Payments

Section 9034.4(d), which governs

transfers of funds by candidates

receiving federal matching funds, has

been amended in three respects. First,

new language has been added to

paragraph (a) to clarify the relationship

between this provision and the transfer

rules at new 11 CFR 110.3(c)(5)

applicable to dual Federal candidates.

Next, the cross-reference to current

§ 110.3(a)(2)(v) has been changed to
Federal Register / Vol, 54, No. 158 / Thursday, August 17, 1089 / Rules an d Regulations 34193

revised $ 110.3(c)(5), and a new crossreference to § 110.8(d) has been added 

to assist the reader in locating 

additional provisions pertaining to 

transfers. Finally, § 9034.4(d) has been 

reworded to clarify that the statutory 

requirements set forth in this paragraph 

apply to all candidates who have 

elected to receive matching funds, and 

are not limited to those who have 

already received matching funds.

List of Subjects

11CFR Part 100

Elections, Political com m ittees and

parties.

11 CFR Part 102

Political com m ittees and parties,

Reporting requirem ents.

11 CFR Part 110

Aliens, Cam paign funds, Political

candidates. Political com m ittees and

parties.

11 CFR Part 114

Business and industry. Elections.

11 CFR Part 9034

Campaign funds. Elections, Political 

candidates.

For the reasons set out in the 

preamble, subchapters A and F, chapter 

I, title 11 of the Code of Federal 

Regulations are amended as follows:

PART 100—SCOPE AND DEFINITIONS

(2 U.S.C. 431)

1. The authority citation for part 100

continues to read as follows:

Authority: 2 U£.C. 431,438{a}{8j2.11 CFR part 100 is amended by 

revising 5 100.5(g) to read as follows:

§ 100 5 Political com m ittee (2 U.S.C. 431

(4), (5), (6)).

* * * * *

(g) A ffiliated committee. (1) All 

authorized committees of the same 

candidate for the same election to 

Federal office are affiliated. (2) All 

committees (including a separate 

segregated fund, see 11 CFR part 114) 

established, financed, maintained or 

controlled by the same corporation, 

labor organization, person, or group of 

persons, including any parent, 

subsidiary, branch, division, 

department, or local unit thereof, are 

affiliated. “Local unit” may include, in 

appropriate cases, a franchisee, 

licensee, or State or regional 

association. (3) Affiliated committees 

sharing a single contribution limitation 

under paragraph (g)(2) of this section 

include all of the committees

established, financed, maintained or 

controlled by—

(i) A single corporation and/or its 

subsidiaries;

(ii) A single national or international 

union and/or its local unions or other 

subordinate organizations;

(iii) An organization of national or 

international unions and/or all its State 

and local central bodies;

(iv) A membership organization,

(other than political party committees, 

see 11 CFR 110.3(b)} including trade or 

professional associations, see 11 CFR 

114.8(a), and/or related Slate and local 

entities of that organization or group; or

(v) The same person or group of 

persons,

(4)(i) The Commission may examine 

the relationship between organizations 

that sponsor committees, between the 

committees themselves, or between one 

sponsoring organization and a 

committee established by anoiber 

organization to de termine whether 

committees are affiliated.

(ii) in determining whether 

committees not described in paragraphs

(g)(3) (i)-(iv) of this section are 

affiliated, the Commission will consider 

the circumstantial factors described in 

paragraphs (g)(4Xii) (A) through {)) of 

this section. The Commission will 

examine these factors in the context of 

the overall relationship between 

committees or sponsoring organizations 

to determine whether the presence of 

any factor or factors is evidence of one 

committee or organization having been 

established, financed, maintained or 

controlled by another committee or 

sponsoring organization. Such factors 

include, but are not limited to:

(A) Whether a sponsoring 

organization owns controlling interest in 

the voting stock or securities o f the 

sponsoring organization of another 

committee;

(B) Whether a sponsoring organization 

or committee has the authority or ability 

to direct or participate in the governance 

of another sponsoring organization or 

committee through provisions of 

constitutions, bylaws, contracts, or other 

rules, or through formal or informal 

practices or procedures;

(C ) Whether a sponsoring 

organization or committee has the 

authority or ability to hire, appoint, 

demote or otherwise control the officers, 

or other decisionmaking employees or 

members of another sponsoring 

organization or committee;

(D) Whether a sponsoring 

organization ot committee has a 

common or overlapping membership 

with another sponsoring organization or 

committee which indicates a formal or

ongoing relationship between the

sponsoring organizations or committees;

(E) Whether a sponsoring organization

or committee has common er

overlapping officers or employees with

another sponsoring organization or

committee which indicates a formal or

ongoing relationship between the

sponsoring organizations or committees;

(F) Whether a sponsoring organization

or committee has any members, officers

or employees who were members,

officers or employees of another

sponsoring organization or committee

which indicates a formal or ongoing

relationship between the sponsoring

organizations or committees, or which

indicates the creation of a successor

entity;

(G) Whether a sponsoring

organization or committee provides

funds or goods in a significant amount

or on an ongoing basis to another

sponsoring organization or committee,

such as through direct or indirect

payments for administrative,

fundraising, or other costs, but not

including foe transfer to a committee of

its allocated share of proceeds jointly

raised pursuant to 1 1 CFR 102.17;

(H) Whether a sponsoring

organization or committee causes or

arranges for funds in a significant

amount or on an ongoing basis to be

provided to another sponsoring

organization or committee, but not

including the transfer to a committee of

its allocated share of proceeds jointly

raised pursuant to 11 CFR 102.17;

(I) Whether a sponsoring organization

or committee or its agent had an active

or significant role in foe formation of

another sponsoring organization or

committee; and

(J) Whether foe sponsoring

organizations or committees have

similar patterns of contributions or

contributors which indicates a formal or

ongoing relationship between the

sponsoring organizations or committees.

PART 192—REGISTRATION,

ORGANIZATION, AND

RECORDKEEPING BY POLITICAL

COMMITTEES (2 U.S.C. 433)

3. The authority citation for part 102

continues to read as follows:

Authority: 2 U.S.C. 432,433,438(a)(8). 44ld.

4, Section 1 0 2 .2 is amended by

revising paragraphs (b)(1 ) introductory

text and (b)(l)(i) to read as follows: .

§ 102.2 Statement o f organization: Forms

and committee identification number (2 

U-S.C. 433(b). (c)).

* • * * * *

(b) * * *
34110 Federal Register / Vol. 54, No. 158 / Thursday, August 17, 1989 / Rules and Regulations

(1) "Affiliated committee” includes 

any committee defined in 11 CFR 

100.5(g), 110.3(a) or (b), or 110.14(j) or

(k).

(i) A principal campaign committee is 

required to disclose the names and 

addresses of all other authorized 

committees which have been authorized 

by its candidate, and all other 

unauthorized committees that are 

affiliated with the principal campaign 

committee. Authorized committees, and 

unauthorized committees that are 

affiliated, need only disclose the name 

of their principal campaign committee.

* * * * *

PART 110—CONTRIBUTION AND 

EXPENDITURE LIMITATIONS AND 

PROHIBITIONS

5. The authority citation for part 110 

continues to read as follows:

Authority: 2 U.S.C. 431(8), 431(9), 432(c)(2), 

437(a)(8), 438(a)(8), 441a, 441b, 44ld, 441e,

441f, 441g, 441h and 441i.

6. Section 110.1 is amended by 

revising paragraph (f)(3) to read as 

follows:

§ 110.1 Contributions by persons other

than multicandidate political committees (2

U.S.C. 4413(a)(1)).

* * * * *

(f) * * *

(3) No principal campaign committee 

or other authorized political committee 

of that candidate for one election for 

one Federal office transfers funds to, 

loans funds to, makes contributions to, 

or makes expenditures on behalf of 

another principal campaign committee 

or other authorized political committee 

of that candidate for another election for 

another Federal office, except as 

provided in 11 CFR 110.2(c)(4). 

*****

7. Section 110.3 is revised to read as 

follows:

§ 110.3 Contribution limitations for

affiliated committees and political party

committees; Transfer (2 U.S.C. 441a(a)(5),

441a (a)(4)).

(a) Contribution limitations for

affiliated committees. (1) For the 

purposes of the contribution limitations 

of 11 CFR 110.1 and 110.2, all 

contributions made or received by more 

than one affiliated committee, 

regardless of whether they are political 

committees under 11 CFR 100.5, shall be 

considered to be made or received by a 

single political committee. See 11 CFR 

100.5(g). Application of this paragraph 

means that all contributions made or 

received by the following committees 

shall be considered to be made or

received by a single political 

committee—

(1) Authorized committees of the same 

candidate for the same election to 

Federal office; or

(ii) Committees (including a separate 

segregated fund, see 11 CFR part 114) 

established, financed, maintained or 

controlled by the same corporation, 

labor organization, person or group of 

persons, including any parent, 

subsidiary, branch, division, department 

or local unit thereof. For the purposes of 

this section, “local unit” may include, in 

appropriate cases, a franchisee, 

licensee, or State or regional 

association.

(2) Affiliated committees sharing a 

single contribution limitation under 

paragraph (a)(l)(ii) of this section 

include all of the committees 

established, financed, maintained or 

controlled by—

(i) A single corporation and/or its 

subsidiaries;

(ii) A single national or international 

union and/or its local unions or other 

subordinate organizations;

(iii) An organization of national or 

international unions and/or all its State 

and local central bodies;

(iv) A membership organization,

(other than political party committees, 

see paragraph (b) of this section) 

including trade or professional 

associations, see 11 CFR 114.8(a), and/ 

or related State and local entities of that 

organization or group; or

(v) The same person or group of 

persons.

(3) (i) The Commission may examine 

the relationship between organizations 

that sponsor committees, between the 

committees themselves, or between one 

sponsoring organization and a 

committee established by another 

organization to determine whether 

committees are affiliated.

(ii) In determining whether 

committees not described in paragraphs 

(a)(2) (i)-(iv) of this section are 

affiliated, the Commission will consider 

the circumstantial factors described in 

paragraphs (a)(3)(H) (A) through (J) of 

this section. The Commission will 

examine these factors in the context of 

the overall relationship between 

committees or sponsoring organizations 

to determine whether the presence of 

any factor or factors is evidence of one 

committee or organization having been 

established, financed, maintained or 

controlled by another committee or 

sponsoring organization. Such factors 

include, but are not limited to:

(A) Whether a sponsoring 

organization owns a controlling interest 

in the voting stock or securities of the

sponsoring organization of another 

committee;

(B) Whether a sponsoring organization 

or committee has the authority or ability 

to direct or participate in the governance 

of another sponsoring organization or 

committee through provisions of 

constitutions, bylaws, contracts, or other 

rules, or through formal or informal 

practices or procedures;

(C) Whether a sponsoring 

organization or committee has the 

authority or ability to hire, appoint, 

demote or otherwise control the officers, 

or other decisionmaking employees or 

members of another sponsoring 

organization or committee;

(D) Whether a sponsoring 

organization or committee has a 

common or overlapping membership 

with another sponsoring organization or 

committee which indicates a formal or 

ongoing relationship between the 

sponsoring organizations or committees;

(E) Whether a sponsoring organization 

or committee has common or 

overlapping officers or employees with 

another sponsoring organization or 

committee which indicates a formal or 

ongoing relationship between the 

sponsoring organizations or committees;

(F) Whether a sponsoring organization 

or committee has any members, officers 

or employees who were members, 

officers or employees of another 

sponsoring organization or committee 

which indicates a formal or ongoing 

relationship between the sponsoring 

organizations or committees, or which 

indicates the creation of a successor 

entity;

(G) Whether a sponsoring 

organization or committee provides 

funds or goods in a significant amount 

or on an ongoing basis to another 

sponsoring organization or committee, 

such as through direct or indirect 

payments for administrative, 

fundraising, or other costs, but not 

including the transfer to a committee of 

its allocated share of proceeds jointly 

raised pursuant to 11 CFR 102.17;

(H) Whether a sponsoring 

organization or committee causes or 

arranges for funds in a significant 

amount or on an ongoing basis to be 

provided to another sponsoring 

organization or committee, but not 

including the transfer to a committee of 

its allocated share of proceeds jointly 

raised pursuant to 11 CFR 102.17;

(I) Whether a sponsoring organization 

or a committee or its agent had an active 

or significant role in the formation of 

another sponsoring organization or 

committee; and

0) Whether the sponsoring 

organizations or committees have
Federal Registér / Vól. 54, N o. 158 J Thursday, August 17, 1989 / Rules and Regulations 34111

similar patterns of contributions or 

contributors which indicates a formal or 

ongoing relationshp between the 

sponsoring organizations or committees.

(b) Contribution limitations for

political party committees. (1) F ot the 

purposes of the contribution limitations 

of 11 CFR 110.1 and 110.2, all 

contributions made or received by the 

following political committees shall be 

considered to be made or received by 

separate political committees—

(1) The national committee of a 

political party and any political 

committees established, financed, 

maintained, or controlled by the same 

national committee; and

(ii) The State committee o f the same 

political party.

(2) Application of paragraph (b)(l)(i) 

of this section means that—

(i) The House campaign committee 

and the national committee of a political 

party shall have separate limitations on 

contributions under 11 CFR 110.1 and 

110.2.

(îî) H ie Senate campaign committee 

and the national committee of a political 

party shall have separate limitations on 

contributions, except that contributions 

to a senatorial candidate made by the 

Senate campaign committee and the 

national committee of a political party 

are subject to a single contribution 

limitation under 11 CFR 110.2(e).

(3) All contributions made by the 

political committees established, 

financed, maintained, or controlled by a 

State party committee and by 

subordinate State party committees 

shall be presumed to be made by one 

political committee. This presumption 

shall not apply if—

(i) The political committee of the parly 

unit in question has not received funds 

from any other political committee 

established, financed, maintained, or 

controlled by any party unit; and

(ii] The political committee of the 

party unit in question does not make its 

contributions in cooperation, 

consultation or concert with, or at the 

request or suggestion of any other party 

unit or political committee established, 

financed, maintained, or controlled by 

another party unit.

(c) Transfers, The contribution 

limitations of 11 CFR 110.1 and 1102 

shall not limit the transfers set forth 

below in 11 CFR 110,3(c] (1) through

(1) Transfère of funds between 

affiliated committees or between party 

committees of the same political party 

whether or not they are affiliated or by 

collecting agents to a separate 

segregated fund made pursuant to I t 

CFR 102.6;

(2) Transfers of joint fundraising 

proceeds between organizations or 

committees participating in the joint 

fundraising activity provided that no 

participating committee or organization 

governed by 11 CFR 102.17 received 

more than its allocated share of the 

funds raised;

(3] Transfers of funds between the 

primary campaign and general election 

campaign of a candidate of funds 

unused for the primary;

• (4] Transfers of funds between a

candidate’s previous Federal campaign 

committee and his or her current Federal 

campaign committee, or between 

previous Federal campaign committees, 

provided that the candidate is not a 

candidate for more than one Federal 

office at the same time, and provided 

that the funds transferred are not 

composed of contributions that would 

be in violation of the Act. The cash on 

hand from which the transfer is made 

shall be considered to consist of the 

funds most recently received by the 

transferor committee. The transferor 

committee must be able to demonstrate 

that such cash on hand contains 

sufficient funds at the time o f the 

transfer that comply with the limitations 

and prohibitions of the Act to cover the 

amount transferred.

(i) “Previous Federal campaign 

committee” means a principal campaign 

committee, or other authorized 

committee, that was organized to further 

the candidate’s campaign in a Federal 

election that has already been held.

(ii) “Current Federal campaign 

committee” means a principal campaign 

committee, or other authorized 

committee, organized to further the 

candidate’s campaign in a future Federal 

election.

(iii) For purposes of the contribution 

limits, a contribution made after an 

election has been held, or after an 

individual ceases to be a candidate in 

an election, shall be aggregated with 

other contributions from the same 

contributor for the next election unless 

the contribution is designated for the 

previous election, or is designated for 

another election, and the candidate has 

net debts outstanding for the election so 

designated pursuant to 11 CFR 

110.1(b)(3).

(iv) For purposes of this section, an 

individual ceases to be a candidate in 

an election as of the earlier of the 

following dates—

(A) The date on which the candidate 

publicly announces that he or she will 

no longer be a candidate in that election 

for that office and ceases to conduct 

campaign activities with respect to that 

election; or

(B) The date on which the candidate is 

or becomes ineligible for nomination or 

election to that office by operation of 

law;

(5) Transfers of funds between the 

principal campaign committees o f an 

individual seeking nomination or 

election to more than one Federal office, 

as long as the conditions in 11 CFR 

110.3{cX5) (i), (ii) and (iii) are m et An 

individual will be considered to be 

seeking nomination or election to more 

than one Federal office if the individual 

is concurrently a candidate for more 

than one Federal office during the same 

or overlapping election cycles.

(i) The transfer shall not be made 

when the individual is actively seeking 

nomination or election to more than one 

Federal office. An individual will not be 

considered to be actively seeking 

nomination or election to a Federal 

office if:

(A) The individual publicly announces 

that he or she will no longer seek 

nomination or election to that office and 

ceases to conduct campaign activities 

with respect to that election, except in 

connection with the retirement of debts 

outstanding at the time of fee 

announcement;

(B) The individual is or becomes 

ineligible for nomination or election to 

that office by operation of law;

(C) Hie individual has filed a proper 

termination report with the Commission 

under 11 CFR 102.3; or

(D) The individual has notified the 

Commission in writing that the 

individual and his or her authorized 

committees will conduct no further 

campaign activities wife respect to that 

election, except in connection with fee 

retirement of debts outstanding at fee 

time of the notification;

(ii) The limitations on contributions by 

persons shall not be exceeded by fee 

transfer. The cash on hand from which 

the transfer is made shall be considered 

to consist of fee funds most recently 

received by the transferor committee.

The transferor committee must be able 

to demonstrate that such cash on hand 

contains sufficient funds at the time of 

the transfer that comply with the 

limitations and prohibitions of the Act to 

cover the amount transferred. A 

contribution shall be excluded from the 

amount transferred to the extent that 

such contribution, when aggregated with 

other contributions from the same 

contributor to the transferee principal 

campaign committee, exceeds the 

contribution limits set forth at 11 CFR 

110.1 or 110.2, as appropriate; and

(iii) The candidate has not elected to 

receive funds under 28 U.S.C. 9006 or 

9037 for either election; or
34112 Federal Register / Vol. 54, No. 158 / Thursday, August 17, 1989 / Rules and Regulations

(6) Transfers of funds from a 

candidate’s campaign committee for a 

nonfederal election to his or her 

principal campaign committee or other 

authorized committee for a federal 

election, provided that the funds 

transferred are not composed of 

contributions that would be in violation 

of the Act.

(i) The cash on hand from which the 

transfer is made shall be considered to 

consist of the funds most recently 

received by the transferor committee. 

The transferor committee must be able 

to demonstrate that such cash on hand 

contains sufficient funds at the time of 

the transfer that comply with the 

limitations and prohibitions of the Act to 

cover the amount transferred. A 

contribution shall be excluded from the 

amount transferred if the making or 

acceptance of such contribution in 

connection with an election for Federal 

office is prohibited by the Act. The 

amount transferred per contributor shall 

not exceed the limitations on 

contributions set forth at 11 CFR 110.1 or 

110.2, as appropriate. The campaign 

committee transferring the funds shall 

keep records of the sources of the funds 

in the account from which the transfer is 

made and, upon request, shall make 

such records available for examination 

by the Commission.

(ii) For purposes of the contribution 

limits, a contribution made after a 

nonfederal election has been held, or 

after an individual ceases to be a 

candidate in a nonfederal election 

pursuant to paragraph (c)(4)(iv) of this 

section, or after an individual has 

publicly announced that he or she is or 

will become a candidate in a particular 

election for Federal office, shall be 

aggregated with other contributions 

from the same contributor for that next 

election unless the contribution is 

designated for the previous nonfederal 

election or is designated for another 

election, and the candidate has net 

debts outstanding for the election so 

designated.

(iii) If a candidate’s nonfederal 

campaign committee transfers funds 

exceeding $1,000 to such candidate’s 

principal campaign committee or other 

authorized committee for a federal 

election, the nonfederal campaign 

committee shall become a political 

committee pursuant to 11 CFR 100.5(a) 

and shall file a Statement of 

Organization in accordance with 11 CFR 

102.2 no later than ten days after 

transferring the funds. Such committee 

shall be subject to the recordkeeping 

and reporting obligations of 11 CFR 

parts 102 and 104 and shall disclose in 

its first report its cash on hand balance,

the source(s) of such funds, and the 

amount transferred to the federal 

campaign committee. See 11 CFR 104.12. 

The funds transferred shall be deemed 

composed of the funds most recently 

received until the amount transferred is 

reached, excluding any amounts in 

excess of the contribution limits or the 

prohibitions of the Act. The nonfederal 

campaign committee shall itemize the 

sourcejs) of the funds transferred in a 

memo Schedule A as required by 11 CFR 

104.3(a)(4). The first report may be the 

termination report under 11 CFR 102.3.

(7) The authorized committees of a 

candidate for more than one Federal 

office, or for a Federal office and a 

nonfederal office, shall follow the 

requirements for separate campaign 

organizations set forth at 11 CFR 

110.8(d).

8. Section 110.4 is revised to read as 

follows:

§ 110.4 Prohibited contributions (2 U.S.C.

441e, 441f, 441g, 432(c)(2)).

(a) Contributions by foreign nationals.

(1) A foreign national shall not directly 

or through any other person make a 

contribution, or expressly or impliedly 

promise to make a contribution, in 

connection with a convention, caucus, 

primary, general, special, or runoff 

election in connection with any local, 

State or Federal public office.

(2) No person shall solicit, accept, or 

receive a contribution as set out above 

from a foreign national.

(3) For purposes of this section, 

“foreign national” means—

(i) A foreign principal, as defined in 22 

U.S.C. 611(b); or

(ii) An individual who is not a citizen 

of the United States and who is not 

lawfully admitted for permanent 

residence, as defined in 8 U.S.C. 

1101(a)(20);

(iii) Except that “foreign national” 

shall not include any individual who is a 

citizen of the United States.

(b) Contributions in the name o f

another. (1) No person shall—

(1) Make contribution in the name of 

another;

(ii) Knowingly permit his or her name 

to be used to effect that contribution;

(iii) Knowingly help or assist any 

person in making a contribution in the 

name of another; or

(iv) Knowingly accept a contribution 

made by one person in the name of 

another.

(2) Examples of "contributions in the 

name of another” include-^

(i) Giving money or anything of value, 

all or part of which was provided to the 

contributor by another person (the true 

contributor) without disclosing the 

source of money or the thing of value to

the recipient candidate or committee at 

the time the contribution is made, see 11 

CFR 110.0; or

(ii) Making a contribution of money or 

anything of value and attributing as the 

source of the money or thing of value 

another person when in fact the 

contributor is the source.

(c) Cash contributions. (1) With 

respect to any campaign for nomination 

for election or election to Federal office, 

no person shall make contributions to a 

candidate or political committee of 

currency of the United States, or of any 

foreign country, which in the aggregate 

exceed $100.

(2) A candidate or committee 

receiving a cash contribution in excess 

of $100 shall promptly return the amount 

over $100 to the contributor.

(3) A candidate or committee 

receiving an anonymous cash 

contribution in excess of $50 shall 

promptly dispose of the amount over 

$50. The amount over $50 may be used 

for any lawful purpose unrelated to any 

Federal election, campaign, or 

candidate.

9. Section 110.5 is revised to read as 

follows:

§ 110.5 Annual contribution limitation for

individuals (2 U.S.C. 441a(a)(3)).

(a) Scope. This section applies to all 

contributions made by any individual, 

except individuals prohibited from 

making contributions under 11 CFR 110.4 

and 11 CFR part 115.

(b) Annual limitation. No individual 

shall make contributions in any 

calendar year which aggregate more 

than $25,000.

(c) Contributions made in a

nonelection year. (1) For the purposes of 

this section, “nonelection year” means a 

year other than the calendar year in 

which a particular election is held.

(2) For purposes of this section, any 

contribution to a candidate or his or her 

authorized committee with respect to a 

particular election made in a 

nonelection year shall be considered to 

be made during the calendar year in 

which such election is held.

(3) For purposes of this section, any 

contribution to an unauthorized 

committee which is made in a 

nonelection year shall not be considered 

to be made during the calendar year in 

which an election is held unless:

(i) The political committee is a single 

candidate Committee which has 

supported or anticipates supporting the 

candidate; or

(ii) The contribution is earmarked by 

the contributor for a particular 

candidate With respect to a particular 

election.
(d) Independent expenditures. The 

annual limitation on contributions in 

this section applies to contributions 

made to persons, including political 

committees, making independent 

expenditures under 11 CFR part 109.

(e) Contributions to delegates and

delegate committees. The annual 

limitation on contributions in this 

section applies to contributions to 

delegates and delegate committees 

under 11 CFR 110.14.

10. Section 110.6 is revised to read as 

follows:

§ 110.6 Earmarked contributions (2 U.S.C,

441a (a)(8)).

(a) General. All contributions by a 

person made on behalf of or to a 

candidate, including contributions 

which are in any way earmarked or 

otherwise directed to the candidate 

through an intermediary or conduit, are 

contributions from the person to the 

candidate.

(b) Definitions. (1) For purposes of this 

section, “earmarked” means a 

designation, instruction, or 

encumbrance, whether direct or indirect, 

express or implied, oral or written, 

which results in ail or any part of a 

contribution or expenditure being made 

to, or expended on behalf of, a clearly 

identified candidate or a candidate’s 

authorized committee.

(2) For purposes of this section, 

"conduit or intermediary” means any 

person who receives and forwards an 

earmarked contribution to a candidate 

or a candidate’s authorized committee, 

except as provided in paragraph (b)(2)(i) 

of this section.

(i) For purposes of this section, the 

following persons shall not be 

considered to be conduits or 

intermediaries:

(A) An individual who is an employee 

or full-time volunteer working for the 

candidate’s authorized committee, 

provided that the individual is not acting 

in his or her capacity as a representative 

of an entity prohibited from making 

contributions;

(B) A fundraising representative 

conducting joint fundraising with the 

candidate’s authorized committee 

pursuant to 11 CFR 102.17 or 9034.8;

(C) An affiliated committee, as 

defined in 11 CFR 100.5(g);

(D) A commercial fundraising firm 

retained by the candidate or the 

candidate’s authorized committee to 

assist in fundraising; and

(E) An individual who is expressly 

authorized by the candidate or the 

Candidate’s authorized committee to 

engage in fundraising, and who occupies 

a significant position within the 

candidate’s campaign organization,

provided that the individual is not acting 

in his or her capacity as a representative 

of an entity prohibited from making 

contributions.

(ii) Any person who is prohibited from 

making contributions or expenditures in 

connection with an election for Federal 

office shall be prohibited from acting as 

a conduit for contributions earmarked to 

candidates or their authorized 

committees. The provisions o f this 

section shall not restrict the ability of an 

organization or committee to serve as a 

collecting agent for a separate 

segregated fund pursuant to 11 CFR 

102.6.

(iii) Any person who receives an 

earmarked contribution shall forward 

such earmarked contribution to the 

candidate or authorized committee in 

accordance with 11 CFR 102.8, except 

that—

(A) A fundraising representative shall 

follow the joint fundraising procedures 

set forth at 11 CFR 102.17.

(B) A person who is prohibited from 

acting as a conduit pursuant to 

paragraph (b)(2)(ii) of this section shall 

return the earmarked contribution to the 

contributor.

(c) Reporting o f earm arked

contributions—(1) Reports by conduits

and intermediaries, (i) The intermediary 

or conduit of the earmarked contribution 

shall report the original source and the 

recipient candidate or authorized 

committee to the Commission, the Clerk 

of the House of Representatives, or the 

Secretary of the Senate, as appropriate 

(see 11 CFR part 105), and to the 

recipient candidate or authorized 

committee.

(ii) The report to the Commission,

Clerk or Secretary shall be included in 

the conduit’s or intermediary’s report for 

the reporting period in which the 

earmarked contribution was received, 

or, if the conduit or intermediary is not 

required to report under 11 CFR part 104, 

by letter to the Commission within thirty 

days after forwarding the earmarked 

contribution.

(iii) The report to the recipient 

candidate or authorized committee shall 

be made when the earmarked 

contribution is forwarded to the 

recipient candidate or authorized 

committee pursuant to 11 CFR 102.8.

(ivj The report by the conduit or 

intermediary shall contain the following 

information:

(A) The name and mailing address of 

each contributor and, for each 

earmarked contribution in excess of 

$200, the contributor’s occupation and 

the name of his or her employer;

(B) The amount of each earmarked ; 

contribution, the date received by the

conduit, and the intended recipient as 

designated by the contributor; and

(C) The date each earmarked 

contribution was forwarded to the 

recipient candidate or authorized 

committee and whether the earmarked 

contribution was forwarded in cash or 

by the contributor’s check or by the 

conduit's check.

(v) For each earmarked contribution 

passed through the conduit’s or 

intermediary’s account, the information 

specified in paragraph (c)(l)(iv) (A) 

through (C) of this section shall be 

itemized on the appropriate schedules of 

receipts and disbursements attached to 

the conduit’s or intermediary’s report, or 

shall be disclosed by letter, as 

appropriate. For each earmarked 

contribution forwarded in the form of 

the contributor’s check or other written 

instrument, the information specified in 

paragraph (c)(l)(iv) (A) through (C) of 

this section shall be disclosed as a 

memo entry on the appropriate 

schedules of receipts and disbursements 

attached to the conduit’s or 

intermediary’s report, or shall be 

disclosed by letter, as appropriate.

(2) Reports by recipient candidates

and authorized committees, (i) The 

recipient candidate or authorized 

committee shall report each conduit or 

intermediary who forwards one or more 

earmarked contributions which in the 

aggregate exceed $200 in any calendar 

year.

(ii) The report by the recipient 

candidate or authorized committee shall 

contain the following information:

(A) The identification of the conduit 

or intermediary, as defined in 11 CFR 

100.12;

(B) The total amount of earmarked 

contributions received from the conduit 

or intermediary and the date of receipt; 

and

(C) The information required under 11 

CFR 104.3(a) (3) and (4) for each 

earmarked contribution which in the 

aggregate exceeds $200 in any calendar 

year.

(iii) The information specified in 

paragraph (c)(2)(h) (A) through (C) of 

this section shall be itemized on 

Schedule A attached to the report for 

the reporting period in which the 

earmarked contribution is received.

(d) Direction or control (1) A 

conduit’s or intermediary’s contribution 

limits ore not affected by the forwarding 

of an earmarked contribution except 

where the conduit or intermediary 

exercises any direction or control over 

the choice of the recipient candidate.

(2) If a conduit or intermediary 

exercises any direction or control over 

the choice o f the recipient candidate, the
34114 Federal Register / Vol. 54, No. 15ft / Thursday, August 17, 1989 / Rules and Regulations

earmarked contribution shall be 

considered a contribution by both the 

original contributor and the conduit or 

intermediary. If the conduit or 

intermediary exercises any direction or 

control over the choice of the recipient 

candidate, die report filed by the 

conduit or intermediary and the report 

filed by the recipient candidate or 

authorized committee shall indicate that 

the earmarked contribution is made by 

both the original contributor and the 

conduit or intermediary, and that the 

entire amount of the contribution is 

attributed to each.

11. Section 110.8 is amended by 

revising paragraph (d)(2) to read as 

follows:

§ 110.8 Presidential candidate expenditure

limitations.

* * * * *

(d) * * *

(2) No funds, goods, or services, 

including loans and loan guarantees, 

may be transferred between or used by 

the separate campaigns, except as 

provided in 1 1 CFR 110.3(c)f5J.

* * * * *

PART 114—CORPORATE AMD LABOR

ORGANIZATION ACTIVITY

12. The authority citation for part 114 

continues to read as follows:

Authority: 2 U.S.C. 431(8)fB), 431(9){BJ, 432, 

437d(a)(8), 438(a)(8) and 441b.

13. Section 114.5 is amended by 

revising paragraph, (g)(1) to read as 

follows:

§ 114.5 Separate segregated funds.

* * * * Hr

(8) * * *

(1) A corporation or a separate 

segregated fund established by a 

corporation is prohibited from soliciting 

contributions to such funds from any 

person other than its stockholders and 

their families and its executive or 

administrative personnel and their 

families. A corporation may solicit the 

executive or administrative personnel of 

its subsidiaries, branches, divisions, and 

affiliates and their families. For 

purposes of this section, the factors set 

forth at 11 CFR 100.5(g)(4) shall be used 

to determine whether an organization is 

an affiliate of a corporation. 

*****

14. Section 114.8 is amended by 

revising paragraph (gX^l introductory 

text to read as follows:

J 114.8 Trade associations.

*****

(gl * V*

(1) A federation of trade associations 

is an organization representing trade 

associations involved in the same or 

allied line of commerce. Such a 

federation may, subject to the following 

limitations, solicit the members of the 

federation’s regional, State or local 

affiliates or members, provided that all 

of the political committees established, 

financed, maintained or controlled by 

the federation and its regional. State, or 

local affiliates or members are 

considered one political committee for 

the purposes of the limitations in

§ § 110.1 and 110.2. The factors set forth 

at 1110.5(g)(4) shall be used to 

determine, whether an entity is a 

regional, State or local affiliate of a> 

federation of trade associations.

* * * * ' *

PART 9034—ENTITLEMENTS

15. The authority citation for part 9034 

continues to read as follows:

Authority: 28 U.S.C. 9034 and 9039(b).

16. Section 9034.4 is amended by 

revising paragraph (d) to read as 

follows:

§ 9034.4 Use of contributions and

matching payments.

*****

(d) Transfers to other campaigns. If a 

candidate has elected to receive 

matching, funds and is simultaneously 

seeking nomination or election to 

another Federal office, no transfer of 

funds between his or her principal 

campaign conunittees or authorized 

committees may be made. See 2 U.S.C. 

441a(a)(5)(C) and 11 CFR 1103(e)(5); and 

110.8(d), A candidate will be considered 

to be simultaneously seeking 

nomination or election to another 

Federal office if he or she is seeking; 

nomination ox election to such Federal 

office under 11 CFR 110.3(c)(5).

Dated: August 1?, 1989.

Danny L McDonald,

Chairman, Fbderaf Election Commission,

[FR Doc. 89-19337Filed 8-15-89; 8:45 am] 

BtLLiMO CODE 6715-Q1-H