Federal 

Election 

Commission 

Annual Report 1988 

Federal Election Commission 

Washington, D.C. 20463 
Commissioners 

Danny L. McDonald, Chairman 

Lee Ann Elliott, Vice Chairman 

Joan D. Aikens, Commissioner 

Thomas J. Josefiak, Commissioner 

John Warren McGarry, Commissioner 

Scott E. Thomas, Commissioner 

Ex Officio Commissioners 

Walter J. Stewart, Secretary of the Senate 

Donnald K. Anderson, Clerk of the House 

Statutory Officers 

John C. Surina, Staff Director 

Lawrence M. Noble, General Counsel 

The Annual Report 1988 was written and published by the 

Commission's Information Services Division. 
FEDERAL ELECTION COMMISSION 

WASHINGTON, D.C. 20463 

OFFICE OF THE CHAIRMAN 

June 1, 1989 

The President of the United States 

The United States Senate 

The United States House of Representatives 

Dear Sirs: 

We are pleased to submit for your information the 14th annual 

report of the Federal Election Commission, as required by the Federal 

Election Campaign Act of 1971, as' amended. The Annual Report 1988 

describes the activities performed by the Commission 1n carrying out its 

duties under the Act. The report also outlines the thirty legislative 

recommendations the Commission adopted and transmitted to the Congress 

for consideration in March 1989. We are hopeful that you will find this 

annual report a useful summary of the Commission's efforts to implement 

the Federal Election Campaign Act. 

wpectfully't. p-/j)~ 

DAN~ McDONALD 

Chairman 
Table of Contents 

Page 

Introduction 1 

Chapter 1 

Presidential Public Financing 3 

Past and Future Funding 3 

Primary Election 4 

Convention 7 

General Election 8 

Chapter 2 

Administration of the Law 9 

Disclosure 9 

Assistance to Committees and the Public 14 

Review of Reports 14 

Enforcement 15 

Judicial Review 16 

Regulations 16 

Legal Issues 17 

Clearinghouse on Election Administration 25 

Chapter 3 

The Commission 27 

Commissioners 27 

Personnel and Labor Relations 27 

Administrative Management 27 

FEC Budget 27 

Chapter 4 

Legislative Recommendations 31 

Appendices 

1. Biographies of Commissioners and Officers 47 

2. Chronology of Events, 1988 51 

3. FEC Organization Chart 55 

4. FEC Offices 57 

5. Statistics on Commission Operations 61 

6. FEC Federal Register Notices, 1988 65 
Introduction 

Nineteen eighty-eight was unique in the Commission's history for a number of reasons. During this 

fourth publicly funded election, 15 candidates qualified for primary matching funds. More candidates 

campaigned over a longer period and spent more 

money than ever before. In addition, the Commission had to deal with an increasing number of complex issues. Nonetheless, drawing on 13 years of 

experience, the Commission administered the federal election campaign laws with ease and efficiency. 

Somewhat paradoxically, while internal FEC operations ran smoothly, voices outside the agency 

called for change. In the press and in Congress, 

attention focused on several campaign finance issues including "soft money,"* PAC contributions, 

expenditure limits, bundling of contributions and 

candidate's personal funds. 

At the administrative level, the Commission also 

explored the need for change-particularly concerning the allocation of expenditures between federal 

and nonfederal accounts and the definition of corporate expenditures within the context of political 

activity conducted by small nonprofit corporations. 

The Commission issued notices of rulemaking, reviewed public comments and conducted hearings 

on these matters. 

The Commission contributed further to the reform 

effort when, in March 1988, it sent Congress 26 

specific recommendations for amending the law. 

These recommendations, which were both substantive and technical in nature, were designed to enhance the agency's ability to administer election 

laws and to reduce the burdens on political committees. Included in these recommendations for 1988 

were proposals to raise the threshold amount of 

matchable contributions required to qualify for Presidential primary matching funds and to abolish the 

state-by-state expenditure limits imposed on publicly 

financed Presidential candidates. Another recommendation would exclude PACs and party committees from having to file reports with state election 

offices. 

This year, in addition to reaffirming the importance of these recommendations, the Commission 

asked Congress to study the need for statutory 

change to ensure the viability of the Presidential 

Election Campaign Fund. The Commission further 

suggested that new legislation might also be 

needed in the following areas: Contributions and 

expenditures to influence federal and nonfederal 

elections, nonprofit corporations, disclaimer notices 

and random audits. Legislative recommendations 

adopted in 1989 appear in Chapter 4. 

* Soft money has generally been construed to mean 

funds that are raised and spent for state and local elections and are not therefore reportable under the federal 

campaign finance law or subject to the law's limits and 

prohibitions on contributions. 
3 

Chapter 1 

Presidential Public 

Financing 

The major elements of the public financing program 

have remained largely the same since the first publicly financed Presidential election in 1976. Basically, public funding encompasses: 

• Matching funds for Presidential primary candidates who have met qualification requirements; 

• Full grants to political parties to sponsor Presidential nominating conventions; and 

• Full grants for the general election campaigns of 

major party nominees and partial grants for qualified minor and new party nominees. 

Past and Future Funding 

Money for the public funding program comes from 

the Presidential Election Campaign Fund. This Fund 

· consists of dollars checked off by taxpayers on 

their federal income tax returns. Since 1976, the 

first year in which Presidential elections were financed with public funds, the Commission has certified a total of $485 million in payments to some 

60 candidates and 8 Democratic and Republican 

nominating convention committees. Included in this 

total were three minor party candidates who qualified for $5.3 million of public funds. The graph to 

the right compares the amount of public funds the 

Commission certified for each of the last four Presidential elections. 

Spending in 1988 increased dramatically over 

1984, raising the possibility that, by 1996, the 

Presidential fund will not have enough money to 

cover the Presidential elections. In 1988, the Commission certified an estimated total of $175.8 million 

for the primaries, conventions and the general election. This left a balance of approximately $40 million. At the current checkoff rate of 21 percent 

(down from a high of 28.7 percent in 1980), taxpayers designate roughly $35 million each year for the 

fund. If, as projected, $180 million are certified in 

1992, the Fund will be $70 million short of the 

$240 million needed for 1996 entitlements.* 

* These estimates were prepared by the Federal Election Commission for the House Administration Subcommittee on Elections. 

Public Funding Certification for the 1976, 

1980,1984 and 1988 Presidential Elections 

(in millions of dollars) 

M1 General Election Nominees 

Party Convention Committees 

Primary Candidates 

200 -------------

1976 1980 1984 1988

Election Year 
4 

Qoncerned about the possible depletion of the 

Presidential Fund, the Commission asked Congress 

in its 1990 budget request for $250,000, to fund an 

education program to inform taxpayers about the 

public funding system. The plan calls for the Commission to work with the Advertising Council, a national organization, in developing a nation-wide inPresidential Election Campaign Fund 

Receipts and Disbursements 

by Election Cycle, 1973 - 1988 

(in millions of dollars) 

e Income Tax Check-off Receipts 

0 Disbursements to Candidates and Committees 

200 -------------

so _____________ 

0 ----------------------------- 1973-76 1977-80 1981-84 1985-88 

Election Cycle 

formational program. The advertising industry and 

media would bear much of the cost for the program 

as a public service.* 

Primary Election 

For the first time in the Commission's history, there 

was no incumbent President running for reelection. 

Consequently, both parties held very competitive 

primaries, which had broad implications for the 

Commission. Candidates began their campaigns 

earlier, and they spent more money than ever before. Preliminary figures indicate that approximately 

$251 million was spent by 1988 Presidential primary candidates. 

Certifications and Audits 

The Commission certified a total of $65.4 million in 

matching fund payments to 15 primary candidates. 

To be eligible to receive matching funds, a candidate must first raise in excess of $5,000 in each of 

20 States (i.e., over $100,000 in contributions). 

Only contributions from individuals apply toward this 

threshold. Although an individual may contribute up 

to $1,000 to a candidate, only a maximum of $250 

counts as a matchable contribution, applicable to 

the $5,000 threshold. To be eligible for matching 

funds, the candidate must also submit a letter in 

which he or she agrees to comply with the provisions of the Primary Matching Payment Account Act 

and Commission Regulations including the limits set 

on campaign spending. The maximum amount of 

matching funds a primary candidate could receive 

in 1988 was $11.525 million dollars, half of the 

$23.050 million national spending limit. 

Throughout 1988, candidates continued to make 

matching fund submissions for Commission review. 

Candidates' use of computer tape for their submissions enabled the Commission to certify requests 

quickly. The table below lists the total amount of 

matching funds certified to each eligible candidate 

as of December 31 , 1988. 

* See also the Commission's 1989 legislative recommendation, p. 31. 
5 

Amount Certified 

Candidate as of 

December 31, 1988 

Bruce Babbitt (D) $1,078,939 

George Bush (R) $8,393,099 

Robert J. Dole (R) $7,618,116 

Michael Dukakis (D) $9,040,028 

Pete du Pont (R) $2,550,954 

Lenora B. Fulani (New Alliance) $ 905,744 

Richard Gephardt (D) $2,853,387 

Albert Gore, Jr. (D) $3,853,402 

Alexander Haig (R) $ 538,539 

Gary Hart (D) $1,122,282 

Jesse Jackson (D) $7,701 '169 

Jack Kemp (R) $5,812,058 

Lyndon H. LaRouche (D) $ 825,577 

M. G. "Pat" Robertson (R) $9,604,959 

Paul Simon (D) $3,603,901 

The Commission is required to audit all public 

funding recipients to ensure that Federal funds are 

spent in compliance with the law. As of March 17, 

1989, the Commission had approved one final audit 

report on a Presidential primary candidate and had 

completed interim audit reports on four others, as 

well as the two major parties' convention committees. 

Legal Issues 

Through advisory opinions, litigation and the process of certifying public matching funds, the Commission addressed several legal issues pertaining 

to the primary election funding. 

Nonmatchable Contributions. On February 11 , 

1988, the Commission made a final determination 

that contribution checks made payable to "The 

Kemp Forum" could not be matched with federal 

funds for the Jack Kemp for President Committee. 

Under FEC regulations, contribution checks to a 

publicly funded primary candidate must be made 

payable to the candidate or to one of his/her authorized committees for the Presidential campaign. 

See 11 CFR 9034.2(c) and Guideline for Presentation in Good Order. The Commission concluded 

that the Kemp Committee had not provided evidence to demonstrate that "The Kemp Forum" was 

a function sponsored and authorized by either the 

candidate or his committee. 

Allocation of Presidential Media Expenses. In AO 

1988-6, the Commission addressed the issue of 

allocating media expenses to a Presidential campaign's fundraising exemption. Under 2 U.S.C. 

§431 (9)(B)(vi), a publicly funded Presidential primary campaign may exclude from its spending limit 

fundraising costs amounting to 20 percent of the 

expenditure limit. Senator Albert Gore's 1988 Presidential primary campaign planned to air a 60-second television advertisement in Colorado seeking 

both political support and contributions for his campaign. Three seconds would be devoted to fundraising. The Commission concluded that the Gore campaign could exclude a reasonable portion of the 

broadcast costs-or up to 50 percent-from its 

spending limit as exempt fundraising expenditures, 

provided the ad was not aired within 28 days of the 

election (i.e., the Colorado caucus). 

Use of Matching Funds for Old Debts. In AO 

1988-5, the Commission said a Presidential candidate could not use current primary matching funds 

to retire debts remaining from an earlier Presidential 

campaign. Hart '88, Gary Hart's principal campaign 

committee for his 1988 Presidential primary campaign, wanted to use public matching funds received for the 1988 election to retire debts remaining from his 1984 Presidential campaign. The Commission concluded that using 1988 public funds to 

pay old debts would be a nonqualified campaign 

expense. On the other hand, Hart '88 could use its 

private contributions to liquidate its 1984 debts, but 

only after the FEC had completed the audit of the 

'88 campaign and after Hart '88 had made any required repayments of public funds and had paid 

any civil penalties. 

In a related matter, two creditors from Senator 

Hart's 1984 campaign attempted to attach his 1988 

funds. In March 1988, the U.S. District Court for the 
6 

Receipts of Presidential Primary 

Campaigns,* 1987-1988 

Key 

• Loans 

• Matching Funds 

• Contributions from Individuals 

Ill

... 

.! 

0 

Q 

-

0 

Ill 

c 

~ 

i 

Ill

... 

.! 

0 

Q 

-0 

Ill 

c 

~ 

i 

Dukakls 

1988 

by 

Month 

Q2 Q3 Q4 Jan Feb Mar Apr May Jun Jul Aug 

Jackson 

14 

12 

10 1987 1988 

by by 

8 Month Month 

6 

4 

2 

0 

Q30 N D J F M AM J J AS 0 N 

Gore 

14 

12 

10 1988 

by 8 Month 

6 

4 

2 

0 

Q2 Q3 Q4 Jan Feb Mar Apr May Jun Jul Aug Sep 

f.! 

.! 

0 

Q 

0 

Ill 

c 

~ 

i 

Ill

... 

.! 

0 

Q 

-

0 

Ill 

c 

~ 

i 

f.! 

.! 

0 

Q 

0 

Ill 

c 

~ 

i 

Bush 

14 

12 

10 

8 

6 

4 

2 

0 

1987 1988 

by Quarter by 

Month 

Q1 Q2 Q3 Q4 Jan Feb Mar Apr May Jun Jul 

Dole 

14 

12 

1987 1988 10 by by

Quarter Month 8 

6 

4 

2 

0 

Q1 Q2 Q3 Q4 Jan Feb Mar Apr May Jun Jul 

Robertson 

1988 

by 

Month 

Q3 Q4 Jan Feb Mar Apr May Jun Jul Aug Sept 

* Campaigns depicted are the six which continued for the longest duration. In all, 15 campaigns received primary 

matching funds. 
7 

District of Columbia in Xerox Corp. v. Americans 

with Hart, Inc. and Harry Kroll v. Americans with 

Hart, Inc.* granted the FEC's motion to vacate writs 

of attachment filed by Senator Hart's creditors. Earlier in the year, the Commission authorized the 

general counsel to send letters advising the creditors that no federal statute authorized diversion of 

matching funds by the government to any other 

party. Further, the letter said, the Commission had 

determined the eligibility for matching funds, but it 

did not possess the funds. Actual payments were 

made by the U.S. Secretary of the Treasury. 

Prohibited and Excessive Contributions. In a compliance case dating back to the 1984 Presidential 

primary elections, the Commission concluded that 

extensions of credit to Presidential campaigns beyond normal business practice were violations of 

the election law. In MUR 2175, the Commission 

determined, first, that a media firm had made a 

prohibited corporate contribution to a Presidential 

campaign when it extended credit to the campaign 

outside the ordinary course of business. Contrary to 

its usual policy, the firm had agreed to pay 

$160,000 in advance to purchase media time for 

the campaign. 

In addition, the Commission found that the Presidential candidate had exceeded his $50,000 personal spending limit by charging campaign expenditures on his personal credit card in excess of this 

amount. Since the candidate had already contributed $48,750 to his campaign, each time the campaign failed to pay the unpaid balance exceeding 

$1,250, the candidate violated the personal expenditure limit. 

Finally, the Commission found that the campaign 

had received excessive contributions from 49 individuals. Although the campaign had refunded these 

contributions or reattributed them to other contributors, it took the campaign 241 days from the date 

of receipt to take these remedial measures. The 

Commission concluded that the late action resulted 

in violations of the contribution limits. 

Convention 

Under the law, each major political party may request public funds to finance the national convention held to nominate its Presidential candidate. The 

party may not spend more than the public funding 

grant. Minor parties become eligible for partial convention funding based on their Presidential candidate's share of the popular vote in the preceding 

general election. 

Certifications 

Since a major party is entitled to receive a public 

funding grant in the year preceding the convention, 

in July 1987, the Commission certified $8,892,000 

to the convention committees of the Democratic 

and Republican parties. This amount was based on 

the 1986 cost-of-living adjustment. In February 

1988, when figures became available for the 1987 

cost-of-living adjustment, the Commission certified 

an additional $328,000 in federal funds to each of 

the committees. The additional certifications brought 

each major party's total grant to $9,220,000, the 

maximum entitlement. 

Legal Issue: Convention Delegates 

When delegate committees are affiliated with a 

Presidential primary campaign, they are subject to 

the campaign's expenditure limits and to other rules 

contained in 11 CFR 110.14. In AO 1988-1, the 

Commission had to decide whether several Dukakis 

delegate committees were affiliated with Michael 

Dukakis' authorized committee. An unpaid coordinator for Mr. Dukakis' primary campaign in Florida 

sought nomination as a Dukakis delegate while also 

directing the campaign activities of several Dukakis 

delegate committees. The Commission concluded 

that the proposed delegate committees would be 

affiliated with the Presidential campaign. As evidence of affiliation, the Commission cited several 

facts: 

*Xerox Corp. v. Americans with Hart, Inc., No. 88-86 

(D.D.C. March 10, 1988) (dismissed); Harry Kroll v. Americans with Hart, Inc., No. 88-211 (D.D.C. March 10 1988} 

(dismissed). ' 
8 

• Dukakis' coordinator planned to organize and 

direct the delegate committees. 

• The campaign and delegate committees planned 

to exchange lists for phone bank and mail 

activities. 

• The Dukakis campaign arranged for contributions 

to these delegate committees. 

• Dukakis' staff provided the delegate committees 

with administrative support, including help with 

filing campaign finance reports. 

In another opinion, AO 1988-10, the Commission 

stated that activities undertaken by individuals from 

Oregon solely to promote their election as precinct 

committee persons would not be regarded as part 

of the convention delegate selection process. The 

Commission took this view because, under Oregon 

state law, precinct committee persons did not determine the number of delegates apportioned to each 

Presidential candidate. 

General Election 

The Presidential nominee of each major party may 

qualify for full public financing of the general election campaign (e.g., $46.1 million in 1988). Major 

party nominees who accept public financing for their 

general election campaigns may not spend more 

than this entitlement plus $50,000 in personal 

funds. Private funds, subject to contribution limits, 

may be raised and spent solely for legal and accounting costs incurred to ensure compliance with 

the Act. 

Certifications 

The Commission approved funding for Michael 

Dukakis and Lloyd Bentsen, the Democratic nominees, on July 26, 1988, and for George Bush and 

Dan Quayle, the Republican nominees, on August 

22, 1988. In their requests for public funds, the 

nominees agreed to abide by the overall spending 

limit, to use only public funds for their campaigns 

and to comply with other legal requirements. 

Legal Issue: Dual Candidacy 

Dual candidacy, where one candidate runs for two 

offices simultaneously, became an issue when the 

Commission received a petition asking the agency 

to deny public funding to the Democratic Presidential nominee, Governor Michael Dukakis and his 

running mate Senator Lloyd Bentsen for their general election campaign. The petitioners asserted 

that, because Senator Bentsen was also running for 

reelection to the Senate, his use of private contributions in his Senate campaign would inevitably result 

in a prohibited use of private contributions in his 

Vice Presidential bid. The petitioners* requested the 

Commission either to stay its decision to certify 

public funds to the Democratic Presidential ticket or 

to delay transmittal of the certification to the U.S. 

Treasury until petitioners could obtain a stay of the 

FEC's certification from the U.S. Court of Appeals 

for the District of Columbia Circuit. 

On July 26, 1988, the Commission voted to deny 

the petition. In its Statement of Reasons, the Commission noted that "nothing in the campaign finance 

statutes or regulations requires Senator Bentsen to 

withdraw from the Senate race or prohibits him 

from using private contributions to further his Senatorial campaign." In fact, the Commission noted, its 

regulations have established rules governing dual 

candidacies, including those involving publicly financed Presidential campaigns. 11 CFR 11 0.8(d). 

The petitioners then filed suit with the appeals 

court. 

On August 3, 1988, the U.S. Court of Appeals 

for the District of Columbia Circuit in Boulter and 

National Republican Senatorial Committee v. FEC** 

affirmed the FEC's decision to certify public funds 

for Democratic nominees Michael Dukakis and 

Lloyd Bentsen. 

* Beau Boulter, Bentsen's Senate opponent, and the 

National Republican Senatorial Committee (NRSC). 

** Boulter and National Republican Senatorial Committee v. FEC, No. 88-1541 (D.C. Cir., August 3, 1988) (per 

curiam). 
9 

Chapter 2 

Administration of the Law 

Disclosure 

Cen~ral to the Commission's operations is facilitating 

public access to the campaign finance data disclosed by candidates and political committees. During 1988 the Commission responded to over 64,000 

requests for information through its Public Records 

Office and Press Office. 

Paper copies of reports are made available to 

the public within 48 hours. Summary data from the 

reports are coded and entered into the FEC's computer system during the first 48 hours. Detailed 

transactions are entered later. In 1986, however, 

budgetary considerations had forced the Commission to cut this computerized disclosure program 

along with other programs. At the time, the Commission had pledged to restore the data at the earliest possible date. 1n 1988 it resumed data entry 

for the 1987-88 election cycle and completely restored the itemized information from the 1986 campaign reports, including contributions of $500 and 

over from individuals. 

In 1988, the Commission decided to extend its 

efforts to capture even more information from the 

next election cycle (1989-90), including all contributions from individuals of $200 and over. 

The Commission also expanded its methods of 

making information available to the public. By the 

end of the year more than 1 00 individuals and organizatio~s th~oughout the country were receiving 

computenzed Indexes and reports at their locations 

by means of the Direct Access Program. Fifteen 

state election offices were also "on-line" and were 

thereby able to provide information on federal campaign finance from state capitals throughout the 

country. Press releases summarizing activity during 

1988 were expanded, providing more timely information than ever before. Also released before the 

election was a complete listing of campaign finance 

statistics for general election candidates through the 

pre-general reporting period. 

In an effort to improve academic research on 

campaign finance questions, the Commission provided additional computer data to the Inter-University Consortium for Political and Social Research at 

~he Uni~ersity of Michigan. The Consortium provides 

mformat1on to researchers at universities throughout 

the world at no cost. The material provided in­

?luded historical information on elections beginning 

1n 1978, as well as more detailed data concerning 

the 1986 election cycle. 

~he following graphs illustrate the scope of information that can be derived from disclosure data. 

Receipts of Party Committees 

1987-88 

- Individuals 

-PACs 

-Other 

Republican 

Democratic 

0 50 100 150 200 250 300 

Millions of Dollars 
10 

Sources of Receipts* Individual Contributions 

All Congressional Candidates Candidate Contributions 

PAC Contributions** January 1987- December 1988 

Candidate Loans 

Other Receipts*** 

SENATE 

Democratic 

Republican 

HOUSE 

Democratic 

Republican 

Incumbent 

$51 million 

$47.2 million 

$101 million 

$71.6 million 

Challenger 

$28.5 million 

$27.2 million 

$29.8 million 

$21.7 million 

Open Seat**** 

$27.6 million 

$16.7 million 

$28.5 million 

$20.4 million 

* Charts do not reflect funds received prior to 1987-88. Figures recorded March 1989. 

** PAC contributions include contributions from other candidate committees and from any other political committees that 

are not part of national or state party organizations. 

*** Other receipts include, for example, party committee contributions, interest and dividends earned on investments, and 

offsets to expenditures. 

**** Herbert Kohl's contributions to his Wisconsin Senatorial campaign account for 98 percent of the contributions made by 

Democratic Senatorial candidates to their open seat races. 
PAC Growth* 

D Corporate 

e Nonconnected 

.6. Trade/Membership/Health 

~ Labor 

• Other** Number 

of PACs 

2000~------------------------------------------------------

Year 

11 

* For the years 197 4 through 1976, numbers are not available for Nonconnected PACs, Trade/Membership/Health 

PACs and PACs in the "Other" category. 

**"Other" category consists of PACs formed by corporations without capital stock and incorporated cooperatives. 
Number and Average Spending 

of House Republican Incumbents 

and Their Challengers, 1978-1988 Number of 

Candidates 

$1,000,000 

$800,000 

$600,000 

$400,000 

$200,000 

- Number of Republican Incumbents 

- Number of Democratic Challengers 

• Republican Incumbent Spending 

• Democratic Challenger Spending 

1978 1980 1982 1984 1986 1988 

Election 

260 

240 

220 

200 

180 

160 

140 

120 

100 

80 

60 

40 

20 

Number and Average Spending 

of House Democratic Incumbents Number of 

and Their Challengers, 1978-1988 Candidates 

260 

240 

220 

$1,000,000 

$800,000 200 

180 

160 $600,000 

140 

120 

$400,000 • Democratic Incumbent Spending 100 

- Number of Democratic Incumbents 

- Number of Republican Challengers 

• Republican Challenger Spending 

$200,000 

80 

60 

40 

20 

1978 1980 1982 1984 1986 1988 

Election 

12 
13 

Number and Average Spending 

of Open Seat Candidates, 1978-1988 Number of 

Candidates 

$1,000,000 55 

50 

45 $800,000. 

40 

35 

$600,000 

30 

25 

$400,000 20 

15 

$200,000 10 

5 

1982 1984 1986 1988 

Election 

B Republican Spending 

• Democratic Spending 

- Number of Republican Candidates 

- Number of Democratic Candidates 

1978 1980 

Party* Receipts Compared for Full 

24 Months of Election Cycles, 1981-1988 

Millions of Dollars 

250 

200 

150 

100 

50 

Total Republican 

National Committees 

Total Democratic 

National Committees 

'81-82 '83-84 '85-86 '87-88 

* Graph reflects total receipts of the national committee, the Senate campaign committee and the Congressional campaign committee. 
14 

Assistance to Committees 

and the Public 

The Commission employs a variety of means to 

help political committees and the general public 

understand and comply with 

the law. 

Videos and Publications 

During 1988, the Commission produced two videotapes, one for Senate and House campaign committees entitled Why Me? and another for state 

party committees entitled Help. Designed to introduce committees to the election laws, the tapes 

presented an overview of major statutory provisions, 

including contribution limits and prohibitions, reporting rules and the treasurer's responsibilities. A tape 

and campaign guide were mailed to each registered 

candidate for the House and Senate and to each 

state party committee. In a further attempt to help 

candidates understand the law, the Commission 

completely revised its Campaign Guide for Congressional Candidates and Their Committees. Other 

publications-numbering more than 25--were updated as needed. 

Telephone Assistance 

Using the toll-free telephone number {800/424-9530) 

or local lines, anyone may obtain information about 

the law directly from Commission staff. Public affairs specialists answer questions and advise callers 

on what the law requires, citing the statute, regulations and advisory opinions. Reports analysts, who 

conduct desk audits of every report filed, are available to assist committee staff with specific reporting 

questions. During 1988, the Commission received 

over 72,000 calls requesting 

information. 

Prior Notices 

The Commission has several ways of reminding 

committee treasurers of their reporting obligations. 

An article in each January issue of the Record lists 

the reporting requirements for the entire year. As a 

reporting date approaches for a specific report, the 

Record includes a subsequent article which details 

the coverage and due dates for that report. Finally, 

three weeks prior to a report's due date, the Commission mails a notice, along with the reporting 

form, to each committee treasurer required to file a 

report. 

Conferences in 1988 

More than 300 people attended three conferences 

cosponsored by the Commission and state election 

offices in 1988. Commissioners and FEC staff conducted workshops in Ohio, Kentucky and Washington. Political committee staff, attorneys, accountants 

and educators participated in workshops on candidate campaigns, party and PAC activity, and contributions and reporting. 

Advisory Opinions 

The Commission offers formal, legal guidance to 

any person who requests an advisory opinion. In 

response to letters requesting Commission advice 

on how the law applied to specific, factual situations, the agency issued 45 opinions in 1988. In 

addition to providing advice to requesters, advisory 

opinions serve as a source of guidance for other 

persons who encounter similar factual situations. 

Many of the advisory opinions issued by the Commission during 1988 are discussed under "Legal Issues" in Chapters 1 and 2. 

Review of Reports 

The Commission reviews every campaign finance 

report to ensure accurate and complete disclosure 

of financial activity and to encourage compliance 

with the law's reporting provisions. If the agency 

discovers a problem in the course of reviewing a 

report, it sends a letter to the committee requesting 

additional information (RFAI). The committee then 

has the opportunity to amend its report voluntarily 

and help preserve the integrity of the public record. 

Cooperation between the committee and the Commission often results in the settlement of a potential 

compliance matter without further action by the 

agency. When a committee fails to respond to 
15 

Commission inquiries, the agency may decide to 

review the committee's operations through a field 

audit or to initiate a compliance action against the 

committee. 

The table above summarizes the review process 

over the past three Presidential election years. 

Enforcement 

The Enforcement Process 

Possible violations of the federal campaign finance 

law are brought to the Commission's attention either internally-through its own monitoring procedures-or externally-through formal complaints 

originating outside the agency. Potential violations 

become Matters Under Review (MURs). 

All phases of the MUR process must remain 

confidential until a case is closed and put on the 

public record. Respondents are given a reasonable 

opportunity to demonstrate that no action should be 

taken against them. The Commission must first 

decide whether there is "reason to believe" a violation of the law has occurred. A "reason to believe" 

finding means that the agency will investigate the 

matter. If the Commission believes there is sufficient evidence to show that there is "probable 

cause to believe" a violation has occurred, the 

agency must try to resolve the matter informally 

through a conciliation agreement with the respondent. In the event that conciliation fails, the agency 

may try to enforce the matter through litigation. The 

table on the next page compares the MUR 

caseload over the past four Presidential election 

years. 

Reports Review Activity 

1980 1984 1988 

Number of Committees Reviewed not available 3,906 5,865 

Number of Reports Reviewed 13,163 30,154 35,471 

Number of Reports Receiving RFAis 2,224 6,292 5,328 
16 

Caseload of MURs 

1976 1980 1984 1988 

Cases Pending at Beginning of Year 34 153 78 171 

Cases Opened During Year 285 255 283 236 

Cases Closed During Year 212 194 189 187 

Cases Pending at End of Year 107 214 172 220 

Expediting Enforcement 

On May 12, 1988, the Commission voted to expedite FEC enforcement matters involving violations of 

the election law's reporting requirements. The plan 

called for a six-month trial period in which respondents who had filed their reports late or who had 

failed to file their reports would be offered an opportunity to enter into a conciliation agreement with 

the FEC at the time the agency found "reason to 

believe" they had violated the law's reporting requirements. 

Under regular enforcement procedures, the respondent first receives notification of the FEC's 

"reason to believe" finding. He or she may subsequently request that the Commission approve a 

conciliation agreement before the agency finds 

"probable cause to believe" a violation of the election law has occurred. The Commission noted that 

this procedure had caused needless delay and expense for all parties concerned. 

Under the trial program, late filer and nonfiler 

respondents were sent a standardized conciliation 

agreement at the time they were notified of the 

FEC's "reason to believe" finding. The proposed 

agreement contained an admission of their reporting 

violations and a civil penalty consistent with the 

severity of their reporting failures. If a respondent 

chose not to sign the agreement, arguments could 

still be presented to demonstrate why no further 

action should be taken or why the civil penalty for 

a reporting violation should be mitigated. Alternatively, the matter would proceed to the next stage 

of the enforcement process. 

In November, the Commission voted to make 

these expedited procedures permanent. 

Judicial Review 

On June 27, 1988, President Reagan signed into 

law an amendment to the judicial review procedures 

of the Federal Election Campaign Act eliminating 

the Supreme Court's mandatory jurisdiction. Prior to 

the amendment, the Supreme Court was required 

to hear, on appeal, any Constitutional questions 

pertaining to the FECA that had been certified by a 

district court to a court of appeals under 2 U.S.C. 

§437h(a). The amendment did not, however, eliminate the Supreme Court's discretionary power to 

review Constitutional issues in cases arising under 

section 437h. The Supreme Court's mandatory jurisdiction under 26 U.S.C. §§ 901 O(c) and 9011 (b)(2) 

was not altered. 

Regulations 

In 1988, the Commission studied the need for regulatory change in a number of areas, including travel 

exemptions, disclaimer notices, trade association 
17 

solicitations, debt settlement, corporate expenditures 

and allocation of expenses. Complex in nature, 

these matters became the focus of Commission 

activity. The agency published several notices in 

the Federal Register seeking public comments, considered new regulatory language, reviewed written 

comments and conducted hearings. The Commission experimented with a new approach to regulatory revision when it identified three areas of the 

regulations appropriate for revision and combined 

these narrower projects into a single Notice of Proposed Rulemaking. More specific information on the 

Commission's regulatory activity is included in the 

discussion of legal issues, below. 

Legal Issues 

During 1988, the Commission addressed several 

legal issues in federal election law through advisory 

opinions, regulation review and litigation. Soft 

money, expenditures by nonprofit corporations, contribution limits, affiliation, solicitations, and debt settlements were the dominant issues. Additionally, 

through litigation, the courts helped define the 

scope of the Commission's jurisdiction. 

Soft Money 

The national media gave considerable attention in 

1988 to the use of "soft money" in federal elections. 

"Soft money" has generally been construed to mean 

funds that are raised and spent in connection with 

state and local elections. These funds are not, 

therefore, generally reportable under federal law 

and need not comply with the federal law's limits 

and prohibitions on contributions. 

At issue was whether party committees were 

using "soft money" illegally in Presidential elections, 

whether it should be disclosed, to what extent it 

could be regulated under current law, and whether 

new legislation* was needed to monitor its use. 

The Commission has been concerned with this 

issue for a number of years. In 1986, after conduct-

* See Commission's 1989 legislative recommendation, 

p. 33. 

ing public hearings, the Commission concluded that 

evidence of improper use of soft money in federal 

elections was insufficient to justify the stringent 

rules suggested in a rulemaking petition submitted 

by Common Cause. The U.S. District Court** upheld the Commission's decision to deny the petition, 

but it did direct the FEC to clarify its allocation 

regulations.*** Subsequently, the court ordered the 

Commission to report to it, every 90 days, on Commission progress toward adopting new allocation 

rules. 

On February 23, 1988, the Commission published a Notice of Inquiry seeking comments on 

possible approaches to take in writing proposed 

rules. The Commission received comments from 

one major party and two public interest organizations. On September 29, 1988, the agency published a Notice of Proposed Rulemaking, which laid 

out the issues, offered several approaches to allocating expenses and set a date for a public hearing. On December 16, representatives from the 

major parties and from two public interest organizations testified during a full day of hearings. 

In his opening statement at the hearing, Chairman Thomas Josefiak noted that the proposed revisions to the regulations were aimed at ensuring 

that no activity that supports federal candidates is 

subsidized by funds raised outside the limits and 

prohibitions of federal election law. He said that the 

regulations and the Act flatly prohibit the use of soft 

money to influence federal elections and, if abuses 

of soft money occurred in the past election cycle, 

"the Commission will vigorously pursue any complaint brought before it." He also observed that the 

** Common Cause v. FEC, 692 F. Supp. 1391 

{D.D.C. 1987); 692 F. Supp, 1397 {D.D.C. 1988). 

*** Current regulations require political committees with 

federal and nonfederal accounts to allocate expenses for 

joint federal/nonfederal activities between their two accounts on a reasonable basis. In a series of advisory 

opinions, the Commission has approved several allocation 

methods that would satisfy the "reasonable basis" requirement. Since 1984, the Commission's Campaign Guide for 

Party Committees has included the examples provided in 

these advisory opinions. 
18 

soft money controversy had largely focused on who 

raised the funds and how the money was raised 

rather than on how the funds were spent. Chairman 

Josefiak went on to observe that the Commission 

follows "the direction of the courts and Congress" in 

defining the Commission's jurisdiction and in interpreting the Act to permit reasonable allocation, 

stressing that the Commission "cannot generally 

prohibit or limit the raising of soft money for nonfederal purposes by virtue of an imputed or tangential effect upon federal elections." He noted that the 

Commission can, however, restrain the use of soft 

money by specifying a fair and reasonable allocation of expenses for the federal share of combined 

federal and nonfederal activity. 

The Commission heard differing views from representatives of party committees and public interest 

groups. Party committee witnesses saw no evidence that soft money was improperly used in the 

past Presidential election, arguing that the problem 

was "perceptual," caused by misleading news articles. They claimed that soft money was properly 

used to fund state and local races. 

In contrast to the views of the party committees, 

the Center for Responsive Politics and Common 

Cause contended that soft money had undermined 

the integrity of the public funding law. Common 

Cause suggested that Presidential candidates who 

receive public funding be required to certify that 

they will not raise any soft money. 

On the specific issue of allocation, Common 

Cause urged the Commission to reject the use of 

any prohibited funds for voter registration and getout-the-vote drives, while the party representatives 

advocated allocation methods that would give parties different options to account for the varying levels of federal and nonfederal activity among party 

committees. 

Expenditures by Nonprofit Corporations 

Ever since the Supreme Court's 1986 decision in 

FEC v. Massachusetts Citizens for Life (MCFL),* 

* Massachusetts Citizens for Life, Inc.: FEC v., 589 

F. Supp. 646, (D.Mass., 1984), aff'd, 769 F.2d 13 (1st 

Cir. 1985) aff'd, 479 U.S. 238 (1986). 

the Commission has been faced with questions 

concerning political expenditures by corporations. In 

MCFL, the Court said that the Act's prohibition on 

corporate expenditures was unconstitutional as applied to independent expenditures made by a narrowly defined type of nonprofit corporation formed 

for ideological, rather than business, purposes. The 

Commission and the courts explored the application 

of the MCFL holding in three separate matters. In 

two of those instances, nonprofit organizations 

sought to qualify for the MCFL exemption unsuccessfully. 

In AO 1988-22 the San Joaquin Valley Republican Associates, a nonprofit, nonmember corporation 

organized to enhance the visibility of the Republican Party, wanted to publish and distribute a periodical political newsletter, sponsor luncheons featuring candidates and also sponsor candidate debates. 

The Commission ruled that these activities would 

be considered expenditures to influence federal 

elections. They were not, in the Commission's view, 

exempt under the Supreme Court's MCFL ruling 

because, first, some of the spending programs proposed by the organization were in-kind contributions, not independent expenditures. (The MCFL 

ruling only applied to independent expenditures). 

Secondly, the Commission noted, the MCFL exemption applied to political organizations that only 

occasionally engaged in independent spending on 

behalf of candidates, and not to organizations such 

as the Republican Associates whose major purpose 

was partisan campaign spending. 

In United States Defense Committee v. FEC,** a 

case which dates back to March 1984, the United 

States Defense Committee (USDC), an incorporated 

membership organization, filed suit against the FEC 

seeking reversal of Advisory Opinions 1983-43, 

1984-14 and 1987-7. In all three opinions the Commission concluded that certain USDC voter guides 

and other materials proposed for publication by 

** United States Defense Committee, Inc. v. FEC, No. 

84-CV-450 (N.D.N.Y. April 27, 1988) (unpublished order), 

vacated and remanded, 861 F.2d 765 (2d Cir. 1988). 
19 

USDC were prohibited by 2 U.S.C. §441 b because 

the language used in the materials suggested an 

election-influencing purpose. 

On April 12, 1988, the U.S. District Court for the 

Northern District of New York held that the Supreme Court's decision in FEC v. Massachusetts 

Citizens for Life did not apply here because, in 

order to be eligible for the MCFL exception, a nonprofit corporation had to have a policy of not accepting contributions from business corporations or 

labor organizations. Since USDC had accepted 

money from its corporate members, the court found 

that the organization was not eligible for the MCFL 

exception. USDC appealed the decision to the U.S. 

Court of Appeals for the Second Circuit. The Second Circuit vacated the district court's decision, 

holding that advisory opinions issued pursuant to 2 

U.S.C. §437f were not ripe for review. The Court of 

Appeals expressed no opinion about the district 

court's holding that USDC was not eligible for the 

MCFL exception.* 

MCFL issues were not restricted to advisory 

opinions and compliance. They became the subject 

of regulatory action as well. Partly in response to a 

petition for rulemaking, submitted by the National 

Right to Work Committee (NRWC), and also as an 

attempt to explore other issues raised by MCFL, 

the Commission published an Advance Notice of 

Proposed Rulemaking in January 1988. The notice 

sought comments on the following: 

• How should the Commission determine when a 

nonprofit organization is an MCFL-type entity? 

• What are the appropriate reporting and disclosure requirements for an MCFL-type organization? 

• When does an MCFL-type organization become 

a political committee? 

• Should the Commission adopt an "express advocacy" standard for determining when a prohibited 

corporate or union expenditure is made under 

section 441 b of the election law? 

In response to this notice, the Commission received over 17,000 comments on how to revise its 

rules. 

The Commission explored the subject further in a 

public hearing held on November 16. One witness 

argued that nonprofit corporations should quality as 

MCFL-type organizations even if they receive marginal corporate or labor support. To determine when 

an MCFL-type organization became a political committee, the witness recommended that the agency 

apply a test - either a monetary threshold or a 

primary purpose test (i.e., was the organization 

primarily involved in political activity?). 

Another witness contended that the "express 

advocacy" standard should be used to define when 

a prohibited corporate or labor expenditure was 

made. He suggested that the FEC look to the definition of express advocacy as presented in the 

Ninth Circuit Court of Appeals decision in FEC v. 

Furgatch.** 

* In Michigan Chamber of Commerce v. Austin a 

separate action not directly involving the FEC, the U.S. 

Court of Appeals for the Sixth Circuit ruled that a Michigan law prohibiting corporations from making independent 

expenditures was unconstitutional as applied to the Michigan State Chamber of Commerce. The court held that 

the: Michigan _Cha~ber. qualified as an MCFL-type corporation. The S1xth C1rcwt demed rehearing en bane with 

three judges dissenting, but on January 17, 1989, it 

granted a stay of mandate pending a petition for certiorari. Michiga_n Chamber of Commerce v. Austin, No. 86-

1867 (6th C1r., Sept. 15, 1988), reh'g denied. 

** Furgatch: FEC v., No. 83-0596-GT-(M) (S.D. Cal. 

1984) (unpublished opinion), rev'd 807 F.2d 857 (9th 

Cir.), cert. denied, 108 S.CT. 151 '(u.s. Oct. 5, 1987), on 

remand, (S.D. Cal. April 26,1988) (unpublished order) 

appeal filed (9th Cir. May 9, 1988). ' 
20 

Contribution Limits 

Application of Limits After Election. During its 13-

year history, the Commission has repeatedly been 

asked to clarify what is and what is not a contribution. The issue presented itself again in FEC v. Ted 

Haley Congressional Committee.* In reversing the 

district court decision, the U.S. Court of Appeals 

ruled that money given or loaned after an election 

to retire campaign debts constituted contributions. 

As such, they were subject to the Federal Election 

Campaign Act's limitations and prohibitions. This 

interpretation has long been the Commission's view, 

as well. 

The issue came up again in September 1988 

when the Commission denied a petition for rulemaking submitted by the Haley Committee. The 

Haley Committee had suggested that a new subsection be added to the regulations to state that 

post-election donations would not be subject to the 

contribution limits provided a contributor could demonstrate that the donation had not been made for 

the purpose of influencing that election. 

In denying the petition, the Commission noted 

the appeals court's affirmation of the agency's consistent interpretation of its policy on post-election 

contributions in FEC advisory opinions and regulations. 

Travel Exemption. Current regulations allow individuals-both paid staff and volunteers-to incur a 

limited amount of unreimbursed expenses for travel 

on behalf of a candidate or party without these expenses being considered contributions or expenditures. Current rules also allow volunteers to make 

unlimited personal expenditures to cover their subsistence expenses when they travel. A proposed 

new rule published in the Federal Register on September 8, 1988, would extend this subsistence exemption to paid staff as well. On further consideration, the Commission directed the Office of General 

Counsel to prepare a second Notice of Proposed 

Rulemaking to seek comments on several alternative approaches to this issue. 

Affiliation 

In litigation and in a number of AOs, the definition 

of "affiliation" between political committees was 

clarified. The issue is important because affiliated 

committees are subject to a single contribution limit 

on both the contributions they receive and those 

that they give to candidates and other political committees. 

In Antosh v. FEC,** the U. S. District Court for 

the District of Columbia ruled that three PACs were 

not affiliated. Mr. Antosh had alleged that the three 

labor PACs, separate segregated funds of international unions belonging to the AFL-CIO, had failed 

to report their affiliation and had exceeded their 

combined $5,000 per election contribution ceiling for 

each candidate. The court supported the FEC's 

view that legislative history demonstrated that Congress had not intended to impose a single contribution limit on the AFL-CIO's PAC and the PACs of 

international unions affiliated with the AFL-CIO. 

In another action, AO 1988-4, the Commission 

addressed the issue of affiliation of PACs resulting 

from a corporate merger. The Commission concluded that, even though the Borg-Warner Corporation did not become a direct subsidiary of Merrill 

Lynch Corporation as a result of their merger, the 

two corporations were affiliated by virtue of the control Merrill Lynch had over Borg-Warner. Therefore, 

the separate segregated funds of the two corporations were affiliated. 

AO 1988-37 was concerned with affiliation between two corporate PACs as a result of a leveraged buy-out transaction. The Commission determined that the separate segregated funds of the 

Montgomery Ward Corporation and the General 

Electric Company (GE) were affiliated by virtue of 

the relationship that developed between the two 

sponsoring organizations as a result of a leveraged 

*Ted Haley Congressional Committee: FEC v., 654 

F. Supp. 1120 (W.O. Wash. 1987, rev'd, 852 F.2d 1111 

(9th Cir. 1988). 

**Antosh v. FEC, 2 Fed. Elec. Camp. Fin. Guide 

(CCH) 9260 (D.D.C. Jan. 5, 1988); unpublished opinion 

(D.O.C. Mar. 24, 1988). 
21 

buy-out. Through a complex network of subsidiaries 

and a holding company, GE controlled Montgomery 

Ward (for purposes of the federal election law) by 

having a potential veto over important Montgomery 

Ward management decisions. 

In AO 1988-14, the Commission ruled that two 

affiliated corporations could jointly sponsor a separate segregated fund and could solicit contributions 

from the restricted class of both corporations. The 

Commission noted that the official name of the joint 

PAC had to include the full name of both corporations. 

The Commission determined in AO 1987-34 that 

the PACs of two corporations, who jointly owned a 

partnership, were not affiliated for contribution purposes. The fact that the two corporations had 

formed a joint venture partnership did not, by itself, 

make the PACs of the two corporations affiliated. 

However, the PAC of the joint venture's subsidiary 

was affiliated with the PACs of the two corporations. 

In a related issue, the Commission examined the 

relationship between a parent organization and the 

PACs of its state members. In AO 1988-43, the 

Commission concluded that a national organization, 

which did not have a PAC, was not responsible for 

the activities of the PACs of its state members. The 

American Society of Anesthesiologists, a national 

organization, had no responsibilities regarding the 

PACs of its state members. The treasurer of each 

PAC was responsible for ensuring compliance with 

the election law. 

Solicitations 

Definition of Member. The definition of "member," 

as it related to PAC solicitations, was the subject of 

several advisory opinions. In AO 1987-31, the Commission ruled that the Chicago Board Options Exchange could solicit those members who paid dues, 

had rights in governing the organization and had 

other significant membership privileges. Members 

who did not meet these requirements could not be 

solicited.* 

In another advisory opinion, 1988-38, the Commission concluded that the Chicago Board of Trade 

could send partisan communications to and solicit 

contributions from members who paid dues and had 

certain rights in governing the organization, such as 

electing board members. The Commission concluded that there was only one solicitable member 

for each leased membership and that the lessorsnot the lessees-retained the membership. Those 

who did not qualify as members included individuals 

who represented firms or who leased their memberships from full members. 

In AO 1988-39, the Commission again clarified 

the definition of member when it concluded that 

individuals with leased memberships on the Chicago Mercantile Exchange were not members for 

solicitation purposes. Under the Exchange's rules, 

the lessor was the qualified member because he or 

she retained the right to vote, was ultimately responsible for the payment of dues and retained 

proprietary rights over his or her membership. 

Trade Association Solicitations. In AO 1988-3, the 

Commission addressed the issue of solicitations by 

trade associations with corporate and noncorporate 

members. The Commission ruled that the American 

Pilots Association could solicit contributions from individual pilots who owned. stock or equity in one of 

its incorporated associations and from an unincorporated member organization itself. It could not, 

however, solicit individual members of these unincorporated groups because such individuals were 

not APA members. 

Trade association solicitations were also the subject of regulatory review. A proposed amendment 

would make clear that, if a subsidiary corporation 

was a member of a trade association but its parent 

corporation was not, the trade association could not 

solicit the parent corporation's restricted class. Current rules already make clear that, if the parent is a 

member but the subsidiary is not, the trade association may not solicit the restricted class of the 

subsidiary corporation. The Commission sought 

comment on this in a Notice of Proposed Rulemaking published in the Federal Register in September 

1988. 

* The Commission reconsidered this opinion on February 

9, 1989. 
22 

Definition of Executive and Administrative 

Personnel. In an opinion addressing solicitable personnel, AO 1988-11 , the Commission ruled that the 

National Association of Trade and Technical 

Schools (NATTS), representing incorporated private 

schools, could solicit teachers employed by NATTS 

member schools. The teachers whom NA TTS or its 

fund could solicit were those who met the statutory 

definition of "executive or administrative personnel." 

Teachers who were represented by a labor organization were not solicitable. On the other hand, in 

AO 1988-26, the Commission said that UNC Incorporated and its separate segregated fund could not 

solicit contributions from training instructors who 

were permanent employees of a UNC subsidiary. 

The Commission based its opinion on the fact that 

the instructors were paid on an hourly basis and 

therefore did not qualify as "executive or administrative personnel" under the election law and FEC 

regulations. 

Disclaimer Notice Requirements. Under current 

regulations, if a person solicits the general public 

for contributions to a political committee that is not 

authorized by a candidate, the solicitation must 

clearly state the person's full name. Under a proposed amendment to the regulations, which would 

bring the regulations into closer uniformity with the 

Act, the solicitation would have to state additionally 

whether it was authorized by a candidate or any of 

his or her authorized committees or agents-even if 

the solicitation did not expressly advocate the candidate's election or defeat. A Notice of Proposed 

Rulemaking (NPRM) on this matter was published 

in September 1988. After considering this issue further, the Commission directed OGC to prepare a 

second NPRM seeking comment on two alternative 

approaches to this issue.* 

*See also the Commission's 1989 legislative recommendation, p. 37. 

Debt Settlement 

On December 6, 1988, the Commission published a 

Notice of Proposed Rulemaking in the Federal Register, which proposed deleting 11 CFR 114.1 0 and 

replacing it with a new Part 116. The proposed 

rules would cover debts owed by political committees to corporate creditors, as in the current rules, 

and to others such as unincorporated vendors and 

individuals. The draft rules sought comment on 

whether the debt settlement procedures should be 

applied only to political committees preparing to 

terminate. A second issue for comment was 

whether an indebted terminating committee should 

submit, for Commission review, a comprehensive 

debt settlement plan that covered all outstanding 

debts and provided for the disposition of the committee's remaining funds and assets. In addition, 

the Notice of Proposed Rulemaking offered proposed language concerning ongoing committees, 

disputed debts, advances by campaign staff and 

others, salary owed to committee employees, transfers involving indebted committees and the definition of excess campaign funds. Hearings on these 

regulations were set for February 1989. 

Enforcement Issues 

Statement of Reasons. In October 1986, the Commission agreed that it would place a statement of 

reasons on the public record whenever a majority 

of the Commissioners, in dismissing a complaintgenerated matter, rejected the General Counsel's 

recommendation. Since that time, in situations 

where the Commission did not take action because 

it lacked a majority (e.g., a 3-3 split), Commissioners sometimes issued statements of reasons even 

though no formal policy required them to do so. In 

Common Cause v. FEC, ** however, the Appeals 

Court for the D.C. Circuit ruled that, in all future 

complaint generated cases involving a 3-3 split, the 

Commissioners would have to issue statements of 

reasons. During 1988, the resolution of two suits 

**Common Cause v. FEC, 665 F. Supp. 619 (D.D.C. 

1986) rev'd, 842 F.2d 436 (D.C. Cir. 1988). 
23 

depended in part upon Commission statements of 

reasons. 

The first case arose in 1984 when Common 

Cause filed an administrative complaint with the 

FEC against the Reagan-Bush '84 General Election 

Committee, alleging that the Committee had failed 

to report some travel expenses. In December 1986, 

the FEC's General Counsel recommended that the 

Commission find "reason to believe" that the 

Reagan campaign had violated the election laws. 

The Commission, however, voted four to two to find 

"no reason to believe" that the Reagan campaign 

had violated the law. In Common Cause v. FEC,* 

Common Cause challenged the FEC's dismissal 

decision. 

The district court ordered the Commissioners 

who voted against proceeding to issue statements 

of reason. They did so in October 1986. Not satisfied with the statements, the court ordered the 

agency to provide a fuller explanation of why the 

Commissioners had dismissed the complaint. In 

July 1988, the Commissioners submitted a second 

set of statements. The following September, the 

court accepted a joint stipulation of dismissal in 

which Common Cause and the FEC agreed to the 

dismissal of Common Cause's complaint, with prejudice. The stipulation stated that Common Cause did 

not abandon its position that the FEC's action on 

the administrative complaint was contrary to law, 

and the FEC did not abandon its position that its 

dismissal of the complaint was reasonable. 

In the second case, statements of reasons were 

issued after the Commission split 3-3 on the General Counsel's recommendation. In Stark v. FEC,** 

Congressman Stark filed suit in U.S. District Court 

for the District of Columbia in June 1987, claiming 

that the FEC's dismissal of his administrative complaint was contrary to law. Congressman Stark had 

filed a complaint with the Commission contending 

that the American Medical Association Political Action Committee (AMPAC) had made excessive contributions to his opponent. The Commissioners split 

3-3 on whether to adopt the General Counsel's recommendation that the Commission find "reason to 

believe" that AMPAC had violated the law. Since 

the Commission could act only on "the affirmative 

votes of four members," the agency then voted 

unanimously to close the enforcement file. The 

three Commissioners who voted not to find "reason 

to believe" a violation had occurred issued a statement of reasons. Citing the DCCC ruling,*** the district court found that the FEC had not acted contrary to law. The court noted that the Commissioners had issued statements explaining their reasons 

for voting against the General Counsel's recommendations. Applying a deferential standard of review, 

the court found that the statement of reasons was 

"reasonable." 

Jurisdiction of FEC. In Ralph J. Galliano v. U.S. 

Postal Service,**** the Court of Appeals ruled that 

the Federal Election Campaign Act superseded the 

enforcement authority of the Postal Service under 

39 U.S.C. §3005 with regard to name identifications 

and disclaimers of organizations that solicit political 

contributions. This case arose when the Congressional Majority Committee (CMC), a multicandidate 

political committee, mailed out letters soliciting contributions to CMC's independent expenditure project, 

"Americans for Phil Gramm in 84"(APG). Mr. 

Gramm, a candidate for the U.S. Senate, initially 

filed a complaint with the FEC alleging that CMC 

had unlawfully used his name in the title of its 

fundraising project and had failed to state that Mr. 

Gramm had not authorized CMC to solicit contributions. 

The Commission determined that CMC had failed 

to include a disclaimer notice in its first solicitation 

* Common Cause v. FEC, 630 F. Supp. 508 (D.D.C. 

1986) 676 F. Supp. 286 (D.D.C. 1986); unpublished opinion, (D.D.C. June 15, 1988). 

** Stark v. FEC, 683 F. Supp. 836 (D.D.C. 1988). 

*** Democratic Congressional Campaign Committee v. 

FEC, 645 F. Supp. 169 (D.D.C. 1986), aff'd in part and 

remanded, 831 F.2d 1131 (D.C. Cir. 1987). 

**** Galliano v. U.S. Postal Service, 836 F.2d 1362 

(D.C. Cir. 1988). 
24 

mailings, but the Commissioners split on the issue 

of CMC's using Mr. Gramm's name in the title of its 

independent expenditure project. 

Following the FEC action Mr. Gramm filed a 

complaint with the U.S. Postal Service alleging that 

CMC's solicitations contained false representations. 

The Postal Service agreed. Mr. Galliano, representing CMC, contested the Postal Service decision in 

the U.S. District Court for the District of Columbia. 

The district court affirmed the Postal Service's decision, which Mr. Galliano appealed. 

At the request of the appeals court, the FEC 

filed a friend of the court brief. The FEC argued 

that, since Congress had granted the agency exclusive jurisdiction over provisions of the law, "matters 

covered by the Act must be brought before the 

Commission in the first instance even if another 

statute might otherwise arguably be applicable." 

The FEC went on to note that "the courts have 

long recognized that tension between a statute of 

general application and a statute which specifically 

addresses a particular subject must be resolved in 

favor of the specific statute." 

Reversing the district court ruling, the appeals 

court held "that the FEC is the exclusive administrative arbiter of questions concerning the name identifications and disclaimers of organizations soliciting 

political contributions." 

Judicial Review of Advisory Opinions. In United 

States Defense Committee v. FEC, the issue was 

court review of FEC advisory opinions. In filing this 

suit, the United States Defense Committee (USDC) 

had asked the U.S. District Court for the Northern 

District of New York to reverse the Commission's 

decision in three advisory opinions. While the district court acknowledged that the election law did 

not specifically provide for judicial review of FEC 

advisory opinions, the court found that its authority 

to review the complaint had not been "explicitly 

restricted by statute or by Congress .... "* 

* See page 18 for a discussion of the district court's 

ruling on the merits. 

The U.S. Court of Appeals for the Second Circuit 

reversed this ruling by the district court. In deciding 

that USDC's case was not ripe for judicial review, 

the appeals court said that nothing in the legislative 

history indicated that Congress thought that advisory opinions were reviewable. Further, the court 

explained, an advisory opinion is not "final or binding." Any person who acts contrary to an advisory 

opinion is entitled to the full benefit of the enforcement procedures in 2 U.S.C. §437g. Because the 

suit pertained to the application of the Supreme 

Court's ruling in the MCFL case and because the 

Commission was currently considering possible new 

rules in this area, the court concluded that judicial 

review of the AOs was especially inappropriate in 

this case. 

Complaint Filed Twice. In National Rifle Association v. FEC,** the district and appeals courts ruled 

that a person who failed to appeal an FEC determination on an administrative complaint within the 

requisite 60 days (under 2 U.S.C. §437g(a)(8)) 

could not obtain a second opportunity for judicial 

review by filing another administrative complaint 

repeating the substance of the first. This case 

arose when the National Rifle Association (NRA) 

filed suit challenging the FEC's dismissal of NRA's 

third administrative complaint against Handgun Control, Inc. (HGI). All three of NRA's administrative 

complaints had challenged HCI's status as a membership organization under the election law. With 

respect to NRA's third administrative complaint, the 

FEC had dismissed it, finding that the allegations 

were virtually identical to those raised in NRA's 

second complaint. 

In dismissing NRA's suit, the courts found that 

NRA's challenge to the FEC's dismissal of its third 

complaint constituted an untimely appeal of an earlier FEC dismissal of another administrative 

complaint. 

* * National Rifle Association v. FEC, No. 86-2285 

(D.D.C. Oct. 19, 1987) (unpublished opinion), aff'd, 854 

F.2d 1330 (D.C. Cir. 1988). 
25 

Clearinghouse on Election 

Administration 

The Commission's National Clearinghouse on Election Administration serves as a central exchange for 

research and information on the administration of 

federal elections. The following paragraphs describe 

the projects and activities undertaken by the Clearinghouse during 1988. 

Election Directory 88 

An update of the Election Directory 85, this volume 

provides names, titles, addresses and telephone 

numbers of state and federal officials involved in 

running elections. It also contains a listing of state 

and local offices concerned with voter registration. 

Voting System Standard Project 

The Clearinghouse continued to develop voluntary 

performance and design standards for electronic 

computerized voting systems in terms of their reliability, security and accuracy. The study examines 

three types: punchcard, marksense and direct recording electronic systems. The Commission plans 

to formally issue the standards and associated 

documents in the summer of 1989. Related management guidelines will be released later in the 

year. 

Voting System Standards for Punchcard and 

Marksense Systems (Hardware and Software). The 

development of punchcard and marksense equipment is part of the research stemming from a 1982 

study mandated by Congress. (See, below, Voting 

System Standards for Direct Recording Electronic 

Systems.) This publication will present hardware 

and software specifications, a description of the 

quality assurance and documentation required, software and system security, qualification testing and 

measurement procedures, and acceptance testing. 

Voting System Standards for Direct Recording Electronic Systems (Hardware and Software). The development of voluntary voting system standards for 

direct recording electronic systems is the final stage 

of the Voting System Standards Project. This segment of the project emphasizes the development of 

hardware and software standards and appropriate 

testing procedures for this generic type of system. 

Implementation Plan, System Escrow Plan, Accreditation Plan and Election Management Guidelines. 

This project complements the hardware and software standards. The implementation plan will explain how the voluntary standards can be best implemented, what systems would be grandfathered 

and the use of escrow agreements to safeguard 

proprietary software and documentation. The system escrow plan will describe procedures for placing proprietary voting system software and documentation in escrow. The accreditation plan will 

outline a method for identifying qualified escrow 

agents and voting system test authorities. In separate publications, guidelines relevant to the Voting 

System Standards will be presented. The management guidelines will summarize accepted practice 

on pre-election testing, procurement and contracting, operations, and equipment maintenance and 

storage as they relate to punchcard, marksense 

and direct recording electronic voting systems. 

FEC Journal of Election Administration 

The Autumn 1988 Journal offered articles on the 

new blank ballot, the nomination process, the Electoral College, voter participation and voter accessibility. In addition to reporting on current developments in the field of election administration, the 

periodical also kept readers abreast of Clearinghouse activities and provided convenient order 

forms for Clearinghouse studies. The Journal is free 

upon request. 

Campaign Finance Law 88 

Campaign Finance Law 88 provides quick reference 

charts and detailed state-by-state descriptions of 

state campaign finance report filing requirements, 

contribution and solicitation limitations, special tax 

or public financing provisions, regulatory agencies 

and many other important features of state campaign finance laws. 
26 

Projects Under Way 

Federal Election 88 will summarize, by State, office 

and candidate, the results of the elections for U.S. 

President, U.S. Senate and U.S. House of Representatives. Publication is expected in Spring 1989. 

Ballot Access will be a four-volume publication that 

summarizes state access requirements for Presidential and Congressional contests in primary and 

general elections. It will also document filing procedures for major, minor and independent candidates. 

Publication is scheduled for Fall 1989. 

Election Case Law will trace trends and developments in litigation concerning absentee balloting 

and voter registration. The volume will summarize 

decisions rendered by both the U.S. Supreme Court 

and State supreme courts. Publication is expected 

in late 1989. 

Election Contests and Recounts will update a 1977 

study that examined state procedures for conducting recounts and resolving contested elections. 

Interaction of States with the Congress in disputed 

contests will also be covered. Publication is expected in January 1990. 
27 

Chapter 3 

The Commission 

Commissioners 

Commission officers during 1988 were Chairman 

Thomas J. Josefiak and Vice Chairman Danny Lee 

McDonald. On December 15, 1988, Commissioner 

McDonald was elected 1989 Chairman and Commissioner Lee Ann Elliott, 1989 Vice Chairman. 

Biographies of all the Commissioners appear in 

Appendix 1. 

Personnel and Labor Relations 

Personnel transactions during 1988 increased over 

50 percent from the previous year. Most of this increase was due to the staff additions for the 1988 

Presidential elections. 

A new wellness program, instituted in 1988, focused on CPR training, health screenings and 

health-related presentations. Also, the Commission 

placed increased emphasis on counseling services 

provided through the Employee Assistance Program. This program was designed to assist employees in resolving problems by providing professional 

counselors, at no charge, on a confidential basis. 

Both supervisors and staff were provided training 

and orientation on the program. 

By year's end, preparation was under way for 

the renegotiation of the labor agreement between 

the Commission and the National Treasury Employees Union. The present agreement expires in early 

1989. 

Administrative Management 

The Commission's administrative management activities during 1988 reached a four-year high. Over 

1800 contracting and procurement transactions provided Commissioners and staff with $2,078,000 

worth of support services, supplies and materials. 

Other supportive functions included the dispatch 

and accountability of approximately 322,600 pieces 

of outgoing maU, the preparation of 22 publications 

for printing and the production of over 11,000,000 

photocopies. 

The Commission is responsible for ensuring a 

safe working environment in its office and warehouse space. Continuing an environmental testing 

program begun in 1987, the Commission tested for 

the presence of asbestos fibers and evaluated the 

quality of the air and drinking water in the building. 

No asbestos fibers were found, and the water and 

air quality were within acceptable standards. Also, 

tests for the presence of radon gas were negative. 

The Commission also implemented a Building Management Reporting System to alert GSA and the 

lessor on any problems with the office space. 

FEC Budget 

Fiscal. Year 1988 

The Commission's FY 1988 appropriation was 

$14.174 million. Although this amount was $1.4 

million more than the FY 1987 budget, nearly 76 

percent of it was to maintain the same level of activity. The remaining funds provided for 13 additional staff over the normal base of 245 FTE staff, 

or a total of 258 FTE. Both Congress and OMB 

recognized the need for additional staff to handle 

the unprecedented workload of an open Presidential 

primary for both parties. 

Additional staff were assigned to process the 

matching fund requests of 1988 Presidential primary 

candidates, to process a much larger volume of 

campaign finance data for the Presidential election 

and to complete the restoration of data input that 

had been cut back in the 1986 election cycle due 

to the Gramm/Rudman/Hollings sequester.* 

Included in the restoration was the entry of individual contributions of $500 and over. Additionally 

the Commission resumed sharing the agency's 

automated data base with the state officials responsible for federal campaign finance disclosure. 

Fiscal Year 1989 

Commission funding for FY 1989 was $15.433 million, an 8.5 percent increase over FY 1988. Once 

* See discussion of Disclosure, p. 9. 
28 

again Congress and OMB agreed on the need for 

13 additional staff for the completion of the 1988 

Presidential election workload. They also decided to 

fund two major initiatives: the installation of an 

agency-wide computer system and the addition of 

an enforcement team in the General Counsel's Office (OGC). 

To improve Commission productivity, the FY 

1989 budget provided a one million dollar allocation 

for an enhanced agency computer system. The 

funds were specifically earmarked for hardware, 

software, wiring and specialized training necessary 

to install the new system. It will replace the Commission's obsolete, stand-alone word processing 

equipment with new technology that is compatible 

with the Commission's various data bases including 

the disclosure data base. The new system will enable linked teams of staff to use the main ADP 

system for research and it will facilitate the communication of draft documents between professional 

and clerical staff. In addition, the new system will 

enable the FEC to explore new technologies such 

as digitized imaging, text search and test ,tetrieval. 

The Commission plans to have the full system operational by the end of FY 1989. 

Addition of a fourth enforcement team in OGC 

will enable the Commission to keep up with increasing caseloads, especially internally generated 

enforcement actions, and to reduce the existing 

case backlog. Even though the Commission uses 

thresholds and enforcement criteria that reduce the 

de minimus violations processed by the Commission, the enforcement workload has increased. 

Despite the increased appropriation to cover a 

staff increment of 13 full time employees (FTE), the 

additional six FTE in OGC and the improved ADP 

system, the 1989 budget for the Commission is 

tight. This is due to the forced absorption of numerous increased pay costs for the past several fiscal 

years. For example, the Commission's appropriation 

for FY 1989 covered less than half of the 4.1 percent pay raise and it did not provide for the 31.5 

percent increase in health benefits. The FEC also 

was forced to absorb the cost of half of the six 

additional staff in OGC. Although Congress has 

authorized the Commission 264 FTE, the agency 

can only afford 258. The tight budget has also 

forced the Commission to cut back on Clearinghouse contracts and equipment replacement. 

Nevertheless, the Commission was able to begin 

coding and entering into the data base contributions 

of $200 and above. Previously, the threshold had 

been $500. Additional costs to capture all such 

data for the entire 1990 election cycle were minimal. 

The table below compares functional allocations 

of budget resources for fiscal years 1988 and 1989. 

The two graphs that follow compare allocations of 

budget and staff by division for the fiscal years. 

FEC Budget Functional Allocation 

1988 1989 

Personnel 9,822,217 10,530,500 

Travel 199,335 243,000 

Motor Pool 11,908 12,900 

Commercial Space 17,411 17,700 

Equipment Rental 254,509 248,000 

Printing 267,Q47 217,500 

Support Contracts 735,879 650,000 

Admin. Expenses 112,944 156,300 

Supplies & Materials 187,226 170,000 

Publications 117,381 138,600 

Telephonerr elegraph 294,172 283,000 

Postage 148,694 90,500 

GSA Space 1,617,034 1,641,000 

Equipment Purchases 210,478 857,000 

Training 31,828 90,000 

GSA Services, Other 116,554 87,000 

Total 14,144,617 15,433,000 
* Administration budget includes rent, supplies, services, etc. for the entire Commission. 

Divisional Allocation of Staff* 

FY 1988 

FY 1989 

Commissioners 

Staff Director 

Office of General Counsel 

Administration 

Audit 

Clearinghouse 

Data Systems Development 

Information 

Public Disclosure 

Reports Analysis 

0 5 10 15 20 25 

Percent of Staff 

* The Commission averaged 252.4 full-time equivalent positions (FTE) in FY 1988 and it projected 258 FTE for FY 1989. 

30 

29 

Divisional Allocation of Budget 

Commissioners 

Staff Director 

Office of General Counsel 

Administration* 

Audit 

Clearinghouse 

Data Systems Development 

Information 

Public Disclosure 

Reports Analysis 

0 5 10 15 20 25 30 

Percent of Budget 
31 

Chapter 4 

Legislative 

Recommendations 

Public Financing 

Presidential Election Campaign Fund (1989)* 

Section: 26 U.S.C. §§9001-9013, 9031-9042 and 

6096 

Recommendation: Congress should be alert to the 

fact that, based on Commission projections, by 

1996 the Presidential Election Campaign Fund may 

lack sufficient money to fully fund all phases of the 

Presidential elections: primaries, conventions and 

general election. Congress may wish therefore to 

modify the overall scheme for financing Presidential 

elections. 

Explanation: Under the current rate of taxpayer 

checkoffs and the current level of demand for federal funds in Presidential elections, there is serious 

doubt as to whether the Presidential Election Campaign Fund will have sufficient funds to cover all 

phases of the 1996 Presidential elections. The fund 

may even be insufficient by 1992. 

After expected total disbursements of $176 million during the 1988 election cycle, the balance in 

the Fund will be approximately $50 million. With an 

estimated $35 million added by taxpayers each 

year, the 1992 balance would be a projected $190 

million. This amount might cover the disbursements 

associated with the 1992 election. After the 1992 

election, however, the balance in the Fund will approach zero. If taxpayer checkoffs continue at the 

current level of $35 million per year, the balance by 

1996 will be approximately $140 million-some $35 

million less than the amount distributed in 1988. 

At 26 U.S.C. §9006 (c), the law provides for a 

pro rata distribution of monies if the Presidential 

Election Campaign Fund is insufficient to satisfy the 

full entitlement of all eligible candidates in the general election. Under 26 U.S.C. §9003(b), major 

party candidates may accept contributions toward 

the general election to make up any deficiency resulting from this pro rata distribution. Such a result, 

however, would clearly alter the Presidential public 

funding program, which has been in effect in the 

general elections since 1976. 

The law (26 U.S.C. §9037(a)) mandates that the 

Secretary of the Treasury make funds available for 

the primary matching program only after he determines that there are sufficient funds available for 

the conventions and the general election. Consequently, primary candidates would be the first to 

suffer if a shortage occurred in the Fund. 

Adjustment of Presidential Primary 

Threshold Submission 

Section: 2 U.S.C. §9033(b) 

Recomme~dation: Congress should consider raising 

the threshold amount of matchable contributions 

required to qualify for Presidential primary matching 

funds. To reach this higher threshold, Congress 

could increase the number of States in which the 

candidate must raise the qualifying amount of 

matchable contributions; and/or increase the total 

amount of qualifying matchable contributions that 

must be raised in each of the States. 

Explanation: We have witnessed the fourth publicly 

financed Presidential election under the Federal 

Election Commission's authority. The statute provides for a COLA adjustment on the overall primary 

spending limitation, which has more than doubled 

si~ce 1976. There is not, however, a corresponding 

adjustment made to the threshold requirements. 

Such an adjustment would ensure that funds continue to be given only to candidates who demonstrate broad national support. 

Fundi'aising Limitation for Publicly 

Financed Presidential Primary Campaigns 

Section: 2 U.S.C. §§431 (9)(A)(vi) and 441 a 

Recommendation: The Commission recommends 

that the separate fundraising limitation provided to 

* The date "1989" indicates that the recommendation 

was adopted for the first time in 1989. Recommendations 

without the date were initially adopted in previous years 

and reaffirmed by the Commission in 1989. 
32 

publicly financed Presidential primary campaigns be 

combined with the overall limit. Thus, instead of a 

candidate's having a $10 million (plus COLA*) limit 

for campaign expenditures and a $2 million (plus 

COLA) limit for fundraising (20 percent of overall 

limit), each candidate would have one $12 million 

(plus COLA) limit for all campaign 

expenditures. 

Explanation: Campaigns that have sufficient funds 

to spend up to the overall limit usually allocate 

some of their expenditures to the fundraising category. These campaigns come close to spending the 

maximum permitted under both their overall limit 

and their special fundraising limit. Hence, by combining the two limits, Congress would not substantially alter spending amounts or patterns. For those 

campaigns which do not spend up to the overall 

expenditure limit, the separate fundraising limit is 

meaningless. Many smaller campaigns do not even 

bother to use it, except in one or two States where 

the expenditure limit is low, e.g., Iowa and New 

Hampshire. Assuming that the State limitations are 

eliminated or appropriately adjusted, this recommendation would have little impact on the election process. 

The advantages of the recommendation, however, are substantial. They include a reduction in 

accounting burdens and a simplification in reporting 

requirements for campaigns, and a reduction in the 

Commission's auditing task. 

State Expenditure Limits for Publicly 

Financed Presidential Primary Campaigns 

Section: 2 U.S.C. §441a 

Recommendation: The Commission recommends 

that the State-by-State limitations on expenditures 

for publicly financed Presidential primary candidates 

be eliminated. 

Explanation: The Commission has now seen four 

Presidential elections under the State expenditure 

limitations. Based on our experience, we believe 

that the limitations could be removed with no material impact on the process. 

Our experience has shown that the limitations 

have little impact on campaign spending in a given 

State, with the exception of Iowa and New Hampshire. In most other States, campaigns are unable 

or do not wish to expend an amount equal to the 

limitation. In effect, then, the administration of the 

entire program results in limiting disbursements in 

these two primaries alone. 

If the limitations were removed, the level of disbursements in these States would obviously increase. With an increasing number of primaries 

vying for a campaign's limited resources, however, 

it would not be possible to spend very large 

amounts in these early primaries and still have adequate funds available for the later primaries. Thus, 

the overall national limit would serve as a constraint 

on State spending, even in the early primaries. At 

the same time, candidates would have broader discretion in the running of their campaigns. 

Our experience has also shown that the limitations have been only partially successful in limiting 

expenditures in the early primary States. The use 

of the fundraising limitation, the compliance cost 

exemption, the volunteer service provisions, the 

unreimbursed personnel travel expense provisions, 

the use of a personal residence in volunteer activity 

exemption, and a complex series of allocation 

schemes have developed into an art which when 

skillfully practiced can partially circumvent the State 

limitations. 

Finally, the allocation of expenditures to the 

States has proven a significant accounting burden 

for campaigns and an equally difficult audit and 

enforcement task for the Commission. 

Given our experience to date, we believe that 

this change to the Act would be of substantial 

benefit to all parties concerned. 

* Spending limits are increased by the cost-of-living 

adjustment (COLA), which the Department of Labor calculates annually. 
33 

Deposit of Repayments 

Section: 26 U.S.C. §9007(d) 

Recommendation: Congress should revise the law 

to state that: All payments received by the Secretary of the Treasury under subsection (b) shalf be 

deposited by him or her in the Presidential Election 

Campaign Fund established by section 9006(a). 

Explanation: This change would allow the Fund to 

recapture monies repaid by convention-related committees of national major and minor parties, as well 

as by general election grant recipients. Currently 

the Fund recaptures only repayments made by primary matching fund recipients. 

Contributions and 

Expenditures 

Contributions and Expenditures to Influence 

Federal and Non-Federal Elections (1989) 

Section: 2 U.S.C. §§441 and 434 

Recommendation: Congress may wish to consider 

whether new legislation is needed to monitor political committees that engage in activities that influence both federal and nonfederaf elections. 

Explanation: The law requires that all funds spent 

to influence federal elections come from sources 

that are permissible under the limitations and prohibitions of the Act. Problems arise with the application of this provision when committees engage in 

activities that support both federal and nonfederaf 

candidates. In this regard, the Commission has 

attempted to clarify the rules on allocating disbursements between federal and nonfederaf election activity. (The Commission issued a Notice of Proposed Rufemaking and conducted hearings.) 

The District Court for the District of Columbia, in 

Common Cause v. FEC, confirmed the Commission's long-standing view that allocation is the appropriate way to reconcile its mandate (to monitor 

excessive and prohibited funds) and the limits on 

its jurisdiction (to regulate money influencing federal 

elections-but not state or focal). In recent hearings, the Commission acknowledged that the allocation issue had been "clouded by allegations that the 

campaigns of both Presidential candidates raised 

farge amounts of so-called 'soft money."'* In fight of 

this public concern, Congress may wish to reevaluate the Commission's role in regulating political 

committees that support both federal and nonfederal candidates. 

Nonprofit Corporations (1989) 

Section: 2 U.S.C. §441 b 

Recommendation: In light of the decision of the 

U.S. Supreme Court in Federal Election Commission v. Massachusetts Citizens for Life, Inc. 

(MCFL), Congress may wish to amend the provision prohibiting corporate and labor spending in 

connection with federal elections in order to incorporate in the statute the text of the Court's 

decision. 

Explanation: In the Court's decision of December 

15, 1986, the Court held that the Act's prohibition 

on corporate political expenditures was unconstitutional as applied to independent expenditures made 

by a narrowly defined type of nonprofit corporation. 

Since that time, the Commission has published a 

notice of proposed rulemaking and has conducted 

hearings on whether regulatory changes are 

needed as a result of the Court's decision. Congress may wish to consider whether statutory 

changes are required as well. 

The Court found that certain nonprofit corporations were not subject to the prohibitions of 2 

U.S.C. §441 b. The Court determined, however, that 

these nonprofit corporations had to disclose some 

aspect of their financial activity-in particular, inde-

* Commissioner Thomas J. Josefiak, opening statement at FEC hearings on amendments to 11 CFR 106.1 

concerning the allocation of disbursements between federal and nonfederal accounts, December 15, 1988. 
36 

Another approach would be to randomly select 

several Congressional districts and audit all political 

committees in those districts, for a given election 

cycle. This system might result in concentrating 

audits in fewer geographical areas. 

Regardless of how random selections were 

made, it would be essential to include all types of 

political committees-PACs, party committees and 

candidate committees-and to ensure an impartial, 

even handed selection process. 

Modifying "Reason to Believe" Finding 

Section: 2 U.S.C. §437g 

Recommendation: Congress should consider modifying the language pertaining to "reason to believe," 

contained in 2 U.S.C. §437g, in order to reduce the 

confusion sometimes experienced by respondents, 

the press and the public. One possible approach 

would be to change the statutory language from 

"the Commission finds reason to believe a violation 

of the Act has occurred" to "the Commission finds 

reason to believe a violation of the Act may have 

occurred." Or Congress may wish to use some 

other less invidious language. 

Explanation: Under the present statute, the Commission is required to make a finding that there is 

"reason to believe a violation has occurred" before 

it may investigate. Only then may the Commission 

request specific information from a respondent to 

determine whether, in fact, a violation has occurred. 

The statutory phrase "reason to believe" is misleading and does a disservice to both the Commission 

and the respondent. It implies that the Commission 

has evaluated the evidence and concluded that the 

respondent has violated the Act. In fact, however, a 

"reason to believe" finding simply means that the 

Commission believes a violation may have occurred 

if the facts as described in the complaint are true. 

An investigation permits the Commission to evaluate the validity of the facts as alleged. 

If the problem is, in part, one of semantics, it 

would be helpful to substitute words that sound less 

accusatory and that more accurately reflect what, in 

fact, the Commission is doing at this early phase o

enforcement. 

In order to avoid perpetuating the erroneous con

clusion that the Commission believes a respondent 

has violated the law every time it finds "reason to 

believe," the statute should be amended. 

Seeking Injunctions in Enforcement Cases 

Section: 2 U.S.C. §437g(a)(1) 

Recommendation: * Congress should amend the 

enforcement procedures set forth in the statute so 

as to empower the Commission to promptly initiate 

a civil suit for injunctive relief in order to preserve 

the status quo when there is clear and convincing 

f 

­

• Commissioner Elliott filed the following dissent: The 

Act presently enables the Commission to seek injunctive 

relief after the administrative process has been completed 

and this is more than sufficient. (See 2 U.S.C. 

§437g(a)(6)(A).) 

I am unaware of any complaint filed with the Commission during the last three years which, in my opinion, 

would meet the four standards set forth in the legislative 

recommendation. Assuming a case was submitted which 

met these standards, I believe it would be inappropriate 

for the Commission to seek injunctive relief pnor to a 

probable cause finding. 

First, the very ability of the Commission to seek an 

injunction, especially during the "heat of the campaign," 

opens the door to allegations of an arbitrary and politically motivated enforcement action by the Commission. 

The Commission's decision to seek an injunction in one 

case while refusing to do so in another could easily be 

seen by candidates and respondents as politicizing the 

enforcement process. 

Second, the Commission might easily be flooded 

with reguests for injunctive relief for issues such as failure to f1le an October quarterly or a 12-day pre-general 

report. Although the Commission would have the discretion to deny all these requests for injunctive relief, in 

makin~ that decision the Commission would bear the 

administrative burden of an immediate review of the factual issues. 

Third, although the courts would be the final arbiter 

as to whether or not to grant an injunction, the mere 

decision by the Commission to proceed to seek an injunction during the final weeks of a campaign would 

cause a diversion of time and money and adverse publicity for a candidate during the most important period of 

the campaign. 

For these reasons, I disagree with the recommendation to expand the power of the Commission to seek 

injunctive relief except as presently provided for in the 

Act. 
37 

evidence that a substantial violation of the Act is 

about to occur. Under criteria expressly stated, the 

Commission should be authorized to initiate such 

civil action in a United States district court without 

awaiting expiration of the 15 day period for responding to a complaint or the other administrative 

steps enumerated in the statute. The person 

against whom the Commission brought the action 

would enjoy the procedural protections afforded by 

the courts. 

Explanation: On certain occasions in the heat of the 

campaign period, the Commission has been provided with information indicating that a violation of 

the Act is about to occur (or be repeated) and yet, 

because of the administrative steps set forth in the 

statute, has been unable to act swiftly and effectively in order to prevent the violation from occurring. In some instances the evidence of a violation 

has been clear-cut and the potential for an impact 

on a campaign or campaigns has been substantial. 

The Commission has felt constrained from seeking 

immediate judicial action by the requirements of the 

statute which mandate that a person be given 15 

days to respond to a complaint, that a General 

Counsel's brief be issued, that there be an opportunity to respond to such brief, and that conciliation 

be attempted before court action may be initiated. 

The courts have indicated that the Commission has 

little if any discretion to deviate from the administrative procedures of the statute. In re Carter-Mondale 

Reelection Committee, Inc., 642 F.2d 538 (D.C. Cir. 

1980); Common Cause v. Schmitt, 512 F. Supp. 

489 (D.D.C. 1980}, aff'd by an equally divided court 

455 U.S. 129 (1982); Durkin for U.S. Senate v. 

FEC, 2 Fed. Elec. Camp. Fin. Guide (CCH) para. 

9147 (D.N.H. 1980). The Commission suggests that 

the standards that should govern whether it may 

seek prompt injunctive relief (which could be set 

forth in the statute itself) are: 

1. There is a substantial likelihood that the facts set 

forth a potential violation of the Act; 

2. Failure of the Commission to act expeditiously 

will result in irreparable harm to a party affected 

by the potential violation; 

3. Expeditious action will not result in undue harm 

or prejudice to the interests of other persons; 

and 

4. The public interest would be served by expeditious handling of the matter. 

Disclaimers 

Disclaimer Notices (1989) 

Section: 2 U.S.C. §441d 

Recommendation: Congress should revise the statute to require registered political committees to display the appropriate disclaimer notice (when practicable) in any communication issued to the general 

public, regardless of its purpose or how it is distributed. 

Explanation: Under 2 U.S.C. §441d, a disclaimer 

notice is only required when "expenditures" are 

made for two types of communications made 

through "public political advertising": (I) communications that solicit contributions and (2) communications that "expressly advocate" the election or defeat of a clearly identified candidate. The Commission has encountered a number of problems with 

respect to this requirement. 

First, the statutory language requiring the disclaimer notice refers specifically to "expenditures," 

suggesting that the requirement does not apply to 

disbursements that are exempt from the definition 

of "expenditure" such as "exempt activities" conducted by local and state party committees under, 

for example, 2 U.S.C. §431 (9) (B) (viii). This proposal would make clear that all types of communications to the public would carry a disclaimer. 

Second, the Commission has encountered difficulties in interpreting "public political advertising," 

particularly when volunteers have been involved 

with the preparation or distribution of the communication. 

Third, the Commission has devoted considerable 

time to determining whether a given communication 

in fact contains "express advocacy" or "solicitation" 

language. The recommendation here would erase 

this need. 
38 

Most of these problems would be eliminated if 

the language of 2 U.S.C. §441d were simplified to 

require a registered committee to display a disclaimer notice whenever it communicated to the 

public, regardless of the purpose of the communication and the means of preparing and distributing it. 

The Commission would no longer have to examine 

the content of communications or the manner in 

which they were disseminated to determine whether 

a disclaimer was required. 

This proposal is not intended to eliminate exemptions for communications appearing in places where 

it is inconvenient or impracticable to display a disclaimer. 

Fundraising Projects Operated by Unauthorized 

Committees 

Section: 2 U.S.C. §432(e)(4) 

Recommendation: * Congress may wish to consider 

amending the statute, at 2 U.S.C. §432(e)(4), to 

clarify that a political committee that is not an authorized committee of any candidate may not use 

the name of a candidate in the name of any "project" or other fundraising activity of such committee. 

Explanation: The statute now reads that a political 

committee that is not an authorized committee 

"shall not include the name of any candidate in its 

name [emphasis added]." In certain situations presented to the Commission the political committee in 

question has not included the name of any candidate in its official name as registered with the Commission, but has nonetheless carried out "projects" 

in support of a particular candidate using the name 

of the candidate in the letterhead and text of its 

materials. The likely result has been that recipients 

of communications from such political committees 

were led to believe that the committees were in fact 

authorized by the candidate whose name was used. 

The requirement that committees include a disclaimer regarding nonauthorization (2 U.S.C. §441 d) 

has not proven adequate under these circumstances. 

The Commission believes that the intent behind 

the current provision is circumvented by the foregoing practice. Accordingly, the statute should be revised to clarify that the use of the name of a candidate in the name of any "project" is also prohibited. 

Fraudulent Solicitation of Funds 

Section: 2 U.S.C. §441 h 

Recommendation: The current §441 h prohibits 

fraudulent misrepresentation such as speaking, writing or acting on behalf of a candidate or committee 

on a matter which is damaging to such candidate 

or committee. It does not, however, prohibit persons 

from fraudulently soliciting contributions. A provision 

should be added to this section prohibiting persons 

* Commissioner Elliott filed the following dissent: I 

support the policy underlying this legislative recommendation and recognize the seriousness of the problem necessitating such a recommendation. However, the scope of 

the recommendation is far too broad and inflexible given 

the traditional fundraising events, especially those held by 

political parties and some unauthorized political committees. Party committees are not authorized committees 

and therefore would come under the general prohibitions 

included in the recommendation, precluding the use of a 

candidate's name for any activity of a party committee. 

Oftentimes, however, fundraising events conducted by a 

party committee incorporate the name of a well-known 

Member of Congress as a fundraising tool. Typically, the 

fundraising contributions are made in the form of checks 

made payable to the name of the event, e.g., "Happy 

Birthday, Senator Smith"; "Mike's Annual Barbecue"; "Sail 

With Senator Sanford"; "Roast Roberts." I do not believe 

Congress intends to preclude the use of the candidates' 

names in such activities, especially when the candidate is 

not only aware that his/her name is being used but approves and is actively participating in the event. 

I would propose that the candidate be entitled to 

authorize the use of his or her name for such an event 

or activity provided the authorization is written. Again, I 

recognize the seriousness and the need to address this 

issue; however, Congress should not exclude fundraising 

tools which have been traditionally used by political committees. 

Further, the impact of this recommendation has not 

been evaluated in the context of our joint fundraising 

regulations. 
39 

from fraudulently misrepresenting themselves as 

representatives of candidates or political parties for 

the purpose of soliciting contributions which are not 

forwarded to or used by or on behalf of the candidate or party. 

Explanation: The Commission has received a number of complaints that substantial amounts of 

money were raised fraudulently by persons or committees purporting to act on behalf of candidates. 

Candidates have complained that contributions 

which people believed were going for the benefit of 

the candidate were diverted for other purposes. 

Both the candidates and the contributors were 

harmed by such diversion. The candidates received 

less money because people desirous of contributing 

believed they had already done so, and the contributors' funds had been misused in a manner in 

which they did not intend. The Commission has 

been unable to take any action on these matters 

because the statute gives it no authority in this 

area. 

Public Disclosure 

Commission as Sole Point of Entry for 

Disclosure Documents (revised 1989) 

Section: 2 U.S.C. §432(g) 

Recommendation: The Commission recommends 

that it be the sole point of entry for all disclosure 

documents filed by Federal candidates and political 

committees. 

Explanation: A single point of entry for all disclosure 

documents filed by political committees would eliminate any confusion about where candidates and 

committees are to file their reports. It would assist 

committee treasurers by having one office where 

they would file reports, address correspondence 

and ask questions. At present, conflicts may arise 

when more than one office sends out materials, 

makes requests for additional information and answers questions relating to the interpretation of the 

law. A single point of entry would also reduce the 

costs to the Federal government of maintaining 

three different offices, especially in the areas of 

personnel, equipment and data processing. 

The Commission has authority to prepare and 

publish lists of nonfilers. It is extremely difficult to 

ascertain who has and who has not filed when reports may have b.een filed at or are in transit between two different offices. Separate points of entry 

also make it difficult for the Commission to track 

responses to compliance notices. Many responses 

and/or amendments may not be received by the 

Commission in a timely manner, even though they 

were sent on time by the candidate or committee. 

The delay in transmittal between two offices sometimes leads the Commission to believe that candidates and committees are not in compliance. A 

single point of entry would eliminate this confusion. 

Finally, a single point of entry would enhance 

disclosure. Often the public and FEC staff have 

difficulty deciphering information from reports filed 

with the Clerk and the Secretary because these 

reports have been photocopied several times. A 

single point of entry would reduce the number of 

times a report had to be photocopied, thereby rendering it more legible and ensuring the placement 

of more accurate information on the public 

record. 

If the Commission received all documents, it 

would transmit on a daily basis file copies to the 

Secretary of the Senate and the Clerk of the 

House, as appropriate. The Commission notes that 

the report of the Institute of Politics of .the John F. 

Kennedy School of Government at Harvard 

University, An Analysis of the Impact of the Federal 

Election Campaign Act, 1972-78, prepared for the 

House Administration Committee, recommends that 

all reports be filed directly with the Commission 

(Committee Print, 96th Cong., 1st Sess., at 122 

(1979). 

Public Disclosure at State Level 

Section: 2 U.S.C. §439 

Recommendation: Congress should consider relieving both political committees (other than candidate 
40 

committees) and State election offices of the burdens inherent in the current requirement that political committees file copies of their reports with the 

Secretaries of State. One way this could be accomplished is by providing a system whereby the Secretary of State (or equivalent State officer) would tie 

into the Federal Election Commission's computerized disclosure data base. 

Explanation: At the present time, multicandidate 

political committees are required to file copies of 

their reports (or portions thereof) with the Secretary 

of State in each of the States in which they support 

a candidate. State election offices carry a burden 

for storing and maintaining files of these reports. At 

the same time, political committees are burdened 

with the responsibility of making multiple copies of 

their reports and mailing them to the Secretaries of 

State. 

With advances in computer technology, it is now 

possible to facilitate disclosure at the State level 

without requiring duplicate filing. Instead, State election offices would tie into the FEC's computer data 

base. The local press and public could access reports of local political committees through a computer hookup housed in their State election offices. 

All parties would benefit: political committees would 

no longer have to file duplicate reports with State 

offices; State offices would no longer have to provide storage and maintain files; and the FEC could 

maximize the cost effectiveness of its existing data 

base and computer system. 

Such a system has already been tested in a pilot 

program and proven inexpensive and effective. Initially, we would propose that candidate committees 

and in-State party committees continue to file their 

reports both in Washington, D.C., and in their home 

States, in response to the high local demand for 

this information. Later, perhaps with improvements 

in information technology, the computerized system 

Qould embrace these committees as well. 

State Filing for Presidential Candidate 

Committees 

Section: 2 U.S.C. §439 

Recommendation: Congress should consider clarifying the State filing provisions for Presidential candidate committees to specify which particular parts of 

the reports filed by such committees with the FEC 

should also be filed with States in which the committees make expenditures. Consideration should be 

given to both the benefits and the costs of State 

disclosure. 

Explanation: Both States and committees have inquired about the specific requirements for Presidential candidate committees when filing reports with 

the States. The statute requires that a copy of the 

FEC reports shall be filed with all States in which a 

Presidential candidate committee makes expenditures. The question has arisen as to whether the 

full report should be filed with the State, or only 

those portions that disclose financial transactions in 

the State where the report is filed. 

The Commission has considered two alternative 

solutions. The first alternative is to have Presidential candidate committees file, with each State in 

which they have made expenditures, a copy of the 

entire report filed with the FEC. This alternative 

enables local citizens to examine complete reports 

filed by candidates campaigning in a State. It also 

avoids reporting dilemmas for candidates whose expenditures in one State might influence a primary 

election in another. 

The second alternative is to require that reports 

filed with the States contain all Summary pages 

and only those Receipts and Disbursements schedules that show transactions pertaining to the State 

in which a report is filed. This alternative would 

reduce filing and storage burdens on Presidential 

candidate committees and States. It would also 

make State filing requirements for Presidential candidate committees similar to those for unauthorized 
41 

political committees. Under this approach, any person still interested in obtaining copies of a full report could do so by contacting the Public Disclosure Division of the FEC. 

Registration and Reporting 

Insolvency of Political Committees 

Section: 2 U.S.C. §433(d) 

Recommendation: The Commission requests that 

Congress clarify its intention as to whether the 

Commission has a role in the determination of insolvency and liquidation of insolvent political committees. 2 U.S.C. §433(d) was amended in 1980 to 

read: "Nothing in this subsection may be construed 

to eliminate or limit the authority of the Commission 

to establish procedures for-(A) the determination 

of insolvency with respect to any political committee; (B) the orderly liquidation of an insolvent political committee, and the orderly application of its 

assets for the reduction of outstanding debts; and 

(C) the termination of an insolvent political committee after such liquidation and application of assets." 

The phrasing of this provision ("Nothing...may be 

construed to...limit") suggests that the Commission 

has such authority in some other provision of the 

Act, but the Act contains no such provision. If Congress intended the Commission to have a role in 

determining the insolvency of political committees 

and the liquidation of their assets, Congress should 

clarify the nature and scope of this authority. 

Explanation: Under 2 U.S.C. §433(d)(1 ), a political 

committee may terminate only when it certifies in 

writing that it will no longer receive any contributions or make any disbursements and that the committee has no outstanding debts or obligations. The 

Act's 1979 Amendments added a provision to the 

law (2 U.S.C. §433(d)(2)) possibly permitting the 

Commission to establish procedures for determining 

insolvency with respect to political committees, as 

well as the orderly liquidation and termination of 

insolvent committees. In 1980, the Commission 

promulgated the "administrative termination" regulations at 11 CFR 102.4 after enactment of the 1979 

Amendments, in response to 2 U.S.C. §433(d)(2). 

However, these procedures do not concern liquidation or application of assets of insolvent political 

committees. 

Prior to 1980, the Commission adopted "Debt 

Settlement Procedures" under which the Commission reviews proposed debt settlements in order to 

determine whether the settlement will result in a 

potential violation of the Act. If it does not appear 

that such a violation will occur, the Commission 

permits the committee to cease reporting that debt 

once the settlement and payment are reported. The 

Commission believes this authority derives from 2 

U.S.C. §434 and from its authority to correct and 

prevent violations of the Act, but it does not appear 

as a grant of authority beyond a review of the specific debt settlement request, to order application of 

committee assets. 

It has been suggested that review by the Commission of the settlement of debts owed by political 

committees at less than face value may lead to the 

circumvention of the limitations on contributions 

specified by 2 U.S.C. §§441 a and 441 b. The 

amounts involved are frequently substantial, and the 

creditors are often corporate entities. Concern has 

also been expressed regarding the possibility that 

committees could incur further debts after settling 

some, or that a committee could pay off one creditor at less than the dollar value owed and subsequently raise additional funds to pay off a "friendly" 

creditor at full value. 

When clarifying the nature and scope of the 

Commission's authority to determine the insolvency 

of political committees, Congress should consider 

the impact on the Commission's operations. An 

expanded role in this area might increase the Commission's workload, thus requiring additional staff 

and funds. 

Waiver Authority 

Section: 2 U.S.C. §434 

Recommendation: Congress should give the Commission authority to grant general waivers or ex-
42 

emptions from the reporting requirements of the Act 

for classifications and categories of political committees. 

Explanation: In cases where reporting requirements 

are excessive or unnecessary, it would be helpful if 

the Commission had authority to suspend the reporting requirements of the Act. For example, the 

Commission has encountered several problems 

relating to the reporting requirements of authorized 

committees whose respective candidates were not 

on the election ballot. The Commission had to consider whether the election-year reporting requirements were fully applicable to candidate committees 

operating under one of the following circumstances: 

• The candidate withdraws from nomination prior to 

having his or her name placed on the ballot. 

• The candidate loses the primary and therefore is 

not on the general election ballot. 

• The candidate is unchallenged and his or her 

name does not appear on the election ballot. 

Moreover, a Presidential primary candidate who has 

triggered the $100,000 threshold but who is no 

longer actively seeking nomination should be able 

to reduce reporting from a monthly to a quarterly 

schedule. 

In some instances, the reporting problems reflect 

the unique features of certain State election procedures. A waiver authority would enable the Commission to respond flexibly and fairly in these situations. 

In the 1979 Amendments to the Act, Congress 

repealed 2 U.S.C. §436, which had provided the 

Commission with a limited waiver authority. There 

remains, however, a need for a waiver authority. It 

would enable the Commission to reduce needlessly 

burdensome disclosure requirements. 

Campaign-Cycle Reporting 

Section: 2 U.S.C. §434 

Recommendation: Congress should revise the law 

to require authorized candidate committees to report on a campaign-to-date basis, rather than a 

calendar year cycle, as is now required. 

Explanation: Under the current law, a reporter or 

researcher must compile the total figures from several year-end reports in order to determine the true 

costs of a committee. In the case of Senate campaigns, which may extend over a six-year period, 

this change would be particularly helpful. 

Monthly Reporting for Congressional 

Candidates 

Section: 2 U.S.C. §434(a)(2) 

Recommendation: The principal campaign committee of a Congressional candidate should" have the 

option of filing monthly reports in lieu of quarterly 

reports. 

Explanation: Political committees, other than principal campaign committees, may choose under the 

Act to file either monthly or quarterly reports during 

an election year. Committees choose the monthly 

option when they have a high volume of activity. 

Under those circumstances, accounting and reporting are easier on a monthly basis because fewer 

transactions have taken place during that time. 

Consequently, the committee's reports will be more 

accurate. 

Principal campaign committees can ai!?O have a 

large volume of receipts and expenditures. This is 

particularly true with Senatorial campaigns. These 

committees should be able to choose a more frequent filing schedule so that their reporting covers 

less activity and is easier to do. 

Monthly Reports (revised 1989) 

Section: 2 U.S.C. §434(a)(3)(B) and (4)(8) 

Recommendation: Congress should change the 

reporting deadline for monthly filers from the twentieth to the fifteenth of the month. 

Explanation: Committees filing monthly reports are 

now required to file reports disclosing each month's 

activity by the twentieth day of the following month. 

Particularly in the fast-paced Presidential primary 

period, this 20-day lag does not meet the public's 
43 

need for timely disclosure. In light of the increased 

use of computerized recordkeeping by political committees, imposing a monthly filing deadline of the 

fifteenth of the month would not be unduly burdensome and would ensure timely disclosure of crucial 

financial data. 

Reporting Payments to Persons Providing 

Goods and Services 

Section: 2 U.S.C. §434(b)(5)(A), (6)(A) and (6)(8) 

Recommendation: The current statute requires reporting "the name and address of each...person to 

whom an expenditure in an aggregate amount or 

value in excess of $200 within the calendar year is 

made by the reporting committee to meet a candidate or committee operating expense, together with 

the date, amount, and purpose of such operating 

expenditure." Congress should clarify whether this 

is meant, in all instances, to require reporting committees to disclose only the payments made by the 

committee or whether, in some instances, 1) the 

reporting committees must require initial payees to 

report, to the committees, their payments to secondary payees, and 2) the reporting committees, in 

turn, rrwst maintain this information and disclose it 

to the public by amending their reports through 

memo entries. 

Explanation: The Commission has enGountered on 

several occasions the question of just how detailed 

a committee's reporting of disbursements must be. 

See, e.g., Advisory Opinion 1983-25, 1 Fed. Election Camp. Fin. Guide (CCH), para. 5742 (Dec. 22, 

1983) (Presidential candidate's committee not required to disclose the names, addresses, dates or 

amounts of payments made by a Qeneral media 

consultant retained by the committee); Advisory 

Opinion 1984-8, 1 Fed. Election Camp. Fin. Guide 

(CCH), para. 5756 (Apr. 20, 1984) (House candidate's committee only required to itemize payments 

made to the candidate for travel and subsistence, 

not the payments made by the candidate to the 

actual providers of services); Financial Control and 

Compliance Manual for General Election Candidates 

Receiving Public Financing, Federal Election Commission, pp. IV 39-44 (1984) (Distinguishing committee advances or reimbursements to campaign 

staff for travel and subsistence from other advances 

or reimbursements to such staff and requiring itemization of payments made by campaign staff only 

as to the latter). Congressional intent in the area is 

not expressly stated, and the Commission believes 

that statutory clarification would be beneficial. In the 

area of Presidential public financing, where the 

Commission is responsible for monitoring whether 

candidate disbursements are for qualified campaign 

expenses (see 26 U.S.C. §§9004(c) and 

· 9038(b)(2)), guidance would be particularly useful. 

Verifying Multicandidate Committee Status 

Section: 2 U.S.C. §§438(a)(6)(C), 441 a(a)(2) and 

(a)(4) 

Recommendation: Congress should consider modifying those provisions of the Act relating to multicandidate committees in order to reduce the problems encountered by contributor committees in reporting their multicandidate committee status, and 

by candidate committees and the Commission in 

verifying the multicandidate committee status of 

contributor committees. In this regard, Congress 

might consider requiring political committees to notify the Commission once they have satisfied the 

three criteria for becoming a multicandidate committee, namely, once a political committee has been 

registered for not less than 6 months, has received 

contributions from more than 50 persons and has 

contributed to at least 5 candidates for Federal office. 

Explanation: Under the current statute, political 

committees may not contribute more than $1,000 to 

each candidate, per election, until they qualify as a 

multicandidate committee, at which point they may 

contribute up to $5,000 per candidate, per election. 

To qualify for this special status, a committee must 

meet three standards: 
44 

• Support 5 or more Federal candidates; 

• Receive contributions from more than 50 contributors; and 

• Have been registered as a political committee for 

at least 6 months. 

The Commission is statutorily responsible for maintaining an index of committees that have qualified 

as multicandidate committees. The index enables 

recipient candidate committees to determine 

whether a given contributor has in fact qualified as 

a multicandidate committee and therefore is entitled 

to contribute up to the higher limit. The Commission's Multicandidate Index, however, is not current 

because it depends upon information filed periodically by political committees. Committees inform the 

Commission that they have qualified as multicandidate committees by checking the appropriate box 

on their regularly scheduled report. If, however, 

they qualify shortly after they have filed their report, 

several months may elapse before they disclose 

their new status on the next report. With semiannual reporting in a nonelection year, for example, 

a committee may become a multicandidate committee in August, but the Commission's Index will not 

reveal this until after the January 31 report has 

been filed, coded and entered into the Commission's computer. 

Because candidate committees cannot totally rely 

on the Commission's Multicandidate Index for current information, they sometimes ask the contributing committee directly whether the committee is a 

multicandidate committee. Contributing committees, 

however, are not always clear as to what it means 

to be a multicandidate committee. Some committees erroneously believe that they qualify as a 

multicandidate committee merely because they have 

contributed to more than one Federal candidate. 

They are not aware that they must have contributed 

to 5 or more Federal candidates and also have 

more than 50 contributors and have been registered 

for at least 6 months. 

Miscellaneous 

Draft Committees 

Section: 2 U.S.C. §§431 (8)(A)(i) and (9)(A)(i), 

441 a(a)(1) and 441 b(b)t 

Recommendation: Congress should consider the 

following amendments to the Act in order to prevent 

a proliferation of "draft" committees and to reaffirm 

Congressional intent that draft committees are "po~ 

litical committees" subject to the Act's provisions. 

1. Bring Funds Raised and Spent for Undeclared 

but Clearly Identified Candidates Within the Act's 

Purview. Section 431 (8)(A)(i) should be amended 

to include in the definition of "contribution" funds 

contributed by persons "for the purpose of influencing a clearly identified individual to seek 

nomination for election or election to Federal 

office .... " Section 431 (9)(A)(i) should be similarly 

amended to include within the definition of "expenditure" funds expended by persons on behalf 

of such "a clearly identified individual." 

2. Restrict Corporate and Labor Organization Support for Undeclared but Clearly Identified 

Candidates. Section 441 b(b) should be revised to 

expressly state that corporations, labor organizations and national banks are prohibited from 

making contributions or expenditures "for the 

purpose of influencing a clearly identified individ· 

ual to seek nomination for election or election..." 

to Federal office. 

3. Limit Contributions to Draft Committees. The law 

should include explicit language stating that no 

person shall make contributions to any committee (including a draft committee) established to 

influence the nomination or election of a clearly 

identified individual for any Federal office which, 

in the aggregate, exceed that person's contribution limit, per candidate, per election. 
45 

Explanation: These proposed amendments were 

prompted by the decisions of the U.S. Court of 

Appeals for the District of Columbia Circuit in FEC 

v. Machinists Non-Partisan Political League and 

FEC v. Citizens for Democratic Alternatives in 1980 

and the U.S. Court of Appeals for the Eleventh 

Circuit in FEC v. Florida for Kennedy Committee. 

The District of Columbia Circuit held that the Act, 

as amended in 1979, regulated only the reporting 

requirements of draft committees. The Commission 

sought review of this decision by the Supreme 

Court, but the Court declined to hear the case. 

Similarly, the Eleventh Circuit found that "committees organized to 'draft' a person for federal office" 

are not "political committees" within the Commission's investigative authority. The Commission believes that the appeals court rulings create a serious imbalance in the election law and the political 

process because a nonauthorized group organized 

to support someone who has not yet become a 

candidate may operate completely outside the strictures of the Federal Election Campaign Act. However, any group organized to support someone who 

has in fact become a candidate is subject to the 

Act's registration and reporting requirements and 

contribution limitations. Therefore, the potential exists for funneling large aggregations of money, both 

corporate and private, into the Federal electoral 

process through unlimited contributions made to 

nonauthorized draft committees that support a person who has not yet become a candidate. These 

recommendations seek to avert that possibility. 

Honoraria 

Section: 2 U.S.C. §§431 (8)(B)(xiv) and 441 i 

Recommendation: The Commission offers two suggestions concerning honoraria. 

1. Section 441 i should be placed under the Ethics 

in Government Act. 

2. As technical amendments, Sections 441 i(c) and 

(d), which pertain to the annual limit on receiving 

honoraria (now repealed), should be repealed. 

Additionally, 2 U.S.C. §431 (8)(B)(xiv), which refers to the definition of honorarium in Section 

441 i, should be modified to contain the definition 

. itself. 

Explanation: Congress eliminated the $25,000 annual limit on the amount of honoraria that could be 

accepted, but it did not take out these two sections, 

which only apply to the $25,000 limit. This clarification would eliminate confusion for officeholders and 

thereby help the Commission in its administration of 

the Act. 

Budget Reimbursement Fund (revised 1989) 

Section: 2 U.S.C. §438 

Recommendation: The Commission recommends 

that Congress establish a reimbursement account 

for the Commission so that expenses incurred in 

preparing copies of documents, publications and 

computer tapes sold to the public are recovered by 

the Commission. Similarly, costs awarded to the 

Commission in litigation (e.g., printing, but not civil 

penalties) and payments for Commission expenses 

incurred in responding to Freedom of Information 

Act requests should be payable to the reimbursement fund. The Commission should be able to use 

such reimbursements to cover its costs for these 

services, without fiscal year limitation, and without a 

reduction in the Commission's appropriation. 

Explanation: At the present time, copies of reports, 

microfilm, and computer tapes are sold to the public at the Commission's cost. However, instead of 

the funds being used to reimburse the Commission 

for its expenses in producing the materials, they 

are credited to the U.S. Treasury. The effect on the 

Commission of selling materials is thus the same 

as if the materials had been given away. The Commission absorbs the entire cost. In FY 1988, in 

return for services and materials it offered the public, the FEC collected and transferred $123,790 in 

miscellaneous receipts to the Treasury. During the 

first three months of FY 1989, $25,490 was transferred to the Treasury. Establishment of a reim-
46 

bursement fund, into which fees for such materials 

would be paid, would permit this money to be applied to further dissemination of information. Note, 

however, that a reimbursement fund would not be 

applied to the distribution of FEC informational materials to candidates and registered political committees. They would continue to receive free publications that help them comply with the Federal election laws. 

There should be no restriction on the use of 

reimbursed funds in a particular year to avoid the 

possibility of having funds lapse. 
47 

Appendix 1 

Biographies of 

Commissioners and 

Officers 

Commissioners 

Thomas J. Josefiak, Chairman 

April 30, 1991* 

Until his appointment as Commissioner in August 

1985, Mr. Josefiak served with the Commission as 

Special Deputy to the Secretary of the Senate. Before assuming that post in 1981, he was legal 

counsel to the National Republican Congressional 

Committee. His past experience also includes positions'held at the U.S. House of Representatives. 

He was minority special counsel for Federal election law to the Committee on House Administration 

and, before that, served as legislative assistant to 

Congressman Silvio 0. Conte. A native of Massachusetts, Commissioner Josefiak holds a B.A. degree from Fairfield University, Connecticut, and a 

J.D. degree from Georgetown University Law Center. He was elected 1987 Vice Chairman. 

Danny L. McDonald, Vice Chairman 

April 30, 1993 

Mr. McDonald, as general administrator of the Oklahoma Corporation Commission, was responsible for 

the management of 1 0 regulatory divisions from 

1979 until his appointment to the Commission in 

December 1981. He was secretary of the Tulsa 

County Election Board from 197 4 to 1979 and 

served as chief clerk of the board in 1973. He also 

served as a member of the Advisory Panel to the 

FEC's National Clearinghouse on Election Administration. Mr. McDonald, a native of Sand Springs, 

Oklahoma, holds a B.A. from Oklahoma State University and attended the John F. Kennedy School 

of Government at Harvard University. He served as 

Commission Chairman during 1983. 

Joan D. Aikens 

April 30, 1989 

Mrs. Aikens was one of the original members of the 

Federal Election Commission appointed in 1975. 

Following the Buckley v. Valeo decision of the 

Supreme Court and the subsequent reconstitution 

of the FEC, President Ford reappointed her to a 

five- year term. In 1981, Mrs. Aikens continued to 

serve until President Reagan named her to complete an unexpired term due to a resignation. In 

1983, President Reagan again reappointed Mrs. 

Aikens, this time for a six-year term. She served as 

Chairman between May 1978 and May 1979 and 

during 1986. 

Prior to her appointment to the Commission, Mrs. 

Aikens was an executive for a Pennsylvania public 

relations firm. From 1972 to 1974, she was president of the Pennsylvania Council of Republican 

Women and served on the board of the National 

Federation of Republican Women. A native of Delaware County, Pennsylvania, Mrs. Aikens has been 

active in a variety of volunteer organizations and is 

currently a member of the Commonwealth Board of 

the Medical College of Pennsylvania. She is also a 

member of the board of directors of Ursinus College, Collegeville, Pennsylvania, where she received 

her B.A. and an honorary Doctor of Laws degree. 

Lee Ann Elliott 

April 30, 1993 

Before her appointment to the Commission in December 1981, Mrs. Elliott served as vice president 

of the Washington firm Bishop, Bryant & Associates, Inc. From 1970 to 1979, she was associate 

executive director of the American Medical Political 

Action Committee, having served as assistant director from 1961 to 1970. Mrs. Elliott was on the 

board of directors of the American Association of 

Political Consultants and of the Chicago Area Public Affairs Group; of which she is a past president. 

She was also a member of the Public Affairs Committee of the Chamber of Commerce of the United 

States. In 1979, she received the Award for Excellence in Serving Corporate Public Affairs from the 

National Association of Manufacturers. Mrs. Elliott, a 

native of St. Louis, Missouri, holds a B.A. from the 

University of Illinois. She also completed the Medical Association Management Executives Program at 

Northwestern University and is a Certified Association Executive. Mrs. Elliott served as Commission 

*Term expiration date. Chairman during 1984. 
51 

Appendix 2 

Chronology of 

Events, 1988 

January 

1- Chairman Thomas J. Josefiak and 

Vice Chairman Danny L. McDonald 

begin one-year terms as Commission 

officers.- FEC releases videotape for 

Congressional candidates. 

5- Jesse Jackson certified to receive 

primary matching funds. 

8- In Ralph J. Galliano v. U.S. Postal 

Service, U.S. Court of Appeals holds 

that the FEC is the exclusive arbiter 

concerning the name identifications 

and disclaimers in solicitations for 

political contributions. 

18- Commission releases statistics on 

number of PACs. 

28- Lenora B. Fulani certified to receive 

matching funds. 

31- 1987 year-end report due. 

February 

8- In Congressman Stark v. FEC, U.S. 

District Court upholds FEC's dismissal 

of an administrative complaint. 

11- FEC determines that checks to "The 

Kemp Forum" are not matchable. 

Commission releases financial figures 

on eighteen Presidential primary candidates. 

19- Commission cosponsors election law 

conference in Louisville, Kentucky. 

23- Commission publishes notice of inquiry on allocation of spending between federal and nonfederal accounts. 

March 

1- Commission releases figures on 1988 

Presidential spending limits. 

Commission publishes Record Supplement on Contributions. 

2- Commission certifies an additional 

$328,000 to each major party for their 

Presidential nominating conventions. 

3- Commission testifies before Senate 

Appropriations Subcommittee on 

Treasury, Postal Service and General 

Government on Agency's FY 1989 

budget. 

Commission testifies before House 

Appropriations Subcommittee on 

Treasury, Postal Service and General 

Government on agency's FY 1989 

budget. 

8- Commission testifies before Subcommittee on Elections of the House Administration on agency's FY 1989 

budget. 

Louisiana special primary election 

(fourth Congressional district). 

10- In Xerox v. Americans with Hart and 

Kroll v. Americans with Hart, U.S. 

District Court vacates creditor's claims 

against 1984 Hart campaign. 

24- Lyndon H. LaRouche certified to receive primary matching funds. 

In Antosh v. FEC, U.S. District Court 

rules that three labor PACs are not 

affiliated. 

Commission testifies before Senate 

Rules Committee on agency's FY 

1989 budget. 

25- Commission cosponsors election taw 

conference in Columbus, Ohio. 

31- Commission releases study on 1985-

86 independent spending. 

April 

6 FEC transmits 1988 legislative recommendations to Congress and President. 

12- In USDC v. FEC, U.S. District Court 

rules that USDC was not exempt from 

§441 b's prohibition against corporate 

expenditures. 

15- First quarter report due. 
52 

May 

12-13- FEC cosponsors election law conference in Seattle, Washington. 

12- Commission adopts new procedures 

to speed up enforcement. 

June 

1- Commission publishes Annual Report 

1987. 

7- New Jersey special primary election 

(third Congressional district). 

14- Virginia special election (fifth Congressional district). 

22- Commission releases PAC study for 

first 15 months of 1987-88 cycle. 

24- Commission issues press release on 

party financial activity. 

27- President Reagan signs law eliminating the Supreme Court's mandatory 

jurisdiction under 2 U.S.C. §437h(b). 

July 

1- Commission publishes revised Campaign Guide for Congressional Candidates and Committees. 

12- Illinois special primary election (21st 

Congressional district). 

15- Second quarter report due. 

22- In FEC v. Ted Haley Congressional 

Committee, U.S. Court of Appeals 

upholds FEC's interpretation that loan 

guarantees made after election to 

retire campaign debt are contributions. 

26- FEC approves payment of $46.1 million to Democratic Presidential nominee Michael Dukakis. 

FEC dismisses petition to deny public 

funds for the general election to the 

Democratic Presidential ticket. 

August 

1- Commission releases video tape for 

State party committees. 

3- In Boulter and National Senatorial 

Committee v. FEC, U.S. Court of Appeals affirms FEC's decision to certify 

general election public funds to 

Democratic presidential ticket. 

5- In NRA v. FEC, U.S. Court of Appeals affirms lower court ruling that 

FECs determination on administrative 

complaints cannot be appealed after 

60 days. 

11- FEC releases study on activity of 

1987-88 Congressional campaigns. 

22- FEC approves payment of $46.1 million to Republican Presidential nominee Vice President George Bush. 

25- Tennessee special primary election 

(second Congressional district). 

In Common Cause v. FEC, U.S District Court rejects imposition of timetable on Commission's revision of 

allocation regulations but asks the 

FEC to submit progress reports periodically. 

September 

8- Commission testifies before House 

Administration Committee on HR. 

5121 which would require publication 

of all multicandidate political committee reports. 

Commission publishes a notice in the 

Federal Register regarding rulemaking 

on travel, disclaimers and trade association solicitations. 

22- FEC approves notice of proposed 

rulemaking on allocation of spending 

betWeen federal and nonfederal accounts. 
53 

October 

15 - Third quarter report due. 

27 - Pre-general election report due. 

November 

1 - Commission releases brochure on 

Direct Access Program describing private electronic ties with FEC's data 

base. 

3 

- FEC issues press release on 1987-88 

national party activity. 

4 - FEC releases pre-general election 

data on 1987-88 Congressional campaign activity. 

8 

- General Election Day. 

16 - FEC holds public hearings on proposed rules to regulate independent 

expenditures made by nonprofit corporations. 

December 

6 - FEC publishes notice of proposed 

rulemaking regarding debts owed by 

candidates and political committees. 

8 - Post-general election report due. 

15 - FEC elects Danny L. McDonald as 

Chairman and Lee Ann Elliott as Vice 

Chairman for 1989. 

16 - FEC holds hearing on allocation regulations. 
- -

General Counsel 

Enforcement ~ 

Litigation ~ 

Policy: Regulations 

and Advisory 

Opinions 

~ 

The Commissioners 

Thomas J. Josefiak, Chairman* 

Danny L. McDonald, Vice Chairman** 

Joan D. Aikens, Commissioner 

Lee Ann Elliott, Commissioner 

John Warren McGarry, Commissioner 

Scott E. Thomas, Commissioner 

Walter J. Stewart, Ex Officio/Senate 

Donnald K. Anderson, Ex Officio/House 

Staff Director 

I 

Deputy Staff 

Director for 

Management 

Administration 

Data Systems ~ Development - Planning and ~ ~ Management 

~ 

.._ 

Audit 

Clearinghouse 

Information 

Public Disclosure 

Reports Analysis 

- Commission 

Secretary 

Congressional

- and lntergovernmental Affairs 

Personnel Policy

- and Labor/Management Relations 

- Press Office 

55 

Appendix 3 

FEC Organization Chart 

* Commissioner McDonald was elected 1989 Chairman. 

** Commissioner Elliott was elected 1989 Vice Chairman. 
57 

Appendix 4 

FEC Offices 

This appendix briefly describes the offices that 

make up the Commission. They are listed in alphabetical order. Local telephone numbers are given 

for offices that have extensive contact with the public. Commission offices can also be reached on the 

toll-free number, 800/424-9530 and locally 

202/376-5140 

Administration 

The Administration Division is the Commission's 

"housekeeping" unit and is responsible for accounting, procurement and contracting, space management, payroll, travel and supplies. In addition, several support functions are centralized in the office, 

such as word processing, printing, document reproduction and mail services. The division also handles 

records management, inventory control and building 

security and maintenance. 

Audit 

Many of the Audit Division's responsibilities concern 

the public funding program. The division evaluates 

the matching fund submissions of Presidential primary candidates and determines the amount of 

contributions that may be matched with Federal 

funds. The division conducts the statutorily mandated audits of all publicly funded candidates and 

committees. 

In addition, the division audits those committees 

which, according to FEC determinations, have not 

met the threshold requirements for substantial compliance with the law. Audit Division resources are 

also used in the Commission's investigations of 

complaints. Finally, the division conducts internal 

audits of Commission activities. 

Clearinghouse 

The National Clearinghouse on Election Administration, located on the seventh floor, assists State and 

local election officials by responding to inquiries, 

publishing research and conducting workshops on 

all matters related to Federal election administration. Additionally, the Clearinghouse answers questions from the public on the electoral process. Local 

phone: 376-5670. 

Commission Secretary 

The Secretary to the Commission handles all administrative matters relating to Commission meetings, including agendas, documents, Sunshine Act 

notices, minutes and certification of Commission 

votes. The office also circulates and tracks numerous materials not related to meetings, and records 

the Commissioners' tally votes on these matters. 

Commissioners 

The six Commissioners - three Democrats and 

three Republicans - are appointed by the President and confirmed by the Senate. Two ex officio 

Commissioners, the Secretary of the Senate and 

the Clerk of the House of Represenatives, are nonvoting members. They appoint special deputies to 

represent them at the Commission. 

The six voting Commissioners serve full time and 

are responsible for administering and enforcing the 

Federal Election Campaign Act. They generally 

meet twice a week, once in closed session to discuss matters that, by law, must remain confidential, 

and once in a meeting open to the public. At these 

meetings, they formulate policy and vote on significant legal and administrative matters. 

Congressional, Legislative and 

Intergovernmental Affairs 

This office serves as primary liaison with Congress 

and Executive Branch agencies. The office is responsible for keeping Members of Congress informed about Commission decisions and, in turn, 

for informing the agency on legislative developments. 

Data Systems Development 

This division provides computer support for the entire Commission. Its responsibilities are divided into 

two general areas. 

In the area of campaign finance disclosure, the 

Data Systems Development Division (DSDD) enters 

into the computer data base information from all 

reports filed by political committees and other entities. DSDD is also responsible for the computer 
58 

programs that sort and organize campaign finance 

data into indexes. The indexes permit a detailed 

analysis of campaign finance activity and, additionally, provide a tool for monitoring contribution limitations. DSDD publishes the Reports on Financial 

Activity series of periodic studies on campaign finance and generates statistics for other publications. 

The division also provides computer support for 

the agency's administrative functions. These include 

management information and document tracking 

systems, along wit~ personnel and payroll support. 

General Counsel 

The General Counsel directs the agency's enforc~­

ment activities and represents and advises the 

Commission in any legal actions brought against it. 

The Office of General Counsel handles all civil litigation, including several cases which nave come 

before the Supreme Court. The office also drafts, 

for Commission consideration, regulations and advisory opinions, as well as other legal memoranda 

interpreting the Federal Election Campaign Act. 

Information Services 

In an effort to promote voluntary compliance with 

the law, the Information Services Division provides 

technical assistance to candidates and committees 

and others involved in elections. Staff research and 

answer questions on the Federal Election Campaign Act and FEC regulations, procedures and 

advisory opinions; direct workshops on the law; and 

publish a wide range of materials. Located on the 

second floor, the division is open to the public. Local phone: 376-3120. 

Law Library 

The Commission law library, part of the Office of 

General Counsel, is located on the eighth floor and 

is open to the public. The collection includes basic 

legal research tools and materials dealing with political campaign finance, corporate and labor politi~ 

cal activity and campaign finance reform~ The Li~ 

brary staff prepares indices to Advisory Opinions 

and Matters Under Review (MURs) as well as a 

Campaign Finance and Federal Election Law Bibliography, all available for purchase from the Public 

Records Office. Local phone: 376-5312. 

Personnel and Labor/Management Relations 

This office handles employment, position classification, training and employee benefits. It also provides policy guidance on awards and discipline matters and administers a comprehensive labor relations program including contract negotiations and 

resolution of disputes before third parties. 

Planning and Management 

This office develops the Commission's budget and, 

each fiscal year, prepares a management plan determining the allocation and use of resources 

throughout the agency. Planning and Management 

monitors adherence to the plan, providing monthly 

reports measuring the progress of each division in 

achieving the plan's objectives. 

Press Office 

Staff ofthe Press Office are the Commission's official media spokespersons. In addition to publicizing 

Commission actions and releasing statistics on 

campaign finance, they respond to all questions 

from representatives of the print and broadcast media. Located on the first floor, the _office also 

handles requests underthe Freedom of Information 

Act. Local phone: 376-3159. 

Public Records--

Staff from the Public Records Office answer questions and provide information on the campaign finance activities of political committees and candidates involved in Federal elections. Located on the 

first floor, the office is a library facility with ample. 

work space and a knowledgeable staff to help locate documents. The FEC encourages the public to 

review the many documents available, including 

committee reports, computer indexes, closed compliance cases and advisory opinions. Local phone: 

376-3140. 
59 

Reports Analysis 

Reports analysts assist committee officials in complying with reporting requirements and conduct detailed examinations of the campaign finance reports 

filed by political committees. If an error, omission or 

prohibited activity (e.g., an excessive contribution) is 

discovered in the course of reviewing a report, the 

analyst sends the committee a letter that explains 

the mistake and asks for clarification. By sending 

these letters, the Commission seeks to ensure full 

disclosure and to encourage the committee's voluntary compliance with the law. Analysts also provide 

frequent telephone assistance to committee officials 

and encourage them to call the division with reporting questions or compliance problems. Local number: 376-2480. 

Staff Director and Deputy Staff Director 

The Staff Director carries the responsibilities of appointing staff, with the approval of the Commission, 

and implementing Commission policy. The Staff 

Director oversees the Commission's public disclosure activities, outreach efforts, review of reports 

and the audit program, as well as the administration of the agency. 

The Deputy Staff Director has broad responsibility for assisting in this supervision, particularly in 

the areas of budget, administration and computer 

systems. 
61 

Appendix 5 

Statistics on Commission 

Operations 

Summary of Disclosure Files 

Total 

Filers 

Existing 

in 1988 

Filers 

Terminated 

as of 

12/31/88 

Continuing 

Filers as of 

12/31/88 

Number of

Reports 

and Statements in 

1988 

Gross 

Receipts 

in 1988 

Gross 

Expenditures 

in 1988 

Presidential 731 82 649 2,314 $266,832,210 $269,008,934 

Candidates 398 41 357 

Committees 333 41 292 

Senate 1094 154 940 1,400 $163,708,129 $195,551 ,083 

Candidates 555 77 478 

Committees 539 77 462 

House 5,318 832 4,486 7,289 $216,983,470 $219,771,572 

Candidates 2,766 416 2,350 

Committees 2,552 416 2,136 

Party 538 86 452 3,972 $400,800,240 $412,302,695 

Delegates 102 14 NA 108 0 $119,478 

Nonparty 4,827 617 4,210 46,132 $218,840,474 $241 ,903,563 

Labor committees 401 51 350 

Corporate committees 2008 206 1,802 

Membership, trade and 

other committees 2418 360 2,058 

173 NA NA 167 NA $4,336,897 

163 NA NA 299 NA $358,863 

Communication cost filers 

Independent expenditures by persons 

other than political committees 
62 

Divisional Statistics for Calendar Year 1988 

Total 

Reports Analysis Division . 

Documents processed 58,898 

Reports reviewed 35,740 

Telephone assi.stance and meetings 7,438 

Requests for additionai information (RFAis) 5,104 

Second RFAis 2,074 

Names of candidate committees published 

for failure to file reports 77 

Compliance matters referred to the Office 

of General Counsel or Audit Division 125 

Data Systems Development· Division 

Documents receiving Pass 1 coding* 44,616 

Documents receiving Pass Ill coding* 51,064 

Documents receiving Pass 1 entry .. 54,966 

Documents receiving Pass Ill entry 50,508 

Transactions receiving Pass Ill entry .. 

• In-house 161,855 

• Contract 598,664 

Public Records Office 

Campaign finance material processed 

(total pages) 1,637,609 

Requests for campaign finance reports 7,907 

Visitors 14,183 

Total people served 22,090 

Information phone calls 19,584 

Computer printouts provided 114,692 

Total income (transmitted to U.S. Treasury) $115;042 

Cumulative total pages of documents 

available for review 8,118,214 

Contacts with state election offices 3,863 

Notices of failure to file with state 

election offices 209 

Total 

Information Services Division 

Telephone inquiries 72,965 

Information letters 184 

Distril:)ution of FEC .materials 10,826 

Prior notices (sent to inform filers 

of reporting deadlines) 41,213 

Other mailings 21,748 

Visitors 155 

Public appearances by Commissioners 

and staff 141 

State workshops 3 

Publications 22 

Video 1 

Press Office 

Press releases 181 

Telephone inquiries from press 19,794 

Visitors· to press office 3,407 

Freedom of Information Act 

(FOIA) requests 112 

Fees for materials requested under FOIA 

(transmitted to U.S. Treasury) $15,527 

Clearinghouse on Election Administration 

Telephone inquiries 4,124 

Information letters 42 

Visitors · 79 

State workshops 0 

Publications 8 

Project conferences 0 

* Computer coding and entry of campaign finance information occur in two phases. In the first phase, Pass 

1, summary information is coded and entered into the 

computer within 48 hours of the Commission's receipt of 

the report. During the second phase, Pass Ill, itemized 

information·is coded and entered. 
63 

Total 

Office of General Counsel 

Advisory opinions 

Requests pending at beginning of 1988 7 

Requests received 49 

Issued, closed or withdrawn• 56 

Pending at end of year 0 

Compliance cases (MURs} 8 

Cases pending at beginning of 1988 171 

Cases opened 236 

Cases closed 187 

Cases pending at end of year 220 

Litigation 

Cases pending at beginning of 1988 46 

Cases opened 27 

Cases closed 31 

Cases pending at end of year 42 

Cases won 27 

Cases lost 1 

Cases voluntarily dismissed 3 

Cases dismissed as moot 0 

Law Library 

Telephone inquiries 1987 

Visitors served 908 

• Forty-five opinions were issued; eleven opinion 

requests were withdrawn or closed without issuance of 

an opinion. 

Audits Completed by Audit Division 

1975-1988 

Presidential 57 

Presidential joint fundraising•• 8 

Senate 12 

House 118 

Party (national} 42 

Party (other} 109 

Nonparty (PACs} 70 

Total 416 

** Presidential joint fundraising committees are those 

established by two or more political committees, including 

at least one Presidential committee, for the purpose of 

raising funds jointly. 
65 

Appendix 6 

FEC Federal Register 

Notices, 1988 

Notice* Title Federal 

Register 

Publication 

Date 

Citation 

1988-1 11 CFR Parts 1/7/88 53 :fiitld. Reg. 

109 and 114: 

Corporate and 

Labor Expenditures; 

Advance Notice of 

Proposed 

Rulemaking 

4f6 

1988-2 Filing Dates for 1/20/88 53 Fed. Reg. 

Louisiana Special 

Elections 

1510 

1988-3 11 CFR Part 110; 1/28/88 53 Fed. Reg. 

Rulemaking 

Petition; Ted Haley 

Congressional 

Committee 

2500 

1988-4 11 CFR Parts 2/23/88 53 Fed. Reg. 

102 and 106 

Allocation Between 

Federal and 

Nonfederal Accounts; 

Notice of Inquiry 

5277 

1988-5 Filing Dates for 3/7/88 53 Fed. Reg. 

Virginia Special 

Elections 

7235 

1988-6 Filing Dates for 4/13/88 53 Fed. Reg. 

New Jersey 

Special Election 

12188 

1988-7 Filing Dates 5/11/88 53 Fed. Reg. 

for Illinois 

Special Elections 

16781 

1988-8 Filing Dates 7/13/88 53 Fed. Reg. 

for Tennessee 

Special Elections 

26500 

1988-9 Ted Haley 9/15/88 53 Fed. Reg. 

Congressional 

Committee 

Rulemaking Petition; 

Notice of Disposition 

35829 

Notice Title Federal 

Register 

Publication 

Date 

Citation 

1988-10 Contributions and 9/15/88 53 Fed. Reg. 

Expenditures; 

Communications, 

Advertising; Trade 

Associations; Notice 

of Proposed 

Rulemaking 

35827 

1988-11 11 CFR Part 106: 9/29/88 53 Fed. Reg. 

Methods of 

Allocation Between 

Federal and 

Nonfederal Accounts; 

Payments; 

Reporting; Notice 

of Proposed 

Rulemaking 

38012 

1988-12 11 CFR Parts 109 10/13/88 53 Fed. Reg. 

and 114: Corporate 

and Labor 

Expenditures; 

Announcement of 

Public Hearing and 

Comment Period 

Extension 

40070 

1988-13 11 CFR Part 106: 10/13/88 53 Fed. Reg. 

Methods of Allocation 

between Federal 

and Nonfederal 

Accounts; Payments; 

Reporting; Change 

of Public Hearing 

Date 

40070 

1988-14 11 CFR Parts 12/6/88 53 Fed. Reg. 

113, 114 and 116; 

Debts Owed by 

Candidates and 

Political Committees; 

Notice of Proposed 

Rulemaking 

49193 

* This appendix does not include Federal Register 

notices of Commission meetings published under the 

Government in the Sunshine Act.