-rHE FEDERAL ELECTION

COMMISSION

1325 KStreet NW., Washington, D.C. 20463

June 1980 Volume 6, Number 

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GEORGIA PRIMARY

RUNOFF RESCHEDULED

A runoff election for Congressional candidates will 

held in Georgia on August 26, instead of September 

if no candidate obtains a majority of the vote in the stat

August 5 primary election. In the event of a runoff ele

tion, the schedule for filing a 12-day pre-election report 

committees supporting candidates for federal office is 

follows:

August 6, 1980 August 11, 1980

NEW OFFICERS ELECTED

On May 14, 1980, the Federal Election Commission

unanimously elected Vice Chairman Max L. Friedersdorf as

its new Chairman and Commissioner John Warren McGarry

as its new Vice Chairman. The new officers began their

one-year terms of office on May 19, 1980.

The Federal Elt'iction Campaign Act permits Commissioners

to serve as Chairman only once during their six-year terms.

The law also limits the Chairman's and Vice Chairman's

term of office to one year, and requires that both officers

be affiliated with different political parties. Previous

Chairmen were Thomas B. Curtis (1975-76), Vernon W.

Thomson (1976-77), Thomas E. Harris (1977-78). Joan D.

Aikens (1978-79) and Robert O. Tiernan (1979-80).

Closing Date

of Books

Mailing Date of Report

(if sent by registered

or certified mail)

Filing

Date

August 14, 198

Chairman Friedersdorf served as Staff Director of the

Senate Repu bllcan Policy Committee from January 1977

until his appointment to the Commission in February 1979.

A native of Indiana, Mr. Friedersdorf received his B.A. from

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

before serving as administrative assistant and "presssecretary

for former Congressman R"ichard l. Roudebush (R-Ind.)

from 1961 to 1970. In 1970, he was Director of Congressional Relations for the Office of Economic Opportunity.

From 1971 to 1977, Mr. Friedersdorf served in several

White House posts. He was Deputy Assistant for Congressional Affairs to President Nixon from 1971 to 1974. He

continued as Deputy Assistant to President Ford until

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

Vice Chairman McGarry was appointed to the Commission

in October 1978. He formerly served as special counsel on

elections to the Committee on-House Administration in the

U.S. House of Representatives. From 1963 through 1972,

he engaged in private law practice and also served as chief

counsel for the House Special Committee to Investigate

Campaign Expenditures. From 1959 through 1962, Mr.

McGarry was Assistant Attorney General of Massachusetts.

A 1952 graduate of Holy Cross College, Mr. McGarry

received his law degree from Georgetown Law Center in

1956.

REGULATIONS GOVERNING

SUSPENSION OF MATCHING

FUNDS REVISED

On April 15, 1980. the F EC transmitted to Congr

revised regulations governing the suspension of prima

matching fund payments to Presidential candidates. T

proposed revisions :affect the following provisions 

11 CFR 9033.9:

Standard for Determining

Violation of Spending Limits

The Commission could suspend matching fund payme

to a candidate only if he or she knowingly, willfully a

substantially exceeded the spending limits for matchi

fund recipients stipulated at 26 U.S.C. §9035. Und

current Commission Regulations, promulgated on May 

1979, the Commission may suspend matching fund p

ments to a candidate who knowingly and willfully excee

the spending limits.

continu
Permanent Suspension

of Eligibility

A Presidential primary candidate who exceeded the

spending limits would not be permitted to reestablish

matching fund eligibility after payments had been sus'

pended. Under current regulations, payments to a candidate

may resume if he or she repays an amou nt equal to the

excessive expenditure and pays, or agrees to pay, any civil

or criminal penalties resulting from this violation.

The proposed regulations, together with their explanation

and justification, were published in the Federal Register on

April 15, 1980, and will become effective after 30 legisla-

. tive days have elapsed, provided neither House of Congress

disapproves them. 45 FR 25378.

FINAL REGULATIONS GOVERNING

ACCESS TO PUBLIC RECORDS PUBLISHED

On May 13, 1980, the Commission published in the

Federal Register l45 FR 31291) revised Freedom of Information Act Regulations (11 CFR Part 4) and new regulations governing access to Public Disclosure Division documents (11 CFR Part 5). These regulations, which will

become effective on June 12, 1980, provide uniform

disclosure procedures and fees for documents the Commission provides to the public pursuant to its public disclosure

duties and documents the Commission provides through the

Freedom of Information Act.

FEC PUBLIC APPEARANCES

The Public Communications Office receives numero

inqu iries from the public on its toll-free line: (800)42

9530. The following explanations are offered in response 

Questions frequently asked about procedures for termina

ing reporting obligations and for reporting ongoing financi

activity.

TERMINATING REPORTING

OBLIGATIONS

Following the 1980 primary elections, many candida

committees may wish to terminate their reporting oblig

tions under the Act. The explanation given below outlin

procedures for winding down campaign activity, i.

liquidating campaign debts, using excess campaign fun

and terminating committee registration (and thus reporti

obligations). All citations refer to FEC Regulations..

RECEIVING CONTRIBUTIONS AFTER

THE PRI~ARY TO RETIRE CAMPAIGN DEBTS

Committees authorized by defeated primary electi

candidates (not entered in a subsequent general electio

may receive contributions after the primary election 

retire a prlrnarv debt provided that:

1. The contributions do not exceed the net outstandi

debts from the primary;

2. Each such contribution is specifically designated by t

donor to retire the primary debt; and

3. Such contributions are regarded as contributions for t

primary and, when added to any other primary electi

contributions from the same donor, fall within t

donor's primary election contribution limit. 11 CF 

110.1 (a) 12)(i).

FORGIVING DEBTS

6/3

6124

7/2

George Washington University

Seminar on Political Action Committees

Washington, D.C.

Commissioner Frank P. Reiche

Election Commissioners of New York

Buffalo, New York

Dr. Gary Greenhalgh

National Association of County

Recorders and Clerks

Las Vegas, Nevada

William C. Kimberling

General Rule

If a committee fails to pay a campaign debt in a time

fashion consistent with normal business or trade practic

the debt in effect becornesa contribution made by t

creditor to the committee, unless the creditor has made 

commercially reasonable attempt to collect the debt 

CFR 100.7(a)(4); Contributions made under such circum

stances may violate the Act. For example, all contributio

from corporations, unions, national banks, Governme

contractors or foreign nationals are illegal under the Ac

Or, as another example, continued nonpayment of a de

owed to a person who may lawfully make contributio

may cause the creditor to exceed the Act's $1,000 p

election contributor limit.

The RECORD is published by the Federal Election Commission, 1325 K Street, N.lN., Washington, D.C. 20463. Commissioners are: MaK L. Frledersdori, Chairman; John Warren McGarry, Vice Chairman; Joan D. Aikens; Thomas E.

Harris; Frank P. Reiche; Robert O. Tiernan; J.S. Klmmitt, Secretary of the Senate, Ex Officio; Edmund L. Henshaw;

Jr., Clerk of the House of Representatives, Ex Officio. For more information, call 202/523-4068 or toll-free 800/424-

9~~ .

2
•

•

•

Rules for Corporate Creditors

Debt Treated in Commercially Reasonable Manner. A corpo rate creditor may not forgive debts for less than the

amount owed unless the creditor and debtor have treated

the debt in a commercially reasonable manner. This means

that:

1. Credit was extended "in the ordinary course of business" with terms substantially similar to those granted to

nonpolitical debtors ofsimilar credit risk;

2. The debtor made all reasonable efforts to retire the debt;

and

3. The creditor pursued remedies in a manner similar to

those used to seek payment from nonpolitical debtors.

11 CFR 114.10.

Statement of Settlement. If a debt owed to a corporation

is settled for less than the amount owed and the debtor

wishes to t~rminate reporting status, the corporate creditor

and/or debtor (committee) must file a Statement of Settlement with the FEC for Commission review before the

committee terminates. This Statement must include:

1. The initial terms of credit;

2. The steps the debtor took to extinguish the debt;

3. The remedies pursued by the creditor; and

4. The terms of settlement. 11 CF R 114.10.

Rules for Noncorporate Creditors

Debt Treated in Commercially Reasonable Manner. A noncorporate creditor may demonstrate to the Commission

that it has made a "commercially reasonable attempt" to

collect a debt owed to it by a committee, and thereby settle

the debt without the settlement being considered a contribution, provided that: the credit was extended in connection with providing goods and/or services to a political

committee in the normal course of a business or professional enterprise. (A debt involving only the lending of

money could not, therefore, be forgiven without a. contribution being rnade.)

FEe Review of Debt Settlement. The settlement of any

debt owed to a noncorporate creditor by a committee is

subject to FEC review if either:

1. The amount of the debt forgiven causes the creditor to

exceed contribution limitations (when added to any

other contributions made by the creditor to the same

candidate); or

2. The creditor wishes the entire amount of the forgiveness

to be regarded as a debt settlement (and so notifies the

Commission). rather than as a contribution in-kind.

In either case, a Statement of Settlement similar to that

required when corporate. debts are settled (above) would

have to be submitted to the Commission by the creditor

and/or debtor. (Directive 3, May 10, 1978.)

EXCESS CAMPAIGN FUNDS

Contributions received by the candidate or his/her

committee Which, in the candidate's view, exceed the

amount of funds needed to defray campaign expenditures

may be used for the following purposes:

1. Future election. 11 CF R 110.3(a)(2)(iii) and (ivl.

2. Defrayal of federal officeholder expenses. 11 CFR

113.2(a).

3. Donations to charity. 11 CF R 113.2(b).

3

4. Unlimited contributions to national, state or lo

party committees. 11 CFR 113.2(cl.

5. Repayment of loans made by the candidate to his/

committee. 11 CF R 113.2(d).

6. Any other lawful purpose, except personal use: 11 C

113.2(d).

TERMINATING REPORTING STATUS

Termination by Authorized Committee

An authorized committee may terminate its registrat

(and reporting obligations) only when all its debts a

obligations have been extinguished and after it no lon

intends to receive any contributions or make any expen

tures. A principal campaign committee may terminate o

when it has satisfied these same requirements and when 

the debts of other authorized committees have been ext

guished. 11 CFR 102.3.

Authorized committees, including the principal campa

committee, terminate their reporting status by filing 

Termination Report. It may be filed on FEC Form 3 or 

a written statement containing the same information. 

CFR 102.3(a). The Termination Report must disclose:

1. All receipts and disbursements not previously report

including an accounting of the retirement of all deb

and

2. The disposition of all residual funds.

Administrative Termination by FEC

The Commission, upon its own initiative or upon 

"request of a political committee, may administrativ

terminate a committee's reporting obligations if the co

mittee's financial activity has been minimal during 

previous year. For details on administrative terminati

consult 11 CF R 102.4.

REPORTING ITEMIZED AND

UNITEMIZED CONTRIBUTIONS

Itemized Contributions

Committees must itemize every contribution receiv

from another committee, regardless of amount. In additi

committees must itemize contributions from any per

(such as a' partnership or an individual) who makes a sin

contribution exceeding $200 'or whose total contributio

during the year exceed $200. Thereafter, each additio

contribution from that person must be separately itemiz

Committees must also itemize every loan received, rega

less of amount. If a bank loan has been endorsed or guar

teed, the co~mittee must identify the endorser or guar

tor in a memo entry.

Itemized contribution information, entered on Schedule 

of the reporting form, must include:

1. Identification of the contributor: the contributor's 

name, mailing address, occupation and name of empl

er; and

continu

"The prohibition on using excess funds for personal use does 

apptv to candidates who were Members of Congress on Jsnuarv 

1980.
2. Description of the contribution: the date and amount

of the contribution; whether the contribution was

designated for a primary, general or other election; and

total contributions received from the same contributor

during the year (aggregate year-to-date).

ADVISORY OPINION REQUESTS

Advisory Opinion Requests (AOR's) pose questions 

the application of the Act or Commission Regulations 

specific factual situations described in the AOR. The 

lowing chart Iists recent AO R's with a brief description 

the subject matter, the date the requests were made pub

and the number of pages of each request. The full text 

each 'AOR is available to the public in the Commissio

Office of Public Records.

Unitemized Contributions

The total amount of contributions received from individuals (persons other than political committees and candidates) during the reporting period is reported on the Detailed Summary Page, Line 11 a, Column A, of Forms 3 and

3X. The total amount of contributions not itemized on

Schedu Ie A during the reporting period must be reported as

a memo entry on the line directly below 11a on the Detailed Summary Page of Forms 3 and 3X. This figure will

include contributions from any person whose total contributions have not aggregated in excess of $200 for the year

and have not been itemized on Schedule A. Thus, unitemized contributions listed as a memo entry are added to all

itemized contributions on Schedule A, and the total is

shown on Line 11 a, Column A, of the Detailed Summary

Page.

REPORTING PARTNERSHIP

CONTRIBUTIONS

A partnership is considered a "person" under the Act (2

U.S.C. §431(11)) and may therefore contribute as an

entity. A contribution from a partnership may not exceed

$1,000 per candidate, per election. 11 CF R 110.1 (e)(3). A

contribution from a partnership counts proportionately

against each partner's contribution limit for that election.

The contribution by the partnership may be attributed

to each partner in direct proportion to his/her respective

share of partnership profits; or according to some formula

agreed on by the partners, which conforms with the provisions of 11 C F R 11O.1(e)(2)(i") (il). For example, the XYZ

Partnership, consisting of four partners, contributes $1,000

to Candidate Smith. Each partner is credited with having

made a $250 contribution to Smith and 'may then, on

his/her own, make an additional contribution of up to $750

to Smith.

A political committee must report the receipt of a partnersh ip contribution by including the contribution in total

contributions reported on Line 11 a of Form 3 or 3X.

In addition, if the partnership's contribution exceeds $200

(when combined with all other contributions received from

the same partnership). the committee must also use Schedule A to:

Itemize the contribution (see above); and

Disclose, as a memo entry: 1) each partner's share of the

contribution, if each partner's share exceeds $200 when

com bined with all other contributions from that partner;

and 2) each partner's year-to-date contributions. By

recording this information as a memo entry, the committee avoids counting the partnership contribution

twice.

Date Made

ADR Subject Public

1980-43 Reporting by 1974 candidate 4/21/80

committee with outstanding

debt to candidate.

1980-44 Solicitations by labor organiza- 4/23/80

tion for its separate segregated

fund.

1980-45 Nonpartisan voter registration 4/23/80

activities conducted by

nonprofit organization.

1980-46 Contributions to candidate 4/23/80

solicited by unauthorized

mutttcandidate committee.

1980-47 FECA preemption of state 4/24/80

law on compensation of

campaign workers.

1980-48 Definition of corporation and 4/25/80

cooperative; solicitations by

cooperative association.

1980-49 Candidate's use of campaign 4/28/80

funds for personal expenses.

1980-50 Solicitations for corporation's 4/28/80

separate segregated fund

through orientation meeting.

1980-51 Servicesprovided political 4/30/80

committees by bank employees

during banking hours.

1980-52 Application of contribution 4/30/80

limits to funds received by

independent expenditure

committee.

1980-53 Host committee's distribution 5/2/BO

of tote bags, contributed by

corporation, to delegates

attending major party

convention,

1980-54 Contribution by national bank 5/7/80

to state political action

committee.

No

Pa

4

1980-55 Corporate assistance to nonpartisan voter registration

drives sponsored by state or

local election officials..

5/8/80
Date Made No. of

AOR Subject Public Pages

1980·56 Minor party's receipt of 5/9/80

• retroactive public funding

for Presidential general election.

1980·57 Fundraising by candidate to 5/9/80 14

pay for litigation expenses

related to election,

1980·58 Contribution by national bank 5/13/80 . 3

to state senator's officeholder

expense fund.

1980-59 Member corporation's contri- 5/14/80 2

butlon to administrative fund

of trade association's separate

segregated fund.

1980-60 State party convention as 5/14/80 2

election.

•

•

ADVISORY OPINION

REQUESTS WITHDRAWN

Since May 8, 1980, the following Advisory Opinion

Requests (ADR's) have been withdrawn by their requesters:

AOR 1979-79

- AOR 1980-35

ALTERNATE DISPOSITION OF

ADVISORY OPINION REQUESTS

Since March 14, 1980, the FEC has responded to the

following Advisory Opinion Requests (AOR's) with a letter

issued by the Commission's General Counsel rather than

by issuing an advisory opinion.

AOR 1979-45 (Formation of state senatorial general

election comrnitteets) by National Republican Senatorial

Committee}. The General Counsel informed the requester

in a letter issued March 14, 1980, that the Commission had

failed to approve an advisory opinion by the requisite

four-vote majority. 2 U.S.C. §437c(c).

AOR 1980·13 (Payment of college tuition and salary when

professor is federal candidate). The General Counsel informed the requester in a letter issued May 14, 1980, that

the Commission had failed to approve an advisory opinion

by the requisite four-vote majority. 2 U.S.C. §437c(c).

AOR 1980·24 (Publisher's distribution of handbook to

national party convention delegates). The General Counsel

informed the requester in a letter issued May 9, 1980, that

the Commission had determined that the request did not

qualify for treatment as an ADR under the Act since it did

not include a complete description of all facts relevant to

the specific activity under consideration. 2 U.S.C. §437f

and 11 CFR 112.1 (c).

5

ADVISORY OPINIONS: SUMMARIES

An Advisory Opinion (AO) issued by the Commissi

provides guidance with regard to the specific situati

described in the ADR's. Any qualified person who 

requested an AD and acts in accordance with the opini

will not be subject to any sanctions under the Act. Oth

persons may rely on the opinion if they are involved i

specific activity which is indistinguishable in all mater

aspects from the activity discussed in the AD. Tho

seeking guidance for their own activity, however, shou

consult the full text of an AO and not rely only on t

summary given here.

AO 1980-20: Nonpartisan Voter

Registration Communication

Rexnord, Inc. may use corporate funds to pay for a gene

circulation newspaper advertisement that reads "Ple

Register To Vote" and that includes "Rexnord, In

printed in a lower corner of the ad because:

1. Rexnord's activity involves only a communicat

urging nonpartisan participation - not personal servic

such as driving people to polls, which would requ

joint sponsorship with a nonpartisan organization.

2. The Rexnord advertisement lacks any suggestion t

the reader designate a political party preference wh

registering to vote.

3. The ad does not appeal for political participation 

the part of any identifiable group to assure the w

being of a particular political party.

4. By placing the ad in a general circulation newspap

Rexnord has not tried to determine the political pref

ence of the audience who may read the advertiseme

11 CFR 114.4.

This opinion overrules AO 1979-48, aiso issued to Rexno

Inc. and summarized in the December 1979 issue of 

Record. Chairman Robert O. Tiernan and Commissio

Thomas E. Harris filed a dissenting opinion. Commissio

Frank P. Reiche filed a concurring opinion. (Date issu

May 1, 1980; Length: 10 pages, including disserrtinq a

concurring opinions.]

AO 1980-21: Donation of Baseball Tickets to Hoot

Committee of National Party Committee

The New York Yankee Baseball Club may donate tickets 

the Host Committee of the National Democratic Conv

tion for free distribution to convention delegates. T

tickets will not be considered a prohibited corporate c

tribution by the Yankee 8all Club to the Host Committ

11 CFR 114.1(a)(2)(viii). Nor will the tickets be conside

a convention expenditure. 11 CF R 9008.7 (d)(4).

The Yankee Ball Club's donation of tickets is conside

a permissible in-kind contribution to the Host Commit

since the free distribution of tickets will assist the H

Committee in welcoming convention delegates to N

York City. 11 CFR 9008.7 (d)(2). (Date Issued: April 

1980; Length: 2 pages)

AD 1980-22: Corporate Sponsorship

of Town Meetings

Costs incurred by the American Iron and Steel Instit

(an incorporated trade association) and its member co

continu
parties in sponsoring a series of town meetings in which

federal officeholders (who may be candidates) participate

would not constitute either contributions or expenditures

under the Act.

Since the purpose of the town rneetinqs is to provide a

forum for discussion of issues facing the steel industry,

and not to nominate or elect candidates to federal office,

Senators and Congressmen may participate in meetings held

in their state or district provided:

1. All remarks, including pre-meeting publicity, are restricted to steel industry issues and do not include any

statements expressly advocating the election or defeat of

any federa Icand idate; and

2. Campaign contributions are neither solicited to nor

accepted by the federal officeholders at the event.

(Date Issued: April 15,1980; Length: 2 pagesI

AO 1980-23: Name of Separate

Segregated Fund

The Agricultural and Dairy Education Political Trust

(ADEPT), a separate segregated fund, must modify its

official name to include the full name of its connected

organization, the Mid-America Dairymen, Inc., as required

by the 1979 Amendments to the Act. 2 U.S.C. §432(e).

On documents such as checks and letterhead, however,

ADEPT may use an abbreviated title consisting of a prefix

before its current name, as long as the abbreviated title

makes clear to the public who sponsors the separate segregated fund. "Mid-Am Dairymen" or "Mid-America Dairymen," two suggestions offered by ADEPT, would be adequate; "Mid-Am" or "Mid-America" would not be sufficiently recognizable by the public.

Its official name and the abbreviation must appear on an

amended Statement of Organization, on all disclosure

reports required under the Act, and on any sponsorship

notices required under 2 U.S.C. §441d. 2 U.S.C. §433(c).

(Date Issued: April 14,1980; Length: 2 pages)

AO 1980-25: Authorization Notice on

Candidate's Issue Letter

Mr. Jack Smilowitz, a Congressional candidate, is not

required to include an authorization notice on a letter he

intends to distribute to the public, in which he opposes a

California ballot initiative. Although Mr. Smilowitz's

proposed letter identifies him as a candidate and gives his

party affiliation, an authorization notice is not required

because the letter does not expressly advocate his election

or solicit contributions to his campaign committee. 2

U.S.C. §441d. Costs incurred in writing, photocopying, and

distributing the letter are reportable as expenditures by his

campaign committee. 2 U.S.C. §434Ib)(41. (Date Issued:

April 20, 1980; Length: 2 pages)

AO 1980-26: Contributions by

Government Contractor

The Stenholm for Congress Committee (the Committee)

may retain contributions from an individual who is not a

government contractor but who contracts with businesses

which are under contract to the federal government.

Commission Regulations specifically state that the Act's

ban on contributions by government contractors does not

6

apply to this type of situation. 11 CFR 115. t (d]. (Da

Issued: April 20, 1980; Length: 2 pages)

AO 1980-27: Earmarking Portion of Membership Dues

For Separate Segregated Fund

The Federation of American Hospitals (FAH), an incorp

rated trade association, may not solicit contributions to 

separate segregated fund (FedPac) by allowing individu

members to direct a fixed percentage of their membersh

dues to FedPac without increasing the total amount of the

dues.

The portion of dues earmarked for FedPac would not b

personal contributions from members but, rather, would b

corporate money diverted to FedPac by the member

designation. Since corporate funds thus allocated to FedPa

would be used in connection with federal elections, FAH

proposed solicitation procedure is prohibited under 

U.S.C. §441b(al. (Date Issued: April 28, 1980; Length: 

pages)

AO 1980-28: Party Ad Promoting

Delegate Selections

A payment made by the Republican Committee of Chest

County (the Committee) for newspaper advertising whic

advocates the selection of specific delegates to attend th

Republican National Convention, and which may al

include an endorsement of the delegates by a Congression

candidate, would be an "expenditure" by the Committe

since the purpose of the advertising is to influence a feder

election. 2 U.S.C. §431(9)(A)(i!. The Act specificall

defines a federal election to include a "primary electio

held for the selection of delegates to a national nominatin

convention of a political party." 2 U.S.C. §431(1)(C). Th

Committee would report payments for the proposed new

paper advertising as follows:

Endorsement of Delegates by the Committee Only. lf th

advertising exceeded $1,000 (or exceeded $1,000 whe

combined with other contributions and expenditures mad

for federal elections during 1980), the Committee woul

have to register as a political committee and report th

expenditure. 2 U.S.C. § §433 and 434.

Endorsement of Delegates by the Committee and a Co

gressional Candidate. If the newspaper advertising al

included an endorsement of the delegates by a Member 

Congress who is a candidate for re-election, the Committe

would not have to allocate the costs of the advertisin

between the Congressional candidate and the delegate

unless the purpose of the advertisement was also to infl

ence the re-election of the Member of Congress. If th

advertising did reflect an intent to influence the re-electio

of the Congressional candidate, an in-kind contribution t

the candidate by the Committee would result. In th

event, the candidate's campaign committee would have t

report the advertising as both an in-kind contribution t

and an expenditure by, the campaign committee and wou

have to comply with the allocation regulations. 11 CF 

106.1. (Date Issued: April 14, 1980; Length: 4 pages)

continue
•

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AO 1980-29: Use of

Campaign Funds

Congressman Norman O. Shumway may use his campaign

funds to pay for his expenses as a delegate to the National

Republican Nominating Convention. The Commission has

stated in previous opinions that candidates and their

committees have wide discretion in deciding how to spend

campaign funds.

If campaign funds are used to defray his convention expenses, the Congressman's campaign committee must

report those payments as an "expenditure" if the purpose

of the payment is to influence Mr. Shumway's election. If

the payment is made for some other purpose, the committee must nevertheless report it as a general disbursement. 11

CFR 104.3(b)(4)(i) and (iii. (Date Issued: April 28, 1980;

Length: 2 pages)

AO 1980-36: Preemption of

State Law

The Ruth Miller for Congress Committee does not have to

comply with an Ohio statute requiring campaign advertisements to disclose the name and address of the secretary or

chairman of the committee responsible for the communication. Since the Act and Reguiations supercede and preempt

state law with respect to disclosure required in conducting

campaigns for federal office (2 U.S,C. §453l. the advertising notice requirements of §441d, which do not require the

name or address of the sponsoring individual, supercede the

Ohio statute, (Date Issued: April 28, 1980; Length: 2

pages)

COMPLIANCE

FEC PUBLISHES NAMES

OF NONFILERS

From April 1 through May 2, 1980, the Federal Election

Commission published three separate listings of nonfilers

who failed to file campaign finance reports required by

the Federal Election Campaign Act.

. Pre-Primary Reports

On April 18 and May 2: 1980, the Commission published the names of three authorized campaign committees

which had failed to file their pre-primary reports for either

the Pennsylvania Congressional elections or the Indiana

primary.

Quarterly Reports

On May 1, 1980, the Commission published a list of nine

committees authorized by 1980 House and Senate candidates and one committee authorized by a Presidential

candidate which had failed to file their quarterly reports.

7

THE LAW

IN THE COURTS

SUPREME COURT UPHOLDS

CONSTITUTIONALITY OF

PUBLIC FUNDING PROVISIONS

On April 14, 1980, the U.S. Supreme Court unanimo

ly affirmed decisions by a three-judge court of the U

District Court for the Southern District of New York a

the en banc United States Court of Appeals for the Seco

Circuit upholding the constitutionality of the President

Election Campaign Fund Act challenged in Republic

National Committee, et al. v. Federal Election Commissio

et al., originally fiied on June 16, 1980. The Court a

denied a petition for certloreri seeking review of the su

dismissal by a single district judge. The RNC's appeals a

petition for certiorari, filed with the Supreme Court 

March 7, 1980, sought review of the rulings by the th

lower courts that the following provisions of the pub

financing law were constitutional:

Presidential candidates of a major party must agree 

to make qualified campaign expenses in excess of 

amount of public funds they receive; and

candidates must certify that neither they nor any 

their authorized committees will accept private con

butions to defray qualified campaign expenses incur

during the general election, except to the extent nec

sary to make up any deficiency in public funds.

In its motion to affirm the decisions of the lower cou

and its opposition to the certiorari petition, filed with 

Supreme Court on March 24, 1980, the Commission argu

that, by seeking the right to raise private money in addit

to public funds, the RNC sought to "transform what C

gress designed as an optional alternative to private fund

of Presidential campaigns into a $29.4 million subsidy."

For a detailed summary of the suit, see the February 19

issue of the FEC Record.

COURT GRANTS FEC MOTION

FOR SUMMARY JUDGMENT

IN NRWCSUIT

On August 31, 1979, the Federal Election Comm

sion and the National Right to Work Committee (NRW

filed cross motions for summary judgment in the cons

dated cases of Federal Election Commission v, Nation

Right to Work Committee, et el., Civil Action No. 77-21

and National Right to Work ·Committee, et et. v. Fede

Election Commission, et st., Civil Action No. 78-03

(D.D.C.). On April 24, 1980, the United States Dist

Court for the District of Columbia granted the Fede

Election Commission's motion for summary judgme

denied the National Right to Work Committee's and 

Employee Rights Campaign Committee's (ERCC's) cr

motion for summary- judgment, and dismissed with pre

dice the complaint filed against the Commission by NRW

and ERCC, the separate segregated fund of NRWC.

continu
The case concerned a solicitation of funds to ERCC,wh~..'

ERCC and NRWC had conducted through several mass ''-:

mailings sent in 1976. Approximately 276,123 persons had

been solicited, raising $77,616.87 for ERCC. In its original

suit, the FEC had aileged that NRWC and ERCC had

violated 2 U.S.C. §441 btb] (4)(C) by soliciting funds from

persons who were not members of NRWC. In its counterclaim against the Commission, NRWC and ERCC had

argued that the funds were obtained by a solicitation

method permitted by 2 U.S.C. §441b(b)(4)(C) since

NRWC was a corporation without capital stock and those

persons sollctted were members of NRWC. In addition,

NRWC had challenged the constitutionality of several

provisions of the Federal Election Campaign Act.

The Court held that NRWC and ERCC had knowingly and

willfully violated 2 U.S.C. §441 b by soliciting funds

to ERCC from persons other than members of NRWC. The

Court also upheld the constitutionality of 2 U.S.C. §441b,

as well as the Act's limitations on corporate solicitation of

funds to a separate segregated fund, finding that those

pertinent sections of the Act did not abridge First Amendment rights of free speech and association. Finally, the

Court found the statutory terms "members:' "solicitation," and "corporation without capital stock" not to be

unconstitutionally vague in violation of the First Amendment, as had been alleged by NRWC and ERCC.

Specifically, the Court found that NRWC supporters

possessed none of the basic criteria of membership in an

organization. NRWC's articles of incorporation explicitly

stated that NRWC "shall not have members," and the

actual structure and operation of the organization precluded the contributors from being defined as "members"

of the organization.

In finding that NRWC and ERCC had knowingly and

willfully violated the law, the Court:

Enjoined NRWC and ERCC from making further solicitations for contributions from persons other than those

prescribed by the membership exception set forth in 2

U.S.C. §441b(b)(4)(A)(i);

Ordered NRWC and ERCC to refund the $77,616.87

in contributions received through the solicitations in

question; and required that the refund include a copy of

the Court's judgment and order and a notice stating

unequivocally that the refund was being made pursuant

to the Court's order to remedy NRWC's and ERCC's

violations of the Act;

Imposed a civil penalty of $10,000 on NRWC and

ERCC, payable within ten days of the Court's ruling;

and

Awarded the Commission its costs.

FEC v. JEFFREY BELL

On April 14, 1980, the U.S. District Court for 

. District of New Jersey issued a consent judgment agr

to by the Commission and defendant Jeffrey Bell. T

Commission had filed suit on January 21. 1980, alleg

that the defendant had violated 2 U.S.C. §441a(f) 

accepting excessive contributions from his mother Marjo

Bell during his 1978 Senatorial campaign in New Jers

Mr. Bell agreed to pay a civil penalty of $1.500 levied 

the Court.

FEC v. MARJORIE BELL ET AL.

On April 10, 1980, the U.S. District Court for 

District of Columbia issued a consent judgment agreed 

by the Commission and defendants Marjorie Bell, the B

for Senate Committee and its two treasurers, Andrew 

Napolitano and James S. Wagner. The Commission had fi

suit on July 20, 1979, claiming that Marjorie Bell h

violated the contribution limits of 2 U.S.C. § §441a(a)

(A) and 441a(a)(3); and that the Bell Committee and 

two treasurers had violated 2 U.S.C. §441a(f) by knowin

ly accepting excessive contributions, and 2 U.S.C. §434

by failing to report the actual source of the contributio

Marjorie Bell agreed to pay a civil penalty of $500 levied 

the Court. The Bell for Senate Committee agreed to pay 

civil penalty of $4,500 levied against both the Commit

and its officers. The Committee also agreed to ame

reports filed with the Commission to indicate that Marjo

Bell was the actual source of $52,400 reported as lo

from Jeffrey Bell to the Committee.

FEC v. GENE A. WILLIAMSON

On April 16, 1980, the Commission and Gene 

Williamson entered into a consent decree approved bvt

U.S. District Court for the Eastern District of Michig

Southern District. In its suit filed against the defendant 

October 24, 1978, the Commission had alleged that M

Williamson had violated 2 U.S.C. §441f by permitt

another person to make a political contribution in 

name. The defendant agreed to pay a civil penalty of $5

assessed by the Court. The Commission agreed not to ta

any further action against the defendant with regard to t

violation or to recommend that any other federal or st

agency take action against the defendant.

LITIGATION STATUS INFORMATION

The following is a list of new litigation involving t

Commission, together with the date the suit was filed, t

court involved, the docket number a.{ld a brief descripti

of the major issuels) involved in the case. Persons seeki

additional information on a particular case should conta

the court where the suit is filed or the Commission.

8

FEe v. James H. Dennis, Sr., U.S, District Court for t

District of Columbia, Docket No, 80-1086, May 1, 1980.

FEC alleges that James H. Dennis, Sr., violated

the requirements of a conciliation agreement he

entered into with the Commission pursuant to 

2 U.S.C. §437g(a)(5) and (7) when he failed to

pay $18,000 in civil penalties required by the

agreement.
.e

COMMISSION APPR,OVES REVISED

INVITATION POLICY

On May 1, 1980, the Cornrn lssion approved a revised

policy for accepting invitations to address public gatherings

on campaign finance laws and the Commission itself.

Under the revised policy (FEC Directive No. 30), Commissioners and staff may accept travel and subsistence payments from nonprofit organizations exempt from taxation

under 26 U.S.C. §501 (c)(3) or from the treasuries of state,

county and municipal governments to attend meetings

sponsored by these organizations.

FEC REPORTS TO CONGRESS

ON 1979 FOIA ACTIVITIES

On April 10, 1980, the Commission submitted to·

Congress its annual report on activities performed in

compliance with the Freedom of Information Act (FOIA).

The report noted that the Commission processed 81 FOIA

requests during 1979, a sharp increase over the 36 requests

processed during 1978. Of these requests, only nine were

denied ·while seven were partially filled. Of four FOIA

appeals filed with the Commission, two were denied, one

was partially granted and one was rendered moot.

The report also noted a problem area in processing FOIA

requests. Specifically, the Commission is currently requ ired

to process FOIA requests for information ·~rready made ..

available to the public through the FEe's 'statutorily

mandated disclosu re programs as well as other FEC information programs. To prevent this duplication of information services, and reduce research and copying Costs incurred in filling FOIA requests, the report recommended

amendments to the Freedom of Information Act which

would exempt from its disclosure requirements documents

already available to the public under other statutes or

programs.

SELECTED BIBLIOGRAPHY

OF CAMPAIGN FINANCE

LAWS AVAILABLE

During May 1980, the FEC'~ Library issued a Campaign

Finance and Federal Elections Bibliography. The Bibliography, which will be updated biannually, provides a selected, annotated compilation of publications issued from

January ·1977 through April 1980. Documents are listed

according to four information categories:

Part I: Documents pertaining to the 1979 Amendments

to the Federal Election Carnpaiqn- Act (Pub. L.

96·187);

Part II: Books, monographs and treatises;

Part III: Manuals, guidebooks, reference services and search

tools; and

Part IV: Law review articles and articles from business,

political science and general periodical indexes.

9

Copies of the Campaign Finance and Federal Elections Bib

liography are available for review and copying in the FEC

Public Records Office. Requests for the Bibliograph

should be accompanied by a money order or check fo

$.80, payable to the U.S. Treasury, and sent to the FEC

Public Records Office.

Federal Register

Notice Title Publication·Date Citation

1980·'6 Rulemaking Petition; 4/21/80 45 FR 2681

Notice of Availability

[Requested by the

Democratic National

Committee and the

Democratic Senatorial

Campaign Committee to

require specified notice

on all solicitations for

contributions by political

committees conducting

negative campaignsl

1980-17 11 CFA Part 110 4/23/00 45 FR 2743

Amendments to Federal

Election Campaign Act

of 1971; Correction

(Reflects deletion of 11

.. CFA 110.7 (b)(5) from

the 1979 Amendments]

1980-18 11 CFR Part 4 5/13/80 45 FR 3129

Public Records and the

Freedom of Information

Act (Final rule)

1980-19 11 CFA Part 5 5/13/80 45FR3129

Access to Public

Disclosure Division

Documents (Final rule)

19BO·20 11 CFR, Subchapter E, 5/15/80 45 FR 3200

Parts 9001-9007, 9009

Presidential Election

Campaign Fund: General

Election Financing (Notice

of proposed rulernakinq]

1980-21 11 CFA, Parts 100 and 5/23/80 45 FR 3486

110 Contributions to

and Expenditures by

Delegates to National

Nominating Conventions

(Transmittal ofre!:lulations

to Congress)
AUDITS RELEASED

TO THE PUBLIC

The Federal Election Campaign Act, as amended (t

Act) requires candidates and political committees to f

financial disclosure reports with the Commission. The A

also gives the Commission authority to audit campaigns 

all Presidential candidates who receive public funds, a

the reports of other political committees, Final au

reports are available to the press through the Press Off

and to the general public through the Office of Pub

Records. The following is a chronological listing of aud

released between' April 10, 1980, and May 5, 1980:

CLEARINGHOUSE CONDUCTS

WORKSHOPS AT IIMC CONVENTION

The F EC's Clearinghouse on Election Administration

recently conducted two workshops on federal election

responsibllities in conju netion with the annual meeting

of the International Institute of Municipal Clerks (IIMC)

held May 21-22 in Toronto, Canada. Dr. Gary Greenhalgh,

Director of the Clearinghouse and Assistant Staff Director

for Information, led each of the following workshops with

the assistance of th ree election administrators:

Workshop on Voting Systems and Equipment - discussed

available voting systems and the new Voting Equipment

Standards Study required by the 1979 Amendments to the

Federal Election Campaign Act.

Workshop on Absentee Registration and Voting - focused

on the mechanics of absentee voting with an emphasis on

the Overseas Voting Rights Act and the special "Presidential ballot" section of the Voting Rights Act of 1975.

These workshops were also conducted at the Clearinghouse's five regional seminars held during 1979 and in

January 1980.

Audit

Independence Club Political Committee

Democratic Finance Committee

New York State Voter Registration Drive

California Dental Political Action

Committee

Democratic Campaign Committee

Citizens for the Republic

McCarthy '76 CA

Date Made

Public

4/10/80

4/10/80

4/10/80

4/10/80

5/5/80

5/5/80

5/5/80

FEDERAL ELECTION COMMISSION

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WASHINGTON, DC 20463

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