:

13

though Congress has expressly limited other provisions
in the Act to communications containing “express advo-
cacy,” 8 it has never altered section 441b’s statement that
it applies to all expenditures that are “in connection with”
a federal election. This striking difference in statutory
language cannot be presumed to be accidental. Russello v.
United States, 464 U.S. 16, 23 (1983).

The statute’s structure and legislative history confirm
that section 441b was not intended to be limited to ex-
penditures for express advocacy.* In particular, the 1947
debate over extending the statutory prohibition to cover
“expenditures” clearly indicates that use of candidates’
positions on issues in a partisan election distribution was
intended to be prohibited. Indeed, Senator Taft expressly
addressed the question:

Mr. PEPPER. I wish to ask the Senator from
Ohio whether he agrees . . . that if a labor organiza-
tion used its funds to disseminate the voting record
of a candidate for office, during the time of the
campaign, that would not be unlawful... .

Mr. TAFT. I think it would depend upon all the
circumstances in the case. If it was merely a bare
statement of actual facts and simply direct quota-
tions of what the man had said in the course of
certain speeches on certain subjects, and was not
colored in any way, I would rather agree... . But
I think it would depend, in each case, on the char-
acter of the publication.

18 2 U.S.C. §§ 431 (9) (B) (iii), 431(17), 441d (a). a

14 The plain language of section 441b establishes, for example,
that a corporation’s partisan get-out-the-vote campaign limited to
members of the public listed as registered with one party, would
be a prohibited corporate expenditure regardless of whether any
candidate’s election or defeat is expressly advocated in the process.
See 2 U.S.C. §§ 441b(b) (2) (B), 481(9) (B) (ii). See also 117
Cong. Rec. 48,380-381, 1971 Leg. Hist. at 758-59 (remarks of Rep.
Hansen) ; 117 Cong. Rec. 43,382, 1971 Leg. Hist. at 760 (colloquy
between Reps. Anderson and Hansen).


34

their separate segregated funds to amplify the voices of
their supporters in the electoral realm.

The alternative arrived at by the court of appeals and
defended by MCFL is far more intrusive than the
statute enacted by Congress. By exempting “ideological”
corporations from the Act, the court of appeals’ decision
would require the Commission and the courts to investi-
gate the political views and activities of an organization
in order to determine, under some as yet undefined test,
whether the corporation is truly “ideological.” This
would require, at least, investigation of the names and
interests of the organization’s supporters and contributors
to determine whether an ideological facade conceals an
actual economic special interest. See FEC Brief at 35-36.
Such an investigation would run counter to first amend-
ment values, and an evaluation by the Commission or the
courts of whether an organization’s views are “ideologi-
cal” or economic—assuming such a distinction can re-
liably be drawn—even more so. See, e.g., NAACP v.
Alabama, 357 U.S. at 459-62; Jones v. Unknown Agents
of the Federal Election Commission, 618 F.2d 864, 878-
80 (D.C. Cir. 1979), cert. denied, 444 U.S. 1074 (1980),
cited in Committee to Elect Lyndon LaRouche v. FEC,
613 F.2d 834, 848 n.23 (D.C. Cir. 1979), cert. denied,
444 U.S. 1074 (1980). The legislation enacted by Con-
gress avoids this difficult and intrusive inquiry alto-
gether, and does so without limiting corporate or union
political speech.


30

constitutionally valid regardless of the size or wealth of.
the particular corporation involved. Moreover, the Court
in that case found the purposes behind the statute to be
fully applicable to a nonprofit, ideological corporation
whose treasury was also accumulated through contribu-
tions from supporters rather than business transactions.
It. is too late to rely upon such circumstances to escape
application of section 441b.**

Finally, the fact that MCFL’s adherents may not cur-
rently contribute large amounts to the corporation does
not diminish Congress’ important interest in safeguard-
ing their right to make only “knowing free-choice dona-
tions” *° to support MCFL’s election expenditures. See
Chicago Teachers Union, Local No. 1 v. Hudson, 106
S. Ct. 1066, 1075 (1986) 7

%5In fact, nonprofit corporations can and do accumulate sub-
stantial wealth. For example, amicus Chamber of Commerce states
(Br. 1) that it has thousands of corporate members whose dues
make up its treasury, and reports filed with the Commission by
amicus National Rifle Association show that it spent more than
1.4 million dollars through its separate segregated fund during the
1983-84 election cycle—including more independent expenditures
than any other corporate or union fund. FEC Reports on Financial
Activity 1983-1984, Vol. IV, p. 858 (May 1985) ; FEC Press Release,
“FEC Reports 1983-1984 Independent Spending Activity” (Oct. 4,
1985) at p. 3.

86 Pipefitters v. United States, 407 U.S. at 414 (“the test of
voluntariness under § 610 focuses on whether the contributions
solicited for political use are knowing free-choice donations”) ; id.
at 417 (“the only requirements for permissible political organiza-
tions were that they be funded through separate contributions and
that they be recognized by the donors as political organizations to
which they could refuse support.”).

87MCFL suggests (Br. 42-43 n.28) that section 441b is under-
inclusive because Congress has not included lobbying expenditures
in that statute and because noncorporate business entities are not
covered. The first point is simply wrong, for Congress has not left
lobbying unregulated, but has simply decided that “[llobbying is
a separate field which has traditionally been, and should continue
to be, regulated separately.” 117 Cong. Rec. 43,380 (1971) (re-


ee |

7

This analysis of the language of the 1971 Act as a
whole is supported by the recognized canons of statutory
construction, and is entitled to deference under the prin-
ciples discussed on pp. 1-2, supra. As fully discussed by
the court below (J.S. App. 8a), it has long been recog-
nized that Congress’ use of the term “includes,” as it
did in the language relied upon by MCFL, does not evi-
dence an intention to restrict the provision’s reach, par-
ticularly when Congress defines what other terms in the
statute shall “mean,” as it did with the other definitions
in section 441b.5 See, e.g., Herb’s Welding, Inc. v. Gray,
105 S. Ct. 1421, 1427 (1985); Federal Land Bank of
St. Paul v. Bismarck Lumber Co., 314 U.S. 95, 99-100
(1941); United States v. Massachusetts Bay Transp.
Authority, 614 F.2d 27, 28 (1st Cir. 1980). The prin-
ciple that statutes should be construed to give effect
to all the words enacted by Congress, relied upon by
MCFL (Br. 11-12), also supports the Commission’s con-
struction. If the description of what expenditure “shall
include” added to section 610 in 1971 were an exclusive
definition, the explicit language Congress added to sec-
tion 591 in 1971 making that section’s definition of what

expenditure “means” applicable to section 610, would be
nullified.*

5 See, e.g., 2 U.S.C. §§ 441b(b) (1), 441b(b) (7).

®In 1974, Congress added a number of new exceptions to the
general definition of “expenditure” in 18 U.S.C. §591. See Pub.
L. No, 93-443, 88 Stat. 1263, 1270-71 (1974). It also clarified that
the general definition was not to override the specific exclusions
from that term that had been incorporated into 18 U.S.C. § 610 in
1971, by specifying that the general definitions in section 591 were
applicable, inter alia, to section 610 “[e]xcept as otherwise spe-
cifically provided.” 88 Stat. 1268. At the same time, a similar
provision was added to the definition of expenditure in the FECA,
which is now codified at 2 U.S.C. § 481(9) (B) (v). See 88 Stat.
1274, It is clear that this alteration was not intended to render
the section 431(9) definition of expenditure inapplicable to section
441b, as MCFL asserts (Br. 10), for in 1976, when Congress moved:
the prohibition from the criminal code to Title 2, the conference


i
4
4

= =

17

sort were excluded from section 441b there would be little
left subject to its provisions.”°

C. MCFL has argued (Br. 18-28) that the MCFL
newsletters were periodical publications exempt from the
definition of expenditure under 2 U.S.C. § 481(9) (B) (i),
and that the Special Election Editions at issue here were
also exempt because they were merely issues of that news-
letter. As the court of appeals found (J.S. App. 18a),

advocacy directed to members and stockholders, but explicitly
excluded “a communication primarily devoted to subjects other
than the express advocacy of the election or defeat of a clearly
identified candidate.” See FEC v. American Federation of State,
County and Municipal Employees, 471 F. Supp. 815 (D.D.C. 1979).
Congress’ failure to add such an exception to section 441b clearly
indicates that section 441b was meant to cover such communica-
tions. See Russello v. United States, 464 U.S. at 23-24,

20 MCFL has submitted to this Court in its supplemental appendix

a number of publications of other organizations to show that pro- °

hibiting dissemination of congressional voting records would have

broad effect. Several amici make the same argument, asserting |

that they also distribute candidate voting records. However, as
discussed above, the Act permits a corporation or union to dis-
tribute any communication to its stockholders or members. 2 U.S.C.
§§ 431 (9) (B) (iii), 441b(b) (2) (A); 11 C.F.R. § 114.8. Thus, any
of these groups—including MCFL—can distribute election ad-
vocacy to their own members without running afoul of the Act.
Moreover, the Commission has, as we have shown supra, p. 14
n,16, construed the Act to permit corporations to spend corporate
funds to distribute candidates’ positions on issues to the public
as well, so long as they are presented in the nonpartisan manner
described in 11 C.F.R. § 114.4(b) (4) and (5), as amici indicate
they would. See Chamber of Commerce Brief at 5, 14 n.8; American
Civil Liberties Union Brief at 3 n.1. Finally, it is clear, at a
minimum, that none of the publications submitted by MCFL or
described by the amici contain anything approaching the explicit
advocacy of an election result that was distributed to the public
by MCFL. Thus, none of those publications could be affected by
affirming the application of section 441b to this case.

21 Of course, this argument is inconsistent with MCFL’s argu-
ment that section 431(9) is entirely inapplicable to section 441b.
See p. 8, supra.


35

CONCLUSION

For the foregoing reasons, as well as those set forth
in our opening brief, the decision of the court of appeals
that 2 U.S.C. § 441b is unconstitutional as applied to un-
coordinated expenditures of nonprofit corporations should

be reversed.

* Counsel of Record
SEPTEMBER 30, 1986

Respectfully submitted,

CHARLES N, STEELE *
General Counsel

RICHARD B. BADER
Assistant General Counsel
CAROL A. LAHAM
Attorney
Attorneys for
FEDERAL ELECTION COMMISSION
999 E Street, N.W.
Washington, D.C. 20463
(202) 876-8200

Yu. 8, GOVERNMENT PRINTING OFFICE) 1986 185218 42003


iv

Cases—Continued Page
United States v. UAW, 352 U.S. 567 (1957) ...........passim
United States v. United States Brewers’ Ass’n,

239 F. 163 (W.D. Pa. 1916)... 26

Village of Schaumburg v. Citizens for a Better

Environment, 444 U.S. 620 (1980: 28
Watt v. Alaska, 451 U.S. 259 (1981)... . 5,12
Young v. Community Nutrition Inst., 106 S. Ct.
2360 (1986) ...... oe 2
United States Constitution
First Amendment 2.0.0.2... cscs sceececeeeeeeece estes POSSIM
Statutes and Regulations
2 ULS.C. § 481 (4) (8) enn eeene ence ecececeecceeeeceneececnecenes 32

431 (9)...
431(9) (B) (
431 (9) (B) (ii)
431 (9) (B) (iii)
481 (9) (B) (v)

441b(b) (1) 1
441b(b) (2) 5,8
441b(b) (2) (A). 17, 23
441b(b) (2) (B) 13
441b(b) (2) (C).

441b(b) (7)

441d (a)...

A4lf
former 18 U.S.C. § 591(f)

former 18 U.S.C. § 610 (amended and codified in
1976) ........



28

corporate “solicitation for direct contributions to candi-
dates” rather than independent expenditures to communi-
cate with the public. In fact, what was at issue in Na-
tional Right to Work Committee was a provision of the
statute that completely prohibits corporations from com-
municating independently with sympathetic members of
the public to solicit contributions to the corporation’s own
political committee, not to candidates. There was no
allegation that the solicitations distributed to the ‘public
by the National Right to Work Committee were co-
ordinated with any candidate, and there was no evidence
that the money collected was not used for independent
expenditures as well as contributions to candidates.

The fact that the independent communications pro-
hibited in National Right to Work Committee contained
solicitations for contributions does not lower the standard
of constitutional review. To the contrary, this Court has
repeatedly invalidated other statutory restrictions on the
solicitation of contributions under the first amendment
because “solicitation is characteristically intertwined
with informative and perhaps persuasive speech seek-
ing support for particular causes or for particular
views on economic, political, or social issues, and .. .
without solicitation the flow of such information and
advocacy would likely cease.” Village of Schaumburg v.
Citizens for a Better Environment, 444 U.S. 620, 632
(1980). Accord, e.g., Secretary of State of Maryland v.
Joseph H. Munson Co., 467 U.S. 947, 959-60 (1984);
Heffron v. International Society for Krishna Conscious-
ness, 452 U.S. 640, 647 (1981).% Thus, the statutory
purposes found compelling enough to justify complete
prohibition of the independent public solicitations of the
ideological corporation in National Right to Work Com-
mittee cannot be dismissed as inadequate to support the

%3In fact MCFL’s special election flyer included a solicitation
for contributions to support further election advocacy (R., Vol. I,
Pl. 16, Ex. A, p. 8).


14

93 Cong. Rec. 6447, 1947 Leg. Hist. at 1548. See also
93 Cong. Rec. 6447, 1947 Leg. Hist. at 1546 (colloquy
between Sens. Taft and Ball). This distinction was
adopted by the courts’ and has been incorporated into
the Commission’s regulations, 11 C.F.R. § 114.4(b) (4)
and (5).° Even MCFL has not been able to mount a
serious argument that its special election leaflet satisfies
this test, and it has identified nothing in the statute or
legislative history that would suffice, under the principles

15 United States v. Lewis Food Co., 366 F.2d at 712 (“The
‘Notice to Voters’ also makes it plain that, in Lewis’ opinion, those
office holders given low ratings on their votes ‘in favor of con-
stitutional principles’ should not be re-elected.”). See also United
States v. UAW, 352 U.S. at 592 (distinguishing between “active
electioneering” and merely “stat[ing] the record of particular
candidates on economic issues”).

18 MCFL argues (Br. 15 n.10) that the Commission’s view of
section 441b’s application to distribution of candidate positions
on issues has been “woefully inconsistent” and that “this case is
a hangover from earlier [more restrictive] views.” The facts dis-
cussed in the text, however, establish that MCFL’s distribution
in this case would be unlawful under the Commission’s current regu-
lations as well as its earlier advisory opinions. Thus, even if there
had been earlier inconsistencies in the Commission’s application
of the Act in other circumstances, they would make no difference
on the facts of this case.

In any event, the Commission’s treatment of this issue has not
been marked by any erratic changes that could fairly be character-
ized, as MCFL does, as “inconsistent” or “flip-flop[s].” The Com-
mission grappled with several factual scenarios implicating the
problem of corporate distribution of candidate positions on issues
in early advisory opinions adopted by divided votes. See AO 1978-
18, 1 Fed. Election Camp. Fin. Guide (CCH) {[ 5805 (April 4, 1978) ;
AO 1979-48, 1 Fed. Election Camp. Fin. Guide (CCH) {| 5435 (Oct.
31, 1979) ; AO 1980-20, 1 Fed. Election Camp. Fin. Guide (CCH)
[5487 (May 1, 1980). This experience led the Commission to hold
hearings and adopt formal rules, now contained in 11 C.F.R. §114.4
(b) (4) and (5), to delineate factors which determine whether a
corporate or union distribution to the public is nonpartisan. These
regulations are responsive to the concerns underlying section 441b,
and would clearly not permit corporate money to be used for a
partisan distribution to the public like MCFL’s.


20

paper were given away as a political document in
favor of a certain candidate. I think that would
have been so under the present law, and I think we
make it more clearly so, perhaps, by this measure.

* * * * *

Mr. TAFT. ... If the newspaper is prepared and
distributed. and circulated by means of the expendi-
ture of union funds, then how could a line be drawn
between that and political literature or pamphlets
or publications of that nature? It is perfectly easy
for a labor union to publish lawfully a bona fide
newspaper and to charge subscriptions for that news-
paper, either by itself or as a corporation.

* * * * *

Mr. TAFT. I think if the paper is, so to speak,
a going concern, it can take whatever position it
wants to.

98 Cong. Rec. 6437-38, 1947 Leg. Hist. at 1529-30.

In United States v. CIO, 835 U.S. 106 (1948), it was
alleged that election advocacy was contained in an issue
of a weekly periodical called “The CIO News” which was
“distributed in regular course to members or purchas-
ers.” 335 U.S. at 111-112. The Court found this dis-
tribution to be permissible under the statute on the basis
of the legislative history discussed above, but the Court
carefully specified that it did not construe the indictment
to allege that the CIO had “circulat[ed] free copies to
nonsubscribers, nonpurchasers or among citizens not en-
titled to receive copies of ‘The CIO News,’ as members
of the union.” Id. at 111. See also id. at 112 (“[N]o
allegation has been made of expenditures for ‘free’ dis-
tribution of the paper to those not regularly entitled to
receive it”). The Court emphasized that this distinction
was crucial to its decision.

It is one thing to say that trade or labor union
periodicals published regularly for members, stock-
holders or purchasers are allowable under § 313 and


16

win in November without your vote in September
... Thus, your vote in the primary will make the
critical difference in electing pro-life candidates.

(R., Vol. I, Pl. 16, Ex. A, p. 1, first emphasis original,
second emphasis added).* That the flyer advocated the
election of a category of candidates does not make it any
less express, for it carefully listed the name of each can-
didate in each election who was in the category of “pro-
life” candidates for whom the reader was to vote. This
is not materially different from a television commercial
sponsored by the AFL-CIO urging the viewer to “vote
pro-labor” and identifying by name which candidates
have supported the union position and which have not,
or a flyer urging the reader to “vote for liberals” which
specifies which candidates in each electoral race have sup-
ported the liberal position and which have not. Such
communications could also be said to have “an educational
purpose” to “inform readers about the records and posi-
tions of all candidates on critical . . . issues’ (MCFL
Br. 15), and to promote a particular issue as the touch-
stone for voting decisions (MCFL Br. 16). But like
MCFL’s flyer, these hypothetical communications go be-
yond these limited purposes to expressly advocate the
election or defeat of candidates identified by name. This
Court has never suggested that a communication could be
insulated from the Act by including other information
along with the express advocacy of a particular election
result,’® and it is clear that if communications of this

18 This language materially distinguishes this case from FEC
v. Central Long Island Tax Reform Immediately Committee,
616 F.2d 45 (2d Cir. 1980) (en banc), upon which MCFL relies
(Br. 17), for that court found a leaflet contained no express
advocacy because “no mention is made of any particular federal
election, the political affiliation of any congressman, the fact that
he is or is not a candidate for elective office, or the name of any
electoral opponent of any congressman.” Jd. at 49.

19In 2 U.S.C. § 431 (9) (B) (iii), Congress has required corpora-
tions and unions to report expenses in excess of $2000 for express


ilk ie thea nn

trina

29

far less intrusive impact on corporate speech at issue in
this case.

B. MCFL argues that the purposes behind section 441b
are inapplicable here because MCFL is a nonprofit corpo-

ration whose money comes from contributions, and its ....

expenditure was too small to corrupt candidates. How-
ever, this Court in FEC v. National Right to Work Com-
mittee, 459 U.S. at 210, found section 441b to be a per-
missible prophylactic rule aimed at the potential for
abuse inherent in the corporate structure, and found it

%4MCFL relies heavily upon cases striking down actual limita-
tions on independent expenditures, which are not on point because,
as we have shown, section 441b is not such a limitation. However,
most of those cases also involved ballot measure elections, and this
Court has repeatedly emphasized that the rationale for striking
down limitations on corporate expenditures in ballot measure cam-
paigns is not transferrable to candidate elections. See First
National Bank of Boston v. Bellotti, 485 U.S. at 788 n.26
(“[A] corporation’s right to speak on issues of general public
interest implies no comparable right in the quite different context
of participation in a political campaign for election to public
office.”) ; FEC v. National Right to Work Committee, 459 U.S. at
210 n.7; Citizens Against Rent Control v. City of Berkeley, 454
US. at 299 n.6; FCC v. League of Women Voters, 468 U.S. at 372
n.9, MCFL’s reliance upon FEC v. National Conservative Political
Action Committee is also misplaced because the Court there dis-
tinguished National Right to Work Committee as “turn[ing] on
the special treatment historically accorded corporations,” and noted
that NCPAC was “not a ‘corporations’ case because § 9012(f)
applies not just to corporations but to any [political committee].”
105 S, Ct. at 1468. Accord Citizens Against Rent Control v.
City of Berkeley, 454 U.S. at 300 (Rehnquist, J., concurring). In
fact, just a few weeks ago a federal court relied upon this distinc-
tion in upholding a Michigan statute that prohibits corporate ex-
penditures in candidate elections except through a separate segre-
gated fund. Michigan State Chamber of Commerce v. Austin,
No. G85-496, slip op. at 14-15 (W.D.Mich. Sept. 8, 1986) (copies
of this decision have been lodged with the Court). In sum, even
if section 441b were the absolute prohibition of corporate expendi-
tures in candidate elections that MCFL imagines it is, the cases
upon which MCFL relies would still not require its invalidation.


il

That is as it should be. For as I noted at the outset
the basic purpose of section 610 is to prohibit active
electioneering by corporations and unions for Federal
candidates directed at the public at large. There
can be no doubt that this language accomplishes that
end.

[I]t should be noted that this prohibition is the
most far-reaching in the entire election law... .

117 Cong. Rec. 43,380, 1971 Leg. Hist. at 758. Rep. Hays,
chairman of the House Committee which had reported the
bill under debate, agreed that Rep. Hansen’s amendment
“is substantially what is in the law now. Everybody has
lived with it for a long time. I intend to support the
amendment.” 117 Cong. Rec. 43,381, 1971 Leg. Hist. at
759. Finally, during the debate on the conference com-
mittee’s report, Rep. Hansen reiterated that his amend-
ment would not alter the effect of the law as it had orig-
inally been conceived by Senator Taft and construed by
this Court.

I will repeat what I stated several times during the
course of the debate that the purpose and effect of
my amendment is to codify and clarify the existing
law and not to make any substantive changes in
the law.

* * * * *
The Hansen amendment is consistent with the legis-
lative intent expressed by the original author of
section 610, the late Senator Robert Taft of Ohio.

* * * * *

Thus the Hansen amendment does not break new
ground, it merely writes currently accepted prac-
tices into clear and explicit statutory language.

118 Cong. Rec. 328-29 (1972), 1971 Leg. Hist. at 896-
97. In Pipefitters Local Union No. 562 v. United States,
407 US. at 399, 427, this Court agreed that, with one


noo aE

3

plies that the regulations accurately reflect congressional
intent.” Grove City College v. Bell, 465 U.S. 555, 568
(1984). Accord FEC v. Democratic Senatorial Cam-
paign Committee, 454 U.S. at 34-35. As we show below,
both the language of the Act as interpreted by the courts
and the legislative history support the Commission’s con-
struction.

1. As the Commission demonstrated in its opening
brief, pp. 12-18, this Court itself determined long ago
that Congress had broadened the prohibition now con-
tained in 2 U.S.C. § 441b(a) precisely to reach “ ‘an
expenditure [by a corporation or union] of its own funds
to state its position to the world,” United States v.
UAW, 352 U.S. 567, 585 (1957), and that the provision
was intended to apply “ ‘whether or not said expenditures
are with or without the knowledge or consent of the can-
didates.’” Id. at 582, quoting H.R. Rep. No. 2739, 79th
Cong., 2d Sess. 46 (1946). Indeed, this Court reviewed
the requirements for a legally sufficient indictment under
former 18 U.S.C. § 610 (section 441b’s predecessor) in
both United States v. CIO, 385 U.S. 106 (1948) and
United States v. UAW, 352 U.S. 567 (1957), and did not
include coordination with a candidate as a requisite ele-
ment. See also United States v. Lewis Food Co., 366
F.2d 710 (9th Cir. 1966). To the contrary, the Court
specified that “[t]he evil at which Congress has struck”
in this provision “is the use of corporation or union
funds to influence the public at large to vote for a par-
ticular candidate or a particular party.” United States
v. UAW, 352 US. at 589. That is just what MCFL did
in this case.

MCFL does not seriously challenge this Court’s con-
clusion that independent corporate expenditures were
prohibited by the 1947 amendments. Rather, MCFL’s
argument (Br. 10-12) is that in 1971 Congress narrowed
the definition of expenditure in order to remove from the
statute’s prohibition expenditures of corporate and union
treasury funds that are not coordinated with a candidate.


26

At bottom, what this Court has sought to protect in its
cases striking down actual limits on independent political
expenditures by groups is the ability of “large numbers
of individuals of modest means [to] join together in or-
ganizations which serve to ‘amplif[y] the voice of their
adherents.’” FEC v. National Conservative Political Ac-
tion Committee, 105 S. Ct. at 1467, citing Buckley v.
Valeo, 424 U.S. at 22; NAACP v. Alabama, 357 U.S.
449, 460 (1958); Citizens Against Rent Control v. City
of Berkeley, 454 U.S. 290, 295-96 (1981). In contrast
to the statutes in those cases, section 441b clearly does
not infringe this important interest because it permits a
corporation or union to sponsor a separate segregated
fund through which its constituents can join together to
amplify their voices.** MCFL’s complaint (Br. 28) that

1016 (1982), appeal dismissed, cert. denied, 465 U.S. 1092 (1984) ;
California Medical Ass’n v. FEC, 453 U.S. 182, 193-201 (1981) ;
International Ass’n of Machinists v. FEC, 678 F.2d 1092, 1099-
1118 (D.C. Cir.) (en banc), aff'd mem., 459 U.S. 983 (1982);
Bread Political Action Committee v. FEC, 635 F.2d 621, 626-33
(7th Cir. 1980) (en banc), rev’d on other grounds, 455 U.S. 577
(1982); FEC v. National Education Ass’n, 457 F. Supp. 1102,
1109 (D.D.C. 1978); FEC v. Weinsten, 462 F. Supp. 248, 246-49
(S.D.N.Y. 1978); United States v. Clifford, 409 F. Supp. 1070,
1071, 1072 (E.D.N.Y. 1976); United States v. United States
Brewers’ Ass'n, 239 F. 163 (W.D.Pa. 1916).

31In fact, the Act permits corporate separate segregated funds
to perform this function more efficiently than other political
committees, for a corporation can pay its fund’s administrative
and solicitation expenses from the organization’s general treasury,
2 U.S.C. § 441b(b) (2) (C), while other political committees must
use their supporters’ contributions to defray these substantial ex-
penses. This special advantage for separate segregated funds,
which was added to the Act in 1971, see n.10, p. 12, supra was
the subject of complaint during the hearings on the 1979 amend-
ments to the Act, although Congress did nothing to change it.
See Hearing Before the Committee on Rules and Administration,
United States Senate, 96th Cong., 1st Sess. 37-38, 40, 46, 48-53
(1979), reprinted in FEC, Legislative History of the Federal Elec-
tion Campaign Act Amendments of 1979, at 43-44, 46, 52, 54-59
(1983).


23

results could not have been intended by Congress. See
p. 8, supra.

II. SECTION 441b DOES NOT INFRINGE THE RIGHTS
OF CORPORATIONS AND UNIONS TO ENGAGE
IN POLITICAL SPEECH

MCFL continues to base its constitutional argument
upon the false assumption that section 441b is an outright
prohibition of corporate and union political speech, in-
sisting that the statute’s express authorization of cor-
porate and union expenditures through a separate segre-
gated fund, added to the statute in 1971, is of no signifi-
cance.”* However, this Court’s recent decisions in Regan
v. Taxation With Representation, 461 U.S. 540 (1988),
and FCC v. League of Women Voters of California, 468
US. 364 (1984), clearly demonstrate that Congress’ pro-
vision of an alternative method of financing unlimited
corporate and union election speech directed at the public
eliminates any basis for finding that the statute signifi-
cantly abridges first amendment activities.”

In both Regan and League of Women Voters this Court
reviewed statutes making it illegal for certain organiza-
tions receiving direct or indirect government subsidies to
engage in certain kinds of speech.” In both cases, the

26 Thus, MCFL asserts (Br. 23 n.20) that five justices of this
Court have expressed the opinion that section 441b’s predecessor
was unconstitutional. All of those separate opinions were issued
prior to the 1971 amendment permitting corporations to communi-
cate with the public through separate segregated funds, and all
were based upon a construction of the statute that would not have
permitted them to do so.

27 Of course, the Act specifically permits unlimited corporate and
union communication with their own members. 2 U.S.C. §§ 431
(9) (B) (iii), 441b (b) (2) (A).

28In Regan, most corporations exempt from taxation under 26
U.S.C. §501(c) (8) were prohibited from engaging in lobbying;
in League of Women Voters, publicly subsidized broadcasting sta-
tions were prohibited from editorializing.


vi

Federal Election Commission Advisory Opinions
—Continued Page

Advisory Opinion 1978-18, 1 Fed. Election Camp.

Fin. Guide (CCH) 15305 (April 4, 1978)... 14
Advisory Opinion 1979-48, 1 Fed. Election Camp.

Fin. Guide (CCH) 15435 (Oct. 31, 1979)........ 14
Advisory Opinion 1980-20, 1 Fed. Election Camp.

Fin. Guide (CCH) {5487 (May 1, 1980)... 14
Advisory Opinion 1980-109, 1 Fed. Election Camp.

Fin. Guide (CCH) 75556 (Oct. 6, 1980) ............. 18

Miscellaneous

Explanation and Justification of Commission Reg-

ulations, H.R. Doc. No. 44, 95th Cong., 1st Sess.

(1977) . 2
FEC, Legislative History of the Federal Election

Campaign Act of 1971 (1981) 2... 10, 11, 13, 31

FEC, Legislative History of the Federal Election
Campaign Act Amendments of 1974 (1977)........ 18, 19
FEC, Legislative History of the Federal Election

Campaign Act Amendments of 1976 (1977) . 8,22
FEC, Legislative History of the Federal Election

Campaign Act Amendments of 1979 (1988)........ 26
FEC Press Release, “FEC Reports 1983-84 In-

dependent Spending Activity” (Oct. 4, 1985)... 30
FEC Reports on Financial Activity 1983-84, Vol.

IV (May 1985) .... 30

II NLRB, Legislative History 0;
agement Relations Act, 1947 (1948) ...........9-10, 14, 20



v

Statutes and Regulations—Continued Page

26 U.S.C. § 501 (c) (3)
9002 (9)
9012 (f)

11 C.F.R. § 114.1 (a) (1)
114.3

| 114.4(b) (4
114.4 (b) (5)...

40 Fed. Reg. 29,792 (1975) .
44 Fed. Reg. 76,735 (1979
Federal Election Campaign Act of 1971, Pub. L.
No. 92-225, 86 Stat. 3 (1972)
Federal Election Campaign Act Amendments of
1974, Pub. L. No, 93-448, 88 Stat. 1263 (1974)... 7

p Rseamangere ate Tt

Legislative History

98 Cong. Rec. 6436 (1947) ...
93 Cong. Rec. 6437 (1947
98 Cong. Rec. 6438 (1947)...
93 Cong. Rec. 6489 (1947) ...
98 Cong. Rec. 6440 (1947)
93 Cong. Rec. 6447 (1947) ...
117 Cong. Rec. 41,869 (1971)
117 Cong. Rec. 43,379 (1971)
117 Cong. Rec. 43,380 (1971).
117 Cong. Ree. 43,381 (1971)
117 Cong. Rec. 43,382 (1971)
118 Cong. Rec. 328-29 (1972) ..
H.R. Rep. No. 1289, 98rd Cong, .» 2d Sess (1974)
H.R. Rep. No. 2739, 79th Cong., 2d Sess. (1946)
H.R. Conf. Rep. No. 1057, 94th Cong., 2d Sess.
a (1976)
Hearings Before the Committee on Rules and Ad-

ministration, United States Senate, 96th Cong.,

| 1st Sess. (1979) ... 26
: Federal Election Commission Advisory Opinions
Advisory Opinion 1975-1, 1 Fed. Election Camp.
Fin. Guide (CCH) 75103 wees 2



12

possible exception, the Hansen amendment “merely cod-
ifies prior law.” ?°

In sum, Congress had no intention of removing un-
coordinated expenditures from the reach of section 610
when it adopted the Hansen amendment in 1971. Con-
gress’ intent in that amendment was to permit election
advocacy to be distributed freely to a corporation’s or
union’s own stockholders or members, but to continue to
prohibit distributing such material to the public, as
MCFL did, unless it was financed through a separate
segregated fund. Accordingly, even if MCFL had been
right in its assertion that the 1971 language literally in-
dicated a contrary result, the Commission’s construction
of the Act would still be entitled to affirmance. See, ¢.g.,
Watt v. Alaska, 451 US. at 266.

B. MCFL argues (Br. 13-17) that if section 441b ap-
plies to corporate and union independent expenditures,
it can only reach expenditures to expressly advocate the
election or defeat of clearly identified federal candidates."
MCFL points to no statutory language to bolster this
assertion, relying instead upon isolated phrases of legis-
lative history divorced from their context.’* In fact, al-

10The one respect in which the Court found the amendment
had apparently changed the law was in permitting corporations and
unions to use their treasury funds to pay for the administration
and solicitation of contributions to a separate segregated fund.
Pipefitters v. United States, 407 U.S. at 428-32.

11 This is essentially the definition of “independent expenditure”
in 2 U.S.C. §4381(17). This provision was added to the Act in
1976 in response to this Court’s construction of a different section
of the Act in Buckley v. Valeo, 424 U.S. at 44 n.52, to apply only
“to communications containing express words of advocacy of elec-
tion or defeat, such as ‘vote for,’ ‘elect,’ ‘support,’ ‘cast your ballot
for,’ ‘Smith for Congress,’ ‘vote against,’ ‘defeat,’ ‘reject.’ ”

12 MCFL blatantly misrepresents the legislative history when it
quotes from a 1974 House report that was not even discussing 18
U.S.C. § 610, and relies upon it (Br. 14) as “the House Report”
on the 1971 amendment to section 610.


2

struction on the statute”; instead, “the question for the
[C]ourt is whether the agency’s answer is based on a
permissible construction of the statute.” Chevron, U.S.A.
v. Natural Resources Defense Council, 467 U.S. 837, 843
(1984). Accord, eg., Young v. Community Nutrition
Inst., 106 S. Ct. 2860, 2864-65 (1986); Chemical Manu-
facturers Ass’n v. NRDC, 105 S. Ct. 1102, 1108 (1985).
“To satisfy this standard it is not necessary for a court
to find that the agency’s construction was the only rea-
sonable one or even the reading the court would have
reached if the question initially had arisen in a judicial
proceeding.” FEC v. Democratic Senatorial Campaign
Committee, 454 U.S. at 39.

Since it was established in 1975, the Commission has
always construed section 441b to apply to independent
corporate expenditures like the one in this case. The
Commission adopted this view in its first advisory opin-
ion,’ and the first set of regulations promulgated when
the Commission was reconstituted after Buckley v. Valeo,
424 U.S. 1 (1976), included a provision “to make clear
that corporations and labor organizations may not make
independent expenditures on behalf of Federal candi-
dates.” Explanation and Justification of Commission
Regulations, H.R. Doe. No. 44, 95th Cong., 1st Sess. 101
(1977).* These regulations were submitted to Congress
pursuant to the Act’s legislative veto provision, 2 U.S.C.
§ 438 (d) (1) and, although. not dispositive, “Congress’
failure to disapprove the regulations . . . strongly im-

1 Advisory Opinion (“AO”) 1975-1, 1 Fed. Election Camp. Fin.
Guide (CCH) 15103, p. 10,021 n.1, reprinted in 40 Fed. Reg.
29,792 n.1 (1975).

2 This regulation, currently codified at 11 C.F.R. § 114.1(a) (1),
provides in pertinent part:

The term “contribution or expenditure” shall include any di-
rect or indirect payment, distribution, loan, advance, deposit,
or gift of money, or any services, or anything of value...
to any candidate, political party or committee, organization,
or any other person in connection with any election to any
[federal office].


18

however, even if MCFL’s regular newsletter were within
the newsmedia exemption, the Special Election Edition
would still constitute a prohibited election expenditure
since it was distributed free and unrequested to tens of
thousands of members of the general public who had
never received MCFL’s regular newsletter. See FEC Br.
at 4.2

The media exemption was added to the Act in 1974
with little controversy or discussion. The House Report
stated that it was one of several new amendments in-
tended “to exempt certain limited activities’ from the
Act’s contribution and spending limits and reporting
requirements. H.R. Rep. No. 1239, 93rd Cong., 2d Sess. 4
(1974), reprinted in FEC, Legislative History of the
Federal Election Campaign Act Amendments of 1974,
at 638 (1977) (hereafter “1974 Leg. Hist.”). Rather
than breaking new ground, these amendments were only
intended to “reaffirm the principles stated in the amend-

22 Although it is unnecessary in this case to determine whether
MCFL’s regular newsletter is a “periodical publication” protected
by 2 U.S.C. § 481(9) (B) (i), the Commission has construed this
term to mean “a publication in bound pamphlet form appearing at
regular intervals . . . containing articles of news, information,
opinion or entertainment, whether of general or specialized interest
which ordinarily derive their revenues from subscriptions and
advertising.” AO 1980-109, 1 Fed. Election Camp. Fin. Guide
(CCH) 15556 (Oct. 6, 1980), quoting Explanation and Justification
of Regulations on Funding of Federal Candidate Debates, 44’ Fed.
Reg. 76,735 (1979). MCFL’s newsletter does not appear at regular
intervals (J.A. 28), and does not derive any revenues from subscrip-
tions or advertising, but is published with corporate funds and dis-
tributed free of charge (J.A. 19, 24, 26). The Commission’s con-
struction is consistent with the legislative history discussed infra,
pp. 19-20, and the judicial deference to which it is entitled (pp. 1-2,
supra) cannot be overcome by the cases relied upon by MCFL (Br.
22, n.18) interpreting similar terms in unrelated statutes. See Office
of Consumers’ Counsel v. FERC, 783 F.2d 206, 221 n.81 (D.C. Cir.
1986); SEC v. Suter, 782 F.2d 1294, 1298 (7th Cir. 1984).


|

~ No. 85-701

~ Inthe Supreme Court of the United States

OcTOBER TERM, 1986

FEDERAL ELECTION COMMISSION, APPELLANT,

WY.

-MASSACHUSETTS CITIZENS FOR LIFE, INC., APPELLEE.

ON APPEAL FROM THE UNITED STATES COURT
OF APPEALS FOR THE FIRST CIRCUIT

REPLY BRIEF FOR APPELLANT
FEDERAL ELECTION COMMISSION

CHARLES N. STEELE *
General Counsel

RICHARD B. BADER
Assistant General Counsel

CAROL A. LAHAM .
' Attorney

Attorneys for
FEDERAL ELECTION COMMISSION
‘999. E Street, N.W.
Washington, D.C. 20463
(202) 876-8200 .
* Counsel of Record

SEPTEMBER 30, 1986



|
7]
;
}
:
i

5

Ignoring the purpose of the legislation, MCFL seizes
upon the wording of a description of contributions and
expenditures in the amendment which stated that “(flor
the purposes of this section . . . the term ‘contribution
or expenditure’ shall include any direct or indirect pay-
ment, distribution, loan, advance, deposit, or gift of
money, or any services, or anything of value... to any
candidate, campaign committee, or political party or
organization, in connection with any election” for federal
office. 2 U.S.C. § 441b(b) (2) (emphasis added). Reading
these words in isolation from their context in the com-
prehensive Federal Election Campaign Act of 1971
(“FECA”), Pub. L. No. 92-225, 86 Stat. 3 (1972),
MCFL argues that the second emphasized phrase should
be interpreted as a limitation of the scope of the provi-
sion to expenditures made in cooperation with a candi-
date or political committee. This Court has admonished
that such “insights derived from syntactical analysis
form a hazardous basis for the explication of major leg-
islative enactments.” Local Lodge No. 1424 v. NLRB,
362 U.S. 411, 417 n.7 (1960). See also Watt v. Alaska,
451 US. 259, 266 n.9 (1981).

MCFL’s exclusive focus upon the words of the 1971
amendment to section 610 ignores the fact that in this
same bill Congress enacted another, broader definition of
“expenditure,” codified at former 18 U.S.C. §591(f).
That definition contained no arguably limiting language,
and expressly provided that the broader definition was
also applicable to section 610.4 The courts construed these

8 MCFL offers no explanation why Congress did not adopt lan-
guage clearly referring to coordination with a candidate, as it has
done in 2 U.S.C. §§ 431 (17), 441a(a) (7) (B) (i).

4Former 18 U.S.C. §591(f) provided (emphasis added) :

When used in sections 597, 599, 600, 602, 608, 610, and 611 of
this title—

(f) “expenditure” means—

(1) a purchase, payment, distribution, loan, advance, de-
posit, or gift of money or anything of value... made


4

Only last year this Court rejected the argument that
when this same 1971 Congress prohibited certain “ex-
penditures” by political committees in excess of $1,000
in 26 U.S.C. § 9012(f), it only intended to reach expen-
ditures that were coordinated with a candidate. FEC
v. National Conservative Political Action Committee, 105
S. Ct. 1459, 1466-67 (1985). The Court found no sup-
port for such a construction in the legislative history and
noted that since coordinated expenditures are deemed con-
tributions under the Act such a construction would render
the prohibition of “expenditures” superfluous. Accord-
ingly, the Court concluded that the “independent expendi-
tures at issue in this case are squarely prohibited by
§ 9012(f).” Id. MCFL makes no attempt to reconcile
its assertion that the 1971 Congress acted to eliminate
the longstanding prohibition on independent expenditures
by corporations and unions in 18 U.S.C. § 610 with this
Court’s conclusion that Congress was simultaneously en-
acting a new prohibition on independent expenditures by
political committees in 26 U.S.C. § 9012(f).

MCFL bases its argument upon a parsing of certain
words in the complex 1971 amendment to former 18
U.S.C. § 610. As demonstrated in Pipefitters Local Union
No. 562 v. United States, 407 U.S. 385, 480-31 (1972),
the primary purpose of that amendment, as the legis-
lative debates made clear, was expressly to exempt
from the statutory prohibition the internal political com-
munications of corporations and unions which this Court
had previously found to be beyond the statute’s intended
reach, while retaining the prohibition on expenditure of
corporate and union funds to influence the public on
federal elections. Thus, the heart of the amendment was
the new language permitting corporations and unions to
spend money freely to communicate with stockholders and
members “on any subject,” and to use treasury funds to
administer a separate segregated political fund made up
of voluntary contributions from stockholders and members.


25

cussed in our opening brief, pp. 20-22, a separate segre-
gated fund is essentially nothing more than a separate
bank account containing voluntary contributions for po-
litical purposes; the corporation or union can completely
control the activities of its separate segregated fund, and
is free to use the separate segregated fund to express the
electoral views of the corporation or union. Cf. Regan
v. Taxation With Representation, 461 U.S. at 553-54
(Blackmun, J., concurring). Indeed, section 441b would
have permitted MCFL to produce and distribute the same
election flyer to the same people as it did in this case,
if it had only been financed from a wholly controlled
separate segregated fund. Accordingly, as in Regan,
“Congress has not infringed any First Amendment rights
or regulated any First Amendment activity” in section
441b. See also, e.g., United States v. Pipefitters Local -
Union No. 562, 484 F.2d 1116, 1123 (8th Cir.) (Van.
Oosterhout, C.J., joined by Blackmun, J.) (“Separate
voluntary political associations by union members are not’
in any way proscribed by the statute. Therefore, § 610
is not unconstitutional under the First Amendment.”),
adhered to en banc, 484 F.2d 1127 (8th Cir. 1970), rev’d
on other grounds, 407 U.S. 385 (1972) ; United States v.
Chestnut, 394 F. Supp. at 591 (S.D.N.Y. 1975), aff'd,
583 F.2d 40, 50-51 (2d Cir.), cert. denied, 429 U.S. 829
(1976) ; United States v. Boyle, 482 F.2d 755, 768-64
(D.C. Cir.), cert. denied, 414 U.S. 1076 (1978) .°

an affiliated entity. Thus if, as MCFL implies, the statute in
Regan was not subject to strict scrutiny because it did not actually
limit speech, the same standard of review is appropriate here.

20Contrary to MCFL’s assertion (Br. 23), both this Court and
the lower courts have upheld the constitutionality of section 441b
and its predecessors against a number of first amendment attacks.
See, in addition to the cases cited in the text, FEC v. National
Right to Work Committee, 459 U.S. at 206-211; Athens Lumber
Co. v. FEC, 718 F.2d 363 (11th Cir. 1983) (en banc) (answer-
ing in the negative questions listed at 689 F.2d 1006, 1015-


24

government argued that the restriction was supported by
the government’s interest in not paying for the speech
of the subsidized organizations, yet the Court upheld the
statute in Regan on the basis of this interest while strik-
ing down the statute in League of Women Voters. The
crucial difference between the two cases was spelled out
in FCC v. League of Women Voters, 468 U.S. at 399-
400—the statute in Regan permitted tax exempt corpora-
tions to establish unsubsidized affiliated organizations
which could carry on lobbying activities, while the statute
in League of Women Voters provided no such alternative
method of financing public broadcasting stations’ edi-
torials. The Court found that “[gliven that statutory
alternative . . . ‘Congress has not infringed any’ First
Amendment rights or regulated any First Amendment
activity,’ ” and acknowledged that if that sort of alterna-
tive had been included in the statute in League of Women
Voters, “such a statutory mechanism would plainly be
valid.” Id. at 400, quoting Regan v. Taxation With Rep-
resentation, 461 U.S. at 546.

’ Although it serves different purposes, the statutory
mechanism in section 441b is in all material respects
indistinguishable from the one upheld in Regan.” As dis-

2° Regan cannot be distinguished from this case by arguing that
the government’s interest in not subsidizing private speech is more
compelling than the purposes this Court has found to support
section 441b. Since the statute in League of Women Voters was
invalidated while the one in Regan was upheld, this common pur-
pose of the two statutes was clearly not found to outweigh the
first amendment interests asserted. The crucial factor was that the
statutory mechanism in Regan, like the one here, did not actually
restrict speech, while the statute in League of Women Voters, like
the actual limits on election expenditures at issue in such cases as
First National Bank of Boston v. Bellotti, 485 U.S. 765 (1978),
and FEC v. National Conservative Political Action Committee, 105
S. Ct. 1459 (1985), did. Regan also cannot be dismissed, as MCFL
apparently attempts to do (Br. 27), as involving a “time, place
and manner” restriction different in kind from section 441b. Like
section 441b, the statute in Regan entirely prohibited “covered
corporations from engaging in a category of speech, except through


In the Supreme Court of the United States

OcTOBER TERM, 1986

No. 85-701

FEDERAL ELECTION COMMISSION, APPELLANT,
wy.

MASSACHUSETTS CITIZENS FoR LIFE, INC., APPELLEE.

ON APPEAL FROM THE UNITED STATES COURT
OF APPEALS FOR THE FIRST CIRCUIT

REPLY BRIEF FOR APPELLANT
FEDERAL ELECTION COMMISSION

I. THE COMMISSION AND THE COURT OF AP-
PEALS PROPERLY CONCLUDED THAT MCFL’S
EXPENDITURE OF CORPORATE TREASURY
FUNDS VIOLATED 2 U.S.C. § 441b

A. MCFL argues (Br. 8-12) that the Commission and
the court of appeals erred in construing 2 U.S.C. § 441b
to prohibit the use of corporate treasury funds to make
expenditures that are not coordinated with a candidate.
In making this argument, MCFL has a heavy burden to
sustain, for this Court has held that “the Commission is
precisely the type of agency” to which deference should
be afforded in interpreting the Act. FEC v. Democratic
Senatorial Campaign Committee, 454 U.S. 27, 37 (1981).
Thus, the Court is not to “simply impose its own con-

(1)



15

discussed on pp. 1-2, supra, to overcome a Commission
construction of the Act that implements the intent stated
in the legislative history.

As the court of appeals concluded (J.S. App. 16a),
however, this case does not require the Court to decide
what expenditures are “in connection with” a federal
election under section 441b, even though not for express
advocacy. MCFL’s special election flyers clearly did
contain express advocacy of the election or defeat of
specified candidates; therefore, the expenditure in this
case would be unlawful even under MCFL’s own con-
struction of section 441b.17 MCFL’s flyers did not merely
inform readers of candidates’ positions on issues. Rather,
they went on to identify by name which candidates in
each electoral contest MCFL considered to be “pro-life”
and to urge the reader to vote for pro-life candidates in
language that could not have been more explicit. Thus,
under the large print heading “EVERYTHING YOU
NEED TO KNOW TO VOTE PRO-LIFE,” the fiyers
stated:

As you read this edition, you will see that the final
election or defeat of pro-life candidates in Novem-
ber will really be determined by the outcome of the
September 19th primary. No pro-life candidate can

17 Since MCFL apparently concedes that section 441b reaches
expenditures for express advocacy it cannot rely upon its un-
explained assertion (Br. 28 n.19) that section 441b is unconstitu-
tionally vague in defining which expenditures are prohibited. Al-
though the “statute may leave room for uncertainty at the peri-
phery,” MCFL’s corporate expenditure for express advocacy would
be unlawful “under any reasonable interpretation of the statute.”
FEC v. National Right to Work Committee, 459 U.S. 197, 211
(1982). “One to whose conduct a statute clearly applies may not
successfully challenge it for vagueness.” Parker v. Levy, 417 U.S.
738, 756 (1974). Any further uncertainty about the statute’s
reach can be resolved by obtaining an advisory opinion from the
Commission under 2 U.S.C. § 487f. See United Public Workers v.
Mitchell, 380 U.S. 75, 89-90 (1947); Martin Tractor Co. v. FEC,
627 F.2d 875, 384-85 (D.C. Cir.), cert. denied, 449 U.S. 954 (1980).


32

While it may well be true, therefore, that corporate
contributions to an ideological corporation for the pur-
pose of financing electoral contributions and expenditures
would be a violation of section 441b (and perhaps sec-
tion 441f as well), without the segregation of money used
for election expenditures and the reporting of the sources
of those funds, neither the Commission nor the voting
public would be aware that such violations had occurred.”
This only strengthens the governmental interest in dis-
closure of the sources of financing of an ideological cor-
poration’s election expenditures, for this Court has recog-
nized the government’s compelling interest in disclosure
as “an essential means of gathering the data necessary
to detect violations.” Buckley v. Valeo, 424 U.S. at 68.

excess of $1,000,” 2 U.S.C. §481(4) (A), are denied. MCFL at-
tempts to avoid this inconsistency by asserting (Br. 45) that election
expenditures do not make a group a political committee unless
supporting or opposing candidates is its “major purpose.” However,
as this Court noted recently with respect to the parallel definition
of “political committee” in the public financing statute, 26 U.S.C.
§ 9002(9), the express terms of the statute quoted above make any
organization that accepts contributions or makes expenditures to
influence federal elections a “political committee.” See FEC
v. National Conservative Political Action Committee, 105 S. Ct.
at 1466. MCFL’s expenditure of more than $9,000 on its special
election edition would make it a political committee under the
terms of the statute, required to report all of its contributors of
more than $200.00, if that expenditure had been lawful. Of
course, contrary to MCFL’s assertion (Br. 45 n.30), the Commission
found no probable cause to believe MCFL was a political committee
because it found MCFL’s expenditures to be unlawful under sec-
tion 441b.

89 For example, amicus Chamber of Commerce was established
to serve, inter alia, the business interests of its thousands ‘of cor-
porate members, who provide general funding to the Chamber.
Under MCFL’s scenario, the Chamber could make large expendi-
tures from its general treasury to influence federal elections in
order to benefit its members’ business interests, yet it would have
no earmarked contributions to report.


33

D. MCFL repeatedly asserts (Br. at 48 n.28, 45, 46)
that the Commission has not demonstrated that section
441b represents the least intrusive way of serving the
governmental interests involved.*© For the most part,
however, MCFL has failed to suggest any way in which

those purposes could be served in a less intrusive way. “
In fact section 441b serves the purposes we have identi- .

fied in the manner least restrictive of constitutional

rights. Thus, by requiring segregation of political funds, ©

Congress has been able to ensure disclosure of only those
who contribute separately to the corporation’s political
activities, to protect contributors’ ability to make a sep-
arate, informed decision about supporting a corporation’s
political activities, and to screen from the electoral proc-
ess the aggregations of wealth accumulated under the
special advantages of the corporate structure, while at
the same time permitting corporations and unions to use

40 Since, as we have shown, section 441b does not actually re-
strict the ability of corporations and unions “to engage in pro-
tected political advocacy, Congress was not required to select the
least restrictive means of protecting the integrity of its legislative
scheme.” California Medical Ass’n v. FEC, 458 U.S. at 199 n.20
(plurality opinion).

41MCFL argues (Br. 45) that “[i]f Congress wants the names
of all contributors to a non-profit corporation which engages in any
express advocacy to be made public, it could enact such a statute.”
Initially, it is obvious that this would be more intrusive than sec-
tion 441b’s requirement that only those who contribute directly to
a corporation’s political activities need be reported. Moreover,
Congress clearly does not want to make public the names of all
contributors to nonprofit corporations; the mechanism of section
441b ensures that only the names of those who choose to make
discrete contributions to the corporation’s political fund need be
disclosed. Finally, MCFL does not really believe this is a less
intrusive method of serving Congress’ interests, for it goes on to
cast doubt on whether such a provision could “survive constitu-
tional scrutiny.”



21

quite another to say that in connection with an elec-
tion occasional pamphlets or dodgers or free copies
widely scattered are forbidden.

Id. at 122-23. Concluding that the particular distribu-
tion alleged was permissible under the Act, the Court
cautioned that “[w]e express no opinion as to the scope
of this section where different circumstances exist.” Id.
at 124.

Although it concedes (Br. 20) that this Court’s CIO
decision was the progenitor of the newsmedia exemption,
MCFL/’s discussion of that case ignores the distinction the
Court went to such lengths to emphasize,** Unlike the
CIO, MCFL did distribute its election flyers free of
charge to thousands of people who were not members of
the corporation and had never received MCFL’s newslet-
ters. This sort of active electioneering among the public
is precisely what section 441b was intended to prohibit.”

24This Court has twice reaffirmed the fundamental distinction
drawn in the CIO decision. In United States v. UAW, 352 U.S. at
589, the Court found valid an indictment for a union’s expenditure
for a public broadcast advocating the election of a federal candi-
date, and observed:
[U]nlike the union-sponsored political broadcast alleged in this
case, the communication for which the defendants were indicted
in C.I.0O. was neither directed nor delivered to the public at
large. The organization merely distributed its house organ
to its own people. The evil at which Congress has struck in
§ 313 is the use of corporation or union funds to influence the
public at large to vote for a particular candidate or a particular
party.
In 1972, only two years before the media exemption was enacted,
the Court reiterated that the basis for its decision in CIO was
that unions were not barred “from using union funds to publish
a periodical [containing election advocacy], in regular course and
for distribution to those accustomed to receiving it.” Pipefitters
v. United States, 407 U.S. at 417 n.29 (emphasis added).

2 [I]n exempting the “distribu[tion]” of news or commentary
“through the facilities of any broadcasting station, newspaper,


cidmintabiiiaicarariinikececaccae

scessceret
pe

iii

Cases—Continued Page

Local Lodge No. 1424 v. NLRB, 362 U.S. 411

(1960) 5
Martin Tractor Co. v. FEC, 627 F2d 875 (D.

Cir.), cert. denied, 449 U.S. 954 (1980) 15
Michigan State Chamber of Commerce v. ‘Austin,

No. G85-496 (W.D. Mich. Sept. 3, 1986) 29
NAACP ¥. Alabama, 357 U.S. 449 (1958) 384
National Treasury Employees Union v. FLRA,

No. 85-1053 (D.C. Cir. Sept. 2, 1986) ... 10
New York Trust Co. v. Eisner, 256 US. 345

(1921) 9
Office of Consumers’ Counsel v. FERC, 783 F.2d

206 (D.C. Cir. 1986)... 18
Parker v. Levy, 417 U. Ss. 733 (1974) . 15
Reader’s Digest Ass’n, v. FEC, 50! upp.

1210 (S.D.N.Y. 1981) . 22
Regan v. Taxation With Representation, 461 U.S.

540 (1983) .... 23, 24, 25, 31
Russello v. United States, 464 U.S. 16 (1988)........ 18,17
Secretary of State of Maryland v. Joseph H. Mun-

son Co., 467 U.S. 947 (1984) ... 28
SEC v. Suter, 732 F.2d 1294 (7th Cir. 1984) . 18
United Public Workers v. Mitchell, 330 U.S. 75

(1947) ... 15
United States v. Boyle, 482 F.2d 755 (D.C. Cir. ),

cert. denied, 414 U.S. 1076 (1978) ... 25

United States v. Chestnut, 394 F. Supp. 581 (S.D.
N.Y. 1975), aff'd, 533 F.2d 40 (2d Cir.), cert.
denied, 429 U.S. 829 (1976) .

United States v. Clifford, 409 F. Supp. 1070 (E.D.
N.Y. 1976) ..

United States v. CIO, "385 U.S. 106 (1948.

United States v. Harriss, 847 U.S. 612 (1954)........ 81

United States v. Lewis Food Co., 366 F.2d 710 (9th
Cir. 1966) ...

United States 0 v. ). Massachusetts Bay Transp. ‘Au-
thority, 614 F.2d 27 (1st Cir. 1980) . -

United States v. Pipefitters Local Union No.
482 F.2d 1116 (8th Cir.), adhered to en bane,

434 F.2d 1127 (1970), rev’d sub nom., Pipefit-
ters v. United States, 407 U.S. 885 (1972)........passim



8

Finally, the Commission’s construction is supported by
the structure of the Act, for several exemptions incorpo-
rated only into the definition of expenditure in section
431 would make little sense if they did not apply to sec-
tion 441b as well. First, even MCFL agrees (Br. 18-23)
that the media exception now codified at 2 U.S.C. § 431
(9) (B) (i) was intended to protect press functions from
the prohibition in section 441b. Similarly, although a
corporation’s communication with its members is ex-
empted from the general definition of expenditures, 2
U.S.C. § 431(9) (B) (iii), there is no such exemption
from the definition in section 441b. MCFL’s construction
would make these special protections for certain cor-
porate activities inapplicable to section 441b, a senseless
result that is impossible to accept. Griffin v. Oceanic
Contractors, 458 U.S. 564, 575 (1982).7

2. MCFL’s argument for narrowing the reach of sec-
tion 441b almost completely ignores the extensive legisla-
tive history of that statute. However, in construing a

report expressly noted that in some respects these two definitions
“overlap” and “should be read together.” H.R. Conf. Rep. No. 1057,
94th Cong., 2d Sess. 68 (1976), reprinted in FEC, Legislative His-
tory of the Federal Election Campaign Act Amendments of 1976,
at 1057 (1977) (hereafter “1976 Leg. Hist.”). This intention is
confirmed by Congress’ failure to veto the regulations discussed
on pp. 2-83, supra, or to alter the Commission’s construction of
section 441b when it revised the Act in 1979.

7 Even if 2 U.S.C. §441b(b) (2) were the exclusive definition of
“expenditure,” however, its terms would not exempt from section
441b a corporation’s expenditures to express its own views on
candidates to the public. Section 441b(b) (2) is not limited to
payments made directly to a candidate, but includes as well any
“indirect” payment or gift of “anything of value.” As shown
infra, p. 10, Rep. Hansen’s amendment was drafted to codify
previous court decisions, and this Court had found in United States
v. UAW, 352 U.S. at 585 (emphasis added) that the statute “em-
brace[d] precisely the kind of indirect contribution alleged in the
indictment” in that case, which did not allege a coordinated ex-
penditure.


10

UAW, 352 U.S. 567 (1957), this Court relied upon this
legislative history to uphold an indictment that did not
allege that the union’s expenditure had been coordinated
with any candidate.

The 1971 amendments to 18 U.S.C. § 610, upon which
MCFL relies, were proposed on the floor of the House by
Rep. Orval Hansen. As we have shown (FEC Br. 22-23),
the policy Rep. Hansen said his amendment was intended
to implement was to permit internal communications of
corporations and unions while continuing to prohibit the
use of corporate and union money to influence the public
in the selection of candidates for federal office.

If Rep. Hansen’s amendment had also been intended to
effect the dramatic change in policy alleged by MCFL—
removing from the statute’s reach an entire class of ex-
penditures specifically targeted by Senator Taft and over-
ruling this Court’s construction of the Act in the UAW
case—one would expect to find some indication of this
intent in the legislative history. See, e.g., National Treas-
ury Employees Union v. FLRA, No. 85-1053, slip op. at
13 (D.C. Cir. Sept. 2, 1986). Rep. Hansen, however, went
to great lengths to reassure his colleagues that his amend-
ment would not make any significant changes, but would
merely “codify the court decisions interpreting section
610 of title 18 of the United States Code.” 117 Cong.
Rec. 43,379 (1971), reprinted in FEC, Legislative His-
tory of the Federal Election Campaign Act of 1971, at
757 (1981) (hereafter “1971 Leg. Hist.”). See also 117
Cong. Rec. 41,869 (1971). Rep. Hansen went on to em-
phasize that under his amendment section 610 was
“plainly all-encompassing” and commented:

Act, 1947, at 1526-27 (1948) (hereafter “1947 Leg. Hist.”).
Similar statements were repeated throughout the legislative history
of the Taft-Hartley amendments. See, e.g., 93 Cong. Rec. 6487,
6438, 6439, 6440, 1947 Leg. Hist. at 1528-85 (remarks of Sens.
Pepper, Taft and Magnuson).


Cases—Continued Page

Committee to Elect Lyndon LaRouche v. FEC, 613
F.2d 884 (D.C. Cir. 1979), cert. denied, 444 U.S.
1074 (1980) ...

FCC v., League of Women Voters of California, 468
U.S. 364 (1984)... a

Federal Deposit Insurance Corp. v. Philadelphia
Gear Corp., 106 S. Ct. 1931 (1986) ...............-...-. 9

FEC v. American Federation of State, County and
Municipal Employees, 471 F. Supp. 315 (D.D.C.

1979) 17
FEC v. Central Long Island Taz Reform ‘Tmmedi-
ately Committee, 616 F.2d 45 (2d Cir. 1980)........ 16

FEC v. Democratic Senatorial Campaign Commit-
tee, 454 U.S. 27 (1981) ....
FEC v. National Conservative Political Action
Committee, 105 S. Ct. 1459 (1985)
FEC v. National Education Ass’n, 457 F. Supp.
1102 (D.D.C. 1978)
FEC »v. National Right to Work Committee, 459
U.S. 197 (1982)
FEC v. Weinsten, 462 F. Supp. 243 (SDNY.

1978) .. 26
Federal Land Bank of
ber Co., 814 U.S. 95 (1941)... 7
First National Bank of Boston v. ). Bellotti,
765 (1978) .... .. 24, 29
Griffin v. Oceanic Contractors,
_ 8
‘ell, 465 U.S. 555 (1984)...... 3
Heffron v. International Society for Krishna Con-
sciousness, 452 U.S. 640 (1981) 28
Herb’s Welding, Inc. v. Gray, 105 S. Ct. 1421
(1985) 7
International ‘Assn “Of Machinists v. FEC, 678
F.2d 1092 (D.C. Cir.), aff’'d mem., 459 U.S. 983
26
g ‘ederal Election
Commission, 613 F.2d 864 (D.C. Cir. 1979),
cert. denied, 444 U.S. 1074 (1980) 34



31

C. MCFL describes (Br. 46) the danger of apparently
ideological corporations largely funded by business cor-
porations making independent expenditures to serve the
interests of their corporate sponsors as a “fantasy,” argu-
ing that a corporate contribution to an ideological corpo-
ration for the purpose of independent expenditures would
still be a violation of section 441b, and that 2 U.S.C.
$434(c) would require the ideological corporation to
report contributions to it that are earmarked for in-
dependent expenditures. However, it would take an ex-
cessively naive corporation to earmark its funding of an
ideological corporation for independent expenditures. The
real danger is that such ideological front groups could
receive general funding from corporations whose business
purposes they serve, and as one method of serving those
interests make extensive expenditures to elect federal
candidates who will aid their supporters’ business in-
terests. Nothing in the Act requires such general funding
to be disclosed any more than MCFL was obligated to
report the names of all of its general contributors.**

marks of Rep. Hansen), 1971 Leg. Hist. at 758. Lobbying expendi-
tures are, in fact, extensively regulated under other statutes. See,
e.g., Regan v. Taxation With Representation, 461 U.S. 540 (1983) ;
United States v. Harriss, 347 U.S. 612 (1954). The second point
has already been rejected by this Court on several occasions on
the ground that Congress has authority to make a “judgment”
that “entities hav[ing] differing structures and purposes ... may
require different forms of regulation in order to protect the inte-
grity of the electoral process.” California Medical Ass’n v. FEC,
453 U.S. at 201; FEC v. National Right to Work Committee, 459
US. at 210.

%8In attempting to analogize this case to FEC v. National Con-
servative Political Action Committee (“NCPAC”), 105 S. Ct. 1459
(1985), MCFL fails to acknowledge that, as a political committee,
NCPAC does report the names of its contributors, while MCFL
seeks to make political expenditures like NCPAC’s without doing
so. MCFL thus seeks a special status that NCPAC, and any other
“group of persons which . . . makes expenditures aggregating in


eee

19

ment to section 610 ... . proposed by Representative Orval
Hansen, and passed by the Congress as part of the Act.”
Id. The particular purpose of the media exemption was
to “assure[] the unfettered right of the newspapers, TV
networks, and other media to cover and comment on po-
litical campaigns.” Id. Rep. Frenzel, in his separate
views attached to the House Report, agreed that this
amendment was “non-controversial” and “basically in
conformity with the law already.” Id. at 144, 1974 Leg.
Hist. at 778.78

The existing law on the applicability of 18 U.S.C. § 610
to media expenditures originated in Senator Taft’s ex-
planation during the Senate debates on the 1947 amend-
ments. Senator Taft clearly drew the line between per-
mitted press activities and prohibited corporate and union
expenditures.

MR. TAFT. I would say the word ‘expenditure’
(sic) does not mean the sale of newspaper (sic) for
money for their worth. If they are sold to sub-
scribers and if the newspaper is supported by sub-
scriptions, then I would not say that constituted such
an expenditure. But if the newspapers were given
away—even an ordinary newspaper—I think that
would violate the Corrupt Practices Act. That act
would be violated, it seems to me, if such a news-

23MCFL’s quotation (Br. 21) from the 1974 committee report,
indicating Congress’ general intent in all of these new provisions
not to “burden” the freedoms of the press or of association,”
H.R. Rep. No. 1239 at 4, 1974 Leg. Hist. at 638, does not establish
that the media exemption entirely immunizes the media from the
Act, for the first amendment is not violated by applying laws of
general applicability to media corporations. See, eg., Branzburg
v. Hayes, 408 U.S. 665, 682-83 (1972). The actual. intent of this
general statement is clearly not as broad as MCFL believes, for
the same committee report only two pages later (H.R. Rep. No.
1239 at 6-7) asserted that first amendment freedoms would not be
infringed by a broad. limitation on independent expenditures by
individuals, which this Court found unconstitutional in Buckley v.
Valeo, 424 U.S. at 39-59.


TABLE OF CONTENTS

Page
I. THE COMMISSION AND THE COURT OF

APPEALS PROPERLY CONCLUDED THAT

MCFL’S EXPENDITURE OF CORPORATE

TREASURY FUNDS VIOLATED 2 U.S.C.

§ 441b .. 1

Il. SECTION 441b DOES NOT INFRINGE THE

RIGHTS OF CORPORATIONS AND UNIONS

TO ENGAGE IN POLITICAL SPEECH ............. 23

Ill. SECTION 441b IS SUPPORTED BY COM-

PELLING GOVERNMENTAL INTERESTS

THAT OUTWEIGH ANY IMPACT ON

MCFL’S POLITICAL ACTIVITIES ......... 27

CONCLUSION eeseoee 35
TABLE OF AUTHORITIES
Cases
Ash v. Cort, 496 F.2d 416 (8rd Cir. 1974), rev’d,

422 U.S. 66 (1975) 6
Athens Lumber Co. v. FEC, 718 F.2d (11th

Cir. 1983) (en banc), appeal dismissed, cert. de-

nied, 465 U.S. 1092 (1984) 26

‘ Branzburg v. Hayes, 408 U.S. 665 (1972) 19
Bread Political Action Committee v. FEC, 685 F-. 2d

621 (7th Cir. 1980)° (en banc), rev’d, 455 U.S.

577 (1982) .. 26
Buckley v. Valeo, 424 US. 1 (1976) 12, 19, 32
California Medical Ass’n v. FEC, 453 U.S. 182

(1981) ... - 26, 31, 33
Chemical Manufacturers “Ass'n v. Natural Re-

sources Defense Council, 105 S. Ct. 1102 (1985) .. 2
Chevron, U.S.A. v. Natural Resources Defense

Council, 467 U.S. 837 (1984) 2
Chicago Teachers Union, Local No. 1 v.

106 S. Ct. 1066 (1986) 30
Citizens Against Rent Control v. City of Berkeley,

454 U.S. 290 (1981) 29



27

performing this service for its supporters is too “bother-
some” can hardly be considered an objection of constitu-
tional stature, particularly since it has not deterred
MCFL from establishing and operating a separate segre-
gated fund for the last six years. The statute itself does
not limit MCFL’s ability to transform contributions from
consenting members into political speech, and that is
enough to satisfy the test applied by this Court.**

III. SECTION 441b IS SUPPORTED BY COMPELLING
GOVERNMENTAL INTERESTS THAT OUTWEIGH
ANY IMPACT ON MCFL’S POLITICAL ACTIVITIES

A. We demonstrated in our opening brief, pp. 29-33,
that in FEC v. National Right to Work Committee, 459
U.S. 197 (1982), this Court found the purposes under-
lying section 441b to be compelling enough to overcome
first amendment objections like the ones raised by MCFL,
even as applied to the nonprofit, ideological corporation
in that case. MCFL argues (Br. 42 n.27, quoting JS.
App. 28a) that the National Right to Work Committee
decision is inapplicable here because that case involved

32 MCFL asserts (Br. 28) that it was precluded from establish-
ing a separate segregated fund in 1978 because it was a non-
membership corporation at that time. However, as shown in our
opening brief, p. 22 n.11, this would not have precluded MCFL
from establishing a separate segregated fund; indeed, the National
Right to Work Committee was also a nonmembership corporation
when it established its separate segregated fund. See FEC v.
National Right to Work Committee, 459 U.S. at 200. Any limits on
solicitation would have resulted solely from MCFL’s self-imposed
restriction on membership in the corporation, and this Court held
in FEC v. National Right to Work Committee, 459 U.S. at 206, that
limiting solicitation for a separate segregated fund to a corpora-
tion’s actual members is not unconstitutional. The statute permits
anyone who chooses to join a corporation or union to be solicited
for contributions to its separate segregated fund; it was MCFL,
not Congress, that refused until 1980 to permit its supporters to
associate with the corporation by becoming members.


22

Finally, MCFL’s argument again conflicts with the
structure of the Act. In 2 U.S.C. § 481 (9) (B) (iii), Con-
gress exempted from the general definition of expenditure
a corporation’s or union’s communications with its mem-
bers, but required that such organizations report the costs
exceeding $2000 for communications to their members
primarily devoted to express advocacy. This provision
was aimed, in part, at special election editions of cor-
porate and union house organs. H.R. Conf. Rep. No.
1057, 94th Cong., 2d Sess. 42 (1976); 1976 Leg. Hist.
at 1036. MCFL’s construction of the media exemption
would mean that a corporation or union would have to
report its expenses if it distributed a special election edi-
tion of its house newsletter only to its members, but if
it distributed the election edition to the public as well
section 431(9) (B) (iii) would make it exempt from re-
porting the expenses of the distribution. Such anomalous

magazine or other periodical publication . . .”, the statute
would seem to exempt only those kinds of distribution that
fall broadly within the press entity’s legitimate press function.
It would not seem to exempt any dissemination or distribution
using the press entity’s personnel or equipment, no matter how
unrelated to its press function. If, for example, on Election
Day a partisan newspaper hired an army of incognito propa-
ganda distributors to stand on street corners denouncing
allegedly illegal acts of a candidate and sent sound trucks
through the streets blaring the same denunciations, all in a
manner unrelated to the sale of its newspapers, this activity
would not come within the press exemption—even though it
might comply with a technical reading of the statutory exemp-
tion, being a “news story ... distributed through the facilities
of... [a] newspaper.”
Reader’s Digest Ass'n v. FEC, 509 F. Supp. 1210, 1214 (S.D.N.Y.
1981). Since the media exemption would not protect any corpora-
tion or union that engaged in the activity MCFL is charged with
—free and unrequested distribution of an election flyer to members
of the public who never received MCFL’s regular newsletter—
there is no basis for MCFL’s argument (Br. 46-48) that the appli-
cation of the Act in this case denies it equal protection of the law.


6

two provisions as providing supplementary definitions of
expenditure for the purposes of section 610. Ash v. Cort,
496 F.2d 416, 424 (8rd Cir. 1974), reversed on other
grounds, 422 U.S. 66 (1975) ; United States v. Chestnut,
394 F. Supp. 581, 585, 591 (S.D.N.Y. 1975), affirmed,
533 F.2d 40 (2d Cir.), cert. denied, 429 U.S. 829 (1976).
As the Third Circuit explained:

The definition given “expenditure” in both sections
traces back to the Federal Election Campaign Act
of 1971 .... The drafters clearly intended § 591’s
definition to affect interpretation of § 610, for they
provided that the definitions in § 591 applied to use
of those terms in § 610. We note also that § 591 in-
dicates the “meaning” of expenditure while § 610
only indicates certain matters “included” in that
term. We therefore read § 610 as supplementing
rather than replacing § 591’s definition.

Ash v. Cort, 496 F.2d at 424-25. As noted supra, p. 2,
the Commission expressly adopted this construction of the
statute in its first advisory opinion, and then promul-
gated a regulation, based upon the combined effect of
the two definitions, which it has followed ever since.

for the purpose of influencing the nomination for elec-
tion, or election, of any person to Federal office, for
the purpose of influencing the result of a primary
held for the selection of delegates to a national
nominating convention of a political party or for the
expression of a preference for the nomination of
persons for election to the office of President, or for
the purpose of influencing the election of delegates to
a constitutional convention for proposing amendments
to the Constitution of the United States;

(2) a contract, promise, or agreement, express or implied,
whether or not legally enforceable, to make any ex-
penditure; and

(8) a transfer of funds between political committees. ...

Pub. L. No, 92-225, 86 Stat. 8-9 (1972).


4
4

9
statute, “a page of history is worth a volume of logic,” *
and the legislative history of section 441b firmly supports
the Commission’s application of the statute to independ-
ent corporate expenditures like MCFL’s.

As noted on p. 15 of our opening brief, the prohibition
on contributions was extended to cover expenditures in
1947 because several congressional committees had dis-
covered that labor organizations had evaded the contribu-
tion limits by conducting extensive campaigns on their
own behalf in support of favored candidates. The impact
of this change in the law was debated in depth in the
Senate, during which Senator Taft, the manager of the
bill, consistently affirmed that expenditures would be pro-
hibited whether or not made in coordination with a

candidate. As noted supra, p. 3, in United States v.

8 Federal Deposit Ins. Corp. v. Philadelphia Gear Corp., 106
S. Ct. 1981, 1935 (1986), quoting New York Trust Co. v. Eisner,
256 U.S. 345, 349 (1921).

® For example, the following colloquy between Senators Pepper
and Taft clearly anticipated what MCFL did here:

Mr. PEPPER .... Would the newspaper called Labor,
which is published by the Railway Labor Executives, be per-
mitted to put out a special edition of the paper, for example,
in support of President Truman, if he should be the Demo-
cratic candidate for the Presidency next year, and in opposition
to the Senator from Ohio, if he should be the Republican
nominee for the Presidency, stating that President Truman
was a friend of labor and that the Senator from Ohio was not
friendly to labor? Would that be called a political expenditure
on the part of the labor organization?

Mr. TAFT. If it were supported by union funds contributed
by union members as union dues it would be a violation of the
law, yes. It is exactly as if a railroad itself, using its stock-
holders’ funds, published such an advertisement in the news-
paper supporting one candidate as against another .... The
prohibition is against a labor organization using its funds
either as a contribution to a political campaign or as a direct
expenditure of funds on its own behalf.

98 Cong. Rec. 64386 (1947) (emphasis added), reprinted in II
NLRB, Legislative History of the Labor Management Relations