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FEDERAL ELECTION COMMISSION

April 1990 999 E Street NW Washington DC 20463 Volume 16, Numbe

CHANGES IN ELECTION LAWS UNDER

ETHICS REFORM ACT OF 1989

The Ethics Reform Act of 1989

(P.L. 101-194) made several changes

in laws related to federal

elections. The Act's repeal of the

"Grandfather Clause" in 2 U.S.C.

§439a, which permitted retiring

Members of congress to convert

excess campaign funds to personal

use, was covered in the February

Record. Other changes brought about

by the Ethics Reform Act are

discussed below.

Personal Financial Disclosure

The Ethics Reform Act amended

the Ethics in Government Act, which

required, in part, that candidates

for federal office file periodic

disclosure reports on their personal

finances.

under rules currently in effect,

a candidate must file a personal

financial disclosure report at one

of the offices listed below within

30 days of becoming a "candidate" or

by May 15, whichever is later. For

purposes of current disclosure

requirements, an individual becomes

a "candidate" when he or she (1) has

taken the actions necessary under

state law to qualify for election or

(2) has filed a Statement of Candidacy (FEC Form 2) pursuant to 2

U.S.C. §432(e)(1}.

Beginning January 1, 1991, all

nonincumbent candidates for the

House and Senate will file their

personal finance reports with the

Federal Election Commission. The

new law specifies that the disclosure requirements only apply to

"candidates" as defined under the

Federal Election Campaign Act at

2 U.S.C. §431(2). Incumbent candidates will continue to file with the

House Committee on Standards of

Official Conduct or the Senate

Select Committee on Ethics, as

appropriate. For the current elec

tion cycle, all candidates will

continue to file their personal d

closure reports with the appropri

House or Senate committees. (The

Commission has recommended technic

amendments to the new law to elim

ate the splitting of filing point

between incumbents and challenger

More information on the Ethic

Reform Act of 1989 can be obtained

from the following offices:

o House candidates: The House

Committee on Standards of Offic

Conduct, HT2, U.S. Capitol,

Washington, D.C. 20515.

202/225-7103.

o Senate candidates: The Senate

Select Committee on Ethics, 220

SHOB, Washington, D.C. 20510.

202/224-2981.

TABLE OF CONTENTS

LEGISLATION

1 Changes Under Ethics Reform A

COMMISSIONERS

2 Delegation Visits U.S.S.R.

PUBLIC FUNDING

3 Presidential Fund Shortfall

3 ADVISORY OPINIONS

COMPLIANCE

5 publicly Released MURs

6 MUR 2599

COURT CASES

7 FEC v. Life Amendment PAC, In

800 LINE

8 Basic Recordkeeping Rules

11 INDEX

STATISTICS

11 National party Activity, 1989
PUBLIC APPEARANCES

April 24 Gannett Foundation

Washington, DC

Kent Cooper, Asst.

Staff Director,

Public Disclosure

Elimination of Honoraria for House

Members and Government Employees

The Ethics Reform Act of 1989

also prohibits Members of the House

of Representatives and officers and

employees of the federal government

from receiving honoraria, effective

January 1, 1991.

Under the new law, instead of

receiving honoraria, House Members

and federal officers and employees

may direct that an honorarium be

paid to a charitable organization.

In such cases, the honorarium would

not be considered to have been

"received" by the Member, officer or

employee. The charitable organization receiving the payment may not

be one from which the Member,

officer or employee, or his or her

parent, sibling, spouse, child or

dependent relative derives any

financial benefit. A payment

permissible under this "charity"

provision is limited to $2,000.

The Federal Election Campaign

Act's $2,000 limitation on honoraria

received by elected officers and

employees of the federal government

was amended so as to apply only to

honoraria received by Senators and

by officers and employees of the

Senate. See 2 U.S.C. S441i.

FEC-LED DELEGATION

RETURNS TO U.S.S.R.

In March Chairman Lee Ann

Elliott led a delegation of Amer

federal and state election offic

on a IO-day informational visit 

the Soviet union.

The trip was the third in a

series of exchange visits between

U.s. and Soviet election officia

An FEe delegation visited the

U.S.S.R. in June 1989, and membe

of the Soviet Central Electoral

Commission came to the U.S. in

November 1989. The trips have

included talks between American 

Soviet election officials at all

levels of government and have

covered such topics as election

administration and campaign finan

reform.

The latest delegation visited

Tallin, the capital of Estonia;

Alma-Ata, the capital of Kazakhs

and Moscow. Estonia and Kazakhs

held the equivalent of state and

local elections during the visit

Along with Chairman Elliott, the

group included Vice Chairman Joh

Warren McGarry, Commissioner Dan

L. McDonald, three FEC staff

members, three state election

officials and a representative o

the International Foundation for

Electoral Systems (IFES). IFES

financed the group's travel to a

from the U.S.S.R. under a grant 

the Charles Stewart Mott foundat

while the Soviet government paid 

their lodging, meals and travel

within the U.S.S.R.

FEDERAL ELECTION COMMISSION Volume 16, Num

International

Institute of

Municipal Clerks

Little Rock, AR

Janet McKee

May 19-25

April 1990

FEDERAL ELECTION COMMISSION

999 E Street, N.W.

Washington, DC 20463

800/424-9530 202/376-3120 202/376-3136(TDD)

Lee Ann Elliott, Chairman

John Warren McGarry, Vice Chairman

Joan Aikens

Thomas J. Josefiak

Danny L. McDonald

Scott E. Thomas

2

walter J. Stewart, Secretary of th

Senate, Ex Officio

Donnald K. Anderson, Clerk of the

House of Representatives, Ex Off
April 1990 FEDERAL ELECTION COMMISSION Volume 16,Numbe

PRESIDENTIAL FUND COULD

FALL SHORT FOR 1992 ELECTIONS

In February the Commission

notified Congre&s, the President and

the Secretary of .the Treasury that

the Presidential Election Campaign

Fund will probably be insufficient

to cover entitlements for the 1992

Presidential elections.

The Commission's analysis of the

status of the Fund is based on the

latest available data on the rate of

inflation and the level of participation by taxpayers in the income

tax checkoff program.

While taxpayer participation has

declined in recent years, payments

from the Fund have increased because

they are indexed to the rate of

inflation. Compounding the problem,

revenues flowing into the Fund are

not indexed; the amount that each

taxpayer can check off for the Fund

has remained at the 1973 level of

$1.00.

In April and November 1989, the

Commission warned Congress and the

President that the Fund was likely

to fall short of expected

entitlements for the 1996 elections.

with the revised projections, based

on a 4.5 percent rate of inflation

over the next two years, the

Commission predicts a shortage by

the 1992 elections.

In her letter revising the

Commission's projections, FEC

Chairman Lee Ann Elliott urged

Congress and the Administration to

"work together to amend the law to

provide for adequate funding for the

1992 election and to secure reliable

funding for 1future Presidential

elections."

1. On March 6, the Commission

approved a package of legislative

recommendations that included

several suggestions for restoring

the Fund. The recommendations

will be summarized in next month's

Record.

3

AO 1990-1: Corporation's Sale of

900-Line Fundraising

Service to Candidates

Digital Corrections Corporation

(DCC) may provide 900-line telepho

services to federal candidates and

committees for fundraising purpose

provided that the company meets

certain conditions ensuring

compliance with the limitations an

prohibitions on contributions and

with the rules governing fundraisi

activities.

proposal

DCC plans to provide each clie

committee with a 900-line telephon

number that the committee will

advertise through various print an

broadcast media. Clients will pay

the usual and normal charge for th

900-line service.

The company's service allows t

caller to register a response to t

recorded message on the 900-line b

pressing touch-tone buttons or, on 

rotary phone, using a voice

response. Each message will state

the cost of the call and give the

caller the opportunity to hang up

without incurring a charge. The

price per call will be fixed for

each campaign, with a range of $8 

$50. Callers will pay for the ca

as part of their monthly phone bil

upon receipt of the bill, each

caller will be given one opportun

to elect not to pay the fee.

The recordings will ask caller

to provide their names, addresses

and social security numbers when

pledging contributions. The compa

will use an Automatic Number '

Identification system to identify

the exact telephone number from

which a call is made. Bills will

only be sent for calls from

verified, residential telephones;

all other calls will be disregarde

Thus, there will be no billing for 

call where the name and address of

the caller do not match the name a

address listed for the telephone

number.

(continu
FEDERAL ELECTION COMMISSION

April 1990

The company plans to collect a

deposit from each campaign committee

entering into a contract for the

service. Each campaign will be

"solely liable" for the costs

associated with the program.

The telephone companies will

collect payments from the customers

and deduct their charges before

forwarding the contributions to DCC.

DCC, in turn, will deduct its

charges from the payments and pass

the net proceeds along to the

candidates.

Services by DCC and Phone Companies

The deposits that client

candidates will pay DCC will be

sufficient to cover all costs

connected with the service, and if a

candidate's program is a complete

failure, it will be terminated in

order to ensure that losses will not

exceed the deposit. Therefore,

based on the conditions set out and

assuming that DCC provides its

fundraising services to candidates

at the usual and normal charge, the

program will not result in a

corporate contribution by DCC, which

would be prohibited under 2 U.S.C.

§441b.

It is assumed that DCC's

calculation of its costs will

include an amount providing a profit

for the company, so that services

are provided at the usual -and normal

charge, rather than at cost. In

addition, it is assumed that DCC

will pay the telephone companies the

usual and normal charges for the

access and services that they

provide.

Contributions from Callers

The entire amount paid by the

caller--not just the net proceeds--

will be a contribution subject to

the limits and prohibitions of the

election law. 11 CFR 100.7(a)(2).

In addition to screening calls

to ensure that only residential

phones are used for the program,

DCC should also ensure that no

payments are collected for calls

from phones outside of the U.S., so

that no contributions are made by

foreign nationals.

4

Volume 16, Num

DCC as Fundraising Agent

As an agent of the contractin

committees, DCC should advise it

clients to include disclaimers in

their printed and broadcast ads; 

disclaimers must state the name 

the committee authorizing and pa

for the solicitation. 2 U.S.C.

§441d(a). The ads should also

notify potential callers that th

will be contributors under the A

in order to help avert contribut

from prohibited sources.

The company must also obtain 

forward to the committees the

information about contributors

required under the recordkeeping 

reporting rules. This informati

includes the name, address,

occupation and employer of any

person whose contributions to a

particular candidate aggregate o

$200 in one calendar year, plus 

date and the amount of each

contribution. DCC must also mak

arrangements with the participat

phone companies to obtain the na

of the individuals whose payment

are included in the proceeds sen

DCC; that information must be

forwarded to the candidate

committees so that they can meet

their recordkeeping and reportin

obligations. This information i

also essential to ensure the tim

refund of any excessive or

prohibited contributions that ar

not discovered through DCC's

screening process. 11 CFR 103.3

DCC must notify contracting

committees of the amounts retain

by the phone company and by DCC 

their service charges. Those fu

subtracted from the contribution

collected, are reportable as the

committees' operating expenses. 

U.S.C. §434(b)(5)(A).

None of the funds passed on 

the client committees may be

commingled with the funds of DCC

which is a corporation. Therefo

for each contracting committee, 

must establish a separate accoun

(ina depository designated by t

committee) and deposit the proce

for each committee into the

appropriate account within 10 da

of DCC's receipt.

Commissioner Josefiak issued 

concurring opinion. (Date issue

March 1, 1990; Length: 8 pages)
April 1990 FEDERAL ELECTION COMMISSION Volume 16, Numbe

(a) $10,000 civil

$175 civil penalty; 

believe

AO 1990-2: Candidate's Use of Excess

Campaign Funds to Secure

Loan for party Committee

The Committee to Re-Elect Congressman Chris Smith may use its excess

campaign funds to purchase a $20,000

certificate of deposit to serve as

collateral for a bank loan to the

Monmouth County Republican

Committee, an unregistered local

party organization. The CD will be

released as collateral when the

party committee repays the loan.

The CD will bear a fair rate of

interest payable to the Smith

Committee.

The Act permits candidates to

transfer excesS campaign funds

without limit to any national, state

or local party committee. 2 u.s.c.

S439a. If the Smith committee has

determined that the $20,000 purchase

can be made from funds that are no

longer needed to defray 1988

campaign expenses, that sum would

qualify as excess campaign funds. 11

CFR 113.I(e). (According to its

1988 post-general election report,

the Smith Committee had no debts and

held $75,434 in cash on hand.)

Because the purchase of the CD will

enable the county committee to

obtain a loan, the purchase should

be treated as a "transfer" to the

party for purposes of section 439a.

The Smith Committee will have

certain reporting obligations

connected to the CD purchase. Any

interest earned on the CD will have

to be reported on Schedule A as

"Other Receipts." 11 CFR 104.3(a)

(4)(vi). The Committee must also

amend its Statement of Organization

to show the bank as a depository of

campaign funds. 11 CFR 102.2(a)(1)

(vi) and (2). The Smith Committee

will not have to report the

disbursement for the purchase of the

CD; the funds remain a Committee

asset and are included in "cash on

hand." 11 crR 104.3(a)(I). (Date

issued: February 16, 1990; Length: 3

pages)

5

MURS RELEASED TO PUBLIC

Publicly released MUR summary

files, as announced in FEC press

releases on February 19 and March 

1990, are listed below. Civil

penalties resulted from conciliati

agreements reached between the

respondents and the Commission.

The summary file for each MUR 

available from the FEC's Public

Records Office.

MUR 2288

Respondents: (a) utah Republican

party (Federal Account/Non-Federa

Account) and treasurer; (b) Shimi

for Congress Committee and treasu

(UT); (c) Republican National Com

mittee and treasurer (DC)

Complainant: M.K. Christensen (U

Subject: prohibited expenditures

from nonfederal account; excessiv

contributions and coordinated par

expenditures; failure to disclose

contributions and expenditures~

disclaimer

Disposition:

penalty; (b)

No reason to

MUR 2548

Respondents: Illinois Democratic

Party (Federal Account/Non-Federa

Account) and treasurer

Complainant: FEC initiated

Subject: Coordinated party expenditures made with funds from

nonfederal account

Disposition: $4,000 civil penalt

KUR 2565

Respondent: (a) Hugo Dunhill

Mailing Lists, Inc. (NY)~ (b) The

ListBank, Inc. (IL); (c) Advance

Management Systems, Inc. (P&L Dir

Mail Marketing Group) (CA);

(d) Children's Home and Aid Socie

of Illinois (IL)

Complainant: E.M. Braden, Chief

Counsel, Republican National Committee (DC)

Subject: Improper use of contrib

utor information

Disposition: (a) $1,000 civil

penalty;· (b) & (c) Reason to beli

but took no further action (d) To

no action

(continue
April 1990 FEDERAL ELECTION COMMISSION Volume 16, Num

MUR 2599

Respondents: Dyson for Congress

Committee and treasurer (MD)

Complainant: M. Frazer, Chairman,

1st congressional District

Republican Committee (MD)

Subject: Erroneous reporting of

financial activity

Disposition: $3,000 civil penalty

MUR 2657

Respondents: New York State

Laborers PAC and treasurer

complainant: FEC initiated

Subject: Acceptance of unidentified

funds from labor union; improper

deposit of funds; failure to

register on time

Disposition: $3,800 civil penalty

MUR 2883

Respondents: Montgomery Ward & Co.,

Inc., PAC (Ward PAC) and treasurer

Complainant: FEC initiated

Subject: Failure to report on time;

failure to notify FEC of change in

filing schedule in timely manner

Disposition: $1,600 civil penalty

MUR 2920

Respondents: (a) Rep. B. Cardin

(MD); (b) Ben Cardin for Congress

and treasurer (MD); (c) Friends of

Ben Cardin I and treasurer (MD)

Complainant: R. Pierpont (MD)

Subject: Failure to register and

report; failure to report and

itemize transfers

Disposition: (a) No reason to

believe; (b)&(c) $250 joint civil

penalty

MUR 2963

Respondents: National Association

for Uniformed Services PAC and

treasurer (VA)

Complainant: FEC initiated

Subject: Failure to report on time

Disposition: $150 civil penalty

MUR 2967

Respondents: Ohio Democratic Party

Federal Campaign Acount and treasurer

Complainant: FEC initiated

Subject: Failure to report on time

Disposition: $2,000 civil penalty

MUR 2995

Respondents: (a) Friends of Harriet

Wieder and treasurer; (b) J. Warmington (CA)

6

Complainant: S. Grindle (CA)

Subject: Excessive contribution

failure to report

Disposition: (a) Reason to belie

but took no further action; (b) 

reason to believe

MUR 3006

Respondents: Oregon Republican

Party and treasurer

Complainant: FEC initiated

Subject: Failure to report on ti

Disposition: $375 civil penalty

MUR 3012

Respondents: Dorsey political F

and treasurer

complainant: FEC initiated

Subject: Failure to report on ti

Disposition: $1,500 civil penal

MUR 2599: Reporting Errors by

congressional Campaign

This MUR, resolved through preprobable cause conciliation,

concerned several disbursements 

Congressman's principal campaign

committee that were inaccurately

disclosed in the committee's

reports. The reports listed 11 

disbursements, totaling $7,225, 

payments to campaign staff membe

for salaries, supplies and consulting fees. The actual recipi

ent of the money was an individu

serving as the Congressman's cam

paign manager and administrative

assistant.

Background

The enforcement matter arose

from a complaint filed by a loca

party committee, which based its

allegations on newspaper account

suggesting that the campaign man

had received committee funds thr

checks that were written to and

cashed by other staff members.

Under the election law and FEC

rules, a committee must disclose 

name of each payee receiving mor

than $200 within a calendar year

Adopting the recommendation 

the General Counsel, the Commis

found reason to believe that the

committee and its treasurer had

violated 2 U.S.C. §434(b)(5)(A) 

11 CFR 104.3(b)(4)(i) and 104.9(

by incorrectly reporting the rec

ent of certain disbursements.
April 1990 FEDERAL ELECTION COMMISSION Volume 16, Numbe

General Counsel's Report

According to affidavits filed by

the committee and staff members in

response to the complaint, the committee had an ongoing practice of

paying consulting fees to persons on

the Congressman's staff who worked

on the campaign in their spare time.

The committee also provided the

campaign manager with blank, presigned checks to enable him to pay

campaign-related expenses and

consulting fees. Between 1982 and

1988, the campaign manager wrote out

11 of these checks to various

members of the staff and asked them

to cash the checks and turn the

money over to him. These 11

disbursements were inaccurately

reported as having been paid to the

staff members rather than to the the

campaign manager. with respect to

some of the misreported disbursements, the treasurer claimed that

the campaign manager failed to

inform her that he was the actual

payee.

Following publicity in the news

media focusing on the payments, but

prior to the filing of the complaint, the campaign manager

informed the treasurer that he was

the actual recipient of some of the

consultin~ fees and other disbursements paid to staff members. The

treasurer amended thelcommittee's

reports accordingly.

In response to the allegations

brought up in the MUR, the respondents claimed that their reporting of

the disbursements was in compliance

with the Act under the "best

efforts" provision of 2 U.S.C.

§432(i). The treasurer argued that

her misreporting of the disbursements was due to the inadvertent

failure of the campaign manager to

provide her with correct information. By filing amended reports as

soon as that information was

provided, the treasurer claimed, the

committee had satisfied the "best

efforts" standard.

The "best efforts" provision,

set forth in section 432(i), states

that when a committee reports

incomplete information it will be

1. The campaign manager died

shortly after the Commission began

its inquiry into the matter.

7

viewed as complying with the Act if

the committee demonstrates that it

used its best efforts to obtain the

information. The General Counsel

disputed the committee's claim to·

have satisfied the "best efforts"

standard, however, because the

provision applies only to instance

where required information must be

obtained from a contributor or a

payee wholly outside the committee

control. Because the payee was the

campaign manager and the candidate

administrative assistant, the

committee could not claim "best

efforts."

The committee also argued that

the allegations raised in the

complaint were moot because the

reports were amended before the

complaint was filed. In the Gener

Counsel's view, however, the committee's correction of the reports

was a mitigating factor that did n

negate the violations at issue.

Commission Determination

The Commission decided to ente

into a conciliation agreement with

the respondents prior to finding

probable cause. The agreement

required the committee to pay a

$3,000 civil penalty and to amend

its reports to identify the actual

recipient of some payments that we

still not accurately disclosed in

the reports.

FEe v. LIFE ~ENDMENT

PAC, INC. (C89-1429WD)

On January 24, 1990, the U.S.

District Court for the Western

District of Washington granted the

FEC's motion for a final order and

default judgment against Life

Amendment PAC, Inc. (Life PAC). Th

court found that Life PAC and Rick

Woodrow, as treasurer, had committe

several violations of the election

law and regulations. Unless

otherwise noted, the following

violations were found in connection

(continue
April 1990 FEDERAL ELECTION COMMISSION -

with Life PAC's 1983 and 1984

disclosure reports:

o Failing to maintain adequate

records with respect to

contributions received from

individuals (2 U.S.C. §432(c)

(1)-(3));

o Failing to retain the required

records for three years (2 U.S.C.

§432(d)) ;

o Failing to keep adequate records

of 129 disbursements, totaling

$72,201 (2 U.S.C. §432(c)(5));

o Failing to maintain the

committee's bank records for three

years and failing to make those

records available for audit,

inspection or examination by the

Commission (11 CFR 104.14(b));

o Misreporting the total amount of

Life PAC's receipts and

disbursements (2 U.S.C. §434(b)

( 2) and (4));

o Failing to properly itemize

disbursements for operating

expenditures (2 U.S.C. §434(b)

( 5) ) ;

o Failing to properly disclose

disbursements made in connection

with independent expenditures

(2 U.S.C. §434(b)(6));

o Failing to properly and

continuously disclose the

committee's outstanding debts and

obligations (2 U.S.C. §434(b)(8)

and 11 CFR 104.11); and

o In the committee's 1987 mid-year

report, failing to identify

contributors (2 U.S.C. §434(b)(3)

(A) and .(B) ) •

For the violations cited above,

the court ordered the defendants to

pay a $55,000 civil penalty.

The court further declared that

the defendants had knowingly and

willfully committed the following

violations:

o Failing to maintain adequate

records with respect to

contributions received from

individuals in 1985 and 1986

(2 U.S.C. §432(c)(1)-(3));

o Failing to preserve the required

records for three years (2 U.S.C.

§432(d));

o Failing to keep bank records for

1985 and 1986 for at least three

years and failing to make those

records available for audit,

inspection or examination by the

FEC (11 CFR 104.14(b)); and

8

Volume 16, Num

o Failing to file four monthly

reports on time from April thr

July 1988 (2 U.S.C. §434(a)(4)

(B) ) •

For these knowing and willfu

violations, the court ordered th

defendants to pay a civil penal

$70,000, to amend and correct th

reports and to pay the Commissi

court costs. The defendants we

permanently enjoined from future

similar violations of the law.

Reprinted from the May 1989 Rec

BASIC RECORDKEEPING FOR

ALL POLITICAL COMMITTEES

All political committees mu

keep records of their receipts a

disbursements. Under section 4

of the Federal Election Campaign

Act, recordkeeping is the

responsibility of the committee

treasurer.

The FEe's recordkeeping

regulations cover three areas:

o The information that your

committee must record;

o The baCk-up documentation tha

your committee must keep; and

o The recordkeeping duties of

persons other than the treasu

This article answers some common

questions about the recordkeepin

rules. It does not discuss some

particular requirements that app

only to certain committees, so

committees should also consult t

appropriate Campaign Guide.

Record Maintenance

Our statement of Organizatio

(FEC Form 1) asks us to identify 

"Custodian of Records." What d

this mean? Although it is the

treasurer of a political commit

who is legally responsible for

keeping accurate records and for

filing disclosure reports, many

committees assign bookkeeping d

to another individual. The nam

address and committee position 

the person who actually maintain

the financial records of a poli
FEDERAL ELECTIOI\J COMMISSION

•

•

•

April 1990

committee must be identified as the

llcustodian of Records" on Form 1.

The treasurer or assistant treasurer

may serve as custodian. 11 CFR

102.2(a)(1)(iii).

Bow long must our committee

retain records? Committee

treasurers must keep back-up records

for each report for three years

after the report is filed. A

photocopy of each report must also

be kept. 2 u.s.c. S432(d); 11 CFR

102.9(c) and 104.14(b)(2) and (3).

Receipts

What are the requirements for

keeping records of contributions

received from individuals? Records

must be kept for all contributions

received. For each contribution

exceeding $50, committee records

must note the amount, the date

received and the donor'S name and

address. For contributions of $50

or less, the Commission has

recommended that a committee record

the same information that the

regulations require for larger

contributions. ADs 1981-48 and

1980-99. If aggregate contributions

from one individual total over $200

in a calendar year, committee

records must identify each

contribution by listing the amount,

the date received, and the donor's

name, address, occupation and

employer. 2 U.S.C. S§431(13)(A) and

432(c); 11 CFR 102.9(a)(1) and (2).

Bow do we record the

contributions received as part of a

mass collection? For small cash

contributions (not more than $50 1 each) collected at a fundraiser, a

committee may record the name of the

event, date and total amount

collected. ADs 1981-48 and 1980-99.

What recordkeeping rules apply

to contributions from PACs and

parties? All contributions from

PACS and party

committees--regard1ess of

amount--must be recorded in detail.

1. The entire amount paid to attend

a fundraiser or other political

event is a contribution. 11 CFR

100.7(a)(2).

9

Volume 16, Numbe

For each PAC and party receipt, th

recipient committee must record th

name and address of the committee

making the contribution, the date

received and the amount. 2 U.S.C.

S432(c)(4); 11 CFR 102.9(a)(3).

Sometimes, someone other than

the treasurer receives a

contribution for the committee and

forwards it to the treasurer. Doe

the person collecting the

contribution have any recordkeepin

duties? Yes. Any person receiving

a contribution on behalf of a

committee must forward the

contribution to the treasurer with

the required information identifyin

the contributor, amount and date

received. Contributions to an

authorized candidate committee mus

be forwarded to the treasurer with

10 days. Contributions to PACs an

party committees that are greater

than $50 must also be forwarded

within 10 days. Contributions to

PACs and party committees that are

$50 or less must be forwarded with

30 days. 2 U.S.C. S432(b); 11 CFR

102.8.

Other rules may also apply if,

for example, the contribution was

earmarked or was received by a

collecting agent. Consult the

Campaign Guide.

What is meant by the "date

received"? The date received is th

date that the person who first

received a contribution took

possession of it. 11 CFR

102. (8) (a).

What if a committee cannot

obtain the necessary information

from a contributor? The treasurer

must be able to prove that he or s

made "best efforts" to obtain the

information. The treasurer should

keep a written record (either a

letter or a written memorandum of 

telephone call) showing a clear

request for the necessary

information. The treasurer must

also inform the contributor that t

reporting of such information is

required by law. 2 u.s.c. S432(i)

11 CFR 104.7.

(continued
April 1990 FEDERAL ELECTION COMMISSION

Disbursements

Must our committee also keep

records identifying disbursements?

Yes. The treasurer must record all

disbursements, regardless of amount,

by noting the date made, the amount

paid, the purpose, and the name and

address of the payee. If the

disbursement is made on behalf of a

clearly identified candidate, the

records must also identify the

candidate and the office he or she

is seeking. 11 CFR 102.9(b)(1).

How detailed does the notation

of the purpose have to be? It

should identify exactly why the

disbursement was made. For example,

"expenses" would not suffice, while

"postage" would. 11 CFR

102.9(b)(1)(iv) and 104.3(b)(3)(i).

Do we need to keep back-up

documentation? Yes, usually. The

treasurer must keep a receipt,

invoice or canceled check for each

disbursement exceeding $200. 11 CFR

102.9(b) (2).

Must our committee make all

disbursements by check? Generally,

yes. All disbursements, except

those made from petty cash, must be

made by check or a similar draft

drawn on the committee's own bank

account. 11 CFR 102.10 and

103.3(a).

When can we use our petty cash

fund to make disbursements? When

payments to one person do not exceed

$100 per transaction. 2 U.S.C.

§432(h)(2); 11 CFR 102.11.

Are there special recordkeeping

requirements for petty cash

payments? The treasurer must record

the names and addresses of the

persons to whom disbursements from

the fund are made, along with the

10

Volume 16, Num

date, the amount and the purpose

If a disbursement is made for a 

candidate, the treasurer should 

note the name of the candidate, 

well as the office sought. 11 C

102.11.

Our committee uses a credit

union. May we use carbon copies 

share drafts or checks as back-u

documentation? Yes, as long as 

treasurer retains the monthly

account statement showing paymen

the credit union of the share dr

or check. 11 CFR 102.9(b)(2)(ii

How should we document advan

to staff for travel and subsisten

For advances of $500 or less, th

committee should keep documentat

of the expense account (such as 

expense voucher) and the cancele

check to the staff member receiv

the advance. If the staff membe

was advanced more than $500, the

name and address of the payee (i

the vendor) should be noted, alo

with the amount advanced, date a

purpose. A receipt, invoice or

canceled check must also be kept

11 CFR 102.9(b)(1) and (2)(i).

If our committee uses a cred

card for making disbursements, w

documentation should we keep? T

committee should keep either its

monthly billing statement or a

receipt for each transaction, alo

with the canceled check used to 

the bill. 11 CFR 102.9(b)(2)(ii

What if our treasurer cannot

locate the required documentatio

for a disbursement? As in the c

of missing contributor informati

the treasurer should be able to 

"best efforts" by providing, for

each payment, at least one writte

effort to obtain a copy of a

receipt, invoice or canceled che

11 CFR 102.9-(d).
•

April 1990 FEDERALELECTION COIVIIV1ISSI01\J Volume 16, Number 

ADVISORY OPINIONS

1989-21: Fundraising by sole

proprietor in cooperation with

candidates, 1:9

1989-25: preemption of state law

limiting party spending on behalf

of candidates, 1:10

1989-26: Automatic bank transfers

from contributor's account to

candidate committee's account,

1 :11

1989-27: Act's preemption of state

law governing solicitations by

state employees, 2:2

1989-28: voter guides distributed by

nonprofit corporation, 3:9

1989-29: PAC established by company

owned by foreign principal, 2:3

1989-30: Payment to Senator for

teaching course, 2:4

1990-1: Corporation's sale of 900-

line fundraising service to

candidates, 4:3

1990-2: Candidate's use of excess

campaign funds to secure loan for

party committee, 4:5

COURT CASES

FEC v.

Franklin, 1:13

Furgatch (83-0596-GT(M)), 2:7

Life Amendment PAC, Inc.

(89-1429), 4:7 ----

v. FEC

Common Cause (89-0524(GAG)),

3:11

NRA (89-3011), 2:7

nUR SUMMARIES

MUR 2823: Excessive contribution

received by candidate committee,

2:4

MUR 2599: Reporting errors by

Congressional campaign, 4:6

800 LINE

Basic recordkeeping rules, 4:8

Combined dues/solicitation

statementsl 1:17

Coordinated party expenditures, 3:6

Designating a principal campaign

committee, 1:19

New treasurer, 2:9

When reimbursements are required in

SSF fundraising, 2:8

11

NATIONAL PARTY ACTIVITY, 1989

An FEC analysis of 1989 year-en

reports filed by the national party

committees showed that the Republi

cans continued to lead the Democra

in fundraising and cash on hand as

they entered the 1990 election yea

Reports filed by the Republican

National Committee (RNC), the

National Republican Senatorial Com

mittee (NRSC) and the National

Republican Congressional Committee

(NRCC) showed increases in receipts

and disbursements over the levels 

1987 (the previous nonelection yea

although none of the three Republican committees regained its high

1985 level of activity. NRSC's

receipts in 1989 jumped $10.5

million over the 1987 level,

increasing not only in contributions from individuals but also in

PAC contributions, which more than

tripled. NRCC ended 1989 with deb

of $794,654--a sharp increase from

$34,922 in debts in 1987 and $0 in

1985. Total cash on hand for the

three Republican committees was

$14 /474,004.

The Democratic National Commit

tee (DNC) saw its receipts drop

slightly in 1989 in comparison wit

previous nonelection years l but

ended the year with $5,430,525 in

cash on hand, primarily because of

cash left over at the end of the

1988 election cycle. The Democrat

Senatorial Campaign Committee (ose

continued its progress in fundraising, while the Democratic

Congressional Campaign Committee

(DCCC), like the NRCC, finished th

year in debt, owing $1.6 million--

almost twice the amount owed by DC

at the end of 1987.

The chart on the following pag

compares nonelection year receipts

of the three major party national

committees over the past three non

election years. More information 

1989 party activity can be obtaine

from a statistical press release

available from the FEC's Public

Records Office.

( continued
April 1990 FEDERAL ELECTION COMMISSION Volume 16,Num

NATIONAL PARTY COMMITTEE

RECEIPTS DURING NONELECTION

YEARS, 1985-89

_ Congressional Campaign Commit

_ Senatorial Campaign Committee

_ National Committee

1987 1989

Democrats

1987 1989 1985

Republicans

Millions of Dollars

110

100

90

80

70

60

50

40

3D

20

10

0

1985

FEDERAL ELECTION COMMISSION

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