December 1986

FEDERAL ELECTION COMMISSION

999 E Street NW Washington DC 20463 Volume 12,Number 

HEARING ON PUBUC FINANCING RULES

On December 3, 1986, the Commission will

hold a public hearing on proposed rules governing

the public financing of Presidential primary and

general election campaigns. 11 CPR Parts 100,

106, 9001 through 9007 and 9031 through 9039.

The deadline for submitting requests to testify at

the public hearing was November 21, 1986.

On August 5, 1986, the Commission had

published a notice in the Federal Resister

soliciting public comment on the proposed rules.

See 51 Fed. Reg. 28154.

AO 1986-31: Contributions to candidate Ru1U\iqr

Simultaneously in Special and

Regular Elections for Senate seat

On November 4, 1986, North Carolina held both a

regularly scheduled general election for a U.S.

Senate seat and a special election to fill the

remainder of deceased Senator John East's term,

which expires on January 3, 1987. The Democratic and Republican candidates who were nominated as their respective parties' candidates in

the regular general election were also nominated

by their par-ties' executive committees as candidates in the special election. ThUS, the two North

Carolina elections featured candidates who were

running simultaneously for different terms of the

same Senate seat.

The Democratic Senatorial Campaign Committee (DSCC), a national committee of. the

Democratic Party, posed several questions with

regard to the Democratic Senatorial candidate's

participation in the two elections. The Commission concluded that separate contribution limits

applied to the candidate's special and regular

general election campaigns, but that contributions

made to either campaign could be used for either

continued on p. 2

REPORTING REMINDER

Congressional candidates active in the

1986 general election are required to file a

post-election report, due by December 4,

1986. PACs and party committees must

also file the post-election report, regardless of their activity.

For reporting details, see page 1 of

the October 1986 Record or call the FEC

.at 800/424-9530.

TABLE OP CONTENTS

REGULATIONS

Hearing on PUblic Financing

Rules

1 ADVISORY OPINIONS

COMPLIANCE

4 Nonfilers

5 Summary of MUR 2081

COURT CASES

5 New Litigation

5 PEDERAL REGISTER NOTICE

STATISTICS

6 Major Party Activity

7 Statistical Charts

8 800 UNE

9 Joint Fundraislng- Further

Clarification
~moor1986 FEDERAL ELECTION COMMISSION , . \/olume 12, NumOOr" 

2

The Record is publisbeo by the Federal Election Commission, 999 E Street, N.W., Wa.shington,

D.C. 20463. Commissioners are: Joan D. Aikens, Chairman; John Warren McGarry, Vice Chairman;

Lee Ann Elliott; 'Thomas J. Josefiak; Danny Lee McDonald; Scott E. Thomas; Jo-Anne L. Coe,

Secretary of the Senate, Ex Officio; Benjamin J. Guthrie, Clerk of the House of Representatives,

Ex Officio. For more information, call 202/376-3120 or toll-free 800/424-9530.

the special or regular general election.* Moreover, the Democratic Senatorial candidate

could use the same principal campaign committee

for both campaigns. (The Commission's conclusions with regard to the committee's treatment

of contributions and expenditures for the two

elections are detailed below.)

The Commission was unable, however, to

reach a decision by an affirmative vote of four

Commissioners on whether, in making coordinated

party expenditures on behalf of the Democratic

Senatorial nominee, a national Democratic party

committee had a single spending limit for both

elections or a separate limit for each. See 2

U.S.C. §441a(d). Similarly, the Commissioners

were divided on whether the $17,500 limit on

national party contributions to Senate candidates

and nominees applied collectively to the regular

and special elections or to each election

separately. See 2 U.S.C. §44la(h).

separate Contribution Limits Apply

for Each Election

Although the two North Carolina Senatorial

elections Were held on the same day for the same

office, the elections constituted two separate

general elections because voters selected an individual to fill two different terms of the office.

The Commission stated in AD 1984~42 that, under

these circumstances, the special and regular

general elections constituted separate elections

with separate contribution limits.* 2 U.S.C.

§44Ia{a){I) and (2). Thus, individuals and political

committees contributing to the candidate's committee were each SUbject to a $1,000 limit for

each election. QUalified multicandidate PACs

were SUbject to a $5,000 limit for each election.

Use of Undesignated and Designated

Contributions

Undesignated Contributions. Under FEC

Regulations, undesignated contributions are normally considered contributions made for the next

regularly scheduled election. 11 CFR 11O.}(a)(2).

Since, however, the North Carolina special and

"'This interpretation of the contribution limits

applies only to the limits mentioned in 2 U.s.C.

section 441a(a). The Commission's decision does

not address the issue of National party

contributions to Senate candidates and nominees,

contained in 2 U.S.c. section 441a(h).

regular general elections occurred at the sa

time and were the next regularly scheduled el

tions after the primary, the Democratic can

date's committee could treat undesignated con

butions as contributions for either the special 

general election. The committee could allocat

portion of an undesignated contribution to b

the special and regular general elections, provi

the allocation did not cause the contributor 

exceed his/her limit for either election. If 

allocation resulted in an excessive contribution 

either campaign, the candidate's committee co

reallocate the excessive portion of the contri

tion without requesting a recesignation from 

contributor.

Designated Contributions. Similarly, con

butions designated for either the special or 

general election could be used for either ca

paign. Thus, the committee did not have to ta

any specific steps to ensure that contributi

designsted for one election. were used solely 

that election.

The Commission distinguished its conclus

in this opinion from its conclusion in Advis

Opinion 1986-17. In that opinion, the Commiss

said that contributions designated for a particu

election had to be used solely for that electi

However, AD 1986-17 concerned contributi

accepted by tne campaign of a candidate who h

not yet established his candidacy in the gene

election. In this case, candidacy was establish

with regard to both the special and regu

general elections.

Separate Campaign Accounts Not Required

The Democratic Senatorial candidate was 

required to authorize separate campaign comm

tees for the special and regular general electio

However, if he used the same campaign comm

tee for both campaigns, the committee had 

account separately for contributions made w

respect to each election. 11 CFR I02.9{e). T

dual accounting procedure would help the co

mittee monitor the separate contribution lim

applicable to each campaign.

The committee was not, however, required 

advise its contributors of the procedure.

Special RepoI"ting Requirements

In itemizing contributions on Schedule A 

its FEe report, the Committee should indic

the election for which each contribution w

made. {It could, however, use contributions 
DED3r'nter 1986 FEDERALELECTION COMMISSION

either election.) On Schedule B, the committee

need not identify the particular election for which

an operating expenditure was made. Commissioner Thomas J. Josefiak filed a concurring

opinion with which Chairman Joan D. Aikens and

Commissioner Lee Ann Elliott agreed. (Date

issued: October 14, 1986; Length: 14 pages,

including concurrences.)

AD 1986-33: Single Campaign Depository

for Three Corporate PACs

Prohibited

The respective separate segregated funds of three

corporations may not designate a single campaign

account for their political activity, even though

they are affiliated by virtue of ties between their

parent corporations. (One of the corporations,

Metropolitan Mortgage and Securities Co, Inc.

owns most of the stock in Consumers Holding

Group Co., Inc., which, in turn, wholly owns

Western United Life Assurance Co. Moreover,

the three corporations have the same chief executive officers and each corporation has employees

who perform duties for the three corporations.)

However, the three separate segregated funds

may designate the same financial institution as

their campaign depository. Each committee

would then establish a separate campaign account

with that financial institution.

Under the Act and FEC Regulations, affiliated separate segregated funds share a single

contribution limit. but they are considered

separate entities for purposes of registration and

reporting. Each such committee must maintain a

separate account. See 2 U.S.C. §432(h)(l); 11

CFR 103.2 and AD 1980-8. (Date issued: October

10, 1986; Length: 3 pages)

AO 1986-35: TV Station's Offer of Free Air , Time to Candidates

The opinion summarized below (AD 1986-35) was

vacated on October 23, 1986, after the Commission voted to reconsider it. On November 20,

1986, the Commission reconsidered advisory opinion request 1986-35 but was unable to approve a

new opinion by the requisite four-vote majority.

Summary of Original Opinion Vacated by the

Commission

Rep. Howard Coble may not accept free

broadcast time from WGGT-TV for airing political

ads prepared by his reelection campaign. Since

the tv station is owned by a corporation, the

acceptance of free broadcast time by the Coble

campaign would constitute the receipt of a prohibited corporate contribution from the station.

To avoid accepting a prohibited contribution, the

3

Volume 12, NumOOr 1

Coble campaign would have to pay WGGT-TV th

usual and normal charge for the broadcast time. *

In offering equal amounts of free broadca

time to all the House candida tes in Rep. Coble

Congressional district (i.e., eighteen au-secon

slots to each candidate), WGGT-TV said that 

hoped to increase voter awareness of 1986 federa

elections and to combat voter apathy. The fre

time offered to the candidates, however, would b

subject to immediate preemption by cash adve

tisers.

Under the Act and FEC Regulations, med

corporations (as other corporations) are prohibite

from making contributions to federal candidate

This prohibition applies to in-kind contribution

made by corpora tions, such as providing service

(free broadcast time) or goods. 2 U.S.C. §§441b

441b( 2) and 43l(8)(A)(i).

Commission Regulations exempt from the de

finition of contribution any "cost incurred 

covering or carrying a news story, commentary o

editorial by any broadcast station•..unless th

facility is owned or controlled by any polttic

party, political committee, or candidate." 

CFR 100.7(b)(2}; 2 U.S.C. §43l(9)(B)(i). In th

case, however, the tv station's offer of fre

broadcast time to federal candidates would n

qualify as a legi timate press function. The tim

alloted to each candidate would come from tim

otherwise sold to commercial advertisers an

could be preempted by them. Moreover, the 30

second political ads provided by the candidat

would be the same as their paid ads aired ov

other stat ions,

Commissioner Thomas E. Harris filed a di

sent. (Date issued: September 26, 1986; Length: 

pages, including dissent)

AO 1986-36: Contributions to House Candidates

by Committee of Incumbent Seekin

House Committee Chairmanship

Congressman Charles E. Bennett's 1986 reelectio

campaign (the committee) may use its exce

campaign funds to make contributions to oth

House candidates running in the 1986 gener

election. Since the committee is considered 

"person" under the election law, it may give up 

$1,000** to each general election candidat

However, its total contributions to the Hou

candidates would not be SUbject to an overa

annual limit (i.e., $25,000). That limit is impose

only on contributions from individuals, n

committees.

*This means the campaign must pay the lowe

unit rate, or comparable use rate, under 47 U.S.

section 315(b) and its applicable rules and regul

tions. "' ..By contrast, a multicandidate committe

that is not authorized by a candidate may give u

to $5,000 per candidate, per election.
Decerncer 1986 FEDERAL ELECTION COMMISSION \bIume 12, Numoo

FEC PUBLlSHES NONPILERS

In late October, the Commission publis

the names of House and Senate campaigns t

failed to file reports of financial activity due 

October.

On October 30, the Commission published 

names of five House campaigns that did not 

the third quarter report due by October 

House campaigns failing to meet the filing de

line were located in: Arizona (4th Congressio

District>; Kentucky (3rd Congressional Distri

Michigan (13th Congressional District>; New Y

(6th Congressional District) and Texas (12th C

gressional District).

On OCtober 31, the Commission published 

names of Congressional campaigns involved in 

1984 general election that did not file a p

general election report. In addition to a N

Hampshire Senate campaign, 20 House campai

(listed below) failed to meet the October 

deadline.

The election law requires the agency to p

lish the names of nonfiling candidates. Com

ance actions against nonfilers are decided o

case-by-case basis. The law gives the Comm

sion broad authority to initiate enforcem

actions resulting from infractions of the l

including civil enforcement and imposition of c

penalties.

Since Congressman Bennett is unopposed in

the general election, he explains that "his campaign funds••.will not be needed in any great

extent this year•.••"

The Act states that a campaign may use its

excess funds for IIlawful purposes." 2 U.S.C.

§439a; 11 CFR 113.2. In previous advisory opinions, the Commission concluded that a Congressional campaign's contributions to other federal

candidates constituted a lawful use of the

campaign's funds, provided its contributions complied with the Act's dollar limits. See AOs

1981-15, 1983-14 and 1985-13. The Commission

noted that its conclusion was not affected by

Congressman Bennatt's candidacy for a House

committee chairmanship. Commissioner Thomas

J. Josefiak filed a concurring opinion. (Date

issued; October 24, 1986; Length: 4 pages,

including concurrence)

ADVISORY OPINION REQUESTS

The following chart lists recent requests for

advisory opinions. The full text of each AOR is

available to the public in the Commission's Office

of Public Records.

AOR Subject

1986-38 Individual's financing of media ads to

promote conservative candidates. (Date

made pUblic: October 16, 1986; Length:

1 page, plus l-page supplement)

1986-39 Excess campaign funds used to establish

trust for minor. (Date made public:

October 22, 1986; Length: I page)

1986-40 Building fund established by state party

committee as separate federal account.

(Date made public: October 30, 1986;

Length: I page)

1986-41 compensation of incorporated trade

association's employees increased to encourage contributions to nonconnected

PAC. (Date made publici October 31,

1986; Length: 2 pages)

4

State

American Samoa

Arizona

California

Florida

Illinois

Kansas

Kentucky

Louisiana

Maryland

Michigan

New Jersey

New York

New York

New York

New York

New York

New York

Ohio

South Carolina

Texas

Co~ionalDistric

4th

31st

18th

7th

2nd

3rd

3rd

3rd

13th

_ 7th,

6th

21st

12th

7th

5th

4th

11th

6th

12th
FEDERAL ELECTIOI\J COMMISSION Volume 12, Numte

District 

October 

contin

NEW LITIGATION

5egerblom v. FEe

Pursuant to 2 U.S.C. §437g(a)(8)(A), 

Richard Segerblom asks the court to declare 

the FEC acted contrary to la w by failing to ac

his administrative complaint within 120 days a

he filed it.* The complaint concerned poten

violations of the election law by James San

and the Santini for Senate Committee (the C

mittee), Mr. santint's principal campaign comm

tee for his 1982 Senate bid.

In the complaint, Mr. Segerblom claimed 

the respondents had used contributions for 

Santini's general election campaign to pay 

penses of his primary campaign. Mr. Segerb

further alleged that the Committee had frau

lently reported: 1) refunds of these gen

election contributions and 2) a zero balance 

both the primary and general election account

the Committee.

Mr. Segerblom therefore asks the court 

order the FEC to:

o Complete an investigation of these alle

violations within 30 days; and

o Issue certain discovery requests attached to 

complaint.

U.S. District Court for the

Columbia, Civil Action No. 86-2843,

1986.

Commission Determination

The Commission voted to find reason 

believe that both the PAC and the candid

committee had violated the Act, respectively, 

accepting and making excessive contributio

Further, the Commission found reason to beli

that the candidate committee had failed to 

its report.

A conciliation agreement was concluded p

to the Commission's finding "probable cause 

believe" the Act had been violated. In the agr

ment, the respondents each agreed to pay a c

penalty of $2,750.

*Mr. Segerblom filed his original compl

with the FEe on March 28, 1986. On April 

1986, he filed a supplement to the complaint.

5

D€o3mOOr1986

General Counsel's Report

The Cornmission's investigation indicated

that a candidate committee paid $23,336 for the

printing of a book and subsequently gave many

copies to a PAC controlled by the same candidate. The PAC reported the transaction as a

$5,000 in-kind contribution from the candidate

committee and as an $18,336 debt to the

candidate committee for the remainder of the

transaction. SUbsequent reports filed by the PAC

and the candidate committee indicated that the

obligation remained unpaid with no evidence of

any efforts by the candidate committee to collect

the debt.

Under federal election law, a contribution is

any gift, subscription, loan, advance, or deposit of

money or anything of value made by any person

for the purpose of influencing an election for

federal office. 2 U.S.C. §43l(8)(A). Under the

Commission's Regulations, extension of credit

beyond normal business practice is considered a

contribution. See 11 CFR 100.7(a)(4). The

General Counsel regarded the debt as the extension of credit beyond normal business practice

and, therefore, a contribution. Since the amount

of the credit extension exceeded the contribution

limit, the debt represented an excessive

contribution. The General Counsel recommended,

accordingly, that the Commission find reason to

believe that:

o The PAC had violated 2 U.S.C. §441a(f) by

accepting an excessive contribution from the

candidate committee; .

o The candidate committee, in turn, had violated

2 U.S.C. S441a(a)(I) by making an excessive

contribution to the PAC; and

o The candidate committee had violated 2 U.S.C.

§434(b)(4)(G) by not reporting the book transaction until 10 months after it had occurred.

MUR 2081: Extension of Credit Beyond

Normal Business Practice

This MUR, resolved through conciliation, was

triggered by the sale of books by a candidate

committee to a political action committee (PAC)

controlled by the same candidate. The transaction, which involved the extension of credit

beyond the normal business practice, resulted in

an excessive contribution by the candidate committee to the PAC.

Complaint

The MUR was internally generated by the

Commission in the normal course of carrying out

its administrative responsibilities. A review of

the PAC's quarterly report indicated receipt of

some books from the candidate committee. The

PAC reported the transaction as an in-kind contribution from the candidate committee and as a

debt owed to the candidate committee. The debt

remained unpaid for more than ten months.
FEDERAL ELECTION COMMISSION Volume 12, Nt..lm'oo

ACTIVITY OF MAJOR PARTIES'

NATIONAL COMMITTEES

Figures released before the 1986 gene

election on the financial activity of the Repub

can and Democratic Parties' national comm

tees" showed that the RepUblican national co

mittees maintained a 5-1 lead over their Dem

cratic counterparts in overall activity. Howev

in terms of support to candidates (both contrib

tions and coordinated expendltures" * on th

behalf), the gap between the Republican and D

mocratic national committees had diminish

(See chart II on opposite page.)

Fro m January 1, 1985, through October 

1986, Republican national committees report

receipts of $190.9 million and disbursements 

$185.5 million. *** Their Democratic count

parts disclosed receipts and expenditures amou

ting to $37.7 million.

The national committees of each party had 

much lower cash balance remaining in m

October 1986 than in mid-October 1984. Repu

lican national committees reported total rema

ing funds of $6.7 million, as compared with $1

million in 1984. Democratic committees report

a cash-an-hand balance of $754,516, as compar

with the $3.3 million balance they reported 

1984.

Chart I below shows total receipts for ea

par-ty's national committees. Chart II depicts t

committees' support of 1986 Congressional can

dates.

More detailed information may be obtain

on the activity of each major party's natio

committees from the FEC's October 29, 19

press release. For copies of the release, conta

the FEe's Public Records Office by calli

376-3140 locally or, toll free, 800/424-9530.

*The Democratic Party's national committe

are: DNC Services, the Democratic Senator

Campaign Committee and the Democratic Co

gressional Campaign Committee. The Republic

Party's national committees are: the Republic

National Committee, the National Republic

Senatorial Committee (NRSC) - Expenditures, t

NRSC - ContMbutions, the National Republic

Congressional Committee (NRCC) - Expenditur

and the NRCC - Contributions.

**Limited expenditures made by [Xtrty comm

tees on behaZf of federal candidates in gene

elections. See 2 U.S.c. section 441a(d).

***These figures do not incZude activity for t

NRCC - Expenditures between October 1 and 

1986.

6

DEmnter 1986

Notice Title

1986-10 11 CFR Part 100, 106,9001 through 9007

and 9031 through 9039: Public Financing

of Presidential Primary and General

Election Candidates; Announcement of

Public Hearing (51 Fed. Reg. 41110,

November 13, 1986)

FEDERAL REGISTER NOTICE

Copies of this notice are available in the

Public Records Office.

FEC v. Hayes for Congress Committee

The FEC asks the court to declare that the

Hayes for Congress Committee (the Committee)

and the Committee's treasurer, James L. Wright,

violated the election law by accepting excessive

contributions and failing to fUlly disclose certain

bank loans. (The Committee served as Mr.

Charles Hayes' principal campaign committee for

the 1983 special election held to fill an Illinois

House seat.)

Specifically, the FEC asks the court to

declare that the Committee and its treasurer

violated section 441a(f) of the election law by

accepting excessive contributions from:

o Citizens Action Non-Partisan Political Action

Federal Campaign Committee of the Illinois

Public Action Council (CANPAC*); and

o Endorsers of two bank loans. ** (One of the

endorsers had also made a direct contribution

to the campaign in excess of the Iimits.)

The FEC further asks the court to:

o Declare that the defendants failed to report

fully the amount and nature of the two bank

loans and a personal loan from the candidate;

o Permanently enjoin the defendants from further

violations of the election law; and

o Assess a civil penalty against the defendants

amounting to the greater of $5,000 per violation or an amount equal to 100 percent of the

total violations.

U.S. District Court for the Northern District

of Illinois, Civil Action No. 86C7865, October 16,

1986.

-

*Since CANPAC did not have multicandidate

committee status, it was only eligible to contribute up to $1,000 to the Committee.

**An endorsement or guarantee of a loan, like a

regular loan, counts as a contribution from the

endorser or guarantor to the extent of his/her

portion of the outstanding balance of the loan. 11

CFR 100. 7(aXixuc:
million

million

Volume 12, Numl:er 1

$'1~.8 million

10

3 4 5 6 '1 8 9 

• ContributionsCOOrdinated

Expenditures-·

Republican Party

REPUBLICAN

Millions of Dollars

5

Millions of Dollars

FEDERALELECTION CDMrvllSSION

National

Committee

Senatorial

Committee

Congressional

Committee

DEMOCRATS

o

-.

•

;:~:j:~t:~:j:~:~:~:j:~:j:~:j:~:j:j:j:~g. - $15.2 million

- $11.5 million

-$11 million 0-----Democratic party

50·· ...

25

75

*IncLudes total receipts minus transfers between each party's respective committees.

* Figures do not include contributions earmarked to candidates through national party committees.

**The Democratic National Committee made aU its coordinated party expenditures for Wolte

Mondale's 1984 Presidential campaign.

7

CHART n

NATIONAL PARTY SUPPORT OF FEDERAL CANDIDATES, 111/85 - 10/15/86

Total Democratic

Support

Total Republican

SuppOrt

National

Committee

100· -..

senatorial

Committee

Congressional

Committee

CHART I

RECEIPTS- OF NATIONAL PARTY COMMITTEES, 1/1/85 - 10/15/86

Millions of Dollars

2 00 . ~._c<~ __.....

125·

175--·· .,
FEDERAL ELECTION COMMISSION

vity involving a separate segregated fund, 

section 102.17 refers to joint activity betw

other types of committees, including candi

and party com mittees.

\blume12, Numb

University of Southern

California

Washington Public Affairs

Center

Washington, D.C.

Vice Chairman John Warren

McGarry

Patricia Klein, Public Affair

Specialist

County Clerks Association o

California

Sacramento, California

Penelope Bonsall, Director,

National Clearinghouse on

Election Administration

Council on Government

Ethics Laws

8th Annual Conference

Hartford, Connecticut

Vice Chairman John Warren

McGarry

Charles N. Steele, General

Counsel

Lawrence Noble, Deputy

General Counsel

Kent Cooper, Assistant Staff

Director for Public

Disclosure

Louise Wides, Assistant Staff

Director for Information

Services

PUBLIC APPEARANCES

12/2 and

1/27

12/3-5

12/4

JOINT FUNDRAISING:

FURTHER CLARIFICATION

In last month's Record article on joint

fundraising, the following footnote appeared:

PA Cs established by corporations and

labor organizations (i.e., separate segregated funds) may not engage in joint

fundraisil1g; nor may unregistered

committees sponsored by corporations

and unions. 11 CFR 102.17(a)(3). Corporate and labor separate segregated

funds may, however, raise funds

through collecting agents, foHowing

the rules at 11 CFR 102.6(b).

This statement does not suggest any recent

change in Commission policy. Rather, the statement was intended to alert readers to the fact

that a separate segregated fund which jointly

raises funds with another person (for example, a

federal PAC with an affiliated state PAC or a

federal PAC with its parent organization) should

be guided by the regulations at 11 CFR l02.6(b)

-- the "collecting agent" regulations. These rules

were written specifically to deal with issues

unique to PACs established by corporations and

labor organizations.

By contrast, the regulations contained in 11

CFR 102.17 -- referred to as the "joint fundraising" rules -- pertain to the joint solicitation

of contributions by candidates, parties and other

political committees.

In effect, then, two sections in the regulations pertain to joint activity with regard to

raising funds. Section I02.6(b) treats joint actiFEDERAL ELECTION COMMISSION

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