May 1992

FEDERAL ELECTION COMMISSION

999EStreet NW Washington DC 20463 Volume 18, Num

PUII.le FUNDING

rEX: .CIAIRMAN PRJI)IC1'S 1996 SIlORI'FALL

In an April 3 press conference, Chairman Joan D. Aikens announced that, although

the Presidential Election campaign Fund

will narrowly.avoid a shortfall for this

year's Presidential elections, the Fund

will definitely run out. of money for the

1996 elect.ions unless Congress takes

action. The FEC estimates that, without a

legislative change in the mechanism for

funding the elections, the 1996 shortfall

will run between $75 and $100 million.

Chainnan Aikens said a shortfall was

inevitable due to a "fatal flawP in the

public funding program: The taxpayer

chec)coff on federal income tax retu rns-the

sole source of public funding for Presidential elections-has remained at one dollar

since its inception in 1973; by contrast,

payouts to candidates and convention commttees are indexed for inflation. For

example, this year's Democratic and Republican nominees in the November election

will each receive $55.2 million in public

funds-more than double the $21.8 million

each candidate was paid in 1976. The C~

mission has alerted Congt"Rss to the need

for legislative change if the public funding system is to survive.

The Chai~ also explained why a 1992

shortfall, predicted earlier by the FEC,

has been averted.

First, 1992 requests for matching funds

have been much lower than in previous election cycles; thus far, candidates have

received only $17 million. This is partly

the result of the candidates' late start

and the r;Inal! number of candidates-only

nine-that have qualified for matching

funds.

Second, II'()re money was available for

matching fund payments than the FEe had

anticipated. Inflation was lower than

previously estimated, leavin<J more money

available for matching funds once public

funds were set aside for the major party

nominees, whose grants are indexed to

inflation. Additionally, checkoff receipts

for tax returns processed during the fi

two months of this year totaled $5.5 m

lion, $1.6 million more than last year.

The Chaiman said it was too early to t

whether this was due to increased publi

awareness or merely to more taxpayers

filing early.

Chairman Aikens released informatio

checkoff participation for tax returns

(contin

TABLE OF CCN'l'I!Nl'S

PUBLIC FUNDDG

1 1996 Shortfall

2 1\pril Matching Fund payments

BEX.;lJLATICNS

3 proposed Rules on Transfers from Can

date's Nonfederal Campaign

4 proposed Rules on Disclaimer Notices 

Fundraising projects

4~: Corporate;'Labor, DC

LmISlATICfi

5 FEe Recortmlends Changes to Election L

5~: Campaign Finance Law 

5 PUBLICATIOOS: 1992 Disclosure Direc

6 AfNISORY OPINICIm

9 COORT CASES: New Litigation

REPORl'S

9 Change in Ohio and South Carolina

Primary Dates

AlJDITS

10 1988 Robertson Campaign

10 Correction to Bush flepayment

11 FEI>EML Rl!DISTER NOl'ICES

11 PUBLIC .APPFoARMCES

12 INDEX
*These candidates have withdrawn from the

Presidential race. Governor wilder withdrew on January S. Senator Kerrey on March

6, Senator Harkin on March 9 and former

Senator Tsongas on March 19.

APRIL Rl\'1'CBING n.m PAYPIENl'S

On March 30, the Commission certified

over $4 million in matching fund payments

to eight candidates. The U.S. Treasury

made the payments early in April. As of

the April payment, 1992 Presidential primary candidates have received $16.8 million

in matching funds, as shown in the table.

candidates have requested $5.8 million for

the May payment.

Matching Fund Payments

Republicans

patrick Buchanan $1,043,306 $ 2,091,035

George Bush 666,877 4,901,097

Democrats

Jerry Brown 306,798 857,506

Bill Clinton $1,112,939 3,169,603

*Tom Harkin 185,721 1,734,407

*Bob Kerrey 357,738 1.624,3'80

*Paul Tsongas 347,647 1,093,389

*Douglas Wilder 0 289,027

New Alliance Party

Lenora Mani 143,693 1,033,094

Totals $4,164,719 $16,793,739

filed last year. The first question on the

federal tax form is: "DO you want $1 to go

to the presidential Election Campaign

Fund?" Nationally, 19.5 percent of returns

filed in 1991 had the "yes" box checked.

While participation reached a high of 28.7

percent for returns filed in 1980, it has

hovered at about 20 percent in recent

years. State-by-state statistics for

returns filed in 1991 showed that Hawaii

had the highest participation rate (32

percent) and Idaho, the lowest (9 percent).

(call the FEe for information on specific

states. )

The press conference was also held to

urge the 40 million Americans who had yet

to file their tax returns to "make an informed choice" when answering the checkoff

question. "Taxpayers typically check a box

or leave it blank based on misconceptions,

not facts, It the Chainnan said. "Whether

they check 'yes' or 'no,' we want taxpayers

to make an informed choice." To educate

taxpayers on the checkoff during the recent

tax season, the FEe sponsored a nationwide

public awareness program that featured

media public service announcements as well

as a toll-free checkoff hot1ine to order a

free brochure explaining the Presidential

Fund.

"We want taxpayers to know that presidential candidates who accept these public

funds mu.st limit their campaign spending,"

the Chai~ said. She also stressed that

the funds can only be used for legitimate

campaign expenses.

Chairman Aikens pointed out that checking uyes " does not change the filer's tax

obligation or reduce his or her refund; it

simply directs that one dollar of U.S.

Treasury money be used for Presidential

elections.

Om11ative

Total

Volume 18, Number 5

April

Payment

May 1992 FEDERAL ELECTION COMMISSION

Federal Election coamissian, 999 E Street, _, washington, DC 20463

800/424-9530 202/219-3420 202/219-3336 (TOO)

Joan D. Aikens, Chairman

Scott E. 'ltlomas, Vice Chairman

Lee Ann Elliott

Danny L. McDonald

John warren McGarry

Trevor Potter

walter J. Stewart, Secretary of the senate.

Ex Officio Commissioner

Donnald K. Anderson. Clerk of the House of

Representatives, Ex Officio Commdssioner 

2
FEDERAL ELECTION COMMISSION

•

•

•

May1992

REGULATIONS

PROPOSED ~<llS CliI TlWlSFERS FRlJI

CANDlIlM'E'S IDiFEDERAL CANPAIW

on April IS, the Co:mdssion published a

Notice of Proposed Rulemaking seeking

comments on a proposed regulation on transfers from a candidate's state or local

campaign to his or her federal campaign (57

FR 13054). The current regulations at

11 eFR 110.3(c)(6) allow a nonfederal

campaign to make such transfers as long as

the transferred funds do not contain

contributions that are impermissible under

the Act (i.e., "soft money",) The proposed

rule responds to a petiticn for rulemaking

filed by Congressman William Thomas (RICA).

His petition alleges that the regulations

fail to prevent nonfederal campaigns from

using impermissible funds to raise permissible contributions that are then transferred to federal campaigns.

The Commission also seeks comments on a

number of related questions and alternative

approaches, described below. Interested

parties are welcome to raise other issues

that the commission should address. Comments must be received by May 15 and should

be addressed to Ms. Susan E. Propper,

Assistant General Counsel, 999 E street,

NW, washington, DC 20463.

Should the Commission decide to promulgate a new rule on nonfederal campaign

transfers, it would not become effective

until the next election cycle.

Exclusion of COntributions Raised with

Impermissible Funds

The proposed regulation would require a

nonfederal campaign to exclude a contribution from the amount transferred if it

resulted from a fundraising activity

financed with funds prohibited under the

Act. The Commission is also considering an

amendment that would require the federal

campaign, when reporting the receipt of a

nonfederal transfer, to certify that the

transferred contributions were raised using

permissible funds.

Partial Impermissible Funding. The

agency seeks comments on certain practical

questions raised by the proposed rule. If

a fundraising activity was only partially

paid for with impermissible funds, should

all the contributions received from that

fundraiser be ineligible for transfer to

the candidate'S federal campaign? Or

should only a portion be ineligible based

3

Volume 18, Numbe

on the percentage of permissible funds us

to finance the fundraising activity?

If the percentage approach were

adopted, how should the candidate determi

what percentage of fundraising expenses w

paid with permissible funds if multiple

disbursements for the fundraiser were mad

over several clays? Should the candidate

examine the cash on hand on each disburse

ment date to determine the percentage?

What if, on a given disbursement day, the

ratio of permissible to impermissible fun

in the account is lower than the ratio of

permdssible to impermissible funds ultimately received from the fundraising

act!vity? Should the candidate be allowe

to offset lower ratios on same disburseme

days with higher ratios on other disburse

ment days, thereby maximizing the amount 

permissible funds eligible for transfer?

Alternative: Prohibit All Nonfedera

Transfers. RecogniZing the difficulty of

demonstrating that transferred contributions were raised with permissible funds,

the Commission 1s seeking comments on an

alternative proposal that would prohibit

all transfers of funds from nonfederal to

federal cauq;>aigns.

Contributor Authorizations

The proposed rule would require a

nonfederal campaign to inform contributo

of its intention to transfer their contr

butions to the candidate's federal

campaign. The nonfederal campaign would

have to exclude from the transfer the

contributions of any contributor who did

not provide a written authorization for t

transfer. The notice also seeks cormnent 

a second approach that would allow the

nonfederal campaign to transfer a contrib

tion as long as the contributor did not

object.

Nonfederal campaign's Segregation of

Permissible Funds

Some nonfederal campaigns may choose 

set up separate accounts for permissible

and impermissible funds in order to simp

fy the recordkeeping process for future

transfers to a federal campaign. under

such circumstances, should the activity b

seen either as election-influencing activ

ity that may trigger federal candidate

status under 11 eFR 100.3 or as testingthe-waters activity under 11 CPR

lOO.7(b)(1)?

(Regulations continued next pa
May 1992 FEDERALELECTION COMMISSION

PIIJPOSE[) Bl!QTLM'ICfiS Cfi DISCLAIMER OOTICES

AND SPECIAL FlINDRAIS!N3 PROJFC1'S

The C~ssion recently published a

Notice of proposed Rulemaking seeking camments on draft regulations that address two

areas of change: (1) the disclaimer notice

required on solicitations by unauthorized

committees; and (2) the use of a candidate's name in the name of an unauthorized

commdttee's fundraising project. (unauthorized committees are those not authorized by a candidate, such as party committees and PACS).

The proposed rules, summarized below,

were published in the Federal Register on

April 15 (57 FR 13056). Comments are due

on May 15 and should be addressed to Ms.

Susan E. Proppert Assistant General Counsel, 999 E Street, NW, Washington, DC

20463.

Disclaimers by unauthorized CCIIIDittees

under the current disclaimer regulations, when an unauthorized committee

solicits funds for itself through general

public advertising but does not advocate

the election or defeat of any candidate,

the disclaimer must simply state who paid

for the communication. See 11 CFR

110.11(a)(1)(iv){A). The proposed rule

would additionally require the disclaimer

to state whether the cornnnmication was

authorized by any candidate or candidate's

committee, even if the solicitation did not

mention any candidate. This additional

disclaimer requirement, however, would not

apply to solicitations by national party

commi etees.

The proposed change would conform the

regulation with 2 U.S.C. §441d(a)(31.

Use of candidate's Name in

Special Project Name

While an uneutnorf eed committee is

prohibited from using a candidate's name in

the committee's registered name, the com- ~ttee may solicit contributions for itself

Wlder a special project name that includes

the name of a candidate, such as "Americans

for John Doe.1I Concerned that the public

could misinterpret these solicitations to

mean that contributions would be going to

the candidate, the Commission has proposed

the following rules to minimize the potential for confusion in this situation.

a A new regulation Wlder 110.11(a)(1){iv)

would require the disclaimer to state the

name of the committee paying for the

solicitation and whether the special

project has been authorized by the candidate named in the project title or any

other candidate. (For example: "Paid

for by the xYZ Committee. Not authorized

4

Volume 18, Number5

by John Doe or any other federal candidate.")

o under proposed l02.14(d), the committee

would have to return or refund any checks

received in response to the solicitation

if they were not made payable to the committee's registered name.

The Commission also seeks comments on

related issues:

o Whether the regulations should treat

party committees differently, given a

party's interest in using a candidate's

name in a fundraising event for another

candidate or for general party fundraising;

o Whether the use of a candidate's name in

the name of a special project should be

banned unless the candidate gives permission; and

o Whether the regulations should specify

the size and placement of the proposed

disclaimer notice.

lXlRPORATI!/LAO CDiFEIU'NCE ~, OC, MAY 21-22

This one and one-half day conference will focus on the canq;>a.ign

finance law's requirements for corporations, trade associations, labor

organizations and their PACs. Call

the FEC to receive a conference

invitation (800/424-9530 or 202;219-

3420) .

The conference will be held at the

washington Court Hotel, 525 New Jersey

Avenue, NW, Washington, DC 20001-1527;

202/628-2100. (When making reservations, notify the hotel that you will

be attending the Fee conference).

The $105 registration fee must be

postmarked by May 7 to avoid a $10

late fee. The fee includes materials,

breakfasts, lunch and refreshments.
FEDERAL ELECTION COMMISSION

•

•

•

May 1992

LEGISLATION

FEe caAiu:s TO ELECl'IW INf

On April 3, the Commission sent its

1992 legislative recommendations to the

President and the Congress. The document

asked Congress to consider making several

changes to the Federal Election campaign

Act arid the public fW1ding statutes. The

Commission believes that the reconunendations, if adopted, would enhance the agencyl s ability to administer and enforce the

law. Included in the package of 36

recommendations were three new proposals.

c $25,000 Annual Limit. The FEe suggested

that an individual's contribution to a

candidate should count against the

$25,000 annual limt for the calendar

year in which the contribution is made

rather than the year of the candidate's

election. This would eliminate confusion

and inadvertent violations when individuals make contributions in the current

year for elections to be held 1n future

years or make contributions to retire the

debts of elections held in previous

years.

o Incomplete contributor Information. To

address the recurring problem of reports

lacking complete contributor information,

the FEe recommended that coromittees be

required to make an additional request

for any missing information after a contribution is received. The request would

have to state that the committee was required to disclose the information under

federal law. The Commission also suggested that contributors be made liable

for submdtting information that they know

to be false.

o Honoraria Teclmical Amendment. Because

the commission has no jurisdiction over

honoraria transactions occurring after

August 14, 1991, the date When 2 U.S.C.

§441i was repealed, the Cammdssion asked

Congress to delete honoraria from the

list of definitions of what is not a

contribution (2 U.S.C. §431(8)(B)(xiv».

of the remaining recommendations, submdtted in previous years, several sought

changes in the public funding program. One

of these alerted Congress to the projected

1996 shortfall in the Presidential Election

campaign Fund, stressing that legislative

action is essential to preserve the public

funding system (see page 1). The agency

also asked Congress to amend the matching

fund program by imposing stricter eligibility requirements and by eliminating the

state-by-state spending limits.

5

Volume 18, Numb

1992 SUVIARY OF STATE CAMPAIGN

FINl\NCE INIS

Recently published by the FEe's

Clearinghouse on Election Adndnistration, ~ign Finance Law 92 contain

summanes of the campaign finance law

in each state with citations to the

relevant state code. It also include

quick reference charts listing each

state's reporting requirements, contribution and solicitation restrictions and expenditure limitations.

To purchase a copy, list the title

and stock number (052-006-00052-0) an

enclose a $28 check made payable to

the superintendent of Documents. Sen

the order to: Superintendent of Docu

ments, U.S. Government printing

Office, Washington, DC 20402.

For further information on this an

other Clearinghouse publications, cal

800/424-9530 (ask for the Clearinghouse) or call the office directly at

202/219-3670.

PUBLICAl'lONS

1992 DISCLOSURE DIREC'IDRY AVAILABLE

The FEe recently released the 1992

edition of the combined Federal/State

Disclosure Directory, a guidebOok listin

the state ana federal offices responsib

for disclosing reports and information i

a number of areas.

o Campaign finance

o Personal finances of officials and

candidates

o Public financing

o Spending on state initiatives and

referenda

o Lobbying

o Candidates on the ballot

o Election results

o voting accessibility

o Election-related enforcement actions

o Corporate registrations

The directory identifies office sup

visors and other individuals knowledgea

in the subject areas. Fax numbers are a

listed.

A limited number of copies are avai

able free of charge. To order, call

800/424-9530 and ask for PUblic Records 

dial the office directly at 202;219-414
May 1992 FEDERAL ELECTION COMMISSION Volume 18, Number 5

ADYISMY OPINI<R-~

Recent requests for advisory opinions

(AORs) are listed below. The full text of

each AOR is available for review and comment in the FEe's Public Records Office.

AOR 1992-12

candidate's ownership of campaign van after

campaign is over. (Requested by LaRocco

for congress; Date Made Public: Mrch 26,

1992; Length: 4 pages)

1Qt 1992-13

Loans to law firm of attorney considering

becoxning a candidate. (Requested by James

M. Blackburn; Date Made Public: April 9,

1992; Length: 13 pages)

JlDR 1992-14

Candidate's instructions on use of excess

campaign funds in event of his death.

(Requested by Congressman Dan Burton; Date

Made Public: April 21, 1992; Length: 1

page)

AL'I.'I!JI'i\TE DISPOSITIW

OF ADVISORY OPINICN RfQJEST

AOR 1991-30: Tax Exempt Corporation's

LOtbyinq ccmun.ications

to contributors Listed on

FEe Reports

Requested on behalf of Citizens for a Sound

EcOl101'\1:f, Inc. on April 2, the Conmti.ssion

failed to approve an advisory opinion by

the requi.red four votes. See Agenda

Documents #91-104 and #92-43.

6

M 1991-32: Charqes for Incorporated

COnSUltant's Ftmdraisinq

services

CEC. Inc., a new campaign fundraising

company, plans to develop a highly

responsive donor list by sending out an

initial solicitation to identify individuals who indicate a willingness to support

the company's future clients: nOnincumbent

Republican candidates with conservative

views. CEe's goal in developing the donor

list is to reduce fundraising costs by

increasing the rate of return per fundrQiising letter. Based on the expected success

rate of the donor list and attempts to

reduce operating costs, CEC intends to

offer its services at Umaterially lower"

fees than other consultants.

CEC's charges--especially considering

expected losses during its first years,

possible subsidies from company directors

and waivers of their salaries--raise the

issue of whether the conpany will be

charging less than the normal charge and

thus making prohibited contributions to its

candidate clients.

Other aspects of CEC's proposed opera- tions also raise the issue of prohibited

contributions: the content of the initial

solicitation; the recruitment of potential candidates as clients; the underpayment of

political advisors; and the use of affiliated companies' services. While certain of

these activities will not result in corporate contributions or expendit~res, others

are more problematic; in some instances,

the Commission lacked sufficient information to make a determination.

Initial Solicitation

Using names purchased or acquired fram

other sources, CEC plans to send out an

initial mailing <lSkin9' readers fat' permission to include their names on CEC's donor

list for future solicitations on behalf of

specific candidates to be selected by eEC.

certain wording in the initial mailing

could be interpreted as promoting an eleetoral result <i.e., the request that

readers consider future solicitations for

as-yet-to-be-named conservative Republican

nonincumbents) r thus raising the qUestion

of whether the communication expressly

advocates the election of clearly identified candidates. Corporate expte~s

advocacy messages communicated beyond the

restricted class are prohibited under

2 u.s.c. §441b. In this case, however, the

communication will ultimately be paid by

CEC'5 client campaigns, since charges will
FEDERALELECTION COMMISSION

•

•

•

May 1992

include an amortized portion of the mailing

costs and other start-up costs. The initial solicitation is thus part of a commercial venture--an attempt to charge less by

realizing a high rate of return for clients

rather than an attempt to advocate support

of candidates. Therefore, no corporate

expenditures will result.

Recruiting Potential candidates as Clients

In recruiting candidates as clients for

its services, CI!:C representatives JlIay meet

with announced candidates and with individuals interested in becomdng candidates.

This activity will not result in prohibited

contributions to announced candidates since

the company will not provide anything of

value to them but will merely describe its

services. Recruitrent of iodividuals who

are "testing the waters," however, could

involve an effort to persuade the individuals to become candidates, which would be a

prohibited use of corporate funds. See

11 eFR lOO.7(b)(1) and lOO.8(b)(1). The

Commission did not express any opinion on

this issue, lacking additional information

on recruitment communications.

CEC proposes to use informal advisors,

both to evaluate candidates and potential

candidates and to recruit those chosen by

CEC. Although advisors may not receive

full compensation for their time, their

uncompensated services will not result in

contributions to candidates because the

selection and recruitment efforts are aimed

at the solicitation of business rather than

influencing canpaigns. If, however,

advisors were to persuade potential candidates to run, in-kind contributions would

result, both from the advisors (in the

amount of their uncompensated services) and

from CEC (in the amount reimbursed to

advisors for out-of-pocket expenses).

CEC's underpayment of informal advisors

may also call into question the company's

charges to clients, discussed later in this

summary.

Candidate Solicitation Activities

CEC's solicitation letters on behalf of

candidate clients will appear on company

letterhead and will be signed by a company

officer. (The letter will explain that the

contributions should be sent directly to

the candidate's canpaign.) The use of

company letterhead represents something of

value to the candidate but, as the mailing

is a commercial activity, fully paid in

advance by the client, it does not represent a corporate contribution. This conclusion is qualified by whether CEC charges

the usual and normal charge.

7

Volume 18, Numb

As direct mail pieces, the letters m

include a disclaimer: Paid for by (name 

client campaign). 11 CFR 110.11(a)(1).

CEC's Fees: Usual am Normal Charge

CEC will charge each client an advan

fee possibly in the range of $5,000 to

$10,000 to cover costs directly related 

the solicitation letters. It will also

collect a fee estimated at between 5 and 

percent of total contributions realized

from CEC's solicitation for the client.

This charge will cover the conpany's day

to-day operating costs. CEC charges wil

include a portion of the company's start-

costs. (Such costs will be amortized and

included in the budget projections for th

next several years.) Due to start-up

costs, the company anticipates that it w

operate at a loss during its first years

TO avoid making prohibited contributions to its candidate clients, CEC must

charge no less than the "usual and norma

charge" for its services, i.e., the prevailing commercially reasonable rate.

11 CFR 100.7(a)(1)(iii)(B). Lacking info

mation on normal industry practice, the

Commission was unable to make a definitiv

determination as to whether CEC charges

will be "usual and normal." The commission, however, did consider the basis fo

the lower fees.

CEC bases its low percentage charge

(between 5 and 7 percent) on the expected

high rate of return from the donor list.

This percentage may result in client fees

equal to those charged by other ccnnpanie

should CEC's projected high returns

materialize. However, actual proceeds m

not meet projections. Furthe~re, CEC'

percentage may be substantially less than

fees charged by other direct mail compan

(see AD 1979-36).

CEC's low fees are also based on

reduced operating costs, partly achieved 

using temporary enq>loyees and by paying

outside consultants considerably less tha

the value of their services. Moreover, 

compensate the company for initial losses

its first years, at least one company of

cer may, if necessary, provide additiona

working capital and agree to a salary

waiver.

In view of the company's policy to

charge "materially" less than other

consultants, however, company losses

(particularly OVer a long term), infusion

of capital to compensate for the loss,

salary waivers-or any combination of the

three-would raise the rebuttable presum

tion that CEC was charging less than the

usual and normal charge. To avoid making

(continue
May 1992 FEDERALELECTION COMMISSION Volume 18, Number 5

prohibited contributions, CEC should ensure

that charges for services and time provided

to each client are commercially reasonable

and that start-up costs are properly and

reasonably amortized.

Use of Affiliated campany's services

CEC, owned by Edgar prince, plans to

use office space, financial services and

charter aircraft services provided by three

other corporations owned by Mr. Prince.

CEC will pay the usual and normal charges,

paying office rent on a monthly basis and

the other charges within 30 days of the

billing date. These arrangements will not

result in corporate contributions. Moreover, no contribution would result even if

CEC were to pay less than the usual and

normal charge or if billing or payment were

extended beyond a commercially reasonable

time, unless the services related to specific campai<JI1s. However, such practices

could indicate that CEC's charges for its

own services are less than the usual and

nomal charge.

(Date Issued: March 13, 1992; Length:

17 pages)

AD 1992-3: Corporation's Payment of

Benefits for EmployeejCandidate

on Unpaid Leave

Reynolds Metal Company may pay fringe benefits for an employee on unpaid leave to

pursue a federal candidacy because the

benefits will be paid under a preexisting

company policy that applies to all employees and because the period covered is

relatively brief--3l days.

Under FEC rules, a corporation Illay not

pay fringe benefits, such as health and

life insurance and retirement, for an

elllployee on leave without pay to participate in a federal campaign. 11 erR

114.12(c)(1). However, under the circumstances presented--the preexisting general

policy and the limited extension of benefits--Reynold's payment of fringe benefits

will not be a prohibited contribution to

the employee's campaign but, rather, may be

considered a form of compensation payable

to the el1Tployee as "other earned leave

time" under section lOO.7(a)(3)(iii). By

contrast, see N) 1976-70, where the corporation did not have a preexisting policy.

Commissioner Scott E. Thomas filed a

concurring opinion. (nate Issued: March

11, 1992: Length: 7 pages. including concurring opinion)

8

NJ 1992-5; candidate' 6 Appearance in cable

Public Mfa!rs programs

Congressman James P. Moran may appear in

two-public affairs forums televised on

local cable stations in his district. The

programs will not result in contributions

to his 1992 reelection campaign because

their content will be restricted to a discussion of public issues, with no mention

of his campaign.

lin activity involving or referring to a

federal candidate results in a contribution

or expenditure by the financial sponsor if

the activity includes the solicitation or

acceptance of contributions to the candidate's campaign or the express advocacy of

any candidate'S election or defeat; an

activity may also be considered campaign

related even without those two elements.

See, for example, ADs 1992-6, 1990-5 and

1988-27.

Neither of the series featuring Congressman Moran includes any solicitations,

express advocacy or campaign promotion.

Therefore, no contribution will result.

(For a similar opinion on a candidate's

appearance in a radio public affairs

series, see AD 1977-42.)

My issues arising ft"om the Communications Act. Federal communications Commission rules or House of Representative rules

are outside the FEC's jurisdiction. (Date

Issued: March 13, 1992: Length: 3 pages)

so 1992-8: Tax seminars as Fundraising

Mechanism

congressman William H. Orton may conduct

educational seminars on tax and banking laws as a fundraising technique for his

reelection campaign. He plans to use the

appropriate disclaimer in his promotional brochure, which will clearly inform the

reader that the seminar fee is a contribution to his campaign. His campaign will

treat all proceeds as contributions, and

all related expenses as expenditures. The

act!vity is permissible because the law

does not curtail the fundraisi1l9 methods a

campaign may use as long as the activity

complies with all relevant FEe regulations.

However, any t"mn1fications under the tax

laws or the rules of the House of Representatives are outside the Commission's

jurisdiction. (Date Issued: April 3,

1992; Length: 3 pages)
May 1992 FEDERAL ELECTION COMMISSION Volume 18, Num

COURT CASES REPORTS

2Reports sent by registered or certifie

mail must be postmarked by the mailing

date; otherwise, they must be received 

the filing date.

3The mailing date is the same as the fi

date because the computed mailing date

would fall one day before the primary w

held.

aw«:;E IN PRiMARY DM'F.S FOR CilIO AND

SOO'lII CAROL1NPI.

The ohio legislature has postponed 

May 5 Congressional primary to June 2. 

South carolina, a federal court resched

the primary from June 9 to August 25; t

runoff has also been rescheduled from J

23 to September 8. The Ohio and South

Carolina pre-election reporting dates t

appeared in the January issue are there

incorrect. The new reporting dates are

shown below.

Filing

Date

August 

Filing

Date

Filing

Date

May 21

Reg./Cert. 2

Mailing Date

August 273

Reg./Cert. 2

llJailin9 Date

AUgust 10

May 18

fleg'.jCert. 2

&ilil19 Date

CI05e1of

Books

september 8 Runoff

August 5

May 13

Close1of

Books

CHID PRIJW{Y, JUNE 2

August 25 Primary

Close1of

Books

FEe v. PopUlist Party (92-0674)

The FEe asks the court to declare that

defendants violated the law's prohibitions

and limits on contributions. In addition

to the Populist party (a political committee), the FEe names the following defendants: Liberty Lobby, Inc.; Cordite Fidelity, Inc. (wholly owned by Liberty Lobby);

the Bob Richards for President Committee,

washington, DC (not authorized by any

candidate); Willis A. Carto, as treasurer

of the two committees and individually (he

is a director of the two corporations); and

Blayne E. Hutzel individually (he is the

controller of the corporations and the

Populist party).

The FEC asks the court to find that:

o Liberty Lobby and Cordite Fidelity

made corporate contributions totaling $350,404 to the populist party.

o Mr. Carto consented to the making of the

above contributions.

o The populist party and Mr. Carto, as

treasurer, knowingly accepted $368,304 in

corporate contributions from Liberty

Lobby, Cordite Fidelity, the Commi ttee to

Defend Liberty Lobby and Seipold &

Sasser, an incorporated law firm;

o Mr. Hutzel knowingly accepted those contributions (except $15,400 contributed by

the law firm);

o The populist party and Mr. carto, as

treasurer, knowingly accepted $35,000

from incHviduals in excess of the

contribution limits;

o The Populist party and Mr. Carto, as

treasurer, made $28,333 in excessive

contributions to the Maureen Salaman for

Vice President Commdttee and $64,756 in

excessive contributions to the Bob

Richards for President Committee (DC);

and

o Bob Richards for President committee (DC)

and Mr. carto, as treasurer, knowingly

accepted $9,756 in excessive

contributions from the Populist party.

The FEe further requests that the court

assess a civil penalty; order the commdttees and Mr. Carta to refund the excessive

and prohibited contributions; and permanently enjoin all defendants from further

similar violations.

u.s. District Court for the District

of columbia, Civil Action No. 92-0674,

March 19, 1992.

9
May 1992 FEDERALELECTION COMMISSION Volume 18, Number 5

PINM. AlJDIT REPORT C6

1988 BCIJER'r.SCI'f CNU?AIGi

on March 26, 1992, the Commission

approved the final audit report on Americans for Robertson, Inc. The committee was

the Rev. Pat Robertson's 1988 Presidential

campaign committee. Based on audit

findings, the Coomission made an initial

determination that the cormnittee must repay

$388,544 in public funds to the u.s. Treasury. Mr. Robe rtson had received $10.4

million in matching funds.

The Conunittee has 30 days to dispute

the repayment anount, The Commission will

consider any response from the commdttee

when making a final determination.

The Commission's initial determinations

and significant audit findings are summarized below.

Sperding in Excess of Expenditure Limits

overall Limit. The final audit report

found that the Committee had exceeded the

overall spending lintit by $1.025 million.

Included in this amount was approximately $570,000 in apparent in-kind contributions

from two corporations that provided computer equipment and charter airplane services

to the Committee. (Auditors identified

certain linkages between the coqporations

and the candidate. For example, the airplane primarily used by the campaign was

owned by Airplanes Inc., a subsidiary of

CBN Continental Broadcasting Network Inc.,

of which Mr. Robertson was the director and

former president.)

FEC auditors calculated that, of the

$1.025 million in excessive expenditures

incurred by the Committee, $659,970 was

CORRECTrCN TO BVSB REPAYMENl'

DE'I'EBMINATICN

The April Record article on the

George Bush for President Commdttee

final audit report stated that the

committee had to repay $79,235 in

public funds, but that total failed to

include an additional $33,845 repayment for stale-dated committee checks.

The correct repayment amount is therefore $113,080. The Bush Committee has

repaid the entire amount to the U.S.

Treasury.

10

paid when the committee's account contained

matching funds and was therefore potentially subject to pro rata repayment.

state Expenditure Limits. The final

audit report also found that the Committee

had incurred expenses that exceeded the

Iowa and New Hampshire expenditure limits

by a total of $1.142 million. Reducing

this amount by debts that had not yet been

paid, auditors determined that $1.110 million was subject to pro rata repayment.

Repayable Amount. The Commission based

its repayment determination on the larger

of the amounts subject to pro rata repayment-the $1.110 spent in excess of the

state limits. Applying the formula used to

calculate what portion of that amount

represented public funds, as opposed to

private contributions (i.e., the pro rata

portion), the Commission made an initial

determination that the Committee repay

$338,632.

Nonqualified campaign Expenses

The audi t report found that the Committee had incurred $163,569 in nonqualified

campaign expenses such as tax penalties and

undocumented transfers. The initial repayment determinations on these findings

totaled $49,912, the pro rata portion of

these expenses.

Press Travel ReiIlbursements

FEe Auditors discovered that the Co~

mittee had apparently received excessive

reimbursements from media firms for press

travel. The Commission approved a recommendation that, absent a showing to the

contrary, the Committee repay the firms

$105,635.
FEDERAL ELECTION COMMISSION

PUBLIC APPEARANCES •

•

•

May 1992

.FEDERAL REGISTER

Copies of Federal Register notices are

available from the Public Records Office.

1992-3

11 crn Parts 9034, 9036 and 9037: Matching

Fund Submission and Certification Prace- ~res for Presidential primary Candidates;

Float Rules; correction to Announcement of

Effective Date (from November 6 to November

7, 1991) (57 FR 6665, February 21. 1992)

1992-4

11 CFR Part 106: Allocation of Federal;

Nonfederal Expenses; Final Rule; Transmittal to Congress (57 FR 8990, March 13,

1992); Correction (57 FR 1113?, April 1,

1992)

1992-5

11 em Parts lOO and 104~ Loans From Lending Institutions to candidates and Political Committees; Final Rule; Announcement of

April 2 Effective Date (57 FR 11262, April

2, 1992)

1992-6

11 eFR Parts 102 and 110: special Fundraising projects by Political C~ttees;

Notice of proposed Ru1emaking (57 FR 13056,

April 15, 1992)

1992-7

11 eFR Part 110: Transfers of Funds from

state to Federal Campaigns; Notice of

Proposed Rulemaking {57 FR 13054, April 15,

1992)

11

5/11

5/15

5/18

Volume 18, Number

HOpe College

washington, IX:

Kathlene C. Martin, Information Services Division

Minnesota Institute of Legal

Education

Minneapolis, Minnesota

N. Bradley Litchfield

Associate General counsel for

policy

International Institute of

Municipal Clerks

Salt Lake City, Utah

Janet C. McKee, Clearinghouse

on Election Admdnistration
May 1992 FEDERAL ELECTION COMMISSION Volume 18, Number 

'Ibe first number in each

citation refers to the "number"

(month) of the 1992 Record

issue in which the article

appeared; the second number,

following the colon, indicates

the page number in that issue.

ADVIsmY OPINI<Jtm

1991-29: Contributions received

and made by coJ:POration'&

employee pledge program, 1: 4

1991-32: Charges for consultant's fundraisin9 services,

5:6

1991-33: Allocation of expenses

when party commdttee administers primary election, 1:6

1991-34: COmmittee sale of

access to voter data base as

ongoing venture, 1:6

1991-35: Application of allocation rules when SSF's nonfederal account pays its own

adBdnistrative expenses, 2:10

1991-36: Corporation's payment

of employee's travel expenses

to attend party fundraiser,

3:5

1991-37: Nonccnnected PAC's

payment to incorporated fi1lll

for shared facilities and

services contributed to committees, 3:5

FEDERAL ELECTION COMMISSION

999 E Street, NW

Washington, DC 20463

Official Business

1991-38: Repaytrent of embeZ'zled

funds to candidate conmittee,

3:6

1991-39: Contributions suspected of being made in names

of others, 4:9

1992-1: campaign salary paid to

candidate; reimbursements for

campaign expenses, 4:9

1992-2: Party reallocation of

staff salaries as fundraising

expenses, 4: 10

1992-3: Corporation'S payment

of benefits for employee/

candidate on unpaid leave,

5:8

1992-4: campaign's payment of

candidate's liVing expenses

and spouse's salary, 4:10

1992-5: Candidate'S appearance

in cable public affairs

proqrams, 5:8

1992-6: Honorarium paid to

candidate for speech on campaign issues, 4:11

1992-8: Tax seminars as fundraising mechanism, 5:8

COORr CASES

FEe v. - AFsCME=PQ, 1:7

- NRA Political Victory FUnd,

1:7

- poPUlist party (92-0674)

5:9

v. FEe

~ins, 1:8, 3:7 - BraiiStoo1, 3:8 - Common cause (91-2914), 1

- Common cause (92-0249), 3

- Freedom Republicans, Inc

3:7 - LaRouche. 4: 8

- National Rifle Associatio

of America (NRA) (89-301

4:8 - Trinsey, 3:7

REPCRrING

Pre-primary reportin9 dates - Correction, OH, se, 5:9

- House and Senate, 1:14 - Presidential, 2:10: 3:10

Schedule for 1992, 1:10; 3:8

SPlH)Ir«; LIMITS FOR 1992

Coordinated party, 3:1

Presidential, 3:14

800 LINE

Compliance wi th laws outside

FEC's jurisdiction, 3:12

Last-minute contributions: 48

hour notices required, 1:18

Registration by candidates an

their committees, 2:12

Bulk Rate Mail

Postage and Fees Paid

Federal Election Commission

Permit NumberG-31