Volume 10, Numbe

ADVISORY OPINIONS

800UNE

FECA's Application to State and Local

Election Activity

Preemption Questions

INFORMATION

Educational Materials and Ser-vices

PUBUCATlONS

New Edition of Party Guide

COURT CASES

Athens Lumber Co. v. FEC

Hopfmann v. FEe·

New Litigation

COMPLlANCE

Summary of MURs

3

4

6

5

continu

What Form to Use

Corporations and labor organizations requi

to file a report under these provisions should 

either FEe Form 7 or a letter containing 

same information.

TABLE OF CONTENTS

REPORTS

Internal Communications Reported by

Corporate, Labor and Membership

Organizations

PRESIDENTIAL ELECTIONS

2 Funds Certified to Primary Candidates

2 Jackson's Matching Fund Eligibility

Affirmed

3 Candidates Ineligible for Public Funds

7

7

8

9

9

What Must Be Reported

Each report filed under these provisions m

include the following for each communication:

1. The type of communication (e.g., direct m

telephone or telegram).

2. The class or category communicated w

(e.g., members, stockholders or executive/

ministrative personnel).

3. The daters) of the communication.

4. Whether the communication is in support 

or in opposition to, a particular candidate.

Note: This particular reporting requirement is 

applicable to "political committees" as defined 

2 U.S.C. §43I(4).

FEDERAL ELECTION COMMISSION

1325 K Street NW Washington DC 20463

The $2,000 threshold for reporting applies sep8J'8tely to each election process within a calendar

year (i.e., all primary elections, the general election and any special or runoff elections). 2 U.S.C.

S43l(1)(A). Each corporation, each incorporated

subsidiary and each state and local chapter of a

labor organization has a separate $2,000 threshold. Therefore, each entity need not report until

the threshold is reached.

REPORTING INTERNAL

COMMUNICATIONS BY CORPORATE,

LABOR AND MEMBERSHIP ORGANIZATIONS

Under the Federal Election Campaign Act

(the Act) and Commission Regulations, corporations* and labor organizations are permitted to

communicate with their respective "restricted

classes"** on any subject. 2 U.S.C. §441bj 11

CFR 114.3. However, the Act requires that costs

incurred for communications which expressly advocate the election or defeat of a clearly identified candidate be reported if they exceed $2,000

for any election. Com rnuniea tions primarily devoted to subjects other than express advocacy of

the election or defeat of a clearly identified

candidate are not covered by this particular reporting requirement.

'"The rules governing corporate activity apply

to a broad range of incorporated organizations,

including national banks, corporations with capital

stock and incorporated membership organizations

(inclUding corporations without capital stock, incorporated trade associations and tncorporcted

cooperatives).

**The restricted class of a corporation includes its shareholders, executive and administrative personnel and their families. A labor organization's restricted class includes its members, executive and administrative personnel and their

families. In the case of incorporated membership

organizations, trade associations, cooperatives,

and corporcttons without capital stock, the restricted class includes their members, executive

and administrative personnel and their families.

May 1984

•

•
The Record is published by the Federal Election Commission, 1325 K Street, N.W., Washington,

D.C. 20463. Commissioners are: Lee Ann Elliott, Chairman; Thomas E. Harris, Vice Chairman;

Joan D. Aikens; Danny Lee McDonald; John Warren McGarry; Frank P. Reiche; William P.

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

Representatives, Ex Officio. For more information, call 202/523-4068 or toll-free 800(424-9530.

FEDERAL ELECTION COMMISSION

$ 897,480.40

1, ?40 t029.86

2,867,072.10

948,535.29

753,683.98

702,157.34

100,000.00

419,852.93

5,878,176.29

3,578,620.76

Volume 10, Number 

Askew, Reubin 8

Cranston, Alan 11

Glenn, John 8

Hart, Gary 8

Hollings, Ernest F. 8

Jackson, Jesse 3

Lalcouehe, Lyndon H. 0

McGovern, George 2

Mondale, Walter F. II

Reagan, Ronald 1

*As of April 12, 1984. **Includes requests made after the candidate

initial request for matching fwtd eligibility•

Rev. Jaekson was scheduled to become ineligib

for primary matching funds on April 5, 198

because he had received less than 10 percent o

the vote in both the February 213 New Hampshir

primary and the March 6 Vermont primary. How

evert he SUbsequently recelved more than 20 pe

eent of the vote in the March 13 Georgia primary

Name of Number of Thtal Amount o

candidate Requests'" * Funds Certifie

The summary chart below provides cumulativ

information on certifications of primary matchin

funds made between January I and April 12, 1984

Primary Matching Fund

Certification Activity'"

FEe AFFIRMS JACKSON'S

MATCIDHGFUNDEUGmIUTY

On March 23, 1984, the Commission affirme

Reverend Jesse Jackson's continued eligibility fo

primary matching funds.

Under regulations governing the Primary Match

ing Payment Account, a candidate becomes inel

gible for primary matching funds on the 30th da

following the date of the second consecutiv

primary in which he/she receives less than 1

percent of the total popular votes. The individu

may, however, reestablish eligibility for publ

funds by receiving at least 20 percent of the tota

popular votes in a primary election held subs

quent to the eleetioo in which he/she becam

ineligible. 11 CPR 9033.5(b) and 9033.8(b).

May 1984

For more information on reporting procedures,

consult the instructions on the back of FEC Form

7 or contact: Office of Public Communications,

Federal Election Commission, 1325 K Street,

N.W., Washington, D.C. 20463, or call: 202/523-

4068 or toll free 800/424-9530.

'2

Note: In the case of a communication which

advocates the election or defeat of more than one

eandtdate, the cost should be allocated among the

candidates according to the benefit they are expected to derive and should be reported accordingly.

.. .

5. The name of the candidate, the office sought,

the district and state of the office and

whether the communication was for the primary or the general election.

6. The cost of the communication.

When to Report

Organizations required to report under these

provisions must file quarterly reports during a

calendar year in which a regularly scheduled general election is held. In additlon, a l2-day pregeneral election report must be filed for actiVity

in connection with any general election. Reports

are required beginning with the first reporting

period during which the aggregate cost for communications exceeds $2,000 per election and for

each period thereafter in which the organization

makes any additional disbursements in connection

with the same election. 2 U.S.C. S43l(9)(B)(iii); 11

CFR 100.8(b)(4), 104.6 and 114.3. (FEC Agenda

Document No. 8I-15I)

PRIMARY MATCHING

FUND PAYMENTS

On March 23, 1984t the Federal Election

Commission determined that President Ronald

Reagan was eligible to receive primary matching

funds for his 1984 primary campaign. On the same

day, the Commission certified primary matching

fund payments for President Reagan and for six

other Presidential candidates. (The tr.s, Treasury

will issue actual payments to the eandldates.I

N H t· s .. ri· (' i' • '
Volume 10, Number 

The Company offers three plans to employees wh

wish to participate in a Company-sponsored stoc

ownership program. Under one plan, employee

contribute a percentage of their salary to th

Company's savings plan. Employee contribution

are partially matched by the Company. Employee

may also make supplemental contributions to th

plan, which are not matched by Company contr

butions. Under two other plans, the Tax Reductio

Act Stock Ownership Plan Fund (TRASOP) and th

Payroll-Based Stock Ownership Plan Fun

(p AYSOP), the Company allocates stock to ac

counts established for employees (with at lea

three years of service) who wish to participate i

the plans. While employees do not contribute t

the P AYSOP plan, under certain circumstance

they may make matching contributions to th

TRASOP plan.

Under Commission Regulations, an employee par

ticipating in a stock ownership plan is considere

a stockholder, eligible for ·PAC solicitations, 

the employee has:

1. A vested, beneficial interest in the stack;

2. The power to direct how the stock will b

votedjand

3. The right to receive dividends. II CFR 114.

(h).

All the employees participating in the Compan

benefit plans meet the first two requirements fo

stockholder status. Moreover, those employee

who have withdrawn at least one share of com

pany stock credited to their accounts under any o

the plans satisfy the third requirement.

their participation in one of the Company's thre

employee stock ownership plans. (Under FEC Reg

ulations, corporate PACs may solicit executiv

and administrative personnel and their stockhold

ers and the families of both groups. 2 U.S.C

§44Ib(b)(4)(B).) Company personnel participatin

in stock ownership plans qualify as solicitabl

stockholders under Commission Regulations a

long as their particular benefit plans do no

significantly restrict their right to withdra

stock.

With regard to employees who have not exercise

their stock withdrawal rights, some do not mee

the third requirement for stockholder status. Con

sequently they may not be solicited by the Com

pany because of restrictions placed on their ac

cess to dividends. The stockholder status of thes

employees is addressed below by type of plan:

Savings Plan Participants

Employees who withdraw stock which the

purchased during the three-year period prior t

withdrawal may not contribute to their plans fo

six months after the withdrawal. As a result o

this restriction, these participants do not qualif

continue

3

May 1984 FEDERAL ELECTION COMMISSION

Accordingly, Rev. Jackson's eligibility for matching funds was not affected by the results of the

New Hampshire and Vermont primary elections.

Ineligible candidates may continue to receive primary matching funds to retire outstanding campaign debts incurred before the last date of

ineligibility and to pay for costs of winding down

their campaigns. They may receive federal

matching funds for private contributions received

and deposited before December 31, 1984, provided

they submit a statement of net outstanding campaign obligations within 15 days after becoming

ineligible. II CFR 9034.5. (Revised statements

must be submitted with each additional request

for rnatching funds.)

FEC TERMINATES MATCHING FUND

EIJGffiILITY FOR TWO CANDIDATES

On March 23, 1984, the Commission determined that two Democratic Presidential candidates were no longer eligible for primary rnatehing funds under the Presidential Primary Matching

Payment Account. On March 15 and 16, former

Senator George McGovern and Senator John Glenn

respectively became ineligible for primary matching funds when they announced publicly that they

would no longer actively campaign for their

Party's nomination. II CFR 9033.5(a)(I).

ADVISORY OPINIONS: SUMMARIES

An Advisory Opinion (AO) issued by the Commission provides guidance with regard to the

specific situation described in the AOR. Any

qualified person who has requested an AO and

acts in accordance with the opinion will not be

subject to any sanctions under the Act. Other

persons may rely on the opinion if they are

involved in a specific activity which is indistinguishable in all material aspects from the activity

discussed in the AO. Those seeking guidance for

their own activity, however, should consult the

full text of an AO and not rely only on the

sum mary given here.

AO 1984-5: Status of Company Employees

as Solicitable Stockholders

The Pacific Gas and Electric Company (the Company) proposed to solicit contributions to its separate segregated fund, the Pacific Gas and Electric

Company Employees Good Government Fund,

from certain nonmanagement employees who may

qualify as solieitable stockholders as a result of

•

•
FEDERAL ELECTION COMMISSION

Volume 10, Numbe

continu

The FEC is frequently asked whether 

Federal Election Campaign Act (the Act) affe

state and local elections. The answer is genera

no. However, while the Act primarily governs 

campaign finance activities of candidates for f

eral office and the political committees wh

support them, there are some instances in wh

the Act may also apply to state and local elect

activity. First, the Act governs contributi

made by certain entities in connection with st

and local elections. Second, where both fede

and state laws pertain to federal election acti

ties, the Act preempts and supercedes state l

with respect to certain activities. The questi

and answers presented here help define the bou

aries between federal and state laws with resp

to election activity,

tution which is insured by the Federal Depo

Insurance Corporation (FDIC), the Federal Savi

and Loan Insurance Corporation (FSLIC) or 

National Credit Union Administration (NCU

See 2 U.S.C. §432(h)(l); II CPR 103.2. Any in

tution which falls under one of these categor

qualifies as a depository for federal campa

funds. (Date issued: March 15, 1984; Length

pages)

Does the Act also ban contributions by eeepo

tions (organized under state law) or by lab

organizations when the contributions are m

solely in connection with state and Ioeal el

tions?

No. II CFR Ll4.2(b). Some states, howev

have adopted such prohibitions.

PROVISIONS OF THE ACT GOVERNING

STATE AND LOCAL ELECTION AC1lVITY

Does the Federal Eleetion Campaign Act, as 

mended (the Act), apply to the finaneing of a

state or local eleetion activities?

Yes. The Act specifically prohibits natio

banks and corporations organized by authority 

any law of Congress (e.g., a federally charte

savings and loan association) from making con

butions or expenditures in connection with a

election, including state or local elections. 

U.S.C. §441b(a); 11 CPR 114.2(a). The Act a

prohibits foreign nationals from making contri

tions or expenditures in connection with any el

tions. 2 U.S.C. §44le.

4

May 1984

TRASOP and PAYSOP Participants

TRASOP and PAYSOP participants who are

only eligible to withdraw stock contributed to

their plans by the Company (again, because they

have chosen not to contribute to the plan) do not

have stockholder status as a result of restrictions

placed on their right to withdraw stock. Specifi":'

eally, these participants may only withdraw stock

(held for at least 7 years) on a once yearly basis.

If they do not exercise this withdrawal right, they

may not withdraw the stock until they leave the

Company.

By contrast} TRASOP participants who contribute

to their plans have stock withdrawal rights, once

their stock has been transferred to a savings plan.

Hence, these employees would qualify as stockholders if they can withdraw stock from their

savings plans without being subject to a six-month

suspension penalty. Commissioner Thomas E.

Harris filed a dissenting opinion. (Date issued:

March 30, 1984; Length: 7 pages, including dissent)

as stockholders. By contrast, employees who purchased stock before the current three-year period, or who purchased stock with their supplemental contributions to the plan, may withdraw

this stock without being subject to the six-month

suspension penalty. Hence, they qualify as stockholders.

Under the election law, a political committee

may establish a campaign depository at either a

national bank, a state bank or a depository instiAO 1984-6: Massachusetts Cooperative Banks

as Qualified Campaign Depositories

Cooperative banks in Massachusetts may act as

depositories for campaign funds used in federal

elections because they qualify as state banks

under relevant Massachusetts law. The fact that

the cooperative banks are insured by the Cooperative Central Bank, rather than by one of the

insurance institutions named in the federal election law, does not prevent the cooperative banks

from serving as depositories for federal campaign

funds.

Employees who are only eligible to withdraw

stock purchased by the Company (because they

have chosen not to invest their own contributions

in Company stock) are not considered stockholders because of the restrictions placed on their

withdrawal rights. Specifically, these employees

are given one opportunity per year to withdraw

stock purchased by the Company two years before. Any funds not withdrawn at this time must

remain in the employee's account until he/she

leaves the Company.
FEDERAL ELECTION COMMISSION Volume 10, Number 

Federal candidates do not have to comp

with state laws regulating the designation 

their political committees. AO 1978-54.

Federal candidates, who are also elect

state officers, do not have to comply wi

state laws banning lobbyists' contributions, 

the extent these contributions are used f

the officers' federal election campaigns. A

1978-65.

Corporations do not have to comply wi

state laws prohibiting use of payroll dedu

tion plans to collect contributions to feder

PACs. AO 1982-29.

Are there any specific eases in which the Com

mission has said the Act did not supersede 

preempt state law?

Yes. The Commission has said that the A

did not supersede or preempt:

A state law prohibiting a U.S. Senate cam

paign from making payments for "walk 

round services" (i.e., payments to campai

workers for such activities as distributin

campaign literature or serving as POll watc

ers). AO 1980-47.

Applicable state laws governing excess cam

paign funds transferred from a candidate

campaign for federal office to his/her cam

paign for state office. AOs 1978-37 t 1979-8

and 1980-32.

Under what circumstances does the Act not pr

empt or supersede state laws?

Commission Regulations specify that the A

does not supersede or preempt state laws whi

provide for:

Methods used to qualify as candidates 

political party organizations;

Dates and places of elections;

Voter registration;

Prohibition of false reglstra tion, votin

fraud, theft of ballots, and similar offense

and

Candida tes' personal financial disclosure. 

CPR 108.7(c).

Does the Act also supersede and preempt Ioc

laws and ordinances governing federal electio

activities?

Yes. In AO 1981-27, the Commission rul

that the Act superseded and preempted a Housto

ordinance which required federal election-relat

campaign materials to include an anti-litterin

warning.

5

May 1984

Does the Act's preemption of a state law invalidate the law?

No. The Act's preemption of a state law

means only that the law does not apply to federal

election activity,

Iloes the Act require state and local candidates to

file reports with the FEe?

No. The Act's filing requirements apply only

to federal candidates and to committees making

contributions or expenditures to influence federal

elections.

Does the Act's ban on eontrtouttons by federal

contractors in connection with federal elections

awly to state and local elections as well?

No. 11 CFR 115.2(a).

When does the federal election law preempt state

laws goveming election activities?

When election activity is governed by both

the Act and state law, the Act and Commission

Regula tions supersede and preempt the provisions

of state law. 2 U.S.C. §453; 11 CFR 108.7(a} and

(b). Commission Regulations specify that the Act

supersedes and preempts state laws with regard to~

The organization and registration of political

committees supporting federal candidates;

Disclosure of receipts and expenditures by

federal candidates and political committees

(including disclosure of information on campaign advertising); and

Limits on contributions received, and expenditures made, by federal candidates and political committees.

PREEMPTION QUESTIONS

Are there any specific eases in which the Commission has said the Act supersedes and preempts

state election laws!

Yes. In a series of advisory opinions, the

Commission has said tha.t:

Candidates for federal office do not have to

comply with state laws requiring them to

disclose information on campaign advertising

which is not specifically required by the Act.

(See 2 U.S.C. §'441d and 11 CFR 110.11(a).)

For example, federal candidates do not have

to comply with state laws requiring disclosure on campaign ads of their party affiliation or the names and addresses of campaign

secretaries or chairmen responsible for the

ads. AOs 1978-24 and 19BO-36.

Does the Act require political committees registered with the FEe to report their state and local

election activity?

Yes, if the contributions or expenditures are

made from the same account used for federal

activity.

•

•
FEDERAL ELECTION COMMISSION Volume 10, Numbe

Public Funding of Presidential El~tions. Writt

for the general public, this brochure explains t

process of Presidential public funding for p~~ma

elections, conventions and the general election.

Using FRe Campaign Finance lnformation. Th

brochure explains how to use FEC reports a

computer indexes to gather information about t

financial activity of political committees a

candidates involved in federal elections.

House and senate Bookkeeping ManuaL T

manual presents a recom mended method of boo

keeping and reporting to assist federal candida

and their authorized com rnittees in maintaini

records required by the Federal Election Ca 

paign Act. Samples of completed FEC forms a

included.

The FEC and The Federal Campaign Finance La

The pamphlet gives a brief overview of the maj

provisions of the Federal Election Campaign A

and the Commission's role in administering it.

Informational Broehures. A series of brochur

has been designed to answer questions on the fo

lowing topics:

Advisory Opinions

Candidate

Contributions

Registration 

Corporate/Labor Facilities

Independent Expenditures

Local Party Activity

Political Ads and Solicitations

Volunteer Activity

Special Articles. The Commission offers reprin

of special articles which appeared under the "8

Line" in the Record. The following titles may 

of current interest:

"Concert Fundraisers," December 1982, p. J

11Disposal of Campaign Property, rr January 1983, p

"Partnerships," June 1983, p, 9

"Convention Delegates,rr Dece mber 1983, p, 1

"Tr-easurer's Responsibilities,rr January 1984, p, 7

"Annual Limit on Contributions,"February 1984, p. 

"Spending Limits for Public Funding Recipient

April 1984, p, 1

"Provisions of the Act Governing State and Loc

Election Activity, n May 1984, p. 4

"Preemption Questionst

ll May 1984, p. 5

Special Press Releases. From time to time, t

FEC issues press releases surnrnarlzfng campai

finance information reported by political comm

tees. Recent releases covered activity on t

following topics:

Congressional Elections .. . . 

Matching Funds for Presidential Candldates

PAC Activity and Growth

Political Party Spending

6

May 1984

EDUCATIONAL MATERIALS AND SERVICFS

The FEC offers a variety of educational.

materials and services to acquaint political committees and the public with the requirements of

the federal election campaign law and the Commission's role in administering that law. These

services -- available at no charge -- include

audiovisual rnatertals, publications, a toll-free

telephone number, speakers, workshops, and research facilities located at the Commission. For

more information or assistance in designing an

educational program tailored to the needs of your

audience, contact the PUblic Communications Office at 202/523-4068 or toll free 800/424-9530.

FEC Slide and cassette Program

"The Sources of Candidate Support," a slide

and cassette program, describes permissible

sources of campaign support available to federal

candidates. Available upon request, the slide show

explains basic concepts of federal election law as,

for example: contributions, volunteer activity and

independent expenditures.

FEC Record. Published as a binder insert, this

monthly newsletter is the primary source of information on Commission activity. A free subscription is automatically sent to every registered

political committee. Anyone (inclUding committee

staff) may call or write for individual copies or

subscriptions.

Campaign Guides. Four separate guides explain

how the law affects four different audiences. In

each guide, completed FEC forms illustrate reporting requirements. . . I. campaign Guide for CongressIonal CandIdates and Committees.

2. .Campaign Guide for Party Committees.

3. Campaign Guide for Corporations and Labor

Organizations,* 4. Campaign Guide for Nonconnected Political

Committees.

FEe Publications

To place your order for any of the following

publications, call the FEe. Since the supply of

some materials is limited, if you are planning a

group presentation, we suggest you contact the

Office of PUblic Communications at least four

weeks before the event.

*This guide also pertains to national banks;

incorporated membership organizations, trade _associations and cooperatives; end corporctrons

without capital stock.
Volume 10, Numbe

contin

~:~~l~ws:·~:~~;~'(;r·

t~, ,Cc,'

a(7·:;~~~~i~~¥j:~~bl~t1;'~~i~~~~R~~~~~~

NEW EDITION OF PARTY GUIDE

The Commission has published an upda

edition. of the Campaign Guide for Political Pa

Committees. The new Guide reflects recen

revised regulations on advertising notices 

joint fundraising and includes new material 

financing delegates to the national Presiden

nominating conventions. Additionally, the sect

reproducing completed FEC forms incorpora

more reporting examples than the previous Gu

The new Guide's format and design have alsO'""'b

updated so they conform with the other Campa

Guides in the series.

ATHENS LUMBER COMPANY Y. FEe

On March 19, 1984, the Supreme Court d

missed an appeal brought by plaintiffs in Ath

Lumber Company v. FEe. Citing a lack of ju

diction over the appeal, the Court treated it a

request for discretionary review (i,e., a petit

for a writ of certiorari) and declined the reque

<U.S. Supreme Court No. 83-1190)

Free copies of the new Party Guide are availa

from the Public Communications Office, 1325

Street, N.W., Washington, D.C. 20463; call 2

523-4068 or toll free 800/424-9530.

The high Court's action left standing an earl

en banc opinion of the U.S. Court of Appeals 

the Eleventh Circuit. In its October 24, 19

decision, the appeals court had rejected plainti

claims that section 441b{a) of the Federal El

tion Campaign Act abridged First and Fi

Amendment rights by prohibiting corporati

from making contributions and expenditures 

connection with federal elections. The en b

Eleventh Circuit court of appeals stated: "View

the substantive constitutional issues as being c

trolled by the {Supreme] Court's unani mous op

ion in Federal Election Commission v. Natio

R" ht to Work Committee et al. 459 U.S. 

1982 , and for the reasons there stated, we f

the limitations and prohibitions of which app

lants complain to be constitutional." (For a su

ma.ry of the opinions of the district court and 

appeals court in the Athens Lumber suit, see p

10 of the January 1984 Reeord.)

7

May 1984 FEDERAL ELECTION COMMISSION

Independent Expenditures

Communication Costs

Workshops and Speakers

FEC Commissioners and staff accept public

speaking engagements, participate in seminars on

campaign finance Ia w, and speak informally to

groups visiting the Commission.

Commission Library. The Commission's law library is a government documents depository open

to the public weekdays from 9 a.rn. to 5 p.rn, The

library's collection includes basic legal research

tools plus materials dealing with political campaign finance, corporate and labor political activity and campaign finance reform.

Research Facilities

Clearinghouse. The FEC's National Clearinghouse

on Election Administration provides information

to the public on election administration. For further information, or to obtain a list of publications and their prices, contact the Clearinghouse

at 202/523-4183 or toll free 800/424-9530.

Public Records Office. At the FEC's Public Records Office, anyone may review and copy documents related to federal election campaign finance activity, including committee reports and

computer printouts of FEC indexes. Open daily to

the public, the office is located on the street

floor of the Federal Election Commission.

FEC Clinic. Every Monday, between 2:00 and 4:30

p.rn., auditors, reports analysts and public affairs

specialists are available to help individuals comply with the Federal Election Campaign Act and

to arrange tours of the FEC's public offices. To

schedule an appointment, call toll free 800/424-

9530 or, in Washington, 202/523-4068.

Personal Assistance

Toll Free Line. FEe staff respond to questions on

the FEC's toll-free line, helping political committees to voluntarily comply with the election law.

Public affairs specialists answer general questions

about all aspects of the law, and reports analysts,

who review reports, handle specific reporting

questions. Call 800/424-9530.

•

•
May 1984 FEDERAL ELECTION COMMISSION

HOPFMANN v. FEC

On March 8, 1984, the U.S. District Court for

the District of Columbia issued an opinion in

Alwin E. Hopfmann v. FEC, which granted both

the FEC's motion for summary juogrnent and its

motion to dismiss certain constitutional challenges brought by Mr. Hopfrnann in the suit. (Civil

Ae tion No. 82-3667)

In filing the suit with the district court in December 1982, Mr. Hopf'mann had petitioned the court

to declare that the FEC's dismissal of an administrative complaint, which he had filed in September 1982 against Senator Edward M. Kennedy

(D-Mass.) and the Committee to Re-Elect Senator Kennedy, was contrary to law. See 2 U.S.C.

§437g(a)(8)(A). Mr. Hopfrnann had also asked the

district court to certify to a U.S. appeals court

certain constitutional challenges involving FEC

actions and the Federal Election Campaign Act

(the Act). 2 U.S.C. S437h.

Baekground

In seeking the Massachusetts State Democratic Party's endorsement as candidates for the

U.S. Senate, both Mr. Hopfmann and Senator

Kennedy participated in the Party's May 1982

pre-primary convention. Under the Party's "15

percent RUle," only candidates receiving at least

15 percent of the votes cast at the Party's preprimary convention appear on the state's primary

ballot. Senator Kennedy obtained ballot access by

receiving more than 15 percent of the votes cast

at the convention. Mr. Hopfrnann, on the other

hand, failed to receive ballot access because he

received less than 15 percent of the total votes

cast.

In the administrative complaint he had filed with

the FEC, Mr. Hopf'mann claimed that, since the

convention vote had resulted in the Party's exclusive endorsement of Senator Kennedy, the convention had the authority to nominate a candidate

and therefore met the election law's definition of

an "election."* Mr. Hopfmann therefore alleged

that Senator Kennedy and his campaign committee had violated the election Jaw by accepting

excessive contributions for convention activities

and by failing to report the funds. See 2 U.S.C.

§§434(a), (b) and 44Ia(f), respectively.

District Court's Ruling

The district court found that the FEC's decision to dismiss the complaint was rr'sufficiently

reasonable' to merit lthel Court's deference."

*The Act defines an election to include "a

convention or caucus of a political party which

has authority to nominate a candidate." 2 U.S.C.

Section 43Ul)(B).

8

Volume 10, \\lumber 5

Specifically, the court held that the FEC Genera

Counsel's report on the complaint adequately se

out the Commission's reasons for dismissing the

case. Moreover, the FEC's determination was con

sistent with previous FEC decisions.

With regard to constitutional challenges raised by

Mr. Hopfmann, the court concluded that "plain

tiff's challenges do not raise substantial constitu

tional questions, are frivolous and are not based

on any coherent legal theory."

NRW LITIGATION

FEe v, CAPAC

Pursuant to 2 U.S.C. §437g(a)(5)(D), on March

27, 1984, the Commission filed suit against Citi

zens' Advocate Political Action Committee

(CAPAC), a nonconnected political committee

Which had violated requirements of a conciliation

agreement entered into with the FEC on Augus

31, 1983. Under the terms of the agreement

CAPAC had agreed, within 30 days, to: a) file

amended reports disclosing the receipt of contri

butions from three political committees and b) to

pay a civil penalty of $200 to the U.S. Treasury

After repeatedly notifying CAPAC of its failure

to comply with the ecncillatfon agreement, the

FEC sought enforcement of the agreement by

petitioning the district court to:

Declare that CAPAC had violated the concil

iation agreement by failing to comply with

the agreement's terms,

Permanently enjoin CAPAC from further vio

lations of the agreement;

Order CAPAC to pay the $200 civil penalty

provided for in the conciliation agreement

plus interest aeqrued from September 30

1983, the date on which the civil penalty was

due; and

Order CAPAC to file amended reports o

receipts and disbursements with the FEe.

u.s. District Court for the District of Columbia

Civil Action No. 84-0964, March 27, 1984.
Volume 10, Numbe

combined total of $19,720 for each candida

general election campaign (t.e., $14,720 for co

dinated expenditures and $5,000 for in-kind c

tributions). See 2 U.S.C. §5441a(d)(3) (B) 

441a(a) (2)(A). In reviewing the auditors' findin

the General Counsel noted that, between Octo

27 and November 24, 1980, the state commi

had spent a total of $36,211 on behalf of Ca

date A's campaign, or $16,491 more than 

combined spending limit allowed by the elec

law. With regard to Candidate B, between A

29 and October 23, 1980, the state committee 

spent $29,242, or $9,522 more than the combi

spending Ii mit.

The state committee claimed, however, tha

had also been acting as the designated agen

the national party committee. On Februar~ 

1982, the Commission decided that a natio

party committee's coordinated expenditure lim

could be used by a state party committee onl

an effective grant of authority was given be

such expenditures were made. (The Commis

also decided that a national committee could 

at any time transfer use of its contribution l

under 2 U.S.C. §44Ia(a)(2)(A)). However, u

request of the Audit Division, neither the s

committee nor the national party commi

could adequately document the state committ

receipt of prior authorizations from the nati

party committee to make the expenditures. 

written statement, the national party commi

asserted that it had authorized the state com

tee to make expenditures for Candidate A. 

statement did not, however, indicate whethe

not the national party committee had granted 

authorization before the state committee actu

made the expenditures. With regard to spen

on Candidate B's behalf, the state commi

submitted a copy of a written authorization 

ceived from the national party committee, w

showed that its expenditures had occurred th

days before the national party committee 

granted the authorization.

After reviewing the auditors' findings, the G

eral Counsel recommended that the Commis

find reason to believe that:

-- The state commmittee had violated 2 U.

§§441a(d)(3)(B) and 441a(a)(2)(A) by ma

total expenditures on behalf of each ca

date's campaign which exceeded the c

bined limits for coordinated expenditures 

in-kind contributions for each candidate; 

The principal campaign committees of Ca

dates A and B had violated 2 U.S.C. 544

by accepting the excessive in-kind contr

tions (i.e., funds the state committee 

spent in excess of the permissible limits).

contin

9

May 1984 FEDERALELECTION COMMISSION

General Counsel's Report

Under 5441a(d)(3)(B) of the election law, in

addition to making direct contributions to candidates a state party committee and the national

party' committee may each make special coordinated expenditures, subject to limits, on behalf of

the party's nominees for the U.S. House and

Senate in the general election.

With regard to the 1980 Congressional general

election, the state committee could have spent a

MUR 1460: Excessive Coordinated P81"ty

Expenditures by Party Committee

On January 11, 1984, the Commission entered i!lto

a conciliation agreement which concerned Impermissible expenditures made by a state party

committee (the state committee) on behalf of two

Congressional candidates campaigning for reelection in 1980.

Complaint

On August 3, 1982, the Commission referred

to the Office of General Counsel findings of a

final audit report which indicated that, In mak~ng

expenditures to support the 19,80 general election

campaigns of incumbent Candidates A and B, the

state committee had violated: -- 2 U.S.C. §44Ia(d)(3)(B) by making coordinated

expenditures on their behalf Whi<;h e~c~eded

the state committee's 1980 spending limit for

each candidate (i.e., $14,720); and

2 U.S.C. 5441a(a)(2)(A) by spending more than

$5 000 in in-kind contributions for each can- , .. didate's general election campaign.

This article does not summarize every stage in

the compliance process. Rather, the summaries

provide only enough backgr?un~ to make clear the

Commission's final detarmlnation, Note that the

Commission's actions are not necessarily based

on, or in agreement with, the Genera~ Cou!1sel's

analysis. The full text of these MURs IS available

for review and purchase in the Commission's

Public Records Office.

SUMMARY OF MURs

The Act gives the FEC exclusive jurisdiction

for its civil enforcement. Potential violations are

assigned case numbers by the Office of General

Counsel and become "Matters Under Review"

(MURs). All MUR investigations are kept confidential by the Commission, as required by the

Act. (For a summary of compliance procedures,

see 2 U.S.C. §§437g and 437(d)(a) and 11 CFR

Part 111.)

•

•
10

Political Committees

Registered political committees are automatically sent the Record. Any change of address by

a registered committee must, by law, be made in writing as an amendment to FEC Form I

(Statement of Organization) and filed with the Clerk of the House, the Secretary of the Senate, or

the FEC, as appropriate.

Volume 10, Number 

confirming that it had granted the state commit

tee prior authorization to make the expenditures

the state committee's total spending for Candi

date A would still have exceeded the combine

statutory limits.

Commission Determination

On January 10, 1984, the Commission vote

to enter into conciliation agreements with Candi

date A and the state party committee, in which

the respondents agreed that:

Candidate A had violated 2 U.S.C. S441a(f

by accepting excessive in-kind contribution

and coordinated expenditures from the state

com mitteej and

The state committee had violated 2 U.S.C

§441a(<:l)(3)(B) and 44Ia(a)(2)(A) by making ex

penditures on behalf of the general election

campaigns of Candidates A and B which had

exceeded the statutory spending limits avail

able under these provisions. (See page 9.)

As part of the conciliation agreements, Candidat

A agreed to pay a civil penalty of $750 and the

state committee, a civil penalty of $1,500.

May 1984 FEDERAL ELECTION COMMISSION

CHANGB OF ADDRESS

Acting on the Commission's determination, the

Office of General Counsel conducted an investigation of the state committee's expenditures on

behalf of Candidate A. As part of its investigation, the General Counsel asked the state committee to submit evidence documenting the national party committee's prior authorization of

the spending. In response, an official of the state

committee supplied two written statements which

indicated that, during a telephone conversation

some time between October I and October 15, the

national party committee's counsel had granted

the prior authorization. The state committee official also supplied a copy of an unsigned letter

(dated October 31) from the national party committee to the state committee purporting to grant

the authorization. (The letter had been kept on

file at the national party committee's offiees.)

The General Counsel noted that, even if the

national party committee had provided evidence

On October 5, 1982, the Commission accepted the

General Counsel's recommendations with regard

to the state committee and candidate A, but it

voted to take no further action on Candidate B's

possible violation of the election law.

Other Subscribers

Record subscribers (who are not political committees), when calling or mailing in a change of

address, are asked to provide the following information:

1. Name of person to whom the Record is sent.

Z. Old address.

3. New address.

4. SUbscription number. The subscription number is located in the upper left hand corner of the

mailing label. It consists of three letters and five numbers. Without this number, there is no

guarantee that your subscription can be Ioeated on the computer.
-11

AREA(S) OF INTEREST (check one or more)

Volume 10, Numbe

seQ

_~/ Membership Organization

__I Nonconnected Committee

__I Partnership

__I Elections Administration

__I Research Organization/Public Education

FEDERAL ELECTION COMrvllSSIOI'J

If you would like to designate someone on your staff to receive

the Record, please complete and return the form below. There is no

fee.

·If you are not a committee treasurer, but would like to name

someone on your staff to receive the FEe Record, you also may use

the form.

As treasurer, you would continue to receive the Record and

other FEe publieations,

As the designated treasurer of your committee, you automatically

receive a subscription to the Record, the FEC's monthly newsletter,

and copies of other pertinent FEC publications, free of charge.

There may be others on your staff (e.g., your assistant, legal

counsel, fundraising representa tive or bookkeeper) for whom a

separate subscription to the Record would be beneficial. To help

committee staff carry out their tasks, and thereby help committees

comply with the election law, the Commission is happy to send them

the Record and other pertinent materials.

Dear Treasurer:*

__I Candidate

__I Party

__I Corporation

__I Labor Organization

__I Trade Association

/ Other (specify): ---~- .--_._" --- .- ...- _._--..."-~....,-,-:'--...""''''''-...,,,, ...,.....,.~,...-, ..............----.,~~--~----------

NAME

ADDRESS

May 1984

•
12

Official Business

Turn to Page 11

If you would like

the FEe to send

its publications

directly to some

one else on your

staff,

Volume 10, Number 

FirstClass Mail

Postage & FeesPaid

FEC

Washington, D.C.

PermitNo.G-31

FEDERAL ELECTION COMMISSION

FEDERAL ELECTION COMMISSION

1325 K Street, N.W.

Washington, D.C. 20463

May 1984