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THE FEDERAL ELECTION 

COMMISSION 

1325 K Street N.W., Washington, D.C. 20463 

Volume 5, Number 2. 

RESTRICTIONS ON THE USE 

OF CAMPAIGN FINANCE REPORTS 

On December 21, 1978, the Federal Election Commis· 

sian approved an addition to an· informadon she:et t?" the 

availability of FEC public records. The new language 

concerns the legal· restrictions on ·the use of· information in the campaign finance reports disclosed· by the 

Commission. Under 2 U.S.C. §438(a)(4), . information 

copied from c_ampaign finance reports and statements 

may not be sold or. utilized for the purpose of solicit· 

ing contributions or for any commercial purpose. This 

includes use of information copied from FEC. reports to 

compile a mailing· 'list for sale or rental. The inform~tion 

sheet explains that this prohibition is not limited to solici· 

tations of contributions to Federal candidates but extends 

also to solicitations of any· contribution, whether political, 

charitable or other. It is unlawful, for example, to use 

information in disclosure reports to solicit contributions to 

a State or local"candidate or to a charitable organization. 

The prohibition on making commercial use of information 

taken from campaign finance reports applies to a mailing 

list . compiled to solicit sales, whether. or not for profit. 

The FEC regulations exempt froni the ·definition of com· 

mercial purpose, however, -i:he use of information in newS 

media and books. Thus, a person may publish "information 

taken from reports, provided the principal purpose of the 

publication is not reprinting disclosure reports. 

Violations of this provision of the Act are punishable 

by payment of a civil penalty. Inquiries concerning the 

use of disclosure' documents· should be addressed· to the 

Public Records Office. 

SPECIAL ELECTIONS IN WISCONSIN 

AND CALIFORNIA 

Wisc.onsin has. schequled. special elections for Februa,.y. 

20, 1979 (prima,.y)"and April 3, 1979 (general) to fill the 

seat of the late Representative William A.· Steiger (6th 

Congressional Disti"ict). The .spec.ial···erections in califOrnia 

to fill the seat of the late Representative Leo· Ryan (11th 

Congressional . DistriCt) have been scheduled for March 6, 

1979 (prima,.y) and April 3, 1979 (general). 

Februa,.y 19

Candidates in these special elections and all political com

niittees sUpporting such candidates, either by makin

contributions to them . or making expenditures on the

behalf, must file pre- and post-election reports; Pre-elect.io

reports must be filed ten days before the election; po

election reports are due 30 days after the election: Comm

tees makin9 monthly reports are ex9nlpt from- 'filing pr

and post-election reports;" 

For more details, consult the FEC Campaign Guide f

Congressional Candidates or the Campaign Guide f

Political Committees. Information on the specific filin

dates for each special election may be obtained by callin

the toll-free line of the Federal Election Commissio

(800/424-9530) .. 

IRS REGULATIONS 

. P.olitieal organizations under the jurisdiction of th

Federal Election Commission are reminded. that they ma

have certain obligations to file Federal income tax retur

with the Internal Revenue Service. As a courtesy to o

readers, and at the request of the Internal Revenue Servic

the following information is reprinted from the Intern

Revenue Code: 

Section 527 of the Internal Revenue Code 

of 1 !154 provides that political organizations 'are 

exempt organizations for income tax purposes. 

However, amounts received in. the o.rdinary 

courSe of any trade or b' 'siness and any invest-: 

ment income received by a political organization such as interest, dividends, rents and 

royalties, plus the excess (if any) of gains 

from the sale or exchange of assets over the 

losses from the sale or exchange of assets are 

includible in income for federal .income tax 

purposes.. 

Taxable income of a political organization 

is the excess (if any) of the politicalorganiza' 

tion's groSs income fOr' the taxable year (not 

including suCh exeriJpt iteins as COntributiOns,· 

membership dues or proceeds from certain 

fund-raising events) over the direct expenses 

continu
incurred in earning that income. A sp_ecific 

deduction of $100 is allowed against taxable M • o • • .•: ' ,·• • o' ,. ' 

inaome. - <, __ •• ; c . ' ~-

ADVISORY OPINIONS: SUMMARIES 

Designated as· AD's, Advisory Opinions discuss t

applicatiqn of the Act or CommissiotHegulation$to spe

fic factual situations.· Any qualified i~erson reque~ing 

Thus, a political organization is subject to Advisory Opinion who in good/faiill-·'act$ in' aceoidart

federal income tax, and is required to file a with the opinion. will not ~e sub]eCI:Yo any s.inctio~$4~d

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;eturn; if its (axabfe income· exceeds $100. .th<>··Act. The opinion may also ber,eiied, on· byaily'o~h

,- '· PerSc#l :involved in a specific transa(:tion-~which, is _indist

Newsfetter,fdnds,describ!1d in section 52lfg)-o( · guis!iable in· all material aspects from thractiyiiy-discu~s

the Code l!re noi 8_ntitfed tl] the specificdediJc,. in. the Advisory Opinion. Those seeJ(irig guiifance for th

tion of $fOO-niJtedabovtf. . own :activity should consult the full text of an Adviso

Opinion and not rely only on the summary gillen he

_ Po/i@~f;,o--rual)Jzitlons ifJ~f:- are. s_itbiet:i: i:o . · ; ;<, . . . • ~ ,_ . · .: " >--' , • ~-. __ .. :.- ,·- , ;-':. · ftideiBi'iiiCdriiiNa)c' unif11i' stctiot'r 527 of·'the < AO 1978;831'"1.1.e:9f.Ai#hori~atioil F,_().rll)1to·$8cuia · · .. 

·. c<fde'i~~rTKil.lir~ /o·;;tl'a' Form ·ri20-~¢{'0~ ., ' · · · · '· ·· '·' • &rP'oiati'Approvat.j)f&ili~itations"' - • 

· or before the 15th ·day of Mlilrch following the ·by Trade Association . 

. . ,, c{ose _of the,cafendar year; returns made .on . The· Construction. Equipment Political Action Commit

.. Lthe. (?asis of,a fiscal year must be filed on. o; (CEPAC), a . separate _segregated 'fund of a .tr~de as!i<i

.. , before the 15th day of the third month fo/foVf, tion, may set up a Booth· at tliO:. a~nual oonvention 

· . • _ing the ·~lose of the ffscaf year. that trade ~assoCiation ·.to _ attempt . to secure oorpor

approval.foi CEPAC,SQiicitations. Specifically, CEPAC m

'' >--Fdrrn .'tt20-PO( as 'wett.:a&-aisist~Qce in com- use the booth to obtain from representati~es of the-me

pleting the forrn, is avai(a_ble. at focal offices . ber corporations of the trade association their signatures 

of the Internal Revenue Ser:vice. an authorization~forin gi~ing approiial for the solicitation 

For fur:\her infor!Jlation,_ contact the Internal Revenue 

Service ... 

ADVISORY OPINION REQUESTS . 

The following, cl)art lists. Advisory Opinion B_eqi{ests 

(AOR's), with a brief description of the subject matter,.the 

date the requests were, made pubiic li(ld the 'number 'Of 

pages of each. request.' The fo'n texfof each AOR is available to the public in the COmmission's Offfce'ot P~biic - - . • . - ·- -··'-1 - .... Recorqs. ·_· · 

Datelillade 

AOR. SubjeCt Public . 

1978-100 Use of-surplus· 12113na 

camp~ig~ funds. 

1978·101 use oimoriev h~id in 12/19na .. an acCount. to cOVer: - an· uncashed check. 

1978·102 PaymenHor..non· .12/20/JS 

partisan radiq,aod tela· 

viSion· annoU'hCefn~ntS. · 

1978-103. Method of·reponing· 12122na 

c_Certain campaigil . 

contribUtions . . , 

Numlielof .. 

,Paj)es ' 

2. 

1_ 

2 

2 

their stocktlolders.~~nd their exe~utive and aclmfrii~rat

person riel.' 11-CFR ·114;8. CEPAc's use, of speciai' auth

ization.forms to obtain cOrporate approviifto .Oiicif auth

ized pe_rsonnel is permissible as long as; . . . 

- · The ·authorizatio.n form slates its purpo!le and any lim

ations, tl)at.GEPAC wishes_ to place on _the class 

persons to be. sol.icited; and · · _ ,_ . · ' . 

The authorization form indicates .that CO[porate appro

al is required and that such $Qiicitations muSt be limit

to one trade assooiition p~r yea[.' · · .•. . . 

A. .boi.th may be •used to se.cure corporate approval f

solicitations provided: ·· 

- The SQii~jtation approval reque,rt i,s i,n}lllritiriiJ; imd 

-• The request, torm is signed by a person a4thorized 

grant such approval. 

Once corporate approval .has beeri granted, C,EPAC m

solicit and. acceptcpntributions' from tile personnel auth

ized to be solicited by the corporation. Chairman Jo

Aikens filed a !liss~nting opinion: (Lengtb, Includi

di.Senting opiriio~·:'8'pages) . · 

AO 1978-93; O~e'Ot E~cess . , _ . _Campaign Funds .. 

Senator Llo.vd Bent!len may transfer unexpended.campai

fu~dS from his \97(J'"camfl~.igri tO hisreel~ctiori 00mmit

for use in the .1982 election, Commissi.on regulations p

vide that· a candidate may transfer funds from a previo

campaign committee to· a currently regi_stered princip

The RECORD/s pubfishBd py_ the Federal Election Commission, _1325 K Street, N.,W.,Washingtdn,D,.C. 20463. Commissionersare:Jtfa_n D. Aikens,,Chairman; Robert 0. Tiernan, Vice Chaiilnan;Thpmas E. Harris;John.W. McGarry; 

William L. Springer; Vernon W. Thomf!On:J.S.Kimmitt;Secretary.ofthe Senate, Ex Officio'; Edmund L,.Henshaw, Jr., 

Clerk of the House ofRepresentatives, Ex Officio. For more informaticm, cafl5_~3,-4fX!8 or.tofl free 800/424-9530. 

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campaign committee, ·as' long· as none of ~he tra~sfers consist of funds whicll ·.would be in violation of ·.the Act. 

(length: 2 pages) , ,.. . ' ' · 

· With reg~rd to this opinioJ1. and the following'two opinions, 

the Commission luis no jurisdiciion over tKe 'ap~lication of 

tax laws and House cir Senate Rules to' the situation described. ' 

AO 1978-94: Use of Excess 

· Campaign Funds . 

Excess campaign funds remaining from the principal-cam-

. paign committee and three -other authorized cominltt~es _Of 

the late Congressman R~lpll H. Metcalfe may be used for 

several purposes consistent with State and Federal laws. 

· The funds may be transferred to Federal, State, or 'local 

election campaign co~,mittees ofthe Congressman's son,. to 

a political ward organization, to the surviving members of 

the Congressman's immediate family, to employees of his 

congressional and campaign ccimmittee staffs and to qualified charitable organizations. · 

For contribution purposes, thidour campaign committees. 

are considered a single committ~e. Thus, any ·transfers to 

political committees or Candidates involved in Federal 

elections would be subject to one overall contribution limit. 

A contribution to Ralph Metcalfe, Jr., as a candidate for 

Federal·office for example, would be limited to $1;000 per 

election. Tran'riers to a State campaign of Ralph Metcalfe, 

Jr. would not be limited, -however,· since contribUtions 

made to State and local elections are not subject to the 

monetary limits ofthe Act. (Length: 3 pages) 

. AO 1978-95: Use of .Excess 

Campaign Funds 

Congressman James J. Florio may use excess campaign 

funds to retire a debt rel'nainin·g from_ his ·197? ·g~bernatorial camp~ignprovided there are no State or Federal 

laws prohibiting the transaction. The Act provides .that 

candidates· for Federal office may use excess campaign 

·funds to support their activities as Federai_officeholders~. to 

contribute to a qualified charitable organization or to 

defray expenses for ''any other lawful purpose." 2 U.S.C. -· 

§439a. The committee should report the trans~er of funds 

on the report covering the period when the transfer is 

made. (Length: 2 pages) 

AO 1978-96: Honoraria 

When Congressman Clarence J. Brown accepts a. speaking 

engagement, he may request that the sponsoring organization donate his honorarium to any of five charitable organizations he suggests in a letter: Under 2 U.S.C. §441i(b), if a 

sponsoring organization chooses to make a donation to any 

of the five or more charitable organizations suggested by 

Mr. Brown (instead of paying an honorarium to Mr. 

Brown), the payment will not count against Mr. Brown's 

honorarium limit. (Length: 2 pages) 

ALTERNATE DISPOSITION OF 

. ADVISORY OPINION REQUESTS 

The Commission has responded to the following 

Advisory ·Opinion Requests in a manner other than the 

issuance of an Advisory Opinion: 

3 

AOR '1978-70 was withdrawn by 'its requekler. 

-- AOR 1978-~1 was answered by a letteHrom the Com

mission's General Counsel stating that the Commissio

had ~~sidered a response propo~d by the Office o

General Counsel, but was ·unable to agree upon a

opinion by the requisite affirm·ative vote of four mem

bers. 

COURT DISMISSES TWO SUITS . 

CHALLENGING CONSTITUTIONALITY 

OF THE. ACT , 

Two suits filed against the Federal Election Commissio

in 1978 challenged the constitutionality of §441 b of th

Act, which limits solicitations by corporations (and the

separate segregated funds (PACs)) of voluntary ccintribu

tions to their PACs. The ·united States District Court fo

the District of Columbia dismissed both suits., 

PLAINTIFFS' ARGUMENTS 

In Martin Tractor Company, et a/. v. Federal Electio

Commission, et a/., filed on July 7, 1978, three corpora

tions and their .affiliated PACs, three executives and on

hourly employee of one of the corporations were th

plaintiffs. They sougllt injunctive relief and .a ,declarator

judgment that §441 b of Title 2 is an unconstitutiona

violation of plaintiffs' rights under the First and Fift

Amendments of the United States Constitution. . Spec

fically, plaintiffs alleged that: 

1. The limitations on the corporate solicitation of hourl

employees for contributiqns to the roiporate PA

unconstitutionally impinge upon plaintiffs' right

to free speech, assembly and association and the. right t

hear, under the First Amendment. (Under §441b

corporations and their PACs may use corporate funds t

solicit employees twice a year; the solicitations must b

made in writing and delivered to the employee's res

dence.) 

2. The limitations on the solicitation of hourly employee

violate plaintiff employee's right to associate with th

other plaintiffs. . . 

3. These same limitations, by arbitrarily dividing employee

into tWo classes and restricting free flow-of informatio

between such classes, dis..;riminate against Plainti

employee in violation of his Fifth Amendment righ

to due process of law. . 

4. The term "solicitation" as used in §441b ·is impermis

sibly vague, causing plaintiffs to be uncertain as to th

extent and application of the prohibitions of 2 U.S.C

§441b. When combined with the threat of crimina

sanctions, plaintiffs asserted, this vagueness restrain

their ·activity, in violation of the First and Fift

Amendments. 

On July 20~ 1978, the National Chamber Alliance fo

Politics, et al. filed suit against the Federal Election Com

mission, similarly challenging the constitutionality of th

PAC solicitation provisions and asking for injunctiv
In addition, three major natiorlal party committees and 

13 affiliates of the national party committees plus nine 

national party congressional campaign committees will be 

aud;ted. 

. AUDITS RELEASED TO THE PUBLIC 

The Federal Election Campaign Act requires the Com· 

mission ", .. to make from time to time audits and field 

investigations with respect to reports and statements filed 

under the Act." The Commission is also .required to conduct audits of all campaigns of Presidential candidates who 

receive public funds. Once ar. audit is completed and an 

audit report is approved 'by the Commission, the report is 

made public and is available in the Office of Public Records 

and the Press Office. The folloi(Ving is a chronological 

listing of audits released as of january 2,_1979. · 

Audits 

1. Vermont State Democratic Committee 

2. Congressional Victory Fund 

3. Delaney Committee for Congress (NY /09) 

4. RoybaiCampaign Committee (CA/25) 

5. Minnesota Dollars for Democrats 

6. Texas Democratic Party-Federal 

7. Washington State Republican 

Federal Campaign 

8. State Democratic Party of Pennsylvania/ __. 

Voter ·Registration Drive Committee 

FEC PUBLISHES " 

NAMES OF NONFILERS 

. -

Date Made 

Public 

12/5 

12/5 

12/5 

12/12 

12/12 

12/21 

12/21 

1/2 

The Commission is required by. the Federal. Election 

Campaign Act to publish the names of candidates and 

political committees who fail to file required reports of 

receipts and expenditures. Before publishing the mime of a 

candidate or committee who has failed to file, the_ Commission sends them at least two notices. If, following receipt of 

these notices, a candidate or committee continues not to 

file the required report, the name of that "nonfiler" is 

FEDERAL ELECTION COMMISSION 

1325 KSTREET, NW 

WASHINGTON, DC 20463 

OFFICIAL BUSINESS 

made public. The following is a list of recent Comm

nonfiler actiorls:' · 

Publication Post-Primary Report .Numb

Date Not Filed: Nonf

12/14/78 . Ariz.ona 

12/14/78 Colorado 

12/i4/78 Connecticut 

12/14/78 Florida. 

12/14/78 Maryland 

12/14!78 Minnesota 

12/14/78 New York 

12/14/78 Rhode Island 

12/14/78 Vermont 

. 12/14/78 Wiscon.sin 

12/14/78 Wyoming_. 

12/18/78 LOuiSiana 

NEW APPOINTMENTS 

.·In recent months, the Cq~_rriission tias made s

new appointments in the Information Division. Eff

Jimuar¥. j!mt Dr .. Gary Greenhalgh, Director o

National Clearinghouse, . began to serve. simultaneou

Assistant Staff Director for the Information Divisio

succeeds David· Fiske who previously served as 

Assistant StaffOirector for Information and Press O

Fred Eiland wa~ appointed. Press Officer for the Com

sion on Janu~ry-2, 1979 .. In October 1978, Judith C

became Chii!f of Public Communications. Louise .W

continueS to Serve as Chief of Publications. 

I FIRST CLASS MAIL

POSTAGE & FEES PA

FEC 

WASHINGTON, D.C, 

PERMIT NO. G-31 
relief. ·Plaintiffs included the Chamber. of Commerce (a 

nonprofit co;P,6iation), its . separate segregated fund, 

three executive$·, o( the two organizations and- One board 

member of the Chamber of 'Commerce. In this suit,· plain~ 1 tiffS argued that, by en_Umeratin·g those whom the co·rpora-

. tion o,rPAC may solic\t;;§441b ofthe Act: 

1. Limits plaintiffs' First Amendment right to comrnuni'-

cate to a more broadly based audience for the purpose 

of'~~SolicitirlQ" their fimir1Cia1·assi:stance; 

2. Limits plaintiffs' ability to' associate with those not 

enumerate~ in the Act as potimtiatsolicitees; · 

3. Violates the First Amendment :right of .the potential 

solicitees (not enumerated in the Act) to associate 

with the plaintiffs; . 

4 .. DiScrimiilates aga_i'nst plaintiffs, in ViolatiOn of . their 

Fifth. Am.endment · rights, by permitting candidates 

and their committees to solicit funds from any PAC but 

denying this same right ·to corporations and their PACs. 

Plaintiffs in both suits argued that the harm brought about 

by §441b was actual, not hypothetical, because plaintiffs 

have limited their solicitation actiVities, fearing the imposition of the civil and Criminal sanctions contained in· the 

Act. 

COMMISSION'S ARGUMENTS 

The Federal Election Commission petitioned the Court 

to dismiss both suits, arguing, first, that' the Court lacked 

jurisdiction because: 

1. Special ·statutOrY judicial reView· niechahishlS, such -as 

§437h of the Act, are the exclusive avenues for judicial 

review. 

2. Under §437h of the Act, the Commission, the national 

committee of .any political party, or any individual 

eligible to vote may bring appropriate actions to challenge the constitutiOnality of the- Act. The Commission 

argued that none of the plaintiffs were eligible to bring 

such an action under §437h. · 

3. Challenges brought by any other person or entity must 

be raised during the ordinary course of enforcement 

procedures provided in §437g of the Act; 

The Commission also .argued that the complaint did not 

present a "case or controversy" because plaintiffs can make 

no showing of present, direct injury resulting from §441 b .. 

In the Martin Tractor suit the Commission made the additional argument that plaintiffs failed to state a complaint 

upon which relief could be granted. In response to the 

plaintiffs' contentkm that ihe term "solicitation" is imper-

. missibly vague, the FEC argued that the term has been 

employed in a_ wide variety of Federal statutes without 

further definitiOn and with no apparent need to ''guess at 

its meaning." 

In its motion to dismiss the suit filed by the National 

Chamber of Commerce Alliance, the Federal Election Commission further argued that plaintiffs failed to state a claim 

upon which relief could be granted because §441b did 

not violate the plaintiffs Fir~.or Fifth Amendment ·rights. 

The CommissiOn'·s arguments are_ summarized below: 

1. Plaintiffs failed' to see that §441 b grew out of (and was, 

in fact, an exception to) a long serieS of Congressional 

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efforts, dating back to 1907' to prevent actual cor

tion' Or: the· appearance of corruPtion ariSi'ng from 

inflUence· of corporate general treasUry fu-nds on Fed

elections. The Commission explained that subseque

Congress also ~reco_gnize~ that the: individuals ·Y

compris8. a corpo-ration .may have· an. i~terest ~in. ~C

bining their fund~ for cbre<:~ use in <ia~4i~ates; :"

paigns. Thus, with the passage of the Federal Elec

Campaign· Act of 1971, Congress wrote a special ex

tion to the general ban on corporate election s_pend

It permitted the use of corporate funds to. eStab

administer and solicit contributloiis to a separate se

gated fund. 

2. The challenged subsection. puts restrictions only on 

solicitatioh of cOntributions. Plclintiffs·are free to eng

in discussion of'general political issues; the Act does 

restrict such actHtitY. ' ' · 

3. Section 441b. ·does not restrict plaintiffs' obility 

associate with potential solicitees nOt enumerated in 

Act. Such persons, including other PAC's, ean fre

contribute to a corporate PAC and"asso-eiate with it. 

4. Section 441b does not invidiously discriminate aga

corporations. The Commission said, ''the notion of e

protection does not prevent Congress from 'classif

for different treatment those persons.in distinguish

circumstances." Since _corporations, _thrOUgh their ·PA

are in a uniqu'e po·sition tO ·exert inflUence. on m

candidates throughout the entire: nation, they 

treated differently. In this ease, the Commission ad

plaintiff Chamber of COmmerce had chosen to estab

its PAC undeJ §441b 'to take aavantage of the provi

permitting corporations to use their treasury fund

administer ·a PAC and solicit contributions to it. 

contin

FEC PUBLIC APPEARANCES 

In keeping with its objective of making ,inform

tion available to the public,. the Federal Electio

Commission regularly accepts invitations for i

representatives to address public gatherings on th

subject of campaign finance laws and the Commissio

itself. This regular column lists scheduled Commi

sion_ appearances,. detailing the name of the spon

soring organizcition, the location of the _event an

the Commission~s representative. 

2/6 Federal Bar Association 

Washington, D.C . 

Chairman Joa~ Aikens 

2/13 Chamber of Commerce 

lndependance, Kansas 

Chairman Joan Aikens 

2/22-23 Practicing Law Institute 

Washington, D.C. 

Chairman Joan Aikens 

Jan Baran, Executive Assistant 

to the .Chairman 

William Oldaker, General Counsel 
Commission added that . individual .Plaintiffs ·Could 

establish their own PAC; under those circumstances, the 

law would permit plaintiffs to solicit.anyone, including 

other corporate I'ACs. 

'. !.: 

. ·On November 1 8, the U.S. District Court for the District of 

Columbia.· granted the. Commission's motion to dismiss the 

Martin Tractor suit·: 0~ November 22, the Court dismissed. 

the Naticmal ChamQer Allianc~ for Politics suit as well.· In 

both .orcjers, the. Court said that the special provision of 2 

U.S.C. §437h(a), expediting judicial review of constitu· 

tiona I issues,. is inapplicable to .the plaintiffs. The individual 

plaintiffs. sue "not in their individual capacitites but rather 

to vindicate the ,.rights of .the corporate .entities. That 

deri~ative right was. not the constitution~! right of an 

'individual .eligible to vote'. which, Congress considered 

'appropriate' for. vindication in a declaratory. judgn1ent 

action under this section (437h)." Moreover, the Court 

held that the plaintiffs presented no.,case or controversy 

sufficiently ripe for decision by a Federal court. Plaintiffs 

in both suits filed:aPPeals. · · 

REPUBLiCAN NATIONAL COMMITTEE et al. 

v. FEC . , . .. ·.. . . . . 

On June 16, 1978, the RepublicanNational Committee 

(R NC) filed a suit against the Commi.Sion. The suit chal· 

lenged the conStitutionality of certain provisions ()f the 

Presidential Election Campaign Fund which affect Presiden· 

tial candidates who accept public funds for the general elec· 

tion. (The RNC. also requested· injunctive relief and the 

convocation of a three-judge district cou.rt to hear the case, 

in accordance with 26 U.S.C. §90.11(6).) The provisions 

which the RNC challenged stipulate that, in order to receive 

any Federal funds, Presidential candidates of a major party 

mi..tst agree not to make qualified campaign expenses in 

excess of the amount of .public funds they receive. Candi· 

dates must also certify that neither they nor any of their 

authorized committee's :Will accept· priVate- contributions 

to defray qualified campaign expenses, except to the 

extent necessary to make ·up any _deficiency in public 

funds. The RNC challenged these provisions on the follow 

ing grounds: 

1. The statutory scheme (described above) violates . the 

First Am~ndment because it -restricts the ability of 

candidates, their political: parties, supporters and contributors to communicate their ideas; 

2. The R NC claimed· that, because of legal arid pr-actical 

considerations, th.e Republican candidate must accept 

pub I ic financing and thereby agree to comply with 

un~onstitutional requirements. 

3. The statutory scheme, according to the RNC, unconsti· 

tutionally discriminates against challenging candidates 

because incumbent Presidents have the advantage of 

fr~e publicity and significant resources attached to 

tl)e executive branch (e.g., · speechwriters, jet planes, M~). . . 

4. According to the RNC, the statutory scheme discrimi· 

nates against candidates not politically allied with labor 

organiz~tions, in violation of the· First and Fifth Amend· 

ments. Under 2 U.S.C. §.441b, labor organizations may 

spend_· ~nlimited funds-- ·tO ·communicate with ttleir 

·members on .political ·. matters .. Candidates without 

such .. labor support are disadvantaged, alleged the RNC, 

because oo ·other group is in a position-to expend ·suc

l'arge. sums for communicatiori. with ~-voters and an

expenditures which -can_didates make to communicat

directly with voters count against their expenditur

limits. 

5. The RNC argued that the statutory scheme is overbroad

6. The RNC asserted that the statutory scheme violates th

people's rMained rights under the Ninth Amendment o

the Constitution. 

The Federal Election 'Commission filed,a motion to dismis

the suit, arguing that plaintiffs' constitutional objection

had been rejected by the Supreme Court in Buckley v

Va/eo. Secondly, the Commission argued, plaintiffs' des

cription of how the statutory· sclieme of the Act woul

impact on the 1980 Presidential campaign is speculative an

doeS not present a "ripe" controverSy: nec·essary tO th

exercise of judicial power. Further, the suit presents polit

cal guestions not subject to judicial resolution. 

The Court denied without .prejudice the Commission

motion to dismiss on November 30, 1978, and grante

the RNC'smotion to convene a three-judge district court t

hear the case.. It also denied the motion of Common Caus

et al . .to intervene, but permitted them to file briefs amicu

curiae. 

FEC AUDIT POLICY 

On December 1.4, 1978, the Commission reaffirmed 

the .Audit Division's current audit policy, adopted in 

November 1976and amended in April 1978. This policy 

covered audit activity to be conducted during the remain

der of Fiscal Year 1979. 

The approved policy calls for audits of all categories o

committees registered under. the Act, including referral 

audits approved by the Commission. Referral audits would 

include candidates imd committees, referred by the Reports 

Analysis Division or the Office of General Counsel, whose 

repon;s 8nd statements indicate a need for- assistance in 

improving reporting or record keeping sYstems:. ~. 

First priority will be given to the completion of the 1976 

Presidential audits. Next, the Audit Division wi.ll complete 

its audits of approximately 60 State party committees. 

As a third priority, the Commission will audit nonparty 

committees as follows: 

.. All committees which received or expended $500,000 

or more in Calendar year 1976 and 1977;' 

.. Fifty percent of the committees which received or 

expended between .$2.50,000 and $499,999 in calendar 

year 1976 and 1977; · 

.. Twenty committees which received or expended less 

thari $250,000 in calendar year 1976 and 1977; 

... Approximately 25 committees consisting of: 1) committees,:nOt i_nclud)ng the.above, whiCh rec_eived or expended in excess: of $:250,000. during· 1978, and 2) any 

committees in any of the above categories which request 

an audit .. : · continued