FEDERAL ELECTION COMMISSION

TABLE OF CONTENTS

I REGULATIONS

2 SPECIAL ELECTIONS: Florida

COMMISSIONERS

3 FEe Delegation Visits USSR

4 ADVISORY OPINIONS

5 AUDITS: Babbitt tor President

PUBLICATIONS

6 1988 Annual Report

6 Federal Elections 88

6 CLEARINGHOUSE

COURT CASES

7 FEC v, Citizens Party (87-eV-1577)

7 FEe v, Furgatch (88-6047)

7 FEe v, NOW

800 LINE

8 Political Activity in the Workplace

10 Multieandidate Committees

11 INFORMATION

11 INDEX

Washington DC 20463 Volume 15, Numbe

penses and subsistence (meals and lodging) 

penses. The regulations apply the dollar lim

tions specified in the Act only to unreimbur

transportation expenses incurred by individu

for travel on behalf of a candidate or polit

party. No dollar limitations apply to unre

bursed payments by volunteers for usual and n

mal subsistence expenses that are incidental 

the volunteer's activities; these payments 

neither contributions nor expendi tures, regard

of their aggregate value. The current regulati

do not exempt unreimbursed SUbsistence expen

by paid campaign and party workers.

The second alternative would also differ

tiate between exempt transportation expenses 

exempt subsistence expenses. Unlike the f

alternative, however, it would include within 

subsistence exemption unreimbursed payments 

food and lodging expenses incurred by campa

and party workers while traveling under the 

emption at their own expense on behalf o

candidate or political party. Volunteers wo

still be permitted to incur unlimited subsiste

contin

July1989 999EStreet NW

TRAVEL EXPENSE EXEMPTION AND

ACTIVITY BY FOREIGN NATIONALS:

NOTICE OF PROPOSED RULEMAKING

On June 7, 1989, the Commissicn published in

the Federal Register a Notice of Proposed Rulemaking seeking comments on proposed changes in

the regulations governing political activity by

foreign nationals in federal elections. See 54 Fed.

Reg. 24351. The notice also included possible

alternatives to a rulemaking proposal published in

September 1988 regarding the travel expense exemption.

The current 11 CFR 110.4(a), based on 2

U.S.C. §441e, prohibits foreign nationals from

making contributions in connection with any election to local, state or federal office and prohibits

other persons from soliciting or accepting their

contributions. (Under the Act, permanent resident aliens are not considered foreign nationals.)

Since the Commission has consistently interpreted

prohibitions in the Act against contributions by

certain persons as also prohibiting expenditures by

them, the proposed revision would add language to

section 110.4(a) explicitly prohibiting foreign nationals from making expenditures and from participating in certain election-related activities.

Such activities would include election-related decisions by corporations, labor organizations or

political committees.

With respect to the travel expense exemption, the Commission supplemented its original

Notice of Proposed Rulemaking by offering three

alternative amendments to 11 CFR 100.7(b)(8) and

100.8(b)(9). Under those sections, an individual's

unreimbursed payments for personal travel expenses incurred on behalf of a candidate are

exempt from the definition of "contribution" and

"expenditure" as long as such expenses do not

exceed $1,000. Similarly, travel expenses incurred by individuals on behalf of a party committee are not "contributions" or "expenditures" until

they exceed $2,000, after which the contribution

limitations apply to that amount spent in excess

of $2,000. These exemptions are based on section

43l(8)(B)(iv) of the Act.

The first alternative the Commission proposed would retain the current regulation as written. Section 100.7(b)(8) separates personal travel

expenses into two categories: transportation ex-
July 1989 FEDERAL ELECTION COIVlMISSIOI\J Volume 15, Numbe

continued from p. 1

expenses at any time. In substance, this alternative is the same as the one proposed in the

September rulemaklng notice.

A third alternative offers a new approach to

the travel exemption. Under this revision, there

would be no distinction between expenses incurred

by paid campaign and party staff and expenses

incurred by volunteers. The dollar limitations of

the statutory travel exemption would apply not

only to an individual's unreimbursed transportation expenses but also to his or her unreimbursed

lodging expenses. 'The two kinds of expenses

would be aggregated, with the total counted

against the pertinent dollar limitations. The

individual's own unreimbursed expenses for meals,

however, would be SUbject to no dollar limitations; they would be totally exempt.

The Commission welcomes comments from

all interested persons regarding these proposed

changes in the regulations. Comments must be

made in writing and addressed to Susan E. Propper, Assistant General Counsel, FEC, 999 E

Street, NW, Washington, DC 20463.

FLORIDA SPECIAL ELECTION

Florida has scheduled a special election to

fill the 18th Congressional District seat of Congressman Claude Pepper, who died in May.

Major party nominees for the seat will be

selected in a primary election scheduled for August 1. The nominees will run in a general election

scheduled for August 29.

If, in either party, no candidate wins a majority of the votes in the August I primary, a runoff

election between the two top vote-getters in that

party's primary will be held on August 15.

Reporting requirements for the special election are explained below. Note that committees

may file a consolidated Pre-Primary and MidYear Report, provided that the report is filed by

July 20.

Further information on reporting or ot

requirements of federal election law can be 

tained by calling the FEC at 800/424-9530. 

Candidates' Authorized Committees

Authorized committees of candidates 

participate in these elections must file rep

according to the schedules given in the ta

below. Committee treasurers should consult 

table that corresponds to the candidate's sit

tion.

Note that an authorized committee must a

file notices on contributions of $1,000 or m

received after the closing date of books but m

than 2 days before an election. The notice m

reach the Clerk of the House and the Flor

Secretary of State with 48 hours of the comm

tee's receipt of the contribution. 11 CF R 10

(f). See also AO 1988-32.

Party committees and PACs

Party committees and PACs that make c

tributions or expenditures in connection with 

special elections during the coverage dates lis

in the table must file the appropriate repo

Monthly filers, however, do not file special p

and post-election reports.

Any PAC (including a monthly filer) t

makes independent expenditures in connect

wi th a special election may have to file la

minute reports on independent expenditures. 

dependent expenditures aggregating $1,000 

more that are made after the closing date 

books but more than 24 hours before an elect

must be reported within 24 hours after the 

penditure is made. 11 CFR 104.4(b) and 104.5(g

Contribution Limits

The limits on contributions to candid

apply separately to the primary election, 

runoff election (if held) and the general elect

100.2, 110.10) and 110.2(0. A candidate m

participate in an election to qualify for the li

in that election.

Where to File

Authorized committees file with the Clerk 

the House (see Form 3 for address). Party co

mittees and PACs file with the appropriate f

eral office (usually, the FEC; see Form 3X 

details).

All committees must simultaneously file c

ies of special election reports with the Flor

Secretary of State, Division of Elections, 

Capitol, Room 1801, Tallahassee, FL 32399-025

The Record is published by the Federal Election Commission, 999 E Street, N.W., Washington,

D.C. 20463. Commissioners are: Danny L. McDonald, Chairman; Lee Ann Elliott, Vice Chairman;

Joan Aikens; Thomas J. Josefiakj John Warren McGarry; Scott E. Thomas; Walter J. Stewart,

Secretary of the Senate, Ex Officio; Donnald K. Anderson, Clerk of the House of Representatives,

Ex Officio. For more information, ca11202/376-3120 or toll-free 800/424-9530. (TOO For Hearing

Impaired 202/376-3136)

2
FEDERAL ELECTION COrvlrVllSSION

Committees involved in the August 1 primary, the August 15 nmo

(if held) and the August 29 genera

elections

Volume 15,Numbe

•

July 1989

FILING DATES FOR

FLORIDA SPECIAL ELECTIONS

Reports sent by registered or certifed mail

must be postmarked by the mailing date given in

the third column. Otherwise, they must be received by the filing date.

Committees may file a consolidated PrePrimary and Mid-Year Report, as long as the

report is received by July 20.

Chart IV:

Report Period

Covered

Reg.!

Cert.

Mailing

Date

FiUng

Date

Committees involved only in the

August I special primary

Chart I:

Report Period

Covered

Reg.!

Cert.

Mailing

Date

Filing

Date

Pre-Primary &:

Mid-Year

Pre-Runoff

Pre-General

Post-General

Year-End

* - 7/12

7/13 - 7/26

7/27 - 8/9

8/10 - 9/18

9/19 - 12/31

7/17

8/3 **

8/17***

9/28

1/31

7/20

8/3

8/17

9/28

1/31

Chartm: Committees involved in both the

August 1 primary and the August

15 runoff (if held)

Report Period Reg.! Filing

Covered Cert. Date

Mailing

Date

Pre-Primary &:

Mid-Year * - 7/12 7/17 7/20

Pre-Runoff 7/13 - ,[/26 8/3 ** 8/3

Year-End 7/27-12/31 1/31 1/31

Chart D: Committees involved in only the

August I primary and the August 29

general elections

Report Period Reg.I Filing

Covered cert. Date

• Mailing

Date

Pre-Primary &

Mid-Year * - 7/12 7/17 7/20

Pre-General 7/13- 8/9 8/14 8/17

Post-General 8/10 - 9/1B 9/28 9/28

Year-End 9/19 - 12/31 1/31 1/31

Pre-Primary &:

Mid-Year

Year-End * - 7/12

7/13 - 12/31

7/17

1/31

7/20

1/31

FEe DELEGATION VISITS USSR

A 12-member delegation from the Fede

Election Commission visited the Soviet Un

from June 5 to June 14 at the invitation of t

FEC's Soviet counterpart, the Central Electo

Commission of the USSR.

"The Federal Election Commission has co

to the Soviet Union for the purpose of facilitati

the greater understanding of the political syste

of both the U.S. and the USSR,II said FEC Cha

man Danny Lee McDonald. The invitation w

issued through Soviet Ambassador to the Uni

States, Yuri Dubinin. A delegation of Sov

electoral officials is planning to visit the U

during the Congressional elections in 1990.

The six Commissioners, accompanied by 

FEC staff members, conducted extensive me

ings with the Central Electoral Commission, 

viet Vice President Anatoliy Lukyanov, Bo

Yeltsin and other newly elected deputies to 

People's Congress, .the Presidium of the Supr~

Soviet of the Ukrainian SSR, the executive co

mittees of the Kiev Soviet, the Leningrad Sov

and a Moscow district Soviet. The Commission

also met with professors of law and politi

science. Discussions focused on nomination p

cedures, campaign financing, balloting and 

Commissions' respective roles in elections in 

two countries.

*The close of books of the last report filed,

or the date of the committee's first activity, if no

previous reports have been filed

**Committees involved in the runoff may use

the August 3 filing date as the mailing date for

their Pre-RwlOff Report.

3

continu

*.*Committees involved in the runoff and 

general elections may use the August 17 fil

date as the mailing date for their Pre-Gene

Report.
July 1989 FEDERAL ELECTION COIV1IV1ISSI01\J

"We have found that while the experiences

and frameworks within which our two countries

hold elections are different, we have many common concerns which have been advanced by our

meetings," Chairman McDonald said at the conclusion of the trip.

All costs for the trip were covered by the

Soviet hosts and by a private American organization, the International Foundation for Electoral

Systems, whose Executive Dir:ctor,. Rich.ard

Sudriett, accompanied the FEC on Its SOviet trip.

AO 1989--4:: Federal Committee's Sale of

Assets to State Committee

Senator Pete Wilson's federal campaign committee Californians for Pete Wilson, may sell its

property to the Senator's state committee, Pete

Wilson for Governor, provided that the sale is

based on an objective appraisal of the "usual and

normal charge" for the assets. The transaction

would be considered a sale-not a contribution or

a transfer. The state committee may make the

purchase with funds that are not subject to the

federal election law's limits and prohibitions. The

federal committee may also repurchase the assets

after the 1990 gubernatorial election, as long as

that purchase is also made at the "usual and

normal charge. It

The federal committee had proposed selling

computer hardware, mailing lists and used furniture to Senator Wilson's state committee, established to support his 1990 campaign for governor

of California. The assets would be sold at the

"usual and normal charge, tl as determined by an

independent evaluation of their market value.

The committee also planned to repurchase the

assets at a later date, should the gubernatorial

campaign be unsuccessful (At the time of the

request, Senator Wilson's contributions received

toward a possible 1994 Senatorial reelection campaign were approaching the $5,000 candidacy

threshold.)

The sale or commercial use of committee

assets by a principal campaign committee or

other political committee usually results in a

contribution to the committee from the purchaser. As an exception, however, the Commission has said that the sale of committee assets

does not result in a contribution when the committee has purchased or developed the assets for

its own use rather than for fundraising and when

the materials have an ascertainable market value.

If the purchase price does not exceed the usual

and normal charge for the asset, the payment is

not considered a contribution to the committee

4

Volume 15,Numbe

and is therefore not subject to the law's proh

tions or limits.

With regard to the proposed repurchase 

the assets, the Commission has usually not 

vored "lease-back" situations, in which the co

mittee sells the equity in an asset but reta

possession and pays rent for its use. Likewise, 

Commission has also not favored "repurcha

situations, in which the committee may rece

the equity value of an asset long enough to 

the funds for other purposes but retains the ri

to buy back the asset at any time. (See AO 19

14.) The proposed sale and repurchase 

distinguishable from these situations, and w

therefore be permissible, assuming the fed

committee fUlly divests itself of the owners

and use of the assets, retains no legal righ

repurchase them and does not attempt to rep

chase them until after Senator Wilson's 1990 g

ernatorial campaign.

When itemizing the sale proceeds in its 

port as "other receipts, n the federal commi

may wish to note that the funds represe~t 

purchase price paid for the assets. (Date issu

May 26, 1989; Length: 5 pages)

AO 1989-5: Refund of Contribution

Made in the Name of Another

Congressman Richard Ray and his commi

must refund to the original contributor a $1

contribution made in the name of another, 

illegal contribution, received from Joseph Edm

Hill, was actually made by the Unisys Corp

tion.

In May 1988, the committee received 

deposited the $1,000 from Joseph Edmund H

The check was drawn on Mr. Hill's personal b

account. Late!", in January 1989, the commi

learned that Mr. Hill had pleaded guilty in fed

court to four counts of making contribution

the name of another. Since 1982, Mr. Hill 

been acting as a conduit for contributions or

nating from the Sperry Corporation. and its 

cessor, Unisys. Court documents an Mr. H

case indicated that Congressman Ray was on

the recipients of Mr. Hill's contributions.

The making of contributions in the name 

another or the knowing acceptance of such eon

butions is prohibited by the Act, as is the ma

or knowing acceptance of corporate contributi

2 U.S.C. §§44lf and 441b.

Commission regulations require that con

butions that are discovered to be illegal be 

funded to the contributor. In the case o

contribution in the name of another, the recip

must return the money to the original sourc

the contribution. In Congressman Ray's case, 

money must be refunded to Unisys, the corp

tion that provided the funds to Mr. Hill. 11 C

103.3(b)(2). (Date issued: May 26, 1989; Len

3 pages)
FEDERAL ELECTION COrvlMISSION

•

July 1989

AD 1989-6: Contribution of Stock to

Congressional Candidate

Congressman Sherwood Boehlert's campaign committee may accept a contribution of sh~res. in ,a

corporation, valued at $~40.. The contrib~tlOn IS

subject to the Act's Iirnitations, and special reporting rules also apply.

If the stock has not been liquidated by the

close of the reporting period, the Committee

should report the fair market value of the shares

on the date received. Because the stock came

from an individual and is valued in excess of $200,

the committee must itemize the contribution on

Schedule A, including the contributor's name, address, occupation and employer. 11 CFR 104.13

(b)(1). The contribution should be reported as a

memo entry and should not be included in the

total-of contributions for the period.

When the stock is sold, the committee should

itemize the proceeds on the next report due. If

the purchaser of the stock is known. the committee should identify the purchaser by name, address and-if the purchase price exceeds $200-

occupation and employer. The purchase is considered a contribution from the purchaser. The

committee should also include the identification

of the original contributor. 11 CFR 104.13(b)(2).

The sale of the stock, like the original contribution should be reported on Schedule A; the

amo'unt of the sale should be included in the total

of contributions for the period. The value of the

original donation of the stock should be reported

as a memo entry and should not be included in

that period's contribution total.

If the committee sells the stock through an

established market mechanism whereby it does

not know the identity of the purchaser, then the

purchaser will not be considered to be making a

contribution to the committee. The committee,

accordingly, does not need to report th~ identification of the purchaser. The other requirements

of section l04.13(b)(2) still apply; the purchase

price should be itemized as an "Other Receipt."

Expenses incurred in connection with the sale

of the stock, such as postage, commissions . and

other fees, should be reported as operating expenditures. If such expenditures exceed $200 to

the same payee during a calendar year, they

should be itemized. 11 CPR l04.3(b)(2)(i). (Date

issued: June 1, 1989; Length: 6 pages)

5

Volume 15,Numbe

FINAL AUDrr REPORT FOR

BABBIT1' CAMPAIGN RELEASED

In May the Commission released the fi

audit report for Babbitt for President, the 1

Presidential primary campaign committee of f

mer Arizona Governor Bruce Babbitt. The B

bitt audit is the second audit of the 1988 ca

paigns to have been completed; the FEC relea

the final audit report for the Pete du Pont 

President committee in March.

The Commission is required by law to au

the campaign finances of all committees rece

ing public funds to ensure that the money 

been used only to pay for "qualified campaign 

penses," as defined in 26 U.S.C. §9032(9). See 

U.S.C. §§9008(g) and 9038. For the 1988 el

tions the Commission certified matching p

ments of individual contributions to 15 Presid

tial primary candidates. The Commission a

authorized fun financing of the two major part

nominating conventions and of the general el

tion campaigns of the two parties' Presiden

nominees. Apart from the du Pont and 

Babbitt campaigns, these committees are all 

various stages of the audit process.

Each committee's activity is reviewed 

determine its compliance with the Act, FEC re

lations and the Presidential public funding st

utes of the Internal Revenue Code. At 

conclusion of each audit, the Commission co

piles a final audit report and places it on 

public record.

In the Babbitt report, the Commission det

mined that the committee had failed to prov

adequate documentation for six expenditur~s, 

accordance with 11 CFR 9033.11. The Ins

ficiently documented disbursements total

$3 545.99. Under section 9038.2(b)(3) of the r

ul~tions the Commission may determine t

improp~rlY documented disbursements are 

qualified campaign expenses and, therefore, 

quire the committee to repay part of that amo

to the U.S. Treasury. The amount of the rep

ment-representing the portion of the unqualif

expenses defrayed with public funds-is det

mined by a formula set forth in 11 CFR 903

(b)(2)(iii). Based on that formula, the Commiss

made an initial determination on May 25, 19

that the Babbitt committee had to rep

$1,004.57 to the Treasury pursuant to 26 U.S

§9038(b)(2).

Copies of the report are available from 

FEC's Public Records Office.
July 1989 FEDERAL ELECTION C0IV1IV1ISSI01\J

1988 ANNUAL REPORT SENT TO

CONGRESS AND THE PRESIDENT

In June the FEG issued its 14th Annual Report. reviewing the agency's role in administering

the 1988 Presidential public funding program and

in monitoring compliance with federal campaign

finance laws for more than 8,000 candidates and

political committees. Copies of the Report have

been sent to the President and the two houses of

Congress.

The Report examines the major issues that

were raised during the last election through advisory opinions, compliance matters and litigation.

The controversy over the role of "soft money" in

the past election cycle is discussed, along with

dual candidacy and the political activities of

nonprofit corporations.

The full text of the Commission's 1989 legislative recommendations is included; with those

recommendations for changes in the election law,

the Commission also expressed concern for the

future viability of the Presidential Election

Campaign Fund.

In addition, the Report contains statistical

summaries of 1988 political activity, an overview

of the agency's budget and a chronology of events

for 1988.

A copy of the Report can be obtained from

the FEG's Information Services Division by calling

800/424-9530 or 202/376-3120.

FEDERAL ELEC110NS - 1988

In June the FEC sent Federal Elections 88 to

state election offices throughout the country.

The volume shows up-to-date official state results

for all 1988 federal races, Including state-bystate Presidential and Senatorial results and district-by-district Congressional results. Federal

Elections 88 is the fourth in a series of publications designed to provide an accurate and comprehensive historical record of federal election results. '

The compilation shows, for example, that

91,594,809 Americans voted in the 1988 Presidential election, a figure representing 50.15 percent

of the voting-age population. That number represents a decline of one million voters in comparison with the last Presidential election in 1984.

That year 92,652,842 voters participated in the

Presidential general election, representing 53.27

percent of the eligible voters. Of the 19 candidates appearing on Presidential ballots nationwide, George Bush received 53.37 percent

(48,886,097) of the vote; Michael S. Dukakis received 45.65 percent (41,809,074) of the total.

6

Volume 15, Numbe

Because the FEC compilation is from offi

state election sources, the counts are based 

individual states' definitions of a valid vote c

The compilation includes write-in votes, wh

reported, as well as votes for minor party ca

dates.

Federal Elections 88 can be ordered from 

National Technical Information Service, U.S. 

partment of Commerce, 5285 Port Royal Ro

Springfield, VA 22161., A limited number 

copies are also available free of charge from 

FEC's Public Records Office. Inquiries should 

addressed to Dick Thomas, Director of S

Relations.

ADVISORY PANEL CHARTER RENEWED

On May 12, 1989, the Commission appro

the biennial renewal of the Clearinghouse A

sory Panel Charter for the two years beginnin

July 1989.

Composed of state and local election o

cials from throughout the country, the Advi

Panel of the the FEC's National Clearinghous

Election Administration advises the Commis

on ways to improve the administration of e

tions. Drawing upon the expertise of its m

bers, the panel makes recommendations regard

possible topics of Clearinghouse research effo

as well as suggestions for other means of assis

election administrators in the performance 

their duties.

This year's revised charter raised the num

of panel members from 16 to 20. The mem

are nominated by the Clearinghouse Direc

Penelope Bonsall, through the Commission's S

Director; the members are appointed by the C

mission.
FEDERALELECTION COMMISSION

•

July 1989

FEC v. CITIZENS PARTY (87-CV-1577)

On May 1, 1989, the U.S. District Court for

the Northern District of New York entered a

consent order and judgment in FEC v. Citizens

Party (No. 87-CV-1577). The judgment declared

that the Citizens Party, a political committee,

and its treasurer, Kirby Edmonds, knowingly and

willfully violated the election law by failing to

file four reports in a timely manner: a 1985 yearend report and three 1986 quarterly reports

(April, July and October). The consent order and

judgment also assessed a civil penalty of $10,000

against the committee. Mr. Edmonds was personally assessed a $500 penalty.

FEC v, FURGATCH (88-6047)

On May io, 1989, the U.S. Court of Appeals

for the Ninth Circuit issued an order denying both

the FEG's petition for rehearing and its suggestion

for rehearing bane in FEC v. Furgatch. The

agency had requested the rehearing following a

March 1989 ruling from the appeals court that

vacated a permanent injunction imposed by a

district court against Mr. Furgatch and remanded

it to the lower court with instructions to limit its

duration. For a summary of that decision, see the

May 1989 Record.

FECv. NOW

On May 11, 1989, the U.S. District Court for

the District of Columbia issued a memorandum

opinion granting the defendant's motion for summary [udgrnent in FEe v. National Organization for Women (NOW). The court found that the

election law's prohibitions against corporate political expenditures did not apply to a series of

direct mailings sent as part of a NOW membership

drive because the materials did not contain express advocacy.

Background

The agency filed suit against NOW, a nonprofit corporation, in August 1987 after failing to

reach a conciliation agreement with the organization in a compliance matter generated by a 1984

complaint from the National Conservative Political Action Committee.

The FEe charged that three direct mailings

sent by NOW during the 1984 election cycle contained communications connected with several

U.S. Senate elections. The letters mentioned

several Senators who were running for reelection

in 1984, including Jesse Helms and Strom Thurmond. Although NOW had established a separate

segregated fund for political activities, the ex7

Volume 15, Number 

penditures for the mailings were made wi

money from its general treasury. The FE

charged that these expenditures constituted viol

tions of 2 U.S.C. §441b, which prohibits all co

porations from making expenditures in connecti

with federal elections.

District Court Decision

In finding that NOW's financing of the pre

aration and distribution of the letters in questi

with money from its corporate treasury did n

constitute a violation of the election law, t

court primarily addressed the issue of expre

advocacy.

Citing the Supreme Court's 1986 ruling 

FEC v. Massachusetts Citizens for Life, In

(MCFL),l the court reasoned that section 441

prohibition against expenditures made "in conne

tion with" federal elections did not broaden t

general definition of "expenditure" given in se

tion 431(9)(A)(i) of the Act, i.e., ldisbursemen

gifts and other types of payments made "for t

purpose of influencing" federal elections. T

court determined that section 441b's prohibiti

against expenditures made "in connection wit

federal elections could only be interpreted 

prohibiting expenditures made "for the purpose 

influencing" federal elections. Further citi

MCFL and other Supreme Court decisions, t

district court concluded that this interpretati

of the definition of "expenditure" required th

the communication expressly advocate the ele

tion or defeat of a eandidate. Express advocac

in the court's view, had to include "an explicit a

unambiguous reference" to a candidate, as well 

a clear exhortation to vote for or against th

candidate. Using this interpretation of expre

advocacy-based on MCFL, the appeals court ru

ing in FEe v. Furgatch,2 and other decisions-t

court found that NOW's letters did not conta

any language that expressly advocated the ele

tion or defeat of any candidate.

The court found that the central purpose 

each of the mailings was apparently to expand t

organization's membership, not to tell recipien

how to vote. While the letters named som

Senators who were candidates, they also me

tioned some who were not running for reelecti

in 1984. Moreover, Senators were named main

in the context of their opposition to causes em

braced by NOW. The letters called for a varie

of actions by the recipien ts in support of t

organization and its causes. Such actions i

eluded, for example, communieating support f

continu

1FEC v. Massachu.setts Citizens for Lif

Inc., 479 U.S. 238 (1986). See the February 19

Record for a summary.

2PEC v. Furgatch, 807 P.2d 857 (9th e

1987). See the March 1987 Record for a summar
July 1989 FEDERAL LECTION COIVIIVlISSIOI\J

the Equal Rights Amendment to the recipients'

own Senators, and making contributions to NOW.

The letters "fail[ed] to expressly tell the retI del' to

go to the polls and vote against particular candidates." Since the letters were "sugges, ive of

several plausible meanings.••NOW's letters fail the

express advocacy 'test proposed by the Nin h Circuit in Furgatch."

The district court added that, since t e actual distribution of the letters was conducted by an

outside direct mail contractor that did not~1inform

NOW of where the mailings would be sen, NOW

"clearly lacked the intent to influence" a y particular Senatorial election. I

The court decided that the NOW tailings constituted discussion of political issue, protected by the First Amendment, rather han an

attempt to influence the election or defea of any

candidates because the letters did not Icontain

express advocacy.

POLITICAL ACTIVITY AND THE WORKP~CE This article answers questions on ow the

federal campaign finance law applies to ' Iitical

activities conducted at one's place of ,usiness.

(Of course, such activity is also subject to the

rules and practices of the employer.)

Please note that government emPloytes may

be barred from participating in partisan activities, as explained later in this article. 1

Compensation

May I perform federal campaign wor on the

job7 during working hours? Maybe. As a general

rule, any compensation paid to an empl yee for

time spent on federal political activity is considered a contribution from the employe to the

political committee benefiting from the ctivity,

11 CFR 100.7(a)(3). (Exceptions to this ule are

discussed Iater.) Your activity might res It in an

illegal contribution if you are employ d by a

corporation (profit or nonprofit), labor 0 ganization, federal government contractor or foreign

national Even if your employer may legs y make

contributions, the value of the eontributid n might

exceed the law's limit.

Suppose I make up the time I end on

campaign activities-will my activity stf,'U result

in a contribution? No, not if you do so within a

reasonable time. This rule applies to e ployees

who are paid on a salaried or hourly basis and who

are expected to work a set number of hours a

week. 11 CF R 100.7(a)(3)(i).

8

Volume 15, Numb

What iC my income is not tied to the num

oC hours worked? Employees who are paid 

commission or piecework basis for work actu

performed and who are free to use their tim

they see fit may engage in campaign act

during what would otherwise be normal wo

hours without their employers making a cont

tion. 11 CFR 100.7(a)(3)(ii).

In a related advisory opinion (AD), the C

mission said a senior partner in a law firm c

conduct on-the-job political activity withou

firm making a contribution because he had 

cretionary use of his time and his compens

was not based on the amount of work he 

formed. AO 1980-107. See also AO 1979-58.

Does a contribution result if I conduct po

cal activity during compensated leave time? 

not if you use earned leave time such as bona 

vacation time. 11 CPR 100.7(a)(3)(iii).

It I take leave-without-pay to participat

federal campaign activity7 may my employer 

tinue to pay any share of my health insuranc

other Cringe benefits? No. If you work f

corporation, labor organization or federal gov

ment contractor, your employer may not pay 

share of the, cost of any fringe benefits 

receive while on leave-without-pay. You or 

committee you are helping, however, may c

the cost of continuing your fringe benefits. 

ment by any other person for such employm

benefits during your absence would result 

contribution to the committee. 11 CPR 114.1

As a candidate for federal offie~ m

continue to receive compensation from my 

ployer? Yes, as long as:

o A bona fide employment relationship e

between you and your employer that is g

inely independent of your candidacy;

o Any compensation paid to you is exclusivel

consideration of the services you perform; a

o The compensation does not exceed that w

would be paid to a similarly qualified person 

the same work. 11 CFR 110.10(b)(2); AOs 1

115, 1979-74, 1978-6 and 1977-68.

Of course, if your income is dependent on 

number of hours worked, and you spend less 

at work in order to conduct your campaign, 

employer must reduce your compensation acc

ingly in order to avoid making a contribution.

Use of Employer's Facilities

May I use my office phone to make l

distance caDs in connection with political ac

ity? As a general rule, the use of an emplo

facilities for federal political activity results 

contribution from the employer. To avoid 

you or the committee you are helping must r

burse your employer "the usual and no

charge" for the use of facilities. If you make 
FEDERAL ELECTION COMMISSION

•

•

•

July 1989

reimbursement, the payment is considered a contribution from you to the committee. 11 CFR

100.7(a)(I)(iii)(A). (Exceptions to this general rule

are explained later.)

What is the "usual and normal charge"? A

commercially reasonable rate or the current market price. 11 CFR 100.7(a)(I)(iii)(B). For example,

the reimbursable amount for a long-distance call

made on an office phone would be the actual

amount billed to the employer.

Is there any time limit for milking reimbursements for the use of faeilities? Yes, they must be

made within a commercially reasonable time after the use, or the outstanding amount could

become a contribution from the employer. 11

CFR 100.7(a)(4) and 114.9. In most instances, 30

days is considered a reasonable time for making

reimbursements. See II CFR 102.6(c)(3) and

103.3(b)(I).

Exception-Exempt Legal/Accounting Services

What is the exception for legal and accounting services? Employees may provide free legal or

accounting services to a political committee

without their employer making a contribution if

certain conditions are met:

o Only regular employees may perform the services (not outside consultants). Moreover, the

employer may not hire additional personnel to

free-up the time of regular employees.

o The donated legal or accounting services must

be conducted solely to help the committee

comply with the federal campaign finance law,

except that services may be provided to a party

committee for any purpose other than directly

furthering the election of a federal candidate.

o The recipient committee must report the value

of the services and the identification of the

employees who provided them. II CFR 100.7(b)

(13) and (14); 100.8(b)(l4) and (15); 104.3(h); and

114.I(a)(2)(vi) and (vii).

What if an employee, in providing exempt

legal or accounting services, uses the employer's

computer-wouId such use result in a contribution? No. Use of the employer's resources and

facilities is covered by the exemption, if all the

other conditions are met. AO 1980-137.

Exception-Incidental Activity

What is the exception for "incidental activity"? An employee of a cOl'\,oration or labor

organization may conduct "lneidental" volunteer

political activity at the work place without the

employer making a contribution. Activity is considered "incidental" if it does not exceed one hour

a week or four hours a month, regardless if it is

9

Volume 15, Number 

undertaken during working hours or not. II CF

114.9(a)(I) and (b)(I),

Do I bave to reimburse my employer for th

use of facilities if my activity is "incidental

Reimbursement is required only for any increa

in overhead or operating costs, unless you produ

materials in connection with a federal election. 

that case, the employer must be paid the usu

and normal charge within a com mercially reaso

able time. II CFR 114.9(a), (b) and (c),

For example, if you make a few local calls o

your office phone, reimbursement is not necessa

as long as the calls do not increase your emplo

er's phone bill. But, if you use the office phot

copier to make some copies of a committee

solicitation letter, reimbursement is required 

the commercial, per-copy rate.

I work for a partnership. Does the "incident

activity" exception apply to my political activ

ties? Yes. In AO 1979-22, the Commission sa

that the incidental activity provision would b

applicable to an employee of a partnership.

Acting as Agent of Employer

In performing on-tho-job volunteer activit

is a corporate executive officer permitted to a

employees and business associates to contribu

to a particular candidate? This activity may r

sult in a prohibited corporate contribution if it 

conducted in a manner that indicates the ind

vidual is acting in his or her official capacity. 

an enforcement case, MUR 1690, the Commissi

determined that solicitations by corporate o

ficers had violated the contribution prohibition

In reaching this decision, the Commission co

sidered certain aspects of the solicitations, i

cluding: the use of subordinates to help carry o

the activity; the use of corporate stationery; th

use of the executive's title in connection with t

activity; and the use of solicitation language th

implied corporate sponsorship. For a summary 

MUR 1690, see the September 1988 Record, p, 9

Government Employees and the Hatch Act

I work for a govemment agency. May I c0

duct on-the-job political activity? If you are 

federal employee, you are probably covered 

the Hatch Act, which bars certain partisan poli

cal activities, both on and off the Job. The Hat

Act applies to most federal employees and 

certain state and local government employee

who may also have to comply with nonfeder

laws regulating political conduct. Finally, yo

government agency may have its own rules in th

area. For more information, call the U.S. Me

Syst ems Prot eet ion Board, Office of Spec

Counsel (202/653-7143 or 800/872-9855).
July 1989 FEDERAL ELECTIOI\J COMMISSIOI\J

MULTICANDIDATE COMMITTEES

The FEC frequently recei ves questio~s about

how much a PAC or a party committre may

contribute to a federal candidate. The a~swer is

based on whether it is a multicandidate commlttee. This article answers several commonly asked

questions about multi candidate committee1'

How much can a multicandidate committee

give to a federal candidate? A mUltic1

1ndidate

committee may contribute up to $5,000 pe candidate, per election, whereas a PAC or par y committee that has not qualified as a multic~ndidate

committee may only contribute $1,000 pe~ candidate, per election. 2 U.S.C. S44Ia(a)(I)(A) and

(2)(A); II CFR 110.l(b) and 110.2(b). I'

Does multicandidate status affect an~ other

contribution limits? Yes. A multicandidafe committee may contribute $15,000 per yellr to a

national party committee, whereas a P1C that

has not qualified as a multi candidate cOTmittee

may contribute up to $20,000 per year. ~,U.S.C.

S441a(a)(l)(B) and (2)(B); 11 CPR 110.1

1

(C) and

110.2(c).

If our political committee supports m~re than

one candidate, is it automatically consi ered a

multicandidate committee? No. There .e other

requirements that must be met in orde for a

committee to "qualify" for multi candidate status.

A multicandidate committee must:

o Be registered as a political committe}' for at

least six months;

o Have received contributions for feder I elections from more than 50 persons; and

o Have made contributions to at least fIve federal candidates. f

Note: State party committees may become

multlcandidate committees without mee ing the

third criteria-making contributions to fj've candidates. 2 U.S.C. S441a(a)(4); 11 CFR 100j.5(e)(3).

Do we have to contribute a certain inimum

amount to each candidate or receive a specific

amount from each person in order to eet the

multicandidate qualifications? No. Any contribution made to a federal candidate, regar:dless of

amount contributed, will count towards the standard of five contributions. Likewise, sPy contributor to the committee, regardlessJ}f the

amount donated, counts towards the threshold of

50 contributors. I

We are a newly registered politicaliommittee, affiliated with a multicandidate co mittee.

Must we satisfy all three criteria before we can

contribute $5,000 to a federal candidate? No. A

political committee affiliated with a mu ticandidate committee automatically qualifies a a multicandidate committee. AO 1980-40.

10

Volume 15, Numb

Does that mean that each affiliated com

tee could contribute $5,000 to the same fed

candidate? No. Affiliated multlcandidate c

mittees share a common contribution limi

$5,000 per federal candidate, per election

U.S.C. S441a(a}(5); 11 CFR 1l0.3.

Can an authorized candidate committe

converted into a multicandidate committee? 

A retiring candidate can convert his or 

authorized campaign committee into a non

nee ted political committee, which may then q

ify as a multi candidate committee, onc

satisfies the three criteria stated above. 

converting authorized committee must amen

Statement of Organization to redesignate itse

a nonconnected political committee within 

days after the date of the change in status

U.S.C. S433(c); ADs 1988-41, 1985-30 and 1

86.

Is a campaign responsible for verif

whether the contributor has qUalified as a m

candidate committee? Yes. The campaign tr

urer is responsible for ensuring that the camp

does not accept excessive contributions. 2 U

S441a(f); 11 CFR 103.3(b) and 110.9(a). In sev

enforcement cases, the Commission has held 

treasurers should verify the contributor's st

See MURs (Matters Under Review) 1100 and 1

How can a campaign make sure that a co

buting committee is a multicandidate commit

Campaigns should check the multicandidate st

of contributors by calling the FEC's Public 

ords Office at 202/376-3140 or 800/424-9530.

If a committee is not on the FEC's li

multicandidate committees, does that mea

campaign should not accept a contribution 

that committee that is higher than $1,000 

election? If a committee is not on the FEC's 

a campaign should check directly with the c

mittee to ensure that it had satisfied the qua

cations for rnulticandidate status. The camp

committee should keep records noting their 

forts to verify the contributing committee's 

tus. The committee might also recommend 

the contributor inform the FEC of its multica

date status.

Are committees supposed to inform the 

when they become multicandidate committ

Yes. Once a committee has satisfied the crit

for becoming a multi candidate committee, 

treasurer should, on the next required rep

check off box #3 on Form 3X and fill in the 

on which the committee qualified.

Can a committee inform the FBC of 

multicandidate status right away, rather 

waiting until the next report? Yes, provided 

committee provides supporting documentatio
show that it has met the qualifications for multicandidate committee status. The notification and

supporting documentation should be addressed to

the Reports Analyst assigned to the committee

and sent to the Reports Analysis Division of the

FEC, 999 E Street, NW, Washington, DC 20463.

Once a committee has qualified, does it have

to requalify every year in order to retain its

status as a multicandidate committee? No. Once

a committee has met the criteria for becoming a

multicandidate committee, it remains qualified

until the committee terminates. This holds true

regardless of the committee's level of activity.

For All Committees

Computerized Format for Reporting

-Contribution Limits

Joint Fundraising

Overall Annual Limit on Contributions for

- Individuals

Public Records Fee Schedule

-Recordkeeping for All Committees

Reporting Supplement -Supplement on Contributions

State Filing Offices

_Nonelection Year Reporting

_Use of Pseudonyms

•

, .

July 1989 FEDERAL ELECTION COMMISSION Volume 15, Numbe

NAME. _

ADDRESS _

For Unauthorized Committees

_Partnerships

_Reporting Internal Communications by

Corporations, Labor Organizations and

Other Membership Organizations

Single Candidate Committees

-SSFs and Nonconnected Committees

For Authorized Candidate Committees

_After the Election: Winding Down

Concert Fundraisers

_ Deb~ Retirement by Candidate

Committees

_Disposal of Campaign Property

Transfer of Candidate Funds to Federal - Committee

ZIP--- CITY ...:STATE

REPRINTS OF RECORD ARTICLES AVAILABLE

Many of the Record's 800 Line articles have

been transformed into handouts for quick and easy

reference. These articles answer frequently

asked questions about specialized topics relating to the election law.

For convenience, handouts are grouped in the

list at the right according to their intended audience. The Commission offers the handouts free

of charge. Multiple copies are also available. To

order, indicate the number of copies requested

beside each title and send the form to the FEC,

Information Services Division, 999 E Street, NW,

Washington, DC 20463. Orders can also be made

by phone by calling 800/424-9530.

•

•

This cumulative index lists advisory opinions, court cases, MUR summaries and 800 Line

articles published in the Record during 1989. The

first number in each citation refers to the "nurnber" (month) of the Record issue; the second

number, following the colon, indicates the page

number in that issue.

OPINIONS

1987-31: Solicitable membership classes of securities exchange (reconsideration), 4:3

1988-37: Affiliated status of two corporate PACs

after leveraged buy-out, 1:6

1988-44: Effect of statute of limitations on co

mittee's debts, 2:4

1988-45: Definition of national party committ

2:4

1988-46: Corporation's solicitation of license

2:4

1988-47: Publisher's donation of free magazines 

candidate prohibited, 1:6

1988-48: Contributions to trade association PA

matched with charitable donations, 2:5

1988-49: Federal bankruptcy trustees not cons

ered government contractors, 2:5

continu

II
July 1989

r

FEDERAL ¥LECTION COMIVl/SSIOI\J Volume 15, Numb

1989-1: Payment to Congressional emplo ee for

manuscript not an honorarium, 6:4

1989-2: Committee's settlement of de, t with

corporate creditor, 6:4

1989-3: Stockholder contributions to tra e association PAC through payroll deduction, 6:,

1989-4: Federal committee's sale of a sets to

state committee, 7:4 1

1989-5: Refund of contribution made in t e name

of another, 7:4

1989-6: Contribution of stock to congrrSSional

candidate, 7:5

COURT CASES

FEC v,

-AFSCME-PQ, 1:11 J

-Batts, Committee to Elect, 5:8

-Bookrnan &. Associates, 6:8

-Braun for Congress Committee, 1: 0

-euu for Congress, 1:11 I

-Californians for a Strong Ameriea (88-

1554), 1:9; (88-6499), 1:11 1

-Citizens Party (87-CV-1577), 1:12 nd 7:7

-Dietl for Congress, 1:10 I

-Friends of Isaiah Fletcher, 6:8

-Furgatch (88-6047),5:7 and 7:7 j

-Haley Congressional Committee, 1 9

-Holmes Committee, 3:3 I

-Life Amendment PAC, 1:II

-National Organization for Women, :7

-Populist Party, 1:12 and 5:8 I

-Riehards for President (89-0254) 4:9; (88-

2832), 5:8

-Rodriguez, 1:10

-Survival Education Fund, lnc., 3:4

-Taylor Congressional Committee, :10

-Weinberg, 5:9

FEDERAL ELECTION COMMISSION

999 E Street, NW

Washington, DC 20463

Official Business

Fund for a Conservative Majority, Debtor, 3:4

Goland v, U.S. and FEC, 6:8

Michigan State Chamber of Commerce v, Au

6:9

United States v. Ooland, 6:8

v, FEC

-Common Cause (87-2224), 3:3

-Common Cause (89-0524-GAG), 4:10

-Maine Right to Life Committee, Ine., 4

- Miller, 3:3

-Stern, 3:4

-USDC, 1:9; 3:3

MURSUMMARIES

MURs 1528/1739: Party activities: prohib

funds, transfers, allocations and loans, 4:7

MUR 2175: Excessive and prohibited contr

tions accepted by 1984 Presidential campa

3:6

MUR 2262: Presidential candidate's failure 

register and report on time, (];5

MUR 2286: Membership organization's poli

activity, 6:7

MUR 2356: PAC's failure to file reports on t

4:7

MUR 2545: Excessive contributions made and 

cepted by PAC, 5:6

800 LINE

Debt retirement by candidate committees, 1:7

Designating a principal campaign committee, 

Multieandidate committees, 7:10

Political activity and the workplace, 7:8

Recordkeeping rules for all committees, 5:9

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