August 1997 

Table of Contents 

Publications 

1	 Official Results for 1996 Federal 

Elections Published 

Court Cases 

1 Clifton v. FEC


3 FEC v. DSCC (95-2881)


3 DSCC v. FEC (96-2184)


4 On Appeal?


Compliance 

4 MUR 4286


5 MUR 4259


6 MUR 3951


 Regulations 

6	 Public Hearing Produces Range of 

Comments on Proposed Rules 

Governing Expenditures by Party 

Committees 

8 Comments on Revisions to FEC 

“Member” Rules Sought 

8 Revised Best Efforts Regulations 

Go Into Effect 

8	 Advisory Opinions 

9	 Federal Register Notices 

Election Administration

 10	 “Motor Voter” Report Sent to


President and Congress


10	 Index

 11	 Conferences 

Federal Election Commission 

Publications 

Official Results for 1996 

Federal Elections Published 

The FEC has released Federal 

Elections 96, a 167-page publication 

containing the official primary, runoff and general election results for 

the 1996 Presidential and congressional elections. This is the eighth 

edition of this biennial series, and it 

is designed to provide an historical 

record of federal election results. 

For each state, the publication 

lists the names of candidates on the 

ballot, write-in candidates, party 

affiliations and the number and 

percentage of votes each candidate 

received as provided by state 

election officials. 

The publication is available for 

review at many state election 

offices. This edition is also available 

at the FEC’s web site—http:// 

www.fec.gov. For more information 

or to obtain a copy of Federal 

Elections 96, call the Public Records 

office at 1/800-424-9530 (press 3) 

or at 202/219-4140. ✦ 

Volume 23, Number 8 

Court Cases 

Clifton v. FEC 

On June 6, the U.S. Court of 

Appeals for the First Circuit declared invalid two parts of the 

FEC’s regulations that govern 

publication of voter guides and 

voting records by corporations and 

labor organizations. The court 

declared the voting record regulation at 11 CFR 114.4(c)(4) invalid 

only insofar as the FEC may purport 

to prohibit mere inquiries to candidates and the voter guide regulation 

at 11 CFR 114.4(c)(5) invalid only 

insofar as it limits contact with 

candidates to written inquiries and 

replies and imposes an equal space 

and prominence restriction. 

The plaintiffs petitioned the court 

for a rehearing in this case, but that 

petition was denied on June 27. The 

FEC filed a petition for rehearing 

and suggestion for rehearing en 

banc on July 21. 

Background 

Robin Clifton and co-plaintiff 

Maine Right to Life Committee, Inc. 

(MRLC), initiated this lawsuit in 

March 1996, asking the court to find 

that the FEC’s regulations governing the use of corporate treasury 

funds to prepare and distribute voter 

guides and voting records to the 

(continued on page 2) 
Federal Election Commission RECORD August 1997 

Court Cases 

(continued from page 1) 

public were unconstitutional. 11 

CFR 114.4(c)(4) and (5). MRLC is a 

nonprofit membership corporation 

that advocates pro-life stances, and 

Mr. Clifton is a Maine voter who 

receives the group’s publications. 

FEC regulations prohibit corporations from distributing voting 

records to the public if the materials 

expressly advocate the election or 

defeat of a clearly identified federal 

candidate. Even without such 

express advocacy, any decisions on 

content and distribution of the 

voting records may not be coordinated with a candidate or political 

party. Furthermore, in the case of 

voter guides that are prepared after 

receiving written responses from the 

candidate to questions posed by the 

corporation or labor organization, 

the regulations require that: 

• Contact with the candidate be 

limited to written questions and 

written answers; 

Federal Election Commission


999 E Street, NW


Washington, DC 20463


800/424-9530


202/219-3420


202/501-3413 (FEC Faxline)


202/219-3336 (TDD for the


hearing impaired)


800/877-8339 (FIRS)


John Warren McGarry, 

Chairman 

Joan D. Aikens, Vice Chairman 

Lee Ann Elliott, Commissioner 

Danny L. McDonald,

 Commissioner 

Scott E. Thomas, Commissioner 

John C. Surina, Staff Director 

Lawrence M. Noble, General

 Counsel 

Published by the Information 

Division


Louise D. Wides, Director


Angela Rucker, Editor


http://www.fec.gov 

• Each candidate be given the same 

prominence and space in voting 

guides; and 

• The publications not contain an 

“electioneering message.” 

The district court invalidated the 

regulations, stating that they regulate issue advocacy and, therefore, 

go beyond the Commission’s 

authority. See page 1 of the July 

1996 Record. 

The FEC contended that its 

regulations (11 CFR 114.4(c)(4) and 

(5)) enforced 2 U.S.C. §441b, which 

prohibits corporate contributions in 

connection with any federal election. According to the court, the 

FEC maintained that a “voting 

record or voter guide...that fails to 

comply with its regulations is either 

a contribution or can be banned in 

the interests of preventing prohibited contributions.” 

Appeals Court Rejects 

Commission Argument 

The appeals court found that to 

avoid First Amendment concerns, it 

would construe 2 U.S.C. §441b 

narrowly. Under this construction, 

both the Commission’s restriction 

on oral contact between MRLC and 

candidates and its insistence that 

voter guides provide equal space to 

candidates were unlawful. 

The appeals court found that the 

FEC’s requirement of equal space 

was a “content-based” restriction 

because it would affect the content 

of the MRLC’s voting guides. The 

court said that “[T]here is a strong 

First Amendment presumption 

against content-affecting government regulation of private citizen 

speech, even where the government 

does not dictate the viewpoint.” The 

court cited a case where the Supreme Court struck down Florida’s 

“right of reply” statute, which 

guaranteed political candidates 

equal space to reply to criticism 

printed in the Miami Herald.

1 

1 Miami Herald Publishing Co. v. 

Tornillo, 418 U.S. 241, 256 (1974). 

With regard to the Commission’s 

requirement that contact between 

corporations and candidates be 

limited to written communications 

when such corporations are preparing voter guides, the court said that 

the regulation treads “heavily upon 

the right of citizens, individual or 

corporate, to confer and discuss 

public matters with their legislative 

representatives or candidates for 

such office.” The court said that 

such a ban on communications 

served as a “handicap” for discourse 

between legislators—and would-be 

legislators—and those they wish to 

represent.2 

With respect to both regulations, 

the court rejected the FEC’s argument that such restrictions were 

justified to prevent illegal corporate 

contributions to candidates. While 

the court acknowledged the 

Commission’s legitimate concern 

with uncovering prohibited contributions, it said that the agency 

should be able to investigate such 

impermissible actions through its 

enforcement proceedings. 

The court did not take up 

MRLC’s challenge to the regulation 

concerning “electioneering message” and instead referred the matter 

back to the district court. MRLC’s 

challenge concerned the FEC’s 

regulations at 11 CFR 

114.4(c)(5)(ii)(D) and (E), which 

2

 In a dissenting opinion, Senior Circuit 

Judge Hugh H. Bownes wrote that the 

written-contact-only regulation does 

not infringe on the First Amendment. 

Citing Buckley v. Valeo, the judge said 

that the Supreme Court had acknowledged that some governmental interests 

outweigh the possibility of constitutional infringement. He wrote: “At this 

stage of American history, it should be 

clear to every observer that the 

disproportionate influence of big money 

is thwarting our freedom to choose 

those who govern us. This sad truth 

becomes more apparent with every 

election. If preventing this is not a 

compelling governmental interest, I do 

not know what is.” 

2 
August 1997 Federal Election Commission RECORD 

state that certain kinds of voter 

guides—those that are prepared 

after receiving written responses 

from candidates—must not include 

an “electioneering message” or 

“‘score or rate the candidates’ 

responses in such a way as to 

convey an electioneering message.” 

MRLC had argued that these 

regulations were unconstitutionally 

vague. The court concluded that it 

would not decide this matter because, at the district court level, 

there had been inadequate briefing 

as to the content, purpose and 

severability of these regulations. 

U.S. Court of Appeals for the 

First Circuit, 96-1812; U.S. District 

Court for the District of Maine, 96­

66-P-H. ✦ 

FEC v. DSCC (95-2881) 

On July 7, the U.S. District Court 

for the Northern District of Georgia, 

Atlanta Division, ordered the 

Democratic Senatorial Campaign 

Committee (DSCC) to pay a $175 

penalty for violating the Federal 

Election Campaign Act (the Act) 

during the 1992 senatorial race in 

Georgia. The sum amounts to 1 

percent of the DSCC’s violation of 

$17,500. 

The court ruled in January that 

the DSCC had violated 2 U.S.C. 

§441a(h) when it gave the $17,500 

to a senatorial candidate’s runoff 

election after having already contributed the same amount to that 

candidate during the primary and 

general elections. See page 2 of the 

March 1997 Record. 

In determining an appropriate 

penalty, the court considered these 

four factors: 

• Good or bad faith actions by the 

defendant, 

• Injury to the public resulting from 

the defendant’s conduct, 

• Ability of the defendant to pay the 

penalty and 

• Vindication of the FEC’s authority. 

The court found that the DSCC 

did act in good faith because it had 

believed that it was acting lawfully 

when it made the second $17,500 

contribution. The court also determined that the second contribution 

did no harm to the public. While the 

FEC had argued that “any violation 

of the [Act’s] limits undermines a 

public perception of integrity of the 

election process,” the court disagreed with such a blanket assertion. 

It also found that the FEC did not 

require vindication in this case and 

noted that the DSCC’s ability to pay 

did not justify assessing it with a 

large penalty, which is what the 

FEC had requested. 

In its deliberations, the court also 

considered the penalty negotiated 

with the National Republican 

Senatorial Committee in a conciliation agreement for a violation of a 

different provision of the Act—2 

U.S.C. §441d—in connection with 

the same election. That penalty 

amounted to 1 percent of the 

approximately $500,000 violation, 

or $5,000. 

U.S. District Court for the 

Northern District of Georgia, 

Atlanta Division, 95-2881. ✦ 

DSCC v. FEC (96-2184) 

On May 30, the U.S. District 

Court for the District of Columbia 

granted the Democratic Senatorial 

Campaign Committee’s (DSCC’s) 

motion for summary judgment in 

this case and ordered the FEC to 

take action, within 30 days, on the 

committee’s administrative complaint filed in 1993 against the 

National Republican Senatorial 

Committee (NRSC). The court also 

stated that if the FEC failed to take 

action within 30 days, then the 

DSCC could initiate its own lawsuit 

against the NRSC pursuant to 2 

U.S.C. §437g(a)(8)(C). 

Background 

The DSCC initially filed a 

lawsuit against the FEC after the 

agency failed to act within 120 days 

on its administrative complaint 

alleging that the NRSC had made 

illegal “soft money” expenditures to 

influence a Senate election in 

Georgia. 2 U.S.C. §437g(a)(8)(A). 

The DSCC said that the NRSC had 

funneled the money through various 

nonprofit organizations that were 

known to be closely aligned with the 

Republican Party. 

When the FEC failed to take 

action, the DSCC filed suit in court 

(DSCC I). In April 1996, the district 

court of the District of Columbia 

granted summary judgment in favor 

of the DSCC, holding that the 

FEC’s failure to act was contrary to 

law (see page 5 of the July 1996 

Record). The court reasoned that the 

FEC had not taken any meaningful 

action until almost 600 days after 

the complaint was filed. While 

admonishing the agency to take 

action expeditiously, the court did 

not set up a time table for the FEC 

to complete its investigation, 

following the tradition of deference 

that courts generally give to law 

enforcement agencies in exercising 

their prosecutorial prerogatives. The 

court warned the FEC, however, 

that, should it fail to act in a reasonable time, “the need for additional 

judicial intervention may well be 

compelling.” In a second suit, filed 

by the DSCC in November 1996 

(DSCC II), the court ordered the 

FEC to file monthly status reports 

on its progress in the investigation 

(see page 2 of the January 1997 

Record). 

Arguments from Both Sides 

After waiting an additional four 

months and nearing the five-year 

statute of limitations for this case, 

the DSCC filed this motion for 

summary judgment, citing the 

FEC’s “near glacial pace” in the 

investigation and arguing again that 

the agency’s actions were contrary 

to law. 

(continued on page 4) 

3 
Federal Election Commission RECORD August 1997 

Court Cases 

(continued from page 3) 

The FEC contended that it was 

moving forward with the investigation of the DSCC’s complaint and 

that it was “conducting a careful and 

deliberate investigation of constitutionally sensitive and factually 

complex issues arising from a 

national party’s payments to independent issue advocacy groups.” 

The FEC also argued that, without 

sufficient time to conduct a thorough investigation, its five commissioners would not be able to make 

an informed decision as to whether 

there was probable cause to believe 

that a violation of the Act had 

occurred. The FEC added that 

certain witnesses were challenging 

the Commission’s discovery requests. 

District Court Decision 

The standard for evaluating 

administrative delay is whether an 

agency has acted reasonably and in 

a manner that is not arbitrary or 

capricious.1

 To measure this, the 

courts use several criteria described 

in Rose v. FEC and Telecommunications Research & Action Center v. 

FCC. See page 5 of the July 1996 

Record for a list. 

Using those criteria, the court 

concluded that the FEC’s delay— 

taking more than four years from 

when the administrative complaint 

was filed and nearly two years from 

the Commission’s “reason to 

believe” determination to decide 

whether there was probable cause to 

believe a violation of the Act had 

occurred—was unreasonable. 

The court said that the FEC could 

no longer claim that the U.S. 

Supreme Court’s decision in Colorado Republican Federal Campaign 

Committee v. FEC complicated its 

1 Common Cause v. FEC, 489 F. Supp. 

738, 744 (D.D.C. 1980). 

investigation.2

 The court also cited 

the impending five-year mark for 

the case, and said that litigation 

delays resulting from motions to 

quash FEC subpoenas were foreseeable and provided no acceptable 

excuse for the delay. 

The court concluded that the 

FEC’s failure to investigate and 

make a “probable cause” determination in a reasonable time frame was 

contrary to law under 2 U.S.C. 

§437g(a)(8)(C). It ordered the 

Commission to conform its conduct 

with the court’s declaration within 

30 days. Subsequently, on June 20, 

the Commission appealed this 

decision to the U.S. Court of 

Appeals for the District of Columbia 

Circuit. 

U.S. District Court for the 

District of Columbia, 96-2184. ✦ 

On Appeal? 

FEC v. Christian Action Network 

The U.S. Court of Appeals for the 

Fourth Circuit denied the 

Commission’s petition for a rehearing and its suggestion for a rehearing en banc. The appeals court had 

granted a request from the Christian 

Action Network that the FEC pay its 

attorney fees in this case. See page 5 

of the May 1997 Record. 

Minnesota Citizens Concerned for 

Life v. FEC 

The U.S. Court of Appeals for the 

Eighth Circuit denied a petition 

from the FEC for a rehearing of this 

case and a suggestion for a rehearing en banc. The court had affirmed 

a lower court decision and concluded that key provisions of the 

Commission’s regulations governing qualified nonprofit corporations 

2

 In Colorado Republican Federal 

Campaign Committee v. FEC, the U.S. 

Supreme Court concluded that political 

parties are capable of making independent expenditures on behalf of their 

candidates in congressional races. 

were unconstitutional. See page 2 of 

the July 1997 Record. 

See Clifton v. FEC on page 1 and 

DSCC v. FEC (96-2184) on page 3 

for additional information on 

appeals to FEC court cases. ✦ 

Compliance 

MUR 4286 

Corporation Pays Penalty for 

Reimbursing Contributions 

by Employees 

General Cigar Co., Inc. (GCC), 

and its president, Austin T. 

McNamara, paid $80,000 to the 

FEC for violating sections of the 

Federal Election Campaign Act (the 

Act) that prohibit corporate contributions and contributions in the 

name of another. 

Mr. McNamara solicited four 

employees at GCC for contributions 

of $1,000 each to Congressman 

Newt Gingrich’s 1994 campaign. He 

later solicited four employees for 

contributions of $1,000 each to 

former Senator Bob Dole’s 1996 

presidential campaign. GCC then 

reimbursed the employees and Mr. 

McNamara, who also contributed 

$1,000 to each of those campaigns 

and an additional $1,000 in 1995 to 

the Committee for Sam Gibbons. 

The reimbursements, to which Mr. 

McNamara consented, totaled 

$11,000. 

The Act prohibits corporations 

from making contributions or 

expenditures in connection with a 

federal election. 2 U.S.C. §441b(a). 

This section of the law also prohibits any corporate officer from 

consenting to such a contribution or 

expenditure. Section 441f of the Act 

makes it unlawful to make a contribution in the name of another. Such 

a violation may occur if a person 

gives funds to a straw donor with 

the mutual understanding that the 

4 
August 1997 Federal Election Commission RECORD 

person will pass the funds on to a 

federal candidate in his or her own 

name. 

Each of the committees involved 

refunded the contributions to the 

respective contributors. 

In addition to paying the civil 

penalty, GCC and Mr. McNamara 

had to provide the FEC with evidence that all of the contributions 

that were refunded were either 

disgorged to the U.S. Treasury or 

reimbursed to GCC. 

This MUR, or Matter Under 

Review, was initiated after the FEC 

received a complaint from a former 

GCC employee. After a review of 

the complaint, but prior to making a 

finding of probable cause that a 

violation occurred, the Commission 

entered into a conciliation agreement with GCC and Mr. 

McNamara. ✦ 

MUR 4259 

NJ Committees Run Afoul of 

Allocation, Fundraising Rules 

Two New Jersey political committees and Senator Frank 

Lautenberg’s authorized committee 

have admitted violating the Federal 

Election Campaign Act (the Act) 

and Commission regulations dealing 

with allocation and joint fundraising 

during the 1994 election cycle. The 

committees cited were the Mercer 

County Democratic Committee 

(MCDC), a local party committee 

that got involved in 1994’s federal 

elections, the Lautenberg Committee and New Jersey Committee ‘94, 

a joint fundraising committee 

established by the MCDC and the 

Lautenberg Committee. 

Allocation 

Commission regulations at 11 

CFR 106.5(a)(1) state that party 

committees that have established 

federal and nonfederal accounts 

must allocate certain expenses— 

including administrative and generic 

voter drive costs—between those 

two accounts based on prescribed 

formulas. The ballot composition 

method is normally used by state 

and local party committees in 

calculating administrative and 

generic voter drive expenses. The 

formula is calculated according to 

the ratio of federal offices to all 

offices (federal and state) that will 

appear on the ballot during the next 

general election. The formula uses a 

simple point system for each office. 

The allocation is normally calculated for a two-year election cycle. 

In five states, however—including 

New Jersey1

—the formula is not 

calculated on a two-year cycle 

because, in these states, nonfederal 

elections are not held in the same 

year that federal elections take 

place. Instead, nonfederal elections 

occur in odd-number years. 

Consequently, New Jersey (and 

the four other states) must calculate 

separate ratios for allocating generic 

voter drive expenses, one for the 

year in which federal elections take 

place and another for the year in 

which nonfederal elections are held. 

11 CFR 106.5(d)(2). 

During the 1994 election cycle, 

the MCDC filed a Schedule H1 with 

the FEC claiming an allocation ratio 

of 29 percent for federal expenses 

and 71 percent for nonfederal 

expenses with respect to $190,000 

in administrative costs and generic 

voter drive activities. In devising the 

ratio, the MCDC claimed points for 

New Jersey state-wide elections that 

occurred in 1993. While this ratio 

was correct for calculating administrative costs for the two-year cycle, 

the costs for voter drives in 1994 

could not be calculated with that 

same allocation formula. Instead, 

because it conducted state-wide 

activities on behalf of the New 

Jersey Democratic State Committee 

in 1994, the MCDC should have 

used the state’s ballot composition 

for 1994 alone. Applying the correct 

1

 The other states that fall under this 

exception are Kentucky, Louisiana, 

Mississippi and Virginia. 

formula in this particular case would 

have resulted in a 50-50 split 

between federal and nonfederal 

activities.2

 11 CFR 106.5(d)(1)(ii) 

and (d)(2). 

Joint Fundraising 

Joint fundraising rules at 11 CFR 

102.17 require that all participants 

create or select a political committee 

to act as the fundraising representative and sign written agreements 

stating such. Any federal candidate 

participating in such a joint 

fundraising endeavor must file a 

Statement of Organization with the 

Commission disclosing this relationship. The participants must also 

agree to an allocation formula for 

the proceeds, and they must allocate 

the expenses based on their respective share of the contributions 

received. The fundraising committee 

must establish a separate account for 

joint fundraising receipts and 

disbursements. 

In a series of payments from the 

NJ Committee, the MCDC received 

$128,000 and the Lautenberg 

Committee received $65,160. A 

portion of these payments included 

prohibited, nonfederal funds— 

$7,100 for the MCDC and $20,895 

for the Lautenberg Committee. 

Further, the NJ Committee failed 

to include the proper notices to 

contributors, explaining that they 

were free to designate their contributions as they wished, notwithstanding the suggested allocation 

formula included in the fundraising 

letter. 11 CFR 102.17(c)(2)(i). The 

NJ Committee also failed to report 

the amount of contributions it 

received from prohibited federal 

sources as memo entries on its 

disclosure forms to the FEC. 11 

CFR 102.17(c)(8)(i)(A). 

(continued on page 6) 

2

 Under the formula, the committee 

could take two points for nonfederal 

activity: one point if any partisan local 

candidate was expected on the ballot 

and an extra nonfederal point awarded 

to all state and local party committees. 

5 
Federal Election Commission RECORD August 1997 

Compliance 

(continued from page 5) 

The three committees violated 2 

U.S.C. §434(a) by failing to accurately report receipts and disbursements. 

The Lautenberg Committee also 

failed to file an amended statement 

of organization stating that the NJ 

Committee was an authorized 

committee acting as a joint 

fundraising representative, a violation of 2 U.S.C. §433(c). 

Remedies 

The MCDC paid a $9,500 civil 

penalty to the FEC for allocation 

errors between its federal and 

nonfederal accounts and for accepting impermissible corporate and 

labor contributions and excessive 

contributions in its federal accounts. 

11 CFR 106.5(d) and 102.5(a) and 2 

U.S.C. §§441a(f) and 441b. The 

Lautenberg Committee also agreed 

to pay $20,895 to the FEC to make 

up for the same amount of 

nonfederal funds that was transferred to it from the NJ Committee. 

2 U.S.C. §§441a(f) and 441b. 

In addition to the civil penalty 

and remedial payment, the committees were required to amend their 

disclosure reports. 

This MUR, or Matter Under 

Review, was initiated by the FEC 

after it received a complaint from 

the chairman of the Mercer County 

Republican Committee. After a 

review of the complaint, but prior to 

finding probable cause to believe 

that the committees had violated the 

law, the Commission entered into a 

conciliation agreement with them. ✦ 

MUR 3951 

Federally Impermissible 

Loan, Reporting Violations 

Net Penalty for Harrison 

Edward Carl Harrison, a political 

committee that supported his bid for 

federal office and the business he 

owns, E.C. Harrison Properties, Inc., 

have paid a $20,000 civil penalty to 

the FEC for violations of the Federal 

Election Campaign Act (the Act). 

The prohibited actions included a 

corporate contribution in the form of 

a loan and failure to report other 

loans on time. 

During the 1994 congressional 

election cycle, Mr. Harrison, acting 

as an officer and director of E.C. 

Harrison Properties, executed a 

$50,000 loan to himself. Under the 

Act, it is impermissible for corporations to make contributions in 

connection with any federal election. 2 U.S.C. §441b(a). After 

receiving the loan from his company, Mr. Harrison made two loans 

of $56,590 and $50,000 to his 

political committee, the Ed Harrison 

for Congress Campaign, which 

changed its name to Friends of Ed 

Harrison. 

E.C. Harrison Properties violated 

2 U.S.C. §441b(a) when it made the 

$50,000 loan to Mr. Harrison at a 

time when, as a declared and 

registered candidate for Congress, 

he was acting as an agent of his 

campaign. 2 U.S.C. §432(e)(2). Mr. 

Harrison violated the same statute 

when, acting in his capacity as 

officer and director of E.C. Harrison 

Properties, he approved the loan and 

when, acting in his capacity as agent 

of the campaign, he received it. The 

political committee also violated 

§441b(a) when its agent, Mr. 

Harrison, accepted the loan. 

Additionally, the political committee used the address and telephone number of E.C. Harrison 

Properties in its initial political 

mailings, again violating the Act’s 

broad prohibition against corporate 

support of federal candidates. Mr. 

Harrison notified the Commission 

about this prior to any action by the 

Commission. 

The political committee also 

failed to report additional loans 

from Mr. Harrison in a timely 

fashion on its 1993 Mid-Year and 

Year-End reports and its 1994 PrePrimary report, in violation of 2 

U.S.C. §434(b). After being notified 

by the Commission, the committee 

filed amendments to correct the 

errors. 

This MUR, or Matter Under 

Review, was initiated after the 

Commission received a complaint 

from Kenneth H. Molberg. After a 

review of the complaint and other 

pertinent facts, the Commission 

entered into a conciliation agreement with Mr. Harrison and the 

other respondents. ✦ 

Regulations 

Public Hearing Produces 

Range of Comments on 

Proposed Rules Governing 

Expenditures by Party 

Committees 

FEC Commissioners, seeking to 

craft new regulations regarding 

expenditures by party committees, 

received suggestions and comments 

at a recent public hearing that 

ranged from simply tweaking its 

existing regulations to making 

wholesale changes in the way 

political committees can make 

expenditures. 

Background 

Attorneys from national party 

committees and special interest 

groups delivered their divergent 

views during a June 18 public 

hearing that came about in response 

to the U.S. Supreme Court’s ruling 

in Colorado Republican Federal 

Campaign Committee v. FEC.

1

 In 

that case, the court concluded that 

coordinated party expenditure limits 

at 2 U.S.C. §441a(d) could not be 

applied to expenditures by a party 

committee that were made independently of the congressional candi1 Colorado Republican Federal Campaign Committee v. FEC, 116 S.Ct. 

2309 (1996). 

6 
August 1997 Federal Election Commission RECORD 

date being supported. This ruling 

opened the door for national party 

committees to make independent 

expenditures on behalf of candidates 

in congressional races. Prior to the 

ruling, it was presumed that such 

committees could not make independent expenditures on behalf of 

their candidates because of the 

close, on-going contact party 

committees generally have with 

candidates. 

Subsequently, the Democratic 

Senatorial Campaign Committee 

(DSCC) and the Democratic Congressional Campaign Committee 

(DCCC) requested a rulemaking 

from the FEC to clarify its regulations in light of the Colorado ruling. 

See page 1 of the June 1997 Record 

for a discussion of the Notice of 

Proposed Rulemaking. 

Testimony 

Democrats. Attorneys for the 

DSCC and the Democratic National 

Committee (DNC) advocated 

disallowing party committees from 

making virtually any independent 

expenditures on behalf of their 

candidates once they have made 

coordinated expenditures for those 

same candidates. Coordination, they 

contended, occurs when there is any 

understanding or arrangement 

between the person making the 

expenditure and the candidate. 

Coordinated expenditures by one 

national party committee should 

also negate any independent expenditures by other national and state 

committees, the DNC’s Joseph E. 

Sandler said. Party committees 

inherently coordinate with their 

candidates, and independent expenditures exist only in the rarest of 

cases, he said. 

Robert F. Bauer, who represented 

the DSCC and the DCCC, said that 

if the Commission elects to allow 

party committees to make unlimited 

independent expenditures by 

creating a unit that would ostensibly 

operate independently of the rest of 

the party—and the candidates being 

supported—then it should define 

exactly how this would work. 

The DNC also said that independent expenditures by party committees on behalf of Presidential 

nominees should be banned, essentially because of the traditionally 

close contact between the two. The 

party also told the Commission to 

leave alone the definition of contribution as it pertains to political 

committees. 

Republicans. Republican committees had a different take on the 

Colorado decision and on how the 

FEC should craft its revised rules. 

Thomas J. Josefiak, an attorney 

with the Republican National 

Committee (RNC), said the Supreme Court, in its ruling, found that 

it was the constitutional right of 

party committees to make unlimited 

independent expenditures so long as 

they were truly independent of 

candidates. Unlike the Democrats’ 

position, this independence would 

not hinge on previous coordinated 

expenditures made by the party on 

behalf of the candidate. 

Bobby R. Burchfield, who 

represented the National Republican 

Senatorial Committee, said that 

viewing any contact between the 

candidate and party committee as 

coordination was too broad a 

definition for coordination and 

would likely run counter to the First 

Amendment’s guarantees of freedom of speech and association. 

Rather, Mr. Burchfield suggested, 

coordination should be viewed as a 

“meeting of the minds” between a 

candidate and political committee. 

The Republicans also made an 

appeal to the Commission to make 

any regulations that it adopts simple 

to understand and carry out. One 

example: require that, in order to 

make independent expenditures, 

party committees must use the 

party’s speech—not a regurgitated 

communication from a candidate’s 

committee. 

In contrast to the Democrats, the 

RNC opposed regulations that 

would automatically ban independent expenditures on behalf of 

Presidential candidates. Further, 

they did not have a problem with 

state committees making independent expenditures while national 

committees did the same. However, 

the RNC did tell the Commission 

not to change the definition of 

contribution. 

Interest Groups. Donald Simon, 

Executive Vice President and 

General Counsel for Common 

Cause, advised the FEC to proceed 

with caution as it modifies the rules 

governing party committee expenditures. The revised regulations must 

balance a party committee’s right to 

make independent expenditures with 

the fact that party independence 

rarely occurs, he said. Common 

Cause suggested that independent 

expenditures by political parties on 

behalf of congressional candidates 

should be subject to a “rebuttable 

presumption” that the expenditures 

are coordinated. And, similar to the 

Democrats’ proposals, Common 

Cause urged that party committees 

be prohibited from making both 

coordinated and independent 

expenditures. 

Representing one nonprofit’s 

view of the proposed regulations, 

James Bopp, Jr., of the National 

Right to Life Committee, Inc., 

denounced the entire NPRM and 

charged the FEC with trying to 

regulate issue advocacy. He said 

that the proposals take too broad a 

view of coordination and fail to 

provide any clear guidance to 

nonprofit corporations that plan to 

make independent expenditures. 

Public hearing speakers also 

commented at length on other 

aspects of the NPRM, including 

who constitutes an “agent” and the 

applicability of express advocacy.

 In addition to those who spoke at 

the public hearing, the FEC received 

written comments from the Internal 

Revenue Service, the U.S. Chamber 

of Commerce and the National 

(continued on page 8) 

7 
Federal Election Commission RECORD August 1997 

Regulations 

(continued from page 7) 

Republican Congressional Committee (the DCCC’s and DSCC’s 

comments were combined). 

To review written comments 

from all who responded, call the 

FEC’s Public Records office at 1/ 

800-424-9530 (press 3) or 202/219­

4140. To review the FEC’s NPRM, 

see the May 5 Federal Register (62 

FR 24367) or request the document 

from the FEC’s Faxline at 202/512­

3414 (request document 228). ✦ 

Comments on Revisions to 

FEC “Member” Rules Sought 

On July 23, the Commission 

approved for public comment an 

Advance Notice of Proposed 

Rulemaking to determine whether 

revisions are needed to its regulations defining who is a “member” of 

a membership association. Members 

can be solicited by an organization’s 

separate segregated fund (SSF) and 

can also receive partisan communications from the organization. The 

action is in response to a petition for 

rulemaking filed by James Bopp, Jr., 

on behalf of the National Right to 

Life Committee, Inc. 

The Commission is seeking 

comments in light of the decision of 

the U.S. Court of Appeals for the 

District of Columbia Circuit in 

Chamber of Commerce of the 

United States v. FEC (see page 2 of 

the January 1996 Record). The 

Commission is not proposing 

specific amendments to the rules at 

this time, but is attempting to obtain 

general guidance on the factors to be 

considered in determining who is a 

member of a membership association. 

After reviewing the comments 

received in response to the ANPRM, 

the Commission will decide whether 

to propose specific language for this 

purpose. 

Copies of the notice are available 

from the Public Records Office at 

800/424-9530 (press 3) and through 

the FEC’s Faxline service at 202/ 

501-3414 (request document 232). 

Public comments in response to 

the notice are due by September 2 

and must be submitted in writing to 

Susan E. Propper, Assistant General 

Counsel, at 999 E St., NW, Washington, DC 20463. Comments may 

be faxed to 202/219-3923, with 

printed copy follow-up. Comments 

may also be e-mailed using this 

Internet address— 

members@fec.gov. Electronic 

submissions should include the 

commenter’s full name, electronic 

mail address and postal mail address. See the ANPRM for more 

information. ✦ 

Revised Best Efforts 

Regulations Go Into Effect 

Revised “best efforts” rules 

became effective July 2. The 

regulations set up procedures to 

ensure that political committees use 

their best efforts to obtain and report 

required contributor information. 

The affected regulations are 11 

CFR 104.7(b)(1) and (b)(3). See 

page 6 of the June 1997 Record for 

a summary of the revised regulations and two examples of acceptable wording that may be included 

in solicitations. ✦ 

Advisory

Opinions 

AO 1997-6 

Reinvesting Investment 

Income 

Kay Bailey Hutchinson for 

Senate may directly reinvest money 

earned from its investment accounts—money-market funds and 

U.S. government securities maintained with a securities investment 

firm. The committee need not 

physically deposit the investment 

income into its campaign depository 

before reinvesting it in the investment accounts. 

The Federal Election Campaign 

Act (the Act) requires that each 

political committee designate at 

least one bank as the depository for 

its campaign funds.1 All receipts 

received by the committee must be 

deposited in checking accounts 

maintained at the depository. 2 

U.S.C. §432(h)(1) and 11 CFR 

103.2. With the exception of petty 

cash, all committee disbursements 

must be made from those checking 

accounts. 11 CFR 103.3(a). Commission regulations go on to state 

that political committees are permitted to transfer campaign funds for 

investment purposes to other 

accounts, but such funds must be 

returned to the campaign depository 

account before they are used for 

expenditures. 

In AO 1980-39, the Commission 

concluded that transfers of funds out 

of a campaign depository for 

investment purposes are not considered to be expenditures by a political committee. Instead, they are a 

conversion of one form of cash on 

hand to another. It follows that 

reinvesting funds earned from 

committee investments also would 

not be considered an expenditure by 

a political committee. Consequently, 

the funds would not have to be 

transferred back to the campaign 

depository before their reinvestment. 

Funds in the committee’s investment accounts must, however, be 

disclosed, and they must be transferred to a campaign depository 

account before they can be disbursed for operating expenditures or 

for other noninvestment purposes. 

Date Issued: June, 20, 1997; 

Length: 3 pages. ✦ 

1

 An acceptable depository includes 

federally chartered institutions or 

banks where accounts are insured by 

the FDIC, FSLIC or the National 

Credit Union Administration. 

8 
August 1997 Federal Election Commission RECORD 

AO 1997-7 

Status of State Party as State 

Committee of Political Party 

The Virginia Reform Party, also 

known as The Virginia Independent 

Party, constitutes a state committee 

of a political party because it 

satisfies the definition and requirements set out in the Federal Election 

Campaign Act (the Act) and in the 

Commission’s regulations and 

advisory opinions. 

The Act defines a state committee 

as “the organization which, by 

virtue of the bylaws of a political 

party, is responsible for the day-today operation of such political party 

at the State level, as determined by 

the Commission.” 2 U.S.C. 

§431(15). The definition of a state 

committee also requires the existence of a political party. A political 

party is “an association, committee, 

or organization which nominates a 

candidate for election to any Federal 

office whose name appears on the 

election ballot as the candidate of 

such association, committee, or 

organization.” 2 U.S.C. §431(16). 

In AO 1992-30, the Commission 

identified two requirements necessary for state political committee 

status. The first is that the organization must have a state affiliate 

agreement that “delineates activities 

commensurate with the day-to-day 

operation” of a party at a state level. 

Second, the state affiliate must gain 

ballot access for its Presidential and 

other federal candidates. See also 

AOs 1997-3, 1996-51, 1996-43, 

1996-27 and 1995-49. Additionally, 

in AOs 1996-51 and 1996-43, the 

Commission granted state committee status to organizations that were 

affiliated with national political 

parties that had not yet achieved 

national committee status. These 

state organizations were able to 

qualify as state committees based on 

their by-laws, which detailed 

activities commensurate with the 

operations of a party on the state 

level, and the placement of at least 

one of the party’s congressional 

candidates on the state’s ballot. 

Such candidates, the Commission 

noted, must qualify as candidates 

under 2 U.S.C. §431(2). 

The Virginia Reform Party meets 

both requirements for political 

committee status on the state level. 

First, the party’s by-laws set out a 

comprehensive organizational 

structure including a state central 

committee consisting of party 

officers and members from each 

congressional district and state and 

local conventions to nominate 

candidates. Such actions are consistent with activities that are commensurate with the day-to-day 

operations of a political party on the 

state level. Second, all three of the 

Virginia party’s congressional 

candidates who appeared on the 

state’s November 1996 ballot filed 

statements of candidacy with the 

FEC and had registered principal 

campaign committees filing disclosure reports. Two of those candidates had sufficient financial 

activity to qualify as candidates 

under 2 U.S.C. §431(2), thus 

meeting the Commission’s second 

requirement of securing ballot 

access. 

Although the Virginia party’s 

three congressional candidates were 

not listed on state ballots as candidates of any particular party, they 

still meet the Commission’s requirements. The Act’s definition of 

political party refers to the appearance of the candidate’s name on the 

ballot as the candidate of the 

particular party. In Virginia, congressional candidates and parties are 

not listed in such pairings on the 

ballot. Nonetheless, lists of candidates issued by the Virginia State 

Board of Elections and the FEC 

during 1996 do indeed denote that 

the candidates were running as 

candidates of the party. 

Date Issued: June 27, 1997; 

Length: 4 pages. ✦ 

Federal Register

 Federal Register notices are 

available from the FEC’s Public 

Records Office. 

Notice 1997-11 

Recordkeeping and Reporting by 

Political Committees: Best 

Efforts; Final Rule and 

Announcement of Effective Date 

(62 FR 35670, July 2, 1997) 

Advisory Opinion Requests 

Advisory opinion requests are 

available for review and comment in 

the Public Records Office. 

AOR 1997-10 

Transfers between campaign 

committees of different election 

cycles (Hoke for Congress Committee, June 14, 1997; 3 pages plus 16­

page attachment) 

AOR 1997-11 

Use of campaign funds for Spanish 

immersion program (Congresswoman Lucille Roybal-Allard, June 

19, 1997; 1 page plus 24-page 

attachment) 

AOR 1997-12 

Use of campaign funds to pay legal 

expenses of candidate (Congressman Jerry Costello, June 24, 1997; 6 

pages plus 50-page attachment) 

AOR 1997-13 

Relationship of limited liability 

company nonconnected PAC to 

parent corporations’ separate 

segregated funds (United Space 

Alliance Political Action Committee, July 8, 1997; 5 pages plus 9­

page attachment) 

AOR 1997-14 

Use of corporate contributions for 

construction costs or purchase of 

new party headquarters (Mississippi 

Republican Party, July 9, 1997; 2 

pages) ✦ 

9 
Federal Election Commission RECORD August 1997 

Election 

Administration 

“Motor Voter” Report Sent 

to President and Congress 

On June 30, the FEC transmitted 

to the President and Congress its 

second status report on the implementation of the National Voter 

Registration Act (NVRA), better 

known as the “Motor Voter” law. 

In it, the FEC’s Office of Election Administration reported that, 

while the number of people registering to vote in the nation surged by 

more than 9 million from 1992 to 

1996, the number of people who 

actually went to the polls last 

November declined by 5 percent. 

Just 49 percent of registered voters 

went to the polls during the last 

presidential election. 

The report covers election data 

from 44 states and the District of 

Columbia. Idaho, Minnesota, 

Wisconsin, North Dakota, New 

Hampshire and Wyoming are 

exempt from the provisions of the 

NVRA, and Vermont has not yet 

fully implemented the law. 

The report found that there were 

nearly 143 million people registered 

to vote in the United States in 1996, 

or 72.8 percent of the voting-age 

population. The increase in the 

number of registered voters between 

1992 and 1996 was 1.8 percent. 

The report also found that the 

most popular place for people to 

register to vote in 1995 and 1996 

was at their local motor vehicle 

offices, with 33.1 percent of voter 

registration applications being filled 

out in DMV offices. Post card 

registrations accounted for 29.7 

percent of new registrants, and 

registrars’ offices and voter registration drives accounted for 26.1 

percent of those registering to vote. 

Other agencies mandated by the 

NVRA to provide voter registration 

services—for example, public 

assistance agencies, disability 

service agencies and armed forces 

recruitment offices—accounted for 

11 percent of voter registration 

applications. 

The report, entitled “The Impact 

of the National Voter Registration 

Act of 1993 on the Administration 

of Elections for Federal Office, 

1994-1996,” contains an analysis of 

the impact of the NVRA and 

detailed information provided by 

states that have implemented the 

law. It also lists several recommendations to improve how the NVRA 

is implemented in the states. The 

full report is available from the 

FEC’s Information Division and the 

Office of Election Administration 

by calling 1/800-424-9530. Also 

look for an executive summary of 

the report (with supporting data) at 

the FEC’s web site—http:// 

www.fec.gov. ✦ 

Index 

The first number in each citation 

refers to the “number” (month) of 

the 1997 Record issue in which the 

article appeared. The second 

number, following the colon, 

indicates the page number in that 

issue. For example, “1:4” means 

that the article is in the January 

issue on page 4. 

Advisory Opinions 

1996-35: Status of Green Party as 

national committee, 1:10 

1996-42: SSF disaffiliation following corporate spin off, 1:11 

1996-45: Use of campaign funds, 

1:12 

1996-46: Continuation of exemption 

from select FECA reporting 

provisions, 4:7 

1996-48: Application of “news 

story” exemption, 2:5 

1996-49: Affiliation between PAC 

of joint venture partnership and 

SSF of corporate partner, 3:7 

1996-50: Disaffiliation of SSFs, 3:9 

1996-51: Qualification as state 

committee of political party, 3: 9 

1996-52: Resolicitation of excess 

campaign funds for nonfederal 

campaign, 3:10 

1997-1: Use of excess campaign 

funds to establish foundation, 5:8 

1997-2: Use of campaign funds for 

congressional retreat fees, travel, 

5:8 

1997-3: Qualification as state 

committee of political party, 6:11 

1997-4: Application of contribution 

limit to limited liability company, 

6:12 

1997-5: Qualification of lessee of 

trading “seat” on Exchange as 

member, 7:6 

1997-6: Reinvestment by political 

committee of investment income, 

8:8 

1997-7: Status as state committee of 

political party, 8:9 

Court Cases 

FEC v. _____ 

– California Democratic Party, 7:5 

– Charles Woods for U.S. Senate, 

4:6 

– Christian Action Network, 1:5; 

5:5; 8:4 

– Christian Coalition, 7:2 

– DSCC (95-2881), 3:2; 8:3 

– Fund For a Conservative Majority, 

1:5 

– Kalogianis, 5:3 

– Legi-Tech, 7:4 

– McCallum, 2:4 

– Orton, 6:6 

– Parisi, 1:4 

– Public Citizen, 4:6 

– Williams, 2:3; 7:5 

_____ v. FEC 

– Akins, 2:1; 7:5 

– Bush-Quayle ‘92 Primary Committee, 3:5 

– Clark, 5:1 

– Clifton, 8:1 

– Common Cause (96-5160), 5:4 

– DCCC (96-0764), 1:4 

– DNC (96-2506), 1:5; 5:5 

– DNC (97-676), 6:7 

– DSCC (96-2184), 1:2; 8:3 

– Gottlieb, 7:5 

10 
August 1997 Federal Election Commission RECORD 

– Hagelin, 6:7 

– Hooker, 1:5 

– Jones, 6:7 

– Minnesota Citizens Concerned for 

Life, 7:2; 8:4 

– NRCC (96-2295), 1:2 

– Reilly, 1:4 

– Right to Life of Dutchess Co., 

Inc., 6:8 

– RNC (94-5248), 2:5 

Reports 

Electronic Filing, 2:1; 5:9; 7:10 

July Reporting Reminder, 7:1 

Schedule for 1997, 1:6 

Special Election, New Mexico, 4:3 

Special Election, Texas, 3:6; 4:3 

800 Line 

Amended reports, 4:2 

Debt settlement and committee 

termination, 1:8 

FEC Sets Conference Schedule 

The FEC has set dates for three 

regional conferences, and tentative 

dates for four others for 1997 and 

1998.To register for any of the 

three scheduled conferences, call 

Sylvester Management at 1/800­

246-7277 or send an e-mail 

message to 

TSYLVESTER@WORLDNET.ATT.NET. 

Seattle 

Date: September 24-26, 1997 

Location: Cavanaugh’s Inn 

Registration: $175 

Hotel rate: $134 

Candidates, political parties, 

corporate and labor organizations 

Atlanta 

Date: October 15-17, 1997 

Location: Sheraton Colony Square 

Registration: $180 

Hotel rate: $149 

Candidates, political parties, 

corporate and labor organizations 

Washington, DC 

Date: November 6-7, 1997 

Location: Madison Hotel 

Registration: $180.50 

Hotel rate: $124 

Corporate and labor organizations 

Read future issues of the Record 

to get more scheduling information 

for these conferences: 

Washington, DC 

December 1997 

Trade and membership associations 

Washington, DC 

February 1998 

Candidate committees 

Denver 

March 1998 

Candidates, political parties, 

corporate and labor organizations 

Washington, DC 

April 1998 

Nonconnected committees 

11 
Federal Election Commission RECORD August 1997 

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