•

Volume 7, Number 4

THE FEDERAL ELECTION

COMMISSION

1325 KStreet N.W., Washington, D.C. 20463

April 19

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• "

SPECIAL ELECTIONS IN MARYLAND

Maryland will hold special elections in its Fifth Congres·

sional District to fill the seat formerly held by Congresswoman Gladys Spellman. The primary election isscheduled

for April 7, 1981, and the general election for May 19,

1981. The principal campaign committees of candidates

running in these elections must file the appropriate pre- and

post-election reports in addition to their semiannual reports. All other political committees which support candidates in these elections (and which do not report on a

monthly basis) must also follow this reporting schedule.

The FEC will send notices on reporting requirements and

filing dates to all individuals on the ballot in these elections.

All other committees supporting candidates in the Maryland special elections should contact the Commission for

more information on required reports. Call 202/523-4068

or toll-free 800/424-9530.

CORRECTION:

SPECIAL ELECTION REPORTS

The January and March editions of the Record

incorrectly stated that authorized committees of

candidates running in special elections in 1981

must file quarterly reports, as well as pre-primary,

pre-general election and post-general election reports.

The correct reporting schedule for all political committees active in 1981 special elections is as follows:

both authorized and nonauthorized committees must

file a pre-primary report, pre- and post-general

election reports, as appropriate, and semiannual

reports. Questions and requests for forms should be

addressed to the Office of Public Communications,

Federal Election Commission, 1325 K Street, N.W.,

Washington, D. C. 20463; or call 202/ 523·4068 or

toll free 800/424-9530.

SPENDING LIMITS FOR

PARTY COMMITTEES IN

SPECIAL GENERAL ELECTIONS

National and state party committees may make limit

coordinated expenditures on behalf of their candidates 

special general elections. 2 U.S.C. §441aldl. In 1981, 

national committee may make expenditures of up 

$16,710 on behalf of each candidate it supports in 

special election for the U. S. House of Representativ

In addition, for these special elections, the state pa

committee, together with its subordinate party committ

(e.q., county, district and local), may make coordina

party expenditures on behalf of their candidate. In 19

these expenditures are subject to a single limit of $16,7

per candidate.

Special coordinated party expenditures count neither 

contributions to the candidate nor as expenditures by 

candidate or the candidate's authorized committees. T

expenditu res must, however. be reported by the pa

committee on Schedule F, FEC Form 3X. The FEC w

send informational notices to party committees in th

states holding special elections. For further informati

contact the Commission at 202/523-4068 or toll-f

800/424-9530.

SEMIANNUAL REPORTING REMINDER

Committees that filed on a quarterly basis during 

1980 election year are required to file only two semiann

reports during 1981. The first report, covering financ

activity from January 1 through June 30, 1981, must 

filed by July 31, 1981. The second report, covering activ

from July 1 through December 31, '981, must be filed 

January 31, 1982. No quarterly report is required in Ap

See Commission Regulations at 11 CFR 104.5(a)(2)(i).

FREQUENT REPORTING ERRORS

In reviewing reports filed with the Commission, 

FEC's Reports Analysis Division has identified a number 

reporting errors frequently made by political committe

The list below identifies several common errors and th

explains the correct reporting procedure.

continu
ADVISORY OPINION REQUESTS

Advisory Opinion Requests (AOR's) pose questions 

the application of the Act or Commission Regulations 

specific factual situations described in the AOR. The f

lowing chart lists recent AOR's with a brief description 

the subject matter, the date the requests were made pub

and the number of pages of each request. The fu II text 

each AOR is available to the public in the Commissio

Office of Public Records.

1. Failure to Report Multicandidate Committee Status

When a registered political committee (not authorlzed :

by a candidate) qualifies as a "multicandidats committee," it should report its new status, including the date

it qualified, on Line 3 of its next regularly scheduled

report (Form 3X). The multicandidate committee

reports this information only once.

2. Reports Filed in Error on State Reporting Form

Many state laws require political committees supporting

state or local candidates to file reports of their campaign

finance activity with the Secretary of State or the

equivalent state officer. State reporting forms may not,

however, be used for filing reports with the FEC. The

Commission will only acknowledge reports filed on

FEC forms. (Federal law preempts state law in the

reporting of federal campaign finance actlvitv.]

3. Incorrect Reporting of Expenditures Made on Behalf

of Federal/Nonfederal Candidates

If a political committee uses a single bank account

for federal and nonfederal activity, it must report all

receipts and disbursements - even those that pertain

only to nonfederal election activity. * Alternatively, if a

committee establishes two separate bank accounts for

federal and nonfederal activity respectively, it should

report only the federal account's receipts and disbursements.

4. Incorrect Reporting of Contributions from Persons

Contributions from persons (e.s., individuals, partnerships], which are reported on Line 11a, Column A of

Form 3 or 3X, should include:

Total Itemized contributions** (other than loans)

from persons, which are also reported on Schedule A;

plus

Total unitemiz:ed contributions*"" from persons,

which are reported on the memo entry line directly

under line 11a.

The list below identifies FEe documents that appear

in the Federa/ Register between February 24 and March 

1981. Copies of these notices are not available from t

FEC.

Federal Register

Notice Title Publication Date Citatio

t981-2 Filing Dates for 2/24/81 46 Fed. R

Michigan Special 13810

Primary and General

Elections

1981-3 Filing Dates for 3/11/81 46 Fed. R

Maryland Special 16131

General Elections

1981-4 Filing Dates for 3/11/81 46 Fed. Re

Michigan Special 16131

Primary and General

Elections (Amp.nded

notice)

The RECORD is published by the Federal Election Commission, 1325 K Street, N.W., Washington, D.C. 20463. commissioners are: John Warren McGarry, Chairman; Frank P. Reiche, Vice Chairman; Joan D. Aikens, Thomas E. Harris;

Vernon "Y. Thomson; Robert O. Tiernan; William F. Hildenbrand, Secretary of the Senate, Ex Officio; Edmund L.

Henshaw, Jr., Clerk of the House of Representatives, Ex Officio, For more information, call 202/523-4068 or toll-tree

800/424-9530.

Disposition of excess 3/6/81

funds by campaign committee of incapacitated

former candidate.

Agent authorized by 3/3/81

employees to apportion

payroll deductions among

corporation's federa I/nonfederal PACs.

Special fund to defray 3/10/81

litigation expenses of

Presidential campaign

committee.

Excesscampaign funds 3/tO/81

loaned to state Party

committee.

5

3

No. of

Pages

2

Date Made

AOR Subject Public

1981-14

1981-16

1981-15

*** Contributions of less than $200 (or aggregating less than 1981-17

$200) a year from a single contributor do not have to be

itemized.

* A committee that uses a single bank account for federal and

nonfederal activity rnusr register the account with the FEC

as a political committee. Moreover, the committee may receive only funds permitted under the Act, regardless of

whether the funds are for federal or nontederal elections. 11

CFR 102.5

** Contributions of more than $200 must be itemized on

Schedule A. When several contributions from the same

person aggregate more than $200 a vear, each contribution

(regardless of amount] received thereafter in the same year

from the same person must be itemized.

2
ADVISORY OPINIONS: SUMMARIES

An Advisory Opinion (AO) issued by the Commission

provides guidance with regard to the specific situation

described in the AOR. Any qualified person who has

requested an AO and acts in accordance with the opinion

will not be subject to any sanctions under the Act. Other

persons may rely on the opinion if they are involved in a

specific activity which is indistinguishable in all material

aspects from the activity discussed in the AO. Those seeking guidance for their own activity, however, should consult

the full text of an AO and not rely only on the summary

given here.

AO 19B1-1; Terminated Committees'

Disposal of Excess

Campaign Funds

Excess campaign funds from two 1972 Presidential campaign committees may be transferred to the San Mateo

County Republican Central Committee (the Republican

Central Committee} because excess campaign funds may be

transferred without limit to " ...any national, state, or

local committee of any political party." 2 U.S.C. §439a

and 11 CF R 113.2.

Under California law, the funds remaining in the accounts

of the two committees, formed in 1972 to support the

reelection of President Nixon, were scheduled to escheat to

the state because the committees' bank accounts had been

inactive for over seven years. (The committees had term j.

nated in 1973.} In transferring the funds to the Republican

",.

c ent ral Committee to avoid their escheat ,to the state, one

of the committees (the Bay Area Committee for the Reelection of the President] would not have to register or

report as a political committee since total funds transferred

($257.59, to the RepUblican Central Committee would not

exceed $1,000. The Republican Central Committee would,

however, be required to report the funds as a "contribution" if it deposited them in its federal account. 11 CFR

104,3(a)(4).

The other committee (the San Mateo Committee for the

Reelection of the President) would have to register and

report as a "political cornrnlttee" if it transferred over

$1,000 of its excess funds ($2,534) to the federal account of the Republican Central Committee.

It wou Id not have to register and report as a political

committee, however, if it contributed $1,000 or less to the

Republican Central Committee for federal elections, and

donated the rest of its excess funds to the nonfederal

election account of the Republican Central Committee or

to a charitable organization. In either case, the Republican

Central Committee would be required to disclose as "contributions" the funds it received and deposited in its

federal account. (Date Issued: February 20, 1981;

Length: 4 pages)

3

AO 1981·4: Association's Combined Collection

of Membership Dues and PAC

Contributions

The National Society of Professional Engineers (th

Society), an incorporated, nonprofit membership orqaniz

tion, may solicit contributions to its separate segregat

fund (PAC) in conjunction with the collection of membe

ship dues. Subject to the conditions fisted below, individu

members may voluntarily indicate on their dues statemen

that, in addition to their dues, an amou nt should be fo

warded as a contribution to the PAC.

1. No portion of a contributing member's dues may b

used directly or indirectly as his or her contribution.

2. A contribution from an individual who represents 

corporation must be drawn on an individual account or 

nonrepavable checking account the individual maintai

with the' corporation.

3. Contributions must be separated and forwarded to th

Society's PAC for recording and deposit pursuant to 

U.S.C. §432(b){21 and 11 CFR 102.8(b} and 103.3.

4, The dues statement must include language (proposed b

the Societv] explaining the conditions under which th

Society may legally solicit contributions to its PA

(Date Issued: February 20, 1981; Length: 2 pages)

AO 1981·7: Fundraising by Union PAC

Through Sales of MemberShip

List and Jackets

The Democratic Republican Independent Voter Educati

Political Action Committee (D.R.I.V.E.J. the separa

segregated fund of the International Brotherhood 

Teamsters (the Teamsters), may not raise funds by seili

the Teamsters' membership list, but it may collect cont

butions by selling jackets.

Sale of Membership List· Not Permissible

Under this plan, a credit card protection service (th

firm) would use a local Teamsters' membership list 

solicit business from the union's members. 1n exchange f

the list, the firm would give D.R.I.V.E. the first yearly f

paid by members who contracted for its service. D.A.I.V.

would then use these funds to make political contributio

and expenditures.

This plan would not be permissible because:

1. The firm, if incorporated, would be making prohibite

corporate contributions to D.A.I,V.E,; and

2. Even if the firm were not incorporated, its payments 

D.R.I.V.E. would still be prohibited because the firm 

not included in the class of perso ns O. R.l. V.E. ma

solicit. Under the Act, D.R.LV.E. may solicit contrib

tions only from Teamsters members and their familie

(See 11 CFR 114.5(g)(2}.l

The Commission distinguished this situation from th

presented in AO 1979·24, where a committee sold its asse

(i.e., campaign equipment) to retire its debts. That sale d

not result in a contribution to the committee because th

committee had used the equipment primarily for campaig

operations and had not obtained it as "a thing of value" 

be sold.

continu
FEC PUBLIC APPEARANCES

5/7·8 Practicing Law Institute

Washington, D. C.

Charles N. Steele, General Counsel

REQUIREMENTS FOR A PROPER COMPLAIN

Refiling Complaints

If a complaint does not meet the requirements lis

above, the General Counsel will notify the complainant 

the deficiencies. The complainant will then have 15 days 

file an amended complaint. (The complaint will rem

confidential during this perlod.] A corrected complaint w

receive a Matter Under Review (MURI number and w

remain confidential.

• Under state law. however, this type of omission might be grou

for rejecting a notarized document.

The Commission will provide respondents with a copy of 

improper complaint, as well as a copy of any proper co

plaint subsequently filed. This notice will explain that 

complaint filed was improper and that, unless a pro

complaint is filed within 15 days, no further action will 

taken. If the improper complaint is not corrected, 

Commission will not send any additional notification to 

respo nden ts.

On. February 26, 1981, the Commission adopted guid

lines that clarify the technical requirements for filing 

proper complaint. (See Directive No. 41.) Under the guid

lines, which interpret requirements contained in Sectio

111.4(a) through {c) of Commission Regulations, the Off

of General Counsel may, without prior approval by t

Commissioners, reject complaints that do not meet all t

requirements listed below:

1. A complaint must be in writing and provide the f

name and address of the complainant.

2. A complaint must be notarized. The Office of Gene

Counsel will not, however, reject a complaint th

tails to meet certain technical requirements for nota

zation (e.g., fails to provide the expiration date of t

notary's commission).·

3. A complaint must include an appropriate phrase indlc

ing that the complaint was sworn to, or a statement th

the declarations were made under penalty of periury.

4. A complaint must identify at least one respondent. Co

plaints that fail to identify all respondents will n

however, be rejected.

5. A complaint must allege a violation of the Act or Co

mission Regulations. The General Counsel will rej

complaints that allege only a violation of laws outsi

the Commission's jurisdiction. However, complaints th

allege a violation of the Act or FEC Regulations a

which also 'allege a violation of another statute (e

federal tax laws} will be treated as an ordinary co

plaint. Under these circumstances, the Office of Gene

Counsel will include a recommendation in its fi

report to the Commission on whether or not the co

plaint should be referred to another government agenc

4

American Bar Association

Symposium on Government

Regulation of Campaigns

Washington, D. C. '

Charles N. Steele, General Counsel

5/15

AD 1981·9: Excess Funds of 1980 Committee

Used to Retire Debts of 1978 Committee

Congresswoman Geraldine A. Ferraro's current campaign

committee, Ferraro for Congress 1980, may use its excess

funds to retire debts of her 1978 campaign committee. The

transfer is permissible because, under Commission Regulations:

1. The debt retirement constitutes a "Iawful" use of excess

funds; and

2. A transfer of funds between a candidate's current and

former campaign committees is not limited. 11 CFR

110.3(a)(2)(jv) and 11 CFR 113.2(d). (Date Issued:

February 20, 1981; Length: 2 pages)

5/6 Federal Bar Association

Conference on Recent Developments

in Election Law Affecting Corporations,

Associations and Unions

Washington, D. C.

Chairman John Warren McGarry

Sale of Jackets - Permissible

Under a second plan, D.R.I.V.E. would purchase jackets

from a manufacturer at fair market value. D.R.I.V.E. would

then sell the jackets to members of local Teamsters unions

and their families. The sale offer would include a clear and

visible statement that D.R.I.V.E. planned to use sale

proceeds for political purposes. This plan would be a

permissible fundraising method. The full amount of proceeds from the sale would be considered contributions from

the individuals purchasing the jackets, rather than funds

raised through a commercial transaction, The Teamsters

could use general treasu ry funds to purchase the jackets,

provided D.R.I.V.E. reimbursed the labor organization for

any Costs that exceeded one-third of sale proceeds. 11 CFR

114.5(b)(2). Moreover, D.R.I.V.E. could solicit jacket sales

through an ad placed in the Teamsters' national magazine

(.16 percent of whose circulation includes nonmembers of

the Teamsters) provided D.R.I.V.E.:

1. Included an explicit caveat in the ad stating that it

would not accept contributions from individuals (and

their families) who were not Teamsters members; and

2. Screened and returned all contributions (whether or not

from jacket sales) that were not from Teamsters

members and their families. (Date Issued: March 9,

1981; Length: 5 pages)
•

•

FEe GRANTS EXTENSIONS

IN ENFO'RCEMENT PROCEEDINGS

On February 26, 1981, the Commission adopted pro-

, cedures designed to expedite written requests for extending

deadlines in FEC enforcement proceedings. (See Directive

No. 42.) Under the new procedures, the Office of General

Counsel may grant or deny such requests without prior

approval by the Commissioners. Previously, the Office of

General Counsel had forwarded all such requests, along

with its recommendations, to the Commissioners - a

time-consuming procedure that often delayed FEe action

until after the deadline had expired. Commissioners will,

however, continue to decide on requests for renewed

extensions and for extensions exceeding 30 days.

The Office of General Counsel may give respondents more

time to submit a response or complete a filing if their

request:

1. Pertains directly to an FEC enforcement proceeding

(and not to deadlines pertaining to matters in litigation

or the FEC's public financing regulations);

2. Is received before the original deadline for the response

expires; and

3. Is made for a good cause. "Good cause" for needing

additional response time in an enforcement proceeding

would include, for example, the illness of a respondent's

attorney or the need to spend additional time sifting

through large amounts of information to prepare a

proper response to a complaint.

Any requester who does not specify a new deadline in an

approved request will automatically be granted 15 additional days. If the Office of General Counsel denies a request

for additional time, and if it has received the request

within three days before the original deadline, it will

try to telephone the requester, informing him/her of the

denial.

FEe PUBLISHES NAMES

OF NONFILERS

On February 19, 1981, the Commission published

two separate listings of committees authorized by candidates that had failed to file, respectively, their post-qeneral

and year-end election reports. The first list included the

names of 52 candidate committees that had failed to file

the 30-day post-qeneral election report, due by December

4, 1980. This report should have covered all financial

activity since the last report (or the date of registration,

whichever was later) through November 24,1980.

The Commission also published the names of 419 committees of U. S. House, Senate and Presidential candidates who

had failed to file 1980 year-end reports. due by January 31,

1981. All registered committees were required to file this

report.

Further Commission action against nonfilers and late filers

will be decided on a case-by-case basis. The Federal

Election Campaign Act gives the Commission broad

authority to initiate enforcement actions against nonfilers,

including civil enforcement and the imposition of civil

penalties.

5

SUMMARY OF MUR's

Selected compliance cases, which have been closed an

put on the public record, are summarized in the Record

Compliance matters stem from possible violations of th

Federal Election Campaign Act of 1971, as amended, whic

come to the Commission's attention either through forma

complaints originating outside the Commission or by th

FEe's own monitoring procedures. The Act gives the FE

the exclusive jurisdiction for the civil enforcement of th

Act. Potential violations are assigned case numbers by th

Office of General Counsel and become "Matters Unde

Review" (MUR's). All MUR investigations are kept con

fidential by the Commission, as required by the Act.

MUR's may be closed at anyone of several points durin

the enforcement process, including when the Commission

Determines that no violation of the Act has occurred

Determines that there is no reason to believe or n

probable cause to believe a violation of the Act ha

occurred;

Enters into a conciliation agreement with the respon

dent;

Finds probable cause to believe a violation has occurre

and decides to sue; or

Decides at any point during the enforcement process t

take no further action.

Atter the MUR is closed and released by the Office o

General Counsel, the Commission makes the MUR fi

available to the public. Th is file contains the complain

the findings of the General Counsel's Office and the Cor

mission's actions with regard to the case, including the fu

text of any conciliation agreement. The Commission

actions are not necessarily based on, or in agreement with

the General Counsel's analysis.

Selection of MUR's for summary is made only from MUR

closed after January 1, 1979. The Record article does no

summarize every stage in the compliance process. Rathe

the summary provides only enough background to mak

clear the Commission's final determination. The full text o

these MUR's and others which were closed between 197

and the present are available for review and purchase in th

Commission's Public Records Office.

MUR 1114: Political Committee's Acceptance

of Corporate Contribution!

On August 5, 1980, the Commission entered into a concil

ation agreement with a pclitical committee that had vi

lated 2 U.S.C. §441 b by accepting corporate contribution

Complaint: On February 2, 1980, the Commission's B

ports Analysis Division referred this matter to the Office o

General Counsel, alleging that the Committee may hav

violated 2 U.S.C. §441 b by accepting $40,000 in prohibi

ed corporate contributions. The matter initially came to th

attention of the Reports Analysis Division because th

Committee had reported a refund of $40,000.

General Counsel Reports: In a letter to the Commissio

the respondent explained that a bank had handled th

receipt and deposit of contributions for the Committe

continue
Despite the Committee's explicit instructions not to accept

any contributions that might be corporate, the bank had

accepted approximately 400 checks from corporations.

Once learning of the mistake, the Committee had returned

the corporate contributions.

Recognizing that the Committee had voluntarllv achieved

compliance with the Act by refunding the corporate contributions and by reviewing and amending its records, the

General Counsel said it would have recommended that no

further action be taken against the Committee if the

Committee could demonstrate that the checks had been

returned within a reasonable time period, i.e., 30 days. The

General Counsel noted, however, that it was impossible to

determine how long the checks had remained in the Committee's account since most of the checks were under $100

and consequently had not been itemized on reports; and

the other, itemized contributions had listed the signer of

the checks as the contributor, rather than the corporation.

The General Counsel further stated-that, even though the

bank had erred, it was the ultimate responsibility of the

Committee to ensure that its receipts had been properly

screened. The General Counsel therefore recommended that

the Commission:

1. Find reason to believe the Committee had violated

2 U.S.C. §441 b by accepting prohibited contributions;

and

2. Take no action against corporate contributors since

most of the contributions were for sums of $100 or

less.

Commission Determination: On February 7, 1980, the

Commission determined that the Committee had violated

2 U.S.C. §441 b by accepting approximately $40,000 in

corporate contributions during 1978. On August 5, 1980,

the Commission entered into a conciliation agreement with

the Committee. The Agreement recoqnlzed that the Committee's acceptance of corporate contributions had not

been knowing or willful, and it imposed a civil penaltv of

$500.

COMPUTER TAPES ON 1977-78

PARTY/NONPARTY ACTIVITY

Computer tapes containing final information on the

campaign finance activity of party and nonparty (noncandidate) committees during the 1977-78 election cycle are

now available for purchase from the Commission. The tapes

contain information extracted from the FEC's disclosure

data base and used to produce the Commission's final

1977-78 Reports on Financial Activity on Party and Nonparty Political Committees, a four-volume series released in

April 1980. Since they use the same data as that used to

produce the final 1977-78 Reports on Financial Activity

series, the tapes contain information that has been verified

for accuracy, that is complete as of the end of the 1977·78

6

election cycle and that has been summarized in a u

format.

Two separate tapes are available. One covers Democ

and Republican party committee transactions; the o

nonparty activity. The tapes provide information on 

committee's gross receipts and disbursements, debts 

cash-or-hand: they also contain selected itemized t

actions, with an emphasis on those that supported c

dates for federal office.

Potential purchasers unfamiliar with the kinds of i

mation available in the final 1977-78 Reports on Fina

Activity may first wish to buy the documentation bo

that accompanies each tape. Checks for the booklets, w

sell for $2.40 each, should be made payable to 

Federal Election Commission and sent to: Data Sys

Development Division, Federal Election Commission, 

K Street, N.W., Washington, D. C.20463. Each tape 

be purchased for $70, plus shipping charges. (Produ

costs have been pro-rated.) For more information 

purchasing the tapes, contact the Data Systems Dev

ment Division by calling 202/523-4020 or toll-free 

424-9530.

CONSOLIDATED INDEX AVAILABLE

During February 1981, the Commission annou

the availability of a card index that consolidates i

mation on Commission advisory opinions, compl

compliance cases (matters under review or MURs] and c

pleted audits. The research tool lists any organizatio

person who has received an advisory opinion, who has 

the respondent in a MUR or who has been audited.

The index is arranged ;n alphabetical order by the 

name of the organization or the last name of the per

Any advisory opinion, completed MUR Or completed a

listed under an entry is referenced by its file number. 

index also cross-references the names of candidates 

states appearing in an organization's title.

The index is available for review in the FEC's P

Records Office. Documents referenced in the index 

also be reviewed and copied. For further informa

call 523-4181 or toll free 800/424·9530.

ADVISORY OPINION

INDEX AVAILABLE

An updated edition of the Commission's cumul

Index to Advisory Opinions is now available. The In

includes three parts: a subject index and an index by 

Code, both covering all opinions issued from April 

through mid-February 1981; and an index by FEe R

lations covering opinions from 1977.

Requests for the Index to Advisory Opinions shoul

addressed to the FEC's Office of Public Records. Purc

price (for duplication costs) is $2.60, payable in adva

Checks, made payable to the United States Treas

should be sent to the FEC's Office of Public Records.
•

•

•

CALIFORNIA MEDICAL ASSOCIATION,

ET AL. v. FEC

On January 19, 1981, the Commission's General Counsel

presented oral argument before the Supreme Court in the

suit, California Medical Association, et et. v. FEe (Civil

Action No. 79-4426). As of April 1, 1981, the Court's

decision was pending.

The suit had been precipitated by an FEC enforcement proceeding in which the California Medical Association (CMAI,

an unincorporated professional association, and CALPAC, a

political committee, were respondents. On April 19, 1979,

the FEC had found "probable cause to believe" CMA had

violated 2 U.S.C. §441 a(a)(1 )lC) by making contributions

exceeding $5,000 to CALPAC, which CALPAC had accepted. When it was unable to reach a conciliation agreement with the respondents, the Commission filed suit

against them on May 22, 1979, in the U. S. District Court

for the Northern District of California (Civil Action No.

C79-U97-WHOl.*

Claims Filed Against Commission

Anticipating the FEC enforcement action, CMA filed a

separate suit against the FEC on May 7, 1979, challenging

the constitutionality of those provisions of the Act it had

allegedly violated. Specifically, CMA asked the District

Court to certify the following constitutional questions to

the U. S. Court of Appeals for the Ninth Circuit:

1. Whether 2 U.S.C. §441 a(a)(1) (C), which limits contributions to multicandidate committees to $5,000 per year,

per contributor, abridges First Amendment rights of free

speech and association. In particular, does §441a(a)(1)

(C) unconstitutionally limit contributions by an unincorporated association (CMA) to a political committee

(CALPAC) for the purpose of establishing, administering

or soliciting contributions to the committee; and

2. Whether 2 U.S.C. §441b(b)(2)(C), which permits labor

organizations and corporations (but not unincorporated

associations) to pay costs of establishing, administering

and soliciting funds to a separate segregated fund,

abridges the equal protection provisions of the Fifth

Amendment.

Ruling of Appeals Court

In its opinion of May 23, the Appeals Court, sitting en

bane, rejected all the constitutional claims asserted by

CMA, Relying on the Supreme Court's decision in Buckley

v, Va/eo, the Court found that the contribution limits

imposed only inconsequential restrictions on rights of free

speech. The Court observed that these restrictions were

minimal compared to the "potent alternative means of

• In its October 21,1980, opinion in FEe v. California Medical Associetton, et al., the District Court ordered CMA and CALPAC to

pay the FEC civil penalties of $5,000 each.

7

expression" available to unincorporated assocratrons 

CMA. It noted that CMA, CALPAC and its members c

make contributions and expenditures in connection w

federal elections, as long as the per-candidate and per-c

mittee contribution limits were respected. Further, C

its members and CALPAC could make unlimited inde

dent expenditures to express their political views. M

over, the Court concluded that the contribution lim its w

supported by a compelling governmental interest, nam

preventing the circumvention of the contribution lim

which were intended to minimize both the actuality 

appearance of corruption in federal political campaigns.

The Court also found that the Act did not abridge F

Amendment rights by discriminating against poli

activities of unincorporated associations. To the contr

the Court concluded that unincorporated associations 

CMA are regulated to a lesser degree under the Act. W

corporations and labor unions are prohibited from ma

any contributions or expenditures in connection 

federal elections, and individuals are limited to total co

butions of $25,000 per year, unincorporated associat

have no overall limit imposed on the total amount 

may contribute or expend in connection with fed

elections. Unlike corporations and labor organizations, 

may solicit contributions from anyone and make par

communications to the general public.

Appeal to Supreme Court

In its appeal to the Supreme Court, filed on Jun

1980, CMA reiterated the arguments which the App

Court had rejected and restated its claim that the 

lenged provisions violated both First and Fifth Amendm

rights. In challenging the constitutionality of limit

contributions to multicandidate committees, CMA ar

that, in its Buckley v, Valeo decision, the Supreme C

had not equated contributions to political committees 

contributions to candidates. CMA maintained that" ...

tributions to politica\ committees are functionally diffe

from contributions to candidates."

In its Supreme Court brief, the FEC challenged appell

raising of constitutional issues under 2 U.S.C. §4

a provision by which the Supreme Court may expedit

handling of constitutional challenges to the federal ele

law. The Commission argued that the provision 

" ...enacted by Congress in 1974 for the specific pur

of facilitating the resolution of a major constituti

challenge to the Act prior to the 1976 general election

the Commission's view, appellants sought to " ...in

the extraordinary process of §437h for the purpos

avoiding the Commission's enforcement procedures."

As to the constitutional issues raised in the suit, the C

mission supported the decision of the Appeals Co

reiterating its argu ments that the Act violated nei

the First nor Fifth Amendment rights of appellants.

contin
FEC v. AMERICANS FOR CHANGE, ET AL.

On February 23, 1981, the Supreme Court agreed to

hear the consolidated cases of FEe v, Americans for

Change, Americans for an Effective Presidency and Fund

for a Conservative Majority (Civil Action No. 80·1754) and

Common Cause v. Harrison Schmitt, et al. (Civil Action

No. 80·1609). The suits, which had been filed against

several independent expenditure committees, will be argued

before the Court in the fall.

Claims Against

Independent Expenditure Committees

On July 1, 1980, Common Cause filed suit against

Americans for Change and several of its officers in the U. S.

District Court for the District of Columbia. Common Cause

alleged that defendants had made (or were about to make)

independent and coordinated expenditures in violation of

26 U.S.C. §9012(f), which prohibits unauthorized political

committees from making expenditures of more than $1,000

on behalf of a publicly funded Presidential candidate.

Common Cause asked the Court to uphold the constltutionalitv of §9012(f) as applied to defendants' alleged

expenditures.

On July 11, the Commission was allowed to intervene in

the Common Cause suit and moved to dismiss the action on

the grounds that the Commission had exclusive jurisdiction

over civil enforcement of the alleged violations and that

Common Cause lacked standing to bring suit. Four days

later, the Commission filed suit, alleging that the defendant

political committees (which claimed to be independent of

candidate Reagan's campaign) planned to spend large sums

in support of the Republican Presidential candidate's

general election campaign. The FEC also asked the Court to

uphold the constitutionality of §9012(f) as applied to

defendants' expenditures. On September 24, 1980, the

District Court consolidated the two suits for argument

before the Court.

FEC's Argument

In the motion it filed for summary judgment, the FEC

rejected the defendants' argument that the Supreme Court's

decision in Buckley v, Valeo invalidated §9012(fl. The

FEC pointed out that the constitutional protection accorded political communications is not the same in every

context. Citing the Supreme Court's rulings on the public

funding program in Buckley v. Valeo (424 U. S. I, 96, 99

and 101 (1976» and in Republican National Committee v.

FEC, the FEC maintained that the Court had confirmed the

governmental interest served by the contribution and

expenditure limits contained in the Presidential public

funding program. The FEC argued that, in a similar vein,

§9012(f) closed off" ...the only major avenue by which

enormous amounts of aggregate wealth and private fi·

nancing could be interjected into a scheme designed to

encompass only public funding, while avoiding any direct

and substantial infringement of protected rights by permitting individuals independent expenditures and by limiting its [§9012(f)'s] reach to only those campaigns where

candidates have chosen public financing as an alternative to

private funding." The FEC maintained that if the defendant

committees' " ...stated intentions [came] to fruition,

namely to raise and expend on behalf of the general

8

election campaign an amount approximately double tha

which Mr. Reagan and Mr. Bush have accepted in publl

financing, the Congressional purpose in enacting thi

legislation would clearly be subverted, with the taxpaye

left footing the bill."

The FEC noted that the legislative history demonstrate

that Congress was principally concerned with ensurin

the effectiveness of the overall limitations imposed upon

those candidates accepting public funding. As stated by

Senator Taft in support of his amendment to limit commit

tee expenditures, §9012(f)'s purpose was " ...to preven

any political committees from being formed as a subterfug

so that they can go beyond the authorization of the com

mittees and make expenditures that were not within th

limitations of the expenditures which are in the bil\."

The FEC further argued that. the limited restrictions o

§9012(f) were constitutional as applied to defendant

" . . .because public funding of a general election presi

dential campaign is an option which is chosen by candidate

in place of unlimited private funding." Additionally, the

provision did not abridge free speech rights because

" ...the transformation of [potitlcal committee member]

contributions into political debate involves speech by

someone other than the contributor (Buckley v, Valeo

424, U, S. at 21), thereby removing political committe

expenditures from the core of individual political express

ion." (See California Medical Association v, FEC, Opinion

at 9 n. 5, 10, 15; Matt v, FEC, Opinion at 7.)

Defendant Committees' Argument

In their motion for summary judgment in the suit

defendants argued that the independent expenditures in

question were a form of free speech and, as such, were pro

tected by the First Amendment. They contended that, in

its Buckley v. Valeo decision (424 U. S. 1 (1976)), th

Supreme Court had held that statutory limits on the

amounts which individual citizens or groups could spend on

independent communications in political campaigns were

an impermissible restraint on First Amendment freedoms

Defendants argued, therefore, that §9012(f) could be

interpreted as prohibiting only coordinated expenditure

authorized or requested by a candidate.

District Court Decision 0

In its opinion of August 28, 19Bx, the Court ruled on

the claims made by the FEC and Common Cause in the

consolidated suits. In its rulings on the FEC's claims, the

three-judge court determined that §9012(f) did apply to

defendants' activities. The Court concluded, however, tha

the defendants' proposed expenditures constituted "inde

pendent expenditures" which, under Buckley v. Valeo

could not be limited. The Court said, "The compelling

governmental interest to fight electoral corruption i

insufficient, here, as in Buckley. to justify what amounts to

a direct limitation on political speech ....Whereas a Presi

dential candidate, by accepting public funds, may

choose ...to do without unlimited contributions and

expenditures, the candidate's public supporters have a

separate, protected right to express themselves, individually

or jointly. This preserves free access and full participation

in the public debate."
..

•

•

•

Since it had ruled on the constitutionality of §9012(f)

in the FEC's suit, the Court dismissed that portion of

Common Cause's suit (Count" as moot. The Court also

dismissed Count II of the Common Cause suit, which had

sought enforcement of provisions of the Act allegedly

violated by defendants. The Court stated that the Commission had been vested by Congress with exclusive jurisdiction

over enforcement of the Act. The Court did not, however,

rule on Common Cause's standing to bring suit.

ADVISORY PANEL MEETS

0[\ February 23 and 24, 1981, the Advisory Panel of

the Commission's Clearinghouse on Election Administration met in Washington to discuss problems encountered by

election officials in administering the 1980 elections.

The 22-member panel, comprised of state and local election

officials, also discussed application of computer technology

to the registration and election process, and a Congressionally mandated FEC proposal for a preliminary study

on voting systems standards. The advisory panel provided

suggestions on how the Commission's proposal could help

solve problems encountered with voting systems in their

jurisdictions.

The February meeting was the eighth held by the Advisory

Panel since its creation in 1975. The panel's primary

mission is to advise the FEC on ways it may best use

its resources to help improve the administration of federal

elections throughout the country. (The Commission is the

only agency specifically charged by Congress with conducting research in the administration of federal elections.]

New Members

On January 20, 1981, the Commission appointed six'

new members to the Advisory Panel. The new members,

who will serve a two-year term on the panel, are: Leonard

Panish, Registrar-Recorder of Los Angeles County, California; Charles Kaniss, Election Supervisor, Pinellas County,

Florida; Pat Crawford, Executive Deputy Secretary of the

Commonwealth of Pennsylvania; George Strake, Secretary

of State, Texas; Joaquin Avila, Mexican American Legal

Defense and Education Fund, San Antonio, Texas;

Timothy A. Bassett, Chairman, Joint Committee on

Election Laws, Massachusetts House of Representatives.

SUBSCRIPTIONS

Election Law Updates is a quarterly series which summarizes all new state and federal election legislation.

$11.00 per year.

Election Case Law is a quarterly series which summarizes

recent state and federal litigation relating to election

matters. $10.00 per year.

You may order these subscriptions by mail from: Superintendent of Documents, U.S. Government Printing Office,

9

Washington, D.C. 20402. Identify report title. Enclos

check or money order for subscription prlcals) payabl

Superintendent of Documents,

NEW EX-OFFICIO MEMBER/

DESIGNEE JOIN COMMISSION

During March 1981, William F. Hildenbrand, the 

Secretary of the U. S. Senate, assumed his position a

ex-officio member of the Commission and designa

Thomas J. Josefiak as his Special Deputy to the Comm

sion.

Mr. Hildenbrand was elected Secretary of the Sen

on January 5, 1981, after serving as Secretary for 

Minority since 1974. A native of Pottstown, Pennsylva

Mr. Hildenbrand began his government service in 195

Assistant to Congressman Harry G. Haskell, Jr. From 1

to 1960, he served as Congressional Liaison Officer for 

Department of Health and Human Services (forrn

HEW). He then became Legislative Assistant to Senato

Caleb Boggs of Delaware. From 1969 to 1974, he serve

Administrative Assistant to Senator Hugh Scott of Penn

vanla, the former Senate Republican Minority Leader.

Under the election law, the Secretary of the Senate and 

Clerk of the House of Representatives serve as ex-offi

nonvoting members. Edmund L. Henshaw, Clerk of 

House, continues to serve as the other ex-officio membe

the Commission. Douglas Patton has served as his Spe

Deputy since 1975.

CHANGE OF ADDRESS

Political Committees

Registered political committees are automatically

sent the Record. Any change of address by a regi

tered committee must, by law, be made in writing a

an amendment to FEC Form 1 (Statement of Organi

zation) and filed with the Clerk of the House, th

Secretary of the Senate or the FEC, as appropriate.

Other Subscribers

Record subscribers (who are not political commit

tees), when calling or mailing in a change of address

are asked to provide the following information:

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

2. Old address.

3. New address.

4. Subscription number. The subscription number i

located in the upper left hand corner of the mai

ing label. It consists of three letters and five num

bers. Without this number, there is no guarante

that your SUbscription can be located on the

computer.
PRIMARY FUNDS CERTIFIED

The summary chart below provides cu muJative information on certifications of matching funds made to Presidential primary candidates actively campaigning in the

1980 primary elections. Under the Presidential Primary

Matching Account, Presidential primary candidates may

continue receiving primary matching payments after they

have become inactive, provided: the candidate's net outstanding campaign obligations remain greater than the sum

of private contributions plus matchings funds; matchab

contributions are received and deposited before Decemb

31 of the election year; and total payments to the cand

date have not exceeded 50 percent of the total expenditu

limit See 11 CFR 9034.1(b) and (d).

Information on the chart is complete as of February 2

1981. The chart includes data on each primary candidate

total submissions (and resubmissionsl of private contrib

tions for primary matchi ng funds, total funds certifi

by the Commission to each candidate and the total amou

of matching funds to which the candidate is still entitle

based (where appropriate) on the candidate's estima

of net outstanding campaign obligations. All dollar figur

are rounded off to the nearest dollar.

PRIMARY MATCHING FUNDS

1980 PRESIDENTIAL ELECTIONS

Maximum

Nameof Submis- Amount Resub- Amount Entitlement

Candidate sions Requested Contributors missions Certified RemainingANDERSON, John 7 $2,895,484 80,744 0 $2,680,347 0

BAKER, Howard Jr. 14 2,699,562 67,490 0 2,635,043 0

BROWN, Edmund Jr. 15 996,153 16,273 3 892,249 0

8USH, George 12 6,373,497 86,612 0 5,716,247 0

CARTER, Jimmy 28 5,490,096 63,336 2 5,112,581 $594,362

CRANE, Philip 17 2,140,551 69,695 1 1.898,838 0

DOLE, Robert 5 467,117 3,752 1 446,226 0

KENNEDY. Edward 29 4,447,034 80,283 1 4,107,716 $905,560

LAROUCHE, Lyndon 15 592,982 10,663 13 526,253 0

REAGAN, Ronald 10 8,254,771 213,747 0 7,294,462 0

TOTALS 152 $34,357,248 692,595 21 $31,309,962

• Maximum entitlement remaining is based on a candidate's statement of net outstanding campaign obligations on

the date ot ineligibilitv.

FEDERAL ELECTION COMMISSION

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