999 E Street NW Washington DC 20463 Volume 13, Number 

STAFF

1 Commission Accepts General Counsel's

Resignation

REPORTS

2 California Special Election

3 Nonelection Year Reporting Schedule

3 ADVISORY OPINIONS

COURT CASES

5 FEC v. Furgatch; FEC v. Dominelli

6 FEC v. Beatty for Congress Committee

INFORMATION

7 Calculating Spending Limits

800 LINE

9 After the Election: Winding Down

11 INDEX

TABLE OF CONTENTS

COMMISSIONERS

1 New Ex-Officio Commissioners

COMMISSION ACCEPTS RESIGNATION

OF GENERAL COUNSEL

Charles N. Steele, General Counsel sin

December 1979 and senior FEe attorney sin

January 1976, has tendered his resignation effe

tive March 1987. Mr. Steele leaves the Comm

sion to accept the position of General Counsel f

Conservation International, an organization ded

cated to the preservation of the full array 

species and ecosystems on earth.

Mr. Steele graduated from Harvard Colle

and Harvard Law School. Prior to joining t

Federal Election Commission, he was employed 

a staff attorney with the appellate court bran

of the National Labor Relations Board. Befo

serving as FEe General Counsel, Mr. Steele w

Associate General Counsel for Enforcement a

Litigation. During his tenure at the Commissio

Mr. Steele played a key role in the public fina

cing of four Presidential elections, defended t

continu

FEDERAL ELECTION COMMISSION

Business Industry Political

Action Committee

Washington, D.C.

Vice Chairman Thomas J.

Josefiak

Citizens' Research Foundation

Washington, D.C.

Chairman Scott E. Thomas

Vice Chairman Thomas J.

Josefiak

4/29

4/9

March 1987

PUBLIC APPEARANCES

NEW EX-OFFICIO COMMISSIONERS

During January and February 1987, Walter

"Joe" Stewart, the new Secretary of the Senate,

and Donnald K. Anderson, the new Clerk of the

House of Representatives, assumed positions as

ex-officio, nonvoting members of the Commission.

Prior to assuming his position as Secretary of

the Senate, Mr. Stewart was Vice President of

Government Affairs for Sonat, Inc. Before that,

he served as Secretary for the Minority of the

U.S. Senate and as Executive Director of the

Senate Steering Committee. Other Senate offices

held by Mr. Stewart between 1963 and 1979

included: Counsel to the Senate Appropriations

Committee, Director of Legislative Affairs for

the Majority Whip, Administrative Assistant to

the Majority Leader for Senate Operations and

Chief of Staff for Senatorial and Presidential

delegations traveling to China, Russia and the

Middle East.

A Georgia native, Mr. Stewart received his

undergraduate degree from George Washington

University and an LLB from American University.

He is a member of the District of Columbia Bar.

Before assuming his position as Clerk of the

U.S. House of Representatives, Donnald K.

Anderson served for 15 years as Majority Floor

Manager for the House. A California native, Mr.

Anderson began his long career in the House with

his appointment as a House Page in 1960.
2

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

D.C. 20463. Commissioners are: Scott E. Thomas, Chairman; Thomas J. Josefiak, Vice Chairman;

Joan Aikens; Lee Ann Elliott; Danny Lee McDonald; John Warren McGarry; Walter J. Stewart,

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

Ex Officio. For more information, call 202/376-3120 or toll-free 800/424-9530.

Volume 13, Numoo- 

Report Period Mailing Filing

Covered Date Date

Pre-special 1/1*-3/18 3/23/87 3/26/87

Post-special 3/19-4/27 5/7/87 5/7/87

Mid-year 4/28-6/30 7/31/87 7/31/87

*Committees shoLLrd use this date, or th

closing date of the last report filed, or the date o

candidate status, whichever is later.

CHARTn

Two Elections; Candidate Runs in Both

Report Period MaiUng Filing

Covered Date Date

Pre-primary 1/1*-3/18 3/23/87 3/26/87

Pre-general 3/19-5/13 5/18/87 5/21/87

Post-general 5/14-6/22 7/2/87 7/2/87

Mid-year 6/23-6/30 7/31/87 7/31/87

-~-----'-

CHARTm

Two IDectioos; Candidate Runs in Only One

Report Period Mailing Filing

Covered Date Date

Pre-primary 1/1 *-3/18 3/23/87 3/26/87

Mid-year 3/19-6/30 7/31/87 7/31/87

CHART I

Only One Special mection

pre-primary election report, but they are no

required to file a post-primary election repor

Instead, they must file pre- and post-special gen

eral election reports. These committees mus

also file a mid-year report. (See Chart II below.)

Candidate committees involved in the specia

primary election, but who do not participate i

the special general election, must file only pre

primary special election and mid-year reports

(See Chart III below.)

March 1987 FEDERAL ELECTION COtvIlVIISSIOI\J

GENERAL COUNSEL, continued from p.l

Commission and the statute before the Supreme

Court in numerous proceedings and supervised a

staff of over sixty who render a full range of legal

services to the Com mission.

The Commission has initiated its search for a

new General Counsel. This position, an Executive

Level V, earns an annual salary of $72,500. The

General Counsel, who is appointed by majority

vote, serves at the pleasure of the Commission.

Applicants should submit a resume and a

completed Standard Form 171 to the Office of

Personnel, Federal Election Commission, 999 E

Street, N.W., Room 812, Washington, D.C. 20463.

Applications must be postmarked no later than

March 30, 1987.

CAIJFORNIA SPECIAL ELECTION

On April 7, 1987, California will hold a

special election in its fifth Congressional District

to fill the seat vacated by the death of Representative Sala Burton. If no candidate obtains a

majority of the votes, a special general election

will be held on June 2, 1987.

Political committees authorized by candidates (candidate commlttees) who are participating in these special elections must file the appropriate pre- and post-election reports. The reporting schedule will depend on whether one or

two elections are held. (See below.) Note that all

other political committees which support candidates in the special election(s) (and which do not

report on a monthly basis) must also follow the

reporting schedule for the special election(s).

If Only One Special mection Is Held

If only one special election is held, eandidate

committees participating in the election must file

pre- and post-special election reports and a midyear report. (See Chart I below.)

If Two Special Elections Are Held

If both a special primary election and a

special general election are held, candidate committees participating in both elections must file a
FEDERAL ELECTION COMIVIISSIOI\J

*The filing date is considered the mailing date

if the report is sent by registered or certified

mail. 11 CFR 104.5(e).

Volume 13, Numte

Excess funds transferred fr

officeholder's 1986 Senate campa

to his 1984 Presidential prim

campaign for debt retireme

(Date made public: January 

1987; Length: 3 pages)

Campaign's purchase of car for c

didate's reelection effort and of

cial duties. (Date made pub

January 15, 1987; Length: 1 page)

Professional association's combin

dues payment/solicitation sta

ment. (Date made public: Febru

4t 1987; Length: 2 pages)

Nonprofit corporation's financ

and distribution to the general p

lic of: 1) print materials similar 

voting records and 2) voter gui

that include issue discussion a

election references. (Date ma

public: February 10, 1987; Leng

3 pages, plus 142-page supplement

continu

Professional association PAC's so

citation of lifetime members who 

longer pay dues. (Date made pub

February 3, 1987; Length: 2 pag

plus 77-page supplement)

Media firm's failure to transfer 

fund from broadcast corporation 

Presidential campaign. (Date ma

public: January 27, 1987; Length: 

page plus 7-page supplement)

Campaign's compensation of l

wages to candidate. (Date ma

publics January 15, 1987; Length

page, plus 2- page supplement)

1987-5

1987 -7

1987-4

AOR Subject

1987-3

1987-1

1987-6

1987-2

ADVISORY OPINION REQUESTS

The following chart lists recent requests 

advisory opinions. The full text of each AOR 

available to the public in the Commission's Off

of Public Records.

3

Filing

Date*

Filing

Date*

7/31/87

1/31/88

2/20/87

3/20/87

4/20/87

5/20/87

6/20/87

7/20/87

8/20/87

9/20/87

10/20/87

11/20/87

12/20/87

1/31/88

1/1 - 6/30

7/1 -12/31

1/1 - 1/31

2/1 - 2/28

3/1-3/31

4/1 - 4/30

5/1 - 5/31

6/1 - 6/30

7/1 - 7/31

8/1 - 8/31

9/1 - 9/30

10/1 - 10/31

11/1 - 11/30

12/1 - 12/31

Period Covered

Period Covered

Mid-Year

Year-End

March 1987

Report

Report

3. PACs and Party Committees

PACs and party committees report on either

a semiannual or a monthly basis. Note: A PAC or

party committee that wishes to alter its reporting

schedule (for example, from monthly to semiannually) should notify the Com mission of its

intention. Consult 11 CFR 104.5(c) for procedures.

Questions and requests for additional forms

should be addressed to the Information Services

Division, 999 E Street, N.W., Washington, D.C.

20463; or call 202/376-3120 or toll free 300/424-

9530.

2. Presidential Candidate Committees

Committees authorized by Presidential candidates report on either a monthly or a quarterly

basis.

MONTHLY REPORTS 1987

1. Candidate Committees

Committees authorized by Congressional

candidates report on a semiannual basis: July 31t

1987t and January 31, 1988.

NONELECTION YEAR REPORTING SCHEDULE

Political committees should be aware that

the reporting schedule changes in this nonelection

year, 1987. Reporting requirements--and options,

in some cases--are listed below. Filing deadlines

for monthly and semiannual reports are detailed

in the charts below.

SEMIANNUAL REPORTS 1981

February

March

April

May

June

July

August

September

October

November

December

Year-End 1987

•
March 1987 FEDERAL ELECTION COMrvllSSION

continued from p. 3

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 1986-42: .I£ffect of Corporate Reorganization

on PACs' Multicandidate Status,

Contribution Limits and Affiliation

with Each Other

During 1986, the board of directors of Dart and

Kraft, Inc. (DKI), a Delaware corporation, authorized a corporate reorganization of various DKI

businesses through a stock distribution plan. During the reorganization, DKI established Pre mark

International, Inc. (Premerk) as a wholly-owned

SUbsidiary. However, Premark subsequently remained an affiliate through the specific provisions

of the reorganization. The Commission ruled on

the impact of DKl's reorganization on the political committee status, disclosure requirements and

contribution limits of: 1) DKI's separate segregated fund, Dart and Kraft PAC, and 2) a separate segregated fund established by Premark, Premark PAC.

DKI's PAC Arter the Reorganization

As a result of the reorganization, DKI became Kraft, Inc. Although the corporation must

file an amended Statement of Organization reflecting a corresponding name change for its PAC

(i.e., from Dart and Kraft PAC to Kraft PAC),

the renamed PAC (Kraft PAC) will retain Dart

and Kraft PAC's status as a multleandldate committee.* 2 U.S.C. §432(e)(5) and 11 CFR 102.14(c)

and AOs 1980-40 and 1985-27. Accordingly, contributions made by Dart and Kraft PAC before

the corporate reorganization and contributions

itA multicandidate PAC may contribute up to

$5,000 per election to each candidate and up to

$5,000 per year to any other nonparty political

committees or $15,000 to a national committee of

a political party.

4

\Olume 13, l\Jumoo- 3

made by Kraft PAC to the same candidates

campaigns after the reorganization are subject to 

a single $5,000 limit. 

Premark's PAC After the Reorganization

Under the Act and FEC Regulations, politica

committees are considered affiliated if they are

established, financed, maintained or controlled by

the same corporation. These affiliated commit

tees are subject to a single contribution limit on

both contributions they make and contribution

they receive. See 2 U.S.C. §441a(a)(5}; 11 CFR

110.3(a)(l}(i), (ii)(A) and (ii)(E).

Although Premark is no longer a whoUy

owned subsidiary of Kraft, Kraft PAC and Pre

mark PAC are considered affiliated committees

for purposes of the contribution limits because

DKI established and (acting now as Kraft) con

tinues to control Pr ernark, Specifically, before

the stock distribution, DKI amended Prernark's

certificate and by-laws to perpetuate the DKI

elected board of directors and to make it more

difficult for shareholders to acquire control of

Premark.

Consequently, as affiliated committees:

o Kraft PAC and Premark PAC must each amend

their respective Statements of Organization to

reflect their affiliation (2 U.S.C. §433{b)(2); 11

CFR l02.2(a)(l)(ii) and (b)(l)(ii)}.

o Premark PAC shares Kraft PACts multlcandi

date status.

o Kraft PAC and Premark PAC are, however

considered separate com mittees for reporting

purposes. See AOs 1980-40 and 1985-6.

o Kraft PAC and Premark PAC are subject to a

single limit on contributions they make to a

candidate's campaign (Le., $5,000 per election)

Moreover, any contributions DKI PAC made to

the same candidate's campaign before the reorganization also count toward the PACs' combined limit. (Date issued: January 16, 1987

Length: 6 pages)

AO 1986-44: Corporation's Plan to Match

Employee Contributions to PAC

with Corporate Donations to

Charity

The Detroit Edison Company (the Company) may

encourage contributions to its separate segrega

ted fund, the Detroit Edison Political Action

Committee (EdPAC), by matching each indivi

dual's contribution with a corporate donation to a

charitable organization designated by the indivi

dual. In offering the plan, the Company and

EdPAC must:

o Limit the offer to sollcltable employees (t.e.

the Company's stockholders, executive and ad

ministrative personnel and their respective

families) 2 U.S.C. S441b(b)(4)(A)(i) and 11 CFR

lI4.5(g)(l); and
March 1987 FEDERAL ELECTION COMMISSION

o Comply with the other solicitation requirements of FEC Regulations. 11 CFR 114.5(a).

The election law prohibits a corporation from

making direct contributions or expenditures in

connection with federal elections. 2 U.S.C.

§441b. However, the law permits a corporation to

pay for the sollcttatlon costs of its PAC, provided

the corporation does not use the solicitation process as a means of exchanging treasury funds for

voluntary contributions. 2 U.S.C. §44Ib(a) and

(b)(2)(C)j 11 CFR 114.5(b). The Company's proposed plan to encourage employee contributions

(subject to conditions stated in the opinion) does

not constitute such a prohibited exchange. Employees will not receive direct payments (or any

other Iinancial benefits) from the Company in exchange for their EdPAC contributions. (Date

issued: January 9, 1987; Length: 3 pages)

FEe v. FURGATCHi FEC v. DOMINELIJ

On January 9, 1987, the U.S. Court of Appeals for the Ninth Circuit ruled that two political ads which Mr. Harvey Furgatch placed in The

New York Times and The Boston Globe shortly

before the 1980 general election constituted communications which expressly advocated the defeat

of President Jim my Carter in his reelection bid.

(FEC v. Harvey Furgatch; Civil Action No. 85-

5524). In reversing the district court's decision in

the case, the appeals court confirmed the FEC's

claim that Mr. Furgatch should be held liable for

violations of the election law resulting from: 1)

his failure to report spending for the ads as

independent expenditures" and 2) his failure to

state in one of the ads that the communication

was not authorized by a candidate or a candidate's

committee.

Since FEC v. Dominelli presented "facts virtually identical" to those addressed in the

Furgatch suit, the appeals court also reversed the

district court's ruling in that case. (FEC v.

Dominelli; Civil Action No. 85-5525)

Background

In filing suit against Mr. Furgatch on March

25, 1983, the FEC claimed that he had violated

ItAn independent expenditure is an expenditure

for a communication expressly advocating the

election or defeat of a clearly identified candidate that is not made with the cooperation or

prior consent of, or in consultation with, or at the

request or suggestion of, any candidate or his/her

authorized committees or agents. 11 CFR 100.16

and 109.1(a).

5

Volume 13, Numoo

the election law by failing to report his spendi

on the political ads as independent expenditur

(amounting to approximately $25,008). 2 U.S

§434(c). The FEC also claimed that Mr. Furgat

had violated section 44ld of the law by failing 

include an adequate disclaimer notice on the 

he had placed in The Boston Globe.

In December 1984, the district court rule

that the political ads sponsored by Mr. Furgat

did not expressly advocate President Carter's d

feat and therefore did not constitute independe

expenditures. The district court applied the sta

dard contained in the Supreme Court's Buckley 

Valeo opinion. In Buckley v. Valeo, the Court h

defined express advocacy as "communicatio

containing express words of advocacy of electi

or defeat, such as 'vote for,' 'elect,' 'cast yo

ballot for,' 'Smith for Congress,' 'vote again

'defeat,' 'reject.' n Buckley v. Valeo, 424 U.S. 1,

(1976).

Applying this express advocacy standard 

Mr. Furgateh's ads, the court found that t

pivotal question was "whether the phrase 'Do

let him do it' [was] the equivalent of the expre

ion 'vote against Carter.'" The court conclud

that the phrase "Don't let him do It" did n

constitute express advocacy. The court fou

that the ad exhorted the reader not to let Pre

dent Carter "hide his own record" or "degrade t

electoral process and lessen the prestige of t

office, II but did not ask the reader to vote agai

the President.

On January 24, 1985t the FEC filed an app

of the district court's decision with the U.S. Co

of Appeals for the Ninth Circuit.

Appeals Court's Ruling

In reversing the district court's ruling in t

case, the appeals court rejected the "strictly lim

ted" definition of express advocacy relied upon 

the district court. (See discussion above.) Inste

the appeals court found that "context is releva

to a determination of express advocacy. It T

court therefore concluded that "lpolitlcall spee

need not include any of the words listed 

Buckley to be express advocacy under the A

but must, when read as a whole, and with limit

reference to external events, be susceptible of 

other reasonable interpretation but as an exhor

tion to vote for or against a specific candidat

The appeals court stated that this standard 

determining when political speech constitutes e

press advocacy would "preserve the efficacy 

the Act without treading upon the freedom 

political expression."

Elaborating on this standard, the appe

court held that a political communication cons

tuted express advocacy if:

continu

"'For a summary of the district court's ruli

see p. 6 of the January 1985 Record.
March 1987 FEDERAL ELECTION COrvlMISSION

1. The communication "is unmistakable and unambiguous, suggestive of only one plausible meaning," even if "not presented in the clearest,

most explicit language";

2. The communication "presents a clear plea for

action", and

3. There can be no reasonable doubt about "what

action is advocated, 11

Conversely, the appeals court held that

"speech cannot be express advocacy of the election or defeat of a clearly identified candidate

when reasonable minds could differ as to whether

it encourages a vote for or against a candidate or

encourages the reader to take some other kind of

action."

In applying its express advocacy standard to

Mr. Furgatch's ads, the appeals court held that it

had "no doubt that the ads ask the public to vote

against Carter." In reversing the district court's

conclusion, the appeals court held that the "pivotal question is not what the reader should prevent

Jimmy Carter from doing, but what the reader

should do to prevent it li.e., his reelection]." The

appeals court noted that, although "we are presented with an express call to action" in the ad,

we are not told "what action is appropriate."

However, the court concluded, in the context of

the message, "reasonable minds could not dispute

that Furgatch's advertisement is urging readers to

vote against Jimmy Carter." Moreover, the court

held that its conclusion was "reinforced by consideration of the timing of the ad.•.timing the

appearance of the advertisement less than a week

before the election left no doubt of the action

proposed."

Finally, the court held that Mr. Furgatch's

ads were not the kind of "issue-oriented speech"

excepted from the election law: "The ads directly

attack a candidate, not because of any stand on

the issues of the election, but for his personal

qualities and alleged improprieties in the handling

of his campaign. It is the type of advertising that

the Act was enacted to cover."

The court did not rule on Mr. Furgatch's

constitutional challenge to sections 434(c) and

44ld of the election law because, in deciding the

case on grounds of statutory construction, it had

"Impllcltly" dealt with the free speech issues

raised in his suit.

On January 23, 1987, Mr. Furgatch filed a

petition with the court in which he asked the

court to reconsider the suit and to rehear it with

a full panel of judges,

6

Volume 13, Numoo- 3

FEe v, BEATTY FOR CONGRESS COMMITTEE

On January 15, 1987, the U.S. District Cour

for the Southern District of New York granted th

FEC's application for a default judgment in FEC

v. Beatt for Con ress Committee (Civil Action

No. 86-Civ-3894- RLC] • The court's default [udg

ment decreed that the Beatty for Congress Com

mittee, the principal campaign committee fo

Vander L. Beatty's 1982 House campaign, and th

committee's treasurer, Eoward Myers, Jr., vio

lated the election law by:

o Knowingly accepting excessive contribution

from individuals and from a political com mittee

(2 U.S.C. §44Ia(f));

a Knowingly accepting an excessive loan from the

candidate's family and failing to report the loan

(2 U.S.C. §§434(b)(3)(E) and 4418(f)) and 11 CPR

I 04.11(a);

o Accepting prohibited contributions from cor

porations and labor organizations (2 U.S.C

§44Ib); and

o Accepting corporate loans and failing to repor

them (2 U.S.C. §§441b and 434(b)(3)(E) and 1

CFR 104.l1(a)).

The court also found that the Committee

violated the law's recordkeeping and reporting

requirements by:

o Failing to file two 1982 quarterly reports on

time (2 U.S.C. §434(a)(2)(A)(iii));

a Failing to file 1982 pre-primary and year-end

reports and a 1983 mid-year report (2 U.S.C

§§434(a)(2)(A)(i) and (iii) and 434(a)(2){B)(i);

o Failing to maintain adequate records of contri

butions (2 U.S.C. §§432{c)(lH3));

o Failing to itemize certain contributions and

expenditures (2 U.S.C. §§434(b)(3) and (4) and

434(b)(5) (A)j and

o Failing to continuously report two loans unti

extinguished (11 CPR 104.11(a)).

The court imposed a $5,000 civil penalty on

defendants for each violation and required defen

dants to pay the FEC's court costs and attorney'

fees.

FEe v. 1984 VICTORY FUND

On January 27, 1987, the U.S.District Cour

for the Southern District of New York granted the

FEe's application for a default judgment agains

the 1984 Victory Fund, a nonconnected PAC, and

the Fund's treasurer, Vincent G. Downing.

As part of the judgment, the court ordered

the defendants to pay a $5,000 civil penalty to the

U.S. Treasurer. The court also enjoined the

defendants from further violations of the election

law's reporting provisions.

In filing suit against the Fund and its trea

surer in May 1986, the FEC claimed that the

defendants had violated the election law by fail

ing to file a 1984 October quarterly report, a 1984

post-election report and a 1984 year-end report

(2 U.S.C. §§434(a)(4)(A){i) and (iii),) (FEe v. 1984

Victory Fund; Civil Action No. 86-Civ.-389l)
March 1987 FEDERAL ELECTION COMMISSION Volume 13, Numrn

INFORMA1IlN

CALCULATING SPENDING LIMITS

In preparing for the 1988 election year, Presidential candidates who plan to apply for primary

matching funds may wish to estimate the total

amount of campaign funds they will be able to

spend: 1) nationwide during the entire primary

election period and 2) in each state in which they

run in a primary election.* Similarly, national

and state party committees may wish to estimate

the total amount of coordinated (§441a(d» expenditures** they may spend on behalf of their

respective Presidential and Congressional candidates in the 1988 general elections. Although the

information needed to calculate the 1988 spending

limits will not be available until February 1988,

Presidential campaigns and party com mittees may

use information recently issued as a basis for

developing informal estimates of the 1988 spending limits. These estimates can then be readjusted when the 1988 information becomes available.

Note, however, that coordinated party spending limits for 1987 special elections are based on

1987 information. Those limits are listed in

Section IV below.

I. Information Used To Calculate

Spending Limits

The specific figures needed to calculate the

1987 limits are:

o The Voting Age Population (VAP) for each

state, supplied by the Department of Commerce. The state-by-state VAP figures used

for calculating the 1987 spending limits are

listed in Chart I on pages 8 and 9.

o The 1986 Cost of Living Adjustment (COLA):

2.223. (The COLA is based on the annual

change in the Consumer Price Index, as certified by the Secretary of Labor, using 1974 as

the base year. Since 1975, the COLA has

som etimes resulted in significant increases in

spending limits. See, for example, Chart II on

coordinated party spending limits for House

candidates.)

""Presidential candidates who accept pUblic

funds for their primary campaigns are subject to

both an overall limit on their campaign spending

and a state-by-state limit. 2 U.S.C. Section 441a

(b); 11 CFR 9035.1(a)

"Coordinated party expenditures are limited,

special expenditures which party committees may

make on behalf of their: nominees in general

elections. 2 U.S.C. Section 441a(d); 11 CFR

110.7.

7

Using these two figures--VAP and COLA

Presidential primary campaigns and party com

mittees can determine what the spending limi

would be if the elections were held in 198

These unofficial estimates can then be adjuste

when the 1988 information becomes available.

The limits can be calculated by using th

statutory formulas explained below.

II. Formula For Presidential Primary Limits

o National limit (all primar~ elections); $1

million multiplied by COLA.

o State limit: $200,000, multiplied by COLA; 

$.16 x the VAP in the state, multiplied b

COLA, whichever is greater.

o Candidate's personal limit: $50,000. (No COL

adjustment is made to this limit.)

III. Formula For Coordinated Party

Expenditure Limits

Spending Limits for House

and Senate Nominees

The national** and state party commi

tees" ** may each make coordinated party expe

ditures on behalf of the party's House and Sena

nominees in the general election.

o House of Representatives candidate in sta

with more than one district: $10,000 multiplie

by COLA.

o For Hause candidate in state entitled to on

one representative: $20,000 multiplied b

COLA; or $.02 x VAP in the state, multiplied b

COLA, whichever is greater.

o Senate candidate: $20,000 multiplied by COLA

or $.02 x the VAP in the state, multiplied b

COLA, whichever is greater.

continue

"In. 1987, this amount is estimated to b

$22,230,000 but is subject to adjustment based o

1988 information.

**A party's national committees share a sing

limit for coordinated party spending on behalf o

each of the party's Congressional candidates. *"" "state party committees are subject to sep

arate spending limits for Senate and House gene

al election candidates in their respective state

Within a state, all expenditures made on behalf o

one candidate by the state party committee an

any subordinate party committee (e.q., count

district, local) are subject to one spending limi

If a state party committee designates a nation

party committee to make its coordinated par

expenditures, the state party committee still r

mains responsible for ensuring that the limit 

not exceeded.
FEDERAL ELECTION COMIVlISSION

CHART I

VOTING AGE POPULATION BY STATE

March 1987

Spending Limits for Presidential Nominees

A national party committee' may also make

coordinated party expenditures on behalf of the

party's Presidential nominee in the general election. National party committees may use the

statutory formula below to determine what the

spending limits would be if the election were held

in 1987. This informal estimate can then be

adjusted when 1988 information becomes

available.

Presidential Candidate: $.02 x the VAP of

the U.S., multiplied by COLA."

IV. Coordinated Party Expenditure

Limits In 1987 Special Elections

The 1987 COLA is 2.223. By using this figure

in the formulas given above, the FEC has now

determined the 1987 party expenditure limits, as

follows.

o House of Representatives Candidate in state

with more than one district: $22,230.'"

o House of Representatives Candidate in state

with only one representative: $44,460 or $.02 x

VAP in the state, multiplied by 2.223 (1987

COLA), whichever is greater.

o Senate Candidates: $44,460 or $.02 x VAP

multiplied by 2.223 (1987 COLA), whichever is

greater.

The FEe will send reporting notices to party

committees in those states holding special elections during 1987.

V. How To Obtain More Information

The 1988 spending limits will be published in

the Record during the first quarter of 1988.

Questions and requests for more information may

be addressed to: The Information Services Division, FEC, 999 E Street, N.W., Washington, D.C.

20463; 800/424-9530 or locally 376-3120.

*In the Presidential elections, only the national committee may make coordinated expenditures

on behalf of the party's Presidential nominee.

Separate spending limits apply to expenditures

made by national party committees for Congressional and Presidential nominees. If the national

committee designates a state or subordinate

party committee to make its Presidential or Congressional expenditures, the national committee

nevertheless remains responsible for ensuring that

the limit is not exceeded.

**In 1987, this amount is estimated to be

$7,905,299.22, but is SUbject to adjustment based

on 1988 information.

* **This limit also applies to candidates for

Delegate or Resident Commissioner in American

Samoa, the District of Columbia, Guam, Puerto

Rico and the Virgin Islands.

8

State

Alabama

Alaska

Arizona

Arkansas

California

Colorado

Connecticut

Delaware

Florida

Georgia

Hawaii

Idaho

Illinois

Indiana

Iowa

Kansas

Kentucky

Louisiana

Maine

Maryland

Massachusetts

Michigan

Minnesota

Mississippi

Missouri

Montana

Nebraska

Nevada

New Hampshire

New Jersey

New Mexico

New York

North Carolina

North Dakota

Ohio

Oklahoma

Oregon

Pennsylvania

Rhode Island

South Carolina

South Dakota

Tennessee

Texas

Utah

Vermont

Virginia

Washington

West Virginia

Wisconsin

Wyoming

'vblume 13, Number 

VAP

(in thousand

2,938

358

2,405

1,728

19,949

2,396

2,438

475

9,071

4,422

773

682

8,471

4,013

2,095

1,792

2,715

3,150

871

3,359

4,480

6,675

3,075

1,842

3,733

588

1,154

740

769

5,761

1,023

13,437

4,740

484

7,905

2,379

1,990

9,031

751

2,460

503

3,572

11,792

1,046

401

4,337

3,271

1,415

3,508

348
FEDERAL ELECTIOI\J COMMISSION

Volume 13, Numbe

Mall Lists. The Commission has also perm

ted under certain circumstances the sale of ma

ing lists. In Advisory Opinion 1979-19, the FE

stated that a political committee may sell 

contributor list to corporations, unions, cand

dates and other political committees. A cont

bution does not result when a mailing list is so

at the "usual and normal charge." In anoth

advisory opinion, the Commission said that 

committee could sell its mailing list (on comput

tape) for the "usual and normal charge" to 

corporation without the receipts being consider

a contribution. AO 1981-53.

The Commission has also allowed the prin

pal campaign committee of a Presidential cand

date to transfer its mailing list, free of charge, 

the national committee of his party. The transf

was not a contribution since it was viewed as t

equivalent of the committee's excess campai

funds. AO 1981-11. See also AOs 1982-41 a

1981-46 and the article "Mailing Lists" on page 

of the December 1985 Record.

Sale of Campaign Property. Normally, when 

political committee sells its property, t

purchase price is considered a contribution to t

committee. In several advisory opinions, howev

the Commission has said that a candidat

campaign committee may sell certain types 

campaign assets, and the purchase is n

considered a contribution to the committee pr

vided the materials are sold at the "usual a

normal charge." as defined in 11 CFR 100.7(a)

(iii)(B). AD 1985-1. See also AO 1986-14.

L Sale of Committee Assets

continu

AFTER THE ELECTION:

WINDING DOWN

Introduction

The Commission frequently receives inquiri

from candidate committees regarding debt settl

ment and termination procedures. In particula

committees have had questions about the dispos

of their assets. In response to those question

the following article discusses relevant Comm

sion Begulations and advisory opinions. For fu

ther information, the reader should refer to t

regulations and opinions cited, bearing in mi

that an advisory opinion applies only to those 

the same circumstances as the person requesti

the opinion.

9

19

495

75

2,038

64

VAP

(in thousands)

March 1987

"In. any given year, COLA is based on

statistics pertaining to the previous year, using

1974 as the base year.

*",Number multiplied by statutory limit to

obtain spending limit for that year.

District of Columbia

&: Territories

American Samoa

District of Columbia

Guam

Puerto Rico

Virgin Islands

CHART I

VOTING AGE POPULATION BY STATE

CHART n

House

Year'" COLA·'" Spending Limit

with two or more

districts

1975 $10,000

1976 1.091 10,910

e 1977 1.154 11,540

1978 1.229 12,290

1979 1.323 13,230

1980 1.472 14,720

1981 1.671 16,710

1982 1.844 18,440

1983 1.957 19,570

1984 2.020 20,200

1985 2.106 21,060

1986 2.181 21,810

1987 2.223 22,230
March 1987 FEDERAL ELECTION COMMISSION

Sale of Fundraising Materials. By contrast,

the sale of a com mittee asset originally purchased

as a fundraising device results in a contribution to

the committee. In Advisory Opinion 1979-76, for

example, the Commission prohibited a political

committee from selling books to a corporation

because the committee had used the books as

fundraising items. The sale would have resulted

in a prohibited corporate contribution to the committee.

Commercial Ventures. The Commission has

also taken the position that when a sale is part of

an ongoing commercial venture, producing revenue for the campaign, the transaction results in

a contribution to the committee. AO 1983-2.

n. Receiving Contributions

After the General Election

Contributions Designated for Debts. Candidates may receive contributions after the general

election to retire either primary or general election debts, provided the donor designates the

contribution for the specific debt being retired

(primary or general); and the contribution does

not exceed net outstanding debts.* Such contributions count against the contribution limits applicable to the designated election and the year in

which the election was held. 11 CFR 110.1(a)(2).

Undesignated Contributions. Undesignated

contributions made after the general election are

presumed to be for a future primary election and

count against the limits applicable to the future

election. 11 CFR 110.1(a)(2).

m. Debt Settlement

If a candidate or committee fails to pay a

campaign debt in a timely fashion consistent with

normal business or trade practice, the debt in

effect becomes a contribution made by the creditor to the candidate or committee, unless the

creditor has made a commercially reasonable attempt to collect the debt. 11 CFR 100.7(a)(4) and

114.10(c). Contributions made under such circumstances may violate the Act. For example, if a

committee indebted to a corporation fails to

pay the debt, the debt may result in a prohibited

contribution from the corporation. Or, as another

example, continued nonpayment of a debt owed to

a person who may lawfully make contributions

may caus~ the creditor to exceed the Act's $1,000

per election contributor limit.

Debt Settlement Statement:. If a debt owed

to a creditor, either corporate or noncorporate, is

settled for less than the amount owed, the debtor

*Debts and obligations owed by a reporting

political committee after deducting cash on hand

and other assets.

10

Volume 13, Number 

(committee) must file a debt settlement stat

ment with the FEC. This statement is subject 

Commission review and must include: 

o The steps taken by the committee to pay th

debt;

o The ste s taken by the creditor to obtain pa

ment of the debt;

o The terms of the settlement; and

o An indication that the creditor is in agreeme

with the terms of the settlement.

After the Commission determines that th

proposed debt settlement would not result in 

violation of the Act or Commission Regulation

the agency will notify the committee that it m

stop reporting the debt, provided it has disclose

the final payment made to the creditor.

Note that, when a creditor and committ

disagree on the amount that the committee act

ally owes, but later reach an agreement on th

correct amount of the debt, a debt settleme

statement is not required provided the committ

pays the agreed-upon debt. Nor is a stateme

necessary if the amount originally reported 

owed to a creditor is later reduced because th

original amount was an estimate that exceede

the actual cost to the com mittee for the goods 

services. Under these two circumstances, th

committee is not required to submit a stateme

but must report any change in debt status o

Sehedule D as an amendment to its report. FE

Directive 3, July 22,1982.

Rules for Corporate Creditors. A corpora

creditor may not forgive debts "for less than th

amount owed" unless the creditor and debtor hav

treated the debt in a commercially reasonab

manner. This means that:

o Credit was extended "in the ordinary course 

business" with terms SUbstantially similar 

those granted to nonpolitical debtors of simil

credit risk;

o The debtor has made all reasonable efforts 

retire the debt; and

o The creditor has pursued remedies in a mann

similar to those used to seek payment fro

nonpolitical debtors. 11 CF R 100.7(a)(4) an

114.10.

IV. Termination of Political Committees"

Who is Eligible to Terminate.

o A political committee is eligible to termina

its registration (and reporting obligation) on

when all its debts and obligations have bee

extinguished and after it no longer intends 

receive any contributions or make an

expenditures.

'"Excerpted, in part, from the FEe Campaig

Guide for Congressional Candidates and Comm

tees, June 1985.
11

Political Committees

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

a registered committee must, by law, be made in writing as an amendment to FEC Form 1

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

the FEC, as appropriate.

Volume 13, Number 

OPINIONS

1986-37: Presidential candidate appearances 

convention of nonprofit corporation, 1:6

1986-38: Individual's financing of media ads t

promote conservative candidates, 1:7

1986-39: Excess campaign funds used to estab

lish trust fund for minor, 2:3

1986~O: Corporate donations to state part

committee's building fund, 2:3

1986-41: Trade association's plan to compensa

employees who make contributions, 2:4

COURT CASES

FEe v; Americans for Jesse Jackson, 2:9

FEC v. Citizens Party, 1:8; 2:8

FEe v, Congressman Charles E. Rose, 2:7

FEC v, John R. Clark, Jr., 2:8

FEC v, Jolyn Robichaux, et al., 2:9

FEC v, MCFL, 2:4

Common Cause v, FEC (fourth suit), 2:6; fift

suit, 2:9

This cumulative index lists advisory opinion

court cases and 800 Line articles published in th

Record during 1987. The first number in th

citation refers to the "number" (month) of th

Record issue; the second number, following th

colon, indicates the page number in that issue.

March 1987 FEDERAL ELECTIOI\J COIVlMISSION

o A principal campaign committee is eligible to

terminate only when it has satisfied these same

requirements and when all the debts of other

authorized committees have been extinguished.

11 CFR 102.3.

Other Subscribers

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

address, are asked to provide the following information:

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

2. Old address.

3. New address.

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

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

guarantee that your subscription can be located on the computer.

CHANGE OF ADDRESS

How to Terminate. Political committees may

terminate their reporting status at any time by

filing a Termination Report. It may be filed on

FEC Form 3 (or Form 3X) or by a written

statement containing the same information. 11

CFR 102.3(a). The Termination Report must disclose:

o All receipts and disbursements not previously

reported, including an accounting of the retirement of all debts; and

o The disposition of all residual funds.

After the Commission has reviewed the

committee's Termination Report and determined

that the committee meets the termination

requirements, the agency notifies the committee.
Official Business

FEDERAL ELECTION COM MISSION

999 E Street,NW

Washington, D.C. 20463

Volume 13, Numoo- 

First Class Mail

Postage & FeesPaid

FEe

Washington, D.C.

PermitNo. G-31

March 1987 FEDERAL ELECTION COMMISSION