Volume 12, Num

cont

,

COURT CASES

10 Gramm v. FECi FEC v. Gramm

10 FEC v. Mortgage Attorneys PAC

10 New Litigation

COMMISSIONERS

1 New Officers Elected

REPORTS

1 Primary Reporting Deadlines

4 Election Year Reporting

REGULATIONS

6 Notice of Inquiry on

"Soft Money" Issue

7 ADVISORY OPINIONS

STATISTICS

8 1984 Campaign Statistics

on Computer Tapes

800 LINE

8 Transfer of Candidate Funds

from State to Federal Committee

TABLE OF CONTENTS

PRIMARY ELECTION REPORTS DUE IN 198

The chart on the following pages pro

filing dates for primary election report

during 1986. Note, however, that primary ele

dates are subject to change.

During 1986, reporting forms and addi

information will be sent to all registered co

tees. Questions and requests for additional 

should be addressed to the Information Se

Division, Federal Election Commission, Wa

ton, D.C. 20463; 202/523-4068 or call tol

800/424-9530.

Mr. McGarry graduated cum laude from 

Cross College in Massachusetts in 1952, did 

uate work at Boston University and earned a 

Doctor degree in 1956 from Georgetown 

Center.

FEDERAL ELECTION COMMISSION

999 E Street NW Washington DC 20463

FEC ELECTS NEW OFFICERS

On December 17, 1985, the Federal, Election

Com mission unanimously elected Joan D. Aikens

as Chairman and John Warren McGarry as Vice

Chairman to serve one-year terms commencing

January 1, 1986. Mrs. Aikens succeeded Commissioner McGarry in the Chairmanship. Mr.

McGarry succeeded Mrs. Aikens as Vice Chairman.

Mrs. Aikens, a Republican, is one of the

original members of the Commission. She previously served as FEC Chairman between May 1978

and May 1979. Before serving on the Commission,

Mrs. Aikens was vice president of Lew Hodges/

Com munications, a public relations firm located

in Valley Forge, Pennsylvania. From 1972 until

1974, she was president of the Pennsylvania Council of Republican Women and served on the board

of directors of the National Federation of Republican Women. She served as alternate delegate-atlarge to the 1972 Republican National Convention

and, at the time of her appointment to the

Com mission, she was a member of the Pennsylvania Republican State Committee. She has been

active in a variety of other volunteer organizations.

A native of Delaware County, Pennsylvania,

Mrs. Aikens received her B.A. and honorary Doctor of Laws degree from Ursinus College,

Collegeville, Pennsylvania.

Mr. McGarry, a Democrat, was first appointed to the Commission in 1978 by President

Carter. In 1983, he was named to serve a second

term, which is due to expire on April 30, 1989. He

was Chairman of the Commission in 1981 and

1985. Before serving on the Commission, Mr.

McGarry served as special counselon elections to

the Committee on House Administration of the

U.S. Congress from 1973 to 1978. Prior to that, he

combined private law practice with service as

chief counsel for the Special Committee to Investigate Campaign Expenditures of the U.S. House

of Representatives. (By special resolution, Congress recreated this committee every two years,

through 1972, to oversee House elaetlons.) From

1959 through 1962, he was an Assistant Attorney

General of Massachusetts.

January 1986

•

•
January 1986 FEDERAL ELECTION COrvlrvllSSION Volume 12, Number 

PRIMARY ELECTION REPORTS 12-Day Pre-Election Report

CON GRESSIQNAL

Mailing Date (if

Date of Closing Date sent by registered Filing

State or Territory Election of Books or certified mail) Date

Alabama* June 3 May 14 May 19 May 22

Runoff June 24 June 4 June 9 June 12

Alaska* August 26 August 6 August 11 August 14

American Samoa ** November 4 October 15 October 20 October 23

Runoff*** November 18 October 29 November 6 November 6

Arizona* September 9 August 20 August 25 August 28

Arkansas * May 27 May 7 !I~ay 12 Tl1ay 15

Runoff*** June 10 May 21 May 29 May 29

Cali fornia * June 3 May 14 May 19 lV!ay 22

Colorado* August 12 July 23 July 28 July 31

Connecticut * September 9 August 20 August 25 August 28

Delaware September 6 August 17 August 22 August 25

District of September 9 August 20 August 25 August 28

Columbia **

Florida* September 2 August 13 August 18 August 21

Runoff September 30 September 10 September 15 September 18

Georgia* August 12 July 23 July 28 July 31

Runoff September 2 August 13 August 18 August 21

Guam** September 2 August 13 August 18 August 21

Hawaii * Septe mber 20 August 31 September 5 September

ldaho* May 27 r,fay 7 May 12 ~"ay 15

Illinois * March 18 February 26 March 3 r,!Jarch 6

Indiana * May 6 April 16 April 21 April 24

lowa* June 3 May 14 May 11':l l\~ay 22

Kansas* August 5 July 16 July 21 July 24

Kentucky* May 27 May 7 May 12 May 15

Louisiana * September 27 September 7 September 12 September 15

Generat November 4 October 15 October 20 October 23

Maine June 10 ~'Tay 21 May 26 May 29

Maryland * September 9 August 20 August 25 August 28

Massachusetts September 16 August 27 September 1** * * September 4

Michigan August 5 July 16 July 21 July 24

Minnesota September 9 August 20 August 25 August 28

Mississippi June 3 May 14 May 19 May 22

Runoff June 24 June 4 June 9 June 12

Missouri* August 5 July 16 July 21 July 24

Montana June 3 May 14 May 19 May 22

Nebraska May 13 April 23 April 28 May I

2
January 1986 FEDERAL ELECTION COMMISSIOI\J Volume 12, Num

• PRIMARY ELECTION REPORTS 12-Day Pre-Election Report

CONGRESSIONAL

Mailing Date (if

Date of Closing Date sent by registered Filing

State or Territory Election of Books or certified mail) Date

Nevada* September 2 August 13 August 18 August 21

New Hampshire* September 9 August 20 August 25 August 28

New Jersey June 3 May 14 May 19 May 22

New Mexico June 3 May 14 May 19 May 22

New York* September 9 August 20 August 25 August 28

North Carolina" May 6 April 16 April 21 April 24

Runoff June 3 May 14 May 19 May 22

North Dakota * June 10 May 21 May 26 May 29

Ohio * May 6 April 16 April 21 April 24

Oklahoma'" August 26 August 6 August 11 August 14

Runoff September 16 August 27 September 1**** September 

Oregon * May 20 April 30 May 5 May 8

Pennsylvania '" May 20 April 30 May 5 May 8

Rhode Island September 9 August 20 August 25 August 28

Sou th Caroli na '" June 10 May 21 May 26 Nlay 29

RWlOff"''''''' June 24 June 4 June 12 June 12

South Dakota * June 3 May 14 May t9 ~1ay 22

Runoff*** June 17 May 28 June 5 June 5

Tennessee August 7 July 18 July 23 July 26

Texas May 3 April 13 April 18 April 21

Runoff June 7 May 18 May 23 May 26

Utah'" August 19 July 30 August 4 August 7

Vermont* September 9 August 20 August 25 August 28

Virginia June 10 May 21 May 26 '1ay 29

Virgin Islands** September 9 August 20 August 25 August 28

Washing ton * September 16 August 27 September 1** ** September 

West Virginia May 13 April 23 April 28 l\~ay 1

Wisconsin* September 9 August 20 August 25 August 28

Wyoming August 19 July 30 August 4 August 7

•

*States holding Senate races in 1986.

**The, District of Columbia and the- U.S. territories of American samoa, Guam and ,the VirqinIsland

will each hold an election for. Delegate to the U.S. House of Representatives.ln,l,Q88, Puerto-Rico. w

hold its next election for Resident Commissioner to the U.S. House of Representatives•

***Comrnitteesinvolved in.the runoff. elections held in·Arkansas"American,samoa., South Carolina a

South Dakota may use the filing date as the mailing date for their 12-dav pre-runoff election renort

****Even though the mailing date for the report falls on a holiday, the report must he received by

the filing date.

3
January 1986 FEDERAL ELECTION COMMISSION

ELECTION YEAR REPORTING

The following paragraphs explain the reporting schedule for the various categories of filers

during the 1986 election year. Accompanying

charts on page 5 list the filing dates for reports

required during 1986. Filing dates for primary

election reports are listed separately on pages 2

and-S,

Congressional Candidates

Active in 1986 Elections

During 1986, principal campaign committees

of candidates active in 1986 elections are required to file pre-primary and pre- and postgeneral election repor-ts, as appropriate. They

must also file quarterly reports. (For filing dates

of reports, see page 5 below). In addition, any

contribution of $1,000 or more received by the

candidate's committee between 2 and 20 days

before an election must be reported in writing by

the recipient committee within 48 hours after it

is received. 11 CF R 104.5(f).

If the candidate has more than one authorized committee, the principal campaign committee must also file a consolidated report, FEe

Form 3Z. For details, see page 14 of the Caml2aign Guide For Congressional Candidates and

Committees or 11 CFR 104.3(f).

Congressional Candidates

Not Active in 1986 Elections

The principal campaign com mittees of candidates who will not be active in 1986 elections

(Le., com mittees authorized by candidates seeking election in future years or com mittees which

were active in previous elections and have outstanding debts) must continue to report semiannually. (For filing dates of reports, see page 5

below.}

Note that campaigns with more than one

authorized committee must also file a consolidated report. (See active Congressional Campaigns above.)

Presidential Committees

The principal campaign committees of Presidential candidates are required to report on either

a monthly or quarterly basis during 1986. The FEC

requests that Presidential com mittees which

change their reporting schedule during 1986 notify

the agency of their intention in writing.

Volume 12, NumtB

Note that campaigns with more than o

authorized committee must also file a conso

dated report. (See Active Congressional Cam

paigns above).

Parties and PACs

All party committees and PACs (i.e., sep

rate segregated funds and nonconnected comm

tees) are required to file on either a quarterly 

a monthly basis in 1986. (The reporting schedul

for quarterly and monthly filers are detailed b

low.)

Those com mlttees that choose to file qua

terly must also file a post-general election repo

In addition, quarterly filers that make contrib

tions or expenditures to support specific cand

dates in 1986 elections must also file appropria

pre-election reports (primary, general or both) 

their financial activity has not been previous

disclosed. (For filing dates of reports, see below

Com mittees which file on a monthly schedu

must file pre- and post-general election reports 

lieu of their November and December month

reports, and a year-end report, due Januar)l 3

1986.

Any committee that plans to change its r

porting schedule (from monthly to quarterly 

from quarterly to monthly) must notify the Com

mission of its intention. The committee may no

fy the Commission by submitting a. letter with t

next report due under its current reporting sche

ule. A committee may not change its filing fr

quency more than once a year. 11 CF R 104.5 (c).

Note that any independent expenditures a

gregating $1,000 or more and made between 2 a

20 days before an election must be report

within 24 hours after the expenditure is made.

WHERE REPORTS ARE FILED

Committees must file all reports and stat

ments simultaneously with the appropriate feder

and state officials. 11 CFR 108.5.

Filing with the Federal Government

a The principal campaign com mittees of Hou

candidates and committees supporting or oppo

ing only House candidates file with the Clerk 

the House, Office of Records and Registratio

1036 Longworth House Office Building, Was

ington, D.C. 20515. 11 CF R I04.4(c}(3) an

105.1.

The Record is publishec by the Federal Election Comm ission, 1325 K Street, N.W., Washington,

D.C. 20463. Commissioners are: Joan D. Aikens, Chairman; John Warren McGarry, Vice Chairman;

Lee Ann Elliott; Danny Lee McDonald; Thomas E. Harris; Thomas J. Josefiak; Jo-Anne L. Coe,

Secretary of the Senate, Ex Officio; Benjamin J. Guthrie, Clerk of the House of Representatives,

Ex Officio. For more information, call 202/523-4068 or toll-free 800/424-9530.

4 
FILING DEADLINES

"'Exception: The pre-election report mu

postmarked no later than October 20, 1986 

three days before the filing date). 11 CFR 

(c)(1)(ii) and (e).

'""'Committees may also have to file pre

post-election reports. See text above.

FEDERAL ELECTION COMfVlISSION

Due Date (a

mailing date 

sen t by regi

tered or cer

fied mail)

April 15

July 15

October 15'

January 31, 

November 4

November 2

December 4

December 4

October l5V

October 20

October 23

Due Date (a

mailing date 

sent by regi

tered or cer

fied mail)

February 20

March 20

April 20

May 20

June 20

July 20

August 20

September 2

October 20

October 23*

December 4

January 31, 

Volume 12, Num

Close of Books

March 31

June 30

September 30

December 31

Period Covered

1/1-1/31

2/1 - 2/28

3/1 - 3/31

4/1 - 4/30

5/1 - 5/31

6/1 - 6/30

7II - 7/31

8/1 - 8/31

9/1 - 9/30

10/1 - 10/15

10/16 - 11/24

11125 - 12/31

Quarter

First

Second

Third

Fourth

(Year-End)

MONTHLY REPORTS

QUARTERLY REPORTS**

Post-Election Report

Closing date of books:

Mailing date:

Due date:

Report

February

March

April

May

June

July

August

September

October

Pre-Election

Post-Election

Year-End

GENERAL ELECTION

Date of Election

Pre-Election Report

Closing date of books:

Mailing date:

Due date:

5

January 1986

Filing with State Governments

a The principal campaign committees of Congressional candidates must file a copy of every

report and statement with the Secretary of

State or the appropriate elections official of

the state in which the candidate seeks federal

office. II CFR 108.3.

a Unauthorized committees making contributions

or expenditures in connection with House and

Senate races file in the state in which the

candidate seeks election. The law requires a

copy only of that portion of the report applicable to the candidatefs) being supported.

Com mittees supporting Presidential candidates

must file in the statels) in which the Presidential committee and donor committee have their

respective headquarters.

HOW TO OBTAIN MORE INFORMATION

During 1986, reporting forms and additional

information will be sent to registered committees. Questions and requests for additional forms

should be addressed to the Information Services

Division, Federal Election Commission, Washington, D.C. 20463; 202/523-4068 or call toll free

800/424-9530.

o The principal campaign committees of Senate

candidates and committees supporting or opposing only Senate candidates file with the Secretary of the Senate, Senate Public Records, 119

D Street, N.E., Washington, D.C. 20510. 11

CF R 104.4(c)(2) and 105.2.

o All other committees, including the principal

campaign committees of Presidential candidates, file with the Federal Election Commission, Washington, D.C. 20463. 11 CPR 105.3 and

105.4.

•

•
January 1986 FEDERALELECnON COrvlMISSION Volume 12, NumOOr 

"SOFT MONEY" ISSUE:

NOTICE OF INQUIRY

On December 18, 1985, the Commission published a notice of inquiry in the Federal Register

which seeks com ments on several factual and

legal issues raised by the use of undisclosed funds

to influence federal elections (t.e., "soft money").

50 Fed. Reg. 51535. In the notice, the agency

announced that, on January 29 and 30, it will hold

a public hearing on the "soft money" issue.

Comments on the notice of inquiry should be

submitted in writing by January 17, 1986, to Ms.

Susan E. Propper, Assistant General Counsel, Federal Election Commission, Washington, D.C.

20463. Those who are interested in testifying at

the public hearing should so indicate on their

written comments.

Since "soft money" is ostensibly raised and

spent to influence state and local elections, the

funds may contain donations that are prohibited

or excessive contributions under the Federal Election Campaign Act (the Act). If these funds are

ultimately used to influence federal elections, a

violation of the Act may occur. In this regard, the

publie " has asked whether or not FEC Regulations: 1) provide for adequate disclosure of the

funds and 2) adequately prevent evasion of the

Act's contribution limits and prohibitions.

In response to these concerns, the Commission's notice of inquiry raises several issues concerning the use of "soft money'' in federal elections.

1. Scope of Activity

To assist the Com mission in assessing the

scope of "soft money" activity, the agency seeks

comments on the extent to which undisclosed

funds are being used by individuals, political committees and organizations (Including political parties, corporations and labor organizations) to influence federal elections.

2. Dual Accounts

FEe Regulations permit organizations to establish separate accounts (or committees) for

federal and nonfederal election activity and disclose only those funds raised and spent by the

federal account (or com mittee). Further, the regulations permit organizations to allocate administrative expenses between their state and federal

accounts. The notice asks whether these rules

"'See particularly Common Cause's rulemaking petition, filed November 6, 1984, which raises

several issues concerning the use of /lsoft money"

in federal elections.

6

adequately ensure public disclosure of funds o

tensibly raised for state and local elections b

ultimately used to influence federal elections? 

3. Party Activities

FEC Regulations permit state party commi

tees and local party committees and organiz 

tions* to engage in certain activities which ben

fit federal candidates but which are exempt fro

the definitions of "contribution" and "expend

ture." See 11 CPR IOO.7(b)(9), (I5) and (17). If th

party committee engages in these activities 

behalf of both federal and nonfederal candidate

only that portion of the payments allocable 

federal candidates must be paid from funds pe

missible under the Act. In this regard, the noti

asks:

o Which party activities should be considere

federal-election related and therefore SUbje

to the Act?

o Apart from the exempted activities, which pa

ty activities are sufficiently unrelated to sp

cific campaigns for federal office to be co

sidered general party building activities, beyon

the Act's purview?

4. Possible Action by the FEe

The notice also seeks comments on:

o Whether the agency should initiate a rulema

ing to address some or all of the issues raise

by the use of undisclosed funds to influen

federal elections;

o The extent to which proposed rules would rai

issues involving the Act's preemption of sta

laws; and

o Whether any of the issues raised by the use 

"soft money" in federal elections should b

addressed by amending the Act rather than b

revising FEC Regulations.

*Party organizations (not registered with th

FEe) have no reporting obligations, but they mu

use permissible fundS to finance exempt activiti

on behalf of federal candidates. When an W1reg

tered local party organization spends more th

$5,000 a year for exempt activities, it mu

register and report as a political committee.
FEDERAL ELECTION COMrvllSSION

•

January 1986

ADVISORY OPINION REQUESTS

The foflowing chart lists recent requests for

advisory opinions. The full text of each AOR is

available to the pub lie in the Comrn ission's Office

of Public Records.

AOR Subject

1985-37 Affiliation of local chambers of commerce with state chamber; local chambers as collecting agents for state chamber's federal PAC. (Date made public:

November 19, 1985; Length: 6 pages,

plus 26-page supplement)

1985-38 PAC established by Congressman exclusively for support of state and local

candidates. (Date made public: November 26, 1985; Length: 1 page, plus 5-page

supple ment)

1985-39 Bank advertisement in political club's

journal. (Date made public: November

26, 1985; Length: 1 page, plus 4-page

supplement)

1985-40 Expenditures by multicandidate committee on behalf of former Senator testing

the waters for 1988 Presidential candidacy. (Date made public: November 26,

1985; Length: 7 pages)

ADVISORY OPINIONS: SUMMARIES

An Advisory Opinion (AO) issued by the Commission provides guidance with regard to the

specific situation descrtoed in the AOR. Any

quali fied 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 1985-26: Corporation's Distribution of

Employee's Political Message

General Mills, Inc. may distribute to its employees a message prepared by an employee that

discusses the relative merits of various federal

candidates, provided the employee reimburses the

corporation within a commercially reasonable

time for the usual and normal charge of the

distribution. (The usual and normal charge would

7

Volume 12, Numbe

be the commercial hourly or piecework charge 

such services at the time they are rendere

Distribution services would include printing 

bets, affixing them to written material and dis

buting the literature. 11 CPR 100. 7(a)( 1)(iii

and 114.9(c).

General Mills has a policy of providing s

services to its employees. In this case, however

the corporation distributed the employee's po

cal message at no cost, or at less than the u

cost, it would be making prohibited expenditu

to influence the election of candidates named 

the message. 11 CPR lOO.8(a)(1)(iv)(A). (D

issued: November 14, 1985; Length: 3 pages)

AO 1985-32: Proceeds of Congressional

Reception Beyond Act's Purview

To defray costs of a Congressional reception 

plans to hold in conjunction with its conferen

the Tenth International Congress of Essen

Oils, Fragrances and Flavors will charge a no

nal fee to reception attendees. Since recept

proceeds will not be used to support the ree

tion of those House and Senate members in att

dance, the proceeds and expenses of the ev

would not be considered reportable "contr

tions" or "expenditures" under the election l

provided:

o Contributions are not solicited to, or accep

by, Congressional members attending the 

ception; and

a Communications at the reception do not 

pressly advocate the members' election or 

feat.

The Commission expressed no opinion on 

plicable House and Senate rules or tax laws 

cause they are beyond its jurisdiction. (D

issued: November 14, 1985; Length: 2 pages)

AO 1985-33: Personal Loans to Candidate

Intended for Campaign

When Representative Carliss Collins accepts p

sonal loans for use in her reelection campai

and proceeds to loan the funds to her princ

campaign committee, she acts as the committ

authorized agent. 2 U.S.C. S432(e)(2); 11 C

101.2 and 102.7(d). Accordingly, the commi

must report and itemize these receipts as lo

from the original lenders, rather than as lo

made by Representative Collins from perso

funds. Similarly. in repaying the loans, the C

mittee must report and itemize them as disbu

ments to the original lenders. 11 CFR 104.3(a

and (4); I04.3(b)(2) and (4); and 104.3(9).

The Commission noted that, since the or

nal lenders are individuals rather than banks, 

loans would be considered contributions to 

extent of the unpaid balance. As such, they wo

be subject to the Act's limits and prohibitions 

contributions. (Date issued: November 22, 19

Length: 3 pages)

contin
January 1986 FEDERAL ELECTION COMMISSION Volume 12, NumlH

AO 1985-34: Nonconnected PAC's Use or

Proceeds from Life Insurance

Policy on its Chairman

If the National Conservative Political Action

Committee (NCPAC), a nonconnected political

committee, purchases a life insurance policy for

NCPAC's chairman, proceeds from the policy

would not constitute contributions from the insurance company to NCPAC, provided the company:

o Charges the usual and normal premium for the

policy; and

o Issues the policy in the normal course of business and in compliance with all applicable laws

and regulations. 11 CPR 100.7(a)(l)(iii).

Accordingly, NCPAC may use proceeds from the

policy for any lawful purpose, including expenditures and contributions made for federal elections.

The Commission noted that, since NCPAC

had not stated whether the policy would be used

as collateral for loans or for other purposes, the

agency did not address any issues that might arise

under such circumstances. (Date issued: November 22, 1985; Length: 2 pages)

AO 1985-35: SoIieitability of Board Members of

Employee-Qwned Corporation

The Weirton Steel Corporation (Weirton) is wholly

owned by the corporation's employees. It's directors, however, are not employee/shareholders.

Nevertheless, those directors who receive an

annual director's fee may be solicited for contributions to the Weirton Political Action Committee (the PAC), because they are considered executive personnel of the corporation.

For purposes of the Act and FEC Regulations, the board directors are considered solicitable executive personnel because they are compensated for their services on a salaried, rather

than an hourly, basis. Their eligibility for PAC

so lie itations is not affec ted by the fact that:

1) their income is not subject to the federal

withholding tax or 2) Weirton employees own al]

the shares in the corporation. (Dated issued:

November 22, 1985; Length: 4 pages)

1984 CAMPAIGN STATISTICS

AVAILABLE ON COMPUTER TAPES

During December, the Commission announced

the availability of computer tapes which contain

final information on the 1984 campaign finance

activities of candidates for the U.S. Senate and

House, the Democratic and Republican parties

and political action committees (PACs).

The prices for the tapes are: $70 for U.S.

Senate and House information; $55 for Dernoera8

tic and Republican party committee informat

and $70 for PAC information. The tapes may 

purchased from the FEC's Data Development S

terns Division. For further information con

Bob Biersack by calling 202/376-5230.

This information has also been made av

able in published form. The five-volume stu

FEe Reports on Financial Activity, 1983-84, F

Report, may be purchased at $15 per volu

Separate volumes include information on: Ho

and Senate races; party and PAC activity, S

mary information; state and local party activ

PAC activity of corporations and labor or

nizations; and PAC activity of nonconnected 

ganizations, trade/membership/health organ

tions' cooperatives and corporations with

stock.

Checks, made payable in advance to the F

should be sent to the FECls Office of Pu

Records, Washington, D.C. 20463.

800 LINE

Transfer of Candidate Funds from State to 

Federal Committee 

Frequently, state candidates decide to 

come candidates for Federal office. From time 

time, they inquire as to whether they can use

their initial source of capital, funds contribu

to their State election committees. The follow

material addresses this matter.

General Rule

Candidates for Federal office are required 

authorize one or more committees to rece

contributions and make expenditures on their 

half. Authorized com mittees of the same can

date may transfer unlimited funds between e

other.

In the case of a Federal candidate who 

previously a candidate for State office, unlimi

transfers may occur, under certain circumstanc

between the candidate's State committee 

his/her Federal committee. Any funds transfer

from the State to the Federal committee, h

ever, are subject to the limitations and proh

tions of the Federal Election Campaign Aet (

Act). This means that State funds which incl

prohibited or excessive contributions may not 

transferred to the Federal committees.

What limitations and prohibitions apply to eon

butions to Federal candidates?

1. Contribution limits may be summarized as 

lows:
FEDERAL ELECTION COMMISSION

•

January 1986

Individual - $1,000 per candidate per election

Political Committee - $.1,000 per candidate, per

election

Multicandidate Committee* - $5,000 per candidate, per election.

2. The following sources are prohibited from financing Federal elections: corporations, labor

organizations, national banks, Federal government contractors and foreign nationals.

How can a State candidate committee demonstrate that the funds it transfers to the Federal

committee are from permissible sources? The

State Committee may:

1. Establish a separate account containing only

those funds which comply with the limitations

and prohibitions of the Act; or

2. Demonstrate through a reasonable accounting

method that the State committee has received

sufficient funds that are permissible under the

Act to make the transfer. 11 CFR 102.5(b).

How can the State committee eliminate impermissible funds from its transfer to the Federal

committee? The State committee eliminates impermissible funds by checking its records to determine the source and amount of its contributions. Suppose, for example, the State committee

has $8,000 in its bank account and wishes to

transfer that entire amount to tile Federal committee. The State committee would examine the

records concerning the donations (aggregating

$8,(00) most recently received in order to determine whether or not they were permissible. If any

of the donations came from prohibited sources or

exceeded contribution limits, they could not be

transferred to the Federal committee. The amount of the transfer would have to be reduced

accordingly. See, for example, AOs 1984-46 and

1985-2.

If the candidate's State committee transfers funds

to the Federal committee, do contributions to the

State committee count against the eontributors'

respective limits for the candidate's Federal election? Yes, if the original contributions to the

State committee were made during the same

election cycle in which the transfer was made to

the Federal committee. AO 1982-52.

Who is responsible Cor making sure that the transfer does not cause eontributors to both the State

and Federal committees of the same candidate to

exceed their limits? The State committee, the

Federal committee and the treasurers of both.

*A multicandidat~ committee is any political

committee with more than 50 contributors that

has been registered for at least 6 months and,

with the exception of State party committees, has

made contributions to 5 or more candidates for

Federal office.

9

Volume 12, Numt

The committees must aggregate any contribu

that might be transferred with contributions m

by the same contributor to the federal commi

during the same election cycle. If the aggrega

indicates that this particular transfer would ca

a contributor to exceed his or her limits for 

candidate, the transfer would have to be redu

by the total amount of the excess.

Do the contribution limits apply to funds raise

the State committee in a previous election c

but transferred during the current election cy

No. Funds raised by a State committee durin

previous election cycle (e.g., during 1983-84) 

later transferred to the Federal account w

not count against an individual contributor's 

rent limits for that candidate (e.g., 1985-86). 

1977-24.

Will the transfers from the State to the Fed

committee trigger a registration requirem

They may. If the State committee transfers m

than $l,OOO ina given calendar year to 

Federal committee, it becomes a political c

mittee under the Act. A political committee m

register within 10 days after exceeding the $1

threshold and file reports. To avoid having 

register and report under the Federal law, a S

committee may decide not to transfer more 

$1,000 to the Federal committee. 11 CPR 100.

If the State Com mittee transfers more t

$1,000 and registers under the Federal elec

law, would either committee have to disclose 

original contributors of the transferred fun

Yes. The State Committee (whieh has just 

come a registered political com mittee under 

Act) would be responsible for disclosing 

itemized information about contributors on 

first report. On the disbursement side, it w

show a transfer out to the candidate's Fed

committee.

Would the candidate's Federal committee 

have to disclose the contributors of the tr

ferred funds? No, but it would report, as "mis

laneous" receipts, the full amount of the tr

ferred funds. Detailed itemization of the con

butors would not be required. AOs 1985-2 

1984-46.

How long does the State committee (now re

tered under the Act) have to keep reporting? 

State Committee can use its very first repor

its final report if it wishes merely to disclose 

transfer and then cease to be active in Fed

elections. The box on the reporting form should 

checked to indicate that this report is a term

tion report.

contin
January 1986 FEDERAL ELECTION COMMISSION Volume 12, Numbe

Does that mean the State committee no longer

has a reporting obligation under the Act? Hopefully. Reports analysts will review the termination report. The State committee may be required

to provide further information if the termination

procedures are not followed. See 11 CF R 102.3.

Does the State committee, now Federal,. still have

to keep records? Yes. The treasurer must preserve all records and accounts for three years

after the report, to which such records and accounts relate, is filed. II CF R 102.9.

If the State committee only transferred $800 and

therefore did not register, how would the transfer

be disclosed by the recipient Federal committee?

The entire $800 would be disclosed as a "miscellaneous receipt" from the State committee. In addition, the com mittee should include a statemen t

indicating the permissibility of the funds transferred.

GRAMM v. FEe; FEC v. GRAMM

During October 1985, the U.S. District Court

for the Northern District of Texas, Dallas Division, issued two rulings concerning an FEC audit

of the Friends of Phil Gramm, the principal

campaign committee for Texas Senator Phil

Gramm's 1984 Senate campaign. On October 18,

the court granted the FEC's motion to dism iss

Friends of Phil Gramm v. FF.C, a suit filed by the

Gramm Committee challenging tile audit. (Civil

Action No. CA3-85-1164-7) On October 31, the

court determined that the Committee must comply with the FEe's audit. (FEC v. Friends of Phil

Gramm; Civil Action No. CA3-1507-7)

Background

In papers filed with the court, 'Friends of Phil

Gramm (the Committee) alleged that, based on a

complaint filed against the Committee and on

information gathered through internal procedures,

in March 1985 the Commission found "reason to

believe" that the Committee had violated several

provisions of the Federal Election Campaign Act

(the Act). The agency then authorized an audit of

the Committee to investigate whether the alleged

violations had occurred. (The "reason to believe"

finding is a statutory prerequisite to an investigation into possible violations.)

On June 19, 1985, the Gramm Committee

filed a suit in the Northern District of Texas to

enjoin the FEe from auditing the Committee. The

Committee claimed that the Commission had to

IO

begin the audit within the time frame establish

under Section 438(b) of the Act. The Commiss

argued that Section 438(b} (including its ti

limits) was not applicable to the Gramm aud

which had been authorized under Section 437g

(2). The Gramm Committee also contended th

the Commission was required to attempt concil

tion before conducting the audit.

Subsequently, the Commission SUbpoen

certain materials necessary for the audit. W

the Committee refused to comply, the Comm

sion filed a suit which asked the Texas distr

court to enforce the subpoena.

District Court's Rulings

In its memorandum opinion of October 

dismissing the Committee's suit, the court no

that the time limit of Section 438(b) "is inapp

cable to an audit scheduled under §437" and fou

the audit "well within its [§437's) parameter

Rejecting the Committee's claim concerning c

ciliation, the court stated that "the FEC is 

titled to conduct its audit and gather the nec

sary information•.•before it attempts to concili

with the violator." In its October 31 ruling, 

court determined that the Gramm Commit

must comply with the FEC's subpoena.

FEC v. MORTGAGE ATTORNEYS POLITICAL

ACTION COMMITTEH

On August 15, 1985, the U.S. District Co

for the Eastern District of Louisiana approved 

consent order between the Commission and def

dants, the Mortgage Attorneys Political Act

Committee, Inc. (MAPAC), a multicandidate co

mittee, and MAPAC's assistant treasurer, An

Atchley. Defendants acknowledged that they h

violated sections 434(a)(4){A)(iv) and 434(a){4}

of the election law by failing to meet the sta 

tory deadlines for filing the following reports

1981 mid-year report, six 1982 monthly repo

and a 1982 pre-election report.

Defendants agreed to pay a $450 civil pena

within 30 days of the court's order.

NEW LITIGATION

FEe Y. Faith D. Eldredge

The FEe asks the district court to:

o Declare that Eldredge for Congress Committ

the principal campaign committee for Carl

Eldredge's 1984 House campaign, and the Co

mittee's treasurer, Faith Eldredge, violated 

election law by failing to file a quarterly rep

(2 U.S.C. 5434(a)(2)(A)Wi));

o Assess a civil penalty against defenda

amounting to the greater of $5,000 or 

amount equal to 100 percent of the amo

involved in the violation; and
FEDERAL ELECTION COMMISSION

o Permanently enjoin defendants from further

violations of the election law.

U.S. District Court for the District of New

Hampshire, Civil Action No. C-85655D, November

7, 1985.

Volume 12, Numbe

1985-9: Excess Funds for Univer

Programs, 5:5

1985-10: Campaign Loan Liquida

by Candidate's Estate, 5:5

1985-11: Trade Association's Non

llcitab1e Members, 6:4

1985-12: Trade Association's Coll

ting Agents, 6:5

1985"13: Transfers to Successor C

didate's Campaign, 7:5

1985-14: National Party Committe

Media Program, 7:6

1985-16: Prohibited Use of FEC C

tributor Information, 7:6

1985-17: Congressional Scholars

Trust, 8:3

1985-18: Conversion to Federal PA

9:1

1985-19: Purchase of Computer S

tem by Committee and Corpo

tion, 10:3

1985-22: Excess Funds Used for E

ning Attire, 10:3

1985-23: PAC Established by Cor

ration Owned by Partnership w

Federal Contract, 10:4

1985-24: Unincorporated Members

Organization PAC, prohibited, 1

1985-25: Reattribution of Excess

Contributions to Spouse, 11:3

continu

The FEC also asks the court to enjoin NR

ILA and PVF from further violations of the A

and to assess a civil penalty against each orga

zation.

U.S. District Court for the District of C

lumbia, Civil Action No. 85-1018, March 29, 198

FEe v. Frederick Haley

The FEC asks the court to declare that:

o Frederick Haley, et at violated the electi

law by making excessive contributions to t

Ted Haley Congressional Committee, the pri

cipal campaign committee for Theodore Haley

1982 House campaign (2 U.S.C. §441a(a)(I)(A

and

o The Committee and its treasurer, Theodo

Haley, violated the law by accepting the exce

sive contributions (2 U.S.C. §44Ia(f)).

The FEC further asks the court to:

o Assess a civil penalty against each defenda

amounting to the greater of $5,000 or 

amount equal to 100 percent of the amou

involved in the violation; and

o Permanently enjoin defendants from furth

violations of the election law.

U.S. nistrict Court for the Western Distr

of Washingtont Civil Action No. C8511B5

November 7, 1985.

11

1984-58: City's Claim for Feimbursement by Presidential Campaign,

2:3

1984-59: Noncampaign Uses of Campaign Assets, 2:3

1984-60: Campaign Debts Liquidated

through Sale of Real Estate Assets,

3:1

1984-61: Trade Association Solicitation Approvals, 3:2

1984-62: Campaign Firm's Slate Mail

Program, 5:4

1984-63: Savings and Loan Association's Solicitations, 3:2

1985-1: Liquidatlon of Campaign Assets, 4:4

1985-2: State Funds Transferred to

Congressional Campaign, 4:5

1985-3: Contributions to State Campaign by SUbsidiary of Foreign Corporation, 4:5

1985-4: Payments not Honorarium,

4:5

1985-5: Contributions Made Before

but Received After Election, 4:6

1985-6: Affiliated PACs of Local/-

International Unions, 4:6

1985-7: Solicitation of Wholesalers'

Personnel, 5:4

1985-8: Fundraising to Refund Illegal

Contributions, 5:5

This cumulative index lists advisory opinions, court cases and 800

Line articles pubfished in the Record

during 1985. The first number in the

citation refers to the "number"

(month) of the Record issue; the second number, following the colon, indicates the page number in that

issue. .

OPINIONS

1984-16: One Limit for Convention &.

Primary, 1:3

1984-33: Fundralser by Trade Association's Allied Members, 1:3

1984-4,1: Corporate Payments for

Media Ads, 2:1

1984-48: Travel Reimbursements to

State by Senate Campaign, 2:1

1984-52: Refund of Illegal Contributions, 1:4

1984-53: Real Estate Lessors as Federal Contractors, 1:4

1984-54: Reporting/Limits for Candidate Elected in Primary, 1:5

1984-55: Solicitation of Law Firm's

Partners by Bank PAC, 1:5

1984-56: Book Payments &. Honorarium, -1:5

1984-57: Corporate Communications

on Legislation, 2:2

January 1986

FEe v, National Rifle Association of America

The FEC filed a civil action against:

o The National Rifle Association (NRA), an incorporated membership organization;

o The Institute for Legislative Action (ILA),

NRNs lobbying arm; and

o The Political Victory Fund (PVF), NRNs separate segregated fund.

The FEC claims that NRA and ILA violated the

election law by making expenditures, on behalf of

PVF, which influenced the elections of various

federal candidates during 1978, 1980 and 1982.

PVF subsequently reimbursed NRA and ILA for

their respective expenditures.

The FEe asks the court to declare that:

o In advancing corporate funds to federal candidates on PVP's behalf, NRA and ILA made

prohibited corporate contributions, in violation

of 2 U.S. C. §441b(a); and

o In allowing NRA and ILA to make the expenditures, PVF accepted prohibited corporate contribu tions, in violation of 2 U.S.C. §44Ib(a).

•
January 1986 FEDERAL ELECTION COMMISSION Volume 12, NumO

Official Business

FEDERAL ELECTION COMMISSION

1325 K Street, N.W.

Washington, D.C. 20463

FEC v. Liberal Party Federal C

paign Committee, 3:3

FEC v. Massachusetts Citizens 

Life, lnc., 10:7

FEC v. NCPAC, 5:6; second suit, 

FEC v; NRWC; NRWC v, FEC, 1:

FEC v, Kirk Walsh for Con

Committee, 6:3; 11:4

FEC v. Allen Wolfson, 12:8

FEC v, 1985 Victory Fund, 12:8

Golar v. FEC, 12:7

Alwin Hopfmann v, FEC, 7:7; 9:3

LaRouche v, State Board of E

tions, 8:7

Maine Right to Life Committe

FEC, 10:9

National Congressional Club and 

ferson Marketing, Inc. v. FEC, 

NCPAC v, FEC, 10:9

Orloski v, FEC, 2:5

Sierra Club v, FEC, 9:3

First Class Mail

Postage and Fees Paid

Federal Election Commission

Permit Number G-31

COURT CASES

Antosh v. FEC, 2:4

Carter/MondaIe Presidential Committee v, FEC, 12:6

Citizens for Percy '84 v. FEC, 1:6;

12:7

Common Cause v, FEC, 12:7

OCCC v, FEC, 2:6

FCM v, FEC, 6:3

FEC v, Anderson, 2:6; 8:8

FEC v. Committee to Return Stack

to Congress, 8:7

FEC v. John A. Dramesi for Congress, 11:4

FEC v. Furgatch; FEC v, Dominelli,

1:6

FEe v, Gus Savage for Congress '82,

6:3

FEC v; Hemenway for Congress

Committee, 2:6

800 LINE

Foreign Nationals, 5:8

Mailing Lists, 12:6

State and Local Party Activities, 8:4

Supreme Court Rules on 26 U.S.C.

§90 12(f), 4: 1

Use of Pseudonyms, 12:5

Using Excess Campaign Funds, 2:4

1985-27: Contribution limits for corporate PACs before and after affiliation, 12:3

1985-28: Candidate's fundraising rebates from corporation, 12:4

1985-29: Loans as contributions to

candidate, 12:4

1985-30: Candidate committee converted to multicandldate committee, 12:4