•

THE FEDERAL ELECTION

COMMISSION

1325 KStreet NW., Washington, D.C. 20463

•

Volume 7, Number 3

SPECIAL ELECTIONS IN MICHIGAN

Michigan will hold special elections in its Fourth Congressional District to fill the seat vacated by former Congressman David Stockman. The primary election is scheduled for March 24, 1981, and the general election for

April 21, 1981. The principal campaign committees of

candidates running in these elections must follow the same

reporting schedule as that established for an election year.

Thus, they must file pre- and post-election reports and

quarterly reports. All other political committees which

support a candidate in these elections (and which do not

report on a monthly basis) must file pre- and post-election

reports in addition to their semiannual reports.

The principal campaign committees of all candidates on the

ballot in these erections will receive special notices from the

FEC on their reporting requirements and filing dates. All

other committees supporting candidates in the Michigan

special elections should contact the Commission for more

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

toll-free 800/424-9530.

PROCEDURES FOR

FINAL MATCHING FUND PAYMENTS

On January 29, 1981, the Commission adopted procedures for certifying final payments to eligible Presidential

primary candidates during the last matching fund submission period (l.e., the third week of January following

the election year), The new certification procedures differed from those followed throughout the election year in that

the Commission certified the submission after reviewing it.

rather than before. Within 15 days after receiVinga request•

the Commission reviewed the request and certified matching payments for only those contributions that met the

March 

Commission's requirements and were qualified for matc

funds. These procedures eliminated the possibility of 

Commission's overpaying a candidate and having to se

repayment.

By contrast, to expedite the matching fund paym

during the 1980 campaigns, the Commission had certi

initial matching fund payments the same week it rece

requests, before it had time to review the submission 

determine the actual matchable amount. The Commis

had held back, however, a certain percentage of 

requested amount as insurance against possible error

the submission. After a subsequent review of the 

mission, the Commission had adjusted the paymen

reflect the actual value of matchable contributions. 

adjustment was then added to, or subtracted from, 

candidate's next matching fund payment. The Commis

decided this expedited procedure was not needed du

the final matching payment period, since the candidat

longer had an immediate need for campaign funds.

FEC PUBLIC APPEARANCES

In keeping with its objective of making informa

tion available to the public. the Commission accept

invitations to address public gatherings. This colum

lists upcoming scheduled Commission appearance

the name of the sponsoring organization, the locatio

of the event and the name of the Commission

speaker. For additional information on any schedule

appearance. please contact the sponsoring organiza

tion.

4/2-3 Citizens' Research Foundation Panel

on the Federal Election Campaign Act

and Political Reform

Washington, D. C.

Chairman John Warren McGarry

4/9 University of Georgia

Conference on the First Amendment

Athens, Georgia

Charles N. Steele, General Counsel
FEC RELEASES FIGURES ON NONPARTY

COMMITTEE GROWTH

The number of (noncandidate) nonparty political

committees is continuing to grow, according to figures

released by the Federal Election Commission on January

16, 1981. The FEC's semiannual report charts an increase

of more than 500 nonparty political committees during

1980, 'based on figures available in the FEC's computer data

base as of December 31, 1980. FEC figures on the numb

of nonparty political committees date back to 1974, prio

to the "SUNPAC" opinion (AO 1975·23), issued by th

Commission in November 1975, and the 1976 amendmen

to the Act, enacted on May 11, 1976, both of whic

spurred this activity. The 1974 figures showed that 60

committees were in existence in December 1974. By th

end of 1976, that number had risen to 1,146, and, b

January 1981, it reached 2,551.

The graph below plots the growth of nonparty politic

committees between 1974 and 1980. Committees a

grouped by sponsoring organization. The graph does n

reflect the financial activity of these committees.

Number of

Committees·

NONPARTY COMMITTEE GROWTH

2500

2000

1500

1000

500

1974

Total

Corporate

........__---1" Trade/Membership/Health

Nonconneeted

lr---A~~--l.~----'!~---6-~--~:----"Labor

Other

* This graph includes all political committees that are not authorized

by a federal candidate and are not established by a political party.

2
• ADVISORY OPINION REQUESTS

Advisory Opinion Requests (AOR's' pose questions on

the application of the Act or Commission Regulations to

specific factual situations described in the AOA. The following chart lists recent AOR's with a brief description of

the subject matter, the date the requests were made public

and the number of pages of each request. The full text of

each AOR is available to the public in the Commission's

Office of Public Records.

Date Made No.of

ADR Subject Public Pages

1981·5· Congressman's informational 1/21/81

mailing to contributors listed on

opponent's FEC reports.

1981-6 Funds borrowed by federal PAC 1/26/81 2

from affiliated state PACfor

investment.

1981-7 Fundraising by labor organization 1/28/81 2

PAC through saleof membership

Jistand jackets.

1981-8 Candidate's retirement of 2/3/81 2

campaign debts through home

mortgageco-signed by third party.

1981-9 Excessfunds of candidate's 1980 2/3/81

• carnpslqn committee used to retire

debts of 1978 committee.

1981-10 Honoraria paid to government 2112/81 2

employees in installments.

1981-11 PartY use of Presidential candi- 2/11/81

date's rneilmq llst.

1981-12 Earmarkingcontributions for 2/13/81

party committee through PAC's

voluntary payroll deduction plan.

1981-13 Corporate and individual 2/18/81 2

donations to former Senator's

personal legal defense fund.

ADVISORY OPINIONS: SUMMARIES

An Advisory Opinion (AD) issued by the Commis

provides guidance with regard to the specific situa

described in the ADA. Any qualified person who 

requested an AO and acts in accordance with the opin

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

persons may rely on the opinion if they are involved 

specific activity which is indistinguishable in all mate

aspects from the activity discussed in the AD. Those s

ing guidance for their own activity, however, should con

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

qiven here.

AD 1980-128: National Association's Distribution

of Position Paper

to Pro-Business Candidates

Costs incurred by the Chamber of Commerce of the Un

States [the Chamber), a nonprofit corporation, in prepa

a position paper and distributing it to "pro-business" H

and Senate candidates would not be considered a corpo

contribution or expenditure because the paper did 

attempt to influence the general public in connection w

a federal election. The paper, which presented 

Chamber's views on the causes of inflation and m

specific legislative recommendations for remedying th

did not call for the election or defeat of a particular ca

date or party. Rather, it asked candidates to consider 

positions set forth in the paper and to compare them w

their own views. While the paper, which was distrib

shortly before the 1980 general election, might influ

the views of the candidates, it did not constitute a co

bution [i.e., it was not "a thing of value") to the candid

because it was not designed for use in their campaigns.

Noting that advisory opinions may be issued only w

regard to a "specific transaction or activity," the C

mission declined to rule on whether a future distribu

of the position paper (or some modified version of 

would, per se, be exempt from the prohibitions of the 

Specifically, the Commission did not decide whether 

position paper would be exempt from the prohibition

the Act if it were distributed, under varying circumstan

to all federal candidates, to the general publ ic or to s

combination of the general public and all or some fed

candidates.

Commissioner Frank P. Reiche filed a dissenting opin

(Date issued: February 4, 1981; Length: 8 pages. inclU

dissenting opinion)

The RECORD is publisned by the Federal Election Commission, 1325 K Street N.W., Washington D,C. 20463. Com

missioners are: John Warren McGarry, Chairman; Frank P. Reiche, Vice Chairman; Joan D. Aikens, Thomas E. Harri

Vernon W. Thomson; Robert O. Tiernan; William F. Hildenbrand, Secretsrv 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-fre

800/424-9530. •

-See page 5 for a summary of the advisory opinion issued in February.

AD 1980·139; Cooperative's Solicitation

Through Magazine Distributed

to Nonmembers

Agway, Ine., an incorporated agricultural cooperative, 

not solicit contributions to its separate segregated f

Contin

3
AGPAC, through articles published in its magazine, the

Cooperator. Agway distributes the periodical to both

members and nonmembers.

To avoid making a prohibited solicitation, Agway had

proposed publishing a caveat, stating that Agway would not

accept contributions from nonsolicitable persons. Further,

Agway had planned to return any donations received from

nonsollcitable individuals. Nevertheless, the Commission

concluded the solicitations were not permissible because

they would reach approximately 8,000 corporations,

institutions and individuals (slightly more than 10 percent

of the magazine's total circulation) who were not eligible

to be solicited. The percentage and actual number of

nonsolicitable recipients were not insignificant.

The Commission distinguished this decision from that

reached in Advisory Opinion 1978·97, where the Commission had permitted a similar solicitation because the

nonsoJicitable recipients comprised only three percent of

the magazine's circulation (or approximately 1,000 recip

ents). Commissioner Joan D. Aikens filed a dissentin

opinion. (Date issued: January 16, 1981; Length: 5 page

including dissenting opinion)

AO 1980-143: Excess Funds of 1980 Committee

Used to Retire Debts

of 1970 Committee

The Courter for Congress Committee - 1980 (the 198

Committee) may use its excess campaign funds to retire

debts of the 1978 Courter for Congress Committee (the

1978 Committee). The 1980 Committee, which has n

outstanding debts, may assume $58,000 in outstandin

debts from the 1978 Committee because:

1. This debt retirement constitutes a "lawful" use o

excess campaign funds. 2 U.S.C. §439a and 11 CFR

113.2(c); and

2. Commission Regulations do not limit the transfer o

funds between a candidate's current principal campaign

committee and his or her previous campaign committee

11 CFR 110.3(a)(2)(iv).

Since the excess fu nds consist solely of contribution

raised for Congressman Courter's 1980 campaign, they do

not count against any donor's contribution limit for th

1978 campaign. (Date issued: January 26, 1981; Length: 2

pages)

STATUS OF FEe REGULATIONS

Date Sent Federal Register Date Prescribed--

RegulatiDns* to Congress Publication by the Commission

11 CFR 9033.9 4/10/80 4/15/80 7/3180

Suspension of Primary (45 FR 25378)

Matching Fund Payments

11 CFR Part 4 Not applicable 5/13/80 6/12/80

Public Records and the 145 FR 31291)

Freedom of Information Act

1 CFR Part 5 Not appl icable 5/13/80 6/12/80

Access to Public Disclosure (45 FR 31292)

Divi~lon Documents

11 CFR, Parts 100 and 110 5/14/80 5/23/80 8/7/80

Contributions to and (45 FR 34865)

Expenditures by Delegates

to National Nominating

Conventions

11 CFR, Parts 100,106, 6/13/80 6/27/80 . 9/5/80

110, 140-146 and 9001-9007 (45 FR 43371)

Public Financing of Presidential General Election

Campaigns

·Tlle chart is cumulative, listing all amendments to tile FEe ReglJlations proposed after the April 1980 edition of 11 CFR waspublished, including any technical amendments.

"The Commission may prescribe itsregulations 30 legislative days after It hastransmittedthem to Congress, provided neither the House nor tile Senatedisapproves them during this period.

4
•

•

•

AO 1980-147: Refund of Candidate's Donation

to Principal Campaign Committee

The Yearout Campaign Committee (the Committee), the

principal campaign committee of Mr. J. Gusty Yearout's

Senate campaign, may use excess campaign funds to reimburse Mr. Yearout for funds he originally donated to the

Committee. The Committee had planned to use the donation ($12,1401, along with excess campaign fu nds, to

refund 75 percent of each contribution given to Mr.

Yearout's campaign. Since all the refunds were not cashed

by contributors, the Committee was left with a cash

balance of $5,651.25. The Committee wanted to return this

amount to Mr. Yearout.

In receiving this refund, Mr. Yearout is not converting

excess campaign funds to personal use (a violation of 2

U.S.C. §439a) because he donated the funds solely for the

purpose of making refunds to contributors - not for

campaign-related purposes. Specifically, Mr. Yearout made

·the donation:

1. After he had withdrawn from the Senate race; and

2. After the Committee had paid all its campaign debts

(and after Mr. Yearout had forgiven a prior $8,200 loan

to the Committee).

The refund must be reported according to procedures

spelled out in 2 U.S.C. §434 and 11 CFR 104.3Ib). (Date

issued: February 9, 1981; Length: 2 pages)

AO 1981-2: Congressman's Use of Excess Campaign

Funds for Swearinq-In Ceremony

Congressman William J. Coyne could use excess funds from

his 1980 campaign to pay for a constituent reception held

on the day of his swearing-in ceremony. Since the reception

celebrated the commencement of his official status as a

federal officeholder, the payments would represent a

permissible use of excess funds for "ordinary and necessary

expenses" associated with Congressman Coyne's duties as a

federal officeholder - not a "personal use" of excess

campaign funds prohibited by 2 U.S.C. §439a.

Alternatively, if payments for the reception were made to

influence a past or future election - that is, either to

thank 1980 campaign workers or to encourage their assistance in 1982 - the payments could be considered

campaign expenditures rather than a use of excess funds.

In either case, any payments made by Congressman Coyne's

campaign committee would have to be reported pursuant to

2 U.S.C. §434 and 11 CFR 104.

The Commission expressed no opinion on applicable House

Rules and tax laws, which are beyond its jurisdiction. (Date

issued: February 9, 1981; Length: 3 pages)

AO 1981-5: Informational Mailing Sent

to Contributors Listed

on FEe Reports

Congressman Paul Findley may use the names and addresses

of contributors listed in the FEC reports filed by his

opponent in the 1980 general election to make an informational mailing. Congressman Findley's proposed mailing

to his opponent's contributors is permissible because its

sole purpose is " to set the record straight on certain

defamatory charges " made against him during the

5

campaign. Because the mailing would not solicit contr

butions or serve any commercial purpose, it would n

violate Section 438(a)(41 of the Act or Section 104.15(

of Commission Regulations. (Date issued: February 

1981; Length: 2 pages)

JOINT CONTRIBUTIONS BY SPOUSES

Maya husband and a wife make a joint contribution to 

candidate's campaign?

Yes, provided certain requirements are met.

What are the requirements?

If a check is to count as a contribution from both 

husband and wife, both individuals must:

1. Sign the check; and

2. Specify on the check what portion of the contributio

is to be attributed to each.

Alternatively. they may provide their signatures and th

same information in an accompanying letter. 11 CF

100.7lc) and 104.8!d). (See also Advisory Opinio

1980-67.)

If a check lsigned by both a husband and wifel does n

specify the portion of the contribution to be attributed 

each, should the recipient assume that each spouse 

contributing one-half of the full amount?

No. Within 10 days of receiving the contribution, th

recipient committee should either:

1. Return the contribution; or

2. Deposit the contribution in its campaign depository an

report it. The treasurer should note on the report th

questionable legality of the contribution. He or s

should then obtain in writing the necessary informatio

on how the check should be allocated. If this inform

tion cannot be obtained, the contribution should be 

turned.11 CFR 103.3.

In a single-income family, mayan individual make a cont

bution drawn on the account of a spouse?

Yes. An individual with neither a personal nor a ioi

checking account may make a contribution to a candidate

campaign through a check drawn on the account of 

spouse. Although the spouse must sign the check, the che

counts as a contribution from the individual, provided he 

she:

1. Also signs the check and indicates whose contributi

the check represents; or

2. Includes his/her signature and the same information 

a letter accompanying the check.

Note: An individual may use a spouse's personal check 

make the contribution, even if the spouse has alrea

contributed up to $1,000 to the same candidate.

Continu
May a husband and wife make a joint contribution drawn

on a partnership account?

Generally, no. A portion of a contribution drawn on a

partnership account may not be attributed to a spouse,

unless the spouse is also a member of the partnership. (See

Advisory Opinion 1980-67.)

CONTRIBUTIONS BY MINORS

May minors [i.e., children under 18 years of age) make

contributions to a candidate's campaign?

Yes. Minors may contribute up to $1,000 per election to

a candidate's campaign, as long as certain qualifications

are met. 11 CF R 110.1 (i)(2) and 104.8Id}.

What are the qualifications?

Contributions from minors must:

1. Be knowingly and voluntarily made by the minor; and

2. Consist of fu nds, goods or services owned or controlled

by the minor (e.g., income earned by the child, the

proceeds of a trust fund for which the child is the

beneficiary or a savings account exclusively in the

ch ild's name). 11 CFR 110.1(i}(2Hi) and (ii).

When would a contribution from a minor not be

permissible?

The minor's contribution would not be permissible if it

were made from funds controlled by another person in any

way (e.g., funds resulting from a gift given to the minor for

the purpose of making a contribution). 11 CFR

110.1 (i)(2)(iii).

INVESTING CAMPAIGN FUNDS

Maya political committee invest its campaign funds?

Yes. A political committee may, for example, invest

campaign funds in a money market fund or a savings

account. The committee must, however, return the invested

funds (and any interest earned) to its campaign depository

before using them to make expenditures. 11 CFR 103.3(a).

(See also Advisory Opinion 1980·39.)

How would a committee report funds used to purchase a

certificate of deposit?

The committee would include funds invested in a certlficate of deposit in the amou nt reported as "cash-on-hand."

11 CFR 104.3(a)(1).

Note: The committee should not report the purchase of a

certificate of deposit as a "transfer out" of its checking

account or as an "expenditure." Funds transferred to a

savings account would be reported in the same way.

Is interest income reportable?

Yes. The committee must itemize on Schedule A any

income earned on an investment that, in the aggregate,

exceeds $200 per year. 11 CFR 104.3(a)(411vi). If interest

does not exceed $200, the committee must nevertheless

report this income as part of "other receipts" on the

detailed summary page. 11 CFR 104.3(a1l3}(x).

6

Is interest income taxable?

Income earned on investments may be subject to fede

and state taxation. For more information, committe

should consult the Internal Revenue Service, 1201 E Stre

N.W., Washington, D.C. 20226; Telephone: 202/488-310

In addition, each state IRS office has an 800 line. Call t

local operator for the number.

Must a committee amend its Statement of Organizati

(Form 1) to indicate where its funds are invested (e.g.

savings account or money market fundI?

Yes or no, depending on the type of investment. If t

committee establishes a new investment account (

example, a savings account or a certificate of deposit) 

anyone of the campaign depositories identified by secti

103.2 of Commission Regulations" and if that deposito

has not already been reported on Form " the committ

must amend its Form 1 accordingly. In the case of 

investment administered by an institution not mentioned 

the Regulations (for example, a money market fund), 

amendment is required. (See Advisory Opinion 1980-3

• Permissible campaign depositories include: state banks; federa

chartered depository institutions (including state ban ks}: a

depository lnstitutions with accounts insured by the Fede

Deposit Insurance Corp., the Federal Savings and Loan Insuran

Corp., or the National Credit Union Administration. 11 CF

103.2.

:;rJ '"""~ .~ r~~T~._ - OK .., - --- - ~--, --J"--- ""!:""'-"" -<;-"- -_-~_~ __ ...",_~. - 

,< - • • -' .

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. ,

". - - ~-- - • • '« • _~. -'- - _, • 

SELECTED BIBLIOGRAPHY

OF CAMPAIGN FINANCE

LAWS AVAILABLE

During February 1981, the FEC's Library issued 

updated edition of its Campaign Finance and Fede

Elections Bibliography. The Bibliography, which will 

updated again in August 1981, provides a selected, ann

tated compilation of publications issued from January 19

through January. 1981. Documents are listed according 

four information categories:

Part I: Documents pertaining to the legislative history 

the Federal Election Campaign Act from 19

through the passage of the 1979 amendmen

(Pub. L. 96·187).

Part II: Books, monographs and treatises.

Part III: Manuals, guidebooks, reference services a

search tools.

Part IV: Law review articles and articles from busine

political science and general periodical index

Copies of the Campaign Finance and Federal Electio

Bibliography are available for review and copying in t

F EG's Office of Public Records. Requests for the Bibl

graphy should be accompanied by a money order or che

for $1.25, payable to the U. S. Treasurer, and sent to t

FEC's Office of Public Records.
• NEW LITIGATION

The Reader's Digest Assoc., Inc. v, FEe

Plaintiff seeks a temporary restraining order, as well

as a preliminary injunction, enjoining the FEC frbm taking

any further action with regard to an investigation initiated

by the FEC as the result of a complaint filed against

plaintiff in August 1980. The investigation concerned the

dissemination by Reader's Dige$t of video tapes that

provided a computer reenactment of Senator Edward

Kennedy's automobile accident at Chappaquiddlck,

Plaintiff further seeks a declaratory judgment that Section

441 b of the Act is unconstitutional as applied to plaintiff

and that the FEC exceeded its scope of authority in initiating the investigation.

in the time specified by the FOIA. (The FEC had partia

denied an initial request for documents made by plain

under the FOIA on September 16, 1980.) Plaintiff furt

asks the Court to order the FEC to provide all informat

requested in September. Plaintiff had requested the inf

mation in response to an FEC enforcement action initia

against the plaintiff in June 1980.

(U. S. District Court for the District of Columbia, Doc

No. 81-0063, January 9, 1981)

AUDITS RELEASED

TO THE PUBLIC

The Federal Election Campaign Act, as amended 

Act) gives the Commission authority to audit campaign

all Presidential candidates who receive public funds, and 

campaigns of ather political committees. Final audit rep

are available to the press through the Press Office and 

the general public through the Office of Public Reco

The following is a chronological listing of audits relea

between January 21 and February 4, 1981. •

•

(U. S. District Court, Southern District of New York,

Docket No. 81 Civ. 596 (PN u. January 29, 1981)

FEe v. Daniel Minchew

The FEC seeks a declaratory judgment that Daniel

Minchew failed to comply with the requirements of a

conciliation agreement he entered into with the Commission on October 10, 1979, pursuant to 2 U.S.C.

§ §437g(a)(5) and (7). The FEC further seeks a Court ruling that Mr. Minchew pay the U. S. Treasury the $4,000

civil penalty required by the agreement, as well as any

additional legal fees resulting from the F EC's civil action

against him. (Mr. Minchew had incurred the penalty for a

violation of 2 U.S.C. §432(b). He had failed to provide the

treasurer of Senator Herman Talmadge's 1974 reelection

committee with detailed accounts of campaign contributions within the required five-day period.l

(U. S. District Court for the District of Columbia, Docket

No. 81·0174, January 23, 1981)

FEC v. Conlin for Congress Committee

The FEC seeks a court ruling that the defendant violated

Section 434(a)(1)(A)(i) of the Act, as amended in 1976, by

filing a 10 day pre-general election report after the election.

The FEC further asks the Court to assess a $5,000 civil

penalty against the defendant.

(U. S. District Court for the Western District of Maryland,

Docket No. G81·41CA5, Feburary 9, 1981)

Phillips Publishing Co., Inc. v, FEC

Plaintiff seeks a declaratory judgment that the FEC

violated the Freedom of Information Act (FOIA) by

failing to respond to plaintiffs appeal for information with7

Audit

1. James E. Carter, The Carterl

Mondale Presidential Committee,

Inc. (Post-Primary Audit Report)

2. The 1980 United RepUblican

Committee

3. Automobile and Truck Dealers

Election Action Committee

4. Hudson County Regular

Democratic Organization

5. Ronald Reagan, Reagan for

President (Post-Primary

Audit Report)

6. Committee for the Survival of a

Free Congress

7. George Bush, George Bush for

President (Post-Primary

Audit Report)

Date Ma

Public

1/21/81

1/27/81

1/27/81

1/27/81

2/2/81

2/3/81

2/4/81
The list below identifies an FEC document that appeared in the Federal Register on January 27, 1981. Copies of

this notice are not available from the FEC.

Federal Register

Publication Date Citation

SUBseR IPTIONS

Election Law Updates is a quarterly series which sum

marizes all new state and federal erection legislatio

$11.00 per year.

Election Case Law is a quarterly series which summariz

recent state and federal litigation relating to electio

matters. $10.00 per year.

You may order these subscriptions by mail from: Superi

tendent of Documents, U.S. Government Printing Offic

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

check or money order for SUbscription price(s) payable 

Superintendent of Documents.

46 Fod. Reg.

8723

1981-1 Clearinghouse on 1/27/81

Election Administration; Clearinghouse

Advisorv Panel Meeting

'Notice Title

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