999 E Street NW Washington DC 20463 Volume 12, Numbe

4 PUBLIC APPEARANCES

continued on 

3 COURT CASES

Alwin Hopfmann v. FEe

FEC v. Sailors' Union of

the Pacific Political Fund

2 ADVISORY OPINIONS

Impact of Cuts

Those who utilize FEC services will feel 

impact of the cuts immediately. For example,

o States that wish to continue to provide acce

the FEe data base will have to absorb the co

for computer time Dr pass them on to users.

o Researchers using FEC data (either at 

Commission or through the on-line SUbscrip

service) will find the data much less comp

hensive and less timely.

3. Remove the 1976, 1978, 1980 and 1982 d

bases from current computer availability;

4. Reduce the timeliness of data entry;

5. End subsidization of state access to FEC d

(now available in 10 states);

6. Curtail workshops, seminars and publicati

explaining the election law;

7. Terminate transcripts of Commission exe

tive meetings (audio tapes will be availab

however); and

8. Postpone the contract to update the Elect

Case Law, a Clearinghouse puotlcation,

The Commission will nevertheless conti

its mandated functions, including disclosure 

reports within 48 hours, enforcement, audits, 

view of reports, advisory opinions and serving a

Clearinghouse for information on election adm

istration. Although the agency will cancel 

contract for entering into the computer detai

information on campaign finance reports, in-ho

staff will try to capture data on PAC contri

tions to candidates, independent expenditures 

corporate/labor com munication costs. Staff 

also continue to answer questions about the 

on the toll-free 800 line.

TABLE OF CONTENTS

I COMMISSION

1 NEW PHONES

FEDERAL ELECTION COMMISSION

BUDGET CUTS

On January 30, the Commission announced

additional budget cuts of $535,000 in fiscal year

1986, necessitated by the Gramm-RudmanHollings Act. Earlier, the agency's budget was cut

$323,000 on the assumption that there was going

to be a 5 percent pay cut in Federal salaries.

That assumption later proved false, but the funds

were lost. The combined effect of the two reductions was a loss of $858,000 from the President's

original budget request of $12,756,000. The Commission will absorb these cuts by reducing staff,

contracts and other nonpersonnel disbursements.

Commissioners made clear, however, that spending cuts will primarily affect programs which are

not specifically mandated by the election law.

The basic compliance and enforcement activities

will remain intact.

More specifically, under the new austerity

budget, the Commission will have to:

1. Eliminate from the data base information on:

o contributions from individuals;

o contributions from noncandidate committees to party committees;

o transfers among affiliated committees;

o loans;

o earmarked contributions; and

o joint fundraising activity.

2. Cancel the pre-election release of the Reports

on Financial Activity (RFA), a summary of

campaign activity in the first 18 months of the

election cycle;

NEW PHONE NUMBERS FOR

INFORMATION, PRESS AND PUBLIC

RECORDS

Beginning on February 18, new phone

numbers go into effect for the following

offices:

o Public Records Office - 376-3140

o Press Office 376-3155

o Information Services 376-3120

At the same time, these offices will

move to the Commission's new headquarters at 999 E Street, N.W. This completes

the agency's relocation. Anyone calling the

Commission from outside of the Washington, D.C. area should continue to use the

toll-free number, 800/424-9530.

February 1986

•

•
2

The Record is published by the Federal Election Commission,1325 K Street, N.W., Washington,

D.C. 20463. Commissioners are: Joan D. Aikens, Chairman; John Warre.n 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.

Volume 12, Numbe

AO 1985-39: National Bank Ad in Political

Club's Journal

The National Bank of New York City (the Ba

may not purchase advertising space in a politi

club's journal if the club uses the paymen

directly or indirectly, in connection with 

nominating procedure or election for any pub

office. 2 U.S.C. §44Ib(a); 11 CPR 114.2(a).

On the other hand, since this broad proh

tion on contributions by national banks does 

apply to contributions by individuals, an individ

AO 1985-31: Affiliation Between Insurance 

Corporation and Agencies for

Purposes of PAC Solicitations

CIGNA PAC, the separate segregated fund of 

CIGNA Corporation (CIGNA), an insurance c

poration, may solicit the solicitable personnel 

the COMPAR insurance agencies (the agenc

because the agencies are affiliated with CIGNA

Under the Act and FEC Regulations, a se

rate segregated fund may solicit the execut

and administrative personnel and the stockhold

(and their families) of the corporation that est

lishes and administers the fund, as well as 

solicitable personnel of any of the corporatio

subsidiaries or affiliates. 2 U.S.C. S441b(b)(6)

CFR 114.5(g)(l). CIGNA and the COMPAR ag

cies are considered affiliated by virtue of 

degree of influence CIONA exercises over 

agencies. (See 11 CFR 100.5 (g)(2) and 110.3

(l)OW.) Specifically, under an agreement th

have with CIGNA, the agencies may only 

CIGNA insurance policies, except in special ca

when CIGNA approves the sale of other polic

CIGNA may revoke the agencies' authority 

underwrite and issue policies; and, finally, CIO

offers agencies extensive advisory and mana

ment services, as well as financial assistance.

In soliciting contributions from the agenc

solicitable personnel, CIGNA PAC must com

with FEC Regulations. See 11 CFR 114.5. Mo

. over, since CIGNA and the agencies are affilia

corporations, any separate segregated funds 

tablished by the agencies or by CIGNA would 

considered affiliated political committees. Con

quently, for purposes of the contribution lim

they would be considered a single commit

SUbject to a single limit on contributions th

receive and contributions they make. 2 U.S

§44Ia(a)(5); 11 CPR 100.5(g)(2) and 110.3. Co

missioner Thomas E. Harris filed a dissent

opinion. (Date issued: November 22, 1985; Leng

6 pages, including dissent)

FEDERAL ELECTION COMMISSIOI\J

2/26 Michigan State Conference on

Campaign Finance

Lansing, Michigan

Commissioner Joan D. Aikens

Bobby Werfel, Chief, Information

Services

Kathlene Beuzard, Public

Affairs Specialist

Anthony Raymond, Senior

Reports Analyst

PUBLIC APPEARANCES

3/24 Ohio State Conference on State and

Federal Campaign Finance Laws

Columbus, Ohio

AOR Subject

ADVISORY OPINION REQUESTS

The following chart lists recent requests for

advisory opinions (AORs). The full text of each

AOR is available to the publie in the Commission's Office of Public Records.

1985-41 PAC contribution designated for general

election and accepted before primary.

(Date made public: December 2, 1985;

Length: 2 pages, plus 2-page supplement)

1985-42 Candidate's use of campaign funds to pay

portion of apartment lease. (Date made

public: December 16, 1985; Length: 1

page)

1986-1 Theater's compensation to campaign for

cancellation of concert fundraiser.

(Date made public: January 9, 1986;

Length: 1 page)

1986-2 Candidate's profits from door-to-door

sales used to support campaign. (Date

made public: January 9, 1986; Length: 1

page, plus 3-page supplement)

1986-3 Committee's reporting of stock contribution sold on the open market. (Date

made public: January 15, 1986; Length: 2

pages)

February 1986
FEDERAL ELECTION COMMISSION

•

•

February 1986

may purchase an ad (carrying the Bank's name) in

the political club's journal, provided the Bank does

not reimburse the purchaser by means of a bonus,

an expense account or other form of compensation. 11 CFR 114.5(b)(I). If the political club is a

political committee under the election law, the

individual's payments for the ad will be considered

a contribution to the political club. As such, the

payments:

o May not exceed the law's contribution limits

(i.e., $5,000 per year); and

o Must be reported by the political club as a

contribution from the individual. 2 U.S.C.

§§434(b)(2) and (3).

The Commission suggested that an ad purchased

by an individual should state that Bank funds were

not used to pay for the ad, in order to avoid the

appearance of its being sponsored by the Bank.

(Date issued: January 13, 1986; Length: 2 pages)

AO 1985--41: Contribution Designated for General

Election Accepted Prior to Primary

The Dante Fascell Campaign Committee, the

principal campaign committee for Representative

Faseell's 1986 reelection effort, may accept a

$3,000 contribution designated for the general

election, even though the Fascell Committee previously accepted a $5,000 contribution from the

same multicandidate committee for the 1986 primary. This conclusion is conditioned by two requirements:

o The Fascell Committee must account for the

contribution separately in its records and reports. (In fact, the Fascell Committee plans to

open a savings account for 1986 general election contributions and will not transfer the

contribution to its checking account until after

the 1986 primary election.)

o The Committee must return the contribution to

the multicandidate committee in the event

Representative Fascell is not a candidate in the

1986 general election. AOs 1980-68, 1980-122

and 1982-49.

Under the election law, a campaign may

accept up to $5,000 from a multicandidate committee for the candidate's primary and, again, for

the general election campaign. 2 U.S.C. S44la(2)

(A); 11 CFR 1l0.2(a)(l). Moreover, FEC Regulations specify that a campaign may accept contributions designated for the general election prior

to the primary election, provided the campaign

uses a reasonable accounting method to distinguish between primary and general election contributions. II CFR l02.9(e). (Date issued: January

17, 1986; Length: 2 pages)

3

Volume 12, Numb

ALWIN HOPFMANN v. FEC

On December 26, 1985, the Supreme C

denied a petition for a writ of certiorari filed 

Alwin E. Hopfrnann. Mr. Hopfrnann had petitio

the Court to review a ruling by the U.S. Cou

Appeals for the District of Columbia Circuit t

1) the FEC's decision to dismiss his administra

complaint was" 'sufficiently reasonable' to m

the [appeals] Court's deference" and 2) the co

tutional issues raised by Mr. Hopfrnann were p

erly dismissed as frivolous.

For a sum mary of the appeals court's ru

on Mr. Hopfmann's challenge to the FEC's d

sion (Alwin Hopfmann v. FEC. CA No. 82-036

see page 7 of the July 1985 Record.

FEC v. SAILORS! UNION OF THE PACIFIC

POLITICAL FUND

On January 6, 1986, the U.S. District C

Northern District of California issued an opi

granting defendants' motion for summary j

ment in FEC v. Sailors' Union of the Pa

Political Fund (Civil Action No. 84-7763-W

The court ruled that the separate segreg

funds of three maritime unions, the Seafa

Union of the Pacific Political Fund, the Mari

Firemen's Union Political Fund and the Seafa

Political Donation, were not affiliated. Acc

ingly, the defendant committees were not sub

to a single $1,000 limit on contributions 

made to California Governor Jerry Brown's 

Senate primary campaign. (Affiliated poli

committees, on the other hand, are SUbject 

single contribution limit on both contribut

they make and receive. 2 U.S.C. S441a(a)(5).)

Background

On December 10, 1984, the FEC filed 

against the defendant political committees in 

district court. The Commission asked the c

to:

a Declare that, by virtue of their affiliation, 

committees had violated 2 U.S.C. §44la(a)(2

by, together, contributing more than $5,00

Governor Brown's primary; and

o Order the three com mittees to disclose t

affiliation by amending their respective st

ments of organization.

In its suit, the FEC argued that the t

committees' respective parent organizations w

affiliated on two grounds:

o The parent organizations were parts of 

Seafarers' International Union (SlU).

o The parent organizations were subject to S

control.

contin
February 1986 FEDERAL ELECTION COMMISSION

continued from p. 3

The defendant political committees contended, on the other hand, that the three unions

were not controlled by SIU and, further, that the

independent histories, structures and management

of the unions demonstrated that they did not meet

the criteria for affiliation.

Court's Ruling

The district court ruled that the member

unions of the Seafarers' Union were an "association of independent unions" and, as such, were not .affiliated. Accordingly, the unions' separate segregated funds were not affiliated political committees. The court found that "the [Seafarers]

constitution embodies the rules that govern the

relationship of these unions and those rules preserve their independence, a fact confirmed by the

undisputed evidence of their past conduct." The'

court said that "other than having the power to

collect dues, Seafarers has no power over the

affairs of its member unions."

FEDERALELECTION COMMISSION

999 EStreet. N.W.

Washington, D.C. 20463

Official Business

\.blume 12, Numoo

• _ _ ..... .. .,. , r""'- _ • "'" • " V~ _ .~., _ 

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•• e ' <e- .: , '>.: I ,'/ , ~:~ . : • r.~'·· 

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__ _ __ • _ _ _ _ _ _ __ • • ..._ >-_

continued from p. 1

o Individuals who want to attend Commiss

workshops may, instead, have to travel 

Washington, D.C. to participate.

Commenting on the budget cuts in a mem

randum to the Commissioners, the Staff Direc

observed:

Over the past several years, this agency

has made great strides in improving the

accuracy, timeliness and comprehensiveness of, and access to, our disclosure

information. Reversing that trend is a

severe step not lightly proposed. Many

members of the general public, the press

corps, academics and committees themselves have come to rely upon availability of this detailed information. Absent

this data capture, the public will be

denied the level of detail available in the

past.

All of the data, however, remains on ha

copy and could be entered into the computer a

later date. The Commission is hopeful that fun

will be available to resume computer entry 

itemized campaign finance data for the 19

election. In effect, there will be a gap in the d

base relating to the 1986 election. The agen

will maintain, however, the infrastructure to co

duct the full computer activity at any time fun

ing is restored.

Bulk Rate Mail

Postage and Fees Paid

Federal Election Commission

Permit NumberG-31