e·

Volume 8, Number 1

THE FEDERAL ELECTION

COMMISSION

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

January 1982

•

YEAR-END REPORT DUE

All political committees currently registered with the Commission must file a

year-end report by January 31, 1982, regardless of their level of financial activity or

whether they supported candidates in the

1981 special elections. (This requirement applies, for example, to all registered committees with outstanding debts from former

carnpaigns.)

The year-end report must include all reportable transactions occurring since the last full

report filed or (if the committee is new) from

the date of registration through December

31, 1981. Complete reports must also include

appropriate schedules (e.g., Schedule A for

itemized receipts, Schedule B for itemized

disbursements, Schedule C for outstanding

loans and Schedule D for outstanding debts

and obligations).

Note: Monthly filers must file a year-end

report covering acti vity from the last monthly report through December 31, 1981. For

example, if a committee filed a November

monthly report, the year-end report would

cover all activity from December 1 through

December 31, 1981.

Committees that do not intend to receive

contributions or make expenditures, and that

have no outstanding debts, may be eligible to

terminate. For details on termination, see

the "800 Line," p. 3 of the May 1981 Record,

or contact the Office of PUblic Communications (see below).

Forms and additional information will be sent

to all registered committees. Questions and

requests for forms should be addressed to the

Office of Public Communications, Federal

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

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

or toll free 800/424-9530.

SPENDING LIMITS FOR PARTY

COMMITTEES IN CONNECTICUT

SPECIAL ELECTION

National and state party committees may

make limited, coordinated expenditures on

behalf of their Congressional candidates in

the Connecticut special general election,

which will be held on January 12. 2 U.S.C.

§44Ia(d). The national committee of a party

may make expenditures of up to $18,320 in

support of its candidate. In addition, the

candidate's state party committee, together

with any SUbordinate party committees (e.g.,

county, district and loe al), may make combined coordinated party expenditures that are

SUbject to a single limit of $18,320.

The limit on party spending for candidates

for the U.S. House of Representatives is

equal to $10,000, plus the 1981 increase in

the Consumer Price Index (CPI). 2 U.S.C.

§§44Ia(c) and (d)(3)(B). Since the annual CPI

figures for 1981 will not be available before

the Connecticut special general election, the

Commission has calculated an $18,320 limit

based on the CPI for the first ten months of

1981. The Commission will issue an additional

notice when it receives the annual CPI

increase certified by the Secretary of Labor.

Special coordinated party expenditures count

neither as contributions to a candidate nor as

continued
expenditures by the candidate or the candidate's authorized committees. The expenditures must, however, be reported; the party

committee discloses them on Schedule F,

FEC Form 3X. The FEC has sent informational notices to party committees in Connecticut. For further information, contact

the Commission at 202/523-4068 or toll-free

800/424-9530.

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 aetivity 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 1981-34: PWlds Transferred from

Membership Organization's

Legislative FlUId to

its Separate Segregated FWld

The National Association of Retired Federal

Employees (NARFE), an incorporated membership organization, may transfer funds

from a special legislative fund established to

oppose the merger of the social security and

federal retirement systems (the Anti-Merger

Fund) to its separate segregated fund, provided NARFE remedies the deficient notice it

used when it originally solicited donations to

the Anti-Merger Fund. The transfer is possible because the Anti- Merger Fund has been

maintained in a separate bank account, distinct from NARFE's general treasury, and

because those solicited for the Anti-Merger

Fund were members of NARFE, eligible to be

solicited for contributions to a separate segregated fund.

Under the Act, when an incorporated membership organization solicits contributions to

its separate segregated fund, it must notify

its solicited members of the fund's political

purposes and of their right to refuse to

contribute without reprisal. 2 U.S.C.

§§44Ib(b)(3)(B) and (C); 11 CFR 114.5(a). The

solicitation NARFE made to the Anti-Merger

Fund only partially complied with the Act's

requirements. The solicitation letter stated

that donations were entirely voluntary.

However, the NARFE solicitation letter

failed to provide explicit notice that the

funds were being solicited for "political

purposes" (as defined by the Act), i.e., to

support federal candidates.

In order to transfer donations from the Anti-Merger Fund to the separate segregated

fund, therefore, NARFE must remedy this

solicitation deficiency by mailing a letter to

those members who contributed to the Anti-Merger Fund. The letter must include a

return envelope with prepaid postage and a

form on which the donor may easily

disapprove, in writing, the transfer of the

unspent portion of his/her donation to

NARFE's separate segregated fund. Transfers may be made only:

1. After a reasonable time has passed (e.g.,

a period of time equal to the time

allotted for receipt of the donations to

the Anti-Merger Fund and at least 90

days from the date of the mailing); and

2. If the balance remaining in the Anti-Merger Fund is equal to the total

amount of unspent donations that were

disapproved for transfer. Donations

transferred are subject to the Act's re-

•

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

Washin~ton, D.C. 20463. Commissioners are: John Warren McGarry, Chairman; Frank P.

Reiche, Vice Chairman; Joan D. Aikens; Thomas E. Harris; Vernon W. Thomson; Robert O.

Tiernan; William F. Hildenbrand, Secretary of the Senate, Ex Officio; Edmund L. Henshaw, •

Jr., Clerk of the House of Representatives, Ex Officio. For more information, call

202/523-4068 or toll-free 800/424-9530.

2
•

•

•

porting requirements and its limits and

restrictions on contributions. (Date

issued: December 9, 1981; Length: 7

pages)

AO 1981-36: PAC Established by Trade

Association with Foreign

National Members

The Japan Business Association of Southern

California (JBA) is an incorporated trade

association whose membership includes

foreign nationals and domestic corporations

wholly or partially owned by Japanese business corporations. Because it is not a foreign

national, JBA may contribute its general corporate funds to its proposed political fund,

the Japan Business Association Political

Action Committee (JBAPAC). JBAPAC will

support only state and local candidates.

Although JBA's membership includes foreign

nationals, JBA is not a foreign national because it is a domestic corporation with its

principal place of business in California. 2

U.S.C. §441e; 22 U.S.C. ssaio», To ensure,

however, that JBAPAC does not indirectly

make contributions on behalf of any foreign

national, no foreign nationals may direct or

dictate JBAPAC decisions. This means, for

example, that no foreign national may serve

in a decision-making role for JBAPAC.

The Commission expressed no opinion on relevant state laws or regulations of the Fair

Political Practices Commission. Commissioner Thomas E. Harris filed a dissenting

opinion with which Commissioner Robert O.

Tiernan concurred. (Date issued: December

9,1981; Length: 5 pages, including dissenting

opinion)

AO 1981-41: Trade Association's

Methods for Obtaining

PAC Solicitation Approvals

from Member Corporations

The International Association of Amusement

Parks and Attractions (IAAPA), a trade association, may undertake three activities designed to obtain approvals from member corporations for solicitations to IAAPA's separate segregated fund (the PAC). Under the

Act and Com mission Regulations, a trade

association must obtain written approval

from each member corporation before soliciting that corporation's solicitable personnel.

3

2 U.S.C. §441b(b)(4)(D) and 11 CFR 1I4.8(d).

In order to obtain the written approvals,

IAAPA may conduct the following activities

in conjunction with its annual convention, as

long as the activities do not involve soliciting

contributions to IAAPA's PAC:

1. Prior to the convention, IAAPA may publish an article in its news magazine inviting member corporations to approve solicitations by IAAPA, provided the article

contains only general information about

the PAC and does not encourage eontributions to support the PAC or tell readers

to contribute to it. The article may mention that a booth will be set up at the

convention expressly for the purpose of

obtaining corporate member approvals for

solicitation of their solicitable personnel.

The article may also include a clip-out

form to be used by corporate members for

approving solicitations, as long as the

form contains the explicit information required by Section 114.8 of FEC Regulations.

2. IAAPA may set up a booth at the convention to obtain corporate solicitation approvals, provided the IAAPA representative does not solicit PAC contributions

from nonsolicitable individuals. This

means that the representative may hand

out to anyone a pamphlet that meets the

same standards established for the newsletter article (discussed above); under

these conditions, the pamphlet would not

be considered a solicitation for contributions to the PAC. If, however, the pamphlet does not meet these qualifications,

and thus is a solicitation, the representative may distribute it only to individuals

who may be solicited by IAAPA and its

PAC.

3. An IAAPA representative may make a

five-minute presentation on the PAC at a

convention meeting, provided the representative does not encourage support of

the PAC or tell listeners how to contribute to the PAC. The representative may

not invite listeners to pick up a brochure

at the booth if the brochure solicits contributions to the PAC. The representative may, however, invite officers of

IAAPA's corporate members to visit the

booth to give their approval to solicitations by the PAC.

Commissioner Thomas E. Harris filed a dissenting opinion. (Date issued: November 17,

1981; Length: 7 pages, including dissenting

opinion)
ADVISORY OPINION REQUESTS

The following chart lists recent AORs.

The full text of each AOR is available to the

public in the Commission's Office of Public

Records.

As a registered committee, the Party would

be required to keep records of the proceeds

from the bingo games. The Commission recommends one of the following accounting

methods for keeping records of a large number of small contributions (i.e., less than

$50).

1. The Party may keep the same records for

contributions under $50 that it must keep

for contributions of $50 or more, i.e., the

name and address of each contributor and

the date and amount of the contribution.

If the Party uses this method, or otherwise retains information on the names of

contributors, it should also track the

amount donated by each contributor on a

calendar-year basis in order to comply

with the requirements for recording aggregated contributions. 11 CFR 102.9(a)

(2).

2. Alternatively, the Party may record the

name of the fundraising event, the dates

the contributions were received for the

event, and the total amount of contributions received on each day for the event.

(Date issued: December 7,1981; Length: 3

pages)

Date Made

Public Pages

1981-52 Trade associ- 11/18/81

ation solicitation of unincorporated

trust members.

1981-53 Campaign com- 11/18/81

mittee's sale

of its computer

mailing lists.

1981-54 PAC establish- 12/2/81

ed by partnership of subsidiaries of

two corporations.

•

•

•

2

3

4

AOR Subject

AO 1981-46: Exchange of Mailing

Lists Between Candidate

Committee and Other

political Committees

and Organizations

The Committee for Congressman Ronald V.

Dellums (the Committee) may exchange contributor lists of corresponding value with

other political committees, individuals, organizations and corporations. The advisory

opinion request indicated that, in the fundraising industry, a list of names an organization provides in exchange for names it acquires is considered an acceptable form of

payment (Le., a "usual and normal" service

charge) as long as the names exchanged are

of equal value. 11 CFR 100.7(a)(l)(iii)(B). In

this case, therefore, the exchange of names

of equal value between the Committee and

another political committee (including a

state or local party organization), a nonprofit

organization, a corporation or an individual

would not result in a contribution to the

Committee. Accordingly, the value of names

provided to the Committee would not be

SUbject to the Act's limits and prohibitions on

contributions. Nor would the exchange have

to be reported. Similarly, costs incurred by

the owner of the list to produce the names

for the Committee would not result in a

contribution to the Committee because, in

the fundraising industry, such costs are customarily included in the fee for a list.

Committee acceptance of contributor names

in exchange for a future use of the Committee's mailing list is also permissible, provided

the names are of equal value and the future

use of names actually occurs.

The Commission did not express an opinion on

the application of state or local laws to the

exchange of mailing lists between the Committee and unregistered state or local committees. (Date issued: November 16, 1981;

Length: 5 pages)

AO 1981-48: Recordkeeping Requirements

for Party's Bingo Fundraisers

If the Muskegon County Republican Party of

Muskegon, Michigan (the Party) uses proceeds

of its bingo fundraisers for federal election

activity, the Party must follow the Act's

recordkeeping procedures for contributions of

less than $50 if the Party qualifies as a

political committee under the Act. (See 2

U.S.C. S43l(4)(C).)

4
Date Made

AOR Subject Public Pages

1981-55 Members of 12/9/81 8

membership

organizeti on

solicited by

PAC of affiliated membership organization.

ALTERNATE DISPOSmON

OF ADVISORY OPINION REQUEST

- AOR 1981-47 (union payroll deduction

plan facilitating earmarked contributions)

was withdrawn by its requester on November 17,1981.

LEGISLATION

FEC TESTIFIES ON

AMENDMENTS TO FECA

On November 20, 1981, FEC Chairman

John Warren McGarry testified before the

Senate's Committee on Rules and Administration on proposals to amend the Federal

Election Campaign Act. He was accompanied by Com missioner Joan D. Aikens. In his

testimony, Chairman McGarry stated that

the Commission welcomed the Committee's

examination of its operations. Noting the

need for a strong independent regulatory

agency to administer the election law,

Chairman McGarry said that "...disclosure

and other campaign finance requirements

would be of little value if not meaningfully

enforced. Absence of effective enforcement

was one reason why prior disclosure laws

were largely ignored." Mr. McGarry added

that "the FEC's monitoring procedures,

technical assistance and enforcement

actions have all worked to ensure that

candidates and committees file timely and

complete reports and comply with statutory

campaign finance requirements." As a

result, "the details of political campaigns

have been disclosed to the public to a

greater extent than ever before."

5

The Chairman noted that a number of the

legislative changes recommended by Senator

Arlen Specter (R-PA) in his bill (S. 1899)

and by Senator Charles Mathias (R-MD),

Committee Chairman, in his bill (S. 1851)

had been suggested by the Commission in

previous annual reports to the Congress.

The FEC took note of proposed amendments

that would:

Relieve burdensome reporting requirements;

Modify current limits on contributions

and expenditures, e.g., increase dollar

limits on contributions;

Ensure that the Act covers contributions

and expenditures made by draft committees;

Provide a single point of entry for filing

all reports required under the Act;

Revise the Commission's duties and powers, e.g., bring into conformity the judicial review provisions of Titles 2 and 26;

Shorten the period for Congressional review of the FEC's proposed regulations

from 30 to 15 days;

Clarify which entities must register and

report as political committees under the

Act; and

Revise the Presidential public funding

program, e.g., remove the state-by-state

spending limits for Presidential primary

matching fund recipients, yet preserve

the overall spending limit.

Chairman McGarry pointed out, however,

that, while the Com mission has and will

continue to recommend changes in the law,

it is "bound to enforce the law as it is

written" until legislative changes are made.

PUBIJC APPEARANCES

Date Sponsoring Organization

1/22 The League of Women Voters of

Texas

Election Laws and Practices

Conference

Austin, Texas

Chairman John Warren McGarry
, "

SUPREME COURT REVERSES

APPEALS COURT IN

FEC v. OSCC

On November 10, 1981, the Supreme

Court issued an opinion reversing a decision

by the U.S. Court of Appeals for the District

of Columbia Circuit in the consolidated cases

of FEC v, Democratic Senatorial Cam ai n

CommTItee DSCC and National Republican

Senatorial Committee (NRSC) v, DSCC (Civil

Action Nos. 80-939 and 80-1129). The Court's

opinion upheld the FEC's dismissal of a complaint that the DSCC had filed against the

NRSC in May 1980. In reversing the appeals

court's decision, the Court affirmed an earlier decision by the U.S. District Court for

the District of Columbia, which held that the

Commission's dismissal of OSCC's complaint

had not been contrary to law.

In its complaint, OSCC had alleged that

NRSC, acting as an agent for certain state

Republican Party committees, had made special "coordinated" expenditures on behalf of

Senate candidates, in violation of the Act. 2

V.S.C. §441a(d)(3). In dismissing the complaint, the Commission had relied on its consistent construction of 2 V.S.C. §441a(d)(3),

i.e., that Congress had not intended to prohibit the type of intraparty arrangements

used by the Republican Party committees.

The Supreme Court's opinion affirmed the

Commission's construction of §441a(d)(3) as a

"sufficiently reasonable" one. The Court

found that the district court had been "correct" in according deference to the Commission's interpretation.* The Court held

that "Section 441a(d)(3) does not expressly or

by necessary implication foreclose the use of

agency arrangements, such as are at issue

here, and the FEC thus acted within the

authority invested in it by Congress when it

determined to permit such agreements....

While §441a(d)(3) does not authorize the

NRSC to make expenditures in its own right,

* Moreover, the Court did not take issue

with the fact that the FEC's dismissal of

the complaint was based solely on the

General Counsel's Report.

6

it does not follow that it may not act as

agent of a Committee that is expressly authorized to make expenditures." The Court

further held that "the FEC's view that the

agency agreements were logically consistent

with §441a(4) -- which authorizes the transfer of funds among national, state, and local

committees of the same party -- is acceptable," (For a detailed summary of the suits,

see page 2 of the August 1981 Record.)

ARCHIE E. BROWN v. FEC

On November 20, 1981, the V. S. Court

of Appeals for the District of Columbia Circuit issued a judgment affirming an earlier

decision by the district court in Archie E.

Brown v; FEC (Civil Action No. 80-2108).

The district court's decision had upheld the

FEC's dismissal of the complaint plaintiff had

filed against the International Brotherhood of

Teamsters, Chauffeurs, and Warehousemen

and Helpers of America (the Teamsters). In

his complaint, plaintiff alleged that Local

745 of the Teamsters had viola ted 2 V.S.C.

§441b(b)(3)(A) by attempting to coerce him to

contribute to DRIVE (the Democratic Republican Independent Voter Education), the

separate segregated fund of the Teamsters.

Plaintiff alleged that he was SUbsequently

denied membership in Local 745 because he

had refused to contribute to, or join, DRIVE.

Plaintiff claimed that the FEC's dismissal of

his complaint was contrary to law.

In upholding the FEC's determination, the

district court said that the General Counsel's

Report to the Commission indicated that

"••.plaintiff's membership in Local 745 was

denied because his union dues were unpaid,

not because he refused to contribute to

DRIVE." Moreover, the district court held

that the General Counsel's Report, by itself,

was a sufficient record for the court's review

of the Commission's determination in the

complaint. In appealing the district court's

decision, plaintiff contended, however, that

the General Counsel's Report alone, without

a separate statement of the Commission's

reasons for dismissing the complaint, afforded "•.•an inadequate basis for informed

judicial review."

In its Memorandum affirming the district

court's decision, the appeals court found no

merit in plaintiff's assertion. The appeals

court cited the Supreme Court's decision in

FEC v. Democratic Senatorial Cam ai n

commission see above, which held that the

•
•

General Counsel's Report constituted sufficient grounds to dismiss an administrative

complaint -- even if the Report were not

expressly adopted by the Com mission. The

appeals court concluded that the General

Counsel's Report to the Commission recommending dismissal of Brown's complaint was

sufficiently reasonable, tI •••particularly when

considered in the context of the large discretion the Commission has to determine whether or not a civil violation of the Act has

occurred."

NATIONAL RIGHT TO WORK

COMMfITEE v. FEC

On November 131 1981, the U.S. Court of

Appeals for the District of Columbia Circuit,

sitting en bane, denied the FEC's suggestion

for a rehearing of National Right to Work

Committee, Inc. (NRWC) v. FEC (Civil Action No. 80-1487). Five of the ten judges on

the appeals court panel had voted to grant

the Commission's petition. The Commission's

petition sought review of a September 4

ruling by a three-judge panel of the appeals

court, which had reversed an earlier ruling of

the U.S. District Court for the District of

Columbia. In its ruling, the original appeals

court panel had found that the term "mernber," as used in Section 44lb(b)(4)(C) of the

election law embraced "..•at least those individuals whom NRWC [a nonprofit corporation

without capital stoekl describe[d] as its active and supporting members...."i.e., n•••those

individuals solicited by NRWC for contributions to its separate segregated fund."

On December 15, the Commission voted to

petition the Supreme Court for a writ of

certiorari. For a detailed summary of the

suit, see page 3 of the November 1981

Record.

COMPLIANCE

FEC PUBLISHES NAMES OF

PRESIDENTIAL NONFILERS

On November 2, 1981, as required by law,

the Commission published the names of four

authorized Presidential committees that had

failed to file their third quarterly report by

October 15, 1981. One of the committees,

7

authorized by a 1976 Presidential candidate,

had failed to report activity for its 1976

Presidential campaign. The other three had

failed to file reports relating to the 1980

elections. (Under the election law, a candidate's authorized campaign committee may

terminate only when its debts and obligations

have been extinguished and when the debts of

its affiliated authorized committees have also been extinguished. 11 CFR 102.3.)

During the 1981 nonelection year, authorized

committees of Presidential candidates have

the option of reporting on a monthly or

quarterly basis. The four committees cited by

the Commission chose the quarterly reporting

option, but then failed to file the third quarterly report on time.

AUDITS

AUDITS RELEASED

TO THE PUBIJC

The following is a chronological listing of

audits released by the Commission between

November 10 and December 11, 1981. Final

audit reports are available to the general

public through the Office of Public Records.

Date Made

Audit Public

1. The Citizens Party 11/10/81

2. Maine Democratic State 11/16/81

Committee

3. League of Conservation 11/25/81

Voters Campaign Fund

4. California Republican 12/4/81

Victory Fund

5. The Reagan Bush Commit- 12/11/81

tee, the Reagan Bush

Compliance Fund and

the Democrats for Reagan

(Final Audit Report of

the General Election

Campaign)
The item below identifies an FEC document that appeared in the Federal Register

on December 9, 1981. Copies of this notice

are not available from the FEC.

Notice Title Date Citation

1981-12 Rulemak- 12/9/81

ing Petition:

Notice of

Availability (res

revising

FEe Regulations

on independent expenditures)

46 Fed.

Reg.

60273

'..-,,0

FEDERAL ELECTION COMMISSION

1325 K STREET, NW

WASHINGTON, DC 20463

OFFICIAL BUSINESS

FIRST CLASS MAll

POSTAGE & FEES PAID

FEC

WASHINGTON, D.C.

PERMIT NO. G31

.