Table of Conten

dvisory Opinions

Fede ral Regist er

Index

October 1993

Confere nces

December PAC Conference in

Washington, DC

Regulations

Proposed Rules on Personal Use of

Campaign Funds

5 Final Regulations on Definition of

"Member"

Statistics

2 1994 Senate Campaigns

Clearinghouse

2 Advisory Panel Charter Renewed

Publicati ons

2 Updated Index to PAC

Abbreviations

Court Cases

3 F--'EC v . Californians for a Strong

America

Complia nce

3 Redesignations and Reattributions

of Excessive Contributions

3 MURs Released to the Public

ped al Election

6 Michigan Special Election

8

8

J I

Federal Election Commission

Conferences

FEC to Hold PAC Conference

in Washington, DC

December 13 and 14

On December 13 and 14, a 10nday and Tuesday, the FEC will hold a

IY2day conference in Washington,

DC, for corporations, trade associations, labor organizations and their

PACs. FEC Commissioners and staff

will conduct workshops for each type

of organization.

The $ 125 registration fee covers

conference materials and three meals

(two continental breakfasts and one

lunch).

The conference will be held at the

Washington Hilton and Towers Conference Center, 1919 Connecticut

Avenue, NW, Washington, DC 20009

(202/483-3000). To receive the group

rate of $ 120 per night for a single

room,make your reservation by 0 -

vember 2 1 and notify the hotel that

you will be attending the FEC conference.

For more information, or to place

your name on the mailing list for

registration materials, call the FEC:

800/424-9530 or 202/219-3420 . +

Volume 19,Numb

Regulations

Proposed Rules on Persona

Use of Campaign Funds

Under a proposed rule definin

personal use of a candidate's cam

paign funds, a campaign commit

would be prohibited from paying 

salary to the candidate, paying hi

her ordinary household expenses

paying any expense that would e

regardless of the campaign.

The proposed rules were publ

in the Federal Register on Augus

1993 (58 FR 45463); comments 

due September 29.

The prohibition on the person

of excess campaign funds was

contained in the 1979 amendmen

the Federal Election Campaign A

In making determinations on per

use, the Commission has had to

balance the desire of Congress to

prohibit personal use of campaig

contributions against the need to 

candidates and campaignsthe

discretion to conduct their campa

as they see fit.

In the past, however. most of 

advisory opinions and enforceme

cases on the use of campaign fun

involved candidates who were

Members of Congress on January 

1980, and thus exempt from the

personal use prohibition under th

"grandfather clause" of 2 U.S.c.

(continued on p
Federat E/I'l:/ion C(}I1I/1lI",lj~"~"~'~E'C~O~R~O,-- _

Statistics

9~ Senate Campaigns

An August 17 press release lists

the campaign finance activity of the

50 candidates running for the 34

Senate seals up for election in 1994.

The figures are taken from the

midyear reports filed by the campaigns. where available. the release

also shows the candidate's financial

activity in previous cycles.

During the first six months of the

1993 -~ cycle, the campaigns

reported raising almost 25 million

and spending $7 million. These

figures arc lower than amounts raised

and spent by Senate campaigns during

the first six-months of the previous

two election cycles. but such comparisons are difficult because different

Fede ra l Election Commission

999 F. Stree t, NW

Wash ington. Be 2().U)3

800/424-9530

202/21 9·3420

202fl 19-3336 (TOO)

Scot t E, Thomas. Chairman

Trevor Potter, Vice Chairman

Joan I). Aikens. Commissioner

Lee Ann .:lIiutl. Commissioner

Danny L. McUunald.

Commissioner

j ohn Warren Ml{;arry,

Commissioner

Waller J. Stewa rt. Secretary

of the Senate, Ex Officio

Commissioner

Uonnllid K. Ande rso n. Clerk

of theHouse of Representatives.

Ex Officio Commlssiooer

john C. Surina. Staff Director

La wrence M. Nnble. General

Counsel

Published by the: Inform ation

Division

Louee 1>. wldes, Director

Stephanie " ill-2erald. Editor

Blake La nge, GraphicsAdvi!Wl'

2

states hold Senate elections during

different election cycles.

From January through June 1993,

Senate campaigns collected a total of

$17million in contributions from

individuals. which accounted for

more than 69 percent of the total

raised by the campaigns. The $6

million contributed by PACs represented 24.5 percent of total receipts.

To order the press release. which

also lists the activity of the IWO Senate

candidates who ran in the 1993 Texas

special election, call the Public

Records Office at 800/424-9530 (ask

for Public Records) or 202/219-

4140. +

Clearinghouse

Advisor)' Panel Cha rter

Renewed

On August 6, 1993. the Commission renewed the Clearinghouse

Advisory Panel charter through July

1995. The Panel, II 20-member board

of state and localetection officials,

advises the Clearinghouse on ways (Q

improve the federal administration of

elections, The Panel also suggests

possible research topics for Clearinghouse studies and makes suggestions

for other means of assisting election

administrators, The Panel meets once

a year.

The renewal of the charter was

coordinated with the Office of

Management and Budget and the

General Services Administration.

which review and approve advisory

committees pursuant to [he Federal

AdvisoryCommittee Act and Executive Order 123838 (resmcung the

proliferation of such committees), •

_ October /

Publications

Updated Index to PAC

Abbre viations

The Commission recently published a new editionof Pacronyms 

alphabetical list of acronyms, abbr

viations and common names of po

cal action committees(PACs).

For each PAC.lhe index provid

the full name of the PAC. its city,

state, FEC identification number an

if not readily identifiable from the 

name, its connected. sponsoring or

affiliatedorganizanon,

The index is helpful in identifyi

PACs that are not fully identified i

their reports and statements on file

withtheFEe.' Tbeid.2to- Pocronym

came from the Washington State P

lic Disclosure Commission.

To order a free copy of PacrolI)'ms. call 800/424-9530 and ask f

[he Public Records Office. or dial 

office directly at 202/219-4140.

Other PAC indexes, described

below, may be also ordered from

Public Records. The cost is shown 

parentheses.

• An alphabetical list of all register

PACs shows each PAC's identifi

tion number. address, treasurer an

connected organization ($13.25),

• A list of registered PACs arrange

by state provides the same inform

tion as above ($13.25).

• An alphabetical list of organizati

sponsoring PACs shows the PAC

name and identification number

($7 .50). +

I Under FEC regulalions .the name of 

corporate or labor PAC must include 

full. official name of the co nnected

organnotion. A PAC may use an abbr

ated name on checks and leuerhRad ;f 

a d early recognized abbreviation or

acronym by which: the connected orga

zation is commonly known, However,

both the full. official PAC name and t

abbreviated name must M disclosed i

repons. suuememsandaisctaimers.

// CFR /02_J.l(c).
•

•

•

Ouohl!l/993

Court Cases

FEe v, Ca lifornians for a

Strong America

On August 13. 1993. lhe U.S.

Court for the Central District of

California held defendants in contempi of court for failing to pay

$30 .000 in court-imposed civil

penalties that have beenoutstanding

over three years. Tbe court ordered

defendants Californians for a Strong

Ame ric a. a nonconrected comminee.

and Alben J. Cook. as treasurer. (0

pay the penalties. plus accrued back

interest. by August 31. Thereafter.

they mu st pay an additional S100 per

day until they complete payment.

Furthermore. if they fail to make full

payment by September 30. the court

will issue a warrant for the arrest of

Mr. Coo

The penalties were imposed in two

separate suus. In a November 1988

judgment. the court ordered defendants 10 pay a $15.000 civil penally

for failing to file three 1986 reports

(No. 88-1554). In [he ..econd suit. the

court issued a June 1989 order

imposing another $15.<XJO penalty

against the defendants for failing [0

file a 1987 report. faili ng [0 report

independent expenditures properly

and failing to include a disclaimer

notice in solicitation letters(No. 88-

(,<49).

In both cases. defendants never

responded to the FEe's suits. and the

judgments were by default. Defendants also failed to file responses or

appear before the court in [he contempt proceedings. +

Compliance

Redcsignations a nd

Reattributions of Excessive

Co ntributions

Committees may correct an excessive contribution by requesting. and

receiving. a written.signed (and dated)

redesignation or reattribution of the

excessive amount from the contributor (or contributors, in the case of a

reatmburion).' This process. however,

is subject 10 several rules, and a committee's failure to comply with them

may result in an FEC enforcement

action. In particular, committees have

been cited for violating the two

requirements listed below.

· /II! orm;'1g DOl/or ofRef und Optiol/.

When seeking reoesignations or

reanributions. the comrninee must

inform donors that they may ask for

a refund of the excessive amount as

an alternative to providing a written.

signed redesignation or reauribution.' Failure to offer the option is a

violation of the law.

/ A candidate comnnnce Ill/I)' (I.\k (I

contributor 10 redesignate Ihe e.t('e,uil·e

ponion ofthe contribution ,10 that il

counls ogoitt.l'l Ihe donor's limit fm' (/

difjerell/ election I I CFR l lO.l(hJ(5J

and I I0 .2(hJ(5J. tnthc t'II.le of a reauribunon, a committee tcondidate or

noncandidmc ] " /fly request that Ihe

excessiveportion cfa joint-account

conmtnuion siKllell hy 0111.1' Ol/Cdonor he

reattrihuted /(J the second .fOIlO/", If'he'

conmbnnon WUJ immded /(J he a jo;m

one. Or, if bmh contributors iK IIII'

l ·hed ., the cn mminee may u.\( 111m Iht')·

adjustthe amount allrihurahfe 10 cuch i n

order 10 correct un exce ssive COf/l r i!,uliofl

hy 0111' oftht'm . II CFR IIO,I(k K3 J.

(Ho\lt'e,'er. joim (()Ilu ilN/liIJIIs mU ~1

represent lhe personal fW .f.~ of ea,h

donor because conuibnnons made in lilt'

name (Ifanreher are proh jhitt'd. JI CFR

JIOAh))

1A requestfor a r('ullrihuli()ll",U,f!

mctude oddilional iujo"""l/iofl. See

/I CFR 11O./(kK3KiiXAJ.

Fedl'/'(/I EI('('/iun COn/ntis.lion REC

• Making Refund Within 60 Days

the contributor asks for a refund

instead of submitting a redesign

or reauribution-or if the donor

never responds--rhe committee

must refund the excessive porti

within 60 days of receiving the

contribution. If the committee w

until the 6O-day period has exp

before sending the refund. the

committee will be in violationo

law.

For more information, consult 

appropriateCampoignGuideor 

Record Supplemell/ 0 11Contribun

(March 1988). To order free copi

these publications. call 800/424·9

or 202(219-3420. +

~I UR Released to the Pub

Listed below are FEe enforce

cases (Mailers Under Review or

MURs) recently released for pub

review. The list is based on the F

press releases of September 7 and 

1993, Files on closed MURs are

available for review in the Public

Records Office.

\ IUR 2HH9

Respond ents: (a) Wyoming Rur

Electric Association: (b) Craig

Thomas for Congress, John Wold

treasurer (WY);(c) National Citi

Action Network (CAl; (d) Wyom

Votes with Pride; (e) Good Gove

ment Group (WY)

Complainant: Sarah Gorin (WY

Subject: Campaign flyer; corpor

expenditures; disclaimer; failure 

register and report

Disposition: (a) $600 civil penal

(b) no probable cause; (c) probab

Cause to believe but took 00 furth

action (but matter was reported to 

IRS); (d) no reason 10 believe;

(e) probable cause 10 believe but 

no further action

[cominued ()Il pa
Federal Stection Commission RECORD

Regulations

{continuedfrom page J)

§439a. With the repeal of the "grandfather clause" under the Ethics

Reform Act of 1989, which prohibits

the personal use of campaign funds by

Members serving in the current

(l03d) Congress or later Congresses,

the agency expectsto encounter more

situations involving the personal use

prohibition. To address the increased

need for a clear definitionof personal

use, the agency drafted the proposed

rules for public comment.

The proposed rules, summarized

below, define personal use and

address situations when: personal use

comes into play: the payment of a

salary to the spouse or family member

of the candidate; payments to the

candidate for the rental of candidateowned property; and the sale of

campaign assets to the candidate.

(Please note that the proposed rules

do not govern the definition of

personal use found in the Internal

Revenue Service regulations at

26CFR 1.527-5(a)(1).)

The rulemaking notice also

contains a proposed rule on expenses

incurred in connection with the duties

of a federal officeholder, which may

be paid with excess campaign funds.

Definition of Personal Use

Under new paragraph 11CFR

113. 1(g), personal use would be

defined as the use of campaign funds

to pay for expenses that would exist

irrespective of the candidate's

campaign or responsibilities as a

federal officeholder. The personal use

provision would apply to the campaign funds of both current and

former candidates.

The rules would include several

examples of personal use, including

the use of campaign funds to pay for:

• Mortgage, rent or utility bills on

property not owned or leased by the

campaign committee;

• The purchase of clothing or household food;

• Tuition for a child;

4

• Dues, fees or gratuities paid to a

country club, tennis club, health and

fitnessclub or other social organizations. unless the payment is for a

fundraising event held on club

premises: and

• Salary paid to the candidate.

Salary Paid La Spouse or Family

Member. The definition of personal

usc would also include salary payments to the candidate's spouse or

another family member of the

candidate unless the individual was

hired to provide services that he or

she had previously performed in a

professional capacity outside the

campaign. Under an alternative

proposal, the salary would not be

considered personal use If the spouse

or family member were hired to

provide bona fide services at fair

market value, The agency sought

comment on which approach would

be preferable.

Paymentfor Use of CandidareOwned Property. The rulemaklng also

sought comment on alternative

proposals concerning campaign rental

of an office, residence or other

property owned or leased by the

candidate. One alternative would

depart from the current policy by

treating all such payments asthe

conversion of campaign funds to

personal use. The second alternative.

representing current policy, would

allow bona fide payments at the fair

market value.

Entertainment: Official Traw l;

Legal Fees. The Commission sought

comments on certain problematic

situations that may involve the

conversion of campaign funds to

personal usc, such as payments for

meals and entertainment (e.g..

sporting events. concerts) when the

activity does not appear to benefit the

campaign. As another example,

payments for fact-finding trips or

speaking engagements undertaken as

legitimate official duties of a Member

of Congressmay be transformed into

personal use of campaign funds if the

stay is extended beyond the obligaOctober 

non. particularly in the case of res

or overseas locations.

When the primary effect of the

activities is the entertainment of th

people who anend, rather than the

advancement of the campaign, the

campaign's payment does raise

personal use issues. The Commiss

asked whether itshould address th

situations in its regulations and, if 

how it might distinguish between

campaign- and noncam paign-rela t

activities.

The agency also asked how leg

expenses should be treated in the

regulations. In past advisory opini

payments for legal services not involving compliance or audit matte

under the Federal Election Campa

Act were not considered campaign

expenditures. thus raising the ques

whether such payments would con

tute personal use. Similarly, Mem

of Congress have used campaign

funds to make donations to other

Members' legal defense funds, ag

raising the question of personal us

Personal-Use Payments by Thir

Parties and Candidate' s Spouse

Under the proposed rules, paymentsthat would be conversions t

personal use if made by the campa

such as payment of the candidate'

rent or living expenses, would

generally beconsidered contributi

if made by a third party.

This provision would not apply 

payments by the candidate or the

candidate's spouse if the payment

carne from the candidate's or spou

personal funds.

Use of Ca mpa ign Eq uipment

for Noncampaign Purposes

Under the proposed rules. the u

of campaign vehicles or other equ

ment for noncarnpaign purposes is 

considered personal use as long as 

campaign is reimbursed at the usu

and normal rental charge within30da

Sale of Committee Assets

10Candidate

The proposed regulation on a

candidate's purchase of a campaig
October 1993

asset would address the issue of

depreciation. If the depreciation falls

di proportionately upon the campaign

committee, the effect would be the

conversion of campaign funds to the

candidate's personal use. Under the

proposed rule, any depreciation that

occurred before the sale would have

10 be allocated between the committee

and the candidate. So, too, would any

amount spent by the campaign to

enhance the asset's value if thai

amount was not reflected in the fair

market value.

The allocation would be based on

the useful life of the asset, with the

committee absorbing only those portions of the depreciation and enhancement costs attributable to the time

when it used the asset. This approach

is consistent with AO 1992-12

(candidate's assumption of van lease).

Federal Officeholder Expenses

With respect to the use of excess

campaign funds for expenses in

connection with officeholder duties.

the proposed regulations would

specifically permit payment of travel

costs (both for the officeholder and

his or her spouse) for functions

connected to bona fide official

responsibilities. The rules would also

permit payments for winding down

the office of a former federal officeholderfor a period not exceeding 60

days after he or she left office.

The rulcmaking notice reminded

federal officeholders that House and

Senate rules also apply to the use of

campaign funds: the proposed rules

should therefore be read in conjunction with those rules. •

Final Regulations

on Definition of "Member"

TIle Commission recently sent to

Congress final regulations specifying

the voting rights and financial attachments necessary for persons to qualify

as "members" of incorporated membership groups.

Only qualified "members" are

eligible to receive PAC solicitations

and part isan communications from

the incorporated membership group.

See 2 U.S.c. §441 b(b)(2)(A) and

(4)(C).

The revised rules were published in

the Federal Register on August 30,

1993 (58 FR 45770). The Commission will announce their effective date

after the 30-legislative day review

period. (See 2 U.S.c. §438(d).)

The final rules differ in two ways

from the proposed rules published in

the Federal Register on October 8.

1992 (57 FR 46348). First, the voting

rights required for membership have

been somewhat relaxed. Second, a

new rule has been added that pertains

to certain types of cooperatives. A

summary of the final rules appears

below. Citations are to the revised

rules.

It should be noted that the membership niles apply to both individual

and corporate members. Although a

membership group may not solicit

contributions from its corporate members, it may direct partisan communications to individual representatives

of corporate members, and a trade

association may seek PAC solicitation

approval from its corporate members.

11 CFR 114.8(d) and (h).

Defi nition of Membership

Association

A membership association is

defined as a labor organization I or as

I As in the fo rmer rules, members ofa

local labor union are considered to be

members ofany offiliated national or

international union and members of any

federation affiliated with the local.

national or international union . II CFR

I OO.8(b)(4)(iv)(D) and 114.I (e)(4).

Federal Election Commission RE

an incorporated membership org

zation, trade association, cooper

or corporation without capital st

that expressly:

• Provides for members in its art

and by-laws;

• Seeks new members: and

• Acknowledges the acceptance 

membership, such as by sendin

membership cards to new mem

or including them on a mailing 

11 CFR 100.8(b)(4)(iv)(A) and

11 4.I(e)(I).

Defin itio n of Me mber

In addition to satisfying the

association's requirements for

membership, a member must af

tively accept the membership in

tion and meet one of the followi

three conditions:

I. Regular Duesll.imited Vo ting

Rights. The member is requir

pay dues of a specific amoun

regular basis (e.g., annually o

monthly) and is entitled to vo

directly for: (a) at least one

member who has full particip

and voting rights on the highe

governing body of the associ

or (b) those who select at leas

member of those on the highe

governing body.'

2. Significant Financial Attachm

The member has some signif

financial attachment to the m

bership association,such as a

significant investment or own

ship stake, but not merely the

payment of dues.

3. FilII Voting Rights. The mem

entitled to vote directly for al

those on the highest governin

body of the membership asso

tion. 11 CFR IOO.8(b)(4)(iv)(

and I 14.I(e)(2).

(coil/inlied 0 11 p

2 The proposed rules had required t

right to vote directly for the majorit

the members of the association 's hi

governing body , or the right to vote 

those who select a majority of such

members.
.'Commit tees not required to file a post-general election report mustfil e a regular ye

end report .

Reporting Dates for Michigan Special Election

Novemb er 2 Primary and December 7 General

I Tile close ofbooks is the end of the reporting period. The period begins with the day

afterth e dosing dale of the last report fil ed. If the committee is new and lias nOI

pre viously fil ed a report. the first report must covel' all activity that occurred before t

committee registered and . if applicable . before the individual became a candidate.

Ortohl'rl 9

election must file the appropriate

report or reports as shown in the tab

Candidates who lose the primary

electiondo not have to file the preand post-general election reports.

ote that reponing i required o

if the individual has become a

"candidate" under the Federal

Election Campaign Act. Candidate

status is triggered when campaign

activityexceeds $5,000 in either

contributions or expenditures. 2

U.S.c. §431 (2). At that point, the

candidate and the principal campai

committee becomesubject to the

Act's registration and reporting

requirements. For more informatio

see theCampa ign Guide f or Congr

sional Candidates and Committees

48-lfour Notices. Principal

campaigncommittees must file 48-

hour notices on contributions of

$1.000 or more received after the 2

day. but more than 48 hours before

the date of any election in which th

candidate participates. The notice

Close Reg.lCert.

of Books I Mailing Date 2 Filing Dat

--

Pre-Primary October 13 October 18 October 21

Pre-General November 17 November 22 November 

Post-General/Year-End December 31 January 10 January 10

Year-End" December 3 1 January 3 1 January 3

2Reports sent by registered or certified mail are considered 10 he fil ed 0 11 lime ifthey 

postmarked by this dale.

I Unless sent bv registered or certified mail (see note 2). reports IIIlIsl he received by 

f ederal and state filin g offic es hy this dale.

./This line shows the reporting dalesfor a consolidated post- generaltyear-end report

Alteruatively, a comm ittee may fil e IWO separate reports : (f ) a post-generalreport

covering activity through December 27 and due 1(111101)' 6; and (2) a year-end repor

covering activity fro nt Decemb er 28 through December 3 1 (four days) and due Janua

3/.

Special

Elections

Reporting by Candidate

Committees

Pre - and Post-Election Reports.

Principal campaign committees of

candidates on the ballot in a special

Michigan Special Elections

Michigan will hold a special

primary election on November 2 and

a special general election on December 7 to fi ll the 3rd Congressional

Districtseat of the late Congressman

Paul Henry. who died July 31 . This

article explainsthe reporting requirements for these special elections and

provides information on contribution

and coordinated party expenditure

limits.

If you have any question , please

call the FEC: 800/424-9530or 202/

219-3420.

Federal Election Commission RECORD

Multi-tiered Associations;

Farm and Rur al Electric

Cooperatives

The voting rights and financial

attachment criteria set forth in the

definition of member govern whether

three-tieredor multi-tiered associations can solicit member across all

tiers. For example, in a three-tiered

membership association. if members

at the local level have the requi ite

ties to both the tate and national tiers,

solicitation is permissible across all

three tiers. See, for example, AOs

1992-9,1991-24 and 1981-23.

Although members of federated

farm and federated rural electric

cooperatives do not have the precise

financial and organizational ties

required under the rules, they nevertheless have significant tie throughout all levels. The structure and

organization of these cooperatives are

comparable to those of federations of

trade associations. Like federations of

trade associations under section

114.8(g). federated farm and rural

electric cooperatives are authorized to

solicit and to direct partisan communications to members of their regional, state and local affiliates

provided that politicalcommittees

established by the affiliates are

considered affiliated committees.

subject to shared contri bution limits.

II CFR 114.7(k). ..

The Commission may consider, on

a case by case basis, whether other

membership arrangements would

satisfy the definition of member. For

example,student members who pay

lower dues while in school, or longterm members who qualify for

lifetime memberships with no further

dues obligations, may be considered

members if they retain some voting

rights in the association. 1I CFR

100.8(b)(4)(iv)(C) and 11 4.I(e)(3).

An association should seek an

advisoryopinion for fu rther guidance

on alternative membership arrangements.

egulations

(continued from page 5)

6
•

•

•

()I"/oher IW.I

must be received by the federal and

stale filing offices within 48 hours

after the campaign's receipt of the

contribution. 2 U.S.c. §434(a)(6)(A);

II crs IlIl.5(f).

This requirement applies to all

contributions of $1.eX)() or more,

includ ing:

• Monetary and in-kind contributions:

• Loa ns (otber than bank loons);

• Guarantees and endorsements of

bank loans: and

• Contributions. personal loans and

endorsements of bank loans made by

the candida" . 2 USc. §431(SXA);

I I CFR 100 .7(. ).

With respect 10 the Michigan

special elections. contributions of

$ 1.000 or more received during lhe

following periods are subject to 48 -

hour reponing:

• Primary: October 14 through

October 30

• General: November 181hrough

December 4.

The notice must be received by the

federal and state filing offices within

48 hours after the campaign's receipt

of the contribution. 2 U.S.c.

\ 434(a)( 6)( A); II CFR 104.5(1).

For information on the content of

the notice, see II Cf'R 104.5(t) and

the Campaign Guide.

Repor ting by Party Commit tees

and PACs

Semiannual Filers, Party committees and PACs filing on a semiannual

(rather than monthly) basis are subject

to special election reporting if they

make previously undisclosed contributions or expenditures in connection

with the Michigan primary or general

election by the close-of-books date

shown in the reporting table. II CFR

IlIl.5(c)( I)hi) and Ih).

For example. if a PAC made a

contribution on October 14 to a

candidate running in the Michigan

primary, the committee would nor

have to file a pre-primary repon

because the contribution was made

after October 13, the close of books

for that report. If the committee made

a general election contribution 10 the

same candidate on November 5-

before the close of books for the pregeneral election repon-e-the committee

would have to file that report, disclosing both the primary and general

election contributions.

Monthly Filers. PACs filing on a

monthly basis are OOt required to tile

pre- and post-special election reports

but may have to file 24-hour reports.

as explained below. See 2 lf.S'C.

§434(.)(9 ); I I CFR IlIl.5(h)(2).

!4-Hour Repo rts on Independent

Expendit ures

PACs (including monthly filers)

and other persons making independent expenditures in connection with

a special election may have to file 24-

hour reports. This report is required if

the committee or person makes

independent expenditures aggregating

$ 1.CXXl or more after the 20th day. but

more than 24 hours before. the day of

the election. With respect to the

Michigan special elections. the

relevant periods are;

• Primary: October lsthrough

October 31

• General: November IRthrough

December 5.

The report must be filed within 24

hours after the expenditure is made.

For more information, see II CFR

104.4(b) and (c) and 104.5(g). See

also "Where to File" for special filing

requirements.

Where 10 File :\'lichi gan Specia l

Election Reports

Filing with the Federal Office.

Principal campaign comrmnees tile

reporrs and 48-hour notices with the

Clerk of the House of Representatives. Other committees file reports

with the FEe (except that those

supporting only House candidates file

with the Clerk of the House). I I CfR

105.I .nd 105.4.

Twenty-four-hour reports on

independent expenditures are filed

with the Clerk of the House. I I Cl-"R

IlIl.4(cX3).

Fedt'l(/! ElectionCommission REC

Addresses and further filing

information are provided in the F

3and Form 3X instructions.

FilillS 'With Michigan Stale Off

Copies of all reports and notices.

including 48-hour notices and 24

reports. must simultaneously be f

with; Elections Bureau. Office of 

Secretary of Stare. P.O. Box 201

Lansing. MI 4890 1-0726. 2 us.c

\ 439(. )( I) and (.)(2)IB); II CFR

108.5.

Party committees and PACs n

tile only that portion of the repor

applicable 10 the candidate seekin

election in that state (e.g.. the Sum

mary Page and the schedule show

the contribution or expenditure).

2 USc. §4391.1(2)(B).

Contrtb utlo n Limits

There is a separate contributio

limit for the each election in whic

candidate participates (primary.

seneraI). 11 CFR 11 0. 10 )( 1) '00

110.20XI).

Coordinated Pa rty Expenditur

Limits

The national committee of a

political party and the party's stat

com mittee in Michigan may each

spend up to $28.460 in coordinat

party expenditures made III conne

tion with the general election cam

paign of the pa rry 's candidate. (T

state committee's spending limit 

separate from the national comm

tee's limit. ) 11 CFR 110.7(b)(l ).

Prohibit ion on Transfers

fro m Nonfedera l Campaigns

Campaigns of candidates parti

paring in the Michigan special

elections should note that transfer

from a candidate's nonfederal

campaign to his or her federal

campaign are prohibited. I I CFR

11O.3(d). +
FederalElectionComminioll RECORD

Advisory

Opinions

AO 1993·9

Preemption of State Law

Prohibiling Corporate Donalions to Party Building Fund

The Michigan Republican Slate

Committee may accept corporate

donations to its building fund for a

party headquartersdespite a Michigan

State law that would prohibit the use

of corporate funds for an office used

even occasionally for campaign

purposes. The state law is superseded

by federal law, whichclearly permits

such donations.

Building Fund Exemption

Under the Federal Election

Campaign Act and FEC regulations,

donations specifically designated to

pay for the construction or purchase

of a national or state party office

facility are exempt from the prohibitions and limits on contributions

provided the facility is not acquired

for the purpose of influencing any

particular federal election. 2 U.s.c.

§431(8)(BXviii); I I CFR IOO.7(b)(I 2),

IOO.8(b)(I3) and 114.I(a)(2)(i,).

Committee 's Proposals

The Committee plans to solicit

corporate donations designated for its

building fund and to deposit them in a

separate account.I The funds will not

be used to influence any particular

federal election; nor will they be used

to pay property taxes and assessments

on the headquarters. in accordance

with ADs 1991-5 and 1983-8.

I The Committeesaid it would rely on AO

199/ -5 fo r reporting guidance . That

opinion said that building f und donations

were rlOl subject 10 fede ral reporting If

they were deposited in a separate accowl/

lhal was rlOl a "political commiuee"

underfederal la w. However. the ACI

would not preempt ally stale requirement

to report buildinR fund activity.

8

Specifically. the Committee plans

to undertake one or allof the following activities:

• Establish a building fund to payoff

the balance of the land contract on

its presentheadquarters;

• Establisha building fund to purchase or consuucr a new headquarters;

• Sell its interest in the land contract

and deposit the proceeds in the

building fund established for a new

headquarters.

All three of the Committee's

proposals comply with the building

fund exemption. The proposal to raise

funds to pay off the land contract is

permissible since the funds will be

used to complete the purchase of the

existing headquarters. The proposal to

sell the Committee's interest in the

contract is essentially the same as

raising fundsfor a new headquarters.

See also ADs 1991-5 and 1986-40.

Pr eemption of State Law

The Act and FEC regulations

"supersede and preemptany provision

of State law with respect to electionto

Federal office." 2 U.S.c. §453;

11 CFR 108.7(a). The provisions on

building fund donations address areas

explicitly under the authority of

federal law. Congresstook the

affirmative step of exempting such

donations from the Act's proscriplions. Furthermore. unlike certain

exempt patty activities.' there is no

indication that Congress intended co

limit the building fund exemption to

the federal portion of the cost. AD

1991-5. For these reasons, federal law

supersedes the Michigan prohibition

on corporate donations to patty

building funds.

Dale Issued: August 6. 1993;

Length: 5 pages, plus I-page joint

dissent filed by Vice Chairman Potter

and Commissioner Elliott. +

1Commission regulations refl ect the

Congressional intent 10 allocate these

activities. See I I CrR I OO.7(b)(9),

(15)(ii) and (17)(ii), and I OO.8(b)(10).

( 16Xii) and (18)(ii).

OClOber 

AO 1993·11

Transfer from Nonfederal

Campaign to 1988 Presiden

Compliance Fund

The general election legal and

accounting compliance fund (GEL

fund) established by the 1988

Dukakis-Benrsen Presidential Com

mineeI may retain funds transferr

from the Dukakis Gubernatorial

Committee (the strate committee) 

June 1993. Although federal cand

date committees were required to 

their accounts of nonfederal camp

transfers by July 31, 1993, in orde

comply with a new regulation

prohibiting such transfers. the reg

tion was meant to prevent the use 

transferred funds in connection w

elections held afterJuly I. the

effective date of the rule. In this ca

the funds will be used to pay legal

I The Presidential campaign of a publ

f unded major party nomin ee ma y

establish a GEIAC[und. which is use

pay the legal and accounting CO.US of

complying with the campaign finance

law. It isfunded through private cont

butions subject 10 the fe dera / limits a

prohibitions.

Federal Register

Copies of Federal Register notice

are available from the Public

Records Office.

199.1· 19

I I CFR Parts 100 and 113: Expen

ditures; Personal Useof Campaign

Funds; Notice of Proposed Rulemaking (58 FR45463. August 30

1993)

199.1-20

II CFR Pans 100 and 114: Defini

lion of "Member" of Membership

Association: Final Rule; Transmittal 10 Congress(58 FR45770.

Augusl30. 1993)

199J -21

Filing Dares for MichiganSpecial

Elections (58 FR 46642. September2. 1993)
•

•

•

expenses arising from the 1988

Presidential election. and they may

therefore be retained.

The state committee originally

transferred $380.000 10 launch the

Dukakis 1988 Presidential primary

campaign. The Presidential committee, winding down irs activities in

1989.lransferred that same amount

from the GELAC fund to the state

committee. believing the funds 10 be

surplus. Rut in June 1993.lhe state

committee re-transferred $50.000 to

the GELAC fund [0 cover unexpected

legal expenses stemming from FEe

enforcement actions.

By that lime. the Commission had

announced [he July I effective date of

the new rule prohibiting [he transfer

of funds from a candidate's nonfederal campaign [0 his or her federal

campaign committee or account

( I I em I IO.3(d» . The notice

explained thai committees would

have until July 3 1 [0 remove prev iously transferred nonfederal funds,

but the agency excepted from this

requirement any nonfederal funds

transferred for use in special elections

held before July I. 58 FR 17967

(April 7, 1(93), (Severalspecial

elections were held between the April

announcement and the July I effective date.) This exem ption. however,

was meant to apply 10 funds transferred before July I for use in any

type of election held before tha t date,

including regularly scheduled elections, The GELAC fund is therefore

permitted 10 retainthe nonfederal

funds. assuming that they comply

with federallimits and prohibitions

and are used only in connection with

tbc 1988 Presidential elections.

Date Issued: August 6, 1993;

Length: 4 pages. +

AO 1993-\3

Excess Campaign Funds

Donated for Scholarships

The Fowler for Senate Campaign

Committee.the 1992campaign

committee of former Senator Wyche

Fowler. may donate its remaining

funds to establish a scholarship

program for minority students at

Oglethorpe University. Thecommittee 's circumstances. with no remaining debts. indicate that the funds to be

donated are excess campaign funds,

'The law specifically permits donations of excess campaign funds to

organizations which, like the University, have qualified as section 1700c)

organizations under the Internal

Revenue Code. 2 u.s.C. §439a:

II CFR 113.2(b). The donation

should be reported under the category

"other disbursements."

Date Issued: August 6. 1993;

Length: 3 pages. +

AO 1993-1~

Preemption of State Law's

Registrat ion. Reporting and

Contribution Requirements

The Federal Election Campaign

Act, which has sole authority over the

regulation of federal elections.

supersedes a slate law that would

impose registration, reporting and

contribution requirements on the

federal account of the Rhode Island

Democratic State Committee and on

federal political committees making

contributions 10 the federal account. '

2 us.c. §453.

I The Commission noted that questions

regording the uaivuies ofthird pon ies do

not qualify as advisory opinion requests

under II CFR 112.1(b}. However, the

ogene."did noc consider the pa rty

commiuee:s(lueSlion umurning IIU'

application ofstate tawto other commitlees as a third parryrequest because of

lhe impact onfuture co nirdnuions 10the

federal account. liI'hich liI'OUJd likel."bto

curtailed if donor commuters had to

compl... Miith stale requiremems.

Federal Election Commission REC

The party commirree's federal

account is a federally registered

committee used solely for federa

election activity. (The party also 

nonfederal account registered wit

state.) The Rhode Island Board o

Elections recently concluded that 

federal account wassubject to Sla

law and would therefore have to:

register and file reports with tbe s

contr ibute 10 at least five Rhode

Island candidates: and accept no 

than S1,(0) per year in contribut

from an individual or comminee

The Board also said that a fede

registered PAC would be subject 

the same state requirements if it m

a contribution to the party's feder

account.

R:C regulations. which reflec

Congressional intent concerning

federal preemption of state law,

provide that federal law supersed

stale law in the areas of registrati

reponing. contributions received 

expenditures made by political

cornminees supporting federal

candidates. II CFR 108.7(b),

Federal law therefore preempt

Rhode Island law with respect to

limits on contributions to the part

federal account. Jn the absence o

lionfederal activity by the federal

account. the imposition of the sta

registration. reporting and compu

contributions requirements on the

federal account would encroach u

the Act's authority in those areas

The state requirements. therefore

not apply 10 the federal account 

would they apply to a political

committee solely because of its

contribution to the federal accoun

Date Issued: August 13. 1993

Length: 5 pages. +

(OpiniOns continued on fNig

1 However, were tbef ederat accOllnt 

enga.r:e in nonfederal acti\'ity. 1M pa 

committee mighl be subject to state

restrictions.See AO 1986-27.
Advisory Opinions violations of the Act (e.g.. excessive Compliance

[continuedfrom paee 9) loans). Moreover, the Justice Depan- (continued from page 3 )

AO 1993-15 

ment has other bases within Title 18

(the criminal code) for proceeding M UR3110

Funds Raised for Legal against activities within the purview Respondents (all in CO): (a) M.D

Expenses Related 10 DOJ of the Act. For example, the indict- Holdings, lnc., and its subsidiaries

Investigation of Cam paign mer it ' s description of mail fraud Larry Mizel. president: (b) Larry

Consulta nt charges refers to violations of the Act Mizel: (c) Hank Brown for U.S.

The Tsongas Committee, Inc" the and FEC regulations that resulted Senate, Melvin D, Flowers, treasu

1992 Presidential campaign commit- from mail fraud activities. (d) 18 individuals

Post-election contributions raised Complainant: Representative tee of fanner Senator Paul E. Tsongas, to defray the legal expenses must be Patricia Schroeder (CO) has retained a law fir mto advise the Subjec t: Corporate contributions;

campaign and its personnel during the donor-designated for the 1992

primary and must be aggregated with contributions in the names of othe

course of a Department of Justice

previous contributions from the Disposition: (a)-(c) reason to beli

investigation of the campaign's

principal fundraising consultant, who donors to ensure compliance with the but look no further action; (d) reas

has been indicted on 47 counts of contribution limits. AOs 1990-17 and to believe but took no further actio

1991-16. (16 individuals); no reason to belie

illegal activity.' Because the activities

Vice Chairman Potter filed a (2 individuals) being investigated f<lll within the

purview of the Federal Election concurring opinion; Commissioner M VR 3216

Campaign Act and directly implicate Elliott filed a dissenting opinion. Date Respondents: Jim Rappaport for

its provisions. funds raised to defray Issued: August 26. 1993; Length: 4 Senate, Vincent Santoro, treasurer

the legal expenses are considered pages plus 2-page concurrence and 2- (MA)

contributions, subject to the Act's page dissent. + Complainant: William Elsbree.

limits. prohibitions and disclosure treasurer. Kerry for Senate in '90

requirements.' However. payments Ad visory Opinion Requests

Comminee (\1A)

for the legalservices do nor count Subject: Failure to file 48-hour 

against the Presidential primary The advisory opinions requests notices disclosing candidate 10Ms

expenditure limits, II CFR lOO.8(b)(5), (AORs) listed below are available for Dlsposttlon: $12,000 civil penalty

This conclusion is consistent with review and comment in the FEe's

past advisory opinions in which the Public Records Office, VR 3J8-'

Commission determined that the costs Respondents: Re-Elect Senator P

of legal representation for post-elec- AO R 1993-17 Committee, Emilie Benoit, treasur

non FEC audit and enforcement mat- Application of federallaw to party (RI)

rers were clearly within the scope of committee's allocation of federal and Complainant: FEC initiated

the Act. Even though the COSIS oc- nonfederal expenses when stale law Subject: Excessive contributions

curred after the election, funds raised mandates specific allocation form ula. Disposition : $5,500 civil penalty

and spent to defray them were consid- (Massachusetts Democratic Party;

ered to be contributions and expendi- August 31, 1993; 9 pages) M UR -'690

tures. AOs 1990-17 and 1981-16. AOR 1993-18

Respondents: (a) National Repub

Although the Tsongas campaign's can Congressional Cornr nittee, Do

situation pertains to a Justice Depart- Corporation's program 10 encourage Singleton, treasurer (DC): (b) Gilb

ment investigation. that agency has

employees and retirees to volunteer as for Congress, Richard Buxton.

criminal enforcement authority with campaign workers. (Southwestern treasurer (ID)

respect 10 Ihe Act, and many of the

Bell Corporation; September 9, 1993; Complainant: Martin Peterson,

indictment counts explicitly refer to 4 pages) campaign manager, I.akccco for

AOR 1993-19 Congress (ID)

Retiring 8-year-old debt of PresidenSUbject: Disclaimer on postcard

I The indictment indicates thatthe Disposition: (a) Reason to believe 

consultant may hove misappropriated a rial committee through contributions look no further action: (b) no reaso

large amount of campaign contributions. in excess of the limits from the to believe

candidate and other donors. (Friends

!This conclusion does not apply to legal of JaM Glenn; September 22, 1993; M UR 3700 expenses incurred in connection with 8 pages plus 5-page enclosure) + Respondents: (a) Hoosiers for Dic

invesugated activities that do not pertain Moun::lock, J. William Dunn, treas

to the campaign or its f unding,

r edeml Electio" Commi.Hion RECORD

' 0

Ou ooer 
•

•

•

October1993 _

(1\';); (b) National Republican Congressional Commtrree. Donna

Singleton, treasurer (DC)

Complainant: Melinda Plaisier.

campaign manager. McCloskey for

Congress Corrururree (IN)

Subject: Mailing of postcard;

disclaimer

Disposition: (a) and (b) No reason 10

believe

MlJR 3769

Respond ents: An thony for Congress.

Orlin Trego, treasurer (OK)

Complainant: FEC initiated

Subject: Failure to file 48-hour

notices on contributions

Disposition: 52,000 civil penalty

MlJR 3805

Respondents: (a) Worley for Congress 19S1 0, Gregg Brasher, treasurer

(GA); (b) Bernadette Drankowsk i

(GA)

Complainant: FEC initiated

Subject: Excessive contributions;

loans; misstatement of financial

activity; debt

Dlsposlticn: (a) and (b) Reason to

believe but took no further action

MlJR 3808

Respondents: (a) Lenawee County

Republican Committee. Mary

Leffingwell, treasurer (MI); (b) Harry

Newlin (Ml)

Complainant: FEC initiated

Subject: Excessive contributions

Disposition: (a) and (b) Reason to

believe but rook no further action

other than admonishment letter .

Index

The first number in each citation

refers to the "number" (month) of the

1993 Record issue in which the article

appeared. The second number, following the colon, indicates the page number in that issue.

Advisory Opinions

1992-38: Loan from Presidential

campaign's legal and compliance

fund to public funding account. 1:6

1992-40: Commissions eamed by

state party commit tees. 2:5

1992-41: Solicitation of members, 3:3

1992-42: Bank deposit lost in mail,

3;3

1992-43: Preemption of state law's

fundraising restrictions. 3:4

1992-44: Qualifying as national party

committee, 6:5

1993-I: Campaign's rental of storage

unit from candidate, 4:8

99 ~2: Application of pa rty spending

limits to Texas special runoff, 4:9

1993-3: Retroactive reallocation of

1991-92 activity, 5: I

1993-4: Electronic payment of bills

through computer, 6:5

1993-5: 1992 con tributions misplaced

at post office. 6:6

1993-6: Use of excess funds by

former House member, 7:6

1993-7: Name of corporate PAC, 9:6

1993-8: Preemption of state law

prohibiting contributions from

incorporated comrninees. 9:6

1993-9: Preemption of state law

prohibiting corporate donations to

party building fund, 10:8

1993-1 0: Use of excess campaign

funds, 9:7

1993-11 : Transfer from nonfederal

campaign to 1988 Presidential

compliance fund, 10:8

1993-13: Excess campaign funds

donated for scholarships, 10:9

1993-14: Preemption of state law's

registration, reporting and contribution requirements, 10:9

1993-1 5: Funds raised for legal

expenses related to DO] investigation of campaign consultant, 10:I0

Federal F.lnliiJl/Commi.u iO/!!! F.C

Court Cases

FEC v.

- America's PAC. 4:10

- Californians for a Strong Amer

10;3

- lntemational Funding Institute

5;2

- Miller, 6:8

- National Republican Senatoria

Committee (93-0365), 6:8

- People & Politics, lnc., 3:3

- Political Contributions Data, ln

8;6

__ v. FEC

- Common Cause (92-0249 (JHG

4;10

- Common Cause (92-2538), 1:8

- Democratic Senatorial Campa

Committee (93-1321),8:7

- Dukakis. 8:7

- Khac haturia n. Bf

- Lakouc he (92-I IOO), 9:3

- laRouche (92-1555), 1;8: 6;8

- Nationa l Rifle Association (92

50781,4;10

- Simon, 8:7

- Spannaus (91-068 1), 6:7

- White (93-771), 6;8

U.S. Senator John Seymour Com

tee v, Dianne Feinstein, 1:8

Weber, et a l. v. Heaney, et al., 8:

Reports

Last-minute contributions: 48-ho

reponing, 4:7

Reponing problems, leiter to new

candidates, 4:8

Schedule for 1993. 1:3; 6:I

Special elections

- California. Mississippi, Ohio,

Texas and Wisconsin, 3:I; 4:7

- Michigan, 9:10; 10: 6

State filing, 9:6

800 Line Art icles

Credit card contributions, 5:5

Party committee allocation: carry

debts from previous election cy

2;7

$25,000 annual limit, 4:2
Federal Election Commission RECORD

Change of Address

Political Committees

Treasurers of registered political committees automatically

receivethe Record. A change of address by a political

committee (or any change to information disclosed on the

Statement of Organization) must, by law, be made in writing

on FECForm 1 or by letter. The treasurer mustsign the

amendment and tile it with the Secretary of the Senate, the

Clerk of the House or the FEC(as appropriate) and with the

appropriate state office.

FEDERAL ELECTION COMM ISSION

999 E Street, NW

Washington, DC 20463

Official Business *

Printed on recycled paper

October 

--------

Other Subscribers

Record subscribers who arc not registered political

committeesshould include the following information when

requesting a change of address:

• Subscription number (located on the upper left comer of

the mailing label):

• Subscriber's name;

• Old address; and

• New address.

Subscribers(other than political committees) may correc

their addresses by phone as well as by mail.

Bulk Rate Mail

Postage and Fees Paid

Federal Election Commi ssio

Permit Number G-31