20463 Volume 17. Num

19 INDEX

13 STATISTICS: PAC Activi ty

16 COMPLIANCE: MURs Released to the P

11 AUDITS: Dole for President Committ

REGULATIrnB

9 Grandfathered Candidates' Use of

Campaign runds

COORT CASES

9 Dole v. International Association

Managers, Inc.

10 FEe v. Lawson

10 FEe v. National Republican Senatori

Cornmi ttee

11 New Litigation

6 AWlSORY OPINIOOS

5 FEDERAL ROOISTER lCI'ICES

SPECIAL ELECTIOOS

1 Arizona and pennsylvania

800 LINE

1 PACs: Allocating Expenses

TABLE OF CCNI'ENTS

MIZCfiA AND PmNSYLVANlA

SPECIAL ELECTlOOS

pennsylvania and Arizona have sched

special elections to fill recently vaca

seats. PoIiti cal commi. t tees authorized 

candidates participating in these elect

must file reports according to the tabl

that appear on pages 3 and 4.

PACs and party committees may also 

to file reports in connection with spe

elections, as explained below.

(continued on p

999 E Street NW Washington DC

FEDERAL ELECTION COMMISSION

June 1991

Who Must Allocate?

Why Allocate?

PACs must allocate expenses that jointly influence federal elections (presidential, u.s. House and u.s. Senate) and nonfederal elections (state and local). The

reason for this is that they must use "hard

money"--funds that comply with federal

law--to pay for the federal portion of the

expense. The new rules provide specific

allocation formulas to determine the federal portion of each allocable expense, i.e.,

the aroo:.mt that must be paid with funds

that are permissible under federal law.

PACs with Federal and Nonfederal

Accounts. The allocation rules apply to

SSFs and nonconnected PACs that maintain

both a federal account (that is, an account

registered under federal law) and a

nonfederal account (which may be registered

under state law). The federal account is

the "hard money" account-the account which

is used for all of the PAC's federal

activity and which contains funds raised in

(continued on p. 4)

PACS: ALLOCATING FEDERAL AND

~ERAL EXPENSES

Many PACs have called the FEe asking

whether they are subject to the new allocation rules that became effective at the

beginning of 1991. This article explains

when PACs must allocate and what expenses

must be allocated. The article covers both

separate segregated funds and nonconnected

PACs:

o A separate segregated fund (SSF) is a c~ttee established by a

corporation--including an incorporated

trade association or other nonprofit

corporation--or a labor organization.

11 CFR 114.1(a) (2)(iii). An SSf is also

referred to as a corporate or labor PAC.

e A nonconnected Ene is a committee that is

r.ot a corpcrate or labor PAC, a party

committee or a committee authorized by a

federal candidate. 11 CFR 106.6(a).
Federal Election COIaDission, 999 E Street, NW, Washington, DC 20463

800/424-9530 202/376-3120 202/376-3136 (TOO)

June 1991 FEDERALELECTION COMMISSION

Arizona Special Elections

Arizona has scheduled special elections

to fill the 2nd Congressional District seat

of Congressman Morris K. Udall, who

recently retired. The special primary will

be held August 13, 1991, and the special

general election, September 24. Note that

the mid-year report is waived for

committees filing pre-primary reports. See

the tables of reporting dates on page 3.

Pennsylvania Special Election

Pennsylvania has scheduled a special

general election for NoveniJer 5, 1991, to

fill the seat held by the late Senator John

Heinz. See the tables of reporting dates

on page 4.

The Republican and Democratic nominating conventions are scheduled to be held in

June 1991. The CorrmUssion has decided not

to require pre-primary reports for these

conventions. Instead, committees will

include convention activity in their midyear reports due July 31.

Authorized CcmIlittees:

48-UOUr Notices on Contributions

Authorized committees must file special

notices on contributions of $1,000 that are

received after the 20th day, but more than

48 hours, before an election. The dates

that apply to the 48-hour notice requirement for the special elections are shown

below.

o Arizona Primary: 7/25-8/10

o Arizona General: 9/5-9;21

o Pennsylvania General: 10/17-11/2

please note that this' special notice

requirement applies to all types of contributions, including:

o In-kind contributions;

o Loans (other than bank loans);

a Guat':antees and endorsements of bank.

loans; and

o Contributions, personal loans and

endorsements of bank. loans made by the

candidate.

The notice must reach the appropriate

federal and state filing offices within 48

John warren M.cGarry, Chaiman

Joan D. Aikens, Vice Chairman

Lee Ann Elliott

'lhomas J. Josefiak

Danny L. McDonald

Scott E. 'lbomas

Volume 17, Numb

hours after the committee's receipt of t

contdbution. Note that notices may be 

faxed to the secretary of the Senate and

the Clerk of the House. ~ax numbers are

Senate--202/224-1851; House--202/225-778

Note also that only 48-hour notices may 

submitted by fax machine because they do

not require the treasurer's si~ature;

other reports and statements may not be

faxed. AD 1988-32. - For information on the content of th

notice, see 11 CFR 104.5(f).

Information for PAn; and Party Cormdttee

SEmiannual Filers. A PAC or party c

mittee that reports on a semiannual basi

during 1991 must file special election

reports if it makes contributions or

expenditures in connection with a specia

election during the coverage periods sho

in the tables. PACs may also have to fi

24-hour reports on indepe~dent

expenditul:es.

Monthly Filers. PACs and party comm

tees that file monthly during 1991 do no

have to file special election reports, b

PACs may have to file 24-hour reports on

independent expenditures.

24-Hour Reports on Independent Expen

tures. My PAC (including a monthly fil

that makes independent expenditures in

connection with a special election may h

to file a 24-hour report. This reportin

requirement will be triggered if the

committee makes independent expenditures

ag9regating $1,000 or more after the 20t

day, but more than 24 hoursI before the

election. The dates that apply to the 2

hour reporting requirement for independe

expenditures are shown below.

o Arizona primary: 7/25-8/11

o Arizona General: 9/5-9/22

o pennsylvania General: 10/17-11/3

The report must be filed with the

appropriate federal and state filing offices within 24 hours after the expendit

walter J. Stewart, Secretary of the Senate,

Ex Officio Commcissioner

Dorma1d lI:. Anderson, Clerk of the House of

Representatives, Ex Officio Commissioner

2
Coomittees 'Ibat SUpport candidates in Bo

the 8113 Primary and the 9;24 General

CoDmi.Uees 'JlIat Support candidates in th

9;24 General only

7/31

9/12

10/2

Reg/Cert

Mail~ng Fili

Date Date

Req/Cert

Mail~ng Fili

Date Date

7/31

9/9

10/24

Reg/Cert

Mail~ng Fili

Date Date

Volume 17, Numb

Period 2

Covered

-----------waived--------

1/1-7/24 7/29 8/1

7/25-9/4 9/9 9/12

9/5-10/14 10/24 10/2

Perioo 2

Covered

1/1-6/30

7/1-9/4

9/5-10/14

Period..2

Coverea-

-----------waived---------

1/1-7/24 7/29 8/1

Report

Repo["t

Mid-year

pre-primary

Pre-general

Post-general

Mid-year

pre-general

Post-general

Report

Mid-year

Pre-primary

conmittees That SUpport candidates in th

8/13 primary cnJ.y

1These tables do not apply to FACs or pa

committees that file on a monthly basis,

since they are not required to file spec

election reports. They may, however, ha

to file 24-hour reports on independent

expenditures. See page 2.

2A reporting period always begins the da

after the closing date of the last repor

filed. If the committee is new and has 

previously filed a report, the first rep

must cover all activity that occurred

before the committee registered and befo

the individual became a candidate.

3Reports sent by registered or certified

mail must be postmarked by the mailing

date. Otherwise, they must be received 

the filing date.

3

June 1991 FEDERAl ELECTION COMMISSION

Coordinated Party Spending Lim!ts

The coordinated party spending limits

for Arizona and Pennsylvania are:

o Arizona House Seat: $26,500

a Pennsylvania Senate Seat: $481,602.

These amounts may be spent by the

party's national committee on behalf of the

party's nominees in the Arizona and Pennsylvania special general elections. state

party committees in Arizona and pennsylvania may also spend up to the appropriate

lim!t on behalf of the party's nominee.

11 CFR 110. 7(b).

State Filing

In addition to filing with the appropriate federal office--the Clerk of the

House, the Secretary of the Senate or the

FEC--eommittees filing Arizona and Pennsylvania special election reports must also

file copies of reports with the appropriate

state office.

a Arizona: Office of the secretary of

State, State Capitol, West Wing, 7th

Floor, 1700 West washington, Phoenix, AX

85007.

a pennsylvania: Pennsylvania Bureau of

Commissions, Elections and Legislation,

305 North Office Building, Harrisburg, PA

17120-0029.

Authorized committees of candidates

must file the entire report; other committees must file only the portion of the

report that is applicable to the candidate

(for example, the Form ax sumnary Page and

any schedules that disclose contributions

or expenditures on behalf of the candidate). 2 U.S.C. S439(a); 11 CFR 108.3.

is made. For more information on this

reporting requirement, see 11 CFR 104.4(b)

and (e) and 104.5(9).
coomi. ttees '!bat Support candidates in the

11/5 General Election

Volume 17, Numb

lIf an unregisted group makes any expen

tures to influence federal elections, i

must either: (1) be able to demonstrate

through a reasonable accounting ID@thod 

it has sufficient funds permissible und

federal law to cover the allocated fede

portion of the expense; or (2) use a se

rate account containing only funds perm

sible under federal law. 11 CFR 102.5(

2A corporate or labor nonfederal accoun

must register as a federal account if i

conducts any activity--regardless of

amount--to influence a federal election

11 CFR 100.5(b) and 102.1(cl. Because

these accounts are likely to contain fun

that were not solicited in compliance w

federal rules, the nonfederal account

should avoid federal activity. There i

one exception: If the nonfederal accou

is affiliated with a federal account, i

may act act as a collecting agent for

contributions to the federal account. 

activity will not trigger federal statu

but special rules apply. See 11 CFR

102.6(h) and (c).

compliance with the Federal Election

Campaign Act and FOC rules. The nonfede

account is used solely for state and loc

election activity.

PACs with two accounts must allocate

certain expenses that are shared between

the two accounts (see page 5). 11 CFR

102.5(a) (1)(i) and 106.6(a).

Nonconnected PACs 'lhat Do Not Maint

a Federal AcCOlDlt. If a nonconnected PA

maintains only a nonfederal account, it

must nevertheless allocate expenses if i

conducts any activity to influence a fed

al election. In that case, it must make

sure that its federal activity--includin

the federal portion of its adncinistrativ

expenses--is paid from funds that comply

with t£e federal law's limits and prohib

tions. 11 CFR 102.5{bl and 106.6(a). 

the PAC's federal activity exceeds $1,00

in a calendar year, it must register and

report as a federal account. 11 eFR

100.5(a} and 102.1(d).)

NOTE: The above paragraph does not

apply to nonfederal accounts o~ corporations and labor organizations.

(continued from p. 1)

4

10/24

12/5

7/31

Reg/Cect

Mail~q Filing

Date Date

7/31

Reg/Cert

Mai.l~ng Filing

Date Date

FEDERAL ELEC-nOI'J COMMISSION

Period 2

Covered

1/1-6/30

7/1-10/16 10/21

10/17-11/25 12/5

Period 2

Covered

I These tables do not apply to PACs or party

committees that file on a monthly basis,

since they are not required to file special

election reports. They may, however, have

to file 24-hour reports on independent

expenditures. See page 2.

2A reporting period always begins the day

after the closing date of the last report

filed. If the committee is new and has not

previously filed a report, the first report

must cover all activity that occurred

before the committee registered and before

the individual became a candidate.

3Reports sent by registered or certified

mail must be postmarked by the mailing

date. otherwise, they must be received by

the filing date.

Repoct

Pre-general

Post-general

Mid-year

Report

June 1991

Committees '!bat SUpport candidates in

Connection wi th the June Republican and

Democratic Nominating conventions
June 1991 FEDERAL ELECTION COMMISSION

Who Does lCl' Have to Allocate?

If a PAC does not have a nonfederal

account but, instead, conducts all of its

activity (including any nonfederal activity) from an account that is federally

registered, then allocation is unnecessary.

Moreover, under certain circumstances,

an SSF may not have to allocate even though

the corporation or labor organization maintains a nonfederal account. This exception

is explained more fully below.

Eltception for SSFs

If the connected organization (i.e.,

the sponsoring corporation or labor

organization) pays all of the SSF's

administrative expenses and solicitation

costs, allocation of those expenses is not

necessary. 11 CFR 106.6(b)(I)(i) and (i1).

Note that no allocation is required if:

o The connected organization pays for all

the administrative and solicitation

costs; and

o The federal and nonfederal accounts do

not engage in activities that jointly

benefit federal and nonfederal candidates. (See items 3 and 4 under "What

Expenses Must Be Allocated.")

What Expenses Must Be Allocated?

The following mixed federal/nonfederal

expenSeS must be allocated:

1. Administrative expenses, including

rent, utilities, office supplies and

salaries (but see exception for SSFs,

above) ;

2. Expenses for fundraising through which

the committee collects both federal and

nonfederal funds (but see exception for

SSFs, above);

3. Expenses for direct support of specific

federal and nonfederal candidates (such

as media communications and fundraising

on behalf of specifi3 federal and nonfederal candidates);

4. Expenses for generic voter drives,

which are activities that urge the public to register, vote or support candidates associated with a particular party or a particular issue but which do

3Direct support of specific federal candidates (e.g., fundraising or communications)

results in in-kind contributions or

independent expenditures. 11 CFR

106 .1(a) (1).

5

Volume 17, Numb

not mention specific candidates. 4

11 CFR 106.1{a)(2) and 106.6(b).

More Information on Allocation

This article is intended to explain

when allocation is necessary. For more

information on allocation, including all

cation formulas, payment procedures and

reporting requirements, order a free cop

of the Record Supplement on Allocation f

the FEe (800/424-9530; 202/376-3120).

f'EDERAL ROOISTER tUrICES

Copies of Federal Register notices a

available from the Public Records Office

1991-3

Filing Dates for Texas special Elections

(56 FR 12732, March 27, 1991)

1991-4

Filing Dates for Illinois Special Electi

(56 FR 12731, March 27, 1991)

1991-5

11 eFR Parts 107, 114 and 9008: Presidential Election Campaign Fund and

Federal Financing of Presidential No~nating conventions; Suspension of

Rulemaking (56 FR 14319, April 9, 1991)

1991-6

11 eFR Parts 102 and 113: Use of Excess

Funds; Notice of proposed Rulemaking (56 

18777, April 24, 1991)

1991-7

11 CFR Parts 104 and 106: Rulemaking

Petition: Association of State Democra

Chairs; Notice of Availability (56 FR

18780, April 24, 1991)

4Allocation of federal/nonfederal expens

is unnecessary if a corporation or labor

organization uses general treasury funds 

pay for partisan and nonpartisan voter

drives conducted in accordance with 11 C

114.3(c)(4) and 114.4(c).
June 1991 FEDERAL ELECTION COMMISSION

1'DVISQRY OPINICN RD;lUESTS

Recent requests for advisory opinions

(AORs) are listed below. The full text of

each AOR is available for review and comment in the FEe's Public Records Office.

ADR 1991-14

State party committee's use of tax funds

designated by individuals on state checkoff. (Date Made Public: April 17, 1991;

Length: 4 pages)

ADR 1991-15

Transfer from party committee's nonfederal

account to federal acount to correct

federal account's overpayment of allocated

expenses. (Date Made Public: May 2, 1991;

Length: 3 pages)

AOR 1991-16

Commercial use of contributor information

filed under Indiana state law but on FEe

forms. (Date Made Public: May 3, 1991;

Length: 20 pages)

1lOR 1991-17

Corporate payment of educational video tape

featuring House Member. (Date Made Public:

May 3, 1991; Length: 7 pages)

ALTERNATE DISPOSITIOO' OF

AIJIlISORY OPINI(N ~T

AOR 1991-7: Corporate In-Kind Donation

Applied to Nonfederal Portion

of National party CODIIIittee's

J\dmi.nistrative Expense

This AOR was withdrawn by the requester on

April 24, 1991.

ArNISOIfi OPINIm SlJMM1\RIE'S

AD 1991-3: PAC Newsletter Distributed

outside Restricted Class

TEX/OON PAC, the separate segregated fund

of TEX/OON Oil & Gas Company, may distribute its newsletter outside the restricted

class because the newsletter's content--

information and commentary related to

issues and legislation in the oil and gas

industry, and occasional listings of

candidates supported by the PAC--does not

constitute a solicitation.

In the past, the Commission has concluded that a communication concerning a

6

Volume 17, Numb

PAC was not a solicitation when the info

mation neither:

o Encouraged support of the PAC; nor

o Provided information on how to

contribute. ADs 1988-2, 1983-38, 1982

65, 1980-65, and 1979-66; compare AD

1979-13.

In this case, the Commission reached 

similar conclusion based on a sample of 

newsletter and TEX/CON'S representation

that the newsletter will refrain from:

o Discussing fundraising;

a Discussing employee monetary involveme

(i.e., contributions to the PAC); or

o Encouraging employee support of the PA

In its newsletter, TEX/CON PAC plans 

present itsview5 on policy issues, ofte

identifying the officeholder or legislat

proposing a course of action. If such

articles discuss candidates who have bee

listed as receiving support from the PAC

the wording must not imply that support 

the PAC would help elect or defeat those

candidates. (The Commission also noted

that, because the corporation pays the

newsletter costs, the publication must n

contain partisan communic~tions, since i

will reach those outside the restricted

class. 11 crR 114.3(a)(1).)

The PAC also plans to include a disclaimer in each issue stating that only

employees of the company may contribute 

the PAC and that other contributions wi

be returned. The disclaimer itself does

not constitute a solicitation, but the P

must amend the notice to clarify that th

only type of employees that may make con

tributions are executive and administrat

personnel. 2 u.s.c. S441b(b)(4)(A)(i);

11 erR 114.5(g){1).

Commissioners Danny L. McDonald and

Scott E. Thomas filed a dissenting opini

(Date Issued: April 15, 1991; Length: 

pages, including the dissent)

AD 1991-6: calculating the Ballot

composition Ratio; Allocatin

Expenses Incurred Before 199

In calculating its ballot composition

ratio, the California Democratic party

(COP) may include one nonfederal point f

"nonpartisan" local candidates because,

under current california law, party com

tees may actively support or endorse loc

candidates even though their party affil

tion does not appear on the ballot.

Because there will be two U.S. Sena

seats on the California ballot in 1992, 

must count each seat as one federal poin

in the ratio.

With respect to administrative and

fundraising expenses incurred in 1990 bu
FEDERAL ELECTION COMMISSION

•

June 1991

still outstanding in 1991, COP may continue

to use the allocation ratios calculated for

its 1990 activity• A1 though the new allocation rules now specify the fonnulas that

committees must use, the rules did not become effective until January 1, 1991.

Similarly, the payment procedures and reporting requirements contained in the new

allocation rules are also inapplicable to

pre-1991 expenses, even if paid in 1991.

Allocation Ratio

Under the new rules, state and local

party committees with separate federal and

nonfederal accounts must allocate their

administrative expenses and generic voter

drive costs between those accounts using

the "ballot composition method." 11 CFR

106.5(d). This ratio is based on the

number of federal offices compared with the

total number of federal and nonfederal offices expected to be on the ballot in the

next general election held in the committee's state or geographic area. 11 eFR

106.5(d)(I)(i).

Nonpartisan Local candidates. The ballot composition method permits state party

committees to include a maximum of one nonfederal point for all "partisan local

candidates" on the ballot. 11 CFR

106.5(d)(1)(ii). under the California

Constitution, however, elections for local

office are "nonpartisan. 11 COP way nevertheless count one nonfederal point for

these candidates in its ballot ratio

because, under current California law, COP

may actively support, endorse or oppose

nonpartisan candidates. A 1986 consti tutional amendment that had prohibited such

activity was recently held unconstitutional

by a u.s. court of appeals (Geary v.

Renne) • The Commission noted, however,

that the Supreme Court has agreed fo hear

this case, and should the Court reverse the

appeals court decision, the Commission

would have to reconsider its conclusion.

U.s. senate Seats. california will be

holding elections to fill two u.S. Senate

seats in 1992. (One election will fill the

seat currently held by Senator Alan Cranston, who will be retiring at the end of his

term. The other election will fill the

seat vacated by Governor Pete Wilson

following his gubernatorial election.)

lLocal party committees may count one oonfederal point for one partisan local office

or a maximum of two nonfederal points for

two or more offices. 11 CFR 106.5(d)(1)

(ii) •

7

Volume 17, Numb

Normally, only one U.S. Senate seat is o

the ballot in anyone year. For the 199

election cycle, however, COP must count

each Senate seat as one federal point wh

calculating its ballot composition ratio

rather than treating the two together as

one point.

Counting each seat as one federal po

is consistent with the "average ballotll

concept in which the number of federal

offices counted in the ratio corresponds 

the number of federal candidates the ave

age voter can cast ballots for in the ge

eral election. Moreover, the situation 

comparable to an example noted in the Ex

planation and Justification (E&J) for se

tion 106.5(d). The E&J explains that, i

states (such as California) where the go

ernor and lieutenant governor are electe

independently instead of on one ticket, 

party committee may count the office of

lieutenant governor separately because

voters 2ast a separate ballot for that

office.

Rounding the Ratio. The Commission

noted that, when a ratio does not result 

a whole number, the committee may round 

the nearest whole number. For example,

COP's ballot composition ratio is 57.14

(federall and 42.86 (nonfederal). After

rounding the numbers, the ratio is 57

percent federal and 43 percent nonfedeea

Prec-1991 Expenses

Administrative Expenses. COP may co

tinue to apply its 1990 allocation ratio 

administrative expenses incurred before

1991. The new allocation rules, effecti

January 1, 1991, do not apply to debts f

goods or services peovided during the pr

vious year. Those expenses are subject 

the rules in place in 1990, which did no

provide specific allocation methods for

different types of expenses. (In future

election cycles, committees must apply t

allocation ratio foe the election cycle 

which goods and services are received ev

if the contract for the goods or service

is signed, and a debt thereby incurred,

dudng the previous cycle.)

(continu

2A party's candidate for lieutenant gove

nor, if elected separately from the gove

nor, is included in the ballot ratio cat

gory "other partisan statewide executive

candidates." A maximum of two nonfedera

points may be counted in this category.

11 CFR l06.5(d)(1)(iil.
June 1991 FEDERAL ELECTION COMMISSION

Fundraising Expenses. Similarly, fundraising expenses incurred for solicitations

made before 1991 should be allocated and

paid according to the ratio in place in

1990. contributions received in 1991, but

which relate to a 1990 solicitation, may be

included when determining the allocation

formula applied to the 1990 fundraising

effort.

Payment and Reporting. COP need not

apply the new rules on payment procedures

and reporting to the payment of its pre1991 expenses. However, when reporting

payments for such expenses, CDP should note

that the payment relates to an administrative or fundraising expense for goods or

services provided in 1990.

(Date Issued: April 25, 1991; Length:

8 pages)

NJ 1991-8: Payment to Senator for

Radio series

Payments to Senator Thomas A. Daschle for

participating in a series of radio debates

are considered stipends, rather than honoraria, because he will receive payment for

services provided on a continuing basis and

pursuant to a written contract. As stipends, the payments are not subject to Ithe

$2,000 per appearance honorarium limit.

FEe rules exclude stipends from the

definition of honorarium. Stipends are

payments for services provided on a continuing basis and include compensation paid by

news media for commentary on events other

than the election campaign of the person

compensated. 11 eFR 110.12(c)(3). The

circumstances in Senator Daschle's request

are materially indistinguishable from past

advisory opinions in which the Commission

concluded that certain payments constituted

stipends rather than honoraria. See ADs

1991-4, 1989-30, 1985-4, 1980-140 and 1980-

76. In this case, the Senator entered into

a written contract with the producer of the

series to prepare and record debate scripts

over a six-month period. The contract

stipulates the compensation to be paid by

the produce r•

lAs a result of the Ethics Reform Act of

1989, the Commission's authority to regulate honoraria under 2 u.S.C. §44li is now

limited to U.S. Senators and Senate officers and employees. The Ethics Reform Act

prohibits all other federal officers and

employees--including Members and staff of

the House of Representatives--from accepting honoraria.

8

Volume 17, Numb

The Commission noted that applicatio

of Senate Rules to the activity and pos

ble tax ramifications were outside the

FEC's jurisdiction. (Date Issued: Apr

26, 1991; Length: 4 pages) 

N) 1991-10: candidate's use of Assets

Jointly Held with Sp:rose

Sherwood Guernsey's wife will not make 

contribution to his Congressional campa

by cosigning a bank loan because the ci

cumstances described in the opinion qua

for a specific exemption in FEC regulations. Mr. Guernsey may also withdraw 

of the assets held in an investment acc

held jointly with his wife without caus

her to become a contributor.

Generally, a person makes a contrib

tion, subject to the limits, when he or 

endorses or guarantees a bank loan that

will be used for campaign purposes.

2 U.S.C. §431(8)(A)(i) and (vii)(I); 11 

100.7(a)(I) and 10D.7(a)(I)(i)(C). An

exception to this rule applies to bank

loans obtained by the candidate but nee

the signature of his or her spouse When

jointly owned assets are used as collat

for the loan. under these circumstance

the spouse does not make a contribution 

cosigning the loan as long as the candi

date's share in the property equals or

exceeds the amount of the loan. 11 eFR

lOO.7(a}(I){i)(D).

The candidate'S share of assets joi

held with a spouse is the portion indic

in the instrument of conveyance or owne

ship. If a specific share is not indic

ed, then one-half the value of the asse

considered the candidate's share. That

share constitutes the candidate's perso

funds. 11 CFR 110.10(b)(3). See also

11 eFR 110.10(b)(I). (Unlike other con

tributors, including family members, ca

dates may make unlimited contributions 

personal funds to their own campaigns.

11 CFR 110.10(a).)

In this case, Mr. Guernsey is using 

family home as collateral for the loan.

Half the value of the equity held in th

home is considered Mr. Guernsey's perso

funds. Because this amount, about

$115,000, is greater than the loan for 

campaign ($110,000), Mrs. Guernsey may 

cosign the loan without becoming a

contributor.

With respect to the investment acco

Mr. Guernsey appears to lack legal righ

access to or control over the account

without his wife's signature. See 11 C

110.10(b)(1). As a joint tenant with h

wife, however, he may use up to half th

assets for his campaign without Mrs. Gu
Volume 17, Numb

DOLE v. INl'ERNATICtiAL

ASSCCIATIrn MANAGERS, INC!

On February 14, 1991, the U.S. Dis

trict Court for the District of Arizona

granted the FEe's motion for leave to

intervene in the case. (Civil Action N

CIV 90-0129 PHX RCB.)

The suit was filed by the Departmen

Labor and its secretary, Elizabeth Dole

They alleged that defendants failed to p

overtime wages in violation of the Fair

Labor standards Act. International AssO

ciat ion Manage rs, Inc. (!AM) and two of 

officers were named as defendants. Cou

for the defense took depositions from tw

former IAM employees who defendants beli

are involved in the Department of Labor

investigation and in an ongoing investig

tion by the FEC. When questioned about

their communications with the two agenc

the employees refused to answer, citing 

"govenunent informant's privilege. It De

dants then filed a motion to compel the

employees to respond to these questions

In response to the defendants' motio

the FEC filed a motion to intervene in t

case or to file an amicus response to d

fendants' motion to compel. The court

granted the motion, stating: "The inte

of the FEe in protecting against disclos

of the identity of info~mants and the

nature of informants' communications wi

the FEe is similar to the interest the

Department of Labor seeks to protect•..

interest of the two agencies may not be

identical, however, and the court can se

no reason for requiring the FEe to rely 

another agency to protect its interest."

The court also denied defendants'

motion to compel the testimony of the tw

employees. Further, it granted the FEe

motion for a protective o~der to prohib

defendants from questioning any witness 

learn the identity of persons communica

with the FEe and the nature of those com

nications. The court granted a motion 

a similar order requested by the Departm

of Labor to protect that agency's commu

cations.

IThe orde r was amended on Apri 1 1, 1991, 

correct a typographical error.

9

FEDERAl ELECTION COMMISSION

ProPOSPD rn "GRl\NDFA'lHEBED"

~IDA'IES' PERS<:fiM, USE OF EXCESS FUNDS

On April 24, 1991, the Commission published a Notice of proposed Rulemaking that

sought comments on draft changes to the

rules on the conversion of excess campaign

funds to the candidate's personal use. The

proposed rules at 11 CFR 113.1 and 113.2

would apply only to "grandfathered" candidates--Members of Congress who held office

on January 8, 1980. Written comments were

due on May 24, 1991. See 56 FR 18777.

Candidates who are not "grandfathered"

continue to be prohibited from converting

excess f~s to personal use. "Grandfathered" Members, who were previously allowed to convert unlimited amounts to personal

use, can no longer do so. This change is

contained in the Ethics Reform Act of 1989,

enacted on November 30, 1989. That Act

amended 2 U.S.C. S439a in two respects:

o "Grandfathered" Members of Congress who

serve in the l03rd or a later Congress

will be unable to convert any excess

funds to personal use once the 103rd

Congress convenes on January 3, 1993.

o In the meantime, "grandfathered" Members

may convert only an amount equal to the

campaign's unobligated balance as of

November 30, 1989.

The Notice of proposed Rulemaking reflects the Ethics Reform Act amendments and

proposes two alternative methods of calculating the November 30, 1989, campaign

balance.

under the first method, the campaign of

a "qualified" (i .e., "grandfathered" ) Member would simply determine its cash on hand

as of the November 1989 date and subtract

total outstanding debts as of that date.

The second method would permit the campaign

to include noncash campaign assets and committee receivables in its November 3D,

1989, balance, but additional reporting

would be required. These methods follow

the Commission'S determination in AO 1990-

26, summarized in the March 1991 Record.

June 1991

sey's being a contributor. Those assets

are considered his personal funds. (The

Commission assumed the assets were not

otherwise encumbered and expressed no

opinion on such encumbrance.)

commissioner Lee Ann Elliott filed a

concurring opinion. (Date Issued: April

12, 1991; Length: 7 pages, including the

concurrence)

•
June 1991 FEDERAL ELECTION COMMISSION

FEe v. IRISCN

On April 8, 1991, the u.s. District

Court for the District of South Carolina,

Greenville Division, granted the FEC'S m0-

tion for default judgment. (Civil Action

No. 6:90-2116-9.; The Commission claimed

that Mark Lawson knowingly permitted his

name to be used to effect a contribution

made in the name of another, a violation of

2 U.S.C. §441f. The FEC alleged that, in

1982, Mr. Lawson re ceived a $1, 500 bonus

from his employer, Robin's Mens Store, in

order to make a $1,000 contribution two

days later to the House campaign of Robin

Tallon, Jr.

The court decreed that Mr. Lawson had

violated §441f and ordered him to pay a $5, 000 civi! penalty within 10 days. The

court also permanently enjoined Mr. Lawson

from future violations of §441f.

FEe v. Nl\TICHU. REPUBLIO\N

SENA'IURIAL tnvn'l"l'EE .

On April 9, 1991, the U.S. District

Court for the District of Columbia ruled

that the National Republican Senatorial

Comrndttee (NRSC) and its treasurer made

$2.3 million in excessive contributions by

exercising "direction and control" over

earmarked contributions. (CiVil Action No.

90-205S(GAG).) The court imposed a $24,000

civi! penalty .

Background!

In its suit, the Commission alleged

-that NRSC had made $2.3 million in excessive contributions to 12 senate candidates

in violation of 2 U.S.C. §441a(h). These

contributions were the result of a series

of direct mail solicitations in which NRSC

asked contributors to write checks to benefit 1986 Republican Senate candidates in

four states. In the fall of 1986, NRSC

mailed several versions of the solicitation

letter, varying the four states mentioned

in the letter according to the geographic

area of the recipients. None of the 12

candidates involved in the Senate races was

named in the letters. Recipients were

asked to write checks payable to NRSC or

different accounts controlled by NRSC {such

IThis suit emanated from a another suit,

Cammon Cause v. FEC, in which the court

ordered the FEC to reopen an administrative

complaint (MUR 2282) that Common Cause had

filed against NRSC. For a summary of that

court case and MUR, which provide further

background to this case, see the OCtober

1990 issue.

10

Volume 17, Numb

as the "Inner Circle"). The solicitatio

letter said that the amount an individu

contributed would be divided equally am

the four campaigns mentioned in the let

The Commission alleged that the con

butions counted against NRSC's limits f

the 12 candidates because the conrnittee

exercised "direction or control" over th

choice of the recipient candidates. FE

rules at 110.6(d) prOVide that, if an e

ty acts as a conduit for earmarked cont

butions, the contributions count agains

the conduit's contribution limits (as w

as the original contributor'S) if the c

duit exercises "any direction or contro

over the choice of the ~ecipient candid

The Commission also alleged that, b

failing to report the contributions pai

the 12 candidates as contributions from

NRSC, the committee violated the report

requirements of 2 U.S.C. §434(bl and 11 

110.6(d)(2). {The contributions were r

ported by NRSC and the candidates' comm

tees as contributions from the individu

donors.)

District Court Decision

The court declared that NRSC exerci

"direction or control" over the choice 

the recipient candidates "because NRSC

devised the solicitation; matched subgr

of the twelve candidates with groups of

donors; presented donors with a pre-sel

ed division of contributions among preselected candidates; did not identify t

candidates by name; requested checks pa

able to NRSC and associated entities an

not to the individual campaign committe

failed to inform donors, as required by

law, that the individual campaign conun

tees had authorized and helped pay for 

mailings; and merged and confused the g

eral needs of the Republican party with 

needs of the individual Senate candidat

NRSC's Arguments. The court rejecte

NRSC's argument that the "direction or 

trol" provision in FEe rules (11 CPR

llO.6(d)) was not authorized by the Fed

Election Campaign Act. The court found

that the regulation conforms to legisla

intent: A conduit may not use earmarke

contributions as a means to circumvent 

contribution lim!ts. Adopting an appro

suggested in the legislative history, th

FEC's "direction or control" regulation

defines when an earmarked, contribution

applies to the conduit's limit.

The court also rejected NRSC's argum

that the "direction or control" provisio

unconstitutionally limits political spe

The court fOWld that the provision does 

impose any new restrictions on the cont
FEDERAL ELECTION COMMISSION

$306,730

$302,949

Volume 17, Numbe

state spend- Amount Sp

ing Limit OVer Limi

$775,218

$461,000

Iowa

New Hampshire

using a fOrmula to determine what po

tion of the $609,679 in excessive expend

tures was paid with public funds (rather

(continue

Expend!tures in Excess of the Iowa

and New Hampshire spending Limits

The Commission deterndned that the D

Committee had exceeded the Iowa and New

Hampshire spending limits by a total of

$609,679:

FEe REI.F.1\SES DOLE AUDIT REPORT

On April 30, 1991, the Commission

released the final audit report on the D

for President Committee. Senator Dole

received $7.618 million in primary match

funds for his 1988 Presidential campaign

Based on the results of the audit, the

Commission made an initial determination

that the Committee repay a total of

$245,534 to the U.S. Treasury. The repay

ment total is based on the audit findings

summarized below.

If the Committee does not dispute the

initial determination within 30 days, the

repayment amount becomes final and is pa

able within 90 days of the iniUa1 deter

mination. 11 CFR 9038.2(c) and (d).

Final audit reports are available for

review in the Public Records Office.

Schaefer v. FEe

J. Michael Schaefer asks the bankrup

court to declare that the FEC has no

claims against him with respect to an FE

administrative complaint that is still

unresolved. Mr. Schaefer, a 1986 Marylan

Senatorial candidate, and his principal

campaign committee were named as respond

ents in the administrative complaint and

would be responsible for paying any civi

penalties that might be imposed. Mr.

Schaefer has filed for Chapter 11 bankru

cy.

U.S. Bankruptcy Court for the southe

District of California, Adversary Procee

ing No. 91-90240 (related-to 8ankruptcy

Case No. 87-05174-LM111, April 19, 1991.

11

June 1991

NEW LITIG1l.TIOO

Penalty. The FEC requested a substantial civil penalty. The maxium civil

penalty the court could have imposed was

over $4.6 million. However, because the

record did not suggest that NRSC had

intentionally violated the law, the court

imposed a $24,000 penalty

Spannaus v. FEe (91-0681)

Edward w. spannaus, as treasurer of the

LaRouche Democratic Campaign, asks the

court to find that the FEC's dismissal of

his administrative complaint was contrary

to law. In his administrative complaint

(MUR 2163), Mr. spannaus alleged that the

the American Jewish Committee and the AntiDefamation League of the S'nai B'rith had

violated the law by failing to register and

report as political committees. He claimed

that the organizations triggered political

committee status in 1986 when they allegedly opposed the Presidential candidacy of

Lyndon LaRouche and other "LaRouche Democrats" campaigning for federal office. The

Commission found probable cause to believe

that the Committee and the League, as nonprofit corporations, had made prohibited

expenditures but, because of the "relativeIy low dollar amount ;" decided to take no

further action.

U.S. District Court for the District of

Columbia, Civil Action No. 91-0681, April 2, 1991. -

bution limits, which the courts have consistently upheld as a means of preventing

corruption or the appearance of corruption.

Finally, the court rejected NRSC's

argument that the "direction or control"

regulation cannot constitutionally be appI ied to a pclitical party committee . NRSC

had argued that the government's anticorruption concern in limiting contributions does not apply in the case of a political party's contributions to a candidate

affiliated with the party. The court disagreed, stating that "political party comndttees do not have an exalted cons~itutional status that would automatically

exempt them from limits imposed on other

political committees." Accordingly, because the contribution limits for party

committees are constitutional, the court

also found the "direction and control"

provision constitutional.

•
June 1991 FEDERALELEC1l0N COMMISSION

than private contributions), the commission

initially determined that the Co~ttee

spent $170,044 in public funds on excessive

expenditures and must pay that amount to

the Treasury. (The fonuula is explained at

11 eFR 9038.2(b)(2)(iii).)

In determining the amounts spent in excess of the Iowa and New Hampshire limits,

the Commission disallowed certain exemptions claimed by the Dole Committee. Moreover, in several categories of expenses,

the Commission increased the amounts that

should have been allocated to the two

states. The audit report also found that

campaign America, a PAC associated with

Senator Dole, had made testing-the-waters

expenditures on behalf of the Dole Committee that should have been allocated to Iowa

and New Hampshire.

Expenses 'lttat 'Were Not Exeupt. The

Dole Committee claimed that 25 percent of

expenses for travel and appearances by Senator Dole and his wife did not have to be

allocated to the state spending limits

because they qualified as exempt fundraising expenditures under 11 CFR 100.8(b)(21l

and l06.2{c)(5)jii). Applying this exemption, the Commdttee excluded $28,450 and

$13,997 from the Iowa and New Hampshire

limits, respectively. The audit report,

however, disallowed the exemption because

the Committee failed to provide any documentation to show that the events were

related to a fundraising appeal. The

expenses therefore counted against the

state limics ,

The audit report also excluded from the

fundraising exemption certain expenses for

mailings that could not be verified as

fundraising activity (i.e., mailings for

which the Committee failed to provide documentation that they contained a solicitation). The report therefore allocated the

amounts for the unverified mailings to the

state limits: $51,936 to Iowa $43,619 to

New Hampshire.

Finally, the audit report disagreed

with the Committee's application of the 10

percent compliance exemption to its media

costs. Under the compliance exemption at

l06.2Ic) (5)(i), legal and accounting costs

incurred solely to ensure compliance with

the law are exempt from the spending

limits. Ten percent of staff salaries and

overhead expenses may be treated as exem.pt

compliance costs not subject to state

allocation. The Committee applied this 10

percent exemption to its media costs,

contending that the costs of producing the

required disclaimer message were compliance

related. The Committee excluded $16,061

and $13,961 from the Iowa and New Hampshire

12

Volume 17, Num

limits, respectively. The audit repor

however, said that the 10 percent exem

is "very specific and narrowly drawn." 

does not apply to costs for disclaimer

notices. The excluded costs were there

allocated to the state limits.

Expenses 'lt1at were under Allocated

The Commission determined that, for sev

categories of expenses, the Committee

failed to allocate the correct amount t

the state limits.

8ecause the Committee's New England

regional office functioned primarily as 

New Hampshire office, the Commission di

not accept the Committee's regional

allocation of office expenses. Instead

the agency determined that the Committ

should have allocated an additional $54

to the state spending limit.

The Commission also determined tha

because phone banks set up in Kansas an

Nebraska were not exclusively targeted 

Iowa, the charges for Iowa calls were n

allocable to the state spending limit.

other costs associated with the phone

banks, however, were allocable (a

proportion of salary and overhead charg

The resulting change to the existing

allocation was immaterial.

The Committee failed to allocate

$21,497 and $31.637 in polling expense

the Iowa and New Hampshire limits, resp

tively. The committee also paid a pol

$30,898 to conduct Focus Groups held in

Iowa and New Hampshire. The Committee 

tended that Focus Groups were not targe

to Iowa and New Hampshire voters but w

held to assess commercials for the nati

media. The Commission determined that 

Committee did not have to allocate cos

for Focus Groups.

The Commission found that the follo

additional costs should have been alloc

to Iowa (IA) and New Hampshire (NH):

a Phone calls: $23,280 (IA) and $1,696

(NH)

o Broadcast media: $2.596 (IA) and $3

(NH)

o Media commissions: $2,665 (IAJ and

$2,988 (NFl)

o Staff travel and salaries while on

travel: $73,162 (IA) and $66,349 (N

o Non-travel salaries and miscellaneou

costs (e.g., meeting and event expen

$35,180 (IA) and $31,085 (NH).

campaign .AlDerica's Testing-the-Wat

Expeoditures. Campaign Arne rica had sp

money to determine whether Senator Dol

should seek the Presidential nominatio

'I'hese "testing-the-waters" expenditure

became campaign expenditures once he b
19

(continu

1987

------I~1

1986

Volume 17, Numbe

1980 1982 1984

$60 f-----==------1

$0

$30

$90

$120

1990 4,681 $372.4 $358.1 $103.1 $10

1988 4,832 $384.6 $364.2 $ 89.0 $12

1986 4,596 $353.4 $340.0 $ 69.1 $1

1984 4,347 $288.7 $266.8 $ 55.1 $ 9

1982 3,722 $199.5 $190.2 $ 31.5 s 5

1980 2,785 $137.7 $131.2 $ 22.0 $ 2

Millions of Dollars

$150 -

Total E\mds Funds cash on

Cycle PACs Raised Spent Hand De

PAC Contributions by Candidate Statu

1980 - 1990 Election Cycles

_ Incumbents

_ Challengers

_ Open Seats

8l.mIDar:y of PAC Activity

1980-1990 Election Cycles

(millions of dollars)

The FEe press release of March 31,

1991, offers summary figures for each cat

gory of PAC as well as historical statistics comparing PAC activity over the last

six election cycles. The study also list

the "top 50" PACs in each category--those

that raised and spent the most money duri

the 1990 cycle. The accompanying tables

and graphs (pp. 13-15) are taken from the

study. To order a copy of the statistica

press release, call the Public Records

Office at 800/424-9530 or, locally,

202(376-3140.

13

FEDERAL ELECTION COMMISSION

Stale-Dated Checks

Audit staff identified $71,733 in

stale-dated Committee checks that had never

been cashed by the payees. The Commission

made an initial determination that the

Committee repay the entire amount under

11 CFR 9038.6.

Delegate CcRJmi.ttee' 5

Undocumented Expenditures

The audit report found that delegate

committees affiliated with the Dole Committee had made $13,470 in expenditures that

lacked any documentation. See 11 cm

9038.2(bl (3). Applying the repayment

formula to these expenses, the Commission

made an initial determination that the Dole

Commdttee repay $3,757, to the Treasury.

June 1991

PAC /lCITVIT'i DROPS

lXJRnG 1989-90 ELECTIai CYCLE

Largely as the result of a decrease in

activity by nonconnected PACs, total funds

raised and spent by all PACs for the 1990

election cycle declined by 3 percent and 2

percent, respectively, compared with the

1987-88 cycle. As shown in the stmltlary

table below, PAC actiVity had previously

increased each election cycle.

While the activity of most categories

of PACs increased during the 1990 cycle,

total receipts for nonconnected PACs fell

32 percent, from $106.3 million for the

1988 cycle to $72.4 for the 1990 cycle.

Disbursements made by nonconnected PACS

declined 31 percent, from $104.9 million in th~ 1988 cycle to $72.4 million in the 1990

cycle. By contrast, corporate PAC receipts

increased by 10 percent, and labor PAC

receipts increased by 13 percent.

a Presidential candidate. 11 CFR 100.8(b)

(1 ) . As such, they should have been allocated to the state spending limits. 11 CFR

9034,4(a)(2). The Commission determined

that $33,889 spent by campaign America

should have been allocated to the Iowa

limit. These expenditures represented

costs related to the use of telephone survey results; staff salaries and expenses;

and meetings and events attended by Senator

Dole. The Conmission also determined that

$4,517 in Campaign America expenditures for

telephone costs and voter lists were allocable to the New Hampshire limit.
1 Chart does not includeactivityby PACsof incorporated cooperatives and corporations without capitalstock.

78 SO 82 84 86 8

Trade/Members

Health

Volume 17, Num

78 80 82 84 86 88 90

Nonconneeted

_ Independent Expenditures

_ Contributions to Candidates

78 SO 62 64 86 88 90

Labor

FEDERALELECTION COMMISSION

78 80 82 84 86 88 90

Corporate

$0

14

$60 ,-------------'-------- ----

$50

$40

$20

$30

$10

June 1991

MIllions of Dollars

PAC Support of Candidates 1

1978 -1990 Election Cycles
June 1991 FEDERAL ELECTION COMMISSION Volume 17, Numb

PACs Grouped by Amounts Contributed to Candidates 1

• 1990 Election Cycle

Range of SO $1 $5,001 $50,001 $100,001 $250,001 $500,001 $1,000,001 I To

Contributions: I I I I I I I

$5,000 $50,000 $100,000 $250,000 $500,000 $1,000,000 and over

Corporate

Number of PACs 437 552 671 140 126 33 5 1 

"10 of PAGs 22'% 28% 34% 7% 6% 2% <1% <1%,

Dollars (in millions) $0 $1.08 $12.74 $9.91 $18.83 $10.95 $3.22 $1.46 $

% of Dollars 0% 2% 22% 17% 32% 19% 6% 3%

Labor

Number of PAGs 143 109 62 8 17 10 12 11 

% of PACs 38% 29% 17% 2% 5% 3% 3% 3%

Dollars (in millions) $0 $0.17 $0.95 $0.63 $3.19 $3.37 $9.20 $17.28 $

% of Dollars 0% <1% 3% 2% 9% 10% 26% 50%

Noneonnected

Number of PAGS 833 254 173 32 34 8 3 0 

% of PAGs 62% 19% 13% 2% 3% <1% <1% 0%

Dollars (in millions) $0 $0.47 $3.09 $2,37 $4.78 $2.66 $2.21 $0 $

% of Dollars 0<'10 3% 20% 15% 31% 17% 14% 0%

Trade/Member/Health

Number of PAGs 195 208 257 57 44 14 12 9 

''10 of PACs 25% 26% 32% 7'% 6% 2% 2% 1%

Dollars (in millions) $0 $0.38 $4.82 $3.96 $7.29 $4.54 $8.31 $15.10 $

% of Dollars 0% <1% 11% 9% 16% 10% 19% 34%

Other 2

Number of PACs 46 75 60 18 6 4 2 0 

%, of PACs 22% 36% 28% 9% 3% 2% <1% 0%

Dollars (in millions) $0 $0.12 $1.09 $1.29 $0.98 $1.63 $1.18 $0 

% of Dollars 0% 2% 17% 21% 16% 26% 19% 0%

----

Total

Number of PACs 1,654 1,198 1,223 255 227 69 34 21 

% of PACs 35% 26% 26% 5% 5% 1% <1% <1%

Dollars (in millions) $0 $2.22 $22.69 $18.16 $35.07 $2315 $24.12 $33.84 1$1

% of Dollars 0% 1% 14% 11% 22% 15% 15% 21%

1 For each PAC category, the first row lists the number of PACs whose contributions fell within a given dollar range. T

second row shows the percentage of all PACs in thai category which made contributions in that range. The third row sh

the total dollars (in millions) contributed by PACs in that dollar range. The fourth row shows the percentage 01 total cont

tions for that category of PAC that were made by the PACs ill the dollar range. For example, 140 corporate PACs made

contributions 01 between $50,001 and $1GG,GOO to candidates during 1989·90. These 140 PACs represented 7 percent 

total number of corporate PAGs (1,965).They contributed $9.91 million dollars, which was 17 percent of the total contrib

made by corporate PACs ($58.19)

2 "Other" category consists at PAGs formed by corporations without capital stock and PACs formed by incorporated

cooperatives.

15
June 1991 FEDERAL ELECTION COIVIIVIISSIOI\J

1'IJRS RELEASED TO '!HE PUBLIC

Listed below are MORs (FEe enforcement

cases) recently released for public review.

The list is based on the FEC press releases

of March 5 and 26, and April 8, 16 and 21,

1991. Files on closed MURs are available

for review in the Public Records Office.

unless othe~ise noted, civil penalties

resulted from conciliation agreements

reached between the respondents and the

COIlIlIlissian.

fIJR 1610

Respondents: (a) AIIIericans for Jesse Jackson (MO); (b) Americans in Support of the

President Committee, Jesse Witherspoon,

Jr., treasurer {MOl

complainant: Jesse Jackson for President

Committee (DC)

SUbject: Failure to register and file

reports: improper use of candidate's name;

disclaimer

Disposition: (a) U.S. District Court Consent Order: $500 civil penalty; (b) $200

civil penalty (case was closed in 1987)

JIIIUR 2163

ResJXmdents: (a) Anti-Defamation League of

B' nai B' rith, Abraham Foxman, National

Director (NY); (b) American Jewish

Committee, JQnathan Levine, DirectQr (IL)

Complainant: Edward Spannaus, treasurer,

LaRQuche Democratic Campaign (DC)

SUbject: corporate expenditures

Disposition: (a) and (b) PrQbable cause tQ

believe but t.ook no further action

MUR 2302/2283/2274

Respondents: (a) SissetQn-Wahpeton sioux

Tribe (SD); (b) Russell Hawkins, Chairman

Qf the tribe (SO); (c) Gerald Heminger, Sr.

{SD)i (d) David Selvage (SO); (e) John Two

Stars, Sr. (SD); (f) Edward Williams (SO);

(g) Jerry Flute (SOl; (h) Felix Renville,

Jr. (SD1; (i) Grady Renville (SD);

(j) Michael Simon (SO); et al. lk)-(m)

Cooplaincmt: Soubh Dakota Democratic Party

(MUR 2274); North Dakota DemQcratic Party

(MUR 2283); Edward D. Seaboy (SO) (MUR

2302)

SUbject: Contr ibut.i.ons in the name of

another; excessive contributiQns; failure

to register as a political committee and tQ

file reports

16

Volume 17, Numb

Disposition: (a)-(b) $6,500 civil penal

(jQint conciliaton agreement); (c)-(j) re

son t.o believe but took no further action

(k)-(m) no reason to believe

MUR 2335

Respondents: (a) Democratic State Centr

Committee, Connecticut (federal and nQnfederal accounts), Maureen G. Satti, trea

urer; (b) congressman Bruce A. Morrison R

Election CQmmittee, Eric Malchodi, treas

urer (CT); (c) Jane MQrrisQn (CT)

Complainant: FEC initiated

SUbject: Excessive contr.ibut.Ions and

expenditures; failure to report accurate

imprQper transfer

Disposition: (a) $5,000 civil penalty;

(b) $2,250 civil penalty; (c) ~1,000 civ

penalty

MUR 2559

Respondents: oregon Republican party,

Rachel Gerber, treasurer

Complainant: FEC initiated

SUbject: Excessive contribution and

expenditure; failure to amend Statement o

Organization

Disposition: $4,500 civil penalty

MUR 2560

Respondents: (a) Fifth CQngressional

District Democratic Committee, Donald

Riger, treasurer (MI); (b) Michigan

Democratic state Central Committee,

Lawrence B. Deitch, treasurer

Complainant: FEe initiated

SUbject: Transfer of prohibited funds;

failure to designate treasurer; failure 

file reports; failure to file and amend

statement of OrganizatiQn

Disposition: (a) $250 civil penalty;

(b) (1) no probable cause to believe (re

transfer); (b)(2) reason to believe but

took no further action (re Statement of

Organization and reports)

flIUR 2615

Respondents: (a) Friends of Harriett

Wieder, GregQry N. weiler, treasurer (~)

(b) committee to Elect Harriett Wieder

SupervisQr, Frank P. Uehle, treasurer (C

(c) Harriett Wieder

Camplainant: Robert Graham, Chairman,

Steve HQrn for Congress (CA)

SUbject: Failure to file statement of

candidacy, statement Qf Qrganization and

reports on time; failure to disclose all

required financial informatiQn

Disposition: {a)-(c) $2,800 civil penal

(joint conciliation agreement)
FEDERAL ELECTION COMMISSION

•

June 1991

MUR 2632

Respondents: (a) National Action

Committee-NACPAC, Charles Citrin, treasurer

(FL); (bl Idaho state Democratic PartyFederal Account, Joe Berenter, treasurer;

(e) St. Louisians for Better Government,

Bernard Pasternak, treasurer (MO)

Complainant: FEe initiated

SUbject: Excessive contribution; failure

to report earmarked contribution

Disposition: (a) $750 civil penalty; (b)

$2,700 civil penalty; (c) $900 civil

penalty

flIUR 2677

Respondents: (a) Rosemary Pooler (NY);

(b) Friends of Rosemary Pooler, Sharon

Sherman, treasurer (NY); (c) Friends of

Rosemary Pooler '88, James M. Hanley,

treasurer (NY); (d) Eagan Real Estate Co.

(NY); (e) Lumbermens Mutual Casualty CO.

(IL)

Complainant: National Republican Congressional Committee, Joseph Gaylord, Executive

Director (DC)

SUbject: In-kind corporate contributions 1

personal use of campaign funds

Disposition: (a)(1) Reason to believe but

took no further action (re contributions);

(a)(2) no reason to believe (re personal

use); (b)-(e) reason to believe but took no

further action

MUR 2876

Respondents: (a) Representative Don Ritter

{PAl; (b) Lehigh valley Citizens for Don

Ritter, Betty S. Gates, treasurer (PA)

Complainant: Richard J. Orloski (PA)

SUbject: Failure to disclose bank account

and contribution identification

Disposition: (a) No action; (b) reason to

believe but took no further action; no

reason to believe on basis of amendment to

complaint

JolUR 2939

Respondents: (a) Keep HOpe Alive Political

Action Committee, Dr. Mary Berry, treasurer

(DC)i (b) Friends of Jesse Jackson, Joseph

Beavers, acting treasurer (MO)

Complainant: FEC initiated

SUbject; Contributions containing prohibited funds made by unregistered organizations; failure to register as a political

committee

Disposition: (a) Reason to believe but

took no further action; (b) probable cause

to believe but took no further action

17

Volume 17, Numbe

l'IUR 3002

Respondents; Pete du Pont for president,

Inc., Frank A. Ursomarso, treasurer (DE)

Complainant: FEC initiated

SUbject: Exceeding Iowa expenditure limi

DiSIX'sition: $2, 500 civil penalty

MUR 3008

Respondents: (a) Gallegly for congress, 

Frank Norton, Jr., treasurer (CAl;

(b) Erringer Professional Building {CAl;

(c) Janice Gallegly (CA); (d) Marcie

Schweitzer (CA); (e) Mike Schweitzer (CA)

Complainant: Sua sponte

Subject: Excessive contributions

Disposition: (a)-(e) Reason to believe b

took no further action

MUR 3044

Respondents: Richman for Congress Commi

tee, Gerald F. Richman, treasurer (FL)

Complainant: FEC initiated

SUbdect: Failure to file 48-hour contrib

tion reports on time; failure to disclose

required contribution information

Disposition: $3,000 civil penalty

MUR 3057

Respondents: Craig Washington for Congre

Committee, Walter Davis, treasurer (TX)

Complainant: FEe initiated

Subject: Failure to file 48-hour reports

Disposition: $3,000 civil penalty

MUR 3075

Respondents: Pacific PAC, Carl Rheuban,

treasurer (CA)

complainant: FEe initiated

SUbject: Failure to file report on time

Disposition: Reason to believe but took 

further action

MUR 3096

Respondents: (a) Democratic party of

Oregon, Annabelle Jaramillo, treasurer,

Judy carnahan, chairman; et al. (b)-(d)

Complainant: Rick Campbell (OR)

SUbject: Improper absentee ballot ma i l i n

impermdssible transfer of funds

Disposition: (a)-(d) No reason to believ

MUR 3101

Respondents: (a) Ronald L. Wilson (IN);

(b) Badell and Wilson, P.C. (IN);

(c) Friends of phil Sharp, Inc., Dr. Jose

B. Black, treasurer (IN)

Complainant: Samuel o. Dawson, political

Director, National Republican Congression

Committee (DC)

SUbject: Corporate expenditure

Disposition: (a)-(c) No reason to believ

(continue
June 1991 FEDERAL ELECTION COMMISSION

MUR 3117/3011

Respondents: (a) Congressman wright App["eciation Committee, Henry Ke["ry, treasurer

(TX); (b) Majority Congress Committee,

Robert N. Reeves, treasu~er (DC);

(c) wright Appreciation Fund, w. Edwin

Youngblood, treasurer (TX)

CClDplainant: FEe initiated

SUbject: Excessive and prohibited contributions; failure to file complete reports

on joint fundraising proceeds

Disposition: (a)-(c) $15,000 civil penalty

(joint conciliation agreement)

MUR 3125

Respondents: (a) Robert S. Montgomery,

Jr.; (b) Willard George Maxwell (AL); (c)

Anthony Del G["osso; (d) CAE-Link corporation (NY); (e) Bicoastal Corporation PAC,

David L. Redmond, treasurer

Complainant: Sua sponte

SUbject: Knowingly making contribution in

name of another

Disposition: (a) $100 civil penalty;

(b) $100 civil penalty; (e) no probable

cause to believe; (d)-(e) took no action

KUR 3126

Respondents: San Bernadino County Republican Central committee, Harold L. Boring,

treasurer (CAl

Complainant: FEC initiated

SUbject: Failure to file report on time

Disposition: $500 civil penalty

1I!UR 3136

Respondents: Salomon Brothers Inc. Political Action COlll!I\i ttee, William J. Jenningst

treasurer (NY)

Complainant: FEe initiated

SUbject: Exce~sive contributions; inaccurate report.i.nq

Disposition: $1,250 civil penalty

MUR, 3160

ResPonc1ents: Persons unknown

complainant: Carper for Congress committee, Vincent P. Meconi, Campaign Manager

(DE)

SUbject: Failure to register and report;

excessive expenditures; impecmissible funds

Disposition: No reason to believe

MUR 3190

Respondents: Mark Blankenship for u.s.

Congress, Frederick J. Weil, treasurer (CA)

complainant: FEe initiated

SUbject: Failure to file 48-hour reports

Disposition: $1,700 civil penalty

Volume 17, Num

MlJR 3195

Respondents: Friends of Larry pressler

Paul Arneson, treasurer (SO)

complainant: FEe initiated

SUbject: Failure to file 48-hour repo

Disposition: Reason to believe but too

further action

MUR 3201

Respondents: (a) Volunteers for Vento,

John J. Costello, treasurer (MN);

(b) District 77 of the International

Association of Machinists (MN)

Complainant: Ian Maitland (MN)

SUbject: union contribution

Disposition: (a) No reason to believe;

(b) reason to believe but took no furth

action

PUBLIC APPEARANCE:5

6/3 Columbia college of Chicago

washington, DC

Kent C. Coope["

Assistant Staff Director fo

Public Disclosure

6;10 Free Congress Foundation

Washington, DC

Commissioner nanny L. McDon

Michael G. Dickerson

Chief, Public Records

7;21-23 Virgo Publishing, Inc.

Nashville, Tennessee

Craig M. Engle

Executive Assistant to

commissioner Lee Ann Elliot

18
FEDERAL ELECTION COMMISSION Volume 17, Numbe

- Political Contributions Data, Inc.,

2:8~ 5:7 - S~th, Dennis, for congress, 5:7

- Speelman, 3:10 - Webb for Congress committee, 2:10

- West Virginia Republican state

Executive Committee, 3:10 - working Names, Inc. (90-1009-GAG and

87-2467-GAG), 5:7

V. FEe

-=-Common Cause; National Republican

Senatorial Committee, Appellant (90-

5317), 1:7

- raucher and Maine Rirht to Life

Committee, Inc. (90- 832), 5:8 - Schaefer, 6:11

- spannaus (91-0681), 6:11 - Stern, 2:7

800 LINE

Allocating expenses through ballot compo

tion, 2:1

Debt retirement by candidate committees,

4:7

PACs: allocating federal and nonfede~a1

expenses, 6:1

Staff advances and salaries, 2:6

19

June1991

t"CURl' CASES

Dole v. International Association Managers,

Inc., 6:9

FEe v.

- AugUStIO"e for Congress, 2:7 - Dramesi for Congress, 3:10 - Fletcher, Friends of Isaiah, 4:6

- Lawson, 6:10 - Legi-Tech, Inc., 3:11

- Mann for Congress Committee, 5:7

- Mid-America Conservative PAC, 2:10 - National Republican Senatorial

Conunittee, 6:10 - NRA political Victory Fund, 3:10

ADVISORY OPINICNJ

1990-14: AT&T's 900-line fundraising service, 2:4

1990-19: vendor/committee relationship;

sale and repurchase of fundraising items,

1:8

1990-22: Blue Cross/Blue Shield's solicitation of membe r plansr personnel, 1: 9

1990-25: Parent corporation'S obligations

to labor organization under twice-yearly

provisions, 2:5

1990-26: Sale of campaign asset; personal

use of excess funds after November 30,

1989, 3:7

1990-27: Transfer to party's federal

account of funds mistakenly deposited in

state account, 3:9

1990-29: Return to federal account of funds

transferred to state account, 4:5 1990~30: Designation of post-election

contributions to retire debts, 4:6

1991-1: Credit card contributions to

nonconnected PAC of federal contractor

partnership, 5:4

1991-2: Disposition of possibly illegal

funds raised through 900-line telephone

calls, 5:5

1991-3: PAC newsletter distributed outside

restricted class, 6:6

1991-4: Payment to senate employee for twoweek teaching appointment, 5:6

1991-6: Calculating ballot composition

ratios; allocating pre-1991 expenses, 6:6

1991-8: payment to Senator for radio

series, ,6:8

1991-10: Candidate's use of assets jointly

held with spouse, 6:8

The first number in each citation

refers to the "number" (month) of the 1991

Record issue in which the article appeared;

the second number, following the colon,

indicates the page number in that issue.
political Committees

Treasurers of registered political committees automatically receive the Record.

A change of address by a political committee (or any change to information disclose

on the statement of Organization)' must, by law, be made in writing on FEC Form 1 or 

letter. The treasurer must sign the amendment and file it with the Secretary of th

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

state office.

other SUbscribers

Record subscribers who are not registered political committees should include t

following information when requesting a change of address:

o Subscription number (located on the upper left hand corner of the mailing label);

a Name of the subscriber;

o Old address; and

a New address.

Subscribers (other than political committees) may correct their addresses by

phone as well as by mail.

Volume 17, Num

Bulk RateMail

Postageand Fees Paid

Federal Election Commissio

Permit NumberG-31

FEDERAL ELECTION COMMISSION

CHAI«iE OF ADDRESS

Official Business

FEDERAL ELECTION COMMISSION

999 E Street, NW

Washington, DC 20463

June 1991