February 1996 Federal Election Commission Volume 22, Number 2

Table of Contents

Reports

1 New Law Changes Point of Entry

for House Candidates

2 Electronic Filing

5 California Special Election

Regulations

1 MCFL Rules: Corp./Labor Activity

Public Funding

3 Initial Entitlements

3 Natural Law’s Hagelin Certified

3 Advisory Opinions

Audits

4 Friends of Sherrod Brown

800 Line

7 Conventions: Corp./Labor Activity

8 Payments for Ballot Access

8 Federal Register Notices

Court Cases

9 Stockman v. FEC

Publications

 9 Reports on Financial Activity

10 Explanation and Justifications

Compliance

10 MURs Released to the Public

11 Index

Maryland Special Election

Committees involved in Maryland’s

March 5 special primary election

must file a pre-primary report on

February 22 and any required 24-

and 48-hour notices. The March

Record will contain filing dates

for the April 16 special general

election to fill the House seat

vacated by Kweisi Mfume.

Reports

New Law Changes Point of

Entry for House Candidates

House candidates should mail

their future campaign finance

reports, including pre-primary

reports and 48-hour notices,1

 to:

Federal Election Commission

Washington, D.C. 20463

This point-of-entry change came

about as a result of Public Law 104-

79, signed by President Clinton on

December 28, 1995. This law

officially changed the point-of-entry

for campaign disclosure reports filed

by House candidates. Whereas such

reports were previously filed with

the Clerk of the House, the new law

requires House candidates to file

with the FEC.2 Public Law 104-79

does not change the point-of-entry

for personal financial disclosure

1 House committees may fax 48-hour

notices to the FEC at 202/219-0174.

Note that 48-hour notices are the only

FEC documents that may be faxed. All

other FEC reports and notices must

carry the committee treasurer’s

original signature; therefore, they may

not be faxed.

2 This point-of-entry change also

applies to FEC reports filed by political

committees that support only House

candidates.

(continued on page 2)

Regulations

MCFL Rules on Corporate/

Labor Activity Before Congress

On December 8, 1995, the FEC

transmitted to Congress its revisions

to rules governing the political

activities of labor and corporate

organizations. Generally, corporations

and labor organizations are prohibited from using their general treasury monies to make contributions

or expenditures in connection with

federal elections. 2 U.S.C. §441b.

The new rules clarify the exceptions

to this prohibition. These exceptions

permit corporations and labor organizations, to a limited degree, to utilize

their resources and to make communications in connection with federal

elections. The new rules stem from

the Supreme Court ruling in FEC v.

Massachusetts Citizens for Life.1

The new rules will be discussed

in detail in a Record supplement that

will appear in the near future; for

now, a brief description of the new

rules follows:

• Corporations and labor organizations

are prohibited from making expenditures for communications to the

general public that expressly advocate

the election or defeat of a clearly

identified federal candidate. The

1 See page 4 of the February 1987

Record for a summary of this decision.

(continued on page 2)
2

Federal Election Commission RECORD February 1996

Federal Election Commission

999 E Street, NW

Washington, DC 20463

800/424-9530

202/219-3420

202/501-3413 (Flashfax Service)

202/219-3336 (TDD)

Lee Ann Elliott, Chairman

John Warren McGarry,

Vice Chairman

Joan D. Aikens, Commissioner

Danny L. McDonald,

Scott E. Thomas, Commissioner

John C. Surina, Staff Director

Lawrence M. Noble, General

Counsel

Published by the Information

Division

Louise D. Wides, Director

Dario Bard, Editor

statements filed under the Ethics in

Government Act; House candidates

continue to file this information

with the Clerk of the House.

This change is expected to

provide easier and quicker public

access to House campaign information.

The public will still be able to

access House candidates’ FEC

reports at the Records and Registration Office of the Clerk of the

House. Initially, this office will

offer microfilm copies of the

reports, but it hopes to later provide

the public with access to a computerized digital image of the report via

a telecommunications link to the

FEC’s database.

In the future, it is hoped that the

states will also establish telecommunication links with the FEC, so that

they will be able to retrieve computerized digital images of FEC

reports. When this happens, FEC

Reports

(continued from page 1)

filers may be freed of the requirement to file duplicates of their

reports with state offices. This is not

yet a reality, however. No state has

such a telecommunications link with

the FEC presently.

It should be noted that Public

Law 104-79 does not affect the

point-of-entry for campaign reports

filed by Senate candidates; they

continue to file with the Secretary of

the Senate. ✦

FEC Authorized to Develop

Electronic Filing System

On December 28, 1995, electronic filing came one step closer to

being realized. Public Law 104-79,

signed by President Clinton on that

day, authorizes the FEC to establish

the technical and regulatory framework to enable political committees

to file reports on computer disk or

through other electronic means.

Electronic filing will not be

available until 1997, at the earliest.

Committees are therefore still

required to disclose their campaign

activity on paper reports. Paper

reports can not be faxed because an

original signature must be on the

report. Forty-eight-hour notices are

the only notices that may be faxed.

Once electronic filing becomes a

reality, committees that would

prefer to submit electronic rather

than paper reports would be able to

do so. Public Law 104-79 authorizes

the FEC to develop alternative

methods of verifying reports in lieu

of signatures.

The Record will update readers on

the progress of electronic filing. ✦

Regulations

(continued from page 1)

express advocacy standard replaces

the partisan/nonpartisan standards

at 11 CFR 114.3 and 114.4.

• Provisions at 11 CFR 110.13,

114.3, 114.4 have been revised and

updated, and 114.13 has been added.

These provisions apply to: candidate

debates and appearances; distributing voting and registration information; and conducting registration

and get-out-the-vote drives.

• New provisions have been added at

11 CFR 110.12, 114.1, 114.2 and

114.4 to define “restricted class”

and to address: candidate appearances at colleges and universities;

candidate endorsements; and

activities that facilitate the making

of contributions to candidates or

political committees other than the

sponsor’s PAC.

• New language added at 11 CFR

114.2 through 114.4 addresses the

question of when coordination

between a candidate and a corporation or labor organization causes

an activity to become a prohibited

contribution.

These revisions represent the

second part of the MCFL rulemaking.

An Announcement of Effective Date

will be published in the Federal

Register after Congress has had 30

legislative days to review these

revisions. The Record will notify

readers when this happens.

The first part of the MCFL

rulemaking contained definitions of

“express advocacy” and “qualified

nonprofit corporations” 2 (60 FR

(Reports continued on page 5) 2 The “express advocacy” rules are

being challenged in Maine Right to

Life v. FEC (page 3 of the January

1996 Record). This case also challenges the revised voting records and

voter guide provisions at 114.4(c)(4)

and 114.4(c)(5). The “qualified

nonprofit corporation” rules are being

challenged in Minnesota Citizens

Concerned for Life v. FEC (U.S.

District Court for the District of

Minnesota, 3-95-1147).
3

February 1996 Federal Election Commission RECORD

35292, July 6, 1995). Those rules

took effect on October 5, 1995 (60

FR 52069, October 5, 1995) and

were summarized in the August

1995 Record.

Copies of the Federal Register

notices of the final rules for both

parts of the MCFL rulemaking may

be obtained by calling the FEC at

800/424-9530 or through the FEC’s

automated Flashfax system: dial

202/501-3413 and request document

229 for part one and document 230

for part two. ✦

Advisory

Opinions

AO 1995-41

Preemption of State

Disclosure Requirements

Maloney for Congress, the

principal campaign committee of

Congresswoman Carolyn Maloney,

is not obligated to report its federal

activity in accordance with the laws

of New York state.

A New York state law mandates

that all candidates for public office

must, for every poll they conduct,

disclose the sample size, the wording and the full results of the poll.

9 NYCRR §6201.2. The New York

Board of Elections has taken the

position that this reporting requirement applies to federal candidates as

well as to other candidates. The

Federal Election Campaign Act (the

Act), however, preempts state law

with respect to activity undertaken

Public Funding

Initial Entitlements for ’96

Presidential Candidates Total

$37 Million

On January 1, the FEC sent the

U.S. Treasury matching fund

certifications totaling $37,353,967

for the ten eligible 1996 Presidential

candidates. The accompanying chart

lists each candidate’s entitlement. It

should be noted that each candidate

will likely receive a payment of

about 60 percent of his entitlement

due to the Presidential fund’s cash

flow shortfall (see page 13 of the

January 1996 Record).

To be eligible to receive public

funding, a candidate must submit

documentation to the FEC showing

campaign receipts in excess of

$5,000 in matchable contributions in

each of at least 20 states. Only

contributions received from individuals, and only up to $250 of a

contributor’s total, are matchable.

Candidates accepting public

funding must abide by spending

limits and use funds for campaignrelated expenses only. All publicly

funded campaigns are audited by the

FEC.

The Presidential Public Funding

Program is financed by taxpayers

Initial Entitlements for 1996

Set New High

The 1996 total of $37 million set

a new high for initial entitlements.

The chart below compares this total

with the totals for past Presidential

election years, going back to 1976,

the very first year of the Presidential

Public Funding Program. The

number of candidates receiving a

portion of each year’s total is noted

in parenthesis.

Year/ Total Initial

Candidates Entitlements

1996 (10) $37,353,967

1992 (8) $ 6,372,788

1988 (12) $28,748,261

1984 (6) $ 7,771,960

1980 (3) $ 1,944,055

1976 (11) $ 1,880,502

participating in the voluntary $3

“check off” found on all U.S.

federal income tax forms. ✦

Initial Entitlements:

’96 Publicly Funded

Presidential Candidates

Bob Dole (R) $9,265,290

Bill Clinton (D) $9,014,644

Phil Gramm (R) $6,653,918

Pat Buchanan (R) $3,977,007

Lamar Alexander (R) $3,226,450

Richard Lugar (R) $2,275,051

Pete Wilson (R)* $1,591,393

Arlen Specter (R)* $ 988,975

Lyndon LaRouche (D) $ 261,235

John Hagelin (NLP) $ 100,000

* Although these candidates have

already dropped out of the 1996

Presidential race, they are entitled to

receive the amount of public funding

noted in the chart. These monies may

be used to retire outstanding campaign

debts or for any other campaign-related

purpose. Any leftover public funds must

be returned to the U.S. Treasury.

Natural Law Party’s

Dr. Hagelin Declared Eligible

For Matching Funds

On December 22, Dr. John S.

Hagelin of the Natural Law Party

became the tenth 1996 Presidential

candidate to become eligible to

receive public matching funds,

joining Governor Lamar Alexander,

Mr. Patrick Buchanan, President

Bill Clinton, Senator Robert Dole,

Senator Phil Gramm, Mr. Lyndon

LaRouche, Senator Richard Lugar,

Senator Arlen Specter and Governor

Pete Wilson. The FEC has certified

initial payments for these ten

candidates (see the table on page 3).

Once Presidential candidates

establish eligibility for matching

funds, they may submit additional

contributions for matching fund

consideration on a monthly basis. ✦

(continued on page 4)
4

Federal Election Commission RECORD February 1996

Advisory Opinions

(continued from page 3)

1 This advisory opinion assumes that

some of these campaign events will be

in the Washington, D.C., area as well

as in Congressman McCrery’s home

district.

AO 1995-42

Using Campaign Funds to

Pay Child-Care Expenses

Congressman Jim McCrery of

Louisiana’s 5th district may, while

at a campaign event with his wife,

pay child-care expenses for his

infant son with campaign funds.

Doing so does not constitute a

personal use of campaign funds.

Congressman McCrery travels

extensively as part of his 1996

reelection effort. These trips often

include overnight stays. His wife is

a vital part of his campaign team

and so accompanies him to campaign events. These events (e.g.

receptions, press conferences and

finance meetings) are inappropriate

for their 20-month-old son.1 The

McCrerys, therefore, occasionally

incur expenses for the care of their

child while they are away at a

campaign event.

Campaign funds may not be

converted to personal use. 2 U.S.C.

§439a. Personal use is defined at

11 CFR 113.1(g) as the use of

campaign funds to pay for an

expense that would exist irrespective of the candidate’s campaign or

duties as a federal officeholder.

in connection with a federal election. 2 U.S.C. §453. Maloney for

Congress, being a federal campaign,

is thus only subject to the disclosure

requirements contained in the Act.

2 U.S.C. §434(b). New York may

not impose additional reporting

requirements on activity undertaken

in connection with a federal election.

Date Issued: December 7, 1995;

Length: 4 pages. ✦

The child-care expenses in this

instance are not irrespective of the

campaign; they are a direct result of

the McCrerys attendance at campaign-related events. The Commission concluded that campaign funds

could pay for child care “in the

limited circumstances” presented in

the advisory opinion request.

Date Issued: January 11, 1996;

Length: 3 pages. ✦

Audits

Friends of Sherrod Brown

Audit Report

An FEC audit of the Friends of

Sherrod Brown committee (f.k.a.

Brown for Congress), the 1994

principal campaign committee of

Sherrod Campbell Brown, Democratic candidate for U.S. Representative from Ohio’s 13th District,

found that the committee:

• Understated receipts by $21,505

and overstated disbursements by

$908. These two misstatements

along with two computational

errors caused the committee’s

reported ending cash-on-hand total

to be understated by $16,913. In

response to the FEC’s audit, the

committee filed amended reports

correcting these misstatements.

2 U.S.C. §434(b)(1), (2) and (4).

• Received $4,550 in apparent

excessive contributions from nine

individuals. The committee did

refund $1,500 of this total, but the

refund was made after the 60-day

period allowed by 11 CFR

103.3(b)(3). In response to the

FEC’s audit, the committee

submitted documentation that it

was attempting to refund the

outstanding $3,050 balance.

2 U.S.C. 441a(a)(1)(A).

• Failed to file 48-hour notices for 16

PAC contributions totaling $24,500

received within 20 days of the

primary election. 2 U.S.C. 434(a)(6).

• Failed to deposit $94,192 in contributions within 10 days of receipt,

as required by 11 CFR 103.3(a).

This audit was conducted pursuant to 2 U.S.C. §438(b), which

authorizes the Commission to conduct

audits of any political committee

that files reports that fail to meet the

threshold level of compliance set by

the Commission. Subsequent to a

final audit report, the FEC may

choose to pursue unresolved issues

in an enforcement matter. ✦

Alternative Disposition of

Advisory Opinion Requests

AOR 1995-37

The Commission closed this AOR

without issuing an opinion because

the issues it raises are undergoing

judicial review. U.S. Chamber of

Commerce v. FEC (page 2, January

1996 Record). The National Association of Realtors had submitted

this request seeking clarification on

FEC regulations defining “member.” 11 CFR 114.1(e)(2). ✦

Advisory Opinion Requests

Advisory opinion requests are

available for review and comment in

the Public Records Office.

AOR 1995-47

Use of campaign funds to attend

national party convention (Congressman Robert A. Underwood;

December 21, 1995; 1 page plus 15-

page attachment)

AOR 1995-48

Preemption of Georgia state law that

forbids candidates from receiving

contributions while Georgia legislature is in session (Day for Senate;

December 26, 1995; 2 pages)

AOR 1995-49

Minor party committee’s status as

state party committee (Natural Law

Party of Texas; December 29, 1995;

2 pages plus 10-page attachment) ✦
5

February 1996 Federal Election Commission RECORD

Special Election:

California’s 37th District

California has scheduled a special

general election for March 26, 1996.

This election is being held to fill the

U.S. House seat vacated by Congressman Walter Tucker of the 37th

district. Under California law, this is

a nonpartisan election open to

anyone who qualifies as a candidate;

no primary elections precede this

special general election. A candidate

must garner a majority of the vote to

win the special general election. If

the special general election does not

yield a winner, a runoff will be held

on May 21, 1996, among the top

vote getters—the top vote getter of

each qualified political party and

any qualifying independent candidates.

The reporting requirements for

committees involved with these

special elections are outlined in the

accompanying table. Additionally,

this article provides information on

contribution and coordinated party

expenditure limits, and committee

transfers.

If you have any questions about

special election issues after reading

this article, call the FEC at 800/424-

9530 or 202/219-3420.

Reporting by Candidate

Committees

Candidate committees are

required to register and to file

financial disclosure reports with the

FEC once their campaign activity

exceeds $5,000 in either contributions or expenditures. 2 U.S.C.

§431(2). See the Campaign Guide

for Congressional Candidates and

Committees.

Once the $5,000 threshold is

reached, principal campaign committees of candidates seeking to win

this special election must file the

appropriate reports as shown in the

accompanying table.

Pre- and post-election reports.

All participants in the special

general election must file a pregeneral election report.

A post-general election report is

required of all special general

participants only if the special

runoff is not held.

The April Quarterly report is

waived for all post-general report

filers. All others must file an April

Quarterly report.

Pre- and post-runoff election

reports are required of all special

runoff participants.

Forty-eight-hour notices. Principal campaign committees must file

48-hour notices on contributions of

$1,000 or more received between

the 20th day and 48 hours before the

date of any election in which the

candidate participates. The notice

must be received by the FEC and

California’s Secretary of State

within 48 hours of the campaign’s

receipt of the contribution. 2 U.S.C.

§434(a)(6)(A); 11 CFR 104.5(f).

This requirement applies to all

contributions of $1,000 or more,

including: monetary and in-kind

contributions; loans (other than bank

loans); guarantees and endorsements

of bank loans; and contributions

from the candidate, loans from the

candidate and endorsements of bank

loans made by the candidate. 2 U.S.C.

§431(8)(A); 11 CFR 100.7(a).

For information on the content of

the notice, see 11 CFR 104.5(f) and

the Campaign Guide.

Reporting by Party Committees

and PACs

Quarterly filers. Party committees and PACs filing on a quarterly

(rather than monthly) basis are

subject to special election reporting

if they make previously undisclosed

contributions or expenditures in

connection with the California

special election by the close-ofbooks date shown in the reporting

table. 11 CFR 104.5(c)(1)(ii) and

(h).

Monthly filers. PACs filing on a

monthly basis are not required to

file pre- and post-special election

reports but may have to file 24-hour

reports if they make independent

expenditures, as explained below.

See 2 U.S.C. §434(a)(9); 11 CFR

104.5(h)(2).

Twenty-Four-Hour Reports on

Independent Expenditures

All PACs and persons making

independent expenditures may have

to file 24-hour reports. This report is

required if the committee or person

makes independent expenditures

aggregating $1,000 or more between

the 20th day and 24 hours before the

date of an election.

The report must be filed within

24 hours after the expenditure is

made. For more information, see

11 CFR 104.4(b) and (c) and

104.5(g). See also “Where to File”

for special filing requirements.

Where to File

Filing with the FEC. Principal

candidate campaign committees

active in this special election file

reports and 48-hour notices with the

FEC. Public Law 104-79 and

11 CFR 105.1 and 105.4.

Noncandidate committees active

in this special election file reports,

including twenty-four-hour reports

on independent expenditures, with

the FEC. 11 CFR 104.4(c)(3).

Addresses and further filing

instructions are provided on the

back of Form 3 and Form 3X.

Filing with state authorities.

Copies of all reports and notices

filed with the FEC, including 48-

hour notices and 24-hour reports,

must simultaneously be filed with

the California Secretary of State:

916/653-6224. 2 U.S.C. §439(a)(1)

and (a)(2)(B); 11 CFR 108.5.

Party committees and PACs that

are active in these special elections

must also file copies of their FEC

reports with California’s Secretary

of State, but they need only file the

Reports

(continued from page 2)

(continued on page 6)
portions of their reports applicable

to candidates running in this California special election (e.g., the

Summary Page and the schedule

showing the contribution or expenditure). 2 U.S.C. §439(a)(2)(B).

Contribution Limits and

Transfers

Contribution limits. There is a

separate contribution limit for each

election in which a candidate

participates (general, runoff).

11 CFR 110.1(j)(1) and 110.2(i)(1).

Monies left over from a previous

federal campaign. Candidates with

leftover monies from a previous

campaign for federal office may

transfer the leftover monies to their

special election campaign provided

they have fulfilled all of the past

campaign’s obligations. Such

monies may be transferred without

redesignations from contributors.

Contributions transferred from a

past campaign do not count against

the contributor’s limits for the

special election.

Simultaneous campaigns. Candidates simultaneously active in this

special election and in a regularly

scheduled 1996 election for some

other federal office must maintain

separate campaign committees.

These committees may not transfer

contributions from one campaign to

the other without first ending one of

the campaigns and then obtaining

redesignations from the contributors. Redesignated contributions

count against the contributor’s limit

for the election to which they were

transferred.

A candidate simultaneously

active in this special election and in

the regularly scheduled 1996

election for the same office may use

the same campaign committee for

both efforts. Special election

contributions do not count against a

contributor’s limits for the regularly

scheduled elections. Monies may be

transferred from the special election

campaign to the other campaign if

redesignations from contributors are

obtained or if the monies represent

leftover funds from the special

election campaign.

Prohibition on transfers from

nonfederal campaigns. Campaigns

of candidates participating in special

elections should note that transfers

from a candidate’s nonfederal

campaign to his or her federal

campaign are prohibited. 11 CFR

110.3(d).

Coordinated Party Expenditure

Limits

The national committee of a

political party and the party’s state

committees may make limited

coordinated party expenditures in

Reports

(continued from page 5)

connection with the general election

campaign of the party’s candidate.

2 U.S.C. §441a(d). The state

committee’s spending limit is

separate from the national committee’s limit. 11 CFR 110.7(b)(1).

Coordinated party expenditure

limits for the California House

special elections are not yet available because the latest government

shutdown has delayed the calculations of the voting age population

(VAP) and the cost-of-living

adjustment (COLA) for 1996. Party

committees, however, should note

that, based on 1995 VAP and COLA

figures, the limit would be $30,060;

the 1996 adjustments should only

increase this limit. ✦

6

Federal Election Commission RECORD February 1996

Reporting Dates for Special Election, California’s 37th

District: March 26 General (with Runoff May 21, if

Necessary) *

Close Reg./Cert.

of Books ** Mailing Date *** Filing Date

Pre-General March 6 March 11 March 14

Post-General† April 15 April 25 April 25

April Quarterly‡ March 31 April 15 April 15

Pre-Runoff‡ May 1 May 6 May 9

Post-Runoff‡ June 10 June 20 June 20

* California does not hold primary elections during special election contests. All

candidates for this House seat will compete in the special general election on March

26. A candidate must garner a majority of the vote to win the general election. If a

single candidate fails to do so, a runoff election among the top vote getters—the top

vote getter from each qualified political party and any qualifying independent

candidates—will be held on May 21, 1996.

**The close of books is the end of the reporting period. The period begins with 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, if applicable, before the individual became a candidate.

***Reports sent by registered or certified mail are considered to be filed on time if

they are postmarked by this date.

† Committees that participate in the special general should file this post-general

report only if there is not a special runoff. The April Quarterly report is waived for

post-general report filers.

‡ April Quarterly reports are required of all committees except post-general report

filers (see above). Additionally, committees participating in the runoff election

should file pre- and post-runoff reports.
7

February 1996 Federal Election Commission RECORD

800 Line

Presidential Nominating

Conventions: Permissible

Corporate/Labor Activity

Corporations and labor organizations are generally prohibited from

making contributions or expenditures

in connection with a federal election.

2 U.S.C. §441b. There are exceptions

to this ban, however. One exception

enables commercial vendors and

local corporate and labor organizations to engage in various activities

in connection with a Presidential

nominating convention held in their

city. This exception presumes that

local organizations and commercial

vendors are motivated by civic and

commercial purposes rather than by

election-influencing objectives.

Additionally, corporate and labor

PACs may make disbursements in

connection with a nominating

convention.

Two types of committees are

typically involved with the planning

and organization of a Presidential

nominating convention:

• A convention committee is established by a national party committee to oversee the day-to-day

operations of the party’s nominating convention.

• A host committee is a local, nonprofit organization, such as a civic

organization or chamber of commerce, that represents a state or city

with respect to the convention, and

that has as its principal objective

the encouragement of commerce

in, and the promotion of a favorable image of, the convention city.

Aside from the exceptions

delineated below, national party

committees accepting full public

funding for their nominating convention may not accept private

contributions from any source to

defray convention-related expenses.

The Republican and Democratic

national parties have both accepted

full public funding for their conventions since 1976.

Commercial Vendors

Discounts to Convention Committee. Commercial vendors are entities

that sell certain goods and services in

their normal course of business. They

may provide these goods and services

to the convention committee at a

discount if this arrangement is done

in the ordinary course of business.

The ordinary course of business is

either (1) an established practice of

the vendor to provide such discounts

to nonpolitical clients, or (2) consistent with an established practice of

the vendor’s trade or industry.

Permissible discounts include

standard volume discounts and

reduced rates for corporate, governmental or preferred customers.

11 CFR 9008.9(a). Vendors may

also provide items of de minimis

value, such as samples, coupons,

maps and pens, at nominal or no

cost, to be distributed to convention

attendees. The above activities need

not be reported. 11 CFR 9008.9(c).

Official Provider Arrangements.

Commercial vendors also may, in the

ordinary course of business, provide

goods and services in exchange for

promotional consideration. The value

of these goods and services may not

exceed the commercial benefit

reasonably expected to be derived

from the promotional opportunity

that the convention represents.

Promotional consideration might

include, for instance, an arrangement in which goods and services

are provided at a discount or for free

to the convention committee in

exchange for official-provider

status. The convention committee

must disclose in detail any promotional arrangements with commercial vendors in its FEC reports.

11 CFR 9008.9(b). AO 1988-25.

Other Organizations. Under the

same terms described above,

commercial vendors may provide

goods and services for convention

uses to government agencies,

municipal corporations and the host

committee. 11 CFR 9008.9,

9008.52(b) and 9008.53(a).

Local Businesses, Labor

Organizations and Other

Organizations

Host Committees. Any individual

or any local business, local labor

organization or other local organization may donate funds or make inkind donations to a host committee

to defray certain convention-related

expenses. A business, labor organization or other organization is

considered local if it has offices or

facilities in the metropolitan area, or

if its volume of business or activity

outside the metropolitan area would

be directly affected by the presence

of the convention in that city.

Defrayable expenses include costs

incurred for: promotion of the city

as the convention site, welcoming

convention attendees, providing

shopping guides or other de minimis

promotional items to attendees,

administration of the host committee, use of a convention center and

services related to the center, local

transportation, law enforcement,

central reservation services and

hotel accommodations. Defrayable

expenses do not include costs for

administration of the convention

committee or national party, such as

overhead or employee salaries.

Municipal Funds. Local businesses, labor organizations and

other organizations may also donate

funds or make in-kind donations to a

municipal fund established by local

government agencies or municipal

corporations to defray the same

types of expenses as listed above.

However, the fund must be intended

to promote the city and attract

political and nonpolitical conventions to the city generally, and not

established solely to provide services to the nominating convention.

In addition, donations to the municipal fund cannot be earmarked in any

way or intended for any particular

(continued on page 8)
8

Federal Election Commission RECORD February 1996

convention, event or activity. AOs

1982-27 and 1983-29.

Banks. Banks are not considered

local organizations, and therefore

may not make donations to host

committees or municipal funds.

However, credit unions and subsidiaries of banks that are not banks

themselves may make such donations, provided they have a local

office in the host city and can prove

their revenues are sufficient to cover

the amount of the donations without

relying on funds derived from a

bank. 11 CFR 9008.52(c)(1); AOs

1995-31 and 1995-32.

Reporting. The host committee

must disclose in its FEC reports all

receipts and disbursements detailed

in this section. 11 CFR 9008.51-

9008.53.

Hospitality Suites and Receptions

Based on AO 1983-23, under

limited circumstances, a corporation

or labor organization may sponsor a

convention hospitality suite or a

reception for representatives of the

corporation or labor organization,

convention delegates, party officials, federal and state elected

officials and the press. Payments

made by the corporation to sponsor

these events constitute neither

contributions nor expenditures,

provided the corporation makes no

attempt to influence the outcome of

the nominating convention, and the

events will be used neither to solicit

contributions to, nor to advocate the

election or defeat of, any federal

candidate. Additionally, these

events can not serve the purpose of

defraying any delegate’s subsistence

expenses while attending the convention, and the corporation must

exercise full control over these

events.

Corporate and Labor PACs

Federally registered corporate

and labor PACs (a.k.a. separate

segregated funds) may make

disbursements for any of the permissible activities described above.

These disbursements do not count

against the PAC’s contribution

limits for individual candidates or

the national party committee, but

PACs are nonetheless required to

disclose them in their FEC reports.

Additionally, corporate and labor

PACs may contribute funds for the

activities listed below.

Delegate Selection. PACs may

contribute an unlimited amount to

individual convention delegates, but

their contributions to delegate

committees are limited to $5,000 per

year. These contributions are

reportable by the PAC. If a delegate

committee is affiliated with a

Presidential primary candidate’s

authorized committee, a PAC has

only one $5,000 contribution limit

for both of them. 11 CFR 110.14.

Convention Committee Support.

As noted above, PACs may not

contribute to federally funded

convention committees. However, if

public funds are insufficient to

cover a convention’s full entitlement

amount, or if the national party

committee elects to receive less than

its full share, a PAC may contribute

funds up to its contribution limit for

a national party: $15,000 per year

for multicandidate PACs, $20,000

per year for non-multicandidate

PACs. 11 CFR 9008.6.

800 Line

(continued from page 7)

Federal Register

Federal Register notices are

available from the FEC’s Public

Records Office.

1995-24

11 CFR 110: Communication

Disclaimer Requirements,

Announcement of Effective Date

(60 FR 65515, December 20,

1995)

1996-1

Filing Dates for California

Special Election, 37th District (61

FR 1933, January 24, 1996)

Compliance Fund. PACs may

also contribute to the convention

committee’s separate legal and

accounting compliance fund.

Contributions to this fund count

against a PAC’s contribution limit

to the national party committee.

11 CFR 9008.8(b)(4).

Questions?

For further information on

permissible activity relating to

Presidential nominating conventions, call the FEC, toll free, at 800/

424-9530. ✦

Payments for Ballot Access

Payments made by a candidate to

a party committee to pay ballot-access

fees are exempt from the definition

of “contribution.” The forwarding of

collected ballot-access fees by a

party committee to another party

committee or to a state election

authority is exempt from the definition of “expenditure.” 2 U.S.C.

§§431(8)(B)(xiii) and 431(9)(B)(x).

These exemptions are narrowly

tailored. They apply only to ballotaccess fee payments; they do not

extend to funds collected or expended for a petition drive or to

challenge an opponent’s ballot

petition. See AOs 1994-5, 1980-57

and 1975-53. They also apply only

to the specific transactions between

the particular entities they address.

They do not apply to payments

made by a party or any other entity

to, or on behalf of, candidates to pay

ballot-access fees; such payments

are contributions, subject to the

limits at 2 U.S.C. §441a(a) and the

prohibitions at 2 U.S.C. §441b. For

instance, the payment of a ballotaccess fee by a corporation on

behalf of a candidate constitutes a

prohibited corporate contribution.

These ballot-access fee exemptions have practical considerations
9

February 1996 Federal Election Commission RECORD

for different types of committees.

These considerations are discussed

below, by committee type.

Congressional Candidates

Candidate committees should

report ballot-access fee payments as

part of their “Operating Expenditures” total on line 17 of the Detailed

Summary Page, FEC form 3. If the

payment is more than $200, it should

also be itemized on Schedule B.

Presidential Candidates

Ballot-access fee payments made

by publicly funded Presidential

candidates do not count against their

state expenditure limits.

Party Committees

A party committee’s receipt of a

ballot-access fee payment from a

candidate or another party committee does not constitute a receipt of a

contribution. Such receipts should

be reported as follows:

• If from a candidate, report as

“Other Federal Receipts” on line

17 of the Detailed Summary Page.

Also itemize on Schedule A if

more than $200.

• If from a party committee, report

as “Transfers From Affiliated/

Other Party Committees” on line

12 of the Detailed Summary Page.

Also itemize on Schedule A

regardless of amount.

Additionally, should the recipient

committee transfer the ballot-access

fee payments to another party

committee or to state election

authorities, the transferring committee is not considered to have made

an expenditure. The transferring

committee should report such

transfers as follows:

• If to a party committee, report

under “Transfers To Affiliated/

Other Party Committees” on line

22 of the Detailed Summary Page.

Also itemize on Schedule B

regardless of amount.

Court Cases

Stockman v. FEC

U.S. Congressman Steven

Stockman of Texas’s 9th district and

two of his campaign committees ask

the court to dismiss MUR 3847 and

to enjoin the FEC from investigating

this matter further.

Plaintiffs allege that the complainant in MUR 3847 and/or the FEC

breached the confidentiality of this

enforcement matter, which is guaranteed at 2 U.S.C. §437g(a)(12)(A) and

(B), and 11 CFR 111.21(a). Newspaper reporters have cited the complainant and the FEC as sources in

articles discussing the complaint.

Plaintiffs also allege that the FEC

has failed to investigate this matter

expeditiously (MUR 3847 was

opened in December 1993) and has

failed to give them the required

notice concerning failure to file

reports. 11 CFR 111.8(c).

U.S. District Court, Eastern

District of Texas, Beaumont Division, No. 1:95CV1049, November

28, 1995. ✦

(continued on page 10)

• If to state election authorities,

report under “Other Disbursements” on line 29 of the Detailed

Summary Page. Also itemize on

Schedule B if more than $200.

Party committees should be

aware that funds they provide to a

candidate to pay his or her ballotaccess fees constitute contributions

from the party and are subject to the

party committee’s contribution limit

for the candidate. See MUR 1446. ✦

Publications

Statistical Final Reports for

’94 Cycle Now Available;

New Internet Access to Data

Reports on financial activity for

election cycle 1994 are now available from the FEC. These reports

contain statistical data on federal

campaign financial activity from

January 1, 1993, through December

31, 1994. These are the final,

official FEC numbers for election

cycle 1994. For the first time, this

data is also available via the Internet.

The reports on financial activity

come in five volumes:

• Senate and House candidates;

• Party and Nonparty, Part I (summary tables, national party committees);

• Party and Nonparty, Part II (state

and local party committees);

• Party and Nonparty, Part III

(corporate and labor PACs); and

• Party and Nonparty, Part IV

(nonconnected PACs).

Each volume costs $10 and can

be ordered from the Public Records

Office: 800/424-9530 or 202/219-

4140, room 129 at the FEC building,

999 E Street, NW, Washington,

D.C., 20463. Mainframe computer

tapes of the five-volume set are also

available from the Public Records

Office for $50.

Additionally, these statistics are

available via the Internet. Access

FTP.FEC.GOV for a directory of

what is available. Look at the file

called Readme.txt in the FEC directory for a description of the available

files. Files may be downloaded at no

charge using the GET command in
10

Federal Election Commission RECORD February 1996

Publications

(continued from page 9)

Compliance

MURs Released to the Public

Listed below are summaries of

FEC enforcement cases (Matters

Under Review or MURs) recently

released for public review. This

listing is based on the FEC press

release of December 20, but it does

not include 40 MURs in which the

Commission took no action. Files on

closed MURs are available for

review in the Public Records Office.

MUR 3188/Pre-MUR 228/3046

Respondents: (a) Emerald Homes,

Inc., and Phillip J. Polich, as its

president and as an individual (AZ);

(b) Curtis J. Henderson (CA);

(c) Neil Anzalone, et al. (CA);

(d) DeConcini ’88 Committee,

Lynda S. Schmitz, treasurer (AZ);

(e) Eugene L. Baker, et al. (AZ) and

(TX)

FTP (File Transfer Protocol). The

user will receive the downloaded

information as fixed length data

files that can in turn be loaded into

database software, allowing the user

to sort and search. ✦

Explanation and

Justifications for FEC

Regulations: 1975–Present

Attorneys, accountants and others

who regularly work with federal

election law may subscribe to the

FEC’s compilation of Explanation

and Justifications (E&Js) for FEC

regulations. A useful reference tool,

E&Js explain the origin and intent

of new and revised regulations

submitted by the FEC to Congress.

Designed as a loose-leaf binder

insert, the E&J compilation contains

the following:

• E&Js for all current regulations, as

well as for older regulations that

have been revised or deleted;

• E&Js for rules that were never

effective, along with the text of

such proposed regulations;

• A citation index identifying all

E&Js applicable to each regulation

citation;

• A subject index to help locate

topics addressed by more than one

E&J;

• A conversion table showing the

widespread changes in FEC

regulations resulting from the 1979

amendments to the Federal Election Campaign Act; and

• An appendix that lists previous

citations for current regulations.

The FEC automatically mails

updates to the E&J compilation to

subscribers when the FEC promulgates new or revised regulations. To

order the volume, which costs

$35.00, and get on the subscriber list

for future updates, contact the

FEC’s Public Records Office at 202/

219-4140 or 800/424-9530 (press 3).

Current subscribers to the E&J

compilation who wish to report a

name/address change should call

the FEC’s Information Division at

202/219-3420 or 800/424-9530

(press 1). ✦

Complainants: Richard R.

Robertson, Investigations Editor,

The Arizona Republic (AZ) [3046];

sua sponte [Pre-MUR 228]

Subject: Corporate contributions;

contributions in the names of others

Disposition: (a-b) Reason to

believe, but took no further action;

(c) reason to believe, but took no

further action (contributions in the

names of others); (d) no reason to

believe; (e) no reason to believe

(contributions in the names of

others)

MUR 3801

Respondents: (a) Sharon Pratt

Kelly Committee, and treasurer

(DC); (b) Royal Embassy of Saudi

Arabia (DC); (c) Samir Darwich

(DC)

Complainant: Dorothy A. Brizill

(DC)

Subject: Contribution by foreign

national

Disposition: (a) $1,500 civil

penalty; (b-c) reason to believe, but

took no further action; sent admonishment letters

MUR 4088

Respondent: Susan E. Johnson

(CT)

Complainant: Richard E. Ulbricht

(CT)

Subject: Failure to register timely

Disposition: No reason to believe

MUR 4218

Respondent: Rangel for Congress

Committee, Richard A. Brown,

treasurer (NY)
11

February 1996 Federal Election Commission RECORD

Index

The first number in each citation

refers to the “number” (month) of

the 1995 Record issue in which the

article appeared. The second number,

following the colon, indicates the

page number in that issue. For example, “1:4” means that the article

is in the January issue on page 4.

Advisory Opinions

1995-38: Corporate vendor and

nonconnected PAC with common

officer, 1:14

1995-41: Preemption of state

disclosure requirements, 2:3

1995-42: Using campaign funds to

pay child-care expenses, 2:3

Court Cases

FEC v. _____

– Democratic Senatorial Campaign

Committee (95-2881), 1:5

_____ v. FEC

– Center for Responsive Politics, 1:3

– Chamber of Commerce of the

U.S.A., et al., 1:2

– Maine Right to Life Committee, 1:3

– Stockman, 2:9

Reports

Electronic filing system, FEC

authorized to develop, 2:2

Point of entry change for House

candidates, 2:1

Schedule for 1996, 1:5

Special election: California’s

37th district, 2:5

800 Line

Ballot access payments, 2:8

Conventions, permissible corporate

and labor activity, 2:7

Complainant: FEC initiated (RAD)

Subject: Failure to file 48-hour

reports; failure to accurately report

receipt date of contributions

Disposition: $7,500 civil penalty;

committee to file amended report

MUR 4234

Respondent: West Virginia State

Democratic Executive Committee;

Marie Prezioso, treasurer (WV)

Complainant: FEC initiated (RAD)

Subject: Failure to accurately report

receipts and disbursements; failure

to file disclosure reports timely

Disposition: $10,000 civil penalty

MUR 4237

Respondent: Mehiel for Congress

’94, Stuart Wadler, treasurer (NY)

Complainant: FEC initiated (RAD)

Subject: Failure to file 48-hour

reports (loans from candidate

totalling $52,000)

Disposition: $6,400 civil penalty ✦

Need FEC Material

in a Hurry?

Use the FEC’s Flashfax service to

obtain FEC material fast. It

operates 24 hours a day, 7 days a

week. Over 300 FEC

documents—reporting forms,

brochures, FEC regulations—can

be faxed almost immediately.

Use a touch tone phone to dial

202/501-3413 and follow the instructions. To order a complete

menu of Flashfax documents,

enter document number 411 at the

prompt.
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Federal Election Commission RECORD February 1996

Change of Address

Political Committees

Treasurers of registered political committees automatically receive the 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 FEC Form 1 or by letter. The treasurer

must sign the amendment and file it with the Secretary of

the 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 the following information

when requesting a change of address:

• Subscription number (located on the upper left corner

of the mailing label);

• Subscriber’s name;

• Old address; and

• New address.

Subscribers (other than political committees) may

correct their addresses by phone as well as by mail.