•

FEDERAL ELECTION COMMISSION

March 1988 999 E Street NW Washington DC 20463 Volume14, Numb

ALLOCATION OF SPENDING BETWEEN

FEDERAL AND NONFEDERAL ACCOUNTS:

NOTICE OF INQUIRY

On February 23, 1988, the Commission

published a notice of inquiry in the Federal

Register which seeks comments on possible revisions to Parts 102 and 106 of its regulations.

These provisions govern the allocatton. of certain

expenditures between the federal and nonfederal

accounts of party committees, noneonneeted

political committees and separate segregated

funds.

Written comments on the notice of inquiry

must be filed by March 24. They should be

addressed to Ms. Susan E. Propper, Assistant

General Counsel, 999 E Street, N. W., Washington,

D.C. 20463. For copies of the notice, contact

the FEC's Public Records Office at 2021376-3140

or toll free 800/424-9530.

Allocation Questions

The election law requires that political committees spend only those funds for federal elections which are permissible under the law. 2

U.S.C. §431 et. seq. To ensure that impermissible

funds are not used for federal elections, the

Commission is considering a revision of its rules

to provide more specificity on when expenditures

by party committees, nonconnected committees

and separate segregated funds must be allocated

between the committees' respective federal and

nonfederal accounts.

The agency requests comments on allocation

methods approved by the Commission in the past,

as well as suggestions for alternative allocation

methods. In particular, the agency seeks comments on questions raised by the committees'

allocation of expenditures for:

o Administrative expenses (11 CFR I06.l(e»;

o Exempt party activities (11 CFR lOO.7(b)(9),

(b)(l5), (b)(l7) and IOO.8(b)(lO), (b)(I6) and

(b)( 18»; and

o Other activities, as, for example, general voter

registration or get-out-the-vote activities

conducted by party committees in federal

election years.

Finally, the agency seeks comments on activities related to the allocation of such expenditures. Particularly:

o Reporting requirements; and

o Methods used by a committee's federal 

nonfederal accounts to pay for each accou

share of allocated expenses.

FEC PUBLISHES HALEY COMMITTEE'S

PETITION FOR RULEMAKING

Following established procedures, on Janu

28, 1988, the Commission published a notic

the Federal Register announcing the availab

of a petition for rulemaking filed with the FE

November 1987 by the Ted Haley Congressi

Committee (the Haley Committee). 53.Fed. R

2500.

Comments and statements in support of, O

opposition to, the Haley CommiUee's peti

(summarized below) must be filed by February 

1988. These written responses to the peti

continued on 

TABLE OF CONTENTS

REGULATIONS

1 Allocation Questions: Notice of Inquiry

1 Haley Rulemaking Petition

INFORMATION

2 1988 Spending Limits

5 ADVISORY OPINIONS

STAFF

7 Office of General Counsel Reorganized

PUBLICATIONS

8 FEC Videotape for Candidates

8 Photo Negatives of Citizen's Guide Availabl

PUBLIC FUNDING

8 Matching Fund Certifications

COURT CASES

9 Galliano v. U.S. Postal Service

10 Antosh v. FEC (Second Suit)

10 FEC v. Citizens for the President '84

STATISTICS

11 1987 PAC Count

12 INDEX
March 1988 FEDERAL ELECTION COMMISSION \k)lume 14, Numbe

2

The Record is pUbli~h~d by the Federal Election Commission, 999 E Street, N. W., Washington,

D.C: 20463. Comr~llsslOners are: Thomas J. Josefiak, Chairman; Danny L. McDonald, Vice

Chairman; Joan Aikens; Lee Ann Elliott; John Warren McGarry; Scott E. Thomas; Walter J.

Stewart, Secretary of the Senate, Ex Officio; Donnald K. Anderson, Clerk of the House of

Representatives, Ex Officio. For more information, call 202/376-3120 or toll-free 800/424-9530

(TDD For Hearing Impaired 202/376-3136)· •

-

continued from p. 1

should be addressed to Ms. Susan E. Propper

Assistant General Counsel, 999 E Street, N. W.:

Washington, D.C. 20463. For copies of the petition, contact the FEC's Public Records Office at

202/376-3140 or toll free 800/424-9530.

The Haley Committee's Rulemaking Petition

In the rulemaking petition, the Haiey Committee suggested that the FEC add a subsection

to 11 CFR l Hl.L, which governs limits on

contributions to federal candidates and

committees. Under the Committee's proposal, a

new subsection would· create a rebuttable

presumption that post-election contributions are

made for the purpose of influencing a federal

election. Under such a proposal, a contributor

could demonstrate that a post-election

contribution to a candidate was: not for the

purpose of influencing that election and, thus,

should not be SUbject to the $1;000 per election

limit. By contrast, under the Com mission's current regulations and long-standing agency policy,

donations made to retire the debts of the previous

election are considered contributions and, as such,

are subject to the law's limits and prohibitions on

contributions. See II CFR uo.i.

As the basis for its rulemaking petition, the

Haley Committee cited the U.S. District Court's

February 1987 decision in FEC v. Ted Haley,* which is currently being appealed by tile FEe.

* For a summary of the decision by the U.S.

District Court for the Western District of

Washington, see p.6 of the May 1987 Record.

1988 SPENDING LIMITS

Presidential candidates who are eligible 

primary matching funds may now calculate 

total amount of funds they will be able to spe

1) nationwide during the entire primary elect

period and 2) in each state during the prim

election season.* Similarly, national and st

party committees may now determine the to

amount of coordinated (§441a(d» expenditure

they may spend on behalf of their respect

Presidential and Congressional nominees in 

1988 general elections. (The national and st

party committees have separate limits 

Congressional nominees., Only the natio

committee has a spending limit for the Presid

tial nominee.). . '.

Limits for i988" and the formulae 

calculating the amounts are presented bel

Exact figures for. the state-by-state spend

limits of Presidential primary candidates may 

obtained by consulting the FEe's February 

1988, press release. Additional information m

also be obtained from the brochures entit

"Public Funding of Presidential Elections" and 

"Campaign Guide for Party Committees." 

also the Federal Election Commiss

Regula tions,

Questions and requests for information m

be addressed to: The Information Services D

sion, FEC, 999 E Street, N. W., Washington, D

20463; 800/424-9530 or locally 376-3120.

Figures Used To Calculate

Spending Limits

The figures used to calculate the 1988 lim

are:

*Presidential candidates who accept pu

funds for their primary campaigns are subject 

both an overall limit on their campaign spend

and a stcte-by-stcte limit. 2 V.S.C. Sect

441a(b); 11 CFR 9035.1(a).

**Coordinated party expenditures are limit

special expenditures which party committees m

make on behalf of their nominees in gene

elections. 2 U.S.C. Section 441a(d); 11 CFR 110
Delegate/Resident Commissioner Candidates

CHANGE OF ADDRESS

Registered political committees are

automatically sent the Record. Any change

of address by a registered committee must,

by law, be made in writing as an amendment to FEC Form I (Statement of Organization) and filed with the Clerk of the

House, the Secretary of the Senate, or the

FEG, as appropriate.

Record subscribers (who are not political committees), when calling or mailing in

a change of address, are asked to provide

the following information:

I. Name of person to whom the Record is

sent.

2. Old address.

3. New address.

4. Subscription number. The SUbscription

number is located in the upper left

hand corner of the mailing label. It

consists of three letters and five numbers. Without this number, there is no

guarantee that your subscription can

be located on the computer.

FEDERAL ELECTION COMMISSION

CHART 1

Party Limits For Senate General Elections:

National and State Committees"

1988 Party

VAP Spending

State (Thousands) Limits

Alabama 2,966 $136,732.60

Alaska" 354 46,100.00

Arizona 2,467 113,728.70

Arkansas 1,741 80,260.10

California 20,362 938,688.20

Colorado 2,422 111,654.20

Connecticut 2,454 113,129.40

Delaware" 482 46,100.00

• Florida 9,319 429,605.90

Georgia 4,486 206,804.60

Hawaii 797 46,100.00

Idaho 693 46,100.00

Illinois 8,547 394,016.70

Indiana 4,061 187,212.10

Iowa 2,102 96,902.20

Kansas 1,825 84,132.50

Kentucky 2,731 125,899. 10

Louisiana 3,145 144,984.50

Maine 884 46,100.00

Maryland 3,410 157,201.00

Massachusetts 4,519 208,325.90

Michigan 6,740 310,714.00

Minnesota 3,135 144,523.50

Mississippi 1,833 84,501.30

Missouri 3,794 174,903.40

Montana 585 46,100.00

Nebraska I, 171 53,983.10

Nevada 755 46,100.00

New Hampshire 791 46,100.00

New Jersey 5,841 269,270.10

New Mexico 1,053 48,543.30

New York 13,464 620,690.40

North Carolina 4,786 220,634.60

North Dakota" 485 46,100.00

Ohio 7,947 366,356.70

• *The Senate limit also applieS to nominees

for the House, in those states which have a single

Representative. An asterisk (*) indicates those

states haVing only OneRepresentative.

3

23,050.0

23,050.0

23,050.0

23,050.

23,050.

continu

1984 Par

Spending

Limits

109,671.9

93,951.8

418,818.5

46,100.0

114,512.4

46,100.0

166, 144.

544,210.

48,451.

46,100.0

204,868.4

155,310.

64,862.7

163,055.

46,100.0

Volume 14, Numbe

486

77

2,027

63

20

VAP

(Thousands)

2,379

2,038

9,085

757

2,484

513

3,604

11,805

1,051

408

4,444

3,369

1,407

3,537

342

American Samoa

District of

Columbia

Guam

Puerto Rico

Virgin Islands

State

Oklahoma

Oregon

Pennsylvania

Rhode Island

South Carolina

South Dakota"

Tennessee

Texas

Utah

Vermont"

Virginia

Washington

West Virginia

Wisconsin

Wyoming"

March 1988

o The Voting· Age Population (VAP) for each

state, supplied by the Department of Commerce. The state-by-state VAP figures used

for calculating the 1988 spending limits are

listed in the chart on Senate limits below.

o The 1988 Cost of Living Adjustment (COLA),

based on the annual change in the Consumer

Price Index, as certified by the Secretary of

Labor, using 1974 as the base year. The 1987

COLA is 2.305.

•
1988 SPENDING LIMITS: SUMMARY CHARTS

March 1988 FEDERAL ELECTION COMMISSION \k::Jlume 14, Numb

Limits

CHART

for

II

Presidential Candidates*

CHART ill

Party Limits for Congressional

General Elections: National and State Committees

Limit

Primary Election:

National Limit**

Primary Election:

State Limit* *

Primary Election:

Fundraising Limit

General Election:

National Limit* * *

Candidate's Personal

Funds

Limit

House Nominee

House Nominee in State

with 1 Representative

Senate Nominee

Nominee for Delegate or

Resident Commissioner

Amount

$23,050,000

The greater of $461,000;

or the amount determined

by the formula (See 2/5/88

FE C press release)

$4,610,000

$46,100,000

$50,000 per election

Amount

$23,050

The greater of $46,100;

or the amount determined

by the formula (See Chart I)

The greater of $46, 100;

or the amount determined

by the formula (See Chart 1)

$23,050

Formula

$10 million x COLA

$200,000 x COLA; or

$.16 x State YAP x COLA

20% x National Limit

$20 million x COLA

Formula

$10,000 x COLA

$20,000 x COLA; or

$.02 x State YAP x COLA

$20,000 x COLA; or

$.02 x State YAP x COLA

$10,000 x COLA

"These limits apply only to candidates who receive public funJJ.ing for their campaigns.

""The primary limit applies to the total primary election period, involVing a series of

primaries in different states. Note that publicly funded primary candidates may exempt up

to 20 percent of administrative costs from both their state spending limits and and their

national spending limit. These costs may be exempted as funJJ.raising and legal and

accounting expenses. 11 CFR 106.2(c)(5) and 9035.1(c).

"""The general election limit applies to nominees of the two major parties.

4
Mard11988 FEDERAL ELECTION COMMISSION Volume 14, Numo

CHART IV

Party Limits for Presidential

General Elections: National Committee

Limit

Presidential Nominee

Amount

$8,291,454

Formula

$.02 x National YAP x COLA

ADVlSORY OPINION REQUESTS

The following chart lists recent requests for

advisory opinions (AORs). The full text of each

AOR is available to the public in the Commission's Office of PUblic Records.

AOR Subject

1988-1 Receipts and disbursements made after

Presidential primary to influence delegate selection. (Date made public: January 21, 1988; Length: 2 pages, plus 8-

page supplement)

1988-2 FEC reports of industry PACs posted by

corporation on its employee bulletin

board. (Date made public: January 22,

1988; Length: 4 pages)

1988-3 Solicitation activities (including newsletter) of trade association with three types

of member organizations. (Date made

public: January 23, 1988; Length: 6

pages, plus 86-page supplement)

1988-4 Affiliated status of two corporate PACs

for purposes of contribution limits.

(Date made public: January 29, 1988;

Length: 4 pages, plus lOS-page supplement)

1988-5 Funds lent or contributed by Presidential

primary candidate's publicly funded 1988

campaign to his publicly funded 1984

campaign for debt retirement. (Date

made publics February 4, 1988; Length: 3

pages)

5

AO 198'1-31: Eligibility of Security Exchange's

Eight Membership Classes for

PAC SOlicitations

CBOEPAC, the separate segregated fund of 

Chicago Board Options Exchange (CBGE), an 

corporated membership organization that act

a securities exchange for the trading of cer

standardized option contracts, may solicit 

types of CROE members because these mem

are sufficiently related to the organizatio

qualify for PAC solicitations. CBOEPAC 

not, however, solicit two other types of C

members that do not qualify as solieitable m

bers under federal election law. (See the 

mary chart below.)

Commission Regulations define a member

organization's members as "all persons who 

currently satisfying the requirements for m

bership" in the organization. 11 CFR 114.

The Supreme Court concluded that "members

a membership organization are, in some w

analogous to shareholders in a business corp

tion. To qualify as a member, an individual 

have "some relatively enduring and independe

significant financial or organizational att

ment" to the membership organization. See 

v. National Right to Work Committee, 459 

197, 202, 103 S. Ct. 552 (1982). See also 

1984-22, 1984-33 and 1985-11.

Six types of CBOE members listed in 

chart below meet this membership standard 

are therefore eligible for CBOEPAC's soli

tions. These members pay dues, have cer

rights in governing the organization and 

certain membership privileges.

Two other types of CBOE members, nomi

and permit holders, do not meet the member

contin
March 1988 FEDERAL ELECTION COMMISSION

standard and thus are ineligible for CBOEPAC

solicitations. Nominees do not qualify as CBOE

members because they are affiliated with CBOE

solely as representatives of CBOE member organizations. Thus, if the nominee's organization did

not retain its CBOE membership, the nominee

would no longer be associated with CBOE. Permit

CBOE MEMBERSHIP CLASSES

Volume 14, Numbe

holders do not meet the membership stand

because they receive less than full trading pr

leges and have no interests in CBOE assets. 

can they vote on exchange matters or tran

membership rights. (Date issued: January 

1988; Length: 5 pages)

Membership Trading

Privileges

Dues Governance Voting

Rights Rights

Rights To

Transfer

Membership

Rights To

Liquidate

Assets

Solicitable

Exercisers

Lessee"

Lessor*

x

x

x

x

x

x

x

x

x

x

x

x

x

x

x

x

x

yes

yes

yes

Nominees* * x x x x no

Permit

Holders

Registered

For's***

Regular

x

x

x

x

x

x

x

x

x

x

x

x

x

x

x

no

yes

yes

Special**** x x x x yes

"In cases of leased memberships, solicitable CBOE members include lessors who retain their

voting rights, membership privileges and obligation to pay dues; and those lessees who have

acquired the rights and obligations of lessors through agreements between the parties.

""Nominees qualify for CBOE membership solely as representatives of their member

organizations.

"""Represent CBOE member organizations or nonmember brokers and dealers in options. Since

registered for's qualify as CBOE members, they retain CBOE membership, even if the

organizations they represent are no longer CBOE members.

"u*Special members exercise one-sixth voting rights. They may no longer be solicited when their 

memberships expire in 1990.

6
FEDERAL ELECTION COMMISSION

•

March 1988

AO 1981-32: Campaign Contributions

in the Form of Silver Dollars

In support of his views concerning the

constitutionality of federal reserve notes as legal

tender, Mr. Jack Polster plans to accept only

silver dollars for his 1988 campaign for an atlarge Alaska House seat. If Mr. Polster accepts

no more than 5,000 silver dollars, he will not

become a candidate under the election law.

Accordingly, he will not be required to authorize

a principal campaign committee or to deposit the

silver dollars in a campaign account.

Under the election law, an individual only

becomes a candidate, subject to the registration

and reporting requirements, when he or she

accepts campaign contributions or makes

campaign expenditures in excess of $5,000. 2

U.S.C. §43l(2)(A). If Mr. Polster's campaign does

not increase the value of the silver dollar

contributions by, for example, selling them as

collector's items or trading them as a commodity,

these contributions will be equivalent in value to

paper currency (i.e., federal reserve notes). Thus,

Mr. Polster will not trigger his registration or

reporting requirements under the election law if

his campaign accepts or spends no more than

5,000 silver dollars. See also AO 1980-125. (Date

issued: January 19, 1988; Length: 2 pages)

AO 1987-33: Law Firm and Partner Are Not

Government Contractors

The law firm of Jenner and Block (the firm) and

one of its partners would not be considered

government contractors as a result of the

partner's appointment to a federal advisory panel,

the Secretary of Labor's Council on Employee

Welfare and Pension Benefit Plans (the Council).

Accordingly, both the partner and the firm could

make contributions to a nonconnected political

committee sponsored by the firm or otherwise

participate in federal election activities

permissible under the election law and FEC

Regulations.

Under the election law and FEC rules, government contractors are prohibited from making

contributions for federal elections. 2 U.S.C.

5441c(a)(1); 11 CFR 115.2. The law defines a

government contractor as "any person who enters

into a personal services contract with the United

States or one of its agencies" and who is compensated "from funds appropriated by Congress,"

Such contracts include a "wri tten..• contract, between any person and the United States or any of

its departments or agencies, for the furnishing

of.••personal services." 11 CFR 115.1(c)(2).

Members of the Council are compensated for

their services on a per diem basis at a rate

prescribed by law. They do not negotiate a

contract (written or otherwise) regulating the

terms of their employment. Rather, the terms of

7

Volume 14, Numbe

their appointment and the amount of th

compensation are governed by federal law. Th

under FEC rules, the law partner appointed to t

Council would not be considered a governme

contractor barred from participation in fede

elections. (Date issued: January 21, 1988; Leng

3 pages)

OFFICE OF GENERAL COUNSEL

REORGANIZED

During December, the Commission approv

a proposal by the General Counsel to reorgani

the Office of General Counsel (OGC) 

restructuring the Office's top management a

creating new positions to centralize a

coordinate operations in the face of an ev

increasing workload.

Under the new plan, OGC has been divid

into three functional areas: enforcement, litig

tion and policy, with each area headed by 

Associate General Counsel (See below.) Thr

new administrative staff positions have also be

created to strengthen and centralize the manag

ment of the office.

New Associate General Counsels

In addition to Lois G. Lerner, Associate Ge

eral Counsel for Enforcement since Novemb

1986, OGe now has a new Associate Gene

Counsel for Policy, N. Bradley Litchfield, and 

new Associate General Counsel for Litigatio

Richard B. Bader.

Until her appointment as Associate Gene

Counsel for Enforcement in 1986, Ms. Lern

served the agency as Assistant General Coun

for Enforcement.' Between 1981 and 1983, s

worked as a staff attorney at the Commissio

Before joining the. Commission, Ms. Lern

served, first, as a trial attorney with the U

Justice Department and, later, as a Spec

Assistant U.S. Attorney.

Ms. Lerner holds a B.S. degree from Nort

eastern University in Boston, Massachusetts. 

1978 she received a Juris.. Doctor' degree w

honors from the Western New England Colle

School of Law in Springfield, Massachusetts.

From 1975 until his recent appointment 

Associate General Counsel, N. Bradley Litchfie

served the Commission as Assistant Gene

Counsel for Advisory Opinions. Mr. Litchfield is 

1965 graduate of Andrews University in Michig

and earned his law degree in 1970 from Howa

University in WaShington, D.C.

continu
March 1988 FEDERAL ELECTION COMMISSION Volume 14, Numt

...-~~ ~- -- -~ ~-.. - ~- ._. - - ----- - - - - -

'" '" y

"- , ,-~:' J,'~ ! I'" " (1 '. ,'- ' r" J,." =.) \ ~- '- j ; -: _: .:

, ;, . _......_~~~-~- ._-~ '-"'.---- _. - - -- -- . - --

FEC APPROVES MATCHING FUNDS

FOR PRESIDENTIAL CANDIDATE

On January 28, 1988, the Commission d

mined that Lenora B. Fulani, an independent 

didate, was eligible to receive primary mat

funds for her 1988 Presidential primary cam

and certified her first payment to the U.S. T

sury. This certification raises to $37,527,8

the total amount of payments the agency 

certified to the Treasury thus far for eli

candidates.

The summary chart below provides cum

tive information on certifications of pri

matching funds made to fourteen eligible P

dential candidates between January 1 and Jan

28, 1988. For each certified candidate, the 

indicates the total amount of funds certifie

the Commission.

During 1988. an eligible Presidential c

date may submit requests for primary mat

funds on the second and fourth Mondays of 

month. The Commission will certify a percen

of the amount requested within one wee

receiving a request. . Only contributions 

individuals Which, in the aggregate. do not ex

$250 are matchable. (See 26 U.S.C. §§9034 

9036 and 11 CFR 9034 and 903'6.1(b) and 2(a).)

$ 180,5

6,374,9

5.566,3

4,365,1

2,208,5

205,5

1,974,2

1,852,0

439,3

937,3

598.0

3,893,8

6,455,8

1~876,0

Total Am

Cert

1tAs of January 28, 1988.

Bruce Babbitt (D)

George Bush (R)

Robert J. Dole (R)

Michael S. Dukakis (D)

Pete du Pont (R)

Lenora B. Fulani (Ind.)

Richard Gephardt (D)

Albert Gore, Jr. (D)

Alexander Haig (R)

Gary Hart (D)

Jesse Jackson (D)

Jack Kemp (R)

Pat Robertson (R)

Paul Simon (D)

Primary Matching Fund

Certification Activity*

Candidate

8

Richard B. Bader served the Commission as

Assistant General Counsel for Appellate Court

Litigation from 1981 until his appointment as

Associate General Counsel for Litigation in January. Prior to joining the FEe, Mr. Bader was an

Appellate Litigation Supervisor for the National

Labor Relations Board from 1979 to 1981 and a

litigation attorney for the Board from 1975 to

1979. Mr. Bader is a 1971 graduate of Oberlin

College in Ohio and, in 1975, earned his Juris

Doctor degree with honors from the University of

Southern California Law Center,

PHOTO NEGATIVES AVAn..ABLE FOR

DUPLICATING CITIZEN'S GUIDE

Candidates, PACs, parties and other organizations may now print bulk orders of the FEC's

fully illustrated brochure, Supporting Federal

Candidates: A Guide for Citizens. Since the

Commission has only a limited supply of the

brochure, the agency is making negatives of the

Guide available on a loan basis. Organizations

that borrow the negatives are free to print their

own copies. Note, however, that the Commission

will continue to fill small orders for the Citizens

Guide, free of charge.

For more information or to request the negatives, contact the Information Services Division,

FEe, 999 E Street, N.W., Washington, D.C.

20463; or call 202/376-3120 or toll-free 800/424-

9530.

FEe PRODUCES VIDEOTAPE FOR

SENATE AND HOUSE CANDIDATES

During January, the Commission sent an

eight-minute videotape entitled ltWhy Me?" to all

registered Senate and House campaign committees. Targeted to prospective candidates and

their campaign staffs, the tape presents an overview of the election law's requirements, including

contribution limits and prohibitions, reporting

rules and the treasurer's responsibilittes, -

A VHS cassette was mailed to each Senate

and House campaign. In addition, copies of the

cassette and copies of a 3/4 inch broadcast

quality tape are available on a loan basis to anyone, upon request. Produced by the Federal

Election Commission, the tape may be duplicated

without restriction.

For more information, call 202/376-3120 or

toll-free 800/424-9530. Press inquiries should be

directed to the FEC's Press Office by calling

202/376-3155 or toll-free 800/424-9530.
March 1988 FEDERAL ELECTION COMMISSION Volume 14, Numoo

~:., '~~'~~',- -·-~·.~C :~J'~ ~:~~',~ i.j~~~r;:· ':;'?-FI~ ,. _ __~__.--.i. --++ __ _ :. ~~ _'~~ _ _~~~':' __~ . ~~:2~"~ti

RALPH J. GALLIANO v, U.S. POSTAL SERVICE

On January 8, 198B, the U.S. Court of Appeals for the District of Columbia Circuit issued

an opinion in Ralph J. Galliano. et at v. U.S.

Postal.Ser.vice. which reversed a decision by the

U.S. District Court for the District of Columbia

dismissing plaintiffs' suit. The appeals court

found that specific provisions of the Federal Election. Ca':llpaign Act (F ECA) .control, in part, the

application of 39 U.S.C. §3005 to political solicitations named in the plaintiffs' suit. The appeals

court therefore returned the case to the district

court with instructions for the court to remand it

to the U.S. Postal Service. In light of the appeals

court's opinion, the Postal Service must reconsider its decision concerning the political solicitations named in the case.

Background

During 1983 and 1984, the Congressional Majority Committee (CMC), a multicandidate polrtic8;1 c~mmittee, mail~d out letters soliciting con-

~rlbutlOns t~ CMC's independent expenditure projeet, "Americans for Phil Gramm in '8411 (APG).

In filing a complaint with the FEC against

CMC, Representative Gramm alleged that CMC

had violated the election law by:

o Using Representative Gramm's name in the

title of its independent expenditure project (2

U.S.C. §432(e)(4»); and

o Failing to clearly state in its solicitations that

CMC had not been authorized by Representative Gramm (2 U.S.C. S44ld(a)(3».

. The Commission found probable cause to belie.v.e that .CMC had violated the election law by

falling to include a disclaimer notice in its first

s~li.citatjon mailings. The Commission was evenly

divided, however, on the issue of whether CMC

had violated the law by including Representative

Gramm's name in the title of its independent

expenditure project. In July 1985, the Commission entered into a conciliation agreement with

CMC and closed the file in the case.

Aft~r filing a co.mplaint with the FEC, Representative Gramm file a complaint with the U.S.

Postal Service.* In the complaint he filed with

the Postal Service, Representative Gramm

asserted that CMC's solicitations contained false

representations and thus violated 39 U.S.C. S3005,

....For more detail on this suit, see p. 7 of the

January 1988 Record.

9

a provision (outside the purview of the FEC

governing postal fraud.

The Postal Service found, among oth

~hin~s,. that the Committee's solicitation mailin

implicitly made the false representation th

Americans for Phil Gramm in '84 was authoriz

to collect funds for Gramm's campaign, and th

the funds would be spent by Gramm's campai

The Postal Service further concluded that 

disclaimer notice required by the election l

(S441d(a)(3» did not adequately inform the rec

ients that the solicitation was not authorized 

Representative Gramm.

District Court Ruling

On August 7, 1985, Galliano, APG and CM

(hereafter referred to collectively as APG) c

tested the Postal Service's decision in distr

court. The district court affirmed the Pos

Service's decision and dismissed APG's suit.

On November 13, 1986, Mr. Galliano appea

the district court's decision. At the request 

the appeals court, the FEC filed a friend of 

court brief, which addressed the issue of whet

specific provisions of the FECA would displ

the application of 39 U.S.C. S3005 to the politi

solicitations named in the suit. See the Janu

Record, page 7, for a summary of the FE

position.

Appeals Court Ruling

Reversing the district court ruling, the 

peals court held "that the FEC is the exclus

administrative arbiter of questions concerning 

name identifications and disclaimers of organi

tions soliciting political contributions. As 

representations not specifically regulated 

FECA, however••.nothing in or about the A

[FECAl limits the 39 U.S.C. S3005 enforcem

authority of the Postal Service."

The court held that the FECA's disclaim

requirements for political solicitations maintai

a proper balance between protection of F

~mendment rights of free speech and the publ

right to be protected from fraudulent solic

tions. The court said that "a fine balance 

interests was deliberately struck by Congress 

the name and disclaimer requirements 

FECA..•. We believe they were meant to provid

s?,fe ha~en to candidates and political organi

tions WIth respect to those organizations' nam

and sponsorship. If FECA requirements are m

then as we comprehend that legislation no f

~her constraints on names and disclaimer~ may 

imposed by other governmental authorities."

The court concluded, however, that solic

~ions for political contributions were not "entir

I~mune from Postal Service scrutiny under s

tion 3005. Apart from the name of a politi

organization and the presence or absence o

sponsorship disclaimer, much may appear in 

continu
March 1988 FEDERAL ELECTION COMMISSION

solicitation for political contributions that could

materially deceive readers and thereby constitute

a false representation under section 3005."

ANTOSH v, FEC (Second Suit)

On January 7, 1988, the U. S. District Court

for the District of Columbia ruled that the plaintiff James Edward Antosh lacked standing to seek

the court's certification of his constitutional

questions to the U.S. Court of Appeals for the

District of Columbia. Mr. Antosh's questions

were included in a complaint he brought against

the FEC in September 1984. (Antosh v. FEC; Civil

Action No. 84-2737)

Since Mr. Antosh lacked standing, the district

court denied his motion to have his questions

certified to the appeals court and granted the

FEC's motion to dismiss these counts of his complaint.

Background

Mr. Antosh, a registered voter in Oklahoma,

is president of Shawnee Garment Manufacturing,

Inc. In December 1983, he filed an administrative

complaint with the FEe alleging that the separate

segregated funds of three international unions

were affiliated with the AFL-CIO's political action committee (PAC)* within the meaning of 2

U.S.C. S44Ia(a)(5). Mr. Antosh claimed that the

four political committees had failed to disclose

their affiliation in their respective Statements of

Organization and, in making contributions to several political committees, had exceeded their

single $5,000 contribution ceiling. See 2 U.S.C.

§S433(b)(2) and 441a(a)(2)(A).

After investigating Mr. Antosh's complaint,

the Commission found no reason to believe that

the labor union PACs had violated the election

law and dismissed the complaint.

On September 6, 1984, Mr. Antosh filed suit

with the district court to challenge the Commission's dismissal of his complaint. On December 3,

1984, pursuant to 2 U.S.C. S437h(a), he asked the

district court to certify two constitutional claims

to the appeals court. Specifically, he alleged that

several provisions of the election law and FEC

Regulations provided preferential treatment to

labor organization PACs over trade association

PACs. Mr. Antosh claimed that these distlnctions

violated his First and Fifth Amendment rights.

The FEe filed an opposition to Mr Antosh's

certification motion and a motion to dismiss these

claims. The agency argued that Mr. Antosh

*The full title of the AFL-CIO PAC is "American Federation of Labor Congress of Industrial

Organizations, Committee on Political Education

Political Contributions Committee (AFL-C/O

COPE-PCC).

10

Volume 14, Num

lacked standing to raise the constitutional 

tions and that federal courts had substan

settled the questions he raised.

District Court's Ruling

In denying Mr. Antosh's certification pet

the court first determined that it had the aut

ty to decide whether Mr. Antosh had standi

seek certification of his Constitutional questi

The court then went on to find that, alth

Mr. Antosh had standing to raise his ques

under the election law, he lacked standing 

Article III of the U.S. Constitution. The 

concluded that Mr. Antosh failed to demons

the kind of injury required by Article III, th

"some actual or threatened injury which is t

able to illegal conduct by the defendant" 

which "is likely to be redressed by a favo

ruling.II

First, the court rejected Mr. Antosh's c

that, as a businessman who might contribu

trade association political action committee

voice had been diminished in the political pr

by the law's alleged discrimination against 

com rnittees,

The court then rejected Mr. Antosh's c

that he had a personal stake in the law's al

discrimination against business political a

committees by virtue of his position as pres

of a corporation that was a member of 

associations.

FEe v, CITIZENS FOR THE PRESIDENT '84

On January 6, 1988, the U.S.' District C

for the Eastern District of Virginia, Alexa

Division, issued a consent order in FEC v. 

zens for the President '84. et al. (Civil Action 

87-619-A). The court decreed that the Cit

for the President '84 (the Committee), a pol

committee, and the Committee's treas

Thomas Allen Bayer, had violated the follo

reporting requirements of the election law;

o Defendants had failed to file the Com mit

1984 year-end report on time, in violation 

U.S.C. S434(a)(4)(A)(i); and

o Defendants had failed' to adequately dis

certain disbursements made for a federal c

date on the Committee's 1984 FEC report

violation of 2 U.S.C. S434(b)(5)(A) and II 

106.I(a).

Within 60 days of the court's consent o

the defendants were required to pay a $1,000 

penalty to the U.S. Treasury.

Finally, the court permanently enjoined 

fendants from similar violations of the ele

law in the future.
FEDERAL ELECTIOI\J COMMISSION

•

Mard11988

1987 PAC COUNT

By the end of December 1987, 4,165 PACs

were registered with the FEC. (The term PAC or

political action committee refers to any political

committee not authorized by a federal candidate

or established by a political party.)

Volume 14, Numl::€

The graph below plots the total number 

PACs in existence from 1973 through 1987. T

graph does not reflect the financial activity 

PACs. (Information on PAC activity for t

1987-88 Congressional election cycle will 

issued in the future.)

More detailed information on PAC grow

may be obtained from the FEC's January 18, 198

press release, which is available from the FEC

Public Records Office. Call: 376-3140 locally o

toll free, 800/424-9530.

PAC GROWTII

Nwnber

of PACs

o Corporate

• Noneonneeted*

Trade/Membership/Health

Labor

• Other**

20 00 .,-----------------------~---------------

15 00 -t---------------------~-__r,...,."""--=------- ----

o"""-.....--r---.......--

1000 +--------------------,;;;;;;;;T-----------------r---- ----~_

500 +---- -----,A::--:;,.,==-------:---~F'---- .......--------~------

Year

·For the years 1974 through 1976, the FEC did not identify subcategories of PACs other

than corporate and labor PACs. Therefore, numbers are not available for Trade/Membership/Health

PACs and Nonconnected PACs.

"''''Includes PACs formed by corporations without capital stock and cooperatives. Numbers

are not available for these categories of PACs from 1974 through 1976.

11
March 1988 FEDERAL ELECTION COMMISSION

This cumulative index lists advisory

opinions, court cases and 800 Line articles

published in the Record during 1988. The first

number in the citation refers to the "number"

(month) of the Record issue; the second number,

following the colon, indicates the page number in

that issue.

OPINIONS

1987-30: Assets of candidate's wife used to pay

off bank loan to candidate, 2:3

1987-31: Eligibility of security exchange's eight

membership classes for PAC solicitations, 3:5

1987-32: Campaign contributions in the form of

silver dollars, 3:7

1987-33: Law firm and partner are not

government contractors, 3:7

FEDERAL ELECTION COMMISSION

999 E Street,NW

Washington. D.C. 20463

Official Business

Volume 14, Numo

COURT CASES

Ralph J. Galliano v. U.S. Postal SerVice, 1:7; 

FEC v'.__,.,.

-Augustine for Congress, 1:8

-Citizens for the President '84, 3: 10

-Citizens to Elect Jerald Wilson for

Congress, 1:9

-New York State Conservative Party St

Committee/1984 Victory Fund, et al., 

v; FEC

-Antosh, 1:8; Second suit, 3:10

800 LINE

Last-Minute Contributions and Indepe

Expenditures, 2:4

Bulk Rate Mail

Postage and Fees Paid

Federal Election Commission

Permit Number G~31