FEDERAL ELEC-nON COMMISSION

June 1989 999 E StreetNW Washington DC 20463 Volume 15, Numbe

FEC DEFENDS FY 1990 BUDGET REQUEST

In a series of appearances before the House

and Senate authorization committees this spring,

FEC Vice Chairman Lee Ann Elliott testified in

support of the agency's $15.768 million budget

request for fiscal year 1990. Commissioner Elliott, who is Chairman of the Commission's finance

committee, also made a special plea for $368,000

in supplemental funds for FY 1989e ,

Remarking that the FY 1990 budget request

was "at serious odds with the Office of Management and BUdget's assessment" of the agency's

requirements, Commissioner Elliott told the Senate Rules Committee on April 6 that the requested allowance was essential for the agency to

continue operations without cutting both staff and

mandated programs.

The FEC's budget proposal for FY 1990 represents only a 2.2 percent ($335,000) increase

over FY 1989. In addition to reflecting mandated

cost-of-living salary and benefit increases, the FY

1990 request includes such expenses as an increase in rent for the Commission's offices,

expected increases in postage and other costs

related to the 1990 elections, equipment replacement and restorations of mandated programs to

normal operating levels-all amounting to a base

budget proposal of $15.330 million. As Commissioner Elliott told the Senate Rules Committee,

"This base budget is as lean and mean as it can

possibly get." . The Commission also proposes adding five

new programs to the budget, totalling an additional $438,000. These additional programs "reflect the Commission's experiences in increasing

the speed and clarity of disclosure and enforcement, and promoting a better understanding of

campaign finance," Commissioner Elliott said.

REMINDER

Have you renewed your Record SUbscription? See back page for details.

The five programs are:

o Restoration of computerized data entry of 

ported individual contributions of $200 or m

(currently, only contributions of $500 or m

from individuals are entered into the FE

computer system);

o An in-house training program for attorneys 

the General Counsel's Office;

o An addition of three support staff positions 

the General Counsel's Office;

o An expanded program of public disclosure 

campaign finance data through the agenc

Press Office; and

o A public educational program on the $1 

checkoff for the Presidential Election Ca

paign Fund.

TABLE OF CONTENTS

LEGISLATION

I FEC Defends FY 1990 Budget Request

REPORTS

2 July Reporting Schedule

4 ADVISORY OPINIONS

COMPLIANCE

5 MUR 2262

7 MUR 2286

COURT CASES

8 FEC v, Ron Bookman & Associates

8 FEC v; Friends of Isaiah Fletcher

8 United States v. Michael R. Goland

8 Michael R. Goland v, U.S. and FEC

9 Michigan Chamber of Commerce v, Austin

CLEARINGHOUSE

9 Voting Place Accessibility Study Released

STAFF

10 Acting Inspector General Appointed

10 FEC and State Agencies Hold Cross-trainin

PUBLICATIONS

10 Campaign Finance Brochure Series

11 INDEX
June 1989 FEDERAL ELECTION COI\J1I\J1ISSI01\J Volume 15, l\lumbe

JULY REPORTING SCHEDULE

Pirst Report for New Committees

The first report a committee files after registration should cover receipts and disbursements

occurring since the committee's date -of registration, as well as .aetivity which occurred prior to

registration in 1989. In the case of candidate

committees, any activity which took place in 1988

should be reported separately.

These guidelines for the first report apply to

any newly registered committee, regardless of the

com mittee's filing schedule.

Note that committees of Congressional candidates who ran in special elections in 1989 follow

the normal nonelection year reporting schedule

for Congressional candidate committees.

Semiannual Report

The semiannual {or mid-year} report must be

filed by July 31. It must disclose all activity (not

previously reported) that occurred between January I (or the closing date of the last report) and

June 3G.

Quarterly Report (Presidential committees only)

Due by July 15, the report should cover all

activity from April 1 (or from the closing date of

the last report) through June 30.

Monthly Report

Committees reporting on a monthly schedule

must do so by July 20. The monthly report covers

all activity between June 1 and June 30.

How to Change Filing Schedule

PAC and party committees that plan to

change their reporting schedules in 1989 (e.g.,

from monthly to semiannually) must notify the

Commission in writing. A committee may not

change its filing frequency more than once a year.

11 CFR 104.5 (e), Principal campaign committees

for Congressional candidates must file semiannually during' 1989 and may not change their reporting schedules. The FEe also requests that

Presidential committees inform the Commission

in writing if they decide to change their reporting

schedules•.

WHERE REPORTS ARE PILED

Committees must file all reports and statements simultaneously with the appropriate federal

and state officials, at the following addresses. 11

CFR 108.5.

2

Filing with the Fedeeal Government

o The principal campaign committees of H

candidates and committees supporting or 

posing only House candidates file with 

Clerk of the House, Office of .Reeords 

Registration, 1036 Longworth House O

BuUding, Washington, D.C. 20515. 11 

104.4(c)(3) and 105.1.

o The principal campaign committees of Se

candidates and committees supporting or 

posing only Senate candidates file with 

Secretary of the Senate, Senate Public Reco

Senate Hart Office Building, Room 232, W

ington, D.C. 20510. 11 CFR 104.4(c)(2) 

105.2.

o All other committees, including the princ

campaign committees of Presidential ca

dates, file with the Federal Election C

mission, 999 E Street, N.W., Washington, 

20463. 11 CFR 105.3 and 105.4.

Filing with State Governments

o The principal campaign committees of 

gressional candidates must file a copy of e

report and statement with the Secretary 

State or the appropriate elections officia

the state in which the candidate seeks fed

office. 11 CFR 108.3.

o The principal campaign committees of P

dential candidates must file copies of rep

and statements with the Secretary of Stat

the appropriate elections official of the sta

which the committee makes campaign ex

ditures. These reports must contain .a11 fi

cial transactions which apply to that s

during the reporting period covered. 11 

108.2.

o PACs and party committees making contr

tions or expenditures in connection with H

and Senate races file reports and statemen

the state in which the candidate seeks elec

The law requires a copy only of that portio

the report applicable to the candidates b

supported. Committees supporting Preside

candidates must file in the states in which 

Presidential committee and donor comm

have their headquarters. .

HOW TO OBTAIN MORE INFORMATION

Reporting forms for the semiannual rep

or quarterly report, depending on the commit

will be sent to all registered committees. C

mittees may request additional forms from 

·FEC or use photocopies of blank forms previo

sent to them.

Questions and requests for forms should 

addressed to the FEC's Information Services D

sion. Call 800/424-9530 or 202/376-3120.
June 1989 FEDERAL ELECTION COMMISSION Volume 15, Numbe

JULY REPORTING SCHEDULE

The following chart and paragraphs explain the July reporting schedule for the various categor

of filers. Note that all registered political com mittees will receive a repor ting packet with a peel-

address label. The Commission asks that committees place this peel-off label on line I of the reporti

form, the space provided for identifying the committee's name and address. Any corrections should 

made directly on the label.

Report

Type of Filer

Congressional Candidate CommltteesI

Presidential Candidate Committees!

Quarterly Filers2

Presidential Candidate Committees/

Monthly Filers2

PAC!Party Committees: Semiannual Filers3

PAC!Party Committees: Monthly Filers3

Quarterly

July 15

x

Monthly

JUly 20

x

x

Semiannual

July 31

x

x

Reports sent by registered or certified mail must be postmarked by the filing date. Repo

mailed first class or hand delivered must be received by the filing date.

lIncludes Congressional candidates who ran in special elections in 1989.

2All Presidential candidate committees are required to file on either a monthly or a quarterly ba

during 1989. 11 CFR 104.5(b)(2).

3AU PA C and party committees are required to rile on either a monthly or a semiannual basis 

1989. 11 CFR 104.5(c).

The Record is published by the Federal Election Commission, 999 E Street, N.W., Washington,

D.C. 20463. Commissioners are: Danny L. McDonald, Chairman; Lee Ann Elliott, Vice Chairman

Joan Aikens; Thomas J. Josefiakj 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)

3
ADVISORY OPINION SUMMARIES

ADVISORY 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.

AO 1989-1: Payment to Congressional Employee

for Manuscript Not an Honorarium

A payment made to Ron Haskins for an original

manuscr-ipt to be included in a book is not an

honorarium under the Act. 'The compensation to

Mr. Haskins, a staff member of the House Ways

and Means Committee, would not be a payment

for an "appearance, speech, or article," the three

activities covered by the honorarium provision (2

U.S.C. §44li). Instead, the Commission regarded

the manuscript as a chapter in a book; books are

specifically excluded from the definition of "article" in the FEC regulations. 11 CFR 110.12(b)

(4). 

Volume 15, Numbe

AO 1989-2: Committee's Settlement of Debt

with Corporate Creditor

Dave Baker for Congress, the principal campa

committee for C. David Baker's unsuccessful 1

House campaign in California, may settle a d

to a corporate creditor using all or most of 

available funds, provided that the commit

complies with the FEC's debt settlement regu

tions and submits a Statement of Settlement 

the Commission for review.

The committee had asked whether a paym

to Wilcox &. Sons (one of its corporate credito

using all or most of the committee's cash on h

would be unlawful discrimination in favor o

single creditor. The committee owed a total 

$78,867 to twelve creditors, but its availa

funds after the election amounted to o

$5,719.76 To recover $10,643.50 (plus inter

and attorney fees) that the committee owed 

Wilcox &. Sons, the creditor had filed 'suit in st

court against the committee and the candid

charging them with breach of contract. (The s

was still pending at the time of the request.)

The committee saw no likelihood of rais

additional funds with which to pay other cre

Mr. Haskins was invited by the Bush Instit

for-Child and Family Policy at the University 

.North Carolina-Chapel Hill to address a co

quium on "Legislation for Children," He was a

asked to submit a paper that would be used 

discussion at the colloquium and eventually p

lished (along with works by other authors) i

book on child-related public policy. Regardless 

whether he attended the conference, Mr. Hask

was to receive $500 from the Institute u

submission of his manuscript.

In AD 1978-59, the Commission clarified 

regulatory distinction between an article an

book with respect to honoraria, focusing on 

form in which the writing is published, The 

made clear that neither the length of the ma

script nor its inclusion in a publication with wo

by other authors solely determined whether 

manuscript was an article or a book. Based 

that advisory opinion, the Commission conclu

that the use of Mr. Haskins' writing in a b

determined that his material was not an artic

Therefore, the $5(}0 payment would not be 

honorarium under the Act.

As a salaried employee of the federal gove

ment, Mr. Haskins remains subject to the ho

raria limitations in section 44li, though in 

particular situation those rules do not apply.

The Commission expressed no opinion ab

matters outside the FEe's jurisdiction, such as 

possible application of House rules to Mr. Hask

activity and the tax ramifications. Chairm

Danny L. McDonald and Commissioner Sc

Thomas plan to file a concurring opinion. (D

issued: April 10, 1"989; Length: 5 pages)

FEDERAL ELECTION COMMISSION

Corporation's plan to match employee

contributions to PAC with corporate

contributions to charity. (Date made

publics May 9, 1989; Length: 2 pp.)

Corporation's plan to match employee

contributions to PAC with corporate

contributions to charity. (Date made

public: May 10, 1989; Length: 4 pp.)

Subject

Sale of assets by candidate's federal

committee to candidate's state committee. (Date made publici April 7,

1989; Length: 2 pp.)

Refund of suspected illegal contribution to Congressional candidate. (Date

made public: April 27, 1989; Length: 4

pp., including supporting documents)

Stock given as contribution to Congressional candidate. (Date made public: May 1, 1989; Length: 5 pp.,

including supporting documents)

Corporation's establishment of separate segregated fund for soliciting

restricted class of several affiliated

corporations and an affiliated partnership. (Date made publics May 9, 1989;

Length: 2 pp.)

June 1989

AOR

1989-4

1989-6

1989-5

1989-7

1989-8

1989-9

4
June 1989 FEDERALELECTION COMMISSION Volume 15, Numbe

tors, claiming it lacked the needed supporters or

saleable assets.

The Commission has long held that state law,

rather than federal law, governs whether an alleged debt exists, what its amount is, and which

persons or entities are responsible for paying it.

(See AD 1975-102.) The California court, therefore, is the proper forum for determining these

questions. If the suit by Wilcox & Sons proceeds

to judgment, the committee will not be prohibited

by the Act from paying the judgment rendered,

using all or most of its funds.

The committee and the creditor may agree to

settle the debt for less than the full amount

owed-or even less than the amount of the court's

judgment-s-as long as the settlement complies

with the debt settlement conditions set out in

FEC regulations at 11 CPR 114.10. Under those

rules, a corporation may settle a debt for less

than the full amount owed only if the corporation

has "treated the outstanding debt in a commercially reasonable manner." The regulations give

three conditions for determining whether a debt

settlement is "commercially reasonable'e (1) the

creditor must have made the initial extension of

credit in accordance with FEC regulations, (2) the

debtor political committee must have "undertaken

all commercially reasonable efforts to satisfy the

outstanding debt" and (3) the creditor must have

pursued "remedies in a manner similar in intensity

to that employed by the corporation in pursuit of

a nonpolitical debtor." 11 CFR 114.10(c).

Finally, once the two parties agree upon a

settlement, either or both must file a Statement

of Settlement with the Commission for review.

Such a document must report the terms of credit,

the steps the debtor took to satisfy the debt and

the remedies pursued by the creditor. 11 CFR

114.10(c).

Neither the election law nor the Commission's regulations require that any particular creditor be given priority in. the settlement of debts.

Vice Chairman Lee Ann Elliott filed a concurrence. (Date issued: April 25, 1989; Length, ineluding concurrence: 6 pages)

AQ. 1989-3: Stockholder Contributions to

Trade Association PAC through

Payroll Deduction

Branham, lnc., a corporate member of the Employee Stock Ownership Association, Ine., may not

use a payroll deduction system for collecting

contributions from employee stockholders to the

association's separate segregated fund, ESOP

PAC. The association is Ii national, nonprofit

trade association.

Commission regulations prohibit a member

corporation of a trade association from using

payroll deduction to collect contributions for the

association's PAC from the member's executive

and administrative personnel and their families.

II CFR 114.8(e)(3). This provision omits any

5

mention of "stockholders." However, the C

mission maintains that subsection (e)(3) should 

be read as implicitly permitting payroll ded

tions for stockholders.

In AO 1983-17, the Commission permi

the use of a payroll deduction plan to col

contributions of employee stockholders to th

own corporation's PAC. The Commission c

cluded that, as stockholders, such employees w

sollcitabla under 11 CFR 114.5 and could the

fore have their contributions collected by me

of the payroll deduction methods permitted 

soliciting others within the restricted class. J

as that opinion treated all employees within t

restricted class equally, the Commission in

prets the prohibition of 114.8(e)(3) to bar the 

of a payroll deduction plan for the contributi

of all employees within the restricted class o

member corporation to the trade associati

PAC, including employee stockholders. (D

issued: April 24, 1989; Length: 3 pages)

MUR 2262: Presidential Candidate's Failure

to Register and Report on Time

This MUR, resolved through conciliation, c

cerned the failure of a Presidential candidate 

his committee to register and report in a tim

manner after conducting extensive activities t

indicated he was actually a candidate, not sim

an individual "testing the waters,"

Background

The MUR originated in a sworn and notari

complaint filed with the FEC by a private citi

against the candidate and his "exploratory" co

mittee. At the time, the candidate had 

formally announced his candidacy, nor had he 

his exploratory committee filed any statement

reports with the Commission.

The complaint. focused on a nationw

closed-circuit broadcast through which the can

date addressed about 150,000 supporters. In 

speech the candidate solicited contributions 

the exploratory committee and said that he wo

formally declare his candidacy for President w

in one year if certain conditions were met: th

million registered voters had to sign petiti

endorsing the candidacy and pledging their s

port through monetary contributions and vol

teer work. In connection with the broadcast

mass mailing to approximately 1.6 million r

dences repeated the candidate's request for c

tributions and other support.

continu
June 1989 FEDERAL ELECTION COMMISSION

The complaint alleged that the candidate's

fundraising activities and expenditures did not

qualify for the testing-the-waters exemptions

provided in the regulations at 11 CPR 100.7(b) and

100.8(b). Given the nature of the mailing and the

broadcast, the complaint alleged, the expenditures connected with them (more than $5,000)

exceeded the la w's registration thresholds, thereby requiring the candidate and his committee to

register and to disclose financial information.

The candidate did not file a Statement of Candidacy with the Commission until approximately

one year after the broadcast.

General Counsel's Report

Under the election law, an individual seeking

federal office becomes a "candidate" only after

raising or spending $5,000 for his or her campaign.

Once this threshold is crossed, a candidate must

file a Statement of Candidacy with the Commission within fifteen days. In the Statement, the

candidate must designate a principal campaign

committee, which then must register with the

Commission by filing a Statement of Organization

within ten days.

FEC regulations permit individuals to undertake certain activities to "test the waters" before

making a decision to run for office. These

activities are not considered "contributions" or

"expenditures" in FEC regulations, though they

may not be made with prohibited funds. Registration and reporting of these activities are not

required unless the prospective candidate decides

to run. At that time, all receipts and expenditures relating to the exploratory activity are

reportable. II CPR 100.8(b)(l)(i).

Regardless of whether a formal announcement of candidacy is made, the testing-thewaters regulations specify certain types of campaign activity as indicative of an individual's

decision to become a candidate. 11 CFR 100.7(b)-

(l)(ii)(A)-(E). These activities, which can trigger

candidate registration requirements if more than

$5,000 is raised or spent, include:

o Political advertising aimed at the general public to make known the individual's intention to

run;

o Fundraising in excess of exploratory needs or to

amass campaign funds for use after candidacy

has been established;

o Activity conducted over a protracted period of

time; and

o Making or authorizing statements referring to

the individual as a candidate.

In applying these guidelines to the present

case, the General Counsel recommended that the

Commission find that the broadcast and mailings

undertaken by the candidate indicated that he had

already made a decision to run for President,

notwithstanding the conditions he put on that

decision in his statements.

6

Volume 15, Numbe

The broadcast reached 150,000 people, 

the follow-up mailings reached over 1.6 mill

the whole project raised more than $2.3 millio

sum indicating a broader purpose than the test

of a campaign's feasibility. The protracted per

of time established during the broadcast for c

ducting the fundraising project-one year-a

indicated that the candidate was building supp

for an actual campaign. Furthermore, altho

the candidate stated that he would not decide 

run for President until after one year, ot

segments of the broadcast included speakers 

clearly supported such a candidacy.

. The follow-up mailings informed their rec

ients that they could claim a tax credit fo

contribution of $50 or less, although such a cre

applied only to contributions to actual candida

not to donations to individuals who were test

the waters.I

Concluding that the candidate had cros

the registration threshold through the broadc

and mailing project, the General Counsel reco

mended that the Commission find probable ca

to believe that the candidate and his commi

violated the election law by failing to register 

report in a timely manner.

Commission Determination

The Commission accepted the General Co

sel's recommendations, finding probable cause 

believe that both the candidate and his commi

had violated the election law's registration 

quirements by failing to register with the F

until approximately one year after crossing 

law's registration threshold. 2 U.S.C. SS432(e

and 433. The Commission also determined t

the committee should have begun filing report

receipts and disbursements as early as the Pr

dential filing date following the broadcast; in 

doing so, the committee had violated 2 U.S

S434.

The Commission and the respondents reac

a conciliation agreement that included a c

penalty of $25,000.

1Income tax credits for political con

butions were provided for in 26 U.S.C. section 

That provision was repealed in 1986 by P.L. 

514.
FEDERAL ELECTION COMMISSION

•

•

•

June 1989

MUR 2286: Membership Organization's

Political Activity

This MUR, resolved through pre-probable cause

conciliation, concerned an incorporated membership organization's involvement in voter registration and support of a federal candidate.

Background

The Commission generated this matter as a

result of a complaint filed by a national party

committee. The party alleged that the membership organization violated the Federal Election

Campaign Act by making corporate contributions

or expenditures, failing to include a disclaimer on

a solicitation, failing to register as a political

committee and failing to file reports of receipts

and disbursements.

General Counsel's Report

Voter Registration Activities. The Commission's investigation, conducted after finding "reason to believe" that a violation had occurred,

indicated that the incorporated membership organization had made partisan voter registration

communications to the general public.

While FEC regulations permit corporations to

make nonpartisan voter registration communications to the general public under certain circumstances, the regulations prohibit them from

making any partisan communications outside of

their restricted class, l.e., the executive and

administrative personnel of the corporation, the

stockholders, and their families. II CFR 114.3.

According. to the regulations governing

corporate activity, a corporation may support

nonpartisan voter registration drives beyond its

restricted class if the corporation jointly sponsors

the drives with a nonprofit organization that is

exempt from federal taxation under 26 U.S.C.

S501(c)(3) or (4) and that does not support, endorse or oppose candidates or political parties. A

corporation may also cosponsor such a drive with

a state or local agency that is responsible for

administering elections. II CFR 114.4(c)(J)(i)(A).

In regard to the voter drive activities conducted by the incorporated organization in this

ease, the Commission's investigation and evidence

supplied by the organization showed that, for two

of the days during which the voter drive took

place, partisan voter registration communications

were made to the general public without a cosponsor. The General Counsel concluded that the

respondents had violated II CFR 114.4(b)(2) and

(e) and 2 U.S.C. S44Ib(a).

Recruitment of Precinct Captains, The Commission's investigation also revealed that an employee of the membership organization had

recruited members of the organization to be precinct captains for a federal candidate's campaign.

Although the organization's PAC reimbursed it for

the salaried time spent, the General Counsel

7

Volume 15, Numbe

believed that the organization had, neverthele

made a corporate contribution in violation of 

U.S.C. S44Ib(a).

Disclaimer. Whenever any person makes 

expenditure for a communication that expres

advocates the election or defeat of a clea

identified candidate, the communication m

state who authorized and paid for it. 2 U.S

S44Id(a)(2). In a letter mailed to the organi

tion's members, the respondent expressly adv

cated the election of a federal candidate a

solicited contributions to the candidate's ca

paign, yet did not include a disclaimer stating w

authorized or paid for it. For that reason, t

General Counsel said that the .respondent h

violated 2 U.S.C. S44Id(a)(2).

Registration/Reporting. A political comm

tee is any association which receives contrib

tions or makes expenditures aggregating in exc

of $1,000 during a calendar year. 2 U.S.C. S4

(4)(A). Each political organization must file 

Statement of Organization with the Commissio

2 U.S.C. S433(a). The treasurer of a politi

committee must file reports of receipts and d

bursements with the Commission. 2 U.S.C. S4

(a)(J). The organization had filed none of th

documents.

The respondent claimed that the organi

tion's primary purpose was educational-not co

mercial-and evidence corroborated that its m

activities were not undertaken to influence f

eral elections. Furthermore, the contributions 

expenditures which the respondents did receive 

make in one calendar year were considerably l

than $1,000. Therefore, the General Coun

concluded that the respondent was not a politi

committee, was not required to report under 

Act, and therefore did not violate 2 U.S

SS433(a) and 434(a)(I).

Commission Determination

In a conciliation agreement concluded 

tween the respondents and the Commission pr

to the latter's finding "probable cause to belie

the Act had been violated, the respondent agre

to pay a $1,000 civil penalty. In the conciliat

agreement, the organization admitted to stag

voter registration drives for the general pub

that were, on two days, partisan and conduc

without a cosponsor. The respondent also adm

ted to using a salaried corporate employee 

recruit precinct captains for the candidate and 

financing a solicitation that did not have a d

claimer stating who authorized and paid for it.
June. 1989 FEDERAL ELECTION COMMISSION Volume 15, Numbe

FEC v.FRIENDS OF ISAIAH FLETCHER

On April 24, 1989, the U.S. District Court for

the District of Maryland ruled that. Friends of

Isaiah Fletcher and Mr. Fletcher, as treasurer,

violated section 434(a)(2)(A) of the 'election .law

by failing to file an October 1986 quarterly re-·

port. (Civil Action No. PN 88-2323.) The committee 'was Mr. Fletcher's principal campaign

com mittee for his 198"6 Congressional bid.

The court ordered the defendants to pay a

civil penalty of $5,000· and to pay the Commission's costs in the action. The court also permanently enjoined the defendants from similar

future violations of the Act.

FEC v, RON BOOKMAN &: ASSOCIATES

On May 2, 1989, the U.S. District Court for

the Northern District of Georgia, Atlanta Division, issued a final consent order and judgment in

FEC v. Ron Bookman &: Associates (Civil Action

No. 1:88-CV-1807-JTC). The consent order de-'

clared that Bookman &: Associates, a Georgia

corporation, made a $150 contribution. to a

federal candidate. The Act prohibits corporations

from making contributions or expenditures in connection with federal elections. 2 U.S.C. S441b.

The order also declared that Ron Bookman,

as president of the company, had violated thelaw

by consenting to the making of the contribution.

Section 44lb also prohibits corporate officers and.

executives from consenting to the making of

contributions and expenditures.

The consent order included a $500 civil

penalty and permanently enjoined the defendants

from similar future violations of the Act.

NEW LITIGATION

United States v. Michael R. Goland ..

In December i988 a federal grand jury in Los

Angeles indicted Michael R. Goland and two codefendants, Lyle Weisman and Sandor Habalow,

for criminal violations of federal law in connection with the 1986 Senatorial election in California. Mr. Goland, president and controlling

shareholder of Balboa Construction Company (a

California corporation), and the others are

charged with:

o Conspiring to defraud the United States and, in

particular, the FEC by impairing, impeding and

defeating the agency's lawful function and duties under the Act (18 U.S.C. §37l); and

o Conspiring to conceal and to cause others to

conceal from the FEC, on two occasions, contributions amounting to $120,000-prohibited by

2 U.S.C. S441(a)(I)(A)-made by Mr. Goland to

8

the' Elect. Ed Vallen to the U.S. Senate com

tee (18 U.S.C•.SSIOOl and J002(b)".

Mr. Goland is also personally charged' 

knowingly and witlfully violating the Act by m

ing the contributions amounting to $120,000 

the Vallen committee in the names of 56 o

persons. 2 U.S.C. §§437g(d) and 441f.

According to the indictment, the $120,00

contributions to the Vallen committee were m

to finance a last-minute television advertisem

advocating Mr. Vallen's election to the U.S. S

ate. Mr. Yallen was the Senatorial candidat

the American Independent Party, opposing S

ator Alan Cranston and the Republican c

lenger, then-Congressman Ed Zsehau, By fin

ing the Vallen .committee's last-minute m

effort, the defendants hoped to divert sup

from the Zschau campaign to Mr., Vallen, 

faclfitating-a victory by Senator Cranston. 

cause of the elaborate· conduit scheme 

defendants are charged with perpetrating, 

Vallen committee was not informed of the 

origins of the $120,000 and reported the mone

contributions from the. 56 individuals.) The 

has, submitted an' amicus curiae brief defen

the constitutionality of the -Aet,

Mr. Goland has .also filed a civil suit aga

the United States asking that the indictmen

dismissed' on constitutional grounds (see bel

the Commission has intervened as a party def

ant in that suit.

U.S. District Court for the Central Dis

of California.. Criminal Action No. CR-88-1

RSWL, December 14, 1988.

Michael R. Goland v. U.S. and FEe

On May 11, 1989, the U.S. Court of App

for the Ninth Circuit denied a- motion by Mic

Goland for a stay of his criminal trial in U.S

Michael R. Goland (above). However, the C

granted the plaintiff-appellant's motion for 

expedited appeal of a district court's dismissa

a civil complaint Mr. Goland had brought aga

the government in connection with his crim

prosecution.

Mr. Goland had fHedhis appeal on Ma

1989, after the U.S. District Court for the C

tral District of California that same day 

missed with prejudice his petition for certif

tion of certain constitutional questions relate

the government's actions against him, pursuan

2 U.S.C. S437h. Mr. Goland also asked 

appeals court to expedite its review of the m

ter.

Mr. Goland's original complaint had inclu

a petition for a stay of the criminal proceed

against him while he pursued his civil action. 

had asked the district court to declare that 

Federal Election Campaign Act's provisionsg

erning contributions violated his rights under 

First Amendment. The plaintiff claimed that 

First Amendment guaranteed a right to m
June 1989 FEDERALELECTION COMMISSION

unlimited anonymous contributions to candidates.

He also asked the court to declare that the Act's

reporting requirements and criminal provisions, as

well as 18 U.S.C. § 1001 (regarding the making of

false statements to a government agency), were

unconstitutional as applied to him in the allegations of the criminal indictment.

Because Mr. Goland's complaint concerns the

constitutionality of the Act, the district 'court

permitted the FEe to intervene as a defendant in

the case.

U.S. Court of Appeals for the Ninth 'Circuit

(Civil Action No. 89-55422), May 1, 1989.

Michigan State Chamber of Commerce v. Austin

On May 1, 1989, the U.S. Supreme Court

agreed to review a Sixth Circuit Court of Appeals

decision in Michigan State Chamber of Commerce

v. Austin, et a1. (Civil Action No. 86-1867). The

appeals court in September 1988 had ruled that a

Michigan law prohibiting corporations from making independent expenditures with general treasury funds was unconstitutional as applied to the

Michigan State 'Chamber ,of Commerce. 'The

Chamber is a nonstoek, nonprofit corporation,

funded by dues. Seventy-five percent of its members are corporations.

The suit originated in 1985 when the Chamber sought to make an independent expenditure

for a newspaper advertisement to advocate the

election of a candidate for state office. Although

the Chamber had a separate segregated fund for

political purposes, the organization wanted to

make the disbursement for the ad from its general

treasury. Finding that section 54(1) of the Michigan Campaign Finance Act appeared to prohibit

independent expenditures from the. general treasuries of corporations, the organization filed suit

against Michigan's then-Secretary of State,

Richard H. Austin, challenging the law's constitutionality.

Section 54(1) was upheld by the U.S. District

Court for the Western District of Michigan, which

found that the prohibition serv.ed the "compelling

state interest of preventing the threat or appearance of corruption."

The appeals court disagreed, finding the prohibition unconstitutional as .applied to the Chamber. Comparing the case to the recent Supreme

Court decision in FEC v. Massachusetts Citizens

for Life. Inc., the appeals court noted that the

district court "made no finding that corporate

entities like the Chamber actually corrupted the

political process. II Because the Chamber was not

a "traditional corporation" set up for economic

gain, the appeals court determined there was no

threat or appearance of corruption inherent in the

organization's making of independent expenditures.

The FEC has filed an amicus curiae brief

asking the Court to overturn the appeals court

decision.

9

Volume 15, Number 

IMPROVEMENTIN VOTING PLACE

ACCESSmILITY REPORTED

In a biennial report to Congress, the FEC h

documented SUbstantial improvements in the a

cessibility of polling places to the elderly a

handicapped throughout the United States. Of t

nearly 152,000 polling places throughout the cou

try, 79 percent were deemed accessible. The

figures represent an 'Increase in accessibility 

six percentage points (about 6,000) since 198

despite the application, in most cases, of mo

'stringent accessibility criteria.

In those cases where voting places we

judged inaccessible, the reasons for that judgme

included:

o Lack of adequate parking facilities;

o Lack of ramped stairs; and

o Obstructed passages to entrances and oth

architectural barriers.

The Voting Accessibility for the Elderly a

Handicapped Act of 1984 requires each politic

subdivision within each state to take steps 

ensure that the elderly and handicapped. have a

cess to polling places for federal elections, unle

the chief elections officer of a state determin

that no alternative to a nonaceessible voti

place exists. The Act also requires the FEC 

report to Congress every two years on progre

made in making polling' places more accessible 

the physically disabled.

The FEC's National Clearinghouse on Ele

tion Administration conducted the sttidy of voti

place accessibility. For a copy of the 19

report, contact the Clearinghouse at 202/37

5670 or 800/424-9530.

CORRECTION

The 800 Line article in the May

Record. "Basic Rules for Reeordkeeping,"

gave a partially incorrect answer to the

question 'on documenting advances to staff

for travel and subsistence.

With regard to advances of more than

$500, last month's article erroneously said

the committee should note the name and

address of the employee.

The correct answer is: If the staff

member was advanced more than $500, the

name and address of the (i.e., the

commercial vendor paid by the employee)

should be noted, along with the amount advanced, date and purpose.

Additionally, a receipt, invoice or

canceled check must be kept. II CFR

102.9(b) (1) and (2).
FEDERAL ELECTION COMMISSION Volume 15, Numb

CAMPAIGN FINANCE BROCHURE SERIES

The FEC's Information Services Division 

tributes a series of short brochures to help c

dates, polittcal committees and the general p

comply with federal election laws and ge

most out of the agency's services. Each bro

encapsulates a different aspect of campaig

nance law or FEC resources:

o Using FEC Campaign Finance Informatio

plains how to gather information abou

financial activity of candidates and po

committees. It describes the FEC's com

indexes and suggests ways to utilize them.

o Public Funding of Presidential Elections g

brief history of the Presidential public fu

program-including the $1 tax checkoff fo

Presidential Election Campaign Fund-an

explanation of how the process works. I

explains the ways individuals may support 

licly financed candidates.

o Advisory Opinions answers questions abou

individuals and committees may seek gui

from the Commission on political activiti

requesting advisory opinions, or AOs. An 

an official response from the Commission 

question pertaining to the application o

law and regulations to specific situations.

o Filing a Complaint explains the steps tha

be taken if an individual wants to regis

formal complaint concerning a possible 

tion of the election law.

Topics of other FEe brochures include:

o Candidate Registration

o Committee Treasurers

o Contributions

o Corporate/Labor Communications

o Corporate/Labor Facilities

o FEC and Federal Election Law

o Free FEe Publications

o Independent Expenditures

o Local Party ActiVity

o Political Ads and Solicitations

o State Access to FEe Data

o State Elections and Federal Campaign Law

o Trade Associations

o Volunteer Activity

Any of these free brochures may be or

from the FEC by calling 800/424-9530 or 202

3120, or by writing to the Commission at 

St., NW, Washington, DC 20463. Multiple c

of all brochures are available.

10

June 1989

COMMISSION APPOINTS ACTING

INSPECTOR GENERAL

In April the Commission appointed E. Craig

Crooks, Deputy Assistant Staff Director of the

FEC's Reports Analysis Division, to be the agency's acting Inspector General (IG). The appointment was necessary to comply with the Inspector

General Act Amendments of 1988 (P.L. 100-504),

which included the FEC among several federal

agencies required to appoint an IG.

The IG reports directly to the Commission

and is charged with conducting audits and investigations to detect fraud, waste and abuse within

the agency and to recommend policies and procedures designed to improve the economy and

efficiency of operations and programs.

Mr. Crooks has been a staff member at the

FEC since 1975. He served several years with the

CIA before his arrival at the Commission; prior

to serving with the CIA, he worked as an insurance investigator-adjustor. He holds bachelor of

arts degrees in history and government from Idaho

State University.

FEC AND STATE AGENCIES CONDUCT

INTERAGENCY AUDIT TRAINING

Staff from the Kentucky Registry of Election

Finance, the Washington State Public Disclosure

Commission and the Federal Election Commission

participated in a one-day, intensive cross-training

session on audit techniques, held at the FEC's

headquarters on May 19, 1989. The informal

discussion compared and contrasted the agencies'

statutory auditing duties and the issues they face

in conducting desk and field audits.

The four-member Kentucky delegation was

headed by Ray Wallace, executive director of the

Kentucky Registry. The representatives from

Washington were led by David Clark, deputy director of the Washington State Public Disclosure

Commission.

The cross-training session was originally proposed by Mr. Wallaee during the 1988 conference

of the Council on Governmental Ethics Laws. Mr.

Wallace's agency is in the process of implementing major 'changes in the Kentucky state election

law.
1 •

June 1989 FEDERAL ELECTION COMMISSION Volume 15,Numbe

•

. This cumulative index lists advisory opinions, court cases, MUR summaries and 800 Line

articles published in the Record during 1989. The

fir.st number in each citation refers to the "nurnber"(month) of the Record issue; the second

number, following the colon, indicates the page

number in that issue.

OPINIONS

1?~7-31: Solicltable membership classes of securities exchange (reconsideration) 4:3

1988-37: Affiliated status of tw~ corporate PACs

after leveraged buy-out, 1:6

1988-44: Effect of statute of limitations on committee's debts, 2:4

1988-:-45: Definition of national party committee 2~ ,

1988-46: Corporation's solicitation of licensees

2:4 '

1988-47: PUblisher's donation of free magazines to

candidate prohibited, 1:6

1988-48: Contributions to trade association PAC

matched with charitable donations, 2:5

1988-49: Federal bankruptcy trustees not considered government contractors, 2:5

1989-1: ~ayment to Congressional employee for

manuscript not an honoranum, 6:4

1989-2: Committee's settlement of debt with

.corporate creditor, 6:4

1989-3: Stockholder contributions to trade association PAC through payroll deduction, 6:5

COURT CASES

FECv.

-AFSCME-PQ, 1:11

-Batts, Committee to Elect, 5:8

-Bookrnan &: Associates, 6:8

-Braun for Congress Committee, 1:10

-aun for Congress, 1:11

-Californians for a .strong America (88-

1554), 1:9; (88-6499), 1:11

-crtizens Party, 1:12

-Dietl for Congress, 1:10

-Friends of Isaiah Fletcher, 6:8

-Furgatch (88-6047), 5:7

-Haley Congressional Committee, 1:9

-Holmes Committee, 3:3

-Life Amendment PAC, 1:11

-Populist Party, 1:12 and 5:8

-Rlehards for President (89-0254) 4:9; (88-

2832), 5:8

-Rodriguez, 1:10

-Survival Education Fund, 'Inc., 3:4

-Taylor Congressional Committee, 1:10

-W~inberg, 5:9

11

Fund for a Conservative Majority, Debtor, 3:4

Goland v. U.S. and FEC, 6:8

United States v, Goland, 6:8

v. FEC

-Common Cause (87-2224),3:3

-Common Cause (89-o524-GAG), 4:10

-Maine Right to Life Committee, Inc." 4

-Miller, 3:3

-Stern, 3:4

-USDC, 1:9; 3:3

MUR SUMMARIES

MURs 1528/1739: . Party activities: prohib

funds, transfers, allocations and loans, 4:7

MUR 2175: Excessive and prohibited eontr

tions accepted by 1984 Presidential campa

3~ r 

MU R 2262: Presidential candidate's failure 

register and report on time, 6:5

MUR 2286: .Membership organization's polit

'activity, 6:7

MUR 2356: PAC's failure to file reports on ti

4:7 

MUR 2545: Excessive contributions made and 

cepted by PAC, 5:6

800 LINE

Debt retirement by candidate committees, 1:7

Designating a principal campaign committee, 3

Recordkeeping rules for all committees, 5:9
Treasurers of registered political committees automatically receive the Record and are not

required to send a Renewal Notice.

SUbscribers who already sent in their Renewal Notices do not need to contact us again. Subscribers who notified us of address changes should allow four weeks for the correct information to

appear on the mailing label.

RECORD SUBSCRIPTION RENEWAL

Record subscribers who received a Renewal Notice in recent weeks are reminded to send

back the postage-free notice immediately in order to remain on our mailing list. Renewals can

also be made by telephone by calling the FEC at 800/424-9530.

Volume 15, Numbe

Bulk Rate Mail

Postage and Fees Paid

Federal Election Commission

Permit Number G-31

FEDERAL ELECTION COMMISSION

CHANGES OF ADDRESS FOR POLITICAL COMMITTEES

Any change of address by a registered political committee must, by law, be made in writing

as an amendment to FEC Form 1 (Statement of Organization) and filed with the Clerk of the

House, the Secretary of the Senate or the FEC, as appropriate.

Official Business

FEDERAL ELECTION COMMISSION

999 E Street, NW

Washington, DC 20463

June 1989