Volume 7, Number 10

THE FEDERAL ELECTION

COMMISSION

1325 KStreet NW., Washington, D.C. 20463

October 19B1

FEC ADOPTS PROCEDURES

FOR ADMINISTRATIVE TERMINATION

OF POLITICAL COMMITTEES

On August 17; 1981, the Commission approved new

guidelines for administrative termination of political committees registered with the FEC. Under the guidelines

(FEC Directive No. 45: Administrative Termination Policy

and Procedures), the Commission will conduct a review of

all registered committees during each nonelection year

to determine their eligibility for administrative termination.

Reviews may also be initiated by committees seeking

termination. In either case, the Commission will notify

those committees it has approved for administrative termination. (Committees initiating reviews will also be notified

if they have not been approved for administrative termination.] A committee will then be terminated unless it objects

to the FEC's determination within 30 days of receiving the

notice.

General Guidelines

The Commission will apply three general guidelines to

administrative termination of committees.

1. The Commission will not terminate a committee that is

part of a pending (or possible) compliance action or

audit without the concurrence of the Office of General

Counsel and/or Audit Division.

2. The Commission will not terminate a committee that has

pending debt settlement statements before the Commission. In the event that a committee has remaining debts

after debt settlement statements have been approved, the

Commission will examine its files to determine the

committee's eligibility for administrative termination.

3. The Commission will not terminete an authorized

committee if the candidate has become a candidate for a

future federal election. Evidence of candidacy would

include a Statement of Candidacy (or a letter stating

the same information) filed with the FEC; or the appearance of the individual's name on a state ballot as a

candidate for nomination or erection to a federal office.

Specific Criteria

The Commission will terminate authorized Congressional

and Presidential committees whose financial activity during

the previous calendar year was minimal enough to meet the

criteria listed in Alternatives I or II below:

Criteria for Administrative Termination: Alternative I

Total receipts and/or expenditures were lessthan $5,000

(for Congressional committees) or $10,000 (for Presidential committees);

Total outstanding debts were less than $2,500; and

Total assets (Le., cash-on-hand, excess funds, and debts

and obligations owed to the committee} did not exceed

the committee's total liabilities (i.e., outstanding debts

and obligations) by more than $5,000.

Criteria for Administrative Termination: Alternative If

Total committee receipts and/or expenditures were less

than $5,000 (for Congressional committees) or $10,000

(for Presidential committees);

Total outstanding debts exceeded cash-on-hand and

accounts receivable; and

Any debt or obligation that may have constituted a

violation of Parts 110 or 114 of FEC Regulations" did

not exceed $2,500, per violation.

Any authorized committee that does not meet these termination criteria and any other political committee may also

be considered for administrative termination if the cornrnittee meets One or more of the criteria for administrative

termination spelled out in Section 102.4 of Commission

Regulations.

Post-Termination Responlibilities

Committees terminated by the Commission no longer

have to report. If, however, a terminated committee has

remaining debts or obligations after it has been terminated,

it must continue liquidating the debts and obligations. The

committee must also maintain all records required by the

Act and FEC Regulations.

A copy of FEC Directive No. 45 is available for review and

copying in the FEC's Office of Public Records.

It These Pam govern contribution and expenditure limits end

prohibitions and corporate and labor organiUltion activity,

respectively.
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ADVISORY OPINION REQUESTS

Advisory Opinion Requests (AO Rs) pose questions on

the application of the Act or Commission Regulations to

specific factual situations described in the AOR. The following chart lists recent AORs with a brief description of

the subject matter, the date the requests were made public

and the number of pages of each request. The full text of

each AOR is available to the public in the Commission's

Office of Public Records.

AOR Subject Date Made No. of

Public Pages

1981-36 Treasury funds of incorpo- 8/18/81 20

reted association (with foreign

corporate members] contri·

buted to its PAC for nonfederal elections.

1981-37 Tickets and broadcast media 8/21/81 4

ads purchased by corporations

and labor organizations in

connection with public affairs

program featuringfedaral

candidate.

1981·38 Commarcial use of namasl 8/24'81

addresses of candidates and

campaign-related persons

listed in FEC'spublic files.

1981-39 Administratjve COsts of union 8/25/81 2

payroll deduction plan reimbursed to corporation.

1981-40 Mamentos providedby corpo- 8/28/81 3

rations to PAC contributors.

1981-41 Trade association's use of its 8/28/81 2

mBQllzine and general membership meatingto solicit approvals from membercorporations

for PAC solicitetions;acceptance of contributions at

meeting,

1981-42 Consulting corporation's 9/8/81 2

Iiebilityfor costs of leased

equipment used by candldate.

1981-43 Nonpartisanget-out-the-vota 9/11/81 2

posterssponsored bV trade

association's PAC end posted on premisesof member

corporations.

ADVISORY OPINIONS: SUMMARIES

An Advisory Opinion (AD) issued by the Commission

provides guidance with regard to the specific situation

described in the AOR. Any qualified person who has

requested an AO and acts in accordance with the opinion 4

will not be subject to any sanctions under the Act. Other

persons may rely on the opinion if they are involved in a

specific activity which is indistinguishable in all material

aspects from the activity discussed in the AO. Those seeking guidance for their own activity, however, should consult

the full text of an AO and not rely only on the summary

given here.

AO 1981·29: New Mexico Pre-primary Nominating

Convention Not a Separate Election

A New Mexico pre-primary convention held by a major

party to select nominees for the U.S. House of Repre·

sentatives is not a separate election under the Act (2

U.S.C. §§431(1)(B) and 441a(a)(1)(A)), but rather

constitutes one step in the primary election campaign.

Therefore, contributions made by individuals to advance

Arthur E. Trujillo's nomination at the convention would

be subject to the overall $1,000 limit for his primary

election campaign. 2 U.S.C. §441a(al(1)(A). A separate

$1,000 limit would apply to his general election campaign.

The New Mexico pre-primary convention does not

constitute a separate "election" because, under New

Mexico law, the convention does not have the "authority to nominate a candidate" to the House seat. Rather,

the convention serves only as one method by which

individuals may obtain access to the primary election '1

ballot. Specifically, an individual who obtains 20 percent .

of the convention's delegate vote qualifies for the

primary ballot as a designated nominee of the convention. Alternatively, an individual may qualify for the

ballot by filing a nominating petition directly with the

Secretary of State. 1·8·39 NMSA· 1978. The major political parties are required to select their candidates by secret

ballot during the primary election held after the preliminary

party convention. 1·8·11, 12 NMSA 1978. (Date issued:

August 13, 1981; length: 3 pages)

..Citations r'llfer to lhe New Mexico Statutes Annotatad.

The RECORD is pubtisned by the Federal Election Commission, 1325 K Street, N.W., Washington, D.C. 20463. Commissioners are: John Warren McGarry, Chairman; Frank P. Reiche, Vice Chairman; Joan D. Aikens, ThomasE. Harris;

Vernon W. Thomson; Robert O. Tiernan; William F. Hildenbrand, Secretary of the Senate, Ex Officio; Edmund L.

Henshaw, Jr., Clerk of the House of Representatives, Ex Officio. For more information, call 202/523-4068 or toll-free

800/424·9530. .

2
AO 1981-30: Liability and Status of New Political

Organization and Old Political Committee

with Similar Names

A group that plans to "organize a national political party"

for conservatives may adopt a name, the Constitution

Party of the U.S. (the 1981 Committee). that is similar

to that used by a political committee organized in 1979

to promote the Presidential candidacy of Governor

Meldrim Thomson, the Constitution Party (the 1979

Committee). The Act and FEC Regulations restrict

the choice of a committee name only for separate

segregated funds and candidate-authorlzed committees;

they also prohibit use of a candidate's name by an

unauthorized committee. 11 CFR 102.14. Further, the

simitarity in the committees' names would not by itself

make the 1981 Committee liable for excessive contributions (if any) accepted by the 1979 Committee. An FEC

determination of liability for possible violations of the

Act would be based on all the facts and circumstances

surrounding the operation of the two committees.

The Commission further noted that, even though the

1979 Committee had ceased all activity, it would remarn

a "political committee" until it filed an acceptable

termination report with the FEC or the FEC made an

administrative decision to term inate the committee. 2

U.S.C. §433(d){1) and (2); 11 CFR 102.3 and 102.4.

Moreover, the Commission recognized the 1979 Committee as a political committee, despite the fact that the

committee had never "formally orqanizejd] " or adopted any organizational documents (e.g., bylaws or a

constitution) because it evidently met one of the thresholds for political committee status spelled out in 2

U.S.C. §431 (4). By contrast, recognition of a political

committee as a national committee of a political party is

dependent, in part, on the committee's adoption of

bylaws. 2 U.S.C. §431(14). 11 CFR 100.13. (Date

issued: August 20, 1981; Length: 3 pages)

ADVISORY OPINION

INDEX AVAILABLE

An updated edition of the Commission's cumulative

Index to Advisory Opinions is now available. The August

1981 Index includes three parts: a subject index and an

index by U.S. Code, both covering all opinions issued from

April 1975 through August 1981; and an index by FEC

Regulations covering opinions from 1977.

Requests for the Index to Advisory Opinions should be

addressed to the FEC's Office of Public Records. Purchase

price (for duplication costs) is $5.10, payable in advance.

Checks, made payable to the United States Treasurer,

should be sent to the FEC's Office of Public Records.

3

FEe PROPOSES AMENDMENTS

GOVERNING DRAFT COMMITTEES

On August 28, 1981, the Commission sent a letter to the

Speaker of the House and the President of the Senate

recommending immediate legislative action on amendments

to the election law that would clarify the Act's coverage of

the activities of "draft" committees organized to support or

influence the nomination of undeclared federal candidates.

The proposed amendments (outlined below) were prompted

by a recent decision of the U.S. Court of Appeals for the

District of Columbia Circuit in FEC v. Machinists Non-Partisan Political League and FEC v. Citizens for Democratic

Alternatives in 1980. The appeals court held that the Act,

as amended in 1979, regulated only the reporting requirements of draft committees. The Commission has also filed a

petition for a writ of certiorari with the Supreme Court

seeking reversal of the appeals court decision. (For a

detailed summary of the suits, see the July 1981 issue of

the FEC Record.)

The Commission noted in its letters to Congress that, if left

standing, the appeals court ruling would "create a serious

imbalance in the election law and the political process"

because "any group organized to gain grass roots support

for an undeclared candidate would operate completely

outside the strictures of the Federal Election Campaign

Act....However, any group organized to supportadeclared

candidate [would] be subject to the Act's {registration and

reporting} requirements and contribution limitations."

Therefore, the Commission noted, "the potential exists for

funneling large aggregations of money, bath corporate and

private, into the federal electoral process" through unlimited

contributions made to draft committees that support

undeclared candidates.

Legislative Recommendations

The Commission recommended that Congress consider

the following amendments to the Act in order to prevent a

proliferation of "draft" committees during the 1982

Congressional elections and to reaffirm Congressional intent

that draft committees are "political committees" subject to

the Act's provisions.

Bring Funds Raised and Spent for Undeclared Candidates

Within the Act's Purview. section 431(8)(A)(i) should be

amended to include in the definition of "contribution"

funds contributed by persons "for the purpose of influencing a clearly identified individual to seek nomination for

election or election to federal office...." Section 431 (9)

(A)(i) should be similarly amended to include within the

definition of "expenditure" funds expended by persons on

behalf of such Ita clearly identified individual."

Restrict Corporate and Labor Organization Support for

Undeclared Candidates. section 441 b(b) should be revised

to expressly state that corporations, labor organizations and

national banks are prohibited from making contributions or

expenditures "for the purpose of influencing a clearly
identified individual to seek nomination for election or

election. , ." to federal office.

Limit Contributions to Draft Committees to $1,000.

Section 441 ala){1} should include explicit language stating

that "no person shall make contributions to any committee

[including a draft committee] established to influence the

nomination or election of a clearly identified individual for

any Federal office which, in the aggregate, exceed $1,000."

FEC REQUESTS FY '83 BUDGET

AT "REDUCTION" LEVEL

On August 27, 1981, the Commission voted to submit to the Office of Management and Budget a $10,545,

642 budget request for fiscal year 1983. The request

represents a seven percent reduction in funding from the

amount that would be required to maintain the Commission's FY 1981 level of activity ILe.,$11,341,111), The

requested budget would result in some reductions in

Commission staffing and programs.

FEC PUBLIC APPEARANCES

In keeping with its objective of making information available to the public, the Commission accepts

invitations to address public gatherings. This column

lists upcoming scheduled Commission appearances,

the name of the sponsoring organization, the location

of the event and the name of the Commission's

speaker. For additional information on any scheduled

appearance, please contact the sponsoring organiza·

tion,

10/22 Congressional Quarterly

Seminar on Election 1982

Washington, D_C.

Chairman John Warren McGarry

11/5 Chamber of Commerce of the U.S.

Conference on Political Activity

Minneapolis, Minnesota

Chairman John Warren McGarry

11/10 The Federal Bar Association

Conference On Election Law

Washington, D.C.

Charles N. Steele, General Counsel

The list below identifies all FEC documents which

appeared in the Federal Register between May 29 and September 8, 1981. Copies of these notices are not available

from the FEC.

11/16 The Washington Journalism Center

Conference for Journalists on

Politics 1982

Washington, D.C.

Chairman John Warren McGarry

FEC PUBLISHES NOTICE

OF PROPOSED RULEMAKING:

CORPORATE/LABOR COMMUNICATIONS

On September 8, 1981; the Commission published a

Notice of Proposed Rulemaking in the Federal Register

(46 Fed. Reg, 44964) seeking comments on possible revisions to Sections 114.3 and 114,4 of FEC Regulations.

(On September 16, corrections to this notice were also

published. See 46 Fed. Reg. 45784.) The proposed

revisions concern communications by labor organizations

and corporations (including incorporated membership

organizations and trade associations) to their solicitable

classes and to the general public. All written comments on

the proposed revisions are due by October 8, 1981.

The Commission will then hold a public hearing on October 26, 1981. If necessary, the hearing will be continued

on October 28 and 30, 1981. Those interested in testifying at the hearing should so indicate on their written

comments.

Possible revisions to Section 114.4 concern nonpartisan

communications that corporations and labor organizations

may direct to the general public. Specifically, they pertain

to preparation and distribution of voting materials, voting

records of Members of Congress and voter guides that set

forth the positions of candidates on various issues.

Notice Title

Federal Register

Publication Date Citation

Subsequent to receiving written comments and conducting hearings, ~~e Commission will submit the revised

regulations to ~ongress. If neither the House nor the

Senate objects to them within 30 legislative days, the

proposed revisions will take effect.

Copies of the Notice, as well as information on submitting

written comments, may be obtained by calling toll-free

(800)424-9530 or (202)523.4068.

4

1981-7 Filing Dates for 5/29/81

Pennsylvania

Special Election

1981·8 11 CFR Part 114 9/8/81

Communications

by Corporations

and Labor

Organizations

(Notice of Proposed

Rulemaking and

Corrections to Noticel

46 Fed. Reg,

28942

46 Fed. Reg.

44964 and

45784
NEW LITIGATION

Athens Lumber Company v. FEC

Pursuant to 2 U.S.C. §437h(a}, plaintiff seeks the

district court's certification of questions challenging the

constitutionality of 2 U.S.C. §441b(a) to an en bane

court of appeals. Plaintiff claims this provision of the

election law abridges its First and Fifth Amendment

rights by prohibiting corporations and national banks

from making contributions and expenditures in connection with federal elections.

Plaintiff further seeks a declaratory judgment from the

court of appeals that:

2 U,S.C. §441 bla) is unconstitutional. null and void

on its face and as applied to contributions and

expenditures that the Athens Lumber Co. proposes to

make on behalf of federal candidates; and

The Athens Lumber Coo's proposed contributions and

expenditures would not violate the election law.

Plaintiff therefore asks the court of appeals to enjoin the

FEC from initiating enforcement proceedings against it

as the result of applying §441 b(a) to the company's

participation in federal elections.

(U.S. District Court for the Middle District of Georgia,

Athens Division, Docket No. B1·79·Ath., August 6.

1981)

Reagan Bush Committee v. FEC

Plaintiff asks the district court to issue an order:

Preliminarily enjoining the FEC from releasing an audit

report dealing with the Reagan Bush campaign;

Requiring disclosure of certain materials under the

Freedom of Information Act; and

Requiring expedited court action on plaintiff's suit,

pursuant to 5 U.S.C. §552(a)(4)(D).

Plaintiff also asks the court to enjoin the FEC from taking

any further action with respect to plaintiff's "alleged

violations" of the Act or repayments of public funds recommended by the FEC, until the Commission:

Makes available all the documents requested by plaintiff

under the Freedom of Information Act;

Provides plaintiff with a further opportunity to respond

to the alleged violations and recommended repayments;

and

Conducts a hearing on these disputed matters.

(U.S. District Court for the District of Columbia, Docket

No. C.A. 81·1893, August 10, 19B1)

• The Commission is authorized by 26 u.s.C. §9007. et seq. to

conduct audits of the general election campaigns of publicly

funded Presidential candidates.

5

S. Louis Wind v. FEC

Plaintiff asks the district court to quash an FEC

subpoena requiring him to produce bank records with

respect to an FEC investigation of a 1980 Presidential

campaign committee. Plaintiff claims the subpoena is

overbroad and does not substantially comply with the

Right to Financial Privacy Act of 1978.

(U.S. District Court for the Middle District of Florida,

Tampa Division, Docket No. 81-19 Misc. T-GC. August

17,1981)

FEe PUBLISHES NAMES

OF NONFILERS

On August 17, 1981, the Commission published the

names of 443 committees authorized by U.S. House

and Senate candidates that had failed to file their 1981

semiannual reports, due on July 31, 1981. This report

should have covered all financial activity from January 1

(or the closing date of the last report) through June 30,

1981.

The Federal Election Campaign Act (the Act) requires

the authorized committees of all candidates in House

and Senate races to file reports on a semiannual basis in

a nonelection year. This includes committees with

debts from previous campaigns and newly registered

campaign committees that are raising and spending

money in 1981 for future campaigns.

All committees are notified by the FEC of their reporting obligations approxirnatelv one month before each

reporting date. Committees that fail to file timely

reports are again notified that their reports have not

been received. As required by law, only authorized

committees of candidates are published.

Further Commission action against committees that fail

to file their reports on time will be decided on a case-bycase basis. The Act gives the Commission broad authority to initiate enforcement actions against such committees, including civil enforcement and the imposition of

civil penalties.
AUDITS RELEASED

TO THE PUBUC

The Federal Election Campaign Act, as amended (the

Act) gives the Commission authority to audit campaigns of

all Presidential candidates who receive public funds, and the

campaigns of other political committees. Final audit reports

are available to the press through the Press Office and to

the general public through the Office of Public Records.

The folloWing is a chronological listing of audits released

between August 14 and August 27, 1981.

Date Made

Audit Public

1. Carter/Kennedy Unity Dinner Committee 8/14181

2. The Carter/Mandale Reelection Commit- 8/18/81

tee, Inc. (Final Audit Report for the

General Election Campaign)

3. Tennessee Campaign '80 (Joint fund· 8/27/81

raising committee for President Carter

and the Tennessee Democratic Party)

COSTS OF CAMPAIGNING INCREASE

Commission data shows that a total of 2,265 Congressional candidates collectively spent $24,2 million on their

1979·80 campaigns, whereas 1,909 candidates spent $197

million for 1977-78 Congressional elections.

During the 1979-80 election cycle, those Congressional

candidates who waged successful 1980 primary campaigns,

and then went on to be contenders in the general election,

spent most of the money. Candidates who lost in the

primaries spent less than a combined total of $50 million.

Congressional candidates raised $252 million during 1979-

80, and $202 million during the 1977-78 election cycle. Of

the $252 million raised by 1980 Congressional candidates:

nonparty (noncandidate) committees contributed $55.3

million (or 22 percent). Again, most of these contributions

were made to campaigns involved in both primary and

general elections. Losing primary candidates received less

than $4 million from nonparty committees.

• For a detailed breakdown of how each type of nonparty commit·

tee divided its contributions among 1980 Congressional candidates, see the graphs on p. 6 of the September 1981 Record.

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