1325 K Street NW Washington DC 20463 Volume 11, Numbe

REGULATIONS

1 Contribution Limits

4 ADVISORY OPINIONS

COURT CASES

6 FEC v, NCPAC

7 New Litigation

7 FEDERAL REGISTER NOTICES

800 LINE

8 Foreign Nationals

LEGISLAnON

9 1985 Legislative Recommendations

COMPLIANCE

9 MUR Index Updated

10 MUR Summary

10 Presidential Nonfilers

TABLE OF CONTENTS

contin

contributions if the campaign has no outstand

primary debts.

o Should a committee be required to return 

portion of a contribution that exceeds its 

outstanding debts or may the com mittee 

the contributor to redesignate the contribut

for another election?

o Should committees receiving designated con

butions be permitted to deposit them until t

can determine whether they have outstand

debts?

o How much time should the committee be 

lowed to calculate debts?

o If a committee has no debts, how much t

should the committee be allowed before 

returns the contribution or asks for a redesig

tion?

o Should a committee be allowed to consolid

its primary debts with its general election fu

and use general election contributions to re

primary debts? How would such a rule aff

the contribution limits for both elections?

o Should the scope of these suggested rules 

expanded to cover contributions designated 

a general election, runoff or special electi

(Current rules apply only to contributions de

nated for primary eampaigns.)

FEDERAL ELECTION COMMISSION

Contributions by Persons Other 1bBn

Multicandidate Committees. II CFR 110.1

The proposed rules would clarify that the

contribution limits described in this provision

(110.1) apply only to individuals, partnerships,

unincorporated associations and political

committees other than rnultieandidate committees.

May 1985

Designation of Contributions for

Particular mections. II CPR IIO.I(b)(2)

The election law establishes separate contribution limits for primary and general elections.

Under current regulations, to determine the election for which a contribution should be attributed,

the Com mission either: I) relies on the contributor's written statement designating a specific

election or 2) in the absence of a designation,

presumes that the contribution is for the next

election.

Different problems have arisen with regard

to designated and undesignated contributions. For

example, under current rules, a contribution designated for a primary, caucus or convention but

received after the date of the designated election

may be accepted by the campaign only to the

extent that net outstanding debts remain for that

election. However, the current rule does not indicate what should be done with the designated

CONTRmUTION LIMITS: NOTICE

OF PROPOSED RULEMAKING

On April 17, 1985, the Com mission published

a notice of proposed rulemaking in the Federal

Register (50 Fed. Reg. 15169), which seeks comments on suggested revisions to FEe regulations

governing contribution limits. 11 CFR 110.1 and

110.2. The proposed rules address several issues

whic,h have emerged since the regulations were

first prescribed in 1977. The draft amend ments

also clarify the scope of these rules.

Written com ments on the proposed rules

should be submitted, by May 17, 1985, to Ms.

Susan E. Propper, Assistant General Counsel,

FEC, 1325 K Street, N.W., Washington, D.C.

20463. Ms. Propper may also be contacted at

202/523-4143 or toll free 800/424-9530. Major

revisions contained in the proposed rules and

related issues are highlighted below.

•

•
2

The Record is published by the Federal Election Commission, 1325 K Street, N.W., Washington,

D.C. 20463. Commissioners are: John Warren McGarry, Chairman; Joan D. Aikens, Vice Chairman;

Lee Ann Elliott; Danny Lee McDonald; Thomas E. Harris; Frank P. Reiche; Jo-Anne L. Coe,

Secretary of the Senate, Ex Officio; Benjamin J. Guthrie, Clerk of the House of Representatives,

Ex Officio. For more information, call 202/523-4068 or toll-free 800/424-9530.

FEDERAL ELECTION COMMISSION

Volume 11, Numoo

Contributions to Political Parties.

11 CPR IlO.I(c)

Under the current rules, donors other th

multicandidate corrmittees may contribute 

more than a total of $20,000 per year to 

political committees of a national political par

The proposed rules would clarify that the natio

com mittee of a political party could accept up 

$20,000 in contributions, even if it was the aut

rized committee of a publicly funded Presiden

nominee.

election. Other provisions, however, would per

designated

redesignations

for

when

former

contributions

campaigns

were

with no

origina

o

standing debts. (See above.) The Commiss

seeks comments on whether redesignations sho

be allowed at all and, if so, under what circu

stances.

"See 11 CFR 110.6.

Contributions by Partnerships,

II CPR IlO.I(e)

Under the current rules, partnership con

butions must be attributed to both individ

partners and the partnership. This rule may, ho

ever, be unnecessarily burdensome for large pa

nerships because the amount of the contribut

attributed to each partner may be nominal. T

Commission therefore solicits suggestions 

methods that would prevent evasion of the lim

without imposing unnecessary requirements 

large partnerships.

Since a partnership is not a corporation

may not establish or pay the administrative co

of a separate segregated fund. It may, howev

establish a contribution plan for partners, 

associate itself with a nonconnected politi

committee to which partners may contribute. T

Commission seeks comments on the follow

issues raised by these political activities:

o Should partnerships that sponsor contribut

plans be considered conduits or intermediar

subject to the reporting requirements* 

other FEC rules?

o Would a partnership that establishes such 

contribution plan become a political comm

tee, subject to the Act?

o Should a nonconnected political committee w

which a partnership is associated be permit

to establish a checkoff contribution plan? T

Commission is concerned that the adminis

"For a summary of AO 1984-32, see p, 6 of

the October 1984 Record.

Procedure for Designating Contributions.

11 CPR IlO.l(b)(4)

The proposed rule would promote greater

uniformity in the reporting of contributions by

recipient and donor committees. The rule would

encourage contributors to clearly designate contributions for particular elections on either: a) the

written instrument used to make the contribution

(e.g., a check) or b) a written statement accompanying the contribution, which bears the contributor's signature,

Under this rule, a committee could not obtain

written redeslgnations for contributions that appeared to exceed the contributor's limits for that

Determining When a Contribution is Made

and Received; and Who is an Agent.

11 CPR IlO.I(b)

The current rules do not define when a contribution is "made" by a donor or "received" by a

committee. Nor do the rules define "agents" eligible to receive contributions on the campaign's

behalf. Such definitions would help clarify how to

attribute contributions to particular elections, for

purposes of both contribution limits and reporting.

This becomes important, for example, when a

campaign receives a check shortly after the election, but dated before the election. Although the

proposed rules do not contain specific definitions,

the explanation accompanying the rules sets forth

several alternatives, discussing the merits of

each. (See pages 15171-15172 of the notice of

proposed rulemaking.)

C8lculating Net Debts OUtstanding.

II CPR IlO.I(b)(3)

Current rules do not define a campaign's "net

debts outstanding," important for purposes of determining whether a campaign could receive

designated contributions after an election. (See

discussion above.) The Commission therefore

seeks com ments on whether the rules should be

revised to:

o Incorporate the formula for determining net

debts outstanding that is spelled out in AO

1984-32'" and include other items in this formula; or

o Incorporate other approaches that would avoid

the net debts outstanding formula. (See pages

15170-15171 of the statement accompanying

the proposed rules.)

May 1985
FEDERAL ELECTION COMMISSION

•

•

May 1985

tive expenses for a checkoff plan may inevitably be attributed to corporate partners or result

in excessive contributions by the partnership to

the nonconnected committee.

o Should partnership contributions be attributed

exclusively to the individual partners and be unlimited as to the partnership itself?

Contributions to Candidates for More

Than One Federal Office. II CFR 110.1(f)

The proposed rules would follow the current

rules concerning contributions to an individual

who is running for more than one office. Additionally, the proposed rules would make clear that

a candidate's authorized committee for one office

(e.g., a Senate primary) could not make transfers,

loans, contributions or expenditures on behalf of

the candidate's committee for another office

(e.g., a House primary) if the transaction resulted

in excessive contributions by contributors to the

first campaign.

Aggregation of Contributions.

II CFR 110.I(h)

Under the current rules, if a donor contributes

to both a candidate's authorized committee and

an unauthorized committee which supports or

anticipates supporting that candidate, under certain circumstances, the contributions are subject

to a single, per election limit. The rule is designed

to prevent circumvention of the limits in the

event an unauthorized committee: I) solicits contributions to support a candidate or 2) receives

contributions earmarked for a particutar candidate. The Commission seeks comments on

whether the purpose of the provision is more

clearly stated in the current regulations or in the

proposed rules.

The proposed rules would list factors indicating

whether contributors have "knowledge or belief"

that their contributions to unauthorized committees would, in turn, be contributed to a specific

candidate or used to make independent expenditures on his/her behalf. The proposed rules would

make clear that this provision applied to

unauthorized committees (including rnulticandidate com mittees) making direct contributions to

candidates and to committees making independent

expenditures on behalf of these candidates.

Contributions by Spouses and Minors.

II CFR 1l0.I(i)

Under the current rules, when spouses in a

single income family contribute to candidates,

both spouses must either a) sign the contributor

check or b) include a statement with the check

signed by both spouses, which specifies the

amount of the contribution attributed to each

spouse. The Commission seeks comments on

whether:

3

Volume 11, Numoo

o To delete the reference to contributions 

spouses in a "single income family" in light 

the suggested changes to the rules on "attri

tion of joint contributions" (see discussion 

Section llO.l(k) below); or

o Alternatively, to expand the provision to 

clude contributions by spouses to political co

mittees.

The current rules also permit minors to m

contributions to federal candidates, provided c

tain requirements are met. (See 11 C

llO.I{i)(2).) The Commission seeks comments 

whether the rules should be revised to per

contributions by minors to political committees

Contribution Limits for

Certain Elections. 11 CFR nO.1 (j)

The proposed rules would make clear tha

separate limit applied to contributions made 

each kind of election enumerated in the Act, 

a primary, general, runoff, special election an

caucus or convention. The Commission seeks c

ments on:

o Whether or not a general election which is 

held because a candidate received a majority 

votes in the previous election would nevert

less constitute a separate election for purpo

of the contribution limits and reporting requ

ments. (This statement follows the FEe's c

clusion in AD 1984-54. *)

o Whether a separate contribution limit sho

apply to a primary that is not held becaus

candidate was nominated through a caucus 

convention. (In AO 1982-49, the Commis

ruled that a separate limit did not apply. * *)

Attribution of Joint Contributions.

II CFR 110.l(k)

The proposed rules would require that a j

contribution be accompanied by a written sta

ment specifying the portion of the contribu

attributable to each donor. The requirem

would be dropped, however, for spouses in a sin

income family who made joint contributio

Instead, the recipient could presume that one 

of the contribution was attributable to e

spouse. The notice further asks whether the p

sumption of equal contributions should be 

tended to contributions drawn on any type of j

account. The proposed rules would not, howe

alter the current requirement that all contri

tors sign the contribution check.

"'For a summary of AO 1984-54, see pag

of the January 1985 Record.

uFor a summary of AO 1982-49, see pag

of the November 1982 Record.
May 1985 FEDERAL ELECTION COMMISSION

Contributions by Multieandidate

Committees. II CFR 110.2

Multicandidate committees face many of the

same issues that arise with regard to contributions made by other persons. The proposed rules

for multicandidate committee contributions would

therefore follow those proposed for contributions

by other persons (highlighted above). The Commission nevertheless welcomes com ments on

whether different rules should be adopted for

multicandidate committee contributions, as well

as comments on the proposed reorganization of

various sections of this provision, (These changes

are discussed on page 15173-15174 of the statement accompanying the proposed rules.)

ADVISORY OPINION REQUESTS

The following chart lists recent requests for

advisory opinions (AORs). The full text of each

AOR is available to the puolle in the Commission's Office of Public Records.

AOR Subjeet

1985-12 Trade association solicitation plan:

dues/solicitation statement; state affiliates as collecting agents; solicitablllty

of member facilities. (Date made publics

March 14, 1985; Length: 2 pages, plus

14-page supplement)

1985-13 Transfer of campaign funds between former and new candidates seeking same

office. (Date made public: April 2, 1985;

Length: 2 pages)

1985-14 Democratic national committee's negative media program against Republican

Congressional incumbents. (Date made

public: April 12, 1985; Length: 6 pages,

plus 7-page supplement)

ADVISOR Y OPINIONS: SUMMARIES

An Advisory Opinion (AO) 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 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

4

\t)lume 11, Numte

their own activity, however, should consult 

full text of an AO and not rely only on 

sum mary given here.

AO 1984-62: campaign Firm's Expenditures Fo

SIBteMail Program * B.A.D. Campaigns (the firm), an incorpora

campaign consulting firm, would make prohibi

contributions or expenditures on behalf of fede

candidates it endorsed and listed on slates mai

to the general public if the firm: 1) provid

advertising or feature space to the candidates 

less than the normal or usual charge or 2) 

dorsed candidates who did not pay for a listing 

a slate. 11 CFR 100.7(a)(l)(iii)(B) and 10

(a)(I)(iv)(B).

Under its proposed plan, in early 1986, 

firm would decide which candidates to endorse 

slates mailed to the general public. The fi

would then negotiate with the endorsees for th

purchase of feature or advertising space on 

slates. Endorsed candidates would, however, 

listed even if they did not purchase special pU

city. The program would be financed exclusiv

from the proceeds of these sales.

In the Commission's view, unless the fi

were paid by the candidates, the firm's distri

tion of the slates would represent contributions 

expenditures for campaign advertising on beh

of the candidates because the endorsements wo

be part of a general electioneering messa

Specifically, in each slate mail piece, the fi

planned to take a "clear overall political positi

and "endorse positions on all or virtually 

candidates and propositions appearing on a pa

cular voter's ballot. I! Since the election law pro

bits the firm (a corporation) from making su

election-influencing contributions and expen

tures, the Commission did not address the issue 

whether the firm should file reports disclosing 

activity. (Date issued: March 21, 1985; Length

pages)

AO 1985-7: Solicitation of PersomeI of

Corporation's Wholesalers

Anheuser-Busch Companies, Inc. (A-BC) may 

solicit contributions to its separate segrega

fund from the executive and administrative p

sonnel of wholesale distributors who have equ

agreements with A-BC's wholly owned subsidia

Anheuser-Busch, Inc. (Anheuser-Busch). T

wholesaler equity agreement, which details m

ual rights and obligations of each party, does 

provide sufficient evidence of affiliation w

Anheuser-Busch. 

Under the election law, a corporation m

solicit contributions to its separate segrega

r/lSee also FEC v. Californians for Democ

tic Representation, p. 7.
May 1985 FEDERAL ELECTION COMMISSION

fund from the solicitable personnel of an affiliate.

2 U.S.C. S441b(b)(6); 11 CPR 114.5(g)(I). Evidence

of affiliation includes: I) documents which indicate that the corporation has the authority or

power to direct another entity, and 2) evidence

that the corporation has the authority to hire,

discipline, discharge or otherwise influence personnel decisions of the other entity. 2 U.S.C.

S441a(a)(5); 11 CFR lOO.5(g)(2) and 110.3(a)(I)(iii).

The equity agreements between Anheuser-'

Busch and its wholesalers do not indicate that

Anheuser-Busch exercises sufficient influence

over the wholesalers to meet the affiliation standard. The independence of the wholesalers is not

significantly impaired by their contractual relationships with Anheuser-Busch. For example, although Anheuser-Busch has a limited right to

approve each wholesaler's designation of a successor-manager, the equity agreement clearly

states that the wholesaler retains responsibility

for the management of its own business. As

another example of independence, the wholesale

distributor may market the products of other

brewers along with those of Anheuser-Busch.

The Commission distinguished this opinion

from ADs 1977-20, 1978-61 and 1979-38. In those

opinions, the Commission found that various corporations could solicit the solicitable personnel of

their franchisees or licensees because the rela-

•

tionshlp between the corporation and the franchisees (and licensees) satisfied the criteria for

affiliation. (Date made public; March 15, 1985;

Length: 3 pages)

AD 1985-8: Fundraising to Cover Refund of

IDegal Contributions

In Advisory Opinion 1984-52, issued to the Russo

for Congress Committee (the Committee) in December 1984, the Commission stated that the

Committee had to refund illegal corporate contributions received by Representative Russo's 1982

Congressional campaign immediately upon receiving the FEC's opinion. (For a summary of AO

1984-52, see p. 4 of the January 1985 Reeord.)

However, since the Committee's debts exceeded

its cash on hand at the time it received the

opinion and since the Committee had to use

available funds to pay those debts, in this second

opinion, the Commission determined that the refunds would be timely if made within a reasonable

time after the Committee's April 1985 fundraiser.

If, however, before the April fundraiser, the committee received sufficient funds to retire its

debts, it had to begin refunding the illegal contributions at that time.

Undesignated contributions which the Com-

•

mittee used to refund the illegal contributions

would count against each donor's limits for Representative Russo's 1986 reelection campaign. Contributions designated in writing for the refunds

would count against the donor's limit for Repre5

Volume 11 ,Numm 

sentative Russo's 1982 general election campai

11 CPR 110.1(a)(2) and 110.Hg)(2).

Reporting Requirements

The Committee should itemize the refunds 

the first report filed with the FEC after 

refunds have been made. 11 CFR 104.3(b)(4)

Moreover, since the unpaid refunds constituted 

outstanding Committee obligation at the time 

Commission issued its first opinion (Le., in D

cember 1984), the Committee should amend 

1984 year-end report to disclose the obligati

11 CPR 104.3(d) and 104.11. (Date issued: Ma

7, 1985; Length: 3 pages)

AD 1985-9: Excess Campaign PWlds Used to

Establish Dniversity Scholarship Pund or Professional Chair

Representative John H. Quillen's principal ca

paign committee (the Committee) may donate 

excess campaign funds to East Tennessee St

University for the establishment of either a. p

fessorial chair or an endowed scholarship. T

election law expressly sanctions the contribut

of excess campaign funds to qualified charita

and educational organizations. See 2 U.S

§439a. 26 U.S.C. SI70(c) and 11 CFR 113.2.

Reporting Requirements

Although the donation is not intended 

influence elections, the com mittee must repor

as a disbursement. See 2 U.S.C. §434(b)(6)(A) a

11 CPR l04.3(b). Moreover, the Committee m

itemize the funds if one or several donations 

the University exceed $200 for the year. See 

CPR 104.3(b)(4)(vi). (Date made public: March 

1985; Length: 2 pages)

AD 1985-10: Deceased Candidate's Loan to

Campaign Liquidated by Estate

Mr. Paul Cantrell, a 1982 Congressional can

date, died in December 1984. His estate m

forgive personal loans which Mr. Cantrell made 

his 1982 Congressional campaign, Citizens 

Cantrell Committee (the Committee), there

permitting the Committee to terminate, provid

o The Committee meets all other requireme

for termination spelled out in FEC Regulati

(II CPR 102.3); and

o The Committee files an amended Terminat

Report disclosing the esta te's forgiveness of 

debt. (The Committee initially filed a termi

tion report in February 1985.) (Date made p

lic: March 29, 1985; Length: 2 pages)
May 1985 FEDERAL ELECTION COMtVlISSION

FEC v; NCPAC

On March 18, 1985, the Supreme Court

handed down a ruling in FEe v. National Conservative Political Action Committee (NCPAC) (CA

No. 83-1032), which affirmed a Pennsylvania district court's decision that 26 U.S.C. 59012(f) was

unconstitutional on its face because the provision

violated First Amendment rights of free speech

and association. '" However, the Court reversed

the district court's holding that the Democratic

Party and the Democratic National Committee

(the Democrats) had standing to file a suit

regarding Section 90l2(O's constitu tionality and

instructed the lower court to dismiss the Democrats' suit.

Background

Section 9012(0 of the Presidential Election

Campaign Fund Act (the Fund Act) prohibits unauthorized committees (i.e., those not authorized

by a candidate) from making expenditures exceeding $1,000 to further the election of a publicly

funded Presidential nominee in the general election. In an effort to obtain a final ruling by the

Supreme Court on the constitutionality of Section

9012(f) >I< >I< the FEC filed suit on June 14, 1983, , . against NCPAC and Fund for a Conservative

Majority (FCM), two unauthorized multicandidate

committees that had planned to spend large sums

during 1984 on behalf of President Reagan's publicly funded general election campaign. (FEC v.

NCPAC and FCM, U.S. District Court for the

Eastern District of Pennsylvania, CA 83-2823)

The FEC's suit was consolidated with another

suit Democratic National Committee (DNC) v.

NCPAC which had been filed on May I, 1983.

(CA 83-'2329) The FEC had intervened in that suit

as a defendant and had argued that the Democrats

lacked statutory and constitu tiona1 standing to

bring the action. In the consolidated suits, plaintiffs had asked that a three-judge panel of the

court be convened to declare that:

o Expenditures (in excess of $1,000) that NCPA C

and FCM each intended to make on behalf of

the publicly funded Republican Presidential

*In January 1982, an equally divided Supreme

Court had affirmed a September 1980 ruling by

the U.S. DistrCct Court for the District of Columbia that Section 9012(f) was unconstitutional.

However, since the Court's vote on the suit had

been equany divided, the affirmance had no precedential value. For a summary of this decision,

see page 1 of the March 1982 Record.

*"See also the April 1985 Record, page 1.

\blume 11, Numl:::e

nominee in 1984 were prohibited by, and 

o Section

violation

9012(0,

of, 26 U.S.C.

as applied

§9012 (OJ

to

and

the defend

committees, was constitutional, .

On December 12, 1983, the Pennsylvania 

trict court initially ruled that the Democrats 

standing to bring suit. The court then held t

Section 9012{0 was unconstitutional on its f

because it violated First Amendment rights 

free speech and association.

On December 16, 1983, the FEC filed 

appeal of this decision with the Supreme Court

The Supreme Cour-t's Ruling

The Democrats Lack Standing to Bring S

In reversing the lower cour-t's ruling that 

Democrats had standing to bring suit, the 

preme Court noted that, while the Fund 

authorized the Democratic National Commit

to bring suit,* such private suits lito construe 

enforce the Act are inappropriate interferen

with the FEC's "responsibilities for administer

and enforcing the Fund Act."

Section 90I2(f) Violates the First Ame

ment. The Court noted initially that "the expen

tures at issue are squarely prohibited by §90 12

Nevertheless since the committees' allegedly 

dependent e~penditures on behalf of Presid

Reagan's campaign "produeledl speech at the c

of the First Amendment and irnplicatledl 

freedom of association, they [were] entitled 

full protection under that Amendment." 

Court stated that in a Presidential election, 

lowing the presentation of lpolrticall views w

forbidding the expenditure of more than $1,00

present them is much like allowing a speaker 

puhlic hall to express his views while denying 

the use of an amplifying system."

The Court therefore concluded that "Sect

9012(f)'s limitation on independent expenditu

by political committees is constitution~lly infi

absent any indication that such expenditures h

a tendency to corrupt or to give the appeara

of corruption. But even assuming that Con~~

could fairly conclude that large-scale pollt

action committees have a sufficient tendency 

corrupt, §9012(0 is a f~tany overb~o~d. respo

to that evil. It is not limited to multimillion do

war chests but applies equally to informal disc

sion group~ that solicit neighbor~ood contri.buti

to pub liciz e views about a particular Presiden

candidate."

"Under Section 901l(b){1) of the Fund A

the national committee of a political party, 

FEC and individuals eligible to vote for Presid

may file appropriate actions which seek to imp

ment or construe provisions of the Fund Act.
FEDERAL ELECTION COMMISSION

•

•

May 1985

Finally, the Court held that "section 9012(f)

cannot be upheld as a prophylactic measure

deemed necessary by Congress. The groups and

associations in question here, designed expressly

to participate in political debate, are quite different from the traditional organizations organized for economic gain le.g., corporations and

labor organizations] that may properly be prohibited from making contributions to political candidates."

NEW LITIGATION

FEe v. Californians for

Democratic Representation

The Com mission filed action against Californians for Democratic Representation (CDR), a

nonprofit organization, for violations of the election law incurred in distributing slate mailings

that endorsed federal candidates, in addition to

nonfederal candidates and ballot measures. Specifically, the FEC petitioned the court to declare

that CDR violated the law by:

o Financing political activity in connection with

federal and nonfederal elections, but failing

either to establish a separate federal account

or to accept only those contributions which are

lawful under the Act. (11 CFR 102.5(a)(I) and

(2»;

o Failing to file a State ment of Organization with

the Commission within 10 days of becoming a

political committee or otherwise complying

with the law's reporting requirements (2 U.S.C.

55433 and 434);

o Failing to specify whether its mailings were

authorized and paid for by federal candidates

(§441d);

o Making excessive contributions to federal candidates and their authorized com mittees

(S441a(a)( I)(A»; and

o Accepting excessive and corporate contributions (SS441a{f) and 441b).

The FEC further asked the court to:

o Order CDR to file a Statement of Organization

and required reports; and

o Assess a civil penalty against CDR equal to the

greater of $5,000 or 100 percent of the amounts

involved in the violations.

U.S. District Court for the Central Distfict

of California, Civil Action No. 85-2086, March

27, 1985.

FEe v, Mortgage Attorneys PAC

Pursuant to 2 U.S.C. 5437g(aX4)(A)(i), the

Commission filed an action against Mortgage

Attorneys Political Action Committee, Inc.

(MAPAC), a multicandidate committee, and

MAPACts assistant treasurer, Anna Atchley, for

violations of the law's reporting requirements.

Specifically, the FEC petitions the court to

declare that defendants violated section

7

Volume 11 ,Num

434(a)(4)(B) of the law by failing to meet 

statutory deadlines for fill ng the follo

reports: a 1981 mid-year report, six 1982 m

ly reports and a 1982 pre-election report.

The FEC asks the court to:

o Assess a civil penalty against the respon

equal to the greater of $5,000 or 100 perce

the amounts involved in the violations; and

o Permanently enjoin the respondents from 

ther violations of the law.

U.S. District Court for the Eastern Di

of Louisiana, Civil Action No. 85-0943, Mar

1985.

FEDERAL REGISTER NOTICES

Copies of notices are available in the P

Records Office.

Notice Title

1984-20 11 CFR Parts 2 and 3: Sunshine 

Regulations; Scope and Defini

Meetings; Notice of Proposed R

making (49 Fed. Reg. 49306, Dece

19, 1984)

1984-21 Rulemaking Petition: Notice of Av

bility; Re: Issues Raised by the U

"Soft Money" in Elections (50 Fed. 

477, January 4, 1985)

1984-22 Filing Dates for Louisiana Special 

tion (50 Fed. Reg. 5132, Februar

1985)

1985-1 Repayments by Publicly Financed P

dential Candidates; Second Transm

of Proposed Rules (50 Fed. Reg. 

March 8, 1985)

1985-2 11 CFR Parts 100 and 101: Paym

Received for Testing-the-Waters A

ties; Transmittal of Proposed Rul

Congress (50 Fed. Reg. 9992, Marc

1985)

1985-3 II CFR Parts 2 and 3: Sunshine 

RegUlations: Scope and Defini

Meeting; Second Notice of Prop

Rulemaking and Announcement of H

ing Date (50 Fed. Reg. 10066, Marc

1985)
FEDERAL ELECTION COMMISSION

Volume 11, Numoor 5

PAC Activity Involving

Foreign Nationals

If a U.S. corporation has an offiee in a

foreign eountry, may the corporation establish a

PAC and solicit corporate executives who are

stationed abroad! As long as the corporat

executives are U.S. citizens, a PAC may solici

contributions from its executives who are sta

tioned abroad. AO 1979-59.

May an American subsidiary of a foreign cor

poration pay for the administrative expenses o

its own PAC and solicit contributions to it? Th

FEC has permitted American.subsidiaries ~f .for

eign corporations to establish and administe

PACs as long as the following conditions are met:

o The principal place of business of the subsidiar

is within the United States;

o The PAC is administered only by U.S. citizens

and foreign nationals do not playa decision

making role in the PAC or exercise control ove

the PAC; and

o U.S. citizens and green card holders are th

only employees allowed to contribute to th

PAC. AOs 1980-100 and 1983-19.

Maya PAC estab1ished.by an American~­

diary of a foreign corporation make contribution

on behalf of state and local candidates? Yes, a

long as the conditions listed above are met. AO

1982-10 and 1983-31.

Mayan incorporated trade association whos

membership ineludes foreign corporations estab

lish a PAC! Yes. As long as the association'

principal place of business is in the U.S. and th

PAC is not administered by foreign nationals, th

trade association may establish a PAC. It may

neither solicit nor accept contributions from for

eign nationals. Moreover, solicitations must com

ply with all other provisions of the Act and

Commission Regulations. AOs 1980-111 and 1981

36.

Corporate Activity Involving

Foreign Nationals

May an American subsidiary of a foreign cor

poration make contributions to state and loca

candidates in the United States? The America

subsidiary (rather than the PAC) may mak~ cor

porate contributions to state and local candidate

as long as the SUbsidiary's principal place o

business is within the U.S., none of the funds ar

provided by the parent foreign corporation an

the parent corporation exercises no control ove

the contributions. Of course, relevant state law

governs the acceptability of corporate contribu

tions in any given state. See AOs 1982-10 an

1985-3.

8

May 1985

*At its March 14, 1985, meeting, the Commission approved a recommendation that Congress reexamine legislation concerning political

activity by foreign nationals. In previous years,

the Commission has submitted a similar recommendation to the President and Congress.

FOREIGN NATIONALS·

section 441e of the Act prohibits foreign

nationals from making contributions in connection

with any United States elections, including federal, state and local elections. The Office of . Public Communications has received numerous

questions on how this prohibition applies in specific cases. The following questions are typical of

those received.

Political Activity by Individuals

Who are Foreign Nationals

Who is a foreign national? The Federal

Election Campaign Act (the Act) defines a foreign

national as an individual who is not a citizen of

the United States and who is not lawfully admitted for permanent residence. A foreign natio?al

also includes a foreign principal (e.g. a forelgn

corporation, government or political party). See 2

U.S.C. S441e.

May a foreign national make contributions to

federal candidates? No, the Act prohibits direct

or indirect contributions from foreign nationals in

any election.

May foreign nationals support candidates In

state and loeal elections? No. The Act prohibits

contributions by foreign nationals in connection

with any American election, inclUding a federal,

state or local election. see 2 U.S.C. §441e; 11

CFR 110.4(a).

May foreign nationals who are green card

holders support candidates in U.s. elections! Yes.

Green card holders (i.e., those individuals who are

lawfully admitted for permanent residence in the

United States) may make contributions to federal,

state and local candidates.

May foreign nationals vohmteer their time to

assist candidates with fundraising activities!

The FEC stated in an advisory opinion that a

foreign artist could not volunteer his services free

of charge to create an original work of art which

would be used by a Senate candidate for fundraising. AO 1981-51. Other kinds of volunteer

services performed by foreign nationals have not

been addressed in advisory opinions.
'vblume 11, Numo

contin

FEe MUR INDEX UPDATED

During April, the Commission announced 

availability of an updated edition of the F

MUR Index, a computerized document sum 

rizing information on compliance cases (i.e., m

ters under review or MURs). The Com mis

updates the MUR Index semiannually in bo

form and daily through its computer ac

system.

The MUR Index includes closed MURs f

1975 to the present. (Under the election law 

compliance case must be kept confidential u

the Commission reaches a final determination 

closes the file. Subsequently, the MUR is pla

on the public record. See 11 CFR 4.4(a)(3).)

Based on a computerized information sys

developed by the FEC, the MUR Index enables 

user to identify closed compliance cases rel

to a particular SUbject, to a provision of 

election law or to a complainant or respon

involved in a compliance action. The MUR In

includes four volumes. Volumes I, II and III, M

Summary Reports, contain a brief report on e

MUR. Volume IV contains three indexes:

o The Complainant/Respondent Index lists e

MUR by its number and alphabetically by 

person who either filed the complaint or 

named as a respondent in the compliance 

tion.

a The Citation Index cites all compliance c

pertaining to a particular section of the e

tion law and FEC Regulatlons.

o The Subject Index identifies MURs by key w

and phrases.

The FEC MUR Index may be reviewed in 

FEC's Public Records Office, located at 132

Street, N.W., Washington, D.C. 20463. Rea

may order the entire MUR Index for $120 or e

volume separately as follows:

o Volumes I, II and III--$33 each.

o Volume IV--$21.

Checks, made payable in advance to the F

should be sent care of the Public Records Off

For. more information, contact the Public Rec

Offlce at 523-4181 or toll free 800/428-9530.

o Eliminate state-by-state limits for publ

funded Presidential primary candidates.

o Define the extent to which foreign natio

may participate, if at all in any Ameri

election. '

The full text of the recom mendations wil

published this summer in the Commission's 1

Annual Report.

9

May 19S5 FEDERAL ELECTION COMMISSION

"'One member of the Commission dissented

from this recommendation.

FEe'S 1985 LEGISLATIVE

RECOMMENDATIONS

On April 16, 1985, the Commission transmitted to Congress and the President 24 legislative

reeom mendations concerning the FEC's ad ministration of the Federal Election Campaign Act (the

Act). The Commission is statutorily mandated to

submit recommendations each year "for any legislative or other action the Commission considers

appropriate•.••tt 2 U.S.C. §438(a)(9).

Among ~he 24 proposals SUbmitted this year,

four were aimed at enhancing public disclosure

and reducing some of the bookkeeping requirements for campaigns and political committees

They included suggestions that Congress: .

o Require House and Senate campaigns to report

their financial activity for an entire campaign

cycle. (The current practice of reporting activity on a calendar-year basis makes it difficult to

determine total amounts raised and spent on

campaigns spanning more than one year.)

o Require monthly filers to file their reports

?loser to the closing date of a reporting period

10 or~er to make information more timely.

o Clarify the statutory provision requiring political com mittees to report their operating expenses. (Under the current law, it is unclear

whether a committee must report only initial

payments to contractors, vendors and other

payees or whether the committee must also

report payments that the initial payees, in turn,

make to subcontractors, agents and others.)

o Apply the contribution limits to a campaign

cycie, rather than to individual elections (e.g.,

primary, general, special or runoff). (This

amendment would reduce burdensome recordkeeping requirements for committees while . ... ' rnaintalnlng current contributions limits.)

Included among the Commission's remaining

20 recorn mendations were suggestions that Congress:

o Give the FEC the express power to initiate

immediate civil suit for injunctive relief in

mat ters involving substantial violations of the

law.*

o Reaffirm its intent that draft committees are

"poli~ical committees" subject to the reporting

requir-ements, prohibitions and limits of the

Act.

o Make the FEC the sole point of entry for all

documents filed by federal candidates and political committees.

•

•

•
May 1985 FEDERAL ELECTION COMMISSION

SUMMARY OF MURs

The Act gives the FEC exclusive jurisdiction

for its civil enforcement. Potential violations are

assigned case numbers by the Office of General

Counsel and become "Matters Under Review"

(MURs). All MUR investigations are kept confidential by the Commission, as required by the

Act. (For a summary of compliance procedures,

see 2 U.S.C. §§437g and 437(d)(a) and 11 CFR

Part 111.)

This article does not summarize every stage in

the compliance process. Rather, the summaries

provide only enough background to make clear the

Commission's final determination. Note that the

Commission's actions are not necessarily based

on, or in agreement with, the General Counsel's

analysis. The full text of these MURs is available

for review and purchase in the Commission's

Public Records Office.

MUR 1530: Union's In-Kind Contributions

Reimbursed by PAC

On May 21, 1984, the Commission entered into a

conciliation agreement with a labor organization

that had made prohibited in-kind contributions,

later reimbursed by the union's PAC.

Complaint

The Com mission's Reports Analysis Division,

in the course of reviewing the union PAC's reports, had questioned payments to the PAC's

connected organization, which had been disclosed

as reimbursements for in-kind contributions made

on behalf of federal candidates. The union's counsel, who met with Division personnel on September 8, 1982, stated that the reimbursements were

for phone bank campaigns operated to support

federal candidates. Phone calls had been made not

only to the union's membership but also to the

general public. (Under 11 CPR 114.3(c)(3), a labor

organization may use its treasury funds to pay for

phone banks operated to urge support of specific

candidates, but the phone calls may be made only

to the union's restricted class -- i.e., its members, its executive/administrative personnel and

the families of both groups.) The reimbursements

represented payments for calls made to those

outside the union's restricted class.

When questioned by Division staff about the

time gap between the use of phone banks and the

PAC's reimbursements, the union said the delay

was caused by billing cycles and the time necessary to allocate contributions among the candidates benefiting from the phone banks.

General Counsel's Report

The General Counsel recommended that the

Commission find reason to believe that the union

had violated 2 U.S.C. §441b by making prohibited

contributions to candidates. In his report to the

10

\blume11, Numba

Commission, the General Counsel noted [h

these in-kind contributions did not even appear 

the public record as reimbursements from t

PAC until months after the elections were over.

Although Commission Regulations provi

that persons may use labor union facilities 

connection with federal elections if the union 

reimbursed the usual charge within a comme

cially reasonable time (II CFR 114.9(d», t

report stated that this provision does not nulli

the prohibition on direct or indirect contributio

from a union's treasury funds. The report went 

to say that when reimbursement is made to 

union for a contribution, "the Commission m

consider•••its timeliness as a mitigating factor." 

this case, the PAC's reimbursements to the uni

did not begin until two months after the pho

banks were used, and the PAC's debts to the uni

for phone bank expenses were reported as ou

standing for nearly nine months. Because of t

delayed reimbursements, the activity clear

represented a §441b violation.

Commission Determination

The Com mission found reason to believe t

union had violated the Act and, on May 21, 198

entered into a conciliation agreement with t

union. The agreement stated that the union h

violated §441b by:

o Making prohibited in-kind contributions for t

1980 election totaling $20,541.23, which we

later reimbursed by the PAC; and

o Making in-kind contributions for the 1982 ele

tion totaling $58,020.04, later reimbursed 

the PAC.

The Union also agreed to pay a civil pena

of $3,500 and to implement a system in whi

bills for expenditures by the PAC would be se

directly to the PAC. In situations where it wou

not be possible to arrange separate billings to t

union and the PAC, the PAC would no long

reimburse the union for its portion of the bi

Instead, the union and the PAC would each ma

separate, timely payments to the vendor for th

portions of a bill.

FRC PUBLISHES PRESIDENTIAL NONFILERS

On February IS, 1985, as required by t

election law, the Commission published the nam

of two Presidential campaigns (one authorized 

a Presidential candidate, the other by a Vic

Presidential candidate) that had failed to f

their 1984 year-end report, due by January 3

1985. Neither campaign supported a major par

candidate. The year-end report should have d

closed each committee's financial activity f

December 1984, as well as summary figures f

the campaign to date.

Commission compliance actions against no

filers are decided on a case-by-case basis. T
May 1985 FEDERAL ELECTION COMMISSION

election law gives the Commission broad authority to initiate enforcement actions resulting from

infractions of the law, including civil court enforcement and imposition of civil penalties.

This cumulative index lists advisory opinions,

court cases and 800 Line articles published in the

Record during 1985. 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

1984-16: One Limit for Convention &: Primary, 1:3

1984-33: Fundraiser by Trade Association's Allied

Members, 1:3

1984-41: Corporate Payments for Media Ads, 2:1

1984-48: Travel Reimbursements to State by Senate Campaign, 2:1

1984-53: Real Estate Lessors as Federal Contractors, 1:4

1984-54: Reporting/Limits for Candidate Elected

in Primary, 1:5

1984-55: Solicitation of Law Firm's Partners by

Bank PAC, 1:5

1984-56: Book Pay ments &: Honorarium, 1:5

1984-57: Corporate Communications on Legislation, 2:2

1984-58: City's Claim for Reimbursement by Presidential Campaign, 2:3

1984-59: Noncampaign Uses of Campaign Assets,

2:3

1984-60: Campaign Debts Liquidated through Sale

of Real Estate Assets, 3:1

1984-61: Trade Association Solicitation Approvals, 3:2

1984-63: Savings and Loan Association's Solicitations, 3:2

1985-1: Liquidation of Campaign Assets, 4:4

1985-2: State Funds Transferred to Congressional Campaign, 4:5

1985-3: Contributions to State Campaign by Subsidiary of Foreign Corporation, 4:5

1985-4: Payments not Honorarium, 4:5

1985-5: Contributions Made Before but Received

After Election, 4:6

1985-6: Affiliated PACs of Local/International

Unions, 4:6

800 LDIE

Supreme Court Rules on 26 U.S.C. §9012(f), 4:1

Using Excess Campaign Funds, 2:4

11

\.blume 11, Numo

COURTCASHS

Antosh v, FEC, 2:4

Citizens for Percy '84 v, FEC, 1:6

DCCC v, FEC, 2:6

FEC v, Anderson, 2:6

FEC v, Purgatchj FEC v, Dominelli, 1:6

FEC v, Hemenway for Congress Committee, 2

FEC v, Liberal Party Federal Campaign Comm

tee, 3:3

FEC v, NRWC; NRWC v. FEC, 1:7

National Congressional Club and Jefferson M

keting, Inc. v, FEC, 3:3

Orloski v, FEC, 2:5

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 amend

ment to FEC Form 1 (Statement of Organi

zation) and filed with the Clerk of the

House, the Secretary of the Senate, or the

FEC, as appropriate.

Record subscribers (who are not politi

cal com mittees), when calling or mailing in

a change of address, are asked to provide

the following information:

1. Name of person to whom the Record i

sent.

Z. Old address.

3. New address.

4. Subscription number. The SUbscription

number is located in the upper lef

hand corner of the mailing label. I

consists of three letters and five num

bers. Without this number, there is no

guarantee that your subscription can

be located on the computer.
May 1985 FEDERAL ELECTION COMMISSION \bIume 11, Numoo

FEDERAL ELECTION COMMISSION

1325 K Street, N.W.

Washington, D.C. 20463

Official Business

Bulk Rate Mail

Postage and Fees Paid

Federal Election Commission

Permit Number G-31