October 1994

Table of Content

Reports

Reports Due in October

Compliance

2 MUR 3678: Failure to Report

Independent Expenditures

2 MUR 3781: $35,000 in Penalties

for Corporate Contributions in

Name of Another

3 MUR 3803: Late Receipt of

Reattributions and Redesignations

3 MURs Released to the Public

10 Nonfilers Published

Regulations

4 New Convention Rules Effective

Publications

4 Index to PAC Abbreviations

Statistics

5 Congressional Fundraising Climbs

6 Republicans Outraise Democrats

7 Advisory Opinions

Audits

8 1992 Republican Convention

Court Cases

9 New Litigation

9 Federal Register

II Index

Correction to

Flashfax Number

The September issue published

an incorrect F1ashfax number in

the article on the foreign national

brochure (page 3 box). The

correct number for the Flashfax

service is 202/501-3413.

Federal Election Commission

Reports

Reports Due in October

With one exception,' all types of

po litic al committee s must file one or

more reports in October, as expla ined below. Reports must be filed

with the appropriate federal and

state fili ng offices.

For more inform ation on October

reporting, see the Sep tember Record

(pages 6-7 ) or the 1994 reporting

handout. To ord er the September

Record or hando ut, ca ll 800/424 -

9530 (press I if usin g a touch ton e

phone) or 202/2 19-3420. The

handout is also avai lable throu gh

Fla shfax; ca ll 202/50 1-34 13 and

enter document number 344.

Third Quarter Report

Committees filing on a qu arterly

basis must file an October quarterly

report due October 15.

October Monthly Report

Mon thly filers must file a report

due October 20 and covering

Septem ber activity.

1 The exception is for committees of

candidates who did not seek election in

1994. Their next report is the 1994

year-end report covering July through

December, which is due January 31,

1995.

Volume 20, Number 10

12-Day Pre-Election Report

Th e pre-election report for the

Nov ember 8 general election must

be filed by:

• Committees of candidates running

in the November 8 elec tion;

• PACs and party committees filing

on a monthly schedule (the preelection report is filed in lieu of the

November monthl y report); and

• PAC s and party commi ttees filin g

on a qu arterl y basis if the committee ma kes co ntributio ns or ex penditures in co nnection with the

general election during the coverage dates for the report (below).

Th e pre-election report , which

covers activity from October 1

through October 19, is due October

27. If sent by registered or certified

mail, it must be postmarked by

October 24.

48-Hour Notices on Contributions

Committees of ca ndida tes running in the November general election must file a 48-hour notice if

they receive a contribu tion of

I $1,000 or more (including co ntri butions and loan s from the ca ndida te)

between October 20 and November

5. The committee must disclose the

co ntribution on FEC Fo rm 6 or in a

state me nt co ntaining the same information . The notice must be receiv ed

by the federal and state filing offices

within 48 hours of the committee' s

rece ipt of the contribution.

(continued on page 2)
Federal Election Commission RECORD

Reports

(continued from page 1)

24-Hour Reports

on Independent Expenditures

Political committees and other

persons 2 planning to make independent expenditures to support or

oppose candidates in the November

8 general election are reminded of

the 24-hour reporting requirement.

Under that requirement, ge neralelection independent expenditures

aggregating $1,000 or more and

made between October 20 and

November 6 must be reported with

the appropriate federal and state

filing offices within 24-hours after

the expenditure is made. •

2 Individuals and other persons who are

not political committees are reminded

that when their independent expenditures exceed $250 in a calendar year,

they must fil e a report at the end ofthat

reporting period. 11 CFR 109.2. See

next article.

Federal Election Commission

999 E Street, NW

Washington, DC 20463

800/424-9530

202/219-3420

202/501-3413 (F1ashfax Service)

2021219-3336 (TDD)

Trevor Potter, Chairman

Danny L. McDonald,

Vice Chairman

Joan D. Aikens, Commissioner

Lee Ann Elliott, Commissioner

John Warren McGarry,

Commissioner

Scott E. Thomas, Commissioner

John C. Surina, Staff Director

Lawrence M. Noble, General

Counsel

Published by the Information

Division

Louise D. Wides, Director

Stephanie Fitzgerald, Editor

2

Compliance

MUR3678

Individual's Failure

to Report Independent

Expenditures

Evans Cabinet Corporation and

its CEO, Clyde Evans, agreed to pay

a $2,500 civil penalty for failing to

disclose $4,325 in independent

expenditures I made in the form of

newspaper ads. The civil penalty

also covered other violations: failure

to display the required disclaimer in

the ads and the use of corporate

funds to pay for the independent

expenditures and $1,700 in contributions to federal candidates.

Failure to Report Independent

Expenditures

Mr. Evans failed to file the

requisite disclosure statements on

the independent expenditures, which

advocated the defeat of Congressman J. Roy Rowland and which

appeared in Georgia newspapers

during October and November of

1990 and 1992. The 1990 ads cost

$1,383 and the 1992 ads, $2,942.

Once his independent expenditures

exceeded $250 in a calendar year,

Mr. Evans was required to file

signed statements disclosing information on the independent expenditures and certifying, under penalty

of perjury, that the expenditures

were made without the consultation

or cooperation of any authorized

committee. 2 U.S.c. §434(c).

(Individuals- and other entities

that are not political committeesI An independent expenditure is an

expenditure f or a communication that

expressly advocates the election or

def eat ofa clearly identified f ederal

candidate but that is not made with the

cooperation or consent of, or in

consultation with, or at the request or

suggestion of, any candidate or any of

his or her agents or authorized committees. 2 u.s. c. §43 1{17).

October 1994

may file independent expenditure

statements on FEC Form 5.)

Failure to Display Correct Disclaimer

Mr. Evans failed to display the

required disclaimer statement in the

ads. Although he did include a

statement that identified him as the

sponsor, it did not clarify that the

ads were "not authorized by any

candidate or candidate's committee," in violation of 2 U.S.c.

§44ld(a).

I Use of Corporate Funds

Mr. Evans paid for the ads with

monies drawn from a special

account containing loans from the

corporation-$29,000 loaned during

the fall of 1990 and $110,000

loaned during October 1992. The

special account, over which Mr.

Evans had sole signature authority,

also contained funds from other

sources and, in effect, intermingled

Mr. Evans's personal funds with

corporate funds. Mr. Evans drew

from this account to cover a variety

of expenses, including the independent expenditures and the contributions to federal candidates.

These circumstances placed the

corporation and Mr. Evans in

violation of 2 U.S.c. §44l b, the

corporation for having made loans

which were used to influence

federal elections, and Mr. Evans for

having consented to the loans. •

MUR 3781

$35,000 in Civil Penalties for

Corporate Contributions

Made in Name of Another

During a period of almost 10

years, from 1983 through 1992, the

University of Osteopathic Medicine

and Health Sciences of Des Moines

Iowa, a nonprofit corporation, ,

reimbursed University President Dr.

J. Leonard Azneer for his contributions to federal and state candidates.

The contributions to federal candidates, which totaled $19,000,
October 1994

violated the prohibition on corporate

contributions (2 U.S .c. §441 b) and

the ban on contributions made in the

name of another (2 U.S.c. §441f).

The University and Dr. Azneer paid

civil penalties of $19,000 and

$16,000, respectively, for violating

these provisions.

The violations came to light after

an independent counsel, retained by

the University in October 1992,

investigated Dr. Azneer's administration. Filing sua sponte submissions, the University voluntarily

informed the FEC and the U.S.

Internal Revenue Service about the

contribution reimbursements.

In determining the civil penalty

for the University, the Commission

took into account that the school had

resolved the matter with the IRS by

paying $250,000 to the U.S . Treasury in lieu of losing its tax exempt

status. Additionally, the school had

paid over $23,000 to cover excise

and other taxes.

The University also disclosed the

reimbursement transactions to the

Iowa Campaign Finance Disclosure

Commission.

In February 1989, a former

University vice president had raised

allegations concerning Dr. Azneer's

contribution reimbursement practice

with some members of the school's

board of trustees. The allegations

were brought to the attention of the

University's counsel and accountants, but the practice continued

until September 1992, when Dr.

Azneer was placed on administrative leave. (He has since left the

University.) ..

MUR3803

Late Receipt of

ReattributionslRedesignations

Under the terms of a conciliation

agreement, the Ferraro for U.S.

Senate committee agreed to pay a

$900 civil penalty for accepting

$4,400 in excessive contributions

from II individuals. The committee

was Geraldine Ferraro's principal

campaign committee for her unsuccessful 1992 primary campaign in

New York.

Although the 11 contributors

redesignated or reattributed the

excess portion of their contribuI tions, I the committee failed to obtain

signed redesignations and reattributions within the 60-day time limit

that runs from the date of the

committee's receipt of an excessive

contribution. Failing to receive the

redesignations and reattributionsin

time, the committee should have

refunded the excess amounts within

the 60-day limit, as required under

II CFR 103.3(b)(3). Because it did

not, the committee, in effect,

accepted excessive contributions, a

violation of 2 U.s.c. §441a(f).

Additionally, the committee

failed to disclose the redesignations

and reattributions in the report

covering the period during which

they were received, in violation of

11 CFR 104.8(d)(2)(i). The committee mistakenly reported them earlier,

in the report covering the period

during which they were requested. ..

MURS Released to the Public

Listed below are FEC enforcement cases (Matters Under Review

or MURs) recently released for

public review. They are based on

the FEC press releases of July 29,

August 3, 4, 19 and 26, and September 12. Files on closed MURs

are available for review in the

Public Records Office.

I A candidate committee may ask an

individual to redesignate the excessive

portion of a contribution to a different

election for which the contributor has

I not yet exceeded the limit. A committee

may also ask contributors to reattribute

their joint contribution so that the

excessive amount is attributed to the

donor who has not yet used up his or

her limit. When requesting a redesignation or reauribution, a committee must

offer to refund the excessiv e amount.

See II CFR 1l0.1(b) and (k) and

1l0.2(b).

Pre-MUR 261

Respondents: (a) Robert Martinez

(FL); (b) Republican Party of

Florida, James H. Stelling, treasurer

Complainant: Referral from U.S.

Department of Justice

Subject: Excessive contributions;

contributions exceeding $25,000

limit

Disposition: (a)-(b) Took no action

MUR 2892/2846/3004

Respondents: (a) West Beach

Estates; (b) Haseko (Hawaii), Inc.;

(c) Graham Beach Partners; (d) Haseko Realty, Inc .; (e) Haseko

Engineering, Inc.; (f) Haseko (Ewa),

Inc.; (g) Royal Hawaiian Country

Club; (h) Y.Y. Valley Corporation;

(i) Tetsuo Yasuda; U) Yasuo

Yasuda; (k)-(z) 16 other respondents agreeing to civil penalties; 100

remaining respondents

Complainants (all in HI):Anthony

P. Locricchio; Victoria S. Creed,

President, Maunawili Community

Association; Karin L. Kosoc; Donna

Wong

Subject: Foreign national contributions

Disposition: I (a) $38,000 civil

penalty; (b)-(f) $30,000 civil penalty; (g)-(h) $23,000 civil penalty;

(i)-U) $23,000 civil penalty; (k)-

(z) between $8 ,000 and $125 in civil

penalties; reason to believe but took

no further action (67 respondents);

no probable cause to believe (12

respondents); no reason to believe

(11 respondents); took no action (10

respondents)

MUR3499

Respondents: Doug Barnard for

Congress, Committee for Druie

(continued on page 10)

/Sixty respondents received letters of

admonishment from the Commission, as

did more than 100 recipients offoreign

national contributions who were not

named as respondents. For more

information on this MUR and the

prohibition on foreign national

contributions, see the August 3 press

release and the September Record.

J
Federal Election Commission RECORD

Regulations

Revised Convention Rules

Now Effective

Revised regulations governing

publicly financed Presidential

nominating conventions became

effective August 25. They will apply

to the 1996 conventions.

The regulations expand disclosure by requiring convention cities

to file a post-convention statement

reporting the amounts spent for

convention facilities and services:

the total defrayed with public

revenues and the total defrayed from

a municipal convention fund.

Municipal convention funds are

addressed in a new regulation that

allows these funds to be used for

publicly funded Presidential conventions as long as the fund was

created to attract other conventions

and events to the city (not just the

nominating convention). The

regulation is based on AOs 1983-29

and 1982-27.

A new provision allows convention committees to raise contributions to pay legal and accounting

compliance costs, but not any other

expenses. Before, the Republican

and Democratic convention committees could not accept any private

contributions; they had to limit

spending to the amount of their

public funding grants. I Donations to

convention compliance funds count

against the donor's limit on contributions to the national comm.ittee

and, in the case of an individual,

against the $25 ,000 annual limit on

all federal contributions.

The regulations simplify terminology by using the term "comrnerI The major party convention committees are entitled to receive a public

funding grant of $4 million as increased by the cost-of-living adjustment

(COLA). In 1992, the COLA raised

each party 's convention committee

entitlement to over $11 million dollars.

4

cial vendor" to replace previous

terms ("local," "retail," "local retail")

used to describe businesses that may

offer reductions, discounts and free

items. Convention committees, host

committees and convention cities

may all accept goods and services

from commercial vendors under the

same terms and conditions as are

provided to nonpolitical clients.

The term "local businesses"

(which excludes banks) has been

retained to describe businesses

I permitted to donate money, goods

and services to host committees and

convention cities for certain

convention-related purposes; these

businesses may also donate to a

municipal convention fund.

Finally, the revised regulations

reorganize the convention funding

rules at II CFR Part 9008 and make

them consistent with the regulations

governing the public funding of

Presidential primary and general

elections, including the rules on

audits and repayments.

By law, the Commission must

audit publicly funded committees,

including convention committees, to

ensure that public funds are properly

spent. (See article on audit of the

1992 Republican convention committee, page 8.)

The revised rules and their explanation and justification were published in the Federal Register on June

29, 1994 (59 FR 33606). To obtain a

copy of the notice, call Public

Records: 800/424-9530 (press 3 if

using a touch tone phone) or 202/

219-4140. The document is also

available through Flashfax, the

FEe's 24-hour faxing service. Call

202/501-3413 and enter document

code 227.•

October1994

Publications

Updated Index to PAC

Abbreviations

The Commission recently published a new edition of Pacronyms,

an alphabetical list of acronyms,

abbreviations and common names of

political action committees (PACs).

For each PAC listed, the index

provides the full name of the PAC,

its city , state, FEC identification

number and, if not identifiable from

the full name, its connected, sponsoring or affiliated organization.

The index is helpful in identifying PACs that are not readily identified in their reports and statements

on file with the FECI

To order a free copy of Paeronyms, call the Public Records Office

at 800/424-9530 (press 3 if using a

touch tone phone) or 202/219-4140.

Other PAC indexes, described

below, may also be ordered from

Public Records. The cost is shown

in parentheses.

• An alphabetical list of all registered PACs shows each PAC's

identification number, address,

treasurer and connected organization ($13.25).

• A list of registered PACs arranged

by state provides the same information as above ($13.25).

• An alphabetical list of organizations sponsoring PACs shows the

PAC's name and identification

number ($7 .50). •

I Under FEC regulations, the name of a

corporate or labor PAC must include

the full, official name ofthe connected

organization. A PAC may use an

abbreviated name on checks and

letterhead if it is a clearly recognized

abbreviation or acronym by which the

connected organization is commonly

known. However, both the full, official

PAC name and the abbreviated name

must be disclosed in all reports,

statements and disclaimers. 11 CFR

102.14(c).
October /994 Fed eral Election Commission RECORD

Statistics

Congressional Fundraising

Continues to Climb

By the end of June 1994-18

months into the 1993-94 election

cycle-campaigns of 1994 House

and Senate candidates had raised

$387.7 million, 5 percent more than

their counterparts in 1992. Spending

dropped 6 percent to $270.9 million,

still far exceeding spending in pre1992 cycles (see graph).

Senate campaigns raised $163.5

million in the first 18 months of the

1994 cycle (nearly unchanged from

1992) and spent $113.5 million

(down 8 percent). House fundraising, at $224.2 million, was up 8

percent, but spending, at $157.4

million, declined 4 percent.

While overall fundraising increased, PAC support of 1994

campaigns declined 1 percent from

1992 to $97.5 million. Contributions

from individuals, however, increased by 9 percent to $224.3

million. Contributions and loans

from candidates to their own

campaigns went up 8 percent to $52

million.

There were fewer candidates

overall at the 18-month point in

1994 than in 1992. However, the

number of nonincumbents who had

raised at least $50,000 by June 30 of

the election year continued to

increase.

Median receipts of House incumbents, challengers and open-seat

candidates increased over 1992

levels except for Republican incumbents, whose median receipts

declined slightly. Democratic

incumbents showed the largest gain.

The graph is based on an August

12 statistical press release on 18-

month House and Senate activity.

Copies are available from the Public

Records Office. Call 800/424-9530

(press 3 if using a touch tone phone)

or 202/219-4140. You can also have

the release faxed to you through the

FEC's Flashfax service. Call 202/

501-3413 and enter document code

627. ..

(Statistics continued on pag e 6)

House and Senate Activity at IS-Month Point 1

Cycle

(No. of Candidates)

o 50 100

Millions of Dollars

150 200 250

,-- Receipts

_ Disbursements

300 350 400

1986 1== = = = ,...._ _ ===== (1,614)

1984 1== = = (1,598)

1992 ==========~====;:;;;;;;===iiiiiiiliiiiiiiiiiiiiiiiiiiiiiiii___r--- -' (2,193)

1994

(1,924)

1988 I::============== == .,....---...,.. ...,-- (1,493)

1990 b = = ======= = = = = = = = = = = .......- - - ---,---'---'

(1,430)

I Covers activity through June 30 ofthe election year.

5
Federal Election Commission RECORD October 1994 - -------------- - - - - --------------

Statistics

(continued from pag e 5)

Federal Activity of Party Committees at I8-Month Point 1

I Covers activity through June 30 ofthe election year. Includes federal acti vity at all

levels ofthe party: national, state and local.

Cash on Hand and Debts

Receipts and Disbursements

Dem Rep

1994

Dem Rep

1994

Dern Rep

1992

Dern Rep

1992

'-'-_-...JI Receipts

_ Disbursements

Dem Rep

1990

I ICash on Hand

_Debts

Dem Rep

1990

Dern Rep

1988

Dem Rep

1988

Dem Rep

1986

Dem Rep

1986

III r- elm '$

.1

:] I'

- - po w

1'& I" ..... Ib

i

- - , I> rA r

,] 1\1 l' i!

&

'- ± -

r-rf---

.....

f---

r-rr- I--

-

i f-- - f-- -rl • • I I I I I

o

o

5

10

25

20

15

50

30

150

100

Millions of Dollars

200

Millions of Dollars

35

Republicans Outraise

Democrats by $80 Million

In raising and spending funds for

election of federal candidates, Republican committees continued to

outpace the Democrats during the

first 18 months of the 1993-94 election cycle (January 1993 through

June 1994). Republicans raised $80

million more and spent $63 million

more than the Democrats.

Although lagging behind in total

dollars, Democratic committees

increased their federal fundraising

and spending by 34 percent and 27

percent, respectively, compared

with the same period in the 1991-92

cycle. Republican federal fundraising, by contrast, increased only 3

percent, while the Party's spending

on federal election activity remained

level with 1992.

Federal activity by both parties at

the state and local levels continued

to grow. The increases reflected in

both the 1992 and 1994 cycles

could, in part, be explained by

changes to FEC rules. In January

1991 (the start of the 1992 cycle),

the FEC implemented stricter rules

on allocating expenses between

federal and nonfederal activities to

prevent the use of nonfederal funds

("soft money ") to influence federal

elections. Nonfederal funds are

raised outside the limits and prohibitions of federal law and are prohibited for use in federal elections.

The new rules required, for the

first time , that national party

committees disclose their nonfederal

activity in FEC reports. Those

reports show that the Democratic

national committees took the lead in

nonfederal fundraising, more than

doubling nonfederal receipts and

disbursements compared with the

previous cycle. Nonfederal fundraising by the Republican national

committees, by contrast, was down

28 percent, and spending increased

only a modest 4 percent.

6
October 1994 Federal Election Commission RECORD

I Specifically, FEE satisfies the criteria

at JJ CFR JOO. 5(g)(4)(ii)(D), (E), (F),

(G) and (I), and JJO.3(a)(3)(ii)(D), (E),

(F), (G) and (1).

FEE's Affiliated Status

FEE is affiliated with the LNC,

based on several factors of affiliation listed under 11 CFR 1OO.5(g)(4)

(ii) and 11O.3(a)(3)(ii).1For example

the four individuals who plan to

establish FEE are members of the

LNC, thus satisfying the criterion at

11 CFR 100.5(g)(4)(ii)(D).

FEE's status as a political

committee affiliated with the LNC

(rather than a corporate vendor

providing services to the LNC)

overrides FEE' s status as a corporation. The financial arrangements

between FEE and the LNC, therefore, do not raise any issues related

to the corporate prohibition under

2 U.S.c. §441b.

The affiliated relationship,

however, also means that FEE

shares a common contribution limit

with the LNC and any other political

committees affiliated with the LNC.

When, therefore, FEE's members

contribute $3,333 each towards the

(continued on page 8)

gating in excess of $1,000 during a

calendar year. Also determinative is

whether the major purpose of the

organization is to make expenditures

or solicit contributions for the

nomination or election of candidates. See Akins v FEe, No. 92-

1864 (D.D.C. March 30, 1994).

Furthermore, a committee or

organization representing a national

party in making arrangements for its

convention to nominate a Presidential ticket is required to register and

report as a political committee.

11 CFR 9008.1(b). See also

2 u.s.c §437(2). Because FEE's

sole purpose is to make the arrangements for the Libertarian Party's

convention to nominate its 1996

Presidential ticket, it qualifies as a

political committee with registration

and reporting obligations.

Advisory

Opinions

AO 1994-25

Corporation Handling

Convention Arrangements as

Political Committee

FEE Enterprises (FEE), a corporation organized to conduct the

Libertarian Party's 1996 Presidential convention, qualifies as a

political committee under the

Federal Election Campaign Act

(Act); as such, it must register and

file periodic reports.

This determination is based on an

arrangement proposed by the

Libertarian National Committee

(LNC) under which: A for-profit

corporation founded by four individuals, each contributing $3,333 in

start-up capital, would organize,

I promote and stage the convention;

the corporation, called FEE, would

rent a convention hall and charge

the LNC for its use; FEE would

I purchase ad space in the LNC's

monthly newspaper and rent its

mailing list in order to promote the

convention to potential attendees;

and attendees would pay fees

directly to FEE. No other funds

would change hands between the

I LNC, FEE and the candidates, and

all charges would be at the fair

market value. FEE would not owe

the LNC anything if FEE turned a

profit; nor would the LNC or the

candidates reimburse FEE if it

suffered a loss.

FEE's Status as Political

Committee

Although the LNC did not

I believe FEE would be required to

register and report as a political

committee, FEE does qualify as a

political committee.

The Act defines a "political

committee" as any committee, club,

association, or other group of

I persons which receives contributions or makes expenditures aggreDem Rep

1994

Dem Rep

1992

"... -

- --

- -- !'lI

-- - - -

- - - - -

o - '- "- -

10

20

30

5

Millions of Dollars

35

_ _ --'JReceipts

_ Disbursements

25

Nonfederal Activity of

National Party Committees

at IS-Month Point 1

15

I Covers activity through June 30 of the

election year. Includes activity of each

party 's three national-level committees

(the national committee and the House

and Senate campaign committees).

More information on Democratic

and Republican party activity is

available in an August 8 press

release, which can be ordered from

Public Records. Call 800/424-9530

(press 3 if using a touch tone phone)

or 2021219-4140. The press release

is also available through the FEC's

24-hour Flashfax service. Call 202/

501-3413 and enter document code

628 at the prompt. ..

7
I The explanation and justification fo r

the newly effective convention fu nding

rules explain that a convention committee accepting full public finan cing may

nevertheless accept contributions in the

for m ofstaff advances as long as they

are later reimbursed in full , which

extinguishes the contributions. Until

repaid. an advance counts against the

individual's $20,000 per year contribution limit f or the affiliated national

party committee. See 59 FR 33608,

June 29, 1994.

Federal Election Commission RECORD

Advisory Opinions

(continued fr om page 7)

corporation' s start-up costs, these

funds count toward each

individual's $20 ,000 contribution

limit for the LNC. Similarly, funds

raised by FEE for the convention

would be considered contributions

to the LNC. In particular, fund s

raised through the sale of ad space

in the LNC newspaper, if purchased

by individuals or corporations

through the auspices of FEE, would

generally be considered contributions and would be subject to the

limitations and prohibitions of the

Act. 11 CFR 102.5(a)(3); AOs

1990-3 and 1978-46. Funds from

corporations could not be used for

feder al purposes but could be placed

in a nonfederal account. See AO

1978-46 .

Allocation of Federal and

Nonfederal Funds

The Commission cautioned the

Libert arian Party regarding its

proposed split of the convention into

federal and nonfeder al components

for purposes of fundin g convention

operations. In its request, the LNC

stated that all activities involving

the selection of its Presidential and

Vice Presidential nominees would

take up only one day of the six-day

convention. The Commission

observed, however, that activities

related to the Presidential nomination were also scheduled to take

place on other days and that the

major purpose of the convention

appeared to be the nomination of the

Presidential ticket.

Date Issued: August 19, 1994;

Length : 6 pages. ..

8

Advisory Opinion Requests

Advisory opin ion requests

(AORs) are available for review and

comment in the Publi c Records

Office.

AOR 1994-29

Application of contribution limits to

candidate running in primaries of

two parties. (Levy for Congress

Committee; August 30, 1994;

2 pages)

AOR 1994-30

T-shirts bearing candidate-support

messages marketed by commercial

vendor through radio ads and at

candidate events. (Cons ervative

Concepts; September 1, 1994;

11 pages)

AOR 1994-31

Use of contributions designated for

general election when candidate!

nominee withdraws. (Congressman

Dean Gallo; September 6, 1994;

3 pages)

AOR 1994-32

Appli cability of FEC confidentiality

rules to complainant's public

disclosure of letter submitted in

enforcement matter. (Kellie Gasink;

September 15, 1994; 2 pages)"

Audits

I FEC Releases Audit on 1992

I Republican Convention

The Committee on Arrangements

for the 1992 Republican National

Convention received $11 .05 million

in federal funds for the Presidential

I nominating convention in Houston.

Based on audit finding s, the ComI mission determined that the committee had to repay $47,411 to the U.S.

Treasury: $46,375 in unspent

I federal funds and $1,036 in commitI tee checks never cashed by the

payees. The committee has repaid

$26,273 to date.

October 1994

The audit report suggested that

$ 10,202 incurred by a staff member

on behalf of the committee should

be considered contributions. About

half of these expenses were for the

individual's own campaign-related

travel and subsistence, but they were

not reimbursed within the time

limits. An advance for an individual's own travel , food and lodgin g

expen ses-unless exempt under

11 CFR 100.7(b)(8)-is considered

a contribution if not reimbursed

within 30 days from the date

incurred or, in the case of credit card

charges, within 60 days after the

closing date of the billing statement

on which the charges first appear.

I

11 CFR 116.5(b). The committee

said that it had been unaware of the

I

time periods for reimbursement.

The staff member also charged

about $5,000 in expenses for meals I provided to campaign volunteers.

Although the committee argued that

I

it had reimbursed the individual

before he paid the bill, this kind of

staff advance (in contrast to the I individual's own travel and subsistence expenses) results in a contriI bution at the time the expen se is

incurred.I

I

The audit also discovered almo st

$400,000 in committee debts that

had not been reported. The commitI tee said that it did not receive the

I

invoices until months after the

reporting deadline. Reporting

estimates of those debts, the comI mittee argued, would have been

I

I

I

I

1

I

I
October 1994

inaccurate and misleading. The

corrunittee did, however, file

amended schedules disclosing the

debts.

Final audit reports are available

from the Public Records Office. ..

Court Cases

New Litigation

Fulani v. FEC (94-1593)

Lenora Fulani and her 1992

Presidential corrunittee, Lenora B.

Fulani for President Committee,

petition the court to review a

Corrunission decision to conduct an

investigation into the committee's

campaign finances pursuant to the

public funding statute. Dr. Fulani

and the committee claim that the

FEC investigation violates their

constitutional rights and exceeds the

FEC's authority.

On July 26, 1994, the FEC voted

to open an investigation into a

possible misuse of federal funds by

the Fulani committee, which had

received about $2 million in primary

matching funds . The investigation

was authorized under 26 U.S .c.

§9039(b). That provision grants the

FEC the specific authority to audit

and investigate committees receiving matching funds

The committee says it believes

that the FEC opened the investigation in response to a July 8 article

published in a weekly Washington,

D.C., newspaper (Washington City

Paper). The article described

alleged public funding abuses by the

Fulani organization. However, the

corrunittee claims that the FEC

already knew about the allegations

because they were based on a

complaint filed with the Corrunission about six months earlier.

The complaint was the subject of

a suit filed by the Fulani committee

in June 1994, which is still pending

in district court in New York. In that

ca se, the committee contended that

the complaint was invalid because

not all of it was sworn to by the

complainant, as required under

2 U.S.c. §437g, and was therefore

invalid. The committee said that the

FEC had exceeded its enforcement

authority by processing an improper

complaint. (See surrunary in the

August Record, page 11.)

In this new action, petitioners

accuse the FEC of "forcing" them to

defend themselves on two fronts and

of "undermining due process

protections."

U.S. Court of Appeals for the

District of Columbia Circuit, I No.

94-1593 , August 25,1994.

Funk v. FEC

Plaintiffs seek a ruling that the

FEe's decision to take no action on

their administrative complaint,

Matter Under Review (MUR) 3625,

was contrary to law. They ask the

court to order the agency to take

remedial action within 30 days or,

alternatively, to transfer the complaint to a federal grand jury in the

Southern District of California for

investigation of the allegations.

Finally, they ask the court to find

unconstitutional a provision of the

Federal Election Campaign Act

establishing the District of Columbia as the sole venue for certain

court cases.

Plaintiffs in the suit are Robert L.

Funk, the manager of James H.

Gilmartin's unsuccessful 1992

House campaign, and Mr. Gilmartin

himself, the 1992 and 1994 Democratic nominee for California's 25th

Congressional District seat. In MUR

3625, plaintiffs alleged that the

Valencia National Bank made a

prohibited in-kind contribution by

distributing a newsletter featuring a

picture of Mr. Gilmartin's opponent,

J Challenges 10 FEC actions made

under the public funding provisions are

filed directly with this court.

Federal Election Commission RECORD

bank chairman Howard McKeon,

along with an article congratulating

him on his 1992 Republican primary

victory. (Mr. McKeon resigned his

chairmanship after winning the 1992

House race.) The newsletter was

circulated to all account holders and

was also made available at the bank.

Plaintiffs raise the additional

issue of possible insider loans made

to members of the bank's board of

directors during Mr. McKeon's

tenure. With respect to this allegation , plaintiffs named the Comptroller of the Currency as a defendant.

Under 2 U.S.c. §437g(a)(8)(a),

all litigation challenging Commission determinations in MURs must

be filed in the U.S. District Court

for the District of Columbia. Plaintiffs claim that the provision deprives them-and other aggrieved

parties-of their constitutional right

of due process by denying them the

use of their local district courts and

forcing them either to pay the extra

costs of litigation in a foreign

jurisdiction or to drop their claims.

U.S. District Court for the

District of Columbia, Civil Action

No. 94-1894, August 30,1994."

Federal Register

Federal Register notices are

available from the FEC's Public

Records Office.

1994-11

II CFR Parts 100 and 113: Expenditures; Personal Use of Campaign Funds; Proposed Rule; Request for Additional Comments

(59 FR 42183, August 17, 1994)

1994·12

II CFR Parts 107, 114 and 9008:

Presidential Election Campaign

Fund and Federal Financing of

Presidential Nominating Conventions; Final Rule; Announcement

of Effective Date (59 FR 43726,

August 25, 1994)

9
Federal Election Commission RECORD October 1994

/ The Florida pre-primary report was due Friday , September 2. (The following

Monday, September 5, was a f ederal holiday .) The Little campaign report was

recei ved on Wednesday, September 7, and the Wiley campaign report was received

on Tuesday, September 6.

Nonfilers Published

The candidate committees listed below failed to file required campaign

finance reports. The list is based on the FEC press releases of September 6, 9

and 16. The Commission is required by law to publicize the names of nonfiling authorized committees. 2 U.s.c. §438(a)(7). The agency pursues enforcement action against nonfilers on a case-by-case basis.•

Office Sought

House, NYIII

House, FLl21

Senate, WA

House, FL/20

Senate, MD

House, FLl03

House, MN07

House, WN02

House, WV04

House, FLl15

Senate, FL

House, NY/26

Complainant: Marta Russell

Subject: Contributions in name of

another;

Disposition: (a)-(b) Reason to

believe but took no further action;

(c)-(g) no reason to believe

MUR 37811Pre·MUR 273

Respondents: (a) University of

Osteopathic Medicine and Health

Sciences of Des Moines, Iowa;

(b) Dr. J. Leonard Azneer (IA)

Complainant: Sua sponte

Subject: Corporate contributions;

contributions in name of another

Disposition: (a) $19,000 civil

penalty; (b) $16,000 civil penalty

MUR 38031Pre-MUR 268

Respondents: Ferraro for U.S.

Senate, Charles N. Atkins, treasurer

(NY)

Complainant: Sua sponte

Subject: Excessive contributions;

failure to obtain and report redesignations and reattributions

Disposition: $900 civil penalty

MUR3809

Respondents: Sellers for U.S.

Senate Committee, Heather E.

Sellers, treasurer (AL)

Complainant: FEC initiated

Subject: Failure to file reports on

time

Disposition: $1,300 civil penalty

MUR3811

Respondents: National Albanian

American PAC, Martin V. Delisi,

treasurer (FL)

Complainant: FEC initiated

Subject: Failure to file reports on

time

Disposition: $1,000 civil penalty

MUR3822

Respondents (all in TN): (a) Zach

Wamp; (b) Committee to Elect Zach

Wamp, L. Dan Johnson, treasurer

Complainant: Meyer for Congress,

F. Scott LeRoy, treasurer (TN)

Subject: Failure to register candidacy

Disposition: (a) Reason to believe

but took no further action; (b) no

reason to believe

Report Not Filed

Pre-Primary

Pre-Primary

Pre-Primary

Pre-Primary

Pre-Primary

Pre-Primary I

Pre-Primary

Pre-Primary

Pre-Primary

Pre-Primary

Pre-Primary I

Pre-Primary

Disposition: $10,000 civil penalty;

$600 payment to U.S. Treasury

MUR3772

Respondents (all in CA): (a) Marta

Russell; (b) Jane Small; (c) Gordon

Anthony; (d) Douglas Martin;

(e) Eric Voltz; (f) Robert Hall;

(g) Barbara Boxer for U.S. Senate,

Harold Silen, treasurer

MUR3622

Respondents: (a) Clinton/Gore '92

Committee, Robert Farmer, treasurer (AR); (b) President Bill

Clinton (DC); (c) Vice President Al

Gore (DC); (d) Time Books and

Peter Osnos, Publisher (NY);

(e) Dove Audio, Inc., and Michael

Viner, President (CA)

Complainant: Bush-Quayle '92 and

Bobby R. Burchfield, General

Counsel (DC)

Subject: Corporate contributions;

disclaimer; contributions in name of

another; failure to report

Disposition: (a)-(e) No reason to

believe

Compliance

(continued from page 3)

Douglas Barnard, Jr., David B. Bell,

treasurer (GA)

Complainant: FEC initiated

Subject: Failure to file 48-hour

notices

Disposition: $7,500 civil penalty

MUR 3510

Respondents: Friends of Siljander,

Dave Yeakel, treasurer (VA)

Complainant: Felix J. Chabot (VA)

Subject: Disclaimer

Disposition: Reason to believe but

took no further action; sent admonishment letter

Candidate

MUR 3608

Respondents: Bush-Quayle '92

General Committee, Inc., J. Stanley

Huckaby, treasurer (DC)

Complainant: Albert McAlister,

South Carolina Democratic Party

Subject: Receipt of impermissible

in-kind contribution; failure to

report in-kind contribution

Adams, Eric

Diaz-Balart, Lincoln

Henry, Blair

Kennedy, Bev

Liston, John

Little, Marc

Long, Patricia

Montgomery, David

Reynolds, Tom

Shukdinas, Michael

Wiley, Mike

Zwibel, David

10
October /9 94

MUR 3922

Respondents: Brooklyn Democrats

Federal Campaign Account, Gerald

P. Garson, treasurer (NY)

Complainant: FEC initiated

Subject: Failure to file reports on

time

Disposition: $5,000 civil penalty

MUR 3949

Respondents: (a) Senator Herb

Kohl (WI); (b) Herb Kohl for

United States Senate, Inc., Linda De

La Mora, treasurer (WI)

Complainant: Robert T. Welch

Subject: Improper reporting of

forgiven loans

Disposition: (a)-(b) No reason to

believe

MUR 3977

Respondents: Friends of Geri

Rothman-Serot, Roy Hendin,

treasurer (MO)

Complainant: FEC initiated

Subject: Failure to file 48-hour

notices

Disposition: $7,000 civil penalty.

, Index

The first number in each citation

refers to the "number" (month) of

the 1994Record issue in which the

article appeared. The second number,

following the colon, indicates the

page number in that issue. For

example, " 1:4" means that the

article is in the January issue on

page 4.

Advisory Opinions

1993-18: Corporate plan to foster

political participation, 2:1

1993-19: Retiring 1984 Presidential

debt, 1:13

1993-20: Purchase and distribution

of candidate biography, 2:3

1993-21: Preemption of Ohio law,

2:4

1993-22: Use of excess funds by

retired House Member, 3:5

1993-23: PAC disaffiliation, 3:6

1993-24: Definition of member, 4:6

1993-25: Preemption of Wisconsin

law restricting contributions from

lobbyists, 3:7

1994-2: Preemption of Minnesota

law restricting contributions from

lobbyists, 5:6

1994-3: Charitable matching plan

for twice-yearly solicitations, 6:4;

correction, 7:6

1994-5: Candidate status, 6:5;

correction, 7:6

1994-6: Charitable matching plan

for twice-yearly solicitations, 7:4

1994-7: Charitable matching plan

for twice-yearly solicitations;

treasurer as custodian, 7:4

1994-8: Campaign's rental of office

space from candidate-owned

corporation, 7:4

1994-9: Transfers from nonfederal

PACs; effect of corporate reorganization on affiliation, 7:5

1994-10: Waiver of bank fees for

political committee borrowers, 8:6

1994-11: SSF activities of federal

contractor partnership, 7:6

1994-12: Definition of member

applied to association's governing

and membership structure, 8:6

1994-13: Video slate card listing

multiple candidates, 7:6

1994-15: Cable series moderated by

House Member seeking reelection,8:7

1994-16: PAC contributions refunded to former employees, 8:7

1994-19: Affiliation between

national membership association

and state societies, 9:10

1994-20: Donation of campaign

asset to local government, 9:11

1994-21 : Solicitation in dues

invoice sent to nonsolicitable

members, 9:11

1994-22: Campaign' s lease of

property owned by candidate,

9:11

1994-23: Payroll deduction authorizations transferred to PAC, 9:11

1994-25: Corporation handling

convention arrangements as

political committee, 10:7

Federal Election Commission RECORD

Court Cases

FEC v.

- America's PAC, 8:8

- GOPAC, 6:5

- LaRouche (94-658-A), 7:3

- Michigan Republican State

Committee, 4:7; 9:8

- National Republican Senatorial

Committee (93-1612), 1:12; 4:7

- Political Contributions Data, Inc.

(PCD), 5:4

- Rodriguez, 6:5

- Survival Education Fund, Inc., 3:1

- Williams, 1:12

v. FEC

- Akins (92-1864), 5:4

- Albanese, 9:9

- Center for Responsive Politics,

1:12;9:8

- Freedom Republicans, Inc., 3:3

- Froelich, 2:2; 8:9

- Fulani (94-1593), 10:9

I - Fulani (94-4461), 8:11

- Funk, 10:9

- Jordan, 8:9

- LaRouche (92-1100), 1:12

- LaRouche (92-1555), 9:7

- National Republican Senatorial

Committee (NRSC), 5:5; 7:2

- Republican National Committee

(RNC) (94-1017), 7:3; 9:8

- Whitmore and Quinlan, 9:9

Reports

Schedule for 1994, 1:4; correction,

2:1

- change in Florida and South

Carolina election dates, 4:6

- reporting reminders, April, 3:1;

July, 6:1; October through

January, 9:6; October, 10:1

Special elections

- Kentucky (2nd District), 5:9

- Oklahoma (6th District), 3:7

- Oklahoma (Senate), 7:2

800 Line Articles

Help - my report is late, 6:1

Registration by candidates and their

committees, 1:14

/I