THE FEDERAL ELECTION 

COMMISSION 

1325 K Street N.W., Washington, D.C. 20463 

September 1979 

LEGISlATION 

FEC TESTIFIES ON 

AMENDMENTS TO ACT 

Testifying before the Senate Rules committee on 

July 13, 1979, FEC Chairman Robert 0 . Tiernan, accompanied by Vice Chairman Max L. Friedersdorf, 

recommended several revisions to the Federal Election 

Campaign Act (the Act). Since 1975, the Commission 

has made annual recommendations for legislative revisions to the Act, which was last amended in 1976. In his 

testimony, Chairman Tiernan reiterated Commission 

support of the previous recommendations and emphasized three areas of particular concern: 

1. Simplification 

The Commission recommended that reporting requirements be simplified to the greatest extent possible. The FEC's recommendations would reduce the 

number of required reports by up to 60 percent per 

election cycle, substantially alleviating the burden on 

candidates and their committees. Chairman Tiernan 

pointed out that fewer reports would promote fuller 

compliance and would probably result in fewer errors. Such simplification, he emphasized, is not only 

consistent with full disclosure, but would actually improve it. 

2. Encourage Party and Grass Roots Activity 

In response to the concern that the Act has had a 

restrictive effect on party and grass roots political activity, the Commission recommended "vitally needed" changes to encourage local volunteer efforts and 

to give State and local party committees greater flexibility in their campaign activity. The Commission 

recommended that State parties be permitted to 

make coordinated expenditures (2 U.S.C. §441a(d)) 

on behalf of Presidential candidates. These expenditures would be in addition to those now made by the 

national party. 

3. Clarification 

The Chairman also recommended several changes 

which would clarify the Act's requirements on conVolume 5, Number 9 

tribution limitations and the public financing of 

Presidential elections. Finally, the Chairman suggested changes to eliminate cumbersome procedures and reduce delays in administration of the 

law. One of the recommended changes, for example, 

would allow any person subject to the provisions of 

the Act to have standing to request an advisory 

opinion. 

The Chairman concluded by stating that the proposed 

revisions are designed to make the Act more effective 

and less burdensome on those required to comply with 

it. (The FEC Annual Report 1978 contains a complete 

discussion of previous legislative recommendations.) 

COMMISSIONERS 

NEW COMMISSIONER 

On July 31, 1979, Frank P. Reiche of Princeton, New 

Jersey, was sworn into office as an FEC Commissioner 

by Supreme Court Justice William R. Rehnquist. The 

ceremony took place at the FEC. Mr. Reiche replaces 

Commissioner Vernon W . Thomson whose term has expired. Mr. Reiche, who will be the tenth Commissioner 

since the FEC's founding in 1975, joins two fellow 

Republicans and three Democrats on the bipartisan 

Commission. 

The new Commissioner was born in Hartford, Connecticut. He received his A.B. from Williams College in 

1951 and an M.A. in Foreign Affairs from George 

Washington University in 1959. An attorney specializing 

in taxation, Mr. Reiche graduated from Columbia Law 

School in 1959, and received a Master of Laws degree in 

Taxation from New York University in 1966. Mr. Reiche 

was with the Princeton firm of Smith, Stratton, Wise 

and Heher from 1962 until his appointment to the Commission. 

Mr. Reiche was a member of New Jersey Governor 

William T. Cahill's Tax Policy Committee from 1970 to 

1972. Governor Cahill appointed Mr. Reiche Chairman 

of the first New Jersey Election Law Enforcement Commission in 1973; he was reappointed as Chairman by 

Governor Brendan Byrne in 1975. The Commission is 

continued 
responsible for the administration and enforcement of 

the New Jersey campaign finance disclosure act. Prior 

to that, Mr. Reiche served in a variety of Republican 

party positions, including eight years as a Republican 

county committeeman. Mr. Reiche's term as an FEC 

Commissioner will expire on April 30, 1985. 

OPINIONS 

ADVISORY OPINION REQUESTS 

The following chart lists recently received Advisory 

Opinion Requests (AOR's), with a brief description of 

the subject matter, the date the requests were made 

public and the number of pages of each request. The 

full text of each AOR is available to the public in the 

Commission's Office of Public Records. 

Date N o. of 

AOR Subject Made Public Pages 

1979-39 Treatment of fundraising com- 7/ 18/79 2 

missions by Presidential candidate committee. 

1979-40 Activities of unauthorized 7/20/79 5 

draft committee for Presidential candidate. 

1979-41 Status and reporting obliga- 8/ 3/79 2 

tions of political committee. 

1979-42 Administrative expenses of 8/ 8/79 2 

national bank's separate 

segregated fund. 

1979-43 Definition of "primary elec- 8/ 8/79 

tion" as applied to Vice 

Presidential candidate. 

ADVISORY OPINIONS: SUMMARIES 

Designated as AO's, Advisory Opinions discuss the 

application of the Act or Commission Regulations to 

specific factual situations. Any qualified person requesting an Advisory Opinion who in good faith acts in 

accordance with the opinion will not be subject to any 

sanctions under the Act. The opinion may also be relied 

upon by any other person involved in a specific transaction which is indistinguishable in all material aspects 

from the activity discussed in the Advisory Opinion. 

Those seeking guidance for their own activity should 

consult the full text of an Advisory Opinion and not rely 

only on the summary given here. 

AO 1979-24: Sale of Campaign 

Materials 

A State political action committee (State PAC

purchase unused campaign materials from R

Hein's Federal campaign committee (the Comm

Although the State PAC is permitted, under Stat

to accept corporate contributions, no prohibited 

tribution to the Committee would result provide

materials are purchased at no more than the usu

normal charge for those materials in the marke

which they would ordinarily be purchased. 

In addition, Mr. Hein's State Senate Committee 

purchase the materials at the usual and normal c

without making a prohibited contribution. The Co

sion offered no guidance as to whether the State 

could purchase the materials from the Committee 

in turn, donate them to Mr. Hein's State Senate 

mittee. That issue is beyond Commission jurisd

(Date Issued: July 13, 1979; Length: 3 pages) 

AO 1979-28: Contribution From 

Unincorporated Association 

The Treasury Employees Political Action Com

(TEPAC), the separate segregated fund of the Na

Treasury Employees Union (NTEU), may acc

political contribution from an unincorporated recr

association of Federal employees (the Associ

represented by NTEU. 

The Association maintains vending machines in F

facilities, and the proposed contribution is compri

profits derived from those machines. The contrib

did not result from a TEPAC or NTEU solicitation. 

the Association is not a corporation, and assumin

not a government contractor, TEPAC may acce

unsolicited contribution subject to the contrib

limits. (Date Issued: July 19, 1979; Length: 2 pag

AO 1979-30 Transfers Among Subordinate 

Committees of State Party 

Committee 

The Jefferson-Jackson Day Committee (JJDC

unregistered fundraising committee of the Demo

Party, may make coordinated party expenditur

retire the debts of the Miller for Senate Committe

Miller Committee) and the 1978 Virginia Demo

Campaign Committee (VDCC), provided it reg 

with the Commission, segregates its funds 

organizes its operations in accordance with Comm

Regulations. 

The JJ DC has cash-on-hand w hich includes unio

corporate funds. The Miller Committee and the V

have outstanding debts. The JJDC may transf

The RECORD is published by the Federal Election Commission, 7325 K Street, N. W., Washington, D.C. 204

Commissioners are: Robert 0 . Tiernan, Chairman; Max L. Friedersdorf, Vice Chairman; Joan D. Aike

Thomas E. Harris; John W. McGarry; Frank P. Reiche; J. S. Kim mitt, Secretary of the Senate, Ex Offi

Edmund L. Henshaw, Jr., Clerk of the House of Representatives, Ex Officio. For more information, 

202/ 523-4068 or toll-free 800/424-9530. 

2 
surplus funds to help these committees retire their debts 

provided it: 

1. Establishes a separate Federal campaign committee 

which registers as a "political committee" affiliated 

with the Virginia Democratic Party; 

2. Discloses, with regard to this "political committee," 

the source of any cash-on-hand at the time of 

registration, and excludes from its cash any contributions not permissible under the Act. 

The JJDC may then make coordinated ex~<>enditures on 

behalf of the Miller Committee in either of the alternative methods it has proposed: 

1. Directly to the creditors of the Miller Committee; or 

2. As a transfer to the VDCC for payment to the Miller 

creditors. 

The JJDC may also transfer additional funds to the 

VDCC to retire its' debts, since Commission Regulations permit unlimited transfers between committees of 

the same political party. (Date Issued: July 13, 1979; 

Length: 4 pages) 

AO 1979-32: State Report Does 

Not Meet Act's Requirements 

The Kanawha County democratic Executive Committee 

(the Committee) may not submit a State campaign 

finance report to the Commission to satisfy the Committee's 1978 filing obligations. The State reports fail to 

provide the mailing address, occupation and principal 

place of business of contributors to the Committee, as 

required by the Act. 2 U.S.C. §434(b). To satisfy the 

reporting requirements of the Act, the Committee must 

submit the required information to the Commission. 

(Date Issued: July 27, 1979; Length: 2 pages) 

AO 1979-33: Union Reimburses 

Separate Segregated Fund 

District 1199-C of the National Union of Hospital and 

Health Care Employees (the Union) may use general 

treasury funds to reimburse the District 1199-C Political 

Action Fund (the Fund) for administrative costs inadvertently paid by the Fund. 

The Fund spent $1,050 to purchase tickets to an AFLCIO Council COPE banquet which the Fund believed 

was political campaign activity. It later discovered that 

the banquet proceeds were used exclusively for and 

contributed to a "segregated and nonpartisan register 

and vote campaign fund." 

A labor organization's financial support for nonpartisan 

registration and voter drives directed toward its 

members and their families is excluded from the Act's 

definition of contribution or expenditure. 2 U.S.C. 

§441 b(b)(2)(8). Since the proceeds of the banquet were 

used for an exempt activity, the Union could have paid 

these costs directly from its treasury without violating 

the Act. (Date Issued: July 13, 1979; Length: 2 pages) 

3 

AO 1979-34: Public Financing Payments 

for New Party Candidate 

Mr. Morris Woods, the Presidential candidate of the 

Freedom Party, is not entitled to receive preelection 

public financing payments from the Presidential Election Campaign Fund. A new party Presidential candidate is eligible only for "retroactive" public financing 

payments (i.e., postelection), and then only if the candidate receives five percent or more of the total number 

of popular votes cast for the office of President in the 

election. 11 CFR 142.3(a). (Date Issued: July 19, 1979; 

Length: 2 pages) 

AO 1979-36: Direct Mail 

Agreement 

Amounts expended in accord with a direct mail agreement by Working Names, Inc. during the initial stages 

of a direct mail fundraising program which it is conducting on behalf of the Committee for Fauntroy (the Committee) would not be considered campaign contributions provided that the proposed agreement, described 

below, conforms with ordinary business practice in the 

direct mail industry. 

Under the proposed agreement, Working Names will incur the initial expenses in preparing and mailing the 

fundraising materials; it will then bill the Committee for 

those expenses and its own fees. Contributions received as a result of the direct mail program will be 

deposited in the Committee's account, although 75 percent of those contributions will be designated as reimbursement for Working Names. The agreement provides that the cost to the Committee will generally not 

exceed 75 percent of all contributions collected. 

The Commission concluded that the amounts initially 

advanced by Working Names, which are subject to 

reimbursement by the Committee, would not be campaign contributions provided that: 

1. The provisions regarding initial expenditures by 

Working Names and the limited liability of the Committee in the event of an unsuccessful fundraising 

campaign are normal industry practice; 

2. The terms of credit are similar to those extended to 

nonpolitical clients; and 

3. Working Names charges the Committee the same 

rates it charges to all other clients for the same services. 

The Commission noted that if any of the provisions 

deviated from the normal course of doing business, a 

prohibited contribution could occur. (Date Issued: July 

27, 1979; Length: 3 pages) 

AO 1979-37: Donations to 

Federal Officeholder 

Donations from partnerships, associations, corporations or unions to a trust established by Representative 

Daniel Flood to pay his legal defense expenses are not 

contributions or expenditures under the Act, since they 

continued 
are not made for the purpose of influencing the nomination or election of a person to Federal office. 2 U.S.C. 

§431 (e) and (f). Nothing in the Act or Commission 

Regulations would limit or prohibit the trust from receiving donations from the described sources. Furthermore, 

neither Representative Flood nor the trust would be required to file campaign finance disclosure reports. 

The Commission expressed no opinion on the applicability of the House Rules, Federal income tax 

statutes or any other Federal law to the establishment 

and use of the trust since those issues are beyond Commission jurisdiction. (Date Issued: July 19, 1979; 

Length: 3 pages) 

AO 1979-38: Solicitation of 

Corporation's licensees 

Hardee's Good Government Fund (the Fund) may solicit 

contributions from the executive and administrative personnel of Hardee's licensees and their families because 

Hardee's and its licensees are affiliates. 11 CFR 

114.5(g)( 1). Since Hardee's maintains continuing direction and control over its licensees through the franchise 

agreement, Hardee's and its licensees are affiliates 

within the meaning of the Act and Regulations. Therefore, solicitation of executive and administrative personnel of the licensees by Hardee's is permissible, if conducted in accordance with Commission Regulations. 

(Date Issued: July 31, 1979; Length: 2 pages) 

FEC PUBLIC APPEARANCES 

In keeping with its objective of making information available to the public, the Federal Election 

Commission regularly accepts invitations for its 

representatives to address public gatherings on 

the subject of campaign finance laws and the 

Commission itself. This regular column lists 

scheduled Commission appearances, detailing the 

name of the sponsoring organization, the location 

of the event and the Commission's representative. 

For additional information, please contact the 

sponsoring organization. 

9/ 4-5 American Enterprise Institute 

Conference on Parties, Interest 

Groups and Campaign Finance 

Washington, D.C. 

William Oldaker, General Counsel 

9/ 10-11 Secretaries of State Annual Meeting 

Lake of the Ozarks, Missouri 

Gary Greenhalgh, 

Clearinghouse Director 

9/28 National Federation of Republican 

Women 

Convention Workshops 

Indianapolis, Indiana 

Commissioner Joan Aikens 

4 

PUBLIC 

FINANCING 

FINANCIAL CONTROL AND 

COMPLIANCE MANUAL AVAILABLE 

The Financial Control and Compliance Manual fo

Presidential Candidates Receiving Public Financin

(Primary Election Financing) is now available, as part o

the Commission's Outreach Program, to Presidentia

candidates who anticipate receiving public funds. In

terested parties who are not directly involved i

Presidential campaigns may obtain a copy of th

Manual, at a cost of $7.50, through the Commission'

Office of Public Records. 

THE LAW 

IN THE COURTS 

LITIGATION STATUS INFORMATION 

The following is a list of new litigation involving th

Commission, together with the date the suit was filed

the Court involved, the Docket Number and a brie

description of the major issue(s) involved in the case

Persons seeking additional information on a particula

case should contact the Court where the suit is filed o

the Commission. 

California Medical Association and Californi

Medical Political Action Committee v. FEC, U.S

District Court for the Northern District of California

Docket No. C-79-1089-CFP, May 7, 1979. 

Plaintiffs allege that certain provisions of the Act 

constitute an unconstitutional abridgement of 

their First and Fifth Amendment rights. 

FEC v. California Medical Association and Californi

Medical Political Action Committee, U.S. Distri

Court for the Northern District of California, Docket No

C-79-1197-ACW, May 22, 1979. 

The FEC alleges that the California Medical 

Association made contributions in excess of the 

limits to the California Medical Political Action 

Committee (CALPAC), and that CALPAC knowingly accepted the excessive contributions. The 

Commission also alleges that CALPAC and an affiliated committee, the Los Angeles Physicians 

Committee, made contributions in excess of the 

limits to a candidate for Federal office, and failed 

to report affiliation with each other. 

FEC v. Sanford Krasnoff, U.S. District Court for th

Eastern District of Louisiana, Docket No. 79-1905, Sec

tion A-5, May 30, 1979. 

The FEC alleges that the defendant violated the 

Act by failing to designate a campaign depository 

and by commingling personal funds with campaign funds. 
FEC v . Comite Amigos de Jaime Benitez, U.S. 

District Court for the District of Puerto Rico, Docket 

No. 79-1406, June 21, 1979. 

The FEC alleges that the defendant violated the 

Act by failing to: report receipts, keep adequate 

records of contributions, designate a campaign 

depository, include required notices on contribution solicitations and file required reports in a timely fashion. The FEC also alleges that the defendant accepted corporate contributions. 

FEC v. MILTON WEINSTEN AND 

WINFIELD MANUFACTURING COMPANY 

On June 8, 1979, the U.S. District Court for the 

Southern District of New York issued a consent judgment in a suit which the FEC had filed against Milton 

Weinsten and the Winfield Manufacturing Company on 

March 2, 1978. 

In its suit, the Commission alleged that Milton 

Weinsten, President of Winfield Manufacturing (a 

government contractor), used corporate funds to reimburse employees of Winfield Manufacturing Company 

for contributions they made to the 1976 Presidential 

primary campaign of Milton Shapp. 

The consent decree stated that use of corporate funds 

in this manner had violated the Act's prohibitions 

against: 

- The use of corporate funds in connection with 

Federal elections (2 U.S.C. §441b); 

- Contributions by government contractors (2 U.S. C. 

§441c); and 

-Contributions made in the name of another (2 U.S.C. 

§441f). 

The Court levied a civil penalty of $5,000, enjoined the 

defendants from future violation of the Act, and retained jurisdiction over the case for three years to ensure 

compliance with the provisions of the decree. 

HENRY WALTHER v. FEC 

On June 15, 1979, the U.S. District Court for the 

District of Columbia granted summary judgment to the 

FEC in a suit which Henry Walther filed against the FEC 

on November 21, 1978. 

The suit contended that the Commission acted con

to law in dismissing 45 complaints filed by Walthe

the National Right to Work Committee pursuant 

U.S.C. §437g(a)(1). Based on the standard of jud

review that only arbitrary and capricious administr

actions of an agency may be reversed, the Court d

mined that the Commission's decision not to invest

Walther's complaints was "eminently reasonable." 

Court characterized the Walther complaints a

"shambles" containing serious shortcomings. 

On August 3, 1979, the same Court dismissed se

teen cases (which had been consolidated, with H

Walther v. FEC, as In Re Federal Election Campaign 

Litigation) brought by Walther against the candid

and committees whom Walther had named in the c

plaints filed with the Commission. In those seven

cases, the Commission appeared as amicus curiae. 

seventeen cases, and three other cases previo

dismissed by Federal District Courts, alleged the s

violation of the Act which was at issue in the 

against the FEC. The Court determined that it 

"clearly without subject matter jurisdiction to ente

Mr. Walther's attempt at the direct enforcement o

Federal election laws." 

AUDITS 

REVISED PROCEDURES FOR 

REVIEWING AUDIT REPORTS 

On April 26, 1979, the Commission modified its 

cedures for considering audit reports. Previo

discussion of all audit reports at Commission mee

took place during executive sessions which are cl

to the public. This procedure was based on Commis

Sunshine Act Regulations which exempt from p

discussion any information which might invade 

privacy of an individual or significantly frustrate 

plementation of a proposed Commission action. 

shinP. Act Regulations 3.2(b)(iii) and 3.2(b)(v). 

These procedures have been modified so that audits 

no longer automatically be placed on the agenda 

closed executive sessions. Instead, each audit re

will be circulated to the Commissioners for approv

the audit report is approved, it will be released to 

public as the final audit report. If the audit report is 

contin

Forms for candidate and committees to register and report are available at any time by contacting: Office 

Public Communications, Federal Election Commission, 1325 K Street, N.W., Washington, D.C. 204

(Telephone: 202/ 523-4068; Toll-Free 800/424-9530). 

Candidates and committees should use the revised form for reporting receipts and expenditures, which 

designated in the upper left hand corner as: FEC Form 3 REVISED, January 1978. All Presidential candidat

must file on FEC Form 3P, even if they do not receive public funds. Filers must submit legible reports which ca

be reproduced clearly; candidates or committees who file illegible or barely legible reports will be require

to refile. 

5 
approved, the Commissioners will vote to determine 

whether the report should be considered in open or 

closed session. Accordingly, when the audit report is initially circulated, the Commissioners will have three options: 

1. Approval of the recommendations contained in the 

audit report; 

2. Objection to the recommendations and a vote to 

consider the objection in open session; 

3. Objection to the recommendation and a vote (under 

specific Sunshine exemptions) to consider the matter 

in closed executive session. 

Sunshine exemptions include, among others, the fact 

that the audit may involve a compliance action or the 

fact that the open session discussion might significantly 

frustrate implementation of a proposed Commission action. Unless a specific exemption applies (number three 

above), audits will be discussed in open session. Agenda Document #79-190 provides a complete discussion 

of these procedures. 

In accordance with additional procedures adopted on 

June 15, 1979 (Directive 22), any audit report which is 

considered in open session, but not approved by the 

Commission, will be available to the public as an interim 

report. When the Commission approves the final audit 

report, that report will replace the interim report as the 

final public document. 

Both Directive 22 and Agenda Document #79-190 are 

available for sale through the Commission's Office of 

Public Records. 

FEDERAL ELECTION COMMISSION 

1325 K STREET, NW 

WASHINGTON, DC 20463 

OFFICIAL BUSINESS 

AUDITS RELEASED 

TO THE PUBLIC 

The Federal Election Campaign Act require

Commission to periodically conduct audits and fie

vestigations with respect to reports and statement

under the Act. The Commission is also required to 

duct audits of all campaigns of Presidential cand

who receive public funds. Audit reports which 

been approved by the Commission, either through 

ly vote or after discussion in open session, are rele

as final audit reports. If an audit report has 

discussed in open session, but has not been app

by the Commission, the report is available as an in

audit report. Both final and interim reports are ava

through the Office of Public Records and Press O

In the list below, interim reports are designated 

asterisk(*). All others are final audit reports. The fo

ing is a chronological listing of audits released bet

June 28, 1979, and August 6, 1979: 

Audit Report 

1. Tribute to Gerald Ford 

2. United Campaign Committee of Davidson County Democratic Executive 

Committee #2 

3. Area Wide Rally/ Joint Fundraising 

Committee for James Sasser and Ed 

Jones 

4. Republican State Central Committee of 

New Mexico and Republican Campaign 

Committee of New Mexico 

5. West Virginia Republican State Executive Committee 

6. Indiana Republican State Central Committee 

7. Livingston for Congress Committee 

LA/ 1 

Date M

Avail

6/ 2

7

7

7/1

7/ 2

7/ 2

8/ 

FIRST CLASS MAIL 

POSTAGE & FEES PA

FEC 

WASHINGTON. D.C. 

PE RMI T NO. G·31