FEDERAL ELECTION COMMISSION

20463 Volume16, Numbe

1 REPORTI1'I:i: December Reports

8 800 LINE: Earmarked Contributions

4 ADVISORY OPINIOOS

6 STATISTICS: l8-Month PAC Activity

RmJIATIWS

1 Effective Dates for Three Sets of Ru

2 Requests for Comments on MCFL Rulema

FEC EFFECTIVE Dl\TES FOR

THREE SETS OF RULES

On October 3, 1990, the Commission

published Federal Register notices announcing the effective dates for:

a Revised allocation rules and new repo

ing forms;

o Revised debt settlement rules and new

reporting forms; and

a New rules on computerized records mai

tained by publicly funded Presidentia

campaigns.

13 INDEX

TABLE OF CCNI'ENTS

11 FEDERAL REGISTER OOTICES

Allocation Rules and Forms

January I, 1991, is the effective d

for the revised rules on the allocation 

expenses that jointly benefit federal an

(continu

12 COMPLIANCE: MURs Released to the Pu

CCXJRT CASES

9 FEC v. Dramesi for Congress

10 New Litigation

PUBLICATI~S

10 New Edition of Court Case Abstracts

11 Campaign Guide Order Form

999 E Street NW Washington DC

OCTOBER ISSUE

Two different versions of the

October 1990 Record were printed and

mailed. Because of a printer's error,

the first version did not contain the

charts that should have appeared on

page 14. The printer agreed to print

and mail, at his own expense, the

corrected version.

November 1990

REPORTI1'I:i BEIUNDER: DECEMBER REPORTS

December Monthly: Presidential Coumittees

Committees of Presidential candidates

that are filing on a monthly basis must

file a report covering November 1990 activity. The report is due on December 20,

1990, unless sent by registered or certified mail, in which case it must be postmarked no later than December 20.

Post--<3eneral Report: PACs, party

COIIIIIittees, Committees of General Election

candidates

The following committees must file

post-general election reports that are due

on December 6, 1990:

o All PACs and party cOmrrUttees, regardless

of their filing status (monthly or

quarterly); and

o All authorized committees of House and

Senate candidates who ran in the November 6 general election.

The post-general election report covers

the period from the closing date of the

committee's last report through November

26, 1990.

Reports sent by registered and certified mail must be postmarked no later than

December 6. Reports sent by other means

must be received in the federal and state

filing offices by December 6. For information on where to file, see the instructions

on the back of Form 3 or 3X.

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November 1990 FEDERAL ELECTION COMMISSION Volume 16, Numb

nonfederal candidates and elections. The

new reporting forms that implement the

rules will also become effective on that

date. 55 Fed. Reg. 40377. Although the

Commission could have prescribed the new

rules and forms earlier, the agency delayed

the effective date in order to give committees time to develop procedures necessary

to comply with the new rules. The new

rules and forms will soon be mailed to all

registered committees.

The final rules at 11 CFR Parts 102,

104 and 106 were published in the June 26,

1990, Federal Register along with the

explanation and justification (55 Fed. Reg.

26058). A summary of the revised allocation rules appeared in the September 1990

Record.

Debt settlement Rules and Forms

Both the debt settlement rules. and the

reporting forms that implement the rules

became effective October 3, 1990.. 55 Fed.

Reg. 40376. All debt settlement requests

received after the effective date must comply with the new rules and must be submitted on the new forms•.

The Commission published the final

rules and their explanation and justification in the June 27, 1990, Federal Register

(55 Fed. Reg. 263.78). The new rules at

11 CFR Part 116 replace previous section

114.10; sections 100.7, 104.3 and 104.11

were also revised to reflect the new provisions. A summary of the debt settlement

rules appeared in the September 1990

Record.

Computerized Records of Presidential

GajDpaigns

The new rules on the production of

computerized records maintained by publicly

funded Presidential candidates became

effective October 3, 1990. 55 Fed. Reg.

40377. The rules implement the new

technical standards set forth in the FEC

document "computerized Magnetic Media

Requirements for Title 26 Candidates/

Committees Receiving Federal Funding."

These technical standards also became

effective on October 3. 

The final rules and their explanati

and justification were published in the

June 27, 1990, Federal Register (55 Fe

Reg. 26392). A brief summary of the ru

appeared in the August 1990 Record.

ADDITICI>lAL lW;lUEST FOR CCtI!IENTS 00

MCFL RULEMAKING

On October 3, 1990, the Commission

published a Notice in the Federal Regi

(55 Fed. Reg. 40397) seeking further co

ments on issues raised in the Supreme c

. case FEC v. Massachusetts Citizens for 

(MCFL), 479 U.S. 238 (1986). The Comm

sion seeks comments in light of several

recent court decisions, including Austi

Michigan Chamber of Commerce, _ U.S. _

110 S.ct. 1391 (1990). Comments are du

November 2, 1990, and should be address

to Susan Propper, Assistant General

Counsel, 999 E Street, NW, Washington, 

20463.

Background

MCFL Decision. Section 441b of the

Federal Election Campaign Act bars corp

tions from making contributions and

expenditures in connection with any fed

election. In MCFL, the Supreme Court r

that section 441b's ban on independent

expenditures by a nonprofit corporation

formed to promote "pro-lifell causes wa

violation of free speech under the Fir

Amendment. The Court found that sectio

441b requirements, when applied to a sm

nonprofit entity that lacked formal org

zation, created a disincentive for such

organizations to engage in political

speech. The Court delineated three ess

tial features for determining which non

profit corporations would be exempt fro

section 441b's restriction on corporate

spending. The Court also focused on w

Federal Election COIIIIIission, 999 E Street, NW, Washington, DC 20463

800/424-9530 202/376-3120 202/376-3136 (TOD)

Lee Ann Elliott, Chairman

John Warren McGarry, Vice Chairman

Joan D. Aikens

'l1lanas J. Josefiak

Danny L. McDonald

Scott E. 'l1lanas

Walter J. Stewart, Secretary of the Senate

Ex Officio commissioner

Donnald K. Anderson, Clerk of the House of

Representatives, Ex Officio Commissione

2
FEDERAL ELECTION COMMISSION . Volume 16, Numb

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November 1990

qualifies as an expenditure under section

441h, indicating that it would consider any

communication that expressly advocates the

election or defeat of a candidate as an

expenditure subject to section 441h's

prohibition.

FEe Proposed Rulemaking. In 1987, the

Commission published a Notice inviting

comments on a rulemaking petition filed by

the National Right to work Committee

(NRWC). The NRWC wanted the Commission to

revise its regulations to incorporate the

"express advocacy" test set forth in MCFL

as the standard for judging expenditures.

52 Fed. Reg. 16275, May 4, 1987. In 1988,

the Commission published an Advance Notice

of Proposed Rulemaking that sought comments

not only on the express advocacy issue but

also on other questions raised by the MCFL

decision. 53 Fed. Reg. 416, January 7-,-

1988. The Commission also held a hearing

on November 16, 1988, at which two witnesses testified concerning these issues.

Austin Decision. on March 27, 1990,

the Supreme Court issued its decision in

Austin v. Michigan Chamber of Commerce. In

upholding a Michigan statute containing

prohibitions similar to section 441b, the

Court emphasized the limited nature of the

MCFL exception and further expounded on the

characteristics of an MCFL-type corporation. The Commission now seeks new comments to help determine what changes in its

regulations are warranted based on MCFL,

Austin and recent judicial decision~

MCFL Criteria (for 441b Exemption)

Discussed in Austin

In Austin, the Court examined the

Michigan Chamber of Commerce under the

three essential features described in MCFL

and found that the Chamber failed to -- qualify for exempt status.

First Feature. Under the first essential feature, a corporation must be formed

for the express purpose of promoting political ideas and cannot engage in business

activities. The Chamber failed to meet

this requirement because it was not formed

expressly to promote political ideas and,

furthermore, because it conducted a variety

of nonpolitical activities.

It appears from the Court's decision in

Austin that a corporation may be considered

to be engaging in business activities even

if its main purpose is not profit making.

The Court pointed to the Chamber's educational activities as among those that fell

outside of the requirement. The Commission

welcomes comments on what other activities

3

might qualify as business activities, t

placing a corporation outside of the MC

exemption.

second Feature. The second MCFL

requirement is that the corporation mu

not have shareholders or other persons 

would have a claim on its assets or ear

ings. "This ensures that persons conn

with the organization will have no econ

disincentive for disassociating with it 

they disagree with its political activi

Id., at 1399, quoting MCFL at 264. The

Chamber failed to meet this requiremen

because, as the court pointed out, its

members might be reluctant to withdraw 

political grounds because of the loss o

economic benefit derived from Chamber m

bership, such as business contacts and 

variety of educational and other nonpolitical programs.

Seeking comments on this point, the

Commission wants to know what kinds of

economic benefits a person might derive

from a nonprofit organization that wou

create a disincentive to disassociation

For example, some organizations provide

their members with credit cards or insu

ance at favorable rates. Might the los

a favorable rate qualify as a disincen

to disassociation sufficient to place t

nonprofit corporation outside the Cour

MCFL exemption?

ntird Feature. The final feature o

MCFL-type corporation is that it must n

be established by a business corporatio

and must have a policy against acceptin

contributions from such entities. Thi

precludes a nonprofit organization from

acting as a conduit for a corporation'

money in the "political marketplace." 

at 1400, quoting MCFL at 264. The abse

of any Chamber policy against accepting

contributions from business corporation

placed the organization outside the MC

exemption. The Commdssion invites com

on this point as well;

Express Advocacy Issues

on June 29, 1990, the U.S. Distric

Court for the District of Maine employ

the express advocacy test in evaluating 

Commission's voter gui~e regulations a

11 CFR 114.4(b)(5)(i). The court con

(contin

IThe court also determined that the Ma

Right to Life Committee did not qualify 

the MCFL exemption because it lacked a

policy against receiving corporate con

butions.
November 1990 FEDERALELECTION COMMISSION Volume 16, Numbe

eluded that "the regulation, as cunently

promulgated with its focus on issue advpcacy [rather than express advocacyl, is contrary to the statute as the United states

Supreme Court has interpreted it. .•. " Faucher V. FEC, No. 90-0112-B, slip op. at

10 (D.Me. June 29, 1990). The Cormnission

has appealed this portion of the opinion.

In another case, decided on May 11,

1989, the U.S. District Court for the

District of Columbia applied an express

advocacy standard to determine whether

section 441b permitted an incorporated

membership organization to pay for letters

directed to the general public that solicited new members. FEC v. National Organization for Women (NOW), 713 F. Supp. 428

(D.D.C. 1989). The court concluded that

the corporation had not violated section

441b because the letters did not go beyond

the discussion of issues to express advocacy. The Commission has also filed an

appeal in this case.

The Commission invites comment on the

issues raised by these decisions, although

future decisions in these cases and other

pending litigation may affect the resolution of the issues.

ADVISORY OPINIW ~TS

Recent requests for adVisory opinions

(AORS) are listed below. The full text of

each ADR is available for public review and

comment in the FEC's Public Records Office.

AOR 1990-22

Use of payroll deduction by health insurance corporation to solicit executive and

administrative personnel of member "Plans."

(Date Made Public: September 19, 1990;

Length: 11 pages plus 272 pages of

attachments)

AOR 1990-23

Principal campaign committee's establishment of separate account for reapportionment-related activity. (Date Made Public:

September 29, 1990; Length: 5 pages)

AOR 1990-24

Principal campaign committee's reimbursement to candidate's wife of European travel

expenses. (Date Made Public: October 10,

1990; Length: 2 pages)

4

AD 1990-10: Affiliation Between PACs of

Corporate Parent and Bankru

SUbsidiary

The separate segregated funds of Texas A

Corporation and its wholly owned subsidi

ary, Eastern Airlines Inc., remain affil

ated even though a bankruptcy court

appointed a trustee to manage Eastern

Airlines.

In April 1990, the U.S. Bankruptcy

Court for the Southern District of New Y

issued a court order approving the appo

ment of a trustee and, as asserted by Te

Air, "prohibit[ingl Texas Air from any f

ther involvement in management and decisiorunaking for Eastern." Texas Air stat

that a possible outcome of the reorganiz

tion will be the substantial reduction o

elimination of Texas Air's stock ownersh

in Eastern.

Under the Federal Election Campaign 

and Commission regulations, committees

established by a parent corporation and 

subsidiaries are affiliated per se (and

thus must operate under the same contrib

tion limits). 2 U.S.C. §441a(a)(5); 11 

100.5(g)(2), 110.3(a)(1) and 110.3(a)(1)

(ii). Therefore, until the parent/subs

ary relationship between Texas Air and

Eastern is legally severed, their PACs

remain affiliated.

Chairman Lee Ann Elliott filed a dis

senting opinion. (Date issued: October 

1990; Length: 6 pages, including dissen

AD 1990-17: Contributions to 1988 Camp

to Defray FECA-Related Leg

Costs

The Conrad Burns/U.S. Senate committee, 

redesignated for Senator Burns' 1994 reelection campaign, may raise contributio

designated for the 1988 general election 

order to pay for legal expenses related 

an FEC compliance matter emanating from 

1988 election.

Contributions to defray such expense

are subject to the contribution limits a

prohibitions of the Federal Election Car

paign Act. AD 1981-16; see also AO 1989

10. (Although the donation of legal ser

vices to ensure a committee's compliance

with the Act is exempt from the definiti

of eontribution--as long as the person

rendering the services is paid by his or

her regular employer--the Act and FEe

regulations do not exempt the donation o

money to defray the costs of such servic

2 U.S.C. §431(8)(B)(ix); 11 CFR 100.7(b)

(14); ADs 1981-16 and 1977-5.)
FEDERAL ELECTIOI\J COMMISSIOI\J 'Volume 16, Numb

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November 1990

An authorized committee may accept

contributions made after the date of an

election to retire the campaign's net debts

outstanding. 11 CFR 110.1(b)(3)(i). The

net debts outstanding figure, initially

calculated as of the date of the election,

must be adjusted as the committee's financial position changes. Contributions

accepted after the election may not exceed

the adjusted amount of net debts outstanding on the date the contributions are

received. 11 CFR 110.1(b)(3) (ii) and

(iii); Explanation and Justification of

11 CFR 110.1(b)(3)(ii) and (iii), 52 Fed.

Reg. 762 (January 9, 1987). Based on the

Burns committee reports, it appears that at

the time of the 1988 election, the committee did not have enough cash on hand and

receivables to pay its debts, let alone the

now-anticipated legal costs.

The committee may receive contributions

to defray the costs of legal representation

in the compliance matter emanating from the

1988 election provided that the contributions:

o Are designated in writing by the donors

for the 1988 general election;

o Do not exceed the donors' per-election

contribution limits when the contributions are aggregated with other contributions made by the same donors for the

1988 general election; and

o Do not exceed the amount needed to defray

the legal costs, since the c~ittee has

paid all other 1988 debts. 11 CFR

110.1(b)(3) and 110.1(g).

If the committee receives contributions

in excess of the legal costs, it must,

within 10 days of the treasurer's receipt,

either return or deposit the contributions.

If a contribution is deposited, the treasurer must seek a written redesignation from

the contributor, or a reattribution in combination with a redesignation, in accordance with 11 CFR 110.1(b)(3)(i). (Date

issued: September 21, 1990; Length: 4

pages. )

5

NJ 1990-21: campaign Funds Used to pay 

Travel/Subsistence Expense

candidate'S Wife

The campaign committee of Congressman

Edward Madigan may pay for travel and

subsistence expenses incurred by his w

while making speeches to groups of Rep

can women within his district.

The Congressman's wife plans to del

talks about a recent trip she and her

husband made to Eastern Europe. Althou

Mrs. Madigan will neither refer to her

husband's campaign nor solicit campaign

contributions, the proposed speeches w

nevertheless be for the purpose of infl

encing the Congressman's election becau

the speeches will be made in connection

with campaign events, before a partisan

audience (Republican women) within the

Congressman's district. A candidate's

campaign committee has wide discretion 

making expenditures to influence the

candidate's election. ADs 1988-13, 19

1985-42, 1981-25 and 1981-2. The Cong

man's campaign committee may therefore 

for the expenses related to the speech

including Mrs. Madigan's travel, lodgin

and meals, but the expenses must be rep

ed as operating expenditures. 2 U.S.C.

§434(b)(4)(A) and (b)(5)(A); 11 CPR

104.3(b)(2)(i), (b)(4)(i) and (c)(2)(i)

Should the Congressman or his wife

receive reimbursements from the commit

that exceed the amount of the actual ex

penses, the retention of such excess w

result in the personal use of excess ca

paign funds. 2 U.S.C. §439a; 11 CFR 1

see also AO 1988-13. Under 2 U.S.C. §4

Congressman Madigan is not prohibited f

such personal use because he was a Mem

of Congress on January 8, 1980. See AD

1988-41, 1985-42, 1984-49 and 1981-25. 

Commission, however, did not rule on th

application-of House rules or any tax r

fications, since those issues are outsi

its jurisdiction. (Date Issued: Octo

1, 1990; Length: 3 pages)
Other Trade/Member- 2

ship Health

_ Contributions by All PACs

_ Contributions by Top 50 PACs

During the 1990 cycle, PACs contribu

$79 million to incumbents, $6.5 million 

challengers and $8.1 million to open sea

candidates. Democratic candidates recei

$59 million, compared with $34 million

received by Republicans.

An FEe report attached to the press

release compares 18-month data on PAC

activity for six election cycles and .als

ranks the top 50 PACs in each donor cate

gory by amounts raised, spent and contr

buted to federal candidates as well as b

cash-on-hand totals. The charts that

follow compare the activity of the top 5

PACs in each category.

Labor Nonconnected

FEDERAL ELEC-nON COMMISSION Volume 16, Numbe

Corporate

I. Comparison of Top 50 PACs with All PACs

Millions of Dollars

40 r-=======::-'-~~~~~~--:--------~-----------

o

10

20

Contributions to Candidates

By Top 50 PACs 1

January 1989 - June 1990

30

November 1990

EI~ ACTIVITY OF PACS

During the first 18 months of the 1990

election cycle (from January 1989 through

June 1990), PACs contributed $94 million to

U.S. House and Senate candidates, as

reported in an August 31, 1990, press

release. When compared with the same 18-

month period of the 1988 election cycle,

PAC receipts rose 3.3 percent to $275

million, while spending increased 8.3

percent to $233 million.

1 Ranked according to total amount contributed to candidates between January 1, 1989, and June 30, 1990.

2 "Other" category consists of PACs formed by corporations without capital stock and PACs formed by cooperative

Number

of PACs

1,908 365 1,282 758 207

6
November 1990 FEDERAL ELECTION COMMISSION ' Volume 16, Numbe

Corporate

<DIEIEI"""",,'... '. Labor

Nonconnected

Trade/Membership/Health

Other 1

II. Contributions from Top 50 PACs

by Amount

Contributions

$1,600,000

1,400,000

1,200,000

1,000,000

800,000

600,000

400,000

• 200,000

0

1st 10th 20th 30th 40th 

Committee Rankings

40 50 60 70 80 90 

Percentage of Committees

o 2010 30

III. Contributions from Top 50 PACs

by Percentage

Percentage of Contributions

100 I--I-i--·I-T-I--I-I--==b~~~

90

80

70

60

50

40

30

20

10

o

•

"Other" category consists of PACs formed by corporations without capital stock and PACs formed by cooperative

7
November 1990 FEDERAL ELECTION COMMISSION Volume 16, Numbe

COOTRIBUTlOOS EARMARKED TO CANDIDATES

This article explains the rules governing earmarked contributions (11 CFR 110.6),

including reporting requirements.

Please note that this article applies

only to contributions earmarked to candidates and their authorized committees.

(For information on contributions earmarked

to unauthorized committees, see 11 CFR

102.8 and AOs 1983-18 and 1981-57.)

Definitien of Earmarked Contribution

An earmarked contribution is one which

the contributor directs (either orally or

in writing) to a candidate or his or her

authorized committee through an intermediary or conduit. 11 CFR 110.6(b)(1).

Definition of Conduit or Intermediary

with certain exceptions discussed

below, a conduit or intermediary (the terms

are synonymous) is a person who receives

and forwards an earmarked contribution to a

candidate or authorized committee. 11 era

110.6(b)(2). A conduit may'be a political

committee or an unregistered entity such as

an individual or a partnership. In either

case, the conduit must comply with the

reporting requirements outlined below.

Note that acting as a conduit may

affect the conduit's contribution limits,

as explained below.

Who is Not Considered a Conduit. Certain entities who receive and forward contributions are not considered conduits and

are not subject to the requirements of

11 CFR 110.6.

o Certain individyals are considered,

campaign agents rather than condults:

campaign workers--both paid staff and

full-time volunteers--and individuals who

are expressly authorized to engage in

fundraising on behalf of the,campaign and

who occupy significant positions in the

campaign organization. 11 CPR lI0.6(b)

(2)(i)(A) and (E).

lIn determining whether an individual is

acting as an agent of the candidate's c~

paign or as an agent of another entity, one

consideration would be whether the individual's solicitation expenses were reimbursed

by the campaign committee or by another

entity. Explanation and Justification of

11 CFR 110.6(b)(2), 54 Fed. Reg. 34106.

8

o A commercial fundraising firm retaine

an authorized committee is considered 

campaign agent rather than a conduit.

11 CPR 110.6(b)(2)(i)(D).

o A fundraising representative conducti

joint fundraising with an authorized

committee is not considered a conduit

Fundraising representatives must com

with the joint fundraising regulation

(11 CFR 102.17 and 9034.8). 11 CFR

110.6(b)(2)(i)(B).

o An affiliated committee of the author

committee is not considered a conduit

11 CFR 110.6(b)(2)(i)(C).

Who May Not Act as a Conduit. pers

who are prohibited from making contribu

tions or expenditures in connection wit

federal elections--corporations, labor

organizations, foreign nationals and

federal government contractors--are not

permitted to 'act as conduits. 11 CFR

110.6(b)(2)(ii). similarly, an individ

acting as representative of a corporati

or labor organization may not act as a

conduit. 11 CFR 110.6(b)(2)(i)(A) and 

(Corporate and labor PACs--also called

separate segregated funds--may, however

act as conduits.)

Earmarking and Contribution Limits

An earmarked contribution counts

against the original contributor's lim

for the recipient candidate. 11 CFR

110.6(a). The conduit's contribution l

is affected only if the conduit exercis

direction or control over the contribu

choice of candidate. In that case, the

contribution counts against the contrib

tion limits of both the original contri

butor and the conduit. 11 CFR 110.6(d)

Reports by Conduits

Any conduit--whether a political

committee or an unregistered entity lik

partnership or an individual--must com

with the special reporting requirements 

earmarked contributions regardless of

whether the earmarked contribution is

temporarily deposited in the conduit's 

account or passed directly to the camp

Report to Recipient CODIJdttee. A c

duit must forward both the earmarked

contribution and a report to the recipi

committee within 10 days after the conduit's receipt of the contribution. 11 

102.8 and l1Q.6(c)(1)(iii).

Report Filed with Government. A po

tical committee conduit must disclose t

required information on an earmarked co
November 1990 FEDERAL ELECTION COMMISSION, Volume 16, Numb

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•

tribution on its next regularly scheduled

report filed with the appropriate federal

office (the FEC, the Clerk of the House or

the Secretary of the Senate).

A conduit that is not a registered political committee must disclose the required

information in a letter to the FEC within

30 days after forwarding the earmarked contribution. 11 CFR 110.6(c)(1)(i) and (ii).

Contents of Reports. The conduit' s

report must contain the following information on any earmarked contribution:

o Whether the contribution was transmitted

to the candidate in the form of cash, the

contributor's check or the conduit's

check;

o The name and address of the contributor

and, if the contribution is from an

individual and exceeds $200, the contributor's occupation and employer;

o The candidate designated to receive the

contribution;

o The amount of the contribution and the

date it was received by the conduit;

o The date the contribution was forwarded

to the candidate or the candidate's

authorized committee; and

o In those cases where the conduit exercised direction or control, an indication

that the earmarked contribution counts

against the conduit's limit for the

recipient candidate as well as the contributor's limit•. 11 CFR 110.6(c)(1)(iv)

and (d) (2).

Conduit's Account. If an earmarked

contribution passes through a political

committee's account, the committee discloses the information listed above on

Schedules A and B. If the committee forwards the contribution without depositing

it, the committie discloses the information

as a memo entry on Schedules A and B.

11 CFR 110•6(c )( 1 )(v) .

Report by Recipient Conmittee

The recipient candidate committee must

report any conduit that forwards an aggregate of more than $200 in earmarked contributions during a calendar year. The committee must itemize the following information on a Schedule A filed with its next

regularly scheduled report:

o The identification of the conduit (name,

address and, if the conduit is an

2A memo entry is supplemental information

on a reporting schedule. The dollar amount

in a memo entry is not incorporated into

the total figure.

9

individual, his or her occupation and

employer) ;

o The total amount of earmarked contrib

tions forwarded by the conduit and th

date of receipt;

o The identification of the original

contributor, if the contribution is 

a political committee (regardless of

amount) or if the contribution is fro

individual and aggregates over $200 

11 CFR 104.3(a)(3) and (4»); and

o In cases where the conduit exercised

direction or control, an indication 

the earmarked contribution counts ag

the conduit's limit (as well as the

original donor's). 11 CFR 110.6(c)(2

and (d){2).

FEe v. DRAKES! FOR CCNGRESS COMMI'lTEE

On september 5, 1990, the U.S. Dis

Court for the District of New Jersey g

ed the FEC's motion to hold the John A

Dramesi for Congress Committee and its

treasurer, Russell E. paul, in contemp

court for failing to pay civil.penaltie

originally imposed by the court in May 

July 1986. The court had ordered each

defendant to pay a $5,000 penalty for a

cepting an excessive contribution. (Ci

Action No. 85-4039; see the July and

September 1986 issues of the Record for 

summary of the previous judgments.)

Although finding the Dramesi comm

in contempt, the court did not take any

action against it since the committee i

defunct. The court, however, rejected 

Paul's argument that he should not be h

personally liable for payment of the p

ty imposed against him. The court stat

that, in its previous decision in this

case, "we determined that Russell E. P

liability was distinct from the liabili

of the Committee." The court went on t

state that, because "political committ

have a tendency to dissolve after an

unsuccessful campaign," Congress chose 

hold an individual--the committee trea

urer--responsible for compliance with t

Federal Election Campaign Act. See

2 U.S.C. §432(a) and (c). It therefore

follows that "an individual will also 

responsible for his indiscretions as a

treasurer."

The court, in addition to holding M

Paul in contempt, ordered him to pay th

(contin
November 1990 FEDERAL ELECTION COMMISSION Volume 16, Numbe

$5,000 penalty within 30 days. The court

imposed a $50 per day assessment if payment

is not complete within 30 days.

NDl LITIGA.TIOO

FEC v. Dennis SInith for: congr:ess

The FEC asks the court to declare that

the Dennis Smith for Congress Committee and

its treasurer, Terry E. Brown, violated

2 U.S.C. §434(a)(2)(A)(iii) by failing to

file the committee's October 1988 quarterly

report. The FEC further asks the court to

assess a civil penalty against the defendants, order them to file the report, enjoin

them from further violations of §434(a)(2)

(A)(iii) and award the FEC court costs.

U.S. District Court for the Western

District of Missouri, Civil Action No. 90-

3388-CV-S-2, August 23, 1990.

FEe v: Lawson

The FEC asks the court to declare that

Mark Law$on violated 2 U.S.C. §441f by

knowingly permitting his name to be used to

.effect a contribution in the name of

another. The FEC claims that defendant

Lawson received a $1,500 bonus from his

employer, Robin's Mens Store of Anderson,

on April 12, 1982, in order to make a

$1,000 contribution two days later to Robin

Tallon, Jr.'s House campaign conmittee.

The FEC also asks the court to assess a

civil penalty against Mr. Lawson, permanently enjoin him from further violations

of §441f and award the FEC its costs in the

action.

U.S. District Court for the District of

South Carolina, Greenville Division, Civil

Action No. 6:90-2116-0, September 6, 1990.

me v. west Virginia Republican State

Executive Committee

The FEC asks the court to declare that

the west Virginia Republican State Executive Committee violated 11 CFR l02.5(a) by

making expenditures on behalf of federal

candidates from its nonfederal account and

violated 2 U.S.C. §434(b) by:

o Failing to report those expenditures as

allocated to federal candidates;

o Failing to itemize transfers and contributions received from party committees

and other types of political committees;

and

o Reporting as operating"expenditures,

rather than as expenditures made in

connection with a candidate's campaign,

payments for newspaper advertisements

that advocated the defeat of a federal

candidate.

10

The FEC also asks the court to asses

civil penalty against the committee; per

nently enjoin it from further violations 

2 U.S.C. §434(b) and 11 CFR 102.S(a); an

award the Commission court costs.

U.S. District Court for the Southern

District of West Virginia, Civil Action 

2:90-0898, September 21, 1990.

FEC v. Mann for congress Conmittee

(90-2419)

u.s. District Court for the District 

Columbia, Civil Action No. 90-2419, Octo

1, 1990.

(This suit is identical to a previou

suit filed against the Mann for Congress

Committee (Civil Action No. 90-1154) tha

was summarized in the July 1990 Record.

The FEC voluntarily dropped that suit.)

NEW EDITICN OF SELECTED axJRT CASE

ABSTRACTS

The FEC recently published a new

edition of Selected Court Case Abstracts

compilation of court cases in which the

agency was involved. Virtually all the

summaries first appeared in the Record; 

new edition is current through the Decem

1989 issue.

Selected Court Case Abstracts contai

summaries of significant Supreme Court a

appeals court cases concerning the Feder

Election Campaign Act, FEC regulations a

enforcement actions, including: Buckley 

Va1eo, FEC v. National Right to Work Com

~e, FEC v. NCPAC and FEC v. Massachu

setts Citizens for Life, Inc. The volum

also contains district court decisions a

well as cases that did not directly invo

the FEC, such as First National Bank of

Boston v. Bellotti and Galliano v. u.s.

Postal Service. Legal citations are

provided for most cases.

Name and subject indexes make the

volume helpful to researchers. Copies m

be ordered from the FEC's Public Records

Office. The price is $10.00. Call 800/

424-9530 and ask for Public Records or c

202/376-3140.

---------------------
November 1990 FEDERAL ELECTION COMMISSION 'Volume 16, Numbe

•

A CAMPAI~ WIDE FOR EVERY CCJtiIl'IlI'l"l'EE

To help political committees understand

the requirements of the federal election

campaign law, the Commission offers a

series of campaign Guide--each one designed

for a distinct type of committee.

Available free of charge, these Guides

explain the basic provisions of the Federal

Election Campaign Act and FEC regulations,

such as contribution limits and prohibitions, registration, reporting and fundraising. Each guide also contains appendices dealing with narrower topics pertinent

to the type of committee addressed. In

addition, every Guide provides examples of

correctly completed reporting forms to

illustrate how to fill out reports.

Anyone involved in running a political

committee or filing reports will find the

Guide an important resource for complying

with the law. Committee directors, treasurers, bookkeepers, volunteers and other

staff members should use the Guide designed

for their type of committee:

o campaign Guide for Congressional

Candidates and Carmittees

o Campaign Guide for Corporations and Labor

Organizations

o campaign Guide for Political Party

Carmittees

o Campaign Guide for Noncormected

Cc:mmittees

To order, call the FEC's Information

Services Division (800/424-9530 or 202/376-

3120) or use the form provided.

CAMPAIQf GUIDE ORDER FORK

Mail to: FEC Information Services

Division, 999 E street, NW, Washington, D.C. 20463

Name:

Street Address:

City, State, Zip Code:

No. of

Copies campaign Guide

Congressional Candidates and

Committees

Corporations and Labor

Organizations

Political Party Committees

Nonconnected Committees

•

FEDERAL REXiISTER tVl'ICES

Copies of Federal Register notices are

available from the Public Records Office.

1990-13

11 CFR Parts 102, 104 and 106: Methods of

Allocation Between Federal and Nonfederal

Accounts; Payments; Reporting; Final Rule,

Announcement of Effective Date (55 Fed.

Reg. 40377, October 3, 1990)

1990-14

11 CFR Parts 109 and 114: corporate and

Labor Organization Expenditures (MCFL

issues); Additional Request for Comments

(55 Fed. Reg. 40397, October 3, 1990)

1990-15

11 CFR Parts 106, 9003, 9007, 9033, 9035

and 9038: Presidential Primary and General

11

Election Candidates; Technical Requirem

for Computerized Magnetic Media; Final

Rule; Announcement of Effective Date (55

Fed. Reg. 40377, October 3, 1990)

1990-16

11 CFR parts 100, 104, 114 and 116: De

Owed by Candidates and Political Commit

tees; Final Rule; Announcement of Effec

Date (55 Fed. Reg. 40376, October 3, 19

1990-17

11 CFR Part 110: Domestic Subsidiaries 

Foreign Nationals; Announcement of Addi

tional Public Hearing on October 30 at 

p.m. (in addition to previously schedul

hearing, October 31, 10:00 a.m.) (55 Fe

Reg. 41100, October 9, 1990)
November 1990 FEDERAL ELECTION COMMISSION Volume 16, Numbe

MURS RELFASED TO THE PUBLIC

Listed below are MURs (FEC enforcement

cases) recently released for public review.

The list is based on the FEC press releases

of August 27, September 18 and October 9,

1990. Files on closed MURs are available

for review in the Public Records Office.

Unless otherwise noted, civil penalties

resulted from conciliation agreements

reached between the respondents and the

Commission.

MUR 1993

Respondents: 1984 Victory FUnd, Vincent G.

Downing, treasurer (NY}

Complainant: FEC initiated

SUbject: Failure to report on time

Disposition: U.S. district court judgment:

$5,000 civil penalty

MUR 2703

Respondents: (a) Texas Democratic Party,

Bob Slagle, treasurer; (b) Dukakis/Bentsen

Committee, Inc., Robert A. Farmer, treasurer (MA); (c) DNC Services Corporation/

Democratic National Committee, Robert A.

Farmer, treasurer (DC) ,

Complainant: Fred Meyer, Chairman, Republican Party of Texas

SUbject: Disclaimer; misreporting of

coordinated expenditures

Disposition: (a) $1,500 civil penalty;

(b) no reason to believe; (c) $2,500 civil

penalty

MUR 2764

Respondents: (a) Herb Kohl for United

States Senate, Inc., Linda de la Mora,

treasurer (WI); (b) Herb Kohl (WI); (c)

Wisconsin Action Coalition PAC - ~CPAC,

James Jeffrey Eagan, treasurer; (d) Cranston for Senate '92, Inc., Solomon M. Kamm,

treasurer (CA); (e) Council for a Livable

World, Eliot Hubbard, treasurer (MA)

Complainant: Jann L. Olsten, Executive

Director, National Republican Senatorial

Committee (DC)

Subject: Failure to disclose conduit of

earmarked contributions; excessive contributions; improper independent expenditures

Disposition: (a) and (b) $1,500 civil

penalty; (c) no reason to believe; (d) $500

civil penalty; (e) reason to believe but

took no further action

12

MUR 2791

Respondents: Persons unknown

Complainant: stan Flint, campaign mana

Friends of Mike Parker for Congress (MS

Subject: Disclaimer

Disposition: Reason to believe but too

further action

MUR 2922

Respondents: National Pro-Life PAC,

Charles C. Fiore, treasurer (WI)

Complainant: FEC initiated

Subject: Failure to report on time

Disposition: $1,500 civil penalty

MUR 2983

Respondents: Democratic Party of Illin

(FKA Illinois Democratic party), Stuart

Winstein, treasurer

Complainant: FEC initiated

Subject: Failure to amend statement of

Organization on time; excessive coordin

party expenditures

Disposition: $9,000 civil penalty

MUR 3005

ResJ:X>ndents: Arne r i cans United, Ruth M.

Stormant, treasurer (VA)

Complainant: FEC initiated

Subject: Failure to report on time

Disposition: $125 civil penalty

MUR 3014

Respondents: (a) Douglas County Repub

Central Committee (unregistered), Ch~is

Miller, treasurer (KS); (b) Second Dis

Republican Committee, Anita Heiman,

treasurer (KS)

Complainant: FEe initiated

SUbject: Prohibited contributions; fai

to register and report

Disposition: (a) $1,000 civil penalty; 

$500 civil penalty

MUR 3017

Respondents: (a) Arnold Steinberg (CA

(b) Arnold Steinberg and Associates, In

(CA); (c) Carlos Perez (FL); (d) Carlos

Perez Amigo '89, Joan Agatheas, treasur

(FL)

Complainant: Arnold Steinberg; Arnold

Steinberg and Associates, Inc.

subject: Corporate contribution

Disposition: No reason to believe

MUR 3034

Respondents: (a) Equimark Corporation

Political Action Committee (EQUIPAC),

Bonnie S. Kabin, treasurer (PA); (b) Al

S. Fellheimer (PA)

Complainant: FEC iniHated

Subject: Excessive contributions
November 1990 FEDERAL ELECTIOI\J COIVIIV1ISSI01\J. Volume 16, Numbe

Disposition: (a) $900 civil penalty; (b)

$750 civil penalty PUBLIC APPE'.ARANCES

The first number in each citation

refers to the "number" (month) of the 1

Record issue in which the article appea

the second number, following the colon,

indicates the page number in that issue

ADVISORY OPINIrnS

1989-21: Fundraising by sole proprietor 

cooperation with candidates, 1:9

1989-25: Preemption of state law limitin

party spending on behalf of candidate

1:10

1989-26: Automatic bank transfers from

contributor's account to candidate

committee's account, 1:11

1989-27: Act's preemption of state law

governing solicitations by state

employees, 2:2

1989-28: Voter guides distributed by no

profit corporation, 3:9

1989-29: PAC established by company own

by foreign principal, 2:3

1989-30: Payment to Senator for teaching

course, 2:4

1989-32: Foreign national contribution 

state ballot measure committee "contr

led" by candidate, 8:6

1990-1: Corporation's sale of 900-line

fundraising service to candidates, 4:3

1990-2: Candidate's use of excess campa

funds to secure loan for party commi

4:5

1990-3: PAC's sale of advertising space 

newsletterl 5:3

1990-4: Use of credit cards to charge c

bined dues/contribution payments, 7:1

1990-5: Newsletter published by candida

6:4

1990-6: preemption of Oregon law prohib

ing charitable matching plan for PAC

contributions, 7:2

1990-7: Transfer from candidate's forme

Presidential exploratory committee to

1990 House committee, 8:6

1990-8: Establishment of PAC by corpora

majority-owned by foreign bank, 8:7

(contin

•

•

MUR 3049

Respondents: (a) Bill Grant campaign Fund,

Richard A. Weidner, treasurer (FL); (b) Joe

P. Burns Funeral Home (FL); (c) Lee A.

Everhart &co. (FL); et al., (d)-(l)

Complainant: Paul D. Ha rv i 11 (FL)

SUbject: Corporate contributions

Disposition: (a)-(c) Reason to believe but

take no further action; (d)-ell no reason

to believe

MUR 3050

Respondents: (a) James H. Scheuer (NY);

(b) Scheuer for Congress-1990, Frederick C.

Buelken, treasurer (NY)

Complainant: Richard Rapp (NY)

Subject: Disclaimer; failure to register

as authorized committee

Disposition: No reason to believe

MUR 3072

Respondents: The United Association Local

725 Pipefitters Air Conditioning Political

Action Committee, Eric S. Johnson, treasurer (FL)

Complainant: FEC initiated

Subject: Failure to report on time

Disposition: $1,100 civil penalty

MUR 3076

Respondents: Victory 88 (Virginia), David

A. Johnson, treasurer

Complainant: FEC initiated

Subject: Failure to report on time

Disposition: $250 civil penalty

MUR 3079

Respondents: Friends of Voinovich, Vincent

M. Panichi, treasurer (OH)

Complainant: Credit Services of Michigan,

Inc.

Subject: Continuous reporting of debts

Disposition: No reason to believe

MUR 3088

Respondents: STERLPAC-Sterling Drug Inc.

Employees Political Action Committee for

Improved Government, Sal J. Rubino,

treasurer (NY)

Complainant: FEC initiated

SUbject: Failure to report on time

Disposition: Reason to believe but took no

further action

13

11/16-17 American Bar Association

Phoenix, Arizona

Chairman Lee Ann Elliott
November 1990 FEDERAL ELECTION COrviIVIISSIOI\J Volume 16, Numbe

1990-9: Newsletter· published by candidate

as sole proprietor, 8:8

1990-10: Affiliation between PACs of

corporate parent and bankrupt subsidiary,

11:4

1990-11: Publicly funded campaign's donation of fundraising items to staff and

charity, 8:8

1990-12: Volunteer services by former

potential candidate who received opinion

poll results, 10:5

1990-13: Reporting exemption for minor

party, 10:5

1990-15: Administrative termination of

committee involved in disputed debt,

10:6

1990-17: Contributions to 1988 campaign to

defray FECA-related legal costs, 11:4

1990-21: Campaign funds used to pay for

travel/subsistence expenses of candidate's wife, 11:5

COORT CASES

Austin v. Michigan State Chamber of

Commerce, 5:5

FEC v.

- AFsCME=PQ (88-3208), 10:7 - Chipman C. Bull for Congress, 8:11 - Dennis Smith for Congress, 11:10

- Dramesi for Congress Committee, 11:9 - Franklin, 1:13 - Friends of Isaiah Fletcher Committee,

7:4 - Furgatch (83-0596-GT(M)), 2:7 - International Funding Institute, Inc.,

American Citizens for political Action,

Inc., and Dolan, 9:7

- Lawson, 11:10 .- Life Amendment PAC, Inc. (89-1429), 4:7 - Mann for Congress Committee, 7:5 - Mann for Congress Committee (90-2419),

11:10 - National Republican Senatorial Committee, 10:9 - National Right to Work Committee, Inc.,

5:7

- NY State Conservative party;1984

Victory Fund (87-3309), 6:7

- Speelman, 10:9 - Weinberg, 10:8

14

- West Virginia Republican State Exec

tive Committee, 11:10

- Working Names, Inc. (87-2467-GAG), 

- Working Names, Inc. (90-1009-GAG), 

v. FEC ~ommon Cause (89-0524), 3:11 - Common Cause (89-5231), 8:11

- Democratic Senatorial Campaign

Committee (90 1504), 8:12; 10:8

- Dolan, 5:7; 10:8 - FaUCher and Maine Right to Life

Committee, Inc. (90-0112-B), 6:7; 9

- Goland, 8:9 - Kripke, 9:7 - Miller, 10:7 - National Rifle Association (89-3011

2:7

MUR SUMMARIES

MUR 2823: Excessive contribution receiv

by candidate committee, 2:4

MUR 2599: Reporting errors by Congressi

campaign, 4:6

MUR 3009: Excessive coordinated expendi

tures by state party committee, 6:5

800 LINE

Basic recordkeeping rules, 4:8

Combined dues/solicitation statements, 

Contributions earmarked to candidates, 

Coordinated party expenditures, 3:6

Designating a principal campaign commi

1:19

Disclaimer notices, 5:8

Exempt party activities, 5:10

Faxing reports, 9:4

Last-minute contributions: 48-hour repo

ing, 7:8

Last-minute independent expenditures: 2

hour reporting, 7:9

New treasurer, 2:9

Transfers from candidate's nonfederal

committee to federal committee, 6:8

What to do about excessive contribution

redesignations and reattributions, 10

When reimbursements are required in SSF

fundraising, 2:8
•

•

•

November 1990 FEDERAL ELECTION COMMISSION Volume 16, Numb

15
political Committees

Treasurers of registered political committees automatically receive the Record.

A change of address by a political committee (or any change to information disclosed

on the Statement of Organization) must, by law, be made in writing on FEe Form 1 or by

letter. The treasurer must sign the amendment and file it with the Secretary of the

Senate, the Clerk of the House or the FEC (as appropriate) and with the appropriate

state office.

other Subscribers

Record subscribers who are not registered political committees should include the

following information when requesting a change of address:

a Subscription number (located on the upper left hand corner of the mailing label);

a Name of the subscriber;

a Old address; and

o New address.

Subscribers (other than political committees) may correct their addresses by

phone as well as by mail.

Bulk Rate Mail

Postage and Fees Paid

Federal Election Commission

Permit Number G·31

FEDERALELECTION COrvlrVIISSION Volume 16, Number 

CHAM3E OF ADDRESS

Official Business

FEDERAL ELECTION COMMISSI.ON

999 E Street, NW

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November 1990