the establishment of a corporate political action com-
mittee (SUN PAC), and a corporate “trustee” payroll
deduction plan for political giving (SUN EPA): The
guidelines are as follows:

SUN PAC (Political Action Committee)

1. Sun Oil may use treasury funds to establish,
administer, and solicit voluntary contributions to SUN
PAC.

2. Sun may make political contributions and
expenditures in connection with Federal elections as
long as such monies are expended from SUN PAC, and
the fund consists of voluntary contributions.

3. Sun may solicit contributions for SUN PAC from
its stockholders and employees, provided there is “no
coercion or reprisal of any kind in the solicitation of
contributions.” The Commission set out three guide-
lines to “minimize the appearance or perception of
coercion”:

a) No superior should solicit a subordinate;

b) The solicited employee must be informed of
the political purpose of SUN PAC;

c) The employee should be informed of his right

. to refuse to contribute without reprisal.

4. Contributions to and expenditures from SUN
PAC are subject to reporting requirements and to appli-
cable limitations of the Federal campaign finance law.

Sun may “control and direct disbursement of con-
tributions and expenditures from SUN PAC.” The Com-
mission cited a U.S. Supreme Court case (Pipefitters
Local 562 v. United States) where the Court held that a
labor union political fund “must be separate from the
sponsoring union only in the sense that there must be
strict segregation of its monies from union dues and
assessments.” The Commission said that “since
corporations and labor unions are subject to the same
restrictions under (the applicable section of the law)...
Sun Oil can exercise control over the operations and
activities of SUN PAC.”

6. Sun may not use treasury funds to solicit con-
tributions from other political committees. SUN PAC,
however, may use voluntary contributions to solicit
such contributions.

SUN EPA (Political Giving Program whereby em-
ployees may elect to have a certain amount deducted
from their paychecks, to be placed in a separate bank
account, chosen by Sun, and contributed at the
employee's direction to specific candidates, commit-
tees, and parties of his choice):

1. Sun may use treasury funds to establish such a
“trustee” payroll deduction plan for political giving,
provided that “Sun Oil will exercise no control over the
program nor will attempt to influence employee
contributions.”

2. Sun may make “any effort, either orally or in
writing, to direct contributions by participants to SUN
EPA to any candidate, group of candidates, political
party, or other persons.”

3. “The Commission would not object to Sun Oil’s
receiving reports setting forth the total number of em-
ployees in the plan, the total amount of funds in all the
accounts, and the total amount of contributions made
to all candidates and committees.” However, the Com-
mission noted that the “receipt and publication of any
report on the source or recipient of any contribution(s)
or donation(s) into or out of any SUN EPA account(s)
may constitute the exercise of direction or control over

future contributions,” which would be in violation of
the law.

AO 1975-23 was approved by a vote of 4-2.

Commissioners Harris and Tiernan filed a dissent-
ing opinion summarized below:

1. 18 U.S.C. §610 does not authorize Sun Oil to its
general treasury funds to solicit donations to its
political fund from persons other than Sun Oil’s stock-
holders. This conclusion is supported by:

a) The language and overall objective of the
statute.

b) Passages from the Congressional Record
where Representative Hansen, the sponsor of
the amendment authorizing segregated funds,
pointed out that the segregated fund excep-
tion to §610 was to be read together with the
communications exception; and, where he re-
peatedly emphasized that corporate treasury
funds could be spent only for activities
directed at stockholders as opposed to the
general public.

The Supreme Court’s interpretation of the
legislative history in §610 in Pipefitters Local
562 v. United States, 407 U.S. 385, 431 m. 42
(1972).

Data showing that Sun Oil has almost five
times as many stockholders as employees
and that corporations in general have almost
twice as many stockholders (over 30 million)
as unions have members (about 18 million).
Congress certainly did not intend to create the
gross disparity in the solicitation power of
corporations and unions, which the majority
of the Commission now creates, by authoriz-
ing corporate solicitation of practically the
entire workforce of the nation (over 80 million
workers).

Scholarly articles written by an experienced
corporate attorney and the General Counsel
of the United States Chamber of Commerce
both of which appeared in regular journals of
the American Bar Association.

2. The plain language of 18 U.S.C. §610 prohibits
Sun Oil from spending treasury funds to establish and
operate a “trustee” plan contribution program for its
employees. In support of this conclusion, the dis-
senters noted that:

a) The intent of the Hansen Amendment was to
set forth in “clear and unequivocal statutory
language” the “limited circumstances” under
which corporations could spend treasury
money in connection with Federal elections.
Those “limited circumstances” included the
establishment of segregated funds and not
any other types of political contriution
schemes.

b) An expenditure of general funds does not
have to be made directly to a candidate, com-
mittee or political party to be in violation of
§610. This section reaches any expenditure
“in connection with a Federal election.” [Sup-
port for this interpretation was found in a
Justice Department brief which had been filed
in a Federal criminal prosecution and in the
concurring opinion to United States v. C/O,
335 U.S. 106 (1948).]

3. The broad language of 18 U.S.C. §611 would pro-
hibit expenditures of treasury funds for a trustee plan
by a government contractor.

Cc

d

e



on new projects to be undertaken through the Commis-
sion’s National Clearinghouse for Information on Admin-
istration of Elections. The Panel is comprised of eight
Secretaries of State (or equivalent State officer or desig-
nated official), six county and/or local election adminis-
trators, two. State legislative officers, and three State
Governors. The members are listed here for informational
purposes:

CALIFORNIA Mr. William Durley
CONNECTICUT Hon. Gloria Schaffer
FLORIDA Mrs. Joyce Dieffenderfer
ILLINOIS Mr. Tom Walsh
KANSAS Hon. Elwill Shanahan
MAINE Hon. James B. Longley
MARYLAND Mrs. Marie Garber
MICHIGAN Mr. Bernard J. Apol
MISSOURI Hon. James Kirkpatrick
NEBRASKA Hon. Allen J. Beerman
NEVADA Mr. Daniel J. Demers
NEW YORK Mr. Thomas W. Wallace
OHIO Hon. Allen E. Norris
OREGON Hon. Clay Myers
PENNSYLVANIA Mr. Will Alton
TENNESSEE Mr. Shirley Hassler
WASHINGTON Mr. J. Barbano

Two Governors are to be appointed.

In Progress

New Task Forces

Matching Funds Distribution Task Force. In re-
sponse to a request for guidance by the Treasury De-
partment, this TF is examining the problems of the
availability of Presidential primary matching funds
for distribution, the priorities of distribution, and the

necessity for allocation of funds during distribution.
The Task Force plans to issue its report and recom-
mendations to the Commission in early December.

Multi-Candidate Committee Task Force. The Task
Force will review problems relating to multi-
candidate committees such as transfers, common
control, and affiliation.

Regional Seminars

After the first of the year, the Commission will begin
holding regional seminars. Dates and exact locations
will be published in the Record as soon as they are
scheduled. Anyone wishing further information on
these seminars, or who wishes to have one held in
his/her area, should contact the FEC’s Public Com-
munications Division (202/382-4733).

MATERIALS AVAILABLE

Federal Register Reprints

FEC Record, Nos. 1, 2, and 3

General Information Folder

index of Reports and Statements

Cost of Election Administration

Survey of Absentee Registration and Voting
Chart of Reporting Dates

November Issue of Election Law Survey
Volunteer’s Guide

Fundraiser’s Guide

Available soon will be the Revised Edition of
the Federal Election Campaign Act (ist ed., April
1975) and the new FEC forms for disclosure and

compliance.

Published by THE FEDERAL ELECTION COMMISSION, 1325 K Street, N.W., Washington, D.C. 20463,
Commissioners are: THOMAS B. CURTIS, Chairman; NEIL STAEBLER, Vice-Chairman; JOAN D. AIKENS;
THOMAS E. HARRIS; VERNON W. THOMSON; ROBERT O. TIERNAN; FRANCIS R. VALEO, Secretary of the
Senate, Ex-Officio; EDMUND L. HENSHAW, JR., Clerk of the House of Representatives, Ex-Officio.

Staff Director - Orlando B. Potter; General Counsel - John G. Murphy, Jr.; Asst. Staff Director for
Administration - Robert Baker; Asst. Staff Director for Disclosure and Compliance - Drew McKay; Asst. Staff
Director for Information Services - Herb Koster; Editor - Carolyn L. Tillotson. Press and Public Information
Phone No. - (202) 382-4733; The RECORD Phone No. - (202) 382-5162.

FEDERAL ELECTION COMMISSION
1325 K STREET, NW
WASHINGTON, DC 20463

OFFICIAL BUSINESS.

POSTAGE AND FEES PAID



*TWO ADVISORY OPINIONS HIGHLIGHTED*

THE FEDERAL ELECTION COMMISSION FROM TIME
TO TIME ISSUES ADVISORY OPINIONS ON SUB-
JECTS OF SPECIAL INTEREST TO THE GENERAL
PUBLIC. THE TWO ADVISORY OPINIONS WHICH
FOLLOW ARE OF SUCH SIGNIFICANCE AND ARE
HIGHLIGHTED IN OTHER THAN THE SYNOPSIS
FORMAT. THOSE PERSONS READING THESE SUM-
MARIES ARE ADVISED THAT—PENDING PROMUL-
GATION OF RULES AND _ REGULATIONS—THE
OPINIONS APPLY ONLY TO THE REQUESTING
PARTIES AND ARE PUBLISHED FOR INFORMA-
TIONAL PURPOSES ONLY.

Advisory Opinion 1975-12 outlines the restrictions
on spending by and contributions to individuals seek-
ing to become delegates to Presidential nominating
conventions. These restraints apply to all levels of the
delegate selection process for national nominating
conventions.

Three categories of delegates are treated separately:

1. Authorized Delegates

A delegate-candidate who is specifically author-
ized by a Presidential candidate to receive contribu-
tions or to make expenditures on behalf of that
Presidential candidate acts, in effect, as an agent of
that candidate. Among the tests of “financial authori-
zation” which the Commission noted were (i) the
direct or indirect participation by a Presidential candi-
date or campaign committee in decisions regarding
campaign spending by or on behalf of a delegate-
candidate; (ii) the direct or indirect participation by a
Presidential candidate or campaign committee in any
financial activity or transaction by or on behalf of a
delegate-candidate.

Such “authorized” delegate-candidates have no
independent expenditure limits: the delegate’s ex-
penditures are charged to the Presidential candidate’s
national and State limits.

Contributions to “authorized delegate-candidates
are presumed to come within the dominion and control
of the respective Presidential campaign committee or
candidate.” As “indirect” contributions “to a Presiden-
tial candidate,” all donations to an “authorized”
delegate-candidate are subject to the individual’s or
committee’s limit for the appropriate Presidential
candidate.

An “authorized” delegate-candidate who receives
contributions or makes expenditures in excess of $100,
excluding travel and subsistence, must file reports
with the principal campaign committee of the related
Presidential candidate. The principal campaign com-
mittee will include the data in its own financial disclo-
sure reports.

2. Pledged-But-Unauthorized Delegates

A delegate-candidate who publicizes support for
a particular Presidential candidate, but who is not
“financially authorized” in the manner explained above,
is considered a “pledged-but-unauthorized” delegate.

Expenditures by the “pledged-but-unauthorized”
delegate-candidate are not charged to the limitations
of the Presidential candidates which the delegate-
candidate supports. However, these expenditures are
made “relative to a clearly identified candidate,” and
count as “independent expenditures” subject to an
aggregate ceiling of $1,000.

The “pledged-but-unauthorized” delegate-candidate
is considered to operate as an agent for the donor who
promotes the election of a particular candidate through
the act of giving. Donations by an individual or com-
mittee to a// “pledged-but-unauthorized” delegates
publicly supporting a particular candidate are charge-
able against the person’s independent expenditure
limit, and thus may not exceed $1,000.

The “pledged-but-unauthorized” delegate-candidate
who makes campaign expenditures in excess of $100,
exclusive of travel and subsistence, will be required to
file statements of receipts and expenditures with the
Commission.

3. Uncommitted Delegates

Under the existing Act, contribution and expend-
iture limits do not apply to truly “uncommitted” or
“unpledged” delegate-candidates. However, any dele-
gate who spuriously claims to be unpledged in order to
exceed the restrictions imposed upon other categories
of pledged delegates will be held in violation of the
Act. The Commission will determine the existence of
sham or collusion upon case-by-case examination of
the facts.

A contribution to an “unpledged” delegate does
count toward an individual contributor’s $25,000 aggre-
gate ceiling on political contributions in a calendar
year [18 U.S.C. §608(b)(3)].

Uncommitted delegates also must report contribu-
tions or expenditures in excess of $100, exclusive of
travel and subsistence, to the Commission.

4. Reporting by Contributors

A donor must report to the Commission contri-
butions to aii delegate-candidates which in the aggre-
gate exceed $100.

5. Reporting Obligations by Local, County, District,

and State Party Committees

These party committees will not report adminis-
trative expenses incurred in connection with the spon-
soring of conventions at which delegates are chosen to
attend either the next stage of the State’s delegate
selection processes or the national nominating con-
vention. It must be noted, however, that these conven-
tions are “in connection with” Federal elections (and
corporations, labor unions, national banks, foreign
nationals and government contractors are prohibited
from making contributions or expenditures to finance
conventions or caucuses).

It is possible that conventions or caucuses may
become events “influencing the nomination of a person
to Federal office” by virtue of their structure or by
accompanying activities, e.g., convention keynote
speech by or on behalf of a Federal candidate or a fund-
raising activity for Federal candidates. In such a
situation, the expenditures must be reported by the
party in accordance with the Commission’s Interim
Guideline on Allocation of Expenditures (Federal
Register, 40 FR 51610).

The Commission noted that this Advisory Opinion
represents its understanding of the restrictions which
the Act places upon activity by and on behalf of
delegate-candidates “pending possible amendment by

Congress.”
——

In Advisory Opinion 1975-23, requested by the Sun
Oil Company, the Commission set forth guidelines for
(Continued, p. 5)



and 3.)

CURRENT ADVISORY OPINIONS LISTED

This chart represents a listing and brief description of Advisory Opinions issued by the Commission
from mid-November through early December. Advisory Opinion Requests are designated a number as they are
received by the Commission. Advisory Opinions are not necessarily approved in sequential order. Reference
following each description is the publication date and page number in the Federal Register. (For descriptions
of previously issued Advisory Opinions commencing with AO 1975-1, see The FEC Record, Vo/. 1, Nos. 2

AO 1975-12— Application of the law to the delegate selec-
tion process. (11/28/75-55596)

AO 1975-23—Establishes procedures for administering
and soliciting contributions to a corporate political action
committee. (12/3/75-56584)

AO 1975-31—Contributions by individuals and their
spouses who are connected with Government contractors.
(11/28/75-55598)

AO 1975-32—A multi-candidate political committee is
prohibited from contributing more than $5,000 per candi-
date per election, but may contribute without limitation to
a national committee of a political party or other political
organization provided such contributions are not ear-
marked to a particular candidate. (11/28/75-55599)

AO 1975-46—Distinguishes between an “honorarium”—
accepted for a single event or transaction, and a “sti-
pend”—accepted as fixed or regular compensation for
services rendered.( / / = )

AO 1975-48—Contributions by an individual to a multi-
candidate political committee which financially supports
the same candidate(s) as the individual contributor are
permissible under certain conditions. (11/28/75-55600)
AO 1975-49—When the aggregate of ticket purchases for
a fundraising event by one person exceed $10, records
must be kept. Purchases over $100 must be reported along
with the occupation and principal place of business of the

purchaser. The portion of the donation which covers the
actual costs of a fundraising event must be reported as a
contribution and charged against the contribution limits.
(11/28/75-55600)

AO 1975-68—A fundraising dinner to retire a 1974 cam-
paign deficit, held before publication of the Commission’s
Interim Guideline on Pre-1975 Campaign Debts, is: not
retroactively subject to that Guideline. (11/28/75-55601)
AO 1975-69—The Commission decided that while out-
standing, a loan is a contribution which counts against
the individual’s $1,000 and $25,000 contribution limita-
tions. Once it is retired, however, the loan (a contribution
by definition) is extinguished and no longer counts
against these limitations. ( / / - )

AO 1975-72—A national party committee may pay for ex-
penses incurred by Presidential candidates who are en-
gaged in party building activities before Jan. 1 of a Presi-
dential election year. (12/3/75-56589)

AO 1975-97—An entertainer’s time and talent can be
volunteered on behalf of a candidate for a fundraising
event without attribution of the value of his services to the
$1,000 contribution limit. Out-of-pocket expenses for
travel and subsistence will be attributable to the enter-
tainer’s contribution ceiling, to the extent that the cumula-
tive value of these activities exceeds $500. (11/28/75-
55601)

SYNOPSES OF RECENT ADVISORY OPINIONS

These Advisory Opinion synopses are offered for
informative purposes only. Any interested party is ad-
vised to read the complete text of the opinion pub-
lished in the Federal Register, or to write the Com-
mission for a copy.

AO 1975-31. The Shapp for President Committee
asked whether, in certain cases, a person is barred
from making a personal contribution because of the
prior acts of a related person or business.

The Shapp Committee first asked whether a wife in
a single-income family can make a contribution to a
candidate if the husband already has contributed
$1,000 to the same candidate. The Commission con-
cluded that based on statutory definitions, a wife is an
individual who is entitled to make contributions in her
own name in the same manner and under the same
limitations as her husband. Thus, even though one
spouse in a single-income family already has made
contributions to a candidate for Federal office of up to
$1,000 per election, the other spouse may similarly
contribute in the aggregate up to $1,000 per election to
the same candidate.

The Shapp Committee then asked whether a contri-
bution by a partner, officer, or member of a corporation
or business holding a Federal contract, or the spouses
of these persons, would constitute a violation of 18
U.S.C. §611. The Commission concluded that in gen-
eral, any individual, sole proprietorship, partnership,
corporation, or any other organization or group of

persons that is negotiating, or has not completed
performance of any contract with the United States (or
any department or agency thereof) is prohibited by 18
U.S.C. §611 from making a contribution. As to whether
a principal party, officer or employee of such a busi-
ness would be covered by 18 U.S.C. §611 depends
largely upon the established legal relationship between
that individual and the business.

The Commission stated that it shall presume that
each Federal contract entered into by an unincorpo-
rated sole proprietor of a business (or an unassociated
accountant, attorney, doctor, or like professional) was
entered into personally and thus such individuals are
barred from personally making a contribution.

Conversely, since a corporation traditionally has
been held to be clearly distinct from its stockholders,
officers, or employees, the Commission shall presume
that such persons have acted solely in a representative
capacity for the corporation with respect to any Federal
contract, and thus they can make personal contribu-
tions to influence a Federal election.

Similarly, the Commission noted that partners may
undertake certain actions outside the scope of their
partnership’s business, and thus the Commission con-
cluded that a contribution by an individual partner
1) out of personal funds on a personal check, as dis-
tinguished from partnership funds drawn on the part-
nership account, and 2) made in the partner’s own
name, will not be regarded as a violation of 18 U.S.C.
§611.

(Continued, p. 7)



1325 K Street N

Volume 1, No. 4

Washington, D.C.

THE FEDERAL ELECTION

COMMISSION

eCORD

20463

December 1975

COMMISSION CONTINUES TO PROPOSE REGULATIONS

ISSUANCE OF SUBPOENAS.

THE FEDERAL ELECTION COMMISSION HAS APPROVED AND SUBMITTED TO THE CONGRESS REGULA-
TIONS WHICH IMPLEMENT AND INTERPRET THE DISCLOSURE PROVISIONS OF THE 1974 ACT,
INCLUDING ALL PROVISIONS FOR REGISTRATION AND REPORTING, AND A REVISED PROPOSAL ON
THE ORIGINAL PLACE OF FILING FOR CANDIDATE AND COMMITTEE REPORTS. THE COMMISSION
ALSO APPROVED AND SUBMITTED TO CONGRESS THE SECOND REVISION OF THE OFFICE ACCOUNT
REGULATION (WHICH ALSO DEALS WITH THE APPLICABILITY OF TITLE 18 PROVISIONS). THE COM-
MISSION HAS HELD PUBLIC HEARINGS AT ITS HEADQUARTERS ON THREE ADDITIONAL SETS OF
REGULATIONS: PUBLIC FINANCING OF CONVENTIONS, ADVISORY OPINION PROCEDURES, AND THE

HIGHLIGHTS OF PROPOSED
DISCLOSURE REGULATIONS

Candidacy

* Candidate: In addition to the statutory require-
ment that an individual authorizing fundraising or
expenditure activity on his behalf becomes a “candi-
date,” the regulations provide that an individual
becomes a “candidate” by failing to disavow such
activity on his behalf by another person within 30 days
of being notified by the FEC of that activity.

* Candidate’s Personal Expenses: A candidate’s
“routine living expenses,” including food and resi-
dence, are not campaign expenditures if paid out of
non-campaign funds.

© Personal Filing of Candidate: “Within a reason-
able period after attaining candidate status,” a “candi-
date” must file a candidate statement, either by letter
or on a special form prepared for that purpose.

© Waiver of Candidate Personal Reporting: \f a
candidate states by letter or statement that his princi-
pal campaign committee will receive all contributions
and make all expenditures during the campaign, the
candidate does not have to file candidate campaign
finance reports.

Committees

* New Registration: Existing political committees,
already filing campaign reports, do not have to file new
registration statements when the new regulations go
into effect.

© Authorization by Candidate: Any committee rais-
ing funds or making expenditures on behalf of a candi-
date must be specifically authorized by that candidate.
However, a party committee making limited independ-
ent general election expenditures on behalf of a candi-
date which are specifically authorized under the
statute, does not have to receive candidate authoriza-
tion for such expenditures or to raise the funds to make
the expenditures.

* Officers: A political committee may have a vice-
chairman and assistant treasurer, to immediately take
over as chairman and treasurer, respectively, in the
event of vacancies occurring in those offices.

© Individuals Working Together: A group of indi-
viduals will not be considered a political committee if
they “act in concert” for a “single expenditure in a
single transaction.” However, four conditions must be
met for the exemption: 1) they must only spend per-
sonal money; 2) the activity must not have been author-
ized by a candidate; 3) no “solicitation effort.on behalf
of a candidate” can be involved; and 4) the individuals
may not continue to act together “for the purpose of
influencing a Federal election” after the specific
transaction is completed. The expenditures must be
reported as independent expenditures.

Contributions and Expenditures

© Volunteer Activity: Any individual can donate per-
sonal services to a campaign without making a
campaign contribution or expenditure. However, an
employee volunteering services during a “regular work



The Commission concluded that employees of any
firm with a Federal contract, and the spouse of a sole
proprietor, stockholder, officer, partner, or employee
of a business with a Federal contract is not prohibited
by 18 U.S.C. §611 from making a personal contribution.

AO 1975-32. A multi-candidate committee may con-
tribute unearmarked monies without limitation to a
national committee of a political party or to other
political organizations provided the donee committee
is not a single candidate committee, a candidate’s
principal campaign committee or a committee author-
ized—in writing—by a candidate to accept contribu-
tions on his/her behalf. While transfers of funds from
one political committee to another are not prohibited,
they may serve to place two committees under common
control, in which case the committees will be entitled
to only one contribution limit between them for any
candidate for Federal office, in any election.

AO 1975-46. Representative Barbara Jordan has an
oral contract with a national television network to
videotape editorial comment once a month for presen-
tation on the network’s morning news program. Repre-
sentative Jordan asked the Commission whether the
money she receives for doing this program is an
honorarium and thus subject to the limits on-honorar-
iums, or merely a salary for services rendered.

The Commission ruled that under 18 U.S.C. §616,
an “honorarium” should be distinguished from a “sti-
pend.” The Commission stated that money received by
an officer or employee of the Federal government will
be considered an “honorarium” if it is accepted: 1) as
consideration for an appearance, speech, or article;
and 2) as payment for a single event or transaction and
under circumstances which do not imply a continuing
compensatory relationship between the parties for
similar services. In contrast, a “stipend” will be con-
sidered to be received if the money is accepted in the
form of fixed or regular compensation intended as con-
sideration for the rendering of services, e.g., a salary.

The Commission concluded that the money Repre-
sentative Jordan received failed to qualify as an
honorarium because commentators appearing on the
mass media customarily have received fixed and
regular compensation. Thus, the money received will
be treated as a stipend received in exchange for the
rendering of services.

AO 1975-48. A person who has contributed $1,000
to a particular candidate may also contribute to a com-
mittee of a political party which makes contributions to
that same candidate, provided that the contributor
does not give with the knowledge that a substantial
portion of the contribution will be contributed to or
expended on behalf of that candidate.

AO 1975-72. The Republican National Committee
sought a ruling from the Commission as to whether
“ .. the ... Federal Election Campaign Law of 1974...
[has] ... application to ... (a) ... national party’s pay-
ment of expenses incurred by the President of the
United States, the Vice President of the United States,
and their aides while engaged in national, State, or
local party promotional activities.”

The Commission’s response adopted a two-part
test. National party appearances by the President after
Jan. 1 of a Presidential election year, because of their

proximity to the election, would be presumed to be
candidate-related and would be governed by the
relevant portions of the Act. However, appearances
before Jan. 1 at a legitimate party-building activity
would be presumed not to be candidate-related. The
Commission’s conclusions could be rebutted upon a
showing that the solicitations for the party event, or
the setting of the event, or the remarks made by candi-
dates who were invited to attend were “for the purpose
of influencing the nomination for election, or election,
of [that candidate(s)] to Federal office.”

ELIGIBILITY FOR MATCHING FUNDS
DETERMINATION MADE

The FEC has made a determination that six Presi-
dential candidates have raised the “threshold” amount
of contributions necessary to qualify for Federal
matching funds.

The Commission accepted FEC staff reports that
Lloyd Bentsen, Jimmy Carter, Henry Jackson, Ronald
Reagan, Terry Sanford, and President Ford, had each
“collected in excess of $5,000 in matchable contribu-
tions in amounts of $250 or less in each of 20 states as
required.”

The “threshold” determination does not constitute
formal certification by the Commission for eligibility
for Federal matching funds. Certification of all eligible
candidates will not be made until later this month, and
will cover all matchable funds collected in the first 10
months of 1975. No funds may be disbursed by the
Treasury Department until after Jan. 1, 1975.

The Audit and Investigation staff of the Commission
is now completing the audits of Fred Harris, Morris
Udall, and George Wallace, who were also part of the
initial audit schedule. Birch Bayh, Milton Shapp, and
Sargent Shriver are in a second group of candidates,
whose audits began after the filing of the Oct. 10
campaign finance reports. The Federal Election Com-
mission expects to complete the audits of these
candidates shortly. Additional audits will be scheduled
by the Commission as new Presidential candidates file.

FEC NOTES

Public Records

Frequently sought information in the Public Records
section includes newly registered, non-party multi-
candidate committees. We have listed below the most
recently registered committees, along with their affilia-
tion, if any. This will be a regularly featured section of
FEC Notes.

Metropolitan Employees’ Political Participation Fund
(affiliated with Metropolitan Life Insurance Co.)
The National Good Government Fund

ATU-COPE Political Contribution Committee
(affiliated with Amalgamated Transit Union)
American Express Officer's Committee for Responsi-
ble Government

(affiliated with American Express Company)

.

oe

Clearinghouse Advisory Panel

The Commission has appointed members of the Clear-
inghouse Advisory Panel, which was created to provide
the Commission with expertise on the processes of elec-
tion administration and voter registration, and with advice

GPO 896-830



period” must make-up or complete his regular duties
“within a reasonable period” to prevent that time from
being considered an in-kind contribution by the em-
ployer. In addition, an employee can utilize “bona fide,
although compensable vacation time or other earned
leave time” for volunteer political activity.

* Donation of Own Home: If an individual uses his

own home for a candidate, the “rental value” of the
home does not have to be considered in calculating the
$500 exemption provided by the statute for “the cost of
invitations, food and beverages” in the home. In addi-
tion, a husband and wife each have a separate $500
exemption.
Party Communications: Communications of a
political party to its members are only exempt from
being campaign expenditures if directed to “dues
paying or contributing members in good standing, and
not all enrolled members of the party.”

Elections

* Primary/General Accounting: \f a candidate or
committee makes general election expenditures, or
receives general election contributions prior to the
dates of the primary, “acceptable accounting methods”
must be used to “distinguish between” the general and
primary election items. The regulations provide that
“acceptable methods include, but are limited to 1) des-
ignation of separate accounts for each election, and
2) establishment of separate books and records for
each election.”

© Caucus or Convention: If a political party selects
its general election candidate at a caucus or conven-
tion, that event is considered a separate election. A
caucus or convention which does not select the general
election candidate is not a separate election, but is part
of the primary.

* Primaries: For independent or minor party candi-
dates, the primary election ends on the later of either
1) the last day under a State’s law to qualify to appear
on that State’s general election ballot, or 2) the date of
the last major party primary election, caucus, or con-
vention in that State.

° Expenditure Receipts: Records must be kept of
all expenditures, either through keeping receipted
bills, cancelled checks, or a “bill, invoice or other con-
temporaneous memorandum of the last transaction.”

© Written Instrument Identification: The last person
signing a check, money order, or other written instru-
ment, prior to delivery to a candidate or committee, is
considered the contributor.

* Contract, Promise, or Agreement: Only written
“contracts, promises, or agreements” must be reported
as contributions. Oral agreements which result in a
contribution will be reported when the contribution is
actually received.

Reporting Requirements

« In-Kind Contributions: Must be reported and
includes “securities, goods, facilities, equipment, sup-
plies, personnel, advertising, services or other in-kind
contributions provided without charge (except volun-
teer services) or at a charge which is below the. usual
charge for such items.”

The “usual charge” is defined as “the retail price of
that good in the market from which it ordinarily would

have been purchased at the time of its contribution” or
the “prevailing hourly or piece-work rate charged for
such services prevailing at the time such services were
rendered.”

¢ Earmarking: A donor makes a contribution to a
candidate or political committee if he makes any “des-
ignation, instruction or encumbrance” resulting in all
or part of the contribution or expenditure being made
to or on behalf of such candidate or committee.
Earmarking can be “direct or indirect, express or im-
plied, oral or written.” Any candidate or committee
raceiving an earmarked contribution must report the
donor and the recipient. The “conduit” must also report
the transaction.

* Deposit of Contributions: A contribution must be
deposited in the campaign depository within 10 days of
its receipt by the candidate or committee treasurer.

* Illegal Contributions: \f a contribution is received
which “appears to be illegal under the Act,” it must
either be 1) returned to the contributor within 10 days,
or 2) be deposited, with the treasurer noting in writing
any questions about the contribution, taking “all rea-
sonable steps” to determine its validity, and refunding
it if it is “determined to have been invalid.”

© Waiver of Quarterly Reports: No quarterly finance
report is required of a candidate or political committee
in ‘any quarter in which they do not receive or spend
more than $1,000. However, they must “notify the
Commission in writing” the first time this reporting
exemption applies.

© Itemized Contributions: Only contributions of
more than $100 must be itemized in campaign finance
reports. If a candidate or committee chooses to itemize
contributions of $100 or less, it must be done on a
separate list from the required larger contributions,
and the two categories may not be commingled in the
report.

© Presidential Candidate Monthly Reporting: Presi-
dential candidates, and their authorized committees,
must file monthly reports, rather than filing separate
quarterly, pre-election, and post-election reports for
every State primary election. Multicandidate commit-
tees making contributions or expenditures in more
than one State may seek approval from the FEC to file
their reports monthly.

° January Filing Date: Reports covering transac-
tions through Dec. 31 of any year (annual report and
last-quarter report) do not have to be filed until.Jan. 31.

¢ Loan Repayments: Repayment of the principal of
a loan must be reported. However, the reporting forms
will provide for the reporting of loan repayments in a
way to eliminate double-counting of both the “expend-
iture” of the loan money and the subsequent repay-
ment of the loan.

Convention Financing

* Convention Reports: Reports by parties on con-
vention finances must be filed within 60 days following
the convention, but no later than 20 days prior to the
general election.

* Public Financing Reports: Parties receiving
Federal funds for their conventions must file quarterly
reports for every quarter in which they receive or
expend funds.

(Continued, p. 3)



State Filing

* Presidential Candidates: Presidential candidates,
and their committees only have to file reports with a
State officer ‘containing financial transactions pertain-

ing to that State during a reporting period.

POINT OF ENTRY

The revised regulation on the original place of docu-
ment filing, includes the following major provisions:

1.

o

Reports and statements required to be filed by a
candidate for nomination to the office of Repre-
sentative to the U.S. Congress, by the candi-
date’s principal campaign committee and any
other authorized committee of that candidate,
and by multicandidate committees only support-
ing House candidates, shall be filed in original
form with and received by the Clerk of the House
of Representatives, as custodian for the Com-
mission.

. Reports and statements required to be filed by a

candidate for nomination or election to the office
of United States Senator, by the candidate’s prin-
cipal campaign committee, and by any other au-
thorized committee of that candidate, and by
multicandidate .committees only supporting
Senate candidates, shall be filed in original form
with and received by the Secretary of the Senate,
as custodian for the Commission.

Reports and statements required to be filed by a
candidate for nomination or election to the office
of President and Vice President of the United
States, by the candidate’s principal campaign
committee and any other authorized committee
of that candidate, and by all multicandidate com-
mittees except those mentioned above, shall be
filed in original form with the Federal Election
Commission.

OFFICE ACCOUNTS:
EXCESS CAMPAIGN FUNDS

The second revised regulation on “office accounts”
includes these provisions:

1.

Expenditures from the “office accounts” of all
Federal or State officeholders, established “for
the purpose of supporting the activities of a Fed-
eral or State officeholder,” are considered cam-

paign expenditures during the year of the
election.

. Office accounts made up only of publicly appro-

priated money, or accounts used by the office-
holder for personal, non-office activities, are not
subject to the reguiation. The contribution ex-
penditure limits do not apply to accounts used
exclusively to pay for the costs of printing or
preparing material sent under the frank.

. Contributions to an officeholder “for the purpose

of supporting the officeholder’s activities” are
subject at all times to the contribution limits for
the next Federal election ($1,000 per person, or
$5,000 per qualified multicandidate committee).
An exception to this is a contribution designated
in writing to be used exclusively for franking
expenditures.

. Federal officeholders must report office account

contributions and expenditures at the same time
as campaign reports. If the officeholder has a
principal campaign committee, the office ac-
count reports must be filed with that committee,
which will then include the office accounts in its
own reports. A State officeholder must com-
mence filing office account reports upon becom-
ing a candidate for Federal office under the
Federal campaign finance laws.

. Accounts for preparing or printing frankable

material, although not subject to campaign
limits, must nevertheless be reported twice
annually, April 10 and Oct. 10.

. Excess campaign funds expended after a Fed-

eral election, but before the following Jan. 3,
will be considered expenditures with respect to
that election. Transfers of excess campaign
funds to office and franking accounts or to
charitable organizations, will not be considered
campaign expenditures.

aod

The Federal Election Commission held public hear-
ings on Dec. 3 at FEC headquarters. The hearings were
for the purpose of receiving comments from interested
persons on the following proposed regulations:

Public Financing of Conventions (11/4/75-40 FR
51348)

Subpoena Regulations (10/9/75-40 FR 47688)
Advisory Opinion Regulations (11/24/75)

ion} Convention! Matching | AO
REGULATIONS | Disclosure | Allocation Financing | Funds Entry Subpoenas] §439a Procedures
Federal Register
Publication 11/4/75 Not Re- Not Re-
9/29/75 11/5/75 | Correction:|10/9/75 |published | 10/9/75 published |11/24/75
(Close of Public 11/11/75
‘Comment - 30 days|
after this date)
FEC Hearings 10/21, 22, |11/19, 21 | 12/3 11/4,5 |None 12/3 None 12/3
24
FEC Adoption 11/25 11/25 11/20.
Congressional Transmittal Transmittal Transmittal
Action 12/3 12/2 12/22