FEDERAL ELECTION COMMISSION

Volume 10, Nurnb

CLEARINGHOUSE

12 State Campaign Finance Laws Updated

INFORMATION

12 New Telephone Device For Hearing Impa

conti

PRESIDENTIAL ELECTIONS

3 General Election Funds to Democratic Ti

3 Major Party Convention Funding Increase

3 Primary Matching Fund Payments

4 First Presidential Primary Audit Release

4 1980 Repayment Determinations Reasses

800 LINE

5 Support for Publicly Funded Presidential

Nominees

TABLE OF CONTENTS

REGULATIONS

1 Testing the Waters

2 Proposed Rules Sent to Congress

The timing of the activities vis-a-vi

election or the individual's announcemen

his/her candidacy;

The duration of the activities; and

The amount of money raised or spent for 

activities.

7 ADVISORY OPINIONS

COURT CASES

10 The Sierra Club v. FEC

10 Holton v. FEe

11 National Rifle Assoc. v. FEC

11 Hettinga v. FEC

11 Hopfmann v~ FEG

11 New Litigation

")

The revised rules include new examples of ac

ties that would indicate an individual had dec

to become a candidate and was no longer tes

the waters. For example, an individual would 

considered a candidate if:

The individual made, or authorized, wr

or oral statements that referred to him

as a candidate for a particular office; or

The individual conducted activities sho

before an election or over a protra

period of time.

September 1984 Washington DC 20463

Proposed ReguIations

The Commission seeks comments on three

major areas of proposed revisions to the current

regulations.

Comments or questions on the proposed revisions

sho~ld be submitted to Ms. Susan E. Propper,

Assistant General Counsel, by October 1, 1984.

Ms. Propper may be contacted at 202/523-4143 or

by writing to the Commission at 1325 K Street

N.W., Washington, D.C. 20463. '

FEC SEEKS COMMENTS ON

TESTIlfG-THE-WATERS REGULATIONS

On July 31, 1984, the Commission published a

notice of proposed rulemaking* in the Federal

Register, which seeks comments on possible revi-

~ions to .F~~ Regulations on "testing the waters,"

i.e., activtttes undertaken by an individual to test

the feasibility of a potential candidacy (49 Fed.

Reg. 30509). See 11 CFR 100.7(b)(l), 100.8(@ffi

and 101.3. For .a summary of current testing-thewaters regulations and related advisory opinions,

see the March 1984 Record, p. 3.

*The Commission had published an advance

notice of proposed rulemaking on January 17,

1984. See 49 Fed. Reg. 1995.

Scope of Permissible Activities. Concerns have

been expressed that the agency's interpretation of

the testing-the-waters provisions has included activities beyond those originally intended. Furthermore, certain legitimate testing-the-waters activities (e.g., polling and travel) could also be

c?nsidered campaign activities, depending on the

Circumstances under which they are conducted.

~o clarify the scope of testing-the-waters activities, the Commission's proposed rules include factors that the Commission might consider in determining on a case-by-case basis whether certain

activities are permissible under the exemption.

Under the proposed rules, the Commission could

consider not only the type of activity being conducted, but also such factors as:

The extent to which an individual conducted

these activities;

I

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2

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

D.C. 20463. Commissioners are: Lee Ann Elliott, Chairman; Thomas E. Harris, Vice Chairman;

Joan D. Aikens; Danny Lee McDonald; John Warren McGarry; Frank P. Reiche; William F.

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

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

FEDERAL ELECTION COMMISSION

Volume 10, Number 

retained in the current regulations. The Commi

sion also welcomes comments on alternative ap

proaches to the issues raised in its rulemakin

notice. For example:

Should individuals who test the waters b

considered "candidates" once they raise o

spend more than $5,000 for testing-the

waters activities?

Should funds received and spent for testing

the-waters activities be exempt from repor

ing until the Individual decides to become 

candidate, even if they are otherwise consid

ered "contributions" and "expenditures" sub

ject to the election law?

THREE SETS OF PROPOSED RULES

SENT TO CONGRESS

During JUly and August 1984, the Commissio

transmitted to Congress three sets of propose

rules. The rules governing repayments by publicl

funded Presidential candidates and access to FE

information may be prescribed 30 legislative day

after their transmittal to Congress. The rule

governing handicapped persons' access to FE

programs may be prescribed 30 calendar day

after their SUbmission. The final versions of th

proposed rules were published in the Federal Reg

upon

ister.

request

(See citations

from

below.)

the Public

Copies

Communication

are availabl

Office. Call 202/523-4068 or, toll free, 800/424

9530.

Repayments by Publicly Funded

Presidential candidates

On August 17, 1984, the Commission sub

mitted to Congress revised rules governing th

repayment of public funds used by publicly funde

Presidential candidates for nonqualified campaig

expenses. 11 CFR Parts 9007 and 9038. (For 

sum mary of these proposed rules, see page 1 o

the August 1984 Record.) The proposed rules wi

make the FEC's repayment formula consisten

with recent decisions by the U.S. Court of Ap

peals for the D.C. Circuit in Kennedy for Pres

dent v. FEC and Re an for President v. FEC

(See page 4, for a summary 0 the court's rulings

Rather than requiring full repayment o

nonqualified expenses, the revised repayment for

mula will be based on the ratio of federal funds t

total funds received by the candidate (both prl

vate and federal funds). The revised rules wer

published in the Federal Register on August 22

1984. (49 Fed. Ref{. 33225)

September 1984

The revised rules also incorporate two examples

of activity indicating candidacy which are contained in the current rules: Le., the use of public

political advertising to publicize the individual's

campaign and the amassing of funds to be used

after candidacy is established.

Application of Contribution Limits and Prohibitions for Testing-tile-Waters Activities. The current regulations provide that funds received or

expended for testing the waters become reportable contributions and expenditures if the individual becomes a candidate. While the regulations

are not explicit about the application of contribution limits and prohibitions, the Commission has

interpreted the law to mean that donations for

testing the waters may be subject to such restrictions retroactively. In AO 1982-19, the Commission determined that an individual could accept

donations to test the waters which would be

considered excessive or prohibited contributions

under the Act. If the individual became a candida te, however. he or she had 10 days to refund

any unlawful contributions received during the

testing-the-waters period.

The Commission welcomes suggestions for other

factors that could be used to determine whether

an individual was merely testing the waters or

was actively campaigning.

Alternative Proposols

The Commission welcomes comments on

whether the testing-the-waters concept should be

Minor Technical Amendments. The proposed rules

make clear that the provision governing the contribution exemption (l00.7(b)(l}) applies only to

"funds received" for testing the waters and that

the provision governing the expenditure exemption (l00.8(b)(l» applies only to "payments made"

for testing the waters. Both provisions cross reference the reporting requirements for individuals

who subsequently become candidates. (See 11

CFR 101.3.)

Some concerns have been raised that the use of.

impermissible funds for testing-the-wa ters aetivities could increase the potential for circumvention of the Act's limits and prohibitions on

contributions. Under tile proposed rules, therefore, .the contribution limits and prohibitions of

'the Act would apply to funds used for testing tile

, wat~rs.
FEDERAL ELECTION COMMISSION

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September 1984

Handicapped Persons' Access to FEC Programs

On August 17, 1984, the agency also submitted to Congress regulations which will implement and enforce section 504 of the Rehabilitation Act of 1973, as amended. 11 CFR Part 6. The

proposed rules prohibit discrimination on the basis

of handicap in FEC programs and activities. (For

a summary of these rules, see page 2 of the

August 1984 Record.) They were published in the

Federal Register on August 22, 1984. (49 Fed.

Reg. 33206)

Access to FEe Information

On July 26, 1984, the Commission transmitted to Congress revised regulations governing

information made available to the public by the

FEC's Public Records Office or through the Freedom of Information Act (FOIA). 11 CFR Parts 4

and 5. (For a summary of these regulations, see

page 1 of the July 1984 Record.) The revised

regulations update current fee schedules, change

the billing procedure for microfilm and computer

tape requests, and clarify that the FEC does not

charge for staff time devoted to duplicating information made available under the FOIA. They

were published in the Federal Register on JUly 31,

1984 (49 Fed. Reg. 30458).

Although the rules implementing the FOIA do not

have to be submitted to Congress, the Commission will prescribe both sets of rules at the

same time to maintain uniform fee schedules for

all FEC documents.

FEC CERTIFIES GENERAL ELECTION

FUNDS TO DEMOCRATIC TICKET

On July 26, 1984, the Commission approved

payment of $40,400,000 in federal funds for the

general election campaign of Democratic Presidential nominee Walter F. Mondale and his Vice

Presidential running mate, Geraldine A. Ferraro.

A $40,400,000 grant will also be made available

upon request to the Republican Presidential

ticket, following the Republlcan national convention in August.

Mr. Mondale and Ms. Ferraro had requested the

funding in a July IBth letter to the Commission.

In that letter, the candidates agreed to abide by

the overall spending lim it, to use only public funds

for the campaign and to comply with other legal

requirements.

By law, the Presidential nominee of each major

party is entitled to full public financing of the

3

Volume 10, Numb

general election campaign ($20 million plu

cost-of-living adjustment). Major party ca

dates accepting public financing for their gen

election campaigns are subject to a spending l

of $40,400,000 (the amount of the grant)

addition, the use of the nominee's personal fu

is limited to $50,000. Private funds, subjec

contribution limits, may be raised and spent 

legal and accounting costs incurred solely 

ensure compliance with the Act.

MAJOR PARTY CONVENTION FUNDING

INCREASED

On July 26, 1984, the Commission appro

technical amendments to its regulations govern

the public financing of Presidential nomina

conventions. 11 CPR Parts 9008.1(a) and 900

(a). The revised rules follow recent amendm

to 26 U.S.C. S9008, which:

Increase the convention entitlement avail

to each major party convention commi

from $3 million, plus a cost-of-living adj

ment (COLA), to $4 million, plus COLA; a

Limit spending by publicly funded major 

minor party convention committees to 

amount of the increased grant.

Under the new amendments, the actual enti

ment available to each major party conven

committee is $8,080,000. On July 12, 1984, 

day after the amended law became effective, 

Commission certified an additional $2,020,000 

the Republican and Democratic convention c

mittees. The Commission had already certi

$6,060,000 to each major party by February 

1984.

Since the conforming amendments to the reg

tions were not a substantive rule representing 

FEC policy decision, they were not published 

public com ment but became effective upon pu

ca tion in the Federal Register on JUly 31, 1

(49 Fed. Reg. 30461). Copies of the Federal R

ister notice may be obtained from the Fed

Election Commission.

PRIMARY MATCHING FUND PAYMENTS

TO THIRD PARTY CANDIDATE

On JUly 26, 1984, Ms. Sonia Johnson bec

the first third-party Presidential candidate 

gible to receive primary matching funds since 

FEC began administering the public funding p

gram in 1976. On the same day, the Commis

certified $140,186 in matching fund payments 

Ms. Johnson.

During August, the Commission also certified 

ditional primary matching fund payments for 

Johnson and other eligible Presidential candida

contin
FEDERAL ELECTION COrvlIV1ISSI01\J

bringing total funds certified to the II Presidential primary candidates to $32,069,823.15.

The summary chart below provides cumulative

information on certifications of primary matching

funds made between January I and August 22,

1984.

Volume 10, Numbe

* For summaries of the Kennedy suit (CA N

83-1521) and the Reagan suit (CA No. 83-166

see p, 6 of the July 1984 Record.

To make its regulations consistent with t

court's decisions, the Commission revised t

rules governing repayment of public funds (

CPR Parts 9007 and 9038) and submitted them 

Congress on August 22, 1984. (See page 2.)

In its rulings on the Kennedy and Reagan sui

the appeals court had determ ined that, instead 

requiring full repayments of nonqualified ca

paign expenses by the campaigns, the Commissi

could only require a repayment of the portion 

federal funds used for the nonqualified expenses

FEC REASSESSES 1980 REPAYMENT

DETERMINATIONS

On July 12, 1984, in response to rece

decisions

District of

by

Columbia

the U.S.

Circuit

Court

in Kennedy for

of Appeals for

Pre

t

ident v. FEC and Reagan for President v. FEC

the Commission approved a recommendation 

the General Counsel to revise FEC repayme

determinations made with regard to nonqualifi

campaign expenses incurred by the Reagan a

Kennedy campaigns during the 1980 primari

(Both campaigns had received primary matchi

funds for their 1980 primary carnpaigns.) In 

second action, the Commission decided not 

reconsider repayments it had required of fi

other publicly funded Presidential campaigns a

tive in 1980 primaries.

Presidential primary campaign. The report cove

ed the period from the Askew committee's ince

tion on August 6, 1981, through February 2

1984, when Governor Askew withdrew his bid f

the Democratic Party's Presidential nominatio

(The Askew campaign became ineligible for pub

funds on March 1, 1984.)

An analysis of the Askew campaign's recor

showed net outstanding campaign obligations 

$152,900.70. Under FEC Regulations, the Aske

campaign may continue raising private contrib

tions to be matched with federal funds, provid

the contributions are received and deposited b

fore December 31, 1984. The campaign may u

these additional matching funds to help retire 

debts and to wind down the campaign.

Copies of the Askew campaign's audit report a

available at 5 cents per page from the Comm

sion's Office of Public Records, 1325 K Stree

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

4

Total Funds

Certified

$ 922,642.71

1,846,230.95

3,052,090.59

4,478,698.92

821,599.85

2,270,733.99

185,789.15

496,468.27

570,076.71

7,587,756.68

10,100,000.00

9

15

13

17

9

12

3

6

8

20

7

September 1984

The Commission noted no material problems with

the campaign records of the Askew for President

Committee, the principal campaign committee

for former Florida Governor Reubin Askew's 1984

*Includes requests made after the candidate's

initial request for matching fWld eligibility.

**Ms. Johnson is seeking the Presidential

nominations of the Citizens Party, the California

Peace and Freedom Party and mrious independent

parties.

Askew, Reubin (D)

Cranston, Alan (D)

Glenn, John (D)

Hart, Gary (D)

Hollings, Ernest (D)

Jackson, Jesse (D)

Johnson, Sonia (Cp**)

LaRouche, Lyndon (D)

McGovern, George (D)

Mondale, Walter (D)

Reagan, Ronald (R)

Primary Matching Fund

Certification Activity

Name of Number of

Candidate Requests*

FIRST PRESIDENTIAL PRIMARY AUDIT

RELEASED

On August 2, 1984, the Commission released

the first audit report for the 1984 Presidential

primary campaigns, a report on the publicly funded Askew for President Committee. The Commission expects to issue audit reports for all the

publicly funded 1984 Presidential primary campaigns by early 1985. In addition to audit findings

and recommendations, each report will include

any initial repayment determinations made by the

FEC. The FEC will also issue addenda to the audit

reports as circumstances warrant and as additional information on the campaigns becomes available. Addenda may include, for example, information based on follow-up fieldwork or on FEC

repayment determinations which are appealed by

the campaigns.
FEDERAL ELECTION COMMISSION Volume 10, Numb

*A publicly funded Presidential candi

may establish a separate Legal and Accoun

Compliance Fund to pay costs of complying 

the Act. Contributions to the fund are Subjec

the limits and prohibitions of the Act. See 11 C

9003.3(a).

What else may an individual do to support 

Presidential nominee of his or her choice?

An individual may make his or her own i

pendent expenditures to advocate the candid

election (or to oppose the election of ano

contin

What other types of volunteer activities are p

missible?

An individual may:

Conduct a campaign activity on behalf of 

nominee in his/her home, or in a church 

community room used on a regular basis 

members of the community for noncom m

eial purposes. Costs of invitations, food 

beverages provided by the volunteer may 

however, exceed $1,000. 11 CFR 100.7(b

and (6), 100.8(b)(6) and (7).

Travel on behalf of the candidate, provi

the costs for travel do not exceed $1,000

CFR 100.7(b)(8).

What may an individual do to support the P

idential nominee of his or her ehoice?

Individuals may not make direct contribut

to major party candidates who accept public fu

ing for the general election. An individual m

however, support the major party Presiden

candidate of his or her choice by contributing 

to $1,000 to the candidate's compliance fund.

addition, an individual may make direct con

butions of up to $1,000 to any other type 

Presidential candidate, including a minor or 

party candidate who accepts partial or re

active public funding.

May an individual volunteer his or her serv

(not compensated by anyone) to the candida

campaign or to the candidate's political party?

Yes. 11 CFR 100.7(b)(3).

SUPPORT FOR PUBLICLY FUNDED

PRESIDENTIAL CANDIDATES

The Office of Public Communications 

received many inquiries about how individu

political parties, corporations and unions 

support Presidential candidates who accept pu

financing for their general election campai

The following information responds to some 

these questions.

5

September 1984

*For the appeals court's rulings, see Carter/

Mondale Presidential Comm. v. FEC, 711 F.2d 279

(D.C. Cir, 1982), and Citizens for LaRouche v.

PEC, No. 83-0373 (D.C. Cir., Jan. 31, 1984).

Reagan and Kennedy 1980 Campaigns

Using the repayment formula specified in its

proposed regulations, the Commission will recalculate repayments required of the Reagan and

Kennedy 1980 campaigns. By applying the proposed formula to the committees' repayments

before the amended regulations are prescribed,

rather than waiting until after they are prescribed the Commission will allow the committees to , .. resolve repayment issues, make any remammg

repayments and terminate as quickly as possible.

Based on the General Counsel's recommendation,

the Com mission decided not to reconsider repayment determinations it had made with regard to

the five campaigns. In support of the finality of

these determinations, the General Counsel cited

the legal principle of claim preclusion: "It is a

long-standing legal principle that a party who has

had a chance to litigate a claim before a proper

tribunal ought not to have another chance to do

so." Moreover, with regard to the two campaigns

that had challenged the FEC's repayment determinations, the Commission noted that "there is. a

substantial question as to whether the Cornmission is free to alter the decislonlsl reached by the

Court of Appeals." Finally, the General Counsel

pointed out that, since several campaigns had

terminated, any refunds resulting from readjustments of their repayments would be impractical.

Of the five campaigns, only the LaRouche and

Carter campaigns have sought reconsiderations of

the FEC's repayment determinations in light of

the court's rulings on the Kennedy and Reagan

suits.

Other Publicly Funded 1980 Campaigns

The five other publicly funded campaigns

that were required to make repayments for nonqualified expenses in 1980 primaries made full

repayments. They were the principal campaign

committees for John Anderson, Jerry Brown,

Robert Dole, Lyndon H. LaRouche and former

President Carter. (The LaRouche and Carter campaigns had unsuccessfully challenged FEC repayment determinations in a federal appeals court. *)

1---

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septemoor 1984 FEDERAL ELECTION COMMISSION

Presidential candidate), provided the expenditures

are not made "with the cooperation or with the

prior consent of, or in consultation with, or at the

request or suggestion of, a candidate or agent or

authorized committee of such candidate." 11 CFR

109.1(a). The individual making independent expenditures must report them when they exceed

$250 per calendar year. 11 CFR 109.2(a).

May an individual oontribute to the Presidential

nominee's party?

Yes. He or she may contribute up to $5,000

to a state or local party committee and up to

$20,000 to the national committee of the candidate's political party.·

What role maya Presidential candidate's political

party play in supporting the candidate if he or she

accepts public funding?

A national party committee or its agents may

make special "coordinated party expenditures" to

promote the election of its Presidential nominee

in the general election. These expenditures are

subject to a spending limit based on the national

voting age population ($6,924,082.40 in 1984).

Although these expenditures may be made in

cooperation with the candidate, the party committee -- not the candidate -- must actually

make and report them. 11 CFR 110.7.

State and local party committees may engage in

certain activities using volunteers that also benefit the Presidential nominee. They may, for example, produce certain campaign materials (e.g.,

pins and bumper stickers) which are used in connection with volunteer activities. They may also

distribute a sample ballot identifying the nominee

and a minimum of two other candidates. The committees may also conduct voter registration and

get-out-the-vote drives on behalf of the nominee.

All such activities are subject to specific provisions of the Act and FEC Regulations. 11 CFR

100.7(b)(9), (IS) and (17).

May corporations and labor organizations sponsor

oommunications pertaining to Presidential candidates in the general election?

Yes. Corporations and labor organizations

may sponsor certain partisan and nonpartisan

communication activities which pertain to Presidential candidates -- regardless of whether the

candidates accept public funding for their general

election campaigns. These activities are subject

to the specific requirements of Commission Regulations. (See 11 CPR Part 114.)

Partisan Communications. Corporations and labor

organizations may support, endorse or oppose

*Total contributions by individuals in connection with federal elections may not exceed

$25,000 per year.

6

Volume 10, Numbe

Presidential candidates, for example, by publi

ing printed materials or setting up a phone ba

on behalf of a candidate. In the case of a corpo

tion, these communications must be limited to t

corporation's stockholders, executive and admin

trative personnel and their families. In the case 

labor organizations, partisan communicatio

must be limited to the labor organization's me

bership, executive and administrative personn

and the families of both groups. 11 CFR 114

Moreover, expenditures for these internal co

munications may be reportable. 11 CPR 100.8

(4).

Nonpartisan Communications. Corporations a

labor organizations may also sponsor certain no

partisan communications made to the gene

public, provided these communications do n

favor or oppose any candidate or political par

and otherwise meet the requirements of Comm

sion Regulations. 11 CFR 114.4. For examp

following FEC rules, a corporation or labor orga

ization might publish voting records and vo

guides, distribute official voting information, p

for voter registration ads, or sponsor voter driv

and candidate debates.

May corporations or labor organizations pay f

legal and accounting services rendered to a Pre

dential campaign?

Yes. Corporations and labor organizations 

well as partnerships) may pay for legal and a

counting services rendered by their employees 

Presidential candidate committees, provided t

services are rendered solely to ensure complian

with the Act. Costs incurred by the regular e

ployer for these services must be reported by t

committee in accordance with II CFR 104.3(

11 CFR 100.7(b)(l4).

How can I get more information?

Should you have any questions or wish 

order the FEC's free publication, Public Fundi

and Presidential Elections, contact the Pub

Comrnunieations Office, 1325 K Street, N.W

Washington, D.C. 20463. In Washington, call 52

4068; out-of-town, call toll free 800/424-9530.
1984-35 Contributions to candidate who switches

campaign from House to Senate_ to

House. (Date made public: July 17, 1984;

Length: I page)

ADVISORY OPINION REQUESTS

The following chart lists recent requests for

advisory opinions (AORs). The full text of each

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

Volume 10, Numb

AOR Subject

AO 1984-24: PAC's Purchase of Goods and

Services from Parent Corporati

The Sierra Club Committee on Political Educ

(SCCOPE) is the separate segregated fund o

Sierra Club (the Club), a tax-exempt, nonp

corporation that advocates environmental is

SCCOPE may not use the staff an~ ~h; faci

of the Club for election-related acttvities, ev

SCCOPE reimburses the Club at a fair m

value.

SCCOPE planned to make in-kind contributio

approximately 70 Congressional candidate

1984 elections by purchasing from the Club 

providing to the candidates: a) the service

approximately 20 Club employees, and b) th

of Club facilities incidental to the emplo

services. (The Club's employees would provid

candidates with expertise on environmental i

and perform other campaign servtees.) Neith

the alternative methods proposed by SCCOP

reimburse the Club for the employees' ser

and for Club facilities is permissible unde

Act and FEC Regulations. Although, under 

cont

ADVISORY OPINIONS: SUMMARIES

An Advisory Opinion (AO) issued by the 

mission provides guidance with regard to 

specific situation described in the AOR. 

qualified person who has requested an AO 

acts in accordance with the opinion will no

subject to any sanctions under the Act. O

persons may rely on the opinion if they 

involved in a specific activity which is ind

guishable in all material aspects from the act

discussed in the AO. Those seeking guidanc

their own activity, however, should consul

full text of an AO and not rely only on 

summary given here.

ALTERNATE DJSPOSmON OF

ADVISORY OPINION REQUEST

AOR 1984-35 (See above.) In a letter i

on July 24, 1984, the General Counse

formed the requester that his request di

qualify for advisory opinion consideration 

cause it did not propose a specific activi

the requester or by the candidate and 

mittee he represents. See 2 U.S.C. §437

11 CPR 112.l{b).

1984-40 Spending by national party comm

for t.v. ad promoting the party's pol

message. (Date made public: Augus

1984; Length: 8 pages, plus 4-page 

plement)

7

FEDERAL ELECTION COMMISSION

Ceilingfs) on contributions by PACs to

candidate who switches campaign from

House to Senate to House. (Date made

public: August 3, 1984; Length: 2 pages)

Congressman's use of interest group's

mailing list to clarify his position ?n

legislative issue. (Date made publics

August 9, 1984; Length: 3 pages, plus

l u-page supplement)

Employee services obtained by PAC

through advance payments to parent organization or dual employment plan.

(Date made public: August 2, 1984;

Length: 6 pages)

Corporation's solicitation of solicitable

personnel of two companies (and the

subsidiaries of one) in which the corporation has ownership and controlling interests. (Date made public: July 18,

1984; Length: 3 pages)

Contribution check dated before but received after primary: application of

limits; definition of debt. (Date made

public: July 3, 1984; Length: 2 pages)

Subject

1984-38

1984-39

1984-37

1984-36

Fundraiser for trade association PAC

paid by the association's allied members.

(Date made publics July 11, 1984;

Length: 2 pages, plus 77-page supplement)

1984-34 Contribution eeilingfs) applied to contributions made by 1980 candidate and by

his principal campaign committee to

1984 candidate. (Date made public: JUly

17, 1984; Length: I page, plus 2-page

supplement)

1984-32

1984-33

September 1984

AOR

I

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September 1984 FEDERAL ELECTION COMMISSION

proposed plans, SCCOPE would ultimately pay for

the services, the Club's initial financing of the

services would result in prohibited corporate contributions to the candidates.

Under both a reimbursement payment plan and an

advance payment plan proposed by SCCOPE, the

Club would initially compensate employees for

campaign-related services and pay the costs of

Club facilities used for the services. Subsequently, the Club would determine the usual and normal

charge for: a) the portion of an employee's compensation attributable to the political work, and

b) the incidental use of Club facilities for the

work. The Club would transfer that amount (plus a

7.5 percent surcharge) from its separate segregated fund to its general treasury fund.

Under the reimbursement plan, SCCOPE would

keep a log of employee services and Club facilities used for campaign-related activities.

SCCOPE would then reimburse the Club for these

services and goods within 30 days of their provision.

Under the advance payment plan, the Club would

establish a special escrow account. SCCOPE

would pay the Club for campaign-related services

and goods by periodically forwarding funds from

its political account to the Club. The Club would

then place the funds in the escrow account and

withdraw them monthly to pay for the campaignrelated goods and services. The amount of funds

maintained in the escrow account would be sufficient to cover the cost of SCCOPE's estimated

use of the Club's employees and facilities.

Under the Act and FEC RegUlations, an incorporated organization may pay the costs of establishing, administering and soliciting contributions

to a separate segregated fund Which, in turn, may

disburse these con tributions for federal electionrelated activities. On the other hand, the incorporated organization may not use its general

treasury funds to make in-kind contributions to

federal candidates (l.e., provide services and

goods to candidates at no charge or at less than

the usual charge). Commission Regulations define

such prohibited contributions to include: services

provided by employees who are compensated by

their organization; the use of corporate facilities

incidental to the employees' services; other services and goods provided by the corporation at

less than the usual charge and advances made by

the corporation to a political committee or candidate. 2 U.S.C. S441b; 11 CPR IOO.7(a)(Omn and

(a)(3); AOs 1975-14, 1~75-94, 1976-70, 1978-34

and 1978-45.

Since each of SCCOPE's proposed payment plans

involves an initial disbursement of the Club's

treasury funds to pay for goods and services

8

Volume 10, Numbe

rendered to the candidates, these advances wou

result in prohibited contributions from the Club t

the candidates and to SCCOPE, regardless o

whether SCCOPE reimbursed the Club.

The Commission noted that Sections 114.9 an

114.10 of FEC Regulations did not authoriz

either proposed payment plan. Specifically, Sec

tion 114.9 governs only the use of corporate (an

labor) facilities and applies to stockholders an

employees volunteering their time and to othe

persons using the facilities, such as candidates. 

does not apply to corporate employees receivin

compensation for their election-related service

Section 114.10, concerning the extension of cred

and debt settlement, applies exclusively to com

mercial transactions undertaken by corporation

in their ordinary course of business. It is no

applicable here.

Since the Commission concluded that neither pay

ment plan was permissible, it did not addres

three questions concerning the advance paymen

plan: I) the reporting and recordkeeping require

ments of the plan, 2) the level of funding require

for the plan's escrow account and 3) the transfe

of excess funds in the account back to SCCOPE.

The Commission did not comment on the permis

sibility of an alternative payment plan unde

which SCCOPE would become a dual employer o

Club employees working in campaigns. Question

with regard to the plan were not set forth in th

Club's advisory opinion request. Chairman Le

Ann Elliott filed a dissenting opinion. (Dat

issued: July 13, 1984; Length: 10 pages, includin

dissent)

AO 1984-27: Presidential Primary campaign's

Conversion of Credit card

Contributions to

Matchable Contributions

The LaRouche campaign, Mr. Lyndon H

LaRoueha's principal campaign committee tor hi

publicly funded Presidential primary campaign

may convert nonmatchable contributions made b

credit card to matchable contributions (Le., con

tributions made by individuals that may b

matched for primary matching funds), provided:

The campaign follows all the conversion pro

cedures set forth in its advisory opinion re

quest, including the submission to the FEC

of: a) all the proposed information from con

tributors verifying the conversion of thei

contributions to matchable contributions, an

b) copies of checks that have been refunde

to contributors.

The campaign includes in verification form

sent to contributors language specified by th

Commission which would make clear the do

nors' intent to support Mr. LaRouche's pri

mary campaign.
FEDERAL ELECTION COMMISSION

•

,

September 1984

The campaign meets all other requirements

of the Primary Matching Payment Account

Act.

Under the Primary Matching Payment Account

Act and FEC Regulations, Presidential primary

campaigns that qualify for primary matching

funds may submit up to $250 of the matchable

contributlonts) received from each contributor.

Contributions submitted by a campaign must be in

the form of a "written instrument": i.e., a check

written on the contributor's personal, escrow or

trust account; a money orderj or any similar

negotiable instrument. 11 CFR 9034.2(b). Moreover, the contribution must be made with the

intent to support the candidate's primary campaign. 11 CFR 9034.3(0.

Since the LaRouche Campaign's credit card contributions did not meet these requirements, the

campaign proposed special procedures for refunding $250 of each donor's credit card contribution

and for accepting comparable contributions, resubmitted in matchable form by the same donors.

The LaRouche Campaign would handle these

transactions in one of two ways, depending primarily on whether the donor had already con tributed up to or close to the $1,000 limit.

Category I Donors

These contributors would receive a refund of

$250 of their credit card contributions before

making an additional, matchable contribution because: a) they had already reached their $1,000

contribution limit, b) they might exceed the limit

if they made additional contributions before receiving a refund, or c) they had specifically

requested that the transaction be handled in this

way.

At the time the campaign resubmitted matchable

contributions to the FEC it would include a verification form from each donor providing detailed

information about the contribution and verifying

the receipt of the refund.

The LaRouche Campaign would segregate the

converted contributions in this category from all

the other contributions submitted for matching

funds.

category n Donors

The contributors in category II consisted of:

a) individuals who could make written contributions before receiving refunds of their credit card

contributions without exceeding their $1,000

limit, or b) donors who were willing to make

written contributions of up to $250, provided they

immediately received refunds of their credit card

contributions, equal to their written contributions.

9

Volume 10, Numb

Along with the converted contributions, the c

paign would provide the FEC with verifica

forms stating, among other things, the do

would receive a refund immediately following 

campaign's receipt of his or her matchable con

bution. (Date issued: July 13, 1984; Length

pages)

AO 1984-28: Coattail Support--Endorsement o

President Included in House

candidate's Brochures

Costs incurred by Mr. Alton H. Starling's Ho

campaign (the campaign) for campaign broch

that include endorsements of President Rea

would not be considered contributions to, or 

penditures on behalf of, the President. Und

special "coattail exception" contained in the 

and FEC Regulations, costs incurred by a ca

date's campaign for campaign materials that 

clude information on, or any reference to, ano

candidate for federal office, are not consid

contributions or expenditures, provided:

The campaign materials are used in con

tion with volunteer activities;

No public political advertising is used; and

Materials are not distributed by direct m

In this context, a "direct mailing" means 

mailingts) by commercial vendors or mail

made from lists which are not developed 

the candidate." 2 U.S.C. §43 I(S)(B)(xi)

CFR 100.7(b)(I6) and 100.S(b)(I7).

The campaign brochures prepared and distrib

by the Starling campaign would meet these 

quirements. Volunteer campaign workers will 

tribute the brochures to the public by, for 

ample, passing them out door to door. Moreo

the campaign will use a mailing list it has 

veloped and will not use the services of a c

mercial vendor. Commissioners Joan D. Ai

and Lee Ann Elliott filed a joint concurring o

ion. Commissioner Thomas E. Harris filed a s

rate concurring opinion. (Date issued: Augus

1984; Length: 8 pages, Including concurring o

ions)

AO 1984-29: Honorarium's Travel

and Subsistence Exemption

Extended to SelUltor's Family

If Senator Ted Stevens' older daughter acc

panies him on a speaking engagement as a s

aide, her travel and subsistence expenses may 

paid by the sponsoring organization and excl

from the honorarium paid to Sen. Stevens. On 

other hand, if Sen. Stevens' wife and you

daughter (two and one-half years old) accomp

him, only his wife'S expenses may be excl

from the honorarium; payment by the sponso

organization for his younger daughter's expe

would be counted as part of the honorar

contin
FEDERAL ELECTION COMMISSION

HOLTON Y. FEe

On July 16, 1984, the U.S. District Court 

the District of Columbia dismissed of its o

accord a complaint filed by Samuel Pea

Holton, II, against the Commission (Holton 

FEC; CA No. 84-2010. The court found t

complaint to be "completely devoid of merit." 

his complaint, Mr. Holton had asked the court 

enjoin the FEC from validating any votes cast 

the November 1984 Presidential general electi

by registered voters in Ohio.

Volume 10, Numbe

THE SIERRA CLUB Y. FEC

On August II, 1984, the U.S. District Co

for the District of Columbia issued an or

dismissing a suit filed by the Sierra Club agai

the FEC on July 31, 1984. (The Sierra Club 

FEC; CA No. 84-2354) The court ruled that 

case was not ripe for its consideration and t

the Club had not exhausted the administrat

remedies available to it before filing suit.

In the suit, the Sierra Club and its separ

segregated fund, the Sierra Club Committee 

Political Education (SCCOPE), had challenged 

FEC's construction and applieation of 

U.S.C. S441b in an advisory opinion the agen

had issued to the Sierra Club on JUly 13, 1984. 

the opinion, AO 1984-24, the Commission 

jected the two financing methods proposed by 

Club for selling its goods and services to SCCO

as part of SCCOPE's in-kind contribution progr

for federal candidates. (For a summary of 

1984-24, see p, 7.)

The

that:

Sierra Club had asked the court to decl

-- The election law permits the Club to prov

goods and services to SCCOPE for use 

SCCOPE's in-kind contribution program, p

vided: a) SCCOPE makes payments in a

vance to an escrow account or reimburses 

Club within a commercially reasonable tim

and b) the goods and services are purchas

at fair market value.

Section 441b, both on its face and as appl

to plaintiff's activities, violates the Fi

Amendment by abridging plaintiff's freed

of association and by being unconstitutiona

vague.

Advisory Opinion 1984-24 is contrary to l

and to the First and Fifth Amendments.

Plaintiff had also asked the court to enjoin t

FEC from commencing or continuing any enfor

ment proceedings designed to prevent SCCO

from using Sierra Club goods and services for 

in-kind contribution program.

10

September 1984

AD 1984-30: Affiliated Committees' Independent

Expenditures on Behalf of General

Election Candidates to Whom They

Haye Made In-Kind Contributions

in Primaries

Freeze Voter '84, a nonconnected, rnulticandidate

political committee, and its 15 affiliated committees may not make independent expenditures in

the general election on behalf of candidates to

whom they have already made in-kind contributions in the primaries. The committees' support in

the primaries (e.g., donation of paid staff for

campaign activities) would compromise the independence of their proposed general election

spending. The expenditures would instead be considered reportable, in-kind contributions, subject

to the election law's contribution limits. 2 U.S.C.

§44Ia; 11 CFR 109.l(c).

Under the Act and FEC Regulations, a federal

officeholder may accept an honorarium of up to

$2,000 for a speech or appearance. 2 U.S.C. S44li;

11 CFR 110.12{a) and (b). The sponsoring organization may also pay for, and exclude from the

honorarium, those travel and subsistence expenses

incurred by the officeholder, his or her spouse or

a staff aide. In this case, Sen. Stevens' older

daughter would qualify for the exemption because

she would be acting as a staff aide. His younger

daughter would not, however, be covered under

the exemption. (Date issued: July 13, 1984;

Length: 2 pages)

The Act and FEC Regulations define an independent expenditure as an expenditure by a person

expressly advocating the election or defeat of a

clearly identified candidate which is made without cooperation or consultation with the candidate or any authorized committee or agent of

his/her campaign. 2 U.S.C. §431(17); 11 CFR

100.16. Commission Regulations specify that

spending is not considered independent if it is

based on "information about the candidate's plans,

projects or needs provided•••by the candidate, or

by the candidate's agents, with a view toward

having an expenditure made." 11 CFR I09.I{b)(4)

(i)(A). Moreover, in determining whether an ex-

-penditure is independent, the Commission has

declined to treat a primary and a general election

as distinct events when they are held for the same

office in the same election cycle. AO 1979-80. In

this case, spending in the general election would

stem from prior arrangements and information

about the candidates' plans, projects or needs.

Accordingly, the in-kind contributions made in

the primary elections raise the presumption that

the committees' general election expenditures

would not be independent. Instead, they would be

in-kind contributions. (Date issued: August 6,

1984; Length: 4 pages)
FEDERAL ELECTION COMMISSION

In its complaint, NRA had alleged that Handgun

Control, Inc. (HCn, a nonprofit corporation without members, and its separate segregated .fund,

Handgun Control, Inc. Political Action Committee

(HCI-PAC), had unlawfully solicited contributions

from individuals beyond HCl's solleitable class

(i.e., its executive and administrative employees

and their families). See 2 U.S.C. §441b(b)(4)(A).

_

HH'ITINGA v. FEe

Pursuant to 2 U.S.C. S437g(a)(8), on July 12,

1984, Mr. Ralph M. Hettinga sought injunctive

relief against the FEC for failing to act on his

administrative complaint within 120 days. The

suit was filed in the U.S. District Court for the

District of Columbia. (CA No. 84-2082) In the

complaint filed with the FEC on March 6, 1984,

Mr. Hettinga had alleged that eight unions had

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

in-kind contributions to the Mondale Presidential

campaign. The unions had allegedly provided telephone services and equipment and office space to

the Mondale campaign at less than fair market

value.

Volume 10, Numbe

U.S. District Court for the Eastern District 

Michigan, Southern Division, Civil Action 

84-CV-9802-PH, July 20, 1984.

NEW LmGATION

FEC v. Kirk Walsh tor Congress Committee

The FEC filed a complaint asking the dist

court to declare that the Kirk Walsh for Cong

Committee, Mr. Walsh's principal campaign co

mittee for his 1980 House campaign, violate

U.S.C. S434(a) by failing to file a 30 day p

general election report for 1980 and mid-year 

year-end reports for 1981, 1982 and 1983.

The FEC further asks the court to order the W

committee to file these reports and all ot

required reports as they become due.

The appeals court concluded that Mr. Hopfm

had not demonstrated that 'the district court 

erred in refusing to certify Mr. Hopfmann's c

stitutional challenges to the appeals court 

cause they were frivolous. Similarly, the appe

court found that appellant's motions for a wri

prohibition and/or mandamus lacked merit. Fin

ly, the court noted that it was denying 

Hopfmann's petition for an expedited app

"without prejudice to the merits of any argum

appellant may propound" in his unexpedited 

peal, which is currently pending before the cou

HOPFMANN v. FEe

On July 10, 1984, the U.S. Court of App

for the District of Columbia Circuit issued 

order denying appellant Alwin E. Hopfmann's p

tion for the court's expedited, en bane conside

tion of a suit he had originally filed with the U

District Court for the District of Columbia 

December 1982. (Hopfmann v. FEC; CA No. 

3667)

Stating that it could not determine whether pla

tiff had met the burden for injunctive relief u

after the court had examined the FEC docume

the court denied plaintiff's motion for injuncti

without prejudice.

Mr. Hopfmann had petitioned the district cour

declare contrary to law the FEC's dismissal of 

administrative complaint which he had filed 

September 1982 against Senator Edward M. K

nedy (D-Mass.) and the Committee to ReE

Senator Kennedy. See 2 U.S.C. §437g(a)(8)(A). 

Hopfmann had also asked the district court 

certify to the appeals court certain constitutio

questions involving FEC actions and the elect

law. See 2 U.S.C. §437h. (For a summary of 

district court's opinion denying Mr. Hopfman

requested relief, see p. 8 of the May 1984 

cord.) -

11

·september 1984

NATIONAL RIFLE ASSOC. v. FEC

On JUly 31, 1984, the U.S. District Court for

the District of Columbia granted the FEC's request to dismiss as moot a suit filed by the

National Rifle Association (NRA) on June 19,

1984. (NRA v. FEC; CA No. 84-1878) In the suit,

NRA had asked the court to declare that the

FEC's failure to act, within 120 days, on an

administrative complaint NRA had filed on December 1, 1983, was arbitrary, capricious, an

abuse of power and contrary to law. (See 2 U.S.C.

§437g(a)(8)(A).) The FEC had petitioned the court

to dismiss the suit as moot because, on July 31,

1984, the Commission had entered into a conciliation agreement with the respondents named in the

NRA's complaint, thereby resolving NRA's claims.

On July 24, 1984, the court issued an order

requiring the FEC to submit information on its

handling of Mr. Hettinga's complaint (l.e., a chronology of events with regard to the FEC's processing of the complaint). This submission, as well

as all future SUbmissions, is subject to a protective order issued by the court. By the terms of the

protective order, plaintiff and defendant agreed

that:

Plaintiff's counsel would share information or

documents concerning the administrative

complaint only with the plaintiff and his legal

staff; -- Plaintiff's counsel would explain the terms of

the protective order to anyone with access to

the information; and

All court filings pertaining to the complaint

would be filed under seal with the court.

...
FEDERAL ELECTION COMMISSION Volume 10, Numbe

Bulk Rate Mail

Postage and Fees Paid

Federal Election Commission

Permit Number G-31

Campaign Finance Law 84 is available to 

public through the Government Printing Office 

$9.50 per copy. Anyone Wishing to order cop

may do so by writing the Superintendent of Do

ments, Government Printing Office, Washingt

D.C. 20402, making reference to Campaign 

nance Law 84, No. 052-006-00030-9."

NEW EDITION OF STATE

CAMPMGNFmANCELAWS

During JUly, the Commission published 

updated, comprehensive summary of state ca

paign finance laws entitled Campaign Finan

Law 84. Part One of the publication conta

quick reference charts on: campaign finance 

porting requirements, contribution and solici

tion limits and states with special tax and pub

financing provisions. Part Two contains detai

sum maries of individual state laws.

Prepared under contract by the FEC's Natio

Clearinghouse on Election Administration, 

1984 edition marks the first revision of the pub

cation since 1981. The Commission plans to rev

and update the publication biennially, with 

search conducted during odd years and publi

tion, during even years.

September 1984

Otticlat Business

FEDERAL ELECTION COMMISSION

1325 K Street. N.W.

Washington, D.C. 20463

Individuals with a TDD may contact the Commission by calling 202/523-5955. A caller may contact any division by leaving a message and a staff

person from that division will return the call. If

calling long distance, the caller may reverse the

charges.

Enhancing the Commission's outreach effort, the

new device was installed in August as part of the

agency's compliance with the Rehabilitation Act

and the Commission'S new regulations for handicapped persons (11 CFR Part 6). (On August 17,

1984, the FEC transmitted these rules to Congress. See story on p, 3.)

NEW TELEPHONE DEVICE FOR

THEHEARmGIMPAmED

Hearing-impaired individuals can now communicate directly with the Federal Election Commission. A telecommunications device for the

deaf (TDD), located in the Information Division,

enables FEC staff to answer questions posed by

hearing-impaired individuals. Operating with a

universal receiver, the device permits individuals

with any type of telecommunications device to

call the Commission. The caller and FEC staff

member type their communications; a printer

displays the incoming messages.