FEDERAL ELECTION COMMISSION

4 REPORTS: October Schedule

TABLE OF CONTENTS

PRESIDENTIAL ELECTIONS

1 General Election Funding Certified

I Petition to Deny Funding

2 Involvement in Publicly Funded Campaigns

Washington DC 20463 Volume 14, Number 9

PETITION TO DENY PUBLIC FUNDING

TO DEMOCRATIC TICKET DISAPPROVED

On July 26, the Commission voted unanimously to dismiss a petition to deny public funding for the general election campaign of Democratic Presidential nominee Michael S. Dukakis

and his Vice Presidential running mate Lloyd M

Bentsen. The Commission then unanimously approved payment of a $46.1 million grant to the

Democratic Presidential ticket. (See story above.)

On July 27, petitioners Congressman Beau

Boulter, the Republican candidate for the Senate

in Texas, and J ann L. Olsten, Executive Director

of the National Republican Senatorial Committee

asked the Com mission to eithert (1) stay its

decision to certify public funds to the Democratic

Presidential ticket or (2) delay transmittal of the

certification to the U.S. Treasury until petitioners

could obtain a stay of the FEC's certification

determination from the U.S. Court of Appeals for

the District of Columbia Circuit.

The FEC denied their request for a stay of

the agency's certification determination and the

U. S. Treasury disbursed the public funds to the

Democratic ticket later the same day. The peti

tioners then filed suit with the appeals court. In

continued on p. 2

September 1988 999EStreet NW

FEe CERTIFIES GENERAL ELECTION

FUNDS TO PRESIDENTIAL TICKETS

During July and August, the Commission approved payment of public funds for the general

election campaign of each major party's Presidential ticket. On JUly 26, the Commission certified

a $46.1 million grant to Democratic Presidential

nominee Governor Michael S. Dukakis and his Vice

Presidential running mate Senator Lloyd M. Bentsen.* On August 22, the agency approved payment of the $46.1 million grant to Republican

Presidential nominee Vice President George Bush

and his running mate Senator Dan Quayle.

The Democratic and Republican nominees

had requested public funding for their general

election Presidential campaigns in letters

submitted to the Commission prior to the agency's

certification decisions. In their respective

letters, the nominees agreed to abide by the

overall spending limit, to use only public funds for

their respective campaigns and to comply with

other legal requirements. 26 U.S.C. §9003.

By law, the Presidential nominee of each

major party in 1988 may qualify for full public

financing of the general election campaign (I.e.,

$46.1 million in 1988). Major party nominees

accepting public financing for their general election campaigns are limited to $46.1 million in

campaign expenditures. In addition, the use of

the nominee's personal funds is limited to $50,000.

Private funds, subject to contribution limits, may

be raised and spent solely for legal and accounting

costs incurred to ensure compliance with the Act.

•

6 ADVISORY OPINIONS

COURT CASES

7 Boulter and NRSC v, FEC

7 FEC v, Haley Congressional Committee

8 New Litigation

9 COMPLIANCE: Nonfilers; MUR Summary

11 INDEX

*The Commission certified public funds to the

Democratic Presidential ticket after dismissing a

petition to deny the grant to the ticket. See story

in column 2 and Boulter and National RepUblican

Senatorial Committee v. FEe on page 7.

INFORMATION

12 Revised Candidate Guide

12 Videotape for State Party Committees
September 1988 FEDERAL ELECTION COrvlfVllSSION Volume 14, Numbe

continued from p, 1

an August 3 ruling, the appeals court affirmed the

FEe's certification decision. (For a summary of

the court's ruling, see Boulter and National Republican Senatorial Committee v. FEe on page 7

of this issue of the Record.)

Petition Filed with the FEC to Deny

Public Funds to Democratic Ticket

In the petition filed with the Commission on

July 22 the petitioners asserted that Senator

Bentsen;s use of private contributions in his Texas

Senate campaign would inevitably result in a

prohibited use of private contributions in his Vh::e

Presidential bid. Petitioners cited statements in

an election news service that alleged that several

of Senator Bentsen's Senatorial campaign aides

would divide their time between his Senatorial

campaign and his Vice Presidential campaign.

Petitioners asked the FEC to investigate these

allegations before determining the Dukakis/Bentsen campaign eligible to receive public funds.

In its Statement of Reasons for denying the

petition, the Commission noted initially that

"nothing in the campaign finance statutes or regulations requires Senator Bentsen to withdraw from

the Senate race or prohibits him from using

private contributions to further his Senatorial

campaign." In fact, the C?mmission noted t~at

its regulations have established rules governing

dual candidacies, including those involving publicly financed Presidential campaigns. See 11

CFR llO.8(d)(3).

With regard to the Presidential campaign's

alleged use of private funds from the Bentsen

Senatorial campaign, the Commission stated that

the allegations were "speculative and hardly present such a clear case that would justify withholding general election financing to the Dukakia/-

Bentsen campaign." The Commission's Statement

of Reasons thus noted that the allegations raised

in the petition did not meet the standards set by

the appeals court in its ruling on In re CarterMondale Reelection Committee. Inc. (642 F.2d

538 (D.C. Cir, 1980)). In that opinion, the court

held that a grant could only be withheld "if' it

reasonably appears that a patent fraud or other

major violation of the law is being committed,"

642 F.2d at 544. The court stressed that important public interests weigh against the withh

inc of funds from a candidate who had met 

ltobjective criteria for elibility." Id. at 5

Under the standards stated by the court in C

ter-Mondale. the Commission concluded that 

petitioners' allegations were insufficient to es

lish fraud warranting the denial of general e

tion funds to the Dukakis/Bentsen campaign.

INVOLVEMENT IN THE PRESIDENTIAL

GENERAL ELECTION

Introduction

The Presidential general election will be h

November 8, 1988. Between now and then, m

people will become actively involved in 

election. The chart on page 3 lists the vari

activities that may be conducted by differ

election participants on behalf of publ

financed nominees. For a full description of e

activity, see your Campaign Guide and F

regulations.

All Campaign Contributions Prohibited

A publicly funded nominee of a major polit

party may not accept any contributions to furt

his/her general election campaign. T

restriction applies to contributions of money, 

kind contributions, loans or anything of va

given to influence the Presidential election. 

CFR 9003.2(a)(2).

Contributions to Compliance Fund

The Presidential nominee may, however, acc

contributions to his/her compliance fund. 

compliance fund is a special account maintai

by a publicly funded nominee solely for pay

legal and accounting expenses incurred 

complying with the campaign finance l

Contributlons to a compliance fund are subjec

the usual limitations and prohibitions of 

election law. 11 CFR 9003.3(a)(1)(i)(B).

The Record is published by the Federal Election Commission, 999 E Street, N.W., washingt?n,

D.C. 20463. Commissioners are: Thomas J. Josefiak, Chairman; Danny L. McDonald, Vice

Chairman- Joan Aikens; Lee Ann Elliott; John Warren McGarry; Scott E. Thomas; Walter J.

Stewart, Secretary of the Senate, Ex Officio; Donnald K. Anderson, Clerk of the House of

Representatives, Ex Officio. For more information, call 202/376-3120 or toll-free 800/424-9530.

(TDD For Hearing Impaired 202/376-3136)

2
September 1988 FEDERAL ELECTION COrvlrvllSSION Volume 14,Number9

•

INVOLVEMENT IN PRESIDENTIAL

GENERAL ELECTION

This chart is provided only as a quick-reference aide. For an explanation of each activity and its requirements,

consult the regulation cited (11 CFR) and the Campaign Guides.

NOTE: The. indicates permissible activity.

The 0 indicates permissible activity subject to limits.

'A candidate may mention a Presidential candidate in his/her campaign materials distributed by volunteers.

2presidential candidates who do not receive public financing may accept contributions.

3Advance payment by campaign is required.

4Reimbursement must be made within commercially reasonable time.

5Applies only to vendors of food and beverages.

6State and local committees of a State share one limit.

3
4

OCTOBER REPORTING SCHEDULE

The following chart and paragraphs explain the reporting schedule for the various categories of

filers.

x

x

x

Monthly

October 20

or

Volume 14, Numbe

x

x3

x

x

or

Report

Pre-General!

October 27

x

x

x

x

x

Quarterly

October 15

FEDERAL ELECTION COMMISSION

National Party Convention

Committees8

Connected Organizations/

Communicatlonsf

1984 Presidential Committees5

1988 Congressional Committees2

1988 Presidential Committees!

Under $100,000

1988 Presidential Committees/4

$100,000+

Parties and PACs/Quarterly6

Parties and PACs/Monthly6

Type of Filer

September 1988

1Filers of pre-general election reports will also be required to file a post-general election report.

This does not apply to connected organizations filing communications reports.

2Congressional committees active only in other election years have only two reports covering

1988 actiVity; the semiannual report, due on July 31, 1988, and the 1988 year-end report, due on

January 31, 1989.

J"Report not required if Presidential or Congressional candidate does not run in the genera

election.

4Presidential candidates not running in the general election have a choice of filing eithe

monthly reports in October and November or pre- and post-general election reports. See AO 1980-83.

5Presidential committees that are not active in 1988 elections may file on either a monthly or

quarterly reporting schedule. See 11 CFR l04.5(b)(2).

6All party committees and PACs (i.e., nonconnected committees and separate segregated funds)

are re~uired to file on either a monthly or quarterly basis in 1988.

Required only if the unauthorized committee makes contributions or expenditures on behalf o

candidates in the general election, which have not been previously disclosed.

BIn the case of national party convention committees, the quarterly report is due October 10. 11

CFR. 9008.12(b)(2).

9Report required if aggregate costs for partisan, internal communications for 1988 elections

have exceeded $2,000.
FEDERAL ELECTION COMMISSION

•

•

•

September 1988

Quarterly Filers

Due by October 15, the report should cover

all activity. from July 1 (or from the closing date

of the last report filed in 1988 or from the date of

registration,* whichever is later) through September 30.

Pre-General Election Filers

The pre-general election report is due October 27 and must cover activity through October

19. If sent by registered or certified mail, the

report must be postmarked no later than October

24.

Last-Minute Contribution Notices

A principal campaign committee must file

special notices on contributions of $1,000 or more

received after the 20th day, but more than 48

hours, before an election in which the candidate is

running. Within 48 hours of receiving such a

contribution, the committee must deliver the following information in writing to the Clerk of the

House or the Secretary of the Senate, as appropriate:

o The candidate's name and the office he or she is

seeking;

o The identification of the contributor; and

o The amount and date of receipt of the contribution.

A last-minute contribution must also be

itemized on the committee's next scheduled report. See 11 CPR 104.5(f) and AO 1988-32.

Last-minute Independent Expenditure Notices

Any independent expenditures aggregating

$1,000 or more and made after the 20th day, but

more than 24 hours, before an election must be

reported within 24 hours after the expenditure is

made. (This reporting requirement applies to a

written contract of over $1,000 that the

committee has not yet paid.) The report must

include all the information required on Schedule E

and must be filed with the FEC, the Secretary of

the Senate or the Clerk of the House, as

appropriate. 11 CPR 104.5(g). A committee must

disclose a last-minute expenditure a second time

on Schedule E filed with the next scheduled

report. At that time, the committee may, if it

wishes, note on Schedule E that the expenditure

was previously reported.

"In the case of an authorized candidate committee, from the date candidate status is established. The Committee must report all campaign

finance activity incurred by the candidate before

he/she authorized the committee. 11 CFR 101.3-

(a) and 104.3(a) and (b). However, activity which

occurred before 1988 must be reported separately.

5

Volume 14, Number 9

Monthly Filers

The monthly report must be filed by Octobe

20. It should cover all activity from September 

(or from the closing date of the last report filed

in 1988 or from the date of registration,* which

ever is later) through September 30.

LOOKING AHEAD: CHANGE IN

FILING FREQUENCY

PACs and party committees that plan to

change their reporting schedule in 1989 (e.g.

from monthly to semiannually) must notify th

Commission by SUbmitting a letter. A committe

may not change its filing frequency more tha

once a year. 11 CPR 104.5(c).

WHERE REPORTS ARE FILED

Committees must file all reports and state

ments simultaneously with the appropriate federa

and state officials. 11 CPR 108.5.

Filing with the Federal Government

1. The principal campaign committees of Hous

candidates and committees supporting or op

posing only House candidates file with th

Clerk of the House, Office of Records an

Registration, 1036 Longworth House Offic

Building, Washington, D.C. 20515. 11 CPR 104

4(c)(3) and 105.1.

2. The principal campaign committees of Senat

candidates and committees supporting or op

posing only Senate candidates file with th

Secretary of the Senate, Senate Public Records

Hart Senate Office Building, Room 232

Washington, D.C. 20510. 11 CPR 104.4(c)(2

and 105.2.

3. All other committees, including the principa

campaign committees of Presidential cand

dates, file with the Federal Election Com

mission, 999 E Street, N.W., Washington, D.C

20463. 11 CPR 105.3 and 105.4.

Filing with State Governments

1. The principal campaign committees of Con

gressional candidates must file a copy of every

report and statement with the Secretary o

State or the appropriate elections official o

the state in which the candidate seeks federa

office. II CPR 108.3.

2. The principal campaign committees of Presi

dential candidates must file copies of report

and statements with the Secretary of State o

the appropriate elections official of the state i

which the committee makes campaign expendi

tures. These reports must contain all financia

transactions which apply to that state durin

the reporting period covered. 11 CPR 108.2.

continued
September 1988 FEDERAL ELECTION COMMISSION Volume 14,Numbe

3. PACs and party commmittees making contributions or expenditures in connection with House

and Senate races file in the state in which the

candidate seeks election. The law requires a

copy only of that portion of the repont applicable to the candidatels) being supported. Committees supporting Presidential candidates must

file in the statets) in which the Presidential

com mittee and donor com mittee have their

respective headquarters.

HOW TO OBTAIN MORE INFORMATION

During 1988, reporting forms and additional

information will be sent to registered committees. Questions and requests for additional forms

should be addressed to Information Services, Federal Election Commission, 999 E Street, N.W.,

Washington, D.C. 20463; or call 202/376-3120 or

toll Cree 800/424-9530.

ADVISORY OPINION REQUESTS

The following chart lists recent requests for

advisory opinions (AORs). The full text of each

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

AOR Subject

1988-34 Solicitability of membership organization's individual members. (Date made

public: August 5, 1988; Length: 7

pages, plus 8-page supplement)

1988-35 Corporation's newspaper commnication presenting major party Presidential candidates' views on housing issues. (Date made publici August 9,

1988; Length: 8 pages, plus 3-page

supplement)

1988-36 Status of employees as stockholders

for purposes of PAC solicita tions.

(Date made publici August 12, 1988;

Length: 2 pages, plus 71-page supplement)

AO 1988-27: Corporate Expenditures for PAC

Pundraiser and Honorarium;

PAC Contribution

Medivision, Inc. (Medivision), a corporation, may

finance a fundraising event for its PAC and pay

an honorarium to an incumbent candidate who will

address the fundraiser, In an unrelated action,

6

the PAC itself may make a contribution to t

candidate's campaign.

Medivision plans, within four months befo

the general election, to sponsor a dinner a

reception for its stockholders that (I) inform

them about Medivision's separate segregated fun

Medivision PAC, and (2) solicits contributio

from the stockholders to the PAC. Medivisi

will pay an honorarium to an incumbent up f

reelection, who will be the featured speaker 

the dinner. In addition, Medivision PAC is co

sidering making a contribution to the candida

the contribution would not be in consideration f

the speech.

Invitations to the fundraising event w

clearly state the political purpose of Medivisi

PAC and the name of the featured speaker. T

invitations will also indicate that the event w

raise funds for Medivision PAC and that the f

ticket price will constitute a contribution to t

PAC. Finally, the invitation will state that tho

invited may refuse to purchase a ticket witho

reprisal.

PAC Fundraiser

Since the corporation plans to invite on

members of its restricted class to the dinner a

reception, Medivision may solicit PAC contrib

tions from them, and it may pay any costs ass

ciated with the fundraiser. II CFR 114.l(b).

Honorarium to Candidate

The election law and FEC regulations exem

from the definition of contribution any honor

rium paid to an elected officeholder for an a

pearance, speech or article. 2 U.S.C. §§43l(S

(B)(xiv) and 44li(a); 11 CPR 110.112. In A

1978-32, the Commission noted, however, that 

payment made to an incumbent candidate's cam

paign com mittee for the purpose of influenci

his or her election would be considered a cont

bution - even if the payment were made 

conjunction with a speech by the candidate.

The Commission has also concluded, howev

that events in which federal officeholders parti

pate in the performance of their duties as offic

holders are not campaign related simply becau

the officeholders may be candidates for feder

office. Thus, payments made to officeholders f

participating in such events are not consider

contributions to their campaigns. See AOs 198

89 and 1980-2. In several advisory opinions, t

Commission has stated that an officeholder/ca

didate's appearance would not be campaign r

lated if it: (1) did not solicit contributions to t

officeholder/candidate and (2) did not involve t

express advocacy of the officeholder/candidat

reelection. The absence of these factors wou

not, however, preclude a determination that 

officeholder's appearance was campaign relate

See AOs 1988-22, 1986-37, 1984-13, 1982-50 a

1982-16.
September 1988 FEDERAL ELECTION COrvlrvllSSION Volume 14, Number 

In this case, Medivision's payment to the

featured speaker for addressing its PAC fundraiser would be an honorarium payment because

the speaker will be appearing in his 01' her capacity as an officeholder, as evidenced by the facts

that:

o Medivision will select a speaker based on his/-

her familiarity with Medivision's legislative interests at the federal level;

o Medivision will pay the honorarium directly to

the speaker or the speaker's designated charity

- not to the speaker's reelection campaign;

o Neither Medivision nor Medivision PAC will

solicit, direct or control contributions from its

stockholders to the speaker's reelection campaign - either at the fundraiser or through

invitations to the fundraiser; and

o Any contributions that Medivision PAC may

make to the speaker's reelection campaign will

not be in consideration for the speaker's participation in the PAC fundraiser,

(Date issued: July 15, 1988; Length: 4 pages)

AO 1988-32: Candidate Committee's Reporting

of Last-Minute Contributions

The Frank Shurden for Congress Committee (the

Committee) must report each contribution of

$1,000 or more received after the 20th day, but

more than two days, before the Oklahoma primary

(August 23) by SUbmitting a written notice

disclosing:

a The name of the candidate and the office he

seeks;

o The identification of the contributor;

o The amount of the contribution; and

o The date the Committee received the contribution.

Unlike FEC reports, the notice about last-minute

contributions does not have to be signed by the

Committee's treasurer and does not have to be

submitted on any reporting form. The notice

must be in writing, however, and must contain all

the information described above.

The Committee's notice of last-minute

contributions of $1,000 or more must reach the

appropriate election offices (l.e., the Clerk of the

U.S. House of Representatives and the Oklahoma

election office) within 48 hours after the

Committee receives the contrlbutionls). The

Committee may use anyone of several types of

mail delivery services, including registered mail,

certified mail, first-class mail, telegram,

mailgram, express mail service, overnight

delivery service or facsimile machine. The

Com mittee, however, is responsible for ensuring

that the notice reaches the appropriate offices

within the 48-hour period.

Information contained in the last-minute

notice must also be reported on the Committee's

post-election report. LI CFR I04.5(f). (Date

issued: July 29, 1988; Length: 3 pages)

7

BOULTER AND NATIONAL REPUBLICAN

SENATORIAL COMMITTEE v, FEC

On August 3, 1988, the U.S. Court of Appea

for the District of Columbia Circuit affirmed t

FEC's July 26 decision to certify public funds f

the general election campaign of Democrat

Presidential nominee Michael S. Dukakis and h

Vice Presidential running mate Lloyd M. Bentsen

The petitioners, Congressman Beau Boulte

the Republican Senatorial candidate from Texa

and the National Republican Senator-ial Comm

tee, a national committee of the Republican pa

ty, had submitted their petition to the appea

court after the FEC had dismissed their reque

to deny public funding to the Democratic Pre

dential ticket. (See story on p, 1 of this issue 

the Record.)

In its expedited review of the petition, t

court decided to dismiss as moot the petitione

emergency motion for a stay of the certificati

because, on July 27, the U.S. Treasury had d

bursed the public funds to the Democratic Pre

dential and Vice Presidential nominees. Nor d

the court grant petitioners' request for an eme

gency injunction barring the Democratic tick

from expending the grant. The court held th

"petitioners have failed to carry the 'burden 

showing that exercise of the court's extraordina

injunctive powers is warranted.' H*

In affirming the agency's certification 

Democratic funds, the appeals court noted th

its standard for reviewing the FEC's decision w

whether the FEC's action was "arbitrary, cap

cious or contrary to law."** Based on th

standard, the court concluded that "petitione

allegations are insufficient on their face to w

rant a revocation of the certification."

FEC v, TED HALEY

CONGRESSIONAL COMMITTEE

On July 22, 1988, the U.S. Court of Appea

for the Ninth Circuit issued a decision in FEC 

Ted Haley Congressional Committee. et aL (Ci

Action Nos. 87-3867; 87-4248), which reversed 

opinion by the U.S. District Court for the Weste

District of Washington at Tacoma. In its opinio

the district court had ruled that contributions 

the form of loan guarantees) made by six indi

duals to help Mr. Haley retire his campaign deb

did not constitute contributions to the campaign

continu

*Cuomo v. Nuclear Regulatory Commissio

722 F.2d 972, 974 (D.C. Cir. 1985).

USee In roe Carter-Mondale. 642 F.2d at 542.
September 1988 FEDERAL ELECTIOI\J COIVIIVlISSIOI\J Volume 14, Number 9

Although the appeals court reversed this decision, it upheld the district court's refusal to

require defendants to pay a clvil penalty for their

violation of the contribution limits (2 U.S.C.

§§441a(a)(l)(A) and 44Ia(f)).

Background

The Ted Haley Congressional Committee was

the principal campaign committee for Mr. Haley's

bid for a House seat in Washington's 1982 Congressional election. After the election, Mr.

Haley obtained a $50,000 personal loan from a

local bank to retire debts outstandlnz from his • 0

campaign, To secure the loan, Mr. Haley obtained

guarantees from several friends, that is, the six

other defendants in the suit. (Four of the defendants provided guarantees of $10,000 each; two

provided guarantees of $5,000 each.) The loan

and the guarantees were reported by Mr. Haley's

campaign in its 1983 mid-year report. By the end

of 1983, Mr. Haley had fully repaid the loan.

Under the election law and FEe regulations,

an endorsement or guarantee of a loan, like a

regular loan, counts as a contribution from the

endorser or guarantor to the extent of his/her

portion of the outstanding balance of the loan. 11

CFR 100.7(a)(1)(i)(C). On October 30, 1984, the

Commission therefore found reason to believe

that each guarantor of the loan had exceeded

his/her $1,000 limit for Mr. Haley's primary campaign.

On November 7, 1985, after attempting to

resolve this enforcement matter through informal

methods of conciliation, the Commission filed a

suit against defendants in the U.S. District Court

for the Western District of Washington.

District Court's Ruling

The court found that "post-election loan guarantees, such as those made here, are presumptively for the purpose of influencing an election

under the statute and regulations. This presumption, however, is not conclusive, but rebuttable.

It simply allows the FEC to shift the burden of

proof to defendants after a minimal showing."

The court held that the defendants had successfully rebutted this presumption by showing

that the "facts [of the case] are not in issue, and

that those facts lead to the legal conclusion that

the guarantees...were not for the purpose of influencing any election."

Appeals Court Ruling

In reviewing the case on appeal, the appeals

court held that, since Congress had not precisely

addressed the issue of whether donations made to

8. campaign committee after the election constituted contributions for the purpose of infuencing

a federal election, the court could "not simply

impose its own construction on the statute...." Rather, the court had to decide whether the FEC

B

had based its interpretation of the statute on 

"per-missible construction.... It

The court found that the FEC's interpretatio

of the relevant statutory provisions through i

regulations and advisory opinions was a "perrniss

ble" interpretation of the election law. Whe

for example, in 1976, the FEC promulgated 

regulation stating that post-election contribution

were SUbject to limits, Congress did not disap

prove it. In the court's view "Congress' acqu

escence is made more concrete in view of sever

advisory opinions the FEC has issued on th

subject."

The appeals court therefore held that "th

district court erred when it substituted its inte

pretation of the statute and regulations rathe

than giving deference to the FEe's interpretatio

of its enabling statute and its own promulgate

regulations and advisory opinions••.The appellee

[the Haley Congressional Committee, et at) can

not choose to ignore that interpretation of th

regulatory scheme and urge this court to subst

tute its own construction for that of the FEC."

The appeals court found that the distric

court had not abused its discretion in finding tha

a civil penalty for the defendants' violations o

the election law was "unwarranted." Consequen

ly, the appeals court decided not to "disturb tha

finding and conclusion."

Finally, the appeals court vacated the dis

trict court's award of attorneys' fees to th

defendants. Since the defendants were no longe

the "prevailing party" in the case, the appeal

court held that all parties to the suit had to bea

their own litigation costs.

NEW LITIGATION

FEe v, Thornton Township Regular

Democratic Organization

In its complaint, the FEC alleges that th

Thornton Township Regular Democratic Organiz

tion (TTRDO) and its treasurer Tina Sekula vio

lated the election law when they sponsored 

direct mail solicitation to approximately 18,00

registered Democratic voters at a cost of approx

imately $4,371.

The FEe specifically asks the court to fin

that TTRDO violated the election law by:

o Failing to register and report with the FEC as 

political committee when its costs for the d

rect mail solicitation exceeded $1,000 (2 U.S.C

§§433(a) and 434); and

o Failing to include on the solicitation a disclaim

er notice stating that TTRDO had sponsored th

solicitation and that the solicitation was no

authorized by any candidate's campaig

committee. (2 U.S.C. §44Id(a)(3».
September 1988 FEDERAL ELECTION CONIMISStON Volume 14, Number9

The FEC further asks the court to:

o Order TTRDO to register as a political committee and file reports on its financial activity

with the FEC;

o Assess an appropriate civil penalty against defendants; and

o Permanently enjoin defendants from any further violations of the election law.

U.S. District Court for the Northern District

of Illinois, Civil Action No. 88C6034, July 14,

1988.

FEC PUBLISHES NONPILERS

During July and August, the Commission published the names of several campaigns that had

failed to file disclosure reports required by the

election law. See the chart below.

The election law requires the agency to publish the names of nonfiling candidates. Compliance actions against nonmel's are decided on a

case-by-case basis. The law gives the Commission broad authority to initiate enforcement actions resulting from infractions of the law, including civil court enforcement and imposition of civil

penalties.

Nonfilel'S

Candidate Office State Report

Sought Not Filed

Fernandez, B. President Monthly

Martin-Trigona, A.* President Monthly

Carberry, G.T.** House CT Pre-Conv.

Gottfried, L.A. House NY Quarterly

Griffin, J.L.** House CT Pre-Conv,

Hussain, R.B. House NY Quarterly

Morgan, S.C.** House NY QUilI'terly

Wood, J. House CO Pre-Prim.

---~_.__.

,;,Filed a termination report on JWle 30, 1988.

* *Subsequently filed report.

9

MUR SUMMARIES

MUR 1690: Corporate Executives' Activity on

Behalf of Presidential Campaign

The Commission determined, during the fir

quarter of 1987, that three corporations had vio

lated the law's prohibition on corporate contribu

tions in connection with the 1984 Presidenti

election.* Conciliation agreements were con

cluded between the Commission and the corpor

tions.

Complaint

Commission review of a 1984 Presidenti

committee's threshold submission for matchin

funds disclosed that groups of contributors ha

the same employers and had made their contribu

tions on the same dates. This led to an internal

generated enforcement matter.

General Counsel's Report

Corporation A. After finding "reason 

believe" that the Act had been violated, th

Commission conducted an investigation which di

closed that the Chief Executive Officer (CEO

sent a series of memoranda. to executives an

professional employees, through the firm's inte

nal mail, soliciting contributions in connectio

with a Presidential candidate's fundralser to b

held at the firm. As a result, the CEO collecte

$26,025 in contributions to the Presidential cand

date, which he delivered to a campaign represen

tative at the fundralser. The corporation absorb

ed all costs for the activity, and no reimburs

ment was sought or received from the candidate

campaign.

Federal election law prohibits corporation

from making a contribution or expenditure, d

fined to include "anything of value," in connectio

with federal elections. 2 U.S.C. §441b(a). In th

case, Corporation A asserted that the CEO enga

ed in individual volunteer activities, and that h

use of corporate facilities was occasional, is

lated or incidental. Com mission regulations pr

vide that, as an exemption to the general prohib

tion on corporate contributions, employees an

shareholders may make occasional, isolated o

incidental use of corporate facilities for "indiv

dual volunteer activity" and reimburse the corpo

ration only for increased overhead or operatin

costs. 11 CFR 114.9. But the manner in whic

the CEO sent memoranda to corporate employee

the General Counsel recommended, could not b

characterized as individual volunteer activity o

the part of the CEO. In response to the Commi

sion's "reason to believe" finding, the corporatio

continue

*The original compliance matter named 1

respondents, including corporations, individua

and several corporate PACs.
September 1988 FEDERAL ELECTION CONINIISSION

Volume 14, Number 

had argued alternatively that, if the CEO conducted the activities in his corporate capacity,

the activities fell within the communications exceptions to the general prohibition on corporate

contributions and expenditures described at 11

CFR 114.3.

The corporation asserted that the CEO may

make partisan communications to the corporation's stockholders and executive and administrative personnel pursuant to 11 CFR 114.3. It

maintained that, under these regulations, it could

sponsor a partisan candidate appearance before

its restricted class, and that the fundraiser was

such an appearance. The regulations then in

effect provided in part that a corporation's partisan communications with its restricted class could

include a partisan candidate appearance "at a

meeting, convention, or other regularly scheduled

function of the corporation which is primarily

held for other purposes." However, because the

fundraiser was neither a regularly scheduled

meeting, nor held primarily for nonpolitical purposes, the General Counsel concluded that, under

the regulations in effect at the time,* the event

fell outside the regulation's exception, and constituted a violation by the corporation of 2 U.S.C.

§44lb.

By regulation, the Commission has interpreted the exemption for partisan communications [2 U.S.C. S44Ib(b)(2)(B)] to permit the distribution of certain partisan printed materials, and

the holding of a meeting at which the candidate

may ask for contributions to his or her campaign.

The General Counsel concluded that the solicitation and collection of contributions by the corporation constituted more than a communication to

the restricted class. The General Counsel stated

that the corporation had "Iacilitatekf the making" of contributions to the candidate's campaign,

in violation of section 441b, because the corporation effectively raised funds on behalf of the

candidate and, as a result, had provided something

of value to the candidate's campaign.

Corporation B. After finding "reason to

believe" that the Act had been violated, the

Commission conducted an investigation which indicated that the Chairman of the Board (COB) of

Corporation B solicited contributions to two different fundraisers, one of which was held at the

corporation, by using corporate staff and facilities to contact various vendors, business contacts

and executives of the firm. From those endeavors, the COB collected $60,000, which was for-

"Tnese regulations were subsequently modified; the General Cou.nse1 concluded, however,

that, even under the new regulations, the activity

did not fall within the partisan communcations

exemption.

10

warded to the candidate's campaign by letters 

corporate stationery. The COB also provid

transportation on the corporation's airplane a

the use of a company car and driver. T

campaign did not reimburse the corporation f

these services.

Under federal election law, if a corporatio

absorbs the cost of transporting a federal cand

date, it has provided something "of value" to th

candidate, and thus has made an expenditure 

violation of 2 U.S.C. §44Ib(a). Accordingly, t

Commission's regulations provide that a candida

who uses a corporate plane must, in advance, p

the corporation the amount the flight would co

by first-class airfare. 11 CFR 114.9. For oth

means of transportation, reimbursement at th

usual and normal charge must be made within 

commercially reasonable time after such use. 

this case, since the corporation paid for th

transportation and was not properly compensate

the corporation violated section 44Ib(a) by ma

ing an in-kind contribution to the candidate

campaign.

With regard to the contributions collected 

the COB, again the General Counsel conclud

that, because the COB directed corpora

employees and used lists of the firm's vendors, th

activities could not be characterized 

"individual volunteer activity" within th

regulations' exception. In fact, the Gener

Counsel asserted that Corporation B had provid

something "of value" to the campaign in the for

of the usual and normal charge of the faciliti

used, the cost of the employees' ti me, the valu

of the corporate mailing lists compiled and th

value of the solicitation of corporate employe

and business vendors by the fir m's chairman 

corporate stationery. In so doing, the Gener

Counsel concluded, Corporation B had violat

section 441b by "facltltatlingl the making" 

contributions.

Corporation C. After finding "reason 

believe" that the Act had been violated, th

Commission conducted an investigation which i

dicated that the Chief Executive Officer (CEO) 

Corporation C had engaged in numerous fundrai

ing activities on behalf of the candidate's cam

paign. He had enlisted the president of one of th

corporation's divisions to collect contribution

Various other corporate employees, including th

firm's Washington lobbyist, were involved in th

forwarding of contributions and in relaying info

mation about fundraising activity. At a lat

time lists of the corporation's vendors were pr

pared and the vendors were solicited on corpora

stationery. These activities resulted in contrib

tions of more than $13,000 to the candidate

campaign.

Using the same legal analysis, the Gener

Counsel determined that the corporation ha
September 1988 FEDERAL ELECTION COMMISSION Volume 14, Number 

•

facilitated the making of contributions to the

candidate's campaign, outside the exemptions at

11 CFR 114.9 and 114.3. The General Counsel

concluded that the corporation had thus contributed something of value to the candidate's campaign in violation of 2 U.S. C. §441b(a).

Commission Determination

The Com mission voted 6-0 to find probable

cause to believe that Corporation B violated section 441b by providing transportation. The Commission voted 4-2 to find probable cause to believe that Corporations A, Band C had violated

the law by facilitating the making of contributions, thus providing something of value to the

candidate's campaign. In the conciliation agreements concluded between the respondents and the

Commission, the respondents agreed to pay civil

penalties of $9,500, $7,000 and $2,000, respectively.

This cumulative index lists advisory

opinions, court cases and 800 Line articles published in the Record during 1988. 'The first

number in the citation refers to the "number"

(month) of the Record issue; the second number,

following the colon, indicates the page number in

that issue.

OPINIONS

1987-29: Partisan communications by incorporated membership organization, 4:6

1987-30: Assets of candidate's wife used to pay

off bank loan to candidate, 2:3

1987-31: Eligibility of security exchange's eight

membership classes for PAC solicitations, 3:5

1987-32: Campaign contributions in the form of

silver dollars, 3:7

1987-33: Law fir-m and partner are not government contractors, 3:7

1987-34: Solicitations by subsidiary of joint

venture partnership, 6:5

1988-1: Activity to influence delegate selection,

5:3

1988-2: FEe reports posted on security exchangers

bulletin boards, 4:7

1988-3: Trade association solicitations, 7:3

1988-4: Affiliation of PACs through corporate

merger, 5:4

1988-5: Presidential matching payments used for

'84 debts, 5:5

1988-6: Allocation of media expenses to fundraising exemption, 4:7

1988-10: Activities for post-primary delegate

selection, 6:5

11

1988-11: Solicitation of teachers by tra

association of schools, 6:7

1988-12: Promotion of credit card program 

party committee/bank, 7:3

1988-13: Campaign funds used to pay candidat

rent, 7:4

1988-14: Joint PAC sponsored by affiliat

corporations, 6:7

1988-17: Corporation's sale of medallio

depicting candidates and national nominati

conventions, 8:3

1988-18: Liability of union for donations from i

funds by non federal entities, 7:9

1988-19: Solicitability of employee shareholder

7:5

1988-21: Act's preemption of California ordinan

governing contributions, 7:5

1988-23: Air travel coupons sold to campaign, 8:

1988-25: Cars provided by corporation to nation

Presidential nominating conventions, 8:4

1988-26: Hourly wage earners not solicitable, 8:5

1988-27: Corporate expenditures for PA

fundraiser and honorarium, 9:6

1988-32: Reporting last-minute contributions, 9:

COURT CASES

Ralph J. Galliano v, U.S. Postal Service, 1:7; 3:9

Harry Kroll v. Americans with Hart, Ine., 5:6

Xerox Corp. v, Americans with Hart, lnc., 5:6

FEC v•.--.,c:-

-Augustine for Congress, 1:8

-Beatty for Congress Committee, 6:9

-Californlans for a Strong America, 8:7

-Citizens for the President '84, 3: 10

-Citizens to Elect Jerald Wilson for

Congress, 1:9

-Dietl for Congress, 6:9

-Dorninelli (second suit), 5:8

-Ted Haley Congressional Committee, 9:7

-Holmes Committee, 7:7

-Lee, 7:7

-New York State Conservative Party State

Committee/1984 Victory Fund, et al., 2:4

-Rodriguez, 8:6

-Thornton Township Regular Democra

Organization, 9:8

-Working Names, Inc., 7:6

___ v. FEC

-Antosh, 1:8; second suit, 3:10; 6:8

-Boulter and National Republican Senator

Committee, 9:7

-Common Cause, 5:7

-Stark (second suit), 4:8

-USDC, 7:6

800 LINE

Election information available from oth

agencies, 9:

Last-Minute Contributions and Independent E

penditures, 2:4

Partnership contributions, 8:6
September 1988 FEDERAL ELECTION COMMISSION Volume 14, Number 

REVISED GUIDE FOR CANDIDATES

The Commission has puolished a completely

revised Campaign Guide for Congressional Candid~tes and Their Committees. More eornprehensive than the previous edition, the revised Guide

reflects recent advisory opinions and changes to

FE.C regulations. While essential in helping campaign treasurers, bookkeepers and fundralsecs

comply with the election law and FEC regulations, the Guide is also a useful information aide

for anyone with questions concernlnz campaigns

for federal office. '"

The Commission has mailed the Guide to all

registered candidate committees. Additional copies of the revised Guide are available to anyone

free of charge. Call the Information Services

Division: 800/424-9530 or 202/376-3120.

Revised Campaign Guide

Topics covered in depth in the revised Guide

include: --

o The effect of designated and undesignated contributions on contributors' per-election contribution limits;

o The use of redesignations and reattributions to

correct excess!ve contributions;

o The use of candidates' personal funds in their

campaigns;

o Permissible activities that may be sponsored by

corporations and labor organizations;

o The rules on transfers, including transfers from

a candidate's nonfederal campaign; and

o Winding down activity: the sale of campaign

assets, debt retirement and the use of excess

funds.

FEDERAL ELECTION COMMISSION

999 E Street, NW

Washington, DC 20463

Official Business

.Additionally, the revised Guide explains r

portmg procedures in detail and includes samp

forms .that illustrate these procedures.

FI~ally, several appendices have been added.

o Testing the Waters

o Contributions from Partnerships

a Joint Fundralslng

o Honoraria

o Compliance with Other Laws

FEe PRODUCES VIDEOTAPE

FOR STATE PARTY COMMITTEES

During August, the Commission sent 

twe.lve-minute videotape enti tled "Help" to al

registered state party com mittees, Designed to

help political party officials and volunteer

understand the election law and avoid problems

the tape discusses basic requirements of the la

and FEC regulations for state party committee

supporting federal candidates, such as:

o Prohibited sources of funding;

o Contribution limits;

o Coordinated party expenditures;

o Party activities exempted from the contribu

tion and expenditure limits;

o Voter drives and voter education activities·

o :,\ctivities a state party committee may e~gage In to promote the party's Presidential ticket

and

o The need to keep separate accounts for federa

and nonfederal (Le., state and local) election

activities.

Additional copies of the videotape are avail

able upon request from the FEC's Information

Services Office by calling: 202/376-3120 or, tol

free, 800/424-9530. Produced by, the FEC, the

tape may be duplicated without restriction.

Bulk Rate Mail

Postage and Fees Paid

Federal Election Commission

Permit Number G-31