FEDERAL ELECTION COMMISSION

5 ADl7ISORY OPINICIffi

9 PUBLIC APPEARANCES

STATISTICS

2 18-Month Candidate and party Activity

PUBLICATICNS

1 IRS Information Available fram FEC

1 1992 Presidential primary Results

REt'ORI'S

1 Reports Due in October: Reminder

1 North Dakota Special Election

PUBLIC FUND:mJ

4 september Matching Fund payments

4 Hearing on Simon Repayment Determinatio

TABLE OF <XNImI'S

15 INDEX.

a:mtT CASES

10 Fee v. political Contributions Data

11 Common Cause v. FEe

12 Fee v. Friends of Isaiah Fletcher

12 New Litigation

<XJltPLIANCE

12 Nonfilers

12 MURs Released to Public

999 E StreetNW

PUBLICATIONS

KlR'IB DAKOrA SPECIAL ELECTI~

A special general election will be

held in North Dakota to fill the seat

formerly held by Senator Quentin N.

Burdick, who died Spetember 8. Call

the FEC for reporting information.

, REt'ORI'S lXJE IN 0C'ImER: Rm'lIND!!:R

Quarterly, monthly and pre-general

election reports are due in October.

To find out what reports your committee must file, see the September

Record article on reporting (pages

6-7), which shows the reporting schedule for October through January. Or

call the Commission: 800/424-9530 or

202/219-3420.

October 1992 Washington DC 20463 Volume 18,Number 10

----------------- 1992 PRESImNrIAL PRIMBY' RESULTS

The FEC recently released the official

election results of the 1992 Presidential

primary elections, which were held in 39

states, the District of Columbia and Puerto

Rico. The publication lists the total

number of votes cast in each race as well

as the total votes and percentage of votes

each candidate received. Totals for write

in votes, "uncommitted votes" and other

categories of votes are also listed. The

names of individuals who received write-in

votes are listed if the state provided tha

infonnation.

To order a free copy of 1992

Presidential Primary ElectionlResults, cal

800/424-9530 (ask for Public Records) or

202/219-4140.

IRS INPORMATIOO AVAIIABLE F:lUt FEe

The FEe is taking orders for an Internal Revenue Service document, "Election

Year Issues," which discusses the prohibition on political campaign activities of

501(c)(3) organizations, the taxation of

political organizations, and the political

campaign activities of other 501(c) organizations. Excerpted fram the IRS training

manual entitled Exempt Organizations, the

article was written by the Exempt Organizations branch, Technical Division.

To order the document at $4.75 per

copy (based on the standard photocopying

charge of 5 cents per page), call the FEe

at 800/424-9530 (ask for Public Records) or

202;219-4140. Visitors to the Public

Records Office may wish to photocopy only

selected portions of the document.

The FEC makes this document available

for information purposes only as a courtesy

to political committees. Readers should

carefully note the FEC disclaimer attached

to the document. Questions on the Internal

Revenue Code should be addressed to the IRS

by calling 202/622-7352 or 622-8095. The

FEC has no jurisdiction over tax matters.
October 1992 FEDERAL ELECTION COMMISSION Volume 18, Number 

Federal Election Ccmni.ssion. 999 E Street, Mil, washington, OC 20463

800/424-9530 202;219-3420 202;219-3336 (TDD)

1968 1990 1992

o

150

3001-----------

50

100

200

3501-------------

250

The Republicans spent $136 million and

had $18 million cash on hand, while the Democ~ats spent $58 million and had $6

million cash on hand.

An AUgust 5 press release includes

summary tables comparing activity of the

two major parties ove~ four election

cycles. The release also provides summary

information on the nonfederal accounts of

the national party committees for the 199

92 election cycle, the first cycle when

these committees were required to ~eport

their nonfederal activity.

Millions of Dollars

400

House and Senate ActiVity

First 18 Months of Election Cycle

_Receipts

_ Disbursements

2

walter J. stewart, Secretary of the Senate,

Ex Officio Commissioner

Donnald It. Anderson, Clerk of the House of

Representatives, Ex Officio Commissioner

Joan D. Aikens, Chairman

Scott E. 'IboDas, Vice Chairman

Lee .Ann Elliott

Danny L. JIlcDOna1d

John warren McGarry

Trevor Potter

CANDIDt\TE .AND PARTY C<:I9nTTEE ACTIVITY

'llIR(U;H JUNE 30, 1992

In early August, the FEe Press Office

released financial data on the activity of

1992 House and Senate campaigns and party

committees through June 30, 1992, the first

18 months of the 1991-92 election cycle.

To order the press releases, call

800/424-9530 (ask for Public Records) or

2021219-4140.

Growth in Bouse and senate Activity

During the first 18 months of election

cycle, 1992 House and Senate campaigns

raised $90 million more and spent $96

million more than Congressional campaigns

had during the same period in the pcevious

election cycle. The graph below illustrates this growth. All three graphs are

based on an August 9 press release.

The press release also provides the

following 18-month statistics:

o An overall financial summary of House and

Senate campaign activity formatted by

party affiliation and candidate status

(incumbents, challengers, open seat

candidates);

o Summary data on House and Senate activity

over several election cyclesl

o Financial summaries of each 1992 House

and Senate campaign; and

a Rankings of House and Senate campaigns

based on: receipts, contributions from

individuals, contributions from PACs,

disbursements, cash on hand and debts.

Republican party Leads in FUndraising

By June 30, 1992, Republican party

committees had raised $95 million more than

Democratic committees. During the first 18

months of the 1991-92 election cycle,

Republican party committees nationwide

raised $157 million compared with the $62

million raised by their Democratic

counterparts.
October 1992 FEDERAL ELECTION COMMISSION Volume 18, Number 10

Median Receipts of House Campaigns 1

e First 18 Months of Election Cycle

_Democrats

_ Republicans

88 90 92

Open-Seat Candidates

90 92

Challengers

90 92 88

Incumbents

88

Thousands of Dollars

300,----------------------------------------

270

240

2101------

1801------

1501------

1201-----

90

601-----

301---

QL...-_

I Graph shows activity of House campaigns that reported raising some money by June 30 of the election year.

l Graph includes only those challengers and open-seat candidates whose campaigns reported raising at least $50,000 by June

30 of the election cycle.

2 Number of open-seat Congressional Districts (no incumbent running): 1988-32; 1990-35; 1992-69.

3

Number of House Candidates 1

e First 18 Months of Election Cycle

435,------

400

200

100

o

Incumbents

I_J1988

_1990

_1992

Challengers Open Seat Candidates 2
October 1992 FEDERAL ELECTION COMMISSION Volume 18, Number 

- -- -- - .......--,....,-~--~- ~~- - - - - y-~~-..

-_~~ :C~, :_.;~;i,~_"_-

..:o...~ ..._ •• _ _ __ ....._~_~~~____ _ ~~

SEP'IDmER M'IOIING EUm PAYMENTS

On August 31, the Commission certified

over $2.6 million in matching fund payments

to 1992 Presidential primary candidates.

The u.s. Treasury made the payments early

in September. As of the September payment,

primary candidates had received $36.7 million in matching funds, as shown in the

table. Candidates have requested $3.5 million for the October payment.11

Now that the Democratic and Republican

nomdnating conventions are over, the candidates listed in the table are ineligible to

receive matching funds except to retire

debts incurred before the candidate's date

of ineligibility and to wind down the

primary campaign. candidates may continue

to make matching fund submissions through

March 1,1993. However, only contributions

received and deposited by December 31,

1992, may be matched.

september Cumulative

candidate payment Total

Rep.Jblicans

Patrick Buchanan $ 420,544 $ 4,033,240

George Bush 175,216 9,677,368

De8)Crats

Larry Agran 0 269,692

Jerry Brown 0 4,239,405

Bill Clinton 1,786,327 9,710,954

Tom Harkin 19,347 1,932,761

Bob Kerrey 32,046 1,959,598

Paul Tsongas 48,232 2,850,513

Douglas Wilder 0 289,027

New Alliance party

Lenora FUlani 166,843 1,756,618

Total $2,648,555 $36,719,235

lAmOunt includes a threshold submdssion for

matching fund eligibility filed by John

Hegelin of the Natural Law party.

4

.~ CN SDDf REPAYMENI' IlE'.l'ERMINM'I(JIl

In an August 5, 1992, presentation,

Senator Paul Simon's 1988 Presidential

committee urged the Commission to reduce

the amount the conmittee must repay to the

U.S. Treasury. In an initial determination, the agency said that the committee

had to repay $430,465. Most of that

amount--$367,906--was the pro rata portion

of over $1 million spent in excess of the

Iowa and New Hampshire expenditure limits,

based on the final audit report.1I The

commdttee, Paul Simon for President, had

received $3.7 million in matching funds fo

the 1988 primary campaign.

In her presentation, Leslie J. Kerman,

counsel £o( the committee, disputed the

repayment amount, claiming that:

o Several thousand dollars of television

advertising costs should not be counted

against the state limts because the

expenses were covered under a proposed

50-percent compliance or fundraising

exemption. The final audit report, whic

contained the FEe's initial determinations, found that the media costs were

not entitled to any exemptions.

o The expenses of a Rock Island, Illinois,

office, located just outside Iowa, shoul

not be allocated to the Iowa limit

because the office functioned as a fundraising and volunteer recruitment center

for the entire campaign and played a key

role in the Illinois campaign. The audi

report based the allocation on documenta

tion indicating that the office was

invelved in the Iowa campaign but noted

that the allocation could change if the

committee submitted documentation showin

that some of the office's activity was

directed at the Illinois campaign.

o The expenses of a Boston office should

not count against the New Hampshire limi

because the office focused on the Massachusetts campaign effort, contrary to th

audit report, which identified evidence

indicating that the office was active in

the New Hampshire campaign but found no

evidence indicating that the office

conducted Hassachusetts activity. Aga in

the audit reported noted that the alloca

tion could change if the committee

submitted documentation to substantiate

its claim.

1A ratio formula is used to calculate what

portion of the excessive expenditures

represented the payment of public funds as

opposed to private contributions. That

amount--the pro rata portion-is subject t

repayment.
October 1992 FEDERAL ELECTION COMMISSION Volume 18, Number 10

Ms. Kennan also argued that all of the

committee's Iowa and New Hampshice spending

was subject to a 50-percent fundraising

exemption because the campaign activities

in those states were related to the need to

raise funds.

Ms. Kerman said that she would submit

documentation to support her claims with

respect to the Rock Island and Boston

offices. In keeping with Commission policy, the documents were due five business

days after the presentation, but Ms. Kerman

requested an additional five business days.

The Commission denied the request, noting

that, with one exception, the issues raised

in the presentation had already been

addressed in both the interim and final

audit reports. The agency pointed out that

the committee had received three extensions

of time-totaling over £i Ve months-to

respond to the interim audit report and a

two-month extension for its response to the

final audit report. Thus, there was ample

opportunity to submit supporting documentation.

Before making a final repayment determination, the Commission will consider the

committee's oral and written responses.

ADVISORY OPINICN RQJESTS

Recent requests for advisory opinions

(ADRS) are listed below. The full text of

each AQR is available for review and comment in the FEC's Public Records Office.

ADR 1992-35

Exemption from $1,000 contribution limit

for independent candidate. (Requested by

Jon Khachaturian, Date Made Public:

September 14, 1992; Length: I page plus

attachments)

Correction

The September 1992 issue reversed the

numbers of two advisory opinion requests

that appeared on page 8. AOR 1992-31

should have been AOR 1992-32, and AOR

1992-32 should have been AOR 1992-31.

ALTERNM'IVE DISPOSITICN OF NJR

NJR 1992-18: ~ign's Use of Property

Jointly owned by candidate

and Spouse

congressman Richard Ray withdrew his request by letter of August 28, 1992.

5

ADVISORY' OPINlQJ SUMMARIES

NJ 1992-20: Funds from llIembers' Corporate

Pcactices used to Pay Expenses

of Membership Organization's

PAC

The American Speech-Language-Hearing

ASsociation (ASHA) is an incorporated

membership organization whose members are

individual professionals. Some individual

members maintain incorporated private

practicesI which are not members of ASM.

In response to solicitations for contributions to its separate segregated fund, ASHA

sometimes receives checks made out to

A$HA-PAC that are drawn on members'

incorporated practice accounts. These

checks may be used to pay the PAC'S

administrative and solicitation expenses

after the checks are endorsed to ASHA,

deposited in the ASHA general treasury fund

and recorded in a separate account used to

defray such expenses-.!! This treatment of

private practice checks is permissible in

view of similar conclusions reached in AOs

1990-4 and 1982-61.

ASHA members who are presidents of

incorporated state associations, which are

not ASHA members, sometimes contribute to

ASHA-PAC by checks drawn on the association

accounts. unlike private practice account

checks, howeverI these checks may not be

used to pay ASHA-PAC's administrative

expenses.

Although neither the associations nor

the private practices are members of ASHA,

a private practice account--unlike an

association account--is under the proprietary control of the member; the use of the

account to make donations for ASHA-PAC'g

administration is inextricably identified

with the member's professional vocation.

As such, the activity is materially

indistinguishable from donations made by

corporate members of a trade association to

pay the expenses of the association's

separate segregated fund. See ADs 1986-13,

1982-36 and 1980-59.

Date Issued: August 10, 1992; Length:

4 pages.

lAdvisory Opinions continued)

l ASHA plans to inform member-contdbutors

using private practice accounts of how ASHA

will handle their contributions and give

them the opportunity to have the checks

returned. Although this type of notification is not required by FEe regulations,

the Commission noted its approval of the

practice.
October 1992 FEDERAL ELECTION COMMISSION Volume 18, Number 

resulting transfer from the nonfederal to

the federal account.

The opinion included further specific

reporting instructions and sample forms for

guidance. Date Issued: August 13, 1992;

Length: 8 pages, including sample forms.

N) 1992-28: Repayment of campaign's

Loan to Nonprofit Corporation

Because loan repayments made from corporate

funds are prohibited, the Leahy for u.s.

Senator committee may not receive repayment

of a $50,000 interest-free loan to the

Vermont Corrnnunity Loan Fund (the Fund), a

nonprofit corporation that promotes lowcost housing. See 11 CFR 100.7(a)(I)

(i)(E) and AD 1981-17. See also AFL.CIO v.

FEC and MUR 2547.1/ - AIthough the conmittee has already

provided $50,000 to the Fund, a letter of

intent included in the advisory opinion

request states that the loan is contingent

on the Commission's approval of the transaction; if the Commission disapproves, the

Fund must return the money to the committee

within five business days. Given the

special circumstances here , the committee

may obtain the return of the $50,000 from

the Fund within five business days aftec

the receipt of this advisory opinion.2/

The Commission expressed no opiniOn on

the application of Senate rules to the

activity, or any tax ramifications, since

those issues are outside its jurisdiction.

Date Issued: August 13, 1992; Length: 4

pages.

IThe court's opinion in AFL-CIO v. FEC, 628

F.2d. 97 (D.C. Cir., 1980), and MUR 2547

take the view that the repayment of a loan

owed by a corporation or a union to its

separate segregated fund is prohibited.

2A1though the loan is prohibited, other

options are open to the committee. It may

make an outright donation to the Fund, or

it may allow committee funds to be used as

collateral for a bank loan to the Fund. In

the latter case, however, if the Fund

defaults and the bank attaches the collateral, the committee may not receive repayment from the Fund or from any person

acting on the Fund's behalf, given the

prohibition in 11 CFR 100.7(a)(I)(i)(E).

a

NJ 1992-29: Late Deposit of

Contributions

The Liz Holtzman for Senate committee mus

refund contribution checks that were

received in late 1991 and early 1992 but

not deposited by the treasurer until June

12, 1992, when they were discovered in a

former employee's desk drawer. (The

committee did not spend the funds pending

the Commission's response in this advisor

opinion. )

Under 11 CFR 103.3(a), all receipts

must be deposited within 10 days of the

treasurer's receipt. Treasurers may

authorize agents to receive contributions

and make expenditures. See 2 U.S.C.

§432(a); 11 CFR 102.9. Moreover, previou

advisory opinions have recognized that th

receipt of contributions by a co~ttee

agent is the equivalent of the treasurer'

receipt. ADs 1989-21 and 1980-42. In th

case, the employee who failed to deposit

the contributions within 10 days appears 

have been an authorized agent of the trea

urer, and his or her failure is therefore

imputed to the treasurer.

Furthecmore, the co~ttee's proposal

would be contrary to the rationale behind

the 10-day deposit rule, as stated in the

Explanation and Justification: (1) "to

encourage the prompt disposition of contr

butions rather than permit 'stale' checks

to be kept lying around or lost"; and

(2) to ensure that reported receipt dates

are close to actual receipt dates.

Date Issued: August 2B, 1992; Length

3 pages.

NJ 1992-34: Use of Government car for

campaign Travel

Michael N. castle, the Governor of

Delaware, is seeking election for the atlarge House seat from Delaware and uses a

state-provided automobile for his daily

travel, both travel related to his House

campaign and travel related to gubernator

ial business. His committee, the Castle

for Congress Fund, must reimburse the sta

for campaign-related trips at a cost-permile rate based on the daily commercial

rental charge for a comparable vehicle.

CCIIIllercial Rate for Government Conveyance

When using a government conveyance fo

campaign travel, a committee must reimbur

the government at the rate for a "compara

ble commercial conveyance." 11 CFR

106.3(e). In this case, the rate is the

daily commercial rental rate for a c~

parable automobile (e.g., in terms of mak

and model). 11 CFR 100.7(a)(I)(iii)(8) a

AD 1984-48. Because FEC regulations
October 1992 FEDERAL ELECTION CONIIVIISSION

require a commercial rate, the committee

may not use two other reimburaement rates

it had proposed (1) a rate based on the

actual per diem cost to the state for

leasing the car from a local dealer on an

annual basis; or (2) the IRS mileage deduction rate.

Cost-Per-Mile for Mixed campaign and

Noncampaign Travel

under FEC regulations, when a trip

involves both carrq;>aign and noncarnpaign

stops, campaign-related expenses are

calculated using the cost-per-mile of the

transportation used. In this case, the

cost-per-mile can be determined by dividing

the daily commercial rental charge by the

total number of rtiles traveled that day.

The actual cost for campaign

travel-the amount that must be reimbursed

to the state-is equal to the cost-per-mile

multiplied by the mileage for campaignrelated stops. Mileage for campaignrelated stops is calculated by starting at

the point of origin, determining the

distance to each CaMpaign-related stop, and

ending at the point of origin.!/ 11 CFR

106.3(b)(2) •

ExaDrple

Assumc that the commercial rental rate

for a comparable car is $150 a day. On a

particular day, the Governor travels 150

miles. Therefore, the cost-per-mile is one

dollar (daily rental charge divided by

total miles).

During thAt day, he makes the following

campaign and noncaIlpaign stops:

o From Dover (point of origin) to Point A,

20-mile trip. noncanlpaign stop;

a From Point A to Point B, 30-mile trip,

campaign stop.

a From Point B to Point C; 20-mile trip,

campaign stop.

a Point C to Point D, 40-mile trip.

noncampaign stop.

o Back to Dover from Point D. a 40 mile

trip.

To deterudne the Governor'S campaignrelated mileage, the committee must create

a fictional itinerary from Dover to each

campaign stop and back to Dover, as foUows~ nom DOver to Point B (say, 40

~en a candidate conducts any carnpaignrelated aetivity on a stop, the stop is

considered campaign related, although

incidental political contacts made during a

noncampaign stop do not convert it into a

campaign stop. 11 CFR 106.3{b)(3). See

also the !Xplanation and Justification for

this regulation.

9

Volume 18, Number 1

miles); to Point C (20 miles) and back to

Dover (say 60 milesl. Thus, the campaign

mileage totals 120 miles, although the car

actually traveled 150 miles that day. At 

cost-per-mile rate of one dollar, the

commdttee must reimburse the state $120.~/

No Reimbursement for State-Assiqned Driver

The committee does not have to

reimburse the cost of the state police

officer who drives the Governor's car

because the driver is authorized by the

state. 11 CFR 106.3(e).

Recordkeeping and :Reporting

All expenditures for campaign-related

travel are reportable. 11 CFR l06.3(a).

The commdttee should retain the records on

which it bases it travel expense determina

tions and allocations. See 11 CPR

104.14(b) and AD 1984-48.

Date Issued: August 28, 1992; Length:

4 pages.

PlJ3LIC APPE'J\R1INCES

10/6 Law Enforcement Coordinating

Committee, U.S. Depa~tment of

Justice

Houston, Texas

William Kimberling, Clearinghouse

10/7 American University

Washington. DC

Kathlene Martin, Information

Services

Michael Dickerson. Public

Disclosure

10/19 American university

washington, DC

Janet Hess, Infor~ation Services

Michael Dickerson, Public

Disclosure

2The committee must also reimburse the

state for gasoline. The committee may use

the usual and nOrn'lal conunercial charge for

a gallon of gas and determine the overall

miles per gallon, thus arriving at the

cost-per-ndle. The committee then

multiplies that figure by the mileage of

the fictional campaign trip.
October 1992 FEDERAL ELECTION Corv1MISSION Volume 18, l\Jumber 10

FEe v. POLITICAL CCNl'RInuTICI'S Dl\TA, INC.

On July 30, 1992, the u.s. District

Court for the Southern District of New York

denied an application filed by Political

Contributions Data, rnc. (PCD) for an award

of over $55,000 in attorneys' fees and

other costs, which would have been payable

by the FEe. The court found that the

application was untimely. Further, the

court found that, even if it had been filed

on time, the application would have to be

denied because the FEC was "substantially

justified" in bringing suit against PCD.

Background

In this suit (PCD), the district court

and the court of appeals ruled on the FEe's

interpretation of the "sale or use"

restriction at 2 U.S.C. §438(a)(4). under

that provision, individual contributor

information {name, address, occupation and

employer l copied from FEe reports "may not

be sold or used by any person for the

purpose of soliciting contributions or for

commercial purposes.... " PCD's parent company, Public Data

Access, Inc. (FDA), requested an FEC

advisory opinion as to whether FDA's

proposal to sell specialized contributor

lists, compiled from FEe reports (as

recorded on FEC cOIl'plter tapes 1. would

comply with §438(a}(4). In AO 1986-25, the

FEe concluded that the proposed use was

prohibited because it constituted a

"connnercial purpose."

After the advisory opinion was issued,

and despite its conclusion, FDA formed PCD

to market the contributor lists. A short

time later, the National Republican

Congressional Comnittee filed an

admdnistrative complaint against PCD,

alleging violations of §438(a)(4). The

Commission found probable cause to believe

that PCD had violated the "cammer-cial

purpose prohibition and, after unsuccessful attempts to reach a conciliation

agreement, filed suit against PCD.

District Cou.:-t Decision. The district

court, on December 10, 1990, granted

summary jUdgment to the FEC, finding that

the agency's interpretation of "commercial

purpose" was reasonable and that PCO'S sale

of the contributor lists could reasonably

be characterized as for "cOltllTercial

purposes. I!

10

The court also ruled that the FEe had

properly concluded that the "media

exemption" in FEe regulations did not apply

to PCD's lists. Under the media exemption

(11 eFR l04.15{c)}, the use of contributor

information copied from FEe reports is

pennissible "in newspapers, magazines,

books or other similar cOImmlnications.•. as

long as the principal purpose of such

communications is not to communicate any

contributor inforrnation .•.for the purpose

of soliciting contributions or for other

conmercial purposes."

Court of Appeals. On August 21, 1991,

the U. S. Court of Appeals for the Second

Circuit reversed the district court's

decision. The court held that PCD's sale

of the contributor lists was permdssible

because of the absence of addresses and

phone numbers and the inclusion of a

warning against the use of the information

for solicitation or commercial purposes.

These safeguards, in the court's view,

ensured that the lists would be used for

informative purposes rather than for

commercial purposes. Furthermore, the

court found "unreasonable" the FEe's

interpretation of the media exemption in 1\0

1986-25--that the exemption does not apply

to communications using FEe contributor

information to further sales. The court

found this interpretation contrary to the

broad disclosure purpose of the Federal

Election Campaign A.ct (FECA).

Timeliness of Application for

Attorneys' Fees

on December 19, 1991, PCO applied to

the district court for an award of $55,022

in attorneys' fees and other expenses

pursuant to the Equal Access to Justice

Act. To be considered by a court, an

application for: attorneys' fees must be

filed within 30 days of the date the

judgment has become final. Citing judicial

precedent, the district court said that "a

judgment has been found to be final when

the 'losing party asserts that no further

appeal will be taken.'" The court found

that the FEe provided "clear and unequivocal notice" that it would not appeal the

court of appeals' decision in a letter from

the FEe's attorney to PCD' 5 attorney. '!he

letter, which stated the FEC's reasons for

not pursuing an appeal, was dated October

30, 1991; accordingly, the court found that

the deadline expired 30 days later, on

November 29, 1991, nearly a month before

PCD filed its application for attorneys'

fees. The court therefore denied the

application because it was filed late.
October 1992 FEDERALELECTION COMMISSION Volume 18, Number 10

SUbstantially Justified Government

Position

The court alternatively held that, even

if the application for attorneys' fees had

been filed on time, the application would

have to be denied on the grounds that the

FEC's position in the litigation was

nsubstantially justified. It

In determining whether the FEC's

position was justified, the court first

reviewed three factors based on a previous

court of appeals opinion, spencer v. NLRB:

(1) the clarity of the law; (2) the foreseeable length and complexity of the

government's action; and (3) the consistency of the government's position.

The court found that the FEe satisfied

each of these factors. First, when the FEe

brought sui t, 10the re was Li ttle congressional or judicial guidance concerning the

relevant statutory provisions." Second,

"(tJhe record indicates that the FEe did

not engage PCD in a foreseeably lengthy or

cOll"plex proceeding." And third, "[s)ince

the FEC had not previously interpreted its

[media exemptionJ regulation •.•prior to AD

1986-25 •••it is not possible that the FEe's

posl t i on waS inconsistent. It

Beyond the Spencer analysis, the court

found that the FEe's posi tion had a

"reasonable basis both in law and fact" and

"could satisfy a reasonable person," the

criteria set forth by the SUpreme Court in

Pierce v. underwood fOt" deteIffiining whether

a position is oIsUbs tant i ally justified."

FEC's Position Had Reasonable Basis in

Law. In examining the FEC's interpretation

of the law in order to oeterndne its

reasonableness, the court noted that, both

in 11 eFR l04.l5(c) [the media exemption)

and in AD 1986-25, "the FEC was forced to

reconcile the two conflicting goals of

FECA, namely' total' disclosure and the

protection of public-spirited contributors.

In trying to accommodate these competing

objectives, the FEC fashioned a distinction

between use of contributor information

which was 'incidental' to sales, and use

for: which the 'primary focus' was creating

sales (the former deemed permissible and

the latter prohibited). AD 1986-25, at 4."

The court of appeals, which found this

distinction too narrow, "thus placed

greater emphasis on the importance of

public disclosure than the FEe had," the

district court stated. However, the

district court observed that the agency

"had not abandoned the pursuit of

disclosure ... [but\ simply had attempted to

establish a cottq;lromise •.•. " The court

therefore found that "the Fee's position

11

had a reesonable basis in law and was ,substantially justified. '"

FEe's Position Was Reasonable as

Applied to PCO's Activities. The court

also found reasonable the factors upon

which the FEe had relied in concluding that

PCO was similar to a list broker: t..he

format of POD's lists; the specialization

of the lists to accommodate clientsi the

incorporation of PCD for the purpose of

marketing lists; the composition of its

clients, two-thirds of whom were political

committees, candidates and consultants "who

t"easonably could be expected to make

solicitations"; and the stated intention of

two clients to use ~CD's li~t to solicit

contributions, as the FEC's investigation

had revealed.

The court of appeals rejected the FEe's

conclusion in N) 1986-25 partly because

only two clients had purchased PCD lists

for sol.Icrtatioo purposes, and neither had

used the lists fat" that purpose. "But that

some of PCC's clients were interested in

the lists for the exact purpose prohibited

by 2 U. S. c. §438( a) (4)," the district court

stated, "indicates that the FEe did have a

reasonabl.e basis in fact to believe that

PCD's activities way have violated the

prohibition. Ai though PCD' s lists did not

contain street addresses or telephone

numbers, they were hardly useless-to a

buyer aiming to make solicitations...• 1/

CCIft:Ii CAUSE v. FEe (91-2914)

As stipulated by both parties, the u.s.

District Court for the District of Columbia

dismissed this case with prejUdice on July

31, 1992, without ruling on the issues.

The FEe and COIllTlOn Cause stipulated the

dismissal in light of the recent court of

appeals decision in FEe v. National

Republican Senatorial c~ttee (NRSC).l/

Common Cause had challenged the FEe's

dismissal of a complaint alleging that the

NRSC had exceeded the contribution lindts

by exercising "direction or control" over

earmarked contributions raised in a 1990

fundraising pmgram.2/ See 11 CFR llO.6{d)

( 2) • However, in the NRSC case, decided on

June 12, 1992, the U.S. Court of Appeals

for the District of Columbia Circuit held

that the NRSC had not exercised direction

or control in a somewhat similar fundraising program that took place in 1986.

(Court Cases continued)

lsee the August 1992 Record, page 11.

2see the January 1992 Record, page 9.
October 1992 FEDERAL ELECTION COMMISSION

FEe v. FRImDS OF lSAlAB FLE'lUIER CCI'IMI'rl'EE

This case ·.-laS closed on August 6, 1992,

when the FEe notified the U.S. District

Court for the District of Maryland that the

committee and its treasurer, Isaiah

Fletcher, had paid a court-ordered penalty

to the satisfaction of the agency. The

FEe's acknowledgment of satisfaction

followed a February 1991 order holding

defendants in contempt for failing to pay a

penalty assessed in April 1989 for report1n9 violations (Civil Action NO. PN B8-

2323) •

HOi LITIGATICD

Akins, Ball, et a1. V. FEe

Pursuant to 2 U.S.C. §437g(a)(S)(C),

James .E:. Akins, George Ball and five other

plaintiffs ask the court: (I) to declare

that the FEe's dismissal of their administrative complaint was in violation of

2 U.S.C. S437g; (2) to order the agency to

comply with §437g within 30 days; and

(3) to award to plaintiffs their costs and

attorneys' fees.

In their a~nistrative complaint, MUR

2804, plaintiffs alleged that the American

Israel Public Mfairs Cornmittee (AIPAC), an

incorporated lobbying group, violated the

Federal Election Campaign Act by failing to

cegister as a political committee and by

making prohibited expenditures. They also

alleged that AIPAC and 27 political committees were affiliated with one another. On

December 19, 1989, the Comncission found no

reason to believe the organizations were

affiliated. After investigating the

remaining violations, the Commission, on

June 16, 1992, found no probable cause to

believe that AIPAC was a political committee but did find probable cause with

respect to prohibited contributions by

AIPAC. However, the agency took no further

action with respect to this finding

because, as explained in a Statement of

Reasons dated July 28, 1992, the situation

presented a "close question," and clacifying regulations should be implemented

before imposing penalties.

In their court case, plaintiffs repeat

the allegations 1lIade in their administrative complaint and claim that the FEe's

decisions in the matter were arbitrary,

capricious and contrary to law.

u.s. District Court for the District of

Columbia, Civil Action No. 92-1864, August

10, 1992.

12

Volume 18, Number 1

FEe PUBLISH&S l'DWlLERS

The Commission recently cited the co~

mittees of the candidates listed below for

failing to file reports. The names of

authorized committees that fail to file

reports are published pursuant to 2 u.s.c.

§438(a)(7). Enforcement actions a9ainst

nonfilers are pursued on a case-by-case

basis.

Office Report Not

candidate SOUght Filed

Gorham House-QK/02 pre-primar

Hill House-oK/02 pre-Primar

Hou9htcn House-N'f/31 pre-primar

Jones House-FL1l7 pre-Primar

Oberst House-SC/Ol pre-Primar

Vardeman House-QK/02 pre-primar

JlIURS RELEASED '10 'lfIE PUBLIC

Listed below are MURS (FEe enforcement

cases) recently released for public review

The list is based on the FEe press release

of August 14 and September 4 and 11, 1992.

Files on closed MURs are available for

review in the Public Records Office.

Unless otherwise noted, civil penaltie

resulted from conciliation agreements

reached between the respondents and the

Commission.

MUR 1461

Respondents (all in CAl: (a) Californians

for Democratic Representation; (bJ Armenia

National Committee PAC; et al. (c)-[t)

CoIPlainant: LOuis William Barnett,

National Foundation to Fight political

Corruption, Inc. (CA)

SUbject: Failure to file statement of

Organization and reports; disclaimer;

excessive and corporate contributions

Disposition: (al u.s. District Court

Judgment: $15,000 civil penalty; (b) $750

civil penalty; (c)-(t) multiple findings;

see file

MUR 160211596

Respondents: (a) Republican National

Independent Expenditure Committee, Rodney

A. smith, Treasurer (DC); (b) National

Republican Senatorial Committee {DC); et

aL (c) and (d) D~lainant5: Democratic Senatorial

Campaign Committee and Democratic

Congressional campaign Committee (DC)
,------~---~---- ---

FEDERAL ELECTION COMMISSION

•

October 1992

(1602 ); Cozmnon Cause (DC) (1596)

Subject: Affiliation; excessive contributions; independent expenditures

Disposition: (a) and (b) No probable cause

to believe; (e) and (d) no reason to

believe

MUR 2745

Resp:mdents; (a) Humphrey for Senate

campaign Committee Inc., Samuel D. Heins,

treasurer (MN); (b) Hanson '89 Committee,

victor L. Johnson, treasurer (MN);

(c) Minnesota State Democratic Farm Labor

Party; (d) LeSueur county Democratic Farm

Labor Committee (MN); at al. (e)-(f)

Cooplainant: Tony Trimble, Independent

Republicans of Minnesota and Jann L.

Olsten, National Republican senatorial

Committee (DC)

SUbject: Failure to disclose in-kind

contributions; excessive contributions

Disposition: (a) Reason to believe but

took no further action (in-kind contributions): no reason to believe (other allegations); (b) took no action; (c) reason to

believe but took no further action (phone

books): no reason to believe (other allegations); (d) reason to believe but took no

further action; (e) and (f) no reason to

believe

MUR 2810

Respondents: (a) Free the Eagle, Inc.,

Howard segermark, managing director (DC);

(b) Coalition for a Winning Ticket, Kim R.

Pearson, treasur:er

Couplainant: Department of Justice

referral

SUbject: Corporate contributions; failure

to file Statement of organization and

reports; disclaimer

Disposition: (a) $2,500 civil penalty;

(b) $3,500 civil penalty

MUR 3091

Respondents (all in FL): <aI Robert Kunst;

(b) Cure AIDS Now; (c) The oral Majority

CaDplainant: Conservative Campaign fUnd

(DC)

SUbject: Independent corporate expenditures: failure to report; disclaimer

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

took no further action

MUR 3099

Respondents (all in FL): (a) Dick Leonard

Group II, Inc. (DLG II); (b) Dick Leonard,

chainnan, DUG II; (e) Whitney Babcock,

president, DUG IIi (d) William Bush,

executive director, DUG II; et al. (e)-(q)

Complainant: Department of JustiCe

referral

13

Volume 18, Number 10

SUbject: Corporate contributions; contributions made in names of others

Disposition: (a) and (b) joint $1,000

civil penalty; (c) $500 civil penalty;

(d) $500 civil pen~lty; (e)-{q) reason to

believe but took no further action

JIIlUR 3140

Respondent!; (all in NJ}: (a) zimmer for

Congress, Maria Holliday, treasurer;

(b) Friends of Dick Zimmer, Judith A.

Allen, treasurer; et al. (e) and (d)

CCEIp1ainant: Raymond Babinski, treasurer,

Chandler for congress (NJ)

SUbject: Excessive contributions; improper

transfers

Disposition: (a) and (b) Reason to believe

but took no further action: (c) and (d) no

reason to believe

JlIUR 3348

RespoD:ients: The Cormni ttee for Quality

Hospital Care, Paul Moran, treasurer (MA)

Complainant: FEe initiated

SUbject: Failure to disclose source of

initial cash on hand; failure to file

reports on time

Disposition: $7,500 civil penalty

MUR 3369

Respondents: CUrry for Congress, Vincent

G. Thomas, treasurer (VA)

CClDplainant: FEe initiated

Subject: Excessive contributions;

contributions by a foreign national;

inaccurate disclosure

Disposition: Reason to believe but took no

further action

MUR 3445

Respondents: (a) Frank Riggs (CAl;

(b) Frank Riggs for congress Committee,

Daniel Jacob Christensen, treasurer (CA);

CCIIplainant: Cindy Claymore watter (CA)

SUbject: Failure to file 48-hour notices;

inaccurate disclosure

Disposition: (a) no reason to believe; (b)

reason to believe but took no further

action {disclosure}: no rea~on to believe

(other allegations)

J«JR 3454

Respondents: A1 Brown for Congress

Committee, Nancy Lampton, treasurer: (KY)

Complainant: Ladonna Y. Lee on behalf of

Eddie Mahe Company (DC)

SUbject: Failure to report 3isputed debt;

inaccurate disclosure; failure to file

report

Disposition: Reason to believe but took no

further action (filing report); no reason

to believe (other allegations)

(continued)
October 1992 FEDERAL ELECTION COMMISSION

MlIR 3504

Respondents: Independent Republicans of

Minnesota, John Burger, treasurer

Complainant: FEe initiated

SUbject: Failure to file report on time

Disposition: $5,000 civil penalty

MUR 3512

Respondents: (a) Bruno's Good GoVernment

League, Glenn J. Griffin, treasurer (AL),

(b) Bruno's Inc. (AI.)

Coaplainant: FEe initiated

Subject: Failure to file reports and

Statement of Organization on time;

excessive contributions, corporate

contributions

Disposition: (a) $25.000 civil penalty; (b) $500 civil penalty

MUR 3515

Respondents: (a) Volunteers for Shimkus

Committee. patsy S. Hubbard, treasurer

(IL), (b) ICAN, Inc. (AKA Illinois

Communities in Action NOW)

CCmplainant: William P. Houlihan, sangamon

County Democratic Committee (ILl

SUbject: Corporate contribution: iJllproper

reporting

Disposition: (a) and (b) No reason to

believe

MUR 3519

Respondents: Tom Mims for Congress

Campaign Committee, Stephen Martin,

treasurer (FL)

CoIlIplainant: Russell Janutolo (FL)

SUbject: Failure to file report with

Secretary of State

Disposition: Reason to believe but took no

further action

I'IUR 3520

Respondents; (a) The President's Dione r

(AKA 1991 Republican Senate-House Dinner

Committee), stan Huckaby, treasurer (DC);

(b) The President's Dinner (~ 199Z

Republican senate-House Dinner Committee),

Stan Huckaby, Lceasurer (DC)

Complainant; Andre LeCann (DC)

Subject: Inaccurate reporting; improper

solicitation

Disposition: (a) Reason to believe but

took no further action (reporting); (b) no

reason to believe (solicitation)

lIIUR 3521

Respondents (all in CA): (a) Gloria Ochoa:

(b) Gloria ochoa for Congress; (c) Friends

of Gloria OChoa, David L. peri, treasurer

caaplainant: M.ichael A. Thomas (CA)

SUbject: Use of government facilities and

funds

Disposition: (a)-Ie) No reason to believe

14

Volume 18, Number 

MUR 3523

Respondents: California Pro Life Council

Inc., PAC (federal and nonfederal

accounts) I Andra Rory Moreno, treasurec

Calplainant: FEC initiated

Subject: Improper transfer of corporate

funds

Disposition: $4,000 civil penalty

JI!lJR 3529

Respondents: (a) Deddeh for Congress,

Barbara Hunsaker, treasurer (CA),

(b) Deddeh for Senate, Barbara Hunsaker,

t.reasurar (CA)

CCIIIplainant: Bob Filner (CAl

SUbject: Corporate contributions; failure

to disclose contributions

Disposition: (a) and (b) Reason to believ

but took no further action

MUR 3548

Respondents: Rhode Island Republican Stat

Central Connittee, Robert Goldberg, treasu

Ccq,)].ainant: FEC initiated

SUbject: Failure to file report on time

Disposition: $2,000 civil penalty

JllUR 3567

Respondents: Lily Chen for Congress, Pau

Chen, treasurer {CAl; (b) Paul Chen

ca.plainant: FEC initiated

SUbject: Excessive contributions

Disposition: (a) and (b) Reason to believ

but took no further action
FEDERAL ELECTION COMMISSION

•

•

October 1992

The first number in each citation

refers to the "number" (month) of the 1992

Record issue in which the article appeared;

the second number, following the colon,

indicates the page number in that issue.

AlJ\7ISORY OPINIWS

1991-29: Contributions received and made by

corporation's employee pledge program,

1:4

1991-32: Charges for consultant's fundraising services, 5:6

1991-33: Allocation of expenses when party

comndttee administers primary election,

1:6

1991-34: Committee sale of access to voter

data base as ongoing venture, 1:6

1991-35: Application of allocation rules

when SSF's nonfederal account pays its

own administrative expenses, 2:10

1991-36: Corporation's payment of employee's travel expenses to attend party

fundraiser, 3:5

1991-37: Nonconnected PAC' 5 payment to

incorporated firm for shared facilities

and services contributed to committees,

3:5

1991-38: Repayment of embezzled funds to

candidate committee, 3:6

1991-39: contributions suspected of being

made in names of others, 4:9

1992-1: Campaign salary paid to candidate;

reimbursements for campaign expenses, 4:9

1992-2: party reallocation of staff

salaries as fundraising expenses, 4:10

1992-3: Corporation's payment of benefits

for employeel candidate on unpaid leave,

5:8

1992-4: campaign'S payment of candidate's

living expenses and spouse's salary, 4:10

1992-5: Candidate's appearance in cable

public affairs programs, 5:8

1992-6: Honorarium paid to candidate for

speech on campaign issues, 4:11

1992-7: Corporate PAC's solicitation of

franchise personnel, 6: 4

1992-8: Tax seminars as fundraising

mechanism, 5:8

1992-9: Cooperative'S twice-yearly

solicitation through raffle at annual

meeting, 6: 5

1992-10: C~ttee's disbursement to

nonprofit voter organization, 6:5

1992-11: Computer-generated summary page

and detailed summary page, 6:6

1992-12: Candidate's future ownership of

campaign van, 7:7

15

Volume 18, Number 10

1992-14: Candidate's designation of excess

campaign funds in event of his death,

7:7

1992-15: Extension of time for redesignations of general election contributions

when candidate loses primary, 8:6

1992-16: Nonfederal contributions made by

u.S. subsidiary of foreign corporation,

8:7

1992-17: Affiliation of partnership PAC

with SSFs of the corporate partners, 8:8

1992-19: state campaign'S lease of computers to candidate's federal campaign,

9:9

1992-20: Funds from members' corporate

practices used to pay expenses of

membership organization's PAC, 10:5

1992-21: Excess campaign funds of 1994

candidate donated to §170(c) charity, 8:9

1992-23: Ads paid for by incorporated

membership organization, 10:6

1992-24: Campaign's sale of assets and

other debt retirement activities, 10:6

1992-25: utah convention as separate election, 9:9

1992-27: Retroactive allocation of

fundraising expenses, 10:7

1992-28: Repayment of campaign' 5 loan to

nonprofit corporation, 10:8

AD 1992-29: Late deposit of contributions,

10:8

AD 1992-34: Use of government car for

campaign travel, 10:8

axJRT CASES

Fee v.

- AFsCME=PQ, 1:7

- America's PAC, 7:10 - Black Political Action Co~ttee, a:13 - caulder, 8:13

- Eldredge for Congress Committee, 9:11 - Friends of Isaiah Fletcher Committee,

10:12

- International Funding Institute, 9:11

- KOpko, 8:11 - National Republican Senatorial

Comndttee (91-5176), 8:11

- NRA Political Vieto£? Fund, 1:7 - political Contributions Data, Inc.,

10:10

- Populist Party (92-0674), 5:9 - Schaefer, Friends of, 6:6 - Wright, 7:8

v. FEe

- Akins, 1:8, 3:7; 8:11

- AkInS, Ball, et al., 10:12 - Branstool, 3:8 - B~an v. FEC, 8:13 - Common Cause (91-2914), 1:9; 10:11 - Common Cause (92-0249), 3:8

- Freedom Republicans, Inc., 3:7; 6:7

- LaRouche, 4:8

(continued)
October 1992 FEDERALELECTION COMMISSION

- National Rifle Association of America

(NRA) (89-3011), 4:8 - S"Chae fer, 6: 6 - Spannaus, 6:6 - Trinsey, 3:7 - White, 7:9

REPOR'l'INJ

pre-primary, pre-runoff reporting dates

- AK date changed, 7:16

- FL date changed, 9:8

- House and Senate, 1:14 - OH, SC dates changed, 5:9

- Presidential, 2:10; 3:10

Schedule for 1992, 1:10; 3:8; 6:2; 9:6

Special election, North Dakota, 10:1

waivers. July 15 quarterly, 7:16

FEDERAL ELECTION COMMISSION

999 E Street, NW

Washington, DC 20463

Official Business

Volume 18, Numbe

SPmDIN3 LIMITS FOR 1992

Coordinated party, 3:1

Presidential, 3:14

aOo-LINE ARTICLES

Advances by staff: contribution lim!ts 

reporting, 9:10

Compliance with laws outside FEC's juris

diction, 3:12

Contributions: receipt and deposit, 6:10

Debt settlement plans: postponing paym

to creditors, 8:10

Last-rodnute contributions: 48-hour notic

required, 1:18

Names of corporate and labor PACs, 8:10

Registration by candidates and their

committees, 2:12

Bulk Rate Mail

Postage and Fees Paid

Federal Election Commission

Permit Number G-31