October 1995

Table of Contents

Commissioners

Conunissioner Potter Resigns

Compliance

Contribution Limits and Civil

Penalties

3 MURs Released to the Public

Publications

2 Eleventh Edition of the Selected

Court Case Abstracts

2 Pacronyms

Reports

2 Reports Due in October

Audits

5 Parker for Congress

5 Lynn Yeakel for Senate

Statistics

6 Senatorial Fundraising

6 Advisory Opinions

Public Funding

9 Final Repayment Determinations

for Buchanan and Bush-Quayle

10 Index

Federal Election Commission

Commissionf!rs

Commissioner Potter

Announces Resignation

On August 18, Conunissioner

Trevor Potter announced that he is

resigning from the FEe. He cited an

offer to teach at Oxford University,

England, this fall as the reason for

his departure.

Reflecting the sentiments of his

colleagues, Commission Chairman

Danny L. McDonald said, "Commissioner Potter's energy and

determination will be sorely missed.

His conunitment to addressing

difficult campaign finance issues

has been a great help during his

tenure on the Commission. We wish

Conunissioner Potter continued

success in his new endeavor."

Conunissioner Potter has served

four years as an FEC Conunissioner.

He began his term in 1991. During

1992 he served as the Vice Chairman of the Commission's Finance

Committee and Chairman of its

Regulations Task Force. He was

elected by his fellow Commissioners to first serve as FEC Vice

Chairman during 1993 and then as

FEC Chairman during 1994.

In an August 18 memorandum to

FEC staff, Conunissioner Potter said,

"It has been an enormous honor to

serve as a Conunissioner of the

(continued on page 2)

Volume 21, Number 10

Compliance

Contribution Limits and

Civil Penalties

The MURs summarized below

deal with cases in which individual

contributors exceeded contribution

limits, including their annual limits.

See page I of the April 1995 Record

for a discussion of the $25,000

annual limit for individual contributors. A brochure on the $25,000

annual limit is available through the

FEC's Information Division; call

800/424-9530 or 202/219-3420 to

order a free copy.

MUR3886

Mr. Herbert F. Collins contributed $48,500 attributed to 1992,

exceeding his $25.000 annual limit

by $23,500. Mr. Collins contended

that some of the contributions he

made in 1992 were intended as joint

contributions from his wife and him.

The contributions, however, lacked

Mrs. Collins's sign ature. Without

her signature, they could not be

attributed to her. A joint contribution requires the signature of both

contributors, either on the face of

the checks or on a letter submitted

with the checks. II CFR 110.1(k)( I).

Otherwise, a contribution is attributed to the sole signer, as happened

in this case.

(continued on page 3)
Federal Election Commission RECORD

Com i lone

(continued from page 1)

Federal Election Commission. . . . It

has been a pleasure to serve with

each of you, and I know that this

agency will continue to do its job

with vigor and distinction."

Commissioner Potter will be

teaching American Law and Comparative Political Science while at

Oxford University...

Publications

Eleventh Edition of Court

Case Abstracts Now

Available

The eleventh edition of Selected

Court Case Abstracts is now

available. This publication is a

compilation of summaries of court

cases involving issues relevant to

federal campaign finance law. Legal

Federal Election Commission

999 E Street, NW

Washington, DC 20463

800/424-9530

202/219-3420

202/501-3413 (Flashfax Service)

202/219-3336 (TDD)

Danny L. McDonald, Chairman

Lee Ann Elliott, Vice Chairman

Joan D. Aikens, Commissioner

John Warren McGarry,

Commissioner

Trevor Potter, Commissioner

Scott E. Thomas, Commissioner

John C. Surina, Staff Director

Lawrence M. Noble, General

Counsel

Published by the Information

Division

Louise D. Wides, Director

Dario Bard, Editor

2

citations and name and subject

indexes make this a valuable

research tool.

Abstract summaries are based on

past Record articles; the eleventh

edition includes cases covered

I through the February 1995 Record.

Free copies of this publication are

available from the FEC's Infonnation Division: call 800/424-9530

I (press 1 if using a touch tone phone)

or 202/219-3420...

Updated Index to PAC

Abbreviations

The Commission recently

published the 1995 edition of

Pacronyms, an alphabetical compilation of acronyms, abbreviations

and common names of political

action committees (PACs).

For each PAC listed, the index

provides the full name of the PAC,

its city, state, FEC identification

number and, if not identifiable from

the full name, its connected, sponI soring or affiliated organization.

The index is helpful in identifying PACs that are not readily

identified in their reports and

statements on file with the FEC. 1

To order a free copy of Pacronyms,

call the Office of Public Records at

800/424-9530 (press 3 if using a

touch tone phone) or 202/219-4140.

Other PAC indexes, described

below, may also be ordered from the

Office of Public Records. The cost

J Under FEC regulations, the name ofa

corporate or labor PAC must include

the full, official name ofthe connected

organization. A PAC may use an

I abbreviated name on checks and

letterhead if it is a clearly recognized

abbreviation or acronym by which the

connected organization is commonly

known. However, both the full, official

PAC name and the abbreviated name

must be disclosed in all reports,

statements and disclaimers. 11 CFR

102.14(c).

October 1995

of these indexes is shown in parentheses. Prepayment is required for

these indexes.

• An alphabetical list of all registered PACs shows each PAC's

identification number, address,

treasurer and connected organization ($13.25).

• A list of registered PACs arranged

by state provides the same information as above ($13 .25).

• An alphabetical list of organizations sponsoring PACs shows the

PAC's name and identification

number ($7.50)...

Reports Due in October

Committees of 1996 Presidential

candidates that have opted to file

quarterly rather than monthly must

file the Third Quarter report by

October 15. This report covers

activity from July I through September 30.

Monthly filers must submit their

reports, covering activity from

September 1 through September 30,

by October 20.

These are the only types of

committees that are required to file

this October.

The next monthly report is due on

November 20. The next report due

I for nonmonthly filers is the YearEnd report, which must be filed by

all committees, including monthly

filers, by January 31, 1996...
October 1995

mp iance

(continued from page J)

When Mr. Collins became aware

that he had made excessive contri -

butions, he took steps to have the

excessive contributions either

reattributed to his wife or refunded

to him, but these remedial steps

were not timely pursuant to 11 CFR

103.3(b) and 11O.1(k).

In addition to exceeding his

annual limit, Mr. Collins exceeded

his $20,000 per year limit for

national party committees and his

$5,000 per year limit for other

political committees. Again , his

efforts to reattribute the funds or

seek a refund were not timely.

All of these activities caused Mr.

Collins to incur a $20,000 civil

penalty.

MUR3929

Mrs. Elsie H. Hillman exceeded

her $25,000 annual limit by $16,670

in 1990, by $10,000 in 1991 and by

$12,600 in 1992.

In addition, Mrs. Hillman violated her $1,000 per election limit

for 1990 Senate candidate Lynn

Martin. In April 1990, Mrs. Hillman

contributed $500 to the Lynn Martin

for Senate Committee. In August

1990, she contributed $2,500 to the

National Republican Women's

Senatorial Fund . The Fund allocated

$700 of that amount to the Lynn

Martin for Senate Committee and

reported it as a contribution made by

Mrs. Hillman through the Fund.

This had the effect of placing Mrs.

Hillman $200 over her limit for

candidate Lynn Martin.

Mrs. Hillman also exceeded her

$5,000 per year limit for state party

committees by contributing $10 ,000

to the Federal Republican Committee of Pennsylvania in 1991 and

$ 10,000 to the Western Penns ylvania Victory '92 Committee in 1992.

All of these activities caused Mrs.

Hillman to incur a $32,000 civil

penalty. •

MURsReleased to the Public

Listed below are summaries of

FEC enforcement cases (Matters

Under Review or MURs) recently

released for pub lic review. This

listing is based on the FEC press

releases of August 11 and September 1, but it does not include the

three MURs in which the Commission took no action. Files on closed

MURs are available for review in

the Public Records Office.

MUR 2582/Pre-MUR 189

Respondents: (a) David C. Owen

(KS); (b) Robert and Betty Owens

and various other individuals (KS,

GA and MO); (c) Birdview Satellite

Communications, Inc. , Charles A.

Ross, David K. Hamilton and Roger

Mason, President, Birdview Satellite

Communications, Inc. (all in KS);

(d) Martha J. Hamilton and various

other individuals (all in KS)

Complainants: FEC initiated (MUR

2582); Dole for Senate Committee,

Charles L. Clinkenbeard, treasurer

(KS) (Pre-MUR 189)

Subject: Corporate contributions;

contributions in name of others

Disposition: (a) $13,000 civil

penalty; (b) civil penalties totaling

$6,800 and ranging from $100 to

$1,150; (c) knowing and willful

probable cause to believe, but took

no further action; (d) reason to

believe, but took no further action

MUR 2715/2652

Respondents: (a) DukakislBentsen

Committee, Inc. (MA); (b) Senator

Lloyd Bentsen Election Committee,

Marc L. Irvin , treasurer (TX);

(c) The Houston Chamber of

Commerce (TX)

Complainants: National Republican Senatorial Committee, Jann L.

Olsten, Executive Director (DC) ;

Representative Beau Boulter (TX)

Subject: Excessive contributionsl

acceptance of in-kind contributions

by fully federally funded campaign;

sharing of personnel and facilities;

Federal Election Commissi on RECORD

failure to allocate certain expenses

I ~roperly nonpartisan cornmunicanons

Disposition: (a) $15 ,000 civil

penalty and waiver of claims for

attorney' s fees in Dukakis v. FEe

(joint conciliation agreement for

MURs 27 1512652, 3089 , 3449 and

3562); (b) prob able cause to believe,

but took no further action in some

instances; no probable cause to

believe in other instances; (c) no

reason to believe

MUR 2984/Pre-MUR 220/2593

Respondents: (a) Robert G.Johnson

(AZ);' (b) International Real Estate

Institute, Inc. (a.k.a . International

Institute of Valuers, Inc.) (MN); (c)

Todd Publishing, Inc. (MN); (d)

National Association of Real Estate

Appraisers, Inc . (AZ); (e) National

Association of Review Appraisers

and Mortgage Underwriters, Inc.

(MN); (f) Professional Women's

Appr aisal Association, Inc. (MN);

(g) E. Kenneth Twichell (AZ);' (h)

Timothy Cloud (AZ)" and variou s

individuals; (i) International Association Managers, Inc . (MN); (j)

Vice President George Bush and

George Bush for President, Stan

Huckaby, treasurer (DC)

Complainants: John R. Lair (AR)

(MUR 2593); U.S. Department of

Labor (AZ) (MUR 2984/PreMUR

220)

Subject: Corporate contributions;

contributions in the names of others;

disclaimers

Disposition: (a-f) Knowing and

willful probable cause to believe,

(continued on page 4)

•On September J3, J993, Robert G.

Johnson pleaded guilty to committing

perjury during the Commission's

investigation and to making corporate

contributions in violation of 2 U.S.C.

§44 Jb. E. Kenneth Twichell pleaded

guilty to obstructing the Commission 's

I investigation. Timothy Cloud pleaded

guilty to allowing another to use his

name in violation of2 U.S.c. §441f

3
Federal Election Commission RECORD

Compliance

(continued from page 3)

referred to Department of Justice,

therefore took no further action;

(g) no probable cause to believe

(excessive contributions); knowing

and willful probable cause to

believe, referred to Department of

Justice, therefore took no further

action (corporate contributions;

contributions in the names of

others); (h-i) reason to believe, but

took no further action; U) took no

action

MUR3089

Respondents: (a) Dukakis for

President Committee, Inc., Leonard

Aronson, current treasurer (MA);

(b) Hector Martinez Franco and

various individuals (in PR and NY)

Complainant: FEC initiated (1988

Presidential Audit)

Subject: Contributions in the names

of others; excessive cash contributions

Disposition: (a) $15,000 civil

penalty and waiver of claims for

attorney's fees in Dukakis v. FEC

(joint conciliation agreement for

MURs 2715/2652, 3089, 3449 and

3562); (b) reason to believe, but

took no further action

MUR 3109

Respondents: (a) Affiliated National Abortion Rights Action League

organizations, Kate Michelman,

Executive Director (DC); Ruth

Ziegler, treasurer (NC); Shelley

Bain, state director (IA); (b) Harvey

Gantt for Senate Campaign Committee, Bobby T. Martin, treasurer

(NC); (c) National Abortion Rights

Action League PAC, and its treasurer (DC); (d) National Abortion

Rights Action League Foundation,

Kate Michelman, Executive Director (DC)

Complainant: North Carolina

Republican Party, Jack Hawke,

Chairman (NC); FEC initiated

(RAD)

4

Subject: Failure to register and

report; corporate contributions;

excessive contributions; failure to

report contributions

Disposition: (a-b) Reason to

believe, but took no further action;

(c-d) took no action

MUR3228

Respondents: (a) Dahlson for

Congress , Alfred L. Nilsson,

treasurer (CA); (b) Roy Dahlson

(CA) ; (c) Jack Mayesh Wholesale

Florist, Inc. (CA )

Complainant: FEC initiated (RAD)

Subject: Corporate contributions;

misreporting

Disposition: (a-c) Reason to

believe, but took no further action

MUR3241

Respondents: (a) The Honorable

Thomas Lantos (CA); (b) Tom

Lantos for Congress Committee,

Katrina Lantos-Swett, treasurer

(CA) ; (c) Dick Swett for Congress

Committee, Katrina Lantos-Swett,

treasurer (NH) ; (d) Democratic

National Committee, Robert T.

Matsui, treasurer (DC); (e) New

Hampshire Democratic State

Committee, Robert M. Walsh,

treasurer (NH); (f) Michael Rowan

Group, Inc. (NY) and various

individuals; (g) Feinstein for

Governor, Henry E. Berman,

treasurer (CA); (h) Timber Dick

(CA) and Phil Swett, Jr. (VT); (i)

The Honorable Richard Swett (NH);

U) Katrina Lantos-Swett.(NH) . .

Complainant: G. M. (BIll) Quraishi

(CA)

Subject: Personal use of campaign

funds; failure to continuously report

debts; excessive contributions;

corporate contributions; failure to

report earmarked contributions;

failure to report expenditures

accurately; failure to allocate

federallnonfederal expenses accurately

Disposition: (a-f) Reason to believe, but took no further action; (gh) no reason to believe; (i-j) took no

action

October /995

MUR3426

Respondents: (a) Murray for

Congress, Lenora K. Drossman,

treasurer (OH); (b) Third National

Bank of Sandusky (OH); (c) UAW

V CAP, Bill Casstevens, treasurer

(MI)

Complainant: FEC initiated

(Audit)

Subject: Contributions by national

bank; excessive contributions;

failure to disclose candidate loans;

failure to identify loans from the

candidate; failure to disclose loans

as outstanding debts; failure to

itemize contributions and expenditures; misstating financial activity;

failure to fully report disbursements;

excessive contribution

Disposition: (a-c) Reason to

believe, but took no further action

MUR3449

Respondents: (a) Dukakis/Bentsen

Committee, Inc . (MA); (b) Dukakis/

Bentsen General Election Legal and

Accounting Compliance Fund,

Leonard Aronson,treasurer (MA);

(c) Fried, Frank, Harris, Shriver and

Jacobson (NY)

Complainant: FEC initiated (1988

Presidential Audit)

Subject: Failure to report disbursements timely; excessive contribution/corporate contribution/acceptance

of prohibited in-kind contribution by

fully federally funded campaign;

contributions in the name of another; excessive cash contributions;

improper use of compliance funds

Disposition: (a-b) $15 ,000 civil

penalty and waiver of claims for

attorney's fees in Dukakis v. FEC

(joint conciliation agreement for

MURs 2715/2652, 3089, 3449 and

3562); (c) reason to believe, but

took no further action

MUR3562

Respondents: (a) Dukakis for

President Committee, Inc ., Leonard

Aronson, current treasurer (MA);

(b) American Federation of State,

County, and Municipal Employees

(DC)
October 1995

Complainant: FEC initiated (1988

Presidential Audit)

Subject: Exceeded state expenditure limits (IA & NH); labor union

contributions; failure to report

contributions timely ; excessive

contributions

Disposition: (a) $15,000 civil

penalty and waiver of claims for

attorney's fees in Dukakis v. FEe

(joint agreement for MURs 2715/

2652,3089,3449 and 3562); (b)

reason to believe, but took no

further action

MUR4193

Respondent: Democratic Party of

Hawaii Federal Campaign Committee , Jane Sugimura, treasurer (HI)

Complainant: FEC initiated (RAD)

Subject: Excessive transfers of nonfederal funds; corporate contributions

Disposition: $30,000 civil penalty;

respondents must reimburse nonfederal account $74,547.08 for the

excessive transfers.

. ·Audits ,

Parker for Congress

Audit Report

An FEC audit of the Parker for

Congress committee (the committee) found that the committee:

• Improperly attributed contributions, resulting in excessive

contributions;

• Failed to disclose the required

contributor information for 31

percent of its supporters; and

• Improperly reported a payment to

vendors as a transfer between

committee accounts.

The committee served as the

principal campaign committee for

Mr. Wayne Parker, Jr.'s 1994 bid

for the office of U.S. Congressman

from Alabama.

This audit was conducted pursuant to 2 U.S.c. §438(b), which

authorizes the Commission to

conduct audits of any political

committee that files reports that fail

to meet the threshold level of

compliance set by the Commission.

Subsequent to a final audit report,

the FEC may choose to pursue

unresolved issues in an enforcement

matter.

Excessive Contributions

The committee's erroneous

practice of attributing contributions

between the account holders listed

on a check, rather than to the

individual who actually signed it,

resulted in a total of $5,435 in

excessive contributions by 19

individual contributors.

The committee, in compliance

with the recommendation of the

FEC, refunded this amount.

Contributor Information

The committee failed to disclose

required contributor information;

the occupation and/or name of

employer were not reported for 31

percent of its individual supporters.

When a contributor does not submit

this information with his or her

contribution, the committee must

undertake best efforts to obtain it.

The Parker committee failed to

demonstrate that it had undertaken

best efforts in these instances.

The committee, in compliance

with the recommendation of the

FEC, obtained the missing contributor information in some cases and

undertook best efforts to do so in the

others. The committee submitted

letters documenting these best efforts.

Disbursement Itemized As

Transfer

The committee itemized $51,288

in payments to vendors as $52,000

in transfers between the committee's

accounts.

The committee, in compliance

with the recommendation of the

FEC, amended its 1994 Pre-General

report to correct this error. •

Federal Election Commission RECORD

Lynn Yeakel for Senate

Audit Report

An FEC audit of the Lynn Yeakel

for Senate committee (the committee) found that the committee had:

• Understated its receipts by $94,881

and its disbursements by $94,649,

largely as a result of failing to

disclose activity related to a

telemarketing fundraising program

(the committee filed amended

reports to correct this);

• Failed to report and itemize

$104,3 25 in telemarketing disbursements, to itemize $355 ,500 in

loan receipts and $86,800 in loan

repayments, and to report or

itemize offsets and contributions,

including in-kind activ ity, constituting lesser amounts (the committee filed amended reports to

correct this);

• Failed to include in its reports

complete address information for a

number of disbursements and

adequate information on a number

of contributors (the committee

filed amended reports to correct

this);

• Failed to either disgorge or document the source of a $6,878 cash

receipt that the committee deposited into its federal account;

• Failed to adequately document the

purpose and ultimate payees of

$7,000 in disbursements made by

two checks payable to cash; and

• Accepted contributions which

exceeded the donors' limits by

$59,276 ($20,699 of this amount

was either redesignated or

reattributed by the donor or

refunded to the donor, albeit not

within the required time limits; the

committee is treating the remain -

ing amount as a debt it owes to the

donors).

This audit was conducted pursuant to 2 U.S.c. §438(b), which

authorizes the Commission to

condu ct audits of any political

committee whos e reports fail to

(continued on page 6)

5
- ------------

Federal Election Commission RECORD October 1995'

Statistics

'96 Senate Campaigns

Report Less Financial

Activity Than Their

Predecessors

The 49 candidates seeking the 33

U.S. Senate seats up for election in

1996 have reported raising $24

million and spending $10 million

during the first six months of 1995.

Comparisons among Senate races

are difficult to make because of the

diversity among campaigns. Even

so, these figures indicate that the

1996 Senate candidates have raised

less money over a similar period of

time than did their counterparts in

the last three election cycles.

An August 18 FEC press release

contains candidate-by-candidate

financial information. A copy of this

release may be obtained via the

Flashfax system as part of a packet

on House and Senate fundraising in

the first six months of 1995. Just

dial 202/501-3413 and request

document number 630 at the

prompt. Alternatively, request a

copy from the Public Disclosure

Office either in person or by dialing

800/424-9530...

Audit

(continued from page 5)

meet the threshold level of compliance set by the Commission.

Subsequent to a final audit report,

the FEC may choose to pursue

unresolved issues in an enforcement

matter. ..

Advisory

Opinions

AO 1995-22

Reporting Reimbursements

ofAllocated Expenses

The Democratic Congressional

Campaign Committee (DCCC) may

report reimbursements of allocated

expenses as negative disbursements

on its FEC disclosure reports. The

DCCC's proposed reporting practice

is explained below.

Background

The DCCC pays shared expenses

from an allocation account in which

funds from its federal and nonfederal accounts are deposited. This is

one of the permissible methods for

paying shared expenses under

11 CFR 106.5(g).

Under this method of payment,

each disbursement is itemized, with

the appropriate federal and nonfederal breakdown, on Schedule H4.

The DCCC must also report the sum

of all disbursements from the

allocation account on its Detailed

Summary Page; this sum is reported

on line 21, "Operating Expenditures," with the appropriate federal

and nonfederal breakdown reported

on lines 2 Ia(i) and (ii).

Reporting Reimbursements

Normally, political committees

report refunds as receipts under the

category "Offsets to Operating

1989 * 1991 1993 1995 *

(45) (55) (50) (49)

1989 * 1991 1993 1995 *

(45) (55) (50) (49)

o

15

20

5

25

30 1--- - -

10

(# of

candidates)

Millions of $

35,----- - - - - - - - - - - - -- - - - - - - - - - - - -

Senate Campaign Fundraising in the First Half of 1995

This data is provided here as a supplement to the August 18 press release.

Receipts from Other Sources

Receipts from PACs

_ Receipts from Individuals _ Disbursements

* The same Senate seats that were up for election in 1990 are up for election again

in 1996.

6
'October /995 Federal Election Commission RECORD - --- - - - - - - -- ----- - ------- --- -------------

Expenditures (Refunds, Rebates,

etc.)" on the Detailed Summary

Page .

The DCCC's proposed reporting,

however, is also permissible. Under

the proposal, a reimbursement is

treated as a negative disbursement.

It is itemized as such, along with its

breakdown into federal and nonfederal portions, on Schedule H4.

These portions are subtracted

correspondingly from lines 21a(i)

and (ii) ("Shared FederalfNonfederal Activity") of the Detailed

Summary Page . These adjustments,

in turn, affect the total for "Operating Expenditures," line 21 of the

Detailed Summary Page.

Date Issued: August 4, 1995;

Length: 3 pages. •

AO 1995-24

Proceeds From Sale of

Candidate's Book Used for

Debt Retirement

Robert Palmer, 1990 Congressional candidate from California,

may seIl copies of a self-published

book to his principal campaign

committee, which in turn may sell

the books and use the proceeds to

repay a loan made by Dr. Palmer to

his campaign committee. This

arrangement raises some issues, as

discussed below.

Selling to the Committee

The books are Dr. Palmer's

property, and he may donate them to

the committee without being subject

to contribution limits because, under

11 CFR 11O.IO(a), a candidate may

make unlimited contributions to his

or her campaign. If Dr. Palmer sells

the books to the committee at a price

below the present market value, then

he will be making an in-kind

contribution in the amount of the

price break he is giving the committee. 11 CFR 100.7(a)(1)(iii)(B).

The candidate and the campaign

committee may not convert excess

campaign funds to the personal use

of the candidate or anyone else.

2 u.s.c. §439a; 11 CFR 113.2(d). If

the price the committee pays the

candidate for the books is greater

than the market value of the books,

then such excess payments would

constitute converting campaign

funds to the candidate's personal

I use, unless the excess amount were

deducted from the amount of the

debt that the committee owes Dr.

Palmer.

Selling by the Committee

The committee may sell the

books at any price. The entire

amount paid by a purchaser will be

a contribution to the committee

subject to contribution limitations.

No person prohibited by the Act

from making contributions may

purchase the book from the committee. 2 U.S.C. §§441a, 441b, 441c,

441e and 441f.

When soliciting purchases, the

committee must inform buyers they

will be making a contribution.

Solicitations made through direct

mail or other form of general public

political advertising should carry

proper disclaimers stating the committee's name and who paid for the

solicitations. 2 U.S.c. §441(d)(a)(1);

11 CFR 110.11(a)(1)(i).

Purchasers should indicate on

their checks that a contribution is

being made to retire the committee's

1990 debt, for either the primary or

the general election. The specific

election must be designated. Alternatively, the campaign could

provide contributors with a form on

which they would designate the

contribution for a particular election. 2 U.S.c. §431(2); 11 CFR

100.3(a) and 11O.1(b)(2) and (4).

Contributions may be made with

respect to a past election only to the

extent that the contribution does not

exceed net debts outstanding for that

election. 11 CFR 110.1(b)(3).

Payment of solicitation costs by

the candidate would be an in-kind

contribution or, if he so chooses, a

loan from him. Payment by others

would be subject to the limits and

prohibitions of the Act.

If the committee's sale of the

books generates more funds than it

owes Dr. Palmer, the committee

may not pay him more than it owes

him. The maximum amount the

campaign may pay him is the sum

of the loan, his charge to the committee for the books and any solicitation costs he covers, as a further

loan to the campaign. An overpayment would constitute a prohibited

conversion of campaign funds to the

candidate's personal use. 2 U.S.c.

§439a and 11 CFR 113.2(d).

Date Issued: August 17, 1995;

Length: 4 pages. •

AO 1995-25

Allocation of Costs for Ads in

Support of Party's Agenda

During a non-Presidential

I election year, the Republican

National Committee (RNC) must

use its federal account monies to

pay at least 60 percent of the costs

associated with advertisements in

support of the party's legislative

agenda. The remaining 40 percent

may be paid with nonfederal

account monies. Should the RNC

wish to run these types of ads during

a Presidential election year, federal

monies would have to be used to

pay at least 65 percent of the costs.

Nonfederal monies could be used to

pay the remaining 35 percent.

Background

The RNC plans to run ads in

1995 in support of its legislative

agenda. The ads will focus on issues

before Congress, such as the balanced budget amendment and

welfare reform.

According to the RNC, some of

its intended ads might mention a

federal officeholder who is seeking

reelection, but the reference would

not be coupled with language

expressly advocating that officeholder's election or defeat, nor

(continued on page 8)

7
Federal Election Commission RECORD

Advisory Opinions

(continued from page 7)

would an electioneering message be

contained in the ad.' Further, the

proposed ads would contain no call

for action other than urging the

public to contact the mentioned

officeholder (should there be one)

and voice support for or opposition

to a particular piece of legislation.

Allocating the Cost of Ads

Ads that focus on legislative

activity and promote the GOP

should be considered expenditures

made in connection with both

federal and nonfederal elections.

Although the requester stated that

the ads at hand would not mention

federal elections or contain an

electioneering message, the requester also stated that their purpose

would be to influence the public's

view of Republicans and the GOP's

agenda. The ads would thus encompass the related goal of electing

Republican candidates to federal

office. The costs of such ads,

therefore, would have to be allocated between the committee's

federal and nonfederal accounts,

unless the ads qualified as coordinated party expenditures on behalf

of a general election candidate, in

which case they would have to be

paid entirely with federal monies.

2 U.S.c. §441a(d).

The ads in question may be

classified as either administrative

expenses or generic voter drive

costs, depending on content. Generic voter drive costs, defined at

11 CFR 106.5(a)(2)(iv), include

I The Commission. relying on this

assertion by the RNC, did not express

any opinion as to what constitutes an

electioneering message by a political

party committee. This question has

been addressed in AOs 1984-15 and

1985-14 and in the Court ofAppeals

decision in FEC v. Colorado Republican Federal Campaign Committee (see

page 1 ofthe August 1995 Record for a

summary ofthis case).

8

costs of "activities that urge the

general public to . . . support

candidates . . . associated with a

particular issue, without mentioning

a specific candidate." Under 11 CPR

106.5(b)(2) both administrative

expenses and generic voter drive

costs incurred during a non-Presidential election year are allocated 60

percent to the federal account and

40 percent to the nonfederal account. Should they be incurred

during a Presidential election year,

the proper allocation would be 65

percent to the federal account and

35 percent to the nonfederal account.

Date Issued : August 24, 1995;

Length: 5 pages.•

AO 1995-26

Campaign Funds May Not

Be Used for Club Dues

Senator Frank H. Murkowski,

candidate in Alaska's 1998 Senate

election, may not use campaign

funds to pay membership dues at the

Washington Athletic Club , where he

has regularly held campaign fundraising events during previous

campaigns. Payment of dues would

constitute personal use of campaign

funds. However, Senator Murkowski's campaign may pay his meal

and lodging expenses at the club so

long as they are separate from dues

and associated with a campaign

fundraising event.

While campaigns have wide

discretion in spending their funds,

they may not convert them to

personal use. 2 U.S.c. §§431(9) and

439a; 11 CFR Il3.l(g) and 113.2.1

New regulations define "personal

I These regulations became effective

April 5, 1995. Reprints ofthe final

rules (60 FR 7862) are available

through the FEC automatedflashfax

system: Dial 2021501-3412 and request

document #228. Alternatively, call the

FEe's Information Division at 8001

424-9530.

October 1995'

use" as the use of campaign funds to

pay expenses "that would exist

irrespective of the candidate's

campaign or duties as a Federal

officeholder." 11 CFR 113.1 (g).

Personal use includes but is not

limited to the use of funds in a

campaign account for dues, fees or

gratu ities at a country club, recreational facility or other nonpolitical

organization, unless they are part of

the costs of a specific fundraising

event taking place on the organization 's premises.

The Explanation and Justification? that accompanied these rules

when they were submitted to

Congress stated that the exception

"does not cover payments made to

maintain unlimited access to such a

facility, even if access is maintained

to facilitate fundraising activity. "

60 FR 7862. Applying this rule, the

Commission concluded that the use

of funds to pay for club membership

dues would constitute personal use

under 2 U.S.c. §439a and 11 CFR

l13.l(g).

However, the committee may use

campa ign funds for any costs that

are separate and distinct from

membership dues and are associated

with the use of club facilities for

specific campaign fundraising

events. For example, the committee

may pay for meals and lodging

expenses incurred at the club by the

Senator to attend a campaign event.

Those costs should be reported as

operating expenditures.

Date issued: August 17, 1995;

Length : 5 pages. •

(AdvisoryOpinionscontinued on page 10)

2 The Commission submits an Explanation and Justification to Congress

whenever it submits a new regulation

or an amendment to an existing one.

The Explanation and Justification

derails the basis for a proposed change

in regulations.
October1995 Federal ElectionCommission RECORD

Public Funding

Committee Name &

Election Type & Date

Repayments

Initial Final

• These repayment totals do not include

the follo wing amounts, which are not

covered in the Statement ofReasons:

for the Buchanan campaign, $61,925

for excessive and prohibited contributions and $4,632 for excessive travel

reimbursements received from media

personnel; for the Bush-Quayle '92

Primary campaign, $141,801 f or

excessive contributions.

$ 19,194

$ 8,666

$558,589

611

$ 8,666

$ 8,666

$274,423

$

$293,925

$ 18,891

$216 ,853

$106 ,979

$ 19,194

$343,026

$ 2,086

$ 19,023

$ 21,109

611

$ 8,666

$485,631

$195 ,224

$

$532,827

$ 25,151

$ 2,086

$ 19,023

$ 21,109

$700,049

Buchanan for President

('92 GOP primary)

Bush-Quayle '92 Primary

('92 GOP primary)

Total Repayment'

due U.S. Treasury

Matching funds in excess

of entitlement

Nonqualified campaign

expenses

Stale-dated checks

Matching fund s in excess

of entitlement

Nonqualified campaign

expenses

Stal e-dated checks

Total Repayment'

due U.S. Treasury

Bush-Quayle '92 General

('92 general)

Total Repayment

due U.S. Treasury

Bush-Quayle '92 Compliance

(' 92 general)

Total Repayment

due U.S. Treasury

Stale-dated checks

Income earned on federal

fund s

Stale-dated checks

JAll four ofthese committees have filed

petitionsfor review with the Court of

Appeals for the District ofColumbia.

2Brochures and a report on the Public

Funding Program are available free of

charge from the FEC's Information

Division; dial 800/424-9530.

Final Repayments for

Buchanan and Bush-Quayle

In early August 1995, the Commission issued final repayment

determinations for: Mr. Patrick J.

Buchanan's 1992 Presidential primary

election conunittee, Buchanan for

President ($293 ,925); for President

George Bush's 1992 Presidential

campaigns, the Bush-Quayle ' 92

Primary committee ($343,026) and

the Bush-Quayle '92 General

conunittee ($21,109); and President

Bush's 1992 Compliance fund

($8,666). 1

These figures are broken down in

the accompanying chart , which also

includes a breakdown of the initial

repayment determinations for the

sake of comparison .

These repayments arise from the

committees' participation in the

Presidential Public Funding Program, which is funded by the

taxpayers through the voluntary $3

checkoff found on all U.S. income

tax return forms.' Candidates

participating in the Program agree to

abide by overall and state-by-state

spending limits and to undergo an

FEC audit at campaign' s end .

The conclusions of the FEC's

audit, as well as the initial repayment determination, are contained in

a Final Audit Report. Following the

issuance of this report, a conunittee

may submit a written response and

request a publi c hearing to offer

expl anations and further information

for the Conunission' s consideration.

The Conunission then examines all

pertinent information and arrives at

a final repayment determination,

which is issued in a Statement of

Reasons. Final Audit Reports and

Statements of Reasons are available

in the FEC's Offi ce of Public

Disclosure located at 999 E Street,

NW, Washington, DC, 20463 ;

telephone 800/424-9530. ..

9
Federal Election Commission RECORD

A vi ory Opinion

(continued from page 7)

Advisory Opinion Requests

Advisory opinion reque sts

(AORs) are available for review and

comment in the Public Records

Office.

AOR 1995-28

Requiring dues payments and

granting voting rights to expand

association's membership class

(American Health Care Association;

August 15, 1995; 4 pages plus 59-

page attachment)

AOR 1995-29

Refunding to court-appointed

receiver contributions made by

convicted defrauder (Christopher

Cox Congressional Committee;

August 15, 1995; 1 page plus 11-

page attachment)

AOR 1995-30

Allocation of costs of satellite

broadc ast time purchased by Presidenti al campaign (Arlen Specter '96

committee; August 18, 1995; 2

pages)

10

AOR 1995-31

Acceptance of contributions from

bank and bank affiliates by Presidential nominating convention host

committee (San Diego Host Committee; August 28, 1995; 3 pages)

AOR 1995-32

Acceptance of contributions from

bank and bank affil iates by Presidential nominating convention host

committee (Chicago' s Committee

for '96; August 28, 1995; 10 pages)

AOR 1995-33

Sending PAC solicitation to member

of restricted class through electronic

mail addressed to secretary (Coastal

Employee Action Fund; August 29,

1995; 1 page)

AOR 1995-34

Providing 900-line telephone

services to political committees

(Politechs, Inc.; August 30, 1995; 7

pages)

AOR 1995-35

Soliciting campaign contributions

via the Internet (Alexander for

President; September 1, 1995; 2

pages plus 2-page attachment) •

October 191}-j

Index .

The first number in each citation

refers to the "number" (month) of

the 1995 Record issue in which the

article appeared. The second number,

following the colon, indicates the

page number in that issue. For example, " 1:4" means that the article

is in the January issue on page 4.

Advisory Opinions

1994-33: Calling card solicitations ,

3:5

1994-34: Consolidating membership

association PACs following a

merger, 3:7

1994-35: Terminating reporting

obligations, 5:5

1994-36: Solicitation of stockholders in an employee-owned

company, 5:5

1994-37: Allocating between federal

and nonfederal campaigns, 3:7

1994-39: Solicitation of affiliates by

a membership organization, 3:8

1994-40: Storing records on microfilm, 3:9

1995-1 : Respondents and the

confidentiality provisions, 4 :8

1995-2: Membership organization's

solicitation of representatives of

member firms, 6:3

1995-3: Running simultaneous

Senate and Presidential campaigns, 4:8

1995-5: Use of contributor lists

derived from FEC reports, 4:9
· October 1995 Federal Election Commission RECORD ---- --

1995-7: Candidate' s personal

liabil ity for bank loan, 6:4

1995-8: Committee's rental of

candidate-ow ned office and

equipment, 6:5

1995-9: Operating a political

committee in cyberspace, 6:6

1995- 10: Ownership of committee

records, 6:7

1995- 11: Status of limited liability

company, 6:8

1995-12 : Affiliation and cross

solicitation between trade association federation and stat e associ ations, 8:9

1995-1 3: Definition of member

appl ied to membership association , 8:10

1995-14: Operating a PAC booth at

a joint convention, 8:11

1995-1 5: Fore ign-o wned subsidiary:

earmarked contributions and

payroll deductions, 8: 12

1995- 16: Attaining national party

status, 9:3

1995-17: Trade association fede ration and affiliated state and local

units; donation of raffle prizes and

one-third rule, 9:4

1995-18: Campaign funds give n for

portrait of former House Committee Chair man, 8:13

1995-19: Disco vering illegal

contributions in a committee' s

treasury, 9:5

1995-20: Campaign funds used for

travel expenses of candidate' s

family , 8: 14

1995-21: Campai gn 's use of funds

awarded in law suit, 9:6

1995-22: Reporting reimbursements

of allocated expenses, 10:6

1995- 23: Paying lega l expenses with

campaign funds, 9:6

1995-24: Proceeds from sale of

candidate's book used for debt

retirement, 10:7

1995-25: Allocation of costs for ads

in support of party's agen da, 10:7

1995-26: Campaign funds may not

be used for club dues, 10:8

Compliance

$25,000 Annu al contribution limit ,

4:1

Contribution limits (MURs 3886

and 3929), 10:1

MUR 2884: Reporting misstatements and excessive contributions, 7:2

MUR 3452 : Excessive contributions, 6:8

MUR 3540: Corporate facilitation, 1:2

MUR 3650: Loan guara ntors, 1:2

MUR 4016/4076: Reporting earmarked contributions, 7:2

Court Cases

FEC v.

- Branstool, 6: 12

- Christian Action Network, 9:2

- Citizens for Wofford, 6: 13

- Colorado Republican Federal

Campaign Committee, 8: 1

- Free the Eagle, 8:5

- Fulani (94-4461 ), 6:12

- Michi gan Republican Stat e

Committee, 5:4

- Montoya, 2:7; 5:4

- NRA Political Victory Fund, 2:1

- National Repub lican Senatorial

Committee (93- 1612), 4:4; 8:4

- Populist Party, 7:9

- RUFFPAC, 8:5

- Williams, 4:5

v. FEC

- Albanese, 7:8

- Condon, 3:5

- Democratic Senatorial Campaign

Committee (93-1321 ), 1:10

- Democrati c Senato rial Campai gn

Committee (95-034 9), 4:8

- Dukakis , 7:9

- Freedom Republicans, 2:6

- Froelich, 8:5

- Fulani (94-1593), 4:6

- Lytle, 1:10, 2:7

- National Republican Sen atorial

Committee (94-5 148), 5:4

- Robertson, 4:6

- Simon, 7:9

- Whitmore, 2:7

- Wilson, 2:7; 5:1

McIntyre v, Ohio, 6:12

Rove v. Thornburgh, 4:7

Reports

Pilot program for elec tronic filing

gets underway, 9: 1

Reports due in Octobe r, 10:2

Schedule for 1995, 1:4

800 Line Articles

Administrati ve termination, 2:9

Corporate facilitation, 6: 1

II