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THE FEDERAL ELECTION 

COMMISSION 

, 1325 K Street N.W ., Washington, D.C. 20463 

Volume 3, Number 9 

ADVISORY OPINIONS: SUMMARIES 

Designated as AO's, Advisory Opinions concern the 

application of the Act to specific factual situations. Any 

qualified person requesting an advisory opinion who in 

good faith acts in accordance with the findings of the opin· 

ion will not be penalized under the Act. The opinion may 

also be relied upon by any other person involved in a speci· 

fie transaction which is indistinguishable in all material 

aspects from the activity discussed in the advisory opinion. 

AO 1977-16: Search Committee 

The Iowa 1980 U.S. Senate Committee (the Committee) 

may operate initially as a political committee formed to 

select a Republican candidate for the 1980 Senate election 

in Iowa by raising money, conducting surveys and identifying campaign workers and volunteers. During this time, the 

Committee may also voluntarily observe the limitations 

applicable to contributions made to a principal campaign 

committee, even though no candidate has yet been selected. 

If these limitations are observed, the candidate eventually 

selected by the Committee may designate it retroactively as 

his or her principal campaign committee. The Committee's 

accumulated contributions, available for the candidate's use 

in the campaign, would not be regarded as a contribution 

from the Committee to the candidate selected. 

The Commission based its opinion on the following addi· 

tional conditions: 

·· Once the Committee selects a candidate (and provided 

the candidate authorizes the Committee as his or her 

principal campaign committee), any previous contribu· 

tions received by the Committee will be regarded as 

having been accepted by the principal campaign committee of the candidate. 

·· All contributions previously made to the Committee and 

all contributions made directly to or for the candidate 

before his or her selection must be aggregated by donor 

and reviewed to ensure that no contributors have exceeded their limitation. Refunds must be made to those 

September 1977 

contributors who are determined to have contributed fn 

excess of their limits. 

·· The Committee's Statement of Organization must be 

amended at the time of the candidate's selection and the 

candidate must authorize the Committee as his or her 

principal campaign committee. 

Chairman Thomas Harris and Commissioner Neil Staebler 

dissented from the majority opinion's conclusion. 

(Length: 4 pages) 

AO 1977-25: Notices for Radio Advertising 

The Lowenstein '76 Committee must include the notice 

specified in 2 U.S. C. §435(b) in a series of radio advertise· 

ments to publicize a fundraising concert. An appropriate 

wording would be: "Paid for by the Lowenstein '76 Com· 

mittee. A copy of our report is filed with the Federal Election Commission and is available for purchase from the 

Federal Election Commission, Washington, D.C." The 

broadcasts are considered solicitations because the advertisements would urge contributors to attend and make 

ticket purchases which would be contributions. The opinion ~lso referred the Lowenstein '76 Committee to the 

Federal Communications Commission for information on 

sponsorship identification requirements which may be 

prescribed for broadcast stations by that agency. (Length: 

2 pages) 

continued 

HEARINGS SET 

The Commission has set September 12, 1977, as 

the date for hearings on the sponsorship and financing of public debates between candidates for Federal 

office. For a summary of the FEC notice of the 

request for public comment, see the Record, August 

1977, p. 2. The hearing will be held at the offices of 

the Federal Election Commission, 1325 K Street, 

N.~ .• Washington, D.C. In addition to the hearings, 

wntten comments will be accepted by the Office of 

General Counsel through September 30, 1977. 
AO 1977-26: Voter Registration Activity 

Any compensation or reimbursement by the State Democratic Party of Pennsylvania/Voters Registration Drive 

Committee ("VRC") to William J. Green for voter registration promotional activities, conducted during the 1976 

election campaign, would be a contribution to Mr. Green 

and would be subject to limitations of the Federal Election 

Campaign Act of 1971, as amended. This opinion is based 

on the fact that Mr. Green was actively campaigning for 

the Pennsylvania U.S. Senate seat in 1976 at the same time 

he performed voter registratio!l activities for the V RC 

throughout the Commonwealth of Pennsylvania. The opinion concludes that, while FEC Regulations allow a political 

party to reimburse a candidate for "party-building activity," it would be impossible to distinguish Mr. Green's 

party-building activity from activities directly related to his 

campaign. In addition, the constituency to be reached by 

the voter registration activity was identical to Mr. Green's 

constituency for election to the Senate. (Length: 2 pages) 

AO 1977-30: Acceptance of Honoraria 

Senator Robert Dole will be considered to have accepted an 

honorarium if he directs or states a preference that an 

organization (before which he makes an appearance or 

speech) make a donation to one or more charities on a list 

provided by the Senator. FEC Regulations state an honorarium will not be considered to have been accepted if the 

organization itself selects the charity (§110.12(b)(5)). 

(Length: 2 pages) 

AO 1977-31: In-Kind Contributions 

Public service messages recorded by Mr. Leo Berman, a 

candidate for Federal office, and paid for by his employer, 

Western Company of North America, would constitute a 

contribution in-kind by the corporation to Mr. Berman. 

The opinion concludes that "recitation of [Mr. Berman's] 

name twice in the body of these public service radio messages would provide value to [Mr. Berman] as a candidate." 

Therefore, the payment by Western Company of North 

America for the production and airing of the messages 

would constitute a prohibited corporate contribution inkind. (Length: 2 pages) 

NATIONAL RIGHT TO WORK COMMITTEE v. 

VERNON W. THOMSON, et al. (Part II) 

On July 19, 1977, the FEC filed a motion in U.S. D

trict Court for the District of Columbia, asking that a co

plaint filed by the National Right to Work Committee (

Committee) be dismissed. In its original complaint, t

Committee alleged that the FEC had failed to act with

90 days on two complaints previously filed with the F 

by the Committee. (For a summary, see the Record, Ju

1977, p. 3.) The Commission maintains that the Co

lacks jurisdiction over the subject matter of the complai

The Federal Election Campaign Act of 1971, as amende

(2 U.S.C. 1§437d(e)) provides that " ... the power of t

Commission to initiate civil actions ... shall be the exc

sive remedy for the enforcement of the provisions 

this Act." The exception in 2 U.S.C. 1§437g(a)(9) allo

"any party aggrieved'' by the FEC's failure to act on 

complaint within 90 days to file with the U.S. Distr

Court for the District of Columbia. The Commissi

argues this exception does not apply since the FEC h

acted, but, because of complex legal and factual situ

tions alleged in the original complaint, Colnmission acti

has not yet been completed. The specifics of the acti

were not discussed, however, because the Act prohib

the FEC from making public statements regarding co

plaints not yet resolved. On July 26, 1977, the plaint

filed an opposition to the FEC's motion to dismiss a

moved for summary judgment. 

LE ROY B. JONES, et al. v. FEC, et al. 

(Part II) 

On June 24, 1977, LeRoy B. Jones, et al. asked the U

District Court for the District of Columbia for a tempora

restraining ·order to prevent the F EC or its agents from co

tinuing to contact contributors to the United States Lab

Party (USLP) and to the Committee to Elect LaRouc

(CTEL). The motion was denied on June 28, 1977. T

plaintiffs' original complaint seeks a declaratory judgme

a permanent injunction and monetary relief as a result 

alleged illegal and unconstitutional actions by the F EC a

its agents (See summary, the Record, June 1977, p. 

The RECORD is published by the Federal Election Commission, 7325 K Street, N.W., Washington, D.C. 20463. 

Commissioners are: Thomas E. Harris, Chairman; Joan D. Aikens, Vice-Chairman; William L. Springer; Neil Staebler; 

Vernon W. Thomson; Raben D. Tieman; J.S. Kimmitt, Secretary of the Senate, Ex Officio; Edmund L. Henshaw, Jr., 

Clerk of the House of Representatives, Ex Officio. 

For more information, ca/15234068 or toll free 800-424-9530. 

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The F EC filed a motion to dismiss the original complaint 

on July 18, 1977. In its motion the Commission argues 

that: 

·• The Court has no jurisdiction over the subject of the 

complaint; 

-- The complaint does not support any claims for damages; 

·· The individual defendants are " ... absolutely immune 

from liability ... " for actions alleged by the plaintiffs. 

In the alternative, the Commission asked for summary 

judgment on the grounds there " ... is no genuine issue as 

to any material fact." 

SUMMARY OF COMPLIANCE ACTIONS 

The FEC is required by the Federal Election Campaign 

Act of 1971, as amended (2 U.S.C. §437g), to make public 

the results of compliance actions which originate from a 

complaint filed with the Commission or from information 

received in the course of carrying out its supervisory responsibilities. While pending compliance matters must 

remain confidential, in 1976, 245 compliance files were 

released after the Commission had completed action on 

them. Since January 1, 1977, the FEC has made available 

in its Public Records Office 95 new cases which fall into 

the following categories: 

1. 67 cases closed. The Commission found "no reason to 

believe" or "no reasonable cause to believe" the Act had 

been violated. 

2. 4 cases involving conciliation agreements. (Several conciliation agreements may result from a single compliance 

case.) 

3. 24 cases where the Commission has completed its investigation with a finding of "probable cause to believe" 

the Act had been violated, and no conciliation agreement has been entered into. 

Of the cases made public in category three above, one case 

was referred to the Justice Department for action, and 18 

cases resulted in civil suits filed in District Courts. The 

Commission has taken no further action on the five remaining cases. All suits filed in District Courts as a result of compliance actions before August 15, 1977, have been against 

candidates who failed to comply in some significant manner 

with the reporting requirements of the Act. (See the 

Record, February 1977, p. 4, April 1977, p. 4, May 1977, 

p. 3, and August 1977, p. 2.) 

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FEC FILES SUIT 

AGAINST THREE CANDIDATES 

The Federal Election Commission has filed three mor

civil suits against candidates who failed to comply with th

Federal Election Campaign Act. On July 13, 1977, the FEC 

revealed it had filed suit in the U.S. District Court for the 

District of New Jersey asking that Tony Grandison, Repub

lican candidate for the U.S. House of Representatives in th

1Oth District of New Jersey, be ordered by the Court to file 

a post-general election report. In addition, the Commission 

asked the Court to assess a penalty of not more than 

$5,000 against the candidate for "failing and refusing to 

comply with the Act." 

On August 2, 1977, the FEC revealed it had filed suit in 

District Courts (Indiana and Ohio) against John Tipton

Democratic candidate for the U.S. House of Representatives in the 7th District of Indiana, and Anthony Curry

Independent candidate for the U.S. House of Representa

tives in the 21st District of Ohio. The Courts were asked to 

order both candidates to file a post-general election report 

and, in the case of Mr. Tipton, to designate the officers of 

his principal campaign committee. The FEC also asked that 

the Courts assess a penalty of not more than $5,000 agains

each candidate. 

Prior to filing the suits, the FEC has sent at least two 

notices to each candidate concerning their filing and reporting obligations . 

As of August 10, 1977, the FEC had filed a total of 33 civil 

suits in District Courts against candidates who failed to file 

reports for the 1976 Federal election. 

BUDGET ALLOCATION 

The Planning and Management Unit of the F EC recently 

presented to the Commission a report· on the allocation of 

Commission staff and resources among major objectives and 

program categories for the period May 1 through September 30, 1977. 

As a basis for determining how ·resources were being allo

cated, the unit identified four Commission-wide objectives

Utilizing budgetary information provided by division heads

the Planning Unit categorized Commission programs 

according to these basic objectives as follows: 
1. Objective One: Obtain Compliance 

Grouped under this objective are the following program 

categories: legal interpretation and policy formation, 

information provided to candidates and committees, 

routine monitoring and verification of reports and 

statements, and enforcement. 

2. Objective Two: Provide Public Funding 

of Presidential Candidates 

Certification of public funds, verification of expenditures, and submission of reports to Congress make up 

the principal program categories of this objective. 

3. Objective Three: Public Disclosure of Information 

The major program categories of this objective are to 

provide the public With campaign finance information 

required by the statute (indexes, public files), and 

other information deemed appropriate by the FEC. 

4. Objective Four: Serve as a Clearinghouse 

for Election Administration 

This objective is achieved through contract studies and 

the dissemination of election administration information. 

Figure 1: 

Commission Objectives 

Disclosure 

15% 

Clearinghouse 

16% 

Obtain 

Compliance 

68% 

The Planning and Management Unit used this information 

as a basis for showing the allocation of all Commission 

resources to each of the four basic Commission objectives 

(See Figure 1 ). Figure 1 indicates that more than two·thirds 

of the Commission resources are used to fulfill Objective 

One: Obtain Compliance (described above). The informa· 

tion also provided a description of how resources are divid· 

ed among the various divisions of the FEC (See Figure 2). 

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Figure 2: 

Divisions of FEC 

General Counsel 

16.5% 

1 Administration resources not allocated include rent, 

supplies, reproduction services, etc. Administration 

Division staff resources represent 5% of total Commission resources. 2Public Information resources include Clearinghouse 

contractual costs. When these costs are not included, lnformation~s resources are 11% of total Commission resources. 3 Data Systems resources presented include only 

developmental programs. All other computer costs 

(i.e., operating time, contract service, etc.) have 

been allocated to other organizational units. 

While the information provided to Planning and Man

ment represented only estimates of activity during a 

tion of 1977, the system will be useful in applying 

zero·based budgeting concept to FEC operations in 

future. 

ADVISORY PANEL MEETING 

The Clearinghouse Advisory Panel met July 25 and 

1977, in Washington, D.C. It was the fourth meetin

the Panel since it was created in 1976 to advise the C

mission on the allocation of Clearinghouse resource

research projects to improve the administration of elec

around the country. The Panel consists of 20 mem

from different States, including State and local ele

officials and State legislators. The Panel discussed cu

and future Clearinghouse research projects and the 

tions of Federal agencies involved in elections admin

tion. 
The Public Communications Office of the Federal Election Commission receives numerous calls from the public 

on the toll-free telephone line (800/424-9530). The following is an excerpt from the Campaign Guide for Nonelection 

Year to help answer one of the most frequently asked 

questions. 

USING SURPLUS CAMPAIGN FUNDS 

Surplus campaign funds are those contributed to a candidate (or his/her authorized committees) which, in the 

candidate's view, exceed the amounts needed to defray 

campaign expenses. Different rules apply to the use of 

surplus funds depending on whether they were received 

before the general election or received after the general 

election. The principal difference is that the excess funds 

consisting of contributions received before the general 

election may be used for a variety of purposes without 

obtaining written authorization from the donor, whereas 

surplus funds acquired after the general election in most 

instances cannot be used for any other purpose unless 

authorized in writing by the donor. In either case the 

disbursement of surplus funds must be reported. 

EXCESS CAMPAIGN FUNDS RECEIVED 

BEFORE THE GENERAL ELECTION 

Excess funds received before the general election may be 

transferred to another campaign on behalf of the same candidate or used for a variety of other lawful purposes without the donor's authorization. 

Transfers of Funds to Future Campaign 

The candidate may automatically transfer excess campaign funds from a previous campaign to his or her next 

campaign for Federal office as long as the funds transferred do not include contributions which are illegal under 

the Act. (For example, Candidate Jones may transfer all 

surplus funds from his 1976 House campaign to the prin· 

cipal campaign committee authorized for his 1978 Senate 

bid.) 

Use of Funds for Other Purposes 

Candidates may also use excess campaign funds for the 

following purposes, some of which may be subject to Federal income tax laws and, in the case of Federal officeholders, to the rules of the House or Senate: 

1. Defrayal of office expenses if the candidate is also a Federal officeholder.· 

2. Donations to charity. 

3. Contributions to a political party, political committee or 

another candidate, as long as the contributions comply 

with the Act's limits. 

4. Any other purpose lawful under Federal and State laws. 

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SURPLUS CAMPAIGN FUNDS RECEIVED 

AFTER THE GENERAL ELECTION 

Surplus funds received after the general election may be 

accrued under three different sets of circumstances, each of 

which limits their use in a different way. 

Paying Off All Campaign Debts 

After the general election, a candidate may receive contributions designated to retire the debts of one or more 

specific 1976 elections (primary, run-off or general) which 

were made before but received after the candidate has suffi· 

cient funds on hand to retire the designated election's 

debts. In this case, the candidate may use the surplus funds 

to retire the remaining campaign debts of the other 1976 

election(s) without obtaining donors' written authorizations to do so. 

Receiving Funds Donated Before But Received After 

There are Enough Funds to Retire All Debts 

A candidate may also receive, after the general election, 

contributions which were made before but received after 

the candidate has sufficient funds on hand to retire all 1976 

campaign debts. In this case, the candidate may regard the 

funds as "excess campaign funds" and use them for any of 

the purposes described in the paragraph above ("Use of 

Funds for Other Purposes"). Alternatively, the funds may 

be transferred to the candidate's future campaign for Federal office. In this case, however, they will count against 

the contribut)on limits for the future election (either the 

primary or general). Therefore, the candidate must: 

1. Identify the donors of the transferred contributions, 

beginning with the last received and working back, until 

the amount transferred· is reached; and 

2. Obtain written authorization from the contributors 

regarding the use of their contribution in a future campaign. 

Receiving Additional Funds After There are 

Enough Funds to Retire All Debts 

Finally, a candidate may receive contributions which are 

made and received after sufficient funds are on hand to 

retire all 1976 campaign debts. These surplus funds must be 

considered either as contributions to a future election or as 

donations to an office account. In this case, written authorization must be obtained from the donors for either use. 

If designated as a donation to a future election, the donation will count against the donor's contribution limits for 

that election. If designated as a donation to an office 

account, the funds may be subject to House or Senate 

Rules and to Federal income tax laws. 
AUDIT POLICY IMPLEMENTATION 

The Federal Election Campaign Act of 1971, as amended, requires the Commission "to make from time to time 

audit and field investigations with respect to reports and 

statements" filed by candidates and committees. The 

statute places a priority on audits of candidates who receive 

public funding. In order to implement this requirement, the 

FEC adopted an audit policy in November (See the Record, 

June 1977, p. 6) and, following the general election, audited all major Presidential candidates. 

In addition, the Commission announced recently it is beginning audits of 1976 candidates for the House and Senate in 

48 randomly-selected elections. This selection represents 10 

percent of the Senate and House elections in 1976 and will 

total approximately 100 candidates. For each of these 48 

elections, the Commission will audit: 

-- All major party general election candidates; 

- All other general election candidates who received 5 percent or more of the vote; and 

- All candidates who raised or spent more than $10,000. 

If the winning candidate received more than 75 percent of 

the vote in the general election, but less than 75 percent in 

a primary election victory, the Commission will also audit 

all primary candidates of the same party who received more 

than 5 percent of the vote, or who received or spent more 

than $10,000. 

The Commission's policy also calls for audits of 1976 

Presidential candidates on the ballot in 10 or more States, 

multicandidate committees receiving or spending more than 

$100,000, a random selection of other multicandidate 

FEDERAL ELECTION COMMISSION 

1325 KSTREET, NW 

WASHINGTON, DC 20463 

OFFICIAL BUSINESS 

committees, major party committees (National, Co

gressional and State), and other candidates and committe

as determined by routine disclosure report review. Th

names of candidates and committees being audited a

withheld until the report is completed. At that time, th

report is made public and is available from the Office 

Public Records. The Record will from time to time l

those audit reports which have been released to the publi

FEC documents of general applicability are publish

regularly in the Federal Register. The following list iden

fies all FEC documents appearing in the Federal Regis

between July 14, 1977 and August 22, 1977. 

Federal Register 

Notice Title Publication Date Citation 

1971-39 AOR 1977-32 7/21/77 42 FR 374

1977-40 Clearinghouse 7/21/77 42 FR 374

Advisory Panel 

Meeting 

1977-41 AOR 1977-33 7/26/77 42 FR 385

1977-42 AOR's 1977-34, 8/8/77 42 FR 401

1977-35 and 

1977-36 

1977-43 AOR 1977-37 8/8/77 42 FR 401

1977-44 AOR's 1977-38 8/17/77 42 FR 414

and 1977-39 

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