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FEDERAL ELECTION COMMISSION

March 1989 999 EStreet NW Washington DC 20463 Volume 15, Number3

QUESTIONNAIRE ON ALLOCATION

SENT TO STATE PARTIES

In February 1989, the Commission sent out a

questionnaire to the state party chairmen of the

two major parties. The purpose of the questionnaire is to gather information to help the agency

revise the rules on the allocation of disbursements

that influence both federal and nonfederal elections (11 CFR Part 106») Because party committees are the group most broadly affected by this

rulemaking, the Commission prepared the questionnaire to find out how they currently allocate

mixed federal/nonfederal expenses and what percentages are used to determine the federal share.

The answers to these questions will greatly assist

the Commission's efforts to develop realistic allocation regulations. For example, knowing the

amounts and percentages now being allocated to

the federal side will allow the Commission to

make informed decisions on whether to set fixed

percentage formulas and, if so, at what level.

The agency believes that the timing of the

questionnaire is opportune since the election season has recently concluded and party committees

have just compiled final figures for their year-end

reports. Although response to the questionnaire is

voluntary, the Commission encourages state party

chairmen to take advantage of the opportunity to

affect the outcome of an important rulemaking by

completing and returning the form.

Franked envelopes are provided for committees' responses, due March 15, 1989. Committees

are not required to identify themselves. For further information, call Susan E. Propper, Assistant

General Counsel for Regulations, at 800/424-9530

or 202/376-5690.

1989 REPORTING REMINDER

Political committees should be aware tha

the reporting schedule for 1989 changes because

1989 is a nonelection year. Reporting require

ments are explained below.

Questions and requests for forms should be

addressed to the Information Services Division

Call 800/424-9"530 or 202/376-3120.

Congressional Candidate Committees

During a nonelection year, committees

authorized by Congressional candidates report on

a semiannual basis (not quarterly).

continued

TABLE OF CONTENTS

REGULATIONS

I Questionnaire on Allocation

REPORTS

1 1989 Reporting Reminder

800 LINE

2 Designating a Principal Campaign Committee

COURT CASES

3 FEe v, The Holmes Committee

3 USDC v; FEe

3 Common Cause v. FEC (87-2224)

4 New Litigation

STATISTICS

5 PAC Count

COMPLIANCE

6 MUR 2175: Excessive and Prohibited Contri

butions Accepted by 1984 Presidential Cam

paign

• IFor further information on the proposed

rulemaking, see the February 1989 issue, p, 6, and

the October 1988 issue, pp. 1 and 6.

7

7

FEDERAL REGISTER NOTICES

INDEX
March 1989 FEDERALELECTION COMMISSION Volume 15,Numbe

continued

Presidential Candidate Committees

Committees authorized by Presidential candidates report on either a monthly or a quarterly

basis. See 11 CFR l04.5(b)(2).

PACs and Party Committees

During a nonelection year, PACs and party

committees report on either a semiannual or a

monthly basis (not quarterly). Committees that

filed quarterly reports during 1988 now file semiannual reports. Committees that filed monthly

reports during 1988 must continue to file on a

monthly basis during 1989 unless they change to a

semiannual schedule for the nonelection year by

notifying the Commission in advance by letter.

See 11 CFR 104.5(c).

Committees Active in Special Elections

Authorized committees of candidates runni

in special elections (elections held to fill vaca

seats) must file the appropriate pre- and po

election reports in addition to filing semiannu

reports. 11 CF R 104.5(h). They may also have 

file special notices on last-minute contribution

II CPR 104.5(f). See also AO 1988-32.

PACs and party committees filing sem

annually may also have to file special electi

reports if they make contributions or expenditur

on behalf of candidates running in special ele

tions. 11 CFR 104.5{h). Monthly filers do not f

pre- and post-election reports for special ele

tions. However, all PACs-including month

filers-may be required to file reports on la

minute independent expenditures. See 11 CF

104.4(b) and 104.5(g).

Note that special elections have been sche

uled in the Third Congressional District of A

bama and the Fourth Congressional District 

Indiana. Information on reporting requiremen

for these special elections appeared in the Fe

ruary 1989 Record.

SEMIANNUAL REPORTS 1989

Report

Mid-Year

Year-End

Period Covered

1/1-6/30

7/1-12/31

Piling Date*

7/31/89

1/31/90

Filing on Time

Reports must be filed on time. If a reporti

due date falls on a Sunday or federal holiday, t

report must be received (or postmarked, if se

registered or certified) before the due date. 

CFR 104.5(e). The law does not allow extensio

of filing deadlines under any circumstances.

MONTHLY REPORTS 1989

*Reports sent by registered or certified, mail

must be postmarked by the filing date; otherwise

they must be received by the filing date. 11 CFR

104.5(13).

Report

February

March

April

May

June

July

August

September

October

November

December

Year-End

Period Covered

1/1- 1/31

2/1- 2/28

3/1- 3/31

4/1- 4/30

5/1- 5/31

6/1-6/30

7/1- 7/31

8/1- 8/31

9/1- 9/30

10/1- 10/31

11/1- 11/30

12/1- 12/31

Filing Date*

2/20/89

3/20/89

4/20/89

5/20/89

6/20/89

7/20/89

8/20/89

9/20/89

10/20/89

11/20/89

12/20/89

1/31/90

,:,' _ '---~-~~--;;---:-';~~~-~~~~~-'''7~ ~~~-- 

";. -w~~~ 'l::J; ::;4 " ; ¥ 2 . \ c-' . ,,'0 /1. - ev.,3• ~

_~_~ ~,-~ -~,~~__~,:~i_~:,._'_~ -:-~~-~:_ ..~;- ~~i~

DESIGNATING A PRINCIPAL

CAMPAIGN COMMITrEE

Under what circumstances must an individu

who plans to run for federal office in 1990 or 19

designate a principal campaign committee? In

viduals running for federal office in 1990 or 19

must designate a principal campaign committ

within 15 days of becoming a candidate. II CF

10I.l(a). Individuals become candidates once th

raise or spend more than $5,000 to influence th

future election or when someone they authori

to work on their behalf raises or spends ov

$5,000 to influence their election. See II CP

100.3(a).

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

D.C. 20463. Commissioners are: Danny L. McDonald, Chairman; Lee Ann Elliott, Vice Chairman;

Joan Aikens; Thomas J. Josefiak; John Warren McGarry; Scott E. Thomas; Walter J. Stewart, 

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

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

Impaired 202/376-3136)

2
FEDERAL ELECTION COMMISSION

•

•

March 1989

How does a candidate designate a principal

campaign committee? Candidates designate a

principal campaign committee by filing a Statement of Candidacy on FEC Form 2 or a letter

containing the same information, i.e., the name

and address of the principal campaign committee;

the candidate's name, address and party affiliation; the office sought and the district and state

in which the office is sought. II CFR 101.1(a).

Does a candidate who ran in a previous

election have to file a new Form 2 for a future

campaign? Yes. A candidate in a previous election

must file a new FEC Form 2 within 15 days after

qualifying as a candidate in a future election. The

candidate may either redesignate his or her

previous campaign committee (if it has not

terminated) or designate a new principal campaign committee. A redesignated committee retains its original identification number; a newly

designated committee receives a new one.

Does the principal campaign committee of a

candidate who ran in a previous election also have

to file 8 new Statement of Organization? If the

candidate designates 8. new principal campaign

committee, the committee must file a new Statement of Organization (FEC Form I) within 10

days after being designated. 11 CFR 102.1(a).

If the candidate redesignates an existing

committee, the committee need only amend its

Statement of Organization within 10 days to reflect any new information (e.g., a change in the

committee's name or address). II CFR 102.2(a)(2).

Redesignated committees are reminded that, if

outstanding debts remain from the previous election, the committee must continue to report the

debts as well as contributions that have been

designated by contributors to retire them. 11 CFR

104.11; 1l0.I(b)(3) and (4); llO.2(b)(3) and (4).

Where are Forms I and 2 filed? U.S. House

candidates and their principal campaign committees file all statements and reports with the Clerk

of the House; U.S. Senate candidates and their

principal campaign committees file with the Secretary of the Senate; Presidential candidates and

their principal campaign committees file with the

FEC. II CFR Part 105.

Copies of statements and reports must also

be filed with state officers. House and Senate

campaigns file in the state in which the candidate

seeks election; Presidential campaigns file in the

states in which expenditures are made. 2 U.S.C.

§439(a).

3

Volume 15, Number 3

FEC v, THE HOLMES COMMITTEE

On December 28, 1988, the U.S. Distric

Court for the Western District of Kentucky grant

ed the FEC's motion for default judgment agains

The Holmes Committee (the principal campaign

committee for Lee Holmes' 1986 bid for a House

seat). Civil Action No. C88-0274-L(B).

The court decreed that the Committee violated the law by failing to file a Statement of

Organization and five reports covering 1986 ac

tivity. Enjoining the Committee from future vio

lations, the court imposed a $30,000 civil penalty

($5,000 for each violation). Under the court'

order, the Committee must, within 15 days, pay

the penalty and file the Statement and reports

The court also ordered The Holmes Committee to

pay the FEC's court costs.

USDC v; FEC

On January 4, 1989, the U.S. Court of

Appeals for the Second Circuit denied a petition

for a rehearing filed by the United States Defense

Committee (USDC). The appeals court had ruled

in November 1988 that USDC's case was not ripe

for judicial review and had remanded the case to

the district court with instructions to dismiss the

suit. Civil Action No. 88-6127. For a summary of

this suit, see the January 1989 Record, p. 9.

COMMON CAUSE v. FEC (87-2224)

The U.S. District Court for the District of

Columbia granted the FEC's motion to dismiss

Common Cause's suit and to dissolve a protective

order that had placed court documents under seal.

In its order of January ll, 1989, the court noted

that Common Cause did not oppose the FEC's

motion.

Background

In its suit, filed August 12, 1987, Common

Cause asked the court to declare that the FEC

failed to take action within the required 120-day

period on an administrative complaint Common

Cause had filed with the Commission on October

28, 1986. Common Cause further asked the court

to direct the FEC to take action within 30 days,

pursuant to 2 U.S.C. §437g(a)(8). Civil Action No.

87-2224.

Common Cause had alleged in its administrative complaint that the National Republican Senatorial Committee had made excessive contributions to several candidates, a violation of 2 U.S.C

§441a(h).

continued
March 1989 FEDERALELECTION COMMISSION

FEC's Motion to Dismiss Suit and Lift Seal

The Commission asked the court to dismiss

Commmon Cause's suit because the agency had

taken final action on the administrative complaint, thus rendering the litigation moot. On

December 23, 1988, the Commission had voted to

enter into a conciliation agreement with the National Republican Senatorial Committee and had

then closed the file. Citing other "failure to act"

cases filed against the agency pursuant to 2

U.S.C. S437g(a)(8), the FEC pointed out that the

courts have granted similar dismissals once the

agency has taken final action.

The FEC had originally requested that the

court impose a seal on documents filed in the case

that related to the administrative complaint,

which was pending at the time and therefore

subject to the confidentiality provision of 2

U.S.C. S437g(a)(l2). That provision prohibits the

agency from making public any information on

administrative complaints until the case is resolved. The court imposed a protective seal on

October 2, 1987.

Under another provision, however, the Commission must release to the public the results of

its inquiries once an enforcement matter is resolved. 2 U.S.C. S437g(a)(4)(B)(i). In its motion to

lift the protective seal, the FEC stated that the

confidentiality requirements of S437g(a)(l2) no

longer applied since the agency had since closed

the file on the case.

NEW LITIGATION

Fund for a Conservative Majority, Debtor

On December 19, 1988, the U.S. Bankruptcy

Court for the Eastern District of Virginia (Alexandria Division) granted the FEC's motion to file

a brief as amicus curiae (friend oJ the court). The

Commission's interest in this case concerns the

application of the federal campaign finance law

to a nonterminating political committee seeking

Chapter II bankruptcy. Case No. 88-00924-A.

Harry P. Miller v; FEC

Harry Miller asks the court to declare that

the FEC's dismissal of his complaint was contrary

to law and to order the FEC to conform to the

court's decision within 30 days, pursuant to

2 U.S.C. S437(g)(a)(8).

In his administrative complaint, Mr. Miller

claimed that Bush-Quayle 88, Victory 88 and

Texas public officials violated provisions of the

public funding law.

U.S. District Court for the District of Columbia, Civil Action No. 89-0094, January 12,

1989.

4

Volume 15, Numbe

Philip M. Stern v. FEC

Philip Stern asks the court to rule that 

FEC acted contrary to law in dismissing an 

ministrative complaint he had filed with the ag

cy and to direct the FEC to take action agai

the respondents named in his complaint-the G

eral Electric Company and its officers and dir

tors. This suit was filed pursuant to 2 U.S

S437g(a)(8).

In his administrative complaint, Mr. St

alleged that GEjPAC's contributions were 

made for "political purposes" but to advance G

lobbying interests and that GE was not theref

entitled to the exemption that permits a corpo

tion to use general treasury funds for "the est

lishment, administration, and solicitation of c

tributions to a separate segregated fund to 

utilized for political purposes...." [Empha

added.l 2 U.S.C. S441b(b)(2)(C). He claimed th

as a result of using GE/PAC for lobbying rat

than political purposes, GE's funding of the P

resulted in prohibited corporate expenditu

under 2 U.S.C. S441b(a).

Mr. Stern claimed that patterns in GEjPA

contributions to 1986 candidates showed that 

funds were given to promote the company's lob

ing interests. For example, he pointed out t

the PAC contributed to incumbent House can

dates-including those without opponents-98 p

cent of the time and that GEjPAC gave to b

the incumbent and the challenger in five Sen

races. In his civil complaint, Mr. Stern points 

similar contribution patterns for the 1988 elect

cycle.

U.S. District Court for the District of C

lumbia; Civil Action No. 89-0089 (NHJ), Janu

12, 1989.

FEC v. Survival Education Fund, Inc. et aL

The FEC asks the court to declare that:

o The Survival Education Fund, Inc., a nonpro

corporation, made corporate expenditures 

connection with a. federal election by financ

direct mail fundraising solicitations in a jo

effort with the National Mobilization for Sur

val, a closely related unincorporated group 

U.S.C. S441b(a»; and

o Both defendants (Survival Education Fund a

National Mobilization for Survival) failed 

include the required disclaimer on the solic

tion material, which expressly advocated 

defeat of a clearly identified candidate 

U.S.C. S441d(a)(3)).

The FEC further asks the court to assess 

appropriate civil penalties against defendants 

U.S.C. S437g(a)(6)(C», permanently enjoin th

from further similar violations and award the F

court costs.

U.S. District Court for the Southern Distr

of New York, Civil Action No. 89-CIV-0347, Jan

ary 17, 1989.
The graph plots the total number of PAC

from 1974 through 1988 and is based on the FEC

press release of January 13, 1989. Financial activ

ity is not reflected. Statistics on the 1987-8

•

election cycle will be issued at a later date.

March 1989 FEDERAL ELECTION COMMISSION Volume 15, Number 3

1988 PAC COUNT

At the end of 1988, 4,268 PACs were registered with the FEC, an increase of 103 over the

1987 year-end total. (The term PAC or political

action committee refers to any political committee not authorized by a federal candidate or

established by a political party.)

PAC GROWTH1

o Corporate

• Nonconnected

.& Trade/Membership/Health

Labor

• Other 2

1500 +---~-----------------r-l;~--=-

Number

of PACs

2000 -r------------~----~------------

•

1000 +-------------------..--r--------------r--------.P----~.

SOD +-------------c~=-----:-------:::;;;;oIF---------7'F----------------

Year

'For the years 1974through 1976, numbers are not available for Nonconnected PAGs, TradefMembershipfHealt

PAGs or PAGs in the "Other" category.

2"Other" category consists of PACsformed by corporations withoutcapital stock and incorporated cooperatives.

5
March 1989 FEDERAL ELECTION COMMISSION Volume 15, Number 

MUR 2175: Excessive and Prohibited

Contributions Accepted by

1984 Presidential Campaign

A 1984 Presidential primary candidate, his campaign committee, the committee treasurer and

two media firms doing business with the campaign

were the respondents in MUR 2175, which was

resolved through conciliation agreements that included civil penalties.

Complaint

The Audit Division discovered several possible violations of law during a mandatory audit of

a 1984 Presidential primary campaign that received matching funds. With the Commission's

approval, these matters were referred to the

Office of General Counsel.

General Counsel's Report

Prohibited Extensions of Credit. The Audit

Division alleged that two media firms had made

prohibited corporate contributions to the campaign by extending credit outside the normal

course of business and by failing to make a

reasonable effort to collect the debt. 11 CFR

100.7(8)(4) and 114.10. Both firms were able to

demonstrate commercially reasonable collection

efforts (for example, repeatedly seeking payment,

engaging counsel to assist in debt collection,

threatening law suits and, in one case, successfully suing the campaign). As to the initial extension of credit, both firms purchased media time

for the campaign up front, requiring payment at a

later time. This appeared to be the ordinary

practice of one firm, but not of the other. That

firm's contract with the campaign specified: "we

agree to pay media bills for you in advance,

contrary to our usual policy, providing you keep

your account current within 60 days of billing••••t1

The General Counsel concluded that the firm's

extension of credit of approximately $103,000 to

the campaign was outside the ordinary course of

business and resulted in a prohibited corporate

contribution (a violation of 2 U.S.C. §§441a(f) and

441b(a».

Late Action to Correct Excessive Contributions. Audit staff found that the campaign received excessive contributions from 49 individuals. The excessive portions of their contributions, amounting to $19,607, were either refunded

or reattributed to other contributors, but not

within a reasonable time. On the average, it took

the campaign 241 days from the date of receipt to

take remedial action. The campaign's failure to

refund or reattribute the excessive contributions

6

within a reasonable time resulted in violations 

the contribution limits. 2 U.S.C. §§44Ia(a)( I)

and 441a(f).

Candidate's Excessive Expenditures Throu

Use of Credit Card. Under 26 U.S.C. §9035(a)

candidate who receives primary matching fu

must limit spending from personal funds 

$50,000. By July 1983, the candidate had alrea

spent $48,750 against this limit. In the Gene

Counsel's view, the candidate exceeded his lim

by using his personal credit card for campa

purchases that exceeded $1,250. From Aug

1983 through August 1984, the credit card balan

for campaign expenses exceeded $1,250 on num

ous monthly billings (and reached over $20,000 

several occasions). Because the candidate w

personally liable for the unpaid balance and 

cause payments made during the campaign per

were 266 days late, on average, the candid

exceeded his personal spending limit when 

campaign failed to pay the credit card balan

within a reasonable time.

Expenditures Made with Spouse's Cre

Card. The candidate's wife charged campaign 

penditures on a credit card in both her name a

the committee's name. She and the campai

therefore, were jointly and individually liable 

payment on the account. The General Coun

concluded that, because of her liability, she ma

excessive contributions to her husband's campa

whenever credit card charges for campaign 

penses exceeded $1,000.

Commission Determination

The Commission decided to take no acti

concerning possibly excessive contributions ma

by the candidate's wife. With respect to the oth

violations, on August 25, 1988, the Commiss

entered into a conciliation agreement in wh

the candidate, the campaign committee and t

committee treasurer agreed to pay a $12,000 ci

penalty. The Commission found probable cause 

believe the media vendor had made a prohibi

contribution and, on November 7, 1988, voted 

enter into a conciliation agreement that includ

a $5,000 civil penalty.
•

March 1989 FEDERAL ELECTION COMMISSION Volume 15, Number 3

Notice Title

FEDERAL REGISTER NOTICES

Copies of notices are available in the Public

Records Office.

•

1989-1

1989-2

1989-3

Filing Dates for Alabama Special

Elections (54 Fed. Reg. 2227, January 19, 1989)

Filing Dates for Indiana Special

Election (54 Fed. Reg. 2228, J anuary 19, 1989)

11 CFR Parts 110, 113, 114 and 116;

Debts Owed by Candidates and Political Committees; Additional Public

Hearing Date (54 Fed. Reg. 6684,

February 14, 1989)

7

This cumulative index lists advisory opinion

court cases and 800 Line articles published in th

Record during 1989. The first number in th

citation refers to the "number" (month) of th

Record issue; the second number, following th

colon, indicates the page number in that issue.

OPINIONS

1988-37: Affiliated status of two corporate PAC

after leveraged buy-out, 1:6

1988-44: Effect of statute of limitations on com

mittee's debts, 2:4

1988-45: Definition of national party committee

2:4

1988-46: Corporation's solicitation of licensee

2:4

1988-47: Publisher's donation of free magazines t

candidate prohibited, 1:6

1988-48: Contributions to trade association PA

matched with charitable donations, 2:5

1988-49: Federal bankruptcy trustees not consid

ered government contractors, 2:5

COURTCASHS

FEC v,

-AFSCME-PQ, 1:11

-Braun for Congress Committee, 1:10

-sun for Congress, 1: 11

-Californians· for a Strong America (88

1554), 1:9

-Californians for a Strong America (88

06499), 1:11

-Citizens Party, 1:12

-Dietl for Congress, 1:10

-Haley Congressional Committee, 1:9

-Holmes Committee, 3:3

-Life Amendment Political Action Com

mittee, 1:11

-Populist Party, 1:12

-Rodriguez, 1:10

-Survival Education Fund, Inc., 3:4

-Taylor Congressional Committee, 1:10

Fund for a Conservative Majority, Debtor, 3:4

v, FEC

-Comrnon Cause (87-2224), 3:3

-Miller, 3:4

-Stern, 3:4

-USDC, 1:9; 3:3

800 LINE

Debt retirement by candidate committees, 1:7

Designating a Principal Campaign Committee, 3:2
Political Committees

Registered political committees are automatically sent the Record. Any change of address by

a registered committee must, by law, be made in writing as an amendment to FEe Form I

(Statement of Organization) and filed with the Clerk of the House, the Secretary of the Senate, or

the FEe, as appropriate.

March 1989

CHANGE OF ADDRESS

FEDERAL ELECTIOI\J COMMISSION Volume 15, Number 

Other Subscribers

Record subscribers (who are not political committees), when calling or mailing in a change of

address, are asked to provide the following information:

1. Name of person to whom the Record is sent.

2. Old address.

3. New address.

4. SUbscription number. The subscription number is located in the upper left hand corner of the

mailing label. It consists of three letters and five numbers. Without this number, there is no

guarantee that your SUbscription can be located on the computer.

FEDERAL ELECTION COMMISSION

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