FEDERAL ELECl"ION COMMISSION

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May 1990 999 EStreet NW Washington DC 20463 Volume 16, Numb

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COKRISSIOR RECOftMENDS

CHANGES IN ELECTION LAW

On March'21, 1990, the FEC

submitted to Congress and the

President 35 recommendations for

amending the Federal Election

Campaign Act and the Presidential

public funding statutes. The

Commission believes that the

proposed amendments, if enacted,

will greatly improve the

administration and enforcement of

the campaign finance laws.

The package of recommendations,

submitted pursuant to 2 u.s.C.

§438(a)(9), includes several

suggestions addressing the projected

shortfall in the Presidential

Election Campaign Fund, which has

financed Presidential elections

since 1976. According to recent FEC

projections, the Fund may be

insufficient to meet entitlements

for the 1992 elections. The

remedies that the Commission

suggested include:

o Periodically adjusting the amount

designated on income tax returns

to correspond to increases in

payments from the Fund. Under the

current system, entitlements paid

from the Fund each Presidential

election year are adjusted for

inflation; the individual tax

checkoff amount, however, has

remained at $1.00 since 1973.

o Changing the system to an

entitlement program whereby

payments would be determined

solely by the statutory

eligibility criteria.

o Changing the pUblic funding system

to a traditional appropriated

account or, should the checkoff

method be retained, permitting

special appropriations to

compensate for shortfalls.

The commission proposed othe r

amendments for the first time this

year # including:.

o AmendiQg the law to ensure that

candidates who have previously

violated laws related to the

public funding process will not

receive matching funds.

Q Granting the Commission statutor

authority to represent itself in

all court proceedings.

o Authorizing the Commission to

accept funds and services from

private sources to provide

guidance and conduct research on

election administration and

campaign finance issues.

The Commission also modified

last year's recommendation regard

the Act's limit on honoraria to

reflect the recen~ amendments to

ethics legislation. The Ethics

Reform Act of 1989 banned the

(continu

TABLE OF CONTENTS

LEGISLATION

1 1990 Legislative Recommendati

2 FEe's FY 1991 Budget Request

REGULATIONS

3 proposed Standard computer

Format for presidential Aud

3 ADVISORY OPINIONS

COMPLIANCE

4 No Expedited Compliance

Procedures for 1990 Election

4 Publicly Released MUR Files

COURT CASES

5 Supreme Court Ru~es in Austin 

Michigan Chamber of Commerce

7 New Litigation

8 FEDERAL REGISTER NOTICES

800 LINE

8 Disclaimer Notices

10 Exempt party Activities

12 INDEX
May 1990 FEDERALELECTION COMMISSION Volume 16, Num

receipt of honoraria by Me.mberSof'

the House of Representatives and: by officers and employees,o(the .

federal government. " .•..

The 1990 Leq I s La t Lve ,: ". "

recommendations i ncl udecI'2'6C\ther

proposed amendments that·were

included in last year's package of

recommendations and. in the: agency's

1988 Annual Report.. The 'fuUtext

of the 1990 recommendations will be

included in the, FEC' S 1.989 .Annual.

Report (to be issued in June 1990);

in the m.eantime, C\ copy, can be

obtained from the ,FEC~s Public

Records Office.

FECPRESENTS FY 1991 BUDGET REQUEST

Appearing. before. 'the Senate and

House, appropriations committees in

February and March, FEC Vice .,

Chairman John Warren McGarry

testified in s.upportof the agency's

request for a FY 1991, budget of

$17,150,000 and 266 FTE(fuil time

equivalents of staff years).

Addressing the sena t,e

Subcommittee on Treasury, postal

Service and General Government,

Commissioner McGarry. asked for

adequate funding to meet the costs

of a heavier workload, resulting in

part from increases in federal

campaign activity. Specifically,

the Commission is seeking increased

funding to:

o Bring the number of full time

staff in the Audit Division to 28;

o Hire additional enforcement staff;

o Continue computerized data entry

of contributions of $200 or more;

and

o Launch a public education program

on the Presidential Election

campaign Fund.

, Also:inc,luded in the agency'

budget prop~sal .was a request th

. $& iOOO be, earmarked as discretion

iepresentati.onal funds enabling 

CpmmissLonto :respond to the grow

. number 'of requests for informatio

.and hoapLte Ldty. f:rom foreign and

state governments. , Commissioner

McG'arry drew attention'tothe

educational. ro.lerthaz .the . FEC, a

the only fe'de'raV'elect:ion' agency

has filled for foreign countries

that are "underqo i nq po H t'ic'1il""

reform. "As more -c ount ri'e e adop

laws governing politic'al campaig

their in:te r·e's't has expanded f r om

a Lec t Lon i adad ni s t ra t Lori to campa

finance regulation also. 'Li te'ra

dozens of· foreign delegC\tions vi

the FEC each year."

CLARIFICATION: ETHICS LAW

With regard to the filing

deadlines for personal financi

disclosure reports by

Congressional candidates under

the Ethics in Government Act, 

the article on page 1 of the

April Record should have state

that, under current law, repor

are due within 30 days of

becoming a candidate during an

election year, or by May 15,

whichever is later, but in no

event later than seven days

prior to an election. 2 U.S.C

§701(d) .

FEDERAL ELECTION COMftISSION

999 E Street, N.W.

Washington, DC 20463

800/424-9530 202/376-3120 202/376-3136(TDD)

Lee Ann Elliott, Chairman

John Warren McGarry, Vice Chairman

Joan Aikens

Thomas J. Josefiak

Danny L. McDonald

Scott E. Thomas

2

Walter J. Stewart, Secretary of th

Senate, Ex Officio

Donnald K. Anderson, Clerk of the

House of Representatives. Ex Off
FEDERAL ELECTION COMMISSION

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May 1990

CO~~ENTS SOUGHT ON PROPOSED

COMPUTER FORMAT RULES FOR

PRESIDENTIAL AUDITS

In preparation for the 1992

Presidential elections. the

Commission recently published a

notice in the Federal Register

proposing new regulations governing

computerized magnetic tapes and

diskettes submitted for use in

mandatory audits of Presidential

campaigns receiving public funds.

See 55 Fed. Reg. 12499. April 4,

1990.

The proposed rules clarify that

if a Presidential campaign maintains

certain records in computerized

format, the FEC will request those

records during the audit. The

proposals require that computerized

materials be submitted in a format

compatible with 'the FEC's computer

processing capability, and they list

the types of computerized

information that may be requested

from committees, along with a

timetable for obtaining that

information. Finally, the proposed

rules clarify that the costs of

providing computer records under

these standards will be borne by the

campaign committees and may be

treated as exempt compliance costs.

In connection with the Federal

Register notice, the FEC also issued

a document proposing technical

specifications for submitting

computerized records to the agency,

"Proposed Computerized Magnetic

Media Requirements for Title 26

Candidates/Committees Receiving

Federal Funding."

FEC ASSISTANCE AVAILABLE

TO PRESIDENTIAL CANDIDATES

Anyone anticipating participation in the 1992 Presidential

public funding program should note

that the FEC's Audit Division is

available to answer questions on

the recordkeep- ing and reporting

requirements under Title 26. For

information on public funding, call

the Audit Division at 800/424-9530

or 202/376-5320.

3

Volume 16,Numb

The Commission seeks comments 

these proposals from candidates,

committees, commercial vendors of

computer software and other sourc

Written comments should be receive

by ~ay 21, 1990, and addressed to

Susan E. propper, Assistant Gener

Counsel, 999 E Street, N.W.,

Washington, D.C. 20463.

A copy of the Federal Registe

notice and the proposed bComputer

ized Magnetic Media Requirements,

referred to in the notice, can be

obtained from the FEC's Public

Records Office.

ADVISORY OPINION REQUESTS

The following chart lists rec

requests for advisory opinions

(AORS). The full text of any AOR 

available for public inspection a

comment from the FEC's Public

Records Office.

AOR 1990-4

Credit card contributions to PAC.

(Date made public: March 15, 1990

Length: 5 pages, including supple

ments)

AOR 1990-5

Candidate's publication of monthl

newsletter on public affairs. (Da

made pUblic: March 28, 1990; Leng

2 pages plus several sample news

"ters)

AOR 1990-6

Preemption by Act of state law

prohibiting matching of PAC contr

butions with corporate charitable

donations. (Date made pUblic: Ap

4, 1990; Length: 6 pages)

ADVISORY OPINION SU~~RY

AO 1990-3: PAC's Sale of Adverti

ing Space in Newslett

City political Action Committee

(CityPAC), a nonconnected committ

may sell advertising space in the

newsletter it distributes to its

contributors. payments resulting

from the sales will be considered

contributions for the purposes of

(continue
PUBLIC APPEARANCES

FEDERAL ELECTION COMMISSION

the prohibitions, limits and

reporting requirements of the Act.

The sale of assets or items by a

political committee in a business

venture is generally viewed as

fundraising for political purposes.

Payments for ads in newsletters and

journals published by political

organizations, furthermore, are

contributions if the activity bei~g

funded by the sales is conducted for

the purpose of influencing a federal

election. See AOs 1985-39, 1981-33,

1981-3 and 1978-46.

The payments received by CityPAC

will be deposited in its account and

will be available for use by the

committee to make contributions and

expenditures in connection with

federal elections. They are reportable as contributions to CityPAC in

their full amount.

As contributions, payments for

advertising space may be received

from individuals and partnerships

(subject to the limits of 2 U.S.C.

§441a(a)(1)(A), but not from prohibited sources, such as corporations and labor organizations.

2 U.S.C. §441b. An individual may

pay for an advertisement on behalf

of a corporation, however, provided

that payment is made with the

individual's own funds from his or

her noncorporate account, and

provided that the individual is not

paid by the corporation for making

the contribution by means of a

bonus, expense account or other form

of direct or indirect compensation.

11 CFR 114.5(b)(1); AO 1985-39.

(Date issued: March 13, 1990;

Length: 4 pages)

Volume 16, Numb

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NO EXPEDITED COMPLIANCE PROCEDUR

DURING 1990 ELECTIONS

On March 6 the Commission

adopted a recommendation of the

General Counsel that the expedite

enforcement procedures implemente

during the 1988 primary elections

not be reinstated for the 1990

elections.

The 1988 expedited procedures

were implemented when a complain

was filed against a Congressional

candidate within 30 days before a

primary election or against anoth

person acting in connection with 

primary. The General~Counsel, in

recommending that the Commission 

use the procedures in 1990, obser

that the expedited procedures «w

rarely utilized and had no practi

effect."

The General Counsel noted tha

the Act already provides for an

expedited conciliation period in 

case of a finding of probable cau

against a respondent in the 45-da

period preceding a primary electi

See 2 U.S.C. §437g(a)(4)(A)(ii).

MURS RELEASED TO PUBLIC

PUblicly released MUR summary

files, as announced in FEC press

releases on March 19 and April 12

1990, are listed below. Civil

penalties resulted from conciliat

agreements reached between the

respondents and the Commission.

The summary file for each MUR 

available from the FEe's Public

Records Office.

MUR 2647

Respondent: (a) Hatch Election

Committee and treasurer (UT);

(b) E. Drinko (OH}

complainant: FEe initiated

Subject: Excessive contributions

Disposition: (a} $2,500 civil

penalty; (b) $150 civil penalty

American Bar Association

Charleston, sc

Chairman Lee Ann Elliott

Minnesota Institute of Legal

Education

Bloomington, MN

N. Bradley Litchfield,

Associate General Counsel

for Policy

citizens for private

Enterprise

Reno, NV

craig Engle, Executive

Assistant to Chairman

Elliott

May 11

May 11

May 18

May 1990

4
FEDERAL ELECTION COMMISSION

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MUR 2753

Respondent: (a) J. Mills (FL);

(b) Jon Mills for Congress and

treasurer (FL)

Complainant: J. Gaylord, Executive

Director, National Republican

Congressional Committee (DC)

Subject: Failure to disclose

political committee contributions

and individual contributor

identification; failure to

separately report PAC and individual

contributions; failure to disclose

aggregate contribution amounts

Disposition: (a) No reason to

believe; (b) $500 civil penalty

MUR 2867

Respondent: Society of Real Estate

Appraisers PAC (APPAC) and treasurer

(IL)

Complainant: FEC initiated

Subject: Failure to report on time

Disposition: $250 civil penalty

MUR 2928

Respondent: West Virginia State

Democratic Executive Committee and

treasurer

Complainant: FEe initiated

Subject: Failure to disclose change

of treasurer in timely manner

Disposition: $250 civil penalty

MUR 2943

Respondent: American Sugarbeet

Growers Association PAC and

treasurer (DC)

Complainant: FEC initiated

Subject: Failure to report on time

Disposition: $400 civil penalty

MUR 3009

Respondent: Rhode Island Democratic

State Committee and treasurer

Complainant: FEC initiated

Subject: Excessive coordinated

party expenditures

Disposition: $1,200 civil penalty

!'IUR 3035

Respondent: America First Resource

Management, Inc., PAC and treasurer

(NE)

Complainant: FEC initiated

Subject: Excessive contributions

Disposition: Reason to believe but

took no further action

5

Volume 16, Numbe

SUPREME COURT UPHOLDS BAN ON

CORPORATE EXPENDITURES IN AUSTIN v

MICHIGAN CHAMBER OF COMMERCE

On March 27, 1990, the Supreme

Court ruled that a Michigan state

law prohibiting independent

expenditures by corporations was

constitutional. Reversing a Sixth

Circuit U.S. Court of Appeals

decision in Austin v. Michigan Sta

Chamber of Commerce, the Court sai

that the state could prohibit

corporations from using their

treasury funds to make independent

expenditures in connection with

state elections.

Background

The suit originated in a 1985

district court complaint filed by

the Michigan State Chamber of

Commerce. The Chamber is a

nonstock, nonprofit incorporated

membership organization funded by

dues. Three quarters of its membe

are for-profit corporations.

The Chamber sought to make an

independent expenditure for a

newspaper advertisement supporting 

candidate for the state legislatur

Although the Chamber had establish

a separate segregated fund for

political purposes (which could

lawfully have been used to make th

expenditure), the organization

wanted to purchase the ad with its

general treasury funds. Finding

that section 54(1) of the Michigan

Campaign Finance Act appeared to

prohibit independent expenditures

made with corporate treasury funds

the Chamber filed suit against

Richard Austin, Michigan'S secreta

of State, challenging the

constitutionality of the state law

The law was upheld by the

district court; the appeals court

overturned the lower court's

decision, finding the prohibition

unconstitutional as applied to the

Chamber.

Supreme Court Decision

First Amendment Issue. The

Court held that the Michigan law,

which permitted corporations to se

(continued
May 1990 FEDERAL ELECTION COMMISSION

up segregated political funds, was

narrowly tailored to serve the

compelling state interest of

preventing the distortions in the

political process that might result

from allowing corporations to spend

their general treasury funds to

express their political views.

"This potential for distortion," the

Court said, "justifies §54(1)'s

general applicability to all

corporations"--regardless of their

size or earnings--because all

corporations "receive from the state

the special benefits conferred by

the corporate structure." Thus, the

burden imposed on free speech

by section 54(1) was permissible.

The Court further held that the

Chamber did not qualify for the

constitutional exemption to the ban

on corporate spending set forth in

FEC v. MassachusettslCitizens for

Life, Inc. (MCFL). In that

decision, the Court addressed the

federal election law's prohibition

against corporate independent

expenditures and found that the law

was unconstitutional as applied to

MCFL; a small, nonprofit

corporation. The Court found that

three characteristics of MCFL

qualified the organization for an

exception (based On the First

Amendment) from the federal law's

general ban on corporate spending

because they negated the

government's interest in preventing

the threat or appearance of

corruption.

The three features of MCFL that

exempted it from the ban on

corporate spending were that MCFL:

(1) Was a nonprofit corporation

established to promote

political ideas and not to

engage in business activities;

(2) Had no shareholders or other

persons with a claim on its

assets or earnings; and

(3) was not set up by a corporation

and had an established policy

not to accept donations from

corporations.

With regard to the first

characteristic, the Court observed

that, unlike MCFL, the Chamber's

1. FEC v. Massachusetts Citizens

for Life, r nc . , 479 U.S. 238 (1986).

See the February 1987 Record.

6

Volume 16, Num

activities were not limited to

political and public educational

purpOSes. The Chamber's bylaws 

forth several purposes beyond

politics, including, for example

the promotion of ethical busines

practices, the provision of grou

insurance for members and litigat

on behalf of the Michigan busine

community.

The Chamber also failed to m

the second of the MCFL criteria.

The Court concluded, "[wje are

persuaded that the Chamber's mem

are more similar to the sharehol

of a business corporation than to

the members of MCFL." Because 

Chamber provided its members with

several nonpolitical benefits an

services, members had an economi

disincentive to withdraw support

from the organization even if th

disagreed with its political view

In the MCFL case, the Court had

streSSed that the MCFL'S lack of

shareholders or other financially

affiliated persons meant that

members had no disincentive to

disassociate from the group.

With respect to the third MC

feature, the Court noted that he

"the Chamber differs most greatly

from the Massachusetts organization." While "MCFL was not

established by, and had a policy 

not accepting contributions from

business corporations,ll threefourths of the Chamber's members

were business corporations, and 

organization's treasury contained

corporate funds in the form of

membership dues. "Because the

Chamber accepts money from

for-profit corporations, it coul

absent application of §54(1), ser

as a conduit for corporate politi

spending," the Court concluded.

Finally, the Court rejected t

Chamber's claim that, because the

Michigan law did not include a

similar ban on political expendi

tures by labor organizations, it 

underinclusive. The Court noted

that although unincorporated labo

organizations had power to

accumulate wealth, they did not h

the special legal privileges enjo

by incorporated organizations, su

as limited liability and perpetua

life. The Court further distinguished unions from corporations
FEDERAL ELECTIOI\J COMMISSIOl\J

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May 1990

like the Chamber by pointing out

that the Constitution precludes

unions from having the power to

compel members to support their

political activities. "[T]he funds

available for a union's political

activities more accurately reflect

members' support for the

organization's views than does a

corporation's general treasury,'1 the

Court said.

Fourteenth Amendment Issue. The

Chamber claimed that section 54(1)

violated the Equal Protection Clause

of the Fourteenth Amendment because

it did not apply the restrictions to

unincorporated associations having

the ability to raise large amounts

of money or to corporations in the

news media.

Having clarified that a

compelling state interest in

preventing corruption justified the

restrictions on political activity

by corporations, the Court rejected

the Chamber's arguments with respect

to the application'of the

prohibition to unincorporated

entities. Corporate status, the

Court said, was a state-granted

privilege that facilitated the

amassing of wealth, the source of

the threat of corruption.

The Court also affirmed that the

limited "media exception" in the

state law for news stories and

editorials disseminated by

corporations operating in any of the

news media did not constitute a

breach of equal protection because

of the unique public informational

and educational role that such

organizations play. "The media

exception ensures that the Act does

not hinder or prevent the

institutional press from reporting

on and publishing editorials about

newsworthyevents.'1

NEW LITIGATION

Dolan v. FEC

Robert E. Dolan asks the

district court to declare that 2

U.S.C. §438(a) (4) ,usually known ,as

the "sale and use!1 restriction, is

unconstitutional as applied to his

efforts to solicit individuals

identified as contributors to

7

Volume 16, Numbe

political committees in FEC report

Mr. Dolan is the treasurer of 

political committee, American

Citizens for Political Action

(ACPA), and is the sole director,

officer and stockholder of The

International Funding Institute,

Inc. (IFI), a consulting firm. Mr

Dolan, ACPA and IFI are currently

respondents in an FEC enforcement

action resulting from their use of 

mailing list produced and marketed

by IFI to solicit contributions; t

list was compiled from disclosure

reports filed with the Commission.

Section 438(a)(4) prohibits th

sale or use of information about

individuals disclosed in FEC repor

"for soliciting contributions or f

any commercial purpose." Prior to

the filing of this suit (pursuant 

section 437h), the General Counsel

had notified the respondents that 

was prepared to recommend that the

Commission find probable cause to

believe that they had knowingly an

willfully violated section

438(a) (4).

Claiming that the "sale and us

restriction unlawfully abridges

his freedom of speech and politica

association under the First Amendment, Mr. Dolan asks the district

court to immediately certify to th

U.S. Court of Appeals the question

of the constitutionality of sectio

438(a)(4).

U.S. District Court for the

District of Columbia, Civil Action

No. 90-0542, March 9, 1990.

FEC v. NRWC (90-0571)

The Commission asks the distri

court to declare that the National

Right to Work Committee, Inc. (NRW

violated 2 U.S.C. §44lb(a) by maki

expenditures in connection with th

1984 Presidential elections.

The Commission claims that the

defendants, in an effort to monito

campaign-related spending by labor

unions, hired private investigator

to pose as union volunteers for

walter Mondale's Presidential

campaign and for other political

committees. NRWC's investigators

were allegedly instructed to gathe

information on possible violations

of the election law by labor

organizations; NRWC planned to use

that information in filing

( con ti nue
May 1990 FEDERAL ELECTION COMMISSION

administrative complaints with the

FEe.

In working under cover for the

Democratic Presidential nominee,

however, NRWC's investigators

performed several services for the

Mondale committee in several states,

as well as for other political

committees and labor organizations,

while carrying out NRWC's

instructions to gather information

on labor political activity. NRWC

paid the agents about $100,000 for

their total services.

The Act defines a "contribution," in part, as "the payment by

any person Qf compensation for the

personal services of another person

which are rendered to a political

committee without charge for any

purpose." 2 U.S.C. §431(8)(A)(ii).

NRWC's alleged payments to the

investigators, thus, would constitute prohibited in-kind contributions (or expenditures) by a

corporation in connection with a

federal election. 2 U.S.C. §44lb(a).

The Commission asks the court to

assess civil penalties, award the

agency its costs and permanently

enjoin the defendants from further

violations of section 441b(a).

u.s. District Court for the

District of Columbia, Civil Action

No. 90-0571, March 13, 1990.

FEDERAL REGISTER NOTICES

1990-1

voluntary Standards for computerized

voting systems: Notice of Final

standards (55 Fed. Reg. 3764, Pebruary

5, 1990)

1990-2

Filing Dates for New York special

Elections (55 Fed. Reg. 7027, Pebruary

28,1990)

1990-3

11 CFR Parts 106, 9003, 9007, 9033,- 9035

and 9038: Presidential Primary and General Election Candidates: Technical Requirements for computerized Magnetic

Media (55 Fed. Reg. 12499, April 4, 1990)

1990-4

11 eFR Part 110: Contributions and

Expenditures: prohibited Contributions

[Foreign Nationals) (55 Fed. Reg. 13507,

April 11. 1990)

8

Volume 16, Num

DISCLAIMER NOTICES ON POLITICAL

ADVERTISEMENTS AND SOLICITATIONS

The Federal Election Campaig

Act and FEC regulations require 

notices be placed on certain fed

campaign communications distribu

to the general public to indicat

who authorized and paid for them

Some frequently asked questions

about different kinds of disclaim

are answered below.

When does a campaign

communication require a disclaim

Disclaimer notices are required 

campaign ads and solicitations

distributed through "public

political advertising" that:

o Expressly advocate- the electio

defeat of a clearly identified

candidate; or

o Solicit contributions on beha

a political committee or a

candidate. 11 CFR 110.11 (a)(

What does "public political

advertising" mean? "Public

political advertising" includes 

following advertising media, wh

are usually aimed at the general

public: TV or radio broadcastin

print ads, posters, billboards (

other outdoor advertising

facilities), yard signs and dire

mail.

Must everyone include

disclaimers in campaign ads and

solicitations? Yes. The discla

requirements apply to anyone spo

soring a campaign communication,

whether the sponsor is a candid

a committee, a political party o

individual.

How should the notice be wo

If a solicitation or an advertis

ment advocating the election or

defeat of a candidate is authori

and paid for by that candidate's 

authori~ed committee, the notice

must simply say who paid for the 

For example, "Paid for by the Sa

Jones for congress Committee" is

sufficient if the committee is S

Jones' own authorized committee.
FEDERALELECTION COMMISSION

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May 1990

If the advertisement is

authorized by the campaign but

financed by someone else (such as

another political committee), the

notice must say: "paid for by

Citizens Organized for Better

Government and authorized by the Sam

Jones for Congress Committee."

what if the candidate's

committee does not authorize the

advertisement? If someone outside

the campaign places an ad for Sam

Jones, and if the campaign has not

authorized the ad, then the notice

should be worded like this: "Paid

for by Citizens for Good Government

and not authorized by any candidate

or candidate's committee." 11 CFR

110.11(a)(1)(iii).

Is that the type of disclaimer

that should be used for an

independent expenditure? Yes.

Since an independent expenditure, by

definition, is never authorized by a

candidate, the disclaimer should be

similar to the example in the

previous answer. 11 CFR 109.3.

Where should the disclaimer be

placed in an advertisement?

Whatever the medium, the notice

should be clearly and conspicuously

displayed. If the ad is printed,

for example, the notice should be

placed on the same page as the ad.

In a mailing that includes

several pieces, where should we

place the disclaimer? In a

solicitation letter that contains

several enclosures, the disclaimer

must be placed on at least one of

the items. For example, with a

mailing that includes an invitation

to a fundraising dinner, the

disclaimer could be placed on the

invitation itself or on the reply

card. See AO 1980-145.

Are some campaign materials

excluded from the disclaimer

requirements? Yes. Disclaimer

requirements do not apply to bumper

stickers, pins, buttons, pens,

concert tickets and similar small

items on which a notice cannot be

placed conveniently. Likewise, the

requirements also do not apply to

skywriting, watertowers and other

9

Volume 16, Number 

advertising media where a notice

would be impracticable. 11 CFR

110.11(a)(2); AO 1980-42.

Note, however, that convention

public political advertisements

(such as newspaper advertisements)

are not exempt from the disclaimer

requirements, regardless of their

size. AO 1978-33.

Does a nonconnected PAC need to

use a disclaimer when soliciting

contributions for itself? Yes, if

the solicitation is made through

general public political advertisin

(see first question). A

solicitation made by a nonconnected

committee must identify who paid fo

the advertisement or mailing, e.g.

"Paid for by Acme Corp. PAC and no

authorized by any candidate or

candidate's committee."

Does a solicitation for a

corporate or labor separate

segregated fund have to include a

disclaimer? No, because corporate

and labor PAC solicitations are se

only to a restricted class of

solicitees--not to the general

public. 11 CFR 110.11(a)(1)(iv)(B

If the PAC solicits

contributions from the general

public on behalf of a candidate,

however, then the solicitation mus

carry a notice stating who paid fo

it and whether it was authorized b

the candidate.

Can the notice stating who

sponsored an advertisement or

solicitation use an abbreviated for

of the sponsor's name? No. The

disclaimer notice must use the ful

official name of the individual or

committee who paid for and

authorized the communication.

Does an ad for a federal

candidate have to comply with state

laws on disclaimers? No. The Act

preempts state disclaimer requirements to the extent that they apply

to federal candidates and committees. 2 U.S.C. §453; AOs 1986-11,

1981-27, 1980-36 and 1978-24.

(continue
May 1990 FEDERAL ELECTION COMMISSION

Are there other federal rules

that apply to political advertisements? There are laws that govern

the broadcasting of political

advertisements, but they are

administered by the Federal Communications Commission (FCC), not

the FEC. For information, write to

the FCC's Political Programming

Branch, 2025 M Street, N.W.,

Washington, D.C. 20554, or call

202/632-7586.

EXEMPT PARTY ACTIVITIES

State and local party committees

or organizations may make disbursements for certain activities that

bene.fit the party's candidates, but

are excluded from the Act's

definitions of "c6ntribution" and

"expenditure." Thus, these I'exempt

party activities" are not subject to

contribution or coordinated expenditure limits--when the activity is

conducted according to the guidelines described below.

Note that these exemptions only

apply to state and local party

committees, and not to national

party committees or other unauthorized committees.

General Rules

What exempt activities may party

committees engage in? State and

local party committees and organizations may conduct the following

exempt activities:

o Distribution of slate cards or other

listings of candidates;

o Distribution of campaign materials

by party volunteers in the general

election; and

o Voter drives on behalf of a party's

Presidential ticket.

May exempt activities benefit

both federal and nonfederal

candidates? Yes. If, however,

exempt activities benefit both

federal and nonfederal candidates,

the portion of the disbursement

allocable to the federal candidates

must be paid for with funds raised

under federal law. 11 CFR 100.7(b)

(9), (15)(ii) and (17)(ii) and 100.8

(b)(10), (16)(ii) and (18)(ii).

10

Volume 16, Num

How do we determinelwhat is 

appropriate allocation? Expens

may be allocated between federal 

nonfederal accounts on any reaso

able basis. For example, a stat

local committee may allocate pay

ments based on the time or space

devoted to federal candidates

compared with that devoted to no

federal candidates. See AO 1978-

May unregistered local party

organizations conduct exempt

activities? Yes. However, even

though such organizations are no

registered as political committe

under the Act, they must neverth

less use funds that are permiss

under federal law to finance the

portions of the exempt activitie

that are allocable to federal

candidates. 2 U.S.C. §§431(8)(B

( x ) ( 2) and (9) (B)( vii i) (2).

If an unregistered local pa

organization undertakes exempt

activities, will it have to reg

as a federal political committee

It might. Such an organization 

register as a federal political

committee when it spends more th

$5,000 in g calendar year on exe

activities. 2 U.S.C. §431(4)(C

CFR 100.5(c).

Slate Cards and Sample Ballots

Under what circumstances ma

slate card be considered an exem

activity? payments to finance a

slate card (or other printed lis

candidates, i.e., sample ballot 

palm card) are considered an exe

activity when:

o The list names at least three

candidates for any public offi

(federal, state or local);

o The list is not distributed

through public political

advertising (although direct 

may be used);

o The content is limited to the

identification of the candida

including office sought, any

positions held and party

affiliation; and

o The portion allocable to fede

1. The Commission is currently 

the process of revising the

allocation rules.
FEDERALELECTION COMMISSION

•

•

•

May 1990

candidates is paid with

permissible funds.

2 U.S:C. §§431(8)(B)(v) and

(9)(B)(iv); 11 CFR 100.7(b)(9) and

100.8(b)(10). '

Does the exemption apply" if the'

list contains additional information

about the candidates? No. To be

exempt, the content of the list must

exclude additional .. biographical

information about the candidates,

statements of t he i r positions and

s t a t.emen t-s on party ph irLos ophy,

Inclusion .of such Lnf.orma t j on

disqualifies the activity for the

exemption. AO 1978-89. '

May any voter information ,be

printed on the list? Yes. Certain

information for voters, such as

time, place and instructions on

voting a straight party ticket, may

be included without jeopardizing the

exemption. AOs 1978-89 and 1978-9.

Campaign Materials

what guidelines must be followed

to ensure that campaign materials

qualify as an exempt activity?

Payments made by state and local

party committees or organizations

for campaign materials, such as

pins, bumper stickers, brochures,

handbills, yard signs and posters,

are exempt activities when:

o The materials are distributed on

behalf of the party's nominees for

the general election;

o The materials are distributed by

volunteers and not through public

political advertising (such as

broadcasting, newspapers,

magazines, or billboards),

commercial operations or direct

mail;

o The payments for the portions

allocable to federal candidates

11

Volume 16, Numbe

come from funds that are

permissible under federal law;

o 'The payments for the materials a

not made from funds expressly

designated by the dorro'r for'

specific fec;leralcandidates;'

o The payments are not made'Hol\l'

funds transferred from the ' national party'committee

specifically' to pay for the activity~ and ' "

o The national committee does not,

pay for or provide the materials,

2 U.S.C. §§431(8)(B)(X) and ' 

(9)(B)(viii); 11 CFR100.7'(b)(15)

and 100.8(b)(16).· ' ,

May we offer' lunches' In' a toke

payment to volunteers who are

distributing the'materials? 'Yes.

Party payments for travel or subsistence would not alter their

status as volunteer's .' 11 CFR 100.

( b) (15 ) ( i v) and 100.8 (b) (16 ) ( i v) .

Reporting

Are disbursements for exempt

activities reporta,ble? Yes .. Although they do not count against

contribution or coordinated

expenditure limits, disbursements

for exempt activities must be

reported as operating expenditures

by state and local committees that

have registered as political

committees under the federal law.

For reporting purposes, however, t

disbursements need not be allocate

to specific candidates. Note,

however, when conducting exempt

voter drive activity, if the menti

of a House or Senate candidate is

more than merely incidental, the

cost attributable to the Congressional candidate is a reportable

contribution or coordinated

expenditure. See 11 CFR 100.7(b)

(17)(iv) and 100.8(b)(18)(iv) .

•
• H " • • • _ .~ • ~_ _.

. , . . - \. . , 

. 

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

May 1990 . FEDERAL ELECTION COMMISSION Volume 16,Num

The first number/in·each

citation refers tothe."number"

(month) of the 1990.Rec-ord issue in

which the article appeared: thesecond number ,.following the colon,

indicates the page number in that

issue. .

. ADVISORY OPINIONS

. 19"89-21: rundraising by sole

proprietor in cooperation with

candidates, 1:9

1989-25: preemption of state law

limiting party spending on behalf

of candidates, 1:10

1989-26: Automatio bank transfers

from contributor's account to

candidate committee's account,

1: 11 .

1989-27: Act's preemption of state

law governing solicitations by

state employees, 2:2

1989-28: Voter guides distributed by

nonprofit corporation, 3:9

1989-29: PAC established by company

owned by foreign principal, 2:3

1989-30: payment to Senator for

teaching course, 2:4

1990-1: Corporation's sale of 900-

line fundraising service to

candidates, 4:3

1990-2: Candidate's use of excess

campaign funds to secure loan for

party committee, 4:5

1990-3: PAC's sale of advertising

space in newsletter, 5:3

FEDERAL ELECTION COMMISSION

999 E Street, NW

Washington, DC 20463

Official Business

COURT· CASES

Austin.v. 'Michigan state Chamber 

Commerce, 5:5

FEC v. --- =-Franklin, 1:13 " Furqatch (83-0596-GT(M)}~ 

- Life Amendment PAC', Inc. '.' '(89-14~9),'4:7 -'-.'.'

National Right to Work

committee, Inc., 5:7

v. FEC - Common Cause (89-0524(GAG

3:11 - Dolan, 5:7 - NRA (89-3011), 2:7

MUR SUMI'IARIES

MUR 2823: Excessive contribution

received by candidate committe

2:4

MUR 2599: Reporting errors by

Congressional campaign, 4:6

800 LINE

Basic recordkeeping rules, 4:8 

Combined dues/solicitation

statement's, 1:17

Coordinated party expenditures, 

Designating a principal campaign

committee, 1:19

Disclaimer notices, 5:8

Exempt party activities, 5:10

New treasurer, 2:9

When reimbursements are required 

SSFfundraising, 2:8

Bulk Rate Mail

Postage and Fees Paid

Federal Election Commissio

Permit Number G-31