•

April 1989

FEDERAL ELECTION COMMISSION

999 E Street NW Washington DC 20463 Volume 15,Number 

•

•

FEC AUDITS PRESIDENTIAL PRIMARY

CAMPAIGNS

According to a status report submitted to the

Commission on March 16, 1989, the FEC's Audit

Division has recently completed interim audit

reports on five of the fifteen Presidential primary

candidates who received public funds for their

1988 campaigns. A final audit report for one of

these committees has also been completed and

released to the general public,

The Commission is required by law to audit

the campaign finances of all com mittees receiving public funds to ensure that the money has

been used only to cover "qualified campaign expenses," as defined in 26 U.S.C. S9032(9). See 26

U.S.C. ss 9008(g) and 9038.

According to FE C regulations, Audit staff

conduct fieldwork to review the records of each

committee's finances. At the conclusion of the

on-site review, the Audit Division prepares an

interim audit report for Commission approval.

Once the interim report is approved, the com mittee is given the opportunity to respond to the

findings in the interim audit. II CFR 9038.1. A

final audit report is then prepared for release to

the general public.

An interi m audi t report may contain Commission findings and recommendations in any of

the following areas:

o Procedures employed by a committee to comply with the provisions of the election law;

o Eligibility of the candidate to receive primary

matching payments;

o Accuracy of statements and reports filed with

the Commission;

o Compliance with applicable statutory and regulatory provisions;

o Preliminary calculations regarding future repayments of public funds to the Treasury. 11

CF R 9038.l{e).

The Commission has approved interi m audit

reports for the campaigns of Bruce Babbitt, Pete

du Pont, Albert Gore, Alexander Haig and Gary

Hart, as well as the Repubtiean and Democratic

convention committees, which are also recipients

of public funds. In addition, the Commission has

approved the final audit report for the Pete du

Pont campaign; the report is available to the

general public from the FE C's Public Recor

Office.

Fieldwork has been completed for the ca

paigns of Robert Dole, Lenora Fulani, Richa

Gephardt, Jack Kemp and Lyndon LaRouch

Fieldwork continues for the primary campaigns 

George Bush, Michael Dukakis, Jesse Jackson a

Paul Simon.

The Commission expects to publicly relea

final audit reports for most of these com mitte

during 1989.

TABLE OF CONTENTS

1 AUDITS

FEe Audits Presidential Primary Campaign

2 SPECIAL ELECfION; Wyoming

2 ADVISORY OPINIONS

3 REGULATIONS

Hearings on Debt Settlement Regulations

4 STATISTICS

Congressional Spending in '88 Elections

7 COMPLIANCE

Nonfilers

MUR Summaries

9 COURT CASES

MRLC v, FEC

New Litigation

10 STAFF

Commission Appoints New EEO Officer

11 PUBLICATIONS

New Compilation of E&Js for Regulations

11 INDEX

:
The Record is publisbed 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

Volume 15,Number

Period Reg./ Filing

Covered Cart. Date

Mailing

Date*

** - 4/6 4/11 4/14

4/7 - 5/16 5/26 5/26

5/17 - 6/30 7/31 7/31

continue

SUbject

Honorarium received by staff memb

of standing Congressional committe

(Date made public: February 1, 198

Length, 6 pages)

AOR

1989-1

, ....... .,..... 7--'--,.,,-------·· -~-~--~----_.......~. -.~._--....<----~ ,-?

, '"T~"" 0 

"' -- } r~ ~-..,;- -... ,~, .'.... - ,-..f " 

; II', I ~J:)~';t;\!,~ Ji~l~~~;lkt.."' % 

'" ;:.,.,~ . _' 1~ \ j ~\ .~: ~_1 Q i _ :_~ I~- .).i ~. ~~;~:~I_"\,· ,Y,

. , ,

, , 

~-- --"'---.., -- - -- .. --~ - ~. _.~ - -~ -~ -- ---.'. . - - ~. -~ ~- ~- '--

Pre-general

Post-general

Mid-year

Where to File

Authorized committees file with the Clerk 

the House (see Form 3 for the address). ~ar

committees and PACs file with the appropria

federal office (usually, the FEC; see Form 3

for more details).

All committees must simultaneously fi

copies of special election reports with the Offi

of the Secretary of State, 106 State Capito

Cheyenne, WY 82002-0020.

Fn.ING DATES FOB APRIL 26

WYOMING SPECIAL ELECTION

..Reports sent by registered or certified ma

must be postmarked by the mailing date. Repor

that are not sent by registered or certified ma

must be received by the fUing date.

**The close of books of the last report filed 

the date of the committee's first activity, if n

previous reports have been filed.

Report

ADVISORY OPINION REQUESTS

The following chart lists recent requests f

advisory opinions (AORs). The full text of eac

AOR is available to the public in the Commi

sion's 0 [fiee of Public Records.

April 1989 FEDERAL ELECTION COMMISSIOI\J

WYOMING SPECIAL ELEcrlON

Wyoming has scheduled a special general

election to fill the at-large seat vacated by

Representative Dick Cheney, who was recently

confirmed by the Senate as Secretary of Defense.

The special election will take place on April

26, 1989. The Republican and Democratic nominees were selected by state party committee

meetings in March.

Reporting requirements are explained below.

For further information on reporting or other

requirements of federal election law, call

800/424-9530 or 202/376-3120.

Party Committees and PACs

Party committees and PACs that make contributions or expenditures in connection with the

special election during the coverage dates listed

in the table must file the appropriate reports.

Commi ttees that file monthly reports during

1989, however, do not file pre- and post-election

reports.

Any PAC (including a monthly filer) that

makes independent expenditures in connection

with the special election may have to file lastminute reports on independent expenditures. Independent expenditures aggregating $1,000 or

more that are made during the period April 1

through April 24 must be reported within 24 hours

after the expenditure is made. 11 CFR 104.4(b)

and I04.5(g).

Nominees' Authorized Committees

Authorized committees of nominees running

in the general election must file pre- and postgeneral election reports as indicated in the table

below. Note that an authorized committee "must

also file special notices on contributions of $1,000

or more received during the period April 7

through April 23. The notice must reach the

Clerk of the House and the Wyoming Secretary of

State (see below) within 48 hours of the committee's receipt of the contribution. II CFR

104.5(0. See also AO 1988-32.
April 1989 FEDERAL ELECTION COMNIISSION

IFor a summary of the opinion, see the

March 1988 Record, p. 5.

Volume 15, Number 4

FEe HOLDS PUBLIC HEARING ON PROPOSED

DEBT SETTLEMENT REGULATIONS

On February 15 and 16, 1989, the Commissio

held a public hearing on proposed regulator

changes regarding debt settlement by candi~~te

and political committees. The proposed reVIS1?n

were outlined in a Notice of Proposed Rulemakm

published on December 6, 1988.1 See 53 Fe

Reg. 49193.

During the hearing, presided over by F~

Chairman Danny Lee MeDonald, the Comml

stoners heard testimony from three witnesse

William R. White, Counsel and Treasurer for th

John Glenn Presidential Committee; Robe

Bauer General Counsel for the Democratic Se

atori;l and Congressional Campaign Committe

(DSCC and DCCC, respectively); and Gordon M

Strauss, General Counsel for the Ohio Republica

Party, who submitted his comments with John 

Dilenschneider of the Smith and Schnacke la

firm.

The full texts of the testimony and commen

submitted by the witnesses are available from th

FECrs Public Records Office.

Testimony

William R. White testified and submitte

comments related to the debt retirement acti

ities of publicly funded Presidential campaig

committees, such as Senator Glenn's 1984 Pres

dential committee. He proposed that the FE

amend the regulations to permit unlimited contr

butions to inactive Presidential campaigns und

certain circumstances. Mr. White recommende

continue

Issues

The Notice of Proposed Rulemaking r

quested comments on a proposed new Part 116 

the regulations governing debt settlement. Th

areas of concern included:

o Distinctions between ongoing and terminatin

committees with respect to debt settlement;

o Comprehensive debt settlement plans filed b

terminating committees; . o Creditors' forgiveness of debts owed by ongoin

-though defunct- committees and Commissio

review;

o Debts owed by publicly-funded Presidenti

campaign committees;

o Extensions of credit and settlement of deb

owed to corporate and noncorporate vendor~; 

o Advances by committee staff and other ind

viduals;

o Salary payments owed to committee employee

o Disputed debts; and

o Transfers involving indebted committees.

Payment of debt to vendor by unsuccessful candidate committee. (Date

made publics February 1, 1989;

Length, 12 pages)

Contributions to trade association

PAC through payroll deduction by employee stockholders. (Date made public: March 10, 1989; Length, 3 pages)

1989-3

RECONSIDERATION OF AO 1987-31

On February 9, 1989, the Commission voted

to reconsider Advisory Opinion 1987-31, originally

issued January 28, 1988,1 According to this

reconsidered AD, CBOEPAC, the separate segregated fund of the Chicago Board Optio.ns Exchange (CBOE), may solicit members designated

as "nominees." CBOE is an incorporated membership organization that acts as, a secur~ties

exchange for the trading of cer-tain standardized

option contracts. . . In the original AO, the Commission had determined the solieitability of eight classes of

members of CBOE. The Commission had concluded that nominees were not sollcitable members under FEC regulations because they acted

solely as representatives of organizations that

were members of CBOE.

Upon review of additional information supplied by CaOE with its request for reconsi?eration, the Commission determined that normnees

do qualify as solicitable members of CBOE because they must meet all requiremen.ts for membership in CBOE, in accordance WIth 11 CPR

114.1(e). Although nominees have members!Up

rights and obligations only as ? r~sult of being

designated by a member org8:nlzat!on, t~e r~levant participatory rights and financial obllga.tlOns

have been shifted to them personally. Nominees

are liable for the payment of dues (though their

member organization may also be liable). Nominees have the same voting rights as "regular

members" under the CBOE eonsti tution. They

also enjoy the same privile~es and responsi~ili~i~s

stemming from membership status as do individual members. Furthermore, they are individually

subject to CBOE's membership rules. Because

these factors demonstrate the distinct personal

nature of the nominees' participatory and financial attachment to CBOE, CBOEPAC may solicit

them for contributions.

Commission determinations regarding the

other membership classes were not affected in

the reconsideration. Commissioner Lee Ann

Elliott issued a concurring opinion. (Date issued:

February 13, 1989; Length, including concurrence:

8 pages)

1989-2 •

•

3
April 1989 FEDERAL ELECTION COMMISSION Volume 15, Number 

that such a regulatory exemption to the contribution limitations would apply only if:

o The candidate did not receive his or her party's

nomination, did not run for President in the

succeeding election, and still had debts remaining after the party convention taking place

before the next election (e.g., a 1988 primary

candidate would qualify for the exemption if he

had debts remaining after the 1992 party convention and if he had not received the 1988

nomination or sought the 1992 nomination);

o All audits, reviews and compliance matters had

been completed and resolved;

o Any required repayments had been made and

any civil penalties had been paid;

o The contributions were made for the sole purpose of paying outstanding debts; and

o The debts were not originally incurred with the

intent to repay them pursuant to this exemption.

Robert Bauer, submitting comments on behalf of DSCC and DCCC, cautioned the Commission not to exceed its statutory area of competence in its handling of the proposed debt

settlement plans. To fully achieve the goals the

Commission had outlined in the Notice, such as

"fairness to creditors," Mr. Bauer asserted that

the FEC would have lito sit as a regulatory

referee in bankruptcy." Among his comments on

the FEC's proposals, Mr. Bauer:

o Suggested that the Commission rework the proposed regulations to allow ongoing committees

to settle debts for less than the entire amount

owed;2 .

o Suggested that the Commission, when monitoring an extension of credit in the normal

course of business, rely on the creditor's judgment about whether an extension was sound and

profitable business-presuming the arrangement

did not appear to have an election-influencing

purpose; and

o Critieized the FEC's proposed guidelines concerning the submission and review of comprehensive debt settlement plans by terminating

committees because the Commission's review

of such plans would hinder and delay the payment of debts and because the agency's reviewing standards were not dearly defined.

Gordon M. Strauss and John J. Dilenschneidel', commenting on behalf of the Ohio Republican

Party, urged the Commission not to promulgate

1The Notice of Proposed Rulemaking was

summarized in the January 1989 Record.

2Under current regulations, a corporation

may forgive or settle a debt for less than the full

amount owed if the settlement is made in a

commercially reasonable manner and if the creditor or committee files a debt settlement statement with the FEC prior to the committee's

termination. 11 CFR 100.7(a)(4) and 114.10.

4

regulations that would conflict with the feder

bankruptcy code, Title 11 of the U.S. Code. Th

claimed that the proposed Part 116 regulation

concerning the submission of debt settleme

plans, would create an unneecessary bureaucrat

layer in the settlement process. They suggeste

instead, that the Commission discontinue or su

pend the rule making and appoint a panel of e

perts in bankruptcy and politics to study th

entire matter and recommend rules and legisl

tion to reconcile the competing interests. Th

further recommended that the Commission co

sider becoming a "party in interest" in bankruptc

hearings for political committees, similar to th

SEC's role in bankruptcy hearings of publicly he

corporations. The Commission could thereb

avail itself of the extensive investigatory arm 

bankruptcy courts.

CONGRESSIONAL SPENDING INCREASED 

ONLY SLIGHTLY IN 1988

A preliminary FEC report released in Febr

ary showed that spending for the 1988 Congre

sional campaigns increased only slightly from th

previous election cycle. House spending rose 7

percent from, the previous election, and Sena

spending decreased 5.0 percent. Total spendin

for the races for both houses reached $458 millio

in 1988, compared with just over $450 million 

1986-an increase of less than 2 percent. B

contrast, the 198.6 total was 20 percent great

than the total for 1984.

Chart I compares 1988 Congressional incum

bents, challengers and open-seat candidates 

terms of the money they received, spent and ha

left over at the end of the election cycle.

Chart II compares the aggregate receipts an

expenditures of winning Senate and House cand

dates in the past three general elections. Contr

butions from PACs are also shown in the "r

ceipts" sections.

A copy of the FEC press release coverin

receipts and expenditures for all 1988 Senate an

House candidates may be obtained from the FEC

Public Records Office or by calling 202/376-314

or 800/424-9530. The Final Report on 1988 Co

gressional spending is due to be released later th

year. 
150 175

Volume 15,Number

Millions of Dollars

25 50 75 100 125

FEDERAL ELECTION COMMISSION

o

April 1989

CHART I

FINANCIAL ACTIVITY OF CONGRESSIONAL • CAMPAIGNS, 1987·88

SENATE

lacumbents

Receipts

Disbursements

Cash on Hand

Challengers

Receipts

Disbursements

Cash on Hand

Open Seat

Receipts

Oisbursements

Cash on Hand

•

HOUSE

Incumbents

Receipts

Disbursements

Cash on Hand

Challengers

Receipts

Disbursements

Cash on Hand

Open Seat

Receipts

Disbursements

Cash on Hand

Receipts

I{<l Individual Contributions

• PAC Contributions

• Support from Candidate1

• Other 2

TThisbar includes candidates' loans and contributions to their respective campaigns. Due to variations in reporting,

loans that have been forgiven may be counted as both direct contributions and loans, with the result of increasing the total

amount. For an accurate accout of candidate support, consult the reports filed by campaigns.

20ther includes bank loans, interest, dividends and offsets to expenditures.

5
April 1989 FEDERAL ELECTION COMMISSION Volume 15, Number 

CHART II

RECeIPTS AND EXPENDITURES OF

WINNING CANDIDATES

Millions of Dollars

200 --------------------------

175 ------------1

150 --------I

125

100

75

50

25

o

• PAC Receipts

f-------0 Other Receipts ----

• Disbursements

1983 - 84 1985·86 1987·88

House

6

1983 - 84 1985 - 86 1987 - 88

Senate
FEC PUBLlSHES NONFILERS

In February, the Commission published the

names of two Presidential campaigns that failed

to file disclosure reports required by the election

law. See chart below.

The election law requires the agency to publish the names of nonfiling candidates. Compliance actions against nonfilers are decided on a

case-by-case basis. The law gives the Commission broad authority to initiate enforcement actions resulting from infractions of the law, including civil court enforcement and imposition of civil

penalties.

day of the reporting period for the pre-gene

report. Yet, the committee had not filed a p

general election report. 1 In response to the Co

mission's findings, the committee stated that t

contribution was, in fact, made on the first d

of the general election report period and that t

date listed on the post-general report was a typ

graphical error. The committee subsequen

amended its post-general report to correct t

mistake. Thus, the General Counsel reco

mended that the Commission take no furth

action with regard to the committee's failure 

file the pre-general election report.

With regard to the other three reports 

question, FEC records showed that the committ

filed the 1985 mid-year report 301 days late,2 t

1985 year-end report 117 days late and the 19

April quarterly report 70 days late. Thus, t

General Counsel recommended that the Comm

sion find probable cause to believe that the co

mittee and its treasurer violated 2 U.S.C. S434

(4)( A)(j) Roil liv\.

•

April 1989

Nonfilers

FEDERAL ELECTION COMMISSION Volume 15, Number

MUR SUMMARIES

*The candidate's principal campaign committee subsequently filed the report.

MUR 2356: PAC's Failure to File Reports

On Time

This MUR, resolved through conciliation, concerned the failure of a political action committee

(the committee) to file required disclosure reports

in a timely manner.

General Counsel's Report

The Commission found reason to believe that

the committee and its treasurer had failed to file

four reports, in violation of 2 U.S.C. S434(a)(4)

(A)(i), (ii) and (iv), An aGC investigation revealed

that the committee's 1986 post-general report

disclosed a contribution that was made on the last

continu

1An Wlauthorized committee is required 

file a pre-election report if it makes contributio

to or expenditures on behalf of a federal can

date and such disbursements have not previou

been disclosed. The report must be complete as 

the 20th day before the election. 2 U.S.C. sect

434(a)(4)(A)(iv); 11 CFR 104.5(c)0)(ii).

21n nonelection years, the mid-year repor

due July 31 and the year-end report is due Janu

31 of the following year. 2 U.S.C. section 434

(4)(A)(iv); 11 CFR l04.5(c)(2).

Commission Determination

While the Commission decided to take 

further action against the committee and 

treasurer with regard to the pre-general electi

report, it voted to find probable cause to belie

that the committee and its treasurer had failed 

file three reports in a timely manner, in violati

of 2 U.S.C. S434(a)(4)(A)(i) and (iv), When t

respondents failed to settle the matter within t

allowable time period, the Commission authoriz

the General Counsel to institute a civil suit 

relief. SUbsequently, the committee and 

treasurer entered into a conciliation agreement 

which they agreed to pay a civil penalty 

$4,000, thereby settling the matter.

MURs 1528/1139: Party Activities: Prohibited

Funds, Transfers, Allocation

and Loans

Two MURs, merged together and resolved throu

conciliation, involved a federal account (the Fe

eral Committee) of a state party organizati

(the State Party) and a nonfederal county co

mittee (the County Committee), also part of t

State party structure. Violations by the thr

entities included:

Year-End

Year-End*

Report

Not Filed

President

President

Office

Sought

Fernandez, B.

Jackson, J.

Candidate

Background

The matter originated when the committee

failed to file three reports on time duI'ing the

1985-1986 election cycle. Consequently, the

FEC's Reports Analysis Division (RAD) sent a

chronic late-filer notice to the committee, warning it of possible enforcement proceedings should

the committee fail to file another report on time.

When the committee neglected to file the pregeneral report by election day, RAD referred the

matter to the General Counsel's Office (GGC) to

begin enforcement proceedings.

•

•

7
April 1989 FEDERAL ELECTION COrvlMISSION Volume 15, Number 4

o The acceptance by the Federal Committee of a

contribution containing prohibited funds from

the County Committee;

o Illegal transfers to the Federal Committee

from a nonfederal account of the State Party;

c Failure of the State Party to allocate administrative expenses between its nonfederal account and the Federal Committee;

o Failure of the Federal Committee to adequately report expenditures made on behalf of candidates;

o Failure of the Federal Committee to keep complete records;

o The securance of a bank loan to the Federal

Committee with funds in the State Party's nonfederal account; and

o Failure of the Federal Committee to file required reports.

BackgroWld

MUR 1528 was internally generated by a

referral from the FEC's Reports Analysis Division

(RAD) after the State Party failed to adequately

respond to FEC requests for additional information about transactions between its federal and

nonfederal accounts. MUR 1528 was merged with

MUR 1739, which had also been internally generated by a referral from RAD. The RAD referrals

led to an FEC audit, which uncovered evidence of

several violations of the Act and regulations.

General Counsel's Report

County Committee. The Commission found

reason to believe that the County Committee had

made a $1,000 contribution to the Federal Committee in 1981 with funds derived from corporate

and labor money-a violation of 2 U.S.C. S441b(a).

The Commission focused its investigation on

whether the County Committee had enough permissible funds in its account to make a contribution in connection with a federal election. Under

11 CFR 102.5(b), if an unregistered committee

wishes to make contributions in connection with

federal elections, it must either establish a separate account for funds permissible under the Act

or be able to demonstrate through a reasonable

accounting method that it had enough permissible

funds to make such a contribution. The County

Committee's records showed that only one of the

committee's four sources of funds constituted a

permissible source to use in connection with a

federal election. Since the County Committee did

not have enough permissible funds in its account

to make the contribution, the General Counsel

recommended that the Commission find "probable

cause to believe" that a violation of 2 U.S.C.

S44Ib(a) had occurred.

The State Party. The Commission found

"reason to believe1l that the State Party violated 2

U.S.C. S441b(a) and 11 CFR 102.5(a)(1)(i) and

8

106.1(e). Section 441b(a) prohibits the use of cor

porate and labor money in federal elections, while

11 CFR 102.5(a)(1)(i)states that a political organ

ization with two accounts-for federal and non

federal election activity-may 'make expenditure

in connection with federal elections only from it

federal .account, Furthermore, 11 CFR 102.5(a

(1)(0 prohibits any transfer of funds from th

organization's nonfederal account to its federa

account.

The FECrs. investigation revealed that th

State Party transferred $17,900 from its non

federal account to the Federal Committee during

1981 and 1982, and that the State Party made a

prohibited contribution to the Federal Committee

in the form of security for a bank loan in 1982

Also, in 1981, the State Party accepted into the

Federal Committee's account the $1,000 con

tribution from the County Committee. Thus, the

General Counsel recommended a finding of "pro

bable cause to believe" that the State Party

violated 2 U.S.C S441b(a) and II CFR 102.5(a

(1)(i).

Moreover, 11 CFR 106.1(e) requires politica

committees with federal and nonfederal account

to allocate administrative expenses between the

two accounts on Ii reasonable basis. Commission

investigation of the' State Party's records showed

that the State Party failed to allocate administra

tive expenses between its nonfederal account and

the Federal Committee in 1981 and 1982. Thus

the General Counsel recommended that the Com

mission find "probable cause to believe" that the

State Party violated 11 CFR 106.1(e).

Federal Committee. The Commission deter

mined that there was "reason to believe" that the

Federal Committee and its treasurer violated

several provisions of the Act and regulations.

Section 434(b)(6)(B)(iv) of Title 2 require

party committees reporting coordinated expendi

tures under 2 U.S.C. S441a(d)1 to disclose, along

with other information, the name of a candidat

on whose behalf such expenditures were made and

the office sought by that candidate. An investiga

tion revealed seven expenditures for which thi

information was not reported, Thus, the Genera

Counsel recommended finding "probable cause to

believe" that the Federal Committee and it

treasurer violated the Act.

The Commission's. investigation also revealed

that the Federal Committee did not keep ade

quate records, as prescribed by 2 U.S.C. §432(c

(5), for three coordinated expenditures. Based on

these findings, the General Counsel recommended

that the Commission find "probable cause to be

lieve" that the Federal Committee and its treas

urer violated the Act. -~-----_._--------------

lSect ion 441a(d) permits a state party

committee to make expenditures on behalf of the

pctrty1s general election nominees for the HOU3

and Senate subject to limitation. .
FEDERAL ELECTION COMMISSION

•

April 1989

The Commission also found reason to believe

that the"Federal Committee and its treasurer violated 2 U.S.C. §441b(a) by accepting a loan secured with nonfederal funds. Further investigation supported this allegation, and" the General

Counsel recommended that the Commission "find

"probable cause to believe" that the Federal Committee and its treasurer violated the law.

Finally, the Federal Committee filed the

1983 Mid-Year Report 50 days late and failed to

file any required reports in 1984. Because of the

committee's failure to file these reports on time,

the General Counsel recommended that the Commission find "probable cause to believe" that the

Federal Committee violated 2 U.S.C. S434(a)(4)

(A)(i), (iii) and (iv),

Commission Determination

At the time the Commission considered the

General Counsel's recommendations, neither the

State Party nor the Federal Committee had ever

responded to the General Counsel's briefs. Endorsing the General Counsel's recommendations,

the Commission instituted a civil suit after the

respondents failed to reach a conciliation agreement. SUbsequently, the State Party signed a

conciliation agreement settling the matter.2 In

that agreement, the State Party agreed to pay a

civil penalty of $7,500 for the violations of both

the State Party and its federal account (the

Federal Committee). The State Party also agreed

to file the unfiled 1984 reports of the Federal

Committee.

MAINE RIGHT TO LIFE

COMMITTEE, INC. v, FEC

On February 24, 1989, the U.S. District Court

for the District of Maine granted the FEC's

motion for dismissal in Maine Right to Life Committee, Inc. v. FEC (Civil Action No. 85-o244-B).

The court determined that the case was not ripe,

based on the criteria established under Article III

of the Constitution.

MRLC and Sandra Paueher, a member of the

organization's board of directors, had challenged

the constitutionality of the FEC's regulations governing corporate dissemination of voter guides.

2At the time of the conciliation agreement, a

suit between the FEC and the Federal Committee

regarding a different matter was also conclUded

when the State Party signed a consent order in

which it agreed to pay a civil penalty. The order

also enjoined the defendant Federal Committee

from future violations of the Act. For details on

the suit, see page 8 of the October 1984 Record

and page 3 of the March 1985 Record.

9

Volume 15, Numbe

See 11 CFR 114.4(b)(5). The organization. wan

to use funds from its general treasury to pub

and distribute a voter guide. Fearing that 

expenditure would be prohibited under the FE

rules, MRLC asked the court to invalidate 

regulation governing voter guides and to issue 

injunction preventing the FEC from enforcing 

regulation.

In dismissing the case, the court conclu

that the plaintiffs had not exhausted the admin

trative remedies available to them to determ

the applicability of the regulations and the Ac

their particular situation. The plaintiffs, 

court observed, had not requested an advis

opinion from the FEC regarding their plan

expenditure. Noting that Maine's next fede

election was not scheduled until 1990 and that 

FEC was required to issue advisory opinions w

in 60 days, the court said, "The hardship result

to plaintiff from delay, if any can be found 

exist, is far outweighed by the interest in c

serving limited judicial resources and, m

importantly, by the interest in withholding ju

ment until FEC policies have crystallized."

NEWLITIGATION

FEC v. Bob Richards for President (89-0254)

The FEC asks the district court to dec

that the Bob Richards for President Commi

and Bob Richards, acting as treasurer, viola

the terms of a conciliation agreement ente

into with the Commission in June 1988. 

Waco, Texas, committee was Mr. Richards' p

cipal campaign committee for his 1984 Pr

dential campaign.

Under the provisions of that agreement, 

committee and Mr. Richards were required to:

o Pay a civil penalty of $12,000 no later than 

days after June 28, 1988, when the agreem

took effect; and

o File all required reports and statements w

the Commission within the same period of tim

As of the date this suit was filed, 

Commission had not received any payments on 

civil penalty or any of the required stateme

and reports from the defendants. The elect

law permits the Commission to take civil act

when any part of a conciliation agreement is v

lated. 2 U.S.C. S43'lg(a)(5)(D).

The FEe also asks the court to:

o Order the defendants to comply fully with 

terms of the conciliation agreement;

o Assess monetary penalties for violation of 

agreement;

o Award the FEC interest on the unpaid c

penalty provided for in the agreement; and

o Permanently enjoin the defendants from sim

future violations of the terms of the agr

ment.

U.S. District Court for the District of 

lumbia, Civil Action No. 89-0254, January 

1989.
April 1989 FEDERAL ELECTION COMMISSION

Common Cause v, FEC (89-oS24-GAG)

Common Cause asks the district court to

declare that the FEC acted contrary to law by

"par-tially dismissing" an admihistrative complaint

that Common Cause filed in October 1986.1

The administrative complaint alleged that

the National Republican Senatorial Committee

(NRSC) had violated the election law in its operation and reporting of a solicitation project which

benefited twelve 1986 Republican candidates for

the U.S. Senate. Common Cause claimed that

this operation resulted in excessive contributions

to each of the twelve candidates by NRSC either

because the contributions were not earmarked or

because the NRSC had exercised direction or

control over the choice of the recipient candidates. 11 CFR 110.6(d).

Specifically, Common Cause claimed that

NRSC had made contributions exceeding the limit

of $17,500 to each of the twelve candidates, in

violation of 2 U.S.C. §441a(h). In NRSC's direct

mail project, the committee collected checks

payable to NRSC with accompanying forms from

the donors indicating, by state, which Republican

Senate candidates would be supported with their

contributions. The Commission's investigation

later revealed that some contributions collected

were not earmarked for any particular races.

NRSC forwarded the earmarked contributions to

the appropriate committees and distributed some

of the nonearmarked contributions among six of

the candidates. NRSC did not report these funds

as earmarked contributions from itself, as would

have been required if NRSC had exercised direction or control or if the contributions were not

earmarked.

Although the FEC pursued other violations by

NRSC in connection with its fundraislng program,2 the Commission failed, by a split 3-3 vote,

to find probable cause to believe that NRSC had

---_._-------------------

1This compliance matter, MUR 2282, is

closed. A summary fila is available from the

FEels Public Records Office.

21n a previous suit related to Common

Causets complaint, Common Cause v. FEC (87-

2224-GAG), the plaintiff alleged that the FEC had

unlawfully delayed action on the complaint. In

May 1988, the court decided that if the FEC did

not resolve the complaint by August 1, 1988J the

court would hOld a factual hearing concerning the

lawfulness of the Commission's delay. On July 28,

1988, the Commission found probable cause to

believe that certain violations by NRSC had occurred. The Commission voted to enter into a

conciliation agreement with respect to those violations on December 23, 1988. The court subsequently dismissed the prior suit as moot on January tt, 1989.

10

Volume 15, Number 4

violated 2 U.S.C S434(b) by failing to report as it

own contributions approximately $2,718,813 i

earmarked contributions it had collected and for

warded to the twelve candidates. (Commissione

Thomas Josefiak issued a statement of reasons fo

his vote to find no probable cause in this matter

with a joint concurrence from Commissioner

Joan D. Aikens and Lee Ann Elllott.) Because th

Commission did not find probable cause to believ

that NRSC had failed to report the $2,718,813 a

contributions from itself, Common Cause con

sidered its complaint to have been "partially dis

missed."

In addition to asking the court to find tha

the FEe had acted contrary to law in handling the

administrative complaint, Common Cause asked

the court to:

o Issue an order directing the FEC to act in

accordance with the court's decision within

thirty days; and

o Award costs and attorneys' fees to the plaintiff

U.S. District Court for the District of Co

lumbia, Civil Action No. 89-0524-GAG, February

27, 1989.

FEC APPOINTS NEW EEO OFFICER

In February the Com mission appointe

Kathlene Carey Beuzard to be the agency's new

Equal Employment Opportunity officer. In tha

capacity, Ms. Beuzard manages the FEC's Equa

Employment Opportunity (EEO) program an

special emphasis programs, such as the Federa

Women's and Hispanic programs.

Ms. Beuzard will divide her time equally be

tween her EEO projects and her regular duties a

a public affairs specialist in the FEC's Infor

mation Services Division. She replaces Kary

Boozer, who recently resigned from the EEO posi

tion.

Ms. Beuzard has been an FEC staff membe

since 1976 and has served as an EEO counselo

since 1985. She holds a B.S. from Delaware Stat

College in Dover.
FEDERAL ELECTION COIVIMISSION

•

•

April 1989

EXPLANATIONS AND JUSTIFICATIONS FOR

FEC REGULATIONS: 19'15 - PRESENT

The FEC has just released a compilation of

all Explanation and Justifications (E&Js) written

si~ce 1975. The E&Js accompany regulations submitted by the FEC to Congress and explain the

origin and intent of the proposed regulations.

Designed as a looseleaf binder insert, the

compilation contains the following:

o E&Js for all current regulations, as well as for

older regulations that have been revised or

deleted;

o E&Js for rules that were never effective, along

with the text of such proposed regulations;

o A citation index identifying all E&Js applicable

to each regulation;

o A subject index to help locate topics addressed

by more than one E&J;

o A conversion table showing the widespread

changes in FEe regulations resulting from the

1979 amendments to the Federal Election Campaign Act; and

o An appendix that lists previous citations for

current regulations.

The E&:J compilation provides a useful reference tool for attorneys, accountants and others

who regularly work with federal election law.

Updates to. the compilation will be made available

~hen the FEC promulgates new or revised regulations, To order the volume, which costs $25.00,

and get on the mailing list for future updates

contact the Commission's Public Records Offic~ at 202/376-3140 or 8OD/424-9530.

This cumulative index lists advisory opinions,

court cases and 800 Line articles published in the

Record during 1989. The first number in each

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

Record issue; the second number, following the

colon, indicates the page number in that issue.

OPINIONS

1987-31: Solicitable membership classes of securities exchange (reconsideration), 4:3

1988-37: Affiliated status of two corporateP ACs

after leveraged buy-out, 1:6

1988-44: Effect of statute of limitations on committee's debts, 2:4

1988-45: Definition of national party committee

2:4 '

11

Volume 15,Number 

1988-46: Corporation's solieitation of license

2:4

1988-47: Publisher's donation of free magazines 

candidate prohibited, 1:6

1988-48: Contributions to trade association PA

matched with charitable donations, 2:5

1988-49: Federal bankruptcy trustees not cons

ered government contractors, 2:5

COURT CASES

FEC v,

-AFSCME-PQ, 1:11

-Braun for Congress Committee, 1:10

-nuu for Congress, 1: 11

-Californians for a Strong America (

1554), 1:9

-Californians for a Strong America (

6499), 1:II

-Citizens Party, 1:12

-Dietl for Congress, 1:10

-Haley Congressional Committee, 1:9

-Holmes Committee, 3:3

-Life Amendment Political Action Co

mittee, 1:11

-Populist Party, 1:12

-Richards for President, 4: 10

-Rodrlguez, 1:10

-Survival Education Fund, Ine., 3:4

-Taylor Congressional Committee, 1:10

Fund for a Conservative Majority, Debtor, 3:4

v, FEe

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

-Common Cause (89-0254-GAG), 4:9

-Maine Right to Life Committee, Ine., 4:

-Miller, 3:3

-Stern, 3:4

-USDC, 1:9; 3:3

MUR SUMMARIES

MURs 1528/1739: Party activities: prohibit

funds, transfers, allocations and loans, 4:7

MUR 2175: Excessive and prohibited contrib

tions accepted by 1984 Presidential campaig

3:6 

MUR 2356: PAC1s failure to Jile reports on tim

4:7 

800 LINE

Debt retirement by candidate committees 1:7

Designating a principal campaign committ'ee, 3:
April 1989

CHANGE OF ADDRESS

FEDERAL ELECTION COMMISSION Volume 15, Number 4

Political

Registered

Committees

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.

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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