Washington DC Volume 14.Number 

FEC APPROVES MATCHING FUNDS

FOR PRESIDENTIAL CANDIDATE

Lyndon H. LaRouche, a Democratic cand

date, was declared eligible to receive prima

matching funds for his 1988 Presidential prima

campaign. After finding LaRouche eligible, th

Commission certified his first payment to th

U.S. Treasury on March 24, 1988. This certific

tion, supplemented by certifications to eig

other eligible candidates on March 30, raised 

$48,101,890.40 the total amount of payments th

agency had certified to the Treasury by the en

of March.

The summary chart below provides cumul

tive information on certifications of prima

matching funds made to fifteen eligible Pres

dential candidates between January I and Mar

30, 1988. The chart also indicates the mo

recent certifications.made to eligible candidates

During 1988, an eligible Presidential cand

date may submit requests for primary matchin

funds on the second and fourth Mondays of ea

month. The Commission will certify a percenta

of the amount requested within one week 

receiving a request. The federal government w

match up to $250 of an individual's total contrib

continued on p: 

May 1988 009 E Street NW

FEC TERMINATES MATCHING FUND

ELIGmlLITY FOR EIGHT CANDIDATES

During recent months, the Commission determined that four Republican candidates and four

Democratic candidates were no longer eligible for

primary matching funds under the Presidential

Primary Matching Payment Account. The

candidates became ineligible for primary matching funds when each candidate announc:d publicly

that he would no longer actively campaign for his

party's Presidential nomination. II CPR 9033.5-

(a)(I). The chart below lists each candidate and

his date of lneligiblity,

The Presidential primary candidates listed

below became ineligible for public funds on the

date each candidate ceased to be an active

candidate for the Presidency. Under FEe rules, a

candidate may also become ineligible for public

funds 30 days after the candidate receives less

than 10 percent of the votes in two consecutive

primaries (the "10 percent rule"). II CFR 9033.5.

A candidate's actual ineligibility date is based on

which of the two dates occurs first.

SUbject to certain requirements, ineligi~le

candidates may, however, continue to receive

primary matching funds to retire outstanding

campaign debts incurred before the last day of

eligibility and to pay for costs of winding down

their campaigns. See II CFR 9034.5.

FEDERAL ELECTION COMMISSION

e·

Candidates Ineligible for

Primary Matching Funds

TABLE OF CONTENTS

PUBLIC FUNDING

1 Termination of Matching Fund Eligibility

I Matching Fund Certifications

Candidate Ineligiblity Date

SPECIAL ELECTIONS

2 New Jersey

·e

Babbitt, Bruce (D)

Dole, Robert (R)

DuPont, Pete (R)

Gephardt, Richard (D)

Haig, Alexander (R)

Hart, Gary (D)

Kemp, Jack (R)

Simon, Paul (D)

February 18, 1988

March 29, 1988

February 18, 1988

March 28, 1988

February 12, 1988

March II, 1988

March 10, 1988

April 7, 1988

3 ADVISORY OPINIONS

COURT CASES

6 Creditors' Claims Against '84 Hart Campaign

Vacated

7 Common Cause v. FEC (Third Suit)

8 FEC v. Dominelli
2

Candidates Running Only in Primary Election

Register- F

ed/Certi- 

tied Mail

Date*

5/23

7/15

Volume 14, Num

Period

Covered

4/1-5/18

5/19-6/30

Candidates Running in Primary

and General Elections

Report Period Register- 

Covered ed/Certi- 

fied Mail

Date*

Pre-primary 4/1-5/18 5/23 

July quarterly 5/19-6/30 7/15 

October quarterly 7/1-9/30 10/15 

Pre-general 10/1-10/19 10/24 

Post-general 10/20-11/28 12/8 

Pre-primary

July quarterly

Report

NEW JERSEY SPECIAL ELECTIONS

On June 7, 1988, New Jersey will ho

special primary election in its third Congres

District to fill the seat vacated by the dea

Representative James J. Howard. A special 

ral election ~i1l be held on November 8, 1988

Political committees authorized by c

dates (candidate committees) who are parti

ting in these special elections must file the a

priate pre- and post-election reports. The re

ing schedule will depend on whether the cand

participates in one or both elections. (See be

All other political committees which su

candidates in the special election{s) must 

follow the reporting schedule for the special 

tion(s). Note that monthly filers supporting 

didates in the special elections should contin

file on their monthly schedule. (See the mo

filer chart on p. 3 of the January 1988 Record

...Reports sent by registered or certified 

must be postmarked by the mailing date. Re

mailed first class or hand delivered mus

.., received by the filing date.

FEDERAL ELECTION COMMISSION

Amount Total Amount

Certified Certified

March 30

$ 870,134

$557,185 7,416,634

469,055 7,073,409

254,387 5,938,501

2,300,502

307,225

286,176 2,626,873

117,312 2,657,854

484,622

1,122,282

450,547 1,498,085

4,506,455

100,000

307,767 8,446,100

115,347 2,753,214

May 1988

Candidate

*AS or March 30, 1988.

Babbitt (D)

Bush (R)

Dole (R)

Dukakis (D)

DuPont (R)

Fulani (Ind.)

Gephardt (D)

Gore (D)

Haig (R)

Hart (D)

Jackson (D)

Kemp (R)

LaRouche (D)

Robertson (R)

Simon (D)

Primary Matching Fund

Certification Activity*

continued from p. 1

tions to an eligible candidate. Contributions from

political committees are not matchable. (See 26

U.S.C. 559034 and 9036 and 11 CFR 9034 and

9036.l(b) and 2(a).)
ADVISORY OPINION REQUESTS

The following chart lists recent requests for

advisory opinions (AORs). The full text of each

AOR is available to the public in the Commission's Office of Public Records.

FEDERAL ELECTION COMMISSION Volume 14, NumOO

Delegate Committees as Political Committees

Under the delegate selection regulations

delegate committee formed by individuals w

sought selection as Presidential delegates in 

Florida caucuses would become a political co

mittee if the committee received contributions 

made expenditures in excess of $1,000. Once 

became a political committee, a delegate co

mittee would be SUbject to the election la

registration and reporting requirements and 

limits on contributions. 11 CFR llO.14(g).

Delegate Committee Communications

When a communication employs public pol

cal advertising to expressly advocate the elect

or defeat of a clearly identified candidate, 

communication must include a disclaimer not

indicating the sponsor and whether the candid

authorized the communication. 2 U.S.C. §44

11 CFR 110.11. Although the three types 

com munieations planned by the Duka

delegate committees would refer to his Presid

tial campaign, two types-palm cards and ph

banks--would not have to include a disclaim

notice because they would not involve gene

public political advertising. However, a th

type-a direct mail piece-was an example 

AO 1988-1: Activity to Influence Delegate

Selection After Presidential Prima

After FLorida's Presidential primary on March 

Congressional district caucuses were schedu

for March 26 to select delegates pledged 

Democratic primary candidates at the Democ

tic National Convention. (The number of de

gates pledged to each Democratic candidate w

based on the candidate's share of primary votes 

each Congressional district.) Since the caucu

directly select delegates to the Democratic N

tional Convention, the activities of individu

who seek selection as delegates and of deleg

committees are subject to the FEC's deleg

selection regulations. See 11 CFR 110.14.

Mr. Rand Hoeh, an unpaid coordinator 

Governor Dukakis' primary campaign in two Flo

da Congressional districts, sought nomination a

Dukakis delegate in one of these districts. 

Hoch also directed the campaign activities 

delegate committees formed by individuals w

sought selection as Dukakis delegates from 

two districts. A number of his proposed activit

would result in contributions to Dukakis, as d

cribed below.

Corporation's marketing and sale of

medallions depicting candidates and

national nominating conventions.

(Date made public: March 31, 1988;

Length: 10 pages)

Liability of union for federal election

contributions made from its donations

to local party organization and nonfederal candidates. (Date made public: April 8, 1988; Length: 2 pages)

Corporate sponsorship of voter education program for children, e.g., voter

guide, broadcast of Presidential candidate interviews. (Date made public:

March 17, 1988; Length: 2 pages)

Membership organization PAC's program to support candidates through

independent expenditures and partisan

communications to members. (Date

made public: March 28, 1988; Length:

12 pages)

Joint PAC established by two corporations; affiliation of corporations.

(Date made publics March 11, 1988;

Length: 2 pages, plus 6-page

supplement)

SUbject

Campaign funds used to pay portion of

apartment rent in building owned by

candidate. (Date made publics March

11, 1988 ; Length: 2 pages)

May 1988

1988-16

1988-18

1988-17

1988-15

1988-14

AOR

1988-13

The Record is pUbli.sh~d by the Federal Election Commission, 999 E Street, N. W., Washington,

D.C. 20463. Com missioners are: Thomas J. Josefiak, Chairman; Danny L. McDonald Vice

Chairman; Joan Aikens; Lee Ann Elliott; John Warren McGarry; Scott E. Thomas; Waiter J.

Stewart, Secretary of the Senate, Ex Officio; Donna1d 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)

3
May 1988 FEDERAL ELECTION COMMISSION

public political advertising. Consequently, the

piece would have to include a disclaimer notice if

it expressly advocated Governor Dukakis'

Presidential candidacy.

Campaign Materials Supplied to

Delegates/Delegate Committees

Individuals who sought selection as Dukakis

delegates, as well as Dukakis delegate committees, could use campaign literature supplied by

the Dukakis campaign to advocate the delegates'

selection. However, any costs incurred for disseminating or republishing these materials 'would

be in-kind contributions to the Dukakis campaign.

Such contributions would count against:

o The contribution limits of the donors (Le., the

individuals seeking delegate selection or the

delegate committees); and

o Governor Dukakis' spending limit in Florida, if

the expenditures for the materials were

coordinated with the Dukakis campaign. 11

CFR llO.14(f)(3} and (i)(3)

Affiliation of Delegate Committees

Under the delegate selection regulations, the

Commission may consider a variety of factors in

determining whether a delegate committee is

affiliated with a Presidential candidate's authorizedcommittee. II CFR llO.14(j}. These factors

include:

o Whether a person associated with the Presidential candidate's authorized committee plays

a significant role in the formation of the delegate committee;

o Whether any person associated with the Presidential campaign directs or organizes the specific campaign activities of the delegate committee;

o Whether one committee provides a mailing list

to the other committee;

o Whether the Presidential campaign arranges for

contributions to be made to the delegate committee; and

o Whether the Presidential campaign provides ongong administrative support to the delegate

committee.

Based on these factors, the Commission concluded that the proposed delegate committees

would be affiliated with .the Dukakis campaign.

For example, as noted above, Mr. Hoch is associated with the Dukakis campaign and planned to

organize and direct several Dukakis delegate

committees. Other proposed activities would also

represent links between the delegate committees

and the Dukakis campaign: exchanges of lists

between the campaign and the delegate committees for phone bank and direct mail activities;

contributions to the delegate com mittees arranged by the Dukakls campaign; assistance provided to the committees by paid Dukakis campaign staff; ongoing administrative support supplied to the committees by the Dukakis campaign

4

Volume 14, Numb

and the filing of statements and reports for 

delegate committees by Mr. Hoch or ano

Dukakis campaign aide.

Moreover, because Mr. Hoch planned to 

tablish and direct activities of delegate com

tees in two Congressional districts, the two d

gate committees would be affiliated with 

other.

Membership Lists Supplied to

Delegate Committees

Since the regulations make clear that nei

individuals seeking selection as delegates nor 

egate committees may accept contributions f

prohibited sources, Mr. Hoch could not ac

membership lists from his labor or corpo

clients. See 11 CFR IIO.14(g).

However, Mr. Hoch could accept the 

from clients who qualified as lawful sources, 

as federal political committees. The donatio

a membership list would constitute an in-

contribution. If the list were given to a dele

committee, the donation would be subject 

contribution limits. The monetary value of 

list could not exceed the donor's per elec

contribution limit for that delegate commit

Commissioner Scott E. Thomas filed a concur

opinion. (Date issued: March 7, 1988; Lengt

pages, including concurring opinion)

AO 1988-4: Affiliation of PACs Resulting

From Corporate Merger

Although the Borg-Warner Corporation (BW) is 

a direct SUbsidiary of Merrill Lynch Corpora

(ML), the two corporations nevertheless have 

affiliated relationship by virtue of the control 

exercises over BW. Thus, MLPAC and BWP

the separate segregated funds of the two corp

tions, are considered affiliated political com

tees, subject to a single monetary limit on co

butions they both receive and make. 2 U.

§44Ia(a}(5}.

Background

ML acquired the entire equity interest in 

through the Borg-Warner· Holdings Corpora

(the Holdings Corporation), a corporation es

lished by ML Capital Partners, Inc. (MLCP). 

established MLCP to initiate leveraged buyou

publicly owned companies and to manage inv

ments of acquired cornpanies.)

An ML SUbsidiary managed by ML CP, 

Entities, supplied the capital for the buyou

BW. A wholly owned subsidiary of the Hold

Corporation, AV Acquiring Corporation, actu

signed the merger agreement with BW.

Affiliation Betweeen MLPAC and BWPAC

Since BW did not become a direct subsid

of ML as a result of their merger, the corp

tions' separate segregated funds are not autom
May 1988 FEDERAL ELECTION COMMISSION

cally affiliated. 2 U.S.C. §44La(a)(5); 11 CFR

110.3(a)( l)(ii)(A). Under the election law, however, two PACs are considered affiliated if their

corporate sponsors are affiliated, that is, if one

corporation exercises direction or control over

the other's operations. To help determine such

affiliation, FEC regulations provide the following

indicia:

o Ownership of a controlling interest in voting

shares or securities;

a Provisions (of by-laws or constitutions) which

give one entity the authority, power or ability

to direct another entity; and

o The authority, power or ability to hire, appoint,

discipline, discharge, demote, remove or otherwise influence the decision of the officers of an

entity. II CFR IIO.3(a)(l)(iii)(A), (B) and (C).

In this case, the post-merger relationship

between ML and BW satisfies the indicia of affiliation. Although ML's acquisitions corporation,

ML CP, owns no controlling interest in BW,* MLCP: 1) manages Holdings Corporation's equity

interest in BW and 2) has a direct relationship

with six directors initially appointed by Holdings

to BW's Board. These six directors hold executive

positions in MLCP or Merrill Lynch, Pierce, Fenner and Smith, Ine., MUs principal SUbsidiary.

Consequently, MLPAC and BWPAC, the respective PACs of ML and BW, are considered to be

affiliated political committees.

Commissioner Elliott filed a concurring opinion. (Date issued: March 17, 1988; Length: 5

pages, plus concurring opinion)

AO 1988-5: Presidential Matching Payments in

'88 Used to Pay '84 Debts

Hart '88 (the '88 campaign), Gary Hart's principal

campaign committee for his 1988 Presidential

primary campaign, may not use 1988 primary

matching funds to retire debts remaining from

Senator Hart's publicly funded 184 campaign (the

'84 campaign). Payments by the '88 campaign to

liquidate the '84 campaign's debts would be considered nonqualified campaign expenses. Consequently, if the '88 campaign used its matching

funds to retire the debts of Hart '84, the '88

campaign would be required to repay the funds to

the U.S. Treasury. 26 U.S.C. §9038(b)(2). Depending on the circumstances, the '88 campaign

could also be SUbject to a civil or criminal penalty

for violation of the public funding statutes governing unlawful use of public funds. 2 U.S.C.

§437g and 26 U.S.C. §9042(b).

Further, any claim by the '88 campaign for

matching funds to liquidate its own debts or to

... MLCP owns the right to vote a controlling

interest in BW shares through AlL Entities.

However, this right is constrained by fiduciary

obligations to vote shares on behalf of others.

5

Volume 14, Number 

pay for winding down costs could be affected 

the inclusion of any nonqualified campaign e

penses on its statement of net outstanding cam

paign obligations. 11 CPR 9034.I(b). (Since Ga

Hart has withdrawn from the 1988 President

race, he may now receive primary matching pa

ments only for the purpose of liquidating qualifi

campaign expenses of his '88 campaign and f

winding down his campaign.*)

The '88 campaign may, however, treat i

cash balance as "excess campaign funds" to 

used for the '84 campaign's debt retirement, b

only after the 188 campaign has been audited 

the FEC and has:

o Made any required repayments of public fund

and

o Paid any possible penalties required by t

statute.

The Commission noted that the provision gover

ing excess campaign funds (2 U.S.C. S439a) do

not supersede the public funding statutues gover

ing the use of a cash balance by a publicly fund

campaign.

1984 Debt Retirement Not

Qualified Campaign Expenses

Under the Matching Payment Account, cam

paigns may use primary matching funds only 

pay for qualified campaign expenses. 26 U.S.C

§9042(b); 11 CPR 9034.4(a)( 1). The election la

defines qualified expenses to include "an

purchase, payment, loan, advance or gift 

money, or anything of value, incurred by 

Presidential primary campaign in connection wi

the candidate's nomination effort. 26 U.S.C

S9032(9)(A). FEC regulations specify that, 

qualify for this definition, a campaign expen

(i.e., a purchase, payment or loan) must b

incurred between the date an individual becom

a Presidential primary candidate and the last da

of the candidate's eligibility for public funds. 

U.S.C. §§9032(6) and (9); 11 CPR 9032.9(a)(1) an

(2). Furthermore, FEC determinations regardin

a primary candidate's eligiblity and entitlement 

public funds, as well as the candidate's obligatio

to repay funds, are based on one candidacy with

a single Presidential cycle. 26 U.S.C. §§9033(

and (c), 9034(a), 9036(8), 9037(b) and 9038(b).

Consequently, payments by the '88 campaig

to retire debts of the '84. campaign would not b

qualified campaign expenses of the '88 campaig

The Commission concluded that, if the '88 cam

paign used '88 matching funds for nonqualifie

purposes, in contravention of this opinion, 

continue

*Note that, subject to certain requirement

ineligible candidates may continue to recei

primary matching funds to retire outstandin

campaign "debts incurred before the last day 

eHgiblity and to pay for costs of winding dow

their campaigns. See 11 CFR 9034.5.
May 1988 FEDERAL ELECTION COMMISSION

would risk a knowing and willful violation of the

election law. 2 U.S.C. S437g(a)(5)(C). (Date issued: March 28t 1988; Length: 4 pages)

AO 1988-7: Candidate's Use of Cash Gifts for

Campaign Expenditures

Mr. Peter M. Bakal is an undeclared 1988 candidate for a House seat from New York. Annual

cash gifts of $20,000, which Mr. Bakal received

from his parents between 1985 and 1987, and

which he anticipates receiving again in 1988. are

considered his personal funds. Accordingly, if Mr.

Bakal donates these cash gifts to his House campaign, the gifts will not be s~bje~t to the el~cti~n

law's dollar limits on contrtbutions, even If hIS

parents give the 1988 cash gift to him after he

declares his candidacy.

The election law places monetary limits on

contributions to candidates. 2 U.S.C. S44la(a)(l)-

(A). However, FEC regulations permit a candidate to use unlimited personal funds for campaign

expenditures. 11 CFR 110.10(a). The regulations

define personal funds to include personal gifts

which a candidate customarily received before

becoming a candidate. 11 CFR 110.1O(a)(2).

Based on Mr. Bakal's statements and the fact that

he was not a federal candidate in 1984 and 1986,

the Commission concluded that the gifts received

between 1985 and 1987 were of a personal nature,

unrelated to any campaign for federal office.

Therefore, if Mr. Bakal receives another such

cash gift in 1988 under similar circumstances, he

may consider the funds a customary gift and

donate them to his campaign as personal funds.

Commissioners Lee Ann Elliott and Joan D.

Aikens filed a joint concurring opinion (Date

issued: March 29. 1988; Length: 4 pages, including

concurring opinion)

AO 1988-8: PAC Contributions by

Estate Trust

The National Office Machine Dealers Association

Political Action Committee (NOMDA), a

multicandidate committee registered with the

FEC, may accept proceeds from an estate trust in

annual increments of up to $5,000. The trust was

established to receive the assets of Mr. Wilson's

estate and insurance proceeds payable on his

death. Since Mr. Nelson's estate trust is

considered his alter ego for purposes of making

contributions to NOMDA. the trust is subject to

the same contribution limits and prohibitions that

Mr. Nelson would have been. This means that Mr.

Nelson's estate trust may directly contribute no

more than $5,000 of the proceeds to NOMDA each

year. 2 U.S.C. §§43l(1l) and 44 la(a)(l)(C).

Alternatively, NOMDA may handle the trust

proceeds according to procedures approved by the

Commission in advisory opinions 1983-13 and

6

Volume 14, Num

1986-24.* Under these procedures, NOMDA 

establish a special escrow account to receiv

entire bequest from the trust and may distr

the bequest to its general account in a

increments of no more than $5.000, unti

escrow account balance is reduced to 

Commissioners Scott E. Thomas and Thom

J osefiak filed dissenting opinions. (Date is

March 30, 1988; Length: 6 pages, incl

dissenting opinions)

COURT VACATES CREDITORS' CLAIMS

AGAINST 1984 HART CAMPAIGN

On March 10, 1988, the U.S. District 

for the District of Columbia granted the F

motion to vacate two writs of attachment fil

creditors of Americans for Hart, Inc•• Gary H

1984 publicly funded Presidential campaign. 

court also dismissed the FEC as a party to 

cases and remanded the cases to the Sup

Court for the District of Columbia. (Xerox 

v. Americans with Hart, Inc. and Harry Kr

Americans with Hart. Ine.j Civil Action Nos

0086 and 88-211, respectively) The court ha

yet acted on the FEC's motion to dismiss a 

writ of attachment filed by Semper-M

Associates, tnc., another creditor of the 

Hart campaign.

Background: Creditors' Efforts

to Attach MatChing Funds

The Commission declared Gary Hart el

to receive matching funds on December 28, 

13 days after his decision to reenter the 

campaign for the Presidency. .

On December 28, 1987, and again on Ja

12 1988 the Commission was served with 

of' attachment for assets belonging to the 

Hart campaign. The General Counsel 

motions with the district court which soug

have the writs vacated. Because the cre

who served the writs were in litigation wit

1984 Hart campaign, the Comission 

authorized the General Counsel to send l

advising the creditors that no federal st

authorized diversion of matching funds by 

government to any other party. Moreover

letters said that any attempt to execu

*AOs 1983-13 and 1986-24 are summariz

the November 1983 and October 1986 issu

the Record respectively.
May 1988 FEDERAL ELECTION COMMISSION

creditor's jucgrnent against funds of the United

States government would be barred by sovereign

immunity.

In addition, the letters noted that the Commission did not possess any assets which belonged

to the 1984 Hart campaign. The Commission had

certified that Hart was eligible to receive matching funds for his 1988 Presidential nomination

campaign. The 1988 campaign was called Friends

of Gary Hart-198B, Inc., a separate corporate

entity from Americans with Hart.

In conclusion, the letters explained that the

Commission did not hold any matching payments

that the candidate might be entitled to; nor did it

make the actual payment of primary matching

funds. Under the Primary Matching Payment Act,

the Commission determines the eligibility of candidates to receive matching funds and certifies

the amount the candidate is to receive to the

Secretary of the Treasury. The Secretary-not the

Commission--is responsible for making the payment.

COMMON CAUSE v. FEC (Third Suit)

On March 15, 198B, the U.S. Court of Appeals

for the District of Columbia Circuit reversed a

decision by the district court in a suit filed by

Common Cause, which had challenged the FEC's

dismissal of the organization's administrative

complaint. (Common Cause v. FEC; Civil Action

No. 87-5036) The appeals court found "entirely

per rnissible'' the interpretation of 2 U.S.C. §432-

(e)(4) that the FEC had applied to allegations

contained in Common Cause's complaint. The

appeals court also vacated the district court's

order remanding the case to the Commission for a

statement of reasons concerning the FEe's tievote dismissal of an allegation in the complaint

and instructed the district court to enter an order

dismissing the suit.

District Court's Ruling

Common Cause had challenged the FECrs

dismissal of allegations in its administrative complaint based on the agency's interpretation of 2

U.S.C. §432(e)(4), a provision that bars a political

committee that is not an authorized candidate

committee from using a candidate's name in the

name of the committee. Common Cause maintained that, during the 1980 Presidential elections, five political committees not authorized by

Ronald Reagan had violated this provision by

using the candidate's name in the names of fundraising and expenditure projects the committees

had sponsored.

In its ruling on the case, the district court

adopted Common Cause's interpretation of the

provision, that is, that any "name" used by a

political committee for public identification constituted a "name" within the meaning of the

7

Volume 14, Nummr 

election law. Accordingly, the court found th

the FEC's dismissal of allegations in the co

plaint pertaining to violations of §432(e)(4) we

contrary to law. The court ordered the FEC 

conform with its ruling within 30 days.

The district court also ruled that the FEG

deadlock-vote dismissal of another allegation 

Common Cause's complaint concerning coor

nated expenditures by two of the political co

mittees was contrary to law and ordered the FE

to provide a statement of reasons for this actio

also within 30 days of the court's ruling.* (For 

detailed summary of the district cour-t's opinio

see page 7 of the February 1987 Record.) Up

the FEC's request, the district court stayed t

effect of its decision pending appeal by t

agency.

Appeals Court Ruling

Committee Names. In reversing the distr

court's ruling, a three-judge panel of the appe

court affirmed the FEC's consistent interpre

tion of S432(e)(4), that is, that a political comm

tee's "name" refers only to the official or form

name under which the committee must regist

The court held that the "sparse legislative histo

of §432(e)(4) shows nothing definitive to underc

the Commission's consistent interpretation of t

provision as applying only to the official name 

a political committee." The court therefore co

cluded that, while Common Cause's interpretati

of the provision was "not totally implausible," 

did not "preclude the Commission's quite plausi

alternative. There is, in short, a genuine ambig

ty in §432(e)(4)'s text."

Further, considering the structure of the s

tute, the appeals court agreed with the FE

argument that "name" should be similarly defin

in §§432(c)( 4) and 433(t»(1). (Section 433(b)

requires unauthorized committees to register o

official name with the FEC.) The court held th

these two provisions, along with the Act's d

claimer provision (§441d(a», allowed the Comm

sion lito establish a coherent means by wh

readers and potential contributors can find o

the identity and status of those who are soliciti

them."

In dissenting from the majority decision 

the "name" issue, Judge Ruth B. Ginsburg argu

that "Congress enacted §432(e)(4) to avoid pub

confusion and to increase public awareness of t

sources of campaign messages....Sensibly and p

posively construed, the S432(e)(4) prohibition co

ers not only the formal, registered name of 

continu

otThe district court dismissed a third cla

concerning coordination of the unauthoriz

committees' expenditures with the offic

Reagan campaign. See p, 7 of the February 19

Record for more details.
May 1988 FEDERAL ELECTION COMMISSION

political committee, but also the name the committee actually uses to identify itself in communications with the public purporting to

solicit contributions for, or on behalf of, a candidate."

Deadlock Vote. Finally, the appeals court

reversed the district court's ruling that the FEC's

deadlock vote dismissal of other allegations against two political committees must be remanded for a statement of reasons. The appeals

court concluded that its recent ruling in Democratic Con ressional Cam ai n Com ittee

(DCCC) v. FEe 831 F.2d 1131)* was applicable

to the circumstances of Common Cause's case. In

DCCC v. FEC. the court found that the FEC's

dismissal of an administrative complaint as the

result of a deadlock vote was subject to judicial

review. Consequently, the court could require the

FEC to supply a statement of reasons for such

dismissals.

Nevertheless, the court declined to "apply

the precedent retroactively to this case, which

arose before our DCee decision••••To do so, in

this case at least, would be an exercise in futility

and a waste of the Commission's resources." The

court added, however, that it would "enforce the

DCCC rule with respect to all Commission orders

of dismissal based on deadlock votes that are contrary to General Counsel recommendations issued

subsequent to our decision in that case. Tt

·For a summary of the appeals court's decision

in the suit, see p, 5 of the November 1987 Record.

FEDERAL ELECTION COMMISSION

999 E Street,NW

Washington, D.C. 20463

Official Business

Volume 14, NumO

FEe V. DOMINELLI

On March 16, 1988, the U.S. District C

for the Southern District of California gra

the FEC's motion for a default judgment ag

J. David Dominelli. The FEC had filed its 

against Mr. Dominelli with the district cou

March 1983. (FEC v. J. David Dominelli; 

Action No. 83-0595-GT( M)) After the dis

court granted Mr. Dominelli's motion* to dis

the case in November 1984, the FEC appealed 

court's decision to the U.S. Court of Appeal

the Ninth Circuit. (Civil Action No. 85-5525

January 1987. the appeals court reversed 

district court's decision and remanded the ca

the district court.

Since Mr. Dominelli never responded to 

FEG's complaint on remand, the agency asked 

district court to issue a default judgment ag

Mr. Dominelli, In response to the FEC's req

the district court issued a judgment in whic

decreed that:

o Mr. Dominelli violated section 434(c) of 

election law by failing to report $8,47

independent expenditures he incurred for a

placed in a November 1980 issue of The C

go Tribune. The ad had expressly advocated 

defeat of former President Jimmy Carter i

1980 reelection bid.

o Mr. Dorninelli report these expenditures w

30 days of the entry of the court's order 

default judgment. 

o Mr. Dominelli pay an $8,471 civil penalty 

the violation.

~The district court's decision in the ca

summarized on p. 6 of the January 1985 Ke

and the appeals court's decision, on p. 5 o

March 1987 Record. Note that, since FE

Furgatch presented facts nearly identical to t

addressed in the Dominelli case, the cases. 

reviewed together in both the district and app

courts.

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