September 1993

Tab e of Conten

Public Funding

CongressIncreases Tax Checkoff

to $3

Regulations

New Multicandidate Rules and

FormSent 10 Congress

8 FEC Seeks Comments on Public

Funding Regulations for Presidential NominatingConventions

3 Federal Register

Conferences

3 FEC to Hold PAC Conference

in Washington. DC. December 13

and 14

Court Cases

3 laRouche v. rEC

Publications

4 FEC Releases Report on Presidential Public Funding

5 1992 Election Results Released

I I Order Form for The Presidential

Public Funding Program

Repor ts

6 Filing with the State

6 ew Indiana State Filing Office

10 Michigan Special Election

6 Advisor}' Opinions

Compliance

9 MUR 3385: Presidential Campaign

Overbills Media forTravel

9 MURs Released to the Public

10 Index

Statistics

II Number of PACs Drops by 170

Federal Election Commission

Public Funding

Congress Increases Tax

Checkoff to $3

An increase in the taxpayer

checkoff from $1 to $3 will avert an

estimated $100 million public funding

shortage for the 1996 Presidential

elections. according to FEC projections.

The increase was included in the

Omnibus Budget Reconciliation Act

signed by President Clinton on

August 10. The $3 checkoff will

mean increased deposits to the

Presidential Election Campaign Fund

starting in 1994, when taxpayers file

their 1993 returns.

The tax checkoff-the sole source

of fund ing for the Presidential public

funding program-has never before

been increased. The new legislation.

in effect, adjusts the checkoff amount

for inflation since 1973. when the

checkoff was first implemented.

By contrast, public fu nding grants.

which are indexed to inflation. have

increased each ejection cycle since the

first publicly funded election in 1976.

This has caused a drain on the

Presidential Election Campaign Fund,

where the taxpayer dollars are

deposited. The Fund has also been

affected by a gradual decline in

taxpayer participation in the checkoff

program.

(continued on page 2)

Volume 19. Num

Regulations

New Multicandidate Ru le

and Form Sent to Congre

The Commission recently ap

proved new regulations that wil

it easier to identify committees 

have qualifiedas rnulticandidat

mittees. (Multicandidate comm

may give up to $5,000 to a cand

per election;I other committees 

subject to a $1,000 per election 

The regulations will not beco

effective until the legislative rev

period (30 legislative days) has 

pired. The Commission will the

announce the effective date.

The new ru1es and their expl

tion andjustification were publ

in the Federal Register on Augu

(58 FR42 172).

Initi al Disclosure of M ultican

Status on New Form 1M

Under II CFR 102.2(a)(3). a

newly qualified multicandidate 

mittee will have to file a new fo

FEC Form IM, before it contrib

(continued on 

I Note that the conditionsfor qualif

as a multicandidate committee rem

same : Registration for at least 6 m

contributionsfrom more than 50 p

and contributions to at least 5 can

[orfederal office. (The last require

do es 1101 apply 10 state party comm
Ftdt rofEltC/;nnCnmmiuinn RECORD _

Public Funding (By law.jbe convention commit- Regulations

(CtHlfinueJjmm page JJ tees receive first priority for public

(corujnut djmnrragt JJ

As a result. Presidential public

funding payments. then the general

over SI.OCO. per elec tion. to a cand

election nominees and. lastly. the

funds almost ran short in 1992. and primary candidares.) date. The committee will have to

the Commission predicted a near The agency's projections are based disclose the following information 

collapse of (he program in 1996 on three assumptions:

the form:

unless Congress took action, «lrfkuian: a gradual rise from 3.4 • The date it registered;

FEC Chairman Scott E.Thomas

percent in 1993 to 5 percent in 1998 • The date it received a contributio

said that the new legislation should from its 51st contributor;

ensure funding for 1996 and at least and each year thereafter; • A list of five federal candidates it

one additional Presidential election. •Checkcffpanicipation: a continued hassupported; 1 and

based on FEC projections. decline but an eventual stabilized

<The dale it achieved multicandid

The agency estimates that pay- level of taxpayer participation; and

commiuee status. rnents for the 1996 Democratic and • Matching/ wid demand: the average

Republican nomination conventions of payments made in 1988 (an Tbe form abo makes provision 

will be$25.5 million. General unusually expensive campaign new comrmuees that automatically

election grants are projected at $128 cycle) and 1992 (an unusually qualify as multicandidate committ

million. leaving $22 million available inexpensive campaign cycle). on the date of registration by virtu

for primal)' matching fund payments adjusted for inflation. their affiliation with an existing m

in January 1996, The rate of Inflation is especially candidate comnuuee.

critical in determining how long the Continual Reporting or :\lultican

$3 tax checkoff will allow the Fund to date Status on Amended Form J 

remain solvent. For example. an In another reporting change. the inflation rate of 4 percent or less in multicandidatecheckoff box on Fo

Federal Election Coenrmssion future yean; would likely permit full 3X (line J) will be amended. Com

m E Stree t, N\\.' funding of Presidential elections tees that have qualified as multican

Wa.<;hinglon. IX:: 2~J through the year 200t Ultimately. date committees " III be required 1

HOOI424-9530

however. public funding payouts. check the box on every report they

2021219-3420 indexed to inflation as they are. will file. Currently. committees check 

2fJ2I2 19-J)3b (TO O) outpace deposits to the Fund. causing box only once. in the first report fi

a shortfall. after achieving mutncandidare stat

With respect to taxpayer participa- T he amended Form JX will allo

Scou F.. Thomas,Chairman lion. (he Budget Reconciliation Act candidates and other interested pa

Trevor Pc ue r, Vice Chairman will initially shrink the pool or Joan D. A. ikens. Commissioner possible participants by raising the

to deter mine a committee's SL.1tuS 

Lee Ann Ellioll. Commissioner income threshold at which families glance,

n anny 1_ McDonald. incur tall liability. It is unknown :\lullicandidate Committee Noti

Commissioner

Joho w arren :\1c(;arrJ. whether taxpayer participation will be to Candida tes

Commissioner affected by the increased value of the Under a second new provision. 

Waller J. Stewart. Secretary checkoff. CFR 110.2(a)(2). when making co

of the Senate. F... Officio The FEC press release of August tributions to candidate committees

Commi....ioncr 20 provides a year-by-year estimate mutricandidate committees will be

Donnatd K. AnMrson, Oed of the Presidential l-und balance required to provide written notice 

of the House of Represeraanvcs. through rbe year 2008. To order a free their multicandidate status to the r

Ex Officio Commissioner copy. call 800/424-9530 (ask for cipienr. The explanation and jusu

John C. Surina. StaffDirector Public Records) or 2fPJ2 19-4140. tion suggests that committees disp

Lawrence M. Noble.General For a more comprehensive discus- the information on their checks or

Counsel sion of the tax checkoff and Presiden- letterhead. The information may a

tial public funding, consult the FEe be included in the body of an accc

Published by the Information report released in April 1993: The panying letter or other communiDivision Presidennol Puhlic Funding Program cation. +

I..olli.;eU. wldes, Director (see article on page 4). + (Regulatior/$ continued tm pa

Stephanie fi tzgerald. Editor

Blake Lange. GraphicsAdvisor

zNotapplicable to statepartycommit

2
Seplemh.!!"1993

Federal Register

Copies of Federal Register notices

me available from the Public

Records Office.

1993-17

II CFR Parts 102 and 110: Multicandidate Political Committees;

Final Rule: Trunsrnittal to Congress(58 FR42 172, August 6,

(993)

1993-18

II CFR Pails 107, 11 4 and 9008:

Presidential Election Campaign

Fund and Federal Financing of

Presidential Nominating Conventions; Notice of Propo .ed Rulemaking; (58 FR43046. August 12.

(993)

Conferences

FEC to Hold PAC Conference

in Washington, DC

December 13 and 14

On December 13 and 14, a Monday and Tuesday. the FEC will hold a

11;2 day conference in Washington,

DC, for corporations, trade associations. labor organizations and their

PACs. (The Record previously announced that the conference would

take place in November, but the date

had 10 be changed due to scheduling

difficulties.)

The conference will be held at the

Washington Hilton and Towers Conference Center, 19 19 Connecticut

i\venue, NW, Washington, DC 20009

(202/483-3000).To receive the group

rate of $120 per night for a single

room, make your reservation by 0 -

vember 21and notify the hotel that

you will be attending the FECconference.

For more information, or to place

your name on the mailing list for

registration materials. call the FEC:

800/424-9530 or 202/219-3420. +

Court Cases

LaRouche v, FEC (92-1100

The Court of Appealsfor the District of Columbia Circuit I recently

directed the Commission to certify

matching funds to Lyndon LaRouche.

Jr., for his 1992 Presidential primary

campaign. The court held that the

Commission did not have statutory

authority to deny matching funds

based on its conviction that Mr.

LaRouche would fail to keep his

promise to comply with the law.

In February 1992. the agency deterrn ined that Mr. Lakouche's written

agreement and certification to comply

with the law-a requirement for receiving matching funds-were not

made in good faith, based on his long

record of noncompliance with the

federal campaign law and his criminal

indictments and convictions for fraud.

The Commission therefore found he

was not eligible for matchingfunds.

Mr. LaRouche immediately challenged the decision in a suit filed with

the D.C. Circuit.'

On July 2, 1993, the court reversed

the FEC's decision, holding that the

statute did not grant the agency the

authority to evaluate the reliability of

a candidate agreement.

Mr. LaRouche had argued that the

law's enforcement provisions, which

grant the FEC the authority to take

action with respect to past or ongoing

violations of the law, implied a Congressional intent 10 withhold FEC

authority to assess a candidate's future likelihood of violating the law.

The court agreed,observing that the

votersshould be the ones to judge a

candidate's integrity.

The court further noted that Congressintended public funds to be

I The three-judgepanel consisted of

Judges Wold. Buckley and Williams.

zCommission actions underthe Presidenrial publicfunding law are directly

reviewable by this court. 2 USc. §9041 .

FederalElectionCall/missionRE

dispensed on a nondiscriminato

basis: "Any inquiry into the bon

fides of candidates' promises w

lake the Commission into highl

jective territory that would impe

aSSUraI1Ce of even-handed treatm

The FEC had argued that its 

tion was supported by the court

decision in Committee 10 Elect

Lyndon Lakouche v. Federal E

Commission (ClEL),J where th

allowed the agency to consult r

filed by the candidate's past cam

when deciding whether to accep

current thre hold submission fo

matching funds. The court, how

said that CTEL stressed the nee

apply objective standards when 

ating a matching fund submissi

quite different from the use of s

tive criteria "to evaluate a cand

character."

The court also rejected the F

claim that it position was uphe

anothersuit, In re Carter-Mond

Reelection Committee,Inc:' "W

nothing in Carter-Mondale to u

mine CTEL's general view that 

absence of an explicit authoriza

by Congress the Commission m

deny funds on the basis of its v

a candidate's ubjective intent.

The majority opinion was fil

Judge Williams; an opinion con

ring in pan and dissenting in pa

filed by Judge WaldoShe said t

Commission had exceeded itss

tory authority only in its consid

of Mr. LaRouche's criminal co

tions (mail fraud and conspirin

defraud the IRS). since they we

directly related to his campaign

ever,she also said: "I do not be

that the statute requires that the 

in determining a candidate's el

ity for public monies, disregard 

dence in its own files that indic

that a candidate may well inten

defraud the Commission-and 

American taxpayer." +

)613 F. 2d834 (D.C.Cir.1979).

4642 F. 2d 538 (D.C.Cir. 1980).
Federal ElectionCommissionRECORD

--- --

Publications I

FEe Releases Report

on Presidential Public Funding

Public financing of Presidential

elections was intended to reduce the

influence of wealthy contributors,

eliminate financial barriers that might

discourage potential candidates, and

increase communication between

candidates and the electorate. This

program has been in place since 1974.

but its merits and efficacy remain

topics of debate. Many of the

arguments for and against public

funding are discussed in a recently

released report, The Presidential

Public Funding Program, a comprehensive study covering the program's

history, its achievements and problems, and the long-standing concern

Genera l Election

Compliance Account Receipts

Millions of Dollars

6

5

4

3

about a funding shortfall for the L996

Presidential elections. (The report was

published before the $3 checkoff was

legislated;see article on page I.)

The study also reports on the

Commission's role in administering

the program and its suggestions for

legislative changes.

The report addresses other policy

matters, among them:

• The use of soft money and private

money in the Presidential election

period;

• The requirements that candidates

must meet to qualify for public

funding;

• The level of the spending ceilings

for primary candidates; and

• The audit and enforcement process.

A wealth of statistical information

is highlighted in over 20 graphs and

_1980

1984

1988

1992

September 

tables,some of which compare da

over the five election cycles durin

which public funding has been in

place. As a sample of those offere

the report, two graphs are reprodu

here.

The appendices to the report

provide additional material, includ

• A chronology highlighting signif

cant dates in the administration o

the public funding program;

• A series of tables listing the amo

of public funds each candidate an

party committee has received,

starting with the first publicly

funded Presidential election in 19

and

• A short history of the federal

campaign finance law.

To order a free copy of the repo

use the form on page I 1. +

2

1

o

Demo crat Repub lican

Explanation

This graph tracks compliance fund receipts forthe Democratic and Republican nominees over the last four election cycles. A

compliance fund is an account used exclusively to pay the legal and accountingcostsof complying with the campaign fin ance law. 

funded through private contributions. (A major party nominee may not, however, accept private contributions to the campaign acco

which is funded entirely with the public funding grant.)

Asshown in the graph, the victoriouscandidate in each instancereceived more compliance fu nd donations than his opponent.

Overall, the 1988 and 1992 nominees raised more than twice as much compliance money astheir 1980 and 1984 counterparts.

4
September 1993__ Federal Election Commission R

600 1- - - - - - - - ----------- -1

1992 Election Results Rel

According to the recently rel

Federal Elections 92, over 104

million people-55 percent of t

voting age population ~as th

ballots for a Presidential candid

ejection day 1992. President Cl

won 43 percent of the popular v

then-President Bush received 3

percent, and independent candi

Ross Perot, almost 19 percent.

Andre Marrou, the Libertari

Party nominee, was the fourth-h

vote getter, collecting almost 30

votes (.28 percent of total votes

I ineteen other Presidential can

were on the general election ba

at least one state. Among them 

Lenora Fulani, the New Allianc

Party nominee, who received 7

votes (,07 percent). John Hagel

I atural Law Party nominee, w

39.163 votes (.04 percent).

Federal Elections / 992 tabu

the election returns for the .S

Presidential, Senatorial and Con

sional elections held November 

1992. The publication also lists 

results for the 1992 Presidentia

primaries 2 and for the special e

tions held November 3 (Califor

Senate, New York 8th district a

North Carolina 1st district).

f or each race, the publicatio

the candidates on the ballot and 

write-in candidates, their party

affIiation, and the percentage a

number of votes they received. 

figures were provided by state

election officials and reflect up

through June 24, 1993.

Federal Elections 1992 also 

the state-by-state voting totals f

Presidential primary and genera

elections.

1990 1992

Congress iona l Spending

Preside ntial Spending

1978 1980 1982 1984 1986 1988

oL...--l-_

300 -----,F

1.00

500 --- --

200

700 ,- - - -

800 .-- -

400 1-- - - - -- - - -

Comparison of Presidential

and Congressional Spending

Millions of Dollars

Explanation

This graph shows(he growth in Presidential and Congressional spending overseveral

election cycles.

The spending limits imp osed on publicly funded Presidential campaigns seem to

have kept spending under control, at least when compared wi th Congressional . pending,

whi ch is not subjec t to limi ts. For example, Congressional spending increased 248

percent from 1978 to 1992. while Presidenti al spendi ng inc reased 174 percent from

1976 to 1992.

(continued 0 11 

I According to the Census Bureau 

malefor NO''ember / 992. the natio

voting age population was / 89,04

1 The Ilew publication superse des 

Presidential Primary Election Res

issued August / 992.
Federal ElectionCommis.sion RECORD

Publications

[continuedfrom paKe 5)

Additional information is shown in

maps of the United States. For

example. a seriesof maps shows the

percentageof popular votes won by

the top three Presidential candidates

in each state as well as the electoral

votes won by candidatesClinton and

Bush.

The new publication is the six th in

the series of official results: the first

volume covered the 1982 Ilouse and

Senate elections.

A limited number of copies are

available free of charge from the

FEC"s Public Records Office. Call

800/424·9530 (ask for Public

Records) or 2021219-4140. •

Reports

Filing with the State

In addition to filing with the

appropriate federal office. treasurers

of political committees must simultaneously file copies of reports with the

Secretary of State's office or other

designated state office.

A list of state fili ng offices is

available from the Commission. Call

800/424·9530 or 202121 9·3420.

State filing requirements are

described below.

New Indiana State

Filing Office

Stalling October I. political

committees required to file copies

of the'ir reports in Indiana willfile

with the'State Election Board

rutherthan wuh lhe Secret ary of

Stare's offke. The new at.I d~s and

phone nurnh:r are:

India.,.. Stale Election Boar d

302 west WashinglonSired.

Room E03 2

Int.lia napoli... 1:\ 462lM

3111232-3939

•

House and Sena te Candidate

Committees

Principal campaign committees of

I louse and Senate candidates file a

copy of each report and statement

with the state in which the candidate

seeks (or sought) election.' 2 V.S.c.

§439(aX2X B).

If a campaign includes more than

one authorized committee. the

principal campaign committee files.

with its own report. the reports

prepared by the other authorized

committees as well as a consolidated

report(FEC Form 3Z). 11 CFR

104.3{f). (The consolidated reporting

requirement applies both to federal

and state filing.)

PACs and Part}' Co mmittees

PACs and party committees

making contributions or expenditures

in connection with House and Senate

campaigns must file copies of reports

and statements with the state in which

the candidate seeks (or sought)

election.' The committee is required

to file only that portion of the report

applicable to the candidate in that

stare (e.g.• the Summary Page and the

schedule showing the contribution or

expenditure). §439(a)(2X B). +

rPresidentiolprincipal campaign

committeesfilt' copies ofrepons and

sunemems with the SIO/I'S in which me

committee mode espeeduures Juring the

rt'portjn.~ period 1/ CFR 108.2.

! PACs and parly committees making

contributionsor espendiuoes in conneclion Kith Presidemiat candidatesfill' with

tilestates in K'hich Iht' Presidential

comm iuee and Ihl' donor conmittee have

their headquarters, II CFR 108.4.

_~ (l' /

Advisory

Opinions

,\ 0 199.1·7

Name ofCorporate PAC

The Pacific Power & Light Com

pany Employee PAC. a separate

segregated fund. must update its n

to include the current name of its

connected organization. 2 U.S.c.

§432(eX5); II CFR 102.14(c). Pac

Power & Light Co. wasthe origin

name of the corporation. but its off

cial name is now PacifiCorp.nne

proposed new name. "PacifiCorp

Federal Political Action Cornmirte

would be ccceptable.)

As the connected organization.

PacifiCorp may make administrati

changes as it sees fit (i.e., a change 

treasurer. assistant treasurer. custo

dian of records. bylaws and Board 

Directors).' Date Issued: July 22.

1993; Length; 3 pages. +

AO 199.1·8

Preemption of State Law

Prohlbltlng Contributions

by Incorporated Committee

The Federal Election Campaign

Act supersedes Tennessee State la

with respect to the state law's proh

tion on contributions to federal

candidates and transfers of excess

campaign funds 10 party committe

by a federal candidate's comrrurtee

that has incorporated for liability

purposes. The Act does not. howe

supersede Tennessee law with res

to contributions to nonfederal cand

dates.

I A( hanKt' in tht> names ofa connecte

orgam zation and its PAC--<ls K·t'll as 

('1U1ngt> in committee treasurer.assist

trrasurrr and custodian ofrecords-......

No reponed on an amended Statemen

Orxani::al;on (Form J, or in a teoer.

1 USc. §4JJ(c): I I CFR I02.2(oK2
•

•

•

SFplcmber / 993

Congressman John 1. Duncan,Jr.

(TN, 2nd CD) proposed to transfer

excess campaign funds' from his old

committee to a new campaign

commi ttee, incorporated under

1J CFR 114.12(a). That provision

pe rmits a politica l committee [0

incorporate for liability purposes only

and nOI be treated as a corporation

subject to the Act's prohibitions. The

new committee would use the excess

funds to make contri butions 10 party

committees and candidates.

Tennessee law . however , prohibits

corporations doing business within

the slate from using their funds " for

the purposes of aiding in either the

election or defeat...orany candidate,"

federal or nonfederal. "or in any way

contributing 10 the campaign fund of

any political party." Tennessee Code

Annotated §2-19-132(a). Moreover,

Tennessee law treats political committees incorporated under section

11 4.1 2(a) the same as other corporations (with an exception for certain

contributions by national party

cc rnmit teesj. T.CA. §2· 19-132(b).

The Act states that its provisions

and the rules prescribed thereunder

"supersede and preempt any provision

of State law with respect to election to

Federal office." 2 U.S.C §453. The

legislative history explains that the

Act "occupiesthe field" in the area of

contributions and expenditures by

federal candidates and committees."

Therefore, with respect to contributions to federal candidates, federal law

clearly supersedes Tennessee law.

The Act and r"EC regulations also

provide that excess campaign funds

may be transferred to any national,

state or local committee and may be

used for "any other lawful purpose."

I The fun ds would qualIfy as excess

fJI Kn ft/ll d. assuming the Congressman had dele/m ined IIwllhe}' were ill

excess otony umaunt necessary 10 deji-ay

his campaig n espenduures. 11 CFR

I 13.1(e); see also AO 1990-2.

: See also 11 CFR 108.7, which reflects

the legislative history,

2 us.c §439a; II CFR l l3.2.

Because the federal provisions

explicitly permit the transfer of excess

funds to party committees, regardless

of whether they are federal committees under the Act, Tennessee law is

superseded in this respect as well.

Federal law does not, however,

preempt Tennessee law with respect

to contributions 10 nonfederal candidares. The excess fund provisions

pennitsuch contributions only if

otherwise lawful, and they would not

be lawful under the Tennessee Code.

The broad coverage of the Tennessee law could be read as prohibiting

the incorporated committee from

conducting campaign activity on

behalf of the Congressman, but

federal law would again take precedence.

Date Issued:July 22,1993;Length: 5

pages. +

AU 1993-\0

Use of Excess

Campaign Funds

Antonio J. Colorado, an unsuccessful 1992 candidate for Resident

Commissioner of Puerto Rico, has

proposed using his committee's

excess campaign funds for the three

activities listed below, all of which

are permissible because they do not

constitute personal use of excess

campaign funds and are not otherwise

unlawful. 2 U.S.c. §43Ya.

I. Mr. Colorado may use excess

campaign funds to conduct a public

opinion survey in preparation for his

1994 campaign for Governor of

Puerto Rico. Previous advisory

opinions have Slated that the use of

excess campaign funds for future

federal or nonfederal elections does

not constitute personal use. AOs

1986·5 and 1980·ll J.

2. Similarly, Mr. Colorado may

transfer the excess funds to a committee formed to support his election as

presidem of the Popular Democratic

Party. The above advisory opinions

suggest that this proposal would not

Federal Esemon Commiss iONRE

result in a personal or an unlaw

of excess campaign funds unde

§439a.1

3. Finally. he may transfer th

funds to a nonprofit corporation 

plans to form. (The corporation

which will campaign for the ret

of Puerto Rico' s Commonweal

status, will not be subject to U.S

law because its operations will 

restricted to Puerto Rico.) This

proposed use of excess funds is

permissible under the "any othe

lawful purpose" clause of §439

because it will not confer any fi

cial benefit on Mr. Colorado, w

asserted that he will not receive

compensation except for the rei

bursement of ordinary and nece

expenses. See AO 1986-39.

Any Puerto Rican law applic

to the proposed activities (such 

law governing the amount of th

transfers or their disclosure in t

recipient's reports) would not b

preempted by the Federal Elect

Campaign Act or FEC regulatio

See AOs 1986-39 and 1986-5.

Dare Issued:July 22, 1993;

Length: 5 pages. •

Advisory Opinion Reques

TIle requests for advisory op

(AORs) listed below are availab

review and comment in the FEC

Public Records Office.

AOR 1993·16

Sales force employees as sotici

executive/administrative person

(Blue Cross of California: Augu

1993; II pages) .

I M Ort'OWI, (J transfer ofexcess ca

f unds 10a committee organi ted 10

WI individuatto all "office in a po

org/il/izOIiol/" is nol considered a

persanol nse of excess cuml'a(lil/[

under the lntemal Revenue Code. 

26 §527(d) and (e)(1)-(2); see a/so 

Reg. 1.527-j(cJ(J J.
tI~ ra Elff/ion CommissionRECORD

Regulations

(conrinlledfrompage2)

FEC Seeks Comments

on Public Funding Regulations

for Presldentlat Nomina ting

Conventions

The Commission is seeking comments on proposed changes to the

regulations governing publicly funded

Presidential nominating conventions.

The revisions to 11ern. Part 9008

would address several issues that have

arisen during past election cycles and

would make the convention rules

more consistent with the requirements

for publicly funded candidates. The

rules would also be reorganized to

make them easier to follow.

The Notice of Proposed Rulemaking was published in the Federal Register on August 12 (58 FR43Q.16).

Comments must be in writing and are

due September 17. They should be

sent to Ms. Susan E. Propper. Assistant General Counsel. 999EStreet.

NW, w ashington. OC 20463. The

comments will be made available for

public review in the FEC's Public

Records Office.

Some of the major provisions of

the draft rules, and some of the questions raised for comment, arc highlighted below.

Co nvention Commluees

III-Kind Donationsfrom Husinesses. Among the changes proposed

m this area are the following:

• The rules would incorporate the

Commission' s decision in AD 1988-

25 (usc of GM cars) by allowing

businesses to provide free products

and services to convention committees if the donations conform to the

company's usual business practice.

• The proposed rules would require

committees to retain documentation

demonstrating that a vendor discount or donation was provided in

the ordinary course of business. The

agency asks for comments on

whether this requirement should be

restricted to donations and disco unts

above a certain value and wretber

certain categories of vendors should

be exempted.

• The rules would clarify the disnnclions between the different types of

businesses that are permitted to

make donations and discounts (""retail:' " local" and "local retail").

Disclosure.To provide more

timely disclosure of a convention

committee's stan -up activity. the

revised regulations would require a

committee to begin filing reports

earlier. Additionally, convention COIll -

mtnees would have 10 file a statement

of net outstanding convention expenses in October of the election year.

The Commission asks whether convenuon committees should also be

required to:

• Attach to their reports copies of their

contract." with the ho.')l committee

and the convention city: and

• Report the value of in-kind discounts and donations from vendors.

Legal and Accoun/ing Expenses.

The proposed rules would clarify that

payments made by the national party

committee for convention-related

legal and accounting expenses count

against the convention committee's

expenditure limit. Comments are

sought on whether the regulations

should exempt fromthe spending

limit expenses incurred solely to comply with the federal campaign law.

Penalties. There would be no

change to the current rule under which

funds used to pay FE.C-imposed civil

penalties arc subject to the prohibitions on contributions. The agency

ash whether the funds should be

subject to the contribution limits as

well.

Recorakeeping. Revised provisions

would describe the records thai convcntion committees would have to

provideduring the audit process.

Records submitted on computer dish

or other magnetic media would have

to conform to formatting standards.

Septemiwr I

Host Committees

and Ce nventlon Cities

Significant changes that would

affect host comminees and conven

tion cities are listed below.

- Tbe proposed rules would require

host committees to begin filing re

pons earlier.

• The rules would amend the repor

provisions so that reporting dead

lines and itemization thresholds f

host committees would parallel

those that apply to other political

committees.

• While continuing to allow host co

mittees to accept donations from

businesses as long as the donatio

was "proportionate to the comme

cinl return reasonably expected.v 

proposed rules would no longer

apply that standard 10 donations 1

the convention city. The Commis

sion welcomes suggestions on

whether the standard (vproportion

ale...expectedvlanguage) should 

further explained.

• TIle rules would permitconventi

cities to pay for nominating conv

tion expenses from municipal fun

thatsatisfied the conditions set fo

in ADs 1983-29 and 1982-27.

• Finally. the rules would require

convention cities to TCJXln inform

tion on convention expenses. The

Commission seeks comments on

whether cities should also be required to report the sources of th

donations they receive for conve

tion activity.

Impact or Civil Rights Ad

on Delegat e- Selection

Is the delegate selection proces

a federally funded nominating con

venuon subject 10 the Civil Rights 

of 1964, which prohibits discrimin

tion "on tbe ground of race, color. 

national origin...under any program 

activity receiving federal financial

assistance"? A federal district cou

recently ruled "yes" and ordered t

FEC to write regulations prohibiti

discrimination in the selection of
•

•

•

St'l'lcm/1(>,. /003 __

convention delegates.' The FEe appealed the decision 10 the D.c. Circuit

where the case is currently pending

(No. 92·52 14).

In the interim. the FEe welcomes

comments on what impact. if any. the

Civil Rights ACI has on federally

funded nominating conventions.

However. the possible promulgation

of regulations will await the COlin 's

decision. +

Compliance

,\ IUR 3385

Presidential Campaign

Overbills :\Ied ia for Travel

In MUR 3385. a publicly funded

Presidential campaign paid a $ 10.(0)

civil penalty for overcharging the

media$133,819 in travel costs. Under

the terms of the conciliation agreemern. the campaign also had to refund

the overpayment.

Indeter mi ning the travel cost for

an individual passenger, a publicly

funded campaign divides the total

cost of the transportation MId related

services by the number of individuals

TO whom the servicesare provided.

Thecommittee in MUR 3385

undercounted the number of passengers on a campaign airplane by failing

to include the Secret Service personnel on the flight.This resulted ill a

higher pro rata COSI and the $ 133.819

overcharge.

T~ Commission found that the

campaign failed to follow the prescribed method for calculating the

cost of media travelm vio lation of

II Cf R 9004.6. +

I Freedom Republicans Inc.. et al., v,

Federal Election Commission. 788F.

SIIPP. 600,60/ tooc. / 9921.

MURs Released 10 the Public

Listed below are FEC enforcement

cases (Matters UnderReviewor

MURs) recently released for public

review. The list is based on the FEC

press releases of July 26 and August 9

and 23, 1993. Files on closed MURs

are available for review in the Public

Records Office.

I\-I UR

Respondents: (a) Dukakis for

President. Robert A. Farmer. treasurer

(MA); (b) Dukakis/Bentsen Committee. Edward Plirer. treasurer (MA):

(c) David Walters (OK); (d) The

Walters Company (OK); (e) Friends

of David Walters(OK); (f) GSMl.

Inc. (OK)

Complainant: Clinton Kay. chairman. Oklahoma Republican Party

Subj ect: Advances; rent

Disposition: (a) $1 .250 civil penalty;

(b) $750 civil penally; (c) probable

cause 10 believe bu t rook no further

action (advances); no probable cause

(rent); (dHf) reason to believe but

rook no further action

M UR 3159

Respondents: (a) Nevada Democratic State Committee, Debbie

Johnson. treasurer; (b) Friends for

Miller, Michael W. Kern. treasurer

(N V); et al. (c)·(O

Complainant: Kenneth Sawyer,

chairman, Nevada Republican Party

Subject: In-kind corporate contributions

Disposition: (a) $1.550 civil penally:

(b) reason 10 believe but 100" no

further action (sent admonishment

letter): (c)-(f) tOO" no action

M UR J.lI19

Respondents: (a) Dole for President

Committee. James L Hagen. treasurer

(KS); (b)Campaign America.Judith

F. Taggart. treasurer (OC); (c) Becan

Construction Company. Inc. (NC);

(d) Owen and Associates (NI );

(e) Contrail, Harold C. Simmons.

president (TX): (f) Longlines Limited

(IA); (g) Matthew N. Clapp. Jr.

(WA) ; (h) Tele-Commumcanons. Inc.

Federal £lee/innCommission RE

PAC, Gary K. Bracken. treasure

(CO); (i) Browning-Ferris Indus

(DC); (j) Hartford Insurance Gr

PAC. Roger J. Mageau, treasure

(C1); (k) Allman Brothers (PA)

(I) Lydia Fried (MD);(m) John 

King (MA); (11) 16 other respon

Complainant: FEC initiated (P

dential audit)

Subject: Excessive conrnbunon

excessive expenditures in Iowa 

New Hampshire; corporare conr

lions; failure to pay in advance f

of corporate aircraft: failure to r

or obtain redesignations or refun

excessive contributions within l

limits: failure to disclose activiti

delegate committees

Disposition: (a) $100.000 civil

penally; (b) 512.000 civil penall

(c) 52,850 civil penally; (d) S2.<

civil penally; (e) $1 .200 civil pe

(f) $950 civil penalty; (g)--( h) $7

civil penally; (i) $600 civil pena

(j )-(I) $500; (m) $375 civil pena

(n) reason to believe but took no

further action

Ml:R 3379

Respondents: Tom Christo for 

Senate. Inc.•JOn Howell. treasur

(NH)

Complainant: FEC initiated

Subject: Excessive contribution

Disposition: Probable cause to

believe but rook no further actio

M UR 37U3

Respondents: Don Payne for C

gress. Craig A. Stanley. treasure

Complainant: Alfred D_Palerm

(NI )

Subject: Failure to file copies of

reports with state filing office; fa

10 file reports on lime

Disposition: Reason to believe b

10010; no further action

i\IUR 3713

Respondents (all in PAl: (a) Le

of Women VOleTS of Pennsylvan

(b) Pittsburgh Post-Gazene: et al

(cHO

Complainant: William D. While 

[co ntinued on pa
Compliance

(cml/inlled from page 9)

Subject: In-kind contribution

Disposition: (a)-{O No reason to

believe

M UR 3761

Respondents: Re-Elect Marilyn

Lloyd to Congress Comnuuec. Joel

D. Susman. treasurer (Jl"II)

Cc mplalnam : l--"EC initiated

Subject: Failure 10 file 48-hour

notices on la..t-minure contributions

Disposilion: $6.CXXl civil penally

M UR 3765

Respondents: Cornrninee to Elect

Michael Pratt.Jackie Daughtry.

treasurer (GA)

Complainant: FEC initiated

Subject: Failure 10 file report on time

Disposition: Reason to believe but

look no further action

M UR 37611

Respon dents: Rowland for Congress

Re-Election Committee. Ernest F.

Jones. Jr.. rrea..urcr (GA)

Complainanl: FEe initiated

Subject: Failure to file 48-hour

notices on last-minute contributions

Disposition: $3.9<)9 civil penalty

M Ull 3782

Respon den ts (a ll in NE): (a) Milder

for Congress Exploratory Committee.

Ed Fogarty. treasurer; (b) C.W.

Durham; (c) Barbara Vopnford

Complainant: FEC initiated

Subject: Prohibited and execs'sivc

contributions

Disposit ion : (a)-(c) Reason to believe

bUI took no further action (sent

admonishment letters) +

10

Index

The first number in each citation

refers to the "number" (month) of the

1993 Record issue in which the article

appearedTbe second number. following the colon. indicates lhe page number in that issue.

Advlsory Opinions

1992-38: Loan from Presidential

campaign's legal and compliance

fund to public funding account. 1:6

1992.-40: Commie..ions earned by

stale party committees. 2:5

1992-41: Solicitation of members, 3:3

1992.42: Bank deposit 10..1 in mail.

3:3

1992-43: Preemption of slate law's

furdraising restrictions. 3:4

1992-44: Qualifying asnational party

committee. 6:5

1993-1: Campaign's rental of storage

unit from candidate. 4:8

1993-2: Application of part)' spending

limits toTexas special runoff. 4:9

1993-3: Retroactive reallocation of

1991-92activity. 5:I

1993-4: Electronic payment of bills

through computer. 6:5

1993-5: 1992 contributions misplaced

at post office. 6:6

1993-6: Usc of excess funds by

for mer House member. 7:6

1993-7: Name of corporate PAC. 9:6

1993-8: Preemption of slate law

prohibi ting contributionsfrom

incorporated committees. 9:6

1993-10: Use of excess campaign

funds, 9:7

Court Cases

fo"EC v. _ _

- America's PAC. 4:10

- International Funding Institute. 1:2;

5:2

- Miller. 6:8

- National Republican Senatorial

Commiuee (93-0365). 6:8

- People & Politics. Inc.•3:3

- Political Contributions Data, Inc.•

8:6

v, fo"EC

- Common Cause (92-0249 (JHG

4:10

- CommonCause (92-2538). 1:8

- Democratic Senatorial Campaig

Committee (93-1321). 8:7

- Dukak..is.8:7

- Khachaturian. 8:5

- LaRouche (92-1100). 6:8; 9:3

- LaRooche (92-1555). 1:8

- National Rifle Association (92-

5078). 4:10

- Simon, 8:7

- Spannaus (9 1-068]), 6:7

- Wh;IC(93·771). 6:8

U.S. Senator John Seymour Comm

lee v, Dianne Feinstein, 1:8

Weber. et al. v, Heaney. et al.. 8:I

Reportin g

Last-minute contributions: 48-hou

reporting. 4:7

Reporting problems. letter 10new

candidates. u.S

Schedule for 1993. 1:3; 6:I

Special elections

- California. Mississippi. Ohio.

Texas and Wisconsin. 3:I: 4:7: 

- Michigan. 9:10

State filing. 9:6

800 Lin e Articles

Creditcard contributions. 5:5

Party committee allocation: carry

debts from previous election cy

2:7

$25 .000 annuallimit. 4:2

Michigan Special

Election

Michigan will hold a special

primaryelectionon November 2

and a special general election on

December 7 10 fill the 3rd Coegr

sional Districtseal of !he late Con

gressman Paul Henry.

Reponing dales for the e jecuco

will bepublished in theOctober

issue.
Frdl'fa{ Elr c/;on Commission R

I For example,menet toss of20 (·orpora le PAC f meon f that Ihe number oftermin

PACs exceeded the number otI-egistered PACs by 20.

- 20

- 134

- 3

- 9

- 3

- I

- 170

:"'Jet LossI 

December 

Number orPACs

J uly 1993

1.715

1,011

767

338

139

55

4.025

PAC Catego ry

Total

Corpo ra te

Nonco nnected

Trade/Membership/Healt h

Labo r

Corporation without Ca pita l Stock

Cooperative

Srpl/'m/la 1993

Statistics

Number of PACs Drops b)' 170

At the stan ofJuly 1993. the

number of federally registered PACs

totaled-',025. a decreaseof 120 PACs

since December 1992. The FEC

ralliesthe number of registered PACs

(wire a year.

The numberof PACs does not

necessarily track (he level of PAC

financial activity. since many registered PACs have lillie or no activity.

For example. according [0 reports

filed by PACs during the 1991-92

election cycle. over 35 percentdid not

make any contributions 10 candidates.

while 19percentdid 001 make any

disborserrems 31 all.

For statistics on semiannual PAC

counts taken since 1975. order the

FEC press releaseof August 2. Call

800/424-9530 (ask for Public

Records) or 202/219-4140.

•

•

(Sa article on page 4.)

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