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March 1985

FEDERAL ELECTION COMMISSION

1325 K Street NW Washington DC 20463 Volume 11 , Numbe

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LOUISIANA SPECIAL ELECTIONS

On March 30, 1985, LouisIana will hold a

special pri mary election in its 8th Congressional

District to fill the seat vacated by the death of

Representative Gillis Long. If no candidate obtains a majority of the votes, a special general

election will be held on May 4, 1985.

If only the special primary election is held,

the principal campaign committees of candidates

participating in the election must file pre- and

post-primary reports and a semiannual report.

If both a special primary election and a

special general election are held:

o Committees of candidates participating in the

special general election are not requIred to file

a post-primary election report. Instead, in addition to a pre-primary report, they must file

pre- and post-general election reports and a

semiannual report.

o Committees of candidates not participating in

the special general election do not have to file

pre- and post-general election reports. Instead

they must file a semiannual report covering

activity since the pre-primary report.

Note that all other political commIttees

which participate in the special elections (and

which do not report on a monthly basis) must also

follow these reporting schedules, as appropriate.

Filing deadlines are detailed in the chart below.

seat. All other committees supporting candida

in the special elections should contact the Co

mission for more information on required repor

Call 202/523-4068 or toll free 800/424-9530.

AO 1984-60: Campaign Debts Liquidated

Through Sale of Individual and

Partnership Assets

Mr. Patrick Mulloy, II, a defeated candidate 

Kentucky's Fourth Congressional District, plans 

liquida te campaign debts by selling individua

owned real estate holdings and his share of ass

in a fam ily partnership consisting of real est

interests. Proceeds from the sales would not 

considered contributions by the purchaser (l.e.

family member or an outside party) provided 

Mulloy sells the assets at their fair market val

11 CFR 100.7(a)(l)(iii). Kentucky law requires 

Mulloy to obtain written consent from memb

of the family partnership to sell his share of 

continu

TABLE OF CONTENTS

REPORTS

Louisiana Special Elections

ADVISORY OPINIONS

Closing

Date of Mailing Filing

Report Books Date Date

Pre-Primary 3/10/85 3/15/85 3/18/85

Post-Primary 4/19/85 4/29/85 4/29/85

Pre-General 4/14/85 4/19/85 4/22/85

Post-General 5/24/85 6/3/85 6/3/85

Semiannual 6/30/85 7/31/85 7/31/85

• The FEC will send notices on reporting requirements and filing dates to individuals known

to be actively pursuing election to this House

COURT CASES

3 FEC v. Liberal Party Federal Campa

Committee

3 National Congressional Club

and Jefferson Marketing. Inc. v. FEC

4 New Litigation

COMPLIANCE

4 Summary of MURs

STATISTICS

6 Ten Years of PAC Growth

7 AUDITS

7 INDEX
The Record is published by the Federal Election Commission, 1325 K Street, N.W., Washington,

D.C. 20463. Commissioners are: John Warren McGarry, Chairman; Joan D. Aikens, Vice Chairman;

Lee Ann Elliott; Danny Lee McDonald; Thomas E. Harris; Frank P. Reiche; Jo-Anne Coe,

Secretary of the Senate, Ex Officio; Benjamin J. Guthrie, Clerk of the House of Representatives,

Ex officio. For more information, call 202/523-4068 or toll-free 800/424-9530.

March 1985 FEDERAL ELECTION COMMISSION

partnership. Such consent would not result in a

contribution to his campaign.

Mr. Mulloy's campaign committee should

keep supporting records of the proposed sales,

including records of the method used to establish

the fair market value of any property sold. 11

CFR 102.9 and 104.14. (In this case, the fair

market value would be equivalent to the usual and

normal price a parcel of real estate would bring in

the market at the time Mr. Mulloy sold it.)

The Commission expressed no opinion on relevant tax issues because they are not within its

jurisdiction. (Date issued: January 11, 1985;

Length: 4 pages)

AO 1984-61: Trade Association's Use of Single

Form for Multiple Year

Solicitalion Approvals

The Society of American Florists (the Society), a

trade association, may use a single form to obtain

approvals from member corporations to solicit

contributions, OVer a period of several years, from

members' stockholders and executive and administrative personnel. Under the Act and FEC rules,

to solicit contributions for its separate segregated

fund, a trade association must obtain a member

corporation's written approval prior to the date of

solicitation. Once approval is given, the member

corporation may not authorize solicitations by any

other trade association for that year. II CFR

114.8(d)(l) and (d)(4).

In the case Of the Society and its separate

segregated fund, SAF-PAC, member corporations

may grant multiyear approval by signing a form

that includes a separate and specific authorization statement, to be signed by a representative

of the corporation, for each year approved by the

member. For example, the form would include

three separate statements, each accompanied by

a separate signature line, to cover approvals for

three years. The authorization statement must

indicate that the Society will limit its solicitations to the member corporation's solicitable personnel (i.e., its stockholders, executive and administrative personnel and their respective families). The form must also make clear that the

person signing the authorization form is doing so

as a representative of the corporation.

Once the Society has obtained the solicitation authorizations from member corporations, it

must conduct the solicitations in compliance with

other requirements of FEC regulations, See 11

\blume 11, Numt.e

CFR 102.5(a)(2) and 114.5(a). (Date issued: J

uary 24, 1985; Length: 4 pages)

AD 1984-63: Savings and Loan Associationts

Solicitation of Borrowers and S

ings and Demand Account Holders

The Amerifirst Good Government Committee (

Committee), the separate segregated fund of 

Amerifirst Federal Savings and Loan Associat

(the Association), a membership organization t

is a nonstoek corporation, may solicit contri

tions from those Assoe iation members who 

borrowers or holders of savings and demand 

counts provided these members are not otherw

prohibited from making contributions under 

election law. See 2 U.S.C. §§441b, 441c and 44

Moreover, the Committee may solicit a sel

group of eligible Association members, rat

than the entire membership, because Commiss

Regulations do not specify that solicitations 

conducted on an "all-on-none" basis.

Commission Regulations define a members

organization's members as "all persons who 

currently satisfying the requirements for me

bership" in the organization. 11 CFR 114.1(e). 

Supreme Court has determined that "members" 

a membership organization are analogous 

shareholders in a business corporation; that is, 

organization's members must include individu

who have "some relatively enduring and indep

dently significant financial organizational atta

ment" to the membership organization. (See F

v. National Right to Work Committee, 459 U

197,202, 103 S.Ct. 552 (1982)). In determining 

class of members is sufficiently related to 

organization to qualify as "members, II the Co

mission has "required that members have spec

obligations to and rights in the organization," 

cluding the right to govern the organization.

The Association's demand and savings 

count holders and its borrowers meet these me

bership requirements and are therefore eligi

for the Committee's solicitations. Specifica

financial obligations exist between Amerifirst 

its savings and demand account holders and 

tween Amerifirst and its borrowers. Furthermo

the participation of the account holders and b

rowers in governing the Association is eviden

by their rights to: make proposals and vote 

membership meetings, help nominate directo

elect directors and receive a pro rata share 

.assets on dissolution of the Association. Comm 

2
stoners Thomas E. Harris and Danny L. McDonald

filed a joint dissent. (Date issued: February 5,

1985; Length: 7 pages, including dissent) •

March 1985 FEDERAL ELECTIOI\J COMMISSION \blume 11, Numte

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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.

AOR Subject

1985-6 Affiliation between PACs connected to

union local and international labor organization. (Date made publics January

22, 1985; Length: 2 pages)

1985-7 Solicitation of personnel of wholesalers

exclusively affiliated with subsidiary of

PAC's parent corporation. (Date made

public: January 28, 1985; Length: 7

pages, plus 23-page supplement)

1985-8 Time frame for committee's return of

illegal contributions. (Date made public:

February 1, 1985; Length: 12 pages)

ALTERNATE DISPOSITION OF

ADVISORY OPINION REQUEST

AOR 1984-44: Contributions by two PACs prior

to merger of their eorporate

sponsors

In a letter of January 17, 1985, the General

Counsel acknowledged the withdrawal of the advisory opinion request. In a letter of December

10 1984 to the Commission, the requesters had

cl~imed that, subsequent to their merger, the two

corporations had taken steps to "prevent exceeding (contribution) limits......

PUBLIC APPEARANCES

3/18/85 The Southland Corporation

Washington, D.C.

Commissioner Lee Ann Elliott

3/26/85 American Society of Association

Executives

Washington, D.C.

Commissioner Joan D. Aikens

4/18/85 American Bar Association

San Antonio, Texas

Commissioner John Warren

McGarry

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FEC v. LIBERAL PARTY FEDERAL

CAMPAIGN COMMITTEE

On November 13, 1984, the U.S. Dist

Court for the Southern District of New Y

entered a default judgment against the defenda

in FEC v. Liberal Party Federal Campaign Co

mittee (Civil Action 84-CIV 5552). Under 

court order within 30 days of the court's f

judgment, the Liberal Party Federal Campa

Com mittee had to:

o Amend its reports to reflect in-kind contri

tions of $14 149 to the National Unity C

, 

paign for John B. Anderson, Mr. Anders

principal campaign committee for his 1980 P

sidential general election campaign; and

o Pay a $5,000 civil penalty to the U.S. Treasu

For a summary of the FEC's complaint, 

page Bof the October 1984 Record.

NATIONAL CONGRESSIONAL CLUB AND

JEFFERSON MARKETING, INC. v. FEC

On February 14, 1985, the National Cong

sional Club (NCC), a multicandidate polit

committee, and Jefferson Marketing, Inc. (JMl

North Carolina corporation that provides me

services to political committees, voluntarily 

missed a suit they had filed against the F

Plaintiffs had filed their suit with the U

District Court for the District of Columbia 

January 29, 1985. (Civil Action No. 85-0299)

In their suit, NCC and JMI sought act

against the FEC with regard to the agen

processing of two compliance actions (I.e., m

ters under review or MURs). The complia

actions were filed against NCC and JMI by C

gressman Charles E. Rose (MUR 1503) and 

Democratic Party of North Carolina (MUR 17

In his complaint, filed in October 1982, Congr

man Rose alleged that, among other things, 

had provided media services to his 19B2 prim

election opponents at less than fair market va

resulting in a prohibited corporate contribut

from JMI to the candidates. In the ensuing inv

tigation, the General Counsel'S office also fo

that a special relationship may have existed 

tween NCC and JMI. In MUR 1792, the De

cratic Party of North Carolina included, am

its claims, an allegation concerning the NCC/J

relationship.

NCC and JMI asked the court to find that 

FEC's actions with regard to MURs 1503 and 1

violated the election law, as well as the First 

Fifth Amendments, and were contrary to l

Plaintiffs based these claims on the following 

legations:

conti1U
March 1985 FEDERAL ELECTION COMMISSION

o -The FEC refused to consolidate MURs 1503 and

1792, as requested by plaintiffs NCC and JMI.

o The FEC failed to give NCC and JMI adequate

notice of the factual and legal bases for the

agency's "reason to believe" determinations in

MUR 1503.

o Before finding "reason to believe" that NCC

and JMl were related, the FEC found "probable

cause to believe" that, based on their relationship, the two organizations had violated the

election law's ban on corporate contributions.

o The FEe refused to give NCC and JMI an

opportunity to respond to the General Counsel's

position on the FEC's authority to find "probable cause to believe" NCC and JMI were

related before finding "reason to believe" they

were related.

o The FEC took final action on MUR 1503 despite

NCC's and JMI's allegations that the agency ha~

violated the election law in processing the

complaint.

NCC and JMI also sought an injunction requiring the Commission to comply with provisions

of the election law and the Constitution.

NEW UTIGATION

Spannaus and the LaRouche Campaign v, FEC

The LaRouche Campaign, the principal campaign committee for Lyndon H. LaRouche, Jr., a

1984 publicly funded Presidential primary candidate, and the campaign's treasurer, Edward W.

spannaus, ask the court to declare that:

a FEC investigations of the LaRouche Campaign's

1984 campaign activities are "motivated solely

by bad faith" and are "an abuse of process," in

violation of state laws and the U.S. Constitution;

o The FEC is "selectively and discriminatorily

enforcing the federal election laws resulting in

violation of the plaintiffs' rights of equal protection"; and

o The FEC has violated the confidentiali ty provisions of the federal election laws.

Plaintiffs also ask the court to:

o Enjoin the FEC from opening any further enforcement matters, pending resolution of current enforcement matters concerning the LaRouche campaign;

o Enjoin the FE from seeking information from

third parties without .first notifying the LaRouche Campaign of its intention and providing

the campaign with the particulars of the information sought; and

o Direct the agency to refrain from any further

investigation until the FEC: a) furnishes the

LaRouche Campaign with full disclosure of the

supporting facts and b) demonstrates to the

court that it is "proceeding with a lawful investigation within the scope of its jurisdiction."

4

\blume 11 ,Numte

U.S. District Court for the Southern Distr

of New York, Civil Action No. 85 CIV. 04

January 16, 1985.

Golar v, FEC (Second Suit)

Simeon Golar, a House candidate who ca

paigned unsuccessfully in the 1982 New Y

Democratic primary, seeks action against 

FEC for dismissing the second administrat

complaint that he filed with the agency c

cerning campaign support provided to his prim

opponent, Representative Joseph P. Addabbo,

Mr. Golar filed his first administrative co

plaint concerning the Addabbo campaign in J

uary 1984. In the complaint, he alleged t

fundraising services provided to Congressm

Addabbo by the personnel of two corporati

constituted illegal contributions by the individu

and their respective corporations. After the Co

mission dism issed his first complaint, Mr. Go

filed his first suit seeking court review of 

FEC's decision. In its answer, the FEC argued t

Mr. Golar had failed to exhaust the administrat

remedies available to him with respect to cou

II, III and IV of the complaint and that th

counts should be dismissed. Accordingly, on 

gust 31, 1984, Mr. Colar filed a second adm

strative complaint with the FEC concerning 

Addabbo campaign, which incorporated new 

legations made in his suit. In November 1984, 

Commission dismissed his second complaint.

On January 14, 1985, after being informed 

the FEC's dismissal of Mr. Golar's second admi

trative complaint and his intention to file 

second suit, the court dismissed his first 

without prejudice and stated that Mr. Golar co

incorporate the claims of his first suit in 

second suit.

U.S. District Court for the District of 

lumbia, Civil Action No. 85-0225, January 

1985.

MUR 1695: Loans Between Political

Committees

On October 1, 1984, the Commission entered i

conciliation agreements with a candidate comm

tee and a political committee which had, resp

tively, made and accepted an excessive contri

tion in the form of a loan.

Complaint

The Commission initiated this matter ba

on information obtained in the normal course 

its supervisory responsibilities. In August of 1
FEDERAL ElECTION COMMISSION

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March 1985

a political committee sponsored a debate among

four presidential candidates. The political committee charged a $10 admission fee. The committee also secured a loan of $16,000 from the

authorized committee of a congr-essional candidate (the candida te com mittee), The revenue generated by the adm ission fee and the proceeds of

the loan were used to pay the expenses incurred in

sponsoring the deba teo

On May 8, 1984, the Commission opened a

MUR concerning these activities and found reason

to believe that:

The political committee had accepted an

excessive contribution in the form of a loan,

in violation of 2 U.S.C. S441a(a)(l)(C); and

The candidate committee had made an excessive contribution in the form of a loan, in

violation of 2 U.S.C. S441a(O.

General Counsel's Report

Excessive Loan. Under the Act, a loan is considered a contribution, subject to the same limits

imposed on any other type of contribution.

2 U.S.C. S43l(S)(A)(i). Therefore, the General

Counsel found, when the candidate committee

loaned $16,000 to the political committee, it

exceeded contribution limits by $11,000, in violation of 2 U.S.C. S441a(a)(l)(C). Similarly, the political committee violated the law by accepting

this excessive contribution, in violation of

2 U.S.C. S441a(f).

Respondents claimed that they were unaware

that a loan was considered a contribution, subject

to the $5,000 limit. Upon learning this, the political comm ittee promptly returned $11,000 to the

candidate committee, bringing the amount of the

loan within the legal limit. Respondents further

maintained that a tax-exempt organization which

does not "endorse, support or oppose political

candidates or political parties may stage nonpartisan debates," and that funds provided to pay for

nonpartisan debates sponsored by such nonpartisan, tax-exempt organizations do not count as

contributions, under 11 CFR §SlOO.7(b)(21) and

110.13. The political committee contended that it

qualified as a non-partisan, tax-exempt organization because the debate was its sale activity, the

debate was a nonpartisan event, and the committee did not make contributions to or expenditures

on behalf of any candidate for federal office.

The General Counsel held that the political

com mittee did not quality as a nonpartisan, taxexempt organization, as defined under 11 CFR

SllO.13. In fact, the organization was registered

with the Commission as a political committee.

Excessive In-Kind Contributions to Candidates

The General Counsel also stated that the

poli tical com mittee had failed to report the expenditures involved in staging the debate as inkind contributions to the authorized committees

5

Volume 11, Numbe

of the four Presidential primary contenders w

participated in the event, in violation of 2 U.S

S 434(a)(1). These contributions, in the amount 

$2,330.97 to each candidate's committee, e

ceeded the legal limit of $1,000.2 U.S.C. S44

(l)(A).

By accepting excessive contributions fro

the political committee, and by failing to rep

them, the four Presidential primary candida

committees had also violated the law. 2 U.S

SS441a(f) and 434(a)( 1). The General Counsel r

commended that the Commission find reason 

believe that the Presidential committees had v

lated the law.

Commission Determination

On July 31, 1984, the Commission fou

reason to believe that the authorized committe

of the four Presidential primary candidates w

participated in the debate had violated the A

The file was closed with respect to these vio

tions.

On October 1, 1984, the Commission enter

into conciliation agreements with the politi

committee and the candidate committee. T

political committee agreed to pay a civil pena

of $450 and to amend its reports to reflect 

contributions to the four Presidential candid

committees. The candidate committee agreed 

pay a civil penalty of $250. Both com mitte

agreed that they would not undertake any futu

activity which is in violation of the Act.

CHANGE OF ADDRESS

Registered political com mittees 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 1 (Statement of Organization) and filed with the Clerk of the

House, the Secretary of the Senate, or the

FEC, as appropriate.

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

guaran tee that your SUbscription can

be located on the computer.
March 1985 FEDERAL ELECTIOI\J COMMISSION 'vblume 11, Numt

TEN YEARS OF PAC GROWTH

By the end of 1984 there were 4,009 PACs

registered with the FEe, an increase of 13 percent over the 3,525 PACs registered at the end of

1983. (The term PAC or political action com

tee refers to any political committee not au 

rized by a federal candidate or established b

political party.)

The graph below plots the growth of P

from 1975 through 1984. Figures show that 

PACs existed at the beginning of 1975. By the 

of 1976, that number had risen to 1,146 and 

January 1985 had reached 4,009. The graph d

not reflect the financial activity of PACs.

PAC GROWTH

·Number of PACs

2000 1-..------------

Corporate

Trade!

Member,s

Health

Nonconnec

-0-- --O~---nOther**

-0-

1977

500

lOon 1-------

1500

OL.r--..,...--.,.....-~r:_-.....,.--"""T'"--""T"--"T"'"'--r__-.....,.--_r-..

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

*For the years 1974 through 1976, the FEC did not identify subcategories of PACs other 

corporate and labor PACs. Therefore, numbers are not available for Trade/Membership/Health PACs 

Nonconnected PACs.

**Includes PACs formed by corporations without capital stock and cooperatives. Numbers are 

available for these categories of PACs from 1974 through 1976.

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Mard11985 FEDERAL ELECTION COMMISSION \k:llume 11 ,Numt:e

AUDITS RELEASED

TO THE PUBIJC

The following is a chronological listing of

audits released by the Com mission between June

12, 1984, and November 19, 1984. The audit

reports are available to the general public in the

Public Records Office.

1. Georgia Federal Elections Com mittee (final

audit report released June 12, 1984)

2. Western Intermountain Network Political

Action Committee (final audit report released July 3, 1984)

3. DNC Services Corporation/Democratic National Committee (final audit report released

July 3, 1984)

4. Liberal Party Federal Campaign Committee

(final audit report released July 18, 1984)

5. Askew for President Com mittee (final audit

report for the 1984 primary campaign released August 2, 1984)

6. The National Unity Campaign for John

Anderson (addendum to the final audit report

for the 1980 general election campaign released August 24, 1984)

•

7. Hollings for President, Inc. (final audit report

for the 1984 pri mary campaign released September 10, 1984)

8. Long Island Aerospace Political Com mittee

(final audit report released September 18,

1984)

9. Democratic State Committee, Special Account--Delaware (final audit report released

November 8, 1984)

10. International Chiropractors Political Action

Committee (final audit report released November 19, 1984)

•

7

Each month this cumulative index lists a

visory opinions, court cases and 800 Line artic

published in the Record during 1985.

The first number in the citation refers to 

"number" (month) of the Record issue; the seco

number, following the colon, Indicates the pa

number in that issue.

OPINIONS

1984-16: Single Limit For Convention &: Prima

1:3

1984-33: Fundraiser by Trade Association's All

Members, 1:3

1984-41: Corporate Payments for Media Ads, 2:

1984-48: Travel Reimbursements to State by S

ate Campaign, 2:1

1984-53: Real Estate Lessors as Federal Contr

tors, 1:4

1984-55: Solicitation of Law Firm's Partners 

Bank PAC, 1:5

1984-56: Book Payments &:: Honorarium, 1:5

1984-57: Corporate Communications on Legis

tion, 2:2

1984-58: City's Claim for Reimbursement 

Presidential Campaign, 2:3

1984-59: Noncampaign Uses of Campaign Asse

2:3

COURT CASES

Antosh v, FEC, 2:4

Citizens for Percy '84 v. FEC, 1:6

DCCC v, FEC, 2:6

FEC v: Anderson, 2:6

FEC v, Furgatch; FEC v, Dominelli, 1:6

FEC v, Hemenway for Congress Committee, 2:6

FEC v, NRWC; NRWC v, FEC, 1:7

Orloski v, FEC, 2:5
March 1985 FEDERAL ELECTION COMMISSION \bIume 11, Numo

FEDERAL ELECTION COMMISSION

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