August 1993

Table of Contents

Publications

1 FEe Releases NewCampaign

Guide for Candidates

2 Updated Edition of FEC

Regulations Now Available

II OrderFonn

Court Cases

FECAPreempts Minnesota

Campaign Finance Statute

5 Common Cause v. FEC(92-2538)

5 Khachaturian v.FEe

6 FECv, Political Contributions Data

7 NewLitigation

Conferences

2 San Francisco Conference,

September 30 - October1

Regulations

3 FECSeeksComments on Proposed

Enforcement Regulations

Public Appearances

4 FECStaffMember toVisit

Harrisburg, PA, August 19 and 20

7 AdvisoryOpinions

Compliance

8 MUR 3234: PartyCommittee

Solicitation Triggers Federal

Committee Status

8 MURs Released to the Public

8 Federal Register

11 Index

12 Noticeon Subscription Renewal

Federal Election Commission

Publications

FEe Releases NewCampaign

Guide for Candidates

The Commissionrecentlypublished a new edition of theCampaign

Guide for Congressional Candidates

andCommittees. Written in clear

language, theGuide isintendedtobe

a primary source of information on

the steps that House and Senate

candidatecommitteesmust take to

comply with the federal campaign

finance law, from registration through

termination.

The revised'Guide features:

• New and revisedmaterial basedon

regulations and advisoryopinions

issued since the previousedition

(July 1988);updatedtopicsinclude

transfers, foreign nationals, best

efforts and amended reports.

• An expandedsampleforms section

that includes ScheduleC-l (Bank

Loans) and FOTIn8 (Debt Settlement);

• An index to help the reader locate

topics.

Copies of the Guide will automatically bemailed to treasurers of

authorizedcandidatecommittees

(deliverymay take up to threeweeks).

The FEC urgestreasurers to order

additionalfreecopies for campaign

(continued on page 2)

Volume 19, Number 8

Court Cases

FECA Preempts Minnesota

CampaignFinanceStatute

The U.S. Courtof Appealsfor the

Eighth Circuit recently held that the

Federal ElectionCampaign Act

(FECA) preemptedthe Minnesota

Congressional CampaignReform Act

in its entirety.The court's June 17.

1993,decisionin John 'Vincent

Weber, et al. v. William M. Heaney, et

al., affirmeda districtcourt holding.

The Commissionwas an amicus

curiae in the litigation.

Background

Under the MinnesotaCongressional CampaignReform Act, U.S.

House and Senatecandidateson the

generalelectionballot may choose to

limit their campaignexpendituresto

specifiedamounts. A contributorto

these candidatescan then receiveup

to a $50 refund from the state.Ifone

candidateagreesto the limit but the

major party opponent does not,

neither candidateis subjectto the

spendinglimit, but the first candidate

is entitledto a public funding grant

from the state. Violationsof the

voluntaryexpenditurelimit are

subject to civil penaltiesof up to four

times the amountof the excess

spending.

(continued on page 5)
Federal EJection CommfssionRECORD

Publications

(continued from page1)

staffresponsible for fundraising,

recordkeeping or reporting. All

readers are welcometo orderfree

copies, usingthe form on page 11.

Becausethe Guideincludes

citations to FECregulations, readers

may also wish to orderthe new11

CFR (see below).•

UpdatedEditionofFEe

Regulations Now Available

An updatededitionof FEC

regulations, the 11 CFR, was recently

published by the Officeof the, ~ederal

Register. All treasurers of ~o.lltJ.cal .

committees shouldbe receiving their

copies from the FEC in aboutthree

weeks. Anyoneelse may order free

copiesby usingthe form on page 11.

Federal Election Commission

999 E Street, NW

Washington, DC20463

800/424-9530

202/219-3420

202/219-3336 (TDD)

ScottE.Thomas, Chainnan

Trevor Potter, Vice Chairman

Joan D.Aikens, Commissioner

LeeAnnElliott,Commissioner

Danny L. McDonald,

Commissioner

John Warren McGarry,

Conunissioner

WalterJ. Stewart,Secretary

oftheSenate, Ex Officio

Commissioner

Donnald K. Anderson, Clerk

oftheHouse ofRepresentatives,

ExOfficio Commissioner

John C. Surina, Staff Director

LawrenceM. Noble, General

Counsel

Published bytheInfonnation

Division

Louise D.Wides, Director

Stepbanie Fitzgerald, Editor

Blake Lange, Graphics Advisor

2

The new editionincludes regulatory revisionsthatbecameeffective

during 19921 and one that became

effectivein 1993:

• The ban on transfers from a candidate's nonfederal campaign to his

or her federal campaign(11 CPR

11O.3(d». The prohibition became

effective July 1, 1993. Any nonfederal fundsremaining from pre-july

transfers had to be removedfrom the

federal campaignaccountby July

30.For more information, see the

JuneRecord, page 4.

• The banon the use of candidate

namesin the namesof special

projects and other communication~

sponsored by unauthorized commrttees(11 CPR 102.14(a»). This new

regulation becameeffectiveNovemOOr4,1992.

• The revisions to theregulations on

the allocation of federal and nonfederal expenses(11 CFR 106.5and

106.6). The revisedrules add a

nonfederal point to the ballot

composition ratio usedby party

committees; expandto 70 days the

timeduring whicha nonfederal

accountmay transferfunds to pay

the nonfederal shareof a joint

expense; and allow60 days after a

fundraising programfor adjustments

to the ratio.The revisions became

effective June 19, 1992.

• New regulations thatexplain

procedures for filingpetitions for

rulemakings (11 CFRPart 2(0). The

effectivedate was September4,

1992.

• Interimruleson ex parte communications (11 CFR Part 201),effective

December9, 1992.

• The repealof the regulations on

honoraria, effectiveJanuary 15,

1992. Legislation enactedin August

1991 prohibitsany federal offi~­

holderor employee from accepnng

}Althougheffective inApril1992,revised

ruleson bankloanswereincludedin the

previouseditionofthe 11 CPR. See

11CFRlOO.7(bJ(11J(i)-(ii),

JOO.8(b)(I2)(i}-(ii) and l04.3(d)(1)-(3).

August1993

honoraria, thus ending the FEC's

jurisdictionin this area. The repeal

of honorariaregulations corresponds

to the 1991 repealof the honoraria

provision in the FederalElecti?n

CampaignAct (2 U.S.C. §441l)."

Conferences

San Francisco Conference

September30- October1

The FEC's first conference for the

1994electioncycle willbeheld in

SanFranciscoand will offer workshops for candidate committees, party

committees, and corporate and labor

PACs and their connected organizations.' To place your name on a

mailing list to receiveregistration

materials for the l-and-l/2 day conference, call 800/424-9530 or 202/

219-3420.

At the conference, FEC Commissionersand staff will presentworkshopson the federal campaign finance

law.In addition, representatives of the

InternalRevenueServiceand the

California Political Fair Practices

Commission will be on hand to

answerquestions.

The $135fee for the conference

coversthree meals(two continental

breakfasts and a lunch)and a reception.The conferencewill beheldat

the HotelNikko San Francisco(415/

394-1111). To receive the grouprate

of $120 per night,notify the hotelthat

you will be attending the FEC

conference...

JThe FEe willholda November conferencein Washington, DCJor corporations, tradeassociations, labororganizationsand theirPACs.Call theFEC to

placeyournameon themailinglist.
August1993

Regulations

FECSeeks Comments

on Proposed Changes

to Enforcement Regulations

TheCommission isseeking public

comment on proposed changes to its

enforcement regulations (II CFRPart

III). The Notice of Proposed Rulemaking alsorequests comments on

several proposed additions to the

regulations.

Comments, which mustbe in

writing, are dueSeptember 24 and

should be addressed to SusanE.

Propper, Assistant General Counsel,

999E Street, NW,Washington, DC

20463. Anyone wishing to testify at

the publichearing on thisrulemaking,

scheduled for October 20,should so

indicate in their comments.

Copiesof the Notice of Proposed

Rulemaking, published in theFederal

Register on July 8 (58FR 36764),

may be ordered at a costof 5¢ per

page. Call800/424-9530 (askfor

Public Records) or 202/219-4140.

Proposed Changes

The draftregulations propose

changes in theareas listed below.

(Citations are to II CFR Parts 102

and 111.)

•Termination of committee's registration andreporting obligations

(102.3)

•Liability of candidates andcommittee treasurers (111.27)

• Confidentiality andpublicdisclosure

of enforcement matters (111.22 and

111.23)

• Sources offunds usedtopay

penalties; reporting (111.20)

• Computation of timefor enforcement-related deadlines (111.2 and

111.6)

• Extensions of time(111.26)

•Procedures forfiling andamending

complaints andfornotifying

respondents (111.4 and 111.5)

• Reason to believe findings; letters of

admonishment; reconsideration of

reason to believe findings (111.8,

111.9 and 111.10)

• Investigations, including subpoenas

anddepositions (111.10, 111.12,

111.13 and 111.15)

•Referrals of knowing andwillful

violations to theAttorney General of

the United States(111.19)

• Civilsuits, including notifications to

complainants andrespondents

(111.21)

•Representation by counsel (111.25)

Highlights of Changes

Several of theproposed changes

are summarized below.

Committee Termination. The draft

rules wouldincorporate a currentFEC

policy underwhich a political

committee's reporting obligation ends

onlywhenit receives a letterfrom the

FEC stating thatitstermination report

has beenaccepted. The amendment

wouldalsoclarify thattermination is

precluded whena committee is

involved in an enforcement matter,

auditor litigation withthe FECor

whenit has not yetsatisfied the terms

of a conciliation agreement.

Liability ofTreasurers and

Candidates. Thisnew section would

explain the legalliability of candidates andcurrentandformer treasurers' in boththeirofficial and

individual capacities.

Underthe proposed rules,if the

agencyfound reason to believe or

probable causeto believea violation

had occurred, thecurrenttreasurer

wouldbe named in the findings,

whether or not theviolation took

placeduring his orhertenure. The

treasurer wouldbe named onlyin his

or herofficial capacity. Comments are

sought on whether it wouldbe

preferable to makefindings against

candidates, former treasurers or other

persons if the alleged violations

occurred before the current treasurer

tookoffice.

TheFEC couldtakeactionagainst

a treasurer forfailing to carryout the

legal responsibilities imposed on a

treasurer (e.g., filing reports, maintaining records). In suchcases, both

Federal Election Commission RECORD

the committee and the treasurer would

beliableforthe full amount of any

civilpenalty imposed by thecourt. If

the committee wasinsolvent or

unwilling to paythe penalty, the

treasurer wouldbe personally liable

for the payment.

A candidate or treasurer couldbe

found individually liableif he or she

hadpersonal knowledge of, or was

actively involved in, an alleged

violation.

Complaints MadePublic. New

language wouldspecifically permit

theCommission to make complaints

public. The agency believes thisnew

policyis consistent withthe legislativehistory of the confidentiality

provision (2U.S.c. §437g(a)(l2»).

Theagencyrequests comments on

whether thepublicfile shouldalso

include the responses of thepersons

alleged to have committed the

violations. The agency will continue

to keep ongoing investigations

confidential, however, asrequired by

the statute.

The proposed ruleswould also

allow theCommission to provide

information on the status of the

complaint to thecomplainant, who

would haveto agree not to disclose

any of the information. Thisproposal

would reduce the need forcomplainantsto file suitagainst the agency

simply to find out whatactionthe

Commission hastakenon their

complaints. See 2 U.S.C.

§437g(a)(8)(A).

Underanotherproposal, respondentscouldwaivetheirprivileges of

confidentiality.

Sources ofFunds to PayPenalties;

Reporting. The proposed ruleswould

permit impermissible funds-s-i.e.,

funds not complying withthe limitationsand prohibitions of the Federal

Election Campaign Act-to be used

to paycivil andcriminal penalties.

However, these funds couldnot be

deposited in a political committee's

account and would have to be

reported as "otherreceipts" and"other

disbursements" in itemized memo

(continued all page 4)

3
FederalElection Commission RECORD

Regulations

(continuedfrom page 3)

entries, regardless of amount. Permissible fundsreceived expressly and

exclusively to pay civilpenalties

wouldhaveto be deposited in the

committee's accountand wouldalso

have to be itemized, regardless of

amount, as "otherreceipts" and "other

disbursements."

Complaints Basedon News

Stories. The proposed ruleswould

establish thattheCommission does

consider complaints basedon news

stories when sufficient factsare

presented. Comments are soughton

whether, in thecase of anFECgenerated casebasedon a newsstory,

the respondents shouldhavean

opportunity to replybefore the

Commission decides whether to find

reasonto believe a violation has

occurred.

TimeLimitsandExtensions of

Time.The proposed ruleswould

explainhowresponse time is computed whenan enforcement-related

actionis subject to a deadline. Under

the draftrules,theCommission would

notroutinely grantextensions of time.

A personwouldhaveto applyfor an

extension of timeat least5 days

before the deadline (3 days,to request

an extension for motions on subpoenas and orders) and would have to

showgoodcause forthe extension.

Absentextraordinary circumstances,

theCommission would not consider a

late-filed brief.

Subpoenas. The proposed rules

wouldclarify that,before challenging

an FECsubpoena or orderin the

courts, the respondent mustfile a

timely motion to quashor modify the

subpoena or orderwiththeFEe.

Comments are soughton whetherto

lengthen thetime forfiling motions to

quashsubpoenas.

Violations ofConciliation Agreements. The proposed ruleswould

makeclear thattheCommission may

authorize suit for a violation of a

conciliation agreement, suchas the

failure to paya civil penalty. The

4

proposed ruleswouldalsoreflectthat

the agency may take actionagainst

both the committee and the treasurer

who signed the agreement, and may

ask the courtto impose an additional

penalty.

Topics Under Consideration

TheCommission isseeking

comments on whether certaintopics

shouldbe covered in the regulations:

•Enforcement hearings

• Notification to candidates of

enforcement actions involving their

authorized committees

•Refiled complaints; failure to raise

issues in a complaint

• The agency recordwhencompliance

matters proceedto litigation

• Statements of reason

• Investigatory materials provided to

respondents

• Faxeddocuments

Highlights of Topics

Someof the topics are summarized

below; alsolistedare someof the

questions theCommission hasraised

for comment.

Hearings. TheCommission is

considering the possibility of conducting hearings in enforcement matters

andseekscomments on several

questions that arise: Shouldhearings

be heldin all casesor just certain

cases,for example, thoseinvolving

possible knowing andwillful violations? At whatpointin the enforcementprocess should hearings be

held?Whoshouldhavethe opportunityto testify? Shouldtestimony be

compelled? Whattopics should be

addressed? TheCommission notes

thathearings couldincrease expenses

for boththeCommission and the

respondents and couldprolong the

enforcement process.

Notification to Candidates.

Currently whena caseinvolves an

authorized committee, the candidate

is senta courtesy copyof the complaintor, in the caseof an internally

generated matter, the reason to

believe fmdings. ShouldtheCommission sendcandidates additional

August 1993

documents, suchas theGeneral

Counsel's briefsandproposed

conciliation agreements? The confidentiality provisions and the attomey/

clientprivilege maynot permitsuch

disclosure ifthe candidate is not

namedas a respondent.

RefiledComplaints. TheCommissionseekscomments on a provision

that wouldpreclude complainants

from' the samecomplaint afterit has

beendismissed unless it provides new

evidence. Comments are alsosought

on whether to treata complainant's

failure to raisean issuein a complaint

or an amended complaint as a waiver

of the complainant's rightto raisethe

issuein a latercourtsuit.

Statements ofReasons. The

Commissioners issuestatements of

reasons whena complaint is partially

or entirely dismissed because the

Commission couldnot reacha fourvotemajority on whether to take

action. Comments aresoughton

whether the regulations should

explain the procedures usedfor

issuing statements ofreasons.

FaxedDocuments. Comments are

sought on the feasibility of the FEC's

accepting faxedcopies of documents

thatdo not requirean original signature, such asresponses to complaints

and designations of counsel. A

backup hard copy wouldlaterbe

required.•

FEe Staff Member to

Visit Harrisburg, PA,

August 19 and 20

Dorothy Yeager, anFEe public

affairs specialist, will visit Harrisburg, Pennsylvania, August 19 and

20,tohelp candidates and party

committees understand and comply

with thefederal campaigu finance

law. Representatives of candidate

and party committees wishing to

schedule ameeting with Ms.

Yeagershould callherat 800/424-

9530or202/219-3420.
August 1993

Court Cases

(continuedfrom page 1)

The FECA"supersede[s] and

preempt[sJ any provision of statelaw

withrespect to election to Federal

office." 2 U.S.c. §453. The FEC

addressed the Minnesota preemption

question in AO 1991-22, requested by

threemembers of theMinnesota

delegation to the U.S.Congress. The

Commission concluded that the

Campaign Reform Act soughtto

regulate an areaunderthe sole

authority of federal law and was

therefore preempted. The requesters,

seeking the samerulingfrom the

courts, filed suitagainstthe state

officials responsible for enforcing the

Campaign Reform Act.

District Court Decision

In deciding whether theFECA

preempted theMinnesota Act,the

U.S. DistrictCourtfor the District of

Minnesota found that§453and its

legislative history weretoo ambiguous to provide muchguidance and

therefore looked to the FEC'sinterpretation of §453 in itsregulations.

(II CPR 108.7 provides, in part,that

federal law supersedes statelaw in the

area of expenditure limitations.) The

courtfound that"thisregulation is

probably the mostpersuasive evidencethatsection 453 wasintended

to preempt all statelawspurporting to

regulate congressional campaign

expenditures." Thecourtnoted that

the regulation passedCongressional

review in 1977. "Thus, theCourt

infers that thisregulation, because it

wastacitly approved by Congress,

represents a validinterpretation of

Congressional intent." Thecourtalso

accorded deference to the

Commission's conclusion in AO

1991-22.

On June 11, 1992, thecourtheld

that the Minnesota Campaign Reform

Act waspreempted in its entirety

basedon the FEe's interpretation of

§453.The courtpermanently enjoined

Minnesota fromimplementing or

enforcing the Act.

Court of Appeals Decision

Concluding that§453wassusceptibleto more thanonereading, the

courtof appeals nevertheless heldthat

"undereveryplausible reading of

§453,theCampaigu Reform Actfalls

squarely within the boundaries of the

preempted domain."

Likethe district court,the courtof

appeals waspersuaded by theFEC

preemption regulation: "We fmd this

dulyauthorized regulation is a further

express preemption of the Campaign

Reform Act."

The courtrejected appellants'

argument that the regulation wasnot

applicable to voluntary expenditure

limits. The courteven questioned

whether the limits were "truly

voluntary" in lightof thebenefits

bestowed on thosewhocomplied with

themand the penalties imposed on

thosewho did not...

Common Cause v.FEC

(92·2538)

On March30,1993, theU.S.

District Courtforthe District of

Columbia Circuit approved an

agreement between Common Cause

and theFEC to suspend thislitigation.

In lightof that agreement, the court

dismissed the suit.The case may,

however, be reopened in October.

In its suit,Common Cause claimed

thatthe FEC had failed to take

required action on its administrative

complaint filed inDecember 1990.

The complaint alleged that the

National Republican Senatorial

Committee (NRSC) had made

excessive contributions and expendituresin connection withthe 1988

Montana Senaterace and had failed to

report themaccurately. The complaint

also alleged that the Montana Republican Partyhad violated the lawby

participating in the NRSC's alleged

violations.

Common Causeand theFEC

agreed to suspend litigation for six

months, at the endof whichtimethe

FEC is to reporton itseffortsto

resolve the complaint. Underthe

Federal Election Commission RECORD

court's dismissal order, if Common

Causeis notsatisfied withthe

Commission's actions on thecomplaint, the partieshaveuntilOctober

30 to reopen the litigation. Afterthat

date, the matter will automatically be

dismissed withprejudice...

Khachaturian v. FEC

On May 17, 1993, the US. District.

Courtfor theEasternDistrict of

Louisiana dismissed thiscase,ruling

thatJon Khachaturian failed to raisea

substantial constitutional challenge to

the$1,000contribution limitas

applied to his independent candidacy.

The district courthad previously

certified the constitutional questions

to the US. Courtof Appeals for the

FifthCircuit. That court, however,

concluded thatthe certification was

premature and remanded thecase to

the district courtwithinstructions to

determine whethercertification was

merited. The district courtfound that

it wasnot.

Mr. Khachaturian has appealed the

dismissal.

Background

Mr. Khachaturian wasan independent candidate for the US. Senate in

Louisiana's 1992openprimary. His

suit,filedshortly before the election,

contended thatthe $1,000limiton

contributions fromindividuals

(2 US.c. §44la(a)(1)(A» discriminatedagainsthis candidacy because it

prevented him fromraising sufficient

fundsto compete effectively against

the incumbent major-party candidate.'

He said that he had contribution

(continued onpage 6)

JMr.Khachaturian hadmadesimilar

claimsin an advisoryopinionrequestin

whichhe askedfor an exemption from the

$1,000limiton constitutional grounds. 1n

itsresponse, AO 1992-35, the Commission said that it did not havejurisdiction

to ruleon the constitutionality ofthe limit

but notedthat theSupremeCourt had

upheldthe limitin Buckley v, Valeo.

5
FederalElection Commission RECORD

Court Cases

(continuedfrom page5)

pledgesof $200,000 but couldonly

accept$75,000 underthe limit.

Thedistrictcourtcertified his

constitutional questions to thecourtof

appeals in accordance with2 U.S.C.

§437h.'

(Mr. Khachaturian alsoaskedthe

courtto prohibit theFECfrom

enforcing the $1,000limitagainsthim

and to orderLouisiana's Secretary of

Stateto placehis nameon the general

election balloteven if he lost the

primary. The courtdeniedthe motion.)

Remand by Court of Appeals

The courtof appeals remanded the

case to the lowercourtwithinstructionsto determine whether Mr.

Khachaturian's challenge was

frivolous in lightof Buckley v. Valeo.

In thatdecision, theSupreme Court

upheldthe $1,000contribution limit

as constitutional on its face and .

rejected claims that it discriminated

against independent andminor-party

candidates. In orderfor Mr.

Khachaturian to presenta plausible

challenge to the $1,000limitas

applied to his candidacy, the courtof

appeals saidthathe wouldat least

haveto provide factual support for his

argument that"the $1,000 limithad a

serious adverse effecton the initiation

and scopeof his candidacy."

Khaehaturian v.FEe, 980 F2d 330,

331 (5thCir. 1992) (enbane).

Dismissalby District Court

ThedistrictcourtsaidthatMr.

Khachaturian "fai1[ed] to comeeven

close"to alleging factssuggesting that

amounts in excessof the$1,000limit

wouldhaveaffected theoutcome of

the election. The courtconcluded:

'Section 437h states: "Thedistrictcourt

immediately shallcertifyall questions of

constitutionality ofthis[Federal Election

Campaign] Act to the UnitedStates court

ofappealsfor the circuitinvolved, which

shallhearthe mattersitting en bane."

6

"The lawis clear...that the $1,000

campaign contribution limit applies to

minorpartycandidates....Asa matter

oflaw, theplaintifffails to raisea

colorable constitutional claim."The

courttherefore granted the FEC's

motion to dismiss. (No. 92-3232,

SectionF)+

FEC v,Political Contributions

Data, Inc. (PCD)

Reversing a district courtdecision,

the U.S. Courtof Appeals for the

SecondCircuit, on June 17, 1993,

found thattheFEC was liablefor

paymentof PCD's attorney'sfees

because the agency's position on the

"saleor use" restriction was not

"substantially justified."

The courtinstructed the district

courtto determine the appropriate

awardof feesand expenses.

The FEC has askedfor a rehearing

or a rehearing en bane.

I Background

The first two decisions in this

litigation (themerits phase) ruledon

theFEC's interpretation of the"sale

or use" restriction at 2 U.S.C.

§438(a)(4). That provision prohibits

anyone fromcopying information on

individual contributors fromFEC

reports and selling theinformation or

using it"for thepurpose of soliciting

I contributions or commercial pur-

. poses."

TheFECfiledsuit againstPCD

claiming that thecorporation had

violated the"commercial purposes"

prohibition through its saleof contributor lists compiled fromFEC

reports.

In 1990, the U.S.District Courtfor

theSouthern District of New York

foundthat theFEe's interpretation of

"commercial purpose"wasreasonable

andgrantedsummary judgmentto the

agency.'

I Federal Election Commission v.

Political Contributions Data, Inc., 753

F.Supp.1122 (SD.N.Y. 1990), rev'd, 943

F.2d 190(2d Cir. 1991).

August 1993

The courtof appeals, however,

reversed thatdecision in a 1991

ruling. The courtheldthat PCD's sale

of contributor listswaspermissible. In

the court's view, certain safeguards in

PCD's lists(i.e., the absence of street

addresses andphonenumbers and the

inclusion of a warning againstthe

prohibited use of listed information)

ensured that the listswouldbe used

for informative, ratherthan commercial' purposes. Thecourtfuriherfound

that theFEe's interpretation of

§438(a)(4) was "unreasonable" and in

conflict with the broaddisclosure

purpose of the Federal Election

Campaign Act.The courtinstructed

the district courtto dismiss the case.

TheCommission did not seek

Supreme Courtreview of thedecision.

PCDappliedto thedistrictcourt

for an awardof $55,022 in attorney's

fees and otherexpenses pursuant to

the EqualAccess to JusticeAct

(EAJA). In a July 1992 ruling.' the

district courtdeniedthe application on

the basisthatit had beenfiled late.

Evenif it had beenfiledon time the

courtheld,theapplication wouldhave

to be deniedbecause theFEe's

position on themerits was "substantially justified"forEAJApurposes.

PCDappealed.

Court of Appeals Ruling

on Attorney's Fees

In its June 1993decision, the threejudgecourt of appeals foundthat PCD

hadfiledits application for attorney's

feeswithin 30 daysof the "final

judgment," asreqnired underthe

EAJA. The courtsaidthat,in this

instance, thedate of "finaljudgment"

wasthe lastday theCommission

couldhave applied for a writof

certiorari withtheSupreme Court.

The courtof appeals alsoreversed

the district court'sruling that the

FEC's positionwas "substantially

'FederalElection Commission v.

Political Contributions Data, lnc., 807

F.Supp. 311 (SDN.Y. 1992),rev'd, No.

92-6240 (2d Cir.June 17,1993).
August1993

justified" underthe EAJA.

(Attorney'sfees must be awardedto

the prevailing nongovernment party

unlessthe court fmds the positionof

the federal agencyto have been

"substantially justified."28 U.S.C.

§2412(d)(l)(A).)

The courtfound that the rulingon

the meritsby the earliercourtof

appealspanel, whichfound the FEe's

interpretation to be "unreasonable,"

precludedthe currentpanelfrom

finding the agency's position"substantially justified" under the EAJA.

''Tl)isis so," the courtreasoned,

"because the legalstandards which

governedthe meritsphase of this

litigation are precisely those to be

appliedto the EAJA question."'.

New Litigation

Democratic Senatorial Campaign

Committee (DSCC) v. FEC

(93-1321)

The DSCC asks the court to fmd

that the FEC's dismissalof its

complaintwas contraryto law and to

directthe agency to take expedited

actionon the allegations.

The DSCCallegedthat the

NationalRepublican Senatorial

Committee (NRSC)had exceededthe

coordinated party expenditure limit

(§44la(d) limit)in connection with

the 1992Georgiageneralelection.

Althoughthe FEC's GeneralCounsel

had recommended that the Commission fmd reasonto believethe NRSC

had overspentthe limit, the Commission,in a 3-3 vote,failed to approve

the motion. With no likelihood of

breakingthe tie, the Commission

closedthe file.

The DSCC claimsthat the FEC

shouldhave pursued thecase and that

the dismissal wasinconsistent with

the statuteand withFEC advisory

opinions.

• 'The court relied onOregon Natural

Resources Council v. Madigan, 980F.2d

1330 (9th Cir. 1992).

U.S.DistrictCourtfor the District

of Columbia, Civil ActionNo. 93-

1321,June 25, 1993.

Dukakis v, FEC

Simonv.FEC

In these two cases,1petitioners

challengeCommission repayment

determinations. BothMichael

Dukakisand SenatorPaul Simon

receivedprimarymatchingfunds for

their 1988Presidential campaigns.

The FEe's fmal repayment determinationsrequire the DukakisCommittee to return $491,282to the U.S.

Treasuryand the SimonCommittee to

return $412,163.

Contending that the FEC failed to

notify them of their repayment

obligations withinthe three-year

statutory deadline, petitioners ask the

court whetherthe FEC is time-barred

from requiringany repayment.

Althougheach suit raises other

issuesunique to its case,petitioners

filed a joint motionaskingthe court to

consolidate the two cases, since the

rulingon the late-notification issue

couldresolvethe caseswithoutneed

to examinethe otherissues, should

the court rule in the petitioners' favor.

The court deniedthe motionon June

23, 1993, but agreedto schedulethe

cases on the same day and before the

same panel of judges.

U.S. Court of Appeals for the

Districtof ColumbiaCircuit, Civil

ActionNo. 93-1219;March 19, 1993

(Dukakis); Civil ActionNo. 93-1252;

April2, 1993(Simon).•

I Michael S.Dukakis andDukakis for

President Committee, Inc. V. FEC and

Paul Simon and Paul Simon forPresident

Committee, Inc. V. FEe.

FederalElection Commission RECORD

Advisory . Opinions

Advisory Opinion Requests

The requestsfor advisory opinions

(AORs) listed beloware available for

review and commentin the FEe's

Public RecordsOffice.

AOR 1993·10

Use of excess campaignfunds by

unsuccessful candidate. (Antonio J.

Colorado; June 28, 1993;6 pages)

AOR 1993·11

Disposition of fundstransferred from

nonfederal campaign committee to

1988 generalelectionlegal and compliancefund of publiclyfundedPresidential campaign. (Dukakis-Bentsen

Committee; June 29,1993; 3 pages)

AOR 1993-12

Contributions by nativeAmerican

tribe (unincorporated), whichenters

into"self-determination" contracts

withfederal agencyand also charters

commercial enterprises that may have

futurefederalcontracts. (Mississippi

Band of ChoctawIndians;July 2,

1993;2pages)

AOR 1993-13

Useof former Senator's excesscampaignfunds for scholarship program.

(WycheFowler for SenateCampaign

Committee; July 8, 1993; 2 pages)

AOR 1993-14

Application of state campaignfinance

law to federal accountof stateparty

committeeand to contributors to that

account. (Rhode IslandDemocratic

StateCommittee; July 13, 1993;

3 pages plus attachments)

AOR 1993-15

Statusof funds raisedby Presidential

committee to defraylegal fees in

connectionwithDepartmentof

Justiceinvestigation of committee's

fundraising consultant. Tsongas

Committee, Inc.; July 13, 1993;

5pages~usatt~hments).

7
FederalElection Commission RECORD

Compliance

MUR3234

Party Committee Solicitation

Triggers FederalCommittee

Status

In MUR 3234,a party committee

becamea federal political committee

by spending over $1,000for a

solicitation featuring a U.S.Senate

candidate. The committee's failure to

registerand reportas a federal

political committee, to include a

disclaimer in the solicitation and to

comply withthe federal restrictions

on contributions resulted in a $30,000

civilpenalty.

The committee, which nominated

candidates for both federal and

nonfederal office,wasregistered as a

partyorganization witha state

government but not withthe FEC.Its

solicitation waspart of a newspaper

advertisement thatfeatured a picture

of an incumbent Senator(a candidate

forreelection) andcriticized his

stanceona specific issue. The ad said

thatresidents of the state "shouldbe

represented in Washington by men

and women whosupportour values-

.not oppose them."In requesting

contributions, the ad pledged "to be

yourvoice"and to let the Senatorand

like-minded incumbents "know that

we remember how they voted"on the

issuediscussed in the ad.The committeepaid over $42,000 for the ad

and laterspentabout$3,500for a

directmailsolicitation with similar

content.

TheCommission determined that

thepartycommittee had becomea

federal political committee whenit

madeexpenditures in excess of

$1,000for the newspaper ad. This

determination was basedon the fact

that the ad solicited moneyto be used

to influence federal elections and on

11CPR 102.5(a)(3). Underthat

regulation, a partycommittee solicitationthatmentions a federal candidate

is presumed to be for the purpose of

influencing a federal election, and

contributions resulting fromsuch

solicitations are subject to the limitationsand prohibitions of the Federal

Election Campaign Act.

The committee'sfailure to register

as a federal political committee and to

file regular reports was a violation of

2 U.S.C. §§433(a) and434(a).

The committee alsoviolated

§44ld(a) by failing to publishthe

required disclaimer in itssolicitations.

("Paidfor by [name of committee]

and not authorized by anycandidate

or candidate'scommittee.") Federal

law requires disclaimers on all

publicly advertised solicitations for

contributions.

Finally, thepartycommittee

received and spentcontributions that

werepermissible under statelaw but

prohibited or excessive underfederal

law, a violation of §§44la and

44lb(a).

Underthe termsof the conciliation

agreement, the party committee

agreedto paythe $30,000 penalty; to

register and me reports as a federal

political committee; and to comply

withthe accounting and allocation

procedures forfederal and nonfederal

activity (II CPR 102.5(a) and

106.5)....

Federal Register

Copies ofFederal Register notices

are available from thePublic

Records Office.

1993-15

Filing Dates forTexas Special

Runoff Election (58 FR29413,

May 20, 1993)

1993-16

Compliance Procedures: 11 CPR

Pans 4,5, 102 and 111; Notice of

Proposed Rulemaking (58 FR

36764, July 8, 1993)

August1993

MURs Released to the Public

Listedbelow areFECenforcement

cases(Matters UnderReview or

MURs) recently released for public

review. The listis basedon the FEC

pressreleases of May28, June 21, 23

and 29, andJuly 12and 19, 1993.

Fileson closedMURsare available

forreviewin the Public Records

Office.

MUR2598

Respondents: (a)TexasRepublican

Congressional Committee, Henry

Santamaria, treasurer; (b)Texans for

BeauBoulter, DonaldH. Wills,

treasurer; (c)Friends of DickAnney,

RickWoolfolk, treasurer (TX)

Complainant: FECinitiated (audit

for cause)

Subject: Excessive and prohibited

contributions; failure to disclose or

forward earmarked contributions;

contribution fromnonfederal account;

failure to disclose complete and

accurate debt information

Disposition: (a) $40,000 civil

penalty; (b) $250civil penalty;

(c) $1,500 civil penalty

MUR2765

Respondents: (a)Missouri Republican StateCommittee-Federal Account, Harvey Tettlebaum, treasurer;

(b) Southeastern Missouri University

Foundation; (c) Danforth for Senate,

Melvin Bahle, treasurer (MO);

(d)Southeast Missouri StateUniversity; (e) Friendsof BillEmerson, John

Janssen, treasurer (MO); (f) BushQuayle '88, Inc.,Stanley Huckaby,

treasurer (DC); (g)GeorgeBushfor

President, Inc.,Stanley Huckaby,

treasurer (DC); (h)Quayle for Vice

President-1988, William Neale,

treasurer (DC); (i)Congressman

William Emerson(MO)

Complainant: JanetSntith(MO)

Subject: Campaign rally; in-kind,

excessive andprohibited contributions

Disposition: (a)Probable causeto

believe; attempted to conciliate but

tookno further action; (b)reason to 4

believe; attempted pre-probable cause
August1993

conciliationbut took no further

action; (c)-(e)reason to believe but

took no furtheraction;(f) took no

action;(gj-Ii) no reason to believe

MUR3212

Respondents: Durenberger '94

VolunteerCommittee, Delwyn Olson,

. treasurer(MN)

Complainant: FEC initiated

Subject: Excessive contributions;

failure to file 48-hour notices

Disposition: $12,000civil penalty

MUR3385

Respondents: Bush-Quayle '88, J.

Stanley Huckaby, treasurer (VA)

Complainant: FEC initiated (Presidential audit)

Subject: Overchargingpress and

Secret Service on air transportation

Disposition: $10,000 civil penalty

(andpressreimbursement of$133,818)

MUR 3439/3370

Respondents (all in MA): (a) Gerry

E. Studds; (b) Studds for Congress

Committee,MargaretD. Xifaras,

treasurer; (c) Massachusetts Democratic StateCommittee-Federal Funds

Account, Ronald M. Shaich, treasurer

Complainant: Leon J. Lombardi,

chairman,Massachusetts Republican

Party (3370); Jon L. Bryan (3439)

.Subject: Disclaimer;Statementof

Organization; coordinated party

expenditures; incompletecontribution

identification

Disposition: (a) No reason to believe;

(b) reason to believebut took no

further action; (c) $6,500 civil penalty

MUR3455

Respondents: (a) WaffleHouse, Inc.,

Joe W. Rogers, president(GA);

(b) CoverdellSenate Committee,

Marvin Smith, treasurer (GA)

Complainant: James D. Hogan, Jr.

(GA)

Subject: Corporate contributions;

fundraising solicitation

Disposition: Reason to believe but

took no further action(sent admonishment letter)

MUR3465

Respondents: Committee to Elect

Bradley,Gerald A. Bradley, treasurer

(ll..)

Complainant: FEC initiated

Subject: Failure to me 48-hour

notices

Disposition: $2,000 civil penalty

MUR3483

Respondents: (a) George Bush (TX);

(b) Bush-Quayle '92 Primary Committee,1. Stanley Huckaby (DC);

(c) KXIC Radio (IA); (d) U.S. Small

Business Administration (DC)

Complainant: Gerald B. Wetlaufer

(IA)

Subject: ill-kind contributions

Disposition: (a)-(d)No reason to

believe

MUR3527

Respondents: (a) Cincuentenario

Partido Popular Democratico(PR);

(b) Anita Perez Ferguson (CA);

(c) Anita for Congress,Marcelline

Curran,treasurer (CA)

Complainant: Kevin Sweeney (CA)

Subject: Excessive contribution;

inaccuratedisclosure; failure to

designateprincipal campaign committee withintime limits

Disposition: (a) Reason to believe but

took no further action; (b)-(c) $1,000

civil penalty

MUR3528

Respondents: (a) Mike Synar (OK);

(b) Mike Synar for CongressCommittee, Gene Moffitt, treasurer(OK)

Complainant: W.A. Edmondson

Subject: Failure to submit employer

and occupationinformationfor

certain contributions

Disposition: (a) No reason to believe;

(b) $2,000 civil penalty

MUR3542

Respondents: (a) Buffa for Congress

'92, Betty Presley, treasurer (CA);

(b) GreensburghGroup (CA)

Complainant: Gene Ferguson,

campaign manager,Congressman

Dana Rohrabacher(CA)

Subject: Failure to reportdebts;

corporate and excessivecontributions

FederalElection Commission RECORD

Disposition: (a)-(b)No reason to

believe

MUR3545

Respondents: Charles A. Forrest,ill

(Ml)

Complainant: Megan Jane O'Neill

(MI)

Subject: Confidentiality

Disposition: No reason to believe

MUR3547

Respondents: The DemocraticParty

of ArkansasFederal Account,GregB.

Brown, treasurer

Complainant: FEC initiated

Subject: Failure to file report on time

Disposition: $1,200 civil penalty

MUR3551

Respondents: (a) Committeeto Elect

Bea Herbert, Janet Van Boxtel,

treasurer (CA); (b) BeatriceHerbert

Complalnaut: StephenB. Thome

(CA)

Subject: Disclaimer;failure to file

disclosurestatements

Disposition: (a) Reason to believe but

took no further action (disclaimer); no

reason to believe (disclosure); (b) no

reason to believe

MUR3573

Respondents (all in MI): (a) Committee to Elect Megan O'Neill,

LeonardC. Gorz, treasurer;et al. (b)-

(d)

Complainant: CharlesA. Forrest, ill

(MI)

SUbject: Corporateand excessive

contributions; improperreporting;

failureto file reports at state level

Disposition: (a) Reason to believebut

took no further action (disclosureat

state level); no reason to believe

(other allegations); (b)-(d) no reason

to believe

MUR3576

Respondents: Linda Bean for

Congress Committee.James W.

Gorman, treasurer(Mli)

Complainant: Maine Democratic

State Committee,Jo Karr, chairman

Subject: Failure to file report

(continued on page10)

9
FederalElectionCommission RECORD

Compliance

(continued from page 9)

Disposition: Reason to believe but

took no further action; sent admonishment letter

MUR3588

Respondents: (a) Les AuCoin For

SenateCommittee,ClintonW. Cook,

treasurer(OR); (b) RealtorsPolitical

Action Committee,DaleColby',

treasurer(IL); (c) Les AuCoin (OR)

Complainant: OregonRepublican

Party

Subject: Independentexpenditures

Disposition: (a)-(c) No reason to

believe

MUR3605

Respondents: (a) Committeeto Elect

Andy Johnson, AndrewE. Johnson,

treasurer(FL); (b) WVOJ Radio (FL)

Complainant: RodneyG. Gregory,

general counsel,Friendsof Corinne

Brown(FL)

Subject: In-kind contributions

Disposition: (a) Reason to believe but

took no further action; send admonishmentletter; (b) no reasonto believe

MUR3615

Respondents: (a) Clinton/Gore '92

Committee, RobertA. Farmer,

treasurer(AR); (b) WJXT-TV (FL)

Complainant: Don BrewerJr.,

chairman, Duval CountyRepublican

ExecutiveCommittee(FL)

Subject: In-kindcontributions

Disposition: (a)-(b) Reason to believe

but took no furtheraction

MUR3624

Respondents: (a) Bush-Quayle '92

PrimaryCommittee,1. Stanley

Huckaby,treasurer(DC); (b) BushQuayle '92 GeneralCommittee,1.

StanleyHuckaby,treasurer(DC);

(c) WET Radio (NC)

Complainant: WalterH. Shapiro

(NC)

Subject: In-kind contributions

Disposition: (a)-(c) No reason to

believe

10

MUR3660

Respondents: Flower& Garden

Magazine (MO)

Complainant: Dr. Philip W. Ogilvie

(DC)

Subject: In-kind contributions

Disposition: No reason to believe

MUR3706

Respondents (all in PA): (a)Lynn

Yeakel; (b) Lynn Yeakelfor U.S.

SenateCommittee,Sidney

Rosenblatt, treasurer; et al. (c)-(f)

Complainant: William D. White

(PA)

Subject: In-kind contributions

Disposition: (a)-(f) No reasonto

believe

MUR3709

Respondents: (a) Lynn Yeakel;

(b) Lynn Yeakel for U.S. Senate

Committee,SidneyRosenblatt,

treasurer; et al. (c)-(s)

Complainant: WilliamD. White

(PA)

Subject: In-kind contributions

Disposition: (a)-(s)No reason to

believe

MUR3710

Respondents: (a) Arlen Specter

(PA); (b) Citizens for Arlen Specter,

StephenJ. HanneLin, treasurerCPA);

(c) WPXI-TV (PA)

Complainant: WilliamD. White

(PA)

Subject: In-kind contributions

Disposition: (a)-(c)No reason to

believe

MUR3729

Respondents: Friendsof Cliff

Stearns,Frank Stafford, treasurer(FL)

Complainant: PhilA. Denton (FL)

Subject: Failureto file reports

Disposition: No reason to believe

MUR3737

Respondents: Auction Markets PAC

of the ChicagoBoard of Trade,

GeorgeSladoje,treasurer(lL)

Complainant: FEC initiated

Subject: Excessivecontributions;

incompletedisclosure

Disposition: $4,500 civilpenalty

August1993

MUR3739

Respondents: Bob Krueger Campaign, Nina Guinn, treasurer(TX)

Complainant: Jay Velasquez,

NationalRepublican Senatorial

Committee(DC)

Subject: Disclaimer

Disposition: No reason to believe

MUR3743

Respondents: Friends of Dan Miller,

Mary CathrynHaller, treasurer(FL)

Complainant: FEC initiated

Subject: Failure to file 48-hour

notices

Disposition: $3,000 civil penalty

MUR3745

Respondents: (a) Mark Neumann

(WI); (b) Citizens for Neumann '93,

Gail E. Hansen, treasurer(WI)

Complainant: Genie Norris, executive director,Democratic Congressional CampaignCommittee (DC)

Subject: Failure to designateprincipal campaign committeewithintime

limits

Disposition: (a)-(b)Reason to believe

but took no further action

MUR3753

Respondents: Zenkich for Congress

Committee,EliasR Zenich,Jr.,

treasurer(lL)

Complainant: FEC initiated

Subject: Failure to file 48-hour

notices

Disposition: $2,900civil penalty

MUR3755

Respondents: Jerry Huckaby ReElection Committee,James Moore,

treasurer(VA)

Complainant: FEC initiated

Subject: Failure to file 48-hour

notices

Disposition: $4,000civil penalty

MUR3762

Respondents: Friendsof Blackstock

for Congress, Elaine Blackstock,

treasurer(OK)

Complainant: FEC initiated

Subject: Failureto file 48-hour

notices
August1993 FederalElection Commission RECORD

(If ordering morethan25 copies, pleaseinclude yourphonenumber.)

(Seearticles on pages1 and2.)

~----------------------- Order Fonn for Candidate Guide and FEC Regulations

Name

Organization

1993-3: Retroactive reallocation of

1991-92 activity, 5:1

1993-4: Electronic payment of bills

through computer, 6:5

1993-5: 1992contributions misplaced

at post office,6:6

1993-6: Use of excess fundsby

former Housemember, 7:6

Court Cases

FECv.

- America's PAC, 4:10

- International FundingInstitute, 1:2;

5:2

- Miller,6:8

- NationalRepublican Senatorial

Committee(93-0365), 6:8

- People& Politics, Inc., 3:3

- PoliticalContributions Data, Inc.,

8:6

v.rec

- Common Cause (92-0249 (JHG),

4:10

- Common Cause(92-2538),1:8; 8:5

- Democratic SenatorialCampaign

Committee(93-1321), 8:7

- Dukakis,8:7

- Khachaturian, 8:5

- LaRouche(92-1100), 6:8

- LaRouche(92-1555), 1:8

- NationalRifle Association (92-

5078),4:10

- Simon,8:7

- Spannaus (91-0681), 6:7

- White (93-771), 6:8

U.S.SenatorJohn SeymourCommittee v. DianneFeinstein, 1:8

Weber, et al. v. Heaney,et al., 8:1

Reporting

Last-minute contributions: 48-hour

reporting, 4:7

Reporting problems,letter to new

candidates, 4:8

Schedule for 1993,1:3; 6:1

Specialelectionsin California,

Mississippi, Ohio, Texas and

Wisconsin, 3:1; 4:7; 6:4

800Line Articles

Creditcard contributions, 5:5

Party committee allocation: carrying

debtsfrom previouselectioncycle,

2:7

$25,000annual limit,4:2

No. ofCopies

No. of Copies

Zip Code

Index

Advisory Opinions

1992-38: Loan fromPresidential

campaign's legal and compliance

fund to publicfundingaccount, 1:6

1992-40: Commissions earned by

stateparty committees, 2:5

1992-41: Solicitation of members, 3:3

1992-42: Bank depositlost in mail,

3:3

1992-43: Preemption of state law's

fundraising restrictions, 3:4

1992-44: Qualifying as nationalparty

committee, 6:5

1993-1: Campaign's rentalof storage

unit fromcandidate, 4:8

1993-2: Application of party spending

limitsto Texas specialrunoff,4:9

The first number in each citation

refers to the "number" (month) of the

1993 Record issue in which the article

appeared. The second number, followingthe colon, indicates the page numberin that issue.

State

Campaign Guide for Congressional Candidates

and Committees

Send your order to: FederalElectionCommission

Information Division

999E Street, NW

Washington, DC 20463

Phone Number

Address

City

1993Edition of FEC Regulations(11CFR)

Disposition: Reason to believebut

took no furtheraction

MUR3773

Respondents: Deloitte& Touche

Federal PAC,WadeWilliams,

treasurer(DC)

Complainant: FEC initiated

Subject: Failureto file reporton time

Disposition: $850 civil penalty

MUR3777

Respondents: Committee to ElectDr.

James Lewisto Congress, Margaret

Z. Beard,treasurer(AL)

Complainant: FEC initiated

Subject: Failureto file 48-hour

notices

Disposition: Reason to believebut

took no furtheraction(sent admonishment letter)..

11
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