FEDERAL ELECTION COMMISSION

May 1991 999 E Street NW Washington DC 20463 Volume 17, Number 5

ALlOCATlrn RULES: FEe SEERS <x:m'IENrS rn

PETITIOO 'IO AMEND RULES

The Co~ssion recently made available

for public comment a Notice of Availability

concerning a rulemaking petition on the

FEC's allocation rules. The petition,

which was filed by the Association of State

Democratic Chairs (ASDel, requests recon~

sideration of several aspects of the

allocation rules, which became effective

January 1, 1991.

For copies of the petition, call the

FEe's Public Records Office (800/424-9530

or, locally, 202/376-3140). The Commission

plans to send the notice to all registered

party committees and to those who submitted

comments on the FEC's allocation rulemaking.

Public comments are due by the end of

May and must be submitted in writing to

Susan E. propper, Assistant General

counsel, 999 E Street, NW, washington DC,

20463.

In its petition for rulemaking, ASDC

specifically addresses the rules for state

and local party committees that maintain

separate federal and nonfederal accounts.

ASDC asks the Commission to consider

changes in the following areas:

o calculation of the Ballot composition

Ratio. This is the ratio used by state

and local party committees to allocate

administrative and generic voter drive

expenses. 11 CFR 106.5(d). ASDC recommends that the Commission reconsider the

number of statewide and local offices

that may be included in the ratio. ASOC

also suggests that partisan statewide

judicial offices and ballot questions be

included in the ratio.

a payment Procedures. under the allocation

rules, all payments for allocated

expenses must be paid from the federal

account (or a federal allocation account). The nonfede cal account must

transfer the nonfederal portion of an

expense to the federal account. 11 CFR

106.5(9). ASDC recommends two alternative payment procedures for state party

committees, one involving separate payments fram each account, and one authorizing payment from the nonfederal account

and ceimbursement by the federal account.

ASDC also recommends state parties be

allowed to pay fundraising expenses from

the nonfederal account, with one reimbursement from the federal account made

after the event.

o Allocation of Administrative Expenses.

under the allocation rules, party committees with federal and nonfederal accounts

must allocate all their administrative

expense5. 11 CPR 106.5(d). ASDC

recommends that state party committees be

required to allocate administrative

(continued)

RJGJIATIOOS

1 Petition on Allocation Rules

2 SUspension of Convention Rulema~ing

SPECIAL ELECTIOOS

2 Texas Runoff: Change in Mailing Date

LOOISLATIOO

3 Public Funding Program

3 1991 Legislative Recommendations

3 IT 1992 Budget Request

4 ADVISORY OPINIClf5

mJRT CASES

7 FEC v. Working Names, Inc.

7 FEC v. Dennis smith for Congress

7 FEC v. political contributions Data

7 FEC v. Mann for Congress Committee

8 FEC v. Faucher and MRLC

STATISTICS

8 House and Senate Campaigns

10 party committee Activity

11 PUBLI~TIONS: 1991 Disclosure Directory

11 INDEX
Federal Election Commission, 999 E street, ~, Washington, OC 20463

900/424-9530 202/376-3120 202/376-3136 (TOD)

Volume 17, Numbe

INote, however, that the coverage dates f

filing 48-hour notices on contributions

made in connection with the runoff electio

have been adjusted. contributions of

$1,000 or more received by authorized

commdttees in connection with the special

runoff between May 5 through May 15 are

subject to the 48-hour notice requirement

Authorized committees must file notices o

such contributions within 48 hours of the

committee's receipt of the contribution.

For further information on 48-hour notice

see 11 CFR 104.5(f) and the April 1991

Record, page 3.

TEXAS SPECIAL RUJ«)FF:

0mNGE IN MAILIOO DATE

The Commission has changed the postma

date for the pre-election report for the

May 18 Texas special runoff. The new

postmark date--May 6--applies only if the

report is sent by registered or certified

mail. (Reports not sent by registered or

certified mail must be received in the

filing office by May 6.) Formerly, the F

had published the registered/certified

mailing date as May 3.

The date was changed because the deci

sion to hold a runoff will be made after

the results of the May 4 special election

are counted. The runoff will be held onl

if no candidate wins a majority of the

votes in the May 4 election. Committees

will therefore not know if they need to

file the pre-runoff report until May 5,

when the election results will be available.

The other reporting dates for the Tex

special elections that were published in

the April 1991 Record have not been

changed.

Walter J. Stewart, secretary of the senate,

Ex Officio Commissioner

Dennald K. Anderson, Clerk of the House of

Representatives, Ex Officio Commissioner

2

FEDERAL ELECTION COMMISSION

Jolm warren McGar~. Chairman

Joan D. Aikens, vice Chairman

Lee Ann Elliott

'lhomas J. JosefiaJc.

Danny L. .McDonald

Scott E. 'lbomas

May 1991

expenses only during the second half of

the federal election year.

o Recordkeeping and Reporting Requirements.

ASDC recommends various changes to the

recordkeeping and reporting requirements

for allocated expenses found at 11 CFR

104.10.

1The original Notice of Proposed Rulemaking

was published in the Federal Register on

August 22, 1990. See 55 FR 34267; see also

the October 1990 Record.

FEe SUSPENDS RULEKl'WtING CN

PUBLICLY FlmNCED PRESIDENTIAL

M::MINATIOO CXJMiHl'ICNS

On March 28, 1991, the COftUTIission

decided to suspend taking further action on

proposed revisions to the Presidential

nominating convention regulations until

after the 1992 conventions have taken

place. The agency published a Federal

Register Notice to this effect on April 9,

1991 (56 FR 14319).

In the meantime, the current convention

rules remain in effect. Additionally, the

Commission will rely on advisory opinions

that have been issued since these rules

were promulgated and on policy decisions

made through the audit process for past

convention committees.

In letters to the Republican and Democratic National Committees, the Commission

urged them to comply on a voluntary basis

with the magnetic media rules found at

11 CFR 9003.6 and 9033.12. Right now,

these rules apply only to publicly funded

candidates, but convention cOftUTlittees'

compliance with them will help expedite the

audit process. The Commission also

requested that the national committees file

copies of the signed contracts between the

convention committees and the cities chosen

to host the 1992 conventions.
May 1991 FEDERAL ELECTION COMMISSION Volume 17, Number 5

FEe TFSTIFIES '!HAT I.EX;ISrATIVE AC'I'ICIf

NEEDED TO SAVE PUBLIC FU1'IDING PRCXiRNl

In testimony before the Senate Cornmittee on Rules and Administration, ~EC

Chairman John Warren McGarry said that the

Presidential public funding program will

collapse if Congress does not take action

to amend the law. In his March 6, 1991,

testimony, Chairman McGarry said that the

public funding program should survive the

1992 race but will definitely run out of

money in the 1996 contest, unless congress

acts. The FEe projects a shortfall of well

over $100 million in 1996.

Chairman McGarry pointed to a "structural flaw" in the public funding law:

payouts from the Presidential Fund made to

qualifying candidates and party committees

are adjusted for inflation, while the onedollar tax checkoff has remained the same

since 1974. "The structural flaw is so

fundamental that even if" participation [in

the checkoff program) increased to its

highest previous rate, the Fund would still

run short in 1996. In the long run, the

Fund was doomed to insolveney. The long

run will come to pass in 1996 unless the

statutory flaw is corrected."

The Chairman mentioned three possible

actions Congress could take to correct the

problem: adjust the dollar checkoff for

inflation; authorize traditional appropriations for the program; or treat the Fund

as a nondiscretionary account. (In its

1991 legislative recommendations, the FEC

reiterated these remedies and suggested one more~ see next article.)

e.t:mIISSICN RECOflII1ENDS

<:::tIAR}ES IN ELEC1'ICN LAW

On March 28. 1991, the FEC submitted to

the President and the Congress its annual

list of recommendations for changes in the

federal campaign finance laws. The Commission believes that the recommendations, if

adopted, would enhance the agency's ability

to administer and enforce the Federal

Election Campaign Act and the Presidential

public funding statutes.

Included in the package of 38 recommendations were three new proposals suggesting

that Congress:

a Clarify that the public funding statutes

prohibit both the making and acceptance

of contributions by Presidential

candidates who receive full public

financing in the general election;

3

o Clarify whether authorized committees of

candidates may make independent

expenditures on behalf of other

candidates; and

o Require that contributions solicited by

unauthorized committees be made payable

to the name of the committee, rather than

to the name of a fundraising project.

Of the remaining recommendations, which

the agency also submitted in 1990, several

sought changes in the Presidential public

funding program. one proposal suggested

ways Congress could resolve the projected

shortfall in the Presidential Election Campaign Fund. (FEe Chairman McGarry offered

a similar proposal in his recent testimony;

see previous article.) A 1991 modification

to the proposal suggested a new remedy:

Reducing disbursements from the Fund by

matching a smaller amount of money in the

primaries or by not increasing the

convention and general election payouts by

the full inflation rate.

The Commission is required by law to

submit recommendations each year "for any

legislative or other action the Commission

considers appropriate .•.. " 2 U.S.C.

§438(a)(9). The recommendations will be

included in the 1990 Annual ReIX'rt, which

will be published in June 1991. In the

meantime, copies of the recommendations are

available from the Public Records Office.

Call 800/424-9530 (please ask for Public

Records) or, locally, 202/376-3140.

FEe PRESENl'S FISCAL YEAR 1992 BUDGET~T

Vice Chairman Joan D. Aikens testified

in support of the FEC's $18.8 million

budget request for riscal Year 1992 in her

March 1991 appearances before Congressional

committees. Mrs. Aikens stressed that the

request "represents the minimal level of

funding necessary to enable the FEC to

properly address the upcorrUng workload

related to the 1992 Congressional and

Presidential elections." The Cormnission's

$18.8 million request is a 9.6 percent

increase over the agency's FY 1991 funding

($17.15 million). Mrs. Aikens cited four

major areas of concern in the FY 1992

budget:

o The need to conduct timely audits of

committees receiving public funding, as

required by law;

o The increased demand on the FEe's disclosure operations because of the

projected growth in committees' financial

activity;

o The additional workload generated by

increased financial activity and new

(continued)
FEDERAL ELECTION COMMISSION

May 1991

regulations and reporting requi rements;

and

o The need to maintain effective enforcement as the Commission encounters higher

workloads and increasingly complex cases.

Vice Chairman Aikens noted the agency's

interest in maintaining its information and

disclosure programs, including the computerized disclosure data base used by the

media, academia and the political community. The Cormnission also needs funds to

begin replacing its outdated and failing

microfilm equipment.

She testified before the subcommittee

on Elections of the Committee on House

Admdnistration and the House Committee on

Appropriations' Subcommittee on Treasury,

Postal Servi~e and General Government.

ADVISORY OPINIOO' RBJJESTS

Recent requests for advisory opinions

(AORs) are listed below. The full text of

each !\OR is available for review and comment in the FEC's Public Records Office.

AOR 1991-9

Retroactive interest charged on personal

loans made by candidate to his campaign.

(Date Made Public: March 26, 1991; Length:

11 pages)

llOR 1991-10

Candidate's use of assets jointly held with

spouse to obtain campaign funding. (Date

Made Public: March 26, 1991; Length: 10

pages)

AOR 1991-11

Application of FECA to activities undertaken to determine viability of an environmental poli tical party. (Date Made Public:

April 2, 1991; Length: 1~ pages)

roR 1991-12

Affiliation between candidate's former

Presidential exploratory committee and

current Congcessional committee. (Date

Made Public: April 5, 1991; Length: 6

pages)

1IOR 1991-13

Affiliation between labor organization PAC

and PACs of two other labor organizations

that formed the first organization. (Date

Made Public: Apdl 9, 1991; Length: 8

pages plus attachments)

4

Volume 17, Numbe

l\DVISORY OPINIOO Sl.IMMARIES

NJ 1991-1: Credit card Contributions to

Nonconnected PAC of Federal

Contractor Partnership

The Deloitte & Touche Federal Political

Action Committee, a nonconnected committe

may request that the firm's partners char

contributions to the Committee on their

personal credit cards. Although the part

nership is a federal government contracto

this proposal will not result in prohibit

contributions from the firm because neith

the contributions nor the related solicit

tion costs will be paid from partnership

funds or accounts.

Proposal

The Committee is an AmeriCan Express

"establishment" for purposes of accepting

credit card contributions. The Committee

plans to send an annual solicitation to a

partners requesting that they charge thei

contributions on their American Express

cards. The solicitation will ask each

partner to sign and return a card authori

ing the charge to his or her account. Th

authorization will remain 'effective until

revoked in writing by the contributor,

which he or she may do at any time.

(Through a separate arrangement betwe

American Express and oeloitte & TOuche,

partners may obtain an American Express

card imprinted with the name of the firm;

these accounts, however, are personal--no

partnership--accounts, and Deloitte &

Touche is not responsible or liable for

bills charged to them.)

contributions will actually be charge

to contributors' American Express account

in December of each year (although an

individual may elect to have installments

charged on a monthly basis). Because of

this, the contributor authorization may b

signed and returned some months before th

charge to the contributor's account.

In addition to the partners, the Committee may decide to solicit firm employe

below the partner level by informing them

probably through a newsletter, that they

may charge contributions on their America

Express cards.

Federal Contractor Prohibition

Although federal government contracto

are prohibited from making contributions,

individual partners and employees of a

partnership that is a federal contractor

may make contributions in their own name

from their personal assets. 2 u.s.c.

§441c(a)(1); 11 CFR 115.2, lI5.4(b) and

(c). In this case, a prohibited
FEDERAL ELECTION COMMISSION

•

I

"e

May 1991

contribution from a federal contractor will

not result because:

o The Committee's funds--not the accounts

of the partnership--will be used to pay

charges, fees and other cOfts related to

the proposed solicitation; and

o The partners and employees must use their

own non-partnership accounts to pay their

American Express bills.

Contdbutions Made by Credit card

In the past, the Commission has determined that contributions made by credit

card are permissible. ADs 1990-4 and 1978-

68. In this case, the Committee will avoid

a prohibited corporate contribution from

American EXpress because the agreement

between the Committee and the corporation

complies with the usual and normal practice

of American Express. 2 u.S.C. §441b(a);

11 CFR 114.2(b); see also 11 CFR lOO.7{a)

(1)(iii)(A).

Deferral of Charge

The possible delay of several months

between a contributor's authorization of

the contribution and the actual charge to

his or her account is permissible because

the contributor may revoke the authorization at any time. See ADs 1989-26, 1986-7

and 1981-14. However, because of the

delay, the date the contribution is made by

the contributor--and received by the Co~

mittee--is the date the Committee transmits

to American Express the documentation that

authorizes the credit to the Committee's

account and the charge to the cardholder's

account. See 11 CFR 110.I(b)(6). This

differs from the situation in AD 1990-4,

which provided that a credit card contribution was received when the committee received the donor's authorization to charge

it to his or her account. In that case,

however, the charges were not deferred.

(Date Issued: March lB, 1991; Length:

6 pages)

lCorporations--including federal contractors--are permitted to use treasury funds

to pay for the establishment, administrative and solicitation costs of their

separate segregated funds. 11 CFR ll4.l(a)

(2)(iii) and 115.3. This exemption does

not, however, apply to partnerships, whose

payments for such costs on behalf of a

committee would be contributions. AO 1990-

20 and opinions cited therein; see also

California Medical Association v. FEC, 453

U.S. 182 (1981).

5

Volume 17, Number5

N) 1991-2: Disposition of Possibly Illegal

FUnds Raised 'lhrough 900-Line

Telephone calls

MCI Telecommunications Corporation (Mer)

may forward proceeds of 900-line calls to

Fourth Media, a telephone service bureau,

and ultimately to the David Duke for U.S.

Senate campaign, even though the funds may

not have been raised in compliance with

provisions of the Federal Election Campaign

Act (the Act) and FEC regulations. As a

common carrier, MCI is not responsible for

ensuring that the funds are in compliance

with the law; that obligation rests with

the campaign and the service bureau. Mel

may not, however, forward proceeds of calls

that have not actually been billed. These

funds may not be used in connection with a

federal election at this time, pending

further developments in a court case.

Background

MCI entered into agreement with Fourth

Media that permitted the service bureau to

use MCI' s network for gOO-line calls. MCl

also agreed to bill callers and collect

proceeds for 900-1ine calls through

arrangements with local exchange carriers

(LECs) • MCI would provide the LEC wi th a

list of the telephone numbers from which

900-line calls were placed, and the LEC

would use this information to prepare its

monthly customer billing statements. South

Central Bell (5GB), the LEC servicing 900-

line calls to the Duke campaign, would pay

Mcr for amounts receiyable (i.e., charges

for 900-1ine calls) after deducting uncollectible calls and making other adjustments. see usually paid MCI before the

related telephone bills had actually been

paid by the callers. MC! would deduct its

charges from the funds forwarded by SCB and

then remit the remaining proceeds to the

service bureau. The service bureau, in

this case Fourth Media, would then forward

the funds to its customer after deducting

its charges.

The Duke campaign became a customer of

FOUrth Media in June 1990. In mid-August

1990, however, SCB decided to stop providing billing and collection services for

calls made to Duke campaign 900-1ine

numbers, based on a company policy against

providing 900-line service for political

campaigns or charitable fundraisers. (The

service was discontinued for all calls

placed after mid-August.)

5CB has paid MCl for 900-line calls

that were apparently billed between June 23

and August 22, 1990. Mel has not yet forwarded the proceeds attributable to the

Duke campaign because of its concern that

(continued)
May 1991 FEDERALELECTION COMMISSION

Fourth Media and the campaign may not have

complied with certain legal requirements

(such as screening calls from prohibited

sources and including the proper disclaimer

on 900-1ine advertising).

FEe Response

Under the advisory opinion process, the

Commission cannot respond to questions

raised about the activities of third

parties. 11 eFR 112.1{b). Therefore, the

Commission could not determine whether

Fourth Media or the Duke campaign had

violated the Act or FEC regulations. If

MCI wished to seek such a deterndnation, it

would have to file a complaint with the

Commission. See 2 U.S.C. §437g and 11 CFR

Part 111.

MCl may, however, forward proceeds for

calls that have already been billed,

regardless of whether Fourth Media and the

Duke campaign have complied with the Act

and regulations in their fundraising venture. In AD 1990-14, which pertained to

AT&T, the Conmission concluded that common

carriers are only required to follow their

usual and nonna! procedures at their usual

and normal charges when providing 900-line

services for political fundraising. other

compliance obligations rest with the

committee and the service bureau.

(The Commission cautioned that AT&T had

to safeguard against situations in which an

adverse event would prompt a large number

of callers to refuse to pay the 900-line

charges. By forwarding funds that would

never be paid, AT&T would be in the

position of advancing corporate funds

rather than contribution proceeds.)

With respect to any proceeds held by

MC! that have not yet been billed by sea,

MCl may not forward these funds to Fourth

Media or use them in connection with a

federal election at this time. Further

developments may occur as a result of a

court suit filed by the Duke campaign

against sea, Me! and Fourth Media to

recover the funds. However, the breach of

contract issues presented in the court case

are outside the Commission's jurisdiction.

ADs 1984-58 and 1981-42.

(Date Issued: March 26, 1991; Length:

6 pages)

6

Volume 17, Numbe

NJ 1991-4: payment to senate Employee fo

Two--Week Teachill(j AppOintmen

A $7,500 payment to Dr. Paul Offner, a

legislative assistant to Senator Moyniha

for a two-week appointment as lecturer a

the University of California, Santa

Barbara, is considered a stipend, rather

than an honorarium, and is therefore not

subject to the $2,000 honorarium limdt.

under the Federal Election campaign

Act, a U.S. Senator Or an officer or

employee of the Senate may accept not mo

than a $2,000 honorarium for a speech,

appearance or article. 2 U.S.C. §441i, 

amended by section 601(b)(1) of the Ethi

Reform Act of 1989, Pub. L. No. 101-194.

Under FEC rules, however, a stipend-tha

is, a payment for services provided on a

continuing basis-is not considered an

honorarium and is not subject to the $2,0

limit. 11 CFR 110.12(c)i3).

In past advisory opinions, the Comm

sion has concluded that compensation pai

to Senators for university teaching performed over an academic term or year rep

sented a stipend rather than an honorari

AOs 1989-30 and 1985-4. AIthough Dr. Of

ner will be performing services for only

two weeks, his compensation nevertheless

represents a stipend, based on the circum

stances described in his request:

a The university followed an established

application and formal review process 

appointing him; and

o He is required to assume specific

teaching and lecturing assignments und

the direction of an academic departmen

(Date Issued: March 18, 1991; Lengt

4 pages)

ptELIC APPFARANCES

5/19-23 The International Institute

of Municipal Clerks

Grand Rapids, Michigan

Janet C. McKee, Clearinghouse

on Election Administration

lAg a result of the 1989 amendments, the 

Members of the House of Representatives 

all other federal officers and employees

except those from the Senate, are prohib

ed from accepting honoraria.
(Court Cases continued next page)

FEDERAL ELECTION COMMISSION Volume 17, Number 5

FEe v , POLITICAL CINl'RIBUrI{J'lS IlPI.TA, INC.

on March 7, 1991, by agreement of both

parties, the u.s. District Court for the

southern District of New York entered a

judgment ordering the defendant to pay a

$5,000 civil penalty for violating 2 U.S.C.

§438(a)(4) by using information copied from

FEC reports for commercial purposes. (Civil Action No. 89-crV-5238{SWK).J The judgment permanently enjoined the defendant

from violating that provision. By agreement of the parties, the court stayed payment of the penalty pending the disposition

of defendant's appeal, which was filed on

March 20. For a summary of the court's

memorandum opinion issued in December 1990,

see the February 1991 Record.

FEe v. MANN FOR CXNiRESS C'CIDII'l"1'EE

On March 21, 1991, the U.s. District

Court for the District of Columbia granted

the FEC's motion for default judgment

against Mann for Congress Coromittee and

its treasurer, Terry L. Mann, for violating

the terms of a conciliation agreement.

(Civil Action No. 90-2419(LFO).) (under

the terms of the agreement, the committee

and Mr. Mann had agreed to refund $17, 746

in excess contributions, disclose the

refunds on FEC reports and pay a $5,000

ctvi! penalty. )

. The court ordered defendants to comply

w1th the agreement's terms within 10 days

and pay the FEC an additional $5,000 civil

penalty for violating the agreement. The

court also permanently enjoined defendants

from future violations of the conciliation

agreement.

FEe v ; DERUS SlUm FOR CXNiRESS

On MarCh 1, 1991, the U.s. District

Court for the Western District of Missouri,

Southern Division, approved a final consent

order and judgment requiring Dennis Smith

for Congress and Terry E. Brown, as treasurer, to pay a $4,000 civil penalty for

filing the committee's 1988 quarterly

report almost two years late. The order

permanently enjoined defendants from future

violations of the reporting provision

(2 U.S.C. §434(a)(4)(A)(iii»).

May 1991

me v. K>RKIRi NN'mS. INC. (9O-1009--GAG

and 87-2467-GAG)

on February 28, 1991, defendants

working Names, Inc., and Meyer T. Cohen

agreed to pay $15,000 to settle two suits

the FEC had filed against them. The agreement was incorporated into an order issued

by the U.S. District Court for the District

of Columbia.

In the more recent suit (Civil Action

NO. 90-1009), the FEC asked the court to

find that defendants knowingly and willfully violated 2 U.S.C. §438(a)(4)--the

"sale and use restriction" that makes it

illegal to use names copied from FEC

reports for commercial purposes. '!he

Commission contended that defendants wece

aware of the prohibition against the "sale

and use restriction" because Mr. Cohen, as

President of Working Names, Inc., had

previously signed a conciliation agreement

in MUR 1472 in which he admitted to past

violations of the provision.

The FEe had sought enforcement of that

conciliation agreement in the earlier suit

(Civil Action No. 87-2467). In a May 1988

default jUdgment, the court ordered defendants to pay the $2, 000 civii penalty included in the conciliation agreement and an

additional $2,000 penalty, plus court

costs. In May 1990, after defendants had

paid only $100 toward the penalties, the

court, held Wot"king Names, Inc., and Mt".

Cohen in contempt of court and assessed

late cha~ges of $150 per day.

The current order declared that Working

Names, Inc., and Defendant Cohen knowingly

and willfully violated 2 U.s.c. 5438(a)(4),

as the FEC had alleged in civii Action No.

90-1009. The order permanently enjoined

them from further violations of the "sale

and use" restriction and assessed a $15,000

penalty to be paid in installments ending

January 1992. The Commission agreed to

waive the accumulated contempt penalties

and additional costs awarded by the court

in May 1990. If defendants fail to comply

with the current order, all contempt fines

accruing under the May order, as well as

interest charges and court costs, will be

immediately due.

'e

7
May 1991 FEDERAL ELECTION COMMISSION Volume 17, Numbe

FAUCHER AND MAINE RIGHT TO LIFE COMMITTEE,

INC. v; FEe (90-1832)

on March 21, 1991, the u.s. Court of

Appeals for the First Circuit affirmed a

district court decision, ruling that an FEC

regulation on corporate voter guides,

11 CFR 114.4(b)(5)(i), was invalid because

of its focus on "issue advocacy" rather

than "express advocacy."

Background

Plaintiffs Maine Right to Life Committee, Inc. (MRLCl, a nonprofit membership

organization, and Sandra Faucher, an MRLC

board member, filed suit in April 1990.

Plaintiffs sought a ruling that 11 CFR

114.4(b)(5)(i) was beyond the FEC's authority.

Under the regulation in question, a

corporation may use its treasury funds to

distribute a voter guide to the general

public only if the guide is "nonpartisan."

Included among the factors that "the Commission may consider in determining whether

a voter guide is nonpartisan" is that the

wording does not favor any position or

express an editorial opinion on the issues

presented. 11 CFR 114.4(b)(5)(i)(C) and

(D). The district court ruled that n[tlhis

approach ignores the clear language of FEC

v. Massachusetts citizens for Life [MCF~

that issue advocacy by a corporation----cannot

be constitutionally prohibited and that

only express advocacy...is constitutionally

within the statute's prohibition." The

court found that the Supreme Court's

decision in MCFL limited the scope of the

prohibition on corporate expenditures

(2 U.S.C. §44lb(a)) to expenditures that ~expressly advocate" the election or defeat

of a clearly identified candidate.

Because, in the district court's view, the

regulation focused on issue advocacy, the

court concluded that the re~lation was

beyond the power of the FEC.

Court of Appeals

The appeals court affirmed this

decision. The court first e;o;amined the

scope of the statutory prohibition, section

44lb(a). (The provision prohibits "any

corporation whatever" from making "a

contribution or e;o;penditure in connection

with any I federal] election.... ") The

court acknowledged that "the statute appears to allow for a very broad application," but stated that the Supreme Court in

1A detailed summary of the district court

decision appeared in the September 1990

Record.

8

Buckley v. valeo narrowed the scope of th

prohibition: "The Supreme Court, recogn

ing that such broad language as found in

section 441b(a) creates the potential for

first amendment violations, sought to avo

future conflict by explicitly limiting th

statute's prohibition to 'express advocacy. ' 11 The court went on: "This expre 55

advocacy test was again embraced by the

Supreme Court in the more recent case of

Massachusetts Citizens for Life."

The appeals court rejected the FEC's

argument that the language in the Supreme

Court's MCFL opinion which appeared to

limit section 441b(a) was dictum and

therefore not binding. The court also

rejected the FEC's alternative argument

that even if section 441b(a) were restric

ed to express advocacy expenditures, the

FEC's voter guide rules were properly

directed at advocacy of candidates and di

not appreciably infringe upon a corporation'S ability to advocate its position o

issues. The court stated: "In our view,

trying to discern when issue advocacy in 

voter guide crosses the threshold and

becomes express advocacy invites just the

sort of constitutional questions the Cou

sought to avoid adopting the bright-line

express advocacy test in Buckley."

SPfM)n«; DROPS IN 1990

HCUSE RID SEl<IATE ELECTICNS

Spending by House and Senate campaign

dropped to $445 million in the 1990 election cycle, the lowest point in six years

according to FEe figures released on

February 22, 1991. When compared with th

1968 races, Senate campaign spending

dropped $21 million, or 10.3 percent, wh

House campaign spending increased by $9

million, or 3 percent.

PACs contributed $150.6 million to 19

House and Senate candidates, representing 

slight increase (2 percent) over PAC

contributions in the 1988 cycle. OVerall

PAC contributions made up 38 percent of

total receipts in 1990 House campaigns an

22 percent in the Senate races. senate a

House campaigns received $249.4 million

from individuals.

To order a copy of the press release,

which provides statistics on House and

Senate races in past election cycles, cal

the FEC's toll free number (800/424-9530)

and ask for the Public Records Office or

dial the office directly (202/376-3140).
May 1991 FEDERALELECTION COMMISSION Volume 17, Number 5

The table to the right lists total

funds raised and spent by House and Senate

candidates during the past three election

cycles. The graph below depicts data on

1989-90 spending by general election House

candidates.

Sunmiuyof House and Senate Activity

(in millions of dollars)

Election Cycle: 1989-90 1987-88 1985-86

Raised $471.2 $477.6 $472.0

Spent $445.2 $459.0 $450.9

Number of 1.764 1, 792 1,873

candidates

e 'Includes only major party candidates who raised or spent over $5,000.

tNumbers in parenthesis show number of candidates.

:rrhe one incumbent who lost in the primary (Ohio, 8th Congressional District seat) is not included here, since this chart

covers spending only of those candidates who ran in the generalelection.

9

Open Seat

Losers

(26)

Open Seat

Winners

(30)

Incumbent

losers

(15)*

_Winners

_Losers

Challenger

Winners

(16)

Challenger

Losers

(226)

Incumbent

Winners

(393)t

$0

Median Disbursements of 1990 House

Candidates Running in

the General Election*

$100,000

$400,000 1------

$500,000 f---------

$600,000

$700,000 f---------------------

$300,000

$200,000

$800,000 I
10

1990

$373,868

$240,370

Volume 17, Numbe

1986 1988

contributions to:

OUt-of State Home-St

Candidates Candida

_ Republican Committees

_ Democratic Committees

1Thi s table shows the contribution activ

of the 21 Republican and 20 Democratic

state party committees that made out-ofstate contributions during the 1990

election cycle.

Republican state

Committees $333,850

Democratic state

Committees $141,800

ContribJ.tions by State party CCmni.ttees

to candidates in Other1states

1989-90 Election Cycle

1984

FEDERAL ELECTION COMMISSION

1980 1982

$0

'Support means bothcontributions and coordinated partyexpenditures.

Election Cycle

$5

$20 r------

$25

May 1991

$30 1 -_

$10

$15

FEe RELEASES SUMMARY OF

1989-90 PARTY ACTIVITY

The FEe has released statistics on

party activity based on the year-end

reports filed by major party co~ttees at

all I eve1s--nationa1 t state and local. The

accompanying table and charts are based on

the March 15. 1991, press release that

provides detailed information on 1989-90

party statistics as well as historical data

covering several election cycles. To order

copies of the release, call 800/424-9530

and ask for Public Records or call the

office directly (202/376-3140).

Party Support of Candidates*

Millions of Dollars
May 1991 FEDERALELECTION COMMISSION

Party Committees' Sources of Receipts

1990 Election Cycle

(in millions of dollars)

Volume 17, Number 5

___I Contributions from Individuals

_ Contributions from PACs

_ Transfers from Other Party Committees

_ Other Receipts

I

.<', 

Republican Committees

(Total Raised $207.2)

1991 DISCLOSURE DlREC'roRY

on March 25, 1991, the FEC released the

sixth edition of the Combined Federal/State

Disclosure Directory, a reference tool

identifying where to locate reports or

information on:

o Campaign finance;

o Personal finances of officials and

candidates;

o Lobbying;

o corporate registrations;

o Public financing;

o Spending on state initiatives and

referenda;

o Candidates on the ballot;

a Election results;

o voting accessibility; and

o Election-related litigation.

The directory covers both federal and

state government offices. The 1991 edition

now includes FAX nrnnbers for numerous

offices.

A limited number of copies are available free of charge. To order, call the

FEe's toll-free number (800-424-9530) and

ask for the Public Records Office or call

the office directly (202/376-3140).

11

$56.3

Democratic Committees

(Total Raised: $86.7)

The first nrnnber in each citation

refers to the "number" (month) of the 1991

Record issue in which the article appeared;

the second number, following the colon,

indicates the page n~r in that issue.

ADVISORY OPINIOOS

1990-14: AT~T's 900-line fundraising service, 2: 4

1990-19: Vendor/committee relationshipi

sale and repurchase of fundraising items,

1:8

1990-22: Blue CrOSSjBlue Shield's solicitation of member plans' personnel, 1:9

1990-25: Parent corporation's obligations

to labor organization under twice-yearly

provisions, 2:5

1990-26: sale of campaign asset; personal

use of excess funds after November 30,

1989, 3:7

1990-27: Transfer to party's federal

account of funds mistakenly deposited in

state account, 3:9

1990-29: Return to federal account of funds

transferred to state account, 4:5

1990-30: Designation of post-election

contributions to retire debts, 4:6

(continued)
May 1991 FEDERAL ELECTION COMMISSION

1991-1: Credit card contributions to

nonconnected PAC of federal contractor

partnership, 5:4

1991-2: Disposition of possibly illegal

funds raised through 900-line telephone

calls, 5:5

1991-4: Payment to Senate employee for twoweek teaching appointment, 5:6

CWRT CASES

FEC v.

- AugliStIi1e fo r congress, 2: 7

- Drarnesi for Congress, 3:10 - Fletcher, ~riends of Isaiah, 4:6

- Legi-Tech, Inc., 3:11 - Mann for congress Committee, 5:7 - Mid-America Conservative PAC, 2:10 - NRA Political Victory Fund, 3:10 - political Contributions Data, Inc.,

2:8; 5:7 - Smith, Dennis, for Congress, 5:7

FEDERAL ELECTION COMMISSION

999 E Street, NW

Washington, DC 20463

Official Business

Volume 17, Numbe

- s~elman, 3:10 - W~b for Congress committee, 2:10 - west Virginia Republican State

Executive Committee, 3:10

- Working Names, Inc. (90-1009-GAG and

87-2467-GAG), 5:7

v. FEC

------=-Common cause; National Republican

Senatorial Committee, Appellant (90-

5317), 1:7

- Faucher and Maine Ritt to Life

committee, Inc. (90- 832), 5:8 - stern, 2:7

800 LINE

Allocating expenses through ballot compos

tion, 2:1

Debt retirement by candidate committees,

4:7

Staff advances and salaries, 2:6

Bulk Rate Mail

Postageand Fees Paid

Federal Election Commission

Permit Number G-31