March 1996 Federal Election Commission Volume 22, Number 3

Table of Contents

Information

1 FEC World Wide Web site

4 Presidential Candidate Summary

Report

Regulations

1 Public Hearing: Proposed Rules

on Candidate Debates Staged by

Cable TV Stations

2 New Public Funding Rules Take

Effect

Reports

2 Special Elections: MD and OR

Court Cases

6 Whitmore v. FEC

6 New Litigation

7 Advisory Opinions

8 Federal Register Notices

Compliance

10 Year-End Nonfiler

10 MURs Released to the Public

11 Index

Regional Conference in Chicago

April 11-12 at the Drake Hotel,

for candidates, party committees,

corporations, labor organizations

and trade associations; $150

registration fee (does not include

hotel accommodations). Call 800/

424-9530 or 202/219-3420 for

further information.

Information

The FEC Has a New

Address: http://www.fec.gov

The FEC now has a “Home

Page” and site address on the

Internet’s World Wide Web,

offering the public another FEC

access point for information on

campaign financing and the election

process.

The FEC’s Web site address is:

http://www.fec.gov

Once at the Home Page, users

will find menu options including:

• Citizens Guide to Contributions

and the Law: This option will offer

highlights from various FEC

informational brochures and

booklets on the Federal Election

Campaign Act—valuable tools for

students, media, and the general

public.

• Financial Information About

Candidates, Parties and PACs:

This option on the menu includes a

guide on using the FEC Public

Records Office and a description

of the FEC’s Direct Access

Program (DAP). It also contains

overviews and summaries of

Presidential and Congressional

campaigns’ financial information

for the 1996 election cycle,

including charts, graphs and

(continued on page 2)

Regulations

Public Hearing on Proposed

Rules: Candidate Debates

Staged by Cable TV Stations

On March 20, 1996, at 10 a.m.,

the FEC will hold an open hearing

to seek public comments on proposed rules regulating the staging of

candidate debates by cable television stations. 11 CFR 100.7(b)(2),

100.8(b)(2), 110.13 and 114.4(f).

These proposed rules were published in the Federal Register on

February 1, 1996 (61 FR 3621).

The proposed rules are part of the

rulemaking resulting from the

Supreme Court’s decision in FEC v.

Massachusetts Citizens for Life, 479

U.S. 238 (1986).

The proposed rules would have

the following effects:

• Debates sponsored by cable

television operators, programmers

and producers (stations) would be

treated the same as debates sponsored by other broadcast or print

media;

• Cable television stations and other

news media controlled or owned

by a political party, political

committee or candidate would

continue to be barred from sponsoring candidate debates; and

• Cable television stations would be

eligible for the news story expen-

(continued on page 2)
Federal Election Commission

999 E Street, NW

Washington, DC 20463

800/424-9530

202/219-3420

202/501-3413 (Flashfax Service)

202/219-3336 (TDD)

Lee Ann Elliott, Chairman

John Warren McGarry,

Vice Chairman

Joan D. Aikens, Commissioner

Danny L. McDonald,

Scott E. Thomas, Commissioner

John C. Surina, Staff Director

Lawrence M. Noble, General

Counsel

Published by the Information

Division

Louise D. Wides, Director

Dario Bard, Editor

tables.1 Users can access more

detailed information on the current

election cycle as well as summary

information for past cycles at the

Commission’s File Transfer

Protocol (FTP) site.

• News Releases and Media Advisories: Statistical releases, policy and

procedure news, Sunshine notices

of Commission meetings and

advisories on a variety of topics

can be found here.

Other menu options will be added

in upcoming months. ✦

1 Only summaries of FEC disclosure

reports—not the actual complete

reports—are available on the FEC’s

World Wide Web site.

Information

(continued from page 1)

(Information continued on page 4)

diture exemption under the same

terms as other broadcast and print

media.

The Commission also seeks

comments on whether new rules

should make distinctions among

cable operators, programmers and

producers.

Written comments should be

submitted by March 4, 1996, to

Susan E. Propper, 999 E Street,

NW, Washington, DC 20463.

Interested parties are invited to

testify at the hearing and should

request to do so when they file

written comments.

To receive a copy of the Federal

Register notice containing the

proposed rules, use the FEC’s

automated Flashfax system; dial

202/501-3413 and request document

233. Alternatively, contact the

Public Records Office at 800/424-

9530 (option 3 on the main menu)

or 202/219-4140. ✦

Regulations

(continued from page 1)

New Presidential Public

Funding Rules Take Effect

The FEC’s new rules on the

public funding of Presidential

campaigns became effective on

February 9. See Federal Register

Announcement of Effective Date

(61 FR 4849, February 9, 1996).

Among the areas affected by these

rules are: the audit process for publicly

funded Presidential campaigns;

General Election Legal and Accounting Compliance Funds; funding

general election expenses with

primary funds; and travel on government conveyance. See page 3 of the

August 1995 Record for a more

detailed discussion of these changes

and a listing of other changes. Alternatively, a free copy of the Federal

Register notices on these rules (60

FR 31854, June 16, 1995, and 61 FR

4849, February 9, 1996) may be

obtained through Flashfax; call 202/

501-3413 and request document 232. ✦

Reports

House Special Elections:

Maryland’s 7th District and

Oregon’s 3rd District

Maryland has scheduled a special

general election on April 16, and

Oregon has scheduled a special

primary election on April 2 with a

special general election on May 21.

These elections are being held to fill

the U.S. House seats vacated by

Congressmen Kweisi Mfume of

Maryland’s 7th district and Ron

Wyden of Oregon’s 3rd district.

The reporting requirements for

committees involved with these

special elections are outlined in the

accompanying tables. Additionally,

this article provides information on

contribution and coordinated party

expenditure limits, and committee

transfers.

If you have any questions about

special election issues after reading

this article, call the FEC at 800/424-

9530 or 202/219-3420.

Reporting by Candidate

Committees

Candidate committees are

required to register and to file

financial disclosure reports with the

FEC once their campaign activity

exceeds $5,000 in either contributions or expenditures. 2 U.S.C.

§431(2). See the Campaign Guide

for Congressional Candidates and

Committees.

Once the $5,000 threshold is

reached, principal campaign committees of candidates seeking to win

this special election must file the

appropriate reports as shown in the

accompanying tables and as discussed below.

Pre- and post-election reports.

All participants in Oregon’s special

primary election must file a preprimary election report on March

21. Participants in Maryland’s

March 5 special primary election

were advised in the February

2

Federal Election Commission RECORD March 1996
Record to file a pre-primary report

by February 22.

All participants in the special

general elections must file pre- and

post-general election reports, per the

appropriate table. The April Quarterly report is also required of all

active candidate committees, but it

is waived for all participants in

Maryland’s special general election

because their pre- and post-general

election reports cover the April

Quarterly’s reporting period.

Forty-eight-hour notices. Principal

campaign committees must file 48-

hour notices on contributions of

$1,000 or more received between

the 20th day and 48 hours before the

date of any election in which the

candidate participates. The notice

must be received by the FEC and the

appropriate Maryland and Oregon

state election authorities within 48

hours of the campaign’s receipt of the

contribution.1 2 U.S.C. §434(a)(6)(A);

11 CFR 104.5(f).

This requirement applies to all

contributions of $1,000 or more,

including: monetary and in-kind

contributions; loans (other than bank

loans); guarantees and endorsements

of bank loans; and contributions,

loans and endorsements of bank loans

made by the candidate. 2 U.S.C.

§431(8)(A); 11 CFR 100.7(a).

For information on the content of

the notice, see 11 CFR 104.5(f) and

the Campaign Guide.

Reporting by Party Committees

and PACs

Quarterly filers. Party committees and PACs filing on a quarterly

(rather than monthly) basis are

required to file pre- and post-special

election reports if they make

previously undisclosed contributions

or expenditures in connection with a

1 Forty-eight hour notices are the only

FEC reports that may be faxed. Fax

numbers: FEC at 202/219-0174;

Maryland’s Board of Election Laws at

410/974-2019; and Oregon’s Secretary

of State at 503/373-7414.

Reporting Dates for Special General Election, Maryland’s 7th

District, April 16, 1996

Close Reg./Cert.

of Books * Mailing Date ** Filing Date

Pre-General March 31 April 5 April 8

Post-General May 6 May 16 May 16

Reporting Dates for Special Elections, Oregon’s 3rd District,

Primary on April 2, General on May 21

Close Reg./Cert.

of Books * Mailing Date ** Filing Date

Pre-Primary March 13 March 18 March 21

April Quarterly March 31 April 15 April 15

Pre-General May 1 May 6 May 9

Post-General June 10 June 20 June 20

* The close of books is the end of the reporting period. The period begins with the

day after the closing date of the last report filed. If the committee is new and has not

previously filed a report, the first report must cover all activity that occurred before

the committee registered and, if applicable, before the individual became a candidate.

**Reports sent by registered or certified mail are considered to be filed on time if

they are postmarked by this date.

special election by the close-ofbooks date shown in the reporting

tables. 11 CFR 104.5(c)(1)(ii) and

(h).

Monthly filers. PACs filing on a

monthly basis are not required to

file pre- and post-special election

reports but may have to file 24-hour

reports if they make independent

expenditures, as explained below.

See 2 U.S.C. §434(a)(9); 11 CFR

104.5(h)(2).

Twenty-Four-Hour Reports on

Independent Expenditures

All PACs and persons making

independent expenditures may have

to file 24-hour reports. This report is

required if the committee or person

makes independent expenditures

aggregating $1,000 or more between

the 20th day and 24 hours before the

date of an election.

The report must be filed within

24 hours after the expenditure is

made. For more information, see

11 CFR 104.4(b) and (c) and

104.5(g). See also “Where to File”

for special filing requirements.

Where to File

Filing with the FEC. All principal

candidate campaign committees,

party committees and PACs that

participate in these special elections

file reports and 48-hour notices with

the FEC. Public Law 104-79 and

11 CFR 105.1 and 105.4, and

11 CFR 104.4(c)(3).

Addresses and further filing

instructions are provided on the

(continued on page 4)

3

March 1996 Federal Election Commission RECORD
back of Form 3 and Form 3X.

Filing with state authorities.

Copies of all reports and notices

filed with the FEC, including 48-

hour notices and 24-hour reports,

must simultaneously be filed with

the appropriate state election

authorities: Maryland’s Board of

Election Laws: P.O. Box 231,

Annapolis, 21404-0231, telephone

410/974-3711; and Oregon’s

Secretary of State, 141 State Capitol, Salem, 97310-0722, telephone

503/986-1518. 2 U.S.C. §439(a)(1)

and (a)(2)(B); 11 CFR 108.5.

Party committees and PACs that

are active in these special elections

must also file copies of their FEC

reports with the appropriate state

election authorities, but they need

only file the portions of their reports

applicable to candidates running in

the special elections (e.g., the

Summary Page and the schedule

showing the contribution or expenditure). 2 U.S.C. §439(a)(2)(B).

Contribution Limits and

Transfers

Contribution limits. There is a

separate contribution limit for each

election in which a candidate

participates. 11 CFR 110.1(j)(1) and

110.2(i)(1).

Monies left over from a previous

federal campaign. Candidates with

leftover monies from a previous

campaign for federal office may

transfer the leftover monies to their

special election campaign provided

they have fulfilled all of the past

campaign’s obligations. Such

monies may be transferred without

redesignations from contributors.

Contributions transferred from a

past campaign do not count against

the contributor’s limits for the

special election.

Simultaneous campaigns. A

candidate simultaneously running

for the same office in one of these

special elections and in a regularly

scheduled 1996 election may use the

same campaign committee for both

efforts. Special election contributions

do not count against a contributor’s

limits for the regularly scheduled

election. Monies may be transferred

from the special election campaign to

the other campaign if redesignations

from contributors are obtained or if

the monies represent leftover funds

from the special election campaign.

Candidates simultaneously

running in one of these special

elections and in a regularly scheduled 1996 election for some other

federal office must maintain separate campaign committees. These

committees may not transfer contributions from one campaign to the

other without first ending one of the

campaigns and then obtaining

redesignations from the contributors. Redesignated contributions

count against the contributor’s limit

for the election to which they were

transferred.

Prohibition on transfers from

nonfederal campaigns. Campaigns

of candidates participating in special

elections should note that transfers

from a candidate’s nonfederal

campaign to his or her federal

campaign are prohibited. 11 CFR

110.3(d).

Coordinated Party Expenditure

Limits

The national committee of a

political party and the party’s state

committees may make limited

coordinated party expenditures in

connection with the general election

campaign of the party’s nominee.

2 U.S.C. §441a(d). The state

committee’s spending limit is

separate from the national committee’s limit. 11 CFR 110.7(b)(1).

The coordinated party expenditure limit for 1996 is $30,910. ✦

Reports

(continued from page 3)

Information

(continued from page 2)

Presidential Candidate

Summary Report Available

Persons interested in the financial

activity of Presidential primary

campaigns may now obtain a twopage report on the receipts and

disbursements of campaigns that

have reported at least $100,000 in

financial activity. The FEC’s

Presidential Candidate Summary

Report lists total receipts and

disbursements by candidate. Each

candidate’s total receipts and

disbursements are also broken down

by source and category, respectively. The figures are adjusted to

reflect only the actual amounts

received and spent. For instance,

refunds of contributions are subtracted from the contribution totals,

and deposits made by the campaign

to secure certain services are

subtracted from the spending totals

when they are refunded. These

adjustments cause the totals on the

Presidential Candidate Summary

Report to be lower than what the

campaigns actually reported on their

FEC disclosure forms.

Presidential Candidate Summary

Reports may be accessed via the

Internet (see page 1 article on the

FEC’s new World Wide Web site).

To have a free copy of the Presidential Candidate Summary Report

faxed to you, call the FEC’s automated Flashfax system at 202/501-

3413 and request document 552.

Alternatively, free copies may be

ordered from the FEC’s Public

Records Office: call 800/424-9530

or 202/219-4140.

The FEC will update the Presidential Candidate Summary Report

each month based on monthly

disclosure reports filed by the

campaigns. ✦

4

Federal Election Commission RECORD March 1996
Million Dollar Presidential Campaigns

The bar graph below depicts the total receipts, broken down by source, of active Presidential campaigns with at least

$1 million in financial activity. This information is based on the Presidential Candidate Summary Report that includes

all activity through December 31, 1995. Therefore, the public matching fund payments received by certified candidates in January 1996 are not reflected in this bar graph. The Presidential campaigns of Republicans Pete Wilson and

Arlen Specter are not included because both of these candidates dropped out of the Presidential race in 1995.1

0

5

10

15

20

25

30

Clinton Dole Gramm Forbes Alexander Buchanan Lugar Taylor Keyes LaRouche

Other (PACs, Party, Transfers from Other Committees, Miscellaneous)

Individual Contributions

Candidate Contributions/Loans

Millions of $

1Visit the FEC’s World Wide Web site (see page 1 article) to access a more detailed version of this bar graph, which includes the

Wilson and Specter campaigns as well as other Presidential campaigns with more than $100,000 in financial activity.

5

March 1996 Federal Election Commission RECORD
6

Federal Election Commission RECORD March 1996

Court Cases

Whitmore v. FEC

On October 26, 1995, the U.S.

Court of Appeals for the Ninth

Circuit affirmed the district court’s

dismissal of this case on grounds

that plaintiffs lacked standing under

Article III of the constitution to file

this suit and that, even if they had

standing, their claims were frivolous. See page 7 of the February

1995 Record for a summary of the

district court’s decision.

Joni Whitmore of the Green Party

was a 1994 U.S. House candidate.

She and Alaskan voter James

Quinlan brought this suit arguing

that the Federal Election Campaign

Act violated the constitution because it did not prohibit U.S. House

candidates from accepting contributions from sources outside of their

congressional districts. See page 9

of the September 1994 Record for a

summary of this complaint.

U.S. Court of Appeals for the

Ninth Circuit (94-36236), D.Ct. No.

A94-289 CIV, October 26, 1995. ✦

New Litigation

FEC v. Parisi

The FEC asks the court to impose

civil penalties on Angelo Parisi of

the greater of $5,000, or the full

amount involved, for each of the

following alleged violations:

• Contributions in excess of his

$25,000 annual limit for total

contributions: in 1991 ($33,942 in

total contributions), 1992 ($66,262

in total contributions) and 1993

($40,405 in total contributions)

(2 U.S.C. §441a(a)(3));

• Contributions in excess of his

$20,000 annual limit for each

national party committee: in 1992

($27,262 to the National Republican Senatorial Committee and

$22,750 to the National Republican Congressional Committee) and

1993 ($24,655 to the National

Republican Senatorial Committee)

(2 U.S.C. §441a(a)(1)(B)); and

• Contributions in excess of his

$5,000 annual limit for each

noncandidate/nonparty political

committee: in 1991 ($6,200 to

American Citizens for Political

Action)(2 U.S.C. §441a(a)(1)(C)).

These alleged violations stem

from an administrative complaint

filed with the FEC by the Center for

Responsive Politics on January 14,

1994. An FEC investigation into

these matters found probable cause

to believe that violations had indeed

occurred. The FEC then tried to

enter into a conciliation agreement

with Mr. Parisi to resolve these

matters. When an agreement with

Mr. Parisi could not be reached, the

FEC initiated this law suit as its

final recourse in the enforcement of

federal election law.

U.S. District Court, Southern

District of New York, White Plains

Division, 96 CIV 0348, January 16,

1996. ✦

Minnesota Citizens Concerned for

Life, et al. v. FEC, et al.

Plaintiffs Minnesota Citizens

Concerned for Life (MCCL) and

Elizabeth Blosser ask the court to

issue declaratory judgments that

recently adopted FEC regulations at

11 CFR 114 that govern “qualified

nonprofit corporations” exceed the

agency’s statutory authority and

violate MCCL’s constitutional rights.1

1 The FEC drafted these regulations to

incorporate the Supreme Court’s

decision in FEC v. Massachusetts

Citizens for Life (MCFL) (479 U.S. 238

(1986)) into its regulatory framework.

In that decision, the Court exempted

MCFL’s independent expenditures from

the corporate ban. MCFL was a

nonprofit membership corporation, tax

exempt under 501(c)(4), with the

characteristics bulleted in this article.

Plaintiffs also seek an injunction

forbidding the FEC from enforcing

these rules against MCCL.

MCCL is a nonprofit membership

corporation, tax exempt under

26 U.S.C. §501(c)(4), which asserts

that its primary purpose is to

educate the public about abortion

and related topics. MCCL states that

it is independent of any candidate or

party, and its profits do not inure to

the benefit of any person. MCCL

also asserts that it engages in

business activities related to its

advocacy of issues, such as selling

advertising space in its newsletter

and renting its membership list. It

also accepts corporate contributions,

but claims that the amount of such

contributions is insignificant when

compared with its total receipts.

The Federal Election Campaign

Act (the Act) prohibits corporations

from making expenditures in

connection with federal elections.

2 U.S.C. §441b. The regulations at

11 CFR 114.10, however, create an

exception for independent expenditures2

 made by tax exempt 501(c)(4)

corporations that:

• Were formed for the purpose of

promoting political ideas;

• Do not engage in business activities;

• Have no shareholders or other

persons whose claim on its assets

or earnings might create a disincentive for disassociating from the

organization; and

• Were not established by a business

corporation or labor union and do

not accept contributions from such

organizations.

MCCL states that it does not

satisfy the requirements at 11 CFR

114.10 because it accepts corporate

2 An independent expenditure is an expenditure made without any coordination with a candidate’s campaign for a

communication which expressly advocates the election or defeat of a clearly

identified candidate for federal office.
7

March 1996 Federal Election Commission RECORD

contributions, engages in business

activities, offers its members

affinity credit cards and is involved

in charitable causes in addition to its

promotion of pro-life stances.

Consequently, MCCL claims it can

not make independent expenditures

without the risk of entering into an

enforcement matter with the FEC.

MCCL believes that 11 CFR

114.10 is an unconstitutional

infringement on its First Amendment

rights. Accordingly, MCCL seeks a

declaratory judgment that 11 CFR

114.10 exceeds the statutory authority of the FEC and that it is unconstitutional because its restriction on

speech is not narrowly tailored to

serve the government’s overriding

interest—to safeguard against

corruption in the electoral process.

MCCL also challenges:

• 114.10(e), which requires nonprofit corporations making independent expenditures to submit a

letter certifying that they meet the

criteria for “qualified nonprofit”

status (MCCL argues that this

regulation is in excess of the

FEC’s statutory authority); and

• 114.10(f), which requires qualified

nonprofits to place disclaimers on

their solicitations, informing

potential donors that their donations may be used for political

purposes. MCCL argues that this

regulation is in excess of the

FEC’s statutory authority and that,

along with 114.10(b)(3)(ii), it is

unconstitutional because these two

regulations allegedly force qualified nonprofits to misrepresent

themselves as political committees.

U.S. District Court for the

District of Minnesota, 3-95-CV-114,

December 13, 1995. ✦

Advisory

Opinions

AO 1995-40

Disaffiliation of PACs

The PACs of Continental Airlines

and Eastern Airlines are no longer

affiliated political committees.

Continental Airlines lost ownership

of its stock in Eastern Airlines by

court order in the course of bankruptcy proceedings.

Continental Airlines first posed

the question of the disaffiliation of

these two PACs in AO 1990-10. At

that time, the court had taken away

the management and control of

Eastern from Continental and had

placed it in the hands of an independent trustee. In AO 1990-10, the

Commission nevertheless concluded

that the two PACs were still affiliated

because Continental still enjoyed

sole ownership of Eastern stock.

PACs of affiliated companies are

themselves affiliated and as a result

share a common contribution limit

for contributions received and made.

FEC regulations base the affiliation

between two companies (and

consequently their PACs) on an

evaluation of the following factors:

• The ownership of one company’s

controlling interest in voting stock

or securities by another;

• The ability of one company to

govern another;

• The ability of one company to hire,

demote or otherwise control another

company’s decision makers;

• The presence of common members, officers and employees who

either are members or work for

both companies simultaneously or

who once were members of or

once worked for one company and

now are a member of or work for

the other; and

• The role of one company in the

formation of the other. 11 CFR

110.3(a)(3)(ii)(A) through (F) and

(I).

On December 26, 1991, the court

overseeing the bankruptcy proceedings issued an Order of Abandonment of Estate Property that stripped

Continental of any stock or equity in

Eastern and placed ownership of

Eastern in the hands of the independent trustee.

Today, Continental does not have

an ownership stake in Eastern; the

two airlines do not share common

directors, officers or administrative

personnel; Continental has not

infused any cash into Eastern; and

Continental has not guaranteed any

of Eastern’s pension retirement

programs or any other Eastern

obligation.

These factors indicate that the

ownership relationship between

Continental and Eastern has been

severed, thus ending the affiliation

of their PACs. Continental’s PAC

and Eastern’s PAC should submit

amended Statements of Organization, deleting mention of each other

as an affiliated committee.

Date Issued: January 11, 1996;

Length: 3 pages. ✦

(Advisory Opinions continued on page 8)

Hooker v. FEC, et al.

John Jay Hooker asks the court to

declare it unconstitutional for federal

candidates to accept out-of-state

contributions to their campaigns.

Mr. Hooker, a potential 1996

candidate for U.S. President, states

in his complaint: “I know in my heart

that these unconstitutional campaign

contributions...deprive the qualified

voter of the undivided loyalty of

their two United States Senators and

of their Congressman... .”

U.S. District Court for the Middle

District of Tennessee, 95-0654, July

11, 1995. ✦
8

Federal Election Commission RECORD March 1996

Advisory Opinions Federal Register (continued from page 7)

Federal Register notices are

available from the FEC’s Public

Records Office.

1996-2

11 CFR 100, 110 and 114:

Candidate Debates and News

Stories (staged by cable television

stations); Notice of Proposed

Rulemaking (61 FR 3621,

February 1, 1996)

1996-3

11 CFR 100, 104, 105, 109, 110

and 114: Document Filing Pointof-Entry Technical Amendments;

Final Rule (61 FR 3549, February

1, 1996)

1996-4

Filing Dates for Maryland Special

Elections (61 FR 4666, February

7, 1996)

1996-5

11 CFR 9034 and 9038: Public

Financing of Presidential Primary

and General Election Campaigns;

Final Rule, Correcting

Amendments and Announcement

of Effective Date (61 FR 4849,

February 9, 1996)

1996-6

11 CFR 100 and 108: Point of

Entry; Final Rule; Technical

Amendments (61 FR 6095,

February 16, 1996)

1996-7

Computerized Magnetic Media

Requirements for Presidential

Committees (61 FR 6245,

February 16, 1996)

Corrections on:

Notice 1995-10, 11 CFR 100,

106, 109 and 114: Express

Advocacy, Independent

Expenditures, Corporate/Labor

Expenditures;

Notice 1995-23, 11 CFR 100,

102, 109, 110 and 114:

Corporate/Labor Activity,

Express Advocacy and

Coordination With Candidates

(61 FR 4302, February 5, 1996)

AO 1995-43

Refunding Legal Fees to

Candidate Committee

The Arnold & Porter law firm

may refund $150,000 in legal fees to

the Re-Elect Packwood Committee.

This refund represents 75 percent of

an adjustment based on the firm’s

withdrawal of its services. As such,

it is not considered a contribution to

the committee from the firm but is

rather treated as a refund from a

vendor.

Arnold & Porter served as

Senator Bob Packwood’s legal

counsel before the Senate Select

Committee on Ethics, which made

inquiry into certain activities

relating to Senator Packwood’s

service in the Senate. Arnold &

Porter received payment for these

services from the Re-Elect

Packwood Committee and from

Senator Packwood’s Legal Expense

Trust Fund.

At the time when Arnold &

Porter withdrew from this case, the

inquiry had not been concluded.

Senator Packwood was therefore

required to secure new counsel. The

firm’s withdrawal cost Senator

Packwood the knowledge and

expertise Arnold & Porter had

developed with respect to the ethics

proceedings. Arnold & Porter

recognized this loss and, in accordance with its regular practices,

adjusted the cost of its legal services.

Arnold & Porter calculated that it

would cost $200,000 for a new firm

to familiarize itself with the case

and thus develop a comparable level

of knowledge and expertise. Arnold

& Porter then sought to refund

$200,000 in legal fees to the ReElect Packwood Committee and

Senator Packwood’s Legal Expense

Trust Fund.

The Re-Elect Packwood Committee wishes to receive $150,000 of

the refund, with the remaining

$50,000 to go to the trust fund. This

75/25 split represents the percentage

of legal fees paid respectively by the

committee and the trust fund.

Arnold & Porter may refund

$150,000 to the Re-Elect Packwood

Committee. This refund does not

constitute the making of a contribution by the firm to the committee.

Instead, it is considered a refund by

a vendor. As such, it is not subject

to any contribution limit.

In issuing this opinion, the

Commission did not address the

issue of Senator Packwood’s use of

campaign funds to secure legal

representation. The statutory and

regulatory provisions at 2 U.S.C.

§439a and 11 CFR 113 state that

campaign funds may not “be

converted by any person to any

personal use, other than to defray

any ordinary and necessary expenses incurred in connection with

his or her duties as a holder of

Federal office.”

Date Issued: January 11, 1996;

Length: 4 pages. ✦

AO 1995-44

Presidential Primary

Candidate Excused from

Filing 48-Hour Notices

Presidential candidate committees filing FEC reports on a monthly

basis are not required to file 48-hour

notices during the Presidential

primary season. The Forbes for

President Committee, the principal

campaign committee of Malcolm S.

Forbes, Jr., is therefore exempt from

the 48-hour notice provisions at

2 U.S.C. §434(a)(6)(A) and 11 CFR

104.5(f).

Under 2 U.S.C. §434(a)(3)(A),

Presidential candidate committees

that have exceeded $100,000 in

contributions or expenditures must

file FEC reports on a monthly basis.

The Forbes committee has exceeded

this threshold.

The 48-hour notice provisions

require candidate committees to
9

March 1996 Federal Election Commission RECORD

notify the Commission, within 48

hours, of contributions of $1,000 or

more received between the 20th day

and 48 hours before any election.

Since Presidential candidates are

typically active in a number of

primary elections, requiring them to

abide by these provisions would

have the effect of having them file

48-hour notices on an almost

continual basis.

The Commission concluded that

Presidential candidate committees

filing monthly provide sufficient

disclosure to exempt them from the

48-hour filing provisions during the

Presidential primary season.

The Forbes committee posed

further questions with regard to the

48-hour notices, including whether

they were required for caucuses.

The Commission deemed it unnecessary to address these further

questions since this AO exempts the

Forbes committee from the 48-hour

notice provisions altogether.

Date Issued: January 11, 1996;

Length: 4 pages. ✦

AO 1995-45

Qualified Campaign

Expenses for Ballot Access

A publicly funded candidate

seeking a minor party’s nomination

may use campaign funds to pay for

his or her ballot access efforts,

including petition drives. Such

payments are qualified campaign

expenses. Further, payments made

by the candidate to get his or her

party rather than his or her name on

the ballot are qualified campaign

expenses in instances where doing

so is the more cost effective means

of securing a place for the candidate

as the party’s nominee.

Dr. John Hagelin is a candidate

for the Natural Law Party’s (NLP)

1996 Presidential nomination. On

December 22, 1995, the FEC

certified Dr. Hagelin as eligible to

receive public funding. On January

1, 1996, he was certified to receive

an initial entitlement of $100,000.

As a publicly funded candidate, Dr.

Hagelin may use campaign funds for

“qualified campaign expenses” only.

26 U.S.C. §§9033, 9038 and 9042,

and 11 CFR 9032.9(a)(2).

The Commission has long held

that the process by which a nonmajor party candidate gets on the

general election ballot serves a

purpose similar to a primary election. Expenses incurred by independent or minor party Presidential

candidates to secure ballot access

are, therefore, considered qualified

campaign expenses. AOs 1984-25

and 1984-11.

Each state has its own ballot

access requirements and procedures.

In some states, it is simpler and

more cost effective to secure a ballot

position for a candidate by securing

a position for his or her party. Dr.

Hagelin proposes to secure ballot

access for either himself or for his

party, depending on whichever is

simpler and more cost effective in

any given state.

Although opting to place the

party on the ballot instead of Dr.

Hagelin will have the residual effect

of qualifying NLP Senate and House

candidates for the ballot, it is

understood that the principal

purpose of these efforts is to obtain

a ballot position for Dr. Hagelin’s

candidacy.

Date Issued: January 11, 1996;

Length: 3 pages. ✦

AO 1995-46

Purchase of Candidate’s

Book by His Campaign

Friends of Alfonse D’Amato,

Senator Alfonse D’Amato’s principal campaign committee for his

1998 reelection bid, may purchase

copies of the Senator’s autobiography at a bulk rate discount and then

give them away to contributors. This

transaction is not an in-kind contribution from the publisher or a

personal use of campaign funds.

Senator D’Amato’s campaign

plans to use campaign funds to

purchase several thousand copies of

the Senator’s autobiography. These

books would be purchased at a bulk

rate discount. This purchase would

be at the standard fair market price

for bulk purchases that is normally

offered by publishers. The campaign

would buy the books on the understanding with the publisher that the

candidate would not receive royalties from this purchase, and that the

purchased copies would not be

resold.

The bulk rate discount would not

result in an in-kind contribution to

the campaign from the publisher

because it is a normal practice of the

publishing industry to give discounts to bulk rate buyers with

similar conditions attached. AOs

1994-10, 1993-20 and 1989-14. This

purchase would be at the usual and

normal charge.

The campaign intends to use the

copies it purchases solely in connection with the campaign—for instance, as “thank you” gifts to

contributors who give a certain

amount. The campaign will not buy

more books than are needed for

campaign-related purposes.

Under 11 CFR 113.1(g), it is

illegal to use campaign funds to pay

for an expense that would exist

irrespective of the candidate’s

campaign or duties as a federal

officeholder. Doing so constitutes a

conversion of campaign funds to

personal use.

The proposed transaction does

not represent a personal use of

campaign funds because the books

would be used only in connection

with campaign activity. Moreover,

the fact that Senator D’Amato

would not receive proceeds from the

proposed transaction indicates that

campaign funds would not be

converted to his personal use.

Date Issued: February 5, 1996;

Length: 4 pages. ✦

(Advisory Opinions continued on page 10)
10

Federal Election Commission RECORD March 1996

Advisory Opinions

(continued from page 9)

AO 1995-48

Preemption of Georgia Law

Limiting Receipt of

Contributions

Federal campaigns are not

required to abide by a Georgia statute

that forbids them from accepting

contributions during a legislative

session.1

 Federal law preempts state

law in matters concerning the

receipt of contributions.

Day for Senate is the principal

campaign committee of Clinton

Day, a Georgia State Senator. State

Senator Day is seeking the 1996

Republican nomination for U.S.

Senator from Georgia. Georgia

state law at OCGA §21-5-35(a)

states that: “No member of the

General Assembly or that member’s

campaign committee or public

officer elected state wide or campaign committee of such public

officer shall accept a contribution

during a legislative session.”

Federal law preempts state law

with regard to limitations on

contributions and expenditures

imposed on federal campaigns.

11 CFR 108.7(b)(3). The areas

where federal law does not preempt

state law are listed at 11 CFR

108.7(c) and include: the manner of

qualifying a candidate or political

party for the ballot; the establishment of the date and the place of

elections; voter registration; voter

fraud and similar offenses; and a

candidate’s personal financial

disclosure.

Since federal law does not

prohibit federal campaigns from

receiving contributions while a

legislative body is in session, the

1 This conclusion is identical to that

reached by the U.S. District Court for

the Northern District of Georgia in

Teper v. Bowers, No. 1:96-CV-0009-

WBH. On January 16, 1996, the court

issued a preliminary injunction barring

the enforcement of OCGA §21-5-35(a)

against federal campaigns.

Day for Senate committee may

accept contributions for State

Senator Day’s federal effort while

the Georgia General Assembly is in

session.

Date Issued: January 26, 1996;

Length: 3 pages. ✦

Advisory Opinion Requests

Advisory opinion requests are

available for review and comment in

the Public Records Office.

AOR 1996-1

Permissibility of membership

organization’s communication

encouraging members to give to

endorsed candidates (Association of

Trial Lawyers of America; January

19, 1996; 5 pages)

AOR 1996-2

Applicability of corporate ban to

vendor’s providing an online

account to federal candidates for

free (CompuServe Inc.; January 19,

1996; 4 pages)

AOR 1996-3

Status of foundation as nonconnected

political committee (BreedenSchmidt Foundation; January 19,

1996; 2 pages) ✦

Compliance

Year-End Nonfiler

The Radanovich for Congress

committee was the only candidate

committee that failed to file a 1995

Year-End report. This committee is

George P. Radanovich’s principal

campaign committee for the U.S.

House seat representing California’s

19th district. See the FEC press

release of February 16, 1996. The

Commission is required by law to

publicize the names of nonfiling

candidate committees. 2 U.S.C.

§438(a)(7). The FEC pursues

MURs Released to the Public

Listed below are summaries of

FEC enforcement cases (Matters

Under Review or MURs) recently

released for public review. This

listing is based on the FEC press

releases of January 22 and 31, and

February 6 and 9. Files on closed

MURs are available for review in

the Public Records Office.

MUR 2291

Respondents: Political Contributions Data, Inc. (NY)

Complainants: National Republican Congressional Committee (DC)

Subject: Sale and/or use of contributor information for a commercial purpose

Disposition: Probable cause to

believe, litigation initiated, with

final court action taken in March

1994 (see page 4 of the May 1994

Record)

MUR 2667

Respondents: (a) George Bush for

President Committee, J. Stanley

Huckaby, treasurer (VA);

(b) Republican National Committee,

William J. McManus, treasurer

(DC); (c) Republican state party

committees and their treasurers from

GA, MI, NJ (federal/nonfederal

accounts); (d) Republican state party

committees and their treasurers from

OH and PA (federal/nonfederal

accounts); (e) Republican state party

committees and their treasurers from

CA, CO, FL, IL, KY, MD, MA, SC,

TN, TX, WI, NM and NC (federal/

nonfederal accounts)

Complainants: Democratic state

party committees from MI, OH, SC

and TN

Subject: Exceeding the overall

spending limit; excessive contributions; failure to report contributions;

corporate and labor union contributions; use of nonfederal funds

Disposition: (a) Probable cause to

enforcement actions against nonfilers on a case-by-case basis. ✦
11

March 1996 Federal Election Commission RECORD

Complainant: William Lingley (WA)

Subject: Disclaimer

Disposition: (a-b) No reason to

believe

MUR 4278

Respondents: Pakistani Physicians

Political Action Committee, Dr.

Ikram U. Khan, treasurer (NV)

Complainant: FEC initiated (RAD)

Subject: Failure to file reports

timely

Disposition: $2,300 civil penalty

MUR 4285

Respondents: San Bernardino

County Republican Central Committee, Nancy McLain, treasurer (CA)

Complainant: FEC initiated (RAD)

Subject: Failure to file reports

timely; failure to file a complete

report timely

Disposition: $6,000 civil penalty ✦

MUR 4161

Respondents: (all in LA):

(a) Envoy, Inc. PAC, Don Garvey,

treasurer; (b) Radiofone, Inc.;

(c) Garvey Enterprises; (d) Don

Garvey; (e) Larry Garvey; (f) Brian

Baudot

Complainant: FEC initiated (RAD)

Subject: Corporate contributions,

corporate contributions in the names

of others

Disposition: (a-f) $30,000 civil

penalty

MUR 4185

Respondents: Bob Krueger Campaign (1993 special runoff election),

Nina Guinn, treasurer (TX)

Complainant: FEC initiated (RAD)

Subject: Failure to file 48-hour

report (candidate loan of $100,000)

Disposition: $10,000 civil penalty

MUR 4210

Respondents: Hoyer for Congress,

William I. Garner, Jr., treasurer (MD)

Complainant: FEC initiated (RAD)

Subject: Failure to file 48 hour

reports

Disposition: $15,000 civil penalty

MUR 4225

Respondent: Southeast Texas

Roundtable (TX)

Complainant: Stephen M. Clifford

(TX)

Subject: Disclaimer, failure to file

independent expenditure report

Disposition: Reason to believe, but

took no further action

MUR 4248

Respondents: Sheet Metal Workers

Local 25 Political Action League,

Michael F. Wymbs, Sr., treasurer (NJ)

Complainant: FEC initiated (RAD)

Subject: Failure to file disclosure

reports timely

Disposition: $2,500 civil penalty

MUR 4249

Respondents: (a) Clinton/Gore ’96

Primary Committee, Inc., Joan

Pollitt, treasurer (DC); (b) KING 5

Television, Tony Twibell, Station

Manager (WA)

believe, but took no further action

(exceeding overall spending limit;

excessive contributions; failure to

report contributions; corporate and

labor contributions); (b) probable

cause to believe, but took no further

action (excessive contributions); no

probable cause to believe (corporate

and labor union contributions; use

of nonfederal funds); (c) probable

cause to believe, but took no further

action (excessive contributions,

corporate and labor union contributions; use of nonfederal funds); (d)

probable cause to believe, but took

no further action (excessive contributions; use of nonfederal funds

[PA only]); no probable cause to

believe (use of nonfederal funds

[OH only]; corporate and labor

union contributions); (e) reason to

believe, but took no further action

(excessive contributions; use of

nonfederal funds; corporate and

labor union contributions); (a,b and

d) sent admonishment letters

MUR 3764

Respondents: Kasten for Senate

Committee, Inc., James R. Behrend,

treasurer (WI)

Complainant: FEC initiated (RAD)

Subject: Excessive contributions

Disposition: $17,000 civil penalty

MUR 4071

Respondents: Rick White for

Congress Committee, Dawna K.

Munson, treasurer (WA)

Complainants: King County

Democrats (WA)

Subject: Disclaimers

Disposition: No reason to believe

MUR 4156

Respondents: Friends of Jim

Moody, Robert H. Friebert, treasurer (WI)

Complainant: FEC initiated (RAD)

Subject: Excessive contributions

Disposition: $40,000 civil penalty

Index

The first number in each citation

refers to the “number” (month) of

the 1995 Record issue in which the

article appeared. The second number,

following the colon, indicates the

page number in that issue. For example, “1:4” means that the article

is in the January issue on page 4.

Advisory Opinions

1995-38: Corporate vendor and

nonconnected PAC with common

officer, 1:14

1995-40: Disaffiliation of PACs, 3:7

1995-41: Preemption of state

disclosure requirements, 2:3

1995-42: Using campaign funds to

pay child-care expenses, 2:3

1995-43: Refunding legal fees to

candidate committee, 3:8

1995-44: Presidential primary

candidate excused from filing 48-

hour notices, 3:8

(continued on page 12)
FEDERAL ELECTION COMMISSION

999 E Street, NW

Washington, DC 20463

Official Business

Penalty for Private Use, $300

Bulk Rate Mail

Postage and Fees Paid

Federal Election Commission

Permit Number G-31

Printed on recycled paper

Federal Election Commission RECORD March 1996

1995-45: Qualified campaign

expenses for ballot access, 3:9

1995-46: Purchase of candidate’s

book by his campaign, 3:9

1995-48: Preemption of Georgia law

limiting receipt of contributions,

3:10

Court Cases

FEC v. _____

– Democratic Senatorial Campaign

Committee (95-2881), 1:5

– Parisi, 3:6

_____ v. FEC

– Center for Responsive Politics, 1:3

– Chamber of Commerce of the

U.S.A., et al., 1:2

– Hooker, 3:7

– Maine Right to Life Committee, 1:3

– Minnesota Citizens Concerned for

Life, 3:6

– Stockman, 2:9

– Whitmore, 3:6

Reports

Electronic filing system, FEC

authorized to develop, 2:2

Point of entry change for House

candidates, 2:1

Schedule for 1996, 1:5

Special elections

– House, California’s 37th district,

2:5

– House, Maryland’s 7th district,

3:2

– House, Oregon’s 3rd district, 3:2

800 Line

Ballot access payments, 2:8

Conventions, permissible corporate

and labor activity, 2:7

Index

(continued from page 11)