Volume 11 r Numbe

ADVISORY OPINIONS

CLEARINGHOUSE

Pub lications

COURT CASES

Antosh v. FEC (Second Suit)

Orloski v. FEe (Second Suit)

FEC v. Anderson

DCCC v. FEc

FEC v. Hemenway for Congress Committe

New Litigation

INDEX

COMPLIANCE

Summary of MURs

800 IJNE

Using Excess Campaign Funds

6

4

5

6

6

6

6

8

8

1

I

4

TABLE OF CONTENTS

LEGISLAnON

Congress Repeals Expedited Review

Procedures

AO 1984-48: Campaign Travel

Reimbursements to State by

Governor's Senate Campaign

During his 1984 general election campaign for 

U.S. Senate, North Carolina Governor Jim H

had to reimburse the state government when 

contin

political parties, incumbent officeholders or p

or future federal elections. Nor do they otherw

include statements that reflect an election

fluencing purpose.

The Commission could not decide by 

required four-vote majority whether the Fu

payments for broadcasting three other propo

ads would constitute "expenditures" subject to 

election law. These ads refer to surveys wh

showed strong support among media persons 

Democratic candidates and weak support for 

publican candidates. Nor did the Commission 

dress the effect of the ad program on the t

exempt status of the Foundation or the F

because that issue is beyond its jurisdicti

(Note: Copies of the proposed ads are attached 

the opinion.) (Date issued: OCtober 12, 19

Length: 3 pages, plus 6-page supplement)

1325 K Street NW WashingtonDC 20463

FEDERAL ELECTION COMMISSION

February 1985

CONGRESS REPEALS EXPEDITED

REVIEW OF FEcA SUITS

On November 8, 1984, President Reagan approved the Federal District Court Reorganization

Act of 1984 (Pub. L. 98-620), a measure that

repeals provisions in the Federal Election Campaign Act, the Presidential Election Campaign

Fund Act and the Presidential Primary Matching

Payment Account Act which allow for expedited

consideration of federal election law-related

cases in the federal court system. The provisions

repealed are 2 U.S.C. sections 437g(a)(I0) and

437h(c) and the last sentence, respectively, of 26

U.S.C. sections 9010(e) and 9011(b)(2). Designed

to improve the functioning of the federal court

system, the new law also abolishes similar provisions in approximately 80 other civil statutes.

(See Title IV, Subtitle A of the new law.)

AO 1984-41: Nonprofit Corporation's Payments

for Public Media Ad<;

The National Conservative Foundation Endowment Fund (the Fund), a nonprofit corporation,

may use funds donated by a foreign national to

finance the broadcasting of three television ads

produced by another nonprofit corporation with

which the Fund is associated, the National Conservative Foundation (the Foundation). The purpose of the ads is to bring about more balanced

media coverage of political events and principles

by showing the alleged "liberal bias" of the

media's current coverage.

Although the election law prohibits foreign

nationals from making contributions in connection

with any American election and prohibits corporations from making contributions or expenditures

in connection with federal elections, payments for

the three ads would not be considered electioninfluencing contributions or expenditures, subject

to the prohibitions and requirements of the election law. 2 U.S.C. §§43 1(8) and (9), 441b and 441e.

The three ads (Le., "KAL-007," "Bill Moyers" and

"Bias-TurnerII) do not mention federal candidates,

•

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

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

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

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

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

February 1985 FEDERAL ELECTION COMMISSION

used a government aircraft to make eampaignrelated trips in the state. To determine the

amount of reportable reimbursements payable to

the state, his campaign committee, the Jim Hunt

Committee (the Committee), had to calculate the

costs allocable to campaign-related travel based

on: a) comparable rates charged by commercial

airlines for regularly scheduled nights to the

same location or b) in the absence of regularly

scheduled commercial flights, the comparable

costs for commercial charter flights. 11 CFR

106.3. In calculating campaign travel costs, the

Committee could not have used the travel reimbursement formula for publicly funded Presidential candidates. Nor could the Committee have

used a proposed formula for calculating costs

based on comparable charter flights. (See below.)

Moreover, expenditures for renting cars used at

ea mpaign stops had to aceura tely reflect the

usual and normal charges for the cars at the time

they were rented. 11 CFR 100.7(a)(l)Wi)(B). Accordingly, to comply with FEC rules in implementing its proposed reimbursement guidelines,

the Committee had to observe the following require ments:

o If Governor Hunt traveled to a location served

by a regularly scheduled com mercial airline,

the Committee had to reimburse the state for

the first class airfares of campaign staff

traveling to that location. The Committee did

not have the option of reimbursing the state for

the usual charge of a commercial charter flight

to the same location.

o If Governor Hunt traveled to a location that

was not served by regularly scheduled commercial flights, the Committee had to reimburse the state for the usual charter rate

charged for an aircraft comparable to the

government aircraft.

o In determining the amount to be reimbursed to

the state, the Committee did not have the

option of calculating the cost based on the

actual aircraft used.

o Concerning travel to locations not served by

regularly scheduled commercial flights, the

Committee had to calculate costs for a comparable commercial charter flight by first

determining the number of campaign staff who

made the trip. The Committee then had to

calculate the cost of a chartered aircraft

comparable to the government aircraft actually

used to make the trip. (For example, if the

government aircraft was a twin engine prop jet,

a commercially chartered single engine prop jet

would not be eornparable.) The Committee

\rbIume 11, Numr

could not use a pro rata formula that w

have involved determining the per passe

cost for the trip on a comparable comme

charter aircraft and multiplying that cos

the number of campaign staff who made 

trip.

o In calculating reimbursements based on c

parable costs of regularly scheduled comm

cial nights, the Committee had to reimb

the state for the first class airfares of c

paign staff only. Similarly, in calcula

campaign travel costs based on compar

charter flights, the Committee could use 

lower rates for a comparable charter airc

large enough to accommodate only camp

staff, rather than the higher rates fo

comparable chartered aircraft large enoug

accomodate both campaign and noncarnp

staff (e.g., security personnel).

The Commission noted that its response 

not address the adequacy of the Commit

prior reimbursements to the state for campa

related travel expenditures. Rather the Com

sion limited its response to the adequacy of 

Committee's proposed guidelines for pending c

paign travel. Nor did the Commission add

applicable state laws, which are beyond its ju

diction, or the election law's preemption of t

state laws. (Date issued: October 12, 1

Length: 12 pages)

AO 1984-57: Corporate Communications on

Legislation

Expenditures made by the Pacific Gas and E

tric Company (the Company) for an article p

lished in its weekly newsletter that supports p

ing federal legislation would not be consid

expenditures in connection with a federal e

tion. Instead, they would be analogous to lobb

expenses, which do not fall within the jurisdic

of the election law or FEC Regulations.

The Company's proposed article will men

the legislation, list its co-sponsors and sug

that readers (i.e., the Company's employees, 

tirees and employees on long-term disability) 

tact the bill's co-sponsors in the House and Se

and let them "know that their support [of the 

is appreciated." Although a corporation may 

make expenditures to influence federal electi

it may make disbursements, such as those 

posed by the Company, to prepare and distri

statements on issues of general public interes

U.S.C. S44Ib(a) and II CFR II4.2(a); AOs 1

2
FEDERAL ELECTION COMMISSION

AO 1984-58: City's Claim for Reimbursement of

Security Costs by Publicly Funded

Presidential Campaign

Under the Presidential Election Campaign Fund

Act (the Fund Act), the City of Cupertino, California (the City) could be reimbursed by ReaganBush '84 (the Committee) for security services the

City provided during a community college rally

held by the Committee on September 3, 1984. The

Committee was President Reagan'S principal campaign committee for his publicly funded general

election campaign. (Since the City had no police

force of its own, it had obtained the security

services from the Santa Clara County Sheriff's

Department.)

The Fund Act defines qualified campaign

expenditures as those incurred by a publicly funded Presidential candidate or his or her authorized

campaign committee to further the candidate's

election. Qualified campaign expenditures must

ebe incurred by an authorized agent of the campaign within the expenditure reporting period. 26

U.S.C. S9002(I I). In the case of a major party

candidate, the expenditure reporting period begins

on the first day of September in the election year

or on the date the candidate is nominated (whichever is earlier) and ends 30 days after the Presidential election. 26 U.S.C. S9002(6). Although the

Fund Act requires publicly funded candidates to

use federal funds exclusively for qualified campaign expenses, the Fund Act does not set forth

any criteria for determining whether and when a

qualified campaign expense has been incurred. 26

U.S.C. S9004(c). In this case, the City and Committee never concluded an agreement concerning

the security services. However, the City's expenditures for the services were campaign-related,

and the services were provided and the bill was

presented in September, well within the expenditure reporting period. Accordingly, the Fund Act

would not preclude the Committee from reimbursing the City for the security services, if the

Committee did, in fact, incur the expenses. The

Commission, however, does not have the authority

to decide whether the Committee did incur the

expenses. (The Committee claims it did not.) Such

determinations involve matters of contract law,

quasi-eontract law or other legal theory beyond

•

the Commission's jurisdiction. Commissioner Joan

D. Aikens filed a dissent. (Date issued: December

19, 1984; Length: 5 pages, including dissent)

•

February 1985

128 and 1980-95; First National Bank of Boston v.

Bellotti, 435 U.S. 765, 784-85 (1978).

The Commission expressed no opinion on relevant federal lobbying laws because they are

beyond its jurisdiction. (Date issued: December

13, 1984; Length: 2 pages)

3

\.rblume 11, NumtEr 

AO 1984-59: Candidate's Use of Campaign Asse

for Noncampaign Uses

The Russo for Congress Committee (the Comm

tee) may purchase a van to be used primarily f

campaign-related purposes. If Congressman Rus

occasionally uses the van for noncampaign pu

poses (Le., personal or official business), his rei

bursements to the Committee for the use of t

van would not be considered contributions to t

Com mittee. 2 U.S. C. §43 I(8)(AXO; 11 CFR 100

(a)( n,

The Committee should report Congressm

Russo's reimbursements for noncampalgn use 

the van as "other receipts" on line 15, page 2 

FEC Form 3. 11 CFR 104.3(a)(3)(x)j 104.3(a)(4)(x

The Committee must also report the full costs 

purchasing and operating the van as "operati

expenditures, II regardless of whether Congressm

Russo's reimbursements offset a portion of the

costs. 11 CFR 104.3(b)(4).

The Commission expressed no opinion on r

levant House rules and tax laws since they a

beyond its jurisdiction. (Date issued: Decemb

19, 1984; Length: 2 pages)

ADVISORY OPINION REQUESTS

The following chart lists recent requests f

advisory opinions (AORs). The full text of ea

AOR is available to the public in the Comm

sions Office of Public Records.

AOR Subject

1984-62 Campaign management corporatio

slate mail program endorsing feder

candidates and issues; reporting requir

ments. (Date made publics December 2

1984j Length: 3 pages)

1984-63 Savings and loan association PAC's so

citation of the association's mortga

and savings account holders. (Date ma

publics December 20, 1984; Length: 

pages, plus 8-page supplement)

1985-1 Committee's disposal of campaign ass

through sale or donation to nonpro

organization; definition of Tllfair mark

value. II (Date made public: January 

1985; Length: 5 pages)

1985-2 Candidate's use of surplus funds of sta

campaign to retire debt of federal cam

paign. (Date made publer January 

1985; Length: 1 page)

1985-3 Contribution received by local candida

from subsidiary of foreign corporatio

(Date made public: January 16, 198

Length: 1 page, plus 7-page supplement

continu
February 1985 FEDERAL ElECTION COMMISSION Volume 11, Numoo

Aoa

1985-4

1985-5

Subject

Payments to Senator for college seminar

courses. (Date made public: January 18,

1985; Length: 1 page)

Application of 1984 election cycle limits

to contributions received by candidate

after both the primary and general elections. (Date made public: January 18,

1985; Length: 1 page, plus 5-page supplement)

Excess Funds of Past campaign

In a similar vein, a candidate may tran

excess funds from a former campaign to his

current campaign. 11 CFR 1l0.3(a)(2)Civ). A

natively, a candidate may redesignate a for

campaign committee as the principal camp

com mittee of his/her current campaign and 

the excess funds of the previous campaign in 

current campaign. AO 1980-30.

USING EXCESS CAMPAIGN FUNDS

Following the 1984 elections, candidate committees have had questions concerning the use of

excess campaign funds. The following material

addresses this issue.

General Rule

Contributions received which, in the candida te's view, exceed the amount of funds needed to

defray campaign expenditures may be used for

any lawful purpose (except personal use). (See

Personal Use below.) For example, excess funds

may be used for a future election, a past election

debt, officeholder expenses, charity, and contributions to other political committees. II CFR

113.2.

Personal. Use

Although the 1979 amendments to the Act

prohibit candidates from converting excess funds

to personal use, this restriction does not apply to

individuals who were members of Congress on

January 8, 1980. 11 CFR lI3.2(d). In a recent AD,

the Commission said that a candidate who was

defeated in 1982 and 1984 could make personal

use of excess funds from those elections because

he had been a Member of Congress on January 8,

1980. AD 1984-47.

Use of Committee Assets

Committee assets, such as office equipment,

may be treated as excess campaign funds. AOs

1981-11 and 1984-50.

Excess Funds of Current Campaign

A candidate may determine that he/she has

excess campaign funds in a current campaign and

apply them [to a future election or] to the retirement of a debt of a former campaign. The contributions nevertheless count against the donor's

contribution limit for the current campaign. 11

CFR 1l0.3(a)(l)(iv) and 1I3.2(d). ADs 1980-143

and 1981-9.

4

ANTOSH v; FEC (Second Suit)

On Dece mber 21, 1984, the U.S. Dis

Court for the District of Columbia issued an o

granting plaintiff's motion for summary judgm

in James Edward Antosh v. FEC (Civil Action 

84-3048). The court found that the Commiss

dismissal of an administrative complaint 

Antosh had filed with the FEC was contrary 

law. On the same day, therefore, the court is

an order requiring the Commission to vacate 

determination in the ad ministra tive complaint 

to "reopen'[the complaintJ for further proceed

consistent with the court's opinion."

BackgrOWld

In filing his complaint with the FEC in 

1984, Mr. Antosh had alleged that:

o Engineers Poll tical Education Committee/In

national Union of Operating Engineers (EP

mom and Supporters of Engineers Loc

Federal Endorsed Candidates (SELFEC), the 

parate segregated funds of the Internati

Union of Operating Engineers and Engin

Local 3, had violated 2 U.S.C. §44l(a)(2)(A

making contributions in excess of $5,000 to 

1982 primary campaign of Thomas P. Lanto

Congressional candidate, and 1\1r. Lantos' p

cipal campaign committee;

o Mr. Lantos and his principal campaign com

tee had, in turn, violated 2 U.S.C. §441a(f

knowingly accepting the excessive contribut

(totaling $3,600); and

o Mr. Lantos, his campaign treasurer and 

principal campaign committee had viol

Commission Regulations by failing to report 

excessive contributions accurately. See 11 

I04.14(d).

In a report submitted to the FEC in 

1984, the General Counsel noted, however, 

based on an affidavit and a letter submitted 

the respondents, of the $3,600 alleged to 

excess contributions to the 1982 primary, $3

had in fact been designated for retiring debt

Mr. Lantos' 1980 general election campaign. 

General Counsel therefore concluded that the 
FEDERAL ELECTION COIVIMISSIOI\l

•

•

February 1985

union PACs had made excessive contributions of

$500 to Mr. Lantos' 1982 primary campaign rather

than $3,600. Accordingly, the General Counsel

recommended that "due to the small amount in

question" (i.e., excessive contributions of $500),

the Commission should find reason to believe that

the respondents had viola ted the Act, but take no

further action. The Commission followed the General Counsel's recommendations and closed the

file on MUR 1719.

In OCtober 1984 Mr. Antosh petitioned the

district court to take action against the FEC for

dismissing his administra tive complaint.

The District Court's Ruling

The court noted that in determining whether

an agency's determinations were "arbitrary and

capricious," the court's standard of review had to

be "a highly deferential one••.which presumes the

agency's action to be valid." In the case of Mr.

Antosh's complaint, however, the court found a

"problem in the Commission's treatment of this

matter." Specifically, although EPEC/lUOE had

designated $3,100 for retiring the Lantos committee's 1980 general election debt, committee reports indicated the contributions had been made

during May and June 1981, several weeks after

the committee had apparently extinguished the

1980 debt in mid-April 1981.

The court concluded that "the Commission

dismissed MUR 1719 because it only involved

violations of $500••••The violations in fact appear

to involve considerably more money, and are thus

more egregious than the Commission realized. For

these reasons, the Commission's dismissal of MUR

1719 was arbitrary and capricious and, thus, contrary to law." See 2 U.S.C. §437g(a)(8).

The Commission will not appeal the district

court's decision.

ORLOSKI v. FEe (Second Suit)

On December 7, 1984, the U.S. District Court

for the District of Columbia granted the FEC's

motion for summary judgment in Orloski v. FEC.

(Civil Action No. 83-3513) The court found that

the Commission's decision to dismiss an administrative complaint filed by the plaintiff in June

1983 was not arbitrary or capricious.

Background

On June 6, 1983, Mr. Orloski filed a complaint with the Commission concerning a picnic

allegedly sponsored by senior citizens to influence

the election of Mr. Orloski's opponent. The Commission had dismissed a similar complaint from

Mr. Orloski a year earlier. While challenging the

FEC's dismissal of his first complaint in the

district court, Mr. Orloski made factual allegations that were not contained in the original

complaint. Accordingly, in May 1983, the district

court issued an order and stipulation which dis5

\blume 11 ,Numoo

missed the case* but which allowed Mr. Orloski 

file a second complaint with the FEC. The F

considered Mr. Orloski's second complaint and, 

OCtober 4, 1983, once again found no reason 

believe that the respondents named in the co

plaint had violated the election law. As a result 

the FEC's action, Mr. Orloski decided to file 

second suit against the Commission.

District Court's Ruling on Second Suit

The district court concluded that the FE

had not acted contrary to law in finding 

reason to believe" that the respondents named 

Mr. Orloski's second administrative complaint h

violated the election law. The court held that 

FEC had properly concluded that the picnic sp

sored by the senior citizens was not a politi

event and therefore not SUbject to the prohi

tions and requirements of the election law. Spe

fically, the court confir med the FEC's det

mination that: 1) there were no com municatio

at the picnic that expressly advocated R

Ritter's election or Mr. Orloski's defeat (a

name tags worn by Rep. Ritter's staff); and 

there was no evidence to indicate that contrib

tions to Rep. Ritter's campaign were either so

cited or accepted at the picnic. The court co

cluded, "Orloski does not offer any compell

reason to believe the FEC was arbitrary in app

ing the two part test discussed above. Inste

Orloski attempts to convince the Court to appl

new test of holding any event not funded fr

funds appropriated to a congressional office to 

a political event....There is simply no support 

the statute, legislative history, or jud ictal d

cisions construing the Act to support this bro

test of political even ts."

Nor did the court find merit in Mr. Orlosk

contention that the election law requires the F

to investigate a complaint unless the compla

fails to allege violations of the election law. T

court found that "rather than requiring the Co

mission to investigate all facially valid co

plaints...t....e Commission may consider all 

information before it and exercise its own 

for med discretion....Thus the task of a court 

viewing a Commission determination not to inv

tigate a facially valid complaint is to determ

whether on the basis of all the information av

able to the Commission, the decision not 

investiga te was arbitrary or capricious. Here it 

clear...that the Commission's decision met t

standard."

On December 31, 1984, Mr. Orloski filed 

notice of appeal.

"'For a summary of the court's ruling on M

Orloski's first suit, see page 8 of the Febru

1984 Record.
February 1985 FEDERAL ELECTION COMMISSION \bIume 11, Numbe

FEC v. ANDERSON

On December II, 1984, the U.S. District

Court for the Eastern District of Pennsylvania

issued a consent order resolving claims the Commission had brought against Mrs. Mary Anderson,

the wife of 1980 Senate candidate Tom Anderson,

in FEC v. Anderson (Civil Action No. 84-2180).

(For a summary of the complaint, see page 8 of

the July 1984 Reeord.)

Within 30 days of signing the consent order,

Mrs. Anderson agreed to pay a $350 civil penalty

to the U.S. Treasury for having exceeded the

election law's contributions limits. 2 U.S.C.

§441a(a)( I)(A). By cosigning a $50,000 campaign

loan with her husband, the candidate, Mrs.

Anderson had made a $25,000 contribution to his

Senate campaign. The law limits contributions

from all individuals, including spouses, to $1,000

per candidate, per election.

DCCCv. FEC

On December 14, 1984, the U.S. Court of

Appeals for the District of Columbia Circuit

dismissed an appeal filed by the Democratic Congressional Campaign Committee (DCCC), the

plaintiff in DCCC v. FEC. (Civil Action No.

84-5810) DCCC had originally appealed the district court's decision to deny a preliminary injunction (Civil Action No. 84-3352), but later asked

the appeals court to dismiss its appeal. For a

summary of the decision given on November 5,

1984, by the U.S. District Court for the District

of Columbia, see page 3 of the December 1984

Record.

FEe v. HEMENWAY FOR CONGRESS

COMMITTEE

On December 26, 1984, the U.S. District

Court for the Western District of Washington at

Sea ttle issued a consent order resolving claims

brought by the FEC against the authorized principal campaign committee of Democratic House

candidate John D. Hemenway. (FEC v. John

Hemenway for Congress Committee; Civil Action

No. C83-1559R) Mr. Hemenway had campaigned

for a House seat from Washington's Seventh Congressional District in a 1977 special primary election. Under the terms of the consent order, Mr.

Hemenway's campaign committee, the John

Hemenway for Congress Committee (the Committee), acknowledged that it had committed violations of the election law's reporting requirements.

In November 1984, the Committee amended its

1977 year-end report to show, among other

things, additional receipts totaling more than

$82,000 and additional expenditures exceeding

$49,000.

The Committee also agreed to make its best

efforts to obtain, within 15 days after the consent

order was filed, additional information required

6

for 55 itemized contributions received by 

Committee during 1977. Within 60 days of 

filing of the consent order, the Committee wo

file an additional amended report disclosing 

information. Finally, the Committee agreed to:

o Pay a $500 civil penalty; and

o Pay $55 for court costs incurred by the FEC 

Iitlgating the case.

NEW UTIGATION

FEC v. Seafarers' Union of the Pacific

Political Fund

The FEC seeks action against the respec

separa te segregated funds (i.e., PACs) of th

maritime unions. The FEC claims that, as af

ated committees, the Union PACs made exces

contributions to California Governor J

Brown's 1982 Senate primary campaign. The F

asks the district court to:

o Declare that the defendant committees, S

farers' Union of the Pacific Political F

Marine Firemen's Union Political Action F

and Seafarers' Political Activity Donation, 

a ffili a ted committees within the meaning o

U.S.C. S441a(a)(5);

o Declare that the defendant committees 

lated 2 U.S.C. S441a(a)(2)(A) by, together, c

Senate

tributingprimarymore than

campaign;

$5,000 to Governor Bro

o Order the three defendant committees to 

close their affiliation by amending their resp

tive Statements of Organization;

o Assess a civil penalty against each commi

equivalent to the greater of $5,000 or 

amount equal to 100 percent of the amou

involved in the violation; and

o Permanently enjoin the defendant commit

from further violations.

U.S. District Court for the Northern Dist

of California, Docket No. C84-7763V-WW

December 10, 1984.

MUR 1354: Presidential Committee and Sing

candidate Committee Mfiliated

On September 30, 1984, the Commission ente

into a conciliation agreement with an authori

Presidential primary campaign committee an

single candidate committee.

Complaint 

The Commission initiated this matter ba

on a referral from the Reports Analysis Divi

concerning independent expenditures allege
FEDERAL ELECTION COIVIIVlISSIOI\J

•

•

February 1985

made by a single candidate committee on behalf

of a Presidential candidate in the 1980 primary

elections. The Com mission found reason to believe that:

o Both committees had failed to register the

single candidate committee as an affiliate of

the Presidential principal campaign committee

and had failed to disclose the expenditures of

the single candidate committee as authorized

expenditures by the Presidential primary

campaign;

o The principal campaign committee had exceeded its national spending limit; and

o A corporate vendor, which had provided consulting services to both committees, had made

illegal corporate contributions in the form of a

loan, and the committees, in turn, had accepted

them.

The Commission then initiated an investigation.

General Counsel's Report

RePOl"ting Requil"ements and Committee Affiliation. Under the Federal Election Campaign

Act {the Act), political committees are allowed to

make unlimited expenditures for communications

expressly advocating the election or defeat of a

clearly identified candidate for federal office.

However, these expenditures cannot be made with

the cooperation or prior consent oft or in consulta tion with, or at the request or suggestion of,

any candidate's campaign.

The issue in this matter is whether the expenditures made by a single candidate committee

in support of a Presidential primary candidate

were made independently of that candidate's principal campaign committee. According to the General Counsel's Repor-t, the single candidate committee did not qualify as an independent committee for the following reasons:

1. Both the single candidate committee and the

principal campaign committee used the same

vendor (consultant); and the vendor used the

same information in the development and

creation of advertisements for both committees.

2. An agent of the principal campaign committee

(as defined in 11 CFR § 109.I{b){5)) was

involved in fundraising and reviewing advertisements for the single candidate committee.

3. The single candidate committee was created,

controlled and operated by the principal campaign committee; the officers of the single

candidate committee were figureheads with no

decision -making authority.

Thus, the General Counsel's Report recommended

that the Commission find probable cause to believe that both committees violated 2 U.S.C. §433

by failing to register the single candidate committee as an authorized committee. The Report

also recommended that the Commission find probable cause to believe that both committees vio7

\blume 11, Numt:e

lated 2 U.S.C. S434(b) by failing to report t

financial activity of the single candidate comm

tee as authorized expenditures by the President

campaign.

Expenditure Limits Exceeded. President

primary candidates who accept matching fun

must comply with an overall national spend

limit. 2 U.S.C. § 44Ia{b). A final audit of t

principal campaign committee in this case-show

that the committee was only $188,000 away fr

the $14t710,000 overall expenditure limit 

1980). Therefore, when the single candidate co

mittee's expenditures ($248 tOOO) were added 

the expenditures of the principal campaign co

rnittee, the overall Presidential limit was e

ceeded. The General Counsel's Report reeo

mended, therefore, that the Commission fi

probable cause to believe that the principal ca

paign committee violated 2 U.S.C. S44Ia{b){I).

Corporate Contributions. A corpora te ve

dor's failure to collect a debt owed by a politi

committee can result in a prohibited corpor

contribution to the committee. In this case, t

General Counsel concluded the consultant had n

violated 2 U.S.C. §441b because his dealings w

both committees were within the normal cou

of business. See 11 CFR § 114.10. The vendor h

tried to recover outstanding bills, even throu

litigation; and while there was no contract b

tween the vendor and either of the committe

40 percent of the vendor's accounts did not ha

written contracts.

Commission Determlnatlon

On September 29, 1983, the Commiss

found probable cause to believe that the follow

violations of the Act had occurred:

1. The single candidate committee violated 

U.S.C. §S443 and 434;

2. The principal campaign committee violated 

U.S.C. §§433 and 434; and

3. The principal campaign committee violated 

U.S.C. S44Ia{b).

The Commission found no probable cause to b

lieve that the vendor violated 2 U.S.C. §44Ib.

On October 3, 1984t the Commission enter

into a conciliation agreement with both respo

dent Committees. Respondents agreed to pay 

civil penalty of $10,000 to the U.S. Treasurer a

not to undertake any activity in violation of t

Act.
February 1985 FEDERAL ELECTION COMMISSION \bIume 11, Numb

This abridged index references advisory o

ions, court cases and 800 Line articles publi

in the Record. (A comprehensive subject ind

published annually as a supplement to the 

cord.) Citations are expressed as follows: "

The first number in the citation refers to 

"Number" (month) of the Record issue. The se

number, following the colon, indicates the 

number in that issue. Thus, "1:4" means the 

cle is in Record Number 1 (January), on page 4

UPDATED PUBLICATIONS FOR STATE

AND LOCAL ELECTION OFFICIALS

Two recent pubtications are available to

state and local election officials:

o Election Directory 84 includes the name, address and telephone number of over 400 key

federal, state and local election officials. $2.25

per copy; order no. 052-0 06-00031-7.

o Campaign Finance Law 84 summarizes state

campaign finance laws and provides comparative charts on: campaign finance reporting requirements; contribution and solicitation limits;

and special tax and public financing provisions.

$9.50 per copy; order no. 052-00600030-9.

Write the Superintendent of Documents,

Government Printing Office, Washington, D.C.

20402, making reference to the publica tion and its

order number.

FEDERAL ELECTION COMMISSION

1325 K Street, N.W.

washington, D.C. 20463

Official Business

OPINIONS

AO 1984-16: Single Contribution Limit for 

vention and Primary, 1:3

AO 1984-33: PAC Fundraiser Paid by Trade A

ciation's Allied Mernbers, 1:3

AO 1984-53: Real Estate Lessors as Federal 

tractors, 1:4

AO 1984 -54: ReportingICon tribution Limits 

Candidate in Lou isiana Pri mary, 1:5

AQ 1984-55: Solicitation of Law Firm's Part

by Bank PAC, 1:5

AO 1984 -56: Exclusion of Book Pay ments f

Definition of Honorarium, 1:5

COURT CASES

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

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

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

First Class Mail

Postage & Fees Paid

FEC

Washington, D.C.

Permit No. G-31