' 

THE FEDERAL ELECTION 

COMMISSION 

1325 K Street N.W ., Washington, D.C. 20463 

Volume 4, Number 9 

INFORMATION 

Under this heading, the Record periodical ly summarizes 

new developments of general interest to candidates for 

Federal office and committees which support such candidates. 

TREATMENT OF 

PROHIBITED CONTRIBUTIONS 

The Commission recently approved a Notice to all candidates and committees regarding its pol icy on the making 

and acceptance of corporate and labor organization contributions. In the course of carrying out its supervisory responsibilities, the Commission has noted many instances of 

candidates and/or committees accepting these contributions. Under the Act, corporations and labor organizations 

are prohibited from making contributions (or expenditures) 

in connection with Federal elections. Candidates and committees are prohibited from accepting or receiving such contributions. 

In the past, the Commission has usually regarded the 

refunding of a prohibited contribution within a reasonable 

time as voluntary compliance with the Act. In such instances, no enforcement action, such as a civil penalty, was 

taken against the contributor or the recipient. During this 

election year and in the future, however, the Commission 

will not only require that the ill egal corporate or labor 

organization contribution be refunded but, in appropriate 

circumstances, will also assess a civil penalty against the 

contributor and/or the recipient. 

Candidates and committees are urged to be especially careful in accepting contributions from possible illegal sources. 

The regu lations set out a procedure for handling such contributions (1 1 CFR 103.3(b)). (For a discussion of this 

September 1

procedure, see the Record , April 1978, p. 5.) Candid

and committees should review this procedure and exe

"close scrutiny and careful investigation of any sus

contribution." 

To assist candidates and committees in complying with 

provision of the Act, the Notice clarifies the differe

between three types of corporate accounts used by 

ployees: 

1. Repayable Drawing Accounts. Contributions from 

account on which an employee may draw, but must 

repay, are considered corporate contributions for 

period that the draw is outstanding. Therefore, 

contributions are prohibited. 

2. Nonrepayable Drawing Accounts. Contributions fro

nonrepayable drawing account, established to perm

employee to draw against his/her salary, profits or c

missions, are considered personal contributions of 

employee. Such contributions are lawful and are sub

to the individual contribution I imitations. 

3. Expense Accounts. Contributions from expe

accounts funded by a corporation are prohibited. 

EXTENDED OFFICE HOURS 

Between September 5, 1978, and the General Elec

tion, November 7, 1978, the Commission's Office o

Public Communications will maintain extended offic

hours to accomodate calls from candidates and com

mittees in Western time zones. Information Specia

ists will be available between 9:00 a.m. and 7:3

p.m., Eastern time. During these hours, candidate

and committees may call toll-free, 800/424-9530

for information about the Act and regulations. Copie

of reporting forms and publications may also b

ordered. 
OPINIONS 

PENDING ADVISORY OPINION REQUESTS 

The following chart lists pending Advisory Opinion 

Requests (AOR's), with a brief description of the subject 

matter, the date the requests were made public and the 

number o f pages of each request. The full text of each AOR 

is available to the public in the Commission 's Office o f 

Public Records. 

AOR 

1978-44 

1978-45 

1978-46 

1978-47 

1978-48 

1978-49 

1978·50 

1978-51 

1978-52 

1978-53 

A· E 

1978-54 

Subject 

Summer intern program sponsored by 

Senator. 

Rate of payment 

for billboard. 

Corporate advertising 

in connection with 

State partY activity. 

Limitations on contributions by trade 

association. 

Use of electric car. 

Reporting of in-kind 

contribution. 

State party activity 

on behalf of Federal 

and non-Federal 

candidates. 

Contribution from 

American Indian 

tribe. 

Candidate partici· 

pat ion in corporate 

program. 

Acceptance of contributions from 

National Educat ion 

Association's separate 

segregated fund. 

Preemption of Ala· 

bama law concerning 

campaign financing. 

Date Made 

Public 

7119/78 

7119/78 

7125178 

7125178 

7125178 

7128/78 

713 1/78 

8/3/78 

8110/78 

8110/78 

8110/78 

Numbe r of 

Pages 

3 

2 

3 

2 

19 

2 

4 

13 

17 

AO R 

1978-55 

1978-56 

1978-57 

1978-58 

1978-59 

1978-60 

1978-61 

Subject 

Withdrawn. 

Simultaneous status 

as candidate and 

president of unincorporated association. 

Multicandidate comcommittee status for 

party committee. 

Establishment of 

national party 

committee. 

Definition of 

honorarium. 

Use of network 

television tape 

in campaign. 

Solicitation of 

corporate franchisees. 

Date Made 

Public 

8110/78 

8110/78 

8114/78 

8114/78 

8114178 

8115/78 

ADVISORY OPIN IONS: SUMMARIES 

Number o

Pages 

1 1 

2 

2 

21 

Designated as AO's, Advisory Opinions discuss the app

cation of the Act or Commission regu lations t o speci

factual situations. Any qualified person requesting 

Advisory Opinion who in good faith acts in accordan

with t he opinion wi ll not be subject t o any sanctio

under t he Act. The opinion may also be relied on by a

other person involved in a specific transaction which 

indisti nguishable in all material aspects from the activ

discussed in the Advisory Opinion. Those seeking guidan

for their own act ivity should consult the full text of 

Advisory Opinion and not rely only on the summa

given here. 

AO 1978-9 : Act ivit ies of 

Party Organ ization 

For purposes of the contribution limitations, the Repub

can State Central Committee of Iowa (State Committe

is a separate political committee from the various coun

central committees (County Committees) in the Sta

whi ch qualify as "polit ical committees" under the A

and regulations. The concl usion is based on the fac

submitted by the State Committee t h at: 

.. Contributions by the County Committees to candidat

for Federal office are "not made in cooperation, consu

tation, or concert with, or at t he request or suggest i

of, the State Committtee .. . "; 

The RECORD is published by the Federal Election Commission, 1325 K Street, N.W, Washington, D.C. 20463. Commissioners are: Joan D. Aikens, Chairman; Robert 0. Tiernan, Vice Chairman,· Thomas E. Harris; William L. Springer; 

Neil Staebler; Vernon W Thomson; J.S. Kimmitt, Secretary of the Senate, Ex Officio; Edmund L. Henshaw, Jr., Clerk 

of the House of Representatives, Ex Officio. For more information, call 523-4068 or toll free 800/424·9530. 

2 
-- The County Committees receive no funds (other than 

proceeds of joint fundraising) from the State Committee; 

-- The County Committees are created by statute and not 

established, financed, maintained or controlled by the 

State Committee; and 

-- Each County Committee elects its own officers and 

adopts its own constitution and bylaws. 

Therefore, because they are separate political committees, 

contributions to or by the State Committee and the County 

Committees are not aggregated under one contribution 

limitation. 

The party's auxiliary bodies (e.g., Federation of Republican 

Women, Young Republicans, College Republicans), which 

are "political committees" as defined by the Act, are not, 

however, considered separate committees for purposes of 

the contribution limitations. Provisions in the State statutes 

and State Committee's bylaws provide for the establishment of these auxiliary bodies. They also coordinate their 

activities and finances with the State Committee. Therefore, contributions by the auxiliary bodies are subject to 

the limitations which govern State Committee activity. 

County committees or auxiliary bodies which are not 

"political committees" as defined in the Act, may make 

contributions up to $1,000 in a calendar year to candidates 

for Federal office without incurring any obligation to register or report. Any such contributions must be lawful under 

the Act. In this case, however, because the party units are 

not "political committees," contributions to or by the 

party units do not count against the limitations of or need 

be reported by the State Committee. The State Committee's limitations would apply and a reporting obligation 

would occur only if: 

-- The party unit becomes a "political committee" which 

is established, financed, maintained or controlled by 

the State Committee ; or 

-- The unit is a fundraising agent for the State Committee. 

The Act's provision for a special party expenditure limitation (2 U.S.C. §441a(d)) gives only one shared limitation 

to the entire State party organization. Thus, individual 

party units (such as county committees or auxiliary bodies) 

do not each have a limit separate from the State Committee. The regulations set out alternative methods for the 

administration of this single State party limitation and the 

requirements for reporting this activity. 

The special $1,000 coordinated spending limitation for 

party committees (11 CFR 110.7(b)(5)) is available for 

use only in connection with the general election for 

Presidential candidates. Therefore, it may not be used 

in connection with the 1978 general election. 

Under certain conditions, the Act exempts from the definition of contribution and expenditure the costs of a slate 

card, sample ballot or "other printed listing" prepared by 

a party committee. The slate cards may include information identifying candidates by name, office or position 

currently held, office sought and party affiliation. They 

may also include certain other voting information. Pictures 

of the candidates may be used for identification purposes. 

3 

However, additional biographical information or mate

on the candidates' or party's philosophy or positions 

issues is not permissible. Materials which qualify un

this provision may be distributed in direct mass maili

Vice Chairman Robert 0. Tiernan filed an opinion diss

ing from the majority's opinion on separate contribu

limitations for the State Committee and the County C

mittees. Commissioner Thomas E. Harris concurred in 

dissent. (Length, including dissenting opinion, 21 pages

AO 1978-21: Separate Segregated Fund of 

Foreign-Owned Corporation 

The Budd Company (the Company) may continue 

administer its separate segregated fund (the Commit

after becoming a wholly-owned subsidiary of Thys

A.G., a West German corporation. Because the Comp

will retain its autonomous corporate form (as a Penn

vania corporation) and its principal place of business 

remain in the United States, the Company will no

considered a "foreign national" which, under the Ac

prohibited from making contributions in connection 

Federal elections (2 U.S.C. § 441 e; 11 CFR 110.4(a)). 

The conclusion was based on several assumptions: 

-- Contributions to the Committee are not solicited 

accepted from foreign nationals; 

-- Solicitations for the Committee and contribution

expenditures made by the Committee are in accord

with the Act and regulations; 

-- Individuals exercising decision-making authority in 

Committee are citizens of the United States (or, law

admitted for permanent residence); 

-- Decisions made by those individuals are not "dict

or directed by personnel of Thyssen, A.G. or any o

foreign corporation, who are foreign nationals." 

Commissioners Thomas E. Harris and Neil Staebler jo

filed a dissenting opinion. (Length, including dissen

opinion, 5 pages) 

FORMS 

Forms for candidates and committees to registe

and report are available at any time by contacting: 

Office of Public Communications 

Federal Election Commission 

1325 K Street, N.W. 

Washington, D.C. 20463 

Telephone: 202/523-4068 

Toll-Free: 800/424-9530 

Candidates and committees should use the revise

form for reporting receipts and expenditures, which 

designated in the upper left hand corner as: FE

Form 3 REVISED, January 1978. Candidates an

committees may make and use photocopies of stan

dard FEC forms. 
PROCEDURES 

REQUESTS FOR COPIES OF REPORTS 

The Office of Publ ic Records anticipates a large volume 

of requests for copies of candidate and committee reports 

of receipts and expenditures during the four-week period 

immediately preceeding the general election. Although the 

Office will be using additional staff and working extra 

hours in an attempt to maintain its normal turn-around 

time for filli ng orders (two to ten days), this cannot be 

guaranteed. The Office suggests, therefore, that individuals 

who wish to obtain copies of reports filed prior to this 

pre-election period, should do so immediately. Orders 

can be filled more quickly during September. 

Residents in the Washington, D.C. area are urged to come 

in person to the Office of Public Records, located on the 

street level at 1325 K Street, N .W. The Office is open 

weekdays, 9 a.m. to 5 p.m., with extended hours during 

reporting periods. For th ose living outside the Washington 

metropoli tan area, copies of documents are available by 

mail. The Commission charges 10 cents per page. Since 

full payment in advance is required, it is recommended 

that, prior to requesting a specific document by mail, the 

public should phone the Office f or information as to cost 

and availability: 202/523-4181 or toll-free 800/424-9530. 

PUBLICATIONS 

NEW CAMPAIGN GUIDE 

FOR POLITICAL COMMITTEES 

The Commission recently published a new Campaign 

Guide for Political Committees. The Guide focuses on the 

requirements, under the Federal Election Campaign Act, 

of pol itical committees which have not been authori zed by 

any candidate for Federal office. Note, however, this Guide 

FEDERAL ELECTION COMMISSION 

1325 K STREET, NW 

WASHINGTON , DC 20463 

OFFICIAL BUSINESS 

does not discuss the special rules governing solicitations a

communications by separate segregated funds, the activiti

of their connected organizations (e.g., corporations a

labor organizations), or the special rules governing expen

ture activity and reporting of party committees. 

The Guide contains a discussion of the basic differenc

between contributions and expenditures, and details reco

keeping, registration and reporting requirements. In ad

tion, the Guide describes the various ways a committee m

support candidates and other committee activ ities such 

fundraising and advertising. 

Copies of the Guide will automatically be sent to all reg

tered pol itical committees (except those authorized by 

candidate) and individuals on the Record mailing li

Additional copies of the Guide are available from the Co

mission's Office of Public Communications. 

Congressional candidates and their authorized committe

should continue to use the previously published Campai

Guide for Congressional Candidates and Their Committe

It contains much of the same material as the new comm

tee Guide, but with an emphasis on the special requi

ments for candidates. 

UPDATE OF MATERIALS AVAILABLE 

In addition to the new Campaign Guide (see above), t

Office of Public Communications will provide, up

request, free copies of the following publications: 

-- Federal Election Campaign Laws 

-- FEC Regulations 

-- Bookkeeping and Reporting Manual for Candidates 

and Committees 

-- Campaign Guide for Congressional Candidates and 

Their Committees 

-- Campaign Guide for State and Subordinate Party 

Committees 

Fl RST-CLASS MAlL 

POSTAGE & FEES PAID 

FEDERAL ELECTION COMM ISSION 

WASHINGTON , D. C. 

PERMIT NO. G31 
AO 1978-34: Use of Business Phones 

by Candidate 

The Citizens for Downey '78 Committee (the Committee) 

may use corporate or noncorporate business telephones 

for its campaign activity instead of establishing the Committee's own phone bank. However, the Committee must 

reimburse the businesses, within a reasonable time, for 

the normal and usual rental charge of such facilities. If not 

reimbursed, the businesses are considered to have made an 

in-kind contribution. 

Normal and usual rental charge is considered the cost of 

renting the phones in the normal market, " . . . including 

the costs for the use of office space, utilities and furniture 

to conduct the telephoning." Therefore, the Committee 

may not use the per-call cost charged by the New York 

Telephone Company as the only basis for reimbursement. 

The difference between this charge and the normal and 

usual rental charge would constitute a contribution in-kind 

by the businesses to the Committee. In the case of a 

corporate business, this contribution is prohibited. An unincorporated business may make a contribution in-kind 

,subject to the $1 ,000 per election limitation of the Act. 

(Length: 3 pages) 

AO 1978-36: Activities of Separate 

Segregated Fund 

The National Nutritional Foods Political Action Committee 

(NNFPAC), the separate segregated fund of a trade association, is not prohibited by the Act from spending funds to 

influence legislative action on particular issues. NNFPAC 

may also use its voluntary contributions to communicate 

with the general public on legislative issues provided the 

communications do not solicit contributions to NNFPAC. 

Such expenses paid by NNFPAC must be reported as 

disbursements by the political committee. 

The Commission noted it could not address any possible 

application of the Federal lobbying statutes or the Internal 

Revenue Code to such activities. The Commission has no 

jurisdiction in these areas. (Length: 2 pages) 

AO 1978-41: Contribution Limitations 

Gerald B. Solomon, a candidate for the U.S. House of Representatives, may accept contributions from an individual 

totaling $1,000 with respect to the primary election and 

$1 ,000 with respect to the general election. These limitations apply even t hough Mr. Solomon will be unopposed in 

the New York State primary election on September 12. The 

Commission noted that, if Mr. Solomon's name appeared 

on the primary election ballot, he would have to file the 

pre- and post-election reports for that election, even though 

"there is no other candidate listed on the ballot in opposition to [him] ." (Length: 2 pages) 

AO 1978-43: Use of Surplus 

Campaign Funds 

Upon her retirement from Congress, Congresswoman 

Barbara Jordan may use surplus funds from previous 

campaigns "to employ staff and pay the incidental expenses .. . in the performance of duties which are imposed by virtue of having been a member of Congress." 

(2 U.S.C. § 439a ; 11 CFR 113.2.) The opinion noted 

4 

that any possible application of the Rules of the H

of Representatives or the Internal Revenue Code t

activity described is not within the Commission's 

diction. (Length: 2 pages) 

~-------- THE LAW 

IN THE COURTS 

FEC v. NATIONAL EDUCATION 

ASSOCIATION, et al. 

On July 20, 1978, the U.S. Distri ct Court of 

District of Columbia granted the Commission's m

for summary judgment in this case. The FEC had 

suit against the National Education Association (N 

its separate segregated fund (NEA-PAC) and eig

of its State affiliates seeking to enjoin them from co

ing political contributions by means of a "reverse c

off" procedure. Under this procedure, a political co

bution is automatically deducted from a member's s

along with his/her dues payment. The contributi

subsequently refundable upon written request by 

member. 

In addition to granting summary judgment, the C

issued the following orders: 

Defendants are permanently enjoined from using 

reverse check-off procedure to collect political c

butions to NEA-PAC. 

-- Defendants, in consu ltation with the Commission, 

prepare a plan by which its members will be info

of the suit and the decision of the Court. In add

the plan must provide a method by which the mem

are afforded an opportunity to obtain, at no expen

them and with minimal effort, a refund of any m

deducted from their paychecks through the re

check-off. The plan must be presented to the Cou

August 25, 1978. 

-- Defendants' counterclaim against the Commission 

dismissed. 

FEDERAL REGISTER 

NOTICES 

The following list identifies all FEC documents a

ing in the Federal Register between June 8, 1978

August 16, 1978. 

Federal Register 

Notice Title Publication Date Cit

1978-6 Rules of Procedures 7/21/78 43 FR 3

1978-7 Proposed Notice of 7/26/78 43 FR 3

New Systems of 

Records 
REGULATIONS 

e FREEDOM OF IN FORMATION 

ACT REGULATIONS 

On July 13, 1978, the Commission approved its Freedom of Information Act regulations. The regulations 

emphasize the Commission's policy of regu larly making as 

much information available to the public as possible, 

thereby not requiring individuals to formally submit 

requests for information under this Act. The regulations 

state: 

The Commission will make the fullest possible 

disclosure of records to the public, consistent 

with the rights of individuals to privacy, the 

rights of persons contracting with the Commission with respect to trade secrets and commercial or financial information entitled to confidential treatment, and the need for the Commission to promote free internal policy deliberations and to pursue its official activities without undue disruption. 

The regulations list the scope and avai lability of records and 

nine specific categories of exemptions. Procedures for 

requesting records under the Freedom of Information Act 

are described, as are the procedures for appealing a denied 

request. 

COMPLIANCE 

FEC PUBLISHES NAMES OF NONFILERS 

The Commission is required by the Federal Election 

Campaign Act to publish the names of candidates and political committees who fail to file required reports of receipts 

and expenditures. 

Before publishing the name of a candidate or committee 

who has failed to file, the Commission sends them at least 

two notices. If, fol lowing receipt of these notices, a candidate or committee continues not to file the required 

reports, the name of that "nonfiler" is made public. (In the 

case of primary election reports, the "nonfilers list" is 

published two to three days prior to the election.) The 

following is a list of recent nonfiler actions taken by the 

Commission: 

Publication 

Date 

7/21/78 

e 7/29/78 

Report Not 

Filed 

May 20 

(Monthly) 

Kansas 

(Pre-Primary) 

Number of 

Nonfilers 

2 

5 

Publication Report Not Number of 

Date Filed Nonfilers 

7/31/78 Indiana 4 

(Post-Primary) 

7/31/78 North Carolina 2 

(Post-Primary) 

8/1/78 Tennessee 8 

(Pre-Primary) 

8/4/78 Texas 4 

(Post-Primary) 

8/5/78 Georgia 6 

(Pre-Primary) 

8/5/78 Michigan 3 

(Pre-Primary) 

8/5/78 Missouri 8 

(Pre-Primary) 

8/7/78 Nebraska 2 

(Post-Primary) 

8/ 14/78 Pennsylvania 9 

(Post-Primary) 

AUDITS 

AUDITS RELEASED TO THE PUBLIC 

The Federal Election Campaign Act requires the Commission " ... to make from time to time audits and field 

investigations with respect to reports and statements filed 

under the Act." The Commission is also required to conduct audits of all campaigns of Presidential candidates who 

receive publ ic funds. Once an audit is completed and an 

audit report is approved by the Commission, the report is 

made publ ic and is available in the Office of Public Records 

and the Press Office. The following is a chronological listing 

of audits released as of August 18, 1978. 

Audit 

1. Nevada State Democratic Central 

Committee Get-Out-the-Vote 

2. Hearnes for Senator Committee 

3. Danforth for Senator Committee 

4. Gun Owners of America Campaign 

Committee '76/Gun Owners of 

California Campaign Committee/ 

Gun Owners of America Legislative 

Action Fund 

Date Made 

Public 

7/25/78 

8/2/78 

8/2/78 

8/ 10/78