THIS IS the EIND of UIUR P. G6a(

FEDERAI ELECTION COMMISSION 1.325 N~ SI k II N.W. WASHINGTO0N. D.C. 20463

THIS IS THE EIND OF UIUR P. g6A(

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FEDERAL ELECTION COMMISSION 1325 K STREET N.W WASHING rON,D.C. 20463 F47SQ January 26, 1979 CERTIFIED MAIL RETURN RECEIPT REQUESTED Mr. Dana W. Haas 516 Cannon House Office Building Washington, D.C. 20515

RE: MUR 806 Dear Mr. Haas:

On January 25 ,1979,, the Commission voted to find no reasonable cause to believe that a violation of 2 U.S.C. §4 34 (b) (5) ; 4 4la (a) (1) (A) ; or 441la has occurred and to terminate its investigation in MUR 806. A copy of the Commission' s determination and the General Counsel's Report is enclosed for your information. Accordingly, the Commission intends to close its files in this matter.

William C. Oldaker _General Counsel Enclosures

1. Commission certification 2. General Counsel's Report e(Y FEDERAL ELECTION COMMISSION 1325 K STREET NW Jnay2,17 WASHINGTON,D.C. 20463

CERTIFIED MAIL RETURN RECEIPT REQUESTED Mr. Gordon Garrett Campaign Director Don Allegrucci for Congress Committee P.O. Box 1536 Pittsburg, Kansas 66762

RE: MUR 806 Dear Mr. Garrett:

On January 25 ,1979, the Commission voted to find no reasonable cause to believe that a violation of 2 U.S.C. S§434(b) (5); 441a(a) (1)(A); or 441g has occurred and to terminate its investigation in MUR 806. A copy of the Commission's determination and the General Counsel's Report is enclosed for your information. Accordingly, the Commission intends to close its files in this matter. Sincerely,/

William C. Oldaker General Counsel Enclosures

1. Comimission certification 2. General Counsel'Is Report

c401U)~ BEFORE THE FEDERAL ELECTION COMMISSION

In the Matter of) MUR 806 Dr. Robert Whittaker, and ) The Whittaker for Congress ) Committee (Kansas))

CERTIFICATION

1I,Marjorie W. Emnmons, Secretary to the Federal Election Commission, do hereby certify that on January 25, 1979, the Commission determined by a vote of 5-0 to adopt the following recommendations, as set forth in the General Counsel's Report dated January 19, 1979, regarding the above-captioned matter: 1. Find no reasonable cause to believe a violation of 2 U.S.C. S434(b) (5); S441a(a) (1)(A); or S44lg of the Act has been committed by respondents Dr. Robert Whittaker and the Whittaker for Congress Committee. 2. Close the file. 3. Send the letters attached to the above- named report. Voting for this determination were Commissioners Springer, Aikens, Tiernan, McGarry, and Thomson. Attest:

Date V Marjorie W. Emmons Secretary to the Commission

Received in office of Commission Secretary: 1-22-79, 11:56 Circulated on 48 hour vote basis: 1-23-79, 9:00 Al' A 'I' 4'0

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'9 1 34'4 irs BEFORE THE FEDERAL ELECTION COMMISSION

In the Matter of 9 A 22 II 56

Dr. Robert Whittaker, and ) MUR 806 The Whittaker for Congress ) Committee (Kansas))

GENERAL COUNSEL' S REPORT

On October 29, 1978, the Office of the General Counsel received a complaint from Gordon Garrett, Campaign Director of the Don Allegrucci for Congress Committee against Dr. Robert .0 Whittaker and the Whittaker for Congress Committee. The complaint alleged that Whittaker received payments of $1,000 per month from his optometric partnership throughout 1978 which Whittaker described, at various times, as salary, loans and installments in a buy-sell

- agreement that would be applied to purchasing Whittaker's share of the partnership if his congressional campaign was successful or a

C" loan if it was unsuccessful. Taking these allegations as true, there appeared to be a possible violation of the Act because neither Whittaker or the Whittaker for Congress Committee reported the receipt of these payments. Therefore, on November 28, 1978, the Commission voted to adopt the General Counsel's recommendation to find "reason to believe" a violation had occurred, and to open an investigation to determine whether the $1,000 monthly payments Dr. Whittaker received from his optometric partnership violated 2 U.S.C. S424(b) (5) for the committee's failure to report contributions; 2 U.S.C. S44la(a) (1)(A) for the candidate's receipt of contributions in excess of the con- -2- tributions in excess of the contribution limitations; and in a separate transaction, 2 U.S.C. S441g for the committee's receipt of illegal cash loans. Respondents' answers to Commission questions were received by the Commission on December 14, 1978.

Anayi Respondents' answers indicate that the $1,000 monthly payments received by Dr. Whittaker from his optometric partnership were installments in an oral buy-out agreement whereby Dr. J. David Crum (Whittaker's partner) was to buy-out Dr. Whittaker's share of the partnership. The payments were to be applied toward the ultimate purchase price to be determined pursuant to the terms of the partnership agreement. In the event that the sale did not go through, the payments received by Dr. Whittaker would serve to reduce his share of partnership profits until such time as Dr. Whittaker, at his option, repurchased that portion of the practice as reflected by the sums paid by Dr. Crum to Dr. Whittaker. The terms of this oral agreement are verified in the affidavits of Dr. Whittaker, Dr. Crum and Joseph F. Shupe, the partnership's accountant. These affidavits also indicate that the money paid to Whittaker came out of Crum's funds despite the fact that the checks used were drawn on the joint account of Whittaker and Crum at the Prairie State Bank in Augusta, Kansas. The forml "Partnership Dissolution and Purchase Agreement" was executed by Whittaker and Crum on December 26, 1978. -3-

The possible 2 U.s.c. S441g violation concerned two "cash" loans, totalling $15,000 that Whittaker made to his committee. Copies of cancelled checks received from Whittaker, however, demonstrate that these loans were made by check and therefore not in violation of 2 U.S.C. S44lg.

Recommendation

1.- Find no reasonable *cause,-,tobelieve aviolation of2 U.S.C. S434 (b) (5); S44la (a)(1) (A); or S44lg of the Act has been committed by respondents Dr. Robert Whittaker and the Whittaker for Congress Committee. 2. Close the f ile. 3. Send the attached letters.

Date ~William C Olae General Counsel

Attachments 1. Respondents' answers to Commission questions 2. Partnership Dissolution and Purchase Agreement 3. Letters sorn WHITTAKER NIgTnic. K*NA

COUNTIES ALLEN LANE.F UNN AOVSON LVOIN SUTLER MIAMI C14ASM OV~ CHAUTAUOU A MORRIS NOW~ ot ReprezentatibtoWSINT1 CI4ENOKEE CANNON HOUSE OFFICE BUILDING ,Alm% it5Bi coFFEy WSH4INGTON. D.C. 20515 COWLEY SEDOWC I&IO&M P,11 WA(202) 254311 CRAWFORD0 SUMNERII a~b(~.%j ~P4O i 11i: ,33 ELK VALSON OREENWOO HARPER January 9, 1979

Mr. Scott Rinn Federal ELection Commission 1325 K. Street N. W. Washington, D. C. 20463

In Re: MUR 806

Dear Mr. Rjnn:

Here is a copy of the partnership dissolulion agreement enterred into between Congressman Whittaker and Dr. Crum.

Paragraph 12' of the agreement acknowledges the receipt of $12,000 received in 1978 and adjusts the purchase price accordingly.

I hope that this additional information is sufficient to resolve this matter. As we discussed on the phone, although the money was paid through a joint account, all the money in that account for 1978 was Dr. Crum's income.

If there is anything else we can provide you with, please contact me and I will do all that I can to satisfy your requests.

Dan Haas Attorney at Law

THIS STATIONERY PRINTED ON PAPER MADE WITH RECYCLED FIBERS PARTNERSHIP DISSOLUTION AND PURCHASE AGREEMENT Whittaker and Crum, Optometrists

Whereas, an agreement of partnership was enterred into on the 1st day of January, 197,%-, between Dr. Robert R. Whittaker, O.D. and Dr. J. David Crum, O.D. for carrying on the business of optometry under the name of Whittaker and Crum; and Whereas, Dr. Whittaker and Dr. Crum have agreed to dissolve the partnership by mutual consent; It is agreed as follow..s: 1. Transfer of Interest. Dr. Robert Whittaker hereby assigns and transfers to Dr. J. David Crum all of his right, title, and interest as a partner in the firm of Whittaker and Crum, and in its assets, good will and firm name, and all of his rights under the partnership agreement for the sum and in the manner set out herein. 2. Payments. Dr. J. David Crum agrees to pay to Dr. Robert Whittaker for his share of the partnership the sum of $74,151.25; $12,000 of which sum has already been paid pursuant to an oral agreement between the parties and the receipt of which is hereby acknowledged by Dr. Whittaker. The remaining $62,151.25 is to be paid off in monthly installments ranging between $700 and $1,300, at Dr. Crum's option, commencing the 20th day of January, 1979, and payable on the 20th day of each succeeding month until paid in full. The purchase price must be fully paid off within 10 years; the final payment being due no later than December 20, 1988, in an amount equal to the outstanding balance plus interest. Interest on the above sum shall be figured by applying a rate equal to 1% less than the average interest rate charged by Augusta Bank & Trust and Prairie State Bank to its preferred customers, to the outstanding balance each month. Monthly payments are to be applied first to interest then to reduction of principle. The interest rate is to be adjusted at the first of each year to reflect any changes in the rate and the rate at the first of the year shall apply for that full year.

3. Firm Liabilities. Dr. Crum shall promptly pay when due all of the liabilities of the partnership and will indemnify and hold harmless Dr. Whittaker from all such liabilites. 4. Insurance on Parties. Each party shall keep in full force and effect the $60,000 whole life policy which each owns on the others life, until such time as this contract is paid in full or Dr. Crum acquires a new partner. At this time each party shall be allowed to purchase the policy on his own life from the other. 5. Death of Whittaker. Should Dr. W4hittaker die prior to -2-

is obligated to continue making the payments as set out in Clause 2 of this agreement, and shall not accelerate the payments beyond the maximum payment allowed in Clause 2. 6. Death of Crum. Should Dr. Crum die prior to taking in a new partner, Dr. Whittaker agrees to transfer the proceeds of. the $60,000 whole life policy set out in Clause 4 to Dr. Crum's surviving spouse or heirs in return for which the ownership of the entire practice, including all records and accounts, will revert to Dr. Whittaker to be dispo'sed of as Dr. Whitt~'ker sees fit, with all proceeds of any disposition being the property of Dr. Whittaker; any outstanding debt owed by Dr. Crum under this agreement being canceled. Except for the contingency set out in the first paragraph of this claiuse, Dr. Crum binds his estate to fully pay off the outstanding balanceiowed under this agreement in the event Dr. Crumn should die prior to making full payment under this agreement. 7. Covenant Not to Compete. .Dr. Whittaker agrees that he shall not for a period of ten years from the date of this dissolution, either alone, or jointly with, or as agent for any person, directly or indirectly, set up, exercise or carry-on the trade or business of optometry within the counties of Butler, Cowley, Greenwood, Marion, and Sedgwick, all in Kansas; and shall not set up,-make or encourage any opposition to the said trade or business hereafter to be carried on by Dr. Crum, his representatives or assigns. Should D r. Whittaker violate this covenant, tie agrees to repay t-' Dr. Crum 10r)7 of thi- purchase price under this agreement to be deemed liquidated damages and not a penalty;plus any other additional damages, real and provable. In addition to the above provision, Dr. Whittaker further agrees not to return to Butler County in competition with Dr. Crum or assigns for an additional five years after this purchase contract is paid in full. For any violation of this provision, Dr. Whittaker binds him- self to Dr. Crum for a sum equal to 50%7 of the purchase price under this agreement, to be deemed liquidated damages and not a penalty; plus any additional damages real and provable. 8. Insurance on Crum. Dr. Whiittaker agrees to maintain a term-life insurance policy on Dr. Crum's life, payable to Dr. Crum's wife in the amount of $100,000 for a period of two years from the date of this agreement, or until Dr. Crumn brings in a new partner, whichever occurs first. 9. Additional Documents. Dr. Whittak-er shall execute and deliver any additional documents that may reasonably be required to assure Dr. Crum of all the assets of the partnership, together with the exclusive right to its good will, trade name, customer lists, books

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one another that should any dispute arise under this agreement they shall first submit the dispute to a third party agreeable to both for negotiation and only upon such negotiation proving unsuccessful, shall either party take legal action against the other. This Agreement to be effective the 31st day of December, 1978.

Dr. Robert r. Whittaker

Dr. J. David Crum

this /2 day of Subscribed and Sworn to before me ____A 1119 P~

I FA R ILYN! SCHNEIDER NOTARY PUBLIC I IputIer County, Kans 1 , Not ry Pubgc M~y Appt- Exp.

i - BRCO NRO a&ONO o HAPnYAN.HA

P.O0. BOX or AUGUSTA, KANSAS SQ~Ca M2STATE STREET 367524 December 11, 1978

Federal Election Commission 1325 K. Street N.W. Washington, D.C. 20463

RE: HUR 806

Dear Commissioners:

This is to inform you that I will be representing Congressman- Elect Robert Whittaker in this matter before the Commission.

N I have enclosed the answer to your requested questions, along with affidavits and exhibits. Please be informed, however, that we never received a copy of the complaint filed with your Commission. The cover letter you sent with your questions refers to a copy of the complaint being enclosed. Neither the letter sent to Dr. Whittaker nor the copy sent to R. G. Maddy, campaign treasurer, included the complaint itself. We, therefore, must respectfully submit that our prepared answer is contingent upon receiving a copy of the actual complaint; and we reserve the right to amend our answer after receiving the complaint, should it be neccessary, prior to any formal action by the Commission.

C7 Please send a copy of the complaint immediately, so that I can determine if an amendment to our answer is neccessary. It will expedite matters greatly, if a copy is sent directly to me.

N. We are anxious to bring this matter to a speedy conclusion and are willing to cooperate with the Commission in any way which will facilitate matters. If you need any further information prior to taking action, please do not hesitate to call on me. I will assist you in anyway I can.

Thank you for your prompt attention to this matter.

Sincerely,

Dana W. Haas Attorney at Law

Enclosures

ms s *~"Nin "41 Nomit

Congress * Fifth District

BOB WHITTAKER CAN WORK FOR YOU .. BECAUSE HE'S WORKED WITH YOU.

December 9, 1978

Federal Election Commission 1325 K. Street N.W. Washington, D.C. 20463

Dear Commissioners:

Enclosed please find the answer I have prepared with the assistance of my legal counsel. I believe we have provided you with all the information you have asked for in your questions.

I have great hopes that this matter will be resolved in the very near future. I have the utmost respect for this commission and the law over which you must regulate. Be assured that you will have my fullest cooperation in bringing this matter to a speedy conclusion. If there is any further information that I can provide you with before you take any final action on this complaint, please do not hesitate to call me or my legal counsel. We will assist you in anyway we can.

I hasten to add that I feel that I have violated no law in this matter. Never would I intentionally or knowingly set out to do anything illegal or attempt to circumvent the law in anyway. It is my sincerest hope that the information I have provided will dispose of this matter so that I may get on with the business of representing my district in the United States Congress.

Robert R. Whittaker

Enclosures mss

2330 N. OHIO ST. e AUGUSTA, KANSAS 67010 e (316) 775-5471 Pol Adv 90 for by Whttakr for Congress Corvirrt RontaldG Macdy Treasurer A Ccpy of out report ist iled. th I re eceA. ElecrttmCorrrnr on &ndo .. at; tor prtrhse fromr liezera Election Comrmissio, W.iashita. D C ,7~ lK~ ~M7 II

TO: THE FEDERAL ELECTION COMMZISSION

RE: MUR 806 ANSWERS TO REQUESTED QUESTIONS

FROM: CONGRESSMAN-ELECT DR. ROBERT R. WHITTAKER

1. Did you recieve any payments from an optometric partnership of which you are or were a partner, while you were a candidate for federal office in 1978?

ANSW4ER: YES

2. If the answer to question number (1) is yes, please provide the following information: a. the name and address of the partnership

ANSWER: Whittaker and Crum Augusta Plaza Augusta, Kansas 67010

b. the members of the partnership

ANSWER: Dr. Robert R. Whittaker, 0.D. Dr. J. David Crum, O.D.

C. the manner of payment, (i.e. check or other)

ANSW4ER: Check

d. the number of payments you recieved in 1978

ANSWER: Twelve (12)

e. the date of each payment

ANSWER: January 6, February 2, February 17, (February payment was made in two installments equalling $1,000), March 3, April 7, May 5, Junp 9, July 14, August 18, Sept. 8, Oct, 13,Nov. 10, December owed but not yet paid. f. the amount of each payment-

ANSWER: $1,000

g. a photostatic copy of each payment

ANSWER: See Exhibit No. 1, attached hereto.

3. Did you or your Committee report the receipt of each payment referred to in question number one to the Federal Election Commission?

ANSWER: NO

4. If the answer to question number three (3) is yes, please provide the following information: a photostatic copy of each page of any report filed in 1978 indicating the itemized receipt by you or your committee of each payment referred to in question number one (1).

ANSWER: NOT APPLICABLE

ANSWER: The payments received were under an oral buy-out agreement between r79 Answers IUR 806 Page 2

Dr. J. David Crum and myself, whereby Dr. Crum was purchasing my share of the practice. The payments were to be applied toward the ultimate purchase price to be arrived at, at a later date pursuant to the terms of the partnership agreement, a copy of the relevent portions of the agreement are attached hereto as Exhibit No. 2. The payments were never received, deposited, nor dealt with in any way by the Whittaker for Congress Committee, since it was not believed that they were a contribution or loan made to influence the outcome of the election, as defined in the Federal Election Campaign Act. I treated these payments as a personal, private business transaction to be recorded in my personal records as capital gains from my past invest- ment in the optometric practice, and they were so recorded on my Financial Disclosure Statement which I have filed pursuant to the Ethics in Government Act of 1978.

6. If there was a buy-sell agreement between you and the optometric partnership of which you were a partner, please provide a photostatic copy of that agreement if it was a written document, or affidavits by the principals if it was an oral agreement, concerning the terms of the agreement.

ANSWER: There was no written buy-out agreement during the time I received these $1,000 payments. An Augusta, Kansas attorney Dana W. Haas, is currently preparing a combination dissolution and purchase agreement to be signed by Dr. Crum and myself prior to my moving to Washington. Attached hereto are the following affadavits of the principals involved: Affadavit of Dr. J. David Crum--Exhibit No. 3a Affadavit of Joseph F. Shupe--Exhibit No. 3b Affadavit of Dr. Robert R. Whittaker--Exhibit No. 3c

7. Provide a photostatic copy of your partnership's agreement used to allocate partnership profits. Include the name and current address of the person in charge of its administration.

ANSWER: See Exhibit No.-4--Original Agreement See Exhibit No. 4a--Supplement to cover the period I served in the State Legislature

Person in charge of administration: Joseph F. Shupe Public Accountant 522 State Augusta, Kansas 67010

8. Provide a photostatic copy of any ancillary agreement made by the partnership to provide compensation to you while you campaigned for election to Congress.

ANSWER: No written agreement was ever made. I was to receive no salary while a candidate, except for services I actually performed in the practice. I performed no services nor collected any salary while a candidate for the Kansas 5th District House of Representatives. I did return to work after the election from November 13th to 17th and 20th to 24th for which services I will be compensated.

9. For the two personal loans you made to the Whittaker for Congress Committee, one for $10,000 on July 1, 1978, and the other for $5,000 on July 18, 1978 state whether they were made in cash, by check or in some other way. Provide a photostatic copy of the cancelled check or the receipt evidencing these transactions.

ANSWER: See Exhibit No. 5

a.$1,000 on July 7, 1978

L Answers MUR 806 Page 3

ANSWER: Check #274, dated July 26, 1978, deposited in my personal farm account with the Exchange State Bank, Douglass, Kansas.

b. $2,000 on August 8, 1978

ANSWER: Check 1289, dated August 8, 1978, deposited in my personal account with the Exchange State Bank, Douglass, Kansas.

C. $6,000 on August 28, 1978

ANSW4ER: Check #346, dated August 29, 1978, deposited in my personal account with the Exchange State Bank, Douglass, Kansas. d. $5,000 on September 20, 1978

ANSWER: Check #426, dated September 29, 1978, deposited in my personal account with the Rose Hill State Bank, Rose Hill, Kansas.

SEE EXHIBIT NO. 6

Robert R. Whittak

Dana W. Haas Legal Counsel

State of Kansas) County of Butler) ss

Dr. Robert R. Whittaker, of lawful age, being first duly sworn on his oath, deposes and says: That he has answered the above questions from the Federal Election Commission, that he has read the foregoing answers, knows the contents thereof, and that the answers and attachments therein cnan e

Robert R. Whittaker

SUBSCRIBED AND SWORN to before me this42L day of December, 1978.

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I, I , £ * ~EXHIBIT NO.2W)I~0

Valuation of partnership clause in the Whittaker and Crum par tnership agreement.

!ACc~~;eo-- )Ic.:nee5 undeor. 1HRD1)1Thtl51:3.1in!. : n ~p !1(fltjflo theforeoingspecific co~:sh2. rcp

The valuZition of the prc.-tnershi-i for jpurposlr-sour termna-

tion, necessitate(! either by death or Yby (eci-ion of one. or bot>*-

Partners, shall bOarrived at as follows:

(a) For the year- 1970, the value would be an atnounteq,: a 1 to the gross receipts for the year 1969..

(b), For the year 1971, the value would he an amount enti

to -he average of t he gross receipts for the years.19069 and 1970..

" (c) For the year 1972, the value would be an am'ount- eqia'l

to the average of the gross receipts for the years 1969, 1970 and

(d) For all subsequent yearG., the value would be an amounit

equzal to the average of the gross receiplts for the last three. years,

irnr*diately preceding the year for which the valuation was to be determ~ined. 13.;ThEfiINATION:

(an) it is agreed that in the event of the death of one of1 tePartners hereto, the curviving partner shall be obligated to buy,

and the entate of the deceased partner shall be obligated to sell the

entire partnernhip interests of the deceased partner, in accordance with the following terms:

The cstate of the deceased partner shall be paid a sum equal to the following:

(a) The deceased partner'o share of -accruod not profits for the month of his death together with any balance due him still inthe drawing account.

set2out-in1Paragraph-12Aherein

-6- Exhibit Number 3a 4 jf I I 6

AFFADAVIT OF Dr. J. David Crum Augusta, Kansas

I, Dr. J. David Crum, do hereby make this affadavit freely and of my own accord and under oath, deposing and saying: 1. That I am a partner to Dr. Robert R. Whittaker in the optometric practice known as Whittaker & Crum located in the Augusta Plaza, Augusta, Kansas. 2. That I have been paying to Dr. Whittaker the sum of $1,000 per month during 1978 out of the optemetric partnership of which we are both partners. 3. That said sums of money were paid under an oral agreement between myself and Dr. Whittaker to purchase Dr. Whittaker's share of the optemetric practice. That these sums were not to be considered salary nor were they a loan which Dr. Whittaker was to be compelled to repay, but rather these payments reduced the purchase price of the practice; and, in the event the sale did not go through, would serve to reduce Dr. Whittaker's share of partnership profits until such time as Dr. Whittaker, at his option, repurchased this share of the practice. 4. That the purchase agreement between myself and Dr. Whittaker is currently being prepared by Dana W. Haas, an Augusta attorney who is fully aware of the terms of this oral agreement and the effect it will have on the purchase contract. 5. That I have never knowingly or intentionally violated any law, but have at all times and do still feel that the arrangement between myself and Dr. Whittaker is a legitimate business transaction. 6. That this agreement was not put into writing at an earlier date because of the long-lasting relationship and climate of trust which exists between myself and Dr. Whittaker.

Dated: Further affiant saieth not. /

Dr. J. David Crum

V ER IF I CAT I ON

State of Kansas ss County of Butler) Dr. J. David Crum, of lawful age, being first duly sworn on his oath, deposes and says: That he is the affiant above named, that he has read the foregoing Affadavit, knows the contents thereof, and that the statements therein contained are true./

I Exhibit Number

AFFADAVIT OF Joseph F. Shupe Augusta, Kansas

1, Joseph F. Shupe, do hereby make this affadavit freely and of my own accord and under oath, deposing and saying: 1. That I am a Public Accountant 'MZZi Cc 1 -%0Mu*a=6e"- located at 522 State, Augusta, Kansas. 2. That Itam employed by the Whittaker & Crum optometric practice to handle their bookkeeping and accounting responsibilities. * 3. That I am fully aware of the oral buy-out agreement existing between Dr. Robert R. Whittaker and Dr. J. David Crumn which existed throughout the year 1978. 4. That under the terms of said buy-out agreement, Dr. Crum was to pay to Dr. Whittaker the sum of $1,000 per month throughout the year 1978 with said sums being credited against the final purchase price of Dr. Whittaker's share of the practice; said final purchase price to be arrived at at a later date according to the terms of the partnership agreement and finalized in a written partnership dissolution and buy-out agreement. 5. That I was fully aware that said monthly payments were not to be considered a loan nor were they salary but rather said sums were to go toward reducing Dr. Whittaker's ownership in the practice. 6. That in the event that Dr. Whittaker did not go through with the dissolution and buy-out agreement, said sums paid to Dr. Whittaker would reduce his share of the practice and his ability to share profits of the partnership by a percent which the sums paid represented when compared to the value of the partnership, until such time as Dr. Whittaker, at his option, elected to repurchase the portion of the practice reflected by the sums paid and once again become a full partner in the practice. 7. That I have never knowingly or intentionally violated any law, nor advised anyone to violate any law, but have at all times, and do still, believe that the arrangement between Dr. Crum and Dr. Whittaker is a legitimate business transaction. Further affiant saieth not.

Jo66 h F. Shuj e_"_

V E R I F I t A T 1 0 N State of Kansas )s County of Butler ) Joseph F. Shupe, of lawful age, being first duly sworn on his oath, deposes and says: -- That he is the affiant above named, that he has read the, Exhibit Number ~I'

AFFADAVIT OF Dr. Robert R. Whittaker Augusta, Kansas

I, Dr. Robert R. Whittaker, do hereby make this affadavit freely and of my own accord and under oath, deposing and saying: 1. That I am a partner to Dr. J. David Crum in the optometric practice known as Whittaker & Crum located in the Augusta Plaza, Augusta, Kansas. 2. That during the year 1978, 1 did not engage in the practice of optometry except for a brief period from November 13th to 17th and November 20th to 24th. That during 1978 I was a candidate for the U.S. House of Representatives from the 5th Congressional District of Kansas. 3. That during the period of time I was a candidate for federal office I received no salary from my optometric practice nor did I receive any loans from said practice. 4. That my partner, Dr. Crum, and myself enterred into an oral agreement by which Dr. Crum was to purchase my share of the optometric practice. That pursuant to said agreement Dr. Crum was to pay me the sum of $1,000 per month, said sums to be credited against the purchase price of my share of the practice; said purchase price was to be arrived at at a later date according to the terms of the partnership agreement existing between Dr. Crum and myself, and after arriving at the figure to be finalized in a written dissolution and purchase agreement to be prepared by an attorney. 5. That the final dissolution and purchase agreement is currently under preparation by Dana W. Haas, Attorney at Law, 423 State, Augusta, Kansas. 6. That the sums I received from my optometric partner were never reported on my F.E.C. reports nor were they ever used by or deposited with my campaign committee, because I did not believe them to be a contribution or loan, as defined in the Federal Election Campaign Act, nor were they received or given to influence the outcome of the election, but rather constituted a private business transaction between Dr. Crum and myself. 7. That it was understood between Dr. Crum and myself and by Joseph F. Shupe, our accountant, that the sums of money I received during 1978 were a reduction of my ownership in the optometric practice, and in the event I was to return to practice following the election, I would do so as less than a full partner, until such time as I might elect to purchase back the partnership share which I had sold to Dr. Crum. Page 2 Affadavit of Dr. Robert R. Whittaker

9. That I have never knowingly or intentionally violated or attempted to evade any law. That I have always believed, and do still, that the arrangement between Dr. Crum and myself is legal and proper. Further affiant saieth no td

- - - -- IF Dr. Robert R. Whittaker

V ER IF IC A TIO0N State of Kansas )s County of Butler)SS

Dr. Robert R. Whittaker, of lawful age, being first duly sworn on his oath, deposes and says: That he is the affiant above named, that he has read the foregoing affadavit, knows the contents thereof, and that the statements therein contained are true.

Dr., Robert R. Whitt er

Subscribed and Sworn to before me this day of December, 1978.

FAIYINTCHEIDER tN-OT4NIRY PUBLIC Not IAry Public vI

EXHIBIT NO. 4 page 1

4. CONTRIBU'flON u

The capital oAf the partaership ohall be contributed, equally by th3 partnsrn in tho Qollotying manner. thittaker who hem engaged in the c ptcrntr icp ro I.c 61o n 5~A~u and surrounding croa fo~r

c.any y~ara., hao on hond th3 cur,=n-! hich twill b3'nccsocary for the- ccnduclt of! tah partno-ft hAp' bninnece. lin alao hen antablichad cono3ld- -rbogoodwill in bin I-cnc. tittakor thoroloro egronto col from an undivided one-. -to Crum and Crum agron to purchano whittahar half intozomntfi in and to onid cp-tzotric practica bnlonging to Whittokor- at Augnote Rlanamn and Va IIoq Conto"-, Itnan. I in undoroted and

cgrccd that cai.d rctlI ± ^' audeqcuirpzcn-t a-,good ryil I b an03cludon hn canh cn harnA and. tcc-C'Unt rccolvebleaa of tho dateof tho nigning ofthin Avreement. Th3 vmluo c! tho Vpractico isagreed to bo an cnount equal to ths gross revoaito for tho cclondnr year 1969) and Crum chall.-purchano thn naid 0-ndivyided onqfhalg intorost off Whittaltor coo- 4an amount equal to ono-hIClf o.1. th3 gron recoipto for the calondar year19. Upon a detarmination o, t1 %,3nalopriceana aoroaaid, Crum %7111pay 'for theoonme by pnv'ing to.V 1ht~ft tho nun of413.ivo.hou-, ennd and Vo/100 Dollarn (*5000.00) on oz- boeolro Jnunry 1, 1970 and teunpaid balance In monthly' inntalinentn together with Intarest cn tho unpyt.W balanco l a ainto o Lfnoroot per annum djto cannummlly on Jamur of each ionr to n rateoo interont onn and

one-half porccnt 1. 12)above tho prinrate in the ltanczin City rcdcrid ERnorvo Dictric!; then ~n effect. 'Theaczount og the rlnnthly iflatQolmnt paynonto vill varT frcm conth to month and shall. be determined in tho folleing mnnnnps By ths 15th ol. AariX. 1970 and quarterly thereafter,*the

n--'--ProfiAto Cor thaff qumarter- chall be deternined and credited to a partnorch5.p drai~rng account. Z'Ench partnnr shall be cntitlcd to with- drawt the cum.of! Ono Thounand and Vlq/100 DollarsO ($,000.00) and the oum of One Thounand end Io/1.00 Dollar"0n1,000n.CO)1-n aforcaaid, shall then be debited to scaid Cretling account of each partner monthly. Af.ter tho dobit of said Ono Thosamand end tlo/ 100 Dollars (l,000.0O)

~ ______--~ ------.--- ~: 1±-'-.-'-- -w v.-. '2' - ~ EXHIBIT NO.4, page 2

i;11'- I hY to the carawing -account of elach pa-rtner, tl,(-%rti~'i~i~.. ~cin in qj shall thcn be available for further'dsr~ui~ c ~

-partners.

one-half of the said quarterly b:alance .:Or1h'l e u;etO thc withdiraw.al. of Whittaker and the remaininq one-half shin 1 -furt h cr be subject .to the withdrawal of Crum with the provision that the' ono-haif'cf the remaining of the quarterly balance of' the partnersch). br.longinq to Crum be credited to the installment payments for the purchane by Cr-um of the undivided one-half interest in the Ipartriershiip assets as a-foresaid. Said Payment shall first b e credited to interest due and the balannce to paym-,ent" on principal. It is expr-ess ly agreeil that t'ha rcmaining one-half of the quarterly balance subject to the- withdrawal of Crum bo applied in- thn manner aforesaid until the full amlount of indetedness of! Crum to Whttaker, including principal and interest, is fAully paid.

The practice as heretofore described shall be contribute

by the par-tnars and shall.'constitute the capital of the partnership. In addition each party will contribute on Januiary 1, 1970 the sum of Ono Thousand and no/100 Dollars ($1,000.00) to be used as workingj capital*

A ft the* effective date of this agreement, all equipment,

esoplion, materials, furnichings 'and all other products of every nnd kind natura, used or purchased by the partnership, shall become the property of the partnership and shall be purchased with partner-

shin funds.. It is further agreed that no partnership No~ipefditures,

exceplt the normal opernting expenses, shall be expended, without the joint consent of both of the parties to this agreement.

An inventory shall be prepared of all equipment belonging. to the partnership, with the exception of that which iS leasee. All lesesal e hngd oth nm o te-atnr-i-uon-tanA-

-3-. SECNDSUPL* , IT TO PARTNERSHIIP AGREEMEW"OF ROBERT R. WHITTAKER, 0.0. and J. DAVID CRUM, 0.0.

WHEREAS, the undersigned, do desire to alter, change and' amend their original Partnership Agreement under the date of Jan- uary 1, 1970 and as amended under the First Supplement thereto dated January 6, 1970, and

WHEREAS, Robert R. Whittaker has been elected to the legislature of the State of Kansas which will necessitate his being absent from the practice carried on by 'the partnership, and

WHEREAS, under the terms and provisions of the original partnership the parties to the same were required to devote * certain working time to the business of the partnership and were, entitled to certain compensation therefor, the provisions of which: need to be altered, changed and amended as hereinafter more specifically set forth, and

*WHEREAS, as a part of the basic Partnership Agreement J.' David Crum agreed to purchase, upon the formula established in said agreement, a portion of the partnership all as contained in the original Agreement and that through the period of year's such payments have been made leaving a certain amount due to complete such payment and the parties do desire to realize such~payment, confirm the amount due and to-cause the basic agreement to be changed thereby, and

NOW THEREFORE, the parties hereto do stipulate and agree as follows, to wit:

1. That Robert R. Whittaker shall be relieved of the obligation of devoting his full business time, skill and energy to the practice of optometry and to the partnership to the extent that he shall necessarily be absent for his legislative duties but shall nonetheless devote all other time, skilland energy to the partnership affairs as EXHIBIT NO. page2 Page 2

contained in the basic Agreement.

2. During the period that Robert R. Whittaker -shall be absent due to his legislative duties from the normal working hour's of the partnership he shall be entitled to 1/10 of the net profit realized from business during Such absence and 90% thereof shall be credited to the account of J. David Crum. It is stipulated and recognized that other than for the periods of time when the adjustment shall be made for legislative absence, the partners shall share equally in the net profit from such partnership. Necessary ledgers or records wiill be kept to ascertain the adjustments for legislative absences.

3. It is further stipulated by and between the parties hereto that the parties hereto shall each withdraw, from time to time, as may be mutually agreed to-compensate the partners for their divisions of net profits upon the formula set forth above and that all withdrawals shall' be simultaneously and equal as between the partners except to the extent that an adjustment shall be made for legislative absences as aforesaid. Withdrawals from capital accounts of the partners shall be adjusted on'a quartprly basis and at such other times as the partn'ers .hip may mutually agree to take care of any discrepancies of the partners withoJrawals. Pro- vided however, that the partners may, leave certain amounts in their capital accounts and not withdraw the same for the purpose of' maintaining cash balances or operating capital.

4.It is further stipulated and agreed by and between the parties hereto that J. David Crum has paid all sums necessary to purchase his portion of the partnership business as set forth in the basic partnership Agreement with the exception of the sum of $6,500.00. Said sum shall be paid as expeditiously as possible atrthe 13th day of January, 1975 together with interest at the ra te of nine percent per annum from the first day of May, 1974 un- EXHIBIT NO. 9 !I 69 Page 3

5. This agreement s -all constitute an alteration of the basic Agreement, as amended- by First Supplement, and all of the terms and provisions of the- basic Agreement and Supplement thereto shall be and remain the sa- except as the provisions thereof shall be altered, changed Or amended hereby.

Dated this ji diy',o December, 1974.

RuetR Ifiiittaker -DJtavid Crum

I 9N) Exhibit 5, Page 1

*r) It. ofV W 01I.

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This check was drawn on my personal account with the Exchange State Bank of Douglass, Kansas. It was then deposited directly in the Whittaker for Congress Account. The memo line reads "For Deposit Only, Campaign Loan'. V 'C C) C) I t

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- . 1Marlene F. Whittaker I-

VOID AFTER 90 DAYS - *Arcan sa.vings Asociaton Q1Kansas

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by my wife, Marlene, * -V Thi's check was drawn on a joint savings account owned and I and *endorsed directly over to my campaign account. Title to this savings account was in both my wife and my name and we both had access to *this account and rights of berteficial enjoyment to the funds in the account.

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~1325 K SiREET N.W WASHINGTON,D.C. 20463

CERTIFIED MAIL RETURN RECEIPT REQUESTED

Mr. Gordon Garrett Campaign Director Don Allegrucci for Congress Committee P.O. Box 1536 Pittsburg, Kansas 66762

RE: MUR 806 Dear Mr. Garrett: r~V On January ,1979, the Commission voted to find no reasonable cause to believe that a violation of 2 U.S.C. S§434(b) (5); 441a(a) (1)(A); or 441g has occurred and to * terminate its investigation in MUR 806. A copy of the Commission's determination and the General Counsel's Report is enclosed for your information. Accordingly, the Commission - intends to close its f iles in this matter. Sincerely,

William C. Oldaker General Counsel Enclosures 1. Commission certification 2. General Counsel'Is Report U I:t FEDERAL ELECTION COMMISSION ~ 1325 K SIREET N.W :2: WASHINGTON,D.C. 20463

CERTIFIED MAIL RETURN RECEIPT REQUESTED Mr. Dana W. Haas 516 Cannon House Office Building Washington, D.C. 20515 RE: MUR 806 Dear Mr. Haas: rr~lOn January ,1979, the Commission voted to find no reasonable cause to believe that a violation of 2 U.S.C. S§434(b) (5); 441a(a)(l)(A); or 441a has occurred and to terminate its investigation in MUR 806. A copy of the Commission's determination and the General Counsel's Report is enclosed for your information. Accordingly, the Commission intends to close its files in this matter. Sincerely,

William C. Oldaker General Counsel Enclosure Commission certification General Counsel's Report ~ii

. ULW10,., 4 vi

*.~ . . ,. 303 WHITIAKUR 0 70/69~

ALLEN LA9M

*OUMMON AWN" UTLEN IMIAMI C"66E ASNTM r CN e%oftb ttd WAHN104OM CNAUTAIIU MM$ Senrete CHIROASM "DCow ROU~~~fl~tat~es t CDW3V 411"ACM 16 CMINON HOUSE OFFCI UILIDING CRAwME &IIA J 3 WASHINGTON. D.C. 20515 1LK WNUSN U~a(ngow~~ q()f4 (2M 01)1N *minMas W0SSSN MA04 January 9,, 1979

Mr. Scott Rinn Federal ELection Commission 1325 K. Street N. W. 90014 E Washington, D. C. 20463

In Re: MUR 806

Dear Mr. Rinn:

Here is a copy of the partnership dissoluton agreement enterred into between Congressman Whittaker and Dr. Crum.

Paragraph 121 of the agreement acknowledges the receipt of $12,000

- received in 1978 and adjusts the purchase price accordingly.

Ihope that this additional information is sufficient to resolve this matter. As we discussed on the phone, although the money was paid through a joint account, all the money in that account for 1978 was Dr. Crum's income.

If there is anything else we can provide you with, please contact C'me and I will do all that I can to satisfy your requests.

Dan Haas Attorney at Law

THIS STATIONERY PRINTED ON PAPER MADE WITH RECYCLED FIBERS m - - - M- 9 4 1 I ;714

PARTNERSHIP DISSOLUTION AND PURCHASE AGREEMENT Whittaker and Crum, Optometrists

Whereas, an agreement of partnership was enterred into on the 1st day of January, 1970, between Dr. Robert R. Whittaker, O.D. and Dr. J. David Crum, O.D. for carrying on the business of optometry under the name of Whittaker and Crum; and Whereas, Dr. Whittaker and Dr. Crum have agreed to dissolve the partnership by mutual consent; It is agreed as follows: 1. Transfer of Interest. Dr. Robert Whittaker hereby assigns and transfers to Dr. J. David Crum all of his right, title, and interest as a partner in the firm of Whittaker and Crum, and in its assets, good will and firm name, and all of his rights under the partnership agreement for the sum and in the manner set out herein. 2. Payments. Dr. J. David Crum agrees to pay to Dr. Robert Whittaker for his share of the partnership the sum of $74,151.25; $12,000 of which sum has already been paid pursuant to an oral agreement between the parties and the receipt of which is hereby acknowledged by Dr. Whittaker. The remaining $62,151.25 is to be paid off in monthly installments ranging between $700 and $1,300, at Dr. Crum's option, commencing the 20th day of January, 1979, and payable on the 20th day of each succeeding month until paid in full. The purchase price must be fully paid off within 10 years; the final payment being due no later than December 20, 1988, in an amount equal to the outstanding balance plus interest. Interest on the above sum shall be figured by applying a rate equal to 1% less than the average interest rate charged by Au gusta Bank & Trust and Prairie State Bank to its preferred customers, to the outstanding balance each month. Monthly payments are to be applied first to interest then to reduction of principle. The interest rate is to be adjusted at the first of each year to reflect any changes in the rate and the rate at the first of the year shall apply for that full year. 3. Firm Liabilities. Dr. Crum shall promptly pay when due all of the liabilities of the partnership and will indemnify and hold harmless Dr. Whittaker from all such liabilites. 4. -Insurance on Parties. Each party shall keep in full force and effect the $60,000 whole life policy which each owns on the others life, until such time as this contract is paid in full or Dr. Crum acquires a new partner. At this time each party shall be allowed to purchase the policy on his own life from the other. 5. Death of Whittaker. Should Dr. Whittaker die prioir to

i -2-

is obligated to continue making the payments as set out in Clause 2 of this agreement, and shall not accelerate the payments beyond the maximum payment allowed in Clause 2. 6. Death of Crum. Should Dr. Crum die prior to taking in a new partner, Dr. Whittaker agrees to transfer the proceeds of. the $60,000 whole life policy set out in Clause 4 to Dr. Crum's surviving spouse or heirs in return for which the ownership of the entire practice, including all records and accounts, will revert to Dr. Whittaker to be disposed of as Dr. Whittaker sees fit, with a11 proceeds of any disposition being the property of Dr. Whittaker; any outstanding debt owed by Dr. Crum under this agreement being canceled. Except for the contingency set out in the first paragraph of this clause, Dr. Crum binds his estate to fully pay off the outstanding balance owed under this agreement in the event Dr. Crum should die prior to making full payment under this agreement. 7. Covenant Not to Compete. Dr. Whittaker agrees that he shall not for a period of ten years from the date of this dissolution, either alone, or jointly with, or as agent for any person, directly or indirectly, set up, exercise or carry on the trade or business of optometry within the counties of Butler, Cowley, Greenwood, Marion, and Sedgwick, all in Kansas; and shall not set up,-make or encourage any opposition to the said trade or business hereafter to be carried on by Dr. Crum, his representatives or assigns. Should Dr. Whittaker violate this covenant, iie agrees to repay t-, Dr Crtim l0()*/ of thp purchase price under this agreement to be deemed liquidated damages and not a penalty; plus any other additional damagesreal and provable. In addition to the above provision, Dr. Whittaker further agrees not to return to Butler County in competition with Dr. Crum or assigns for an additional five years after this purchase contract is paid in full. For any violation of this provision, Dr. Whittaker binds him- self to Dr. Crum for a sum equal to 50% of the purchase price under this agreement, to be deemed liquidated damages and not a penalty; plus any additional damages real and provable. 8. -Insurance on Crum. Dr. Whittaker agrees to maintain a term-life insurance policy on Dr. Crum's life, payable to Dr. Crum's wife in the amount of $100,000 for a period of two years from the date of this agreement, or until Dr. Crum brings in a new partner, whichever occurs first. 9. Additional Documents. Dr. Whittaker shall execute and deliver any additional documents that may reasonably be required to assure Dr. Crum of all the assets of the partnership, together with I ~~ I ~ 70

-3- one another that should any dispute arise under this agreement they shall first submit the dispute to a third party agreeable to both for negotiation and only upon such negotiation proving unsuccessful, shall either party take legal action against the other. This Agreement to be effective the 31st day of December, 1978.

Dr. Robert F. Whittaker

Dr. J. David Crum

JSu scribed and Sworn to be.fore me this 2 day of

NOTARY PUBLIC Butler County, Kansa ,Ni otir-y Pub lc My Appt. E-xP. Congrea of t!Je MIniteb 6'tatet LM ,J~oufse of *Aepreacntatibtg lSasington, P.C. 20515 M.C.

FEDERAL ELECTION COM4MISSION

1325 K. Street, N. W.

AN'rN: Scott Rjnn, MUR 806 Washington, D. C. 20463 FEDERAL ELECTION COMMISSION

1325 K SI REE T N.W WASHINGTON,D.C. 20463

MEMORANDUM TO CHARLES STEELE )

FROM: MARJORIE W. EMMONS

DATE: JANUARY 8, 1979

SUBJECT: MUR 806 - Interim Investigation Report dated 1-2-79; Received in Office of Commission Secretary 1-5-79; 11:04

The above-named document was circulated on a 24 hour no-objection basis at 3:00, January 5, 1979. The Commission Secretary's Office has received no objections to the Interim Investigation Report as of 4:00, this date. 44

I ~

Ag4

4. :j~4~ y ,~: U MM KI-jRY BEFORE THE FEDERAL ELECTION COMMISSION T9 JAN 5 All : 04 In the Matter of) Dr. Robert Whittaker ) MUR 806 The Whittaker for Congress ) Committee (Kansas))

INTERIM INVESTIGATION REPORT

On November 28, 1978, the Commission found reason to believe that respondents violated 2 U.S.C. 55434(b)(5); 441a(a) (1)(4) and 441g, and approved the questions to be sent to respondents from the

Commission. N The Commission received the respondents' answers on December 14, 1978. The General Counsel's Report is currently being prepared.

Date * fm - ae deral Counsel COoNRoD c WA6~

BECMMattorney, at law DAA . MA

USTATESRETMM17527 December 11, 1978

Federal Election Commission 1325 K. Street N.W. Washington, D.C. 20463 RE: MUR 806 C C~ Dear Commissioners:

This is to inform you that I will be representing Congressman- Elect Robert Whittaker in this matter before the Commission. I have enclosed the answer to your requested questions, along with affidavits and exhibits. Please be informed, however, that we never received a copy of the complaint filed with your Commission. The cover letter you sent with your questions refers to a copy of the complaint being enclosed. Neither the letter sent to Dr. Whittaker nor the copy sent to R. G. Maddy, campaign treasurer, included the complaint itself. We, therefore, must respectfully submit that our prepared answer is contingent upon receiving a copy of the actual complaint; and we reserve the right to amend our answer after receiving the complaint, should it be neccessary, prior to any formal action by the Commission.

Please send a copy of the complaint immediately, so that I can determine if an amendment to our answer is neccessary. It will expedite matters greatly, if a copy is sent directly to me.

We are anxious to bring this matter to a speedy conclusion and are willing to cooperate with the Commission in any way which will facilitate matters. If you need any further information prior to taking action, please do not hesitate to call on me. I will assist you in anyway I can.

Thank you for your prompt attention to this matter.

Dana W. Haas Attorney at Law

Enclosures mss BOB WHITTAKER Congressl* Fifth District

BOB WHITTAKER CAN WORK FOR YOU

.. BECAUSE HE'S WORKED WITH YOU.

December 9, 1978

Federal Election Commission 1325 K. Street N.W. Washington, D.C. 20463

Dear Commissioners:

Enclosed please find the answer I have prepared with the assistance of my legal counsel. I believe we have provided you with all the information you have asked for in your questions.

Robert R. Whittaker

Enclosures ms s

2330 N. OHIO ST. 9 AUGUSTA, KANSAS 67010 9 (316) 775-5471 Po1 Adu pd for b) Whittakerfor CongressComm, Ronald G Maddy. Treasurer A copy of our report isfied with The Federal ElectionComnmissiorn and is aailable for purchasefrom FederalElection Commission,Washington. D C TO: THE FEDERAL ELECTION COMMISSION RE: MUR 806 ANSWERS TO REQUESTED QUESTIONS FROM: CONGRESSMAN-ELECT DR. ROBERT R. WHITTAKER

1. Did you recieve any payments from an optometric partnership of which you are or were a partner, while you were a candidate for federal office in 1978?

ANSWER: YES

2. If the answer to question number (1) is yes, please provide the following inf ormation: a. the name and address of the partnership

ANSWER: Whittaker and Crum Augusta Plaza Augusta, Kansas 67010

b. the members of the partnership

ANSWER: Dr. Robert R. Whittaker, 0.D. Dr. J. David Crum, O.D.

c. the manner of payment, (i.e. check or other)

ANSWER: Check

d. the number of payments you recieved in 1978

ANSWER: Twelve (12)

e. the date of each payment

ANSWER: January 6, February 2, February 17, (February payment was made in two installm~ents equalling $1,000), March 3, April 7, May 5, June 9, July 14, August 18, Sept, 8, Oct, 13,Nov, 10, December owed but not yet paid. f. the amount of each payment

ANSWER: $1,000

g. a photostatic copy of each payment

ANSWER: See Exhibit No. 1, attached hereto.

3. Did you or your Committee report the receipt of each payment referred to in question number one to the Federal Election Commission?

ANSWER: NO

ANSWER: NOT APPLICABLE

5.Exln hwec ndeeypymn eerdIoi usto ubrIn 1 a

ANSWER: The payments received were under an oral buy-out agreement between Answers MTJR 806 * 7 0I Page 2

7. Provide a photostatic copy of your partnership's agreement used to allocate partnership profits. Include the name and current address of the person in charge of its administration.

ANSWER: See Exhibit No. 4--Original Agreement See Exhibit No. 4a--Supplement to cover the period I served in the State Legislature

Person in charge of administration: Joseph F. Shupe Public Accountant 522 State Augusta, Kansas 67010

8. Provide a photostatic copy of any ancillary agreement made by the partnership to provide compensation to you while you campaigned for election to Congress.

ANSWER: See Exhibit No. 5

a. $1,000 on July 7, 1978 0 1. 0 6 r)? * I I I7 Answers HUR 806 Page 3

ANSWER: Check #274, dated July 26, 1978, deposited in my personal farm account with the Exchange State Bank, Douglass, Kansas.

b. $2,000 on August 8, 1978

ANSWER: Check #289, dated August 8, 1978, deposited in my personal account with the Exchange State Bank, Douglass, Kansas. c. $6,000 on August 28, 1978

ANSWER: Check #346, dated August 29, 1978, deposited in my personal account with the Exchange State Bank, Douglass, Kansas.

d. $5,000 on September 20, 1978

ANSWER: Check #426, dated September 29, 1978, deposited in my personal account with the Rose Hill State Bank, Rose Hill, Kansas.

SEE EXHIBIT NO. 6

Robert R. hta

DaaW. Haas Legal Counsel

V ER IF IC A TIO0N

State of Kansas ) o County of Butler)

Robert R. Whittaker

SUBSCRIBED AND SWORN to before me this day of December, 1978.

MARILYN SCHNEIDER NOTARY PUBLIC arPui Butler County, Kansa Nar My APO. Exp ./( -U EXHIBIT.N., p age 1W

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()Pro1Xos -onal liability insurance premvit'llnt;, oCeZ1 A!1~CCj f LTi ve nder, 14RIG plansi l1b i y -arn:- shlip.. Mi'tion of the foregoing specific co,-ix-s;-,In- rec.I Payment of-other partnership expense which w~ necessarily a-u-

12. VLAIND PRNRHM T.1RMNAINPURPOZS:S The valuation of the pirtnership for purposes of term~ina- tion.. necessitated either by death or lby deci sion of one or 1bot.h partners, shall be arrived at as follows: (a) For the year 1970, the value would be an aio.n e to the gross receipts for the year 1969. (b) For the year 1971, the value would hbe an am~ount eclI to the average of the gross receipts for the years 1969 and 1970. (C) For the year 1972, the value would be an amrount equial to the average of the gross receipts for the years 1969, 1970 and J 1971.

(dl) For all subsequent years, the value would be ani amount equal to the average of the gross receipts for the last three 'years,'. immediately preceding the year for which the valuation was to be determined.

1.TERMINATION:

(a) It is agreed that in the event of the death of one of the partners hereto, the surviving partner shall be obliqatea to buy, and the estate of the deceased partner shall be obligated t6 sell the entire partnership interests of the deceased partner, in accordance with the following terms: The estate of the deceased partner shall be paid a sum equal to the followingi (a) The deceased partner's share of;'-accruad net profits for the month of his death together with any balance due him still in the drawing account.

(b) HIs uind ividda neh4fhar^orte pta Exhibit Number Al7 9 04 O0 1 13 7

AFFADAVIT OF Dr. J. David Crum Augusta, Kansas

I, Dr. J. David Crum, do hereby make this affadavit freely and of my own accord and under oath, deposing and saying: 1. That I am a partner to Dr. Robert R. Whittaker in the, optometric practice known as Whittaker & Crum located in the Augusta Plaza, Augusta, Kansas. 2. That I have been paying to Dr. Whittaker the sum ofi $1,000 per month during 1978 out of the optemetric partnership of which we are both partners. 3. That said sums of money were paid under an oral agreement between myself and Dr. Whittaker to purchase Dr. Whittaker's share of the optemetric practice. That these sums were not to be considered salary nor were they a loan which Dr. Whittaker was to be compelled, to repay, but rather these payments reduced the purchase price of the, practice; and, in the event the'-sale did not go'-through, would serve to reduce Dr. Whittaker's share of partnership profits until- such time as Dr. Whittaker, at his option, repurchased this share of the practice. 4. That the purchase agreement between myself and Dr. Whittake is currently being prepared by Dana W. Haas, an Augusta attorney-who is fully aware of the terms of this oral agreement and the effect it will have on the purchase contract. 5. That I have never knowingly or intentionally violated any law, but have at all times and do still feel that the arrangement between myself and Dr. Whittaker is a legitimate business transaction. 6. That this agreement was not put into writing at .an earlier date because of the long-lasting relationship and climate of trust which exists between myself and Dr. Whittaker. Further affiant saieth not. Dated: ~f6 A~ Dr. J. David Crum

State of Kansas) County of Butler )ss. Dr. J. David Crum, of lawful age, being first duly sworn oil his oath, deposes and says: That he is the affiant above named, that he has read the. foregoing Affadavit, knows the contents thereof, and that the statements, therein contained are true. Exhibit Number 6 7 90 1 137 1

AFFADAVIT OF Joseph F. Shupe Augusta, Kansas

I. Joseph F. Shupe, do hereby make this affadavit freely and of my own accord and under oath, deposing and saying: 1.That I am a Public Accountant .1 located at 522 State, Augusta, Kansas. 2. That I am employed by the Whittaker & Crum optometric practice to handle their bookkeeping and accounting responsibilities. 3. That I am fully aware of the oral buy-out agreement existing between Dr. Robert R. Whittaker and Dr. J. David Crum which existed throughout the year 1978. 4. That under the terms of said buy-out agreement, Dr. Crum was to pay to Dr. Whittaker the sum of $1,000 per month throughout the year 1978 with said sums being credited against the final purchase price of Dr. Whittaker's share of the practice; said final purchase price to be arrived at at a later date according to the terms of the partnership agreement and finalized in a written partnership dissolution and buy-out agreement. 5. That I was fully aware that said monthly payments were not to be considered a loan nor were they salary but rather said sums were to go toward reducing Dr. Whittaker's ownership in the practice. 6. That in the event that Dr. Whittaker did not go through with the dissolution and buy-out agreement, said sums paid to Dr. Whittaker would reduce his share of the practice and his ability to share profits of the partnership by a percent which the sums paid represented when compared to the value of the partnership, until such time as Dr. Whittaker, at his option, elected to repurchase the portion of the practice reflected by the sums paid and once again become a full partner in the practice. 7. That I have never knowingly or intentionally violated any law, nor advised anyone to violate any law, but have at all times, and do still, believe that the arrangement between Dr. Crum and Dr. Whittaker is a legitimate business transaction. Further affiant saieth not.

State of Kansas )s County of Butler ) Joseph F. Shupe, of lawful age, being first duly sworn on his oath, deposes and says: That he is the affiant above named, that he has read,_the Exhibit Number I 3I 7j

AFFADAVIT OF Dr. Robert R. Whittaker Augusta, Kansas

I. Dr. Robert R. Whittaker, do hereby make this affadavit freely and of my own accord and under oath, deposing and saying: 1. That I am a partner to Dr. J. David Crum in the optometric practice known as Whittaker & Crum located in the Augusta Plaza, Augusta, Kansas. 2. That during the year 1978, 1 did not engage in the practice of optometry except for a brief period from November 13th to 17th and November 20th to 24th. That during 1978 1 was a candidate for the U.S. House of Representatives from the 5th Congressional District of Kansas. 3. That during the period of time I was a candidate for federal office I received no salary from my optometric practice nor did I receive any loans from said practice. 4. That my partner, Dr. Crum, and myself enterred into an oral agreement by which Dr. Crum was to purchase my share of the optometric practice. That pursuant to said agreement Dr. Crum was to pay me the sum of $1,000 per month, said sums to be credited against the purchase price of my share of the practice; said purchase price was to be arrived at at a later date according to the terms of the partnership agreement existing between Dr. Crum and myself, and after arriving at the figure, to be finalized in a written dissolution and purchase agreement to be prepared by an attorney. 5. That the final dissolution and purchase agreement is currently under preparation by Dana W. Haas, Attorney at Law, 423 State, Augusta, Kansas. 6. That the sums I received from my optometric partner were never reported on my F.E.C. reports nor were they ever used by or deposited with my campaign committee, because I did not believe them to be a contribution or loan, as defined in the Federal Election Campaign Act, nor were they received or given to influence the outcome of the election, but rather constituted a private business transaction between Dr. Crum and myself. 7. That iLt-was understood between Dr. Crum and myself and by Joseph F. Shupe, our accountant, that the sums of money I received during 1978 were a reduction of my ownership in the optometric practice, and in the event I was to return to practice following the election, I would do so as less than a full partner, until such time as I might elect to purchase back the partnership share. which I had sold to Dr. Crum. 8. That tIAgreetwsntrdcdt-rtn eas I I J' 46 3 079

Page 2- Affadavit of Dr. Robert R. Whittaker

9. That I have never knowingly or intentionally vio-lated or attempted to evade any"law. That I have always believed, and do still, that the arrangement between Dr. Crum and myself is legal and proper. Further affiant saieth not.

Dr. Robert R. Whittaker

State of Kansas )s County of Butler )

Subscribed and Sworn to before me this day of December, 1978.

UARIFYI "ITA~ty puBLIC Not ry Public S~ Qwf, Kw A

I I

I I "A I Ad EXHIBIT NO. 4, page1

4. CONTRIBUTION:

The capital of the partnership shall be contributed. equally who has engaged by the partners in the followinlg manner. Whittaker area for in the optometric profes~iofl in Augusta and surrounding will be necessary for the m~any yeara, has on hand the equipmenlt which established consid- conduct of the partnership business. He also has therefore agrees to sell erable good will in his practice. Whittaker an undivided one- to Crum and Crum agrees to purchase from Whittaker practice belonging to Whittaker. half interest in and to said optometric it is understood and at Augusta, Kansas and Valley Center, Kansas. and good vill but excludes agreed that said practice includes equipmnent as of the date of the signing the cash on hand and accounts receivable is agreed to be an of this Agreement, The value of the practice year 1969 and amount equal to the gross receipts for the calendar interest of Whittaker Crum shall purchase the said Ondivided one~half gross receipts for the calendar for an amount equal to one-half of the year 1969. as aforesaid, Crum Upon a determination of. the sale price the sum of Five Thou-4 will pay for the same by paying to Whittaker Isand and tNo/lOO Dollars ($5,000.00) on or before January It 1970 together with interest and the unpaid balance in monthly installments per annum adjusted on the unpaid balance at a rat6 of interest of interest one and annually on January 1 of each year to a rate in the Kansas City one-half percent (1-1/2%) above the prime rate amount of the monthly Federal Reserve District then in effect, The and shall be installment payments will vary froma month to month determined in the following manners the Bly the 15th of April, 1970 and quarterly thereafter, and credited to a net profits for that quarter shall be determined be entitled to with- partnership drawing account. Each partner shall

I, ~,.i L i EXHIBIT NO. 4, page 2

ino~hlyto the driawinq -account of each partner, the ciuarteri- a~ rema ining' shall then be available for further' distributici w tr partners.

One-half- of the said quarterly balance shll -be suL-ject 1"o the withdrawal of Whittaker and the remaining one-ha-Ir shii 11further be subject to the withdrawal of Crum with the provision that the one-half of the remaining of the quarterly balance of thp- partnership belonging to Crurn be credited to the installment payments for the purchase by Crum of the undivided one-half interest in the partnership assets as aforesaid. Said payment shall first be credited to interest due and the balance to payment on principal's It is expressly agreedc that the remaining one-half of the quarterly balance subject to the withdrawal of:Crum be applied in the m'anner aforesaid until the. full amount of indebtedness of Crum to Whittaker, including principal and interest, is fully paid.

The practice as heretofore described shall be contributed by the partners and shall'constitut, the capital of the partnership.

In addition each party will contribute on JThnuary 1,41970 the sum of One Thousand and No/lOD Dollars ($1,000.00) to be used as working capital.

After the effective date of this agreement, all equipment, supplies, materials, furnishings and all other products- of every kind and nature, used or purchased by the partnership, shall become the property of the partnership and shall be'purchased with partnership funds.. It is further agreed that no partnership expenditures, except the normal operating expenses, shall be expended, without the joint consent of both of the parties to this agreement. An inventory shall be prepared of all equipment belonging to the partnership, with the exception of that which is leased. All EXHiIBIT NO. 4a, page 1

SECOND SUPPLEMENT TO PARTNERSHIP AGREEMENT OF ROBERT R. WHITTAKER, O.D. and J. DAVID CRUM, O.D.

WHEREAS, Robert R. Whittaker has been elected to the legislature of the State of Kansas which will necessitate his being absent from the practice carried on by the partnership, and

WHEREAS, under the terms and provisions of the original partnership the parties to the same were required to devote certain working time to the business of the partnership and were entitled-to certain compensation therefor, the provisions of which need to be altered, changed and amended as hereinafter more specifically set forth, and

WHEREAS, as a part of the basic Partnership Agreement J. David Crum agreed to purchase, upon the formula established in said agreement, a portion of the partnership all as contai ned in the original Agreement and that through the period of years such payments have been made leaving a certain amount due to complete such payment and the parties do desire to realize such payment, confirm the amount due and to cause the basic agreement to be changed thereby, and

NOW THEREFORE, the parties hereto do stipulate. and agree as follows, to wit:

1. That Robert R. Whittaker shall be relieved of the obligation of devoting his full business time, skill a'nd energy to the practice of optometry and to the partnership to the extent that he shall necessarily be absent for his legislative dujties buhit shalinonetheless

IX 41 0 1 1 374 r_1

EXHIBIT N.i page 2 Page 2 contained in the basic Agreement. 2. During the period that Robert R. Whittaker -shall be absent due to his legislative duties from the normal working hours of the partnership he shall be entitled to 1/10 of the net profit realized from business during such absence and 90% thereof sh-all be credited to the account of J. David Crum. It is stipulated and recognized that other than for the periods of time when the adjustment shall be made for legislative absence, the partners shall share equally in the net profit from such partnership. Necessary ledgers or records will be kept to ascertain the adjustments'-for legslaiveabsences.

3. It is further stipulated by and between the parties hereto that the parties hereto shall each withdraw, from Vtime to time, as may be mutually agreed to compensate the partners for their divisions of ne t profits upon the formula set forth above and that all withdrawals shall' be simultaneously and equal as between the partners except to the extent that an adjustment shall be made for legislative absences as aforesaid. Withdrawals from capital accounts of the partners shall be adjusted on a quartprly basis and at such other times as the partnership may mutually agree to take care of any discrepancies of the partners withdrawals. Pro- vided however, that the partners may, leave certain amounts in their capital accounts and not withdraw the same for the purpose of' maintaining cash balances or operating capital.

4. It is further stipulated and agreed by and between the parties hereto that J. David Crum has paid all sums necessary to purchase his portion of the partnership business as set forth in the basic partnership Agreement with the exception of the sum of $6,500.00. Said sum shall be paid as expeditiously as possible after the 13th day of January, 1975 together with interest at the rate of nine percent per annum from the first day of May, 1974 un- EX IBIT NOV 'jape'I0 1137

Page 3

5. This agreement shall constitute an alteration of the basic Agreement, as amended byFirst Supplement, and all of-the terms and provisions of the basic Agreement and Supplement thereto shall *be, and remain the same except as the provisions thereofU shall be ,altered, changed or amended hereby.

. - A Dated this -)Iday of Deecember, 1974.

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4 2) '>L I L t- P.O. Iw(-K 8j 070()I0( FEDERAL ELECTION COMMISSION

EI4T~s~31325 K STREET N.W WASHING TON,D.C. 20463 December 1, 1978

CERTIFIED MIL RETURN RECEIPT REQUESTED

Dr. Robert Whittaker ~ ~ RR 1 Augusta, KS 67010 Re: MUR 806

* Dear Dr. Whittaker:

The Federal Election Commission has received a complaint which alleges you and your Committee committed certain violations -of the Federal Election Campaign Act -of 1971, as amended ("the Act"). A copy of the complaint is enclosed. We have numbered this matter MUR 806. The Commission has reason to believe that the matters alleged therein state a violation of 2 U.S.C. SS434(b) (5); 441a(a) (1)(A); and 441g. Specifically, it appears that you received loans from your optometric partnership without having the Whittaker for Congress Committee report your 0 receipt of such loans; that the loans exceed the contribution limitations of the Act; and that your personal cash loans to the Committee, exceed the cash contribution limitation of the Act. Under the Act, you have an opportunity to demonstrate that no action should be taken against you. Please submit any factual or legal materials which you believe are relevant to the Commission's analysis of this matter. Additionally, please submit answers to the enclosed questions. Where appropriate, statements should be submitted under oath. The Commission is under a duty to investigate this matter expeditiously. Therefore, your response should be submitted within ten days after your receipt of this notification. If you have any questions, please contact Scott Rinn, the attorney assigned to this matter, at 202-523-4000. r -- 'v~. 2~~*. I: ~ j A~;:;~.mi.

2 -

This matter will remain confidential in accordance with 2 U.S.C. Section 437g(a) (3)(B) unless you notify the Commission in writing that you wish the investigation to be made public. If you intend to be represented by counsel in this matter, please have such counsel so notify us in writing. Sind rely,

William C. Oldaker General Counse~l

cc: Whittaker for Congress Committee P.O. Box 68 Rose Hill, KS 67133

er-, THE FEDERAL ELECTION COMMISSION

TO: DR. ROBERT WHITTAKER QUESTIONS RE: MUR 806

1. Did you receive any payments from an optometric partnership of which you are or were a partner, while you were a candidate for federal office in 1978?

2. If the answer to question number one (1) is yes, please provide the following information.:, a. the name and address of. the partnership b. the members of the partnership C. the manner of payment, (i.e. check or other) d. the number of payments you received in 1978 e. the date of each payment

__f. the amount of each payment g. a photostatic copy of each payment

3.' Did you or your Committee report the receipt of each payment referred to in question number one to the Federal Election Commission?

5. Explain how each and every payment referred to in question number one (1) was received and treated by you and the Whittaker for Congress Committee, (i.e. loans, salary, installments in conjunction with a buy-sell agreement between you and the partnership of which you were a partner.) QUESTIONS TO -2- DR. WHITTAKER -MUR 806

6. If there was a buy-sell agreement between you and the optometric partnership of which you were a partner, please provide a photostatic copy of that agreement if it was a written document, or affidavits by the principals if it was an oral agreement, concerning the terms of the agreement.

7. Provide a photostatic copy of yotur partnership's agreement used to allocate partnership p~rof its. Include the name and current address of the person in charge of its administration.

8. Provide a photostatic copy of any ancillary agreement made by the partnership to provide compensation to you while you campaigned for election to Congress.

9. For the two personal loans you made to the Whittaker for Congress Committee, one for $10,000 on July 1, 1978, and the other for $5,000 on July 18, 1978, state whether they were made in cash, by check or in some other way. Provide O ~ a photostatic copy of the cancelled check or the receipt evidencing these transactions.

10. For each of the following loan repayments from the Whittaker for Congress Committee to you, state the disposition of the funds, i.e. placed in your personal bank account; given back to your optometric partnership, etc. a. $1,000 on July 7, -1978 b. $2,000 on August 8, 1978 C. $6,000 on August 28, 1978 d. $5,000 on September 20, 1978 of each of the *-Also, provide evidence of the disposition above loan repayments from your Committee to you, i.e. receipt, cancelled check, etc. BEFORE THE FEDERAL ELECTION COMMISSION

In the Matter of) MUR 806 Dr. Robert Whittaker) The Whittaker for Congress ) Committee (Kansas))

CERTIFICATION

I, Marjorie W. Emmons, Secretary to the Federal Election Commission, do hereby certify that on November 28, the Commiss~ion determined by a vote of 4-0 to adopt the following recommendations, as set forth in the N First General Counsel's Report dated November 22, 1978,

regarding the above-captioned matter:

1. Find reason to believe a violation of 2 U.S.C. SS434 (b) (5) ; 441a (a) (1) (A) and 441g may have been committed by respondents Dr. Robert Whittaker and the Whittaker for Congress Committee. 2. Send the letters attached to the above- named report. NVoting for this determination were Commissioners Aikens, McGarry, Thomson, and Harris.

Attest:

Secretary to the Commission

Received in Office of Commission Secretary: 11-22-78, 10:56 Circulated on 48 hour vote basis: 11-24-78, 12:00 41I"

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FEDERAL ELECTION COMMISSION 1325 K Street, N.W. Washington, D.C. 20463 18 NOV 22 A10: 5 6

FIRST GENERAL COUNSEL'S REPORT

DATE AND TIME OF TRANSMITTAL ______NO.__806_ BY OGC TO THE COMMISSION AMV DATU CO 806 ,RCEV BY OGC October 29, 1978 STAFF MEMBER Rinn SOURCE: Gordon Garrett, Campaign Director Don Allegrucci for Congress Committee (Kansas)

RESPONDENT'S NAME: Dr. Robert Whittaker and the Whittaker for Congress Committee (Kansas)

_ RELEVANT STATUTE: 2 U.S.C. SS434(b) (5); 441a(a) (1)(A); and 441(g)

INTERNAL REPORTS CHECKED: Statement of candidacy and all 1978 reports of the Whittaker for Congress Committee

FEDERAL AGENCIES CHECKED: None

BACKGROUND

On October 29, 1978, the Commission received a notarized complaint from Gordon Garrett, Campaign Director, Don Allegrucci for Congress Committee against the respondents, Dr. Robert Whittaker and the Whittaker C; for Congress Committee. The complaint made the following allegations: 1. Since at least January 1, 1978, Dr. Robert Whittaker has received $1,000 a month from an optometric partnership of which he is a partner. The partnership is not incorporated.

2. Since January 1, 1978, Whittaker, by his own admissions, has not examined any patients in the course of business for the partnership.

3. To this date, approximately $10,000 has been accepted by Dr. Whittaker for his personal use, none of which has been reported as provided for in the Act.

4. Personal conflicting statements by the candidate, Dr. Whittaker, 'have described the money received as: a. salary b. loan c. buy-sell agreement that would be applied to buying the partnership if the campaign is successful and a loan if the candidate is unsuccessful. -2 -

Based on this information, complainant claimed that the partnership made, and Dr. Whittaker accepted, contributions in excess of the S441a (a)(1) (A) limitations of the Act. REPORTING EVIDENCE

On FEC form 2, dated May 5, 1977, Dr. Whittaker waived his personal duty to file reports and keep records of receipts and expenditures pursuant to 11 CFR S101.3. A check of the reports of Dr. Whittaker's principal campaign committee, Whittaker for Congress Committee, shows that Dr. Whittaker made two loans in cash to the Whittaker for Congress Committee; one for $10,000 on July 1, 1978 as reported in the 10 day pre-primary report, and the other for $5,000 on July 18, 1978 as reported in the 30 day post-primary report, each coming from Dr. Whittaker's "Personal funds."

The Committee also made various expenditures to repay out of pocket and in-kind expenses that Dr. Whittaker incurred on behalf of his campaign. PRELIMINARY ANALYSIS

__I. Candidate-received contributions vs. "personal funds" of a candidate. The issue in Dr. Whittaker's case is whether the payments he allegedly Nreceived, ($1,000 per month) from his optometric partnership are: (1) contributions from the partnership falling under 11 CFR S101.3 (a), which would have to have been reported by the Committee when received by the candidate, but were not, or, (2) salary and therefore the candidate's personal funds falling under 11 CFR Sl0l.3(b) which do not have to be reported by the Committee when received by the candidate.

C Under 11 CFR Sl0l.3(a), candidates who have waived their personal reporting requirements and who personally receive contributions must surrender the entire amount to their principal campaign committee within Sfive days and they may not commingle such contributions with their personal funds.

Under 11 CFR Sl0l.3(b) a candidate may not make unreimbursed expenditures for his campaign, but he may make an expenditure from his personal funds to his principal campaign committee, which shall be reported by the Committee as a contribution from the candidate.

"Personal funds" are defined by 11 CFR Sllo.l0(b) (1) and (2) as funds which the candidate has the legal and rightful title to, at the time he becomes a candidate. "Salaries and other earned income from bona fide employment" are included within this definition under subsection (b)(2). "Contributions" are defined by 2 U.S.C. S431(e) (1)(A) to include loans made for the purpose of influencing the election of a candidate to Federal office. -3 -

I. "Personal funds" v. "Contribution" as applied to the complaint's allegations.

The complaint alleges that Dr. Whittaker has been receiving monthly payments of $1,000 from an optometric partnership of which he is a partner. At various times, Dr. Whittaker has allegedly termed these payments as salary, loans and installments in conjunction with a buy-sell agreement whereby his partners would buy out his interest in the partnership if he was elected, or the payments would be treated as loans from the partnership if he were defeated.

For purposes of analysis, the three ways Dr. Whittaker has described these payments will be considered in only two ways: either as loans or as salary. 1/

The Commission dealt with a similar fact situation in AO 1978-6, where a lawyer was receiving his regular income from a general partnership while he campaigned for Federal office. The compensation scheme was based, in part, on the number of hours recorded as client work done by the firm. AO 1978-6 stated:

... to the extent your compensation from the firm is not reduced to reflect the lower number of hours you N will work for the firm because of your candidacy, the amount of compensation attributable to that difference is a contribution to your campaign by the general partnership. This contribution is subject to the limitations and the reporting and disclosure requirements of the Act. See 2 U.S.C. S§434, 441(a); 11 CFR 104, 110, especially 110.1 (e): contributions by a partnership. The complaint states that since January 1, 1978, Dr. Whittaker, by -his own admissions, has not examined one patient in the course of the partnership's business. The importance of this allegation depends upon the C terms of the compensation agreement used by Dr. Whittaker's partnership. If hours recorded as client work was a part of the partnership's compensation agreement, then the payments received by Dr. Whittaker have been, at least Sin part, contributions, unless they reflect a decrease in compensation for fewer hours worked. If hours worked was not part of the compensation agreement, then Dr. Whittaker would have been receiving his usual bona fide salary.2/ The complaint does not contain sufficient information to make a determination of this critical fact.

1/ Ths will be done because of the nature of the third possibility, the buy-sell agreement. Under the terms of the alleged buy-sell agreement, the condition precedent, Dr. Whittaker's successful election, created a situation where the agreement was void and unenforceable until the condition precedent would have been fulfilled. Until that time, the payments would have to have been considered a loan, and therefore this analysis will consider the payments only as a loan or as a salary. 2/ AO 1976-70 states: "If the candidate were receiving compensation in the form of earned or accrued leave, the Commission would not regard that as a contribution since, by analogy, no compensation is considered paid to an employee 'where the time is bona fide, although compensable, vacation time or other earned leave time.' See SlOO.4(a) (5)(iii)...11 -4-

Complainant further alleges that Dr. Whittaker had accepted partnership money for his "personal use." The reporting exemption for payments of routine living expenses from non-campaign funds (personal funds) under 11 CFR SlOO.7(b) (10) does not apply to respondents, unless the payments are treated as bona fide salary. If the optometric partnership payments are campaign contributions in the form of loans, it is irrelevant whether those funds are used exclusively for personal living expenses. AO 1978-40 states: The Commission has previously held that funds provided to a candidate to be used solely for personal living expenses and subsistence of the candidate and his family are contributions for purposes of the Act if the funds are not "personal funds" under Commission regulations, SllO.l0(b) ... (See also AO 1976-84; 1976-70) III. Conclusion

The office of the General Counsel recommends that an investigation be opened to determine whether the payments received by Dr. Whittaker were:

N (1) salary, and therefore not in violation of the Act, provided that all other requirements of 11 CFR S101.3 are fulfilled, or

(2) loans, and therefore in violation of (a) 2 u.S.C. S434(b) (5) for the committee's failure to report the loans as contributions, and (b) 2 U.S.C. S44la(a) (1)(A) for the Committee's receipt of contributions in excess of $1,000 for the August 1, 1978 Kansas primary election.3/ IV. Cash Contributions

Additionally, this office noted that the reports of the Whittaker for Congress Committee indicate that the loans made to the Committee from the candidate of $10,000 on July 1, 1978 and of $5,000 on July 18, 1978, were cash loans in violation of 2 U.S.C. S44lg and 11 CFR 110.4(c) (1) and (2). Therefore, the office of the General Counsel recommends an investigation to determine whether or not these loans were in fact cash loans.

3/ A loan is a contribution as long as it is outstanding and unpaid by the candidate or committee to whom the loan was made. 11 CFR 100.4(a) (1)(i). As it is repaid, the individual lender is no longer charged with a contribution for limit purposes under 2 U.S.C. S44la (See AO 1978-40). The reports of the Committee show that $14,000 of the $15,000 in loans was repaid: $1,000 was repaid on July 7, 1978; $2,000 on August 8, 1978; $6,000 on August 28, 1978; and $5,000 was repaid to Dr. Whittaker on September 20, 1978. Although the Committee repaid Dr. Whittaker for all but $1,000 of the personal loans, Dr. Whittaker must also repay the contributions to his partnership. Whether or not this was done is unknown. - 5- S

RECOMOENDAT IONS 1. Find reason to believe a violation of 2 U.S.C. 55434(b) (5); 441a (a) l) (A) and 441g may have been committed by respondents Dr. Robert Whittaker and the Whittaker for Congress Committee. 2. Send the attached letters.

S ATTACHMENTS

Complaint N Reports Letters 0')N

October 278J W~829 A 1 Federal Election Commission 1325 K Street, N.W. Washington, D.C. 20463 8O7449-

ATTN: Office of General Counsel

Dear Sirs:

As campaign director of the Don Allegrucci for Congress Committee, I am hereby filing a formal complaint charging the Whittaker for Congress Committee and Dr. Robert Whittaker with violating the Federal Election Campaign Act. The following facts are accurate to the best of my knowledge and in accordance with statements made by the Whittaker for Congress Committee and Robert Whittaker. 1. Since at least January 1, 1978, Dr. Robert Whittaker N has received $1,000.00 a month from an optometric partnership of which he is a partner. The partnership is not incorporated.

2. Since January 1, 1978, Whittaker, by his own admissions, has not examined one patient in the course of business for the partnership.

3. To this date, approximately $10,000.00 has been accepted by Dr. Whittaker for his personal use, none of which has been reported as required by the disclosure provisions of the Act.

4. Personal conflicting statements by the candidate, Dr. Whittaker, have described the money received as: a. salary b. loan C. buy-sell agreement that would be applied to buying the partnership if the campaign is successful and a loan if the candidate is unsuccessful.

If the money received is salary it is in fact unearned income and is therefore subject to the limitations and disclosure provisions governing contributions. (See attached AO 1978-6). F'ederal Election Commission Page 2 1325 K Street, N.W. October 27, 1978 Washington, D.C. 20463 Office of General Counsel

If the money received is a loan to be used for personal purposes such as living expenses, then as outlined in AO 1978-40 it is considered a contribution and is subject to the disclosure and contribution limitations of the Federal Election Campaign Act.

If the money received is a buy-sell agreement conditioned on the successful completion of the campaign and otherwise a loan, it is in fact not an outright buy-sell agreement but is a loan that may be applied to the' purchase of the business and is still a contribution and subject to the dirclosure and contribution limitation provisions of the Federal Election Campaign Act.

From the above facts it appears that Whittaker has accepted at least $8,000.00 in contributions from the partnership that N exceeds the $1,000.00 limitation on contributions from a partnership or individual. Further, the $2,000.00 that could legally be contributed ($1000 - primary; $1000 - general) has not been disclosed as provided by the Federal1 Election Campaign Act.

I respectfully request your immediate investigation and action in this matter seeking all remedies available. I urge you to expedite this matter due to the extreme seriousness of this situation.

Sincerely,

4r&onarrett Campaign Director P.O. Box 1536 Pittsburg, Kansas 66762 -all 316-232-1474 or 913-233-5088 WAIVER

7' L.

-J ~.Ju.

c ~ ~ ~ i r m~. ev O7i w -lt em~7C ~ L ceo~ '~ ~~5t~ f~t~,IS.~

______Ron l"Dorw 9~itaIO~/RPIC '

*T~.Ut U a. As-S. P8R. nt mt Ino Qe:7,. C,e4 zt;, =::3 15 Otmsim an E-. e~Candid=* A r7 i - C1 7-? nns! 6701.0 P ft- -COM~n rnip4 -it -Ep nn

o0 1secy e~t e ~ned pothinal amt,, ~es M Prrnci=to Cawvicn Committes for the 0

ei~~n~~s?~t:mPrnciem Th effxl-n comm ittee rn etvcte sa oiiaci~ ionIV=~ on FCCForm.1

(~r-O COMMcZ=?13

7 1 t-.cty tt t~jvr: ~SOii and /or rtate bank(s) as , icn ftpocitories to to wed by myelf erd ttheLc!O gphli C15~

(c)= Cf'oc (ifu::) (C) Namne of Bank Onrfull)

(t:) Acddres (numn! end ctrect) MbAdre ( esbav. tl

151.2 Mntrl ______w) City. cnt erd ZIP coft (c) City. State and ZIP code

Amrumntam Knmons 67010 ______(d a ofsoDaftc (in full) (a) Kano of Bank (in full) flooo Hill Stato Bank~ MbiA&dree Inum...b end street) WbAddrens (number and street)

(?City, $tooe end ZIP coda (ci City. State and ZIP code Rooo Hill, Kancas .67133 ______Ceedd Reee.rtinmSe~z n3 Ctwck Reportini rtaltn (a) or (b) (whichever iseplcb p(e) I hffcl-y certifyl~ te cbov namned committee end ciatherized ecenss thereof wvill receive aed di-Sbure ALL funds in sv~~pm' of my candisdery in t"I ebov etct c-s.I-sdupon this certification I hefetby frewver a waiver of mnyreoortO3. rempontib-11y. If. ite' iri t"is form. I pe'etonreoe coni~hnaoft or make cx;*nditurcs, the waiver becomesvoid end I must file a serate report es req~uired bry2 (iCC 434 an (red-crc Election Com'- ftron Form 3. O(b) I intenda to pe e1ly receive contributions andfov mnake expenditures in cuopoort of my candid-acy end wv1l f it* wteO10 MP"re of tuch rectim rtsed m~riv'erccluired by 2 USC 434, on Federal Election Comm.'st.cn Form 3.

I ce"5'. den I t':O J(v itis~n1L-i to the /tI kptvvq4.C an stu, orc n op"

(Signature of Cendieate3) (Date)

rdott; f-i..jr.s!?'on of fzoefrceonts, or Incomwecte information may zubcct the perso-1 slenino tmls Statemtrtt to tNo pene!-e-- cl 2 Vu.C. § 43 7 cr .32-rrverre ofrc rm) S

APRIL 10 QUARTERLY,,REPORT, 197w8

AD 3 M A MD C CAT V 3

VtlCe.D.C. 20453 of I-C- PC=~ a (Indwmae Primery or Gawari Etdn for ech EtrUvI

Name of Cndtdsm end Cammines io Fuall

FIAlSldsan. Meilmno Ad*=ct wd ZIP Cods ofDbtcCabor mwhtr 03 (owth. ciMoifaiwe omletoy V7 lbvbVltlrd.W. "00 Debt. Contvct. Pawment C~~ M . Roc 13-7 cmeet or To Out cme Acz3uota, Ito. 67010

1Imifry QGeqcl lOther 825O*7 0 - L81-0.v

f01a Goc'lpflon Of tho czOL~poo. VDldtlen C? tho £Cet, ini t1U c~tovt't o~o031O1 flo1florO o ho1,0t4M b01CM*o MIC'Ocloe 0t:QtObc c~ Ore 11no 27 o2' t~z 197? vows 0=1 ropo7'%&b

Full NamIe. W!ilmo Ad*=e and ZIP Coft cf Debtor or Creor 0= (nmth. Amon cf Orot'eel Cuteluwsim~ 1)~ fl~o~t~~t~o& e.yeor Q~t. Contic=. Paymeti l2~ 1A~'eeem or To 0Mt Ae.3uot at no *67010 2-.7c

NATUJRE CF OflLIGATIOtJ (efts of D0btI: S1oo LzZeaj.ame1ca cbo1Of.I

Full bwnme.ftdin2 Addwn tona ZIP Codc Dfebftor or COrec Dal. (month. Amount of Origmnel Cuamulhtive OveMcon3

Avwwtoap lbo. 67010 3-3147 PgmsThI

I____I G."1.7I~ s 1Thar I ATURE. OF OBLIGATIONJ (Details of Debt) 1,, .ooEml~ caation cibovo

CUSTOTAL ths w~d th2OP (0liOill...... j 3225*23 5 -0-i 5 76 )t

TOTAL this eriod ((ets p~ thislim nmber onlyl...... o 3225.P263 6 -0- M.76"""

Ceury ournands"ngW=bliCO to10 apriots line oS suffifwy 4

I I 0

10 DAY PRE-PRIMARY REPORT, 1978

mj,n ILA

D.C. ~ I t~7 FC FOX.1 r:;3

1 1 OM9e r-'112 GC7 0=1-4=C c.=22 b rc3 V1±tt4_e?= Cr Conam-eoo* Cittao A", !- v11~bVc~ I rtk el OMWUm am unet%. AffowNq cf M5R=V'p UIc- LaterAu~uotc rF plan t.ar thilft fl,. .1 Aut~aotM.i, 110. 6703.0 jAuetca, gas 6703.0 LOeM froM Pacon al funds Sao Schedule C 7-1438 W#0.O00

F &aL"tr. af i- = mdi2~- c plic I= c1 WN Um Lth. Amown f 0 =Tst- art. yew) this Puid

C%. (~~ (~t: A c,~1 1 e~~ c Fill A~T~Ac'l- ~~!.OWN=2 ______e:(mnh (=

~~.h pac

pys~' 00!Auus)V"-mQ_.l-

itOv aO vest~noIs thisem

Fe3)-r t; . A=c ?cbl cw =o onc Uts Imontlh. Amount at eco ki;:t (MV.gotthis Peviod

FLOI I,~r. M(Ni~Ae n I csPtcn2I~sc imn Us (month'. Amount of teh c@i fty. "ofneI this Period

* Rcceimt for: Cl Chk if Contributot is elf~angwved

Pg Pr! Gel cr.fToX.2. 8______* Fu!I I Z-2 Vcr3ifi~ngAd*=C c.-t ZIP Coft Prisnpi- 64= cCaincu Uz-to imonth. Amount of coch Fleuccit dsy. yeel) this Period

FRcee"r f cr - 1 Chnk if Contribuator esselfemployed D~ Prim" OG"n-l13 130-Ohe A-L-= Ymr.To.D*. .0 ______CV C 4-1 cl rc. -'3tli - (C".onr c .. .10...... 000.00...... fl2 t ti--v re _M1 9

10 DAY PRE-PRIMARY REPORT, 1978

It:-) V(W3 CeMetm 7.01i~u e

- e!:%tnt~md lift I00im"Ict Primery or Gercd Elmce~ot ech tEn",y nd Cemite s F0 ft t e CWWdmeb, Full ~d~n*M3,Ietg Addren, ensdZIP Coft ei Debtor or Creditor Do." Imw"t. Amount of OriConel Cumultive OUtstondsn D79 I-2bo)-"t lihittal=Ax (tv.vear Debt, Contrect. tyrnet BWnce R. IL. 1 Aeveant or To Oate Cose, of hucuotati g~o* 67010 7-1ho-78io - I

VStFYv 1'CGeneral 0 Oher $10,000O.01 S .0. *3,81807 NATUM OF OSLIGATIOI 1Datods of Debt: Coeh loen lomied bye ths OtaMdabe to the3 coriittee. Nration of the debt irs till af ter tO olecticn. f1o lfltere33t uill be charged. Source of funds is from the cenidators otmn persovnal fundo. Tho lom~ is unseaured,, the outstanding balance includes the balancal reported an lirr.. 27 Of the 1977 year end report for 1977.

3 Full Items. Iftng Add~e~s end ZIP Coft of Debtor or Creditor Date (month~. Amount of On~ine Cumulatie" a Outstendin dsy. yewI Debt. Contract. Paymmn eaec at IAcuemnt or To Date CmClof Promme This Period

NATUIM OF ODLICATIONI (Ostasts of Debt).

Full hoetVm. #Aostt Addfeus and ZIP Coft of Debtor or Creditor- Date (month. Amount of Orieunul C' Outadn dsy. veer I Debt. Contract. PON Balance An Areement of To Daie O&Atof

fl~Poms Oh ThimisPeriodi

PIATURB OF QOLIGATION (Details of Debt$: 30 DAY POST-PRIMARY REPORT, 1978

~rrJ Election Commission (COsttribUtionS, Trendfois COnttnion In.Kittal. ,K stre3t. Iva. Otdo Incomoi, Loans. Retumb)s .hington. D.C. 20453 Supportino Lines 14a, 15a, 15;,. 15,L 44 17e,.i!- Of '~ No dules for twi-it iinel of FEC F ItV* !Jem af Cendidsom of Cotm In Full U~hittalcer Alor Congress Con'rittee Full Name M131 n Addrss and ZIPCd Principa Place of Ss....e Dr.Ao'ler WittakerPo"Agut 11010ii~~li~ nui~ of each Receipt RR 1, Augusta, Ks. 57010 Augusta, PKa-' ** .*'A' 11114iPeriod Loan frrn Person'ff funds see Scheduile C0 OtbRetr .t Receipt for C Chc i. O t4wI* i-,i#- ,6110 n-rmr D0eerl C Other AV iS#Veal To041itv, $13V Full Name. Mailing Address and ZIP Code Principal Piace of Sutsitf- 'l*".'.i of each Receipt .lm ~PA. I this Period

Receipt for - Uchc- __ 3 Primary DGeneral C0Other Aqr: s.i Full Name, Mailing Address end ZICode P'ncpie ~lOf Aliitmni of etch Receipt its~ ~iugui this Period

Receipt for Check!Fof CoPItisbUtor i fel v,"01r% t.J Vrimery 0 G~eneral pOther jAqregate Yea, To-Date s- Full Name. M.al na Address arid ZIP Code Principal Place of sliness %d.r 1b't~.'Oiu of each Receipt %I#,vow this Period

Occupation

.4 0Check if Contributor 5s self emioyed D Primery 0 Ga eral 0 Other Aoore Vew*.1110 aT~lg.£ - Full Name. Mailing Address and ZIP CosPrincipal Place of Busines 6a84mtiT Amount of each Receipt dov , vst I this Peritod

Occupati-on U Check if Contributor is self employed P pramev D General n Other Amreoace Year.To.D.se.. . £ ul a.L'CinAdgenZPCosPrincipal Plice of Business Dt(month. Amnount of eech Receipt PulndZI NM2 Cdeday.V-iin Adres ear I this Period

Occupation

(Pccti;tf 3 Check if Contributor is selfemployed a Primury 03 General C0 OtherOther ApqregateYearTo-Dt ... Aprgreoate Year .To-Dote ..S £ ______(mont. Pull Items, Uzoinng Addres and ZIP Cods Principal _Amontof ______op Place of Busines a, ymonth Amuthi rofdReep

Ocption

p cc lo ' 03 Checkif Contributor is self-employed

f:07Aq'coA pi te *.ls this pect fogionelll K-~t~r~ (it -1 e i~lino ~-iu~', r' O nly) ____ - T I s,5Th~ J

30 DAY POST-PRIMAR LE~QRT.1.97-8 '20 42TUa 0D C- =D IUCICG Of- .' VSVyr. 0 ? 3 T e i Oon~~tf ut Co M14 61uet"lo lI "e fog _109tlEl07t0 Lee.. g t ,q m e ed l fg LII es2 0 3. 21 U . nd 2 1 . 2b . fl l ft Ka Eltetio N o mss o S Jpp o f ifl 25 K Srett, VV o FEC FORM 3

Name of Candidate or Committee in Pull Wqhittrlker ror Congre co~itteG

at ,,.ih Ai'fO ti pedi an Zip Codl particulall of Expeflibii'e Full Nomit. Mailing Address repaym-it , v Whittaker Partial Dr* Ribort 'vihittafter' s lowi U~ lie' - Augusta, Kn. 67010 to!~. tof each expend'

Address and ZIP Code atCl"o vedsiosthsprd Full Name. Mailing ''~i'wr 'ipro Inc* Corporation cht',% '~tn~ Luthi Cattle check~ ow t Wo'03~ 1f1adisofl, Ks. 66M~ er-ror.sOr

,,i.h. Amt at th perid- I0* PriuettEpnduf.la FFuliName. tMailino AddleSS and _ZIP Code

Expenditue for

taeIi~9hW ti 6xPMI0 Partru1aPS Of Expenditure ~ PulNe-ne. rMailing Addres and ZIP Code E ~~pend #to, Ic

03 Primav (1 ''n *I nthe'a hsvro Full Namet. MWiling Address and ZIP Code ptclmo ~odtr;-

dev. veerl twmitill period Perticleit of ExPflniUlt (* Ful Nn. Mailing Address and ZIP Coda

penSlnenmbron TOTALgrUUIIlestpageperiodtur ofa ain F ...... 30 DAY POST-PRIMARY REPORT, '78

M~OTO AN3D ODLIGAT1OCJ3 rieryt 1073 Lee'.tdv'ber iaz.. diral Election Commisviiii Supportinto Line NumbeuS 12 end 13 25 K Street. NVYA of FEC FORM 3 (Use Separate SChsed.00S 10r lihington. 0 C 20403 each num~bered '110,1 (Indicate PrimnarV or General Election for each Entry I I______Name of Candidate and Committee in Full Whittak~er for Congress Coimtittee IDate lmonth. jAmount as Original Cumulatiee F toll Name MKilon' Aqdress and ZIP Code Of Debtor or Creditor !'AanCe at Dr.s Robert 'vhittaker Iday. year I Debt, Contrart. Payment iAgreemenit or To Date RR 1 -% Period I Promise A'irgusta, Ks. 67010 *7-18-78 s 31418 3 Prinrjuyv will-tut Other

NATURE OF 0131 I(,AT ION lt-I-lI% tot Debt) Cash loin, 1on-ed by the canidate to the rovittee. Duration of the debt Is 1t11i after thi No LnterP.,t will be charredo 5 -urce of funds is5 from. 4he caniJ-ites .,,WT perzona1 election.l 1i funic. T"he lonn is un3e,2ured, the outst-inlingbaaceLzds the balan~e r('n')rTed on, I27 of the 1977 year end report for ].777.si

I f'4 ltCurne 4'jt%, '. Starvdinq or Creritr Date (month. AmounI o uil Namne, Ma.ing Addiess and ZIP Corte of Debitr ti1 oenceat day. year)I DOW' Cc *"tatt Pavr~ew i'fl 0' To Date Z'osi of Dr. Robert ihittaker sPerisod Aug~usta, Ks. 67010

- ---*-- 7-31-78o'S S 3DD3.-)J S z Z. Primary (msiwiefalOte- heiO 4ALREt Of QBLIQ T N l Deltaistil) fl Sl kin icur res vy the candiate. J3e e attached itn.lzed list fradsro of the expenses. Durntion or' the iebt is till such tim~e as the cotn'mittee feels -.-ey can repay -1l1 or a portion of the debts. lo interest is to be c-hargedg source, fro-i. :anndidatez oun'n perSonil funis, unsecured. The outs tandiLng balance includes trie balance re;z-.-ed on line 27 of the 1977 yeir end report.

~umuiati~ Date (mnonth. Amioint ot 0 -Q~ndi Full Name. Mailing Address and ZIP Code ot Debtor or Creditor Balantce at Debt. Canitact. Payment day. year) Close ot Agreement or To Date Tvr.sPeriod Pfom-se

. is Pt omat V General Other

NATURE OF OBLIGATION (Detais of Debt

TSJOTAL i pied1. ths line noboa l...... - I :) j JULY 10 QUARTERLY REPORT, 197

C:7 Ce7-^rLr UnMV=1r.2 nD~s V-J 13 ht'. D.C.ZX3 eevt- nufifeft-noIW (lndimet Primary or General Election for ech Entry) 0695,02 ____

Nem, ot Czncda~toj end Committee enFell r~itsi £ior Conirmoo Cori-dttoe Full~~dfesedZPCd ~~ ~~~~~~~~~O fDbo.. el rCos' Dt I~f~month, iAnount of OrecimnciCumfuaive OVIStendmn3 Ful e" MlnqAdt-senZP ~s f IA~ O Ccctf bV wa I Debt. Conttect. P~n CtwIO et am e c Dro lcbrt rOf Apament3 To Date

AwuataT K3 67010

4/30/78 3 17836 6 w- 0 19307.78 IPrimaryv IGenera (Details of Debt): NATUM CF OSLIGATIQOJ ited.zod hoat foLi a D~zzzo3in 1, nd irizuz-d by the candidate* See tho attached h oooo Drto of~ tho debt is till aftor tho olocticn. rO LCZ'it-0- h to bo c orcourco, from cowndiclztes orn poroona ud3 WCOId itrV3 27 of tho 1977 ynar owl o~~tfldfZbalvnao ftzludoa the balance reportod on Line

O.tt (month. AmoInt @iOf01Ceie l cumultiee Full rve-'. tfln Addle". end ZIP Cod* of Debtor or Creditor dsyyef) AneM of To Date Cogi Dr. tobort IWhttlmr gcroe it it C1 PremiseThis Awu"ota., r-,3 67010 C.-

C. ~S/1/7' S1896.141 *0-- 22203e(92 71 Primary General L'11titr

IMATURG CrF 03LIGATION (Details of Debt$

CM2 of 1)r. flcbort UrhittaImri Acleemvm Or To DMte AuZf-3ta~, Hs 67010

IS 2h~63 99*40 23667.05 I~prmav Geea Oter 6/30/78 Ie Itcni . f1or ?aeln

Se Vi h ___7ALO ~r~i...838*bh

CI1~7AL ~- ~ ...... 1

JULY 10 QUARTERLY REPORT, 1978

~ a~ LOne Itumber 72 FewItt!~,I~X* MUeCrePeres. Veheftl ter cecti numbved line) (indlicate Primcey or Generel Election fat cech Entry) 0595,0? r I Nenie of Caniwtdat end Committes in Full

I Full Name. Mailing Addtess and ZIP Cod2 ot Debtor of Creditor Date (month. lAmount of Original ICumulative 1Ournwn"3n "V, veer)I ebContract. Payment Bulnce e D'. Etbort,I-ittlo IAgreement or To Onto Case at itRa( Promise jI This Period Auguwtas ns 67010 5/30/78 69.05 1 -0 6/30/78 81.16 0a- 23818407 :E Primary General Other NATURE~ OF OSU~GATIONJ (Details of Debt) Offlaco pxtty cash thich has been paid by out of pocint o=, nses. Dlura~tion of the debt La till after tho olct5on, no interest is to be charged, source of funds is frxon Dre h-1ilttakorz" I:=~ porsonal funds. This loan is unsecurod. The outst'anding balmnc iLclUd03 the, balanco reported on Line 27 of the 1977 year end repoev.

-- -P -. Daite (month, Amount of )riginal Cumulative Full Nenie. Ma3ilinq Addre-Ss and ZIP Code. of De-btor Of Creditor rlay. veerI Debt, Cortracs. Payment eelenc et To Dot* This Ptewo Promise

1 S iS! dw PrincryGenets, &SherV NATURE OF OLIGATION IDetails of Debt)

Amount of Or iginall Cumulative Outsfdin~ Code Of Debtor or Creditor Date (month. Full Nart. tdMlng AddresS%and ZIP day. year Debt. Contract. Payment I Batence as Agreefteni of To Date ce of Promise I I This Period

$ I Other Primary General ~------.- ~

tJATURS OF OBLIGATION lOetails of Debt)

I~ ~ ~ i pried this (OP1t0nal)...... i t Q .0$ CIT7 L5 r t0 15 .2 0 1Fl(TIPD.

~pr~rr - 1978

13 I S~" 11.41 CC CATC=13 0CM5 rm~pmm n LUno (fem- 12 end 13 Line thum4w -.22'... of FCC FOr.1 3 fIndicute Primary or Geneal Election for each Entry) ech nUtwl~ed loEw)

Nt~e of Cmtnidae end Committeen in Full

Full Nam. Matting Addle%% and ZIP Code of Debtor of CritorSII Date Imoath. lAmount of Original,' Cumnulative Outstanding Dr. Robert WNhittaker day, year I iDebt, Contidrt. Payment Sal ant 61 Rfll IAgreemo",t cor To Date close of Aurusta,i Ks. 67010 8-30Pro8'i Thes Period, to 9-30-78 Primary GeneraI Other s 144l1.64~ 114,000.00' S29.306.30 NAIumI OF OBLIGATION IDetils of Debt$ Erponto in kidnd incurred by the candidate.l See the attached itemnized list for a deacrlp tion.e Daration of the debt is till1 such time as the cor-mittee feols they can repay all or a nortion of the debt, 11e interest is to be charged; source, fron. the candidates own pcrocn."l fum5s, the loins are unsiecured. The outstrniding balance includes the *Oalanco reported on lie 27 of the 1977 year end report.

IPFuli Name. Mailing Acdess and ZIP COde ot Debtor or Creditor iDate (month. -Amount ot 0,,gr'a:. Cumulative Outstanding *day. vear) Debt. Con-act. Payment Balance at * A,4-eerew c! To Date Close of ThS Period

Primary O~i~qsther NATURE OF OSLIGATION IDelits fit Debt)

Full Nam. .Mailing Adress and ZIP Code oft Debtor or Creditor Date lmonth. Amount of 0r: gonal, Cumulative Outstanding day. year I Debt. Contract. Payment Balanve At iAgreement or To Date Close of Prormse This Period

S s I PriaryGeneral Other

NATURE OF OBLIGATION lDolaals 10 D'btlI

UOTOTALO ibis orrood ttlr 0817 lotilonal)...... 5

r07*1. te'., ppeod (10.n p. this lie, number onlyt...... 1441,64 5 149,010-00 5 259306,33

r'-v lot~'e.- r-1 t. #!- v ' tIC, r:'j 10 Ii fli r ofE,toiftf-lfi V A A& w

OCTOBER 10 QUARTERLY REPORT, 1978

II -'mU LC~z' E vcr C=z -- C !

MC U-n -" pt; cl r- Cl-,.J a

M1t~eIr For cn-roas Coit0-*

T--v1aPart~al repa~me-t of Dr. cm.vwt fl21 lrflttcokor'a loan to tho Anunta, EO 67010 0-20______70 al=W&uu fo 9.20-70 ~ eoc

NO? fftrnw.fileng AdaMid ZIP Coda jdiaSe ci Gqincw 0= ~ fty. yeW' I

Ernditura for,

V-~tern W-'In3) A---r=~ end 29? Col-^ Ft-culet3 of L=-.3~tt cmi vevse') ~ t=l--

* Ea~peidtu'w for:

to. &Y.vewl t-3@

~Primery G encref 30'%v_ ,______IIC) QI.4. ta~in A,-*-IT end ZIP Coeb Pcrticuli of Emart4ure . ~ ci C~ C=

13Pen~auOfat I______I FO? K-s Wfit A*= end ZIP Coda Fw~IIulaat ~ U= trc4IJ1U o~ 'c~z ofty. yet,

Lcw.endiure for: Orrimery 0 General Done- S i cCz:-- -zi FV.1I~3 Mtim Ad*= colad ZIP Coa fttiCUSCfl at EKpeOit3Wt Utv (month. ftye veer ctb=tr

Lrenotura for: 13 Primayv Getl [3 Ote L) no . 6- .- IIelu: ::- VV-j 94cu4n,3 Ad*cs Cf ZIP CW* (by. veer)

Lx?)enditure for:

U...1000.2) T07AL Choreriod ties: pOP thrs Ins number only)I ...... FEDERAL ELECTION COMMISSION 1325 K SI REEl N.W WASHING TON,D.C. 20463

CERTIFIED MAIL. RETURN RECEIPT REQUESTED

Dr. Robert Whittaker RR 1 Augusta, KS 67010 Re: MUR 806

Dear Dr. Whittaker: The Federal Election Commission has received a complaint which alleges you and your committee committed certain violations of the Federal Election Campaign Act. of 1971, as amended ("the Act"). A copy of the complaint is enclosed. We have numbered this matter MUR 806. The Commission has reason to believe that the matters alleged therein state a violation of 2 U.S.C. SS434(b) (5); 441a(a) it appears that you - (1)(A); and 441g. Specifically, received loans from your optometric partnership without 77having the Whittaker for Congress Committee report your receipt of such loans; that the loans exceed the contribution limitations of the Act; and that your personal cash loansL to the Committee, exceed the cash contribution limitation of the Act. Under the Act, you have an opportunity to demonstrate that no action should be taken against you. Please submit any factual or legal materials which you believe are relevant to the Commission's analysis of this matter. Additionally, please submit answers to the enclosed questions. Where appropriate, statements should be submitted under oath. The Commission is under a duty to investigate this matter expeditiously. Therefore, your response should be submitted within ten days after your receipt of this notification. If you have any questions, please contact Scott Rinn, the attorney assigned to this matter, at 202-523-4000. 7"7 -2

This matter will remain confidential in accordance with 2 U.S.C. Section 437g(a) (3)(B) unless you notify the Commission in writing that .you wish the investigation to be made public. If you intend to be represented by counsel in this matter, please have such counsel so notify us in writing. Sincerely,

William C. Oldaker General Counsel

cc: Whittaker for Congress Committee P.O. Box 68 Rose Hill, KS 67133

~ ,~'. THE FEDERAL ELECTION COMMISSION '$~

TO: DR. ROBERT WHITTAKER QUESTIONS RE: MUR 806

1. Did you receive any payments from an optometric partnership of which you are or were a partner, while you were a candidate for federal office in 1978?

2. If the answer to question number one (1) is yes, please provide the following information: a. the name and address of the partnership b. the members of the partnership c. the manner of payment, (i.e. check or other) r d. the number of payments you received in 1978 e. the date of each payment f. the amount of each payment g. a photostatic copy of each payment

~, .'~

3. Did you or your Committee report the receipt of each number one to the Federal P. .~ payment referred to in question ~. i:~.C Election Commission?

4. If the answer to question number three (3) is yes, please provide the following information: .a photostatic copy of each page of any report filed in 1978 indicating the itemized receipt by you or your committee of each payment referred to in question number one (1).

5. Explain how each and every payment referred to in question number one (1) was received and treated by you-and the Whittaker for Congress Committee, (i.e. loans, salary, installments in conjunction with a buy-sell agreement between you and the partnership of which you were a partner.) QUESTIONS TO - 2- '~i~> DR. WHITTAKER - IUR 806

you and the 6. If there was a buy-sell agreement between partnership of which you were a partner, optometric agreeme~nt if please provide-a photostatic copy of that a written document, or affidavitS by the principals it was terms of the if it was an oral agreement, concerning the agreement.

Pr chtoopy of your partnership's agreement 7. ovide ahtstatic the name us ed to allocate partnership profits. Include charge of its admini- arLd current address of the person in at~rat ion.

copy of any aucillary agreement 8. P2:ovide a photostatic to you ide by the partnership to provide compensation wiAile you campaigned for election to Congress.

Whittaker for 9. Fior the two personal loans you made to the on July 1, 1978, and CIongress Committee, one for $10,000 on July 18, 1978, state whether they the other for $5,000 Provide w in cash, by check or in some other way. ere made the receipt a photostatic copy of the cancelled check or evidencing these transactions.

loan repayments from the Whittaker 10. F'or each of the following of f Committee to you, state the disposition ~or Congress account; given t:he funds, i.e. placed in your personal bank kack to your optometric partnership, etc.

a. $1,000 on July 7. 1978 b. $2,000 on August 8, 1978 c. $6,000 on August 28, 1978

of each of the _ Also, provide evidence of the disposition a from your Committee to you, i.e. bove loan repayments S receipt, cancelled check, etc.

-''L,4M- MUR 806

COMPLAINANT: Gordon Garrett, Campaign Director, Don Allegrucci for Congress Committee RESPONDENT: Dr. Robert Whittaker, Whittaker for Congress Committee RELEVANT STATUTE: 2 U.S.C. S434; 11 CFR 104.1 et seq. ; 11 CFR 110. 10 (b) (2); IT CFR 110.1(e) DATE RECEIVED BY COMMISSION: October 29, 1978 DATE ASSIGNED TO STAFF: November 1, 1978 SUBSTANCE OF COMPLAINT:

Complainant alleges that respondent has received $1,000 a month since January 1, 1978, from an optometric partnership of which he is a partner. During this period, respondent by his own admissions, has not examined any patients in the course of the partnership's business. As of October 27, 1978, respondent has accepted approximately $10,000.00 of these funds for his personal use, but has failed to report any portion of this amount as required by the disclosure provisions of the Act. Respondent has, at different times, described this money as a salary, a loan, and a buy-sell agreement that would be applied to buying the partnership if respondent wins the election, or a loan if he loses.

STATUS: A full report will be presented to the Commission by November 3, 1978. FEDERAL [LEC-MTi2 1325 K SIRII1 I NW WASHING I(NI..20103 NIovemiber 1, 1978 Gordon Garrett Campaign Director Don Allegrucci forC-nr Committee. P.O. Box 1536 Pittsburg, Kansas 6 ,7/62

Dpar Mr. Garrett:

This is to achriowicd( ..,ipt of your complaint of October 27, 19'78, c~cqi 11 . C,, lations of the Federal ElectionCwg ;il.UL~73.A t~ffmember ha been assigned to an,,.. dation to the Fecdcrr,-i ~tfltheComrru 4~3 ssel this matter shoui'; You will be notifwL.r. determines what act 'f sV~ui~d-~ t~l?' Prrr information, we hv ~ 0 , of the Commission,- complaints. W)f s .intIce IJ,,I FDERAL LLECTION

October 276 8"7829 AI4II 33'

Federal Election Commission 1325 K Street,, N.W. Washington, D.C. 20463 807449 ATTN: Office of General Counsel

Dear Sirs:

As campaign director of the Don Allegrucci for Congress Comittee, I am hereby filing a formal complaint charging the Whittaker for Congress Committee and Dr. Robert Whittaker with violating the Federal Election Campaign Act. The following facts are accurate to the best of my knowledge and in accordance with statements made by the Whittaker for Congress Committee and Robert Whittaker.

N1. Since at least January 1, 1978, Dr. Robert Whittaker has received $1,000.00 a month from an optometric partnership of which he is a partner. The partnership

- is not incorporated.

2. Since January 1, 1978, Whittaker, by his own admissions, has not examined one patient in the course of business for the partnership.

3. To this date, approximately $10,000.00 has been accepted by Dr. Whittaker for his personal use, none of which has been reported as required by the disclosure provisions of the Act.

4. Personal conflicting statements by the candidate, Dr. Whittaker, have described the money received as: a. salary b. loan c. buy-sell agreement that would be applied to buying the partnership if the campaign is successful and a loan if the candidate is unsuccessful.

If the money received is salary it is in fact unearned income and is therefore subject to the limitations and disclosure provisions governing contributions. (See attached AO 1978-6). Federal Election Commission Page 2 1325 K Street, N.W. October 27. 1-978 Washington, D.C. 20463 Office of General Counsel

If the money recei~~ed is a loan to be used for personal purposes such as living expenses, then as outlined..in AO 1978-40 it is considered a contribution and is subject to the disclosure and contribution limitations of the Federal Election Campaign Act.,

If the money received is a buy-sell agreement conditioned on the successful completion of the campaign and otherwise a loan., it is in fact not an outright buy-sell agreement but is a loan that may be applied to the purchase of the business and is still a contribution and subject to the disclosure and contribution limitation provisions of the Federal Election Campaign Act.

From the above facts it appears that Whittaker has accepted at least $8,000.00 in contributions from the partnership that* N exceeds the $1,000.00 limitation on contributions from a partnership or individual. Further, the $2,000.00 that could legally be contributed ($1000 - primary; $1000 - general) has not been disclosed

- as provided by the Federal Election Campaign Act.

I respectfully request your immediate investigation and action in this matter seeking all remedies available. I urge you to expedite this matter due to the extreme seriousness of this situation.

Sincerely,

&&2nGrett Campaign Director P.O. Box 1536 Pittsburg, Kansas 66762 -ago 316-232-1474 or 913-233-5088 *~ 9O~1~ 1 13

T'--Z 11;i 4 TIONKAN.)DA I N'NEWS

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IS13t URG, Kan. (AP) would move quickly to look into or adowpayenton his available to all federal candi- I t XWhittaker, Republican the allegations. "We'll make a shaofthe trlicprac- datLes. flcfor Coui-ress in the 5th thorough and expeditious han- te cninguon whether "Mr; Whittaker has apparent- _j:tlt was accused today by dling of the matter. I don't ly chosen to Ignore the con- t. campaign~ director of his know how soon we'll be able to said "That's right. sistent findings of the Federal C rnocratic opponent of appar- get everthing together," Buch- 6_~~ec e drlElec- Election Commission." entiy violating federal law by ele said. tion Commission opinion given Garrett said the penalty for t...Ung $1,000 monthly from his The U.S. attorney said he last March to Kansas Senate conviction of a violation of the patner in their Augusta opto- would ship all information Majority Leader Norman Gaar, Election Campaign Act is a metric practice. available to him to Tom Hen- who had asked whether he $25,000 fine or a year in prison. Whittaker was not available derson, chief of the public in- could accept a salary from his or both. for fres3h comnment this morning tegrity section, and would ex- law firm in Kansas City. Mo.. "We understand the extreme because he was campaigning in pect that information to be in while campaigning for the Re- gravity of this situation," Gar- Emyoria. But he labeled the al- Henderson's hands by Thurs- publican nomination for the rett said- "We regret it has not! lcuation absurd in discussing itt day. U.S. Senate last summer. been brought to the public's at- wit'., a reporter late last week. "In the past few days, Mr. Garrett said that opinion con- tention before now, and by Whttaker said he had check-- Whittaker has told reporters cluded that "any unearned in- some other party. ed on the $1.000 he has been re- -that he has been accepting $I,- conic accepted from a partner- "We believ'e the iaw is clear, eeiving from his partner and 1000 per tnonth in unear-ned in- ship is a contribution subject to and the people of the 5th Dis- foundA, i was legal because they rcome from an optomnetric part- the limitations and the report- trict have a right to know the have a private partnership, not nership for living expenses, de- ing and disclosure require- facts of this apparent abuse ofI a corporation or professional ispite having seen no clients ments of the federal Election.? association. since Jan. 1, 1978," Garrett Campaign Act." Gordon Garrett, Allegrucci's said. Reporters who called the campaign director, told a Pitts- * "Many questions have arisen FEC last week were tol d the bur- news conference today as to Mr. Whittaker's ability to federal agency would not offer Whittaker 's acceptance of the maintain personal expenses and an opinion on the Allegrucci al- nioney was illegal no matter campaign fuiltime for over 10 legations regarding Whittaker what the business relationship months. His recent statements unless there was either a for, of himn and his partner. to reporters indicate that he mal complaint filed or a re- Garrett asked James Buch- *has done so by the use of ap- quest for an opinion. In eithei -elta, U.S. attorney for Kansas, parently illegal campaign con- event, an FEC spokesman said A to launich an immediate- investi- *tributions in violation of federal no opinion would be likel) gation into "what appears to be campaign finance and reporting ahead of the Nov. 7 election. the acceptance of illegal cam- *laws." "The Federal Election Corn- n~~1contributions by congres- Whittaker said last week, mission has. rul, d consistently .4 7sional candidate Robert. Whitta-, "I'm 'surprised Allegrucci that a loan to a federalcni- 2 didn't do his homework better. date for personal expenses con- L-jchcle, a Democrat appoint- I hope he brings that up. I just stitutes a contribution to the c"i by President Carter, and a hope he's foolish enough to say candidate's campaign and is fo-ri-cr adrainistrative assistant something about it. I'll be wait- subject to the same rules of re- t2nd District Rep. Martha ing for him." porting, disclosure and limita- A 6 said he had conferred Whittaker had U.S. House Mi- tions as other contributions," .the head of the public in- *nority Leader John Rhodes in Garrett said. t'-:i"v section of the Justice Emnporia this morning for cam- "Since federal law limits con- De,--A.4 trcernt in Wasingtn. paign appearances. tributions to $1,000 per individ- Euclhele said that-section -Whit .6er had confirmed that ual, per election, Mr. Whittaker, has accepted at least $8,000 in' month from his tner. apparently. illegal contributions a s about te most-he from the partnership to pay his c raw rom the income, personal expenses while cam- but it a lies to the urchaseo paigning. the practice. whi e buy "The incredible thing about ftM me if 11' eted," this whole situation is that sev- Wiflrsid1i~Ksfview eral other candidates for federal office, including Kansas Re- "H ying e 1,000 a publican senatorial candidate Norman Gaar, took the time to :itsnote: The following is to himback. research this matter thoroughly ..neznent made by David Askmi tw_ ihrA loan and the opinions rendered were altiai~k~ws, campaign manager f~w Bob Whittaker. ini a Wkhhone call to the news office tirhtI to Allegrucci's

------i IjXOmonthly from partner

tP1IM'f3BU1{G, Kan, (AP) - Robert matter what 1\hittnker, Republican the business relationship of ti11 information available to him to Tom nominee for him and Ilenderson, homework better. [ hope he brings that 2ongress in the 5th District, was hids partner. chief of the public integrity up. I julst hope hie's foolish enough to say ac- Garrett asked James Ruchele, U.S. section, and would expect that in- usdtoday by the campaign director of attorney for Kansas, somethidng about it. ITl be waiting for is c-inocratic to launch an im- formation to be in Flenderson's hands by opponent Of apparently mnediate investigation Into "what ap- Thursday. himn." iolating federal law by taking $1,000 pears to be Whittaker had U.S. House Minority ,onthly the acceptance of illegal few days, Mr. Whittaker fromn his Partner in their campaign contributions by "4In the past Lekader John Rhodes in Emporia this ugusta optometric practice. has told reporters that he has been morning for campaign appearances. congressional candidate Robert accepting $1,000 per month in unearned Wittakerhdcnire *Whittaker's campaign manager, Whttaker." that he had avid Matthews, income from an optomnetric partnership q.en denied the allegation Buchele, a Democrat appointed by for receiving $1,000 a mgonth frornhi Mling it a "partisan and unethical living expenses, despite having seen President Carter, and -a former ad- no clients since Jan. 1, 1978," Garrett ipe by Don Allegrucci and his staff in mninistrative assistant to 2nd District sa id. ying to win an election. Rep. Martha Keys, said he had * If they ca'nnot win by their own con- "Many questions have arisen as to purchase of the practice ferred with the head of the public in- Mr. Wi-ttaker's ability to maintain which he'll ritsan~Md tanrls, they will stoop to tegrity section of the buy"romimeur'm C~tdI"Wins~ '.etling iffe this," Justice Depart- personal expenses and campaign Matthews said. ment in Washington. fulltim-e for over 'V) Whittaker has 10 months. His recent (lone nothing Buchele said that section would move statements to reporters indicate that he "He's a ie 100amot.I .ong. A full statement to this effect quickly to look 11be -Is into the allegations. has done so by the use of apparently dQ n'twi I'la veto p a y -hi-m tack.' ucd this afternoon," he added. "We'll make a thorough and expedi illegal Gordorn Garrett, Allegrucci tio,.,s campaign contributions in 's cam- handling of the matter. I don't know how violation of federal campaign finance Aaked f t as eit her.alnnau.ra d wn __ ign director, told a Pittsburg news paymenit on his saeo h pn~~ ic n;-fercnce soon we'll be able to get ev'erthing and reporting laws." today Whittaker's ac- together," Buchele praci-qe dependi guo ht e i ptance said. Whittaker said last week, "I'm sur- of the money was illegal no T1he U.S. attorney said he would ship prised Allegrucci didn't do his wns or loses, Whittaker said, "ht's 0

:2 La c

U) pi *7 90i 41 p I*

Allegrucci charges Whittaker

aker - 5th District candidates snipe at each 't!"1 zy 0 C%-; I other over campaign financing proce- dures. Page 18B. IkIr 8.

SRoy camips clash, IA Alkqgrucci Vs. Whitlaker PNttsburg, Kan.

By Stephen C. Fehr contribution subject to reporting re- _e',. vas accuscd toxaiy by the cam- TojpckaCorresporc.en, quirene-tLs of the federa, ZElecion1 -:1 ~or ofCILt.s Dernocratic op- TOPEI-The CWallpign manaf-er Campaign Act. for state S,2n. a .apparently violating fejeral Don Al-e' oucci, D-Pitzs- Whittaker has not listed the income bur-g. a candidate for I aw U-vtaking $1,000 monthly from his U.S. rvpre ;enta. on caipaign reports. He was not im- Live from Kansas' 5th District, has mediately pxr;r in their Augusta optometric available for comment to. called for an investigation into alleged day. HeL has said there is notin illegal campaign contributions to the wro gjj4a i ej e campaign of Bob Whittakter of Augus- cause the money is a personi T1&n ta, the Republican candidate. thlT~~e m y-il ischfelc X~itkrwas not available, for V,IittZJher. Who left his opto.et.y tiOMh.- practice mn:tr.:s nmorning because he -in January to campaign, said When be ran for the RepublicZ - wc..;a'a~gingin Emporia. But he two weeks ia-o that he wzas necc!-Aiag nomination for U.S. .ae&.N -tk_-d 'ne alllegatt I absurdl in dis- a rnomh from his partic. (ar- man Gaar. R-Westwood. askzed tL~ a~...giwith a reporter iate last don Garrett, Aliegrucci's campazign FEC for an opinion on whether he rnanager, claurned such az arrange- could receive money while se6kha ietwas a violation of fceral carn- nomination. The FEC said th!-e ximZ pain laws. He said he would ask for would have to be reporzzod as a coal- invc :iaations by the U.S. attor-ney for Uticn.t Kaasand !-,e.LL..S een receiving ltrom the Federal Eletof But Whittaker has said that Ga-u Cormnission. /was a member of a professional assc- ,hi, p-riner and found it was legal be- Garrett said he checked cauise they have a private partner- with Paul ciation, which Whittaker is o.Ju ReycG, a public information officer of hofpe-he 's foolish enou~th to s~y Sin c- sip, inot a corporation or professional te Federal Election Commission in thing,-, F t~ki toithe association. Washington, who said unearned in- A~oiatedPi -8lastWek. "I'll tLa Come accepted from a partnership is a waiting for hin-."' Gorcdon Garrett, Allegrucci's cam- pLa di'rector, told a Pittsburg news cornferenCe today Whaittaker's accep- 0aeothe mioney was illegal no tlc- (::- rrnitzar what the business relationship of caimr and his parter.

Garrett asked James Buchele, U.S. attorney for Kansas, to launch an iin- rrnedate investigation into "what appear-,-s to be the acceptance of illegal c ontributions by congres- slonllAcCadidate Robert Whittaker." PITTSBURG (AP) - Robert ~ca Demnocrat appointed by Whittaker, Republican nominee for P eietC..rr, anid a fcermrer ad- Congress in the 5th District, was ~ .a'~.asisantto2nd District accused today by the campaign ac . N\ai.tha 'Keys. said he had con- director of his Democratic op- &e:,._ ,e head ot, the public in- ponent of apparently violating scc~yticln of the Justice Depart- federal law by taking $1,000 mc~in Washington. monthly from his partner in their Augusta optometric practice. bucioele said that section would move acl to look into the allega- About three hours after the nn."Wie'll make a thorough and charge was leveled by Don CX;Aioshandling of the matter. I Allegrucci' s aide, Whittaker's duLtcow how soon we'll be able to campaign manager, David Mat- g"ct everything together," Buchele thews, issued a statement calling it "fa partisan, unethical swipe" at Whittaker. 661f they cannot win by their own 7.cU.S. attorney said he would merits and stands, shina&I information available to him then they will ,o 'Arr -, cderson, chief of the public stoop to something like this," iritl-.rity section, and would expect Matthews said. ,hat information to be in Henderson's He declared, "Bob Whittaker .&.,. s by Thursday. has done nothing wrong," and said a "full statemnert to this effect" would be issued later today. Whittaker .s an honest. Christian,"Bob hard-wo-.king mian wlho would never do anything knowingly in vioiation Of the law." Whittaker said h1-e had checked on the $1,000 he has been receivnt--.g from his partner and found it was legal because they have a private partnership, not a corporation or professional association. Gordon Garrett, Alegrucci's cam-paign director, told a Pitt- shl'g new%s cGIionfence t~i DON ALLL G'RUCC 12 8 78 P.O. BOX 1536 PITTSB3URG IKS 66762

and the Fort Scott Monitor M4TH YEAR-NO. 273 SINGLE COPY 15c FORT SCOTT, KANSAS 66701, MONDAY, OCTOBER 23, 1978 -, TE-N PAGES LCgmcci Chargyes 'Vh-izllakecr Vio*(lated Campualigi Law 0%PI'ITSBURG, Kan. (AP) - Robert Whittaker said he had checked on the peditious handling of the matter. I don't homework better. I hope he brings that firm WXhittaker, Republican nominee for $1,000 he has been receiving from his know in Kansas City, Mo., while cam- "Since federal law limits how soon we'll be able to get up. I just hope he's foolish enough to paigning for the con- SCongress in the 5th District, was ac- partner hnd found it was legal because everything together," Buchele said. Republican tributions to $1,000 per individual, per cused today by the campaign director they have say something about it. I'll be waiting nomination for the U.S. Senate last election, a private partnership, not a The U.S. attorney said he would ship for him." Mr. Whittaker has accepted at of his Democratic opponent of appar- orpora tion or professional summer.. least $8,000 in association. all information available to him to Tom Whittaker had U.S. House Minority apparently illegal con- ently violating federal law by taking 'Gordon Garrett, Alegrucci's cam- Henderson, chief of the public integrity Garrett said that opinion concluded tributions from the partnership to pay ,o,00monthly from his partner in their paign director, Leader John Rhodes in Emporia this his told a Pittsburg news section, and would expect that in- morning for campaign that "any unearned income accepted personal expenses while cam- A ugusta optometric practice. conference today Whittaker's appearances. paigning. ac- formation to be in Henderson's hands Whittaker had confirmed that he had from a partnership is a contribution About thrce hours after the charge ceptance of the money was illegal no by Thursday. subject to the limitations and the' "The incredible thing about this matter what beepi receiving $1,000 a month from his whole N as leveled by Don Allegrucci's aide, the business relationship partner. reporting and disclosure requirements situation is that several other ittaiker's campaign manager, David of him and his partner. "In -the past-few days, Mr. Whittaker of the federal Election Campaign Act." candidates for federal office, including has told reporters that he has been "That's about the most he could draw lWatthews, issued a statement calling it Garrett asked James Buchele, U.S. from the income, Reporters who called the FEC last Kansas Republican senatorial can- *a partisan, unethical swipe" accepting $1,000 per month in but it applies to the didate Norman Gaar, at attorney for Kansas, to launch an purchase of the practice, which he'll week were told the federal agency took the time to Vhittaker. unearned income from an optometric would not offer an opinion on the research this matter thoroughly and immediate investigation into "what partnership for living expenses, despite buy from me if I'm elected," Whittaker "If they cannot wvin by their own appears to be the acceptance Allegrucci allegations regarding the op-inions rendered were available to , ierits and stands, of illegal having seen no clients-since Jan. 1, said in the interview last week. then they will stoop campaign contributions by congres- "He's paying Whittaker unless there was either a for- all fedeoral candidates. .o something like this," M1.atthiews 1978," Garrett said. me $1,^0 a month. If I said. sional candidate Robert Whittaker." don't win, I'll have to pay him back." mal complaint filed or a request for an "Mr. Whittaker lie declared, "B~ob \Vittaker "Many questions have arisen as to opinion. has apparently has Buchele, a Democrat appointed by Asked if it was eithier a Ionnor In either event, an FEC cho n to ign ore the consistent 'oenothing wxrong,"'',in( ad" 'fl Mr. Whittaker's ability to maintain a down spokesman said, findings President Carter, and a former ad- payment on his share (if the optomeptric no opinion would be of the I tal Election Commission." -aentto this ci opt" xould be personal expenses and campaign likely ahead of the Nov. 1 ministrative assistant to 2nd District full practice, d-rpending upon whether he 7 elecx-tion. Garrott aid the penalty for con- ( SIIC(I later today. tinie for over 10 months. His recent "The Federal Election Com-mission Rep. Martha Keys, said he had con- statc'nients to wis or loses, Wliittalt,.eir s aid, 'Tat's a' vio''lation of the Election 10)Whittak~er is ann honest, reporters indicate that be has ruled consistently that a lo.m to a ferred with the head of the public in- hais dune right. " 1 Can 'c is a 1;23,Mfn e or ayear h 1f;hard-t working nan Mwho so by the use of apparently fedJeral cant idate for pers's-nal ex- tegrity section of the Jubtice Depart- illegal campaign contributions in in pri n, 'r both. 'cOld never do 'iny1' vo;,- glyin inent Garrett viVA t L" s I io il j'scs cnhtsa co1lrjbut ten to tlie in WVashington. x jolcttionl of federa.,l C'nvin rj Lldthie extreme gravity ioU icn (if tiCw'" ~''~. .dd Vi (-'"'1St,,ngand is >t.t3 sO'd ra portiiig laxws.'' )f tmi:F'3 'a, Garrett said. "W~e to Kss. '. 'c ';ji ty' T ' JA ClI~I-.i of i ort ii-f, (j-IC':Ky to look into thealeti s &C 1-ii ,oat I hrroug! ht to the ..:-d in an jlc 1 ,Jaft~.rBid ! '' '', 'I'm te last wcck. -Vyle'llmih a thorolah ond ex- aL'fOYC now; and by i I Aflt. K Si diC'i't () ,' 1acsu!i ' 9 790-10 1 1I 0

? LJ. 11 13 .4i .

(~O "rnq A L I ' -. i ~ i&UA~!FW

Buchele, a Democrat appointed by l ,nAP) - Robert Wit- anything knowingly in violation of the law," added. President Carter, and a former ad- nrnTinee for Congress in Matthews District Rep. Wittaker had called the allegation absurd ministrative assistant to 2nd 0 i!ict, was accused today by the Martha Keys, said he had conferred with the op- in an interview late last week. S(11rector of his Democratic head of the public integrity section of the violating federal law by Whittaker said he had checked on the '$1,000 3.,a~vtly from his partner and Justice Department in Washington. monthly from his partner in he has been receiving l,uJ because they have a private Buchele said that section would move %'igstaoptometricpractice. found it was legal "We'll partnership, not a corporation or professional quickly to look into the allegazions. thIree hours after the charge was make a thorough and expeditious handling of association. we'll be a dby Don Aliegrucci's aide, Whittaker's Gordon Garrett, Allegrucci's campaign the matter. I don't know how soon '~igr2"",1m7aniager, David Matthews, issued a Pittsburg news conference able to get everthing together," Buchele said. director, told all -,atcnient calling it "a partisan, unethical today Whittaker's acceptance of the money The U.S. attorney said he would ship at Wiittaker. was illegal no matter what the business information available to him to Tom Hen- "ftheycannot win by their own merits and relationship of him and his partner. derson, chief of the public integrity section, stoop to something like that information to be in s-'ds. then they will at- and would expect .,_1 hews said. Garrett asked James Buchele, U.S. hands by Thursday. an immediate Henderson's (declurcau, "Bob Whittaker has done torney for Kansas, to launch "in the past few days, 'Mr. Whittaker has said a '"full statement to investigation into "what appears to be the has boeen accepting ;rn,"and contributions told reporters that he wouldl be issued "Later today. acceptance of illegal campaign in unearned income from an t" iccL Robert Whit- $1,000 per month LL'bWittake: is an honest, Christian, by congressional candidate optometric partnership for living expenses, taker." !. :x-work-ng man who would never- do despite having seen no clients since Jan. 1, 1978," Garrett said. "Many questions have arisen as to Mr. - .' .- ~ ,--~ Monday, October 23, 1978 Volume LVIII Whittaker's ability to maintain personal V " expenses and campaign fultimne for over 10 Eight pages today Number 280 months. His recent statements to reporters indicate that he has done so by the use of apparently illegal campaign contribultions In El- Dorado, Butler County, Kansas 67042 violation of federal campaign finance and reporting laws." ~&. -- ~--~ Whittaker said last week, "I'm surprised Allegrucci didn't do his homework better. I hope he brings that up. I just hope he's foolish enough to say something about it. I'll be waiting for him." Whittaker had U.S. House Minority Leader Ii7i _ John Rhodes in Emporia this morning for campaign appearances. Whittaker had confirmed that he had been receiving $1,000 a month from his partner. "That's about the most he could draw from the income, but it applies to the purchase of the practice, which he'll buy from me if I'm elected," Whittaker said in the interview last U week. ~-:-t-~ i" 40""'' I~ "He's paying me $1,000 a month. If I don't win, I'll have to pay him back." Asked if it as eiter ala~~a~ gpen his shar e o m optomnetric 7.; 91 patce, depending upon whether he wins or loses, Whittaker said, "That's right." Com- Christian, hard-working man who would Garrett cited a Federal Election "T i~relcase issued this morning by to Kansas never do anything knowingly in violation of mission opinion given last March cmanis a partisan, Majority Leader Norman Gaar, who zwiiilUe by Don Allagrucci and his the law. Senate a week that an had asked whether he could accept a salary n nto win an election," commented "This is the second time in has demonstrated their from his law firm in Kansas City, Mo., while LLvid1,1'attiews of El Dorado, campaign Lide of Allegrucci's nomination that the people in this district are campaigning for the Reputblican -1111-4 or the Whittaker for Congress belief summer. simple minded and can be led away from the for the U.S. Senate last Garrett said that opinion concluded that by their own merits and real issues of the campaign. -ycannot win very "any unearned income accepted from a tLhey will to stoop to something "Bob Whittaker has continually had a Sthen with the rea partnership is a contribution subject to the positive campaign dealing disclosure District-support of the right- limitations and the reporting and ".h--Lathtat Ithe Kansas Democratic U. S. issues of the 5th Election Cam- to-work legislation, support of capital punish- requirements of the federal .ton~,aformer aide to Martha Keys, was paign Act." a partisan tactic by ment, support of use-value appraisal and c/I-.,.nctcd shows it was citizens Reporters who called the FEC last week Aliogi-acci teami. other farm issues, support of senior tle small business and small ,were told the federal agency would not offer Thec at'lock by Don Allegrucci campaign and support of allegations communities of the 5th District. His support an opinion on the Allegrucci - .~c:GoronGarret is something exactly 5th District on state issues regarding Whittaker unless there was either a :--xcteJ 'frm the Alkegrucci of the people in the Itor ani shows hte will support them on national issues. formral comrplain'. filed or a requesL conduct a opinion. In either event, an FEC spokesman nothing wrong. A "Bob NVThittaker will continue to . in~ttaerhas done campaign, a campaign said, no opinion would be likely ahead of the this effect will be issued this positive and ethical fri' statemnent to desired by the people in the 5th District." Nov. 7 election. aternoon. Bob Whittaker is an honest, "The Federal Election Commiission ra ruled consistently that a loan to a federal candidate for personal expenses constitutes a contribution to the candidate's campaign and is subject to the same rules of reporting disclosure and Uimitations as other contributions," Garrett said- "Since federal law limits contributions to $1,000 per individual, per elclithn. V'Ai Wliittakcir has accel)c a la.eZi,' ;ipjarefltly illeg i cot%41 L l.'. ~ STATEMENT OF GORDON GARRETT, DIRECTOR DON ALLEGRtJCCI FOR CONGRESS COMMITTEE 316-232-1474

EMBARGOED FOR RELEASE UNTIL MONDAY, OCTOBER 23, 1978, 9:30 AM.

As director of the Don Allegrucci for Congress Committee, I

have today sent a telegram to the United States District Attorney

for Kansas requesting that he conduct an immediate investigation

of what appears to be the acceptance of illegal campaign contributions

by Congressional candidate Robert Whittaker.

In the past few days Mr. Whittaker has told reporters that

he has been accepting $1000. per month in unearned income from

an optometric partnership for living expenses, despite having seen

no clients since January 1, 1978. Many questions have arisen as

to Mr. Whittaker's ability to maintain personal expenses and campaign

7 full time for over ten months. His recent statements to reporters

indicate that he has done so by the use of apparent illegal campaign

contributions in violation of Federal campaign finance and reporting

laws.

According to Advisory Opinion 1978-6 issued by the Federal

Election Commission on March 23, 1978, to Norman Gaar, one of the

Republican candidates for the United States Senate (copy of which

is attached as #1), the Federal Election Commission has ruled that

any unearned income accepted from a partnership is a contribution

subject to the limitations and the reporting and disclosure require-

ments of the Federal Election Campaign Act. Paul Reyes, Public

Information Officer of the Federal Election Commission in N- N

Statement of Gordon Garrett, Page Two

Washington, D.C. has stated: "If the material facts are essentially

the same as the Gaar opinion, and they appear to be, the same

decision would be reached" (by the Commission).

Mr. Whittaker has admitted that the money is to be considered

a personal loan to be repaid if he loses the election. The Federal

Election Commission has ruled consistently that a loan to a

federal candidate for personal expenses constitutes a contribution

- to the candidate's campaign and is subject to the same rules of

N reporting, disclosure and limitations as other contributions. (A

copy of the regulations is attached as #2.) Mr. Whittaker has

- further admitted taking the money since January 1, 1978, but

has not reported it. Since federal law limits contributions to

$1,000. per individual per election, Mr. Whittaker has accepted

r7 at least $8000 in apparent illegal contributions from the partner-

ship to pay his personal expenses while campaigning.

The incredible thing about this whole situation is that

several other candidates for federal office, including Kansas

Republican senatorial candidate Norman Gaar, took the time to

research this matter thoroughly and the opinions rendered were

available to all federal candidates. Mr. Whittaker has apparently

chosen to ignore the consistent findings of the Federal Election

Commission. His acceptance of this undisclosed and apparently

illegal money allowed him to campaign full-time for several months

for the Republican nomination for Congress to the disadvantage of

his opponents, many of whom gave up full-time employment and Statement of Gordon Garrett, Page Three

compensation.

Federal law provides that any candidate who knowingly and

willfully receives or fails to report a contribution of $1000. or

more in violation of the provisions of the Federal Election Campaign

Act during any one calendar year shall be fined in an amount up

to $25,000. or imprisoned for one year or both. (A copy of the

statute is attached as *3.)

* We understand the extreme gravity of this situation. We N regret it has not been brought to the public's attention before

now and by some other party. We learned of this matter less than

- ten days ago. Since then, we have spent considerable time and

- effort confirming the reports and studying the matter thoroughly

in an effort to avoid irresponsible and unsubstantiated allegations.

* We believe the law is clear and the people of the 5th District have

a right to know the facts of this apparent abuse of the electoral

process.

In addition to asking the United States District Attorney to

investigate this matter, we will file the necessary papers for a

formal complaint with the Federal Election commission. ~A FEDERAL ELECTION COMMISION ~'2.~*I~~/* 1325 KSTREET N.W ~ WASHINCTON.D.C. 20463

March 23, 1978 AO 1978-6

Norman (3, Gaar 2340 west 51st Street N West-,ood, Kansas 66205 N Deaz Mr. Gaar:

rlhis responds to your reguest dated January 1978, 24, for an advisory op-inion concerning the application oz te Federal E1ection Campaign Act of 1971, (%he as amnende Act"), and Commission regulations to your law fi.s payment to you of compensation during a period in which you are .ca~paigning for the United States Senate.

-orletter'indicates that you are a bond attorney, C71- presently an active partner in a large law firm, and Q-member and M4ajority Leader of the N Kansas Senate, ~You are compensated by the firm, a generalpartnerrship on the basis of an annually set percentage or i~ts net earni-Lgs. Your compensation agreement with the firm allows for your fulfillment of your obligations in 'the State senate, which is in session annually from approximately 163anuary to April. Senate duties require your absence fromnthe law office an average maximum of one day weekly durn the remainder of the year.

While campaigning for the U.S. Senate, you expect tL"o attend to your law practice' activities and duties (e.g., assisting present clientks, accepting and conferring with new clients, performing office work during and after business hours, and assigning work to and conferring with junior attorneys) as you have done in the past "during each regular Senate session." You anticipate as signing to other lawyers work which you, except for -2

Your campaign, would have under'taken yourself, thus you expect less and of Your attorney time to be recorded as client work done by state the firm* Finally, you that-your firm proposes no change of your compensation in the amount during the fiscal year or years of your Senate campaign 0 You inquire of such compensation whether any part constitutes a contribution within the meaning of the Act.

Conmiision regulations define as "Isalary and other earned personal funds income from borna fide employment." 11 CFR 110.10(b) (2). N ~such funds A Candidate's use of for campaign purposes isulmtd though it must be reported. 11 CFR 104.1 et seq. The Com- m.ission ha's taken the position N do not that such personal funds qualify as a contribution to the candidate by his employer to the fide extent that the requisite bona employment relation exists between -~ the candidate and his employer, for purposes genuinely of his independent candidacy, and provided that any paid to the compensation candidate is exclusively in consideration of employment services performed by him. See Advisory Opinion 1977-68, copy enclosed. Accordingly, compensation paid to you firm is not a contribution by your within the meaning of the VAct insofar as it/i--s paid according ClYN to the same compensation scheme followed by you and the t.o the onset firm pri:or of your candidate status. Your letter indicates that your compensation at least from the firm is based partially on the number of hours as client work you record done by the firm. You have also however, that stated, your compensation from the firm will not decrease this year despite a decrease campaign) (due to your in the niumber of hours "recorded work in the on client of fice." Thus it is the opinin of he Commission that to the extent orcmeainfrom th i~m soeu-dre ruc Of hours fl0 te lowerrXMbe youw111111work yor the txn-hjbcause of candiacy,the -amountof compensatio 6our, to att rib u f 'ab if re '"ziuti onto bjthe general your cam~paign partnership. This ontrb[Eutionis subject to the limitations and _the reportn ndS - cro'sure requirementsot tPAt--sea2-fS.C. 441(a); §§434, IL4 2 siallycz llO-lie): contributions by a partnership. The partnership includes, contribution of course, any increase in the firm's head or operating over- costs which are attributable to your campaign. See 11 CFR 100. 4(a)(1) Ci) -3

This response constitute's an advisory opinion * concerning the application of a general rule of law stated in the Act, or prescribed as a.Commission re- gulation, to the specific factual situation set forth in your request, See 2 U.S.c. §437f.

Sincerely yours,

Thomas E. Harris Chairman for the Federal Election Commission Enclosure & - 0 0

35931 - RULES AND REGULAMINS

expenditures, with a view toward bring- whether or not legally enforceable, to to the extent that the cumulative valu' ing about his or her election; or make a contribution. The contract, pro- of those activities by the individual o; (c) If af ter written notification by mise, or agreement shall be reported an behalf of the candidate do not excec, the Commission that any other person a debt owed to the candidate or corn- $500 with respect to an election. For pur is receiving contributions or making ex- mittee until It Is honored. pomes of th.is paragraph a contribution ir penditurcs on the individual's behalf, the (4) A transfer of f unds to a polit- a married individual shall not. be a! individual fails to disavow this activity ical committee or candidate from tributed to a spouse. by letter to the Commission within 30 Itnother political committee, other polit- (5) The sale of any food or beveirr: (lays of receipt of the notification. Ical organization, or other similar by a vendor (whether incorporated (Y source whether or not such orgaiqiza- not) for use in a candidate's caripaigi S14)0.3 (bommistion. tion is a political committee. The trans- at a chargq les than the normal or coni "Comm ission " means the Federal fer occurs whenever the treasurer or Parable commercial charge, if the charr. Election Comlmslion, 1325 K Street, other designated agent of the trmns- for use In a candidate's campaign is ,v NW., Washington. D.C. 20463. feree committee or the candidate ob- least equal to the cost of food or beverapg Con i-ribui ion '\$_-ains control over the funds. to the vendor, and the cumulative vai, 1-00.4 S(5) The payment by any person other of the discounts given by the vendor doe ' (a) "Contribution" means-- tan a candidate or political committee not exceed $500 for an election. (1)A gift, subscription, loan, ad- of compensation for the personal ra"'-v- (6) Any unreimbursed payments for (vance, or deposit of money or anything ioes of another person which are rezi- transportation expenses made by an in of value, made for the purpose of in- cred to a candidate or political com- dividual In volunteering services to fluencing the nomination for election, or #iittee without charge. No compensa- candidate, to the extept that the curnula election, of any person to Federal offce; ion is considered paid to any employee-- tive value of the payments does not ex or for the purpose of influencing thec re- (I (A) Who Is paid on an hourly or coed $500 for an election. Additioznl: '% sults of a primary election, caucus, or Isalaried basis; any unreimbursed payment froin a vol convention held for the selection of dele- (13) Who is expected to perform duties unteer's personal funds for usual an, gates to a national nominating conven- for an employer for a particular number normal living expenses Incident to Nvol tion .)f a polltical party or for the ex- of hours per period; and unteer activity are not contributions. ) pression of a preference for the nomina- (C) Who engages in political activity (7) The payment of the costs of prei, tion of persons for election to the office during what would otherwise be a regu- aration, display, or mnalling or other di: of. President. For purposes of paragraph 11lar work period; tribution Incurred by a State or bcA, N(a), ----- committee of a political party with r, ----TFithe lerm "lan" Includes a if the taken or released time Is made up ,ipect to a printed slate card, sample bil guarantece, endorsemrent, and any other or cbmpleted by that employee within lot, palm card, or other printed listlnri Nform of security where the risk of non - a reasonable period; or of three or more candidates for any pub; payment rests with the surety, guaran- 00i Who Ls paid on a commission or lie omce for which an election is held tor, or endorser as well as with a polit-picwrbasoisadonyfror the State in which the committee is o:, ical comnmittee, candidate, or other pri- actually performed. whose tim6 is con- ganized. Thiis Paragrap~h shall not appi: mary obligor. A loan is a contribution to sidered the employee's own to use as he In the case of cost-s incurred by the corn -the extent that the obligation 'remains or she sees fit and who engages in politi- mittee with respect to the preparatiot outstanding. cal activity during what would otherwise and display of listings made on broa(! (ii) The term "money" includes cur- be normal working hours; or casting stations, or in newvspapers, nrun"I rency of the United States or of any (iii) Where the time used by the em- zincs, and similar types of general iil) __foreign nation, chiecks, money orders, or ployee to engage In political activity Is lic political advertising such as bili!hoard'., any other negotiable Instrument pay- bona fide, although compensable, vaca- posters, and signs. able on demand. tion time or other earned leave time. (8) Any news story, commentary, o (Mi) (A) The term "anything Iof (6) The extension of credit for a length editorial of any broadcasting station. value" includes securitiez, goods, fail Of time beyond normal business or trade newspaper, magazine, or other perioclirra' Itics,. equipment, supplies, personnel, practice, unless the creditor has made a publicatibn unless the facility is ownled o; C advertising, services, membership lists~ commercially reasonable attempt to col- controlled by any political party, politi comm~ronly offered or used commercially, lect the debt (see § 114.10). cal committee, or, candidate, in whicl- or other In-kipd contributions provided (b) The term "contributtion" does not case a news story which (1) represent,,; n without charge (other than volunteer Include~ -- bona fide news account communicated in services under § 100.4 (b) (2) ) or at a (1) Payments made for the purpose of a publication of general circulation or on charge which is below the usual and determining whether an individual a licensed broadcasting facility, and (2' niormal charge for the items. The should become a candidate, such as those Is part of a general pattern of campaif-- amount of a'contribution of a thing of incurred in conducting a poll, If the in- related news accounts which give rea- value is the difference between the usual dividual does not othprwise become a sonably equal coverage to all oppo.-inr and normal charge for the goods or candidate. If the individual otherwise candidates In the circulation or listeningp services at the time of the contribuelon' subsequently becomes a candidate, the area, shall not be a contribution, and the amount charged the candidate payments are contributions, and must be (9) Any payment or political committee. ,reported with the first report filed by the made or obligation (B) For purposes of this section, "candidate or the principal campaign incurred by a corporation or a labor or- committee of the candidate, as appro- ganization which, under the provisions of (1) "Usual and normal charge" fo Part 114, would not constitute an expen- goods means the price of those goods in priate, regardless of the date the pay- diture the market from which they ordinarily,. ments were made. . by the corporation or labor or- would have been purchased at the time( (2) The value of services provided ganization. of teircontibuion without compensation by Individuals who (10) An honorarium, and related ex- 2) "Usual and normal charge" for, volunteer a portion or all of their time penses, within the meaning of § 110.12. any services, other than those provided on behalf of a candidate or political Q11) Legal or accounting services ren - dered to or on behalf of the national corn - by an' unpaid volunteer, means the committee. mittee of a hourly or piecework rate charge for the -, (3) The rental value of an individual's political party (unless the services prevailing at the time the serv- residence used for campaign-related person paying for the services is not t '- regular employer of, the Individual ren- _-ices were rendered. activity. dering the services), other than service' (2) The donation of all or a portion (4) The use of real or personal prop- attributable of the costs of fundraising, such as the erty and the cost of invitations, food, and -to activities which directly cost of a meal as part of a fundraising beverages, voluntarily provided without further the election of a designated can- dinner, charge by an individual, in rendering vol- didate or candidates for Federal office. (3) A written contract, promise, or untary personal services to a candidate For purposes .of this paragraph and agreement such as a signed pledge card, on the individual's residential premises, paragraph 12, a partnership shall be

&MEDRAL REGISTER, VOL 41, NO. 16&-WEDNESDAY, AUGUST 25, 1976 t * lald or incurred for any agents' fees or 1 e ra~ 1~s) ~r ~ a~- ~ pearanee. speech, or article; or ~ ~' ' * (2) honorariums (trot prohibited by p?.ra~rapl1 (1) of this scc- lion) aggregating more than $25,000 in any calendar year. I ub.L. 92-225. Title 111, ~ 328. as added Pub.L. 94-2S3, Title I. I 112 ), May 11, 1976, 90 Stat. 494. V e~l~lntiie liktory. For icrislative his. 1976 U.S.Code Cong. and AdinNews, p. tory and purpose of PuhL. 94-2~.3, see 929.

I (a) Any -~ § 4-!iJ. I .uay ii, 1976. wno ~nowingiy and wits- fully commits a violation of any provision or provisions of this Ac ich invol',es the making, receiving, or reporting of any contribution 4 or expenditure having a value in the aggregate of $1,000 or more during a calendar year shall be fined in an amount which does not ex ceed the greater of $25.000 or 300 percent of the amount of any con lii tribution or expenditure involved in such violation, imprisoned for not fit more than 1 year. or both. In the case of a knowing and willful ~io lation of section 441b(b) (3) of this title, including such a violation of the provisions of such section as applicable through section 441c(b) of this title, of section 441f of this title, or of section 441g of this title, the penalties set forth in this section amount having a value in the aggregateshall apply of $250to a violationor more involvingduring a calendar year. In the case of a knowing and willful violation of section IIlh of this title, the penalties set forth in this section shall apply without regard to whether the making, receiving, or reporting of a contribu - V lion or expenditure of $1,000 or more is involved. (b) A defendant in any criminal action brought for the violation ~t ap rovision of this Act, or of a provision of chapter 95 or chapter 96

of Title 26, may introduce as evidence of his lack of knowledge of or , . . - intent to commit the offense for which the action was brought a con ciliation agreement entered into between the defendant and the Cam mission under section 437g of this title which specifically deals with the act or failure to act constituting such offense and which is still in effect. (C) In any criminal action brought for a violation of a provision of this Act, or of a provision of chapter 95 or chapter 96 of Title 26, th j court before which such action is brought shail take into account, in weighing the seriousness of the offense and in considering the appro- Priateness of the penalty to be imposed if the defendant is found guilty ft I' Whether--.. (1) the specific art or failure to act which constitutes the of- A fense for which the action was brought Is the subject of a con- ciliatlon agreement entered into between the defendant and the Commission under section 437g of this title; 0 (2) the conciliation agreement is in effect; and (3) the defendant is, with respect to the violation involved, I compliance with the conciliation agreement. p Pub.!.. 92-225, Title iii, 1 329, as added Pub.L. 94-283, Title 1, 1 112 (2), May Ii, 1976, 90 Stat. 494. Referfnccq in Text. This.. referrerl Legislative history. For legislative his to in text, niesna the Federal Election tory anol purpose of Pnh.L. ~I-2.S5, see t I Cairrp;ri~n Act uf 19fl, i~uh.L 92-223. 1976 L'.S.Code Cong. rind Admn.News, p For V13'Sifidtifln of tire Act in the Code, 929, '~ce Short 'ELI Ic notes u rider sr-ct tin 431 of thi5 title. § 412. Authority to procure technical support and other services rind incur travel exiwrrscs; paynreilt of such expenses F or the purpose of carrying out his duties under the Fe(Ierai Election Carripairn Act of 971, the Secretary of the Senate Is authorized, fron and after July 1, 1 972, (1) to procure tech trical zu pport rcrvlci-3, ( 2) to rrocurr~ rho re:r;.ouirv or inter hrift&~rrt services of iiiti. id-~.ri t'e~rrri.trur~ (\p'r:~, t em;u~tantc. or or;.rizat~ons tlr.rctrf, in the me ~anrr "il ~ -'C' A-' * .' 'e2!j t~2C., tfl Oi. l\t~C1t ~' Ye * 1. rO !iflL, M_ __

'x's 9- RULES AND REGULATIONS 359-5 deemed to be the regular employer of 6 Federal office In a subsequent election, o1 reludes securitles, goods, facilities, partner, (11) Which Is held for the expressi equip- (12) Legal or accounting services ren- I ment, supplies, personnel, *of a preference for the nomination o: rser-vices, advertising, dered to or on behalf of a candidate oi rpersons membership lists commonly of- for election to the offlce of Pi-esi- fered or used commercially, or other in1- political comtmittec solely for the pur- *dent of the United State-, or pose of ensuring compliance with thL kind contributions provided without (11i) Which Is held to elect delegate.- charge (other than volunteer Act or chapter 95 or .96 of the Interna:I, to a national nominating services Revenue convention. Under I 100.4(b) (2)) or at a charge Code of 1954 (unless the persor k (2) With respect to Individuals seek. paying for the services is not the candi- which is below the usual and normal *Ing Federal office as independent candi. charge for the date, committee, or other regular em- ~dates, or without items, The amnount of the ployer nomination by a maji expenditure of a thing of value is the of the Individual rendering the Partyt (as defined in 26 U.S.C. § 9002(6)) services), but amnounts Paid or incurred difference between the usual and normal 1the primary election is considered to oc- charge for for thecse services shall be reported In ac- *cur, at the the goods or services at the choice of the candidate- time of the expenditure and the amount cordance with Part 104, (I) The day Prescribed by alilllicablc (13) A loan of money by a national or charged for the candidate or committee. State law as the last day to qualify for a For State, bank made in accordance with ap- position purposes of this paragraph, pl~lcable on the general election ballot, or (A) "Usual and normnal banking laws' and regulations, dii) The date of the last major charge" for and in the ordinary course of business, party Foods meanis the price of those goods in primary election, caucus or convention In the market from but these loans (I) shall be reported In that State, or which they ordinarily accordance with Part 104; and (ii) shall (ii) would have been purchased at the time of In the case of non-major parties, their contribution. be considered a loan by each endorser or the dlate of the nomination by that guarantor, in that px'oportion to the un- party. (B) "Usual and normal charge" for paid balance ,Services, other than thor-e provided that each endorser or guar- (c) Runoff election. "Runoff election" by ani antor bears to the total number of en- means unliaid volunteer, means the hourly or the election held after a piecework rate dorsers or guarantors. (1) Primary election, and prescribed charge for the services (14) A gift, subscription, loan, ad- by applicable State Prevailing at the time the services were vance, or deposit law as the means for rendered. of money or anything of -deciding which candtidate(s) shcul,, oe value made to a national committee of a (2) A written contract, promine, or certified as a nominee for the Federal agreement, political party or a State Committee of a offce sought, or whether or not legally *en- political party which is specifically desig- (2) General forceable, to make any expenditure, election, and prescribed by (3) A transfer nated for the purpose of defraying any applicable State law as 'the means for of funds by ua political M7 cosL Incurred with respect to the con- deciding committee toDanother political committee which candidate should be certi- or candidate, A transfer struction, or purchase of any office, facility fled as an offlceholder elect. occurs when- and which is not for the pu-pose of In- ever the treasurer or other designated N (d) Caucus or Convention, A caucus or agent of the luencing the election of any candidate In convention of a political transferee committee or the any Particular party which haS candidate obtains control over the election for Federal offic, .authority to select a nominee Is an f uncis. except that such a transaction shall be election, (4) An independent expenditure, reported Which meets the reqiuirements In accordance with Part 104, (e) Special election, "Special election" of Part 615) A gift, subscription, loan, ad- 109, except that such Independent ex- means an election which Is held to fill a penditure vance, or deposit of money or anything of vacancy In a Federal Is to be reported by the person offce, and which making the expenditure as set forth value maode with respect to tha recount may be a primary, general, or runoff In - ~ of the results of a Federal election, or an election. Part 109. uicotion contest concerning a Federal (b) The term "expenditure" does not election, except when made by an organi- §100.7 Expenditure- Include- -ation subject to the prohibitions of (a) "Expenditure" means- (1) Contrixjutions by an individual S114.2. (1) A purchase, payment, distribution, from personal funds to a political committee or candidate. S100.5 Support. loan, advance, deposit, or gift of money or anything of value, (2) Payments made for the purpose of made for the pur- determining The term "support" means to make pose of Influencing the nomination for whether an individual a contribution of any amount or value election, or election. of any person to should become a candidate, such as those to, or to make an expenditure of any Federal office, or to the Office of Presi- incurred In conducting a poll, if the in- C' amount or value on behalf of, a candi- dential or Vice Presidential dividual does not otherwise subsequently elector; or become date or political committee, but see for the purpose of influencing the result a candidate. If the individual be- N 102.11(c). of a primary election, caucus comes a candidate, the pa6yments are ex- or conven- penditures, and must §100.6 Election. tion held for the selection of delegates be reported with for a national nominating the first report filed by the candidate or convention of the principal "l0hrction" means the process by which a political party or for the expression of campaign committee of thle ind~lvidualfi, whether opposed or unop- a preference candidate, as appropriate, regardless ofl for the nomination of per- the posed, seek nomination for election, or sons for election to the office of President, date the payments were made, clection, to Federal offce, Specific types For purposes of paragraph (1) - (3) Any news story, commentary, or of clections, defined below, are included (1) editorial of any broaidcsting staition, The term "payment" newspaper, In this dollnitlon. (A) Includes payment of any interest' magazine, or other pulbli- (a) Gencral election. "General elec- on an obligation; and cation, unless the factity is ownedj or tioni" means- (1B) Includes controlled by any Politic4Ii party, po~liti- a guarantee or endorse- cal committee (1) An elec' on held i even numbered ment by a candidate or a political conm- or candidate, in which, years3 on the Tuesday next after the flrst case a news story which (i) repre!aens a rnitee of a loan;: bona Mlonday In November, or (C) Does not include the repayment f~de news account coinnun ica ted (2) An election which Is held to fIll a of the principal in, a publication of general circulation vacancy of an outstanding ob- or on a licensed in a Federal offce (special elec- ligation, the proceeds of which consti- broadcasting facility, tion) and which is intended to result in tuted a contribution and (hi) is part of a general pattern of the under these regula- campaign-related fInal selection of a single individual tions, except that the repayment shall news accountis which to the office at stake, be reported, give reasonably equal coverage to all op- posing candidates in the circulation or 'b) Primnary election. (1) "Primary i) The term "money" Includes election" means an election- cur- listening area, shall not be an expendi- rency of the United States or of any for- ture. (i) Which I~sheld prior to a general eign nation, checks, money orders, or any (4) Nonpartisan election, as a direct result of which other negotiable Instrument payable on activity designed to candidates are nominated, in accordance demand. encourage individuals to register to vote with applicable State law, for election to or to vote. For purposes of this section, (Iii) The term "anything of value" In- nonpartisn activity means that no ef-

FEDERAL REGISTER, VOL. 41, NO. 166-WEDNESDAY, AUGUST 25, 1976 Pittsburg, Kansas 66762

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[vat Federal Election Commission 1325 K Street, N.W. Washington, D.C. 20463

1.-ATTN: Office of General counsel 77L

I LL)LRAI LU10C ION COMIMISSIUN Id 1325 K(S1 R IT N.W WASHING 1ON.D.C. 20464

THIS IS THE BEGI[1'NI'.-G OF MUR ffdl 8~64

Date Filmed / /4/7? Camera No. -- 2 I~v~

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*1*~~ Cameraman A