FEDERAL ELECTION COMMISSION

September 1992 999E Street NW Washington DC 20463 Volume 18, Number 9 most nonfederal campaigns are subject to less stringent recordkeeping and reporting requirements than those imposed under federal law~ their accounts may contain a constantly varying mixture of permissible TRANSFERS F1U'l ~ERAL CAMPAIGNS and ill'lpEirmissible funds; and their fund­ PIOIIBI'l'ED AFl'ER 1992 ELECTICfiS raising expenses are often paid for with On August 6, 1992, the Conunission multiple disbursements over the course of approved a final rule that prohibits several days. Consequently, the draft transfers of funds and assets from a (continued) candidate's nonfederal campaign to his or her federal campaign. This rule will not - become effective, however, until after the TABLE OF

Federal Election Cc:mInission, 999 E street, Nf, washin¢on, DC 20463 800/424-9530 202;119-3420 202/219-3336 (TOO)

Joan D. Aikens, Chairman walter J. Stewart, Secretary of the Senate, Scott E.. 'lbomas, Vice Chairman Ex Officio Commissioner Lee Atm Elliott Donn8ld It. Anderson, Clerk of the House of Danny L.. McDonald Representatives, Ex Officio Commissioner John Warren MeGany Trevor Potter

2 September 1992 FEDERAL ELECTION COMMISSION Volume 18, Number9

MN 00 USE OF CANDIMTE 1W'IES IN Notice of Proposed Rulemakiog SPECIAL PROJECT TITLES In response to these concerns, the The commission recently approved a agency sought "comments on proposed regula~ revised regulation that prohibits tions that would have: (1) required an unauthorized political co~tteesll from unauthorized committee to use a more info~­ using candidate names in the titles of mative disclaimer for a special fundraising special projects and other communications. project using a candidate's name in the Note that this rule will not become effec­ title; and (2) required that checks given tive until after the i992 election cycle. in response to the solicitation be made The Federal Election Campaign Act and payable to the unauthorized comni ttee's FEC regulations prohibit an unauthorized registered name. (See 57 Fa 13056, April commi. ttee from including the name of a 15, 1992.) Neither of these proposals were candidate in its own "name." 2 U.S.C. included in the final rule. §432(e)(4)i 11 CrR l02.14(a). The revised rule at 11 CPR 102.14(al defines "name" to Commission Decision include "any name under which a committee Rather, the final rule bans the use of conducts activities, such as solicitations candidate names in the titles of all or other communications, including a communications by unauthorized committees. special project name or other designation." The agency views thts approach as more The revised regulation and its EXplana­ responsive to the problems at issue and tion and Justification were published in easier to monitor and enforce than the the Federal Register on July 16, 1992 (52 restrictions in the proposed rules. FR 31424). After the rule has been before While comments from unauthorized com­ Congress fa' 30 legislative days, the mittees opposed tightening the rules on the Commdssion will announce the effective use of candidate names, the record supports date. 2 U.S.C. §438(d). The agency plans the Commission's decision. For exarople, a to set an effective date of November 4, comment feom a Presidential campaign stated 1992 (the day afte~ the general election). that an unauthorized project raised over $10 million despite the candidate'S dis­ Background avowal of the activities. A recent televi­ The Comadssion had previously inter­ sion documentary (now placed on the rule­ preted section 432(e)(4) as applying only making record) reported that a political to a committee's registered name on its action comndttee raised $9 million in Statement of organization and had thus numerous projects whose titles included permitted an unauthorized comrrdttee to candidates' names; none of the funds went solicit contributions for itself under a to the named candidates. Proqram investi­ special project name that included the name gators found that elderly people wer-e of a candidate (e.g. "Americans for Doe"). particularly vulnerable to being misled In Common Cause v. FEC, 842 F.2d 436 into believing they were contributing to (D.C. Cir. 1988), the court of appeals the candidates named in the titles. upheld the commission's authority to inter­ pret section 432(e)(4) in this fashion, Proposed Revision to Disclaimer Rule recognizing, however, that a more extensive Postponed ban on the use of a candidate's name would The Commission decided to reserve also be a reasonable interpretation. action on another change that had been The Conuuon cause decision grew out of included in this rulemaking. The change the 1980 Presidential election. In recent would have amended the disclaimer require­ years, however, unauthorized commdttees ment for solicitations by unauthorized have increasingly adopted the practice of committees at 11 CFR 110.11(a)(1)(iv)(A) to using a candidate's name in the title of a confonm with 2 u.s.C. §441d(a)(3). The special project. Such projects have the proposed rule would have required an potential for: confusing the public and unauthorized commdttee, when soliciting diverting funds away from the named candi­ funds for itself through public advertis­ dates. candidates have objected to the use ing, to state in the disclaimer not only of their names in special projects when who paid for the communication (as required they shared none of the fundraising pro­ in the current rule) but also whether the ceeds or disagreed with the views expressed communication had been authorized by any in the cOlllll1U!lication. candidate. The agency now plans to con­ sider this change in a future ru1emaking specifically on disclaimer requirements. lunauthorized political comndttees are commdttees not authorized by a candidate, (Regulations continued) such as party committees or PACs.

3 September 1992 FEDERAL ELECTION COMMISSION Volume 18, Number 9

FINN. RmlLM'ICNS QlIl.tlLD'WUNG PETITICfi PROCI!nJRES The Commission recently approved final rules that explain procedures for filing petitions for rulemaking for the agency's consideration. Closely based on the CLIN'ltN AND BUSH FAaI RECEIVE $55 MILLICfi aqency's previous procedures, the new IN PUBLIC Ft.N>S regulations provide the public with easy The FEC recently approved public access to the information. funding grants for the Democratic and Found in newly created 11 CFR Part 200, Republican Presidential tickets. on July the new rules: 17, the agency certified a $55.24 million o Describe what information is required in payment to the campaign of the Democratic a rulemaking petition; Presidential nominee. GOvernor Bill o Explain the steps the agency takes in Clinton, and his Vice Presidential running respondinq to a petition; mate, Senator . The same amount was o List the factors the Comission may certified on August 21 to the Republican consider in decidinq whether to initiate ticket, president George Bush and Vice a rulemaking; President . The U.S. Treasury o Provide for the reconsideration of paid the funds shortly after the certifica­ petitions that are denied; and tions. o Define the adrninistrative record (L,e •, To establish their eligibility for the the documents upon which the agency will general election grants, the candidates base its decision on the petition) for submdtted letters of agreements and purposes of judicial review. certifications in which they agreed to In a change from the proposed rule, the comply with the law and submit to certain final rule provides that the Commission conditions, including a post-campaign will publish a Notice of Disposition in the audit. Federal Register only if it denies a Under the Presidential Election rulemaking petition. since that will be the Campaign Fund Act. the Democratic and only opportunity to explain its decision. Republican nominees are each entitled to a When the agency decides to initiate a $20 million public funding grant as rulemaking, its reasoning will be stated in increased by the cost-of-living adjustment other rolemaking documents. (COLA). The 1991 COLA was 2.762, thus The final rules were published in the increasing the base grant to $55.24 Federal Register on August 5, 1992 (57 FR million. Each major party nominee has 34508}. A "statement of Basis and Purpose" received general election funds since the accompanies the rules, as required by the first pubJicly funded Presidential election Administrative Procedures Act, which in 1976. governs these regulations. The new rules Major party nominees must agree to became effective on September- 4, 1992. limit campaign spending to the amount of the public funding grant, although they may spend up to $50,000 from their personal funds. These limits are shared by their Vice Presidential running mates. Althou

4 September 1992 FEDERAL ELECTION COMMISSION Volume 18, Number 9

AOOUST MA'l'CHIm FUND PAYMml'S F1Nl\L REPAmlWl'S: 1988 ~ AND On July 30, the Commission certified a BUSlI-OlA'YLE CAMPAIGiS total of $2.8 million in matching fund During June, the Commission issued payments to 1992 presidential primary final repayment determinations with respect candidates. The u.s. Treasury made the to two 1988 Presid~ntial campaigns: the payments early in August. As of the August for President Committee, Inc., payment, primary candidates had received and Bush-Quayle '88. Under mc rules, cam­ over $34 million in matching funds, as paigns have 30 days from their receipt of shown in the table. Candidates have the final repayment determination to repay requested $2.7 million for the September the funds to the u.s. Treasury. In payment. accordance with FEe regulations, the Com­ After a candidate's date of ineligi­ mission, on August 6, 1992, granted the bility, the candidate may still receive Kemp Committee's request for a 90-<1ay matching funds to wind down the prirPary extension of the repayment deadline to give campaign and to retire debts incurred the Committee time to raise the necessary before that date. Several Democratic funds ..3:/ candidates became ineligible when they publicly withdrew from the race.1/ The Jack Kemp for President CoIIInittee, Inc. remaining Democratic candidates 1Agran, In its final determination, the Commis­ Brown and Clinton) became ineligible on sion ordered the Kemp Committee to repay July 15, when the Democratic Party nomin­ $103,555 in public funds. The Committee ated Governor Clinton. The Republican had received $5.985 million in matching candidates likewise became ineligible when funds for the 1988 primary election. the Party nominated President Bush on The final repayment consisted of: August 19. became ineligible o $54,253.13, the pro rata portion of on August 20. $169,805 in expenditures that exceeded the and spending lindts:2/ and August Cumulative o $49,302-in stale-dated committee checks candidate payment Total never cashed by the recipients.

Republicans Bush-Quayle ' 88 Patrick Buchanan $ 304,744 $ 3,612,696 Under the terms of the final repayment George Bush 546,097 9,502,153 determination, the Bush-Quayle Committee was ordered to repay $115,142 to the Democrats Treasu~. The repayment represented 19,934 269,692 $18,733 spent by the Committee in oon­ 171,136 4,239,405 qualified campaign expenses; $95,909 in 1,431,599 7,924,627 excessive travel reimbursements received 28,498 1,913,413 from media fioms; and a $500 stale-<1ated Bob I

lFor the same reason, the Commission also granted a 90-day repayment extension to the Gephardt for President Committee, Inc., on August 6. 2A ratio formula is used to calculate what portion of the excessive expenditures 1covernor Wilder withdrew on January 8, represented the payment of public funds as senator Kerrey on March 6. Senator Harkin opposed to private contributions. That on March 9 and former Senator Tsongas on amount--the pro rata portion--is subject to March 19. repayment.

5 September 1992 FEDERAL ELECTION COMMISSION Volume 18, Number9

machine. The fax numbers for the Clerk of the House and secretary of the Senate are: o Clerk of the House: 202;225-7761 a Secretary of the Senate: 202/224-1851 . . Other statements and reports may not, REPORTS OOB IN

REP()R"I'JN; Ili\TES, OC'IOOER 1992 - JANlIARY 1993

Report!/ Close of Books Reg./Cert. Mail Date~/ Filing Date~/ october Quarterly September 30 October 15 OCtober 15 October Monthly September 30 October 20 OCtober 20 Pre-General October 14 October 19 October 22 November Monthly OCtober 31 November 20 November 20 Post-Gener:al November 23 December 3 December 3 December Monthly November 30 December 20 December 20 Year-End December 31 January 31, 1993 January 31, 1993 luse the chart, opposite page, to find out which reports your committee must file.

2Reports sent by registered or certified mail must be postmarked by the mailing date. Reports sent by other means must be received by the filing date. Note that the registered/ certified mail date for the pre-general report is three days before the filing date.

6 September 1992 FEDERAL ElECTION COMMISSION Volume 18, Number 9

QJIDE TO REPOR'I'IN3, 0C'lmER 1992 - Jl\NUl\RY 1993

Required RepOrts ()Jar- Type of Filer terly Monthly Pre-General Post-General Year-End

Bouse and senate campaigns -I -/ r ./ of 1992 Candidates required if candidate runs in election, even if unopposed~1 other House and senate I campai

1992 presidential campaigns .f I" I I Witil Activity of $100,000 filed in lieu of November and or Above December monthly reports if candidate runs in election

1992 Presidential campaigns -/ I .f I With Activity Less Than required only if candidate runs $100,000 in election :Previous Presidential .f or ~/ ~ campaigns

PACs and party Coaai.ttees .f .f .f .f Filing Monthly filed in lieu of November and December monthly reports

PACs and Pa1"ty coomittees .f .f 1'il1ng ()1arterly required'" only if required committee makes regardless'" contributions or of activity expenditures in connection with election during pre-general reporting period corporataons and Labor I' -/ I Organizations (Reports on Partisan Coamunications).!1

(Reports continued)

lReports and 48-hour notices are required even if the candidate is unopposed or if the general is not held because the candidate received a majority of votes in the previous election.

2campaiqns of House and Senate candidates who sought election in a previous year or who are seeking election in a future year file on a semiannual basis in 1992. The next semdannual report is the 1992 year-end report, due January 31, 1993; it will cover activity from July through December 1992. 3These campaigns may file on either a monthly or quarterly basis. If they decide to change their filing frequency during 1992, they should notify the Commission in writing.

4These reports, filed on FEe Forn. 7, are required if the organization's aggregate costs exceed $2,000 for internal communications expressly advocating the election or defeat of a clearly identified candidate. See 11 CFR 104.6 and page 44 of the 1992 Campaign Guide for Corporations and Labor organizations.

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September 1992 FEDERAL ELECTION COMMISSION Volume 18, Number 9

FLORIM mmn' MTE CHAl«Z> The date of the Florida ~unoff has been changed from September 29 to October 1. '1l1e pre-election reporting dates that appeared in the January AD'lIseJ« OPINI~ RIQJESl'S issue have therefore been changed. Recent requests for advisory opinions The revised dates are shown below. (MRS) are listed below. The full text of each AOR is available for review and com­ Florida Runoff, OCtober 1 ment in the FEC's Public Records Office. Close of Reg./Cert. Filinq POR 1992-30 Books Mailing Date.!/ Date!/ Status of political organization as national party committee. (Requested by sept. 11 sept. 16 Sept. 19 of the united states of America; Date Made Public: August 5; 1992; 1Reports sent by registered or Length: 7 pages plus attachments) certified mail must be postmarked by the mailing date; otherwise, they must 1\DR 1992-31 be received by the filing date. Campaign donation to public housing resi­ dents council. (Requested by Michael A. Andrews for Congress Commi ttee; Date Made Public: August 10, 1992; Length: 2 pages)

.NJR 1992-32 Filing requirements of Vice Presidential candidate on independent ticket. (Request­ ed by LaRouche for President - Independents for Economic Recovery; Date Made Public: MIDYFAR PAC WJNT August 10, 1992; Length: 3 pages) By July 1, 1992, the number of PACs registered with the FEe had grown to 4,125, 1lOR 1992-33 an increase of 31 PACs since the count was Treatment of goods and services donated by taken six months ago. prohibited sources in connection with Please note, however, that the number shared federal and nonfederal activities. of PACS does not necessarily correlate with (Requested by the Democratic and Republican financial activity. Many PACs have little National Committees; Date Made Public: or no activity. For example, according to August 14, 1992; Length: 3 pages) their reports, 45 percent of all PACs did not make any contributions to candidates .NJR 1992-34 from January 1, 1991; through March 31, Use by federal candidate/state governor of 1992•. state-provided car. (Requested by Castle For statistics on semiannual PAC counts for Congress Fund; Date Made Public: taken sinee 1975, order the press release August 14, 1992; Length: 3 pages) of July 23, 1992; call 800/424-9530 (ask for Public Records) or 202;219-4140. ALTERNl\TE DISPOSITlm OF MRs

Nt.mlber Gail'V'LOss .Nm. 1992-13: Loans to Law Firm of Attorney of PACs Since Considering candidacy PAC category 7/1/92 12/31/91 Requested by James M. Blackbum. By letter dated July If 1992; this AOR was closed Corporate 1,731 -7 without issuance of an opinion because of Nonconnected 1,091 +8 incomplete facts. Trade/Membership/ Health 759 +17 NJR 1992-26: Free or Reduced-Rate campaign. Labor 344 +6 Ad Time Offered by Corporate Corporations Broadcaster to candidates Wi thout stock 144 +8 Requested on behalf of EZ Communications, Cooperatives 56 -1 Inc. On August 13, 1992, the COlmli.ssion failed to approve an advisory opinion by Total 4,125 +31 the required four votes. See Agenda Documents #92-107 and i92-107-A. a September 1992 FEDERAL ELECTION COrvlMISSION Volume 18,Number9

ADVISORY OPINlOO SUMMMUES 1'0 1992-25; utah Convention as separate Election NJ 1992-19: state campaign's Lease of The Owens for Senate Committee, the Canputers to candidate's campaign committee of Congressman Wayne Federal Campai90 owens, has a separate contribution limit Mike Kreidler's state campaign committee for the utah party convention because, may lease two computers to his federal cam­ under state law, the convention has author­ paign committee (Mike Kreidler for Congress ity to select the nominee. Commi ttee) without making a contribution to Federal campaign law defines "electionu the federal committee assuming the rental: to include a general election, a primary (1) reflects the usual and normal charge election and Ita convention or caucus of a and (2) conforms to standard business political party wich has the authority to practices. nominate a candidate." 2 U.S.C. §43l(1)(A) These two factors have been the focus and (B); 11 CFR 100.2(b), (e) and (e). of past advisory opinions on transactions Past advisory opinions have looked to state between a state committee and a federal law to determine whether a convention or committee. If a state commdttee provides caucus has authority to nominate. ADs 1986­ goods or services at less than the usual 17, 1984-16 and 1978-30. charge (i.e., at less than the current Under Utah law, the delegates at the market rate), it makes a contribution to party convention vote for the u.s, Senate the federal committee--a possibly unlawful nominee. The two highest vote getters then contribution if state law permits the state face off in a primary. If, however, a comIllittee to accept funds that would be candidate receives 70 percent or more of prohibited under federal law. 11 CFR the convention votes, he or she becomes the lOO.7(a)(1)(iii); hOs 1989-4, 1980-38 and party's nominee, and the primary is not 1978-67. held. Therefore, since 'the convention has Mr. Kreidler's state committee account the authority to nominate a candidate I it contained primarily prohibited funds when is considered an election, with a separate it purchased the computers, since it had contribution limit. see AOs 1986-21 and already transferred its permissible funds 1918-30, both addressing the utah 70­ to the federal co~ttee. The state percent rule. committee now rents the equipment to the Mr. Owens was one of the top two vote federal committee at $200 a month, although getters at the June 13 convention (he the COmnUttee has determined that a fee of ~eceived 69.7 percent of the delegates' $100 a month is reasonable given the pre­ votes) and will be a candidate in the vailing rates in Olympia, Washington. September 8 primary. His committee there­ ASsuming that this rate reflects the fore has separate contribution limits for usual and normal charge,ll the rental will the convention and for the primary. Should not result in a contribution to Mr. Kreid­ he win the primary, his conunittee will also let's federal comnittee. This conclusion have a separate contribution limit for the is based on the further assumption that the general election, thus enabling an individ­ leasing agreement confooms to standard ual to make three $1,000 contributions to business practices and includes standard the eonunittee. The Commission, however, auxiliary charges (e.g., a security reminded the committee that it must comply deposit, if customary). See AD 1992-12. wi th the rules on the application of the The federal conunittee must itemize its contdbution limits, per election, and the rental payments as operating expenditures. designation of contributions. See 11 eFR The tax ramifications and the possible 110.1 and 110.2. application of washington State law to the (Date Issued: July 10, 19921 Length: described activity are outside the Commi­ 2 pages) ssion's jurisdiction. (Date Issued; July 10. 1992; Length; 4 pages) , 1The Commdssion expressed no opinion on the validity of the fair market value deter­ mined by the committee.

9 September 1992 FEDERAL ELECTION COMMISSION Volume 18, Number9

Exception: UnreiJDbursed Travel and SUbsistence The exceptions described below apply only to an individual's payments for his or her own travel or subsistence. ~ BY STAFF: CDfi'RIBUTICN LUITTS .I\ND REPORTI:N; Individual's Travel. An individual may Sometimes committee staff, volunteers spend up to $1,000 per election for his or and candidates use their personal funds or her own travel on behalf of a candidate and credit cards to pay for committee expenses. $2,000 per year for his or her own tcavel These payments are generally considered in­ on behalf of a party commi. ttee without kind contributions, subject to the contri­ making a contribution. 11 eFR 100.7(b)(B). bution limits, even when the individual Payments that exceed these limits are expects to be reimbursed by the commi t­ consid~red in-kind contributions--unless tee.l/ Littdted exceptions to this rule are they ace reimbursed by the committee within explained in this article. certain time periods (see below). NOTE: U.S. House and Senate employees This travel exemption applies to paid are reminded of 18 U.S.C. §603, which campaign workers, volunteers and the prohibits contributions by a Congressional candidate. employee to his or her employing Member. Volmteer'.s Subsistence. A second General Rule exception applies only to volunteers. They The general rule is that an in-kind may spend unlimited amounts for their own contribution results when an individual. meals and lodging when these expenses are uses his or her personal funds or credit incidental to volunteer activity. The card to pay for goods or services on behalf payments are not considered contributions. of a political committee. 11 CFR 116.5(b). 11 CFR 100.7(b)(S). (Limited exceptions to this general rule apply only when individuals traveling on Exception: Reimtursed Travel and behalf of a candidate or pclitical party SUbsistence pay for their own travel and subsistence If an individual pays for his or her expenses, as explained in the next own transportation and subsistence expenses section. ) (using personal funds or a credit card) FOI example, an in-kind contribution while traveling on behalf of a candidate or . results when an individual pays for the party committee--and the expenses are not transportation or subsistence expenses of covered under the above exceptions-the others or pays for: nontravel expenses such payments are not considered in-kind as meeting rooms, office supplies or c~ contributions if the committee reimburses paign materials. 11 CPR lOO.7(a}(I}. In the individual within cectain time periods: these cases, the in-kind contribution o In the case of a credit card payment, (combined with previous contributions made within 60 days of the closing date on the by the same individual) may not exceed the billing statement where the charges first individual's contribution limit for the appear. conuni ttee.2/ o In all other cases, within 30 days after Any reImbursements the committee makes the expenses are incurred. 11 eFR to the individual reduce the amount of the 116.S(b) . contribution; when fUlly reimbursed, the If full reimbursement is not made individual's advance no longer counts as a within these time limits, the unpaid amount contribution. becomes an in-kind contribution and may have to be reported as both a contribution and a debt, as explained below. IThis article does not apply to payments made by individuals acting as commercial Reporting Mvances and Reimbursements3/ vendors. See 11 CFR 116.3 and 116.4. The term "advance" is used in this article to mean an individual's payment for 2Contributions from the personal funds of a commi t tee expense when the payment House and Senate candidates to their own results in an in-kind contribution which campaigns are not subject to the contribu­ the committee intends to reimburse. tion ~imits. 11 CFR lI0.10(a). Publicly funded presidential candidates, by con­ trast, are subject to a $50,000 limit on campaign spending from personal funds. 11 3The ceportin9 information in this article eFR 9003.2(c) and 9035.2. is based on Advisory Opinion 1992-1.

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September 1992 FEDERAL ELECTION COMMISSION Volume 18, Number 9

Full JleilltJursement Made Within same Reporting Period. If the committee reimburses an advance, in full, within the same reporting period in which the advance was made, the advance is not reportabl.e, (Nevertheless, the advance-combined with FEe v, ELtJREOOE FOR aN:iRESS CDIMI'1'TEE other contributions made by the individ­ on July 7, 1992, the u.s. District ual-may not exceed the contribution Court for the District of New Hampshire, limdts.) The reimbursement of the advance based on a stipulation submitted by the is repor-table as an operating expendi ture parties, ruled that the Eldredge for and subject to the itemization rules at Congress Committee and Faith D. Eldredge, 11 CFR l04.3(b)(3){i} and (4)(i). as treasurer, violated the Federal Election Campaign Act by failing to file a timely Full Reimbursement Not Made Within same 1984 quarterly report. As agreed by the Reporting' Period. When an advance (com­ parties, the court ordered defendants to bined with other contributions made during pay a $500 civil penalty and permanently the calendar year) exceeds $200 and remains enjoined them from future violations of the unreimbursed at the end of the reporting reporting laws. (Civil Action No. period, the committee must itemize the CBS-655-D. ) advance as a memo entry on a Schedule A used for "Contributions from Individuals." (As a memo entry, the amount is not FEe v ; INTEBNATICNl\L FUNDDl3 INSTI'l'OTE included in the total figure.) The entry On July 10, 1992, the u.s. Court of should specify the amount as an advance. Appeals for the District of Columbia Unlike other in-kind contributions, Circuit, sitting en bane, upheld the advances are not simultaneously itemi~ed as constitutionality of 2 U.S.C. §43B(a)(4). operating expenditures on Schedule B. once (Civil Action No. 91-5013.) That provision the committee reimburses the individual, of the Federal Election Campaign Act (the however, it must itemize the reimbursement Act) prohibits anyone from using, for as an operating expenditure on Schedule B. solicitation or comroetcial purposes, the The "purpose of disbursement" box should information on individual contributors specify the amount as a reimbursement and listed in political c~ttee reports filed should indicate the nature of the advance wi th the FEC. (e.g., "reimbursement for postage"). Additionally, the entry should be cross Background referenced to the corresponding memo entry According to the findings of fact in on Schedule A, noting the particular report· this case, International Fundin9 Institute where the mewo entry appeared. (IF!), through Robert E. Dolan, its sale If the individual's unreimbursed stockholder and director, subscribed to an advance and other contributions do not on-line data base service provided by exceed $200, the advance does not have to Legi-Tech, Inc. (an ami CDS curiae in this be itemized and, in fact, is not reportable action) . The data base contained informa­ as a contribution. (The unreimbursed tion on individual contributors compiled amount, however, may have to be reported as from FEC repotts. IF! developed the a debt; see below.) The ceimbursement, contributor data into a mailing list, which when made, is reportable as an operating it marketed through a broker. The broker, expenditure, in turn, rented the list to about five customers, including American Citizens for iilhen Advance Becomes a Reportable Debt. Political Action, Inc. (ACPA), a political In addition to any reporting that may be committee. (Mr. Dolan is also chairman and required under the above paragraphs, the treasurer of ACPA.) ACPA used the list for committee must itemize an advance as a debt several mailings, each soliciting about on Schedule D if: 5,000 individuals. o Full reimbursement was not made wi thin In an internal enforcement matter, the the same reporting perrod, and 60 days FEe found probable cause to believe that have elapsed since the advance was made: 1FI, ACPA and Mr. Dolan, as ACPA treasurer, oc" knowingly and willfully violated section o The advance exceeded $500 and was not 438(a)(4). Unable to reach a conciliation reimbursed within the same reporting agreement with respondents, the agency period. See 11 CPR l04.11(b). filed suit against them in the u.s. Dis­ trict Court for the District of Columbia. (Civil Action No. 90-1623.) (continued)

11 September 1992 FEDERAL ELECTION COMMISSION Volume 18, Number9

Defendants asked the district court to but the court did not find it necessary to dismiss the case, arguing that §438(a)(4) reach that argument.) violated the rirst Amendment of the Consti­ Defendants claimed that a political tution, both on its face and as applied to committee has no property rights in its their conduct. The FEC moved to certify contributor list because a list of names the constitutional question to the court of and addresses is not sufficiently original appeals. The district court granted the to warrant copyright protection. The FEC's motion. court, however, observed that "Congress may recognize an intellectual property inter­ Court of ~s Opinion est, narrower than copyright, that is not subject to the constitutional requirement Level of SCrutiny. The court first of originality." examined what level of scrutiny it should The court rejected defendants alterna­ apply to determine whether the use restric­ tive argument that S438{a)(4) is inconsis­ tion of §438(a)(4) was constitutional. tent with the First Amendment because it Noting some apparent conflicts in levels of creates "a property interest in the politi­ scrutiny applied by the supreme Court in cal sympathies of another." Instead, the similar cases, the court to assumed "-but did court said, the use provision "narrowly not decide-that §43S(a)(4) was subject to protects the value of the list itself in a intermediate scrutiny. particular use; it does not prevent one Quoting Seattle Times Co. v. Rhinehart, from soliciting a person who is on a 467 u.s. 20, 32 (1984), the court explained committee' 5 contributor list, so long as the Supreme Court's criteria for inte~di­ one does not obtain that person's narne ate scrutiny: it "require[ 51 only that the (directly or indirectly) from a list filed restriction further 'an important or sub­ with the FEe." stantial governmental interest unrelated to the suppression of expression' and [that Conclusion. The court held that, under it) be 'no greater than is necessary or an intermediate level of scrutiny, section essential to the protection of the particu­ 438(a)(4) is constitutional as applied to lar governmental interest involved.'" the defendants' conduct because it "ad­ vances an important governmental interest" Governmental Interest. The FEe argued, (prese~ing the value of a political inter alia, that §438(a)(4) was narrowly committee' 5 contributor list) and "i.s no tailored to further an important govern­ broader than is necessary to that task. II mental interest, that of protecting the The court rejected defendants' second value of a political corrmittee's claim, that §438(a)(4) was unconstitutional contributor list. The FEe further argued on its face. Quoting Members of the City that this protection, in turn, preserves oouncil of Los Angeles v. Taxeayers for political discourse. vincent, 466 u.s. 789, 798 (1984), the The court agreed: 'IWithout the use court said that a facial challenge can restriction of i438(a)(4), innumerable succeed "only if the statute may 'never be entcepreneurs would, like the defendants applied in a valid manner' or is 'written here, be able freely to appropriate to so broadly that [itl may inhibit the themselves part of the value of the constitutionally protected speech of third contributor lists compiled by reporting parties. r " The defendants, the court said, political commi t tees. As a result, such failed to make such an argument. commdttees would have less incentive to The court remanded the case to the compile the lists in the first place. In district court for proceedings consistent other words, if the return on their invest­ with its holding but, in cesponse to an ment in solicitation would be reduced by unopposed motion by defendants, stayed. its others using the resulting lists, political mandate through October 9, 1992. Defend­ commdttees would not find it worthwhile to ants plan to seek the Supreme Court review solicit as much as they now doi they would of the court of appeals decision, and raise less money, spend less money, and october 8 is the deadline for filing the correspondingly underwrite less political petition. discourse•••• [T]he use restriction protects political discourse from the adverse effect that the disclosure requirement of the Act would otherwise have." (The FEe also argued, based on legisla­ tive history, that §438(a)(4) furthers the governmental interest in- protecting contributors from unwanted solicitations,

12 september 1992 FEDERAL ELECTION COMMISSION Volume 18, Number 9

MURS RELEASED ro mE PUBLIC FEDERAL RmISTER mI'ICES Listed below are MURs (FSC enforcement Copies 9f Federal Register notices cases) recently released for public review. are available from the Public Records The list is based on the FEe press releases Office. of July 15, 23 and 24, 1992. Files on closed MURs are available for review in the 1992-11 Public Records Office. 11 CFR Parts 109, 110 and 114: unless otherwise noted, civil penalties Independent Expenditures, Corporate resulted from conciliation agreements and Labor Organization Expenditures; reached between the respondents and the Notice of Proposed Rulemaking (57 FR Commission. 33548, July 29, 1992) MUR 2804 1/ 1992-12 Respondent: American Israel Public Affairs 11 en Part 200: Administrative Regu­ committee (IX:) lations (Rulemaking petitions); Final complainants: Paul Findley, James E. Rule (57 FR 34508, August 5, 1992) Akins, George Ball, Richat=d CUrtiss, Robert Hanks, Andrew 1. Killgore, Orin Parker 1992-13 SUbject: (l) Corporate contributions; 11 CFR part 110: Transfers of Funds (2) failure to register and report from State to Federal Campaigns; Final Disposition: (1) probable cause to believe Rule; Transmittal to Congress (57 FR but took no further action; (2) no probable 36344, August 12, 1992) cause to believe 1992-14 MOR.2934 11 eFR Part 110: Transfers of Funds Respondents: (a) Nevada state Republican Between Federal Campaign Committees; Central committee, Bob Beers, treasurer; Notice of Proposed Rulemaking (57 FR (b) Boomtown, Inc., Robert A. Cashell (NV) 36023, August 12, 1992) Complainant: FEe initiated SUbject: Excessive contdbutions and coordinated party expenditures Disposition: (a) and (b) Reason to believe but took no further action

MUR 3177 Respondents; (a) National Libet"tarian Committee, William Redpath, treasurer (DC); (b) The Invisible Hand Foundation, succes­ FEe PUBLISHES NalFILKRS sor to LPWS Convention Services Group (WA); The Commission recently cited the co~ et al. (c)-(1) mittees of the candidates listed below for complainant: Alan Lindsay (TX) failing to file reports. The names of Subject: Failure to register and report; authorized committees that fail to file corporate contributions reports are published pursuant to 2 U.S.C. Disposition: (a) and (b) Reason to believe §438(a)(7). Enforcement actions against but took no further action; (c)-(1) no nonfilers are pursued on a case-by-case reason to believe basis. .MUR 3239 Office Report Not Respondents (all in VA): (a) Smith for candidate Sought Filed Congress, Alsen H. smith, treasurer; (b) Moran for Congress cclmli ttee, Suzanne Martin senate-FL 2nd Quarter Paciulli Conrad, treasurer; (c) Comfort Lally House-NY/27 2nd Quarter Inn-NOrth and Jayanti K. Patel, as owner Albert House-GAjlO pre-Runoff camplainant: John White (VA) Brown House-GIV06 Pre-Runoff SUbject: corporate contributions Lovett House-GAjll Pre-Runoff Disposition: (a)-(c) Took no action pratt House-GlVll Pre-Runoff (continued) Whitaker House-G/V09 Pre-Runoff

fA portion of this MUR, involVing 31 groups and individuals, was closed and released to the public on December 21, 1990.

13 September 1992 FEDERAL ELECTION COMMISSION Volume 18, Number 9 llIJR 3242 fIIJR 3435;3426 Be&pOl1dents (both in NY): (a) Kevin P. Respondents (all in PA): (a) Richard L. Gaughan for Congress Committee; William F. Thornburgh; (b) Thornbuf9h for Senate Mathews; (b) Frank J. McGuire Committee, Raymond F. Dimuzio, treasurer; ~ainant: Charles Leonard, National (c) Kirkpatrick & Lockhart Republican Congressional Commdttee (DC) COOplainant: Michael Waldman, Public SUbject: Excessive contribution Citizen's congress watch (DC); Bob Barnett, Di$position: (a) $1,800 civil penalty; De1llOcratic Party of Pennsylvania (b) $1,600 civil penalty Subject: Prohibited contributions Disposition: (a)-(c) No reason to believe MDR 3271 Respondents: McConnell Senate Committee I«JR 3441 '96. Larry Steinberg, treasurer (KY) Respondents: New Jersey Democratic State Complainant: FEC initiated Commdttee, Raymond J. Lesniak, treasurer Subject: Excessive contributions Callplainant: FEe initiated Disposition: Reason to believe but took no SUbject: Reporting errors; impermissible further action funds Disposition: Reason to believe but took no JIIlUR 3312 further action Respondents: Dan Daly for U.s. Senate, Dorothy Q. Daly, treasurer (MA) MUR 3447/3229/3180 complainant: Philip s. Pepe, Jr. (NY) Respondents: (a) Dan Coats for Indiana, SUbject: Failure to disclose disputed AKA Dan Coats fo~ Senate committee, Douglas debt P. Long, treasut'er-; (b) Dan Coats for Disposition: Probable cause to believe but Congress Committee, Jeffrey L. Turner, took no further action treasurer (IN) COIlplainant: Baron Hill (IN); FEe MUR 3371 initiated Respondents (both in VA): (a) Americans SUbject: Excessive contributions1 failure United Commdttee, Ruth Stormant, treasurer; to accurately disclose contributions (b) Thomas DeWeese Di&position: (a) $9,000 civil penalty; Complainant: FEe initiated (b) no reason to believe I SUbject: EKcessive contribution Disposition: (a) and (b) Reason to believe MUR 3532 but took no further action Respondents: Bush-Quayle '92 primary Com­ mittee, J. Stanley Huckaby. treasurer (DC) JiIUR 3384 Cauplainant: Joseph T. West (CA) Bespondents (all in CA): (a) Congressman SUbject: Broadcasting subliminal images Anthony C. Beilenson; (b) Beilenson Cam­ Dispositioo: No reason to believe paign Commi ttee, Julius Glazer, treasurer; ( c) Los Angeles Times complainant: Paul Morgan Fredrix; Salomon fOl" Congress (CA) SUbject: Mailing to contributors DiSpoSition: (al-Lo) No reason to believe MUR 3421 Respondents: (a) National Republican senatorial Committee, James L. Hagen, treasurer {DC}; (b) U.S. Senator John Seymour Commdttee, F. Laurence Scott, treasurer (CA) Complainant: Congressman William E. oannemeyer (CA) SUbject: In1proper coordinated party expenditures Disposition: (a) and (b) No reason to believe

14 , . September 1992 FEDERAL ELECTION COMMISSION Volume 18, Number 9

The first number in each 1992-10: Committee's disburse­ - Spannaus; 5:6 cftation refers to the "number" ment to nonprofit voter - Trinsey, 3:7 (month) of the 1992 Record organization, 6:5 - White, 7:9 issue in which the article 1992-11: Computer-generated appeared; the second number, summary page and detailed REPOR'l'IN3 following the colon, indicates SUlI1Il\ary page I 6 : 6 Pre-primary, pee-runoff report­ the page number in that issue. 1992-12; Candidate's future ing dates ownership of campaign van, - AK date changed, 7:16 ADYISOOY OPnm:ws 7:7 - FL date changed, 9:8 1991-29: Contributions received 1992-14: candidate's designa­ - House and Senate, 1:14 and made by corporation's tion of excess campaign funds - OH, SC dates changed, 5:9 employee pledge program, 1: 4 in event of his death, 7:7 - Presidential, 2:10; 3:10 1991-32: Charges for consult- 1992-15: ~tension of time for Schedule for 1992, 1:10; 3:8~ ant's fundraising servic@s, redesignations of general 6:2; 9:6 5:6 election contributions when Waivers, July 15 quarterly, 1991-33: Allocation of expenses candidate loses primary, 8;6 7:16 when party co~ttee admdnis­ 1992-16: Nonfederal contribu­ ters pdmary election; 1:6 tions made by U.S. subsidiary SPJ!N)~ Lnn:'l'S :FUR 1992 1991-34: Coamcittee sale of of foreign corporation, 8:7 Coordinated party, 3:1 access to voter data base as 1992-17: Affiliation of part­ Presidential, 3:14 ongoing venture, 1:6 nership PAC with SSE's of the 1991-35: Application of alloca­ corporate partners, 8:8 800-LINE ARTICLES tion rules when SSF'S nenfed­ 1992-19: State campaign'S lease Advances by staff: contribu­ eral account pays its own of computers to candidate's tion limits and reporting, adndnistrative expenses, 2:10 federal campaign, 9;9 9;10 1991-36; Corporation's payment 1992-21: Excess campaign funds Compliance wi th laws outside of employee's travel expenses of 1994 candidate donated to FEC's jurisdiction, 3:12 for party fundraise" 3;5 S170(c) charity, 8:9 Contributions: receipt and 1991-37: Nonconnected PAC's 1992-25: utah convention as deposit, 6:10 payment to incorporated finn separate election, 9:9 Debt settlement plans: post­ for shared facilities and poning payment to creditors, services contributed to cam­ COORT CMES 8:10 mittees, 3;5 FlOC v. Last-minute contributions; 48­ 1991-38: Repayment of embezzled ---=--AFsCME=Po, 1:7 hour notices required, 1:18 funds to candidate cemmuttee, - America's PAC, 7:10 Names of corporate and labor 3:6 - Black political Action PACs, 6:10 1991-39: Contributions sus­ CO!llllIi t tee, 8 : 13 Registration by candidates and pected of being made in rwnes - CaUlder, 8:13 their committees, 2;12 of others, 4;9 - Eldredge for Congress 1992-1: campaign salary paid to cODUlli ttee, 9:11 candidate; reimbursements for - International Funding campaign expenses, 4:9 Institute, 9:11 1992-2: Party reallocation of - lCopko, 8:11 staff salaries as fundraising - National Republican Sena- expenses, 4:10 torial Committee (91-5176), 1992-3: Corporate payment of B:11 benefits for ell'P1oyeej candi­ - NP.A Political Victory Fund, date on unpaid leave, 5: 8 1:7 1992-4: campaign'S payment of - ~ist party (92-0e74), candidate's living expenses :9 and spouse's salary, 4:10 - Schaefer, rriends of, 6:6 1992-5: Candidate's appearance - wright, 7;8 in cable public affairs v , rEC programs, 5:8 --=-Akins, 1:8, 3:7; 8:11 1992~6: Honorarium paid to can­ - aranstool, 3: 8 didate for speech on campaign - B~ v. Fee, 8;13 issues, 4:11 - Common cause (91-2914), 1:9 1992-7: Corporate PAC'S solici­ - Common Cause (92-0249), 3:8 tation of franchise person­ - Freedom Republicans, Inc., nel, 6:4 3:7; 6:7 1992-8; Tax seminars as fund­ - LaRoUche, 4: 8 raising mechanism, 5;8 - National Rifle Association 1992-9: Cooperative's twice­ of America (NRA) (89-3011), yearly solicitation through 4:8 raffle at annual meeting, 6: 5 - Schaefer I 6:6

15 .. " September 1992 FEDERAL ELECTION COMMISSION Volume 18, Number 9

8120-9/4 The Am&rican Council of Young IRS PlUm IUmERS CIWQ:D ~ Political Leaders The March 1992 article "Compliance with Japan Laws OUtside FEe's Jurisdictionll listed Commdssioner Trevor Potter telephone numbers for Jack Reilly and Dave Jones of the IRS Exempt Organizations Tech­ 9/8 American University nical Division. Their telephone numbers washington, DC recently changed. The new numbers are: Ian stirtoo. Information Services Jack Reilly, 202/622-7352; Dave Jones, Michael Dickerson, Public 202/622-8095. Disclosure xr, Reilly and Mr. Jones provide information on the federal tax obligations 9;22 The D.C. Bar/G.W.U. National Law of political organizations. Center Continuing Legal Educa­ tion Program Washington, DC Commdssioner Trevor Potter REPOR'I'llG SCB:EroLE Susan Propper, Office of General OC'.OCBER. '.IBRClm J1IfilIM.y Counsel see page6 ~7 9;22-25 Council on Governmental Ethics Laws, 1992 Annual Conference Toronto, Ckltacio Chairman Jocm Aikens John Surina, Staff Director Lawrence Noble, General Counsel Kim Bright-Coleman, Office of General Counsel Lois Lerner, Office of General Counsel Kent cooper, Public Disclosure

9124 Intelx Educational Foundation Washington, DC Michael Dickerson, Public Disclosure

FEDERAL ELECTION COMMISSION 999 E Street, NW Bulk Ra1e Mail Washington, DC 20463 Postageand Fees Paid Federal Election Commission Permit Number G-31 Official Business