October 1994

Table of ContentReportsReports Due in October

Compliance2 MUR 3678: Failure to Report

Independent Expenditures2 MUR 3781: $35,000 in Penalties

for Corporate Contributions inName of Another

3 MUR 3803: Late Receipt ofReattributions and Redesignations

3 MURs Released to the Public10 Nonfilers Published

Regulations4 New Convention Rules Effective

Publications4 Index to PAC Abbreviations

Statistics5 Congressional Fundraising Climbs6 Republicans Outraise Democrats

7 Advisory Opinions

Audits8 1992 Republican Convention

Court Cases9 New Litigation

9 Federal Register

II Index

Correction toFlashfax Number

The September issue publishedan incorrect F1ashfax number inthe article on the foreign nationalbrochure (page 3 box). Thecorrect number for the Flashfaxservice is 202/501-3413.

Federal Election Commission

Reports

Reports Due in OctoberWith one exception,' all types of

po litic al co mmittee s must file one ormore report s in October, as ex­pla ined below. Report s must be filedwi th the appropriate federal andstate fili ng offices.

For more inform ation on Octoberreporting, see the Sep tember Record(pages 6-7 ) or the 1994 reportinghandout. To ord er the SeptemberRecord or hando ut, ca ll 800/424 ­9530 (press I if usin g a touch ton ephone) or 202/2 19-3420. Thehandout is a lso avai lable throu ghFla shfax ; ca ll 202/50 1-34 13 andenter document number 344.

Third Quarter ReportCo mmittees filing on a qu arterly

basis must file an October quarterlyreport due October 15.

October Monthly ReportMon thly filers must file a report

due October 20 and coveringSeptem ber ac tivi ty.

1 The exception is fo r committees ofcandidates who did not seek election in1994. Their next report is the 1994year-end report covering July throughDecember, which is due January 31,1995.

Volume 20, Number 10

12-Day Pre-Election ReportTh e pre-election report for the

Nov ember 8 general election mustbe filed by:

• Committees of candidates runningin the November 8 elec tion;

• PACs and party committees filingon a monthly schedule (the pre­election report is filed in lieu of theNovember monthl y report); and

• PAC s and party co mmi ttees filin gon a qu arterl y basis if the co mmit­tee ma kes co ntributio ns or ex pen­ditures in co nnection with thegeneral e lec tion during the cover­age dates for the report (be low).

Th e pre-election report , whichcovers ac tivity from October 1through October 19, is due October27 . If sent by registered or certifiedmail , it must be postmarked byOctober 24.

48-Hour Notices on ContributionsCommittees of ca nd ida tes run­

ning in the November general elec­tion must file a 48-hour not ice ifthey receive a contribu tion of

I $1,000 or more (including co ntri bu­tions and loan s from the ca ndida te)between October 20 and November5 . The co mmittee must disclose theco ntribution on FEC Fo rm 6 or in astate me nt co ntaining the same infor­mation . The not ice must be receiv edby the federal and state fil ing officeswithin 48 hours of the committee ' srece ipt of the contribution.

(continued on page 2)

Federal Election Commission RECORD

Reports(continued f rom page 1)

24-Hour Reportson Independent Expenditures

Political committees and otherpersons 2 planning to make indepen­dent expenditures to support oroppose candidates in the November8 general election are reminded ofthe 24-hour reporting requirement.Under that requirement, ge nera l­election independent expendituresaggregating $1,000 or more andmade between October 20 andNovember 6 must be reported withthe appropriate federal and statefiling offices within 24-hours afterthe expenditure is made. •

2 Individuals and other persons who arenot political committees are remindedthat when their independent expendi­tures exceed $250 in a calendar year,they must fil e a report at the end of thatreporting period. 11 CFR 109.2. Seenext article.

Federal Election Commi ssion999 E Street, NWWashington, DC 20463

800/424-9530202/219-3420202/501-3413 (F1ashfax Service)2021219-3336 (TDD)

Trevor Potter, ChairmanDanny L. McDonald,

Vice ChairmanJoan D. Aikens , CommissionerLee Ann Elliott, CommissionerJohn Warren McGarry,

CommissionerScott E. Thomas, Commissioner

John C. Surina, Staff DirectorLawrence M. Noble, General

Counsel

Published by the InformationDivision

Louise D. Wides, DirectorStephanie Fitzgerald, Editor

2

Compliance

MUR3678Individual's Failureto Report IndependentExpenditures

Evans Cabinet Corporation andits CEO, Clyde Evans, agreed to paya $2,500 civil penalty for failing todisclose $4,325 in independentexpenditures I made in the form ofnewspaper ads. The civil penaltyalso covered other violations: failureto display the required disclaimer inthe ads and the use of corporatefunds to pay for the independentexpenditures and $1,700 in contri­butions to federal candidates.

Failure to Report IndependentExpenditures

Mr. Evans failed to file therequisite disclosure statements onthe independent expenditures, whichadvocated the defeat of Congress­man J. Roy Rowland and whichappeared in Georgia newspapersduring October and November of1990 and 1992. The 1990 ads cost$1,383 and the 1992 ads, $2,942.Once his independent expendituresexceeded $250 in a calendar year,Mr. Evans was required to filesigned statements disclosing infor­mation on the independent expendi­tures and certifying, under penaltyof perjury, that the expenditureswere made without the consultationor cooperation of any authorizedcommittee. 2 U.S.c. §434(c).

(Individuals- and other entitiesthat are not political committees-

I An independent expenditure is anexpenditure f or a communication thatexpressly advocates the election ordef eat ofa clearly identified f ederalcandidate but that is not made with thecooperation or consent of, or inconsultation with, or at the request orsuggestion of, any candidate or any ofhis or her agents or authorized commit­tees. 2 u.s. c. §43 1{17).

October 1994

may file independent expenditurestatements on FEC Form 5.)

Failure to Display Correct Dis­claimer

Mr. Evans failed to display therequired disclaimer statement in theads. Although he did include astatement that identified him as thesponsor, it did not clarify that theads were "not authorized by anycandidate or candidate's commit­tee," in violation of 2 U.S.c.§44ld(a).

I Use of Corporate FundsMr. Evans paid for the ads with

monies drawn from a specialaccount containing loans from thecorporation-$29,000 loaned duringthe fall of 1990 and $110,000loaned during October 1992. Thespecial account, over which Mr.Evans had sole signature authority,also contained funds from othersources and, in effect, intermingledMr. Evans's personal funds withcorporate funds. Mr. Evans drewfrom this account to cover a varietyof expenses, including the indepen­dent expenditures and the contribu­tions to federal candidates.

These circumstances placed thecorporation and Mr. Evans inviolation of 2 U.S.c. §44l b, thecorporation for having made loanswhich were used to influencefederal elections, and Mr. Evans forhaving consented to the loans. •

MUR 3781$35,000 in Civil Penalties forCorporate ContributionsMade in Name of Another

During a period of almost 10years, from 1983 through 1992, theUniversity of Osteopathic Medicineand Health Sciences of Des MoinesIowa, a nonprofit corporation, ,reimbursed University President Dr.J. Leonard Azneer for his contribu­tions to federal and state candidates.The contributions to federal candi­dates, which totaled $19,000,

October 1994

violated the prohibition on corporatecontributions (2 U.S .c. §441 b) andthe ban on contributions made in thename of another (2 U.S.c. §441f).The University and Dr. Azneer paidcivil penalties of $19,000 and$16,000, respectively, for violatingthese provisions.

The violations came to light afteran independent counsel , retained bythe University in October 1992,investigated Dr. Azneer's adminis­tration. Filing sua sponte submis­sions, the University voluntarilyinformed the FEC and the U.S.Internal Revenue Service about thecontribution reimbursements .

In determining the civil penaltyfor the University, the Commissiontook into account that the school hadresolved the matter with the IRS bypaying $250,000 to the U.S . Trea­sury in lieu of losing its tax exemptstatus. Additionally, the school hadpaid over $23,000 to cover exciseand other taxes.

The University also disclosed thereimbursement transactions to theIowa Campaign Finance DisclosureCommission.

In February 1989, a formerUniversity vice president had raisedallegations concerning Dr. Azneer'scontribution reimbursement practicewith some members of the school'sboard of trustees. The allegationswere brought to the attention of theUniversity's counsel and accoun­tants, but the practice continueduntil September 1992, when Dr.Azneer was placed on administra­tive leave. (He has since left theUniversity.) ..

MUR3803Late Receipt ofReattributionslRedesignations

Under the terms of a conciliationagreement, the Ferraro for U.S.Senate committee agreed to pay a$900 civil penalty for accepting$4,400 in excessive contributionsfrom II individuals . The committeewas Geraldine Ferraro's principal

campaign committee for her unsuc­cessful 1992 primary campaign inNew York.

Although the 11 contributorsredesignated or reattributed theexcess portion of their contribu-

I tions, I the committee failed to obtainsigned redesignations and reattribu­tions within the 60-day time limitthat runs from the date of thecommittee's receipt of an excessivecontribution. Failing to receive theredesignations and reattributions intime, the committee should haverefunded the excess amounts withinthe 60-day limit, as required underII CFR 103.3(b)(3). Because it didnot , the committee, in effect,accepted excessive contributions, aviolation of 2 U.s.c. §441a(f).

Additionally, the committeefailed to disclose the redesignationsand reattributions in the reportcovering the period during whichthey were received, in violation of11 CFR 104.8(d)(2)(i). The commit­tee mistakenly reported them earlier,in the report covering the periodduring which they were requested. ..

MURS Released to the PublicListed below are FEC enforce­

ment cases (Matters Under Reviewor MURs) recently released forpublic review. They are based onthe FEC press releases of July 29,August 3, 4, 19 and 26, and Sep­tember 12. Files on closed MURsare available for review in thePublic Records Office.

I A candidate committee may ask anindividual to redesignate the excessiveportion of a contribution to a differentelection for which the contributor has

I not yet exceeded the limit. A committeemay also ask contributors to reattributetheir joint contribution so that theexcessive amount is attributed to thedonor who has not yet used up his orher limit . When requesting a redesigna­tion or reauribution , a committee mustoffer to refund the excessiv e amount.See II CFR 1l0.1(b) and (k) and1l0.2(b).

Pre-MUR 261Respondents: (a) Robert Martinez(FL); (b) Republican Party ofFlorida, James H. Stelling, treasurerComplainant: Referral from U.S.Department of JusticeSubject: Excessive contributions;contributions exceeding $25,000limitDisposition: (a)-(b) Took no action

MUR 2892/2846/3004Respondents: (a) West BeachEstates; (b) Haseko (Hawaii), Inc.;(c) Graham Beach Partners; (d) Ha­seko Realty, Inc .; (e) HasekoEngineering, Inc.; (f) Haseko (Ewa),Inc.; (g) Royal Hawaiian CountryClub; (h) Y.Y. Valley Corporation;(i) Tetsuo Yasuda; U) YasuoYasuda; (k)-(z) 16 other respon­dents agreeing to civil penalties; 100remaining respondentsComplainants (all in HI) :AnthonyP. Locricchio; Victoria S. Creed,President, Maunawili CommunityAssociation; Karin L. Kosoc; DonnaWongSubject: Foreign national contribu­tionsDisposition: I (a) $38,000 civilpenalty; (b)-(f) $30,000 civil pen­alty; (g)-(h) $23,000 civil penalty;(i)-U) $23,000 civil penalty; (k)-(z) between $8 ,000 and $125 in civilpenalties; reason to believe but tookno further action (67 respondents) ;no probable cause to believe (12respondents); no reason to believe(11 respondents); took no action (10respondents)

MUR3499Respondents: Doug Barnard forCongress, Committee for Druie

(continued on page 10)

/Sixty respondents received letters ofadmonishment from the Commission, asdid more than 100 recipients offoreignnational contributions who were notnamed as respondents. For moreinformation on this MUR and theprohibition on foreign nationalcontributions, see the August 3 pressrelease and the September Record.

J

Federal Election Commission RECORD

Regulations

Revised Convention RulesNow Effective

Revised regulations governingpublicly financed Presidentialnominating conventions becameeffective August 25. They will applyto the 1996 conventions.

The regulations expand disclo­sure by requiring convention citiesto file a post-convention statementreporting the amounts spent forconvention facilities and services:the total defrayed with publicrevenues and the total defrayed froma municipal convention fund.

Municipal convention funds areaddressed in a new regulation thatallows these funds to be used forpublicly funded Presidential con­ventions as long as the fund wascreated to attract other conventionsand events to the city (not just thenominating convention). Theregulation is based on AOs 1983-29and 1982-27.

A new provision allows conven­tion committees to raise contribu­tions to pay legal and accountingcompliance costs, but not any otherexpenses. Before, the Republicanand Democratic convention commit­tees could not accept any privatecontributions; they had to limitspending to the amount of theirpublic funding grants. I Donations toconvention compliance funds countagainst the donor's limit on contri­butions to the national comm.itteeand, in the case of an individual,against the $25 ,000 annual limit onall federal contributions.

The regulations simplify termi­nology by using the term "comrner-

I The major party convention commit­tees are entitled to receive a publicfunding grant of $4 million as in­creased by the cost-of-living adjustment(COLA). In 1992, the COLA raisedeach party 's convention committeeentitlement to over $11 million dollars.

4

cial vendor" to replace previousterms ("local ," "retail," "local retail")used to describe businesses that mayoffer reductions, discounts and freeitems. Convention committees, hostcommittees and convention citiesmay all accept goods and servicesfrom commercial vendors under thesame terms and conditions as areprovided to nonpolitical clients.

The term "local businesses"(which excludes banks) has beenretained to describe businesses

I permitted to donate money, goodsand services to host committees andconvention cities for certainconvention-related purposes; thesebusinesses may also donate to amunicipal convention fund.

Finally, the revised regulationsreorganize the convention fundingrules at II CFR Part 9008 and makethem consistent with the regulationsgoverning the public funding ofPresidential primary and generalelections, including the rules onaudits and repayments.

By law, the Commission mustaudit publicly funded committees,including convention committees, toensure that public funds are properlyspent. (See article on audit of the1992 Republican convention com­mittee, page 8.)

The revised rules and their expla­nation and justification were pub­lished in the Federal Register on June29, 1994 (59 FR 33606). To obtain acopy of the notice, call PublicRecords: 800/424-9530 (press 3 ifusing a touch tone phone) or 202/219-4140. The document is alsoavailable through Flashfax, theFEe's 24-hour faxing service. Call202/501-3413 and enter documentcode 227.•

October1994

Publications

Updated Index to PACAbbreviations

The Commission recently pub­lished a new edition of Pacronyms,an alphabetical list of acronyms,abbreviations and common names ofpolitical action committees (PACs).

For each PAC listed, the indexprovides the full name of the PAC,its city , state, FEC identificationnumber and, if not identifiable fromthe full name, its connected, spon­soring or affiliated organization.

The index is helpful in identify­ing PACs that are not readily identi­fied in their reports and statementson file with the FECI

To order a free copy of Paero­nyms, call the Public Records Officeat 800/424-9530 (press 3 if using atouch tone phone) or 202/219-4140.

Other PAC indexes, describedbelow, may also be ordered fromPublic Records. The cost is shownin parentheses.

• An alphabetical list of all regis­tered PACs shows each PAC'sidentification number, address,treasurer and connected organiza­tion ($13.25).

• A list of registered PACs arrangedby state provides the same infor­mation as above ($13.25).

• An alphabetical list of organiza­tions sponsoring PACs shows thePAC's name and identificationnumber ($7 .50) . •

I Under FEC regulations, the name of acorporate or labor PAC must includethe full, official name of the connectedorganization. A PAC may use anabbreviated name on checks andletterhead if it is a clearly recognizedabbreviation or acronym by which theconnected organization is commonlyknown. However, both the full, officialPAC name and the abbreviated namemust be disclosed in all reports,statements and disclaimers. 11 CFR102.14(c).

October /994 Fed eral Election Commission RECORD

Statistics

Congressional FundraisingContinues to Climb

By the end of June 1994-18months into the 1993-94 electioncycle-campaigns of 1994 Houseand Senate candidates had raised$387.7 million, 5 percent more thantheir counterparts in 1992. Spendingdropped 6 percent to $270.9 million,still far exceeding spending in pre­1992 cycles (see graph).

Senate campaigns raised $163.5million in the first 18 months of the1994 cycle (nearly unchanged from1992) and spent $113.5 million(down 8 percent). House fundrais-

ing, at $224.2 million, was up 8percent, but spending, at $157.4million, declined 4 percent.

While overall fundraising in­creased, PAC support of 1994campaigns declined 1 percent from1992 to $97.5 million. Contributionsfrom individuals, however, in­creased by 9 percent to $224.3million. Contributions and loansfrom candidates to their owncampaigns went up 8 percent to $52million.

There were fewer candidatesoverall at the 18-month point in1994 than in 1992. However , thenumber of nonincumbents who hadraised at least $50,000 by June 30 ofthe election year continued toincrease.

Median receipts of House incum­bents, challengers and open-seatcandidates increased over 1992levels except for Republican incum­bents, whose median receiptsdeclined slightly. Democraticincumbents showed the largest gain.

The graph is based on an August12 statistical press release on 18­month House and Senate activity.Copies are available from the PublicRecords Office. Call 800/424-9530(press 3 if using a touch tone phone)or 202/219-4140. You can also havethe release faxed to you through theFEC's Flashfax service. Call 202/501-3413 and enter document code627. ..

(Stati stics continued on pag e 6)

House and Senate Activity at IS-Month Point 1

Cycle(No. of Candidates)

o 50 100Millions of Dollars

150 200 250

,--_~I Receipts

_ Disbursements

300 350 400

1986 1== = = = ,...._ _ =====(1,614)

1984 1== = =(1,598)

1992b==========~====;:;;;;;;===iiiiiiiliiiiiiiiiiiiiiiiiiiiiiiii___r---~--'(2,193)

1994(1,924)

1988 I::================~.,....---...,..~ ...,--~(1,493)

1990 b = = ======= = = = = = = = = = = .......- - - ---,---'---'(1,430)

I Covers activity through June 30 of the election year.

5

October 1994Federal Election Commission RECORD- -------------- - - - - --------------

Statistics(continued from pag e 5)

Federal Activity of Party Committees at I8-Month Point 1

I Covers activity through June 30 of the election year. Includes federal acti vity at alllevels of the party: national, state and local.

Cash on Hand and Debts

Receipts and Disbursements

Dem Rep1994

Dem Rep1994

Dern Rep1992

Dern Rep1992

'-'-_-...JI Receipts

_ Disbursements

Dem Rep1990

I ICash on Hand

_Debts

Dem Rep1990

Dern Rep1988

Dem Rep1988

Dem Rep1986

Dem Rep1986

I ~

III r-e-

lm '$

.1

:] I'- -

po w

1'& I" ..... Ibi

- -,I> rAr ~

,] 1\1l'

i!

&

'-± ~ -

r-r-

f---

.....

f---

r-r-r- I--

-

if-- - f-- -

rl • • I I I I I

o

o

5

10

25

20

15

50

30

150

100

Millions of Dollars200

Millions of Dollars35

Republicans OutraiseDemocrats by $80 Million

In raising and spending funds forelection of federal candidates, Re­publican committees continued tooutpace the Democrats during thefirst 18 months of the 1993-94 elec­tion cycle (January 1993 throughJune 1994) . Republicans raised $80million more and spent $63 millionmore than the Democrats.

Although lagging behind in totaldollars , Democratic committeesincreased their federal fundraisingand spending by 34 percent and 27percent, respectively, comparedwith the same period in the 1991-92cycle. Republican federal fundrais­ing, by contrast, increased only 3percent, while the Party's spendingon federal election activity remainedlevel with 1992.

Federal activity by both parties atthe state and local levels continuedto grow. The increases reflected inboth the 1992 and 1994 cyclescould, in part, be explained bychanges to FEC rules. In January1991 (the start of the 1992 cycle),the FEC implemented stricter ruleson allocating expenses betweenfederal and nonfederal activities toprevent the use of nonfederal funds("soft money ") to influence federalelections . Nonfederal funds areraised outside the limits and prohibi­tions of federal law and are prohib­ited for use in federal elections.

The new rules required, for thefirst time , that national partycommittees disclose their nonfederalactivity in FEC reports. Thosereports show that the Democraticnational committees took the lead innonfederal fundraising, more thandoubling nonfederal receipts anddisbursements compared with theprevious cycle. Nonfederal fundrais­ing by the Republican nationalcommittees, by contrast, was down28 percent, and spending increasedonly a modest 4 percent.

6

October 1994 Federal Election Commission RECORD

I Specifically, FEE satisfies the criteriaat JJ CFR JOO. 5(g)(4)(ii)(D), (E), (F),(G) and (I), and JJO.3(a)(3)(ii)(D), (E),(F), (G) and (1).

FEE's Affiliated StatusFEE is affiliated with the LNC,

based on several factors of affilia­tion listed under 11 CFR 1OO.5(g)(4)(ii) and 11O.3(a)(3)(ii).1For examplethe four individuals who plan toestablish FEE are members of theLNC, thus satisfying the criterion at11 CFR 100.5(g)(4)(ii)(D).

FEE's status as a politicalcommittee affiliated with the LNC(rather than a corporate vendorproviding services to the LNC)overrides FEE' s status as a corpora­tion. The financial arrangementsbetween FEE and the LNC, there­fore, do not raise any issues relatedto the corporate prohibition under2 U.S.c. §441b.

The affiliated relationship,however, also means that FEEshares a common contribution limitwith the LNC and any other politicalcommittees affiliated with the LNC.When, therefore, FEE's memberscontribute $3,333 each towards the

(continued on page 8)

gating in excess of $1,000 during acalendar year. Also determinative iswhether the major purpose of theorganization is to make expendituresor solicit contributions for thenomination or election of candi­dates. See Akins v FEe, No. 92­1864 (D.D.C. March 30, 1994).Furthermore, a committee ororganization representing a nationalparty in making arrangements for itsconvention to nominate a Presiden­tial ticket is required to register andreport as a political committee.11 CFR 9008.1(b). See also2 u.s.c §437(2). Because FEE' ssole purpose is to make the arrange­ments for the Libertarian Party'sconvention to nominate its 1996Presidential ticket, it qualifies as apolitical committee with registrationand reporting obligations.

AdvisoryOpinions

AO 1994-25Corporation HandlingConvention Arrangements asPolitical Committee

FEE Enterprises (FEE), a corpo­ration organized to conduct theLibertarian Party's 1996 Presiden­tial convention, qualifies as apolitical committee under theFederal Election Campaign Act(Act); as such, it must register andfile periodic reports.

This determination is based on anarrangement proposed by theLibertarian National Committee(LNC) under which: A for-profitcorporation founded by four indi­viduals, each contributing $3,333 instart-up capital, would organize,

I promote and stage the convention;the corporation, called FEE, wouldrent a convention hall and chargethe LNC for its use; FEE would

I purchase ad space in the LNC'smonthly newspaper and rent itsmailing list in order to promote theconvention to potential attendees;and attendees would pay feesdirectly to FEE. No other fundswould change hands between the

I LNC, FEE and the candidates, andall charges would be at the fairmarket value. FEE would not owethe LNC anything if FEE turned aprofit; nor would the LNC or thecandidates reimburse FEE if itsuffered a loss.

FEE's Status as PoliticalCommittee

Although the LNC did notI believe FEE would be required to

register and report as a politicalcommittee, FEE does qualify as apolitical committee.

The Act defines a "politicalcommittee" as any committee, club,association, or other group of

I persons which receives contribu­tions or makes expenditures aggre-

Dem Rep1994

Dem Rep1992

"... -

- --

- --!'lI

-- - - -

- - - - -

- '- "- -o

10

20

30

5

Millions of Dollars

35

_ _ --'JReceipts

_ Disbursements

25

Nonfederal Activity ofNational Party Committeesat IS-Month Point 1

15

I Covers activity through June 30 of theelection year. Includes activity of eachparty 's three national-level committees(the national committee and the Houseand Senate campaign committees).

More information on Democraticand Republican party activity isavailable in an August 8 pressrelease, which can be ordered fromPublic Records. Call 800/424-9530(press 3 if using a touch tone phone)or 2021219-4140. The press releaseis also available through the FEC's24-hour Flashfax service. Call 202/501-3413 and enter document code628 at the prompt. ..

7

I The explanation and justification fo rthe newly effective convention fu ndingrules explain that a convention commit­tee accepting full public finan cing maynevertheless accept contributions in thefor m of staff advances as long as theyare later reimbursed in full , whichextinguishes the contributions. Untilrepaid. an advance counts against theindividual's $20,000 per year contribu­tion limit f or the affiliated nationalpar ty committee. See 59 FR 33608,June 29, 1994.

Federal Election Commission RECORD

Advisory Opinions(continued fr om page 7)

corporation' s start-up costs , thesefunds count toward eachindividual's $20 ,000 contributionlimit for the LNC. Similarly, fundsraised by FEE for the conventionwould be considered contributionsto the LNC. In particular, fund sraised through the sale of ad spacein the LNC newspaper, if purchasedby individuals or corporationsthrough the auspices of FEE, wouldgenerally be considered contribu­tions and would be subject to thelimitations and prohibitions of theAct. 11 CFR 102.5(a)(3); AOs1990-3 and 1978-46. Funds fromcorporations could not be used forfeder al purposes but could be placedin a nonfederal account. See AO1978-46 .

Allocation of Federal andNonfederal Funds

The Commission cautioned theLibert arian Party regarding itsproposed split of the convention intofederal and nonfeder al componentsfor purposes of fundin g conventionoperations. In its request, the LNCstated that all activities involvingthe selection of its Presidential andVice Presidential nominees wouldtake up only one day of the six-dayconvention. The Commissionobserved , however, that activitiesrelated to the Presidential nomina­tion were also scheduled to takeplace on other days and that themajor purpose of the conventionappeared to be the nomination of thePresidential ticket.

Date Issued: August 19, 1994;Length : 6 pages. ..

8

Advisory Opinion RequestsAdvisory opin ion requests

(AORs) are available for review andcomment in the Publi c RecordsOffice.

AOR 1994-29Application of contribution limits tocandidate running in primaries oftwo parties. (Levy for CongressCommittee; August 30, 1994;2 pages )

AOR 1994-30T-shirts bearing candidate-supportmessages marketed by commercialvendor through radio ads and atcandidate events. (Cons ervativeConcepts ; September 1, 1994;11 pages )

AOR 1994-31Use of contributions designated forgeneral election when candidate!nominee withdraws. (CongressmanDean Gallo; September 6, 1994;3 pages )

AOR 1994-32Appli cability of FEC confidentialityrules to complainant' s publicdisclosure of letter submitted inenforcement matter. (Kellie Gasink;September 15, 1994; 2 pages)"

Audits

I FEC Releases Audit on 1992I Republican Convention

The Committee on Arrangementsfor the 1992 Republican NationalConvention received $11 .05 mill ionin federal funds for the Presidential

I nominating convention in Houston.Based on audit finding s, the Com-

I mission determined that the commit­tee had to repay $47,411 to the U.S.Treasury: $46,375 in unspent

I federal funds and $1,036 in commit­I tee checks never cashed by the

payees. The committee has repaid$26,273 to date.

October 1994

The audit report suggested that$ 10,202 incurred by a staff memberon behalf of the committee shouldbe considered contributions . Abouthalf of these expenses were for theindividual's own campaign-relatedtravel and subsistence, but they werenot reimbursed with in the timelimits. An advance for an individ­ual 's own travel , food and lodgin gexpen ses-unless exempt under11 CFR 100.7(b)(8)-is considereda contribution if not reimbursedwithin 30 days from the dateincurred or, in the case of credit cardcharges, within 60 days after theclosing date of the billing statementon which the charges first appear.

I11 CFR 116.5(b) . The committeesaid that it had been unaware of the

Itime periods for reimbursement.

The staff member also chargedabout $5,000 in expenses for meals

I provided to campaign volunteers.Although the committee argued that

Iit had reimbursed the individualbefore he paid the bill , this kind ofstaff advance (in contrast to the

I individual' s own travel and subsis-tence expenses) results in a contri-

I bution at the time the expen se isincurred. I

IThe audit also discovered almo st

$400,000 in committee debts thathad not been reported . The commit-

I tee said that it did not receive the

Iinvoices until months after thereporting deadline. Reportingestimates of those debts, the com­

I mittee argued, would have been

II

I

I

1

II

October 1994

inaccurate and misleading. Thecorrunittee did, however, fileamended schedules disclosing thedebts.

Final audit reports are availablefrom the Public Records Office. ..

Court Cases

New Litigation

Fulani v. FEC (94-1593)Lenora Fulani and her 1992

Presidential corrunittee, Lenora B.Fulani for President Committee,petition the court to review aCorrunission decision to conduct aninvestigation into the committee'scampaign finances pursuant to thepublic funding statute. Dr. Fulaniand the committee claim that theFEC investigation violates theirconstitutional rights and exceeds theFEC's authority.

On July 26, 1994, the FEC votedto open an investigation into apossible misuse of federal funds bythe Fulani committee, which hadreceived about $2 million in primarymatching funds . The investigationwas authorized under 26 U.S .c.§9039(b). That provision grants theFEC the specific authority to auditand investigate committees receiv­ing matching funds

The committee says it believesthat the FEC opened the investiga­tion in response to a July 8 articlepublished in a weekly Washington,D.C. , newspaper (Washington CityPaper). The article describedalleged public funding abuses by theFulani organization. However, thecorrunittee claims that the FECalready knew about the allegationsbecause they were based on acomplaint filed with the Corrunis­sion about six months earlier.

The complaint was the subject ofa suit filed by the Fulani committeein June 1994, which is still pendingin district court in New York. In that

ca se, the committee contended thatthe complaint was invalid becausenot all of it was sworn to by thecomplainant, as required under2 U.S.c. §437g, and was thereforeinvalid. The committee said that theFEC had exceeded its enforcementauthority by processing an impropercomplaint. (See surrunary in theAugust Record, page 11.)

In this new action, petitionersaccuse the FEC of "forcing" them todefend themselves on two fronts andof "undermining due processprotections."

U.S. Court of Appeals for theDistrict of Columbia Circuit, I No.94-1593 , August 25,1994.

Funk v. FECPlaintiffs seek a ruling that the

FEe's decision to take no action ontheir administrative complaint,Matter Under Review (MUR) 3625,was contrary to law. They ask thecourt to order the agency to takeremedial action within 30 days or,alternatively, to transfer the com­plaint to a federal grand jury in theSouthern District of California forinvestigation of the allegations.Finally, they ask the court to findunconstitutional a provision of theFederal Election Campaign Actestablishing the District of Colum­bia as the sole venue for certaincourt cases.

Plaintiffs in the suit are Robert L.Funk, the manager of James H.Gilmartin 's unsuccessful 1992House campaign, and Mr. Gilmartinhimself, the 1992 and 1994 Demo­cratic nominee for California's 25thCongressional District seat. In MUR3625, plaintiffs alleged that theValencia National Bank made aprohibited in-kind contribution bydistributing a newsletter featuring apicture of Mr. Gilmartin's opponent,

J Challenges 10 FEC actions madeunder the public funding provisions arefiled directly with this court.

Federal Election Commission RECORD

bank chairman Howard McKeon,along with an article congratulatinghim on his 1992 Republican primaryvictory. (Mr. McKeon res igned hischairmanship after winning the 1992House race. ) The newsletter wascirculated to all account holders andwas also made available at the bank.

Plaintiffs raise the additionalissue of possible insider loans madeto members of the bank's board ofdirectors during Mr. McKeon'stenure. With respect to this allega­tion , plaintiffs named the Comptrol­ler of the Currency as a defendant.

Under 2 U.S.c. §437g(a)(8)(a),all litigation challenging Commis­sion determinations in MURs mustbe filed in the U.S. District Courtfor the District of Columbia. Plain­tiffs claim that the provision de­prives them-and other aggrievedparties-of their constitutional rightof due process by denying them theuse of their local district courts andforcing them either to pay the extracosts of litigation in a foreignjurisdiction or to drop their claims.

U.S. District Court for theDistrict of Columbia, Civil ActionNo. 94-1894, August 30,1994."

Federal RegisterFederal Register notices are

available from the FEC's PublicRecords Office.

1994-11II CFR Parts 100 and 113: Ex­penditures; Personal Use of Cam­paign Funds; Proposed Rule; Re­quest for Additional Comments(59 FR 42183, August 17, 1994)

1994·12II CFR Parts 107, 114 and 9008:Presidential Election CampaignFund and Federal Financing ofPresidential Nominating Conven­tions; Final Rule; Announcementof Effective Date (59 FR 43726,August 25, 1994)

9

Federal Election Commi ssion RECORD October 1994

/ The Florida pre-primary report was due Friday , September 2. (The followingMonday, September 5, was a f ederal holiday .) The Little campaign report wasrecei ved on Wednesday, September 7, and the Wiley campaign report was receivedon Tuesday, September 6.

Nonfilers PublishedThe candidate committees listed below failed to file required campaign

finance reports. The list is based on the FEC press releases of September 6, 9and 16. The Commission is required by law to publicize the names of nonfil­ing authorized committees. 2 U.s.c. §438(a)(7). The agency pursues enforce­ment action against nonfilers on a case-by-case basis.•

Office Sought

House, NYIIIHouse, FLl21Senate, WAHouse, FL/20Senate, MDHouse, FLl03House, MN07House, WN02House, WV04House, FLl15Senate, FLHouse, NY/26

Complainant: Marta RussellSubject: Contributions in name ofanother;Disposition: (a)-(b) Reason tobelieve but took no further action;(c)-(g) no reason to believe

MUR 37811Pre·MUR 273Respondents: (a) University ofOsteopathic Medicine and HealthSciences of Des Moines, Iowa;(b) Dr. J. Leonard Azneer (IA)Complainant: Sua sponteSubject: Corporate contributions;contributions in name of anotherDisposition: (a) $19,000 civilpenalty; (b) $16,000 civil penalty

MUR 38031Pre-MUR 268Respondents: Ferraro for U.S.Senate, Charles N. Atkins, treasurer(NY)Complainant: Sua sponteSubject: Excessive contributions;failure to obtain and report redesig­nations and reattributionsDisposition: $900 civil penalty

MUR3809Respondents: Sellers for U.S.Senate Committee, Heather E.Sellers, treasurer (AL)Complainant: FEC initiatedSubject: Failure to file reports ontimeDisposition: $1,300 civil penalty

MUR3811Respondents: National AlbanianAmerican PAC, Martin V. Delisi,treasurer (FL)Complainant: FEC initiatedSubject: Failure to file reports ontimeDisposition: $1,000 civil penalty

MUR3822Respondents (all in TN): (a) ZachWamp; (b) Committee to Elect ZachWamp, L. Dan Johnson, treasurerComplainant: Meyer for Congress,F. Scott LeRoy, treasurer (TN)Subject: Failure to register candi­dacyDisposition: (a) Reason to believebut took no further action; (b) noreason to believe

Report Not Filed

Pre-PrimaryPre-PrimaryPre-PrimaryPre-PrimaryPre-PrimaryPre-Primary I

Pre-PrimaryPre-PrimaryPre-PrimaryPre-PrimaryPre-Primary I

Pre-Primary

Disposition: $10,000 civil penalty;$600 payment to U.S. Treasury

MUR3772Respondents (all in CA): (a) MartaRussell; (b) Jane Small; (c) GordonAnthony; (d) Douglas Martin;(e) Eric Voltz; (f) Robert Hall;(g) Barbara Boxer for U.S. Senate,Harold Silen, treasurer

MUR3622Respondents: (a) Clinton/Gore '92Committee, Robert Farmer, trea­surer (AR); (b) President BillClinton (DC); (c) Vice President AlGore (DC); (d) Time Books andPeter Osnos, Publisher (NY);(e) Dove Audio, Inc., and MichaelViner, President (CA)Complainant: Bush-Quayle '92 andBobby R. Burchfield, GeneralCounsel (DC)Subject: Corporate contributions;disclaimer; contributions in name ofanother; failure to reportDisposition: (a)-(e) No reason tobelieve

Compliance(continued from page 3)

Douglas Barnard, Jr., David B. Bell,treasurer (GA)Complainant: FEC initiatedSubject: Failure to file 48-hournoticesDisposition: $7,500 civil penalty

MUR 3510Respondents: Friends of Siljander,Dave Yeakel, treasurer (VA)Complainant: Felix J. Chabot (VA)Subject: DisclaimerDisposition: Reason to believe buttook no further action; sent admon­ishment letter

Candidate

MUR 3608Respondents: Bush-Quayle '92General Committee, Inc., J. StanleyHuckaby, treasurer (DC)Complainant: Albert McAlister,South Carolina Democratic PartySubject: Receipt of impermissiblein-kind contribution; failure toreport in-kind contribution

Adams, EricDiaz-Balart, LincolnHenry, BlairKennedy, BevListon, JohnLittle, MarcLong, PatriciaMontgomery, DavidReynolds, TomShukdinas, MichaelWiley, MikeZwibel, David

10

October /9 94

MUR 3922Respondents: Brooklyn DemocratsFederal Campaign Account, GeraldP. Garson, treasurer (NY)Complainant: FEC initiatedSubject: Failure to file reports ontimeDisposition: $5,000 civil penalty

MUR 3949Respondents: (a) Senator HerbKohl (WI); (b) Herb Kohl forUnited States Senate, Inc., Linda DeLa Mora, treasurer (WI)Complainant: Robert T. WelchSubject: Improper reporting offorgiven loansDisposition: (a)-(b) No reason tobelieve

MUR 3977Respondents: Friends of GeriRothman-Serot, Roy Hendin,treasurer (MO)Complainant: FEC initiatedSubject: Failure to file 48-hournoticesDisposition: $7,000 civil penalty.

, Index

The first number in each citationrefers to the "number" (month) ofthe 1994 Record issue in which thearticle appeared. The second number,following the colon, indicates thepage number in that issue. Forexample, " 1:4" means that thearticle is in the January issue onpage 4.

Advisory Opinions1993-18: Corporate plan to foster

political participation, 2:11993-19: Retiring 1984 Presidential

debt, 1:131993-20: Purchase and distribution

of candidate biography, 2:31993-21: Preemption of Ohio law,

2:41993-22: Use of excess funds by

retired House Member, 3:5

1993-23: PAC disaffiliation, 3:61993-24: Definition of member, 4:61993-25: Preemption of Wisconsin

law restricting contributions fromlobbyists, 3:7

1994-2: Preemption of Minnesotalaw restricting contributions fromlobbyists, 5:6

1994-3: Charitable matching planfor twice-yearly solicitations, 6:4;correction, 7:6

1994-5: Candidate status, 6:5;correction, 7:6

1994-6: Charitable matching planfor twice-yearly solicitations, 7:4

1994-7: Charitable matching planfor twice-yearly solicitations;treasurer as custodian, 7:4

1994-8: Campaign's rental of officespace from candidate-ownedcorporation, 7:4

1994-9: Transfers from nonfederalPACs; effect of corporate reorga­nization on affiliation, 7:5

1994-10: Waiver of bank fees forpolitical committee borrowers, 8:6

1994-11: SSF activities of federalcontractor partnership, 7:6

1994-12: Definition of memberapplied to association's governingand membership structure, 8:6

1994-13: Video slate card listingmultiple candidates, 7:6

1994-15: Cable series moderated byHouse Member seeking reelec­tion,8:7

1994-16: PAC contributions re­funded to former employees, 8:7

1994-19: Affiliation betweennational membership associationand state societies, 9:10

1994-20: Donation of campaignasset to local government, 9:11

1994-21 : Solicitation in duesinvoice sent to nonsolicitablemembers, 9:11

1994-22: Campaign' s lease ofproperty owned by candidate,9:11

1994-23: Payroll deduction authori­zations transferred to PAC, 9:11

1994-25: Corporation handlingconvention arrangements aspolitical committee, 10:7

Federal Election Commission RECORD

Court CasesFEC v.- America's PAC, 8:8- GOPAC, 6:5- LaRouche (94-658-A), 7:3- Michigan Republican State

Committee, 4:7; 9:8- National Republican Senatorial

Committee (93-1612), 1:12; 4:7- Political Contributions Data, Inc.

(PCD), 5:4- Rodriguez, 6:5- Survival Education Fund, Inc., 3:1- Williams, 1:12

v. FEC- Akins (92-1864), 5:4- Albanese, 9:9- Center for Responsive Politics,

1:12;9:8- Freedom Republicans, Inc., 3:3- Froelich, 2:2; 8:9- Fulani (94-1593), 10:9

I - Fulani (94-4461), 8:11- Funk, 10:9- Jordan, 8:9- LaRouche (92-1100), 1:12- LaRouche (92-1555), 9:7- National Republican Senatorial

Committee (NRSC), 5:5; 7:2- Republican National Committee

(RNC) (94-1017), 7:3; 9:8- Whitmore and Quinlan, 9:9

ReportsSchedule for 1994, 1:4; correction,

2:1- change in Florida and South

Carolina election dates, 4:6- reporting reminders, April, 3:1;

July, 6:1; October throughJanuary, 9:6; October, 10:1

Special elections- Kentucky (2nd District), 5:9- Oklahoma (6th District), 3:7- Oklahoma (Senate), 7:2

800 Line ArticlesHelp - my report is late, 6:1Registration by candidates and their

committees, 1:14

/I