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Federal Election Campaign Act Amendments - 1976 (6)
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Federal Election Campaign Act Amendments - 1976 (6)
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Philip W. Buchen Files
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The original documents are located in Box 15, folder "Federal Election Campaign Act
Amendments - 1976 (6)" of the Philip Buchen Files at the Gerald R. Ford Presidential
Library.
Copyright Notice
The copyright law of the United States (Title 17, United States Code) governs the making of
photocopies or other reproductions of copyrighted material. Gerald R. Ford donated to the United
States of America his copyrights in all of his unpublished writings in National Archives collections.
Works prepared by U.S. Government employees as part of their official duties are in the public
domain. The copyrights to materials written by other individuals or organizations are presumed to
remain with them. If you think any of the information displayed in the PDF is subject to a valid
copyright claim, please contact the Gerald R. Ford Presidential Library.
Digitized from Box 15 of the Philip Buchen Files at the Gerald R. Ford Presidential Library
THE FEDERAL ELECTION COMMISSION
ELECTION COMMISSION
CAMPAIGN GUIDE
UNITED STATES OF AMERICA
THE 1976 AMENDMENTS
INTRODUCTION
On May 11, 1976, the "Federal Election Campaign Act Amendments of 1976 " (Public Law
94-283) were signed into law and went into immediate effect.
These 1976 Amendments modify the "Federal Election Campaign Act of 1971" which had
previously been amended in 1974.
To help candidates, political committees and others involved in federal election campaigns
understand the effect of the new amendments, the Federal Election Commission has prepared this
special "Campaign Guide" outlining major changes in the law.
Column II (1971/1974 Provisions) highlights the law in effect prior to the 1976 Amendments.
Column III (1976 Amendments) highlights changes made by the new amendments.
It should be noted that this Campaign Guide should not be used as a substitute for the actual
text of the law, but is only to provide a general overall summary of the effect of the 1976 Amend-
ments. A special printing is being prepared of the text of the FECA, as amended, showing both
deleted and additional language, which will be available shortly from the Commission.
This "Campaign Guide" does not include the new detailed provisions concerning solicitation of
contributions to corporate or union separate segregated funds. This will be the subject of a separate
"Campaign Guide" being prepared by the Commission.
Similarly, this "Campaign Guide" does not include the new Amendments to those sections of
the law relating to public financing for Presidential elections and Presidential nominating conven-
tions - these will be available in a new "Compilation of Federal Election Laws" also being prepared
by the Commission - but only concentrates on the disclosure and limitations provisions applicable
to all other candidates, political committees, and other persons.
One general change should be noted at the outset: Under the 1971/1974 Act, disclosure
provisions were codified in Title 2, United States Code, and campaign limitation provisions were
codified in Title 18, United States Code. The 1976 Amendments revised this structure so that all
provisions (except the public financing provisions of Title 26), are now codified in Title 2.
For any further information, contact the FEC Office of Public Information, 1325 K Street,
N.W., Washington, D.C. 20463, call (202) 382-4733, or call TOLL-FREE (800) 424-9530.
(May 1976)
SUBJECT
1971/1974 PROVISIONS
1976 AMENDMENTS
SUBJECT
1971/1974 PROVISIONS
1976 AMENDMENTS
(2) CONTRIBUTIONS
(A) CONTRIBUTION LIMITS
(1) CANDIDATES AND COMMITTEES
(i) FROM AN INDIVIDUAL
(A) ORGANIZATION
-To a candidate or that candidate's
--$1,000 per election.
--Same ($1,000 per election).
-Principal Campaign
--Could not support any other candi-
--Now may provide "occasional, isolated, or inciden-
authorized committee(s)
Committee Support
date.
tal" support of another candidate.
-To national political party committees
--No limit (except $25,000 limit
-$20,000 per year.
(B) REGISTRATION
(No change)
on total contributions per year).
(C) RECORD-KEEPING
-To any other political committee
--No limit (except $25,000 limit
--$5,000 per year.
on total contributions per year).
-Records of contributions
--Had to be kept for contributions
--Now only requires record-keeping of contributions
over $10.
over $50.
-Total aggregate contributions per year
--$25,000 per year.
--Same ($25,000 per year).
**Note: No change, however, in requirement that
(ii) FROM A POLITICAL COMMITTEE
donors who contribute over $100 in the aggregate
QUALIFYING AS A "MULTICANDIDATE
be identified in the reports where committee has
COMMITTEE" (See definition below)
knowledge of such aggregated contributions.
-To a candidate or that candidate's
--$5,000 per election.
--Same ($5,000 per election).
-Campaign depositories
--Candidate had to have "a" check-
--Now may also maintain "such other accounts" as
authorized committee(s)
ing account for deposit of any
desired (including checking accounts, savings
contributions.
accounts, or certificates of deposit).
-To national political party committees
--No limit.
--$15,000 per year.
(D) REPORTING
-To any other political committee
--No limit.
--$5,000 per year.
-Filing with Principal
--Every committee supporting a
--New law clarifies that only committees authorized
-Total aggregate contributions per year
--No limit.
--Same (no limit).
Campaign Committee
candidate had to file its report
by a candidate to raise contributions or make expen-
with that candidate's Principal
ditures must file with the Principal Campaign Com-
(iii) FROM ANY OTHER POLITICAL
Campaign Committee.
mittee.
COMMITTEE OR ORGANIZATION
-Treasurer's "best
-- (No provision)
--Committee treasurers and candidates who show they
-To a candidate or that candidate's
--$1,000 per election.
--Same ($1,000 per election).
efforts"
have used "best efforts" to obtain and submit all
authorized committee(s)
required information shall be deemed in compliance
with the law.
-To national political party committees
--No limit.
--$20,000 per year.
-Waiver of quarterly
-Quarterly reports waived for any
--In addition, in non-election year, candidates and
--To any other political committee
-No limit.
--$5,000 per year.
report filing
quarter in which $1,000 is not
committees authorized by candidates do not have to
received or spent. (Except for
file reports in quarters when combined contribu-
--Total aggregate contributions per year
--No limit.
--Same (no limit).
end-of-year report due in Jan-
tions and expenditures do not exceed $5,000 (ex-
uary regardless of amount).
cept for end-of-year report due in January regard-
less of amount).
* DEFINITION OF "MULTICANDIDATE COMMITTEE"
-Internal communica-
-- (No provision)
--Adds new requirement that membership organiza-
--A political committee meeting all of the following 3 conditions:
tions
tions (including labor organizations or corporations)
(1) has been registered under the Act for 6 months;
must report their expenditures for all communica-
(2) has received contributions from more than 50 persons;
tions primarily devoted to express advocacy of the
(3) has made contributions to 5 or more federal candidates.
election or defeat of a clearly identified candidate,
A state political party committee need only meet (1) and (2).
when the total actual cost of such communications
relating to all candidates in an election exceeds
NOTE: There is no change in these conditions from the 1971/1974
$2,000.
Provisions, but the special term "multicandidate committee"
was added in the 1976 Amendments.
2
3
GERALD
LIBRARY
SUBJECT
1971/1974 PROVISIONS
1976 AMENDMENTS
SUBJECT
1971/1974 PROVISIONS
1976 AMENDMENTS
(4) INDEPENDENT EXPENDITURES
(CONTRIBUTIONS CONT.)
-Definition
--An expenditure "relative to a
--Changed to refer to expenditures "expressly" advo-
(iv) SPECIAL EXCEPTIONS ADDED
clearly identified candidate
cating a candidate.
TO THE 1976 AMENDMENTS
advocating the election or defeat
--To be "independent" an expenditure also can not
of a clearly identified candidate".
involve any "cooperation", "consultation", or be in
--Senate Elections: The Republican or Democratic Senatorial Campaign Committee, or the National Committee of a
"concert" with or "be at the request or suggestion
political party, or any combination of such committees may contribute not more than $17,500 in an election year to a
of" any candidate or candidate's agent. An expendi-
Senate candidate.
ture made with any such involvement with a candi-
date is a "contribution" subject to contribution
--Party Committee Limits: No limits on "transfers" between political committees of the same political party.
limits.
--Subsidiary Committee Limits: For purposes of applying contribution limits, all political committees (including corporate
--Independent spending limit
--$1,000 per candidate per election.
--No limit.
or union separate segregated funds) established, financed, maintained or controlled by the same organization (such as
subsidiaries, divisions, local units, etc.) are treated as a single political committee for purposes of contribution limits.
-Reports:
NOTE: There is an exception to this "single political committee" rule for political parties. Contributions by a single
(i) Filed by individuals
-Reports of independent expendi-
--Basically same reporting requirements, except the
national political party committee and by a single state political party committee are not treated as one com-
tures over $100 on dates political
language "need not be cumulative" is stricken.
mittee for purposes of applying the contribution limits.
committees file, but reports need
--Additional language added that must file the same
not be cumulative.
information required of contributors over $100, and
(B) CONTRIBUTION DEFINITIONS
the same information required of political commit-
tees.
-"Contract"
--Defined as "a contract, promise,
--Now only defined as a "written" contract. Also the
--Must also report name(s) of candidate(s) indepen-
or agreement, express or implied".
words "express or implied" were deleted.
dently supported or opposed, and state "under pen-
alty of perjury" whether there was any cooperation,
-Legal or accounting services
(No provision)
--Not counted as "contribution" so long as lawyer/
etc., with any candidate.
accountant is paid by his or her regular employer
--Must report any "independent expenditure" of
and does not engage in general campaign activities.
$1,000 or more within 24 hours if made within 15
But amounts paid or incurred must be reported.
days of an election.
-$500 exemption
--Costs to an individual, up to $500,
--$500 exemption for vendor applies to a person (in-
(ii) Filed by political
--No special requirement. Same
--Basically same, except must also report name(s) of
of sale of food or beverage by a
cluding committees, corporations, groups, etc.), not
committees
reports required of any politi-
candidate(s) independently supported or opposed,
vendor at cost.
just an individual.
cal committee.
and state "under penalty of perjury" whether there
was any cooperation, etc., with any candidate.
(3) EXPENDITURES
--Must report any "independent expenditure" of
$1,000 or more within 24 hours if made within 15
(A) EXPENDITURE LIMITS
days of an election.
-Candidate personal spending
-Presidential, $50,000; Senate,
--No limits except for Presidential candidates accept-
(5) PUBLICATION/BROADCAST NOTICES
limits from own funds
$35,000; House, $25,000.
ing public funds, which remain the same.
(A) Unauthorized literature or
--Must contain statement that un-
--These two sections (A) and (B) are replaced by a
--Campaign spending limits
--Presidential: primary, $10 million;
--No limits except for Presidential candidates accept-
advertisements
authorized by candidate, and
by a single new section covering communications
general, $20 million.
ting public funds, which remain the same.
that candidate not responsible.
"expressly advocating the election or defeat of a
--Senate: primary, greater of 8c per
clearly identified candidate" through use of media,
voter or $100,000; general, greater
(B) Pamphlets or advertisements
--Must state who is responsible,
direct mail, or any advertisements. In such cases, the
of 12c per voter or $150,000.
and list names of officers for any
communication must either:
--House: $70,000 each election.
organization.
(1) if authorized, state the name of the candidate
-Annual cost-of-living increase in
or candidate's agent who authorized the com-
spending limits.
munication, or
-Exemption of fund-raising costs up
(2) if unauthorized, state that the communica-
to 20% of the spending limits.
tion is unauthorized, identify who "made or
financed" it, and list the name(s) of any affi-
(B) EXPENDITURE DEFINITIONS
liated or connected organization.
-Legal or accounting services
-- (No provision)
--Not counted as "expenditure" so long as lawyer/
(C) Fund-raising solicitation
There is no change in the requirement that any fund-raising solicitation (whether authorized
accountant is paid by his or her regular employer
or unauthorized) contain a statement that reports are filed with, and available for purchase
and does not engage in general campaign activities.
from, the FEC.
But amounts paid or incurred must be reported.
4
5
SUBJECT
1971/1974 PROVISIONS
1976 AMENDMENTS
SUBJECT
1971/1974 PROVISIONS
1976 AMENDMENTS
(6) MISCELLANEOUS PROVISIONS
-Definition of "election"
--Included any political party
--Changed to include those which have "authority to"
caucus or convention "held"
nominate a candidate.
(8) COMPLIANCE PROCEDURES
to nominate a candidate.
-Authority
--FEC had "primary" civil juris-
--Now has "exclusive" primary civil jurisdiction
-FEC indexes
--FEC required to compile 2 new indexes:
diction authority.
authority.
(1) Independent expenditures made on behalf of
each candidate;
--Form of complaints
- (No provision)
--Now must be in writing, signed and sworn, nota-
(2) All political committees supporting more than
rized, and subject to false reporting laws. FEC may
one candidate, including the dates they qualify
not act solely on basis of an anonymous complaint.
for the "multicandidate committee" contribu-
tion levels.
-FEC investigation
--Any complaint filed.
--Only if FEC "has reason to believe" violation has
been committed.
-Honorariums
--Federal officeholders or officers
--Limits increased to $25,000 per year and $2,000 per
limited to $15,000 per year, and
honorarium.
--Rights of person complained
--Right to request hearing con-
--Hearings eliminated, but when FEC investigates (see
$1,000 per "appearance, speech,
--Travel and subsistence exemption extended to
against
cerning any complaint.
above), right to demonstrate that no action should
or article". Exemption for reci-
spouse or one aide.
be taken.
pie it's actual travel and subsis-
--Additional exemption added for agent or booking
tence.
fees.
-Voluntary compliance
--FEC to utilize "informal means
--Basically same, except minimum of 30 days (or half
--Honorariums exempt from definition of "contribu-
of conference, conciliation or
the number of days before an election) to use infor-
tion" to a candidate.
persuasion" to settle cases.
mal methods.
--Cases to be settled by adoption of "conciliation
-Issue-oriented organization
--Reports required by any organiza-
--Deleted.
agreement". Civil penalties can be included in conci-
report
tion making any reference to a can-
liation agreement involving "knowing and willful
didate, including voting record lists,
violations".
issue-oriented comments, etc.
-Civil actions
-FEC authority to seek civil action
--Now sole FEC authority.
(7) FEDERAL ELECTION COMMISSION
in court, or ask Justice Department
to seek civil relief.
-Appointment
--6 Commissioners, 2 each appointed
--6 Commissioners, all appointed by the President.
by President, Senate, and House.
Confirmed by the Senate with 6 year terms stagger-
--Referral of cases to Justice
--If apparent violation of a Title 18
--Now only if FEC determines there is probable cause
Staggered terms every year. 6 year
ed every 2 years (so terms expire in non-election
Department
provision (see (9) ), or if FEC
of a knowing and willful violation, and if the viola-
terms.
years).
unable to correct a violation of
tion involves contributions or expenditures aggre-
Title 2 provision (see (9)).
gating $1,000 or more.
-Authority to prescribe
--Only for Title 2 disclosure provi-
--Since all the provisions of the FECA formerly codi-
regulations
sions. No authority to prescribe
fied in Title 18 are now included in Title 2, FEC
-Confidentiality
--FEC barred from making any
--Same. However, new provision requires FEC after
regulations for Title 18 limitations
now has authority to prescribe regulations for all
information public about any
investigation to make public any conciliation agree-
provisions.
provisions of the Act.
investigation without consent
ment, any attempt at conciliation, and any determi-
of subject of investigation.
nation that no violation has occurred.
-Advisory opinions
-FEC inaction
(No provision)
--Right to appeal to U.S. District Court for FEC fail-
:Who may request
-Any federal officeholder, any
--Also, the national committee of any political party.
ure to act on complaint within 90 days or for FEC
federal candidate, or any political
dismissal of a complaint.
committee.
-Court enforcement
--No specific language, except
--FEC has authority to seek court enforcement of a
:Scope
--Must relate to specific transaction
--Basically same, but language now reads that advisory
referral to Justice Department.
conciliation agreement, or of a court order.
or activity of requestor.
opinions must relate to the "application" of a gen-
eral rule of law in the Act or regulations to a specific
factual situation.
:Immunity
-Person receiving advisory opinion
--Basically same, but language now reads that such
and acting in good faith reliance on
person "shall not. be subject to any sanction" of
it "presumed to be in compliance"
the law.
with the law.
-Limited to person asking and
--Extended to any person involved in same trans-
receiving advisory opinion.
action, or in another transaction "indistinguishable
in all its material aspects".
7
6
SUBJECT
1971/1974 PROVISIONS
1976 AMENDMENTS
(9) PENALTIES STRUCTURE
-Title 2 reporting and disclosure
-A fine up to $1,000; or 1 year
--For any violation, a fine up to the greater of $5,000
provisions (Sections 431-456)
prison; or both.
or the amount of any contribution or expenditure
involved;
-- (or in the case of a knowing and willful violation, a
fine up to the greater of $10,000 or twice the
amount of any contribution or expenditure in-
volved).
--Limitations sections codified
--A fine up to $25,000; 1 or
--Same as above for any violation, except:
in the 1971/1974 Provisions
5 years prison (depending
in Title 18 (Sections 608-617),
on the section); or both.
--For knowing and willful violations of contribu-
and re-codified in the 1976
tion and expenditure provisions aggregating
Amendments in Title 2 (Sec-
$1,000 or more, a fine up to the greater of
tions 441a-441i)
$25,000 or 300% of any amount involved; or 1
-
year prison; or both.
--Exceptions:
(i) these additional penalties apply to violations
over $250 for:
--corporate/union provisions
--$100 cash contribution limit
--prohibition of contributions in the name of
another.
(ii) these additional penalties apply to violations
of any amount for misrepresentation of cam-
paign authority.
8
GSA DC 76.9226
THE WHITE HOUSE
WASHINGTON
May 1, 1976
MEMORANDUM FOR THE PRESIDENT
FROM:
PHILIP W. BUCHEN
T.
SUBJECT:
Conference Bill to Amend the Federal
Election Campaign Laws
This supplements my memorandums to you of April 22
and 24 (see Tabs A & B) on the same subject. The
Conference Committee has now approved a bill which
is scheduled to be on the House Floor on Monday,
May 3. There are no substantive changes in the
bill, although; several significant changes have
been made in the Joint Explanatory Statement. All
of the Republican Conferees, except Bill Dickinson,
have signed the Report.
I. Comments on the Joint Explanatory Statement
Attached at Tab C is a is a memorandum from the PFC
General Counsel concerning certain changes made in
the Explanatory Statement. We agree with his
comments on advisory opinions and political action
committees (PAC's). In addition, we offer the
following comments:
1. The Statement does not define the term
stockholder, but instead notes that the
normal concepts of corporate law should
apply. It is thus questionable whether
employees with a beneficial interest in
stock bonus, ownership, or option plans,
where the rights are vested but the shares
have not been transferred, could be con-
sidered to be stockholders. If they are
stockholders, they can be solicited on an unlimited
GERALD TORD
- 2 -
basis, even though members of an union or
other non-management employees are included.
However, business interests have not yet
expressed concern on this point.
2. Contribution limitations: The bill limits
to $20,000 per year, contributions by
individuals to "political committees
established or maintained by a national
political party," and to $15,000 per
calendar year by PAC's to these same
committees.
It was previously understood that these
limits applied SO (i) an individual could
divide the $25,000 of total contributions
he is allowed per year among the National
Committee, and the House and Senate
Campaign Committees as long as he did not
give one Committee more than $20,000; and
(ii) a PAC could contribute $15,000 each
to the National Committee, and the House
and Senate Campaign Committees. However,
the present language of the Statement so
interprets the bill as to treat these
three Committees as one for the purpose
of applying the limitations on contribu-
tions made to them. The RNC indicates
that this would have virtually no effect
on its activities, and accordingly, does
not object to this provision in its
present form, but obviously it may have
an adverse effect on the Senate and
House Campaign Committees.
II. Comments on Reaction of Business Interests
A major objection of business interests had
been to the risk of having to furnish employee
and shareholders lists to unions. Although
grounds for this objection have been removed
by language in the Conference Statement, busi-
ness is still complaining about the limitations
which remain on whom they can solicit and
FORD
GERALD
LIBRARY
- 3 -
communicate with for political purposes. The
argument is based on the First Amendment rights
of the corporation and the employees to freely
associate with persons having similar interests.
Business states that a corporation's community
of interest includes all of its employees. In
this regard, business cites a letter sent to
the FEC last year by Assistant Attorney General
Thornburgh, which indicated that Justice would
not take any action against corporations who
solicited voluntary contributions from all of
their employees. Justice's letter was based,
in part, on this First Amendment argument, and
it was later adopted by the FEC in its SUNPAC
opinion.
If both corporations and unions are permitted
unlimited solicitation rights, corporations
may be said to have an advantage because only
corporations know the identity of all of the
employees and have the facilities or ability
to canvas for contributions in the plant or
to mail to home addresses. Because of these
advantages, it is unlikely that a Democratic-
controlled Congress will ever give unrestricted
solicitation rights to corporations and unions
unless unions are provided with all methods
and facilities available to the corporation
for solicitation, including the right to
solicit non-union employees during business
hours. The unions would argue that otherwise
they are at a disadvantage in soliciting non-
union employees when they have a community of
interest with all of labor, whether or not
organized. Yet, if such equal access were
to be required by Congress, as a price for
allowing unlimited solicitations by both
corporations and unions, the corporations
would likely object even more than they do
to the present bill.
Thus, it seems more realistic for business to
accept the present bill, and to try attacking
it later on constitutional grounds rather than
to expect that Congress will legislate in favor
of corporations on this issue.
FORD
Attachments
GERALD
LIBRARY
THE WHITE HOUSE
WASHINGTON
May 3, 1976
TO:
PHIL BUCHEN
FROM: RUSSELL A. ROURKE
Ave
For Direct Reply
For Draft Response
X
For Your Information
Please advise
May 3, 1976
Dear George:
Many thanks for your letter of April 30
as well as the attachments relative to
the Federal Election Campaign Act Amend-
ments.
I noted the material with great interest, and
I have been happy to bring it to the attention
of Mr. Philip W. Buchen, Counsel to the
President.
Thank you for taking the time to bring this
matter to my attention.
With every good wish, I remain,
Sincerely,
Russell A. Rourke
Deputy to Presidential
Counsellor, John O. Marsh, Jr.
George D. Webster, Esq.
Webster, Kilcullen & Chamberlain
1747 Pennsylvania Avenue, N. W.
Washington, D. C. 20006
cb
CC: PBuchen
GERALD n. toko NAME
LAW OFFICES
WEBSTER, KILCULLEN & CHAMBERLAIN
1747 PENNSYLVANIA AVENUE, N.W.
GEORGE D. WEBSTER
JOHN L. KILCULLEN
WASHINGTON, D. C. 20006
CHARLES E. CHAMBERLAIN
WILLIAM J. LEHRFELD
(202) 785-9500
OF COUNSEL
ARTHUR L. HEROLD
H. CECIL KILPATRICK
WILLIAM 1. ALTHEN
MILTON A. SMITH
DAVID S. SMITH
MICHAEL T. HEENAN
PETER M. KILCULLEN
ALAN P. DYE
MICHAEL LENEHAN
April 30, 1976
Mr. Russell Roerk
The White House
Washington, D. C.
Dear Russ:
Attached hereto is a copy of a letter to Howard
Cannon. This points out how bad this bill is for
trade associations and in my opinion, it is a disaster.
I am sending a copy of the letter to Bud Meredith also
and he will have it so he can mention it to you on Monday.
Best personal regards.
Bely.
Sincerely,
George D. Webster
GDW: jh
LIBRARY GERALD ? runo
LAW OFFICES
WEBSTER, KILCULLEN & CHAMBERLAIN
1747 PENNSYLVANIA AVENUE, N.W.
GEORGE D. WEBSTER
JOHN L. KILCULLEN
WASHINGTON. D. C. 20006
CHARLES E. CHAMBERLAIN
WILLIAM J. LEHRFELD
(202) 785-9500
OF COUNSEL
ARTHUR L. HEROLD
H. CECIL KILPATRICK
WILLIAM 1. ALTHEN
MILTON A. SMITH
DAVID S. SMITH
MICHAEL T. HEENAN
PETER M. KILCULLEN
ALAN P. DYE
MICHAEL LENEHAN
April 30, 1976
Mr. James P. Low
American Society of Association Executives
1101 - 16th Street, N.W.
Washington, D. C. 20036
Dear Jim:
The Congress has really stuck it to trade associations
in the bill as it has come out of conference. This is the
worst thing I have ever seen.
You have a meeting at 2 p.m. on Monday with Howard
Cannon. I do not know what the explanation of this is but
you cannot operate with them. Alan Dye is going to go with
you and I suggest youmight take Tom Boggs with you since I
will be out of town.
Please see the attached memorandum which has been
written by Alan Dye for your use on Monday.
Sincerely,
George D. Webster
GDW: jh
GERALD FORD
LAW OFFICES
WEBSTER, KILCULLEN & CHAMBERLAIN
1747 PENNSYIVANIA AVENUE, N.W.
GEORGE D. WEBSTER
JOHN L. KILCULLEN
WASHINGTON, D. C. 20006
CHAPLES E. CHAMBERLAIN
WILLIAM J. LEHRFELD
(202) 785-9500
OF COUNSEL
ARTHUR L. HEROLD
H. CECIL KILPATRICK
WILLIAM 1. ALTHEN
MILTON A. SMITH
DAVID S. SMITH
April 30, 1976
MICHAEL T. HEENAN
PETER H. LOWRY
PETER M. KILCULLEN
ALAN P. DYE
Honorable Howard Cannon
United States Senate
Washington, D. C. 20510
Dear Howard:
On August 27, at your request, we sent you information
explaining why we believed that Section 321 of the Federal
Election Campaign Act Amendments of 1976 unfairly damage the
trade association community. Primarily, this was because there
was no clear description in the bill of who a membership cor-
poration, such as a trade association, could solicit for contri-
butions to its separate segregated fund, where its members were
themselves corporations. The Senate provision tentatively a-
dopted by the Conference Committee allowed membership corpora-
tions to solicit their members. The House provision, also adopted,
would allow trade associations to solicit the stockholders and
executive and administrative personnel of their members under
limited conditions. The legislation left open the question of
whether a trade association separate segregated fund could send
a solicitation to a corporate member, and if so, what action
that corporate member could take in response to such a solici-
tation.
Instead of taking some reasonable action to define the
rights of trade associations in this area, such as described in
the suggested colloquy which we submitted with our letter, the
Conference Committee elected in its conference report (p. 63) to
indicate that Section 321 (b) (4) (C), allowing membership corpora-
tions to solicit their members, does not apply to trade associa-
tions with corporate members at all. What the conference report
seems to mean is that a trade association which has corporate
members may solicit contributions only under the conditions of
Section 321 (b) (4) (D). This would effectively disenfranchise
many trade associations, since Section 321 (b) (4) (D) allows
solicitations only where the corporate member has specifically
approved such solicitations and has approved no such solicita-
tions by any other trade association in any calendar year. Thus,
if most of a trade association's members are members of numerous
trade associations, it may be able to solicit contributions from
almost no one.
WEBSTER, KILGULLEN & CHAMBERLAIN
Honorable Howard Cannon
April 30, 1976
Page two
Additionally, what if a trade association is composed
of both corporate and noncorporate members? May it solicit its
noncorporate members without limit and its corporate members
only within the limits of Section 321 (b) (4) (D) ? Or may it soli-
cit its noncorporate members at all? If it is not apparent from
the names of the members on the membership list whether or not
particular members are incorporated, will such a trade associa-
tion violate the law by sending a mailing to all of its members?
Must such trade associations inquire of all their members whether
they are incorporated, and then adjust its mailing list in accor-
dance with its findings? These questions illustrate the ridi-
culous and discriminatory effects which would flow from follow-
ing the intent expressed by the conference report. Such appli-
cations of the law will make it impossible for many associations
or individuals to fully exercise their First Amendment rights.
The Supreme Court in Buckley V. Valeo expressly found that in
politics money can equal speech protected by the First Amendment.
To deny one sector of the community the right to political
speech is grossly unfair and probably unconstitutional.
A second problem with the amendments appears in $320
of the bill, which limits aggregate contributions of "affiliated"
organizations. The major problem with this provision is that in
many, if not most, cases, state and local affiliates of national
trade associations are completely autonomous. No one of them
has any control over another. The examples cited in the confer-
ence report (p. 58), however, indicate an intention to apply the
"anti-proliferation" rules to wholly independent and autonomous
affiliates of national organizations. Leaving aside the very
serious question whether any such intention can be given legal
effect, there are numerous issues of practicability and equity.
For instance, why should one such organization be penalized for
the actions of another? How is each local affiliate supposed
to ascertain the amount which others have donated to any candi-
date? Once such an "anti-proliferation" provision is extended
beyond organizations under common control it becomes ludicrous.
We believe that some change should be made in the com-
mittee report discussing these sections of the Election Act
Amendments. Such changes are absolutely necessary to the proper
functioning of the election law and to the participation of
associations and their members in the political process. If
there is anything at all which may be done in this regard at this
late date, we urge you on behalf of ASAE and the association com-
munity to attempt it.
FORD
GERALD
LIBRARY
WEBSTER, KILCULLEN & CHAMBERLAIN
Honorable Howard Cannon
April 30, 1976
Page three
If we may give you any information which will
help you to assess this issue, please let us know.
Ger Very truly yours,
George D. Webster
THE WHITE HOUSE
Barry mischalts have
ACTION MEMORANDUM
WASHINGTON
LOG NO.:
Date: May 5
Time: 400pm
cys,
FOR ACTION:
Phil Buchen
CC (for information): Jim Cavanaugh
Robert Hartmann
Jack Marsh
Dick Parsons
Max Friedersdorf
Bill Seidman
FROM THE STAFF SECRETARY
DUE: Date: May 6
Time: noon
SUBJECT:
S. 3065 - Federal Election Campaign Act Amendments of
1976
ACTION REQUESTED:
For Necessary Action
For Your Recommendations
Prepare Agenda and Brief
Draft Reply
X
For Your Comments
Draft Remarks
REMARKS:
Please return to Judy Johnston, Ground Floor West Wing
Sign S. 3065
Veto S. 3065
SERATE TORD OTHER
PLEASE ATTACH THIS COPY TO MATERIAL SUBMITTED.
If you have any questions or if you anticipate a
delay in submitting the required material, please
James M. Cannon
telephone the Staff Secretary immediately.
For the President
EXECUTIVE OFFICE OF THE PRESIDENT
OFFICE OF MANAGEMENT AND BUDGET
WASHINGTON, D.C. 20503
MAY 5 1976
MEMORANDUM FOR THE PRESIDENT
Subject: Enrolled Bill S. 3065 - Federal Election Campaign Act
Amendments of 1976
Sponsor - Sen. Cannon (D) Nevada
Last Day for Action
May 17, 1976
Purpose
To reconsitute the Federal Election Commission as an independent
executive branch agency, with members appointed in accordance
with the requirements of the Constitution, and to amend certain
other provisions of law relating to the financing and conduct
of election campaigns.
Discussion
The enrolled bill, as reported out of Conference on April 28, 1976,
passed the House by a roll call vote of 291-81 and the Senate by
62-29.
S. 3065 greatly exceeds the scope of the legislation you proposed
to the Congress on February 16, 1976. That legislation, introduced
in the Senate as S. 2987 by Sen. Griffin, would have (a) recon-
stituted the Commission's membership in accordance with the
Supreme Court decision in Buckley V. Valeo and (b) limited the
application of the laws administered by the Commission to the
1976 elections. This would have allowed for later consideration
of a comprehensive and carefully considered election reform bill.
Mr. Buchen has given you several memorandums that discuss the
bill in detail and analyze its various implications. In addition,
the Department of Justice, in the attached views letter, sets
forth several problems in the bill which, as they relate to
separation of powers and enforcement, Justice believes are suffi-
ciently serious to justify a veto:
FORD
2
- Separation of powers: congressional power to review
and veto proposed regulations of the Commission, and
retention of the Secretary of the Senate and Clerk
of the House as members of the Commission, albeit without
a vote.
- Enforcement problems: negotiation and compromise
by the Commission of willful violations of criminal
statutes.
- First Amendment issues: limitations on corporate
management and union solicitations, and restrictions
on the use of corporate and union funds in non-partisan
activities.
- Statute of limitations: retention of an inadequate
three-year period as opposed to the general Federal
statute of limitations of five years.
Whether or not these concerns of Justice are outweighed by other
considerations surrounding the bill as presented to you by
Mr. Buchen is a question on which we defer to your principal
advisers on this bill.
James Director m. Trey for
Legislative Reference
Enclosures
ASSISTANT ATTORNEY GENERAL
LEGISLATIVE AFFAIRS
Department of Justice
Washington, D.C. 20530
May 4, 1976
Honorable James T. Lynn
Director, Office of Management and Budget
Washington, D. C. 20503
Dear Mr. Lynn:
This is in response to your request for our views
on H. Rep. No. 1057, the Conference Report on S. 3065,
the Federal Election Campaign Act Amendments of 1976.
122 Cong. Rec. (daily ed.) H 3576-98.
Should S. 3065, as reported by the Conference Com-
mittee, be passed by both Houses, we believe that the
following aspects of the bill, as they relate to both
constitutional issues and enforcement problems of the
Department of Justice, should be considered by the
President in deciding whether to approve the bill:
1. The bill continues certain separation of powers
problems.
a. Section 108 amends the powers of the Federal
Election Commission as they relate to advisory opinions.
It provides that a "general rule of law" not stated in
the Act or in specified chapters of the Internal Revenue
Code may only be proposed by the Commission as a rule or
regulation pursuant to the procedures established by
$315(c) of the Act. Advisory opinions issued prior to
the proposed amendment must be set forth in proposed
regulations within 90 days after the enactment of the
amendments.
The net effect of this provision is to narrow the
function of advisory opinions and broaden the function of
regulations. Commission regulations are subject to dis-
approval by a single House of Congress. 2 U.S.C. $438(c).
FORD LIBRARY
2
When the President's bill was drafted, S. 2987, an
Administration decision was made (contrary to the
recommendation of the Office of Legal Counsel of this
Department) not to propose deletion of the device for
disapproval of regulations by either House of Congress
because the proposal would be controversial. Neverthe-
less, the President stated in his Message to Congress
that he thought that the provision was unconstitutional,
Federal Election Campaign Act Amendments, 1976, Hearing
before the Subcommittee on Privileges and Elections of
the Senate Rules and Administration Committee, 94th
Cong., 2d Sess., p. 134 (1976), and Assistant Attorney
General Scalia (in charge of the Office of Legal Counsel)
reiterated his "strenuous objection", at the Senate
hearing. Id. at 133.
The proposed amendment would have the practical
effect of contracting the independent powers of the
Commission and expanding the practical significance of
the congressional veto, making it more objectionable
than previously. The Supreme Court declined to rule on
the one-House veto provision involved in Buckley V.
Valeo because the Commission, as constituted, could not
validly exercise rule making powers. 96 S. Ct. 612, 692,
n. 176 (1976). However, the spirit of the Buckley
decision is that Congress should not engage in executing
laws as opposed to enacting them. 96 S. Ct. at 682ff.
This is entirely consistent with the position we have
taken on the unconstitutionality of legislative veto of
regulations. For general presentations on the subject
see the statements by Assistant Attorney General Scalia
in Congressional Review of Administrative Rulemaking,
Hearings before the Subcommittee on Administrative Law
and Governmental Relations, House Judiciary Committee,
94th Cong., 1st Sess., 373 (1975) and on Reform of the
Administrative Procedure Act before the Subcommittee on
Administrative Practice and Procedure, Senate Judiciary
Committee, April 28, 1976.
It should also be noted that for the Commission to
3
decide individual cases properly without setting forth
"general rules of law, will be difficult. This is an
exceedingly artificial requirement, designed, of course,
to keep the adjudicative function of the Commission as
closely as possible within congressional control.
b. Section 101 of the bill provides that the Com-
mission shall be composed of the Secretary of the Senate
and the Clerk of the House, ex officio and without the
right to vote, and six members appointed by the President
with the advice and consent of the Senate. Although the
holding of Buckley would be met by this provision since
the President must appoint the voting members, the con-
stitutional question still exists as to whether the two
legislative officers, the Clerk of the House and the
Secretary of the Senate, can remain on the Commission.
The President's bill provided for their elimination
from the Commission, and Assistant Attorney General
Scalia testified in the Senate hearing that their
presence on the Commission would be both unconstitutional
and an unwise precedent. The connection of the two ex
officio members to the legislature is, of course, even
closer than that of the members who the court held were
unconstitutionally appointed, since they are not only
appointed by Congress but also paid by it and removable
by it. See Federal Election Campaign Act Amendments,
1976, Hearing, supra, pp. 119-20, 135-36 (1976). At the
time that S. 3065 was reported by the Rules Committee,
three minority members took exception to the fact that
the bill failed to address the problems of legislative
officers serving on an executive commission. S. Rep.
No. 94-677, p. 62 (1976).
2. Enforcement problems.
The enforcement section, as amended (Sec. 109),
wouldweaken all of the present statutes dealing with
campaign finance violations (18 U.S.C. §§608-617) by
enabling the Commission to dispose of even willful
4
violations through nonjudicial means. We strenuously
object, in principle, to the concept that the existence
or non-existence of willful violations of criminal
statutes should be the subject of negotiation and
compromise with the Commission.
3. First Amendment issues.
Among other things, $112 of the bill would move
18 U.S.C. §610 to the Federal Election Campaign Act
(FECA), making it $321. It would alter the existing
exceptions to the general bar on corporate or union
contributions in the following ways:
a. It would impose restrictions on the categories
of persons which "segregated funds,' supported with
corporate or union assets, can lawfully solicit.
Generally, corporate funds would be allowed to solicit
only corporate stockholders and management or supervisory
personnel, and their families while union funds would be
allowed to solicit only union members and their families.
(Section 112 adding $321 (b) (4) (A) to the FECA). A
corporate fund nevertheless would be permitted to solicit
unionized employees and their families only twice a year,
and a union fund would be permitted to solicit management
personnel and stockholders only twice a year. Section 112
adding $321 (b) (4) (B) to the FECA. Neither union nor
corporate segregated funds are permitted to solicit
persons who are not employees or shareholders of the
business entity with which the fund in question (be it
union or corporate) is associated.
Restrictions such as these pose questions of
deprivation of associational rights protected by the
First Amendment. A 1948 decision, United States V.
C.I.O., 335 U.S. 106, 121, indicated that corporations
and unions had a First Amendment right to communicate with
members, stockholders or customers on subjects of mutual
political interest. In United States V. Pipefitters Local
#562, 434 F. 2d 1116, 1123 (8th Cir. 1970) reversed on
other grounds, 407 U.S. 385 (1972), the Court of Appeals
5
for the Eighth Circuit held that the right to maintain
segregated funds supported by unions or corporations was
essential to preventing the present election law (18
U.S.C. §610) from violating the First Amendment. Most
recently, in Buckley V. Valeo, supra, 96 S. Ct. 639,
fn. 31, the Court said: "Corporate and union resources
without limitation may be employed to administer these
[segregated] funds and to solicit contributions from
,employees, stockholders, and union members." The Court
was characterizing what the law permitted rather than
what the First Amendment required. However, the
discussion in the Buckley footnote is significant, since
the fact that such independent association was available
seems to have been a factor in the Court's conclusion
that the limits imposed on individual contributions by
the present 18 U.S.C. §608(b) are constitutional. Thus,
restricting the scope of solicitation of segregated funds
through the proposed legislation could undermine the
contribution limitations which this bill carries forward
into the FECA. Section 112, adding $320 to the FECA.
b. Proposed $321 (b) (a) (B), as added by $112 of the
bill, seems to place restrictions on the use of corporate
or union funds to engage in non-partisan activities. The
language of this subsection permits such expenditures
only if they are intended to defray the cost of voter
registration drives and get-out-the-vote campaigns and
only if they are directed at members of unions and their
families or stockholders and management personnel of
corporations. However, the reach of this provision is
different from the definition of "expenditure" contained
in the definitional section (2 U.S.C. $413 (f) (4) (B)
which purports to permit any non-partisan expenditures
"designed to encourage individuals to register to vote,
or to vote." The Conference Report purports to resolve
the conflict between the definition and the statutory
text by a compromise which would permit corporations and
unions to engage in non-partisan activities not restricted
as in $321, provided they do so as a joint venture with
some recognized non-partisan organization. 122 Cong.
6
Rec. (daily ed.) H 3594. It is not clear what weight
can be given the Conference Report in view of the lack
of statutory text to support it. Even if the compromise
in the Report is valid, $321 (b) (2) (B) could still be read
to prohibit such innocuous activities as the use of
corporate or union premises to provide a public forum
from which all qualified candidates could speak to the
public.
This is, of course, a constitutionally sensitive
area and there are cases indicating that the First
Amendment protects the right to engage in non-partisan
activities. Cort V. Ash, 496 F.2d 416, 426 (3d Cir.
1974) rev'd on other grounds, 422 U.S. 66; United States
V. Construction and General Laborers Local #264, 101 F.
Supp. 869, 875 (W.D. Mo., 1951); cf. United States V.
Auto Workers, 352 U.S. 567, 586 (1957); United States V.
Pipefitters, 434 F.2d 1116, 1121 (8th Cir., 1970), supra.
It is not therefore clear how far restrictions can
be applied to corporate or union political expenditures
which are truly nonpartisan. In such circumstances, the
Federal interest in regulating campaign expenditures is
slight compared to the limitation placed on the consti-
tutional right of expression and the performance of civic
duties.
The foregoing comments concerning the possible con-
stitutional problems involved in restricting both solici-
tations by segregated funds, non-partisan expenditures by
unions and corporations, were incorporated, in substance,
in a letter which the Criminal Division of the Justice
Department sent to the Federal Election Commission
commenting on one of the Commission's proposed Advisory
Opinions on these subjects. This letter, dated November
3, 1975, is in the public domain and was largely adopted
by the Commission in the widely discussed SUN-PAC
Advisory Opinion which resulted. Advisory Opinion
1975-23.
7
As the Court indicated in Buckley V. Valeo, delicate
balancing considerations are involved in deciding First
Amendment issues. At present, the law in this area is
not so clear that these First Amendment issues compel or
clearly warrant disapproval of the bill.
4. Statute of limitations.
The bill does not change the present three-year
statute of limitations. Since this Department must
usually wait until the Commission refers a matter to it
before it prosecutes, $313, this special limitation
period, added in 1974 (2 U.S.C. $455), is inadequate.
The general Federal statute of limitations is five years.
The bill, is, of course, long and complex. We have
not, at this juncture attempted to list all the legal
problems it may present, nor are all the items analyzed
above of equal importance.
The Department of Justice believes, however, that
the problems listed, as they relate to separation of
powers and enforcement, are sufficiently serious to
justify a Presidential veto of S. 3065.
Sincerely,
Wichael We Whlmann
Michael M. Uhlmann
Assistant Attorney General
Office of Legislative Affairs
GERALD FORD LIBERRY
THE WHITE HOUSE
WASHINGTON
May 10, 1976
MEMORANDUM FOR:
THE PRESIDENT
FROM:
PHILIP W. BUCHEN
F
SUBJECT:
Public and Congressional Reaction
to the Federal Election Campaign
Act Amendments of 1976
A solicitation was made by the U. S. Chamber of Commerce to
its members which urged them to oppose your signing the
above bill and to register their opposition by communicating
with you. The solicitation was impassioned and, in my opinion,
it misrepresented or overstated the effects on business of the
Amendments enacted by Congress.
Attached at Tab A is a summary of the business firms which
have registered opposition to your signing of the bill. I have
my doubts that people who sent communications in opposition to
the bill fully understand all aspects of the legislation or appreciate
the consequences of your attempting to get better legislation out
of Congress at this time.
Because of the campaign by the U. S. Chamber of Commerce to
arouse opposition, it is not surprising that we lack communication
in support of your signing. However, Jack Mills called to indicate
that he and his trade association think you should sign the bill.
The same is true of Bob Clark of Sante Fe Railroad, John Tope of
Republic Steel and Rod Markley of Ford Motor Company.
Attached at Tab B is a summary of opinions expressed by Members
of Congress who wrote to you in regard to the bill.
Attached at Tab C is a draft signing statement. Attached at Tab D
is a draft veto statement which is now being revised.
TORD
Attachments
TAB A
BUSINESS REACTION
VETO
Joseph B. McGrath
Forest Product Political Committee
J. W. Heiney
Indiana Gas Company Inc.
David E. Brown
Kemper Insurance and Financial Co.
Ian Macgregor
Amax Inc.
Richard Peake
Government & Public Affairs
PPG Industries, Inc.
E. F. Andrews
Allegheny Ludlum Industries, Inc.
Lyle Littlefield
Gerber Products Company
John Harper
Alcoa
Michael D. Dingman
Wheelabrator-Frye Incorporated
David Packard
Hewlett-Packard Company
Paul E. Thornbrugh
MAPCO, Inc.
Robert A. Roland
National Paint & Coatings Assoc.
John L. Spafford
Associated Credit Bureaus
William R. Roesch
Kaiser Steel Corporation
FORD i LIBRARY 9ERALD
- 2 -
VETO - Continued
James Maclaggan
Ampact
C. Boyd Stockmeyer
The Detroit Bank and
Trust Company
O. H. Delchamps
Delchamps, Inc.
E. J. Schaefer
Franklin Electric Co, Inc.
Russell H. Perry
Republic Financial Services, Inc.
Charles S. Mack
CPC International, Inc.
Vestal Lemmon
NAII
Samuel J. Damiano
Chamber of Commerce
Donald M. Kendall
PEPSICO
Robert F. Magill
General Motors Corporation
James A. Brooks
The Budd Company
Robert Ellis
Chamber of Commerce
Richard L. Lesher
Chamber of Commerce
Roger J. Stroh
United Fresh Fruit and Vegetable
Assn.
STATES E. FORD LIBRARY
- 3 -
VETO - Continued
James W. McLamore
National Restaurant Association
C. David Gordon
Association of Washington
Business
Raymond R. Becker
Interlake, Inc.
Bernard J. Burns
National Agents Political
Action Committee
Rodney W. Rood
Atlantic Richfield Company
Arthur F. Blum
Independent Insurance Agents
of America
John Pannullo
National Utility Contractors Assn.
Harry Roberts
True Drilling Co.
Michael R. Moore
Texas Retail Federation
Moody Covey
Skelly Political Action Committee
J. Kevin Murphy
Purolator Services, Inc.
Harold J. Steele
First Security Bank of Utah
Edwin J. Spiegel, Jr.
Alton Box Board Company
GERALD FORD LIBRART
Frank K. Woolley
Association of American
Physicians and Surgeons
Jack W. Belshaw
Wellman Industries Good
Government Fund
- 4 -
VETO - Continued
Robert P. Nixon
Franklin Electric
Arch L. Madsen
Bonneville International Corp.
Ellwood F. Curtis
Deere and Company
William E. Hardman
National Tool, Die and Precision
Machining Assn.
J. D. Stewart
DEPAC
Carl F. Hawver
National Consumer Finance Assoc.
Thomas P. Mason
Comsumer Bankers Assoc.
R. R. Frost
Piggly Wiggly Southern, Inc.
Paul J. Kelley
U-HAUL
Neil W. Plath
Sierra Pacific Power Company
Michael R. Moore
Texas Retail Federation
Malcolm E. Harris
Distilled Spirits Council of the U.S.
Lawrence L. Burian
National Air Transportation
Associations
Walter D. Thomas
FMC Corporation
Gerald W. Vaughan
Union Camp Corporation
- 5 -
James A. Gray
National Machine Tool
Builders Association
Donald V. Seibert
J. C. Penney Company, Inc.
Cosmo F. Guido
National Lumber and Building
Material Dealers Assoc.
R. W. Strauss
Stewart-Warner Corporation
Robert S. Boynton
National LIme Association
ORD
LIBRARY
TAB B
CONGRESSIONAL
SIGN
VETO
Speaker Carl Albert
Congressman Jake Garn
Congressman Bill Frenzel
Congressman Walter Mondale
Senator Robert Taft
FORD i LIBRARY GRAND
THE WHITE HOUSE
waSHINGTON
May 10, 1976
MEMORANDUM FOR:
THE PRESIDENT
FROM:
PHILIP W. BUCHEN
A.
SUBJECT:
Public and Congressional Reaction
to the Federal Election Campaign
Act Amendments of 1976
A solicitation was made by the U. S. Chamber of Commerce to
its members which urged them to oppose your signing the
above bill and to register their opposition by communicating
with you. The solicitation was impassioned and, in my opinion,
it misrepresented or overstated the effects on business of the
Amendments enacted by Congress.
Attached at Tab A is a summary of the business firms which
have registered opposition to your signing of the bill. I have
my doubts that people who sent communications in opposition to
the bill fully understand all aspects of the legislation or appreciate
the consequences of your attempting to get better legislation out
of Congress at this time.
Because of the campaign by the U. S. Chamber of Commerce to
arouse opposition, it is not surprising that we lack communication
in support of your signing. However, Jack Mills called to indicate
that he and his trade association think you should sign the bill.
The same is true of Bob Clark of Sante Fe Railroad, John Tope of
Republic Steel and Rod Markley of Ford Motor Company.
Attached at Tab B is a summary of opinions expressed by Members
of Congress who wrote to you in regard to the bill.
Attached at Tab C is a draft signing statement. Attached at Tab D
is a draft veto statement which is now being revised.
USA
Attachments
LIBRARY
TAB A
BUSINESS REACTION
VETO
Joseph B. McGrath
Forest Product Political Committee
J. W. Heiney
Indiana Gas Company Inc.
David E. Brown
Kemper Insurance and Financial Co.
Ian Macgregor
Amax Inc.
Richard Peake
Government & Public Affairs
PPG Industries, Inc.
E. F. Andrews
Allegheny Ludlum Industries, Inc.
Lyle Littlefield
Gerber Products Company
John Harper
Alcoa
Michael D. Dingman
Wheelabrator-Frye Incorporated
David Packard
Hewlett-Packard Company
Paul E. Thornbrugh
MAPCO, Inc.
Robert A. Roland
National Paint & Coatings Assoc.
John L. Spafford
Associated Credit Bureaus
William R. Roesch
Kaiser Steel Corporation
BERALD FORD LIBRAR,
- 2 -
VETO - Continued
James Maclaggan
Ampact
C. Boyd Stockmeyer
The Detroit Bank and
Trust Company
O. H. Delchamps
Delchamps, Inc.
E. J. Schaefer
Franklin Electric Co, Inc.
Russell H. Perry
Republic Financial Services, Inc.
Charles S. Mack
CPC International, Inc.
Vestal Lemmon
NAII
Samuel J. Damiano
Chamber of Commerce
Donald M. Kendall
PEPSICO
Robert F. Magill
General Motors Corporation
James A. Brooks
The Budd Company
Robert Ellis
Chamber of Commerce
Richard L. Lesher
Chamber of Commerce
Roger J. Stroh
United Fresh Fruit and Vegetable
Assn.
LIBRARY GERALD = FORD
- 3 -
VETO - Continued
James W. McLamore
National Restaurant Association
C. David Gordon
Association of Washington
Business
Raymond R. Becker
Interlake, Inc.
Bernard J. Burns
National Agents Political
Action Committee
Rodney W. Rood
Atlantic Richfield Company
Arthur F. Blum
Independent Insurance Agents
of America
John Pannullo
National Utility Contractors Assn.
Harry Roberts
True Drilling Co.
Michael R. Moore
Texas Retail Federation
Moody Covey
Skelly Political Action Committee
J. Kevin Murphy
Purolator Services, Inc.
Harold J. Steele
First Security Bank of Utah
Edwin J. Spiegel, Jr.
Alton Box Board Company
Frank K. Woolley
Association of American
Physicians and Surgeons
FORD LIGRARY
Jack W. Belshaw
Wellman Industries Good
Government Fund
- 4 -
VETO - Continued
Robert P. Nixon
Franklin Electric
Arch L. Madsen
Bonneville International Corp.
Ellwood F. Curtis
Deere and Company
William E. Hardman
National Tool, Die and Precision
Machining Assn.
J. D. Stewart
DEPAC
Carl F. Hawver
National Consumer Finance Assoc.
Thomas P. Mason
Comsumer Bankers Assoc.
R. R. Frost
Piggly Wiggly Southern, Inc.
Paul J. Kelley
U-HAUL
Neil W. Plath
Sierra Pacific Power Company
Michael R. Moore
Texas Retail Federation
Malcolm E. Harris
Distilled Spirits Council of the U.S.
Lawrence L. Burian
National Air Transportation
Associations
Walter D. Thomas
FMC Corporation
BERALD FORD LIGRARY
Gerald W. Vaughan
Union Camp Corporation
- 5 -
James A. Gray
National Machine Tool
Builders Association
Donald V. Seibert
J. C. Penney Company, Inc.
Cosmo F. Guido
National Lumber and Building
Material Dealers Assoc.
R. W. Strauss
Stewart-Warner Corporation
Robert S. Boynton
National LIme Association
FORD LIBRARY
TAB B
CONGRESSIONAL
SIGN
VETO
Speaker Carl Albert
Congressman Jake Garn
Congressman Bill Frenzel
Congressman Walter Mondale
Senator Robert Taft
FORD is QERALO LIBRARY
May 10, 1976
DRAFT SIGNING STATEMENT
On October 15, 1974, I. signed into law the Federal
Election Campaign Act Amendments of 1974 which made far-
reaching changes in the laws affecting federal elections
and election campaign practices. This law created a
Federal Election Commission to administer and enforce a
comprehensive regulatory scheme for federal campaigns.
On January 30, 1976, the United States Supreme Court
ruled that certain features of the 1974 law were
unconstitutional and, in particular, declared that the
FEC could not constitutionally exercise enforcement and
other executive powers unless the manner of appointing
the Members of the Commission was changed.
Today, I am signing into law the Federal Election
Campaign Act Amendments of 1976. These Amendments will
duly reconstitute the Commission SO that the President shall
appoint all six of its Members, by and with the advice
and consent of the Senate.
The failure of the Congress to reconstitute the
Commission earlier and the resulting deprivation of
essential Federal matching fund monies has so substantially
FORD & 03RALD LIGRARY
- 2 -
impacted on seven of the candidates seeking nomination
for the Presidency by their respective parties that
they felt impelled to seek relief on two occasions from
the Supreme Court. The Court determined that it was
not in a position to provide that relief.
Further delay in reconstituting the Commission
would have an even more egregious and unconscionable
impact on these candidates and on the conduct of
their campaigns. As President, I cannot allow the
outcome of the primary elections to be influenced
by the failure of candidates to have the benefits
and protections of laws enacted before the campaigns and
on which they have relied in seeking their respective
nominations.
Also, further delay would undermine the fairness
of elections this year to the U. S. Senate and the
House of Representatives, as well as to the Office of
President, because effective regulation of campaign
practices depends on having a Commission with valid
rulemaking and enforcement powers. It is most
important to maintain the integrity of our election
process for all Federal offices SO that all candidates
LIBRARY GENALD R. FORD
- 3 -
and their respective supporters and contributors are
made to feel bound by enforceable laws and regulations
which are designed to overcome questionable and unfair
campaign practices.
The amendments have received bi-partisan support
in both Houses of Congress and by the Chairpersons of
both the Republican National Committee and the
Democratic National Committee. This support provides
assurance that persons strongly interested in the
future of both major political parties find the law
favors neither party over the other.
Accordingly, in addition to approving this legisla-
tion, I am submitting to the Senate for its advice and
consent, the nominations of the six current members
of the Commission as members of the new Commission.
I trust that the Senate will act with dispatch to
confirm these appointees, all of whom were previously
approved by the Senate, as well as the House, under
the law as it previously existed.
Notwithstanding my readiness to take these steps,
I do have serious reservations about certain aspects
of the present amendments. Instead of acting promptly
to adopt the provisions which I urged -- simply to
FORD & OERALD LIBRARY
- 4 -
reconstitute the Commission in a constitutional
manner -- the Congress has proceeded to amend previous
campaign laws in a confusing variety of ways.
The result is that the Commission must take
additional time to consider the effects of the present
amendments on its previously issued opinions and
regulations. The amendments lack clarity in many
respects and thus may lead to further litigation.
Those provisions which purport to restrict communications
and solicitations for campaign purposes by unions,
corporations, trade associations and their respective
political action communities are of doubtful consti-
tutionality and will surely give rise to litigation.
Also, the Election Campaign Act, as amended, seriously
limits the independence of the Federal Election
Commission from Congressional influence and control.
In one important respect, the present limitations
depart substantially from the accepted goal of making
the new Commission, which will have considerable
discretionary authority over the interpretation and
application of Federal election campaign laws,
independent from the control of incumbents in the
FORD & QERALD LIBRARY
- 5 -
exercise of that discretion. Specifically, it would
permit either House of Congress to veto regulations
which the Commission issues.
On numerous occasions, Presidents have stated
that provisions of this sort, allowing the Congress
to veto regulations of an executive agency, are an
unconstitutional violation of the doctrine of
separation of powers. I have discussed this matter
with the Attorney General, and it is our hope that
clear judicial resolution of the constitutional point
can soon be obtained. In the meantime, I hope and
expect that the Commission will exercise its discre-
tion with the degree of independence which the
original proponents of this legislation and, I believe,
the public expect and desire.
I look to the Commission, as soon as it is
reappointed, to do an effective job of administering
the campaign laws equitably but forcefully and in a
manner that minimizes the confusion which is caused
by their added complexity. In this regard, the Commission
will be aided by a newly provided comprehensive and
flexible civil enforcement mechanism designed to
facilitate voluntary compliance through conciliation
agreements and to penalize non-compliance through
DERALD FORD LIBRARY
- 6 -
means of civil fines.
In addition, the new legislation refines the
provisions intended to control the size of contributions
from a single source by avoiding proliferation of politi-
cal action committees which are under common control,
and it strengthens provisions for reporting money spent
on campaigns by requiring disclosure of previously
unreported costs of partisan communications intended to
affect the outcome of Federal elections.
I would have much preferred postponing consideration
of needed improvements to the Federal Election Campaign
laws until after the experience of the 1976 elections
could be studied. I still plan to recommend to the
Congress in 1977 passage of legislation that will
correct problems created by the present laws and will
make additional needed reforms in the election process.
FORD & LIBRARI
DRAFT VETO
Statement By the President
Almost three months ago, the United States
Supreme Court ruled that certain provisions of the
Federal Election Campaign Laws were unconstitutional,
and, in particular, declared that the FEC could not
constitutionally exercise enforcement and other
executive powers unless the manner of appointing
the Members of the Commission were changed. At the
same time, the Court made it clear that the Congress
could remedy this problem by simply reconstituting
the Commission and providing for Presidential
appointment of the Members of the Federal Election
Commission.
Although I fully recognized that other aspects
of the Court's decision, as well as the original
election law itself, mandate a critical and
comprehensive review of the campaign laws, I
realized that there would not be sufficient time
for such a review to be completed during the time
allotted by the Court which would result in any
meaningful reform. Moreover, I recognized the
obvious danger that various opponents of campaign
reform and other interests -- both political and
otherwise -- would exploit the pressures of an
&
FORD
election year to seek a number of piecemeal, ad
hoc
BE
LIBRARY
2
and hastily considered changes in the election laws.
In accordance with the Court's decision, I submitted
remedial legislation to Congress for immediate action
which would simply and immediately have reconstituted
the Commission for this election, while at the same
time, ensuring full scale review and reform of the
election law next year with the added benefit of the
experience to be gained by this election. The actions
of the Congress in ignoring my repeated requests for
immediate action and instead enacting a bill which
would fundamentally destroy the independence of the
Commission, have confirmed my worst fears.
The most important aspect of any revision of
the election laws is to insure the independence of
the Federal Election Commission. This bill provides
for a one-house, section-by-section veto of
Commission regulations - - a requirement that is
unconstitutional as applied to regulations to be
proposed and enforced by an independent regulatory agency.
Such a permanent restriction would have a crippling
influence on the freedom of action of the Commission
and would only invite further litigation.
GERALD 1. FORD
3
Moreover, the bill would also introduce
certain new provisions into the election law which
may be of doubtful constitutional validity, would
inadvertently affect other federal legislation, and
would at the same time change many of the rules
applicable to the current election campaigns of all
federal candidates. In the meantime, campaigns
which were started in reliance on the funding and
regulatory provisions of the existing law all are
suffering from lack of funds and lack of certainty
over the rules to be followed this year. The
complex and extensive changes of this bill will
only create additional confusion and litigation
and inhibit further meaningful reform. Even those
changes which I would consider desirable and an
improvement over existing law would be best
considered from the perspective of a non-election
year with full and adequate hearings on the merits
and impact of these revisions.
Accordingly, I am returning Senate bill 3065
to the Congress without my approval and again ask
the Congress to pass the simple extension of the life
of the Commission. Tbe American people want an
1. FORD LIBRARY
- 4 -
independent and effective Commission. All candidates
must have certainty in the election law and all
Presidential candidates need the federal nutching
funds which have been unduly held up by those who
would exploit the Court's decision for their own
self-interest. At this late stage in the 1976
elections, it is critical that the candidates be
allowed to campaign under the current law with the
supervision of the Commission in a fair and equitable
manner absent the disruptive influence of hastily
enacted changes.
FORD is LIBRARY
ACTION MEMORANDUM
140 NO.:
Date: May 5
Time: 400pm
FOR ACTION:
Phil Buchen
CC (for information): Jim Cavanaugh
Robert Hartmann
Jack Marsh
Dick Parsons
Max Friedersdorf
Bill Seidman
FROM THE STAFF SECRETARY
DUE: Date: May 6
Time: noon
SUBJECT:
S. 3065 - Federal Election Campaign Act Amendments of
1976
ACTION REQUESTED:
For Necessary Action
For Your Recommendations
Prepare Agenda and Brief
Draft Reply
X
For Your Comments
Draft Remarks
REMARKS:
Please return to Judy Johnston, Ground Floor West Wing
Sign S. 3065
Veto S. 3065
P.W.B.
PLEASE ATTACH THIS COPY TO MATERIAL SUBMITTED.
FORD is GERALD LIBRANY
It you have any questions or if you anticipate a
delay in submitting the required material, please
Jimes M. Caban
telephone the Staff Secretary immediately.
For the Tresides:
5/4/76
DRAFT SIGNING STATEMENT
On October 15, 1974, I signed into law the Federal
Election Campaign Act Amendments of 1974 which made far-
reaching changes in the laws affecting federal elections
and election campaign practices. This law created a
Federal Election Commission to administer and enforce a
comprehensive regulatory scheme for federal campaigns.
On January 30, 1976, the United States Supreme Court
ruled that certain features of the 1974 law were
unconstitutional and, in particular, declared that the
FEC could not constitutionally exercise enforcement and
other executive powers unless the manner of appointing
the Members of the Commission was changed.
Today, I am signing into law the Federal Election
Campaign Act Amendments of 1976. These Amendments will
duly reconstitute the Commission so that the President shall
appoint all six of its Members, by and with the advice
and consent of the Senate.
The failure of the Congress to reconstitute the
Commission earlier and the resulting deprivation of
essential Federal matching fund monies has so substantially
LIBRARY GERALD P. FORD
- 2 -
impacted on seven of the candidates seeking nomination
for the Presidency by their respective parties that they
felt impelled to seek relief on two occasions from the
Supreme Court. The Court determined that it was not in
a position to provide that relief.
Further delay in reconstituting the Commission would
have an even more egregious and unconscionable impact on
these candidates and on the conduct of their campaigns.
As President, I cannot allow the outcome of the primary
elections to be influenced by the failure of candidates
to have the benefits and protections of laws enacted
before the campaigns on which they have relied in
standing for nomination.
Also, further delay would undermine the fairness
of elections this year to the U. S. Senate and the House
of Representatives, as well as to the Office of the
President, because effective regulation of campaign
practices depends on having a Commission with valid rule-
making and enforcement powers. It is most important to
maintain the integrity of our election process for all
Federal offices that all candidates and their respective
supporters and contributors are made to feel bound by enforceabl
laws and regulations which are designed to overcome question
and unfair campaign practices.
- 3 -
The amendments have received bi-partisan support
in both Houses of Congress and by the Chairpersons of
both the Republican National Committee and the Democratic
National Committee. This support provides assurance that
persons strongly interested in the future of both major
political parties find the law favors neither party over
the other.
Accordingly, in addition to approving this legislation,
I am submitting to the Senate for its advice and consent,
the nominations of the six current members of the Commission
as members of the new Commission. I trust that the Senate
will act with dispatch to confirm these appointees, all
of whom were previously approved by the Senate, as well as
the House, under the law as it previously existed.
Notwithstanding my readiness to take these steps,
I do have serious reservations about certain aspects
of the present amendments. The Congress instead of
acting promptly to adopt the provisions which I urged --
simply to reconstitute the Commission in a constitutional
manner -- has proceeded to amend previous campaign laws
in a confusing variety of ways.
FORD is GERALD LIDR.
-4- -
The result is that the Commission will have to take
additional time to consider the effects of the present
amendments on its previously issued opinions and regulations.
The amendments, as drafted, lack clarity in many respects
and thus may lead to further litigation. These provisions
which purport to restrict communications and solicitations for
campaign purposes by unions, corporations, trade associations
and their respective political action communities are of doubtful
constitutionality and will surely give rise to litigation. Also,
the Election Campaign Act, as amended, seriously limits the
independence of the Federal Election Committee from congressional
influence and control.
On numerous occasions, my predecessors and I have stated
that provisions such as those contained in this legislation
that allow one house of Congress to veto the regulations of an
Executive agency are an unconstitutional violation of the
doctrine of separation of powers. In passing the present
legislation under which candidates who serve in the Congress
reserve to themselves the right to reverse the decisions of
the Commission in this fashion, the Congress has failed to
assure that the agency to administer and enforce the Federal election
campaign laws can be truly independent in the exercise of its
regulatory functions.
LIBRARY
-5-
For this reason , I have directed the Attorney General
to take such steps at the appropriate time as may resolve
the Constitutional issues which will arise if either
House of Congress chooses to interfere with the indepen-
dence of the Commission by exercise of the Congressional
one-house veto over Commission rules or regulations.
I look to the Commission, as soon as it is reappointed,
to do an effective job of administering the campaign laws
as now amended equitably but forcefully and in a manner
that minimizes the confusion which is caused by their
complexity. In this regard, the Commission will be aided
by a newly provided comprehensive and flexible civil
enforcement mechanism designed to facilitate voluntary
compliance through conciliation agreements and to penalize
non-compliance through means of civil fines.
In addition, the new legislation refines the provisions
intended to control the size of contributions from a single
source by avoiding proliferation of political action committees
which are under common control, and it strengthens provisions
for reporting money spent on campaigns by requiring disclosure
of previously unreported costs of partisan communications
intended to affect the outcome of Federal elections.
BERRED FORD LIBRARY
- -6-
I would have much preferred postponing consideration
of needed improvements to the Federal Election Campaign
laws until after the experience of the 1976 elections
could be studied. Yet, I do welcome certain of the
changes made by the present bill which apprear to go part
way in making improvements. I still plan to recommend to
the Congress in 1977 passage of legislation that will
correct problems created by the present laws and will make
additional needed reforms in the election process.
LIBRARY BENALD FORD
THE WHITE House
WASHINGTON
5/12
Barry cleared
this with
mike
in your absence.
FEC - UNCONSTITUTIONAL
Q.
The President, in his statement, says that the FEC
amendments are unconstitutional. Why did he sign
them into law?
A. Although there are weaknesses in the bill, the Presi-
dent, in his statement, said that, "
I have never-
theless concluded that it is in the best interest of
the Nation that I sign this legislation. Considerable
effort has been expended by members of both parties
to make this bill as fair and balanced as possible."
The President went on to point out in his statement
that the amendments jeopardize the independence of
the Federal Election Commission by permitting either
House of Congress to veto regulations which the Com-
mission issues. The President stated that, in his
opinion, this provision is unconstitutional and he
has directed the Attorney General to challenge it.
The entire law is not unconstitutional, and indeed
the Supreme Court so ruled on January 30. The uncon-
stitutional provisions -- particularly relating to
the one-House veto -- can be either corrected by new
legislation or perhaps by court action.
In the meantime, the Commission, once reconstituted,
can continue to insure that elections are run in the
fair manner.
BERALD
WITH
&
FORD
GERALD
M.D.
LIDRARY
5/12/76
FIC
THE WHITE HOUSE
WASHINGTON
May 21, 1976
Dear Mr. Goodmon:
Thank you for your letter of May 10 in which you extend to me an
opportunity to reply to a recent Viewpoint Editorial (no. 3340) on
the Federal Election Campaign Act Amendments of 1976.
I appreciate your thoughtfulness in this regard and I am pleased
to accept this opportunity to respond. I have enclosed a copy of
the President's signing statement which I believe explains both the
effects of this Bill and the reasons underlying the President's
decision to sign it. I trust that you will consider the President's
statement as an appropriate response for an editorial broadcast.
Again, thank you for your courtesy.
Sincerely,
Philip (W. W. Buchen Buchen
Counsel to the President
Mr. James F. Goodmon
President
Capitol Broadcasting Co., Inc.
P.O. Box 12000
2619 Western Boulevard
Raleigh, North Carolina 27605
GERALE n. YORD
THE WHITE HOUSE
WASHINGTON
October 1, 1976
MEMORANDUM
TO:
THE PRESIDENT
FROM:
MILDRED LEONARD L
RE:
"MOTORCYCLERS FOR FORD COMMITTEE"
David Mehney has the following suggestion to assist in your campaign.
He would like your approval of this idea and needs your response by
Wednesday, October 6th:
Under the heading of "Motorcyclers for Ford Committee,"
which would consist of Dave Mehney and Ivan Wager, posters
and a letter supporting you will be sent to the motorcyle
dealers throughout the country.
On the posters for display in the dealerships Dave would
like to have photographs of Jack or Steve (or both) showing
them riding motorcycles. NO PARTICULAR MOTORCYCLE COMPANY
WOULD BE ADVERTISED. In fact, Dave said the photos would
definitely not show any brand names.
Dave Mehney and Ivan Wager want to do this on their own and
at their own expense. He recognizes that the cyclists'
endorsement of you might not go well with many people who
do not like motorcycles. But those same people are not
likely to go into the dealers where the posters and materials
would be displayed.
cc:
Mr. Buchen-per President's instructions for discussion with him.
Mr. Baker -
"
"
"
"
"
"
"
Mr. Cheney "
"
"
"
"
"
"
GERALO FORD LIBRARY