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The original documents are located in Box G04, folder "Reagan, Ronald, 10/1975-12/1975
(1)" of the President Ford Committee Campaign Records 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States of America his copyrights in all of his unpublished writings in National Archives collections.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.
Some items in this folder were not digitized because it contains copyrighted
materials. Please contact the Gerald R. Ford Presidential Library for access to
these materials.
LET THE PEOPLE RULE
(Remarks by the Honorable Ronald Reagan, former
Governor of California, to the Executive Club of
Chicago, McConnick Place, Chicago, Illinois,
Friday, September 25, 1975.)
In his first Inaugural, nearly a century and three-quarters ago,
President Themas Jefferson defined the aims of his administration: "A
wise and frugal government", he said, "which shall restrain men from
injuring one another, shall leave them otherwise free to regulate their
cwn pursuits of industry and improvement, and shall not take from the
mouth of labor the bread it has earned - - This is the sum of good
government.
11
Jefferson believed the people were the best agents of their own
destinies, and that the task of government was not to direct the people
but to create an environment of ordered freedom in which the people could
pursue those destinies in their own way. But he also knew that from the
very beginning the tendency of government has been CO become player as
well as unpire. "What has destroyed liberty and the rights of men in
every government that has ever existed under the sun?" Jefferson asked.
"The generalizing and concentrating all cares and powers into one body. "
If Jefferson could return today, I doubt that he would be surprised
either at what has happened in America, or at the result. When a nation
loses its desire or ability to restrain the growth and concentration of
power, the floodgates are open and the results are predictable.
Fiscal Year 1976 ends four days before our bicentennial. In this
fiscal year, government at all levels will absorb 37 percent of the
Gross National Product and 44 percent of our total personal income. We
destroy the value of our pensions and savings with an inflation rate that
soars to 12 percent a year, at the same time we suffer unemployment rates
of eight and nine percent.
Every minute I speak to you the Federal Government spends another
$700,000. I'd stop talking if they'd stop spending, but Washington is
spending a billion dollars every day and goes into debt a billion and a
third dollars every week. I don't think it would surprise Jefferson to
learn that real spendable weekly income of the average American worker is
lower than it was a decade ago - -- even though in these 10 years that
same worker has increased his productivity 23 percent. AS Jefferson said,
that is taking from the mouth of labor the bread it has earned.
If government continues to take that bread for the next 25 years at
the same rate of increase it has in the last 40, the percent of GNP govern-
ment consumes will be 66 percent - - two-thirds of all our output - -
by the and of this century. A single proposal now before Congress, Senator FORD
Kennedy's national health insurance plan, would push the share of GP
consumed by government from 37 to more than 45 percent, all Ly itself.
GERALD
LIBRARY
This absorption of revenue by all levels of government, the alaming
rate of inflation, and the rising toll of unemployment all stem from a
single source: The belief that government, particularly the Federal
Government, has the answer to our ills, and that the proper method of
dealing with social problems is to transfer power from the private to the
public sector, and within the public sector from state and local govern-
ments to the ultimate power center in Washington.
This collectivist, centralizing approach, whatever name or party
label it wears, has created our economic problems. By taxing and consuming
an ever-greater share of the national wealth, it has imposed an intolerable
burden of taxation on American citizens. By spending above and beyond
even this level of taxation, it has created the horrendous inflation of
the past decade. And by saddling our economy with an ever-greater burden
of controls and regulations, it has generated countless economic problems,
from the raising of consumer prices to the destruction of jobs, to choking
off vital supplies of food and energy.
As if that were not enough, the crushing weight of central government
has distorted our federal system and altered the-relationship between the
levels of government, threatening the freedom of individuals and families.
The states and local communities have been demeaned into little more than
administrative districts, bureaucratic subdivisions of Big Brother govern-
ment in Washington, with programs, spending priorities, and tax policies
badly warped or dictated by federal overseers. Thousands of towns and
neighborhoods have seen their peace disturbed by bureaucrats and social
planners, through busing, questionable education programs, and attacks on
family unity. Even so liberal an observer as Richard Coodwin could identify
what he correctly called "the most troubling political fact of our age:
that the growth in central power has been accompanied by a swift and con-
tinual diminution in the significance of the individual citizen, transform-
ing him from a wielder into an object of authority."
It isn't good enough to approach this tangle of confusion by saying
we will try to make it more efficient or "responsive, or modify an aspect
here or there, or do a little less of all these objectionable things than
will the Washington bureaucrats and those who support them. This may have
worked in the past, but not any longer. The problem must be attacked at
its source. All Americans must be rallied to preserve the good things that
remain in our society and to restore those good things that have been lost.
We can and we must reverse the flow of power to Washington; not
simply slow it, or paper over the problem with attractive phrases or cos-
matic tinkering. This would give the appearance of change but leave the
basic machinery untouched. In fact, it reminds me or a short fable of
Tolstoy's: "I sit on a man's back, choking him and making him carry me,
and yet assure myself and others that I am very sorry for him and wish to
lighten his lead by all possible means - - except by getting off his back. "
What I propose is nothing less than a 'systematic transfer of authority
and resources to the states - - a program of creative federalism for
America's third century.
&
FORD
GERALD
LIBRARY
3
Federal authority has clearly failed to do the job. Indeed, it has
created more problems in welfare, education, housing, food stamps, Medicaid,
community and regional development, and revenue sharing, to name a few.
The sums involved and the potential savings to the taxpayer are large.
Transfer of authority in whole or part in all these areas would reduce the
outlay of the Federal Government by more than $90 Billion, using the spend-
ing levels of Fiscal 1976.
With such a savings, it would be possible to balance the Federal
budget, make an initial five-billion-dollar payment on the national debt,
and cut the Federal personal income tax burden of every American by an
average of 23 percent. By taking such a step we could quickly liberate.
much of our economy and political system from the dead hand of Federal
interference, with beneficial impact on every aspect of our daily lives.
Not included in such a transfer would be those functions of govern-
ment which are national rather than local in nature, and others which are
handled through trust arrangements outside the general revenue structure.
In addition to national defense and space, some these areas are Social
Security, Medicare, and other old-age programs; enforcement of Federal law;
veterans affairs; some aspects of agriculture, energy, transportation, and
environment; TVA and other multi-state public-works projects; and certain
types of research.
Few would want to end the Federal Government's role as a setter of
national goals and standards. And no one would want to rule cut a role
for Washington in those few areas where its influence has been important
and benign; crash efforts like the Manhattan and Apollo projects, and
massive self-liquidating programs like the Homestead Act and the land-grant
colleges Certainly the Federal Government must take an active role in
assuring this nation an adequate supply of energy.
Turning back these programs would not end the process of reform in
Washington. In the immediate years ahead:
-- In our regulatory agencies dealing with non-monopoly industries,
we must set a date certain for an end to Federal price fixing and
an end to all Federal restrictions on entry.
--- We must take steps to keep the spending and borrowing of off-
budget agencies under control.
--- We must reform our major trust funds to ensure solvency and
accountability. Particularly important is the need to save
Social Security from the colossal debt that threatens the
future well-being of millions of Americans, even while it
overtaxes our workers at a growing and exorbitant rate.
We must put a statutory limit on the growth of our money
supply, so that growth does not exceed the gain in productivity.
Only in this way can we be sure of returning to a strong dollar.
And we must radically simplify our method of tax collection,
SO that every American can fill out his return in a matter of
FORD
minutes without legal help. Canuine tax reform would also make
it more rewarding to save than to borrow, and encourage a wider
diffusion of ownership to America's workers.
GERALD
In the months ahead, T will say more on each of these-mvijor areas of
transfer of Federal programs to the states would mean.
It would be a giant step toward solving the problem of inflation that
is sapping the strength OF our economy and cheating American wage-earners
and pensioners. There is no mystery about inflation. It is caused by
spending money that has not yet been earned. Without the enormous pressure
of a 60-to-80-billion-dollar deficit, the Federal Reserve System would have
no mandate to pump too many dollars into the economy - - which is the
ultimate cause of inflation. The Federal deficit provides the chief motive
for the debauching of our dollar.
Add to this the gain in purchasing power that will accrue to all
Americans from a sharp reduction in Federal income taxes - - the biggest
spending burden the average family must absorb. Indeed, taxes of all kinds
are a bigger family expense item than food, shelter and clothing combined.
Last year, according to a study by the Joint Economic Committee of Congress,
income taxes at all levels rose by 26.5 percent -- the largest increase of
any item in the family budget. By far the greatest part or this growing
load of taxation is the Federal personal income whose bite ets sharper
as inflation pushes taxpayers into higher surtax brackets. Covernment
doesn't have to raise the tax rate to profit by inflation. The progressive
income tax is based on the number of dollars earned, not their purchasing
power; thus a cost-of-living pay increase results in a tax increase.
An immediate tax cut, some of which might have to be balanced by
tax rises in the states, would be only the beginning of the savings that
could be achieved. When we begin making payments on the national debt,
we will also Legin making further reductions in the tax burden. American
taxpayers are currently being billed an average of one billion dollars
every ten days just to pay interest on the debt. As the debt is retired,
we can progressively reduce the level of taxation required for interest
payments. Senator Hubert Humphrey, in excusing government spending, once
said, "A billion here and a billion there -- it adds up." Well, it can
work the other way 'round.
With the spending reduction I propose, the Federal Covernment will no
longer be crowding capital markets to finance its deficits. That will make
available billions in new capital for private investment, housing starts,
and job creation -- and the interest rates will come down.
The transfer I propose does not mean that the specific programs in
question are not worthwhile. Many are, though in my opinion many others
are not. But the point is that all these programs are losing effectiveness
because of the Federal Government's pre-emption of levels of government
closer to the problems, coupled with Washington's ability to complicate
everything it touches. The decision as to whether programs are or are not
worthwhile -- and whether to continue or cancel -- will be placed where it
rightfully belongs: with the people of our states.
FORD & LIBRARY
S
It is theoretically possible that local governments will simply
duplicate programs as they now exist, and if that is what the people in
the states desire, that is exactly what will and should occur. Certainly
the bureaucrats who run them now will be available, for they will have no
further work in Washington.
I think it likely, however, that some of the more worthwhile programs
will be retained essentially as they are, many will be dropped, and others
may be medified. But all the surviving programs will be run at much lower
cost than is presently the case.
The present system is geared for maximum expenditure and minimum
responsibility. There is no better way to promote the lavish outlay of
tax money than to transfer program and funding authority away from state
and local governments to the Federal level. This ensures that recipients of
aid will have every reason to spend and none to conserve. They can get
political credit for spending freely, but don't have to take the heat for
imposing the taxes. The French economist Bastiat, 100 years ago, said,
"Public funds seemingly belong to-no one and the traptation to-bestow them
on someone is irresistible. "
So long as the system continues to function on this basis, we are going
to see expenditures at every level of government soar out of sight. The
object is to reverse this: to tie spending and taxing functions together
wherever feasible, so that those who have the pleasure of giving away tax
dollars will also have the pain of raising them. At the same time we can
sort out which functions of government are best performed at each level.
And that process, I hope, would be going on between each state and its local
governments at the same time.
The transfer of spending authority to Washington blurs the difference
between wasteful states and prudent ones and this too destroys incentives
toward economy. If a state spends itself into bankruptcy on welfare, under
the present system it is bailed out when Washington picks up the tab;
indeed, many Federal programs are geared toward encouraging this kind of
behavior, bestowing greater aid in proportion to spending levels imposed by
the states. The way to get more is to spend more.
By the same token, efforts at state economy are punished under the
present system. A state that keeps its fiscal house in order and, for
example, prevents the welfare problem from getting out of hand will find it
derives no benefits from its action. It will discover, as we did in
California, that efforts to impose some conton sense in welfare will run
afoul of Federal bureaucrats and guidelines. Its citizens will be called
upon to pay in Federal taxes and inflation for other states that don't
curb their spending.
FORD
GERALD
LIBRARY
6
Another benefit of localizing these programs is that state and local
governments are more accessible to the local citizen, and in most cases
prevented by statute from going in debt. When tax increases are proposed
in state assemblies and city councils, the average citizen is better able
to resist and to make his influence felt. This, plus the ban on local
deficits, bends to put an effective Jid on spending.
Federal financing is the spenders' method of getting around these
restraints. Taxes are imposed at a level where the government is far away
and inaccessible to the average citizen. The connection between big spending
and high taxes is hidden, and the ability to run up deficits and print more
money makes efforts to control the problem through the taxing side alone
almost meaningless.
The proposals I have outlined will bring howls of pain from those who
are benefiting from the present system, and from many more who think they
are. But as another Frenchman, Thiers, said, For those who govern, the
first thing required is indifference to newspapers. We must turn a deaf
ear to the screams of the outraged if this nation and this way of life are
to survive. The simple fact is the producing class in this nation is being
drained of its substance by the non-producers -- the taxpayers are being
victimized by the tax consumers. We may be sure that those in Washington
and elsewhere whose life style depends on consuming other people' earnings
while working people struggle to make ends meet, will fight to the last
limousine and curpeted anteroom.
But if we ignore the taxers and the centralizers and do the things I
know we can do, we'll de more than survive: we will inaugurate a new era of
American diversity.
Take education. The United States built the greatest system of public
education the world has ever known -- not at the Federal level, not even at
the state level, but at the level of the local school district. Until a
few years aço, the people had direct control over their schools -- how much
to spend, what kind of courses to offer, whom to hire. IS it an accident
that as this local control gave way to funding and control at the Federal
and state level, reading and other test scores have declined? It has
just recently been announced that scores in college entrance exams have been
nose-diving for 10 years and this year took the greatest plunge of all. And
yet, spending on education in that same period has been sky-rocketing. The
truth is, a good education depends far more on local control than on the
amount of money spent.
There is no question but that under local agencies certain abuses took
place and certainly they needed to be cured --- sometimes by Federal inter-
vention. This was certainly true of racial segregation in the South. But
&
FORD
GERALD
LIBRARY
now that according to some estimates the South is the most interrated area
or the country --- now that there is an ongoing enforcement structure in
the Department of Justice -- is there any further reason to deny local
control and funding OF our schools?
Or take welfare. For years, the fashionable voices have been calling
for a Federal takeover of welfare. (Well, the old-age portions of welfare
have been taken over -- and in the first 18 months, more than a billion
dollars have Been paid out by mistake!) If there is one area of social
policy that should be at the most local level of government possible, it is
walfare. It should not be nationalized -- it should be localized. If
Joe Doaks is using his welfare money to go down to the pool hall and drink
beer and gamble, and the people on his block are paying the bill, Joe is
apt to undergo a change in his life style. This is an example of why our
task force in California found that the smaller and more local government
becomes, the less it costs. The more government is localized, the less
you will see a situation like the one in Massachusetts, where a mother of
six was receiving, through cash and services, the equivalent of a $20,000
earned income. That is twice the average family income OF the state.
The truth is that people all over America have been thinking about all
of these problems for years. This country is bursting with ideas and
creativity, but a government run by bureaucrats in Washington has no way to
respond. If we send the power back to the states and localities, we'll
find out how to improve education, because some districts are going to
succeed with some ideas and other districts are going to fail with others,
and the word will spread like wildfire. The more we let the people decide,
the more find out about what policies work and what policies don't
work. Successful programs and good local governments will attract bright
people like magnets, because the genius of federalism is that people can
vote with their feet. If local or state governments grow tyrannical and
costly, the people will move. If the Federal Covernment is the villain, there
is no escape.
I am calling also for an end to giantism, for a return to the human scale --
the scale that human beings can understand and cope with; the scale of the
local fraternal lodge, the church congregation, the block club, the farm
bureau. It is the locally-owned factory, the small businessran who personally
deals with his customers and stands behind his product, the farm and consumer
cooperative, the town or neighborhood bank that invests in the community,
the union local.
In government, the human scale is the town council, the board of select-
men, and the precinct captain.
It is this activity on a small, human scale that creates the fabric of
community, a framework for the creation of abundance and liberty. The human
scale nurtures standards of right behavior, a prevailing ethic of what is
right and what is wrong, acceptable and unacceptable.
FORD LIBRARY
8
Three and a half centuries ago, peoples from across the sea began
to cross to this great land, searching for freedom and a sense of
community they were losing at home. The trickle became a flood, and we
spread across a vast, virtually unpeopled continent and caused it to bloom
with homesteads, villages, cities, great transportation systems, all the
emblems of prosperity and success. And we did this without urban renewal
or an area redevelopment plan. We became the most productive people in the
history of the world.
Two hundred years ago, when this process was just beginning, we
rebelled when, in our eyes, a mother country turned into a foreign power.
We rebelled not to overturn but to preserve what we had, and to keep alive
the chance of doing more. We established a republic, because the meaning
of a republic is that real leadership comes not from the rulers but From
the people, that more happens in a state where people are the sculptors
and not the clay.
We are losing that chance today, and we know we are losing it. Two
hundred years ago it was London that turned into- foreign power, Today,
and it is a sad thing to say, it is Washington. The coils woven in that
city are entrapping us all, and, as with the Cordian knot, we cannot untie
it, we must cut it with one blow of the sword.
In one reference book, cutting the Cordian knot is defined as follows:
"to solve a perplexing problem by a single bold action." The Cordian knot
of antiquity was in Phrygia, and it was Alexander the Great who cut it,
thereby, according to the legend, assuring the conquest of Persia.
Today, the Gordian knot is in Washington, and the stakes are even
higher. But this is a republic, and we have no king to cut it, only we
the people, and our sword has been beaten into ballot boxes. What applies
to the role of government applies equally to the means of changing that
role: leadership is necessary, but even more necessary is popular choice.
The anonymous sage who defined leadership must have lived in a republic,
for he said, "He is not the best statesman who is the greatest doer, but
he who sets others doing with the greatest success."
BERALD FORD LIBRARY
RONALD REAGAN
SUITE 812
10960 WILSHIRE BOULEVARD
LOS ANGELES, CALIFORNIA 90024
213/477-8231
July 14, 1975
The Honorable Paul Laxalt
Member, United States Senate
Senate Office Building
Washington, D. C. 20500
Dear Paul:
I am writing this letter in response to your decision to
chair the "Citizens for Reagan" committee. I deeply
appreciate your action, but I want to inform you that I
have not made up my mind whether to become an active
Presidential candidate. I expect to make this decision
before the end of the year.
Meanwhile, I recognize that due to the technical require-
ments of the law (including the requirement for the
designation of a principal campaign committee), the
committee must file with the Federal Elections Commission
as working on my behalf. I trust this letter will suffice
as my consent for purposes of allowing you to do SO.
Sincerely,
Ran
RONALD REAGAN
LIBRARY GERALD R FORD
flow COV. IOD FROM
any 15, 1975
THRU September 30, 1979
Column A-
Colimn B-
This period
Calindar year to date
SECTION i.- RECEIPTS:
Part 1. Indivi Fuel contributions:
is. Itemi od (use schedule A*)
$133,449.10
b. Unitemized
$ 262,343.77
Total individual contributions 395,792.87
$395,792.87
Part 2. Sales and collections:
Itemized (use schedule B and as necessary schedule A*)
$ none
S none
Part 3. Loans received:
2. hemized (use schedule A)
S none
$
b. Unitemized
S none
Total loans received
$
none
S none
Part 4. Other receipts (refunds, rebates, interest. etc.):
a. Itemized (use schedule Any In-Kind Contributions
S
669.79
b. Unitemized
S
none
Total other receipts
in
669.79
$
669.79
Part 5. Transfers in:
Itemize all (use schedule
01
none
$ none
TOTAL RECEIPTS : 185,462.66
S $1,432.66
SECTION B-EXPENDITURES
Part 6. Void: Use Part 9.
Part 7. Expenditures for personal alames, and reimbursed expenses:
a. Remized (use schedule D*)
$. 20,519.05
b. Unitemized
$ 103.67
Total expenditures for personal services,
salaries, and reimbursed expenses
$ 20,622.72
S 20,622.72
Part 8. Loans made:
2. Itemized (use schedule DAY
$ none
S
b. Unitemized
$
none
S
Total loans made
$
none
$ none
Par: 9. Media and other expenses:
2. Itemized (use schedule (*)
$ 273,658.33
3
b. Unitemized
$
918.53
$
Total other expenditures
$ 274,576.86
$
274,576.86
Part 10. Transfers out:
Itemize all (use schedulsC In-Kind Contributions
$ 669.79
S
669.79
TOTAL EXPENDITURES 295,869.37
$
295,869.37
SECTION C-CASH BALANCES:
Cash on hand at beginning of reporting period
S
-0-
Add total receipts (section A above)
$ 396,462.66
Subtotal
$396,462.66
Subtract total expenditures (section B above)
$.295,869.37
Cash (:11 hand at close o: reporting period
$ 100,593.29
SECTION D. DEBIS AND ORIG VIIONS:
Part 11. Del 1830 : obligations owed to the committee schedule 1:*)
$
Part 12 Dobts and obligations owed by the committee one : schedule E)
$ 190,722.82
*Schedule an to L. used CODY when itemization (See each Schedule for instructions.) When itemization is unneces
for FORD LIBRARY
the tent of any univents for :- Part is :- be caler as Chimp sum on the "Uniternized" line of the appropriate Part of the Summar. Report.
word "None" st will be enter- ... the Name of the Semanary Report when 110 amount is ben. reported.
COMPTROLLER GENERAL OF THL UNITED STATES
RECEIVED
U.S. GENERAL ACCOUNTING OFFICEAL ELECTION
Washington,' D:C.
COMMISSION
REGISTRATION FORM AND STATEMENT OF ORGANIZATION
FOR A
'75 JUL 24 PM 12: 21
COMMITTEE
SUPPORTING ANY CANDIDATE (S) FOR THE OFFICE OF PRESIDENT OR VICE PRESIDENT
OF THE UNITED STATES AND ANTICIPATING CONTRIBUTIONS OR EXPENDITURES
IN EXCESS OF $1,000 IN ANY CALENDAR YEAR
REQUIREMENTS FOR REGISTRATION OF POLITICAL COMMITTEES
(In accordance with the provisions. of the Federal Election Campaign Act of 1971, P.L. 92-225)
SEE APPROPRIATE SUPERVISORY OFFICER'S MANUAL FOR ADDITIONAL
REGULATIONS AND INSTRUCTIONS
A. The treasurer of each political committee which anticipates receiving contributions or making expenditures
during the calendar year in an aggregate amount exceeding $1,000 any portion of which will be expended for the purpose
of influencing the nomination or election of candidates for the office of President or Vice President shall file with the Comp-
troller General of the United States a Registration Form and Statement of Organization, within 10 days after its organi-
zation, or, if later, 10 days after the date on which it has information which causes the committee to anticipate it will
receive contributions or make expenditures in excess of $1,000 any portion of which will be expended for the purpose of
influencing the nomination or election of candidates for the office of President or Vice President. Each such committee in
existence on April 7, 1972 shall file a Registration Form and Statement of Organization with the Comptroller General on or
before April-17, 1972. Note: If the committee also supports a candidate for the U.S. Senate, a similar statement must be filed
with the Secretary of the Senate, and if the committee supports a candidate for the U.S. House of Representatives a similar
statement must be filed with the Clerk of the House of Representatives.
B. A copy of this statement shall be filed with the Secretary of State (or, if there is no Office of Secretary of State, the
equivalent State officer) of the appropriate State.
C. A copy of this statement shall be preserved by the treasurer of the political committee for a period of not less than.
four (4) years.
D. Any change or correction of information previously submitted in a Registration Form and Statement of Organization
shall be reported to the Comptroller General within ten (10) days following the change or correction. Such amendments to
the statement shall contain the date, identity of the committee, the changed or corrected information appropriately identi-
fied, and shall be verified by the oath or affirmation of the person filing such information; taken before any officer authorized
to administer the oaths.
E. Any committee which, after having filed one or more Registration Form and Statement of Organization, disbands or
determines it will no longer receive contributions or make expenditures during the calendar year in an aggregate amount
exceeding $1,000 shall so notify the Comptroller General. Such notification shall be verified by the oath or affirmation of the
person filing it, taken before any officer authorized to administer the oaths; and such notification shall include a statement as
to the disposition of residual funds if the committee is disbanding.
1. Full name of committee: CITIZENS FOR REAGAN
Mailing address and ZIP code: 2021-L. St., N.W./Suite 340/Washington, D.C. 2001
Date of this registration: July 24, 1975
2. Affiliated or connected organizations:
None. (But note enclosed-letter: of authoriz
Name of affiliated or
Mailing address and
connected organization
ZIP code
Relationship
*Submit additional information on separate continuation sheets appropriately labeled and attached to this Statement of Organization. Indicate in the
appropriate box above when information is continued on separate page(s).
3. Area, Scope and Jurisdiction of the Committee:
(a) Will this committee operate in more than one State? Yes.
FORD
(d) Will it support a candidate for the office of President or Vice President in an aggregate amount LIBRARD
(b) Will it operate on a statewide basis in one State? Yes,
(c) Will it primarily support candidates seeking State or local office? No.
GERALD
in excess of $1,000 during the calendar year? Yes.
COMP. GEN. ELECTION FORM 1
CITIZENS FOR REA .N
(Full Name of Committee)
4. (a) If the committee is supporting individual candidates for the office of President or Vice President,
list each candidate by name, address, office sought, and party affiliation:
State and
Full names of candidates
Mailing address and ZIP code
Congressional
Party
District
Ronald Reagan
10960 Wilshire Blvd.
Office of
Republican
Los Angeles, California
President of
90024
the United
Suite 812
States
(b) List by name, address, office sought, and party affiliation, any candidate for other Federal office
that this committee is supporting:
Full names of candidates
Mailing address and ZIP code
Office sought
Party
N/A
(c) List by name, address, office sought, and party affiliation, any candidate for any other public office
that this committee is supporting:
Full names of candidates
Mailing address and ZIP code
Office sought
Party
N/A
*
5. If this committee is supporting the entire ticket of a party, give name of party:
N/A
6. Identify by name, address and position, the committee's custodian of books and accounts:
Full name
Mailing address and ZIP code
Committee title or position
Mr. Henry Buchanan
Treasurer
7979 Old Georgetown Rd.
Suite 311
Bethesda, Md. 20014
7. List by name, address and position, other principal officers of the committee, including officers and
members of the finance committee, if any:
Full name
Mailing address and ZIP code
Committee title or position
Sen. Paul Laxalt
326 Russell Senate Office Chairman
Building, Washington,
D.C. 20510
John P. Sears
2021 L. St., N.W.
Executive Vice Chairman
*
Suite 340
Washington, D.C. 20036
EDRD
*Submit additional information on separate continuation sheets appropriately labeled and attached to this Statement of Organization. Indicate
in
the
appropriate box above when information is continued on separate page(s).
2
GERALD
.LIBRARY
If so how
long ? November, 1976.
9. In the event of dissolution, what disposition will be made of residual funds? To the Republican
National Committee to the extent permitted by law.
10. List all banks or other repositories in which the committee deposits funds, holds accounts, rents safety
deposit boxes or maintains funds:
Name of bank, repository, etc.
Mailing address and ZIP code
National Savings & Trust Co.
1700 K Street, N.W.
Washington, D.C. 20006
11. List all reports required to be filed by this committee with States and local jurisdictions, together with
the names, addresses, and positions of the recipients of the reports None currently.
Dates
required
Report title
to be filed
Name and position of recipient
Mailing address and ZIP code
*Submit additional information on separate continuation sheets appropriately labeled and attached to this Statement of Organization. Indicate in the
appropriate box above when information is continued on separate page(s).
State of
SS.
County of
I, Henry Buchanan
, being duly sworn, depose (affirm) and say that the
(Full Name of Treasurer of Political Committee)
information in this Registration Form and Statement of Organization is complete, true, and correct.
Your m Buchmen
(Signature OF Treasurer of Political Committee)
Subscribed and sworn to (affirmed) before me this 24th day of July
A.D. 1975.
,
myrthid (Notary Public) Janes
[SEAL]
My commission expires may14 1978
Return completed form and attachments to:
Office of Federal Elections
U.S. General Accounting Office
441 G Street, NW.
Washington, D.C. 20548
FORD & LIBRARY CERALD
3
The Washington Star
Saturday, November 1, 1975
Ronald Reagan:
Is He Already
A 'Candidate?'
with another aspect of Rea-
ACI under the new cam-
gan's travels.
paign law.
It is unknown whether the
If he is a candidate, how-
By Lyle Denniston
citizen who filed the com-
ever, some of the money
Washington Star Staff Writer
plaint about the broadcast-
may have been paid illegal-
The Federal Election Commission
ing was acting only for
ly, since it may have come
himself. However, it is
from corporate funds. The
has been asked to settle an issue in
understood that the Ford
law forbids that.
which President Ford is keenly inter-
WHILE REAGAN said he
political organization has no
In a somewhat similar
ested: Is Ronald Reagan a profes-
did that simply to satisfy
connection with that per-
situation earlier this year,
FORD & GERALD LIBRARY
SCHEDULE E
DEBTS AND OBLIGATIONS
Citizens for Reagan
Part No. 12
(Full Name of Committee)
(Use for itemizing Part 11 or 12)
SEE REVERSE SIDE FOR INSTRUCTIONS
(Use separate page (s) for each numbered Part)
Date Incurred
Full Name, Mailing Address, and ZIP Code
Amount of
Cumulative
Outstamine
(month, day,
(occupation and principal piece of business, if any)
Original Debt,
Payment
Balance
year)
Contract. Agree-
To Date
at Close
ment, or Promise
of This
Period
9-4-75
Amity Rubber Staing Co.
1127 Ninth Street, N.W.
6.62
Washington, D.C. 20001
9-30-75
B.E.S.T.
P. O. Box B-P
272.75
Newport Beach, Calif. 92664
Henry M. Buchanan, CPA
9-9-75
7979 Old Georgetown Road
Bethesda, Maryland 20014
3,930.0
9-1-75
C&P Telephone Co.
P. O. Box 2123
Washington, D.C.
2,029.
Commercial Envelope
8-13-75
2915 Wilmarco Ave.
Baltimore, Maryland 21223
16,466.9
8-13-75
Decision Making Information
2700 North Main Street, St. 803
Santa Ana, Calif. 92701
177,400.00
92,500.00
91,332.5
Greenhoot, Inc.
9-23-75
1919 198-Street, N.W., Suite 210
Washington, D.C. 20036
16,762.00
1,940.50
11,875.00
IBM
P.O. 117
PSD
GERALD FORD TIBRARY
SCHEDULE E
DEBTS AND OBLIGATIONS
Citizens for Reagan
Part No. 12
(Full Name of Committee)
(Use for itemizing Part 11 or 12)
SEE REVERSE SIDE FOR INSTRUCTIONS
(Use separate page(s) for each numbered Part)
Date Incurred
Full Name, Mailing Address, and ZIP Code
Amount of
Cumulative
Outstanding
(month, day,
(occupation and principal place of business, if any)
Original Debt,
Payment
Balance
year)
Contract. Agree-
To Date
at Core
ment, or Promise
of This
Period
9-10-75
Kenneth Frederick's Printing Service
2542 Midvale Avenue
Los Angeles, Calif. 90064
124.18
Krieger-Reed
9-11-75
1007 Capouse Avenue
Scranton, Pa. 18509
83.73
Leon Office Machines
9-9-75
625 H Street, N. W.
Washington, D. C. 20001
194.25
9-17-75
Lynbird Air, Inc.
Du Page County Airport
West Chicago, Ill. 60185
389.37
The Mail Room, Inc.
8-14-75
9140 Euclid Court
Manassas, Virginia 22110
2,359.1
9-8-75
Marriott Hotels, Inc.
333 Jefferson Davis Highway
Arlington, Va. 22202
698.
8-13-75
Omega List Company
301 Maple Avenue West, Suite 2B
Vienna, Va. 22180
57,824.
Opt-D Graphics, Inc.
5-13-75
2525 Lee Highway
Arlington, Va. 22201
BERALD FORD LIBRARY
SCHEDULE E
DEBTS AND OBLIGATIONS
Citizens for Reagan
Part No.
12
(Full Name of Committee)
(Use for itemizing Part 11 or 12)
SEE REVERSE SIDE FOR INSTRUCTIONS
(Use separate page (s) for each numbered Part)
Date Incurred
Full Name, Mailing Address, and ZIP Code
Amount of
Cumulative
Outstanding
(month, day,
(occupation and principal place of business, if any)
Original Debt.
Payment
Balance
year)
Contract, Agree-
To Date
at Close
ment, or Promise
of This
Period
8-10-75
Park Lane Press
1501 North Guilford Avenue
Baltimore, Maryland 21202
267.00
9-22-75
Senator Paul Laxalt
326 Russell House Office Building
Washington, D.C. 20510
463.60
Xerox
9-12-75
6800 Industrial Road
Springfield, Va. 22151
539.29
Xerox
9-8-75
1616 N. Ft. Myer Drive.
Arlington, Va. 22209
314.51
9-23-75
Ellen A. Bales
1523 Corinth Avenue
West Los Angeles, Ca. 90025
26.92
9-23-75
Leslie Carol Dutton
215 21st Place
Santa Monica, Ca. 90402
55.79
9-15-75
Internal Revenue Service
11601 Recsevelt Sollevard
Bhiladelphia, Pa. 19155
685.95
9-15-75
D.C. Trensurer
Department Revenue
FORD
300
GERALD
208.
LIBRARY
SCHEDULE E
DEBTS AND OBLICATIONS
Citizens for Reagan
Part No. 12
(Full Name of Committee)
(Use for itemizing Part 11 or 12)
SEE REVERSE SIDE FOR INSTRUCTIONS
(Use separate page (s) for each numbered Part)
Date Incurred
Full Name. Mailing Address, and ZIP Code
Amount of
Cumulative
Outstanding
(month, day,
(occupation and principal place of business, if any)
Original Debt,
Payment
Balance
year)
Contract, Agree-
To Date
at Close
ment, or Promise
of This
Period
9-15-75
Department of Taxation
Administrative Services Division
P. O. Box 1202
484.67
Richmond, Va. 23208
GERALD LIBRARY R. FORD
SUMMARY PAGE
Committee
Citizens for Roagan
REPORT COVERING PERIOD FROM
July 15, 1975
THRU Sentem 117 30, 1975
Column i-
Column B-
Calendar year to date
SECTION N RECEIPTS:
Ext 1. 1: dividual contributions:
2 Itemized (use schedule A*)
133,449.10
b. Unitemized
$202,343.77
Total individual contributions $ 395,792.87
S
395,792.87
Part 2. Sales and collections:
Item ided (use schedule B and as necessary schedule A*)
$
none
S none
Part 3. Losss received:
a Itemized (use schedule A*)
$ none
S
b. Unitemized
$ none
Total loans received
S
none
5 none
Part 4. Other receipts (refunds, rebates, interest, etc.):
Itemized (use schedule A*) In-Kind Contributions
S
669.79
b. Unitemized
$
none
Total other receipts
$
669.79
S
669.79
Past 5. Transfers in:
hamize all (use schedule A*)
$
none
S none
TOTAL RECEIPTS $ 396,462.66
S 396,462.66
SECTION B-EXPENDITURES:
Part 6. Void: Use Part 9.
Part 7. Expenditures for personal anes, and reimbursed expenses:
a. Itemized (use schedule D*)
$ 20,519.05
b. Unitemized
$
103.67
Total expenditures for personal services,
allaries, and reimbursed expenses
$ 20,622.72
S 20,622.72
Part 8. Loans made:
none
a. Itemized (use schedule
$
$
b. Unitemized
is
none
S
Total loans made
$
none
S none
Part 9. Media and other expenses
4. Itemized (use schedule.C*)
$ 273,658.33
$
b. Unitemized
$
918.53
S
Total other expenditures
$ 274,576.86
3
274,576.86
Part 10. Transfers out:
Itemize il (use schedulsC*) In-Kind Contributions
$ 669.79
S 669.79
TOTAL EXPENDITURES $ 295,869.37
$ 295,869.37
SECTION C CASH BALANCES:
Cash on hand at beginning of reporting period
$
-0--
Add total receipts (section A above)
$.396,462.66
Subtotal
$ 396,462.66
Subtract total expenditures (section B above)
$.295,869.37
Cahon hand at close of reporting period
$ 100,593.29
SECTION :: DEBIS AND 081 IGATIONS:
GERALD FORD LIBRARA
Part 11. Dates and obligations seed 112 the committee (use schedule 1.*)
$
Part 12. 1, besind obligations owed by the committee (use schedule E*)
$ 190,722.82
*Schedates Life to be used orty when itemization i. required (See each Schedule for instructions III ben itemisation is unnecessary for a riven Part
the to baran on the at Thread the appropriate Partol the Summary Prooft
Dear Paul,
I am writing this letterin response to your dec. to chair the 6fr
cmte. I deeply appreciate your action, but I wanta inform u that i have
not made up my mind whether to become an active presidential candidate.
I expect to make this dec. before the end of theyear.
Meanwhile, I recognize that due to the technical requirements of the law
(including the requirement for the designation of a principal campaign cmte)
the comte must file with the FEC asworking on my behalf. I trust this letter
will suffice as my consent for purposes of allowing you to do SO.
opinion/Wyman «Duptur
He's a candidate - Not clase emff.
Viol - $1,000 fine
year Jail
X
#315 - FCC.
FORD is GERALD LIBRARY
any time cand. appear B4 constituaing
change US. him.
Los Angeles Times Thur., Oct. 30, 1975-
LIBRARY
Ford Unit to Ask
sult of a $30-a-plate dinner featuring Reagan in Albu-
Reagan is scheduled to address a welding supply indus-
FORD
querque last Friday.
try luncheon in San Francisco today and a National
The commission's general counsel was asked (a) wheth-
Freight Traffic Assn. meeting in Boca Raton, Fla., next
er Reagan really is a candidate for the Republican pres-
Monday.
GERALD
Ruling on Reagan
idential nomination despite his denial thus far, and (b)
Reagan has never confirmed industry reports that his
whether corporations may have violated the law as a re-
speaking fee ranges up to $5,000. That is roughly what his
sult of their support of his speaking tour.
fee would come to from the Albuquerque speech last week.
If a Candidate, He Will
Ticket purchasers, if they were corporate members of
One of the events that prompted the inquiry into Rea-
ACI, were told to write two separate checks to cover the
gan's status was an advisory opinion issued by the FEC in
Have to List Expenses
$30 ticket price-one for $17.50 to ACI and, by personal
August.
check only, one for $12.50 made payable to Reagan.
Sen. Lloyd Bentsen (D-Tex.), an announced candidate
Federal election law forbids corporations from contri-
for President, asked the FEC whether he could accept
BY RICHARD BERGHOLZ
buting to federal election candidates and campaigns.
payment for his travel expenses incurred in making a
Times Political Writer
Reagan repeatedly has contended he is not now a candi-
speech to a New York Chamber of Commerce meeting,
The Ford campaign committee is
date, that he will announce his decision whether he will
and whether such payment would have to be reported as
preparing to ask the Federal Election
run against Mr. Ford about Nov. 20.
a campaign contribution and whether it would be charge-
Commission if Ronald Reagan has
able against his spending limitation.
been a candidate for President for
The former governor has contended his speeches since
The FEC in a terse two-paragraph opinion held that
Los Ingeles Times Thur., Oct. 30, 1975-
FORD
LIBRARY
Ford Unit to Ask
sult of a $30-a-plate dinner featuring Reagan in Albu-
Reagan is scheduled to address a welding supply indus-
querque last Friday.
try luncheon in San Francisco today and a National
is
The commission's general counsel was asked (a) wheth-
Freight Traffic Assn. meeting in Boca Raton, Fla., next
er Reagan really is a candidate for the Republican pres-
Monday.
GERALD
Ruling on Reagan
idential nomination despite his denial thus far, and (b)
Reagan has never confirmed industry reports that his
whether corporations may have violated the law as a re-
speaking fee ranges up to $5,000. That is roughly what his
sult of their support of his speaking tour.
fee would come to from the Albuquerque speech last week.
If a Candidate, He Will
Ticket purchasers, if they were corporate members of
One of the events that prompted the inquiry into Rea-
ACI, were told to write two separate checks to cover the
gan's status was an advisory opinion issued by the FEC in
Have to List Expenses
$30 ticket price-one for $17.50 to ACI and, by personal
August.
check only, one for $12.50 made payable to Reagan.
Sen. Lloyd Bentsen (D-Tex.), an announced candidate
Federal election law forbids corporations from contri-
for President, asked the FEC whether he could accept
BY RICHARD BERGHOLZ
buting to federal election candidates and campaigns.
payment for his travel expenses incurred in making a
Times Political Writer
Reagan repeatedly has contended he is not now a candi-
speech to a New York Chamber of Commerce meeting,
The Ford campaign committee is
date, that he will announce his decision whether he will
and whether such payment would have to be reported as
preparing to ask the Federal Election
run against Mr. Ford about Nov. 20.
a campaign contribution and whether it would be charge-
Commission if Ronald Reagan has
able against his spending limitation.
The former governor has contended his speeches since
The
FEC
in
Reagan
Favors
Escalation
Oak Jrik9-12-61
SACRAMENTO (UPI)
-
Gov. Ronald Reagan said to-
day he favored a sharp esca-
lation of the war in Vietnam
to win it "as quickly as possi-
ble."
But he told a news confer-
ence that decisions on the
type escalation should be left
to military experts.
At his final regularly sched-
uled weekly news conference
before the legislature resumes
in January, Reagan also:
-Said he was "not interest-
ed" in sharing the 1968 GOP
national ticket as a Vice Pres-
S
idential candidate with New
d
York Gov. Nelson Rockefeller.
r
The Republican governor,
t
who has said many times he
es
in
would hot Vice
to
Presidential nomination, said
he felt the governorship of
California was a "greater op-
portunity."
-Refused to be drawn into
criticism of Michigan Gov.
George Romney for his state-
ment that he had been "brain-
washed" during a trip to Viet-
nam.
He said Romney, an unan-
nounced contender for the
GOP Presidential nomination,
had "made his explana-
tion" of the context of the
statement and that he had
"expressed a concern of all
Americans" that they aren't
being adequately informed
about the Vietnam war.
The governor spent fully
half of his 30 - minute news
conference discussing the
FORD & LIBRARY GERALD
Vietnam war and Romney's
"brainwashing" statement.
He noted the Republican
National Committee, which
met in Washington last week.
had its chance to censure
Rommey for his recent state-
ments on the war and had not
sac
Bee 3/10/67
2 Reagan Urges LBJ: Use
Full Power To End War
By Edward H. Dickson and Leo Rennert
McClatchy Newspapers staff writers
WASHINGTON, D.C. - Gov.
nomination in next year's pri-
Ronald Reagan said today Presi-
mary.
dent Lyndon B. Johnson should
He promised to support the
use the nation's full military
senator "wholeheartedly" if he
resources, including the threat
again becomes the choice of
no of atomic devastation, to bring
California Republicans at the
the Vietnam war to a quick end.
polls but said he would adopt
While taking a strong "hawk"
a strictly neutral stance in the
.? positon, the governor jabbed at
meantime.
i
Michigan Gov. George Romney
Reagan said he will not ad-
for his refusal to spell out in
vise State Superintendent of
G detail his views on the conduct
Public Instruction Max Raffer-
5 of the war.
ty "one way or another" wheth-
Reagan said he agrees with
er to enter the primary against
former President Dwight D. Ei-
Kuchel.
senhower's call for a speedy
solution by whatever means
"Anyone who wants to get into
that race is on his own as far
may be necessary.
"I'm not in a position to make
as I'm concerned," the governor
declared.
such a decision and no one cer-
tainly wants to use such weap-
Asked about including Kuchel
"ons," he told a crowded news
in the California delegation to
or conference at the start of a
the 1968 GOP convention Rea-
two-day visit to the nation's cap-
gan said he does not see how
,
ital.
this could be done since Kuchel
"But the last person who
will be running for reelection
should be told we won't use
at the time.
atomic weapons is the enemy in
Refutes Charge
Vietnam.
As for his stand on tuition and
An Obligation
S. "Once you ask young men to
budget support for the Univer-
:
fight and die for their country
sity of California, Reagan said
Assembly Speaker Jesse Un-
you have an obligation to use
the full resources of the nation
ruh's suggestion that the tuition
to win as quickly as possible."
proposal is designed to disci-
Reagan specifically advocated
pline dissident students is "pret-
the mining of the harbor
ty ridiculous."
Pat Haiphong and conventional
The governor said Unruh was
bombing of supply and manufac-
engaging in some political "fun
turing centers n North Vietnam.
and games."
"This certainly would make
If student discipline were
more sense than sending our
the objective, Reagan said
bombers to try to intercept mili-
there are more direct means
tary shipments when they're al-
available, including enforcement
ready on the way down to
of rules of conduct.
South Vietnam," he remarked.
He said he is opposed to ne-
The governor also suggested
gotiations by UC administra-
the United States should exact
tors with students because that
a "higher price" from the So-
"gives away their authority."
viet Union for such bridge-build-
The governor denied that he
ing measures as the consular
has made it difficult for UC to
treaty and increased trade.
find a top-caliber successor to
Reagan, who is receiving in-
FORD
ousted UC President Clark
creasing mention in conserva-
tive circles as a possible presi-
Kerr. He said he expects many
good educators will show an in-
dential candidate, was asked
GERALD
terest in the job.
LIBRARY
whether Romney, the choice
most GOP moderates, should
"That's a pretty good job and
take a clear stand on Vietnam.
a great university," he re-
marked.
"It sure would help him at
the press conferences," Reagan
Reagan said he also has no
replied.
intention to "punish" welfare
No Ambitions
recipients but only wants to
secrament Bee
Demo Blasts
Reagan 9-14-67 On
'Escalation'
WASHINGTON (AP) - Rep.
Joseph Y. Resnick, D-N.Y.,
calls Gov. Reagan "irresponsi-
ble" for calling for use of Amer-
ica's full technology in the Viet-
7/11/67 Sacramento Bee
Reagan's Atomic Weapons Quote
The San Prancisco Chronicle
Gov. Reagan says he is upset
the enemy is to go to bed afraid
that the current Newsweek
that atomic weapons may be
quotes him on Vietnam as
in
FORD & GERALD LIBRARY
10/20
NOTICES
44041
[Notice 1975-50, AOR 1975-72]
in national, state, or local party promotional
specific office within a specific geographical
activities?
area. National and State party organizations
ADVISORY OPINION REQUEST
The question of the Federal Election Cam-
engage in day-to-day business which, among
paign Law's application is restricted to ex-
other things, includes maintaining offices,
Counsel for the Republican National
penses incurred for acts of the President, Vice
staffs, telephones, registration drives, speaker
Committee has authorized the Commis-
President and their aides when engaged in
programs, publications, research, travel, fund
sion to consider the following as a re-
Republican party political activities and is
raising, convention arrangements and voter
quest for an advisory opinion. The Com-
not addressed to those expenses incurred by
education in both election and nonelection
mission intends to act upon the matter by
the President, Vice President and their aides
years. The 1974 Act contains no limiting pro-
issuing an advisory opinion in accord-
when engaged politically on behalf of any
vision for expenditures by a National or State
ance with the procedures set forth in
individual political candidate, including the
political party for these functions. The Act
candidacy of the President and Vice President
does limit the amounts that National and
the Commission's Notice 1975-4, pub-
themselves.
State parties may contribute to, or spend on
lished on June 24, 1975 (40 FR 26660)
National political parties in the United
behalf of, individuals seeking,
Nomi-
Interested persons wishing to com-
States arose in the late Eighteenth and Nine-
nation for election, or for election, to Fed-
ment on the subject matter of any Advi-
teenth centuries. What had been largely leg-
eral office
(18 U.S.C. 608), but it does
SC Opinion Request may submit writ-
islative parties evolved into constituency-
not impose a maximum monetary budget for
t iews with respect to such requests
based parties when the states expanded male
the conduct of ongoing party business.
on or before October 6, 1975. Such sub-
suffrage by eliminating property-owning and
Political campaign committees accepticon-
mission should be sent to the Federal
taxpaying qualifications for the voting fran-
tributions and make expenditures that are
chise. Although not mentioned in the Ameri-
identifiable with the committee's support of
Election Commission, Office of General
can Constitution, National political parties
its particular candidate for a particular of-
Counsel, Advisory Opinion Section, 1325
have historically served to effectuate, orga-
fice. National political parties, conversely,
K Street NW., Washington, D.C. 20463.
nize and promote the exercise of the fran-
are charged with the ongoing responsibility
Persons requiring additional time in
chise right by the electorate.
of promoting voter registration and creating
which to respond to any Advisory Opin-
In the early days of the Republic, Federal
voter recognition of party identity and
ion Request will normally be granted such
candidates had no great need for funds to
ideology, without reference to an individual
time upon written request to the Com-
reach a vast popular electorate. The elec-
candidate or election. A large measure of this
mission. All timely comments received by
torate was widely scattered, served by a prim-
function is performed by the President, Vice
the Commission will be considered by
itive communication system and largely re-
President and their aides on behalf of their
stricted in its size by racial, sexual and prop-
National and State parties. When these party
the Commission before it issues an ad-
erty holding qualifications. The typical cam-
functions are performed and costs result
visory opinion. The Commission rec-
paign was waged, almost exclusively, in the
from same, the beneficiary of those functions,
ommends that comments on pending Ad-
newspapers and financed largely by the indi-
i.e., the National or State political parties,
visory Opinion Requests refer to specific
vidual candidates themselves. With the
should and does assume the cost incurred.
AOR number of the Request commented
abolition of voting right restrictions, a new
Partisan political activity is a recognized
upon, and that statutory references be
electorate resulted. To service, to communi-
and Federally codified facet of an incum-
to the United States Code citations,
cate and to persuade that new electorate, Na-
bent President's ordinary business. The pur-
tional political parties evolved.
pose of the Federal Hatch Act (5 U.S.C. 7321,
rather than to the Public Law Citations.
The American President has traditionally
et seq.) is to prohibit partisan political ac-
AOR 1975-72: Application of Contribution
served as the leader of his party. President
tivities by employees of the Executive Branch
and Spending Limits in 18 U.S.C. 608 to
John F. Kennedy viewed the Presidents'
of the Federal Government. That prohibition
Presidential Candidate's Travel for Party
partisan role in the following manner: "No
excludes employees of the Office of the Presi-
President, it seems to me, can escape politics.
dent and the President, himself. This statu-
urposes.
He has not only been chosen by the nation-
tory exclusion is a Congressional recognition
Dear Chairman Curtis: As indicated by
he has been chosen by his party
if he
of the inherent partisan nature and duties of
Philip W. Buchen, Counsel to the President,
neglects the party machinery and avoids his
the Presidency. It does not necessarily follow
on August 7, 1975, the Republican National
party's leadership-then he has not only
that because Congress recognized the politi-
Committee (R.N.C.) has undertaken the pay-
weakened the political party
he
has
cal role of the President of the United States
ment of certain expenditures incurred by the
dealt a blow to the democratic process
as head of his party, and authorized his
President, Vice President and their aides
iteself."¹
aldes to assist him in fulfilling that role,
when engaged in National, state or local
In the minds of the public, the programs of
that the expenses thereby incurred should
political party promotional activities. He cor-
the President are also the programs of his
be borne by the Treasury of the United
rectly observed that these R.N.C. expendi-
party; his personal success or failure becomes
States. As suggested earlier, a more feasible
tures are within the public domain, having
the party's success or failure. The Chief Ex-
and practical alternative to the taxpayer
been filed quarterly by the R.N.C. with the
ecutive is the embodiment of his party,
bearing these costs is that payment of these
Federal Election Commission, the Clerk of
Thomas W. Madron and Carl P. Chelf, 1974
obligations be assumed by the beneficiary of
the House of Representatives and the Sec-
treatise titled Political Parties in the United
the acts, i.e., the President's National
retary of the United States Senate. This cor-
States, commented on the President's role as
Political Party.
respondence shall serve to further amplify
head of the party: "Frequently the party and
The obligation to assume a party role for
those filings, to discuss the historical tradi-
the executive constitute a sort of mutual ac-
one's National Political Party is not restricted
tion associated with the President's role and
commodation society the executive
to the President of the United States. Sena-
obligation as head of the Republican Party,
uses the party as a channel for interacting
tors and Congressmen frequently are called
to consider alternative sources of payment
with other elements in the political system,
upon to function as spokesmen for, to aid in
for such expenditures, and, finally, to briefly
while on other occasions the executive will
fund raising events of, and, generally, to rep-
categorize the items paid for by the Repub-
function as a vehicle for promoting party
resent their own National Political Party.
lican National Committee.
goals."2
Such a party role is often undertaken by
Mr. Buchen's letter of September 3, 1975,
But, who shall assume the cost incurred
Members of Congress after announcing their
responded to F.E.C. Notice 1975-38 (FR
when the executive so functions?
candidacy for reelection to the position they
80202) wherein the Commission, "sought
The Federal Election Campaign Law of 1974
presently hold and/or after announcing their
comments concerning a request from the
reflects definitional distinctions between a
candidacy to the Office of President of the
Campaign Manager for Mr. Louis Wyman".
"national committee" [2 U.S.C. 431(1) a
United States. The costs incurred by a United
Counsel's correspondence disclosed the
"state committee" [2 U.S.C. 431(1)] and a
States Senator, who is an announced candi-
method employed by the White House to
"political committee" [2 U.S.C. 431 (d) The
date for the Presidency, when attending a
allocate the cost of operating Government-
distinctions are indictative of Congress'
fund raising event for his National or State
owned aircraft on political and mixed official-
recognition of the existence of general
Party should not deplete his Ten Million
political trips by the President, Vice Presi-
partisan activity conducted on an ongoing
Dollar ($10,000,000) Presidential primary
dent and their aides. Accordingly, this Memo-
basis by National political parties when com-
effort. The party role performed by such indi-
randum will not address itself to the appor-
viduals, acting as party spokesmen at party
pared to those activities of a specific
tionment formula contained in Mr. Buchen's
function, is identical to that party role of a
candidate's organization seeking election to a
letter of September 3, 1975.
President. Neither incurs the expenditures
associated with their role in furtherance of
The question to be considered is: Does the
1 Quoted by Stuart G. Brown, The Ameri-
their quest,"
for nomination for elec-
Federal Election Campaign Law of 1974 have
can Presidency: Leadership, Partisanship,
tion, or for election, to Federal office (18
aprucation to the historical tradition of a
and Popularity (New York: The Macmillan
U.S.C. 608). Democratic National Committee
n al political party's payment of ex-
Co., 1966) Flyleaf.
Chairman Strauss' September 5, 1975. press
pc S incurred by the President of the
2 Mandron and Chelf, Political Parties in
release reflected his disagreement with this
United States, the Vice President of the
the United States, Holbrook Press, 1974, at
principle and argued: "Suppose I as Chair-
United States and their aides while engaged
page 286.
man of the Democratic Party, should name
FORD
FEDERAL REGISTER, VOL. 40, NO. 186-WEDNESDAY, SEPTEMBER 24, 1975
LIBRARY
44042
NOTICES
one of our presidential candidates, or four of
Democrat Presidents engaged in their Na-
subject to dispassionate analysis. The past
them, or all of them. as party leaders and
tional party affairs during the years 1960
and present system of payments by Na-
sent them around the country at D.N.C. ex-
through 1968.
tional political parties for expenses incurred
pense, without limit, and without allocating
When the President, Vice President, and
by the President, Vice President and their
charges against their spending limits?"
their.aides are engaged in political activity
aldes for party promotional activity has the
Where the purpose of an expenditure is
on behalf of their National, State or Local
virtue of fairness. The alternatives, full pay-
not for furthering an individual's candidacy,
political parties, the R.N.C. assumes the cost
ment of Presidential party promotional ex-
it is both wrong and unjust to insist that
of their travel and transportation, advance
penses by the taxpayers or, in those years
the political status of an individual's
men expense, telephone and telegraph cost
when applicable, by the incumbent Presi-
candidacy automatically denies to the Na-
and the cost of receptions incidental to those
dent's campaign committee, are simply not
tional Political Parties the party services of
activities. In addition, the Republican Na-
practicable. The former would constitute an
its party spokesmen. If that is to be the
tional Committee assumes the costs incur-
improper expenditure of Government funds
result, then an artificial distinction has been
red for films and photographs taken during
and the latter imposes an inequitable dis-
established which ignores the purpose of
such Presidential travel and the expense
advantage upon incumbent Presidents seek-
the expenditure and, at the same time, ex-
of Presidential and Vice Presidential gifts
ing reelection, requiring them to deplete a
pands 18 U.S.C. § 608 to limit expenditures
such as cuff links, tie bars and charm
significant amount of their Ten Million Dol-
which are made for purposes other than
bracelets picturing the Presidential or Vice
lar ($10,000,000) primary campaign effort.
those covered by the statute.
Presidential seal.
Incumbency would then become a serious
In 1975, the Republican National Commit-
The Republican National Committee does
political liability to an American President.
tee allocated the sum of Five Hundred
not assume the expenses resulting from
The Republican National Committee plans
Thousand Dollars ($500,000 to support the
Presidential travel incurred when engaged
to continue to implement the procedures
activities of the President, the Vice Presi-
in Presidential candidacy or Presidential
outlined in this communication. Naturally,
dent and their aides when engaged in a party
travel associated with the candidacy of other
the records of the R.N.C. reflecting these
role. This budgetary allotment is consistent
individuals. In those instances, the candi-
with past years budgets, without regard
past expenditures are available for inspec-
date's committee is primarily responsible for
tion by the F.E.C., should the Commission
to whether the year in question was an elec-
the payment of cost, in accordance with the
so desire. We would appreciate very much
tion or nonelection year. On September 1,
structures of the Federal Election Campaign
any comments or suggestions that the Com-
1975, the Republican National Committee
Law. With one notable exception, the R.N.C.
mission may think appropriate to make
had received and/or paid bills totaling
does not pay any of the expense associated
Three Hundred Nine Thousand Dollars
with respect to our treatment of the pay-
with Presidential official travel, i.e., travel
ment of expenses incurred by the President,
($309,000) against the annual allotment. The
undertaken by the President of the United
the Vice President and their aldes when
National Party and various State Parties
States in his role as Chief Executive. That
engaged in party promotional activities.
have been substantially aided financially and
exception is for certain expenditures incurred
otherwise by this effort. The purpose of the
by advance men in relation to official
MARY LOUISE SMITH,
travel associated with these payments by
travel by the President. These expenditures,
Chairman.
R.N.C. was not to further the candidacy of
which in most cases are for persons
the incumbent President, but rather to
Source: Mary Louise Smith, Chairman,
not employed by the Government, are as-
further Republican Party interest. The Re-
sumed by the R.N.C. because the Chief
Republican National Committee, Dwight D.
publican National Committee has filed
Eisenhower Center, 310 First Street SW.,
Executive's appearances, regardless of their
quarterly reports reflecting its quarterly ex-
Washington, D.C. 20003 (September 15, 1975).
purpose, further party interest. All other
penditures with the Federal Election
Commission since the establishment of that
expenditures incurred during the Presi-
Dated: September 18, 1975.
agency. The Republican National Committee
dential official travel are borne from ap-
believes that it is the proper body to assume
propriated funds.
THOMAS B. CURTIS,
The differing roles of a Presidential can-
Chairman for the
these expenditures, just as the Democratic
National Committee believed it was the
didate and a Presidential party leader are
Federal Election Commission.
proper body to pay the expense incurred by
sometimes subtle, but, nonetheless real and
[FR Doc.75-25352 Filed 9-23-75;8:45 am]
FORD
FEDERAL REGISTER, VOL. 40, NO. 186-WEDNESDAY, SEPTEMBER 24, 1975
GERALD
resident
October 17, 1975
THURSDAY
Office of General Counsel,
Advisory Opinion Section
The Federal Election Commission
1325 K Street, N. W.
Washington, D. C. 20463
Re: AOR 1975-72
Contlemen:
The President Ford Committee hereby submits the
following comments in support of the position taken by
the Chairman of the Republican National Committee, Mary
Louise Smith, in her September 15 letter regarding the
historical role of the President of the United States
in his capacity as head of his national party.
We have had the opportunity to review the comments
of the Democratic Senatorial Campaign Committee ("DSCC")
alleging violation of certain provisions of the Federal
Election Campaign Act of 1971, as amended, (the "Act") by
both the Republican National Committee ("RNC") and the
principal campaign committee for the President, The Presi-
dent Ford Committee ("PFC"). In particular, both the RNC
and the PFC were recklessly charged by the DSCC with a
knowing criminal violation of Section 608(b) (2) of Title
13, United States Code, regarding the payment by the NNC
of Presidential travel expenses solely involving Republican
Party political activities. Such assertions are without
merit and lack any substantive legal or factual basis.
It is our position, as demonstrated below, that such
payments by the President's national party are both proper
and lawful. Moreover, such payments recognize three tradi-
tional and important functions of any incumbent President.
He is President, the leader of his national party and at
times il Presidential candidate.
The President Ford immittee, Howard 11. Callaway, Chairman, David Packard, Natural ( i amain, Mem Treasure
GERALD 20443 FORD LIBRARY
our Report is filed with the Federal Version Commission and is avatinie for purchase from the bederal Llecann 11.7 lungion.
Office of General Counsel,
Page 2
Advisory Opinion Section
October 17, 1975
First, it is clear that the limitation set forth in
Section 603 (b) (2) regarding contributions by a political
committee to a federal candidate relate solely to payments:
"
made for the purpose of influencing
the nomination for election, or election,
of any person to Federal office or for the
purpose of influencing the results of a
primary held for the selection of delegates
to a national nominating convention of A
political party or for the expression of =
preference for the nomination of persons
for election to the office of President of
the United States
18 U.S.C. §591 (e) (1) (emphasis added)
Similarly, the definition of "expenditure" in Title 18 excludes
any payment from being charged against the candidate's primary
expenditure limitation of Ten Million Dollars ($10,000,000)
unless it is in furtherance of one of the above-cited purposes.
Moreover, the definition of expenditure also explicitly excludes
any communication by any person which is not made for
the purpose of influencing the nomination for election, or
election, of any person to Federal office". 18-U.S.C. $591
(f) (4) (F). As set forth in greater detail in Mrs. Smith's
letter, the RNC has not and will not assume the expenses of
Presidential travel in connection with either the candidacy
of the President himself or with the candidacy of any other
individual. In the latter circumstances, of course, the
appropriate contribution and expenditure provisions of the
Act would apply on an allocable basis.
Second, the strength of the RNC position is underscored
by the legislative history of the Act itself. One of the
important goals of the legislative reform sought by the 1974
Amendments was to strengthen the national, state and Iceal
party structures and their impact upon the political process
while, at the same time, stemming the flow of undisclosed
private funds which may be covertly channeled into a federal
candidate's coffers. In a paragraph entitled "Strengthening
Office of General Counsel,
Page 3
Advisory Opinion Section
October 17, 1975
Political Parties", the Senate Report on the 1974 Amondments
states that the Senate Committee "agrees that a vigorous
party system is vital to American politics and has given
this matter careful study". Further, the Committee stated
that "the parties will play an increased role in building
strong coalitions of voters and in keeping candidates
responsible to the electorate through the party reorganiza-
tion". Finally, they noted:
[P]arties [such as the RNC will
continue to perform crucial functions in
the election apart from fundraising, such
as registration and voter turnout campaigns,
providing speakers, organizing volunteer
workers and publicizing issues. Indeed,
the combination of substantial public
financing with limits on private gifts to
candidates will release large sums presently
committed to individual campaigns and make
them available for donation to the parties,
themselves. As a result, our financially
hard-pressed parties will have increased
resources not only to conduct party-wide
election efforts, but also to sustain import-
ant party operations in between elections.
11
S. Rep. No. 689, 93d Cong., 2d Sess. 8 (1974)
(emphasis added)
The traditional and one of the most effective methods by which
a national party obtains funds to support such activities and
strengthen its political base is by inviting interested persons
to fundraising events at which party leaders and in particular,
an incumbent President, speak on issues of concern to the Party.
In this regard, as evidenced by Mrs. Smith's Advisory Opinion
Request, the RNC has selected President Ford as not only its
principal spokesman but also the leader of the Republican Party
To date, it is our understanding that such activities by
President Ford have raised over $2,250,000 in 1975 for his
Party. The pragmatic effect of any blanket rule denying the
still govel.
GERALD LIBRARY GERALDR FORD
Office of General Counsel,
Page 4
Advisory Opinion Section
October 17, 1975
RUC the party services of its chief spokesman would be to
dramatically undercut and weaken that which the Act sought
to promote and strengthen.
Thus, the RNC should be permitted to pay for expenses
incurred by the President and his aides for party promotiona
activity since such activities are undertaken at the singular
request of the RNC for its own purposes and benefit. In fact,
the PFC has not initiated, participated in, and/or coordinated
any of the President's trips on behalf of the RNC Such
invitations and acceptances are independent determinations
made by the RNC and the White House in connection with party
matters and for party purposes. Moreover, such activities
are totally unrelated to the PFC campaign efforts which are
directed towards the raising of money and the scheduling of
activities for the purpose of influencing the nomination of
the President for a full term.
Third, the test for determining whether or not 2 contri-
bution or expense is a campaign expense related to a federal
candidate's election, and therefore chargeable to the aggre-
gate limitations set forth in the Act, is one of intent and
purpose. Although, as Mrs. Smith noted with regard to the
differing roles of the President, such distinctions are some-
times subtle, they are nonetheless real and subject to dispas-
sionate analysis. No inflexible rule should be issued by the
Commission which would obviate and climinate partisan but
non-candidate related activities. Instead, it is our consid-
ered opinion that a clear distinction exists between the
activities of a President in his official capacity, the activ-
ities of a President in his party leader capacity and,
finally, the activities of a President as a candidate for
nomination. Reason dictates that any such dotermination by
the Commission in this regard must be rendered on a case by
case basis.
Further, in the Opinion of Counsel issued to the
campaign manager of the Wyman-for-Senator Committee the
Commission recognized the relative immateriality of the
"carryover effect" or other incidental benefit to the Presi-
dent in connection with his appearance in New Hampshire on
&
FORD
GERALD
LIBRARY
Office of General Counsel,
Page 5
Advisory Opinion Section
October 17, 1975
behalf of Wyman, particularly when the timing of such a
visit had no significant demonstrable or measurable effect
on the 1976 Presidential election, nominating convention or
New Hampshire primary election. Although that opinion was
restricted to a particular set of circumstances and was
not deemed necessarily applicable to other "campaign"
activity engaged in by a Presidential candidate, the logical
conclusion is that a similar approach and analysis must
be taken toward non-campaign activity by a federal candidate.
The distinction between official nets by a federal.
officeholder and candidate related acti. ties is also
reflected in both the legislative history of the Act (see,
H. R. Rep. No. 1239, 93d Cong. 2d Sess. 150 (1974) and
in the Commission's initial Task Force draft regarding
Allocation of Expenditures. Moreover, an equally real and
viable distinction exists between candidate related activities
and party related activities, particularly during the primary
period prior to the nomination at the national parties' annual
conventions.
Fourth, it has also been suggested that the Commission
should rely upon Advisory Opinion 1975-13 and the proposed
House Account regulations. Such reliance is, in our opinion,
?
misplaced. That Advisory Opinion merely decided that the
payment of a Presidential Candidate's travel expenses from
corporate funds was illegal. It in no way addressed the
question whether the President may engage in political activ-
ities unrelated to his candidacy. The distinction in the
House Account proposal is self-apparent. In that situation,
money is being contributed directly to the candidate to sup-
port activities that can have no substantive purpose other
than to assist the candidate in influencing his constituency
and, of greater importance, such contributions certainly do
not serve to advance a stated major purpose of the Act - the
strengthening of political parties. Moreover, in its second
proposed version of the House Account regulation it was again
recognized by the Commission that, even with regard to such
direct contributions to Congressmen, the application of the
Act's limitations would apply only to a foreshortened period
prior to an announced candidate's election.
&
FORD
GERALD
LIBRARY
Office of General Counsel,
Page 6
Advisory Opinion Section
October 17, 197
Fifth, it is possible to develop objective criteria
for determining whether or not partisan political activity
is directed toward party activity or an individual's own
candidacy. One such approach that may be considered in
connection with the Commission's Advisory Opinion in this
matter and as a basis for any proposed regulation in this
area is as follows:
The cost of promotional or other
partisan activites on behalf of a national,
state or local party by a candidate for
federal office, whether or not a holder of
federal office, shall not be attributable
when
as a campaign expenditure by such candidate
if the activity is (1) at the invitation of
such party, (2) for a recognized and legit-
imate purpose on behalf of the party and not
for the purpose of directly raising funds
for such candidate or for the purpose of
influencing his election, provided that,
notwithstanding the above, the costs of any
such activities by a candidate who has
registered and qualified as a candidate or
has been placed on the ballot in the
state in which such activity is held, shall
be deemed an expenditure from the date of
registration, qualification or placement
on the ballot, or, in any event, at any
time such activities are undertaken in that
state within thirty (30) days prior to the
date of an election regarding such candidate
as defined in 2 U.S.C. 431(a).
This approach recognizes the importance and value of
party promotional activity by federal candidates who are also
recognized party leaders, while at the same time providing a
pragmatic time frame within which any such activity would be
deemed candidate related. In addition, of course, any alleged
party activity which is demonstrated to be for the purpose of
FORD & GERALD LIBRARY
Office of General Counsel,
Page 7
Advisory Opinion Section
October 17, 1975
influencing the candidate's own election would be appropriately
allocated and charged against the Act's contribution and ex-
penditure limitations. This is in accordance with the approach
recently discussed by the Commission regarding "unearmarked"
contributions to the national committee of such a candidate.
Accordingly, we have herein established that payment
by the RMC of expenditures incurred by the President and his
aides, when solely engaged in national, state or local
political party promotional activities, are not subject at
this time to the Act's contribution and expenditure linità-
tions. lience, the Commission should confirm in its Advisory
Opinion that it is legally permissible for the RNC to continue
to make such expenditures. In any event, the Commission's
opinion in this matter can have only a prospective effect.
Supporting this proposition, the statutory language
of Section 437£ which authorizes the Commission to render
Advisory Opinions, clearly states that Advisory Opinions look
only to future and not past acts:
"Upon written request to the Commis-
sion
the Commission shall render an
advisory opinion, in writing, within a
reasonable time with respect to whether
any specific transaction or activity
would constitute a violation
2 U.S.C. $437f(a) (emphasis added)
The words "would constitute" do not emcompass nets that
occured in the past. As the Comptroller General of the
United States has frequently ruled, the question of retro-
activity is strictly a function of the interpretation of the
relevant statute in question. (See, c.9. 49 Comp. Gen. 505
(1970), 48 Comp. Gen. 477 (1969), 48 Comp. Gen. 1.5 (1968) and
47 Comp. Gen. 386 (1968).) Accordingly, the conclusion that
all Advisory Opinions must be solely prospective in appli-
cation is compelling.
FORD
GERALD
LIBRARY
Office of General Counsel,
Page 8
Advisory Opinion Section
October 17, 1975
Moreover, assuming, arguendo, that Advisory Opinions
are not statutorily limited to matters of prospective appli-
cation, the Commission still has full discretion to limit
its opinions to matters in the future. The United States
Supreme Court, in Chenery V. SEC, 332 U.S. 194 (1947), held
that an agency of the federal government may, in its discre-
tion, give a ruling prospective effect only. The Court
stated that the agency, in exercising this discretion, should
follow a balancing test, which involves weighing
11
the
mischief of producing the result which is contrary to a
statutory design or to legal and equitable principles"
against "the ill effect of the retroactive application of
a new standard
11
332 U.S. at 203.
At issue here is the application of the Act's contri-
bution and expenditure limitations set forth in 18 U.S.C. 608
to a Presidential candidate's travel for party purposes.
Title 18, of course, is a criminal statute and provides for
extensive criminal penalties including imprisonment and fines.
As with all criminal statutes, a principal feature of that
section is that a violation cannot occur unless it is a
"knowing violation". In this respect, subsection (h) of
Section 608 states as follows:
"No candidate or political committee
shall knowingly accept any contribution or
make any expenditure in violation of the
provisions of this section. No officer or
employee of a political committee shall
knowingly accept a contribution made for
the benefit or use of a candidate, or
knowingly make any expenditure on behalf of
a candidate, in violation of any limitation
imposed on contributions and expenditures
under this section."
18 U.S.C. §608 (h) (emphasis added)
Thus, it is impossible to conclude that the RNC or PFC were
ever on notice that there may have been a "knowing violation"
of the law. Indeed, the Commission has still not in any way
ruled upon the question now before it and any Advisory Opinion
must be applied prospectively.
&
FORD
GERALD
LISRARY
Office of General Counsel,
Pagé 9
Advisory Opinion Section
October 17, 1975
The enforcement powers of the Commission set forth in
2 U.S.C. $437g, establish that the Commission may not order
repayment of any such past payments in any event for a viòla-
tion of Section 608. Apparent violations of Section 608 are
to be referred to the appropriate law enforcement authorities.
The Commission would be committing an abuse of discretion if
it should attempt to retroactively apply any new standard
against the PFC or the RNC in this instance.
Additionally, the PFC and the RNC have at all times
acted in good faith and in accordance with their understanding
of the law. The RNC expenditures in question have been filed
quarterly with the Commission, the Clerk of the House of
Representatives and the Secretary of the United States Senate.
It would, therefore, be unfair and an unconstitutional denial
of due process to apply a new legal standard or presumption
before the PFC or RNC have been on notice that their position
is not in accordance with the Commission's view of the law.
Finally, a review of certain additional pragmatic
considerations appears appropriate for the Commission's con-
sideration. Allegations that the recognition of the role of
political parties in the maintenance and development of a
viable political structure in the United States would (a)
work an unfair burden upon non-incumbents and (b) allow
unlimited corporate and labor organization spending for
federal candidates, through the general treasuries of state
party committees are both misleading and fallacious. As
a general policy matter, as well as pragmatic political
practice, the 1974 Amendments were not intended (nor should
they have been) to provide a perfect cosmic balance on
which both incumbents and non-incumbents must be evenly
weighed. Again, as noted in Mrs. Smith's letter, the ques-
tion presented does not revolve solely upon the President's
role as the RNC's chosen party leader but involves any party
leader. The fact that such party leaders are generally
incumbent officeholders is merely a reflection of the
public's real life interest in recognized elected leaders
R.
FORD
GERALD
LIBRARY
Office of General Counsel,
Page 10
Advisory Opinion Section
October 17, 1975
and public figures. Non-incumbents are necessarily faced
with the traditional obstacle and challenge of name recog-
nition and acceptance. Further, the burdens of incumbency
are all too quickly and easily forgotten by those who would
seek to mystically equalize the political system to their
own advantage. An incumbent has the obligation to speak
and act responsibly toward his constituency and to repre-
sent their best interests in the harsh world of decision
as opposed to the speculation and mere promise of the non-
incumbent.
Similarly, the alarm sounded regarding corporate and
labor organization spending is false and a sham. The Commis-
sion has already indicated that state parties will have to
maintain separate, segregated funds regarding any support
for federal candidates, which funds must exclude monies
from corporations and labor organizations that may be
accepted by them under state law for state and local candi-
dates and activities. Full disclosure and exacting reporting
requirements of such funds will avoid any such anticipated
and feigned abuse. Accordingly, only legitimate state party
business activities would be financed from the general
treasuries of such state parties. Section 610 of Title 18,
United States Code, would properly have no application to
such legitimate state activities.
In conclusion, we appreciate the opportunity afforded
the PFC to comment on the above-referenced Advisory Opinion
Request and we trust that these comments may prove useful
in assisting the Commission in arriving at its determination
in this matter.
Sincerely,
THE PRESIDENT FORD COMMITTEE
Robert P. Visser, General Counsel
Ryan
T. Timothy Ryan, Assistant
General Counsel
For Presider.
Sen. Paul Laxalt
Chairman
John P. Sears
Exec. Vice Ch.
George Cook
October 14, 1975
H. R. Gross
Louie B. Nunn
Mrs. Stanhope C. Ring
Henry Buchanan
Treasurer
Federal Election Commission
Office of the General Counsel
Advisory Opinion Comment
1325 K Street, N.W.
Washington, D.C. 20463
Dear Sirs:
We respectfully submit the following comments on AOR-1975-72.
We hope this will be helpful to the Commission.
AOR 1975-72 raises the question of whether the Republican
National Committee (RNC) can legitimately provide funds, in light of
the recent federal election law amendments, for political travel by
President Ford while he is a candidate for his party's presidential
nomination. And further, whether these expenditures count against
candidate Ford's campaign expenditure limitations under 18 U.S.C.
section 608(c). It appears to our committee that several facts must
be considered before a conclusion on the RNC's request can be reached.
First, President Ford is an announced and declared candidate
for his party's nomination. He has, as of this date, made campaign
trips and authorized a committee which has made campaign expenditures
on behalf of his campaign. He indicated on a nationally televised news
11
conference (October 9, 1975) that he hoped his political trips made on
behalf of the RNC would help his election. He has made the decision
to actively campaign at an earlier date than has been the customary
political practice of past incumbent Presidents.
general
FORD & GERALD LIBRARY
2021 L St., N.W., Suite 340, Washington, D.C. 20036.
Phone: 202/223-8560
Federal El ion Commission
October 14, 1975
Page Two
Second, Gerald R. Ford was the first individual appointed to the
Vice Presidency under the provisions of the recently enacted 25th
Amendment. Following the resignation of Richard M. Nixon as President,
Gerald R. Ford succeeded to that office. His Vice President, Nelson A.
Rockefeller, also became such by the operation of the 25th Amendment,
after having been rejected for the Republican presidential nomination
by the Republican National Conventions of 1964 and 1968. These facts
are quite important in providing some political perspective to the
relationship of the Presidency, its current occupant, and the Republican
Party.
Third, there is an active political committee in existence,
authorized by Governor Reagan, and registered with the Federal
Election Commission, that has raised significant amounts of money
from many thousands of persons in every state. This committee is
actively promoting the candidacy of Governor Ronald Reagan for the
Republican Party's presidential nomination.
Fourth, one of the basic purposes of the 1974 amendments to the
body of federal election law is to insure that no candidate, regardless
of his position or financial means, could "buy" the Presidency by means
of excessive financial expenditures. To this end, the key provision of
the 1974 Act is 18 U.S. C. section 608. This section imposes strict
expenditure limitations on all candidates for federal office. The
purpose of these limitations is, in part, to provide every candidate
with an equal opportunity to present his campaign to the electorate.
Fifth, a key criticism of the new election law is that it favors
incumbents in that it protects them against challengers. This is so,
many feel, because a challenger can only overcome the multiple
advantages of incumbency by greater campaign spending than the
incumbent. It is certainly true that an incumbent President enjoys
great political advantages by virtue of his official position, advantages
such as government-paid travel around the country to "non-political
events" and the national forum of the televised Presidential press
conference (recently exempted from equal time by the Federal
Communications Commission). Does he also, in a primary campaign
situation, enjoy the official mantle of the party and use of its funds
merely by virtue of his title
FORD & GERALD LIBRARY
ederal Elec Commission
October 14, 75
Page Three
With these basic factual referents in mind we submit the following
analysis of the RNC's request:
Traditionally an incumbent President seeking reelection has been
considered unchallengable within his own political party for his party's
nomination. No incumbent President in this century has been denied
renomination by his party. In fact, so strong is the traditional role of
the incumbent President that only twice in this century has one been
defeated in a general election. In 1975 and 1976 the situation in this
country is and will be unique politically. The incumbent President and
Vice President of the Republican Party have never faced the national
electorate or, in the case of President Ford, the Republican Party
membership as expressed through its national party convention.
Thus, President Ford is clearly not in the same position as former
Republican Party presidents were. In fact, it is clear that one of the
important factors in the 1976 nomination contest is the current lack of
a nationally chosen mandated Republican Party "leader" in the
traditional sense. The Republican Party's only elected national
spokesman is its chairman, Mrs. Mary Louise Smith.
Authay
soft
Thus, while Gerald R. Ford is legally and constitutionally the Chie₁
Executive, with all the President's powers and privileges, and entitled
to all the traditional support and respect due our Head of State, he does
not stand in the traditional role an incumbent President has had as the
titular leader of the Republican Party. Further, actions that tend not
only to place him in such a role but also to emphasize it directly
benefit his campaign for the party's nomination for President. In
fact, a key selling point of the President's campaign has been his
incumbency. To argue that his campaign for the nomination should not
be hindered because of his activities as "party leader, " is very
like the boy, who having killed his parents, says he should not be
C
punished because he is an orphan.
Only the 1976 nominee of the Republican National Convention will
be the party's chosen leader.
The 1974 amendments to federal election law mandate strict
expenditure limitations for all federal candidacies. They do this
separately with respect to candidates for the nomination of parties and
&
FORD
GERALD
LIBRARY
Federal El tion Commission
October 14, 1975
Page Four
for the candidates of parties in general elections. Further, the law
embodies a very expansive and comprehensive definition of contributions
and expenditures so as to close nearly every potential loophole left in
past legislative attempts at regulation. This legislative plan clearly
manifests the intent of Congress, as ratified by President Ford in
signing the law, to establish a system of electoral regulation that would
control, limit and disclose all expenditures that promote and influence a
federal campaign. It cannot be seriously argued that political trips made
by a declared candidate, as "leader" of a political party, directed at
those very individuals who will ultimately choose the party's nominee,
does not directly benefit and influence and promote such candidate's
campaign. If President Ford's campaign is not charged with the
cost of trips made as the "leader" of the Republican Party under these
circumstances then section 608 is not the comprehensive expenditure
limitation section it clearly was intended to be.
If the Commission's interpretation of this new law is not to favor
incumbents over other candidates and if the traditional relationship
of the Presidency to its own political party is not to become a vehicle
for allowing the new election law to be gravely distorted then the RNC's
planned actions must be modified. It would certainly be divisive within
the Republican Party if the RNC were to bestow a non-reportable and
uncontrolled election benefit on only one candidate for the party's
nomination. This would raise constitutional questions of whether 18
U.S.C. section 603's effect, if not its purpose, is to stifle legitimate
political challenges to incumbents from within their own parties.
If the party provided truly equal treatment to all candidates for
its nomination then few serious objections could be raised. Then, the
party would not be promoting a campaign but would be providing its
national membership with a better opportunity for seeing all its candidates.
It would be performing a legitimate informational function by helping
members to make more intelligent choices among the candidates.
While a TV appearance by one candidate benefits his campaign, a program
presenting all of the candidates equally benefits the electorate. Of
course, a fair and equitable mechanism would have to be worked out
to determine who the individuals are who are legitimately entitled to
such consideration. But this should not be difficult. A simple criterion,
like qualification for federal matching funds, would provide an adequate
method for discriminating between bona fide candidates and others.
&
FORD
GERALD
LIBRARY
t ederal Election Commission
October 14, )75
Page Five
If the RNC chooses not to consider such an option it seems to our
committee that its current proposal raises serious questions under both
the contribution limitations and the expenditure limitations of section 608.
I
If party "leadership" is to confer substantial financial electoral benefits
it should be both formalized and brought within the guidelines of the
election law. Governor Reagan has over the past years raised millions
of dollars for the Republican Party at numerous party events across the
nation and by direct mail. 'He has done this as a member of the party
who deeply believes in its principles. Our committee feels that the party
treasury, built up in the interests of the whole party, should not become
a vehicle for any single candidate in contest for the party's nomination,
regardless of any office he may hold.
In 1975 and 1976 a new federal election law prevails. Examples
of past practice no longer suffice to justify present actions. We hope
our comments will aid the Federal Election Commission in deciding
this question.
Very truly yours,
Leen
Loren A. Smith
General Counsel
LAS:jf
cc: Hon. Thomas B, Curtis
Hon. Neil Staebler
Hon. Joan Aikens
Hon. Thomas E. Harris
Hon. Vernon W. Thomson
Hon. Robert O. Tiernan
Hon. Benton L. Becker
Hon. Mary Louise Smith
FORD & LIBRARY GERALD
THE WHITE HOUSE
WASHINGTON
September 3, 1975
Dear Mr. Curtis:
This is in response to Notice 1975-38 (F.R. 40202) in which
the Federal Election Commission has sought comments concern-
ing a request from the campaign manager for Mr. Louis Wyman
for an opinion of the FEC General Counsel on several questions
relating to possible travel by "President Ford and former
Governor Reagan" to New Hampshire for the purpose of endorsing
Mr. Wyman in the September 16, 1975, special Senatorial election.
The General Counsel has proposed for Commission review an
opinion responding to this request which states, in part, as follows:
"Presidential expenditures in connection
with such a visit provide unique problems of
attribution. It would be illogical, and un-
necessarily restrictive, to require the attribution
of the actual cost of a presidential campaign
foray. Hence, only the equivalent commercial
rates will be chargeable against an incumbent
President's individual contribution limitations
and against the candidate's overall expenditure
limitation. Expenses for accompanying staff
personnel will be charged against the foregoing
limitations only if such staff personnel serve
primarily as advance persons or other campaign
staff members and do not provide support services
to the Office of the President. Additionally, special
costs attendant upon Ford's office as President,
such as the Secret Service, police and medical
attention, are not to be included within this
amount. These costs are relatively fixed and
are related to Ford's position as President and
not to his political function as head of his
party. "
FORD & GERALD LIBRARY
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In the form of comment on this one provision, we wish to bring
to your attention the manner in whi ch we intend to apportion
the various costs incurred to operate government-owned aircraft
on which the President and accompanying government personnel
travel to and from localities where the President appears for
other than official purposes. As the General Counsel's proposed
opinion indicates, expenditures for such travel by the President
present problems that are unique to his Federal office, in that
the President must continue to perform in his official capacity
at the same time he undertakes political activities.
For this reason, whenever the President travels, regardless of
the purpose of the particular trip, he is accompanied by a number
of persons who are present to support him in his official role.
For example, certain members of the White House staff, military
aides, medical aides, Secret Service and communications personnel
are present not for any political purpose, but solely to provide the
President with support which in many cases they are required by
law to perform. The Secret Service, in particular, is required
by P.L. 90-331 to provide protection to "major Presidential and
Vice Presidential" candidates at the direction of the Secretary of
the Treasury and on the basis of consultation with an advisory
committee of bipartisan congressional membership.
(1) Costs of Operating Government-Owned Aircraft
on Political Trips
When the President travels on a trip which entails
only political stops, the cost of operating the Government-owned
aircraft that are used to transport the President can be readily
determined from the enclosed hourly rate schedule, used by the
Department of Defense to recover its costs from other government
agencies that use military aircraft. In our view, the costs of
transporting any persons aboard the aircraft who are traveling for
political purposes should be borne by the appropriate political
committee. On the other hand, the costs of transporting those
persons who are traveling for the purpose of supporting the Office
of the President should not be attributed to a political committee.
For the purpose of the President's future travels, we will identify
those individuals who could be considered to be present for a
FORD & GERALD LIBRARY
I
-3-
political purpose. We plan to treat as political travelers the
President and First Family, political committee officials, certain
White House and other officials, who may perform some political
activities, and any other persons whose activities could be viewed
as political. Although White House officials are present for official
support activities, and generally spend a substantial majority, if
not all, of their time on official business, we intend to consider
the following categories of officials to be political for the purpose
of such travel: White House officials who may advise on political
matters (e.g., Donald Rumsfeld, Robert Hartmann, John Marsh,
Ron Nessen, Richard Cheney, etc.), speechwriters, advancemen,
and a White House photographer.
The remainder of the White House personnel is present for the
purpose of supporting the President in his official capacity, e.g.,
a civilian aide or personal secretary, along with non-White House
support personnel, e.g., the Secret Service, military aides,
medical and communications personnel, etc. They are not
present for any political purpose, and the costs of their travel
should not be attributed to a political committee. In this regard,
it is our understanding that in 1972 the Secret Service paid up to
the cost of comparable first-class airfare for its agents traveling
on board chartered aircraft of non-incumbent Presidential candidates.
Therefore, on future Presidential travel the appropriate political
committee will be charged by DOD for its pro rata share of the
hourly costs of using government-owned aircraft, based on the
percentage of the passengers on board who are present mainly
or in part for a political purpose.
(2) Costs of Operating Government-Owned Aircraft
on Mixed Official-Political Trips
In most cases, it is not possible to schedule the
President's travel in a manner that will allow trips to be solely
official or solely political. We believe that the best formula for
apportioning the transportation costs on mixed official-political
purpose trips is one which may be referred to as the "round trip
airfare formula. " Under this formula, the political stops are
-4-
isolated from the official stops in order to establish the political
trip that would have been made if the President did not have the
responsibilities of his office. For this purpose, where a particular
stop includes both official and political events, it will be treated as
a political stop. A stop will be regarded as official when that is
its main purpose, even though the President may meet, incidental
to the official event, with political figures in an informal and
unpublicized meeting, e.g., a private breakfast with a local
political figure or greeting a small group of local politicians.
Once the political stops of such a trip have been determined, DOD
calculates the cost of that "political" trip and charges the appro-
priate political committee for its share, as described above, of
the costs of the trip, based on the round trip flying time between
the initial point of departure, generally, Washington, D. C., and
the political stops made. An example might help to clarify this
approach. Suppose the President makes a trip from Washington
to San Francisco for official purposes, then to Los Angeles for
political purposes, and returns to Washington via St. Louis where
a stop is made for official purposes. Under this formula, the
appropriate political committee is charged for its pro rata share
of the hourly costs of a trip from Washington to Los Angeles and
return to Washington, even though there was no direct Washington
to Los Angeles leg of the flight.
(3) Other Travel Costs
In order to assure that all costs related to the political
portion of a trip are treated as political costs, the appropriate
political committee will be charged the expenses for each political
stop of any member of the Presidential party who is present
mainly or in part for a political purpose, as determined above.
Thus, political funds will pay the expenses of the President and
these other officials, but not the expenses of those persons who
are present to support the President entirely in his official capacity.
Such items as communications arrangements, motorcades,
automobile rentals, and other miscellaneous items are readily
identifiable as to their purpose, and are to be paid by the appro-
priate political committee when they are for political purposes.
FORD i GERALD LIBRARY
-5-
Where an item, such as the cost of a bus for a motorcade involves
a mixed purpose, e.g., transporting the members of the Presidential
party who are considered to be present for a political purpose, and
also those serving the President in his official capacity, the appro-
priate political committee will bear the full cost of that item.
In every case where a candidate for Federal office is an incumbent,
either in an office to which he seeks re-election or in another
office, his campaign activities may become intermingled with
his official activities, and similar problems will arise in ascertain-
ing which costs he incurs are campaign-related. The proposals
herein made provide a reasonable method for resolving such
problems.
(4) Services of Government Personnel
For the purpose of identifying the costs of travel to be
borne by the appropriate political committee, we understand that
it is not necessary to apportion the salaries of those members of
the personal staffs of incumbent candidates for Federal office
within either the Executive or Legislative Branches who, in
addition to their official duties, also participate in some limited
political activities. For example, employees "paid from the
appropriation for the office of the President "are exempted by
5 U.S.C. 7324(d)(1) from the general prohibition contained in
5 U.S.C. 7324(a)(2) against Executive Branch employees participat-
ing in "political management or in political campaigns. 11 This
section effectively places the White House staff in a position
comparable to that of the personal staffs of members of Congress.
No precise dividing line now exists, nor is one likely to be drawn,
which clearly indicates when such employees are performing
official duties and when those duties are political. So long as
these employees expend a substantial majority (an average in excess of
forty hours per week) of their time on official duties, there is
no need to attribute any portion of the salaries of such employees
to a political committee.
The reason for this letter is to bring to the Commission's attention
the means by which we intend to attribute to a political committee
the costs of the President's travel for purposes of support of the
FORD & LIBRARY GERALD
Republican Party, support of specific candidates, or support of
his own candidacy. To the extent this treatment may be different
from that proposed by the General Counsel, we do not imply that
a change need be made in the proposed opinion of such counsel.
Rather we believe that the proposed opinion is consistent with the
requirements of the applicable law and that if a more liberal
attribution of expenses is made to a political committee such is
within a candidate's discretion.
We intend to now implement with respect to future travel by the
President, this treatment for attribution of such travel costs.
We would appreciate very much any comments or suggestions
the Commission may think are appropriate to make with respect
to our treatment of the President's travel costs.
Sincerely,
Buchen
Philip Buchen
Counsel to the President
The Honorable Thomas B. Curtis
Chairman
Federal Election Commission
Washington, D.C. 20463
FORD & GERALD LIBRARY
of
Enclosure
27000 (Air Force One) (VC-137C)
Cost per hour:
$2,206.00
Passengers:
Approximately 50
26000 (Air Force One backup) VC-137C)
Cost per hour:
$2,206.00
Passengers:
Approximately 50
Jet Star (VC-140)
Cost per hour:
$ 889.00
Passengers:
8
White Top Helicopter (VH-3A)
Cost per hour:
$ 723.00
Passengers:
12
Huey Helicopter (VH-IN)
Cost per hour:
$ 262.00
Passengers:
8
FORDO & GERALD LIBRARY
MEMORANDUM
October 27, 1975
TO:
Stu Spencer
FROM: Bob Visser
RV
RE:
Presidential Travel Expenses
Attached hereto is a column by Lyle Denniston which
was published in the October 24 issue of the WASHINGTON STAR
regarding proposed FEC action concerning payment by the
RNC of Presidential travel expenses in connection with
Republican Party activities. In particular, the article
alleges that the "Ford argument on the issue is not likely
to prevail". This conclusion is in error in several respects.
First, both Tim and I attended the FEC hearing regarding
this issue and were pleased to learn that a majority of the
Commissioners had indeed adopted the compromise approach put
forth in my letter dated October 17. In that letter, we took
the position, in general, that Ford's travel expenses as a
party leader should be reimbursed when he is acting at
the request of and for the benefit of the political party
rather than asking directly for votes and money for himself.
No attempt has been made by the PFC to isolate Ford's position
as "The head of the Party" in the legal context other than to
acknowledge that the Republican National Committee has designated
him as "The" head of the Party and, at least, certainly a
principal spokesman of the Party in connection with their
fundraising activities. Moreover, the compromise position
set forth in our letter recognizes that at some point in
time it is impossible to analyze Ford's activities on a
"case by case" basis and that some reasonable formula or time
frame must be established wherein it is presumed that the
President is acting in his capacity as a Presidential
candidate and not that of a party leader.
In sum, the WASHINGTON STAR article indicates that the
President is losing on this issue where in fact it would
appear that our position is being adopted by the Commission and,
FORD & GERALD LIBRARY
- 2 -
in particular, by several of the Democratic members of that
Commission. I would recommend that Peter Kaye discuss this
issue with me and determine whether or not he wishes to
telephone Mr. Denniston and advise him of the facts of
this matter.
CC:
Bo Callaway
Dave Packard
Bob Moot
Peter Kaye
FORD & GERALD LIBRARY
FEC Leans Toward Cut-Off
Ford May Lose GOP Funds
By Lyle Denniston
Washington Star Staff Writer
THE FEC general coun-
Curtis, saying he was
IT IS NOT clear, how-
sel, John G. Murphy Jr.,
"just thinking out loud,"
ever, that this provision
The Federal Election
warned the commissioners
also suggested that the
would settle whether Ford
Commission probably will
that "the result has to treat
1
FEC might require some
or the Republican party
not allow the Republican
National Committee to con-
everyone the same, or the
arbitrary sharing formula,
should pay his expenses
tinue to pay for all of Presi-
commission will end up in
such as 50-50 between
when he does do political
court.
Ford's campaign organiza-
traveling.
dent Ford's political
Commissioner Joan
tion and the Republican
Besides going over the
travels.
Aikens, whose vote on the
party.
presidential travel issue,
EEC
DEMOCRATIC SENATORIAL CAMPAIGN COMMITTEE
ROOM 130 RUSSELL SENATE OFFICE BUILDING
WASHINGTON. D. C. 20510
SENATORS:
ROBERT THOMSON
TELEPHONE (202) 224-2447
GENERAL COUNSEL
J. BENNETT JOHNSTON. JR.. LA.. CHM.
MIKE MANSFIELD. MONT.. EX OFFICIO
FRANK N. HOFFMANN
ROBERT C. BYRD. W. VA., EX OFFICIO
EXECUTIVE DIRECTOR
LLOYD BENTSEN, TEX., EX OFFICIO
SECRETARY-TREASURER
EDMUND S. MUSKIE, ME., EX OFFICIO
JAMES ABOUREZK. S. DAK.
JOSEPH R. BIDEN. JR., DEL
DALE BUMPERS. ARK.
ALAN CRANSTON. CALIF.
THOMAS F. EAGLETON. MO.
JOHN GLENN. OHIO
GARY HART. COLO.
ERNEST F. HOLLINGS. S. c.
WALTER D. HUDDLESTON. KY.
DANIEL K. INOUYE. HAWAII
WALTER F. MONDALE. MINN.
September 3, 1975
SAM NUNN. GA.
JENNINGS RANDOLPH, W. VA.
JOHN SPARKMAN. ALA.
The Honorable Thomas B. Curtis
Chairman
Federal Election Commission
1325 K Street, Northwest
Washington, D. C. 20463
Dear Chairman Curtis:
We have received your letter of August 28 soliciting our comment
on an inquiry from the Wyman campaign and a proposed response to that
inquiry by the General Counsel. While agreeing with much of the General
Counsel's proposed draft, we must register our strong objections to at least
two points. We disagree with the contention that the "expenses (for Ford's
New Hampshire trip) should be attributed solely to the Wyman Senatorial
campaign.' Furthermore, we do not think the computations of any contribution
or expenditure resulting from such a trip should be based on "equivalent
commercial rates."
The General Counsel proposes that expenditures for a trip by
President Ford to New Hampshire in September of 1975 be attributed solely to
the Durkin-Wyman Senatorial election on September 16, completely ignoring any
impact such a trip will have on the President's expected candidacy in the
nation's first Presidential primary a mere five months away. While admitting
that the President's trip will have a "carryover effect" on his Presidential
campaign, the General Counsel refuses to attribute any of the expenditure to
the Presidential campaign because "the maximum effect" will be on the more
proximate election.
This is clearly erroneous. If the trip will aid President Ford as a
candidate in the March 2 primary, then part of the expense for the trip must
be attributable to that election. Under Section 591 and Section 608 of Title
18, U. S. Code, a payment that influences the nomination for election of any
person to Federal office must be charged against the contribution and expenditure
limits applicable to such person. The statute does not allow an "expenditure"
with admitted impact on one's candidacy to be totally ignored simply because
its "major impact" is on the candidacy of another.
&
FORD
GERALD
LIBRARY
The Honorable Thomas B. Curtis
September 3
Page 2
The General Counsel's opinion would open up a huge loophole in
the contribution and expenditure limits for President Ford. In 1976, there
will be Senate races in 33 states. There will be elections for the House
in every stàte. Is the General Counsel suggesting that the President may
campaign in each of these states for his party's Congressional candidates
with no impact on his own expenditure and contribution limits. Or, worse
yet, is he suggesting that his novel ruling should only be applied to the
special circumstances of the New Hampshire Senatorial election, thereby
discriminating against Presidential candidates who may choose to visit New
Hampshire after September 16? To guarantee a viable and even-handed appli-
cation of the Section 608 limits, it is plain that some portion, we believe a
substantial portion, of the expenses for a Ford trip to New Hampshire must be
attributed to his March 2 primary campaign.
When deciding what percent of the expenditure must be attributed to
the Presidential campaign, the Commission cannot ignore the extreme importance
of the New Hampshire primary to President Ford. Besides being the nation's
first, it is generally recognized as a unique means of testing a Presidential
candidate's appeal to a relatively conservative electorate. For one reason or
another, many political commentators claim that Lyndon Johnson chose not to run
in 1968 because of the results of the New Hampshire primary. Others claim that
the New Hampshire experience had a profound impact on leading contenders for
the 1972 Democratic Presidential nomination.
Whatever the truth of these observations, it is indeed astonishing
that the General Counsel's allocation formula would hold that a Ford trip to
New Hampshire only five months before the election provides no benefits
whatsoever to the President's reelection campaign. The benefits are clear
and beyond dispute. We believe that at least 50% of the expenses for the trip
should be attributed to the Ford primary campaign.
The problem of which expenses must be counted is more complex. We
understand that the Republic National Committee plans to pay many of the
expenses of the trip. As is the custom, the Federal government may also pay
expenses and salaries for Secret Service protection, medical personnel, and
accompanying staff, as well as additional expenses for support of the President
in his official capacity.
We believe the Federal campaign laws require that all such travel
expenses paid by political committees or private individuals be deemed
"contributions" or "expenditures." By requiring a political committee rather
GERALD R. FORD LIBRAPA
The Honorable Thomas B. Curtis
September 3, 1975
Page 3
than the Federal government to pay certain travel expenses for his trip,
the President himself establishes a presumption that those travel expenses
are for political purposes. Furthermore, no one would dare deny that
expenses, openly billed as "political", for a Presidential visit to New
Hampshire next month are with respect to either the September 16 Senatorial
election or the March 2 primary. Such expenses payments are "expenditures"
or "contributions" under the most conservative interpretation of Section
591 (f) or Section 591 (c) of Title 18.
Those sections contain many exemptions, but none that allow a
political committee to count for purposes of the contribution and expenditure
limits only a fraction of its travel expense payments "equivalent (to)
commercial rates" as a charge against Section 608 limits.
If the Republic National Committee charters Air Force One to
carry the President to New Hampshire for a campaign(s), the full charter
payment must be deemed an "expenditure" or "contribution" subject to the
limits, not just the price of commercial air fare to New Hampshire.
Of course, Section 608 contains many limits, one of which allows
national committees of a political party to make expenditures on behalf of
the party's Senate candidate in a state equal to two cents times the voting
age population in such state. See, 18 USC §608 (f) (3). Thus, as the General
Counsel suggests, the Republican National Committee can pay the portion of
the President's travel expenses that are attributed to the Wyman campaign,
as long as those payments, plus other expenditures to the Wyman campaign for
this election, do not exceed the Section 608(f) (3) limits.
However, if the National Committee chooses to pay the portion of the
President's travel expenses allocated to his own primary campaign, then the
Committee will have made a "contribution in-kind" or "expenditure on behalf
of" the Ford campaign. Since the National Committees have no special ex-
penditure limits for Presidential primary candidates (See, 18 USC §608(f) (2)),
the basic political committee limits apply. Thus, the National Committee can
make a total of $5,000 in contributions in-kind to the Ford primary campaign
or independently spend a total of $1,000 on behalf of the President's primary
bid (See, 18 USC88608 (b) (2), 608(e)).
For purposes of the limits, such contributions or expenditures must
be added to similar payments that the National Committee has made in the past
with respect to the President's pre-primary political travels. We understand
there have been several.
FORD i GERALD LIBRARY
The Honorable Thomas B. Curtis
September 3, 1975
Page 4
Thank you for the opportunity to comment on the proposed Letter
of Counsel. I trust the Commission will change the proposed letter
substantially before it is issued.
Very truly yours,
J. BENNETT JOHNSTON
Chairman
Democratic Senatorial
Campaign Committee
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LET THE PEOPLE RULE
(Remarks by the Honorable Ronald Reagan, former
Governor of California, to the Executive Club of
Chicago, McConnick Place, Chicago, Illinois,
Friday, September 26, 1975.)
In his first Inaugural, nearly a century and three-quarters ago,
President Themas Jefferson defined the aims of his administration: "A
wise and frugal government", he said, "which shall restrain men from
injuring one another, shall leave them otherwise free to regulate their
cwn pursuits of industry and improvement, and shall not take from the
mouth of labor the bread it has earned - - This is the sum of good
government."
Jefferson believed the people were the best agents of their own
destinies, and that the task of government was not to direct the people
but to create an environment of ordered freedom in which the people could
pursue those destinies in their own way. But he also knew that from the
very beginning the tendency of government has been to become player as
well as unpire. "What has destroyed liberty and the rights of men in
every government that has ever existed under the sun?" Jefferson asked.
"The generalizing and concentrating all cares and powers into one body."
If Jefferson could return today, I doubt that he would be surprised
either at what has happened in America, or at the result. When a nation
loses its desire or ability to restrain the growth and concentration of
power, the floodgates are open and the results are predictable.
Fiscal Year 1976 ends four days before our bicentennial. In this
fiscal year, government at all levels will absorb 37 percent of the
Gross National Product and 44 percent of our total personal income. We
destroy the value of our pensions and savings with an inflation rate that
soars to 12 percent a year, at the same time we suffer unemployment rates
of eight and nine percent.
Every minute I speak to you the Federal Government spends another
$700,000. I'd stop talking if they'd stop spending, but Washington is
spending a billion dollars every day and goes into debt a billion and a
third dollars every week. I don't think it would surprise Jefferson to
learn that real spendable weekly income of the average American worker is
lower than it was a decade ago - - even though in these 10 years that
same worker has increased his productivity 23 percent. AS Jefferson said,
that is taking from the mouth of labor the bread it has earned.
If government continues to take that bread for the next 25 years at
the same rate of increase it has in the last 40, the percent of GNP govern-
ment consumes will be 66 percent - - two-thirds of all our output - - FORD
by the and of this century. A single proposal now before Congress, Senator
Kennedy's national health insurance plan, would push the share of GNP
consumed by government from 37 to more than 45 percent, all by itself
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This absorption of revenue by all levels of government, the alaming
rate or inflation, and the rising toll of unemployment all stom from a
single source: The belief that government, particularly the Federal
Government, has the answer to our ills, and that the proper method of
dealing with social problems is to transfer power from the private to the
public sector, and within the public sector from state and local govern-
ments to the ultimate power center in Washington.
This collectivist, centralizing approach, whatever name or party
label it wears, has created our economic problems. BY taxing and consuming
an over-greater share OE the national wealth, it has imposed an intolerable
burden of taxation on American citizens. By spending above and beyond
even this level of taxation, it has created the horrendous inflation of
the past decade. And by saddling our economy with an ever-greater burden
of controls and regulations, it has generated countless economic problems,
from the raising of consumer prices to the destruction of jobs, to choking
off vital supplies of food and energy.
As if that were not enough, the crushing weight of central government
has distorted our federal system and altered the welationship letween the
levels of government, threatening the freedom of individuals and families.
The states and local communities have been demeaned into little more than
administrative districts, bureaucratic subdivisions of Big Brother govern-
ment in Washington, with programs, spending priorities, and tax policies
badly warped or dictated by federal overseers. Thousands of towns and
neighbórhoods have seen their peace disturbed by bureaucrats and social
planners, through busing, questionable education programs, and attacks on
family unity. Even SO liberal an observer as Richard Goodwin could identify
what he correctly called "the most troubling political fact of our age:
that the growth in central power has been accompanied by a swift and con-
tinual diminution in the significance of the individual citizen, transform-
ing him from a wielder into an object of authority."
It isn't good enough to approach this tangle of confusion by saying
we will try to make it more efficient or "responsive," or modify an aspect
here or there, or do a little less of all these objectionable things than
will the Washington bureaucrats and those who support them. This may have
worked in the past, but not any longer. The problem must be attacked at
its source. All Americans must be rallied to preserve the good things that
remain in our society and to restore those good things that have been lost.
We can and we must reverse the flow of power to Washington; not
simply slow it, or paper over the problem with attractive phrases or cos-
intic tinkering. This would give the appearance of change but leave the
basic machinery untouched. In fact, it reminds me or a short fable of
Tolstoy's: "I sit on a man's back, choking him and making him carry me,
and yet assure myself and others that I am very sorry for him and wish to
lighten his load by all possible means - - except by getting off his back."
What I propose is nothing less than a systematic transfer of authority
and resources to the states - - a program of creative federalism for
America's third century.
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Federal authority has clearly failed to do the job. Indeed, it has
created more problems in welfare, education, housing, food stamps, Medicaid,
community and regional development, and revenue sharing, to name a few.
The sums involved and the potential savings to the taxpayer are large.
Transfer of authority in whole or part in all these areas would reduce the
outlay of the Federal Government by more than $90 billion, using the spend-
ing levels of Fiscal 1976.
With such a savings, it would be possible to balance the Federal
budget, make an initial five-billion-dollar payment on the national debt,
and cut the Federal personal income tax burden of every American by an
average of 23 percent. By taking such a step we could quickly liberate.
much of our economy and political system from the dead hand of Federal
interference, with beneficial impact on every aspect of our daily lives.
Not included in such a transfer would be those functions of govern-
ment which are national rather than local in nature, and others which are
handled through trust arrangements outside the general revenue structure.
In addition to national defense and space, same these areas are Social
Security, Medicare, and other old-age programs; enforcement of Federal law;
veterans affairs; some aspects of agriculture, energy, transportation, and
environment; TVA and other multi-state public-works projects; and certain
types of research.
Few would want to end the Federal Government's role as a setter of
national goals and standards. And no one would want to rule cut a role
for Washington in those few areas where its influence has been important
and benign; crash efforts like the Manhattan and Apollo projects, and
massive self-liquidating programs like the Homestead Act and the land-grant
colleges Certainly the Federal Government must take an active role in
assuring this nation an adequate supply of energy.
Turning back these programs would not end the process of reform in
Washington. In the immediate years ahead:
--- In our regulatory agencies dealing with non-monopoly industries,
we must set a date certain for an end to Federal price fixing and
an end to all Federal restrictions on entry.
-- We must take steps to keep the spending and borrowing of off-
budget agencies under control.
- We must reform our major trust funds to ensure solvency and
accountability. Particularly important is the need to save
Social Security from the colossal debt that threatens the
future well-being of millions of Americans, even while it
overtaxes our workers at a growing and exorbitant rate.
-- We must put a statutory limit on the growth of our money
supply, so that growth does not exceed the gain in productivity.
Only in this way can we be sure of returning to a strong dollar.
-- And we must radically simplify our method of tax collection,
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so that every American can fill out his return in a matter
minutes without legal help. Cenuine tax reform would also make
it more rewarding to save than to borrow, and encourage a wicher
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diffusion of ownership to America's workers.
In the months ahead, T will say more on each of these-major areas of
transfer of Federal programs to the states would mean.
It would be a giant step toward solving the problem of inflation that
is sapping the strength of our economy and cheating American wage-earners
and pensioners. There is no mystery about inflation. It is caused by
spending money that has not yet been earned. Without the enomous pressure
of a 60-to-80-billion-dollar deficit, the Federal Reserve System would have
no mandate to pump too many dollars into the economy - - which is the
ultimate cause of inflation. The Federal deficit provides the chief motive
for the debauching of our dollar.
Add to this the gain in purchasing power that will accrue to all
Americans from a sharp reduction in Federal income taxes - - the biggest
spending burden the average family must absorb. Indeed, taxes of all kinds
are a bigger family expense item than food, shelter and clothing combined.
last year, according to a study by the Joint Economic Committee of Congress,
income taxes at all levels rose by 26.5 percent -- the largest increase of
any item in the family budget. By far the greatest part of this growing
load of taxation is the Federal personal income
whose
bite
gets
sharper
as inflation pushes taxpayers into higher surtax brackets. Covernment
doesn't have to raise the tax rate to profit by inflation. The progressive
income tax is based on the number of dollars earned, not their purchasing
power; thus a cost-of-living pay increase results in a tax increase.
An imediate tax cut, some of which might have to be balanced by
tax rises in the states, would be only the beginning of the savings that
could be achieved. When we begin making payments on the national debt,
we will also Legin making further reductions in the tax burden. American
taxpayers are currently being billed an average of one billion dollars
every ton days just to pay interest on the debt. As the debt is retired,
we can progressively reduce the level of taxation required for interest
payments. Senator Hubert Humphrey, in excusing government spending, once
said, "A billion here and a billion there -- it adds up. Well, it can
work the other way 'round.
With the spending reduction I propose, the Federal Covernment will no
longer be crowding capital markets to finance its deficits. That will make
available billions in new capital for private investment, housing starts,
and job creation -- and the interest rates will come down.
The transfer I propose does not mean that the specific programs in
question are not worthwhile. Many are, though in my opinion many others
are not. But the point is that all these programs are losing effectiveness
because of the Federal Government's pre-enption of levels of government
closer to the problems, coupled with Washington's ability to complicate
everything it touches. The decision as to whether programs are or are not
worthwhile -- and whether to continue or cancel -- will be placed where it
rightfully belongs: with the people of our states.
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It is theoretically possible that local governments will simply
duplicate programs as they now exist, and if that is what the people in
the states desire, that is exactly what will and should occur. Certainly
the bureaucrats who run them now will be available, for they will have no
further work in Washington.
I think it likely, however, that some of the more worthwhile programs
will be retained essentially as they are, many will be dropped, and others
may be modified. But all the surviving programs will be run at much lower
cost than is presently the case.
The present system is geared for maximum expenditure and minimum
responsibility. There is no better way to promote the lavish outlay of
tax money than to transfer program and funding authority away from state
and local governments to the Federal level. This ensures that recipients of
aid will have every reason to spend and none to conserve. They can get
political credit for spending freely, but don't have to take the heat for
imposing the taxes. The French economist Bastiat, 100 years ago, said,
"Public funds seemingly belong to-no one and the temptation to-bestow them
on someone is irresistible."
So long as the system continues to function on this basis, we are going
to see expenditures at every level of government soar out of sight. The
object is to reverse this: to tie spending and taxing functions together
wherever feasible, SO that those who have the pleasure of giving away tax
dollars will also have the pain of raising them. At the same time we can
sort out which functions of government are best performed ac each level.
And that process, I hope, would be going on between each state and its local
governments at the same time.
The transfer of spending authority to Washington blurs the difference
between wasteful states and prudent ones and this too destroys incentives
toward economy. If a state spends itself into bankruptcy on welfare, under
the present system it is bailed out when Washington picks up the tab;
indeed, many Federal programs are geared toward encouraging this kind of
behavior, bestowing greater aid in proportion to spending levels imposed by
the states. The way to get more is to spend more.
By the same token, efforts at state economy are punished under the
present system. A state that keeps its fiscal house in order and, for
example, prevents the welfare problem from getting out of hand will find it
derives no benefits from its action. It will discover, as we did in
California, that efforts to impose some common sense in welfare will run
afoul of Federal bureaucrats and guidelines, Its citizens will be called
upon to pay in Federal taxes and inflation for other states that don't
curb their spending.
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Another benefit of localizing these programs is that state and local
governments are more accessible to the local citizen, and in most cases
prevented by statute from going in debt. When tax increases are proposed
in state assemblies and city councils, the average citizen is better able
to resist and to make his influence felt. This, plus the ban on local
deficits, bends to put an effective lid on spending.
Federal financing is the spenders' method of getting around these
restraints. Taxes are imposed at a level where the government is far away
and inaccessible to the average citizen. The connection between big spending
and high taxes is hidden, and the ability to run up deficits and print more
money makes efforts to control the problem through the taxing side alone
almost meaningless.
The proposals I have outlined will bring howls of pain from those who
are benefiting from the present system, and from many more who think they
are. But as another Frenchman, Thiers, said, "For those who govern, the
first thing required is indifference to newspapers. We must turn a deaf
ear to the screams of the outraged if this nation and this way of life are
to survive: The simple fact is the producing class in this nation is being
drained of its substance by the non-producers -- the taxpayers are being
victimized by the tax consumers. We may be sure that those in Washington
and elsewhere whose life style depends on consuming other people's earnings
while working people struggle to make ends meet, will fight to the last
limousine and curpeted anteroom.
But if we ignore the taxers and the centralizers and do the things I
know we can do, we'll de more than survive: we will inaugurate a new era Of
American diversity.
Take education. The United States built the greatest system of public
education the world has ever known -- not at the Federal level, not even at
the state level, but at the level of the local school district. Until a
few years ago, the people had direct control over their schools how much
to spend, what kind of courses to offer, whom to hire. Is it an accident
that as this local control gave way to funding and control at the Federal
and state level, reading and other test scores have declined? It has
just recently been announced that scores in college entrance exams have been
nose-diving for 10 years and this year took the greatest plunge of all. And
yet, spending on education in that same period has been sky-rocketing. The
truth is, a good education depends far more on local control than on the
amount of money spent.
There is no question but that under local agencies certain abuses took
place and certainly they needed to be cured --- sometimes by Federal inter-
vention. This was certainly true OF racial segregation in the South. But
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now that according to some estimates the South is the most interrated area
of the country -- now that there is an ongoing enforcement structure in
the Department of Justice -- is there any further reason to deny local
control and funding of our schools?
Or take welfare. For years, the fushionable voices have been calling
for a Federal takoover of welfare. (Well, the old-age portions of walfare
have been taken over -- and in the first 18 months, more than a billion
dollars have been paid out by mistake!) If there is one area of social
policy that should be at the most local level of government possible, it is
walfare. It should not be nationalized -- it should be localized. If
Joe Doaks is using his welfare money to go down to the pool hall and drink
beer and gamble, and the people on his block are paying the bill, Joe is
apt to undergo a change in his life style. This is an example of why our
task force in California found that the smaller and more local government
becomes, the less it costs. The more government is localized, the less
you will see a situation like the one in Massachusetts, where a mother of
six was receiving, through cash and services, the equivalent of a $20,000
earned income. That is twice the average family income of the state.
The truth is that people all over America have been thinking about all
of these problems for years. This country is bursting with ideas and
creativity, but a government run by bureaucrats in Washington has no way to
respond. If we send the power back to the states and localities, we'll
find out how to improve education, because some districts are going to
succeed with some ideas and other districts are going to fail with others,
and the word will spread like wildfire. The more we let the people decide,
the more we'll find out about what policies work and what policies don't
work. Successful programs and good local governments will attract bright
people like magnets, because the genius of federalism is that people can
vote with their feet. If local or state governments grow tyrannical and
costly, the people will move. If the Federal Covernment is the villain, there
is no escape.
I am calling also for an end to giantism, for a return to the human scale --
the scale that human beings can understand and cose with; the scale of the
local fraternal lodge, the church congregation, the block club, the farm
bureau. It is the locally-owned factory, the small businessran who personally
deals with his customers and stands behind his product, the farm and consumer
ocoperative, the town or neighborhood bank that invests in the comunity,
the union local.
In government, the human scale is the town council, the board of select-
men, and the precinct captain.
It is this activity on a small, human scale that creates the fabric of
community, a framework for the creation of abundance and liberty. The human
scale nurtures standards of right behavior, a prevailing ethic of what is
right and what is wrong, acceptable and unacceptable.
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Three and a half centuries ago, peoples from across the sea began
to cross to this great land, searching for freedom and a sense of
community they were losing at home. The trickle became a flood, and we
spread across a vast, virtually unpeopled continent and caused it to bloom
with homesteads, villages, cities, great transportation systems, all the
emblems of prosperity and success. And we did this without urban renewal
or an area redevelopment plan. We became the most productive people in the
history of the world.
This hundred years ago, when this process was just beginning, we
rebelled when, in our eyes, a mother country turned into a foreign power.
We rebelled not to overturn but to preserve what we had, and to keep alive
the chance of doing more. We established a republic, because the meaning
of a republic is that real leadership comes not from the rulers but from
the people, that more happens in a state where people are the sculptors
and not the clay.
We are losing that chance today, and we know we are losing it. Two
hundred years ago it was London that turned into-a foreign power, Today,
and it is a sad thing to say, it is Washington. The coils woven in that
city are entrapping us all, and, as with the Cordian knot, we cannot untie
it, we must cut it with one blow of the sword.
In one reference book, cutting the Cordian knot is defined as follows:
"to solve a perplexing problem by a single bold action." The Cordian knot
of antiquity was in Phrygia, and it was Alexander the Great who cut it,
thereby, according to the legend, assuring the conquest of Persia.
Today, the Gordian knot is in Washington, and the stakes are even
higher. But this is a republic, and we have no king to cut it, only we
the people, and our sword has been beaten into ballot boxes. What applies
to the role or government applies equally to the means of changing that
role: leadership is necessary, but even more necessary is popular choice.
The anonymous sage who defined leadership must have lived in a republic,
for he said, "He is not the best statesman who is the greatest doer, but
he who sets others doing with the greatest success."
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THE CHICAGO TRIBUNE
September 27, 1975
Reagan: Cut spending $82.4 billion
By Neil Mehler
ing, and community and regional development.
Political editor
TO BALANCE the budget Reagan said he would cut $82.4
RONALD REAGAN proposed Friday an immediate federal
billion from a broad range of federal programs, including all
income tax cut of $25 billion and an end to deficit spending
revenue sharing funds and the postal subsidy.
of
federal
pro-
He cut or end programs in education and manpower
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"Proposed Reductions In The Federal Budget
For Fiscal Year 1976"
L1977?