Federal Election Commission Main Page
February 14, 1978
AO 1978-1
Mr. Ronald D. Eastman
Verner, Liipfert, Bernhard and McPherson
1660 L Street, N.W. Suite 1000
Washington, D.C. 20036
Re: Request for Advisory Opinion on behalf of Democratic
National Committee
Dear Mr. Eastman:
This responds to your letter of December 30, 1977,
which requests an advisory opinion concerning application
of the Federal Election Campaign Act of 1971, as amended
("the Act"), to contributions to the Democratic National
Committee ("the DNC") for the purpose of retiring
DNC's pre-1975 debt.
Your letter indicates that the major portion of
the outstanding debt consists of obligations the DNC
assumed in 1969 and 1970 from the Hubert H. Humphrey
and Robert F. Kennedy presidential campaigns of 1968.
The remainder of the debt accrued to the DNC between
1972 and 1974. The DNC is planning a fundraising effort
to retire this debt and asks the opinion of the Federal
Election Commission ("the Commission") on three questions:
1. May an individual contribute more than
$20,000 in a calendar year to the DNC for the purpose
of retiring debts incurred or assumed by the DNC prior
to January 1, 1975? May a multi-candidate political
committee contribute more than $15,000 in a calendar
year for the same purpose?
2. Assume an individual or a multi-candidate
political committee has already contributed $20,000
or $15,000 (respectively) to the DNC during the calendar
year for post-January 1, 1975 purposes. May that individual
or multicandidate political committee contribute additional
amounts -- which may or may not be in excess of the
usual post-January 1, 1975 limitations -- for the purpose
of retiring the DNC's pre-1975 debt?
3. Assume an individual contributes $25,000
during a calendar year to a combination of the DNC
and federal candidates. May that individual contribute
additional amounts [to the DNC] -- which may or may
not be in excess of $20,000 --during the same calendar
year for the purpose or retiring the DNC's pre-1975
debt?
These questions raise again, in somewhat modified
form, one of the earliest issues the Commission was
asked to address when it first began in 1975: whether
contribution limits which were first put into effect
January 1, 1975, apply to contributions made after
that date to retire debts which were incurred in elections
held before January 1, 1975.
Advisory Opinions 1975-5 and 1975-6, both decided
in July 1975, and Advisory Opinion 1975-82, decided
in December 1975, involved contribution limits applicable
to candidates and their committees, and individual
aggregate contribution limits of $25,000 per year.
The conclusions reached in those Advisory Opinions
were codified in Commission regulations, which were
sent to Congress for review, and formally prescribed
on April 13, 1977. The regulations in 11 CFR 110.1(g)
provide:
(1) Contributions made to retire debts
resulting from elections held prior
to January 1, 1975 are not subject
to the limitations of this Part 110
as long as contributions and solicitations
to retire these debts are
clearly designated and used for
that purpose.
(2) Contributions made to retire debts
resulting from elections held after
December 31, 1974 are subject to the
limitations of this Part 110.
In those early opinions, the Commission also set
forth numerous requirements for separate contributor
designation, separate record-keeping, and separate
reporting to insure that contributions to retire pre-1975
debts not subject to limitations were segregated
from contributions for post-January 1, 1975 elections
to which the limits did apply.
Your questions present the same issue with different
facts: the contributions are made to a national party
committee for pre-1975 election debts, and new limits
became effective May 11, 1976, on contributions to
national party committees. As amended May 11, 1976,
the Act imposes specific limitations of $20,000 (for
an individual) and $15,000 (for a multicandidate committee)
on the aggregate contributions which may be
made in any calendar year to the political committees
of a national political party. 2 U.S.C. SS 441a(a)(1)(B)
and (2)(B). However, those provisions of the Act were
not effective prior to May 11, 1976, and the Commission's
past position (as described above) with respect to
the limits effective January 1, 1975, has been that,
assuming conformity with particular procedures, contributions
made for the sole purpose of retiring campaign
debts resulting from elections held before January
1, 1975, are not subject to the limits of the Act.
Thus, the Commission concludes that the quoted
regulation also applies to your three questions which
are answered in the affirmative provided the following
conditions and procedures relating to separate notice,
designation, record-keeping and reporting as regards
contributions to retire pre-1975 election debts, and
contributions relating to elections after January 1,
1975, are strictly adhered to:
(1) All DNC solicitations for contributions to
retire its pre-1975 debt must include clear notice
of the DNC's intended use of those contributions.
(2) All contributors for the pre-1975 debts must
expressly earmark their contribution (e.g., a
notation on a check) for use to retire the pre-1975
debt.
(3) Contributions designated to retire the pre-1975
debt must be received into and expended out
of accounts that are separate from accounts used
for other general party purposes.
(4) No transfers of the designated contributions
may be made between the pre-1975 debt contribution
accounts and other DNC accounts.
(5) Contributions and expenditures made in connection
with its efforts to retire the pre-1975 debt
must be recorded and reported by the DNC in accordance
with all applicable provisions of the Act and
Commission regulations. 2 U.S.C. SS SS 432, 434;
11 CFR 102, 104.
(6) The DNC must report the pre-1975 debt on
a separate Schedule C giving complete details
as to each outstanding obligation and the candidate
on whose behalf each debt was assumed.
(7) Separately identified Schedule A's must be
filed to disclose each contribution, designated
for the outstanding pre-1975 debt, in an amount
requiring itemized disclosure under the Act and
regulations.
This response constitutes an advisory opinion
concerning the application of a general rule of law
stated in the Act, or prescribed as a Commission regulation,
to the specific factual situation set forth
in your request. See 2 U.S.C. SS 437.