Federal Election Commission Main Page
January 29, 1982
CERTIFIED MAIL
RETURN RECEIPT REQUESTED
ADVISORY OPINION 1981-49
William J. Marschalk
Executive Vice President
Great Western Financial Corporation
8484 Wilshire Boulevard
Beverly Hills, California 90211
Dear Mr. Marschalk:
This responds to your letter dated October 6, 1981,
supplemented by your letter dated December 10, 1981,
requesting an advisory opinion on behalf of Great Western
Financial Corporation concerning application of the Federal
Election Campaign Act of 1971, as amended, ("the Act"), to
the corporation's proposal to donate funds to candidates
running for state or local political office in California.
You state in your request that Great Western Financial
Corporation ("GWFC") is a corporation organized under the
laws of the state of Delaware and qualified to do business
in the state of California. You state further that the
"principal wholly owned subsidiary" of GWFC is Great Western
Savings, a Federally chartered savings and loan association.
Thus, you characterize GWFC as the parent holding company of
Great Western Savings. The principal business of Great
Western Savings is to "attract saving accounts from the
public and to invest such funds in mortgage loans to finance
the purchase or construction of real estate...." GWFC
apparently owns three other subsidiaries, however only one
of those, California Reconveyance Company, is presently
active.
You ask specifically whether the Act would permit GWFC,
as the parent holding company of a Federally chartered
association, to make contributions to and expenditures on
behalf of candidates for state and local political office in
California. You note that California state law permits corporations
to make contributions to and expenditures on
behalf of state and local candidates.
As you are aware, 2 U.S.C. SS 441b prohibits any national
bank or "any corporation organized by authority of any law
of Congress" from making contributions and expenditures in
connection with "any election to any political office." See
2 U.S.C. SS 441b(a). The Commission has previously concluded
that a Federally chartered savings and loan association is
subject to SS 441b(a). Advisory Opinion 1981-33, copy
enclosed. Thus Great Western Savings, a Federally chartered
savings and loan association, would be prohibited from
making contributions or expenditures in connection with
Federal, State or local elections. Accordingly, the issue
raised by your request is whether GWFC is also subject to
the prohibition against corporate contributions in
connection with any election because it owns all, stock in
Great Western Savings.
Under California statute, corporations are permitted to
make contributions to and expenditures on behalf of
candidates for state or local political office. Although 2
U.S.C. SS 441b prohibits national banks and Federally
chartered corporations from making contributions or
expenditures in connection with an election for any
political office, there is no language in SS 441b indicating
that the prohibition extends to parent holding companies
which are not themselves Federally chartered corporations.
It is apparent that although Great Western Savings is the
wholly owned subsidiary of GWFC, GWFC has other business
operations distinct from the operation of Great Western
Savings and further, has sources of revenue separate from
Great Western Savings' assets.
Thus, the Commission concludes that insofar as the Act
is concerned GWFC, as the parent holding company of Great
Western Savings, may make contributions to and expenditures
on behalf of candidates for state and local political office
provided that the funds used to make such contributions are
from GWFC revenues other than those resulting from the
operations of Great Western Savings. GWFC would, of course,
still be subject to the SS 441b prohibition against corporate
contributions and expenditures in connection with Federal
elections.
This response constitutes an advisory opinion
concerning application of the Act, or regulations prescribed
by the Commission, to the specific transaction or activity
set forth in your request. See 2 U.S.C. SS 437f.