Petition — Committee to Elect Lyndon LaRouche v. Federal Election Commission

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IN THE a EO IR, CLERR

Supreme Court of the United States

OCTOBER TERM, 1979

COMMITTEE TO ELECT LYNDON LAROUCHE,

LYNDON LAROUCHE, JR. and LEROY B. JONES,

Petitioners,

FEDERAL ELECTION COMMISSION,

Respondents.

PETITION FOR WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE DISTRICT OF COLUMBIA CIRCUIT

David S. Heller

304 W. 58th Street

5th Floor

New York, New York

Attorney for Petitioners

INDEX

‘see oe Cees Oe Aminormies ................... i

Pesan foe Were Gr GCertiorani.................2.., l

eg os Sick cect as cesses seas t

eS Lay o's Sha wa ddl |

I tgp id okay se sb a oe |

ES re ae 2

Provisions of the United States Code ............ eee

SES ee ae eee

EIS ee 6

ESE RISC ae as 0 20

Appendix

A. Provisions of the U.S. Code

Relevant to the Questions Presented ........ 2la

B. Opinion and Order of the

United States Court of Appeals

for the District of Columbia Circuit

eee 28a

C. FEC General Counsel’s Request

for Additional Information

on Certification

CE 62a

D. CTEL response to FEC Request

for Additional Information

| 64a

E. FEC General Counsel Memorandum

to the FEC regarding

Application of CTEL

Gaeee Teovemmeer-2, 1976 .................%- 69a

F. FEC Memorandum to the FEC

Recommending Expansion of Audit of CTEL

Gate meeeemeeer 27, 1970 ................. 148

G. FEC Memorandum to the FEC

Regarding Confirmation of

Individual Contributors

st eo |

H. CTEL Letter to FEC

ES i rr 78a

CTEL Letter to FEC

co a. y aa ee are 80a

FEC Report to the FEC Regarding

Compliance with 26 U.S.C. 9033(b)

(3) and (4) dated February 10, 1977 ........ 82a

. CTEL Letter to FEC

dated March 7, 1977

Attaching Affidavits of Leroy Jones

ne I ko 65 66k bb whos oe Gh RES 84a

TABLE OF CASES AND AUTHORITIES:

Cases:

Blackburn v. Alabama 361 U.S. 199 (1960) ......... 10

Buckley v. Valeo

ge ee. | are ere ee 10,11,17,18,19,20

Department of Agriculture v.

oe a a) 11,13

Elliot v. Weinberger 564 F.2d 1219

Ce el ne sed as Goan coah 12

Kusper v. Pontikes 414 U.S. 51 (1973) ............. 18

Hannah v. Larche 363 U.S. 420 (1963) .......... 8,12

Johnson v. Robinson 415 U.S. 361 (1974) .......... 12

Jones v. FEC, D.C. Cir. No. 77-7093 (1979) 5,6,7,9,18,19

Miranda v. Arizona 384 U.S. 436 (1966) ........... 10

Murray's Lessee v. Hoboken 18 How. 272 (1856)..... 8

NAACP vy. Alabama 357 U.S. 449 (1958) ....... 17,18

Pollard v. Roberts 283 F. Supp. 248 .............. 18

U.S. v. Berrios 482 F. 2d 171 (2nd Cir. 1973) ....... 13

U.S. v. Erne 575 F.2d 212 (9th Cir. 1978) .......... 13

U.S. v. Oaks 508 F.2d (9th Cir. 1974) ............. 13

U.S. v. Steele 416 F.2d (9th Cir. 1972) ............ 13

Yick Wo. v. Hopkins 118 U.S. 356 (1886) .......... 12

Statutes:

I ie 6 ane ner 6) as ihn pce ee 2la

ae okies nb wins cece BME eS 23a

>: Sa te I OD ne ee cc dese cc cas 25a

26 U.S.C. Section 9033(a)-(b) ........... 4,6,7,15,25a

26 USA. Betton FUSE) 2... 6. es eeu 14,15,27a

p Bs ee ks gy eee eee 14,25a

BO Ur, ND POD 6 ic in ss have caasaces 27a

Be Ss a ea is vas iv SER SEN Se os 27a

Other Authorities:

pp RN ee )

iti

No. 79-

IN THE

Supreme Court of the United States

OCTOBER TERM, 1979

COMMITTEE TO ELECT LYNDON LAROUCHE,

LYNDON H. LAROUCHE, JR. and LEROY B.

JONES,

Petitioners,

FEDERAL ELECTION COMMISSION,

Respondents.

PETITION FOR WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE DISTRICT OF COLUMBIA CIRCUIT

PETITION FOR WRIT OF CERTIORARI

Committee to Elect Lyndon LaRouche, the 1976 prin-

cipal campaign committee of Lyndon LaRouche, Lyndon

LaRouche, and Leroy B. Jones pray that a Writ of

Certiorari issue to review the judgment of the United

States Court of Appeals for the District of Columbia

Circuit entered in this case on August 23, 1979.

OPINIONS BELOW

The opinion of the United States Court of Appeals has

not yet been reported and is set forth, with the original

pagination, in the Appendix, beginning at page 28a.

JURISDICTION

The judgment of the Court of Appeals was entered on

August 23, 1979. This petition for Writ of Certiorari was

filed within 90 days of that date. The jurisdiction of this

Court is invoked under 28 U.S.C. section 1254(1).

QUESTIONS PRESENTED

Did the Court below err in sustaining an FEC decision

to deny Petitioner Presidential Primary Matching Funds,

when:

1. the Court below found that the FEC had no legal

basis for withholding funds during a three-month

period in which the FEC labored to develop such a

basis;

2. the reasons eventually relied upon by the FEC for

denying funds included coerced statements obtained

in violation of the First, Fourth, Fifth and Sixth

Amendments to the U.S. Constitution;

3. CTEL was not accorded any form of notice what-

soever of the adjudicative procedures by which the

FEC denied funds;

4. CTEL was denied any opportunity whatsoever to

participate in, make submissions to, or in any way

present its case at the adjudicative hearing at which

the FEC denied CTEL matching funds;

5. the entire FEC procedure was motivated by political

animus and a desire to inflict punishment upon

CTEL, and when the Court below then refused to

hear any presentation on this issue?

CONSTITUTIONAL PROVISIONS

The following provisions of the United States Consti-

tution are relevant to the questions presented.

ARTICLE III

Section 2

The Judicial Power shall extend to all Cases, in Law

and Equity, arising under this Constitution, the Laws of

the United States, and Treaties made, under their Au-

thority;—to all Cases affecting Ambassadors, other public

Ministers and Consuls;—to all cases of admiralty and

maritime jurisdiction;—to Controversies between two or

more States;—between a State and Citizens of another

State;—between Citizens of the same State; claiming Land

under Grants of different States, and between a State, or

the Citizens thereof, and foreign States, Citizens or Sub-

jects.

AMENDMENT I

Congress shall make no law respecting an establishment

of religion or prohibiting free exercise thereof; or abridg-

ing the freedom of speech, or of the press; or of the right

of the people peaceably to assemble, and to petition the

Government for redress of grievances.

AMENDMENT IV

The right of the people to be secure in their persons,

houses, papers, and effécts, against unreasonable searches

and seizures, shall not be violated, and no Warrants shail

issue, but upon probable cause, supported by Oath or

affirmation, and particularly describing the place to be

searched, and the persons or things to be seized.

AMENDMENT V

No person shall be held to answer for a capital or

otherwise infamous crime, unless on a presentment or

indictment of a Grand Jury, except in cases arising in the

land or naval forces, or in the Militia, when in actual

service in time of War or public danger; nor shall any

person be subject for the same offence to be twice put in

jeopardy of life or limb; nor shall be compelled in any

criminal case to be a witness against himself, nor be

deprived of life, liberty or property, without due process

of law, nor shall private property be taken away for public

use, without just compensation.

PROVISIONS OF THE UNITED STATES CODE

The following provisions of the United States Code are

relevant to the questions presented and are set forth at

length in Appendix A: 2 U.S.C. 437(d), 2 U.S.C. 438 (a)8

and 9, 5 U.S.C. Section 555, 26 U.S.C. 9033 (a) and (b),

26 U.S.C. 9036 (a), 2 U.S.C. 9038 (a) and (b) and 26

U.S.C. 9041(a).

STATEMENT OF THE CASE

This is a Petition for Certiorari, taken from an Opinion

and Order of the United States Circuit Court of Appeals

for the District of Columbia, dated August 23, 1979,

affirming the administrative decision of the Federal Elec-

tion Commission (‘““FEC’’) to deny the Committee to

Elect Lyndon LaRouche (““CTEL”’) certification of eligi-

bility for the payment of Presidential primary campaign

matching funds.

Petitioner CTEL is the principal campaign committee

organized in October, 1975 to support the campaign of

Lyndon LaRouche for the 1976 Presidential nomination

of the U.S. Labor Party. Petitioner Lyndon LaRouche is

an individual who, in 1976 sought and won the Presiden-

tial nomination of the U.S. Labor Party. Petitioner Leroy

Jones is an individual supporter of and contributor to

CTEL and the 1976 LaRouche Presidential campaign.

The Respondent is the Federal Election Commission.

On October 14, 1976, CTEL notified the FEC that it

had qualified for Presidential primary matching funds

pursuant to 26 U.S.C. 9033(a) and (b). Fifteen other

candidates, all from the Democratic or Republican parties

had also applied, during the 1976 primary campaign, for

matching funds. In each of those cases, the FEC followed

an unvarying procedure—prucessing their claim expedi-

tiously, and often disbursing funds without awaiting even

prima facie substantiation of contributions. Certainly no

candidate was subjected to a timeless and searching audit

of each and every contribution and expense prior to being

certified by the FEC to receive funds. However, candidate

LaRouche, the candidate of a nonmajor party (and the

only such candidate to have reached the matching funds

threshold) was treated quite differently by the FEC and

its staff.

LaRouche submitted to the FEC on October 14, 1976

the three written arguments required under 26 U.S.C.

9033(a) and the four certifications required under 26

U.S.C. 9033(b).

On October 21, 1976, the FEC requested information

from CTEL concerning the nominating procedures of the

U.S. Labor Party, questioning whether LaRouche was a

bona fide primary candidate. CTEL replied to those quer-

ies by October 23, 1976, and on October 27, 1976 sub-

mitted a computer print-out listing all of its contributors

and confirming that it had reached the matching payment

threshold requirements. The FEC staff, apparently satis-

fied with the submission, assured CTEL that the submis-

sion would be placed on the agenda of the FEC meeting

scheduled for November 4, 1976 (after the general elec-

tion, and after any disbursement would have allowed

LaRouche to free himself of primary campaign debts and

undertake vigorous campaigning for the general election).

(See Appendix, pages 69a-73a.)

As a result of the November 4 FEC meeting, CTEL

was informed that the FEC would initiate a field audit of

CTEL expenses prior to disbursing matching funds. A

team of FEC auditors then spent some days in early and

mid-November in CTEL’s offices examining the cam-

paign’s books and records.

Their conclusions were presented to the FEC almost

one and a half months later, in a December 27 memoran-

dum which raised entirely new questions. In that memo-

randum, the auditors recommended expanding the audit

to examine the books and records of CTEL’s major

vendors and to directly contact contributors to verify

contributions. (See Appendix, p. 74a.)

The companion Petition for Certiorari, Jones v FEC,

we.i demonstrates the state of mind and intentions of the

FEC when it proposed and approved, without any vote,

the contacting of CTEL contributors. Three months of

investigation had produced nothing more than a series of

idle speculations on the part of the FEC staff (see Appen-

dix, pages 74a-75a). Clearly the contributor contacts were

made in hopes of “developing a case” for nonpayment of

the long-delayed funds.

After this final “investigative” step, again a procedure ©

reserved solely for LaRouche and his contributors, the

staff submitted their final recommendation—urging that,

on the basis of coerced denials of contributions from three

contributors, the FEC should rule that LaRouche had not

met the threshold requirements. The FEC then voted on

February 10, 1977 that LaRouche was not eligible for

matching funds.

A petition for review was filed with the United States

Court of Appeals for the District of Columbia Circuit. In

view of the long drawn-out investigative procedure, cul-

minating in an in camera and ex parte decision to deny

matching funds, and the refusal of the FEC to permit

CTEL or LaRouche any opportunity whatsoever to con-

trovert the staffs findings, or even to know the content

of and nature of the staffs findings, Petitioners also

moved before the Circuit Court of Appeals for extraor-

dinary discovery. This motion the court denied.

On August 23, 1979 the U.S. Court of Appeals, while

admitting that LaRouche was afforded unique and illegal

treatment (Slip Opinion at pages 21-26), affirmed the FEC

decision.

ARGUMENT

If the companion Petition for Certiorari of Jones v FEC

presents the question of whether a federal agency may

constitute itself into a secret police force to inflict terror

upon unsuspecting citizens, the case at bar raises the

question of whether a rogue agency may assert itself as

above the law entirely. In the case at bar, this Court must

decide whether it was permissible for the FEC to constitute

itself into a Court of Star Chamber, use inquisitorial

tactics to deny its disfavored political candidates, ex parte,

their rights under law, and, equally abhorrent, employ

inventive and dilatory “investigative” tactics to postpone

a decision while manufacturing the pretenses for the

ultimate denial.

In 1976, many candidates from the Republican and

Democratic parties applied for primary matching funds

pursuant to 26 U.S.C. 9033(a) and (b) (the Act). In every

case, without exception, the FEC processed the applicant’s

claim, and, often without awaiting even prima facie sub-

stantiation, certified the applicant to the Secretary of the

Treasury for the disbursement of funds on the basis of

notice alone from the applicant. No pre-disbursement

audit was ever attempted.

There was, however, one unexpected guest at this feast

of tax-supported largesse. Lyndon LaRouche, a candidate

for the nomination of the U.S. Labor Party, raised the

required amount of funds, in the proper distribution, to

qualify for matching funds. The Republicans and Demo-

crats who comprised the Commission were unhappy with

this third party intrusion. The proper order of things was

upset. The FEC therefore devised a new and unique series

of procedures for the LaRouche application, which were

applied to that application alone.

The Act contemplated the universal use of the procedure

which was in fact employed for all other candidates but

LaRouche. Having expended funds in order to gain the

nomination, a candidate plainly needs matching funds as

soon as possible in order effectively to campaign. AI-

though this need was most acute in Mr. LaRouche’s case,

since his campaign period after application was the short-

est of all candidates, the FEC decided on a pre-disburse-

ment investigation of no one but LaRouche.

The FEC then delayed LaRouche’s application for three

months while deciding whether it approved of the U.S.

Labor Party’s primary procedure. This was plainly in

violation of the law. 26 U.S.C. 9033(a). More, the FEC

then commenced an outrageous and unconstitutional

campaign of terror and intimidation against unwary con-

tributors to the LaRouche campaign. The Court below

found this “‘investigation”’ to have given rise to substantial

constitutional questions. See Jones v FEC, D.C. Cir. No.

77-2093 (1979), Slip Opinion.

THE PROCEDURE FOLLOWED BY THE FEC

DENIED LAROUCHE HIS RIGHTS TO DUE

PROCESS AND EQUAL PROTECTION

Many subtle distinctions have been drawn in the area

of due process. In a final determination by an agency of

the government which deprives a specific individual of a

specific valuable benefit, to which he is prima facie enti-

tled, however, one could reasonably expect that the pro-

cedure accorded him would be grounded in the American

concept of fair play. To this end certain irreducible

minima have been found necessary. These principles have

become, as the words “‘due process” originally signified,

“the law of the land”’ Murray’s Lessee v Hoboken 18 How

272 (1856). Whatever the exact demarcation of the ele-

ments of due process, they include, as a core minimum,

the right to present one’s side of the story (preferably by

counsel) before the deprivation is visited upon one. See

Hannah v Larche 363 US 420 (1963).

In the case at bar, both the FEC, and the Court below,

made much of the “suspicious” pattern of contributions,

and the supposed shortfall in contributions. See Slip

Opinion at page 9, footnote 7, and page 11, footnote 9.

At no time was LaRouche ever permitted to rebut this

‘showing’. The Court below stated in a forthright manner

that the facts before the FEC did not disqualify LaRouche.

They merely ‘raised substantial questions,” (Slip Opinion

at page 9) or made up “information indicating” La-

Rouche’s ineligibility (Slip Opinion at page 11). More-

over, these ‘“‘facts’”” were only developed by the FEC for

the purpose of litigation, after it had finally determined

to deny LaRouche’s application. See infra. Nonetheless,

without any notice to LaRouche, without any opportu-

nity, whether face to face or otherwise, to rebut, without

any disclosure to LaRouche as the pendency of the

determination, the FEC issued a final, adverse verdict.

Slip Opinion at page 12. And this procedure, shrouded in

night and fog, was, incredibly, upheld by the Court below.

Had CTEL been permitted to appear, or make a

submission, the questions raised by the FEC would easily

have been answered. For instance, the sequential money

orders submitted by CTEL workers, about which both the

FEC and the Court below make so much, are anything

but extraordinary. When the Labor Party convention

approached, CTEL supporters from across the country

gathered in New York to push their candidate and make

a final push for matching funds. All those who had not

exhausted their legal limit on contributions went to the

banks en masse to contribute. In this world of telethons,

rallies, mass mailings and benefits, this is as usual as a

“get out the vote” campaign. Yet, CTEL was never even

informed that the FEC planned to manufacture an “‘irreg-

ularity” from this activity. The Court below accepted this

shocking secret decision-making procedure.

At least as offensive to both logic and the sense of

decency and fair play is the Court’s bland acceptance of

the claimed “shortfalls” (Slip Opinion at page 11, footnote

9 and page 31) in meeting matching fund threshold

criteria. In the accompanying case, Jones v FEC, the

Court below partially reversed Summary Judgment for

the defendant FEC et al., ruling that there were properly

alleged violations of Constitutional rights in the FEC’s

unannounced, threatening ‘“‘visits” to individual CTEL

contributors. Even within the over-confined constitutional

protections accorded the contributors by the Court below,

is it not offensive to reason to refuse to recognize that

many a person, faced with threats of jail emanating from

the intimidating presence of unannounced surprise visi-

tors, might deny contributions actually made? Such denial,

under threat, is not foreign to the noblest minds. See

Matthew, chapter 26, verses 33-75. Although one of the

disciples of Christ was moved by coercive circumstances

to deny his Lord “three times ere the cock crew,” the

Court reaches the incredible conclusion that despite ac-

knowledged violations of the law, ‘“‘we do not believe that

our holding in No. 77-2093 [Jones v FEC] renders suspect

the reliability of the results of the field interviews.”’ Slip

Opinion at page 31, footnote 23. To a court at all sensitive

to the constitutional implications of sudden, Gestapo-style

political interrogations of private citizens, as the Court

below was not, the conduct underlying the companion

Jones case would have served as an alarm. The Court

below committed as plain an error in accepting the

unlawfully extorted conclusions of non-contribution as

truthful, as would a court in predicating a criminal

conviction upon a confession induced by threats. It is not

merely that a technical violation of, respectively, the

FEC’s governing law, or the standards of Miranda v

Arizona, 384 US 436 (1966) are committed (and the Court

below concedes that the FEC’s actions were ultra vires,

Slip Opinion at page 28) but that the FEC’s violations of

law were so calculated as to make the denials of contri-

butions inherently non-believable.

A number of cases have demonstrated, if demon-

stration were needed, that the efficiency of the rack

and the thumbscrew can be matched, given the proper

subject, by more sophisticated methods of persuasion.

Blackburn v Alabama, 361 US 199 (1960).

In fact, Petitioners urged the FEC on two separate

occasions to conduct their interviews circumspectly with

some guarantees of due process. The FEC did not. Peti-

tioners then communicated to the FEC their doubts about

the validity of the interviews in view of the tactics of

harassment and intimidation employed. (See Appendix,

page 80a.)

See Miranda v. Arizona, supra. When the method em-

ployed against Petitioner Jones in the companion case,

which methods sent him to the hospital, were leveled

against one of lesser will or “gumption,” no doubt the

eager minions of the FEC could have extracted any

statement they desired. In the area of political allegiance,

of all areas, is it possible that such extracted statements

will pass before the courts as true coin? If so, then it will

not be long before the party that controls the FEC will be

well entrenched against all comers. At that time, the

conditions first warned of in Buckley v. Valeo, 424 US 1

(1976), will have come to pass.

THE FEC DENIED CTEL

EQUAL PROTECTION OF THE LAW

The Court below conceded that the FEC treated CTEL

differently. It is no denial of equal protection to treat

different parties differently if the basis for classification is

rational and not constitutionally impermissable. But

LaRouche, a citizen seeking the Presidential nomination

of the party of his choice, was in all legally cognizable

ways similar to all other applicants for FEC primary

matching funds. Yet he was treated differently. The Court

below suggests several reasons. The only one which is

proper—the appearance of facial irregularities indicative

of fraud—is concededly inapplicable to the case at bar.

Accordingly, because the information on hand re-

vealed no patent irregularities, the Commission was

not warranted in conducting an investigation beyond

the face of LaRouche’s threshold submission.

Slip Opinion at page 28.

The FEC did so nevertheless. The reasons, however

they are dressed up in terms of CTEL’s only exceeding

the statutory minimum by a few dollars, or a fear of

“frivolous candidates” (Slip Opinion at page 15), in fact

shine through: the FEC did not intend that an American

citizen not belonging to one of the two parties whose

hands controlled the FEC’s purse strings was going to

benefit from legislation carefully engineered (in fact, orig-

inally too carefully engineered, see Buckley v Valeo, supra

to benefit themselves alone.

Petitioners are not making merely an exclusionary

claim—arguing that since the means were improper, the

evidence so gathered may not be considered. The means

most definitely were not only improper but more impor-

tantly extortionate, because they were sufficiently terrify-

ing to extract statements which simply were not true. If

this unlawful and discriminatory conduct passes consti-

tutional muster, then the Constitution is reduced to the

indignity of a shell game. If these “confessions” extracted

by investigative methods more suited to employment by

the Spanish Inquisition, pass as uncontroverted evidence,

then equal protection and due process have lost all mean-

ing. Thus, the Court below plainly erred in acknowledging

the denial of equal protection and due process, and then

providing it with the imprimatur of non-prejudicial or

harmless error. (See Slip Opinion at page 29.) The FEC

is entitled to make no distinctions on the basis of mem-

bership or non-membership in a party, or possession of

beliefs of which it approves or disapproves. Such discrim-

ination is in no way similar to economic regulation and

is thoroughly suspect. Department of Agriculture v Mor-

eno, 413 US 528 (1973).

The Fifth Amendment imposes upon the federal gov-

ernment and its agencies the same obligations imposed

on the States by the Fourteenth Amendment: according

equal protection and due process to its subjects. Cf. Yick

Wo v. Hopkins, 118 US 356 (1886), and cases collected in

Johnson v. Robinson, 415 US 361, 364 n.4 (1974). The FEC

denied CTEL both due process and equal protection. The

minimum standard of due process would be to permit

CTEL to rebut the claims of the FEC that it had not

qualified for matching funds. As was stated in Hannah v.

Larche, 363 US 420 (1960) in distinguishing investigative

from adjudicative proceedings:

Due process is an elusive concept. Its exact bound-

aries are indefinable, and its content varies according

to specific factual contexts. Thus, when governmental

agencies adjudicate or make binding determinations

which directly affect the legal rights of individuals, it

is imperative that those agencies use the procedures

which have traditionally been associated with the judi-

cial process.

363 U.S. 442 (Emphasis added).

Such rights were plainly denied to CTEL when the FEC

made a final, binding determination on the basis of

specious appearances and gave LaRouche no opportunity

to appear, submit rebuttal evidence or to contest its

findings and decisions in denying CTEL’s request for

matching funds. Plainly when an agency makes such a

determination, some form of notice and hearing is re-

quired. Elliot v. Weinberger, 564 F.2d. 1219, 1235 (9th

Cir., 1977).

Even more compelling is the fact that the FEC singled

CTEL out for such “special treatment” based on CTEL’s

exercise of its First Amendment rights and its having

asserted them against the FEC. To use the powers of law

in order to harm CTEL is so contrary to the Constitution

as barely to merit discussion. Yet the Court below failed

to rule on this contention. The Supreme Court has stated

the law to be contrary to this:

If the Constitutional conception of equal protection

of the law means anything, it must at the very least

mean that a bare ... desire to harm a politically

unpopular group cannot constitute a /egitimate gov-

ernment interest.

Department of Agriculture v. Moreno 413 U.S. at 534

. (emphasis in original).

In Moreno, the Supreme Court invalidated a law aimed

at the associational rights of “‘hippies”’, pointing out that

Congress could not act against hippies’ right to assemble

in communes. Yet, the Court below upheld action by an

agency which was aimed positively at CTEL for having

supported LaRouche as its candidate for President, an

activity closer to the core of the First Amendment than

the gathering of food stamps at public expense. The

Supreme Court has always closely inspected Congres-

sional or other governmental activity when there is even

the possibility that such activity was undertaken in order.

to discriminate against a person or party for having

exercised its First Amendment rights. So strong is this

policy that otherwise valid criminal convictions have been

reversed or remanded for further inspection when such

animus appears to be present. U.S. v. Steele 416 F.2d

1148, (9th Cir. 1972); U.S. v. Oaks 508 F.2d (9th Cir.

1974), remanded for hearing; U.S. v. Berrios 482 F.2d 171,

181 (2nd Cir. 1973). At the very minimum, the highly

probable showing of politically motivated animus in the

persons making the adverse decisions, Messrs. Harris and

Oldaker, should have been fully explored rather than

summarily disregarded. Cf.U.S. v. Erne, 576 F.2d 212 (9th

Cir. 1978) (animus, if any, not in decision-maker).

Thus the very minimal Constitutional protections: no-

tice and hearing prior to adverse decision, and freedom

from invidious classification aimed at the exercise of

fundamental constitutional rights was denied to CTEL.

On these grounds alone the Court should grant certiorari

in order to reverse the decision below.

THE FEDERAL ELECTION COMMISSION DID

NOT COMPLY WITH ITS OWN MANDATE

UNDER LAW

Title 26 of the U.S. Code, sections 9033 and 9037

provide all the requirements for eligibility for primary

matching fund payments. On October 14, 1976, candidate

LaRouche filed with the FEC a letter agreeing to all the

required conditions, and certifying to or attesting that he

met the threshold requirements. On October 27, 1976,

CTEL provided the FEC with a computer printout listing

of all its contributors, confirming that it had reached the

minimum threshold requirements for matching funds.

This submission was apparently satisfactory to the staff

of the FEC, who assured CTEL that the submission would

be placed on the agenda of the FEC meeting scheduled

for November 4, 1976. (See Appendix p. 68a) According

to the recommendations of staff counsel, in a memoran-

dum of November 2, 1976 to the Commission, prior to

the November 4 meeting, the only substantive question

raised regarding CTEL’s submission was whether or not

certain contributions had been received prior to October

16. (See Appendix p. 69a-73a) Either the Commission

willfully failed to address itself in a timely fashion to the

question of the overall adequacy of CTEL’s submission

or it implicitly accepted it, merely raising minor problems

of verification. Under such circumstances, the minor

problems were susceptible to being promptly cured and

the FEC would then have been obliged, under 26 U.S.C.

9036 to certify to the Secretary of the Treasury, within 10

days, the candidate’s eligibility for primary matching

funds payment.

Of course, even the FEC’s eight-day wait, between the

October 27, 1976 computer printout submission and the

November 4 consideration of the submission’s merits,

caused a nonmajor party presidential candidate, burdened

with debt from his primary campaign, extreme and unfair

difficulty and hardship in the period leading up to the

general election. This in itself indicates that the Commis-

sion was in no rush to provide CTEL with treatment

equivalent to that accorded the major party candidates

applying for matching funds—each one of whom was

promptly certified by the Commission to the Secretary of

the Treasury for payment and scrutinized later.

As the Court below found, Section 9036(a) of Title 26

of the U.S. Code “‘permits the Commission when deter-

mining if a candidate has established his eligibility under

Section 9033(b) (3)-(4), to look beyond the face of the

candidate’s submission only if that submission (or that

submission together with other reports on file with the

Commission) contains patent irregularities suggesting the

possibility of fraud.” (See Slip Opinion at page 16.)

The FEC has argued in the Court below that, in fact,

their three and a half month investigation of CTEL’s

submission, culminating in its rejection (without ever

making an offer of proof of its claim or permitting

petitioner the opportunity to rebut its allegations), was

not initiated by any such “patent irregularities suggesting

the possibility of fraud.’ (See Appendix, page 37a.)

Despite this straightforward admission by the FEC that

it did not live up to its legislative mandate to certify

matching funds payments expeditiously, the Court below

ruled that the FEC’s ultra vires audit of CTEL was non-

prejudicial because it would have uncovered “patterns of

irregularities”. (Slip Opinion at page 28.)

Whether the FEC would have uncovered “patterns of

irregularities’ or would have invented an unending chain

of speculation and suspicion, without allowing Petitioners

to rebut the same, is discussed below. However, it is clear

that although Petitioner had made the requisite agree-

ments under 26 USC 9033(a) to provide the FEC with

whatever verification material was necessary, as early as

October 14, 1976, and that the FEC had procured every-

thing for which it had asked by February 2, 1977 at the

latest (see Appendix, page 78a), it did not then act to

certify LaRouche. Instead, in clear bad faith, it seized the

opportunity to act on specious, untested information, to

deny Petitioners’ certification.

THE FEC STAFF CONSTRUCTED A “SINISTER

WEB” TO PROVIDE SUPPORT FOR THEIR

ALLEGATIONS OF IRREGULARITIES—

IRREGULARITIES THEY NEVER PROVED

In its memorandum of December 27, 1976, the FEC

staff, after two months of investigation, itself admitted

that CTEL had met the threshold requirements for match-

ing funds. ‘“‘At the present time the Committee to Elect

Lyndon LaRouche (CTEL) has reached the required

threshold in 18 states and has collected in excess of $5,000

in 2 others. The Committee is currently obtaining the

required documentation in these two states. The short fall

is $69.00 in Connecticut and $195.00 in Indiana. It is the

staff's belief that the requisite documentation will be

submitted within a few days.” (See Appendix p. 74a.)

Nonetheless, that same staff then proceeded to construct

a ‘sinister web”, weaving together certain isolated facts

which could easily be understood as the necessary conse-

quences of the constrained financial and personnel re-

sources of a nonmajor party candidate, into a conspiracy

to defraud the FEC and the taxpayers. Even in the single

case on record, that of former presidential candidate

Milton Shapp, where an actual conspiracy and actual

irregularities did exist, the FEC did not launch a far-

reaching, pre-disbursement investigation.

As a result of what can only be understood as the

reluctance of the FEC and its staff to certify a nonmajor

party candidate for matching funds, the staff's December

27 admission of LaRouche’s eligibility for matching funds

merely served to spur demands for additional, extraneous

information concerning campaign vendors and contribu-

tors.

Did the FEC ever investigate the groups of consecu-

tively numbered money orders which provided them with

the ostensible “pattern of irregularities” leading the Court

below to justify an ultra vires investigation? No. Do any

of the numerous memoranda circulated to the FEC by its

staff ever even mention this “pattern of irregularities”

which figures so largely in the opinion of the Court

below? No. (See Appendix p. 37a.) Did any member of

the FEC staff ever question CTEL about the frequently

cited groups of consecutively numbered money orders?

No. In sum, the FEC’s “‘justification”’ for its extraordinary

delay, far-reaching and burdensome audit, and harass-

ment of contributors, is a post facto construction of its

staff counsel. Had the court below permitted the discovery

appellants requested to fill out the record, the bad faith

evidenced by the sequence of events described above

would have been glaring.

THE FEC’S INVESTIGATION WAS CONDUCTED

IN BAD FAITH FOR THE PURPOSE

OF CHILLING PETITIONERS’

FIRST AMENDMENT RIGHTS.

As this Court reiterated in Buckley v. Valeo 424 US. |

(1976) when discussing the consequences of limiting the

funds available to a candidate seeking election, ‘‘In view

of the fundamental nature of the right to associate,

governmental ‘action which may have the effect of cur-

tailing the freedom to associate is subject to the closest

scrutiny.” (NAACP v. Alabama 357 US 449 at 460-4161).”

Buckley v Valeo, 424 US | at 26. The activities of the

FEC in regard to the disbursement of matching funds,

since they definitely concern the First Amendment rights

of a candidate to political expression, cannot be evaluated

on the “rational basis” standard, but also must withstand

“strict scrutiny” that they were carried out in the fashion

“least restrictive” of First Amendment rights.

The FEC, as we have shown above, was not investigat-

ing ‘facial irregularities’ in CTEL’s matching funds

submission; nor was it spurred to investigation by the

pattern of claimed “‘facial irregularities.’ Rather, the FEC

was concerned with expanding its audit to the vendors of

CTEL and co-lessees of its office space. The FEC was

concerned with conducting early morning “surprise visits”

to CTEL contributors and threatening them with jail

terms (See Jones v FEC).

This court has also established standards for the breadth

and reach of investigations like that conducted by the

FEC.

We have also insisted that there be a “relevant

correlation” or ‘“‘substantial relation’’ between the

governmental interest and the information required

to be disclosed. See Pollard v Roberts, 283 F.Supp

248, 257 (E.D. Ark.) (three-judge court), aff'd, 393

U.S. 14 (per curiam). This type of scrutiny is neces-

sary even if any deterrent effect on the exercise of the

First Amendment rights arises, not through direct

government action, but indirectly as an unintended

but inevitable result of the government’s conduct in

requiring disclosure. NAACP v Alabama, 357 US 449

at 461. Cf. Kusper v Pontikes, 414 US at 57-58.

Buckley v Valeo, supra at 65-66.

The FEC may have confused bureaucratic curiosity

with “relevant correlation,” or it may have continued to

manifest the bad faith cited above. However, the effect of

its activities was the same. The FEC determined, accord-

ing to its December 27 staff memo (see Appendix, p. 74a)

that “it would be helpful’? to examine the records of

CTEL’s major vendors. As well, noting that “the contrib-

utor’s listed occupation seems unusual for fairly heavy

political contributions”, the staff recommended confir-

mation of contributions (all already documented by writ-

ten instrument) should be done with contributors. (See

Appendix, p. 75a). There was no allegation of “‘facial

irregularity” or possible fraud. Rather, the inventive bu-

reaucrats at the FEC had hopes of developing some

“helpful” angles upon which to hang its decision to deny

CTEL equal treatment. Such inquisitiveness might not

seem out of place in an Internal Revenue Service audit, or

in the drawn out, leisurely proceedings of another regu-

latory agency, but it hardly meets the standards of strict

scrutiny and those of least restrictive alternative means

required, even if the deterrent effect on First Amendment

rights is unintentional. Had petitioners’ attorney not

notified the FEC that legal action would be taken if

LaRouche were not certified for matching funds (see

Appendix, p. 81a), the FEC staff appears to have been

prepared to “‘investigate’’ forever.

In fact, in their final recommendation to the FEC—

pushed reluctantly to action by the urgent demands of

CTEL—the staff's final conclusion, and recommendation

that matching funds be denied was based only on infor-

mation gathered at the end of January, 1977. That “‘in-

formation” was, in fact, merely the statements, made

under considerable coercive pressure (see Jones v FEC, »

supra) of three contributors, stating that they had not

made some or all of the contributions claimed for them

by CTEL. Had those statements been subjected to the

same exhaustive scrutiny every portion of CTEL’s sub-

mission and records were, undoubtedly the statements

would have been retracted. After three and one half

months of “investigation,” the staff provided the FEC

only with “‘evidence”’ uncovered in the last two weeks. On

that basis the FEC made its finding.

THE FEC’S ACTIONS REPRESENT

INVIDIOUS DISCRIMINATION AGAINST

A NONMAJOR PARTY CANDIDATE

Petitioners emphatically do not dispute the right of the

FEC to establish procedures and regulations to carry out

its mandate. However, this Court, while upholding the

constitutionality of public financing, recognized that an

appropriate factual demonstration could be made, based

upon the actual operation of public financing, to show

that the implementation of the system invidiously discrim-

inates against nonmajor parties and candidates. Buckley

v Valeo, supra at 98.

The case at bar demonstrates precisely such a situation.

The string of speculative requests, the nitpicking bureau-

cratic curiosity, and the browbeating of contributors is

evident nowhere in the FEC’s treatment of the fifteen

Republican and Democratic candidates who made match-

ing funds submissions.

The sensitive First and Fifth Amendment rights in-

volved—particularly sensitive in the case of a nonmajor

party candidate—were trampled by FEC staff, in pursuit

of some unspecified theory of wrongdoing, unproven

throughout the course of an arduous investigation. That

investigation, far from being an effort ‘“‘closely drawn to

avoid unnecessary abridgment of associational freedom”

Buckley v Valeo, supra at 25, wandered from pillar to

post, resulting in no actual findings of fact, depriving

LaRouche contributors of their constitutional rights, har-

assing the relatively few vendors who would consent to

issue credit to a relatively unknown candidate, and cul-

minated with the withholding of primary matching funds

in violation of every principle of due process and equal

protection.

CONCLUSION

A writ of certiorari should be granted.

Respectfully submitted,

David S. Heller

304 West 58th Street

New York, New York

10019

(212) 247-7488

APPENDIX

APPENDIX A

Provisions of the United States Code

2 U.S.C. 437(d). Powers of Commission.

(a)The Commission has the power—

(1) to require, by special or general orders, any person

to submit in writing such reports and answers to questions

as the Commission may prescribe; and such submission

shall be made within such a reasonable period of time

and under oath or otherwise as the Commission may

determine;

(2) to administer oaths or affirmations;

(3) to require by subpoena, signed by the chairman or

the vice chairman, the attendance and testimony of wit-

nesses and the production of all documentary evidence

relating to the execution of its duties;

(4) in any proceeding or investigation, to order testi-

mony to be taken by deposition before any person who is

designated by the Commission and has the power to

administer oaths and, in such instances, to compel testi-

mony and the production of evidence in the same manner

as authorized under paragraph (3) of this subsection;

(5S) to pay witnesses the same fees and mileage as are

paid in like circumstances in the courts of the United

States;

(6) to initiate (through civil actions for injunctive,

declaratory, or other appropriate relief), defend (in the

case of any civil action brought under section 313(a) (9)),

_ OF appeal any civil action in the name of the Commission

for the purpose of enforcing the provisions of this Act

and chapter 95 and chapter 96 of the Internal Revenue

Code of 1954, through its general counsel;

(7) to render advisory opinions under section 312 of

this title;

(8) to develop such prescribed forms and to make,

amend, and repeal such rules, pursuant to the provisions

of chapter 5 of Title 5, United States Code, as are

necessary to carry out the provisions of this Act and

2la

chapter 95 and chapter 96 of the Internal Revenue Code

of 1954;

(9) to formulate general policy with respect to the

administration of this Act and chapter 95 and chapter 96

of the Internal Revenue Code of 1954; and

(10) to conduct investigations and hearings expedi-

tiously, to encourage voluntary compliance, and to report

apparent violations to the appropriate law enforcement

authorities.

(b) Any United States district court within the jurisdic-

tion of which any inquiry is carried on, may, upon petition

by the Commission, in case of refusal to obey a subpoena

or order of the Commission issued under subsection (a)

of this section, issue an order requiring compliance there-

with. Any failure to obey the order of the court may be

punished by the court as a contempt thereof.

person (other than the Commission or the United States)

for disclosing information at the request of the Commis-

sion.

(d) (1) Whenever the Commission submits any budget

estimate or request to the President of the United States

or the Office of Management and Budget, it shall con-

currently transmit a copy of such estimate or request to

the Congress.

(2) Whenever the Commission submits any legis-

lative recommendations, or testimony, or comments on

legislation, requested by the Congress or by any Member

of the Congress, to the President of the United States or

the Office of Management and Budget, it shall concur-

rently transmit a copy thereof to the Congress or to the

Member requesting the same. No officer or agency of the

United States shall have any authority to require the

Commission to submit its legislative recommendations,

testimony, or comments on legislation, to any office or

agency of the United States for approval, comments, or

review, prior to the submission of such recommendations,

testimony, or comments to the Congress.

(e) Except as provided in section 313(a)(9), the power

22a

of the Commission io initiate civil actions under subsec-

tion (a)(6) shall be the exclusive civil remedy for the

enforcement of the provisions of this Act.

2 U.S.C. Section 438. Administrative provisions.

(a) Federal Election Commission; duties

It shall be the duty of the Commission—

(1) Forms

to develop and furnish to the person required

by the provisions of this Act prescribed forms for the

making of the reports and statements required to be filed

with it under this subchapter;

(2) Manual for uniform bookkeeping and report-

ing methods

to prepare, publish, and furnish to the person

required to file such reports and statements a manual

setting forth recommended uniform methods of book-

keeping and reporting;

(3) Filing, coding, and cross-indexing system

to develop a filing, coding, and cross-indexing

system consonant with the purposes of this subchapter;

(4) Public inspection; copies; sale or use restric-

tions

to make the reports and statements filed with

it available for public inspection and copying, commenc-

ing as soon as practicable but not later than the end of

the second day following the day during which it was

received, and to permit copying of any such report or

statement by hand or by duplicating machine, as requested

by any person, at the expense of such persons: Provided,

That any information copied from such reports and

statements shall not be sold or utilized by any person for

the purpose of soliciting contributions or for any com-

mercial purpose;

(5) Preservation of reports and statements

to preserve such reports and statements for a

period of ten years from date of receipt, except that

reports and statements relating solely to candidates for

the House of Representatives shall be preserved for only

five years from the date of receipt;

23a

(6) Indices of reports and statements; publication

in Federal Register

to compile and maintain a cumulative index of

reports and statements filed with it, which shall be pub-

lished in the Federal Register at regular intervals and

which shall be available for purchase directly or by mail

for a reasonable price, and to compile and maintain a

separate cumulative index of reports and statements filed

with it by political committees supporting more than one

candidate, which shall include a listing of the date of the

registration of any such political committee and the date

upon which any such political committee qualifies to

make expenditures under section 441a(a)(2) of this title,

and which shall be revised on the same basis and at the

same time as the other cumulative indices required under

this paragraph;

(7) Special reports; publication

to prepare and publish from time to time

special reports listing those candidates for whom reports

were filed as required by this subchapter and those can-

didates for whom such reports were not filed as so

required;

(8) Audits; investigations; priority audits and in-

vestigations

to make from time to time audits and field

investigations with respect to reports and statements filed

under the provisions of this subchapter, and with respect

to alleged failures to file any report or statement required

under the provisions of this subchapter, and to give

priority to auditing and field investigating of the verifi-

cation for, and the receipt and use of, any payments

received by a candidate under chapter 95 or chapter 96 of

title 26;

(9) Enforcement authorities; reports of violations

to report apparent violations of law to the

appropriate law enforcement authorities; and

(10) Rules and regulations

to prescribe suitable rules and regulations to

24a

carry out the provisions of this subchapter, in accordance

with the provisions of subsection (c) of this section.

5 U.S.C. Section 555. Ancillary matters.

(a) This section applies, according to the provisions

thereof, except as otherwise provided by this subchapter.

other investigative act or demand may not be issued,

made, or enforced except as authorized by law. A person

compelled to submit data or evidence is entitled to retain

or, on payment of lawfully prescribed costs, procure a

copy or transcript thereof, except that in a nonpublic

investigatory proceeding the witness may for good cause

be limited to inspection of the official transcript of his

testimony.

26 U.S.C. Section 9033. Eligibility for payments.

(a) Conditions. To be eligible to receive payments under

section 9037, a cundidate shall, in writing—

(1) agree to obtain and furnish to the Commission

any evidence it may request of qualified campaign ex-

penses;

(2) agree to keep and furnish to the Commission

= records; books, and other information it may request;

an |

(3) agree to an audit and examination by the Com-

mission under section 9038 and to pay any amoun's

required to be paid under such section.

(b) Expense limitation; declaration of intent: minimum

contributions. To be eligible to receive payments under

— 9037, a candidate shall certify to the Commission

that—

(1) the candidate and his authorized committees

will not incur qualified campaign expenses in excess of

the limitations on such expenses under section 9035;

(2) the candidate is seeking nomination by a pollit-

ical party for election to the office of President of the

United States;

25a

(3) the candidate has received matching contribu-

tions which in the aggregate, exceed $5,000 in contribu-

tions from residents of each of at least 20 States; and

(4) the aggregate of contributions certified with

respect to any person under paragraph (3) does not exceed

$250.

26 U.S.C. Section 9038. Examinations and audits; repay-

ments.

(a) Examinations and audits. After each matching pay-

ment period, the Commission shall conduct a thorough

examination and audit of the qualified campaign expenses

of every candidate and his authorized committees who

received payments under section 9037.

(b) Repayments.

(1) If the Commission determines that any portion

of the payments made to a candidate from the matching

payment account was in excess of the aggregate amount

of payments to which such candidate was entitled under

section 9034, it shall notify the candidate, and the can-

didate shall pay to the Secretary an amount equal to the

amount of excess payments.

(2) If the Commission determines that any amount

of any payment made to a candidate from the matching

payment account was used for any purpose other than—

(A) to defray the qualified campaign expenses with

respect to which such payment was made; or

(B) to repay loans the proceeds of which were used,

or otherwise to restore funds (other than contributions to

defray qualified campaign expenses which were received

and expended) which were used, to defray qualified cam-

paign expenses; it shall notify such candidate of the

amount so used, and the candidate shall pay to the

Secretary an amount equal to such amount.

(3) Amounts received by a candidate from the

matching payment account may be retained for the liq-

uidation of all obligations to pay qualified campaign

expenses incurred for a period not exceeding 6 months

after the end of the matching payment period. After all

obligations have been liquidated, that portion of any

26a

unexpended balance remaining in the candidate’s accounts

which bears the same ratio to the total unexpended

balance as the total amount received from the matching

payment account bears to the total of all deposits made

into the candidate’s accounts shall be promptly repaid to

the matching payment account.

Commission under subsection (b) with respect to a match-

ing payment period more than 3 years after the end of

such period.

(d) Deposit of repayments. All payments received by the

Secretary under subsection (b) shall be deposited by him

in the matching payment account.

Section 9036 Certification by Commission.

(a) Initial Certifications. Not later than 10 days after a

candidate establishes his eligibility under section 9033 to

receive payments under section 9037, the Commission

shall certify to the Secretary for payment to such candidate

under Section 9037 payment in full of amounts to which

such candidate is entitled under section 9034. The Com-

mission shall make such additional certifications as may

be necessary to permit candidates to receive payments for

contributions under section 9037.

Section 9041 Judicial Review.

(a) Review of agency action by the Commission. Any

agency action by the Commission made under the provi-

sions of this chapter shall be subject to review by the

United States Court of Appeals for the District of Col-

umbia Circuit upon petition filed in such court within 30

days after the agency action by the Commission for which

review is sought.

27a °

Notice: This opinion is subject to formal revision before publication

in the Federal Reporter or U.S.App.D.C. Reports. Users are requested

to notify the Clerk of any formal errors in order that corrections may be

made before the bound volumes go to press.

United States Cmert of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

No. 77-1184

COMMITTEE TO ELECT LYNDON LA ROUCHE,

LYNDON LA ROUCHE, AND LEROY B. JONES, PETITIONERS

Vv.

FEDERAL ELECTION COMMISSION, RESPONDENT

Petition for Review of an Order of the

Federal Election Commission

Argued September 27, 1978

Decided August 28, 1979

Robert Case Liotta with whom Joel D. Jdseph was on

the brief, for appellants.

Charles N. Steele, Associate General Counsel and Bar-

bara Van Gelder, Attorney, Federal Election Commission,

with whom William C. Oldaker, General Counsel, Lester

Bills of costs must be filed within 14 days after entry of judgment. The

court looks with disfavor upon motions to file bills of costs out of time.

28a

N. Scall, Assistant General Counsel, Federal Election

Commission, were on the brief, for appellee.

Before McGowAN and TAMM, Circuit Judges, and

JUNE L. GREEN,” District Judge.

Opinion for the court filed by Circuit Judge MCGOWAN.

McGowan, Circuit Judge: This is a petition for re-

view of a decision of the Federal Election Commission

(Commission) withholding from Lyndon La Rouche, a

1976 candidate for the Presidential nomination of the

United States Labor Party (USLP), certification to re-

ceive primary matching funds under the Presidential

Primary Matching Payment Account Act, 26 U.S.C.

§§ 9031-9042 (1976).1 The Commission refused to certify

La Rouche on the ground that he had not established

his eligibility under the fundraising threshold of the Act.

Petitioners, La Rouche and the Committee to Elect Lyn-

don La Rouche (CTEL),? now raise both statutory and

constitutional objections to the legal standards and certifi-

cation procedures invoked by the Commission in making

* Of the United States District Court for the District of

Columbia, sitting by me a pursuant to 28 US.C. § 292

(a) (1976).

1 This petition for review was consolidated for purposes of

oral argument with Jones v. Federal Election Commission,

No. 77-2093, and Federal Election Commission v. Committee

A Elect Lyndon La Rouche, et al., No. 77-1987, decided this

te.

References herein to the petitioners’ appendix and supple-

mental appendix in the instant case are designated as “P.A.”

and “S.A.” respectively. In addition, references herein to the

appendix in No. 77-2093 are designated as “A.”

? The Committee to Elect Lyndon La Rouche (CTEL) was

the principal campaign committee organized to obtain contri-

butions for La Rouche and to manage his campaign. Through-

out this opinion, we refer to La Rouche and CTEL inter-

changeably except where indicated otherwise,

29a

that determination. For reasons stated below, we affirm

the decision under review.

The Presidential Primary Matching Payment Account

Act (Act), enacted in 1974, provides for limited public

funding of Presidential primary elections by authorizing

federal matching payments for certain small contri-

butions to eligible candidates. The eligibility require-

ments are twofold.’ First, a candidate must agree, in

writing, (1) to provide to the Commission any evidence

it requests regarding qualified campaign expenses, (2)

to maintain and furnish to the Commission any records

or other information it requests, and (3) to submit to an

audit by the Commission under section 9038 of the Act

and to repay any amounts required under that section.

Id. § 9083(a). Second, a candidate must “certify” to the

Commission that

(1) the candidate and his authorized committees

will not incur qualified campaign expenses in excess

of the limitations on such expenses under section

9035,

(2) the candidate is seeking nomination by a

political party for election to the office of President

of the United States,

(3) the candidate has received matching contri-

butions which in the aggregate, exceed $5,000 in

contributions from residents of each of at least 20

States, and

3 The Commission’s regulations, which were only proposed

at the time La Rouche applied for matching funds, outline the

eligibility requirements in detail. See 11 C.F.R. §§ 130.1-134.3

(1977). During the 1976 election, the Commission relied on

its “interim guidelines” in determining whether to certify

candidates to receive primary matching funds. See 40 Fed.

Reg. 33817, 41938 (1975).

30a

(4) the aggregate of contributions certified with

respect to any person under paragraph (3) does not

exceed $250.

Id. § 9033(b) (emphasis added). The Act defines the

term “contribution,” for purposes of the fundraising

threshold of section 9033 (b) (3)-(4), as “a gift of money

made by a written instrument which identifies the person

making the contribution by full name and mailing ad-

dress.”* Id. § 9034(a).

The Commission, no later than ten days after a candi-

date “establishes his eligibility” under the aforementioned

criteria, is required to certify to the Secretary of the

Treasury for payment to the candidate the full amount to

which he is entitled. Jd. § 9086(a). That amount is equal

to the first $250 or less in total contributions received

from each contributor on or after the beginning of the

calendar year immediately preceeding the calendar year

of the Presidential election for which the candidate is

seeking nomination. Id. § 9084(a). No candidate, how-

*The term “contribution,” as defined for these purposes,

does not include “a subscription, loan, advance, or deposit of

money, or anything of value or anything described in sub-

paragraph (B), (C), or (D) of section 9032(4).” 26 U.S.C.

tee (a) (1976). Those subparagraphs of section 9032 (4)

refer to

(B) ...acontract, promise, or agreement, whether or

not legally enforceable, to make a contribution for any

such purpose, :

are transferred to that committee from another commit-

tee, and

(D) ...the payment by any person other than a candi-

date, or his authorized committee, of compensation for

the personal services of another person which are ren-

dered to the candidate or committee without charge ....

Td. § 9082(4) (B), (C), (D). See also 11 C.F.R. § 180.8-.9

(1977).

3la

ever, may receive matching funds in excess of one half

of the total expenditure ceiling to which he has assented

as a condition for establishing his eligibility. Jd. §§ 9033

(b) (1), 9085(a). The Secretary, upon receipt of the

Commission’s certification for payment but not before

the beginning of the calendar year in which the general

election for the office of President will be held, is required

to transfer promptly the certified amount from an ac-

count, known as the Presidential Primary Matching Pay-

ment Account,® to the candidate. Id. § 9037(b).

After a party selects its Presidential nominee, the Com-

mission is required to conduct a thorough examination

and audit of the qualified campaign expenses of any

candidate who received matching funds in pursuit of the

nomination. Jd. § 9038(a). Matching funds that the

Commission determines either (1) were received in ex-

cess of the amount to which a candidate was entitled or

(2) were used for other than authorized purposes, must

be repaid to the Secretary. Jd. § 9038(b). Stiff criminal

penalties also are provided for excess campaign expenses, —

the unlawful use of payments, false statements, and kick-

backs and illegal payments. Jd. § 9042.

The events culminating in this petition for review

began on October 14, 1976, when La Rouche wrote the

Commission requesting primary matching funds for his

526 U.S.C. §9037(a) (1976). The Presidential Primary

Matching Payment Account is one account in the Presidential

Election Campaign Fund (Fund). Jd. § 9006. The Fund is

financed from the general fund of the Treasury in the aggre-

gate amount that individual taxpayers, who may authorize

payment to the Fund of one dollar on an individual return

and two dollars on a joint return, have designated for such

purposes on their tax returns. Jd. §§ 6096, 9006(a). Other

accounts are earmarked for financing party nominating con-

ventions, id. § 9008, and general election campaigns, id.

§ 9006 (b).

32a

campaign for the USLP Presidential nomination. In his

letter, La Rouche proffered the requisite agreements to

establish his eligibility under section 9033(a) and “certi-

fied” that he also met the eligibility requirements of sec-

tion 9083(b). This “certification” took the form of a one-

page notarized statement that he met the eligibility cri

teria outlined in section 9033 (b).°

The Commission staff raised two sets of questions con-

cerning La Rouche’s eligibility for matching funds. First,

on October 21, 1976, the General Counsel of the Commis-

sion (General Counsel) requested La Rouche to submit

additional information regarding, inter alia, the nomi-

nating procedures of the USLP and the states in which

La Rouche was listed on the ballot as that party’s Presi-

dential candidate. This information, the General Counsel

explained, was needed to ensure that La Rouche had in

fact taken part in a “primary election” within the mean-

ing of the Act, and, if so, to determine the appropriate

cut-off date for counting contributions towards establish-

ing his eligibility.

Second, the Commission staff requested further financial

information to ensure that La Rouche had met the

eligibility requirement of raising at least $5,000 in con-

tributions of $250 or less in each of at least 20 states.

* The letter from La Rouche provided in relevant part:

In compliance with Section 9033(b) of the Federal

Election Campaign Laws, I hereby certify that:

3. I have received matching contributions which in

the aggregate exceed $5,000 in contributions from resi-

dents of each of at least 20 states; and

4. The aggregate of contributions certified with re-

spect to any person under paragraph (3) does not ex-

ceed $250.

P.A. 1.

33a

On October 14, 1976, when La Rouche applied for match-

ing funds, CTEL had not as yet filed its disclosure report,

due October 10, for financial activity in the third quarter

of the year. Prior reports, which, contrary to the re-

quirements of 2 U.S.C. § 484(b) (2), had failed to name

and provide other identifying information about contribu-

tors of more than $100, revealed that CTEL had raised

far less in the period after January 1, 1975, than the

minimum threshold amount of $100,000. P.A. 15. More-

over, the third-quarter report, received on October 26,

indicated that, between January 1, 1976, and September

30, 1976, CTEL had raised only $71,463.27 in total re-

ceipts. S.A. 9. The Commission staff, by telephone, asked

counsel for La Rouche about the apparent shortfall and

the lack of names and other identifying information for

contributors of more than $100.

La Rouche’s counsel submitted information in response

to both sets of questions raised by the Commission staff.

In connection with the USLP nominating procedures, he

filed, on October 22, 1976, information revealing that La

Rouche had been nominated as the Presidential candidate

of the USLP at its national nominating convention on

October 16, 1976. The information further indicated that

the USLP national convention, at which La -Rouche re-

ceived the unanimous vote of the delegates from 30 states

and the District of Columbia, was the culmination of a

lengthy campaign during which La Rouche had sought

and obtained the endorsement of the USLP Caucus in

each of the 31 jurisdictions. With regard to the fund-

raising threshoid, La Rouche’s counsel, at a meeting

with Commission staff members on October 27, 1976,

submitted a computer printout that, in addition to pro-

viding the requisite information about contributors of

over $100, indicated that, between October 1, 1975, and

October 16, 1976, CTEL had received over $5,000 in con-

tributions in each of at least 20 states. P.A. 15; S.A. 4.

34a

During the course of the October 27 meeting, the Com-

mission staff indicated that the Commission was likely to

consider these matters at its meeting scheduled for

November 4, 1976, and, assuming that it decided to go

forward with a field audit of the threshold submission,

that audit would begin during the week following its

meeting. P.A. 13-14. Rather than awaiting the Commis-

sion’s decision, however, CTEL, on October 28, 1976,

filed suit in the Dist-ict Court for the District of Colum-

bia alleging that the Commission could not lawfully with-

hold matching funds pending verification of the fact

that La Rouche had met the fundraising minimum.

Committee to Elect Lyndon La Rouche v. Federal Elec-

tron Commission, C.A. No. 76-2010 (D.D.C. 1976). The

District Court, on October 29, denied injunctive relief,

and this court, on November 1, refused to grant a stay

pending appeal. In December, the case was dismissed

with the approval of the District Court.

Meanwhile, on November 2, 1976, the Commission staff,

after reviewing La Rouche’s application and supplemental

submissions, reported its recommendations to the Com-

mission. With regard to the USLP nominating pro-

cedures, the staff expressed the view that “assuming the

caucus process . . . is verifiable, Mr. La Rouche, through

October 16, was a candidate for nomination of a political

party, and therefore meets the requirements of [section]

9033 (b) (2).” P.A. 15. With regard to the fundraising

threshold, the staff noted that no other application for

matching funds during the 1976 election had raised the

question of whether a candidate had met the threshold

amount. Staff urged the Commission to authorize a field

audit of the contributions to La Rouche’s primary cam-

paign, to focus in part on whether certain contributions

deposited after La Rouche was nominated on October 16,

1976, but reportedly received before that date, were in

fact received before the nomination. This recommended

35a

focus reflected the General Counsel’s position that, under

the Act, only those contributions received before a candi-

date is nominated may be counted for the purposes of

establishing the candidate’s eligibility for primary match-

ing funds.

On November 4, 1976, the Commission authorized the

staff to conduct a field audit in order to verify La

Rouche’s eligibility for matching funds. S.A. 5. That

audit, which took place shortly thereafter at CTEL’s

headquarters in New York City, revealed that CTEL had

in its possession written instruments evidencing cam-

paign contributions in excess of the threshold amount in

18 states and that, with the submission as promised of

certain additional documentation, it would soon cross the

threshold in two more states, Connecticut and Indiana.

But, in addition to this soon to be corrected shortfall, the

audit uncovered many instances where contributions made

by money order or cashier’s checks raised substantial

questions as to whether the contributions were in fact

revealed a pattern of heavy last-minute contributions

from persons listing their occupation as that of “volun-

teer coordinator” for the National Caucus of Labor Com-

mittees (NCLC),® an organization that, during the last

two weeks of the eligibility period, received payme ‘ts

from CTEL of more than $310,000, which accounted fo.

55% of CTEL’s expenditures during the period. It fur-

ther indicated that CTEL shared office space and common

personnel with NCLC and three other organizations

(New Solidarity International Press Service, Inc., Cam-

paigner Publications, Inc., and the United States Labor

Party) and that those organizations accounted for 78%

of CTEL’s expenditures and 97% of its debt. These find-

ings seemed particularly significant in light of the fact

that CTEL had surpassed the $5,000 threshold by only

a narrow margin in at least several states.

made by residents of the states indicated.? The audit also

7 For example, the documentation of the contributions to La

Rouche’s campaign revealed that many of the money orders

and cashier’s checks were given in patterns that raised sub-

stantial statutory questions. Examples are set forth below:

(1) The following money orders were all drawn

from the Bowery Savings Bank in New York City:

36a

State

Seria] numbers Date Submitted

4-114337 10/15/76 Massachusetts

4-114338 10/15/76 Colorado

4-1143839 10/15/76 Massachusetts

4-114341 10/15/76 North Carolina

4-114342 10/14/76 Delaware

4-114343 10/15/76 Massachusetts

8-obliterated 10/08/76 Connecticut

8-060756 10/12/76 Colorado

[Continued]

7 [Continued]

State

Serial numbers Date Submitted

8-063400 (or 409) 10/18/76 Indiana

8-063407 10/13/76 Massachusetts

8-063408 8/01/76 North Carolina

8-06841 (7) 10/08/76 Colorado

(2) The following cashier’s checks were all drawn

from the Pacific National Bank of Washington:

2255209 - 9/28/76 Washington

2255210 9/28/76 Washington

2255217 9/29/76 Oregon

2255218 9/29/76 Oregon

2255219 9/29/76 Oregon

2255220 9/29/76 Oregon

2652298 10/05/76 Washington

2652294 ? Oregon

®The audit indicated that NCLC volunteer coordinators,

37a

who contributed 16% of the total contributions received, ac-

counted for as much as 83.2% of the contributions during

October.

On December 27, 1976, the Commission staff submitted

to the Commission two recommendations based on the field

audit of CTEL’s records. The first recommendation,

which the Commission adopted on December 29, 1976,

was to expand the field audit to include an examination

of the records of the four organizations related to CTEL.

The second recommendation, which was adopted on Janu-

ary 14, 1977, was to conduct a “confirmation of contri-

butions with contributors ... before any initial payments

are made.” P.A, 18, 24, 25.

The direct verification of CTEL contributions took

place during the week of January 26, 1977, when, after

notifying CTEL, the Commission staff embarked on field

interviews of individuals listed as CTEL contributors in

three states, Delaware, Massachusetts, and Wisconsin.

In the vast majority of cases, the staff was unable to

locate the contributors in question, either because of in-

sufficient time or because the contributors were not home

or did not live at the address indicated. But, on the

basis of those cases where the contributors were inter-

viewed, the staff obtained information indicating that La

Rouche had not in fact met the threshold requirement in

either Delaware or Wisconsin.’

On February 2, 1977, CTEL submitted the documenta-

tion of contributions from Connecticut that, at least ac-

cording to the results of the initial audit, would have

established that La Rouche had crossed the fundraising

threshold in the last of 20 states. That documentation, it

was asserted, established La Rouche’s eligibility under

section 9033(b) (3)-(4) for matching funds and triggered

the Commission’s obligation under section 9036(a) to

certify La Rouche’s eligibility for payment to the Secre-

® The results of the field interviews indicated a shortfall

of at least $383.25 in Delaware and $317.38 in Wisconsin.

Sec page 51 infra.

38a

tary of the Treasury within ten days. Legal action was

threatened if the Commission did not certify La Rouche

before February 14, 1977.

On February 10, 1977, the Commission, relying on the

results of the field interviews, concluded that La Rouche

had not met the threshold requirement of raising at least

$5,000 in contributions of $250 or less in each of 20

states. By so doing, the Commission rendered La Rouche

ineligible to receive primary matching funds.’”® This peti-

tion for review of the Commission’s decision was filed

pursuant to 26 U.S.C. § 9041 on February 14, 1977.

Ill

This petition for review challenges on both statutory

and constitutional grounds the Commission’s refusal to

certify La Rouche’s eligibility to receive primary match-

ing funds. Petitioners’ principal claim is that the Com-

mission, by overstating both the burden that a candidate

must shoulder to establish his eligibility under the fund-

raising threshold of the Act and the role that the Com-

mission is authorized to play in certifying a candidate’s

eligibility, violated the Act when it rejected La Rouche’s

application for matching funds. Petitioners also object on

a variety of grounds to the investigative procedures in-

voked by the Commission in determining that La Rouche

had not demonstrated his compliance with the fundraising

threshold.

10 Neither the parties, nor do we, address the question of

whether La Rouche, through October 16, 1976, was “seeking

nomination by a political party” for President, as required

by section 9033(b) (2). Although the Commission suggests

in its brief that it determined that La Rouche had complied

with section 9033(b) (2), Resp. Brief at 11 n.5, we find no

evidence in the record indicating that the Commission itself,

as opposed to its staff, made such a determination.

39a

We examine these interrelated claims in the context,

first, of determining what obligations the Act, consistent

with the Constitution, imposes on both a candidate and

the Commission during the process of certifying a candi-

date’s compliance with the fundraising threshold of the

Act, and, second, of assessing whether, in the instant case,

the Commission properly determined that La Rouche had

not established his eligibility under the fundraising

threshold.

Two statutory provisions lie at the heart of the con-

troversy over the respective roles of a candidate and the

Commission during the certification process. The first

provision, section 9033(b), provides that a candidate, as

a condition precedent to qualifying for matching funds,

“shall certify to the Commission that ... (3) [he] has

received matching contributions which in the aggregate,

exceed $5,000 in contributions from residents of each of

at least 20 States, and (4) the aggregate of contributions

certified with respect to any person under paragraph (3)

does not exceed $250” (emphasis added). The second

provision, section 9036(a), requires that “[n]Jot later

than 10 days after a candidate establishes his eligibility

under section 9033 . . ., the Commission [shall] certify

to the Secretary for payment to such candidate .. . pay-

ment in full of amounts to which such candidate is en-

titled” (emphasis added).

The Act, however, defines neither the term “certify”

in section 9033(b) nor the phrase “establishes his eligi-

bility” in section 9036(a). In the absence of such defi-

nitions, the parties urge upon this court markedly differ-

ent views of both what a candidate must do to establish

his compliance with the fundraising threshold and what

role the Commission is authorized to play during the

certification process.

40a

Petitioners argue that a candidate seeking to establish

his eligibility under section 9033(b) need only “attest

authoritatively” in good faith and with knowledge that he

has met the fundraising threshold. The Commission’s role

under section 9036(a), according to petitioners, is limited

to ensuring that the candidate has so attested. This con-

struction of the Act, we are told, finds support in (1)

common usage of the term “certify,” (2) the intent of

Congress revealed in section 9036(a) to provide prompt

payments to eligible candidates, and (3) the fact that

the Act contains other mechanisms, including criminal

sanctions and civil repayment provisions; adequate to

ensure compliance with the eligibility requirements.

Moreover, petitioners argue that if the Act were in-

terpreted as providing for a lengthy and detailed certifi-

cation process, it would be unconstitutional as regards

La Rouche.

The Commission asserts that the candidate’s burden

in establishing his eligibility under the fundraising thresh-

old of the Act is discharged not by attesting that he has

raised the threshold amount, but rather by demonstrating

to the Commission’s satisfaction that he has adequate

documentation to establish that the threshold amount has

been raised. We are also urged to conclude that the Com-

mission, in determining whether a candidate has dis-

charged this burden, is empowered not only to review the

documentation of campaign contributions submitted by

the candidate in support of his application for matching

funds, but also to audit the records of his campaign con-

tributions, and, if necessary, to verify reported contri-

butions by means of interviewing individual contributors.

This view of the certification process, the Commission

argues, is supported by (1) the plain language of section

9036(a) requiring a candidate to “establish[] his eligi-

bility” for matching funds, (2) the policy underlying

section 9033(b) of withholding matching funds from

4la

frivolous candidates, and (3) the broad investigative pow-

ers vested in the Commission under the Act, 26 U.S.C.

§9039(b) (1976).

The starting point in our inquiry into the respective

statutory obligations of a candidate and the Commission

during the certification process is, of course, the language

of the Act itself. See Ernst & Ernst v. Hochfelder, 425

U.S. 185, 197 (1976). In this regard, we note that, on

the one hand, section 9033(b) requires a candidate to

“certify” his compliance with the fundraising threshold

and, on the other, section 9036(a) requires the Commis-

sion, “(nJot later than 10 days after a candidate estab-

lishes his eligibility under section 9033,” to approve the

candidate’s application for matching funds. Thus, if we

were to give the word “certify” its ordinary meaning,

which is “to attest authoritatively [in writing],”™ the

Act would require the Commission, once a candidate had

so attested, to approve his application within 10 days.

The Commission, under this reading of the Act, would

perform the quite limited task of rubberstamping no-

tarized statements of eligibility.

Such a certification process, we have no doubt, is not

what Congress intended when it enacted the provisions

at issue. Even petitioners recognize this point, conceding

that not “anyone who signed . . . a statement [of eligi-

bility] would immediately become eligible for funds; .

clearly an element of knowledge and good faith is in-

volved.” Pet. Br. 7. It is obvious, therefore, that we

cannot interpret the statutory provisions at issue solely

by reference to their wording.

11 Doherty v. McDowell, 276 F. 728, 730-31 (D. Me. 1921)

(“certify” defined as “to attest authoritatively” and “any form

which affirms the fact in writing is sufficient”) ; accord Higby

v. Hooper, 124 Mont. 331, 221 P.2d 1043 (1950); Bates v.

Bates, 247 Ala. 337, 24 So. 2d 440 (1946).

42a

In the absence of any specific directive in the legislative

history, we must turn instead to the policies underlying

the Act as a guide to our task of statutory interpretation.

The policies relevant here are twofold. First, Congress,

in enacting the fundraising threshold of section 9033 (b)

(3)-(4), sought to withhold public funds from frivolous

candidates. In this regard, the Committee on House Ad-

ministration took the position that

this modest threshold requirement is the most rea-

sonable and best practicable test to assure that

public funds are provided to serious candidates. By

matching only small contributions the threshold pro-

vides a means of testing public support of a candi-

date and encourages a candidate to involve large

numbers of voters in his fundraising efforts.

H.R. Rep. No. 1239, 938d Cong., 2d Sess. 13 (1974) ;

accord, S. REP. No. 689, 93d Cong., 2d Sess. 6 (1974)

(“Such assistance is limited to those who demonstrate

they are serious candidates by raising a threshold eligi-

bility fund in small amounts from many contributors.”’).

Second, Congress, by requiring the Commission under

section 9036(a) to certify payments to a candidate not

more than 10 days after the candidate establishes his

eligibility, evidenced an intent to provide prompt pay-

ments to eligible candidates. The 10-day deadline serves

to ensure that an eligible candidate will have the money

he needs at a time when its availability is most important

to his campaign.

The best way to accommodate these two policies is, we

think, to construe the Act essentially along the lines ad-

vanced by the Commission. That is to say, we agree that

the Act requires a candidate seeking to establish his eligi-

bility under section 9033(b) (3)-(4) to demonstrate to

the Commission’s satisfaction that he has adequate docu-

mentation to establish that the threshold amount has been

raised. But, in light of the policy favoring prompt pay-

43a

ments to eligible candidates, we find it necessary to cir-

cumscribe to a certain extent the scope of the Commis-

sion’s investigative role during the certification process.

To be specific, we construe the Act to provide for a

certification mechanism that works as follows: The

candidate’s burden in establishing his eligibility under

section 9033(b) (3)-(4) is to submit documentation dem-

enstrating that he has met the fundraising threshold.

The candidate may do so either by submitting to the Com-

mission the written instruments evidencing his campaign

contributions ** or by making an equivalent showing."

12 The Act defines the term “contribution,” for the purposes

of the fundraising threshold of section 9033(b) (3)-(4), as

“a gift of money made by a written instrument which identi-

fies the person making the contribution by full name and

mailing address.” 26 U.S.C. §9084(a) (1976) (emphasis

added). See note 3 supra. The Commission’s regulations

carry forth the requirement that a “contribution” be made by

written instrument. 11 C.F.R. § 180.8 (1977).

18 Section 131.2(c) of the Commission’s regulations, which

was proposed at the time La Rouche applied for matching

funds but not yet final, now defines what documentation a

candidate must submit to establish his eligibility under sec-

tion 9083(b) (3)-(4) of the Act. This regulation, which we

find consistent with the Act, provides:

For each State in which the candidate certifies he or she

has met this requirement, the candidate shall—

(1) Submit an alphabetical list of contributors show-

ing each contributor’s full name and residential address,

the date of the receipt of each contribution by the candi-

date or his or her committee and of the deposit into the

designated campaign depository, the dollar amount of

each contribution submitted for matching purposes, the

matchable portion thereof, the total amount of all match-

able contributions submitted, and a notation as to whether

the contribution was received as a result of an entertain-

ment activity under § 130.9(i) ; and

[Continued]

The Commission’s role under section 9036(a) is then to

review the submission to determine whether it adequately

documents the candidate’s compliance with the fund-

raising threshcld. That determination, with a narrow

exception discussed below, is limited to deciding, on the

face of the candidate’s submission, (1) whether the re-

ported contributions are in fact “contributions” within

the meaning of the Act, 26 U.S.C. § 9034(a) (1976), and

(2) whether the contributions that meet the statutory

definition exceed the threshold amount, id. § 9033(b) (3)-

(4). If this determination is adverse to a candidate, the

Commission should so notify the candidate and permit

him to resubmit his fundraising documentation. If the

determination is favorable, and if the candidate has met

the other eligibility requirements, the Commission, no

later than 10 days after its final determination of eligi-

bility, is required to certify for payment to the candidate

the full amount to which he is entitled. Jd. § 9036(a).

The limited exception under which the Commission’s

section 9086(a) determination is not restricted to the

face of the candidate’s submission is where that submis-

sion (or that submission together with other reports on

file with the Commission) contains patent irregularities

suggesting the possibility of fraud.’* In such a case, the

18 [Continued]

(2) Submit a photocopy of each check or other written

instrument for each contribution which the candidate

submits to receive matching funds. The photocopies shall

be segregated alphabetically by deposit, and shall be ac-

companied by copies of the relevant deposit slip.

11 C.F.R. § 131.2(c) (1)-(2) (1977).

14 The issue before us is the extent to which section 9036 (a)

permits the Commission to look beyond the face of a candi-

date’s threshold submission in determining whether the can-

didate has established his eligibility for matching funds. Our

conclusion that the Commission may do so only where it dis-

45a

Commission is empowered, as part of the certification

process, to conduct a properly circumscribed investigation,

including an audit of the candidate’s records and, if

necessary, field interviews of the contributors to his cam-

paign.’° The Commission, on the basis of the candidate’s

covers that the threshold submission (or the submission to-

gether with other reports on file with the Commission) con-

tains patent irregularities suggesting the possibility of fraud

in no way restricts the Commission’s otherwise broad investi-

se powers outside the certification process. See note 17

infra.

15 Petitioners argue that the Commission is without statu-

tory authority to conduct an audit during the certification

process because the audit and repayment provisions of section

9038 contemplate an audit only after a candidate has received

matching funds. We are urged to conclude, under the princi-

ple of expressio unius est exclusio alterius, that Congress, by

expressly providing only for post-certification audits, in-

tended not to authorize pre-certification audits.

The flaw in this argument is that petitioners have over-

looked section 9039(b), which provides:

The Commission is authorized to prescribe rules and

regulations in accordance with the provisions of subsec-

tion (c), to conduct examinations and audits (in addition

to the examinations and audits required by section 90388

(a)), to conduct investigations, and to require the keep-

ing and submission of any books, records, and informa-

tion, which it determines to be necessary to carry out its

responsibilities under this chapter.

(Emphasis added). It would be inappropriate, in our view,

to draw the inference suggested by petitioners because section

9038 is not the exclusive repository of the Commission’s audit-

ing authority.

16 The Commission’s statutory authority to conduct field

interviews during the certification process is encompassed in

its broad investigative mandate “to conduct examinations and

audits (in addition to the examinations and audits required

by section 9038(a)) [and] to conduct investigations ...

which it determines to be necessary to carry out its responsi-

bilities under [the Act].” 26 U.S.C. §9089(b) (1976). This

conclusion finds support in the fact that Congress has indi-

46a

submission and its own inquiry, must then determine

whether the candidate in fact has established his com-

pliance with the fundraising threshold. Id. § 9036(a).

This interpretation of the Act serves the policies under-

lying both statutory provisions at issue. The policy under-

lying section 9033 (b) (3)-(4), which is to withhold funds

from frivolous candidates, is served by requiring a candi-

date either to submit to the Commission the written

instruments evidencing campaign contributions or to make

an equivalent showing. This requirement will provide the

Commission with a ready means of detecting, and deny-

ing certification to, a candidate who has not raised the

threshold amount. If the threshold submission does not

adequately document the candidate’s compliance with the

fundraising threshold, the Commission is empowered, in-

deed required, to withhold certification until the candidate

submits appropriate documentation. If the threshold sub-

mission contains patent irregularities suggesting the pos-

sibility of fraud, the Commission is authorized to conduct

an investigation during the certification process to de-

termine whether the candidate in fact has raised the

threshold amount.”’

cated elsewhere in the Federal Election Campaign Act, sec

2 U.S.C. § 488 (a) (8) (1976), that the Commission’s investiga-

tive authority to conduct post-nomination ‘examination!s]

and audit[s]” under section 9038 includes the power to verify

contributions by means of field interviews. Inasmuch as the

plain language of section 9039(b) confers upon the Commis-

sion even broader investigative authority than that of sec-

tion 9038, we think it follows that Congress must have in-

tended to vest the Commission with the authority to conduct

field interviews under section 9039(b) as well.

17 Nor is the Commission powerless to protect the fisc in

the unlikely event that a fraudulent submission is not evident

on its face. Nothing in this opinion restricts the Commission’s

authority to conduct investigations under section 9039(b)

outside the certification process, see note 14 supra, its author-

47a

The policy underlying section 9036(a), which is to

provide prompt payments to eligible candidates, is served

by limiting the role of the Commission during the cer-

tification process to reviewing the face of a candidate’s

threshold submission except where that submission (or

that submission together with other reports on file with

the Commission) contains patent irregularities suggesting

the possibility of fraud. We so limit the Commission’s

investigative role because long delays are sure to ensue

in cases where the Commission looks beyond the face of a

candidate’s threshold submission during the certification

process.’* In the instant case, for example, the Commis-

sion took more than three months after it authorized the

initial audit of CTEL’s records to reach a final decision

on La Rouche’s eligibility. Accordingly, we construe sec-

tion 9036(a) to permit the Commission, as part of the

ity under section 9038 to conduct post-nomination audits and

to seek recoupment of overpayments, or its general investiga-

tive and enforcement authority under the Federal Election

Campaign Act, see, e.g., 2 U.S.C. §§ 487d, 487g (1976).

18 By contrast, the Commission has imposed on itself a

five-day deadline for making a preliminary determination of

a candidate’s eligibility on the basis of his threshold submis-

sion. The Commission’s regulations provide:

During the matching payment period, the Commission

shall, as soon as practicable and generally within 5 work-

ing days, examine the submission under § 131.1 and

§ 131.2(a), (b), and (c) and shall either—

(a) Make a preliminary determination that the candi-

date has satisfied the requirement of raising an amount in

excess of $5000 in contributions from individuals who

are residents of each of at least 20 States, which in re-

spect to any individual do not exceed $250; or

(b) Promptly notify the candidate giving a detailed

explanation of the reasons for the Commission’s conclu-

sion that the candidate has failed to satisfy the matching

payment threshold requirements.

11 C.F.R. § 181.8 (1977) (emphasis added).

48a

certification process, to conduct an investigation beyond

the face of a candidate’s threshold submission only in

cases where patent irregularities appear on the face of

that submission. Such cases are unlikely to involve can-

didates who are in fact eligible for matching funds.

The certification mechanism outlined above is far bet-

ter tailored to the policies underlying the Act than that

advocated by petitioners. To adopt petitioners’ view that

the Commission must certify any candidate who, acting

knowingly and in good faith, “attests authoritatively” that

he has met the fundraising threshold would be, we think,

to restrict unduly the Commission’s ability to detect

frivolous candidates by shielding it from the documenta-

tion of the candidate’s contributions..* Nor would peti-

tioner’s interpretation of the certification process neces-

sarily serve the policy of providing prompt payments to

eligible candidates. It is our view that the inexact stand-

ard of whether a candidate acted “knowingly and in good

faith” might well result in lengthy investigations into

what a candidate knew, or should have known, about his

campaign contributions at the time he applied for match-

ing funds.

An additional advantage of the certification process

outlined above over that advanced by petitioners is that

the former, unlike that latter, involves objective stand-

ards. The Commission, under our interpretation of sec-

tion 9036(a), must determine as an initial matter (1)

whether a candidate’s threshold submission adequately

documents his compliance with the fundraising threshold

19 Nor do we feel that petitioners’ reading of the statute is

compelled by the fact that the Act contains other mechanisms,

including criminal sanctions and civil repayment provisions,

also designed to ensure compliance with the eligibility require-

ments. Nothing in the legislative history suggests that Con-

gress regarded those other mechanisms as sufficient to protect

against frivolous candidates receiving matching funds.

49a

and (2) whether that submission contains patent irregu-

larities suggesting the possibility of fraud. Both inquiries

involve essentially objective determinations regarding the

adequacy of the threshold submission. The inquiry under

petitioner’s view of the certification process would include

the more subjective question of whether the candidate

acted in “good faith” when he certified his compliance

with the fundraising threshold.

The advantage of an objective standard stems from

the fact that, as petitioners themselves emphasize, the

certification decision has an important impact on the exer-

cise of first amendment rights, inasmuch as campaign

funds “are often essential if ‘advocacy’ [of beliefs and

ideas] is to be truly or optimally ‘effective.’” Buckley

v. Valeo, 424 U.S. 1, 65-66 (1976). It also stems from

the fact that the issue of whether a candidate has met

the fundraising threshold often will arise in cases where

a candidate either lacks national prominence or belongs

to a minor party outside the mainstream of American

politics. Given our national commitment to open and

robust discussion of all political viewpoints, see, e.g., New

York Times Co. v. Sullivan, 376 U.S. 254, 270 (1964), we

regard it as particularly important to ensure that the

Commission is applying the eligibility criteria for primary

matching funds in an even-handed manner. Accordingly,

we are reluctant to endorse a subjective standard such as

“good faith” belief, preferring instead objective standards

that circumscribe the Commission’s discretion and permit

more meaningful judicial review.

For essentially the same reasons that we believe that

objective standards should govern the certification deci-

sion, petitioners argue that if the Act were interpreted

as providing for a lengthy and detailed certification proc-

ess, it would violate the first amendment as a prior re-

straint on La Rouche’s right to free speech. Citing the

important role that campaign funds play in the advocacy

50a

of political beliefs, petitioners assert that “a procedure

that would jeopardize the payment of matching funds, in

the period precedent to the election when they would be

crucial to the effective expression of political viewpoints,

would be a serious abridgment of associational rights and

free speech.”

It is our view, however, that, at least as regards La

Rouche, the certification process outlined above is con-

stitutional. In upholding the constitutionality of fund-

raising thresholds for federal matching funds, the Su-

preme Court in Buckley v. Valeo noted:

The States have .-. . been held to have important

interests in limiting places on the ballot to those

candidates who demonstrate substantial popular sup-

port. E.g., Storer v. Brown, supra, at 736; Lubin v.

Panish, supra, at 718-719; Jenness v. Fortson, 403

U.S. 481, 442 (1971) ; Williams v. Rhodes, 393 U.S.,

at 31-33. Congress’ interest in not funding hopeless

candidacies with large sums of public money, S. Rep.

No. 93-689, supra, at 7, necessarily justifies the

withholding of public assistance from candidates

without significant public support. Thus, Congress

may legitimately require “some preliminary showing

of a significant modicum of support,” Jenness v.

Fortson, supra, at 442, as an eligibility requirement

for public funds.

424 U.S. at 96 (emphasis added). Surely then, if Con-

gress can require this preliminary showing of support as

an eligibility requirement for matching funds, it can

also impose reasonable procedures for ensuring that a

candidate in fact has the requisite degree of support.

The certification process outlined above is, we think,

entirely reasonable, especially insofar as it permits the

Commission to look beyond the face of a candidate’s thresh-

old submission only if that submission contains patent

irregularities. Certainly, on the record in this case

(which we explore in detail below), La Rouche has failed

Sla

to demonstrate that the Commission acted unreasonably,

or even that it erred, in rejecting his application for

matching funds. :

In sum, we adopt the certification process outlined

above, for it best serves the policies underlying the Act

and turns on objective standards that circumscribe the

Commission’s discretion and permit more meaningful ju-

dicial review. Moreover, we see no first amendment

barrier, at least as regards La Rouche, to our interpreta-

tion of the Act.

It remains for us to determine whether the Commis-

sion, on the facts presented here, properly determined

that La Rouche was ineligible for matching funds be-

cause he nad not satisfied the threshold requirement of

section 9033 (b) (3)-(4). Petitioners argue, on the basis

of their interpretation of the Act, that La Rouche estab-

lished his eligibility for matching funds either (1) on

October 14, 1976, when he submitted a sworn statement

that he had raised the threshold amount, (2) on October

27, 1976, when CTEL submitted a computer printout that

listed contributions in excess of the threshold amount, or

(3) on February 2, 1977, when CTEL submitted docu-

mentation that, at least according to the results of the

initial audit, would have established that La Rouche had

crossed the fundraising threshold in the last of 20 states.

The Commission takes the contrary view that, under its

interpretation of the Act, La Rouche failed all along to

establish his eligibility for matching funds.

In light of the legal standards outlined in the preced-

ing section, we now review the merits of the Commis-

sion’s refusal to certify La Rouche’s eligibility for match-

ing funds. We are cognizant of course that the scope of

our review is limited to determining whether the Com-

mission’s action was “arbitrary, capricious, an abuse of

52a

discretion, or otherwise not in accordance with law.”

5 U.S.C. § 706(2) (A) (1976).7°

Turning to the facts at hand, we may quickly dispose

of petitioners’ argument that La Rouche established his

eligibility for matching funds during October 1976. The

candidate’s burden in establishing his eligibility under

section 9033 (b) (3)-(4) is, as we outlined above, to sub-

mit documentation demonstrating that he has met the

fundraising threshold. The candidate may discharge this -

burden either by submitting to the Commission the writ-

ten instruments evidencing his campaign contributions

or by making an equivalent showing. It is beyond ques-

tion that, on October 14, 1976, La Rouche had not estab-

lished his eligibility under section 9033(b) (3)-(4), in-

asmuch as he had done no more than to submit to the

Commission a one-page notarized statement that he had

met the fundraising threshold. Nor can we say that the

Commission acted arbitrarily or capriciously in refusing

to certify La Rouche on the basis of the computer print-

out submitted on October 27, 1976, which listed contri-

butions in excess of the threshold amount. It is our view

that the Commission properly determined that a computer

printout, which simply summarizes undocumented data,

is not a showing equivalent to the documentation itself.

Accordingly, we find no merit to petitioners’ argument

20 The Act provides that judicial review of action taken by

the Commission is governed by the Administrative Procedure

Act, see 26 U.S.C. § 9041 (1976), which, in turn, provides that,

where as here agency action is not subject to formal rulemak-

ing procedures, the applicable standard of review is whether

the agency action was “arbitrary, capricious, an abuse of dis-

cretion, or otherwise not in accordance with law,” see 5 U.S.C.

§ 706(2) (A) (1976). Cf. United States v. Florida East Coast

Ry. Co., 410 U.S. 224 (1978). See generally Natural Re-

sources Defense Council v. SEC, No. 77-1761, slip op. at 28-41

(D.C. Cir. April 20, 1979) ; Weyerhaeuser Co. v. Costle, 590

F.2d 1011, 1024-28 (D.C. Cir. 1978).

53a

that the Commission erred in not approving La Rouche’s

applications for matching funds in October 1976.

Nor do we find reversible error in the Commission’s

decision, on November 4, 1976, to authorize a staff audit

of CTEL’s records in New York for the purpose of veri-

fying La Rouche’s eligibility for matching funds. Section

9036(a), as construed above, permits the Commission

when determining if a candidate has established his

eligibility under section 9033 (b) (3)-(4), to look beyond

the face of the candidate’s threshold submission only if

that submission (or that submission together with other

reports on file with the Commission) contains patent

irregularities suggesting the possibility of fraud. The

information on hand when the Commission authorized

the audit of CTEL’s records included (1) La Rouche’s

original application for matching funds, submitted on

October 14, 1976, in which he asserted that he had met

the fundraising threshold, (2) CTEL’s third-quarter re-

port, submitted on October 26, 1976, which indicated that,

between January 1, 1976, and September 30, 1976, CTEL

had raised $71,463 in total contributions, and (3) the

computer printout, submitted on October 27, 1976, which

listed contributions in excess of $5,000 in each of 20

states.

It was obvious from the face of these submissions,

especially the computer printout, that if La Rouche had

surpassed the fundraising threshold, he had done so only

by a narrow margin. This fact surely warranted the

Commission in keeping a close eye on the sufficiency of

the documentation of the contributions to La Rouche’s

campaign, but it did not amount to a patent irregularity

suggesting the possibility of fraud. Nor was it a patent

irregularity that the computer printout raised the ques-

tion whether certain contributions deposited after La

Rouche was nominated on October 16, 1976, but report-

edly received before that date, were in fact received be-

54a

fore the nomination. Accordingly, because the informa-

tion on hand revealed no patent irregularities, the

Commission was not warranted in conducting an investi-

gation beyond the face of La Rouche’s threshold submis-

sion. Rather than authorizing an audit of CTEL’s rec-

ords, the Commission, which of course was under no

obligation to certify La Rouche’s eligibility, simply should

have awaited further submissions in support of his eligi-

bility.

Even though the Commission acted ultra vires in author-

izing the audit of CTEL’s records, we regard this error

as nonprejudicial. If the Commission followed the proper -

course of awaiting a further submission from La Rouche

and if La Rouche had in fact submitted the requisite

documentation under section 9033(b) (3)-(4), the docu-

mentation would have contained, as the Commission audit

revealed, patent irregularities that surely would have

warranted an inquiry beyond the face of the threshold

submissions. Those irregularities were numerous in-

stances of contributions by money orders and cashier’s

checks that raised substantial questions as to whether the

contributions were made by residents of the states indi-

cated. See note 7 supra. Therefore, because these irregu-

larities would have been uncovered in any event if La

Rouche had submitted the requisite documentation under

‘section 9038(b) (3)-(4), we sustain the Commission’s

audit, even though unauthorized by statute, as nonpre-

judicial error.** See Administrative Procedure Act § 10

21 The appropriate remedy in a case where the Commission

wrongfully seeks to conduct an audit or field interviews dur-

ing the certification process is a petition for review in this

court. See 26 U.S.C. §§ 9086(a), 9041(a) (1976). Section

9041(a) provides that:

Any agency action by the Commission made under the

provisions of this chapter shall be subject to review by the

United Staves Court of Appeals for the District of Colum-

55a

(e), 5 U.S.C. § 706 (1976) (“due account shall be taken

of the rule of prejudicial error”).

The Commission, once confront-< with these patent

irregularities, was warranted, we cnink, in taking further

investigatory action. It was neither unreasonable nor in

excess of statutory authority for the Commission, in light

of the questions raised by the money orders and cashier’s

checks about the states in which certain contributors

resided, to authorize field interviews of CTEL contribu-

tors to verify their donations to La Rouche’s campaign,”

bia Circuit upon petition filed in such court within 30

days after the agency action by the Commission for

which review is sought.

A Commission decision to conduct an investigation during the

certification process on the ground that a candidate’s thresh-

old submission contains patent irregularities is, we think,

“agency action” within the meaning of section 9041 (a).

22 Petitioners challenge the legality of the field interviews

on the ground that they were not authorized by majority vote

of the Commission as required by 2 U.S.C. § 487c(c) (1976).

Section 437c(c) provides in relevant part:

All decisions of the Commission with respect to the

exercise of its duties and powers under the provisions of

this subchapter shall be made by a majority vote of the

members of the Commission. .. . A member of the Com-

mission may not delegate to any person his vote or any

decisionmaking authority or duty vested in the Commis-

sion by the provisions of this subchapter.

It is petitioners’ position that the Commissioners never voted

at all on this matter, but simply raised no objection to a staff

memorandum recommending that the filed interviews be con-

ducted and stating that “[i]f no objection is raised within

24 hours, the staff will proceed as outlined above.” P.A. 24.

This argument, we think, falls short of the mark, for sec-

tion 437c(c) requires only that a majority vote be taken, not

that it be taken in any specified manner. The record reveals

that the Secretary of the Commission distributed the staff

memorandum to the six Commissioners on January 138, 1977,

56a

nor was it error, given the aforementioned irregularities

and the pattern of last-minute contributions from volun-

teer co-ordinators of an organization closely related to

CTEL, to authorize an audit of the books of that and

other such organizations. Both the field interviews, which

focused on contributions reported in three representative

states, and the expanded audit, which focused on the

books of those organizations closely related to CTEL,

were properly circumscribed in the sense that they were

reasonable investigatory responses to the irregularities

uncovered in the initial audit.

As a final matter, we think that the Commission acted

properly when, on February 7, 1977, it formally re-

jected La Rouche’s application for matching funds on the

ground that he had not established his eligibility under

section 9033(b)(3)-(4). Petitioners argue that La

Rouche establisked his eligibility on February 2, 1977,

when CTEL submitted to the Commission the documen-

tation of contributions found lacking in the initial audit

of CTEL’s books. This argument falls short of the mark,

however, because it misconceives the appropriate legal

standard. The issue before the Commission where, as

here, patent irregularities are discovered in the docu-

mentation underlying the contributions to a candidate

is not whether the candidate has documentation to estab-

lish that he has raised the threshold amount, but rather

that five of the six Commissioners returned the memorandum

the next day without objection, and that the sixth Commis-

sioner who did not return the memorandum nevertheless

raised no objection to the proposed action. A. 59-60. On the

basis of this response, the Secretary of the Commission, on

January 14, 1977, certified that the Commission had adopted

the staff proposal. P.A. 25. It is our view that given the fact

. that five Commissioners returned the memorandum without

objection, the staff recommendation was adopted by “major-

ity vote” within the meaning of section 437c(c). Nothing

in that provision forbids the Commissioners from voting, as

they did here, by means of memoranda.

57a

whether the candidate in fact has met the fundraising

threshold.

In rejecting La Rouche’s application, the Commission

relied on the results of the field interviews of CTEL

contributors in Delaware, Massachusetts, and Wisconsin.

Those interviews indicated that, in both Delaware and

Wisconsin, La Rouche had failed to raise the requisite

amount. In Delaware, where the initial audit indicated

that La Rouche had exceeded the $5,000 threshold by

only $36.75, the field interviews revealed that $420

of. that total had been contributed from funds not

belonging to the listed contributors. Such funds obviously

are not “contributions” within the meaning of the Act,

see 26 U.S.C. § 9084(a) (1976), for to hold otherwise

would render meaningless the requirement of section

9033 (b) (4) that only $250 per person be counted toward

the threshold amount. In Wisconsin, where the initial

audit indicated that La Rouche had exceeded the fund-

raising threshold by only $172.62, one listed contributor

denied altogether having made a $250 contribution and

two others confirmed only a portion ($125) of their

reported contributions ($365).- Thus, inasmuch as La

Rouche plainly fell short of the threshold amount in at

least two of the twenty states involved,™ we conclude

23 Although we hold today in No. 77-2093 that the agents of

the Commission may have exceeded their statutory authority

during the field interviews in asking certain questions regard-

ing the contributors’ political beliefs and may even have vio-

lated the fourth amendment in procuring financial documents

and bank records from one contributor in particular, Jones

v. Federal Election Commission, No. 77-2098, slip op. at 30-34, .

(D.C. Cir. August 23, 1979), we do not believe that our hoid-

ing in No. 77-2093 renders suspect the reliability of the re-

sults of the field interviews. Nor in fact do petitioners have di-

rectly dispute the results of the field interviews. Accordingly,

in the instant case, we rely on those results in affirming the

Commission’s refusal to certify La Rouche’s eligibility to re-

ceive matching funds.

58a

erat Acne ae

that the Commission did not err in refusing to certify

La Rouche’s eligibility to receive matching funds on the

ground that he failed to satisfy the fundraising threshold

of section 9033 (b) (8)-(4).**

*4 Petitioners also argue that they have been denied equal

protection under the fifth amendment, insofar as the Com-

mission singled out La Rouche for different and unusual treat-

ment in rejecting his application for primary matching funds.

The short answer to this argument is that the record reveals

that La Rouche’s application for matching funds was the

only application during the 1976 election that raised any sub-

stantial question as to whether the fundraising threshold had~

been met. In the absence of any evidence of a pattern of

harassment or bad faith on the part of the Commission, we

see no basis for finding an equal protection violation simply

because the Commission accorded unique treatment to a unique

application.

Nor is this “[a] statutory scheme that blocks minority party

access to the electoral process [and thereby] unjustifiably in-

vades the right to vote and to associate.” Doe v. Martin, 404

F. Supp. 753, 759-60 (D.D.C. 1975) (three-judge court) (foot-

me arate As the Supreme Court in Buckley v. Valeo

noted:

Subtitle H [which includes the Act] does not prevent any

candidate from getting on the ballot or any voter from

casting a vote for the candidate of his choice; the inabil-

ity, if any, of minor-party candidates to wage effective

campaigns will derive not from lack of public funding but —

from their inability to raise private contributions. Any

disadvantage suffered by operation of the eligibility for-

mulae under Subtitle H is thus limited to the claimed

denial of the enhancement of opportunity to communicate

with the electorate that the formulae afford eligible can-

didates. But eligible candidates suffer a countervailing

denial. As we more fully develop later, acceptance of

public financing entails voluntary acceptance of an ex-

penditure ceiling. Non-eligible candidates are not subject

to that limitation. Accordingly, we conclude that public

financing is generally less restrictive of access to the

electoral process than the ballot-access regulations dealt

with in prior cases. In any event, Congress enacted Sub-

59a

It is our view, in sum, that Congress intended to create

a certification mechanism designed to ensure both that

frivolous candidates are denied primary matching funds

and that eligible candidates are paid such funds promptly.

Our construction of section 9083 (b) (3)-(4) and section

9086(a) reflects these two policies. The first policy is

served by our holding that a candidate seeking to estab-

lish his eligibility under section 9033(b) (3)-(4) must

satisfy the Commission that he has the requisite docu-

mentation to establish his compliance with the funcraising

threshold. The second policy is served by our holding

that the Commission, in passing on the eligibility of a

candidate, must restrict its inquiry under section 9036

(a) to the face of the candidate’s threshold submission

except where that submission (or that submission to-

gether with other documents on file with the Commission)

contains patent irregularities suggesting the possibility

of fraud. :

There is no question but that, under the legal stan-

dards outlined above, the Commission, in October 1976,

acted properly in not approving La Rouche’s application

for matching funds, inasmuch as his threshold submis-

sions fell far short of the documentation required to

establish his eligibility. The proper course of action at —

this juncture would have been to await the submission _

of additional documentation. Instead, the Commission,

absent the requisite finding of patent irregularities on the

face of the initial submissions, chose to conduct an audit

title H in furtherance of sufficiently important govern-

mental interests and has not unfairly or unnecessarily

burdened the political opportunity of any party or

candidate.

424 U.S. at 94-96 (footnotes omitted). For the same reasons,

we find no constitutional infirmity in the certification proce-

dure outlined above at least as regards La Rouche.

ne OI a a

of CTEL’s books. This error, we think, was nonprejudi-

cial, however, because if the Commission had awaited the

requisite documentation, it would have contained, as the

audit revealed, patent irregularities of the sort that

surely would have warranted an audit of CTEL’s books.

It is our view that the Commission, once confronted with

these irregularities, acted both reasonably and within

the scope of its statutory authority in conducting a

further investigation and finally in rejecting, on the basis

of that investigation, La Rouche’s application for match-

ing funds. Accordingly, we affirm the decision under

review. ;

It is so ordered.

6la

[Logo of the Federal Election Commission]

October 21, 1976

Mr. Lyndon H. LaRouche, Jr.

Committee to Elect Lyndon LaRouche

P.O. Box 1972, GPO

New York, New York 10001

Dear Mr. LaRouche:

This leiter is in response to your certification to the

Commission for eligibility for Presidential Primary

Matching Funding. Prior to conducting an audit of your

threshold submission, the Commission raises several pre-

liminary questions.

The Presidential Primary Matching Funding is provided

to candidates seeking Presidential nomination for a polit-

ical party in primary elections. Primary election is defined

in 26 U.S.C. Section 9032(7) to mean:

.. an election, including a runoff election or a

nominating convention or caucus held by a political

party, for the selection of delegates to a national

nominating convention of a political party, or for the

expression of a preference for the nomination of

persons for election to the office of President of the

United States. :

The limitation of the public funding to candidates running

in party primaries was upheld by the Supreme Court in

Buckley v Valeo, 424 U.S. 1 (1976). Accordingly, we

request your submission of a listing of all party primaries

in which you were a candidate for the nomination of the

U.S. Labor Party for the 1976 election.

An additional question concerns the determination of

your matching payment. This term is defined in 26 U.S.C.

Section 9032(6) to mean:

... the period beginning with the beginning of the

calendar year in which a general election for the

62a

AO a A AE A EO, SCORE

office of President of the United States will be held

and ending on the date on which the national con-

vention of the party whose nomination a candidate

seeks nominates its candidate for the office of Presi-

dent of the United States, or, in the case of a party

which does not make such nomination by national

convention, ending on the earlier of—

(A) the date such party nominates its candidate

for the office of President of the United States; or

(B) the last day of the last national convention

held by a major party during such calendar year.

To assist the Commission in determining the matching

payment period, we would appreciate your providing

answers to the following questions:

(1) Are you listed on any State ballots for the 1976

election as the Presidential nominee of the U.S. Labor

Party? If so, what was the date of your qualification for

that ballot?

(2) Does the U.S. Labor Party have a national conven-

tion at which its candidate for the office of President is

nominated? If so, what was the date of the national

convention for the 1976 election?

(3) If the U.S. Labor Party does not nominate its

candidate at a national convention, the date the party

nominated its candidate for the 1976 election and the

method used to nominate.

We appreciate your assistance in this matter, an early

response will facilitate the Commission in processing your

certification request.

Sincerely yours,

/s/John G. Murphy, Jr.

JOHN G. MURPHY, Jr.

General Counsel

ce: Robert Case Liotta, Esq.

1619 New Hampshire Ave., N.W.

Washington, D.C. 20009

63a

LIOTTA, MASTER & BUFFONE

Law Associates

1619 New Hampshire Avenue, N.W.

Washington, D.C. 20009 &

John G. Murphy, Esquire

General Counsel

Federal Election Commission

1325 K Street, N.W.

Washington, D.C.

Re: Application of Lyndon LaRouche,

candidate of U.S. Labor Party

for Presidential Primary Matching Funds

Dear Mr. Murphy:

We have been recently retained to represent Mr. La-

Rouche in his application for Presidential Primary Match-

ing Funds.

: ‘ is Our remit that official written application

nd appropriate documentati

ig " ey on was submitted to you on

On October 21, 1976 a letter was sent to Mr. LaRouche

raising certain questions to which you desired answers

prior to completing processing of the application. We

herein undertake to answer these questions.

You raise the question of whether Mr. LaRouche

actually took part in a “primary election” as that term is

defined in 26 U.S.C. Sectton 9032(7). Our interpretation

of this section is that a qualified “primary election” can

be either of two things: (1) an actual election or (2) “a

nominating convention or caucus ...,” held for one of

two purposes.

Mr. LaRouche, in nearly all the states in which he is

now on the ballot, did not take part in “tan election” but

he did take part in a “nominating convention or caucus.”

As we interpret this section, the “nominating convention

64a

ane Ee ti

me ane wes

NR ee ee ee

PT a ct i bn

or caucus” qualifies if it is for either of two purposes: (1)

“for the selection of delegates to a national nominating

convention” or (2) “for the expression of a preference for

the nomination of persons for election.”

Mr. LaRouche campaigned for his nomination as the

candidate of the U.S. Labor Party (hereinafter referred to

as U.S.L.P.) in all states where the U.S.L.P. had an

organization which would place a candidate on the ballot.

He campaigned to convince the local party organizations

that he was the most viable candidate to represent the

U.S.L.P.

Each state organization held conventions or caucuses

wherein Mr. LaRouche was selected as the candidate to

be nominated at the national nominating convention. It

is difficult to specifically characterize this selection process

as either (1) the selection of delegates or (2) “the expres-

sion of a preference’ because there were in fact ‘‘dele-

gates” to the national nominating convention but the

selection of these delegates was done by the local party

organization. The local party in most cases elected a

Chairman who in turn was the “‘delegate’’ to the national

nominating convention. Twenty-one of these “delegates”

appointed a proxy to attend the convention to cast their

vote for Mr. LaRouche and ten “delegates” attended in.

person to cast their votes. This process might better be

characterized as the holding of a “caucus” for the “‘expres-

sion of a preference.” In either case, however, Mr. La-

Rouche has clearly complied with the letter and the spirit

of the law.

It is interesting to note that the proposed Rules and

Regulations of the Federal Elections Commission, Federal

adds an additional means by which a convention or caucus

may qualify. It sets forth the two alternatives in the act

but in Section 130.7(d) it states that additionally it may

‘‘a nominating convention or a caucus held by a

political party—

*(d) To nominate a candidate for election to the

office of the President of the United States.”

This paragraph seems to add a third option for qualifying

a “nominating convention or caucus.”’ Under the pro-

posed rules a caucus which neither chose delegates or

expressed a preference would qualify if it made a direct

nomination of the candidate.

Considering the difficulty involved in defining exactly

what a candidate must do, together with the newness of

the legislation and its apparent lack of sensitivity to the

fact that new and smaller parties may use slightly different

methods of nominating and choosing their candidate, it

is submitted that Mr. LaRouche has complied as well as

possible.

Assuming that the Commission accepts the argument

that delegates were validly chosen, Mr. LaRouche has

then definitely qualified by conducting a national nomi-

nating convention in which persons holding proxies from

each of the “‘delegates” cast their votes for Mr. LaRouche.

The national nominating convention was open to the

nominations of other slates but none were made. The

national nominating convention was held in New York

City on October 16, 1976. (See attached Exhibits A and

B).

Additionally, you have requested three pieces of infor-

mation which are supplied below:

(1) Mr. LaRouche is listed on the ballot in the following

states:

Indiana— September 1, 1976

Virginia— September 5, 1976

lowa— August 31, 1976

Vermont— September 15, 1976

New Hampshire— September 22, 1976

Tennessee— September 1, 1976

Minnesota—

Washington—

North Dakota—

September 14, 1976

September 23, 1976—

66a

=~ tainte aes be = * 2.

Wisconsin— July, 1976

New York— September 5, 1976

Washington, D.C.— August 15, 1976

Florida— Status pending court decision

North Carolina— U.S.L.P. has permanent

ballot status

Delaware— July, 1976

Ohio— March 31, 1976

Kentucky— March 31, 1976

New Jersey— April 19, 1976

Michigan— September, 1976

Idaho— May 30, 1976

Mississippi— June 29, 1976

Ilinois— July 15, 1976

Pennsylvania— August 15, 1976

Colorado— August 15, 1976

Connecticut— August 23, 1976

(2) As stated above th. U.S. Labor Party did have a

national convention on October 16, 1976.

(2) As stated above the U.S. Labor Party officially

nominated Lyndon LaRouche as its candidate at its

national convention on October 16, 1976. The method of

nomination was by delegates from the states. (See Exhibits

A and B).

In conclusion we submit that Mr. LaRouche has com-

plied with all the provisions of the Presidential Primary

Matching Payment Account Act, and that his application

for Funds should be granted.

Sincerely,

Robert Case Liotta

67a

Commission Memo No. 1033

[Logo of the Federal Election Commission]

November 2, 1976

MEMORANDUM

TO: The Commission

THROUGH: Lan Potter

FROM: ‘Jack Murphy

Attached find a memorandum regarding the status of

the application for primary matching money by Lyndon

LaRouche, the presidential candidate for the U.S. Labor

Party. Continuing contacts with his representatives for

purposes of assuring that the factual picture is clear have

delayed submission of this report to the Commission. |

do think the matter should be taken up by the Commission

as quickly as possible now, and accordingly request that

it be placed on the agenda for Thursday, November 4,

1976.

Attachment

AGENDA ITEM

For Meeting of: | 1-4-76

Agenda Item No: II

Exhibit No: II

68a

NL ER. Ser

a A ee ORE EON, ue enone on

[Logo of the Federal Election Commission]

November 2, 1976

MEMORANDUM

TO: The Commission

THROUGH: Lan Potter

FROM: Jack Murphy,

Dan Swillinger

SUBJECT: Application of Lyndon LaRouche for

Presidential Primary Matching Funds

|. Background

On October 14, 1976 the Commission received a hand

delivered, notarized certification pursuant to 26 U.S.C.

Section 9033 from Lyndon H. LaRouche, Jr., who stated

he is seeking the nomination of the U.S. Labor Party for

election to the Office of President. The certification stated

that Mr. LaRouche had met the requirements set forth in

Section 9033(b) and it also contained the agreements

required in 9033(a). Over the course of the next week,

discussions were had between Commission staff and rep-

resentatives of Mr. LaRouche’s committee regarding the

general requirements for certification for eligibility. On

October 21, 1976, we directed a letter to Mr. LaRouche

requesting additional information on the method by which

he was nominated. A response to that letter was received

on October 23, signed by Mr. Robert C. Liotta, counsel

for Mr. LaRouche. Further telephone communication

between Commission staff and Mr. Liotta occurred on

October 26, and on October 27, Mr. David Heller deliv-

ered to the Commission on behalf of Mr. LaRouche a

computer printout purporting to list all contributors to

Mr. LaRoe from October |, 1975 through October 25,

1976. During the course of the meeting with Mr. Heller,

69a

attended by Drew McKay, Joe Stoltz and Dan Swillinger,

it was indicated to Mr. Heller that the matter would likely

be placed on the Commission’s agenda for November 4,

and, assuming the Commission approved going forward

with the field audit, that audit would likely take place the

beginning of the week following the Commission’s con-

sideration of the matter. On October 28, the Commission

was served with formal notification and a copy of the

complaint, which Mr. LaRouche filed in the U.S. District

Court for the District of Columbia seeking a temporary

restraining order to compel the Commission to consider

the question of certification for matching funds. On

October 29, Judge Corcoran denied the request for the

restraining order.

2. Issues before the Commission

There are three basic issues which the Commission must

consider in determining whether Mr. LaRouche has met

the threshold requirements:

(a) Was Mr. LaRouche a candidate for nomination

of a political party?

(b) Has he satisfactorily complied with the Title 2

reporting requirements?

amounts of $250 or less?

(a) Mr. LaRouche was nominated as the Presidential

candidate of the U.S. Labor Party at a national nominat-

ing convention on October 16, 1976. He received the

unanimous vote of delegates from 30 states and the

District of Columbia. According to letters and affidavits

received by the Commission, Mr. LaRouche received the

nomination after securing the support of the U.S. Labor

Party caucus in each state. Beginning early in 1976, Mr.

LaRouche sought the endorsement of the Labor Party

caucus in each of the 31 jurisdictions. For the Labor

Party, a state caucus is the equivalent of a primary election

or convention. After a State caucus endorsed Mr. La-

Rouche, it would proceed to gather the requisite signa-

tures to place Mr. LaRouche on the general election

70a

he ae an lL EE Nee ER NEN a ee oe ot

ballot as the Labor Party candidate in that state. This

petition process is necessary in all but two states (North

Carolina and Idaho), in which the Labor Party has

permanent ballot status, and in one state (Washington) in

which a party convention was held. Following completion

of the petitioning process, the Labor Party held its con-

vention in New York City, at which Mr. LaRouche and

Wayne Evans were nominated as the Presidential and

Vice-Presidential candidates.

Assuming the caucus process described above is verifi-

able, the Office of General Counsel believes that Mr.

LaRouche, through October 16, was a candidate for

nomination of a political party and therefore meets the

requirements of 26 U.S.C. Section 9033(b)(2) and Section

131.2(a) of the Commission’s proposed regulations.

(b) Since early in 1976, the Committee to Elect Lyndon

LaRouche has withheld the identification, occupation,

and principal place of business of over $100 contributors.

At the meeting with Commission staff on October 27, Mr.

Heller stated that the LaRouche committee intends to file

an amendment to its reports to bring them within full

compliance of Title 2 requirements. The computer print-

out showing all contributions received includes the listing

of over $100 contributors with the requisite additional

information.

It is the recommendation of the Office of the General

Counsel that if the LaRouche committee does file the

appropriate amendment, and all other required reports

have been filed, the Commission should determine that,

for purposes of qualification for matching funds, the

LaRouche committee is in substantial compliance with

Title 2 reporting requirements as required by Section

131.1(a)(4).

the Commission was determining the etigibility of other

Presidential candidates, there was no case in which there

was a question of whether the $100,000 threshold amount

had been raised. In most cases, the normal Title 2 reports

indicated that well in excess of that amount had been

Tla

raised. At the time the application letter from Mr. La-

Rouche was received, his committee had not filed the

October 10 report, and reports on hand indicated that

substantially less than $100,000 had been raised by his

committee. The October 10 report, received on October

26, indicated that between January 1, 1975 and September

30, 1976, the LaRouche committee had raised approxi-

mately $75,000. The computer printout showing all con-

tributions by the LaRouche committee between October

1, 1975 and October 25, 1976 indicated that he had raised

over $5,000 in at least 20 states.

However, that printout raises an additional question. A

preliminary review of the printout indicates that if all

contributions received after October 16, 1976, Mr. La-

Rouche’s date of ineligibility, are excluded from the

contributions to determine eligibility, Mr. LaRouche will

not meet the threshold $5,000 requirement in at least

seven states. Neither the statute nor the regulations spe-

cifically denote the cutoff date for contributions to meet

the threshold requirement. Section 130.8(a)(3) provides

that contributions may be matchable if received and

deposited no later than December 31, 1976. Based on that

provision, it could be argued that contributions to deter-

mine eligibility could be made and counted through the

same date. Conversely, it also could be argued that for

eligibility purposes, the end of the matching period (the

date of nomination) is the appropriate cutoff date for

contributions to determine eligibility, since a candidate

presumably will not be raising funcs for the purpose of

influencing his nomination after that date. The Commis-

sion has consistently held, as reflected in Section

110.1(a)(2) that contributions made before the date of a

primary election or nominating convention are presumed

to be made for the primary, and contributions made after

that date are presumed to be for the general election. In

the context of Title 26, such post primary contributions

are presumptively not “made for the purpose of influenc-

ing the result of a primary election.”’ 26 U.S.C. Section

9032(4)(A). It is the clear Congressional intent that the

72a

threshold requirement is a standard to determine the

viability and national appeal of a candidate. It is our

judgment that Congressional intent would be contradicted

if a candidate’s eligibility is determined by contributions

after he is no longer a candidate for nomination.

3. Recommendation

It is the recommendation of the General Counsel's

Office that contributions received after October 16 not be

counted for the purpose of determining whether a candi-

date meets the fundraising threshold. The Counsel's Office

further recommends that a field audit not be undertaken

to determine whether Mr. LaRouche has met the eligibility

requirements, since information on hand does not indicate

that the threshold has been met, the requisite for prior

field audits.

73a

[Logo of the Federal Election Commission]

December 27, 1976

MEMORANDUM

TO: THE COMMISSION

THROUGH: John G. Murphy, Jr.

Orlando B. Potter

Gordon Andrew McKay

FROM: Joe Stoltz

Charles N. Steele

SUBJECT: Recommendation to Expand Audit

of Committee to Elect Lyndon LaRouche

to include Related Organization

At its meeting of November 4, 1976, the Commission

approved a matching fund threshold audit of the Com-

mittee to Elect Lyndon LaRouche |

At the present time the Committee to Elect Lyndon

LaRouche (CTEL) has reached the required threshold in

18 states and has collected in excess of $5,000 in 2 others.

The Committee is currently obtaining the required docu- —

mentation in these two states. The short fall is $69.00 in

Connecticut and $195.00 in Indiana. It is the staff's belief

that the requisite dscumentation wili be submitted within

a few days. If so, sometime in early January the submission

will be ready for presentation to the Commission, with

evidence pertaining to CTEL’s nomination and primary

processes.

At the same time, the staff intends to continue its audit

work and feels it would be helpful to expand it to include

Due to extenuating circumstances this fails to meet the requirement

for circulation and a waiver of the rules is requested.

74a

examination of records of organizations associated with

CTEL. We believe this because the Committee to Elect

Lyndon LaRouche occupies space and has common per-

sonnel with four other organizations (see Attachment 1).

These four organizations also account for the niajority of

CTEL’s expenditures and debt (see Attachment 2). During

review of the Committee’s itemized contributions exceed-

ing $100, it was noticed that a number of contributors

had a common occupation, that of Volunteer Organizer

for the National Caucus of Labor Committees (NCLC).

The NCLC is an unregistered committee, which made in-

kind contributions of $6,250.00 to CTEL, and which has

no salaried employees. These contributions from NCLC

Volunteer Organizers were scheduled and compared to

the twenty states being used for threshold. Contributions

from NCLC Volunteer Organizers were received in 21

States (one of which was not used for threshold); 57% of

these contributions were received in the last two weeks of

the eligibility period (while only 41% of the total contri-

butions were received during the same period).

NCLC Volunteer contributions also account for 16% of

the total contributions received. Moreover, the five states

shown below are of the particular interest because of the

percentage of the funds received that were contributed by

NCLC Volunteer Organizers and the timing of those

contributions.

NCLC also received payments from CTEL of

$31,808.27 during the period of October | through Oc-

Percentage of Total

Contributions Percentage of NCLC

from NCLC Volunteer Volunteer Organizers

State Organizers Contributions in October

Illinois 30.4% 82.8%

Massachusetts 27.7% 79.9%

Missouri 24.2% 42.0%

New Jersey 29.7% 43.0%

Wisconsin 52.7% 83.2%

75a

tober 18, 1976, which accounts for 55.22% of all CTEL

expenditures for that period. Further, CTEL raised 99.3%

of its total contributions in 20 threshold states with only

$870.00 raised in the remaining 31 states. Examination of

CTEL contributor records shows the numbers of contrib-

utors made contributions of $50.00 or more in the last

weeks of the eligibility period. Also included are several

cases where more than one such contribution was received

on the same day and/or on consecutive days from the

same contributor. In many cases, the contributor’s listed

occupation seems unusual for fairly heavy political con-

tributions. Although these patterns do not prove any

irregularities in the Committee's contributions, the staff

believes that audit work on NCLC, and confirmation of

contributions with contributors to CTEL should be done

before any initial payments are made. This audit work

would include audit of records of the U.S. Labor Party,

which raised $96,000.00 in cash for the 30-minute NBC

broadcast by Mr. LaRouche on November 1, 1976, as

well as Campaign Publications, Inc., and New Solidarity

International Press, Inc., which, with NCLC, are CTEL’s

major creditors. Accordingly, the staff would like author-

ity to continue this audit in accordance with this recom-

mendation.

76a

. ——""

—— ?

[Logo of the Federal Election Commission]

January 13, 1977

MEMORANDUM

TO: THE COMMISSIONERS

THROUGH: Orlando B. Potter

Bill Oldaker

Bob Costa

FROM: Joe Stoltz

Charlie Steele

SUBJECT: Recommendation to Confirm

Contributions to the Committee to Elect

Lyndon LaRouche with Contributors

During the meeting of December 29, 1976, the Com-

mission considered the attached memorandum dated De-

cember 27, 1976. This memorandum outlined the reasons

that the staff believes further audit work is needed before

matching payment eligibility can be determined in the

case of the Committee to Elect Lyndon LaRouche. Part

of the additional work that is considered necessary is the

confirmation of contributions with contributors. The staff

would propose to begin this process simultaneously with

the commencement of the additional work at Committee

headquarters. The staff further proposes to accomplish

this confirmation via personal interviews. The personal

interview method was chosen because of the patterns of

contributions outlined in the December 27th memoran-

dum and patterns of cash contributions developed since

that time.

If no objection is raised within 24 hours, the staff will

proceed as outlined above.

77a

LIOTTA, MASTER & BUFFONE

Law Associates

1619 New Hampshire Avenue, N.W.

Washington, D.C. 20009

February 3, 1977

Mr. Charles Steele, Esquire

Federal Elections Commission

1325 K Street, Northwest

Washington, D.C. 20463

Re: Committee to Elect LaRouche

Dear Mr. Steele:

This letter will confirm our conversations and under-

standings of the past week or so.

On January 26, 1977, I wrote to you giving our be-

grudging consent to the Federal Elections Commission

(FEC) for individual personal verifications of contribu-

tions to the Committee to Elect LaRouche (CTEL). I also

explained our position with regard to auditing the “‘re-

lated”’ organizations listed in your letter of January 21,

1977.

As you know, my client called me the following day

with a list of horror stories about early morning visits by

your teams of investigators and intimidation of CTEL

contributors including blatant allegations of fraudulent

contributions and veiled threats of criminal prosecution.

In our conversations on that date, you also informed me

that many of the contributors refused to talk to your

investigators. As I explained then, it is quite understand-

able that when people are confronted in their homes or

places of business by Federal agents questioning them

about contributions to a radical minority political party,

that they would be reluctant to give any information—

especially in light of the recent exposure of the injustices

78a

oe An Na ger Race ae BRET etn

re ee eee ee

and abuses heaped upon members of other minority

parties in this country in the past ten years.

You also informed me that you still had a problem with

the threshold question of $5,000 in contributions in twenty

(20) states because a verification submitted for Mr. Joseph

P. McDonough from Connecticut was duplicative of a

previous verification and did not increase the verified

amount over the $5,000 figure. It is my understanding

that on February 2, 1977 Mr. McDonough came to your

office and presented money order receipts and a signed

statement. As a result, you should have verification for

the following amounts from Mr. McDonough:

(1) 3/10/76—$10

(2) 7/26/76/— $3

(3) 9/22/76—$50—cash

(4) 10/12/76—$78—money order receipt

(5) 10/14/76—$37—money order receipt

(6) 10/15/76—$40—cash—voucher provided

In addition I understand that Mr. McDonough mistakenly

submitted a money order receipt for $42.50 dated October

19, 1976 which is obviously not includable as it is beyond

the cut-off date of October 16, 1976. Regardless, I believe

this should adequately meet the requirement you imposed

for individual verification of contributions by check,

money order, or written statement.

We now expect and request that the Commission take

immediate action on our application.

Sincerely,

Robert Case Liotta

cc: Ms. Marcia Pepper

Joel Joseph, Esquire

79a

LIOTTA, MASTER & BUFFONE

Law Associates

1619 New Hampshire Avenue, N.W.

Washington, D.C. 20009

February 8, 1977

Charles Steele, Esquire —

Federal Elections Commission

1325 K Street, Northwest

Washington, D.C. 20005

Re: Committee to Elect LaRouche

Dear Mr. Steele:

I would like to confirm two items that I believe we

agreed upon earlier.

On February 2, 1977, the Commission received the

written statement of Mr. McDonough verifying his con-

tributions to the Committee to Elect LaRouche (CTEL).

In our conversations on that date you stated that you

believed this action would satisfy the Commission’s re-

quest for written verifications in lieu of checks or money

orders, of contributicns for the state of Connecticut.

Connecticut was the one state of the twenty submitted

where the $5,000 contribution had not been verified as

requested.

I understand of course that the Commission has re-

quested and is requesting further verification of these

same contributions by way of personal interviews with

contributors. As you know, it is our position that Section

9033 does not require these extreme measures, but we will

not oppose it if it is carried out without intimidation and

with advance notice to potential interviewees. I have

instructed my client to notify any contributors who call

the New York office of the United States Labor Party

that they should speak with Federal Elections Commission

(FEC) investigators if they want to.

80a

eas enennneee ee ee

Finally, I just want to make clear what I told you on

February 2, and 7, 1977 regarding our intention to file

Suit pursuant to Section 9041. It is our position that on

February 2, 1977 we established our eligibility under

Section 9033 in accordance with FEC “policy” and that

pursuant to Section 9035 the Commission is obligated to

certify our eligibility for payrnent to the Secretary of the

Treasury within ten (10) days. Therefore, if our application

is not acted upo1. by February 14, 1977, we will file our

petition for review.

It is our position that Section 9033 does not specify in

what manner a candidate must demonstrate his eligibil-

ity—it merely states that ‘ta candidate shall certify to the

Commission that, (3) the candidate has received matching

contributions which in aggregate exceed $5,000 in contri-

butions from residents of at least 20 states ...”’ Many

months ago, my client “certified” that he had met this

condition and then voluntarily complied with the Com-

mission’s “policy” that the contributions had to be veri-

fiable by checks, money orders or written statements of

contributors. Our agreement to provide these documents

led to months of delay in processing our application. We

have now complied with that policy and are requesting

action pursuant to Section 9036.

Sincerely,

Robert Case Liotta

cc: Ms. Marcia Pepper

Joel Joseph, Esquire

8la

[Logo of the Federal Election Commission]

February 10, 1977

Report of the Compliance Review Section

Office of Compliance

Federal Election Commission

Committee to Elect Lyndon LaRouche

1. Background

As directed by the Commission, an audit was conducted

of the Committee to Elect Lyndon LaRouche pursuant to

Section 438(a)(8) of Title 2 of the United States Code (2

U.S.C. 438(a)(8)). This report only addresses whether the

candidate has satisifed the provisions of Section 9033(b)(3)

and (4) of Title 26 of the United States Code (26 U.S.C.

9033(b)(3) and (4)). Other eligibility requirements as stated

in 26 U.S.C. 9033 are not addressed in this report.

The Compliance Review Section examined the reports

and records of the Committee to Elect Lyndon LaRouche

was a 14-month period ending October 18, 1976. Our.

examination was made in accordance with generally ac-

cepted auditing standards, including appropriate tests of

accounting records and other auditing procedures neces-

sary under the circumstances.

The findings and conclusions contained in this, report

are rendered on the basis of the audit performed and

definition of contribution under 26 U.S.C. 9034, as am-

plified by Section 130.8 and 131.1 of the Commission’s

Proposed Regulations governing eligibility, the Guideline

for Presentation in Good Order, and upon advice and

guidance provided by the Commission’s Office of General

Counsel.

Il. Findings and Conclusions

On January 14, 1977 the Commission approved the

direct contacting of contributors to verify contributions

in three states: Delaware, Massachusetts, and Wisconsin.

82a

Based on the results of these confirmations, outlined in

the attached chart, the Committee to Elect LaRouche has

not satisifed the provisions of Section 9033(b)(3) and (4)

of Title 26 of the United States Code (26 U.S.C. 9033

(b)(3) and (4)) requiring the receipt of an excess of $5,000

in matchable contributions in amounts of $250 or less in

each of twenty states.

83a

March 2, 1977

Mr. Charles Steele, Esquire

Federal Election Commission

1325 K Street, N.W.

Washington, D.C.

Re: Committee to Elect Lyndon LaRouche

Dear Mr. Steele:

Enclosed please find copies of two affidavits which back

up the allegations in my recent letters regarding intimi-

dation by FEC investigators who were supposed to be

verifying contributions which were “‘certified’’ to the

Commission.

It is our position that these affidavits cast a cloud over

your reliance on the results of this investigation in denying

the application for matching funds. As I stated in earlier

correspondence, it seems incredible to deny the application

on the grounds that contributors did not cooperate with

your investigators when tactics such as those documented

in the affidavits were used.

On the matter of the three letters captioned, MUR 281,

MUR 328, and MUR 368, I have just reached a tentative

agreement with Biz Van Gelder, of your office, to the

effect that she was reviewing the files and would send out

one letter, clarifying and consolidating the response which

the FEC expected in these matters. I will thus await this

letter before responding on behalf of my client on all

three matters.

84a

ERE nee Oe ee a

Ne a Rt ry Lc aS a 8 TR me he etm Owe bes A

Enclosures

ce: Joel Joseph, Esquire

Ms. Marcia Pepper

RCL:3/2/77:cew

85a

Sincerely,

Robert Case Liotta

AFFIDAVIT OF LEROY JONES

COUNTY OF NEW YORK:

STATE OF NEW YORK:

I, LEROY JONES, do hereby swear and depose that

the following is true.

1. I reside at 4 Brandywine Blvd. in Wilmington, and

have lived there for 23 years.

2. | am a member of the U.S. Labor Party and a

contributor to the Committee to Elect LaRouche in 1976.

3. At 7:45 on the morning of January 26, 1977 my wife

answered a knock on our front door with two men at the

door indicating to her that they were from the Federal

Election Commission.

4. My wife told me that they asked if a Robin Kieffer

or Chris Douglas were there, to which she replied that

they weren't.

_ 5. My wife then woke me up and told me who was

there and that they wanted to speak to me.

6. I went to the door and one of the men showed

identification to the effect that he was from the Federal

Election Commission, and that his name was Keith Vance.

7. Mr. Vance asked me how much money I gave to the

Committee to Elect LaRouche, and where I got the money

from.

8. I answered these questions to the best of my knowl-

edge.

9. Mr. Vance asked to see my canceled checks and

asked what date I had written the check.

10. I answered that I didn’t think I had either bit of

information on hand immediately at which point he did

say to me: If you don’t give me the exact information I

asked for you could get sentenced up to 10 years in jail

and be given a $10,000 fine ... you’ve got a nice house

here, you wouldn’t want to lose it would you?

11. He said this in an extremely threatening tone, at

which point I went upstairs and searched with my wife

for 12 hour looking for receipts. | showed Mr. Vance

86a

my tax returns and a canceled check from a contribution

made to the CTEL in December.

12. Mr. Vance asked me if I made all contributions by

check, and wanted to know the banks the checks were

drawn on.

13. I answered these questions to the best of my ablity.

14. Mr. Vance then began asking numerous questions

as to my political affiliations and beliefs.

15. He demanded to know where a Robin Kieffer and

Chris Douglas were living, and the exact dates that they

lived at my house.

16. I answered these questions to the best of my ability

‘indicating where further information could be gotten

about these matters.

17. Mr. Vance then began asking numerous questions

as to how the Labor Party raises its money, who its

contributors are, etc. all of which I answered to the best

of my ability.

18. Mr. Vance then asked me for all my personal bank

account numbers and all Labor Party bank account

numbers and demanded that we sign statements permit-

ting them to inspect my bank accounts, threatening me

with the same reprisals should I refuse.

19. In great fear I signed the statements, and received

no copy or receipt.

20. Mr. Vance then renewed questioning asking what

activities I had engaged in with the party and who paid

my expenses. These questions were detailed and very

personal.

21. Mr. Vance then turned to my wife and gave her his

business card and told her: If you want to change your

story, just get in touch with him at the number listed on

the card.

22. They left at 9:15 AM.

23. Both my wife and myself felt thoroughly intimi-

dated and in fear of loss of security and property were we

not to comply with Mr. Vance’s questions. At no point

was I informed of my rights or as to the nature and

purpose of the interrogation.

87a

24. I contacted the Labor Party headquarters after the

interrogation and informed them of what had happened.

25. Because of the great tension experienced on this

occasion I had to make an extraordinary visit to my

doctor on Tuesday, Feb. 2nd. He took an electro-cardi-

ogram for precaution after I had told him of the incident

and changed the prescription of the medicine. I have a

heart condition and have experienced over | dozen heart

attacks over the past period. I am 59 years old, and retired

because of my medical condition.

/s/Leroy B. Jones

LEROY B. JONES

Sworn to before me this

2nd day of February, 1977

MARIE MENDEZ

Notary Public State of New York

No. 314020518

88a

PRIMA TERI ET Ne ate an we nen Serer eT en

Siet

See ee

AFFIDAVIT of WILLIAM TOPPIN

January 28, 1977

I, WILLIAM TOPPIN, do hereby swear that the follow-

ing is true.

1. I live at 103 Chesterfield Road, New Castle, Dela-

ware.

2. On Wednesday, January 26, 1977, at about 10:30

_ A.M., two men appeared at the door of my home.

3. They claimed they were from the Federal Election

Commission. |

4. They came into my house, showed me identification,

and said they wanted to ask me some questions.

5. One of the agents was named Vance. I do not recall

the other agent’s name.

6. They told me I might have to go to Washington,

D.C. to testify in Federal Election Commission hearings

there.

7. They asked me questions in minute detail about how

much and by what means I contributed money to the

Committee to Elect Lyndon LaRouche during the 1976

presidential campaign.

8. They also continually questioned me about how

much money I have given to the U.S. Labor Party.

9. They wanted to know how much money I gave to

the Committee to Elect Lyndon LaRouche, how I gave it,

who I gave it to, if it was by personal check or cashier’s

check, etc.

10. They demanded to know if I was buying the house

I was living in, or if I was just renting it.

11. They demanded to know if I was a member of the

National Caucus of Labor Committees.

12. They demanded to know if I organized with the

U.S. Labor Party.

13. They demanded to know what people did when

they organized with the U.S. Labor Party.

89a

14. They demanded to know if I shared the Labor

Party's beliefs.

15. They demanded to know the whereabouts of other

U.S. Labor Party members in Delaware.

16. I was intimidated by their questioning because they

were belligerent, and because throughout the interroga-

tion the agents were continually misquoting statements I

had previously made, and trying to get me to agree to

their reformulation and distortion of my previous state-

ments.

17. The agents compelled me to draw up a statement

about my contributions to the U.S. Labor Party and the

Committee to Elect Lyndon LaRouche and sign it.

/s/William H. Toppin

WILLIAM TOPPIN

Sworn to and subscribed before me

this 28th day of January, 1977

/s/Richard P. McNamee

NOTARY

RICHARD P. McNAMEE

Notary Public, Philadelphia

Co.

My Commission Expires

February 21, 1980

90a

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.