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May 15, 1986


The opinion of the court was delivered by: GOETTEL


The Federal Elections Commission (the "FEC"), a federal agency empowered with exclusive jurisdiction to administer, interpret and enforce the Federal Elections Campaign Act of 1971 ("FECA"; "the Act"), brought this action against the National Conservative Political Action Committee ("NCPAC") seeking declaratory and injunctive relief. NCPAC is a non-profit, non-membership organization registered in the District of Columbia to support or oppose candidates for elective office. During the period in question (March 1981 - August 1982), NCPAC was registered with the FEC as a multi-candidate political committee ("MCPC"). *fn1" The FEC contends that during the 1982 New York senatorial campaign, NCPAC contributed more than $5000 to a single candidate in violation of section 441a(a)(2)(A) of the Act. *fn2" In failing to report these contributions, NCPAC allegedly violated section 434(b)(H)(i) of the Act as well. *fn3" This Court has jurisdiction over this action pursuant to 28 U.S.C. § 1331 (1982).

Both parties now cross-move, pursuant to the Fed. R. Civ. P. 56, for summary judgment. NCPAC also moves, pursuant to Fed. R. Civ. P. 15 to amend its answer. For the purposes of this motion, the defendant's answer is deemed amended. For the reasons stated below, the plaintiff's motion for summary judgment is granted.

 I. Background

 The following facts are not in dispute. During the 1981-82 election cycle, NCPAC established "New Yorkers Fed Up with Moynihan," a political action committee dedicated to defeating the reelection bid of New York's United States Senator, Daniel Patrick Moynihan. NCPAC hired Arthur J. Finkelstein Associates ("Associates"), a polling and political consulting firm owned and operated by Arthur J. Finkelstein, to develop a media strategy, to conduct and analyze polls and to select election issues on which Senator Moynihan was most vulnerable. Finkelstein himself wrote the script for NCPAC's main radio commercial urging the defeat of Senator Moynihan. From April 1981 until August 1982 NCPAC funnelled $73,755 to Associates to urge Moynihan's defeat.

 In March 1981, prior to the commencement of NCPAC's anti-Moynihan effort, Bruce Caputo announced his intention to seek the Republican nomination for the U.S. Senate seat in New York. On or about that time, Caputo and his political committee, the Caputo for Senate Committee (the "Committee"), retained Finkelstein, a longtime friend of the candidate, as a paid political consultant. Between March 1981 and March 1982, when Caputo withdrew from the race, *fn4" the Committee paid Finkelstein's firm $28,000 to assist in all of the aspects of Caputo's campaign including formulating election strategy, hiring campaign staff, and utilizing the media.

 Finkelstein and NCPAC also had long been associated, *fn5" and, during the time NCPAC retained Finkelstein, it knew that Finkelstein was working directly for Caputo. In fact, it was Finkelstein who recruited Robin Martin, a Caputo campaign volunteer, to head the "New Yorkers Fed Up with Moynihan" media campaign.

 In January 1982, the FEC received a complaint from the New York State Democratic Committee alleging that independent expenditures reported by NCPAC for its anti-Moynihan campaign were actually in-kind contributions to Caputo and his authorized committee. *fn6" The complaint further alleged that these contributions exceeded section 441(a)(2)(A)'s $5,000 limit on contributions to a candidate and that NCPAC had violated section 434(b)(4)(H)(i) by failing to report the contributions. The FEC found reason to believe these allegations and, in April 1982, began an investigation. *fn7" In September 1983 the FEC found probable cause to believe that NCPAC had violated FECA's contribution and disclosure requirements and attempted to correct these violations through informal methods. *fn8" These methods failed *fn9" and, on February 6, 1984, the FEC brought this action to enforce the provisions of the Act. *fn10"

 II. Discussion

 Section 441a(a)(2)(A) of the Act forbids a multi-candidate political committee from making a contribution "to any candidate and his authorized political committees with respect to any election for Federal office which, in the aggregate, exceeds $5000." 2 U.S.C. 441a(a)(2)(A) (1982). Expenditures made "in cooperation, consultation, or concert, with, . . . a candidate, his authorized political committees, or their agents, shall be considered to be a contribution to such candidate." *fn11" 2 U.S.C. § 441a(7)(B)(i) (1982). FEC regulations clarify this language. *fn12" According to those regulations, the aforementioned definition of contribution includes any expenditure "[m]ade with the cooperation or with the prior consent of, or in consultation with, or at the request or suggestion of, a candidate or any agent . . . of the candidate . . . ." 11 C.F.R. § 109.1(b)(4) (1986). This definition, in turn, encompasses

 [a]ny arrangement, coordination or direction by the candidate or his or her agent prior to the publication, distribution, display, or broadcase of the communication. An expenditure will be presumed to be so made when it is --

 (A) Based on information about the candidates plans, projects, or needs provided to the expending person by the candidate, or by the candidate's agents, with a view toward having an expenditure made;

 (B) Made by or through any person who is, or has been, authorized to raise or expend funds, who is, or has been, an officer of an authorized committee, or who is, or has been, receiving any form of compensation or reimbursement from the candidate, the candidate's committee or agent . . . .

 Id. at § 109.1(b)(4)(i). The FEC argues that the $73,755 NCPAC expended through Finkelstein, who was Caputo's agent, actually constituted contributions to the Caputo campaign. NCPAC thereby exceeded the $5,000 limit on contributions *fn13" ...

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