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FEC v. PHILLIPS PUBL.

July 16, 1981

FEDERAL ELECTION COMMISSION, Petitioner,
v.
PHILLIPS PUBLISHING, INC., Respondent



The opinion of the court was delivered by: FLANNERY

MEMORANDUM OPINION

I. Background

 This action is before the court on the petition of the Federal Election Commission (FEC) for court enforcement of two Commission orders to answer written questions. The Commission orders are addressed to Thomas Phillips and Ronald Pearson. The questions seek detailed information about the personnel and operations of Phillips Publishing, Inc. and one of its bi-weekly newsletters, The Pink Sheet on the Left.

 Respondent Phillips Publishing, Inc. publishes ten newsletters on various topics, including satellite, telephone, radio, and video technology, retirement, travel, and real estate. The Pink Sheet on the Left is a conservative, anti-communist publication with an annual subscription rate of $ 39 and a circulation of approximately 14,000. It has been in existence for over ten years. The Pink Sheet and Phillips Publishing are neither owned nor controlled by any political party, political committee, or candidate. Affidavit of Thomas Phillips P 5.

 In early 1980 while Senator Edward Kennedy was a candidate for the Democratic Presidential nomination, Phillips Publishing sent a mailing to regular and potential subscribers soliciting subscriptions to The Pink Sheet and seeking donations for placing the newsletter in college libraries. The mailing included a one-page letter from Thomas Phillips, the publisher of the newsletter; a three-page letter from Ronald Pearson, managing editor; a one-page series of quotations endorsing the newsletter; and a one-page combination subscription order form and "Teddy Kennedy Opinion Poll" which could be completed and returned to the newsletter. The mailing appealed to political conservatives and strongly emphasized The Pink Sheet's opposition to the campaign and philosophy of Senator Kennedy.

 On June 24, 1980 the FEC found "reason to believe" that the respondent had violated 2 U.S.C. §§ 433, 434(c)(1), 435(b), 441b, and 441d, and initiated an investigation pursuant to 2 U.S.C. § 437g(a)(2). Briefly, § 433 requires political committees to register with the FEC; § 434(c)(1) requires anyone other than a political committee who makes independent political expenditures in excess of $ 250 to file certain reports; § 435(b) was repealed January 8, 1980; *fn1" § 441b prohibits labor unions and corporations from making contributions to or expenditures for candidates in federal elections; and § 441d requires anyone who makes an independent expenditure or solicits political contributions to state whether or not the candidate paid for the communication.

 The FEC notified respondent of its "reason to believe" finding by a letter dated June 26, 1980. The notification identified the following excerpts from The Pink Sheet's promotional material as being in violation of federal election laws:

 
1. "We must stop Kennedy before he seizes the Presidency."
 
2. "You can help with this effort to stop Teddy Kennedy."
 
3. "You learn how you can use this valuable information to help defeat Teddy Kennedy's drive for the Presidency."
 
4. "Whether you are a man or woman, young or old, a businessman, teacher, student, employee, employer, union member or government worker you can actually help combat Teddy Kennedy and advance the cause of conservatism in America."

 The Commission's letter went on to explain its determination that The Pink Sheet's solicitation letter is not covered by the press exemption contained in § 431(9)(B)(i):

 
In your letter dated April 11, 1980, you defend your clients on the ground that the activity in which the Phillips Publishing Inc. and The Pink Sheet On The Left were engaged is exempt from the ...

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