This file contains archived live captions of the open meeting of the Federal Election Commission held on May 21, 2015. This file is not a transcript of the meeting, and it has not been reviewed for accuracy or approved by the Federal Election Commission. >> Perhaps we could just begin with some of the housekeeping matters, Madam Secretary, and then we can wait for commissioner Walther to call in. Just to let everybody know, commissioner Walther is in Nevada for his daughter's wedding. Yes, it's an absolutely excused absence. He's not present here today. He's leaving from Reno after the part of the meeting that he can attend. He won't be here this afternoon, but he's leaving to go to the ranch for the cowboy wedding. So we're very happy to have him here by phone when he calls in. And expwrus a couple other changes to the agenda. Just to let everybody know. Since he can't attend the afternoon portion, we will move some of the items around: We're going to have the presentation by the FEC staff on enhanced engagement with -- Welcome, Steve. Thanks for calling. So we will have the presentation by the FEC staff on enhanced engagement and the other matters that are somewhat related to that, the information sharing, statement of policies will also come first on the agenda. And the audits will be in the afternoon. We're also going to switch around item 5 and 6 and take the directive first. And Item 5 after. So with those changes, we have some late submitted documents this morMr. vice chair. >> Thank you. I rule we wave the agenda documents in order to consider document No. 15-24-B and agenda document No. 15-25-B. >> Thank you. The vice chairman has so moved. Are there any questions or comments? All right. Hearing none, all those in favor please indicate by saying aye. >> Aye. >> Thank you. Madam Secretary, the vote was unanimous. Then we also -- the Item No. 1 is correction and approval of minutes for March 19th, 2015, agenda document No. 15-19A. Mr. vice chair. >> Thank you. I move approval of the minutes for the meeting held on March 19th, 2015, as set forth in agenda document No. 15-19-A. >> Thank you. Any questions or comments about the approval of the minutes? Hearing none, all those in favor please indicate by saying aye. >> Aye. >> all right. Madam Secretary, that was -- vote was unanimous. The next item is agenda document 15-23A, which is the memoranda from the deputy general council's and special council dated April 2nd and also agenda document No. 15-23B. It is a presentation by the FEC staff on enhanced engagement with the public and with stakeholders. I'd like to introduce this matter by saying at the beginning of the year, at the first meeting of the year when I was chair, I committed to try to find ways where the FEC could be a little less insular, provide transparency, as well as provide ways for the public to engage with the ways we consider as an agency. It is clear that our agency does the work that we do on behalf of the public. So it is very important for us to be consistently and constantly reassessing what we do to make sure that we're providing the public with as much information and ability to engage with our work as possible. So the discussion we're having today is a result of my request to staff to think about what they already do to engage stakeholders and the public and also how we can make improvements. They have prepared what I believe is an incredibly thoughtful and thorough report. Both the Office of General Counsel as well as the administrative office. I'm very thankful for the work that went into this. I will turn it over to -- would you like to begin? Ms. Stevenson. Thank you very much. Lisa Stevenson from the Office of General Counsel and Mr. Baker. >> At the request of the chair, the Office of General Counsel and the office of the staff director prepared a memorandum summarizing the agency's past efforts to engage the public and stakeholders on ideas for future potential initiatives to improve four efforts. That memo is before you as 15-23A. The office of general coup's portion of the memo discusses those topics both officewide and by division, recognizing that each division within the office has a different level of engagement with the public depending on the mission of that particular division. By contrast as noted in the memo the office of the staff director is moreout ward facing and given its role within the agency and has a high level of engagement with the public as Mr. \palmar\Palmer will discuss. Also before you is agenda document 15-23B which was prepared at the request of Commissioner Goodman. Summarizes the commission's history of placing enforcement materials on the public record. We'd be happy to answer any questions you might have about any of our past efforts or ideas for future initiative. I hand it over to Mr. Palmer to address this. >> Thank you. >> Thank you, madam chair. Good morning commissioners. Per the request of the chair my staff has prepared a document that is before you now and highlights the divisions by divisions a list of current projects and activities that we have under contain. I'm pleased to report that the staff has had tremendous success and positiv feedback in our current outreach efforts summarized in the document that was provided to your office, madam chair, and to your leagues. In addition to our current success we have also listed additional outreach initiatives and scenarios. Several of these ideas will flow naturally from the current infrastructure we are taking in the website redesign project of which we are grateful for the position of chair and Commissioner Goodman as our executive sponsors. If the commission as a body decides that we further investigate the feasibility of the outreach efforts summarized in this document we will be happy to provide an overview of the effort and cost and seek approval from the appropriate commission committees. If the commission desires to dive deeper into any of our accomplishments or plans today, I can address those or have members of my staff answer those questions. Thank you. >> Thank you very much, Mr. Palmer. Commissioners, are there any questions for the Office of General Counsel or the offices of staff director? Comments? No questions. No comments. I do have one question for the Office of General Counsel, and this is within the policy realm that one of the things that I noticed that was not addressed was the question of when we have AOs whether or not it would be appropriate or what the pros and cons would be of having the public be able to come and testify before the commission as well. What we have now is a very one-sided matter where only those people who are requesting something from the commission can testify and there's no balanced presentation except in writing before the commission. So I'm curious about your perspective on this. >> I would ask Mr. Noty to step up and address those. >> Thank you very much. And this is Doug Noty from the office of policy. >> Thank you Madam Chair and Ms. Stevenson. The commission's current practice of having requesters appear in person when their AOs are discussed is a fairly recent development, and I think that there are probably many ways in which now that the commission has some experience with that in which the commission might want to consider tweaking the procedures, the approach that you mentioned may be one. There may be others I think that could help the commission more fully dislib rate on advisory opinions. We could explore those and put forward some proposals. >> Commissioner Goodman. >> Let me just -- currently let's clarify what the current process is. I file a request for an advisory opinion and it goes on the public record. And then the public is provided how much time to comment on the pending advisory opinion request? >> On the request I believe it's ten days. >> Ten days. So the public does have an opportunity to comment regarding either legal or factual issues they think the commission should consider in issuing advisory opinion. >> The public has two opportunities to comment in writing, one on the request itself and then one on any drafts that the commission releases. >> Okay. So walk me down the process. If we were to allow the public to show up to the hearing where the requester is here asking the commission for some clarification of law, if political opponents show up and start throwininsults, doesn't that deter requesters from wanting to come before the commission? They're already opening up all of their internal activities to try to get the commission's guide. I'm just wondering what this could devolve into conceivably. >> I think the commission could certainly put limits on who might appear in person, on the subject matter of their testimony or whatever it should be characterized as. One idea would be to say that only those who filed written comments could appear in person and then only to discuss their written comments. I think the commission has very broad discretion to set whatever ground rules are necessary to keep the conversation productive rather than negative. >> Thank you. >> Commissioner Weintraub. >> Thank you, Madam Chair. And thank you for your efforts on this. On this particular question, we talked about this earlier, and I think what's happened over the years is even though advisory opinions are supposed to be -- are designed only to address a specific transaction by a particular requester, often people will ask the kind of questions that are going to have wide ranging impact on how the law is interpreted. And obviously everyone who is similarly situated also can benefit from that advice that we give. So I think that it is beneficial for us to get advice from a wide range of people. I think Mr. Noty's suggestion that we might want to craft a policy that would require people to file a written comment so we'd have some sense of where they were on the issue, but the requester is not the only person who has an interest at stake in the development of the law and I don't know why you would jump to assume that any other commenter would come in to insulate the requester. That's probably -- I've seen a lot of stuff go on at the commission over the years. Usually people don't insult each other. I think we could frame it in a way to enhance our ability to come to the most well-educated decisions. >> Commissioner Goodman. >> I don't know that that -- I just know we've seen a decline in the willingness of people to come before this commission and request and I just don't want to deter people from opening up all of their internal political affairs on the one hand. They're already subject to review and then having to contend with perhaps, you know, a peanut gallery of critics. I think we have to consider those issues. And we want to encourage people to come to the commission and request advice. There already are deterrence to doing so. I don't want to deter more people from coming to the commission. I'm willing to consider a procedure that allows that. I just note there is a procedure for the broader public twice to submit comments on the broader implications. >> Yeah, let me just make one comment about that that I think is sometime problematic, and not that I haven't participated in this myself but although there's ten days to comment on requests for opinions, often the drafts are actually late submitted documents, very often. So it makes it more difficult for those people who want to weigh in and who have something valid to say. I take your point about people who might, you know, say things that are inappropriate and perhaps there's a way that we can deal with that, I think that's a very valid point, but I also think that as Commissioner Weintraub said, lately these issues have become like de facto regulations. So given the significance of the AAOs and the consequential import for the community, the stakeholders, it does seem more appropriate in my view to have more ability for people to weigh in. >> Madam Chair, I think your point's well taken. I think one solution to this is getting the drafts out earlier to make that public comment period more meaningful. >> Right. Absolutely. And I'm -- certainly I just raise the issue. I'm not predisposed to any idea about how best to handle it, and perhaps we could ask Mr. Noty to prepare something for consideration if that's the will of the commission. Is that -- Commissioner Weintraub. >> I think there are any number of good suggestions in these documents that our staff prepared, and I actually feel pretty confident that if we put our heads together we probably could agree on a number of initiatives that are suggested here. >> Yes. And I absolutely agree with that. I don't think we're here to take any position today. This was not intended to be on the agenda for a vote on any particular item that was suggested by the staff, although I really do have to reiterate, I think the staff spent a lot of time thinking about these issues and has produced a really excellent series of reports on what we could do. Many of them are things that I think we could do pretty quickly. One of them is to create a Twitter policy so that we can give information more quickly to the public about commission action, what action we've done. Obviously it would have to be reviewed and I think there was also a very good recommendation about a reading room so people who were not the requesters could have the ability to look at documents that we have made public, as well as an updated agency disclosure policy. I know these are issues that you, Commissioner Goodman, have also raised, and we're going to discuss. But all of these things I think would be beginning steps as well as many of the others. So I don't know how -- is there any thought about how we should proceed to bring this back? Maybe we can have some discussions together and then come back -- Commissioner Goodman. >> Do we have a committee this would fall under? It's not squarely under the regulations committee, but it seems germane to what regulations committee would do. Could we funnel it through a committee or even an ad hoc committee? >> Right. That makes -- vice chair, did you have a comment? Commissioner Hunter, do you have any views about -- >> I'm not trying to pawn the work off. >> Yeah, I know. >> Happy to add it to the agenda of our next meeting which we're -- >> Which we're having in June. Why don't we do sort of a combination, because it does fall within the press committee as well as the regs committee. So it would be good for both committees to consider the document and to distill those things that we think have merit and come back and discuss them. Is that acceptable? All right. Great. Thank you very much. I really look forward to doing that. Thank you. The next item is No. 3, notice to respondents of information sharing by the commission. This is agenda document 15-26A. Is there any discussion? Commissioner Goodman. >>Al with, thank you, Madam Chair. I've provided the commission -- it's on the public table here -- a proposal. The commission is familiar with a matter recently, not t mention any particular parties, where Office of General Counsel notified a an individual and received a pro se response. The commission proceeded to find reason to believe on knowing and willful basis and with potential criminal culpability and this commission agreed to provide that individual some notice of the ramifications of that individual's response to the commission. You know, subsequently a lawyer stepped in on behalf of a pro se respondent who we now learned responded pro se without even receiving a complaint from the commission. So I think it would behoove the commission to be fair to people in the notification letters that we send to them, and we have used similar language on an ad hoc basis in past matters. And particularly those who are not represented by counsel I think this could be useful notice to them, of their rights, responsibilities, and the risk when they file information with the FEC. I think it would heighten their sense of responsibility, and I might note that the language that is used here is virtually verbatim from language that has been approved by the commission, published in the Federal Register. But when you have lay respondents, they do not necessarily know to go look at the Federal Register to understand all the ramifications of the information that they send to us. All I'm suggesting that we do is take the language that's been approved by the commission published in the Federal Register for public notice and move that language to the notification letters that the individuals receive. I think it will heighten the attention of those who respond and impose upon them a certain sense of responsibility with which they respond to us. And while this may be obvious, the lapping here may be obvious to FEC practitioners and attorneys, it's not necessarily obvious particularly t laypeople, and we've just had such a case. So I want to hear the sense of the commission. I'm not necessarily set on moving this to a motion today, unless there seems to be consensus, or I'm happy to take more time with it if the commission would like more time. Given that this is language that's been approved by the commission, I don't think it should be, you know, terribly controversial. >> Did you want to -- >> Either way. >> Let me say what my perspective is on this. Yes, you're right in the case that we recently had with respect to knowing and willful finding. We did provide just this same notice, which I think is entirely appropriate, and if this policy that you've recommend were sort of narrowed to that circumstance, I would be more comfortable with it because my concern is that this -- given that , you know, the circumstances where that occurs at this commission is extremely small and most of the cases don't involve that, this might give rise to some concerns of potential respondents that might not be consistent with what they should actually be concerned about. And it would perhaps affect their willingness to cooperate with the commission. I personally think that we should look at this though and look at any other notices that we should include, because there's a range of other things that I believe that we should be telling people in these letters that we are perhaps not now giving to them. So I would prefer that this be deferred for us to try to discuss some language of such a policy that would be in the best interests of the public. Because I am absolutely in agreement with your motivation for bringing this forward to give those kinds of advice to people who are subject to our potential enforcement. I don't know if you have anything. Anybody else? >> Let me just respond to that. In the case I referred to, this commission gave the individual notice of a potential violation with no in the that it might be knowing willful. So then the commission finds reason to believe on a knowing and willful basis. Then the individual, having already submitted information, gets this notice informing that person that there was reasonablely finding knowing and willful. At that point this commission agreed to put this type of notification in a letter. I think it would be better as a uniform matter to provide every respondent. We never know what case might turn into a knowing and willful violation and be a potential candidate for referral. So why not just as a matter of course give each respondent at the initial notification a stage. Notice that has already been published in the Federal Register on the potential uses of the information -- they're being invited in that initial notice to give us information, and why don't we at that initial invitation to give us information alert them of the potential uses of the information that they provide us. It is a quasi Miranda right I might admit but it is already provided by the commission in the Federal Register. So I don't know what we're deterring really in terms of cooperation. It is the policy of the commission. Why not tell people what the policy of the commission is? That's all. I'm just saying just tell them what it is. >> let me just say what I think needs to happen, and at the moment I'm not prepared to go forward with this in particular, but what needs to happen is for us to look at all the other issues, all the broader issues that we also need to notify people of that we are not now doing and put them together in one notice. So I'm not saying that I've, you know, ruled out having this particular notice as well, but I think that to do this in isolation would not serve the interests of the potential respondents. Yes, commissioner Walther, thank you. >> Whenever it's possible, I would like to make a comment. >> Please, right now. >> First of all, I'd like to thank you for -- I apologize for not being there. My daughter's getting married here in Nevada tomorrow. >> We announced it, Commissioner Walther. Congratulations. >> Thanks. Well, it should be a lot of fun. A ranch in Nevada in between Lake Tahoe and Virginia City. It will be a beautiful day for a beau wedding. >> Are you going to live stream it so we can all see? Actually I'm not interested in knowing if you're going to wear the gold cowboy buckle. >> Absolutely. >> Okay. That I want a picture of. >> It's important for me to give notice. We did give that as a starter but we would after that get together and talk about how to make this in a more preliminary way. The idea of giving notice, kind of really the issue is most everything we do -- we need to consider that because if you're talking about some of these things that come before us, that's a pretty scary thing to say. The language that we use fell through but on the other hand as a practical matter any time someone gets one of our notices. So I think maybe we should consider when we do it and what we say. The way it's drafted down the back and forth was given that back is and forth all the time. We have had som discussions and how much --et take a look at what we were talking about and have what works and what doesn't. None of this has been a stumbling block here. Information comes over perhaps, has been coming since the complaint has been received. For a long time give notice -- put this out together like you said I think it would very vulnerable case of information for everybody coming before us. >> Thank you, Commissioner Walther. Any other comment? Commissioner Weintraub. >> Thank you, Madam Chair. I appreciate the efforts of Commissioner Goodman. Nobody wants to sandbag anyone. Nobody wants to have someone particularly pro se respondent, an u sophisticated person to be taken by surprise by the ramifications of their interactions with the commission, but I don't also want to unduly scare people. And maybe as we consider this going forward we can consider getting some information about how other civil enforcement agencies handle this. I'm not aware of any -- all civil enforcement agencies could potentially be sharing information with other enforcement agencies. I'm not aware of other civil enforcement agencies routinely Mirandizeing people who deal with them, say oh, by the way, before you tell us a thing, let us warn you at the outset that even if this is a really minor violation it could somehow tissue into a criminal violation and we might hand it over to the justice system. I think we might scare people unnecessarily. I think there's a risk of deterring cooperation. We have an unusual structure here where outside of the administrative fines context we can't actually impose fines. We have to negotiate conciliation agreements with people and get them to agree with us. Ultimately we could sue them if we don't. Very few cases that end up in court, just as very few cases that really have criminal ramifications. I think we usually do know at the front end whether the case has criminal ramifications or not. So I think there is some potential there of impeding our entire enforcement process, including a lot of fairly routine matters that are -- that might, you know, not be controversial even on the commission, we would be deterring at the front end people from cooperating with us to try and resolve matter in a mutually beneficial manner. So I think there is probably something like this, perhaps a narrower type of advisement that might go out in the context of, as Commissioner Walther suggested, and the chairs, some other information that might be useful for respondents to have. I'm perfectly prepared to work with you on trying to find the right language and strike the right balance on that. >> Commissioner Goodman. >> thank you. And I know that Commissioner Walther and I have had many discussions over the last year over the new facts, new law issues and when notice is proper. So I look forward to continuing the work, okay? This has been an important issue for me since I've gotten here and I know that you're sincere about working on it. So let's continue to work on it. But let me just note, I don't know that giving people honest information about their legal rights and responsibilities is something that we should be concerned scares them. I just don't think that we scare people by telling them the truth about their legal rights and risk in dealing with us. Now, the Securities and Exchange Commission has regular dealings and cross fertilization with the Department of Justice, but by and large the people the subject of SEC investigations are sophisticated players, they're brokers, dealers, large companies, and virtually all of them have attorneys who understand the criminal liabilities that attach or potential legal liabilities that attach to SEC violations. So here we deal with a lot of grass roots political activity and everyday citizens who aren't always as sophisticated as the subjects of the SEC investigations. Given the risk of alerting our scaring versus informing, I would error on the side of giving people accurate information about what is already in the Federal Register about their rights and risks. But let's work on this and see if we can incorporate this into a broader policy regarding also giving notice to people of new facts and law that spring up in cases before us. >> And other matters I think that we should work with the Office of General Counsel to determine what those are. So thank you. Thank you very much for putting this on the agenda, Commissioner Goodman. The next item is No. 4, proposed statement of policy regarding the public disclosure of closed enforcement files, and this is Agenda Document No. 15-27A. And this was also placed on the agenda by Commissioner Goodman. Would you like to make your comments? >> well, thank you, Madam Chair. This issue was implicated in part by one of the recommendations in the memo that we received from Office of General Counsel. And it involves the -- it implicates both the FOYA policies of the commission as well as the commission's transparency at the close of a file. What this policy does is it proposes that at the close of a file -- the current policy of the commission is to automatically -- the presummive disclosure is when the files are released complaint and/or internal referral, responses by the respondents, all Office of General Counsel reports that recommend an action, reason to believe notifications t respondents, Office of General Counsel probable cause briefs as well a respondent's probable cause to believe briefs. The responses we receive from respondents for reason to believe, commissioner's statements of reasons, although we've had an issue about the rights of commissioners to attach certain things to those. Con crilings agreements, payment records of fines, commission vote certifications. The presumption is with the right of redaction if there is something sensitive or that would violate privacy rights or the act or in some cases privilege, we have the right to make redactions. But the presumption is we put those on the public file. It makes the agency transparent in what it did, holds the agency accountable for what it did so people can judge what we did, and it -- we also then in 2007 we added to the list that automatically goes publi approved F LAs. At that time the commission took off the list the first general counsel reports but in 2009 we put those back on. What this proposal does is it would put the presumption in favor of automatically putting on the public file these categories of documents, which really are supplements to the other documents that we already provide to the public. Correspondence to the respondents that either augment or subment the complaint. This is sort of the new facts due law and the subsequent correspondence that goes to them. Correspondence from the respondents back to the commission that augment or supplement their response. Office of General Counsel memos that augment or supplement the first general counsel reports and proposed proposed factual and legal analyses that were voted on but not approved by the commission. We released the certification of those votes. All we would do is have a presumption in favor of putting those FLAs so that the public can judge precisely the vote process we went through in getting to the final conclusion that we did. Now, we've had several issues just in the past year and a half since I've been here that implicate some of these policies. So some are quite public. So we had a first general counsel's report that came to the commission in the crossroads case. And then the commission considered it. It was in the domain of the commission. At least three commissioners have issued a statement saying it was influential in reaching the decision we did. The three commissioners tried to issue that statement to he hadfy and form the public record and to explain our thought process in voting as we did. The Office of General Counsel, knowing there were not four commissioners to invoke the privilege unilaterally redacted that document. We had -- >> Not to invoke the privilege. To waive the privilege. >> It's my position that the agency needs to affirmtively invoke a privilege. The policy should be to presummittively disclose public records and should be an affirmative act of an agency to invoke the privilege rather than waive. >> No, I understand. I'm not trying to engage with you. I think what you said was the Office of General Counsel knowing there were not four votes to invoke the privilege. I think what you meant to say there weren't four votes to waive the privilege. That was their position. >> That may have been their position. My position is knowing there are not four votes to invoke, the power is delegated to the counsel to invoke the agency where they know the agency does not wish to invoke the privilege, the agency being defined as four vote of the commission. We had another one recently. There was a memo supplementing the factual basis on which the commission found reason to believe. At the time we accepted that information and it formed -- and indeed was cited in a factual and legal analysis. Commissioner Hunter moved to make that part of the record at the close of the file. And we couldn't get four votes to do that in that case. It seems that that memo supplemented the first general counsel's report and formed the substance of the commission's consideration. Indeed it's cited in the FLA. Then we had a case involving the public record crew, citizens for responsibility in ethics in Washington. And Commissioner Hunter and I issued a statement in that case where we attached an FLA that was voted on by this commission, reflected some of the decision-making process in getting to the final FLA that was approved by the commission, and the Office of General Counsel again was going to withhold and redact that attachment from two presidentially appointed commissioner's statement. Knowing that there were not four votes to invo he can a privilege over that document. At that point the position of general counsel was that perhaps the policy it changed within the commission. Because we looked at MER5190 and MER5694, Americans for job security and a statement of reasons issued by Commissioner Weintraub, Walther, and Bauerly and it had attached a failed FLA voted on in MER5993, a case called edFallon. Commissioners had issued a statement attaching either a failed FLA or one that did not succeed. MER5842 that had occurred. And the only argument that the Office of General Counsel could give us was, well, in 2009 the commission put first general agreed to expand public disclosure by putting first general counsel reports back on the record and that somehow may have changed the policy of the commission. So I don't think it did. I don't think a policy that the commission adopted to expand public disclosure somehow took away -- gave the public something with the right hand and took away a right of the commissioners to issue certain FLAs that they considered and voted on with the left hand. So all this -- now, now we have a memo on the public file from our Office of General Counsel, and that's on the table here today. And on Page 13 of that memo, it states, "the following is a none exhaustive list of the types of documents in enforcement files that are not protively disclosed under the 2003 policy but are available through a FOYA request." And on that list of documents that our agency makes available to the public if they ask for it are are letters notifying respondents of additional information known to the commission that is not in the complaint, such as news articles, and providing opportunities to clarify or amplify their response. The next bullet, letters from respondents clarifying, amplifying response in -- a response in response to agency letters referenced above. My policy says if we're going to make them available under FOYA, why don't we go ahead since they are germane and related to the complaint in response that we already make public, let's go ahead and proactively put them on the public record with right of the commission to redact privileged information. Now, down the list reports of investigation are readily available under FOYA but are not proactively put in the public record. And general counsel's reports or memoranda that do not make the specific recommendations are made available under FOYA and that's all this policy does is say let's put all of those on the public record with the documents we already do put on the public record, proactively, and reserves the right to the commission to invoke appropriate privileges or privacy right or any other thing that isn't appropriate to respond. What this really does is it changes the commission's policy from requiring people to request those documents under FOYA to putting them on the public record. >> Commissioner Weintraub. >> Thank you, Madam Chair. Let me start with some history because I think I'm the only one here who was actually here when we issued the intrum disclosure policy: It was always intended to be an intrum policy. We were swamped with other rule making priorities at the time. We had all the Shay's litigation and it just kept getting bumped. It is embarrassing after all this time we have never done that rule making and we probably ought to do that. I don't disagree with you that we should probably be putting more documents on the public record. I didn't come here today prepared with case files from old matters to rehash old battles that we disagreed on then and probably will continue to disagree on. But I think there is certainly ground for agreement on expanding the range of documents that we provide to the public. Frankly at the time that the interim policy was adopted we had fairly recently got a court opinion saying we were overdisclosing and assuming that we were going to be doing a rule making that would address it more fully we took a fairly conservative approach at that point as to what documents we would put on the public record because we didn't want to offend the principles that the court had laid down for us. We were probably overconservative at that time. As I said it was labeled interim. It was never meant to be the permanent policy of the agency. And I do think that this is an area that really would benefit from public comment because, again, you raised earlier the prospect of people coming to us who are in the political sphere and laying their documents and their information before us and I think we have to at least get some input from those people as well as from people who hav interest in make the public record full and accurate exactly where the lines are drawn. I think we could probably agree on probably not everything that you want but certainly I think there are any number of categories of documents that there's grounds for agreement on expanding it, but I think it ought to be done through a process that includes the public that includes the folks whose documents are going to be late on the public record and gives them an opportunity to lay in on it. If you want to do that rule making, I've got some rule making that I want to do too, commissioner, so maybe we could trade. I'll agree to do the rule mak ing that you're interested in if you'll agree to do the rule making that I'm interested in. Any interest in that? >> I have a lot more that I want to do. >> Let's talk. >> You give me a five for one? >> Would you give you a 5 for 1? You get 5, I get 1? No, I don't think so. I don't think anybody would agree to that deal. But I do think that you've raised a good issue and it's a good prompt to us that we really should return to this project that has been on the back burner for too long. And try and come up with a more expansive disclosure policy. I think that goal, I'm in agreement with you. >> I'd like to agree with Commissioner Weintraub. I am sort of the newby here but it occurs to me from looking at our rules we have rules on the books that are 35 years out of date. To actually look at regulations would be extremely appropriate. I think you talked about the time that it took from the interim policy, and that interim policy which I believe was in 2003 in that statement of policy the commission committed to doing a rule making on this subject in 2004. And it has yet to happen. And that is something that I absolutely agree with you, Commissioner Goodman. I think it should be our top priority. This should be a rule making, and Commissioner Hunter and I are meeting in June on the regulations committee and I think that this is one item that should be added to that agenda. Commissioner Hunter. >> Thank you, Madam Chair. I agree with everything Commissioner Goodman stated and I appreciate his putting this on the agenda. I will note that his policy does mention the court case that Commissioner Weintraub cited and says that the principles articulated in this Court of Appeals decision that that would -- that that information would also be redacted. So he's covered that issue in his memo. We have talked about this issue numerous times in the regs committee meetings throughout the year, but I think part of the problem with this issue is it's somehow viewed as something that the Republican commissioners want to do and that's been going on for -- I'm not saying you say that. Over the years that's been sort of in the category of on the side of the Republican rule making. I don't believe it should be. Yes, there are som rulemakings more ideologically suited and we argue over trading and that's fine but I do think this one should be vowed and as really a nonpartisan issue where no one has to trade anything for this. If it sort of deinvolves into that then I sposh adopting this through the policy because we've waited long enough to do something on this. This is just adding to the public record and no one wants to do anything that reveals privileges or is inconsistent with the court decision on protecting associational rights of parties and other organizations. That's something that we've been very staunch in supporting that freedom of association and not revealing too much that would trample on people's rights: I'm happy to talk about it but I think this shouldn't be horse traded with some crazy rule making. >> Commissioner Weintraub. >> Could I just clarify. I don't think of this as a Republican or a democratic issue. I don't think most of these issues are Republican or democratic issues, but individual commissioners have particular issues that they are particularly interested in. That's all I meant was that, you know, you're particularly interested in this, I'm happy to work with you on this. >> Commissioner goodman. >> I don't think this has to be a Republican or Democratic. This is already agency policy according to the memo released to release them under FOYA. This is already agency policy to release these documents -- >> Well, not everything on your list. >> You're right, except withdrawn first general counsel's reports. Any other subject? Because all of the others I believe are encompassed in the memo that we received from the Office of General Counsel with the exception perhaps of withdrawn general counsel reports. I view this as much as an institutional issue than a Republican or Democratic issue. I believe in good faith most of these subjects since they're already released under FOYA are not going to be problematic. One of the important institutional issues is there should be a presumption of transparency and release of documents, and it should require four votes of the commission to assert privileges. So one reason this is an important institutional issue, I mean, even President Obama in a January 21, 2009 memorandum to all agency heads said all agencies should adopt a presumption in favor of disclosure. This presumption in favor of disclosure also means that agencies should take affirmative steps to make information public. They should not wait for specific requests from the public. All I'm saying is let's move these categories from a FOYA system where people have to fight through the FOYA beurre rack rasey to get the documents. Let's go ahead and make them public proactively with the right of redaction and the right of redaction resides in the agency head which is the commission. Now, there is case law in the district of Columbia that allows subordinate officers of an agency to invoke privilege. But no officer of the commission should be invoking privilege and redacting documents where they know the agency head doesn't -- four votes of the agency head does not support invocation of a privilege. So this is as much about sphootion \{^le}\{^al} authority as it is for any Republican or Democratic issue and shouldn't devolve into that. >> Commissioner Walther. >> Makes a great point about Democratic and Republican. I have concerns, things are automatically -- some concern to say that with a hundred%. Even the letter to the respondents saying, okay, then you get communications between counsel and -- for example, automatically they go on. I think any notice of them -- my concern about that also deliberative process that goes on, all the drafts, they just ended up our our table have to go public. Goes on to protect the first amendment. Discovery documents that didn't come out in the deposition which were very, very broad. Automatically -- to discourage us. Agency affected by this. >> Commissioner Goodman. >> Commissioner Walther, just for the record, the policy I proposed does not propose putting deposition transcripts and subpoena responses automatically on public record. >> I recognize that, but that's a concern after hearing this and the whole thing mention -- never -- attach gets discussed. >> Okay. Did you want to add something, Commissioner Weintraub? >> Thank you. I just wanted to say that I think there's a lot of room for agreement. I think we should work on this. And we're not going to agree on everything. We never agree on everything. But let's not let the disagreements stop us from trying to move forward on the things that we can agree on. I think that it makes a lot of sense to put it in the jurisdiction of the regs committee but I'm also happy to talk to you offline, commissioner, and see if there are areas that the two of us can agree on. I actually tried to stop by your office several times this week. I had excruciatingly bad timing. It seemed every time I had time to come to your office your door was closed. And I know that you were around a lot. I just kept missing you. I apologize for that but I will continue to be interested in working with you on this, because I really do think there's a lot that we can agree on here. >> Madam Chair, for both the last matter and this matter, if we could perhaps tenttively schedule them for the next open meeting just to keep the issue alive, I'm not going to make any motion on these today. I think we've had constructive discussion.Et see if we can work on these policies and I know Commissioner Walther will be back from wedding bliss. It must be nice seeing your daughter off to her marriage. And we'll work on this over the next month. >> Okay. We will attempt to put it on although we may not be able to have the regs committee meeting to discuss it until right after that open meeting. So certainly if it's worthwhile for discussing again in the open meeting we certainly will have it placed on the agenda. Thank you. The next item -- we're skipping Item No. 5, is proposed directive 74 on the timely resolution of enforcement matters Agenda Document No. 15-25A. It's a memorandum from commissioner Weintraub and also Agenda Document No. 15-25B. >> Are we going to skip over that item all together today? >> No. We're coming back to it. It's just next in order. Commissioner Weintraub. >> Thank you. This is the day for various commissioners to be lobbying some longstanding issues that they've been wanting for us to be lobbying into the agenda to see if we can actually move forward on it. I think that the issue of timely resolution of enforcement matters is really important. I think we really do a disservice to everyone involved in the process, the complainant, the respondent, the public when we sit on cases so long that they are really stale by the time they get on the public record and nobody can remember the facts and where two election cycles passed, the one where the events happened. I find the dead Lines are really helpful. I think we all find deadlines to be really helpful. I was talking to the vice chairman about this yesterday and we were noting how the day before a meeting where we're supposed to discuss something all of sudden there's a whole lot of activity because people feel that sense of deadline. The staff have deadlines on how long they can take to prepare their analysis of the complaints and the other matters that they want to make they need to make recommendations to us on. And actually for most complaints that come in the door, once the complaint comes in the door and the response comes in the door and it get -- and it hits an attorney's desk, they have typically 90 days to get us an analysis of that complaint and response and make a recommendation to us. Then it lands on our desk. That deadline was one that the commission added a number of years ago because we thought it would be useful to the staff, and it has been. Every quarter they need to report to us on how they're doing on meeting their targets. We just recently got a report in the last few days and they're actually doing a darn good job of meeting their targets, of getting the reports to us on a tamely basis. And then it's our turn. And we need to make decisions and sometimes that involves going back to the same exercise that the staff go through. We give them 90 days to do it in most instances. I don't see why 90 days isn't enough for us. If we had these kinds of dead lips it would help us with the matters that languish here. As I said when when a complainant files a complaint they want to know what happened to it. What's the resolution. It' unfair to respondents to have these things hanging over their heads. Committees want to terminate, they can't do that because there's still some matter hanging over their head we haven't resolved: I had suggested a couple of years ago policy limiting the number of holes that commissioners could have and there was a lot of resistance to that so I pulled back from that. Try to impose a little bit of discipline on the process, on us so we could make a commitment. It's not very complicated. If would involve -- if there are objections it would hit an agenda within three months and then we would have to have a substantive vote on the recommendation within three months of that. Commissioners would get six months to make up their mind. I'll just throw in another historical note. Back when I started, most ballots were circulated on a 72-hour tally. And commissioners would get those documents and immediately start working on it and edits would be circulated within days, sometimes within hours. Former commissioner mason was famous in the building for the which he could analyze any set of documents and get feedback back to the staff and his colleagues on what it would take to resolve the matter from his perspective. We don't do 72-hour tallies anymore. 2008 we expanded that so commissioners would have more time to consider matters, but what has happened proceedly is that, whereas before a lot of matters just passed on tally, were resolved pretty quickly, now pretty much everything he understands up on the agenda. Everything gets objected to. Some matters get held repeatedly on the agenda and languish. As I said, it's not good for the public. It's not good for -- it creates confusion amongst the political class because they know something happened often and they know that a complaint was filed and then they don't know what happened to the complaint. So it creates confusion amongst the people who are trying to abide by the laws to where the rules are because they don't know whether -- what somebody else did comply with the law or not because we haven't come out with a decision. So I really think it would be better for all of us and better for, as I said, everyone who deals with us if we try to impose some discipline on ourselves. I'm not wedded to any particular approach to this but we have to take some action. This doesn't address how we vote. It just is an attempt to make sure we vote on a timely basis and make decisions, whatever they are, whatever those decisions are, just let's get the work done. So that's my pitch. >> are there any comments? Vice chair Peterson. >> Thank you, Madam Chair. I've had a chance to talk to my colleague Commissioner Weintraub a few times about this and and I certainly appreciate what's motivating her to present this before the commission. I think that today's turning out to be I think a helpful day for us to tee up some of these issues where I think we can now maybe revive discussions and debates that maybe have been dormant for a while and maybe we can move forward on some of them. I share, and I think everyone here too shares the same sentiment that it's important for us to move matters through efficiently, to resolve things as quickly as we can while also having the necessary time to analyze the underlying issues. Some of them can be rather complex and novel and don't yield to easy decisions, but I certainly agree that I think that we all need to be committed to move matter through as quickly as possible. In terms of the proposal here, I'm still kind of chewing on it to determine whether or not would the time frames be adequate in this case, would there need to be some more discretion built in at certain -- when certain circumstances arise. I mean, some of the things that come to mind are occasionally a number of MERS involving different respondents might have a common issue that might lead to easier resolution if we bunch those all together. I remember when we first got here -- well, I should say when Kara, Commissioner Hunter and I and commissioner McGann, in 2008 after the six month dark period here at the agency when we were -- had stacks and stacks of enforcement matters that we had to handle that we took kind of an issue based approach. We would take reattribution and redesignation cases and political committee cases and so forth. So that's one issue I'm wondering about, do we need to build some discretion in to allow us to still be able to group common issues. Sometimes a respondent is the subject of multiple -- maybe multiple complaints or enforcement actions and occasionally there's also some wisdom in handling groups of matters that involve the same respondent as well. And also occasionally we have to -- there are matters that -- one of the realities being at the commission is we are constantly being sued for either being too aggressive or not aggressive enough. Occasionally litigation that i on-going could potentially have a significant impact on our decision making with respect to enforcement matters and occasionally there may be wisdom in waiting for a case to be resolved before moving forward. Under what circumstances we would want to invoke that, I think we need to think about that, but that's something that's coming to mind. Also you had mentioned the internal deadlines we have for our Office of General Counsel, would we want to actually formalize those. If we were going to go forward with a directive would we want to formalize those as part of the directive as well to make sure if we're jumping off a cliff we'd all be going together. Those are some of the questions I just have in mind initially. But I certainly want to continue our discussions to see -- because I think that what your animating principle here is a sound one and is one that I need to, you know, reinforce in my own decision making so we can get more of these matters through in a much more timely and efficient manner. So I look forward to continuing this discussion and to see where it may lead. >> Commissioner Weintraub. >> I appreciate your feedback. I appreciate discussions we've had so far on this. And I hope we can come to some resolution on this. If this doesn't seem right, I'm -- make me an offer. I'm willing to entertain an offer of what you think would make more sense, but, again, because I believe in deadlines, I'm going to ask the chair to put this on the agenda next meeting. So maybe we can give ourselves that month to try and work something out. >> Commissioner Goodman. >> Listen, having recently sat on the other side of this agency and representing people who want to go out of business and terminating and they feel like they were unfairly tagged with a complaint that didn't mention them -- or excuse me, did not target them but they were mentioned and they end up getting notice and they can't go out of business and they continue to incur administrative expense of just existing because they have to continue to file report, continue to keep a treasurer on retainer. All they're waiting is for two to three years for the agency to tell them, oh, you really didn't do anything wrong even though your name showed up in a complaint. Believe me, I appreciate the sentiment and I think this commission can do better and should in moving respondents out the door. And I think in the same way that our Office of General Counsel has an office that screens complaints at the front end to even activate some versus frivolous ones, this commission could on one level -- and I think we do this somewhat informally -- find the lower hanging fruit, the ones that don't seem ver controversial. Those are easier to move through quickly. I think we do a good service to those people to try to move them through quickly without a policy I think it's usually been policy of the chair trying to fill up agendas with those things we can move through quickly. We make a lot of edits coming down the pike. We had a meeting this week to move a number of matters through like that. This policy raises a lot of of institutional issues about the authority of commissioners to take more time, exercise discretion. Some of that discretion is already in other directives, or there are already policies in other directives that this directive doesn't speak to. For example, directive 17 says that when a tally vote comes up sensitive matters and maybe Mr. Baker and Mr. pat tellis andkelmy what the definition of a sensitive is, but when there's an objective to a sensitive matter it's already supposed to be placed on the next executive session agenda and we may observe that in the breach than in operation. I'm not certain what was intended because that's a fairly old directive. The other directive this implicate and may abrogate is the right under Robert's rules to make a motion at the table under directive ten and under Robert's rules. For example, this says all edits have to be at the commission within 24 hours of the meeting. What that appears to abrogate is the right to edit at the table and to propose et diets at the table to an FLA. Robert's rules gives you the rights to propose \amenities\amendments when a matter is made. We need to be consider that. I think these should be worked out. I agree with the sentiment, I agree with the policy objective. I think it's going to take a lot of work and also to preserve some commissioner discretion along the lines vice chair mentioned. Under a lockstep process by which matters are automatically brought to the table and moved through quickly there needs to be some discretion of the commission to hold matters. This is covered in No. 4, hold a matter in abeyance. I assume that means hold a matter in abeyance for any reason. But it would require four votes of the commission to hold a matter in abeyance, but some of the circumstances commissioner Peterson mentioned I think pertain. I don't know going litigation in matters that involve a group that's in litigation where our treatment of another matter would affect the litigation. We've seen those types of issues come up. Like kind issues or other matters involving the same respondent where it would make sense to hold a matter up here at a time while other matters make their way through the process and comeupstairs. That would be another reason to have some discretion to delay the consideration of a matter. And then one that having sat on the other side of the fence, people are particularly sensitive to is either the reality of perception of election of intervention of the commission taking action on the eave of an election that in some way could embarrass or affect or distract or drain resources of a respondent in sent to November when it may have sat in Office of General Counsel a year and a half from the last election and all of a sudden it comes up here and under this straight jacket automated policy of time it has to go out the door in a way that could embarrass the candidate and this agency's perceived as intervening an election in a way that could embarrass politicians where we could easily push it off to November or December of that year. I understand arguments about maybe we want to put on the public to hold somebody accountable before their election, but I know the Department of Justice is quite sensitive to bringing prosecutions in those circumstances. I think we should consider those issues as well. I do have also some question about an automated policy to move things at this time and whether it has any partisan effect. And I would ask the chair how we have -- how have we chose the matters just this year for our enforcement agendas in executive sessions? What's that process that we've used this year because I think we've been making pretty good progress. >> We have been making pretty good progress on a number of matters. That is no question. And the way the matters are chosen for the agenda are essentially those items that have been held over. I have attempted to place those items on the agenda consistently so that the items that are held over are noted. When they are held over again and I would say, you know, just as you're asking me for a factual statement that I would say with respect to the other items that we put on that we believe would be items where we could reach some agreement, we will definitely put those on for us to work together and attempt to negotiate those and we have been fairly successful at that. Of course we also put on the items that are close to the statute of limitations and therefore necessity Tate some action which for the public is five years. I would like to sort of add, however, that the problem I think that is being addressed by this directive, despite the fact we have had success with some of the what I would call lower hanging fruit and we've accomplished a lot of cases this year given our process, the concern is with matters that you identify as potentially more controversial or potentially more complex. While that is true, I think that there's a -- for one thing it shouldn't take five years. I don't think it takes the Department of Justice five years before they bring matters to fruition, even though they are complex, controversial, and have important issues involved. I think that the need for some kind of a policy that would address those matters is really important and I have observed that as the chair and it is somewhat disconcerting because, you know, I think we have an obligation as has been mentioned to people at the other side of the fence, we have an obligation to the public and we're forgetting we have an obligation also to the complaintnants. And I believe that while it's not a typical due process obligation, I think those people have a right to to have their complaints determined in a timely fashion. I'm concerned that our experience has been that that has not occurred. So while I get all of the issues with respect to discretion that have been raised and certainly we should be talking about those issues, it is important for us to remember what our obligations are to all of the outside groups that we are required and supposed to be filling our obligations to them. >> Let me just observe. As you all know, I am as sensitive to the due process rights of respondents and their exercise of first amendment rights as I am to complainants. I come at this more for the rights of respondents to get through the process quickly and efficiently and clear the air or get on with accountability if that's the case. We do have a class of complainants that tends to target conservative Republican groups more. I just looked at the enforcement agendas would he have had this year and out of two respondents were corporate neutral, you know, nonpartisan affiliated. But out of 46 others that can come before us on agendas, 37 are Republican or conservative groups and nine have been Democratic or liberal groups supporting democrats. That's an 80% respondent rate for Republicans and conservatives and 20% for Democrats and liberal groups. Then I look at the queue, including matters that have been held on this agenda, some with good reasons. There are right now pending before the commission 73 matters that have come from the Office of General Counsel and a right for commission consideration. Forty-nine are Republican respondents. Sixteen are Democratic respondents. Eight are corporate or somewhat nonparty affiliated. If you take down the breakdown of the partisan in the enforcement before the commission the breakdown is 75% Republican or conservative groups and 25 Democratic. This isn't to blame any commissioner. We take the complaints wase find them, but there would be an impact of starting to open the gates and start moving them through an automated process that removes any discretion of commissioners to take like-kind groups and we've had multiple groups targeted by multiple complaints by a class of complainants. I think we ought to consider that as we consider any policy that moves matters through for disparate impact. >> Commissioner Weintraub. >> I have to say it would never occur to me to go through our docket and do that kind of analysis. I don't think about our cases that way. We have no control who files the complaint and who are the respondents in those complaints. I think we have an obligation to move all the cases. I don't see how you can make a disparity impact argument if what the goal is to move all the cases. When I was chair I scheduled every single matter before the end of the year and really would have like to have addressed everything on the docket that year. It wasn't possible but I continue to look for ways to just get through the docket. Are we going to -- I don't know what you're suggesting. Are we going to ignore some of the complaints so we get a 50/50 ratio of who the respondents are? We have to deal with what's in front of us. >> We have been discussing quotas here recently. No, my point is that -- and speaking for my two Republican colleagues and I, we have held a handful of matters on the current docket for such issues as taking common respondent up together or taking common issues up that involve Democratic and Republican groups at the same time. And that has been the juchtion for holding some matters so we can consider them holistically. That's why I say I'm open to finding -- by the way, one way to move matters more quickly is just to move matter more quickly, for us to commit to each other that we will start addressing more matters more quickly. That's one way to do it. >> That's what I'm trying to do. >> I know. I'm just saying this automated policy removes that discretion in a way that does have certain partisan effects. It's not the commission's fault these came in the door this way but there is a class of complainants that does use the agency's processes more agreesively than others. And that's one reason why some discretion has been exercised by this side of the table to take up the same respondents or to hold matters because of pending litigation involving those respondents. I'm just telling you that the discretion is important and has a partisan impact. >> I'm speechless. >> Commissioner Walther. >> About politics. Everything through that belongs to a party. Concerned about that because of the language before. Is approved of effect. Something in our control and willing to discuss it. My discussion would be any time you put a matter over because the reason is because there's a concern politics on the one end, hear it now I think we should hear it in a matter of hours. We've been sitting and talking how we're doing it. Hold offers in the last I would say year and a half on matters. What our reasons for holding something would be helpful to us. >> Commissioner Hunter. >> Thank you. Since we're talking a little bit about what's gone in the past, you know, I didn't prepare this for today so you'll have to help me with the exact details but my recollection is when you were chair, Commissioner Weintraub, you did not calendar the crossroads matter. Wrote about this in one of our statements. >> I did. We did everything by the end of the year. >> So you didn't calendar it for months and again, I don't have the exact -- I believe it was six monthsish that you refused to calendar it on the agenda even though all three Republican commissioners at the time repeatedly requested that be put on the agenda because we didn't think it was fair for the respondent to have this hanging over their head for years and years and you refused to calendar it because I think you even said this publicly you were waiting for Don McGann to leave with hopesly would vote with you. >> I'm pretty sure I never said that publically. I'm not sure that I ever said that at all. >> I think you did but I can go back and double-check. I'm pretty sure you did. You said there were commissioners in the queue. You never said you wanted to get rid of Don but there were commissioners in the queue and why don't we just wait until new commissioners are coming I'm quite sure. So crossroads was one that we tried for months and months to getcal deared. >> Then why didn't you vote on it when I put it on the calendar? >> That was the very end of the year and my recollection is Commissioner Goodman had just arrived. So he -- my recollection is there was a big file entered a a little bit of time to look over it and we did calendar it early in the next year and voted it out. By the time you scheduled it Don was gone, which is what I think you want, and Commissioner Goodman was brand-new. I can't remember if he held it or somebody else did but I think there was the sense we had new commissioners and they needed some time to review it. Also thetic san tore rum case that took some time to calendared in order to close that file because I think people were thinking maybe people wil change to get a vote. There are some cases that -- I'm not sure how your policy would have affected your actions in those cases. >> Commissioner Weintraub. >> I really regret -- I tried to present this in the most neutral way that could. I didn't point any fingers at anybody. I didn't say who was holding up which matters. >> Nor did I. I wasn't pointing fingers. >> I appreciate that Commissioner Goodman but I really regret that my leagues have chosen to make this neutral issue into partisan. When I was vice chair and you were chair Commissioner Hunter, I don't recall you taking any suggestions from me on when to calendar items, never. I showed a lot more consideration to my vice chairman. There were a N matters he wanted to move on to the agenda and I put them on there but in any event I made a commitment to all of you at the beginning of the year that I was going to calendar everything and try and get through the entire docket by the end of the year. I did that and I tried to do that but commissioners held it up. As soon as Commissioner Goodman walked in the door I started to work with his office. I said look, we've got some cases here. Work with mee. tell me when you're going to be ready to. And Commissioner Goodman you know this is true. My staff worked very closely with yours to try and find the maximum number of things we could get resolved that year. I said which cases are you ready for. I said I have to put them all on the calendar this year because I made that commitment. Tell me which ones you're ready for. I'll put them on as soon as you're ready for them. There are -- I would think if you have a sense of grievance that you're still carrying this two years later that you didn't get to tell me when to put things on the agenda even though you didn't take any suggestions when you were the chair. I would think you would be enthusiastic about a policy that takes away that discretion and says, okay, once it hits the chair's desk, she has to put it on agenda within three months. Nobody gets to monkey around with anything. We've got a couple of cases sitting around for two years. We've got cases sitting for almost three years and we just received a request to hold them because a new case just came in the door and therefore this is grounds for delaying it still further. Since we don't have a policy, I guess we're going to do that but really these cases should have been resolved two years ago. They don't present any of those issues that you were suggesting. We're not waiting for litigation. They're not tied to something else except as I said some brand-new case that just came in the door. I'm just trying to come up with a neutral policy that nobody can monkey around with. We'll all agree we're going to move the cases. One way or another we're going to move the cases. Not just going to do the low hanging fruit. It's always easier to deal with, but even on the more difficult cases we're going to make a commitment to move those cases on a timely fashion. If you think six months is not enough time, tell me what you think is enough. Because there's got to be some period of time within which we can agree that, you know, yes, we're ready to make a decision. Barring some extraordinary factor. Like anything else around here, four votes can waive anything, right? If there's some litigation pending or some other solid reason why we should wait, sometimes the Justice Department asks us to hold something in abaips because they don't want us to mess up a criminal case with overlapping individuals or entities or facts and we generally do that. There are always extenuating circumstances. I would argue that some of the cases, and I wasn't going to bring this up, but I would argue some of the cases that are currently on the docket don't have those extenuating circumstances, but what we need is to force ourselves to make a decision. Because if we have endless time to make a decision, I can understand why anybody might say, yeah, I just want a little more time to think about this. But we got to pull the trigger at some point. >> Commissioner Goodman. >> I credit your point. We need to move faster. We do. I was making not a point about any individual commissioner. I was looking at objecttively the docket and what impact it has when you remove all discretion. I think we can work on a policy. I do. I'm willing to work with you on a policy. I share your concern that respondents need to get out of the door more quickly. I think our Office of General Counsel can do a little better work to get things up here faster and then the commission needs to act more quickly and I think it will do good service to the public record, do good dfer to respondents overall. However, the policy have straight jackets the commission and limits the discretion of commissioners to to such a degree that I think those are the issues we probably need to discuss: For example, what are the circumstances under which an abeyance would be appropriate. I think we could work that out. How many commissioners does it take to invoke that abeyance, three or four. Because that's an important issue as you know. So I think that whether we do it and work faster I think you've running a bell. Can't be unrung. I think we all agree we can do better. I'm happy to discuss waw policy. I think Vice Chair Peterson is interested in a policy. Whether we do it by policy or preserving some discretion or whether we just get get busier, one way or the other I think we can move through this docket, understanding there are going to be some holds for important reasons. >> Commissioner Weintraub. >> I just want to say something about your comment about the staff. As I said, they hit pretty much all of their targets in the last quarter in the most recent report and I think as I said it was beneficial to them, the reason they hit the targets is because we gave them targets. We told them we expected these reports within a certain period of time and that's when they produced them. That's why I think those kinds of targets are valuable but I will say that I also think if we want the staff to move more efficiently we need to lead by example from the top. It is extremely demoral \lies\{^lize}ing to the staff. There's probably nobody amongst our enforcement attorneys right now that doesn't have some case sitting up here. I think many have had several cases sitting up here for months. It is very demoralizing to the staff to put in all the good work to try and meet our deadlines for them and then they send it up here and we sit on it for months and months. And they've forgotten the details. At any moment it can end up on an agenda and they're going to have to relearn to answer any question asked when it comes to the table. I think this is hard to persuade the staff that we care about efficient processing of cases when we are not efficient. I think that is part of my motivation is we need to show a good example to everyone in the building of how we think the work ought to get done. >> Vice Chair Peterson. >> Thank you. I just want to I guess circle back around to what Inishly said. Commissioner Weintraub and I both had a queery on the hill before we came up here. We both recall when was the greatest flurry of activity, right before you had to go on a recess. Those imposed discipline on the process. I appreciate the the goal we're shooting for. I think what I'm hearing is it sounds like there's a strong sense we need to figure out a better way to conduct our process to ensure that we are processing cases, we're voting them out and handling them in as expeditious form as possible. When discussing -- when raising some of the questions I said earlier about how do we build in discretion, you know, my goal is -- and I think everyone's goal here is how can we kind of accommodate the legitimate interests of the commission in order to I think exercise discretion in proper cases while also advancing the goal of maintaining better discipline in terms of getting our -- getting matters disposed of. So like I said at the outset, I think that this has been an important issue to raise and I think that as with the documents policy that we were talking about, the disclosure, this doesn't need to be a Republican issue, Democratic issue, conservative, liberal, I think this is an institutional issue and I think that hopefully as we move forward we can figure out a way to make the process work better within the building and look forward to continuing our discussions that we've already started this last week. >> Commissioner Good p madam secretary, did you want to add something? Well, with that we will attempt to on this matter attempt to bring it back if there's been sufficient time to discuss it previously. The next item, we're back to No. 5, motion to open a rule making in response to comments and testimony on the Mchutch which I know versus FNCARPN. This is Agenda Document 15-24A. It is a memorandum from Commissioner Weintraub. >> Thank you, Madam Chair. I didn't think it was going to get controversial until we got to this one. I didn't realize the last one was going to get so hot. I think the reason that I put this on the agenda, and really shouldn't have taken anybody by surprise because I said it months ago, is I think we need to have some formal measure where we in some accountable way take responsibility for our decisions. We put out an advanced notice of proposed rule making. I believe it was a suggestion from the other side of the table that we do that as part of the McCutcheon CU rule making that was done last year. No, I think you suggested it Commissioner Hunter. I recall you saying let's do an ANPRN. I wanted to do an NPRM. >> We didn't want to do either but to the extent we needed the fourth vote to do a citizens united rule making chair Ravel agreed to do that but it wasn't our idea. >> Well, I -- okay. Nevertheless, that was what -- I mean, we all voted for the ANPRM. >> As a trade for getting the fourth vote for Citizens United rule making. >> Okay. Interesting. You know, at least we're acknowledging there are sometimes trades around here. Was it a five to one? The process of putting out advanced notice of rule making it secedes public comment on whether we should open a rule making. That's what it is maybe some commissioners were hoping that there wouldn't be a lot of comments or the only comments would come from the election law bar and they wouldn't have to deal with the messy public. And I'm sure all of us were surprised by some of the comments. I was surprised to get 5,000 comments saying don't regulate the Internet, because I didn't even think that was on the table at that time, but there was plainly ferve vent opinion on that. That's why when I drafted my motion I wanted to make clear I was listening to what people had to say out there. And I think that we should allay those concerns of people are concerned that we're about to do that then we should make clear that we're not. We got I think 32,000 comments. As I recall when the staff we want through they said three-quarters of the comments urged the commission to do something, take action. In particular in the area of disclosure. You know, there was an article in the paper yesterday that was really kind of stunning to me.Dan balls in the Washington post. This isn't a direct quote, paraphrase, but he talked to people in the process of raising and spending money in this election and he wrote even those who raise and spend the money for campaigns say it is too much, that it is obscene and distorting and possibly corrupting. That's what the insiders say. Without doubt it is contributing to the cynicism with which many Americans view the political process. That really kind of -- that's a really strong statement, particularly as a statement of the sentiment of people who are in the process. There's a lot we can't do. There are things we don't have jurisdiction over. We are not the Congress and we're not the supreme court, but there are things we could do to respond to respond to the comments. We asked people whether we should open a rule making and we got a lot of comments back. There were two strong messages that came back. There was a strong message we not regulate the Internet and an even stronger message in terms of number of people who bothered to comment who said do something about disclosure. We want to see a more trabs apparent system. We want to see more disclosure. We could. There are things we could do consistent with the statute currently on the books. Because we already have regulations on disclosure. Unless those were ultra vires obviously we could amend those regulations. Consistent with the statute currently on the books. We had a great hearing in February but I don't think the end of the process of seeking public comment as to whether to launch a rule making is to have a hearing. The end of the process is to make a decision on whether to hold a rule making. Now, maybe this was just a cynical exercise from the get-go. Maybe it was just -- maybe some commissioners think that they would never prepared to open a rule making. They had to pretend, they had to vote for an advanced notice of proposed rule making where they would pretend they were interested in hearing what the public had to say in order to get the vote that they wanted on something else. That's pretty cynical, but I take public comments pretty seriously. I've always found them to be illuminating in the rule making process and I think we should respond. I think the clear sentiment of those comments was we should open a rule making. Again, it's just opening a rule making. It would just open the door to further comments. If you think that the comments we got in the first round were unde representative, then I'm sure if we actually opened a formal rule making people on the other side would weigh in and tell us why we shouldn't do more to improve disclosure in the system. And I'm prepared to listen to what those commenters have to say too. But I think a lot of people are, as the article suggested, growing increasingly cynical about the way government works and to put out an advanced notice asking people for comment and then to just below all the commenters off and say I don't really care what you had to say because really we don't want to do that rule making for our own reasons and there's nothing you could say that would have changed our mind. I think that's not a good day for demcrassy. Demcrassy doesn't belong to commissioners and doesn't belong to even supreme court justices. It belongs to everyone in the democracy. It belongs to the American people and as I said, I'm happy to hear from anybody in the public who wants to provide further comment on their views. But right now I think we have a pretty strong message from the public. I think we ought to respond to that. Even if my motion is unsuccessful, at least we will have provided the public with some closure on this issue. We will have told them what we intend to do with all the information that we received. So at the close of the hearing I tried to make a motion. The consensus was that was not the appropriate time to do it. I said at that time okay but I'm going to bring this back. So it's been three months. Plenty of time for people to consider. I think that on this one at least we ought to be able to at least take a vote on this and I can't -- if anybody has some reason why they want to hold this over I guess we can put this one on the next agenda too. I think that we could at least provide some answer to all those people who commented as to what we're going to do at the end of the day with that process. So that's why I am going to make this motion. >> Commissioner Goodman. >> I apologize for embarrassing myself in front of the whole room at a public meeting but if we could take a two minute recess I might be able to concentrate a little bit. >> Should I time you? >> May we have a two minute recess? >> Yes. >> Because this is an important issue and I want to be here for it. >> We will take -- in the interest of public we will take a five minute recess. (RECESS TAKEN) >> Steve? You're still there, great. Thank you. All right. We will reconvene. Thank you Commissioner Goodman for suggesting. I had my most important coffee so I'm able to continue. >> Thank you for the courtesy. >> I appreciate it. Are there any comments from other commissioners with regard to item No. 5? Vice chair Peterson. >> Thank you Madam Chair. I guess I should start off by addressing how I approached this question about whether or not to support a rule making in the aftermath of the McCutcheon VFC case. There have been a few baseline factors I've had in mind. The first one is that what's the subject matter of the McCutcheon case. It was a contribution limits case, not a disclosure case. Furthermore, it was a case that the commission lost. The court as we know in that case struck down it's unconstitutional. The aggregate contribution limits that are in the act, those have now been newlyfide. Finally the Mccusp Ken courts did noted acate any legislative response to its decision. Rather it noted potential areas where Congress could constitutionally alter the law if it so shows. The issues that it focused on were affiliation, ear marking and joint fundraising. In terms to open a rule making those were the questions I was looking at, are did we receive information, evidence, data, what have you that would just have modifying our rules that govern those areas. As an initial matter I'm reluctant to use like the McCutcheon decision as a launching pad for expanding the commission's regulatory reach into areas that were not the subject of that particular case. As a result I have gone through and looked at the comments regarding the areas that I just mentioned, ear marking affiliation and joint fundraising which were actually addressed in the case. And I didn't see a whole lot, at least not a lot that convinced me that leads me to conclude we need to open a rule making to modify rules in these areas. Current ear marking rule is already written in quite broad terms. It's also one that if if it's willfully violated could result in a finding that one gave a contribution in the name of another which carries with it the potential for criminal sanctions. So at least to me it's far from obvious that already robust rule needs to be modified any further. The same thing with affiliation and joint fundraising. There wasn't a whole lot. Most of the comments focused on issues other than these. But those were the issues that I was focusing on as I was approaching the question of whether or not to move forward on a McCutcheon rule making. Perhaps most importantly as many commenters noted in their comments, the discussion that the court had in the McCutcheon decision regarding possible alternatives was addressed to Congress, not the commission. It is Congress I believe that is the appropriate body for making the initial determination about how or even whether to respond to the McCutcheon decision with any legislative changes. It's well-known that on this commission we've had disagreements and I know that Commissioner Weintraub I know her concerns in this area are longstanding and I know that -- and are passionately felt but we had a agreement on how to respond to past cases. Notely the Citizens United case. We voted twice in 2011 to open up a rather broad far reaching rule making that addressed -- that I think borrowed concepts, many concepts from the disclose act that was introduced back in 2010 in Congress that would have -- that was introduced in the aftermath of Citizens United. Like I said was rather -- was a far reaching disclosure bill. Some would say it would have been rather intrucive but didn't garner the support to be passed. I think to me that was very significant. I think that Congress when they fail to act and especially on an issue like that, that it doesn't then fall to the commission to step into the breach and to act in areas where they make determinations not to act. Like I said, they are -- that's -- you know, we all learned in Civics class that is where the laws are made. They're not made at the agency. When they fail to act that's not a signal to us to -- again, to step into breach. Congress' inaction is our signal to stand down until Congress decides it wants to pick up this issue and expand regulation, modify it in some way however they see fit. Just to address the issue that Commissioner Weintraub brought up about the comment, I mean, I think the people who commented, I appreciate the fact so many people felt strongly enough about this issue to comment on it and I can't claim to say that I read all 32,000 comments. I tried to read as many as I could and there's no doubt there is a lot of passion on this issue on both sides. But ultimately the commission isn't the body that is responsive to public. That is Congress. They are the ones that work accountable to the voter to modify laws as the public sees fit and so far Congress has not acted on this issue. Adder as commissioners our responsibility is to exercise our best judgment in determining what the law is, how best to implement it through rules, how to best enforce it through our MER docket. The agency -- we're not a pleb cite. We're not the distallation of the popular will. When we consider whether or not to adopt rules we take into account public discussion in order to make sure we are receiving the full range of arguments, information, evidence, data, so forth, but our role is to exercise our best judgment and to again administer, implement, and enforce the law as we see as our judgment dictates. So in this particular matter I think that on the noir row we are issues of affiliation, earmarking and joint fundraising, I just was not moved or I didn't think there was a lot of compelling information indicating we need to modify these areas. I think that if those are going to be modified they are better addressed by Congress. I think on the larger issue of disclosure, dark money, what have you, I think that Congress has spoken or not spoken up to this point but I think the failure to act is just as significant as if they had acted and I think until they address this issue I think that I -- as a commissioner I don't feel that I'm in a position to now try to do the regulation what has not yet been accomplished through legislation. So, again, I understand and appreciate and respect my colleagues' principles and commitments on this issue. We disagree on it and for that reason I won't be able to support the motion. >> Let me weigh in here because I appreciate your statements, but I see it differently as well. With respect to McCutcheon as well as Citizens United, but since McCutcheon is at issue right now, I mean, both of those decisions were premised on the protections that are guaranteed by full disclosure that is guaranteed in the law and that the supreme court acknowledged are guaranteed by the law. It is our responsibility as you mentioned to talk about regulations to implement the law that the court has enunciated just as much as Congress has and also to enforce the law that the court has enunciated as just as much as Congress has. So it seems to me that this is well within the purposes and as Commissioner Weintraub mentioned in her opening remarks as well as in her motion we received 32,000 comments actually addressing not just the specific recommendations made by the court in McCutcheon but disclosure as well being an important component of the protections that were expected by the court to be in existence but which we actually do not have in our regulations. So I think that in -- I mean, today has been disclosure day at the commission, which is a really great thing. It's a very healthy conversation that we've been having about the importance of giving information to the public and that is the essential purpose of the FEC and that was what was part of the enactment of the FEC, was to disclose information to the public so that they could make thoughtful decisions when they vote. And that information is crucial to our democracy. We understand that. The supreme court understands it. And it seems to me that it is our obligation as the regularity and the enforcer to listen to those 32,000 comments, including, you know, as Commissioner Weintraub has mentioned here, to move the commission to exclude any proposal affecting political activity on the Internet, which by the way, for the public record and for the press that's here, I never proposed any regulation of the Internet, although that seems to be continuing to be promulgated. There is no such regulation and it should not -- we can say it clearly here in this motion. So I think that this is something we ought to respond to and for that reason I will support the motion. >> Commissioner Walther. >> >> We've had some great discussions. Certainly we could do that. Very reasonable as to why we are handcuffed and stuff to take any steps in this regard. I have to say that's a very strong reason we are here to -- put the law, but I suppose in this case this open rule making, hearing, but we don't say what we're talking about. Importance to this issue I would support it with a rule that we could -- there are many people who are much smarter than we are about how we can maybe look at these things from different perspectives very sensible simply basic responsibility of Congress to act in this field but we could make some sensibleout come from the decisions that have come down. Look at the maximum steps we might be able to take transparency. I'm not sure I know what those are. This motion is open to invite the public to help the. >> Commissioner Goodman. >> Let me follow on Commissioner Walther's question. What rule are we talking about, because when I read the resolution it reads a little bit like a Pandora's box. It doesn't send us in any direction. Now, the ANPRM addressed fairly specific subject. It asked for comment regarding earmarking rules of the commission. Affiliation rules of the commission. Joint fundraising committee rules of the commission. And then it closed with a position -- a question about disclosure, about what regulatory changes or other steps should the commission take to further improve its collection and presentation of campaign finance data. Now, I don't understand the current agenda item, the current proposed resolution to address earmarking affiliation or joint fundraising, at least I can't glean that from the text of the resolution. And I don't know what direction we would be taking. As for disclosure, I say I think we have started down the road of addressing disclosure in two less controversial ways. First, the commission has had consensus and chair Ravel and I have been working together on an effort to improve our data disclosure and dissemination on our Web site. We're working hard to improve our Web site, public data to the data we do take in. Second, this commission has received a petition to address our administrative fines and update and improve our forms which have a direct disclosure implication because if you can improve our forms you improve compliance with disclosure. Some of the forms' improvements I think would make campaign finance disclosure more transparent to people looking at the report, for example. For a long time I've proposed we need to have a separate schedul, two reports for reporting the receipt of in-kinds contribution. Now it's a fairly obtuse way we require people to take an in-kind item or thing, disclose it as a receipt and also as an expenditure to wash that money out of cash on hand. And if we had a separate form listing all in-kind imrxes received it would help -- I think it's a common mistake by treasurers, they don't wash through the receipt. Also see a fictitious receipt and expenditure on reports whereas if they had an-in kind form the public would have a better idea of the in-kind items received. Those have come through a consensus process at the commission. That petition is outstanding and I'm eager to get to work on it. Procedurally the best mechanism for us to proceed in a bipartisan way on rules would be to work through the regulation's committee. And within ou grasp that finds us a way forward. I think will also may be other rules we can address in a very bipartisan way. We had a forum last year. I'd hate for that form to die like a tree in a forest that nobody heard but we heard from state and local demgrtetic groups, Republican groups that they need some regulatory relief. I'll save you my speech on state and local parties and how they are the small institutions in America today that channel the efforts of grass roots people all over America to participate in their politics and how we are hamppering them at every step of the way. That's haft speech anyway. I think that could ab bipartisan effort. The mechanism for doing that is to bring ideas like this through the regulations committee. If the objective of the resolution is to work constructtively to obtain an actual regulatory outcome. I got a resolution that didn't go through that process that doesn't address any of the specific issues in the ANPRM except it wants to stretch the issue of disclosure. We're working on two initiatives here to improve disclosure, the Web site and form's publication. The next question is Commissioner Weintraub you said we need to do something about disclosure. You said there may be some things we could do but I haven't heard what they are. I do know that many of the issues that people would like to address in a rule making are the -- have been the subject of three failed attempts to enact the disclose act in Congress. Commissioner Peterson discussed that. And I don't think it's appropriate for us to jump into the breach and regulate what Congress has decided not to legislate. Another area is political committee definitions. Perhaps the commission will want to entertain more about the criteria by which political committees are defined, but we have two cases pending in federal Kortright now addressing those issues. I don't know why we're going to jump into the breach while federal courts are defining what we define of political committees. The disclosure of donors who give to groups who make electioneering communications. I don't think it's appropriate for us to jump into the breach where a court is currently considering the metes and bounds of engineering. I guess I'm at a little bit of a loss where this fairly vague resolution takes us. I'm being asked to sort of leap before I look. With that as background, I did have one substantive question about the proposal not to regulate political activity on the Internet. Because we did hear very compelling comments, don't touch my Internet. We also heard I thought one of the most compelling presenters at our hearing was Mr. hidy Abeg who was relegated to the last panel of the day but she was important because she was the attorney who represented checks and balances, which a case that broke three-three here at the commission over you tube postings. It triggered a debate over whether we were going to touch the Internet and people's rights to post videos on YouTube for free. What she said was as an attorney who represented checks and balances was that the three-three vote in that case had confused the area of law and was chilling to groups that might want to post information on the Internet. That was followed of course by a 3-3 vote and whether the crew could post information about Christine O'Donnell on its Web site and send out e-mails to that effect. What I heard was that to some extent the public may want clarification by the commission of the breadth of their freedom on the Internet. So I guess I wanted to ask the underlying premise or assumption that we are not going to undertake any proposal to regulate political activity is the underlying assumption of this resolution that groups like checks and balances and crew can produce and disseminate political videos and press releases and post them for free on YouTube in their own Web sites without regulation by the FEC. Is that the underlying baseline assumption of this resolution. >> You just love to talk about those cases, Commissioner Goodman. I'm sorry -- >> Commissioner Weintraub. >> I should have waited to be recognized. >> That's okay. >> The underlying assumption is that what I heard a lot of people saying, don't enact any new regulations about the Internet, and so I'm trying to be very clear about that. You know, the crew case we dismissed. There was a different analysis that you wanted to use that didn't get majority support but we dismissed that case. Checks and balances, I thought their answer was vague. They said, well, yes, there were some other television advertisements. Don't worry about those advertisements. This is just about the Internet. I wanted to ask some more questions about that and make sure what we're talking about, but of course that would have required an RTB vote and investigation. And that was basis of my vote and I didn't -- I mean, you keep bringing it up so I feel like I have to say this. I really didn't want to and saying well actually I found your answer was inadequate. I thought that would be a little rude for my purposes. So, you know, I don't -- as I said, the underlying assumption of this is that we would not do what apparently people were afraid we would do which was to enact any kind of new regulation of the Internet. With respect to the rest of your comment, I think it's great that we are trying to improve our Web site and that, you know, it would be great if we could fix the forms. There's all sorts of things that we could do that are sort of beneficial and some of them are kind of small, some are really only of interest to the election bar, but that's great. We should do all that. But every time I have tried to present this issue in the regs committee I was told that any initiative to improve disclosure was dead on arrival. We weren't going to do that. We had to strip out every word about disclosure from any proposal. Now, I admit this is a little bit unusual but I'm trying to save government resources here. If I thought it would be a productive exercise I would be happy to ask Mr. Noty to put his staff to work going through all of the comments and trying to glean from them some sense of what the public is interested in and I don't think it's, you know, fixing our forms. I think they're looking at larger scale issues there. And to try and come up with some solid regulatory proposals that would reflect those concerns and that could be put before the commission. I would be happy to ask him to do this but I don't want to send him on a fool's errand and I don't want to waste government resources having staff invest thousands of hours in going through comments when the bottom line is I fear that some commissioners, no matter what, are going to vote no. And as I said at the outset, I think this ANPRM deserves a resolution and I don't think it's had one. I think this is the only way that I can think of to bring it to resolution. If I thought there was a chance that you and I could sit down together and come up with some regulatory language that would improve disclosure and address some of the concerns that have been expressed by the public about dark money and secret spending, I would be thrilled to work with you on that. I just -- I'm just trying to cut to the chase here. >> Are there other comments or questions with respect to this item? Commissioner Hunter. Commissioner Goodman. >> So just so I understand. Your concern in checks and balances was perhaps TV ads, but the presumption that we're not going to regulate political activity on the Internet assumes that dwriewps like checks and balances and crew can post information for free on the Internet without regulation. >> The assumption behind this is we're not going to enact new regulation that inhibit anybody. >> I'm trying to understood the baseline assumption of what the understanding of the current role is. You said no new regulation. >> Right. >> What's the current? Do checks and balances -- organizations like check and balances and crew enjoy the information to post stuff on Internet. >> Within the confines of the regulation that it's not paid advertising. >> As long as they're not paying the fee to do so. Organizations like checks and balances and crew may post information on the Internet for free without regulation by the commission. >> I believe that's what our current regulation says. >> Okay. Well, then since there is some confusion after the -- I'm glad we have that agreement. What I would say is perhaps we could go further in our regs rather than no new proposal to regulate we could actually adopt some clarifications for people in our regulations to clarify their freedoms on the Internet. >> I think the regulations have a lot on that already on the books. >>Al with, but people are struggling under a three-three votes. >> Some people like to talk about those votes as if everybody's freedom is about to taken away from them. There's a reason why people have that fear. It's because some people are kind of drumming it up. Sorry. >> Well, there is a statement out that the 2006 rule does not make sense. So rather than say we're not going to propose to regulate political activity on the Internet I wonder if perhaps some clarifications might be in order. In 100.155, I'll be a little bit more specific than this resolution is. After Citizens United, incorporated ebbetties were given the same rights as individuals. At the time the regulation was adopted there was some play in the joints between groups of individuals and then the commission expanded it to incorporate Internet groups in the regulation and it might help nonprofit organizations for example to know that are incorporated that they enjoy this right as well. There was some debate as I recall over production costs. We could work into the cost that producing is also protected just by way of clarification. I believe that is the law currently. Then we could add to the media exemption in 100.132 of our regulations. Satellite because we currently cover broadcasting and cable we could add satellite. We could also add -- >> Is that consistent with the statute? >> I think it would be. I think Congress said other media in the statute. Congress intended a broad exemption from the press from the New York Times to the Washington post to CBS news and then books and moving pictures are issues. Many videos are posted on the Internet. Many moving pictures, books are now electronic fashion. We could give that clarification in our regs to clarify people's rights on the Internet and finally there's the small items exemption. Many people are now getting very small messages over the Internet on their cellphones and perhaps we could add among the exemplars in the statute owned small items small electronic items as well which would cover cellphones. I'd be happy to talk to you about these further but I wanted to at least understand the baseline of the assumption that we are not going to regulate political activity on the Internet. To the extent the comments we heard and the hearing we held implemented any reel making in this area it would be to expand and clarify the freedom's people have on the Internet. >> Commissioner Weintraub. >> just to be clear we got over three times more comments on improving public disclosure than we got on the Internet. I put that in because I thought it would allay your cerps, commissioner when I said we would exclude anything affecting political. Would you vote if I said we were going to include from the rule making proposals affecting political activity on the Internet? >> What I'm saying is I plan on working this offline and I'd be happy to work with you on an Internet clarification rule. I know you take great pride in the 2006 rule and I've read comments by the chair recently she wants to protect loggers. So I think we could do more in this area and that's just my point and I wanted to know the baseline of the resolution I'm going to be asked to vote on. >> Can we include in that discussion improved disclosure, which is the rest of it, or is this another five for one deal where you get something and I get nothing? >> I'm always consistent. Still five to one. >> You know, I don't -- it's kind of remarkable to me that you're willing to say in public that you expect me to give you five for every one give that you give. I don't know how you think that adds to bipartisanship. >> I don't really think we're giving anything here. All I'm asking to do is clarify existing freedoms. That's all. >> Let me jump in for just a minute, because I thought as well looking at this motion that it was an effort to put the issue to rest. However, it's great to hear that you do want to open it up to public comment to have people talk about the issue. You have said publicly that you thought even discussing the issue of this was chilling and so -- and you thought it was -- >> Not more freedom. >> -- discussing the issue at all was chilling was what you said. Frankly, I think opening this up to as well as disclosure to the public is really what we would like to do without predisposing any particular outcome but to hear from the members of the public as to where they think we should go on these issues. I think that's a wonderful Commissioner Hunter. >> With respect to the ARNPM, I agree with Commissioner Weintraub that this is the appropriate place to talk about this issue and even though I'm on the regulations committee, I agree with you that's not the best place to go at this point, and I also agree that it would be a fool's errand to ask OGC to work on a rule making that probably wouldn't go anywhere. I do think is the right place. We did say in the ANPRM that did receive at least I think it was six votes the commission intends to review the comments it receives as it decides what revisions, if any, it will propose making to its rules. So we did put some issues out for public comment. We did receive some comments and I do think it's appropriate to make a decision on whether or not we're willing to move forward. It's really sort of beside the point at this point but Commissioner Goodman alluded to the section in here on disclosure. We were in my view when we negotiated this document we were just asking about whether or not there was anything we could do with regards to technology, and I'll read it exactly, given these developments in modern technology, what regulatory changes or other steps should the commission take to further improve its collection and presentation of campaign finance data. That to me is completely different than opening the gate to whether or not we wanted to do the disclose act. Granted we did get a lot of those kinds of comments but I just wanted to clear the air that I wouldn't have voted for an ANPRM that gave people false hope. So I wouldn't have included that because, you're right, we've had this longstanding position as Commissioner Peterson so articulately described earlier that we don't want to pass by regulation what Congress has failed to pass in legislation. Now some of the comments that we've received, yes, there were a lot of comments. A the lot of them were standly identical. 6100 of them came from supporters of the League of Women Voters and they were virtually identical. I think about 500 of them were virtually identical from members of common cause. Some of those were about the disclose act and others were about the price van haul lin stop super PAC coordination act. Commissioner Weintraub when you were talking with one of the respected lawyers, Mr. Don Simon about this issue, you asked him what exactly sort of are you thinking of with respect to what an effective coordination rule would look like and he said from an approach I would look to is a legislation that was introduced in the last Congress and has been reintroduced in this Congress by congressman Price and van Holland. To be share what he says, he says yeah it's before Congressbut he says you can also do it at the commission. He might be right. As a legal matter maybe we could. But as I've said at least Commissioner Peterson and I have taken many votes on this issue. Again I think it's appropriate to bring up again here today but I'll be voting against the motion for the reasons that we have discussed before. Thanks. >> Is there any further discussion? Well, there is a motion on the floor -- do you want to make the motion? >> I'll just make one small additional comment that as I said at the outset we can't change the statute. We can't enact a regulation that's inconsistent with the statute, but I think the statute currently has a lot of room to maneuver in the disclosure area and we could completely consistently with our rule making authority enact regulations. I didn't include coordination in this motion, although there's a general direction to the Office of General Counsel to look at what the commenters said and I'd secial be happy to look at coordination rule. I think our coordination rule was enacted before the era of super PACs and I'm not sure it can really bear the weight of these new practical developments of what's gone out in the world, but this doesn't really address that. So I'll just make my motion. Whereas the commission received over 32,000 written comments on the October 17th, 2014 advanced in the of proposed rule making in response to the court's decision of McCutcheon whereas more than 75% of those comments urged the commission to increase the disclosure of political spending and limit the influence of money in our elections, whereas on February 11th, 2015, the commission heard inperson testimony from academics, former commissioners, political party leaders, students, and concerned citizens pro who provided a variety of perspectives and opinions on action the commission should take in response to McCutcheon. Whereas those who provided comments and testimony relating to the Internet overwhelmingly urged the commission to exclude any regulation to regulate political activity on the Internet. Whereas the commission in carrying out its authority has a duty to be responsive to the tens of thousands of Americans who provided comments and testimony requesting swift action by the commission to address a number of issues including dark money in elections. I move that the commission open a rule making and accordingly that the Office of General Counsel draft specific proposals, including proposals to increase disclosure to reflect the written comments and testimony from the public in response to the McCutcheon ANPRM. I further move the commission direct OGC to exclude from the rule making any proposal affecting political activity on the Internet. Although as I said I'd be happy to change that if it would get Commissioner Goodman's vote. >> Thank you, Commissioner Weintraub. Madam Secretary, do you have that motion? >> I do. >> Thank you. Are there any comments, questions about the motion as stated? If not, all those in favor of the motion, please indicate by saying aye. >> Aye. Aye. Aye. >> All those opposed. >> No. >> No. >> No. >> Madam Secretary, that fails. Commissioner Weintraub, Ravel, and Walther voting yes, and commissioners goodman, hunter, and Vice Chair Peterson voting no. Thank you. The next item, if we could -- thank you to the stallwort audit staff for being here all morning. I'd like to take the next item out of order because I believe counsel for the respondent here needs to leave and that would be audit No. 8, you had a division recommendation memorandum on Kevin Mccarthy for Congress, A13-two. >> Madam Chair, at this point I'm going to have to step away. I'll get my votes in before the end of the day. Unfortunately I'm just going to have to step away at this time. It's been a very productive discussion: Some good steps. >> Thank you, Commissioner Walther. We really appreciate you taking the time before your daughter's wedding and have a very wonderful, wonderful event Congratulations. >> Thanks a lot you guys. >> Bye. Thank you. All right. We have before us this is Brenda Wheeler and Ken dribbing Smith, Tom miser are here to discuss the matter. >> Thank you, Madam Chair. Good afternoon, commissioners. The document before you is the audit division recommendation memorandum on Kevin Mccartthy for Congress that summarizes the proposed findings of a draft final audit report and the committee's responses. The prost findings are receipts in contributions in excess of their limit and the statement of financial activity. I'll be happy to answer any questions you may have on these matters. >> Are there any questions? Vice Chair Peterson. >> Thank you. On the issue of finding one about the contributions and the prumentive letters, we've handled a lot of audits that have dealt with this issue before and even in cases we haven't been able to get copies of the the actual letters that were sent out, templates have sometimes been acceptable, templates in combination with affidavits and so either to. You ippedcate in the audit that the audit committee had represented they believe that these letters had gone out. And the conclusion of the auditors was that the committee cannot prove such action was taken with a degree of acceptable certainty. I just was wondering what sort of information was given to you with -- on this point about there -- to buttress the claim that they believe these letters have gone out as you point out there have been letters that have gone out as you mentioned to gain the presumption and these presummittive letters at a later point but I just wanted to find out what information you have about the possibility of these letters having been mailed out prior in a timely manner? >> That was the committee's response to us that with a degree of certaintity they believe they went out but they couldn't prove with a degree of certaintity. I did not see any evidence in the records of a letter but there was another response devices other than letters. >> It was just a matter of where they think it went but they just don't have the information in their possession. >> Correct. >> Okay, that's helpful to know. I think that the fact that the letters went out and even if there wasn't time I think that is helpful information to know and also it looks as if whatever correct -- as to finding two that misstatements were corrected in response and I think that ought to -- that information should be considered by the commission as we consider whatever further steps may need to be taken in this audit. >> Thank you. Commissioner Goodman. >> Did they have staff turnover from the time these letters they claimed gone out to the time of the audit? Did they switch treasurers. >> They certainly switched treasurers in the middle of the audited election cycle. >> Did they claim to the audit staff that one reason they couldn't produce all of the records that they -- for example, an attribution letter that would have gone out was because that would have been in the possession of a former treasurer? Did they claim that the staff turnover affected their ability to affirmtively prove their innocence? >> I'm sure we had a few conversations and e-mails about presumptive letters and the prior treasurer was involved in a lot of the lack of designation letters. So that's a possibility. I can't say for certain. >> Not sure, okay. So you did deal with the former treasurer as well. >> No, I did not. >> You did not, okay. And the attribution letters were subsequently sent? >> Oh, definitely. >> And so we don't have -- once those attribution letters are sent, no one objects at that point it's not an excessive contribution. >> Exactly. >> So there was a period of time where they believe they sent the attribution letters, they couldn't affirmatively prove it. Then they did send attribution letters. So it's during that period of time that technically these were excessive contributions. >> Correct. >> So awls well that sort of ends well. Now the letters have been sent. Anyone who did object got their money back. If they didn't object the letters technically took care of the excessive contribution. >> Right. Within the exit period the ten-day response letters were sent out and responded to and all issues were resolved. >> All issues resolved, okay. I agree with the vice chair that were this matter given the dollar figures to go further, I don't know that it would call for a civil penalty or any further action. It sounds like matters were cleaned up properly. >> Okay. Are there any other comments or questions about this matter? Is there a motion? Vice Chair Peterson. >> Thank you, Madam Chair. I move that in audit 13-02 regarding Kevin McCarthy for coping that we approve the audit division recommendation memorandum. >> Thank you. Madam Secretary, you have the motion? All those in favor please indicate by saying aye. >> Aye. Aye. Aye. Aye. Aye. >> Okay. The vote is five to zero with Commissioner Walther will be entering his votes at the end of the day. Thank you. >> Thank you. >> We'll go back to No. 7. Just for everybody's information, I think we can -- we should try to get through the audit matters since the staff has been sitting here all morning in the interest of lack of government waste and then after that we can take a break for lunch and return to the executive session matter. Unless you want to just plow through. >> Whatever anyone else wants. >> okay. Well, we can determine that at the end of the audit matters then. The next matter item seven, audit division recommendation memorandum on the Oakland county Democratic party, a twelve-02. We have Paula Nertman, Douglas Godish from audit and Mr. \hint\had I notmeiser to discuss the matter. Is there any discussion? >> Good afternoon, Madam Chair. Commissioners. Before you is the audit division recommendation memorandum on Oakland county demcrate tick party recommending approval of five findings. The five findings presented were finding one, misstatement of financial activity. Finding two, recordkeeping for employees. Finding three, disclosure of occupation and name of employer. Findings four and five I will discuss briefly since both of those contain issues about OCDPs bingo operations. Finding four, recordkeeping for receipts. Doing field work it was noted that OCDP did not maintain adequate documentation and did not properly report receipts from its gaming activities totaling $1,820,466 for the 2012 election cycle. This finding was previously addressed twice by the commission in response to a request for commission directive 69 guidance and a subsequent request for legal consideration by the committee. Specifically the commission was asked whether OCDPs gaming nights consisted of three separate fundraising events rather than a single event for purposes of applying the recordkeeping requirements. Commission concluded in both instances that OCDP's bingo nights did not constitute three separate fundraising events and that OCDP was required to itemize all contributions exceeding $50 received each bingo night. Finding five, use of campaign depository. A review of OCDP's gaming operations found that OCDP did not deposit most of its gaming receipts into its designated campaign depository as required. During the audit period OCDP collected 1,000,820 -- $466 from its biweekly gaming activities but only deposited 25% of these receipts, $450,162 into its campaign depository. OCDP disbursed the majority of these cash receipts, $1,370,304 directly to prize winners and game workers. This issue was addressed in a prior audit report of OCDP approved on March 28th, 2001 and the matter was referred to OGC for enforcement, 5236. In that matter the commission found that OCDP had violated the requirement to deposit all its bipggo receipts and failed to automaticise gaming disbursements. OCDP agreed in a an agreement to correctly disclose all financial activity related to its bingo accounts, deposit all receipts from its bingo games into its designated depository and properly itemize disbursements that aggregated an excess of $200 from its bingo account. We're prepared to answer any questions you might have. >> Thank you. Vice Chair Peterson. >> Thank you, Madam Chair. The question I have is on that finding five. This had been raised in a prior audit back in 2001 -- when you were working with them how did they address that prior audit? Did they say that the committee believed they were complying with the obligations that were in that conciliation agreement and they had misunderstood what was understood of them? Did at some point the staff turn over and they just decided it would be too cumbersome. To handle one of these bingo nights would have been from the commission's perspective is to take those receipts, deposit them do an overnight deposit and then just write out checks there at the bingo hall as opposed to what it sounds like they did is the money came in, those who won got a payout then. The committee reported all that money's having been received by the committee and then the payouts would be reported as disbursements but the money wouldn't hit -- like you said 75% of the money wouldn't hit the bank account. Did they believe the way they were doing it in this instance, because what I understand is the way they were operating their bingo nights in the earlier audit was differently where they would only report the net amount, if my understanding is correct. Is that correct that they in the earlier audit they would receive money and then do the payouts and whatever they netted that is what would get reported? Not the other 75%. >> In the previous audit most of what they were doing was wasn't reported. >> Okay. >> There was a misstatement issue. So what they had -- what they were reporting at that time was only $100,000 roughly. There were two transfers of roughly $50,000 from their nonfederal account to their federal account representing the net proceeds of the bingo operations. So they weren't reporting any of the receipts or -- except for the $50,000 that was transferred. And none of the disbursements. So it weighs addressed in that report as a misstatement issue. >> what I'm trying to get at, did they believe they were complying with the con silings agreement? Where was the breakdown here? It seems like they'd gone through this before that they would have understood this is how we got to handle these proceeds from these bing goas nights and was there just a misunderstanding about what their obligations were from your assessment in dealing with this committee. >> It was totally new people. >> I'm sorry, I didn't understand. >> Totally new officials. There weren't any people there from the prior audits since that was 14 years ago. I didn't get the impression they misunderstood or anything like that. I don't think they were even aware that they weren't complying. >> Was there any sense that in the aftermath that the earlier audit and enforcement action that there had been a period of time in which they were depositing and reporting in the manner consistent with the conciliation agreement that as personnel turnover happened that a it reverted back to the way they'd done it before. >> I don't know the answer to that. Because we don't follow up after the audit's over. >> I was just trying to get a sense of since this issue had been addressed before just why we got back to where we were and whether or not there was any information that that would be helpful. I mean, I understand -- I can certainly understand their concern here in that the application of the campaign depository requirement does make the administration their bingo nights much more cumbersome. I can see why they would want to d it the way they do it. It sounds like -- there was no indication from the report that there was some miss reporting because this was a cash operation that there were tranches of cash that weren't being reported. It sowbdz like they were reporting what they were taking in and then they were disbursing out the problem from the audit's perspective that wasn't hitting the bank account. When that money came in it wasn't hitting a bank account before being distributed back out. >> That's correct. They were reporting the operations now yurn like before where they reportedly weren't. So it is the fact that if wasn't hitting the bank account. >> Okay. I appreciate -- you answered my questions. I can understand, you know, their concerns and why they would want to operate it in the other way but I'm not sure what else we can do at this point, especially in light of that earlier audit. >> Commissioner Goodman. >> Just picking up where -- I mean, it appears that our regulatory formalities are highly encumbering or impractical for a bingo night and it looks like what we want to propose on them is they couldn't practically take in the money. I guess we'd say they have to present vouchers, right? Because you can't write a check there at the bingo game that you don't have in the bank account. If you're taking in the cash at the bingo night, even if you deposit it that night it might not get credited to your account for a day or two so you can't go kite a check that night and give to somebody. Is the only practical work Arnold a voucher system where you give people vouchers for their wins and then once the money hits the account, gets credited to the account, then people can turn in the vouchers, or what are some of the other practical work around, because this is -- our regulatory formalities are wagging this whole dog and I don't think there's a mal intent here, no malicious. They were trying to run a bipggo night as practically as they could. I can tell you having worked with local state parties from 2001 to 2010, twelve, that's just a lifetime of turnover of people who get involved in local parties and get elected. There's really no institutional memory at that point. I don't necessarily hold the AO conciliation agreement against these new people. They were trying to run a bingo game. I take it you didn't find any evidence a\graft\gravity or theeivey. You didn't see that? >> No. >> The issue here is a matter of practicality. Is vouchers the way they should do this? >> I don't know if vouchers are really -- that was kind of explored in some of the earlier LRAs or opinions we received. They have a type of voucher system now for the disbursements over $50 I believe they were issuing them. I don't know what else they could do really to be in compliance with the regulation. >> To get the money deposited in time to be able to cut a check? >> That's an issue. >> I guess there's another way. They could take down the name of every winner and address and send the checks later. >> They could do that. >> Either way it's quite an encumbrance to run a bingo game like this. Over how many -- I'm sorry, over how many -- was this a cycle audit? This $1.8 million that they -- >> Two years. >> Okay. So they're having bingo games how often? >> Twice a week. >> Twice a week, okay. We're not talking about millions of dollars in a short period of time. It's spread over a couple of years twice a week, 50 weeks a year, okay. So I guess what I'm saying is I think all this is mitigating in the sense that, yeah, we probably want to get them in compliance with our rules but we need to recognize I think the limits of some practicality of trying to run a bingo night. And we didn't see any evidence of a graft or fraud I take it. So I guess I just make that observation. On finding No. 4 -- let me ask one other thing. Did they make any presentation? I know they came with a question to us about Michigan law defining events. Did they make any presentation about what their legal obligations are under the gaming, charitable gaming laws of Michigan for paying out? Would Michigan law prohibit them from paying out vouchers or paying money later? I could imagine there could be some state overlay on how they handle bingo. >> We got early documentation about the state bingo laws. I don't recall us seeing that in there but I can't really say begintively. >> They didn't raise the issue. They didn't say we're compelled in some way by giving people their money here for fear we might ab scond with their money or something like that? >> No. I don't know we really addressed it or they addressed it either: With the thought of paying out later. They have told us that they're planning to be in compliance with this in I think it was early May or at the end of May, I don't recall, but so they do have some type of plan. >> You don't know what it is, whether it's a voucher system or a check system where they take down the winner's names each night. You got to admit two bingo games a I get into, small checks, this is an incredible administrative burden to take the money in, take everybody's names, wait until the money hits the bank account then write all those checks out say three, four days later after every game. >> Well, I don't know they're going to have to write all -- it depend how they decide to do it but there will be some smaller accounts could still be disbursed through the proper use of a petty cash fund which was a related issue here that they weren't utilizing that properly and that they need to record I believe it's the name and address for that. But if they have a system in place they might be able to disburse the smaller amounts still. >> Who are they going to work with when they do have their plan? Are they bringing it to audit to show they're in compliance or who do they bring it to to show they reform their process to two audit? And will that be reflected in a final report? >> Once they have responded regarding what the plan is they were just in the works of trying to work out all the details because like you said it is a total change in their way of doing things. >> Right. So you plan on reflecting that in an audit report? >> Mm-hmm. >> Let me go back to finding four. You know, the commission decided these are for all practical purposes one event and not three events, but had it been considered three events and, you know, reasonable minds perhaps could have disagreed on that point. I see you're saying there's an average of $88 coming in for the events. >> Correct. >> Per person. >> Mm-hmm. >> And if we consider them three events, that would be about 30 bucks per person, right? >> Right. >> In which case they would, what, not have to report each individual coming in at $30? >> They wouldn't have to maintain a record. >> Excuse me? Would not have to maintain a record. >> It wouldn't be over $50. >> If that were three events then finding four would largely go away, right? >> That's correct. >> Okay. What I might ask is that audit division consider at least giving them credit for the argument even though the commission decided differently. I know that the fact they brought a question to the commission is reflected in the beginning of the audit report, but it seems to me maybe by footnote or something just to amealrate the finding that they operated on a notion that it was three different events. Had that been successful this would have fallen under a threshold, but the commission subsequently informed them we consider this one event. That commission determination came later and therefore there's a finding for. I'm not suggesting we remove finding four but give them credit for the argument at least in a footnote or somewhere in connection with finding four because at least a.m. meliorates the accepts of culpability here that they were operating on some sense they were three events. That I think would would be fair to the Oak lapped county democratic party. Thank you. >> Are there comments with regard to this matter? Is there a motion? Vice Chair Peterson. >> Thank you, Madam Chair. I move approval of the audit division recommendation memorandum on the Oakland county democratic party, which is A12- 02 as set forth in Agenda Document No. 15-20-A. >> Thank you. Any comments about the motion? All those in favor please indicate by saying aye. >> Aye. Aye. Aye. Aye. Aye. >> Madam Secretary, that passed by 5-0 with one vote outstanding, Commissioner Walther. And thank you very much. The next item is No. 9, audit division recommendation memorandum on new American city Inc., agenda Document 15-21-A. And we have with us the audit division and I'm sorry, I don't have your name. Are you presenting, sir? >> Yes. Jeff spillchevkski. >> Thank you. And Ken dribbing Smith and Tom hirntmeistrer. >> Before you is the audit commission recommendation memorandum based on the draft final audit report of the audit commission of new American city Inc.. The ADRM contains four findings, a misstatement of financial activity, disclosure of receipts, disclosure of disbursements and reporting of debts and obligations. In response to the preliminary audit report recommendation American city filed amended disclosure reports that materially corrected these issues. And I will now open it up to questions that you may have. >> Thank you. And sorry I gave your name improperly, Mr. codish. Are there questions of audit staff on this matter? Okay. Is there a motion? Commissioner Peterson. >> I just wanted to make sure to go through this one last time. >> sorry. >> No, I don't have any questions. I just want to tell the auditors I appreciate their efforts on this and I had taken some extra time to just take a look at this but I'm prepared to support the recommendations and I don't have any questions. >> Thank you. >> And I would just move that we approve the audit division recommendation memorandum on new American city Inc. as set forth in Agenda Document No. 15-22-A. >> Any questions? All those in favor, please indicate by saying aye. >> Aye. Aye. Aye. Aye. Aye. >> All right. Madam Secretary, the vote is 5 with one outstanding to the end of the day, Commissioner Walther will enter his votes. Item No. 10, and thank you to everyone from the audit division for not only your work today but also your patience, yes, in waiting to present later after the early. Thank you. Item No. 10, Mr. staff director, are there any management or administrative matters that the commission needs to discuss today? >> Madam Chair, there are no such matters. >> All right. Thank you very much. This meeting stands adjourned. Thank you Copyright © 2016 Show/Hide Header Show/Hide Chat