This file contains archived live captions of the open meeting of the Federal Election Commission held on January 14, 2016. This file is not a transcript of the meeting, and it has not been reviewed for accuracy or approved by the Federal Election Commission. >> Thursday, January 14th, 2016, is in session. The first aggin item is the correction and approval of minutes. Mr. vice chairman, do we have a motion. >> I move to suspend the rules on agenda documents in order to consider the late submission of the following documents. Agenda document 15-69-C, draft C, Hillary for America AO. Agenda document 16-03-A, Draft A. We support that AO. >> All right. We'll move the late submitted documents first. All those in favor say aye. >> Aye. >> Madam secretary the motion passes. Do we have a motion for the minutes on the meeting -- I guess the meetings of November 10th. >> I move that the commission approve the minutes of November 10th and 17th, 2015 as set forth in agenda document. >> All right. All those in favor say aye. >> Aye. >> Madam secretary, the motion passes by a vote of six to zero. Since we are meeting together as a commission for the first time in 2016, I first of all just wanted to wish everyone a happy new year and hope that your holiday season went wonderfully and that 2016 has treated you well thus far. As we all know, we have a presidential election cycle that is well underway and that will obviously consume a lot of our time and attention over the course of this year, which will present many challenges but also will I think present many opportunities. We know from experience that there's always an upetic in the number of advisory opinion requests submitted and number of complaints that are filed. So we will definitely need to be on our A game to make sure we are providing the timely resolution of these submissions and complaints. For example, in the enforcement matter, enforcement arena, in order to provide closer to those on the subject of enforcement matters and also to provide clarity to the larger community who are subject to our laws and regulations. This has been an issue that we've discussed at some length in these meetings and I want to reaffirm my commitment t working effectively and efficiently with the docket of items we are going to be faced with. Very often times the commission is perhaps criticized or it is noted the disagreements and the differences of opinion that we have on the commission and I don't pretend to say that we don't have our agreements and sometimes -- but I believe that they are based on principle views of the law and are held on good faith. Having been here for seven and a half years, I know we're capable of working together to find common ground and compromised solutions. I certainly want to throughout this year identify those areas and issues where we can work together, because I think that we definitely are at our best when we can find areas where we can find, especially all six of us, but at least a majority of us, to move forward on particular matters. I hope that that we can find agreement wherever possible and that where we can't that we'll still disagree respectfully. I look forward to working with vice chairman Steve Waltherer. We worked together before. I was his vice chairman back in 2009 and I always enjoined the professional and cordial relationship that we've shared and I look forward to continuing that through the upcoming year. We've had many opportunities to talk so far this year and I think both of us feel optimistic about what we can accomplish this upcoming year. I also want to thank the staff and look forward to working with all of you. I recognize both what you do when the lights and cameras are on but more importantly all the efforts that you put in behind the scenes. I know that I greatly appreciate and rely extensively on the fine work that our staff throughout this building put in on a daily basis and look forward to continuing that working relationship. So in short I'm looking forward to working with my colleagues this year to hopefully make this as productive and effective as a year possible. And again, happy 2016 to all of you and let's make it a good one. Vice chairman. >> Thank you, Matt. Also, happy new year to everyone in your personal lives as well as within this building, and each year brings a new hope and a fresh approach to things. I think we can do that this year. Hopefully begin to find new ways of finding a common ground. I sent a note to the commission a couple days ago because I realized I just had my tenth anniversary here, but in the process it made me realize how many people have been here 30 years. I know some of those people have retired in the last year. We have an awful lot of people who have given their lives to this place. Then I'm also of the same realization right now that we have been voted to be a very unpopular place to work. I think if we're not the very lowest, we're close to the lowest in the other government agencies. I tend to think that not has always been the case. Hasn't been votes taken like that a long time ago, but given the fact that people love this place and given their lives to this place is telling about where we should be today. I want to reiterate what I said in my note, that I think the staff is terrific. They're dedicated. They show up. They have a smile going up and down the elevator when you don't get the chance to know these people very well, as well as we'd like. All of us on the commission recognize that even in our darkest hours. But something has changed to the point where we need to take a look at how we're getting the job done for the staff. There isn't an opportunity now to help us do that. As you all know, there will be an -- there is an opportunity now. We professionally hired people to help us find the root causes of some of the problems that seem to have surfaced. Especially when you vote on how you perceive this workplace. But it's up to the staff to help us do this. You can go down to Room 208 between 10:00 and 2:00 almost every day of the week for the next month or so. When you get down there, also some telephone numbers you can use to call if you want to meetoff line, another place. It's totally anonymous. But I really encourage this staff to do that and give your measure of support to the FEC by helping us work our way to an enjoyable place for everybody to live and work. Having said all that, I want to say I'm really pleased to be able to work with Matt. He's a great gentleman. It's always basketball a pleasure to work with him, even under the times when we disagree as strongly as we can disagree on some points. >> We've had some meetings already about how we can with some baby steps get start and begin to develop a constructive relationship that carries through the rest of the year. Matt, you've got my pledge to work with you as cooperatively as it can possibly be to move the ball forward. Thanks. >> Thank you, Mr. vice chairman. >> I asked to speak because as many of you know Sarah Rosenski is leaving the agency and she has worked with me as well as other commissioners, she's worked with me since I arrived. In fact, she worked with me before I arrived and has provided incredibly good counsel and advice. I think her leaving is particularly significant because she's a loss not just to me but to the entire agency. She has a wealth of knowledge about the workings of the agency. She understandses and remembers off the top of her head the findings and issues in past AOs enforcement matters. She and I have had many, many long discussions that were consistent lating, I might add, about footnotes in prior AOs and enforcement cases. But actually we've had a lot of discussions about issues and very spirited disagreements and I always valued her advice and counsel. She is a fabulous lawyer. She's knowledgeable, hard working. Really hard working. Tenacious. Cooperative with everyone here. Most of all, she's a really genuinely good person, and I'm very sad to see her go. Sorry to tear up. You know, she's just been -- she's been quite amazing. But we wish her well. She's going to Planned Parenthood and she'll have a very great career I know as a lawyer. Thank you. >> Thank you. Let me just echo those same words about Sarah. I've had the opportunity to work extensively with her and my office has worked extensively with her. She has always been such a constructive force in terms of moving the business of the agency forward and in trying to find ways in which we can best work together. As always, been such a friendly -- you know, a presence on the ninth floor. Someone who you can talk about the business of the agency but also just talk about the happenings of our day together. I always have appreciated again the positive demeanor you've brought and the professionalism that you've always conducted yourself with on the ninth floor. You will be missed and I certainly wish you all the best in your next step. The next Item on the printed agenda was draft advisory opinion 2015-13, Senator hairy Reid. That has been withdrawn. Commissioner hunter. >> Thank you. Even though it's been withdrawn -- thank you Mr. chairman and I'm delighted also to be able to work with you and the vice chair. I've envoid working with both of you in the past and look forward to a fresh start. Regarding the advisory opinion, I know it's been withdrawn. It's still on the agenda. I just wanted to make comment on the letter we received this morning from the requester, Mr. mark Olias about the read AO. Two points. One, the letter characterizes the request as a routine advisory opinion request. I respectfully disagree. I don't think this was routine. The requester notes that a lot of the reliance for this was on the carry AO, which as we discussed in the last public meeting, that was an unusual AO. I think we can all agree on that at least to the extent of the last part of the AO where it says this is really just for this person. I don't have the exact sentence in front of me but as I said at the last meeting I think that is contrary to the statute. I would definitely not have voted for that portion of the AO. With respect to the broader portion of carry, I also think that's attennous legal statement and probably wouldn't have voted for that at the time. However, I have come to the conclusion that I would have supported a yes draft in the read AO with some edits which I'll mention in a minute. For the reason I don't think -- and Mr. Elias comment is people are relying on the carry AO or some version. We have been permissive on per messive use I agree with that. It was probably best to go forward and say yes in this request. If the commission decided to change the rules in this regard it would be better to do via rule making, particularly if the commission becomes more regulatory. So that's where I was headed. With respect to the edits to Draft A, my intention with those was to ensure that other former members of of Congress who are similarly situated would also be able to avail themselves of the protection of the AO. I didn't think the fact that Senator Reid was the majority leader or that he had been there for a long time was the only reason that he should have been able to to use these funds. That was a relevant fact for how long he was going to be able to use them. He is different in that regard for being able to go beyond the six months. I was willing to go forward in the opposite of the broad regulatory impulse that's stated in the letter. I just don't think that was not a fair characterization of the way that at least I was headed. Thank you. >> Thank you. The next item on the agenda is AO, Hillary for America. Mr. Elias is here who is the requester, and Ms. Lopez. This is the second time that we've considered this matter, but there have been some let's-breaking developments. I will turn it other to Shawn \write\writhe and Bob knob to give us a presentation. >> Thank you good morning commissioners Before you is other document which contains three responses to a draft. The request as you know asks whether DePaul university may provide a stipend who interned. Draft B concluded that provision of a stipend is permissible for the the legal and compliance work the student provided but not for her other campaign work. The drafts also concluded that the provision of academic credit is permissible for all of the student's work. Conversely draft C concludes that the provision of a stipend and academic credit is permissible under the act for all the student's work. The commission receives two comments on the request and two comments on the drafts. Thank you and I'd be happy to address any questions you have. >> All right. Thank you Mr. Wright. Are there any comments? Commissioner Weintraub. >> Thank you, Mr. chairman. Mr. Elias you don't always persuade me when you come to the table but I thought you made a lot of good points at the last meeting. I went back and looked at some of the old precedents that were being relied on in the initial drafts. It's surprising that the question as you posed it has actually not been posed before. I'm always surprised when somebody comes up with something new that -- I mean, there's nothing new about student internships. It surprised me nobody has ever brought one like this before. All of the previous iterations that have come before the commission have involved some sort of special foreman or scholarship fund and not a broad based internship program like the one at issue here where where it's an accreated degree granting institution. 501C3. It's -- they've got a broad based internship program that's required for their students and students can apply for the stipends to help with living expenses while they are performing those internships. This particular student happened to have a political internship but the program isn't set up to do political internships. This is to allow her to accept it would put her on equal footing with all the other students who do nonpolitical internships. As I said it's surprising but nobody's ever posed that question to us before. Some of the very old AOs from the early days of the commission when it first start up in the '70s, it was handling over 100 advisory opinion requests a year. The responses were -- did not contain elaborate legal analyses in them. Some of the early ones are somewhat occursy in their analysis to begin with. I think there is not a lot of risk to the system in saying yes to this request. It would be I think beneficial, in fact, to do so. So working with OGC, my office came up with Draft C, which does say yes. I think one way of looking at this would be to compare it to the situation of a better-off student from a more well-to-do family who wanted to do a political internship that didn't pay. An unpaid internship. The family might say that's fine, honey, you go ahead and do that and we'll pay your living expenses while you're doing that. We would never in those circumstances look at the family's payment of the intern's living expenses as a contribution to the campaign. And it seems to me that the school is doing effectively the same thing here. They are treating her like any other intern and providing her with a some type -- or offering to provide her with a stipend that would cover her living expenses. It's totally independent of the fact she happens to be doing a political internship. Their only concern that is be of educational benefit and they appeared to have decided it wouldn't satisfy their educational criteria. I think you made some good arguments. I went back and checked the law. I think we could without even overruling any of the old presidents, because the old AO's were not about this kind of a situation, I think we could say yes and we should. I don't know if anybody else is ready to say yes but I am. >> Are there any other comments or questions for counsel? Commissioner goodman. >> I also thought that your presentation was per swaysive at the last meeting. I just want to let you know that the unique educational environment is a special interest to me. The purpose for which these stipends are paid is of interest. I also think the unique first amendment area of academic freedom is at play here. Without this stipend program presenting any risk of corruption. So must apologize to you. I thought long and hard too about your other request over the break. This is one I start to move on from a no to a yes. I didn't think that there might be four votes of the commission and just this week it began to crystallize that there just might be four votes. But the thought and the thinking and rationale for getting there is still in some flux. I note that the issues you raise are somewhat retrospective. I understand that the young lady is still awaiting a disposition of whether she can receive the money and that the campaign doesn't want to receive a corporate contribution. Given that we have another public meeting in two weeks, I don't want to jerk your chain and I don't want to overpromise, but I think there is enough fluidity on the commission. I have learned in the past two days. I want you to know I was here until 11:00 last night working on the draft that went blue that came from commissioner Weintraub's office. I'm working very hard for your client to see if we can get to a yes draft on this. I am impressed particularly by the educational purposes at issue here. With that I will leave it to the chair to decide how best in consultation with you to proceed but it may behoove the commission to take two more weeks on this. >> Mr. Elias, do you have any comment. >> So first let me thank all of you. Congratulations on chairmanship. Congratulations on the vice chairmanship. I want to thank you all. It's not often that one appears where there is seemingly consensus against you. There at least has been some movement. So of course if you need two more weeks. I think last time I said just tell me what time you need. We'd rather you get this right. Hopefully you'll think right that the answer is yes. But either way I think you're right. I think there are a number of interests here involving your point about the parents paying is something that is -- you know, you'd have to wrestle with with a no. I think your point about academic freedom and the right of 501C3s to sort of pursue their mission I think is important. We can perhaps work it out. I don't know how this is done but we will consent to whatever time you need to hold this over. >> Commissioner hunter. >> Thank you. With respect to Draft C, I think it does make sense to try to say yes to this. I actually have had several people ask me this question sort of over the years since I've been here. >> what did you say. >> I said no. I mean, because that's what the dent says. Different colleges or people that I know people that are interns can we do this. The precedent says know. I'm not sure I'm at yes. I'm still thinking about it. One of the things is with respect to the legal analysis here I'm not so sure I could support it as written because it comes up with a completely new test. It is compensation and it is for personal services but now we look into the whether it's for. Is the compensation for the campaign or for someone's educational benefit. One of the issues I'm thinking through on that is so now the only person who can decide that it's for the student's educational benefit is the university. Under this AO it can't be -- for example, I got a small stipend or whatever you want to call it in high school from a nonprofit organization that wasn't the university. That person under this AO's analysis is not equipped to say that that money is for my educational benefit. I'm not sure that having it to just academic institutions -- it may make sense and B is it a legally significant fact. Why are they the only ones that can decide. Along the lines of the thing we were talking about before of making sure disadvantaged students can do this, I know some students prefer not to go through the credit route because then they have to pay the credits. I did this in college. I was an intern on the presidential campaign. Got six credits for it and had to pay for the six credits. Which was expensive. So the cheaper way of doing it and a lot of my friend's did it this way, they didn't get the credits and then you just go back to school the next semester and \jam\jamb out as many credits as you can. You can take 21 credits, at least when I was in clem for the same price that you could take 15. So it's cheaper that way. So yoke saying this is the way we're going to say this is the way disadvantaged students can go is necessarily true. There's a lot of other ways to do this. Those are the things I'm still thinking about, and another question is I saw this in a previous draft. It's not in this one. But the second program at dePaul allows students to do this for as pew as I think I saw a half a credit? Am I reading that right? It doesn't have to be the full semester. >> The programs are actually separate. The grant program, you don't have to be getting credit to get the grant. And you'll see the very first request we laid out in the most clear manner, but the extended studies credit, one way to do it is an internship. Once you've gotten it you apply through that and get the credit. But not necessary that you're an extended studies credit recipient to apry to the grant program. Does that make sense? >> I'll have to go back and read it. With that in mind -- >> The grant program supports the extended studies credit in the sense that you can get the money while getting that credit. It's not necessary. >> Does the extended studies program, do you have to do this sort of like intensive study, take the semester off for college and do it or could you still be on campus and take a one-hour, half a credit. >> There are other ways to do it. Doesn't have to be an internship. It can be. >> What could it be besides an internship. >> I'd have to look back deeper into that program. But I think the idea is that it's some sort of hands-on learning experience. I think it would be a clinical program at the school or something like that. >> You could go work for a campaign and say your university was in the target state. You could go do some kind of hands-on program for half a credit or one credit sort of getting out the vote, for example. >> Sure. I think, yes. >> Assuming it met the criteria. >> Which criteria? >> Whatever the university gives one credit or one half credit for. >> Right. Half a credit. >> Yeah. In other words we can check and see whether DePaul offers half credit classes as opposed to one -- I know different universities have different -- >> It wouldn't matter under this AO. >> Wouldn't matter legally. I was just trying to answer -- >> Oh, I see. >> I don't know legally it matters but -- >> Do you think it matters legally this is only for academic institutions? >> I'm going to confess something that is akin to what I think commissioner goodman was confessing, which is last hearing I start -- it appeared we were at six nos. Yesterday it appeared well perhaps there is some movement on this but it was less transparent to me that there was as much potential movement as there is so that -- >> Maybe. >> Maybe. I'm mirroring what I heard Commissioner Goodman say. >> I'm in the zone. >> Yeah, right. So the truth is one of the benefits of giving you all a couple of weeks is it will let me also think further with -- when you file the request when you get back, drafts that say no, no, no, you know -- >> We're in a different frame of mind. >> Yeah. >> so a separate sort of line of questioning and one different idea that's a different approach than Draft C is to say well we're going to essentially overrule parts of the previous AOs and say a stipend is not compensation. I don't know if you'll yell at us for doing that because you want us to follow the precedent. But this would be at least more deregulatory. I think as I said earlier that is more -- in my mind that's easier to do because you're going in a more deregulatory position. But that's another potential. I don't know if you've had a chance to think about that because it wasn't on the table but saying that a stipend is not compensation. >> I think that commissioner wine trawb makes a point about whether or not you have to overrule those. I think our original request suggested that you should overrule the earlier precedent. I haven't gone back and looked to see in light of Draft C whether there is a way to thread those deals. I mean, I don't want to -- when you look at those early precedent, I think I said this last time, they are literal -- literally physically look at them, there is a dearth of analysis and frankly I don't think the commission -- I think there are precedent where if you all were on the commission you might or might not have come out the way that a prior precedent. We had that conversation about the Kerry AO, for example. >> Correct. >> I think the precedent at issue here, even if you had come out the same way you would never have written it the same way. It's like they're from another era. >> Right. >> Of the agency. Another era of campaigns and frankly another era of higher education. Your question about other nonprofit -- like none of that is contemplated in sort of a meaningful way to the current campaign finance system. I guess I -- personally if you ask me I am less attached to those precedent but if the commission feels it's important to affirm them in some form of fashion then my goal is to get to a yes. My initial take on it was those precedent probably should go by the wayside. >> And at this moment, which again could change, I tend to agree with you and I realize that's the way you structured the requests in the first instance. I certainly don't want to speak for anybody but my recollection some of what was said last meeting was that people were more interested in cabinetting it in. After I read this one I'm not sure that's the right way of going but doing it that may -- don't want to speak for anybody, but may lose support for a different reason. >> Right. Although, we can always get yeses -- we can get six yeses in degrades of yes. >> You haven't heard from every commissioner. >> Or more precisely four yess. So I hope if there's not a -- I hope we could get this student to a good place. I hear you. There's a lot of fluidity to this and I think whether it is useful at all times or not I will leave to each of your own judgments but we tend to generate a fair amount of paper around these things so I can also assure you we can take the feed back from what we're hearing and give you further thoughts in advance of your own consideration of this in a couple of weeks. I shouldn't say a couple of weeks. I don't know when it will be scheduled but for whenever. >> Commissioner Weintraub. >> Thank you, Mr. Chairman. I'm going to make a point that I've made in other context. We have a particular AO request in front of us. Some nonprofit group that wants to offer a stipend and describe their program and request an AO request they're free to do so. This is not a rule making. It's an AO. Speaking for myself there are a variety of facts that are represent in this request that are significant to me. I don't know that I would be -- I'm happy and welcome the opportunity to work with my colleagues, because I think the A plan would be that we could get four more commissioners on the same rationale and then we could give some actual guidance, which would be nice. But I'm not -- I would have more concerns about saying, well, you know, any nonprofit organization that sets up a program of political internships and wants to fund them we're going to say that's fine because I could well imagine 501C4 organization that springs up around election. We're starting to see this more and seems to have the sole purpose of promoting a particular candidate and they decide one of their nonprofit activities is -- they're going to sponsor a political internship and they are going to provide stipends and salaries for people who want to do political work explicitly on campaigns. And oh, looky looky, it just turns out that everyone who applies and gets their political internship is going to work in the offices of one particular candidate and all of that is being supported by undisclosed dollars. I would have concerns about that. I would not be interested in writing a rationale that would open the door to that but I think we have a lot more protections when we are talking about a university that has a broad-based internship program. In this fact pattern I don't see any risks of any problems but I could envision other problems where people are basically providing paid labor to campaigns that would cause concern for me. >> Commissioner hunter. >> Thank you. Would you have concern if it came to be a university who had the nonpartisan kind of process that we've discussed here today ended up sending all of their inteshes to the Ted Cruz campaign and we didn't know where any of the money that was sent to that university came from? Would you have any concerns then? >> I think if it looked like this, if it was an acreated degree granting institution, I'm sure there are some of those institutions that attract a more conservative base and some more liberal student base and -- >> The fact that they're accredited takes away your concern. >> That's an important factor to me in this scenario. I'm not saying that I would say no necessarily to all other requests. I think we just ought to take them as we come. >> Right. And I understand what you're saying but as we've discussed I think we have a different view of this provision of the statute about advisory opinions because I think that we have to determine what's materially significant. So if significant to you that this program is done through an accredited university you're free to say that but I don't know that's legally significant. Other people should be able to rely on it if they're 501C whatevers. I'm not sure that's a legally significant fact. >> They would not be -- got the boilerplate at the back of all of our Is. >> Right. >> That say this response constitutes an advisory opinion concerning the application of the act and commission regulations to the specific transaction or activity set forth in your request. The commission emphasizes if there is a change in any of the facts or assumptions presented and such facts or assumptions are material to a collusion presented in this advisory opinion then the requester may not rely on that for its proposed activity. Any person involved in any specific transaction or activity which is indistinguishable in all its material aspects from the transaction or activity with respect to which this advisory opinion is rendered may rely on this AO. >> I understand. But what I'm saying is -- >> If you're going say other people who present different facts can rely on this even though their transaction is not the same as this, I don't think that's the law. >> Right. But you would put the accreditation portion in the legal analysis. You're right, other people wouldn't be able to rely on that opinion if they weren't an acreated institution. I may not do so. Other people would be able to rely on a position that we pass. >> Then we should do a rule making. >> Maybe we should but that's not at play in this discussion at all. If I don't think it's legally significant that it's an accredited institution then that's not going to be in the legal analysis of this AO and therefore other people could rely on it. >> While I think we should spend some time talking about how we can reach yes that we all agree on and expect this discussion is helpful, I have to say that not only -- I was at no, a fairly strong no, and then, thank you for not only your presentation, but also the points that you made and the points that you've made in the letter that set forth some of the factors that do cabin this issue in for me. I have to say that I cop occur generally -- I'm not in total agreement with Draft C, however, I concur with the analysis that it must relate to an accredited institution. It must be a stipends that intended for all all students, all of the factors that Mr. elas set forths in request because those are meaningful and going back to the previous AOs, the reasoning he pointed out is weak, but I am in agreement with respect to both a student both legally and also just from a policy basis there does seem to be an appropriate exception to this case but I would not want to extend it out to other nonprofits because as we know that opens up the universe in a way that is not one before us as commissioner wine trawb pointed out but is also not something I could support because it would not be -- it woul eadvice rate the rules relating to corporate contributions. It would eadvicerate. >> -- >> It would eadvicerate the rules according to corporate contributions and that would be inappropriate in my view. >> But educational institutions are also corporations. >> I understand. I think in this circumstance -- you know you had the conversation about whether or not the previous Is should be overruled or withdrawn or for anything else. I am open to either of those approaches actually but I definitely would want to cabin it in. >> So some corporations are okay and others are not. >> You can tell we haven't had a chance to -- this is late developing thought among the commission. I think it's helpful for you to hear it too. If you are going to submit and I'll leave it to you because I don't want to spend your client's money unnecessarily. If you are going to submit something it would be helpful to receive it by next Wednesday. Just that you have some thoughts to conjure and shoot for. To me in this discussion the linchpin legal principle is not that it's an accredited legal university or that it is a stipend, it is that the purpose for the stipend is a bona fide educational purpose. What is the evidence that it is a bona fide, we have an accredited university, we have a bona fide student/university relationship, we have a longstanding -- not that it has to be -- but stipend program. We have an extended studies program that requires -- those are all evidence that it is bona fide as opposed to a run of the \mill\mil -- \mill\mil -- campaign for one side of the fence. That risk is somewhat cab bind by IRS precedent. Particularly the campaign academy case which you didn't cite in your materials but I think is relevant here -- C3s cannot run a mill to train people for just one side of the fence. The IRS has determined and tax court has held that that is personal benefit or private benefit to one party. For all those reasons I'm not that concerned about someone other than a university doing this. This one happens to be a university. The fact it's accredited is relevant but broader legal principle and that is the bona fide purpose. That may help you. I'm also interested in harmonizing to some extent the historical -- I agree, I read the historical opinions. There is no analysis. You paid for somebody who interned for a campaignergo it's a corporate contribution. The NYU or the Vanderbilt case. So when you look under the hood of that analysis, you also find several inconsistencies through the 35 years of precedent. One is why is it that enkind credit has not been treated but the stipend that allows you to do something toward credit would be. The \inconsistent\insistenty that a stipend that allows you to take a summer to go do this and have your subsistence paid treats students different who may be on scholarship at school having their subsistence paid by somebody else while they volunteer for a local federal campaign. Why do we allow one sub Side but not the other. Why do we discriminate for students who work for nonprofit and nonpolitical activities versus those who choose a political nonprofit? Those are all of interest to me if you were going to submit something further. To me the bona fide educational purpose resolves all of those. Evidenced by the student relationship, evidenced by those things, then when the next case comes to me I know that the question is is there a bona fide educational purpose and program here as opposed to just a mill to provide internships. I can look for indicia of bona fide educational purpose. This would be the first one that we let out of the barn to say so. This is one commissioner's thinking, but to the extent you're trying to harmonize that is one possible way. >> So if I can just address two of those points which I think are really -- >> Could you react? Isle ask you a question. >> Which res Nate a lot. The first is -- so there's that line of AOs, like the comp U serve AO, whether -- I think it was compu serve could give free e-mail accounts to campaigns. This is back when one had to pay for e-mail, so early '90s or late '80s. Basically the law that came out of that was you can't treat campaigns better you don't have to treat them worse. There's all of these cases involving hotel discounts. I didn't know about the old AOs. I was shocked. As long as they're not discriminating between political and nonpolitical, this is like a narrow area we are actually saying you have to treat campaigns worse whereas Hyatt with hotel points and discounts doesn't have to treat them worse. I think there's a Mormonsation there that is kind of meddlesome. It's not clear why we have picked out these -- this group of people, students that they don't get that benefit but Hyatt does. That's one thing. The second is something you said commissioner actually resonates -- Commissioner Weintraub start with is if you don't walk back, to some extent, whether it's harmonize, whether it's overruled, I'll leave to you all, you do wind up in this odd thing where the university is actually paying some students, interns as you pointed out and people's parents are paying. The rich family their parents are providing these subsidies. >> Or private foundations and other scholarships. >> Or banks, if he hadly chartered banks. In some ways it some ways it proves too much the old line of authority. If in fact the payment of someone's living expenses to do a stent on a campaign is a contribution, well, then jeez we need to be -- every campaign needs to be looking at -- forget about internships. The campaign. Are their parents supporting them, boyfriend or girlfriend supporting them. Have they taken out a loan to support them are they not paying their credit card bill? Your point about Harmonsation I think goes to a point that I think Commissioner Weintraub was making about this where you do have this oddity that you would have to figure out what is the personal funds issue, if any, if you follow those old opinions. I know you made a couple other points and we'll address those as well. I think you're right that this kind of doesn't hold together. >> Are there any other questions or comments? The one that I have follows up on something that Commissioner Hunter brought up which is -- and first of all, let me think -- thank Commissioner Weintraub for getting a draft out there that I think moves the ball forward and gives us a vehicle now to try to find compromise and I certainly think this has been helpful here. I think the conversations we've had so far have been helpful and I hope that we can find a way we can land this. The Draft C says the stipend is compensation and there are personal services being provided to the campaign but that the compensation is not for those personal services but that it's rather a compensation for maintaining the blog or doing these sorts of activities that -- I think there was some mention of -- I don't know if it was papers or presentations that were associated with receiving the stipend. >> Those requirements are related with the extended studies credit not with the stipend. I think the idea with the stipend is it's just to support these basic living expenses and not even cover them. You'll notice on her expenses they were $4,700 and she's getting 3,000. I think that's the point that Draft C. >> One of the issues that Commissioner Hunter brought up that I've been puzzling over myself is whether we should even be calling it compensation. Does calling it compensation -- I don't know if this is a question you woul know offhand. Your client's not the university but rather the campaign, but does that have implications for the university? >> It has implications in the university. >> To say that it's compensation. >> It would make it taxable these stipend. I'm not representing the individual nor the university and I'm not a tax lawyer but with all of that I think it also has -- it would have significant tax implications. I don't think it is compensation. I think there is a reason why the IRS has rules around stipends that distinguish it from compensation. >> And that's just one of the issues that I'm just kind of noodling over right now is should we be calling this compensation at all or should we stay kind of in the framework that the Draft C has where we say that's not compensation for the personal services. When you think of compensation that means payment for services rendered to a certain individual or entity. There's not work that's being performed by the recipient of the stipend here. It's not that they are -- I mean, they're furthering their academic career. It's not like this is an intern for a professor doing research and is being compen sated for those research activities of a professor. I'm just wondering if even maybe the cleaner shot that at least -- I'm thinking through it and may be persuaded otherwise. Something also to the extent that you have additional thoughts on, is the cleaner analytical approach to just say if we were to approve this to say this just isn't compensation? >> Yeah. I mean, also, by the way, wage and hour laws, right? If this was compensation, then unless -- you have the exempt, nonexempt employee issue. You'd have withholding tax issues. You'd have minimum wage. I think that this -- again, we can look into this and give a little more meat to this. But I believe it's actually not treated as compensation. >> Is there any other discussion or any questions? If not, I think the plan will be then to resume discussion on this in two week at our next open meeting and I certainly appreciate the comments you've given us so far and also the opportunity to allow us to discuss and continue a way to go forward on this. If there's no other discussion we'll just say we look forward to the additional materials you will provide. >> I want to thank you all. Commissioner Weintraub thank you for rescuing this with a draft. Commissioner thank you all for your time and attention. >> Thank you Mr. Elias and Ms. Lopez. We'll move then to the next matter on the agenda, which is draft advisory opinion 2015-15. We support that.com which has been submitted bydan Brady who I understand is on the line and can participate with us remotely. >> Yes, I believe he is. Mr. braidy. >> Thank you Mr. Chairman. >> good morning, Mr. Brady. Glad you could join us. >> We have a presentation of Mr. Nevik. When ready, please proceed. >> Thank you, Mr. Chairman. Good morning, commissioners. Agenda document No. 16-zero-A response to other filed on behalf we support that.com, a for profit corporation that proposes to offer an Internet-based service through which individual users will be able to make contributions in response to certain actions of federal candidates. Specifically the requester's Web site will enable a user to search for candidates or office holder's actions such as public statements, legislative votes and sponsorship of particular legislation. Send messages to candidates explaining why the user made a contribution. Wesupportthat.com asks whether it's permissible and whether services paid by its users will be treated as contributions to the recipient political committees of the the draft before you concludes that that it is permissible and it would not be contributions. The commission received no comments on the advisory opinion request or the draft. Thank you. >> Thank you. Are there any questions or comments with respect to the draft? Mr. Brady, since you took the trouble to call in, are there any comments that you have with respect to the draft that's before us? >> We support the draft as it's presented. We think it goes nicely with the AOs that come have come down on the subject of the interface of technology. We spent a fair amount of time really using the previous AOs for the business models and I think we've done that. I appreciate your time today. >> Thank you, Mr. Brady. Mr. vice chairman, do we have a motion. >> I move to approve agenda document 16-03-A which is Draft A and authorize the Office of General Counsel to make any technical as may be necessary. >> Have a motion on the table. All those in favor say aye. >> Aye. >> Madam secretary, the vote is unanimous, six-zero. Thank you. The next item is division recommendation memorandum on the youth State democratic committee which is 13-ten. We'll have a presentation from Ms. Irvin and Mr. Cush. When ready, please proceed. >> Good morning Mr. Chairman and commissioners. Before you is the audit division recommendation memorandum on youth youth state democratic committee which recommends approval of five findings. Finding one, misstatement of fbl activity. Finding two recordkeeping for employees. Finding three improper bank account structure. Finding four receipt of eleven fund donations that exceed the limit. Contributions that exceed the limit. These findings were presented at the exit conference and included in the audit staff's interim and draft audit report. USDC provided a response to the reports but did not request a hearing concerning these matters. We're prepared to an any questions. >> Thank you. Are there any questions or comments with respect to this. Commissioner Goodman. >> I'm allegation confused about the misstatement of financialivity finding. I just want to understand the facts. I think I get the result was that the bank ledger didn't line up with the report figures. I want to understand how that happened: It may not have consequence for approving the audit report but may inform a decision later on if there were a referral. As I understand what occurred, because they had the sweep account, and maybe it wasn't because of the sweep account, the federal committee recorded and reported to the commission receipt of approximately -- was it about $90,000 in transfers from the state committee? >> That's correct. >> Because they thought those transfers were occurring, but, in fact, the transfers were not made to the federal account, am I right so far? >> That's correct. >> and that caused a $90,000 overstatement of cash on hand in the federal account? >> That's correct. >> Okay. Yes, sir? >> I just wanted to clarify something, what you said and she agreed to was it wasn't that they thought. What they did think was that there was a -- there was no reason really to allow the funds to make a physical transfer in this case, because if they did the monies would get swept back from the parent account from which they originated. >> I see. So they weren't really in the habit of making actual physical transfers like a check or I would do it on-line now but transfer money from one account to the next because it was in one account. >> They actually did make some transfers and then they -- I believe they made five and then five they didn't. >> They failed to physically make the transfer to the federal account. They thought they -- somebody thought they had because the treasurer reported these transfers totaling plus or minus $90,000. >> Right. >> What we think happened is the $90,000 remained in the state account? I mean, it didn't go poof. And it got spent by the State account apparently? I mean if the money -- I'm asking what would have happened to the money. The money would have stayed in the state account and been spent by the State account, right? >> It would have -- the money was actually -- it's kind of difficult to separate here, but the account was a parent account or common account that was shared of both the federal and nonfederal funds. >> I understood. I'm speaking about accounts and you're telling me -- don't think of these as two bank accounts, okay. >> But they were separated -- >> Money was stayed for the benefit of and was used by the state committee. >> Yes. >> Okay. I take it that the Utah democratic Committee reported all funds to the State account and all disbursements to the state of Utah? They report that. So we don't have failure to disclose donors here. We've got an accounting glitch essentially. >> Correct. >> That resulted in a misstatement of $90,000 on the FEC reports. >> Right. Yeah, it's shown on the reports. >> Thank you. >> Are there any other questions or comments? Commissioner -- question? >> There is a recommendation mimed on the Utah state democratic committee A13-ten. I move to approve the recommendations for findings one, three, four, and five as set forth in agenda document 16-02-A and approve the recommendation for finding two, recordkeeping for employees as set forth in agenda document 16 an 02-A, subject to an amendment to include $91,431.97 paid to contract workers. >> Just to check this will be the first of two motions as I understand it. Those nodding for those listening, we have a motion on the table. All those in favor say aye? >> Aye. >> Those opposed? >> No. >> No. >> Madam secretary that vote fails by a vote of three to three with commissioner's Ravel, Weintraub, and the vice chairman in favor and commissioner's goodman, hunter and myself opposed. Commissioner Weintraub. >> Just for those who might be listening and have no idea what's going on here, this is sort of a long-running issue for some of us that when we do these audits the state committees often have independent contractors that work for them and perform various functions that might otherwise be performed by their regular employees and those of us -- three of us believe that the contract workers should be covered by the recordkeeping requirements. That's why we continue to make these motions about contract workers. >> helpful clarification for those out there listening to this meeting. Vice chairman Walther, do we have a secondary motion. >> I move to approve the recommendations tore findings one, three, four, and five as set forth in agenda document 16-02-A. >> >> Commissioner Goodman. >> I'd like to propose an amendment to the pending motion. That is an edit to the final report. Everywhere the edit being everywhere there is a title to the finding for that the title be amended from receipt of eleven fund donations that exceed the limit to receipt of fund eleven donations that do not exceed the limit. And the reason for the speaking to the motion to amend, the reason for the amendment is because on Page 2 of the memorandum given to us by audit staff, they conclude in response to the DFAR the committee stated that it used the last in, first out accounting method and provided the accounting documentation requested by the audit \staff\staphment the audit staff verified that the commit's Levin accounting verified -- excuse me, verified the accounting and determined the committee did not exceed the Levin fund donation limit, the audit staff recommends that the commission find the committee did not exceed the limit. All I'm asking for is a clarification in the title of findings that wouldn't mislead there was an -- there were excessive contributions and that the titles reflect what we're finding. Q.Commissioner Weintraub. >> Can I perhaps make a friendly amendment to the friendly amendment. I didn't know this issue was going to be raised. I would want to take a closer look at that section of the audit report and perhaps talk to our auditors about it. Perhaps we could just call it receipt of Levin fund donations. >> I think that would be fine. I will accept that as amendment to my motion to commissioner Walther's motion. I believe we've exhausted our ability to amend motions but commissioner Walther if you will accept that amendment to your main motion I think we can proceed. >> I accept that motion that's fine. >> Madam secretary if I could summarize. Everywhere that there is a title to finding for we would change the title to say in receipt of Levin fund donation. >> My understanding that would be in the final audit report. >> Yes in the document for us and in the final approved audit report. >> I'm not sure that -- >> That's before us. >> The document before you is the document before you. So I think the add it would be incorporated into the proposed final audit report, not the current document before you. >> Oh, right. The document before me is the document before me. >> Correct. >> Yes. So could you state that for the secretary to help us clarify? >> Right. So the proposed edit by the commissioners would be adopted into the proposed final audit report. >> Thank you. >> And just for matter of clarification, the vice chairman's motion does not include finding two. I'm assuming that with that not being included within this motion that that -- the intention is that would they be get kicked to additional issues. >> Yeah, as always. >> Just for the benefit of the you hadders and everyone here to make sure that's the understand of the commission with respect to your -- oh, is it not? >> Correct me if I'm wrong but we would expand finding two to cover more the contract workers but there is an existing recommendation for the employees that we all agree are covered that they fail to maintain monthly payroll logs to document $62,000 worth of time. I think we want to agree on that. >> Okay. When it wasn't included in the motion, I wasn't quite sure what the intention was. So if -- >> I don't know whether we could have more amendments to the motion but we could -- >> I think it's working so far so I wouldn't mind another one. >> If commissioner Walther will accept my prior one we can start a whole new round of amendments to the main motion. >> Do you want to accept all of finding two at this point? >> I mean, I prefer to support that. >> Then I can just remove -- >> just incorporate finding two in there. >> without having to go through the rig madam secretary role, should we include figure two. >> As I understand it the motion would be then to approve findings one, two, three, four, and five subject to the in the final audit report changing the title for finding for to just receipt of eleven funds. >> Very good. >> Receipt of Levin fund donations is that the title? >> Yes. That's correct. >> Thank you. >> Are we ready to move to the vote? Do we have a motion on the table after that little bit of a ping pong match but I think we're in a better spot now. All those in favor say aye. >> Aye. >> Madam secretary, that motion passes by a vote of 6-0. >> That include the agenda for this meeting. Mr. staff director, do we have any management or demonstrative matters that need to be discussed? >> Mr. Chairman, we have no such matters. >> This meeting is adjourned. Copyright ©2016 Show/Hide Header Show/Hide Chat