This file contains archived live captions of the open meeting of the Federal Election Commission held on Decenber 01, 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. *** >> I hope everyone had a great thanks giving and that they're ready to enter into the homestretch this year with full head of steam and all your holiday preparations are going well. We will start with the motion regarding the late submitted documents. Mr. Vice chairman? >> I move to suspend the rules on the late submission of the following documents. Document agenda from 2016 legislative recommendation. >> Any discussion on that motion? If not all those in favor indicate by saying aye. Any opposed. Madame secretary, 6-0. First item on the agenda is the correction and approval of minutes. Four different sets of minutes. Mr. Vice chairman do we have a motion? >> I move to approve the meetings of September 15th, 2016, September 29, 2016, 16-64A, meeting of October 27th, 2016, agenda document 16-65A. November 17th, 2017. 16-66A. >> Any discussion on that motion? If not indicate by saying aye. Any opposed? Madame secretary that vote carries 6-0. Second item is the advisory opinion submitted by Christoph M. We discussed this last time. Is there anything -- any up-to-date information or anything further that the general counsel would like to present on this matter? >> There is none. Thank you. >> Okay. Thank you. Hearing none, open it up for any questions that anyone may have of council or any discussion that anyone may have? [Pause]. >> I don't know if anybody wants to speak to it at all. I'll just put my two cents in on this. This is an interesting, as I mentioned last time, this is -- was an interesting request, in that we're talking about how does the government contractor contribution ban apply to an entity that was not a common -- in common existence at the time that the regulation on the government contract ban was issued I believe in O G -- in the draft A it talks about how in 1977 I believe was the first date where a law was passed establishing the legal entities known as limited liability companies. I think that was the same year when our government contractor regulations were put into place and they've remained as such ever since. So it doesn't really -- our regulations do not contemplate what are the implications of a LLC being a government contractor and what implications does it have for the ban on a member in this case a single member of that LLC and looking at the, I think that this is a particularly, not necessarily an easy question. I think it can go either way. Some of the things that ultimately sway me in this case to support draft B is that the definition of federal contractor refers to the person who enters into the contract and in this case an LLC does have a separate legal existence. The LLC and the member or members are distinct as a matter of law. And even though a single member LLC is a disregarded entity for tax purposes it is still legally separate in terms of liabilities, debts and so forth. And so a single member LLC is not a sole proprietor and so in 115.5 which discusses individuals and sole proprietors who are federal contractors being prohibited from being -- from making contributions in connection with federal elections, a single member LLC doesn't neatly fit into that box and 115.6 which says if nothing prevents a stockholder officer or employee or members of a corporate associations, labor organizations or other groups, organizations from making contributions in connection with federal elections. It seems to me that an LLC, even if it is a single member LLC fits more into that box than it does in 115.5 and in some ways I -- the concerns that were expressed in the comments that were submitted about how this could potentially lead to some policy rules that -- That some don't approve of. I can understand those concerns and there may be a need in light of the fact of the evolving way in which the law has developed in terms of these new organizations. And the fact that it's been almost 40 years since we've looked at the federal contractor ban and the regulations whether or not there needs to be some clarification that I would be open to that and understand the concerns expressed. However, in terms of just looking at the actual language of the regs as they are currently drafted, I think that a single member LLC being a legally distinct entity where the member has its own liabilities. It is entering into the -- a contract with -- with the federal government. I think that places that organization into 115.6 and, therefore, since that says a member of an organization, which is a federal contractor may still contribute in connection with federal elections. I think that that analysis carries in this particular request and for that reason I'm going to be, I'll support draft B which is set forth an agenda document number 15-57-B anything further? Commissioner Weintraub. >> Thank you Mr. Chairman. I will say what I said before, you're elevating form over substance. I mean this is an anticorruption measure and to pretend that the sole member of a -- a single member LLC is -- can't be corrupted or corrupting actually in this case because the money is going through the LLC rather than out of the individual's personal checking account? I mean, that's just silly frankly. It doesn't make any sense. So I will, as I said last time I will be supporting revised draft A. >> Do we have any other comments, discussion? Do we have any motions? [Pause]. >> I move approval of agenda document number 16-57-A 1 which is described as revised draft A with respect to advisory opinion 16-20. >> Any discussion on that motion? If not all those in favor indicate by saying aye. Those a opposed? That fails by a motion of 3-3. Goodman, Hunter and myself opposed. Do we have another motion? Commissioner Hunter? >> I move approval of agenda document of agenda 16-57-B. >> Any discussion? All these indicate by saying aye. Those opposed. That motion fails by 3-3. Thank you. We'll turn next, oh, I should note that item three on our agenda which is the draft advisory opinion, great America PAC that is being held over until next week and be considered in the meeting of December 8th. So we'll turn to item four on the agenda which is set forth in the agenda document 16-55-A. We have the office of general council to give a presentation. Good morning to you and when you're ready please begin. >> Thank you Mr. Chairman and good morning, commissioners. Agenda item 16-55-A recommends amending the commissions direct to 52 regarding voting procedures. Under directive 52 matters requiring formal commission action have not been placed on a meeting agenda are circulated for a vote on a no objection ballot. The matters of no objection ballot are deemed approved unless the secretary's office receives them by the voting deadline. This currently allows no objection circulation of administrative fines reason to believe recommendations and final determinations in which the respondents do not challenge the reason to believe findings. Last year, the DC circuit in combat veterans for Congress PAC versus the federal election commission noted the procedure must comport with the requirement when the commission investigates reports of suspected violations. Including when it involves a missed deadline. Under current proposal directive 52 will be amended to no longer allow the matters on no objection ballots. Directive 52 would also be updated in several instances so that its procedures are formed to the current accepted voting practices and I will be happy to address any questions about the specific proposals. Thank you. >> Thank you for that presentation. Do we have any questions of council regarding the amendments to directive 52 or any discussion? [Pause]. >> Hearing none, do we have a motion? [Pause]. >> Mr. Chairman, I move approval of the let's see what the correct title is. This agenda document 16-55A. >> Any discussion on that motion? If not all those in favor indicate by saying aye. Any opposed. That motion carries by a vote of 6-0. Thank you. [Pause]. >> Next we'll turn to agenda item number five which is the proposed final report on the republican party. This was brought up last time and Commissioner Weintraub brought -- expressed some concerns about the procedural posture that we were in considering that this is a recommendation on a -- on the proposed final report typically the sorts of motions or edits that we were seeking typically take place at the audit division recommendation memorandum stage and so the way I understand it is that we will first have a motion to reconsider the vote with respect the audit recommendation memorandum on the Utah republican party which is set forth in 16-38-A and once we have that vote we can vote with respect to the recommendations as to the findings and as I understand it just at the outset, we will be able to approve the recommendations with respect to findings one through three and five through six and that we may have subsequent motions as to recommendation four which pertains to recordkeeping from employees. So that's kind of the roadmap of what we need to do in order to resolve this so do we have a motion to reconsider the vote with respect to the audit recommendation memorandum on the Utah republican party. >> I move to reconsider. >> Okay. Any discussion on that motion? Yes, Commissioner Weintraub. >> Thank you. I normally do not like to reconsider votes once they're taken in the interest of finality and doesn't come up very often. It has come up few times over the course of my tenure but given that this, the audit report itself isn't final yet, the same finality concerns that I usually have with reconsidering votes don't really pertain here so I support the motion which I do think is necessary since at an earlier stage the audit division made recommendations on findings and the commission adopted those findings so if we're going to unwind one of those findings I think we do need to sort of reconsider and go back. >> Okay. We have a motion on the table. Any further discussion? If not indicate by saying aye. Any opposed. That vote passes 6-0. Now that we reopened the matter do we have motions to specific findings? The ones that I think that have YUN namty and I don't want to speak to everybody on this but one through three and five through six there aren't any concerns. So perhaps we make a motion as to those findings. Commissioner Hunter. >> I move adoption of agenda document 16-62A approval of recommendations one, two, three, five, and six. >> Any discussion on that motion? If none, all those in favor indicate by saying aye. That carries by a vote of 6-0. Commissioner Weintraub? >> I move approval of finding number four. >> Is there any discussion on that motion? If there are none indicate by saying aye. Those opposed? >> No. >> No. >> That motion fails by a vote of 3-3 with goodman, Hunter and myself opposed do we have a further motion? From what I understand -- well, I think that there's -- I think there may be some agreement. The way I understand it, commissioner -- maybe I could ask -- the way I understand it is that there is some agreement as to portion of it. That we could approve the portion of the recommendation related to the 270,738 dollars that the commit TI tee disclosed as paid with federal and nonfederal funds. We can break that portion off. And agree with what was set forth. [Pause]. >> If I could ask council's office, just a procedural issue. We can approve a portion of -- finding four that I think we all had agreement. Should we as part of that same motion also direct the audit division to include in the proposed final audit report address the 5,504 dollars for nonfederal payments or should we split that off and have it as a separate motion and perhaps I should also ask my colleagues if they prefer that as a separate motion at all. >> It has to be all at once. >> I have a question about the number. So I'm looking at the blue document under finding four and it talks about 15,466 dollars for which payroll was exclusively paid with nonfederal funds I assume that's the -- >> Yeah. It's possible that the information -- that my numbers -- what is it? That's what I -- what page are you on? >> Page 14. >> 14? >> 504. >> Correct. The total -- on a nonfederal was 15,466 dollars but out of that 962 dollars was paid to nonfederal in addition to being paid from federal in the same month therefore number three on page 17, the 14,504 dollars that's when it's completely 100% nonfederal. >> Okay. So just to make sure that we're 100% clear 14504 is the number that should be part of the -- that will be the amount that will be kicked into the additional issues? >> Yes. >> Okay [Pause]. >> So is there any further discussion or questions or could we go forward with the motion? [Pause]. >> Do we have a motion. >> In the proposed report in this meeting it's agenda document 16-62A I move to approve the recommendation for the agenda document 16-62-A related to the 270,738 that the committee disclosed as having been paid with the allocation of federal and nonfederal funds and direct the audit division to include in a proposed final audit report an additional issue section addressing the 14,504 dollars for the nonfederal payments. [Pause]. >> Just to say, I believe a friendly amendment, I believe the document number that you referenced is the proposed final audit report and we're now operating from the aid did it division recommendation memorandum so as a friendly amendment I believe the reference should be agenda document number 16-38-A so -- is there any further discussion on that motion? If none, all those in favor indicate by saying aye. Aye. >> Aye. >> Aye. >> Those opposed? >> No. >> No. >> Okay. Madame secretary that vote carries by a vote of 4-2 with myself and Goodman in favor and Weintraub and Ravel opposed. Thank you very much. Turn now to item six which is the 2016 recommendations. [Pause]. >> All right. We have someone here to give us an overview of the recommendations that we'll be voting on and good morning to you and when you're ready please begin. >> Thank you Mr. Chairman and good morning, commissioners. Before you today are the draft legislative recommendations for 2016 and they reflect input from all of the commissioners and from staff throughout the agency. The thirteen recommendations for this year are electronic filing of senate reports. Electronic filing of electioneering communication reports. Authority to create SES commissions. Fraudulent authority. Making permanent the fines program. Increasing thresholds. Authority to accept gifts. Conversion of campaign funds. Permitting political committee to make dispersements other than by check increase the in-home event exemptions and unreimbursed exemption. Prohibiting fraudulent practices and updating citations fee KA and repealing some federal funding provisions. We recommend the commission approve these legislative recommendations so we may provide them to congress and the administration including our oversight committees of the committee of the house administration and the senate committee on rules and administration. Our appropriation subcommittees and our contacts. And finally I'd like to thank the commissioners and the FEC staff for their contributions to this document. Thank you. >> Thank you. Thank you for all of your efforts to put this together and to keep us on track to make sure that we could get this done before the end of the year and so thank you for all of your efforts and on this effort, so -- do we have any discussion? Commissioner Ravel. >> This is with respect to the recommendations themselves but to the time I've been here congress has never adopted any of our legislative recommendations and I'm just wondering what process you have to try to inform all of these committees and others of the content and why the commission deems them to be important? >> Well, I'll take the latter part of that first. I think the commission traditionally viewed it as important to address the commission's view as to what the state of the law should be not with standing the fact a number of the commissioners share the view that campaign finance is a tricky issue for congress to tackle. Mostly because there's a lot of reluctance to start down that path out of some concern about how far congress might go and just how many provisions would be thrown into the mix. So even though substantive changes to campaign finance law are a tough ask basically for the commission, I think a number of commissioners over the years have felt it important to express their views on what the substantive law should look like and use this as a vehicle to do that. And that also brings up the success that we have had with legislative recommendations over the years has been more for administrative issues like the admin fines program that multiple times the commission has recommended extending it and multiple times congress has and we also had an issue with conference program and needed a legislative solution for that. And we were able to get that. So issues like that we've had more success with and I would put some of these in that category. We have seen the recommendation on the general council and the staff director salary. We've seen that turned into legislative language which I think is significant progress to get it into their pond instead of our pond if you will of, when congressional staff are researching campaign issues the first place they start is bills that have been produced so once we're in that environment that's a significant step and we are there in the finance issue. And as our start process we start by providing it to the oversight committees of house administration and senate rules and administration. Every member gets a copy. And we, the chairman will be asked to sign a pile of letters later today to get that done. We also give them to our appropriation subcommittees and to the executive branch through OMB. Then over the course of the year, we'll get questions about our legislative recommendations and always provide when it's asked and the whole commissioners package. Other times we might get asked by either new staff or new members of an overview of the FEC and we're always sure to include the FEC legislative recommendations and finally we watch bills being introduced and as bills are being introduced either touch on a recommendation or are similar we are sure to point that out to the members offices and, again, share another copy of the legislative recommendations to let them know that the commission has expressed support for either exactly the same thing or sometimes similar ideas. And we've seen success there too where a proposal will expand to include other things that the commission has recommended. >> Thank you. >> Mr. Vice chairman. >> Thanks, in terms of where we find success and where we don't I agree it seems like we're not in the forefront of the agenda but who knows what is going to happen this year but maybe -- I want to know what issues come to us from ones that are directed to you or in other words, if you see an area where you think we might be effective legislatively, maybe we should set some time aside and see if there's some other areas and probe a bit and see if we can be a bit more effective in that area and maybe you can give some thought of how we do that if that seems appropriate. >> Absolutely. Particularly this year some of the new topics, I think there's bipartisan support here and a bipartisan recommendation on the Hill of problem areas. There's room for attraction there. >> Sounds good. >> Is there any further discussion on these? If none, do we have a motion? Mr. Vice chairman. >> I move to approve the legislative recommendations for 2016 prepared by our staff. >> Any discussion on that motion? If none, all those in favor indicate by saying aye. That carries by a motion of 6-0. That brings us to the 7th and last matter on our agenda, Mr. Palmer, do we have any administrative matters to discuss. >> There are no such matters. >> Hearing none. Meeting is adjourned.