This file contains archived live captions of the open meeting of the Federal Election Commission held on May 23, 2019. This file is not a transcript of the meeting, and it has not been reviewed for accuracy or approved by the Federal Election Commission.


>>> Good morning, Federal Electronics Commission for May 23 , will come to order. We have three things on the agenda, and, other than that, let me say a couple of things about the schedule before we get started. I am going to flip this around, we have Mr. Reynold here to talk about his AO request, so, we will probably call that a first, so he is not sitting around. The other draft advisory opinion, 2018 dash 12, defending the campaign, I am sure many people have heard --we resolved that on tally, the draft --the actual answer was made public yesterday or the day before. I would like to say couple of words about that, and I am really pleased that we were able to resolve it. Every member of the commission was very concerned about the issue of cyber security, and the needs of the campaigns and parties to protect themselves, we work very hard to find a place where we can land. I think that every commission would probably say that the result was not to the advisory opinion that any of us would have written individually, but, I thought it was a very productive exercise and us working very hard to find someplace in the middle that we all found if not ideal, then acceptable. I think it is a good result, I would like to thank all of my colleagues for their hard work on that, and I would like to think the chairman for his efforts to help us bring all of this together. Who knows? Maybe it will be the start of a new and more productive era, where exercising the muscles of compromise --maybe we will kind of get them a little bit stronger and be able to find common ground on a few more things. That would really be an excellent step forward for the commission. I think we have done something good, I am proud of it, and it will be a boon to campaigns and party committees throughout the country, and I hope that everyone takes advantage of the good services that will be made available, we did this in a way that --obviously, for me it was very important that cyber security not become a venue for opening up a new dark money loophole. I think the advisory opinion requires disclosure, and ensuring that the groups are going to be supporting the endeavor, themselves will not be dark money groups. I think it reaches a good result, like I said, not an ideal result from anyone's perspective, but this is a result that we can all be satisfied with and I am proud of the effort. I don't know if anyone has anything else that they would like to say about what we have already done, but, having said that, that is resolved, and, we no longer need to discuss it. So, when that we will go back to --we will do the minutes, and then we will discuss Federal Electronics Commission, and we have a a few words that I will say about the draft rule, which we will not be voting on today. I have comments. Mr. Vice Chairman? 

I will make two motions, the first is a vote that the commission may consider documents 18 dash 43 have been E, and 18 dais be --dash be. Is there >> Is there discussion on the motion? The motion passes unanimously. Vice Chairman again? 

Approval, the minutes for the meeting held on April 11, 2019, set forth agenda document 20 dash a. 

The Vice Chairman has moved for approval of the minutes, any discussion on the motion? I will call to question, all in favor say aye. The motion passes unanimously. The next item we will discuss his draft opinion 1905, I don't know if Mr. Engel would like to come on up again. We have had some revisions to the the request, and late yesterday, we put out a new draft answer. >> Counsel, do you have anything that you would like to say about the new request, or answer? It 

Yes, I will briefly go through the drafts. 

Thank you. >> Thank you, good morning commissioners, before you are agenda documents 19 dash 18 dash a. I'll --alternative draft for responding to draft from system 73, and incorporated communications technology network, the rest are asked that they may enter into a license agreement with a political committee for the exclusive rights to lifestream committee events. Requester initially proposed to pay political committees a license fee for lifestream rights, based on that information draft a concluded that the proposal would result in prohibited corporate contributions. Following the last meeting, they supplemented information saying they no longer plan to pay political committees as part of the proposed licensing agreements, in light of that supplemental material, draft be concludes that 73 is permissible because it is within the media exemption. We do not receive comments on the request, we received one comment on draft day from the requester. Thank you I would be happy to answer any questions you have. 

Thank you. Anybody have any comments, on the draft or any questions for counsel ? Or Mr. Engel? 

Thinking I am chair, I understand we need have a proposal that you are going to bring up, I wanted to see if Mr. Engel had any comments about the draft , as it was released yesterday, we did not have a lot of time, we apologize for that, I just wanted to get your immediate feedback on the questions or concerns that you have about that draft. 

Thank you. You know, early on in my career, I learned how to take yes for an answer. Just sit quietly, and wait for the vote --and, as tempted as I am to do that, I have just one comment to make. It is this, that the draft reaches the correct occlusion, --the correct conclusion, it notes and three or four advisory opinions, the authority that it cites talks about a company doing something for free. We hear are now also trying to do something for three. That is a match. So, they should also be approved. Free was not the point of the prior advisory opinions, it is a fact and is opinions, that, like the immediately provider suggested they were going to do, was something for free. It could have easily been 10 percent off, half-price, not marked up. Not to the retail amount. So, I just do not want free, which is a fact, to be confused with the law. Which is, are you engaged in legitimate media operations? Sometimes it may be free, sometimes it may not. Here it is a match on the facts, and the law, if the facts do not match, the law still might. >> I do --I appreciate the comment, I think that one issue that we were looking at with respect to -- how you have changed the request, so it does not involve licensing fees, as we discussed last time, they were of some concern to me, and I appreciate that. There is still a reference to the interactive services that are going to be available to the requester , and it is my understanding that based upon discussions that you have had with our counsel, that anything that is provided to the committees would be at fair market value, is that correct? 

That is right. 

Of course, that is standard underneath regulations, perfectly fine to provide things at fair market value. I -- we released this opinion, the latest blue draft, fairly late in the day yesterday. I do not know that anyone besides you would be moved to comment on it, but the public is not had a chance to see it very much, I personally, as you may know, was testifying on Capitol Hill yesterday, so I was out of pocket this week myself, and when I was reviewing the draft last night, I thought that some of the discussion of the old AO was confusing and could better be streamlined, so, I think that we may not actually vote on this, right now, we will read the results, I want to provide you with that comfort, I agree with the result, and I think that we may have a revised version of the latest draft, probably ready to go today, that we can make public, and get you in both the public a few days to review that, the 60 days runs to May 31. 

May 31. It 

We could vote on tally , I don't think it is necessary, but you are always welcome here Mr. Engel. I don't think it is necessary to have another meeting where we bring you back in. That, I believe is --given how late we got the blue draft out, I think that both for the purposes of making sure the public as a chance to actually see if anyone's interested, they have a chance to read it and see it, --I think I want to tweet some of the citations. 

May 31 would be fine. 

Does anyone else have any thing? 

I want to that not much more than what you said, other than I think we are heading down a productive path for the commission reaching a consensus position, that I think would be to you on your clients, liking, so --I am pleased to hear that we may be able to do this very quickly within the next few days. >> I hope we can clear this very soon. 

We are moving forward, I want to say, I think it is a credit to your representation of your clients that when you saw the issue that we had, rather trying to hammer home, you took a good look at how it could get done, and it could work. 

It is a nice thing for a client to have, person who can take a licking and make it work. 

I have always found Mr. Engel to be extremely cooperative, working with our staff, and helping them get complete results. 

Thank you. 

I support the draft as well. >> We will tweak the language a little bit, and give the public a little bit more time. Anything else? 

Not for me. 

For many of my colleagues? 

In that case, you will be hearing from you shortly, Mr. Engel. 

Thank you. >> The next item on the agenda is again, something we will not vote on. 

As I said at the outset of the meeting, the issue of cyber security is of deep concern, I think to every member of the commission. Based on what I was hearing, on Capitol Hill yesterday, it is a great concern to members of Congress, and, to focus in on other parts of the government, DHS, DOJ, DAC, obviously. They are thinking of ways to sure up our defenses of a nation, and as a democracy against cyber attacks. This proposal was another attempt to address that, I think that we have made a good step forward with D Seo, and providing a way for campaign committees to get access to cyber security services, but it may not --that may not solve the problem for everyone in the country. I don't think that there was ever any intent that that would be the sole source provider of cyber security services. Or, political actors and the country --obviously, these things can be expensive, and the question is always, how do campaigns pay for it? Will they pay for it if they feel that it is going to take away from their funds that they need to get their message out? This proposal is based on a Dell from Senator Wyden's office. It had widespread support, and I thought maybe we could do it here. I think that -- I proposed it as an interpretive bill, because I thought that was the fastest way to get it done. As my colleagues know, I am also interested in trying to move forward on a number of rulemaking fronts, including a rulemaking to address the segregated accounts that were set up underneath what we call crummy bus, which the commission is long overdue in addressing regulation, I am hoping we could do a rulemaking on that, and get it out this summer. I am looking forward to working with my colleagues on that, this could be folded into that, as, it is more appropriate for rulemaking context, rather than an interpretive rule, I respect that, as I said, the reason I proposed it as an interpretive rule is that it can be done quicker and can get the resources out there to the community quicker. A rulemaking --you know, if we had an NPR out this summer, for comments, we could have a hearing in the fall, and we would be lucky to get a rule by the end of the year, frankly. So, that would be a much longer range project, and even that would probably be a lot quicker than I would anticipate for legislation passing and getting signed into law on the hill, because they have their own problems with getting legislation done even on these important topics. I am looking for creative paths forward, and I appreciate the comments that we have gotten, we have had a couple of comments that came up at the hearing, and I will pass that along. We have had a couple of comments including a comment from someone that supported the widen bill that does not and -- support the interpretive rule, so we will have to sort through what that means, and I am sure that there are other people that want to chance to comment on the idea as well. As I said, I am looking for constructive and creative ways to help committees protect themselves. Anybody else who wants to suggest to the commission constructive and creative ways forward in that regard, I am happy to hear about it. 

I don't know if my colleagues have any comments they would like to make. >> One thing, I hate to do this, is to file something important for the hearing and have the public --what we did get to, was comments --one from democracy 21 or the campaign center, comments about how it would be illegal for us to try to contemplate going in this direction , unless the statute was to change, which of course, that still can be done, but we can find a position where we can actually we can use the building fund money solely for building, and , to use it for other purposes is a leap beyond what is reasonable. For example, one comment by democracy 21 says they allow parties to use the building fund accounts to find cyber security spending is not the way to do this, the proposed rule and what it could cause twists the lobby on recognition. I would agree with that. However, I can see that that does not mean that we should legalize it with an interpretive rule into the same thing. So, I see that the councils opinion or draft -- tries to accomplish it, but I don't think it is close to justifying going in that direction, so, there is a recommendation from this draft, that we can do it, but, it is certainly a huge sleep between where we would land with this. Those are just some thoughts. 

Thank you Commissioner, I appreciate that. I also appreciate that building funds have a long and checkered history. I was honestly surprised when Congress decided to bring back the concept of building funds after they had been abolished in BICRA, and I am not a fan of these funds, because the community raises a higher pot , Congress did that, Congress did provide the authority to the committees to raise money into these accounts. Then, the question is, what can they use them for? And, -- I appreciate the concern of folks that say it could be used for a variety of purposes, that are not related to the original, what statutes seem to contemplate. I think that when we get to the rulemaking, this is a concern that has been raised by some of the folks I commented on this, some of the same folks have commented on this, saying, what can be used for. [ Captioners transitioning ] 


Those concepts go together and it is hard to see what you can and cannot do. I do think this is a topic that obviously is one that is going to require comment and more thought and as I said people have more ideas about ways we can move forward. I am open to them and I am , do think it is long overdue for us to do that. To try and put out more comprehensive set of proposals and get the public with comment and it was , I told my colleagues I was thinking about this at the end of last week and we had a document that we [ Indiscernible ] so obviously that did not [ Indiscernible ]. Either inside the building rest of the building to give it much thought, but I don't, I want to say, I need to own this, I asked our counsel for assistance in putting together a proposal that would be based on the ideas that Senator [ Indiscernible ] and they were sensational and expert in the advice and I appreciate it particular Mr. [ Indiscernible ] turned around the document in record time and I very much appreciated. [ Indiscernible ]. I asked them to do it, so I need to own that. Mr. hunting , did you want to say something spec to the extent we will be able to make the overall fines in the future, I would ask my colleagues to work together to put something out public with working together before it is made public, as you know this one was made public before we were consulted, my understanding is your office voted with some help from the office of General Counsel because as you know, the office of General Counsel isn't able to write these types of things without agreement from the commissioners to drop something and so I don't want to go down a path of putting out guidance on the overall [ Indiscernible ] that doesn't have the support of the commission. I think it is going to be difficult to come up with a role that gets loads, in part because I think we look at it from a completely different perspective. The chair just noted you don't , you didn't like, you were surprised that Congress did this, and you weren't too wild about the fact that it was a lot of money. Spec something like that gets back Congress obviously has the authority to do that, they thought it was important to give the parties more money to do these certain things, and the money is disclosed, hard money. And so one minute we are worried about that many vanilla can see where it is coming from come here something that is hard money that is disclosed passed by Congress and it, [ Indiscernible ] and so to the extent some people are looking at it as the threshold is this is a bad thing and we need to as you pointed out some people may want it restricted others of us are probably going to be saying this is something Congress wanted to do, the underlying purpose of it was to strengthen the political parties because they were emasculated after [ Indiscernible ] and the money is now going to places where you guys don't like the dark money and all of the stuff that you talk about. I think it is a positive development, and I think that ideological disparity is going to make it hard to come up with [ Indiscernible ]. Again, want to be sensitive to making something blue that is either from a commission from one commissioner and clearly stated that way. Or from the commission as a whole. 

I appreciate that and I think it is no mistake that we are not going to do anything that doesn't have the support of the commissioners. There is no way for us to do anything that doesn't have the support I am talking about putting out documents. Spec commissioners can put out [ Indiscernible ]. >> Also another thing is you know we typically do , if we have two different competing versions, we have a draft and trap he said that is a way around it, I am not going to tell you can put out your days but if you do so I think it should be clearly stated that it is you idea, and it might be useful to put an idea a different idea in the same document. 

As I said, I am open to any ideas on this topic, was trying to build on the momentum that we had from [ Indiscernible ] and other ways of approaching the funding and I completely agree with you that Congress passed this law and there is no way for us to say as commissioners that they can't raise this money. They claim they can raise this money, this was an attempt to define what I thought was a constructive use of that money. We will hash this out in months to come. 

I am not actually talking about the subject of the proposal, [ Indiscernible ] what I'm saying is going forward you alluded to doing the rulemaking later this summer. I'm talking about back, I am saying let's get together and talk about what we might put forward to the public and tried to present a united front if we all agree on what the [ Indiscernible ] or if we don't then two different versions of it I am looking ahead. 

I completely agree with you that the [ Indiscernible ] which they are be careful what I say, we are not starting from scratch on that, there have been some discussion and I fully anticipate that I am hopeful that we can put out an NPR and later this summer and would fully assume that it will contain the input of all four commissioners. 

Absolutely. 

[ Indiscernible ] >> I just want to clear that I circulated a draft to my colleagues at the end of last week and asked if anybody had any feedback on that. If there is any confusion about this that was prepared . As opposed to [ Indiscernible ]. I apologize for that. 

I think , I know that you were going to [ Indiscernible ] I didn't feel like this draft, I had a chance to look at this draft I didn't feel like it was, I knew it was going to [ Indiscernible ] so and I will just say that on the larger issue of thinking of creatively about how to address this issue I think that's, I can put a line at the proposal that you brought forward and certainly that something we need to keep at the forefront of our minds going forward. Think of creative ways to address an issue that is obviously , here's you mentioned obviously a concern on Capitol Hill concerned with the American public so I am glad that that seems to be in and animating spirit and look forward to continuing those discussions. 

Thank you. 

Any other comments? If not, this is a topic that I'm sure you will be returning to. Mr. Palmer, and we have any management and a misted of matters, thank you. >> [ Indiscernible ] 

In this case, this meeting is adjourned.