This file contains archived live captions of the open meeting of the Federal Election Commission held on July 25, 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. The open meeting for Thursday, July 25 top-20 19 at the federal election commission will now come to order. I believe we have a motion top by stable. Agenda Document in order commission may consider late submission of agenda documents all in favor say IDEC? IDEC. Motion passes unanimously. I'm going to be pick up the schedule a little bit since we have a as an requesters. We'll take item one on the agenda at the end so as not to delay the requesters councils who are waiting, and there is also a change to the agenda item five.advisory up you know 2019, 14 will be held over for the next meeting. The requester has granted an extension and I think there will be maybe further development that will assist us in giving the requester the best possible answer. We would take that one up at the next meeting in August. The next item on the agenda is draft advisory opinion 2019 past for Congress. Mr.Pass on Tina if you would like to come to the table for any questions for you. Pleasure to have you. Mr. Paulson? Thank you, Chairwoman, a Commissioners. Before you 19-33-A Agenda Document 19-33-A, Draft Advisory Opinion responding for request Price for Congress. Principal can pick up the retired representative Mr. Thomas Price asks whether it may contribute Committee assess to non-profit organization, whether organization may engage in certain activities if those price will serve as President and CAL. Draft includes recipient organization qualifies as entity described in Section 170 C of Internal Revenue Code cost because requester represented organization operated non- profit entity for educational purpose, and it will not attempt to influence legislation or intervene in any political campaign on behalf of or in opposition to any candidate for public office. Because of the acting commission regulations permit donation of campaign fund to organizations described in 170 C of IRS code no Committee votes will be converted to personal use by Dr. Price or any other person. The draft concludes Committee may donated funds to the organization as proposed park we did not receive any comments on the request or on the draft. Thank you, and I am happy to address any questions you may have. I am going to ask you a question,, Mr. Paulson cost because I think that is what you said is not actually right. 170 C is limited too charitable organizations of charitable contributions qualified under 501(c)( 3) of the tax code. I believe this is an organization under five O one C four. This is an issue we looked into actually. While 170 C of the revenue code and 501(c)(3) have some overlapping qualifications, 170 C actually does not referencing reverence explicitly 501(c)(3). The only reference to 501(c)(3) and 170 C is one prong of the 170 C two criteria stating organization cannot be disqualified for tax exemption under 501(c)( 3) by reason of attempting to influence legislation or participating intervening in political campaigns, which this organization has represented it will not be doing. And we have noted in two prior advisory opinions, one that Section 170 see two and three have overlap qualifications but not synonymous. Another prior advisory opinion noted in footnote that other 501 C not 501(c)(3) are not necessarily disqualified from qualifying as 170 C organization. Do you have any authority from the IRS on this? We have now. We explicitly set in draft is is for purposes of our regulations, so we have been careful to not opine on text. The IRS's interpretation of the tax code. Got to tell you based on my experience in private practice I think that will come as a big surprise to a lot of practitioners to discover that 501 C four require under 170 C. That is not by understanding of the general understanding of the law to understand 170 C. And for that reason, I don't think that I am going to be able to support this advisory opinion, because I think it is an expansion of what we have said before about the personal use exemptions. It would expanded to 501 C for organizations, which I don't think the Commission has ever done b efore, and I'm just not comfortable doing that. Commission Hunter? Thank you, Mr. Paulson. That was an excellent answer, and I agree with you. The section of the law that we are considering here is 30114 A specifically State Committee uses include four contributions to organization described in 170 C of the Internal Revenue Code of 1976. Certainly Congress would have written 501(c)(3) organizations if that is exactly the only thing they were permitted to be used. So, are law, in particular, only says 170, and we just discussed why Level I C four in this context is preferably permissible not only under our Regs cost under Ian Jay, and alarm prior precedent it stand squarely within the same construct is under several advisory opinions that we have approved in the past including one recently from a Congressman, Tom Lantos, in the recent past. I don't see any distinction under the law in this case, any difference regarding whether or not they choose to be a C three or C four, which we discussed last night. I spent a lot of time last out thinking about that and there is no legal extension here. You may not like the reasons that I don't understand of allowing 501 C four to do this thing but no legal restriction that I can see to say no to this organization. Well, as I indicated, commission, I'm going to have too respectively disagree with you because as I said, based on my experience in practice, 170 C is not generally covered those considered to cover --to organizations. The AO you refer to, I suppose you could say is for former Congressman Lantos is about deceased Congressman Lantos' campaign funds. I don't think there were a lot of concerns in that case that he was going to be personally using the funds that were being transferred to a human rights organization in that case. Every other AO the Commission has issued that is relied upon in this draft of all 5013 see organizations organizations saying they were going to seek IRS approval as A5 O one C three. I don't think there is any examples of five O one C it's four here. What specifically is are you concerned with of the draft here of the facts that Mr. Prices Committee is asserting here? What is specifically are you concerned about because obviously we want to make sure there's no personal use with the campaign funds. Obviously that is against the law and as we have discussed specifically, they are allowed to use the money for 170 C, but there is also a catchall for any other lawful purpose. This is 301141 B prohibited by section B of the section. As long as it's not personal use it is permitted under our law, even if you decide for reasons I still don't fully understand that 501(c)4 is not okay. There is the catchall but one in particular about the request are you concerned about? What makes you think there will be personal benefit to Mr. Price as we have discussed? We have laid out the different things that requester has said specifically they won't do, looting the things that were just articulated by Mr. Paulson. I understand that you are displeased with my decision here, commissioner, but this is based on my understanding of the law. If we were to approve this advisory opinion it would extend the personal use exemption to 501(c)4 in a way the Commission has not done before, and I'm not willing to do it. What specifically is he saying he is going to do that makes you think's personal use? That can be problematic for a lot of people even if they are operating under 501(c)4, even if operating unauthorized cap a Committee. There are all kind of things going on doing speeches and all kinds of other --we will have a nail request in a few minutes that talks about approving campaign funds for babysitting services for a candidate who was paying for those services while she wasn't a candidate. I think we are going to say that's okay to do, but we're not going to say that it's okay apparently for Mr. Price to go out and talk about things, and specifically say that he's not going to use the funds to benefit himself. He's not going to get paid. 'S family members are not going to get paid. Is going to get some speeches but he is already said he is not going to do any of the things this commission has been historically concerned about in the past. So what specifically is he saying he's going to do you are concerned about? I'm concerned about see the person use expansion to 501(c)4 organizations, which were opaque and less restrictive than 501(c)(3) organizations and do not have to be operated exclusively for general purposes the way that 501(c)(3) organizations do. So, maybe Mr. Passantino can help us out here, but my understanding this is all campaign funds that are all disclosed and within the limits. Is that correct? That is correct. What we're talking about here is disposition of excess campaign funds. I think there is no dispute whatsoever that if the intended plan was to put these funds in a 501(c)(3) organization that this request would be required because it would be consistent with past activity. Where I think we are maybe looking in a different direction here is this body, the Commission's job is to look at the permitted use of excess campaign funds. The Act and the Rex Regs make very clear first of all they do not explicitly stated has to be 501(c)(3). The thing the Act and the Regs look at is what is the intended future use of these funds? Are these intended future use going to be for personal use or not? Here we are making a very, very clear that the intended future use is not going to be with respect to political activities, personal activities, we're lobbying activities. The very thing I think, Madam Chair, your concerned about. 170 Draft A though does permit an organization, fund being set up here, 501(c) 4 organization is perfectly permitted to do all of the things that were talking about here, under all of the things that this act and these regulations. The only thing this commission is concerned about, you are not getting us C three status or allowing tax deduction status. The only question is are we going to be using the funds consistent with the Act and the regulations, we're holding out entirely our intention to clearly, if we didn't well present completely different situation. The only thing that this commission should be looking at; therefore, as the staff, and we are in complete agreement with the staff analysis of that is if our activity is consistent with the acting Regs it qualifies as a permitted access disposition of excess campaign funds pick that is all we are intending to do. It should not be required that we go through all of the additional expense of creating a 501(c)(3) which is a much more difficult entity, and is not required by us here. We are intending to undertake all of the things that are required under the Act in the regulations, and so, for that reason that should be where the commissions analysis ends. As long as we are acting consistent with what the Act in the regulations say as we intend to do here. If Congress had intended for access disposition of funds or even if these Regs had said it must be 501(c)(3) entity would be very easy too so stay. It explicitly expanded into conduct which we intend to undertake. Too us that is the only real issue being presented here. That is the only issue before the Commission, and we are not asking for any type of expansion beyond the existing Regs. We are just looking for an application of the law as it stands now. Thank you, Madam Chair. Mr.Passantino, I'm not a tax lawyer but I have looked over the tax code a little bit and some of the --regulations on this point. The Be first ask a question to you. To 50 --to four to forgive contribution to 501(c)4 contribution under certain circumstances qualify for a charitable deduction? No, 501(c)4 organization by definition under the tax code cannot take a tax deduction from contribution to have A1-- 501(c)4 as I understand. Okay, and however a good 24 and it's activities can still function as a 501(c)(3)? >> Yes, --. And so, let me answer the question. That is precisely my point and I think you have articulated it very well. What we are looking at here is the use of the excess campaign funds. If at the use of the excess campaign funds is consistent with what is permitted by 173, it is permissible use of excess campaign funds. That is our goal, and you explicitly identify the issue park the vehicle or the vessel into which it's placed is not the relevant analysis. If it were it would be explicitly in the statute. It's the conduct to which of those but to be put to use that's relevant which we intend to use explicitly since it the Act in the regulation. That's the way I read 170 [Inaudible -static] six in title 26 as well that it's not the formal classification of the organization. It's the actual act remedies take organization to determine whether or not it falls within 170 C, and so, for me that is a pretty easy question. But even if we are going to assume for the sake of argument that a 501(c)4 doesn't qualify, and I think it does, that doesn't end of the question. As Commissioner Hunter just pointed out we still have the catchall provision in 3114 A six which talks about any other unlawful purpose. Now, let me as counsel, are you aware of any authority that says a donation of excess campaign funds to C four is an unlawful purpose? I am not aware of any. Dora Mike, nor am I aware of anything that would indicate otherwise, and if it's a lawful purpose in this is a purely personal use analysis. Now we have to look at, how is this money being used? The representations, and we the advisory pending context take the representations on their face. We don't pretend to look behind I think there might be something other going on because if there's a big other going on the protection of AO a were not extend to that. It only extends to representations that are request by the Commission. The way the representation is that the activities are going to be consistent with a 501(c)(3) park activities that they undertake that Mr. Price, nor his family, nor any former employees would be drawing any salary. They will be reimbursed for certain travel expenses or out- of-pocket expenses associated with travels as I understand. Is that correct? [Indiscernible -low audio] spirit those. This is not a guys also for him to travel those that they are actually going to produce research, and papers and speeches and maybe you can speak to that issue a little bit about some of the product that this organization plans to disseminate. Right, so this is a vehicle through which Dr. Price intends to continue a substantial amount of public policy analysis, not lobbying activity, but analysis of public policy, research speaking on various matters related to health policy, help budget issues continue a lot of the policy work that he continued, that he was engaged in after leaving the Congress, and it is fully and explicitly as you probably pointed out one of the conditions of our advisory opinion request that the use of these funds funds is going to be devoted to those specific activities and not towards political activity, not toward independent expenditure. And lots of things which a 501(c)4 organization or other types of organizations do we are explicitly going to be prohibited from doing all of those types of activities using these funds. It's explicitly as we put in our advisory opinion request going to be for policy research, analysis presentation of papers, speeches, on health policy a budget issues. So, in other words, same limitations that we're placed on former members who donated excess campaign funds to 501(c)(3) organizations we dealt the past advisory limitation that Mr. Price in his family of former employers would be operating under those same restrictions in this particular matter? Yes a week explicitly put in advisory been a request put in --such as Lantos and others which have already plowed this before. We are not intending to do anything in any way inconsistent with past device of the Commission with respect to all of those restrictions on personal use. We agree with that and explicitly put it in our request. Sure. I mean, really, the reference to the Lantos, Mr. Lantos is not going to be traveling at the expense of the human rights organization which was a 501(c)(3). As a result of the advisory opinion that the Commission granted since he was dead at the time the advisory opinion was granted. Dr. Price, I assume is anticipating that he will be traveling on behalf of this organization. It's possible, but that is really, and I am not really general that is explicitly permitted in other request, which is expenses incurred in connection with the direct duties of public policy activities of the organization. I visualize that there may be opportunities for Dr. Price might be speaking MIPS to go and speak with a respect to a matter that might be incidental costs incurred in connection with that for which we were talking about. I don't think the fact that Congressman Lantos was alive we're not alive doesn't effect the very sort of clear body of law. Whether he was going to be personally using the funds? No, I think what is important here is there is a long body, and we've started numerous advisory opinions of which that is one of the most recent most applicable examples of this commission having previously approved not as common as a personal use copy reimbursement of out-of-pocket expenses incurred in connection with the activities of the tax- exempt entity. And there are numerous advisory opinions which we have cited which staff are the principle. And I don't think we are plowing new ground here at all. All of the precedent that were cited in that they pertain to 501(c)(3) status. I understand that that is the key issue but I think once we get to the personal use issue whether it's 501(c)(3), 501(c)4 is completely irrelevant for purposes of if an individual not receiving compensation, not paying their families who is not in any way receiving numeration out of those campaign funds, if they are receiving reimbursement for expenses, it doesn't matter what the entity is. This commission has held several times that that is not an impermissible personal use of excess campaign funds pick that is the only principle for which this entire sort of body of advisory opinions which are long-standing, which are not controversial, which we intend to fully follow. That is a separate issue from whether the entity out of which that discussion arose was a 501(c)(3) or a 501(c)4 entity. They are two separate issues we're talking about here. Mr. Pass on to do. PEGA, Madam Chair. I really do think distinction between 501(c)(3) and 501(c)4 and whether or not, whether or not we think that A5 O one C -- 501(c)4 can still fit within the confines of an organization described in 170C of the Internal Revenue Code, like I said, I think it fits within it but even if we don't think it does, all we are determining is whether or not we need to invoke the of Section 114 or A six of Section 114. The analysis still comes down to personal use, and how is this money being used. Frankly, if it's impermissible for Mr. Price, and it's impermissible personal use for him to use his campaign funds in the ways proposed in this request, then it's also impermissible for those who have made similar requests under the guise of 501(c)(3) organization. I think the 501(c)(3) distinction, I think it's a red herring. Last, let me ask the Chair, do you believe it's a lawful donation that a campaign can make a donation to a C four? Is that a lawful purpose, a lawful disbursement of campaign funds? That's not the draft that we have in front of us. That is every bit relevant to this discussion we are having. The draft, the draft that we have in front of us says that you will treat a 501(c) 4 just like a 501(c)(3), and assume it's covered under 170C. Okay, about we have an alternative draft put together saying assuming for the sake of argument that it doesn't qualify under to about three, that were not going to treated like a 501(c)(3). It's going to be purely analysis of lawful, whether or not this is lawful purpose to make a contribution to use excessive campaign funds and give those to the organization. And then we are going to analyze whether or not that is a personal use. Is that a lawful disbursement? It could be, but that is not what is in front of us right now. I certainly hope it is because you would be telling a lot of members of Congress to make a lot of contributions given to ACLU which is a C4, that's given to NAACP which is a C4, so I think unless we are willing to say that dozens, maybe hundreds of members of Congress have made unlawful contributions to [Inaudible - static] one organization --C4 organization the question then turns to, is this a personal use. If you are saying it's personal use under the circumstances than you are saying there is no meaningful distinction between this and prior AOs, many of which, most of which may better cited you've voted for. So what about the actual use of the funds being proposed by Dr. Price constitutes personal use? Just to correct, I think most of the AOs there we're cited we're before my time. There were a number of old ones that a couple of more recent ones. Oh five, zero six, McInnis. Yes, I was here for that. You were here for Lantos. I was ever Lantos. Lantos, there's really no issue that Lantos was going to be using the funds for personal use. It just was not realistic. Last time I looked I don't think that was a relevant factor in the analysis we put related to t hat. Well, in the bottom-line issue was whether the member of Congress or the former member of Congress is going to be personally using the funds, the fact that his dad is kind of relevant, that will have to go back and double check, but I don't think that any of the prior precedent involved organizations that were personal vehicles for the Former Member. I could be wrong about that you have to go back and look. I will ask -- counsel. Can you give us some of the factual descriptions of the advisory opinions that were cited in the draft Rex. I should say draft. The draft that has been made --this far. Yes, give me a moment. >> So, in the 1983 draft, were 1983 opinion McDaniel, in that case, McDaniel was an unsuccessful candidate for U.S. house in 1982. He had, I believe he recently formed a 501(c)( 3) organization that was going to educate the public on defense issues. It was going to serve as Chairman of the Board of Directors. Chairman of the Board of Directors. And will not be compensated for his services. Would be compensated for out-of- pocket expenditures. Lantos, we have discussed in that case Congressman Lantos was recently deceased. In the case of A2 thousand f ive-zero six, Mekinist, former representative McInnis wanted to donate campaign funds to 501(c)(3) conservation group but he did not serve on the Board Board of Directors. He did not have any financial interest or control over the organization in that case. In 1997, AO 1997-zero one tunnel, in that case requester and Mr. Bevil was a former member of Congress. He donated to an organization that don't have [Pause] the purpose in front of me but that is an organization that would have been controlled by Mr. Bevil, the starter, his wife, in-service directors. Those were several of the opinions lined up. We might also want to add 199640 Hancock, one explicitly created to permit the former President Chairman of the Board, which stands for proposition it was permitted so long as Hancock was prohibited from receiving salary of directors fees. And I think that the also a relevant point here is it's not necessarily just the individual, but this personal use extension extends to family of former m embers, so the fact whether the candidate --itself is alive is not relevant to this analysis because prohibition on personal -- extends to family who can survive the candidate, him or herself as well. So we have a, we have a pretty got you know a decent list indicating that per case is whether Chairman of Board of directors, with the President, whether they were Board of directors in the case of I think Bevil, they weren't just given the money and walking away. They were involved in a substantial way, maybe perhaps in control of the group itself. I don't think that the role in which Mr. Price is looking to play in this proposed C4 is much different than we have seen several prior advisory comments. So, again, I am still unsure of why we should treat this circumstance any different with the use of the funds is going to be under the same restrictions that those prior AOs required. Thank you, Mr. Vice- Chairman, and thank you, Council, and I appreciate that you have refreshed my recollection in some of the older AOs, none of the ones ever to four. So you disagree with those? Well, I would have to think about whether I think it is an appropriate use of funds whether there's potential for personal use there, particularly and context of 501(c)4 not 501(c)(3), those are all 501(c)(3)'s. I will be happy to consider that, that is at the data in front of us. I was a C4? Just for the data in front of u s, respectfully, I think is wrong of the law. I'm somewhat baffled. What is the difference between C-3 and C4? For purpose of personal use analysis, we have representation from counsel. We are acting if somehow they c an --C4 can engage a broader range of activity including lobbying and political intervention. But that is somehow affects the personal use analysis. I mean I am absolutely at a loss as to how that is relevant were making a personal use analysis under 3114 B. I'm still not hearing an answer. Understand there is a difference between the groups and maybe that has a relevant to you in terms of whether if it's under 43 of 114. We can agree to disagree on that, but they're still is A six, a catchall provision, lawful purpose to get to C4. Now we are back looking purely as to whether or not that is a personal use of campaign funds. And whether it's C-3 or C4, I am completely at a loss as to how that is relevant to the same activities performed, and the same leadership responsibilities that Former Member performed for C-3, why that is f ine, but we'll be impermissible with respect to see for. --to C4. Greater restrictions in the law and activities then save for 501(c)(3) organization. Relevant to put --personal use how? I get it you disagree. I don't know to disagree. I'm not hearing rationale as why that's a distinction of anyway. Because C4's can engage in what a of activity. They have been involved in any number of problematic situations under the campaign finance laws in my experience, and I am not going to extend what the Commission has previously said, that is what this tale would. It completely glosses over the difference between C-3's and C4. And I had read it a little bit differently. I thought what you were saying was that since they are going to act like a C-3 we can can treat them like a C-3. What I hear counsel sang at the table today is that they think it is, in fact, covered by 170 C, and I do not believe that is generally the view of the legal community that 501(c)4 organizations are encompassed under the provisions under 170C. That is maybe some tax lawyers will educate me on that point, but based on my experience in practice before I came to the Commission, that was not my understanding of the law, and so this opinion would, is, I believe, based on an erroneous explanation of the law, so I can't support it for that reason alone, and would additionally extend what we have said previously about the scope of that particular provision of, I always think of it under 439 A, under the old codification, but I think it is 30114. And the Commission regulations, so. Better Care, simply because we're talking about my representations here I would like to clarify for the record. What we are saying is that we intend to conduct activity consistent with 170C as the statute requires. There's no dispute 501(c) 4 entity is entitled to all of those things. We are not saying that a 501(c)4 organization is going to take a tax deduction or anything. Only issue here is we intend to use are funds in a way consistent with the statute with the regulations. You intend to do that and 501(c)4 has every ability to do that that 501(c)(3) does. If Congress intended to limit to 501(c)(3) it could have. It didn't. We're stuck we cannot rewrite what the statute says. The statute says if we intend to conduct or behavior consistent with the law and not engage in personal use that it is permissible, that is all we are asking, that is all we intend to do. If I vote for this AO, every 501(c)4 organization out there is going, or anyone who wants to establish a 501(c)4 organization is going to go for protection under this AO. Madam Chair, I mean, we tried this many different times but let me try this will more time. Mr.Passantino have said, and we of all repeated that in the request they said that the organization will serve an educational purpose related to health, budget and other public policy matters is on page 5 of the draft, and will not attempt to influence legislation or participate or intervene in any political campaign on behalf of or in opposition to any candidate for public office, consistent with limitations set forth in section 170C. Mr.Passantino said numerous times this morning that is directly in the representations from counsel and also in the draft before us today. What specifically are you concerned that Mr. Price may do that may constitute personal use? Because he's already carved out what I think you are saying is the type of things-to worry-about (c)4's can do which is the political stuff. He's already said he's not going to do that so what specifically are you concerned about? Specifically concerned we were broadened the scope for exemption for personal use exemption organizations under 501(c)4. But we're not doing that. Guess we are. But we not because what we are say they our 501(c)4 but we are specifically saying this advisory opinion, as we discussed numerous times over the years, it will only be other people well only be able to rely on it if the facts are materially indistinguishable. You know what I'm saying. I certainly do. If a 501(c)4 comes along and says we are going to participate in political campaign activity, et cetera, that they cannot rely on this opinion. Then they would probably be okay under A six, a catchall. But putting that aside for minute it's not opening up to all 501(c)4's, only those that make the same representations. Again I'm willing to go up other and say as long as it's for any other lawful purpose of trying to what specifically in this request are you concerned about that Mr. Price may do? Asked and answered, commission. Actually go you never answered it. That's what you say get you ask a question. I will say again and if I did not hear it I apologize. Go ahead and say it again. I'm not going to vote for this, okay, so there's no reason. I am not going to vote for this. I view it as an extension of the exemption under the personal use restrictions, and I am not about that. You are not about that, okay. One of the things you said that is completely arbitrary and capricious in my opinion, would you said earlier was that 501(c)4's are generally more opaque Rick I don't know what you mean by that, because while (c)3's do not disclose their donors neither do (c)3's. I don't know how 501(c)4 is more opaque than 1011. Your right to enforce more opaque with a engage in political activity and [Indiscernible -low audio]. Maybe you should write a rule that says general. I wouldn't vote for it. I wouldn't vote for it. Why bother. You don't like (c) 4 because about engage in political activity. That is a barely what this is all about that a gives you an unsettling feeling, it's not appropriate and you are not Sirte why but you like to once. So you will read out any possibility for people to engage in the kind of activity that is protected, and there is no legal rationale for not agree. We just read the law differently. Yes, we do often read the law differently, but in this case I am not even hearing a reason for your reading of the law Rick and Peterson and I have tried numerous times. There is not apparently a reason, but, Mr. Passantino, I understand why you submitted this request, and as a well- known ethics lawyer you want to be very careful and it makes a lot of sense, but I am not sure that you really need it, and I don't know, we could take another run at a draft that and I don't know --at the but it that saying it's okay under the personal use provision. Sort of going through A, going into A6 saying any other lawful purpose. With that be I don't want to waste anyone's time but would that be something that would be interested in voting on if we as counsel to take a craft --a quick of that, of the? I will consider it but I'm not going to make any [Indiscernible -low audio]. I look operate in that process but why we are sitting here, what I believe and don't want to speak for anyone but I think up-C the disconnect here in that there is a concern that the Chair has with respect to various permitted activities by 501(c)4 entities such as independent expenditures, various influence type activities for which there is not the same disclosure that a political Committee has that if in fact there were to be an expansion of the rule that would allow candidates to go into committees or funds that would do is those things that I will be something with the Chair sees as problematic. That is not the impact of what we are seeking here, because we are specifically exempting all of those types of activities that the Chair is most concerned about with respect to the activity of 501(c)4's. That said, because of the profile of my client, and with respect to sort of the outside round noise that comes with respect to anything that anyone does who has been associated with the current administration, I have to do this but I can't just say I will see you in court because that will caused by client a whole lot more money. I believe there were be absolutely know concern by this commission if we were to set up A5 O one C three and did all of the things. Let's pick one. It's a 501(c)(3). There's no dispute I could set up an organization and do everything that you do does pick we are not seeking to do that that. We are seeking to know go through 501(c)(3) process but engage in those saying activities, but I will work with the Commission. I'm in full agreement with you the lawful purpose test is the beginning and the end of all of this but we did everything we could to craft the opinion to fit squarely within existing precedent on the ground, but I need to get, I intend to work with you to get some approved mechanism to allow us to engage in this very clear conduct that lots of folks engaged in and is in public interest to engage in. So, I will work with you and the Commission if we need to rework to take out the 170C analysis and leave this tool also --lawful use, we will work on that. Thank you. [Pause] What is the deadline on this advisory opinion request, Mr. Paulson? August 5th. What will be the best way to proceed logistics, from a logistic standpoint? I think the best way to proceed at this point will be to request an extension from the requester to at least get us through the next meeting. If we want to look at an alternative graph that goes to the analysis we discussed today. And we would consent to that. Because we have had such a robust discussion, that's a good word to describe it. It's possible that we may be able to do this on telephone. We may not. I'm just putting it out as a possibility of people our comfortable. There's a little bit of a gap between this meeting in the next open meeting, but if we need to have another public discussion where I am sure we're all willing to do so. One last thing and I think you said this in your opening. This draft went public on J uly 17th. So, is that about a week ago? That is correct. And I think you said we did not receive any public comments. That is also correct. Okay, and that telling a lot of people read our draft and it was out there this time for good amount of time top we did not receive any comments on it. People will --people we're coming to me on the Internet. On on the Internet? On the Internet? Where they commenting on the Internet? There was a little bit of chatter on this AO and on Twitter. That was? Since I'm not on Twitter [Indiscernible -low audio]. The draft couple our wrong wrong. Who said that? I would have to go back and look at the individual. It was some kind of backup or pick it wasn't --but I think it was a back-and-forth to 15. Are you aware of who the Chair is talking about? I don't remember the name I'm sorry. I think that there was some discussion on Rick Howson's blog, a very short post that I saw but I did not follow all of it. What was the reasoning the person said the draft got it wrong? There was a discussion, I believe, and I am not sure if we are talking about the same tweet but I believe there was a discussion about Trenton whether it applied to 501(c)(3) or 501(c)4 Scott and I believe Rick updated his post to say, I believe the draft is relying on representations about operating as a 501(c)(3), but I would have to look at it again I know it was back-and-forth. I saw it as well. Thank you Madam Chair. Commissioner Hunter, I don't know if you have made this explicit request, but I think she was indicating in the event you did make the explicit request if we could as counsel to prepare an appropriate draft that analyzes this question to the lands of section 3114 A6 under lawful purpose, and so that we don't get caught in the whether or not a (c)4 can sit with an confines of 170C, as potential compromise. If you can prepare potential draft we can review and then review to see if we can find some sort of consensus on that. Thank you, would also like to keep this draft on the public record, and I will work with my colleagues, maybe we can garner four boats for this one because I think it's 100 on all four's with the law, the Regs, and the precedent. Again, maybe we can convince people. I will go back up and I guess re-treated or because I did not know that was part of public record but take a look at that kind of stuff, and use the one you are going to prepare as an alternate draft. Maybe we can agree on this one after all. I would not based on this request discussion, I am not sure why you think this draft would end up getting four boats, but I am happy to consider. I don't want to beat a dead horse but because I still have not heard the reason between the difference between (c)3 and --'s, I haven't heard specifically in the request you are concerned about that it would be permissible. With of us asked numerous times and maybe you will have a chance to think about it. We've had a lot going on in Executive Sessions the past couple of weeks and have been trying to get some things off of the docket, so, maybe people have more time to focus on this issue. Thank you. So, as I understand it there is not a desire to take a vote on this today. And I believe we will take this up again on paper or, perhaps, at the next meeting based on counsel's granting of an extension, so the story goes on. Thank you, Mr. Paulson. Thank you, Mr. Passantino. Next item on the agenda is Draft 2019-11 Advisory Opinion 2019-11pro-life candidate PAC. Do we have counsel? Mr. Lupfer? Jacob Lupfer. I'm not an election lawyer, just a humble political consultant, clarity on this body on the matter presented. You are welcome, sir. You don't want to talk about the this one? I'm pretty much on Twitter. Thank you, Chair Weintraub and, , Commissioners but before you is a document --and draft of been responded to QUEST from pro-life Democratic candidate PAC non-connected political Committee. The requester asked whether it m ay --full contributions earmarked for a nine Democratic presidential candidate who meet certain specified endorsement and experienced criteria with at it's help making a contribution to the recipient of funds. The Committee further asks whether it may designate a specific Congressional Candidate Committee as the default recipient in the event no presidential candidate meets the criteria, whether it must instead offer refunds if that occurs. The draft concludes that all contributions to the draft fund would be a truth true table only to original contributors not to the Committee, because Committee exercises no direction or control over the choice of the recipient of funds given the objective is determinable criteria specified. The draft for the concludes it's permissible for the Committee to designate a specific Congressional Candidate Committee to serve as default recipient instead of offering refunds if no presidential candidate meets the criteria to receive the earmarked c ontributions, because it is lawful for conduit 24 contributions to default recipient of the conduit it does identifies contributors the time contribution is made. We receive one comment on the request. We do not receive any comments of the data. Thank you, and I would be happy to address any questions you may have. Do we have any questions for counsel, Mr. Lupfer, for d iscussion? Anybody God anything? I think the tanks may be on empty. The fuel light maybe on. Maybe. I intend to support the draft pick up ticket is consistent with prior advisory opinions come particularly with, I think it was advisory 2 019-one. Yes, it starts today. Very similar advisory opinion. I think you've got objective criteria, endorsement and qualifications. The qualifications are fairly ascertainable facts, so, I intend to support the draft. Mr.Vice-Chairman quick. They can call Madam Chair. I agree. I think this is on four's with advisory opinions we have issued, and I don't have any concerns with it. I don't know if there is anything you wanted to speak to since you made the trip in, if there are any comments you want to make about the draft or? No, I just thought not just on behalf of this client of mine, but just in general, since the nature of the draft fund seems to me, so often it's just have to be dealt, the draft is one particular person. Even in the Act blue opinion from some years ago that was cited, it was a woman for President draft fund, but the woman for President was if the 2016 nomination be a woman, so there is only one person who that was going to be. In this case, I thought since it introduces some kind of different sets of criteria that if in the future others have the intent to do a draft fund that was this creative or innovative that they may also benefit from the clarity of the opinion. That was part of the rationale, so, thank you. Any other discussion? If not I will entertain a motion. Happy to make a motion. Mr. Vice-Chairman? Thank you, Madam Chairman consideration of opinion 2019- 11, submitted by pro-life Democratic candidate PAC by Jacob Lupfer comparable of Agenda 19-35-A Document 19-35-A. Bitium 19-35-A approval of 19-35-A--and should be approved would become advisory opinion 2 019-11. Any discussion on the motion? If not I will call the question. Allin favor say IDEC? IDEC. IDEC. The motion carried unanimously. --Aye. Who knows, maybe we will be a little bit . The next item on the agenda is draft 2019-10 advisory opinion --opinion 2019-10Mary Jennings Hegar and MJ for Texas. We have counsel with us. Welcome. It's always nice to see you. The morning, Commissioners. Good morning. Mr. Not to are you presenting this morning? And D. Thank you, Madam Chair, a good morning, Commissioners. Before he was draft advisory opinion responding to request from Senate candidate MJ Hagar enter campaign Committee. The request asks whether the Committee may use campaign funds to pay for child care expenses for the candidates young children during her campaign. The draft concludes the Committee may pay for child care expenses that are the direct result of campaign activity, therefore, would not exist irrespective of the candidates campaign. The Commission received one comment on the request, and no comments on the draft. Thank you. Thank you. I particularly like this advisory opinion. It's where we get an advisory opinion with the candidates opponent submits a comment supporting the candidates request, so, were bringing Texas together on this advisory opinion. And I think it is completely consistent with, particularly the recent opinion that we granted to --for Congress in 2018-zero six because it was going to be limited to the child care expenses at or a direct result of campaign activity. So, I think, I appreciate the request. I think it well, a request like this will help to enable a wider diverse and if candidates to consider running for office, more women, more people with limited income, those are all good policy goals. But as I said, is consistent with our prior precedent. I plan to support it. Any comments on Twitter on this one? You know, I didn't notice. Okay. Do you have any comments, Commissioner? I do, but I probably, the mythic about whether or not I'm going to say it. Not right now. Okay. Anybody else have any comments? If not I will entertain a motion. Thank you, Mr. Vice-Chairman. That during consideration of draft opinion 2019-13, Mary Jennings Hegar and MJ for Texas, I move approval of Agenda Document 19-31-A Number 19-31-A, which is being referred to as draft a. 19-31-A For document 19-31- Aof, slight revision of original Draft A, and should be adopted we'll become advisory opinion 2019-13 to Mary Jennings Hegar and MJ for Texas. Do you want to say anything? Since you are here counsel, you had two lawyers here and can speak work. We support the draft and think you are absolutely right and appreciate the Commission approving it. Thank you. Any other discussion? If not I will call the question. Allin favor say, Aye. Aye. Aye. The motion passes unanimously. Thank you counsel and thank you counsel. So the next item was the Arizona Libertarian Party, but at the onset we're going to hold that one for the next meeting. And that brings us to a notification of availability for our e. g. 2019-zero one. Mr. Buckley? Thank you, Chairwoman, the morning the Commissioners. A Jr. document --draft availability for petition for rulemaking submitted to commission by say, -- Inc., PAC Inc. and make the laws Inc. The petition asks the Commission to amend 11 CFR Part 100 subpart B by adding new Section 100.57 to clarify the definition of contribution includes certain valuable information. The notification seeks comment on whether the Commission shall commence rulemaking based on this position. Comment period well run 60 days following publication of notification in the Federal Register. After the comment period has concluded and after comments have been consider, commission may decide whether to initiate a rulemaking. I'm happy to answer any questions you may have. Thank you, Mr. Buckley. Do we have any comments or questions? It's an interesting petition. We may well get some interesting comments. If there is no discussion I will entertain a motion. Mr.Vice-Chairman quick. Thank you, 19-31-A 19-31-A Medicare. I move in our consideration of notice availability for our e.g. 2019-zero one adding valuable information to the definition of contribution that we improve Agenda Document number 19-31-A 19-31-Atodo. Vice-Chairman approved Notice of Availability for our e.g. 2 019-zero one and valuable information to the definition of contribution. Any discussion on the motion? If not, I will call question, all in favor say Aye. Aye. Aye. Motion passes unanimously. Thank you, Mr. Buckley. Next item on the agenda is the Audit Division Recommendation Memorandum on Ambulatory Surgery Center Association PAC, --. I like the sound of A17-08 that, A17-08. Good morning, staff is coming up here. They had a question come up prior to the meeting that they were reviewing. But I can give the intro. Thank you, Ms. Toma. Absolutely. Good morning, Commissioners before you is -- recommendation memorandum on ask IPAC of the Ambulatory Surgery Center Association BIC. There are five findings outlined in this report. Finding number one the statement of financial activity. Finding two, receipt of prohibited contributions. Finding three, record-keeping for receipts. Finding four, disclosure of receipts. Finding five, untimely deposit of receipts. And as always, we are available to answer any questions that you may have, and additionally, were just waiting for one other individual who was researching something and she will be here momentarily. But if we have questions, we certainly can't entertain those as of this point. Other any questions, Mr. Vice Chair? Yes, they could call better Chair. My staff has been in contact with members of the audit staff about findings two, and it was mainly just a little bit of clarification I needed. This is --contribution. On page 11 under the heading of, contributions categorized permissible, I was having a little bit of a difficult time just following. There is a lot of numbers being floated around and I wasn't sure which one fitted into which categories, because of the very beginning at talks about a SCAP s ay -- ASCA pack that --was permissible of breaks that down into $37,000 in change $5500, do we have another paragraph will be break down the numbers further. I was having a little difficulty following. Absolutely, and I would want to highlight as well, sir, on page 11 you are referring too, that is the actual draft final audit report, which was submitted to ASCAPAC on 15, 2019. It's in the memo itself and we break down some of those items that you have questions about. Can I ask a point of clarification. It was my understanding that usually when we adopt and Audit Division Recommendation Memorandum and there is a draft, a draft final audit report attached to it that becomes the proposed final audit report and, ultimately the final audit report in our cumbersome process, but it's my understanding that there was further information that was provided by the Committee after the drafting of this report. So, I think some of the numbers are going to change by the time we get to the finding. That's what's outlined in the actual a DRM as per directives 70, so that is outlined in pages one through four, as per process. Correct. Maybe I could a sk. Mr. Reminsky? Yes, if you could walk us first on numbers pertaining to the funding of number two. Just to make sure that we are all clear on, I just want to make sure that I understand the numbers as presented by the Committee that is being audited, what the auditors determinations were with respect to those amounts to make sure that I am crystal crystal-clear before we vote on this. Okay, so on page 11 Section D, that first number for the contributions categorized as permissible, 43,120 $4, that was about a Committee stated in narrative that was permissible. And then they for the broke that down to $37,621 from eligible with a cold eligible LLC with a corporate Partner. In which they said it correctly is allowable as long as no part of the contribution is attributed to the Corporation. And then the other $5500 were received from LOC partnerships that I don't have a Partner. When audit then looked at the documentation provided, there was only $26,649 documented in that category, the Committee actually submitted a PDF titled eligible corporate contributions. Of that $26,649, 60,070 $4 were from LOC's that were owned by another LLC, and her corporate Partner. We had no documentation submitted showing the tax status of the LLC partners for any documentation that showed that the contribution was not in any part made by the corporate Partner. And then 500 of that was for one LOP on by on by one --to do corporate partners in tardive of corporate entities therefore permissible. $1500 was from an LLC that elected to be taxed as partnership with the IRS, but since document provided stated partners did know the contribution had been made in their name, that stays impermissible. And then the remaining $8575 the audit staff found that was in the permissible. So, with respect to the $16,074 number, this potentially could be permissible, but there was no information provided indicating that the allocation between the partners was in such a way that none of the corporate partners we're making a contribution? Correct. Okay, so, they could potentially be permissible but they just didn't get the information in order to allow you to make that conclusion? That is correct. Okay. >> [Pause] Madam Chair, with that clarification and, thank you, a gain. I know you have been speaking with my staff offline, and in an effort to try to get to the bottom of this as well, I appreciate all of your effort and the helpfulness you provided. I think that that satisfies and happy to make the motion at the appropriate time. Okay, anybody else have any questions, comments, concerns? I had already voted in favor of this, so, my concerns have been addressed. I think it sounds like we are indeed ready for a motion. Mr. Vice Chair? Become editor. In our consideration of recommendation memorandum on ambulatory surgery center Association PA sick which is a SCAP AC 1708 I approve 19-34-A --approval of 19-34-A. Vice-Chairman has A17-08 moved approval of Audit Division Recommendation Memorandum on ambulatory surgery a SCAP AC A17-08as set forth 19-34-A in document 19-34-A. If not I we call the question. All in favor say Aye. Aye. Aye. Carries unanimously. That leaves us back at the beginning with the Internet a dissolution rulemaking proposal for REG 2011-02. Communication disclaimers Definition of Public Communication which is REG 2011- 02, because we actually started this in 2011. It sort of languished until 2017, and then I tried too jump- start it again. We had hearings about a year ago, more than a year ago. We have had hundreds of thousands of comments asking us to do this, to do this rulemaking. I think it's an opportunity to provide both flexibility and clarity in an increasingly important aspect of political activity. It was 2060% increase in digital ads from the 2014 midterms to the 20 sound -- 2018 midterm elections. Spending on digital ads have roughly been in the billion- dollar range for digital political ads. And more and more activity is moving online from traditional forms of advertising. And I think this is something that we really should address. We've had small group meetings. We've had Greg's Committee meetings. I have had it on the agenda three times now. And the Vice-Chairman keeps telling me that he sees a path for. Mr.Vice Chairman --Mr. Vice- Chairman do you have the but -- Pat Ford for us today. I can't have about four but I know my staff spoke with your staff I think a length last night to go through some of the issues that have been question marks. I think, not to say this is an exhaustive list, but one of the issues have been a provision that deals with transferability of disclaimers, but I think we had earlier raised questions about, let's say there is a Facebook post and somehow gets screenshot, put on Twitter. How does that transferability work? I think that there's been a proposal made that makes, the provide useful clarification that that's talking about transferability within the platform itself, so I thought that was helpful. Their still are some I think outstanding issues on how the trigger would work. I think the the new proposal in which of the addresses some of the concerns I have, I don't know if we are completely comfortable, but I think it's in a better, and I think we have a better understanding of the concerns animating the reason why you had the language the way you did in the prior version. The --will need to have further discussion. I think also in terms of what will be an adequate truncation for ads that would qualify for an adaptive disclaimer. I think we're going to need to have a little more meeting of the minds, because what is a -- I think we're going to have to have some g uidance. We would not be able to have perfect guidance but we need to have some guidance about what would be considered adequate pick up a group just put it's acronym on, ABC corporation. With that be adequate? How do we evaluate when is an acronym sufficiently well known that, obviously, we have the political we're talking about our attendency. We know what that is. I think or is now the official nine. That's right. Which report if it's easily on disclaimers. That was a useful piece of information they important to us at our hearing. I think that that issue will need to tease out to make sure that we are all on the same page. It would be helpful if we passed a rule and some of us thought putting acronyms in and an organization were adequate, and others that, no, if you want to make national and 80 apostrophe L that's fine but you cannot just put C and make that Stanford national. I think it will be difficult but obviously would not to be comprehensive because universal potential lines of organizations would be so large providing adequate, will be considered adequate truncated name would be impossible, but I think providing a little more clarity on that is going to be necessary. One thing that I do want, I would want any final rules that were get as much of the guidance of the rule itself rather than relying on --to flesh out for practitioners inside the Beltway who no Ian Jay, but that's one thing. For vast majority of people who think I should go too rulebook and know whether or not I can or cannot do a certain thing, think you want to make sure as much of the guidance is included in the draft rule as possible. Those are a few of the issues that I still think need to get work through. You set up Rick it a good discussion between my staff and yours last night by phone. So, I think there is definitely been some improvement in the process. There's just a few hurdles that I think we still need to overcome, and I don't want to overestimate those my not be significant but I'm hopeful. On the specific point that you mention, the drafts, I think for a long time I'm just looking at the West blue document that I made public uses the phrase, full name or a clearly recognized abbreviation or acronym by which the person or persons are commonly known. I guess I thought we could flush that out in the ENJ. I'm not sure how much more we could rule text on that specific point. My greater concern is just whether there is a real commitment to get this done given that every single time it comes up nothing happens until the day before the meeting. And we have, as you know, been trying to propose new language to address your ongoing concerns. It is difficult to get feedback, and if we are already, I mean when I started this I was, my hope was to get a rule in place for the 2018 election. At this point we would be more pressed to get a rule in place for the 2020 election, because we still need to agree one rule text and to get a ENJ written, and we have no meetings for a month because my colleagues were not willing to schedule any meetings the next four weeks. I don't know what that means whether people will be around, not around, be willing to negotiate. I keep putting it on the agenda and every time he goes on the agenda nothing happens. So, I'm not, I don't know how much longer I'm going to be willing to keep putting this on the agenda. I'm very close to asking counsel to draft a notice of disposition. Less I see some real commitment and progress to getting this done, I think it would be a real shame if we were not able to get this done. As I said, hundreds of thousands of people wrote to us and say, please do us. I think it would be a benefit to all of those who are, as I said, increasingly using digital platforms for their advertising to get this clarity and increase flexibility. I think it really would be good for everyone. And of course, I continue to be concerned about whether people have adequate information about the sources of information, politics their getting on the Internet. This addresses a small slice of that top but it would be a real shame if we did not get a real d one. I do know, Mr. Vice-Chairman, are we going to make any progress in August? Well, I hope so. I would definitely be willing to talk with you, have my staff talk with your staff, and, hopefully get to a point to where we got an understanding that this is workable and we can do it, or if it looks like we can't then maybe, if we reach some sort of impasse maybe we can get into a flash .1 way or another over the next few weeks. I hope that we can. All right, well, I will keep it on the agenda. Hopefully, the next thing we well do not be a notice of disposition, but progress is hard. I don't know if anybody else has any comments the want to make on this. If not, Mr. Staff Director, do we have any management or administrative matters to discuss? Madam Chair, nine. In that case, this meeting is adjourned. [Event Concluded]