This file contains archived live captions of the open meeting of the Federal Election Commission held on August 17, 2017. This file is not a transcript of the meeting, and it has not been reviewed for accuracy or approved by the Federal Election Commission. >> We'll call to order the open session of the Federal Election Commission on August 17, 2017. And first matter, well first of all, Madam Vice Chairman? >> Thank you, Mr. Chairman. >> Do we have any late submitted documents? >> Yes. Point Bridge capital, LLC. That business so requires and no earlier public announcement was possible. I further move to suspend the rules in the timely submission in order that the commission can consider the following documents. 7-35A. And Stein and Gottlieb in agenda document 1736A. Point bridge capital LLC. >> Thank you very much, and for the record, let the record show that the commissioner Ellen Weintraub is with us via telephone. Is that correct? >> That is correct. >> All in favor of that motion, say aye? >> Aye. >> Opposed? None. It passes 5 to zero. Memorandum on the Illinois republican party. >> Good morning commissioners. The memorandum contains six findings. The committee requested an audit hearing. The request was granted and the hearing was held on June 22, 2017. We're happy to answer any questions on these matters. >> Thank you, any questions? Commissioner Goodman? >> Yes. I recall from the hearing and from re-reading this proposed audit finding, specifically focused on finding number four. Explain to me what is resulting from -- San Diego, California to the state party. Can you just summarize for me why it is we are looking at, what it is on these invoices that make us conclude there was an in-kind contribution to the party. In other words summarize for me, I have an invoice for me. But I kind of want to understand this in context. >> Yes. We have 14 invoices that break out to Candidate Joe Plumber and Joe Walsh. They are coded J.W. and J.P. The invoices have on them the name of the mailer, the code on it. It says likely Plumber includes printing and design. The actual amount for that cost or the mailer itself for the 44,000 pieces is 7,988.65 dollars. Below that is an amount of postage paid directly to the mail house. And then it shows the total below that of $15,697. The only amounts we can trace to the Illinois republican federal accounts, and we've been looking at the state accounts are the amounts that say "amounts." The amounts that say "Pay directly to the mail house" never go directly through the Illinois republican party's bank. >> Who is the mail house? >> Revolveus. >> ReVolvus Consulting, I see is billing for printing and design of a mail piece. So Vevolvus is the resigner and the printer? >> To the best of my knowledge. >> Who is the mailer? Them? >> It could have been. But there is no documentation to say IT could have been otherwise. >> Revolvus Consulting is located on Navajo Road, Sweetpea? >> That's what is on the invoice. >> Did you see comments related to Envision? >> Yes, I believe it appears. >> At 7081 Navajo Road, Sweetpea. >> I can't say. >> That's what's on the invoice? >> I don't know if that is the exact address. >> I looked at it last night. >> Okay. >> Now I also see that this, the invoice you just said bill to congress and yet I have another one that says bill to the Illinois republican party. Who played this invoice? >> Illinois Republican party paid the $7988. >> Okay, but this was billed to Plumber. So he had some involvement? >> I don't know that. We've seen this before in the Tennessee Dems where the name of the committee appears on invoices if they were doing business prior with them. >> So I see payments of $28,758.77 on October 31, 2012 from the Illinois Republican Party to Envision, located on Navajo Road in San Diego, California for postage. I see on October 26, 2012 a payment by the Illinois Republican Party to Envision on Navajo Road in San Diego for $12,598.65. And I see payments by the Illinois Republican Party to Envision on Navajo Road in San Diego on November 5 for postage. So I'm accounting for 40, roughly $44,000 in postage payments right on the face of the Illinois republican party, this was on our database on our website. And it's for postage at the same location. And yet the findings suggest that we find an in-kind contribution to the party for $72,000 for postage apparently paid. And I'm not thinking that the mail house, that was for postage. So I'm seeing postage payments by the party to a separate mailhouse, which might be, which appears to be perhaps Envision? >> It could be. >> Could be. Okay. I guess there is ambiguity. I mean the record gives us some ambiguity. And I can't tell, I can't make heads or tails of whether or not candidates or the NRCC or someone else may have paid the balance of $72,000. But I see one of these as an invoice to Plumber, so apparently Plumber was somewhat responsible of $7,709 in postage paid directly to a mail house. And my point in raising this is just that I take an audit finding as an affirmative finding based on the evidence that there is a violation. I mean that's, there is no greater investigation than an audit. You go in and you get all their materials. And the most clarity I get is an ambiguous entry on some invoices that there was a direct payment to the a mail house for some postage, not necessarily Revolvus. And I'm finding a postage house called Envision at the same address, and I'm finding about $43 or $44,000 for payments for postage by the Illinois Republican Party to Envision at the same address for postage. And yet I'm being asked or what's being recommended as an affirmative, definitive finding that there was $72,000 ofin-kind contributions of postage to the Illinois Republican Party. We had our hearing and asked questions about this. And council, they were trying to recreate this five year hence, as well. We're coming up on the five-year anniversary of these expenditures. And I'm uncomfortable saying I have the clarity to make that type of finding. So on that one, but Mr. Chairman, I believe Marty wants to make a point. >> I just wanted to make a point. You mentioned ambiguity. We provided this to a committee at several junctures of the process. As you pointed out, they tried to recreate it, but they weren't able to document who paid for this postage, as well. So that's kind of where we were with this. Somebody had to pay this postage, but we could not document who did pay it. And that's why we ended up with this finding as an in-kind. We're not even sure, you know, who the in-kind might be from. That's why we're throwing it out here as a finding. >> But I can explain to my satisfaction $43,000 worth of postage paid by the Illinois Republican Party paid to the same address, but a different entity operating under the same address. >> It's very possible that that's correct but we have no documentation to verify that. >> Either way. >> Either way. And that's my point. What's being recommended to me is making a definitive ruling against the party because we shifted the burden to the party to prove they didn't receive an in-kind, not because we have affirmatively established it based on our audit. And I don't feel comfortable shifting that burden, especially given that the recommendation is for $72,000, when I can explain $43,000 of it from the FEC's own reports that are on our computer. I see the postage payments of $43,000 delineated for postage to Envision at 71085 Navajo Roads, Sweetpea, California. So maybe there is a gap that is still unexplained of $30,000 to me, but I'm uncomfortable deciding this ambiguity against the party, shifting the burden against them to explain it. It could be that some of the candidates explained the postage. But nobody knows. And we haven't definitively established it. I understand what our audit division did. They found evidence of some value in postage, but it's unexplained. And I don't feel comfortable making an affirmative finding of this commission that it was necessarily, that it is necessarily an in-kind contribution. It could have been offsets. When you deal over a long period of time with one mail company, you make payments quite often and then you make adjustments to the mailings that go out. And then the mail house sometimes credits you. And so there can be internal offsets. I mean there are many other explanations for how to cover the $30,000, not 72 in any mind, but the $30,000 gap I see in these notations about postage being paid directly to a mail house. So I wanted to give my explanation for why I don't feel comfortable approving finding number four in the audit report. As for finding number two, Mr. Chairman, this came up in the hearing. Committee has photos of several volunteer mail programs, projects. They have some sign-in sheets, but overall I am prepared to credit two affidavits signed under penalty of perjury to this commission by the person who participated in those hearings and the person who participated in the program to the party. Not only are they under oath, but the text of the affidavits is broad and declarative. One of them, the man, the gentleman who ran the program represents that he ran all of the mail programs, that was the only kind of mail that the party engaged in, in this election cycle. All of it was volunteer. And he has enough evidence of enough of the evening mail programs and said all of them follow that general pattern. So for that reason I can't support recommendation number 2. >> Any comments? >> Mr. Chairman? >> Commissioner Weintraub. >> Recognizing that it won't get four votes, I'm prepared to make a different motion. We've been over all these issues before, and the hearing. And previously, and I don't see the need to go back through them again. And I'm prepared to make the recommendation to approve the recommendation for the Illinois Republican Party 13-09. >> Let me go on with that motion for a minute. I thought about this voluntary exemption issue long and hard for a long time. I don't think it needs to be as people give it out to be. But given this particular case, I have to look at the time involved. We're look at 2012. I'm not too sure what you can do after that amount of time to buttress some of this. So I'm not going to find a violation on the voluntary exemption issue. There's pretty well-drafted affidavits. I'm not sure how much more could be done to tip us in the direction. There was a Bonn fide effort, they may not have done it in the unth degree as we would have liked it, but it appears to me that we cannot ignore the affidavits and the drafts and that sort of thing. Under the circumstances, especially with the passage of time, I'm not going to hold up this and call it a violation. Commissioner Goodman? >> Mr. Chairman, we have a motion pending then. Do you want to call that vote? This is for the whole report. And then we can take individual. >> Yeah, we can do it that way. All in favor of the motion? >> Aye. >> Opposed? >> No. >> No. >> The motion fails, Commissioner Weintraub in favor. I apposed it. Seriatum. >> Yeah. Then we can toggle each. Mr. Chairman, in the audit recommendation provision on the Illinois republican Party, I move approval of recommended finding number one. >> Now I'm looking at the memorandum, finding no mention of financial activity. I just want to make sure we -- >> This is misstatement of financial activity. >> Mr. Chairman, am I still on the phone? >> Yes, you are, actually. >> Okay. It went silent for me for a while. I wasn't sure if anything was happening. >> We're just going to get our act together here. >> (Laughing) Okay! >> You've been there before. >> Yeah, it's hard to do this without the visual. >> Just give us one minute. >> Okay. (Chuckling) >> Mr. Chairman, strike my previous iteration. So in the audit division recommendation memorandum of the Illinois Republican Party, A13-09 and the accompanying draft final audit report, I move approval of finding 1, finding 3, finding 5, and finding 6. >> Anything further? Any comment? Commissioner Weintraub? >> I'm good with that. >> Any in favor? >> Aye, aye. >> Opposed? None. The motion passes entirely 5 to 0. >> Mr. Chairman, what if we simply do not move 2 and 4? I mean do we need since they're recommended and before the body, do we need to have votes in response to those two recommendations? >> Mr. Calvert is advising me under Directive 70, it would be more helpful if the commission were to make the motion on the two findings that are outstanding in some way. >> The first motion, we considered them and declined. Let me phrase them in a different way then, Mr. Chairman. As to, in this matter -- >> Just real quick for the record, I show that we acted on 1, 3, 5 and 6. What remains is 2 and 4. >> Yes, sir. >> So we want to move separately? >> And those were effectively rejected in the first motion, weren't they >> Do you want me to move 2 and 4 separately? >> Actually, I was going to make a differently worded motion with those two to reject those two. But I just didn't know if it was necessary. >> I'm still thinking about 4, by the way. >> I think there is a sufficient difference in the motions, particularly considering that the outcome on the findings may differ. >> Okay. >> Then Mr. Chairman, in regard to the current matter, the draft final audit report of the Illinois Republican Party and the Audit Division Recommendation Memorandum, I move that reject finding number 2 and find that the party provided sufficient evidence to establish the mail requirement. >>> As I mentioned earlier, I'll support that especially due to the passage of time and the difficulty in trying to go further in connection with finding a greater involvement. All in favor? >> Aye. >> Aye. >> Opposed? >> No. >> Okay. The motion passes 4 to 1. Commissioner Weintraub voted against. I voted in favor. The vice chair, commissioner goodman, and commissioner Peterson voted in favor. >> And then Mr. Chairman, in the same audit, I move that the commission reject finding number 4 for lack of sufficient evidence to support the finding. >> Can I ask a couple questions? >> Sure. >> With respect to that $30,000, I mean assuming that that money did get paid except for the $30,000, what is the vagueness there? >> Can you repeat that? >> As I read it, the full amount was not credited. The full amount was counted because there was non-recognition of the document that Commissioner Goodman found. And assuming that constitutes a document that deserves consideration for the calculation, there would be only 30,000 left. >> After accepting that. Yes. I don't know what other things, if Envision is behind other mailings. There are I believe five or six other vendors that did mailings. Since the lack of documentation, they could be doing things for another vendor which we never got support for. So that would be really hard to say that. >> Well, I go ahead and reject the recommendation, as well. >> Call the vote Mr. Chairman? >> All in favor? >> Aye. >> Aye. >> Opposed? >> No. >> The motion passes. Commissioner Weitraub voted against. I voted in favor. And Commissioners Goodman and Peters voted in favor. Anything further? Advisory opinion 207-16. Council? You have so many comments to make? >> Good morning commissioners. Agenda document 1735A and 1735B are alternative draft response to a request submitted by Stein and Gottlieb. The requesters have a number of questions about their mobile app that would allow people to round up spare change and contribute that to candidates running for office. We did not receive any comments on the request and we received one comment on both drafts A and B. Happy to answer any questions. >> Thank you. Any comments? Questions? >> Mr. Chairman? >> Yes, Commissioner Weintraub. >> Thank you, Mr. Chairman. Do we have council for the requester? >> Yes, we do. I apologize. >> I would like to ask council. >> Jonathan Berkon is present. >> Hello Mr. Berkon. Would you care to comment on the comments that we received recently? >> Yeah, absolutely. We received the comment this morning and I think a couple of points in response to it. Obviously the commenter is I think without rival in his knowledge of the precedence of this commission and the regulations of this commission. And I think it's therefore notable that in his comment there is no legal citation. There is no authority that's been marshaled to support his position. >> Excuse me Mr. Berkon. But I thought his comment was that you don't have authority. (Chuckling) >> And respectfully, Ms. Commissioner, I have to disagree with that. Just to back up for a second, I think what Mr. Noti is raising is the question of whether a business that provides services, um, is required to allow access to the platform essentially or to feature on the platform candidates that it determines based on commercially reasonable criteria or whether it basically has to allow all candidates or feature all candidates in that platform. The commission has been quite clear on this point throughout the years on page 6 of our request. We say that the commission has previously concluded, there is nothing in the act requiring a business entity to target its business towards clients or individuals that represent all parties or ideologies. That was in 1994. In the request, in the response, in drafts both A and B, I think the drafts do a very good job of addressing this point. They have cited the CTIA Wireless opinion where they cite the fact that it's fine, due to commercial consideration to accept proposals from some political committees and not other. The 12-6 Cooper for Congress. And then advisory opinion 2006-34, which describes requesters' proposed use of common commercial principles to determine partner entity's commercial viability. I think the law has been reasonably clear on this point throughout the years. I think another point that it may be that the commenter, it seems like the commenter is essentially disagree with a factual representation we're making as opposed to a legal conclusion. I mean we are representing in this request that commercially reasonable criteria will be used to determine which candidates are featured on the platform. If we don't comply with that, then we don't have the protection of the opinion. And the opinion is only that the commission issues is only as broad as the request that has been presented. And we have been clear that commercially reasonable criteria will be used to provide that. And I think the last point is that the commission has also been fairly clear over the years that the relevant criteria here is whether the services are being provided to the candidate committees or whether the services are being provided to the donors. And here I think the commission has correctly found that the services are being provided to the donors. And in fact there is a significant distinction between this request and a previous one on which the commission split. And we are taking the extra step to say that candidates, there is no mechanism, there is no way for candidates to apply to be part of this platform, that those decisions are going to be made by the company based on commercially reasonable criteria. >> Questions? >> If I may, Mr. Chairman? >> Of course. You're coming through clear. >> Thank you. And I apologize to the requester. (Laughing) I don't have my normal papers in front of me. I was unable to bring the usual big, fat notebook that I use with me. So bear with me. But the request, hang on, I'm trying to pull up the request on my -- electronically. The criteria for the candidates that you're going to be supporting doesn't this hinge on them being democrats in swing districts? >> The, yeah, as the request kind of made clear, based on the current political environment in which we live, the requesters have made a determination that basically doing a bipartisan platform is not commercially viable. As we said, if the political environment changes in subsequent years, that might be a different consideration. But right now you kind of have to pick one side or the other in order to be able to effectively market it to the donors to which it would be marketed. That's part one on the partisan piece. The second point on the swing districts is the goal of this is to make money. The requester here wants to earn money and they will earn the most money if they do the best job of identifying those candidates that generate the most interest. And I think it's their view that in the current environment there is some interest among democratic-leaning donors to focus on these so they can take back the house of representatives. It may be that candidates who aren't as popular to win, but are popular with donors, those candidates would be featured. The goal here is to earn money and to do well. The objection from the campaign legal center is that there is potentially overlap between the effect of the commercially reason criteria and the fact that that might end up going to particular candidates. But in fact, what is driving the decision, as the request makes clear, are the criteria of the goal of actually doing well with this product. >> Well, couldn't there be more than one motivation? I mean it kind of sounds like the goals are to make money while flipping the House? >> Nah, I, uh, first of all I think there are a lot of vendors in the political space. Whether a vendor gets in the political space solely to make money or they have another interest. The commission has been clear if vendors charge a reasonable rate for their services are not making contributions to their candidates. Perkins -- does not represent republicans. >> I recall that. >> There are plenty who do not represent candidates. They are driven by a business interest. >> I Recall that, too. >> (Laughing) Ultimately that is the test that the commission has used because it's frankly the only objective test that can be used. And the fact of the personal political affiliations of the businesses or the effect that an effective service can provide to helping to flip elections does not ultimately change the fact that as long as a business goes in and charges a commercially reasonable fee, I'm not aware of any decisions where the commission has said that is not in compliance with the act. And as both draft A and B cite there are plenty of examples in which the commission has been explicit in limiting the potential universe of consumers to a particular political party is in fact entirely permissible. And there is no problem with it at all. So again, I do think if Mr. Noti had some commission precedent in support of his position, he would have included it here. And I think the fact that there is none is indicative that the commission has never taken it before. >> I think his comment, his point was that we would be extending guidance to a place that we haven't gone before. >> Could you repeat that commissioner? >> I read Mr. Noti's comment as not so much as saying he had some particular precedent in might that he thought would be contrary to. But rather would we say yes either draft A or draft B, we would be extending our previous reasoning to a place where the commission has not gone before. This would be a new extension. And, you know, presumably that's why you asked because you didn't think it was 100% clear from previous precedence. >> This is actually, look, when you bring a request to the commission you kind of ask all the questions. What was actually motivating this was not the question of whether you could target your product to particular donors of a political persuasion. What was really motivating this was the deadlock that happened in 2015 with the prior opinion. And trying to get clarity on what it means to be providing services either to a committee or to the donors. That is actually what motivated it. If the commission I think had come out entirely one way in 2015 or another, we probably just wouldn't have brought it. Because on the question of the ability to target to a particular political audience, the commission has been really quite clear. Again, I'll read back. There is nothing, this is from 1994, there is nothing in the act requiring a business entity to target its business towards clients or individuals that represent all parties or ideologies. And respectfully, Mr. Noti does not cite any of these precedents. He just simply ignores them and says any commercially-reasonable criteria that possibly have some potential overlap with a political effect are inherently suspect. And that's just not a position the commission has ever taken. And frankly it can't because it would call into question vendor relationships with campaigns and PACs across the board. We would haul in Jones Day and big ad firms on both sides and say well, why did you work with this candidate versus that candidate? Did you want them to win more? There is no end to this principle. I think the commission has been wise in the past to stay away from it. And as long as there are commercially reasonable criteria used, then that is the basis on which the commission has allowed products like this in the past. >> Commissioner Weintraub, do you want to continue for a while? >> No, I'm done for a while. Thank you, Mr. Chairman. >> Okay, Commissioner Goodman? >> As I understand the service to be offered, it is an effective contributing service. We will help you target your money, if you want to change the House, we will help you identify those key races where your money can make a difference. And that's what makes the service valuable it seems to me to a donor. It may have residual benefit to those candidates or campaigns who happen to be so identified, but that's more a function of having to be in a competitive district or a competitive race or a weak incumbent. It's other factors that make your race critical to changing the House, for example. So if I want to employ a consulting service that has done the research to identify swing districts that can be changed, that, you know, rather than waste my money on going against an incumbent republican or democrat, yours happen to be servicing democratic donors or who are so inclined. I should be able to purchase that service, regardless of the fact that the service you're offering inherently is to be effective in making change, political change. And I believe that the individual donor, I think what distinguishes this, we shouldn't have to try to distinguish between the motives, the subjective motives of the criteria to make money versus change the House. The objective here is to change the House. And that is the service that I'm purchasing and what distinguishes this I think from other direction and control issues, is the fact that I'm paying a commercial service a fee to do it. And I'm comfortable that average citizens should have available to them the same type of consulting and research services to make their contributing effective that large, wealthy, sophisticated donors hire every day. They hire political consultants and lobbyists to help them target their resources in place where is it really matters. And so I intend to support when a vote is called, I intend to support draft A here. >> Let me ask a couple of questions. I haven't been historically, as you probably know, the biggest fan of this process. So forgive me if I appear to be not totally sold here. But if I understand it, you're giving money, the person receives money, they round it up, they get a certain amount of money, and it goes into the, and I guess the so-called project could be anybody. It could be, there is no requirements. The project has no obligation to report any money or to, are there any constrictions in what it does, I assume. And who would be the project here? Two individuals? >> Yeah. So the individuals are planning to form an entity, and obviously they wanted to wait until we had clarity on this piece of it. The project will be an entity, whether it's an LLC, which I think is the intent. So when we say "The project" it's simply referring to the entity. >> So two people, the project formers create an entity and we don't know under what law it is, whether it's a corporation or whether it's an LLC. There seems to be no limit on the individuals who can comprise it. So money is sent on a round-up program to them based upon what's commercial and it's spent based upon the most commercially reasonable basis in which to make their money worthwhile, I would say. If you want to call it that way. >> So basically if you have the product, the way as it will develop on your phone, you will, as an individual I will sign up with the product. And what that ends up doing is that every time I go buy a cup of coffee, take an Uber, do anything else, it will round up the amount. So if it's $2.82 for a coffee, then it rounds up 18 cents. And it will keep rounding up so at a certain point I will hit the threshold of $10. And when that happens, those $10 will be distributed to candidates that I have selected through the app. And that will end a fee that is commercially fee that is reasonable and deducted that I'm properly paying for the services that the product is providing. And through that mechanism then my money goes to the candidates that I have selected. >> So if the money, $10 goes to candidate A. And then that person is chosen at a particular time to be the most commercially reasonable person to receive the money. Commercially reasonable is the way we're using all the way through our conversation. I want to dwell on that. >> Commercially reasonable refers to who is featured on the application. So the determination of who to feature on the application is made via commercially reasonable criteria. So once someone is on the application, at that point then the individual donors can choose which candidates they are going to support. At that point then, the project's discretion is done. They are not making subsequent decisions about the commercial viability of that candidate. If the candidate is on my application, that is because a decision has been made that that candidate should be featured. And once I have then selected that candidate, my money is going to that candidate. It's full choice by the donor once the candidate is on the app. >> You have this app. Forgive me. >> I know. >> I've got some apps. But haven't converted them to political use yet. You have this app. And does it have on it candidate A, B, C, and D? >> Mm-hmm. >> And Tuesday you go to Safeway and buy some toothpaste and that goes to A. And without any knowledge you go and buy yourself a T-bone somewhere and that's candidate B. >> It works slightly differently. When I sign up and make a decision to participate in this app, at that point I will make a selection of which candidates on the app I want my money going to? >> Permanently? >> No. Not permanently. You can always switch, but until you make a subsequent decision. I sign up and give my credit card information. I decide I want to support candidates and A and C on the app. >> And you can choose which one? >> Yeah. They're trying to entice participation. I can pick and choose. They're going to do selected buckets. Candidates from the South or candidates from the Mountain West. Then I buy my toothpaste and T-bone and several other things, I'm up to $25, it's split evenly between candidates A and C. I can decide I don't like Candidate C anymore and I want my money to all go to A and B, I can make that choice. The decision about which candidates to feature, that's what the product is making a decision. >> It's arbitrary if you have candidate A and B, on one day candidate A would get X amount. And then B would get more because you have a bigger purchase that day. >> Let's say I pick A and B, and then I don't make any changes to the cycle. It's going to be split evening. >> What period of time? >> Until I stop it. >> You can drop a candidate at any point of time. >> Let's say I choose A and C. It's split evenly. If I go on a spending spree on Monday, that's split eveningly. And on Tuesday I save some money, but it's still split equally. Unless I decide to make a change in terms of how the product is used. >> Just to go further, as this adds up, pretty soon you get up to real money. Say $50. And at that point you need to keep track of the names of the people. But then you get up to $200. Or you don't know, but the person who is participating with the app may have made a separate contribution to A but not to B, for example. So that money, if it's split puts them over the $200 mark. So reporting has to occur. >> Yeah. >> So how does the app deal with these transactions where you don't have control over what the person is maybe donating through other sources? >> Yeah. So we fully -- the app fully accounts for that in several ways. The first is that before I put in my credit card information, select candidates, I am given a full disclaimer explaining the permits of the rules of contributions, the contribution limits, prohibited sources, and amounts. And I am required to certify that I am a permissible donor, I'm a citizen, I'm not a corporation, and that I acknowledge this. That's one. Two, all that information is collected. So once my money is actually processed, the app will send to the recipient committee, along with the money a list of donors with name, address, occupation, employer. So the recipient committee gets that information, just like they do on any credit card donation that comes in. >> They get that from day one? >> Yes. Once the first contribution is processed. >> And how often? Is it every month? >> The way they're planning to do it is actually because they don't want to kind of do it every day, so let's say $10 is the threshold that's selected, the money that I have essentially, the roundups, once they hit $10, then the amount will be processed and within ten days will be sent to the recipient committees. It's not based on dates on the calendar. It's based on hitting a $10 total threshold. And here further to your point about donor choice, if I'm at $9 and I decide I don't want to do this anymore, I want to withdraw from the system, you get your money back. The project is going to send a receipt, not only to the recipient committee, but do to the donor. The donor will get an e-mail receipt with here is where your money went. So if I gave $150 through the app to candidate A, but I've gone to candidate A's fundraiser and written $2700, I'm right at the cap of that limit. We provide information to the donor and to the committee so they can track limits on their end. >> So what happens, since there is no obligation to report below $200 some information, what happens to that information? >> So the recipient committee will receive the information of anyone who gives. >> I'm guessing to be so pervasive with the information that needs to be provided, if somebody never gives more than $10 bucks, on the list is your employer, your address, all the information that goes with something that is a higher contribution. But that information is now out on a list which shows, which in theory to the project. You would have that list for the people whose predilection was to vote for X or Y. It would be a list that could be very valuable. >> That's kind of inherent. >> Is there a guarantee that that information would not be made known? Or you wouldn't be selling that list? >> Yeah, I mean it's not something that frankly came up here because it's not really a provision of the federal election campaign act. But that is something I can go back to my clients and discuss. But I mean, you know, that is a question that's governed by privacy policies and internet sales generally. So the issue you raise is a good one, but frankly it's an issue that is completely already baked into the system. So if I go onto, you know, Hillary Clinton's website when she was running for president, and I write a contribution for $5 contribution with my credit card, they're still asking for my employer information because they need it for when they get over $200. That piece of the system in terms of privacy information is a very, very important issue. And it's one that we deal with as lawyers to committees. But I actually don't think it's within the purview of this commission only because it's not a provision of the federal election. >> To really make the money out of the list. Where normally you don't have an obligation to contribute anything until you get to $200. But $50, there needs to be a record of who it is, but I guess if you've got all this information that's out there, it could be tens of thousands or hundreds of thousands of people who have only given a little amount and never made it to the $200 threshold. That information is out there. I recognize you're going to argue that's not our bailiwick. >> It's a very important issue. The way that is dealt with, and the only way I say it's not subject here is because it's governed by a whole other set of laws. If you go to a website of a campaign they have very, very detailed privacy policies that specify how and when your information will be used. It's a big part again of what I do is advising candidates on that policy and the laws that govern it. The same thing would be true here. I think you can have a confidence that there is a legal regime that governs it. And the reason it hasn't come up in this request is because it's not this agency's purvey. It's something that everyone takes very seriously and would be governed in the privacy policy. >> I don't know how it would work once it gets out into the open. They read this new advisory opinion and all of a sudden there crops up a group of people to do this. >> I think there already are. I think this is a -- >> I was suggesting that there may be somebody other than your clients who would do it. >> I just mean that this app obviously has certain things that distinguish it. But apps have been brought before the commission before. People give online through democracy engine and all other kinds of entities that are closely connected to this, as well. I think the issues you raise are very important in the field of online contributions. But that, whether this project succeeds or not commercially, those issues are going to exist in the exact same way. >> So, I'm going to cut it short because people are probably getting pretty bored. But really quick, on the issue of commercially reasonable, what are you speaking with exactly as commercially reasonable? Are you picking the candidates who are most likely to get the contributions? And some candidate who is just plugging along doesn't get the benefit of the app because they're not on the list? >> The service is not being provided to candidates. It's being provided to the donor community. It's important because the commission historically has distinguished between the two. This is targeting actually donor universe and going to donors through different means and saying "Hey, this is a good way for you to participate in the political process." The commercial criteria, yes. I think as any entity who wishes to do well and wishes to make money on any contribution that is given, the project will make a fee, a commercially-reasonable fee, which is what makes this whole project legally permissible. And the entity wants to maximize its fees that it earns. So it is going to determine, ultimately what its goal is to use criteria that yes, that figure out who are the most likely candidate to generate fees for the company. Now I'm sure there will be some trial and error. It's not a science. They'll be figuring out those pieces. But that's the goal. They want to make money. >> Thanks. I apologize for taking so much time. >> No, please. These are great questions. >> Mr. Chairman? >> Commissioner goodman? >> Perhaps at the expense of repeating myself, it strikes me that commercially reasonable here is defined by a reference to what donors want, not necessarily going to campaigns or the Democratic National Committee and saying what would be most useful for you for us to raise money for. It's what service do donors want to purchase? Am I right? >> 100%. And the two really do differ. I think as a recent example, obviously in the special election in Georgia. If our project was around then, and they had set up there, they would have made a lot of money having people give to the democratic candidate in Georgia. And after the election when he lost, there was a lot of hubbub about was this actually the best use of donors' money for the democratic party and a lot of people didn't think it was. But from the project standpoint, they're all in. This was a popular candidate with donors and kind of fit the overall brand. And they would have been all in with that candidate, although ultimately the party may have decided it's actually not the best race for all of our money to invest in. >> But Mr. Chairman, if a commercial vendor wants to offer a service to democratic-leaning donors that says give to us and we will help you identify those key House races that will help change the House, we've done the research, that's part of our service to you. We've identified the top 20 swing districts where the democratic challengers have the greatest chance, there could be a challenger service. There could be an incumbent service. But it strikes me as a donor I might like to purchase that service from a vendor. And I assume that the vendor is going to be keeping tabs on donor interest like that. We're talking about change here. Macing up your 80 cents to a dollar. Many of those people may not be capable of identifying the 20 top most competitive districts that would help change the House. So I might want to purchase this service. And I take it that the service is going to tailor its marketing, its identification, to that type of donor interest. >> I think you're 100% right, Commissioner Goodman. Part of this is you have donors who are out there who want to achieve a goal. In this case, to elect more democrats to the House and perhaps the Senate. But there is an information gap, which is what Commissioner Goodman is saying. The wealthiest donors, they know the polling data in each particular race and whether this mail piece can do this and that. Someone who is just out there who is a democrat who wants to participate in the process, they don't have the time or the wherewithal to figure out whether this race or more competitive than that race. The reason why this service costs money for the donor, is they're going to be doing some work to kind of lay all of that out there so donors are educated about it and that information gap is to some degree filled. But within the universe of people that the app identifies, the donor will have some choice in it. >> I think I understood your request to say until I reach $10 you're not going to be banking the money. You're not going to be holding the money like a bank. >> Exactly. >> You're going to be keeping track of the roundups, accounting for it, and then charging my credit card or my debit card, whatever I set up with you, then you're going to charge it as a separate transaction. >> Exactly. Once you hit $10 and round up, then it will actually charge. It will be a $10 fee or if it goes over to $10.07 with that purchase, that's what the actual fee is going to be. >> Understood. >> That's when it comes out of the account? How does that work anyway? >> Just like anything else on your credit card. >> These little incremental bumps, is it every month? >> It depends on how frequently you purchase stuff. It's just like any other charge on your bill. Again, you have your toothpaste for $2.42. And your T-bone for $22, whatever the case may be. And it's rounding up those amounts. But once it goes over $10, that's the threshold. Then there will be another charge for $10.09. That's another fee to the project. It will just be another charge on your card and when you pay your monthly bill, you pay your monthly bill and that will be part of it. >> Thanks. I apologize for so much time. >> No, this is great. >> Commissioner Weintraub? >> Yep. >> Any questions? >> None here. >> Well. >> Mr. Chairman? >> Yes, commissioner. >> I actually have a question for Mr. Berkon. First of all, let me say that I think your answers to my questions were very good. >> Thank you. >> (Laughing) Well done. >> Thank you. >> And I appreciate the thoughtfulness of your answers, particularly give than we all just saw that comment for the first time this morning. I would like a little bit more time to think about this, if your client would be willing to give us an extension. Because in addition to that issue, there is the other issue that the two drafts are not entirely on the same page on, which is your attempt to find a way to get four votes for an answer, unlike the 2015 requester that you referred to and were cognizant of in drafting your request. So in any event, I think there would be a need to try and find a way to thread that needle between the two drafts. But as I said, I would also like a little bit more time to think about your answers and the concerns that were raised. >> I would add to that. One concern I have, and it's great that you're here because it's educational. I am concerned that the public hasn't had the amount of time they typically would have to give to comment. I see he got busy right away. But in the interest of that, I support that, too. And I will tell you I'm more on the fence than I thought I was going to be. >> In a good direction or a bad direction? >> Given my history, it's a good direction for you. I'm not making any guarantees either. >> Let me make a couple points. Between draft A and draft B, we are completely fine with either one. I actually don't think there is any substantive difference at all. Draft B makes explicit or underscores the point, which is explicit in draft A, which is that there is a factual difference between this request and the 2015 request. Acknowledging explicitly there is a factual difference. And saying there is nothing in this draft that kind of changes anything we decide in 2015. If we can get four votes today for draft B, we are 100% for that. The second point, obviously, look, if we don't have four votes yet, I have to ask my client. But presumably we would prefer to have some sort of extension rather than, you know, lose. But, you know, they want to get going. Like the election is coming up. The act requires the commission to respond within 60 days. And, you know, we requested almost at that 60-day mark now. Time is of the essence from a competitive standpoint. While I completely understand the particular circumstances here, we did follow the process and would like an answer as soon as we can. I'm happy to ask for that, if that's what is being requested, but I think we would ask in return that it be done expeditiously and we don't have to wait until the next meeting for example. >> Procedurally I don't know if we can do that. Because I think to collaborate we need to do it public. I mean I guess procedurally it might be possible, but I don't know if you can guarantee that. How would that work? We would have to collaborate, in some way we would have to reconvene? >> I was thinking more on the lines between draft A and draft B. In the past for technical things like that, the commission has kind of done its tally votes in between hearings when there has been a full airing on the substance. And the distinctions obviously you need to have something that you're voting on. But really the two are I think substantively identical, even though there is slightly different language. >> Mr. Chairman? >> Commissioner Weintraub. >> I Believe we could if four or more commissioners can come to an agreement on language, we can make a draft and put it out. And see it before we voted on it. Give it 24 or 48 hours and then vote on it by tally. I think we could. We tend to put these things over until the next meeting, but it is definitely possible for us to get it done on paper. >> Well, does the commission want to guarantee that it will work that way? >> Yeah, obviously I need to go back to my client to get confirmation. When is the 60 days up? Monday? We can get you just via e-mail, you know, today. Just an answer to that. But that's, obviously, we do want to get going with this. And given that time is of the essence. >> Should we proceed? Commissioner Peterson? >> I would hope that we could resolve it before we have to go back to another meeting. Just for the record, I also support draft A. I think any invitation to go beyond the evaluation of commercially reasonable criteria and to try to peek below the surfaces and ascertain motives. And question whether or not these are the most commercially reasonable criteria, and wouldn't it be even more reasonable if you provided it to this further pool of candidates. I think we're on more objective ground if we look at commercially reasonable activity. Determining whether they're providing a service to contributors as they are in this case. And I think this draft is firmly grounded in commission precedence. And I think the precedent along that we followed in the past I think was wisely considered. I would be, I would be very reluctant to veer from that. Because I think we would be going down a very unproductive path. So I would hope we could find that common ground. I would note that it seems, as Mr. Berkon pointed out, the major point of departure, and it's not a very major part, is just I think it's language, just regarding, I believe it's just the language regarding the factual distinction. To the extent that some want that in there and feel that's important. We could even put something akin to that in a footnote to say that maybe some commissioners felt that it was important that this distinction, this factual distinction between this and prior matters occurs in this instance. And maybe that would be an easy way that we could thread the needle. Because other than that, there is really not a whole lot of substantive difference. And if that is the case, then I would hope that we can resolve this on tally before we have to come back to another meeting. >> Further comment? Well, we'll leave it at that, I guess. And see what we can do along that line. I guess there is no way to guarantee how it's going to turn out. But you need to get back to us, I guess. >> Yeah, I'll chat with the client and get back to you guys this afternoon. >> Thank you council. >> Great, thank you. We're going to take a break for about 10 minutes and then we'll continue until 1 o'clock and we'll continue from there. >> Mr. Chairman, when you say you're going to take a break and then continue, is the open meeting going to continue? Or are we going into exec? >> I think we probably need to finish the open session. Just a second. >> I don't tend to debate the next one if you want to just move it to a vote. >> Okay, is there any debate to be had for that one? >> I'm prepared to support the draft on the other request. >> I'm told the requestor's council is on the phone? >> Mr. Lycan? >> Pardon me? >> Mr. Lycan, are you with us? >> I am on the phone, thank you. >> He is with us, Mr. Chairman. >> Mr. Lycan, thank you for joining us. I hope we didn't keep you waiting on the phone too long. It took longer than anticipated. Now we're going to draft opinion 2017-08. >> Thank you, Chairman Walther. Agenda document is a draft response submitted by Pointbridge capital LLC. The requester asks a number of questions about an index. And to establish an exchange traded fund based on that index. The draft concludes that the proposed index are permissible and that the requester would not be required to file any reports with the commission. We did not receive any comments. >> Any comments, questions? >> Mr. Chairman. >> Commissioner Goodman. >> I Just want to Mr. Lycan an opportunity to react to the draft that he sees. >> There is an old saying in court when you have things going in court, you don't ask questions. >> But since he is on the phone. That may be advice to you Mr. Lycan. >> Thank you Mr. Chairman and Commissioner Goodman, it does not appear necessary. But I would like to comment on the process. I can't express how grateful I am on how FEC staff and everyone who has touched this AOR, took what was my problem and made it their priority. They went above and beyond the call and I truly appreciate it. I don't know if this is the right term to use, but I feel like I have received outstanding customer service from the commission. So thank you to those two individuals and to the entire commission. >> Thanks very much. That's very nice to hear. Kind words are not that often heard. We'll take them as we can get them. Do we have a motion? >> Yes, I move approval of agenda document. >> All in favor >> Aye. >> Aye. >> Opposed? None. The motion passes 5 to 0. Thank you very much. Thank you for waiting for us Mr. Lycan. >> Thank you, Mr. Chairman. >> So we'll pick up in about 10 minutes. >> Mr. Chairman, if you're going to adjourn this meeting, did you want to raise the question about management and administrative matters? >> Yes, I guess we're done with the meeting. Are there any matters to be discussed? >> Mr. Chairman, there are no such matters. >> Okay, the meeting is adjourned. We'll come back at 1 o'clock. Excuse me I apologize. (The meeting was adjourned at 12:13 p.m. Eastern Time)