This file contains archived live captions of the open meeting of the Federal Election Commission held on August 22, 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 meaning of the Federal election commission for Thursday August 22nd will now come to order. Apologies for the delay. We had a fire drill this morning and we wanted to make sure everybody had a chance to get back in the building and any visitors from outside had the opportunity to get through security which I know sometimes takes a little bit of time. For those of you in the room it may look like there are three commissioners but we have four because the vice chairman is on the phone, am I correct Mr. Vice Chairman? Yes, I am here. Excellent. Before we start the agenda I have a couple of announcements and I want to start with a good news story, because that is enough bad news in the world. One of the FEC's most dedicated employees has been featured in an article in P people magazine about her 20 year friendship with a woman she met for the best buddies program and the two of them have been close friends and now appear to be lifelong friends and great support to each other and learned a lot from each other and it is a testament to how individuals can make a difference in each other's lives so we congratulate Ruth for her recognition. Ruth this somebody I see every day and her smile is one of the things that makes it worthwhile to come into the office and I think everybody should look up this article and I guarantee it will give you a smile as well. I also have a couple of announcements about personnel. As we previously announced in writing but the first meeting we have had since it happened, we have named a permanent Inspector General , Mr. Chris Skinner . Chris comes to us with the 10 years of experience at the Inspector General rolled conducting investigations, inspections and internal audits and most recently was deputy inspector general for the office of Naval research for six years including and acting expect her general for the a when our. Everyone who met Chris was impressed with him and we are excited to have him on board and look forward to working with him. We want to thank Tony Baptiste who was are acting Inspector General and helped fill in while we were finishing the hiring process. >> We have several people on the phone today so it is going to be a little bit complicated. The other personalities is Mr. [ Indiscernible ] who people have seen as acting associate General Counsel for policy and has been made permanent. He has been with the commission since 2008 and started out as a staff attorney in policy and risen to the ranks and was an associate with Baker and Hostetler and worked at another law firm before that and has his BA from the University of Colorado at Boulder and his law degree from George Washington University and we have all been incredibly impressed and thankful for his good work in the acting associate General Counsel position and are looking forward to many more years of great service from him so congratulations on your permanent appointment. >> with all that excitement out of the way we will move on to the formal agenda. The first item is Internet disclaimers rulemaking proposal for regulation 2011-02 because that is when we started this process. This has been on the agenda the fourth time. June through July, now it is August. Mr. vice chairman, have you got anything for us? I can't say that I had anything new. I don't have a lot to add other than that this particular time I have not been able to develop the formulation I think will bring us to consensus. I wish I had more to say but that is about the extent of it right now. Okay . The last four weeks since the last meeting, my staff has reached out to your staff literally on a daily basis trying to see if there was something we could talk about and some way to move the ball forward. Your staff is lovely and polite , but they had nothing for us day after day. As I said, this started in 2011. I tried to bring it back to life starting in 2016. I was hoping we could get a new rule now for the 2018 elections and that obviously didn't happen. We had a hearing over a year ago and it is really not clear to me how we are going to get anything done before the 2020 election, and I think that is deeply unfortunate given that hundreds of thousands of people wrote into encourage us to do this rulemaking. I think it is important and would be beneficial , but as I said, we have tried every single day to see if there was something we could do in some way to move forward and some conversation to have, and I can't do it alone. I don't know where to go from here but let me assure you my door remains open if you would like to have a conversation and try to get this rulemaking done. As I said, I can't do it on my own. I appreciate that. I don't know if anybody else has anything they want to say on this topic, if not, we will move on to draft advisory opinion 2019-14 the Libertarian Arizona party. Did we have someone on the phone for that? Yes ma'am, do we have a motion we need to read with this item 1st? >> I moved to the commission to add to the agenda at the notice of available for vacation 2019- 04 and audit division recommendation on the Democratic Party A 17-21 and pursuant to 11 see a part 217 D and I further move to suspend the rules on the timely submission of the documents in order the commission may consider the late submission of agenda document knife and -- 19- 32. And this last agenda documents, they are draft responses to the Arizona Libertarian party which is why the secretary thoughtfully told us we needed to get that motion in first. Thank you Commissioner Hunter for moving the commission add to the agenda the notice of availability for regulation 2019-04 reporting segregated party accounts and audit division recommendation memorandum and that the commission to German pursuant to 11 CFR no earlier public announcement was possible and further move to suspend the rules in order the commission may consider the late submission . Any discussion on the motion? If not all in favor say aye. Motion passes unanimously. Miss Hemsley? Thank you. Agenda document 19-32 -A 1 is a direct response advisory opinion from the Arizona Libertarian party which asks whether it may transfer $2000 to the Libertarian national party to help covered the LMP overall cost of implementing the state customer relationship management system without having to register as a political committee. The draft states the AZ LP has previously been granted by the commission status as a state committee of a national political party responsible for the day-to-day operations of the LMP and Arizona and put federal candidates on the ballot. The LMP and AZ LP are national and state committees of the same party, the AZ LP may transfer the $2000 in federally permissible funds as proposed however the draft for that includes the amount disbursed must be counted against the registration and reporting threshold of $1000 . We didn't receive any comments on the request of the draft. We be happy to answer any questions. Can I just ask about footnote 2 in revised draft A . If there any changes from the original draft we had on the agenda last time in response to the new facts if you could explain where those are and why they're there. In the background we added a little bit of clarification on page 2 lines 10 to 12 to clarify the LMP offers the relationship management system free of charge to the state affiliates and no actual fee to be on boarded and we also added a footnote to discussing it is not a payment for services at the usual normal charge because there is no fee to be on boarded if they don't have to pay for, they just happen have the funds and want to help with the overall cost to the LNP . The footnote went on to discuss whether the disbursement could also be considered an expenditure and the footnote goes on to determine it could and in either event we think the disbursement would be made for the purposes of influencing a federal election so it would have to be counted toward their political status. So basically the way you look at it they end up with the same answer. Thank you for that. Any discussion? As I mentioned before the meeting I am prepared to support revised draft A but I think it prudent to remove the footnote. I think it is not necessary for the conclusion. I think it is somewhat confusing. I know many people were working on drafting it but because it is not necessary and it is confusing and seems to collapse a couple different definitions together, I don't think we need it so I don't -- Madam chair , when I was looking at the footnote as well , what stuck out to me at first is I wasn't sure it was necessary in order to reach the conclusion the draft puts forth. It let me little confused as to whether or not we would still consider the party have met the reporting threshold even if this had been a legitimate payment for goods or services at the usual normal charge. Because there is a little bit of confusion as to the full impact of this footnote and I'm not sure it is necessary for answering the question, I am on the same page with Commissioner Hunter that I think we can answer this question and I don't think it would impede the analysis in order to take this out and leave the rest of the analysis to speak for itself. Okay. I actually think the footnote is helpful and as I said , it gets to the point that anyway you look at this transaction, they end up with the same answer but I think it is more important we answer the question so if there are four votes to go forward without note to Matt I will support that . >> Any other discussion? Commissioner Hunter? I move approval of addenda document 19-32-A 1 revised draft A with removal of footnote 2. Commissioner Hunter has approved 2019 -14 to AZ LP set forth in agenda document 19-32- A 1 with the deletion of footnote 2. >> I will vote for the motion but I was going to record to say I would support it if it were to include [ Indiscernible ] Thank you. Any further discussion on the motion? If not I will call in favor say aye . Motion passes unanimously. >> The next item on the agenda is draft advisory opinion 2019- 10. A draft response to price for Congress. We have four draft answers at this point. I don't know if that means each one gets one vote. Mr. Paulson . Thank you and good morning commissioners. Before you are agenda documents 19-33, 19-33-problematic , respond to an advisory opinion request from price for Congress the principal camping committee overtired representative Dr. Thomas price. The request asks whether it may contribute committee assets to a nonprofit organization and whether that organization may engage in certain activities of Dr. Price will serve as its president and CEO. Draft A which was held over from the do died 25th over [ Indiscernible ] to the organization as proposed. Drafts , Mac and C the activity is prohibited because the donation Constitution of confusion --any comments on the drafts. I would be happy to address any questions you might have. Do we have any questions for comment? >> Is the requester on the phone? I am on the phone. Welcome. Do we have any questions? Commissioner Hunter? I'd like to talk a little bit about draft B entered into the public record after our last conversation. My understanding that is the draft you are planning to support so I would like to talk about it and ask a few questions but they hope of changing her mind to support either draft A B. For the record I would like to support draft A but willing to support draft D at thank you to OGC for drafting that. With regard to draft problematic, under section 30114 , a candidate can transfer money to an organization, and this is under subsection A 3 an organization described of the Internal Revenue Code of 1986. In the last open meeting the chair referenced a tweet and we went back and looked it up and entered it into the public record so on the public record there is a memo from the vice chair dated July 25th and it lays out a tweet from a tax professor in California and her initial tweet said the proposed draft gets tax law wrong. An organization is not described in section 170 C that can receive transfers eligible for charitable contribution deduction. That is a lot of what the language you are using is similar to that tweet but I'm not sure if you saw there was a correction entered later by the same professor who wrote my error, being a knee-jerk tax lawyer draft opinion promises not to lobby or campaign unless is described for purposes of the act in commission regulations, not what we tax spoke would say. Mr. Passantino he wants to set up a C 4 and it seemed like [ Indiscernible ] . It spells out very nicely this section is permissible to donate to to an 4 under this section. Page 5 line 7 the commission has never applied contributions entities which are not subject to the same restrictions and declines to do so here. It goes on to say B 3 's are okay but my question to the chair is maybe I am misreading this, the first part of draft B says there is never an example where a C 4 would qualify under section 170 C of the Internal Revenue Code of 1986. Again my reading if your draft is that there is never an opportunity for a C 4 to fall under a provision A 3. >> I think you may have overestimated my reliance on that tweet. I did mention it but the analysis was based on my own history with 170 C which is a provision I am familiar with and have looked at over the years and comes to ethics rules as well as the campaign- finance law . I have been familiar with that provision for many years. In my understanding, and we have looked and we haven't seen , I think there is one old example in footnote 7 # wrong footnote. Footnote 6, we found when example from a long time ago where a volunteer fire company was viewed as charitable under 170 C-one exclusive public purposes and lessen the burden of government but other than that I am not aware of any instance where one has been said to include organizations. It is to section of the tax code that defines a charitable contribution where people can take tax deductions. I just don't think there is any authority, I don't think it is generally viewed as an accompanying 501 C-4 and the commission has never said that is true. What the tax lawyer said on Twitter was speaking as a tax lawyer, not as a campaign- finance expert she said she wouldn't apply 170 C to a 501 C 4 but she thought the commission could do it under regulations but that is not her primary area of expertise. I didn't hear an answer to the question, is it possible for a C-4 to avail themselves of section 3 , can they ever be characterized as a -- I don't believe so. Sone no zero [ Indiscernible ] except for the firefighters. It has never happened at so I don't think so. The reason people come in for advisory request if it ever happened before they would never asked for one so they are asking us to apply our law to the facts before us so it might be true we have never found for this but can a C-4 ever be considered a 170 in your mind? No. Why wouldn't Congress have written right into that section for contributions described for only 501 Esther Gyory met ? May be because nobody thinks --it never has been. As I said draft A walks the NSI went recitation of under widely circumstances they are indistinguishable. The 501 C-3 in the organization Mr. Price would like to establish is indistinguishable for the purposes of 170 C. I understand that is your opinion. Mr. Passantino would you like to comment on that part or any part before I move on to the personal use conversation? I don't want to waste everyone's time. I'm in agreement with Commissioner Hunter in terms of the interpretation of the law. I believe draft B gets the law wrong respectfully. I think it draws a false equivalence by saying because the commissioner have long considered 170 C the equivalent of a 501 C-3 because all advisory opinions grant the ability to provide funds to a 501 C-3 doesn't mean the reverse can't be true, that an entity planning to engage in conduct consistent with IRC 170 C should not be allowed to engage in that behavior is to me logically and legally wrong. But again I don't want to waste peoples time. I think D going by any lawful use will also get us there so I am prepared to talk about draft D as well . Thank you. I agree with what you said. Moving onto draft D and the provision of the law which states monies can be transferred for any other lawful purpose unless prohibited by subsection B which is the personal use section. My understanding of this draft is obviously you think this organization would be considered personal use and that is spelled out most clearly on page 7, line 12 of draft B, the organization proposes to act as a personal vehicle for Dr. Price to produce ideas, personal brand and reputation using campaign funds. That is actually not true. They don't propose to act as a personal vehicle and later on where it discusses at the bottom of page 7, line 18 the request proposes no oversight or financial controls over reimbursement decisions. He appears to have unilateral control of the organizations finances. These appearances and publications will enhance doctor prices reputation and is earning ability notwithstanding the pledge to only organize unpaid speaking opportunities for Dr. Price. If Mr. Price were to come up with a committee to say they had to take a look at all of his expenses and somebody else approved his expenses, with that change your opinion if that fact was changed? >> I'm not going to give hypothetical opinions on the fly. I do think what is been proposed is different than anything the commission has looked at in the past and I also think we have seen in recent times that there is been an uptick in activity by campaigns of former members , and I'm speaking generally now, I'm not speaking anything about Dr. Price but we have seen we have had a problem out there what what has come to be known as zombie campaigns, campaigns that live on after the member is no longer in Congress and do a variety of things but I think we always have to come back to the law. The law was actually changed on personal use so a lot of the old advisory opinions relied on in the original draft predated the change in the personal use law which is now defined as using the funds to fulfill any commitments, obligation or expense of a person that would exist irrespective of the candidates election campaign or individual duties as a holder of federal office. I think we need to take a hard look at what those words mean because for a former officeholder there isn't anything. It doesn't have an election campaign or duties in a federal office so everything falls into that bucket. I think it would be good for the commission. I am not anticipating we would find consensus to do this but I think in an ideal world the commission should look at putting out more stringent guidance on how long these committees can continue to linger out there and be used by former officeholders once they are no longer in office and they are plainly not being used anymore to pay expenses related to candidate 's election campaign or holder of federal office. Having said that when I am faced with an advisory opinion which is an opportunity to weigh in on that question, I am going to be looking at any such requests more strictly as we go forward because I think there is a problem out here that was perhaps not recognized in the past but when we issued these advisory opinions they are look to by other individuals and I believe that to say yes to this request would open up new inroads into the personal use restrictions and I'm not willing to go there. I don't think it is consistent with the literal words of the law. I think if you read the law literally every person when they stop being a candidate would have to give all the money back and nobody does that and they're all kinds of permitted uses spelled out in our own statute so regardless of how we want to look in the future, the statute permits all of this and it has been going on for years and years. Yes there have been issues with zombie packs and we have a recent enforcement matter were four commissioners voted to find certain uses violated that permission. We adopted a policy and they have done a nice job in implementing that, but were not talking about a zombie pack, somebody who came in and asked if they can transfer the money under a provision of our law and for some of us to say one of the reasons this is not okay is because things have changed and getting bad out there and from line 3, page 8 appearances and publications will enhance doctor price's professional reputation. I think a lot of organizations would have to be concerned if you vote for draft B. There was a recent news article about former Senator Heidi Hyde camp open an organization and she is one of the founders of an organization called one country in my understanding it is a 501 C-4 in an article written in Time says a senator who lost reelection in 2018 is using her left over campaign funds to push her fellow Democrats to reconnect with rule voters asking they risk letting President Donald Trump when a second term if they don't. As I said she is on the Board of Directors. This is from a different new source. The group has started working with the Democratic National Committee in Time magazine reported using leftover campaign funds for the project. Another press release notes one country project launched the start of a billboard in social media campaign targeting state fairs in 11 states. The states are listed in this is the message will focus on state specific and national feelings by President Trump for rural communities. I don't know what standard she is supposed to look at to find out if the Commissioner or two these activities whether these activities might enhance her professional reputation and earning ability. I think it is dangerous to basically make up new standards without a rulemaking and it will change when a lot of people are doing and it certainly doesn't fall any provision of the law. I have to respectfully disagree. I'm going back to the statute that says it is personal use to use leftover campaign funds to fulfill any commitments, obligation or expense of a person that would exist Irick spec of duties as a holder of federal office. In the ideal world we would do rulemaking and issue policy guidance and more something broad-based to return to what Congress appeared to have anticipated. One possibility in that ideal world perhaps the commission would say you have to close down these accounts within a set period of time after the officeholder is no longer running from office and perhaps the pathways listed specifically in the statute, maybe those are the only places where you can put the money but as I said, if I am asked now to opine on the advisory opinion context on whether something complies with this provision on the personal use that says it can't be used to fulfill any commitment obligation or expense of a person that would exist here expect of the candidates duties as a holder of federal office, that is what I'm going to look to. They would have to return all money the minute the campaign was over to accomplish -- There are winding down periods. I'd like to hear from Mr. Passantino about draft D , going back to, I think you just said we should just look at the list and one of the things listed is 170 Ellen Weintraub piracy so what if Heidi Hyde camp's group are Dr. Price previous group said we will go to the process and change ourselves to a C-3 but the doing the same thing. You would approve that because under the law you said that is okay. Not everything that qualifies under C-4 would qualify under C- 3. As a hypothetical situation where you assume they would be doing the exact same thing and have C-3 status. I'm saying if they submitted the same request but everything they said I'm going to be a C-3 which you approve that? Because under your view that might enhance their professional reputation. Because of the specific provision in the law I would likely approve that but I don't like to opine on hypotheticals. >> Mr. Passantino, anything to add? I appreciate the opportunity. I have significant concerns that the commission appears to be attempting to legislate contrary to explicit statutory regulatory and past advisory opinions based solely on the anticipated speech of this individual and that this is an outcome based analysis not in any way based on past precedent and it is based on who is doing the requesting. If you look at past advisory opinions this commission has made explicitly clear if it is any lawful purpose, even if it were one not consistent with 170 C , and I'm referring to 1993-10 which found it doesn't have to be consistent with 170 C. We said we are willing to do that but your past guidance says we don't have to. We are now engaged in the conversation is is this in some way associated with the former member. As the commissioners we have numerous past advisory opinions which are in the draft 1996, the Hancock one , the 1997 , all of those are examples where a former campaign commission transferred their funds to a tax-exempt entity of being a 501 C but functionally identical the the same in which those individuals and former members were president, chairman, had spouses or children all on the board. We are drawing a distinction the commission had never drawn before and we are drawing it on an artificial basis. As Commissioner Hunter said we could easily create a 501 C-3 and do all these activities. We don't want to we don't have to under the commission laws. We are avoiding explicit past precedent for recent that does not in any way tied to the law that governs this commission and we are doing it because of who is doing the asking. We are not doing it because under the logic we are being presented. No member could do anything including all the past advisory opinions that have been previously blessed. This is only a minor deviation from what has been authorized and I have significant concerns we are doing it for reason this body is not authorized to engaged to reaching that conclusion. One other thing, there is been significant discussion about we don't have any oversight , they are telling us things, if we were to use these funds in a way that is contrary to our representation it would become a personal use for this commission. You don't lose the jurisdiction over the use of the funds. I think all of that analysis in draft B ignores or overlooks the fact the commission does have the ability to conduct oversight if we are not doing what we say we're going to do and if we do what we say were going to do at squarely with the law and the regulation. Mr. Passantino, are the act 70s of the proposed C-4 related to Dr. Price 's election campaign? >> No more than the conduct for Hancock and related to the past campaigns. I believe the subpoenas were issued before the law was changed to codify this interpretation of the personal use prohibition. It says it cannot use the money to fulfill any commitment obligation or expense of a person that would exist irrespective of the candidates election campaign or individuals duties as a holder of federal office. Can you please explain to me how what you proposed to do is related to the candidate's election campaign or he is no longer a candidate so I think that is a problem with the duties of the holder of federal office, he is not a holder of federal office either. I have heard a lot of language from Mr. Passantino and Commissioner Hunter but I have not heard a response to my statutory problem. >> The answer to the statutory problem is the same as the other. We don't know what this individual 's aspirations are going to tie to just as we can't describe hypotheticals. I can't tell you his future political aspirations will in some way tied to the lawful activities of this entity and if that were the case under your analysis that would be proper. As long it is it is not personal use , I don't see that as a definitive full stop and I don't think the analysis changes based on that one statutory change you are referring to. Are you saying he is planning on using the C-4 in relation to a future campaign for office? No, I am not saying that. What I'm saying is I don't know if in some way the activities of this organization, that is not our goal. You're asking me to address future hypotheticals which I am saying is just as improper for me to engage in is anyone else. Our request is based on the facts as we understand them and submitting them. We know we could stand up a 501 C-3 and provide the funds. There are the reasons why as we have discussed in the previous hearing we don't think we are required to do that. That is an IRS issue. That is the reason we are making this request, but I don't think it ties to the statutory use of campaign funds for the personal use analysis. >> Madam Chair , I just wanted to add a couple of thoughts. As I mentioned last time, I support draft A, I think a 501 C-4 can still fit within the confines of 170 C of the Internal Revenue Code and 170 C looks not at the formal does it patient of the organization but rather the function of the organization to determine whether or not it fits within its parameters. Turning to the issue of A 6 section 3114 and how we apply the personal use test in the irrespective test, I am concerned about the application of that in draft B. A number of years ago when I was on Capitol Hill in the aftermath of the passage of what became Feingold, any other lawful purpose provision was taken out originally and I recall many members of Congress when they realized for example they would not be able to use campaign funds to say run for governor should they decide to retire from the House or the Senate and run for state office assuming the state for which they were seeking that office permitted the funds in the amounts that were in their campaign fund, that was one of the issues that led to any other lawful purpose being immediately inserted back into the law however, the way I understand draft B 's application of the irrespective test would seem to initiate that understanding which again is not the chief reason but one of the main reason why A 6 was inserted back into the law I believe within maybe a year or two of the Feingold passage. I would have to check the legislative history but I'm a little concern ed is an application in a manner not consistent without this has been in the past but the way we have looked at personal use, I think we get a lot of clarification about what that test was intended to accomplish by looking at the list which is admittedly nonexhaustive but when we look at country club Mrs. , payments to the benefit of the officeholder . I don't see what is being proposed here as fitting within the nature of the categories listed there and like I said I think if we are going to apply the irrespective test in a manner proposed by draft B we are going to find a lot of members that may have used their campaign funds in the past to maybe run for mayor or a state office or governor, they might be shocked to find out they may have been violating when they did so. >> Mr. Hunter? I agree with everything that has been said and in the -- officeholders donating 2501 C-4 ? I think that is a different situation. Current officeholders who have ongoing political needs to ingratiate themselves with various constituent groups could well decide it is related to their current campaign to give money to certain charities, to certain C-4 's who are popular among their constituents. That could be a campaign purpose assuming it is not something that falls into the personal use restrictions. What if in doing so would enhance their personal reputation? You're still not looking at the words of the statute, Commissioner. I think the opposite is true. >> I think we're going to have to agree to disagree. Would you like to go to motions? I don't want to cut off debate but I'm not sure we are accomplishing anything here. As I said in the last open meeting on this, and I know Mr. Passantino has his reasons for filing an advisory opinion request but I personally don't think he even needs the protection and as he said I have significant concerns about certain commissioners moving in this direction for all the reasons that have been discussed but I am happy to move draft A. With any of my colleagues support draft D other than Commissioner Peterson if I moved that? Would you be willing to vote for draft D which is the person for office of General Counsel saying this was okay under any lawful purpose provision of the statute? >> I think the unlawful purpose provision is something we have to look at but in this particular case you have a situation where we can't do it in the C-4 with the C-3 so let's just do it under unlawful purpose and forget about it and I don't think that is the proper way to proceed with what we are accepting or rejecting as the case may be as we go through this. I don't think that particular phrase is going to carry the day. I know we discussed it and I understand the concerns but I also have concerns about the fact it is so wide open that under the bylaws which we haven't seen to see what they really say but in theory under the bylaws you can amend them at any time in the theory is that could be any one person and could basically do a slug of different things. It is so open that raises some concerns with me. I will move draft A which is the one we discussed at the last open meeting. Again I was willing to support draft D if my colleagues were willing to join on but there is no indication of that so therefore approve 19- 33 A otherwise known as draft A. Commissioner huntress moved with respect to advisory opinion respect the commission adopt agenda document 19- 33 A which is called draft A in response. Any discussion the motion? If not I will call the question. All those in favor say aye . Opposed? No, no. Motion fails . Commissioner Walther, D went to make any motions? >> Excuse me, somebody wants to interrupt me. >> Let me just say considering the to know drafts, I would prefer draft C but I would support draft B as well and that is the one the chair supports . I would support adopting draft B. I believe Commissioner Walther has a [ Indiscernible ] with respect to advisory opinion request 2019-10. Any discussion on the motion? If not I will call the question. All those in favor say aye . Motion fails to-two. 2-2. There is nothing left for counsel the commission was unable to render a response. >> Sorry Mr. Passantino, it is not personal. Thank you. The next item we have three notices of availability. We have been getting a bunch of petitions and the first one is with respect to regulation 2019 -02 two them and 11 CFR section 104.5 C. >> Madam Chair if I could note there are three of these on the agenda today and asked the document on the public record notes, but essentially we are required by our regulations to put these out and it doesn't mean we are in favor doing these rule makings, again our regulations require us to put that out. I would like to consider in the future amending that. I just want to think about whether or not that makes sense. There was an article a few weeks ago that in my view was grossly misinterpreted what we did in the commission. We put out one of these notifications of availability and it made it seem like this was something we were really considering when we weren't and in these cases we are putting it out for the public to get comment from the public as to whether or not we should engage in the rulemaking so I went to make that statement. I intend to support but I wanted to make that clear before we vote on these three. Thank you. I appreciate your concern. It is often the case people miss report on what is actually going on but I do think it is a valuable method for citizens to reach out to their government and try and engage with the public and engage with the commission in see if they can get public support for what they view would be positive changes in the regulation. I would be open to see if there is some language we could use to clarify what is actually going on but I would probably not be open to trying to shut off that pathway for citizens. I hear you. I agree there should be some pathway for citizens to do this. It is easy to misinterpret and there is some language as I said in the public memos and something we can see more forcefully in the future about considering this but I did speak to the reporter and she did call your office before she wrote the story. I went to say that is something that is something we need to consider. The chair's office usually gets the press calls and I don't recall speaking to them. She spoke to one of your staff members. To support your comment, I think we need to do something and that has been a concern of my own in what that means to the public in terms of acceptability or who is behind it and that kind of thing . >> Madam Chair, I just wanted to add to what is being said. Under our regulations we have this method by which interested citizens groups can file a rulemaking petition and if they meet particular requirements the commission is under an obligation to make sure this goes public input on the Federal Register and it is made very clear in section 200.3 of the CFR the Commissioner will publish a focuses [ Indiscernible ] a common period is put in place and that same section in subsection D it says [ Indiscernible ] this is a mechanism by wish [ Indiscernible ] the public as an opportunity to weigh in and the Commissioner at later point can make a decision of whether or not to proceed with the rulemaking. We are at the ministerial stage and we are under an obligation to consider the merits of the petition so for the sake of making sure everybody understands what procedural stage we are at right now, it is useful to have the clarifications the other commissioners have mentioned. >> Mr. Knop, would you like to tell us what is in this petition ? Thank you Madam Chair a good morning commissioners. Before you is a petition for rulemaking receipt from the campaign legal Center. The petition asks the commission to amend one of its regulations to require any unauthorized committee that starts an election year as of the quarterly Byerly to continue to follow the quarterly reporting schedule through any primary elections in which the committee is involved. If approved the draft NOA will be published in the Federal Register in the commission will receive public comments for a period of 60 days. Thank you. Thank you. While my colleagues are correct, the fact we are going to publish this in the Federal Register is not an indication on the ideas expressed. I personally think this does raise an interesting and important idea and what response to is committees, not candidate committees but super PACs in particular have been gaining the system and they switch their reporting filing basis, they can do it on an annual basis under the rules but they are doing it in a way as to leave the public in the dark before important primaries because they switch strategically and then their information will come onto the public record eventually but not necessarily before the primary and we have seen entities that pop up right before an important primary or election and manage it so they don't have to do any reporting until after the election which defeats the purpose of providing this information to the citizens so they can know where the support is coming from before they actually vote. I think this raises an important issue and an issue I've been concerned about for a number of years and I think this suggests a new approach which is to say they could not switch before the primary . Another way of looking at it would be to say you can only switch on an election cycle basis rather than an annual basis. I think there are various ways to address the problem that has arisen but I'm looking forward to public comment on this but my initial take is I am actually in favor of doing something along these lines. I don't know if there is any interest by anybody else or if anyone else cares to comment. Seeing nobody, I will entertain a motion. Commissioner Hunter ? I move approval of notice of availability for 2019 -two met, notification of availability . Commissioner Hunter has moved approval . About proposed regulation 2019-02 . Should the motion pass it will be published in the Federal Register. There will be a 60 day comment and as I said I look forward to seeing this comments. Any discussion on the motion? If not I will call all in favor say I . The motion passes unanimously. The next item is another notice of availability for regulation 2019 -03, mailing list exchange . Mr. Buckley. >> Good morning commissioners. Agenda document 19-38 -A contains a petition for rulemaking submitted to the commission by the campaign legal Center. The position asked the commission to it is an by political committees to specify the regulation applies to the receipt or disbursement of a mailing list even if the list is received or disbursed as part of an equal value exchange. The notification seeks comment on whether the commission should commence a rulemaking and the comment period will run for 60 days . After the comment here it has concluded and after the comments have been considered the commission may decide whether to initiate a rulemaking. I'm happy to answer any questions you may have. Do we have any questions for discussion? And move approval of agenda document 19- 38-A . Any discussion on the motion? All in favor say aye . Motion passes unanimously. Thank you Mr. Buckley. The next item on the agenda is notice of availability for regulation 2019-04. Reporting segregated party accounts. Mr. Buckley. Thank you again. A draft notification of availability for petition for rulemaking . The petition has asked the commission to promulgate rules to require reporting deep special-purpose accounts created by the consolidated and appropriations act of 2015. The notification seeks whether the commission should seek rulemaking based on this [ Indiscernible ] after the comment appeared has concluded and after the comments have been considered they commission may decide to consider rulemaking. Thank you Mr. Buckley. Any questions or comments ? These accounts have been on the books for years and there is nothing in a regulation that acknowledges their existence so this is something I again have been concerned about. I think it would be a good idea to update our regulations so they reflected all the ways people can give to the party committees under this law. I'm looking forward to comments and we will see what happens. Commissioner Hunter ? I move approval of agenda document 19-39- A. A notice of availability for regulation 2019-04 on reporting segregated party accounts. Any discussion? If not all in favor say aye . The motion passes unanimously. Thank you Mr. Buckley. >> The last item on the agenda, almost last is the audit division recommendation memorandum on the South Dakota Democratic party, A 17-21 . >> Thank you Madam Chair. Good morning commissioners. Before you as the audit division memorandum on the South Dakota Democratic Party, the draft final audit report known as the DFA are was provided to the committee on July 1st 2019. And is attached . The committee responded to the DFAR . The ADR and provides recommendations for each of the following three findings. Finding one, statement of financial at Tiffany increased activity. Contributions from unregistered political organizations and reporting of debts and obligations. We are available to answer any questions you may have. Any questions? >> We just needed some extra time to consider some things and thank you for answering some questions but I think I am prepared to approve it. I am generally supportive of the recommendations in their. I believe there should be an additional finding with respect to joint fundraising. This is one in a series of committees engaged in these massive joint raising committees were money changed hands very quickly between one committee and another in a way raises issues under the contribution limits. I intend to for support a motion to add a finding on joint fundraising but after that I intend to otherwise approve the document which I think is sound and the right approach. Do want to make your motion? That makes sense. Do you want to make the motion? >> Commissioner Walther Thank you Madam Chair. I move the commission make a finding that the South Dakota Democratic Party violated the joint fundraising regulations when they received $2,494,000 in net proceeds from the [ Indiscernible ] committee and the same day transferred to the Democratic National Committee. Commissioner has moved and audit of South Dakota Democratic Party the commission make a finding the South Dakota Democratic Party violated [ Indiscernible ] when it received $2,494,000 net proceeds from the Hill the three and transfer proceeds to the Democratic National Committee. Any discussion on the motion? If not, all in favor say aye . Opposed? No. Motion fails 2-2 . Do we have another motion? I move approval of agenda document 19-40 -A . Commissioner Hunter has moved approval of agenda document 19-40-A , the audit division recommendation memorandum in A 17-21, the audit of the South Dakota Democratic party. >> Any discussion on the motion, if not I will call the question, all in favor say aye . The motion passes unanimously . Thank you Mr. fave and. I have been reminded I was remiss at the beginning of the meeting when I was welcoming Mr. Skinner and congratulating Mr. [ Indiscernible ]. We are happy to welcome Christine McLaren to our office of General Counsel as our new assistant general counsel for administrative law and comes to us from the Department of the Navy Bureau of medicine and surgery where she served as the deputy counsel and we are happy to have her in expertise and we want to thank Robert Knop for serving while we were doing the personnel hunt . I am pleased we are moving to put permanent employees into a number of positions. We appreciate this is step up and serve as an acting position but it is better for the agency to have a permanent basis so I'm glad we are making some good progress on that front. Any management or administrative matters to discuss? Madam Chair, we have no such matters. In that case, this meeting is adjourned. >> [ Event Concluded ] >>