This file contains archived live captions of the open meeting of the Federal Election Commission held on July 15, 2021. This file is not a transcript of the meeting, and it has not been reviewed for accuracy or approved by the Federal Election Commission.

[captions began approximately 60 seconds into the meeting]

     >> He has been serving the city since  2019 that has served with the agency  since 2012. As always we thank you  for your continued service. The  commission has made a wonderful  selection joining us permanently  in this position. I want to open  and to my colleagues and anyone  else who would like to join in.  I see that Ms. Stephenson is extremely happy  for this day.  

Thank you.  

I feel some of the  students just as he pointed out  it is a surprise but I think this is a happy one.  I would like to ago that. We are very happy to  have you. Thank you. 
     

Whether any other colleagues  that would like to join in expressing  these sentiments please let me know. We do not want to embarrass him but we are so happy  that we have filled the decision  thank you again. With that, we  will move on. We have some late  submitted documents this morning,  Mr. vice chair.  

Good morning. I move that the commission consider  the motion to amend directive 68 to include additional information  and quarterly status reports and  that the commission determined pursuant to the  section that business still requires the public  announcement. Move to suspend the  rules on the timely submission of  documents to consider the late submission  of this document .  

Thank you. Any discussion on the motion? Hearing and we will call the  question. All those in favor  please say Aye.  

 Aye.  
     

The motion passes unanimously. The next item on the agenda , the first item on the agenda is submitted on behalf of Representative  Robin Kelly and the Democratic Party of Illinois.  This was holdover from the  June 24 meeting. We are joined by  Charles Borden and Samuel Brown  who are available to respond to any questions. I want  to say thank you and will come again  for joining us. We also have the  office of General Counsel to discuss  the matter. Would you like to fill us in on  the most recent developments?  

Thank you and good morning to  the commissioners. Before you are  four alternative draft advisories . They respond to the request from Congresswoman Robin Kelly in  the Democratic 30 of Illinois. The  requesters,  Congresswoman Kelly was recently elected to the service chair. The  requesters have two questions. First, whether the state party may  raise or suspend on federal funds  through the account well congressman  Kelly serves as chair and second, her name and title as chair may  appear on her letterhead for solicitations  from a nonfederal account. Draft  a says no to the first question  and includes that the second question  is moot. The  other drives which the same basic  conclusion that the state party  suspend on federal funds to the  nonfederal account well congressman  Kelly serves as chair. They serve different conditions  under whether the state party may  be subject the only difference between  draft C and revised draft C  is the footnote on the page  of the revised draft. They also  reach the same conclusion on the  second question. 
     That the Congressman's name and  title as chair may not appear in  the letterhead for solicitations  for nonfederal account. Doing so  would identify the solicitations  as being sent on congressman Kelly's  behalf in violation of  the prohibition. We did not receive any comments  on the request. We did receive one  comment on the drafts. Thank you  and I would be happy to address  any questions.  

Thank you. Are there any questions or comments? 
     

I have one question for the counsel for the  Illinois party. 
     

Please proceed. 
     

I was just making sure that they  were on the screen. My question  is if we are unable to come to a  conclusion for you today, what  options are available to the party  with regard to fundraising. 
     

Thank you for your question.  We would like to thank all of  the commissioners for all of your  consideration and for your hard  work on these drafts. The question is what options with  the party have for fundraising if  the commission is unable to  reach a consensus on an advisory  opinion. Is that correct? 
     

Yes. I think it would continue  to clearly be able to raise federal  funds subject to the limits of prohibitions  under the act. Then we would have  to conduct  an analysis at that time of what  other options if any may be offered  to the party. I think pending this process they  have not conducted that. 
     

Do you think a declaratory judgment  action might be available to you? 
     

That is an option we have not  actively considered.  I think that there is certainly  a range of possibilities we would  want to take a look at in the event  the commission is unable to reach  a consensus, but  we are hopeful and excited to go  through the process and present  an option to commission.  

Thank you.  

No further questions.  

Thank you. I have a question .  The revised draft C is a draft that with some negotiation  was put forth to the commission.  Abby had an opportunity to review  it?  

Yes we have had an opportunity.  

And this is a Cooksey question. What are your  thoughts on it  
     

We think that it  strikes an appropriate balance between the important interests in reducing corruption  and the appearance of corruption  and retaining an ability for federal  officeholders to serve in state  party organizations. We support  draft C. We are  comfortable with  the modifications that  are contained in revised draft C . We would be certainly willing  to proceed on this basis. We welcome if  the commission were to adopt the  draft. We think it is also consistent  with the vision of an expanded state party organization  that it brings more  voices into the party and allows  them to be part of the  party operations. If the  commission were to adopt it the  party would be very excited to proceed  under that basis.  

Thank you. Colleagues? If there are no further questions  -- I see that the vice chair  is an muted.  >> I was about to make a motion  in light of the silence from my  colleagues. In this matter of the  adoption of the revised draft. 
     

Is there a discussion on this  motion?  

Can you clarify? I could not  hear. 
     

The motion is to adopt the revised  draft C circulated this  morning. 
     

C as in Charlie. 
     

Were you able to hear the motion? 
     

Yes I have a question. As I understand  it there were some issues at some  point. I'm wondering if those remain  or if there are other issues. 
     

Commissioner, 
     

I am always happy to answer a  question from a colleague. I am  reluctantly not going to support  the motion. I still have  the same concerns that I expressed  earlier . Although I think this is an improvement.  I am close but I cannot quite get  over the ledge on this. I do have  some concerns about a federal officeholders  who was subject to all of these  restrictions and the bipartisan  campaign Reform Act as the leader  of an organization which would be  raising soft-money , albeit through a special committee  that was run by other people. Those  concerns remain. I believe there  are certainly many ways that the  Congresswoman could serve her party  in the actively involved 
     in most aspects of his activities. 
     I certainly applaud her efforts  to increase the diversity  of the points that are represented  in the party but I will not be able to  vote yes on this. 
     

Madam chair.  

Yes.  

I am planning on  supporting the motion but I  just want to note that I think it  is significant that Congresswoman  Kelly and the state party have voluntarily  ceased fundraising  for the nonfederal account 
     pending the commission's answer  to this question. I think that a  powerfully illustrates the chilling  effect that this statute has on important First  Amendment rights for political fundraising  and spending and even more specifically because  the statute prohibits the federal  officeholders from lawfully raising  nonfederal funds under state law . It also effectively limits the  members of the party may choose to  represent them which I think is  a clear limitation on the  associational rights of party members. Essentially what we are doing in  this advisory opinion is turning the party chairmanship in Illinois  into a purely honorary role without the power to direct a  very large portion of the activities  that the Democratic Party of Illinois  engages in. My understanding is  that Congresswoman Kelly ran on  a platform of being more inclusive in the activities  that take place in the party in  Illinois and now our very act  as excluding her from the  very activities she wanted to  be more inclusive than. I think  it is very significant that we are excluding the first African-American  woman to ever hold this position in Illinois from engaging in those  activities. While I support the  revised draft C I think it is chilling that this  has an effect on First Amendment  right . 
     

Thank you. Any other comments? 
     

I propose the revised draft because  we have a committee that is willing  to put these structures  and ordinances on themselves to  be able to promote  the diversity in recognition of  the first African-American to lead  that party. I feel somewhat akin to the representative been  in this position and also appreciating  the need for diversity in the state  party with attention to what is  happening. It was a  struggle to find a way that fits  within the act and still protects the importance  of making sure that we do not have the illusion of soft-money in our  politics to come through this but  I believe that the  fact that representative Kelly is  willing to put the structure where  she takes away her involvement to  name individuals to this special  committee still accomplishes her  goal. I will be supporting it . I did present this draft I think the vice chair and Republican  caucus for working together for finding some  compromise. I understand that it  may not satisfy all sides but that  is what the commission has to do. I  understand that Esther Brown as counsel is satisfied with  the and at the appropriate time  I will be voting to support this  motion. Any further comments? I do not  see any . 
     

I also recognize that we need  to support a number of issues .  

Thank you. We have the vice chairs  motion for commission. Any further  discussion. All  those in favor please say Aye.   

Aye.  
     

A post please say no.  

No. The motion passes .  One voting against. Thank you to the office of General  Counsel and we will now proceed  to the next item on the agenda. 
     

Forgive me. 
     This is submitted  by PAC services LLC. I do not see  them but I understand we are to  be joined by counsel Dan Backer  

I am here. 
     

He will be available to respond  to questions. From the  office of General Counsel we have Joseph Wenzinger.  If you would like to  proceed please do so. 
     

Agenda document is a draft response to advisory  opinion request submitted by PAC  MS. This is treated as a partnership  for federal tax purposes. They have  several questions regarding whether  they may allow individuals to solicit and make contributions to political  committees via the online platform.  The draft concludes that the acting Commissioner could not prohibit  these proposed services and that  the proposed services would not  cause them to make, facilitate,  or be a conduit for contributions  to a registration are  reporting obligations or to be a  commercial vendor under 11  CFR .2 F . This also concludes that they  may allow individuals and corporations  and trade associations  acting in their personal capacities in the online platform. I am happy to  answer any questions you may have 
     

Thank you. Are there any questions? 
     

I have some questions for Mr. Barker.  

I am here.  

Good morning, sir. 
     Sorry this is not in person.  I am trying to understand  some of these actual predicate. 
     In your request, you characterize is pack MS how you refer  to them in shorthand?  

Yes.  

That it provides, I am quoting from the facilitators 
     the usual and ordinary fair market  price by individuals and committees looking to engage in political  speech. Is that  correct?  

Yes. 
     

Could you explain in general  terms how PAC MS facilitate  this  at the state level. This is one  of those words that can mean a lot  of things.  

Share. In general, because every state  has its own set of laws that we have to comply with but  in general a political committee  wants to support the election of  a candidate for state delegate,  for example and wants to do I mail  her or an email and or this program.  That committee can pay those services to organize and conduct activity.  

And will PAC MS provide this sort  of facilitation for  
     federal elections? 
     

It is not ruled out .  

Moving on slightly the committees and their agents cannot serve as solicitors  or PAC MS. What is  the  purpose of the?  

To incur legal fees . This  individual as an agent they may not serve as a solicitor  in their capacity for agents. My  question to you is, can you clarify that an agent  cannot serve at all and cannot serve as  a solicitor in  the agent. Putting this in more standard  English, if somebody comes in wearing  a hat of an agent of a federal candidate,  party, committee, et cetera I understand that they cannot serve.  If they take that hat off they are  permitted to serve in another capacity? 
     

I think that it is easier to  answer with an example. Dan Backer  is a fundraising vendor  or a fundraiser for candidate Smith. He would not be  permitted to use this platform to  raise money for candidate Smith  because then that would essentially, in our view, make these services  look like a vendor to the candidate  which it does not want to be. However, if Dan Backer wants to raise money  for his pal Joe who is running for  Congress we want to allow that. 
     

 It is difficult to parse that without  having that active monitoring process  in place. We do not  know when a solicitor signs up who  exactly they might be working for  at any given time. There's an element  of an inability to monitor that.  We would like to be able to trust  people that we do not want to incur  frivolous complaints that would  require these fees to have to defend. 
     

Understood. Just to clarify the  limitation is tied to  the scope of the agency relationship. At least as the contract will  be read.  

I apologize. I have to mute and  step away for one moment. 
     

I apologize for that.  The delivery company chose now to  deliver.  

Madam chair.  

Vice chair.  

We have all been there. This  is an exciting time in which we  live. So thank you. . Just so that the record is  clear I'm not sure you had a chance  to fully answer my follow-up. Am  I correct that the limitation of  solicitation would be limited to  the scope of the agency relationship? 
     

Correct.  

Turning to the ownership structure , answer this to the extent that  you can with the understanding that  it may be material to what we are  approving. Who are the owners of  the corporations that are partners 
     

I will not be able to answer  that question. I will say that it  is taxed as a corporation and the  purpose of the clarity in that regard  is that it is clear that if  there would have been a contribution  occurring it would've been done  by Corporation.  

That was one of my follow-up  question so thank you. 
     

If you cannot answer this understood  but I will ask. Are the owners  of the S corporation candidates, parties, or any of  their agents?  

They are not candidates, PACs, or party committees. They  are not  agents in an individual capacity, 
     but the management services itself  is potentially an agent of the candidates  or party committees and that they  provide party services to them,  specifically the reporting compliance  is.  

So the ownership of this corporation  is not agents . There  just federally regulated entities.  

Not in the context in which I  believe that you mean it.  

Are they  foreign principals under the meaning  of this?  

Absolutely not.  

Thank you. The supplemental information states  that  PAC MS will match clients with solicitors  .  I have been kind of struggling with  what that would look like in practice.  As I read the request, it would not be  suggesting solicitors to clients  but would be matching solicitors  to clients.  To give me an example of what that  would look like in practice?  

I think it might just be a lack  of clarity. We discussed 
     this matching process. It is essentially  that . As an individual wishes to contribute  he cannot choose these individuals  that he is aware of can essentially  invite them to solicit him. It is  not that they are saying, you should not. I think that  might not have come over quickly.  The only introductions between solicitors  and candidates , I'm sorry. Between solicitors  and the individual they are soliciting  would be between them. They would  have to know that they are a solicitor  to be invited. They might meet in  various ways off-line  but the communication has to come  from that perspective .  

So let me ask for a concrete  example in that regard. 
     

This is something where  I will use  your example. And coming in as a  client and I have a  solicitor that I know I want to  work with. How would I go about  bringing that to the attention of PAC MS? Is there  a drop-down menu or search function  where I could look the person up?  Or is it something where I would  have to, how do I get the  mechanism by which I would bring  that to your attention?  

There would be the ability for  you as a client to invite somebody  to solicit you. If they are not  on the platform it would generate  an email to the individual's email  address. Would use the platform, send an email to the automated  process to Dan Backer. He receives that  and goes through the registration  process to become a solicitor and  then can only solicit the person  who invited him. If he is already on the platform  and the act of sending that solicitation,  assuming it is the same email address 
     that the client is using that would  be a match function where it would  say he is already on the platform  and that would allow the solicitation  to [Indiscernible] at that point. 
     

If that is how this  will work, I  guess my question is, so taking  your example,  if I want to make contributions  I really have somebody that I work  with in that regard, presumably  that person can make recommendations  directly to me and is capable of using any contributions I  might make to that committee. I  guess the question is, aside from serving as the middleman  on the financial transaction, are  there other services that they are  providing? 
     

In respect to this relationship I think part of  the value is the ability to track  the contributions that the client  is making  

Several years ago in the lead  up I represented  a client who was one of several  hundred individuals who received , who a complaint was filed  against because they had inadvertently  exceeded the aggregate limits. Their  perspective was I have no idea, I was not paying attention. While  that is no longer a legal concern  I do think there are plenty of folks  that contribute to candidates that  would like to keep track of that  in an efficient manner. I know for  myself that I have been in that situation where  I supported somebody I could not  remember whether I supported them  or not. I could not say when they  called me up. I ended up having to contribute  twice. Lovely candidate, which they  had won. I  think that the issue is the ability  to keep tabs is very helpful. At  the same time, having  those funds in this process makes it easier  and more efficient, particularly  in the sense that 
     earlier this morning I received  a call for a fundraiser for a candidate  and they had asked me a month ago whether I would contribute and  I said yes. I said send me an email  or a link and I will do it. They  did and I forgot until today but  that is, from the perspective of  individuals that want  to support candidates those deadlines  matter et cetera. There is a benefit  to having those funds right there and having the solicitation as  a one click process. I could be  wrong but I do think  there's enough of a market of individuals  that will value those services.  

That is helpful. I'm not questioning  your market research. I'm just trying to understand  how this plays out in practice.  I guess relatedly and kind of a  follow-up, maybe the  intention is to allow tracking by  the clients, but the intention is  not to facilitate or  automate or handle  the filing of the reports of the  commission. It is not an internal  function for the clients. 
     

Correct. The individual client  presumably has to report to file  because the individual 
     contributors making individual contributions  with information from them that  is forwarded on to the recipient  candidate that they will contribute  to that they are filing their own  report. Theoretically, those candidates  may be PAC MS clients for reporting  but those are separate processes  .  

Okay. So the request talks about how the funds are handled and that they will automatically  withdraw from the account whatever  service he is charged for the transaction  by the debit or credit card company.  Are you comfortable confirming that  it will be charged directly being  charged for the card company. I  guess adding something on top of  it. 
     

The fee would be charged on top  so let's say, I guess  there is only one part. When the  individual put their funds into  PAC MS there is a fee that is charged.  Right now the intent is that presumably there will be  a credit card processing fee to  do this. That amount could be withdrawn or could be charged on top. It's  becoming an interesting tactical  issue which way they will have to  go on that. But either way those funds are paid by the individual  client at the point where they are  putting their money in two PAC MS.  

I appreciate that. It is helpful.  I'm not being clear  so I understand  that you are charging a fee for  service with the margin of error.  I get that. In addition to that, they  will be passing along the exchange  fee or other transaction fee from  the use of a credit or debit card.  My question is merely, will that be straight passed on  to the actual cost of the exchange  or transaction fee? Or will there  be -- yes. Is it  just part of the fee structure?  

It is just passing along the  cost. It's not included in the fee  structure. That may be something  that changes down the road. We are  learning different interesting things  that may change that. For now it  is intended to be isolated .  

That is exactly what I was asking.  Thank you. Is there likely or anticipated  to be a cost for transactions. I understand that you do have  the cost of the credit or debit card services  which will be passed along at cost.  My question is, will there be any  fee structure associated with that decision to basically make the transfer  from the PAC MS account  to the recipient committee account  ? Or the fee-for-service  will be the fee structure? 
     

The fee-for-service is the fee  structure for the process. Any individual  contribution by client A to  candidate B is  not charged by  PAC MS. That should not included  the fees   that are accrued. These are ACH  or wire transfers . There is no charge for those services.  And the odd chance that  there is a service fee that is somehow  generated, I cannot imagine what  it was but if there was some fee  it would be passed along. They are  charging on a per transaction basis. 
     

Thank you. That would also be  true of charges to and  contributors to contributions that  are forwarded by solicitors.  Using this process. So they are  not just ask  

We will not discharge the recipients.  

Right. 
     

I have a few more questions but  I am worried that maybe I am monopolizing  the commission's time. 
     >> I will take that opportunity to  jump in myself and feel free to  return. I want to  talk about the $100 fee that you  mention in the request that maybe for this. This will  be a yearly fee assessed to your  clients?  

Correct.  

Is it renewed automatically?  

We are not planning on making  it an automatic fee. There would have  to be a reminder process. Your bill  is coming up, please confirm.  

If they do not confirmed then  they are removed from the service?  

Correct. If they miss the one  year anniversary there would be  a process of, you missed the fee . Ultimately if they do not renew  the funds are refunded to them and  there will not be a charge for that. 
     

Okay. For your clients, they place  the $5000 in there and they make  no contributions at all during that  year. Is there, do you anticipate a means of returning  the funds after the completion of  an election cycle or after that  year when they choose not to renew?  What happens to the funds that they  do not take advantage of the service?  

If they choose to leave  the platform or don't renew , if they simply have money there  but don't use it the  money just sits there. There's no  interest earned on those funds nor  does PAC MS  earn interest on those funds either.  It would be weird . It would sit there. I would imagine  that it's possible after an extended  time of inactivity we might worry  whether the contributor  is alive if they are not engaging  in any way. You have  to really develop a technical solution  for that.  

And does PAC MS anticipate suggesting  a recommending candidates or political  committees  et cetera to the designated  solicitors?  

Now.  

Will the client be able to name  or designate an individual affiliated or employed with PAC  MS to solicit the clients?   

Theoretically they could but according to the policy none of  these employees will utilize this. 
     

Okay. 
     

Vice chair or colleagues,  anybody else want to jump in? 
     

I have just one question for  right now 
     are the registered solicitors, do  they receive any payment  or commission from PAC  MS  as a result of  receiving contributions?  

No.  

Thank you. 
     

That was actually efficient . Several of the questions I was  going to ask were asked by my colleagues. This is something of a take  off of the chairs question. Is there  a process in place for clients to seek refunds of contributions  and if so what does it look like? 
     

To seek a refund of the contribution  they have made to a candidate?  

Correct.  

I do not anticipate they would be creating  a process to do that. They would  have to communicate directly to  the candidates they contribute to.  

Okay.  

In which case the refund would  go back to the individual contributor  who is of course the contributor  of record.  

Right.  

So looking at this from a recipient  standpoint, is there a process  by which a recipient committee can ask for additional information? I'm  thinking of the categories that  fall into this best records. Or do they need to go directly  back to the client to obtain them? 
     

They would be able to do both.  As a practical matter, the only way they can transfer  the funds to the individual recipient  candidate is by communicating with  the campaign to get the wire information. Presumably the treasurer or the  campaign finance report. There will  be a relationship that exists for that purpose. They  can reach out and ask PAC MS.  They  will presumably have that as it  is required for the contributor. If for some reason there was  a data issue we can fix that. They  could always reach out to the contributors  and they would have the contributors  information. 
     

When we were talking earlier  you mentioned that one of the advantages  for the product is the ability to  track contributions both temporarily and things  of that nature. . Another  that is intended to review other  contributions by the donor to the  recipient for these amounts. My  question is as part of that technical  process was PAC MS  be consulting the website  or reports? 
     

No. The reporter would be just their activity through  the platform . My assumption would be anything used for that would require the  FEC reporting data. We have  thought about allowing individual  contributors to manually enter the contributors off-line. 
     

So I'm including these corporations .  

The legal entities canceled is because they are not  individuals. The solicitation limit  the individuals. It is possible. I do not  believe it is anticipated. There will not be prohibition on  it because at the end of the day  these are ultimately all U.S. individuals that would  otherwise be able to ask friends  for many. There's no reason they  would not be able to do it in this  platform. I don't know that there  is any intention that they be done.  

Thank you very much.  

Thank you. Are there any  further questions for Mr. Becker or RGC?  

I do have a question.  

Yes.  

How much longer do we have to  get an answer to Mr. Becker  

We are right on the deadline.  It is tomorrow.  

Would you be willing to give us an extension to get you an answer to your question ?  

Sure. If you felt that was necessary  evidence of course consent  to an extension. I love that you  already have that.  

I think if we could have probably  another couple of weeks it would be beneficial to both  you and the commission.  >> 
     

Thank you. With that, 
     any further questions? We will be holding this to a future open meeting. Thank  you for your attendance. 
     

The next item on the agenda is  the motion to amend directive 68  to include additional information. This was held over from the  last open meeting.  

I  do not have another substantive  presentation to add to this  robust discussion we had at the  last open meeting. As  my colleagues remember this is a proposal to expand the  quarterly status of enforcement  reports to allow us to keep track of split but unclosed  cases so that they can be uploaded  to a separate category. I think  that they are reflective of the  actual status . I recirculated these to colleagues after the last open meeting to  solicit feedback . There has not been  any response to that. I think it  is reasonable to expect based on  this reasoning that this proposal  may not be adopted today. Of course, this will be an issue I expect  to continue to come up with this  proposal and other proposals to  improve transparency and accountability for our work so I'm sure there  will be more to come. That being  said, I would  just like to have a vote on this  for the record. At  the appropriate time unless there  is any other discussion I will make  the motion to have that vote. Thank  you.  

Thank you, Commissioner.  Colleagues?  

Thank you. I moved the adoption of my amendment to  directive 68 to include additional  information with the quarterly status  reports to the commission which  is  agenda documents  21-26- a. Subject  to the edit recommended by the office  of General Counsel that has voted  to take one or more of the following  actions and be changed to has voted on the motion to take  one or more of these actions.  

Thank you,  Commissioner Cooksey. Is there a  discussion on this motion?  Non-? 
     >> I do not want to belabor the  discussion. I will not be supporting  the motion for reasons that have  been stated previously 
     

We will call the motion.  

Alison Pepper please say Aye.  
     

Aye.  

Opposed  please say  no. Thank you. I think that  this meeting has moved quickly even  though we started late. I do appreciate  everybody. Thank you for your patience  with the delay. I will turn to the  staff director. Are there any management  or administrative matters that they  need to consider today.  

There are no such matters. 
     

The meeting stands adjourned.  

 Standby. 
     

[event concluded] Standby. 
     

Good morning.  The oral hearing will now come to  order. I want to remind everyone  that today's meeting will  begin 15 minutes after the conclusion  of this hearing. This hearing  will be section  9038.2 C2. Jill Stein for  president as a principal campaign  committee of Dr.  Jill Stein. The committee requested administrated  review of the determination they  must repay public  matching funds and $75,272. As part of its review  request amid