This file contains archived live captions of the open meeting of the Federal Election Commission held on August 11, 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. ________________ Madam chair, you may begin when you are ready. Good morning. This is the federal election commission for August 11, 2021. There is only one item on our agenda today. Is an advisory for the 2021. Submitted by Congressman Scott Fitzgerald. This matter was held over from our July 29th meeting . we are joined today by Jesse Augustine. Counsel for the requester they are available to respond to questions of the commissioners may have. And welcome to both of them. I believe they are online. They are welcome to turn the video on . we also have Kevin M. Paulsen to discuss the matter. I will turn to counsel. Thank you, Madam chair. Good morning, commissioners. Before you our agenda documents. 21-33-A, and Karen B that is a request from Scott Fitzgerald if this is affiliated under the commission regulations. And if so? If the leadership could receive unlimited transfers of funds from the state committee. If the proposed transfers are permissible? The request further asks if the state committee must notify its contributors that their contributions are subject to the contribution limitations. Draft a concludes that the requester can engage in the activities as proposed for the state committee must notify its contributors to their contributions are subject to the provisions and limitations. Draft be the opposite conclusions. That the requester cannot make the proposed transfers. We did not find any comments on the request . we received one comment on draft a in the campaign legal Center. We would be happy to address any questions. Thank you . Thank you. And let me ask my colleagues are there any questions? Thank you, Mary - thank you, very much and since we have counsel for the requesters here and I would be happy if there are any questions from Ms. Jessie Augustyn on in the of the two drafts or the information laid out or represented, today . This is Ms. Jessie Augustyn. Thank you for your time today. And considering this. And I would also like to thank the staff for their kindness and diligence in setting up this meeting. We are here to advocate for draft a. We think that it makes sense and the commission has previously recognized similar relations. Between a state committee and an unaffiliated pack. That could become unaffiliated. And if they've been able to make unlimited transfers between themselves, previously. Kind of just to keep this short. What we would say is the fatal with 21-33-B is that it seems to think . Or cause it that it has superseded these regulations that have allowed these to be affiliated. That is just not the case that the federal regulation that are cited in draft be . 21-33-B about the candidates authorized committee . The authorized committee is not the question here today. That would be that Scott Fitzgerald for Congress and that is involved. We are talking about the pact and the state committee. And I've mentioned previously, the commission is allowed those to be affiliated. Make unlimited transfers between themselves and and of course subject to all federal regulations like source restrictions and recording requirements. I think that is really the short answer. If that helps or if you have any specific questions? I would be happy to delve further in. Madam chair? I understand. I was looking at the big print that goes across. Thank you. I appreciate you letting me know. Ms. Jessie Augustyn, thank you are there any further questions from my colleagues? Thank you Ms. Jessie Augustyn for your answer . Approximately how many donors are there to the state entity that we are talking about? I do not have an exact number in front of me. But typically the commission would look at the dollars in the current state account. And the lack, dollars in what would be transferred over to the federal pact. It would be considered those dollars. Off the top of my head I would say hundreds? It would really depend on how much the state committee would end up transferring to the pact. We do not have a number right now. The other thing we would say is that the companies are - comedies are deemed affiliated. He would have to make sure that any of those donations would be beyond what the federal limitations would be. Or have any source restrictions from those -- committees. Or coming from a government contractor a state candidate we think is highly unlikely that there are federal contractor dollars in that account. But we have to to be sure that I would not have an exact number. You feel confident that your client can go through and officially engaged in that process? Yes. The campaign finance restrictions are very similar to the federal restrictions . In terms of what money you can take, the contribution limits are actually lower. It is just be a matter of due diligence to make sure there is nothing outlined. That perhaps got missed working in. Since the Congressman Scott Fitzgerald has become the congressman and not a state candidate anymore he has not been accepting donations into the state account. That would not be compliant with any sort of federal restriction. So yes. I think with some due diligence it would not be problematic for those funds to - transferred over everything would be recorded. First for the state committee would convert to the federal committee and comply with all federal regulations like a federal committee. It would take some time and due diligence but not problematic. We should not have any concerns whatsoever with regard to the transparency of the donations? That we are talking about here? I do not believe so. There are lower thresholds for recording requirements than the federal government does . All of our donors have to include their addresses . We would obviously be able to contact all of their donors and let them know there money is subject to federal restrictions. All of that is transparent on the front end. After the committee would get converted? Any source money would be recorded at the federal level. There should not be any transparency issue. Okay and let me talk a little bit about the passage of BIKRA . And the regulations associated with it. It is my understanding that in previous opinions we had allowed these types of transfers. And we only superseded those advisory committees and opinions to the extent that an authorized committee can be affiliated with an unauthorized committee. Is that correct? That is my understanding, yes . Thank you, Madam chair that is all the questions that I have. Commissioner Weintraub? Thank you. I admire your confidence when you said the commission has previously sleep allowed this. Can you provide more detail on this? When exactly did the commission previously allow such an arrangement? Specifically I was referring to the comps and the opinions. The committee was allowed to be affiliated with a federal pact. But the state committee? It was pre-tran29 so the laws changed fairly substantially since then. And the Thompson committee was not controlled by a federal candidate. Yes . That is correct. That is a fairly substantial distinction. >> It would seem to be at first. But for the federal regulations regarding the leadership pack? As the previous Commissioner was commenting. It did not actually supersede the Thompson decision. They talk about the authorized committee. And the authorized committee is not in question here, at all. We do not see how that would be on point. In terms of superseding the Thompson decision. That would be one thing with BIKRA. And obviously the congressman is required to comply with all regulations and 21-33-B points out the recording requirements. The committee, the state committee when it is converted to a state all of these would be recorded. The state funds would be recorded. They would also have to comply with all federal restrictions, all recording requirements . There would be no question on transparency. If anything were to see that it would not be complying with federal law? It would be the same with enteral federal committee. And an e- federal committee could follow up. With an audit or additional information request. Why is this money in here? Any mistakes would have to be rectified are the congressman. >> You assert this would not be an authorized committee so we do not have to worry about that. Would it not be authorized be the congressman? How is it not an authorized committee? Madam Secretary? I do not think that Commissioner Trainor is no longer with us. Yes, I was just about to try and to find a place but he has exited. We are going to probably take a small recess. To see if we can resolve that. In the meantime. I would ask his office to reach out and let us know. So what so what I'm going to do is I apologize for cutting you off. Commissioner Weintraub. And in my apologies, Madam chair I did also not notice. We have always said that it is a moving square . The square moved and I noticed. So I am just going to ask for a five minute recess. We have had some technical difficulties today so we can make sure that the Commissioner is a able to participate. If you could just please continue to hold? We will try to resolve this as soon as possible so we can go back to your question. Thank you. [ The event is on a recess. Captioner on standby. ] >> Commissioner Trainor? Are you ready? Yes. Okay. The recordings have resumed. Thank you. We are resuming - resuming this federal election. And Ms. Jessie Augustyn ? Or Weintraub? Let me repeat the question . Unless anybody missed it. And my apologies Commissioner Trainor. That is okay. Ms. Jessie Augustyn you assert that this new committee would not be an authorized committee. But how would it not be authorized? In what sense would it not be authorized by the congressman? My understanding of an authorized committee is that the congressman has just one authorized committee. In this case is Scott Fitzgerald for Congress. Essentially there is a committee that he controls but is not authorized committees, for example of what we have here. Leadership packed. And he has his state committee . He is looking to have affiliated . My reading of it is that he has the affiliated committee of Scott Fitzgerald for state Senate . And he is separately has the authorized committee of Scott Fitzgerald for Congress. That is not involved and would not be taking transfers from either of these. But it sounds like what you are saying is it would not be authorized. But we are not calling it an authorized committee . Although, in fact he is establishing and financing maintaining and authorizing finances the establishment of this new federal committee. I am not aware of the commission ever having allowed post BIKRA ? That was not me. [ Indiscernible ]. [ Laughter ] . I would also like to ask if you had the opportunity to read the comment it was submitted of the campaign legal Center. Let me just mention. Both of them are former attorneys from the FEC and served as our policy division when they were at the FEC. They are fairly knowledgeable about our regulations. They seem to think that draft a is a legally impossible. I invite you to comment on their comment, if you have had a chance to read it and tell me why they are wrong. Because I think they are right. I do not have anything to add . Compared to what I said about the draft be -- B I do not doubt their expertise but I think that this is pretty straightforward issue. Perhaps it is the more detailed responses to not necessarily need to be dealt into it. It is up to the commission's discretion, of course. I agree it is a pretty straightforward issue. That is why I support draft be B-- thank you, Madam chair. Thank you, Madam chair. Just a couple of questions about the discussion that we were just having about the role of control a sufficient condition with this authorized committee. That is not right. Because if that were true then the leadership packed could not exist. Is that right? The leadership packed are controlled by a candidate. They are established by a candidate. We do not consider leadership packed to be authorized committees. Is that fair to say? Then that is my understanding. Yes. And that is what my previous comment was resting on. As I understand the statutory definition for an authorized committee is not subject to be controlled. Received contributions and make expenditures on behalf of the candidate. To be supporting the candidacy. Is the state committee going to be supporting Congressman Fitzgerald's campaign? No. Functionally it sounds like the state committee is just going to be a second leadership packed. And you are just going to combine the funds into a single leadership packed. Is that right? Yes, that is exactly right. Is it fair to say that it is not -- the problem with the comment is that it is impossible for a controlled, federal committee controlled by a candidate to be unauthorized. Of course that is the definition of a leadership pact. Proof, possibility is of it, right there. Yes, I would agree with that. Thank you. Commissioner Weintraub? And thank you, matter of fact, leadership PACs exists because they are authorized. But the draft eight does not say that this would be a leadership pact . it would see the way to do this would make this a non-connected federal committee. Is draft a wrong about this? Are you saying that it is going to be a second leadership pact ? It is not going to be non-connected? Committee because that is what 21-33-A says. No . We can leave this is a non-connected federal committee and the leadership pact would consider to be and those two would be affiliated. It would be the unlimited transfers subject to federal regulations, of course . And they would share a contribution limit. The same analysis applies, basically. This is Weintraub good but except there is a specific regulation about leadership PACs. And there's not a regulation that similarly allows a candidate, a federal candidate to have a non-connected committee that he controls . presumably has, in any common sense notion of what the word means authorize the committee's existence. He is creating it . I do not know what incense it would not be authorized? As I understand the word authorized by the candidate. I do not know if that is a question for you or my colleagues? Who are supporting draft a but I'm just not following this. I guess I do not want to belabor a point. I would just to the Thompson decision had laid it out nicely as what the distinctions were. That was my point, earlier that the commission has recognized this relationship before. It is not prohibited by federal law. There is no transparency concerns. As far as we can see . If there is anything else that the congressman could be doing to alleviate anything that is not in draft a ? That would alleviate concerns commissioners might have? We would certainly be open for that. Madam chair? I think this was a question that we were following up on. This discussion. Looking at Draft B . page 9 . the first full paragraph . There is a statement that the commission notes that the exercise of this discretion in the exercise of our discretion has come up a few times and not been squarely addressed. To conclude that this committee are not affiliated . And there is also some analysis. My question is that do byou agree with the State Council and the statement in draft that this is a matter of our discretion. And not a question of the application of the statute or the regulation.? Madam chair? Thank you. So this discussion in Draft B of the commission's discretion that it refers to the committee's discretion to not find affiliations. Even when two entities could be by the same candidate. For the reason that in a case like this. You could have an entity that is by the same candidate. But could not be deemed affiliated with such affiliation would allow circumvent of BIKRA soft-money contributions. They seem to be showing this authority not to find affiliation. In cases where the control might be there. That is how it seems to have exercised on a previous and older advisory opinions. That it was referring to in that quote. I agree with you. I think that we do have such discretion. And I know that because this point has been made. It is useful to quote the regulation. 100.5. And this describes what a leadership pact. A committee key dish that is indirectly established financed or maintained by a candidate for federal office or an individual holding office but is not an authorized committee. And is not affiliated with an authorized committee. Obviously we have this discretion of leadership PACs. Am I right, so far? Is there is not a regulation or other statute that bars us from a adopting draft a? I would say that draft be lays out our view that you have discretion with the affiliation contact but we continue to view Draft B 's legal analysis as correct. In response to the contention that BCRA soft-money serves as an impediment to the requester's proposed activities. Let me ask this question. The nature of discretion is cut both ways. And I understand the arguments of which direction to invoke our discretion. My question is this. Reading throughout Draft B which makes a lot of policy arguments about Draft B - BCRA. Maybe this is a question for counsel on both sides? It seems like the interest is better supported by having all of the congressman's various committees brought under the hard money umbrella. As 21-33-A suggests. Otherwise terminating this state committee that exists on the sidelines. What is the counterargument? It seems like this is actually converting -- and bringing more activity with the hard money restrictions and that is something the commission would be expected to approve? Is that a question directed to counsel? Or the requester? The policy question is for both sides. This is Jesse. And that is completely up to the commission. If you think that is a good use of your resources. I would say if the concern is transparency ? I would have a tendency to agree. The commission would have a better idea of how money was flowing. Where it was coming from . If we got rid of the state committee and turned it into a federal committee. Because the recording requirements would be at the federal level and at the state level . that seems like a belt valid point to me. I would add from our perspective. The arguments are to be made on both ways and you can make the argument that the counsel for the requester is made. I think there is also probably a counter argument to be made in the interest of disclosure. Because these funds were not subject to federal recording requirements when they were contributed. The political committee, any federal, committee committee would be subject to quarterly requirements that would disclose this contributions. Within the time frames that they were made. They were federally recorded with in the statute and in the requirements of regulations. From that perspective it is almost like you cannot put the toothpaste into the tube . as feather as test whether these -- Draft B they will be never subject to the federal laws? That is correct that is how I read Draft B. Any further questions for counsel? Are there any motions? Madam chair? Commissioner trainer? I would move for draft a. The discussion on this motion? Let me call the question. All in favor of approving a draft a? Please say aye. Opposed? No? No. Mr. Walter I am not sure if you have voted? I am sorry about that. No. Thank you. The motion fails with 3 in favor. And three voting against. Walter, Weintraub, and myself . Any further motions? Commissioner Weintraub? Thank you, Madam chair. Approval of the document 21 - 33 - be. Other known otherwise just known as Draft B. Any commission - discussion on this. Let me everybody in favor of Commissioner Weintraub - 21-33-B? This motion fails with 3 in favor. And 3 voting against . Thank you . Anything further? No? So, we are going to move on. We have the question Madam deputy secretary. Are there any management or administrative matters that the commission needs to discuss today? There are no such matters. This meeting is adjourned. Standby. [ Event concluded ]