This file contains archived live captions of the open meeting of the Federal Election Commission held on March 10, 2022. This file is not a transcript of the meeting, and it has not been reviewed for accuracy or approved by the Federal Election Commission. _________________________________________________________________________ Please standby for realtime captions. We will move to our second item, revised form one. Good morning, counsel. Good morning, Mister Chairman. Good morning, commissioners. The agenda document contains instructions for form 1, which provides options to register as a committee with only expenditures. Whereas a committee with only expenditures. Also attached is a justification of the changes we sent to Congress, along with the revised form and instructions along with the view of the revisions. The instructions will become effective 10 legislative days after the packages received by Congress. Thank you and I will be happy to answer any questions you might have. Thank you very much. So, first of all, with regard to form 1, is it a legal document or an accounting document or what kind of document -- I think it is more an administrative document. It allows the administration of the registration process. It doesn't have any legal significance for us, as far as the same information could be submitted in some other form and it would be okay? I don't believe so. I think committees are required to file the Form 1 in order to register with the commission. Mister Chairman, if I could. Go ahead, counsel. Actually the way the requirements are written in the legislation, they are required to submit Form 1 or the information asked for in Form 1, in another form that they choose. So they could submit a letter containing the information that is asked for or covered by the Form 1 and that would satisfy the requirement of the regulation. Perfect. So currently how are organizations delineating themselves as independent expenditure only committees? They file the Form 1 indicating they are a non-connected committee and they file a letter along with the Form 1, which was described -- give me a second. I can find that language for you. Contained an attachment, which was approved by the commission, containing language that states, this committee intends to make independent expenditures and consistent with the U.S. Court of Appeals decision it therefore intends to raise funds -- this committee will not use those funds or contributions whether direct, in-kind -- to federal candidates or committees. So currently, organizations that are filing don't use the term super PAC when they're filing, correct? Correct, not if they follow that particular language. And it is particularly important for us to be precise in the language that we use, correct? It is. If I may, Super PAC is a rather well-known term. It is used elsewhere on the commission's website to describe the particular type of committee. Okay, let's talk about where did it originate and how did it move into our lexicon? I do not know that. Oh, I know. They came up with it and it took hold. I agree, that is where it came from. Has the commission previously considered how to appropriately define the term Super PAC, such that it would be a term that we would use? I don't believe the commission ever attempted to define the term, no. Was it included in rulemaking? Mister Chairman, Mister Chairman, if I may. Go ahead. There was an attempt 10 years ago or more to undertake a making where the nature of these organizations would've been described and explained in the rules. However, for a number of reasons, that effort never really got off the ground, past the initial stage for notice and it remains a dormant, yet pending, matter. Those were the rule makings following the speech now and Emily's list legislation? Yes, in fact I use to refer to it as the Emily's list -- Great. Mister Chairman, I think that is all the questions that I have. At the appropriate time, I would like to make a motion to strike the use of the term Super PAC, from the form and instructions. Just to give a little bit of background for this, I think the commission itself needs to be very particular about the information we require from individuals that file. I think we have an obligation to be as professional as we possibly can in the documents we put out into the information we give to the public, to be as precise as we possibly can. I think that the adoption and use of the term that was 10 years ago considered by the commission and tried to be defined and has not yet been defined by the commission, but now, inserted in a form put out for the public view. I think we're back to adopting the term and a leading usage that is not very helpful. I think calling those organizations expenditure only committees is appropriate, because that is what they are. I think it avoids confusion between those types of organizations and ones that came out of the litigation. Thank you. If I may, Mister Chairman. I have a thought. I appreciate everything that Commissioner Trainor has said. I just want to point out that the form itself does not require any committee to self identify as an independent expenditure only committee or as a hybrid committee. It is entirely voluntary for them to check those boxes. The form instructions do not say anywhere that they must check one of those boxes if they are one of those entities. And we were very careful in making sure that it did not, because actually we can't require them to check either of those boxes. However, what I will say, as with the volatility letter that needs to be attached to the statement of these organizations, it is basically to their benefit to do so, if they choose to. Because if they don't find a way, by checking a box on the form or by submitting a letter as an attachment to the form one, then they are going to get find for what seems to be the receipt of impermissible or excessive contributions. So I would argue that there would be no interest to do so. However, just wanted to clarify that neither the letter, that is an attachment -- is required, nor would checking either of those boxes be required with the form revisions. Thank you, counselor. Thank you, Mister Chairman. I appreciate my colleagues desire for precision. That is a good thing. I will note that the form, which I intend to approve as is, does specify independent expenditure only committee. And on the next line, political committee with both contribution and non-contribution accounts, hybrid. So those types of committees are distinguished. I think it is useful to have the term that everybody uses on the form. Credit where credit is due. It took me a second to come up with her name. For whatever reason, that name took hold. Everybody calls them that. I think for the ease of the public, figuring out what the different committees are and for journalists who are looking into it, I think it makes it all more accessible. Having said that, I would welcome the opportunity to do rulemaking on super PACs. We have not done any rulemaking addressing the many facets of super PACs and how they have infected the political system since they came into creation in 2010 and it is long overdue. There are many regulations that we have, coordination regulations, that were written before super PACs and did not anticipate their creation. I personally don't think they can sustain the weight of the developments that have happened since those were written. They are really out of date now. So if my colleague is interested in working on that rulemaking, I would welcome the opportunity. Any further discussion? Any motions? I would move the adoption of Form 1, with the amendment of striking the term Super PAC wherever it is found on the form and the instructions and the explanation and justification. I need a second for the motion. Thank you. I will not be able to -- For slightly different reasons I will also not be in support of the motion. Someone very wise once said that missions that should not be trusted in small matters should not be trusted ingrate. This form has been something we have been hoping to get done for a long time. And I have a great deal of sympathy for the points and we have been conducting this discussion into thousand 10, when the need for the form arose. Probably dealing with different language. With the passage of a dozen years, I do agree that these terms, while imprecise, have taken root. Some confusion to casual observers of our work. Whereas I am sure that sophisticated counsel would understand. all in favor? Opposed? No. Chair 1025. Excuse me, Mister vice chair. The motion fails with three in favor. Three opposed, myself, Commissioner Broussard, and Commissioner Weintraub. Any further motions? I move approval of the document -- Thank you. Commissioner Weintraub. Any discussion? All in favor ? All opposed? The motion passes with five in favor. One opposed, Commissioner Trainor. Further business on this agenda item? Seeing none, we move to our third item for this morning. Audit Division recommendation memorandum on Mike Braun for Indiana, matter A19-02. Good morning, Mister Chairman and commissioners. Before you is the referendum on Mike Braun for Indiana. The committee requests an audit hearing which the commission approved on October 12 and held on November 10, 2021. We provided new documentation that is reflected before the commission. It provides the audit staff's recommendations for each of the following findings in the report. Fighting one, the statement of activity. Finding two, failure to file 48 hour notices. File three, disclosure of occupation and/or name of employer. Finding for, receipt of apparent prohibited contributions, loans. Finding six, disclosure of memo entries and candidate loans. Given the impact of the decision, we recommend that we refrain from finding five and finding seven, prohibited candidate personal loan repayments, until the court issues its decision. Please note that the contributions from individuals would still be viable even if the limitation were struck down. On the decision, audit staff will recommend for the commission's consideration, disposition of the two findings. In light of this, it may be beneficial for the commission to consider each finding individually. We are available to answer any questions. A quick, preliminary question. Is there a stay of the court's order -- There is not. Thank you, Mister Chairman. Since this is a public meeting, for the members of the public, I will throw this open to anybody who wants to take this. The process in this audit was unusual. Usually when we have a ADRM, Audit Division recommendation memorandum, the draft final audit report attached is in sync with that recommendation memorandum and supports each of the recommendations. That is not the case in this instance. I think it would be beneficial to explain how we got to this juncture and why these documents that we have in front of us do not actually match up. Mister Chairman, if I may. Good morning, thank you Commissioner Weintraub for that question. I think that is a good idea. The committee responded to the DFAR on October 4 and at that time they also requested an audit hearing. The audit hearing was conducted November 10. Prior to that hearing, the committee provided a lot of documentation associated with finding 4. There were a lot of records with that and once we had a chance to go through those records, that changed audit's position, because the documentation showed -- had that information been responded in response to the draft report or the interim report, then the ADRM in front of the commission today would have stated that. As far as any situation dealing with the Supreme Court decision and Ted Cruz, the audit report was adjusted based on the stage that decision was on. We are now at the stage where the Supreme Court is still looking at that matter and has not finalized a decision. At the time of the draft audit report, they were challenging the decision. So that is why it was going the way that it was. Thank you. That was very helpful. Let me start with finding 4, because that one is not affected by the litigation. But the recommendation changed based on documentation supplied. As I said, normally we would have a draft final audit report attached that would go into great detail as to what those documents were and how they supported the recommendation. We don't have that today, so could you or one of your colleagues please provide a little bit more elaboration on the documents that were provided and how they supported the new recommendation? Mister Chairman. Go ahead. So the committee provided I believe around 12 or 13 documentations that supported that. The included letters from the bank that described the process the bank used with providing loans to candidates without any type of collateral. If the candidate is considered high net worth. The letters from the institutions verified that. As far as the other part of the finding, finding 4 part B. The committee in response provided a letter but there was no other documentation to demonstrate what was reviewed. What supported that 1.5 million, so again, when the committee provided information prior to the hearing, that included more documents to support the letter. So once we had all of that information in place, we were able to see, yes, these were documented and not prohibited. But it was a lot and right before the hearing in response to the audit report or in response to the draft final audit report. If I may add, this is information the committee needed back in 2019. Again, the audit report which the committee received in February 2021. Commissioner. Thank you, Mister Chairman. So just to be clear, does the additional documentation that we received with respect to finding 4 A, demonstrate not only an assurance of repayment, but also that the candidate was treated similarly to similarly situated individuals? That this was not a special favor for a political actor, but rather the same kind of loan would have been available to another individual of similar -- in a similar financial situation? Yes it does. One more, Mister Chairman. Of course. Thank you. I think Mr. Krogen alluded to this earlier, but with respect to finding 5, if the Supreme Court affirms the lower court ruling and the regulation is conclusively struck down, would that resolve the entirety of finding 5 work with their potentially be some contributions that would still be in excess of the limit? Mister Chairman. Yes, Commissioner Weintraub. If the Supreme Court decides to uphold the ruling or strike it down, there would still be a material fighting for subsequent contributions from individuals. The amount would go down but we are still looking at roughly over 700,000. $700,000? In excess? Correct, for individuals. So not an insignificant amount of contributions. No. That would not be resolved, regardless of what happens with that regulation. Right. The lower court decision, whether on the books are not on the books, we still have $700,000 in potential access. Yes, though it will no longer be material, so that would not be there. But for individuals, yes. Thank you. Colleagues. Any further questions or discussion at this time? Any motions? Commissioner Weintraub. Thank you, Mister Chairman. I move approval of agenda document 22-04-A. I suspect there will be a series of motions here. To be clear, I am unwilling to support the findings that rely upon the joint regulation and I understand the regulation to stand aside and allow the Supreme Court to do its work. If there had been a stay of the lower court order and are regulation remained in force, I would probably take a different view. Given that there is not, the courts opinion does in fact order is not to apply that regulation. Giving it a sort of zombie existence by allowing it to nonetheless influence our decisions -- with that possibly minor disagreement. I'm sorry, I want to confirm as well, with the vote that is on the table, if there is disagreement with that, that means if some of those items, if we don't receive the appropriate votes, it would go to other issues. I wanted to highlight that and the reason being is I think our auditors also stated it might be better to take each finding individually. Just a thought. Thank you. You preempted the second half of my speech. That is exactly right. We have a motion on the table. From Commissioner Weintraub. I am trying to give some public content on whether there may be disagreements. Any further discussion? It is my understanding -- I had a little bit of an echo. It is my understanding that my making this motion, I am not precluding further motions that would take the individual finding -- I thought I would get that out of the way. I expect you are decision, Mister Chairman. The ADRM does not recommend taking any action based on the regulation at issue. So I agree with you, it is a minor disagreement. But I respect your position on that. Of course, I appreciate that. I would also note that in action is action, so there is maybe a deeper philosophical question. Any further discussion? Mister Chairman, if I may. I wonder if I might ask Mister Calvert to weigh in on whether or not we might be able to consider each individually. My understanding was were this motion to split, 3-3, that we would consider each of the findings before the commission and reconsider them individually. It would require the need for a motion to reconsider. I just want to make sure that we are able to subsequently consider them individually. Thank you. That would be a departure from usual practice, but I will ask the parliamentarian his view. Mister Chairman, I hate to disagree with my colleague, Ms. Brown, but I believe the motions would be sufficiently different, because each of the motions would take only finding. Those would be significantly different enough from the omnibus motion now pending. So that they would all be in order. Thank you, sir. I concur. Any additional discussion before we take our various motions? All in favor of Commissioner Weintraub's motion? >> Aye. Aye. Commissioner Broussard, please. I wasn't sure if you heard me. I was joining and saying aye. That was helpful, thank you. All opposed. The motion fails with three in favor. Three opposed, myself, -- further motions? Mister Chairman, with regard to the audit before us, I moved to reject findings 5 and 7, in accordance with the order handed down by the U.S. District Court and approved by the Federal election commission. >> Commissioner Weintraub. Thank you, Mister Chairman. I completely understand, but there is still $700,000 of potential excesses. In finding 5. Whether or not that regulation is on the books, there is still $700,000. That is a lot of excess. I wonder if there is some way of -- Thank you. Commissioner Trainor, would you be willing to entertain a final amendment to finding 7? So, let me amend my motion then at this particular juncture, to move to reject findings 7 in accordance with the summary report. Thank you. All in favor. Aye. Opposed? No. No. I'm sorry, I am afraid I am not able to record your vote. No. Thank you. Not to worry, these are exciting, modern times. The vote fails with three in favor. Myself, Commissioner Trainor, Commissioner 1028. Further motions? Commissioner Weintraub. I think I have a positive motion that might get support. Please. I would like to move approval of findings one, three, four, and six. Thank you, I suspected that would be the motion at the tail end of this, but we can take them in any order. Any discussion of those points? Seeing none, all in favor? Aye. Mister vice chair? Aye, sorry. There you are, sir. Not to worry. The motion passes unanimously. Further motions? Mister chair, I would move to reject finding 5 in accordance with the summary judgment order handed down by the U.S. District Court. Thank you very much, Commissioner Trainor. A question on the impact of this motion. Assuming, as I suspect, that it fails, what will be the impact in terms of this finding on the final report? Mister Chairman, if I may. Of course. If finding 5 splits 3-3, then it would appear in the additional issues section of the final audit report. Thank you, that was my understanding. Any further discussion? Seeing none, all in favor. Aye. Opposed. No. No. The motion fails. I am sorry, Mister vice chair, are you abstaining or voting against? I am voting against, sir. Roger. The motion fails. Three opposed, the vice chair, Commissioner Broussard, Commissioner Weintraub. Commissioner Weintraub? Thank you Mister Chairman. I did not draft this in advance, but I will make a stab at it anyway. I move approval of finding 5, only to the extent it encompasses the individual contributions and not affected by the existence or nonexistence of the regulation at issue and to explain that, as stated earlier, it is $700,000 in potential excesses that would still be excessive, with or without that regulation. I understand your position on the regulation. I understand your position on the litigation. I respect that. I don't know why we would give up on the $700,000 in excesses. I appreciate the motion. Same question, Ms. Brown. What would be the impact of Commissioner Weintraub's motion, should it pass and should it fail? Apologies, Mister Chairman. Reading through directive 70, for any recommended finding for which there are four or more affirmative votes to make a different finding from that which was recommended by the audit division, we will place the recommended finding with the discussion of the finding made by the commission. If it passes, it will appear in the report. If it does not pass, I don't believe it would appear in the report at all. We would continue to present finding 5 and the additional issues for the motion that was taken by the commission. For the benefit of the public, what is the practical import of something being in the main report versus additional issues? If the finding is in the body, the main portion of the report, it means the commission found consensus with at least four commissioners. If it appears in the additional issues, it does so because the commission did not find approval from at least four commissioners. Further discussion for Commissioner Weintraub's motion? Seeing none, all in favor? Aye. Aye. Aye. Opposed. No. No. No. The motion fails with three in favor and three opposed. Commissioner Weintraub. Thank you, Mister Chairman. If I might ask my colleagues, why? Discussion? I will take a stab at it. Commissioner Trainor. My concern is, even though the explanation we received with regard to the potential for the $700,000, the potential that exists with litigation, leads me to believe that there is more confusion around the particular issue and until we have a definitive decision from the court on that, we can see what the court has to say about it and given that there is no stay in the underlying litigation, I have no idea how far the Supreme Court will go in addressing the issue. Are they going to be very narrow? Will they come out and be very broad? The fact of the matter is, that issue is before them and since we don't have a stay of the underlying court opinion, I don't think it is our position to come in and say yes or no, one way or the other. Thank you, Mister Chairman. Not to belabor the point, I get all of that, but there is still another $700,000 that is unaffected by that. It does not have anything to do, assume that a broad decision comes down and the regulation is completely struck down or alternatively, assume that you are relying on the fact that the lower court has struck it down and there has not been a stay. I completely get that. Even without that regulation on the books, staff is telling us that there is potentially $700,000 in excessive contributions, unaffected by that. I don't understand why we are putting that aside. Speaking for myself, it is what you said, potentially $700,000. Your motion would have delegated the decision as the interpretation of the order to staff. If we had an order in front of us it is possibly likely that I would agree with the analysis. But rejecting that, hypothetical reading down the road, and instead having it discussed in the additional issues section instead of the body, that is the distinction for me. Okay, thank you for the explanation. Of course. Is there any further action to be taken in this matter? In that case, Mister staff director, are there any management or administrative matters the commission needs to discuss? Mister Chairman, there are no such matters. Thank you very much. We stand adjourned. Standby. [Event Concluded]