This file contains archived live captions of the open meeting of the Federal Election Commission held on May 25, 2017.  This file is not a transcript of the meeting, and it has not been reviewed for accuracy or approved by the Federal Election Commission.

>> Good morning, everyone. Convene the open session for Thursday, may 25th, 2017. I would like to kind of make an opening comment about issues before us and not before us and what we can and cannot do with foreign investment or use of foreign money in our American political system. there is a lot of people seem to have different views as to what Federal Election Commission can and cannot do. I think it's important to try and serve an educational function in that regard so people do not have a misunderstanding what Commission cannot do. This is perhaps compleatly new on in our American history. From recent events been been made clear that money has seeped in our system that is legal and illegal and do not adequately addressed. Issues have risen to -- participate in connection with enforcement or disclosure of money -- misunctionings have occurred with respect to some of information that is provided in that regard. Commission recently adopted on September 15, 2016 to have a general council directed to prior cases involving allegations of foreign influence. General council has done that. Most recent we have available on such short notice was 15 items a couple of months ago. More than that, my thought would be in order to address the issue of same sense of priority and urgency that intended to us when voted for priority decision, I'm asking that we take some steps to provide the public with information with respect to Federal Election Commission. To that end, I'm asking staff director and those involved in creating and maintaining our website to set aside a first page or locateable page that is easily detected that relates to our role in the use of foreign money in American politics. This could include pending cases to extent to which they can have cannot be disclosed. Number and some time period of time of which before they sit in our enforcement system we can include materials that we provide when we have conferences and videos on foreign investment and would include perhaps to the extent we decide that makes sense that some of our -- under review that have been decided that are important for consideration or at least to make people aware of what they are. Basically this material would be easily located. Asking that our education department under Greg Scott who provides these information on our conventions and videos to maybe synthesize or dis-- information that is made to public and at our conferences. I'm asking general council to set aside sufficient personnel to extent that is necessary in their opinion to make sure we are able to prioritize through our system in short order including those periods of time between which complaint is filed and comes to us with first general council report Take a look at what we can do lastly to make clear what we can and cannot do in terms of providing guidance to public. Not just matter of enforcement of law. So we have lessen forcement issues. We have sessions in the past -- regulatory effort that is did not succeed. I'm not concerned with finding fault with that. It's a very difficult situation to make some judgments when some of my colleagues believe and understandably so we need guidance before we go into law trying to make up a big gap for example citizens units. I think those are difficult situations. (United) I think there are things we can do with respect to guidance or various types of parameters that are appropriate or not or even distilling what we have done so far with respect to foreign influence so that easily accessible to the public. I hope we can come forward and try to figure out ways to educate publicto to a greater degree on that. 

>> First is CRC-is 8-12. -- 18-12. 

>> would you like to proceed? 

>> Yeah. 

>> Good morning. Before you is resubmitted audited memorandum on Colorado republican committee. Revised recommendations pertaining to independent expenditure and recordkeeping for communications finding. This was based on CRC submitted on March 20, 2017. Documents with audits analysis have been provided to commission. Thank you and we would be happy any questions you may have. 

>> Questions or comments? 

>> Memorandum is proposed edit to draft final audit report? 

>> When there is a motion made to approve the draft audit report as modified by memorandum of May 2. Am I right about that? 

>> You please repeat it question? 

>> 

>> At the proper time when a motion is made to approve the draft final audit report should be to approve it as amended or edited by the memorandum of May 2. . Just being clear what we are being asked to approve. 

>> I believe the process is if this motion is approved, then edits go into proposed final audit report. 

>> Proper words of motion is will be to -- could you provide -- yes, ma'am? 

>> If I could? 

>> I would yield for a question. 

>> Stage we are at, motion to be approve the audit recommendation memorandum. Attached to that is a draft final audit report. That's not motion that's for informational purposes this is what it's going to look like when comes back as proposed final audit report that will be voted on again, we are voting on audit recommendations that are reflected in that. 

>> Recommendations apply to each findings within the report. 

>> As reflected in memo of May 2, audit division -- 

>> Not as reflected in draft final audit report. 

>> Right. 

>> Draft final audit report is -- super influence house in two-ways? Sounds like approving memorandum and not draft final audit report. 

>> I'm not sure if you're going to move the recommendations as is. I'm going to propose some amendments to that memorandum specifically with finding as to dollar figures. As to number of direct mailers that for which we don't have invoices and also I'm not convinced about it convention account. I don't know if you want to get through two motions to get through this approval. That is substance of my motion. 

>> I will have Asim plier motion to begin then. 

>> Any motions? 

>> I have one. 

>> Commissioner. 

>> Thank you. 

>> Surprise. 

>> I move approval of audit -- with respect to Colorado republican committee as set forth in 17-20A. 

>> Thank you. All in favor? 

>> Aye. 

>> Opposed? 

>> No. 

>> Nays have it. We voted in favor. Vice chair commissioner Peterson voted against. Commissioner Gibben? 

>> 

>> Yes. In the matter of audit division recommendation on Colorado Republicans committee, I move approval of 17-20-A. Dated may 2, 2017 subject to following amendments. As for the proposed finding 1-C, misstatement of financial 1/5 unreported bank account. Delete proposed finding and move issue to additional issue section of audit report with concludes that had Ed to substantiate unreported report owned and maintained by Colorado republican committee and voting that that committee should not allow EIN number to be used by organizations. Amend finding 2-A as follows. Colorado republican committee failed to properly -- expenditures 69,468,189-cents. Two of 68 direct-mailers not correlated with invoices. Colorado republican committee failed to expenditures for 51 director mailers. 13 amend finding 2-B as follows. Independent expenditures totaling 694,689. 51 director mailers for which commission does not have invoices. 

>> That's the motion speaking to it for just a minute. I think it's important if Colorado republican committee lives to this -- listens to this meeting, reason that I'm bound to find these mailers and at least one radio ad constitutions expenditures not reported, committee never came forward with after Dave visit were run for procedures for which they had contemporaneous records of people signing in and signing out. if I saw accreditable affidavit from someone that tested that all run consistent with that template, I would credit that, none of these would be mailers would be independent expenditures under volume mail. The party did not provide us sufficient evidence that that was process for implementing direct mail program. If I saw that, I would credit it and volunteer mail exemption would apply. Appear sense that -- absence that evidence, they did not properly report these directly mailers to this dollar figure at least this dollar figure as independent expenditures. I would like to note that also that there is a finding of failure to report disputed invoice that they now they that statute of limitations is run on, I think that can be resolved by amiss lanous finding retroactively and disputed debt and statute of limitations running. I'm correct, they have yet to go back and correct the record by correcting their reports to show disputed debt. I think can be resolved by miscellaneous filing. I don't think they have to revise every report. In they have not -- -- they have not done that. I understand they dispute the debt. They didn't want to disdignify the dispute. It was a disit puted debt. I'm prepared to vote on my motion. 

>> I am not prepared to vote on your motion. This is first I have heard about it. You have detailed amendments to finding. I don't have language in front of me. Sounds like this could potentially be some grounds for agreement here. Be nice we could have seen this language in advance of your reading it to us at the table. 

>> Report that we had didn't delineate the ads underlying proposed findings. They were put in our records upon request. And so asked to vote on a final report without attachments as to specific ads. So I proceeded in the same way that report was given to me. I've reviewed the mailers underlying findings, correlated them to dollar figures. My -- 

>> That's not my point. I had this memo in front of me since May 2. Had plenty of time to read it and understand it. You show up at table with new language, here is new finding. I expect you to adopt about. I don't actually understand what you mean in when you say amend finding 1-C by moving issue with additional issues with text. What is that text supposed to reflect? Finding? Disagreement? What you think? What I think? I don't -- 

>> As I just explained, I don't believe that evidence. [audio cut out] we had a hearing on this. We discussed this previously. 

>> That's not my question. 

>> No, I'm elaborating on what this means. This means that as I say, the evidence in inadequate to substantiate that that convention account was a party account. To elaborate on that -- 

>> You misunderstanding the level of my question. When you say move the to additional issues with text concluding, that would be conclusion of commission, that would be conclusion of your -- additional issues we have, one group thought this, one group thought that. I'm trying to figure out -- 

>> That's fine. I take it that you concluded that it is a party account. And so my database typically where we disagree on matter that goes to additional issues. I'm trying to clarify that. 

>> But that text would be additional issues, subscription of what your conclusion is. 

>> I can remove concluded if that's what is troubling you. 

>> I was trying to figure out with text -- 

>> How about this? Text explaining that commission could not agree as to whether had sufficient evidence to substantiate -- 

>> Okay. 

>> That's what I meant. There's a disagreement. I see that I overspoke with word concluding. That there is not sufficient agreement among commissioners to conclude that commission had insufficient evidence. One bit of evidence that we had that someone at the party may have used that party EIN number. I think there's an inference in the report. I don't know if we have that EIN number. That's some of missing evidence. There's a warning here. But even had we gotten the EIN number that showed that someone opened up this account with EIN number, one employee misused the EIN number, they did establish and organization to main this account that organization did pay for people to to go to the national convention. I'm crediting that maybe it's possible we still don't have information that EIN may have been used. If you don't want that warning. That's okay. I didn't to flag the issue with Colorado republican committee. 

>> I highlighted what directive 70 -- describing discussion of issue overview of vote on recommended finding. 

>> That's fine. 

>> I'm proposing that commission invert some of its opinion in here which is to alert them that they shouldn't allow. I'm actually chastising them a bit just in case EIN number was used. I will strike that -- 

>> That's explanation in that. As to dollar figures in findings. I have reduced the numbers using the phrase at least so that those who believe that more of the mailings constituted express advocacy and -- have protection of language at least. I have reduced the numbers to where I feel comfortable drawing express advocacy lines and these numbers reflect a consensus of commissioners as to express advocacy. This is where we are going to reach consensus. You have hundreds of dollars in a finding that I want to reiterate could be obviated if they establish that their mail program was volunteered. This is where you are going to have consensus as to express advocacy in radio ads. 

>> That's fine. I get all that.. You're over estimating the extent of my concern. I couldn't figure out what you were trying to do here with the text because I didn't have it in front of me. I have it in front of me now. I can see. I understand what you are trying to accomplish. Would have been helpful to have been able to see this before walking into the meeting. 

>> Any need to take any more time with regard to text? As far as anybody is concerned? That seems to be the snag. 

>> Well, I'm sure we can listen to tape -- our issue is moving forward on this. 

>> Prepared to go forward? Congratulations for hard work you did on this, Commissioner -- yes, ma'am? 

>> May I ask if motion will be as originally stated. 

>> As modified at table to remove the word or concept of concluding and to reflect disagreement as to that conclusion. 

>> All in favor? 

>> Aye. 

>> opposed? Unanimously. Opinion 2017 war chest LLC. Let's see. I guess we are prepared -- is there any comment from counsel? Yes? 

>> Thank you, chairman. Good morning commissioners. Agenda document is a draft response to advisory report from war chest LLC. Cell question office application of act and commission regulation to say a proposal to offer political -- FDAC ensured money marks accounts. May provide services provided in request. That -- campaign depositories. Draft also concludes that political questions would not be required to list as organizations though commit -- at when each political committee would have own account. We did not receive any comments on request and one comment on draft. I'm happy to answer any questions you may have. 

>> Any questions? 

>> Mr. Chairman. 

>> Welcome. How are you? 

>> Good morning. 

>> Thanks for having me here this morning to answer questions. Happy to answer any questions you might have. I know it's technical banking issues at play here. We are fine with draft. I think this is a terrific product that gives peace of mind to questions and donors alike. We are fine with draft. Primarily concerned with the need to add depository accounts every single time hundreds of accounts added that were burden some. I'm glad commission realized that. I appreciate the comments made yesterday by credit union national association. I believe they have sort of a similar product. This is a product that allows questions peace of mind with all the money. Millions of dollars going into committees these days especially super pacts and act contemplates the feed to have -- need to have FDIC insurance on that. So this enables those questions to have peace of mind and have funds fully insured through the program. 

>> Commissioner -- 

>> Nancy to question two is no. You're fine with that? 

>> Fine with that. Initially request stated that it was the trust company was regulated under regulations of Colorado. We understand that the Commission sort of parsed that out and definitions under state bank of regulations of Colorado. Primary concern of client was not that issue. It was the need to add depository accounts and statement of organization. And so we're fine as is it question two. 

>> Okay. 

>> Any further comment? Thanks very much. I guess you didn't need to make the trip. 

>> I'm right across the street. 

>> You work for FBI? [Laughter] All right. Do we have a motion. 

>> Mr. Chair, I move approval of 17-21-A. 

>> Hearing nothing. All in favor? Aye. opposed? 

>> ayes have it unanimously. 

>> Thank you very much. 

>> Thank you. Commissioner Goodman. 

>> I don't intend to belabor this or call to a vote unless I think there are four votes for this proposal. Until then I plan on keeping it alive and keeping hope alive. When I sense that commission may be ready with four votes to move forward on things like this, I'm open to answer any questions if they have in public meeting or in the hallway. But otherwise, just want to keep it on our radar, thank you, Mr. Chairman. 

>> I think you are going to be successful. Unfortunately haven't had a chance to look at it. Rusty. Any other comment? 

>> Chairman? I think we are long overdue on doing a rule making on implementing the gramatus on stipulations changed by Congress. I they that part we should do. As for rest, on I don't agree with every position that is taken in there. I'm willing to engage and to , you know, perhaps let our staff take a crack at trying to draft an MPRM. Voting for this resolution doesn't accomplish a whole lot because ultimately we need to have an MPRM and vote for that. We know how that process works. That is haggling back and forth what goes in MPRM. I'm open to taking a crack at it. 

>> Take this as a public commitment that we will continue to work on this. This resolution call for -- to open a notice of proposed rule making and to have the office of general counsel begin the drafting process. Something that you are not comfortable to moving forward to now or make edit to say resolution before we give the office of general counsel substantive direction. 

>> I'm not proposed to take on this -- I'm open to having general counsel's office start working on trying to draft a party rule making document. I'm not opposed to looking to see whether there are ways that we could enhance party functioning in the country -- everybody loves political parties when we had the political party forum couple of years ago which Commissioner and you were spearheading, I think a lot of of proposals are proposals through statutory change. Push-backs that had already gone through litigation and had been changed and people wanted to change them back to where they are struck down. I'm not convinced that that's terribly productive. You're right, we have received one or two petitions and one of the petitions, one we submitted by Mr. Reef had bunch of articles attached to it. See what other ideas might be worth exploring and putting out for comment. As I said, not prepared to vote for this resolution because detailed about proposals that would be in rule making. I'm happy to have our lawyers try to start working on a project. 

>> Without objection, I would suggest that we have four or I'm not sure with we have five Commissioners we we work as a consensus to utilize staff to get them to work on a project. If we have that, I would ask general counsel to begin working on making adding some flesh to the bones of two petitions. We can continue to consult with office of general council as they craft that. 

>> Would not be limited to specific proposals in this resolution. 

>> Yes. 

>> I will share -- I have that consensus. I think it's unanimous. 

>> That's a step forward. 

>> Not a big vote just let's get going. 

>> I don't want to overutilize this staff resources if not consensus to working this proposal. Then I would be happy to work with you with office of general council. I understand that you will not agree with everything. I have scrubbed the materials provided to us in connection with forum and submission of comments that came in response to petition of will Mr. reef's client. Part of farm labor party. I scrubbed it for those things that I thought we could do without needing legislative changes. In dire need of legislative amendments by Congress to work them more effective political institutions. That's beyond our control. Working within those yard marks, I think I have tried to maximize what we can do within our regulatory framework here. I have come -- ringed it in every drop I could out of comments that we received. 

>> Happy to engage with you on those that you disagree with as well as those you agree with and work with office of general council. 

>> Sounds good. Anything further? That any matters? 

>> There are none. 

>> One personal preference. You want to be back on record. Just rescinded the adjournment. 

>> Before we depart. I would like to recognize that in June, we are going to be losing Mike Colombo from agency. Going to move to California and take up private practice of law in commit call compliance -- political compliance in San Francisco area. Mr. Column bow is a treasurer. Been with this agency for eight or nine years. Before that, assistant U.S. attorney. And he took a little bit of a leap up stairs at ninth floor a little over a year ago. Been an invaluable counsel and trusted friend to me as well as other commissioners. Valued downstairs as enforcement attorney as well. Commission is losing a good friend and asset. I want to wish him well when he departs us first or second week of June. 

>> My good wishes to Mr. Colombo who is an excellent attorney and asset to agency and going to a great firm and weather will be much nicer. God speed. Good luck. 

>> Congratulations. That sounds like a great step forward. Thanks for everything you have done for agency. Always been easy to work with you. We really have adjourned if there's nothing further. Note From Captioner: Meeting as adjourned.