This file contains archived live captions of the open meeting of the Federal Election Commission held on June 20, 2019. This file is not a transcript of the meeting, and it has not been reviewed for accuracy or approved by the Federal Election Commission.


Good morning. The federal election commission open meeting for Thursday, June 20, 2019 will now come to order. Welcome, everybody. We have some special guests in the audience. We are always happy to see friends and family. Hello. [ laughter ] We are going to start with the minutes. >> Vice Chairman approved movement of the minutes for the meeting of May 9, 2019, and minutes for May 23, 2019. Is there any discussion on the motion? If not, I will call the question. All in favor say I. The man motion passes unanimously. The next item on the agenda is audit division recommendation memorandum on the Oklahoma Democratic Party, A 17-19. >> Who would like to speak to this? Thank you, sir. 

>> Good morning, Madame chair and commissioners. Before you is the audit division recommendation memorandum for the Oklahoma Democratic Party recommending approval of four fundings. The four findings presented are in the statement of financial activity, a misstatement of 11 fund activity, recording for employees, and reporting of data and applications. We are available to answer any questions you might have. 

Thank you. Are there any questions or discussion about the audit report? I put in an objection so that I could make a motion to add a joint fundraising finding. This audit, we have , it's one of a number of audits that raises the same issue. Last time, this came up and it was a little bit hard to talk about it because it relates to an issue that was also present in a couple of enforcement matters which at that time had not been made public. They have been now. It involves both the Hillary victory fund and the chump victory fund both on the presidential campaigns in 2016 and set up these massive joint fundraising committees in a number of instances where money went to the to the state party committee counts as a result of those events immediately turned around and went back to the national party committee including money that was given by donors who are maxed out to the national party committee. So I think that was a circumvention and I hope to support a motion so that is why it is on the agenda and I don't know if anybody else has anything to say on that . >> In A 17-19 audit of the Oklahoma Democratic Party, I moved to added a finding that the Oklahoma Democratic party violated the joint fundraising regulations of 11 CFR section 102.17 C when they received $13,000, excuse me, I'm sorry? Excuse me. Received $3,013,100 in net proceeds from the Hillary victory fund joint fundraising committee on the same day transferred $3,003,100 to the Democratic national committee. 

Thank you. Is there any discussion on the motion? If not, I would just come other than what I said before, I would just point people to the statement that I issued in 7304, 71, and 7339 involving the Hillary victory fund and the Trump victory fund and I put out a statement on that discussing this issue on May 31. Having said that, I will call in question are all in favor say aye. Opposed? Motion fails with Commissioner Walther voting in favor in the Vice Chairman and Commissioner Hunter voting against. Is there another motion? Thank you. 

Thank you. I move for approval of the audit division regimen memorandum on the Oklahoma Democratic party which is A 17- 19 set forth in document 19-27 -A. 

Vice Chairman has moved approval on the audit division recommendation memorandum on the Oakland Democratic Party A 17-19 and is there any discussion on the motion? If not, I will question all in favor say aye and the motion passes unanimously. Thank you. >> The next item on the agenda is , sorry -- 

If I could just welcome Ms. Dana Brown who is serving as our acting audit director. We appreciate your stepping up and Laura who is now our acting commission secretary. Thank you to both of you. 

Thank you both and thank you Commissioner Hunter. Okay. We will move on to the next item on the agenda, Internet ad is lame as will making proposal for reg 2011-0 2 Internet medication to slavers and definition of public coming occasion. There are two agenda documents and we have a late submitted document motion. 

I move to suspend the rules in a timely submission of agenda documents in order that the commission may consider late submission of agenda document number -- 

The motion carried unanimously. So we have staff here but I am guessing that you guys do not have much to say because both of the documents come from commissioners and you're welcome to China and if you would like to. 

I would be happy to answer any questions. 

As always and we appreciate that. I put this on the agenda because obviously this is something that has been on the commissions agenda for a very long time , actually since 2011. But it really got started last year and I felt that it had been stalled and really was not moving forward and we had some back and forth last year. We obviously had hearings . We had a lot of testimony, hundreds of thousands of people commented and said we should do this so I think that they are right and we should do this. We should clarify these rules . I sent a proposal to my colleagues last fall and it did not really go anywhere. We went and had a shutout . We had a rags committee meeting, we had another meeting and really things were not moving so I said I am putting it on the agenda and I gave my colleagues several weeks notice of that and they asked that it not go on at the last meeting so I waited until today and we got a new proposal yesterday from our colleague so I appreciate that and I think it always helps to put words on paper. And it is useful. There's a lot that the proposals , they both changed somewhat since the NPR M and are informed by the comments and hearings that we had last year. I think that they both share some features and are different in some ways. I think there is general agreement that, as it says in the law now, and that are on the Internet need to have disclaimers . The preferences that they have full display was on the face of the ad . But I think both proposals recognize that there will be some circumstances in which it makes more sense to have some kind of a technological mechanism link or something similar that will allow people with one action to get to the full information about the disclaimer. There's a little bit of a difference in what would trigger that, at what point one moves from a full disclaimer on the face of the ad to one with a technological mechanism and the information being provided somewhere else. And both of the proposals have moved since the proposals in the NPR M last year. It again was informed by some comments that we got and there's also , I think, a significant difference in terms of whether or how much information will be on the face of the ad . One issue that has been very important to me all along has been that there be something on the face of the ad, even if it is not the full disclaimer, some indication of who is behind the ad, who is responsible for it. So the proposal that I put forth requires , at a minimum, that there be paid by X, some indication of who is paying for the ad right on the face of the ad. We know that there is a pretty low click through rate , people click around on the Internet all the time, but the reality is that there is a fairly low click through rate. In fact, the commission in litigation submitted information to the D.C. courts that the click through rate ranges from twitter advertisements, between 1% and 3%, and online marketing but he found the average click through rate of four 18 industries with Facebook advertisements was 0.9% , less than 1% . So there's not a lot of, the information will be available, but probably not a lot of people are actually going to get it if it is somewhere other than on the face of the ad. That is why I pick it is so critical that there be something on the face of the ad to indicate the sponsor. It is unlikely that political ads will have click baiting and you won't believe who is sponsoring this ad on their faces that might encourage people to click through . So I think, in most cases, what is on the face of the ad is all anybody is going to see. So I think that is important and a current distinction between the two proposals . There are other distinctions , and I do not anticipate that we are going to vote on these proposals today. As I said, we received a proposal from our colleagues just yesterday and I will be happy to turn the microphone over if anyone wants to speak to their proposal. But we are obviously not on the same page at. Yet. I hope we can get on the same page and I am planning on bringing this back at the next meeting and hoping to have a vote at that meeting at least on rule text if not on [ indiscernible word ] which would cause all sorts of heart attacks for the staff if I said I wanted a full EN JS up we have not agreed on yet in three weeks but I really do think that we need to resolve this. It is really important. There is a strong demand for this. It is important. Advertising is moving more and more to the digital realm in politics as in other forms of advertising I think it is really critical that we set some standards and get this rulemaking done and I really want to either get it done or just the current rules and statutes which I think are not that bad but they are not as flexible as I could be and it would be useful to everyone if we could complete this rulemaking and provide greater clarity on this. So Mr. Vice Chairman? 

Thank you for bringing this up. I think even if we do not have oats today, I think it is useful to set forth our preferred approaches just so that the public can be apprised of where things stand to evaluate the approaches if they want to reply and give comments on them. We would welcome that as well. I think, as you point out, there are elements of overlap. And I think that is useful to recognize. I think just this rulemaking , as you mentioned , first started in 2011 or this elements to this rulemaking started in 2011 long before concerns about how the with this relate to the prohibition and that's because there has been a number of different advisory opinions we have had that have dealt with this issue about how do you apply a disclaimer requirement that contemplated a very different communication environment where we were talking about traditional media such as television, radio, newspaper , magazine, mail, those were the communication that was contemplated when it was drafted back in the 70s and obviously the communications, technology has evolved substantially since then and so how do we apply a regulatory framework designed for one type of communication medium to a new and evolving one ? And so we have dealt with this issue with respect to character like text, small banner ads on phone to Google ads to Facebook and so separate and apart from the foreign national concern which undoubtedly kick started this issue, this issue has relevance independent of that as well and, for that reason, I think that is on this is important . As I have approached this issue, there have been a handful of principles that I have tried to keep in mind when formulating a response. The first is flexibility . The Internet, as we all know it, is a dynamic involving media for communications and our rules need to take that into account so that they do not instantly become obsolete and irrelevant as soon as the next wave of technological change happens with respect to the Internet. The second is that the ad format that are available currently , I very much want to make sure that those continue to be available to candidates, committees, independent speakers as well the one thing that is great about the Internet is that it has numerous low-cost advertising option. There are, you can convey your message to a broad audience in a way that someone of modest means could not do who would not be able to afford television ads or radio ads or be able to put an ad in a major newspaper. The Internet does divide numerous options at low cost and we want to make sure that those remain available . That is especially important for candidates, political committees , and other independent speakers, many who do not have the resources. We want to make sure that those ad formats remain available. And the third principle is that I do not want to alter the current Internet exemption which was put in place a little bit over a decade ago. And I think it was extremely helpful and certainly was an important element in enabling the Internet to become a tool that has allowed for political speech, fundraising, political organizing, outreach, obtaining political news, and I think that at least at this point, I do not think that any new rule should upset that pre-existing regulatory framework because it applies to the Internet. So those are some of the governing principles that I have had in mind when contemplating how best to resolve the rulemaking in this issue. The good news is we recognize that there are certain add formats for which a full, traditional disclaimer just cannot accommodate. And so we both recognize that there needs to be some sort of accommodation that allows those ad formats to continue to be used but still allows the public to chip gain the information to which they are entitled under the law. How do we do that is a sticking point right now. As I look through the competing proposals, there are some significant point of departure being the optimistic that I sometimes am and maybe should not be but still notwithstanding that's, I do not think that those are unbridgeable and I still hope that we can continue the discussion to find a way forward because I think that's, for the reasons I mentioned before, I think it would be helpful but also important to signal to those who are increasingly using the Internet for political connotations to know exactly how the disclaimer rules apply and to have that an revelatory text would be much more useful than a half-dozen different advisory opinions, some of which fully answer the question on some of which didn't and so I definitely want to keep the discussion going and hope that we can find that middleground because I do not perceive that we are in two different places that cannot possibly be bridged and so that is where I am right now and look forward to continuing the discussions in the days ahead. 

I hope your optimism is warranted. My door is always open. If you want to come in and hash this through , as you alluded, I think that there has been a great deal of concern of late that people need to be informed about where the information they are getting online is coming from. This is a really tiny slice of the problem. It will address only ads on the Internet. And that is just a small fraction of the information and sometimes misinformation that people have been getting online. This was the slice that there was a consensus to address at the FEC so I'll take it if we can get it. If we can in fact get a rule that will improve on the current state of affairs. Anybody else want to weigh in on this? 

Commissioner Hunter? 

Thank you. I just have a couple of quick questions about your proposal, Madam chair. One is my understanding is that your proposal would add or would include , so it only covers ads that are placed for a fee on the Internet. My understanding is your proposal would also cover the production costs , so for example, if I place my video on YouTube, YouTube does not charge me to do that. But if I spent money to produce the video, my understanding is then that would now be part of their regulated content which is a departure from the way it currently is. Is that correct? 

That is correct. That is a departure. That would be my ideal, whether that is an achievable goal here at the FEC, [ laughter ] I do not know. Since we were putting out what we really want it, that is what I would really want would be to include production costs. 

Okay. I think obviously should put out their ideal. But I think it's probably not going to garner for votes for a whole variety of reasons which I am happy to get into if anybody would like. But I do not see that getting for votes, just to be really candid. Another issue -- 

I always appreciate your candor. 

Another issue you mentioned in your introduction is the trigger which we spent a good bit of public meeting , the public hearing last summer talking about, we all agree with the time that was one of the biggest issues that we were trying to figure out. My understanding is that your trigger for when one would not need to put the full disclaimer is the factors inherent to the technology, am I correct about that? Could you maybe talk about that a little bit? 

Well, what I am trying to avoid is somebody saying, well, you know, I really do not feel like paying for a big enough add to accommodate it is labor so I do not think I ought to have a disclaimer. And in the real context, we said a lot requires a disclaimer and you cannot just choose to put your ad out in a format that will not accommodate it and then say that alleviates you from the obligation , so that would be my goal because I think it emphasizes the need for putting this disclaimer on the lot and the Supreme Court has upheld the law and it's important information for the public to have and my proposal includes the possibility having truncated disclaimers. But it is I think , I do not think it is an imposition on virtually any ad out there that they could not fit a paid by X on the face of the ad. 

How would one know that they could go to the abbreviated one instead of the full one, the abbreviated one if the standard is still the same due to factors inherent in the technology, I think one could read that and maybe this was not your intent, to basically say, and I think it was alluded to earlier in comments , one could read this to say this really does exclude a lot of platforms that are currently being used and we have testimony both at the hearing this summer at a follow-up meeting that many of us attended that said one of the most common formats right now is when it's one that's very small and I forget what it is called but it is incredibly small and people are using it more now than ever and one way of reading this is that that would now not be able to be used by political committees or anybody wanting to run and express add because the technology would allow you to, as you suggest, just buy a bigger ad and that is one that I think that is a problematic position as you know as we talked about that. 

I actually have not seen , even on the smallest dad, there's usually a little trailer on the bottom that says something like this is going away in 54321 and if they can fit that in there, they can fit paid by X. So I do not really see this as an obstacle. I am really not aware of any ad formats that could not accommodate some form of disclaimer on the face of the at. And as I said, if it is not on the face of the act, most people just want to come see it. 

In the example you talked about, how would one you know and maybe this is your proposal and I Mr., how would one know to go from the full disclaimer to the one that you just referenced which I believe you called the abbreviated disclaimer? 

I can turn the question back on you. How would one know that one cannot reasonably provide the information? 

You go first. 

That seems to me a very squishy standard were somebody might say I think it is unreasonable to force me to put a disclaimer on this at . Nobody wants to put limits on their ad. It always takes up some space. 

We had testimony to the contrary. A lot of people came in and said we want people to know we are placing the ad I wanted to click through because to capture the information. We had a lot of testimony to that effect. >> We see in enforcement that not everybody wants to put a disclaimer on the at. So I think that we need to reinforce the requirements. 

With respect to how does one know to the smaller one from the full one , it is based on factors inherent to the technology? 

Yes. Yes. 

And you know, that obviously something that we could flesh out in the E NJ. >> The issue of the trigger has obviously been the one at the hearing we had last year and subsequent discussion, that has been the trick is to shoot to try to resolve. You came up with a proposal to see if there was maybe some way we could have objective standards based on pixel size and what percentage of that overall ad, dependent on how many pixels are taken up and in an effort to see if there's some sort of an objective trigger we can reach and that did not really go very far so if we do not have objective criteria , we've now got to figure out what are going to be , what sort of leg which can we include that will give fair notice to the regulating community about when they can use a truncated adverse is when they have to use, excuse me, a truncated swimmer versus where they would need to use the full disclaimer required by the act and so that obviously , as we discussed , we want something that is clear, understandable, since it is not objective, there's going to be a little bit of subjectivity and a little bit of ambiguity, but to the extent we can clear that up and away for the best majority of advertising formats , it can be clear, that is obviously the challenge that is in front of us. We all share the same goal that there needs to be at, clear to the trigger possible and that something we will need to discuss to see what sort of limit and what sort of guidance we can provide that make that as clear and understandable and not squishy as possible. 

I agree with that. I think we all want a standard that is as objective as possible and we both moved from the original proposals in the NPR M which we concluded on both sides than either proposal is really workable . One is pixel size and the other is if you can't fit then you can go to an alternative method. It was pointed out does it take up 90% of the ad space and you still have to put a disclaimer on there and that was not anybody's intent and we asked last year for help and I repeat that request because it is accommodated as you, it was an issue that I don't think we anticipated was going to be as hard as it has turned out to be so I reiterate the request the Vice Chairman made that if anybody wants to submit comments on either or both proposals or submit a new idea all together, I think we are very open to that. We are going to bring this back in three weeks and public comments would really be helpful because I think it is harder than it sounds to come up with an objective standard that would be really clear so everybody could understand it and workable and would provide the maximum amount of information to the people who were seeing these ads because the Vice Chairman also pointed out there has been a big problem with people not knowing whether the information they are seeing on the Internet, where it is coming from. I think we all hope we can make at least this small inroad in that problem. >> I think one of the issues, we talked about this before also, it is the kind of underlying data which you refer to and I'm anxious to go back and see where it did not realize litigation had put that in a brief but I want to take that and look at it and put I think there some disagreement on the reasons that we are doing this in the first place. And so you referred to something that set people do not just click through. Well, the foundations of that study are questionable at best. Is not the study that I am talking about. There's also nothing to say that people actually read the entire ad. If you are sort of flipping through , you may not look at the disclaimer but you may not also look at the ads so there is a lot that we do not really know what I think that is part of the problem is we are coming from different places. I would be interested in the spirit of whatever one has been talking about, getting comments from people. I am interested particularly to hear from the reform groups. If they think that the proposal that Commissioner Peterson and I laid out , by the way, it is not really that different from what we proposed back in August of last year, it is change a little bit, that is true, but not a whole lot, I am wondering if you could think that this proposal is better than what we have now. I think it is. I think as Peterson suggests, it is more , it provides a clear standard of people do not have to go digging through advisory opinion , there's some advisory opinions that I know people got really upset about it may be confused some people although I do not think people are as confused as some people think but, nonetheless, I am interested to see what they think because , if they think that is a step in the right direction, then that would be good to know. 

I agree that all comments would be very helpful. >> [ muffled audio ] leaves it open to such a degree that it would be concerning to me to not tie the down [ muffled audio ] reasonably be provided on the face of the communication because of the character or space constraints which really seems to eviscerate any other provisions that might try and guide what to do and when to do it. And that is the area that I find of concern and maybe we can chat about that. [ muffled audio ] take it up. >> I don't know if either of you wants to comment on that now or wait for later discussion. 

I only want to say that that addresses the crux of the issue that we have had all along which is how do we define a trigger when our efforts at finding an objective trigger , we kind of ran into a brick wall were people say they would not be particularly workable and what sort of formulation are going to work . I would be happy to hear any ideas and we can continue the discussion off-line . Like I said, we invite any comments we can get from anybody who may be listening right now because I think we all may have differences of opinion in a lot of things regarding the operating we are all interested in trying to find something that will provide as much clarity as possible as to when you go from full disclaimer to truncated disclaimer. I think we all share that and we all struggled in her own way to try to find the right language and the reformulation and so obviously we will continue to think about this and have discussions about this and hopefully we can come up with something that is, that we can all agree on and that will also receive support from those who are going to subject to this rule if it were indeed promulgated. 

I agree . I think unless we get further input, we need to just sit down and hammer through it and I'm sure we can do this but it is going to take a little bit of imagination and cooperation and flexibility . But I think for the public, I think we audit get this done as soon as we can. 

Amen to that. Anybody else? Stay tuned . This will be back on the next agenda. And I am hoping that by putting it on the open meeting agenda that it will force the issue and force some discussion that was not moving forward in as productive a fashion as it could have. If there's no further discussion on this , and again, I will reemphasize that all of us, what all of us has a, we would love to get were public comments although we already have at hundreds of thousands of people who have commented on this, we need yet more so help us out with this, please. Met him deputy staff director, is there any management or a ministry that is? 

Madam chair, there are no such matters. 

Well then, this meeting is adjourned. >>