AO 2022-16: Committees’ use of contributions deposited after 10-day deadline
Under the circumstances presented, the Democratic Senatorial Campaign Committee and Democratic National Committee (the committees) may retain and use contributions that their vendor failed to deposit within 10 days of receipt. The delay resulted from events outside the committees’ and their vendor’s control, the committees took prompt remedial action after discovering the untimely deposits and there was no evidence that the failure was intentional.
Background
The committees have contracted for over a decade with “contribution caging” vendor to receive and process contributions and electronically deposit them into the committees’ designated bank accounts. The contracts require the vendor to comply with the Federal Election Campaign Act (the Act) and Commission regulations (including depositing contributions within 10 days of receipt) and require the vendor to check the committees’ designated mailbox every business day and promptly deposit all contributions.
Over the course of their working relationship, the committees say they regularly engaged with the vendor’s personnel to ensure the vendor met its legal and contractual obligations. The committees assert that they closely monitored the timing of the vendor’s deposits of their contributions and “took every reasonable step” to ensure timeliness.
In April 2022, the vendor began experiencing delays in processing and depositing the committees’ received contributions and deposited many of them into the committees’ accounts more than 10 days after receipt. The committees state these late deposits occurred without the committees’ authorization and, upon learning of the issues, the committees acted promptly to correct the problem. The committees segregated the late-deposited contributions to prevent their use pending the Commission’s decision in this advisory opinion. The committees attribute the vendor’s late deposit of the contributions to factors outside the committees’ and vendor’s control.
Analysis
Commission regulations require committee treasurers to deposit (or return) all receipts within 10 days of receipt. The Commission has considered noncompliance with this 10-day timeframe in prior advisory opinions and interpreted the Act and Commission regulations as allowing political committees to deposit and use such contributions under certain circumstances. In these cases, the committees were prevented from depositing the contributions within 10 days by circumstances beyond their control, or the failure to timely deposit was not intentional or self-enriching; and they acted promptly to remedy the noncompliance after discovering it.
According to the request, the vendor reported that the noncompliance with the 10-day deposit requirement was due to several factors, including turnover in vendor staff, unavailability of vendor staff to work due to COVID-19 infections and a significant increase in the processing workload for its other clients. The committees had also taken reasonable precautions to ensure their contributions were timely deposited and monitored the vendor’s timing of their deposits. Also, upon learning about these late deposits, the committees acted promptly to avoid future noncompliance.
Under these circumstances, and in keeping with prior advisory opinions, the Commission determined the committees may retain and use these contributions. The Commission concluded the committees should report these contributions as if the original contributions had been timely received and deposited and should amend any previously filed reports affected by the late deposits based on the dates of receipt and add an explanation and reference to this advisory opinion.
Date Issued: August 31, 2022; Length: 6 pages
Citations
Statute
52 U.S.C. § 30102(h)(1)
Campaign depositories
Regulations
11 CFR § 103.3(a)
Deposit of receipts and disbursements