I 

FEDERAL ELECTION COMMISSION 

WASHINGTON. D C 20463 

MEMORANDUM 

TO: The Commissioners 

Staff Director 

Deputy Staff Director 

General Counsel .A 

FROM: 

DATE: December 7,2001 

Office of the Commission Secreta 

SUBJECT: Statement Of Reasons for MURs 4382 and 4401 

Attached is a copy of the Statement Of Reasons for 

MURs 4382 and 4401 signed by Chairman Danny Lee McDonald, 

Commissioner Scott E. Thomas, and Commissioner Karl J. Sandstrom. 

This was received in the Commission Secretary's Office on 

Friday. December 7.2001 at 10:23 a.m. 

cc: Vincent J. Convery, Jr. 

OGC Docket 

Information Division 

Press Office 

Public Disclosure 

Attach men t 
I 

1 

1 MURs 4382 and 4401 

Republican National Committee 1 

and Alec Poitevint, as treasurer 1’ 

STATEMENT OF REASONS 

CHAIRMAN DANNY LEE MCDONALD 

COMMISSIONER SCOTT E. THOMAS 

COMMISSIONER KARL J. SANDSTROM 

By the spring of 1996, Senator Bob Dole’s presidential primary campaign 

committee, Dole for President, Inc. (“the Dole Committee”), was essentially out of 

money. As a result, the Dole Committee was unable to pay a number of staff who 

worked on the campaign. Twelve of these staffers went off the Dole payroll and went on 

to the payroll of the Republican National Committee (“the RNC”). While on the RNC 

payroll, however, these staffers continued to do work for the Dole campaign. Once the 

Dole campaign received its public hnds in August 1996, for the general election, eleven 

of these twelve staffers went back onto the Dole payroll. Whether they were on the Dole 

payroll or the RNC payroll, these staffers apparently continued to provide advane and 

travel services for the Dole campaign throughout the’entire time period. 

. 

In Matters Under Review (“MURs”) 4382 and 4401, the Federal Election 

Commission considered whether the RNC violated the Federal Election Campaign Act of 

1971, as amended (“FECA” or “the Act”) when it paid for the payroll costs and expenses 

of these staffers to continue their work on the Dole campaign. Under the Act, a 

multicandidate political committee may not make contributions to any candidate or his 

authorized committee with respect to any federal election in excess of55.000. 2 U.S.C. 

6 441 a(a)(2): Based upon the statute and the Commission’s regulations, the Office of 

General Counsel recommended the Commission treat the payment of former Dole staffers 

who continued their work on the Dole campaign as an excessive contribution by the 

RNC. We agreed with the legal analpis and recommendations of the Office of General 

Counsel. . 

Commissioners Mason, Sniith and Wold disagreed and rejected the General 

Counsel’s findings. Thcir decision is not only inconsistent with a Cornmission regulation 

squarcly on point, but it also ignores prior Coniiiiission action in his very same matter. 
c: 

.. 

B 

i . i 

As explained below, the evidence on which the Commission relied to f;nd probable cause 

to believe that the Dole Committee violated the law in accepfirig these services fiom the 

RNC is no less compelling in determining whether the RNC violated the law in providing 

the services. Unless the RNC made an excessive contribution. it is hard to fathom how 

the Dole Committee accepted an excessive contribution. It is this stark inconsistency that 

renders our colleagues' decision not to proceed in this matter inexplicable. 

I. 

The Presidential Primary Matching Payment Account Act, 26 U.S.C. 90 903 1 - 

9042, was enacted in 1974 to provide partial federal financing for the campaigns of 

qualifylng presidential primary candidates. See Buckfey v. Valeo, 424 U.S. 1,89 (1 976). 

Eligible candidates may receive federal payments to match individual contributions of up 

to $250, see 26 U.S.C. 00 9034(a) and 9037,ibut in return must abide by the expenditure 

limitation contained in 2 U.S.C. 6 44Ia(b)(l)(A). See 26 U.S.C. 0 9035(a). The overall . expenditure limitation for the 1996 presidential primary election cycle was $30,910,000. 

The law also provides that no multi-candidate committee-such as a national 

party committ-may make contributions to any candidate or the candidate's authorized 

committee with respect to any election for federal office in excess of $5,000. 2 U.S.C. 

6 441a(a)(2). Similarly, it is unlawhl for any political committee to accept wntributions 

in excess of the contribution limits. 2 U.S.C. 6 441a(f). Under the disclosure provisions 

of the Act, a political committee must report the total amount of all receipts, including 

contributions fiom political party committees. 2 U.S.C. 0 434(b). 

On June 12,1996, the Democratic National Committee (the "D"? filed a 

complaint with the Commission alleging that the Dole Committee had used a variety of 

methods to evade the expenditure limitation. According to the complaint., one of these 

methods used party committees, including the RNC, to make expenditures on behalf of 

the Dole Committee. More specifically, the complaint alleged that party committees paid 

for Dole Committee travel expenses that were attributable to the overall expenditure 

limitation.' 

On April 1 1,1997, the Oflice of General Counsel submitted a report for 

Commission consideration which contained a factual and legal analysis of the allegations 

presented in MURs 4382 and 4401 as well as responses to the complaints. On May 6, 

1 997, the Commission approved the General Counsel's recommendations and found 

reason to believe that the Dole Committee violated 2 U.S.C. 0 441a(b)(l)(A) and 

26 U.S.C. 5 9035(a) by exceeding the overall espenditure limitation for the presidential 

primary elections. The Comniission also approved a number of other reason to believe 

findings against both the Dole Committee and other entities arising out of the expenditure 

litiiitation violation. With respect to the instant matter, tlic Commission found reason to 

' On Junc 26, 1936. a secoiid conrplaiiit was filed by Janet Strawdcr. This complaint more generally 

asscrlcd that tlic Dolc Coniiriiltcc was "overspcnding" in violation of tlrc cxpcndiiurc limitarion. 
ia Si 

'4c + a 

believe that the RNC violated 2 U.S.C. 0 44 1 a(a)(Z)(A) by making excessive 

contributions to the Dole Committee, and that the Dole Committee violated 2 U.S.C. 

4 441a(f) by accepting excessive contributions from the RNC. In addition, the 

Commission found reason to believe that the RNC and the Dole Committee violated 

2 U.S.C. 0 434(b) for failing to report these excessive contributions. The Commission 

also approved the General Counsel's recommendation to conduct an investigation into 

these matters. 

After a full investigation and review of the responses and materials submitted by 

the Dole Committee, the Office of General Counsel submitted a brief to the respondent 

and then prepared a report for Commission consideration analyzing the pertinent fhctual 

and legal issues. With respect to the RNC payment of advance stafftravel expenses for 

the Dole campaign, the General Counsel recommended the Codssion find probable 

cause to believe that the Dole Committee had accepted excessive contributions in 

violation of 2 U.S.C. 0 441a(f), and had failed to report the contributions in violation of 

2 U.S.C. 0 434@). On February 13,2001, the Commission unanimously approved the 

General Counsel's probable cause recommendations regarding the Dole Committee. 

One month later, however, on March 13,2001, the Commission split 3-3 on 

similar General Counsel recommendations regarding the RNC. As with the Dole 

Committee, the General Counsel submitted a brief to the respondent and then prepared a 

report for Commission consideration analyzing the pertinent factual and legal issues. 

Consistent with his recommendations regarding the Dole campaign and the 

Commission's approval of those recommendations, the General Counsel recommended 

that the Commission find probable cause to believe the RNC violated 2 U.S.C. 

0 441 a(a)(2) for making excessive contributions to the Dole campaign through the 

payment of advance staff travel expenses and also violated 2 U.S.C. 0 434(b) for failing 

to report those excessive contributions. A motion to adopt the General Counsel's 

recommendations failed to secure the four affirmative votes necessary to make a probable 

cause to believe determination. 2 U.S.C. 0 437g(a)(4). Commissioners McDonald, 

Sandstrom, and Thomas voted to support the General Counsel's recommendations, and 

Commissioners Mason, Smith, and Wold voted to oppose the recommendations. 

Four months later, consistent with their earlier vote to find probable cause with 

respect to the Dole Committee, Commissioners Mason, Smith, and Wold voted to 

approve a conciliation agreement with the Dole Committee that cited the RNC payments 

as a violation. On September 7,2001, the Commission accepted a signed conciliation 

agreement and global settlement and release involving the Dole Committee, DoleKemp 

'96, Inc., the Dole/Kemp '96 Compliance Committee, Inc., and Senator Robert Dole.2 

The agreement related to the following admissions: that the Dole Committee violated 

2 U.S.C. 0 434(b), 2 U.S.C. Q 441a(a)(l)(A), 2 U.S.C. 5 441a(b)(l)(A), 2 U.S.C. 

0 441a(f), and 26 U.S.C. 0 9035(a); arid that Dole/Kemp '96, Inc. violated 2 U.S.C. 

Q434(b), 2 U.S.C. $44la(b)(I)(B), 2 U.S.C. 5 43Ia(f), 2 U.S.C. 6 441b(a), and 

' As a result of this settlement. tlis Cori~missioir closed tlw files in MURs 4382.4501.4670, 5098. 5099. 

5170. and 5171. 

3 
-. . 

A;i 

w 

fi 

9 

d 

L 

26 U.S.C. 0 9003(b). The Dole Committee violations regarding 06 441a(f) and 434(b) 

involved the receipt of excessive contributions from the RNC. The Commission 

approved the conciliation agreement and global settlement by a vote of 6-0. 

11. 

We believe the evidence is overwhelming that the RNC made an excessive 

contribution to the Dole Committee when it placed Dole staffers on the RNC payroll to 

work on the Dole campaign. By the spring of 1996, the Dole Committee had virtually 

exhausted the spending allowed under the overall expenditure limitation.’ As a condition 

of receiving federal matching hds, Senator Dole had agreed to abide by a spending 

limitation. A review of the Dole Committee financial activity indicated that by the end of 

March, 1996, the Committee had reportedly spent $29,260,000 of its $30,910,000 

expenditure limitation. General Counsel’s Report #2 at 6 (August 2,2000). This left the 

Dole Committee with only $1.6 million to spend over the next four and a half months 

until Senator Dole received the Republican nomination in mid-August 1996. 

As a result of this financial shortfall, the Dole Committee reduced its staff by over 

40 employees in March and April of 1996. At the same time, the RNC began hiring these 

former Dole staffers and placing them on the RNC payroll. The Office of General 

Courisel’s investigation found that “[bleginning in April 1996, the RNC hired 

approximately 44 individuals who previously worked for the Dole campaign.” General 

Counsel’s Probable Cause Brief at 3 (December 19, ‘2000). According to the Office of 

General Counsel, “[mlany of these former Dole campaign employees appeared on the 

RNC’s payroll in April 1996 with no interim employment with another entity and no 

change in job duties, and returned to the Dole campaign’s payroll with the first general 

election campaign payday on August 30, 1996.” Id. 

In particular, the General Counsel concluded that “[t]welve employees of the 

Primary Committee [the Dole Committee] were transferred to the RNC io work on the 

’ The financial difficulties of the Dole Committee and its plans for adapting to this situation wcrc well 

known. For example, under the headline ‘Dole Campaign Is Broke. But GOP Will Spare A Dim,” the 

Wall Street Journal reported that “As Mr. Dole -res to campaign hll time. his campaign is in a cashstrapped position. It has almost hit the 537 million spending ceiling for candidates during the 

preconvention period.” Wall Street Journal (May 17, 1996). The article further reported, “So the Dole 

campaign itself will operate on a shoestring. But his biggest budget item, staff. is already being subsidized 

by the Republican Party, with many campaign staffers now working in their same campaign roles at 

Republican headquarters.’’ Id. Similarly, under the headline “Dole Reports 5177,000 Lefi Until After 

Convention,” the Wnslrinyrorr Posr stated that “[tlhe campaign reported spending about SI .5 million last 

month, a period in which it had already cut some staff and closed campaign offices. Dole campaign 

oficials said their monthly spending from May through August will not be nearly that high because it had 

not cut its staff fully by April.” Washington Post (May 19. 1996). SLJ~~ nl.ro Snn Dicgo Tribune (May 28. 

1996)(Undcr the headline “Dole team near broke and trying to fix it.” the Tribune reported “He will get a 

lot of help from the Republican National Party. It has absorbed mucliol’his staff [and] is paying many 

campaign costs.”) 
.. 

c 

m 

frnvel plans for Seriator Dole.” Id. at 4 (emphasis added). Analyzing Dole Committee 

travel records, the General Counsel’s investigation revealed: 

Of the twelve staff members in question, two are shown as trip coordinators; 

three are assigned to the press although most of the party events attended by 

Senator Dole were closed to the press; three are designated “lead”; three are 

shown as contact persons for the trips; and one is designated “staff..” In 

most instances these functional descriptions appar consistently both while 

the person was on the Primary Committee ‘s payroll and while they were 

being paid by the RNC. 

General Counsel’s Report #2 at 28-29 (August 2,20OO)(emphasis added). In addition, 

“[olf the 12 advance staff members transferred to the RNC, 11 were on Primary 

Committee’s payroll through March of 1996.4 All twelve were paid by the RNC 

beginning in April, 1996.” General Counsel’s Probable Cause Brief at 4 (December 19, 

2000). From this time until they fonnally returned to the Dole Committee payroll, the 

RNC paid the following compensation and expenses to the advance st&f of the Dole 

Committee: 

Id. 

There is nothing to suggest these staff weren’t performing the same services as 

before, under the supervision of the same Dole campaign oflicials. Under the Act, a 

“contribution” includes a “giA, subscription, loan, advance, or deposit of money or 

anything of value made by any person for the purpose of inff uencing any election for 

Federal office.” 2 U.S.C. 4 43 1(8)(A)(i). On the basis of circumstantial evidence alone, 

the payment of Dole irlivcl star salaries by the RNC clearly constitutes a contribution 

frotii the RNC to the Dole Committee. 

Oirr of the iiidividuals rcccivcd liis last salary piyrncnt from the Dole Coniiiiiitrc nn Fcbruary 16. lt)90. 

5 
Q 

f 

m 

0 

f * 

0 

?V 

3 

E 

I 

I 

I 

This conclusion is appropriate even though a number of the trips undertaken by 

Senator Dole included both party sponsored events and Dole campaign events. The 

Commission’s regulations plainly state that during an election year, a candidate’s 

appearance at a party-related event is presumed to be for the purpose of influencing the 

candidate’s election. By contrast, a candidate’s appearance at a party-related event during 

a non-election year would not be presumed to be for the purpose of influencing the 

candidate’s election. 

To understand the proper meaning of the regulation, one must analyze it as a 

whole. Section 1 10.8(e)( 1) provides that: 

A political party may make reimbursement for the expenses of a 

candidate who is engaging in party-building activities, without the 

payment being considered a contribution to the candidate, and without 

the unreimbursed expense beingwnsidered an expenditure counting 

against [presidential &didate expenditure limitations], as long w 

(i) The event is a bona fide party event or appearance; and 

(ii) No aspect of the solicitation for the event, the setting of the event, 

and the remarks or activities of the candidate in connection with the 

event were for the purpose of influencing the candidate’s nomination 

or election. 

11 C.F.R. 6 1 10.8(e)(l). In deciding whether an event or appearance is “for the purpose 

of influencing the candidate’s nomination or election,: the regulation states: 

An event or appearance meeting the requirements of paragraph (e)(l) 

of this section and occurring prior to January I of the year of the 

election for which the individual is a candidate is presumptively 

party-reIated. 

1 1 C.F.R. 0 1.10.8(e)(2)(i)(emphasis added). Party expenditures after January 1, however, 

are presumptively for the purpose of influencing the candidate’s election: 

Notwithstanding the requirements of paragraph (e)(l) of this section, 

an event or appearance occurring on or after January 1 of the year of 

the election for which the individual is a candidate is presumptivelv 

for the purpose of itiflitericing the candidate ‘s election, and any 

contributions or expenditures are governed by the contribution and 

espenditure liniitations of this part 1 10. 

1 I C.F.R. 3 110.8(e)(2)(ii)(eniphasis added). 

Applying 11 C.F.R. 8 110.8(e), we niust presume that trips and candidalc 

appearances occurring after January I, 1996 were made “for the purpose of influencing 

0 
a 

3; 

* 

the candidate’s election,” even if associated with party events or fundraisers. 1 1 C.F.R. 

9 1 10.8(e)(2)(ii). As a result, the cost for these trips and candidate appearances should be 

considered contributions fiom the party to the candidate, as well. 

Our colleagues disagree. As we understand their position, they argue the RNC 

effectively satisfied whatever burden it might have had simply by characterizing the party 

events and findraisers as “party-related.” As a result, the burden falls on the Commission 

itself to rebut the presumption that the events were candidaterelated. In their view, the 

Commission has failed to meet this burden of proof. 

It need scarcely be said that it is wholly illogical to suggest the Commission has 

the burden of rebutting a presumption in its own favor. It is fair to argue that the 

presumption can be rebutted by showing the event was party-related and no aspect of the 

solicitations, setting, remarks, or activities was for the purpose of influencing the 

candidate’s election. But the burden of rebuttal must lie With the respondent. 

Simply asserting that an event is party-related does not satis@ the respondent’s 

burden. There must be evidence in the record that an event was party-related und that no 

aspect of the solicitations, setting, remarks, or activities was to influence the candidate’s 

election. 11 C.F.R. 0 110.8(e)(l). Throughout this entire process, the RNC has had 

repeated opportunities to demonstrate this to the Commission. It has not done so. Absent 

that evidence, the Commission’s regulations direct us to presume that these events, which 

took place after January 1,1996, were candidate related. 

Of course, wen if our colleagues disregard the costs associated with advancing 

party events and hdraisers, the costs associated with advancing purely candidate-related 

events remain. In their June 1 1,2001 Statement of Reasons, they. suggest that the Dole 

Committee actually paid its share for the staff at issue, that the presence of other Dole 

staff indicates the RNC-paid staff were doing RNC work, that it would be impractical to 

split up the travel entourage, and that any contribution was “not material.” The fact is, 

the vast majority of the expenses were nut allocated. Comparing the advance staffers at 

issue with other Dole workers is like comparing apples and oranges, and whatever 

amount is associated with the advance staffing of purely DoIe-related events is still a 

substantial violation. 

Looking at the trips themselves, it is apparent the result we suggest is appropriate. 

The Dole Committee continued to list these staffers on uficiul Dole Committee fraud 

irirreruries even after they we,= listed on the RNC payrolls. For example, Jeffrey Weiss is 

listed on the “Senator Dole Schedule” of May 18, 1996 for Charlotte, North Carolina and 

~~ 

‘ It is worth noting that only RhC-paid stafliirc listed on the Dole Committee itineraries as providing 

advance services. These itineraries were widely distributed in order to provide campaign staff and orlicrs 

with the name and phone numbers of the strfTpeoplc to contact with respect to the listed events. It would 

make no scnsc to have other unidentified advance star. Notwithstanding the absence of any evidcncc: ofthr 

prcscnce of additional advance staff at any of thesr evenrs. our colleagues must postulate their existnice for 

rlicir dccisiw to cohere. 

7 
.. .. 

i Fort Lauderdale, Florida. The Dole campaign listed Mr. Weiss as being the “lead” staff 

person for that trip and in the lead car for several motorcades that day as well as 

accompanying Senator and Mrs. Dole for an event at the Charlotte Motor Speedway. See 

Supporting Material for MURs 4382 and 4401 (March 13,2001)(Audit Division). There 

is thus no reason to doubt this person was doing advance work for the Dole campaign 

entourage. In addition, this trip was obviously for the purpose of influencing an election. 

For example, it was reported that Senator Dole, before simply delivering the traditional 

“Gentlemen, start your engines” on the public address system, instead first said: “I love 

racing. I love country music. And I want to be President of the United States. Vote for 

Bob Dole.” Wushington Post (May 20,1996). There were 120,000 racing fans in 

attendance. While there may have been party-related events added to this trip, it strains 

credulity to claim no aspect of such events would have been to influence Senator Dole’s 

own election. 

There are numerous other exampies: The Dole Schedule for a June 12,19% trip 

to Toledo, Ohio names Kim Fullex as “control” person and lists David Rettig as “staff 

and Steve Ross as “camera.” Id. All three individuals had been on the Dole Committee 

payroll in March of 1996, and had switched to the RNC payroll in April of 1996. Yet, 

they continued to carry out their travel advance work for the Dole campaign just as they 

had done before when they were formally on the Dole Committee payroll. Describing 

Senator Dole’s “campaign swing through Overland Park, Kansas, and Toledo Ohio,” 

CNN reported “Bob ‘I’m just a man’ Dole hits the heartland hoping his round-the-clock 

presidential quest soars as high as his renamed campaign plane.” “Inside Politics” (June 

12, 1996) quoted in Hotline (June 13,1996). C” hrther reported: “Aides say this trip 

is a chance for Dole to showcase himself, yet again, as a regular person.” Id. As before, 

even if party-related events were added to this trip, no evidence suggests that Senator 

Dole and the party oficials involved avoided any effort to promote Senator Dole’s own 

campaign. Under these circumstances, it is obvious that the RNC made, and the Dole 

Committee received, an excessive contribution. 

Our conclusion is affirmed by the Commission decision regarding the Dole 

Committee in these matters. On September 7,2001, the Commission entered into a 

conciliation agreement with the Dole Committee settling, infer alia, MURs 4382 and 

MUR 4401. In this conciliation agreement, the Dole Committee specifically admitted 

that it had “accepted excessive contributions from the Republican National Committee in 

violation of 2 U.S.C. 0 441a(f) and failed to report them in violation of 2 U.S.C. 

6 434(b).” Conciliation Agreement in MURs 4382,4401,4670,5098,5099,5170, and 

5 171 at 3,II V. I (September 7,2001). The Commission unanimously approved this 

agreement by a 6-0 vote. 

We believe the Coniniission also should have found that the RNC made an 

cxcessive contribution in violation of the Act. Our colleagues, however, voted to reject 

thc Office of General Counsel’s recommendation. We fail to understand how, undcr thc 

circumstanccs. one could niake a finding that the Dole Coinmittec accepted an excessive 

contribution from thc RNC but yct. vote to reject a finding that the RNC made an 

8 
M 

3 

3 

I 

0 

fi 

I 

m 

s 

0 

3 

(" (? 

excessive contribution to the, Dole Committee. .Just as we cannot accept our colleagues' 

interpretation of 11 C.F.R. 5 110.8(e)(2) which effectively turns that regulation on its 

head, we cannot agree with their inconsistent treatment of the legal issues in this matter. 

For all the above reasons, we voted to approve the General Counsel's legal 

recommendations to find probable cause to believe the Republican National Committee 

made excessive contributions to the Dole Committee in violation of 2 U.S.C. 

6 44la(a)(2)(A) and failed to report these excessive contributions in violation of 2 U.S.C. 

6 43403). 

(2-9 - 3 

Date ' . 

Date 

(g7 d. .IQ?!?Q/ 

annyLe McDonald 

Chaikd 

Scott E. Thomas 

Commissioner 

gar1 J. Sandstrom 

Comm&sioner