In the Matter ofȱȱ )

Mike Braun for Indiana; )ȱ ȱ

Thomas Datwyler, )ȱȱ AR 22Ȭ02

in his official capacity asȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱ )

Treasurer. )

INTRODUCTION

The Federal Election Commission (“FEC” or “Commission”) is only authorized to

initiate enforcement if there is “reason to believe” that a respondent has violated either: (i)

some provision of the Federal Election Campaign Act of 1971, as amended (the “FECA” or

“Act”); or (ii) its implementing regulations.1 The Commission may not initiate enforcement

on any other basis.2

The bulk of Finding 1 (“Misstatement of Financial Activity”) of Audit Referral 22Ȭ02

describes a violation of neither the Act nor Commission regulations by Mike Braun for

Indiana “MBFI.” Rather, Finding 1 describes the ignorance of MBFI’s former treasurer of

certain secret, idiosyncratic, aesthetic standards that the FEC’s Reports Analysis Division

(“RAD”) and Audit Division have concocted on their own for reporting the conversion of

candidate loans into contributions to a candidate’s “authorized committee.”ȱȱ

These secret reporting standards are not described in any publicly available guidance

and lack any legal authority. And but for the conversions of $6.4 million in candidate loans

into contributions that failed to conform to these secret reporting standards, the rest of the

issues described in Finding 1 never would have been referred or even triggered an audit

finding in the first instance.3ȱȱ

1 52 U.S.C. § 30109(a)(2); 11 C.F.R. § 111.9.

2 See id.

3 The other issues involve $96,520 in candidate loans that inadvertently were not reported,

$2,736 in disbursements that inadvertently were not reported or reported incorrectly, $4,472 in credit

card fees that inadvertently were overreported, and “Unexplained differences” in receipts and

disbursements of $1,312 and $708, respectively.

By OGC-CELA at 1:07 pm, Aug 15, 2022

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MIKE BRAUN FOR INDIANA

    AR 22‐02

    PAGE 2 OF 5

Accordingly, the Commission should find no reason to believe that MBFI violated

any provisions of the Act or Commission regulations on the basis of Finding 1 of this Audit

Referral.

DISCUSSION

The main issue in Finding 1 that the Final Audit Report of MBFI for the 2018 election

cycle (hereinafter, “FAR”) finds fault with is how MBFI reported the conversion of personal

loans totaling $6,388,558 that Senator Braun made to MBFI into contributions. While MBFI

has since fully amended the reporting of those transactions to the Audit Division’s

satisfaction,4 MBFI disputes the premise in the FAR and audit referral that the way in which

MBFI originally reported those transactions violated any part of the FECA or Commission

regulations or otherwise harmed the public record in any manner.

According to the FAR:

The converted loan amounts should have been disclosed as memo entries on

Schedule A (Itemized Receipts) and Schedule B (Itemized Disbursements), given

the campaign finance software used by MBFI. Instead, MBFI reported the loan

amounts as transactions on Schedules A and B, which overstated receipts and

disbursements, respectively.5

Tellingly, the FAR uses the precatory language of “should,” rather than the

mandatory language of “were required to.” The FAR cites no legal authorities—because there

are none—addressing the particular issue of how authorized committees are to report the

conversion of candidate loans into contributions.  

The only authority included in Finding 1 under the “Legal Standard” section is “52

U.S.C. § 30104(b)(1), (2), (3), (4), and (5).” While those FECA provisions generally address the

reporting of loans (including loans from the candidate) made to an authorized committee,

they do not address the particular issue here: whether the conversion of candidate loans into

contributions must be reported as “memo entries on Schedule A (Itemized Receipts) and

Schedule B (Itemized Disbursements)” (as the FAR demands) rather than as “transactions on

Schedules A and B” (as MBFI reported them).6 Needless to say, the statute also does not

4 FAR at 10 (“In response to the Draft Final Audit Report, MBFI filed amended disclosure

reports that corrected the public record.”)

5 FAR at 9 (emphasis added).

6 Id.

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MIKE BRAUN FOR INDIANA

    AR 22‐02

    PAGE 3 OF 5

address how MBFI should have reported the loan conversions “given the campaign finance

software used.”7

Although not cited as authorities in the FAR, we note that the following authorities

also do not address the particular issue here:

 11 C.F.R. § 104.3: Subparagraph (a)(3)(ii) and (vii) of this regulation specifically do not

address how committees are to report “loans made, guaranteed, or endorsed by a

candidate to his or her authorized committee,” let alone how the conversion of such

loans into contributions is to be reported, either generally or “given the campaign

finance software used.”

 11 C.F.R. § 100.52: This regulation specifies that any loan to a committee “is a

contribution to the extent that it remains unpaid.” However, this regulation also does

not specify how the conversion of a loan to an authorized committee that a candidate

forgives is to be reported, either generally or “given the campaign finance software

used.”

 Form 3 instructions:8 While the instructions generally address the reporting of loans,

they also do not specifically address how to report the conversion of candidate loans

into contributions, either generally or “given the campaign finance software used.”  

 The Commission’s “Candidate’s Guide”:9 The guide also merely addresses the general

reporting of loans, and does not specifically address how to report the conversion of

candidate loans into contributions, either generally or “given the campaign finance

software used.”10

In short, there is no legal authority (or even any publicly available Commission

guidance) specifying how MBFI was to report the conversion of Senator Braun’s loans to the

committee into contributions. Unless someone has inside knowledge of the secret,

idiosyncratic, aesthetic standards that RAD and the Audit Division have concocted on their

7 Id.

8 https://www.fec.gov/resources/cms‐content/documents/fecfrm3i.pdf. To the extent that the

Act authorizes the Commission to prescribe reporting forms, see 52 U.S.C. § 30107(a)(8), the Form 3

instructions arguably carry some weight of legal authority.

9 https://www.fec.gov/resources/cms‐content/documents/candgui.pdf. We note that this is

merely agency guidance and does not carry any legal authority.

10 See id. at 119‐123.

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MIKE BRAUN FOR INDIANA

    AR 22‐02

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own, one would have no idea how these agency divisions expect committees to report these

transactions.  

To initiate an enforcement proceeding against MBFI for Finding 1 under these

circumstances would violate MBFI’s rights to “due process and fair notice. It [would] violate[]

principles of fundamental fairness to hold respondents liable for violating legal rules that

have not been previously announced . . . .”11

Moreover, the way in which MBFI reported the transactions at issue did not

undermine the purposes of the Act’s reporting requirements in any way. As the FAR itself

describes the transactions, MBFI did not skew or obscure the loan conversions or understate

or overstate them in any way. The transactions were fully reported.  

While the FAR characterizes the reported transactions in terms of an “overstatement

of receipts” and “overstatement of disbursements,” this characterization appears to be

skewed. Per the FAR, MBFI’s reported financial condition does not appear to have been

affected in any way; MBFI’s ending cash on hand balance was only off by $1,132, and that

discrepancy appears to have been due to “Unexplained differences” rather than the way in

which the loan conversions were reported.12

In short, the way in which MBFI reported the loan conversions violated no provision

of the Act or Commission regulations and resulted in no harm to the public record

whatsoever. The only harm it inflicted was against the secret, idiosyncratic, aesthetic

reporting standards that RAD and the Audit Division have concocted. Those, however, are

not valid legal authorities that can form the basis for an RTB finding.13

   

11 Policy Statement of Chairman Allen Dickerson and Commissioners Sean J. Cooksey and

James E. “Trey” Trainor, III Concerning the Application of 52 U.S.C. § 30104(c) at 6‐7 (internal citations

omitted).

12 FAR at 9.

13 See 52 U.S.C. § 30109(a)(2); 11 C.F.R. § 111.9; see also 52 U.S.C. § 30108(b) (“Any rule of law

which is not stated in this Act or in chapter 95 or chapter 96 of title 26 may be initially proposed by

the Commission only as a rule or regulation pursuant to procedures established in section 30111(d) of

this title.”)

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MIKE BRAUN FOR INDIANA

    AR 22‐02

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CONCLUSION

For the reasons described above, the Commission should find no reason to believe

that MBFI violated any provisions of the Act or Commission regulations on the basis of

Finding 1 of this Audit Referral.

MBFI preserves its right to present information about mitigating factors during the

conciliation process with respect to Finding 5 of the Audit Referral, as well as Finding 1,

should the Commission find reason to believe on that finding (notwithstanding all of the

above‐stated reasons for why it should not).

Sincerely,

Chris K. Gober

Eric Wang

Counsel to Mike Braun for Indiana, and

Thomas Datwyler, in his official capacity as Treasurer

MUR810700017
Rev. 2021

STATEMENT OF DESIGNATION OF COUNSEL 

Provide one form for each Respondent/Witness

EMAIL cela@fec.gov

AR/MUR/RR/P-MUR# _______________________ 

Name of Counsel: _______________________________________________________________________ 

Firm: _________________________________________________________________________________ 

Address: _______________________________________________________________________________ 

_______________________________________________________________________________ 

Office#: ___________________________ Fax#: ________________________________ 

Mobile#: ___________________________ 

E-mail: ________________________________________________________________________________

The above-named individual and/or firm is hereby designated as my counsel and is authorized to receive any 

notifications and other communications from the Commission and to act on my behalf before the Commission. 

____________ _________________________________________________ _____________________

 Date (Signature - Respondent/Agent/Treasurer) Title

_____________________________________________________

 (Name – Please Print)

RESPONDENT: ________________________________________________________ (Please print Committee Name/ Company Name/Individual Named in Notification Letter)

Mailing Address: 

(Please Print)

________________________________________________________________________ 

 ________________________________________________________________________ 

Home#: ____________________________ Mobile#: ____________________________ 

Office#: ____________________________ Fax#: _______________________________ 

E-mail: ____________________________________________________________

This form relates to a Federal Election Commission matter that is subject to the confidentiality provisions of 52 U.S.C. § 30109(a)(12)(A). 

This section prohibits making public any notification or investigation conducted by the Federal Election Commission without the express 

written consent of the person under investigation. 

FEDERAL ELECTION COMMISSION

1050 First Street, NE 

Washington, DC 20463

AR 22-02 Chris K. Gober, Eric Wang The Gober Group PLLC 14425 Falcon Head Blvd. Building E-100, Suite 226 Austin, TX 78738512-354-1787 877-437-5755 politicallaw@gobergroup.com Treasurer Thomas C. Datwyler

Mike Braun for Indiana

P.O. Box 159 Zionsville, IN 46077

DocuSign Envelope ID: C7DBE047-5DA7-40FA-B8E2-3291FF1D9C45

8/8/2022

MUR810700018