8 

f 

FEDERAL ELECTION COMMISSION 

WASHINGTON, D.C. 20463 

CERTIEIED MAIL 

RETURN RECEIPT REQUESTED 

William B. Canfield, Esq. SEP 30 20K 

General Counsel 

Commission on Hope, Growth and Opportunity 

1900 M Street NW, Suite 600 

Washington, DC 20036 

RE: MUR 6391 & 6471 

Commission on Hope, Growth and 

Opportunity 

Dear Mr. Canfield: 

On November 29, 2010, May 26,2011, and May 2, 2012, the Federal Election 

Commission notified your client, the Commission on Hope, Growth and Opportunity, of 

complaints alleging violations of certain sections of the Federal Election Campaign Act of 1971, 

as amended (the "Act"). Copies of the complaints and amended complaint were forwarded to 

you at that time. 

Upon fiirther review of the allegations contained in the complaint, and information 

supplied by your client, the Commission, on September 16,2014, found that there is reason to 

believe the Commission on Hope, Growth and Opportimity violated 52 U.S.C. § 30104 (formerly 

2 U.S.C. § 434), a provision of the Act. The Factual and Legal Analysis, which formed a basis 

for the Commission's finding, is attached for your information. 

You. may submit any factual or legal materials that you believe are relevant to the 

Commission's consideration of this matter. Please submit such materials to the General 

Counsel's Office within 15 days of receipt of this letter. Where appropriate, statements should, 

be submitted under oath. In the absence of additionail information, the Commission may find 

probable cause to believe that a violation has occurred and proceed with conciliation. 

Please note that you have a legal obligation to preserve all documents, records and 

materials relating to this matter until such time as you are notified that the Commission has 

closed its file in this matter. See 18 U.S.C, § 1519. 

If you are interested in pursuing pre-probable cause conciliation, you should so request in 

writing. See 11 C.F.R. §111.18(d). Upon receipt of the request, the Office of the General 
MUR 6391 & 6471 (Commission on Hope, Growth and Opportunity) 

Page 2 

Counsel will make recommendations to the Commission either proposing an agreement in 

settlement of the matter or recommending declining that pre-probable cause conciliation be 

pursued. The Office of the General Counsel may recommend that pre-probable cause 

conciliation not.be entered into at this time so thatit.may complete its investigation of the matteh 

Further, the Commission will not entertain requests for pre-probable cause conciliation after 

briefs on probable cause haye been mailed to the respondent. 

Requests for extensions of time will not be routinely granted. Requests must be made in 

writing at least five, days prior to the due date of the response and specific good cause must be 

demonstrated. In addition, the Office of the General Counsel ordinarily will not give extensions 

beyond 20 days. 

This matter will remain confidential in accordance with 52 U.S.C. §§ 30109(a)(4).(B) and 

30109(a)(12)(A) (formerly 2 U.S.C. §§ 437g(a)(4)(B.) and 437g(a)(12)(A)) unless you notify the 

Commission in writing that yOu wish, the matter to be made public. 

If you have any questions, pilease contact Kasey Morgenheim, the attorney assigned to 

this matter, at (202) 694-1650. 

On behalf of the Cornmission, 

Leet. Goodman 

Chair I 

Enclosure j 

Factual and Legal Analysis ! 
1 FEDERAL ELECTION COMMISSION 

2 

3 FACTUAL AND LEGAL ANALYSIS 

4 

5 RESPONDENT; Commission on Hope, Growth and Opportunity MUR 6391 & 6471 

6 

7 I. INTRODUCTION 

8 This matter was generated based on a Complaint filed with the Federal Election 

9 Commission ("Commission") by the Democratic Congressional Campaign Committee and a 

10 second Complaint filed by Citizens for Responsibility and Ethics in Washington. See 52 U.S.C. 

11 § 30109(a)(1) (formerly 2 U.S.C. § 437g(a)(l)).' This matter involves allegations that the 

12 Commission on Hope, Growth and Opportunity ("CHGO") violated the Federal Election 

13 Campaign Act of 1971, as amended (the "Act"), by failing to report and include proper 

14 disclaimers on advertisements that cost more than $2 million. See 52 U.S.C. §§ 30104, 30120 

15 (formerly 2 U.S.C. §§ 434, 441 d).^ 

' On September 1, 2014, the Federal Election Campaign Act of 1971, as amended (the "Act"), was 

transferred from Title 2 of the United States Code to new Title 52 of the United States Code. 

^ The Complaint in MUR 6391 alleges that CHGO violated the Act by spending over $600,000 to air several 

advertisements that were either independent expenditures or electioneering communications. Specifically, the 

complaint alleges that CHGO (i) failed to report the ads pursuant to 11 C.F.R. §§ 109.10 or 104.20, and (ii) failed to 

include proper disclaimers pursuant to 11 C.F.R. § 110.11. See Compl., MUR 6391 (Oct. 7,2010). Following the 

receipt of the MUR 6391 Complaint by the Commission, a notification letter and copy were sent to CHGO. Due to 

a clerical error, however, the letter and Complaint, were not received by CHGO until November 29,2010. At that 

time, CHGO filed with the Commission a motion to dismiss MUR 6391 on the basis that the delay in CHGO's 

receipt of the notification denied CHGO its due process. On April 21, 2011, the Commission unanimously 

determined that it would not grant the relief requested in CHGO's motion to dismiss, and CHGO was subsequently 

granted additional time to file a substantive response to the MUR 6391 Complaint. 

The Complaint in MUR 6471 alleges that CHGO spent more than $2.3 million to broadcast fifteen 

advertisements in twelve Congressional races. See Compl. at 3, MUR 6471 (May 23, 2011), amend. (Apr. 26, 

2012). The MUR 6471 Complaint includes among its attachments each advertisement identified in the MUR 6391 

Complaint, as well as several other advertisements. As in MUR 6391, the MUR 6471 Complaint alleges that CHGO 

aired advertisements that were either independent expenditures or electioneering communications, and (i) failed to 

report them pursuant to 52 U.S.C. § 30104(g) (formerly 2 U.S.C. § 434(g)) or 52 U.S.C. ij 30104(f)(1) (formerly 

2 U.S.C. § 434(f)(1)), and (ii) failed to include proper disclaimers pursuant to 52 U.S.C. § 30120 (formerly 2 U.S.C. 

§ 44Id). This Complaint also alleges that the reporting violations were knowing and willful. See Compl. at 11. The 

available information, however, does not suggest that the reporting and disclaimer violations were knowing arid 

willful. The Amended Complaint also alleged that CHGO failed to organize, register, and report as a political 

committee in violation of 52 U.S.C. §§ 30102,30103 and 30104 (formerly 2 U.S.C. §§ 432,433 and 434). See 

Compl., amend. (Apr. 26, 2012). 
MUR 6391 & 6471 (Commission on Hope, Growth and Opportunity) 

Factual & Legal Analysis 

Page 2 

1 CHGO asserts that "no text in any of the communications complained of by the DCCC 

2 contained a single word or any phrase that would constitute 'express advocacy,' as that term is 

3 defined at 11 C.F.R. § 100.22(a)." Resp. at 6 (June 1, 2011). CHGO argues that it "may not and 

4 does not engage in electoral politics at the federal level and all communications made to the 

5 public by CHGO are specifically issue oriented and do not advocate the election or defeat of any 

6 identified federal candidate." Id. at 3.^ CHGO maintains that the organization's sole purpose is 

7 to educate the public on matters of economic policy formulation, and that CHGO is not a 

8 political committee. See Supp.. Resp. at 5-6 (Oct. 20,2011). As discussed below, the 

9 Commission finds reason to believe that CHGO violated 52 U.S.C. § 30104 (formerly 2 U.S.C. 

10 § 434) by failing to report the advertisements at issue. 

11 II. FACTUAL AND LEGAL ANALYSIS 

12 A. Facts 

13 1. CHGO 

14 

15 CHGO is a non-profit organization, formed in March -2010 that is recognized as an 

16 exempt organization under section. 501 (c)(4) of tlie Internal Revenue Code. Resp. at 2. CHGO 

17 describes itself as a social welfare organization "focused on ihacro-economic issues" and 

18 fiinctioning "as an economic 'think tank'" on tax, trade, budget, and economic growth policies. 

19 Id. CHGO states that its sole purpose is "to educate the public on matters of economic policy 

20 formulation." Supp. Resp. at 5. 

^ Additionally, CHGO states that hone of its communications was "'targeted' at any specific electoral 

constituency." Resp. at 3. The Response states that if CHGO made an error with respect to the reporting of 

electioneering communications, such error was made in good faith, and in any event, the underlying policy 

considerations of the electioneering communications reporting requirements were served in this case by a 

combination of the disclaimer contained in each advertisement and the publicly available daily logs of broadcasters 

required by the FCC. Id. at 3-S.. CHGO also argues that the disclaimer contained in each advertisement was 

sufficient, on the basis that no broadcaster objected to the disclaimer's language and no member of the public 

complained that the identity of the communication's sponsor was unclear or misleading. Id. at 4. 
MUR 6391 & 6471 (Commission on Hope, Growth and Opportunity) 

Factual & Legal Analysis 

Page 3 

1 2. CHOP'S 2010 Activities 

2 CHOP'S activities appear to have consisted of maintaining its website,^ 

3 commissioning a policy paper,'' fundraising for itself, and disseminating several broadcast 

4 advertisements featuring at least 15 candidates for federal office leading up to the 20.10 general 

5 election. See Compl., MPR 6471, Attach.; see also Alison Fitzgerald, Secret Donors Multiply 

6 with Finances Dwarfing Watergate, DAILY HERALD, May 23, 2011 [hereinafter Fitzgerald, 

7 Secret Donors]. 

8 The following advertisements were attached to the MUR 6471 Complaint; 

CHGO 

Advertisement 

Federal Candidate(s) 

Identified 

Broadcast 

Arca(s)® 

Cost' 

"Collectible Coin" 

(7 versions) 

John Spratt/Mick Mulvaney; 

Walt Minnick; Suzanne 

Kosmas/Sandy Adams; Baron 

Hill/Todd Young; C.A. 

Ruppersberger/Marcelo 

Cardarelli; Paul Kanjorski/.Lou 

Barletta; Dan Maffei/Ann Marie 

Buerkle 

"nine cities" $635,910 

"Make America 

Work" (2 versions) 

John Salazar/Scott Tipton; 

Dan Maffei/Arm Marie Buerkle 

Unknown $362,810 

"Song and Dance" 

(4 versions) 

John Spratt/Mick Mulvaney; 

Kathy Dahlkemper/Mike Kelly; 

Frank Kratovil/Andy Harris; 

Allen Boyd/Steve Southerland 

South Carolina, 

Maryland, 

Pennsylvania, 

Phio, Florida 

$793,150 

"What She Believes" Cai'ol Shea-Porter Manchester, NH; 

Portland, ME; 

Boston 

$415,270 

"pueen Nancy" Allen Boyd Unknown $41,100 

" CHGO included in its response screen-shots of each page of its publically available website. See Supp. 

Resp. at 5, Ex. B. 

' Dan Mitchell, "An Agenda to Restore American Prosperity," Supp. Resp., Ex. B. Dan Mitchell is a Senior 

Fellow in Economics at the CATO Institute. 

See Fitzgerald, Secret Donors. 

See Id..; Compl. at 4-6, MUR 6471. 
MUR 6391 & 6471 (Commission on Hope, Growth and Opportunity) 

Factual & Legal Analysis 

Page 4 

1 Each of these advertisements is discussed, further below. 

2 i. "Collectible Coin" 

3 The MUR 6471 Complaint includes seven versions of "Collectible Coin," six of which 

4 are mock advertisements for a collectible coin bearing the faces of President Barack Obama, 

5 Nancy Pelosi, and a specific Democratic congressional candidate, which is then followed by 

6 positive references to that Democratic congressional candidate's Republican opponent. See 

7 supra Section II. A.2.; Compl., MUR 6471, Attach. These six versions of the ad are the same 

8 except for the candidates featured in the ads. 

9 One such version features Democratic candidate Dan Maffei and his Republican 

10 opponent, Ann Marie Buerkle, and states: 

11 Now you can own a piece of American history enshrining forever President 

12 Obama increasing the national debt to a staggering $13.4 trillion. Clad in 24-carat 

13 fool's gold, the coin commemorates Dan Maffei's unwavering votes for the Pelosi 

14 agenda an astounding 96% of the tirne. You can own this prized collectible for 

15 just your share of the national debt—plus all the taxes Pelosi can think of. Call 

16 Congressman Dan Maffei to order yours today. 

17 

18 The advertisement then abruptly switches narrators, and an image of Ann Marie Buerkle appears 

19 along with the written message: "Help Ann Marie Buerkle. Stop the Spending. Make America 

20 Work Again." The new narrator states: "Ann Marie Buerkle has a better idea: Stop the 

21 spending and get America working again." See Compl., MUR 6471, Attach. 

22 One version of "Collectible Coin" differs slightly from the rest in that it casts a favorable 

23 light on a Democratic candidate (Walt Minnick. In the Walt Minnick version, no opponent is 

24 mentioned—only President Obama and Nancy Pelosi are featured on the fake coin^—and thus 

25 there is no contrast drawn between Minnick and a competitor. Additionally, the final graphic 

26 features an image of Minnick and the text: "Walt Minnick. Stop the Spending. An Independent 

27 Voice for Idaho. Call [a phone number believed to be Minnick's office phone number at the 
MUR 6391 & 6471 (Commission oii Hope, Growth and Opportunity) 

Factual & Legal Analysis 

Pages 

1 time]." The voice-over states; "Stop the spending. Stand with Walt Minnick: Idaho's 

2 independent voice." 

3 a. "Make America Work" 

4 There are two versions of a CHGO ad entitled "Make America Work" that attack 

5 Democratic candidates and positively reference their Republican opponents. One version 

6 features John Salazar and his opponent, Scott Tipton, and the other features Dan Maffei and his 

7 opponent, Ann Marie Buerkle. The Salazar/TiptOn version of the ad states: 

8 Jolin Salazar says he's an independent voice. But he voted for the Pelosi agenda 

9 an astounding 97% of the time. Salazar squandered billions on a bogus stimulus 

10 bill as unemployment skyrocketed- And Salazar led the charge with Pelosi for 

11 Obamacare, further crippling rural Colorado's economy. As a local business 

.12 owner, Scott Tipton believes Coloradans know best how to create jobs and grow 

13 our economy. Help Scott Tipton make America work again. 

14 

15 A graphic on the screen states, "The Tipton Plan," the pillars of which are "cut[ting] taxes and 

16 wasteful spending" and "ereat[ing] jobs for Colorado." The text accompanying the final image 

17 of Scott Tipton also reads: "Help Scott Tipton Make America Work Again." See Compl., MUR 

18 6471, Attach,® 

19 Hi. "Song and Dance" 

20 There are four versions of a CHGO ad entitled "Song and Dance," which features a 

21 chorus line with three of the dancers' faces replaced with the faces of President Obama, Pelosi, 

22 and a specific Democratic Congressional candidate, and which is then followed by positive 

23 references to that Democratic Congressional candidate's Republican opponent. The four 

' The first.portion of the MafFei/Buerkle ad substitutes Maffei for Salazar but is almo.st identical in text. The 

Maffci/Buerkle ad continues, "Ann Marie Buerkle believes New Yorkers know best how to create jobs and grow our 

economy. She'll stand up to Nancy Pelosi, fight to create jobs, and lower taxes for all New Yorkers. Help Ann 

Marie Buerkle make America work.again." Compl., MUR 6471, Attach. 
MUR 6391 & 6471 (Commission on Hope, Growth and Opportunity) 

Factual & Legal Analysis 

Page 6 

1. versions of the ad are the same except for the candidates featured in the ads. The Allen 

3 

4 

5 

6 

7 

8 

9 

10 

Boyd/Steve Southerland iteration of "Song and Dance" states: 

It's the worst economy in decades. And the folks in Washington are living it up, 

spending our tax dollars like there's no tomorrow. Leading this big song and 

dance: Obama, of course, and Nancy Pelosi. But there's one face you might not 

expect to see—our old friend Allen Boyd. Instead of looking out for us, Boyd 

approved billions in deficit spending without missing a beat. Let's pull the plug 

on this song and dance once and for all. 

At this point in the advertisement, the music stops and the screen fades to black. An 

11 image of Steve Southerland then appears. A printed message reads: "Fight Back. Join Steve 

12 Southerland. Stop the Big Spenders in Congress." The narrator states: "Join Steve 

13 Southerland's fight against the big spenders in Washington." See Compl., MUR 6471, Attach. 

14 iv. " What She Believes" 

15 One CHGO ad (entitled "What She Believes") contains a split-screen image with text on 

16 the left side, and a clip of Congressional candidate Carol Shea-Porter at a podium addressing an 

17 unidentified group of people on the right side. The ad proceeds as follows; 

On-screen text: 

Shea-Porter defends her votes for: $862 

billion stimulus 

Shea-Porter defends her votes for: $940 

billion Obamacare 

It gets worse 

Shea-Porter voted for the Pelosi House 

agenda 93%! 

Does she believe what we believe? 

Call Congresswoman Shea-Porter 

(603)641-9536 

Porter: 

"Now, I'm not going to pretend that I'm 

voting with the opposite party half the time. 

I'm not. I'm not. 

1 think 1 have about a 90% rating with the 

President, and maybe 93... 

.. .93% with the House. 

All along, 1 have said, you know, 'This is 

what 1 believe.' This is what 1 believe." 

Narrator voice-over: 

"Call Congressworhan Shea-Porter. Let her 

know if what you believe is. what she believes 

when it comes to spending your tax dollars." 
MUR 6391 & 6471 (Commission on Hope, Growth arid Opportunity) 

Factual & Legal Analysis 

Page 7 

1 See CompL, MUR 6471, Attach. 

2 V. "Queen Nancy " 

3 

4 There was a single CHGO ad entitled "Queeii Nancy," which features images of 

5 candidates Allen Boyd and Nancy Pelosi, among others, and states: 

6 Once upon a time, there was a very demanding queen of the Congress named 

7 Nancy. Whenever Queen Nancy gave an order, it was obeyed. One of her most 

8 loyal followers was our Allen Boyd, voting for the queen's agenda 96% of the 

9 time. But one day, Allen rebelled and voted 'no' on Obamacare. Queen Nancy 

10 shouted, 'Off with his head!' and Allen quickly changed his vote to 'yes.' Call 

11 Allen. Urge him to vote'no'again. Tell him you're not afraid of Queen Nancy, 

12 and he shouldn't be either. 

13 

14 Text on the screen reads: "Call Congressman Allen Boyd. (850)561-3979. Tell him to repeal 

15 Obamacare." 5ee Corapl., MUR 6471, Attach. 

16 B. Analysis 

17 1. Reporting 

18 Under the Act, every person who makes independent expenditures in an aggregate 

19 amount or value in excess of $250 during a calendar year shall report such independent 

20 expenditures to the Commission. 52 U.S.C. § 301.04(c)(1) (formerly 2 U.S.C. § 434(C)(1)); 

21 11 C.F.R. § 109.10. An "independent expenditure" is an expenditure by a person expressly 

22 advocating the election or defeat of a clearly identified federal candidate that is not coordinated 

23 with a candidate, a candidate's, authorized committee, or their agents, or a political party 

24 committee or its agents. 52 U.S.C. § 30101(17) (formerly 2 U.S.C. § 431(17)); 11 C.F.R. 

25 § 100.16. 

26 In addition, under the Act, every person who makes a disbursement for the direct costs of 

27 producing and airing electioneering communications in an aggregate amount in excess of 

28 $ 10,000 during any calendar year shall, within 24 hours of each disclosure date, report such. 
MUR 6391 & 6471 (Commission on Hope, Growth and Opportunity) 

Factual & Legal Analysis 

Pages 

1 electioneering communications to the Commission. 52 U.S.C. § 30104(0(1) (formerly 2 U.S.C. 

2 § 434(0(1)); 11 C.F.R. § 104.20. An "electioneering communication" is defined as any 

3 broadcast, cable, or satellite communication which (a) refers to a clearly identified candidate for 

4 federal office, (b) is publicly distributed within 60 days before a general election or 30 days 

5 before a primary election, and (c) is targeted to the relevant electorate. 52 U.S.C. § 30104(0(3) 

6 (formerly 2 U.S.C. § 434(0(3)); 11 C.F.R. § 100.29. The term "electioneering communication" 

7 does not include a communication that constitutes an expenditure or an independent expenditure. 

8 52 U.S.C. § 30104(0(3)(B)(ii) (formerly 2 U.S.C. § 434(0(3)(B)(ii)). A.communication is 

9 "targeted to the relevant electorate" when it can be received by 50,000 or more persons in the 

10 congressional district the candidate seeks to represent. 11 C.F.R. § 100.29(b)(5)(i). 

11 Based on the available information, it appears likely that CHGO should have reported the ' 

i 

: 

12 advertisements identified in the complaint pursuant to 52 U.S.C. § 30104 (formerly 2 U.S.C. 

13 § 434). Accordingly, the Commission finds reason to believe that CHGO violated 52 U.S.C. I 

I 

14 § 30104 (formerly 2 U.S.C. § 434) by failing to properly report its advertisements. • 

j 

15 2. Possible Political Committee Status i 

i 

16 Political committees must register with the Commission and periodically disclose their 

17 receipts and disbursements. 52 U.S.C. §§ 30102, 30103 and 30104 (formerly 2 U.S.C. §§ 432, 

18 433 and 434). The Act and Commission regulations define a "political committee" as "any 

19 committee, club, association or other group of persons which receives contributions aggi'egating 

20 in excess of $ 1,000 during a calendar year or which makes expenditures aggregating in excess of 

21 $1,000 during a calendar year." 52 U.S.C. § 30101(4)(A) (formerly 2 U.S.C. § 431(4)(A)); 

22 11 C.F.R. § 100.5. In Buckley v. Valeo, 424 U.S. 1 (1976), the Supreme Court held that defining 

23 political committee status "only in teims of [the] amount of annual 'contributions' and 
•MUR 63.91 & 6.471 (Commission on Hope, Growth.and Opportunity) 

Factual & Legal Analysis 

Page 9 

1 'expenditures'" might be overbroad, reaching "groups engaged purely in issue discussion." Id. at 

2 79. To cure that infirmity, the Court concluded that the term "political committee" "need only 

3 encompass organizations that are under the control of a candidate or the major purpose of which 

4 is the nomination or election.of a candidate." Id. (emphasis added). Accordingly,, iinder the. 

5 statute as thus construed, an organization that is not controlled by a candidate must register as a 

6 political committee only if (1) it crosses the.$l ,000 threshold and (2) it has as its "major 

7 purpose" the nomination or election of federal candidates. 

8 The Amended Complaint raises the additional question of whether CHGO satisfies the 

9 definition of "political committee." If CHGO satisfies the definition of "political committee," it 

10 would be subject to the political committee reporting requirements and the Act's disclaimer 

11 requirements for political committees.. See 52 U.S.C. §§ 30104(a)(1), 30104(b), 30104(f), 

12 30104(g), and 3.0120 (formerly 2 U.S.C. §§ 434(a)(1), 434(b), 434(f), 434(.g), and 4414); 

13 11 C.F.R. §§ 104.1(a), 104.3, 104.4, 104.20, and 110.11. However, the Commission takes no 

14 action on these issues at this time.