FEDERAL ELECTION COMMISSION

WASHINGTON, D.C. 20463

STATEMENT OF REASONS OF COMMISSIONERS

SHANA M. BROUSSARD AND ELLEN L. WEINTRAUB

This matter concerned the failure to report the ultimate payees and the misreporting of 

$489,350.89 in salary payments to employees of the principal campaign committees of 2020 Ohio 

congressional candidates Alaina Shearer and Desiree Tims (“Shearer and Tims Committees”) as state 

party payroll payments by the Ohio Democratic Party (“ODP”). The Complaint alleged, among other 

things, that ODP misreported its apparent subsidy of the Shearer and Tims Committees as state party 

payroll expenses.1 In its Response, ODP asserted that it was acting as a payroll service in processing 

payments from the candidates’ campaign committees to the candidates and other campaign committee 

staff and that the Shearer and Tims Committees were the original sources of the funds used make the 

salary payments.2 However, on disclosure reports, ODP disclosed each of the salary payments as 

“Payroll,” with the name of the individual recipient; there was no indication that the payments were 

made on behalf of another committee.3 On their reports, the Shearer and Tims Committees disclosed

multiple disbursements to ODP as “Contribution” and “Contribution – Payroll,” but the entries failed to 

itemize which individuals were the ultimate recipients of the salary payments.4 

The Office of General Counsel (“OGC”) recommended finding reason to believe that the 

Shearer and Tims Committees violated 52 U.S.C. § 30104(b)(4) by improperly reporting the purpose of 

disbursements to ODP and failing to report the resulting salary payments to specific campaign 

committee employees. OGC further recommended finding reason to believe that ODP violated 52 

1 Compl. at 7. (Sept. 10, 2020). The Complaint also alleged that the salary payments to candidates Shearer and Tims 

were an impermissible personal use of campaign funds. Compl. at 6. For the reasons explained in the Factual and Legal 

Analyses, we voted to approve the Office of General Counsel’s recommendation to find no reason to believe that such a 

violation had occurred. Factual and Legal Analysis (Ohio Democratic Party) at 4-6 (“ODP F&LA”); Factual and Legal 

Analysis (Alaina Shearer for Congress) at 3-5 (“Shearer F&LA”); Factual and Legal Analysis (Gem City Rise PAC (f/k/a 

Friends of Desiree Tims)) at 3-5 (“Tims F&LA”); see also Certification, MUR 7792 (April 28, 2022).

2 ODP Resp. at 1-2 (Nov. 19, 2020).

3 See ODP F&LA at 3-4.

4 See Shearer F&LA at 7; Tims F&LA at 7-8.

BEFORE THE FEDERAL ELECTION COMMISSION

In the Matter of

Ohio Democratic Party

Alaina Shearer for Congress

Gem City Rise PAC (f/k/a Friends of 

Desiree Tims)

)

)

)

)

)

 

 MUR 7792

 

MUR779200137
MUR 7792 (Ohio Democratic Party, et al.)

Statement of Reasons

Page 2 of 4

U.S.C. § 30104(b)(4) by improperly reporting the purpose of the disbursements to federal candidate 

campaign committee employees, including Shearer and Tims. 

While we agreed with OGC’s recommendations with respect to the Shearer and Tims 

Committees’ misreporting, we voted to dismiss as a matter of prosecutorial discretion the allegation that 

ODP violated 52 U.S.C. § 30104(b)(4) by improperly reporting the purpose of the disbursements to the 

campaign committee employees.

5

 We agreed with OGC that by failing to indicate that the salary 

payments were made on behalf of another committee, ODP deprived the public of meaningful 

disclosure information.6 However, in our view, ODP was not on sufficient notice that the regulations 

required it to connect the individuals to the specific campaign committees which provided the funds for 

those payments. As explained in the ODP Factual and Legal Analysis, Commission regulations require 

a political party committee to itemize disbursements aggregating in excess of $200 to the same payee in 

a calendar year.7 For each itemized disbursement, a political party committee must provide the 

identification of the payee, the date and amount of the payment, and the purpose of the disbursement.8 

The term “purpose” means a brief statement or description of why the disbursement was made –

Commission regulations and guidance provide examples of adequate purpose descriptions, including 

“dinner expenses, media, salary, polling, travel, party fees, phone banks, travel expenses and catering 

costs.”9 

Currently, neither the Act nor Commission regulations directly address the reporting of ultimate 

payees such as subvendors, subcontractors, or vendor employees. However, in a 2013 interpretive rule, 

the Commission clarified the itemization requirement and specifically addressed the proper disclosure 

of ultimate payees where a committee pays a credit card bill that includes charges exceeding $200 from 

a single vendor.10 It explained that a committee itemizing a disbursement to a credit card company 

“must itemize as a memo entry any transaction with a single vendor charged on the credit card that 

exceeds the $200 itemization threshold” in order to itemize the “ultimate payee, as the provider of the 

goods and services to the political committee” and to reflect that the credit card company was not the 

provider of those goods and services.11 

5 See Certification, MUR 7792 (April 28, 2022). Following a finding of reason to believe that the candidate 

committees violated 52 U.S.C. § 30104(b)(4), OGC entered into pre-probable cause conciliation with the candidate 

committees and subsequently recommended that the Commission accept a signed conciliation agreement. Memorandum to 

the Commission: Recommendation to Accept Signed Conciliation Agreement (Oct. 6, 2022). We supported that 

recommendation. However, in the interim, the composition of the Commission had changed and there were an insufficient

number of votes to approve the signed conciliation agreement. Certification, MUR 7792 (Nov. 15, 2022). On November 29, 

2022, the Commission voted to close the file in this matter. Certification, MUR 7792 (Nov. 30, 2022).

6 See First Gen. Counsel’s Rep. at 11, MUR 7792 (Ohio Democratic Party, et al.).

7 11 C.F.R. § 104.3(b)(1)(i), (3)(i); see ODP F&LA at 6-7.

8 11 C.F.R. § 104.3(b)(3)(i).

9 11 C.F.R. § 104.3(b)(3)(i)(A), (B); see also Instructions for FEC Form 3X and Related Schedules at 7, 13 (Revised 

5/2016), https://www.fec.gov/resources/cms-content/documents/fecfrm3xi.pdf (“FEC Form 3X Instructions); FEC 

CAMPAIGN GUIDE FOR POLITICAL PARTY COMMITTEES at 86 (Aug. 2013), https://www.fec.gov/resources/cmscontent/documents/partygui.pdf (“FEC Party Guide”).

10 In the rule, the Commission describes a committee’s obligation to report “ultimate payees” in three specific 

circumstances: (1) reimbursements to individuals who advance personal funds to pay committee expenses; (2) payments to 

credit card companies; and (3) payments by candidates who use personal funds to pay committee expenses without 

reimbursement. See Interpretive Rule on Reporting Ultimate Payees of Political Committee Disbursements, 78 Fed. Reg. 

40,625, 40,626 (July 8, 2013) (“Ultimate Payee Interpretive Rule”). 

11 Ultimate Payee Interpretive Rule, 78 Fed. Reg. at 40,626.

MUR779200138
MUR 7792 (Ohio Democratic Party, et al.)

Statement of Reasons

Page 3 of 4

While the Commission has provided guidance that reporting disbursements for salary payments 

to employees are to be disclosed in the same manner as credit card payments and ultimate payees,12 this 

guidance appears to apply to the initial payor, not to an entity serving as a payment processor. For 

example, specific guidance concerning the proper reporting of disbursements when using payroll 

companies states that “[t]he payroll disbursement will be itemized . . . once payments to the payroll 

company aggregate more than $200 in an election cycle,” and that the reporting committee “will also

itemize the ultimate recipients of the salary payments as memo entries . . . once aggregate payments to 

the individual are more than $200 in an election cycle.”13 By contrast, the only guidance for how the

payroll processor must report itemized disbursements14 for salary on behalf of another entity were the 

requirements to provide the name of the recipient, the date and amount, and an adequate purpose 

description – a list of which specifically included “salary.” Because it may not have been entirely clear 

before that reporting committees serving as payroll processors must indicate where a payment is being 

made on behalf of another committee as part of the purpose description, we voted to dismiss this 

allegation as a matter of prosecutorial discretion.15 Going forward, however, we will apply this 

interpretation of our disclosure regulations in enforcement matters, requiring disclosure where a 

payment is being made on behalf of another committee.

 

The reporting issues raised in this matter also highlight the need for the Commission to revise its 

regulations for the disclosure of ultimate payees. Although the Commission has issued guidance on the 

reporting of ultimate payees through the 2013 interpretive rule, described above, as well as through 

publications such as the FEC Form 3X Instructions and the FEC Party Guide, there are still gaps in the 

disclosure requirements as they apply to payments to intermediaries who in turn pay subvendors, 

subcontractors, and the like. In 2021, the Commission received a Petition for Rulemaking asking the 

Commission to revise its regulations to require that persons who report independent expenditures and 

electioneering communications itemize all expenditures or disbursements made on behalf of or for the 

benefit of the political committee or other reporting person, including those made by an agent, 

independent contractor, vendor, or subvendor.16 In response to the Petition, the Commission received a 

number of comments, many of which supported a rulemaking. We believe that the Commission should 

open a rulemaking to evaluate how our regulations can be updated to ensure adequate disclosure of the 

ultimate purpose for which disbursements are made.

12 See HOW TO REPORT/Using a payroll company/Reporting on candidate forms, FEC WEBSITE,

https://www.fec.gov/help-candidates-and-committees/filing-reports/using-payroll-company/. Additional guidance 

concerning the proper reporting of disbursements to payroll companies appears in another location on the Commission’s 

website, explaining that “[t]he lump sum paid to the payroll company must be followed MEMO entries that include the 

individuals that were the ultimate recipients of the salary payments,” and that such payments “are disclosed in the same 

manner as credit card payments and ultimate recipients.” See RAD FAQs for Political Action Committees, FEC WEBSITE, 

https://www.fec.gov/resources/cms-content/documents/RAD_FAQs-PACs_last_visited_september_21_2020.pdf (“RAD 

FAQs”). 

13 HOW TO REPORT/Using a payroll company/Reporting on candidate forms, FEC WEBSITE,

https://www.fec.gov/help-candidates-and-committees/filing-reports/using-payroll-company/.

14 There is no obligation for payroll processing vendors to file regular disclosure reports merely by virtue of their 

status as payroll processors. See 11 C.F.R. § 104.1(a). In this case, ODP had reporting obligations due to its status as a state 

party committee.

15 Heckler v. Chaney, 470 U.S. 821, 831 (1985).

16 Rulemaking Petition: Subvendor Reporting, 86 Fed. Reg. 42,753 (Aug. 5, 2021).

MUR779200139
MUR 7792 (Ohio Democratic Party, et al.)

Statement of Reasons

Page 4 of 4

______________________ __________________________

Date Shana M. Broussard

Commissioner

______________________

Date

__________________________ 

Ellen L. Weintraub 

Commissioner 

January 4, 2023

January 4, 2023

MUR779200140