FEDERAL ELECTION COMMISSION WASHINGTON, D.C. 20463

 

 January 4, 2024 

MEMORANDUM

TO: Patricia C. Orrock

 Chief Compliance Officer 

 Zuzana Pacious

Acting Assistant Staff Director, Audit Division

FROM: Neven F. Stipanovic 

 Associate General Counsel, Policy Division

 Jessica Selinkoff

 Assistant General Counsel, Compliance Advice 

Danita Alberico

Attorney

SUBJECT: Draft Final Audit Report on 1199 SEIU United Healthcare Workers East Federal 

Political Action Fund (LRA 1160) 

The Office of the General Counsel has reviewed the Draft Final Audit Report (“DFAR”) 

on the 1199 SEIU United Healthcare Workers East Federal Political Action Fund

(“Committee”). The DFAR contains three findings: (1) Misstatement of Financial Activity; (2) 

Reporting of Apparent Independent Expenditures; and (3) Recordkeeping for Communications. 

OGC concurs with the findings, and analyzes Findings 2 and 3, below. 

I. REPORTING OF APPARENT INDEPENDENT EXPENDIUTRES (FINDING 2). 

A. Reporting of Apparent Independent Expenditures

The Federal Election Campaign Act, 52 U.S.C. §§ 30101-45 (the “Act”), requires 

nonauthorized political committees to report, among other information, the “name and address of
LRA 1160 –DFAR Legal Analysis

1199 SEIU United Healthcare Workers East Federal Political Action Fund 

Page 2 

each ... person who receives any disbursement during the reporting period in an aggregate 

amount or value in excess of $200 within the calendar year ... in connection with an independent 

expenditure by the reporting committee.”1 The required information for an independent 

expenditure (“IE”) “shall be reported on Schedule E as part of a report covering the reporting 

period in which the aggregate disbursement for any independent expenditure to any person 

exceeds $200 per calendar year.”2 

In the Interim Audit Report (“IAR”), Audit staff identified apparent IEs totaling $825,663 

on Schedule B, Line 29 (Other Disbursements) that the Committee should have disclosed on 

Schedule E, Line 24 (Itemized Independent Expenditures). The Committee should have reported 

these IEs on Schedule E because they were publicly disseminated and paid for in the same 

reporting period;3 Schedule B is appropriate when a committee pays the production and 

distribution costs associated with an IE in one reporting period but does not publicly disseminate 

it until a later reporting period.

4

 Properly reporting IEs supports the Commission’s public 

disclosure priorities because campaign finance data is sorted and accessed differently based on 

the schedules and line numbers on which data is reported, to meet the needs of the public. 

In response to the IAR (“Response”), the Committee amended its reports to “correct the 

misattributions to Line 29 of disbursements that should have been disclosed on Schedule E.”5

 

The Response thus acknowledges that the Committee incorrectly disclosed its IEs and should 

have reported them on Schedule E, Line 24. 

Subsequent to its Response, the Committee provided other documentation showing that 

an additional $253,327 in apparent IEs also should have been reported on Schedule E, Line 24.6 

Thus, in the DFAR, Audit staff concludes that the Committee did not properly report IEs totaling 

1 52 U.S.C. § 30104(b)(6)(B)(iii) (also requiring reporting of the date, amount, and purpose of the 

independent expenditure (“IE”) and the name and office sought by the candidate the IE supports or opposes); see 

also id. § 30101(17) (defining “independent expenditure”). 

2 11 C.F.R. § 104.3(b)(3)(vii)(C).

3

 See Bipartisan Campaign Reform Act of 2002 Reporting, 68 Fed. Reg. 404, 407 (Jan. 3, 2003) (“If the 

communication is . . . publicly disseminated and paid for in the same reporting period, then the political committee 

must report the [IE] on Schedule E for that reporting period.”)

4 Id. (explaining that when a “political committee . . . pay[s] the production and distribution costs associated 

with an independent expenditure in one reporting period, but [does] not publicly distribute or otherwise publicly 

disseminate it until a later reporting period . . . the political committee must report the payment as a disbursement on 

Schedule B for operating expenditures”). 

5 Response to Interim Audit Report at 1 (Sept. 20, 2023) (“Response”).

6

 The IEs totaling $253,327, were included in the IAR in Finding 3 (Recordkeeping for Communications), 

from which they have now been removed. 
LRA 1160 –DFAR Legal Analysis

1199 SEIU United Healthcare Workers East Federal Political Action Fund 

Page 3 

$1,075,248.7 OGC concurs with the DFAR’s proposed finding that the Committee did not 

disclose apparent IEs totaling $1,075,248.

B. Failure to File 24-Hour Reports for Apparent Independent Expenditures

The Act requires a political committee that “makes or contracts to make independent 

expenditures aggregating $1,000 or more after the 20th day, but more than 24 hours, before the 

date of an election [to] file a report describing the expenditures within 24 hours.”8 After the 

initial report, a political committee must “file an additional report within 24 hours after each time 

[it] makes or contracts to make independent expenditures aggregating an additional $1,000 with 

respect to the same election as that to which the initial report relates.”9 The 24-hour report must 

be filed on Schedule E of FEC Form 3X.10 

The 24-hour IE reporting period for the November 3, 2020, general election was from

October 15 to November 1, 2020.11 Audit staff identified one disbursement on Schedule B to 

vendor Berlin Rosen for $25,500 for “IE CallHub/Voter Contact program management” phone 

bank services. The invoice12 was dated October 23, 2020. Audit staff identified a second 

disbursement on Schedule B to Berlin Rosen for “CallHub Dialer/Text Tool” phone bank 

services totaling $50,000. This invoice was dated October 26, 2020. 

The Committee did not submit documentation showing the dates that these 

communications were publicly disseminated so Audit staff used the respective invoice dates, 

which fell in the 24-hour IE reporting period, to determine that 24-hour reports were required. 

The Committee stated in the Response that the two payments to Berlin Rosen were “attributable 

to independent expenditures supporting Joseph Biden for President via telephone calls . . . that 

were disseminated between October 6 and Election Day, November 3.”13 Because the 

Committee does not have documentation supporting known dissemination dates, Audit staff in 

the DFAR used the invoice dates, which fall within 24-hour IE reporting period, for determining 

the relevant dates of dissemination of these IEs. 

7

 The auditors reduced the initial amount of $825,663 in the IAR to $821,921 after the Committee 

demonstrated that one mailer totaling $3,742 should not have been included in the total. Thus, $821,921 + $253,327

= $1,075,248.

8

 52 U.S.C. § 30104(g)(1)(A).

9

 Id. § 30104(g)(1)(B).

10 11 C.F.R. § 104.4(b).

11 24- and 48-Hour Reports of Independent Expenditures periods: general election (2020), 

https://www fec.gov/help-candidates-and-committees/dates-and-deadlines/2020-reporting-dates/24-and-48-hourreports-independent-expenditures-periods-general-election-2020/. 

12 The invoice totaled $41,250, of which $25,500 was for the CallHub phone bank services. The remainder, 

totaling $15,750, was a balance payment for website services.

13 Response at 2. 
LRA 1160 –DFAR Legal Analysis

1199 SEIU United Healthcare Workers East Federal Political Action Fund 

Page 4

The Committee did not file 24-hour reports for the two payments to Berlin Rosen totaling 

$75,500 for the dissemination of IEs within the IE reporting period. Based on this information, 

OGC concurs with including these communications in the proposed DFAR finding that the 

Committee did not file 24-hour reports for IEs totaling $75,500.

II. RECORDKEEPING FOR COMMUNICATIONS (FINDING 3).

The Act specifies that the treasurer of a political committee shall preserve all records and 

accounts required to be kept for three years after the report to which such records and accounts 

relate is filed.

14 Commission regulations governing “formal requirements” relating to reports, 

require that committees “shall maintain all records ... which shall provide in sufficient detail the 

necessary information and data from which the filed reports and statements can be verified, 

explained, clarified, and checked for accuracy and completeness.”15 

During fieldwork, Audit staff identified 17 disbursements on the Committee’s 24/48-hour 

reports totaling $1,025,299 to media vendor A/B Partners for which the Committee did not 

submit sufficient documentation to verify the disbursement reporting. Subsequent to the IAR 

Response, the Committee filed Schedules E amendments showing that its federal candidaterelated media disbursements to A/B Partners totaled $1,377,350. The Committee also provided 

Audit staff with documentation for disbursements totaling $1,413,000. Based on the 

Committee’s documentation, however, Audit staff found that the Committee’s expenditures for 

federal candidate-related media might total $1,377,080, and not $1,377,350, after subtracting 

$35,920 for disbursements attributable to state candidates and non-partisan advertisements. In 

the DFAR, Audit staff concludes that the Committee’s documentation supported $801,699 in 

federal candidate-related media disbursements to A/B Partners. The Committee’s documentation 

did not account for the remaining digital media disbursements to A/B Partners totaling $575,651.

Because the Committee has not met its obligation to maintain and submit records by 

which Audit staff can verify the remaining disbursements to A/B Partners totaling $575,651, 

OGC concurs with the inclusion of the recordkeeping finding in the proposed DFAR and its 

conclusion that the Committee did not provide documentation showing that disbursements 

totaling $575,651 were properly reported.16 

14 52 U.S.C. § 30102(d); see also 11 C.F.R. § 102.9(b).

15 11 C.F.R. § 104.14(b)(1). 

16 Audit staff explained that despite their calculations, their conclusions are based on disclosed amounts 

because Audit staff would have no way of knowing whether a committee might have documents that were not 

provided to Audit staff.