In the Matter of 

Government Integrity, LLC 

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REPLY TO GENERAL COUNSEL'S BRIEF 

This responds to a brief received by counsel to Government Integrity, LLC 

("Government Integrity") from the Federal Election Commission's (the "Commission") Office of 

General Counsel (''OGC") in the above captioned matter which recommends that the 

Commission find probable cause to believe that Government Integrity knowingly and willfully 

violated 52 U.S.C. § 30122 by making a contribution in the name of another. 

The record in this matter is bereft of any evidence that Government Integrity violated 52 

U.S.C. § 30122 and 11 C.F.R. § l 10.4(b)(l)(i), let alone that any alleged violation was knowing 

and willful, and we respectfully submit that OGC's conclusions to the contrary must fail. 

Indeed, the record shows only that Government Integrity made a lawful donation to an IRS 

50l(c)(4) social welfare organization that could lawfully receive such donation, and the further 

use of that donation by the 50l(c)(4) organization was not a result of any agreement with 

Government Integrity. There is no evidence that shows knowledge on the part of Government 

Integrity that any of the funds it donated to the (c)(4) entity were to be passed on to any political 

committee subject to regulation under the Federal Election Campaign Act (the "Act"). 

Even if there were such evidence, there is nothing about this matter that renders the state 

of understanding of the law different from similar cases of the same vintage as to which the 

Commission has in its discretion declined to act. The result is this matter should thus be no 

different. 
MUR 6920 (Government Integrity, LLC) 

Response to General Counsel's Brief 

Page 2 of 10 

I. FACTS 

A. GQvernment Integrity LLC 

Government Integrity is a Delaware limited liability corporation that was established in 

September 2012 by the Incentive Discretionary Trust ("IDT''). Christopher Byrd, who died in 

2014, served as the sole manager and officer of Government Integrity. Government Integrity had 

apparently been a dormant organization since Byrd's passing until it was revived in connection 

with the attempted resolution of this matter. 

James W. Thomas III served, to a limited extent, as an attorney for Government Integrity. 

Thomas never served as an officer or director of Government Integrity, and never possessed or 

exercised any independent decision-making authority over any aspect of Government Integrity's 

operations or finances. 1 Thomas assisted Government Integrity to prepare organizational 

paperwork, transfer funds at the direction Byrd, GI LLC's now deceased principal, and serve as 

its attorney. All tasks and functions Thomas perfonned on Government Integrity's behalf were 

conducted anhe request and under the direction of Byrd.2 Thomas has had no personal 

involvement in, or knowledge of, Government Integrity's business or activities beyond the 

execution of certain financial transactions on Government Integrity's behalf. 3 Thomas also 

served as the treasurer of an independent expenditure-only committee, Now or Never PAC, 

although there is no evidence in the record that Government Integrity was aware of that. 

1 Responses of James W. Thomas to Investigative Subpoenas (the "Thomas Response"), response to 

Request No. I (July 28, 2017), at p. l. 

2 Id 

3 Id at Response to Request No. I(c), at p. 3. 
MUR 6920 (Government Integrity, LLC) 

Response to General Counsel's Brief 

Page 3 of 10 

B. Contribution from America.n Conservative Union to Now or Never PAC 

The transaction at issue in this matter is a $1.71 million contribution from American 

Conservative Union ("ACU"), a 50l(c)(4) social welfare organization, to Now or Never PAC on 

October 31, 2012. ACU had received a $1.8 million donation from Government Integrity on 

October 31, 2012, prior to ACU's contribution to Now or Never PAC. 

The record provides that Government Integrity's donation to ACU was solicited by 

Axiom Strategies ("Axiom") and its principal, Jeff Roe.4 In making this solicitation, Roe did not 

speak with anyone from Government Integrity regarding the reason for the donation or its 

intended use by ACU.5 Following the Axiom solicitation, Byrd ·instructed Thomas to issue a 

wire for the donation to ACU.6 Thomas has stated that Byrd did not provide any other 

information to Thomas concerning the donation to ACU, including the reasons Byrd authorized 

it or the circumstances attendant to that decision.7 When initiating the wire transfer from 

Government Integrity to ACU, Thomas has stated that he "had no information concerning the 

anticipated use of the funds" by ACU.8 

The record further provides that Axiom solicited ACU for the contribution to Now or 

Never PAC.9 Roe has stated that, prior to Government Integrity's donation to ACU, he "did not . 

. . communicate Axiom's own belief regarding the possibility of ACU donating to Now or Never 

PAC" to either Thomas or Byrd.

10 Similarly, Thomas has stated that he was unaware of "any 

4 See Jeff Roe's responses to the subpoena issued in MUR 6920 (the "Roe Response"), Response to 

Request No. 3(b) (Sept. 1, 2017), at p. 7. 

5 Jd 

6 Thomas Response, Response to Request No. 2(a), at p. 3. 

7 Jd 

8 Id at Response to Request No. 2(e), at p. 5. 

9 Roe Response, Response to Request No. 2, at p. 4. 

•

0 Id at Response to Request No. 3(f), at p. 8. 
MUR 6920 (Government Integrity, LLC) 

Response to General Counsel's Brief 

Page 4 of 10 

prior arrangement or agreement between [Government Integrity] and ACU that the funds would 

be used to finance a contribution by ACU to Now or Never PAC."11 Thomas has further stated 

that he had "assumed that ACU's disposition of the funds was the product of its own independent 

decisionmaking, exercised through duly authorized personnel of ACU," having not possessed 

"any contrary facts." 12 

II. LEGAL ANALYSIS 

Contrary to OGC's allegations, the record lacks any evidence that Government Integrity 

made a contribution in the name of another to Now or Never PAC, let alone committed a 

"knowing and willful" violation of the law. Instead, the record clearly demonstrates only that 

Government Integrity donated to a 501(c)(4) social welfare organization, without any knowledge 

as to how such funds may be spent in the future. 

A. Government Integrity Did Not Make a Contribution in the Name of Another 

The record lacks any evidence that Government Integrity made a contribution in the 

name of another in violation of 52 U.S.C. § 30122 and 11 C.F.R. § 110.4(b)(l)(i). 

The Act provides that "[ n ]o person shall make a contribution in the name of another 

person or knowingly permit his name to be used to effect such a contribution." 52 U.S.C. 

§ 30122 (formerly 2 U.S.C. § 44If). OGC asserts that the Act and the Commission's regulations 

provide that a person who provides funds to another for the purpose of contributing to a 

committee "makes'' the resulting contribution. Even if that is the case with respect to a 

contribution made by a 501(c)(4) social welfare organization to an independent expenditure-only 

committee, a finding that the Commission has never made, the record lacks any evidence that 

11 Thomas Response, Response to Request No. 2( e ), at p. 5. 

12 [d 
MUR 6920 (Government Integrity, LLC) 

Response to General Counsel's Brief 

Page 5 oflO 

Government Integrity provided funds to ACU for the purpose of making a contribution to Now 

or Never PAC. 

Government Integrity donated $1.8 million to ACU, a 501(c)(4) social welfare 

organization. Byrd did not tell Thomas that the Government Integrity donation would be used by 

ACU to contribute to Now or Never PAC, and Thomas has stated that he had no information 

concerning the anticipated use of the funds by ACU when he initiated the wire from Government 

Integrity. 13 Roe has stated that he did not speak with anyone from Government Integrity 

regarding the reason for the donation or its intended use by ACU. 14 Indeed, Roe did not speak 

with Byrd at all regarding Government Integrity's donation to ACU, and he has stated that he did 

not communicate Axiom's belief regarding the possibility of ACU donating to Now or Never 

PAC to Thomas. 15 Moreover, to the extent that Thomas was aware that ACU might contribute to 

Now or Never PAC, such knowledge cannot be attributed to Government Integrity, as it was 

outside the limited scope of his apparent engagement as an attorney by Government Integrity. 

See, e.g., United States v. One Parcel of Land, 965 F .2d 311, 316 (7th Cir. 1992) ("[W]here an 

agent obtains knowledge while acting outside the scope of his agency, the standard presumption 

[that the agent reports his knowledge to his principal] is unfounded, and the court will not impute 

the agent's knowledge to the corporation."). 

Notwithstanding its inferences to the contrary, OGC has failed to contest this clear, direct 

evidence, and OGC has failed to demonstrate any agreement between Government Integrity and 

ACU on these facts. Without such an agreement, ACU's contribution cannot have been in the 

13 Thomas Response, Response to Request No. 2(e), at p. 5. 

14 Roe Response, at Response to Request No. 3(f), at p. 8. 

is Id 
MUR 6920 (Government Integrity, LLC) 

Response to General Counsel's Brief 

Page 6 of IO 

name of Government Integrity, and OGC cannot show that Government Integrity made a 

contribution in the name of another in violation of 52 U.S.C. § 30122 and 11 C.F.R. § 

110.4(b)(l)(i). 

B. OGC Is Not Entitled to Apply an Adverse Inference from IDT's Failure to 

Comply with the Commission's Subpoena 

Moreover, contrary to OGC's urging, OGC cannot apply an adverse inference from the 

fact that IDT did not comply with the Commission's subpoena, based on the reasons for which 

IDT was unable to comply. 

OGC appears to seek to use that inference to support its contention that there is no 

alternative explanation for the structure except that it was a scheme to conceal the source of the 

funds. (OGC Br. 11-12) In making this assertion, OGC cites to International Union v. NLRB for 

the broad proposition that an administrative agency may draw an adverse inference from a 

party's failure to comply with a subpoena, or indeed any failure to put forward evidence, even in 

the absence of an effort to enforce the subpoena. 16 In so doing, however, OGC failed to 

recognize a critical limitation to the International Union rule, as the court specifically states that 

the rule does not apply when the objection to the subpoena is constitutional in nature. See 459 

F.2d at 1339 ("Of course, the adverse inference rule is inapplicable in situations where a party 

has a constitutional right to suppress the evidence in question. If a party contends, of example, 

that the evidence would incriminate him or that its production would chill First Amendment 

freedoms, the Government may not burden the exercise of constitutional rights by attaching an 

adverse inference to produce the evidence."). Courts have specifically recognized that 

enforcement of Commission subpoenas implicates fundamental First Amendment rights. See, 

16 OGC Br. 11 n.45, (citing 459 F.2d 1329 (D.C. Cir. 1972)). 
MUR 6920 (Government Integrity, LLC) 

Response to General Counsel's Brief 

Page 7 of 10 

e.g., FEC v. Machinists Non-Partisan Political League, 655 F.2d 380,389 (D.C. Cir. 1981). In 

addition, it is well-recognized that an adverse inference cannot be drawn from the invocation of 

the attorney-client privilege. See United States ex. rel. Barko v. Halliburton Co., 241 F. Supp. 3d 

37, 54-55 (D.D.C. 2017) (collecting cases). 

Against this standard, we are unaware of any prior Commission case in which an adverse 

inference was drawn under similar circumstances. As this issue pertains to the enforcement of a 

subpoena by the Commission, IDT's First Amendment rights were clearly implicated. 

Moreover, IDT repeatedly advised OGC that the subpoena "calls for information protected by 

the attorney-client privilege and attorney work product doctrine" based on the fact that IDT's 

trustee is an attomey. 17 OGC has not contested these issues. Accordingly, these fundamental 

and well-settled principles preclude an adverse inference in this case. 

C. Even if Government Integrity Could be Alleged to Have Made a 

Contribution in the Name of Another, Recent Commission Decisions 

Mandate No Action, as Opposed to a Knowing and Willful Finding 

Even if Government Integrity could be alleged to have made a contribution in the name 

of another, which as described above OGC has failed to do, OGC cannot demonstrate that 

Government Integrity's conduct was "knowing and willful." Indeed, such a finding is foreclosed 

under the Commission's recent decisions in the W Spann LLC, F8, LLC, Specialty Investments 

Group, Inc., and SPM Holdings MURs (collectively the "LLC MURs"), in which the 

Commission concluded that it should not find probable cause to believe that Respondents there 

committed a violation during the same time period of the conduct at issue here in light of the lack 

17 See, e.g., Letter from M. Dry to M. Shonkwiler and A. Fuoto, Subpoena MUR 6920 (August 31, 2017); 

Letter from M. Dry to M. Shonkwiler and A. Fuoto, Subpoena MUR 6920 (September 19, 2017). 
MUR 6920 (Government Integrity, LLC) 

Response to General Counsel's Brief 

Page 8 of 10 

of clarity in the law with respect to contributions in the name of another to independent 

expenditure-only committees. 

Under the relevant provisions of the Act, the Commission can find a violation "knowing 

and willful" only where the violator acted deliberately, "with full knowledge of all of the 

relevant facts and a recognition that the action[s] [were] prohibited by law." 122 Cong. Rec. 

12,197, 12,199 (May 3, 1976)). Without "evidence of ... 'defiance' or 'knowing, conscious, 

and deliberate flaunting' [sic] of the Act," courts have refused to find violations knowing and 

willful. AFL-CIO v. FEC, 628 F.2d 97, 101 (D.C. Cir. 1980) (vacating a district court's 

"knowing and willful" finding where there was no evidence, but instead "every indication ... 

that the [respondent] considered itself to be in compliance with the Act") (quoting Frank Irey, 

Jr., Inc. v. Occupational Safety & Health Review Comm'n, 519 F.2d 1200, 1207 (3d Cir. 1974)). 

Here, it cannot be reasonably claimed that Government Integrity "knowingly and 

willfully" violated section 30122 when the law itself was unclear at the time. As stated in the 

Controlling Statement of Reasons for the LLC MURs, corporate entities could not make 

contributions under the Act when Congress enacted the prohibition against contributions in the 

name of another, and Congress thus likely did not contemplate that corporations could violate the 

prohibition against giving in the name of another by acting as the source of funds for 

contributions. See MURs 6485, 6487, 6488, 6711, and 6930, Statement of Reasons of 

Commissioners Petersen, Hunter, and Goodman (April 1, 2016), at p. 9. Indeed, until the LLC 

MURs, the Commission had "considered alleged violations of Section 30122 almost exclusively 

in contexts where individuals were the purported straw donors," and "prior to Citizens United, 

nearly every alleged straw-donor scheme addressed by the Commission involved excessive 

and/or prohibited contributions." Id. (emphasis in original). No excess or prohibited 
MUR 6920 (Government Integrity, LLC) 

Response to General Counsel's Brief 

Page 9 of 10 

contribution is claimed here. Similarly, like the LLC MURs, the Act's amount limitations and 

corporate source prohibitions are not implicated here because the contribution at issue was to 

Now or Never PAC, an independent expenditure-only PAC, which may only engage in 

independent speech and does not make contributions to candidates. 

The alleged section 30122 violation claimed here - a contribution from a 50l(c)(4) entity 

and involving a donation from an LLC - thus differs substantially from those previously 

considered by the Commission prior to the LLC MURs. OGC cannot point to any facts 

indicating that Government Integrity deliberately, with full knowledge of all relevant facts and a 

recognition that both its actions were prohibited by law and its conduct could be considered 

illegal, because the law did not contemplate at the time that its contribution could have violated 

section 30122. 

The OGC's attempt to bootstrap such an argument by pointing to what it mischaracterizes 

as attempts to conceal the identity of one or more donors is also unavailing. As is amply 

demonstrated above and by the Controlling Statement of Reasons in the LLC MURs, it was far 

from settled law that the identification of LLCs as donors was unlawful. Thus, even if there 

were evidence to show that the flow of funds at issue in this case was intended to screen from 

view any putative source of funds, that goal was widely understood to be permissible prior to the 

decision in the LLC MURs, and its pursuit cannot support a "knowing and willful" finding. 18 

For the sake of fairness and integrity in the exercise of its discretion, the Commission 

should treat like circumstances alike particularly where the alleged violations here occurred in 

18 Indeed, it is far from clear that these facts, even considered hypothetically, can constitute a violation even 

now. Congress has not acted to make these contributions illegal and the Commission lacks legal authority to create 

new crimes or violations where Congress has failed to act. The Commission may wish to know the "ultimate 

source" of corporate funds allegedly received indirectly by a political committee, but it cannot make identifying the 

same a requirement of law without the legal authority to do so. 
MUR 6920 (Government Integrity, LLC) 

Response to General Counsel's Brief 

Page 10 of 10 

October 2012, during the same time period as the conduct at issue in the LLC MURs. If the 

Commission believes that Government Integrity could be alleged to have made a contribution in 

the name of another, we respectfully request that the Commission exercise its prosecutorial 

discretion here, as the Commission did with respect to the LLC MURs, without finding probable 

cause that Government Integrity committed a violation. 

III. CONCLUSION 

Based on the foregoing, Government Integrity respectfully requests that Commission not 

find probable cause to believe that Government Integrity violated 52 U.S.C. § 30122 and 11 

C.F.R. § l 10.4(b)(l)(i). 

10/6/17 

Date Elliot S. Berke 

Counsel for Government Integrity 

Berke Farah LLP 

1200 New Hampshire Ave. NW 

Suite 800 

Washington, DC 20036 

202.517 .0585 (Tel.) 

eberke@berkefarah.com 

http://www.berkefarah.com