November 22, 2019 

Zuzana Pacious, Auditor 

Audit Division 

Federal Election Commission 

1050 First Street, NE 

Washington, D.C. 20463 

RE: Draft Final Audit Report of the Audit Division of the Mississippi Republican Party 

(January 1, 2015 - December 31, 2016) 

Dear Ms. Pacious: 

Thank you for the opportunity to respond further to the proposed findings in the Draft Final 

Audit Report (DFAR) received on Monday, November 4, 2019 in connection with the Federal Election 

Commission's (FEC or Commission) audit of the Committee. The DFAR has made three (3) Findings and 

Recommendations. The Mississippi Republican Party (MRP or Committee) will address each here and 

would like to incorporate by reference its earlier response and put the independent expenditure finding 

before the full Commission. The Committee requests a hearing before the Commission for the specific 

purpose of discussing the facts and conclusions related to Finding 3. 

Finding 1: Misstatement of Financial Activity 

As noted in the DFAR, in response to the IAR, the MRP hired a compliance professional who 

worked with Commission staff to file a Form 99 on June 21, 2019, which corrected the misstatements 

for the 2015 calendar year. The MRP wishes to reiterate that any incorrect reporting of receipts or 

disbursements was an inadvertent administrative oversight, and without any intention to circumvent 

reporting requirements. We are hopeful that the MRP's investment in a compliance officer after the 

2015-16 audit period demonstrates the MRP's good faith in this process and commitment to reporting 

accurate disclosures for all current and future filings. We thank you for the opportunity to correct any 

prior misstatements. 

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Finding 2: Reporting of Debts and Obligations 

As noted in the DFAR, in response to the IAR, the MRP hired a compliance professional who 

worked with Commission Auditor Robert Morcomb, to file a Form 99 on June 21 and 22, 2019, properly 

disclosing the debts and obligations to the ten (10) vendors the Commission listed and correcting the 

public record. 

Finding 3: Reporting of Apparent Independent Expenditures 

With respect to Finding 3., "Reporting of Apparent Independent Expenditures," MRP respectfully 

reiterates and incorporates by reference its June 14, 2019, response to the Interim Audit Report. MRP 

requests that the Commission address the analysis of the Audit Division and the Office of the General 

Counsel that MRP payments for routine political party solicitation expenses constitute independent 

expenditures. MRP respectfully asserts: 

• The entire amount at issue in this finding was paid for party solicitation expenses; the 

communications solicited contributions for MRP and explained to prospective donors the 

potential, permissible uses of donated funds. References to issues and candidates were 

incidental to the call to action of each communication, a request to donate or register to vote. 

• The authority cited by the FEC's Office of the General Counsel is inapt. The Office of General 

Counsel cites audits issued to non-political party respondents, OGC Memorandum, Draft FAR 

(LRA 1077), Oct. 2, 2019, at 2, as providing adequate notice that the Commission may proceed 

with its novel theory with respect to political party solicitations to its prospective donors and/or 

members. To put it lightly, political parties are distinguishable from non-connected political 

committees. Parties' expression is inextricably linked to their candidates in a manner unlike 

other political committees, in that parties play a fundamental role in the nomination and 

support of its candidates. An unbound theory that would transform all party solicitations into 

"independent expenditures," with the attendant reporting and other requirements for such 

expenditures, is not soundly based on any statute, rE:gulation, or Commission-approved 

guidance. To assert that a party solicitation explaining that it will work to elect its candidates up 

and down the ballot is express advocacy because it references an upcoming election or what is 

at stake in the election would be an expansion of section 100.22(b). If the Commission intends 

to require political parties to submit its routine solicitation expenses to burdensome additional 

reporting requirements and other requirements of independent expenditures, it should do so 

through a policy or rulemaking process, consistent with the requirements related to the 

promulgation of agency guidelines found in Commission regulations and the Administrative 

Procedures Act. 

• A Commission finding with respect to a minimum of $22,393 of the total amount at issue would 

be based on a determination that the payments were for communications containing express 

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advocacy as described 11 C.F.R. § 100.22{b). MRP previously noted that the Commission has 

not pursued matters involving section 100.22(b). MUR 6729 (Checks and Balances), Statement 

of Reasons of Chairman Goodman and Commissioners Hunter and Petersen, at 3 n.14 (Oct. 24, 

2014). MRP further request that the Commission address the Office of General Counsel's threepage chart, which belies any notion that section 100.22(b) may be constitutionally enforced by 

the Commission. The analysis (LRA 1077) purports to apply a kaleidoscope of vague factors to 

political speech, hardly fulfilling the agency's "unique prerogative to safeguard the First 

Amendment..." Van Hollen v. FEC, 811 F.3d 486, 500 (D.C. Cir. 2016). 

• Even under the theory that the communications included "independent expenditures" -- a 

conclusion MRP asserts is unfounded - only a very small portion of the amount the Audit 

Division found at issue would fall into this category due to allocation principles when 

communications include independent advocacy and party advocacy. 11 C.F.R. § 106.l(a); See 

MURs 7169, etc. (Hillary for America, et a/.)(upholding a party committee's time and space 

allocation of ads referencing policy issues and also advocating the election or defeat of a 

candidate). Here, the Office of the General Counsel cites one to two lines, at most, of each 

communication as constituting express advocacy. In fact, the communications at issue are 

overwhelmingly dedicated to party advocacy and party solicitation. The Commission should not 

find that the whole cost of a communication was mischaracterized when only one or two 

sentences in a multi-page document, under the Audit Division's theory, constitutes express 

advocacy. The amount at issue, therefore, must be reduced to reflect the minute portion (under 

the Audit Division's theory) reflecting express advocacy. Even under the Audit Division's theory, 

a small fraction of the total amount at issue ($43,967) reflects the accurate potential amount in 

alleged violation. 

• M RP respectfully notes that if the Commission properly finds that these communications were 

routine party solicitations, the Audit Division's findings with respect to reporting or other issues 

become moot. 

As noted in the MRP response to the IAR, if the Commission rejects or modifies the findings in the 

DFAR, the Committee intends to move quickly to amend its reports to materially correct its reporting in 

conformance with the Commission's determination. 

Conclusion 

The MRP takes its reporting obligations very seriously, and we have taken extraordinary 

measures, both in time and money to address these issues over the last few years. As has been noted, 

the MRP leadership changed in the fall of 2017 and the records were not properly preserved. In spite of 

the change in leadership, current MRP staff have searched diligently and feverishly to provide additional 

documentation and invoices as requested by the Commission Auditors regarding the direct mail 

communications reference in the DFAR. The MRP sincerely regrets this circumstance and will continue 

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to search for records to further support the dates of dissemination for the direct mail solicitations and if 

located, will provide that information immediately to the Commission. 

The MRP appreciates the opportunity to respond directly to the DFAR. The Committee looks 

forward to the questions in finding three (3) being addressed. Thank you for your consideration. Please 

do not hesitate to contact us if you have any further questions. 

Sincerely, 

Lucien Smith 

Chairman, Mississippi Republican Party Treasurer, Mississippi Republican Party 

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