SECRETARif' 

Ml 11= 31 

FEDERAL ELECTION COMMISSION 

WASHINGTON, D.C. 20463 

JAN 27 206 

MEMORANDUM 

TO: 71.cCoTMn.i»sio„ Sl^l^SFFfVE 

FROM: Lisa J. Stevenson 

Deputy General Counsel - Law 

Lorenzo Holloway ^ 

Assistant Generid Counsel 

Compliance Advice 

Danita C. Alberico ^ ^ iiTC. Pt 

Attorney 

SUBJECT: Request for Consideration of a Legal Question 

Colorado Republican Committee (LRA 961) 

I. INTRODUCTION 

On December 24,201.4, the Commission received a Request for Consideration of a Legal 

Question ("Request") from counsel on behalf of the Colorado Republican Committee 

("Committee"), the state committee of the national Republican Party in Colorado, whom the 

Commission had voted to audit pursuant to S2 U.S.C. § 30111(b). See Attachment I (Request). 

The Request addresses a proposed audit finding pertaining to the requirements in 52 

U.S.C. § 30I04(b)(^) and 11 C.F.R. § 104.3(d) that treasurers of political committees, disclose 

the amount and nature of outstanding debts and obligatioiis owed by or to the repprting 

committee. 

During fieldwork, the Audit staff identified a trust account from which the Committee 

paid a debt of S13,541.49 to its legal counsel on November 14,2012. Prior to payment, the 

Committee had not disclosed the debt on its reports to the Commission. The auditors were 

unable to determine the source of the funds used to pay the debt or the date on which the 

Committee transferred the apparent retainer funds into the trust account to support the payment. 

The auditors requested that the Committee provide information regarding the source of the Rinds 

and the date the funds were transferred to the trust account to pay the previously undisclosed 

debt. In response, the Committee provided invoices related to all of the payments that it made to 

its legal counsel during the audit period. The auditors determined that the information provided 

did not address when the funds supporting the $13,541.49 payment were transferred to the trust 

accoum and the source of those funds. In the absence of additional information, the auditors 
Memorandum to Commission 

Colorado Republican Committee (LRA 961) 

Page 2 of 4 • 

concluded that the $ 13,541.49 should be treated as an undisclosed debt because there was no 

indication that the obligation existed until the Committee paid the debt. Consequently, the Audit 

staff informed the Committee during the exit conference that absent additional 

documentation/information showing that the debt was not required to be reported, the Interim 

Audit Report would include a finding that the Committee failed to properly disclose debt totaling 

S13.541.49 on Schedule D (Debts and Obligations).' 

The Committee, however, questions whether it is required to disclose debts and 

obligations that it owes to its legal counsel. Attachment I. The Committee contends that such 

disclosures impinge upon attorney-client privilege, attorney work-product doctrine, and client 

confidentiality rights. Id. In particular, the Comminee contends that the Commission does not 

have authority under either the Federal Election Campaign Act of 1971, as amended (the "Act"), 

or 11 C.F.R. § 104.3(d) to compel the Committee or its officers or authorized agents to waive its 

rights or privileges and disclose any debts and obligations that it may owe to legal counsel. Id. 

The Committee contends that it is required to disclose legal services only after it makes 

expenditures for the services. Id. 

We have considered the arguments that the Committee raises in its Request, and we 

recommend that the Commission conclude that the Committee is required to disclose all debts 

and obligations owed to its legal counsel. 

II. THE COMMITTEE MOST DISCLOSE ALL DEBTS AND OBLIGATIONS 

OWED TO LEGAL COUNSEL 

The Act and Commission regulations require the treasurer of a political committee to 

disclose the amount and nature of outstanding debts and obligations owed by or to such 

committee. 52 U.S.C. § 30104(b)(8) and 11 C.F.R. § 104.3(d). State law, however, governs the 

attomey-client privilege, work-product doctrine, and client confidentiality rights. These 

doctrines are separate and distinct and, in Colorado, they are established in part by Rule 1.6 of 

the Colorado Rules of Professional Conduct and Rule 26(b)(3) of the Colorado Rules of Civil 

Procedure, and are codified at Colo. Rev. Stat. Ann.§ I3-90-107(l)(b). 

The attomey-client privilege is intended to promote early access to legal advice, and 

facilitate open communications between the parties in privilege. Gordon v. Boyles, 9 P.3d 1106, 

1123 (Colo. 2000). The attomey-client privilege covers "matters communicated by or to the 

client in the course of gaining counsel, advice, or direction with respect to the client's rights or 

obligations." id. "[T]he privilege applies only to statements made in circumstances giving rise 

to a reasonable expectation that the statements will be treated as confidential." Lanari v. People, 

827 P.2d 495,499 (Colo. 1992) (citations omitted). 

Generally, the attomey-client privilege protects communications between the 

attorney and the client, and the promotion of such confidences is said to exist for 

' The Audit Division advised this Office that it is possible that the S13.54 i .49 payment could be 

recharacterized as an in-kind contribution at a later stage of the audit depending upon additional information the 

auditors may receive regarding the source of the funds and/or the nature of the trust account. 
Memorandum to Commission 

Colorado Republican Committee (LRA 961) 

Page 3 of4 

the benefit of the client. On the other hand, the work-product exemption 

generally applies to "documents and tangible things • • • prepared in anticipation 

of litigation or for trial," [Colorado Rules of Civil Procedure] 26(b)(3), and its 

goal is to insure the privacy of the attorney from opposing parties and counsel. 

Coi'dwell V. Dist. Court in & for City & County of Denver, 644 P.2d 26,34 (Colo. 1982). 

Client confidentiality is a doctrine that prohibits an attorney from revealing information 

relating to the representation of a client unless the client gives infonned consent, the disclosure is 

impliedly authorized in order to carry out the representation, or the disclosure is otherwise 

permitted by Rule 1.6(b).^ Colorado Rules of Professional Conduct Rule 1.6(a). 

In addressing the attorney-client privilege and the work-product doctrine. Comment 3 to 

Rule 1.6(a) makes clear that "the attomey-client privilege and work-product doctrine apply in 

judicial and other proceedings in which a lawyer may he called as a witness or otherwise 

reqrdred to produce evidence concerning a client." C.R.P.C. Rule 1.6(a), Comment 3 (emphasis 

added). The Colorado Rules of Civil Procedure also make clear that the privileges associated 

witli the work-product doctrine are only applicable in the context of judicial proceedings. Colo. 

R. Civ. P. 26(b)(3) (2008). Regarding confidentiality, Comment 2 to Rule 1.6(a) explains that "a 

fundamental principle in the client-lawyer relationship is that, in the absence of the client's 

infonned consent, the lawyer must not reveal information relating to the relationship " 

C.R.P.C. Rule 1.6(a), Comment 2 (emphasis added). 

The Committee's counsel has not been called to testily or produce any documents br 

information regarding any aspect of the Commission's audit of the Committee. Nor has the 

Committee's counsel been asked to reveal any information regarding the attorney's relationship 

with the Committee or the legal services provided. Rather, the Audit Division has only 

requested that the Committee disclose a debt that it owed to its legal counsel.^ The mere fact that 

the Committee retained counsel, and the amount owed to legal counsel, is not subject to any of 

the |}rivileges invoked by the Committee, nor has the Committee cited any legal support for such 

a contention. See Wesp v. Everson, 33 P.3d 191,199 n.l5 (Colo. 2001) (citations omitted) 

(["A]n attorney generally may not refuse to answer questions about the identity of a client and 

fee arrangements."). Thus, we conclude that the Committee fsuled to show how the attorneyclient privilege, work-product doctrine, and/or its rights to client-attorney confidentiality relieve 

the Committee of its obligation to disclose debt to its legal counsel totaling $ 13,541.49. 52 

U.S.C. § 30104(b)(8); 11 C.F.R. § 104.3(d). 

^ Rule 1.6(b). which focuses on protecting third parties, is not implicated by the issues raised here. 

^ The Comminee does not explain why disclosure prior to paying for legal services debts would violate its 

rights and privileges but disclosure after payment would not. 

' The Act and Commission regulations may preempt any provision of state law with respect to the reporting 

of debts and obligations even if Colorado's attoihey-client privilege, work-product doctrine, or client confidentiality 

rules were relevant to this audit or the Committee's reporting obligations. S2 U.S.C. § 30143(a). 
Memorandiitn to Commission 

Colorado Republican Committee (LRA 961) 

Page 4 of 4 

III. RECOMMENDATION 

For the above reasons, we recommend that the Commission conclude diat the Cpmmittee. 

must disclose the amount and nature of outstanding, debts and obligations owedi>y: bE to the; 

Committee from its legal counsel ynder 52 U.S.C. § 30104(b)(8) and ] 1 C.F.R.. §. r04.3(d). 

Attachment 1: Request for Legal Consideration from the Colorado Republican Committee^ 

dated Deceniber 24,2014.