Final Audit Report of the 

Commission on the 

Democratic Party of Arkansas 

(January 1, 2017 - December 31, 2018) 

Why the Audit 

Was Done 

Federal law permits the 

Commission to conduct 

audits and field 

investigations of any 

political committee that is 

required to file reports 

under the Federal 

Election Campaign Act 

(the Act). The 

Commission generally 

conducts such audits 

when a committee 

appears not to have met 

the threshold 

requirements for 

substantial compliance 

with the Act.1 The audit 

determines whether the 

committee complied with 

the limitations, 

prohibitions and 

disclosure requirements 

of the Act. 

Future Action 

The Commission may 

initiate an enforcement 

action, at a later time, 

with respect to any of the 

matters discussed in this 

report. 

About the Committee (p. 2) 

The Democratic Party of Arkansas is a state party committee 

headquartered in Little Rock, Arkansas. For more information, see 

the chart on the Committee Organization, p. 2. 

Financial Activity (p. 2) 

• Receipts 

o Contributions from Individuals 

o Contributions from Political Party and 

Other Committees 

o Transfers from Affiliated/Other Party 

Committees 

o Loans Received 

o Other Receipts 

o Transfers from Non-Federal Account 

Total Receipts 

• Disbursements 

o Operating Expenditures 

o Allocated Federal/Non-Federal 

Expenditures 

o Transfers to Affiliated/Other Party 

Committees 

o Coordinated Party Expenditures 

o Loan Repayments 

o Other Disbursements 

o Federal Election Activity 

Total Disbursements 

$ 460,817 

16,430 

863,936 

32,500 

40,596 

567,237 

$ 1,981,516 

$ 299,148 

1,198,302 

33,710 

6,797 

82,202 

29,875 

326,518 

$ 1,976,552 

Commission Findings (p. 5) 

• Reporting of Debts and Obligations (Finding 1) 

• Recordkeeping for Employees (Finding 2) 

• Disclosure of Loans and Loan Repayments 

(Finding 3) 

Additional Issue (p. 6) 

• Reporting of Media Related Expenditures 

1

 52 U.S.C. §30111(b). 
Final Audit Report of the 

Commission on the 

Democratic Party of Arkansas 

(January 1, 2017 - December 31, 2018) 
 

 

Table of Contents 

Page 

Part I. Background 

 Authority for Audit 1 

Scope of Audit 1 

 Commission Guidance 1 

 Audit Hearing 2 

Part II. Overview of Committee 

 Committee Organization 3 

Overview of Financial Activity 4 

Part III. Summaries 

Commission Findings 5 

Additional Issue 6 

Part IV. Commission Findings 

Finding 1. Reporting of Debts and Obligations 8 

Finding 2. Recordkeeping for Employees 10 

Finding 3. Disclosure of Loans and Loan Repayments 13 

Part V. Additional Issue 

Reporting of Media Related Expenditures 16 
 1 

Part I 

Background 

Authority for Audit

This report is based on an audit of the Democratic Party of Arkansas (DPA), undertaken 

by the Audit Division of the Federal Election Commission (the Commission) in 

accordance with the Federal Election Campaign Act of 1971, as amended (the Act). The 

Audit Division conducted the audit pursuant to 52 U.S.C. §30111(b), which permits the 

Commission to conduct audits and field investigations of any political committee that is 

required to file a report under 52 U.S.C. §30104. Prior to conducting any audit under this 

subsection, the Commission must perform an internal review of reports filed by selected 

committees to determine if the reports filed by a particular committee meet the threshold 

requirements for substantial compliance with the Act. 52 U.S.C. §30111(b). 

Scope of Audit 

Following Commission-approved procedures, the Audit staff evaluated various risk 

factors and as a result, this audit examined: 

1. the receipt of excessive contributions and loans; 

2. the receipt of contributions from prohibited sources; 

3. the disclosure of contributions received; 

4. the disclosure of disbursements, debts and obligations; 

5. the disclosure of expenses allocated between federal and non-federal accounts; 

6. the consistency between reported figures and bank records; 

7. the completeness of records; and 

8. other committee operations necessary to the review. 

Commission Guidance 

Request for Early Commission Consideration of a Legal Question 

Pursuant to the Commission’s “Policy Statement Establishing a Program for Requesting 

Consideration of Legal Questions by the Commission,” several state party committees 

unaffiliated with DPA requested early consideration of a legal question raised during 

audits covering the 2010 election cycle. Specifically, the Commission addressed whether 

monthly time logs under 11 CFR §106.7(d)(1) were required for employees paid with 100 

percent federal funds. 

The Commission concluded, by a vote of 5-1, that 11 CFR §106.7(d)(1) does require 

committees to keep a monthly log for employees paid exclusively with federal funds. 

Exercising its prosecutorial discretion, however, the Commission decided it will not 

pursue recordkeeping violations for the failure to keep time logs or to provide affidavits 

to account for employee salaries paid with 100 percent federal funds and reported as 

such. The Audit staff informed DPA representatives of the payroll requirement and the 

Commission’s decision not to pursue recordkeeping violations for failure to keep payroll 

logs for salaries paid and correctly reported as 100 percent federal. This audit report does 

not include any findings or recommendations with respect to DPA employees paid with 

100 percent federal funds and reported as such. 
 2 

Audit Hearing 

DPA declined the opportunity for a hearing before the Commission on the matters 

presented in this report. 
 3 

Part II 

Overview of Committee 

Committee Organization 

Important Dates 

• Date of Registration March 8, 1976 

• Audit Coverage January 1, 2017 – December 31, 2018 

Headquarters Little Rock, Arkansas 

Bank Information 

• Bank Depositories Two 

• Bank Accounts Three Federal, Two Non-Federal 

Treasurer 

• Treasurer When Audit Was Conducted Philip A. Hood (6/11/2021 – Present) 

John Unger (1/10/2019 – 6/10/2021) 

• Treasurer During Period Covered by Audit Dawne Vandiver (10/27/2017 – 1/9/2019) 

Tyler Clark (3/17/2014 – 10/26/2017) 

Management Information 

• Attended FEC Campaign Finance Seminar Yes 

• Who Handled Accounting and 

Recordkeeping Tasks 

Paid Staff 
 

 

4 

Overview of Financial Activity

(Audited Amounts) 

Cash on hand @ January 1, 2017 $ (2,431) 

Receipts 

o Contributions from Individuals 460,817 

o Contributions from Political Party and Other 

Committees 16,430 

o Transfers from Affiliated/Other Party 

Committees 863,936 

o Loans Received 32,500 

o Other Receipts 40,596 

o Transfers from Non-Federal Account 567,237 

Total Receipts $1,981,516 

Disbursements 

o Operating Expenditures 299,148 

o Allocated Federal/Non-Federal Expenditures 1,198,302 

o Transfers to Affiliated/Other Party 

Committees 33,710 

o Coordinated Party Expenditures 6,797 

o Loan Repayments 82,202 

o Other Disbursements 29,875 

o Federal Election Activity 326,518 

Total Disbursements $1,976,552 

Cash on hand @ December 31, 2018 $ 1,7152 

2

 DPA disclosed its ending cash on hand on December 31, 2018 as $1,715, however, based on its disclosed 

beginning cash on hand on January 1, 2017 of negative $2,431, plus receipts of $1,981,516, less disbursements of 

$1,976,552, the audit-calculated ending cash on hand on December 31, 2018 should be $2,533. 
 5 

Part III 

Summaries 

Commission Findings 

Finding 1. Reporting of Debts and Obligations

During audit fieldwork, the Audit staff noted that DPA failed to disclose debts and 

obligations owed to 27 vendors totaling $351,097. In response to the Interim Audit 

Report recommendation, DPA corrected the public record by filing a Form 99 

(Miscellaneous Electronic Submission) which correctly disclosed its debts and 

obligations. DPA did not comment on this finding in its formal response to the Draft 

Final Audit Report. 

The Commission approved a finding that DPA failed to disclose debts and obligations to 

vendors totaling $351,097. (For more detail, see p. 8.) 

Finding 2. Recordkeeping for Employees 

During audit fieldwork, the Audit staff determined that DPA did not maintain any 

monthly logs, as required, to document the percentage of time each employee spent in 

connection with a federal election. For 2017 and 2018, the Audit staff identified 

payments to DPA employees totaling $408,872 for which DPA did not maintain monthly 

logs. This consisted of payroll which was allocated with federal and non-federal funds 

and payroll paid exclusively with non-federal funds. In response to the Interim Audit 

Report recommendation, DPA stated it “has instituted procedures to ensure that time 

records are maintained for all employees who are paid in part with non-federal funds” 

and “employees who are paid exclusively with non-federal funds are outside the scope of 

the Commission’s jurisdiction and should not have been included in the finding.” In 

response to the DFAR, DPA reiterated its position and added that it “plans to create a 

procedure for recordkeeping for employees paid exclusively with non-federal funds, 

pending the outcome of the Final Audit Report.” DPA also reiterated that, in its view, 

payroll records for the employees paid exclusively with non-federal funds should not be 

included in the finding. 

The Commission approved a finding that DPA did not maintain monthly payroll logs or 

equivalent records, totaling $408,872, to document the percentage of time each employee 

spent in connection with a federal election for calendar years 2017 and 2018. (For more 

detail, see p. 10.) 

Finding 3. Disclosure of Loans and Loan Repayments 

During audit fieldwork, the Audit staff determined that DPA failed to properly disclose 

transactions totaling $32,500 on a line of credit, the correct terms and balances for 

outstanding loans totaling $87,140, and loan repayments of $3,563. DPA did not 

properly disclose the new loans and the terms and balances for outstanding loans on 

Schedules C (Loans) and/or C-1 (Loans and Line of Credit from Lending Institutions). In 
 6 

addition, some loan repayments were reported to the incorrect payee on Schedule B, Line 

26 (Loan Repayments) and others were reported with disclosure errors on Schedule C. 

In response to the Interim Audit Report recommendation, DPA corrected the public 

record by filing a Form 99 (Miscellaneous Electronic Submission) which correctly 

disclosed the line of credit, the new and outstanding loans, and the loan repayments. 

DPA did not comment on this finding in its formal response to the Draft Final Audit 

Report. 

The Commission approved a finding that DPA failed to correctly disclose transactions 

totaling $32,500 on a line of credit, the correct terms and balances for outstanding loans 

totaling $87,140, and loan repayments of $3,563. (For more detail, see p. 13.) 

Additional Issue 

Reporting of Media Related Expenditures 

During audit fieldwork, the Audit staff reviewed expenditures totaling $22,803, that DPA 

disclosed on Schedule B (Itemized Disbursements), Line 30(b) (Federal Election Activity 

Paid Entirely with Federal Funds). These expenditures appeared to be independent 

expenditures containing express advocacy which should have been disclosed on Schedule 

E, Line 24 (Independent Expenditures). DPA may also have been required to file a 24-

hour report for $18,424, the amount DPA paid for direct mailers supporting a candidate 

for federal office. 

In response to the Interim Audit Report recommendation, DPA disagreed with the 

characterization of these expenditures as independent expenditures and stated the 

expenditures were “properly made as exempt activities and were fully coordinated with 

the candidate.” DPA further indicated that the expenditures qualify for the volunteer 

materials exemption because the pledge cards and walking cards totaling $4,379 (referred 

to as printed materials in DPA’s response to the Interim Audit Report), and the direct 

mailers, totaling $18,424, were “distributed through the substantial use of volunteers.” A 

declaration from DPA’s former Director of Operations was also provided, attesting to the 

use of volunteers. 

After consultation with our Office of General Counsel (OGC), the Audit staff concluded 

that the pledge cards, walking cards and direct mailers are not independent expenditures, 

given DPA’s assertion that the activities were fully coordinated with the candidate. As 

such, the filing of a 24-hour report was not required for the direct mailers. In addition, 

the Audit staff concluded that whereas the pledge cards and walking cards are not 

coordinated expenditures because they are not public communications, the direct mailers 

are a coordinated expenditure. 

In response to the Draft Final Audit Report, DPA reiterated its position that the 

expenditures totaling $22,803, “were properly made as exempt activities and were fully 

coordinated with the candidate.” DPA stated that the declaration from its former Director 

of Operations, provided in response to the Interim Audit Report, supported its contention. 
 7 

Subsequent to the Draft Final Audit Report, OGC revised its conclusion regarding 

whether the pledge cards and walking cards are public communications, stating that door 

hangers that qualify as exempt under the volunteer materials exemption should be 

excluded from being classified as party coordinated expenditures, but door hangers that 

do not qualify for the volunteer materials exemption likely are public communications 

and, therefore, also party coordinated expenditures. In its response to OGC’s revised 

conclusion, DPA maintained that the door hangers at issue qualify for the volunteer 

materials exemption, noting that “documentation beyond a sworn affidavit has never been 

required” to qualify for the exemption. DPA further stated that the door hangers should 

not be included because they are not “public communications” and therefore cannot 

qualify as coordinated party expenditures. 

As a result of OGC’s revised conclusion regarding the door hangers, the Audit staff 

added the $4,379 cost of the door hangers to the $18,424 cost of the direct mailers, for a 

revised coordinated party expenditure total of $22,803. DPA provided a sworn 

declaration to document the volunteer materials exemption for the door hangers and 

direct mailers, and the Audit staff recommended the Commission determine whether the 

declaration sufficiently documented volunteer involvement and satisfied the exemption, 

given the lack of clarity regarding how the exemption should be applied. 

The Commission did not approve, by the required four votes, the Audit staff’s 

recommendation that DPA exceeded the coordinated party expenditure limit by $15,200. 

Pursuant to Commission Directive 703

, this matter is discussed in the “Additional Issue” 

section of this report. (For more detail, see p. 16.) 

3

 Available at https://www.fec.gov/resources/cms-content/documents/directive_70.pdf 
 8 

Part IV 

Commission Findings 

Finding 1. Reporting of Debts and Obligations 

Summary 

During audit fieldwork, the Audit staff noted that DPA failed to disclose debts and 

obligations owed to 27 vendors totaling $351,097. In response to the Interim Audit 

Report recommendation, DPA corrected the public record by filing a Form 99 

(Miscellaneous Electronic Submission) which correctly disclosed its debts and 

obligations. DPA did not comment on this finding in its formal response to the Draft 

Final Audit Report. 

The Commission approved a finding that DPA failed to disclose debts and obligations to 

vendors totaling $351,097. 

Legal Standard 

A. Continuous Reporting Required. A political committee must disclose the amount 

and nature of outstanding debts and obligations until those debts are extinguished. 52 

U.S.C. §30104(b)(8) and 11 CFR §§104.3(d) and 104.11(a). 

B. Separate Schedules. A political committee must file separate schedules for debts 

owed by the committee and debts owed to the committee, together with a statement 

explaining the circumstances and conditions under which each debt and obligation 

was incurred or extinguished. 11 CFR §104.11(a). 

C. Itemizing Debts and Obligations. 

• A debt of $500 or less must be reported once it has been outstanding 60 days from 

the date incurred (the date of the transaction); the committee reports it on the next 

regularly scheduled report. 

• A debt exceeding $500 must be disclosed in the report that covers the date on 

which the debt was incurred, except that any obligation incurred for rent, salary or 

other regularly reoccurring administrative expense shall not be reported as a debt 

before the payment due date. 11 CFR §104.11(b). 

Facts and Analysis 

A. Facts 

During audit fieldwork, the Audit staff reviewed DPA’s disbursement records and 

disclosure reports for proper reporting of debts and obligations. This review identified 

debts owed to 27 vendors totaling $351,0974

 that DPA failed to report on Schedule D 

(Debts and Obligations) during the audit period. Based on a review of the records, 26 of 

these vendors provided printing services, event rentals, video production, consulting, IT 

4 

 Each debt was counted only once, even if it was required to be disclosed over multiple periods. 
 

 

 

9 

work, mailings, utility service, compliance, photography, finance director retainer, legal 

fees, fundraising, and cleaning services. The remaining vendor was a credit card vendor 

that DPA did not report on Schedule D during the audit period. 

DPA reported debt totaling $32,984 on Schedule D during the audit period. The Audit 

staff calculated the debts owed to the vendors based on the invoice date and the 

subsequent payment date. Debts were outstanding for periods ranging from 15 days to 

904 days. 

B. Interim Audit Report & Audit Division Recommendation 

The Audit staff discussed this matter with DPA representatives during the exit conference 

and provided a schedule detailing the transactions requiring disclosure on Schedule D. 

During the exit conference, DPA representatives questioned the inclusion of debts 

relating to recurring administrative expenses. The Audit staff responded that regularly 

recurring administrative expenses are subject to debt reporting requirements.5 In its 

response to the exit conference, DPA did not provide any further comments. 

The Interim Audit Report recommended that DPA provide documentation demonstrating 

that the transactions totaling $351,097 were not obligations which required reporting on 

Schedule D. Absent such documentation, the Interim Audit Report recommended that 

DPA amend its reports or file a Form 99 (Miscellaneous Electronic Submission)6

 to 

correctly disclose these debts and obligations on Schedule D. 

C. Committee Response to Interim Audit Report 

In response to the Interim Audit Report recommendation, DPA filed a Form 99 

(Miscellaneous Electronic Submission) on November 2, 2021, which did not materially 

correct the public record. Subsequently, DPA filed another Form 99 on January 14, 2022 

which corrected the public record by disclosing its debts and obligations. 

D. Draft Final Audit Report 

The Draft Final Audit Report acknowledged that DPA filed a Form 99 which corrected 

the public record by disclosing its debts and obligations. 

E. Committee Response to the Draft Final Audit Report 

DPA did not comment on this finding in its formal response to the Draft Final Audit 

Report. 

Commission Conclusion 

On July 28, 2022, the Commission considered the Audit Division Recommendation 

Memorandum in which the Audit staff recommended that the Commission find that DPA 

failed to disclose debts and obligations to vendors totaling $351,097. 

The Commission approved the Audit staff’s recommendation. 

5

 See 11 CFR §104.11(b). 

6

 DPA was advised by the Audit staff that if it chose to file a Form 99 instead of amending its disclosure 

reports, the form must contain all pertinent information that is required on each schedule. 
 10 

Finding 2. Recordkeeping for Employees 

Summary 

During audit fieldwork, the Audit staff determined that DPA did not maintain any 

monthly logs, as required, to document the percentage of time each employee spent in 

connection with a federal election. For 2017 and 2018, the Audit staff identified 

payments to DPA employees totaling $408,872 for which DPA did not maintain monthly 

logs. This consisted of payroll which was allocated with federal and non-federal funds 

and payroll paid exclusively with non-federal funds. In response to the Interim Audit 

Report recommendation, DPA stated it “has instituted procedures to ensure that time 

records are maintained for all employees who are paid in part with non-federal funds” 

and “employees who are paid exclusively with non-federal funds are outside the scope of 

the Commission’s jurisdiction and should not have been included in the finding.” In 

response to the DFAR, DPA reiterated its position and added that it “plans to create a 

procedure for recordkeeping for employees paid exclusively with non-federal funds, 

pending the outcome of the Final Audit Report.” DPA also reiterated that, in its view, 

payroll records for the employees paid exclusively with non-federal funds should not be 

included in the finding. 

The Commission approved a finding that DPA did not maintain monthly payroll logs or 

equivalent records totaling $408,872 to document the percentage of time each employee 

spent in connection with a federal election for calendar years 2017 and 2018. 

Legal Standard 

A. Maintenance of Monthly Logs. Party committees must keep a monthly log of the 

percentage of time each employee spends in connection with a federal election. 

Allocations of salaries, wages, and fringe benefits are to be undertaken as follows: 

• Employees who spend 25 percent or less of their compensated time in a given 

month on federal election activities must be paid either from the federal account 

or have their pay allocated as administrative costs between the federal and nonfederal accounts; 

• Employees who spend more than 25 percent of their compensated time in a given 

month on federal election activities must be paid only from a federal account; and 

• Employees who spend none of their compensated time in a given month on 

federal election activities may be paid entirely with funds that comply with State 

law. 11 CFR §106.7(d)(1). 

B. Formal Requirements Regarding Reports and Statements. Each political 

committee shall maintain records with respect to the matters required to be reported 

which shall provide in sufficient detail the necessary information and data from which 

the filed reports may be verified, explained, clarified, and checked for accuracy and 

completeness. 11 CFR §104.14(b)(1). 
 

 

 

 

11 

Facts and Analysis 

A. Facts 

During audit fieldwork, the Audit staff reviewed disbursements for payroll. DPA did not 

maintain any monthly logs or equivalent records to document the percentage of time each 

employee spent in connection with a federal election. These logs are required to 

document the proper allocation of federal and non-federal funds used to pay employee 

salaries and wages. For 2017 and 2018, DPA did not maintain monthly logs for $408,872 

in payroll.7 This amount includes: 

• Payroll totaling $373,961 for employees reported on Schedule H4 (Disbursements 

for Allocated Federal and Non-Federal Activity) and paid with an allocation of 

federal and non-federal funds during the same month; 

• Payroll totaling $1,374 for employees reported on Schedule H4 and/or Schedule B 

(Itemized Disbursements) and also paid with 100 percent non-federal funds 

during the same month; and 

• Payroll totaling $33,537 for employees paid exclusively with non-federal funds in 

a given month. 

B. Interim Audit Report & Audit Division Recommendation 

The Audit staff discussed this matter with DPA representatives during the exit conference 

and provided a schedule of the payroll transactions. DPA representatives responded that 

DPA did not maintain monthly logs for employees during calendar years 2017 and 2018 

and objected to the request for non-federal employee payroll records. The Audit staff has 

consistently requested these records and included these types of transactions as findings. 

Therefore, these transactions were included in the exit conference as a preliminary 

finding. In its response to the exit conference, DPA did not provide any further 

comments. 

The Interim Audit Report recommended that DPA provide evidence that monthly logs 

were maintained to document the percentage of time employees spent in connection with 

a federal election. Absent the provision of monthly logs specific to employees paid with 

100% non-federal funds, the Interim Audit Report recommended DPA provide evidence 

that records consistent with 11 CFR §104.14(b)(1) were maintained to document that 

certain employees were involved in exclusively non-federal activities. Additionally, the 

Interim Audit Report recommended that DPA provide and implement a plan to maintain 

monthly logs and other records consistent with 11 CFR §104.14(b)(1) in the future. 

C. Committee Response to Interim Audit Report 

In response to the Interim Audit Report recommendation, DPA stated it “has instituted 

procedures to ensure that time records are maintained for all employees who are paid in 

part with non-federal funds.” DPA further noted that the “inclusion of payroll records for 

those employees who are paid exclusively with non-federal funds are outside the scope of 

the Commission’s jurisdiction and should not have been included in the finding.” 

7

 This total does not include payroll for employees paid with 100 percent federal funds and reported as 

such (see Part I, Background, Commission Guidance, and Request for Early Commission Consideration 

of a Legal Question, Page 1). Payroll amounts are stated net of taxes and fringe benefits. 
 12 

The Audit staff concluded that DPA did not provide monthly logs for the $408,872 in 

payroll. However, DPA complied with the Interim Audit Report recommendation by 

implementing a plan to maintain monthly logs for all employees who are paid in part with 

non-federal funds in the future. 

The Audit staff maintained that DPA was required to maintain monthly logs for its 

employees paid with exclusively non-federal funds, to verify that the employees were not 

engaged in federal activities. Absent the provision of monthly logs specific to employees 

paid with exclusively non-federal funds, DPA could have provided evidence that records 

consistent with 11 CFR §104.14(b)(1) were maintained to document that certain 

employees were involved in exclusively non-federal activities. Additionally, for 

employees paid with exclusively non-federal funds, DPA could have also implemented 

and provided a plan to maintain monthly logs or other records consistent with 

11 CFR §104.14(b)(1). 

D. Draft Final Audit Report 

The Draft Final Audit Report acknowledged that DPA did not maintain monthly logs for 

2017 and 2018 but instituted procedures to ensure that time records are maintained for all 

employees who are paid in part with non-federal funds in the future. 

E. Committee Response to the Draft Final Audit Report 

In response to the Draft Final Audit Report, DPA reiterated that it “instituted procedures 

to ensure that time records are maintained for all employees who are paid in part with 

non-federal funds and also plans to create a procedure for recordkeeping for employees 

paid exclusively with non-federal funds, pending the outcome of the Final Audit Report.” 

DPA also reiterated that, in its view, payroll records for the employees paid exclusively 

with non-federal funds should not be included in the finding. DPA further stated that 

some Commissioners previously determined, in other audits, that employees paid with 

exclusively non-federal funds was outside the scope of the Commission’s jurisdiction, 

acknowledging that those Commissioners who voted to determine that such 

recordkeeping is outside the scope of regulation are no longer members of the 

Commission. Additionally, DPA stated: 

“In response to the lack of four Commissioners to determine that such 

recordkeeping is required, many party committees have been under the 

belief that such recordkeeping is not required. If the Commission decides 

to reverse course and determine by at least four votes that recordkeeping 

for non-federal payroll is, in fact, required, the DPA requests that the 

regulated community be given sufficient notice that there are now 

sufficient votes to require recordkeeping in such instances. In our view, a 

quiet vote to approve this finding as it is currently constituted is not 

sufficient notice.” 

The Audit staff maintained its position that DPA was required to maintain monthly logs 

for its employees paid with exclusively non-federal funds, to verify that the employees 

were not engaged in federal activities. There have been audits in which the Commission 

did not have four or more affirmative votes to find that monthly payroll logs were 
 

 

13 

required for employees paid with exclusively non-federal funds. The Audit staff notes, 

however, that in two recent audits which included non-federal payroll, the Commission 

approved the recordkeeping for employees finding. The Audit staff, therefore, believes 

DPA’s statement that the Commission has failed to notify the regulated community of its 

treatment of this issue is inaccurate. See Final Audit Report of the Connecticut 

Democratic State Central Committee (dated Feb. 23, 2022), pages 10 - 12 (approving a 

finding for payroll which was allocated with federal and non-federal funds and payroll 

paid exclusively with non-federal funds); and Final Audit Report of the Republican Party 

of Minnesota-Federal (dated Feb. 11, 2022), pages 8 - 10 (same). 

The Commission also approved other recordkeeping for employees findings in which 

monthly payroll logs were not maintained for employees paid with exclusively nonfederal funds; two of these audits were publicly available when DPA submitted its 

response to the DFAR. See Final Audit Report on Democratic Party of Hawaii (dated 

Feb. 16, 2018), pages 25-26 (same); and Final Audit Report on Illinois Republican Party 

(dated Oct. 24, 2017), pages 12-14 (same). It was in several earlier audits that the 

Commission did not have four or more affirmative votes to find that monthly payroll logs 

were required for employees who were paid exclusively with non-federal funds. See 

Final Audit Report on Utah Republican Party (dated Jan. 23, 2017), Final Audit Report 

on South Dakota Democratic Party (dated Apr. 27, 2015), Final Audit Report on 

Kentucky State Democratic Central Committee (dated Apr. 20, 2015), Final Audit Report 

on Democratic Party of Wisconsin (dated Apr. 6, 2015), Final Audit Report on 

Democratic Party of Illinois (dated Nov. 5, 2014), Final Audit Report on State 

Democratic Executive Committee of Alabama (dated May 12, 2014), and the Final Audit 

Report on the Republican Party of Iowa (dated Mar. 18, 2014). 

Commission Conclusion 

On July 28, 2022, the Commission considered the Audit Division Recommendation 

Memorandum in which the Audit staff recommended that the Commission find that DPA 

did not maintain monthly payroll logs or equivalent records totaling $408,872 to 

document the percentage of time each employee spent in connection with a federal 

election for calendar years 2017 and 2018. 

The Commission approved the Audit staff’s recommendation. 

Finding 3. Disclosure of Loans and Loan Repayments 

Summary 

During audit fieldwork, the Audit staff determined that DPA failed to properly disclose 

transactions totaling $32,500 on a line of credit, the correct terms and balances for 

outstanding loans totaling $87,140, and loan repayments of $3,563. DPA did not 

properly disclose the new loans and the terms and balances for outstanding loans on 

Schedules C (Loans) and/or C-1 (Loans and Line of Credit from Lending Institutions). In 

addition, some loan repayments were reported to the incorrect payee on Schedule B, Line 

26 (Loan Repayments) and others were reported with disclosure errors on Schedule C. 

In response to the Interim Audit Report recommendation, DPA corrected the public 

record by filing a Form 99 (Miscellaneous Electronic Submission) which correctly 
 14 

disclosed the line of credit, the new and outstanding loans, and the loan repayments. 

DPA did not comment on this finding in its formal response to the Draft Final Audit 

Report. 

The Commission approved a finding that DPA failed to correctly disclose transactions 

totaling $32,500 on a line of credit, the correct terms and balances for outstanding loans 

totaling $87,140, and loan repayments of $3,563. 

Legal Standard 

A. Reporting Loans. All loans received by a committee must be itemized and 

continuously reported until repaid. All repayments made on a loan must also be 

itemized. 11 CFR §§104.3(a)(4)(iv), (b)(4)(iii) and §104.11. 

B. Schedule C. Both the original loan and payments to reduce principal must be 

reported each reporting period until the loan is repaid. The committee must report the 

following: 

• The source of the loan; and 

• The type of loan the candidate received (i.e. bank loan, brokerage account, credit 

card, or home equity line of credit) either in the first box for endorsers and 

guarantors with a notation for loan type or in the box for “Loan Source” after the 

candidate’s name. 11 CFR §104.3(d) and §104.11. 

C. Schedule C-1. 

1. Loans to Committees. When a committee obtains a loan from a bank or other 

permissible lending institution it must also file Schedule C-1 with the first report 

due after a new loan or line of credit has been established. The committee must 

disclose the following information on Schedule C-1: 

• The date and amount of the loan; 

• The interest rate and repayment schedule of the loan, or on each draw of line 

of credit; 

• The type and value of collateral or other sources of repayment that secure the 

loan or the line of credit, and whether that security interest was perfected; and 

• An explanation of the basis upon which the loan was made, if not made on the 

basis of either collateral or other sources of repayment. 

2. Loan Agreement/Line of Credit. The committee must also attach a copy of the 

loan agreement. In the case of a committee that has obtained a line of credit, a 

new Schedule C-l must be filed with the next report whenever the committee 

draws on the line of credit. An authorized representative of the lending institution 

must sign the statement on Line I. 11 CFR §104.3(d)(l) and (3). 

D. Continuous Reporting Required. A political committee must disclose the amount 

and nature of outstanding debts and obligations until those debts are extinguished. 

52 U.S.C. §30104(b). 
 

 

15 

Facts and Analysis 

A. Facts 

During audit fieldwork, the Audit staff reviewed bank loans and a line of credit from 

Simmons Bank and First National Bank. Based upon a detailed review, the Audit staff 

determined the following: 

• For the line of credit received from Simmons Bank, DPA made three draws on 

the line of credit totaling $32,500 but did not disclose these draws on Schedules 

C (Loans) and/or C-1 (Loans and Line of Credit from Lending Institutions). In 

addition, DPA reported incorrect payment terms (due date and interest rate) and 

an incorrect outstanding balance for this line of credit, which resulted in the 

under-reporting of its 2018 year-end line of credit balance by $77,447.8 

• For the loan received from First National Bank, the incorrect balance was 

disclosed on Schedule C throughout the audit period. The loan was paid off on 

March 13, 2017, but DPA continued to incorrectly disclose an outstanding 

balance of $9,693 from July 1, 2017 through December 31, 2018. 

• Loan repayments totaling $1,036 to Simmons Bank were reported to the incorrect 

payee (“Simmons First National Bank”) on Schedule B, Line 26, of the 2017 

February Monthly, March Monthly, May Monthly, and July Monthly Reports. 

These loan repayments were also reported on Schedule C to the incorrect payee 

(“First National Bank”) of the 2017 February Monthly, March Monthly, and May 

Monthly Reports, and were not reported on Schedule C of the 2017 July Monthly 

Report. In addition, loan repayments totaling $2,527 to First National Bank were 

reported to the correct payee on Schedule B, Line 26, of the 2017 February 

Monthly and March Monthly Reports, but not reported on Schedule C. 

B. Interim Audit Report & Audit Division Recommendation 

The Audit staff discussed this matter with DPA representatives during the exit conference 

and provided a schedule detailing the disclosure errors. DPA representatives stated that 

they were aware of the disclosure problems and indicated they would amend reports to 

correctly disclose the loans and line of credit. 

The Interim Audit Report recommended that DPA provide documentation demonstrating 

that the identified draws on the line of credit, as well as the terms and balances for 

outstanding loans, and loan repayments were correctly disclosed. Absent such 

demonstration, the Interim Audit Report recommended that DPA amend its disclosure 

reports or file a Form 99 (Miscellaneous Electronic Submission)6 to disclose the correct 

information on Schedule B, Line 26 (Loan Repayments), Schedule C, and Schedule C-1. 

8

 For this line of credit, DPA carried an outstanding balance on January 1, 2017 of $60,766. In 2017, DPA 

made three draws on the line of credit totaling $32,500, plus an additional draw adding $557 to the 

principal in 2018. DPA made payments of $985 in 2017 and $72,815 in 2018, and this resulted in an 

outstanding balance for the line of credit on December 31, 2018 of $20,023. However, DPA disclosed 

the ending balance for this line of credit to be negative $57,424, which resulted in the under-reporting of 

its 2018 year-end line of credit balance by $77,447 (calculated as $20,023 minus negative $57,424). 
 16 

C. Committee Response to Interim Audit Report 

In response to the Interim Audit Report recommendation, DPA filed a Form 99 on 

November 2, 2021, which correctly disclosed the terms and transactions on a line of 

credit received from Simmons Bank totaling $32,500, in addition to the correct terms and 

balances for outstanding loans totaling $77,447. The Form 99 correctly disclosed the 

terms that appear on Schedule C and Schedule C-1, the cumulative payment and the 

outstanding amount at the close of the period that corrected the public record for both 

Schedule C and Schedule C1. DPA’s Form 99 did not correct an outstanding balance 

discrepancy of $9,693 for the loan received from First National Bank and did not address 

the loan repayments totaling $1,036 to Simmons Bank or the loan repayments totaling 

$2,527 to First National Bank. Subsequently, on January 14, 2022, DPA filed a revised 

Form 99 which correctly disclosed the line of credit, the new and outstanding loans, and 

the loan repayments. 

D. Draft Final Audit Report 

The Draft Final Audit Report acknowledged that DPA filed a revised Form 99 on January 

14, 2022, which correctly disclosed the line of credit, the new and outstanding loans, and 

the loan repayments. 

E. Committee Response to the Draft Final Audit Report 

DPA did not comment on this finding in its formal response to the Draft Final Audit 

Report. 

Commission Conclusion 

On July 28, 2022, the Commission considered the Audit Division Recommendation 

Memorandum in which the Audit staff recommended that DPA failed to correctly 

disclose transactions totaling $32,500 on a line of credit, the correct terms and balances 

for outstanding loans totaling $87,140, and loan repayments of $3,563. 

The Commission approved the Audit staff’s recommendation. 

Part V 

Additional Issue 

Reporting of Media Related Expenditures 

Summary 

During audit fieldwork, the Audit staff reviewed expenditures totaling $22,803, that DPA 

disclosed on Schedule B (Itemized Disbursements), Line 30(b) (Federal Election Activity 

Paid Entirely with Federal Funds). These expenditures appeared to be independent 

expenditures containing express advocacy which should have been disclosed on Schedule 

E, Line 24 (Independent Expenditures). DPA may also have been required to file a 24-

hour report for $18,424, the amount DPA paid for direct mailers supporting a candidate 

for federal office. 
 17 

In response to the Interim Audit Report recommendation, DPA disagreed with the 

characterization of these expenditures as independent expenditures and stated the 

expenditures were “properly made as exempt activities and were fully coordinated with 

the candidate.” DPA further indicated that the expenditures qualify for the volunteer 

materials exemption because the pledge cards and walking cards totaling $4,379 (referred 

to as printed materials in DPA’s response to the Interim Audit Report), and the direct 

mailers, totaling $18,424, were “distributed through the substantial use of volunteers.” A 

declaration from DPA’s former Director of Operations was also provided, attesting to the 

use of volunteers. 

After consultation with our Office of General Counsel (OGC), the Audit staff concluded 

that the pledge cards, walking cards and direct mailers are not independent expenditures, 

given DPA’s assertion that the activities were fully coordinated with the candidate. As 

such, the filing of a 24-hour report was not required for the direct mailers. In addition, 

the Audit staff concluded that whereas the pledge cards and walking cards are not 

coordinated expenditures because they are not public communications, the direct mailers 

are a coordinated expenditure. 

In response to the Draft Final Audit Report, DPA reiterated its position that the 

expenditures totaling $22,803, “were properly made as exempt activities and were fully 

coordinated with the candidate.” DPA stated that the declaration from its former Director 

of Operations, provided in response to the Interim Audit Report, supported its contention. 

Subsequent to the Draft Final Audit Report, OGC revised its conclusion regarding 

whether the pledge cards and walking cards are public communications, stating that door 

hangers that qualify as exempt under the volunteer materials exemption should be 

excluded from being classified as party coordinated expenditures, but door hangers that 

do not qualify for the volunteer materials exemption likely are public communications 

and, therefore, also party coordinated expenditures. In its response to OGC’s revised 

conclusion, DPA maintained that the door hangers at issue qualify for the volunteer 

materials exemption, noting that “documentation beyond a sworn affidavit has never been 

required” to qualify for the exemption. DPA further stated that the door hangers should 

not be included because they are not “public communications” and therefore cannot 

qualify as coordinated party expenditures. 

As a result of OGC’s revised conclusion regarding the door hangers, the Audit staff 

added the $4,379 cost of the door hangers to the $18,424 cost of the direct mailers, for a 

revised coordinated party expenditure total of $22,803. DPA provided a sworn 

declaration to document the volunteer materials exemption for the door hangers and 

direct mailers, and the Audit staff recommended the Commission determine whether the 

declaration sufficiently documented volunteer involvement and satisfied the exemption, 

given the lack of clarity regarding how the exemption should be applied. 

The Commission did not approve, by the required four votes, the Audit staff’s 

recommendation that DPA exceeded the coordinated party expenditure limit by $15,200. 
 18 

Pursuant to Commission Directive 709

, this matter is discussed in the “Additional Issue” 

section of this report. 

Legal Standard 

A. Definition of Independent Expenditures. An independent expenditure is an 

expenditure made for a communication expressly advocating the election or defeat of 

a clearly identified candidate that is not made in cooperation, consultation, or concert 

with, or at the request or suggestion of, a candidate, a candidate’s authorized 

committee, or their agents, or a political party or its agents. 

A clearly identified candidate is one whose name, nickname, photograph or drawing 

appears, or whose identity is apparent through unambiguous reference, such as “your 

Congressman,” or through an unambiguous reference to his or her status as a 

candidate, such as “the Democratic presidential nominee” or “Republican candidate 

for Senate in this state.” 

Expressly advocating means any communication that: 

• Uses phrases such as “vote for the President” or “re-elect your Congressman” or 

communications of campaign slogan(s) or individual word(s), which in context 

can have no other reasonable meaning than to urge election or defeat of one or 

more clearly identified candidates; or 

• When taken as a whole and with limited references to external events, such as 

proximity to the election, could be interpreted by a reasonable person only as 

advocating the election or defeat of one or more clearly identified candidates. 

11 CFR §§100.16(a), 100.17 and 100.22. 

B. Disclosure Requirements – General Guidelines. An independent expenditure shall 

be reported on Schedule E if, when added to other independent expenditures made to 

the same payee during the same calendar year, it exceeds $200. Independent 

expenditures made (i.e., publicly disseminated) prior to payment should be disclosed 

as memo entries on Schedule E and as a debt on Schedule D. Independent 

expenditures of $200 or less need not be itemized, though the committee must report 

the total of those expenditures on Schedule E, Line (b). 11 CFR §§104.3(b)(3)(vii), 

104.4(a) and 104.11. 

C. Last-Minute Independent Expenditure Reports (24-Hour Reports). Any 

independent expenditures aggregating $1,000 or more, with respect to any given 

election, and made after the 20th day but more than 24 hours before the day of an 

election must be reported and the report must be received by the Commission within 

24 hours after the expenditure is made. A 24-hour report is required for each 

additional $1,000 that aggregates. The 24-hour report must be filed on a Schedule E. 

The date that a communication is publicly disseminated serves as the date that the 

Committee must use to determine whether the total amount of independent 

expenditures has, in the aggregate, reached or exceeded the threshold reporting 

amount of $1,000. 11 CFR §§104.4(f) and 104.5(g)(2). 

9 See supra footnote 3. 
 19 

D. Formal Requirements Regarding Reports and Statements. Each political 

committee shall maintain records with respect to the matters required to be reported 

which shall provide in sufficient detail the necessary information and data from which 

the filed reports may be verified, explained, clarified, and checked for accuracy and 

completeness. 11 CFR §104.14(b)(1). 

E. Allocation of Expenses between Candidates. Expenditures made on behalf of more 

than one clearly identified federal candidate shall be attributed to each such candidate 

according to the benefit expected to be derived. In the case of a publication or 

broadcast communication, the attribution shall be determined by the proportion of 

space or time devoted to all candidates. This method shall be used to allocate 

payments involving both clearly identified federal candidates and one or more clearly 

identified non-federal candidates. 11 CFR §106.1(a). 

F. Volunteer Activity. The payment by a state committee of a political party of the 

costs of campaign materials (such as pins, bumper stickers, handbills, brochures, 

posters, party tabloids or newsletters, and yard signs) used by such committee in 

connection with volunteer activities on behalf of any nominee(s) of such party is not a 

contribution, provided that the following conditions are met: 

• Such payment is not for cost incurred in connection with any broadcasting, 

newspaper, magazine, bill board, direct mail, or similar type of general public 

communication or political advertising. The term direct mail means any 

mailing(s) by a commercial vendor or any mailing(s) made from commercial lists; 

• The portion of the cost of such materials allocable to Federal candidates must be 

paid from contributions subject to the limitations and prohibitions of the Act; 

• Such payment is not made from contributions designated by the donor to be spent 

on behalf of a particular candidate for federal office; 

• Such materials are distributed by volunteers and not by commercial or for-profit 

operations; 

• If made by a political committee such payments shall be reported by the political 

committee as a disbursement in accordance with 11 CFR §104.3 but need not be 

allocated to specific candidates in committee reports; and 

• The exemption is not applicable to campaign materials purchased by the national 

party committees. 11 CFR §100.87 (a), (b), (c), (d), (e) and (g) and 11 CFR 

§100.147 (a), (b), (c), (d), (e) and (g). 

G. Coordinated Party Expenditures. National party committees and state party 

committees are permitted to purchase goods and services on behalf of candidates in 

the general election—over and above the contributions that are subject to contribution 

limits. Such purchases are referred to as “coordinated party expenditures.” They are 

subject to the following rules: 

• The amount spent on “coordinated party expenditures” is limited by statutory 

formulas that are based on the Cost of Living Adjustment (COLA) and the voting 

age population; 

• Party committees are permitted to coordinate the spending with the candidate 

committees; 
 20 

• The parties may make these expenditures only in connection with the general 

election; 

• The party committees—not the candidates—are responsible for reporting these 

expenditures; and 

• If the party committee exceeds the limits on coordinated party expenditures, the 

excess amount is considered an in-kind contribution, subject to the contribution 

limits described above. 52 U.S.C. §30116(d) and 11 CFR §§109.30 and 109.32. 

H. Assignment of Coordinated Party Expenditure Limit. A political party may 

assign its authority to make coordinated party expenditures to another political party 

committee. Such an assignment must be made in writing, state the amount of the 

authority assigned, and be received by the assignee before any coordinated party 

expenditure is made pursuant to the assignment. The political party committee that is 

assigned authority to make coordinated party expenditures must maintain the written 

assignment for at least three years. 11 CFR §§104.14 and 109.33(a) and (c). 

I. Coordinated Party Communication. A political party communication is 

coordinated with a candidate, a candidate’s authorized committee, or agent of any of 

the foregoing, when the communication satisfies the following conditions: 

(1) The communication is paid for by a political party committee or its agent. 

(2) The communication is a public communication that satisfies at least one of the 

following content standards. 

• Expressly advocates a candidate’s election or defeat 11 CFR §100.22(a) and 

(b). 

• Involves the dissemination, distribution or republication of a candidate’s 

campaign materials. 

• Refers to a federal candidate, is directed to the candidate’s constituents and is 

distributed within certain time frame before an election. 

(3) The communication satisfies at least one of the conduct standards in 11 CFR 

§109.21(d)(1) through (d)(6), subject to the provisions of 11 CFR §109.21(e), (g), 

and (h). 

• Must have been created, produced or distributed at the request of the 

candidate or its agent. 

• Developed with a “material involvement” of the candidate. 

• Created, produced or distributed after “substantial discussion” with the 

candidate or his agents. 

The use of a common vendor in the creation, production or distribution of 

a communication. 11 CFR §109.37. 

J. Reporting Coordinated Party Expenditures. Each political committee shall report 

the full name of each person who receives any expenditure from the reporting 

committee during the reporting period in connection with an expenditure under 11 

CFR Part 109, Subpart D (52 U.S.C. §30116(d)), together with the date, amount and 

purpose of any such expenditure as well as the name of, and office sought by the 

candidate on whose behalf the expenditure is made. 11 CFR §104.3 (b)(1)(viii). 
 

 

21 

K. Public Communication (52 U.S.C. § 30101(22)). Public communication means a 

communication by means of any broadcast, cable, or satellite communication, 

newspaper, magazine, outdoor advertising facility, mass mailing, or telephone bank to 

the general public, or any other form of general public political advertising. The term 

general public political advertising shall not include communications over the 

Internet, except for communications placed for a fee on another person’s Web site. 

Facts and Analysis 

A. Reporting of Apparent Independent Expenditures 

1. Facts 

During audit fieldwork, the Audit staff reviewed disbursements to ensure proper 

reporting. The Audit staff noted that DPA did not disclose any independent 

expenditures on Schedule E, however, it appeared to make apparent independent 

expenditures totaling $22,803 and disclosed them on Schedule B, Line 30(b) 

(Federal Election Activity Paid Entirely with Federal Funds). These expenditures 

were for pledge cards, walking cards, and direct mail pieces, which all contained 

express advocacy. A breakdown analysis for these expenditures is as follows: 

Apparent Independent Expenditures Reported as Federal Election 

Activity (FEA) Paid Entirely with Federal Funds (Associated Mailer 

Provided under 11 CFR §100.22(a)) 

a. DPA made one disbursement for pledge cards totaling $1,128 for which it 

provided a copy of the piece and associated invoice. The pledge card, disclosed 

as “Volunteer Exempt/Printing of Canvass Materials – Tucker for Congress” on 

DPA’s disclosure reports, contained the following phrase: “Pledge to vote early 

for Clarke Tucker.” DPA did not provide evidence of volunteer involvement to 

support the volunteer materials exemption for this activity. This communication 

contained language expressly advocating for the election or defeat of a clearly 

identified candidate, as defined under 11 CFR §100.22(a). 

b. DPA made one disbursement for walking cards totaling $3,251 for which it 

provided a copy of the piece and associated invoice. The walking card, 

disclosed as “Volunteer Exempt/Printing of Canvass Materials – Tucker for 

Congress” on DPA’s disclosure reports, contained the following phrase: “2 

Ways to vote for Clarke Tucker.” DPA did not provide evidence of volunteer 

involvement to support the volunteer materials exemption for this activity. This 

communication contained language expressly advocating for the election or 

defeat of a clearly identified candidate, as defined under 11 CFR §100.22(a). 

c. DPA made one disbursement for direct mail pieces totaling $18,424 for which it 

provided a copy of the pieces and associated invoice. The direct mail pieces, 

disclosed as “Printing & Postage/Volunteer Exempt Mailing/Clarke Tucker for 

Congress” on DPA’s disclosure reports, contained the following phrase: “Vote 

Clarke Tucker for Congress.” DPA did not provide evidence of volunteer 

involvement to support the volunteer materials exemption for this activity. This 

communication contained language expressly advocating for the election or 

defeat of a clearly identified candidate, as defined under 11 CFR §100.22(a). 
 22 

2. Interim Audit Report & Audit Division Recommendation 

The Audit staff discussed this matter with DPA representatives during the exit 

conference and provided a schedule detailing these expenditures. DPA 

representatives stated that “these were not independent expenditures,” that “no 

state party committee has volunteer support for canvassing materials,” and that 

“canvassing materials don’t qualify as public communications.” DPA 

representatives stated they would “work on obtaining volunteer involvement 

support for the Resonance Campaigns expenditure [identified in 1(c) above]... but 

not for the Print for Progress canvassing expenditures [identified in 1(a) and 1(b) 

above]” because those “two items are not public communications.” In response to 

the exit conference, no additional supporting documentation and no further 

comment were provided. 

The payment by a state or local party committee for the costs of campaign 

materials (such as pins, bumper stickers, handbills, brochures, posters, party 

tabloids or newsletters, and yard signs) used by such committee in connection with 

volunteer activities on behalf of any nominee(s) of such party is not an expenditure 

provided that such materials are distributed by volunteers and not by commercial 

or for-profit operations. 11 CFR § 100.147(d). The Audit staff contended, 

therefore, that whether the volunteer materials exemption applies does not hinge 

on the type of campaign material a committee uses, but, instead, on how the 

campaign materials are distributed. In particular, the Commission draws a 

distinction between campaign materials distributed by volunteers, which qualify 

for the exemption, and those that are distributed by paid workers of commercial 

entities or for-profit operations, which do not qualify for the exemption. Id. To 

determine whether the volunteer materials exemption applies, the Commission 

must evaluate whether a committee, in fact, used volunteers to distribute campaign 

materials. 

The Interim Audit Report recommended that DPA: 

• Provide documentation that apparent independent expenditures, totaling 

$22,803, did not require reporting as independent expenditures; and/or 

• Provide evidence to support the volunteer materials exemption application for 

apparent independent expenditures, totaling $22,803. Such evidence assists the 

Commission in determining if the volunteer materials exemption is applicable to 

these expenditures. 

Absent such documentation or evidence, the Interim Audit Report recommended 

that DPA amend its reports to disclose these disbursements as independent 

expenditures on Schedule E (Itemized Independent Expenditures) and provide 

documentation to support the date of public dissemination for each communication 

to determine whether a 24-hour report was required to be filed. 

3. Committee Response to Interim Audit Report 

In response to the Interim Audit Report recommendation, DPA objected to the 

characterization of these expenditures as independent expenditures. DPA stated 

that “[t]hese expenditures were properly made as exempt activities and were fully 
 

 

 

 

 

23 

coordinated with the candidate.” DPA further stated “[t]hese activities fall into 

two categories.” It “sent a volunteer exempt mailing through Resonance 

Campaigns at a cost of $18,423.97” and “paid for printing in the amount of 

$4,378.53 for printed materials that were distributed by hand by volunteers.” 

Regarding DPA’s assertion that the expenditures were “fully coordinated with the 

candidate,” the Audit staff notes that DPA did not amend its disclosure reports to 

disclose these expenditures as coordinated party expenditures on Schedule F 

(Coordinated Party Expenditures). The expenditures remain disclosed on Schedule 

B, Line 30(b) (Federal Election Activity Paid Entirely with Federal Funds). 

Regarding the mailing through Resonance Campaigns of $18,424 [identified in 

1(c) above], the former Director of Operations stated in the declaration submitted 

in response to the Interim Audit Report recommendation, that “the production and 

preparation of this mailing included substantial participation by volunteers 

including sorting, bundling and other tasks in accordance with 11 C.F.R. §100.87 

and Commission precedents related to volunteer exempt mail.” DPA also noted 

that the declaration “complies with the formatting requirements of 28 U.S.C. 

§1746” and, as such, cannot be characterized as “unsworn.” 

Regarding the pledge cards and walking cards (characterized by DPA’s former 

Director of Operations as “door hangers” in her declaration and as “printed 

materials” in DPA’s Interim Audit Report response), DPA stated it was its 

understanding that “since these activities were not public communications, they 

cannot be considered coordinated communications and no further action would be 

necessary regarding these expenditures.” DPA further stated, “it is quite 

uncommon for state party committees to create and maintain documentation 

relating to the volunteer component of such daily canvassing activities. They are 

much too voluminous and difficult for a state party to document. In addition, since 

such activities are not public communications, and cannot be considered 

coordinated communications, the need to create and maintain such documentation 

is unnecessary.” The declaration from its former Director of Operations stated the 

door hangers were “distributed exclusively by volunteers.” 

After consideration of DPA’s response and in consultation with OGC, the Audit 

staff determined that the disbursement for the pledge cards and walking cards did 

not meet the definition of an independent expenditure.10 

10 The Audit staff previously considered the cost of the pledge cards and walking cards to be an independent 

expenditure. However, DPA indicated in its response to the Interim Audit Report that the expenditures 

were fully coordinated with the candidate and, in consultation with the Office of General Counsel, the 

Audit staff therefore determined that the pledge cards and walking cards could not be classified as an 

independent expenditure. Further, DPA asserted that the pledge cards and walking cards (characterized 

by DPA’s former Director of Operations as “door hangers” in her declaration and as “printed materials” 

in DPA’s Interim Audit Report response) were distributed by volunteers. The Office of General Counsel 

has concluded that, based on this method of distribution, the pledge cards and walking cards are not 

public communications and therefore do not meet the threshold criteria for satisfying the content prong of 

the coordinated expenditure standard (See LRA 1153). Because the Commission has been inconsistent 

on this issue, however, the Office of General Counsel recommended referral of this question to the 
 

 

24 

Regarding the direct mailers, the Audit staff agreed with DPA that these 

expenditures are not independent expenditures, given their coordination with the 

candidate. However, they are considered coordinated expenditures, as direct 

mailers are considered public communications. In addition, these expenditures 

may be subject to the volunteer materials exemption given the declaration from 

DPA’s former Director of Operations. 

Due to the lack of a clear standard for applying the volunteer materials exemption, 

the Audit staff was unable to determine whether the declaration submitted by DPA 

sufficed to document the involvement of volunteers and noted that the Commission 

would make a determination at the appropriate phase of the audit process. 

The Audit staff noted that, if the Commission determined these expenditures to be 

coordinated expenditures, DPA would have exceeded its coordinated spending 

limit by $10,82111 for Clarke Tucker for Congress. 

4. Draft Final Audit Report 

The Draft Final Audit Report acknowledged that the pledge cards, walking cards 

and direct mailers are not independent expenditures, given DPA’s assertion in its 

response to the Interim Audit Report that these activities were fully coordinated 

with the candidate. Given this assertion, the filing of a 24-hour report was not 

required for the direct mailers. However, the direct mailers are coordinated 

expenditures, as they are considered public communications. In addition, these 

expenditures may have been subject to the volunteer materials exemption given the 

declaration from DPA’s former Director of Operations. 

The Audit staff noted that, if the Commission determined that the declaration does 

not sufficiently document volunteer involvement and these expenditures to be 

coordinated expenditures, DPA would have exceeded its coordinated spending 

limit by $10,821 for Clarke Tucker for Congress. 

5. Committee Response to the Draft Final Audit Report 

In response to the Draft Final Audit Report, DPA reiterated its position that the 

expenditures totaling $22,803, “were properly made as exempt activities and were 

fully coordinated with the candidate.” DPA stated that the declaration from its 

former Director of Operations supported its contention. DPA further stated, “In 

the recent consideration of the Draft Final Audit Report of the Connecticut 

Democratic State Central Committee (Agenda Document 21-44-A for Open 

Meeting of December 16, 2021), the Commission found that the state party had 

provided sufficient documentation related to volunteer mailings based solely upon 

the declarations provided by the committee. It must do so here as well.” 

Commission. The Audit staff therefore mentioned the pledge cards and walking cards here, although 

their costs were not included in the total dollar amount of this finding. 11 This is less DPA’s allowable contribution to the candidate of $5,000 ($15,821 - $5,000 = $10,821). 
 

 

25 

The Audit staff noted that in the December 16, 2021 consideration of the Audit 

Division Recommendation Memorandum on the Connecticut Democratic State 

Central Committee, the Commission voted 5-0 to reject the Reporting of Apparent 

Independent Expenditures finding, for which the committee provided a sworn 

declaration to document the volunteer materials exemption. 

In LRA 1153, dated March 30, 2022, OGC revised its conclusion regarding 

whether the pledge cards and walking cards (referred to as “door hangers” in the 

declaration provided by DPA), are public communications. OGC stated that door 

hangers that qualify as exempt under the volunteer materials exemption should be 

excluded from being classified as party coordinated expenditures, but door hangers 

that do not qualify for the volunteer materials exemption likely are public 

communications and, therefore, also party coordinated expenditures. OGC 

recommended that the cost of the door hangers be included in this finding as a 

party coordinated expenditure because if they are not within the volunteer 

materials exemption, the door hangers are likely public communications that 

otherwise meet the definition of “party coordinated communication” in 11 C.F.R. § 

109.37. 

In response to OGC’s LRA 1153, dated March 30, 2022, DPA maintained that the 

door hangers at issue qualify for the volunteer materials exemption, noting that 

“documentation beyond a sworn affidavit has never been required” to qualify for 

the exemption. DPA stated that the process of distributing door hangers is “very 

decentralized,” making it difficult to document such activity, in contrast to 

documenting the volunteer activity relative to exempt mail pieces which are 

generally handled in a closed environment. 

DPA further stated that the door hangers should not be included in this proposed 

finding because they are not “public communications” and therefore cannot qualify 

as coordinated party expenditures. This, DPA asserted, is due to the content 

standard which states that a communication must be a “public communication” to 

meet the definition of a coordinated party expenditure. 

As a result of OGC’s revised conclusion regarding the door hangers, the Audit 

staff added the $4,379 cost of the door hangers to the $18,424 cost of the direct 

mailers, for a revised coordinated party expenditure total of $22,803. DPA 

provided a sworn declaration to document the volunteer materials exemption for 

the door hangers and direct mailers, and the Audit staff recommended the 

Commission determine whether the declaration sufficiently documented volunteer 

involvement and satisfied the exemption, given the lack of clarity regarding how 

the exemption should be applied. 

In the event the Commission determined that the declaration did not sufficiently 

document the involvement of volunteers for the door hangers and direct mailers, 

and that the volunteer materials exemption did not apply to these expenditures, the 

Audit staff recommended that the Commission find that DPA exceeded the 

coordinated party expenditure limit by $15,200. 
 

 

 

26 

Commission Conclusion 

On July 28, 2022, the Commission considered the Audit Division Recommendation 

Memorandum in which the Audit staff recommended that the Commission determine 

whether the declaration sufficiently documented volunteer involvement and satisfied 

the exemption, given the lack of clarity regarding how the volunteer materials 

exemption should be applied. In the event the Commission determined that the 

declaration did not sufficiently document the involvement of volunteers for the door 

hangers and direct mailers, and that the volunteer materials exemption did not apply 

to these expenditures, the Audit staff recommended that the Commission find that 

DPA exceeded the coordinated party expenditure limit by $15,200. 

The Commission did not approve, by the required four votes, the Audit staff’s 

recommendation. The declaration provided by DPA was consistent with the kind of 

materials the Commission has accepted as documenting volunteer activity in previous 

Commission matters. 

Pursuant to Commission Directive 7012, this matter is presented as an “Additional 

Issue.” 

B. Volunteer Materials Exemption 

1. Facts 

DPA reported three disbursements totaling $22,803 on Schedule B as Federal 

Election Activity. Two of these disbursements were reported as made to “Print for 

Progress” and the third was reported as made to “Resonance Campaigns, LLC.” 

DPA reported the purposes of the two disbursements made to Print for Progress as 

“Volunteer Exempt/Printing of Canvass Materials – Tucker for Congress,” and the 

third disbursement made to Resonance Campaigns, LLC, as “Printing & 

Postage/Volunteer Exempt Mailing/Clarke Tucker for Congress.” The invoices for 

the two disbursements made to Print for Progress were annotated as “AR-02 

Pledge Cards” and “AR-02 Walk Cards,” while the third invoice for the 

disbursement made to Resonance Campaigns, LLC, was annotated as “Production 

and Design DCC1815 (Qty. 60,969) 8.5x11.” DPA, however, did not provide any 

volunteer documentation or evidence of volunteer involvement to support these 

disbursements. 

The Commission has addressed the applicability of the volunteer materials 

exemption in the Final Audit Reports of the Arizona Republican Party, the 

Democratic Executive Committee of Florida, and the Tennessee Republican Party. 

In these reports, the Commission recognized a lack of clarity regarding the 

application of the volunteer materials exemption. The Commission had attempted 

to formulate a consensus policy regarding what constitutes substantial volunteer 

involvement for the purpose of applying the exemption13, but this was never 

achieved. Since a lack of clarity exists concerning the application of the volunteer 

12 See supra footnote 3. 13 Proposed Interim Enforcement Policy, Agenda document No. 10-16. 

https://www.fec.gov/resources/updates/agendas/2010/mtgdoc1016.pdf 
 27 

materials exemption, it follows that the type and amount of documentation needed 

to support volunteer involvement is also unclear. 

2. Interim Audit Report & Audit Division Recommendation 

The Audit staff discussed this matter with DPA representatives during the exit 

conference and provided a schedule detailing these expenditures. DPA 

representatives stated that “these were not independent expenditures,” that “no 

state party committee has volunteer support for canvassing materials,” and that 

“canvassing materials don’t qualify as public communications.” DPA 

representatives stated they would “work on obtaining volunteer involvement 

support for the Resonance Campaigns expenditure ... but not for the Print for 

Progress canvassing expenditures” because those “two items are not public 

communications.” In response to the exit conference, no additional supporting 

documentation and no further comment was provided. 

As previously discussed in section A.2 above, the Audit staff contended that 

whether the volunteer materials exemption applies does not hinge on the type of 

campaign material a committee uses, but, instead, on how the campaign materials 

are distributed. DPA had not provided evidence of volunteer involvement for 

these expenditures. Prior to determining whether the volunteer materials 

exemption applies to the expenditures, DPA must provide evidence of volunteer 

involvement. 

The Interim Audit Report recommended that DPA provide documentation and 

evidence that apparent independent expenditures totaling $22,803 did not require 

reporting as independent expenditures. Such evidence includes documentation 

such as volunteer sign in sheets, photographs of volunteers participating in various 

duties such as reviewing, sorting and packing the direct mail pieces, etc., to 

support the involvement of volunteer processing or distributing the 

communication. Absent such evidence, the Interim Audit Report recommended 

that DPA amend its reports to disclose the disbursements as independent 

expenditures on Schedule E. 

3. Committee Response to Interim Audit Report 

In response to the Interim Audit Report recommendation, DPA submitted a 

declaration from its former Director of Operations, as addressed in Part A above. 

Due to the lack of a clear standard for applying the volunteer materials exemption, 

the Audit staff was unable to determine whether the declaration submitted by DPA 

sufficed to document the involvement of volunteers for the direct mailers14, and 

noted that the Commission would make a determination at the appropriate phase of 

the audit process. 

4. Draft Final Audit Report 

The Draft Final Audit Report acknowledged that the pledge cards, walking cards 

and direct mailers are not independent expenditures, given DPA’s assertion in its 

14 See footnote 10 above for discussion of the current treatment of the pledge cards and walking cards. 
 

 

28 

response to the Interim Audit Report that these activities were fully coordinated 

with the candidate. Given this assertion, the filing of a 24-hour report was not 

required for the direct mailers. However, the direct mailers are coordinated 

expenditures, as they are considered public communications. In addition, these 

expenditures may be subject to the volunteer materials exemption given the 

declaration from DPA’s former Director of Operations. 

The Audit staff noted that, at the appropriate time, the Commission would make a 

determination whether the declaration sufficiently documented the volunteer 

involvement asserted by DPA. 

5. Committee Response to the Draft Final Audit Report 

In response to the Draft Final Audit Report, DPA reiterated its position that the 

expenditures totaling $22,803, “were properly made as exempt activities and were 

fully coordinated with the candidate.” DPA stated that the declaration from its 

former Director of Operations supported its contention. DPA further stated, “In 

the recent consideration of the Draft Final Audit Report of the Connecticut 

Democratic State Central Committee (Agenda Document 21-44-A for Open 

Meeting of December 16, 2021), the Commission found that the state party had 

provided sufficient documentation related to volunteer mailings based solely upon 

the declarations provided by the committee. It must do so here as well.” 

The Audit staff noted that in the December 16, 2021 consideration of the Audit 

Division Recommendation Memorandum on the Connecticut Democratic State 

Central Committee, the Commission voted 5-0 to reject the Reporting of Apparent 

Independent Expenditures finding, for which the committee provided a sworn 

declaration to document the volunteer materials exemption. 

In LRA 1153, dated March 30, 2022, OGC revised its conclusion regarding 

whether the pledge cards and walking cards (referred to as “door hangers” in the 

declaration provided by DPA), are public communications. OGC stated that door 

hangers that qualify as exempt under the volunteer materials exemption should be 

excluded from being classified as party coordinated expenditures, but door hangers 

that do not qualify for the volunteer materials exemption likely are public 

communications and, therefore, also party coordinated expenditures. OGC 

recommended that the cost of the door hangers be included in this finding as a 

party coordinated expenditure because if they are not within the volunteer 

materials exemption, the door hangers are likely public communications that 

otherwise meet the definition of “party coordinated communication” in 11 C.F.R. § 

109.37. 

In response to OGC’s LRA 1153, dated March 30, 2022, DPA maintained that the 

door hangers at issue qualify for the volunteer materials exemption, noting that 

“documentation beyond a sworn affidavit has never been required” to qualify for 

the exemption. DPA stated that the process of distributing door hangers is “very 

decentralized,” making it difficult to document such activity, in contrast to 
 29 

documenting the volunteer activity relative to exempt mail pieces which are 

generally handled in a closed environment. 

DPA further stated that the door hangers should not be included in this proposed 

finding because they are not “public communications” and therefore cannot qualify 

as coordinated party expenditures. This, DPA asserted, is due to the content 

standard which states that a communication must be a “public communication” to 

meet the definition of a coordinated party expenditure. 

As a result of OGC’s revised conclusion regarding the door hangers, the Audit 

staff added the $4,379 cost of the door hangers to the $18,424 cost of the direct 

mailers, for a revised coordinated party expenditure total of $22,803. DPA 

provided a sworn declaration to document the volunteer materials exemption for 

the door hangers and direct mailers, and the Audit staff recommended the 

Commission determine whether the declaration sufficiently documented volunteer 

involvement and satisfied the exemption, given the lack of clarity regarding how 

the exemption should be applied. 

In the event the Commission determined that the declaration did not sufficiently 

document the involvement of volunteers for the door hangers and direct mailers, 

and that the volunteer materials exemption did not apply to these expenditures, the 

Audit staff recommended that the Commission find that DPA exceeded the 

coordinated party expenditure limit by $15,200. 

Commission Conclusion 

On July 28, 2022, the Commission considered the Audit Division Recommendation 

Memorandum in which the Audit staff recommended that the Commission determine 

whether the declaration sufficiently documented volunteer involvement and satisfied 

the exemption, given the lack of clarity regarding how the volunteer materials 

exemption should be applied. In the event the Commission determined that the 

declaration did not sufficiently document the involvement of volunteers for the door 

hangers and direct mailers, and that the volunteer materials exemption did not apply 

to these expenditures, the Audit staff recommended that the Commission find that 

DPA exceeded the coordinated party expenditure limit by $15,200. 

The Commission did not approve, by the required four votes, the Audit staff’s 

recommendation. The declaration provided by DPA was consistent with the kind of 

materials the Commission has accepted as documenting volunteer activity in previous 

Commission matters. 

Pursuant to Commission Directive 7015, this matter is presented as an “Additional 

Issue.” 

15 See supra footnote 3. 
 30 

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

1. Facts 

In addition to not reporting the apparent independent expenditures totaling $22,803 

identified above, DPA did not file any 24-hour reports16, which may have been 

required. 

2. Interim Audit Report & Audit Division Recommendation 

The Audit staff discussed this matter with DPA representatives during the exit 

conference and presented a schedule detailing these expenditures. DPA 

representatives stated that “these were not independent expenditures,” that “no 

state party committee has volunteer support for canvassing materials,” and that 

“canvassing materials don’t qualify as public communications.” DPA 

representatives stated they would “work on obtaining volunteer involvement 

support for the Resonance Campaigns expenditure ... but not for the Print for 

Progress canvassing expenditures” because those “two items are not public 

communications.” In response to the exit conference, no additional supporting 

documentation and no further comment was provided. 

As previously discussed in section A.2 above, the Audit staff contended that 

whether the volunteer materials exemption applies does not hinge on the type of 

campaign material a committee uses, but, instead, on how the campaign materials 

are distributed. DPA had not provided evidence of volunteer involvement for 

these expenditures. Prior to determining whether the volunteer materials 

exemption applies to the expenditures, DPA must provide evidence of volunteer 

involvement. 

The Interim Audit Report recommended that, absent documentation that the 

apparent independent expenditures, totaling $22,803, did not require reporting as 

independent expenditures (per Part A above), DPA provide documentation to 

support the date of public dissemination for each mailer to determine whether a 24-

hour report was required to be filed. 

3. Committee Response to Interim Audit Report 

In response to the Interim Audit Report recommendation, DPA objected to the 

characterization of the expenditures in question as independent expenditures and 

stated that the expenditures were “exempt activities and were fully coordinated 

with the candidate,” which would negate the requirement to file 24-hour reports. 

DPA also submitted a declaration from its Director of Operations, as addressed in 

Part A above. 

After reviewing DPA’s response to the Interim Audit Report recommendation, and 

in consultation with the Office of General Counsel, the Audit staff agreed that the 

16 The date the expenditure is publicly distributed serves as the date that the independent expenditure is 

made for purposes of the additional 24-hour report filing requirement. In the absence of a known date 

for public dissemination, the Audit staff used the invoice date of incurrence to determine if a 24-hour 

report was required. 
 

 

31 

pledge cards, walking cards, and direct mailers are not independent expenditures. 

As such, DPA was not required to file 24-hour reports for these expenditures. 

4. Draft Final Audit Report 

The Draft Final Audit Report acknowledged that the pledge cards, walking cards 

and direct mailers are not independent expenditures, given DPA’s assertion in its 

response to the Interim Audit Report that these activities were fully coordinated 

with the candidate. Given this assertion, the filing of a 24-hour report was not 

required for the direct mailers. 

5. Committee Response to the Draft Final Audit Report 

In response to the Draft Final Audit Report, DPA did not address this matter as the 

Audit staff acknowledged in the Draft Final Audit Report that the pledge cards, 

walking cards and direct mailers are not independent expenditures, and as such, do 

not require the filing of a 24-hour report. 

Commission Conclusion 

On July 28, 2022, the Commission considered the Audit Division Recommendation 

Memorandum in which the Audit staff recommended that the Commission determine 

whether the declaration sufficiently documented volunteer involvement and satisfied 

the exemption, given the lack of clarity regarding how the volunteer materials 

exemption should be applied. In the event the Commission determined that the 

declaration did not sufficiently document the involvement of volunteers for the door 

hangers and direct mailers, and that the volunteer materials exemption does not apply 

to these expenditures, the Audit staff recommended that the Commission find that 

DPA exceeded the coordinated party expenditure limit by $15,200. 

The Commission did not approve, by the required four votes, the Audit staff’s 

recommendation. The declaration provided by DPA was consistent with the kind of 

materials the Commission has accepted as documenting volunteer activity in previous 

Commission matters. 

Pursuant to Commission Directive 7017, this matter is presented as an “Additional 

Issue.” 

17 See supra footnote 3.