Draft Final Audit Report of the 

Audit Division on the 

Connecticut Democratic State 

Central Committee 

(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 Connecticut Democratic State Central Committee is a state 

party committee headquartered in Hartford, Connecticut. 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 Other Receipts

o Transfers from Non-Federal 

Account

Total Receipts

$ 1,473,664 

1,036,328 

390,375 

339,600 

38,972 

$ 3,278,939 

• Disbursements

o Operating Expenditures 

o Allocated Federal/Non-Federal 

Expenditures 

o Other Disbursements 

o Federal Election Activity

Total Disbursements

$ 1,622,829 

194,457 

41,444 

1,292,443 

$ 3,151,173

Findings and Recommendations (p. 3) 

• Contributions from Unregistered Political Organizations 

(Finding 1) 

• Recordkeeping for Employees (Finding 2) 

• Reporting of Debts and Obligations (Finding 3) 

• Reporting of Apparent Independent Expenditures (Finding 4) 

1

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

Audit Division on the

Connecticut Democratic State 

Central Committee 

(January 1, 2017 - December 31, 2018)
Table of Contents

Page

Part I. Background

Authority for Audit 1

Scope of Audit 1

Commission Guidance 1

Part II. Overview of Committee

Committee Organization 2

Overview of Financial Activity 2

Part III. Summaries

Findings and Recommendations 3

Part IV. Findings and Recommendations

Finding 1. Contributions from Unregistered Political Organizations 5

Finding 2. Recordkeeping for Employees 8

Finding 3. Reporting of Debts and Obligations 10

Finding 4. Reporting of Apparent Independent Expenditures 12
1

Part I

Background

Authority for Audit

This report is based on an audit of the Connecticut Democratic State Central Committee 

(CDSCC), 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 contributions from prohibited sources and excessive contributions;

2. the disclosure of contributions received;

3. the disclosure of individual contributors’ occupation and name of employer;

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;

8. the disclosure of independent expenditures; and

9. 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 CDSCC 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 

CDSCC 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 CDSCC employees paid with 100 percent federal funds and reported as such.
2 

Part II

Overview of Committee 

Committee Organization 

Overview of Financial Activity 

(Audited Amounts)

Cash on hand @ January 1, 2017 $ 104,974

Receipts

o Contributions from Individuals 1,473,664

o Contributions from Political Party and Other 

Committees 1,036,328

o Transfers from Affiliated /Other Party Committees 390,375

o Other Receipts 339,600

o Transfers from Non-Federal Account 38,972

Total Receipts $ 3,278,939

Disbursements

o Operating Expenditures 1,622,829

o Allocated Federal/Non-Federal Expenditures 194,457

o Other Disbursements 41,444

o Federal Election Activity 1,292,443

Total Disbursements $ 3,151,173

Cash on hand @ December 31, 2018 $ 232,740

Important Dates

• Date of Registration May 18, 1983

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

Headquarters Hartford, Connecticut

Bank Information

• Bank Depositories One

• Bank Accounts Two Federal, One Non-Federal

Treasurer

• Treasurer When Audit Was Conducted Eloisa Melendez (03/28/19 – Present)

• Treasurers During Period Covered by Audit Michael Pohl (05/26/17 – 03/27/19)

Nathan M. Wilson (03/23/17 – 05/25/17) 

Joshua Hall (01/29/15 – 03/22/17)

Management Information

• Attended FEC Campaign Finance Seminar Yes

• Who Handled Accounting and 

Recordkeeping Tasks

Paid Staff
3

Part III

Summaries

Findings and Recommendations

Finding 1. Contributions from Unregistered Political 

Organizations

During audit fieldwork, the Audit staff identified 41 contributions from unregistered 

political organizations totaling $45,609 that may have been made with impermissible 

funds. In response to the Interim Audit Report recommendation, CDSCC materially 

complied by submitting documentation demonstrating that contributions totaling $23,691 

were transferred, refunded or permissible. CDSCC also provided documentation 

demonstrating that $17,196 of the $45,609 was for the purchase of voter files and 

therefore not contributions. CDSCC did not demonstrate permissibility for ten 

contributions from unregistered political organizations totaling $4,722. (For more detail, 

see p. 5.)

Finding 2. Recordkeeping for Employees

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

monthly payroll 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 CDSCC employees totaling $111,812 for which CDSCC did not maintain 

monthly payroll 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, CDSCC stated it “...instituted procedures to 

ensure that time records are maintained for all employees who are paid in part with nonfederal funds” and, “...employees who are paid with non-federal funds are outside the 

scope of the Commission’s jurisdiction....”. (For more detail, see p. 8.)

Finding 3. Reporting of Debts and Obligations

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

obligations to three vendors totaling $33,273. In response to the Interim Audit Report 

recommendation, CDSCC filed a Form 99 (Miscellaneous Electronic Submission) on 

June 22, 2021, disclosing the debts and obligations and correcting the public record. (For 

more detail, see p. 10.)

Finding 4. Reporting of Apparent Independent 

Expenditures

During audit fieldwork, the Audit staff reviewed expenditures totaling $140,259 that 

CDSCC disclosed on Schedule B, Line 30(b) (Federal Election Activity Paid Entirely 

with Federal Funds). These expenditures appear to be independent expenditures 

containing express advocacy and should have been disclosed on Schedule E, Line 24 

(Itemized Independent Expenditures).
4

Additionally, CDSCC did not provide documentation to support the dissemination dates, 

to verify whether 24-hour reports were required to be filed for the apparent independent 

expenditures totaling $140,259. Furthermore, CDSCC did not provide any volunteer 

documentation to support these disbursements.

In response to the Interim Audit Report recommendations, CDSCC objected to the 

characterization of these expenditures as independent expenditures and submitted a 

declaration from the production manager of “...the mail house that produced all volunteer 

exempt mail for the CDSCC.” (For more detail, see p. 12.)
5

Part IV

Findings and Recommendations

Finding 1. Contributions from Unregistered Political 

Organizations

Summary

During audit fieldwork, the Audit staff identified 41 contributions from unregistered 

political organizations totaling $45,609 that may have been made with impermissible 

funds. In response to the Interim Audit Report recommendation, CDSCC materially 

complied by submitting documentation demonstrating that contributions totaling $23,691 

were transferred, refunded or permissible. CDSCC also provided documentation 

demonstrating that $17,196 of the $45,609 was for the purchase of voter files and 

therefore not contributions. CDSCC did not demonstrate permissibility for ten 

contributions from unregistered political organizations totaling $4,722.

Legal Standard

A. Party Committee Limits. A party committee may not receive more than a total of 

$10,000 per year from any one individual. 52 U.S.C §30116(a)(1)(D), 11 CFR 

§110.1(c)(5), and 11 CFR §110.9. 

B. Organizations Not Registered With the Commission. Any organization that makes 

contributions and expenditures, but that does not qualify as a political committee 

under 11 CFR §100.5, must keep records of receipts and disbursements and, upon 

request, must make such records available for examination by the Commission. The 

organization must demonstrate through a reasonable accounting method that, 

whenever such an organization makes a contribution or expenditure, the organization 

has received sufficient funds subject to the limitations and prohibitions of the Act to 

make such contribution or expenditure. 11 CFR §102.5(b).

C. Questionable Contributions. It is the Treasurer’s responsibility to ensure that all 

contributions are lawful. 11 CFR §103.3(b). If a committee receives a contribution 

that appears to be prohibited (a questionable contribution), it must follow the 

procedures below:

1. Within 10 days after the treasurer receives the questionable contribution, the 

committee must either:

• Return the contribution to the contributor without depositing it; or 

• Deposit the contribution (and follow steps below). 11 CFR §103.3(b)(1). 

2. If the committee deposits the questionable contribution, it may not spend the 

funds and must be prepared to refund them. It must therefore maintain 

sufficient funds to make the refunds or establish a separate account in a 

campaign depository for possibly illegal contributions. 11 CFR §103.3 (b)(4). 
6

3. The committee must keep a written record explaining why the contribution 

may be prohibited and must include this information when reporting the 

receipt of the contribution. 11 CFR §103.3(b)(5).

4. Within 30 days of the treasurer’s receipt of the questionable contribution, the 

committee must make at least one written or oral request for evidence that the 

contribution is legal. Evidence of legality includes, for example, a written 

statement from the contributor explaining why the contribution is legal or 

an oral explanation that is recorded by the committee in a memorandum. 

11 CFR §103.3(b)(1).

5. Within these 30 days, the committee must either:

• Confirm the legality of the contribution; or

• Refund the contribution to the contributor and note the refund on the report 

covering the period in which the refund was made. 11 CFR §103.3(b)(1).

D. Donation of Funds to Charitable Organizations. A State, district or local 

committee may donate funds to charitable organizations organized under 501(c) that 

do not make expenditures or disbursements in connection with an election for Federal 

office, including expenditures or disbursements for Federal election activity. 11 CFR 

§300.51(a)(1).

Facts and Analysis

A. Facts

During audit fieldwork, the Audit staff identified 41 contributions, totaling $45,609, from 

unregistered political organizations, which CDSCC reported as follows: 

• 6 contributions, totaling $3,440, on Schedule A, Line 11(b) (Contributions from 

Political Party Committees) and Line 11(c) (Contributions from Other Political 

Committees);

• 11 contributions, totaling $1,360, that were not itemized on Schedule A; and

• 24 contributions, totaling $40,809, on Schedule A, Line 17 (Other Federal 

Receipts).

The Audit staff considers the receipts noted above to be contributions. CDSCC did not 

provide any documentation to demonstrate that these contributions, from unregistered 

political organizations, were made with permissible funds. Similarly, CDSCC did not 

submit any evidence to show that these receipts were not contributions. To date, none of 

these contributions have been refunded to the contributors.

There were 18 contributions from 15 of the unregistered political organizations, totaling 

$24,181, that appear to have been made from state political action committees (state 

PACs). Under Connecticut state law, state PACs are prohibited from accepting corporate 

and union contributions.

B. Interim Audit Report & Audit Division Recommendation

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

conference and provided a schedule of the receipts. The CDSCC representatives inquired 
7

about the transactions included on the list which did not require itemization. Specifically, 

they wanted to know which line number(s) these transactions were disclosed on. The 

Audit staff subsequently provided that information. In response to the exit conference, 

CDSCC stated it was still working on collecting the information. CDSCC also noted that 

Connecticut law is highly restrictive on what is permissible to receive, so it is highly 

unlikely the contributions received are anything other than that from individuals.

The Interim Audit Report recommended that CDSCC:

• Provide evidence that the 41 contributions in question were made from

permissible funds; or

• Provide evidence to show these items were not contributions; or

• Refund the impermissible funds and provide evidence of such refunds (copies of

front and back of the negotiated refund checks); or

• Transfer the impermissible funds to the non-federal account; or

• Donate the impermissible funds to a charitable organization organized under

501(c) that does not engage in the activities prohibited by 11 CFR §300.51 and

provide evidence of such disgorgement; or

• If funds are not available to make the necessary refunds or donations, disclose the

contributions requiring refunds on Schedule D (Debts and Obligations) until funds

become available to make such refunds.

C. Committee Response to Interim Audit Report

In response to the Interim Audit Report recommendation, CDSCC submitted the 

following documentation:

Contributions for which permissibility, transfer, or refund was demonstrated

($23,691)

• For ten contributions ($19,966), CDSCC submitted documentation demonstrating 

that the funds were untimely transferred to its non-federal account;

• For 11 contributions ($2,245), CDSCC provided emails from the unregistered 

organizations attesting that the donated funds originated from permissible 

sources; and

• For one contribution ($1,480), CDSCC issued a timely refund.

Receipts that were for voter file purchases and not considered contributions 

($17,196)

• For three receipts ($15,800), CDSCC submitted the reports filed with the state of 

Connecticut by the unregistered organizations, disclosing the funds were paid to 

CDSCC for voter file purchases; and

• For six receipts ($1,396), CDSCC provided the voter file agreements, confirming 

the unregistered organizations paid for voter files.

CDSCC did not demonstrate permissibility for the following contributions from 

unregistered organizations:
8

Contributions for which sufficient permissibility documentation was not provided 

($1,292)

• For seven contributions ($1,292), CDSCC provided documentation which did not 

provide evidence or attestation that the contributions were made from permissible 

sources. 

Contributions for which documentation was not provided ($3,430)

• For three contributions ($3,430), CDSCC did provide any documentation.

In conclusion, CDSCC did not address or insufficiently addressed ten contributions from 

unregistered political organizations totaling $4,722.

2 Based on the documentation 

provided, CDSCC demonstrated that $40,8873

, was transferred to the non-federal 

account, refunded or received from permissible sources, and has materially complied 

with the recommendation.

Finding 2. Recordkeeping for Employees

Summary

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

monthly payroll 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 CDSCC employees totaling $111,812 for which CDSCC did not maintain 

monthly payroll 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, CDSCC stated it “...instituted procedures to 

ensure that time records are maintained for all employees who are paid in part with nonfederal funds” and, “...employees who are paid with non-federal funds are outside the 

scope of the Commission’s jurisdiction....”. 

Legal Standard

A. Maintenance of Monthly Logs. 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% 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 non-federal 

accounts;

• Employees who spend more than 25% 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).

2

 $4,722 = $1,292 + $3,430 3 $40,887 = $23,691 + $17,196
9

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).

Facts and Analysis

A. Facts

During audit fieldwork, the Audit staff reviewed disbursements for payroll. CDSCC did 

not maintain any monthly payroll 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, CDSCC did not maintain monthly logs 

for $111,812 in payroll.4 This amount consisted of:

• Payroll totaling $74,684 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 $4,364 for employees reported on Schedule H4 (Disbursements 

for Allocated Federal and Non-Federal Activity) and also paid with 100 percent 

non-federal funds during the same month; and

• Payroll totaling $32,764 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 CDSCC representatives during the exit 

conference and provided a schedule of the payroll transactions. The CDSCC 

representatives stated that “the Commission did not have four votes to include the nonfederal payroll as part of a recordkeeping finding and excised that portion of payroll 

spending from its findings.” The Audit Division has consistently 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, CDSCC did 

not provide any further comments.

The Interim Audit Report recommended that CDSCC provide evidence that monthly time 

logs were maintained to document the percentage of time an employee spent in 

connection with a federal election; or provide and implement a plan to maintain monthly 

payroll logs in the future.

C. Committee Response to Interim Audit Report

In response to the Interim Audit Report recommendation, CDSCC stated it “...instituted 

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

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

4

 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.
10

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

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

The Audit staff concludes that CDSCC did not provide monthly payroll logs for the 

$118,812 in payroll. However, CDSCC complied with the Interim Audit Report 

recommendation by implementing a plan to maintain monthly payroll logs for all 

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

The Audit staff maintains that CDSCC was required to maintain payroll logs for its 

employees paid with exclusively non-federal funds. Absent the provision of monthly 

logs specific to employees paid with exclusively non-federal funds, CDSCC may 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, for employees paid with exclusively non-federal funds, CDSCC may also 

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

11 CFR §104.14(b)(1).

Finding 3. Reporting of Debts and Obligations

Summary

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

obligations to three vendors totaling $33,273. In response to the Interim Audit Report 

recommendation, CDSCC filed a Form 99 (Miscellaneous Electronic Submission) on 

June 22, 2021, disclosing the debts and obligations and correcting the public record. 

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. 11 CFR §104.11(b).

Facts and Analysis

A. Facts
11

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

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

debts owed to three vendors totaling $33,2735 that CDSCC failed to report on Schedule 

D during the audit period. Based on a review of the records, these vendors provided

health insurance, consulting services and a venue for fundraising events. CDSCC 

reported debt totaling $25,248 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 31 days to 105 days.

B. Interim Audit Report & Audit Division Recommendation

The Audit staff discussed this matter with CDSCC representatives at the exit conference 

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

CDSCC representatives stated:

• The payments made to two vendors represented recurring expenses because they 

were paid monthly. The Audit staff explained that, according to the vendor 

invoices CDSCC provided, all of the payments to these two vendors were 

outstanding for more than 30 days. Some of the invoices included annotations 

stating that the services would be cancelled if the past due balances were not paid. 

• The three payments to the third vendor were all paid within 30 days. The Audit 

staff explained that one of the three payments was made timely, however, the 

amount paid was less than the invoiced amount. Therefore, the remaining unpaid 

balance appears to have been outstanding and should be disclosed as debt, unless 

CDSCC can clarify otherwise. The remaining two payments to this vendor, 

according to the contractual agreement provided by CDSCC, were outstanding for 

more than 30 days. 

In response to the exit conference, CDSCC reiterated that it believed the payments to two 

vendors mentioned above, represented monthly payments, however, CDSCC provided no 

additional documentation to support that assertion. With regards to the third vendor, 

CDSCC provided new documentation demonstrating that the remaining outstanding 

balance for the partial payment was made timely. As a result, this amount was deducted 

from the overall undisclosed debt balance discussed at the exit conference and is not 

included in this finding. CDSCC did not provide additional comments on the remaining 

outstanding balances for the vendors.

The Interim Audit Report recommended that CDSCC provide additional documentation 

demonstrating that the transactions totaling $33,273 were not obligations which required 

reporting on Schedule D. Absent such documentation, the Interim Audit Report 

recommended that CDSCC amend its reports or file a Form 99 (Miscellaneous Electronic 

Submission)6 to correctly disclose these debts and obligations.

5

 Each debt in this amount was counted only once, even if it was required to be disclosed over multiple 

periods. 6

 The Audit staff advised CDSCC 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.
12

C. Committee Response to Interim Audit Report

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

(Miscellaneous Electronic Submission) on June 22, 2021, disclosing the debts and 

obligations and correcting the public record. 

Finding 4. Reporting of Apparent Independent 

Expenditures

Summary

During audit fieldwork, the Audit staff reviewed expenditures totaling $140,259 that 

CDSCC disclosed on Schedule B, Line 30(b) (Federal Election Activity Paid Entirely 

with Federal Funds). These expenditures appear to be independent expenditures 

containing express advocacy and should have been disclosed on Schedule E, Line 24 

(Itemized Independent Expenditures).

Additionally, CDSCC did not provide documentation to support the dissemination dates, 

to verify whether 24-hour reports were required to be filed for the apparent independent 

expenditures totaling $140,259. Furthermore, CDSCC did not provide any volunteer 

documentation to support these disbursements.

In response to the Interim Audit Report recommendations, CDSCC objected to the 

characterization of these expenditures as independent expenditures and submitted a 

declaration from the production manager of “...the mail house that produced all volunteer 

exempt mail for the CDSCC.” 

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 
13

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 Line 30(b) on Schedule E. 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 each time 

additional independent expenditures aggregate $1,000 or more. 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).

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 costs incurred in connection with any broadcasting, 

newspaper, magazine, billboard, 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.
14

• 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.

• 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).

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 CDSCC did not disclose any independent 

expenditures on Schedule E, however, it made apparent independent expenditures 

totaling $140,259, and disclosed them on Schedule B, Line 30(b) (Federal 

Election Activity Paid Entirely with Federal Funds). These expenditures were for 

two fundraising mailers and a mail piece disclosed as “mailer-door hanger,”

which all contained express advocacy. A breakdown analysis for these 

expenditures is as follows:

a. Apparent Independent Expenditures Reported as Federal Election 

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

Provided under 11 CFR §100.22(a))

CDSCC made one disbursement for a mail piece totaling $3,281 for which it

provided a copy of the mail piece with an associated invoice and a 

corresponding cancelled check. The mail piece, disclosed as “mailer-door 

hanger” on CDSCC’s disclosure reports, contained the following phrases:

“Your Row A Democrats are teaming up to stop Trump; Vote Row A 

Tuesday, Nov. 6.” This communication contained language expressly 

advocating the election or defeat of a clearly identified candidate, as defined 

under 11 CFR §100.22(a).

b. Apparent Independent Expenditures Reported as Federal Election 

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

Provided under 11 CFR §100.22(b))

In 2018, CDSCC made three equal payments of $68,489 to a vendor, for three 

separate mailers and reported them as Federal Election Activity on Line 30(b). 

The Audit staff’s review of the disclaimers annotated on the mailers indicated 
15

that one of the mailers appeared to have been coordinated with a candidate 

committee. As such, this mailer is not included in this finding.

For the remaining two disbursements, totaling $136,9787, CDSCC provided 

copies of the mailers with associated invoices and cancelled checks. Each of 

the two mailers had a picture of the candidate, along with his name, displayed 

either directly above or on the same page as the phrase: “Vote November 6th”

and “Vote Tuesday, November 6th.” Based on the definition of express 

advocacy under 11 CFR §100.22(b), the Audit staff believes that these mailers 

could only be interpreted by a reasonable person as advocating the election or 

defeat of a clearly identified candidate.

2. Interim Audit Report & Audit Division Recommendation

The Audit staff discussed this matter with the CDSCC representatives during the 

exit conference and provided a schedule detailing these expenditures. The 

CDSCC representatives stated that none of the three expenditures detailed in the 

schedule, totaling $140,259, were independent expenditures. CDSCC further

indicated that the description of one of the mailers in its database, the “mailerdoor hanger”, could have created confusion. In response to the exit conference, 

CDSCC stated the following:

• One of the mailers totaling $68,489, was intended to be a coordinated 

expenditure and CDSCC acknowledged that its report should be amended 

to disclose this expenditure on Schedule F (Coordinated Expenditures);

• The second mailer also totaling $68,489, was intended to be a volunteer 

exempt mailing and was properly reported on Line 30(b). Although 

CDSCC could not locate any documentation to demonstrate volunteer 

involvement, CDSCC stated that it was aware of individuals who “could 

attest that volunteers were present.” However, CDSCC stated that “the 

combined spending on these two mailings [to] sic not exceed the 

coordinated expenditure limits ... Therefore, requiring us to expend the 

effort to demonstrate the volunteer activity should not be a necessary use 

of our time;” and

• The reported “mailer-door hanger” totaling $3,281 was not an independent 

expenditure and was properly disclosed on Line 30(b).

The Audit staff maintains that the three mailers discussed above are independent 

expenditures for the following reasons:

• CDSCC stated that one of the mailings totaling $68,498 was intended to 

be a coordinated expenditure. This coordinated expenditure should have 

been disclosed on Schedule F. As mentioned above, the cost of this

coordinated mailer is not included in this finding. 

• The remaining two mailers, each totaling $68,489, contained express 

advocacy and appear to be independent expenditures. In its response, 

7

 $136,978 = $68,849 + $68,849
16

CDSCC stated that one of those mailers was intended as a volunteer 

exempt mailing. However, CDSCC did not present any documentation to 

support that volunteers participated in exempt activity.

• Likewise, the reported “mailer-door hanger” also contained express 

advocacy and appears to be an independent expenditure.

The Interim Audit Report recommended that CDSCC:

• Provide documentation that apparent independent expenditures, totaling 

$140,259, did not require reporting as independent expenditures; and/or

• Provide evidence to support the volunteer material exemption application for 

one mailer, totaling $68,489. 

Absent such documentation or evidence, the Interim Audit Report further 

recommended that CDSCC 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, CDSCC objected to the 

characterization of these expenditures as independent expenditures. CDSCC 

stated that, “[T]hese expenditures were properly made as exempt activities and 

were fully coordinated with the Senate candidate.” 

Regarding the mailing activities, CDSCC maintained that “these mailings were 

undertaken in accordance with the volunteer activity exemption in accordance 

with 11 C.F.R. §§100.87 & 100.47.” CDSCC provided a declaration from its 

“mail house” production manager during the audit period and stated that the 

declaration “confirms that volunteers were present during the production of all 

mailings in connection with the CDSCC’s exempt mailings on behalf of its 

nominee for United States Senate and performed adequate volunteer activities 

consistent with prior Commission precedent.” CDSCC 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 door hanger, CDSCC stated it was its understanding that “since 

these activities were not public communication, they cannot be considered 

coordinated communications and no further action would be necessary regarding 

these expenditures.” CDSCC also noted that the door hanger was distributed by 

volunteers, however, it did not provide any documentation to support its assertion.

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

the Audit staff is unable to determine whether the declaration submitted by 

CDSCC suffices to document the involvement of volunteers. Additionally, the 

independent expenditure definition is not limited to “public communications” as 

defined in 11 C.F.R. § 100.26. As such, it is not necessary for the door hanger to 

be a public communication in order to be classified as an independent 
17

expenditure. The Audit staff, therefore, considers the reported “mailer-door 

hanger” an apparent independent expenditure. 

B. Volunteer Material Exemption

1. Facts

CDSCC reported three disbursements totaling $140,259 on Schedule B as Federal 

Election Activity. CDSCC reported the purposes of these disbursements as

“mailer- Chris Murphy mailer- exempt” and “mailer-doorhanger.” The invoices 

for two of these disbursements were annotated as “Design, Production, and 

Postage” while the third invoice was annotated as “Joint doorhanger; CT Dems 

Copywriting, creative design, production, management.” CDSCC, however, did 

not provide any volunteer documentation or evidence 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 exemption8

, but this was never 

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

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 the CDSCC representatives during the 

exit conference and provided a schedule detailing these expenditures. In response 

to the exit conference, CDSCC representatives stated that one mailing “was 

intended to be done as a volunteer exempt mailing and was properly reported on 

Line 30(b).” Although CDSCC could not locate any documentation to 

demonstrate volunteer involvement, CDSCC stated that it was aware of 

individuals who “could attest that volunteers were present.” However, CDSCC 

stated that “the combined spending on these two mailings [to] sic not exceed the 

coordinated expenditure limits.... Therefore, requiring us to expend the effort to 

demonstrate the volunteer activity should not be a necessary use of our time.” 

The Interim Audit Report recommended CDSCC provide documentation and 

evidence that apparent independent expenditures totaling $140,259 did not require 

reporting as independent expenditures. Evidence should have included

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 

8

 Proposed Interim Enforcement Policy, Agenda document No. 10-16.

 https://www.fec.gov/resources/updates/agendas/2010/mtgdoc1016.pdf
18

distributing the communication. Absent such evidence, the Interim Audit Report 

recommended that CDSCC 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, CDSCC submitted a 

declaration from its “mail house” production manager, as addressed in Part A 

above. Due to the lack of a clear standard for applying the volunteer materials 

exemption, the Audit staff is unable to determine whether the declaration 

submitted by CDSCC suffices to document the involvement of volunteers.

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

1. Facts

In addition to not reporting the apparent independent expenditures totaling 

$140,259 identified above, CDSCC did not file any 24-hour reports9

, which may 

have been required. 

2. Interim Audit Report & Audit Division Recommendation

The Audit staff discussed this matter with the CDSCC representatives during the 

exit conference and presented a schedule detailing these expenditures. The 

CDSCC representatives stated that none of the three expenditures were 

independent expenditures and indicated that the description of one of the mailers 

could have created confusion.

The Interim Audit Report recommended that, absent documentation that the 

apparent independent expenditures, totaling $140,259, did not require reporting as 

independent expenditures (per Part A above), CDSCC 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, CDSCC did not address 

the 24-hour reports but submitted a declaration from its “mail house” production 

manager, as addressed in Part A above. The Audit staff maintains that CDSCC 

failed to file 24-hour reports.

9 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.