i ^ O^RAL ELECTIOii 

COMMISSION 

SECRETARIAT 

FEDERAL ELECTION COMMISSION 

WASHINGTON, D.C. 204(i.l 

Jun e 5 , 2013 

SINSITiVE 

MEMORANDUM 

TO: The Commission 

FROM: Lisa J. Stevenson 

Deputy General Counsel - Law 

Lorenzo Holloway 

Assistant General Counsel 

Compliance Advice 

Margaret J. Forman '^'^ \ ^ 

Attomey ^ 

SUBJECT: Request for Consideration of a Legal Question - Elizabeth Crowley for Congress 

(LRA 932) 

I. INTRODUCTION 

On May 7, 2013, the Commission received a Request for Consideration of a Legal 

Question ("Request") from counsel on behalf of Elizabeth Crowley for Congress (the 

"Committee*') (C005i 7359), the principal campaign committee of Elizabeth Crowley.' 

Attachment. 

The Request addresses a determination by the Reports Analysis Division (RAD), based ori 

informal guidance provided by the Office of General Counsel (OGC), that the Federal Election 

Campaign Act and the Commission's regulations do not allow for redesignation of contributions 

received for the general election to a non-federal committee if the candidate does not participate in 

the general election. After the candidate lost the 2012 New York primary election, the Cpmmittee 

' Al leasi two Commissioners agreed to consider this Request pursuant to the Policy Statement Regarding a 

Program for Requesting Consideration of Legal Questions by the Commission, 76 Fed. Reg. 4579^-45799 (Aug. 1 

2011). The Committee's request was technically not timely, but nevertheless, we recommended that the Comniission 

consider it. Although the request was pcsimarked within 15 business days of the determination of corrective action, 

the request was not received by the Commission within the 15 business days, as required pursuant to the 

Commission's policy, /rf. at 45799. 
Memorandum to the Commission 

Request for Consideration of a Legal Question- Elizabeth Crowley (LRA 932) 

Page 2 

redesignated $19,950 in general election contributions to the candidate's non-federal committees. 

When RAD first inquired about these transactions, the Committee responded that the 

Commission's failure to reach a conclusion on the issue in Advisory Opinion 2012-06 (Rick 

Perry.org) means that such activity is not prohibited and that, as a matter of policy, the 

redesignation regulations "should be construed broadly to encompass any future election," 

including a non-federal election. Elizabeth Crowley for Congress Miscellaneous Text, Image # 

12963777032 (Dec. 20, 2012). RAD then sought guidance from OGC as to the Committee's 

response. In addition to concluding that the Committee cannot redesignate the contributions to a 

non-federal committee, the Office of General Counsel advised RAD that the Committee cannot, as 

a legal matter, rely on an advisory opinion to the extent that the Commission has not reached a 

conclusion on an issue. 

The issue presented in the Request is whether "11 C.F.R. [§] 110.1(b)(5) permits the 

redesignation of contributions received in connection with the 2012 General Election by the 

authorized campaign committee of a candidate for the House of Representatives, after losing the 

Primary Election, to non-federal campaign committees of the same candidate upon obtaining 

authorization fi-om contributors." Attachment at 1. Consistent with our informal advice to the 

Reports Analysis Division, we conclude that 11 C.F.R. §§ 102.9(e), 110. l(b)(3)(r) and (5) do not 

permit the redesignation of contributions received by an authorized committee for the general 

election to a candidate's non-federal campaign committee. 

ll. CONTRIBUTIONS MADE FOR A GENERAL ELECTION IN WHICH THE 

CANDIDATE DID NOT PARTICIPATE MAY NOT BE REDESIGNATED TO A 

CANDIDATE'S NON-FEDERAL COMMITTEE 

The Commission's regulations provide that "[i]f the candidate is not a candidate in the 

general election, all contributions made for the general election shall be either retumed or refunded 

to the contributors or redesignated in accordance with [11 C.F.R § 110.1(b)(5) or 11 C.F.R. 

§ 110.2(b)(5)]." 11 C.F.R. §§ I I0.1(b)(3)(i). Consistent with certain conditions, the redesignation 

regulations allow treasurers of authorized committees to "request a written redesignation of a 

contribution by the contributor" - but only "for a different election:"' 11 C.F.R. § 110. l(b)(5)(i) 

(emphasis added). 

Commission regulations define "election" as "the process by which individuals .. . seek 

nomination for election, or eleclion, to Federal office:' 11 C.F.R. § 100.2(a) (emphasis added). 

Some of the core provisions of the Federal Election Campaign Act and the Commission's 

regulations focus on the use of money or anything of value to influence Federal elections. See 

2 U.S.C. § 431 (8) ("contribution" includes ... anything of value made by any person for the 

purpose of influencing any eleclion for Federal office) (emphasis added); 

* The Commission established these "procedures [to allow] political committees [to] seek and obtain from 

contributors redesignations ... of certain contributions that would otherwise be illegal." Explanation and Justification 

for Final Rules on Contribution and Expenditure Limitations and Prohibitions; Contributions by Persons and 

Multicandidate Committees, 52 Fed. Reg. 760 (Jan. 9, 1987). "[B]y allowing redesignation, the Commission [was] 

attempting to encourage candidates to pay their campaign debts by elitninating the need to refund impermissible 

contributions and then solicit contributions for another election." Id. at 763. 
Memorandum to the Commission 

Request for Consideration of a Legal Question- Elizabeth Crowley (LRA 932) 

Page 3 

2 U.S.C. § 44la(a)(l)(A) (limits the amount that may be contributed 'with respect to any election 

for Federal office') (emphasis added); see also 11 C.F.R. § 100.3(a) (limiting the definition of 

"candidate" to those seeking "nomination for election, or election, lo Federal office"); 

11 C.F.R. § 110.1 (b) ("no person shall make contributions to any candidate ... with respect to any 

election for federal office that, in the aggregate, exceed $2,000"); 11 C F R. § 110.1 (b)(2)(ii) 

("with respect to any election means ... in a case of a contribution not designated in writing by the 

contributor for a particular election, the next election for that Federal office after the contribution 

is made"); Hillary Clinton for President audit, Memorandum to the Commission on Electronic 

Redesignation of Contributions/Date of Withdrawal (LRA 726) (Feb. 4, 2010); and Commission 

Certification of Electronic Redesignation of Contributions/Date of Withdrawal, Hillary Clinton 

for President (C00431569) (LRA 726) (Apr. 27, 2010) (determining that an authorized committee 

could redesignate general election contributions of a candidate who was unsuccessful in the 

primary election to another authorized federal committee of that candidate). 

Here, the Committee cannot redesignate the contributions because Ms. Crowley is not a 

candidate for a different Federal election, nor does the Committee have net debts outstanding in its 

primary election accounts from the previous election. 11 C.F.R. §§ 100.2(a), 110.1(b)(5). 

Similarly, reattribution of the contributions under 11 CFR § 110.1 (k) would encounter the same 

Federal election limitations. Accordingly, the only remaining legal means available to the 

Committee of disposing of the contributions in the general election account is to refund them. As 

the Commission previously explained, these contributions, if not redesignated or reattributed 

within the meaning of 11 CFR 110.1 (b)(5) and (k), are "not... permissible campaign fiinds" and 

therefore must be reftinded. Advisory Opinion 2003-18 (Smith) at 3 (addressing contributions 

received during the primary election that were specifically designated for the general election by a 

candidate who did not participate in the general election); see 11 C.F.R. § 110.1(b)(5). Because 

Ms. Crowley was defeated in the primary election, she never became a candidate for the general 

election, and consequently, no separate contribution limit with respect to the general election was 

available to contributors, ^ AO 2003-18 (Smith) at 3. 

The Committee seems not to dispute that the fimds must be refunded, redesignated or 

reattributed. Indeed, it undertook the process to gain contributor authorization to move the fiinds 

to Ms. Crowley's non-federal carnpaign committees. The Committee explained that it was 

"efficiently [combining] the process of issuing refunds of all General Election contributions and 

resoliciting new [nonfederal] election contribution from those same contributors. It is very clear 

that had those steps not been combined into one that the Committee would not be subject to the 

current compliance inquiry.'- Attachment at 3. But refunding the contributions is significantly 

different from the act of redesignating the contributions, When a contribution is refunded it has 

the potential of no longer influencing a Federal election, while a reattribution Or redesignation of a 

The Commiltee received contributions designated for the general election from contributors who had made 

their aggregate allowable contribution to the candidate with respect to the primary election. Accordingly, because no 

separate contribution limit with respect to the general election was available to contributors, the general election 

contributions became excessive contributions and the Committee was required to re^nd them within 60 days of the 

primary election date. Advisory Opinion 1992-15 (Russo); Advisory Opinion 2003-18 (Smith). 
Memorandum to the Commission 

Request for Consideration of a Legal Question- Elizabeth Crowley (LRA 932) 

Page 4 

contribution still influences a Federal election."* 2 U.S.C. §§ 431(8), 441a(a)(l)(A); Cf 

Explanation and Justification for Contributions to candidates; designations; and redesignations, 52 

Fed. Reg. 760, 761 (Jan. 9, 1987) ("The approach [in applying the net debts rule] embodied in 

§110.1(b)(3) is based on the Commission's interpretation of specific statutory language ... 

[including] 'contribution' as being *for the purpose of influencing any election for federal office.' 

2 U.S.C. § 431 (8)). As discussed above, the only legal option available to the Committee to 

dispose of the contributions in the general election account was to reftind them. 11 CF.R. 

§§ 102.9(e), 110.1 (b)(3)(i) and (5). We conclude, therefore, that to the extent that the Committee 

redesignated contributions received for the general election to any non-federal committee, it has 

accepted campaign funds that were impermissible under the Act. 

Finally, the Committee asserts that it "relied on ... Advisory Opinion 2012-06 which 

addressed a materially indistingiiishable set of facts." Attachment al 3. The Committee cannot 

rely on Advisory Opinion 2012-06 (RickPerry.org) because, in that advisory opinion, the 

Commission "could not approve a response [lo whether an authorized commitiee could

redesignate its general election contributions lo a non-federal campaign committee] by the 

required four affirmative votes." Advisory Opinion 2012-06 at 4.^ The proteclioiis of 2 U.S.C. § 

437f(c) are conditioned on an advisory opinion being "rendered by the Commission under 11 

C.F.R. part 112." 11 C.F.R. § 112.5(a). A written response by the Commission that il was unable 

to approve an advisory opinion by the required four affinnative votes is not.a written advisory

opinion in accordance with 11 C.F.R. part 112. 11 CF.R. §§ 112.4(a), (e).

 ^ 

 I 

 | 

i 

III. RECOMMENDATION 

The Office of the General Counsel riecommends that the Commission conclude that 

11 CF.R. §§ 102.9(e), 110.1(b)(3)(i) and (5) do not permit the redesignation of contributions 

received by an authorized committee for the general eleclion in which a candidate does not 

participate to a candidate's non-federal campaign committee. 

Attachment 

Request for Legal Consideration from Elizabeth Crowley for Congress. 

•* The contributor who receives a refund may use the refund amount for any puipose, incjuding making a 

contribution to a candidate's federal or non-federal committee to the extent perrnitied by law. To the extent that a 

contributor uses the refund proceeds to make another federal contribution, the contributor is influencing a federal 

eleclion. 2 U.S.C. if 431(8). 

* During the Commission's consideration of Advisory Opinion 2012-06 in open session, some 

Commissioners discussed a possible rulemaking that would allow redesignations to non-federal committees. FEC 

Open Session, March 22, 2012, audio link available at http.//www.fec.eLOv/agenda/2012i^agenda20l20322.shtml. To 

date, however, the Commission has not opened a rulemaking on this issue. 
PITTA & GIBLIN LLP ''"ilSIr 

I I I /-A ^ wiL^L.M N uur - SECRETARIAT 

Attorneys at Law 

2013 HAY - 7 PM 2 : 5 2 120Broadway 

28*^ Floor 

New York. New York 10271 

Telephone: (212) 652-3890 

Pacsimae: (212) 652-3691 

Vito R. Pitta 

AtBociate 

Direct Dial: (212)652.3881 

viPitta@oiHaQiblin.com 

April 29, 2013 

Via Certified Mail 

Commission Secretary 

Federal f-lcction Commission 

999 F. Street, NW 

Washingion. DC 20463 

Re: Elizabeth Crowley for Congress 

Request for Consideration of a Legal Question 

Dear Commissioners: • 

We submit this Request for CbnsiderBtion of a Legal Question op behalf of Elizabeth 

Crowley for Congress ("Committee") regarding certain redesignations of contributions received 

in connection with the 2012 General Election for New York's 6'** Congressional District. 

Wl- request consideration by the I-ederal Election-Commission ("FEC" or''Commission") 

of ihc lo'.lowing legal question: 

ll-'heihiT FEC regulation U CFR 11 O.I fh)(5) permits the redesignation of contributions 

' cctfiyvu in \:v.'itui.t!on w///; General Eiei/ion b.y ihe uuthunced cp.'<^f.'ui};r4 comhhliei of 

a candidate for the House of Rtpre.sentaiives. after losing the Primary Election, to non-federal 

vamp'.-ign committees of the same candidate upon obiaining authorization from contributors? 

Ms. Crowley was a candidate for the 2012 Primary Election'for the (i^ Congressional 

Distri-i of New York. While a candidate for the House of Representatives. Ms. Crowley was also 

an eltvted Member of the New York City Council in New York City's 30'** Council Districi and 

the eiecicd female District Leader in New York Slate's BS'** Assembly Districi. Prior to 

begiriTiing her congressional candidacy, Ms. Crowley had anticipated running for reelection as 

both Member of the New York City Council (in the 2013 elections) and Dislrict Leader (in the2012 vleciions); in order to support of both of those candidacies, Ms. Crowley had previously 

csiablis.hed local campaign commitlees, lhat were registered with and reported to local campaign 

financi: regulatory bodies. 

Attachment, page 1 of 5 

(OOi5<»5l 3 IKiC J 
Federal HIeclion Commission 

April 2013 

Page 2 

In order to support her federal candidacy, Ms. Crowley's authorized campaign committee 

accepted contributions for both the 2012 Primary and General Elections, in accordance with the 

restriclions imposed on such contributions by the Federal Campaign Finance Act ("FECA") and 

FEC's regulations. After losing the Primary Election, Ms. Crowley terminated her federal 

candidacy, and the Committee undertook a winding down of its operations. One part of such 

windini; down was the disposition of conlributions accepted by the Committee for the General 

Election. 

Pursuant to FEC Regulation 11 CFR i02.9(e)(3), once Ms. Crowley lost the Primary 

Election, she was prevented from being a candidate for 6lh Congressional District in the General 

Lilccilv/M, and the conlributions she received in anticipation of ihat candidacy needed to be 

refunded, redesignated in accordance with 11 CFR IIO.Ub)(5). or reattributed in accordance 

with 11 CTR ll0.1(k)(3). 

With respect to the contributions the Committee had received fpr the General Election, 

ihe Committee: 

1) contacted each contributor; 

2) notified the contributor of the impending termination pf the Comminee; and 

3 ) offered the contributor the option of a refund of his or her contribution or the ability 

to redesignate the contribuiion to a different (New York State) election. 

As previously indicated, Ms. Crowley, at the time of the refunds and redesignations, was 

a candidate for New York State district leader in the September, 2012 New York State 

democraiic primary election and was an incumbent Member of the New York City Council, 

eligible lor reelection in 2013. For contributors that chose to redesignate their contributions to a 

different eleclion, the Committee obtained signed auihorizalion forms thai expressly authorize 

such redesignations. 

Indeed, several of the instant redesignated contributions were in fact contributions, 

orig:n/;lly made to »Ms. Crowley's New York City C-Duncil campaign aCvOuriJ that v.'sre rct'und^:u 

from that account to the contributors and then resolicited for contribution to fhe federal campaign 

account. After the Ms. Crowley's defeat in the Primary Election, those contributions were 

redesiy.naied to those very same contributors, after obiaining iheir authorization. Clearly, both 

from i.'ie fact that several of the redesignated conlributions were originally made lo the nonfedera! campaign accounts to which they were redesignated subsequent lo the Primary Election, 

and from the fact lhat the campaign obtained authorization from each contributor before 

redesignaiing his or her contribuiion to one of Ms. Crowley's non-federal campaign account, the 

campaign never converted conlributions it received for the General Election to a use not 

anticipated or authorized by the contributors. 

Attachment, page 2 of 5 
Federal Election Commission 

April 2^, 2013 

Page 3 

The Committee never treated the contributions designated for the General Election as the 

Committee's funds. At all times. General. Election funds were segregated from Primary Election 

funds, not used in connection with the Primary Election, and not converted to personal use. 

Indeed, by contacting contributors, offering them a refund, and seeking affirmaiive authorization 

of any redesignation. the Committee believed itself to be in full compliance with FEC 

regulations. Ultimately, contributions totaling $16,252 were refunded lo contributors thai have 

requested refunds. Eight contributions, totaling $19,950 were redesignated lo different slate and 

local eleclion campaign accounts of Ms. Crowley. 

In effect the Commiltee took steps to efficiently combine the process of issuing refunds 

of all Cieneral Eleclion contributions and resoliciting new state and local election contributions 

from those same contributors. It is very clear that had those steps not been combined into one 

that the Coinmittee would not be subject to the current compliance inquiry. Attached to this 

submi.«;sion is a chart ("Exhibit A") lhat shows which conlributions were refunded and which 

contributions were redesignated to the candidate's state and local campaign committee accounts. 

Should you need any additional backup documentation demonstrating the refunds, written 

authorizations for redesignation, and transfer of funds, the Commiltee is happy to provide il. 

Should the Commission determine that the redesignations were nol permissible; the 

Committee would request the ability lo reverse the transactions and cure anylhing that the 

Commission believes to be a violation. Ms. Crowley was a first time candidate that acted in good 

faith in attempting to adhere to FEC regulations. Indeed, in its effort lo comply with the law and 

regulations, the Committee relied upon FEC Advisory Opinion 2012-06 which addressed a 

materially indistinguishable set of facts. The Opinion was in response to a request from 

Rickperry.org. In Advisory Opinion 2012-06, the FEC, considering redesignations of 

contributions accepted for the Presidential General Election to Governor Perry's state campaign 

commiltee, chose not lo prohibit the course of action. Beyond the FEC's Advisory Opinion 

2012-06, we believe the procedure implemented by the Committee comports with FECA and 

FEC regulations, as well as the policy that governs ihcm. The FEC has expressly acknowledged 

that redesignations to federal campaign committees for future elections for federal office are 

permi.isible. See Advisors' Opinion 2008-04. There is nothing in FECA oi in FEC regulations 

that requires a redesignation to a campaign committee for state office be treated differently. 

FEC regulation 11 CFR 102.9(e)(3) provides, "If a candidaie is not a candidate in the 

general election, any conlributions made for the general election shall be refunded to the 

contribuiors, redesignated in accordance wilh 11 CFR 110.1(b)(5) or 110.2(h)(5), or reattributed 

in accordance with 11 CFR Il0.1(k)(3), as appropriate." Although FEC regulations defme 

eleclion as one for federal office, the rationale for the above-cited regulation suggests that, in the 

context of a redesignation (i.e. obtaining the express authorization of the original contributor to 

use funds contributed for a different election), "election" should be construed broadly to 

encompass any future eleclion. 

Attachment, page 3 of 5 

((W554.^iji)C;c/ \ 
Federal Election Commission 

April 29, 2013 

Page 4 

Thank you in advance for your consideration of this matter. 

Respect|i*H7^bmiued, 

VRP/mw 

End. 

Attachment, page 4 of 5 

|O0J545I.UX-)C.' ) 
EXHIBIT A 

Refunded Contributions Made 

$1,500 to Mr. John Farrell 

$500 tolUPAT PAC 

$1.752 to Mr. Brendan Murray 

$2,500 to UFA Federal FIREPAC 

$5,000 to NYS Laborers PAC 

$2,500 to Sheet Metal Workers Local 28 PAC 

$2,500 to Sheet Metal Workers Inlcma.tional Union P.AC 

Conirihuiinns Redesignated lo FriPnds of r'Uzfibeih Cn/wley 

$4,500 from lUPAT PAC 

$:,50C from UFA Federal F'REPAC 

$ 1.000 from Metal Lathers Local 46 PAC 

Contributions Redesignated to Elizabeth Crowley 2013 

1 $2,500 from Mr. James 

1 Nederiandcr 

r$2.500 from Mr. James Bell Contributor had previously contributed to NYC Council campaign 

account and $2,500 was refunded to contributoanr d resolicited by 

FEC campaign account 

$2,500 from Mrs. Margaret Bell Contributor had previously contributed to NYC Council campaign 

account and $2,500 was refunded to contributoanr d resolicited by 

FEC campaign account 

$1,000 from Mr. John Fanrell Contributor had previously contributed to NYC Council campaign 

account and $2,500 was refunded to contributoanr d resolicited by 

FEC campaign accounl. 

$1,500 from Mr. John 

Ropp.'^jjon 

$1,950 from Metal Lathers Contributor had previously contributed to NYC Council campaign 

L ocal d6 PAC account and $2,500 was refunded to contributor and resolicited by 

FEC campaign account. 

. Attachment, page 5 of 5 

{U053451 > l)OCr I