f^.;--n\'ISS!OM 

FEDERAL ELECTION COMMISSION 'O-' 02 

WASHINC^TON. D.C. :;()4h;i 

MEMORANDUM 

March 28, 2014 

^nvE 

TO: The Commission 

FROM: Lisa J. Stevenson 

Deputy General Counsel - Law 

Lorenzo Holloway '/jM 

Assistant General Couns» 

Compliance Advice 

Joshua Blume 

Attorney 

SUBJECT: Request for Consideration of a Legal Question (LRA # 946) 

I. Introduction 

A. Factual Background and Brief Statement of Conclusion 

On March 4,2014, the Commission received a Request for Consideration of a Legal 

Question ("Request") from counsel on behalf of the Oakland County Democratic Party ("OCDP" 

or "Committee"), a local committee of a political party that the Commission voted to audit 

pursuant to 2 U.S.C. § 438(b).' See Attachment 1. 

The Request addresses a proposed audit finding pertaining to the requirement in 2 U.S.C. 

§ 432(c) and 11 C.F.R. § 102.9(a) that treasurers of political committees keep an account of all 

contributions received by or on behalf of such committees and, in particular, that they keep an 

account of the names and addresses of any person who makes any contribution in excess of $S0, 

together with the date and amount of the contribution by that person. 

The issue presented in the Request is how the requirement to keep particularized 

information for contributions received in excess of SSO applies to revenue the Committee 

received during twice-weekly bingo nights that the Committee held for the purpose of raising 

funds to influence Federal elections. 

At least two Commissioners agreed to consider this Request pursuant to the Policy Statement Regarding a 

Program for Requesting Consideration of Legal Questions by the Commission, 78 Fed. Reg. 63203 (Get. 23,2013). 
Memorandum to Commission 

Oakland County Democratic Party - LRA 946 

Page 2 of7 

Because the Committee conducts three different kinds of gaming activity that are 

independently regulated by the state of Michigan during each bingo night, and contributors may 

choose the activities in which they wish to participate, the Committee asserts that each "bingo 

night" consists of three separate fundraising "events," rather than a single event, for the purpose 

of applying certain advisory opinions, discussed more fully below, interpreting the abovementioned recordkeeping requirement. In particular, the Committee argues that the Commission 

should defer to the definition of "event" under Michigan's state gaming law for the purpose of 

applying its federal recordkeeping obligations. 

The Committee's characterization of its bingo nights as consisting of three separate 

fundraising events affects the amount of information the Committee was required to preserve in 

its records. If the Committee's characterization were to be upheld, then the names and addresses 

of contributors whose contributions for each of the three events is below SSO, but whose total 

contributions for the evening are above SSO, would not be maintained in the Committee's 

records.^ 

The Commission recently addressed this subject in the context of a memorandum that our 

office and the Office of Compliance submitted under Commission Directive 69. We 

recommended that the Commission consider a bingo night to be a single fundraising event based 

on our analysis of the application of Advisory Opinions 1980-99 (Republican Roundup 

Committee) and 1981-48 (Muskegon County Republican Party) to the facts. On January 28, 

2614, the Commission voted unanimously to conclude that the Committee's bingo nights did not 

constitute three separate fundraising events, and, instead, the Committee was required to itemize 

all contributions exceeding SSO received from contributors during each bingo night under the 

recordkeeping requirements. Certification In the Matter of Request for Commission Directive 69 

Guidance Involving the Oakland County Democratic Party, LRA 946 (Jan. 30, 2014). 

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

recommend that the Commission again conclude that the Committee was required to keep 

particularized records of all contributions in excess of SSO that it received fh)m gaming 

participants during the course of a single bingo night. Thus, even if a gaming participant spent 

less than SSO on each of three possible gaming activities that typically took place during a bingo 

night, the Committee was required to keep a particularized record if the ag^egate amount the 

participant spent on all activities in which he or she participated during the course of a bingo 

night exceeded SSO. 

B. Legal Background 

The Federal Election Campaign Act of 1971, as amended (the "Act"), and Commission 

regulations implementing the Act require the treasurer of a political committee to keep an 

account of all contributions received by or on behalf of such committee. 2 U.S.C. § 432(c)(1); 

11 C.F.R. § 102.9(a). For each contribution in excess of SSO, a record of the name and address 

' Also, since Ihcrc are no records of contributors maintained, it is possible that contributors could be making 

contributions for the same activity more than one time in an evening, causing those contributors to exceed the SSO 

recordkeeping threshold. 
Memorandum to Commission 

Oakland County Democratic Party - LRA 946 

Page 3 of7 

of the contributor, as well as the date and amount of the contribution must be retained. 2 U.S.C. 

§ 432(c)(l)-(2); 11 C.F.R. § 102.9(a)(1). For contributions below $50, the treasurer must only 

keep an account "by any reasonable accounting procedure." 11 C.F.R. § 102.9(a). The 

Commission has interpreted the term "reasonable accounting procedure" in section 102.9(a) to 

allow committees to dispense with individual itemization of their records of contributions in 

cases where a single fiindraising event involves the receipt of a large number of small (below 

$50) contributions. See Advisory Opinions 1980-99 (Republican Roundup Committee) and 

1981 -48 (Muskegon County Republican Party). In such cases, committees may simply keep a 

record of "the name of the event, the date(s) contributions were received for that event, and the 

total amount of contributions received on each day for that event." Advisory Opinion 1980-99 

(Republican Roundup Committee). See also Advisory Opinion 1981-48 (Muskegon County 

Republican Party) (noting, in summarizing Advisory Opinion 1980-99, that "[t]he Commission 

did not require the political committee to record the names and addresses of individuals 

contributing less than $50 at a single event.. .").^ Neither advisory opinion defines what 

constitutes a single fundraising "event," however, nor do the Act or Commission regulations 

include such a definition. 

II. Deference to the State Law Definition of a Fundraising "Event" Would Be 

Inappropriate. 

The Committee proposes that the Commission adopt Michigan's definition of "event" 

under its gaming law for the purpose of applying the Act's recordkeeping requirements, and cites 

Advisory Opinion 2001-19 (Oakland Democratic Campaign Committee), as well as 

11 C.F.R. §§ 114.5(b)(2), 100.33, and 114.7(d) as support for this proposition. An "event" under 

Michigan's gaming law is defined as "each occasion of a bingo, millionaire party, raffle, charity 

game, or numeral game licensed under this act." Michigan Compiled Laws ("MCL") 

§ 432.103a(2). An "occasion" is defined as "the hours of the day for which a license is issued." 

MCL§432.103a(ll). 

The Commission has previously relied upon State law in other contexts to supply the 

meaning of terms not explicitly defined in the Act or Commission regulations. See Advisory 

Opinion 2013-07 (Winslow II) (deferring to state law definition of "spouse"). As the Committee 

notes, the Commission by regulation defines "assets" with reference to state law in 11 C.F.R. 

§ 100.33(a), and, also by regulation, it determines whether a professional association is a 

corporation^ with reference to State law in 11 C.F.R. § 114.7(d).^ The Commission has also 

' If a commiitee chooses this approach, it is still required to comply with 2 U.S.C. 432(c)( I )-(2) and 11. 

C.F.R. ji 102.9(a)(1) with respect to contributions in excess of SSO. See Advisory Opinion 1980-99 (Republican 

Roundup Committee) at 2. 

* The Commission has also used state law to generally determine the corporate status of an entity. Advisory 

Opinion 199S-27 (NAREIT). One exception to this policy is embodied in 11 C.F.R. 110.1(g), which classifies 

limited liability companies according to their treatment under IRS tax rules rather than under state law. The 

Commission noted that these rules should be viewed as a narrow exception to its general practice of looking to state 

law to determine corporate status. See Explanation and Justification for Final Rules Regarding Treatment of 

Limited Liability Companies Under the Federal Election Campaign Act, 64 Fed. Reg. 37397,37398 (July 12, 1999). 
Memorandum to Commission 

Oakland County Democratic Party - LRA 946 

Page 4 of? 

deferred to state law in the advisory opinions context. See. e.g.. Advisory Opinion 2013-07 

(Winslow II) (deferring to state law definition of "spouse"); Advisory Opinion 1995-07 (Key 

Bank of Alaska) (noting long history of Commission applying state law to determine amount and 

existence of debts); Advisory Opinion 1995-27 (NAREIT) (noting use of state law to determine 

corporate status generally). 

The advisory opinions and Commission regulations cited by the Committee, however, 

provide no support for the proposition that the Commission must or should defer to state law on 

the question of what constitutes a fundraising event for Federal recordkeeping purposes. 

Advisory Opinion 2001-19 (Oakland Democratic Campaign Committee) was solely 

concerned with the overall ability of a committee to use bingo as a legal method of lundraising, 

and concluded that nothing in the Act or the Commission's regulations precluded the state from 

making this determination, since this is a matter historically associated with state jurisdiction and 

no Federal law or policy purports to make a contrary determination.' The Commission 

concluded in Advisory Opinion 2001-19 that the fact that the requesting committee was a 

federally registered political committee did not generally exempt it from its obligation to comply 

with the state's gaming law. 

In contrast, the recordkeeping obligations at issue in this matter support the 

Commission's ability to monitor the accuracy of the Committee's disclosure and reporting of its 

contributions and expenditures, which, as the advisory opinion notes, is a matter specifically 

committed by Congress to exclusive Federal jurisdiction.' Advisory Opinion 2001-19 (Oakland 

Democratic Campaign Committee), at 3. The fact that the Commission conditions a political 

committee's right to engage in a particular mode of fundraising upon the legality of that mode of 

fundraising in the applicable state, as section 114.S(b)(2) provides, in no way implies that the 

Commission automatically should defer to all terms and provisions of state law when defining 

and determining a political committee's core recordkeeping responsibilities under the Act. 

' In ihe case of section 100.33(a), Congress has also mandated this deference. See 2 U.S.C. § 431(26)(A). 

With respect to section 114.7(d), the Commission has also identified legislative history indicating the Committee on 

House Administration's view that "[wjhether or not a professional association is a corporation is a matter 

determined under State law." See Advisory Opinion 2008-03 (Holland & Knight) (citing H.R. Rep. 93-1239,93d 

Cong., 2d Sess., at 21 (1974), reprinted in Legislative History of the Federal Election Campaign Act Amendments of 

1974. at 633 (1977) (additional citations omitted). 

* The Commission noted that control of gaming activity is a central feature of a state's regulatory authority 

and that Commission regulations permit the separate segregated funds of corporations and labor unions to conduct 

gaming activity as a fundraising device so long as the applicable state law allows it. Advisory Opinion 2001-19 

(Oakland Democratic Campaign Cormnittee), at 4; 11 C.F.R. § 114.3(b)(2). 

^ The Commission noted that in enacting 2 U.S.C. § 433, which provides that the Act and Commission 

regulations pre-empt provisions of state law with respect to elections to Federal office. Congress had identified 

certain subjects that it intended to relegate exclusively to Federal jurisdiction. Advisory Opinion 2001-19 (Oakland 

Democratic Campaign Committee), at 3. Notably, among these. Congress intended that Federal law occupy the 

field "with respect to reporting and disclosure of political contributions to and expenditures by Federal candidates 

and political committees." Id. citingH.R. Rep. No. 93-1438. 93dCong.. 2dSess. 69(1974), at 100-01. Seealso 

11 C.F.R. S 108.7(a). 
Memorandum to Commission 

Oakland County Democratic Party - LRA 946 

Page 5 of7 

III. The Need for Practical Accommodation Does Not Relieve the Committee of Its 

Obligation to Comply With the Law 

The Committee also argues that the Commission has recognized the need to 

accommodate political committees when it would be impractical to comply strictly with the 

requirements of the Act. In this context, the Committee identifies advisory opinions the 

Commission has issued on a committee's obligation to comply with the recordkeeping 

requirement at issue in this case, as well as other advisory opinions that address the need for 

practical accommodation in different contexts.' These advisory opinions are not applicable to 

the Committee's circumstances here, and the Committee presents no compelling reasons why it 

should be excused from complying with the Act's recordkeeping obligations.' 

As we previously noted in our memorandum supporting our Request for Directive 69 

Guidance, the advisory opinions addressing the recordkeeping requirement upon which the 

Committee relies contemplated factual situations that differed from the situation presented in this 

audit in one important respect - there were strong assurances in those advisory opinions that a 

substantial number of the contributors would not reach or exceed the SSO itemization threshold. 

In Advisory Opinion 1980-99 (Republican Roundup Committee), the requesting committee 

represented that it intended to host several fundraising events. The cost range to attend each 

event was well below the SSO itemization threshold, and, further, while hundreds of people were 

expected to attend each event, few people were.expected to attend more than one. Advisory 

Opinion 1980-99 (Republican Roundup Committee). Similarly, in Advisory Opinion 1981-48 

(Muskegon County Republican Party), the requesting committee held weekly bingo games. 

' The Committee also cites Advisory Opinions 2004-10 (Metro Networks) and 1980-147 (Yearout) as 

examples of other situations in which the Commission has considered impracticality and made accommodations, but 

these examples are inapposite. In Advisory Opinion 2004-10 (Metro Networks), the Commission was guided in its 

impracticality analysis by a regulation specifically requiring it to consider impracticality when interpreting the 

requirements of the disclaimer obligation, and the accommodation was narrow, not involving exemption from the 

requirement entirely. See Advisory Opinion 2004-10 (Metro Networks), at 3, citing 11 C.F.R. ^ 110.1 l(f)(l)(ii). In 

Advisory Opinion 1980-147 (Yearout), the Commission did not have to make an accommodation, but found that the 

authorized committee's plan to pay the candidate a sum of money remaining in its account would not be a 

conversion of campaign funds to the candidate's personal use under the Act. See 2 U.S.C. § 439a. The amount the 

committee proposed to pay the candidate was less than an amount the candidate had loaned the committee and 

subsequently forgiven to enable the corrunittee to terminate, and amounts the candidate had donated afler the 

committee's debts were paid were donated several months ailer the election and for the sole purpose of refunding 

contributions. 

* The Commission has issued advisory opinions to requestors excusing them from strict compliance with 

legal requirements where the circumstances affecting the requestors' ability to comply were either wholly or 

partially controlled by the actions of third parties. See. e.g.. Advisory Opinion 1998-2S (Mason Tenders District 

Council) (timely compliance blocked by court order); Advisory Opinion 1996-36 (Frost et al.) (contribution 

limitations adjusted because of court order); Advisory Opinion 2010-17 (Stutzman for Congress) (modified method 

of treatment of undesignated contributions where two elections held on same day); Advisory Opinion 1991-39 

(D'Amato) (alternatives to contribution refund because of criminal activity and inability to identify contributor). No 

such factors are present here. 

While the Committee states that Advisory Opinion 1981-48 (Muskegon County Republican Party) 

represents an accommodation of the recordkeeping requirements to the unique circumstances of Michigan bingo, the 
Memorandum to Commission 

Oakland County Democratic Party - LRA 946 

Page 6 of7 

Contiibutors purchased bingo cards on entering and paid a minimum $I admission charge. The 

average bingo card holder was expected to spend about S12 in an evening, and one particular 

person would occasionally spend more than S20 for bingo cards. Advisory Opinion 1981-48 

(Muskegon County Republican Party). 

Thus, the factual context for the Commission's conclusion that keeping a record of the 

aggregate amount of contributions was acceptable for the requesting political committees was: 

I) all or the majority of contributions those committees would receive would not reach or exceed 

the SSO itemization threshold and 2) in the case of Advisory Opinion 1980-99 (Republican 

Roundup Committee), contributors were not likely to attend more than one event. The 

Commission had reasonable assurance that the SSO itemization threshold would not be exceeded. 

Here, the facts present no assurance that people attending the OCDP's twice-weekly bingo nights 

will spend less than SSO during the course of an evening. To the contrary, as disclosed by the 

Committee's records, the average cost per attendee at a bingo night exceeded SSO, and averaged 

approximately S87 for the 2012 election cycle.'" 

We also noted in our memorandum supporting our Request for Directive 69 Guidance 

that in Advisory Opinion 1991-20 (Call Interactive), the Commission decided not to permit use 

of the recordkeeping methodology set forth in Advisory Opinions 1980-99 (Republican Roundup 

Comrnittee) and 1981-48 (Muskegon County Republican Party) for a 900-line fundraising 

program. The Commission based its conclusion primarily on the fact that the 900-line 

technology allowed for obtaining the names and addresses of most of the contributors. By 

contrast, the committees in the previous advisory opinions did not automatically have access to 

identifying information for bingo participants, particularly those paying by cash. Advisory 

Opinion 1991-20 (Call Interactive). The Commission also noted, however, that its interest in 

requiring that the names and addresses of small contributors be recorded was heightened because 

the callers were able to make repetitive calls and calls from prohibitied sources. Id. Here, while 

contributors participating in bingo nights are not easily identifiable, unlike the contributors in 

Advisory Opinion 1991-20 (Call Interactive), potential contributors do have a similar ability to 

make repetitive contributions at each of the activities sponsored by the Committee during a bingo 

night. 

advisory opinion merely applies the same rule it developed in Advisory Opinion 1980-99 (Republican Roundup 

Committee) in a difTerent context to the factual situation presented by the requestor. 

'' Indeed, this advisory opinion suggests that whether a fundraising occasion consists of single or multiple 

events may in fact be less significant than the opportunities contributors may have to exceed the SSO itemization 

threshold. Thus, even if three activities conduct^ during a single bingo night would constitute three separate 

fundraising events. Advisory Opinion 1980-99 (Republican Roundup Committee) would arguably still not permit 

use of the alternative recordkeeping method in this case because contributors appearing during bingo nights are 

likely to attend more than one event. -

While the average contribution per attendee was S87, this does not necessarily indicate that all attendees 

likely bought SSO or more of bingo cards per night. 
Memorandum to Commission 

Oakland County Democratic Party - LRA 946 

Page 7 of 7 

We understand the Committee's concern for committing resources to maintain more 

detailed records of small contributions,'^ but interpreting the above advisory opinions in the 

manner suggested by the Committee would effectively vest committees with unilateral discretion 

to determine the extent of their recordkeeping obligations through the manner in which they 

characterize activities closely related in time and subject matter as single or separate fundraising 

events. We do not believe that the Commission intended this consequence when it issued the 

advisory opinions. Rather, the Commission provided an alternate means of recordkeeping to 

committees receiving a large number of contributions under $50 in factual situations where there 

was little likelihood that such contributors would exceed the $50 itemization threshold. 

Advisory Opinions 1980-99 (Republican Roundup Committee) and Advisory Opinion 1981-48 

(Muskegon County Republican Party). 

For the above reasons, we recommend that the Commission again conclude that the 

Committee was required to itemize all contributions exceeding $50 in aggregate from 

contributors during a single bingo night under 2 U.S.C. § 432(c)(l)-(2); 11 C.F.R. § 102.9(a) and 

Advisory Opinions 1980-99 (Republican Roundup Committee) and 1981-48 (Muskegon County 

Republican Party). Although the Committee was legally required to maintain such records, the 

Commission may wish to consider as a matter of policy whether it should pursue a 

recordkeeping finding against this Committee where it may not have been clear to the Committee 

that it was required to treat the three gaming activities as a single fundraising event under the 

prior advisory opinions or the Campaign Guide for Party Committees. 

IV. Recommendation 

Conclude that OCDP's bingo nights did not constitute three separate fundraising events, 

and, instead, OCDP was required to itemize all contributions exceeding $50 received from 

contributors during each bingo night under the provisions addressing the recordkeeping 

requirements at 2 U.S.C. § 432(c)(l)-(2); 11 C.F.R. § 102.9(a). 

Attachment 1 - Request for Legal Consideration from the Oakland County Democratic Party, 

dated March 4, 2014. 

" In the Request, the Committee argues that the purposes of the Act are not served by requiring 

characterization of its bingo nights as single events where the vast majority of its prize payouts amount to S2 or less. 

Attachment 1, at S. At issue here, however, is not the Committee's recordkiseping of its disbursements of prize 

money, but rather its recordkeeping of receipts in the form of contributions from bingo patrons.