February 7, 2022 

BY EMAIL Phone: (949) 441-5352 

Federal Election Commission 

Audit Division 

Rebecca Yarbrough 

1050 First Street, NE 

Washington, DC 20002 

Email: audit@fec.gov; 

Re: Response to the Interim Audit Report on Citizens for Waters 

Dear Ms. Yarbrough: 

On behalf of my client, Citizens for Waters, (the “Committee”), we write in response to the Interim Audit 

Report (“the Report”) of the Audit Division. 

The audit covered the Committee’s activities for the 2019-2020 election cycle. The Committee 

consistently made its best effort to comply with the Federal Election Campaign Act. However, the 

COVID-19 pandemic impacted the Committee’s operations due to California’s shelter-in-place orders 

and limited staff availability. 

1. Misstatement of Financial Activity 

The Committee used the same software provider to prepare its campaign reports for over twenty (20) 

years and began experiencing various technical issues as the software became increasingly outdated. 

The Committee heavily relied on the software company’s technical support to prepare and electronically 

file its reports. And many of the misstatements on the Report are attributable to software technical 

issues. These issues were further exacerbated by the pandemic as technical issues continued to grow 

but company customer support reduced. 

The Committee began using a new software to prepare campaign statements immediately following the 

2019-2020 cycle. It is in the process of preparing and filing amendments to all its campaign reports to 

accurately reflect the Committee’s financial activities. 

2. Receipt of Contributions in Excess of the Limit 

The Committee made its best effort to track contributions to ensure they were within the contribution 

limits. Its receipt of the excess contributions totaling $19,000 was inadvertent and the Committee has 

refunded the contributions. Attached as Exhibit A are copies of the refunds issued. 

220 S. Pine St, Suite 210 2102 Business Center Dr., Suite 130 

Sisters, OR 97759 Irvine, CA 92612 
 

 

 

 

 

 

 

 

Federal Elections Commission 

February 7, 2023 

Page 2 

3. Cash Disbursements 

The Committee made its best effort to comply with the Act’s recordkeeping and reporting requirements. 

Due to the extenuating circumstances of the pandemic, the Committee issued cash, which was 

entrusted to the campaign manager, to distribute payments to canvassers and pay for canvassing costs. 

Congresswoman Waters’ constituents are comprised of many low-wage and working-class communities 

who regularly work paycheck to paycheck and, in many instances, cash their checks immediately at 

check-cashing stores or directly from the banks. During the pandemic, many of these check cashing 

stores and banks were closed or maintained limited hours of operation making it difficult for canvassers 

to cash their checks. The Committee, therefore, issued cash to its canvassers rather than checks. 

The campaign manager made her best efforts to track all cash expenditures, however, was unable to 

provide the Committee with all disbursement records. The campaign manager is willing to make a 

declaration that the cash received was used to pay canvassers and in furtherance of the canvassing 

program. 

4. Alleged Contributions from Unregistered Political Organizations 

The Report finding states that the Committee received contributions from Unregistered Political 

Organizations. However, the Committee asserts that the payments received were not contributions 

subject to the Acts applicable contribution limits pursuant to 52 U.S.C. § 30116(a)(2). Rather 

reimbursements for costs associated with appearing on Congresswoman Waters’ slate mailer brochure. 

The Act defines a contribution as “any gift, subscription, loan, advance, or deposit of money or anything 

of value made by any person for the purpose of influencing any election for Federal office.” 1

 The 

Committee received 47 payments, totaling $568,000, from unregistered non-federal committees2

 in 

consideration for their appearance on Congresswoman Waters slate mailer. First, the payments were 

not intended as gifts and the non-federal committees had a full expectation of receiving a benefit. 

Further, the payments made were not for the purpose of influencing any election for Federal office. 

Rather, these were non-federal committees making payments in support of non-federal candidates or 

ballot measures on the ballot. 

Further, the Commission has advised that “reimbursements by the authorized committees of Federal 

candidates listed in the mailers in amounts equal to the attributable costs associated with each 

candidate’s listing would not constitute support to Waters’ Committee because, in this situation, mere 

reimbursement of the costs associated with the production and distribution of the proposed mailer 

within a reasonable period of time would not constitute “anything of value” to Waters’ Committee 

under the Act.3

” The Committee disagrees with the Office of General Counsel (“OAG”) and the audit 

staff’s assertion that it cannot rely on this advice.4

 While the advice letter addresses reimbursements 

from Federal candidates, the circumstances are exactly the same in that the non-federal committees 

1 See 52 U.S.C. § 30101(8)(A), See also 11 C.F.R. § 100.52. 2 See Report at 12. 3 See Advisory Op. 2004-37 at 4. 4 See Report at 15. 
 

 

 

 

Federal Elections Commission 

February 7, 2023 

Page 3 

were reimbursing the Committee for its fair share of costs to appear on Congresswoman Waters’ slate 

mailer brochure. 

As provided in the opinion letter, where payments made to the Committee was more than the nonfederal committee’s fair share, refunds for the excess payments were issued within a period of time. In 

fact, of the Committee partially refunded $5,000 in slate mailer payments. 

The Committee agrees with OGC and the audit staff that the slate mailer brochures constitute Federal 

Election Activity5

 and are, therefore, subject to the limitations, prohibitions, and reporting requirements 

of the Act.6

 However, the Committee maintains it did not “solicit, receive, direct, transfer, or spend 

funds”7

 for the slate mailer brochure using non-federal funds. 

The Committee took proactive measures to issue invoices and verify funds used to pay for slate mailer 

costs were from federally permissible sources. Its misstatement of the applicable individual 

contribution limit and omission of some prohibited sources on notices was unintentional. Therefore, 

the Committee is in the process of reviewing and confirming that funds received from the unregistered 

political organizations were from federally permissible funds to determine and disgorge any 

impermissible funds to the US Treasury. Attached as Exhibit B are copies of some federally permissible 

letters received. 

The Committee appreciates the opportunity to respond to the Report. Please let me know if you have 

any questions or need additional information. 

Sincerely, 

Leilani Rudow Beaver 

Counsel for Citizens for Waters 

LRB:LRB

cc: Congresswoman Maxine Waters

David Gould, Treasurer

5 Id. 

6 See 52 U.S.C. § 30125(e)(1)(a) 7 Id.