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FEDERAL ELECTION COMMISSION 2]!i ::A?. \ U P I2:| 0 

WASHINCTOiSI, D.C. IMhi 

March 14, 2011 SENSmVE 

MEMORANDUM 

TO: The Commission 

D. Alec Palmer /^T 

THROUGH: Acting Staff Director \ 

Christopher Hughey 

FROM: Acting General Counsel I 

Lawrence L. Calvert, Jr. /p 

Associate General Coun^ 

General Law and Advice 

Lorenzo Holloway 

Assistant General 

Public Finance and Audit Advi*ce 

Margaret J. Forman ' TV) ^ 

Attomey 

Allison T. Steinle 

Attomey 

SUBJECT: Request for Early Commission Consideration of Legal Questions 

Arising in the Audit ofRightmarch.com PAC, Inc. (LRA 842) 

I. INTRODUCTION 

The purpose of this memorandum is to address a Request for Early Commission 

Consideration of Legal Questions by Rightmarch.com PAC, Inc. ("Rightmarch"), and make 

recommendations about how the Commission should direct the Audit Division to proceed with 

respect to these questions. 

On April 8, 2010, the Commission voted to audit Rightmarch pursuant to 2 U.S.C. 

§ 438(b). The Audit Division concluded its fieldwork and conducted an exit conference with 

Rightmarch on January 19, 2011. At this point the Audit Division has not prepared the Interim 
FEDERAL ELECTION COMMISSION 

WASHINGTON. D.C. liUhi 

March 14, 2011 

MEMORANDUM 

TO: The Commission 

D. Alec Palmer /Sj^ 

THROUGH: Acting Staff Director \ 

Christopher Hughey FROM: Acting General Counsel I 

Lawrence L. Calvert, Jr. 

Associate General Counl^ 

General Law and Advice 

Lorenzo Holloway 

Assistant General 

Public Finance and Audit Advice 

Margaret J. Forman ' >V) ^ 

Attomey 

Allison T. Steinle f,\^, 

Attomey 

SUBJECT: Request for Early Commission Consideration of Legal Questions 

Arising in the Audit ofRightmarch.com PAC, Inc. (LRA 842) 

I. INTRODUCTION 

The purpose of this memorandum is to address a Request for Early Commission 

Consideration of Legal Questions by Rightmarch.com PAC, Inc. ("Rightmarch"), and make 

recommendations about how the Commission should direct the Audit Division to proceed with 

respect to these questions. 

On April 8,2010, the Commission voted to audit Rightmarch pursuant to 2 U.S.C. 

§ 438(b). The Audit Division concluded its fieldwork and conducted an exit conference with 

Rightmarch on January 19, 2011. At this point the Audit Division has not prepared the Interim 
Memorandum to the Commission 

Righlmaich.com PAC, Inc. (LRA 842) 

Request for Early Conimission Consideration of Legal Questions 

Page 2ofl0 

Audit Report ("lAR"), but on February 3, 2011, Rightmarch filed a Request for Eariy 

Commission Consideration of Legal Questions ("Request") pursuant to the Policy Statement 

Establishing a Pilot Program for Requesting Consideration of Legal Questions by the 

Commission, 75 Fed. Reg. 42,088 (July 20, 2010). In its Request, Rightmarch requested thirty 

additional days to "submit evidence and fully brief the Commission." On Febmary 8, 2011, the 

Commission granted Rightmarch's Request, and on February 11,2011, the Commission granted 

Rightmarch five additional days to file its supplemental request. On February 16, 2011, 

Rightmarch filed a supplemental Request for Consideration of Legal Questions Arising in the 

Audit of Rightmarch.com PAC, Inc. ("Supplemental Request"). Rightmarch seeks the 

Commission's consideration of two legal questions that the auditors have raised in the exit 

conference. 

II. ANALYSIS 

A. THE "EVER-CHANGING WEEKLY CONTINGENCY FEES" HERE 

APPEAR TO RESULT IN IN-KIND CONTRIBUTIONS AND ARE 

REPORTABLE DEBTS 

The first question Rightmarch asks is whether a contract that provides for an "everchanging weekly contingency fee" with a telemarketing firm constitutes an extension of credit 

under 11 C.F.R. 116.3 or results in in-kind contributions by the telemarketing firm under 

11 C.F.R. § 100.52.' Rightmarch also asks whether an "ever-changing weekly contingency fee" 

with a telemarketing fimi is a debt subject to the reporting requirements of 11 C.F.R. § 104.11. 

We conclude that the type of "no risk" or "limited risk" contract at issue here may result 

in in-kind contributions to Rightmarch from the telemarketing firm, and would result in in-kind 

contributions in the absence of any additional information. However, at this eariy stage of the 

audit process, Rightmarch may yet be able to provide infomiation demonstrating that the contract 

has not resulted in any in-kind contributions. We also conclude that the type of "no risk" or 

"limited risk" fees and expenses resulting from such a contract are debts, and therefore must be 

reported to the Commission accordingly. 

Rightmarch, a non-connected political committee, entered into a five year fundraising 

telemarketing contract with Political Advertising, a division of Political Call Center LLC, on 

August 20, 2007. Political Advertising charges Rightmarch a "flat contingency fee" of S2.50 per 

completed call, plus actual costs of associated activity such as sending a response card or 

accessing a call list. However, depending on developments over the course ofthe contract, 

Rightmarch may never be liable for all of these fees and expenses. 

Under the contract, Riglitniaich is guaranteed a minimum of five percent ofthe gross 

proceeds of the fundraising activity. Moreover, Rightmarch is only obligated to pay fees and 

' Rightmarch did not ask this question in its initial Request, but did ask it in its Supplemental Request. Although the Commission did not formally vote on or gram Rightmarch's Supplemental Request, we are addressing 

this question as well because it is closely intertwined with the debt question. 
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 Memorandum to the Commission 

 Righimarch.com PAC. Inc. (LRA 842) 

 Request for Early Commission Consideration of Legal Questions 

PageSoflO 

 expenses to the extent that Political Advertising receives funds in response to its fundraising 

efforts. If Political .Advertising's fundraising efforts are not sufficient to cover a particular 

 week's fees and expenses, Rightmarch still receives five percent of the gross fundraising 

 proceeds, and the remaining proceeds go towards paying off the total amount of outstanding fees 

and expenses without lequiring Rightmarch to pay the remaining balance from its own funds. 

Political Advertising provides Rightmarch with a weekly invoice showing the fees and 

expenses for its services that week and the accumulated net balance of fees and expenses not 

covered by the proceeds of the fundraising project to date. However, under the terms of the 

contract, Rightmarch can never he liahie for any of these unpaid fees or expenses unless it 

temiinates the contract prior to ils 2012 expiration date, in which case it becomes immediately 

liable for the full amount of fees and expenses accumulated to date. The contract itself refers to 

this arrangement as a "No Risk Guarantee." 

As a result of this arrangement, the auditors have informed Rightmarch that they intend 

to include a finding in the lAR that Rightmarch had an outstanding debt to Political Advertising 

 in the amount of S1,524,657.35 at the conclusion of the audit period. Rightmarch reported only a 

small portion of this amount as outstanding debt for this period.' The auditors have also 

 infomied Rightmarch that they may include a finding in the lAR that this arrangement resulted in 

 in-kind contributions to Rightmarch from Political Advertising. 

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." 2 U.S.C. § 431(8)(A)(i). Commission regulations further provide that an 

extension of credit to a political committee by a commercial vendor is a contribution unless the 

credit is extended in the ordinary course of business and on the same tenns as extensions of 

credit to non-political debtors of similar risk und for an obligation of similar size. 11 C.F.R. 

vjvj 100.55, 116.3(b). In detennining whether an extension of credit was in the ordinary course of 

business, the Commission considers whether the vendor followed established procedures and 

past practices, whether the vendor received prompt payment in full for previous extensions of 

credit, and whether the extension of credit conformed to the usual and nomial practice in the 

industry. 11 C.F.R. § 116.3(c). If a vendor extends credit and fails lo make a commercially 

reasonable attempt to obtain repayment, a contribution will result. 11 C.F.R. §§ 100.55, 

116.4(b)(2). 

The Commission has specifically addressed "no risk" or "limited risk" fundraising 

agreements like the one at issue here in enforcement matters and advisory opinions throughout 

the years. The Commission has consistently applied 11 C.F.R. §§ 100.55 and 116.3 (or their 

regulatory predecessors) to delemiine whether such arrangements were extensions of credit that 

resulted in in-kind contributions. Sec. e.g.. .MUR 5635 (Conservative Leadership PAC) 

' The Audit Division does not know why Rightmarch elected to report only a small portion ofthe 

outstanding fees and expenses. Rightmarch stopped reporting any of this amount as debt in 2009. Rightmarch 

reponed the fundraising proceeds as contribution receipts and the amount of proceeds that Political Advertising 

applied to its outstanding fees and expense as expenditures to third-party vendors. 
Memorandum to the Commission 

Rightmarch.com PAC. Inc. (LRA 842) 

Request for Early Commission Consideration of Legal Questions 

Page 4 of 10 

(addressing a "no risk" fundraising contract where the committee was not responsible for the 

costs of fundraising in e.\cess of the money raised); AO 1991-18 (New York State Democratic 

Committee) (addressing a "limited risk" fundraising contract where the committee's full 

payment of the vendor's commissions was tied to the prospect that the fundraising would pay for 

itself over several years); AO 1979-36 (Committee for Fauniroy) (addressing a "limited risk" 

fundraising contract where the committee was only required to pay three-fourths of the total 

amount of contributions received irrespective of the actual amount of fees and expenses).^ In 

doing so, the Commission has required commitlees to have safeguards in place to ensure that 

committees in fact pay for all of the costs of the fundraising programs. See MUR 5635 

(Conservative Leadership PAC); AO 1991-18 (New York State Democratic Committee); 

AO 1979-36 (Committee for Fauntroy). Specifically, the Commission has focused on whether a 

committee would receive an>thing of \ alue without timely and proper compensation first being 

paid to the fundraising firm and any third-paily vendors. See id. Safeguards proposed by the 

Commission have included requiring advance deposits by a committee to reimburse vendors for 

potential shoilfalls, limiting the temi of the contract, or allowing vendors to terminate the 

contract early and demand full payment as a result of poor fundraising performance. See id. 

For example, in MUR 5635 (Consen ative Leadership PAC), the committee entered into 

a "no risk" contact with a fundraising fimi. The arrangement provided that the committee would 

be responsible for the costs of fundraising only up to the aniount of funds raised. The 

fundraising program was nol sufficient to cover the vendors' expenses, and the fundraising firm 

made several disbursements to the committee directly out of the fundraising proceeds before the 

vendors' expenses were fully paid. Accordingly, the Commission concluded that this 

arrangement was not in the ordinary course of business and resulted in in-kind contributions 

from the fundraising firm and its third-party vendors. 

Likewise, in AO 1991-18 (New York State Democratic Party), the committee proposed 

entering into a "Prospecting Program" where the costs of fundraising would be paid out of 

fundraising proceeds and the committee would be responsible for the costs of fundraising only 

up to the aniount of funds raised. Moreover, under the first year of the program, the vendor 

would prox ide the comiiiittee with net rex enues ex en xvhen the vendor had not yet been fully 

paid for an earlier round of solicitations. The Commission disapproved of the program because 

"regardless of the degree of success of the effoit to raise funds, the committee would retain 

contribution proceeds xvhile giving up little, or the committee would assume little to no risk with 

the vendor bearing all, or nearly all, the risk." The Commission noted that, absent further 

evidence that the arrangement xvas made in the ordinary course of business and on the same 

tenns as extensions of credit to non-political debtors of similar risk and for an obligation of 

' The Comniission also has addressed contracts and dealings in contexts other than fundraising in which 

committees assumed no risk or limited risk. Sec. cj;.. .ML'Rs 5069 and 5132 (Comite Acevedo Vila Comisionado 

2000) (determining that no contribution resulted when a Puerto Rico advertising agency bought television time on 

behalf of a candidate without tirst receiving payment based on evidence of common industry practice in Puerto 

Rico): MUR 4742 (Juan Vargas for Congress) (finding a reportable extension of credit, but no contribution, 

resulting from a "deferred compensation" contract with a candidate's general consultant where the consultant's 

retainer was only to be paid if the vendor and the committee agreed that the committee could afford to pay it without 

harm to campaign's viability). 
Memorandum to the Commission 

Riglitmarch.com PAC, Inc. (LRA 842) 

Request for Early Commission Consideration of Legal Questions 

Page 5 of 10 

similar size, or absent an advance deposit by the conimittee sufficient to cover the expenses of 

i the program, the program did not have sufficient safeguards to ensure it would not result in inI kind contributions to the committee from the fundraising firm. 

Here, like in MUR 5635 and AO 1991-18, the terms of the agreenient provide that 

Rightmarch receives five percent of the gross fundraising profits regardless of whether Political 

Advertising is paid in full for its services. Moreover, Rightmarch has paid only a small fraction 

ofthe total S 1,524,657.35 in outstanding fees and expenses listed on the weekly invoices, and by 

the terms of the agreement xx ill never have to pay any of this aniount, or any additional fees and 

expenses that may accrue in the future, if the fundraising venture does not pay for itself In the 

absence of any other infomiation, these facts strongly suggest that the arrangement between 

Rightmarch and Political Advertising is one in xvhich "the committee would retain contribution 

proceeds while giving up little, or assume little lo no risk wilh the vendor bearing all, or nearly 

all the risk." See AO 1991-18 (Nexv York State Democratic Party). Without appropriate 

safeguards, such arrangements would result in in-kind contributions to Rightmarch from Political 

Advertising. 

We have x'ery little information at this time about the presence or absence of the 

"safeguards" that the Conimission has identified in relevant enforcement matters or advisory 

opinions. Hoxvever, Rightmarch may yet be able to provide inforniation demonstrating that the 

contract has not resulted in any in-kind contributions. For example, Rightmarch could provide a 

record by Political Advertising or similar companies ofthe implementation of a program of 

similar structure and size in the ordinary course of business."* See 11 C.F.R. §§ 100.55, 116.3(b); 

MUR 5635 (Conservative Leadership PAC); AO 1991-18 (New York State Democratic 

Committee); AO 1979-36 (Committee for Fauntroy). Alternatively, Rightmarch could provide 

evidence that it, in practice, utilized certain safeguards to ensure its fees and expenses were paid, 

such as paying an advance deposit to Political Advertising or ensuring that the fair market value 

of donor lists Political Advertising obtained as a result of the fundraising program were sufficient 

to cover the costs of its fees and expenses."^ See AO 1991 - 18 (New York State Democratic 

Committee). Rightmarch did not address this issue at length in its Request or Supplemental 

Request, bul could do so in response lo the lAR. 

In its request, Rightmarch argues that the "no risk" contract at issue in MUR 5635 is 

distinguishable from the agreement here because the agreement contains a clause that allows 

Rightmarch to terminate, causing the "No Risk Guarantee" clause to become null and void and 

obligating Rightmarch to pay the full amount of fees and expenses owed. See Supplemental 

In its Supplemental Request. Rightmarch states that the contract was made in "the usual and normal 

practice in the political fundraising industry." The Commission's treatment of these types of "no risk" fundraising 

agreements, however, would suggest otherwise, and Rightmarch has not provided any documentation or examples 

supporting this claim. 

* Under the terms ofthe contract. Political Advertising has a right to the donor lists acquired through the 

program on behalf of Rightmarch as "good and valuable consideration and a material inducement to Political 

Advertising" to enter into the contract. We have no information at this time, however, about the value of any list 

developed. 
Memorandum to the Commission 

Rightmarch.com P.AC. Inc. (LRA 842) 

Request for Early Commission Consideration of Legal Questions 

Page 6 of 10 

Request al 5. This clause, hoxvever, does not appear lo create any additional "risk" for 

Rightmarch or provide a safeguard to ensure that Rightmarch pays for all of the costs of the 

fundraising programs. To the contrary, the clause disincentivizes Rightmarch from terminating 

the contract before its five year leriii has expired by requiring it to pay the full amount of fees 

and expenses accrued ifit does terminate. This in tum ensures that Rightmarch will not be 

required to pay the full aniount of fees and expenses listed on the weekly invoice over an 

extended period of time. The termination clause provides no mechanism through which Political 

Advertising can ensure that it is paid for the advanced costs of fundraising services. Although 

Political Advertising also has the ability lo terminate the contract, it cannot unilaterally demand 

full paynient of its fees and expenses as a result of poor fundraising performance. 

Rightmarch also argues that the Commission has only found a fundraising agreement to 

result in in-kind contributions xvliere the vendor "forgave, in whole or in part, outstanding debts 

after they had already been incuiTcd." and because the Contract does not create any debt under 

State laxv, there is no such "debt forgiveness" by Political Advertising. See Supplemental 

Request at 5 (citing MUR 5635 (Conservative Leadership PAC) and MUR 5173 (Republicans 

for Choice PAC)). The two enforcement mailers Rightmarch cites, however, do not stand for 

this proposition. MUR 5635 involved a nuniber of transactions both by the principal vendor, 

American Target Advertising, and third-parly vendors. While debt forgiveness by American 

Target and the third-party vendors accounted for some of the in-kind contributions at issue in 

that case, others resulted from the "no-risk" nature of the contract between American Target and 

Conservative Leadership. And MUR 5173 principally involved multiple renegotiations, and 

eventual forgiveness, of debt oxved to a third-party lender, but did not address the issue of "no 

risk" fundraising contracts or dealings. Nothing in either MURs 5635 and 5173 or AO 1991-18 

indicates that there must be an affimiative act of "debt forgiveness" by a vendor before a "no 

risk" or "limited risk" arrangement can result in a contribution. 

Finally, with respect to the debt question, based on the above analysis, we conclude that 

all 51,524,657.35 in outstanding fees and expenses listed on the weekly invoices are debts 

subject to the reporting requirements of 11 C.F.R. 104.11. As discussed above, in analyzing 

whether these types of arrangement result in in-kind contributions, the Commission has 

consistently treated them as extensions of credit by vendors. See, e.g.. MUR 5635 (Conservative 

Leadership PAC); MURs 5069 and 5132 (Coiiiilc Acevedo Vila Comisionado 2000); MUR 4742 

(Juan Vargas for Congress); AO 1991-18 (New York State Democratic Committee); AO 1979-

36 (Commillee for Fauntroy). Commission regulations treat extensions of credit as a type of 

debL See 11 C.F.R. §§ 100.52, 100.55, 116.3; AO 1991-18 (New York State Democratic 

Committee) (concluding that extensions of credit made by a vendor would result in debt). 

Political comniittees are required to continuously report all debts and obligations until they are 

extinguished. 11 C.F.R. $ 104.11(a). Comniission regulations do not base the reporting of debts 

and obligations on the aniount that a committee xvill ultimately pay to a creditor, but rather the 

approximate amount or value ofthe debt at the time the report is filed. See 11 C.F.R. 

^ 104.11 (b) (requiring committees to estimate the amount of a debt or obligation where the exact 

amount is unknown and report lhal figure); 11 C.F.R. § 116.10 (requiring committees to report 

debt even if it is disputed); 11 C.F.R. § 116.10(a) (permitting committees to note in their reports 

that the disclosure of debt does not constitute an admission of liability or a waiver of any claims 
.Memorandum to the Commission 

Rightmarch.com PAC. Inc. (LRA 842) 

Request for Early Conimission Consideration of Legal Questions 

Page 7 of 10 

the comniittee may have against the creditor); see also AO 1999-38 (Calvert for Congress) 

(noting that a committee was correct in reporting disputed debts even where the vendors no 

longer existed or xvere legally barred from collecting that debt). 

In ils request, Rightmarch cites to several advisory opinions and a Fifth Circuit case for 

the proposition that "the Comniission has long held that State law govems whether an alleged 

debt in fact exists, xvhat the amount of the debt is, and which persons are responsible for paying a 

debt." See Request at 4. Rightmarch argues that under Arizona State law, the Contract does not 

result in a debt until the Contract is temiinated. See id. (citing Carrick v. Sturtevant, 234 P. 1080 

(Ariz. 1925)). The advisory opinions and caselaxv that Rightmarch cites for this proposition, 

hoxvever, do nol address the issue of xvheiher an alleged debt exists for the purposes ofthe 

Commission's reporting requirements. Rather, they simply stand for the proposition that the Act 

does not preempt or bar the application of State law with respect lo any claims of liability for a 

campaign debt in private litigation. .See AO 1995-7 (Key Bank of Alaska) (concluding that the 

Act's debt settlement provisions do not preempt a bank lender's claim against a candidate or his 

campaign under State law); AO 1989-2 (Baker for Congress) (concluding that the Act and 

Commission regulations do not affect whether a committee is required to pay a judgment under 

State law); AO 1988-44 (Bonner for Congress) (concluding that the running of a State statute of 

limitation on a debt does not affect a committee's ability to terminate); AO 1981-42 (Consulting 

Associates) (declining to delemiine the obligations and rights between two parties under a 

disputed contract); AO 1979-1 (Friends of Otterbacher) (declining to address a hypothetical 

judgment under State laxv); AO 1975-102 (Monahan for Congress) (concluding that the Act 

xvould not affect a committee's obligations to settle debts in bankruptcy); Karl Rove & Co. v. 

Thornhurgh. 39 F.3d 1273, 180-81 (Sth Cir. 1994) (concluding that the Act does not preempt a 

claim against a candidate or his campaign under State law). Therefore, the mie of law cited by 

Rightmarch is not applicable to the issue presenled in this case. In fact, the cited advisory 

opinions and caselaw support the proposition that the parties' actual liability under State law 

does not affect the application of the Act or Commission regulations with respect lo 

Rightmarch's reporting requirements. 

B. FUNDRAISING COMMUNICATIONS AS INDEPENDENT 

EXPENDITURES 

The second question Rightmarch asks is whether the expenses for fundraising 

solicitations must also be reported as independenl expenditures. We conclude that, to the extent 

that these solicitations expressly advocated the election or defeat of a clearly identified 

candidate, they must be reported as independenl expenditures. See 2 U.S.C. § 434(b)(4)(H)(iii); 

11 C.F.R. § 104.4(a). We further conclude that appropriate 24/48-hour notices must be disclosed 

as required. See 2 U.S.C. § 434(g); 11 C.F.R. §§ 104.4(b)(2), 104.4(c). 
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Memorandum to the Conunission 

 Rightmarch.com PAC. Inc. (LRA 842) 

 Request for Early Conunission Consideration of Legal Questions 

 PaueSoflO 

Rightmarch submitted to the .Audit Division four scripts that were developed for use by 

Political Advertising in telemarketing phone calls." After an introduction, screening questions 

ask whether the listener considers illegal immigration a serious problem. Calls to those who did 

not were terminated. Those who did heard additional content. In one of the scripts, the 

additional content contains no language advocating the election or defeat of any candidate; it is 

therefore not reportable as an independent expenditure. Three of the four scripts contain 

language advocating the defeat of Hillary Clinton, Barack Obama, or both Hillary Clinton and 

Barack Obama. Specifically, the other scripts state "we're working to defeat politicians like 

[Barack Obama/Hillary Clinton/Barack Obama and Hillary Clinton], who support AMNESTY 

for illegal aliens!" as xvell as "and please tell your friends to OPPOSE [Barack Obama/Hillary 

Clinton/Barack Obama and Hillary Clinton]." 

The communications in the three scripts at issue here are required to be reported as 

independent expenditures because they expressly advocate the election or defeat of a clearly 

identified candidate pursuant to section 100.22(a). An independent expenditure is a noncoordinated expenditure for a coiiimunication that expressly advocates the election or defeat of a 

cleariy identified candidate.^ 2 U.S.C. 431(17); 11 C.F.R. § 100.16(a). A communication that 

"expressly advocates" includes language such as "vote for the President," "re-elect your 

Congressman," "defeat," or other xvords, xvhich in context, can have no other reasonable 

meaning than to urge the election or defeat of one or more clearly identified candidates. 

11 C.F.R ij \00.22{SL)', see Buckley V. IWeo. 424 U.S. 1, 44 ii.52 (1976). Rightmarch's 

communications in the three scripts at issue are required to be reported as independent 

expenditures because they include the word "defeat" followed by the name of the clearly 

identified candidate: Hillary Clinton, Barack Obama, or both.'' 

Principally, Rightmarch appears to argue that no matter their text, the scripts do not 

contain express advocacy—and thus cannot be independent expenditures—because they are part 

of a fundraising effort. In essence, Rightmarch's argument is that, in context, any 

communication whose principal message can be distilled to a request for funds "may be 

reasonably interpreted as something other than an unmistakable, unambiguous exhortation to 

vote for or against a candidate at an election." .Sec Supplemental Request at 8. Although 

Rightmarch does not include a citation, this sentence essentially applies the standard of 11 C.F.R. 

§ 100.22(b). While Rightmarch acknoxvledges that the scripts tell listeners that "xve are working 

to defeat politicians like Barack Obama" and thai they should "tell their friends to OPPOSE 

Hillary Clinton," il does not acknowledge lhal the use of the words "defeat" and "oppose," in 

^ The contract between Political Advertising and Rightmarch specifies that "[a]Il written materials, 

including scripts, fulfillment packages, emails and websites shall either be created by the CLIENT [Rightmarch]. or 

be subject to the CLIENT'S [Rightmarch'sj fmal approval." 

We have no information that the communications were coordinated with any candidate. 

The contract between Political Advertising and Rightmarch identifies one of the purposes ofthe 

agreemeiu is to "advocate issues and or the election and defeat of candidates for federal office." 
Memorandum to the Commission 

Rightmarch.com PAC. Inc. (LRA 842) 

Request for Early Conimission Consideration of Legal Questions 

Page 9 of 10 

reference to a clearly identified candidate, tum the message of the calls into simple express 

advocacy under 11 C.F.R. § 100.22(a). 

In addition, the Commission has found that fundraising solicitations containing express 

advocacy should be reported as independent expenditures. In MUR 5809, the Christian Voter 

Project ("CVP") failed to file independent expenditure notices for the costs of fundraising letters 

that expressly advocated the election/defeat of candidates. The Conimission found reason to 

believe that CVP's failure to file independent expenditure notices violated the Act, and accepted 

a conciliation agreement with the committee based on that violation, hi MUR 5518 (Hawaii 

Democratic Party), a party communication contained at least three messages: an invitation lo 

precinct meetings, express advocacy of the defeat of a cleariy identified Federal candidate, and a 

fundraising appeal. The Office of General Counsel concluded the communication should have 

been reported either as an independent expenditure or as federal election activity, and 

recommended reason to believe findings. The Commission rejected our recommendation, not on 

grounds that solicitations could not be independent expenditures but on grounds that invitations 

to precinct meetings permitted treatment as a federal/non-federal allocated administrative 

expense under the exception to the definition of federal election activity for costs of local 

political conventions, 2 U.S.C. § 431(20)(B)(iii)). In particular. Commissioners von Spakovsky 

and Weintraub staled in their Statement of Reasons that "had this invitation been mailed more 

broadly lhan it xvas, and in sufficient numbers lo raise questions about whether it was a bona fide 

invitation, or if it was really just a fundraising or advocacy piece masquerading as an invitation, 

this xvould be a differenl case." MUR 5518 (Haxvaii Democratic Party), Statement of Reasons of 

Commissioners Hans A. von Spakovsky and Ellen L. Weintraub, at 3 (Feb. 23, 2007); cf. MURs 

5511 and 5525 (Swift Boat Veterans for Truth) (fundraising solicitations containing express 

advocacy were expenditures that counted toxvards organization's threshold for political 

comniittee status). 

Rightmarch also asserts that these communications do not contain express advocacy 

under any meaning of section 100.22 because they do not include a list of items which 

Rightmarch apparently beliexes would make the communications constitute express advocacy: 

"[m]ention any candidacy, party affiliation, public office, voting or any election;/[r]efer to 

anyone's character or fitness to hold office;/[r]un in close proximity to any election or targeted to 

any particular siate;/[ni]ake any comparison betxveen candidates; or/[r]epeai any candidates' 

slogans or messages." However, the three communications at issue here fall squarely within the 

meaning of express advocacy pursuant to section 100.22(a). The three communications 

specifically state that Rightmarch is "working to defeat politicians like Hillary Clinton," 

"working to defeat politicians like Barack Obama," and "working to defeat poHticians like 

Hillary Clinton and Barack Obama." Again, however, whatever may be the utility ofthe 

presence or absence of these facts in analyzing the communication under section 100.22(b), no 

such analysis is necessary here because the scripts contain express advocacy as defined in section 

100.22(a). 

Rightmarch also asserts that 93 percent of these communications occurred in 2007, the 

year before the 2008 election. Nothing in section 100.22(a) states that the communication must 

occur in the same year as the election. A communication that expressly advocates the election or 
Memorandum to the Comniission 

Rightmarch.com PAC. Inc. (LR--\ 842) 

Request for Early Conimission Consideration of Legal Questions 

Page 10 of 10 

defeat of a cleariy identified candidate can be made in a year other than an election year. In fact, 

both Hillary Clinton and Barack Obama xvere candidates during the time that Rightmarch's three 

scripts at issue here were used. Hillary Clinton filed her stalement of candidacy seeking the 

office of President on January 22. 2007.'' Barack Obama filed his statemeni of candidacy 

seeking the office of President on February 12, 2007. According to Rightmarch, the script that 

states that Rightmarch is "xvorking to defeat politicians like Hillary Clinton" was used by the 

vendor from August 16, 2007 through February 15,2008.'" The script that states that 

Rightmarch is "working to defeat politicians like Hillary Clinton and Barack Obama" was used 

from February 16, 2008 through May 31, 2008.'' The script that states that Rightmarch is 

"working to defeat politicians like Barack Obama" was used from June 1, 2008 through 

November 3, 2008. Election Day was November 4, 2008. 

Simply put, Rightmarch's arguments aboul express advocacy advance one proposition: 

that communications by a political committee that explicitly exhort the listener to tell their 

friends to oppose named candidates for President cannot in context be considered express 

adx'ocacy. We are axvare of no authority for this proposition. 

We therefore conclude that the solicitations made in connection with two of these three 

scripts expressly advocate the defeat of a clearly identified candidate. 11 C.F.R. § 100.22(a). 

We further conclude that the solicitations made in connection wilh the third script expressly 

advocates the defeat of ixvo clearly identified candidates (Hillary Clinton and Barack Obama). 

Costs associated xvith these solicitations must be reporied as independent expenditures.''' 

2 U.S.C. § 434(b)(4)(H)(iii); 11 C.F.R. ij 104.4(a). Additionally, appropriate 24/48-hour notices 

must be disclosed as required. 2 U.S.C. ij 434(g); 11 C.F.R. 104.4(b)(2) and 104.4(c). 

Hi. RECOMMENDATION 

The Office of General Counsel recommends that the Commission direct the Audit 

Division to answer the Committee's questions in accordance with the analysis above. 

** Hillary Clinton's campaign states that she ceased being a presidential candidate on June 29, 2008, though 

she was still a candidate for reelection to the L'.S. Senate for 2012. 

The \ endor invoiced Rightmarch S2.109.465 for calls during this period. 

" The \ endor invoiced Rightmarch .S49.497.50 for calls during this period. 

The vendor invoiced Rightmarch S57.410 tor calls during this period. 

''^ In fact. Rightmarch reported approximately S563.000 in fundraising solicitations as independent 

e.\penditures during the 2007-2008 election cycle. We understand, however, that there may be factual and practical 

issues in determining the costs associated with the solicitations that constitute independent expenditures, due in part 

to the state of Rightmarch's records.