"Ryan Call" To <abonlewicz@fec.gov> 

<ryan@colooop.org> ^ <iyan@cologop.org>. "'Richard Westfall"' 

05/04/2012 06:33 AM <RWestfall@halewestfall.com> 

bcc 

Subject Colorado Republican Party Response to DFAR 

History: ^ jhls message has been foiwarded. 

May 3, 2012 

Mr. Alex R. Boniewicz, Audit Manager 

Federal Election Commission 

999 E Street, NW 

Washington, DC 20463 

Sent via overnight delivery; copy via email to aboniewicz@FEC.gov 

Re: Colorado Republican Federal Campaign Committee, FECID No. C00033134 

Dear Mr. Boniewicz, 

In accordance with the procedural rules set forth in 11 CFR Part 111 and other applicable federal laws 

and regulations, the Colorado Republican Federal Campaign Committee (the "Committee") respectfully 

withdraws its request for the opportunity for a hearing before the Federal Election Commission prior to 

the Commission's adoption of a final audit report. 

The Colorado Republican Federal Campaign Committee has reviewed the Interim Audit Report and the 

Draft Final Audit Report prepared from the audit of the Committee covering the period from January 1, 

2007 to December 31,2008, and Is pleased to provide this letter as a formal response to the same. The 

Committee has also reviewed the itemized schedules, worksheets and analysis of transfers and certain 

expenditures and specific disbursements provided that the Audit Division has relied upon to assert that 

the Committee has overfunded the non-federal share of allocable activity through the Committee's 

sponsored allocation account during the audit period in question. 

The Audit Division asserts that a total of $158,845.26 was overfunded to the allocations account from 

non-federal accounts. (See "Non Federal Overfunding" worksheet, H3 Analysis tab, line 441). 

Adjustments and transfers totaling $8,120 from the allocations account back to the Victory 2002 

Account #214-555-4233 and $19,000 in payments made for non-federal expenditures with state funds 

were identified by the Audit Division to reduce the total alleged overfunding of the allocations account 

to $131,725.26. (See "Non Federal Overfunding" worksheet, H3 Analysis tab, lines 443-452). 

Upon review further of the Audit Division worksheets, the Audit Division identified $147,046.00 in 44 

unreported transfers from non-federal accounts not disclosed or under-reported on Schedule H3. 

$9,300.00 of the $147,046.00 in transfers from non-federal accounts is from seven unreported transfers 

from PAC Account # 214-556-3313 and $1,569.80 is from two unreported transfers from Small Donor 

Committee Account # 366-573-2840. (See "Non Federal Overfunding" worksheet, H3 Analysis tab. 
column C and column F). $136,376.20 in unreported transfers originating from Victory 2002 Account 

#214-555-4233 was also identified by the Audit Division. (See "Non Federal Overfunding" worksheet, H3 

Analysis tab, column C and column F). "Victory 2002 Account #214-555-4233" is indeed a non-federal 

(state) account, and was identified as such on Exhibit I ("Committee Background and Internal Control 

Questionnaire") disclosed to the Audit Division as part of the initial audit field work. 

The Committee has carefully reviewed each of the undisclosed transfers from the PAC Account # 

214-556-3313, from the Small Donor Committee Account # 366-573-2840, and from the Victory 2002 

Account #214-555-4233, which correspond to the state Political Committee, state Small Donor 

Committee, and the state Political Party Committee accounts, respectively, as maintained by the 

Committee as non-federal accounts or separate segregated funds. 

By carefully comparing the disclosures of the Committee in reports filed with the Colorado Secretary of 

State for the non-federal committees and separate segregated funds maintained by the Committee 

during the audit period, the Committee has determined with certainty that each of these previously 

unreported transfers was for state-related expenditures that were properly and fully disclosed as 

expenditures on state campaign finance reports filed by the Committee with the Colorado Secretary of 

State. Enclosed please find a detailed schedule of each previously undisclosed transfer from each of the 

various non-federal accounts and the corresponding itemized description of the expenditure(s) and 

payee(s) described in the Committee's state campaign finance reports, along with a copy of the 

corresponding state campaign finance reports as filed, individually labeled and marked for the Audit 

Division's convenience. In addition, a copy of a spreadsheet workbook and a copy of all relevant 

non-federal (state) campaign finance disclosures as filed by the Committee with the Colorado Secretary 

of State will be sent in electronic form via email. 

The Committee acknowledges that non-federal funds were transferred from the state PAC Account in 

the amount of $9,300.00, from the state Small Donor Committee Account in the amount of $1,569.80, 

and from the state Political Party Committee account in the amount of $136,376.20 to the Committee's 

federal allocations account, and that 100% in corresponding non-federal activity was subsequently paid 

out of the Committee's federal allocations account during the period in question. The Committee 

further acknowledges that such expenditures through the allocations account were in error, as the 

Committee's prior action was based upon a misunderstanding of the legal effect of 11 C.F.R. 

106.7(f)(l)(ii). At the time of the transfers and expenditures, the Committee and the Committee's 

accountants had understood that the transfer of non-federal funds and the subsequent payment of 

100% in non-federal expenses thereafter through its allocations account was not prohibited. 

Having contacted certain members of the Committee staff responsible for making expenditures and 

managing the financial books and accounts at the time, the current officers of the Committee were 

informed that for certain key periods when a substantial number of checks were being written by the 

Committee, the Committee staff did not have bank checks available from the various non-federal 

accounts, but did have bank checks for the allocations account. Rather than incurring the expense to 

purchase and the delay In receiving bank checks for each of the various federal and non-federal accounts 

maintained by the Committee at that time, the Committee staff chose to simply transfer funds 

electronically with the assistance of the Committee's accountant from the non-federal accounts into the 

allocations account, and from there make all expenditures. 

The non-federal (state) funds used in each of these 44 identified transactions were initially solicited by 

and contributed to the non-federal committees and accounts maintained by the Committee in 
accordance with Colorado's campaign finance laws and limits. The non-federal (state) character of the 

funds is not in doubt, and all state-related expenditures were properly disclosed by the Committee in 

detailed state campaign finance disclosures filed with the Colorado Secretary of State with itemized 

descriptions that make clear the character of the state expenditures were not federal election activity. 

The failure to disclose these transfers from the state PAC account, state Small Donor Committee 

account, and state Political Party Committee account on the federal filings with the Federal Election 

Commission was the result of the Committee's belief that It had fully satisfied its filing requirements by 

disclosing the corresponding non-federal expenditures made with entirely state funds on reports with 

the Colorado Secretary of State, with the allocations account serving as simply a pass-through account, 

with the transactions themselves disregarded. 

The Federal Election Commission's proposed remedy of reimbursing the non-federal (state) accounts of 

the Colorado Republican Party in the amount of $131,725.26 or more is an inadequate and improper 

remedy to the errors made in reporting and the pass-through use of the Committee's allocations 

account. The bank records and state campaign finance disclosures make clear that the character of the 

funds in question was entirely non-federal, the contributions used and the expenditures made were for 

entirely non-federal expenditures, and such non-federal expenditures were fully reported and disclosed 

in campaign finance filings with the Colorado Secretary of State. The Committee cannot now—four 

years after the transactions In question—convert $131,725.26 or more in federal funds into to state 

funds without doing significant harm to the character of the funds in question. The errors of the 

Committee were committed in the use of the allocations account as a pass-through account, and the 

failures by the Committee in not disclosing such transactions on Schedule H3 and other relevant federal 

reports, and not in the source or nature of the funds used. 

As a result of the Audit and the accompanying legal analysis provided by the Federal Election 

Committee's legal staff, the Committee has since enacted significant changes to the use of its allocations 

account, and will no longer make any transfers of non-federal funds to make payments for 100% 

non-federal expenses. In addition, and as also explained in the legal analysis provided by the Federal 

Election Committee regarding the legal effect of 11 C.F.R. 106.7(f)(l)(ii), the Committee will also no 

longer make transfers of federal funds and payments for 100% federal expenses through Its federal 

allocations account. Moreover, the Committee has recently retained new accountants that have a much 

greater degree of expertise and experience in complying with all relevant campaign finance laws, 

regulations, and procedures. 

If the Audit Division or other authorized representatives from the Federal Election Commission so direct, 

the Committee stands ready to instruct its accountants to amend its federal reports from 2007-2008 in 

order to disclose the $147,046.00 in transfers from the state PAC account, the state Small Donor 

Committee account, and the state Poiiticai Party Committee account through the Committee's 

allocations account on an amendment to Schedule H3 for the period in question. 

The Committee has also instructed its accountants to file the necessary amendments to its disclosures 

for 2007 to correct the understated receipts by $70,809 and to correct the understated disbursements 

by $61,104 in 2007, and to accurately disclose the cash-on-hand of the Committee in its federal accounts 

as of the beginning and the end of the 2007 calendar year. The Committee has also instructed its 

accountants to file such additional amendments or audit adjustments to the reported cash-on-hand 

balances for its federal and non-federal accounts to accurately report the cash-on-hand balances 

reported in its most recent filings, reconciled to the Committee's current bank statements. 
The Committee stands ready to properly address all others other matters raised in the Interim Audit 

Report and/or In the Draft Final Audit Report, and Is committed to full compliance with all applicable and 

material provisions of federal campaign finance law and the disclosure regime under the jurisdiction of 

the Federal Election Commission. 

The Committee looks forward to your favorable reply, as well as the opportunity to make all necessary 

amendments to its disclosure reports intended to address the alleged misstatements of financial activity 

identified during audit fieldwork and in the Draft Final Audit Report. The undersigned may be best 

reached via email at ryan@cologop.org or at (303) 758-3333. 

Sincerely, 

Ryan R. Call, Esq. 

Chairman 

Colorado Republican Committee 

5950 5. Willow Drive, Suite 301 

Greenwood Village, Colorado 80111 

(303) 758-3333 

www.cologop.org 

DONAT E 

m 

workbook for FEC audit reporlxlsx Non Federal Overfunding (FEC).xlsx 
"Ryan Call" To <aboniewicz@fec.gov> 

<ryan@colooop.org> <ryan@cologop.org>, '"Richard Westfall'" 

05/04/2012 06:52 AM <RWestfall@halewestfall.com> 

bcc 

Subject Colorado Republican Party Response to DFAR - exhibits 

Itemized summary of non-federal expenditures and previously undisclosed transfers to the Committee 

allocations account during the audit period in question attached. 

Sincerely, 

Ryan R. Call, Esq. 

Chairman 

Colorado Republican Committee 

5950 S. Willow Drive, Suite 301 

Greenwood Village, Colorado 80111 

(303) 758-3333 

www.cologop.org 

Itemized Analysis of Non-Federal expenditures.docx 
-Ryan Call" 

<ryan@cologop.org> 

05/04/2012 06:42 AM 

To <aboniewlcz@fec.gov> 

cc <ryan@cologop.org>. '"Richard Westfall'" 

<RWestfall@halewestfall.com> 

bcc 

Subject Colorado Republican Party Response to DFAR - exhibits 

Relevant state campaign finance reports for the state Political Party Committee during the audit period 

in question as filed with the Colorado Secretary of State attached. 

Sincerely, 

Ryan R. Call, Esq. 

Chairman 

Colorado Republican Committee 

5950 S. Willow Drive, Suite 301 

Greenwood Village, Colorado 80111 

(303) 758-3333 

www.cologop.org 

•ffi "ffi 

StateRpt-2006-12-G6to20G7-03-31.pdf StateRpt-20G7-04-01 to 2007-06-30.pdf StateRpt-2GG7-G7-01 to 2007-09-30.pdf 

StateRpt-20G7-1G-G1 to2007-12-31.pdf StateRpt-2GG7-12-31 amendment.pdf StateRpt-2GG8-G1-01 to 2008-04-25.pdf 

StateRpt-2G08-04-26 to 2008-05-26.pdf StateRpt-2G08-G5-G5 amendmentpdf StateRpt-2008-05-27 to 2008-07-02.pdf 

StateRpt-20G8-07-03 to 2GG8-07-16.pdf StateRpt-2G08-07-G7 amendment.pdf 5tateRpt-2008-07-17 to 2GG8-G7-3apdf 

StateRpt-2G08-07-31 to 2GG8-G8-27.pdf StateRpt-2008-08-04 amendment.pdf StateRpt-20G8-G8-28 to 2008-09-1 Opdf 

StateRpt-20G8-09-11 to 2G08-09-24.pdf StateRpt-2008-0g-25 to 2008-10-08.pdf StateRpt-20G8-10-09 to 2GG8-10-22.pdf 

StateRpt-20G8-10-23 to 2008-11 -3apdf StateRpt-20G8-12-01 to 2009-03-31 .pdf StateRpt-2GG9-04-15 amendment.pdf 
"Ryan Call" To <aboniewicz@fec.gov> 

<ryan@cologop.org> <ryan@cologop.org>, '"Richard Westfall'" 

05/04/2012 06:36 AM <RWestfall@halewestfall.com> 

bcc 

Subject Colorado Republican Party Response to DFAR - exhibits 

Relevant state campaign finance reports for the state PAC and the state Small Donor Committee during 

the audit period in question as filed with the Colorado Secretary of State attached. 

Sincerely, 

Ryan R. Call, Esq. 

Chairman 

Colorado Republican Committee 

5950 S. Willow Drive, Suite 301 

Greenwood Village, Colorado 80111 

(303) 758-3333 

www.cologop.org 

i^fL is m 

iS IS 

StatePAC-2008-08-18 to 2008-09-1 Opdf StatePAC-2008-G9-11 to 20G8-09-24.pdf 9tatePAC-2008-09-25 to 2008-10-08.pdf 

StatePAC-2G08-10-09 to 2008-10-22.pdf StateSDC-2008-07-31 to 2008-08-27.pdf State9DC-2008-08-28 to 2008-09-1 Opdf 

•ffi 

State9DC-2008-09-11 to 2G08-G9-24.pdf