FEDERAL ELECTION COMMISSION 

WASHINGTON, D.C. 20463 

STATEMENT OF VICE CHAIR ANN M. RAVEL, 

COMMISSIONER STEVEN T. WALTHER, AND 

COMMISSIONER ELLEN L. WEINTRAUB 

Audit of the Nebraska Democratic Party (AIl-18) 

This audit presents concerns regarding the Nebraska Democratic Party's failure to keep 

monthly time-logs for payroll payments associated with its contract workers. We raised these 

same concerns in our Statement on the Audits of die Vermont Democratic Party (A11-12), 

Dallas County Republican Party (A11-14), Democratic Party of South Carolina (A11-19), and 

Republican Party ofIowa(Al 1-24). See Attachment A. We continue to assert diat the Act and 

Cammission relations require committees to maintain logs documenting the time that 

employees, including contract workers, spend on federal election activity. 

Mi- Date 

Vice Chair 

^jnk Steven T. Waldier 

Commissioner 

^lkir\ L • 

Ellen L. Weintraub 

Commissioner 
Attachment A 

FEDERAL ELECTION COMMISSION 

WASHINGTON, D.C. 20463 

STATEMENT OF VICE CHAIR ANN M. RAVEL, COMMISSIONER STEVEN T. 

WALTHER, AND COMMISSIONER ELLEN L. WEINTRAUB 

Audits of the Vermont Democratic Party (All-12), Dalias County Republican 

Party (All-14), Democratic Party of South Caroiina (All-19), and Republican Party 

of Iowa (All-24) 

These four audits all presented the same question of whether "contract labor" workers 

(i.e., independent contractors) should be treated as "employees" for purposes of the 

Commission's state party committee recordkeeping requirements.' We support the Office of 

General Counsel's position that independent contractors are "employees" for purposes of the 

recordkeeping requirements, and therefore that conunittees must maintain logs documenting the 

time that these employees spend on federal election activity ("PEA"). Unfortunately, however, 

none of the recordkeeping findings in these Audit Reports includes any analysis of contract 

workers' time.^ We write this statement to ensure that our strong views on this issue are 

' Documents related to Commission audits can be accessed at www.f 

' This issue was first raised in a request for Commission guidance made pursuant to Directive 69 with respect to the 

Dallas County Republican Party ("DCRP") audit. See LRA 903, Request for Commission Directive 69 Guidance 

Involving the DCRP (Sept. 23,2012) (hereinafter "Directive 69 Guidance"); see also Commission Directive 69 

(providing a mechanism through which the Office of Compliance ("OC") and the Office of General Counsel 

("OGC") may bring certain legal questions to the Commission for early consideration in the reports analysis or audit 

process), available at www.iec.eov/directives/directiv(e 69.Ddf. The OGC and the OC recommended that the 

Commission conclude that a state party's "contract labor" be treated as "employees" under the. provisions addressing 

FEA at 2 U.S.C. § 431(20)(a)(iv) and 11 C.F.R. § 106.7(d)(1). Directive 69 Guidance at 2-4. Commissioners 

Bauerly, Walther, and Weintraub voted to support the recommendations; Commissioners Hunter, McGahn, and 

Petersen dissented. Certification for LRA 903, dated Oct. 16,2012. At the time of this vote. Chairman Goodman 

and Vice Chair Ravel were not yet members of the Commission. 

Under Directive 69, if the Commission is unable to provide guidance on how to proceed with an affirmative vote of 

four or more Commissioners within 60 days, the Audit Division (part of the OC) must proceed with the audit 

process. After the Republican Commissioners opposed the recommendation of the OGC and the OC in the 

Directive 69 matter, however, this audit and the audits of the Vermont Democratic Party ("VDP"), the Democratic 

Party of South Carolina ("DPSC"), and the Republican Party of Iowa ("RPIA") did not include analysis of the 

committees' records of their contract workers. 

While Vice Chair Ravel was not yet a member of the Commission when the Directive 69 matter was considered, the 

undersigned all agree that party committees should keep time records for all their employees — both direct 

employees and contract workers. 
Statement of Vice Chair Ravel, Commissioner Walther, and Commissioner Weintraub 

Page 2 of3 

reflected in the public record.^ 

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

Commission's regulations, whether and how a state party conunittee may permissibly allocate 

the salary, wages, and benefits of its employees between its federal and non-federal accounts is 

dependent on the percentage of time that its employees spend on PEA or activity in connection 

with federal elections/ To document this time, the Commission's regulations require that a state 

party committee "keep a monthly log of the percentage of time each employee spends in 

connection with a Federal election." Neither the statute nor the regulations define "employee" 

for these purposes. 

Independent contractors should, however, be subject to the same recordkeeping 

requirements as other employees. In the past, the Commission has promulgated other regulations 

that expressly include independent contractors when interpreting provisions of the Act that use 

the statutory term "employees."^ Although the Cortunission did not expressly include 

independent contractors in the regulation at issue here, the same rationale previously cited by the 

Conunission in those other rulemakings—^namely, to "preclude circumvention by the expedient 

of characterizing an 'employee' as an 'independent contractor' where the characterization makes 

no difference in the individual's relationship with the... political party committee"—certainly 

applies to recordkeeping requirements as well.^ 

Accordingly, we voted to amend the Recordkeeping Finding in each of the Audit Reports 

to include the failure to maintain monthly time logs for contract workers.' With each of the 

^ This statement does not address our additional concerns regarding the RPIA's recordkeeping requirements for nonfederal payroll payments. We set out those concerns separately in our Statement on the RPIA (A11-24), dated 

March 18,2014. 

* Salaries and benefits for employees who spend more than 25% of their compensated time on FEA or activities in 

connection with a federal election in a given month must be paid only from a federal account. 2 U.S.C. 

§ 43 l(20)(A)(iv); 11 C.F.R. § 106.7(d)(l)(ii): see 2 U.S.C. § 441i(b)p). Salaries and benefits for employees who 

spend 25% or less of their time on FEA or activities in connection with a federal election must either be paid oniy 

fiom the federal account or allocated as administrative costs. 11 C.F.R. §§ 106.7(c)(1) and 106.7(dXl)(i). 

Employees who spend none of their compensated time on FEA or activities in connection with a fbderal election 

may be paid entirely wjth funds that comply with state iaw. 11 C.F.R. § 106.7(d)(lXiii)-

' 11 C.F.R. § 106.7(d)(1) (emphasis added). 

' See Directive 69 Guidance at 3 (citing the Commission's coordination rules at 11 C.F.R. § 109.21(d)(5), which 

expressly include independent contractors as falling under the statutory term "employees"). Documents related to 

all Commission rulemaking proceedings are available at www.fec.gov/fosers/. 

^ See Final Rules for Coordinated and Independent Expenditures, 68 Fed. Reg. 421,438 (Jan. 3,2003). 

' Certification in Audit Division Recommendation Memorandum ("ADRM") on DCRP, dated Jan. 30,2014.(Vice 

Chair Ravel and Commissioners Walther and Weintraub voting to amend the Recordkeeping Finding to include the 

S56,407 paid to contract workers); Certification in ADRM on VDP, dated Jan. 16,2014 (Vice Chair Ravel and 

Commissioners Walther and Weintraub voting to amend the Recordkeeping Finding to include S630 paid to contract 

workers); Certification in ADRM on DPSC, dated Jan. 16,2014 (Vice Chair Ravel and Commissioners Walther and 

Weintraub voting to amend the Recordkeeping Finding to include the SI 1,920 paid to contract workers); 

Certification in ADRM on RPIA, dated Jan. 30,2014 (Vice Chair Ravel and Commissioners Walther and Weintraub 
Statement of Vice Chair Ravel, Commissioner Walther, and Commissioner Weintraub 

Page 3 of3 

deadlocked votes, the contract workers issue continues to be excluded from the Commission's 

Audit Reports and, as a result, the Reports represent an incomplete picture of the federal activity 

of these committees. Moreover, this result, which effectively permits state party committees to 

avoid keeping records of their federal activity simply by hiring federal staffers as "independent 

contractors," is directly contrary to the purpose of the Bipartisan Campaign Reform Act. 

WX/- IS, iolfDate M. Ravel 

Vice Chair 

Date Steven T. Walther 

Commissioner 

W/F/CI iJen/L 

Date' \ Ellen L. Weintraub 

Commissioner 

voting to amend the Recordkeeping Finding to include SS8,424 paid to contract workers). Chairman Goodman and 

Commissioners Hunter and Petersen dissented in each of the motions. Id.