Nader^os 

Gonzalez 

SENT VIA U.S. MMI, E-MAIL, AND HAND DELIVERY 

July 11,2011 

Mr. Joseph F. Stolz 

Assistant Staff Director 

Audit Division 

Federal Election Commission 

Dear IVIr. Stolz: 

The Nader for President 2008 Committee submits the attached response to the Audit Division's Draft 

Final Audit report. 

If you have any questions concerning this responsCi piease contact Assistant Treasurer Neil Crossan at 

610-613-1783 or myself at 404-585-8748. 

Sincerely, 

Nathan Coppernoli 

General Counsel 

cc: Ms. Sheraline L. Thomas, MS 

Mr. Martin Favin 

Mr. Carl Mayer 

Mr. Neil Crossan 

Ms. Theresa Amato 

Mr. Bruce Afran, Esq. 

PAID FOR BY NADER FOR PRESIDENT 2008 

P.O. Box 34103, Washington, DC 20043 
The Nader for President 2008 Committee (the "Committee" or "NFP") submits the following response to 

the Audit Division's Draft Final Audit Report ("DFAR"). 

I. Title 2 Issues - Findings 2 and 3 of the DFAR 

The Title 2 issues raised in the DFAR, Findings 2 and 3, reflect that there are no new issues or 

recommended amendments raised by the Audit staff that were not already covered by the Audit staffs 

Preliminary Audit Report ("PAR"). Thus, NFP's responses to Findings 2 and 3 have not changed and NFP 

reiterates and incorporates by reference Its response to the PAR. With respect to Finding 2, NFP reports 

that it complied with aii recommended amendments by the Audit staff or demonstrated where those 

amendments were unwarranted. With respect to Finding 3, NFP notes that it had originally disclosed 

the three lines of credit draws in its Schedule C-P, and filed the Schedule C-P-1 and a copy ofthe line of 

credit agreement as soon as NFP was made aware of its Inadvertent omission. As the FEC is aware, the 

Nader campaign has been scrupulous in its efforts to comply with filings and we believe the Immediate 

correction of this inadvertent omission on this one occasion should bring this particular issue to a close. 

For a further discussion of these issues NFP respectfully refers the Commission to its response to the 

Audit staff's PAR. 

II. Title 26 Issues - Finding 1 of the DFAR 

A. 31-day and DOI rules 

With respect to the Titie 26 Issues raised in the DFAR, Finding 1, NFP reiterates and incorporates 

by reference its response to the Preliminary Audit Report's recommendation regarding the operations of 

the FEC's regulations concerning both the 31-day post-election and the bright line Date of Ineligibility 

rules. NFP raises these issues to inform the Commission of the practical effect that the 31-day and DOI 

rules and regulations have on efficient small-budget campaigns, liice NFP, that seek to complete their 

audits quickly. As a result, had these expenses or a portion thereof been credited, there would likely be 

no matching funds repayment Issue at all. Since NFP sought to expedite the audit ahead of the 31-day 

trigger, we believe that it would be appropriate for that credit to have been applied so as to encourage 

other small-budget campaigns to expedite audits and more efficientiy use the FECs resources. 

B. Allocation post-December5,2008 

With respect to the winding down allocation used after December 5,2008, both the Audit staff 

and attorneys in the Office of General Counsel stated that the Commission could consider a different 

winding down allocation than the 70/30 Primary to General allocation that was used by the Audit staff 

for all winding down expenses after the 31-day rule applied. The Audit staff Invited NFP to submit 

further documentation to support a different allocation than originally used for the period following the 

31-day rule. 

On page 14 of the DFAR, the Audit staff stated: 

If NFP can demonstrate a reasonable allocation method, pursuant to 11 CFR § 
9034.11(c), for winding down costs incurred after December 5,2008, that results in a 

higher percentage than the 70 percent primary allocation agreed upon during audit 

field work, the Commission will consider allowing a larger winding down total for NFP. 

Documentation should be provided that demonstrates a change to the allocation 

percentages. Such documentation could include a description of NFP activity after 

December 5,2008 related to primary winding down costs, an explanation of which staff 

worked on primary winding down compared to those who worked on the general 

winding down, and a list of winding down costs explaining why they were related to the 

primary rather than the generaL 

Furthermore, on Page 5 ofthe Memorandum to Assistant Staff Director Joseph F. Stolz fronri the 

Office of General Counsei, the Memorandum found that 11 C.F.R. § 9034.11 permits the Commission to 

"consider whether to increase the percentage of primary winding down expenses after December 5, 

2008." Citing precedent from the Audit Report of Nader 2000 Primary, Inc., the Memorandum noted 

that "the Commission has previously allocated 100% of expenses to a primary committee after the date 

when the general committee's winding down process is completed." The Memorandum concluded that 

the Committee has not provided documentation but that it could "include a description of Committee 

activity during this period related to the primary wind down, an explanation of which staff worked on 

primary winding down compared to those who worked on general wind down and a list of winding 

down expenses explaining why they were related to the primary rather than the general." 

In response to the framework proposed by the Office of General Counsel, NFP provided 

documentation to the Audit staff that for the time period post December 5,2008 to date the 

appropriate allocation of winding down costs is (1) a winding down ratio of 70/30 Primary to General 

from December 5,2008 until the end of December 2008 and (2) a winding down ratio of 95/5 of Primary 

to General activity from January 1,2009 to date. The combined allocation from the period of December 

5,2008 until to date/termination, supports a winding down ratio of 85/15 of Primary to General. 

In support of this position, as of January 1,2009, the Committee had no offices or field offices 

left to close. NFP's personnel was devoted to winding down the primary eiection by responding to FEC 

audit matters. There was no General financial activity with the exception of a few dozen minor accounts 

payable check transactions. Of those, nearly half were monthly assessments of de minimis bank account 

fees. The remaining skeletal personnel activity responded to the FECs audit and compliance matters. 

Only two people received compensation since the first quarter of 2009 - NFP's accountant and records 

manager - with no additional employment compensation for more than a year to-date (although some 

additional legal and accounting fees are anticipated by NFP as the audit winding-down/termination 

process remains ongoing). 

NFP reiterates that because ofthe operation ofthe 31-day rule, NFP received zero credit for any 

Primary winding down costs incurred when the auditors were on NFP's premises conducting their field 

work. The Office of General Counsel's Memorandum acknowledges "that as a practical matter, it is 
likely that the Committee Incurred some expenses between November 5,2008 and December 5,2008, 

that It would not have incurred until later (or not at all) but for the unusually early audit fieldwork." 

(Memorandum at p. 3.) An adjusted Primary to General allocation for the winding down expenses in the 

post-December 5,2008 time period is both warranted and supported by the actual expenses submitted 

to the Audit staff. NFP also reiterates that as a policy matter the FEC should credit NFP with such 

expenses so as to continue to encourage early audits by small-budget campaigns. These early audits 

allow the FEC staff to resolve smaller audits promptly to focus on larger-budget campaign audits later in 

the campaign year; it seems inequitable that NFP's early cooperation with the audit process should 

deprive It of expenses for which it would have been credited if NFP had hosted a later audit. 

In light ofthe foregoing, NFP does not view that its participation in an oral hearing concerning 

the Titie 2 issues is necessary but will make itself available through counsel if the Commission requests 

otherwise. NFP does preserve its rights to a Title 26 repayment hearing pursuant to 11 CFR 9038.2(c)(ii) 

on this matter if any outstanding issues remain following the issuance ofthe Final Audit Report. 
To: Ms. Sheraline L Thomas, Mr. Martin Favin 

From: Neil Crossan, Assistant Tlreasurer, Nathan Coppernoli, General Counsel, Nader for President 

Date: Juiy 11,2011 

Re: Winding Down Aliocation 

Thank you for the opportunity to submit additional information in support of Nader for President 

2008's ("NFP" or the "Committee") response to the Preliminary Audit Report (PAR) and in response to 

the Draft Final Audit Report DFAR. 

On page 14 of the DFAR for Nader for President 2008, the Audit Staff states: 

If NFP can demonstrate a reasonable allocation method, pursuant to 11 CFR §9034.11(c), for 

winding down costs incurred after December 5,2008, that results In a higher percentage than 

the 70 percent primary allocation agreed upon during audit field work, the Commission will 

consider allowing a larger winding down totai for NFP. ... 

Documentation should be provided that demonstrates a change to the allocation percentages. 

Such documentation could include a description of NFP activity after December 5,2008 related 

to primary winding down costs, an explanation of which staff worked on primary winding down 

costs explaining why they were related to the primary rather than the general winding down, 

and a list of winding down costs explaining why they were related to the primary rather than the 

general. 

In response, NFP provides in the body of this supplemental Audit submission a description of 

NFP activity after December 5,2008 related to primary winding down costs and an explanation of which 

staff worked on primary winding down costs explaining why they were related to the primary rather than 

the general winding down. NFP also provides an updated version of the post-December 5,2008 

spreadsheet showing a list of winding down costs and explains why they were related to the primary 

rather than the general. These three items of documentation, as requested by the Audit staff, support 

NFP's position that an allocation of 85:15 of primary to general winding down expenses should be 

adopted for the post-December 5,2008 time period. 

In examination ofthe post-December 5,2008 spreadsheet NFP arrives at this allocation analysis 

by the following: 

First, winding down for NFP began before the general election concluded as records were 

submitted to the FEC beginning in August 2008. The Audit staff completed its field work and the exit 

interview occurred before the end of the year 2008. By December 31,2008 NFP sold all of its HQ assets 

that were unnecessary for the audit and placed ail of its records and remaining assets in storage. Thus, 

as of December 31,2008, NFP virtually completed its winding down for the General election. As the 

spreadsheet reflects, oniy a few dozen transactions were recorded thereafter with nearly half of them de 

minimis monthly bank fees. 
Second, the remaining expenses from December 5,2008 to December 31,2008 are overwhelmingly 

primary winding down expenses. Those expenses reflect the following with respect to personnel: 

i. Expenses from December 6- December 31,2008 Reflect the vast majority of expenses were for 

winding down the Primary. 

Personnel involved December 5 to until December 31,2008 included the core audit response 

team: 

• Neil Crossan, Head of Finance/Assistant Treasurer; 

• Amy Carberg, Head of Compliance; 

• Nathan Coppernoli, General Counsel; 

• Matt Zawisky, "Office" Manager on site in DC to handle 

records/storage/mall/paperwork 

• Theresa Amato, manager of Amato 8i Main, LLC was paid for compliance expertise, 

to travel to Washington, DC to oversee the exit interview with audit staff and the 

audit response. 

Additional personnel between December 5,2008 and December 31,2008 included individuals who were 

paid during both Primary and General cycles and assisted in shutting down both Primary and General 

with respect to the physical office, preparing and maintaining records, or returning home. These 

individuals were: 

Loralynne Krobetzky (records/office shut down); 

Mike Welch (asset sales/office shut down); 

Christina Tobin, Mike Richardson, Steve Conn (wind down/return); 

John Wade (office shut down); 

Jason Kafoury (records archival); 

David Holmquist (IT shut down/records); 

Nick Bygon (electronic archival); 
II. Expenses after January 1,2009 Reflect Winding Down Exclusively for Primary Activities/the 

Audit. 

After January 1,2009 NFP did not have any offices In the District of Columbia or elsewhere. The 

only people on payroll were the core audit response team, Neil Crossan, Amy Carberg, Nathan 

Coppernoli, and Matt Zawisky. A consulting fee was paid to Amato 8i Main, LLC, for Ms. Amato's 

compliance expertise to respond to audit requests and guide the remainder ofthe audit process. 

As of March 1,2009, the only people remaining on payroll were Nell Crossan, the Assistant 

Treasurer, and Matt Zawisky, the records/"office" manager on site In DC. Presentiy, no one has been on 

payroll for more than a year. Some expenses, however, are anticipated for the preparation of audit 

responses and through termination. 

All other expenses reflect expenses for the audit/compliance, including records storage, the 

records database, and routine fees for copying/"offlce supplies"/ postage to respond to audit requests 

and storage. If it were not for the audit, NFP would have terminated in early Ql 2009. 

III. For both time periods, post December 5,2008 - To Date, a single overall allocation of 85:15 is 

appropriate. 

Total expenses (excluding general accounts payable and credits) from December 6,2008 to 

December 31,2008, amount to $65,625.20. Also, total expenses from January 1,2009 to date amount to 

$100,907.27. Accordingly, total winding down expenses post December 5,2008 amount to $166,532.47. 

Seventy percent of December 6 to December 31,2008 ($65,625(.70)) totals $45,937.64. Ninetyflve percent from January 1,2009 to date (not yet including expenses accrued for the ongoing audit 

responses) results in ($100,907.27(.95)) or $95,861.91. Thus, a total of Primary wind down expenses of 

85% of $166,532.47, or $141,799.55 to date is appropriate. 
Nader for President 2008 

Actual Expenses per reports 

Using 70/30 allocation 

Primary 

Actual Expenses 

General 

Dec M 2008 $ 65.625.20 $ 45,937.64 $ 19,687.56 

AprQ2009 49,324.17 34.526.92 14.797.25 

Juiy Q 2009 $ 14,537.15 10.176.01 4,361.15 

Oct Q 2009 14,725.98 10,308.19 4,417.79 

YE 2009 8,038.98 5,627.29 2,411.69 

60,638.40 

Apr Q 2010 3,060.00 2.142.00 918.00 

Jul Q 2010 $ 4,455.91 3,119.14 1,336.77 

Oct Q 2010 3,118.58 2.183.01 935.57 

YE 2010 1,110.00 777.00 333.00 

8,221.14 

AprQ2011 1,411.50 988.05 423.45 

$ 165,407.47 $115,785.23 $ 49,622.24 

Q2 2011 $ 1,125.00 $ 787.50 $ 337.50 

Total Actuals thru 6/30/2011 $ 166,532.47