FEDERAL ELECTION COMMISSION 

Wi\SHINCTON, 0.C 20463 

MEMORANDUM 

TO; 

FROM: 

Patricia C. Orrock 

Chief Compliance Officer 

Thomas Hintermister 

Assistant Staff Director 

Audit Division 

Lisa J. Stevenson 

Deputy General Counsel - Law 

Lorenzo Holioway ^ 

Assistant General Counsel 

Compliance Advice 

Danita C. Alberico ^ ^ 

Anomey 

SUBJECT: Preliminary Audit Report on the 2012 Tampa Bay Host Committee, Inc. 

(LRA 948) 

The Office of Genera! Counsel reviewed the draft Preliminary Audit Report ("PAR") on 

the 2012 Tampa Bay Host Committee, Inc. ("Committee"). The draft PAR did not contain any 

findings of material non-compliance.' The cover memorandum transmitting the draft PAR to this 

Office raised an issue, however, regarding the Committee's payment of national convention 

related expenses. For the reasons discussed below, we recommend that the Audit Division 

consider presenting the issue to the Commission in the cover memorandum transmitting the PAR 

to the Commission. If you have any questions, please contact Danita C. Alberico, the attorney 

assigned to this audit. 

The Audit Division advised this Office that the Committee may have made impermissible 

expenditures for televising and staging the 2012 Republican National Convention rather than for 

' We recommend that the Commission consider this document in Executive Session because the Commission 

may evennially decide to pursue an investigation of matters pertaining to the proposed report. 11 C.F.R. §§ 2.4(a} and 

(b)(6). 
Comments on the Preliminary Audit Report 

2012 Tampa Bay Host Committee, Inc. (LRA 948) 

Page 2 

promoting the host city and its commerce or defraying convention expenses. If so, the 

expenditures could constitute in-kind contributions to the Committee on Arrangements that are 

subject to the convention expenditure limitation. The regulations promulgated under the 

Presidential Election Campaign Fund Act provide that expenditures made by a host committee 

shall not be considered expenditures by a national committee and shall not count against the 

expenditure limitation provided the funds are spent in accordance with 11 C.F.R. § 9008.52. See 

11 C.F.R. § 9008.8(b)(l). Pursuant to section 9008.52(b), the categories of permissible host 

committee expenditures generally relate to disbursements for promoting the convention city and 

its commerce and defraying convention expenses (i.e., infrastructure related expenditures made to 

prepare the convention hall to host the convention). For example, the host committee can incur 

expenses to promote the suitability of the city as a convention site and it can incur expenses for 

construction at the convention location. 11 C.F.R. § 9008.S2(b)(l) and (S). By contrast, the 

Commission has found that expenditures primarily related to and for the purpose of presenting the 

television image of the convention to attendees and the general public are impermissible host 

committee expenses because they relate to conveying and enhancing a party's message in the hope 

of influencing the public to support the party hosting the convention and its presidential candidate. 

See Report of the Audit Division on San Diego Host Committee/Sail to Victory '96 ("San Diego 

Host"). 

The auditors indicated that their review of the Committee's contract with David J. Nash 

and Associates, Inc. ("Nash"), the vendor contracted to produce the Republican National 

Convention, specified services that may not relate to promoting the host city or defraying 

convention expenses. The auditors, however, did not retrieve detailed information about these 

expenses during the audit fieldwork. Therefore, there is a question of fact as to whether these 

expenses were for the purpose of presenting the television image of the convention - similar to 

those the Commission found impermissible in the San Diego Host audit.^ Id. Based on the 

information and documentation the Audit Division currently possesses, it eannot confirm whether 

the Committee's disbursements to Nash were in accordance with 11 C.F.R. § 9008.52(b) or not. 

The auditors would need to obtain additional information and documentation from the Committee 

to determine whether the disbursements to Nash were permissible. 

The Audit Division asked whether it should seek additional information from the 

Committee to determine whether payments to Nash were for the purpose of presenting the 

television image of the convention. To assist with the resolution of this issue, the auditors noted 

that Nash has been the vendor producing the Republican National Convention for every election 

cycle since the San Diego convention in 1996. The auditors provided a chart which showed that 

the amounts paid by the host committees to Nash since 1996 had steadily increased. The sources 

for this chart were the host committees' disclosure reports and the host committees' disbursement 

databases. The compiled information raised a question for the auditors regarding whether the 

respective host committees for the Republican national conventions since 2000 paid Nash for 

television production expenses that were the same as those deemed impermissible in the San 

^ The 1996 San Diego Host expenditures were also made to Nash and were for services that included 

producers, directors, production staff, music/orchestra, rigging stage labor, satellite, special effects, makeup and 

hairdressing, video operations, sound operations, video segments, editing, and graphics. 
Comments on the Preliminary Audit Report 

2012 Tampa Bay Host Committee, Inc. (LRA 948} 

Page 3 

Diego Host audit. Factually, however, the auditors could not connrm that the prior host 

committees' expenditures were for the same production costs at issue in the San Diego Host audit.^ 

lltere is no legal impediment to the Audit Division seeking additional information from the 

Committee to resolve this issue as it pertains to the 2012 'I'ampa Bay Host Committee. The 

Commission's regulations contemplate that the auditors may conduct additional fieldwork af^er 

the completion of the original fieldwork. See 11 C.F.R § 9007.1(b)(3).^ As a general matter, the 

Audit Division has some discretion in determining if additional information is necessary for the 

audit. In exercising this discretion, however, the Audit Division may wish to consider the time that 

would be required to obtain this information and the stage of the audit. If the Audit Division 

wishes to seek the Commission's input, it can do so by raising the issue in the cover memorandum 

to the Commission.^ 

irthere was inrormation that showed that the prior host committees' expenditures to Nash were the same as in 

the San Diego Host audit, then this may suggest that the Tampa Bay Host Committee made simiiar expenditures to 

Nash. 

* Section 9007.1 (bK3) is a general election financing regulation that is incorporated by reference in the host 

comminee regulations at 11 C.F.R. § 9008.S4.