Final Audit Report of the 

Commission on The Legacy 

Committee Political Action 

Committee 

January 1, 2007 - December 31, 2008 

Why the Audit 

Was Done 

Federal law permits the 

Conunission to conduct 

audits and field 

investigations of any 

political committee that is 

required to file reports 

under the Federal 

Election Campaign Act 

(the Act). The 

Commission generally 

conducts such audits 

when a committee 

appears not to have met 

the threshold 

requirements for 

substantial compliance 

with the Act.* The audit 

determines whether the 

committee complied with 

the limitations, 

prohibitions and 

disclosure requirements 

of the Act. 

Future Action 

The Commission may 

initiate an enforcement 

action, at a later time, 

with respect to any of the 

matters discussed in this 

report. 

About the Committee (p. 2) 

The Legacy Conunittee Political Action Conunittee is a 

noncoimected, multi-candidate committee headquartered in 

Laguna Niguel, Califomia. For more information, see the chart 

on Committee Organization, p. 2. 

Financial Activity (p. 2) 

• Receipts 

o Contributions firom Individuals 

o Loans Received 

Total Receipts 

• Disbursements 

o Independent Expenditures 

o Operating Expenditures 

o Contributions to Federal Candidate 

Committees and Other Political 

Committees 

o All Other Disbursements 

Total Disbursements 

$ 1,544,747 

5,000 

$ 1,549,747 

$ 1,159,647 

220,706 

47,250 

36,992 

$ 1,464,595 

Commission Findings (p. 3) 

• Misstatement of Financial Activity (Finding 1) 

• Failure to File Notices and Properly Disclose Independent 

Expenditures (Finding 2) 

Additional Issue (p. 4) 

• Reporting of Payments for Communications 

2 U.S.C. §4380)). 
Audit Report of the 

Commission on 

The Legacy Committee Political 

Action Committee 

January 1, 2007 - December 31, 2008 
Table of Contents 

Page 

Part I. Background 

Authority for Audit 1 

Scope of Audit 1 

Audit Hearing 1 

Part II. Overview of Committee 

Conunittee Organization 2 

Overview of Financial Activity 2 

Part III. Summaries 

Commission Findings 3 

Additional Issue 4 

Part IV. Commission Findings 

Finding 1. Misstatementof Financial Activity 5 

Finding 2. Failure to File Notices and Properly Disclose Independent 

Expenditures 7 

Part V. Additional Issue 

Reporting of Payments for Communications 11 
Parti 

Background 

Authority for Audit 

This report is based on an audit of The Legacy Conunittee Political Action Committee 

(LCP) undertaken by the Audit Division of the Federal Election Commission (the 

Commission) in accordance with the Federal Election Campaign Act of 1971, as 

amended (the Act). The Audit Division conducted the audit pursuant to 2 U.S.C. 

§438(b), which permits the Conunission to conduct audits and field investigations of any 

political committee that is required to file a report under 2 U.S.C. §434. Prior to 

conducting any audit under this subsection, the Conunission must perform an intemal 

review of reports filed by selected committees to determine if the reports filed by a 

particular conunittee meet the threshold requirements for substantial compliance vnih the 

Act. 2 U.S.C. §438(b). 

Scope of Audit 

Following Commission-approved procedures, the Audit staff evaluated various risk 

factors and, as a result, this audit examined: 

1. the consistency between reported figures and bank records; 

2. the disclosure of individual contributors' occupation/name of employer; 

3. the disclosure of independent expenditiu-es; and 

4. other conunittee operations necessary to the review. 

Audit Hearing 

LCP declined the opportunity for an audit hearing. 
Part II 

Overview of Committee 

Committee Organization 

Important Dates 

• Date of Registration September 19,2006 

• Audit Coverage January 1,2007 - December 31,2008 

Headquarters Laguna Niguel, Califomia 

Bank Information 

• Bank Depositories One 

• Bank Accounts Two Checking Accounts 

Treasurer 

• Treasurer When Audit Was Conducted James V. Lacy 

• Treasurer During Period Covered by Audit James V. Lacy 

Management Information 

• Attended Commission Campaign Finance Seminar Yes 

• Who Handled Accounting and Recordkeeping Tasks Paid Staff 

Overview of Financial Activity 

(Audited Amounts) 

Cash-on-hand @ January 1,2007 $ 0 

Receipts 

o Contributions from Individuals 1,544,747 

o Loans Received 5,000 

Total Receipts $ 1,549,747 

Disbursements 

o Independent Expenditures 1,159,647^ 

o Operating Expenditures 220,706 

o Contributions to Federal Candidate 

Committees and Other Political Committees 47,250 

o All Other Disbursements 36,992 

Total Disbursements $ 1,464,595 

Cash-on-hand @ December 31,2008 $ 85,152 

^ As a result of Finding 2 (p. 7), it appears that only $310,090 of these disbursements meet the definition of 

independent expenditures. 
Part III 

Summaries 

Commission Findings 

Finding 1. Misstatement of Financial Activity 

During audit fieldwork, a comparison of LCP's reported fmancial activity with its bank 

records revealed that, for 2008, LCP understated its reported receipts and disbursements 

by $32,411 and $25,529, respectively. LCP amended its reports to materially correct the 

misstatements. 

The Commission approved the finding that LCP misstated its financial activity. (For 

more detail, see p. 5.) 

Finding 2. Failure to File Notices and Properly Disclose 

Independent E<xpenditures 

LCP disclosed independent expenditures totaling $1,159,647 on Schedule E (Itemized 

Independent Expenditures). During audit fieldwork, the Audit staff noted that only 

$412,891 of these expenditures appeared to meet the definition of independent 

expenditures and contained language expressly advocating the election or defeat of a 

clearly identified candidate. Of these independent expenditures ($412,891): 

• LCP did not file 24/48-hour notices for $374,327 in a timely maimer and did not 

file any 24-hour notices for $17,571; and 

• LCP did not properly disclose independent expenditures totaling $293,575 made 

(i.e., publicly disseminated) prior to payment as "memo" entries on Schedule E 

and as a reportable debt on Schedule D (Debts and Obligations). 

In response, LCP provided information supporting its position that the purpose of its 

direct-mail letters was fundraising and that they did not require reporting as independent 

expenditures. Regarding the Audit staffs recommendation that it submit and implement 

revised procedures for reporting independent expenditures, LCP indicated that it plans to 

terminate after the audit is completed. 

The Conunission approved the finding that, for specific communications, LCP failed to 

file notices and properly disclose independent expenditures. The Commission agreed that 

ofthe $412,891 in expenditures that the Audit staff identified, $310,090 should have been 

reported as independent expenditures. Therefore, the Commission approved a finding 

that LCP did not timely file 24/48-hour notices of $281,439, did not file 24-hour notices 

for $17,571, and did not properly disclose independent expenditures totaling $123,326 

prior to payment as "memo" entries. 

(For more detail, see p. 7.) 
Additional Issue 

Reporting of Payments for Communications 

Ofthe initial $412,891 in expenditures that the Audit staff identified as appearing to meet 

the definition of an independent expenditure and containing language expressly 

advocating the election or defeat of a clearly identified candidate, the Conunission could 

not reach a consensus on whether $102,801 of these conununications contained express 

advocacy and should be reported as independent expenditures. Thus, the Commission 

did not approve by the required four votes the Audit staffs reconunended finding that 

payments for these communications totaling $102,801 required reporting as independent 

expenditures. 

Pursuant to Commission Directive 70,^ this matter is discussed in the "Additional Issue" 

section. (For more detail, see p. 11.) 

Available at http://www.fec.gov/directives/directive_70.pdf 
Part IV 

Commission Findings 

Finding 1. Misstatement of Financial Activity 

Summary 

During audit fieldwork, a comparison of LCP's reported financial activity with its bank 

records revealed that, for 2008, LCP understated its reported receipts and disbursements 

by $32,411 and $25,529, respectively. LCP amended its reports to materially correct the 

misstatements. 

The Commission approved the finding that LCP misstated its fmancial activity. 

Legal Standard 

Contents of Reports. Each report must disclose: 

• The amount of cash-on-hand at the begirming and end of the reporting period; 

• The total amount of receipts for the reporting period and for the calendar year; 

• The total amount of disbursements for the reporting period and for the calendar year; 

and 

• Certain transactions that require itemization on Schedule A (Itemized Receipts) or 

Schedule B (Itemized Disbursements). 2 U.S.C. §434(b)(l), (2), (3), (4) and (5). 

Facts and Analysis 

A. Facts 

During audit fieldwork, the Audit staff reconciled reported financial activity with bank 

records for calendar years 2007 and 2008. A misstatement of receipts and disbursements 

was identified for 2008. The following chart outlines the discrepancies. 

2008 Activity 

Reported Bank Records Discrepancy 

Opening Cash Balance 

@ January 1,2008 

$19,508 $19,365 $143 

Overstated 

Receipts $1,066,076 $1,098,487 $32,411 

Understated 

Disbursements $1,007,171 $1,032,700 $25,529 

Understated 

Ending Cash Balance 

@ December 31,2008 

$78,413 $85,152 $6,739 

Understated 

The understatement of receipts resulted from unidentified differences that occurred 

primarily in the second half of the year. Based on a limited review of available records, it 
appeared that all contributor information received by the vendor that processed deposits 

of contributions may not have been forwarded to the vendor responsible for the data 

entry. 

The understatement of disbursements resulted from the following: 

• Refunds of contributions not reported $ 18,152 

• Bank and credit card fees not reported 4,560 

• Operating disbursements not reported 2.817 

Understatement of disbursements $ 25.529 

B. Interim Audit Report & Audit Division Recommendation 

At the exit conference, the Audit staff explained the misstatements and provided 

schedules to LCP's Treasurer and Assistant Treasurer. They agreed to amend their 

reports as necessary. 

The Audit staff recommended that LCP: 

• Amend its reports to correct the misstatements noted above; and 

• Amend its most recently filed report to correct the cash-on-hand balance with an 

explanation that the change resulted from a prior period audit adjustment. 

Further, LCP should have reconciled the cash balance of its most recent report to identify 

any subsequent discrepancies that may affect the adjustment recommended by the Audit 

staff. 

C. Committee Response to Interim Audit Report 

In response to the Interim Audit Report, LCP filed amended reports for 2008 that 

materially corrected the misstatements. In addition, LCP provided supporting 

documentation that demonstrated that amendments to its most recently filed report were 

not necessary. 

D. Draft Final Audit Report 

In the Draft Final Audit Report, the Audit staff acknowledged that LCP amended its 

reports to correct the misstatements. 

E. Committee Response to the Draft Final Audit Report 

In response to the Draft Final Audit report, LCP stated that the $85,152 ending cash 

balance as of December 31,2008, was a minimal balance that was used to pay off 

vendors and the $119 remaining balance will soon be "eaten up" by bank service charges. 

Commission Conclusion 

On June 7,2012, the Conunission considered the Audit Division Recommendation 

Memorandum in which the Audit Division recommended that the Commission adopt a 

finding that LCP misstated its financial activity for 2008. 

The Commission approved the Audit staffs recommendation. 
Finding 2. Failure to File Notices and Properly Disclose 

Independent E«xpenditures 

Summary 

LCP disclosed independent expenditures totaling $1,159,647 on Schedule E (Itemized 

Independent Expenditures). During audit fieldwork, the Audit staff noted that only 

$412,891 ofthese expenditures appeared to meet the definition of independent 

expenditures and contained language expressly advocating the election or defeat of a 

clearly identified candidate. Of these independent expenditures ($412,891): 

• LCP did not file 24/48-hour notices for $374,327 in a timely manner and did not 

file any 24-hour notices for $17,571; and 

• LCP did not properly disclose independent expenditures totaling $293,575 made 

(i.e., publicly disseminated) prior to payment as "memo" entries on Schedule E 

and as a reportable debt on Schedule D (Debts and Obligations). 

In response, LCP provided information supporting its position that the purpose of its 

direct-mail letters was fundraising and that they did not require reporting as independent 

expenditures. Regarding the Audit staffs recommendation that it submit and implement 

revised procedures for reporting independent expenditures, LCP indicated that it plans to 

terminate after the audit is completed. 

The Commission approved the finding that, for specific conununications, LCP failed to 

file notices and properly disclose independent expenditures. The Commission agreed that 

ofthe $412,891 in expenditures that the Audit staff identified, $310,090 should have been 

reported as independent expenditures. Therefore, the Conunission approved a finding 

that LCP did not timely file 24/48-hour notices of $281,439, did not file 24-hour notices 

for $17,571, and did not properly disclose independent expenditures totaling $123,326 

prior to payment as "memo" entries. 

Legal Standard 

A. Definition oflndependent Expenditures. The term "independent expenditure" 

means an expenditure by a person for a communication expressly advocating the election 

or defeat ofa clearly identified candidate that is not made in coordination with any 

candidate or authorized committee or agent of a candidate. 11 CFR §100.16. 

B. Disclosure Requirements - General Guidelines. An independent expenditure shall 

be reported on Schedule E if, when added to other independent expenditures made to the 

same payee during the same calendar year, it exceeds $200. Independent expenditures 

made (i.e., publicly disseminated) prior to payment should be disclosed as "memo" 

entries on Schedule E and as a reportable debt on Schedule D. Independent expenditures 

of $200 or less do not need to be itemized, though the committee must report the total of 

those expenditures on Line (b) on Schedule E. 11 CFR §§104.3(b)(3)(vii), 104.4(a) and 

104.11. 

C. Last-Minute Independent Expenditure Reports (24-Hour Notices). Any 

independent expenditures aggregating $1,000 or more, with respect to any given election. 
8 

and made after the 20* day but more than 24 hours before the day of an election must be 

reported and the report must be received by the Conunission within 24 hours after the 

expenditure is made. A 24-hour notice is required each time additional independent 

expenditures aggregate $1,000 or more. The date that a communication is publicly 

disseminated serves as the date that the committee must use to determine whether the 

total amount of independent expenditures has, in the aggregate, reached or exceeded the 

threshold reporting amount of $1,000. 11 CFR §§104.4(f) and 104.5(g)(2). 

D. Independent Expenditure Reports (48-Hour Notices). Any independent 

expenditure aggregating $10,000 or more with respect to any given election, at any time 

diu-ing a calendar year, up to and including the 20^ day before an election, must be 

disclosed within 48 hoiurs each time the expenditures aggregate $10,000 or more. The 

notices must be filed mth the Commission wdthin 48 hours after the expenditure is made. 

11 CFR §§104.4(f) and 104.5(g)(1). 

Facts and Analysis 

A. Facts 

Initially, LCP disclosed all expenditures as operating expenditures (Schedule B, Line 

21(b)). During 2008, LCP received notices from the Commission's Reports Analysis 

Division (RAD) questioning whether any of the expenditures, e.g., "Printing," were for 

public communications containing express advocacy. LCP's Treasurer acknowledged 

that some of the communications contained express advocacy but contended that the 

purpose of the communication was fundraising. RAD advised LCP that if the 

commimication contained express advocacy, LCP should amend its reports to disclose the 

expenditures as independent expenditures. Subsequently, LCP filed the requested 

amended reports. 

LCP disclosed independent expenditures totaling $1,159,647 on Schedule E. During 

fieldwork. Audit staff noted that most of these disbursements were for the printing and 

postage of direct mail solicitation letters and were disclosed as either in support of John 

McCain for President or in opposition to Hillary Clinton or Barack Obama for President. 

The Audit staff reviewed these expenditures to determine whether LCP reported them 

properly on Schedule £ and filed the required 24/48-hour notices. Audit staff noted that 

only $412,891 of these expenditures appeared to meet the definition of an independent 

expenditure and contained language expressly advocating the election or defeat ofa 

clearly identified candidate. A review of the direct mail pieces and invoices for those 

expenditures ($412,891) revealed the following: 

• LCP did not timely file 24/48-hour notices of its independent expenditures for 

$374,327. In addition, LCP did not file any 24-hour notices for $17,571 ofthese 

expenditures. 

LCP reported the independent expenditures when the invoices were paid. 

However, most of these payments were weeks or months after the dissemination 

date of the printed material. For expenditures totaling $293,575, LCP should 

have disclosed independent expenditures as memo entries on Schedule E, filed 
with reports covering the dates when the materials were disseminated, and 

included a corresponding debt on Schedule D. 

B. Interim Audit Report & Audit Division Recommendation 

The Audit staff addressed these matters at the exit conference and provided appropriate 

schedules to LCP representatives. The Audit staff indicated that, at this time, no 

amended reports were necessary to correct the reporting of the independent expenditures 

or to address the 24/48-hour notices that were not filed or not filed timely. LCP 

representatives stated that they would review these schedules. 

The Audit staff recommended that LCP take the following action: 

• Provide any documentary evidence that would demonstrate that these 

disbursements were not independent expenditures and therefore did not require 

24/48-hour notices; and 

• Submit and implement revised procedures for reporting independent expenditures, 

as well as for tracking dissemination dates for such expenditures, in order to allow 

for timely filing of 24/48-hour reporting notices. 

C. Committee Response to Interim Audit Report 

In response to the Interim Audit Report, LCP offered background information for why it 

was created and the purpose of its direct-mail fundraising letters. LCP explained that it 

was formed in 2007 as a non-connected Political Action Committee (PAC) that was not 

supported by any sponsoring organization such as a labor union or corporation. There 

was 110 permanent staff, office or office equipment. It was formed wdth the intention of 

raising funds to allow it to participate in the 2008 general election by making direct 

contributions to candidates for federal office. LCP indicated that the committee was the 

epitome ofa "grass roots" attempt to participate in the 2008 Federal elections. 

LCP explained that its direct-mail advisors obtained lists of proven donors to Republican 

and conservative causes and tested various content appeals in the letters to these donors. 

The various tests included content with references to elected officials and presidential 

candidates to clue the recipient audience that LCP was a conservative Republican PAC 

worthy of their support. LCP stated that the purpose of these mailings was not to 

intervene in any election. LCP indicated that the facts demonstrated that: the timing of all 

of its mailings had no reference to the timing of primary elections during 2008; the 

content of the letters, other than sometimes including some words considered "express 

advocacy" by the Commission, did not urge the recipient audience to vote for any 

particular candidate; and the audience was selected for its fundraising value, vsdth no 

consideration for its electoral value. Thus the expenditures' content, timing and 

distribution, and audience served a fundraising purpose but not an electoral purpose. 

LCP stated that it disagreed that any of its direct-mail fundraising letters constituted 

independent expenditures. LCP noted that the Conunission defines an independent 

expenditure at 11 CFR §100.16 as a communication expressly advocating the election or 

defeat of a clearly identified candidate. LCP acknowledged that some of its mailings did 

include words of express advocacy. However, LCP thought that if the Commission 
10 

considered all of the facts, it should agree that LCP's fundraising letters were not 

independent expenditures and that the special reporting rules applicable to independent 

expenditures (such as the 24/48-hour notices or memo entries) should not apply. LCP 

stated its belief that direct-mail fundraising letters should be excluded from the definition 

oflndependent expenditures, and that the intent of the regulation was not to include direct 

mail fimdraising expenditures as independent expenditures. LCP urged the Commission 

to reform its reporting requirements for grass-roots organizations that engage in directmail fundraising since it believes that these letters are not independent expenditures. 

LCP indicated that it had decided that the time requirements, coordination and record 

keeping are not worth the effort of continuing to participate and as such, plan to terminate 

the committee after the audit is completed. 

The Audit staff does not dispute that LCP's intention was to raise funds via the directmail letters. However, LCP acknowledges, and the Audit staff agrees, that some of these 

letters included express advocacy language such as "Vote for John McCain". Since these 

expenditures meet the definition of an independent expenditure and the regulation does 

not exclude direct-mail fundraising letters from the definition, the Audit staff believes 

that the documentary evidence provided does not support LCP's assertion that none of 

these expenditures are independent expenditures. 

D. Draft Final Audit Report 

The Draft Final Audit Report concluded that LCP failed to file notices and properly 

disclose independent expenditures. LCP's response to the Draft Final Audit report did 

not address this matter. 

Commission Conclusion 

On June 7,2012, the Conunission considered the Audit Division Recoimnendation 

Memorandum in which the Audit Division recommended that the Conunission adopt a 

finding that LCP did not timely file 24/48-hour notices of $374,327 and did not file 24-

hour notices for $17,571^ and did not properly disclose independent expenditures totaling 

$293,575 prior to payment as "memo" entries. 

The Commission approved this finding with respect to specific conununications. (See 

Additional Issue below). The Commission agreed that of the $412,891 in expenditures 

that the Audit staff identified $310,090 should have been reported as independent 

expenditures. Therefore, the Commission approved a finding that LCP did not timely file 

24/48-hour notices of $281,439 and did not file 24-hour notices for $17,571 and did not 

properly disclose independent expenditures totaling $123,326 prior to payment as 

"memo" entries. 

^ Due to a typographical error in the Audit Division Recommendation Memorandum, the amount was 

improperly presented as $17,491. 
11 

Partv 

Additional Issue 

Reporting of Payments for Communications 

Summary 

Of the initial $412,891 in expenditures that the Audit staff identified as appearing to meet 

the definition of an independent expenditure and containing language expressly 

advocating the election or defeat of a clearly identified candidate, the Commission could 

not reach a consensus on whether $102,801 of these communications contained express 

advocacy and should be reported as independent expenditures. Thus, the Commission 

did not approve by the required four votes the Audit staffs recommended finding that 

payments for these communications totaling $102,801 required reporting as independent 

expenditures. 

Pursuant to Commission Directive 70, this matter is discussed in the "Additional Issue" 

section. 

Legal Standard 

A. Definition of Independent Expenditures. The term "independent expenditure" 

means an expenditure by a person for a communication expressly advocating the election 

or defeat of a clearly identified candidate that is not made in coordination with any 

candidate or authorized conunittee or agent of a candidate. 11 CFR §100.16. 

B. Disclosure Requirements - General Guidelines. An independent expenditure shall 

be reported on Schedule £ if, when added to other independent expenditures made to the 

same payee during the same calendar year, it exceeds $200. Independent expenditures 

made (i.e., publicly disseminated) prior to payment should be disclosed as "memo" 

entries on Schedule E and as a reportable debt on Schedule D. Independent expenditures 

of $200 or less do not need to be itemized, though the committee must report the total of 

those expenditures on line (b) on Schedule E. 11 CFR §§104.3(b)(3)(vii), 104.4(a) and 

104.11. 

C. Last-Minute Independent Expenditure Reports (24-Hour Notices). Any 

independent expenditures aggregating $1,000 or more, with respect to any given election, 

and made after the 20* day but more than 24 hours before the day of an election must be 

reported and the report must be received by the Commission within 24 hours after the 

expenditure is made. A 24-hour notice is required each time additional independent 

expenditures aggregate $1,000 or more. The date that a communication is publicly 

disseminated serves as the date that the committee must use to determine whether the 

total amoimt of independent expenditures has, in the aggregate, reached or exceeded the 

threshold reporting amount of $ 1,000. 11 CFR §§ 104.4(f) and 104.5(g)(2). 
12 

D. Independent Expenditure Reports (48-Hour Notices). Any independent 

expenditure aggregating $10,000 or more v^th respect to any given election, at any time 

during a calendar year, up to and including the 20tii day before an election, must be 

disclosed within 48 hours each time the expenditures aggregate $10,000 or more. The 

notices must be filed with the Commission within 48 hours after the expenditure is made. 

11 CFR §§104.4(f) and 104.5(g)(1). 

Facts and Analysis 

A. Facts 

As detailed in Finding 2 above, during audit fieldwork, the Audit staff identified 

communications totaling $412,891 that possibly met the definition of an independent 

expenditure. The Commission could not reach a consensus on whether $102,801 ofthese 

communications contained express advocacy and should be reported as independent 

expenditures. As independent expenditures, the payments for these communications 

would necessitate certain disclosure requirements including the filing of 24/48-hour 

notices. 

B. Interim Audit Report & Audit Division Recommendation 

At the exit conference, the Audit staff presented this matter as a finding for the failure to 

file notices and properly disclose independent expenditures LCP representatives stated 

that they would review the schedules provided by the Audit staff. 

The Interim Audit Report included these communications in Finding 2 and the Audit staff 

recommended that LCP take the following action: 

• Provide any documentary evidence that would demonstrate that these 

disbursements were not independent expenditures and therefore did not require 

24/48-hour notices; and 

• Submit and implement revised procedures for reporting independent expenditures, 

as well as for tracking dissemination dates for such expenditures, in order to allow 

for timely filing of 24/48-hour reporting notices. 

C. Committee Response to Interim Audit Report 

As detailed in Finding 2 above, LCP's response to the Interim Audit Report provided 

various reasons for why the payments for these commimications should not be reported 

as independent expenditures. 

D. Draft Final Audit Report 

The Draft Final Audit Report concluded that LCP failed to file 24/48-hour notices and 

properly disclose independent expenditures. LCP's response to the Draft Final Audit 

report did not address this matter. 

Commission Conclusion 

On June 7,2012, the Commission considered the Audit Division Recommendation 

Memorandum in which the Audit Division recommended that the Conunission adopt a 

finding that LCP failed to file notices and properly disclose independent expenditures. 
13 

For Finding 2 above, the Conunission did not approve by the required four votes the 

Audit staffs reconunended finding that payments for these communications totaling 

$412,891 required reporting as independent expenditures. The Commission could not 

reach a consensus on whether conununications totaling $102,801 contained expressed 

advocacy and should be reported as independent expenditures. 

Pursuant to Commission Directive 70, this matter is discussed in the "Additional Issue' 

section.