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SCROBLAND9JONESDAY.COM 

April 12,2017 

VIA ELECTRONIC AND U.S. MAIL 

Thomas Hintermister 

Assistant Staff Director, Audit Division 

Federal Election Commission 

999 B Street, N.W. 

Washington, D.C. 20463 

Re: NY Republican Federal Cainpaign Committee 

Dear Mr. Hintecmister: 

We write on behalf of the NY Republican Federal Campaign Committee ("Committee") 

to respond to items raised in the Federal Election Commission's C'FEC" or "Commission") 

Interim Audit Report issued on February 23,2017 ("Report"), concerning the Committee's, 

activities during Ae 2011-2012 election cycle. 

The Committee hopes it has made clear to the Commission during the course of this audit 

that it takes its federal campaign finance compliance and reporting obligations very seriously. 

While the Committee expects always to make best efforts to report its campaign finance 

activities completely and accurately, after the 2012 elections. Committee leadership realized that 

the recordkeeping and compliance efforts during that cycle had not wholly lived up to these 

expectations. Consequently, in early 2013, Committee leadership hired a new Director of 

Operations, replaced several other members of the 2012 recordkeeping and compliance staff, and 

implement^ various corrective actions, dedicating substantial resources toward revamping the 

recordkeeping and compliance operation to ensure that the issues of the 2011-2012 election cycle 

were corrected for future election cycles. 

This audit covers activity that transpired up to over six years ago and thus precedes the 

tenures of most current Committee staff. Nevertheless, the Coirunittee has sought to cooperate 

and comply with the requests and recommendations of the Audit Division as best it can 

throughout the audit process. The Committee indeed has devoted significant time and resources 

to try to fiilfill the Audit Division's document requests (including those set forth in the Report) 

while simultaneously ensuring it meets its ongoing operational and reporting demands. 
Mr. Thomas Hintermister 

April 12,2017 

Page 2 

1. Misstatement of Financial Activity 

The Report identifies certain purported misstatements of financial activity in the 

Committee's disclosure reports from the 2011-2012 election cycle. As the Report recognizes, the 

overwhelming cause of these discrepancies was the credit card company being able to provide 

only a single account into which contributions could be deposited. As a result of this limitation, 

! the Conunittee could use only one account as a merchant account for processing all received 

i credit card contributions, boA federal and state. Accordingly, all credit card contributions 

initially were processed through the federal account, with any contributions intended for the state 

accounts promptly transferred to the state accounts. Cf. Advisory Opinion 2001-17 (DNC 

Servs.). None of Ae non-federal funds ever were used for federal activities. Funds intended for 

! and transferred to the state accounts were not reported on the Conunittee's federal disclosures 

[ because they were not federal receipts subject to EEC regulation; however, those funds were 

j disclosed on the public record - in the Committee's state reports. 

i 

I 

The Report nonetheless requests that the Committee amend its disclosure reports from 

\ 2011 and 2012 in order to reflect the receipt and subsequent transfer out of the non-federal 

\ contributions, as well as to correct other, smaller misstatements noted in the Report. Based on 

i conversations with its accountants, the Committee understands that, given the significant passage 

j of time since the 2011-2012 election cycle, even if it were to undertake such costly forensic 

I stc^s, it nonetheless may prove impossible to reconstruct the records necessary to recreate its 

< filings in order to remedy the Report's findings. Given its limited resources, asking the 

Committee to try is too great a burden to ask it to undertake. 

As the Report acknowledges, however, after 2012 the Committee implemented new 

protocols for processing credit card contribution receipts that segregated the credit cards by 

j different merchant numbers. Now the Committee has the ability to process contributions made 

I by credit cards into the qjpropriate state or federal cash accounts. Although this is a time-

' consuming, manual process, it allows for accurate depositing and, in turn, accurate reporting of 

credit card contributions. Furthermore, since the Committee hired its current Director of 

Operations in January 2013, the information disclosed on the Corrunittee's FEC reports 

consistently has been reconciled with the Corrunittee's accountant before filing. Monthly cash 

accoimt reconciliations are completed prior to submission, and all receipts and disbursements 

(including deposits in transit and outstanding checks) have been accurately and timely reported. 

2. Recordkeeping for Employees 

The Report identifies $713,427 in allocated state and federal payments to Conunittee 

employees for which the Committee did not maintain monthly payroll logs during the 2011-2012 

election cycle (the Report does not provide a breakdown of this figure by time, either by month 
Mr. Thomas Hintermister 

April 12.2017 

Page 3 

or year). The Report recognizes that the Committee did not keep contemporaneous payroll logs 

throughout the covered period. Yet it requests that the Committee provide such logs. Clearly, the 

Conunittee is unable to create true and accurate time logs for activity that occurred up to more 

than six years ago - especially for individuals who, for the most part, have not work^ for the 

Committee in several years. 

The Conunittee, however, has already established that it made every effort to ensure that 

its employees who spent a significant portion of their time working in cormection with federal 

elections during the 2011-2012 election cycle were paid properly from the Cormnittee's fedieral 

account. As the Report itself acknowledges, the Committee provided the Commission affidavits 

from the Cormnittee's Executive Director during the 2011-20.12 election cycle. Those sworn 

affidavits make clear - subject to penalty of perjury - which of the Committee's employees 

during the 2011-2012 election cycle spent less than 2S% of their time on activities in cormection 

with federal elections and thus could be paid using an allocation of federal and state funds rmder 

the Commission's regulations. 

The Committee also has acknowledged that it needed to improve its system for keeping 

and maintaining monthly employee time logs, and that it has, in &ct, done so. In early 2014, after 

the Commission made its policy regarding enforcement of the time-log requirement clear, the 

Conunittee irrunediately adopt^ and implemented a mandatory time-keeping policy applicable 

to all Committee staff, which is run through the Committee's Director of Operations. A copy of 

' that policy and a sample monthly time log are being provided with this response letter, as 

i requested in the Report. See Ex. A. 

3. Disclosure of Name of Employer/Occupation 

j The Report recorrunends that the Committee establish "best efforts" by arhending its 

2011 -2012 election cycle reports to disclose missing employer/occupatiorr information for 

certain contributors who made contributions to the Committee during that election cycle and for 

1 whom the Conunittee possesses the required information. 

I 

The Committee is amending its reports consistent vdth the Commission's 

recommendation. As approved by the Audit Division on March 16,2017, the Committee has 

elected to do so using Ae disclosure method set forth at 11 C.F.R. § 104.7(b)(4)(i)(A). 

Accordingly, the Committee will be filing Avith its next regularly scheduled report (i.e., its 2Q17 

April Mon^y Report) an amended memo Schedule A listing those 2011-2012 contributions for 

which previously omitted contributor identifications have been received. 

Furthermore, the Conunittee vnshes to reiterate that, as the Report notes,, since 2012 the 

Committee has made its "best efforts" procedures a point of compliance emphasis, the 
4 

Mr. Thomas Hintermister 

i April 12.2017 

Page 4 

f 

I Committee takes great care to send and keep records of its follow-up correspondence with 

i federal contributors consistent with PEG recommended procedures. The Committee also has 

! implemented a related policy to ensure that it promptly updates the public record to reflect any 

i new contributor information it receives as a result of its test efforts. 

I 

4. Reporting of Apparent Independent Expenditures (Volunteer Materials Exemption) 

The Report identifies and questions the rutture of $1,142,503 in disbursements that the 

Committee disclosed on Schedule B supporting Line 30(b) as "Federal Election Activity Paid 

Entirely with Federal Funds." Despite Ae Committee's consistent - and already supported -

position that these disbursements dl related to mailings distributed by the Committee using 

volunteers and thus were not allocable to any candidates under the volimteer materials exemption 

(11 C.F.R. § 100.87), the Report second-guesses that stance and demands additional information 

to (further) establish the non-allocable nature of the costs. 

The Committee previously submitted sworn affidavits, with associated invoices and 

mailers, from several mail vendors and others describing the role volunteers played in preparing 

and distributing various mailers paid for by the Conunittee in connection with certain 2011 and 

2012 elections. Those affidavits detailed the hands-on role that the Committee's legal counsel, 

David Previte, played during the 2011-2012 election cycle in working with vendors to ensure 

that there was adequate volunteer involvement in the production and distribution of the mailers. 

Mr. Previte, moreover, submitted his own affidavit detailing his oversight of the Committee's 

volunteer mail program and related reporting efforts in 2011 and 2012. 

The Committee is submitting five additional sworn affidavits with this response letter. 

Four of the affidavits have teen provided by mail vendors involved in the distribution of 

mailings not addressed in the seven affidavits submitted previously. These affidavits detail the 

active role that volunteers played in the production and distribution of various mailers at. the 

instruction of and in coordination with, the Committee stad, in particular, David Pievite. See 

Exs. B-E. The other affidavit being submitted with this letter is a second, affidavit of Mr. Previte, 

Mr. Previte once again explains his oversight role in 2011 and 2012 and attests that "[a]ll of the 

express advocacy mailings reported as federal election activity on Line 30(b) of the Committee's 

FEC disclosure reports during the 2012 Election Cycle were part of the Committee's Volunteer 

Mail Program," and also that he "followed the same procedures described in [his earlier 

j affidavit] to ensure there was substantial volunteer participation in all of the mailings' production 

j and distribution." Ex. F, at ^ 8. 

These affidavits, in combination with the materials previously submitted, more than 

sufficiently establish that all of the expenditures at issue in the Report were appropriately treated 

and reported as non-allocable under the volunteer materials exemption. 
Mi-. ThpmasHihtennistiBr 

April 1-2,2017 

Pages 

We appreciate the Commission's attention to this rKppnse. 

Respectfully submitted,, 

Megan Sowards Newton 

£. Stewart Crosland 

Cc: Mr. Tesfai Asmamaw 

Ms. Nicole Burgess