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 Republican Party of lowa (A11-24)

In the Commission’s audit of the Republican Party of Iowa (“RPIA”), the Audit Division,
in consultation with the Office of General Counsel, recommended that the Commission approve
a finding that RPIA failed to maintain monthly time logs for $476,442 in payroll consisting of
both payments allocated between federal and non-federal funds and 100% non-federal funds.!
We supported this recommendation. The Commission could not agree by the required four
votes, however, that $141,066 of this amount, consisting of payments to employees paid solely
out of the RPIA’s 100% non-federal account, should be included in the audit finding.” We write
to explain why we support recordkeeping requirements for non-federal employees.’

The purpose of the Commission’s audit process is to ensure that audited committees are
conducting their federal activity in accordance with the Federal Election Campaign Act, as
amended (“the Act”). Disbursements for federal activity must be reported to the Commission
and made with funds subject to the limitations, prohibitions, and reporting requirements of the
Act. Whether and how a state party committee 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 federal election activity (“FEA”) or activity in
connection with federal elections.* To document this time, our regulations require that a state

' Documents related to Commission audits can be accessed at www.fec.gov/auditsearch/auditsearch.do.

? See Certification of the Audit Division Recommendation Memorandum on the Republican Party of Iowa, dated
January 30, 2014. The Commission could agree only to include $336,569 worth of payments in the recordkeeping
finding. Because our colleagues disagreed with the Audit Division’s recommendations as to $141,066 of 100% non-
federal payments in the recommended finding, the Report discusses this issue in the “Additional Issues” section
rather than in the Report’s “Findings.” See Proposed Final Audit Report of the Commission at 10-12.

> This statement does not address our additional concerns regarding this committee’s recordkeeping requirement for
its contract workers. We set out those concerns separately in our Statement on the Audits of the Vermont
Democratic Party (A11-12), Dallas County Republican Party (A11-14), Democratic Party of South Carolina
(A11-19), and Republican Party of Iowa (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. §
431(20)(A)(iv); 11 C.F.R. § 106.7(d)(1)(ii); see 2 U.S.C. § 441i(b)(2). 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 only
from the federal account or allocated as administrative costs. 11 C.F.R. §§ 106.7(c)(1) and 106.7(d)(1)(i).
Employees who spend none of their compensated time on FEA or activities in connection with a federal election
may be paid entirely with funds that comply with state law. 11 C.F.R. §§ 106.7(c)(1) and 106.7(d)(1)(iii).


A11-24 (Republican Party of lowa)
Statement of Vice Chair Ravel, Commissioner Walther, and Commissioner Weintraub
Page 2 of 2

party committee “keep a monthly log of the percentage of time each employee spends in
connection with a Federal election.” In the audit process, the Commission compares these logs
against a committee’s reporting of federal activity to verify that the committee used the proper
amount of federal funds to pay for federal activity. In the absence of such documentation, the
Commission has no way of determining whether a state party committee has paid its federal
employees with impermissible non-federal funds.

The Commission’s regulations make clear that state party committees have an obligation
to maintain appropriate records for all employees. The unwillingness to require any
documentation for expenses that a committee simply claims to be 100% non-federal severely
limits the Commission’s ability to implement the Act. This approach is both contrary to the
plain language of the recordkeeping requirements in the Commission’s regulations and creates a
perverse incentive for state party committees to avoid keeping records of their activities. On the
other hand, requiring committees to keep logs of their employees’ federal activity—even when
the percentage of federal activity is zero—provides a strong prophylactic reminder to committees
to monitor their employees’ federal and non-federal activity to ensure that all employees who
spend any time on federal activity are paid with the appropriate amount of federal funds. Given
this benefit, it is not overly burdensome for committees to maintain regular logs for their
employees who have spent no time on federal activity.

There is no jurisdictional question here; the Commission is empowered t to review records
of both state and federal spending for federally-registered political committees.° Our ability to
comprehensively audit committees that influence federal elections is central to the Commission’s

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Date _Ann M. Ravel
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Date Steven T. Walther
Commissioner

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Date Ellen L. Weintraub
Commissioner

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

6 See 2 U.S.C. § 438(b).