FEDERAL ELECTION COMMISSION 

WASHINGTON, D.C. 20463 

MEMORANDUM 

TO: Patricia C. Orrock 

Chief Compliance Officer 

Thomas E. Hintermister 

Assistant Staff Director 

FROM: Adav Noti 

Acting Associate General Counsel 

Policy Division 

Lorenzo Holloway 

Assistant General Counsel 

for Compliance Advice 

Joshua Blume 

Attorney 

SUBJECT: Draft Final Audit Report - TeaPartyExpress.org (LRA 995) 

JUL 19 2016 

I. INTRODUCTION 

The Office of General Counsel has reviewed the Draft Final Audit Report ("DFAR") on 

TeaPartyExpress.org (the "Committee"). We concur with the findings in the DFAR; 

Misstatement of Financial Activity (Finding 1), Disclosure of Occupation/Name of Employer 

(Finding 2), Reporting of Apparent Independent Expenditures (Finding 3), Recordkeeping for 

Communications (Finding 4), and Failure to Itemize Debts and Obligations (Finding S). We 

comment here only to provide our reasons for concluding that it is legally appropriate to rely 

upon 11 C.F.R. § 104.14(b)(1) in support of Finding 4. If you have any questions, please contact 

Joshua Blume, the attorney assigned to this audit. 

II. RECORDKEEPING FOR COMMUNICATIONS (Finding 4) 

This finding concerns apparent communication-related expenses totaling approximately 

$3.8 million that the Committee either reported as operating expenditures or as other 

disbursements. The finding concludes that the documentation provided by the Committee 
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relating to these expenses was insufficient to enable the Audit staff to determine whether these 

categorizations were correct, or whether some or all of the expenses should have been reported 

as independent expenditures. 

We concur with this finding. The basis for the finding is 11 C.F.R. § 104.14(b)(1). This 

regulatory provision requires reporting committees to "[mjaintain records, including bank 

records, with respect to the matters required to be reported, including vouchers, worksheets, 

receipts, bills and accounts, which shall provide in sufficient detail the necessary information and 

data from which the filed reports and statements may be verified, explained, clarified, and 

checked for accuracy arid completeness" (emphasis added). 11 C.F.R. § 104.14(b)(1). 

Although the text of this regulation lists only certain types of financial documents, and 

does not specifically mention communication scripts, the authority of the regulation is not 

confined to the mentioned documents alone. The regulation does not define the "records" that a 

committee is required to maintain so narrowly. Rather, the committee is required to maintain 

records, "including" bank records, which, in turn, "includ[e]" the kinds of financial documents 

listed in the text. 11 C.F.R. § 104.14(b)(1). When a statutory or regulatory definition of terms 

"includes" certain items, the otherwise applicable canon of construction, expressio unius est 

exclusio alierius, generally does not apply. See 2A Norman J. Singer, Sutherland Slat. Const., 

§ 47.25 (T"* ed. 2014) ("The word "include" in a statute generally signals that entities not 

specifically enumerated are not excluded."). See also, e.g., White v. National Football League, 

756 F.3d 585, 595 (8'" Cir. 2014); Jones v. American Postal Workers Union, 192 F.3d 417.426 

(4"* Cir. 1999). Thus, the mere mention of certain kinds of documents in section 104.14(b)(1) 

docs not exclude other kinds of documents from its scope. 

The Commission has not interpreted this provision so narrowly as to exclude other kinds 

of documents. For example, in an advisory opinion that addressed the extent to which the 

Commission's personal use regulation, 11 C.F.R. § 1 l3.1(g)(l)(i)(H), would allow salary 

payments to a member of a candidate's family, the Commission indicated that the committee 

would be required to maintain a copy of the committee's employment contract with the family 

member and other documentation relating to the family member's employment under the 

authority of section 104.14(b). Advisory Opinion 2001-10 (Jackson). In another advisory 

opinion that construed the personal use provisions, here in the context of the.use of a car for 

campaign and for personal purposes, the Commission observed that the preservation of a mileage 

log that would be updated with each use of thje car would satisfy the recordkeeping requirements 

of 11 C.F.R. § 104.14(b) if maintained as part of the committee's accounting records. Advisory 

Opinion 2001-03 (Meeks). The Commission has also indicated that payroll deduction 

authorization forms are among the records that would satisfy the recordkeeping requirement of 

section 104.14(b)(1). See, e.g.. Advisory Opinion 1999-03 (Microsoft PAC); MUR4955 

(Metropolitan Life Insurance Company Employees' Political Participation Fund A), Factual and 

Legal Analysis (Dec. 22,1999).' Finally, in a matter involving enforcement of the requirement 

' In a subsequent unanimous Statement of Reasons, the Commission concluded that it would no longer 

consider copies of the original signed payroll deduction authorization form to be the sole adequate means of 

satisfying section 104.14(b)(1). See Sialemeni of Reasons of Chairman Michael E. Toner, Vice Chairman Robert D. 

Lenhard. and Commissioners David M. Mason, Steven T. Watther, Elien L. Weintraub. and Hans A. VonSpakovsky 

tn the Matter of Lockheed Martin Employees' PAC, MUR 5721, Audit Referral 05-10, RAD Referral 06L-01 (Jun. 
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to file 24-Hour reports of independent expenditures, the Commission admonished the respondent 

committee for failing to maintain various types of documents memorializing the dissemination 

dates of the advertisements under section 104.14(b)(l). See MUR S8S0 (Republican National 

Committee), Factual and Legal Analysis, at 6 (Dec. 17,2007). 

Although employment contracts, mileage logs, payroll deduction authorization forms, 

and the various documents memorializing independent expenditure dissemination dates are not 

specifically listed in section 104.14(b)(1), the Commission required the requesting committees to* 

maintain these kinds of records under the authority of that provision because they were essential 

for enabling the Commission to verify the legal correctness of the committees' reports of their 

permissible campaign receipts and expenses in the context of an audit or other inspection. The 

same logic supports requiring committees engaged in making independent expenditures to 

maintain the communications associated with the disbursements to enable the Commission to 

verify, and to differentiate between, the committee's independent expenditures and its operating 

expenditures. 

If the Commission interpreted the regulation narrowly to exclude all types of potentially 

verifying documents not enumerated in section 104.14(b)(1), then the capacity of the 

Commission to verify the accuracy and completeness of a committee's reporting would be 

severely restricted because not all information contained in reports may be verified by recourse 

to the types of records enumerated in section 104.14(b)(1). For example, the Federal Election 

Campaign Act of 1971, as amended, and Commission regulations require committees to report 

the purposes of their disbursements. See 52 U.S.C. § 30104(b)(4), (5). 11 C.F.R. §§ 104.3(b)(3); 

104.9. The Commission has provided examples of acceptable purpose descriptions as "dinner 

expenses, media, salary, [and] polling." See. e.g.. 11 C.F.R. § 104.3(b)(3)(i)p)- The kinds of 

bank records enumerated in section 104.14, however, would not necessarily include the type of 

information that is required to verify that the Committee used the disbursements for "dinner 

expenses, media, salary, [and] polling." Id. 

In this case, while the Committee reported the media expenses as operating expenditures 

or as Other disbursements, the Audit staff needs to ascertain the nature of the disbursements in 

order to determine whether any of these should have been reported as independent expenditures. 

Because in most cases the text of the communication associated with the disbursement 

constitutes the only evidence of the nature of the disbursement,^ and the Commission's 

13,2006). This revision of the policy does not, however, indicate that the payroll deduction authorization form is 

not appropriately included among the documents required to be maintained under section 104.14(b)(1). See 

Statement of Poiicy[,] Recordkeeping Requirements for Payroll Deduction Authorizations, 71 Fed. Reg. 38513 (Jul. 

7,2006) (signed payroll deduction authorization forms not the only adequate proof for meeting § 104.14(b)( I), but 

maintaining them is a sound recordkeeping practice and in many cases they may serve as best documentation of 

deduction authorization). 

' Indeed, in previous comments we provided to the Audit Division on several interim audit reports ("lARs"), 

we stated that using invoices alone to infer that disbursements on media expenses were made for independent 

expenditures would be legally inappropriate in the absence of the text of the associated communication. See 
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regulations require the Committee to maintain and provide "the necessary information ... from 

which [its] filed reports and statements may be verified, explained, clarified, and checked for 

accuracy and completeness," it is essential that the Audit staff have access to this information 

and that committees maintain it. 

Comments of OGC on lAR on TeaPartyExpress.Org (LRA 995), dated Dec. 1,20151