FEDERlAL ELECTION COMMISSION 

WASHIN(nUN.D.C. 20463 

MEMORANDUM 

TO; Patricia C. 

Chief Comp 

Thomas E. 

Assistant 

Audit Divisi 

Sta; 

FROM: Lisa J. Stevi 

Acting Gem 

Lorenzo Ho 

Assistant General 

Compliance 

Margaret J. 

Attomey 

INTRODUCTIOIN 

May 8,2017 

Orrock 

liance OfTiceir 

Mintermister 

iff Director 

on 

enson 

leral Counsel 

loway 

Counsel 

Advice 

orman MJ'F 

SUBJECT: Proposed Draft Final Audit Report on the Freedom's Defense Fund (LRA 1030) 

meral Counsel has reviewed the proposed Draft Final Audit Report 

Freedom's Defense Fund ("FDF"). The proposed DFAR contains four 

inancial Activity (Finding I), Disclosure of Occupation and Name of 

The Office of the G 

("proposed DFAR") on the 

findings: Misstatement of 

Employer (Finding 2), Rep6rting of Independent Expenditures (Finding 3) and Recordkeeping for 

Communications (Finding 

have any questions, please 

). We concur with the findings, and comment on Finding 3. If you 

iontact Margaret J. Forman, the attomey assigned to this audit. 
LRA 1030 Freedom's Defense F 

DFAR'Legal Comments 

Page 2 of2 

II. FUNDRAISING C 

In Findings of the 

independent expenditures t 

media-related expenditures 

Schedule B, Line 21b. The 

have been disclosed on Sell 

und 

OMMUNICATIONS AS INDEPENDENT EXPENDITURES 

)roposed DEAR, the Audit Division noted that EOF disclosed 

)taling $385,619 on Schedule E; however, EDE also made apparent 

totaling $868,015 that were disclosed as operating expenditures on 

Audit Division concluded that these media-related expenditures should 

edule E as Independent Expenditures. 

EDE raises two argi iments. First, EDE argues that it disclosed the expenditures as 

operating expenditures because the primary purpose of the communications was for fundraising. 

was not express advocacy because it was not trying to sway anyone; 

the recipients of the communication would vote. 

EDE states that its purpose 

rather, it already knew hov 

Contrary to EDE's 

examination of the speaker 

likelihood that the recipien 

11 C.E.R.§ I00.22;feea/jo 

Organization Expenditures 

the speaker is not a relevan 

Audit Division that the cos s 

Schedule E as Independent 

previous audits. See Final 

22,2012); Final Audit Report 

at 8,10 (approved Jul. 31, 

Legacy PAC that the comn i 

when determining whether 

from Christopher Hughey, 

Legacy Committee Political 

extent that a communicatio 

of the costs associated witli 

would be considered indepen 

Second, EDE argue > 

expenditures in the 2008 ai d 

the 2008 involved media bu; 

mailer can each be a comm 

an independent expenditure 

Division clarify the distinc i 

and the communications in 

losition, the regulation defining express advocacy does not permit an 

s subjective intent or purpose, nor does it permit an examination of the 

of the communication will be swayed by the communication. See 

Express Advocacy; Independent Expenditures; Corporate and Labor 

60 Fed. Reg. 35291,35295 (Jul. 6, 1995) ("[T]he subjective intent of 

consideration" under section 100.22). We, Aerefore, concur with the 

associated with these communications should have been disclosed on 

Expenditures. The Commission has arrived at this conclusion in 

Audit Report on National Campaign Fund, at 9,12-13 (approved Oct. 

on Legacy Committee Political Action Committee C'Legacy PAC"), 

: 1012). We previously noted in OGC's comments on the audit of the 

lunicator's subjective intent is not a factor the Commission considers 

a communication constitutes express advocacy. See Memorandum 

OGC to Patricia Carmona, DC, Draft Final Audit Report on The 

Action Committee (LRA 815) at 3-4 (Jan. 24,2012). Thus, to the 

n that is the subject of a disbursement constitutes express advocacy, all 

producing and disseminating or distributing that communication 

ident expenditures. 

that similar communications were not considered independent 

it of EDE. In response to this argument, the Audit Division notes that 

lys and the current audit involves mailers. However, a media buy and a 

unication for the purpose of determining whether a communication is 

11 C.E.R. § 100.16. We, therefore, recommend that the Audit 

ion that it is drawing between the communications in the 2008 audit 

this audit.