JONES DAY 

SI LOUISIANA AVENUE. N.W. • WASHINGTON. O.C. 20001.2113 

TELEPHONE: +1.202.879.3939 • FACSIMILE; +1.202.626.1700 

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MSOWARDSNEWTON6JONESDAV.COM 

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SCROSLAND6JONESDAY.COM 

August 25,2017 

VIA ELECTRONIC AND U.S. MAIL 

Thomas Hintermister 

Assistant Staff Director, Audit Division 

Federal Election Commission 

999 E Street, N.W. 

Washington, D.C. 20463 

Re: Response of the NY Republican Federal Campaign Committee to Findings 

Referenced in the Federal Election Commission's Draft Final Audit Report 

Dear Mr. Hintermister: 

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

in response to the Federal Election Commission's ("FEC" or "Commission") Draft Final Audit 

Report issued on August 10, 2017 ("Draft Report"). Almost all of the activity at issue in this 

audit occurred over five years ago and preceded the tenures of most of the Committee's current 

compliance and recordkeeping staff, including its Director of Operations. Nonetheless, the 

Committee has attempted to cooperate and comply with the Audit Division's many requests and 

recommendations throughout the audit process, dedicating substantial time arid resources toward 

doing so. {The Committee is ^dy for the process to come to ah end and waives its pght to^ 

(hearing regarding the Draft Report.) The Committee, however, provides the following comments 

concerning the Draft Report's findings for the Commission's consideration. 

> Finding 1: Misstatement of Financiai Activity. Finding 1 of the Draft Report again 

identifies certain purported misstatements of financial activity in the Committee's disclosure 

reports from the 2011-2012 election cycle that, as previously explained, predominantly were 

driven by the processing of nonfederal donations made by credit card. At the time, the credit 

card company could provide only a single account into which contributions could be deposited, 

which meant that the Committee could use only one account as a merchant account for 

processing all received credit card contributions - both federal and state. All credit card 

contributions, consequently, were processed initially through the federal account, with all 

donations intended for the state accounts promptly transferred to the state accounts and not used 

for federal election activities. Although the Committee no longer processes credit card receipts 

in this manner, it strongly believes that it remained compliant at all times and correctly omitted 
Mr. Thomas Hintermister 

August 25,2017 

Page 2 

such nonfederal receipts (which were reported on state-level reports) from its FEC disclosure 

reports. 

In Advisory Opinion 2001-17 (DNC Servs.), the Commission recognized that a party 

committee may initially deposit a donation of nonfederal funds in its federal account without 

violating 11 C.F.R. § 102.5(a)(2), so long as it promptly transfers those funds to a nonfederal 

account. Although Advisory Opinion 2001-17 concerned receipts of composite 

federal/nonfederal contributions made by a single check, its logic applies equally here. 

Section 102.5(a)(2) itself makes no exception for deposits of nonfederal funds in a federal 

account - whether by a composite check or otherwise. Yet the Commission prudently 

recognized that party committees need administrative flexibility in dealing with their receipts. 

As long as nonfederal donations received by a federal account are promptly transferred to a 

nonfederal account and not used on federal activity, the party committee remains compliant with 

§ 102.5(a)(2), and the nonfederal funds need not be reported as federal deposits. See Advisory 

Opinion 2001-17 (DNC Servs.) at 4 ("[E]ven though a $50,000 check will initially be deposited 

into the Federal account, the amount in excess of the Federal limit will be transferred out on the 

same business day, which is virtually contemporaneous with the deposit. Thus, the DNC may 

report a receipt of $20,000 into the Federal account and $30,000 into the non-Federal account."). 

> Finding 2: Recordkeeping for Employees. Finding 2 of the Draft Report again identifies 

allocated state and federal payroll payments to employees for which the Committee did not 

maintain contemporaneous monthly payroll logs during the 2011-2012 election cycle. As the 

Draft Report recognizes, since 2012, the Committee has vastly improved its system for keeping 

and maintaining contemporaneous monthly employee time logs. The Committee, however, 

disagrees with the Draft Report's assertion that the Committee "concur[s]" with Finding 2. To 

the contrary, the Committee believes it has established - through sworn affidavits - that its 

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

elections during the 2011-2012 election cycle were paid properly from the Committee's federal 

account, as the law requires. Such sworn evidence should satisfy the Audit Division with respect 

to the employee recordkeeping requirement. 

> Finding 3: Disclosure of Occupation/Name of Employer. With respect to Finding 3, 

concerning the Committee's disclosure of the employer or occupation information of certain 

contributors; the Draft Report acknowledges that "[i]n response to the Interim Audit Report 

recommendation, [the Committee] included memo entries in its most recent filed disclosure 

report providing the missing contributor information." Yet, without explanation, it asserts that 

"this submission [by the Committee] did not materially correct the disclosure errors." There is 

no question, however, that the Committee satisfied the "best efforts" requirements of 11 C.F.R. 

§ 104.7(b), and thus is in compliance with its reporting obligations under Federal Election 

Campaign Act. 52 U.S.C. § 30102(i). The Committee, moreover, again notes that since 2012, it 
Mr. Thomas Hintermister 

August 25,2017 

Page 3 

has emphasized its "best efTorts" procedures, taking great care to send and maintain records of its 

follow-up correspondence with contributors consistent with FEC recommended procedures and 

implementing a related policy to ensure it promptly updates the public record to reflect any new 

contributor information received as a result of its efforts. 

> Finding 4: Reporting of Apparent Independent Expenditures (Voiunteer Materials 

Exemption). The Committee reemphasizes that the disbursements at issue in Finding 4 of the 

Draft Report were not independent expenditures but rather part of the Committee's non-allocable 

mail program. As the Draft Report recognizes, the Committee has submitted an abundance of 

evidence, including sworn evidence, establishing that these disbursements all related to mailings 

distributed using volunteers and thus, under the volunteer materials exemption (11 C.F.R. 

§ 100.87), were not allocable to any candidates. Because the communications were not 

independent expenditures, the Draft Report is wrong to assert that the Committee "failed to file 

24/48-hour reports." In addition, the Committee questions the legal soundness of the Audit 

Division's application of 11 C.F.R. § 100.22(b) to 31 of the mailers at issue. 

> Finding 5: Recordkeeping for Communications. The Committee has searched 

diligently for copies of the records at issue in Finding 5 of the Draft Report, relating to certain 

communications the Committee disseminated in 2011 and 2012. The Committee does not have 

those records in its custody, so it contacted the vendors involved in the production of the 

communications. The Committee, however, was unable to locate any of the records at issue. As 

the Committee has explained throughout this audit, after the 2012 elections. Committee 

leadership recognized that the compliance efforts during the 2011-2012 election cycle did not 

meet the Committee's high standards. The Committee has taken several steps to improve its 

procedures with respect all of its compliance efforts - including its recordkeeping. 

Thank you for your attention to this response. 

Respectfully submitted. 

Megan Sowards Newton 

E. Stewart Crosland 

Cc: Mr. Tesfai Asmamaw 

Ms. Nicole Burgess