FEDERAL ELECTION COMMISSION WASHINGTON, D.C. 20463

 April 10, 2019 

 

 

MEMORANDUM

TO: Patricia C. Orrock

 Chief Compliance Officer

 

FROM: Neven F. Stipanovic 

Acting Associate General Counsel

Policy Division

 Lorenzo Holloway 

 Assistant General Counsel

 Compliance Advice 

Margaret J. Forman

Attorney 

SUBJECT: Draft Final Audit Report on Ambulatory Surgery Center Association PAC (LRA 

1072) 

I. INTRODUCTION 

 The Office of the General Counsel has reviewed the Draft Final Audit Report (“proposed 

DFAR”) on Ambulatory Surgery Center Association PAC (“ASCAPAC”). The proposed DFAR 

contains five findings: (1) Misstatement of Financial Activity, (2) Receipt of Prohibited 

Contributions, (3) Recordkeeping for Receipts, (4) Disclosure of Receipts, and (5) Untimely 

Deposit of Receipts. We generally concur with the findings and comment on finding 2. If you 

have any questions, please contact Margaret J. Forman, the attorney assigned to this audit. 
LRA 1072 ASCA PAC 

DFAR Legal Comments

Page 2 of 2 

II. FINDING 2 – EACH CONTRIBUTION MUST BE EXAMINED FOR LEGALITY

The proposed DFAR states that ASCAPAC received 102 contributions, totaling $93,023, 

from apparent prohibited sources. Proposed DFAR at 12. The Audit Division maintains that 

ASCAPAC still has not resolved or refunded a total of $84,448 in prohibited contributions, and 

that the Committee should issue a refund, disgorge the funds to a governmental entity or to a 

qualified charitable organization, or report them as debts on Schedule D until paid. See id. 

ASCAPAC states that it has not received a response from donors accounting for $14,631 

in contributions. ASCAPAC estimates that, based on the number of responses received from 

other donors, fifty-five percent of these contributions will be deemed permissible because 

ASCAPAC “reasonably expects the ratio of eligible to ineligible contributions to hold true for 

[these] non-responsive contributors.” Id. ASCAPAC says, therefore, that it “will refund these 

contributions or administer the funds to an eligible charity.” Id. ASCAPAC stated that the 

“refundable number would be adjusted based on additional responses.” Email from John 

Greenwich, Chief Financial Officer, ASCA, to Camilla Reminsky, Audit Division, FEC (Mar. 8, 

2019). 

It is unclear whether ASCAPAC plans to refund or disgorge contributions from nonresponsive donors according to its own estimate (i.e., 45%), or if ASCAPAC is merely providing 

a helpful ballpark figure to the Audit Division of what the likely refund or disgorgement 

ultimately may be after the follow-up with these contributors. If ASCAPAC intends to refund or 

disgorge only an estimate of non-responsive contributions, we disagree with ASCAPAC’s 

position. A committee’s treasurer is responsible for verifying the legality of every contribution. 

Commission regulations require a committee treasurer to exercise best efforts to examine all 

contributions received, and to determine the legality of each contribution received. 

11 C.F.R. § 103.3(b)(1). If the legality cannot be determined, the treasurer must refund the 

contribution to the contributor within 30 days of receipt. 11 C.F.R. § 103.3(b)(1). Here, while 

ASCAPAC attempted to ascertain the legality of the contributions, it ultimately was unable to do 

so. ASCAPAC, therefore, was required to refund the contributions within 30 days of receipt. 

11 C.F.R. § 103.3(b)(1).