Final Audit Report of the 

Commission on the NY 

Republican Federal Campaign 

Committee 

(January 1, 2011 - December 31, 2012) 

Why the Audit 

Was Done 

Federal law permits the 

Commission to conduct 

audits and field 

investigations of any 

political committee that is 

required to file reports 

under the Federal 

Election Campaign Act 

(the Act). The 

Commission generally 

conducts such audits 

when a committee 

appears not to have met 

the threshold 

requirements for 

substantial compliance 

with the Act.' The audit 

determines whether the 

committee complied with 

the limitations, 

prohibitions and 

disclosure requirements 

of the Act. 

Future Action 

The Commission may 

initiate an enforcement 

action, at a later time, 

with respect to any of the 

matters discussed in this 

report. 

About the Committee (p. 2) 

The NY Republican Federal Campaign Committee is a state party 

committee headquartered in Albany, New York. For more 

information, see the chart on the Committee Organization, p. 2. 

Financial Activity (p. 2) 

• Receipts 

o Contributions from Individuals 

o Contributions from Political 

Committees 

o Transfers from Affiliated and 

Other Political Committees 

o Transfers from Non-federal 

Accounts 

o Other Receipts 

Total Receipts 

• Disbursements 

o Operating Expenditures 

o Refunds of Contributions 

o Federal Election Activity 

o Other Disbursements 

Total Disbursements 

$ 1,606,371 

257,350 

2,522,875 

1,682,587 

177,507 

S 6,246,690 

$2,921,022 

20,200 

2,716,291 

350,929 

S 6,008,442 

Commission Findings (p. 4) 

• Misstatement of Financial Activity (Finding 1) 

• Recordkeeping for Employees (Finding 2) 

• Disclosure of Occupation/Name of Employer (Finding 3) 

• Recordkeeping for Communications (Finding 4) 

Additional Issues (p. 5) 

• Misstatement of Financial Activity 

• Reporting of Apparent Independent Expenditures. 

' 52 U.S.C. §30111(b). 
Final Audit Report of the 

Commission on the 

NY Republican Federal Campaign 

Committee 

(January 1, 2011 - December 31, 2012) 
Table of Contents 

Page 

Part I. Background 

Authority for Audit 1 

Scope of Audit 1 

Commission Guidance 1 

Audit Hearing 2 

Part li. Overview of Committee 

Committee Organization 3 

Overview of Financial Activity 3 

Part 111. Summaries 

Commission Findings 4 

Part IV. Commission Findings 

Finding!. Misstatementof Financial Activity 7 

Finding 2. Recordkeeping for Employees 10 

Finding 3. Disclosure of Occupation^fame of Employer 13 

Finding 4. Recordkeeping for Communications IS 

Part V. Additional Issues 

Issue 1. Misstatement of Financial Activity 18 

Issue 2. Reporting of Apparent Independent Expenditures 19 
Part I 

Background 

Authority for Audit 

This report is based on an audit of the NY Republican Federal Campaign Committee^ (NYR), 

undertaken by the Audit Division of the Federal Election Commission (the Commission) in 

accordance with the Federal Election Campaign Act of 1971, as amended (the Act). The Audit 

Division conducted the audit pursuant to 52 U.S.C. §30111(b), which permits the Commission to 

conduct audits and field investigations of any political committee that is required to file a report 

under 52 U.S.C. §30104. Prior to conducting any audit under this subsection, the Commission must 

perform an internal review of reports filed by selected committees to determine if the reports filed 

by a particular committee meet the threshold requirements for substantial compliance with the Act. 

52 U.S.C. §30111(b). 

Scope of Audit 

Following Commission-approved procedures, the Audit staff evaluated various risk factors and as a 

result, this audit examined: 

1. the disclosure of individual contributors' occupation and name of employer; 

2. the disclosure of disbursements, debts and obligations; 

3. the disclosure of expenses allocated between federal and non-federal accounts; 

4. the consistency between reported figures and bank records; 

5. the completeness of records; 

6. the disclosure of independent expenditures; and 

7. other committee operations necessary to the review. 

Commission Guidance 

Request for Early Commission Consideration of a Legal Question 

Pursuant to the Commission's "Policy Statement Establishing a Program for Requesting 

Consideration of Legal Questions by the Commission," several state party committees unaffiliated 

with NYR requested early consideration of a legal question raised during audits covering the 2010 

election cycle. Specifically, the Commission addressed whether monthly time logs under 11 CFR 

§ 106.7(d)(1) were required for employees paid with 100 percent federal funds. 

The Commission concluded, by a vote of 5-1, that 11 CFR § 106.7(d)(1) does require committees to 

keep a monthly log for employees paid exclusively with federal funds. Exercising its prosecutorial 

discretion, however, the Commission decided it will not pursue recordkeeping violations for the 

failure to keep time logs or to provide affidavits to account for employee salaries paid with 100 

percent federal funds and reported as such. The Audit staff informed NYR representatives of the 

payroll log requirement and of the Commission's decision not to pursue recordkeeping violations 

for failure to keep payroll logs for salaries paid and correctly reported as 100 percent federal. This 

audit report does not include any findings or recommendations with respect to NYR employees paid 

with 100 percent federal funds and reported as such. 

^ On December 23,2013, the Commission received a Statement of Organization from the New York Republican Federal 

Campaign Committee ofTicially changing its name to NY Republican Federal Campaign Committee. 
Audit Hearing 

NYR declined the opportunity for a hearing before the Commission on the matters presented in this 

report. 
Part II 

Overview of Committee 

Committee Organization 

Important Dates 

• Date of Registration August 2,1976 

• Audit Coverage January 1,2011 - December 31,2012 

Headquarters Albany, New York 

Bank Information 

• Bank Depositories Two 

• Bank Accounts Eight Federal, Two Non-federal 

Treasurer 

• Treasurer When Audit Was Conducted John Riedman (3/18/11 - 9/26/17) 

Michael Bittel (9/27/17 - Present) 

• Treasurer During Period Covered by Audit Jane Corwin (10/5/09 - 3/17/11) 

Management Information 

• Attended Commission Campaign Finance 

Seminar 

Yes 

• Who Handled Accounting and 

Recordkeeping Tasks 

Paid Staff 

Overview of Financial Activity 

(Audited i Amounts) 

Cash-on-hand ® January 1,2011 $ 59,732 

Receipts 

o Contributions from Individuals 1,606,371 

o Contributions from Political Committees 257.350 

o Transfers from Affiliated and Other Political 

Committees . 2,522,875 

o Transfers from Non-federal Accounts 1,682,587 

o Other Receipts 177,507 

Total Receipts $ 6,246,690 

Disbursements 

o Operating Expenditures 2,921,022 

o Refunds of Contributions 20,200 

o Federal Election Activity 2.716,291 

o Other Disbursements 350,929 

Total Disbursements S 6,008,442 

Cash-on-hand @ December 31,2012 $ 297,980 
Part III 

Summaries 

Commission Findings 

Finding 1. Misstatement of Financial Activity 

During audit fieldwork, a comparison of NYR's reported financial activity with bank 

records revealed material misstatements in both 2011 and 2012. In response to the 

Interim Audit Report recommendation, NYR stated that, it would be costly and perhaps 

impossible to reconstruct the records necessary to recreate its filings. NYR did not file 

amended disclosure reports to correct the misstatements. As such, NYR's reported 

financial activity for 2011 and 2012 remains materially misstated for receipts and 

disbursements. 

The Commission approved the Audit staffs recommendation, except that with respect to 

the amounts related to the credit card contributions, totaling $347,447 ($190,000 + 

$157,447). Pursuant to Commission Directive 70, these contributions are discussed in 

the "Additional Issues" section. (For more detail, see p.7.) 

Finding 2. Recordkeeping for Employees 

During audit fieldwork, the Audit staff determined that NYR did not maintain any 

monthly payroll logs, as required, to document the percentage of time each employee 

spent in connection with a federal election. For 2011 and 2012, the Audit staff identified 

payments to NYR employees totaling $713,427 for which NYR did not maintain monthly 

payroll logs. This consisted of payroll which was allocated with federal and non-federal 

funds. There was no payroll paid exclusively with non-^federal funds. In response to the 

Interim Audit Report recommendation, NYR concurred with the finding by 

acknowledging the need to improve its system for keeping and maintaining monthly 

employee payroll logs, and has implemented procedures that will maintain the necessary 

documentation in the future. 

The Commission approved a finding that NYR did not maintain any monthly payroll 

logs, as required, to document the percentage of time each employee spent in connection 

with a federal election. (For more detail, see p. 10.) 

Finding 3. Disclosure of Occupation/Name of Employer 

A review of contributions from individuals requiring itemization indicated that 205 

contributions totaling $563,191 lacked or had inadequate disclosure of occupation and/or 

name of employer. In addition, "best efforts" to obtain, maintain and submit the 

information had not been sufficiently documented for these contributions. In response to 

the Interim Audit Report recommendation, NYR included memo entries in its most 

recently filed disclosure report providing the missing contributor information. 
The Commission approved a finding thatNYR failed to materially disclose occupation 

and/or name of employer information for 20S contributions from individuals totaling 

$563,191. (Formoredetail,seep. 13.) 

Finding 4. Recordkeeping for Communications 

During audit fieldwork, the Audit staff reviewed disbursements to verify the accuracy of 

information and proper classification of transactions disclosed on reports. The Audit 

staff identified $77,354 for which sufficient records were not provided. Without a copy 

of the invoices and the associated communications, the Audit staff is unable to determine 

how NYR should have reported these disbursements. NYR did not address this finding 

in its response to the Interim Audit Report. 

Since NYR did not address this finding nor did it provide any additional documentation 

in its response to the Interim Audit Report, the Audit staff considers the matter a violation 

of the recordkeeping requirements at 11 CFR §104.14(b)(1). 

The Commission approved a finding that NYR failed to provide the necessary records for 

expenditures totaling $77,354. (For more detail, see p. 15.) 

Additional Issues 

Issue 1. Misstatement of Financial Activity 

During a review of the bank statements and other supporting documents the Audit staff 

noted unreported receipts and disbursements totaling $347,447 ($190,000 + $157,447) in 

2011 and 2012. NYR stated it used a federal account as its merchant account, depositing 

federal and non-federal contributions. Subsequently, NYR would transfer "any 

contribution that was from federally impermissible funds^ or that exceeded federal 

contribution limits" to the appropriate non-federal account. NYR stated that some of the 

discrepancies were due to the manner in which the credit cards contributions were 

processed. 

The Audit staff confirmed there was one wire and three credit card deposits into the 

federal account totaling $310,000, that were identified by NYR as non-federal 

contributions. The Audit staff was unable to identify the bank deposits for the remaining 

$37,447, however, was able to verify $347,447 was transferred to the non-federal account 

via 12 individual transactions. Finally, the Audit staff was able to verify $321,647 of 

these non-federal transfers were reported as contributions on the state reports. 

The Commission approved the Audit staffs recommendation, except that with respect to 

the amounts related to the credit card contributions, totaling $347,447. Pursuant to 

Commission Directive 70, these contributions are discussed in the "Additional Issues" 

section. (For more detail, see p. 18.) 

^ In response to the exit conference, NYR representatives stated these contributions were federally 

permissible. Due to the lack of documentation, the Audit staff was unable to verify the permissibility of 

the contributions. 
Issue 2. Reporting of Apparent Independent Expenditures 

During audit fieldwork, the Audit staff reviewed expenditures totaling $1,352,118, that 

NYR disclosed on Schedule B, Line 30(b), (Federal Election Activity Paid Entirely with 

Federal Funds), that appear to be apparent independent expenditures that should have 

been disclosed on Schedule E, Line 24, (Independent Expenditures). NYR maintained 

that these expenditures were part of its non-allocable mail program. NYR provided 

documentation supporting the use of volunteers, totaling $209,615. 

Additionally, NYR did not provide sufficient documentation pertaining to dissemination 

dates to verify whether 24/48-hour reports were required to be filed for the apparent 

independent expenditures totaling $1,142,503. 

In response to the Interim Audit Report recommendations, NYR submitted additional 

documentation and reiterated that the expenditures were part of its volunteer mail 

program. 

The Commission did not approve by the required four votes a finding that NYR failed to 

report mailers containing express advocacy totaling $126,439 and a decision regarding 

the volunteer exemption on the $1,016,064 in apparent independent expenditures^. 

Pursuant to Commission Directive 70, this matter is presented as an "Additional Issue". 

(For more detail, see p. 19.) 

* Totals were adjusted for a $35,000 affidavit that was not accepted as discussed at the Commission Open 

Session meeting on December 7,2017. 
Part IV 

Commission Findings 

I Finding 1. Misstatement of Financial Activity 

Summary 

During audit fieldwork, a comparison of NYR's reported financial activity with bank 

records revealed material misstatements in both 2011 and 2012. In response to the 

Interim Audit Report recommendation, NYR stated that, it would be costly and perhaps 

impossible to reconstruct the records necessary to recreate its filings. NYR did not file 

amended disclosure reports to correct the misstatements. As such, NYR's reported 

financial activity for 2011 and 2012 remains materially misstated for receipts and 

disbursements. 

The Commission approved the Audit staffs recommendation, except that with respect to 

the amounts related to the credit card contributions, totaling $347,447 ($190,000 + 

$157,447). Pursuant to Commission Directive 70, these contributions are discussed in 

the "Additional Issues" section. 

Legal Standard 

A. Contents of Reports. Each report must disclose: 

• the amount of cash-on-hand at the beginning and end of the reporting period; 

• the total amount of receipts for the reporting period and for the calendar year; 

• the total amount'of disbursements for the reporting period and for the calendar year; 

and 

• certain transactions that require itemization on Schedule A (Itemized Receipts) or 

Schedule B (Itemized Disbursements). 52 U.S.C. §30104(b)(I), (2), (3), (4) and (5). 

B. Federal vs. Non-Federal Account. The federal account may not accept funds that 

are not permissible under federal election law. 11 CFR §§102.5(a)(I)(i) and 11 CFR 

§§I02.5(a)(2)(i).(iii). 

Facts and Anal3rsis 

A. Facts 

During audit fieldwork, the Audit staff reconciled NYR's reported financial activity with 

its bank records for.2011 and 2012. The reconciliation identified that NYR misstated 

receipts and disbursements for 2011 and 2012. The following charts outline the 

discrepancies between NYR's disclosure reports and its bank records, and the succeeding 

paragraphs explain why the discrepancies occurred. 
2011 Committee Activity 

Reported Bank Records Discrepancy 

Beginning Cash Balance @ 

January 1,2011 

$57,528 $59,732 $2,204 

Understated 

Receipts $1,620,406 $1,825,306 $204,900 

Understated 

Disbursements $1,562,000 $1,753,367 $191,367 

Understated 

Ending Cash Balance @ 

December 31,2011 

$115,934 $131,671 $15,737 

Understated 

The beginning cash balance was understated by $2,204 and is unexplained, but likely 

resulted from prior-period discrepancies. 

The understatement of receipts resulted from the following: 

• Transfers from non-federal accounts for allocable activity, 

not reported 

• Unreported deposit 

• Non-federal contributions deposited in the 

federal account, not reported 

• Unexplained differences 

Net Understatement of Receipts 

The understatement of disbursements resulted from the following: 

• Transfer of non-federal contributions to the non-federal 

account, not reported 

• Net credit card charges, not reported 

• Unexplained differences 

Net Understatement of Disbursements 

+ $14,321 

+ 975 

+ 190,000 

I 396 

+ S2n4.9nn 

+ 190,000 

+ 1,563 

: 196 

+ mim 

The $15,737 understatement of the ending cash balance resulted from the misstatements 

described above. 

2012 Committee Activity 

Reported Bank Records Discrepancy 

Beginning Cash Balance @ 

January 1,2012 

$115,934 $131,671 $15,737 

Understated 

Receipts $4,272,137 $4,421,384 $149,247 

Understated 

Disbursements $4,103,481 $4,255,074 $151,593 

Understated 

Ending Cash Balance @ 

December 31,2012 

$284,590 $297,981 $13,391 

Understated 
The understatement of receipts resulted from the following: 

Transfers from non-federal accounts for allocable activity. 

not reported + $11,750 

Non-federal contributions deposited in the 

federal account, not reported + 157,447 

Unexplained differences 19,950 

Net Understatement of Receipts • + 

The understatement of disbursements resulted from the following: 

• Transfer of non-federal contributions to the non-federal 

account, not reported + 157,447 

• Unexplained differences ; 5.854 

Net Understatement of Disbursements + SI 51.593 

The $13,391 understatement of the ending cash balance resulted from the misstatements 

described above. 

B. Interim Audit Report & Audit Division Recommendation 

The Audit staff discussed the misstatement of receipts and disbursements with the NYR 

representatives at the exit conference. NYR representatives asked questions for 

clarification and said they would respond after having time to review each issue. The 

Audit staff provided schedules detailing the misstatement of receipts and disbursements. 

In response to the exit conference, NYR stated all federal and non-federal credit c^d 

contributions were deposited in the federal account as a matter of administrative 

convenience. 

Furthermore, the NYR representatives stated that the order to ensure greater compliance 

and avoid accepting impermissible funds in the federal account, they have implemented a 

new system for processing credit card contributions. Through a new software vendor, 

NYR staff determines whether the contributions should be deposited in the federal or 

non-federal account based on the Commission and New York State Board of Elections 

regulations. Once identified, contributions are deposited directly into the appropriate 

NYR bank account. 

The Interim Audit Report recommended that NYR amend its disclosure reports to correct 

the misstatements noted above and reconcile the cash balance on its most recent report to 

identify any subsequent discrepancies that could affect the recommended adjustments. 

C. Committee Response to Interim Audit Report 

In response to the Interim Audit Report recommendation, NYR stated that, it would be 

costly and perhaps impossible to reconstruct the records necessary to recreate its filings. 

Additionally, NYR stated that none of the non-federal funds were used for federal 

activities; these funds were not reported on its disclosure reports because they were not 

subject to PEC regulation. NYR elaborated that the non-federal funds were reported on 

the public record as a part of its state reports. NYR also cited Advisory Opinion 2001-17 

(DNC Services) in support of its position. However, in the Advisory Opinion, the 
10 

Commission primarily addressed the question of how a national committee should report 

contributions intended to be split into federal and a non-federal component. Thus to the 

extent that the contributions routed through the federal account were composite 

contributions, containing both federal and non-federal components, its treatment of these 

would appear to be permissible under the reasoning set forth in the Advisory Opinion. 

However, in this case, the funds were deposited not because of the "composite" nature of 

the contributions, but for administrative convenience. Therefore, some of the 

contributions intended to be wholly non-federal and having no federal component could 

have been routed through the federal account.^ The Audit staff requests that NYR clarify 

with respect to the contributions at issue whether and to what extent the contributions 

involved were "composite" contributions containing both a federal and a non-federal 

component, such as, a copy of the solicitation device for credit card contributions 

indicating that a federal/non-federal component was raised. 

D. Draft Final Audit Report 

The Draft Final Audit Report stated that NYR failed to file amended disclosure reports to 

correct the misstatements. As such, NYR's reported financial activity for 2011 and 2012 

remained materially misstated for receipts and disbursements. 

E. Committee Response to the Draft Final Audit Report 

NYR's response to the Draft Final Audit Report reiterated its response to the Interim 

Audit Report and did not provide additional comments. 

Commission Conclusion 

On December 7,2017, the Commission considered the Audit Division Recommendation 

Memorandum in which the Audit staff recommended the Commission find that in 2011, 

NYR understated its receipts by $204,900 and its disbursements by $191,367; and in 

2012, NYR understated its receipts by $149,247 and its disbursements by $151,593. 

The Commission approved the Audit staffs recommendation, except that with respect to 

the amounts related to the credit card contributions, totaling $347,447 ($190,000 + 

$157,447 in charts above). Pursuant to Commission Directive 70, these contributions are 

discussed in the "Additional Issues" section. (For more detail, see p. 18.) 

I Finding 2. Recordkeeping for Employees 

Summary 

During audit fieldwork, the Audit staff determined that NYR did not maintain any 

monthly payroll logs, as required, to document the percentage of time each employee 

spent in connection with a federal election. For 2011 and 2012, the Audit staff identified 

payments to NYR employees totaling $713,427® for which NYR did not maintain 

monthly payroll logs. This consisted of payroll which was allocated with federal and 

' Absent clarification of the "composite" nature of these contributions, this could result in a violation of 11 

CFR §102.5 (a)(2)(i)-(iii). 

' This total does not include payroll for employees paid with 100 percent federal funds and reported as 

such. (See Part 1, Background, Commission Guidance, Request for Early Commission Consideration of a 

legal Question, Page 1.) Payroll amount does not include taxes and fringe benefits. 
11 

non-federal funds. There was no payroll paid exclusively with non-federal funds. In 

response to the Interim Audit Report recommendation, NYR concurred with the finding 

by acknowledging the need to improve its system for keeping and maintaining monthly 

employee time logs, and has implemented procedures that will maintain the necessary 

documentation in the future. 

The Commission approved a finding that NYR did not maintain any monthly payroll 

logs, as required, to document the percentage of time each employee spent in connection 

with a federal election. 

Legal Standard 

Maintenance of Monthly Logs. Party committees must keep a monthly log of the 

percentage of time each employee spends in connection with a federal election. 

Allocations of salaries, wages, and fringe benefits are to be undertaken as follows: 

• employees who spend 25 percent or less of their compensated time in a given 

month on federal election activities must be paid either from the federal account 

or be allocated as administrative costs; 

• employees who spend more than 25 percent of their compensated time in a given 

month on federal election activities must be paid only from a federal account; and, 

• employees who spend none of their compensated time in a given month on federal 

election activities may be paid entirely with funds that comply with state law. 11 

CFR§106.7(d)(l). 

Facts and Analysis 

A. Facts 

During audit fieldwork, the Audit staff reviewed disbursements for payroll. NYR did not 

maintain any monthly payroll logs or equivalent records to document the percentage of 

time each employee spent in connection with a federal election. These logs are required 

to document the proper allocation of federal and non-federal funds used to pay employee 

salaries and wages. For 2011 and 2012, NYR did not maintain monthly logs for 

$713,427 in payroll. This amount includes payroll paid as follows to NYR employees: 

Employees reported on Schedule H4 (Disbursements for Allocated. Federal 

and Nonfederal Activity^ and paid with allocated federal and non-federal 

funds during the same month (totaling $713,427). 

NYR provided the Audit staff with affidavits from the former Executive Director 

attesting to the fact that he was able to determine those employees who spent less than 

25% of their time in federal activity. There was no payroll paid exclusively with nonfederal funds.' The affidavits provided by NYR do not resolve the recordkeeping finding 

because they do not document the time that an employee spent in connection with a 

federal election and the documents were provided after notification of the audit. 

^ This is based on the Audit staffs review of the available disbursement records and state reports. 
12 

B. Interim Audit Report & Audit Division Recommendation 

The Audit staff discussed the recordkeeping requirement with NYR representatives 

during the audit fieldwork and at the exit conference. NYR representatives asked 

questions for clarification and said they would respond after reviewing each issue. 

Subsequently, NYR representatives stated that contemporaneous payroll logs were not 

kept; however, every effort was made to ensure that employees that spent significant time 

on federal elections were paid properly from the federal account. Further, NYR stated 

that a policy had been adopted and implemented to maintain monthly payroll logs.' 

The Interim Audit Report recommended that NYR provide monthly payroll logs that 

indicated the time spent in connection with a federal election and provide a copy of the 

policy implemented in January 2014. 

C. Committee Response to Interim Audit Report 

In response to the Interim Audit Report reconimendation, NYR concurred with the 

finding by stating that it is unable to provide time logs for its employees during the audit 

period, most of whom no longer work for NYR. However, NYR stated it has 

implemented procedures to ensure it maintains the necessary documentation in the future. 

In addition, NYR submitted a copy of its policy and a sample monthly payroll log. 

D. Draft Final Audit Report 

The Draft Final Audit Report stated that NYR acknowledged there was a need to improve 

its system of maintaining monthly timely logs and has implemented procedures to 

maintain the necessary documentation in the future. 

E. Committee's Response to the Draft Final Audit Report 

In response to the Draft Final Audit Report, the NYR disagreed with the Draft Final 

Report's assertion that the Committee "concurred" with the finding. NYR believed it has 

established through sworri 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. 

NYR believed that such swom evidence should have satisfied the Audit Division with 

respect to the employee recordkeeping requirement. 

Commission Conclusion 

On December 7,2017, the Commission considered the Audit Division Recommendation 

Memorandum in which the Audit staff recommended that the Commission find that NYR 

failed to maintain monthly payroll logs to document the percentage of time each 

employee spent in connection with a federal election totaling $713,427. 

The Commission approved the Audit staffs recommendation. 

' The Audit staff did not receive a copy of the policy nor a sample timesheet as noted in the narrative 

supplied by NYR. 
13 

I Finding 3. Disclosure of Occttpation/Name of Employer 

Summary 

A review of contributions from individuals requiring itemization indicated that 205 

contributions totaling $563,191 lacked or had inadequate disclosure of occupation and/or 

name of employer. In addition, "best efforts" to obtain, maintain and submit the 

information had not been sufficiently documented for these contributions. In response to 

the Interim Audit Report recommendation, NYR included memo entries in its most 

recently filed disclosure report providing the missing contributor information. 

The Commission approved a finding that NYR failed to adequately disclose occupation 

and/or name of employer for contributions totaling $563,191. 

Legal Standard 

A. Itemization required for Contributions from Individuals. A political committee 

other than an authorized committee must itemize any contribution from an individual if it 

exceeds $200 per calendar year, either by itself or when combined with other 

contributions from the same contributor. 52 U.S.C. §30104(b)(3)(A). 

B. Required Information for Contributions from Individuals. For each itemized 

contribution from an individual, the committee must provide the following information: 

• The contributor's full name and address (including zip code); 

• The contributor's occupation and the name of his or her employer; 

• The date of receipt (the date the committee received the contribution); 

• The amount of the contribution; and 

• The calendar year-to-date total of all contributions from the same individual. 

11 CFR §§100.12 and 104.3(a)(4) and 52 U.S.C. §30104(b)(3)(A). 

C. Best Efforts Ensures Compliance. When the treasurer of a political committee 

shows that the committee used best efforts (see below) to obtain, maintain, and submit 

the information required by the Act, the committee's reports and records will be 

considered in compliance with the Act. 52 U.S.C. §30102(i). 

D. Definition of Best Efforts. The treasurer and the committee will be considered to 

have used "best efforts" if the committee satisfied all of the following criteria: 

• All written solicitations for contributions included: 

o A clear request for the contributor's full name, mailing address, occupation, 

and name of employer; and 

o The statement that such reporting is required by Federal law. 

• Within 30 days after the receipt of the contribution, the treasurer made at least one 

effort to obtain the missing information, in either a written request or a 

documented oral request. 

The treasurer reported any contributor information that, although not. initially provided by 

the contributor, was obtained in a follow-up communication or was contained in the 
14 

committee's records or in prior reports that the committee filed during the same two-year 

election cycle. 11 CFR § 104.7(b). 

Facts and Analysis 

A. Facts 

A review of itemi^d contributions indicated that 20S contributions totaling $563,191, or 

40 percent of the dollar value of individual contributions required to be itemized by 

NYR, lacked or had inadequate disclosure of occupation/name of employer. 

A review of the Schedule A (Itemized Receipts) filed with the Commission determined 

the following: 120 errors totaling $334,027 did not disclose the occupation or name of 

employer, 77 errors totaling $191,764 disclosed the occupation or the name of employer 

as "Information Requested", and of the eight remaining errors totaling $37,400, seven 

inadequately disclosed the occupation or name of employer as self-employed. 

• NYR did not provide documentation for 95 contributions showing it made followup best efforts for contributions totaling $214,944. 

• NYR had the required documentation for 110 contributions totaling $348,247, 

however this information was not disclosed on its FEC reports. 

B. Interim Audit Report & Audit Division Recommendation 

At the exit conference, the Audit staff discussed this matter with the NYR representatives 

and they asked questions for clarification. Subsequent to the exit conference, NYR 

provided the Audit staff a list of individual contributors with occupation and name of 

employer information omitted. NYR representatives stated that since the 2012 cycle, 

NYR has made a point of sending and keeping records of follow-up correspondence. 

NYR representatives further stated that NYR's record of demonstrating that best efforts 

have been made is supported by the fact that it has not received any Commission 

Requests for Additional Information letters on this issue in the 2013-2014 cycle.' 

Further, it has implemented a policy that when additional information arrives, the public 

record will be updated to reflect that information. 

The Interim Audit Report recommended that, NYR establish "best efforts" by amending 

its reports to disclose the missing information relating to the 110 contributions for which 

it had the required documentation. 

C. Committee Response to Interim Audit Report 

In response to the Interim Audit Report recommendation, NYR stated it has established 

"best efforts" by including memo entries in its most recent disclosure report specifically 

addressing 91 contributions totaling $276,197. However, this submission did not 

materially correct the disclosure errors. 

D. Draft Final Audit Report 

The Draft Final Audit Report acknowledged that NYR included memo entries in its most 

recently filed disclosure reports and provided the missing contributprs' information. 

' The Audit staff has verified that the Gjnimission has not sent Requests for Additional Information letters. 
15 

NYR developed a new policy to ensure it promptly updates the public record to reflect 

any new contributor information received. 

E. Committee's Response to the Draft Final Audit Report 

NYR asserted that it 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). 

Commission Conclusion 

On December 7,2017, the Commission considered the Audit Division Recommendation 

Memorandum in which the Audit staff recommended that the Commission find that NYR 

failed to materially disclose occupation and/or name of employer information for 

contributions from individuals totaling $563,191. 

The Commission approved the Audit staffs recommendation. 

Finding 4. Recordkeeping for Communications 

Summary 

During audit fieldwork, the Audit staff reviewed disbursements to verify the accuracy of 

information and proper classification of transactions disclosed on reports. The Audit 

staff identified $77,354 for which sufficient records were not provided. Without a copy 

of the invoices and the associated communications, the Audit staff is unable to determine 

how NYR should have reported these disbursements. NYR did not address this finding 

in its response to the Interim Audit Report. 

Since NYR did not address this finding nor did it provide any additional documentation 

in its response to the Interim Audit Report, the Audit staff considers the matter a violation 

of the recordkeeping requirements at 11 CFR § 104.14(b)( 1). 

The Commission approved a finding that NYR failed to provide the necessary records for 

expenditures totaling $77,354. 

Legal Standard 

A. Formal Requirements Regarding Reports and Statements. Each political 

committee shall maintain records with respect to the matters required to be reported 

which shall provide in sufficient detail the necessary information and data from which the 

filed reports may be verified, and checked for accuracy and completeness. 11 CFR 

§104.14(b)(l). 

B. Preserving Records and Copies of Reports. The treasurer of a political committee 

must preserve all records and copies of reports for 3 years after the report is filed. 52 

U.S.C. §30lb2(d). 
16 

Facts and Analysis 

A. Facts 

During the fieldwork, the Audit staff reviewed disbursements to verify the accuracy of 

the information and proper classification of transactions disclosed on reports. NYR made 

seven expenditures totaling $77,354 for which documentation was insufficient to make a 

determination pertaining to whether these disbursements were correctly reported on 

Schedule B, Line 30(b). 

The Audit staffs analysis resulted in the following: 

1. Disbursement- Invoice Provided -No Copy of the Communication Provided • 

fSl 1.747^ 

A disbursement totaling $11,747 was paid to a vendor and was disclosed on Schedule 

B, Line 30(b) with purpose FEA - Mail Production with a candidate identification 

number, but no mailer associated with the disbursement was provided. The Audit staff 

requested copies of the associated mailers for this disbursement. To date, the mailer or 

other documentation to associate the payment to a particular mail production has not 

been provided. 

2. Disbursements- No Copies of Communications or Invoices Provided ($65.6071 

Disbursements totaling $65,607 were paid to three vendors and reported on Schedule 

B, Line 30(b) with purposes FEA - Exempt Mail Postage - candidate name, FEA -

Postage - candidate name/district, FEA Mail Postage - candidate identification 

number, FEA - 100% Federal: FEA Mailing and FEA - Mail Production - candidate 

name. However, documentation was not provided by NYR. Without sufficient 

details, the Audit staff is unable to verify NYR's reporting of these amounts as Federal 

Election Activity. The Audit staff requested documentation for each of these 

disbursements. To date, this documentation has not been provided. 

B. Interim Audit Report & Audit Division Recommendation 

At the exit conference, the Audit staff presented NYR with schedules of the invoices and 

associated mail pieces for which records were necessary to verify the accuracy of 

reporting. The Interim Audit Report recommended that, NYR provide the invoices and 

the associated mail pieces for disbursements totaling $77,354. 

C. Committee Response to Interim Audit Report 

NYR did not address this finding nor did it provide any additional documentation in its 

response to the Interim Audit Report. The Audit staff considers the matter a violation of 

the recordkeeping requirements at 11 CFR §104.14(b)(1). 

D. Draft Final Audit Report 

The Draft Final Audit Report reiterated that NYR failed to provide sufficient records 

such as, invoices and the associated communications for expenditures totaling $77,354. 
17 

E. Committee Response to the Draft Final Audit Report 

In response to the DFAR, NYR stated that it did not have those records in its custody, so 

it contacted the vendors involved in the production of the communications. NYR, 

however, was unable to locate any of the records at issue. NYR further stated that it has 

taken several steps to improve its procedures with respect to all of its compliance efforts 

including its recordkeeping. 

Commission Conclusion 

On December 7,2017, the Commission considered the Audit Division Recommendation 

Memorandum in which the Audit staff recommended that the Commission find that NYR 

failed to provide the necessary records for expenditures totaling $77,354. 

The Commission approved the Audit staffs recommendation. 
18 

Part V 

Additional Issues 

Issue 1. Misstatement of Financial Activity 

Summary 

During a review of the bank statements and other supporting documents, the Audit staff 

noted unreported receipts totaling $347,447 ($190,000 + $157,447) in 2011 and 2012. 

NYR stated it used a federal account as its merchant account, depositing federal and nonfederal contributions. Subsequently, NYR would transfer "any contribution that was 

from federally impermissible funds'" or that exceeded federal contribution limits" to the 

appropriate non-federal account. NYR stated that some of the discrepancies were due to 

the manner in which the credit cards contributions were processed. 

The Commission approved the Audit staffs recommendation, except that with respect to 

the amounts related to the credit card contributions, totaling $347,447. Pursuant to 

Commission Directive 70, these contributions are discussed in the "Additional Issues" 

section. 

Legal Standard 

The legal standard in the Finding 1, p. S, above is incorporated herein. 

Facts and Analysis 

A. Facts 

During a review of the bank statements and other supporting documents, the Audit staff 

noted unreported receipts totaling $347,447 ($190,000 + $157,447) in 2011 and 2012. 

NYR stated it used a federal account as its merchant account, depositing federal and nonfederal contributions. Subsequently, NYR would transfer "any contribution that was 

from federally impermissible funds" or that exceeded federal contribution limits" to the 

appropriate non-federal account. NYR stated that some of the discrepancies were due to 

the manner in which the credit cards contributions were processed. 

The Audit staff confirmed there was one wire and three credit card deposits into the 

federal account totaling $310,000, that were identified by NYR as non-federal 

contributions. The Audit staff was unable to identify the bank deposits for the remaining 

$37,447, however, was able to verify $347,447 was transferred to the non-federal account 

via 12 individual transactions. Finally, the Audit staff was able to verify $321,647 of 

these non-federal transfers were reported as contributions on the state reports. 

In response to the exit conference, NYR representatives stated these contributions were federally 

permissible. Due to the lack of documentation, the Audit staff was unable to verify the permissibility of 

the contributions. 

'' In response to the exit conference, NYR representatives stated these contributions were federally 

permissible. Due to the lack of documentation, the Audit staff was unable to verify the permissibility of 

the contributions. 
19 

B. Interim Audit Report & Audit Division Recommendation 

The Audit staff discussed the misstatement of receipts and disbursements related to the 

credit cards with NYR representatives at the exit conference and provided relevant 

schedules detailing the misstatement of receipts and disbursements related to the credit 

cards. 

C. Committee's Response to the Interim Audit Report 

In response to the Interim Audit Report, NYR stated that none of the non-federal funds 

were used for federal activities; these funds were not reported on its federal disclosure 

reports because they were not subject to the Commission regulation. NYR elaborated 

that the non-federal funds were reported on the public record as a part of its state reports. 

NYR also cited Advisory Opinion 2001-17 (DNC Services) in support of its position. 

D. Draft Final Audit Report 

The Draft Final Audit Report stated that NYR failed to flle amended disclosure reports to 

correct the misstatements. As such, NYR's reported financial activity for 2011 and 2012 

remained materially misstated for receipts and disbursements. 

E. Committee Response to the Draft Final Audit Report 

NYR's response to the Draft Final Audit Report reiterated its response to the Interim 

Audit Report and did not provide additional comments. 

Commission Conclusion 

On December 7,2017, the Commission considered the Audit Division Recommendation 

Memorandum in which the Audit staff recommended the Commission find that in 2011, 

NYR understated its receipts by $204,900 and its disbursements by $191,367; and in 

2012, NYR understated its receipts by $149,247 and its disbursements by $1SI,S93. 

The Commission approved the Audit staffs recommendation, except that with respect to 

the amounts related to the credit card contributions, totaling $347,447 ($190,000 + 

$157,447). Pursuant to Commission Directive 70, these contributions are discussed in 

the "Additional Issues" section. 

I Issue 2. Reporting of Apparent Independent B^penditures | 

Summary 

During audit fieldwork, the Audit staff reviewed expenditures totaling $1,352,118, that 

NYR disclosed on Schedule B, Line 30(b), (Federal Election Activity Paid Entirely with 

Federal Funds), that appear to be apparent independent expenditures that should have 

been disclosed on Schedule E, Line 24, (Independent Expenditures). NYR maintained 

that these expenditures were part of its non-allocable mail program. NYR provided 

documentation supporting the use of volunteers, totaling $209,615. 

Additionally, NYR did not provide sufficient documentation pertaining to dissemination 

dates to verify whether 24/48-hour reports were required to be filed for the apparent 

independent expenditures totaling $1,142,503. 
20 

in response to the Interim Audit Report recommendations, NYR submitted additional 

documentation and reiterated that the expenditures were part of its volunteer mail 

program. 

The Commission did not approve by the required four votes a finding that NYR failed to 

report mailers containing express advocacy totaling $126,439 and a decision regarding 

the volunteer exemption on the $1,016,064 in apparent independent expenditures'^. 

Pursuant to Commission Directive 70, this matter is presented as an "Additional Issue". 

Legal Standard 

A. Definition of Independent Expenditures. The term "independent expenditure" 

means an expenditure by a person for a communication expressly advocating the election 

or defeat of a clearly identified candidate that is not made in coordination with any 

candidate or authorized committee or agent of a candidate. No expenditure shall be 

considered independent if the person making the expenditure allows a candidate, a 

candidate's authorized committee or their agents, or a political party committee or its 

agents to become materially involved in decisions regarding the communication as 

described in 11 CFR 109.21(d)(2), or shares financial responsibility for the cost of 

production or dissemination with any such person. 1 l .CFR §100.16(a) & (c). 

B. Expressly Advocating. Expressly advocating means any communication that - (a) 

Uses phrases such as "vote for the president," "re-elect your Congressman," "support the 

Democratic nominee," "cast your ballot for the Republican challenger for the Republican 

challenger for U.S. Senate in Georgia," accompanied by a picture of one or more 

candidate(s), or communications of campaign slogan(s) or individual word(s), which in 

context can have no other reasonable meaning than to urge the election or defeat of one or 

more clearly identified candidate(s). (b) When taken as a whole and with limited 

reference to external events, such as the proximity to the election, could only be 

interpreted by a reasonable person as containing advocacy of the election or defeat of one 

or more clearly identified candidate(s). 11 CFR §100.22. 

C. Disclosure Requirements - General Guidelines. An independent expenditure shall 

be reported on Schedule E (Itemized Independent Expenditures) if, when added to other 

independent expenditures made to the same payee during the same calendar year, it 

exceeds $200. Independent expenditures made (i.e., publicly disseminated) prior to 

payment should be disclosed as memo entries on Schedule E and as a debt on Schedule 

D. Independent expenditures of $200 or less need not be itemized, though the committee 

must report the total of those expenditures on line (b) on Schedule E. 11 CFR 

§§l04.3(b)(3)(vii), 104.4(a) and 104.11. 

D. Last-Minute Independent Expenditure Reports (24-Hour Reports). Any 

independent expenditures aggregating $1,000 or more, with respect to any given election, 

and made after the 20"* day but more than 24 hours before the day of an election, must be 

Totals were adjusted for a $35,000 affidavit that was not accepted as discussed at the Commission Open 

Session meeting on December 7,2017. 
21 

reported and the report must be received by the Commission within 24 hours after the 

expenditure is made. A 24-hour report is required each time additional independent 

expenditures aggregate $1,000 or more. The date that a communication is publicly 

disseminated serves as the date that the committee must use to determine whether the 

total amount of independent expenditures has, in the aggregate, reached or exceeded the 

threshold reporting amount of $1,000. 11 CFR §§ 104.4(f) and 104.5(g)(2). 

E. Independent Expenditure Reports (48-Hour Reports). Any independent 

expenditures aggregating $10,000 or more for an election in any calendar year up to and 

including the 20th day before an election, must be disclosed within 48 hours each time 

the expenditures aggregate $10,000 or more. The reports must be filed with the 

Commission within 48 hours after the expenditure is made. 11 CFR §§ 104.4(f) and 

104.5(g)(1). 

F. Formal Requirements Regarding Reports and Statements. Each political 

committee shall maintain records with respect to the matters required to be reported 

which shall provide in sufficient detail the necessary information and data from which the 

filed reports may be verified, explained, clarified, and checked for accuracy and 

completeness. CFR §104.14(b)(1). 

G. Volunteer Activity. The payment by a state committee of a political party of the 

costs of campaign materials (such as pins, bumper stickers, handbills, brochures, posters, 

party tabloids or newsletters, and yard signs) used by such committee in connection with 

volunteer activities on behalf of any nominee(s) of such party is not a contribution, 

provided that the conditions below are met. 

1. Such payment is not for costs incurred in connection with any broadcasting, 

newspaper, magazine, bill board, direct mail, or similar type of general public 

communication or political advertising. The term direct mail means any 

mailing(s) by a commercial vendor or any mailing(s) made from commercial lists. 

2i The portion of the cost of such materials allocable to Federal candidates must be 

paid from contributions subject to the limitations and prohibitions of the Act. 

3. Such payment is not made from contributions designated by the donor to be spent 

on behalf of a particular candidate for federal office. 

4. Such materials are distributed by volunteers and not by commercial or for-profit 

operations. 

5. If made by a political committee, such payments shall be reported by the political 

committee as a disbursement in accordance with 11 CFR §104.3 but need not be 

allocated to specific candidates in committee reports. 

6. The exemption is not applicable to campaign materials purchased by the national 

party committees. 11 CFR §100.87 (a), (b), (c), (d), (e) and (g) and 11 CFR 

§100.147 (a), (b),(c),(d),(e) and (g). 
22 

Facts and Anal3rsis 

A. Reporting of Independent Expenditures 

i. Facts 

During audit fieldwork, the Audit staff reviewed disbursements to ensure proper 

reporting. The Audit staff noted that NYR did not disclose any independent 

expenditures on Schedule E, however, made apparent media-related expenditures 

totaling $1,142,503 and disclosed them as Federal Election Activity oh Schedule 

B. NYR maintains that these expenditures are part of its non-allocable mail 

program. The breakdown analysis of these expenditures is as follows; 

a. Independent Expenditures Reported as Federal Election Activity 

(Associated Mailer and Invoice Provided under 11 CFR §100.22(a)) 

NYR made 88 disbursements for apparent independent expenditures for direct 

mail totaling $866,372 for which it provided a copy of the mailer with an 

associated invoice. According to the Audit staff, each of these direct mailers 

contained language expressly advocating the election or defeat of a clearly 

identified candidate as defined under 1ICFR § 100.22(a). 

b. Independent Expenditures Reported as Federal Election Activity 

(Associated Mailer and Invoice Provided under II CFR 100.22(b)) 

NYR made 31 apparent independent expenditures for direct mail totaling 

$276,131 for which it provided a copy of the mailer with an associated invoice. 

These communications encouraged the reader to vote for Republicans noting 

various reasons why the Democrats were bad for New York. Based on the 

definition of express advocacy under 11 CFR 100.22(b), the Audit staff 

believes that these communications could only be interpreted by a reasonable 

person as advocating the election or defeat of clearly identified candidate(s). 

c. Volunteer Material Exemption 

To support the volunteer material exemption, NYR representatives provided 

seven affidavits with the associated invoices and mailers from vendors and 

campaign officials, totaling $906,027. The affidavits detailed that the 

volunteers sorted, bundled, bagged and tagged the mail pieces by local zip 

code as part of the NYR "non-allocable volunteer program" during the audit 

period. NYR did not submit affidavits for the remaining $236,476 in invoices 

and mailers. Based on the limited documentation provided, the Audit staff 

determined these disbursements totaling $1,142,503 to be apparent 

independent expenditures. 

In addition to the expenditures discussed above, one invoice totaling $209,615 

included pictures of a single volunteer working on each individual mail piece. 

NYR provided signed volunteer forms for eight mail pieces which reflected the 

volunteer's name, address, the date and the title of the mail piece. The job 

performed was left blank on all of the forms. Based on the dates on the forms, 

it appeared most of this volunteer activity occurred immediately prior to the 
23 

2012 General Election. Due to the lack of clarity regarding the degree of 

volunteer involvement and the quantum and type(s) of evidence needed to 

qualify a given disbursement for an express advocacy communication as 

exempt under the volunteer materials exemption; the disbursement will not 

deemed an independent expenditure. 

The Commission has addressed the applicability of the volunteer materials 

exemption in the Final Audit Reports of the Arizona Republican Party, the 

Democratic Executive Committee of Florida, and the Tennessee Republican 

Party. In these reports, the Commission recognized a lack of clarity regarding 

the application of the volunteer materials exemption. The Commission had 

attempted to formulate a consensus policy regarding what constitutes 

substantial volunteer involvement for the purpose of applying the exemption'^, 

but this was never achieved. Since a lack of clarity exists concerning the 

application of the volunteer materials exemption, it follows that the type and 

amount of documentation needed to support volunteer involvement is also 

unclear. 

In view of the uncertainty regarding the amount of volunteer involvement 

needed to qualify for the volunteer materials exemption, as well as the amount 

of documentation required to support such an exemption, the Audit staff 

recommended that, NYR provide more detailed information and 

documentation for any volunteer involvement associated with each mailer. 

2. Interim Audit Report & Audit Division Recommendation 

At the exit conference, the Audit staff presented a schedule detailing these 

expenditures to NYR representatives. In response to the exit conference, the 

NYR representatives provided invoices, mailers, photographs, signed volunteer 

forms and signed affidavits specifically addressing the volunteer component in 

processing the direct mailers. Further, NYR representatives stated that as a result 

of the audit process, NYR was developing a policy that documents the volunteer 

component of the NYR non-allocable mail program. 

The Interim Audit Report recommended that NYR provide documentation and 

evidence that apparent independent expenditures totaling $1,142,503 did not 

require reporting as independent expenditures. Evidence should have included 

any documentation such as volunteer timesheets and photographs to support the 

involvement of volunteers in the processing or distribution of the communications 

noted above. Absent such evidence, the Interim Audit Report recommended that 

NYR amend its reports to disclose these disbursements as independent 

.expenditures on Schedule E and submit revised procedures for reporting 

independent expenditures. 

Proposed Interim Enforcement Policy, Agenda Document No. 10-16. 
24 

3. Committee Response to the Interim Audit Report 

in response, to the Interim Audit Report recommendation, NYR submitted five 

additional affidavits, including four from its mail vendors and a second affidavit 

from the Counsel during the audit period and two new direct mail pieces'^. NYR 

stated that these additional affidavits detail the active role volunteers played in the 

production and distribution of the mailers, in coordination with NYR and the 

former Counsel. Further, the affidavit from the former Counsel attested that "[a]ll 

of the express advocacy mailings reported as federal election activity on Line 

30(b) of the Committee's PEC disclosure reports during the 2012 Election Cycle 

were part of the Committee's Volunteer Mail Program," and that he "followed the 

same procedures described in [his earlier affidavit] to ensure there was substantial 

volunteer participation in all of the mailings' production and distribution." NYR 

maintains that these additional affidavits along with the previously submitted 

materials more than sufficiently established that the expenditures were properly 

reported as non-allocable mailers under the volunteer materials exemption. Due 

to the lack of a clear standard for applying the volunteer materials exemption, the 

Audit staff is unable to determine whether sworn affidavits of the nature 

submitted by NYR suffice to document the involvement of volunteers. 

4. Draft Final Audit Report 

The Draft Audit Report reiterated that NYR provide further evidence to support 

the application of the volunteer materials exemption to the specific 

communications involved. Such evidence would have assisted the Commission in 

determining if the volunteer materials exemption was applicable to these 

communications. 

5. Committee Response to the Draft Final Audit Report 

In its response to the Draft Final Audit Report, NYR stated that the disbursements 

were not independent expenditures but part of its non-allocable mail program. 

NYR also stated that it has submitted evidence, including sworn evidence, 

establishing that all of these disbursements related to mailings distributed by 

using volunteers. 

Commission Conclusion 

On December 7,2017, the Commission considered the Audit Division 

Recommendation Memorandum in which the Audit staff recommended that the 

Commission find that NYR failed to report mailers containing express advocacy 

totaling $91,439. In addition, the Audit staff recommended that the Commission 

make a final decision regarding the affidavits provided by NYR to document the 

volunteer exemption for apparent independent expenditures totaling $1,0S 1,064. 

The Commission did not approve by the required four votes a finding that NYR 

failed to report mailers containing express advocacy totaling $126,439 and a 

I* NYR associated two new direct mail pieces with two invoices previously provided. Although both of the 

new direct mail pieces still contain express advocacy, the characteristics of one piece have requalified its 

classification from 11 CFR § 100.22(a) to 11 CFR § 100.22(b), revising the totals to $8S4,SS7 and 

S287,947, respectively. 
25 

decision regarding the volunteer exemption on the $1,016,064 in apparent 

independent expenditures'^. Pursuant to Commission Directive 70, this matter is 

presented as an "Additional Issue". 

B. Failure to File 24/48-Hour Reports for Independent Expenditures 

1. Facts 

In addition to not reporting any independent expenditures during the audit period, 

NYR also did not file 24 or 48-hour reports for any independent expenditures. 

Therefore, the apparent independent expenditures identiHed above by the Audit 

staff may also have required such filings. 

2. Interim Audit Report & Audit Division Recommendation 

At the exit conference, the Audit staff discussed with NYR representatives the 

requirements for filing 24/48-hour reports. NYR representatives did not offer 

any comments regarding this matter. 

The Interim Audit Report recommended that, absent documentation and evidence 

that apparent independent expenditures totaling $1,142,503 did not require 

reporting as independent expenditures (per Part A above), NYR provide 

documentation to support the date of public dissemination for each 

communication to determine whether a 24/48-hour report was required. 

3. Committee Response to the Interim Audit Report 

In response to the Interim Audit Report recommendation, NYR submitted 

additional documentation addressed in Part A above. The Audit staff maintains 

that NYR failed to file 24/48-hour reports. 

4. Draft Final Audit Report 

The Draft Audit Report reiterated that $1,142,503 in disbursements were 

independent expenditures that required 24/48-hour reports unless further evidence 

of the voluntary involvement with the specific communications is provided. 

5. Committee Response to the Draft Final Audit Report 

In response to the Draft Audit Report, NYR stated that the communications were 

not independent expenditures and is wrong to assert that the Committee "failed to file 

24/48-hour reports." 

Commission Conclusion 

On December 7,20.17, the Commission considered the Audit Division 

Recommendation Memorandum in which the Audit staff recommended that the 

Commission find that NYR failed to report mailers containing express advocacy 

totaling $91,439. In addition, the Audit staff recommended that the Commission 

make a final decision regarding the affidavits provided by NYR to document the 

volunteer exemption for apparent independent expenditures totaling $1,051,064. 

Totals were adjusted for a $35,000 affidavit that was not accepted as discussed at the Commission Open 

Session meeting on December 7,2017 
26 

The Commission did not approve by the required four votes a finding thatNYR 

failed to report mailers containing express advocacy totaling $126,439 and a 

decision regarding the volunteer exemption on the $1,016,064 in apparent 

independent expenditures'^. Pursuant to Commission Directive 70, this matter is 

presented as an "Additional Issue". 

Totals were adjusted for a S3S,000 affidavit that was not accepted as discussed at the Commission Open 

Session meeting on December 7,2017.