BELL, McANDREWS & HILTACHK, LLP 

Attorneys and Counselors et Lew 

4SS CAPITOL MALL, SUITE 600 

SACRAMENTO, OA 9S8I4 

(916) 442-7757 

FAX (916) 442-7759 

July 8.2014 

BY ELECTRONIC MAIL AND U.S. MAIL 

Federal Election Commission 

Audit Division 

Kendrick Smith 

999 E Street, NW 

Washington, DC 20463 

EM: Audit@fec.gov; Ksmith@fec.gov 

Re; Draft Final Audit Report (DFARl - Republican Party of Orange Countv (Federal^ 

Dear Mr. Smith: 

The Republican Party of Orange County (Federal) (RPOC) contests Finding No. 4 in the 

DFAR and requests an opportunity for a hearing on this matter. Due to the impending 2014 

election schedule, RPOC respectfully requests tiiat any such hearing be held after the November 

2014 general election. 

RPOC notes that it agreed to list as a federal account debt tiie $73,465 in Levin Fund 

disbursements noted in the DFAR, and will soon reduce or eliminate that debt with payments 

fixim the RPOC's federal funds. ^OC understands the Audit Division's and General Counsel's 

positions that as a political party committee, it is subject to the provisions of 2 USCA 441i(b)(2) 

and 11 CFR 300.31(a), RPOC further notes that: 

(1) There is no evidence whatsoever of circumvention by any donor to RPOC of the 

$10,000 Levin Fund limits, the principal legal justification by Congress, accqpted 

by the Supreme Court in McConnell v. Federal Election Commission, 530 U.S. 93, 

171 (2003) for the Levin inteiparty transfer ban. Indeed, the DFAR at p. 10, fii. 6 

and 8, notes that RPOC had raised little if any Levin funds other than the CRP 

payments for voter registrations; 

(2) The RPOC provided Republican voter registrations to the Califomia Republican 

Party for "fair (equal) consideration" pursuant to the Operation Bounty voter 

registration agreement noted in the DFAR at pp. 10-11, not as a general transfer or 

subvention of RPOC's operating funds. RPOC finds it anomalous that a state party 

committee would be permitted to transfer Levin funds to a subordinate party 
Federal Election Commission 

Audit Division 

Kendrick Smith 

EM: Audit@fec.gov; Ksmitb@fec.gov 

Julys, 2014 

Page 2 

committee but the subordinate party committee would be precluded from actually 

using the Levin funds for "Levin" purposes.' 

(3) RPOC notes that the Commission's apparent acceptance of the concept that a state 

party committee may allocate and pay PEA Type 1 expenses between its federal and 

Levin accounts under 11 CFR 102.6 (in April 2011) occurred long after the activity 

in question here. RPOC understood from CRP that the CRP had obtained informal 

authorization to make the payments in question to RPOC (among others), and did 

not receive any warning at the time, from RAD that the use of such funds would be 

treated differently. 

RPOC will ask the Commission to consider alternatives to enforcement action in ligjht of 

the arguments made in its November 22,2013 letter to the Audit Division and the foregoing 

information and comments. 

' truly yours. 

XbarlesH. Bell, Jr. 

Counsel to RPOC (Federal) 

' The General Counsel's Analysis may have misunderstood RPOC's equal protection argument. 

The argument was premised on the different treatment accorded subordinate party committees 

that engage in FEA, Type 1 activity acting as vendors to state party committees, than accorded 

non-political party commercial vendors that provide voter registration services to state party 

committees. 
BELL, McANDREWS & HILTACHK, LLP 

Anorneys and Counselors st Law 

4SS CAPITOL MALL, SUITE 600 

SACRAMENTO, OA 9S814 

(916) 442-7757 

FAX (916) 442-7759 

July 16,2014 

BY ELECTRONIC MAIL AND U.S. MAIL 

Federal Election Commission 

Audit Division 

Kendrick Smith 

999 E Street. NW 

Washington, DC 20463 

EM; Audit@fec.gov; Ksmith@fec.gov 

Re: Draft Final Audit Report fDFAR'> - Republican Partv of Oranee Countv (Federal^ 

Dear Mr. Smith: 

This is to clarify the July 8,2014 response to the Audit Division's DFAR at page 2 where 

we noted that RPOC "did not receive any warning at the time from RAD that the use of such 

funds would be treated differently" (referring to the CRP's informal advice at the time from the 

Commission. RPOC received RFAIs from the Commission related to the Levin fund issue, 

which identified the Levin fund receipts and included a statement that ftie problem could be 

resolved by transfers-out. As RFOC's Form 99 submissions in response to the RFAIs in 

September 2010 and January 2011 stated, RPOC believed the transfers were permissible. RPOC 

does not recall any further response from the Commission to the Form 99 re^onses it filed. 

r truly yours. 

Charles H. Bell, Jr. 

Designated Counsel to RPOC (Federal)