FEDERAL ELECTION COMMISSION 

WASHINGTON, D.C. 20463 

Statement on Proposed Final Audit Report 

on the Kansas Republican Party 

(A08-02) 

Chair Cynthia L. Bauerly and Commissioner Ellen L. Weintraub 

Today, the Federal Election Commission approved the Proposed Final Audit Report ("the 

Report" or "PFAR") ofthe Kansas Republic Party ("KRP").' We write to explain why we 

supported all of the Audit Division's recommendations regarding disbursements by KRP for 

expenses related to the 2008 Republican National Convention and other Federal activity. 

Disbursements for Federal activity must be reported to the Commission and made with 

funds subject to the limitations and prohibitions of the Federal Election Campaign Act ("the 

Act"). We therefore supported the Audit Division's recommendations that KRP misstated its 

financial activity, received prohibited contributions, and paid Federal expenses from its nonfederal accounts.^ Our colleagues disagreed with portions of each of these recommended 

findings. 

As explained more fully below, the major area of disagreement on the disputed portions 

of all three recommended findings concems the disbursement of approximately $255,000 to pay 

for national convention costs.^ We believe that disbursements for the expenses of delegates to a 

national nominating convention plainly are for the purpose of infiuencing a Federal election. We 

similarly believe that the other $79,736 in expenses — for administrative costs, voter drive 

activities, and printed materials and pins — must be paid with Federal funds. To find otherwise 

would be a significant departure from the Act, Commission regulations, and longstanding 

precedent. 

' The Commission adopted the Report today by a vote of 6-0. This Report is based on the Audit Division's previous 

recommendations that the Commission adopt certain findings regarding the financial activity of the Kansas Republic 

Party between January 1,2007 and December 31,2008. The vote on those recommendations detennined the content 

of this Report. See Certification in Audit Division Recommendation Memorandum on Kansas Republic Party, dated 

March 3,2011. 

^ Chair Bauerly and Commissioners Walther and Weintraub voted affirmatively for all of the proposed findings. 

Vice Chair Hunter and Commissioners McGahn and Petersen dissented from portions of each of the three findings. 

Since our colleagues disagreed with portions of each of the recommended findings, the Report discusses those issues 

in the "Additional Issues" section rather than in the Report's "Findings." 

' Draft Final Audit Report ("DFAR") at 4-8,10; PFAR at 12-17. 
A08-02 (Kansas Republican Party) 

Statement of Chair Bauerly and (Commissioner Weintraub 

Page 2 of4 

Convention Delegate Expenses 

In 2008, KRP disbursed approximately $250,000 for expenses associated with the 

Republican National Convention.^ Specifically, KRP disbursed funds to pay for hotel rooms, 

breakfasts, and entertainment for delegates to the Republican National Convention.^ KRP 

disbursed an additional $5,000 for lodging related to the Republican National Convention.^ 

The term "expenditure" is defined in the Act as "any purchase, payment, distribution, 

loan, advance, deposit, or gift of money or anything of value, made by any person for the 

purpose of influencing any election for Federal office." 2 U.S.C. §431 (9)(A)(i); 11 CFR 

100.7(a)(1) and 100.8(a)(1). The Act and regulations include in the definition of election a 

caucus or convention of a political party if the caucus or convention has the authority to select a 

nominee for Federal office on behalf of that party. 2 U.S.C. §431(1)(B); 11 CFR 100.2(e). The 

Commission's regulations state that disbursements by national convention delegates or by 

delegate committees for delegate travel and subsistence costs associated with attending a national 

nominating convention are expenditures. 11 CFR 110.14(e)(1) and (h)(1). In a series of 

advisory opinions over the past thirty years, the Commission has consistently concluded that 

disbursements for national convention delegate expenses are expenditures.^ 

Because the Republican National Convention has the authority to select the Presidential 

nominee, the convention is an election as defined by the Act and Commission regulations. The 

attending delegates vote in the election and disbursements for delegate travel and subsistence 

costs at the Convention are therefore expenditures. We agree that delegates engage in activities 

at national conventions other than the selection of the Federal candidate. That does not, 

however, affect whether disbursements for delegate convention expenses are expenditures. By 

that logic, disbursements in connection with any Federal election in which voters also choose 

state or local officeholders on the same ballot would not qualify as expenditures. Congress 

expressly rejected that approach in adopting the Act. See 2 U.S.C. §431(1). When a convention 

selects the Federal candidate, disbursements for that convention are expenditures. In fact, KRP 

has already filed amended reports to include this activity as Federal activity in response to the 

recommendation in the Interim Audit Report. 

^ The account had deposits totaling $256,674 and disbursements totaling $256,668. Included in these deposits were 

$52,498 in contributions from three corporations and one LLC that filed taxes as a corporation. Corporations are 

prohibited by the Act from making contributions for the purpose of influencing a Federal election. We thus voted to 

approve the finding that KRP should have either transferred the corporate contributions to a non-Federal account or 

refunded those contributions. DFAR at 6-8; PFAR at 13-15; see 11 CFR 103.3(b). 

' DFAR at 4-6; PFAR atl2-13. 

* DFAR at 10; PFAR at 16-17. 

^ See AO 2000-38 (Democratic Party of Puerto Rico) (concluding that disbursements for delegate expenses by a 

party committee would be expenditures); AO 1996-20 (Lucas) (concluding that disbursements for delegate expenses 

by a campaign committee would be expenditures); AO 1996-19 (Walsh) (same); AO 1995-47 (Underwood) (same); 

AO 1980-64 (National Education Association) (concluding that donations for delegate expenses by a labor 

organization would be expenditures). 
A08-02 (Kansas Republican Party) 

Statement of Chair Bauerly and Commissioner Weintraub 

Page 3 of 4 

Other Federal Expenses 

Our colleagues also objected to the Audit Division's recommendation conceming 

$79,736 of additional disbursements. The Audit Division recommended that KRP amend its 

reports to disclose these disbursements because KRP failed to demonstrate that the 

disbursements were for non-Federal activity.^ The purpose of the audit process is to ensure that 

the committee is conducting its Federal activity in accordance with the Act. In that process, the 

Commission verifies the records supporting the committee's reporting and Federal activity. 

When an audited committee is unable to provide information establishing that certain activity is 

non-Federal, the Commission's regulations require the committee to pay those expenses with 

Federal funds. We disagree with our colleagues' position that, in the absence of documentation, 

a committee may pay expenses solely with non-Federal funds. Not only is such a position 

contrary to the Commission's regulatory requirements, but such an approach would also create 

perverse incentives for committees to avoid keeping appropriate records. 

During the audited period, KRP disbursed $63,738 from a non-Federal account for 

administrative expenses (including postage, consulting, travel and printing) and non-candidate 

specific voter drive expenses. KRP also disbursed $14,359 from a non-Federal account for 

printed materials and $1,639 for pins. The pins were purchased in close temporal proximity to 

the Republican National Convention and other payments made to the same vendor were for 

convention gifts, indicating that the pins were likely for Federal activity. In response to the 

Interim Audit Report, the Committee has already filed amendments to report these disbursements 

as Federal activity. 

Our regulations make clear that committees have an obligation to maintain appropriate 

records. The Commission has been quite flexible about what type of documentation it will 

accept to demonstrate that activity is non-Federal. In this case, KRP has been unable to provide 

either copies of the materials in question or affidavits from staff attesting that the activity was 

non-Federal; indeed, by amending its reports to bring them it into material compliance with all of 

the Audit Division's recommendations, KRP appears to have conceded that the activity was 

indeed Federal. We thus voted to approve the Audit Division's recommendation that these 

disbursements be treated as Federal activity. 

Conclusion 

We appreciate that KRP has been extremely cooperative with the Audit Division 

throughout the audit process. It is also worth noting that in response to the Interim Audit Report, 

KRP made amendments to its reports bringing it into material compliance with all of the Audlit 

Division's recommendations. Nevertheless, cooperation after the fact cannot substitute for 

appropriate record-keeping or contemporaneous payment with appropriate funds. Furthermore, 

despite the fact that KRP has already made amendments in response to the recommendations of 

the auditors, our colleagues have nonetheless taken it upon themselves to pursue a contorted 

interpretation of the statute to find that convention-related expenses do not require payment with 

" DFAR at 9-11; PFAR at 16-17. 
A08-02 (Kansas Republican Party) 

Statement of Chair Bauerly and (Commissioner Weintraub 

Page 4 of 4 

Federal funds. Since we believe that disbursements for the expenses of delegates to a national 

convention are for the purpose of influencing a Federal election and that non-Federal activity 

must be appropriately documented, we supported the proposed recommendations of the Audit 

Division. 

Date U Cynthi^L. BauerljT" T ] 

Chau: \ ^ 

Date ( I Ellen L. Weintraub 

Commissioner