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Michael E. Zolandz

Partner

michael.zolandz@dentons.com

D +1 202 408 9204

dentons.com

Dentons US LLP

1900 K Street, NW

Washington, DC 20006

United States

May 3, 2019

Federal Election Commission

Audit Division - Zuzana Pacious

1050 First Street, NE, Washington, DC 20002 

Re: Ambulatory Surgery Center Association PAC DFAR Response

Dear Zuzana:

Please find attached a written response on behalf of the Ambulatory Surgery Center Association 

PAC (ASCAPAC) to the Federal Elections Commission’s (FEC) April 15, 2019 Draft Final Audit Report 

(DFAR). Despite its disagreement with specific elements of the findings set forth in the DFAR, ASCAPAC 

will not be requesting a hearing before the Commission to present legal arguments concerning the draft 

report developed by the audit staff. Instead, ASCAPAC are submitting additional information that is 

responsive to the findings in the DFAR that the committee believes will help correct the record before the 

Commission. While ASCAPAC understands that the Commission is under no obligation to incorporate 

these additional facts into its final audit report, the committee would appreciate your consideration of the 

additional information.

In conjunction with this submission, ASCAPAC would also like clarity regarding the proper 

disgorgement protocol for the committee concerning any prohibited contributions discussed in the DFAR. 

Based upon our understanding of FEC regulations, as well our informal correspondence with the FEC 

audit team and information division, we believe that the disgorgement of funds to a qualified charitable 

organization is permissible under the Act and associated regulations. As appropriate, please confirm that 

disgorgement of certain donations to qualified 501(c)(3) entities is an appropriate remedy in response to 

this audit, or please specify that ASCAPAC is limited to disgorging the funds to the United States 

Treasury.

Feel free to reach out to Dentons US LLP with any questions.
Federal Election Commission

May 3, 2019

Page 2

dentons.com

Sincerely,

Dentons US LLP

Michael E. Zolandz

Enclosure
1

MAY 3, 2019

COMMITTEE RESPONSE TO DRAFT FINAL AUDIT REPORT

FINDING 1

During the audit process, ASCAPAC provided a detailed reconciliation report with background 

documents and filed the required amendments in March 2019. As documented, the misstatements 

were inadvertent deposits of non-PAC related receipts that ASCA did not realize were required 

to be reported if the transaction was corrected within the reporting period. Appendix A 

documents the $2,500 transfer referenced in DFAR Finding 1, Section A, Footnote 3. 

ASCAPAC has updated its policies and procedures documents to ensure full compliance with the 

reporting of non-PAC receipts (Appendix B).

FINDING 2

In reviewing the Final Draft Audit Report, ASCAPAC realized that the supporting 

documentation provided to the auditors after the Initial Audit Report was incomplete. 

ASCAPAC is respectfully requesting that the Commission consider the new information and 

support provided below and as attachments. 

ASCAPAC has continued research for documentation of permissibility for all contributions 

identified in this finding. The committee maintains that contributions totaling $31,124 are from 

LLCs and LLPs that did not elect to file federal tax returns as a corporation (Table 1). 

ASCAPAC believes that it is important to stress that the contributions were made and accepted 

in good faith, from eligible partnership entities that intended to make permissible contributions 

attributed to individual owners. When committee staff did its due diligence and asked each LLC 

contributor to send a list of ownership partners, the respondents at issue sent a list of all partners 

with ownership. In phone calls to several of these contributors, the respondents stated that they 

did not understand the request to attribute the contribution only to individual owners. This is not 

a standard way of dealing with financial transactions for these partnership entities – these 

contributors have no way to know the importance of the distinction and delineation that is 

specific to FEC regulations. 

In hindsight, due to this audit, the committee realizes that the request for partnership information 

should have been more specific so that respondents could provide the required consent for 

allocation to individuals. We have updated our compliance policies and procedures as well as all 

solicitation disclosures to better inform potential contributors about the applicable FEC 

requirements associated with their contributions and prevent this situation in the future.
2

The following table contains the complete records for the following contributions that 

ASCAPAC maintains were received from eligible LLC partnerships with mixed ownership.

Support for each contribution is attached in individual PDFs. A complete listing of all 

contributions and status is contained in Appendix C.

Table 1

4/23/15 Abington Surgical Center $ 750.00 

Documentation shows 15 individual owners and 

allocation to whom the contribution is attributed 

entirely. Documentation shows additional 

ownership entities to which the contribution is not 

attributed.

9/8/16 Abington Surgical Center $ 750.00 

Documentation shows 15 individual owners and 

allocation to whom the contribution is attributed 

entirely. Documentation shows additional 

ownership entities to which the contribution is not 

attributed.

2/11/15 Allied Physicians Surgery 

Center

$ 1,000.00 

Documentation shows 33 individual owners and 

allocation to whom the contribution is attributed 

entirely.

5/4/16

Allied Physicians Surgery 

Center $ 1,000.00 

Documentation shows 33 individual owners and 

allocation to whom the contribution is attributed 

entirely.

10/28/15

Blake Woods Medical Park 

Surgery Center $ 199.00 

Documentation shows 3 individual owners and 

allocation to whom the contribution is attributed 

entirely. Documentation shows additional 

ownership entities to which the contribution is not 

attributed.

8/15/16

Carondelet St. Mary’s 

Northwest, LLC $ 1,250.00 

Documentation shows 24 individual owners and 

allocation to whom the contribution is attributed 

entirely. Documentation shows additional 

ownership entities to which the contribution is not 

attributed.

5/19/16 Crow Valley Surgery Center $ 1,000.00 

Documentation shows 17 individual owners and 

allocation to whom the contribution is attributed 

entirely. Documentation shows additional 

ownership entities to which the contribution is not 

attributed.

11/25/15 CSS-JV, LLC $ 1,000.00 

Documentation shows 12 individual owners and 

allocation to whom the contribution is attributed 

entirely. Documentation shows additional 

ownership entities to which the contribution is not 

attributed.

4/7/16 CSS-JV, LLC $ 1,000.00 

Documentation shows 12 individual owners and 

allocation to whom the contribution is attributed 

entirely. Documentation shows additional 

ownership entities to which the contribution is not 

attributed.
3

9/12/16

Eye Surgery Center of 

Michigan LLC $ 375.00 

Documentation shows 9 individual owners and 

allocation to whom the contribution is attributed 

entirely. Documentation shows additional 

ownership entities to which the contribution is not 

attributed.

4/22/16 Harmony Surgery Center, LLC $ 1,000.00 

Documentation shows 17 individual owners and 

allocation to whom the contribution is attributed 

entirely. Documentation shows additional 

ownership entities to which the contribution is not 

attributed.

8/16/16

Hunterdon Center for Surgery 

LLC $ 1,000.00 

Documentation shows 22 individual owners and 

allocation to whom the contribution is attributed 

entirely. Documentation shows additional 

ownership entities to which the contribution is not 

attributed.

7/13/15

Hunterdon Center for Surgery 

LLC $ 1,500.00 

Documentation shows 22 individual owners and 

allocation to whom the contribution is attributed 

entirely. Documentation shows additional 

ownership entities to which the contribution is not 

attributed.

8/15/16 Lippy Surgery Center LLC $ 500.00 

Documentation shows 6 individual owners and 

allocation to whom the contribution is attributed 

entirely. Documentation shows additional 

ownership entities to which the contribution is not 

attributed.

5/1/15

Loveland Surgery Center-David 

Ornelas $ 1,000.00 

Documentation shows 8 individual owners and 

allocation to whom the contribution is attributed 

entirely. Documentation shows additional 

ownership entities to which the contribution is not 

attributed.

10/14/16

New England Surgery Center 

LLC $ 250.00 

New additional documentation shows 5 owners to 

whom the contribution is attributed entirely

5/25/15

New Gulf Coast Surgical 

Center $ 1,000.00 

Documentation shows that the contributor 

intended to make a PAC contribution and 

approved reallocation from inadvertent mistake on 

check.

4/11/16 Northern WY Surgical Center $ 250.00 

Documentation shows 13 individual owners and 

allocation to whom the contribution is attributed 

entirely. Documentation shows additional 

ownership entities to which the contribution is not 

attributed.

2/18/16 PeakOne Surgery Center, LLC $ 1,000.00 

Documentation shows 8 individual owners and 

allocation to whom the contribution is attributed 

entirely. Documentation shows additional 

ownership entities to which the contribution is not 

attributed.

8/18/16

Physicians Outpatient Surgery 

Center, LLC $ 300.00 

Documentation from tax filings show six 

individual owners to whom the contribution is 

attributed entirely. Documentation shows 
4

additional ownership entities to which the 

contribution is not attributed.

8/22/16 Post Street Surgery Center LLC $ 1,000.00 

Documentation shows 4 individual owners and 

allocation to whom the contribution is attributed 

entirely. Documentation shows additional 

ownership entities to which the contribution is not 

attributed.

2/12/16

Prince William Ambulatory 

Surgery Center Novant Health $ 250.00 

Documentation shows 28 individual owners and 

allocation to whom the contribution is attributed 

entirely. Documentation shows additional 

ownership entities to which the contribution is not 

4/28/16 attributed.

Prince William Ambulatory 

Surgery Center Novant Health $ 500.00 

11/6/15 Red Hills Surgical Center, LLC $ 1,000.00 

Red Hills has confirmed that contribution should 

be attributed 38 physician owners. Red Hills is 

sending documentation which will be forwarded to 

the Commission.

5/3/16 Riverbend ASC LLC $ 750.00 

Documentation shows 22 individual owners and 

allocation to whom the contribution is attributed 

entirely. Documentation shows additional 

ownership entities to which the contribution is not 

attributed.

1/29/15

San Diego Sports and 

Minimally Invasive Surgery 

Center LLC $ 500.00 

Documentation shows 7 individual owners and 

allocation to whom the contribution is attributed 

entirely. The respondent, a friend of committee 

staff, stated that the physicians did not know she 

was making the contribution on their behalf. 

Committee staff has confirmed that the physicians, 

similar to most respondents, did not understand 

that the contribution would be attributed to them 

as individuals, not that she made the contribution 

without their consent. Upon further explanation, 

each ownership partner approved the contribution.

2/17/16

San Diego Sports and 

Minimally Invasive Surgery 

Center LLC $ 500.00 

1/21/16

San Diego Sports and 

Minimally Invasive Surgery 

Center LLC $ 500.00 

10/29/15 Somerset Surgical Center, PA $ 500.00 

Somerset has confirmed that contribution should 

be attributed to only physician owners. Somerset is 

sending documentation which will be forwarded to 

the Commission.

8/31/16 Somerset Surgical Center, PA $ 500.00 

Somerset has confirmed that contribution should 

be attributed to only physician owners. Somerset is 

sending documentation which will be forwarded to 

the Commission.

5/14/15

Stephen Barainyak, Centennial 

Surgery Center $ 1,000.00 

Documentation shows 28 individual owners and 

allocation to whom the contribution is attributed 

entirely. Documentation shows additional 

ownership entities to which the contribution is not 

attributed.

5/29/15

Syracuse ASC Management 

LLC $ 2,500.00 

The contribution for $2,500 made on 5/29/15 was 

initially filed as coming from Syracuse ASC, LLC 

and deemed ineligible by the Audit Committee. 

ASCAPAC filed an amended report to include the 

full and proper name of the contributing 
5

organization as Syracuse ASC, LLC dba Specialty 

Surgery Center of CNY; the correction of the 

contributor name now matches a similar, allowable 

contribution made for $2,500 on 6/3/16. The Audit 

Committee review deemed the 2016 as eligible, in 

agreement with ASCAPAC; to that end we believe 

the 2015 contribution should be as well.

4/13/16

The Center for Outpatient 

Medicine, LLC $ 500.00 

Documentation shows 16 individual owners and 

allocation to whom the contribution is attributed 

entirely. Documentation shows additional 

ownership entities to which the contribution is not 

attributed.

1/5/15 Tri-Cities Surgery Center, LLC $ 5,000.00 

Committee staff has obtained a list of 33 

individual physician owners of Tri-Cities 

Physician Group LLC, which is listed in 

documentation as one of two owners of Tri-Cities 

Surgery Center LLC. The documentation allocates 

entire $5,000 contribution to physician owners of 

TCPG LLC.

ASCAPAC refunded $6,3781 to contributors whose contribution was made from an incorporated 

entity in June 7, 2018 (Appendix D).

ASCAPAC refunded $32,8712 to contributors whose contributions were confirmed from the 

audit to be ineligible due to tax status in May 1, 2019 (Appendix E).

ASCAPAC refunded $9,655 to contributors who did not respond to multiple attempts for 

documentation in May 2, 2019 (Appendix F). Three contributions, listed below, have been 

verified as eligible via phone. The donors are sending written confirmation. The committee will 

send the supporting documentation to the Commission as soon as received. 

• Massachusetts Avenue Surgery Center, LLC - $800.00

• Monterey Peninsula Surgery Center, LLC - $2,500.00

• Surgical Center of Connecticut LLC - $1,000.00

APPENDIX C - DFAR FINDING 2 LIST OF CONTRIBUTIONS

FEC accepted per DFAR $ 8,575.00 

Table 1 $ 31,124.00 

Appendix D $ 6,378.00 

Appendix E $ 32,871.00 

Appendix F $ 9,655.00 

 1 ASCAPAC and bank records show the Associates Surgery Centers, Inc’s contribution as $365. The FEC 

audit team documentation shows this contribution of $385. We only refunded $365 on June 7, 2018.

2 ASCAPAC and bank records show the Andrews Institute ASC, LLC contribution of $2575 on 11/5/15. The 

FEC audit team documentation shows this contribution of $2675. We refunded $2575 on May 1, 2019.
6

Written documentation in transit $ 4,300.00 

FEC discrepancy 6/7/18 refund (footnote 1) $ 20.00 

FEC discrepancy 5/1/19 refund (footnote 2) $ 100.00 

$ 93,023.00 

FINDINGS 3-5

ASCAPAC has continued an exhaustive search and contacted every contributor at issue in these 

findings. For the information that the committee was able to find, amendments correcting reports 

were filed in March 2019. 

Throughout the audit, ASCAPAC has invested significant time and resources in updating our 

policies and procedures (Appendix B) as well as creating a new compliance and informationsharing systems (Appendix G) to ensure proper record keeping for receipts, disclosure of receipts 

and timely deposit of receipts pursuant to FEC rules and regulations. The committee is also 

engaged in an internal review of 2017 and 2018 contributions to ensure alignment and 

compliance for these years. In addition, on April 1, ASCAPAC contracted with Public Affairs 

Support Services to ensure the committee remains in full compliance with FEC requirements.

The lapses identified in the DFAR were inadvertent mistakes by committee staff in their good 

faith effort to ensure compliance with FEC requirements. Staff has since completed multiple 

compliance training professional development sessions and will complete additional compliance 

training at least once every year. The committee is confident that these steps will ensure that 

ASCAPAC is fully compliant with all contribution record keeping and record maintenance 

requirements under FEC rules and regulations going forward. 
7

INDEX OF APPENDICES

Appendix A: Documentation of $2500 transfer

Appendix B: Updated policies and procedures document

Appendix C: DFAR Finding 2 List of Contributions

Appendix D: Copies of cleared checks for June 2018 refunds

Appendix E: Copies of refund checks for ineligible contributions cut 5/1/19

Appendix F: Copies of refund checks for nonresponsive contributions cut 5/2/19

Appendix G: Compliance workflow processes (contribution eligibility, FEC report, RFAI)