American Federation of Labor and Congress of Industrial Organizations

815 Sixteenth Street, N.W.

Washington, D.C. 20006

(202) 637-5000

www.aflcio.org

JOHN J. SWEENEY

PRESIDENT

GerakJW.McEntee

Michael Goodwin

Elizabeth Bum

Joseph J. Hunt

Loo W. Gerard

William Hhe

Warren George

Nancy Wohltorth

Capt. John Prater

Richard P. Hughes Jr.

Randi Weingarten

EXECUTIVE COUNCIL

RICHARD LTRUMKA

SECRETARY-TREASURER

ARLENE HOLT BAKER

EXECUTIVE VICE PRESIDENT

Michael Sacoo

William Lucy

Michael J. Sullivan

Clyde Rivers

Ron Gettelfinger

John J. Flynn

Gregory J. Junemann

Paul C. Thompson

Rose Ann DeMoro

Fred Redmond

Rogelto "Roy A. Floras

Frank Hurt

Robert A. ScardetatU

Harold Schattberger

CecP Roberts

James Williams

John Gage

Laura Rico

James C. Little

Mark H. Ayers

JiH Levy

Fredric V. Rolando

Patricia Friend

R. Thomas BuHenbargar

Edwin D. HiH

William Burrus

Vincent GiUIn

Larry Cohen

Robbie Sparks

Alan Rosenberg

Ann Converse. R.N.

Matthew Loeb

August 24,2009

Mr. Joseph F. Stoltz

Assistant Staff Director

Audit Division

Federal Election Commission

999 E Street, NW

Washington, DC 20463

Re: Interim Report of the Audit Division on AFL-CIO COPE PCC

Dear Mr. Stoltz:

I am responding on behalf of AFL-CIO COPE PCC to the Interim Report of the

Audit Division ("Interim Report"). We address its findings and recommendations in turn.

Finding 1. Misstatcment of Financial Activity

AFL-CIO COPE PCC concurs that the referenced cash on hand, receipts and

disbursements figures set forth in its 2005 and 2006 reports were inaccurate. Due to the

upcoming quadrennial AFL-CIO Convention in mid-September and summer staffing

limitations, AFL-CIO COPE PCC has not yet amended its reports, but it will do so by

September 30,2009. AFL-CIO COPE PCC also will adjust the cash balance accordingly

on its September 2009 Monthly Report.

Finding 2. Transfers Received from Separate Segregated Funds

AFL-CIO COPE PCC generally concurs with the Interim Report's recitation of

the facts, insofar as it addresses the pertinent facts. We refer the Audit Division to the

fuller factual exposition set forth in my July 8,2008 letter ("AFL-CIO Letter") to Audit

Manager Tom Hintermister, including its description of the decades-long and openly

reported history of the AFL-CIO COPE PCC's collecting agent/joint fundraising

arrangements with the separate segregated funds ("SSFs") of various national and

international unions that have been affiliated with the AFL-CIO within the meaning of 11

C.F.R. §§ 100.134(h)and 114.1(e)(4).

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We also concur with the Audit Division's findings that (1) the Communications

Workers of America ("CWA"), the American Federation of Teachers ("AFT") may act as

collecting agents for AFL-CIO COPE PCC; and (2) the respective transfers from CWA

COPE PCC and AFT COPE to AFL-CIO COPE PCC complied with the timing

requirements of 11 C.F.R. § 102.6(c)(4), although we disagree that this regulation applies

to these arrangements.

We disagree too with the findings that those arrangements must comply with the

rules applicable to pure collecting agents that (1) an affiliated union's SSF either

establish a separate transmittal account solely for AFL-CIO COPE PCC contributions or

maintain records of underlying contribution receipts that comprise the transfer to AFLCIO COPE PCC, and (2) the SSF forward all recordkeeping information to AFL-CIO

COPE and the latter then report the incoming transfer on Line 11 and itemize individual

contributors if, as to itself, they meet the $200.01 per year threshold.

The AFL-CIO Letter explained our legal and practical contentions concerning

these matters, which the Audit Division similarly raised at the exit conference. The

Interim Report summarizes some of our contentions and substantively responds only to

one, namely, that the transfers are best considered to consist of funds that "are not

attributable to any particular individual contributor, but are comprised of an unitemized

aggregate of a portion of all of them." AFL-CIO Letter at 7. (The Interim Report's

purported quotation of this passage is inaccurate. See Interim Report at 9.)

The Interim Report asserts that 11 C.F.R. §102.6(c)(4) applies with full force to

these arrangements but does not address our presentation concerning how their joint

fundraising nature affects the analysis. Moreover, none of the purposes cited by the

Interim Report for individualized attribution to and reporting by AFL-CIO COPE PCC

are "necessary in order to specifically track what amounts are contributed to the

respective organizations," as the Interim Report asserts. For, as the AFL-CIO Letter

explained, the transfers themselves provide that information because individual

CWA/AFL-CIO members authorize all of their contributions to be remitted to CWA

COPE PCC and then delegate to the two SSFs how to apportion the total receipts

between them. The Interim Report simply assumes that there is a requirement for

specific allocation to AFL-CIO COPE PCC at the individual level, so it asserts that

allocation "information" is necessary. We believe that premise is incorrect, as we have

explained.

Nor is the information "necessary... to monitor itemization and limitation

requirements." See Interim Report at 9. In fact, CWA COPE PCC itemizes all joint

contributions, and the specific allocation recommended in the Interim Report would, if

anything, result in less itemization, as the AFL-CIO Letter explained. And, CWA/AFLCIO members and AFT/AFL-CIO members who contribute to their respective union's

SSF never contribute separately to AFL-CIO COPE PCC, and none come close to

contributing $5,000 per year at least to CWA COPE PCC itself. For that reason, there is

no need for AFL-CIO COPE PCC distinctly to itemize contributors in order to monitor

compliance with limitation requirements. In any event, AFL-CIO COPE PCC would

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commit to collaborating with its SSF joint fundraising participants to ensure that if AFLCIO COPE PCC ever receives a contribution from a common contributor it would ensure

compliance with the individual $5,000 per year limit under any theory of allocation

between its joint fundraising partner and itself.

Finally, regarding the timelines of the transfers, which the Interim Report also

raises, even if that requirement applies the Audit Division has conceded that the 2005-06

transfers complied with it. AFL-CIO COPE PCC would commit that it will accept

transfers only if the transferring SSF itself also received at least the transferred amount

within the previous 30 days (as both SSFs at issue did during 2005 and 2006).

Accordingly, AFL-CIO COPE PCC declines to accept the Audit Division's

recommendations mat it amend its "[r]eports covering the audit period and any

subsequent periods" — and, we note that there are no findings as to any "subsequent

periods" - in order to report transfers on Line 11 instead of Line 12 and itemize

individual contributors. In that connection, we would also point out that, almost

certainly, as a factual matter no individual member contributed over $200.00 "to" AFLCIO COPE PCC even if the theory of the Interim Report were applied to reallocate

contributions between the committees in 2005 and 2006, and, even if the result were to

shift some itemization to AFL-CIO COPE PCC, doing so would not provide any public

informational benefit. Moreover, it would be a highly burdensome undertaking for those

committees to undertake that reallocation at this point.

Again, as we have explained to the Reports Analysis Division and then the Audit

division for years now, the arrangements at issue have continued for at least 25 years and

have been regularly reported by all participating SSFs, including at least 133 transfers

that themselves exceeded the $5,000 per year limit of 2 U.S.C. §441b(a)(2)(c), and so for

that reason alone put both the Commission and the general public on notice that these

were not ordinary contributions. And, to our knowledge, these arrangements have never

elicited a complaint to the Commission by any contributing AFL-CIO member or anyone

else. AFL-CIO COPE PCC and the union SSFs have relied upon this longstanding

administrative, enforcement, recordkeeping and reporting history. We submit that, absent

a change in the governing law, they are entitled to do so and it is manifestly unfair to

impose novel requirements now We respectfully request that the draft Final Audit Report

revise the findings and recommendations of the Interim Report accordingly.

Thank you for your consideration.

Yours truly,

Laurence E. Gold

Associate General Counsel

cc: Richard L. Trumka, Treasurer, AFL-CIO COPE PCC

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