PAC ● CAMPAIGN ● NON-PROFIT ● POLITICAL LAW

203 South Union Street ● Suite 300

Alexandria, VA 22314

202-210-5431(office) 202-478-0750(fax)

www.DBCapitolStrategies.com

April 25, 2015

SENT VIA EMAIL AND FIRST CLASS MAIL

Federal Election Commission

999 E Street NW

Washington, DC 20463

audit@fec.gov

Dear Commissioners:

Pursuant to 11 C.F.R. § 9038.5(a), I request a rehearing with respect to Gary Johnson 2012, Inc.’s

(“GJ2012” or “Committee”) repayment obligation. Pursuant to § 9038.2(d)(1), I also request a 90-

day extension of time to repay the $1,250 found to be owed that is not being disputed.

1

I. RELIEF DESIRED

The Committee seeks an abatement of the repayment obligation, or a finding that the Federal 

Election Campaign Act (“FECA”) and the holding in Kennedy for President Committee v. FEC, 

734 F.2d 1558 (D.C. Cir. 1984) do not permit the Commission to treat a committee’s public 

matching funds and private primary contributions as commingled, when such funds are in fact 

segregated in separate accounts, and a recalculation of the repayment obligation.

II. LEGAL AND FACTUAL BASIS IN SUPPORT

A. Scrivener’s Error and Contributor Intent

The Committee’s oversight in not updating the disclaimer language on its contribution page after 

the primary election amounted to nothing more than a scrivener’s error, and should be treated 

accordingly. When a written agreement does not properly reflect the intent of the parties due to a 

drafting error, the contract may be reformed to bring its language in line with that intent. 27 

Williston on Contracts § 70:93 (4th ed.). In the instant case, the Commission should retroactively 

read the post-primary disclaimer language to properly reflect what was both the Committee’s and 

the contributors’ intent.

The Committee’s intent was to allocate the first $250 of all contributions to the primary election, 

and any remaining amount, up to $2,500, to the general election. This has been extensively 

discussed throughout this proceeding, and never disputed by the Commission. As to the 

contributors who actually made the private contributions at issue, the Committee agrees that it is 

their intentions, and not the Committee’s, that matters. The Commission argues that the disclaimer 

as-written is the best evidence of how the contributors intended to designate their contributions, 

Statement of Reasons at 14-15, but this is clearly incorrect for a number of reasons.

 

1 Pursuant to § 9038.5(a)(2), the timely filing of this petition suspends repayment of the $332,191 being disputed until 

the Commission has acted on the petition. However, since the Committee lacks sufficient funds to repay even the 

much smaller amount properly due, it is separately requesting an extension of time for that amount.
PAC ● CAMPAIGN ● NON-PROFIT ● POLITICAL LAW

203 South Union Street ● Suite 300

Alexandria, VA 22314

202-210-5431(office) 202-478-0750(fax)

www.DBCapitolStrategies.com

First, and most plainly, is that contributors do not read disclaimers. The allocation formula, along 

with the other “fine print” on the Committee’s contribution page, was skimmed over like so much 

boilerplate legalese – which it was. The contributors were on that page in order to support a 

candidate that they liked, not to read about the minutiae of campaign finance law or make 

designation decisions between elections. Not a single contributor would have cared what the 

disclaimer said if they had read it; whether their contribution was for the general instead of the 

primary matters about as much to the average contributor as whether their contribution is used to 

pay for campaign signs instead of coffee creamer. Contributors know that candidates need money 

for a wide variety of campaign activities, and contribute to the campaign overall. If paying for 

coffee creamer would be more helpful than paying for campaign signs, then that is how the 

contributors would want the campaign to use their contributions, but in general they defer entirely 

to the committees they support to decide how best to maximize whatever contribution they can 

make.

Further, contributors were not given any option to change how their contributions were designated.

There were no sliders to adjust or box to fill in with the contributor’s preferred designation; the 

only options were to contribute or not to contribute. Only the Committee had the ability to change 

the allocation formula given on the page. Indeed, this entire repayment issue came about as a result 

of inaction by the Committee, not because of any act or omission on the part of the contributors. 

If anything, the disclaimer as-written is at most reflective of what the Committee’s intentions were, 

and, as established above, even that is not the case.

The Committee can appreciate the difficult position that this puts the Commission in, not having 

any clear indicator of contributor intent as to designation, but instead of relying on clearly

unreliable indicators, it should look at the two clear indicators that are available: the contributors’ 

desire to support the candidate and the specific way in which the Committee treated and used those 

funds. Designating the first $2,500 to the primary election is clearly not in the best interest of the 

candidate in this case, so ascribing that intent to contributors requires a powerful justification –

one that is clearly lacking here. In the end, the Commission’s decision may end up working more 

harm against the contributors than against the Committee.

B. Lack of Funds

A more practical consideration, and one that the Commission has not yet addressed, is that the 

Committee has no funds available with which to make a repayment. As seen on the Committee’s 

most recent periodic report, the Committee had a negative cash on hand balance as of March 31, 

2016, as a result of monthly bank fees overdrawing the account. Though the Committee anticipates 

securing sufficient contributions to cover that shortfall before the next report, the amount needed 

is orders of magnitude less than what would be necessary to cover the full repayment amount, as 

it is currently calculated.

It is not reasonable to expect the Committee to be able to raise funds in that amount within the 

time allotted for repayment, even accounting for the extensions available. In fact, the Committee 

has such poor prospects of raising funds it is doubtful it could ever obtain the necessary amount.
PAC ● CAMPAIGN ● NON-PROFIT ● POLITICAL LAW

203 South Union Street ● Suite 300

Alexandria, VA 22314

202-210-5431(office) 202-478-0750(fax)

www.DBCapitolStrategies.com

In light of this reality, it would seem imprudent of the Commission to spend limited administrative 

resources pursuing this matter. The Commission, to the extent it wishes to affirm precedent for its 

argument in this matter, could both make the finding and still abate the penalty, which in all 

likelihood could never be paid.

C. Abuse of System

Finally, though the Commission argues that the Committee’s proposed method – treating federal 

matching funds and private primary contributions as separate when they are in fact maintained in 

separate bank accounts – would be “ripe for abuse,” Statement of Reasons at 9-10, the fact remains 

that the Committee only ever acted in a good faith belief that its allocation and use of post-primary 

contributions was lawful. Even if the Committee’s method would be open to abuse – a notion 

which the Committee strongly rejects – that does not permit the Commission to ignore the facts of 

the case that no abuse in fact occurred. The Committee is simply asking that the Commission 

consider the totality of the circumstances in what is a peculiar situation unlikely to reoccur.

III. QUESTIONS NOT RAISED DURING ORIGINAL HEARING

The questions of law and fact raised here were not and could not have been raised during the 

original repayment dispute because they are directly responsive to the arguments presented in the 

Commission’s Statement of Reasons, not made available to the Committee until April 5, 2016.

Further, the Committee’s financial position and its assessment of its fundraising prospects have

changed since the original hearing, presenting novel considerations relevant to the case.

Sincerely,

/s/

Dan Backer

(202) 210-5431 Direct

dbacker@dbcapitolstrategies.com

CC: jblume@fec.gov

lholloway@fec.gov