UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF COLUMBIA 

___________________________________ 

 ) 

 ) 

HERRON FOR CONGRESS, ) 

 ) Civil Action No. 11-1466 (ESH) 

 Plaintiff, ) 

 ) 

 v. ) ANSWER 

 ) 

FEDERAL ELECTION COMMISSION, ) 

 ) 

 Defendant. ) 

____________________________________) 

FEDERAL ELECTION COMMISSION’S ANSWER 

Defendant Federal Election Commission (“FEC” or “Commission”) through its 

undersigned counsel responds as follows to the original complaint in this litigation. Everything 

not given a specific response is DENIED. 

1. No response is required to this paragraph, which contain plaintiff’s 

characterizations of the legal claims in the complaint. 

2. No response is required to this paragraph, which contain plaintiff’s 

characterizations of the legal claims in the complaint. 

3. DENIED to the extent this paragraph asserts that the Declaratory Judgment Act is 

an independent source of federal jurisdiction or that the Administrative Procedure Act is an 

independent source of federal jurisdiction in this case. ADMIT that the Federal Election 

Campaign Act provides statutory standing. The remainder of the paragraph contains conclusions 

of law to which no further response is required. 

4. ADMIT that venue is proper under 2 U.S.C. § 437g(a)(8)(A). 

1 

Case 1:11-cv-01466-ESH Document 7 Filed 10/21/11 Page 1 of 14
5. ADMIT. 

6. ADMIT. 

7. ADMIT. 

8. The Commission DENIES the last sentence of this paragraph. The Commission 

further DENIES that it failed to take timely action on the administrative complaint, and that there 

will be no deterrent on future violations of the Federal Election Campaign Act (FECA or the 

Act), 2 U.S.C. §§ 431-455. The Commission is without knowledge or information sufficient to 

form a belief as to the remaining allegations in this paragraph regarding the reasons for the 

results of the last campaign between candidates Stephen Fincher and Roy Herron and regarding 

Mr. Herron’s state of mind. 

9. The Commission ADMITS that it is a federal agency created by the Act and that 

the Commission is responsible for the civil enforcement and administration of the Act. To the 

extent this paragraph contains further conclusions of law, no additional response is required. 

 10. This paragraph contains conclusions of law and plaintiff’s characterizations of 

provisions of FECA to which no response is required. 

 11. This paragraph contains conclusions of law and plaintiff’s characterizations of 

provisions of FECA to which no response is required. 

 12. This paragraph contains conclusions of law and plaintiff’s characterizations of 

provisions of FECA to which no response is required. 

 13. This paragraph contains conclusions of law and plaintiff’s characterizations of 

provisions of FECA to which no response is required. 

 14. This paragraph contains conclusions of law and plaintiff’s characterizations of 

provisions of FECA to which no response is required. 

2 

Case 1:11-cv-01466-ESH Document 7 Filed 10/21/11 Page 2 of 14
 15. This paragraph contains conclusions of law and plaintiff’s characterizations of 

provisions of FECA to which no response is required. 

 16. This paragraph contains conclusions of law and plaintiff’s characterizations of 

provisions of FECA to which no response is required. 

 17. This paragraph contains conclusions of law and plaintiff’s characterizations of 

provisions of FECA to which no response is required. 

 18. This paragraph contains conclusions of law and plaintiff’s characterizations of 

provisions of FECA to which no response is required. 

 19. This paragraph contains conclusions of law and plaintiff’s characterizations of 

provisions of FECA to which no response is required. 

 20. This paragraph contains conclusions of law and plaintiff’s characterizations of 

provisions of FECA and Commission regulations to which no response is required. 

 21. ADMIT. 

 22. This paragraph contains conclusions of law and plaintiff’s characterizations of 

court decisions to which no response is required. 

 23. This paragraph contains conclusions of law and plaintiff’s characterizations of 

court decisions to which no response is required. 

 24. ADMIT. 

 25. ADMIT that this paragraph accurately quotes the administrative complaint filed 

by Herron for Congress except that in the original “Commission” appears in place of “FEC.” 

ADMIT the remaining factual allegations in this paragraph except that “20100707” appears in 

the due date box. 

3 

Case 1:11-cv-01466-ESH Document 7 Filed 10/21/11 Page 3 of 14
 26. ADMIT that this paragraph accurately quotes Herron for Congress’s 

administrative complaint filed by Herron for Congress and that a copy of the disclosure report 

therein referenced was attached to the complaint as “Exhibit B.” To the extent this paragraph 

characterizes the contents of disclosure reports, they speak for themselves and no further 

response is required. 

 27. ADMIT that this paragraph accurately quotes Herron for Congress’s 

administrative complaint and the press article referenced. Because the administrative complaint 

and the press article referenced speak for themselves, no further response is required. 

 28. ADMIT that this paragraph accurately quotes from the supplement to the 

administrative complaint received by the Commission on October 18, 2010 except that in the 

original “Commission” appears instead of “FEC.” ADMIT that the Schedule C from the Stephen 

Fincher for Congress Committee’s (“Fincher Committee”) October Quarterly Report indicates 

that the source of the $250,000 loan was the personal funds of Steve Fincher, as it also indicated 

in the Fincher Committee’s 12-Day Pre-Primary Report. 

 29. ADMIT that this paragraph accurately quotes from the supplement to the 

administrative complaint received by the Commission on October 18, 2010. ADMIT that the 

August 27, 2010 Associated Press article referenced by the plaintiff indicates that Warren Nunn, 

the president of Gates Bank & Trust Co. (“Gates Bank”), said that “[W]e did advance Stephen 

[Fincher] a loan” and that he “declined to say what kind of collateral Fincher put up for the loan . 

. .” The Commission is without knowledge or information sufficient to form a belief as to the 

factual allegations in the remainder of the paragraph. 

 30. ADMIT that this paragraph accurately quotes from the supplement to the 

administrative complaint received by the Commission on October 18, 2010. The Commission is 

4 

Case 1:11-cv-01466-ESH Document 7 Filed 10/21/11 Page 4 of 14
without knowledge or information sufficient to form a belief as to the factual allegations in the 

remainder of the paragraph. 

 31. ADMIT the first two sentences. With respect to the last two sentences, the 

Commission ADMITS that Attachments A, B, and D of the Fincher Committee’s reply and 

Attachments A, B, and C of Gates Bank’s reply have not been made public on the Commission’s 

website. 

 32. ADMIT that this paragraph accurately quotes the Fincher Committee’s reply. The 

remainder of this paragraph contains plaintiff’s characterization of that reply, which speaks for 

itself. 

 33. ADMIT that Attachments A, B, and D of the Fincher Committee’s reply and 

Attachments A, B, and C of Gates Bank’s reply have not been made public on the Commission’s 

website. With respect to the third sentence, ADMIT that the Fincher Committee and Gates Bank 

both attached a copy of the Multipurpose Note and Security Agreement to their replies. The 

remainder of this paragraph characterizes those replies, which speak for themselves, and to 

which no further response is required. 

 34. ADMIT that the Fincher Committee’s reply stated, “The loan was reported to the 

Commission on July 23, 2010 as an itemized receipt on Schedule A and as a loan on Schedule C. 

. . . The maturity date was November 30, 2010. The purpose of the loan was listed on the loan 

document as ‘business expense . . . .” ADMIT that Schedule C of the Fincher Committee’s July 

23, 2010, 12-Day Pre-Primary Report lists an interest rate of zero percent. 

 35. ADMIT. 

5 

Case 1:11-cv-01466-ESH Document 7 Filed 10/21/11 Page 5 of 14
 36. ADMIT that this paragraph accurately quotes the Fincher Committee’s reply 

except that in the original “evidence” appears in place of “evidenced.” The remainder of this 

paragraph contains plaintiff’s characterization of Gates Bank’s reply, which speaks for itself. 

 37. ADMIT. 

 38. The Commission ADMITS that Gates Bank stated in its reply that it “did not file 

a separate UCC Financing Statement for the campaign loan on the same assets [Mr. Fincher] 

already held as collateral.” The remainder of this paragraph contains plaintiff’s characterization 

of the reply of Gates Bank, which speaks for itself. No further response is thus required. 

 39. This paragraph contains plaintiff’s characterizations of the replies of the Fincher 

Committee and Gates Bank, which speak for themselves. No response is thus required. 

 40. This paragraph contains plaintiff’s characterizations of the replies of the Fincher 

Committee and Gates Bank, which speak for themselves. No response is thus required. 

 41. This paragraph contains plaintiff’s characterizations of the Fincher Committee 

reply. 

 a. No response is required to this subparagraph that contains a legal 

conclusion and characterizes the replies and attachments submitted by the Fincher Committee 

and Gate Bank, which speak for themselves. 

 b. No response is required to the first sentence of this subparagraph, which 

contains a legal conclusion. In the second sentence, the Commission ADMITS that Gates Bank 

said that it did not file a separate UCC financing statement for the campaign loan. 

 c. No response is required to the first sentence of this subparagraph which 

characterizes the Deed of Trust, which speaks for itself. Nor is any response required to the 

second sentence, which contains a legal conclusion. 

6 

Case 1:11-cv-01466-ESH Document 7 Filed 10/21/11 Page 6 of 14
 d. The Commission need not respond to this subparagraph that solely 

contains legal conclusions or characterizes the replies and attachments submitted by the Fincher 

Committee and Gate Bank, which speak for themselves. 

 e. The Commission is without knowledge or information sufficient to form a 

belief as to the allegations in the first sentence regarding a prior filing in favor of Helena 

Chemical Company. No response is required to the second sentence that solely contains legal 

conclusions or characterizes the replies and attachments submitted by the Fincher Committee and 

Gate Bank, which speak for themselves. 

 42. The Commission is without knowledge or information sufficient to form a belief 

as to the factual allegations in the first five sentences of this paragraph regarding the usual 

practice of Tennessee banks beyond what is required by the Commission’s regulations, including 

whether a loan is made “in the ordinary course of business” under 11 C.F.R. 100.82(a). The 

Commission is also without knowledge or information sufficient to form a belief as to the factual 

allegations in the third sentence regarding documents that may be in the possession of Gates 

Bank, or the allegations in the fourth sentence regarding a prior filing in favor of Helena 

Chemical Company. With respect to the last sentence, the Commission ADMITS that the only 

documents provided to the Commission by the Fincher Committee were copies of two 15-day 

extensions granted by the Commission, the Fincher Committee’s 12-day Pre-Primary Report, a 

Multipurpose Note and Security Agreement, a Gates Bank cashiers check for $250,000 made out 

to Stephen Fincher for Congress, a UCC financing note for Fincher’s 2010 crops, and a deed of 

trust to the Fincher’s home. With respect to the last sentence, the Commission further ADMITS 

that the only documents provided to the Commission by Gates Bank were a Multipurpose Note 

and Security Agreement, a 30-day extension granted by the Commission, a Gates Bank cashiers 

7 

Case 1:11-cv-01466-ESH Document 7 Filed 10/21/11 Page 7 of 14
check for $250,000 made out to Stephen Fincher for Congress, a UCC financing note for 

Fincher’s 2010 crops, and a deed of trust to the Fincher’s home. This paragraph also contains 

legal conclusions to which no response is required. 

 43. ADMIT. 

 44. ADMIT that on March 9, 2011, the Office of General Counsel submitted the First 

General Counsel’s Report to the Commission. The remainder of this paragraph contains 

plaintiff’s characterizations of the First General Counsel’s Report, which speaks for itself. No 

further response is thus required. 

 45. ADMIT. 

 46. ADMIT that this paragraph accurately quotes the First General Counsel’s Report. 

The remainder of the paragraph contains plaintiff’s characterizations of the Report, which speaks 

for itself, and to which no further response is required. 

 47. ADMIT. 

 48. ADMIT that this paragraph accurately quotes the First General Counsel’s Report. 

The remainder of this paragraph contains plaintiff’s characterizations of the Report, which 

speaks for itself, and to which no further response is required. 

 49. This paragraph contains plaintiff’s characterizations of the First General 

Counsel’s Report, which speaks for itself, and to which no response is required. 

 50. ADMIT that the first and last two sentences of this paragraph accurately quote the 

First General Counsel’s Report, except that the word “the” appears before “Fincher Committee” 

in this paragraph’s penultimate sentence. In the third sentence the Commission ADMITS that its 

staff is aware of the requirements of the regulations therein cited. The remainder of this 

paragraph contains plaintiff’s characterizations of the First General Counsel’s Report as well as 

8 

Case 1:11-cv-01466-ESH Document 7 Filed 10/21/11 Page 8 of 14
the replies of the Fincher Committee and Gates Bank, which speak for themselves, and to which 

no further response is thus required. 

 51. ADMIT. 

 52. ADMIT the first two sentences of this paragraph. With respect to the final 

sentence, ADMIT that the Commission’s vote was 3-3 on one motion to approve a proposed 

conciliation agreement that provided for payment of a civil penalty, and that the Commission’s 

vote was 3-3 on a motion to approve a proposed conciliation agreement that provided for sending 

a caution letter. 

 53. ADMIT. 

 54. ADMIT that Commissioners Hunter, McGahn, and Petersen had not issued a 

Statement of Reasons as of August 11, 2011. They issued one on September 15, 2011. 

 55. In this paragraph, plaintiff realleges paragraphs 1-54. Likewise, the Commission 

incorporates its responses to paragraphs 1-54. 

 56. This paragraph contains plaintiff’s characterizations of the Statement of Reasons 

of Commissioners Bauerly, Walther, and Weintraub, which speaks for itself, and to which no 

response is required. 

 57. DENY. 

 58. DENY. 

 59. DENY. 

 60. This paragraph contains the plaintiff’s prayer for relief to which no response is 

required. However, if an answer may be deemed necessary, the Commission DENIES that any 

relief should be granted against the Commission. 

9 

Case 1:11-cv-01466-ESH Document 7 Filed 10/21/11 Page 9 of 14
 61. In this paragraph, plaintiff realleges paragraphs 1-60. Likewise, the Commission 

incorporates its responses to paragraphs 1-60. 

 62. ADMIT that the First General Counsel’s Report did not recommend any knowing 

and willful violations against any respondent. The remainder of the paragraph contains 

plaintiff’s characterizations of the Report, which speaks for itself, and to which no further 

response is required. 

 63. DENY the factual allegations in the first sentence. The second sentence and 

supporting citations contain plaintiff’s legal conclusions to which the Commission is not required 

to respond. The Commission is without knowledge or information sufficient to form a belief as 

to the allegations in the third sentence regarding the state of mind of the respondents, but with 

respect to the third and seventh sentences ADMITS that the Fincher for Committee did not fully 

report the loan in its 12-day Pre-Primary Report, filed on July 23, 2010, and did not file any 

amended reports until December 2, 2010. ADMIT the fourth and sixth sentences. With respect 

to the fifth sentence, ADMIT that in its reply the Fincher Committee stated, “[A] review of how 

the loan was reported to the Commission revealed inadvertent reporting errors and omissions that 

require the need for amended reports to be filed with the Commission.” The eighth sentence 

contains a legal conclusion to which the Commission need not respond. DENY the allegations in 

the ninth sentence. 

 64. DENY. 

 65. DENY 

 66. This paragraph contains the plaintiff’s prayer for relief to which no response is 

required. However, if an answer may be deemed necessary, the Commission DENIES that any 

relief should be granted against the Commission. 

10 

Case 1:11-cv-01466-ESH Document 7 Filed 10/21/11 Page 10 of 14
 67. In this paragraph, plaintiff realleges paragraphs 1-66. Likewise, the Commission 

incorporates its responses to paragraphs 1-66. 

 68. This paragraph contains legal conclusions to which the Commission is not 

required to respond. DENY any allegation that FEC staff acted incorrectly. 

 69. The first and second sentences appear to contain plaintiff’s characterization of 

Gates Bank’s reply and attachments and the First General Counsel’s Report, which speak for 

themselves and to which no response is required. The third sentence contains a legal conclusion 

to which no response is required, and the Commission DENIES the remainder of the sentence. 

No response is required to the fourth through seventh sentences, which contain legal arguments 

and conclusions and/or characterize attachments to replies that speak for themselves. The eighth 

sentence purports to characterize the replies of the Fincher Committee and Gates Bank, both of 

which speak for themselves, and to which no response is required. The ninth sentence contains a 

legal conclusion to which no response is required. 

 70. DENY. 

 71. The first sentence of this paragraph contains a legal conclusion to which the 

Commission need not respond. The second sentence is DENIED. 

 72. This paragraph contains the plaintiff’s prayer for relief to which no response is 

required. However, if an answer may be deemed necessary, the Commission DENIES that any 

relief should be granted against the Commission. 

 73. In this paragraph, plaintiff realleges paragraphs 1-72. Likewise, the Commission 

incorporates its responses to paragraphs 1-72. 

 74. This paragraph contains legal conclusions to which the Commission is not 

required to respond. DENY any allegation that FEC staff acted incorrectly. 

11 

Case 1:11-cv-01466-ESH Document 7 Filed 10/21/11 Page 11 of 14
 75. The first sentence contains a legal conclusion to which no response is required. 

The second sentence contains characterizations of the First General Counsel’s Report which 

speaks for itself and to which no response is required. Nor is any response required to the third 

and fourth sentences, which contain legal argument and conclusions. The fourth sentence 

contains a legal conclusion to which no response is required. The fifth and sixth sentences 

purport to characterize the replies (and attachments thereto) of the Fincher Committee and Gates 

Bank, which speak for themselves and to which no response is required. The Commission is 

without knowledge or information sufficient to form a belief as to the allegations in sentences 

seven through ten regarding the usual practice of Tennessee banks beyond what is required by 

the Commission’s regulations, including whether a loan is made “in the ordinary course of 

business” under 11 C.F.R. 100.82(a). Sentences seven through ten also contain legal 

conclusions, to which no response is required. With respect to the last sentence, the Commission 

ADMITS that the only documents provided to the Commission by the Fincher Committee were 

copies of two 15-day extensions granted by the Commission; the Fincher Committee’s July 23, 

2010, 12-day Pre-Primary Report; a Multipurpose Note and Security Agreement; a Gates Bank 

cashiers check for $250,000 made out to Stephen Fincher for Congress; a UCC financing note 

for Fincher’s 2010 crops; and a deed of trust to the Fincher’s home. The Commission further 

ADMITS that the only documents provided to the Commission by Gates Bank were a 

Multipurpose Note and Security Agreement, a 30-day extension granted by the Commission, a 

Gates Bank cashiers check for $250,000 made out to Stephen Fincher for Congress, a UCC 

financing note for Fincher’s 2010 crops, and a deed of trust to the Fincher’s home. 

 a. With respect to the first sentence, the Commission ADMITS that Gates 

Bank stated in its reply that it “did not file a separate UCC Financing Statement for the campaign 

12 

Case 1:11-cv-01466-ESH Document 7 Filed 10/21/11 Page 12 of 14
loan on the same assets [Mr. Fincher] already held as collateral.” The Commission is without 

knowledge or information sufficient to form a belief as to the allegations in the fifth sentence 

regarding Helena Chemical Company. The remainder of this subparagraph contains legal 

argument and conclusions for which no further response is required. 

 b. The first sentence characterizes the deed of trust on Mr. Fincher’s 

residence, which speaks for itself and to which no response is required. The remainder of this 

subparagraph contains legal argument and conclusions for which no further response is required. 

 c. The third sentence characterizes Mr. Fincher’s U.S. House of 

Representatives Financial Disclosure Statement which speaks for itself and to which no response 

is required. The remainder of this subparagraph (including the final sentence of the paragraph) 

contains legal argument and conclusions for which no further response is required. 

 76. DENY. 

 77. DENY. 

 78. This paragraph contains the plaintiff’s prayer for relief to which no response is 

required. However, if an answer may be deemed necessary, the Commission DENIES that any 

relief should be granted against the Commission. 

 PRAYER FOR RELIEF. The Commission is not required to respond to plaintiff’s 

prayer for relief. But if a response is deemed necessary, the Commission DENIES that any relief 

should be granted. 

 Respectfully submitted, 

Anthony Herman 

General Counsel 

aherman@fec.gov 

 

13 

Case 1:11-cv-01466-ESH Document 7 Filed 10/21/11 Page 13 of 14
14 

David Kolker (D.C. Bar No. 394558) 

Associate General Counsel 

dkolker@fec.gov 

 

Kevin Deeley 

Assistant General Counsel 

kdeeley@fec.gov 

 /s/ Steve N. Hajjar 

Steve N. Hajjar 

 Attorney 

 shajjar@fec.gov 

 

FEDERAL ELECTION COMMISSION 

999 E Street NW 

 Washington, DC 20463 

October 21, 2011 (202) 694-1650 

Case 1:11-cv-01466-ESH Document 7 Filed 10/21/11 Page 14 of 14