FILED BY D.C.

UNITED STATES DISTRICT OURT

FOR THE SOUTHERN DISTRICT FLO AL 2 5 2216

SJë2))i%7C7E

S.D. OF FLA. - W,PB,

FEDEM L ELECTION COM M ISSION,

999 E Street, N .W .

W ashington, DC 20463

Plaintiff.

Civil Action No. 15-81732-civ-M arra

EDW ARD J. LYNCH. Sr.,

10269 Trianon Pl.

W ellington, FL 33449,

LYNCH FOR CONGRESS,

P.O . Box 210544,

Royal Palm Beach, FL 33421,

and

EDW ARD J. LYNCH , Sr.,

ln his official capacity as Treasurer of

Lynch for Congress,

c/o Lynch for Congress

P.O. Box 210544,

Royal Palm Beach, FL 33421,

Defendants.

AM ENDED M OTION TO DISM ISS

M OTION 1 TO DISM ISS BASED ON LACK OF JURISDICTION

To survive a m otion to dismiss, a complaint must contain sufficient factual m atter,

accepted as true, to çttstate a claim to relief that is plausible on its face.''' Ashcroft

v. Iqbal, 129 S.Ct. 1937, 1949, 173 L. Ed. 2d 868 (2009), citing Bell Atl. Corp. v.

Twombly, 550 U.S. 544, l27 S. Ct. 1955, 167 L. Ed. 2d 929 (2008). The United

States Supreme Court in Iqbal clarified that the decision in Twombly içexpolmded

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the pleading standard for lall civil actions.''' Id. at 1953. The Court explained that

although a court m ust accept as true al1 of the factual allegations contained in a

complaint, that requirem ent does not apply to legal conclusions; therefore, the

pleadings m ust include factual allegations to support the legal claim s asserted. 1d.

at 1949, 1953. tt-l-hzeadbare recitals of the elem ents of a cause of action, supported

by m ere conclusory statem ents, do not suffice.'' 1d. at 1949, citing Twombly, 550

U.S. at 555. Ere a can

2. ln its lqbal decision, the Supreme Court dictated that çûltlhe plausibility standard

is not akin to a tprobability requirem ent,' but it asks for m ore than a sheer

possibility that a defendant has acted unlawfully.'' 1d. at 1949. It further clarified:

First, the tenet that a court m ust accept as true a11 of the allegations contained in a

complaint is inapplicable to legal conclusions. Threadbare recitals of the elements

of a cause of action, supported by mere conclusory statements, do not suffice.

(Although for the purposes of a motion to dismiss we must take a11 of the factual

allegations in the complaint as true, we are not bound to accept as true a legal

conclusion couched as a factual allegation.). Rule 8 marks a notable and generous

departure from the hyper-teclm ical, code-pleading regim e of a prior era, but it

does not unlock the doors of discovery for a plaintiff arm ed with nothing m ore

than conclusions. Second, only a complaint that states a plausible claim for relief

survives a motion to dismiss. . .lW lhere the well-pleaded facts do not permit the

court to infer more than the mere possibility of m isconduct, the complaint has

alleged but it has not shown that the pleader is entitled to relief.

The determination of whether a plaintiff has sufficiently pled a claim ûtis a

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context-specific task that requires the review ing court to

experience and common sense.'' lqbal, 129 S.Ct. at 1950, citing Twom bly, 550

U .S. at 556. The Suprem e Court set forth a three-step process for courts to apply

draw on its judicial

in considering a m otion to dismiss. First, the court m ust identify the elem ents of

the cause of action in light of interpreting case authority. Id. at 1947. Second, the

court should begin éûby identifying pleadings that, because they are no more than

conclusions, are not entitled to the assum ption of truth.'' ld. at 1949-50.

Essentially, the court should ignore a11 conclusory allegations in the pleading.

Third, the court must consider any remaining factual allegations to Etdetermine

whether they plausibly give rise to an entitlem ent of relief '' 1d. at 1950.

Ultimately, to survive a m otion to dism iss, a plaintiff must plead ltfactual content

that allows the court to draw the reasonable inference that the defendant is liable

for the m isconduct.''

5. On June 10, 2016, the Plaintiff served on the Defendant their first Request of

Discovefy.

6. In the Request of Discovely, the Plaintiff acknowledged that the Defendant did

not file the requisite papenvork after the April 2010 Special Electicm to becom e a

candidate or establish a com mittee. Federal regulations requires that a candidate

file a new Form 1 and Fonn 2 in order to establish a new candidacy for each

election cycle.

7. The Plaintiff does not list dates when the Defendant was a candidate as dates

specifically covering the dates in the suit. The Plaintiff m erely incorrectly states

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that the Defendant was a candidate, contrary to the Plaintiff s requests for

discovery adm issions.

ln the complaint, the Plaintiff states, és-rhis complaint seeks relief for each of the

following expenditures, made on or aher August 20, 2010 - m onths after M r.

Lynch Iost the April 2010 special election for Florida s' 19th congressional

District in the United States H ouse of Representatives .-of personal expenses

of M . Lynch with the Lynch Committee's campaign funds:'' (emphasis added)

9. The Plaintiff admits that the Defendant was, indeed, not a candidate for oftk e.

10. The Defendant was not a candidate for oftice on or after August 20, 2010. As

such, the FEC had no jurisdiction and there is no basis for any legal conclusion

that the Defendant was a candidate therefore, he did not fall under the jurisdiction

of the FEC.

1 1. There are no factual allegations made by the Plaintiff that the Defendant was,

indeed, a candidate on or after August 20, 2010 and, as such, the FEC had no

jurisdiction with regard to the Defendant being a candidate with regard to

reporting requirem ents and there are no reporting requirements for testing the

waters if the individual

become a candidate.

does not ultim ately file the necessary paperwork to

12. Under the Federal Election Campaign Act, an individual who seeks nom ination

for election or election to federal offk e becomes a tûcandidate'' and thereby

triggers registration and reporting requirements if he or she receives contributions

or m akes expenditures in excess of $5,000 or consents to another person's doing

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so in excess of $5,000 on the individuals behalf. 52 U.S.C. j 30101(2)(A); 1 1

CFR 100.3(a).

l 3. Under FEC regulations, an individual who raises or spends money only to ççtest

the waters'' does not becom e a candidate. IICFR 100.72, 100.131

14. The Plaintiff adequately asserts that the Defendant was a candidate, acted in the

capacity of Treasurer and there was a Com mittee during the Novem ber 2008

election and the April 2010 election only and never asserts that the Defendant was

a candidate or there was a comm ittee on or after August 20, 2010.

15. The Plaintiff misstates that the Defendant spent içcnmpaign funds'' on personal

expenses as there was no campaign, he was not a candidate for any oftke (as the

Plaintiff admits in their discovery request), there was no Committee and he was

not acting in the capacity of Treasurer and the previous com m ittee bank accotmt

had no money. As such, the FEC has no jurisdiction or basis to file a claim based

on the Defendant acting in the capacity of a candidate or treasurer or that there

w as a conunittee.

16. The Defendant could not have spent ttcam paign funds'' as the Plaintiff claims ,as

there was neither a cnm paign nor a candidate after August 20, 2010, in fact the

Defendant ceased being a candidat after the April 2010 Special Election.

17. The Defendant did file a Statement of Candidacy and Statement of Organization

for the 2008 election and, subsequently for the April 2010 Special Election, only,

as the Plaintiff adm its.

18. After the Defendant's loss in the April 2010 Special Election he did not file a

Statement of Candidacy nor a Statem ent of Organization for any subsequent

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election after April 2010 and, as such, he ceased being a candidate, he ceased

acting as the Treasurer and the Com mittee was no longer an entity, active or

otherwise.

1 9. The Defendant took no actions to qualify for the ballot under Florida State Law

after the April 2010 Special Election.

20. According to The Federal Election Comm ission, candidates M U ST register for

each election cycle by filing a içnew'' FEC Form 2 in order to be considered a

candidate and to establish a comm ittee.

2 l . After the loss in the April 2010 Special Election, the Defendant decided not to

becom e a candidate in the August 2010 Primary Election or the Novem ber 2010

General Election.

22. Before deciding whether or not to cnmpaign for the 2012 election, the Defendant

decided to ûttest the waters'', and explore the feasibility of becom ing a candidate

by ascertaining information such as opinions regarding his feasibility, popularity

and the outcome of the Novem ber 2010 General Election. As such the Defendant

traveled around the district for several months prior to and shortly aher the 2010

General Election. A11 of this tltesting the waters'' resulted in the Defendant

deciding not to run for office again.

23. According to The Federal Election Comm ission regulations, an individual who

merely conducts selected testing the waters activities that fall within the

exem ptions in FEC regulations does to have to register or report as a candidate

even if the individual raises or spends more than $5,000 on those activities. ln the

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2 A

complaint, the Plaintiff admits that the am ount allegedly spent by the Defendant

was $1,374.12, signifcantly less than the $5,000 threshold.

24. Under FEC regulations, an individual who raises or spends money only to ''test

the waters'' (but not to campaign for office) does not become a candidate. 1 1 CFR

100.72, 100.131.

25. According to the civil com plaint, the Defendant spent no m ore than $1,374.12,

significantly below the $5,000 threshold.

26. According to The Federal Election Commission regulations, an individual who

tests the waters m ust keep financial records and IF he later becom es a candidate,

the m oney raised and spent to test the waters m ust be reported by the campaign as

contributions and expenditures.

27. According to The Federal Election Comm ission regulations, tslf an individual

decides not to nzn for federal office, there is no obligation to report these

finances, and the donations used in testing-the-waters (if any) will not count as

contributions.'' As the Defendant decided not to run for federal office he was not

obligated to report these finances and, as such, did not. Further, these monies did

not count as contributions.

28. W hereas, the Defendant was not obligated to report the expenditures and he did

not expend any amount close to the $5,000 threshold, the FEC had no jurisdiction

over the Defendant to warrant filing of a claim .

29. According to The Federal Election Com mission regulations, itanother

consideration, though not a requirement, is the segregation of testing-the-waters

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funds from personal funds.''

no requirement to segregate personal ftmds from ftmds used to test the waters.

30. Under the Federal Election Campaign Act, an individual who seeks nom ination

Since the Defendant was not a candidate there was

for election or election to federal office becomes a ûtcandidate'' (and thereby

triggers registration and reporting requirements) if he or she receives

contributions or m akes expenditures in excess of $5,000 or consents to another

person's doing so in excess of $5,000 on the individual's behalf. 52 U.S.C. j

30101(2)(A); 11 CFR 100.3(a).

31. The Defendant spent signifcantly less that $5,000 when testing the waters to

decide whether or not to rtm for office.

32. A1l of the funds used to test the waters cam e from the Defendant's personal funds

and since the Defendant ultimately decided to not run for office prior to reaching

any financial threshold there was no obligation to report any finances to the FEC

and the Defendant never becam e a candidate. Thus, the FEC did not have

jurisdiction over the Defendant, as such, there was no authority to file a claim

against the Defendant.

33. No action taken prior to August 20, 2010 could be at issue because it is prior to

the applicable Statue of Lim itations.

34. W HEREFORE, there is no factual content that allows the court to draw the

reasonable inference that the Defendant is liable for any misconduct since he was

not under the jurisdiction of the FEC as he was not a candidate, he was not

Treasurer and there was no longer any com m ittee as the Defendant did not file the

requisite form s if he were to becom e a candidate and that the D efendant followed

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> Y

the FEC regulations regarding the çitesting the waters'' period, the Defendant

prays the court to dismiss the complaint with prejudice and award sanctions.

35. W HEM FORE, Defendant prays that sanctions be imposed, as the claim is

frivolous as the Plaintiff knew or should have known that the pursuit of litigation

was without any reasonable basis in 1aw or equity. (See, e.g., Denman v. Public

Service Electric & Gas Co., No. A-3025-10-1-4 This is a bad faith attempt at

imposing undue fnancial burden on the Defendant by knowingly and willfully

filing a claim in violation of U. S Code and Federal Election Com mission rules

and regulations.

36. W HEREFORE, Defendant prays

prejudice and that the Federal

that this m atter should be dism issed with

Elections Com mission and Office of General

Counsel be held accountable and sanctions be levied against them as Counsel may

also be crim inally liable if they demand settlem ent for a clearly frivolous law suit.

ln an October 14, 2015 letter from the OGC, the OGC states, tlplease make the

check for the civil penalty payable to the Federal Elections Commission.''

(Emphasis added) The FEC counsel knew full well, and/or should have known

that they were demanding settlement and conciliation for a tim e when the

Defendant was not even a candidate. See, e.g., State of New Hampshire v. Hynes,

978 A.2d 264, 268 (N.H. 2009)

37. W HEREFORE, Defendant prays that sanctions be imposed, as the claim is a bad

faith attem pt to besmirch the reputation of the Defendant by including in the

claim allegations, which are not at issue becàuse they are prior to the applicable

Statute of Limitations.

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* 1

M OTION 2 TO DISM ISS BASED O N FAILURE TO STATE A CLAIM UPON

W HICH RELIEF CAN BE G RANTED

38. On June 10, 2016, the Plaintiff served on the Defendant their first Request of

Discovery.

39. Under the Federal Election Campaign Act, an individual who seeks nom ination

for election or election to federal office becomes a ûscandidate'' and thereby 5

triggers registration and reporting requirements if he or she receives contributions

or m akes expenditures in excess of $5,000 or consents to another person's doing

so in excess of $5,000 on the individuals behalf. 52 U.S.C. j 30101(2)(A),' 11

CFR 100.3(a).

40. Under FEC regulations, an individual who raises or spends money only to ûttest

the waters'' does not becom e a candidate. 1 ICFR 100.72, 100.131

41. The Defendant was not a candidate after the April 2010 Special Election,

therefore he did not trigger any reporting requirements and did not fall tmder the

jurisdiction of the FEC as a candidate.

42. In the Request of Discovery, the Plaintiff acknowledged that the Defendant did

not file the requisite papenvork after the April 2010 Special Electicm to becom e a

candidate or establish a comm ittee. Federal regulations requires that a candidate

5le a new Form 1 and Form 2 in order to establish a new candidacy for each

election cycle.

43. The Plaintiff does not list dates when the Defendant was a candidate as dates

specifically covering the dates in the suit. The Plaintiff m erely incorrectly states

that the Defendant was a candidate.

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T

44. In the complaint, the Plaintiff states, çThis complaint seeks relief for each of the

following expendimres, made on or aher August 20, 2010 - m onths after M r.

Lynch lost the April 2010 special election for Florida s' 19tb Congressional

District in the United State: Hou:e of Representatives e f personal expenses

of M . Lynch with the Lynch Committee's campaign fundsr'' (emphasis added)

45. The Plaintiff admits that the Defendant was, indeed, not a candidate for office,

could not have acted as treasurer and did not have a comm ittee.

46. The Defendant was' not a candidate for office on or after August 20, 2010. As

such, the FEC had no jurisdiction and there is no basis for any legal conclusion

that the Defendant was a candidate therefore, he did not fall under the jurisdiction

of the FEC.

47. There are no factual allegations made by the Plaintiff that the Defendant was,

indeed, a candidate on or after August 20, 2010 and, as such, the FEC had no

jurisdiction with regard to the Defendant being a candidate.

48. The Plaintiff adequately asserts that the Defendant was a candidate dudng the

November 2008 election and the April 2010 election only and never asserts that

the Defendant was a candidate on or aher August 20, 2010.

49. The Plaintiff m isstates that the Defendant spent itcam paign ftm ds'' on personal

expenses as there was no campaign, he was not a candidate for any oftke (as the

Plaintiff admits in their discovery request), there was no Committee and he was

not acting in the capacity of Treasurer. As such, the FEC has no jurisdiction or

basis to file a claim based on the Defendant acting in the capacity of a candidate

or treasurer Or that there was a com mittee.

Case 9:15-cv-81732-KAM Document 26 Entered on FLSD Docket 07/07/2016 Page 11 of 47
50. The Defendant could not have spent çûcampaign funds'' as the Plaintiff claim s as

there was neither a cam paign nor a candidate.

51 . The Defendant did tile a Statement of Candidacy and Statem ent of Organization

for the 2008 election and, subsequently for the April 2010 Special Election, only.

52. After the Defendant's loss in the April 2010 Special Election he did not file a

Statem ent of Candidacy nor a Statem entof Organization for any subsequent

election after April 2010 and, as such, he ceased being a candidate, he ceased

acting as the Treasurer and the Com mittee was no longer an entity, active or

otherwise.

53. The Defendant took no actions to qualify for the ballot under Florida State Law

after the April 2010 Special Election.

54. According to The Federal Election Comm ission, candidates M UST register for

each election cycle by filing a tçnew'' FEC Form 2 in order to be considered a

candidate and to establish a com mittee.

55. After the loss in the April 2010 Special Election, the Defendant decided not to

become a candidate in the August 2010 Prim ary Election or the November 2010

General Eleetion.

56. Before deciding whether or not to campaign for the 2012 election, the Defendant

decided to tûtest the waters'', and explore the feasibility of becoming a candidate

by ascertaining infonnation such as opinions regarding his feasibility, popularity

and the outcome of the November 2010 General Election. As such the Defendant

traveled around the district for several months prior to and shortly after the 2010

Case 9:15-cv-81732-KAM Document 26 Entered on FLSD Docket 07/07/2016 Page 12 of 47
General Election. A1l of this :ûtesting the waters'' resulted in the Defendant

deciding not to run for office again.

57. According to The Federal Election Com mission regulations, an individual who

m erely conducts selected testing the waters activities that fall within the

exemptions in FEC regulations does to have to register or report as a candidate

even if the individual raises or spends m ore than $5,000 on those activities. ln the

com plaint, the Plaintiff adm its that the amount allegedly spent by the Defendant

was $1,374.12, signiticantly less than the $5,000 threshold.

58. Under FEC regulations, an individual who raises or spends money only to ''test

the waters'' (but not to cnmpaign for office) does not become a candidate. 1 1 CFR

100.72, 100.131.

59. According to the civil complaint, the Defendant spent no m ore than $1,374.12,

significantly below the $5,000 threshold.

60. According to The Federal Election Comm ission regulations, an individual who

tests the waters must keep financial records and IF he later becomes a candidate,

the money raised and spent to test the waters m ust be reported by the campaign as

contributions and expenditures.

61 . According to The Federal Election Com mission regulations, illf an individual

decides not to run for federal office, there is no obligation to report these finances,

and the donations made to the testing-the-waters com mittee will not cotmt as

contributions.'' As the Defendant decided not to run for federal ofsce he was not

obligated to report these finances and, as such, did not. Further, these m onies did

not count as contributions.

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62. According

consideration, though not a requirem ent, is the segregation of testing-the-waters

ftmds from personal funds.''

to The Federal Election Com mission regulations, ûlanother

Treasurer of any com mittee

requirem ent to segregate personal funds from funds used to test the waters.

Since the Defendant was not a candidate, was not

and there was no comm ittee, there was no

63. Under the Federal Election Campaign Act, an individual who seeks nom ination

for election or election to federal office becomes a tlcandidate'' (and thereby

triggers registration and reporting requirements)

contributions or m akes expenditures in excess of $5,000 or consents to another

he or she receives

P of $5,000 on the individual's behalf. 52 U.S.C. j erson's doing so in excess

30101(2)(A); 1 1 CFR 100.3(a).

64. The Defendant spent significantly less that $5,000 when testing the waters to

decide whether or not to run for office.

65. Al1 of the funds used to test the waters came from the Defendant's personal funds

and since the Defendant ultim ately decided to not nm for office prior to reaching

any financial threshold there was no obligation to report any finances to The FEC

and the Defendant never becnme a candidate. Thus, the FEC did not have

jurisdiction over the Defendant.

66. No action taken prior to August 20, 2010 could be at issue because it is prior to

the applicable Statue of Limitations.

67. W HEREFORE, the Plaintiff has failed to present sufficient facts which, if taken

as tnle, would indicate that a violation of law had occurred as the Plaintiff s claim

is based on legally allowed expenditures while the Defendant was testing the

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waters and there is no factual content that allows the court to draw the reasonable

inference that the Defendant is liable for any m isconduct since he was not under

the jtlrisdiction of the FEC as he was not a candidate, he was not Treasurer and

there was no longer any com mittee as the Defendant did not file the requisite

fonns and that the Defendant followed the FEC regulations regarding the ûttesting

the waters'' period. W hile the court is not to strain to find inferences favorable to

the plaintiff and is not to accept conculsory allegations, unwarranted deductions

or legal conclusions lt2 lnvs. LDC v. Phillips, 401 F.3d 638, 642 (5th Cir. 2005),

the Plaintiff does not m ake a claim that the Defendant was a candidate, in fact, to

the contrary, the Plaintiff admits that the Defendant was not a candidate in their

requests for discovery and was not required to abide by reporting requirem ents as

if he was a candidate. The Defendant prays the court to dism iss the com plaint

with prejudice and award sanctions.

68. W HEREFORE, Defendant prays that sanctions be im posed, as the claim is

frivolous as the Plaintiff knew or should have known that the pursuit of litigation

was without any reasonable basis in law or equity. (See, e.g., Denman v. Public

Service Electlic & Gas CO., No. A-3025- 10T4 This is a bad faith attempt at

im posing undue financial burden on the Defendant by knowingly and willfully

filing a claim in violation of U. S Code and Federal Election Com mission rules

and regulations.

69. W HEREFORE, Defendant prays that this matter should be dismissed with

prejudice and that the Federal Elections Commission and Office of General

Counsel be held accountable and sanctions be levied against them as Cotmsel m ay

Case 9:15-cv-81732-KAM Document 26 Entered on FLSD Docket 07/07/2016 Page 15 of 47
also be crim inally liable if they dem and settlem ent for a clearly frivolous lawsuit.

ln an October 14, 2015 letter from the OGC, the OGC states, ilplease m ake the

check for the civil penalty payable to the Federal Elections Com mission.''

(Emphasis added) The FEC counsel knew full well, and/or should have known

that they were dem anding settlem ent and conciliation for a tim e when the

Defendant was not even a candidate. See, e.g., State of New Ham pshire v. Hynes,

978 A.2d 264, 268 (N.H. 2009)

70. W HEREFORE, Defendant prays that sanctions be imposed, as the claim is a bad

faith attem pt to besmirch the reputation of the Defendant by including in the

claim allegations, which are not at issue because they are prior to the applicable

Statute of Limitations.

M OTION 3 TO DISM ISS BASED ON THE EXPIM TIO N OF TH E STATUTE O F

LIM ITATIO NS

71. ln the Office of General Counsel's (OGC) own Conciliation Agreement,

statem ents and com plaint, there are no specific dates of any particular alleged

violations other than lkFrom 2008 through 20105' despite m e asking for sam e. The

reason that there are no specific dates is that any and a1l alleged violations

occurred outside of the five (5) year statute of limitations. By the OGC'S own

admission, no violations occurred after 2010 which is five (5) years and nine (9)

m onths since the Defendant w as even a candidate for office. The complaint lists

item s that were never previously discussed and outside the statute of lim itations

with regard to the FEC having jurisdiction over the Defendant as a candidate or

treasurer.

Case 9:15-cv-81732-KAM Document 26 Entered on FLSD Docket 07/07/2016 Page 16 of 47
72. For the pum oses of the discussion of the statute of lim itations the following

factual dates need to be established. The Defendant was a candidate for US

Congress in November of 2008 and once again in a special election having an

election date of April 13, 2010. Therefore, again, over tive years and nine months

has elapsed since the time that the Defendant was a candidate, having never filed

any subsequent paperwork which would m ake the Defendant a candidate.

73. The OGC'S conciliation agreement calls for paying étcivil penalties'' for personal

use violations and reporting violations çsstill rem aining w ithin the stamte of

limitations'', This is patently false as there is nothing ttstill rem aining within the

statute of limitations'' as it has been over five (5) years and nine (9) months since

the Defendant was even a candidate. Once again, the OGC references alleged

violations ltfrom 2008 through 2010'5 with no specific dates for specific alleged

violations although previous conciliation agreements reference alleged violations

from the earliest part of the tim eline.

74. The sOttzte of lim itations is based on the FEC'S own ç'Guidebook for

Complainants and Respondents on the FEC Enforcement Process'' (May 2012

edition) (ûTEC Guidebook''), federal law, previous FEC Commission rulings and

case law .

75. The FEC Guidebook states on Page six (6), ûûcomplaints should be filed as soon

as possible after the alleged violation becom es known to the eom plainant in order

to preserve evidence and the Com mission's ability to seek civil penalties in

federal district court within the five-year statutes of limitations period (measured

from the time of the violation) provided by 28 U.S.C. j 2462 (civil) and 2 U.S.C.

Case 9:15-cv-81732-KAM Document 26 Entered on FLSD Docket 07/07/2016 Page 17 of 47
j (criminall-''

ability to seek civil penalties within the five-year statute of lim itations period

m eastlred from the tim e of the violation.

Based on the FEC'S own guidebook, the Com mission only has the

This citing of federal code and

interpretation of federal law indicates that, due to the nmount of tim e being over

the five year statute of lim itations, it is unlawful and in bad faith for the FEC to

seek civil penalty.

76. Additionally, the FEC Guidebook, on page eighteen (18) states, tlBecause the

Commissions' ability to seek civil penalties in federal district court is subject to a

five-year statute of limitation, see 28 U.S.C. j 2462, OGC may request at any

stage in the enforcem ent process that the respondent agree to toll the statue of

limitations, including during the pendency of the pre-probable cause conciliation

process.'' Any alleged violations as a candidate are well outside of the five-year

statute of lim itations.

77. U.S.C. j 2462, Time for commencing proceedings clearly states, in parq tçExcept

as otherwise provided by Act of Congress, an action, suit or proceeding for the

enforcem ent of any civil fine, penalty, or forfeitlzre, pecuniary or otherwise, shall

not be entertained tmless comm enced within five years from the date when the

claim first accrued. . .''. Due to the fact that it is more than five (5) years and nine

(9) months since the Defendant was even a candidate, it would be significantly

longer than that since any of the alleged violations occurred and the suttzte of

lim itations has long been exceeded.

78. In FEC v. National Republican Senatorial Committee (93-1612) the court ruled,

itln applying U.S.C.j 2462, the court determined that the statue of limitations

Case 9:15-cv-81732-KAM Document 26 Entered on FLSD Docket 07/07/2016 Page 18 of 47
@ +

started nmning from the date of the

Novem ber 1985 and November 1986.

violations and the date the FEC flled this case w ith the court exceeded the 5-

alleged violations-the period between

Since the tim e between the dates of the

year statute of Iim itations, the FEC could not pursue the im position of civil

penalties.'' (Emphasis added) Since the court established that the statute of

lim itations begins nmning ilfrom the date of the alleged violations'', it is clear that

any alleged violations would have occurred outside of the five (5) year statute of

lim itations and pursuing the imposition of civil penalties would be contrary to

federal law. The OGC'S insistence that failure to sign a patently false conciliation

agreement is m eant as a bad faith, intim idation factor and a blatant threat that the

OGC, based on their own FEC Guidebook and interpretation of federal law ,

knows that it is bad faith and unlawful to, as the OGC states, étinstitute a civil suit

in United States District Court and seek payment of a civil penalty'' (letter dated

October 14, 2015).

79. The court ruled that it is contrary to U.S.C. j 2462, to seek civil penalties after the

statute of lim itations has rtm . ln an October 14, 2015 letter from the OGC, the

OGC states, çûplease m ake the check for the civil penalty payable to the Federal

Elections Commission.'' (Emphasis added) ' Therefore, since the court ruled in

FEC v. NRSC (93-1612), ûlthe FEC could not pursue the imposition of civil

penalties.'' Clearly, the OGC is wrongly seeking a tûcivil penalty'' as part of their

conciliation agreem ent.

80. ln FEC v. National Right To Work Committee (90-0571), the court nzled, tlln

general, federal governm ent agencies must initiate proceeding to assess civil

Case 9:15-cv-81732-KAM Document 26 Entered on FLSD Docket 07/07/2016 Page 19 of 47
* *

penalties, fines and forfeitures within 5 years from ttthe date when the claim first

accrued.'' 28 U.S.C. j 2462. Again, in FEC v. National Republican Senate

Committee, the court ruled that this statue of lim itations applied to the FEC and

that the statue of lim itations began to run when the alleged offense was

comm itted. The FEC is barred from filing a suit as the date of any alleged

violation is well outside of the five (5) year statute of limitations.

81. ln the M atter of PBS&J Com oration, et al, M UR 5903, the Comm ission ruled,

lsM ore importantly, by the tim e this m atter was first brought before us in

September 2009, the five-year statue of lim itations had already expired on a1l

violations. ..-fherefore, because we could not conclude that the five-year statue of

limitations could be tolled under the facts in this matter, we voted against

pursuing this matter further.''

82. The Ninth Circuit Court of Appeals held that FEC enforcement actions are subject

to the default five-year statute of limiitions in 28 U.S.C. j 2462. According to

the Williams court, the limitations period began running at the time the activities

occurred and, as a result, the FEC'S com plaint was time-barred. A11 of the

occurrences of the alleged activities that the FEC claim s are well outside the five

(5) year statute of limitations.NONE of the occurrences of the alleged activities

are within the five (5) year statute of limitations.

83. ln The M atter of the Paul Brotm Com mittee, M ur 6556, although the Com mission

did find that there were reporting violations, they ruled, in part, tithese alleged

reporting violations occurred m ore than five years ago and thus are outside the

five-year statue of limitations period. See 28 U.S.C. j 2462; see also, FEC v.

Case 9:15-cv-81732-KAM Document 26 Entered on FLSD Docket 07/07/2016 Page 20 of 47
*

Nat '1 Repub. Senatorial Comm., b77 F. Supp. 15, 19 (D.D.C 1995). Because the

original activity fell outside the five-year statute of limitations within

approximately two m onths of the Complaint being filed, the Comm ittee has

substantially corrected the record, and there are no other violations at issue in this

matter, the Comm ission dism isses the allegations in M UR 6556 that the

Committee violated 2 U.S.C. j 434(b) and 1 1 C.F.R. j 104.3(d)(4) by failing to

accurately report loans and disbursem ents and closes the file. See Heckler v.

Chaney, 470 U.S. 821 (1985).''

84. lt was well within the rights of and incumbent upon the FEC Commission (See

Heckler v. Chaney) based on well-documented precedents and clear arld concise

federal 1aw to dism iss the allegations. The FEC'S overreach in filing suit is a clear

case of bad faith and prejudice.

85. W HEREFORE, based on U.S.C. j 2462, the court ruling in FEC v. National

Republican Senatorial Committee (93-1612), the court ruling in FEC v. National

Right To Work Committee (90-0571), PBS&J Corporation, Paul Broun

Com mitlee, the ruling of The Ninth Circuit Court of Appeals, and the FEC

Guidebook', since there is no additional tolling of the sGttzte of limitations and it

is, at a minimum, five (5) years and nine (9) months since the Defendant was even

a candidate for office, Defendant prays that this m atter should be dism issed with

prejudice and that the Federal Elections Commission and Office of General

Counsel be held accotmtable and sanctions be levied against them as Cotmsel m ay

also be crim inally liable if they dem and settlem ent for a clearly frivolous lawsuit

as the FEC counsel knew full well that they were dem anding settlement and

Case 9:15-cv-81732-KAM Document 26 Entered on FLSD Docket 07/07/2016 Page 21 of 47
conciliation for a time when the Defendant was not even a candidate. See, e.g.,

State of New Hampshire v. Hynes, 978 A.2d 264, 268 (N.H. 2009)

M OTION 4 TO DISM ISS BASED ON BREACH OF 52 U. S. C. j30109(a)(4)(A)

REQUIRING THE COM M ISSION TO SEEK TO CORRECT ANY VIOLATIONS

TH ROUGH INFO RM AL M ETH ODS O F CONFERENCE, CONCILIATIO N AND

PER SUASION FO R AT LEAST 30 DAYS AND NO M ORE THAN 90 DAYS

86. On October 14, 2015, a letter was sent by the OGC which attempted to allow for

conciliation. The letter clearly allowed for, ûkno more than 90 days''.

Additionally, 52 U. S. C. j30109(a)(4)(A) requires The Commission to seek to

correct any violations through inform al methods of conference, conciliation and

persuasion for at least 30 days and no more than 90 days and the FEC

GtGuidebook for Complainants and Respondents on the FEC Enforcem ent

Process'' allows for 30-90 days for Conciliation. The Defendant was not provided

the particulars of the alleged violations until December 15, 2015, despite the

Defenant's several requests for sam e.

87. During the week of October 26, 2015 the Defendant had a conversation with

OGC, Ana Pena-W allace going over what could be done to conciliate this m atter

and put this matter to rest once and for a11 despite not having the work papers

depicting the extent of the claim s.

88. On Novem ber 6, 2015, the Defendant received a follow up em ail from Ana PenaW allace regarding the conversation the previous week.

Case 9:15-cv-81732-KAM Document 26 Entered on FLSD Docket 07/07/2016 Page 22 of 47
89. On November 6, 2015, the defendant responded asking for the OGC work papers

as the Defendant disagreed with the claim s that the OGC was m aking and the

Defendant wanted a chance to refute their claim s of alleged violations in order to

eliminate or mitigate any civil penalty.

90. On Novem ber 9, 2015, Ana Pena-W allace responded via email that she wanted to

schedule another phone call.

91. On November 9, 2015, the Defendant responded via email that the Defendant felt

that the best course of action would be for the OGC to send him their work papers

so that our phone conversation would be more fruitful. The Defendant once

again, requested the backup documentation substantiating their claim so that he

may refute their claim s as necessary and work towards a resolution elim inating or

mitigating any civil penalty fine.

92. On November 10, 2015, Ana Pena-W allace stated, tûW e are unable to provide you

with any attorney work product. . .'' and the Defendant was told to tlreview bank

statements''. It makes it impossible to refute any claim when the defendant has no

knowledge of the extent of an alleged claim and the Defendant was not able to

adequately address any sort of conciliation agreem ent although, in good faith, the

Defendant attempted.

93. The only way that the Defendant received the numbers that he sought was when

the Defendant was forwarded a draft of the civil suit, despite his repeated requests

for sam e. Reviewing the complaint allowed the Defendant the frst opporttmity to

even know what the OGC was alleging.

94. The Defendant was also told, several tim es that the period for entering into a

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conciliation agreement would end on Novem ber 15, 2015, to which he

vehemently disagreed with due to the aforem entioned letter and not being

provided with the documentation that he requested providing the extent of the

alleged violations claimed by the OGC.

95. On Decem ber 14, 2015 in an em ail to M r. Blumberg, the Defendant emphasized

his willingness to enter into a conciliation agreem ent to put this m atter finally to

rest and that he wanted to m itigate any financial burden which is why he was

requesting the work papers as he disagreed with the assertions of the OGC

regarding the alleged violations..

96. On December 15, 2015 the Defendant received a draft of the civil complaint,

which mirrors this civil suit. lt was at this point that, for the srst tim e, the

Defendant received what the OGC was claim ing was in violation and it was

significantly less than what they originally claim ed as well as being for a time

when the Defendant was not even a candidate. The Defendant was not even given

a chance to review the inform ation adequately disputing the OGC'S claim that this

was a personal use violation as the item s in question were not personal.

97. Based on 52 U. S. C. j30109(a)(4)(A) The Commission is required to seek to

correct the violations through inform al methods of conference, conciliation, and

persuasion for at least 30 days and no m ore than 90 days.

98. On Decem ber 16, 2015, the Defendant sent an email to OGC, M r. Deeley, in an

attempt to enter into a conciliation agreem ent negotiation utilizing the percentages

of alleged penalties sent to him by the OGC previously despite disagreeing with

the amount the OGC was claiming and the FEC not having jtuisdiction over the

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Defendant, in order to m itigate this m atter and finally put it to rest.

99. On December 17, 2015 OGC, Erin Chlopak sent the Defendant an email declining

to accept the offer that he sent and he was told that the am ount that he derived,

utilizing the FEC'S own m athematical fonnulas, was û'not nearly com mensurate

with the extent of the violations at issue in this matter'' despite not even having

been a candidate during this tim e. The OGC was using the extent of civil

violations as a measure, N OT the amount of the alleged violations, contrary to

their ordinary and previous practice. She indicated that the 10% of the potential

penalties was not enough however, the 10% of civil penalties sought is nearly

96% of the alleged violations, which is significantly higher than any percentages

that were offered or used as a basis previously.

100. On December 17, 2015 the Defendant responded that he did not even know what

they consider ''comm ensurate with the extent of the violations at issue in this

m atter''. According to the FEC'S own suit, that the Defendant received the day

before, the ''extent of the violations at issue in this m atter'' and still remaining

within the statute of limitations is $1,622.49 (ultimately amended to $1,374.12).

This was an amount and for items that the Defendant never had information on,

was ultim ately changed in the Amended Complaint and was for during a tim e that

the Defendant was not even a candidate and not under the jurisdiction of the

FEC.

101. Given the delay in getting the inform ation that the Defendant requested alm ost 6

weeks prior to receiving the actual alleged violations in the claim and the OGC

not accepting the EXACT percentage offered of the higher percentages in the

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government's conciliation agreem ent, it is a clear breach of the covenant of good

faith and, in fact, bad faith to have not allowed the Defendant the opportunity for

the full amount of time allotted by the govelmm ent's own handbook and more

specifically the October 14, 2015 letter sent by the OGC to him a1l governed by

52 U. S. C. j30109(a)(4)(A). Especially given the fact that the amount in

question is quite minim al and for a time that the Defendant was not even a

candidate and not under the jtlrisdiction of the FEC regarding reporting.

loz.Additionally, the OGC would not discuss anything further unless the Defendant

agreed to sign a tolling agreement yet there was no language in the tolling

agreem ent so as not to resuscitate claim s for which the lim itations period has

already passed despite his request for snme. Based on the government's blatantly

false claim s of what was the actual am ount of alleged violations still rem aining

within the statute of limitations and the ''requirem ent'' to provide an inadequate

tolling statem ent or face civil suit violating the government's own timeline, there

is clear and convincing evidence that the govenunent is engaged in a blatant

breach of its duty of good faith and fair dealing despite the government's

requirem ent to do so as per 52 U. S. j30109(a)(4)(A). Contrarily, the

Defendant ahs acted in good faith, without the assistance of counsel, as the

continued costs of tens of thousands of dollars m ade it prohibitive to continue to

engage outside counsel, in order to resolve this issue and enter into a conciliation

agreem ent based on the alleged item s still rem aining within the sàtute of

limitati ()rl s and tltilizing the OGC'S very own percentages to do so, despite

disagreeing with the OGC'S assertions of a violation as the Defendant was not

Case 9:15-cv-81732-KAM Document 26 Entered on FLSD Docket 07/07/2016 Page 26 of 47
even a candidate and not under the jurisdiction of the FEC for reporting purposes.

103. The Defendant continued to endeavor to avoid a civil suit, as he has this entire

tim e, and he was still hopeful that this issue could be resolved in a tim ely

m anner. He could not imagine that a reasonable conciliation agreem ent could not

be agreed to quickly based on the $1,622.49 (ultimately amended to $1,374.12) of

alleged violations still rem aining within the situte of lim itations, which the

Defendant disagreed with. He would not have engaged in this strenuous exercise

if he was not interested in seriously attem pting to conciliate this matter and to

infer such is wrong.

104. According to 52 U. S. C. j30109(a)(4)(A), The Commission is required to seek

to correct the violations through inform al methods of conference, conciliation,

and persuasion for at least 30 days and no more than 90 days. The OGC, by

refusing to provide any work papers until 2 days prior to the filing of a suit,

despite the Defendnat's repeated requests for same, violated 52 U . S. C.

j30109(a)(4)(A) by only allowing 2 days, violating their obligation to allow at

least 30 days. Additionally, the Defendant responded, in good faith, im mediately

upon receipt of correspondence from the OGC in an attem pt to enter into a

conciliation agreem ent negotiation and resolve this matter despite not being under

the jurisdiction of the FEC regarding reporting as he was not a candidate.

105. Any claim that the FEC allowed for the requisite am ount of tim e is patently

false. lt is impossible to enter into any settlement conciliation agreement without

knowing what the alleged violations are or for what time period. Additionally, it

is impossible to know what to even correct if the FEC does not provide what the

Case 9:15-cv-81732-KAM Document 26 Entered on FLSD Docket 07/07/2016 Page 27 of 47
alleged violations are that would need to be corrected. Finally, it is impossible to

enter into conciliation negotiations without benefh of the knowledge of what the

extent of the alleged violations are considering that m ost conciliation agreem ents

and, for that matter, a1lsettlem ents are based upon a percentage of the alleged

violations. The Defendant did not even know that the alleged violations that the

FEC stated were for a tim e period when he was not even a candidate and

therefore, falling under different regulations for testing the waters.

106. The Plaintiff did not even know what the amount of alleged violations was as

they lowered the amount f'rom $1,622.49 to $1,374.12, a reduction of 15.3% .

Given that the Plaintiff could not come up with a defnitive am ount of alleged

violations to the point where they had to amend their civil com plaint, it would be

literally im possible to negotiate any kind of settlem ent since any settlement would

be based on the extent to the alleged violations. This in addition to the fact that

the Plaintiff would not disclose to the Defendant that the alleged violations in

question were for a time period when he was not even a candidate.

107. The OGC know ingly and willfully lied and m isrepresented the actual am otmt of

alleged violations in order to achieve a higher settlem ent offer in the conciliation

agreem ent as well as intentionally lied as the alleged violations occurred when the

Defendant was not even a candidate. Additionally, the OGC refused to provide

the Defendant with any work papers substantiating their claim until 2 days prior

to initiating this claim . W hen their bad faith and m isdeeds were discovered, they

im mediately tried to strong arm the Defendant into a settlement which is higher

than the amount sought in this complaint and, when he would not acquiesce, they

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imm ediately filed suit despite their legal obligation to correct the alleged

violations through inform al methods. They would not even attem pt to enter into

negotiations based on the actual alleged violations as is required under 52 U . S. C.

j30109(a)(4)(A).

108. Counsel m ay also be crim inally liable if they demand settlem ent for a clearly

frivolous law suit as the FEC counsel knew full well that hey were demanding

settlement and conciliation for a time when the Defendant was not even a

candidate. See, e.g., State of New Hampshire v. Hynes, 978 A.2d 264, 268 (N.H.

2009)

109. As a matter of fact, given that the FEC has, once again, failed to provide an

acclzrate amount due changing the am ount that they claim in alleged violations

proves that they continue to m ake it im possible to enter into any realistic

settlement or conciliation discussions as any settlem ent or conciliation or civil

penalty would be based on the extent of the alleged violations and would be

greatly im pacted as to the status of whether or not the Defendant was a candidate.

By continuing to fail to provide acctlrate infonnation, they continued to violate

their requisite duty to act in good faith to seek to correct the violations through

informal m ethods of conference, conciliation, and persuasion for at least 30 days

and no m ore than 90 days.

IIO.W HEREFORE, based on direct violation of 52 U. S. C. j30109(a)(4)(A),

Defendant prays that this matter should be dismissed with prejudice and that the

Federal Elections Comm ission and Oftk e of General Counsel be held accountable

and sanctions be levied against them as Counsel may also be crim inally liable if

Case 9:15-cv-81732-KAM Document 26 Entered on FLSD Docket 07/07/2016 Page 29 of 47
they dem and settlement for a clearly frivolous lawsuit. In an October 14, 2015

letter from the OGC, the OGC states, Sûplease m ake the check for the civil penalty

payable to the Federal Elections Commission.'' (Emphasis added) The FEC

counsel knew full well and/or should have known that they were demanding

settlement and conciliation for a tim e when the Defendant was not even a

candidate. See, e.g., State of New Hampshire v. Hynes, 978 A.2d 264, 268 (N.H.

2009)

M OTION 5 TO DISM ISS BASED ON BR EACH O F FEC G UIDELINES

1 1 1. On October 14, 2015, a letter was sent by the OGC which attempted to allow for

conciliation. The letter clearly allowed for, lûno more than 90 days''.

Additionally, the FEC lsGuidebook for Complainants and Respondents on the

FEC Enforcem ent Process'' allows for 30-90 days for Conciliation.

1 12. During the week of October 26, 2015 the Defendant had a conversation with

OGC, Ana Pena-W allace going over what could be done to eonciliate this m atter

and put this matter to rest once and for all.

1 13. On November 6, 2015, the Defendant received a follow up em ail from Ana

Pena-W allace regarding our conversation the previous week.

1 14. On Novem ber 6, 2015, the Defendant responded asking for the OGC work

papers as the Defendant disagreed with the claim s that the OGC was m aking.

1 15. On Novem ber 9, 2015, Ana Pena-W allace responded that she wanted to schedule

another phone call.

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1 16. On Novem ber 9, 2015, the Defendant responded that he felt that the best course

of action would be for the OGC to send m e their work papers so that the phone

conversation would be m ore fruitful. The Defendant once again, requested the

backup documentation substantiating their claim .

1 17. On November 10, 2015, Ana Pena-W allace stated, ûiW e are unable to provide

you with any attorney work product.. .'' and the Defendant was told to review

bank statements.

1 18. The only way that The Defendant received the numbers that he sought was when

he was folw arded a draft of the civil suit, despite the Defendant's repeated

requests for snme.

1 19. The Defendant was also told, several tim es, that the period for entering into a

conciliation agreement would end on Novem ber 15, 2015, to which he

vehemently disagreed due to the aforementioned letter and not being provided

with the documentation that he requested. The time to enter into a conciliation

agreem ent, which the Defendant was m ore than willing to do, did not end and it

should not have ended until January 12, 2016.

120.Based on 52 U. S. C. j30109(a)(4)(A) The Commission is required to seek to

correct the violations through informal m ethods of conference, conciliation, and

persuasion for at least 30 days and no more than 90 days. Therefore, it is the

Defendant's right to have m ore than 2 days to negotiate a conciliation agreem ent

without having to waive his civil rights and enter into a tolling agreement. The

government has frustrated his ability to m ake an adequate counter offer due to

Case 9:15-cv-81732-KAM Document 26 Entered on FLSD Docket 07/07/2016 Page 31 of 47
refusing to provide him with the information that he requested until December 15,

2015 and is acting in bad faith dem anding that the Defendant sign another tolling

agreement by 9:00 AM by the next day or face a civil suit when the governm ent's

own letter allowed until January 12, 2016 (90 days), not the tw0 (2) days that he

w as provided, especially considering the civil suit was for a period of time when

the Defendant was not even a candidate and the reporting requirements are

signitk antly different for candidates versus non-candidates.

121. On December 14, 2015 in an email to M r. Blum berg, the Defendant em phasized

his willingness to enter into a conciliation agreement and that he wanted to

m itigate any financial burden which is why he was requesting the work papers as

he disagreed with the assertions of the OGC and the FEC told the Defendant that

the complaint was for a tim e period when he was a candidate, which is not the

Case.

122. On Decem ber 15, 2015 the Defendant received a draft of the civil com plaint,

which mirrors this civil suit. lt was at this point that, for the first tim e, that the

Defendant received what the OGC was claim ing was in violation and it was

significantly less than what they originally claim ed and it was for a time period

for when the Defendant was not even a candidate, which requires different

reporting, if any. The Defendant was not even given a chance to review the

inform ation adequately disputing the OGC'S claim that this was a personal use

violation.

123. The Defendant asked several tim es for the ''work papers'' which he was told, in

the November 10, 2015 email, that the OGC would not be willing to

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provide. Finally, the Defendant was provided the documentation that he sought

on Decem ber 15, for the first time, and given less than 2 days to conciliate this

matter, utilizing the actual num bers, when the October 14, 2015 letter allows for

''no more than 90 days'' and the FEC ''Guidebook for Complainants arld

Respondents on the FEC Enforcem ent Process'' allows for 30-90 days for

Conciliation. This is despite m e m aking a good faith effort and providing a

cotmter to the OGC conciliation agreem ent the very sam e day that the Defendant

was provided the actual amounts still rem aining within the statute of lim itations

and finding out, for the first tim e, that this was for a tim e that he was not even a

candidate and was testing the waters. Both the letter and the Guidebook would

allow until January 12, 2016 to enter into a conciliation agreem ent.

124. On Decem ber 16, 2015, the defendant sent an em ail to OGC, M r. Deeley, in an

attempt to enter into a conciliation agreement utilizing the percentages of alleged

penalties sent to m e by the OGC previously. He did this in good faith, as he

disagreed with the assertion of the OGC that the item s in question were for

personal use and that it was for tim e that the Defendant was not even a candidate

and for a time that he was testing the waters.

125.0n December 17, 2015 OGC, Erin Chlopak sent m e an email declining to accept

the offer that the Defendant sent and was told that the am ount that he derived,

utilizing the FEC'S own mathem atical formulas, was ûsnot nearly comm ensurate

with the extent of the violations at issue in this m atter''. The OGC was using the

extent of civil violations as a m easure, NOT the amount of the alleged violations,

contrary to their ordinary and previous practice. She indicated that the 10% of the

Case 9:15-cv-81732-KAM Document 26 Entered on FLSD Docket 07/07/2016 Page 33 of 47
potential penalties was not enough however, the 10% of civil penalties sought is

nearly 96% of the alleged violations, which is significantly higher than any

percentages that were offered or used as a basis previously.

126. On Decem ber 17, 2015 the Defendant responded that he did not even know what

they consider ''com m ensurate with the extent of the violations at issue in this

m atter'' and the civil suit is for tim e that the Defendant was not even a candidate.

According to the FEC'S own suit, that the Defendant received the day before, the

''extent of the violations at issue in this matter'' and still rem aining within the

statute of limitations was $1,622.49 (ultimately nmended to $1,374.12) and for a

tim e period when he was not even a candidate. After all these years and the tens

of thousands of dollars in paid attorney fees and undue stress, the extent of the

alleged violations at issue in this matter came down to $1,622.49 (ultimately

amended to $1,374. 12) and for a time period when the Defendant was not even a

candidate and was testing the waters. This is an am ount based on alleged

violations that the Defendant was given, for the first time on December 15, 2015.

He was given 2 days to review the information provided in this suit, contrary to

the legal obligation stated in 52 U. S. C. j30109(a)(4)(A). The Defendant, in a

good faith effort to resolve this matter, offered the EXACT snm e percentage that

the OGC sought which is higher than every other conciliation agreem ent that he

has researched. In good faith, the Defendant even offered if 100% of the

$1,622.49 (ultimately amended to $1,374.12) in alleged violations still remaining

within the statute of lim itations be more appropriate, even though he was under no

obligation to do so as he was not even a candidate. The Defendant also requested

Case 9:15-cv-81732-KAM Document 26 Entered on FLSD Docket 07/07/2016 Page 34 of 47
for the OGC to provide him w ith

counter offer on the numbers provided and utilized by the OGC.

lz7.Additionally, the OGC would not discuss anything further unless the Defendant

a counter offer. The Defendant based his

signed a tolling agreem ent yet there was no language in the tolling agreement so

as not to resuscitate claim s for which the lim itations period has already passed

despite his request. Based on the govenunent's blatantly false claim s of what is

the actual am ount of alleged violations still remaining within the statute of

lim itations, the fact that the Defendant was not even a candidate and the

''requirem ent'' to provide an inadequate tolling statem ent or face civil suit

violating the governm ent's own timeline, there is clear and convincing evidence

that the govelmm ent is engaged in a blatant breach of its duty of good faith and

fair dealing. Contrarily, the Defendant has acted in good faith, without the

assistance of counsel, as the continued costs of tens of thousands of dollars m ade

it prohibitive to continue to engage outside counsel, in order to resolve this issue

and enter into a conciliation agreement based on the actual item s still remaining

within the statute of lim itations and utilizing the OGC'S very own percentages to

do so.

lz8.According to 52 U. S. C. j30109(a)(4)(A), The Commission is required to seek

to correct the violations through informal m ethods of conference, conciliation,

and persuasion for at least 30 days and no m ore than 90 days as is stated in the

FEC'S ççGuidebook for Com plainants and Respondents on the FEC Enforcement

Process''. The OGC, by refusing to provide any work papers until 2 days prior to

the filing of a suit, despite the Defendant's repeated requests for same, violated 52

Case 9:15-cv-81732-KAM Document 26 Entered on FLSD Docket 07/07/2016 Page 35 of 47
U. S. C. j30109(a)(4)(A) by only allowing 2 days, violating their obligation to

allow at least 30 days. Additionally, the Defendant responded, in good faith,

imm ediately upon receipt of conrspondence from the OGC in an attem pt to enter

into a conciliation agreem ent so as to finally resolve this costly matler.

129. The Plaintiff did not even know what the amount of alleged violations was as

they lowered the am otmt from $1,622.49 to $1,374.12, a reduction of 15.3% .

Given that the Plaintiff could not com e up with a definitive amount of alleged

violations to the point where they had to am end their civil complaint, it would be

literally im possible to negotiate any kind of settlem ent since any settlement would

be based on the extent to the alleged violations. This in addition to the fact that

the Plaintiff would not disclose to the Defendant that the alleged violations in

question were for a tim e period when he was not even a candidate.

130. The OGC knowingly and willfully lied and m isrepresented the actual amount of

alleged violations in order to achieve a higher settlem ent offer in the conciliation

agreement as well as not even infonning the Defendant that the civil suit was for a

time when he was not even a candidate and testing the waters. W hen their

m isdeeds were discovered, they im mediately tried to strong arm the Defendant

into a settlement, which is higher than the amount sought in this suit, and, when

he would not acquiesce, they im mediately filed suit. They would not even

attempt to enter into negotiations based on the actual alleged violations as is

required under 52 U. S. C. j30109(a)(4)(A). The Defendant had no knowledge

of what the actual item s that the OGC was claiming as personal use violations

were tmtil Decem ber 15, 2015 despite over 6 weeks of asking for same and, in

Case 9:15-cv-81732-KAM Document 26 Entered on FLSD Docket 07/07/2016 Page 36 of 47
bad faith, they sled suit 2 days after providing the requested docum entation.

Additionally, they did not even infonn the Defendant that the civil suit would be

for alleged violations during a tim e when he was not even a candidate and was

testing the waters, which is allowable and falls under different rules and

regulations.

131.Any claim that the FEC allowed for the requisite amount of time is patently

false. lt is impossible to enter into any settlem ent conciliation agreement without

knowing what the alleged violations are or for what tim e period, especially if they

were for a time period when the Defendant was not even a candidate and testing

the waters. Additionally, it is im possible to klzow what to even correct if the FEC

does not provide what the alleged violations are that would need to be corrected.

Finally, it is impossible to enter into conciliation negotiations without benefit of

the knowledge of what the extent of the alleged violations are considering that

most conciliation agreements and, for that m atter, a1l settlem ents are based upon a

percentage of the alleged violations as well as being based on the regulations

guiding the actions of a candidate versus a non-candidate testing the waters.

132. As a m atter of fact, given that the FEC has, once again, failed to provide an

accurate am otmt due changing the amotmt that they claim in alleged violations

proves that they continue to make it impossible to enter into any realistic

settlem ent or conciliation discussions as any settlement or conciliation or civil

penalty would be based on the extent of the alleged violations as well as the rules

and regulations govenzing whether or not the person was a candidate or simply

testing the waters, which requires no reporting at all and would not be a violation.

Case 9:15-cv-81732-KAM Document 26 Entered on FLSD Docket 07/07/2016 Page 37 of 47
*

By continuing to fail to provide accurate inform ation, they continued to violate

their requisite duty to act in good faith to seek to correct the violations through

informal m ethods of conference, conciliation, and persuasion for at least 30 days

and no m ore than 90 days.

133. W HEREFORE, based on the direct violation of the standards set forth in the

FEC'S tlGuidebook for Complainants and Respondents on the FEC Enforcem ent

Process''; Defendant prays that this matter should be dismissed with prejudice and

that the Federal Elections Comm ission and Office of General Counsel be held

accotmtable and sanctions be levied against them as Counsel may also be

criminally liable if they dem and settlement for a clearly frivolous lawsuit. In an

October 14, 2015 letter from the OGC, the OGC states, tiplease m ake the check

for the civil penalty payable to the Federal Elections Commission.'' (Emphasis

added) The FEC counsel knew full well and/or should have known that they were

dem anding settlement and conciliation for a time when the Defendant was not

even a candidate. See, e.g., State of New Hnmpshire v. Hynes, 978 A.2d 264, 268

(N.H. 2009)

M OTION 6 TO DISM ISS BASED ON BAD FAITH

134. On October 14, 2015, a letter was sent by the OGC which attempted to allow for

conciliation. The letter clearly allowed for, teno more than 90 days''.

Additionally, the FEC ttGuidebook for Complainants and Respondents on the

FEC Enforcem ent Process'' allows for 30-90 days for Conciliation.

Case 9:15-cv-81732-KAM Document 26 Entered on FLSD Docket 07/07/2016 Page 38 of 47
*

135. During the week of October 26, 20l 5 the Defendant had a conversation with

OGC, Ana Pena-W allace going over what could be done to conciliate this matler

and put this m atter to rest once and for all.

136.011 November 6,2015, the Defendant received a follow up em ail from Ana

Pena-W allace regarding the conversation from the previous week.

137.011 Novem ber 6, 2015,the Defendant responded asking for the OGC work

papers as l disagreed with the claim s that the OGC was making.

138. On November 9, 2015, Ana Pena-W allace responded that she wanted to schedule

another phone call.

139.0n Novem ber 9, 2015, the Defendant responded that he felt that the best course

of adion would be for the OGC to send him their work papers so that the phone

conversation would be m ore fruitful. The Defendant once again, requested the

backup documentation substantiating their claim .

140.On Novem ber 10, 2015, Ana Pena-W allace stated, t$W e are unable to provide

you with any attorney work product. ..'' and the Defendant was told to review

bank statements.

141.The only way that the Defendant received the num bers that he sought was when

he was forwarded a draft of the civil suit, despite his repeated requests for same.

142. The Defendant was also told, several tim es that the period for entering into a

conciliation agreement w ould end on N ovember 15, 2015, to which he

vehem ently disagreed due to the aforem entioned letter and not being provided

with the documentation that he requested. The tim e to enter into a conciliation

agreement, which the Defendant was m ore than willing to do, did not end and it

Case 9:15-cv-81732-KAM Document 26 Entered on FLSD Docket 07/07/2016 Page 39 of 47
should not have ended until January 12, 2016.

l43.Based on 52 U. S. C. j30109(a)(4)(A) The Commission is required to seek to

correct the violations through informal m ethods of conference, conciliation, and

persuasion for at least 30 days and no m ore than 90 days. Therefore, it is m y right

to have m ore than 2 days to negotiate a conciliation agreem ent without having to

waive m y civil rights and enter into a tolling agreem ent. The govem ment has

frustrated the Defendant's ability to make an adequate counter offer due to

refusing to provide him with the information that he requested until December 15,

20l 5 and is acting in bad faith dem anding that the Defendant sign another tolling

agreement by 9:00 AM by the next day or face a civil suit when the government's

own letter allowed until January 12, 2016 (90 days), not the two (2) days that the

Defendant was provided.

144. On Decem ber 14, 2015 in an email to M r. Blumberg, the Defendant emphasized

his willingness to enter into a conciliation agreement and that he wanted to

mitigate any tinancial burden which is why he was requesting the work papers as

he disagreed with the assertions of the OGC.

145.0n December 15, 2015

which m irrors this civil suit.

the Defendant received a draft of the civil complaint

It was at this point that, for the lirst tim e, that the

Defendant received what the OGC was claim ing was in violation and it was

signitk antly less than what they originally claim ed as well as for being dtlring a

tim e when the Defendant was not even a candidate and was testing the waters.

The Defendant was not even given a chance to review the inform ation adequately

disputing the OGC'S claim that this was a personal use violation.

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146. The Defendant asked, several times, for the ''work papers'' which he was told, in

the Novem ber l 0, 2015 em ail, that the OGC would not be willing to

provide. Finally, the Defendant was provided the docum entation that he sought

cm Decem ber 15 and given less than 2 days to conciliate this m atter, utilizing the

actual num bers, when the October 14, 2015 letter allows for ''no more than 90

days'' and the FEC ''Guidebook for Complainants and Respondents on the FEC

Enforcem ent Process'' allows for 30-90 days for Conciliation. This is despite the

Defendant m aking a good faith effort and providing a cotmter to the OGC

conciliation agreement the very sam e day that he was provided the actual amotmts

still rem aining within the stamte of limitations and given the fact that this for a

time when the Defendant was not even a candidate and not under the jurisdiction

of the FEC. Both the letter and the Guidebook would allow until January 12,

2016 to enter into a conciliation agreem ent.

147. On December 16, 2015, the Defendant sent an email to OGC, M r. Deeley, in an

attempt to enter into a conciliation agreem ent utilizing the percentages of alleged

penalties sent to him by the OGC previously despite not even having been a

candidate at the time of the alleged violations.

148. On December 2015 OGC, Erin Chlopak sent the Defendant an email

declining to accept the offer that he sent and was told that the amount that he

derived, utilizing the FEC'S own mathematical formulas, w as tçnot nearly

comm ensurate with the extent of the violations at issue in this m atter'' despite the

Defendant not even being a candidaste and in a period of testing the waters which

is well within the confines of FEC rules and regulations. The OGC was using the

Case 9:15-cv-81732-KAM Document 26 Entered on FLSD Docket 07/07/2016 Page 41 of 47
extent of civil violations as a m easure, NOT the nmount of the alleged violations,

contrary to their ordinary and previous practice. She indicated that the 10% of the

potential penalties was not enough however, the 10% of civil penalties sought is

nearly 96% of the alleged violations, which is significantly higher than any

percentages that were offered or used as a basis previously.

149. On December 17, 2015 the Defendant responded that he did not even know what

they consider ''com mensurate with the extent of the violations at issue in this

matter''. According to the FEC'S own suit, that the D efendant received the day

before, the ''extent of the violations at issue in this matter'' and still remaining

within the statute limitations is $ 1,622.49 (ultimately amended to

$1,374.12). After al1 these years and the tens of thousands of dollars in paid

attorney fees and tmdue stress, the extent of the alleged violations at issue in this

matter comes down to $1,622.49 (ultimately amended to $1,374. 12) during a time

when the Defendant was not even a candidate and not under the jurisdiction of the

FEC. The Defendant offered the EXACT sam e percentage that the OGC sought

which is higher than every other conciliation agreement that he researched. The

Defendant even offered if 100% of the $1,622.49 (ultimately amended to

$1,374.12) in alleged violations still remaining within the statute of limitations be

m ore appropriate despite not even having been a candidate for oftice. He also

requested for the OGC to provide him with a counter offer. The Defendant based

his counter offer on the num bers provided and utilized by the OGC.

150. Given the delay in getting the inform ation that the Defendant requested alm ost 6

weeks prior to receiving the actual work papers and the OGC not accepting the

Case 9:15-cv-81732-KAM Document 26 Entered on FLSD Docket 07/07/2016 Page 42 of 47
EXACT percentage

conciliation agreem ent, it is a clear breach of the covenant of good faith and, in

fact, bad faith to have not allowed the

offered of the higher percentages in the government's

Defendant the opportunity for the full

amount of time allotted by the government's om a handbook and m ore specifically

the October 14, 2015 letter sent by the OGC to him as well as what is required in

52 U. S. C. j30109(a)(4)(A). Especially given the fact that the amount in

question is quite m inim al and that the Defendant was not even a candidate and

was testing the waters which is allowed as per FEC rules and regulations.

151. Additionally, the OGC would not discuss anything further unless the Defendant

signed a tolling agreement yet there was no language in the tolling agreement so

as not to resuscitate claim s for which the lim itations period has already passed

despite his request for same. Based on the government's blatantly false claims of

what is the actual am ount of alleged violations still remaining within the statute of

limitations, the fact that the Defendant was not even a candidate and the

''requirem ent'' to provide an inadequate tolling statem ent or face civil suit

' violating the govelmm ent's own tim eline, there is clear and convincing evidence

that the governm ent is engaged in a blatant breach of its duty of good faith and

fair dealing. Contrarily, the Defendant has acted in good faith, without the

assistance of counsel, as the continued costs of tens of thousands of dollars m ade

it prohibitive to continue to engage outside counsel, in order to resolve this issue

and enter into a conciliation agreement based on the actual item s still remaining

within the statute of limitations and utilizing the OGC'S very own percentages to

do so despite the fact that the tim e period stipulated in the suit was one in which

Case 9:15-cv-81732-KAM Document 26 Entered on FLSD Docket 07/07/2016 Page 43 of 47
the Defendant was not even a candidate and, therefore, not under the jurisdiction

of the FEC and was testing the waters which is allowable as per the rules and

regulations of the FEC.

152. The Defendant continued to endeavor to avoid a civil suit, as he has this entire

time, and he was still hopeful that there would be a resolution to this issue in a

timely m anner. He can not imagine that a reasonable conciliation agreem ent

could not be agreed to quickly based on the $1,622.49 (ultimately amended to

$1,374. 12) of alleged violations still remaining within the statute of limitations,

which I was willing to do despite disagreeing with the assertion of the OGC that

the item s were for personal use and despite not even being a candidate and testing

the waters. The Defendant would not have engaged in this strenuous exercise if

he was not interested in seriously attempting to conciliate this m atter.

ls3.According to 52 U. S. C. j30109(a)(4)(A), The Commission is required to seek

to correct the violations through infonnalm ethods of conference, conciliation,

and persuasion for at least 30 days and no more than 90 days. The OGC, by

refusing to provide any work papers until 2 days prior to the filing of a suit,

despite the Defendant's repeated requests for same and not even inform ing him

that the time period in question was during a tim e when he was not even a

candidate and testing the waters, violated 52 U. S. C. j30109(a)(4)(A) by only

allowing 2 days, violating their obligation to allow at least 30 days. Additionally,

the Defendant responded, in good faith, im mediately upon receipt of

correspondence from the OGC in an attempt to enter into a conciliation agreement

and resolve this m atter.

Case 9:15-cv-81732-KAM Document 26 Entered on FLSD Docket 07/07/2016 Page 44 of 47
154. According to the FEC çûGuidebook for Complainants and Respondents on the

FEC Enforcement Process'' (N), page 20,''lf the Commission detennines that

there is tlprobable cause to believe'' the 1aw has been violated, the Commission

must attempt to conciliate with the respondent for at least 30 days, but no more

than 90 days.'' The OGC would not provide the Defendant with their work papers

until 2 days prior to filing suit and did not 1et him know that the alleged violations

were for a tim e period when he was not even a candidate and was testing the

waters. In good faith, the Defendant made several attempts to enter into a

conciliation agreement im mediately upon receiving the am ounts in question

despite disagreeing with the assertion of the OGC that the item s were allegedly

for personal use and despite not even being a candidate, thus outside the

jurisdiction of the FEC.

155. The government has an implied duty to act in good faith and fair dealing. By

refusing to provide the actual am otmts of alleged violations until 2 days prior to

issuing a civil suit, which the Defendant requested several tim es, and providing

alleged violations greatly exaggerated and not letting the Defendant know that the

tim e period referenced in the suit was for a time period when he was not even a

candidate, the OGC acted in bad faith. By adding knowingly and willful

fallacious and defamatory language m aking claims to alleged violations, which

the Defendant denies, in the text of a public suit, the OGC is acting in bad faith.

156.Any claim that the FEC allowed for the requisite am ount of tim e is patently

false. lt is impossible to enter into any settlement conciliation agreem ent without

knowing what the alleged violations are or that they are for a tim e when the

Case 9:15-cv-81732-KAM Document 26 Entered on FLSD Docket 07/07/2016 Page 45 of 47
Defendant was not even a candidate and testing the waters. Additionally, it is

im possible to know what to even corred if the FEC does not provide what the

alleged violations are that would need to be corrected. Finally, it is impossible to

enter into conciliation negotiations without benefit of the knowledge of what the

extent of the alleged violations are considering that m ost conciliation agreements

and, for that matter, al1 settlem ents are based upon a percentage of the alleged

violations.

157. The Plaintiff did not even know what the am ount of alleged violations was as

they lowered the amount from $ 1,622.49 to $ 1 ,374. 12, a reduction Of 15.3% .

Given that the Plaintiff could not com e up with a definitive amount of alleged

violations to the point where they had to am end their civil complaint, it would be

literally impossible to negotiate any kind of settlem ent since any settlem ent would

be based on the extent to the alleged violations. This in addition to the fact that

the Plaintiff would not disclose to the Defendant that the alleged violations in

question were for a time period when he was not even a candidate.

l 58. The OGC knowingly and willfully lied and misrepresented the actual amount of

alleged violations in order to achieve a higher settlem ent offer in the conciliation

agreem ent. W hen their m isdeeds were discovered, they imm ediately tried to

strong arm the Defendant into a settlement, which is higher than the am ount

sought in this suit, and, when he would not acquiesce, they imm ediately filed suit.

They would not even attempt to enter into negotiations based on the actual alleged

violations as is required under 52 U. S. C. j30109(a)(4)(A).

Case 9:15-cv-81732-KAM Document 26 Entered on FLSD Docket 07/07/2016 Page 46 of 47
CERTIFICATE OF SERVICE

l herby certify that a copy of the answer to Civil Action 15-8 1732 and Notice of

Appearance was mailed first class, postage paid, this (0$%t day of X OL-'-I ,

2016 to:

Federal Election Comm ission

999 E Street, N. W .

W ashington, D. C. 20463

Attn: Benjamin A. Streeter IIl

' )

Signature v @ , %

Address 10269 Trianon Place

W ellington, Florida 33449

Telephone Number 561-445-3139

Case 9:15-cv-81732-KAM Document 26 Entered on FLSD Docket 07/07/2016 Page 47 of 47