FEDERAL ELECTION COMMISSION 

WASHINGTON, D.C. 20463 

JAN 31 207 

MEMORANDUM 

TO: Patricia C. Orrock 

Chief Compliance Officer 

Thomas E. Hintermister 

Assistant Staff Director 

Audit Division 

FROM: Adawliotifi^ 

Associate General Counsel 

Policy Division 

Lorenzo Holloway 

Assistant General Counsel 

Compliance Advice 

Margaret J. Forman ry 

Attom'ey 

SUBJECT: Draft Final Audit Report on the Illinois Republican Party (LRA 1006) 

I. INTRODUCTION 

The Office of the General Counsel has reviewed the proposed Draft Final Audit Report 

("proposed DFAR") on the Illinois Republican Party ("IRP'5- The proposed DFAR contains six 

findings: Misstatement of Financial Activity (Finding 1), Reporting of Apparent Independent 

Expenditures (Finding 2), Recordkeeping for Communications (Finding 3), Receipt of Apparent 

Prohibited In-Kind Contributions (Finding 4), Reporting of Debts and Obligations (Finding S), 

and Recordkeeping for Employees (Finding 6). We concur with the findings, and comment on 

Finding 2. If you have any questions, please contact Margaret J. Forman, the attorney assigned to 

this audit. 
LRA 1006 Illinois Republican Party 

OFAR Legal Comments 

Page 2 of 5 

II. AUDIT DIVISION CONCLUDES EXPENDITURES FOR MAILERS ARE 

REPORTABLE AS INDEPENDENT EXPENDITURES 

A. Background 

The IRP made 16 media-related expenditures, or mailers, totaling $273,126 that it reported 

as Federal Election Activity (PEA). The IRP also made an unknown amount of expenditures for 

27 mailers that the Audit Division could not associate with any invoices. Both the 16 

media-related expenditures and the 27 additional mailers' appear to constitute independent 

expenditures according to the Audit staff. The proposed DEAR, therefore, concludes that all 43 

(16+27) mailers should have been disclosed either on 24 hour or 48 hour reports as independent 

expenditures. 

The IRP does not challenge the Audit Division's classifications of the mailers on the basis 

of whether they constitute express advocacy. See 11 C.F.R. §§ 100.16, 100.22 (independent 

expenditures defined in part as communications that expressly advocate, a term defined in section 

100.22). Rather, the IRP argues that the mailers are not properly regarded as independent 

expenditures because they Were distributed by volunteers, invoking the "volunteer materials 

exemption" C'VME") to the definition of "expenditure."^ See 52 U.S.C. § 30101(9)(B)(viii); 11 

C.F.R. § 100.147. The IRP submitted some documents in support of this assertion: 24 pictures of 

individuals sorting, bundling and placing the direct mailers into mail bags, four sign in sheets to 

document the use of volunteers in the mail program, and three affidavits attesting to the use of 

volunteers for all 43 mailers. According to the proposed DEAR, many of these documents can 

only be connected to a few specific mailings on which the volunteers may have worked. 

The Audit Division concludes that the documentation provided by the Committee is 

insufficient to support its assertion that the VME applies. The proposed DEAR concludes that as a 

result of the absence of sufficient documentation, the Audit staff considers the communications to 

be independent expenditures. 

' These 27 mailers are referred to in the proposed DFAR as "direct mail." As we understand it, the term is not 

being used here in its technical sense to mean mail distributed by a commercial firm or from a commercial list. See 11 

C.F.R. § 100.147. The "volunteer materials exemption," with which this portion of our comments is concerned,-does 

not apply to direct mail in this sense. /</.; 52 U.S.C. § 30l01(9)(BXviii)(l); but see Audit of the Tennessee Republican 

Party, Office of the General Counsel's legal comments on the Interim Audit Report of the Tennessee Republican 

Party (LRA 745) at 3-4 (Aug. 13,2008), discussing Missouri Democratic State Committee (MUR 5837) Statement of 

Reasons of Commissioners Lenhard, Mason, von Spakovsky and Weintraub, Dec. 20,2007 at 4 (Commission has 

interpreted mailings to qualify for the VME if there was sufficient volunteer involvement even if there was some 

involvement by a commercial vendor). We recommend revising the proposed DFAR to refer to "mailers" or 

"mailings" rather than to "direct mail" in order to avoid potential confusion. 

^ The IRP also states that it did not intend for the mailers to be independent expenditures, but the regulation 

defining express advocacy does not permit an examination of the speaker's intent. FEC v. Wise. Rigta to Life, Inc., 

551 U.S. 449,466-472 (2007) (subjective intent is irrelevant); see Audit of The National Campaign Fund and Audit of 

the Legacy Committee Political Action Committee (communications intended as fiindraising letters not exempt from 

independent expenditures). 
LRA 1006 Illinois Republican Party 

DFAR Legal Comments 

Page 3 of S 

We believe that the 43 mailers can be divided up into two categories: 1) mailers for which 

IRP offered documentation to show volunteer involvement that can be directly connected to the 

individual mailers, and 2) mailers for which IRP offered only affidavits to show volunteer 

involvement. We analyze and make recommendations on each category in tum. 

B. Mailers for which IRP offered documentation, which can be linked to specific 

mailers, to show volunteer involvement 

Of the 16 media-related expenditures totaling $273,126 that the Audit Division could 

connect with an invoice, $33,972 of these expenditures could be matched to four mailers for which 

the IRP provided photographs showing volunteer involvement in the distribution of the mailers.^ 

Because the expenditures can be directly connected to the documentation provided in support of 

the VME, we conclude that the proposed DFAR should not conclude that this $33,972 in 

expenditures are independent expenditures that required reporting as such. While we 

acknowledge there is a lack of clarity with respect to the information that is necessary to show 

VME, the Commission has not found mailings to be attributable to the coordinated party limit 

where committees have provided photographs showing volunteers participating in activities 

relating to the mailings on behalf of a specific candidate identified in the mailer. See Audit of the 

Arizona Republican Party, Amended Commission Certification for Audit Division 

Recommendation Memorandum (Aug. 22,2013), Final Audit Report at 13,17 (^proved Nov. 14, 

2013), Office of the General Counsel's legal comments to the Draft Final Audit Report at S (Apr. 

8,2013); see also 11 C.F.R. § 100.147. We, therefore, recommend that the proposed DFAR not 

consider the $33,972 in expenditures for the four mailers for which the IRP provided photographs 

documenting volunteer involvement in the distribution of those mailers to be reportable as 

independent expenditures. 

C. Mailers for which IRP offered only affidavits to show volunteer involvement 

With regard to the remaining $239,154 ($273,126 - $33,972) in media-related expenditures 

that could be connected with an invoice, and 27 mailers that the Audit Division was unable to 

connect with any invoice,* the only information that IRP has offered to show that volunteers were 

used to distribute the mailers is three affidavits.^ 

As to these expenditures, the proposed DFAR correctly observes that a lack of clarity 

exists, in the context of the mailings, regarding how to apply Ae VME and what quantum and 

^ Additionally, two volunteer sign in sheets could be matched to these photographs and invoices, and one 

additional sign in sheet could be matched to a mailer. It is unclear from the proposed DFAR if this additional sign in 

sheet was matched to one of the mailers for which the IRP was unable to provide invoices. 

* Because the Audit Division is unable to connect these 27 mailers with any invoice, we cannot determine the 

amount of the expenditures associated with those mailers. 

' According to the Audit Division, the IRP provided 10 additional photographs and a fourth sign in sheet that 

the Audit Division cannot connect to any mailer. Because these documents cannot be connected to any mailer, we are 

not attributing these documents to any mailer in support of the VME. 
LRA 1006 Illinois Republican Party 

DFAR Legal Comments 

Page 4 of 5 

type(s) of documentation are necessary to substantiate a claim that the VME applies. See, e.g., 

OGC Comments on Draft Final Audit Report - Arizona Republican Party (LRA 889), at 4-5 (Apr. 

8,2013). In recent audits addressing this issue, the Commission has approved findings that 

reported expenditures should not be attributed to a committee's coordinated expenditure limit 

where there was sufficient evidence of volunteer activity.* 

The facts in this case are distinguishable from those of the Arizona Republican Party audit, 

due to the production of these affidavits. The Commission deadlocked in the Arizona Republican 

Party audit on whether to apply the VME on the basis of unsworn written assertions regaling 

volunteer activity. See Final Audit Report of the Commission on the Arizona Republican Party, at 

16-17. In the Arizona Republican Party audit, the Commission could not agree on whether a 

written description of volunteer involvement was, by itself, sufficient to qualify the associated 

expenses for the VME. While some Commissioners approved the recommended finding, "other 

Commissioners determined that unsworn written assertions absent any documentation of the 

nature and extent of the volunteer involvement would not be sufficient." Id. at 17. Here, the IRP 

has provided sworn affidavits that could potentially be viewed as having more evidentiary value 

than unsworn statements. Two of the affidavits provided by IRP are sworn by individuals who 

appear to be in a position to have direct knowledge of the volunteer activities,^ state that every mail 

piece sent by IRP on behalf of federal candidates was processed by volunteers, and delineate nine 

steps taken by the volunteers to process and distribute the mailers.* 

Given the Commission's split on unsworn statements provided in the Arizona audit, and 

the lack clarity in the application of the VME in general, we do not know if sworn affidavits such 

as these are sufficient docuirientation for the purposes of the VME. We, therefore, recommend 

' See, e.g., Final Audit Report of the Commission on the Arizona Republican Party, at 13, 17 (approved Nov. 

14,2013) (Commission did not count mailings supporting candidate David Schweikert against committee's 

coordinated expenditure limit where committee provided written description of process and photographs of volunteers 

working on mailers to support claim of VME, but did not approve recommendation by four votes to find similarly 

regarding mailings on behalf of two other candidates, where committee provided only written description of process); 

Final Audit Report of the Commission on the Nebraska Democratic Party, at 16-17, 19-20 (approved Oct. 23,2014) 

(Commission does not count cost of mailings against coordinated expenditure limit where committee provided vendor 

statements and invoices along with photographs of volunteers participating in various duties, but did not approve 

recommendation to And similarly, by four votes, where committee submined unsworn written assertions without 

documentation of nature and extent of volunteer involvement); Final Audit Report of the Commission on the South 

Dakota Democratic Party, at 14-IS (approved Apr. 17,20 IS) (Commission does not count cost of mailings against 

coordinated expenditure limit where committee provided photographs of volunteers working on mailers and signed 

declaration that that type of mailing generally performed by volunteers). 

^ One affiant was a volunteer during the entire audit period, and was promoted to volunteer coordinator. This 

individual worked directly on all but three or four of the mailers. See Affidavit of Andrew Heffeman. Another affiant 

oversaw the volunteer component of the IRP's volunteer mail program. See Affidavit of Jon Callawaty. 

' Two of the three affidavits provided a detailed list of the volunteers' role in processing the mailers, similar to 

the procedures of the volunteers in the Tennessee Republican Party audit. See Audit of the Tennessee Republican 

Party, Office of the General Counsel's legal comments on the Final Audit Report at 2 (Jun. IS, 2009) (comparing facts 

of volunteer activity in the Tennessee Republican Party audit to the volunteer activity for the Utah Republican Party, 

MUR S598). 
LRA 1006 Illinois Republican Party 

DFAR Legal Comments 

Page 5 of5 

that the Audit Division raise 

of the DFAR to the Commission. 

this issue in the cover memorandum accompanying the transmission