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FEDERAL ELECTION COMMISSION ?'i';AU5 2S FM 1:37 

WASHINGTON. IK;. 2(Mfa;j 

August 28, 2014 

MEMORANDUM 

TO: The Commission 

FROM: Lisa J. Stevenson 

Deputy General Counsel - Law 

Lorenzo Holloway 

Assistant General CounseP^^^^ 

Compliance Advice 

Danita C. Albericp^y^ 

Attorney 

SUBJECT: Request for Extension to Make Final Repayment of Unspent Convention 

Funds - Committee on Arrangements for the 2012 Republican National 

Convention (LRA 947) 

I. INTRODUCTION 

The Committee on Arrangements for the 2012 Republican National Convention 

("Committee") submitted a Request for Extension to Make Final Repayment of Unspent 

Convention Funds ("extension request") on August 21,2014. The Committee's 

extension request raises two points to support good cause for the extension: 1) the timing 

of the Commission's issuance of the Final Audit Report ("FAR"); and 2) the practical 

considerations which would result in a more accurate amount of unspent convention 

funds being repaid and publicly disclosed. The Office of General Counsel does not 

believe that the first point is good cause for granting the extension, but we recommend 

that the Commission grant the extension based on the second point. We set forth the 

reasoning supporting our recommendation after we discuss the procedural background of 

this audit. 

II. PROCEDURAL BACKGROUND 

The Commission approved the FAR on August 18,2014. The FAR included the 

Commission's determination that the Committee's unspent funds, totaling $668,674 as of 

July 31,2014, are repayable to the U. S. Treasury. All unspent funds must be repaid to 

the U.S. Treasury no later than 24 months after the last day of the convention, unless the 
Memorandum to the Commission 

Committee on Arrangements for the 2012 Republican National Convention (LRA 947) 

Page 2 of5 

national committee has been granted an extension of time. 11 C.F.R. 

§ 9008.12(b)(5)(iiij. The last day of the Republican National Convention was 

August 30,2012. Therefore, the Committee's repayment is due by August 30,2014. The 

Committee requests an extension to September 30,2014 to make its final repayment to 

the U.S. Treasury of unspent convention funds. 

III. THE COMMISSION SHOULD GRANT THE COMMITTEE'S REQUEST 

FOR AN EXTENSION OF TIME 

A. The Committee Incorrectly Contends That The Commission's Timing In 

Issuing the FAR Constitutes Good Cause 

The Commission may grant a request for an extension to repay unspent 

convention funds, 11 C.F.R. § 9008.12(b)(5)(iii), so long as the convention committee 

demonstrates good cause in support of its request.' 11 C.F.R. § 9008.1 S(b) The 

Committee asserts that good cause for an extension exists because there are only eleven 

days between the date the Commission approved the Final Audit Report and the 

August 30,2014 deadline for the Committee to repay its unspent funds to the U.S. 

Treasury. See Attachment. The Committee contends that eleven days is an insufficient 

amount of time to properly wind down its operations. Id. The Committee asserts that 

extending the repayment period by 30 days would allow it to prudently wind down its 

operations and provide Audit staff with actual (as opposed to estimated) financial 

information to determine whether any adjustments to the repayment determination are 

warranted. Id. The Committee contends that an extension is also appropriate because 

corresponding regulations at 11 C.F.R. § 9007.2(d)(2) allow for an extension of up to 90 

days for repayment if a candidate requests an administrative review of the Commission's 

repayment determination.^ Id. 

The Committee's contention regarding the Commission's timing in issuing the 

FAR does not demonstrate good cause for an extension. 11 C.F.R. § 9008.1 S(b). First, 

the repayment of unspent funds is self-executing. Commission regulations provide that 

unspent funds must be repaid within 24 months of the last day of the convention. 

11 C.F.R. § 9008.12(b)(S)(iii). The obligation to repay these funds within 24 months is 

not contingent on the Commission issuing a final repayment determination pursuant to 

Section § 9008.12(a)(2), as the Committee suggests. See Dukakis v. Federal Election 

Commission, 53 F.3d 361 (D.C. Cir. 1995) (Examining a candidate's repayment 

obligations under the Presidential Primary Matching Payment program, the court 

concluded that the unspent funds repayment provision is self-executing and requires no 

' The convention committee must also submit the extension request seven days before the 

repayment is due. 11 C.F.R. § 9008.1 S(c). The Committee submitted the request seven days before the 

repayment was due. Therefore, there is no dispute about the timeliness of the request. 

~ The Commission's rules governing the public financing of national nominating conventions 

provide that audits of convention committees must follow the procedures for audits of presidential 

campaign comminees set forth at 11 C.F.R. §§ 9007.1 and 9038.1. 11 C.F.R. § 9008.11. 
Memorandum to the Commission 

Committee on Arrangements for the 2012 Republican National Convention (LRA 947) 

Page 3 of5 

Commission-initiated conduct). The Committee has not disputed that it has unspent 

funds that it must repay. Thus, it is obligated to make the repayment by August 30,2014. 

Second, the repayment of unspent public funds and the final audit report process 

proceed under different timing tracks. While a convention committee must repay unspent 

public funds within 24 months of the last day of the convention, 11 C.F.R. 

§ 9008.12(b)(S)(iii), the Commission has up to three years after the convention to issue 

the final audit report. 11 C.F.R. §9008.12(a)(2).^ We, therefore, do not believe the 

timing of the Commission's approval of the FAR demonstrates good cause to grant the 

extension request. 

B. Practical Considerations Related to A More Accurate Repayment and 

PubUc Disclosure of the Committee's Repayment Constitute Good Cause 

For Granting The Extension Request 

We believe, however, that practical considerations related to the Committee's 

making a more accurate unspent funds repayment and to ensuring accurate public 

disclosure do establish good cause for granting the extension request. The Committee 

contends that it would be able to repay the U.S. Treasury the actual amount of its unspent 

funds instead of an amount based on estimated financial information, as reflected in the 

FAR, if it is given an additional 30 days. The Committee represents that upon winding 

down, it will give the auditors concrete financial information that would allow additional 

adjustments to its repayment obligation to be made. The Audit Division agrees that the 

Committee will be able to provide the most accurate financial information at the 

conclusion of its wind down and notes that the information the Committee provides may 

affect its surplus/deficit calculation allowing for a more accurate repayment. The Audit 

Division also indicates that allowing the Committee additional time will enable the 

Committee to more accurately disclose its activities because the final disclosure reports 

will reflect actual financial information. Based on this information, we recommend that 

the Commission grant the Committee's request for an extension to September 30, 2014, 

to make its final repayment of unspent convention funds to the U.S. Treasury.^ 

' The Comminee's reliance on 11 C.F.R. § 9007.2(dX2) as a basis for an extension of time to repay 

is misplaced. Administrative reviews under this provision (which allows for an extension of up to 90 days 

to make a repayment) pertain only to disputed repayment determinations - not undisputed unspent funds. 

11 C.F.R. § 9007.2(d)(2). The Committee has not sought administrative review of the FAR's repayment 

determination because there is no issue in contention to serve as a basis for an administrative review. 

'* While the Committee's request for an extension of time is pending, the Committee will have a de 

facto extension of time of the original repayment deadline of August 30.2014. The Audit Division has 

informed the Comminee of this fact. 
Memorandum to the Commission 

Comminee on Arrangements for the 2012 Republican National Convention (LRA 947) 

Page 4 of S 

IV. THE COMMISSION SHOULD UPDATE THE PUBLIC RECORD TO 

SHOW THE AMOUNT OF UNSPENT PUBLIC FUNDS IF THE AMOUNT 

IS DIFFERENT FROM THE FINAL AUDIT REPORT 

If the Cominission grants the extension request and the Committee shows a 

repayment amount that is different from the amount in the FAR, the Commission should 

consider updating the public record. The repayment determination in the FAR is the 

Commission's repayment decision for the Committee, 11 C.F.R. § 9008.12(a)(1), and on 

August 25,2014, the Commission released the FAR to the public showing that the 

Committee had a repayment obligation totaling $668,674 in unspent public funds. 11 

C.F.R. § 9007.1(e)(2). The public record, therefore, should be updated if the Committee 

demonstrates that its repayment is either less than or greater than the repayment 

determination set forth in the FAR.' 

If the Committee shows a greater amount of unspent convention funds than is 

reflected in the FAR, the public record can be updated with an addendum audit report that 

explains the difference between the repayment amount in the FAR and the increased 

amount. If that is the case, the Audit Division would ask the Commission to authorize an 

addendum to the FAR pursuant to 11 C.F.R. § 9038.1(d)(3), based on information 

ascertained by the Commission in the normal course of carrying out its supervisory 

responsibilities.^ 

If, however, the Committee shows a lesser amount of unspent convention funds 

than is forth in the FAR, the public record can be updated with an administrative review. 

With the consent of the Committee, the Commission can treat the submission as a request 

for an administrative review so long as the submission is made within 60 calendar days 

after service of the FAR.^ This step is important because a publicly-financed committee 

is only justified in repaying an amount less than the repayment determination set forth in 

the audit report if the committee seeks an administrative review and the Commission 

' The Comminee should submit to the Audit Division all records and information detailing its 

repayment. 

'' Addenda to the audit report may be approved and issued by the Commission irom time to time as 

circumstances warrant and as additional information becomes available. 11 C.F.R. § 9038.1(d)(3). Such 

addenda may be based on follow-up Heldwork conducted under section 9038.1 (b)(3) and/or information 

ascertained by the Commission in the normal course of carrying out its supervisory responsibilities. Id. 

The procedures set forth in section 9038.1(c) and (d)(l) and (2) will be followed in preparing such addenda. 

Id. The addenda will be placed on the public record as set forth in section 9038.1(e). Id. Such addenda 

may also include additional repayment determinations. Id. 

^ A committee that disputes the Commission's determination(s) shall submit in writing, within 60 

calendar days after service of the Commission's notice, legal and factual materials demonstrating that no 

repayment, or a lesser repayment, is required. See 11 C.F.R. § 9007.2(c)(2)(i). The Committee will meet 

this timing requirement if it submits a lesser repayment amount by the new repayment due date. The 

extension will make the repayment due on September 30.2014. The FAR was served on the Committee on 

August 19.2014: therefore, the Comminee has until October 19.2014 to dispute the FAR's repayment 

determination. 
Memorandum to the Commission 

Comminee on Arrangements for the 2012 Republican National Convention (LRA 947) 

Page S of S 

makes a final determination in the administrative review that a lesser amount is owed. 11 

C.F.R.§ 9007.1(d)(1). 

V. RECOMMENDATIONS 

1. Grant the Committee on Arrangements for the 2012 Republican National 

Convention's Request for Extension to Make Final Repayment of Unspent Convention 

Funds to September 30, 2014. 

2. Approve the appropriate letter. 

Attachment 

Letter from Heather Sidwell Morris to Thomas E. Hintermister dated 

August 21, 2014.