FEDERAL ELECTION COMMISSION 

WASHINGTON. D.C. 20463 

August 26, 2011 

MEMORANDUM 

TO: 

FROM: 

Patricia Carmona 

Cfaief Compliance Officer 

Tom Hintermister 

Acting Assistant Staff Director 

Audit Division 

f Christopfaer Hugifaey 

Acting General Counsel 

Lawrence L. Calvert, Jr. 

Associate General Coun 

General Law and Advice 

Lorenzo Holloway LLCL^ 

Assistant General C!oimsel 

Public Finance and Audit Advice 

Margaret J. Forman ^f^l^C ^ 

Attomey (/ 

SUBJECT: Interim Audit Report on Rightmarcfa.com PAC, Inc. (LRA 842) 

I. INTRODUCTION 

Tfae Ofiice of General Coimsel ("OGC") faas reviewed tfae Interim Audit Report 

("Proposed Report") on Rightmarcfa.com PAC, Inc. ("Rightmarch"). We generally concur with 

the findings in the Proposed Report. In its cover memorandum, the Audit Division directs our 

attention to the extension of credit by a commercial vendor discussed in Finding 2, and tfae 

disclosure of independent expenditures issue discussed in Finding 3 (Failure to File Notices and 

Properly Disclose Independent Expenditlires). We analyze tfae tfaird Finding as explained 
Memorandum to the Commission 

Rightmarch.com PAC, Inc. (LRA 842) 

Legal Comments on Interim Audit Report 

Page 2 of4 

below.' If you have any questions, please contact Margaret J. Forman, the attomey assigned to 

this audit. 

II. BACKGROUND 

Rigfatmarcfa requested, and tfae Commission granted, a Request for Early Review of Legal 

C^estions by tfae Commission, pursuant to tfae Policy Statement Establisfaing a Pilot Program for 

Requesting Consideration of Legal Questions by tfae Commission, 75 Fed. Reg. 42,088 (July 20, 

2010). We submitted a memorandum to the Commission, dated March 14,2011, whicfa provided 

legal analysis of two issues: (1) whether the "ever-changing weekly contingency fees" invoiced 

by Rightmarch's vendor, Political Advertising, resulted in in-kind contributions and were 

required to be reported as debts; and (2) whether fimdraising communications were independent 

expenditures. In our analysis of the first issue, we concluded that the fees were reportable debts, 

and may faave resulted in in-kind contributions. We also stated tfaat we needed additional 

information from Rigfatmarcfa to assist tfae Commission witfa resolving tfae issue. Our anal3^is of 

tfae second issue concluded tfaat tfae fundraising communications constituted express advocacy 

pursuant to 11 C.F.R. 100.22(a) and were, tfaerefore, independent expenditures. Tfae 

Commission, after considering tfae legal questions, was unable to reacfa an agreement and issue a 

response. Pursuant to Commission dkection, Rigfatmarcfa received a copy of our memorandum 

in response to their request. Althougifa our memorandum stated tfaat we need additional 

information from Rigfatmarcfa to assist tfae Commission with resolving these issues, Rigfatmarcfa 

faas submitted no additional information on either of tfae issues addressed in our memorandum. 

Tfae Audit Division faas proceeded in tfais matter by including tfae issues as findings in tfae 

Proposed Report. Policy Statement Establisfaing a Pilot Program for Requesting Consideration 

of Legal C^estions by tfae Commission, 75 Fed. Reg. 42,088 (July 20,2010). 

III. ANALYSIS 

Our comments here will supplement our memorandum dated March 14,2011. We 

recommend that tfae Audit Division attacfa a copy of our memorandum dated Marcfa 14,2011 to 

its Interim Audit Report submitted to tfae Commission. Given that the Proposed Report now 

includes the same issues tfaat we addressed in our memorandum and Rightmarch has submitted 

no additional information on eitfaer of tfae issues addressed in tfaat memorandum, our analysis of 

tfaose issues has not changed. In tfais memorandum we address only an issue witfa respect to 

determining the particular election in connection with which Rigjhtmarcfa's independent 

expenditures should have been reported. 

' The Office of General Counsel recommends that the Conimission consider this document in Executive 

Session because the Commission may eventually decide to pursue an investigation of matters contained in the 

Proposed Report. 11 C.F.R. §§ 2.4(a) and (b)(6). 
Memorandum to the Commission 

Rightmarch.com PAC, Inc. (LRA 842) 

Legal Comments on Interim Audit Report 

Page 3 of4 

A. Communications Disseminated Prior to the Primary Election May Be Reported 

as Independent Expenditures for the General Election. 

The Audit Division directs our attention to the disclosure of independent expenditures in 

Finding 3 (Failure to File Notices and Properly Disclose Independent Expenditures). 

Rigfatmarcfa made independent expenditures for fundraising solicitations tfaat expressly 

advocated the defeat of Barack Obama, Hillary Clinton, or both Barack Obama and Hillary 

Clinton.^ Rigihtmarcfa originally reported tfae expenditures for tfaese fimdraising solicitations as 

being for tfae Presidential primary elections. Tfae Reports Analysis Division advised Rigfatmarcfa 

to use tfae next scfaeduled federal election in a particular state after tfae Committee stated it did 

not faave an election in mind when it disseminated these communications. Rig|fatmarcfa's counsel 

now states, however, tfaat tfaese solicitations really were geared towards tfae Presidential general 

election. Tfae categorization of tfaese independent expenditures as related to eitfaer tfae primary 

election or tfae general election is important because tfae Audit Division expects tfaat tfais cfaange 

could affect Rigfatmarcfa's reporting of independent expenditures. By categorizing tfae 

expenditures from multiple primary elections to tfae general election, Rigihtmarch would 

aggregate $10,000 in independent expenditures more often, potentially requiring a greater 

number of 48-hour independent expenditure notices filings, and possibly a larger monetary 

amount of 48-faour independent expenditures. 11 C.F.R. § 104.4(b)(2). 

Essentially, tfae Audit Division is raising the issue of whetfaer an independent expenditure 

may be reported as expressly advocating the election or defeat of an individual in the general 

election, when that individual faas not yet been nominated by fais or faer party. We conclude, as a 

legal matter, tfaat so long as tfae definition of independent expenditure is met, tfae communication 

may be for a fiiture election, including a general election wfaen tfae primary election faas not 

occurred. An independent expenditure is "an expenditure by a person for a communication 

expressly advocating tfae election or defeat of a clearly identified candidate," and that is not 

coordinated. 11 C.F.R. § 100.16. We conclude that Rigihtmarcfa made expenditures tfaat 

expressly advocated the defeat of Hillary Clinton, Barack Obama, or both Hillary Clinton and 

Barack Obama. See OGC Memorandum to the Commission on Rigihtmarcfa.com PAC, Inc., 

LRA 842 (Marcfa 14,2011) at 7-10. Wfaile neitfaer candidate was tfae nominee of tfae Democratic 

Party at tfae time Ri^tmarcfa made tfae mdependent expenditures, Hillary Clinton and Barack 

Obama were botfa candidates for tfae primary and general elections for purposes of tfae Federal 

Election Campaign Act. Botfa Hillary Clinton and Barack Obama were seeking tfae nomination 

for election, or election to federal office, and botfa of tfaem faad received contributions 

aggregating in excess of $5,000, for both the primary and general elections, at the time of tfae 

independent expenditures. 11 C.F.R. § 100.3(a). Furthermore, we faave no information 

indicating that the scripts at issue shoidd be reported for the primary election over the general 

election. Nothing in tfae tfaree scripts at issue suggests tfaat they expressly advocate the defeat of 

Hillary Clinton, Barack Obama, or Hillary Clinton and Barack Obama in the primary election. 

' These fundraising solicitations involved three scripts developed for use in telemarketing calls. See 

OGC's Memorandum to the Conunission, Rightmarch.com PAC, Inc. (LRA 842), Request for Early Commission 

Consideration of Legal Questions, March 14,2011. 
Memorandum to the Commission 

Rightmarch.com PAC, Inc. (LRA 842) 

Legal Comments on Interim Audit Report 

Page 4 of4 

We, therefore, conclude tfaat Rigifatmarch may, as a legal matter, amend its reports to disclose tfae 

! independent expenditlires as being for the Presidential general election. 

Our conclusion faere is consistent witfa our analysis in a previous audit. In Tfae Legacy 

Committee PAC (A09-22), tfae Committee reported all of its independent expenditures from 

fimdraising letters as being made for tfae general election. Tfae Audit Division's and tfae Reports 

Analysis Division's aggregation of tfae independent expenditures also were based on a general 

election timeframe. Some of tfae independent expenditures, faowever, occasionally referenced tfae 

Republican National Convention, as well as Barack Obama and Hillary Clinton, botfa candidates 

for tfae Democratic presidential nomination. Tfais Ofiice concluded tfaat tfae approacfa of tfae 

Legacy Committee PAC, the Audit Division and the Reports Analysis Division of aggregating 

and reporting the independent expenditures based on tfae general election was correct? We 

concluded tfaat tfae letters constituting independent expenditures were primarily focused on 

voting Jofan McCain into tfae ofiice of President for tfae General Election. See 2 U.S.C. § 434(g); 

11 C.F.R. § 104.4(b); AO 2003-40 (aggregation of independent expenditures for 48-faour notices 

are witfa respect to a given election). We noted tfaat some of tfaese letters specifically advocate 

tfae reader to "stop Hillary," but concluded tfaat even tfaese letters, in context, appeared to be 

focused on stopping Hillary and otfaer Democrats from winning tfae presidency in tfae general 

election, not tfaeir party's nomination. 

i ^ Interim Audit Report of the Audit Division on The Legacy Committee PAC (A09-22) (LRA 815), OGC 

I Memorandum to Patricia Carmona, May 4,2011, pp. 8-9.