FEDERAL ELECTION COMMISSION 

WASHINGTON. 0.C 20463 

March 19, 2Q14 

MEMORANDUM 

TO: Patricia C. Orrock 

Chief Compliance Officer 

Thomas E. Hintermister 

Assistant Staff Director 

Audit Division 

FROM: Lisa J. Stevenson 

Deputy General Counsel - Law 

Lorenzo Holloway 

Assistant General Counser 

Compliance Advice 

MargaretJ.Forman 

Attorney 

SUBJECT: Proposed Interim Audit Report on the Joe Walsh for Congress Committee, Inc. 

(LRA957) 

I. INTRODUCTION 

The Office of the General Counsel has reviewed the proposed Interim Audit Report 

C'lAR") on the Joe Walsh for Congress Committee, Inc ("JWFC"). The lAR contiws two 

findings: Disclosure of Occupation/Name of Employer (Finding 1), and Receipt of Contributions 

in Excess of the Limit (Finding 2).' We concur with the findings, and comment on them below. If 

you have any questions, please contact Margaret J. Forman, the attorney assigned to this audit. 

' We recommend that the Commission consider this document in Executive Session because the Commission 

way eventually decide to pursue an investigation of matters contained in the proposed lAR. 11 CRR. §§ 2.4(a) and 

(bX6). 
LRA 9S7 Joe Walsh for Congress 

lAR LepI Comments 

Page 2 of3 

n. ANALYSIS 

In Finding 1 of the proposed lAR, the Audit Division determined that JWFC failed to 

comply with the "best efforts" requirement of the Federal Election Campaign Act (the "Act"). See 

2 U.S.C. § 432(i). Committee treasurers are required to show that best efforts have been us^ to 

obtain, nuuntain, and submit the information required by the Act, including with respect to 

reporting the identification of each person whose contribution(s) to the political committee 

aggregate in excess of $200 in a calendar year. 2 U.S.C. § 432(i); 11 C.F.R. § 104.7(a), (b). Here, 

JWFC apparently made efforts to obtain and maintain the requisite information under section 

104.7(b) of the Commission's regulations bm failed to "submits the information to the 

Commission. JWFC maintained a paper file of letters it received from contributors who responded 

to its request for the required name, occupation, and name of employer information. Proposed 

lAR at 5; see 11 C.F.R. §§ 104.7(b); 100.12. JWFC, however, failed to disclose this information 

on its reports. Proposed lAR at S. Therefore, JWFC has failed to "submit" this information as 

required by the Act. 2 U.S.C. § 432(i); 11 C.F.R. § 104.7(a), (b)(4). The Audit Division 

concludes that JWFC did not establish best efforts because it did not submit this information by 

amending its disclosure reports. Proposed lAR at S. However, the language in the proposed lAR 

does not specify that the Act requires JWFC to submit this information. We recorrunend that the 

Audit Division clarify in its proposed JAR that the Act requires JWFC to submit the information. 

In Finding 2 of the proposed lAR, the Audit Division determined that JWFC received 

apparent excessive contributions from 29 individuals totaling $92,325. The Audit Division states 

t^ these iqrparent excessive contributions occurred because JWFC failed to redesignate or 

reattribute the excessive portions of contributions or issue a refund in a timely manner. Proposed 

lAR at 5-9; See 11 C.F.R. § 110.1(b)(3), (bX5). The Audit Division recommends that JWFC 

resolve the apparent excessive contributions through refunds to the contributors, through 

disgorgement to the U.S. Treasury, or by issuing presumptive redesignation or reattribution letters. 

Proposed lAR at 5-9. 

We concur generally with the 

explain its recorrunended remedies. 

We also recorrunend that the Audit Division explain in the cover memorandum to the 

Commission why it is recommending that JWFC have the option of issuing presumptive 

redesignations or reattribution letters. For a presumptive redesignation or presumptive 

reattribution to be valid, it must meet certain requirements. See 11 C.F.R. § 110.1(b)(5)(ii)(B), 

(b)(5)(ii)(C), (k)(3)(iiXB). One of these requirements is that the treasurer notify each contributor 

of the amount of the contribution that was redesignated or reattributed, and offer the contributor an 
LRA 9S7 Joe Walsh for Congress 

lAR Legal Commenb 

Page 3 of 3 

opportunity to request a reiund within 60 days of the treasurer's receipt of the contribution. 

11 C.F.R. § 110.1(b)(5)(ii)(B)(5). (b)(5)(ii)(B)(6). (b)(5)(ii)(Q(6). (b)(5)(ii)(C)(7), 

(k)(3)(ii)(B)(2), (k)(3Xii)(B)(.p. Since the audit period of JWFC covers January 1,2011 through 

December 31,2012, any contribution that JWFC attempts to redesignate at this point in time would 

not be timely, as the notification to the contributor would occur more than 60 days finm the date of 

the contribution. Id. The Audit Division should explain why it is recommending presumptive 

redesignations and presumptive reattributions as a remedy, and the impact of such a remedy on the 

audit The Audit Division should explain any relevant procedure in the audit program, error 

definitions, and materiality thresholds, and provide background on prior actions in other audits 

regarding untimely redesignations or reattributions, includmg whether the Audit Division has 

made such recorrunendations in the past, and whether the Commission approved those 

recommendations.