AGE.~PA:. DOClJJ'YIENT NO. 13-24 

FEDERAL ELECTION COMMISSION 

Washington, DC 20463 

MEMORANDUM 

TO The Commission 

FROiV: Anthony Herman ~ L \ 

General Counsel 1 \I 

Adav Noti f1t'!/ 

Associate General Counsel 

AmyL. Rothst~ 

Assistant General Counsel 

Neven Stipanovic NS 

Attorney 

June 26,2013 

,, t_:,:..!\'EU , C:G~i(),L ELECTION COI·L~liSSIOrl 

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AGENDA ITEM 

For Meeting of U .. ~ 1.... f) 

SUBMITTED LATE 

SUBJLCT: Draft Interpretive Rule on Reporting Ultimate Payees of Political 

Committee Disbursements 

Attached are drafts A and B of the Interpretive Rule on Reporting Ultimate 

Pay·~es of Political Committee Disbursements. We have been asked to place these drafts 

on the 1gcnda for the June 27, 2013 Open Session. 

Attc:.chment 
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FEDERAL ELECTION COMMISSION 

[Notice 2013-XX] 

Reporting Ultimate Payees of Political Committee Disbursements 

AGENCY: Federal Election Commission. 

ACTION: Notice of interpretive rule. 

SUMMARY: The Federal Election Commission is clarifying its interpretation of the 

regulatory requirement that political committees report the full name and address of each 

person to whom they make expenditures or other disbursements aggregating more than 

$200 per calendar year, or per election cycle for authorized committees, and the date, 

amount, and purpose of such payments, in three situations. These are (1) a political 

commi1tet: reimburses an individual who advanced personal funds to pay committee 

expmses aggregating more than $200 to a single vendor; (2) a candidate uses personal 

funds to pay his or her authorized committee's expenses that aggregate more than $200 to 

a singlt. vendor without receiving reimbursement; and (3) a political committee pays a 

credit card bill that includes a charge of more than $200 for a single vendor. 

DATES: [Insert date ofpublication in FEDERAL REGISTER] 

FOR FURTHER 

INFORMATION 

CONT <\.CT: AmyL. Rothstein, Assistant General Counsel, or Joanna S. Waldstreicher, 

Attomt.y, 999 E Street NW., Washington, DC 20463, (202) 694-1650 or (800) 424-9530. 

SUPPLEMENTARY 

INFORMATION: 

24 Political committees must report the name and address of each person to whom 

::~5 they make expenditures or other disbursements aggregating more than $200 per calendar 

26 year, m per election cycle for authorized committees, as well as the date, amount, and 
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purpos1! of such payments. 2 U.S.C. 434(b)(5), (6); 11 CFR 104.3(b)(3)(i), (vii) 

(unwtLorized committees); 11 CFR 104.3(b)(4)(i), (vi) (authorized committees); see also 

11 CFF. I 04.9(a), (b). 

The Commission published a draft Notice on January 31, 2013 to seek comment 

on a prl)posed interpretative rule to clarify these requirements as they apply to the 

reporting of certain itemized disbursements by political committees to vendors. The 

Conm11ssion received four comments: two opposed the draft; one supported the draft 

with a request that the Commission impose an additional reporting requirement; and one 

resubmitted the comment supporting the draft without itself opining on the draft. Taking 

those Cl)fnments into consideration the Commission now issues this Notice to clarify its 

interpretation of 11 CFR 104.3(b)(3)(i), (vii); 11 CFR 104.3(b)(4)(i), (vi); and 11 CPR 

1 04.9(a), ~b). These clarifications are made to the reporting requirements contained in 

thes·~ Commission Regulations and implicate no other regulations than those referenced 

aboYe. 

Specifically, this Notice clarifies how a political committee should report 

disburs~rnents in the following scenarios: 

( 1) the committee reimburses an individual (such as a campaign staffer) who used 

personal funds to pay committee expenses aggregating more than $200 to a 

single vendor; 

(2) the committee's payment of its credit card bill includes charges ofmore than 

$200 to a single vendor; and 
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(3) the committee is the authorized committee of a candidate who used personal 

funds to pay committee expenses aggregating more than $200 to a single 

vendor without receiving reimbursement. 

As explained further below, in each scenario the political committee will satisfy 

the 1 eporting requirements by itemizing as a memo entry on Schedule B the name and 

address of the original vendor, as well as the date, amount, and purpose of the original 

purcha~.e made for or by the political committee. The Commission makes clear that this 

interpretation is based on long-standing Commission practice and is not making any 

fund am ental changes to its rules or processes. Further, the Commission is only 

addressing the three issues at hand and is not extending the clarification to situations in 

which H vendor, acting as the committee's agent, purchases goods and services on the 

commi1tees behalf from subvendors. The relationship between committees and its 

vendor~: raises different issues than the relationships that exist in these three 

circum~:tances. 

__ Reimbursements to Individuals for Certain Out of Pocket Expenses 

When an individual who is not acting as a vendor advances his or her personal 

funds, including a personal credit card, to pay costs incurred in providing goods or 

serv1ce~: to, or obtaining goods or services that are used by or on behalf of, a political 

committee, the political committee must treat the individual's payment as a contribution. 1 

11 CFR 116.5(a), (b). The political committee must also treat the obligation arising from 

the individual's payment as an outstanding debt until reimbursed. 11 CFR 116.5(c); see 

alsQ 11 CFR 104.11. 

1 Cenain travel and subsistence expenses that are not reimbursed, or that are reimbursed within a limited 

perioj of time, are exempt. 11 CFR 116.5(b); see also 11 CFR 100.79. 
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If the political committee itemizes its reimbursement to the individual on 

Schedule 8 of its report filed with the Commission, then the political committee may also 

need to provide information about the vendor to which the individual made payment in a 

memo entry associated with the reimbursement. A memo entry is required for any 

re1mbu·sement of expenses other than travel and subsistence expenses if the individual's 

payments to the vendor on behalf of the committee aggregate more than $200 in a 

calender year (or election cycle for authorized committees). When the reimbursement is 

for travel and subsistence advances that exceed $500, a memo entry is required for each 

payrnettt to a specific vendor by that individual on behalf of the political committee if 

total payments to that vendor by the political committee or by that individual on behalf of 

the committee aggregate more than $200 in a calendar year (or election cycle for 

authmi~ed committees). Each memo entry must include the name and address of the 

vendor. as well as the date, amount, and purpose ofthe payment. 11 CFR 104.3(b)(4)(i); 

11 CFR 104.9.2 

For reimbursements of credit card payments, the memo entry must include the 

name nd address of the vendor that provided the goods or services to the political 

commiltee, rather than the credit card company that processed the payment, and the date, 

2 Thi:; cbrification is consistent with the Commission's Report Analysis Division Review and Referral 

Pwci'dures for the 2011-2012 Election Cycle, p. 98 (http://www.fec.gov/pdf/RAD Procedures.pdO, which 

is appro' ed by the Commission for every two-year election cycle. Further, the Commission's Reports 

Anal:vsis Division has been sending Requests for Additional Information to authorized committees that did 

not itemize the ultimate payee for reimbursements to staff above the applicable thresholds since the 1983-

19X4 e]e,;tion cycle. Similarly, the Reports Analysis Division has been sending Requests for Additional 

InfonnaLon to party and non-party committees that did not itemize the ultimate payee for reimbursements 

to staff a Jove the applicable thresholds since the 2005-2006 election cycle after internal review procedures 

for authorized and unauthorized committees were merged. However, a grace period for calendar year 2005 

was pnn ided to party and non-party committees to allow for the development of administrative tracking 

syste·ns. 
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amoun1, and purpose of the payment to the vendor. Further information about the 

reporting of credit card payments appears in Section 2, below. 

') r~y_ments to Credit Card Companies 

4 Any political committee that itemizes disbursements to credit card companies on 

5 Schedule B of its report filed with the Commission must itemize as a memo entry any 

(J transac:ion with a single vendor charged on the credit card that exceeds the $200 

~, itemization threshold. The memo entry must include the name and address of the vendor, 

~ and the date, amount, and purpose of the charge. Itemizing the ultimate payee, as the 

<> prl)\ idu of goods or services to the political committee, accurately reflects the credit card 

I 0 company's limited role as a payment processor rather than as the provider of goods and 

I J servtce:> to the committee. See 11 CFR 102.9. The itemization requirement prevents a 

I 2 commiltet: from avoiding the Act's disclosure requirements by placing operating 

I 3 expmdttures on a credit card.3 

I 4 :~ U nreimbursed Disbursements By Candidates 

I 5 A candidate may make unlimited expenditures from personal funds on behalf of 

I 6 his c'r her authorized committee. See 11 CFR 110.10. Any candidate who "makes a 

I~~ disburs~rnent in connection with [his or her own] campaign, shall be considered ... as 

I~ having made the disbursement ... as an agent of the authorized committee or committees 

I() of such candidate." 2 U.S.C. 432(e)(2); see also 11 CFR 101.2(a). Authorized 

20 commi1tees must disclose these disbursements on their reports filed with the Commission 

3 Thi5 cl.mfication is consistent with the Commission's Report Analysis Division Review and Referral 

Proct'dures for the 2011-2012 Election Cycle, p. 96 (http://www.fec.gov/pdf/RAD Procedures.pdt). 

Similarl) with reimbursements to committee staff, the Commission's Reports Analysis Division has been 

sending Requests for Additional Information to authorized committees that did not provide memo entries 

for credi1 card payments above the applicable thresholds since the 1983-1984 election cycle. 
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just as 1hey would disclose any other disbursements that they may make. 2 U.S.C. 

434(b)(4), (5), (6)(A); 11 CFR 104.3(b)(4). 

Thus, out-of-pocket spending by candidates, as agents of their authorized 

commiltees, requires memo entry itemization of the ultimate payee if the aggregate 

amount of payments to that vendor exceeds $200 for the election cycle. The memo entry 

mus( include the date, amount, and purpose of the out-of-pocket payments, as well as the 

name a 1Cl address of the vendor to which payment was made. 4 

This interpretive rule clarifies the Commission's interpretation of existing 

statutory and regulatory provisions, and therefore does not constitute an agency action 

subject to the notice and comment requirements or a delayed effective date under the 

Admimstrative Procedure Act. See 5 U.S.C. 553. The provisions of the Regulatory 

Flexibi ity Act, which apply when notice and comment are required by the 

Admimstrative Procedure Act or another statute, do not apply. See 5 U.S.C. 603(a). 

DATED: 

BILLING CODE: 6715-01-P 

On behalf of the Commission, 

Ellen L. Weintraub 

Chair 

Federal Election Commission 

4 Unlike the former two circumstances, this scenario is not addressed in the Commission's Reports 

Analy·sis Division Review and Referral Procedures for the 2011-2012 Election Cycle that has been made 

public w th redactions. Therefore, although the Reports Analysis Division will initiate a regular practice of 

sending Requests for Additional Information for failure to itemize the vendor for candidate out-of-pocket 

expendit1res on behalf of his or her authorized committee, this portion of the Interpretive Rule will be 

appli~cl rrospectively. The adequacy of the responses to Requests for Additional Information on this issue 

will <,n[y be judged for those sent after the adoption of this Interpretive Rule. 
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FEDERAL ELECTION COMMISSION 

[Notice 2013-XX] 

Reporting Ultimate Payees of Political Committee Disbursements 

AGENCY: Federal Election Commission. 

ACTION: Notice of interpretive rule. 

SUMMARY: The Federal Election Commission is clarifying its interpretation of the 

regulatory requirement that political committees report the full name and address of each 

person to whom they make expenditures or other disbursements aggregating more than 

$200 pt:r calendar year, or per election cycle for authorized committees, and the date, 

amount, and purpose of such payments, in three situations. These are (1) a political 

commiltee reimburses an individual who advanced personal funds to pay committee 

expmses aggregating more than $200 to a single vendor; (2) a candidate uses personal 

funds to pay his or her authorized committee's expenses that aggregate more than $200 to 

a sir.gk vendor without receiving reimbursement; and (3) a political committee pays a 

credit card bill that includes a charge of more than $200 for a single vendor. 

DATES: [Insert date ofpublication in FEDERAL REGISTER] 

FOR FURTHER 

INFORMATION 

CONT <\CT: AmyL. Rothstein, Assistant General Counsel, or Joanna S. Waldstreicher, 

Attomey, 999 E Street NW., Washington, DC 20463, (202) 694-1650 or (800) 424-9530. 

SUPPLEMENTARY 

INFORMATION: 

::4 Political committees must report the name and address of each person to whom 

:·.5 they make expenditures or other disbursements aggregating more than $200 per calendar 

::6 year, or per election cycle for authorized committees, as well as the date, amount, and 
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purpose of such payments. 2 U.S.C. 434(b)(5), (6); 11 CFR 104.3(b)(3)(i), (vii) 

(unc.utt.orized committees); 11 CFR 104.3(b)(4)(i), (vi) (authorized committees); see also 

11 CFF. l04.9(a), (b). 

The Commission published a draft Notice on January 31, 2013 to seek comment 

on a prl)posed interpretative rule to clarify these requirements as they apply to the 

reporting of certain itemized disbursements by political committees to vendors. The 

Commission received four comments: two opposed the draft; one supported the draft 

with a reg uest that the Commission impose an additional reporting requirement; and one 

resubmitted the comment supporting the draft without itself opining on the draft. Taking 

those C•)mments into consideration the Commission now issues this Notice to clarify its 

interprt:tation of 11 CFR 104.3(b)(3)(i), (vii); 11 CFR 104.3(b)(4)(i), (vi); and 11 CFR 

104.9(a), (b). These clarifications are made to the reporting requirements contained in 

thcs·~ Commission Regulations and implicate no other regulations than those referenced 

aboYe. 

Specifically, this Notice clarifies how a political committee should report 

disbursements in the following scenarios: 

( 1 ) the committee reimburses an individual (such as a campaign staffer) who used 

personal funds to pay committee expenses aggregating more than $200 to a 

single vendor; 

(2) the committee's payment of its credit card bill includes charges ofmore than 

$200 to a single vendor; and 
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(3) the committee is the authorized committee of a candidate who used personal 

funds to pay committee expenses aggregating more than $200 to a single 

vendor without receiving reimbursement. 

As explained further below, in each scenario the political committee will satisfy 

the reporting requirements by itemizing as a memo entry on Schedule B the name and 

address of the original vendor, as well as the date, amount, and purpose of the original 

purchase made for or by the political committee. The Commission makes clear that this 

interpretation is based on long-standing Commission practice and is not making any 

fundamental changes to its rules or processes. Further, the Commission is only 

addressing the three issues at hand and is not extending the clarification to situations in 

which c vendor, acting as the committee's agent, purchases goods and services on the 

committee's behalf from subvendors. The relationship between committees and its 

vendor~ raises different issues than the relationships that exist in these three 

circum~ tances. 

1 . Reimbursements to Individuals for Certain Out of Pocket Expenses 

When an individual who is not acting as a vendor advances his or her personal 

funds, including a personal credit card, to pay costs incurred in providing goods or 

serv: ce~; to, or obtaining goods or services that are used by or on behalf of, a political 

committee, the political committee must treat the individual's payment as a contribution. 1 

11 CFR 1 16.5(a), (b). The political committee must also treat the obligation arising from 

the individual's payment as an outstanding debt until reimbursed. 11 CFR 116.5(c); see 

alSQ 11 CFR 104.11. 

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1 Cer.ain travel and subsistence expenses that are not reimbursed, or that are reimbursed within a limited 

perio.i oJ time, are exempt. 11 CFR 116.5(b); see also 11 CFR 100.79. 
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If the political committee itemizes its reimbursement to the individual on 

2 Schedtlc B of its report filed with the Commission, then the political committee may also 

3 nc:ed tc provide information about the vendor to which the individual made payment in a 

·~ memo ~ntry associated with the reimbursement. A memo entry is required for any 

5 reunbursement of expenses other than travel and subsistence expenses if the individual's 

6 payments to the vendor on behalf of the committee aggregate more than $200 in a 

7 calendar year (or election cycle for authorized committees). When the reimbursement is 

~ for tnt\ el and subsistence advances that exceed $500, a memo entry is required for each 

9 payment to a specific vendor by that individual on behalf of the political committee if 

l () tota: pcoymcnts to that vendor by the political committee or by that individual on behalf of 

l l the committee aggregate more than $200 in a calendar year (or election cycle for 

l :~ authorized committees). Each memo entry must include the name and address of the 

U vendor as well as the date, amount, and purpose ofthe payment. 11 CFR 104.3(b)(4)(i); 

l) For reimbursements of credit card payments, the memo entry must include the 

.6 name and address ofthe vendor that provided the goods or services to the political 

7 commi tee, rather than the credit card company that processed the payment, and the date, 

2 Thi' clarification is consistent with the Commission's Report Analysis Division Review and Referral 

ProcedUJes for the 2011-2012 Election Cycle, p. 98 (http://www.fec.gov/pdf/RAD Procedures.pdt), which 

is appro,·ed by the Commission for every two-year election cycle. Further, the Commission's Reports 

Analysis Division has been sending Requests for Additional Information to authorized committees that did 

not item1 ze the ultimate payee for reimbursements to staff above the applicable thresholds since the 1983-

19~4 ele ;t10n cycle. Similarly, the Reports Analysis Division has been sending Requests for Additional 

Information to party and non-party committees that did not itemize the ultimate payee for reimbursements 

to -;tc: ff aboye the applicable thresholds since the 2005-2006 election cycle after internal review procedures 

for au the rized and unauthorized committees were merged. However, a grace period for calendar year 2005 

was prm ided to party and non-party committees to allow for the development of administrative tracking 

sy~.tem-;. 
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amount, and purpose of the payment to the vendor. Further information about the 

2 reporti 1g of credit card payments appears in Section 2, below. 

3 2. f~.l!nents to Credit Card Companies 

-t Any political committee that itemizes disbursements to credit card companies on 

5 Schedtlc B of its report filed with the Commission must itemize as a memo entry any 

6 transaction with a single vendor charged on the credit card that exceeds the $200 

7 itcmiz<.tion threshold. The memo entry must include the name and address of the vendor, 

~ and tht elate, amount, and purpose of the charge. Itemizing the ultimate payee, as the 

9 pro,·idt:r of goods or services to the political committee, accurately reflects the credit card 

II) corr:pany's limited role as a payment processor rather than as the provider of goods and 

I I services to the committee. See 11 CFR 1 02.9. The itemization requirement prevents a 

1:2 commi ctee from avoiding the Act's disclosure requirements by placing operating 

I J expenditures on a credit card.3 

l·l J."- Unreimbursed Disbursements By Candidates 

l:) A candidate may make unlimited expenditures from personal funds on behalf of 

16 hi:.; or r er authorized committee. See 11 CFR 110.10. Any candidate who "makes a 

17 di:.;bursement in connection with [his or her own] campaign, shall be considered ... as 

, X having made the disbursement ... as an agent of the authorized committee or committees 

, 9 of such candidate." 2 U.S.C. 432(e)(2); see also 11 CFR 101.2(a). Authorized 

~~0 commi tees must disclose these disbursements on their reports filed with the Commission 

3 Th1s clarification is consistent with the Commission's Report Analysis Division Review and Referral 

ProcedUJes for the 2011-2012 Election Cycle, p. 96 (http://www.fec.gov/pdf!RAD Procedures.pdf). 

Simi arl;· w1th reimbursements to committee staff, the Commission's Reports Analysis Division has been 

sending {e:quests for Additional Information to authorized committees that did not provide memo entries 

for credi c arc! payments above the applicable thresholds since the 1983-1984 election cycle. 
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just as they would disclose any other disbursements that they may make. 2 U.S.C. 

2 4J4(b)(4), (5), (6)(A); 11 CFR 104.3(b)(4). 

3 Thus, out-of-pocket spending by candidates, as agents of their authorized 

4 comm1ttees, requires memo entry itemization of the ultimate payee if the aggregate 

5 amount of payments to that vendor exceeds $200 for the election cycle. The memo entry 

6 must include the date, amount, and purpose of the out-of-pocket payments, as well as the 

7 name < ncl address of the vendor to which payment was made. 4 

8 This interpretive rule clarifies the Commission's interpretation of existing 

9 statlto ~y and regulatory provisions, and therefore does not constitute an agency action 

10 sub~~ eel to the notice and comment requirements or a delayed effective date under the 

11 Administrative Procedure Act. See 5 U.S.C. 553. The provisions of the Regulatory 

12 F]e)jbility Act, which apply when notice and comment are required by the 

l 3 AJministrative Procedure Act or another statute, do not apply. See 5 U.S.C. 603(a). 

l·l On behalf of the Commission, 

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Ellen L. Weintraub 

Chair 

Federal Election Commission 

.,., D.\TED: 

:?.:1 BILUNG CODE: 6715-01-P 

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4 Unlike the f(mner two circumstances, this scenario is not addressed in the Commission's Reports 

Anal,rsis Divi~ion Review and Referral Procedures for the 2011-2012 Election Cycle that has been made 

pub li.; w 1 th redactions.