2020 October Quarterly Reporting Webinar Candidate Committees

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REPORTING SCHEDULES & IMPORTANCE OF TIMELY FILING

I. Reporting Schedule

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A. Filing frequency 1. House/Senate campaigns. Quarterly filing is mandatory for authorized campaign committees in all calendar years. 2. Presidential campaigns. Presidential campaign committees may file monthly or quarterly during non-election years.

B. Election (even) year (2020) 1. Quarterly reports due April 15, July 15, October 15 and January 31.

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2. Pre-election reports in election years. a) File Pre-Primary (or Pre-Convention or Pre-Runoff if applicable) Report due 12 days before election. For more information see https://www.fec.gov/help-candidates-and- committees/dates-and-deadlines/2020-reporting- dates/congressional-pre-election-reporting-dates-2020/ b) If participating in general election, file Pre-General Report due 12 days before general election. 3. Post-General Report, due 30 days after general election.

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4. 48-Hour Notices a) Principal campaign committees must file for contributions of $1,000 or more received less than 20 days but more than 48 hours before 12:01am of the day of any election in which the candidate is running (even if candidate is unopposed in the election).

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b) The expedited disclosure requirements apply to all types of contributions received, including contributions collected through a joint fundraising effort. c) The notices must reach the FEC within 48 hours of the committee’s receipt of the contribution(s). Committees filing electronically must file their 48-Hour Notices electronically. d) For more information see https://www.fec.gov/help-candidates- and-committees/filing-reports/48-hour-notices/

C. Reporting period Always begins the day after close of books of last report filed.

Tip: You can find information on report deadlines by visiting https://www.fec.gov/help-candidates-and-committees/dates-and-deadlines/

** Special note for paper filers: Despite the resumption of limited mail operations at the FEC, the processing of campaign finance reports filed on paper may be delayed. As a result, paper filers may receive non-filer notices during this time. Nevertheless, filers should continue to file their reports on time. More information on FEC operations (as of 08/10/2020): https://www.fec.gov/resources/cms- content/documents/status_of_fec_operations_8-10-2020.pdf

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D. Filing on time 1. Paper filers – other reporting considerations a) Statute prohibits extensions (applicable to paper and electronic filers). b) Weekends and holidays Filing dates not extended for weekends or holidays. Must be filed on or before business day preceding filing date. c) Registered/certified vs. first class mail (1) If filing using USPS registered/certified mail, report is considered filed on the date of the U.S. postmark; keep your receipt in the event of a delivery failure. (2) Reports filed via priority or overnight mail with a delivery confirmation or an online tracking system will be considered timely filed if the report is postmarked on or before the mailing deadline. (3) If using first class mail or hand delivery, report is considered timely filed when it is received by the Commission; risk of timely delivery is on the filer. 2. Electronic filers – filed when received/validated by Commission Electronic reports considered “filed” when it is received and validation by the Commission’s computer system on or before 11:59 p.m. (Eastern Time) on the filing date.

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E. Electronic vs. paper filing (Guide, pp. 83-88) 1. Who must e-file? a) All campaign committees that raise or spend more than $50,000 in a calendar year, or that have reason to expect to do so. b) Effective September 21, 2018, Senate filers must submit all reports to the FEC and are subject to the FEC’s electronic filing requirements if they meet the electronic filing thresholds. 2. Who is exempt from mandatory e-filing? Campaign committees that do not meet the $50,000 threshold above.

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3. Exceeding threshold for e-filing a) Once committee exceeds threshold, it begins filing electronically with the next regular report. b) Committee must continue to file electronically for the next two calendar years (January through December), unless it is a campaign committee that has $50,000 or less in net debts outstanding on January 1 following the general election, and that anticipates terminating prior to January 1 of the next election year. 4. Voluntary filing a) Campaign committees that aren’t required to e-file, but choose to anyway, must continue to do so for the remainder of the calendar year. b) New committees with no prior data on which to base calculations have reason to expect to exceed threshold if they either: (1) Receive contributions or make expenditures that exceed $12,500 in first quarter of calendar year, or (2) Receive contributions or make expenditures that exceed $25,000 in first half of the calendar year. (3) Threshold calculated on a per-committee basis; affiliated committees calculate their own contributions and expenditures separately for purposes of determining if they have met mandatory e-filing threshold.

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5. Paper filing by e-filer Campaign committees that submit a report on paper that should have been filing electronically will be treated as non-filers and may be subject to enforcement actions (including Administrative Fines). 6. To meet the filing deadline, electronically filed reports must be received and validated by the Commission’s computer system on or before 11:59 p.m. (Eastern Time) on the filing date.

F. Electronic filing (Guide, pp. 83-85) 1. Passwords required - Before you can electronically file, you will have to obtain a password. You cannot file without one. 2. Who can get a password? Only the official treasurer can obtain an e-filing password. It is important that the committee has provided a valid email address on its Statement of Organization, as a validation email will be sent out the committee. 3. How do you get a password? a) Most committees may obtain or change their password online at https://webforms.fec.gov/psa/newrequest.htm b) Existing committees that have not previously used the online system should contact the Electronic Filing Office for assistance at 202-694-1307. 4. How long does it take? a) Passwords can now be obtained in just a few minutes online. b) We recommend you request your password as early in the process as possible, in case any issues arise. 5. The password is case-sensitive. 6. Remember your password. If you forget it, you will have to request a new one. 7. For more information, visit https://www.fec.gov/help-candidates- and-committees/filing-reports/electronic-filing/

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https://webforms.fec.gov/psa/index.htm

https://www.fec.gov/help-candidates-and-committees/filing-reports/electronic-filing/

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II. Campaign Finance Disclosure on FEC Form 3

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A. Report receipts on the appropriate line number 1. Itemize regardless of amount: a) Contributions from political committees - Line 11b or 11c b) Transfers from affiliated authorized committees - Line 12 c) Loans received – Line 13a or 13b 2. Threshold for other categories Itemize all other receipts once they exceed $200 when aggregated with other receipts from that same source during the election cycle.

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B. Best efforts (11 CFR 104.7) 1. Required to make “best efforts” to obtain, maintain and report required information.

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2. To show “best efforts,” committee must: a) Request information in solicitation materials, along with applicable disclaimer informing contributors that information is required under federal law; b) Make follow-up request within 30 days of receipt of contributions lacking required information, keep written documentation of follow-up request (with no additional solicitation made); written request must be accompanied by a pre-addressed postcard or envelope for the response; and c) Amend reports to disclose information received but not previously disclosed (or include information in memo entries on the next report filed).

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C. Amendments (Guide, p. 122) 1. Discovers that an earlier report contained erroneous information. 2. Does not obtain all the required information concerning a particular transaction in time to include it in the appropriate report.

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D. Report disbursements on the appropriate line number 1. Itemize regardless of amount: a) Transfers to affiliated authorized committees – Line 18 b) Loan repayments – Line 19

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c) Refunds of contributions to PACs & party committees – Line 20 d) Contributions made to other federal candidates/other political committees – Line 21 2. Threshold for other disbursement categories Itemize all other disbursements once they exceed $200 when aggregated with other disbursements to the same payee during the election cycle.

E. Purpose of disbursement 1. FEC regulations require that the “purpose of disbursement” entry for each disbursement be sufficiently specific, when considered with the identity of the recipient, to provide a clear reason for the payment. 11 CFR 104.3(b)(3) and (4). 2. Policy statement includes non-exhaustive lists of acceptable and unacceptable “purpose of disbursement” descriptions intended to provide additional guidance to the regulated community and to foster consistency among filers. 3. As a general guideline, the statement suggests that filers consider whether a person unaffiliated with the campaign/committee could discern why a payment was made by reading the description they have provided. 4. List is updated periodically and made available online at https://www.fec.gov/help-candidates-and-committees/purposes- disbursement/.

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F. Disbursements requiring additional itemization Certain disbursements require supporting information that can be reported as a memo entry. The supporting memo entry must include the original vendor, date, amount, address, and purpose. 1. Staff reimbursements 2. In-kind contributions from the candidate 3. Credit card payments 3. Payments to payroll companies

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REPORTS ANALYSIS DIVISION (RAD) REVIEW PROCESS AND REQUESTS FOR ADDITIONAL INFORMATION (RFAIs)

I. RAD Review and Referral Policy

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A. RAD review and referral policy Policy is reassessed every election cycle and revisions/changes made based on input from RAD and other offices (such as OGC), and Commissioners. A redacted version of the RAD review and referral policy can be found on the RAD web page.

B. Categories of review 1. Internal policy contains categories of review the analyst checks. 2. Policy has established thresholds for making determinations on whether to send a Request for Additional Information (RFAI). 3. Thresholds are confidential.

C. Review is conducted and thresholds are applied on a per report basis, meaning the thresholds are applied to each report reviewed. 1. This means a committee may receive a RFAI identifying the same issue already addressed in response to a RFAI referencing a different report. 2. Exceptions include outlining best efforts procedures which would apply to the two-year cycle, and responses relating to foreign address inquiries that indicate safe harbor guidelines are followed for all contributions apply for the two-year election cycle. 3. There may be several issues that are aggregated together to meet a single threshold, so it’s possible to see an issue questioned on one report that isn’t included in an RFAI on for another report.

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II. Request for Additional Information (RFAI)

A. Response due date If internal thresholds are met, an RFAI is sent, with a “Response Due Date” in the upper right hand corner of the letter. Extensions are not granted. The committee analyst’s name and contact telephone number are also provided in the letter.

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B. Responses are assessed by the analysts and in some cases, team leaders 1. Analysts do not reply to responses.

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2. Contact is not made with committees in every case when a response is not sufficient. Further explanation below. 3. Committees are encouraged to contact their assigned analyst prior to responding if unsure about how to respond or after a response is filed to ensure an adequate response is received. 4. Keep in mind that analysts can’t make legal conclusions or give guidance on a legal conclusion being made by a committee. In addition, they cannot determine what category your activity falls under (i.e., independent expenditures or coordinated party expenditures). 5. In some cases, RAD consults with OGC before sending a RFAI and when making a response assessment.

C. Best way to respond to RFAIs depends on type of information that needs to be provided 1. File an amendment to a report when changing information that affects entries on a report. This would include additions, changes or deletions. 2. File a Miscellaneous Text Submission (Form 99) for narrative responses that do not affect actual entries within a report. (For example, when outlining procedures for “best efforts” in obtaining contributor information.)

D. Referrals to the Audit Division 1. Factors for making referrals to the Audit Division

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a) Level of financial activity b) Responses to RFAIs (1) Late or no response (2) Inadequate responses c) For authorized committees only - election results 2. The number of amendments filed is not a factor. 3. The number of RFAIs is not a factor if responded to adequately and on time. 4. Committees should ensure that they have provided the most current mailing address, email address and phone numbers on their Statement of Organization (FEC Form 1). Often RFAIs are returned by the Post Office due to an incorrect mailing address. RAD sends RFAIs via email (since October 2011), so it’s important to include a valid email address (committees may provide up to two emails) on FEC Form 1. Committees have the option to instead receive RFAIs on paper through the mail and can indicate this preference by filing Form 99. **

**Note on COVID-19: information on the FEC’s limited mail operations (as of 8/10/20): https://www.fec.gov/resources/cms- content/documents/status_of_fec_operations_8-10-2020.pdf

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EXAMINE REPORTING SCENARIOS

SCENARIO #1: 48-Hour Notices (Guide, pp. 81, 83) In-Kind Contributions (Guide, pp. 94-95)

As the November 3rd general election approaches, Candidate makes a number of solicitation calls to her loyal contributors. In response to her call, Joan Callamezzo donates a computer worth $1,000 to the campaign, on October 18, 2020.

Ron Swanson, the treasurer for the Very Good Building Company PAC, was out of the office when Candidate Knope called making her appeal. To ensure the contribution gets to the campaign before the election, Mr. Swanson takes a walk to Leslie Knope’s campaign office on November 1, 2020, and hands a $5,000 check to Treasurer Ben Wyatt.

1. Do any of these receipts trigger 48-Hour Notices? Yes. Campaign committees must file special notices regarding contributions of $1,000 or more received less than 20 days but more than 48 hours before 12:01am of the day of any election in which the candidate is running (whether or not the candidate has opposition in the election). The expedited disclosure requirements apply to all types of contributions, including: • Contributions from the candidate; • Loans from the candidate and other non-bank sources; and • Endorsements or guarantees of loans from banks.

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https://www.fec.gov/help-candidates-and-committees/dates-and-deadlines/2020-reporting- dates/preg-report-notice-congressional-committees-2020

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In our scenario, the 48-Hour Notice period runs from October 15 through October 31, 2020, therefore the October 18, 2020, receipt triggers the 48-Hour Notice requirements.

2. How should the committee disclose the October 18, 2020 receipt? The $1,000 computer given as an in-kind contribution from Joan Callamezzo should be disclosed as a 48-Hour Notice and must be reported to the FEC by October 20, 2020.

Campaign committees may file 48-Hour Notices using FEC Form 6. The notices must reach the FEC within 48 hours of the committee’s receipt of the contribution(s). Committees filing electronically must file their 48-Hour Notices electronically. Committees filing paper forms may fax the notice to (202) 219-0174,** or may file online using the FEC’s website at: https://webforms.fec.gov/onlinefiling/form6/login.htm

** For committees filing paper forms, RAD has temporarily suspended processing of faxed documents while the FEC offices are closed due to COVID-19. More information on FEC operations (as of 08/10/2020): https://www.fec.gov/resources/cms- content/documents/status_of_fec_operations_8-10-2020.pdf.

NOTE: A last-minute contribution must also be itemized on the committee’s next scheduled report. An in-kind contribution will be disclosed on both Schedule A and Schedule B.

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Report last minute receipt: Show reporting of 48-Hour Notice on Form 6.

#1

48-Hour Notices must be submitted w/in 48 hrs of Leslie Knope for Congress receiving contributions of 120 Park Street $1,000 or more (including loans and in-kinds). Pawnee IN 47998 Leslie Knope IN / 10 C00320000 X

Joan Callamezzo Channel 46 10/18/20 606 Lake Avenue $1,000.00 Pawnee IN 47998 TV Show Host Ben Wyatt 10/19/20

3. How should the committee disclose the $5,000 check received on November 1, 2020? 48-Hour Notice is NOT required. While the contribution is over $1,000, it was received outside the 48-Hour Notice period (October 15 through October 31, 2020). Contributions received outside of that time period do not require expedited disclosure. The receipt will be reported on the campaign committee’s next scheduled report, the Post-General Report.

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Key Issues • 48-Hour Notice is used to disclose contributions of $1,000 or more received less than 20 days but more than 48 hours before 12:01am of the day of any election in which the candidate is running. The requirement is triggered whether or not the candidate has opposition in the election. • Must be filed within 48 hours of receipt. • Campaign committees file their 48-Hour Notices using FEC Form 6. • Form 6 online webform: https://webforms.fec.gov/onlinefiling/form6/login.htm • Any receipts disclosed on the 48-Hour Notice must be disclosed again as a contribution/loan on the next scheduled report. • The notices must reach the FEC within 48 hours of the committee’s receipt of the contribution(s). Committees filing electronically must file their 48-Hour Notices electronically. • For more information see: https://www.fec.gov/help-candidates-and-committees/filing- reports/48-hour-notices/

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SCENARIO #2: Itemizing Receipts (Guide, pp. 89-90) Curing Excessive Contributions (Guide, pp. 24-27; 93-94)

PAC Additional National Candidate State, District & Local National Party For 2019-20 (SSF and Party Committee Committee Party Committee Committee Elections Nonconnected) Accounts per election per year per year per year per year

$10,000 Individual $2,800 $5,000 $35,500 $106,500 (combined)

Candidate Unlimited Unlimited $2,000 $5,000 Committee Transfers Transfers

PAC: $5,000 $5,000 $5,000 $15,000 $45,000 multicandidate (combined)

PAC: $10,000 $2,800 $5,000 $35,500 $106,500 Nonmulticandidate (combined)

National Party Unlimited Unlimited $5,000 $5,000 Committee Transfers Transfers

State, District & Local $5,000 $5,000 Unlimited Unlimited Party Committee (combined) (combined) Transfers Transfers

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Presumptive Reattribution If individual contribution exceeds limit, made on joint account, but has only one signature: • Attribute permissible amount to the signer; and • Presumptively reattribute excessive amount to other account holder, without obtaining his/her signature. • Reattribution may not cause contributors to exceed any contribution limits. • Committee must notify contributor of reattribution by paper mail, email, fax or other written method within 60 days of treasurer’s receipt of contribution; must notify contributor of right to receive refund instead.

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Avoiding Excessive Contributions • Campaigns – Ask contributors to designate contributions for a particular election. • Ask joint contributors to both sign the check or accompanying statement. • Presumptive reattribution is allowed even if only one signature is on the check. Ensure that the reattribution won’t cause donors to exceed any limits (i.e., per election limits). • Written notification to contributor(s) must be done within 60 days of receipt for presumptive reattributions. The notification must also offer the contributor the option to receive a refund instead. • Designation of campaign contributions required o Contributor intends for contribution to count toward a future election, beyond the upcoming election. o Contributor wants contribution to retire candidate’s debt for a past election. Note: This is permissible only if: . Candidate has net debt outstanding from that election; and . Contribution, when aggregated with previous contributions to same candidate for same election, does not exceed limit. • If candidate loses primary, general election contribution must be refunded within 60 days. • Contributions designated for the primary, received after the primary can only be accepted if campaign has net debts outstanding for the primary.

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SCENARIO #2: Itemizing Receipts (Guide, pp. 89-90) Curing Excessive Contributions (Guide, pp. 24-27; 93-94)

Andy and his wife, April, talk about doing as much as they can to get their friend Leslie elected to Congress. A few days before the general election, they mail the campaign a check for $5,600 (undesignated, signed only by April), which the campaign receives on November 2, 2020.

1. Can the committee accept April’s contribution check as written? If not, what must the campaign do to remedy the situation? No. Potentially, these could be joint contributions. However, since only April signed the $5,600 check, April has made an excessive contribution for the general election. To remedy this, the campaign can reattribute the excessive portion of her contribution.

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2. How should the committee disclose the transaction that remedies the excessive contribution?

Reattribution: Since April’s contribution is drawn on a joint account, the campaign has the option of reattributing the excessive portion to the joint account holder, . The campaign may presumptively reattribute the excessive portion ($2,800) to Andy for the general election as long as it would not cause him to exceed his limits.

Report receipt: show reporting on Schedule A for Line 11(a)(i). Three separate entries: a. Show check as written: $5,600 contribution from April Ludgate for general; b. Subtract excessive amount of contribution: -$2,800 removed from April Ludgate’s general election contribution; and c. Reattribute excessive amount, $2,800 to Andy Dwyer as general election contribution. For all entries, include cross-reference notations: “reattribution “, “reattribution below.”

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Report reattribution: show reporting on Schedule A for Line 11(a)(i). Show full $5,600 as general election contribution from April Ludgate. Disclose, as memo entries, the reattribution of excessive portion from April Ludgate (-$2,800) to Andy Dwyer ($2,800). Check “Memo Item” boxes and include applicable notations in Amount of Each Receipt this Period box.

#2 X

X

Reattribution below

X Reattribution

Key issues: • A presumptive reattribution is allowed even if only one signature is on the check. Ensure that the reattribution won’t cause donors to exceed the per election limits. • Notification to contributor(s) must be done within 60 days of receipt for presumptive reattributions and must also offer contributor(s) the option to receive a refund instead.

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SCENARIO #3 Earmarked Contributions (Guide, Appendix A, pp. 129-132) 48-Hour Notices (Guide, pp. 81, 83)

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Earmarked Contributions A contribution to a candidate which the contributor directs (either orally or in writing) through an intermediary or conduit.

Conduit/intermediary Anyone who receives and forwards an earmarked contribution to a candidate. This includes individuals, political committees, unregistered committees and partnerships.

Persons NOT considered conduits include: • Corporations, unions and other prohibited sources; • Employees or full time volunteers working for campaign; • Individuals expressly authorized to raise money on behalf of candidate; • Committees affiliated with campaign committee; and • Commercial fundraising firms retained by campaign.

Effect on contribution limits • An earmarked contribution counts against the contributor’s limit for the recipient candidate. • Conduit limit is affected when the conduit exercises direction or control over the contributor’s choice of recipient candidate.

Transmittal to campaign • The conduit must forward an earmarked contribution to the recipient campaign committee within 10 days of receiving the contribution. • Campaign should receive transmittal report from conduit containing the contributor information needed to disclose on FEC report.

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SCENARIO #3 Earmarked Contributions (Guide, Appendix A, pp. 129-132) 48-Hour Notices (Guide, pp. 81, 83)

On September 23, 2020, Leslie Knope’s campaign receives a check from Act Purple Win PAC comprising individual contributions earmarked through the PAC. The letter accompanying the check notes that on September 21, 2020, the PAC collected a total of $8,000 in contributions from 78 individuals. In the letter, the PAC provides contributor information and contribution n amounts – most contributions are for $100, but Jerry Gergich and each contribute $300. Act Purple Win PAC deducts transaction fees before forwarding the net amount of $7,642.80 to the Knope Campaign.

1. Does the campaign disclose the receipt of an earmarked contribution as a contribution from the conduit or as a contribution from the individual? Or both? The earmarked contributions collected in this scenario count only as contributions from the individuals. Act Purple Win PAC is acting as a conduit. Since the decision to make the contribution to the candidate was independently made by the individual contributors, not under the PAC’s direction or control, the contributions are treated as contributions only from the individuals, not affecting the conduit’s limits.

2. Do any of these receipts trigger last-minute disclosure (48-Hour Notices)? No. As a reminder, in our scenario, Candidate Knope is participating in the November 3rd general election, and the applicable 48-Hour Notice period runs from October 15 through October 31, 2020. These contributions were received well before that time.

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NOTE: If these earmarked contributions were received within the general election 48-Hour Notice period, they still would NOT trigger a 48-Hour Notice. While the total amount of contributions earmarked through Act Purple Win PAC is in excess of $1,000, a 48-Hour Notice is only triggered when any single contribution of $1,000 or more is received within the 48-Hour Notice period. Therefore, these contributions would not trigger the 48-Hour Notice requirements and would simply be disclosed on the regularly-scheduled report covering the period in which the contributions were received.

3. How does the committee disclose the receipt of earmarked contributions? • Report itemized contributions from individual(s) on Schedule A for Line 11(a)(i). The Date of Receipt for these entries is the date the conduit received the money from the contributors. The itemization should also include a notation in the Receipt This Period box indicating, “Earmarked through Act Purple Win PAC.” Note that each of the $100 contributions do not require itemization, but the value should be included in the total amount of unitemized contributions reported on Line 11(a)(ii).

• Report the receipt from conduit on Schedule A for Line 11(a)(i) as a MEMO entry (check “Memo Item” box). The Date of Receipt is the date the campaign received the funds from the conduit. Itemization should also include a notation in the Receipt This Period box indicating “Conduit: limit not affected; unitemized on Line 11(a)(ii)”

#3 X

Leslie Knope for Congress Chris Traeger 340 Oak Street 09 21 2020 Pawnee IN 47998

300.00 City of Pawnee City Manager X 300.00 Earmarked through Act Purple Win PAC on 9/23 Jerry Gergich 101Columbus Avenue 09 21 2020 Pawnee IN 47998

300.00 City of Pawnee Mayor X Earmarked through 500.00 Act Purple Win PAC on 9/23 Act Purple Win PAC 600 West End Avenue 09 23 2020 Pawnee IN 47998 00222222 8,000.00 X X 8,000.00 Conduit: limit not affected; unitemized on Line 11(a)(ii)

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• Report the Conduit PAC transaction fees as a disbursement on Schedule B for Line 17. The Date of Disbursement is the date the conduit received and processed the contributions. Include a brief but complete Purpose of Disbursement noting “Transaction fees – earmarked contributions.”

#3

X

x

Key issues: • The date of receipt may be different for the conduit and the contributor(s). • Use MEMO entry (check the “Memo Item” box) for conduit if the amount of earmarked contributions passed on by the conduit exceeds $200 in the election cycle. • The conduit’s contribution limit is affected if the conduit exercises direction or control over the choice of candidate. Please note that if the conduit’s limit is affected, the conduit must tell the campaign. • If earmarked contributions are received by the conduit during one reporting period, but the conduit transmits the contributions to the campaign during the next reporting period, call the Reports Analysis Division (800-424-9530, press 5) for reporting guidance.

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SCENARIO #4: Candidate Loans (Guide, pp. 91-92, 103-107) 48-Hour Notices (Guide, pp. 81, 83)

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SCENARIO #4: Candidate Loans

Example # 4A: Candidate Loans - Personal Funds Loan

On September 23, 2020, Candidate Leslie Knope dips into her savings account and gives $50,000 to her campaign committee as a last push before the November 3, 2020, general election. She tells the Knope Campaign Treasurer Ben Wyatt that the funds are to be considered a loan. As more money from other contributors comes in, she wishes to be paid back – no matter how long it may take and will not charge the committee any interest.

1. Should the committee disclose the personal funds loan? If so, how should the committee disclose it? Does the personal funds loan trigger a 48-Hour Notice? The term “loan” is contained in the definition of contribution, and as such, the personal funds loan from Candidate Knope should be disclosed as both a contribution on Schedule A and as a loan on Schedule C.

As such, if a loan is given to the campaign in close proximity to the candidate’s primary or general election, it must be determined whether or not the receipt triggers expedited disclosure with a 48-Hour Notice. The expedited disclosure requirement applies to all types of contributions received, including loans from the candidate, loans received (other than bank loans) and endorsements of bank loans.

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In this scenario, 48-Hour Notice period for the November 3rd general election runs from October 15 through October 31, 2020. Therefore, the $50,000 personal funds loan received on September 23, 2020, falls outside this period and does not trigger the 48-Hour Notice requirements. The personal funds loan will simply be itemized on the October Quarterly Report.

Report the loan as a contribution on Schedule A for Line 13(a). The date of receipt is the date the money is received by the campaign committee; itemization should include notation in Receipt This Period box indicating “personal funds.”

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Report terms of the loan on Schedule C for Line 13(a). The loan source is the candidate. Itemization should also include notation indicating “personal funds.”

Note that the committee will continuously report the loan on Schedule C until loan is fully repaid.

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Example #4B: Candidate Loans - Repayment by Candidate’s Campaign Committee

On October 12, 2020, the campaign repays Candidate Knope $5,000 of her personal loan.

2. How is the committee’s loan repayment to the candidate disclosed? If payment is applied to the principal AND interest balances, the committee may use one check, but must break out each part and disclose them separately. Payment towards the principal balance is shown as a loan repayment, and payments toward interest are reported as operating expenditures.

• Report principal payment on Schedule B for Line 19(a); itemization should include notation in Purpose of Disbursement box indicating, “Candidate Loan Payment.”

• Report interest payment on Schedule B for Line 17; itemization should include a notation in Purpose of Disbursement box indicating, “Interest Payment on Loan.” In this scenario, Leslie Knope did not charge the committee interest.

Note: principal repayments must be continuously reported on Schedule C for each reporting period.

See reporting examples on next page

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Example #4C: Candidate Loans - Forgiveness of Candidate’s Personal Funds Loan

After a successful election campaign, Treasurer Ben Wyatt is working to close out the books on the 2020 election. On November 30, 2020, the one outstanding committee debt is a $45,000 balance on Leslie’s personal funds loan. Ben discusses with Leslie about the money her committee still owes her. Wanting to take a break from fundraising until 2021, Leslie decides to simply forgive the loan balance and convert it to a contribution.

3. How should the committee show the forgiveness of a personal funds loan by the candidate?

Report candidate forgiveness of the loan: Show reporting on Schedule C for Line 13(a). The “Balance Outstanding at Close of This Period” should be $0. (Do not include the forgiven loan balance into the total of “Cumulative Payment To Date,” since the money was not actually repaid.)

For electronic filers: Please include Memo Text with your report stating that the candidate forgave the loan.

For all filers: When the candidate forgives a loan, the committee should file a letter signed by the candidate stating that the loan is forgiven. (Please note that this requirement applies to paper and electronic filers alike. Memo text at the end of an electronically filed report stating that the candidate forgave the loan will not be accepted in lieu of the letter.)

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NOTE: Do not include the forgiven loan balance in the “Cumulative Payment To Date,” total since the money was not actually repaid.

C

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Key issues:

Candidate loans • If the candidate wishes to be paid back, be sure to report the receipt as a loan on the first report disclosing the receipt. • Tips for a personal funds loan o Use both Schedules A for Line 13(a) and Schedule C for Line 13(a). o Don’t forget loan terms. Terms of a loan from the candidate’s personal funds (no lending institution involved) may be more flexible. If there is no interest or due date, don’t leave boxes blank, enter “none” or “n/a.” o Include notations on both Schedules A & C indicating “personal funds.” o When the candidate forgives a loan, the committee should file a letter signed by the candidate stating that the loan is forgiven – for both paper and electronic filers.

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• Tips for a candidate loan from lending institution o When the candidate obtains a loan from the bank and then loans those funds to the campaign, report using Schedule A for Line 13(a), Schedule C for Line 13(a), and Schedule C-1. o Don’t forget to include loan terms. Often terms on C-1 and C will differ. The candidate is able to use different terms than the bank (including no repayment conditions). The bank must have terms offered in the normal course of business. o Remember to include notations – i.e., “home equity line of credit.” o Candidate may charge the campaign an interest rate on a loan derived from a bank that is different from what the bank charges the candidate. o When disclosing repayment on this type of loan, principal campaign committee (PCC) may issue repayment to candidate or to the bank. Reflect payment on Schedules B and C. On Schedule B, break out payments towards principal and interest separately – disclosed on different line numbers: Line 19(a) for principal payments and Line 17 for interest payments. o Loans made by a lending institution directly to the committee should be reported on Schedules A and C for Line 13(b) and Schedule C-1. Repayments on these loans should be reported on Schedule B for Line 19(b) for principal payments and Schedule B for Line 17 for interest payments, as well as reflected on Schedule C.

48-Hour Notices • Campaign committees must file special notices regarding contributions of $1,000 or more received less than 20 days but more than 48 hours before 12:01am of the day of any election in which the candidate is running (whether or not the candidate has opposition). • The expedited disclosure requirements apply to all types of contributions received, including loans from the candidate and other non-bank sources. Does not apply to bank loans. • State-by-state chart of 48-Hour Notice periods for 2020 primary elections: https://www.fec.gov/help-candidates-and-committees/dates-and-deadlines/2020- reporting-dates/congressional-pre-election-reporting-dates-2020/ • 48-Hour notice period for the 2020 general election: https://www.fec.gov/help-candidates-and-committees/dates-and-deadlines/2020- reporting-dates/preg-report-notice-congressional-committees-2020/ • Campaign committees file 48-Hour Notices with the FEC. Electronic filers must file electronically; paper filers may file via fax or online using the FEC website. • FEC Form 6 o Paper form: https://www.fec.gov/resources/cms-content/documents/fecfrm6.pdf o Online webform: https://webforms.fec.gov/onlinefiling/form6/login.htm

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Repaying candidate loans aggregating over $250,000 after an election

There are special rules concerning the repayment of personal loans from the candidate (including advances or candidate endorsed bank loans) that aggregate more than $250,000 with respect to a given election. The following rules apply: • The committee may use contributions to repay the candidate for the entire amount of the loan or loans only if those contributions were made on or before the day of the applicable election; and • The committee may use contributions to repay the candidate only up to $250,000 from contributions made after the date of the applicable election. • If the committee uses the amount of cash-on-hand as of the date of the election to repay the candidate for loans in excess of $250,000, then it must do so within 20 days of the election. During that time, the committee must treat the portion of candidate loans that exceed $250,000, minus the amount of cash-on-hand as of the day after the election as a contribution by the candidate (11 CFR 116.11(c), Advisory Opinion 2003-30).

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SCENARIO #5: Joint Fundraising (Guide, Appendix C, pp. 137-144)

Joint fundraising representative (JFR) • All participants must either create a new committee (recommended) or select one of the participating federal political committees to act as joint fundraising representative (JFR). • New committee established as JFR must register with the FEC and must include the name of each participating federal candidate in the new committee’s name.

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• Participants amend FEC Form 1 and Form 2 to designate JFR as an authorized committee. • Responsible for collecting and depositing joint contributions, paying expenses and allocating net proceeds to all participants. • Must keep records and report overall joint fundraising activity.

Joint fundraising agreement: Participants agree to formula to allocate proceeds and expenses and sign a written agreement.

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Joint fundraising solicitations must state • Names of all participants (regardless of whether they are registered political committees) • Allocation formula • Allowance for alternate designation by contributors • Excessive contributions may change allocation formula 11 CFR 102.17(c)(2)(i).

Solicitations and screening contributions • JFR and participants must screen contributions to make sure they are neither prohibited nor in excess of contribution limits. • Maximum limit = total amount he/she may contribute to all participants, without exceeding any limits.

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SCENARIO #5: Joint Fundraising Transfers (Guide, pp. 136-138)

House Candidate Leslie Knope and Senator hold an event on September 21, 2020, as a final push for their general election campaigns. They plan to divide the expenses and proceeds equally and designate the “Knope/Meagle Victory Fund” as their joint fundraising representative (JFR).

At the event, the JFR collects a total of $3,600. The only contributions came from Christopher Traeger and Jean-Ralphio Saperstein for $1,800 each. Since the proceeds are split evenly (50%) between each candidate, Chris and Jean-Ralphio each made a $900 contribution to Knope’s campaign and a $900 contribution to Meagle’s campaign.

Knope/Meagle Victory Fund incurs $200 in expenses to put on the September 21, 2020, event. Leslie Knope for Congress receives a check from the JFR on September 22, 2020, in the amount of $1,700, comprising the committee’s 50% share of the net proceeds.

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1. How should Leslie Knope for Congress disclose the transfer in from Knope/Meagle Victory Fund? The funds are coming from Knope/Meagle Victory Fund, the joint fundraising representative (JFR) authorized to raise money for the candidate. Therefore, the receipt is treated as a transfer of funds from an authorized committee – not as contributions from individuals. The campaign committee should itemize its net proceeds (the campaign’s share of the gross contributions, minus its share of expenses) as a receipt from Knope/Meagle Victory Fund.

2. Do the contributions received at the joint fundraising event trigger a 48-Hour Notice? No. As a reminder, in our scenario, the November 3rd general election 48-Hour Notice period runs from October 15 through October 31, 2020. The contributions received fall outside the 48-Hour notice timeframe. NOTE: Even if the contributions were received within the 48-Hour Notice period, the individual contributions received by the Knope campaign were each less than $1,000 – a 48-Hour Notice is only triggered when any single contribution of $1,000 or more is received within the 48-Hour Notice period.

3. Is any additional disclosure necessary? Yes. The committee must list the individual contributions contained in the transfer-in from the JFR that meet the itemization threshold as MEMO entries (check “Memo Item” box) for the entries on Schedule A. The MEMO entries should be linked to the transfer (for electronic filers) or appear directly underneath the main transfer entry. This will make it clear which individual contributions made up each transfer in cases where the

67 Prepared by the Federal Election Commission 2020 October Quarterly Reporting Webinar Candidate Committees committee reports multiple JFR transfers. (If unable to link or list individual contributions underneath the main transfer entry, specify the JFR transfer date next to each individual contribution as MEMO text).

Calculating net proceeds: • Report receipt of transfer from Joint Fundraising Representative (JFR): show reporting on Schedule A for Line 12; the Date of Receipt is the date the campaign receives the net proceeds from the JFR. • Report individual contributors: show reporting on Schedule A for Line 12 using MEMO entries (check “Memo Item” box). Date of Receipt is the date the JFR received the contribution from the individual; the Amount of Each Receipt this Period is the campaign’s full share of contribution (before expenses); also include the notation indicating, “Knope/Meagle Victory Fund – Joint Fundraiser.”

See reporting example on next page

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Key issues on joint fundraising: • The date of receipt may be different for the JFR and the contributors. • Report the transaction on Line 12 (Transfers from Other Authorized Committee), not 11(a)(i). • Use MEMO entries (check “Memo Item” box) to break out contributor itemization. • Report gross amount of contribution(s) and include a notation referring back to JFR. • Itemize contributions from the original donors making up its share of the gross receipts as “Memo Item” entries on Schedule A (only contributions aggregating over $200 for the election cycle for the contributor require itemization). • Please note that in most cases, the net amount of the transfer in to a participating campaign committee will be less than the sum of the MEMO entries supporting the transfer. • The JFR pays expenses out of the total funds raised, and then gives participating committees their allocated share of the leftover money. • Remember, when designating a separate JFR, participating campaign(s) must amend their FEC Forms 1 & 2 to add the JFR as an authorized committee. • 48-Hour Notices: If applicable, 48-Hour Notices must be filed within 48 hours of receipt. For a joint fundraiser, the date of receipt = date JFR receives the contribution.

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SCENARIO #6: Reporting Disbursements - Operating Expenditures (Guide, pp. 103-106) Credit Card Transactions (Guide, p. 105)

Treasurer Ben Wyatt uses a campaign credit card to pay committee expenses. During the period covered by the July Quarterly Report, the campaign’s Citibank VISA card has been used to pay the following expenses:

1. $150 paid to JJ’s Diner for food brought in for the April 15, 2020 monthly fundraising strategy breakfast. (The campaign has not used this restaurant before in the current election cycle.) 2. $3,000 paid to Skyway Airlines for a charter flight Candidate Knope took on May 13, 2020.

By not paying the credit card bill for a few months, the campaign incurred an additional $24.50 in finance charges. On August 29, 2020, the campaign paid off the entire $3,174.50.

1. How should the committee disclose credit card debt? Debts and obligations (other than loans) are reported on Schedule D according to the following rules: • A debt of $500 or less is reportable once it has been outstanding 60 days from the date incurred (date of transaction, not date bill is received). The debt is disclosed on the next regularly scheduled report.

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• A debt exceeding $500 must be reported in the report covering the date on which the debt was incurred.

Schedule D (outstanding debt): The debt to the credit card company should be disclosed on Schedule D in the same way as any other debts. List the credit card company as the debtor; be sure to reflect the outstanding debt amount at the close of the reporting period. Please note: no memo entries for specific credit card transactions should be listed on Schedule D.

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X Leslie Knope for Congress

Citibank VISA Credit card debt 301 10th Street, Suite 4500 New York NY 10001

0.00

3,150.00 0.00 3,150.00

2. How should the committee properly disclose the credit card payment? The committee needs to disclose the payment of charges on the campaign credit card as an operating expenditure.

As the committee pays off the debt, report partial or full payments on Schedule B – include MEMO entries (check the “Memo Item” box) to show original transactions making up the amount that is being repaid to the credit card company directly below the entry for payment to the credit card company (or, for electronic filers, link these).

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Report debt payoff on Schedule D for Line 10. Campaign should disclose the service charge on the Citibank VISA debt as “Amount Incurred This Period” so that the payment amount includes outstanding debt and additional credit card service charge.

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X Leslie Knope for Congress

Citibank VISA Credit card debt 301 10th Street, Suite 4500 New York NY 10001

3,150.00

24.50 3,174.50 0.00

Report credit card payment on Schedule B for Line 17. Disclose total payment to the credit card with the Date of Disbursement as the date the committee pays credit card bill. • Report itemization of vendor (Skyway Airlines) as a MEMO entry (check the “Memo Item” box). The Date of Disbursement is the date of the charter flight; in the Amount of Each Disbursement this Period box, include notation, “Citibank VISA” as a cross-reference to the credit card payment. • Report itemization of service charge (Citibank VISA) as a MEMO entry (check the “Memo Item” box). In the Amount of Each Disbursement this Period box, include notation, “Citibank VISA” as a cross-reference to the credit card payment.

NOTE: The $150 payment to JJ’s Diner does not require itemization, as the committee’s payments to this vendor did not aggregate over $200 in the election cycle.

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Note for electronic filers: Certain types of electronic filing software may not allow you to include a portion of memo entries underlying each partial payment on a credit card debt on each report where your committee is showing a repayment. For example, some software only allow you to include all memo entries on the first report where you show a partial payment, but may not allow you to include any memo entries on the next report(s) where you show subsequent repayment(s). In this case, please add a note saying so using Memo Text on each report where this applies to avoid RFAIs from your Campaign Finance Analyst.

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Key issues: • Pay attention to the itemization threshold. Take into account previous disbursements to same vendor – keep good records. • Use MEMO entry (check the “Memo Item” box) for any payee that exceeds the itemization threshold for operating expenses (in excess of $200 for election cycle). Also include a notation that refers back to the credit card payment as cross-reference. • Debts owed to credit card company are reflected on Schedule D in the period in which the debt was incurred if amount owed is in excess of $500; or once it has been outstanding for 60 days if $500 or less. No MEMO entries on Schedule D. • When paying credit card debt, disclose payment to the credit card company on Schedule B for Line 17, including MEMO entry (check the “Memo Item” box) for any payees making up the amount being repaid to the credit card company.

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https://www.youtube.com/watch?v=Im6cO19qBxI&t=23s

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Evaluation Link: https://www.surveymonkey.com/r/F8WN6ZS

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