2019 July Quarterly Reporting Webinar Candidate Committees

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Testing the Waters & Registration

I. Testing the Waters v. Campaigning (Guide, pp. 1-3)

A. Testing the Waters 1. Activity to determine the viability of candidacy. 2. Records of all activity must be kept. If/when individual triggers registration as a candidate, he/she will be responsible to report all “Testing the Waters” activity on first report.

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B. Campaigning Certain activities indicate that the individual is campaigning and not merely “Testing the Waters.” For example, if an individual is: 1. Making or authorizing statements referring to himself/herself as a candidate; 2. Using general public political advertising to advertise intention to campaign; or 3. Taking action to qualify for the ballot.

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Scenario #1 – Testing the Waters (Guide, p. 1)

Example A

On March 25, 2019, Sally Johnson, a respected and well-known business leader, spends $12,000 of her own money to pay for polling in order to determine if she is a viable Senate candidate in 2020. As her friend and close advisor, you ensure that her poll is carefully worded and in no way insinuates that she is running.

1. Is Sally considered a candidate for 2020? No, Sally is not a candidate for 2020. Even though she spent over the $5,000 threshold for candidacy, her activity is solely exploratory and she is not a candidate even if she raises or spends more than $5,000.

2. What does she need to file with the FEC? During her exploratory period, she is not required to register or report with the Commission.

3. Does she have to follow the federal contribution limits? Yes, Sally must follow federal contribution limits. Any activity during an exploratory committee is reportable once she becomes a candidate for federal office. This means that all money raised must be raised according to the contribution limits.

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Example B

After receiving favorable polling results, Sally gets excited. On April 5th, she impulsively ends an important radio interview by urging listeners to “Send Sally in 2020!” She calls you later that day to tell you that she is running for Senate. Since you are well-versed in campaign filing requirements, she asks you what she needs to do now.

1. Is Sally now considered a candidate for 2020? Before the radio announcement, she was testing the waters. Now that she has made statements referring to herself as a candidate, she is no longer testing the waters. Since she has already spent over $5,000, she is immediately considered a candidate.

2. What does she need to file with the FEC? You advise Sally that she needs to register as a candidate by filing an FEC Form 2 and authorize a Principal Campaign Committee by filing the FEC Form 1.

3. What does she need to file on the first report? Sally became a candidate on April 5, 2019, which means her first report will be the July Quarterly Report, which usually covers activity from 4/1/19 - 6/30/19. However, you remind Sally that she still has to report her exploratory activity - this includes all contributions she raised, money she fronted, and expenditures she made. Since the July Quarterly will be her first report and some of her exploratory activity happened outside of those coverage dates, you tell her she should extend the beginning coverage date to include her first date of financial activity.

Reporting Example Continues on Next Page

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https://www.youtube.com/user/FECTube

Reporting Schedules & Importance of Timely Filing

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I. Reporting Schedule

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. Non-election (odd) year (2019) Quarterly reports due April 15, July 15, October 15 and January 31.

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C. Election (even) year (2020) 1. Quarterly reports due April 15, July 15, October 15 and January 31. 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. b) If participating in general election, file Pre-General report due 12 days before general. 3. Post-General Report, due 30 days after general.

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

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

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II. Filing reports

A. Where to file: FEC

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B. Filing on time 1. Other reporting considerations for paper filers 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) If using First Class, overnight or priority mail with a delivery confirmation or an online tracking system, report is considered filed when it is received by the Commission; risk of timely delivery is on the filer. 2. Electronic filers: a) Due 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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C. Electronic vs. paper filing (Campaign Guide for Congressional Candidates and Committees (“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. 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.

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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. 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.

D. 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.

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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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III. 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

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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.

B. Best efforts (11 CFR 104.7) 1. Required to make “best efforts” to obtain, maintain and report required information. 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); and c. Amend reports to disclose information received but not previously disclosed (or include information in memo reports on the next report filed).

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Form 3: Schedule A, Line 11(a)(i)

x

Quimby for Congress Homer Simpson 742 Evergreen Terrace 04 30 2019 Springfield ST 99999

2,800.00 Springfield Nuclear Power Plant Best Efforts x 2020 2,800.00

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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.

Shown in the next report Form 3: Schedule A, Line 11(a)(i)

x

Quimby for Congress Homer Simpson 742 Evergreen Terrace 04 30 2019 Springfield ST 99999

2,800.00 Springfield Nuclear Power Plant Nuclear Safety Inspector x x 2020 2,800.00

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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 c) Refunds of contributions to political 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.

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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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X

Committee to Elect John Smith

Credit Card Company 05 28 2019 12 Muche Ct. Philadelphia PA 00000 Credit Card Payment – See Below

1,300.00

Southwest Airlines 04 16 2019 777 Jetstream Way Dulles VA 00000 Airline Tickets

1,300.00 Credit Card Payment X

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

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RAD Review Process and Requests for Additional Information (RFAIs)

I. RAD review of reports

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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. 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.)

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D. Referrals to the Audit Division 1. Factors for making referrals to the Audit Division 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. In addition, RAD began sending RFAIs via email in October 2011, so it’s important to ensure a valid email address is provided 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.

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SCENARIO #2: Curing Excessives - (Guide, pp. 24-27; 93-94)

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Presumptive Redesignation If individual or non-multicandidate committee makes an excessive primary contribution, campaign may presumptively redesignate excessive portion to general election if contribution:  Is made before candidate’s primary election;  Is not designated in writing for a particular election;  Would be excessive if treated as a primary election contribution; and  As redesignated, does not cause the contributor to exceed any other contribution limit.

Backward-looking provision. An undesignated contribution made after primary, but before general, may be applied to primary debt if campaign’s net debts are greater than the amount redesignated.

Notification requirement Committee must notify contributor of redesignation by paper mail, e-mail, 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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Presumptive Reattribution If individual contribution exceeds limit and is 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.

Notification requirement Committee must notify contributor of reattribution by paper mail, e-mail, 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 1. Campaigns – Ask contributors to designate contributions for a particular election. 2. Ask joint contributors to both sign the check or accompanying statement. 3. Presumptive redesignation NOT available for excessive multicandidate committee contributions (only individuals and non-multicandidate committees). Redesignation would need to be done the “old” way: a) Campaign asks contributor to provide a written, signed statement redesignating contribution for another election. Request must also state that the contributor may instead receive a refund of the excessive amount. b) Contribution is properly redesignated if, within 60 days of receipt, the campaign receives a written, signed statement redesignating the excessive portion to another election. c) If the signed authorization is not received within 60 days, the campaign must refund the excessive portion. 4. Designation of campaign contributions required a) Contributor intends for contribution to count toward a future election, beyond the upcoming election. b) 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.

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SCENARIO #2: Itemizing Receipts (Guide, pp. 89-90) Redesignation/Reattribution of Excessive Contributions (Guide, pp. 92-94)

SCENARIO #2A: Itemizing Receipts (Guide, pp. 89-90)

Andy Dwyer attends the for Congress St. Patrick’s Day fundraiser. At the event, he makes a $500 contribution, designated for the primary.

1. How should the committee disclose the $500 contribution from Andy Dwyer? Contributions from individuals are reported on Schedule A for Line 11(a)(i).

REVIEW: Receipt transactions should include the following itemization information for contribution source:  Name and mailing address;  Occupation and employer (individuals only);  FEC ID number (political committees only);  Election to which contribution/loan was designated;  Date of receipt;  Amount of receipt; and  Aggregate election-cycle-to-date total for all receipts from same source.

See Reporting Example on Next Page

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Part 1 of 2: Report Receipt from #2 Individual (April Q)

Schedule A, Line 11(a)(i)

x

Leslie Knope for Congress Andy Dwyer 525 Maple Avenue 03 17 2019 Pawnee IN 47998

500.00 Pawnee City Hall Shoe Shine Guy/Rockstar x 500.00

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SCENARIO #2B: Redesignation/Reattribution of Excessive Contributions

Andy talks to his wife, April, about doing more to get their friend Leslie elected to Congress. In response, she mails the campaign a check for $5,600 (undesignated, signed only by April), which the campaign receives on April 3, 2019.

2. 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 primary. To remedy this, the campaign can reattribute and/or redesignate the excessive portion of her contribution.

3. How should the committee disclose the transaction(s) that remedy 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, Andy Dwyer. The campaign may presumptively reattribute the excessive portion ($2,800) to Andy for the primary election as long as it would not cause him to exceed his limits.

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

Note that, in our scenario, Andy Dwyer made a $500 contribution before the $5,600 check was written, so that attributing the full $2,800 to him for the primary would cause him to exceed his limit for that election by $500. Therefore, only $2,300 may be reattributed to Andy.

Report reattribution: show reporting on Schedule A for Line 11(a)(i). Show full $5,600 as primary contribution from April Ludgate. Change attribution of excessive portion to Andy Dwyer to -$2,300 as MEMO entry (check “Memo Item” box) and include notation in Amount of Each Receipt this Period box indicating, “reattribution.”

#2 X

Leslie Knope for Congress April Ludgate 525 Maple Avenue 04 03 2019 Pawnee IN 47998 Part 2 of 2: 5,600.00 American Service Foundation Assistant Report X See reattribution and 5,600.00 redesignation below Reattribution & April Ludgate Redesignation 525 Maple Avenue 04 03 2019 Pawnee IN 47998 (July Q)

- 2,800.00 American Service Foundation Assistant X X Reattribution and 2,800.00 Redesignation below Schedule A, Andy Dwyer 525 Maple Avenue 04 03 2019 Line 11(a)(i) Pawnee IN 47998

2,300.00 Pawnee City Hall Security Guard X X 2,800.00 Reattribution

With the remaining $500, the campaign can presumptively redesignate the excessive $500 to the general election as a remedy.

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Redesignation: The campaign may presumptively redesignate the excessive portion to the general election as long as the contribution:  Is made before the candidate’s primary election;  Is not designated;  Would be excessive if treated as a primary election contribution; and  As redesignated, does not cause the donor to exceed any other limits.

April Ludgate has not yet made any general election contributions; therefore, the campaign may presumptively redesignate either the full $2,800 excessive portion of primary contribution to the general, or the $500 that remains after the reattribution to Andy. To maximize the availability of funds for the primary, the campaign chooses the latter.

Report redesignation: show reporting on Schedule A for Line 11(a)(i) as a $500 contribution from April Ludgate. Change designation to general as a MEMO entry (check “Memo Item” box) and include notation in Amount of Each Receipt this Period box indicating, “redesignation.”

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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.  A presumptive redesignation for the primary to the general election is allowed if the contribution is not designated for a particular election. For example, if April had written “primary” on the memo line of her check, a presumptive redesignation would not be allowed. The redesignation would need to be done the “old” way – with written authorization from contributor within 60 days of receipt BEFORE the redesignation could occur.  Notification to contributor(s) must be done within 60 days of receipt for presumptive reattributions and redesignations 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)

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

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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

Example A

Candidate Knope makes a number of solicitation calls to her loyal contributors asking for help to give her campaign a jump start. In response to her call, Perd Hapley decides to hold a house party on April 1, 2019. Perd begins a discussion about Leslie Knope’s candidacy and in response several guests break out their checkbooks to make contributions. No campaign representatives are present at the event so one of the guests, , collects the checks. Most checks are for $50, but Jerry Gergich writes a check for $250.

On April 3rd, Ann walks over to the Knope campaign office and hands the envelope of checks to Treasurer Ben Wyatt.

1. Does the committee disclose the receipt of an earmarked contribution as a contribution from the conduit, a contribution from the individual donors or both? The earmarked contributions collected at this event count only as a contribution from the individual(s). In this scenario, Ann Perkins is acting as a conduit. Since the decision to make the contribution to the candidate was independently made by the individual contributors, not under Ann’s direction or control, the contribution is treated as a contribution only from the individual(s), not affecting the conduit’s limits.

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2. How does the committee disclose the receipt of earmarked contributions?  Report itemized contribution from individual(s) on Schedule A for Line 11(a)(i). The Date of Receipt for this entry is the date the conduit received the money from the contributors, in this case the date of the event. The itemization should also include a notation in the Receipt This Period box indicating, “Earmarked through Ann Perkins.” Note that each of the $50 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 “Total earmarked through conduit.”

Part 1 of 1: Report Receipt and #3A Conduit Info (July Q)

X

Leslie Knope for Congress Jerry Gergich 101 Columbus Avenue 04 01 2019 Pawnee IN 47998 Schedule A,

250.00 Line 11(a)(i) City of Pawnee Mayor X Earmarked through 2020 250.00 Ann Perkins Both entries Ann Perkins relate to a 600 West End Avenue 04 03 2019 Pawnee IN 47998 single receipt

1,800.00 Pawnee Health Dept. Public Relations Director X X 1,800.00 Conduit: limit not affected; 2020 unitemized on Line 11(a)(ii)

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Example B

Craig Middlebrooks hosts a separate fundraising event for Leslie Knope’s campaign on March 30, 2019. Craig did not invite a Knope campaign representative to the event, so Craig collects the checks himself – two $25 checks and one for $1,000 from . He had hoped to stop by Leslie Knope’s campaign office the next day, knowing the close of books for the campaign’s April Quarterly report was that day.

He instead drops the envelope of checks off to Treasurer Ben Wyatt on his way home from work on April 2nd.

3. How does the committee disclose the receipt of earmarked contributions? The campaign discloses these earmarked contributions on the July Quarterly Report. The date used for FEC reporting is the date of receipt, which is the date the campaign takes possession of the contributions. In this scenario, the contributions were given to Craig Middlebrooks on March 30th, however, Craig is not an agent of the Knope Campaign. As such, the contributions are received by the Knope campaign when Craig (acting as a conduit) hands the checks to Treasurer Wyatt on April 2, 2019 – which falls in the July Quarterly reporting period.

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 Report itemized contribution from individual(s) on Schedule A for Line 11(a)(i). The Date of Receipt for this entry is the date the conduit received the money from the contributors, in this case the date of the event. The itemization should also include a notation in the Receipt This Period box indicating, “Earmarked through Craig Middlebrooks.” Note that each of the $25 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 “Total earmarked through conduit.”

Part 1 of 1: Report Receipt and #3B Conduit Info (July Q)

X

Leslie Knope for Congress Chris Traeger 340 Oak Street 03 30 2019 Pawnee IN 47998 Schedule A,

1,000.00 Line 11(a)(i) City of Pawnee City Manager X Earmarked through 2020 1000.00 Craig Middlebrooks Both entries Craig Middlebrooks relate to a 1001 Magnolia Avenue 04 02 2019 Pawnee IN 47998 single receipt

1,050.00 City of Pawnee Office Manager X X 1,050.00 Conduit: limit not affected; 2020 unitemized on Line 11(a)(ii)

Key issues:  The date the campaign takes possession of the contribution (not the date a conduit receives the funds) is the date that controls on which report the contribution is disclosed. The date of receipt may be different for the conduit and the contributor(s).  Use MEMO entry (check “Memo Item” box) if the amount of earmarked contributions passed on by the conduit exceeds $200 over 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.

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SCENARIO #4: Candidate Loan from Personal Funds (Guide, pp. 91 and 109)

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On April 23, 2019, Candidate Leslie Knope generously dips into her “rainy-day” savings account and contributes $50,000 to her principal campaign committee to give her primary election campaign a boost. While she wishes to be paid back in full once money from other contributors comes in, she does not set a specific due date, nor does she intend to charge the committee any interest.

1. How should the committee disclose the transaction(s)? Since she treated it as a loan, does it need to be disclosed as a contribution as well? The definition of contribution includes loans, so it must be treated as such; but, as a loan, there are additional reporting requirements. Since it came from the candidate, no contribution limit applies.

The funds are disclosed as a loan from the candidate to the campaign committee. Also, since the candidate is treating this contribution as a loan, the committee must disclose the terms of the loan from the first time it is disclosed.

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

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Report terms of the loan: Show reporting on Schedule C for Line 13(a). The Loan Source is the candidate. Also include notation indicating “personal funds.”

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After a strong fundraising push during the summer months, contributions begin to roll in. As a result, on August 30, 2019, the campaign is able to make a partial payment of $5,000 towards Leslie’s loan.

2. How should the committee show a repayment of $5,000 towards a personal funds loan? Show the total amount repaid by the committee to the candidate in the “Cumulative Payment To Date” field. The “Balance Outstanding at Close of This Period” should show only the remaining portion of the outstanding loan (“Original Amount of Loan” – “Cumulative Payment to Date” = “Balance Outstanding at Close of This Period”).  For candidate loans, repayments of the loan principal reported on Line 19(a) (“Repayments of Loans Made or Guaranteed by the Candidate”) of the Detailed Summary Page.  If candidate charges interest on a personal funds loan, interest payments should be reported on Schedule B supporting Line 17 (“Operating Expenditures”) of the Detailed Summary Page.  Interest incurred but not paid should be disclosed on Schedule D.  Non-candidate loans made to the committee by a financial institution should be reported on Line 19(b) (“Repayments of All Other Loans”) of the Detailed Summary Page.

See Reporting Example on Next Page

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The first six months of Leslie’s primary campaign have been successful, and her campaign treasurer is working to close out the books before the end of the year. The one outstanding committee debt is the balance on Leslie’s personal funds loan. Before heading home for the Thanksgiving holiday, she 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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See Reporting Example on Next Page

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Key issues:  If the candidate wants to be paid back, be sure to report the receipt as a loan on both Schedule A, Line 13(a) and on Schedule C as an outstanding obligation when the loan is incurred. The loan should be continuously disclosed on Schedule C on subsequent reports until the loan is paid off or forgiven.  Do not forget loan terms. Terms of a loan from the candidate’s personal funds (no lending institution involved) may be more flexible. If there are no terms, do not leave boxes blank, enter “none” or “n/a.”  Include notations on both Schedules A & C indicating “personal funds.” 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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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: 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 April 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 January 15, 2019 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 February 13, 2019.

By not paying the credit card bill for a few months, the campaign incurred an additional $24.50 in finance charges. On April 29, 2019, 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.  A debt exceeding $500 must be reported in the report covering the date on which the debt was incurred.

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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.

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.

Schedule B (debt payments): 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.

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.

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

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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.

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 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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Reports Analysis Division information: https://www.fec.gov/help-candidates-and-committees/question-rad/

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Evaluation Link: https://www.surveymonkey.com/r/NB975XP

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