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WILEY, REIN 8C FIELDING WILEY, REIN 8c FIELDING I776 K STREET, N. W. WASHINGTON, 0. C. 20008 (202)429-7000 TREVOR POTTER FACSIMILE (202) 429-4273 July 3 1, 1998 (202)429-7049 ..... BY HAND DELIVERY - ..;: Office of General Counsel .. Federal Election Commission .. 999 E Street, N.W. Washington, D.C. 20463 i Attn: F. Andrew Turley Supervising Attorney Central Enforcement Docket Re: MUR4758 Dear Mr. Turley: Enclosed please find the original and two copies of the response of C. Boyden Gray and Jeanne Fletcher to the complaint in this matter. If you have any questions, please do not hesitate to contact me. Sincerely, TP/mp Enclosures cc: The Commissioners a RESPQNSE OF C. BOYDEN GRAY AND JEANNE FLETCHER IN MUR 4758 0 For the reasons stated below, the Commission should find &‘noreason to believe” that either C. Boyden Gray or Jeanne Fletcher has violated the Federal Election Campaign Act (“FECA”), and should dismiss the complaint against them. I. THE COMPLAINT On June 8, 1998, a complaint was filed with the Federal Election Commission (“FEC” or .. “Commission”) against C. Boyden Gray and Jeanne Fletcher, alleging various violations of the _. ._... federal election laws. In particular, the complaint alleged that Mr. Gray had knowingly and willfully violated 11 C.F.R. $ 110.4(b) by making contributions in the name of another and that he had exceeded the annual federal contribution limit for individuals contained in 11 C.F.R. $ 110.5(b). It further alleged that Ms. Fletcher had violated the prohibition against contributions in the name of another because of contributions from Mr. Gray made in her name. The complaint appears to be based solely on article that appeared in the Wall Street e an Journal on May 28, 1998. The complainant in this matter does not claim any additional knowledge of any of the purported events, but nonetheless has alleged violations not contained in a the article. Specifically, the article never alleges that either Mr. Gray or Ms. Fletcher knowingly and willfully violated federal election laws, nor does it state that Mr. Gray attempted to make contributions in Ms. Fletcher’s name. For these reasons alone, Respondents request that the FEC 0 dismiss the complaint as not meeting the requisite standards of 2 U.S.C. Q 4378. Further, a thorough review ofthe FEC records and Mr. Gray’s financial records indicates 0 that the article upon which the complaint was based (if only in part) contained incomplete information concerning Mr. Gray’s federal contributions, as this Response and attachments will demonstrate. II. SUMMARY OF ARGUMENT e Mr. Gray is currently within all federal contribution limits for the years 1994 through 1996 mentioned in the complaint. A review of current Federal Election Commission (“FEC”) -. ..-. data will also show that Mr. Gray is in compliance for all other years, including 1997 and 1998. At no time did Mr. Gray make contributions in the name of Jeanne Fletcher, nor did she - ... ...-. ever permit her name to be used. Instead, despite all clear documentary evidence and ...-..- .. instructions to the contrary, several committees simply mis-reported Mr. Gray’s contributions, because checks bearing his printed name were signed by Ms. Fletcher in her capacity as Mr. - Gray’s financial secretav. - 0 Mr. Gray has at all times attempted to comply fully with all federal contribution limits. Years ago, and ofhis own volition, he established an internal system ofrecord-keeping for e compliance purposes, supervised by his financial secretary and his outside accountant, for the express purpose of ensuring that he complied with all federal political contribution limits. Because of confusion about the intricacies of the federal annual contribution limit and the nature e of certain contributions, as well as mis-deposits and reporting by some recipient committees, there were moments in the past where the intended results were not achieved, despite Mr. Gray’s best efforts. However, any problems were immediately remedied by Mr. Gray as soon as he e became aware of them, with many of the necessary refunds or redesignations sought four years ago (long before any article or complaint raised the contribution limit issue). e 2 e For these reasons, Respondents respecthlly request that the Commission vote to find “no e reason to believe” that Jeanne Fletcher violated the Federal Election Campaign Act of 1971, as amended, and that it dismiss the complaint against C. Boyden Gray. As demonstrated herein, Commission precedent does not support proceeding against Mr. Gray where the alleged violations are as small and old as here, and where he has made a pre-existing good faith effort to . ..~ create a compliance system and ensure that he did not exceed federal political contribution limits. ........ 111. ARGUMENT A. Mr. Gray is currently under the $25,000 annual federal individual contribution limit. We attach to this Response a detailed review of FEC data and Mr. Gray’s financial records and correspondence which shows that Mr. Gray is currently under the annual federal individual contribution !imit of $25,000 for all years in which he has made political contributions, including 1994, 1995, and 1996. This review also specifies a11 refunds or e redesignations sought and obtained by Mr. Gray. & Attachment A. B. Mr. Gray’s conduct was in any case never knowing and willful. At no time did Mr. Gray knowingly or willfully violate the federal annual individual e contribution limit of $25,000. Any past violations of the limit stemmed from honest misunderstandings of the limit’s intricacies by personnel attempting to monitor compliance with federal limits, and from mis-attributions unbeknownst to Mr. Gray and beyond his control. Immediately upon discovering these misunderstandings and mis-attributions, Mr. Gray took prompt steps to seek refunds and redesignations to ensure full compliance with the federal annual e limit. 3 Mr. Gray served in various positions at th.e White House from 1981 to 1993, during which time he rarely made individual political contributions. When Mr. Gray left government in 1993, he began making a few political contributions, well under the $25,000 limit. In some instances, Mr. Gray wrote checks for these contributions himself. In other instances, Jeanne Fletcher, Mr. Gray's personal financial secretary, wrote checks (acting as his agent and pursuant to his express authorization) from his account to candidates and committees as he directed, and, ._....iiZ -. at the end of the year, broke down his expenses into categories, including political and charitable contributions. Fletcher aff. 7 9 (Attachment C). Ms. Fletcher did so as part of her general management responsibilities for Mr. Gray's personal affairs, which included attending to all requests for political contributions received by Mr. Gray. Fletcher aff. 77 2,6. Ms. Fletcher began working for Mr. Gray in that capacity in July 1990, and continues to do so today. In 1994, fund-raisers began calling upon Mr. Gray with increasing frequency for contributions to federal candidates, as well as to PACs and party committees. Gray aff. 13 (Attachment B). When Mr. Gray began making more and larger political contributions, Ms. Fletcher, acting as his financial secretary, called the Federal Election Commission to ask for the rules concerning federal political contributions by individuals. Fletcher aff. 110. After Ms. Fletcher reviewed that material provided to her, she understood that a $25,000 annual federal individual contribution limit existed, but not necessarily the full complexity and intricacies of the limit. Ig, Both Mr. Gray and Ms. Fletcher believed that PAC and party contributions he was making should be accounted for as "non-federal" contributions that did not count toward Mr. Gray's annual $25,000 federal limit. Fletcher aff. 7 10; Gray aff. 73. At some point in 1994, Mr. Gray and Ms. Fletcher learned that some of the PAC and party contributions he had made counted toward the $25,000 annual federal limit, and that certain 4 contributions that Mr. Gray had intended to be non-federal had been incorrectly reported as a federal by the recipient committee. Gray aff. 7 4; Fletcher aff. 7 11. Mr. Gray and Ms. Fletcher immediately undertook a review of Mr. Gray’s contributions up to that point. Aeer adding certain of the PAC and party contributions to Ms. Fletcher’s records of Mr. Gray’s contributions e to candidates, Mr. Gray realized that it would be necessary for him to request refunds and redesignations of certain contributions so that he would bring his total contributions within the limit. Gray aff. 7 4; Fletcher aff. 9 11. Mr. Gray did so immediately, and on his own initiative, and thereafter believed that he was in full compliance with the federal annual limit for 1994. Gray aff. 7 4; Fletcher aff. 7 11. Exhibits 1-16. Also at that time (four years ago), Mr. Gray established a compliance system to ensure that his future political contributions were carehlly monitored, and that he remained within the federal limit at all times. Gray aff. 75. Ms. Fletcher both tracked Mr. Gray’s contributions and, acting as his agmt, signed checks for contributions authorized by him. Richard Scott, Mr. Gray’s accountant, also reviewed these accounts periodically. Fletcher aff. 1[ 9. In this way, Mr. a Gray attempted to ensure that he would be in compliance with all federal limits. Using the system described above to monitor his contributions, Mr. Gray continued e making contributions without incident until the spring of 1998. Fletcher aff. 7 12. Throughout that period, Mr. Gray believed himself to be in full compliance with the election laws at all times. Gray aff. 7 6. e In the spring of 1998, a reporter from the Wall Street Journal contacted Mr. Gray and suggested that Mr.
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