Dec 0 2 2016

FEDERAL ELECTION COMMISSION WASHINGTON, D.C. 20463 David L. Gould, Esq. DEC 0 2 2016 Gould & Orellana, LLC 249 East Ocean Boulevard Suite 685 Long Beach, California 90802 1 7 RE: MUR 6957 Isadore Hall III Inspiration and Hope for California (IH for CA) Ballot Measure Committee Controlled by Senator Isadore Hall and David L. Gould in his official capacity as treasurer Dear Mr. Gould: On August 19,2015, the Federal Election Commission (the "Commission") notified your clients, Isadore Hall III and Inspiration and Hope for California (IH) Ballot Measure Committee Controlled by Senator Isadore Hall for California ("Ballot Measure Committee"), of a complaint alleging that they violated the Federal Election Campaign Act of 1971, as amended (the "Act"). At that time, we provided your clients with a copy of the complaint. After reviewing the allegations contained in the complaint, your response, and publicly available information, the Commission on November 15,2016, found reason to believe that Isadore Hall III and the Ballot Measure Committee violated 52 U.S.C. § 30125(e)(1)(B), a provision of the Act. Enclosed is the Factual and Legal Analysis that sets forth the basis for the Commission's determination. Please note that you have a legal obligation to preserve all documents, records, and materials relating to this matter until such time as you are notified that the Commission has closed its file in this matter. See 18 U.S.C. § 1519. In order to expedite the resolution of this matter, the Commission has authorized the Office of the General Counsel to enter into negotiations directed towards reaching a conciliation agreement in settlement of this matter prior to a finding of probable cause to believe. Pre- probable cause conciliation is not mandated by the Act or the Commission's regulations, but is a voluntary step in the enforcement process that the Commission is offering to your clients as a way to resolve this matter at an early stage and without the need for briefing the issue of whether or not the Commission should find probable cause to believe that your clients violated the law. Mr. David L. Gould, Esq. MUR 6957 Page 2 If your clients are interested in engaging in pre-probabie cause conciliation, please contact Elena Paoli, the attorney assigned to this matter, at (202) 694-1548 or (800) 424-9530, within seven days of receipt of this letter. During conciliation, you may submit any factual or legal materials that you believe are relevant to the resolution of this matter. Because the Commission only enters into pre-probable cause conciliation in matters that it believes have a reasonable opportunity for settlement, we may proceed to the next step in the enforcement process if a mutually acceptable conciliation agreement cannot be reached within sixty days. See 52 U.S.C. § 30109(a), 11 C.F.R. Part 111 (Subpart A). Conversely, if your clients are not interested in pre-probable cause conciliation, the Commission may conduct formal discovery in this matter or proceed to the next step in the enforcement process. Please note that once the Commission enters the next step in the enforcement process, it may decline to engage in further settlement discussions until after making a probable cause finding. In the meantime, this matter will remain confidential in accordance with 52 U.S.C. § 30109(a)(4)(B) and 30109(a)(12)(A) unless you notify the Commission in writing that you wish the matter to be made public. Please be advised that, although the Commission cannot disclose information regarding an investigation to the public, it may share information on a confidential basis with other law enforcement agencies." We look forward to your response.. On behalf of the Commission, Mafihew S. Petersen Chair Enclosures Factual and Legal Analysis t ^ The Commission has the statutory authority to refer knowing and willful violations of the Act to the Department of Justice for potential criminal prosecution, 52 U.S.C. § 30109(a)(5)(C), and to report information regarding violations of law not within its jurisdiction to appropriate law enforcement authorities. Id. § 30107(a)(9). 1 FEDERAL ELECTION COMMISSION 2 3 FACTUAL AND LEGAL ANALYSIS 4 5 RESPONDENTS: Isadore Hall III MUR6957 6 Inspiration and Hope (IH) for California Ballot 7 Measure Committee Controlled by 8 Senator Isadore Hall and David Gould in 9 his official capacity as treasurer 10 11 12 I. INTRODUCTION 13 This matter was generated by a complaint filed with the Federal Election Commission 14 alleging violations of the Federal Election Campaign Act of 1971, as amended (the "Act"), by 15 Isadore Hall III, Hall for Congress f/k/a/ Hall for Congress Exploratory Committee and David 16 Gould in his official capacity as treasurer, and Inspiration and Hope for California (IH) Ballot 17 Measure Committee Controlled by Senator Isadore Hall and David Gould in his official capacity 18 as treasurer. 19 11. FACTUAL AND LEGAL ANALYSTS 20 Isadore Hall III became a representative in the California State Assembly in 2008 and 21 won a special election to the California State Senate on December 9,2014.' On February 24, 22 2015, Hall filed a Statement of Candidacy with the Commission for California's 44"' district 23 House seat.^ He designated "Hall for Congress Exploratory Committee" as his principal 24 campaign committee ("Exploratory Committee").^ On January 14,2016, the Exploratory 25 Committee filed an amended Statement of Organization renaming itself Hall for Congress 26 ("Federal Committee"). ' See https://www.youtube.eom/channelAJCGRADiR02pCSeT4nj3afNUQ (Isadore Hall YouTube Channel). See http://www.latimes.eom/local/political/la-me-pc-isadore-hall-state-senate-seat-20141209-story.html. ^ See http://docquery.fec.gov/cgi-bin/fecimg?_15950831939+0 (Hail Statement of Candidacy). See id. MUR 6957 (Isadore Hall III, et a/.) Factual and Legal Analysis Page 2 of 8 1; The Complaint alleges that Hall controls a California ballot measure, committee that 2 accepted a $4,100 corporate contribution from Anheuser Busch Companies, Inc., on March 2, 3 2015, in violation of 52 U.S.C. § 30125(e)(1)(B).'' The Complaint further alleges that two April 4 2015 contributions to the Ballot Measure Committee — $3,500 from Viejas Tribal Government 5 and $1,000 from Port PAC USA — also may violate the Act.® 6 The Response, filed in October 2015, acknowledges that Hall controls the Ballot Measure 7 Committee but denies that he violated the Act because Hall is not a federal candidate and instead 8 is merely "exploring" running for the House.® The Response explains that consistent with his 9 exploratory phase. Hall maintains two campaign committees for the 2016 election, one federal 10 and one state.^ The Federal Committee "was [initially] established as an 'Exploratory 11 Committee' and is so named" because Hall has not decided which office he will seek.® The 12 Response also asserts that Hall will not be a candidate for either office until he decides and "files 13 nomination papers," which will not occur until early 2016.' The Response reasons that because "!• Compl. at3-4. Id. at 4. ' Resp. at 1. ^ Resp. at I. David Gould, the treasurer of Hall's federal and ballot measure committees, and Hall appear to have filed a Joint response. ' Id. The Commission's records show that Hall's Federal Committee has been in existence since June 20, 2011. The original Statement of Organization identified Hall as a candidate for California's 33"' District House seat. See Committee Statement of Organization. (Hall also filed a Statement of Candidacy in 2011 for the 35"* House District in California.) At the end of both 2012 and 2014, Hall's Federal Committee reported about $67,000 in cash on hand. It appears to have collected most of its contributions shortly after registering in 2011 and then made some expenditures and contributions to other committees. Its reports show minimal activity in the 2014 election cycle. ' Resp. at 1-. MUR 6957 (Isadore Hall III, et al.) Factual and Legal Analysis Page 3 of 8 1 Hall is not a federal candidate, neither Hall nor the Ballot Measure Committee has violated the 2 Act.'° 3 A. Hall Became a Candidate in February 2015 but Timely Registered as a 4 Candidate and Disclosed His Committee's Financial Activity 5 6 An individual becomes a candidate for federal office when he or she is deemed to have 7 decided to run for office and receives or has received contributions or makes or has made 8 expenditures in excess of $5,000.'' Funds that were raised or spent to "test the waters" apply to 9 the $5,000 threshold for qualifying as a candidate, and the candidate must register with the 10 Commission.'^ After an individual reaches candidate status, all reportable amounts from the 1 11 beginning of the testing-the-waters period must be disclosed on the first financial disclosure 4 12 report filed by the candidate's committee, even if the funds were received or expended prior to 13 the current reporting period. The regulations define testing the waters activities as those 14 activities "conducted to determine whether an individual should become a candidate" and 15 include, but are not limited to, polling, telephone calls, and travel.'^ Once an individual meets 16 the $5,000 threshold, he or she has 15 days to designate a principal campaign committee by 17 filing a Statement of Candidacy.''' The principal campaign committee must then file a Statement Id. Alternatively, the Response suggests that if the Commission decides that the Act applies to the Ballot Measure Committee, Hall and the Ballot Measure Committee "will immediately stop soliciting and accepting any funds that are not fully permissible under the ..

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