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1 FEDERAL ELECTION COMMISSION 2 999 E Street, N.W. 3 Washington, D.C. 20463 4 S FIRST GENERAL COUNSEL'S REPORT 6 7 MUR5977 8 9 DATE COMPLAINT FILED: Feb. 25, 2008 10 DATE OF NOTIFICATION: Mar. 3, 2008 ™ 11 DATE OF LAST RESPONSE: Mar. 24, 2008 O 12 DATE ACTIVATED: Apr. 22, 2008 U> {3 sr I3 I tf 14 STATUTE OF LIMITATIONS: Feb. 15, 2013 oj 15 ** 16 COMPLAINANTS: Emcrylde Bradley J. Edward Lupton 18 MischeleSeng 19 20 RESPONDENTS: dwhiip Project 21 Roger V.Salazar 22 23 MUR6005 24 25 DATE COMPLAINT FILED: Apr. 30, 2008 26 DATE OF NOTIFICATION: May 7, 2008 27 DATE OF LAST RESPONSE: Jun. 13, 2008 28 DATE ACTIVATED: Jim. 24, 2008 29 I 30 STATUTE OF LIMITATIONS: Feb. 15,2013 31 32 COMPLAINANT: Obama for America 33 34 RESPONDENTS: American Leadership Project 35 Roger V.Salazar 36 Jason Kinney 37 Michele Dunkerly 38 Jay Eisenhofer 39 PaulGoldenberg 40 Monica Graham 41 Stephen P. Kennedy 42 William Titleman 43 Richard Ziman 44 Mattis Goldman 45 Paul Rivera 46 Erick Mullen MURs 5977 md 6005 Pint Qenenl Counsel's Report

2 RELEVANT STATUTES: 2U.S.C.|431(4XA) 3 2U.S.C.§431(8XA) 4 2U.S.C.§431(9)(A) 5 2U.S.C.§433 6 2U.S.C.§434 7 2U.S.C.§441a 8 2U.S.C.§441b Kll 9 110F.R.§100.22(aHb) O 10 11 C.F.R.§ 100.57 11C.F.R.§ 114.15 ** 12 ™ 13

1 In response to the complaints, ALP asserts that it is not a political oommittee because it 2 does not meet the "major purpose" test and has not received contributions or made expenditures 3 in excess of $1,000. ALP further argues that it operates independently fix>m any federal, state or 4 local candidate, does not make any contributions to candidates, does not coordinate with any 5 candidates, and does not engage in express advocacy or its equivalent. According to ALP, its <3T O £ fundraising efforts did not implicate 11 C.F.R. § 100.57 because ALP mentioned issues it sought «jr (4 7 to discuss in communications but did not mention any federal candidate. ALP further states that

11 § 100.57 would be unconstitutional as applied here in light ofFEC v. Wisconsin Sight to life,

12 Inc., 127 S.Ct 2652 (2007), because ALP's communications contain neither express advocacy

13 nor the functional equivalent thereof and are, therefore, not expenditures under the Act. Hence,

14 funds received to support those communications, according to ALP, cannot convert ALP into a

15 political committee.

16 Based on available information discussed below, we reconmiend that the Commission

17 find reason to believe that American Leadership Project violated 2 U.S.C. §§ 433,434,441b, and 18 441a([) by: 1) foiling to register as a political committee with the Commission; 2) felling to 19 disclose contributions and expenditures to the public in reports filed with the Commission; 20 3) knowingly accepting contributions .in excess of $5,000; and 4) knowingly accepting 21 contributions from prohibited sources. We also recommend that the Commission take no action 22 at this time as to the directors, officers, fundraisers, and donors of ALP. MURs 5977 and 6005 4 Pint Genenl Couniel'i Report

1 n. FACTUAL SUMMARY 2 ALP was framed on February 15,2008 and is baaed in San Francisco, California. ALP 3 files reports with the Internal Revenue Service under Section 527 of the Internal Revenue Code. 4 26 U.S.C. § 527. It has not registered with the Commission as a political committee. On its IRS 5 Form 8871, the purpose of the organization is listed as "Section 527 political committee." Lrt {? 6 According to one media account, the following people run ALP: sta|Salazar IXC, fomier assistant press secretary in the CUnton ™ g White House tram 1994-1999; national spokesman for then-Senator ' 2004 5J 9 presidential race; national spokesman and deputy prass secretary for the 2000 presidential Q 10 campaign of ; and press secretary for former California Governor Gray Davis1 Q 11 successful re-election. •H 12 • Jason Kirtney of California Strategies, LLC, a fonner senior communications advisor and 13 chief speechwriter to fonner Governor Gray Davis. 14 • Mattis Goldman of SeaChange Media, a former ad maker for Los Angeles Mayor 15 Antonio Villanigosa, U.S. Senator Sherrod Brown, and Democratic Congressional 16 Campaign Committee Chairman Representative Chris Van Hollen. 17 • Brick Mullen, a political consultant with Capitol Hill experience who has worked for the 18 presidential campaigns of General (Ret) in 2004 and fonner Senator Bill 19 Bradley, in 2000, as well as the successful 1998 Senate run of Charles Schumer. 20 • Paul Rivera, founder of Britton Marcy, LLC, senior political adviser for the 2004 21 Kerry-Edwards campaign, and a Clinton-Gore White House advance staffer from 1994 22 through 1999.

23 Posting of Jake Tapper to ABC News Blog, New Pro-Clinton 527 to Ding Obama in Ohio, 24 http://blogs.abcnews.corn/^Uticalpunch/2008/ (Feb. 20,2008,09:33 25 EST). 26 ALP was formed ten days after , February 5,2008, when the greatest 27 number of states held primary elections to select delegates to the national conventions, and just 28 three days after the "Potomac Primary," when , Washington, D.C. and 29 residents cast their ballots. The Potomac Primary reportedly was considered by some as a MUR» 5977 md 6005 S Pint General Counfel'i Report

1 turning point in the Democratic primary race because Senator Obama won by significant margins 2 and,fo rth e first time, took the lead in pledged delegates over Senator Clinton.1 3 On its IRS Form 8872, ALP reported contributions of over $3.4 million, with over $2.5 4 million of that amount from labor umons, and expenditures of over $2.6 milUon durmg the 5 period of February 15,2008 to June 30,2008. Some of the individual contributions exceeded the & Jjj 6 contribution limitations applicable to political committees under the Act. *ar l£ 7 ATP mpttrtedly targeted Hnnnra whn had already Amated the 1»ga1 mairimHtn to

yo"»^fc«« Weismn, Shifting Loyalties: ^r^Vt in diir***?! CwiTMfln Miy Murk • Toming Point. http://www.wi8hiiigtD^ Feb. 13. 2008; Brim Knowhon, Patrick Hetty md JeflfZeleny, Obarm's victories draw inore voter gioapsu Democrats waver, http://www.ihLcom/*rtkles^^ Feb. 13, 2008. 2 Poiting of Lalie Wayne to The Caucus, the N.Y. Times Po^dc^BVtg. Ointan Frimds to Mown Ohio Ad Campaign, http://thecaucus.bk)gs.nytime«.coni/2008/02/21/clinto^ (Feb. 21, 2008, 12:57 EST); Muc Ambinden A Reported Blog on PoHtica, Atlintic.com, Pro-Clinton 527 Prcpans For Ohio, PA and Texas, bitp^/nMTrjmHndcr.thMtlantic.cc^archives/2008A)2/r«^ 527_preparcs fix oLphp (Feb. 20, 2008. 08:20 EST). 3 Joah Israel, 's Double Donors: Largest Donors to Pro-Clinton 527 Have Something in Common, Center for Public Integrity, The Baying of the President 2008, Mw. 5, 2008, avoi/aW« or hjivuMii i*»im*iv

4Mtrc Ambinder: A Reported Blog on Politics, Afltntic.com, Pro-Qiiitoii 527 Prepares For Ohio, PA and Texas, httpV/ininainbiiKier.thffitlintir.(xmi/aichives^ (Feb. 20, 2008, 08:20 EST). MURs 5977 and 6005 6 Pint General Counsel's Report

1 spent over K2 million on broadcast ads that referred to Senator Hil^ 2 BarackObama and targeted the relevant electorate.5 ALP's website contains media player clips

3 of ATP'g telaviriom apufl radio ads, flM of wiii

4 Many of these ads ran in Oregon, Pennsylvania, Texas, Ohio and Indiana, just prior to the 5 Democratic primaries in (hose states.6 Specifically, two ALP ads, "Blueprint" and "Count On," IPs. Q ig 6 mention Hillary Clinton and her record on middle-class economic issues and health care. "Count

5 The $43 million in disbursements disclosed in ALP*! electioneering communication reports is significantly larger dm the mount of expenditures disclosed in its IRS ^"^^gp- The discrepancy in the amounts may be explained by the Afferent icpoit^nqaiictaeatM of ^ IRS i^^CowauiUO^ For example, with respect to the contributions received, ALP may hive received a luge number of small 6V>natk)ns that did not exceed the IRS* S200itennzation ttirffthflMt sud ue IRS does not require the disclosure of luutennzed receipts. ' Transcripts of the television and radio aoVertisements are appended hereto si Attachment 1