I RECEIVEG FEC YAIL OFER!~.TlO!!S CEHl EH RYAN,PHILLIPS, UTRECHT & MACKINNON* AlTORNEYS AT LAW , * Nonlawyer Partner 200b JUL 3 I P 11: 48 1 133 Connecticut Avenue, N.W. Suite 300 Washington, D.C. 20036 (202) 293-1 177 Facsimile (202) 293-341 1 July 3 1, 2006 Lawrence H. Norton, Esq. General Counsel Federal Election Commission 999 E Street, N.W. Washington, D.C. 20463 Re: MUR5761 Madrid for Congress Dear Mr. Norton: This response to the above-referenced complaint is filed on behalf of Patricia ‘ Madrid, Madrid for Congress and Rita Longino as treasurer (collectively “Madrid for Congress”), and Justice for America, L. Michael Messina as president (collectively “Justice for America”). The complaint was filed by Attorney General Madrid’s opponent in the general election race for Congress in the first district in New Mexico purely for publicity and political gain. It is based solely on speculation and innuendo and should be dismissed immediately by the Federal Election Commission (“Commission” or “FEC”) for the reasons set forth more fwlly below. While the complaint is somewhat unclear, it appears to be arguing that expenditures made by the non-federal New Mexico political committee, Justice for America (“JFA”) in the year prior to Attorney General Madrid’s federal candidacy were somehow related to her federal campaign. Other than pure speculation, the complaint does not provide any support for such an allegation. The other allegation seems to be that the existence of the dormant New Mexico committee somehow results in a violation of the soft money ban applicable to federal candidates, even though the disclosure reports filed by JFA, which are on the public record and attached to the complaint, clearly show that JFA ceased activity prior to the Attorney General’s federal candidacy. 1 1. The Complaint Should Be Dismissed Because It Does Not Meet The Minimum Requirements For A Complaint Under The FEC Regulations Under the Act and Commission regulations, a complaint, to be sufficient, valid and appropriate for filing and consideration by the Commission, must conform to certain provisions set forth at 11 C.F.R. 11 1.4(d). Included in those minimum provisions are the following requirements: (2) Statements which are not based upon personal knowledge should be accompanied by an identification of the source of information which gives rise to the complainants belief in the truth of such statements; (3) The complaint should contain a clear and concise recitation of the facts which describe a violation of a statute or regulation er which the Commission has jurisdiction; and (4) The complaint should be accompanied by any documentation supporting the facts alleged if such documentation is known of, or available to, the complainant. Quite simply, even a cursory reading of the complaint reveals that it does not meet the very low threshold set forth in the Commission’s regulations for supporting a valid complaint. Merely swearing to speculative and unsubstantiated words not supported by facts or personal knowledge should not give rise to Commission consideration of a matter under review. First, the primary information provided in support of the complaint is derived from the public filings of JFA. Contrary to the complaints’ suggestion that the filings support a violation of the Act, the filings themselves demonstrate that Justice for America ceased activity prior to the time that the Attorney General became a federal candidate. Page 3 of the complaint enumerates various expenditures made by JFA - some more than a year prior to her federal candidacy - and poses unsupported questions which illustrate clearly the purely speculative nature of the complaint and its insufficiency under the FEC regulations cited above. Despite the fact that these unsupported questions are not a sufficient basis for a complaint, each disbursement by JFA mentioned in the complaint is addressed below. Second, the newspaper story attached to the complaint does not contain any recitation of facts that describe a violation of a statute or regulation over which the Commission has jurisdiction. If anything, the news account supports the conclusion that JFA became dormant when Attorney General Madrid became a candidate. The lengthy discussion in the article about the identity of contributors to JFA is wholly irrelevant and does not even address any possible violation of a statute under the Commission’s jurisdiction. 2 Third, the reimbursement fiom the Attorney General’s federal committee to her state PAC, rather than supporting any violation of the law, demonstrates that the Attorney General’s federal committee, Madrid for Congress (“MFC”), was scrupulous in making sure that there could be no possible use of soft money in connection with her federal campaign. In sum, the Complaint is based on pure speculation and the documents attached to it do not support a single violation of the Act. For this reason, the Commission should dismiss it immediately. 2. The Expenditures of JFA Noted In The Complaint Were Unrelated To Anv Federal Campaign a. Justice for America did not reimburse Attorney General Madrid for any expenses after she declared her candidacy for Federal office. The claim that JFA reimbursed the Attorney General after she filed her Statement of Candidacy is patently false. As the attached reports clearly indicate, JFA made only a handful of disbursements after October 18,2005, and not one is a reimbursement to the Attorney General? All JFA reimbursements to the Attorney General prior to October 18,2005 were for legitimate expenses incurred on behalf of the state PAC. b. Madrid for Congress did not benefit from Justice for America’s previous relationship with a particular consulting firm. All disbursements fiom JFA to Lake, Snell, Perry & Mermin (“Lake Snell”) were for JFA activities only; MFC did not benefit from JFA’s relationship with this firm in any way. In fact, JFA made only four payments to this firm.3 On June 29,2005, JFA issued a check in the amount of $7,560.63 to Lake Snell for consulting services for the state PAC. On September 13,2005, JFA issued a check to Lake Snell for $7,000 for survey expenses. During the fall of 2005, the Attorney General considered running for various other state offices, and commissioned a poll to test her viability in such races. The poll did not ask any questions that would benefit her as a candidate in any Federal campaign. The Attorney General did not consider running for Congress until shortly before she filed ~ On December 27,2005, Madrid for Congress reimbursed Justice for America $50.00 for a donor list. The Madrid for Congress pre-primary report also shows a debt for $80.00 for its purchase of a single photograph fkom JFA. Please note that the attached invoice includes the cost of nine photographs. See Attachment A. * See Attachments B and C. See Attachment D. 3 her Statement of Candidacy on October 18,2005. Both the invoice and the actual questions of the poll are included in Attachment D. On September 13,2005, JFA issued a $2,550.07 check to Lake Snell for travel expenses incurred surrounding the Justice for America forum on August 13,2005. Finally, JFA received a late invoice for conference calls and issued a check for $49.64 on January 17,2006. This invoice has not yet been located, but all indications are that this expense was incurred before October 18,2005. In any event, this is an inconsequential amount. All of the above facts and attachments prove that JFA did not make any payment to Lake Snell that benefited MFC. c. Justice for America ceased active operations in October of 2005. To avoid any suggestion of impropriety, JFA ceased active operations immediately after the Attorney General filed her Statement of Candidacy. In fact, JFA made only five disbursements after October 18,2005, none of which benefited MFC! One of these payments has been included above, and the remaining four are discussed below. On October 20,2005, JFA made two payments to Wells Fargo New Mexico. The first, in the amount of $29.00, was a fee for stop payment on a check written before October 18*. The second payment was for state sales tax in the amount of $1.98. JFA made two payments for one Integrity Network Systems invoice. These payments were for computer services, one on December 5,2005 for $500, and one on January 1/17/06 for the remaining $33.75. The complaint also specifically mentions a reimbursement to JFA on April 2 1, 2006, and suggests this as proof that JFA did not become dormant in October of 2005. However, as their May 8,2006 report reflects (included as Attachment B), this is a reimbursement fiom Integrity Network Systems after an accounting error resulted in JFA over-paying an invoice. The rehd check is included in Attachment E. 3. The Attorney General Has Not Been Involved In Anv Way With JFA Since Her Federal Candidacv Attorney General Madrid became a federal candidate on October 18,2005. Since that time she has had no involvement in JFA either in soliciting, receiving, directing, transferring, spending or disbursing of its hds. The simple assertion that her prior relationship with JFA somehow constitutes a violation of the soft money ban when JFA has been totally inactive is utterly without legal basis. 4 4. The Role Of The Attornev General’s Husband Does Not Violate the Soft Monev Ban The allegation that Michael Messina’s role in the dormant JFA somehow violates the soft money ban is wholly unsupported by the facts. First, the soft money ban only prohibits the solicitation, receipt, direction, transfer, spending or disbursing of funds in connection with an election for Federal office.