By James Harrison
The embattled Sixth District GOP convention was hit with an FEC complaint this week [1] – and more may be on the way.
The FEC complaint [1] accused Sixth District Chairman Scott Sayre of putting House candidate Cynthia Dunbar on his company’s payroll [2] last year while she was planning her race for Congress, an action that is against federal law and raises serious ethical questions.
Any future FEC complaints could possibly concern the mess in the Sixth District GOP’s bank accounts and finance filings.
The problem? The committee, under the leadership of Chairman Scott Sayre, appears to be violating federal campaign finance law by running all contributions and expenses through the party’s state account [3]. That includes every filing fee paid [4] by every candidate for Congress running in the district’s May 19 nominating convention, which reported on the state account’s first quarter filing [5], along with federal expenses related to the race [6].
In fact, the Sixth District GOP reported not one single dime of contributions or expenses through its federal account [7] in the entirety of 2017 and 2018.
Federal law requires political party committees to account for federal vs. non-federal activity and allocate expenses accordingly, ensuring that only federal money is used in federal races and all reporting requirements are followed.
Under federal law, a party’s convention or caucus is an “election” for federal purposes when it has the authority to select a party nominee for federal office. This point is abundantly clear, existing in the US Code [ 52 USC § 30101(1)(B) [8] ], the Code of Federal Regulations [ 11 CFR § 100.2(e) [9] ], and confirmed through numerous FEC advisory opinions [ e.g., AO 1992-25 [10] ].
Campaign finance rules are complex, but the FEC sums it up as follows [11]:
Any state, district or local party committee that finances activity in connection with federal elections must maintain a federal account. A committee that finances activity in connection with both federal and nonfederal elections can choose to:
- Maintain only a federal account;
- Maintain a federal account used exclusively for federal activity and a nonfederal account used for nonfederal activity; or
- Maintain a federal account, a nonfederal account and a Levin account used for certain FEA.
Since the convention attempts to influence the election of a candidate for federal office, and is not specifically exempted, the Sixth District GOP is obligated to follow all federal laws and regulations governing the receipt, expenditure, and disclosure of funds.
Beyond that, ongoing operations like websites and data work also constitute federal campaign activity which must be allocated and reported accordingly.
What does the FEC say about segregation between federal and state accounts [11]?
Federal accounts
A state or local party committee may choose to set up one or more federal bank accounts for all of its activity, both federal and nonfederal. All funds deposited into this account must comply with the limitations and prohibitions of the Act, regardless of whether the funds are used to pay for federal activity, nonfederal activity or FEA. Such an account cannot accept Levin funds. Additionally, all receipts and disbursements must be reported, including those that involve nonfederal activity and federal election activity. The committee’s nonfederal activity is subject to nonfederal law.
Nonfederal accounts
A committee may choose to set up both federal and nonfederal accounts. Again, only funds permissible under the Act may be deposited into the federal account. The committee must use the federal account—or an allocation account, as described—for all disbursements, contributions, expenditures or transfers in connection with any federal election.
Activity in the committee’s federal account ceased shortly after Scott Sayre took over as district chairman in 2016. No activity has been reported nor have the committee’s allocations been disclosed.
Before that, the Sixth District’s federal account had been in continuous use since the 1975-1976 cycle, back when Gerald Ford was President and compliance was time-consuming and largely done by hand.
Compliance does not appear to be the committee’s strong suit. The committee’s website, SixthDistrictGOP.org [12], displays no disclosure, federal or state, indicating who paid for and authorized the website and the materials within.
The online contribution form [13] lacks required federal disclosures, and appears to accept contributions of any amount or from corporate givers – a prohibited practice, if funds being raised for a federal election are being deposited into a federal account.
Is it possible this is all an honest mistake?
In short: no, it does not appear to be.
If checks from convention candidates were deposited in the wrong account, that mistake should have been noticed and corrected when the committee was filing its first quarter finance reports in April of 2018.
That filing [14], submitted on April 15, 2018, showed zero dollars in contributions, zero dollars in expenses, and the same $448 which has sat untouched in the bank since 2016.
At no time did anyone stop and notice the problem with filing an activity-free federal report [14] when the committee was actively planning a congressional convention, nor did anyone ask why federal filing fees were being reported on the first quarter filing with the state [5].
The Sixth District GOP did not forget about one of its accounts, either. Rather, the committee has filed federal [15] and state [3] quarterly reports on time, every quarter, for both accounts. Each of those federal reports showed the same $448.00 that has remained in the account since the end of 2016.
This isn’t the first time the district’s finances have come under scrutiny. Two weeks ago, local party leaders and activists responded with outrage when it was reported that Cynthia Dunbar paid nearly half of the district GOP’s entire 2017 budget as speaking fees [16] to personal friends and campaign endorsers, under Scott Sayre’s watch.
As for a third FEC complaint? Dunbar’s campaign was accused of having delegate lists more than a month before her competitors [17] received them. If that turns out to be the case, it would be another clear-cut violation [18] as well as another unreported in-kind contribution.