‘Ornice oF THe Seenety OF SATE Execs Dson JEANNE P, ATKINS sina wiams ‘Sten oF TATE Dawson ROBERT TAYLOR asc SM Derury Secret oF Stare “su Oe on (03 985.518, as 08) 373.2436 August 21,2015 Senator Brian Boquist 17080 Butler Hill Rd Dallas OR 97338, FINAL DETERMINATION: Case No. 14-CRE-10 Dear Senator Boquist: This is the final determination letter for the initial complaint filed on May 2, 2014, and related follow- up correspondence in which you alleged possible violations of Election Law by several different individuals and political committees: Mike Nearman, Nearman4Oregon, Oregon Right to Life (ORTL) PAC, Oregon Family Council (OFC) PAC and Taxpayer Defense Project PAC (TDP). The complaints included a combination of alleged criminal and civil violations including campaign finance transaction reporting insufficiencies, failure to file campaign finance transactions, false swearing on election documents, false statements in political publications, illegal use of non-profit postal permit by a political committee, false reporting on forms filed with the United States Internal Revenue Service and Oregon Department of Justice Charitable Activities Section, fallure to register with the Oregon Department of Justice Charitable Activities, money laundering and racketeering, destruction of evidence, threats and intimidation, and violating United States federal securities and defense laws." The Elections Division has the authority to investigate civil complaints related to Election Law. if the Elections Division determines that there is sufficient evidence to open a criminal investigation relating ‘to an alleged violation of Election Law under ORS 260.993, those complaints are referred to the Oregon Department of Justice (ODOJ) for investigation.” ‘The Elections Division began investigating the alleged civil violations in May of 2014. You expressed concern that this civil investigation could potentially compromise any criminal investigation. The Elections Division then referred the complaint to the ODO) on August 8, 2014 and placed its civil investigation on hold, pending the ODO) investigation. The ODO! on or about November 19, 2014, In addition, complaints were filed against the Polk County Republican Central Committee (PCRCC) by Mr. Jonathan ‘Thompson and others, including a separate letter of complaint to the Speaker of the House and a complaint filed with the ‘Oregon Ethics Commission. We have also received correspondence from you related to these complaints; the issues in the ‘Thompson letter for which the Elections Division has regulatory authority will be addressed in a separate letter. The Ethics ‘complaint an¢ letter to the Speaker of the House are not within the jurisdiction of the Elections Division. 2 ORS 260.993(2)~ (4) sets forth which prohibited activities under Election law are subject to possible criminal prosecution. ‘The only allegation as to criminal elections activity alleged in the complaint is a false statement, oath or affidavit described in ORS 260.715.Final Determination 14-CBE-10 Page 2 of 16 informed the Elections Division that it had not found sufficient evidence of any criminal violations. The Elections Division resumed its civil investigation. Based on the information submitted by all parties, the Elections Division has determined that there were violations of ORS 260.057 related to incorrect dates reported for account payable transactions by Nearman4Oregon and OFC PAC and inaccurate contributor reporting by ORTL. The Elections Di will notify OFC PAC and Nearman4Oregon with separate letters directing them to amend the transactions accordingly, and will subsequently issue proposed penalty notices. This letter sets forth each allegation or issue raised in the complaint pertaining only to ORS Chapters 246 — 260 and the Elections Division’s determination as to whether or not there are any violations of Election Law. Such complaints are taken very seriously because of the importance of accurate and timely campaign finance reporting. The allegations regarding possible violations of other laws are outside of the Elections Division’s statutory authority to address.* Representative Mike Nearman/Nearman4Oregon The Elections Division sent a letter to Representative Nearman and his committee treasurer Lori Piercy ‘on May 5, 2014, pursuant to its regular procedures. The letter informed them that a complaint had been filed; a copy of the complaint was included with the letter. The letter requested a response to the allegations in the complaint. The Elections Division received a response from Representative Nearman and Ms. Piercy on May 21, 2014. A follow up inquiry letter was mailed on December 12, 2014; a response to the letter was received from Matthew D. Lowe, legal counsel representing Representative Nearman, on January 20, 2015. The Elections Division finds as follows: Nearman — Allegation #1 - Request to Withhold the Certificate of Nomination under ORS 260.245 You requested that the Elections Division refuse to certify Representative Nearman’s nomination as the Republican candidate for State Representative in District 23. Determination: Pursuant to ORS 260.245, The Secretary of State, county clerk or chief city elections officer may not grant a certificate of election or certificate of nomination to any candidate until the candidate has filed the statements relating to the election that the candidate is required to file under ORS 260.057. Asa result of the investigation, ORTTL filed late transactions in February and March of 2015. The Elections Division issued a Notice of Proposed Civil Penalty for cases 2015-0615 (Iate filings in February ~ penalty amount $361.61) and 2015-0683, {late filings in March ~ penalty amount $627.38). The Elections Division received payment for case 2015-0615 on June 26, 2015, and on July 29, 2015, for case 2015-0683. ‘The allegations outside of Oregon Election Law included illegal use of a United States Postal Service non-profit postal permit, false reporting to the United States Internal Revenue Service and the Oregon Department of Justice Charitable Activities Section, failure to register with the Oregon Department of Justice Charitable Activities Section, money laundering ‘and racketeering, destruction of evidence, threat and intimidation and violations of United States federal securities and defense laws.Final Determination 14-C8E-10 Page 3 of 16 ‘There is no evidence to support that statements have not been filed. According to the Ele Division’s records, Representative Nearman has filed his required statements. There is no justification to withhold the certificate under ORS 260.245. Since Representative Nearman filed campaign finance statements, the request to withhold Representative Nearman’s certificate of nomination was denied. Nearman - Allegation #2: Employer Information Reported on Representative Mike Ne s ‘Statement of Organization is Inaccurate Representative Nearman’s Statement of Organization (SOO) lists Supra Products as his employer; the complaint asserted that his employer is UTC Fire & Security Americans Corporation (UTC). Determination: Representative Nearman's response explained that he has worked for Supra Products for ten years, it was previously a division of General Electric, and it is currently a division of United Technologies. The Elections Division executed a simple web search for Supra Products which generated several links to the Salem Oregon Supra Products website {http://www.suprasystems.com/OurCompany/Pages/OurCompany.aspx), which is identified in the text as the “Supra Headquarters.” Further, the website states that Supra Products is part of UTC Building & Industrial Systems, a unit or subsidiary of UTC. The Supra Products division makes certain products branded as “Supra” products. There is nothing in Election Law which requires an individual to report the name of the company that owns or controls the unit or division where the individual works. By identifying his employer as Supra Products, Representative Nearman distinguished the business division for which he worked and the commercial products of that division, thereby reasonably advising the public of his employer. Therefore, the Elections Division determines that there is insufficient evidence that Representative Nearman knowingly made a false statement about his employer on his SOO and filing of candidacy, Nearman - Allegation #3: Educational Background Provided in Representative Nearman’s 2014 Primary Election Filing of Candidacy and Voter Pamphlet Statement is Inaccurate Representative Nearman’s 2014 Primary Election filing of candidacy and voters’ pamphlet statement disclosed that he has a “BS degree” from Marquette University, and that Marquette University does not list any “available” Bachelor of Arts degrees in Liberal Arts.” Determination: Under ORS 260.715(1), the following conduct is prohibited: (1) A person may not knowingly make a false statement, oath or affidavit when a statement, oath or affidavit is required under the election laws. In order to find that the individual engaged in prohibited conduct under ORS 260.715(1), the statement in question cannot be interpreted as an opinion or as being a true statement. In addition, the speaker must have had actual knowledge that the statement was false. Representative Nearman’s voter pamphlet statement and candidacy filing disclosed that he received a BA in Liberal Arts from 5 The complaint erroneously stated that Representative Nearman listed a “BS degree” whereas he really listed a “BA” degree.Final Determination 14-CBE-10 Poge 4 of 16 Marquette. Representative Nearman submitted a copy of the diploma issued by Marquette University awarding a degree of Bachelor of Arts from the College of Arts and Sciences. We see no distinction between “BA in Liberal Arts” versus “Bachelor of Arts from the College of Arts and Sciences.” After a review of the information submitted, the Elections Division determines that there is insut evidence to indicate a violation of ORS 260.715(1). Nearman’s Nearman - Allegation #4: ORESTAR Financial Transactions Filed by Representati Committee May be Inaccurate The complaint stated that it is “virtually unheard of for a political committee to get credit” as it pertains to account payable transactions reported by Representative Nearman’s committee. It was also alleged that the transaction dates reported for three account payable transactions (#1689232, #1689233 and #1689236) should have been dated earlier by a few days because the mail pieces were received prior to the reported account payable transaction dates. Determination: Under ORS 260.057(2), “a candidate or political committee shall file a statement of contributions received and expenditures * * *.” The definition of expenditure in ORS 260.005(8) includes “the incurring or repayment of indebtedness or obligation by or on behalf of a candidate...” It is permissible under Election Law for a committee to incur bills for services or goods ordered. The dates reported for the three account payable transactions called into question concur with the dates on the invoices received from Gateway Communications, Inc. (GCI). The 2014 Campaign Finance ‘Manual on page 40 {adopted by Oregon Administrative Rule 165-012-0005) provides that the date for reporting an account payable is the date an order is placed for goods or services. Representative Nearman's Committee Treasurer Lori Piercy stated in her response to the complaint that GCI informed her that “the order, processing, and invoice date are usually the same date or one or two days earlier.” The dates reported for the transactions were March 31 (#1689232) and April 2 (#1689233 and #1689236). Ms. Piercy also points out that those three payables were paid on April 13, 2014, so they were not required to be disclosed under ORS 260.083(2).° Even if Ms. Piercy reported transaction dates two to three days earlier, the transactions were timely filed.” After a review of the information submitted, the Elections Division determines there is insufficient evidence to indicate a violation of Election Law. § ORS 260.0832) states in part that an expenditure shall be reported as an account payable only if the expenditure is not paid by the deadline for filing the account payable transaction under ORS 260.057. 7 For the 2024 Primary Election Ifthe transaction occurs March 8, 2014 — April 6, 2024, the transaction was required to be filed by April 14, 2014. See ORS 260.057(3)(c) and the Schedule of Transaction Deadlines on page 18 of the 2014 Campaign Finance Manual.Final Determination 14-C&E-10 Page 5 of 16 Nearman - Allegation #5: Contributor's Employer Information Disclosed is Inaccurate Nearman4Oregon reported a contributor’s employer as Supra Products. Determination: ‘As determined in Allegation #2 any portion of the complaint as it relates to a contributor’s employer identified as Supra Products is not a violation of Election Law based on the fact that there is nothing in Election Law which requires disclosing the company name that owns or controls a unit, division or subsidiary of the company. Nearman - Allegation #6: Contributions Reported by Nearman4Or: The complaint raised concerns regarding the reporting of contributions by Representative Nearman. Specifically, ORTL PAC and OFC PAC each gave a $15,000 contribution to his campalgn committee. They also provided Representative Nearman a statement of endorsement which was util his voter pamphlet statement. Determination: ‘The complaint did not specify a violation of Election Law regarding these two transactions. The Elections Division reviewed the expenditures reported by the two PACs and found that each PAC reported the expenditures to Nearman4Oregon on April 3 and 4; Representative Nearman reported receiving the contributions on April 7 and 8". Therefore, there is insufficient evidence to indicate a violation of Election Law related to these transactions.” Nearman - Allegation #7: Nearman4Oregon Has More Than One Dedicated Bank Account The complaint alleged the committee may be using two bank accounts because a transaction reporting a partial refund of a contribution (Steven Corbin, $100, transaction #1695588) reported check number #1026 yet there were no other checks reported close to that number sequence. Determination: Ms. Piercy stated that there is only one bank account for the committee, She was in possession of checks numbered 1001-1025 and Representative Nearman had checks numbered 1026-1050; she also stated that Representative Nearman wrote check #1026 to Mr. Corbin. Mr. Corbin gave a $200 contribution to the committee; $100 was refunded to Mr. Corbin on April 9, 2014. There is nothing in Election Law which requires checks to be used or reported in sequence order, nor is there anything that prohibits returning a portion of a contribution. Therefore, there is insufficient ‘evidence to indicate a violation of Election Law related to the assertion that the committee has more than one dedicated bank account. Nearman - Allegation #8: Was Expenditure Made to Pay for Previously Reported Account Payables ‘On April 13, 2014, Representative Nearman’s committee reported paying GCI $11,022.45 with check #1001. 8 The complaint may have attempted to infer that Oregon Right to Life PAC and Oregon Family Council PAC could not have made independent expenditures in support of Representative Nearman because they provided statement of endorsements for inclusion in Representative Nearman’s voter pamphlet statement. However, there is nothing in ORS 260.044 that prohibits a PAC from making a contribution to a committee and also engaging in independent expenditures.Final Determination M-C&E-10 Page 6 of 16 Determination: Ms, Piercy explained that this expenditure paid four previously reported account payable transactions {transactions #1689231, #1689232, #1689233 and #1689236). There is nothing in Election Law which requires a committee to write a separate check for each reported payable. Therefore, there is insufficient evidence to indicate a violation of Election Law. Nearman - Allegation #9: Teresa Harke Account Payable On April 15, 2014, Representative Nearman’s committee reported an $800.00 account payable to Teresa Harke (transaction #1701390), the Communications Director for Oregon Family Council. Determination: The complaint did not provide evidence or allege a specific violation of Election Law related to this, transaction. ‘Nearman - Allegation #10: Check #1004 Not Reported On April 17, 2014, check #1005 was reported as making payment ($1,050.00) to GCI (transaction #1701392) and also reported an expenditure to GCI with check #1006 (transaction #1707941 in the amount of $850.00); check #1004 was never reported by the committee. Determination: Ms. Piercy stated in her response that check #1004 was not reported because it was voided. Page 43 of the 2014 Campaign Finance Manual instructs a committee not to report voided check numbers. Therefore, there is insufficient evidence to indicate a violation of Election Law related to check #1004, Nearman - Allegation #11: Failure to Report Account Payable On April 24, 2014, Representative Nearman’s committee reported paying GCI $4,836.70 with check #1007 (transaction #1707941). The complaint stated that this was for a “one page Blair fundraiser report letter” which was dated April 18 and received on April 19; the complaint asserts that the committee incurred an account payable that should have been reported. Determination ‘A copy of the invoice and the mail piece associated with the expenditure was submitted in response to the complaint. This transaction was for a 6x 11 postcard with a return address listing The Hoffman Research Group. The invoice from GCI (#14239) was received on April 24; the cash expenditure transaction to pay the bill was reported on that same date. Even if the order for the postcard was placed on April 17, because the committee paid the bill on April 24”it was not required to report the payable. Therefore, there is insufficient evidence to indicate a violation of Election Law related to this transaction. Nearman ‘ion #12: Failure to Report Account Payable On April 24, 2014, Representative Nearman’s committee reported paying GCI $5,153.47 for the “Moon is Made of Green’ letter with check #1008 (transaction #1707942). The complaint stated that the mail piece was received on April 23, 2014, and asserted that the committee incurred an account payable that should have been reported.Final Determination 14-C&E-10 Page 7 of 16 Determination: The invoice from GCI (#14238) was received on April 24 and the cash expenditure was also reported on that same date. As stated previously, even if the order for the letter was placed as early as April 17, because the expenditure to pay the “payable” was made prior to the due date for reporting the payable, the committee was not obligated to report the payable. Therefore, there is insufficient evidence to indicate a violation of Election Law related to this transaction. Nearman - Allegation #13: int Payable to GCI ‘On April 28, 2014, Representative Nearman’s committee reported an account payable to GCI. $4,836.71 (transaction #1714620). Determination: The complaint did not provide evidence or allege a specific violation of Election Law related to this transaction, Nearman ~ Allegation #14: Check #1009 Reported for Two Transactions On April 29, 2014, Representative Nearman’s committee reported two transactions paying GCI $659.31 {transaction #1711765) and $3,616.29 (transaction #1711763); when these original transactions were filed, both reported the check number as 1009. Determination: Ms. Piercy’s response to the complaint explained that she often uses “more than one ORESTAR entry to report one check if it covers more than one item.” She further explains that both of the transactions were subsequently amended (transaction #1714618 and #1714619) changing the transaction subtype from cash expenditure to account payable to keep more cash on hand. There is nothing in Election Law which prohibits a committee from reporting the same check number on multiple transactions. Therefore, there is insufficient evidence to indicate a violation of Election Law related to these transactions. Nearman ~ Allegation #15: Postcard on Senior Healthcare ‘On May 1, 2015, a 6 x 11 glossy Nearman4Oregon postcard on senior healthcare was received in House District 23. Determination: The complaint did not provide evidence or allege a specific violation of Election Law related to this transaction. Nearman - Allegation #16: Failure to File Transaction for Survey Postcard On April 25, 2014, a polling/survey post card conducting a two question survey about two House District 23 candidates (Nearman and Thompson) was received; the return address indicated it was from GCI Research. GCI Research is an assumed business name of GCI, which was administratively dissolved in 2008. There have been no transactions filed in ORESTAR related to this expense associated with this mailing.Final Determination 14-C&E-10 Page 8 of 16 Determination: On July 28, 2014, an inquiry letter was mailed to GCI which asked if GCI was the responsible party for the referenced mailing. On August 13, 2014, the Elections Division received a response from Nick Graham, Operations Director for GCI. He stated that Representative Nearman’s campaign (Nearman4Oregon) placed the order for the survey; he also included with his response a letter from Ms. Piercy, treasurer of Representative Nearman’s campaign committee. Ms. Piercy stated that an invoice, dated May 5, 2014, for this order was reported as an account payable transaction on May 9, 2014 (transaction #1722927). She also stated that the results of the survey were provided to the campaign on the same date as the invoice date. Based on the evidence, the Elections Division has determined that the date reported for the account payable is not accurate. The survey was received on April 25, which supports that the order for the survey was placed prior to April 25. Ms. Piercy did not indicate the date the order was placed but in her response on behalf of Nearman4Oregon she stated that orders are usually processed and delivered by Gl in approximately 1-2 days before the invoice date. A committee is obligated to either obtain an estimate from GCI or calculate an estimate for the purpose of campaign finance reporting. The date for an account payable is not based on the date of an invoice or the date the treasurer or candidate receives a copy of the invoice; it is the date the goods or services are ordered. It is evident that an order for the postcard survey was placed prior to the date reported by the committee (May 5, 2014) because it was received in mailboxes as early as April 25. Based on Ms. Piercy’s statement, the evidence and page 41 of the 2014 Campaign Finance Manual, the Elections Division has determined that the date reported for transaction #1722927 was incorrect.” Therefore, the Elections Division, under a separate letter, will direct the Nearman4Oregon committee to amend the transaction date to April 22, 2014, three days before the survey was first received by households’ in House District 23. ‘Amending the date of this transaction will result in the transaction being late. A penalty may be assessed if change is made to the date of a transaction which results in a due date that is prior to the date the transaction was originally filed. The transaction is late from the date the transaction should have been filed to the date the transaction was originally filed.{° The Elections Division will issue a proposed penalty notice to Representative Nearman accordingly.” Oregon Right to Life PAC (ORTL) On August 7, 2014, the Elections Division sent a letter to ORTL Treasurer Gayle Atteberry regarding the complaint. Shortly thereafter, the complaint was referred to the Oregon Department of Justice (ODOJ). ‘On August 19, 2014, Shawn M. Lindsay informed the Elections Division that he was being retained by ° Page 41 of the 2014 Campaign Finance Manual {adopted by Oregon Administrative Rule 165-012-0005) states that the date of an account payable Is the date an order is placed for goods or services, 10 The Penalty Matrix: Late Filings Is on page 60 of the 2014 Campaign Finance Manual, and is adopted by OAR 165-012- (0005. The penalty calculation is prescribed on page 61 of the manual; the penalty fora late transaction Is 4% of the amount of the transaction multiplied by the number of business days the transaction is filed late The issuance of the proposed penalty notice will occur approximately three months after the amendment is filed. See page $4 of the 2014 Campaign Finance Manual,Final Determination 14-C&E-10 Page 9 of 16 ORTL as legal counsel. On August 21, 2014, the Elections Division informed Mr. Lindsay that the complaint had been referred to ODOJ and any questions should be directed to ODO). ‘On December 8, 2014, Mr. Lindsay affirmed that he was still representing ORTL and that any inquiry from the Elections Division should be mailed to him. On January 13, 2015, the Elections Division mailed an inquiry letter to Mr. Lindsay. On January 28, 2015, the Elections Division received a response to the letter from Mr. Lindsay; Mr. Lindsay declined to respond to the questions without knowing the statutory authority the Elections Division relied upon to request a response to the questions. On February 5, 2015, the Elections Division sent a second letter to Mr. Lindsay, again requesting a response to the questions and addressing the statutory authority questions he raised. On February 10, 2015, the Elections Division received a response from ORTL Treasurer Gayle Atteberry. The Elections Division finds as follows: ORT! red by Nearman4Oregon for Postcard Mailed RTL On April 17, 2014, a 6 x 11 glossy postcard was received in House District 23; the postcard included the return address for ORTL. The ORTL ORESTAR transaction is listed as 4/17/2014 to Gateway Communications the day it arrived with reference to In-Kind to Nearman4Oregon. There is no in-kind contribution reported by Nearman4Oregon. Determination: Ms, Atteberry identified transaction #1717483 as the expenditure reported (on May 5, 2014) by ORTL for the mailing. This transaction indicated that a portion of the expense was an in-kind contribution to Representative Nearman; the transaction was amended (transaction #1724706) on May 12, 2014, changing the in-kind indicator to independent expenditure indicator because it was made independent from Representative Nearman’s committee. Further, Ms. Atteberry stated that ORTL had no ‘communication with Representative Nearman or any agent of the committee related to the mailing identified in the complaint. Ms, Piercy stated in her response to the complaint that no one working with the Nearman campaign was ever in contact with ORTL regarding the Representative Nearman mailings. After receiving a copy of the complaint, she checked ORTU's transactions and found three expenditure transactions that indicated they were in-kind contributions to Nearman4Oregon. These were brought to the attention of ORTL, and ORTL advised that their Alternate Transaction Filer originally reported the transactions without confirming if they were independent or in-kind. Mr. Lowe (legal counsel for Representative Nearman) also stated in his response that neither Representative Nearman nor anyone else working on his campaign ever “coordinated any ‘communications or activities” undertaken by ORTL. ‘ORS 260,083(4) requires in part that “if a political committee...makes an expenditure that must be reported as an in-kind contribution..the political committee making the original expenditure shall identify the expenditure as an In-kind contribution and indentify the candidate for whose benefit the expenditure was made.”Final Determination 14-CRE-10 Page 10 of 16, ORS 260.083(5) requires in part that “if a political committee...makes an expenditure that qualifies an independent expenditure...the listing of the expenditure...shall identify any candidates...that are the subject of the independent expenditure and state whether the independent expenditure was used to advocate the election...or defeat of the candidate.” ‘ORS 260.005(10) defines in part that an “independent expenditure means an expenditure by a person for a communication in support of or opposition to a clearly identified candidate...that is not made with the cooperation or with the prior consent of, or in consultation with, or at the request or suggestion of, 2 candidate or any agent of a candidate, or authorized committee of the candidate...” ORTL erred in identifying transaction #1717483 as an in-kind contribution to Representative Nearman; the transaction was amended to replace the in-kind information with the independent expenditure information showing support of Representative Nearman; this information is now correct in ORESTAR."” Therefore, there is insufficient evidence to indicate a violation of Election Law related to this transaction. ORTL~ Allegation #2: One Page Letter Sent by ORTL Not Reported in ORESTAR On April 24, 2014, a one page letter was received in House District 23 from ORTL endorsing Representative Nearman and opposing former Representative Jim Thompson. Determination: Ms. Atteberry identified transaction #1708078 as the expenditure reported (on April 25, 2014) by ORTL for the letter. This transaction indicated that the expense was an in-kind contribution to Representative Nearman; the transaction was amended (transaction #1724700) on May 12, 2014, changing the in-kind indicator to the independent expenditure indicator supporting Representative Nearman. Further, Ms. Atteberry stated that ORTL had no communication with Representative Nearman or any agent of the committee related to this mailing. Therefore, there is insufficient evidence to indicate a violation of Election Law related to this transaction. ORTL— Allegation #3: Postcard From ORTL Not Reported in ORESTAR On May 1, 2014, a 6 x 11 “glossy postcard” from ORTL endorsing Representative Nearman was received in House District 23. You were unable to find a transaction in ORESTAR related to this mailing, Determination: The complaint did not include a copy of the postcard referenced in this statement. However, Ms. Atteberry identified transaction #1701808 as the account payable for a postcard mailing that contained the statement “in this election Mike Nearman is willing to stand up for her right to live.” Assuming that this postcard was the one referenced in the complaint, the associated account payable transaction was filed on April 15, 2014. The expenditure (transaction #1721250) to pay the account payable was originally filed on May 8, 2014, and indicated that this was an in-kind contribution to Representative Nearman. The transaction was amended by changing the in-kind indicator information to an independent expenditure supporting Representative Nearman. Further, Ms. Atteberry stated that CORTL had no communication with Representative Nearman or any agent of the committee related to ‘2There is nothing in Oregon Election Law that prohibits a committee from amending the in-kind/independent expenditure information reported in a transaction; there is no penalty associated with fling that specific type of amendment.Final Determination 14-CBE-10 Page 11 of 16 this mailing. Therefore, there is insufficient evidence to indicate that ORTL failed to file transactions associated with the postcard. ORTL— Allegation re listed as $100 or less.” ORTL donations Determination: ‘ORS 260.083(1) requires statements of contributions to include “the name, occupation and address of each person, and the name and address of each political committee or petition committee that contributed an aggregate amount of more than $100 in a calendar year on behalf of a candidate or to a political committee or petition committee and the total amount contributed by that person or ‘committee[.]" Statements of contributions that, in the aggregate are $100 or less, are not required to include this identifying information. The complaint appears to allege that some contributions should have this identifying information because the contributor’s aggregate amount exceeds $100. To investigate this allegation Elections Division staff (Jennifer Hertel and Alana Cox) met with Ms. Atteberry (Treasurer and Executive Director of ORTL}, Linda Vollman (ORTL Alternate Transaction Filer), Jane Groff (Assistant Director of ORTL) and Terry Vande Coevering at the ORTL offices on February 19, 2015. The purpose of the meeting was to understand how contributor information is tracked for the purpose of campaign finance reporting, what kind of contributor documentation is retained, and how it is determined if a contribution is for the PAC or the Educational Foundation of the non-profit. Prior to the meeting, the detailed contributor transactions (contributor aggregate exceeded $100) reported in 2014 were reviewed; as a result of the review, there were three contributors identified for which either the aggregate was reported incorrectly or there were contributions not disclosed. ‘The PAC solicits contributions through direct mail and phone banks. It uses GC! to facilitate both types of solicitations. The return envelope with a solicitation identifies which organization (the PAC or educational organization) is making the solicitation. GC! collects contributor information, including credit card information, on a form. The information that is collected is dropped through a FTP drop site which is accessed by Ms. Vollman; she prints the information sheets and then processes the credit card transactions. Ms. Vollman also processes contributions that are received via mail. Ms. Vollman confirmed that the date she uses for contributions is the date they are received by ORTI.~ either the date the check is received or the date the credit card is processed. Mss. Vollman explained that ORTL retains documentation for each contribution by receipt date which is bundled together and placed in a filing cabinet for record-keeping. ‘The contributor information is then forwarded to Ms. Vande Coevering for entry into a custom database called FLEX. The database contains approximately 9000 contributor names; it is shared with GCI when they engage in solicitations on behalf of ORTL. The database contains the name of each contributor, contributor detail (address, contact and occupational information) and records the date and amount of each contribution. Conducting a search by contributor name results in a listing of all of the contributions received from that person. It also denotes if the money is earmarked for ORTL state PAC, federal PAC or the ORTL educational foundation, If Ms. Vande Coevering determines that a contributor’s aggregate is more than $100 in a calendar year, she informs Ms. Vollman for the purpose of reporting the contribution in ORESTAR.Final Determination 14-CRE-10 Page 12 of 16 Ms. Vande Coevering accessed the FLEX database and was asked to look up the three contributors identified by the Elections Division. Based on the entries in the FLEX system, the Elections Division determined that there were a few contributions that had not been detailed and were mistakenly included in the miscellaneous contribution category for that particular day; Ms. Vollman indicated this was an accidental error. The Elections Division staff showed Ms. Vollman how to export the transactions that have been filed in ORESTAR; this would allow her to research contributor information to ensure that the aggregate amounts reported in ORESTAR are accurate when compared to the contributor's total in the FLEX database. She advised that she would take corrective action (review contributor aggregates) as soon as possible. Ms. Vollman took immediate action (on February 19) and filed “original” contributor transactions for the three contributors that were discussed in the meeting and amended the associated miscellaneous contribution transactions. It is evident that she did a more comprehensive review of other contributors; in addition to the above mentioned corrections, there were other “original” transactions and amendments to associated miscellaneous contribution transactions that were also filed on that same date, The late transaction filings resulted in the issuance of a proposed penalty notice to ORTL (2015 February case, 2015-0615) in which a $361.61 penalty was proposed.* On February 25, 2015, the Elections Division sent an email to Ms. Atteberry and Ms. Vollman asking for an estimate of the percentage of contributions which have insufficient identification about the intended recipient of the contribution and requesting samples of remittance envelopes, The email also directed ORTL PAC to conduct a thorough review of all contributions received going back to March 2013. Ms. Vollman responded to the email on February 26, She estimated that less than one percent of the contributions that ORTL receives don’t include sufficient identification about which entity the contribution is intended."* She also stated that she had started working on the review of the 2013 transactions, The committee also provided several samples of remittance envelopes, which were addressed to either “Attn: Education Foundation” or “Attn: PAC.” A second visit to the ORTL offices was made on April 28, 2015; Ms. Cox and Ms. Hertel met with Ms, Vollman, Ms. Groff and Ms. Vande Coevering. The purpose of this meeting was to review the documentation of three ‘miscellaneous cash contributions $100 and under’ transactions (to ensure none of the contributors had exceeded the aggregate threshold) and review five detailed contributors to determine if the reported aggregate amount was accurate; no one at ORTL had knowledge about the purpose of our visit or which miscellaneous contributions were selected for review. First, we reviewed the supporting documentation for each miscellaneous total (contributor information which included copies of checks or credit card processing information). The documentation was reviewed to determine if the total amount reported for the miscellaneous contribution category was accurate. 18 payment ofthe proposed cull penalty was received on June 26,2015. 1M Under separate cover letter to ORTL, the Elections Divison will commend that if ORTL recelves a contribution with no indication of ‘hich entty the contribution I intended, and they are unable to make contact with the contributor within seven days of recelptof the contibution, thatthe contribution be returned to the contrlautor.Final Determination 14-CRE-10 Page 13 of 16 Then Ms. Vande Coevering was asked to look up each contributor’s name to determine if the contributor’s aggregate had exceeded $100 in calendar year 2014, We found that the totals were accurately reported and that none of the persons included in the miscellaneous transaction total had exceeded the $100 aggregate threshold. Further, the aggregate amount reported for each of the five detailed contributors was accurately reported. The Elections Division has also conducted a search of the transactions that were filed in March 2015; Ms. Vollman amended and added a total of 86 transactions. The dates for the transactions ranged from March 2013 through December 2014; it is evident that Ms. Voliman conducted her review of the contributors’ aggregate information and made corrections per our direction. These original and amended filings resulted in the issuance of a proposed penalty notice (2015 March case, 2015-0683) on July 15, 2015; the notice proposed a civil penalty of $627.38. The investigation revealed errors in the reporting of some contributions, but there is insufficient evidence to support that ORTL purposefully withheld contributor information from disclosure in ORESTAR. Oregon Family Council PAC (OFC) On July 29, 2014, an inquiry letter regarding the alleged violations in the complaint was mailed to OFC Treasurer Donna Butler. The Elections Division received a response to the letter from Ms. Butler on August 12, 2014. Based on the information available, the Elections Division finds as follows: OFC Allegation #2: Failure to Report Transaction Related to Letter from Jack Louman in Support of Nearman ‘On April 23, 2014, a one page endorsement letter for Representative Mike Nearman was received in mailboxes of House District 23 from OFC. There is no matching entry on OFC’s campaign finance activity. There appears to be coordination between Representative Nearman’s campaign and OFC PAC. Determination: Ms. Butler stated in her response that Jack Louman, Executive Director of OFC PAC, ordered the letter from GCI; she did not provide the date Mr. Louman placed the order. The account payable transactions associated with the letter (original transactions #1711537 and #1711538) were dated April 25, 2014, and reported by OFC PAC to ORESTAR on May 2, 2014. When these transactions were originally filed, each disclosed that the expenditure was an independent expenditure in support of the Nearman4Oregon campaign. When it was brought to Ms. Butler’s attention that Teresa Harke was working for the Nearman4Oregon campaign and that OFC PAC was becoming “more active in the Nearman campaign,” she amended both transactions to indicate that they were in-kind contributions to the Nearman4Oregon campaign. Nearman4Oregon reported the in-kind contributions associated with OFC PAC’s in-kind expenditures. Therefore, the coordination between the two campaigns was disclosed accordingly.Final Determination 14-CRE-10 Page 14 of 16 Ms. Butler stated that “OFC PAC has used Gateway as its mail house and print vendor for many years. ‘Small pieces such as the Nearman endorsement letter are done on an informal basis, meaning that Gateway does not provide a cost estimate prior to sending an invoice. OFC PAC is not Informed of the final cost until it receives an invoice after the final postage amounts are determined, usually a few days after the piece has been mailed.” Mss. Butler also explained that the front desk person at OFC PAC date stamps invoices when they are received, and that for reporting purposes she uses the date that she receives a copy of the invoice or the date when Mr. Louman reviews the invoice “whichever is earlier.” The date she reported for the payables “was the earliest date that an official of the PAC knew the cost of the Nearman mail piece.” Based on the evidence, the Elections Division has determined that the dates reported for the account payable transactions are not accurate. The invoice was received by OFC on April 24, 2014; however, because the mailing was received by residents on April 23, 2024, and the invoice was dated April 22, 2014, the order must have been placed before April 25, 2014, the dates reported for the account payable transactions. Further, while Ms, Butler stated that OFC isn’t given an estimate for “small pieces,” OFC is obligated to either obtain an estimate from GCI or calculate an estimate for the purpose of campaign finance reporting, The date for reporting an account payable is not based on the date of an invoice or the date the treasurer receives a copy of the invoice; it is the date the goods or services are ordered.’® of ‘agree with Ms. Butler’s statement that the earliest date an offi the PAC knew the cost of the Nearman mail piece was April 24 when the invoice was received, but when Mr. Louman placed the order for the letter with GCI, he had an obligation to either ask for an estimate or calculate an estimate so he could inform Ms, Butler of the order to ensure timely filing of the account payable transactions. Therefore, the Elections Division will direct OFC PAC, under a separate letter, to amend the transactions’ dates to April 18, 2014, three business days before the letter was first received by households’ in House District 23. Amending the transactions will result in the transactions being late. A penalty may be assessed if a change is made to the date of a transaction which results in a due date that is prior to the date the transaction was originally filed. The transaction is late from the date the transaction should have been filed to the date the transaction was originally filed."® OFC ~ Allegation #2: Reporting Requirements of Voters Guide The complaint did not allege a violation of Election Law related to the mailing, entitled “Oregon Family Council Voters Guide,” but it did raise a concern when it stated “There is no reason to believe there is anything unusual about this mailer other than what are the reporting requirements of voter's guides.” {emphasis added). 48 Page 41 of the 2014 Campaign Finance Manual {adopted by Oregon Administrative Rule 165-012-0005) states that the date of an account payable Is the date an order Is placed for goods or services, 46 The Penalty Matrix: Late Filings fs on page 60 of the 2014 Campaign Finance Manual, and is adopted by OAR 165-012- (0008. The penaity calculation is prescrited on page 61 of the manual; the penalty for a late transaction is 4% of the amount, of the transaction multiplied by the number of business days the transaction s filed late,Final Determination 14-C&E-10 Page 15 of 16 Determination: There is no violation under Election Law. Campaign finance law doesn’t have different reporting requirements for voters’ guides paid for with PAC funds. ‘Taxpayer Defense Project Ms, Piercy responded to the allegations regarding TOP in the letter addressing the allegations against Representative Nearman; the letter was received by the Elections Division on May 21, 2014. TDP — Allegation #1: 3 rised of Falsehoods On April 25 and 30 of 2014, two campaign post cards were received in House District 23. The comp! alleged the second mailing was “comprised with falsehoods.” Determination: Ms. Piercy’s response to the complaint confirmed that the Taxpayer Defense Project’s name and return address was utilized on the mailings, but it was the Nearman4Oregon campaign that ordered and paid for these mailings. The Elections Division does not adjudicate alleged false statements printed in political mailers. The remedy for a possible violation of false statements is provided in ORS 260.532 which states in part that a candidate aggrieved by a false publication has a right of action in the circuit court for any county in this state where the defendant resides. Coordinated Committees ‘On July 18, 2014, you sent an email with attached documentation (a letter from Jack Louman, an Oregonlive article and an article in the Itemizer Observer related to phone bank calls and the General Election House District 23 race) to the Elections n. Coordinated Committees ~ Allegation #1: Activities Among OFC, ORTL and Nearman4Oregon The email asserted that the three committees/organizations are coordinating political activities, but provided no evidence that related to the primary election campaign finance activity by the organizations, which would trigger the reporting of in-kind contributions.Final Determination 14-C&E-10 Page 16 of 16 Determination: Under Oregon Election Law, coordination among different entities is not itself a violation of Election Law, as long as all contributions and expenditures made by the entities are reported accurately. ORS 260.083(4) provides in part that if a candidate, political committee or petition committee makes an ‘expenditure that must be reported as an in-kind contribution, the committee making the expenditure shall identify the expenditure as an in-kind contribution and identify the candidate, political committee or petition committee for whose benefit the expenditure was made. ORS 260.083(5) provides in part that if a candidate, political committee or petition committee makes an expenditure that qualifies as an independent expenditure under ORS 260.005(1), the expenditure shall identify the candidate or measure that is the subject of the independent expenditure and shall state whether it was used to advocate the election, passage or defeat of the candidate or measure. The Elections Division received responses (discussed previously) from OFC PAC and ORTL. ORTL initially reported expenditures with the in-kind indicator and subsequently amended the transactions to the independent expenditure indicator. As discussed above in Allegations #1 and 2 against ORTL (referenced on pages 9-10), we find that the amendments correctly described the transactions. OFC initially reported expenditures with the independent indicator and subsequently amended the transactions to the in-kind indicator. As discussed above in Allegation #1 against OFC (referenced on page 13), we find that the amendments correctly described the transactions. Therefore, there is insufficient evidence of an Election Law violation. This concludes the Elections Division's investigation into this matter, and this case is now closed. Sincerely, _LA~ Robert Taylor Deputy Secretary of State Representative Mike Nearman Matthew D. Lowe, Legal Counsel for Representative Mike Nearman Jacob G Daniels, Treasurer of Taxpayer Defense Project PAC Lori Piercy, Treasurer of Nearman4Oregon and Correspondence Recipient, Taxpayer Defense Project Gayle Atteberry, Treasurer of Oregon Right to Life PAC Linda Vollman, Correspondence Recipient of Oregon Right to Life PAC Donna Butler, Treasurer of Oregon Family Council PAC Jack A. Louman, Correspondence Recipient of Oregon Family Council PAC Nick Graham, Operations Director of Gateway Communications, Inc.