BEFORE THE FEDERAL ELECTION COMMISSION CAMPAIGN LEGAL CENTER 1411 Street NW, Suite 1400 Washington, DC 20005 (202) 736-2200 SANDHYA BATHIJ A 1411 Street NW, Suite 1400 Washington, DC 20005 (202) 736-2200 v. MUR No. JOHN BOLTON SUPER PAC Cabell Hobbs, Treasurer 1730 Street NW Washington, DC 20036 COMPLAINT This complaint is ?led pursuant to 52 U.S.C. 30109(a)(1) and is based on information and belief that the John Bolton Super PAC (ID: C00542464) has violated the Federal Election Campaign Act 52 U.S.C. 30101, et seq. During the 2014 election cycle, the John Bolton Super PAC contracted with a data ?rm, Cambridge Analytica, which was simultaneously providing services to the North Carolina Republican Party and Thom Tillis Committee. Cambridge Analytica?s primary owner, Robert Mercer, was also the John Bolton Super single largest funder. Based on a Cambridge Analytica staffer?s online portfolio and other published reports, there is reason to believe that the John Bolton Super PAC used strategic information that Cambridge Analytica derived from its work for the party or campaign" to develop advertisements expressly advocating for Tillis? election, and thus made coordinated communications through the use of a ?common vendor.? As a result, the John Bolton Super PAC made excessive and unreported contributions, in violation of reporting requirements and contribution limits, and in violation of its status as an independent expenditure-only super PAC. ?If the Commission, upon receiving a complaint . . . has reason to believe that a person has committed, or is about to commit, a violation of . . . [t]he Commission shall make an investigation of such alleged violation . . . 52 U.S.C. 30109(a)(2) (emphasis added); see also 11 C.F.R. Campaign Legal Center is a nonpartisan, nonpro?t 501(c)(3) organization whose mission is to protect and strengthen the US. democratic process through litigation and other legal advocacy. CLC participates in judicial and administrative matters throughout the nation regarding campaign ?nance, voting rights, redistricting, and government ethics issues. FACTS Thom Tillis is a US. Senator from North Carolina who was elected in 2014. The Thorn Tillis Committee is his principal campaign committee. 1 The North Carolina Republican Party spent at least $1.7 million supporting Tillis? 2014 election,2 which included at least $101,504 in digital advertising} and it spent at least another $149,456 opposing Tillis? opponent, Kay Hagan.4 1 Thorn Tillis Committee, Statement of Organization, FEC Form 1, at 2 (amended Mar. 15, 2017), http: //docu_ue13 .fec. pd_f. North Carolina Republican Party, Disbursements, 2013-14, ov/data/disbursements/?two tear transaction _=C00038505&min 3 North Carolina Republican Party, http://docrluerg ($51,504 payment to Majority Strategies in support of Tillis for Digital Contact); bin/fecimu ?15950539967 ($50,000 payment to Right Target Strategies in support of Tillis for ?Digital Advertising?). North Carolina Republican Party, Disbursements, 2013-14, fec ear_transaction id =C00038505&min 2 The John Bolton Super PAC is an independent expenditure-only committee (Le, a super PAC) that reported $1,372,217 in independent expenditures in support of Tillis in the 2014 election cycle.5 Cambridge Analytica is a data ?rm that has contracted with dozens of U.S. candidates and political committees since the 2014 elections. As The Guardian explained earlier this month: [Cambridge Analytica] claims to be able to analyse huge amounts of consumer data and combine that with behavioural science to identify people who organisations can target with marketing material. It collects data from a wide range of sources, including social media platforms such as Facebook, and its own polling.6 Cambridge Analytica was incorporated in Delaware on December 31, 2013,7 and in the United Kingdom on July 14, 2014.8 Cambridge Analytica?s parent company is the based SCL Group, a data ?rm that claims it ?provides data, analytics and strategy to governments and military organizations worldwide? and has ?conducted behavioral change programs in over 60 countries.?9 Cambridge Analytica was started with a $15 million investment from Robert Mercer, and is ?owned almost entirely by Mr. Mercer.?10 During the 5 John Bolton Super PAC, ?independent expenditures,? 2013-2014, 6 Hilary Osborne, What is Cambridge Analytica? The ?rm at the centre of acebook ?3 data breach, THE GUARDMN (Mar. 18, 2018), tica-?rm?at? 7 Cambridge Analytica LLC, Delaware Division of Corporations, Search/NameSearchasDx (last visited Mar. 28, 2013). See also Andy Kroll, Cloak and Data: The Real Story Behind Cambridge Analytica ?s Rise and Fall, MOTHER JONES (May/June 20 1 8), 1 8/ 03/ ica-robert?mercer/ noting (?The company was incorporated in Delaware on December 31, 8 UK. Companies House Registration, Company Number 09154503, 9 SCL Group Homepage, (last Visited Mar. 28, 2018). 10 Matthew Rosenberg, Nicholas Confessore Carole Cadwalladr, How Trump Consultants Exploited the acebook Data of Millions, N.Y. Times (Mar. 17, 2018), imes.com/20 1 8/03/1 7/us/politics/cambridge?anah 3 10. 11. 12. 2014 elections its board included Mercer, Stephen Bannon, and Alexander Nix, who is also CEO of SCL Elections, part of the SCL Group. 11 In addition to being a Cambridge Analytica board member and the ?rm?s primary owner, Robert Mercer gave $1 million to the John Bolton Super PAC in the 2014 cycle, making him the committee?s single largest funder.12 In the 2014 election cycle, the Thom Tillis Committee paid Cambridge Analytica $30,000 for The North Carolina Republican Party paid Cambridge Analytica $145,000 for ?Microtargeting Consulting Fees? and $5,000 for ?Consulting Fees.?14 The John Bolton Super PAC paid Cambridge Analytica $341,025 for ?research.?15 In a July 22, 2014 memo to Cambridge Analytica board members Rebekah Mercer, Stephen Bannon, and Alexander Nix, attorneys at the law ?rm Bracewell Giulani advised that: Staff may work as functionaries on multiple campaigns, as long as the activity doesn?t raise a coordination issue. For example, the same staffer could work on any number of congressional and or state campaigns, but could not work on a campaign and an independent expenditure committee involved in the same campaign. Another memorandum will go into more details regarding the issues of message and fundraising coordination. 1 6 '1 Osborne, supra note 6; see also SCL Group Homepage, (last visited Mar. 28, 2018). ?2 John Bolton Super PAC, Receipts from ?Robert Mercer,? 2013-2014, wear transaction period=2014&data IVpe=processed&committee_ id=C00542464&contributor 1 13 &max date= 1 14 13 Thom Tillis Committee, Disbursements to Cambridge Analytica, 2013-2014, neriod=2014&data n1ie=processed&committee North Carolina Republican Party, Disbursements to Cambridge Analytica, 2013-2014, rear 8505 Iica&min dat?=0 _1 1 3&mg date=12%2F3 1 t_L 15 John Bolton Super PAC, Disbursements to Cambridge Analytica, 2013-2014, period=20 14&data?i 1. pe=prpcessed&committee id date=01%2F01%2F201 3 . 16 Memorandum ?om Mr. Laurence Levy, Bracewell Giulani, to Rebekah Mercer, Steve Bannon, and Alexander Nix (July 22, 2014), .memo.p_df. 4 13. During the 2014 election cycle Tim Glister was an employee of SCL and Cambridge Analytica. According to a November 2015 Bloomberg article: Tim Glister is a former copywriter and one-time literary agent from Newcastle; Hanis MacLeod a Nova Scotian who worked as a political journalist in Ottawa. Both spent much of 2014 working for Cambridge Analytica?s marquee American clients. Harris worked for John Bolton?s super-PAC, which was attempting to bring more attention to national-security issues in three select Senate races ahead of a prospective presidential campaign by the hawkish former UN ambassador. Glister was dispatched to North Carolina, where he was tasked with helping the state Republican party on behalf of Thom Tillis?s ultimately successful campaign to defeat Senator Kay Hagan. was English enough to be an entertaining curiosity,? he said. 17 14. Tim Glister?s online portfolio highlights his work in the 2014 North Carolina U.S. Senate race. On March 27, 2018, Glister?s online portfolio stated the following: In 2014 I spent three months in North Carolina with an SCL consultancy team, helping Thom illis' successful senatorial campaign create highly targeted advertising that harnessed SCL's national database of voter issue sentiment and graphic pro?les. In an extremely crowded market - North Carolina became the most expensive senatorial race ever in terms of media spend - we helped the illis campaign create a raft of communications across platforms that engaged voters with the issues they personally cared about and deliver victory against the predictions of traditional polls.18 15. Although Glister?s online portfolio stated he was working with Tillis? senatorial campaign, the only sample of the work that he provided on his portfolio was a John Bolton Super PAC video ad expressly advocating for Tillis? election.19 17 Sasha Isenberg, Cruz-Connected Data Miner Aims to Get Inside U.S. Voters Heads, BLOOMBERG (Nov. 12, 2015), hl; .com/news/features/ZO 1 5-1 -s-killer?data?mi-for-real- 18 Tim Glister Online Portfolio, ?Thom Tillis,? accessed March 27, 2018 and cached by Google on March 11, 20 8 111 p://webcache. 15% lgisercontentcoml projects%3 Dtho added i. 19 Id.; screenshot attached as Exhibit A. The advertisement is also available at Team John Bolton, White Flag Thom Tillis I, Youtube.com (Oct. 25, 2014), pnY. 5 16. 17. 18. 19. 20. After reporters asked Glister about this page, however, on March 28, 2018, Glister?s online portfolio was altered.20 The page now states: In 2014 I spent three months in North Carolina with an SCL deployment team, providing a local political party with voter sentiment analysis which they used in support of Thom Tillis' successful senatorial campaign. In an extremely crowded market - North Carolina became the most expensive senatorial race ever in terms of media spend - we helped the local party create a raft of communications across platforms that engaged voters with the issues they personally cared about and deliver victory against the predictions of traditional polls.21 Glister?s online portfolio also removed the John Bolton Super PAC video ad expressly advocating for Tillis and replaced it with a Tillis image.22 SUMMARY OF THE LAW Federal law limits to $2,700 the amount of a contribution that a presidential candidate or her authorized campaign committee may accept from an individual donor. 52 U.S.C 30116(a)(1). FECA also prohibits a corporation or labor union ?om making a contribution to a federal candidate. 52 U.S.C. 30118(a). Generally, contributions from a person to political committees other than candidate and party committees may not exceed, in the aggregate, $5,000 per calendar year, 52 U.S.C. 30116(a)(1)(C), and candidates cannot accept contributions from a non-multicandidate political committee in excess of $2,700, id. 30116(a)(1). A ?contribution? includes ?any gift, subscription, loan, advance, or deposit of money or anything of value made by any person for the purpose of in?uencing any election for Federal 2" Rachel Maddow Show, ?Trump May Rue Selection of Bolton for National Security Advisor,? (Mar. 28, 201 8), watch/trum p-ma security (noting that Glister altered his online portfolio one day after reporters asked questions about the page). 21 Tim Glister Online Portfolio, (last Visited Mar. 28, 2018) (emphasis added). 22 Id. 21. 22. 23. 24. office.? 52 U.S.C. 30101(8)(A)(i); see also 11 C.F.R. ?Anything of value? includes all in?kind contributions. 11 C.F.R. 1). An in?kind contribution includes the provision without charge (or at less than the usual and normal charge) of any goods or services, including, but not limited to, ?facilities, equipment, supplies, personnel, advertising services, membership lists, and mailing lists.? Id. An ?expenditure? includes ?any purchase, payment . . . or gift of money or anything of value, made by any person for the purpose of in?uencing any election for Federal office.? 52 U.S.C. Any expenditure made in coordination with a candidate?Le, ?in cooperation, consultation, or concert, with, or at the request or suggestion of, a candidate, his authorized political committees, or their agents??is an in?kind contribution to the candidate, 52 U.S.C. 30116(a)(7)(B)(i), 11 C.F.R. 109.20, and must be reported as a contribution to that candidate by the political committee that made the payment, 11 C.F.R. In enacting the Bipartisan Campaign Reform Act, Congress mandated that the Commission promulgate ?new regulations on coordinated communications? to address, among other things, ?payments for the use of a common vendor,? and that such regulations ?shall not require agreement or formal collaboration to establish coordination.?24 Those ?coordinated communications? regulations are at 11 C.F.R. 109.21. Under the regulations, a communication is coordinated with a candidate and/or that candidate?s authorized committee, and is thus a contribution to that candidate?s committee, when the communication 1) is paid for, in whole or in part, by a person other than the Contributions in the form of ?coordinated communications? resulting from conduct described in 11 C.F.R. (?common vendor?) need not be reported as received by the campaign committee with which the communication is ?coordinated,? absent other conduct. Id. See Public Law 107?155, sec. 214(c)(2) (March 27, 2002); see also note to 52 U.S.C. 30116(a)(7). 7 25. 26. candidate or committee; (2) satis?es at least one of the ?content standards? in the regulation; and (3) satis?es at least one of the ?conduct standards? in the regulation. Id. The second prong, the ?content standar is met if the communication ?expressly advocates . . . the election or defeat of a clearly identi?ed candidate for Federal of?ce.? Id. The ?conduct standard? of the regulation is satis?ed if the political committee paying for the communication uses a commercial vendor 25 to create, produce, or distribute the communication26 that during the previous 120 days also provided certain services to the candidate identi?ed in the communication or a political party committee,27 such as development of media strategy and selection of advertising slots; selection of audiences; polling; developing the content of communications; voter identi?cation; or otherwise providing political or media advice,23 and the vendor uses or conveys to the political committee information about the candidates? or party committee?s ?plans, projects, activities or needs? (or information used previously by the commercial vendor in providing services to the candidate) and ?that information is material to the creation, production, or distribution of the communication.?29 11 C.F.R. 25 The regulation cross-references the de?nition of ?commercial vendor? at 11 C.F.R. which includes ?any persons providing goods or services to a candidate or political whose usual and normal business involves the sale, rental, lease or provision of those goods or servicesThese requirements are not satis?ed if the material information was obtained from a publicly available source, 11 C.F.R. 109 or if the committee establishes and implements a ?rewall in a written policy that prohibits the ?ow of information about the candidate?s campaign plans, projects, activities or needs to those responsible for the creation, production, or distribution of the communications, pursuant to 11 C.F.R. However, in promulgating the rules, the Commission emphasized that ?the mere existence of a con?dentiality agreement or ethical screen should provide a defacto bar to the enforcement of the limits on coordinated communication imposed by Congress. Without some mechanism to ensure enforcement, these private arrangements are unlikely to prevent the circumvention of the rules.? 68 Fed. Reg. 421, 435 (Jan. 3, 2003). 8 The Commission has consistently found reason to believe that FECA has been violated if the ?rst two parts of the common vendor test are satis?ed. In MUR 5546, for example, the Commission held that, ?[b]ecause the ?rst two parts of the common vendor test are met, there is reason to investigate whether the use or exchange of information occurred as described in 11 C.F.R. MUR 5546 (Progress for America Voter Fund), Noti?cation with Factual and Legal Analysis at 9 (Jul. 5, 2005);31 see also MUR 5502 (Martinez for Senate), Noti?cation with Factual and Legal Analysis at 8 (May 18, 2005)?2 Additionally, in MURs 5403 and 5406, the Commission found reason to believe that the political committee America Coming Together had engaged in coordinated communications pursuant to the shared vendor ?conduct standar by contracting with the commercial vendor Dewey Square Group to run a phone bank operation supporting John Kerry?s presidential campaign, since that vendor had previously provided voter identi?cation services to the Kerry campaign committee. Id., Noti?cation with Factual and Legal Analysis to America Coming Together at 9-13 (Oct. 20, 2004).33 The fact that the vendor provided services to both the campaign and the political committee was suf?cient to ?nd reason to believe that FECA had been violated; the Commission then investigated whether the vendor used or conveyed to the political committee information about the candidates? plans, projects, activities, or needs. Id. at 12. 31 Available at http://etjsfeg 32 Available at hr _1 33 Available at 1y _1 1 5D.11df. 9 28. 29. 30. 31. CAUSES OF ACTION John Bolton Super PAC Has Illegally Made Excessive, Corporate, and Unreported In- Kind Contributions to the North Carolina Republican Party and/or the Thorn Tillis Committee John Bolton Super PAC has made illegal, excessive, and unreported in-kind contributions to the North Carolina Republican Party and/or the Thom Tillis Committee by ?nancing coordinated communications through the use of a common vendor, Cambridge Analytica. A political committee makes a ?coordinated communication? when the communication (1) is paid for, in whole or in part, by a person other than the candidate or committee; (2) satis?es at least one of the ?content standards? in the regulation, for example by ?expressly advocat[ing] . . . the election or defeat of a clearly identi?ed candidate for Federal of?ce;? (3) satis?es at least one of the ?conduct standards? in the regulation, such as the use of a ?common vendor.? 11 CFR John Bolton Super communications satisfy the ?payment? and ?content? prongs because the John Bolton Super PAC reported paying $1,372,217 for independent expenditures expressly advocating for Tillis? election in the 2014 election cycle.34 John Bolton Super communications additionally satisfy the ?conduct? prong at 11 C.F.R. 109.21 since the political committee contracted with Cambridge Analytica, a commercial vendor Within the meaning of the regulation,35 to create, produce, or distribute communications expressly advocating for Tillis? election, and during the See supra note 5. Cambridge Analytica is engaged in the regular business of voter identi?cation and content development and thus quali?es as a commercial vendor. 11 C.F.R. 116.1. 10 32. relevant time period, Cambridge Analytica provided several of the regulation?s enumerated services to the Thorn Tillis Committee and North Carolina Republican Party,36 and therefore there is reason to believe the vendor used or conveyed to John Bolton Super PAC information about the North Carolina Republican Party and/or Thom Tillis Committee?s ?plans, projects, activities or needs,? and that such information was ?material to the creation, production, or distribution of the communication,? id. Although a committee may establish and implement a ?rewall in a written policy to prohibit the ?ow of strategic information ?om a political party or candidate to a super PAC, 11 CPR. the evidence indicates that any such ?rewall was ignored in this instance. Cambridge Analytica/SCL employee Tim Glister boasted on his online portfolio about Cambridge Analytica?s/SCL?s role in ?helping Thom Tillis' successful senatorial campaign create highly targeted advertising,? and as a sample of that work, posted a John Bolton Super PAC video ad expressly advocating for Tillis? electionrq?8 (On March 28, 2018?nearly four years after Tillis? election, and amidst international media scrutiny of the role of Cambridge Analytica in elections*Glister edited the Tillis page on his online portfolio, removing the John Bolton Super PAC video and stating now that Cambridge Analytica?s/SCL?S work involved ?providing a local political party with voter sentiment 36 See supra 1] 11. Additionally, according to Glister?s online portfolio, Cambridge Analytica helped ?Thom Tillis' successful senatorial campaign create highly targeted advertising,? see supra note 18, and provided the North Carolina Republican Party ?with voter sentiment analysis which they used in support of Thom Tillis' successful senatorial campaign? and ?helped the local party create a raft of communications across platforms that engaged voters with the issues they personally cared about and deliver victory against the predictions of traditional polls,? see supra note 20. 37 However, in promulgating the common vendor rules, the Commission dismissed the idea that ?the mere existence of a con?dentiality agreement or ethical screen should provide a defacto bar to the enforcement of the limits on coordinated communication imposed by Congress,? and emphasized that ?[w]ithout some mechanism to ensure enforcement, these private arrangements are unlikely to prevent the circumvention of the rules.? 68 Fed. Reg. 421, 435 (Jan. 3, 2003). 38 Supra note 18; see also Exhibit A. 33. 34. 35. analysis which they used in support of Thom Tillis' successful senatorial campaign.?39) This evidence strongly indicates that, although Cambridge Analytica employee Glister was formally working with the North Carolina Republican Party and/or the Thom Tillis Committee, he also used strategic information from those committees to develop communications for the John Bolton Super PAC. Therefore, there is reason to believe Cambridge Analytica used or conveyed to John Bolton Super PAC information about the North Carolina Republican Party and/or Thom Tillis Committee?s ?plans, projects, activities or needs,? and that such information was ?material to the creation, production, or distribution of the communication??speci?cally, the John Bolton Super pro-Tillis communication that was posted on Glister?s website. A payment for a coordinated communication is an in-kind contribution to the candidate committee or political party committee with which it is coordinated. 11 CPR. If Cambridge Analytica and Glister used strategic information from the North Carolina Republican Party in developing the John Bolton Super communication, the costs of that communication are an in?kind contribution to the North Carolina Republican Party; if they used strategic information from the Thorn Tillis Committee, the costs of the communication are an in?kind contribution to the Thorn Tillis Committee.40 Therefore, there is reason to believe that the John Bolton Super PAC has made in-kind contributions to the North Carolina Republican Party and/or the Thom Tillis Committee in the form of coordinated communications, in excess of $2,700 limit on contributions Supra note 20. Contributions in the form of ?coordinated communications? resulting from conduct described in 11 CPR. (?common vendor?) and (?former employee?) need not be reported as received by the party committee or candidate committee with which the communication is ?coordinated,? absent other conduct by that committee. Id. 12 IInon?multicandidate political committee to a candidate, 52 U.S.C. 301l6(a)(l), in violation of prohibition on contributions to a candidate using corporate funds, 52 U.S.C. 30118(a), and in violation of reporting requirements. 52 U.S.C. 3 01 04(b). John Bolton Super PAC Lost Its ?Super Status After It Made In-Kind Contributions The in?kind contributions described in Count I violated John Bolton Super sworn statements to the Commission that it would raise funds in unlimited amounts under the condition that it would only make independent expenditures and would not make contributions to a candidate committee. As such, John Bolton Super PAC ceased to be an independent expenditure-only political committee after it made in?kind contributions to the North Carolina Republican Party and/or the Thom Tillis Committee, and from that date forward could no longer accept contributions in unlimited amounts, and could only raise and spend funds within hard money limits, and must refund all previously raised corporate and excessive contributions so as not to unlawfully spend nonfederal funds. PRAYER FOR RELIEF Wherefore, the Commission should ?nd reason to believe that John Bolton Super PAC violated 52 U.S.C. 30101 et seq., and conduct an immediate investigation under 52 U.S.C. 30109(a)(2). Complainants ?led this complaint as soon as the alleged violations became known. Given that the alleged violations occurred in 2014, we request that the Commission expedite its 13 40. consideration of this complaint in light of the ?ve-year statute of limitations provided by 28 U.S.C. 2462. The Commission should seek appropriate sanctions for any and all violations, including civil penalties suf?cient to deter future violations and an injunction prohibiting the respondents from any and all violations in the future, and should seek such additional remedies as are necessary and appropriate to ensure compliance with the FECA. Respect?illy submitted, Campaign Legal Center, by Brendan M. Fischer 1411 Street, NW, Suite 1400 Washington, DC 20005 (202) 736-2200 Sandhya Bathij a 1411 Street NW, Suite 1400 Washington, DC 20005 (202) 736-2200 Brendan M. Fischer Campaign Legal Center 1411 Street, NW, Suite 1400 Washington, DC 20002 Counsel to the Campaign Legal Center, Sandhya Bathija March 29, 2018 14 VERIFICATION The complainants listed below hereby verify that the statements made in the attached Complaint are, upon their information and belief, true. Sworn pursuant to 18 U.S.C. 1001. For Complainant Sandhya Bathija Sandhya Bathija Sworn to and subscribed before me this 94 day of March 2018. ,r . 1 . Notary Public For Com inant Campaign Legal Center Brendan M. Fischer Sworn to and subscribed before me this 2.1 day of March 2018. m} f. i; 29 Notary Public 15 Exhibit A 5 Thom Tillie 6 G) Net secure i is Google?s cache of It is a snapshot of the page as It appeared on Mar 11. 2018 03:58?8 GMT The turrent page could have changed in the meantime. Learn more Full version Eext-only vers?nn View source Trp: To, quickiy ?nd your search term on this page press or (Mao) and use the ?nd her Thom Tillis pro?les. in 201.: I seen: three month. "smzina north an SQ. conSL team hemmg Thom Tr?rs success?u 'ssue sediment and Dayan: hem-es the Tillis :ampangn create rs?: o" commumcezre 5. acres: ma deliver victery against the e? in; drama: a: Theme?lrust