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Controversial Campaign Contribution by Legal Guardian for Mentally Disabled Adult, Lecture notes of Acting

A complaint filed with the Federal Election Commission (FEC) regarding Chad Price, who made a $2,700 federal campaign contribution in the name of his mentally disabled adult sister, Jessica Price, to Judson Hill for Congress and Chris D. Clayton in his official capacity as treasurer. the relevant statutes and regulations, the parties involved, and the FEC's recommendation to dismiss the allegations against Chad Price. The case raises questions about the legality of a legal guardian making a federal campaign contribution on behalf of an adult with limited mental capacity.

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FEDERAL ELECTION COMMISSION 1
2
FIRST GENERAL COUNSEL’S REPORT 3
4
MUR 7605 5
DATE RECEIVED: 05/06/2019 6
DATE OF SUPPL. COMPL.: 08/05/2020 7
DATES OF NOTIFICATION: 05/08/2019; 8
08/05/2020 9
DATE RESPONSES RECEIVED: 06/06/2019; 10
07/11/2019; 09/14/2020 11
DATE ACTIVATED: 09/17/2019 12
13
EXPIRATION OF SOL: 08/29/2022 14
ELECTION CYCLE: 2018 15
16
SOURCE: Complaint Generated 17
18
COMPLAINANT: Larry Price 19
20
RESPONDENTS: Chad E. Price 21
22
Judson Hill for Congress and Chris D. Clayton 23
in his official capacity as treasurer 24
25
RELEVANT STATUTES 52 U.S.C. § 30122 26
AND REGULATIONS: 52 U.S.C. § 30116(a) 27
52 U.S.C. § 30116(f) 28
11 C.F.R. § 110.4(b)(1)(i) 29
30
31
INTERNAL REPORTS CHECKED: FEC Disclosure Reports 32
FEC Contributor Database 33
34
FEDERAL AGENCIES CHECKED: None 35
I. INTRODUCTION 36
37
The complaint and the supplemental complaint allege that Chad Price made a $2,700 38
contribution in the name of his mentally disabled adult sister, Jessica Price, to Judson Hill for 39
Congress and Chris D. Clayton in his official capacity as treasurer (the “Hill Committee”) in 40
MUR760500066
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1 FEDERAL ELECTION COMMISSION

3 FIRST GENERAL COUNSEL’S REPORT

5 MUR 7605

6 DATE RECEIVED: 05/06/

7 DATE OF SUPPL. COMPL.: 08/05/

8 DATES OF NOTIFICATION: 05/08/2019;

10 DATE RESPONSES RECEIVED: 06/06/2019;

12 DATE ACTIVATED: 09/17/

14 EXPIRATION OF SOL: 08/29/

15 ELECTION CYCLE: 2018

17 SOURCE: Complaint Generated

19 COMPLAINANT: Larry Price

21 RESPONDENTS: Chad E. Price

23 Judson Hill for Congress and Chris D. Clayton

24 in his official capacity as treasurer

26 RELEVANT STATUTES 52 U.S.C. § 30122

27 AND REGULATIONS: 52 U.S.C. § 30116(a)

28 52 U.S.C. § 30116(f)

29 11 C.F.R. § 110.4(b)(1)(i)

32 INTERNAL REPORTS CHECKED: FEC Disclosure Reports

33 FEC Contributor Database

35 FEDERAL AGENCIES CHECKED: None

36 I. INTRODUCTION

38 The complaint and the supplemental complaint allege that Chad Price made a $2,

39 contribution in the name of his mentally disabled adult sister, Jessica Price, to Judson Hill for

40 Congress and Chris D. Clayton in his official capacity as treasurer (the “Hill Committee”) in

MUR 7605 (Chad E. Price)

First General Counsel’s Report

Page 2 of 12

1 connection with a 2017 special election.^1 Chad Price, who already had made his own maximum

2 legal contribution to the Hill Committee, responds that, as his sister’s legal guardian, he believed

3 that he had the authority to act on her behalf in making an additional contribution in her name.

4 Chad Price asserts that he was advised by a representative of the Hill Committee that it was legal

5 for him to make a federal contribution, as legal guardian, on behalf of Jessica Price.^2 The Hill

6 Committee, which has terminated, states that it was unaware that Jessica Price did not make the

7 reported contribution herself.

8 Based on the available information, we recommend that the Commission exercise its

9 prosecutorial discretion and dismiss the allegations that Chad Price violated 52 U.S.C.

10 §§ 30116(a) and 30122 and issue a letter of caution. We further recommend that the

11 Commission exercise its prosecutorial discretion and dismiss the allegations that the Hill

12 Committee violated 52 U.S.C. §§ 30116(f) and 30122 and issue a letter of caution.

13 II. FACTUAL BACKGROUND

14 Complainant is the father of Jessica Price (“Jessica”), and he states that Jessica, who was

15 36 at the time of the Complaint’s filing, was born with a rare developmental disability that limits

16 her mental age to that of a 3-4 year old.^3 Chad Price (“Chad”) is Jessica’s brother and her legal

17 guardian, with full control over funds designated for her care.^4 Complainant asserts, and Chad

1 The First General Counsel’s Report was circulated on January 14, 2020, but withdrawn on October 24,

2020 to address the supplemental complaint.

2 As noted below, Price did not make this assertion when he responded pro se to the original complaint, but

made this assertion when he responded to supplemental complaint through counsel.

3 Complaint at 2, MUR 7605 (Chad E. Price) (May 6, 2018).

4 Response, MUR 7605 (Chad E. Price) (June 7, 2019). The documents attached to the response indicate that

Chad Price was named as the legal guardian in 2013. Id. The Complaint and the Response document a long-

running intra-family dispute.

MUR 7605 (Chad E. Price)

First General Counsel’s Report

Page 4 of 12

1 were in addition to approximately $47,800 in state contributions that Chad made in his own

2 name and in the name of his company, Mako Medical, in 2017-2018.^12

3 Chad’s pro se response to the original complaint asserts that he asked Baldwin, one of the

4 state candidates, if he could make a contribution on behalf of Jessica as her guardian, and

5 Baldwin told him that it was “ok since [he had] unrestricted and non-limited guardianship.”^13 He

6 states that he relied on Baldwin’s advice when he made additional contributions on Jessica’s

7 behalf as her legal guardian.^14 Chad also maintains that he conducted online research and could

8 not find “anything that prevented it.”^15 In addition, he contends that he asked the West Virginia

9 Secretary of State if a minor could make a contribution and was advised that a minor could make

10 a state contribution to a campaign within the campaign limits.^16 Chad’s response to the original

11 complaint does not mention any communication with the Hill Committee. Chad’s response adds

12 that “if it was not permissible for him to make contributions in his sister’s name, he will ask the

13 campaigns to refund these donations.”^17 He acknowledges that the information on the

14 Committee’s disclosure report indicating that Jessica Price is employed by his company, Mako

15 Medical, is inaccurate and should be corrected.^18 It is undisputed that the funds used to make the

12 Id. The information provided by Complainant indicates that Chad, between 2017 and 2018, made $47,

in contributions to state races in Georgia, North Carolina, Oklahoma, South Carolina, and West Virginia. Id.

Respondent, during the same time period, also made lobbyist contributions through his corporation, Mako Medical,

in the amount of $46,000. Id. In addition, the Commission’s records indicate that Respondent has made several

federal contributions since 2013.

13 Resp., Attach. Chad does not indicate when he had this conversation with Baldwin.

14 Id. at 1.

15 Id.

16 Id. Chad had a later email exchange with West Virginia Secretary of State, which appears have been in

response to another complaint his father made regarding state contributions Chad made on behalf of Jessica. Id.

17 Id. at 2.

18 Id. at 3.

MUR 7605 (Chad E. Price)

First General Counsel’s Report

Page 5 of 12

1 contribution were controlled by her guardian, Chad, although it is not clear whether those funds

2 belonged to Jessica.^19

3 The supplemental complaint does not make any new or different allegations, but instead

4 requests that the Commission consider a newspaper article regarding the pattern of Chad’s state

5 and federal contribution history, including those contributions made on behalf of Jessica as her

6 legal guardian.^20 The article suggests that Chad made the contributions on behalf of Jessica in

7 order to obscure the source of the funds.^21

8 Chad responds to the supplemental complaint through counsel. Chad’s supplemental

9 response asserts that the attached newspaper article is a “coordinated smear campaign seeking to

10 discredit a company based on a disagreement with the founder’s political beliefs.”^22 In addition,

11 Chad newly asserts that, prior to making the contribution in Jessica’s name, he contacted

12 multiple recipient state and federal campaigns, including the Hill Committee, to ensure that the

13 contributions were “compliant with the provisions of the Act.”^23 According to Chad, he was

14 assured by an unnamed individual from the Hill Committee that his contribution on behalf of

15 Jessica as her court-appointed guardian was legally permissible under state and federal law.^24

16 This new assertion differs from the previous assertion that Chad relied on advice provided by a

19 See Id. , Attachs.

20 See Suppl. Compl., MUR 7610 (Aug. 5, 2020).

21 Id. at 2. The attached newspaper article details Price’s state and federal contributions, some of which were

made in the name of Jessica Price, and which allegedly demonstrate an attempt to be less than transparent about the

source of the contributions. See Id., Attach.

22 Suppl. Resp. at 2, MUR 7605 (Chad Price) (Sept. 14, 2020).

23 Id.

24 Id. at 3.

MUR 7605 (Chad E. Price)

First General Counsel’s Report

Page 7 of 12

1 III. LEGAL ANALYSIS

2 The Act defines “contribution” as “any gift, subscription, loan, advance, or deposit of

3 money or anything of value made by any person for the purpose of influencing any election for

4 Federal office.” 30 Under the Act, an individual may not make a contribution to a candidate with

5 respect to any election in excess of the legal limit, which was $2,700 per election during the

6 2017-2018 election cycle.^31 The Act also prohibits a person from making a contribution in the

7 name of another or knowingly permitting his or her name to be used to effect such a

8 contribution.^32 Committees and candidates are barred from knowingly accepting contributions in

9 the name of another^33 and committees, through their treasurers, have a duty to examine all

10 contributions for evidence of illegality and return contributions that appear to be illegal.^34

11 The Commission has not previously addressed the legality of a contribution made by a

12 legal guardian on behalf of an adult who appears to have the mental capacity of a very young

13 minor.^35 However, the factors the Commission considers regarding contributions involving

30 52 U.S.C. § 30101(8)(A)(i); 11 C.F.R. § 100.52(a).

31 See Id. § 30116(a)(1)(A); 11 C.F.R. § 110.1(b)(1).

32 Id. § 30122; 11 C.F.R. § 110.4(b)(i)-(ii).

33 Id. § 30122; 11 C.F.R. § 110.4(b)(iv).

34 See 11 C.F.R. § 103.3(b).

35 In past matters, the Commission has made reason to believe findings regarding excessive contributions

and/or contributions in the name of another where purported donors were very young children. See MUR 5335R

(Geoff Davis for Congress Committee) (contributions in the name of children ages four and five from funds

belonging to parent); MUR 4255 (Christopher P. and Martha F. Hitchcock) (contributions in the name of children

aged one and three from account owned and controlled by parents); MUR 4484 (Stewart Bainum, Jr.) (contributions

in the name of infant son from funds owned and controlled by parents); MUR 3268 (Congressman St. Germain

Reelection Committee) (contributions in the names of children ages four and eight from funds belonging to parent).

The facts of the instant case contrast with MUR 4208 (Friends of Bob Bennett) Second Gen. Cnsl’s Report at 5-6;

Certification at 1 (Oct. 17, 1996) (taking no further action concerning contribution made by developmentally

disabled minor, noting “difficult subjective determinations.”). In that case, the minor, who was nearly 18 at the

relevant time, signed an affidavit stating that the candidate was “my friend” and “I like to help him.” We have no

similar information in this case. More recently, the Commission dismissed allegations of section 30122 violations in

a matter involving contributions made by minors who were 17 and 14. See Certification, MUR 7492 (Ben

MUR 7605 (Chad E. Price)

First General Counsel’s Report

Page 8 of 12

1 minors are a useful framework for the consideration of this issue. Under Commission

2 regulations, individuals under the age of 18 may make a contribution if: (a) “[t]he decision to

3 contribute is made knowingly and voluntarily by the Minor; (b) the funds... are owned and

4 controlled by the Minor, such as income earned by the Minor, the proceeds of a trust for which

5 the Minor is the beneficiary, or funds withdrawn by the Minor from a financial account opened

6 and maintained in the Minor’s name; and (c) the contribution is not made from the proceeds of a

7 gift, the purpose of which was to provide funds to be contributed, or is not in any other way

8 controlled by another individual.”^36

9 In determining whether a contribution from a minor was “knowing and voluntary” under

10 11 C.F.R. § 110.19(a), the Commission has stated that it would consider, among other factors,

11 the age of the minor at the time the contribution was made;^37 whether the value of the minor’s

12 contribution, if attributed to an adult member of the minor’s immediate family, would cause that

13 family member to exceed the contribution limitations under the Act and Commission

14 regulations;^38 whether the minor has a history of making routine decisions about personal

15 finances, such as how to earn, spend, and invest their money;^39 and the minor’s history of

16 donating funds and the source of the funds contributed.^40

McAdams) (June 19, 2019). In support, the Commission noted the more advanced ages of the children and that the

funds used were taken from the accounts established in each child’s name. See Factual and Legal Analysis at 7-10,

MUR 7492 (Ben McAdams) (June 19, 2019).

36 11 C.F.R. § 110.19.

37 See Explanation and Justification, Contributions and Donations by Minors, 70 Fed. Reg. 5565-01 (Feb. 3,

2005) (citing to MURs 4252 (William and Virginia Baxter), 4254 (Birgit and Loren Hershey) and 4255 (Christopher

P. and Martha F. Hitchcock ).

38 Id. at 5567, citing to MUR 4255.

39 70 Fed. Reg. 5567.

40 Id.

MUR 7605 (Chad E. Price)

First General Counsel’s Report

Page 10 of 12

1 note that there are questions as to the credibility of Chad’s assertion about receiving advice from

2 a Hill Committee representative given that it was not raised in response to the original complaint,

3 and appears to be in conflict with the Committee’s assertion that it had no basis to know that

4 Jessica did not make the contribution herself.^42 However, we do not totally discount Chad’s

5 assertion that he acted in good faith reliance on advice from a state campaign (as set forth in his

6 original response) and from the Committee (as set forth in his supplemental response).

7 In recommending dismissal of the matter pursuant to Heckler v. Chaney , 470 U.S. 821

8 (1985), we take into account the single violation, the relatively small amount of money at issue,

9 the conflicting information before the Commission whether Chad was informed by a Committee

10 representative that he could legally make a contribution in the name of Jessica, and the

11 Commission’s limited resources. Under these unique circumstances, including the proper

12 ordering of the Commission’s priorities on its docket, it would not be a prudent use of the

13 Commission’s limited resources to pursue the matter further. Accordingly, we recommend that

14 the Commission exercise its prosecutorial discretion and dismiss the allegations with a caution to

15 Chad Price.^43

16 We similarly recommend that the Commission exercise its prosecutorial discretion and

17 dismiss the allegations that Judson Hill for Congress and Chris D. Clayton in his official capacity

42 Chad, in his original response, stated that he made the “donation on her behalf to candidate Stephen

Baldwin. I was told by the Campaign that this was OK since I had unrestricted and non-limited Guardianship. I

looked online and couldn't find anything preventing it either.” See Resp. Chad states that he sought advice from the

Stephen Baldwin committee but makes no specific mention of having contacted the Hill Committee for advice. Id.

The Hill Committee, in its complaint response, states that it had no knowledge of the circumstances under which the

contribution was made by Chad. See Hill Committee Resp. It appears that Chad did not have the benefit of counsel

when filing his original response but retained counsel to respond to the supplemental complaint. This may account

for the more detailed response to the supplemental complaint regarding his alleged attempts to determine in advance

whether he could make a contribution on behalf of Jessica as her legal guardian.

43 See Heckler v. Chaney , 470 U.S. 821 (1985).

MUR 7605 (Chad E. Price)

First General Counsel’s Report

Page 11 of 12

1 as treasurer knowingly accepted an excessive contribution in the name of another in violation of

2 52 U.S.C. §§ 30116(f) and 30122 with a caution to the Hill Committee.

3 IV. RECOMMENDATIONS

4 1. Dismiss the allegations that Chad Price violated 52 U.S.C. §§ 30116(a) and

7 2. Dismiss the allegations that Judson Hill and Chris D. Clayton in his official

8 capacity violated 52 U.S.C. §§ 30116(f) and 30122.

10 3. Issue a letter of caution to Chad Price.

12 4. Issue a letter of caution to Judson Hill for Congress and Chris D. Clayton in his

13 official capacity as treasurer.

15 5. Close the file as to the Respondents.

17 6. Approve the attached Factual and Legal Analyses.

19 7. Approve the appropriate letters.

21 Lisa J. Stevenson

22 Acting General Counsel

24 Charles Kitcher

25 Acting Associate General Counsel

26 for Enforcement

29 ___________________________ ______________________________

30 Date Stephen Gura

31 Deputy Associate General Counsel

32 for Enforcement

36 ______________________________

37 Mark D. Shonkwiler

38 Assistant General Counsel

41 ______________________________

42 Kimberly D. Hart

43 Attorney