January 21, 2010

Dear Executive Committee Members:

It has come to my attention that the Chairman of the Yuma Republican Party, Phil Townsend,
has sent a letter to members of the Arizona Republican Party Executive Committee alleging
several serious improprieties on the part of myself and Lee Miller, our Legal Counsel. I felt it
was incumbent upon me to respond in kind.

There have been a number of recent inaccurate emails, blogs and reports regarding the financial
operations of the AZGOP. In every instance where I have been contacted by members of the
Executive Committee either by phone or email regarding any of these communications, I have
responded to their questions as quickly as possible. Unfortunately, Mr. Townsend, decided he
would rather write a letter than get the facts.

The AZGOP files both federal and state reports for various contributions and expenditures at
different times depending on the reporting requirements of the FEC and Arizona law. We have
never failed to file nor been fined by the state or FEC for violations under my chairmanship;
although, we did pay a fine to the FEC in 2007 for violations that occurred prior to my
becoming chairman. During this time, we have filed numerous amended reports and responded
to regular inquires from the FEC on different matters. Campaign regulations are complex and
Byzantine to say the least.

With respect to the RNC transfer of $50,000 that was done late in November of last year, it was
not reported in the FEC report filed on December 19th. By the time I reviewed the report, it was
too late to correct it. Missing a filing date is a serious matter and will result in a fine. It is better
to file and amend later, which is what we are doing. I have spoken with the RNC about it and
they understand we will amend the report. None of the RNC funds have been “used to pay
overhead,” as Mr. Townsend alleges.

With respect to the question regarding debts of the party asked by Donna Reagan during our
conference call on December 30th, what I said was we had accounts payables that needed to get
paid and I was working on doing that, but we had no debt and I had no intentions to borrow
money. We do have some payables that need to be listed on the FEC report and they will be on
the December 31, 2009 report that will be filed at the end of this month.

With respect to Mr. Abate and his letter, he was not provided all of the facts by Mike Hellon or
Shiree Verdone, campaign staff for Senator McCain. Certainly, the bylaws of the party allow
the Chairman and Treasurer to assign their check signing authority when necessary. This does
not relieve them from their fiduciary responsibilities to be fully aware and knowledgeable about
all expenditures. This was not what Mr. Hellon and Ms. Verdone were asking for me and
Timothy Lee to do. They demanded control over all Victory Program funds.
At the time they made their demands, there were several people in the room who can confirm
what occurred. I suggest that this be fully aired in our Executive Committee meeting on this
coming Saturday afternoon. It is sufficient to say that I had real concerns with their demands;
however, I felt it was prudent to check with counsel before deciding what to do with the Victory
Program. In addition to talking to Lee Miller, I took the time to call legal counsel for the RNC,
a former commissioner for the FEC, and explain the circumstances.

In both instances, the conclusion was the same. The AZGOP could not give check signing
privileges to campaign staff members of Senator McCain’s campaign. This would likely be a
violation of McCain-Feingold campaign laws. While it is legal for state parties to coordinate
with federal candidates on certain expenditures made by the party on behalf of their campaigns,
it is not proper to give control over those efforts and funds to the respective campaigns.

What, I along with the assistances of Legal Counsel, the Treasurer and members of the ad hoc
victory committee have done is to establish a framework for review of the Victory Program and
to put in place appropriate controls and procedures to assure we will not have legal problems
with the implementation of the Victory Program in 2010. If anyone would like more detailed
information on our financial reports, they are available on the FEC website as well as the
Secretary of State’s website. If you have trouble navigating either site, please call Brett Mecum
at our office and he will help you get the information you need.

Sincerely,
Randy Pullen