February 14, 2024 

MEMORANDUM 

To: The Commission 

Through: Alec Palmer 

Staff Director 

From: Patricia C. Orrock 

Audit Division 

Nicole Burgess 

Audit Manager 

By: Robert Morcomb 

Lead Auditor 

Chief Compliance Officer 

Zuzana O. Pacious 

Acting Assistant Staff Director 

Subject: Audit Division Recommendation Memorandum on the 1199 SEIU United 

Healthcare Workers East Federal Political Action Fund (A21-10) 

Pursuant to Commission Directive No. 70 (FEC Directive on Processing Audit Reports), 

the Audit staff presented the Draft Final Audit Report (DFAR) to the 1199 SEIU United 

Healthcare Workers East Federal Political Action Fund (1199 SEIU) on January 9, 2024 

(see attachment). 1199 SEIU did not request an audit hearing. 

This memorandum provides the Audit staff’s recommendation for each finding outlined in 

the DFAR. 

In response to the DFAR, the committee provided additional information, as noted below. 

Finding 1. Misstatement of Financial Activity 

In response to the DFAR, 1199 SEIU filed amended disclosure reports that corrected 

the public record. 

The Audit staff recommends that the Commission find that, in 2019, 1199 SEIU 

overstated its beginning and ending cash on hand balances by $161,025. In 2020, 
2 

1199 SEIU overstated beginning and ending cash on hand balances by $161,025 and 

$96,649, respectively. 

Finding 2. Reporting of Apparent Independent Expenditures 

In response to the DFAR, 1199 SEIU agreed with the DFAR’s conclusion pertaining 

to the amended disclosure reports which corrected the disclosure of independent 

expenditures on Schedule E. 1199 SEIU further stated it withdrew its “...[r]eference 

following the audit exit conference to a figure of $2.5 million of reported 

independent expenditures, because it does not reflect either the public record or the 

Committee’s internal records...” 

A. Reporting of Apparent Independent Expenditures 

The Audit staff recommends that the Commission find that 1199 SEIU failed to 

properly disclose apparent independent expenditures, totaling $1,075,248, on 

Schedule E (Independent Expenditures). 

B. Failure to File 24/48-Hour Reports for Apparent Independent Expenditures 

The Audit staff recommends that the Commission find that 1199 SEIU failed to 

file 24/48-hour reports for apparent independent expenditures, totaling $75,500. 

Finding 3. Recordkeeping for Communications 

In response to the DFAR, 1199 SEIU stated it had no further records of 

communications beyond those previously provided as acknowledged by the DFAR. 

As a result of this document submission, 1199 SEIU demonstrated that it maintained 

records in sufficient detail, to verify the proper reporting for communication 

disbursements. Finally, 1199 SEIU reiterated its resolve in securing “all available 

information from its vendors” should it undertake independent expenditures again, 

in order to comply with the recordkeeping requirements. 

The Audit staff now recommends that the Commission find that 1199 

SEIU materially complied with the recommendation to maintain records, in 

sufficient detail, to verify the proper reporting for communication disbursements. 

The Office of General Counsel has reviewed this memorandum and concurs with the 

recommendations. 

If this memorandum is approved, the Proposed Final Audit Report will be prepared and 

circulated within 30 days of the Commission’s approval. 

If this Audit Division Recommendation Memorandum is not approved on a tally vote, 

Directive No. 70 states that the matter will be placed on the next regularly scheduled 

open session agenda. 

Documents related to this audit report can be viewed in the Voting Ballot Matters folder. 

Should you have any questions, please contact Robert Morcomb or Nicole Burgess at 694-

1200. 

Attachment: 

- Draft Final Audit Report of the Audit Division on the 1199 SEIU United Healthcare 

Workers East Federal Political Action Fund 
3 

cc: Office of General Counsel 
 

 

 

 

 

DRAFT

Why the Audit 

Was Done 

Federal law permits the 

Commission to conduct 

audits and field 

investigations of any 

political committee that is 

required to file reports 

under the Federal 

Election Campaign Act 

(the Act). The 

Commission generally 

conducts such audits 

when a committee 

appears not to have met 

the threshold 

requirements for 

substantial compliance 

with the Act. 2

 The audit 

determines whether the 

committee complied with 

the limitations, 

prohibitions and 

disclosure requirements 

of the Act. 

Draft Final Audit Report of the 

Audit Division on the 

1199 SEIU United Healthcare 

Workers East Federal Political 

Action Fund1 

(January 1, 2019 - December 31, 2020) 

About the Committee (p. 2) 

The 1199 SEIU United Healthcare Workers East Federal Political 

Action Fund is a separate segregated fund – labor organization of 

1199 SEIU United Healthcare Workers East and is headquartered 

in New York, New York. For more information, see the chart on 

the Committee Organization, p.2. 

Financial Activity (p. 2) 

• Receipts 

o Contributions from Individuals $ 13,153,782 

o Other Federal Receipts 4 

Total Receipts $ 13,153,786 

• Disbursements 

o Transfers to Affiliated/Other 

Party Committees $ 10,807,053 

o Other Disbursements 1,623,242 

o Contributions to Federal 

Candidates/Committee and 

Other Political Committees 337,250 

o Refund of Contributions to 

Individuals 203,833 

o Operating Expenditures 96,694 

Total Disbursements $ 13,068,072 

1 On January 24, 2023, the committee filed a Statement of Organization changing its name from 1199 

Service Employees Int’l Union Federal Political Action Fund to 1199 SEIU United Healthcare Workers 

East Federal Political Action Fund. 2 52 U.S.C. §30111(b). 
Future Action 

The Commission may 

initiate an enforcement 

action, at a later time, 

with respect to any of the 

matters discussed in this 

report. 

Findings and Recommendations (p. 3) 

• Misstatement of Financial Activity (Finding 1) 

• Reporting of Apparent Independent Expenditures (Finding 2) 

• Recordkeeping for Communications (Finding 3) 

DRAFT
Draft Final Audit Report of the 

Audit Division on the 

1199 SEIU United Healthcare 

Workers East Federal Political 

Action Fund 

DRAFT

(January 1, 2019 - December 31, 2020) 
Table of Contents 

Page 

Part I. Background 

Authority for Audit 1 

Scope of Audit 1 

Records Obtained Through Subpoena 1 

Part II. Overview of Committee 

Committee Organization 2 

Overview of Financial Activity 2 

Part III. Summaries 

Findings and Recommendations 3 

Part IV. Findings and Recommendations 

Finding 1. Misstatement of Financial Activity 5 

Finding 2. Reporting of Apparent Independent Expenditures 6 

Finding 3. Recordkeeping for Communications 11 

DRAFT
 

 

 

 

 

 

 

 

 

1 

Part I 

Background 

Authority for Audit 

This report is based on an audit of the 1199 SEIU Service United Healthcare Workers 

East Federal Political Action Fund (1199 SEIU), undertaken by the Audit Division of the 

Federal Election Commission (the Commission) in accordance with the Federal Election 

Campaign Act of 1971, as amended (the Act). The Audit Division conducted the audit 

pursuant to 52 U.S.C. §30111(b), which permits the Commission to conduct audits and 

field investigations of any political committee that is required to file a report under 52 

U.S.C. §30104. Prior to conducting any audit under this subsection, the Commission 

shall perform an internal review of reports filed by selected committees to determine if 

the reports filed by a particular committee meet the threshold requirements for substantial 

compliance with the Act. 52 U.S.C. §30111(b). 

Scope of Audit 

Following Commission-approved procedures, the Audit staff evaluated various risk 

factors and as a result, this audit examined: 

1. the consistency between reported figures and bank records; 

2. the disclosure of individual contributors’ occupation and name of employer; 

3. the disclosure of independent expenditures; 

4. the disclosure of disbursements, debts and obligations; 

5. the completeness of records; and 

6. other committee operations necessary to the review. 

Records Obtained Through Subpoena 

Following numerous written and verbal attempts by the Audit staff to obtain the records 

required to perform the audit, on June 1, 2022, the Commission issued a Subpoena to 

Produce Documents and Order to Submit Written Answers to 1199 SEIU.3 The 

subpoena contained a request for a database of receipts, bank statements, sample 

documentation for donor payroll deductions authorizations, copies of negotiated checks, 

copies of records and media and the completed Internal Control Questionnaire provided 

by the Federal Election Commission. In response the subpoena request, 1199 SEIU 

submitted records on July 1, 2022. 

DRAFT 3 See supra footnote 1. 
 

 

 

 

2 

Part II 

Overview of Committee 

Committee Organization 

Important Dates 

• Date of Registration September 1, 1999 

• Audit Coverage January 1, 2019 - December 31, 2020 

Headquarters New York, New York 

Bank Information 

• Bank Depositories One 

• Bank Accounts One checking account 

Treasurer 

• Treasurer When Audit Was Conducted Helen Schaub (11/9/2021 – Present) 

Timothy Foley (5/3/2017 – 11/8/2021) 

• Treasurer During Period Covered by Audit Timothy Foley 

Management Information 

• Attended FEC Campaign Finance Seminar Yes 

• Who Handled Accounting and 

Recordkeeping Tasks 

Paid Staff 

DRAFT

Overview of Financial Activity 

(Audited Amounts) 

Cash on hand @ January 1, 2019 $ 1,570,822 

Receipts 

o Contributions from Individuals 13,153,782 

o Other Federal Receipts 4 

Total Receipts $ 13,153,786 

Disbursements 

o Transfers to Affiliated/Other Party 

Committees 

10,807,053 

o Other Disbursements 1,623,242 

o Contributions to Federal Candidates 

/Committees and Other Political Committees 337,250 

o Refund of Contributions to Individuals 203,833 

o Operating Expenditures 96,694 

Total Disbursements $ 13,068,072 

Cash on hand @ December 31, 2020 $ 1,678,2784 

4 The 2020 ending cash on hand does not equal the beginning cash on hand plus reported receipts minus reported 

disbursements. The difference is due to voided checks that were outstanding, some as old as 13 years or more. 
 

3 

Part III 

Summaries 

Findings and Recommendations 

Finding 1. Misstatement of Financial Activity 

During audit fieldwork, a comparison of 1199 SEIU’s reported financial activity with its 

bank records revealed a misstatement of beginning and ending cash on hand balances for 

calendar years 2019 and 2020. Specifically, for 2019, 1199 SEIU overstated its 

beginning and ending cash on hand balances by $161,025. For 2020, 1199 SEIU 

overstated its beginning cash on hand balance by $161,025 and overstated its ending cash 

on hand balance by $96,649. In response to the Interim Audit Report recommendation, 

1199 SEIU did not correct the public record by amending its cash on hand balance on its 

most recently filed disclosure report. In addition, 1199 SEIU has not filed a Form 99 

with an explanation that the cash on hand change resulted from a prior period adjustment. 

Absent the filing of its most recently filed disclosure report with the amended cash on 

hand balance and a Form 99 to explain the cash on hand change, 1199 SEIU’s cash on 

hand balance remains misstated. (For more detail, see p. 5.) 

Finding 2. Reporting of Apparent Independent 

Expenditures 

During audit fieldwork, the Audit staff reviewed expenditures, totaling $825,663, that 

1199 SEIU disclosed on Schedule B, Line 29 (Other Disbursements). These appear to be 

independent expenditures that contain express advocacy and should have been disclosed 

on Schedule E, Line 24 (Itemized Independent Expenditures). Additionally, of the 

apparent independent expenditures totaling $825,663, the Audit staff identified two 

disbursements, totaling $75,500, for which 1199 SEIU may have been required to file 24-

hour reports depending on the date of public dissemination. 

In response to the Interim Audit Report recommendation, 1199 SEIU filed amended 

disclosure reports that disclosed on Schedule E, Line 24, $1,075,248 in apparent 

independent expenditures. In addition, 1199 SEIU acknowledged that the two 

disbursements, totaling $75,500, were independent expenditures attributed to Joseph 

Biden for President and were disseminated between October 6th and November 3rd, 2020. 

As such, 1199 SEIU should have filed 24-hour reports for the two independent 

expenditures totaling $75,500. (For more detail, see p. 6.) 

Finding 3. Recordkeeping for Communications 

During audit fieldwork, the Audit staff reviewed disbursements for communications to 

verify the accuracy of the information and proper classification of transactions disclosed 

on 1199 SEIU’s reports. The Audit staff identified 17 transactions on 1199 SEIU’s 

24/48-Hour Reports of Independent Expenditures, totaling $1,025,299, with purposes 

including, “digital ads,” “digital ads set up,” “projected digital ad buy” and “projected 

DRAFT
 

4 

staff compensation for phone banking.” Documentation provided by 1199 SEIU was 

insufficient to verify proper reporting. In response to the Interim Audit Report 

recommendation, 1199 SEIU stated it has exhausted the available efforts to locate and 

provide all the documentation requested by the Audit staff. In a follow-up request for 

clarification, 1199 SEIU provided a schedule of costs per media device per geographic 

location that demonstrated that the total cost for digital media advertising for federal 

candidates was $1,377,080. Further, 1199 SEIU provided documentation for independent 

expenditures totaling $253,327 (see Finding 2 – Reporting of Apparent Independent 

Expenditures). The Audit staff concludes 1199 SEIU did not provide documentation for 

digital media ads, totaling $575,651, supporting Joseph Biden for President as reported 

on amended Schedule E. (For more detail, see p. 11.) 

DRAFT
 

 

 

 

 

5 

Part IV 

Findings and Recommendations 

Finding 1. Misstatement of Financial Activity 

Summary 

During audit fieldwork, a comparison of 1199 SEIU’s reported financial activity with its 

bank records revealed a misstatement of beginning and ending cash on hand balances for 

calendar years 2019 and 2020. Specifically, for 2019, 1199 SEIU overstated its 

beginning and ending cash on hand balances by $161,025. For 2020, 1199 SEIU 

overstated its beginning cash on hand balance by $161,025 and overstated its ending cash 

on hand balance by $96,649. In response to the Interim Audit Report recommendation, 

1199 SEIU did not correct the public record by amending its cash on hand balance on its 

most recently filed disclosure report. In addition, 1199 SEIU has not filed a Form 99 

with an explanation that the cash on hand change resulted from a prior period adjustment. 

Absent the filing of its most recently filed disclosure report with the amended cash on 

hand balance and a Form 99 to explain the cash on hand change, 1199 SEIU’s cash on 

hand balance remains misstated. 

DRAFT

Legal Standard 

Contents of Reports. Each report must disclose: 

• The amount of cash on hand at the beginning and end of the reporting period; 

• The total amount of receipts for the reporting period and for the calendar year; 

• The total amount of disbursements for the reporting period and for the calendar year; 

and 

• Certain transactions that require itemization on Schedule A (Itemized Receipts) or 

Schedule B (Itemized Disbursements). 52 U.S.C. §30104(b)(1), (2), (3), (4), and (5). 

Facts and Analysis 

A. Facts 

During audit fieldwork, the Audit staff reconciled 1199 SEIU’s most recent reported 

financial activity, filed prior to the audit notification, with its bank records for calendar 

years 2019 and 2020. The reconciliation determined that 1199 SEIU’s 2019 beginning 

and ending cash on hand balances were overstated by $161,025. In 2020, 1199 SEIU 

overstated beginning and ending cash on hand balances by $161,025 and $96,649, 

respectively. The cash on hand discrepancies for 2019 and 2020 resulted primarily from 

prior period adjustments as well as minor misstatements for disbursements during 

calendar year 2020. 

B. Interim Audit Report & Audit Division Recommendation 

The Audit staff discussed the misstatements for 2019 and 2020 with 1199 SEIU 

representatives during the exit conference and provided schedules detailing the 

misstatements. During the exit conference, 1199 SEIU representatives inquired if the 

Audit staff was able to determine the cause of the discrepancies. The Audit staff 
 

 

 

 

 

 

 

 

6 

DRAFT

explained that the misstatements stemmed from discrepancies that occurred prior to the 

audit period. In response to the exit conference, 1199 SEIU acknowledged the 

discrepancies between the beginning and ending cash on hand balances on its reports and 

the corresponding amounts on 1199 SEIU’s bank records for 2019 and 2020. 

Additionally, 1199 SEIU explained that these discrepancies have persisted for the past 10 

years, and it has no reason to believe that the discrepancies were due to wrongdoing. 

Lastly, 1199 SEIU stated it would file a Form 99, “...that corrects these misstatements 

and explains a one-time adjustment of the cash balance on a subsequent periodic report in 

order to reconcile that report, and so future reports as well, with the cash balance.” 

The Interim Audit Report recommended that 1199 SEIU amend its most recently filed 

disclosure report to correct the cash on hand balance. Further, it was recommended that 

1199 SEIU file a Form 995 (Miscellaneous Electronic Submission) with an explanation 

that the cash on hand balance change resulted from a prior period adjustment. 

C. Committee Response to Interim Audit Report 

In response to the Interim Audit Report recommendation, 1199 SEIU stated it was 

amending its most recent report to make a one-time prior period adjustment and that it 

would file a Form 99. As of the date of this report, 1199 SEIU did not correct the public 

record by amending its cash on hand balance on its most recently filed disclosure report. 

In addition, 1199 SEIU has not filed a Form 99 with an explanation that the cash on hand 

change resulted from a prior period adjustment. However, 1199 SEIU did file amended 

disclosure reports for the October Quarterly 2020, Pre-General 2020, Post-General 2020 

and Year- End 2020 that increased the amount reported on Line 11a(i) (Contributions 

from Individuals Unitemized) and Line 11a(ii) (Contributions from Individuals Itemized), 

by a total of $77,860. The amended ending cash on hand balance difference increased 

from $96,649 to $174,510. 

Absent amending the cash on hand balance on its most recently filed disclosure report 

and including an explanation of the cash on hand change on a Form 99, 1199 SEIU’s 

cash on hand balance remains misstated. 

Finding 2. Reporting of Apparent Independent 

Expenditures 

Summary 

During audit fieldwork, the Audit staff reviewed expenditures, totaling $825,663, that 

1199 SEIU disclosed on Schedule B, Line 29 (Other Disbursements). These appear to be 

independent expenditures that contain express advocacy and should have been disclosed 

on Schedule E, Line 24 (Itemized Independent Expenditures). Additionally, of the 

apparent independent expenditures totaling $825,663, the Audit staff identified two 

5 1199 SEIU was advised by the Audit staff if it chose to file a Form 99, instead of amending its disclosure 

reports, the form must contain all pertinent information that is required on each schedule. 
 

 

 

 

 

 

7 

disbursements, totaling $75,500, for which 1199 SEIU may have been required to file 24-

hour reports depending on the date of public dissemination. 

In response to the Interim Audit Report recommendation, 1199 SEIU filed amended 

disclosure reports that disclosed on Schedule E, Line 24, $1,075,248 in apparent 

independent expenditures. In addition, 1199 SEIU acknowledged that the two 

disbursements, totaling $75,500, were independent expenditures attributed to Joseph 

Biden for President and were disseminated between October 6th and November 3rd, 

2020.6 As such, 1199 SEIU should have filed 24-hour reports for the two independent 

expenditures totaling $75,500. 

Legal Standard 

A. Definition of Independent Expenditures. An independent expenditure is an 

expenditure made for a communication expressly advocating the election or defeat of 

a clearly identified candidate that is not made in cooperation, consultation, or concert 

with, or at the request or suggestion of, a candidate, a candidate’s authorized 

committee, or their agents, or a political party or its agents. 

A clearly identified candidate is one whose name, nickname, photograph or drawing 

appears, or whose identity is apparent through unambiguous reference, such as “your 

Congressman,” or through an unambiguous reference to his or her status as a 

candidate, such as “the Democratic presidential nominee” or “Republican candidate 

for Senate in this state.” 

Expressly advocating means any communication that: 

• Uses phrases such as “vote for the President” or “re-elect your Congressman” or 

communications of campaign slogan(s) or individual word(s), which in context can 

have no other reasonable meaning than to urge election or defeat of one or more 

clearly identified candidates; or 

• When taken as a whole and with limited references to external events, such as 

proximity to the election, could be interpreted by a reasonable person only as 

advocating the election or defeat of one or more clearly identified candidates. 11 

CFR §§100.16(a), 100.17 and 100.22. 

B. Disclosure Requirements – General Guidelines. An independent expenditure shall 

be reported on Schedule E if, when added to other independent expenditures made to 

the same payee during the same calendar year, it exceeds $200. Independent 

expenditures made (i.e., publicly disseminated) prior to payment should be disclosed 

as memo entries on Schedule E and as a debt on Schedule D. Independent 

expenditures of $200 or less need not be itemized, though the committee must report 

the total of those expenditures on Line (b) on Schedule E. 11 CFR 

§§104.3(b)(3)(vii)(C), 104.4(a) and 104.11. 

6 In absence of the specific date of dissemination, the invoice dates of October 23rd and October 26th ,2020, 

were used by the Audit staff. 

DRAFT
 

 

 

 

 

 

 

 

 

 

 

 

8 

C. 24-Hour Independent Expenditure Reports. Any independent expenditures 

aggregating $1,000 or more, with respect to any given election, and made after the 

20th day but more than 24 hours before the day of an election must be reported and 

the report must be received by the Commission within 24 hours after the expenditure 

is made. A 24-hour report is required for each additional $1,000 that aggregates. The 

24-hour report must be filed on a Schedule E. The date that a communication is 

publicly disseminated serves as the date that the Committee must use to determine 

whether the total amount of independent expenditures has, in the aggregate, reached 

or exceeded the threshold reporting amount of $1,000. 11 CFR §§104.4(f) and 

104.5(g)(2). 

D. 48-Hour Independent Expenditure Reports. Any independent expenditure 

aggregating $10,000 or more for an election in any calendar year, up to and including 

the 20th day before an election, must disclose this activity within 48 hours each time 

that the expenditures aggregate $10,000 or more. The reports must be filed with the 

Commission within 48 hours after the expenditure is made. The date that a 

communication is publicly disseminated serves as the date that the Committee must 

use to determine whether the total amount of independent expenditures has, in the 

aggregate, reached or exceeded the threshold reporting amount of $10,000. 11 CFR 

§§104.4(f) and 104.5(g)(1). 

E. Allocation of Expenses Between Candidates. Expenditures made on behalf of more 

than one clearly identified federal candidate shall be attributed to each such candidate 

according to the benefit expected to be derived. In the case of a publication or 

broadcast communication, the attribution shall be determined by the proportion of 

space or time devoted to all candidates. This method shall be used to allocate 

payments involving both clearly identified federal candidates and one or more clearly 

identified non-federal candidates. 11 CFR §106.1(a). 

Facts and Analysis 

A. Reporting of Apparent Independent Expenditures 

1. Facts 

During audit fieldwork, the Audit staff reviewed disbursements to ensure proper 

reporting. The Audit staff noted that 1199 SEIU did not disclose these apparent 

independent expenditures on Schedule E, rather the disbursements, totaling 

$825,663, were disclosed on Schedule B, Line 29 and appear to be media related. 

These expenditures were for 127

 digital ads, one mailer, one text script and one 

phone script which contain express advocacy. An analysis for these expenditures 

is as follows: 

DRAFT 7 There were 12 distinct digital ads, which referenced various early voting periods and the November 3rd 

general election date. 
 

 

 

 

 

 

 

 

 

 

 

 

9 

Apparent Independent Expenditures Reported as Other Disbursements 

(Associated Digital Ads, Mailer, Phone and Text Scripts Invoices Provided 

under 11 CFR §100.22(a)) 

The purposes on the invoices provided to the Audit staff for these expenditures 

were: paid media campaigns, service fees for campaigns, call hub dialers and text 

tools, and card print for card stock. The digital ads provided to the Audit staff 

contained phrases such as, “Vote Biden-Harris Nov.3,” “Vote Early for BidenHarris Oct.12-30,” “Vote Early for Biden-Harris Oct. 15-31,” “Vote Early for 

Biden-Harris Oct.13 – 30,” “Vote Siegel Nov 3,” and “Vote Ortiz Jones Nov 3.” 

All of these communications contained language expressly advocating the 

election or defeat of a clearly identified candidate, as defined under 11 CFR 

§100.22(a). 

DRAFT

2. Interim Audit Report & Audit Division Recommendation 

The Audit staff discussed this matter with 1199 SEIU representatives during the 

exit conference and provided a schedule detailing these expenditures. During the 

exit conference, 1199 SEIU representatives requested that the Audit staff explain 

the finding, including how the finding total was derived. The Audit staff 

explained the schedule and the various amounts identified. In response to the exit 

conference, 1199 SEIU stated that, “as the result of an administrative error the 

Committee appears to have disclosed its independent expenditures on line 29.” In 

addition, 1199 SEIU stated that, with the exception of two payments to its phone 

bank vendor, all expenditures were disclosed on its 24/48-hour reports. 1199 

SEIU further stated that, as recommended by the Audit staff, it would amend its 

reports to disclose all applicable expenditures on Schedule E. 

The Interim Audit Report recommended that 1199 SEIU provide documentation 

that apparent independent expenditures, totaling $825,663, did not require 

reporting as independent expenditures. Absent such documentation, the Interim 

Audit Report recommended that 1199 SEIU amend its reports to disclose these 

disbursements as independent expenditures on Schedule E. 

3. Committee Response to Interim Audit Report 

In response to the Interim Audit Report recommendation, 1199 SEIU filed the 

2020 Pre-General and the 2020 Post-General amended disclosure reports which 

disclosed, on Schedule E, Line 24, $1,075,248 in apparent independent 

expenditures. In addition, 1199 SEIU acknowledged that two disbursements, 

totaling $75,500, were independent expenditures attributed to Joseph Biden for 

President and were disseminated between October 6th and November 3rd, 2023. In 

response to a request for clarification, 1199 SEIU provided updated 

documentation that increased the amount of apparent independent expenditures by 

$253,327, that were not previously reported on Schedule E, Line 24, from 

$821,9218, to $1,075,248. 1199 SEIU stated the amendments were filed, “to 

8 1199 SEIU stated one mailer, totaling $3,742, was a member communication and was disseminated only 

to the restricted class of the it’s organization. As a result, the Audit staff deducted $3,742 from the total. 

($825,663 - $3,742). 
 

 

 

 

 

 

 

 

 

10 

correct the misattributions to Line 29 of disbursements that should have been 

disclosed on Schedule E, and to update the estimates reflected on the 48-Hour and 

24-Hour reports submitted during October and November 2020 with information 

ascertained since.” 

The Audit staff concludes that 1199 SEIU did not disclose apparent independent 

expenditures that contain express advocacy, totaling $1,075,248, on Schedule E, 

Line 24. 

B. Failure to File 24-Hour Reports for Apparent Independent Expenditures 

1. Facts 

In addition to not reporting the apparent independent expenditures during the 

audit period, 1199 SEIU did not file two 24-hour reports, totaling $75,500.9  The 

two disbursements were reported on Schedule B, Line 29, for phone bank scripts 

that contained express advocacy. 

DRAFT

2. Interim Audit Report & Audit Division Recommendation 

The Audit staff discussed this matter with 1199 SEIU representatives during the 

exit conference and provided the relevant schedules. During the exit conference, 

1199 SEIU representatives questioned whether 1199 SEIU filed 48-hour reports 

for the two apparent independent expenditures, totaling $75,500, and the Audit 

staff confirmed that such reports were not filed. In response to the exit 

conference, 1199 SEIU stated that, apart from two payments to its phone bank 

vendor, all expenditures were disclosed on its 24/48-hour reports. 

The Audit staff reviewed all 24/48-hour reports filed by 1199 SEIU and 

maintained that 24-hour reports were not filed for the two apparent independent 

expenditures, totaling $75,500. 

3. Committee Response to Interim Audit Report 

In response to the Interim Audit Report recommendation, 1199 SEIU stated that 

the two payments were attributed to independent expenditures supporting Joseph 

Biden for President via telephone calls. These calls were part of a campaign and 

were disseminated between October 6 and November 3, 2020.10 1199 SEIU 

stated it believed the volume of calls were evenly spaced throughout the period. 

The Audit staff concludes that 1199 SEIU did not file 24-hour reports for the two 

independent expenditures, totaling $75,500. 

9 The date the expenditure is publicly distributed serves as the date that the independent expenditure is 

made for the purposes of the additional 24/48-hour filing requirements. In the absence of a known date 

for public dissemination, the Audit staff used the invoice date to determine if a 24/48-hour report was 

required. 10 See supra footnote 6. 
 

 

 

 

 

 

 

 

11 

Finding 3. Recordkeeping for Communications 

Summary 

During audit fieldwork, the Audit staff reviewed disbursements for communications to 

verify the accuracy of the information and proper classification of transactions disclosed 

on 1199 SEIU’s reports. The Audit staff identified 17 transactions on 1199 SEIU’s 

24/48-Hour Reports of Independent Expenditures, totaling $1,025,299, with purposes 

including, “digital ads,” “digital ads set up,” “projected digital ad buy” and “projected 

staff compensation for phone banking.” Documentation provided by 1199 SEIU was 

insufficient to verify proper reporting. In response to the Interim Audit Report 

recommendation, 1199 SEIU stated it has exhausted the available efforts to locate and 

provide all the documentation requested by the Audit staff. In a follow-up request for 

clarification, 1199 SEIU provided a schedule of costs per media device per geographic 

location that demonstrated that the total cost for digital media advertising for federal 

candidates was $1,377,080.11 , 1199 SEIU provided documentation for independent 

expenditures totaling $253,327 (see Finding 2 – Reporting of Apparent Independent 

Expenditures). The Audit staff concludes 1199 SEIU did not provide documentation for 

digital media ads, totaling $575,65112, supporting Joseph Biden for President as reported 

on amended Schedule E. 

DRAFT

Legal Standard 

A. Formal Requirements Regarding Reports and Statements. Each political 

committee shall maintain records with respect to the matters required to be reported 

which shall provide in sufficient detail the necessary information and data from which 

the filed reports may be verified, explained, clarified, and checked for accuracy and 

completeness. 11 CFR §104.14(b)(1). 

B. Preserving Documents. Committees must preserve these records for 3 years after a 

report is filed. 52 U.S.C §30102(d). 

Facts and Analysis 

A. Facts 

During audit fieldwork, the Audit staff reviewed disbursements for communications 

to verify the accuracy of the information and proper classification of transactions 

disclosed on the reports. 1199 SEIU disclosed 17 transactions, totaling $1,025,299, 

for which documentation was insufficient to make a determination pertaining to 

whether these disbursements were correctly reported. 

The Audit staff’s analysis resulted in the following: 

11 1199 SEIU filed Schedule Es for the digital media vendor totaling $1,377,350. 12 Total independent expenditures reported on amended Schedule Es from the digital media vendor, 

$1,377,350, less total independent expenditures that 1199 SEIU provided documentation for, $801,699, 

($1,377,350 - $801,699 = $575,651). 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

12 

Disbursements – Insufficient Documentation ($1,025,299) 

1199 SEIU reported 17 transactions, totaling $1,025,299, on 24/48-Hour Reports of 

Independent Expenditures with purposes including, “digital ads,” “projected digital 

ad buy,” and “digital ads setup.” The 17 transactions include one 48-hour report that 

1199 SEIU disclosed with an amount of $0 and a purpose of, “projected staff 

compensation for phone banking” and the vendor as 1199 SEIU United Healthcare 

Workers East. Without sufficient documentation, the Audit staff was unable to verify 

the reporting of these transactions as filed on the 24/48-Hour Reports of Independent 

Expenditures. The Audit staff requested copies of the communications, invoices and 

supporting documentation for the 17 transactions, totaling $1,025,299. As of the date 

of this report, 1199 SEIU has not provided documentation that would allow the Audit 

staff to verify whether the transactions were reported correctly. 

DRAFT

B. Interim Audit Report & Audit Division Recommendation 

The Audit staff discussed this matter with 1199 SEIU representatives during the exit 

conference and provided a schedule of the transactions for which further records were 

necessary to verify the accuracy of 1199 SEIU’s reporting. During the exit 

conference, 1199 SEIU representatives inquired about the documentation provided 

for the identified amounts, totaling $1,025,299. The Audit staff explained that 1199 

SEIU did not provide any documentation to show which ads were run and the costs 

associated with the ads. 1199 SEIU representatives also inquired about the identified 

discrepancy between the amount reported for one media vendor and the actual 

amount that cleared the bank. The Audit staff explained that 1199 SEIU overreported the 24/48-hour reports to one vendor by $176,72013. 

In response to the exit conference, 1199 SEIU stated that, during the 2020 election 

cycle, it filed 24/48-hour reports “disclosing over $2.5 million in projected and actual 

expenditures to [its digital media vendor] for setup placement of digital advertising.” 

1199 SEIU stated that this amount was consistent with the digital media vendor’s 

invoices and the payments made to this vendor. 1199 SEIU also stated its digital 

media vendor tracked the projected and ultimate cost for the 24/48-hour reports and 

that it relied on the digital media vendor “...to maintain updated, detailed breakdowns 

of its ad spending.” 1199 SEIU stated that it has inquired with the digital media 

vendor about additional documentation supporting the reported allocation of costs for 

the digital ads and was told that the digital media vendor had none of the requested 

documentation. Should the media vendor produce documentation for the ads, 1199 

SEIU stated that it would forward the documentation to the Audit staff. 

In response to 1199 SEIU’s assertion that it filed 24/48-hour reports disclosing over 

$2,500,000 in “projected and actual expenditures” to its digital media vendor, the 

Audit staff reviewed the 24/48-hour reports filed by 1199 SEIU for the 2020 election 

cycle and maintains that 1199 SEIU filed 24/48-hour reports, totaling $1,777,962, for 

the 2020 election cycle. As of the date of this report, 1199 SEIU did not provide the 

13 1199 SEIU reported $1,691,721 in transactions on its 24/48-hour reports to its digital media vendor; 

however, only $1,515,000 cleared its bank account, which is an overreported difference of $176,721. 
 

 

 

 

 

 

 

13 

Audit staff with documentation that supported its assertion that $2,500,000 in 24/48-

hour reports were filed for the 2020 election cycle. 

The Interim Audit Report recommended that 1199 SEIU provide, in sufficient detail, 

documentation that allowed for verification of proper reporting for the 

communication disbursements, totaling $1,025,299. In addition, the Interim Audit 

Report recommended that, 1199 SEIU provide documentation to support the 48-hour 

report from 1199 SEIU United Healthcare Workers East filed on October 9, 2020, 

totaling $0. 

C. Committee Response to Interim Audit Report 

In response to the Interim Audit Report recommendation, 1199 SEIU stated it has 

exhausted the available efforts to locate and provide the documentation requested by 

the Audit staff. In a follow-up request for clarification, 1199 SEIU provided a 

schedule of costs per media device and per geographic location that demonstrated that 

the total cost for digital media advertising for federal candidates totaled $1,377,080. 

1199 SEIU stated that on November 18, 2020, this information was provided to 1199 

SEIU by its digital media vendor in a post-election report and includes final figures 

for 1199 SEIU’s independent expenditures in the jurisdictions, including states 

supporting Mr. Biden, six congressional candidates and two senatorial candidates. In 

addition, 1199 SEIU filed an amended Schedule D to report a debt owed to 1199 

SEIU United Healthcare Workers East and on an amended Schedule E, 1199 SEIU 

included an independent expenditure, for $118,04914 that it previously filed a 48-hour 

report totaling $0. Finally, SEIU stated “...in the event it again undertakes 

independent expenditures it will contemporaneously secure all available information 

from its vendors in order for the Committee both to prepare its reports and to ensure 

compliance with its recordkeeping requirements...” In summary, 1199 SEIU 

provided documentation for independent expenditures, totaling $253,327, however, it 

was unable to provide documentation for the remaining $575,651 in digital media ads 

supporting Joe Biden for President. 

DRAFT 14 This amount is now included in the $253,327 see Finding 2 – Reporting of Apparent Independent 

Expenditures.