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REPORT OF THE AUDIT DIVISION

O~

Republican Leadership Fund

Approved August 12.. 1994

FEDERAL ELECTIOI' COMMISSIO~

999 E STREET, ~.W.

WASlIDJGTOS, D.C.
REPORT OF THE AUDIT DIVISION

ON

Republican Leadership Fund

Approved August U, 1994

FEDERAL ELECTION COMMISSIO:-<

999 E STREET, N.W.

WASHINGTON, D.C.
Executive summary

Final Audit Report

Background

Findings

TABLE OF CONTENTS

REPUBLICAN LEADERSHIP FUND

Page

1

3

3

5

Legal Analysis

Transmittal to Committee

13

17

19
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FINAL AUDIT REPORT

ON THE

REPUBLICAN LEADERSHIP FUND

EXECUTIVE SUMMARY

The Republican Leadership Fund (the Committee) registered

with the Federal Election Commission on May 4, 1992 as the

fundraising representative for certain joint fundraising

activities engaged in by the Bush-Quayle '92 Primary Committee

(Bush-Quayle (92), the Ohio Republican Party Federal Account

(ORP-Federal), and the Ohio Republican Party State Account

(ORP-State). Bush-Quayle '92 received federal matching funds.

The audit was conducted pursuant to the public funding

____ s_tatute__ at _~§ __U,_s .~.599_~_8J_~)_._

The findings of the audit were presented to the Committee

at an exit conference at the conclusion of audit fieldwork (June

17, 1993) and in the interim audit report approved by the

Commission on December 7, 1993. The Committee's responses to

the findings contained in the interim report are included in

this report.

The final audit report requires the Committee to pay

$28,901 to the U.S. Treasury; a balance of $26,575 remains

unpaid.

The findings contained in the final audit report are

summarized below.

Allocation of Expenses and Distribution of Net Proceeds -

11 CFR SS9034.8(c)(1l, (5), (7) and (8). Participants in a

joint fundraising activity are required to enter into a written

agreement which identifies a joint fundraising representative

and states a formula for allocating fundraising proceeds. Using

this formula, the fundraising representative must allocate

proceeds and expenses on a per event basis, and in turn,

distribute the net proceeds to the participants. The Committee,

however, did not follow these requirements and, as a result,

made excessive distributions of $7,045 to Bush-Quayle '92,

$22,148 to ORP-Federal, and $12,911 to ORP-State. (Some of

these funds represented excessive or earmarked contributions

which had to be repaid or reimbursed; see below.) The interim

report recommended that the Committee obtain reimbursements from

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:he participants and

correct allocations.

E~sh-Quayle '92, but

-2-

amend its disclosure reports to reflect

Reimbursements were received from

not from the other participants.

the

Excessive Contributions - 2 U.S.C. 5441a. The Committee

accepted $28,901 in excessive contributions designated for

Eush-Quayle '92. Under an FEe policy on unresolved excessive

contributions, the Committee was required to pay that amount to

the U.s. Treasury. (To date, $26,575 remains unpaid.) Although

the Committee claimed that some of the contributions actually

represented lawful joint contributions from spouses (husband and

wife each contributing up to the $1,000 limit), the Committee

failed to support the claim by providing signatures or written

authorizations from joint contributors.

Earmarked Contributions - 11 CFR S9034.8(c)(7)(iv). The

Committee received $8,675 in contributions made out to

committees not participating in the joint fundraiser. The

interim report recommended that the Committee refund these

contributions, but the Committee neither made the refunds nor

provided documentation showing that the contributions were

.intended.for__ the_Lundraiser-._as._claimed._ __ _ _

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.. ' . '." ",

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".-',

REPORT OF THE AUDIT DIVISION

ON THE

REPUBLICAN LEADERSHIP FUND

I. Background

A. Audit Authority

This report is based on an audit of the Republican

Leadership Fund (the Committee). The audit is mandated by Section

9038{a) of Title 26 of the United States Code. That section :

states that "After each matching payment period, the Commission

shall conduct a thorough examination and audit of the qualified

campaign expenses of every candidate and his authorized committees

who_re_c_ei'l~'-d_P~Y~'!1~~ __uncier~ect:i_on 9037." Also Section 9039(b)

of the united States Code and 5ection-9U3!~lTiIT2)--cff-t.ne

Commission's Regulations state that the Commission may conduct

other examinations and audits from time to time as it deems

necessary.

The audit seeks to determine if the campaign has

materially complied with the limitations, prohibitions and

disclosure requirements of the Federal Election Campaign Act of

1971, as amended.

B. Audit Coverage

The audit covered the period from the inception of bank

activity, April 24, 1992, through December 31, 1992. During this

period, the Committee reports reflect an opening cash balance of

$-0-, total receipts of $779,575, total disbursements of $779,461,

and a closing cash balance of $114.!/

C. Campaign Organization

The Committee registered with the Federal Election

Commission on May 4, 1992 and is a separate committee established

to act as a fundraising representative for all participants

engaged in certain joint fundraising activities. The participants

in the fundraising activity were the Bush-Quayle '92 primary

Committee, Inc. (Bush-Quayle '92), the Ohio Republican Party

!/ All amounts are rounded to the nearest dollar.

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Republican Leadership Fund

Final Audit Report

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Federal

Account

Davis.

Account (ORP-Federal), a~d ~he Ohio Republi=an Party State

(ORP-State). The Treas~=er c~ the Committee :s Keith A.

The Committee's office :s located in Columbus, Ohio.

To manage its financial activity, the Committee

maintained two bank accounts. From these accounts the Committee

made approximately 100 disbursements. Approximately 500

contributions were received frem 500 persons. These contributions

totaled approximately $780,000.

D. Audit Scope and procedures

The audit covered the following general categories:

1. The Committee's compliance with statutory limitations

with respect to the receipt of contributions or loans

(see Finding II.A.);

2. the Committee's compliance with the statutory

requirements regarding the receipt of contributions from

prohibited sources, such as those from corporations 6r'

labor organizations;

3. proper disclosure of contributions from individuals,

--------politica-l- commit-tee~- and-other- ent-ities,to-incl-ude-t-he----

itemization of contributions when required, as well as,

the completeness and accuracy of the information

disclosed;

c

4.

5.

6.

proper disclosure of disbursements including the

itemization of disbursements when required, as well as,

the completeness and accuracy of the information

disclosed;

proper disclosure of debts and obligations;

the accuracy of total reported receipts, disbursements

and cash balances;

7. adequate recordkeeping for transactions; and

8. other audit procedures that were deemed necessary in the

situation.

unless specifically discussed below, no material

non-compliance was detected. It should be noted that the

Commission may pursue further any of the matters discussed in this

report in an enforcement action.

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II. Findings and Recommendaticns

A. Allocation of Expenses and Distribution of Net Proceeds

Section 9034.8(c)(1) of Title 11 of the Code of Federal

Regulations states, in part, that the participants in a joint

fundraising activity shall enter into a written agreement. The

written agreement shall identify the fundraising representative

and shall state a formula for the allocation of fundraising

proceeds.

Section 9034.8(c)(7)(i) of Title 11 of the Code of

Federal Regulations states, in part, that the fundraising

representative shall allocate proceeds according to the formula

stated in the fundraising agreement. Each contribution received

shall be allocated among the participants in accordance with the

allocation formula, unless the circumstances described in

paragraphs (c)(7)(ii).(iii), or (iv) of this section apply.

Section 9034.8(c)(7)(iv) of Title 11 of the Code of

Federal Regulations states that earmarked contributions which

exceed the contributor's limit to the designated participant under

11 CrR part 110 may not be reallocated by the fundraising

representative without the prior written permission of the

--contributor_.__A_ ~r_~~ten __instrument made payable to one of the

participants shall be con-sioereda-n-earlliarked-contribution unless ---

a written statement by the contributor indicates that it is

intended for inclusion in the general proceeds of the fundraising

activity.

Section 9034.8{c){S){i) of Title 11 of the Code of

Federal Regulations states, in relevant part, that the fundraising

representative and participating committees shall screen all

contributions received to insure that the prohibitions and

limitations of 11 CrR parts 110 and 114 are observed.

Section 110.1{b){1) of Title 11 of the Code of Federal

Regulations states that no person shall make contributions to any

candidate, his or her authorized political committees or agents

with respect to any election for Federal office which, in the

aggregate exceed $1,000.

Section 9034.8(c)(8)(i){A) of Title 11 of the Code of

Federal Regulations states: "After gross contributions are

allocated among the participants under 11 CFR 9034.8(c)(7), the

fundraising representative shall calculate each participant's

share of expenses based on the percentage of the total receipts

each participant had been allocated. To calculate each

participant's net proceeds, the fundraising representative shall

subtract the participant's share of expenses from the amount that

participant has been allocated from gross proceeds." paragraph

(c)(8)(i)(C) of this section states: "The expenses from a series

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of fundraising events or activities shall be allocated among the

participants ~n a per-event basis regardless of ~hether the

participants change or remain the same throughout the series."

~. Background

The Committee conducted two fundraising events:

one in Columbus, Ohio on April 30, 1992; the other in Cleveland,

Ohio on May 21. 1992. According to the joint fundraising

agreement the formula for allocating c~~tributions to the

participants was:

~-- > ,.-- ~.~~

(a) for contributions from ~ndi"::duals:

$.01 - $1,000

$1,000.01 - $6,000

S6,OOO.01 - over

Busn-Quayle '92

ORP-Federal

O?P-S::;.te

(b) for all contributions fro~ ~olit:cal action committees:

S.Ol - S5,OOO

S5,OOO.01 - over

ORP-Federal

CR?-State

2. Excessive Contributio~s

"'..

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"The-Couis"SlOn . noti £i ed-Bush-ouay-le -'-92--by-.l.e.tte..c

dated June 2, 1992, that the Commission would no longer recognize

any untimely resolution of excessive contributions received by the

Committee. That letter states, in part, ~Commission regulations

provide committees with 30 days in which to refund contributions

which appear to be prohibited, and 60 days in which to seek the

reattribution, redesignation or refund of excessive contributions.

11 C.F.R. SS103.3(b)(1), (2) and (3). Contributions resolved by

committees outside these time periods are considered untimely and

in violation of the Commission's regu:ations. The Commission will

no longer recognize any untimely ref~nds. redesignations or

reattributions made more than 60 days following a candidate's date

of ineligibility or after the date of ra:eipt of this letter,

whichever is later. After this deadline, the Commission will

request that all unresolved prohibited 0: excessive contributions

be paid to the United States Treasury."

The Committee received contributions in excess of

the contribution limitation to Bush-Quayle '92 in the amount of

$28,901. The excessive contributions resulted when contributions

made payable to Bush-Quayle '92 exceeded the Sl,OOO limitation or

aggregated in excess of the $1,000 limitation. In some cases, the

Committee reattributed a portion of a contribution to another

individual without having the individual's signature or written

authorization. In other cases, the Committee allocated a portion

of an earmarked contribution to ORP-Federal instead of Bush-Quayle

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'92. However, since t~e checks ~ere payable to Bush-Cuayle '92,

the contributions could not be a::ccated to other part:cipants

without the contributor's wri:te~ consent.

The excessive portions of the contributions were

not timely resolved pursuant to 11 C.F.R. §103.3(b}(3\ and as of

the conclusion of audit fieldwork had not been refunded.

At the exit conference, the Committee was provided

with a schedule of the excessive contr.~utions.

3. Earmarked Contributions

The Committee received contributions totaling

$5,000 which were drawn on checks on wnich the payee or designee

was the Bush-Quayle '92 Compliance F~nc a~d $2,000 in

contributions drawn on checks payable to ~uyahoga County

Republican Party. Neither of these ccm~ittees was a participant

in the joint fundraising agreement. Ir. addition, the Committee

received contributions totaling $1,675 which were drawn on checks

payable to the Ohio Republican party.

Documentation with rescect to these contributions

indicates that they were not intendec'to be contributions to the

-.c- ------- --joint--tundrais-ingcoamit-te.e .--FQ\,tr_o!_~h.e._six contribution checks

were dated several weeks after the last event-;-a-n-fth-enetk--was----

dated approximately two months prier to the first event, and the

remaining contribution was specifically designated to the Ohio

Republican Party by the contributor. In addition, the

contributors included Ohio Republican Party pledge cards or

provided correspondence that directed the contribution to the Ohio

Republican Party, not the Republican Leadership Fund.

r,

(~-,

The Committee did not :orward any of the

contributions noted above to the named payee, but instead these

contributions were allocated among the participants of the joint

fundraiser. Based on the earmarked natu=e of these contributions,

it is the opinion of the Audit staff that the Committee was

precluded from accepting them.

At the exit conference. the Committee was provided

with a schedule of the contributions made payable to Bush-Quayle

'92 Compliance Fund and Cuyahoga County Republican Party.

4. Distribution of Net Pro~eeds

The Committee provided the Audit staff with a

schedule of its distribution of net proceeds and expenses among

the participants. The Committee'S percentages for determining

each participant's share of expenses were developed using the

combined gross proceeds from the two ~vents rather than on a per

event basis.

The Audit staff allocated gross receipts and

expenses to the applicable events. These amounts were adjusted

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fe, excessive contributic~s nc~ec in Sec~ie~ 2 above and

centributions earmarked for non-Farticlpat:ng committees noted :n

Section 3 above. In addition, t~e Audit staff corrected the

allocation of certain contributions among the participants to

conform to the allocation provided for in the joint fundraising

aoreement. Finally, the Audit staff calculated percentages for

d~termining each participant's share of expenses and distribution

of net proceeds for each event.

Based on the adjust~ents ~cted above, the Audit

staff concludes that the Committee made excessive distributions to

Bush-Quayle '92 in the amount of S7,045, ORP-Federal in the amount

cf $22,148 and the ORP-State in the amou~t of S12,911.2/ On

December 23, 1992, the Committee received a refund from

Bush-Quayle '92 in the amount of $4,719 representing contributions

received from the Committee that were in excess of the limitation

to Bush-Quayle '92.

At the exit conference, the Committee was provided

with a schedule which detailed the Audit staff's calculations.

,-

,

The Committee was requested to obtain a

reimbursement of $2,326 ($7,045 - $4,719) from Bush-Quayle '92,

522,148 from ORP-Federal and $12,911 froa ORP-State and amend its

----di-sdosure__ reports _~()_ disclose the proper allocations. The

Commi ttee was requeste-d-to-in-foni- tne-paJ;t~citlatin9-commi~~ees- -0-£---,

the need to file amended reports reflecting the correct

allocations.

In addition, the interim report recommended that

the Committee present evidence that the $28,901 in contributions

noted in Section 2 above are not excessive or make a payment to

the United States Treasury in the amount of S28,901.

With respect to the $8,675 in contributions noted

in Section 3 above, the interim report recommended that the

Committee issue refunds to the contributors and provide eVidence

of such refunds (copies of the front and back of the negotiated

refund checks).

In a lett~r requesting an extension of time in

which to reply to the interim report, the Committee Treasurer

stated that:

"One of the participating committees, the

Bush-Quayle '92 primary Committee, Inc. does not

dispute the audit report findings, and has already

refunded to the Republican Leadership Fund the

amount referenced in Attachment 3 of the Report ...

y These amounts are adjusted slightly from the figures

the interim audit report forwarded to the Committee.

Committee has been advised of the adjustments.

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cited in

The
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[Tlhe other participatir.g ccmmi~tee. the Ohio

Reoublican Party-Federal Account, has indicated."

th~t they need additional time to complete their

review of the findings and the pertinent

contributor information and disbursement files,"ll

Subsequently, a letter was received from the

General Counsel of the Ohio Republican Party. The letter, in

an apparent attempt to show that the Committee complied with

the regulations cited in the in~erim ~eport, explained in

detail, the fundraising procedures employed by the Committee.

A follow-up response by the Committee

Treasurer acknowledged the letter by Counsel for the Ohio

Republican Party and stated that R •• , the Republican

Leadership Fund has no additional information to provide to

the Commission, and therefore makes no additional response to

the Interim Audit Report."

With respect to the letter from Counsel for

the Ohio Republican Party, the Audit staff notes the

following:

Regarding the excessive contributions, Counsel Dtat~that~he-joint-fundraising_~gr:eeml!!\l: provided that

•..•revenues would be ' rolled' from one participantto--------

another as the respective financial contribution limits were

fulfilled." In lieu of repeating the method by which funds

were "rolled· from one account to another, a copy of the

joint fundraising agreement was enclosed.

In addition, Counsel stated that contributions

from husband and wife • •.• were frequently combined in one

check, although each spouse was in fact making $1,000

contributions... " and " ... the interim report has apparently

taken the position that the entire contribution is to be

attributed to the first name which appears on the check,

typically the husband."

Counsel has apparently overlooked the

regulation at 11 C.F.R. Sll0.llk), which requires any

contribution made by more than one person to include the

signature of each contributor, on the check or in a separate

writing; and at 11 C.F.R. S9034.Blc)(7) which states that

earmarked contributions which exceed the contributor's limit

to the designated participant may not be reallocated by the

fundraising representative without the prior written

permission of the contributor. Counsel's response included

neither the signatures of the contributors at issue, nor the

contributors' written permission to allocate the

Evidence that a reimbursement was received from Bush-Quayle

'92 was not provided. See footnote if at page 9.

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Final Audit Report

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contributions, which were ea:~a:~ed :cr 3~sh-Quayle '92, to

other participants.

Regarding the ea:~arked contributions, Counsel

stated initially that "The interim repo:: does not disclose

the identity of the contributors who were alleged to have

made contributions other than 'intended to be contributions

to the joint fundraising committee. ,. However later in the

letter, Counsel stated:

"The contributions set forth on Attachment 2

[Earmarked Contributions] apparently are questioned

by the Commission because the payee differs in some

respect from either the fundraising representative

or one of the three participants to the joint

fundraising activity. Notwithstanding these

insignificant variations, all of the contributions

set forth on Attachment 2 were intended by their

respective contributor for receipt by the joint

fundraising event."

Since Counsel has not provided evidence from

the contributors documenting that their contributions were

intended for the joint fundraiser, Counsel's arguments are

-not- -per-suaS-ive .------ _

Finally, regarding the distribution of the net

proceeds, Counsel states:

"Although the two events took place in April and

May of 1992, contributions and invoices for

expenses associated with the two events continued

to trickle in for several months after the May 21,

1992 event. Finally, in the late Summer or early

Autumn of 1992, the gross receipts were determined,

relative percentages of expenses and receipts were

agreed, and distribution of revenues proceeded. It

was determined in accordance with the agreement

that 48.05 percent of the revenues were designated

pursuant to the formula to Bush-Quayle '92 primary

Committee, Inc., 36.34 percent to the Ohio

Republican Party Federal Account and the remaining

15.61 percent to the Ohio Republican Party State

Account. The revenues and expenses were then paid

and allocated in accordance with these ratios."

Again, Counsel has apparently overlooked the

the provisions of 11 C.r.R. 59034.8, which require that

expenses from a series of fundraising events be allocated

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Final Audit Report

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among the participants on a per-event basis, regardless of

whether the participants change cr remain the same t~:oughout

the series.

In summary, the Committee has not complied with the

recommendations outlined in the interim audit report.

Specifically, the Committee has not obtained reimbursements

from ORP-Federal or ORP-State; issued refunds of earmarked

contributions to the contributors; or made a payment of

$26,575 ($28,901-$2,326) to the U.S. Treasury for unresolvedd

excessive contributions.~/

Recommendation ~l

The Audit staff recommends that the Committee be

required to make a payment to the U.S. Treasury in the amount

of $26,575 representing the value of unresolved excessive

contributions.

The check issued on 10/15/93 by Bush-Quayle '92 to reimburse

the Committee remained outstanding as of 6/30/94. In lieu of

reissuance, Bush-Quayle '92 paid $2,326 to the U.S. Treasury

via check dated 7/25/94. Consequently, the amount due to the

U.S. Treasury is reduced accordingly.

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FE DE RAl ElE (T 1°'-(o\,\ ,,\! ~S 10'-

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FROPl:

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June 6, 199:.

TO: Robert J. Costa

Assistant Staff Director

Audit Division

f

THROUGH: John C. su,(na

Staff Di re' t~ -_.e:--

Lawrence PI. obled/

General Cou ..1 Y/, ;'.Iln

--.-----~;:c~~;~~t4;~;~:~n~J~2~1-- Renneth E~ Kellner .~ A.aiatant General Counsel

Jane J. wh.ng~1 Attorney

SUBJECT: Proposed Final Audit Report on the Republican Leadership

Fund (LRA t 453/AR t 94-8)

The Office of General Counsel haa reviewed the proposed

Final Audit Report on the Republican Leader.hip Fund (Wthe

Committee W). The Audit Division sub.itted the proposed Final

Audit R.port (Rthe ReportR) on the Coaaittee to this Office on

April 4, 1994. This .e.orandum contains thia Office's legal

analysis of the findings and r.comm.ndation. in the proposed

Report.ll If you have any qu.stion. concerning this memorandum,

please contact Jane Whang, the attorney as.igned to this matter.

11 Sine. the proposed Final Audit R.port does not include matters

exempt fro. public di.clo.ure under 11 C.F.R. S 2.4, we recommend

that the Commission's di.cus.ion of this docu.ent be conducted

in op.n ••••ion. Throughout our comments, RFECAR refers to the

Federal Election Campaign Act of 1911, a. am.nded, 2 U.S.C.

55 431-455, and RMatching Payment Act W refer. to the Pre.idential

Primary Platching Payaent Account Act, 26 U.S.C. SS 9031-9041.

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"Cfii~;rA~di t-'R~'pi:,rt'LegaYcbll1.1llen t s

Republican Leadership Fund

tLRA • 453/AR • 94-8)

Page 2

We generally concur ~ith the Audit Division's findings

::ncerning the excessive contr:cutlcns (II.A.2), earmarked

contributions (II.A.]), and distrlbution of net proceeds

,:!.A.4).~/ Our specific comments are set forth below.

1. EXCESSIVE CONTRIBUTIONS (II.A.2)

LtJ

.--

~-

The Final Audit Report recommends that 528,901 in

excessive contributions to Bush-Quayle '92 Primary Committee, Inc.

i"Bush-Quayle '92") be pald to the United States Treasury.

Bush-Quayle '92 was not::led of the Commisslon's policy regarding

payment to the Treasury by letter dated June 2, 1992. The June 2,

1992 letter further informed that committee that refunds to

contributors after the dates specified in the letter would not be

recognized. Consistent with the Commission's letter, we agree

that those excessive contributions should be paid to the Treasury.

We note further that nothing in the Act, Matching

Payment Act, or the Commission's regulations prevents the

Commission from requesting a payment to the Treasury. Indeed, the

equitable doctrine of disgorgement supports the payment to the

Treasury in this instance. See SEC v. Bil%erian, 814 F. Supp.

116, 120 (D.C. 1993); SEC v.~xas Gulf SUlphur Co., 446 F.2d 1301

(2d Cic. 1971), cere. denied, 404 U.S. 1005 (1971) (holding

disgorgement to be an appropriate, non-punitive remedy). Apart ------- - :-r-om-- it-s-re••di-al---bene-f-it-s-.-di-sgotge.ment-has_the_p rae tical _

.r advantaqe of eliminating the need for the Co_iaaion to monitor a r

committee'S refunds.ll In accordance with its express authority to

formulate policy with respect to the statutes under its

jurisdiction, the Commission has already adopted disgorgement in

other circumstances. See,~, 11 C.F.R. S 9038.6 (Requiring

stale-dated checks be paid to the Treasury). Disqorgem.nt has

also been requested in the enforcement and litigation contexts.

See Matter Under Review 1704 (Directing respondents to pay an

estimated 5350,000 to the United States Treasury for excessive

contributions); and Plaintiff's Motion to Effectuate Judgment in

FEC v. Populist Party, No. 92-0674 (D.D.C. filed May 4, 1993).

c· II. ~KED CONTRIBUTIONS (II.A.3)

The proposed Final Audit Report notes that the Committee

had accepted contributions intended for other committees in the

amount of $8,675 ($5,000 for the Bush-Quayle '92 Compliance

Committee, $2,000 for the Cuyahoga County Republican party, and

$1,675 for the Ohio Republican Party). We concur in the Audit

2/ Parenthetical references are to the placement of findings in

the proposed report.

3/ Similarly, a committee would be able to make one payment to the

Treasury, as opposed to seeking out and making refunds to multiple

contributors.

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Memorandum to Robert J. Costa

Final Audit Report Legal Comments

Republican Leadership Fund

(LRA I 453/AR • 94-8)

Paqe 3

staff's belief that the Committee was precluded from accepting

these contributions earmarked for other committees.

Althouqh there is no statutory or regulatory provision

directly on point, existing regulations prOVide guidance. A

contribution made payable to an entity is presumed to be intended

or earmarked to that entity. Cf. 11 C.F.R. S 9034.8(c)(7)(iv)

(written instrument made payable to joint fundraising participant

is earmarked to that participant unless written statement

indicates that contribution is to be included in the general

proceeds of fundraising activity). The regulations also require a

joint fundraising committee to receive and allocate proceeds

according to the participants' written agreement. 11 C.F.R.

S 9034.8(c}(1}. Sp.~~fically, the Joint Fundraising Agreement for

the Committee stated -{a]11 checks for the Events shall be made

payable to 'The Republican Leadership Fund'." The Fundraising

Agreement did not authori%e the Committee to allocate to the

participants any contributions payable to non-participating

committees. The Committee does not offer any further

CJ documentation or proof to support the contention that these

contributions were for the Republican Leadership Fund. Therefore,

the Committee appears to have incorrectly accepted and allocated

contributions earmarked for other committees.

III.

c

The proposed Final Audit Report notes that the Committee

made excessive distributions to Bush-Quayle '92 in the amount of

$2,322~ ORP-Federal in the amount of $22,l36~ and ORP-State in the

amount of $12,904. These excessive distributions were due to the

Committee's inclusion of contributions that were either excessive

or earmarked. The lnteria Audit Report recommended that the

Committee obtain reimbursements for the above amounts.

Bush-Quayle '92 responded that it had already refunded the amount

recommended in the Interim Audit Report~ however, the Audit

division did not receive the documentation of a refunded check.

We recommend that the Final Audit Report be revised to reflect

that the Audit staff is currently requesting such documentation

from the Committee.

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Page 16

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Jl..ugust 17, 1994

Mr. Keith Davis, Treasurer

c/o Huckaby & Associates

Republican Leadership Fund

228 S. Washington Street

Alexandria, VA 22314

Dear Mr. Davis:

Attached please find the Final Audit Report on the

Republican Leadership Fund. The Commission approved this report

on August 12, 1994. As noted on page 2 cf the report, the

Commission may pursue any of the mat~ers discussed in an

enforcement action.

In accordance with a CouTssion-pOTicy--acll:rpt-ed -on--"'ay5 ,---- -- 1992, the Commission determined thac the ~ommittee must pay to

the U.S. Treasury $28,901 representing the value of unresolved

excessive contributions. Of this aaount, $2,326 has been paid;

the balance due the U.S. Treasury is $25,575.

The Commission approved Final Audit Report will be placed

on the public record on August 26, 1994. Should you have any

questions regarding the public release of this report, please

contact Mr. Ron Harris of the Commiss",on's Press Office at

(202) 219-4155.

Any questions you may have related to matters covered

during the audit or in the report should be directed to Lorenzo

David or Wanda Thomas of the Audit Division at (202) 219-3720.

Sincerely,

Assistan Staff Director

Audit Division

Attachment as stated

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CHRONOLOGY

REPUBLICAN LEADERSHIP FUND

Pre-audit Inventory Commenced

Audit Fieldwork

Interim Audit Report to

the Committee

Response Received to the

Interim Audit Report

Final Audit Report Approved

Page 19

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4/5/93

4/5/93

12/8/93

2/9/94

8/12/94

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