Part II
Overview of Campaign

Campaign Organization

Important Dates Friends of Mary Landrieu, Inc.

e Date of Registration November 25, 1996

e Audit Coverage January 1, 2001 through December
31, 2002

Headquarters Washington, DC

Bank Information

© Bank Depository 1

e Bank Accounts 2 Checking, 1 Market Index, 2 CD’s

Treasurer

e Treasurer When Audit Was Conducted Val Marmillion

e Treasurer During Period Covered by Audit Kent Berger

Management Information

e Attended FEC Campaign Finance Seminar No

e Used Commonly Available Campaign Yes
Management Software Package

¢ Who Handled Accounting and Recordkeeping Paid Committee Staff
Tasks

Overview of Financial Activity
(Audited Amounts)

Cash on hand @ January 1, 2001 $ 704,462
Receipts

o From Individuals 3,795,354
o From Political Committees 2,681,027
o Joint Fundraising Proceeds 431,317
o__ Interest and Other Receipts 29,821
Total Receipts $ 6,937,519
Disbursements

o Operating Expenditures 7,232,143
o__ Transfers to the Candidate’s 1996 Committee 52,000
o Contribution Refunds 174,197
o Other Disbursements 97,938
Total Disbursements $ 7,556,278
Cash on hand @ December 31, 2002 $ 85,703


Explanation of Discrepancies

Opening Cash Balance - 2002
The understatement of beginning cash on hand was the result of differences occurring

prior to 2002.

Receipts — 2002
The understatement of receipts was the net result of the following:

e Unreported credit card contributions deposited between + 196,081
October 1, 2002 and December 31, 2002

¢ Unexplained difference = 18,982
Total Understatement of Receipts $177,099

Disbursements — 2002
The understatement of disbursements was the result of the following:

Unreported disbursements mostly comprised of bank debits for + 205,335
payroll taxes and 2 wire transfers to a media vendor

¢ Unexplained difference - 9,921
Total Understatement of Disbursements $ 95.414

Ending Cash Balance — 2002
The overstatement of cash on hand in the amount of $17,743 was the net result of the

misstatements described above.

At the exit conference, the Audit staff informed FML representatives of these
misstatements and they agreed to amend the appropriate disclosure reports.

Interim Audit Report Recommendation and Committee Response
The Audit staff recommended that FML file amended reports, by reporting period, to
correct the misstatements noted above. These filings were to include amended Schedules

A and B as appropriate.

In response to the interim audit report, FML filed corrective amendments.


Part I

Background

Authority for Audit

This report is based on an audit of the Friends of Mary Landrieu, Inc. (FML), 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 2 U.S.C. §438(b), which permits the
Commission to conduct audits and field investigations of any political committee that is
required to file a report under 2 U.S.C. §434. Prior to conducting any audit under this
subsection, the Commission must 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. 2 U.S.C. §438(b).

Scope of Audit

Following Commission approved procedures, the Audit staff evaluated various factors
and as a result, this audit examined:

The receipt of excessive contributions and loans.

The receipt of contributions from prohibited sources.

The disclosure of contributions received.

The disclosure of disbursements, debts and obligations.

The consistency between reported figures and bank records.

The completeness of records.

Other committee operations necessary to the review.

NAME YN SE

Limitations

The Audit staff’s testing of receipts was limited due to a lack of supporting
documentation associated with the direct deposit of credit card contributions between
October 1, 2002 and December 30, 2002. The only documents provided for these items
were the bank statements which listed the deposit dates and deposit totals.

Changes to the Law

On March 27, 2002, President Bush signed into law the Bipartisan Campaign Reform Act
of 2002 (BCRA). The BCRA contains many substantial and technical changes to the
federal campaign finance law. Most of the changes became effective November 6, 2002.
Except for the period November 7, 2002, through December 31, 2002, the period covered
by this audit pre-dates these changes. Therefore, the statutory and regulatory
requirements cited in this report are primarily those that were in effect prior to November
7, 2002.


Part III
Summary

Finding and Recommendation

Misstatement of Financial Activity

FML misstated receipts, disbursements, and cash balances on reports filed with the
Commission for calendar year 2002. In response to the interim audit report, FML filed
corrective amendments. (For more detail, see p. 4.)


FEDERAL ELECTION COMMISSION

WASHINGTON, D.C. 20463

September 24, 2004

MEMORANDUM

TO: ROBERT W. BIERSACK
PRESS OFFICER
PRESS OFFICE

4

FROM: JOSEPH F. STOLTZ ¥ f~ xy
ASSISTANT STAFF/DIRECTOR
AUDIT DIVISION

SUBJECT: PUBLIC ISSUANCE OF THE FRIENDS OF MARY LANDRIEU, INC.

Attached please find a copy of the final audit report and related documents on the
Friends of Mary Landrieu, Inc., which was approved by the Commission on September 16,
2004.

Informational copies of the report have been received by all parties involved and
the report may be released to the public on September 24, 2004.

Attachment as stated

ce: Office of General Counsel
Office of Public Disclosure
Reports Analysis Division
FEC Library
Web Manager


Part IV
Finding and Recommendation

| Misstatement of Financial Activity

Summary

FML misstated receipts, disbursements, and cash balances on reports filed with the
Commission for calendar year 2002. In response to the interim audit report, FML filed
corrective amendments.

Legal Standard

Contents of Reports. Each report must disclose:

e 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; and

© The total amount of disbursements for the reporting period and for the calendar year.
2 U.S.C. §434(b)(1), (2) and (4).

e Certain transactions that require itemization on Schedule A or Schedule B.
2 U.S.C. §§434(b)(1), (2), and(4).

Facts and Analysis

The Audit staff reconciled FML’s reported activity to its bank records and determined
that there was a misstatement of cash on hand balances, receipts, and disbursements in
calendar year 2002. The following chart details the discrepancies between Commission
disclosure reports filed by FML and its bank records.

Comparison of Disclosure Reports and Bank Records

2002 Activity
Reported Bank Records Discrepancy
Beginning Cash Balance at $2,093,683 $2,094,256 ($573)
January 1, 2002 Understated
Receipts $4,683,168 $4,860,267 ($177,099)
Understated
Disbursements $6,673,406 $6,868,820 ($195,414)
Understated
Ending Cash Balance at $103,446 $85,703 $17,743
December 31, 2002 Overstated



Report of the
Audit Division on

Friends of Mary Landrieu, Inc.
January 1, 2001 - December 31, 2002

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.!
The audit determines
whether the committee
complied with the
limitations, prohibitions
and disclosure
requirements of the Act.

Future Action

The Commission may
initiate an enforcement
action, at a later time, with
respect to any of the
matters discussed in this
report.

' 2 U.S.C. §438(b).

About the Committee (p. 2)

Friends of Mary Landrieu, Inc. is the principal campaign
committee for Senator Mary L. Landrieu, Democratic
candidate for the U.S. Senate from the state of Louisiana, and
is headquartered in Washington, DC. For more information,

see the chart on the Campaign Organization, p. 2.

Financial Activity (p. 2)
Receipts

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From Individuals

From Political Committees
Joint Fundraising Proceeds
Interest and Other Receipts
Total Receipts

Disbursements

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Operating Expenditures
Transfer to the Candidate’s
1996 Committee
Contribution Refunds
Other Disbursements
Total Disbursements

$ 3,795,354
2,681,027
431,317
29,821

$ 6,937,519

$ 7,232,143
52,000

174,197
97,938
$ 7,556,278

Finding and Recommendation (p. 3)

Misstatement of Financial Activity


Table of Contents

Part I. Background
Authority for Audit
Scope of Audit
Limitations
Changes to the Law

Part II. Overview of Campaign
Campaign Organization
Overview of Financial Activity

Part III. Summary

Finding and Recommendation

Part IV. Finding and Recommendation
Misstatement of Financial Activity

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