TO:

FROM:

March 8, 199~

SHAP,CS SNYDER

PRESS OFfICE

ROBERT J. COSTA .~. ASS~STA~7 STAFF Dr~~ AUD:::7 DIVISION

SUBJECT: PUBLIC ISSUANCE OF THE FINAL AUDIT REPORT ON

KERREY FOR PRESIDENT

-- -

Attached please find a copy of the final audit report , and related documents on Kerrey for President which was

approved by the Commission on March 3, 1994.

Informaticna~ copies cf the report have been received by

all parties involved and t~e report may be released to the

public.

Attachment as stated

cc: Office of General Counsel

Office of Public Disclosure

Reports Analysis Div:sion

FEe Library
'rREPORT OF THE Al·DIT DIV'SIO~

0'

Kerrey for President

FEDERAL ELECTIO~ CO'1~ISSIO~

999 E STREET, ~.w.

\\. -\SHf'(;Ttl'. D.C.

- -~~---

.. -.,.. al . nr. L I 17

.- -. I I &'1. ·__j..I ......~~.R~.......
REPORT OF THE At-nIT D[\lSIO~

Kerrey for President

..\ppro\'ed "Iarcb 3, 1994

FEDER.-\L ELECTI()' CO\[\fISSIO'

999 E STREET. '.\\'.

\\'ASHr\GTl)'. D.C.
FINAL AUDIT REPORT

ON

KERREY rOR PRESIDENT

EXECUTIVE SUMMARY

Kerrey fc= President (the Cs~rolttee) registered w~:~ the

f~deral Ele:t:on Com~issicn en Septem~er :8, 1991, as ~he

principal campaign committee of Senator J. Robert Rerr~y, a

:andidate :2r the 1992 Demcc:atic preside~tial nom:r.a~icn.

The audlt was conducted pursuant to 26 U.S.C. S9038:a).

The find:ngs of the audit were presented to the C~mmittee at

the exit conferences held at the conclusion of the audit fieldwork

relative to the findings (10/1/92 and 1/13 '93) and in an interim

audit report (the Interim Report) approved by the Commission on

May 25, 1993, and ratified by the Commission on November 9, 1993.!1

The Committee was given an opportunity to respond to the findings

~both ~after-~-the exit confe~rences and after ~receipt~- of the Int--erim~

Report. Comments and information received have been included in

this final report.

The following is an overview of the findings contained in the

final audit report (the Report).

Disbursements for Transportation and Services Made Available

to Press and Secret Service Personnel - 11 crR 9034~6(a)t 11

eFR 9034.6 f b), 11 CFR 9034.6<d\(1), 11 erR 9033.11{c). A

committee that provides transportation and related services to

the Press and Secret Service~/ may charge for the services and

accept the resulting reimbursements. With regard to the Press the

1/ Following the decis:c~ ty the j.e. C=~rt of A~pea:sl in FE:

'';. NF~ P2' 1_ i tic a 1 Vi:::::: y F~:-'. d,e tal. I • o. : - S3 : r S ... :. t: c;:'.

a: : I t~at the composl::C~ ~: t~e Federal Elect:cn

:cmmlSSlcn vio~ated :~e :2~St~tUtlC~'S separaticn cf pc~ers,

t e Co mm ission r e con s t ;. t 'J ted itself fOe tobe r 25, 199 3, and

ratified its earlier a~pr2~a: of t~e :nterim Report on

November 9, 1993.

~/ T~e Report also notes ~~at Secret Servlce appare~::y Qverpa:d

the Ccmmittee S2,811 In re:mbursemen:s.

Page :

3,-3/94
a~:~~: ~~~:~ed re~s~ te ~~spj =~ :~e =:st ~er ~3SSe~;e: pl~s a 10~

a : : ..... a nee ~-.::: ... : .: '2 :~.. .~::: ~;-;: : s s :. :::: :. :;''': :. 3 : : :::-" s . : ~. :: -: ::- :-. 1. :. e e : s

;: e :- -:- ': ': e d '::: ret a l:: a:l a:--:,' :: ~";:: e q ''; a:' ::::: '::-: e ;'e:- ;; ass 4? r1 :; e r :::- 0 S t : .~~ 5

a~ ~::~~a~:e f2r ajrninis::~'::~~ ::S:5 =~ ~~e ~:=;:3~. T~e

a :::-- . ~~ :- s :: a ;. '/ e ::s: a:: c ~*"c. !\ :~~ ~: e :: 3. ~~ ; e s :.:- ~::: 3 :: r* :: j C :: --: n t, a ': ~: r:

ex:~:s! :: ::~ :: :~e :C~~lt:ee :a~ ~2~~~e~~ ~::e ~~a~ t~e 3~

bas :: a :. ::.~ a nee . .:... :1 yamC' u ~l t s t:-:.:':' e j a;: -:::.:. e :: ": e d 1 n e x c e s S :-::

t~~ :cst ;:~S :0% allcwan:@ \c~er :harges ~us': ~e retur~ed t: the

tra~elers. Amounts ccllected that ex~eej cost p:~s the

ad~:~istratlve C0S: allcwance :Frc::t' ~~st be paid tc the U.S.

Treasury.

7he ?epcrt requires the C~m~i~:ee :0 pay the U.S. Treas~:y

S~.~~2 (p:ofit> and the trave:ers $3,939 over c~ar~esi. The

'

'-,--_ ......... _ ...... ........- \,..ee's ros .. '- ...... '.J"'''''ses j. • "0-. "~e \-. • .1 ......:n ..."- e ... ....·"l'\ a",4.,A. \...i..... .... reDor'" .... \,.... ,4~d """"" ...... nf"';" -"" ........ l·ni. ....

_ ..'·,d..... e

dc-~=enta~i=n sufflcient to =es~l~e these issues.

Excessive Contributions Resultinq from Staff Advances - 2

U.S.C. S44:a(a' and (f), 2 U.S.C. §431(11:, 11 erR

le:.! a!'::\:iii' and (b;, 11 CFR ::e.5,b\. A payment by an

individual from his or her personal funds for campaign-related cos~s is a contribution subject to the Sl,OOO limitation unless

exempted under 11 eFR lOO.7(b}{S) or reimbursed within specific ti~e frames. The Interim Report questioned, as excessive

ccr.tributions, advanced funds totaling $6,238 from one staff

member. The Committee's r-e-spo'nseprovided no documenta-tion to

refute the excessive nature of the advances; however, the staff

member had submitted a request for his travel expenses and he was

reimbursed a portion of the costs through a debt settlement be~~een himself and the Committee. Thus, the Commission

de~ermined that any portion of the travel expenses, up to $1,000,

that remains unreimbursed by ~~e :ommittee is not a contribution.

T~:s determination allowed the Committee to avail itself of the

$1,000 transportation exemption a: 11 C.F.R. SlOO.7(b){8}, thus red~cing the excessive amount to S5,238.

Dis:losure and Itemizatic~ of Financial Activity - 2 U.S.C.

§ 34 {b ), 2 U. S .. C. 431 ( 13 ), 11 : FR C4 .. 2 I 11 CFR 104. 3 . On its

i~:tial disclosure reports, t~e :~mmittee failed to report

a=equate:y the activity rela~ed ~~ :oans received, disbursements, d~=~s and obligations, Press :e:~b~rsements, exempt legal and

a::ounting services, and the :~e~::::ca~~cn c: contributors. The

C:~mittee responded by fi:ing 3~e~~ed reports, ~hich comple~e the

p'_ .::; :. :.. ere: 0 rd.

~nc::u~entej ::s~~=se~e~:s - ~: :FR 9:33~l: a a~d 1: :FP

~:3S.2t 3 f~l:8~1r.9 :~e :~:~:~~ ~e~2::/s :=e~::::ca~l~~ ::

l~a1equa:e documen:atlc~ =: ~- ~:s=~~se~e~:s. :~~~:~~ng S:4,5:3,

:-. e Comm:. t tee c :; r r e c ted t e t:::-:;::,: <2 :':". ":: Y ~:':) '". 1 d :. n ? the nee e s s a r y

d::umenta~:'cn.

Pa-:e ...

3; 3 ;-i
Stale-date~ Ccc=ittee :~ecks - 11 erR 9038.6. Final:y. the ,..... ,- - ...... , ;'---;-e ta-l' c: --;. e::"'--;-' p'; ,..""" ",,';:. ,'. ..,---:::::--;: .... ;:> r f c:: 'T" rea S" ,.. v e ....... - "~:,,,"i,.. ...... \,.... 'l:;:- ...... s... "'i - --* t-r........, .: ..... '-"' - '" - ....J........ ...... ... u .. ..l - ... ,.... _ t '_ ...

:~:a: amount 0: :~e~<s cuts:and:~~ which ha~e not been cashed.

Paqe j

3/3/94
Page

3/3/94
~---........-:::;-- "

....., ...-----..._--",~

2:-J

KERREY FeR PRES:~ES7

A. Audit Au~hority

7h~s report is based Qn an a~dl~ of Kerrey for Presiden~

. "the Commlt~ee~\. The audit :5 ~andated by S@cticn 903B(a) of

Title 26 cf the United States Code. That section states that

"after each matching payment peelod, the Commission sha:l conduct

a thorough examination and audit of the qualified campaign

expenses of every candidate and his authorized committees who

received payaents under section 9031." Also Section 9039(b) of

the United States Code and Section 9038~l(a~(2) of the

--Co-..tssionls- Requlations- state that. th-eCo-mai-ssio-n lIlay- c-onduct

other exaainations and audits from time to time as it deems

necessary.

In addition to examining the receipt and use of Federal

funds, 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

asended.

B. Audit Coverage

The audit covered the period from the Committee's

inception of bank activity, September 1-, 1991, through February

29, 1992. During this period, Committee reports reflect an

opening cash balance of 5-0-, total receipts of $5,655,969, total

disburse••nts of $5,552,108, and a closlng cash balance of

S103,861.1/2/ In addition, a llmlted review of the Commlt~ee's

transactions was conducted through April 27, 1993, foe p~rposes of

determining the Committee's re~al~ing ~atching fund e~~:~:ement

based en its fi~ancial ~os:~~c~.

!/ These amcu~ts l~::ude the ac~:vity from an affl:~ate1

committee, Texans for Bob Rerrey: S:,487 of receipts and disburseme~ts. No materia: findings resulted frcm a review

0f the aff~~iated com~ittee's records.

~/ All fi~ures in this repor~ ~ave been rounded to the nearest

dollar.

Page 5

3/3/94
:~e ::~~:::o~ =eg:s~e~e~ ~~~~ :~~ Fe~~~a: ~:~::::~

::--:ss~~~ ~~ Se~:e~te: :3, :?;:. 7~e 7~eas~:e: :: :~e ::~m:~:~~

:: ''; =- :. ~.; '::-: e t:' :: : -:: :::: ': e :: e :: l ': :--. e3 '~ j it..,.·a s ~'~; e 50 : :' :: ,: ,<, .~.:--, ::: _

a:s~ ~~~ =~=:e~t ::eas~:er.

~~rlng ~~e period aud:~edt the :ampaig~ es~~bllshed

~::~ces ~~ :a s~a:es :.~ add~t:c~ :~ ~ts ~a:l~na: hea~~ua~:ers

:~~ate1 i~ ~ash:~g:~~t ~.c.

:= ~ana~e :ts ::nanc:a: actlvi~YI the :a~Fa:g~ ~sed :5

tank ac=oun:s at ~a:ious times. F:c~ t~ese acc~unts the campal~~

~ade approx:mate:y 3,2~D d:sburse~ents. Appr~ximate:y 33,~JO -

c~ntributlons we::e received frcm 26,600 persons d~ring the audit

period. These ccntributlcns tota:ed $3,235,000.

In addit~on :c con~::bu:icns, ~~e campaign ~as =ecei~ej,

through February 2, 1993, $2,195,530 in matching funds :~:m the

United States Tr~asury. This amount represents 16\ cf t~e

$:3,810,000 maximum entitlement that any candidate could receive.

The candidate was determined eligible to receive matching funds en

Novemb_er 27 ,_ 1991. To date, the campaign has made a total of 14

matching fund requests- totaling S2,2-28,479. T-he Commission hascertified 99\ of the requested amount. For matching fund

purposes, the Commission determined that Senator Kerrey's

candidacy ended March 5, 1992. This determination was based on a

public statement by the candidate. The campaign has continued t~

:eceive matching fund payments to defray campaign re:ated expenses

incurred through March 5, 1992 and to help defray the cost of

wlnding down the campaign.

Attachment 1 to this report is a copy of t~e

Commission's most recent Report on Financial Activity for this

campaign. ~he amounts shown are as reported to the CommiSSlon by

the Committee.

O. Audit Scope and Procedures

:n addition to a revie".. of the Committee's expendit'..lres

to determine the qualified and non-qualified campaign expenses

lncurred by the campaign, ~he audlt covered the foll~~ing genera:

:a:egories:

:~e campaig~'s comp~~a~ce ~l:~ sta~utocy ::~:ta~i~~s

~::h =espect t~ ~~e =e:e:~~ ~. :~~trlbuti~~s c= :~a~s

see F:ndi~g I!.A.

2. :~e campaig~'s c~mp::a~ce with the statutory ~equ:re~ents regard:~; :~e re:ei~t of ccn:~:b~::c~s :=:~

~roh:bi:ed sources, s~ch as t~cse feem cor~oratlons or

labor organlzaticns;

Page '5

3/3,,94
3 • ;- :" r ~::- ~:. s ': : :' s''; :- ~-.. ~..-..:-:: '., ': :. :: :"". 5 ~:-:' :; :. ~~ :: :. ":' :. : " : :3 ,

;:::t~=a: ~:~=:::e~s a~j ::~~: ~~:~::~S. :: ~~::~de ~~e

::~~1:3~:~~ ~: :~~:::t~:::~S ~~e~ requl:e~, 35 ~e:l 35,

:~e ~~~r:e:e~ess a~~ a:~~:3:; :~ :~e i~!=:~a::~~

.: : s ~~ : ;: s j S €'e ~:.:" :: : ; 5 :: ::. 3 :-: d ::.'~.

.... . ~:=per j:s~::s~:e :~ i:s~~:s@men:s in::~d:~; :~e

...

'''em''''~'''I'''\'''' _ .,. 0;. ;,.. '- • I ....

_..1: ,,,h,·.... _ .... ..... se,,..e.., ..... ..- s "~~An "- •• ~..... eq'u;r . ... .. g .... , as '""' e ......

"

:~e ~ornp~e:e~ess a~c acc~:a:y ~t ~~e ~~f=:~a:~~~

:11sclosed see F:'::~:~~s ::.:., ::.F. a~d ::.::;. ';

as,

prope: dlS~l~su=e :: =am~a:gn dec:s and ~c:lga::~~s see

Findings ::.5. a~~ ::.E.

6. the ac~uracy of t~:a: re~~r~ed recelpts, 1isbursemen~s

and cash balances as co~pared :0 campaign tank records

\ see Find ing I r .. G. I ;

the campaign's compliance with spending limitations; and

other audit procedures that were deemed necessary in the

situation.

accuracy of the Statement cf Net Outstanding Campaign

Obligations filed by the campaign to disclose its

financial condition and establish continuing matching

fund entitlement (see Finding IIIaE.);

! •

8 s

"'"

'"

9.

10.

adequate reccrd<ee~:~g ~am~aig~ trar.sact:~ns;

In addition, on Aprll 23, 1992, the Audit staff

completed an inventory of the Committee's records to determine If

they were materially complete and in an auditable condition. A

letter dated April 27, 1992, notl:led the Committee that records

pertaining to several areas of the pending audit were not made

available fer review. Furthermore, the letter informed the

Committee that if at the conclusion of a 30 day period ending June

1, 1992, the items listed on t~e :etter had not been provided, the

Commission would issue subpcenas for the production of those

records. Records provided l~ ~esponse to our Apri: 27, :992 ~equest were deemed suff:c:e~t t: commence fieldwor~.

Unless speciflca::y ~:s=~ssed below, no material ~on-compliance was detected. :: 5ho~:d te noted :~at :he

:ommission may pursue f~=:~~: a~y ~f the matters d:scussed in :~:s

report :n an enforcement act:~~.

rIo Findings and Recomme~dat:~~s - ~on-repayment Matters

Introduction to Find:ncs

In light of an October :2, :993 decision by the Court of

Appeals for the D.C. Circ~it i~ fEe v. SF~ Political Victorl Fund

et al., the Commisslcn reccns:d~e~ :~e :nterlm audit report a~d ?a;e

3/ 3/ 94
'::::e: :':.5 a::'::::':3: ::': ~::':e;:-:t:e::'? ........ .~s a :-~s·...:.:-: ":h:s

!:::2~. :~e ::~~lttee ~as affc:ie~ a~ ad~lt:c~a: ~: ~a¥s t:

s~;~:.~e~: ~~s ear:~e: :-~s;=~se :~:e:~ed ~~ ~=~e~~e: 5. :993.

:~:e~=e~ 3, :;93, a s~~~:e~e~:3: :~s~~~se ~~ :~e :~~e::~ a~~::

:e;=:t ~as :e=el~ed ~~::h, a::~; ~::~ :he ea:::e: :eSr0~se. ~as

:=~s:derej ~te~ ~h~s =e~~~: ~as ~:e;3:e~. :~e ::~~:::~~ s~a~e5

:. t s ;:' e 5 ;; : :: s e ':. hat .!: b Y s '.; t:n i -: : :. :". ::;: S S 'J :. :;: '? :-: : a :. :: e .'; t:: ens e. : :"'. e

:ommit-:ee expressly wa:~es ::c r:;~:s ~ha: :t =:~e~~:se has ar:s:~:

from the decls:c~ =f the D.:. :2U:: of Appeals :~ FE: v. NRA - P 1 i tica 1 V;" c :. ': Y F'...1 nde: a:' ,. ;-;:-. ?: - :- 36 j J . :: .::. :-. C' ":- :'-~- .:"2 t

:'993),U

Sect:cn 441a a! of 7:~le 2 ~f ~he U~::ej S:a~es Cede

states, :~ relevant part, ~hat ~~ ~~rso~ shal: ~a~e cont~ibutl~~S

to any ~andidate and hlS authorized polltical CC~lttees Nl:h

respect ~~ any electic~ fer Fede:a: ~f:::e ~hic~, lD t~e

aggregate, exceed S:,OCC.

Section 441atf) of 7it:e 2 of the United States Code

states that no candidate or polltical committee shall knOWingly

accept any contributions or make any expenditure in violation c~

-the provisiQn~ of this section~ So officer or employee of a

political committee snail knOWingly accept a-contribution made ~-. ... the benefit or use of a candidate. or knowingly make any

expenditure on behalf of a candida:e, in violation of any

limitation imposed on contributions and expenditures under this

section.

Section 431(11) of Tl~:e 2 of the United States Code

states that the term "Person" l~c:Jdes an individual, partnersh:;,

committee, association, corporati~~, labor orqanitation, or ar.y

other organization or group 0: ?e:sons, but such term does n~~

include the Federal Governmen~ :~ any authority of the Federa:

Government.

Section lOO.7(a),:' :f 7itle 11 cf the Code ~.

Federal Regulations states tha: :~e te:m ":ontribution" incl~:e5 a

gift, subscription, loan, adva~:e, :: deposit cf money or a~y:~:~;

of value. The term "anything :: ·.·a:'.;e~ includes al: In-kind

contributions. Unless speclf::a:~i exempted under 11 C.F.R.

SlOO.7(b), the provision of a~y ~::~s ~r serv:ces without ~har~~

0: at a charge which 15 :ess :~3~ :~p ~sua: a~d ~~r~al char;e __ r

such goods or services :5 a ::~::::~::2~.

Se~~ion 1:6.5'b\ ~! :::~~ ::. ~f :he C:de of Feder3:

Regulations states that the pay~e~: ~y an lndlv:dual from h:s

her personal funds, includlng 3 ~~:sc~a: credit card, for :~e

costs incurred in providir.g gc:ds ~: services to, or obtain:~;

g~ods or services that are ~se~ :y :: C~ beha:f of, a cand:~a:e

a po~itical committee is a con:::':'..l::.cn ·..H~less the payment :'5

exempted from t~e definlticn c: ::~:rlb~tion under ~~ C.F.R.

S: 0 C . ., ( b , (, 8 \ . : f the p a ym e ;.: : s... ~.:: ex e :n pte d 'J r~ de r : 1 :. F . ? .

Page = 3/3 /94
:. :-. .: .: :. ''; a: '';:-- e s s "': -. Pi ;: a 'i :: :-'.:' - S :-::: : :-. :.;'. j :. \. :. j '...:3

:=ans=:::a:::~ pX=G~ses :.~:~::~~ ~~::~ :=ave::~; ~~ ~~~a:f =~ a

:3~~:~a:e :~ ~::.~::a: ::~~:::~! :~ a ~:::::=~: ra::i :: f:: ~s~~:

a:'"'.:: :'. : : a: s....;. :- s : S ': e -, :': e x ;: :;s e s :;: ~:j r :- e .-: :: ';' a:: :. =--. .: \. :. :1 '-: a: ,:- : :--. -e :-

:~a~ 3 ·::~~~:e~: # ~~::e ::a~~::~~ :~ t~~a:f :~ a ~a~~:i!~~ :r

==:::::a:

.. ::==:~:ee :f a ..:to. ~::::::a: =a::~:. a;:~, :~e :~~:~:.dua: :5

=e:~t~:sej ~::h~~ s:x~y days a~:e: ~~e ::=Sl~g jate =! :~e ~::::~:

s:ate~e~t ~~ .h:c~ :~e :~a:ges :::5: 3~~ear if the payme~t ~as

~a~e ~s:::; a ~e=s~~a~ ::~~:: :a:~, 2: ~::~:~ thl::y :~ys a::e: :~e

~ate C~ wh:c~ the ex~~~ses ~e~e :;.:~r:e~ :f a persc~a: :=e~:.: :~~:

.~$ ~C~ ~se~, Fer p~r~~ses =: :~:s se=~::~, ~he :::s:ng da~e

s:--~all ce ~he =ate :':'"'.:::::a:ed c;: :~e t-:-..:':';.,-.; s:a-:ement ·.... hl.::h se:".">?s

as ~he ::~t~f~ date for dete:m:~:~g whi::~ ::ha:;es are :~cluded :~

......... .. ........ -:- ""."

~......... c

~,,-- ..... s"'a"p-e-'" '¥ \w. _...... .. do '- • ..- :"'. a~~_' _ _ "_".. -:;- _ •• , '" .. s··

• ~....... .... s' ~... s"e"'l-e ... .... \.. p'V' _ ~, ...... p1"'sps" _ .. ., ...

:.n::~~de o~.y expe~~:~~:es fer ;ers~nal .:-::ng ex~e~ses :e.ate~ ::

a particu:a: indi~:d~a: ~:ave::~~ C~ c~~ittee bus:ness, such 35

:~~d c: l=dg:ng.

~~:ing ~~: reVlew cf ~he :~m::::ee's expense

reimbursements to campaign staf!, and of the Comm:ttee's

contributions recel~ed from cam~aign staff, we noted ~hat one

individual advanced funds on behalf of the Committee in excess ~f

~he 51 1 000 limitation. The excessive porticns of contributlcns

and advanced- funds totaled 56, 238. Th~ expenses w~!:e incur red. f.:: r

travel occurring between October 8, 1991 and February 23, 1992.

This individual also contributed $1,000 on October 28, 1991, As

of October 19, 1992, the excessive portion in the amount of

56,238 remained ou:standing.

The Committee Counsel provided written com=ents and

documentation subsequent to the EXlt Conference relevant to th:s

finding. He stated that the Co~ittee distributed to each

employee a ~:itten policy that s~a~ed that staff were not to

advance thelr personal funds to purchase goods or services ~~

behalf of the Committee. The Counsel also maintained that t:~e

frames allowed for reimbursements of staff advances should be

:onsistent ~ith the time li~its lmposed upon refunds of excess:~e

contributions. Counsel further contended that the section cf :~e

regulations that provide that the obligation arising frem a s:a~~

advance shall be t=eated as an ~uts~anding debt un::: reimb~:se=

·t •••should be canst rued to !Ilea~ tha t the Commi t tee may have a ~easonable period cf t:me :n w~:=h to ':etlre' the 1ebt by ma<:~~

~~e apprcpr:ate re:~bu:serne~~s ~~ s~aff, ~r by set:::~g t~e :e::

wlth ttie staff."

~:th :eqa:j t~ t~e r~s::~tic~ ~f :~e adva~ce n~te~

above, the Commlttee p:esented a debt settlement statement :~a:

shows that an ob:i;atic~ of 58 .:62 t~ t~:s lndividual was se:::~:

C~ November 21, :992 fer 54,08:_ Fina::y, the Commlttee asse::e~

that " ... 1t exe:clsed ~est eff=rts tc ~l~lmize t~e frequency::

staff advances, that :t :eimbursed or settled such advances ~::~:~

Fage ;.

3 3,· 94
a ~~~5:~at:e ::~~ a~~ ~~3~ :~e:~::~~ ~: ex:~ss ::~~::~~::2~S ~e(e

a::@2·pj that :e~~::e 3~; :e;ay~e~: :~ ~e~a::y. _~ ::~e: :~rt~er

3 :: ': :. ': by,:he'::; m: S s :.. ':;:--. . "

:~ :~~ :r.ter:~ 3~~:t :~;::: :~e A~dit s:a:: :~::;~~e~jej

'": :--~ a ': :: e --: -::- :n : ": e f.? ;::' -: ... : .:. e e .; :.. e :-: : : ~. a: :: :-; e s a f: a :: ~; a :": : e s are

~0: ex=ess:~e c=~:r:~~::::":s a~~ a~i ad~lt:~~al ::~~e~:s.

The Commi~:ee :~sponded ~o the interim aud:t report witr.

~ar~a~:~e arg~men:s a~j :~~~en~s ~~i~~ asserted ~~a: :~e :=mmltte~

had acted reasonab~y ~~ :oo~:y ~:~h the regulatlc~s ;=~er~~n~

sta~: adva~ces.

The ~cmmittee res~ated :~S advance poli=y. as jlS:~ssed

atc~e, and noted tha~ ~~e ... :~::e:~m audlt repc:: :~:ses ~ut a

sl~g.e example of a breach == th:s ;C:1CY.~

Further the Cc~~:~~ee s~a:ed that once it ~ecame aware

~f ~~e advances which led ~o t~e ex=essive contributlc~ cited in

the interim audit repor~, t~e :8m~:ttee treated thlS ajvance as a~

outstanding debt pursua~t ~o 11 eFR 116.S<c). The Committee

construes this section of the reg~:aticn " ... to mean that the

Coamittee may have a reasonable period of time in which to

'retire' the debt ... • a~d that " ... [i]f the debt arising from an

advance is pr-operly st!-ttledl' then it tOOL l~~J(~, vendor debt, should

not be considered to be an excess contributione"

Finally the Committee contends that the individual is " ... entitled to a 51,000 travel exemption, as provided in 11 eFR

1.0S.7tb}t8) ..• ".

The Audit staff is of the opinion that the travel

exemption does not apply to these expenses subaitted for

reimbursement.

With respect to t~e arguments and other comments as

presented above, it is the opinlcn of the Audit staff that the

Committee has provided no evidence or additional information that

demonstrates that the s~aff ad~a~ces do net constitute excessive

contributions.

The Commissic~ d~sagreej with the Audit J1Vls~cn's

conclusion that the Co~:t~ee :s ~~t entitled to the 51,000 travel

exemption. 'rhe C~m:n:ss:::-: be::.e·:es that pursuant t8 :: :.F.R.

S:CJ.:(b\(8), any u~re:~b~rsed ~ay~e~t for transpor~a::c~ ex~enses

ir.:~rred by an :~d:vid~a~ C~ te~a:: 8: t~~ candidate :s :-:ot a

c0~tr:bution, if ;.;:~hir: :~e $:,::: aggrega~ed i:1dlv:d~a:

exemption. In thlS ~asel ~~. ~estbrock 5ubmltted a req~est for

hlS travel expenses and ~e ~as :e:~burse1 a portion c! ~he costs

through a debt settleme;.~ te:~ee~ ~:mse:f and the Cc~:t:ee. The

regulations do nct add:ess the :ss~e of ~~ether the C=mm:ttee is

requlred to demonstrate ~:. ~es:~:~ok's ~:ntent" to have the

travel exemption apply c: nc~ a?p:y to h:s reimburse~ent request.

7herefore, i~ is the pcs:~icn :; _:~e C~~=:ss:cn tha~ t~e portlcr. Page ... _

3,/3/94
~X~~~S~Sr ~~ :~ - <-- ~..ao....- ---- _. •

:5 ~c: a ::~::::~:::~~

:-: :3 ': :- e it a : :; s '-, :-: :- :. -:- :- '.:: ::

Se~ :: ·:.r.R. S:::.-·::

....

-- -'"' -...- '-' ..

Sec t :. :::-: 5 3 t: H 3 :i d .; 3 4 ; b 3 I " E! u f T i :. : 2 -: f : e

~~:~ed Sta:.es Code =eq~~:e ~~e ~:s=:csure ~f a:l l~a~s, and t~~

: '1 e t 1. fie a i c n 0 f e a C h per s :"l .~ :on a k e salcan tot e r ;: c r :. .~ :

~---l·t·ee ~,,~,~~ ·~e -C~~~·'~Q _pr,~A ·~qe~~er wl'th .~e· . _ ...,;! i/~-i4i4 __ .,L ....... WI ... i .. -..; .... 4 • '- 1:::'-' v .. '- • ".il Ai t""' - .......... '-l, .... -'., "- ... ".. __ .. i

:den~lfi:a:.:c~ ~: a~l endorser ~: g~aran:or of such l~a~, a~= =~~~

and am~un~ C~ va:~e ~f s~ch l~a~.

Sectio~ 43~ b: ~4 • ~& 7:~:e 2 of the United Sta~es

Code requires for the repcrti~g peri~d and the cale~dar year, 1:sc:~s~re ~= ~~e tc:a: a~c~~t ~: a:l discursements and ~~e

repayme~t ~f a:: :~a~s.

Sec~ion l04.2{@\ of 7it:e 11 of the Code of Federal

Regulations specifies that the authorized committees of a

candidate for President shall file reports on FEe Form 3-P.

AdditionallYI the instructions for Schedules A-P and B-P of t~:..s

form package requi re the~ Coul ttee~ to --ftemfze --all- l-oans ~receiY"e-d

and all loan repayments made by the Committee during the repor:ir.g

period on this schedule~

During the audit period the Committee obtained two :~ans

from American National Bank and a nonconcurrent line of credi~

from Adams National Bank. Against these loansl/ the Committee

received six advances totaling S:,560,767, and made six repayments

for principal, interest and loan fees totaling S666,i22. Of :~is

activity the Committee did not i~emlze five advances totaling

Sl,33S,~67 cn Schedu:~ A-P, and dld not itemize five repaymen:s =f

principal, interest, and loan fees totaling $661,722 on Schedu:e

B-P. All loans w~re repaid in !~ll as of June 2, 1992.

At the Exit Conference the Committee was provided w:~h a

schedule listing the loans, advances and repayments which req~:=e

:temization on Schedules A-P a~d B-F. The Audit staff clarlf:ed

the itemization requlrements fer loan activity and the Commit~ee

appeared to concu~ wIth ~~~ ~e~c~endation.

:~ ~he i~terim a~d:..: :epor~ :~e AJdit staff ~e::~~e~=e=

that t~e Com~:~tee ~:..:e a~ended S~hedules A-P and B-P ite~:z:~=

~~e l~a~ act:v:ty.

il T~e lean act:v:ty re~:~wed ~ccurred prior to April 2, :;;:, t~e effective date cf t~e ::~~:SSlcn's revised regulatlc~S ~~

::ar.s a~d new ~eDC:::~~ :::=5. .. Page .:..:.

3/3 /94
'-.. A'_: :; ''; S t 1 2.. : 9 9 3 t :-; e -~:- ~~,:. : ': e ': ::" ;:<.. :. e d w 1 t h t, h A '.:,~ :

staff re~2mme~ja~10n and f::ed a~e;.de~ S:~e~~:es A-? ar.~ ? ~h::~

i t em:.. :: e d e :: 3 :-. act 1 ·.t 1 Y n c :. e d a:: : \' .

A' cf T:::e 2. of "~e

United 5~a:es C~de state tha: each re?ar~ s~a:l disclose

expenditures ~ade tc meet candidate c= :=~~::~ee cperatln~

expenses; a~d the name and address of each ~e:s~r. ~~ ~hom an

~xpendit~re :~ an aggregate amcunt or va:~e l~ excess of 520:

*ithin the cale~car year is made by ~~~ :e~orting =cmmlt~~~ ::

meet a candIdate or committee operatl~1 expense, together ~it~ :~~

date, amount, and purpose of such ~perat:~g expenditure.

The Audit staff's :eview of dis~~rsements 11entlfled ~~~

disbursements, totaling S74,2~8, whi~h were not itemized as

required. Thlrty-seven of these disbursements, totaling

$30,354, were expended feem the New Hampshire account 1n la:~

December 1991. The Commi~tee lncluded the amount of this activl~l

in reported totals but did net ltemize these disbursements. The

balance of the itemization errors (113 totaling $43,924) were

categorized by the Committee as ~Miscellaneous Unitemized

-- Expense-s. ~- --Generall-y, these disbur.emen~s ~er_e _c!lecks payable to

individuals in the form of reimbursements.. The Couittee-- -- representatives stated that these disbursements were not

aggregated and itemized because the funds received were used to

cover expenditures to vendors in amounts less than $200.

At the Exit Conference the Audit staff provided the

Committee with schedules of the disbursements that require

itemization. The Committee appeared to concur with the

recommendation.

In the interim audlt report th@ Audit staff recommended

that the Committee file amended Schedules B-P itemizing the

disbursements noted above.

On August 12, ~993 ~~e :cmmi::ee filed Schedules B-P

on which these disbursements *~:e ltem:zed.

D. Disclosure of Occupa~:~n and Name of Employer

Sec~ion 434{b\, 3\ A\ :: ::~:e Z of the Unlted S:a~es

Code req~ires a politica: c~~~:::e~ :~ rep~rt the identi:::at:~n

of each person who makes a c~n:r:~~t:o~ t~ ~he committee :~ an

aggregate amcunt or value in ex=ess of S:CG per calendar year

together with the date and a~c~~: 8~ s~c~ contributIon.

Section 431(13)IA: c: 71t:e : cf the United States Code

defines the term "i1entlf:.cat:.c::" ':.~ be ::1 the case of any

indivlduai, ~ne name, the ma:l:~g address, and the occupation of

such lndlvidual, as well as :~e ~a~e ~f h:s or her employer. Page ::

3 3 94
S~!:~S. ;3::. :~a: ~~e~ :~~ ~:eas~:e= =~ 3 ;~:::::a: ::~~:~:~~

S~:~S :~a: ~~S: ~~~=::s ~a~e =e@~ ~sed :: :~:a:~. ~!:~:3:~. 3~~

s~t~:: :~~ :~f::~a::=~ :eq~:~e~ ~i :~:s A:: ~:= :~e ;::::::a: ~=~~:::~~ 3~~· :~;=:: :! S~:~ ::~~:::~e S~~:: ~~ :~~s:i~~~~ :~

:=~~.~a~;e ~::~ :~:s A=~.

~he A~~:~ s~a!~ =e~:e~ed a samp:e ~f :e=e~;:s ~=~~

:~~:~:d~a:s := :~~e:~:~e :: ~~e :~enti:::a::=~ ~: ~a:~ :~~:=:2~:::

:e~~:r:~; ::ern:=a::s~ was ade~~a:e:y d:s::~se=. 7~e sa~~:e

=es~::s s~~~ed a~ e==== ra:e =~ 3€\ ~:th res~e:: t= ~:s::=s~=~ :~

:~~~pat::~ a~d ~a~e ~: e~ployer. :~ S2~e :ases t~e=e ~as ~~

e~idence =f a :e~~es: f=r the infcrmatl=~ a~d in =the: l~sta~:es

the inf~:=ation .as ~~tained b~t was nct d:s::~sed. ~lth re~3::

to ether :~ntr:=~:~:s the Audit staff a=Kno~:edged a~ ~~e EX~:

Conference that ~~e :~mmittee made effcrts s~cseque~t ~c

disclosure dates ~~ ~bta:~ ~~e :~:~~~a::~~ a~1 was s~::ess:~: :~

receivi~g some :~:~=~at:on.

At t~e £xi~ Conference, the Audit s~aff ad~:sed the

Committee of the hiQh error rate. The Committee aqreed to f~:e,

in alphabetical c~der, amended Schedules A-P to disc:=se the

o~cupation~nd naae ~f employer for contributlons frco

individuals. -

In the interim audit report the Audit staff reccmmended

that the Committee file amended Schedules A-P to disclose the

occupation and name of employer for each contributor requiring

itemizaticr...

On August 12, 1993 t~e Committee filed amended Schedu:es

A-P and corrected materially ~he om:ssions noted above.

E. Repo:~l~9 of Debts a~~ 8b::gatic~s

Section 434{b)(S) cf :~t:e 2 of the United States :~~~

requires :hat ~~e amount and ~a:j:e 8f outstanding debts a~d

obligations owed by or to a ~:::~::a: comm:ttee be dis~l~sed.

Sections 104.1: a and fbI cf ::~:e :: of t~e Code cf Federa:

Regulations sta~es, l~ re:eva~: ~~=~, tr.at debts a~d ~b::;a:::~s

owed by or to a ?oli:ical cc~~:::ee which remain outstanj:n; s~a::

ce continuously :eported unt:: ex::~gulshed. ~hese debts a~~

~b:igatior.s sha:: te reporte~ :~ se;arate s:~ed~:es ::ge:~e= .~::~

a state~e~t ex~:a:~:~g the c:r:~~s~a~ces and ccnd:::~~s ~~~e:

~hi:h ea:~ dec: a~d ~~~lgat:~~ ~as :~curre1 or extl~g~ls~e:. A

~ebt ~r ~~ligat:~~, :~e a~c~;.: :: k~:ch is ~ver $500 s~a:: ~e

reported as of :~e date on W~::~ :~e debt cr obligati~n :5

:ncurred, exce~~ ~ha~ any ob::~at:c~ lncurred for ren~, sa:a:j

~ther re~u:arly ~ec~::i~g adm:~:s:ratlve expense shal: n~~ te

reported as a =et: ~efore :~e ~ay~e~t d~e date.

and

:'he .. ..; .. n ..... ... staff re~:ewed sele:ted debts and Cb_:ga::::.s

1 5 f e :: :- ''': a : .;
: 9 9 : r ;.: :~ :- , :. =:::- .:. 1 ;:; a : :. :::'": s : -: : 3 : :"'::; 5:':' E ; 6 :. :. . :-..... :"'. : :' - : -" _~ :: ..

!~i~~~~~~;~~~:;ij~;~~~~~;rt~~;~;[~~~~;~~~f~;~~~Ij~1~~~~;f11~~r~~A: ~he ~x:: :~~:~:e~:e, ~~e A~~~: s:aff re:::~~e~d~~ :~a: :~e

:cm~:::ee :~s:~~~~e s:~=~;e= :~:e:~a. :=ntrc: ~:2:~~~:es :: ~-'~~~~

r~ :~e ~nter:~ a~dl~ :e~~r~ :~e A~d:: s:af~ :e:~~~~~~e~

~c f~:~he= a:::=~ on thlS ~a~~e:.

F. ~""''-'''''~-g {"'\ .. O"'ess ::e~-'''''\''''sel'';''\,:t'''''s :>a,·4 D· 1- fl"e r -'" .. -- r' ~.. ,......... ...,... ..... .,": • .i...i..... "'""' .. ..- -- .... l. .. .. -w. -:-- ... J, - _~_

Char:er Al: ::a~e_ ~~~~=r 01 Press Orsanlza:lo~s

Sec::~~ 9034.6 =' ~: 7:::e :: ~f the :=-de of F~dera:

Regu:aticns requires that t~e :~ta: a~~~~t pa~= ~y a~ aut~~:::~=

commit~ee for the cost of ~ranspcrtatlcn or f~: ground ser~i::~s

and faCllitles be repor~ed as an expenditure :~ a~=ordan~e N:t~

11 eFR 104.3\b\~2\(1 A~y relmbursement recelved by such

committee fer ~ransportatlcn or for ground se~Vl=es and faci:lt:es

shall be reported in accordance wlth 11 eFR 104.3 a)(3'1 ix}.

C.F.R. Sl04.3 (a)t3)(ix)(A) and (b),2)(i) requires an authorlzed

committee of a candidate fer Federal office to report t~e to~a:

---amount -of actl.vity wi_thin several categories of r_e<;:eipts,

including offsets to operating expenditures, and within severa:

categories of disbursements, lncluding operating expenditures,

Section 434(b)(3)(F) of Title 2 of the United States

Code states, in relevant part, that each report shall disclose :~e

identification of each person who provides an offset to opera::~9

expenditures t~ the reporting committee in an aggregate amount :r

value in excess of $200 wlthin the calendar year, together w~t~

the date and amount of such re=eipt. Subsec~lcn {S)(A) of ~h:s

section also requires the name and add:ess of each person to ~~:m

an expenditure in an aggregate amount or value In excess of S:::

within the calendar yea~ is made together with the date, amc~~~.

and purpose of such expenditure. :0 addition, : U.S.C. S43: :3

defines "identification~, for ct~er ~han an lndlvidual, as ~~e

full name and address of such ?erson.

The Committee chartered aircraft for campaign trave:

transport the Candidate, Comml~~ee staff, Press ~ersoonel and Secre~ Service agents. As a resu:t cf lncurr:ng expenditures :::

transportaticn and serVlces made aV!l:ab:e to Press perscnne:, :~e

Committee received relmburseme~~s !:cm the media organlzat:2~s

~hich totaled 573,120. ~~e Audlt s:aff noted a~ditionai ca~pa:;~

travel actlvity by some press ~erscnne~ durlng :ate January

ear:y March. F~: travel ~~r:~9 t~:s ~eriod seven media

~/ As of September 3:, :9~2, a:: payments requlring item:za:::~

~ade to vendors against :~ese cbligations were reporte~

Schedules B-P.

Page :~

3/3/94
7he Aud~~ staff determ:~~~ ~~a: :3 pay~e~~s ~~~m ;

organlzat:c~s, ~::3::~g $3;/23:, agg~e~a:~j In ex:ess :f S200

dur:~? ~a~endar yea: :99: and we=e :~e:ef~re requ:red t~ be

ltemlzed en S:hed~:~s A-? rte~:zed Rece:~~s - O::se:s ~2

£xper.ditu:es' a~~ E-? '::e~ize1 D:sb~~se~en~s - C~~ratin~l

O"';'\rsualf"\"- r .., q C4~4{b) ~.. A :"f~\ D':c:.""'''''Is'''' b !'-po, t-'1,.,l •• \0. ... 0 ... ""' ~.., \ '- <;;;l. - ,ni ....... _."" ute as 0 .....

receipt~s and dis~~rseme~t\s) provides :~e comp:e:~ actlvity ==r

which ~he C=mmi:~ee served as i~:er~ed:ary betwee~ :~e air travel

vendor and t~e Press.

At the Ex:: Conference :he :~m~:ttee was provided ~it~ a

schedule :lsting t~e :3 payments ~h::~ requlre ltemlza:ion en

Schedules A-P and B-P as ncn-cash transactions. Ccmmittee Counsel

stated that he disaqreed with the Audit s~afffs recommendation.

It was his opinion that since the media organizations made their

payments for transFcrta~ion directly to the air travel vendor, no

'discl-osure of th-ese- payments by the Commi-tt.e.. -was war'ranted.. The,

Audit staff responded that because the Committee a:ranged for the

charter air travel and was responsible for documenting all facets

of the Press travel program, disclosure of the payments made

directly to the vendor by the media organizations was necessary to

ensure full compliance with the disc~osure requirements.

In the in:erim audit report the Audit staff recommended

that the Committee file amended reports to include the 14

transactions tota::~g 530,43- within :~tal reported receipts and

disbursements, and file amended Schedu:es A-P anc B-P itemizinq

the 13 transactions totaling $30,252.

On August :2, 1993, the :cm~:ttee filed a~ended repor~s

which corrected materia::y the tota: reported rece:pts and

disbursements for the transactlons :o:al:ng $30,43-, and filed

amended Schedules A-P and B-P which item:zed the :3 transactions

totaling $30,252 noted above.

G. Rep0 r tin 9 .:') f Re c e : r :n ::". : ': i d'..l a 1s 3 :"". = D: s bur s e :n e :: ": s

for Opera"::~3 EXEe~d::~res

Sections 434(b' i 2, and c: 7:~le 2 cf :~e ~ni:ed

States Code requires a pcllt~ca: ccmml~tee to dis:::se :he total

amount of all contributlo~S from i~dividuals and t::al

expendit~res made t~ meet comm~t~ee ~perating expe~ses.

Section :J4.3thj of :1 C.F.R. ~equires t~a: a committee

receiving legal or accounting serv:~es p~=suant t~ :: :FR

lOO.7(b){14), which excludes frcrn :~e 1e~:nltion :f :cntrlb~tions

Page ::

3/ 3/ 94
12

: e q a: :\ :--: j a -: '~ ::- '.: 7". ': :. :": S : '~. :. :- t:' s :. +: 7": ;: t? ::- 5- :: :;, a y n 9

s e :: '; :. .: e S 1 S :.~, e- :- @ gul a: e -;:- :. :; l' e:- :-:: : ;. :.;'. j ::.. v:.. d''; a :.-

se:~::~s and :~ S~:~ se:-~::es are s~:e:y :~ e~s~:e

:~e A:~, s~a:: :e;:r~ as 3 ~~~: e~::y, ~~ S:~ej~:e

:: e :- s :::-: So ~'" :- : ••'" : =:. :: S'-': :: s e : -f" :. : e 5; : :-: e

:-: e r;-~~~~. ... _ _ . _. __ __. a ..~~..... ~~e - .. ..

~a-c... - _.~; Q~-~ - 0. - • • t-~eps- .. '- n :: 3 :. e s s tl C ,..,. S -? :' ~. : : .,~ e :- e

t: e r f c :' :: .:. n 9 s :: '": s : ',' : s .

7=:a: =epcr~ed rece~pts a~j :~ta: :e~cr:ed ~:'S~~f.~~e~:s

Nere ~a:e~:a:~~ :~=~ec: for :99:. ~c~evert ::~e ~:~a:s .:rh;n ""ere~""'t's .. - ... t'" ... a""d • a ..:... ..... _.....~,.... • • A"s;"'·''''c:.~'''e'''ts ...... ...... - _.U A" 'WAre o.u-~SSps"'44 ... ,-;;J, - \.... • ""~e .. ,. __

--""""" "",I L ..... __ e e -a~""p~a"'od a~ .... e~ s Apoenrlo~ .. jv of .... a .. .-···a ..... --5=; ;~". - - .,... - u ... ""'.... '" 4 -',.. ... -: '"- .... :- " ....", - .... .... ..... .. 1 \-. ... '" u... -........ "". - __ .. .... to

~epcrted ~lne t~~a.5 and t~e~ 'derlved" t~e llne ~c~a~ ~:~

~~ntribu~:cns frcm lndl~:duals to reconci:e :~ thlS :~:a:. :~e

': 0 nun t tee "de r i OJ e d ., tot a 1 dis bur s e Inen t s a san am0 un t. : e =: :; :' : : 3 :' :. e

::;. total rec@ipts and er:dir:g cash en hand! a:1d t~en "'d@r~"'ed" ::-:e

llne t~tal f~: =pe:a~i~g expenditures ~a :e~cncile t~:s :~ta:.

Beca~se the C~mml~tee l~=luded memo activity for exem~~ :egal a~d

accountlng serVlces withln the line totals fer both recelpts and

disbursements but did net inc:ude it within the calcu:a~:~~s :f

total receipts and total disbursements, the line tota:s for

unitemized contributions from individuals and for unitemized

operating expenditures were understated by $17,590 ($18,051 memo

activity - 5648 net reconciling adjustments) and 522,:;6 '518,051

memo--activit-y + $4,544 net reconciling adjustments), respectively

in 1991.

In 1992 the Committee included the memo activity

{S27,628) in its calculations of total receipts and total

disbursements. Thus, tota: :eported receipts were ov@:statec cy

525,845 ($27,628 - Sl,783 net reconciling adjustment~ and ~otal

reported disbursements -ere overstated by 530,924 \S2~,628 •

$3,296 net reconciling adjustment). Finally, 1992 activity was

also understat@d for other receipt and disbursement ac~ivity by

530,437 (see Finding II.F.).

At the Exit Conference the Committee was provided wi~h a

schedu:e detalling the misstatements discussed above. 7he

Commlttee concurred with the Audit staff conclusions.

In the interi~ audit report the Audit staff :e:~mme~ded

that the Committee file amended Schedules A-P for 1991 a~d :~92 to

disclose correctly the memo activity pursuant to Sectlc~ :j~.3jh),

f~le amended Summary a~d Detailed Summary pages fer :99: ~~

c~rrect the line totals fer receipts and dlsbursemen~s, and fi:e

amended Summary and De~alled Summary pages for :992 ~: ::::ec:

both t~e overstatements and understatements of line ~~:a:s.

On August 12, :993 the Co~~~~tee complied ma:e:la::y

~lth all recommendations c: the Aud:t staff by filing a~e~ded

Schedules A-P for both :99: and 1992 to disclose ccrrec~:v ~he

~emo actlvl~Y, and by f::~ng Summary and Detailed s~~ary·?ages

for both 1991 and :992 t~ cocrect the li~e totals fcr receipts and

disbursements.

Page 16

3/ 3/94
_: ::!? S: 3 :. s ~. a ': :: ~:-. e :::!t~: s s : :: -. .: e ': :- ::: :. '? 5 : :--l a: 3 :-. \. a ~: .. ::~ ...

any ~ay~e~: ~ade :: a =a~d:~a:e ~::~ t~e ~a::~:~; ;ay~e~: a· :_~:

was ~sed ==: any ~u~~cse ct~e= :~a~ to de::ay ~he ~~a::::ej

-- a_ ...... a ' ...... ex ..... a ... S c S ......... e ..... e --... ....... .." '" .. .-.... S ". -- -.... .... a ..""'" .a _.. ":11 - -, - .u r ... \:! •.. ...,~ c .. .. 1;; 1 "!'Ii .. _. ...... .....: - ~- L , ... '- " f; .... - l .. Y J ........ c- ... .io _ .... ~::, ~. -.. >l

s~a~l ~ct::y s~c~ :a~~:~ate ~: :~e a~cun~ S~ ~se~, a~~ ~~e

:' and i cat. e s hal:' pay "::= :. e S e : : e ": a :: y a:1 a ': '';:"".:' e :; ''':' a: "::: S ''''; : ..

Section 9S33.:'c·

Federa: Regu:atlc~S states t~a: ~:ellmlna~y ~a:cu:a::c~s ~e~a:~:~;

future repayments to t~e u.s. ::easury may be ccntai~ed ~~:h:~ :~e

:~terim audit report. ?~rsua~: ":J 59038.2 a' '2' :: ~h:s :::':e :~e

CommlSSlon ~i:: notify the :and:=a:e of a~y repayme~t

determinations net later ~ha~ ~~:ee years after t~e e~~ of :he

matching payment period. The issuance of this interim aud:t

report to the candidate constit~tes notice of any repayme~t

determinations for purposes of the three year period.

The Regulations at--ll C.F-.R. S9038 .. 2{b) (2) (iii} sta~e

that the amount of any repayment sought under this section sha::

bear the same ratio to the total amount determined to have bee~

used for non-qualified campaign expenses as the amount of matching

funds certified to the candidate nears to the total deposits of

=ontributions and matching f~nds. as of the candldatets date =f

ineligi.bility.

Pursuant to 11 C.F.R. S9033.5(a\{1), the Commission

determined Senator Kerrey's date of ineliglbility to be March :,

1992.

The formula and the a~~~~priate calculation with res~e~~

to the committee's receipt a:-::',:::y is as f:::llows:

Total Matching Funds :e:::!ied through the Date

of :~eli91~::::Y - March S, 1992

Tc~a~ :e~:s~:s through

Jate _& :~~::;:b::i~l

S:,265,~?- - .:3-5:5

S5,33J,592

Thus, t~e ~epay~e~: ~a::~ fer nc~-qua~ified ~a~pa:g~

expenses is 23.75:5\.

?a::e :-

3 3 ;.;
.;• 4

o. S~a:e-da:ed Ccmx:~:ee ~~e:~s ----~----~~~- ...---

Se:t:~~ ~:38.6 :f ::~:e :: :~ :~e ::~~ ~f F~=e~a:

?e;~:a::=~s s:a:es ~hat :f the comm:::ee ~as :~e=~s =~:s~a~d:~~ ::

~~€~~~::s :r ~o~:~:tutors :ha: have ~~~ ~ee~ :as~ed, :~~ ::~~::~e~

;~a:: ~=:lfy the :~mmlSS:=~ =f ::s efforts :: :==a:e t~e ~3ye~s,

:f s~c~ ef~~rts ~ave cee~ ne:essary, and its ef:8~:5 ~~ e~::~:a~e

~~@ payees to cash the outstandi~g ~~ecks. The c=~i:~ee s~a:l~

a:s~ s~t~~t 3 c~eck for ~~e t~~a: a~~unt =f s~ch cu~s:andi~9

~hecks, ~ayable to the Un:ted States 7reas~ry.

The Audit staff :ec~~ci:ed the Committee's :e~~::e=

1~5bursement acti~~ty to the bank activltv thrcuGh Fec:~a=~ ~~,

:992 and identified 14 s:a:e-dated :hecks 4tctali;g $:,525.

At the Exit Confe=e~:e ~~e Audlt s~af: ~:Qvided

:ommittee representatives wlth a schedule of the sta:e-dated

~hecKs. The Committee stated t~a~ :hey could probably resol~e

sc~e of the checks and would :epay t~ the U.S. Treasury the

r@mainder.

In the interim audit report the Audit staff recommended

that the Committee present ev:dence that (1: the checks ~ere net

-outs-tanding~--or-(2) _the __outstanding checks were voided,. and (3)

the Committee attempted to locate the payees to encourage them-to

cash the outstanding checks.

Absent evidence to the contrary the Audit staff wo~:d

recommend that the Commission make an initial determinaticn tha:

Sl,525 in outstanding checks are payable to the u.s. Treasury_

In response to the lnter:m report the Committee stated

that one check for $350 had been >Jlded, and provided an affidavl~

from the payee attesting that ~o Committee obligation exists wi~h

respect to the disbursement. 7he Committee did nct address the

remaining 13 disbursements tota:~~g Sl,175 (51,525 - $350 .

Recommendation 11

The Audit Division recG~~e~js ~~at th~ Commission maKe a~

lnitial determination that the C~~rnlttee make a payment cf S:,:-5

t~ t~e United States Secreta:y pursuant to 11 C.F.R. S9038.6.

Apparent Non-qua::~:e: :a~palg~ Expenses

Disbursements

Section 9032(9! of ::~:e 25 0: the Un:~ed States ::~e

defi~es, in part, the term nq~a::::~d :a~pa~gn expense~ as 3

p~rchase or payment incurred =y a candidate, Jr by hlS a~t~or::ed

commlttee, in connecticn wlth h:s campaign for ~ominatlcn ~~::~

~elther the incurrlng nor payme~~ ~f constl~~~es a ~l~~a:::~ :~

any law of the United States ~r cf the S~ate In which the ex~e~s~

:5 incurred or paid.

Page :8

3/ 3 94
3e:::~~ ~:~3.:~ a, :: ::::e :: -~ :~€ _:~e :f :~:~:~_

::Io?:;·..::a::.:~,s s:a:~s, :.:-: ;:a::-t, ::-:a:. ea:::-. ::a:-:~:.date s~.a::' r.a".:e :~,<?

h _~~e~ :: ;::~:~~ :~3: i:st~~se~e~:s ~a~e :y t:-:e :a~~:~a:~ ~: ~:s

~~:':--.::::.:e: :::7.::';:::~01? SI a:e :;',,:o:':.::..ec :?\~;:a:?7": ex~e:"'.ses. ::;e :a~~:.~!:~ 3~i ~:s a~:hcr~:ej ::~~:::e~ s S~3:: :~:a::-: a~~ f~:~:s~

:: :~e ::~~:ss::~ ~~ :eq~est a~y e~:ie:-::e :e;a:~l~; ~~a::::@~

~a~~a:;~ ex~e~s 5 ~a~e cy the :a~~:ca:e and agents ~: ~e:sc~s

a~:~c:::e~ tc ~aKe ex~end:t~res en beha:: cf the ca~~:da:e

Se:t.l(;~ 9;38.21b 3 ':: ::~:e:: cf the C-:-:~ ~f :~:~:3:

?e~~:at:::-:s s~a:es :~e CommlSS:=~ ~ay dete:~l~e ~~a: amc~~~ s

5~ent ::- tv.. :~e ca~dlda~e, the candidate's authorlzed c~mmlttee s t

:: agents. were ~:: d~cu~e~~ed :~ accordance with :~ :.F.R.

9:33.::.

Section 9:38.2(b){2~ 1ii' cf ::tle 1: cf the Code cf

Fed~=a: Fegulations states that the a~cu~t cf any repaymen~ S~~;~~

u~de: ~~:..s sec~:cn shall bear the same ratio to the to~a: am=~~~

determined to have =een used for non-qualified campaign expe~ses

as the amount of matching funds certified to the candidate bea:s

to the total deposits, as of the candidate's date of

)._neligibl:ity. Tot.al deposits is defined in accordance ~ith :.:

C.f'.R. 9038.J(c){2-J. -For- the---purpose ofseekinq---repayment_ f=r __

non-qualified campaign expenses from committees that have :e=e:~ed

matching fund payments after the candidate's date of

ineligibility, the Commission will review committee expendit~res

~o deter~ine at what point committee accounts no longer contai~

~atching funds. In doing this, the Commlssion will review ccmmit~ee expenditures from the date of the last matching f~n=

payment ~o which the candidate was entitled, using the assump~:cn

that the last payment has been expended on a last-in, firs~-c~~

basis.

The Audit staff reviewed the Committee's disbursemen~s

ana In ~~e interim audit report identified 67 disbursements ~otali~g 536,119 for which amounts totaling S24,513 were ~~~

docu~en~ed in accordance wlth 11 C.F.R. S9033.11(b). The ~ndocumented disbursements, categorized by the Committee's

purposes, by temporary checks ~rltten on January 28, 1992. a~: ~1

d:sbursements made after February 29, 1992 were as follo~s:

~:scellaneous ~~:temized ~isbursements - E:?~:~e~

disbursements ~~ :4 ~ayees (12 indiv:dua:s a~j

cash\ total:ng 5:;,:;5, f~r which 57,-89 :s

'J:1dc =umented.

:. Volu~teer Expe~ses - Eigh~een disburse~ents ~~ ::

payees, all ind:viduals, totaling 53,450, f~r .~:~~

S3,258 is undccu~ented.

Page :9

3,,' 3/94
3 _

·

.....

-" :cnsulting S=~t:acts -.:~C dist~rs~me~:s to t~c

aye e s # bot n ;. n d 1 \,- :. a'..l a s, t eta: ;. :1 9 S- :. 8, ! ::- w h 1 C h

Sj50 is undcc~mented"

6 _ New Hampshire Tempo:a:y Ctecks Written Jan~a:y 28,

1992 - Eigh~ ~:sbu:seme~ts to seven payees, five

individuals, o~e vender, and cash, totallng

51,353 for wh:=h S:,353 lS ~ndccu~ented.

Disbursements ~ade After February 29, 1992 - Eight

disbursements to e:ght payees, seven ind:vlduals

and a bank, totallng 56,890 for which $6,890 is

undocumented.

At the Exit Conference the Committee was prOVided a

--s-che-dule J)f _the disbursements lacking sufficient documentation_

The Commi t teesta-ted --that -they- would -attempt toobt-ain-a f f-i-dav i t-5-

from the payees as to where, when and how the funds were spent.

In addition, the Committee stated that they would provide

specifics on the payees and how the activities related to the

campaign.

In the interim audit report the Audit staff recommended

that the Committee submit documentation which demonstrates that

the expenses noted above are quallfied campaign expenses. Absent

such a demonstration, the Audit s~aff would recommend that the

Commission make an initial determination that the Committee make a

pro rata repayment of $5,822 ~$24,513 x .237515) to the United

States Treasury pursuant to 25 v.s.c. §9038\b)(2).

The Committee responded ~o the interlm report by

submitting affidavits from payees, slgned expense vouchers, per

diem worksheets, copies of cancelled checks, receipted bills, and

other documentation which support@d materially the qualifi~d

nature of the disbursements ~c~ed above. Accordingly, no further

actlon is necessaty.

D. Reimbursements f== ::a~sporta~icn and Services ~ade

Avallable tQ Press a~~ Sec=et Service Personne:

Section 9034.6,aJ ~f ::~:e :: of the Code of Fedetal

Regulations states, in part, that ~f an authorized committee

incurs expenditures for t=a~sp~r~atic~, gr=und services a~d

facilities made available t~ medla perscnnel and Secret Serv:ce

personnel, such expenditures ~::~ te :cnsidered qualified campaig~

Page ..... 3.. 3 /94
ex:e:::

;:e::s::-.:'"'.e- ::: ... ::::=e::

:.:.~. S~- 3:.: a'.

F: e ~''': a -: : -.:; s: a ': e s. ::": ;:' 3 =- :, ': ,-: a ': ::: :- e : -:":: _ : s e €I :". ': -:::: '_: :: :-:

ex~e~~:~~:es :5 :e:e:~e~ ~y d =:~~:t:ee. :~e a~:~~: 2~ < ... :~

:- e 1 :::;'J :- ;; e e :: ': :: ~:' e a ,: ::'. e :: : 3 :- e :- e s e :; : a :. ': e s a :.:. :-: :' ex:: e e ::

e:ther: :~e ~~dla :e;=esenta::~~'s ~:2 rata share of t~. ac:~a:'

:~s: ~~ :~e :ra~s~:::a'::cn a~j se:~:ces ~a~e a~a::a~:e; :~ a

reasona=:'e estlmate :f :~e me1:a r~prese~:a::ve's pr~ ra~a s~a:e

~f :~e a::~a: :cs: ~f the tra~spc:~at::~ a~d se:~::es maie

a~a::a~:e. A ~ed13 :e;:ese~ta~:~e's pro :3ta share sha:: te

ca:~~~a~~1 by d:~:d:r.g the tcta: :sst of ~~e t:ansportat:=~ a~d

serVlces Dy ~he total ~umcer ~f :~~~vid~a:s ~~ ~h:~ such :ra~sp~rta~:on a~c ser~:ces are ~a~e ava::able. F~r pu:;:ses ~f

this ~a~c~latlonl :~e :2~al ~~~~er of lnclvlduals shall 4~c:~de

=ommi~tee staf~, ~ed4a perso~~e:, Secret Service personnel a~~ any

other :~d:~lduals t~ whom suc~ ::ansportat:on and serVl:es a:e . made ava::able. T~e ~~ta: amou~: cf reimbursements rece:~ej :=:~

a media representative under thlS section shall not exceed the

actual pr~ rata ccst of the transpcrtaticn and services made

available to that media representative by more than 10\.

--Section90.34.6id}(1 ~- of Ti-tle 11 of the Cod-eo£- Federal

Regulations states, in part, that the committee may deduct fr=m

the amount of expenditures subject to the overall expenditure

limitation of 11 C.F.R. S903S.1(a) the amount of reimbursements

received in payment for the actual cost of transportation and

services described in paragraph ia) of this section. The

committee may also deduct from the overall expenditure limitation

an additional amount of reimbursements received equal to 3% of the

actual cost of transportation and services provided under this

section as the administrative cost to the committee of pr~viding

such services and seeking reimbursement for them. If the

committee has incurred higher admlnistratlve costs in provld:ng

these services, the committee must document the total cost

incurred for such services i~ order to deduct a higher amoun: ~:

reimbursements received from the overall expenditure limitat:o~.

Amounts reimbursed that exceed the amount actually paid by t~e

committee for transportation a~j services provlded under parag:3~~

~al of this section plus the amount of adm:~istrative costs

permitted by thlS s~ction up ~~ ~~e maximUM amount that ~~y ~e

:e=e:ved under pa~agraph ;0' s;.a:: be repa~d ~~ t~e T:eas~:y.

The Exp:anat:cn and ;~st:fi:a~:c~ : E&:' f:r :~e a=:~e

reg~latlc~S Federal Reg:ste:, ~=l~me 55, So. 145, Page 359:~

sta~es that ... the c~rrent :~:es permlt ~:::i~g the med:a f:: ~~

to 11~\ of the act~a: p~~ rata cost, whl:e allo«ir.g a ded~ct::~

frem t~e expendit~re llmlt of ~: more than 103\ of the actua:

cost. F'..lrther I ...... the amC'Jr.t :,et'",een 103\ and 110\ ()f the

actual cost must be repa:d t~ t~e 7reas'..lry, and amounts re:e:~e=

that exceed :10\ *1:: have to te returned :0 the media C~ a ~rc

ra~a bas:s." ~he E&: further s:ates that this approach

pa;e ::

3/ 3,: 9 4
: e : g;. :. : e s :: a :. ::- e :. '_: :- s e -, ': S ::::;- "::-: e :n e c: :-:: a y --: ': era :: . :

:=a~s~c=~ati~~ ::5:5 :: 3 ~:~:S~~:::~; :~~ ~r~gra~, b~t shc~~:

:eS'Jit :.~ a p::.:,:,:a:y =a~d: a~e's :::;-:-::.::ee :nt\K.:.n3 a prc-fl':.'

f:.~a::YJ sec:i:~ 9~33.::: :: ::.::e :: ~f the ~::e ~~

Fe~era: Re?u:a:::~s S:3:es, :~ ~a:~; ~~a: ~~e c3~~:~ate s~a::

:e~~:~ ::e~:r~s .•lth =e~~~ct :: :a:: d:sc~=seme~t and re:e:~:.

:n=.~=:~g vc~=he=s, ~=:~s~ee:s. :1._5 a~d accou~ts, acccun::.~~

systems 10cumentatlcn r a~d a;.v.. re~a:ed materials documentlnaJ

=ampai;n rece:~:s and d:st~=s~~@~ts, :~r a ~eric~ ~f three yea:s,

and s~a:l prese~~ these ~ec~~di t2 :~e :~~~:.ss:o~ ~~ r~q~est.

The A~d:t staff re~:ewe~ ~=~~~entation related t:

re:mbursements f== ~ranspc=:at:~~ a~d services provided tc Press a~d Secret Serv:=e personnel_ )oc~~e~:a~lcn covering 53 ca~paig~

:egs Vla chart.er aircraft f~r ~:."::;s be-:-"'een 10-'01/91 and 3,'05 92

the Candidate's date of i~e::~:b::i~y\ was provided to the Aud:~

staff as follows:

10/01,'91 - 1/19 92, :3 legs: The only documentation

provided to the Audit staff were Committee-prepared invoices for

travel by speclfic Press personnel. No passenger manifests or leg

-to~tinformat~on was provided. Th~ Audit staff used the amounts

billed for specific individuals as the pro rata shares.

1/20/92 - 1/30/92: The Committee provided no

documentation relative to travel. During this period the

Candidate traveled to New Hampshire, Texas, Maine, Washin9~on,

D.C. and Minnesota.

1/31/92 - 2/04/92, 9 legs: 3-5 Press and 3 staff

, ~ncluding the Candidate> per :eg. Leg costs ~ere provided by the

al r charter vendor; pro rata s:-:ares f :eg cost,/number of

passengers) were calculated uSlng the number of passengers noted

on Committee-prepared manifests or Candidate itineraries, ~lth

the exception of the two legs :::1 2'01.'92 for which the Aud~t staff

used the amounts billed per C~mmlt~.e-prepared billin9s.

2/05/92 - 2/18·9::: s~ documentation provided. 7he

Committee stated that the Ca~j:da:e used ground transporta~ion In

~ew Hampshire.

2/:"9 92 - 2 "2'" ,'92, . - :egs: 3-8 Press, 8-11 Se==et

Service, and 8-18 stat: ?e: :~~. :eg c~sts were provided =y :~e

air charter vendor; pro rata s~a=es were calculated uSlng ~~e

~umber of passengers note~ C~ ~a:'1:fests or Secret SerVlce

~i:::ngs, both ~re?ared by t~e :cm~:t~ee.

2/28 "92 - 3/05 92, :~ :egs: 5-8 Press, 1 Secre~ SerVl:e

and 4-7 staff. ~eg costs we:e ~==~:1ed by the air charter vendor;

Pa~e

3,/ 3_,·9';
;:,:~ r3O:3 t;~<~:·t?S ··.:e:-~ -:3:'C:'J:a:~: '.:~:-; :-:e ~-·.:~::--e: .. ;-~>Sc"";~:·S

:-. ':' :: €' ::'"': :'" .. :. :- e s ._ :;, S : :: -=: S €' : ... : ::: e ~:. - - :. ~; sa;: =a :- ::: _ ::,3 .. e

:::..:'.~:ar:es.

:~e A~~:t s:aff a~3:~:e~ :~e a~~~e :~~=:-~3::2n f:: ~3:~

: e :; .- ',,:~. .: ?: '? S 5 :;:-: Sec: ~: Se :- ': :. .: :- e =- s :: :"': :-: "?: '..:e :- _ -'l ~': ": :. : :. e:: s

ass e .-, .:;: : 5 -' :", .i s.: ::' 3 :: : : e j :.: 3 S -:::::::: '",,' S :

P:ess Re~~bu~se~e:"'::s

7he Audit s~af! :a:cu:ated t~e pre :a:a ::sts ~e:a::~~

~~ ::e:~~~:sable ~~s~s by Flig~t :eg ~c. :~r each ~ri~ ar.j

a~~~m'Jla:ed these :05:5. O~= :e~iew :~d:=ated :~a: the pr~ :a:a

~~st cf the Press for these flights to:a:'s S90,77~. The

~ommission's regulati~~s pr~~:de ~hat a :0% ~ark~p ~~ ~he a~:~a:

cost cf transportation and serv::es may be bil:ed ~~ the P:ess.

Thus the maXlmum amcu~t bil:able to :he P~ess t::Ol of cost'

totals 599,855. The Committee is :eq~:red t~ :efu~d :0 t~e P~ess

the amount of Press reimburse~en~s :e=elved :n excess of :~e

maximum amount billab:e. ~~e :c~m:~~ee :ece:ved $:03,3565/ :~

Press reimbursements for which travel d~cumentatlon ~as a;al:a=:e.

Therefore the Committee is required to refund to the Press en a

pro rata basis $3,701 ($103,556 - 599,855).

The--l'O\ -ma-rxup represents th-e- maximum a.mount-of

administrative costs that the Committee may bill the Press. The

regulations further require that only a 3% markup may be reta:~ed

by the Committee unless the Committee can document administrat:ve

costs in excess of 3\ up to the maximum of 10\. ~o comment was

made by the Committee as to w~ether administrative costs exceejed

3%. The undocumented difference between l03\ of cost ($93,50:'

and 110\ of cost ($99,855) must be repa~d to the U.S. Treasury.

Thus the Committee must repay to the u.s. Treasury $6,354

($99,855 - $93,501).

The Committee als~ r~:elved :elmbursements totall~~

$6,642 for which there was no :ravel or cost documentation. ·:~e

Audit staff allocated the am~~~:s :efundable to the Press a~d

repayable to the u.s. Treasury a~ ~~e :atios calculated f~r ~~e

documented reimbursements.

Thus, $3,939 is ref~n~ab:e :~ the Press and S6.-~: :5

repayable to the u.s. Treasu:y.

Committee C:::::3:S ~:esen: at the EXlt :2~:e:e-::e

sta:e~ t~at they were not j~:e~::i :~~=:~ed in t~e ~a~a;e~e~: ::

the Press ~:ave: program a~d :~e:e:~re co~ld offer ~o exp:a~a:::~

or ccmme~: en thlS matter.

~/ :~cluded in this total are ~:edi~ card payme~ts to~al~~~

530,437 made directly t~ :~e a:: cha:ter vendor. See

Fir.d:.ng r:.F. Pa~e 23

3/ 3/94
S4~,886.

~a-""c'" ~C""'·"'''-O -"""--""--

__ .. r_. __....- --~----------

... - ...... _--- :-.~. 1?__=.,A. :: a "::::~....,. e ..

n_._ t

'...

AC:::~:~q ~~ a Secre~ Servi~e ;=:::y j0cumen~f :~~

Secret Service re~~b~:ses =~~~:ttees ~~e lesse: =f: ,1\ firs~

~lass air fare, or the ~~C rata share of ~~e ~=st cf the

:harte= :~r the a;e~:s ~n ~~e t~ips. The Aud:t staff de~er~~~~~

~hat the correct b:::ab:e a~ount f~r ~he Sec=e~ Servlce was

541,829, based on ~~e acc~mu:ati~n cf t~e lesser of flrs~ c:ass

air fares 8= pro ra~a shares per leg at 100\ ~f c~st. The

regulations at S9C3~.5 a' d= not pr=~:de f~r ti::i~g

admlnistrative cos~s := t~e Secret Service~ Thus, the Secret

SerVice has overpaid :~e C~mmlttee 52,811 544,640 - $41,829 .

A pcsslole explanat:on for thlS overpayment ~s t~a:

the Committee erroneously bllled the Secr~t Service at 110\ of :~e

actual pro rata share of cost of providing transportation and

services instead of at 10C\ of actual cost as required by 11

C.F.R. S9034y6(a). At an interim conference, a Coamittee

representative explained that they mis1ntetptetedthe-apviicab-le

regulation and as a result billed the Secret Service at 110\ ~:

actual cost, the same "mark-up" they billed the Press

organizations. In addition, adherence to the Secret Service

policy could possib:y have contributed to the difference be~~ee~

the amount the Committee billed the Secret Service and the am~~~:

ultimately pald by the Se::et SerVlce.

In conclusion, the Secret Service has apparent:y

overpaid the Committee S2,811 in relmbursements for the cost cf

prOViding transportation and services to the Secret Service. At

the Exit Conference, Committee officials provided no additiona:

comments on this issue.

The Audit staff will provide the information

gathered during the audi~ to the Secret Service for any act::~

that agency deems necessary. Should the Secret Service deter=:~~

that no overbilling occucred or tha~ an overbilling occurred :~

different amount, ~~e Commlt~ee's S~atement cf Net Outstar.d:~~

Campaign Obligatic~s ,See F:~dlng I::.E. w:ll be adjusted

acc~rd:ng:y.

In the ln~erl~ aud:t report, the Audit staff

recommended that t~e Committee pr~~lde evidence that it did

overbill the Press a~d that ~n the absence of such eVldence

Committee shou:d:

:::e

{~ :epay the U.S. T:easury 56,-62, -hich

represents ~he undocumented d:ffere~ce between 103' and :::i _&

Page 24

3_-' 3/94
~~@ ~jm:~:s:=a~:\#e ::s~ ~~ ;::~~:~:~~ ~:a~s~::~a::~~ ~~~ s@~~::es

:: :~~ ?:~S51 ~~~

~ef~~j :: :~€ ?~~S5 :~ a p:~ :a~~ ~aSlS

:~,939, ~~::~ =e~:~se~ts the a~:_~: :~ ~X:~5S ~: ~~e 1:C:~ max:mu~

a:- :: '~::-'~ -: e '~': ~~ : ':. '? e ?:. :-:.:: : ~-, ?:: '! 5 S . : :. 5 e \: : ~~ : e ...,. as:= : :;, :: '''; :: e ::-: i? -~ 3 :, :'':' .3 : :. : s ;; s e:: :: :: e ': e ::-~. : :-. o? :: :-. e a:!' :: '~ :;: ;:; a :. t e a c r.

P -4 ..... h,...... -.~-_·.os "":::: ...... -_-"" .. , '::\"Q4 r· 4= d \..; ... ress :::;30:-::::3::'::-: 3.,--. .. -- -'-:--.'1;; c_. _.. e "-"!-_ • ...,. __ ...... e ... 'Jn c .. e ks

':ro~~ and back .

- .. ~as f~:the: =~=~~~e~~~~ ~ha: the C~mmlttee

prcv:~e d~c~me~tat:on relate~ ~= a~y re:~=~:se~e~ts fer

transpor~atic~ a~d se:~~~es ;:=~:~ed ~J Press ~e:son~e: with

respect to t~e ::':-.e :;e::':)d :. 2:,;.z t~ :. 3: ,9:. 7he r'!::~mmendatlc;.

addit.ior:.aliy reques-:e1 t::a: :::~ :~nunit:ee prov:=.e e',;:::er:ce tha:

:~e Secret Servi=e ~as ~C: =~e:t:::ed.

In =es~onse := :he in:e::~ audit report, the

~cmm:ttee prcvlded documenta::=~ =elati~e to Press travel on

3,"4/92 a:id 3 5 '9~, the f:~a:' :'._::: 1ays :::: :hartered a::::raft

travel. This dccumentatlon :nc:~ded photocoples of Press

passenger lists, passenger man~:ests and several

Committee-prepared Press travel lnvoices. The only additional

information included in this documentation was the identities cf

Press' travelers for these ,two da~es; toe total number of

passengers and leg cost information was preViously available.'

The Audit staff reviewed the documentation provided

for 3/4/92 and 3/5/92 and determined that no change to the amounts

repayable to the u.s. Treasury and owed to the Press, as contained

in the interim audit report, :s warranted. The Committee stated

in its response that other tta~ the docu~entation provided for

3/4/92 and 3/5/92, " ... the Committee does not dispute the

positions taken by the Audit staff on this matter." No mention of

the reccmmended $6,762 repayment to the u.s. Treasury was made by

the Commlttee in its response6j, nor was any eVldence provided

regarding the recommended 53,939 :n refu~ds to the Press.

The Audit staf: f~r~her notes that the Committee

did not respond to the Audit s:a:: recom%endation that the

Committee prOVide documentat:~~ =ela~ed ~o reimbursements f~r

transportation and services ~=~·;:ded t~ ?=ess personnel fer the

tlme period 1/20/92 to 1/3~ ~~. Finally, the Commlttee provided

~o e~11ence that t~e Sec~e~ S~:~::e ~as ~~t =ve:bl::ed.

~/ The Committee did not dc:~~ent :nat the admlnistrative cost

:f providi~g such se:v::es :~ t~e ?:ess a~d seeking

reimbursement for the~ ex:ee~ed 3', as ~=ovld~d by 11

:.F.R. S9234.5/d\(1 .

?a;e ~::

3/3 9-;
:~e A~~:~ ~:~:s:=~ :~::~~e~~s :~a: :~e ::~~issicn ~a(~ 3~

~~~~~~~ ~~~e~~;~~~~~~:~~a~:~~::~~~::~~~~e;~P~~3~~:~~·il~::~~s~~~ :: :: s : :':: ;-:' 2" -.: :. :.. ::.3 :; S po r :. a :. :. ::-. .3 :-':. 5 e : .: :. : s :.: :. e P: 5 S

~~rs~a~: :~ :: C.:.R. S9:3~.6 d 3~d t~at :~e :~mml~:ee ~e:~~~

t~ :te Press cn a ~:~ rata ~aSlS S3t~39, ~hich re~rese~~s :~e

a~cun: In ex~ess == :~e ~:J, ~ax:~~~ amou~t th~ :~mmltte~ ~ay

receive f:~~ t~e ?:ess.

E. Determ:~a~l~n of Ne~ c~:s:a~ding Cao?aign Ob::~a~i~~s

Section 9S34.5~a) of 7:::e 1: of the Code of Federa:

Regulations requires :hat ~::hi~ :: ~a:endar cays of the

=andidate's date c: :neliglbl:ity, :~e candidate shall s~bml: a

statement of ne~ c~tstanding campa:gn obligations which ==ntal~S,

among ether items. :~e total of a:: cutstanding obligatic~s f=r

qualified campaig~ ex~enses and a~ estimate of necessary ~:n~:~9

down costs.

In addition, 11 C .. F.R. S9034.1(b) states, in par~, that

if on the date of ineligibility a :andidate has net outstanding

,camp~~g~ obligations as defined under 11 C.F.R. S9034.S, that

candidate may ccintinu.ff to -receive matchi-nq payments- provi~ed tha_t

on the date of payment there are remaining net outstanding

campaign obligations.

Senator Kerrey's date of ineligibility was March 5,

1992. The Audit staff reviewed ~he Committee's financial activity

through April 2~, :993, analyzed M:~ding down =osts, and prepared·

the Statement of Net Outstanding Campaign Obligations ("NOCO") as

of June 30, 1992 which appears below:
-.... - ,

:-~;:':t:al Asse:s

:::A:' .:".5SETS

A:==~~~s Pa;a~:e f== C~a:~fie~

Ca~paign Expe~ses

A~~~nts Paya~le to u.s. 7=~asury

S~ale-ra:ed Checks (:::.3.

Press 7ra~e: (III.D.l.-

A=~unts Payable to Press \!II.D.l.~

Amounts Payable to u.s.

Secret Se~~ice (I!!.J.~.)

Windinq Down Costs:

Actuil (7/01/92 - 4/2~/93)

Projected 4/28/93 - ='-01/95)

TOTAL CBLIGATIONS

NOCO (DEFICIT)/S~R?LUS

($502,159)

1,175)

6,i€2.),

3,939)

2,811)

375,355)

46,86i) ~/

($939,C-:--S'

($839,::-

/ A::' figu =e s s:; C ..... :1 .'; e =e :: e : e : :: :. :"". e:i a s c: 6, 3: 9 2 u :. e s s

other·...'ise :1:~ed.

bl Since estioa:es -""'ere use:; •.. c=:npu~ing this a~ount:, t:~e A',;::.:

s:aff wil: ~eview t~e C:~~:.::ee's disclosure reports a~~

'- ... -""I~ ~roe .. o-....... c·s ac: -,:)-.::a~~.::l"'- .. "'" ..... ,....- ...... are """p a-~"a' '- '- .....1. .... ... .... .. - - "'" .. , """""' a"~;:;; -- ...... l' -..., '- .......t". ... •• - .... ... .... .-

flg~res with the estit~!~~4ar.j prepare ad:ustments as

necessary.
-...

Sh~~~ ~e~=w :5 a~ a~:~st~~~: -~r p~:~·a~e :=~~r:t~~::~S,

:~:~:est 3~j matchlng f~~1s re:e:~e~ d~=:~; :~e ~ericd :~:i :,

:99: :~~:~;~ :a~~a=i 3:, :993, :~e ~:s: :~~:e~: !:~ancla:

:~~~:~a~:=~ aval:at:e as :! :~e :3S: ~a::~:~g ~~~~ ~ay~e~: ~~::~

~as :e:~~::ed ~n :a~uary :9, :993.

~occ ~eflcit a~ 6 ~~

:nte:es: Recelved

M.at::~:r;g Funds

Priva~e Con~r:butic~s

Remaining Ent::lemen~

as of January 31, :993

5356,:66

S469,94~

S 1.,812 7../

As of :anuary 31, :993, :~e :~mmittee has ~ot received

matching fund payments :~ excess ~~ lts entitlement. ThlS

a~a:ysis is sub:ec~ to :~ange ~ased on fut~re adJus~ments t~ ~~e

~oco statement.

IV. Summary of Amounts Repayab:e to the u.s. Treasury

__ Pre~~nted below is a recap of the amounts recommended by the

Audi t Division as subj-ect to the repayment pr-ovisions- -of 1-1 --c" F -.a~

19038.6 or 11 C.F.R. 59034.6:

Finding III.B.

Finding 11I.0.

Stale-Dated CheCKS

Profit from Press Travel

Total Repaymer:t

$ 1,175

6,762

S ],937

2/ This figure is conserva~:~e :~ :hat the a~ount paid l~

anticipated settlemen~ :: :a~;er amount owed to :er~a:~

vendors/indiv~dua:s was ~se~ ~= jevelcp ~~e Accounts

Payable figure. C~ce a su=~:~:ed Debt Settlement P:a~ ~as

been reviewed by the CO~:SS::~f the amount of Accou~tS

Payable for Qualified Ca~~a:gn Expenses in the NOCO

Statement may increase :es~:~lng ~n both a larger ~oco

deficit and remaining ent:::e~ent. No change in the Aud~~

staff's conclusion will res~:~ frcm th:s possible

adjustment. The maximum a~ou~: Qf the adj~stment would

be S~O,OOO.

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KEPlORANOUPl

TO:

Staf: Q"''''' """" or

-~ - ---- ..

THROUGH: :c~~:. S~r:~a

FROM:

:.orenzo Holloway

Assistant Senecal

-~ - J1

Counsel

SUBJECT: Proposed F~~al Aud:~ Report on

K~rrey for Pres~den~

Z-RA .443~

The Kerc@y for President ~Qmmittee ~"the Committee"} is the

principal campaign commlt~ee ?f Senator J. Robert ~errey, a

candidate for the 1992 De~ocrat:c presidential nomination. The

Committee received public financlng under the Matching Payment

Act.l/ The Commlssion determlned that Senator ~errey's date of

1 -:- ''l.. l' v h . ..., 0 ... p 6 p, S - ine.lglo: lty was narc. ~, .. ~_,. ursuant to u ... \.-..

S 90 38 ( a and:' 1 C. r . R.. S 9.:; 38 .: a \ / 1 " the A. ud 1 :> : .: :. $ ion

::~nducte:l a:1 audlt ar.d exa:'t::~a::::;:1 cf t:-:e Committee's receipts,

disburse~'en-:s, a~j~'Ja::f:e:i:arnpaign expenses. ':'he Office af

~enera: ':u~sel has :e~:e~ed ~~e proposed Final Audit Report,

submltte:: :: :~:s :::::e c:". :':::t.er :9, :'993. :f you have any

... 'rh r:. '..1 g~. ':) u t 2) tl r -: -: ~:ne!'1 : 5 '. a :: hi n g P a yme n t A:' ~., ref e r s to

the P es:1entla: ?r:~a:l ~a::~l~? Payment Account Act, 26 u.s.c.

S 903 -9',~2 and "FE:;.. .. re:ers t~ :he F~deral E:e,:,,: .en Campaign

.L-.ct C ::"-:. as a:nended, :: ::.5.:. SS 43:-~5~.

Page 31

3/3/94
~o-:": - CM:emo-r~a-ri dth, t o-~ 0 be r t J" CO S ~.

Prcpcs~d Final Audi~ Rep~r~

Ve~r~y fcc P~@slde~~

[:'RA .443

Page 2

-: .; e s !: 1 :: r~ sat ~: '~~ i'; : :: :- '? :. -: S 1 ~: tTo? S e : ': ~~ :i :: ': .~ :- ~: ~: e z, :

a::~r~@y ass~g~e~ ~: :~~S 3_=::.

:~~S Cffi=e ~=:~s ~~~::~::; :~~: ::~:~:s ~::~ n~~~~r

-~ ::~j~~;s a~~ :e==~~e~ja:::~s :~ :~e ~::~:sed ~eF::t wh~:~ a~e

~~: j:s~~sse~ serara~ely :~ :~:s ~~~::a~j~~: ::~~:~a~:~n ~&

: : a r: s : e'~ : \/ e d : : . 9 '"":. : e ~:. : .3 :. : -: r: f j: 5 t -.; :: 5 ~;'~ en ':- s

• d:sc:~s~:e c: ~:=~;a:::n a~~ ~a~e ~f e~F:~yer

::.:J.\; ~,repC':::r.g of :::e:::s 3::': 8b~:.;at.ions (::.£.1;

_ r~p0~::~; =: ~:ess :el~c~:se~e~:s ::.:.); 5 reporting 2: re=~:pts ===m :~j:~:d~als a~~ ~:s~~:se~en:s f=r =peratlng

ext:endltures ;11.'3.1; , .... , s:3:e-::a:e:i c:-:e2"i<s t::~a::.n~ 51,1-:

::r. B. I; 8} undocumer:t:ed :::,s:::·..1:'se~e~~s tata::::; 524,9:5.34

:::.:. , 9- ~efunds ~8 ~~e ;~ess f:r ~ra~spor~a::::~ tctaling

53,939 a~d a repayme~t ~o ~~e ~.s. :=eas~ry of S6,7~2

! I I . D. 1.. : and I 1 rJ' sec r e ':. 5 e r .: : : e : .... e r payIn e n t c: S 2 , 8 11 . :..

::1.D.2 ...1..

Ie EXCESSIVE CONTRIBUTIONS RESULTING FROM STAFF ADVANCES

(II.A.)

Mr. Huqh Westbrook, ~he :~~~:::ee's ~reasurer =ontributed

Sl t OOO to the Committee on Octcber ~8, 1991 and made several

advances to the Ccmmi:tee. 7hese advances consist of 56,238.42

in air travel expenses lncurred en behalf of the Committee from

octohei 8, 19-91---ttf February 19, 1.9~2. 3./ In the Interim Audit

Report, the Audit Division recc~~ended that the Committee

2, We note that the Commi~~ee :iled a debt settlement plan

~ith the C~mmission on Febr~a:y :, :993; the Report Analysis

Division is currently revie~:~~ :~e ;~an. The Committee is

requesting the approval of the settlement of $186,974.24 in

debts with 3S vendors and ind:v:dua:s.

3, The Committee's debt se:~:e~e~: ~:an sho~s that the

Committee owed Mr. Westbrook S8.:~:.S2. The debt settlement

plan, ~hich was signed by ~:" ~es:~~cc< on Novemb~r 21, 1992,

does not indicate the purpose =~ :~e additional Sl,923.10

iS8,161.S2 - $6,238.42) l~ exp~~ses. :n response ~~ the

question in the debt set~:e~e~: ~:a~ requesting a s~atement

of the terms of the initla: ex:e~s::~ :f c:edlt and the

nature o~ the debt~ the Comm:~:e~ s:ated: ~:reditot has

s~bmitted receipts to be re:~=~=se:; eXFenses were :~c~rred

cy tc!re{~:tor durlng the ca:::",pa:..~:--.. " 7:-:e ':()mmlttee :s

~fferlr.g Mr. Westb~ook S~,:8:.-: :~~:~ S8,l6l.S2 .~

settlement cf thlS debt. ~e :".::e ':~at :~. supplementa:

:l:Jcumenti,tlcn submitted afte: ::-.'? ex:: conference :he

Committett indlcates that it ~as a::eady pald S~,080.~6 t~ Mr.

~estbroci. 1n conslderatlcn :~: 3~:ee~r.g :~ sett~e the debt.

~he C~mm: SSlon's debt sett:e~e~: :e?u:atlcns prohlbit

':'Jmmlt~e('S frcm maklng any F3':":""€:--.:s :: :::edlt::;:s :~cluded :;'1

the debt settlement plan un::: :~e :::~~lSSlO;' completes its revie~ =: the plan. 1: C.:.? S ::~.~ a .

Page 32

3 3 '94
Me~~~a~~Jm to R~~er: J. Css~~

?r~p~s~~ f~~al A~:~: Re?Or~

¥~:.:'?': :-; F~t?s~3e;.:

: LR.~ .: 3

Pa:;e

'? X : s s : ': e

::5 res;:~se :: ~~e :--Q~:~ A~~:: ?~~::: :~~ :~~~:~:@e

s:a:es ~~a~ the ::~~:::~e ~a: ~::::e~ ~::::y ·~a: ~:~~:b::~d

s t:. a :! :: =- .~. 1''; : e "? S :::- c' a .... 3 :--- : : :-. ;~ .; ..... a: :..:~. s -:: :;~,; =- : :'. a s e

gc~::s :: s-?:'::.:es C:1 be~-?\:: :: :-..re :::-:-:.::ee. :~"? ::~!'r.::~ee

s~a:es :~a: t~e ;~:::y ~3S ::~s:s:e~: ~::~

:te s:a~~ advances :eg~~a::~~.

--. ....- -'" ..

:~~ :~mmlt~ee :cn~e~js :~~: 3~Fr=prla:eli t:~a~ed :h~

;.Je 5 ': ::: : :: i< a d van c e a sade b:., : i::: :. :: : r; ::; rei m12"J r 5 e me --: :. . -: h e

c~~~::~@e ~ain:.a:~s ~~at t~:s ::e~:~e~: ~as ~~ns:s:~~~ ~::~ 1:

C.F.P. ::6.5fc:'s language, ~~:~~ ~:~~:des that ":he ~bli~ati=~

ar:Sln~ from" a s:a~f advance s~a:: =e ::ea:ed ~as a~

ou~s~a~1:~g de~t ~~~:l :ei~~~=s~~" :e~phasls ad~ei'. Th~

Ccmm:::ee ~ainta:~s :hat se=::=~ ::6.5,:· should te c=nstrued ~~

mean ':!'"'.a~ ~he Cc:noi::ee may ~3':e 3 :-eascnab:e ~eri=d of time i::

'N h 1 C :: ::: t, ret ire" : :-: e dec t. t :' :"" a -: :. :-: 9 t e a p pro p r ::.. a : e

re::..mbu=se~ents t~ s:aff. cr ty se::::.:-:g :~e det: ~:.~n tte s~aff.

To bolster its arqument, the :~~~:::ee stat.es tha: 1: C.F.R. 3 .....

.~~ - r

....... l express··y.. ~~~H.4e~ ~"'¥v",,,,,,,,,, .~~~ _ •• _,,- ~~~~s --.,..~'- ~~-- ;:)_;;1 ~~~~~....... \...-an, be s-_~_·,.1-_~ ... __ .... ..,l

or forgiven.

:he Committee also argues :~at ~he Commissicn shouldtrea~

a debt from an advance similar t~ ~end~[ debt. The Committee

states that under 11 C.F.R. S ::6.3. ~endor debt is not

cons~dered to be an excess contr~butlon unless the extension cf

credit 15 made outside the crd:na:y course of the vendor's

bUSlness, or on ter=s not SUCs:3~::a::y slmilar t: thp. credit

extende~ to comparable nonp~:::::a: jebtors. Tr.e C~mmittee

reasons that if the debt ar:s:~~ ~::~ an advance lS properly

settled, then this debt, like ~e~d=: debt, should not be

conside:ed to be an excess:~e =:~:::~~tion. The Committe~

maintains that it reported :~e ~e=:, ~~d then set::ed the debt

on reasonable terms, conslste~: ~::~ ::5 treatment ~f other

debts, and within a similar t:~e ::a~e.

In addition, t~e Commlt~ee 3_~_ :~~luded a s:ate~ent that

Mr. Westbrook was entitled t: 3 --,- ~~ ::avel exemption, as

provlded in 11 C.F.R. S lC:.- = :~e Ccmmlt.tee asserted

that ~=. WestbrOOK ~is e~::.::~j :: a Sl,JOO travel

exemptlca (and) t:1~ the a~i:~ 5~~:: ~as not made an adjustme~:

~-.,. ~:s . ravel exe::-.;:''':lOi., 3-~ :: -:-: S~."

.~e ~roposej F:~a: A~j:: ?e;::: ::~::~jes :~a~ :~e

Cc mm: : ': e " · s res :; 5 e d::. d n:;: ;:::- '.' :. :: e -2 ': : j e!1 c e :- add i t ion a:

lnfor~a:" en to de~=~strate :~a: :~e S:3~~ advan:es do not

ccnst:~u·"e excess;.·..·€' contr::;'..;::.::-:s :.:-: :~e amount. :f 56,238.':'::.

~lth regi\rd to the Committee's S:3:e~e~t ~ha: Mr. ~estbrook was

ent:~:ed to a Sl,COJ t:ave: exe~~:::~ as provlded i~ ~l C.:.?,

S 1::. :)) (8 \, t eA',,; d :. t D:.·::. 5 : : :-: :: : : 'J d edthat t ~. e Co mm itt e e

is ~=: e~titled :: :he exe~p,,::=~, ;:~e~ :~at ~r. ~es:brc~k

Page 33

3 3 9~
--,~,~~- Memorandum to Robert

Proposed Flnal Audit

~~rrey ~~r ?reside~:

LRA .4.;3 \

Page

J. Ccsta

Re~:r':

: :"1 s e : f t':1 p:;; ":;; S t: rat e d :; :':l ": e :- : .. :- - 3 .. '? ": ..... '? ':.:- 3 .,' e: ex Q :n C' :. :--:

ap~~:e:1 aga:.:"".s: h:s ~~::"'::-.:::SE2:ne:-<: :e-:;_'?s:.

~~ ~:sa;:~~ .::~ :~e =:~~:::~~.~ :=~:~~:::~S ~::~ res;~::

:.:--.~ :!::-~:'·.::a::.::~~!:': _.~.~. 5 :::.: ::- ~r. :-;es::;:-::'::,!<'s

3 rj ..... a :-. ,.- '? S . :- :. s :;:: 1 ": e t:' e : :. e .: e s ':" - ~": ":. ...: s : :: :: :- : .... ' 5 3. .: ~:lL- : s

s 1. 6 .: ::-. r. e s : to :- ::: c · spa ': ': e r :'": :: 3': '.' ~:-. : : :-: -; :. ''': !i j s t ;: a ~.

f~~ trave: se:~lces a~~ t~e :cm~:~:ee's :a~:'~:e := ~ake any

~e~mc~=se~ents are t~~ :yre ~f a~:l~:~:es se=~:~~ ::~.3 ~~s

:~:en~~d ~~ address. 7~e ~Jrp~se ~~~er:Yl~; se~::~n l16.3 :5 ::

'den,,·-t:·,J s~""a""o"""s 'fhere " ...... A···~,...'·a·c::. S·.,.::.h·-. "'as ,.. 1 '- ..... .1 ... ... .... ;.. #. .. ',' -. •• ,'" •• :.J ............. -" ..... - " ... ""' Q ....... '= .. .;;;: 0 U ::- _ e s

may hav@ ~he ab:.lty tc Clrcumven~ ~~~ ~~~:::t~::~~ Ilmit~t::or.s

by paYlng ~~mmi~~ee expe~ses and n~': ~xFe~::~; :e:~burs@m~~: f::

substant~a: ?eri~ds cf ~ime." EXF:a~a~ic~ a~d J~s::ficaticn of

:: C.F.R. S l:E.:, S5 Fed.~. 2638: J'.;ne 2,-,1989\ Mr.

~es~brcok inc~rred ex~e~ses en te~a:f ~: ~~e :8~~1~~ee frc~

October 8, 2991 to February 19, :992. 7he Ccm~:ttee neve~

:: elmbursed Mr. We s t b r (; c 1< a j the ..: ':: !IU:l:" t. tee j :.::' :-:-::; t res 0 1'v' e : h e

debt untll ~~~ember ~:, :39: whe~ ~:. ~es:~:c:~ a~reed t~ acce~:

50\ of the amount owed i~ the debt settlemer.t plan.

With regard to the Commlttee'S sectlon 1l6.5 and 116.3

arquments, we note that these pro~isi~ns have different

underlying purposes and independent procedur~s. The fact that

theCommitt-ee has proposed to resolve-the -out-st.andinq-bala'nce

owed to Mr. Westbrook through a debt settlement does net er.tit:e

the Committee to circumvent the policy underlying 11 C.F.R.

S 116.5.4, The Committee and Mr. Wes~brock may agree to settle

~he debt-fcr an amount less than the entlre amount owed.

11 C.F.R. S 116.5(d). Ho~ever, depen1ing C~ ~hether Mr.

~estbrook used a personal credlt ~ard, the re:rnbursement s~oul~

have been made within either 30 or 60 days. :1 C.F.R.

S 116.S<b)(2'. At the explration cf :~e 30 or EO-de! period,

the unreimbursed travel expenses, less the $1,000 a~lowed for

the travel exemption, were an excess:~e ccntr:bution to th@

Committee. 11 C.F.R. S 116.5tb!\1 1 a~d (2). As previously

stated, the expenses at issue. ~ere i~=Jr=ej as early as Oc~~be=

8, 1991 and Mr. Westbrook d:d net accep~ :~e :o~er amount

affered in the debt settlement un~:: Sovember :1, 1992. Dur:~;

4/ :f' he CommlSS~C:1 ::ie:e:-:n::.es ':~a: ~'":e C~!:l;n:t:ee' s deb~

settleme::t plan, ~ith respect :~ H~gh Westbr~2k does not res~l:

inanap!' are r.. t ',: 1 0 1a t i (::1 C f FE::; = : e :: c ~:n :. 5 S : :: , 5

regulati~~ns, t:he proposed sett:e:ne:-:: may ce ·::e·.... ed as a

!n 1 t i g a :. r: g : act 8 raga ::. 5 t : he': :. : a :: :. ::;: .

Page 34

3 3 9~
: :. ': :. S :. :: n f s

:':':ak~ ,:-':

.- .::; -: ;~e::~,p s , :

CC5ta

: :- a-: '?: x e ~: :. C':-. . ? '''; :- s '';' a :"'. : :: , F' , ? S : ~. :: 9 3 i'

~~:~~-: ;~sej ~3y~e~: ~:~ ::~~~;:::a:~:~ ex~e~ses :~:~::~~ ~i ~~

~~d:~:j~a: =~ ~eha:~ :f ~~e :~~~:~a:e :5 ~:: a ::~:rlbu":.:2n, :~

~nls :ase, ~r. ~es:=r~c~ s~~~:::ej a ~e~~est f=: ~:s tra~e:

,... ...... ses a""..:f ~e "Na- ~o·-'''''·'-Sc.~ :i ..., ..... - .. ,,......: -.J: ~~n - .... - .. s .. ~... ' X t-' - •• • •u •· :::t.. '- • ,....... ... .. - ::"" -- .. - ... - , • .... - - - .:. - - _ , , .. C \1 9 :; a

:. e t. set:: emen":. t e ': ..... e e :: ~:.:- s e : a:: d the :: ~_:':".:' : : e e . e to eli e'; tt

,:~a': ':.he t:0rt.ion of h:s ':.ra·.·-?: eXFe~ses, "':- ... - ~-,;0C, that

~e~al~S ~nrelmbursed by t~e ::~~:":.":.ee :5 ~:: a :=~::lbuticn.

:.F.F. S ::'~J.;;b £8 s~e:::' :.F.R. S ::':-:.: t :-:-:e FECA and

...'-.·ne r"'mm~ss~c"'s .... ..... rl) .._~.....1·":,a .... - ..--,-,. """1 .... s ~"" -"..; ""I~ •• __.. aA4 o~~ __ -' ...-"~~__'sS"~..l_ '"'~ -'_ ·..:j.,I.'~_ .._ ..... ... -_ ......

the C~rn~l~~ee 15 :e~~:red ~2 ~e~~nst=at~ ~:. ~es:=rock's

., i n e n t" t h a ./ e :.:: e : r a ... e: e xe :":': ;: ": : .: ;. a ;: ;: :;' :: r ~. ::: a pp1"i t :) ~: s

reimbursement reque5~. ~h::e :~e ~ater:a:::y ~~resholds for :~e

Ap P: i cat i en c f 11 ::. F . R. § :: '5 . 3 ass'..1 e ::'". a: ::; :. -: 1 d u a 1 s d:; :1 C t

:ntend ~~ ~ake a~van~a~e 2f :~e exempt::~ :f ":.~e~ ~eques~

reimbursements, the Commiss12~ ~as net a~~resse~~~~is part:cJlar

lssue in any case. We bel:.e·:e :~at Mr. '~estbr~ckts mere attemot

to obtain a reimbursement ;cy s~brnitting a relmbursement .

request) does not ~ecessarl:Y :e~eal t~a: ~e ~a1 previously

taken or had intended not to take the Sl,000 exemption. As 10no

as -t r a:ve I ex pen s eS 0 f S1 , 00 0 -0 r 1e s s rema i nun rei mbu [" sed-.- they ~ill not be considered contr:t~~ions.6 :: :.F.R. S lOO.7{b\c8 1 •

Therefore, we recommend that :~e Audit n:~iSlon revise the

proposed Final Audi~ Report to reflect t~e 51,000 travel

exemption.

":.!;lS ':.:me.

~es:~~:c~ :2r t~e S~f:3:~~~

Pr~pcsed Flnal Aud:: ~err@y fs~ Pr~5:~~~~

. LRA • 3

Page

5/ :t is unclear when Mr. ~es":.~rook req~ested reimbursement

for his expenses. :f Mr. Wes~~rook subm:~ted ~lS request in a

timely manner and the Commlt":.ee K~e~ that :t ~ou:d not be able to

reimburse him for his expenses within 30 ~: 60 days, this raises

~he iss~e of whether the Cc~~~::ee shou:~ have at:empted to

settle the debt within thlS ::~e. ThlS C::lce 15 not sucqest:~Q

that a debt settlement pla~ 2r 3 :e::er :: dec: :~rgiveness

should have been subm~ttej := ":.~~ :Qm~lss::n cef::~e the

exp:ratlon of the 30 or EJ ~3YS. ~~l:e ~~e=e :5 ~~ preceden: cn

this issue, we believe ":.~a~ :~~:~ s~o~:~ ~ave bee~ some ~~dl:a::~n

-: f e C()mm itte e ' s t- c n a f:.:i e a:: e ;: -: s e ":. : : €' ~~. e j t t :: :":

:o~:j no~ make the re:~t~~5~~e~: ~~:~:~ :~~ ~~es:::~ej ::~e

6/ F=-: ::-:s~ance, ~r:e .:ase '~':''':_:1 ::e d:::e:-e~: :: :'he Aud:.t

5ivision had ldentl~:ed doc~~e~":.s sh~w:~; ':~a': ~r,

~est.broo).'s air t=a~e: ex~e~ses ~e:e 55,:38.4: and that ~r.

~estbrooL had requested a 55 I 23,3.';: :e:~t·.;rsement. Under

his s c: e I \ a r 1 0, the Cc m:n:. :. ":. e e '~,: : 'J : j t e '''; :"'. 3 : e t = ::: a ::n a

S 1 , 0 ;] 0 t i' a OJ e 1 e x e mp t 1 C:1, 5 :. :; : e : '::1 :; : :!'. e :; ":. a':.::. C:1 ''''; 0 1J : d p r 'J e

:~at t~e exempticn had a:rea~y ~ee~ a~~~:e:.

?age 35

3 3 94
\..

. pt·e'm.orandum to ~obert J. Cos~a

Propos@d Final Audit Re~~r~

¥err~y ~or Pr~sld~nt

LRA .~':3'

Page '5

II. SUNSHINE RECQMMENDA:ION

r~·.·:' ~'..'.

:: f ": h -: 1 S S :. :: n ' s S ''; ;: 5 :. :-. .:...:: : e -:;''': : :: ": :. :: '-, s ;' =: :- '.; :. :: e 5 f .:) r -: h

=~ns:de:a::c~ =~ ~3::e:s :~ :~:sed sess:~n :~ :~ei a:~

spe~:f:=a::y exempted fr:~ ~:s::~s~re =l s:a":~~~. A1~lticnal

;,.. a s e 5 • 0 r c 1 "" S ..... ,,,", . 1 ,.,.. me e'" . .... ... s ...... '1.-1 Cll ~,;·n.a ..... a - ...., '!'"" .... "'eat'" • ,.... "'" \ ........ .... ... '_ : .. l - u '- .. l -all.. '-"'~,. -:' ,\ I-. .. ': ... "- '- • '< .. ". '- t""" - ." ••~\ -- .... '" .. s :~~ely to ~es~~t l~ the j:s=~=s~~e :: ~~~-~~n.:: aud1~

=:=~edures, ~~:::les =r :;:~~s::;at:~e :e:~~l~~es or i~f~~~atl

~ffect en the :mplemer.~a::c~ :~ a ~:~~cs~~ Ccm~lssl~n a:tlc~_

... C.F.R. SS 2.4!b}':' ar.d : . .: ........

~his Office believes :~3~ ::~o:ssic~ j:sc~ss:~n of th:s

dQ~ument should ce c~~d~~:e~ :~ ~~en session as 1: dses net =~ncern any matters exe~p:e= :=c~ ~~C~lC d~scl::sure under 11

C.F.R. S 2.4.

Page 36

3 3, 94
. - . - .

:~e H~~~rab:e :. ~~b@rt ~errey

:f!::e ~f the H=~==able :. P~ber~ Kerrey

'1.5. Senate

~ash:~g~~n. ~.C. 2J510

A~~a:hed ~:ease find t~e flnal Audit Report on lerrey f=r

Presldent. The :~mmisslon approved this report on ~acch 3,

~994. As noted en page 3 of ~he report, the Commission may p~rsue any of ~he matters discussed in an enforcement action.

:n accordance with 11 C.F.R. S9038.2{c)(1) and (d)(l), the

Com.mission has aade an init:..al determination that the Candidate

is to ~repay to -the S-.-c-retary- -of the T-r.~a.ury $~1-,-9-31-with-in--90

days after s~rvice of this report (June 6, 1994). Should the

Candidate dispute the Commission'S determination that a

repayment is required, Coaaission requiationa at 11 c.r.R.

S9038.2(c)t2) provide the Candidate with an opportunity to

submit in writing, within 30 calendar days after service of the

Commission's notice (April 6, 1994), 1e9a1 and factual materials

to d••onsttate that no repayment, or a 1••••r repaym.nt, 15

required. Further, 11 C.F.R. S9038.2(c)(]) per.its a Candidate

who has submitted written materials, to request an opportunity

~o make an oral presentation in open session based on the leqal

and factual materials submitted.

ihe Co.-i.lion will consider any written legal and factual ~a~erial. aubaitted by the Candidate within the 30 day peeled in

making a final repayaent determination. Such materials may be

submitted by counsel if the Candidate so elects. If the

Candidate decides to file a response to the initial repaY2ent

determination, please contact ~lm t. Bright-Coleaan of the

Jf!ice of General Counse: a~ :~2) 219-3690 or t~ll free at 8:~1 424-9530. If the :and:1ate does not dispute this l~lt~a:

d@~eC21nation within the 3C day peelod provided, it wlll be

::ns~de~ed final.

Page 3~
:'(!tte:-

Page :

:;~ Robert. Kerrey

An "v·

... ~-.;es~:,:-::s .. .....,. ':'.,; :na';... ~a':e :-e:a:ed ~:) :7:a:':~:s ::·.·~:ej

:~=:~; :~e a~d:~ or :n ~he :~;:~: s~~u:~ be d::e~:e: :~ :~r~e:.3

?::ey ~: ~ar:1 FaVln ~f ~~e A~j:,: ::~:si~~ a~ ~_. ::3-3-:::~

::ee a: S:O} 424-~53:t

A :cpy of thlS report :s ~e:~q ~:ov:=ed

Ser",,":=e ..

-~

Attachment as stated

Page 38

3/3/94
~:. H;.;g~ ';..;~s~~r~=<, 7:eas'..l:~:

K~r=ey f:: ?:es:d~~~

:- H =s p :. : e :: 3 e, : :;=., : 5 t:, !: -: ': :-

~~a~: f F:" 33:'3:'

A~~a:~ed ~:ease fi~d :~e F:~a: Audit Repcr: on ~.=:e~ !::

President. 7~e ::~mlssion approved this report on Mar:~ 3,

:994. As ~c:ed =~ page 3 c: :~e :epor~, the C~"lsSlcn ~ay

purs~e any ~! :~e ~a~:e:s d:s:ussed :~ an enfor:ement a:::~n.

rn accordan=e wlth :1 :.r.R. S9038.2tc)(ll and (d :1, ~he

Commission has made an lnltlal det@ralnation that the :andidate

is to :epay to the Secretary of the Treasury $i~93i within 90

days -after s-er-Vl-ce ofth1.s :-eport_ tJune, 6.-, 1994}...S_ho~tdthe_

Candidate dispute the Commission'. deteralnation that a

repayment is reqUired, Commlssion regulationa at 11 C.F.R.

S9038.2{c)(2) provlde the Candidate with an opportunity t~

submit in writinq, vithin 30 calendar days after service of ~he

Commission's not:ce (Aprll 5, 1994', leqal and factual ~ater~a:s

to demonstrate that no repayment, or a les••r repay••nt, lS

requlred. Further, 11 C.F.R. S9038.2\c)(3) peraits a ~a~d::a~e

who has subaitted written materials, to request an opportunlty

to make an oral presentation in open se.sion based on the :egal

and factual ~ateri~ls lubaltted.

~he CORaiSS10n will consider any written 1e9&1 and !a=~~al

materials submitted by the :andidate wlthin the 30 day ~@:~~d l~

making a final repayaent determination. Such a.terlall 3ay ~e

submitted by coun.el if the Candidate so elects. If the

Candidate decides to file a response to the initlal repayme~t

determination, please conta=t ~im L. Briqht-Col.man of ~~e

Office of Gen.ral Counsel a~ (202) 219-3690 at toll f:ee at

,80C) 424-9530. If th& Candidate does not dispute thlS ~~:~la:

je~ermination wi~hin the 3: day perlod prOVided, It W~:: =e

co~s~deced final.

Page 39

3 3 194
:~~~et ~= ~r. H~gh ~es~~::~~

Page 2

'A':1y :;·~es"::::"'.s y:'J. =!J' :;a':e :~:a:'?: :: ~a::e:-s ::'~'e:-~:

~~:~~; :~~ a~~:: :r :~ :~e :~;::: S~:~:~ :e i::e::e~ :: :::~e::!

A~:.1 =~ ~a:~y rav:~ :~ :~e A~~:: ::~:s:=~ a: ::;-3-~~

::~: ::ee a: 3:: ~:~-;:~:.

:':.5. Se::~:

Attachmen~ as staced

Pa:;e 4J

3 3·94
?:e-audit !nve~:~:y C~mmenced

:nterim Audit Report to

?esponse Recelved to !nteri~

Audlt Report

F:na: Audit Repc:t Approved

Page 41

3/3/94

4-6 92

6/3/92 - 9/4 /92

3/3 94
(.. t,M~04 U.91 • , ...

I, ......"l :J

March 3, 1994

ROBERT J. CO ~,r ASSISTANT S FF D;R~ AUDIT DIVI ION

THE

FROM:

THROUGH:

TO:

SUBJECT: KERREY FO PRESIDENT - REVISION TO FINDING II~A.

EXCESSIVE CONTRIBUTIONS RESULTING FROM STAFF

ADVANCES

. -.. Based on the direction received during the Open Session

of 3/3/94, the Audit staff has incorporated language at pages

2, 6 and 7 to reflect the Commission's decision with respect

to the $1,000 transportation exemption. The language,

"Accordingly, the excessive portion is reduced to 55,238."

has also been included on page 7.

This document is being circulated on an informational

basis. If you have any questions, please do not hesitate to

contact me.

Attachment as stated
amount charged must be ~ase= ~n the c~st F~: ~assenger plus a la~

allowance prcvld@d in Ccre~lSS:Gn regulati=~s. 7~@ Co~mi::ee is

permltted to r@tain an a~~~~t equal to the ~~r passenger cost plus

an allowance f~r adm:~:stra::ve costs of ~~e progra~. The

administrative cost a:::~a~:~ ranges frcm 3~ if ~o documentation

exists, to 10\ if the C~~~l~~ee can doc~~e~~ more than the 3\

basic allowance. Any amcu~:s billed a~d =::lecte1 in excess of

the cost plus 10\ aliowance i o~er charges: ~ust be returned to the

travelers. Amounts collected that exceed c~st p:~s the

administrative cost al:~wa~=e 'profit\ mus~ be paid to the U.S.

Treasury.

The Report requires t~e Committee to pay the U.S. Treasury

$6,672 (profit) and the tra~elers 53,939 fever charges). The

Committee's responses to the interim audit report did not include

documentation sufficient to resolve these lssues.

Excessive Contributio~s Resulting from Staff Advances - 2

U.S.C. S441a{a} and {f), 2 t]"S.C. S431( ill, 11 eFR

1 0 0 . 1 ( a ) ( 1 ) ( iii ) and (b), 11 CF R 116. 5 ( b). A payment by an

individual from his or her personal funds for campaign-related

costs is a contribution subject to the $l,C~O limitation unless

exempted under 11 erR lOO.7(b)(8) or reimbursed within specific

time frames. The Interim Report questioned, as excessive

contributio_ns, __a_q~~nced funds totaling $6,238 from one staff

member. The Committee's response-p-r-ovided no documentation -to--

refute the excessive nature of the advances; however, the staff

member had submitted a request for his travel expenses and he was

reimbursed a portion of the costs through a debt settlement

between himself and the Committee. Thus, the Commission

determined that any portion of the travel expenses, up to $1,000,

that remains unreimbursed by the COlUllittee is not a contribution.

This determination allowed the Committee to avail itself of the

$1,000 transportation exemption at 11 C.F.R. SlOO.7(b)(8), thus

reducing the excessive amount to $5,238.

Disclosure and Itemization of Financlal Activity - 2 U.S.C.

S434(b}, 2 U.S.C. 431{13', 11 CFR 104.2, 11 eFR 104.3. On its

initial disclosure reports, the Committee failed to report

adequately the activity related to loans received, disbursements,

debts and obligations, Press reimbursements, exempt legal and

accounting services, and the identificatic~ of contributors. The

Committee responded by fil:ng amended reports, which complete the

public record.

Undocumented Disb~rse=ents - 11 eFR 9J33.11\ai and 11 eFR

9038.2\b)(3:. Follcw~~g t~e Interi~ Repor~'s identification cf

inadequate documentat:cn of 67 disburse~e~:s, involving $24,513,

the Committee corrected the problem by ~r~'::ding the necessary

documentation.
6

a re~~onable ti~e a~j t~at ~~e:e!~re ~: excess cc~:ri~~~lcns ~ere

accepted tha~ r~~uire a~y re~ayme~: :: ;e~a:ty, _r cthe: further

act:~;: by th~ C,:,:":';m:.ssion.·'

:~ ~~e :~te~:~ a~i:~ re~:r~ the Audit staff re=2~~ended

tha~ the Ccm~:~:pe Fr2~:je e~ldence :~at the s~aff advanc@s are

net exce5siv~ : l~~r:buti~~s and any add:.tional c~~rnents.

The Committee res~onded t~ the interim audit r~Fcrt with

~arrative arguments and c~~~ents ~hich asserted t~at t~e ~~mmittee

had a:ted reascnably to comply with the regulations governing

staff advances.

The Committee restated its ad~ance policy, as discussed

above, and noted that the " ... interim audit repcrt raises but a

si~~:e example of a breach 0: this ~~l:~y."

Further the Committee stated that once it became aware

of ~he advances which led to the ex=essive contribution cited in

the interim a~dit report, t~e Committee treated this advance as an

outstanding debt pursuant to 11 erR :16.5(c). The Committee

construes this section of the regulation " ... to mean that the

Coaaittee may have a reasonable period of time in which to

'retire' the debt ... " and that " ... [il£ the debt arising from an -adv·ance is· properly s-ettled, then it too# lik.eve.ndox..debt 1..s)'lo\jld

not be considered to be an excess contribution."

Finally the Committee contends that the individual is " ... entitled to a $1,000 travel exemption, as provided in 11 eFR

lOO.7(b)(8) ••• ".

The Audit staff is of the opinion that the travel

exemption does not apply to these expenses submitted for

reimbursement.

With respect to the arguments and other comments as

presented above, it is the opinion of the Audit staff that the

Committee has provided no evidence cr additional information that

demonstrates that the staff advances do not constitute excessive

contributions.

The Commission disagreed with the Audit Divlsion's

conclusion that the Committee is not entitled to the $l,O~O travel

exemption. The Commission believes that pursuant to 11 :.F.R.

SlOO.7{b)(S), any unrelmbursed payment for transportation expenses

inc~rred by a~ individual C~ behalf of the candidate is nct a

co~tribution, :f ~ithin the Sl,;OO agg:egated individual

exemption. :~ t~lS case, Mr. *estbroOK submitted a request for

his travel ex~enses and he was reimbursed a portion of the costs

through a debt settlement between himself and the Committee. The

regulations do net address the issue of whether the Committee is

required to demonstrate Mr. Westbrook's "intent" to have the

t:avel exemptlo~ apply or net apply to his reimbursement request.

Therefore. :': :s the pos::~'Jn ::f ':~e Ccmmissicn that the p~rticn
that re~ai~s u~reimb~rs~~ ty

See l: :.F.R. S::~.-\b~ c

B.

A=c::rdingly, the excessi·.,:e ~ortic:-::5 red\h:-~d to S5,238.

Itern:zation of Leans Recel~e~

Sections 434(b)(2)(H) and 434(bi{ 3:tE: of Title 2 of the

United States Code require the disclosure cf all l~ans, and the

identification of each person who makes a :can to the reporting

committee during the reporting period, together with the

identification of any endorser or guaranter of s~ch lean, and date

and amount or value of such loan.

Section 434~b)(4)(£) of Title 2 of the United States

Code requires for the reporting period and the calendar year,

disclosure of the total amount of all disbursements and the

repayment of all loans.

Section l04.2(e) of Title 11 of the Code of Federal

Regulations specifies that the authorized committees of a

candidate for President shall file reports on FEe Fora 3-P.

Additionally, the instructions for Schedules A-P and B-P of this

forlll--p-a-ck-aqe requi re the Commi t tf!e to i t~mi ze all loans rece i ved

and all loan repayments made by the Committee during the -r-epotting

period on this schedule.

During the audit period the Committee obtained two loans

from American National Bank and a nonconcurrent line of credit

from Adams National Bank. Against these 10ans3/ the Committee

received six advances totaling $1,560,767, and-made six repayments

for principal, interest and loan fees totaling $666,722. Of this

activity the Committee did not itemize five advances totaling

$1,335,767 on Schedule A-P, and did not itemize five repayments of

principal, interest, and loan fees totaling $661,722 on Schedule

B-P. All loans were repaid in full as of June 2, 1992.

At the Exit Conference the Committee was provided with a

schedule listing the loans, advances and repayments which require

itemization on Schedules A-P and B-P. The Audit staff clarified

the itemization requirements for loan activity and the Committee

appeared to concur with the recommendation.

:n the interim audit report the Audlt staff recommen1ed

that the Co~~ittee file amended Sc~edules A-? a~1 B-P itemizir.g

the loan activity.

1/ The ~~an activity revie~ej occ~rred pri~r :~ April 2, :9~:,

the effective date of the Commission's revised regulatior.s C~

lca~s and new reporting f~=ms.
('" ,-. -.AXPO~83t~ .- .,. : 4, "- 10 I

TO: THE COMMISSI

THROUGH: JOHN C. SU

STArr DIRE

FROM: ROBERT J. COS

ASSISTANT ST

AUDIT DIVISI

od:;;

March 31, 1994

SUBJECT: PAYMENT OF $ <,937 RECEIVED FROM KERREY FOR PRESIDENT

This infor••tional aeaorandua is to advise you of a

$7,931 payaent received froa Kerrey for President. The pay.ent

was received in response to the initial repay.ent deter.ination

contained in the final audit report and represents stale dated

eh.-c-ks- and- overpayaents frolll p.re~s ~r9anizations related to

travel.

Attached is a copy of the check, the letter which

aceoapanied the payaent, and the receipt showing delivery to the

Depart.ent of Treasury.

Should you have any questions regarding the payaent please

contact Ray Lisi at 219-3720.

Attachaents as stated
-'--- ._-----------------_._---------------

KERREY FOR PRESIDENT ~~' •:" '" ~- - :. :: - , .\ 5 v ..E S' S

.\ ~~,~-t 11\--.-" ~"" :~.... =:~("~

..... : :~';~4 • ~~

THE ADAMS NAnOHAl BANK t6;' K. s~££ ..... ',"

"ols,....'~·:.. X;'OCOS O""J'

7367

3/24/94

~;~;E~u-rn-~-E-D~S-m-~A~T-E-S~T-·R-E-A~S-U-R-Y~~.~~~~~~~~~~~.~~~~~~~:**7,937.0C

Seven Thousand Nine Hundred Thirty-Seven and 00/100******************** ------------------------------------------- ::C_;...p.PS •

FEDERAL ELECTION COMMISSION

999 E STREET NW

WASHINGTON DC 20463

REPAYMENT TO TREASURY
~arch 25, i994

Federal Eiection Commission

ATI:'J: Audit Division

999 E Street, N.\V.

Washington, D.C. 20463

-....

To whom it may concern:

In complianeeWlth the Iinat audir report issued-Mard\- 3,-l994p- by--the -FederaL

Election Commission, enclosed is check number 7367 in the amount of $7,937.00

from the Kerrey For President campaign to repay stale-dated checks and

overpayment by press organizations for administrative costs related to traveL

If you have any questions regarding this refund_. please contact me at the

address below, or call me at 202-224-3516.

Sincerely.

~~\~ .iuay Rainey

.A.sslstant Treasurer

Kerrev FOI President

1511 K Street, ~""\V, SUite 1117

\\'ashi:1gton, DC :0005

c..-
March 30, 1994

RECEIPT FRO" THE

UNITED STATES DEPARTMENT or TREASURY

'OR A

PAYMENT TO THE GENERAL FUND OF THE U. S. TR!ASU~Y

Received on March 30, 1994, from the Federal Election Commission

(by hand delivery), a check drawn on The Ada•• National

Bank (Check 17367) in the amount of $7,931. The check represents

a payaent fro. Kerrey for President for stale dated checks

($1,175) and overpayaents fro. press organizations related to

travel ($6,762).

The payaent should be deposited into the General rund of the

u. S. Treasury.

Kerrey for President

Aaount of Payaent: $7,937

Presented by: Received by:

C...1.-J...A"-~~,I f r the

rederal Ilection Coaaia.ion

?&11,1· Lc 0 oil:i- "t.t

for the

United State. Treasury
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April 8, 1994

IlBJlOIlAllDUJI

TO:

1'8R0008:

PR()IIl:

By:

The Coaaission

John C. Surin.

Staff Director

Lawrence M. Nobl.

General Couns.l

IUa sri9ht-C01••an!OJl;(.; As.ociate General Counsel

Lorenzo Holloway

Assistant General Counsel

Abel 116ntez I'L

Attorney ~;+1

SUBJECT: ~.rr.y for Pr.aident, Inc.

Repayment to the United States Treasury

(LIlA 1443)

On March 3, 1994, the Coaai••ion approved the Pinal Audit

Report on X.rrey for Preaident, Inc. (-the Coaaitt••-) and aade

an initial deteraination that Senator J. Robert Kerrey and the

Coaaitt•• repay $7,937 to the United Stat.s Treasury_ On

March 25, 1994, the Co..itt•• subaitted a check for this a.aunt,

payable to the United States Treasury_

In the letter accoapanying the repayaent check, the

Coaaitt•• indicated its compliance with the Final Audit Report.

S•• Attachaent 1. Since the Committee will not dispute the

mItial repayaent deteraination, it is considered a final

repayaent deter.ination. 11 C.F.R. S 9038.2(c)(1). Therefore,

the Office of General Counsel recommends that the Commission

conclude that the initial repayment determination for Senator J.

Robert ~errey and Kerrey for President Inc. has become a final

repay.ent determination. Id. The Comaittee will be notified

accordingly.
M••orandua to the Commission

.errey for President, Inc.

Repayment to the United States Treasury (LRA 1443)

P8<Je 2

RECOJUlBNDATIONS

The Office of General Counsel recommends that the

'!:cmmission:

1. Conclude that the initial repayment determination for

Senator J~ Robert Kerrey and Rerrey for Pr.sident, Inc~ has

becom. a final repayment determination under 11 c.r.R.

S 9038~2tc}(1); and

2. Approve the appropriate letter.

Attachaent

Committee's Response to the Final Audit Report and the

initial repayment determination.
March 25# 1994

Federal Election Commission

AnN: Audit Division

999 E Street, N.W.

Washington, D.C. 20463

:::' To whom it may concern;

In compliance with the final audit report issued March 3, 1994, by the Federal

:'"' Election Commission, enclosed is check number 7367 in the amount of $7,937.00

from the Kerrey For President campaign to repay stale-dated checks and

overpayment by press organizations for administrative costs related to travel.

If you have any questions regarding this refund, please contact me at the

address below, or call me at 202·224-3516.

Sincerely,

~~\~ Judy Ralney

.A.sslstant Treasurer

Kerrev For Presldent

1511 K Street. ''"\V. 5wte 1117

\\·ashl:1~ton. DC :0005

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