REPORT OF THE AUDIT DIVISION

ON

CLINTON/GORE '96 GENERAL COMMITTEE, INC, AND

CLINTON/GORE '96 GENERAL ELECTION LEGAL AND

ACCOUNTING COMPLIANCE FUND

Approved June 3, 1999

FEDERAL ELECTION COMMISSION

999 E STREET, N.W.

WASHINGTON, D.C.
FEDERAL ELECTION COMMISSION

WASHINGTON, DC 2046]

June 10,1999

The Honorable William 1. Clinton

c/o Ms. Lyn Utrecht, Esquire

Ryan, Phillips, Utrecht & MacKinnon

1133 Connecticut Avenue, N.W.

Suite 300

Washington, D.C. 20006

Dear Mr. President:

Attached please find the Report ofthe Audit Division on Clinton/Gore '96 General

Committee, Inc. and Clinton/Gore '96 General Election Legal and Accounting Compliance

Fund. The Commission approved the report on June 3, 1999. As noted on page 5, ofthe

attached report, the Commission may pursue any ofthe matters discussed in an

enforcement action.

In accordance with 11 CFR §§9007.2(c)(1) and (d)(l), the Commission has made a

determination that a repayment to the Secretary ofthe Treasury in the amount of$16,412

is required within 90 calendar days after service ofthis report (September 13, 1999).

Should you dispute the Commission's determination that a repayment is required,

Commission regulations at 11 CFR §9007.2(c)(2)(i) provide you with an opportunity to

submit in writing, within 60 calendar days after service ofthe Commission's notice

(August 13, 1999), legal and factual materials to demonstrate that no repayment, or a

lesser repayment, is required. Further, 11 CFR §9007.2(c)(2)(ii) permits a Candidate who

has submitted written materials to request an opportunity to address the Commission in

open session based on the legal and factual materials submitted.

The Commission will consider any written legal and factual materials submitted

within the 60 day period when deciding whether to revise the repayment determination.

Such materials may be submitted by counsel if you so elect. If you decide to file a

response to the repayment determination, please contact Kim L. Bright-Coleman ofthe

Office of General Counsel at (202) 694-1650 or toll free at (800) 424-9530.
=

\d

•

•

The Honorable William 1. Clinton

Page 2

Ifyou do not dispute this detennination within the 60 day period provided, it will be

considered final.

The Commission approved Audit Report will placed on the public record on or

about June 15, 1999. Should you have any questions regarding the public release ofthis

report, please contact Ron Harris ofthe Commission's Press Office at (202) 694-1220.

Any questions you may have related to matters covered during the audit or in the

audit report should be directed to Mary Moss or Thomas Nurthen ofthe Audit Division at

(202) 694-1200 or toll free at (800) 424-9530.

Sincerely,

~~Assistant StaffDirector

Audit Division

Attachments:

Audit Report
FEDERAL ELECTION COMMISSION

WASHINGTON. DC 20463

•

June 10, 1999

Ms. Joan Pollitt, Treasurer

Clinton/Gore '96 General Committee, Inc.

Clinton/Gore '96 General Election Legal and Accounting

Compliance Fund

clo Ms. Lyn Utrecht, Esquire

Ryan, Phillips, Utrecht and MacKilillon

1133 Connecticut Avenue, N.W.

Suite 300

Washington, DC 20006

Dear Ms. Pollitt:

Attached please find the Report ofthe Audit Division on Clinton/Gore '96 General

Committee, Inc. and Clinton/Gore '96 General Election Legal and Accounting Compliance

Fund. The Commission approved the report on June 3,1999. As noted on page 5 ofthe

attached report, the Commission may pursue any ofthe matters discussed in an

enforcement action.

In accordance with II CFR §§9007.2(c)(l) and (d)(I), the Commission has made a

determination that a repayment to the Secretary ofthe Treasury in the amount of$16,412 is

required within 90 calendar days after service ofthis report (September 13, 1999).

Should the Candidate dispute the Commission's determination that a repayment is

required, Commission regulations at II CFR §9007.2(c)(2)(i) provide the Candidate with

an opportunity to submit in writing, within 60 calendar days after service ofthe

Commission's notice (August 13, 1999), legal and factual materials to demonstrate that no

repayment, or a lesser repayment, is required. Further, II CFR §9007.2(c)(2)(ii) permits a

Candidate who has submitted written materials to request an opportunity to address the

Commission in open session based on the legal and factual materials submitted.

The Commission will consider any written legal and factual materials submitted

within the 60 day period when deciding whether to revise the repayment determination.

Such materials may be submitted by counsel ifthe Candidate so elects. Ifthe Candidate

decides to file a response to the repayment determination, please contact Kim L.
l.J1

ru

r.J

•

Ms. Joan Pollitt, Treasurer

Page 2

Bright-Coleman ofthe Office of General Counsel at (202) 694-1650 or toll free at (800)

424-9530. Ifthe Candidate does not dispute this determination within the 60 day period

provided, it will be considered final.

The Commission approved Audit Report will be placed on the public record on or

about June 15, 1999. Should you have any questions regarding the public release ofthis

report, please contact Ron Harris ofthe Commission's Press Office at (202) 694-1220.

Any questions you may have related to matters covered during the audit or in the

audit report should be directed to Mary Moss or Thomas Nurthen ofthe Audit Division at

(202) 694-1200 or toll free at (800) 424-9530.

Assistant StaffDirector

Audit Division

Attachments:

Audit Report
iii

""

y

:i

TABLE OF CONTENTS

CLINTON/GORE '96 GENERAL COMMITTEE, INC. AND

CLINTON/GORE '96 GENERAL ELECTION LEGAL AND

ACCOUNTING COMPLIANCE FUND

APPROVED JUNE 3, 1999

Page

Final Audit Report 1

Background 1

Findings 5

Legal Analysis 31

Transmittal to Committee 37

Chronology 41
FEDERAL ELECTION COMMISSION

WASHINGTON, DC. 204&3

REPORT OF THE AUDITDIVISION

ON

CLINTON/GORE '96 GENERAL COMMITTEE, INC.

AND CLINTON/GORE '96 GENERAL ELECTION LEGAL AND

ACCOUNTING COMPLIANCE FUNDI

I. BACKGROUND

A. AUDIT AUTHORITY

This report is based on an audit ofthe Clinton/Gore '96 General

Committee, Inc. (the General Committee) and Clinton/Gore '96 General Election Legal

and Accounting Compliance Fund (GELAC). The audit is mandated by Section 9007(a)

ofTitlc 26 ofthe United States Code. That section states that "after each presidential

election, the Commission shall conduct a thorough examination and audit ofthe qualified

campaign expenses ofthe candidates of each political party for President and Vice

President."

Also, Section 9009(b) ofTitle 26 ofthe United States Code states, in part,

that the Commission may conduct other examinations and audits as it deems necessary to

carry out the functions and duties imposed on it by this chapter.

In addition to examining the receipt and use ofFederal funds, the audit

seeks to determine ifthe campaign has materially complied with the limitations,

prohibitions and disclosure requirements ofthe Federal Election Campaign Act of 1971,

as amended.

B. AUDIT COVERAGE

The audit ofthe General Committee covered the period from its inception,

August 1, 1996, through March 31, 1997. In addition, the Audit staff conducted limited

reviews ofreported activity through June 30, 1998. During the audit period, the General

Committee reported an opening cash balance of$-O-, total receipts of$66,192,639, total

disbursements of $65,367, 154 and a closing cash balance of $825,485.

The results of the audit of Victory '96, a joint fund-raiser between the Democratic National

Committee and the GELAC, will be addressed in a separate audit report.
The audit ofthe GELAC covered the period from its inception, September

7, 1995 through March 31, 1997. During this period, the GELAC reported an opening

cash balance of$-O-, total receipts of $8,032,732 total disbursements of $5,343,065 and a

closing cash balance of$2,689,667.

C. CAMPAIGN ORGANIZATION

The General Committee registered with the Federal Election Commission

on August 1, 1996. The GELAC registered with the Federal Election Commission on

September 7,1995. The Treasurer of both the General Committee and GELAC was Joan

Pollitt.

During the audit period through present, the campaign maintained its

headquarters office in Washington, DC.

To handle its financial activity, the General Committee used 9 bank

accounts. From these accounts the campaign made approximately 36,333 disbursements.

To handle its financial activity, theGELAC used I bank account. From

this account the GELAC made approximately 736 disbursements. Approximately

173,016 contributions were received from individuals. These contributions totaled

$6,421,556.

The General Committee received $61,820,000 in funds from the United

States Treasury on August 30, 1996. Other receipts received by the General Committee

through December 31, 1997 include loans totaling $2,484,000 to finance expenses prior

to August 30, 1996; $1,458,230 in refunds and rebates from vendors and proceeds from

the sale of assets; $1,250,000 transfer from the GELAC apparently for reimbursement of

exempt legal and accounting compliance expenses paid by the General Committee; and

$691 in interest income. Between January I, 1998 and June 30,1998, the General

Committee received additional receipts including transfers totaling $612,000 from the

GELAC apparently for reimbursement of exempt legal and accounting compliance

expenses paid by the General Committee; $261,285 in refunds and rebates from vendors

and $3,295 in interest income.

D. AUDIT SCOPE AND PROCEDURES

In addition to a review of the committees' expenditures to determine the

qualified and non-qualified campaign expenses incurred by the campaign, the audit

covered the following general categories:

I. The receipt of contributions or loans in excess ofthe statutory

limitations;

2
2. the receipt of contributions from prohibited sources, such as those from

corporations or labor organizations (see Finding II.A.);

3. proper disclosure of contributions from individuals, political

committees and other entities, to include the itemization of

contributions when required, as well as the completeness and accuracy

of the information disclosed;

4. proper disclosure of disbursements including the itemization of

disbursements when required, as well as, the completeness and

accuracy of the information disclosed;

5. proper disclosure of campaign debts and obligations;

6. the accuracy oftotal reported receipts, disbursements and cash balances

as compared to campaign barue records;

7. adequate recordkeeping for campaign transactions;

8. accuracy ofthe Statement ofNet Outstanding Qualified Campaign

Expenses filed by the General Committee to disclose its financial

condition (see Exhibit 1);

9. the campaign's compliance with spending limitations (see Finding

Ill.A.); and,

10. other audit procedures that were deemed necessary in the situation (see

Findings III.B., C. and D., and IVA).

As part of the Commission's standard audit process, an inventory of

campaign records is normally conducted prior to the audit fieldwork. This inventory is

conducted to determine if the auditee's records are materially complete and in an

auditable state.

Delays encountered with respect to the production ofrecords during

fieldwork on the Clinton/Gore '96 Primary Committee, Inc. (Primary Committee) were

also encountered during fieldwork on the General Committee and GELAC. Records

consisting of bank statements and enclosures for six campaign depositories; deposit

batches and contributor check copies for GELAC contributions; vendor invoices; check

registers for operating and payroll accounts; records relative to in-kind contributions,

refunds/rebates, wire transfers, campaign materials, campaign travel, General

Committee's use of credit carels, media placements, public opinion polls; workpapers

detailing FEC report preparation and components for the Statement ofNet Outstanding

Qualified Campaign Expenses; copies of all contracts/agreements, travel reimbursement

3
policies and IRS forms 940 and 941; and, Computerized Magnetic Media for

disbursements were requested during the period April 10, 1997 through December 1997.

The Audit staff was informed that attorneys had to review all records prior

to them being made available. The General Committee refused to make available bank

records pertaining to the bank account maintained by the media vendors who placed and

paid for media buys on behalf of the General Committee. Further, the General

Committee refused to make available, without conditions and/or restrictions, copies of

polls conducted on its behalf.

As a result, on August 1, 1997, September 10, 1997 and February 3, 1998

the Audit staffrequested the Office of General Counsel to prepare subpoenas for the

production ofrecords. The Commission issued 13 subpoenas to either the General

Committee, GELAC or respective vendors in order to obtain records.

As a result of the above, it is the opinion ofthe Audit staffthat delays in

production ofrecords by the General Committee resulted in wasting numerous staff hours

which directly delayed the completion ofthe audit fieldwork a minimum offour months.

Accordingly, the scope of work performed was limited due to delays

encountered in obtaining records necessary to perform the audit. Certain findings in this

audit report were supplemented with information obtained from sources other than the

General Committee.

The General Committee as part ofits response to the Exit Conference

Memorandum (the Memorandum) made various comments concerning the Audit staffs

discussion ofthe scope of the audit. The General Committee asserts that this section of

the audit report provides a distorted and incomplete view ofthe process, and then

provides certain examples of "mischaracterizations" included therein. Further, the

General Committee claims that "[d]espite its full cooperation with these numerous and

often conflicting requests, always maintained a cooperative posture during the audit

process for all information requested that was reasonably within the scope ofthe audit."

Emphasis not in original.

Various examples and explanations were cited, such as: logistical

problems inherent with the Primary/General Committee's move to new offices; the

auditors' demand for additional office space at that location; that" no existing record in

the General Committee's possession was refused;" that the Audit Division refused all

attempts at cooperative compromise pertaining to gaining access to the General

Committee's media vendor's records; and that the auditors repeatedly insisted that

particular records which the General Committee "did not have" in a computerized format

be created.

The Audit staffstands by the scope limitation and related discussion as

presented in the Memorandum and this Audit Report. The candidate agreed as a

4
condition to obtaining Presidential Election Campaign Funds to: furnish all documents

related to disbursements and reccipts, including computerized information; furnish all

documentation relating to disbursements made on the candidate's behalf by other

organizations; permit an audit and examination of all receipts and disbursements

including those made by the candidate, authorized committee or any agent authorized to

make expenditures on behalf of the candidate or authorized committee. Further, the

candidate agreed to facilitate the audit by making available in one central location office

space, records and such personnel as are necessary to conduct the audit and examination.

The candidate and committee agreements provided for at 11 CFR §§9003.1 and 9003.2

were signed in August, 1996.

As detailed above, certain records necessary to the conduct ofthe audit

were not made available at the commencement of audit fieldwork in June, 1997 and in

some cases were not made available until subpoenas were issued by the Commission to

compel production. The General Committee is entitled to express its opinion and attempt

to explain why it feels" [i]t would be utterly inappropriate for such a distorted and onesided description of the process to be included in the proposed draft Final Audit Report."

The General Committee's response will be included in the documents available to the

Commission in open session when the audit report is considered.

Unless specifically discussed below, no material non-compliance was

detected. It should be noted that the Commission may pursue further any ofthe matters

discussed in this memorandum in an enforcement action.

In a series of meetings between December 3, I998, and March 4, 1999, the

Commission considered the findings and recommendations contained below. The action

taken with respect to each issue is described at the end ofthe respective finding.

II. AUDIT FINDINGS AND RECOMMENDAnONS -

NONREPAYMENT MATTERS.

A. ApPARENT PROHlBtTED CONTRIBUTIONS RESULTING FROM

EXTENSION OF CREDIT BY A COMMERCIAL VENDOR

Section 44Ib(a) ofTitle 2 ofthe United States Code states, in part, that it

is unlawful for any corporation to make a contribution in connection with any election at

which presidential and vice presidential electors are to be voted for, or for any candidate,

political committee, or other person knowingly to accept or receive any contribution

prohibited by this section.

Sections 116.3(a) and (b) ofTitle 11 ofthe Code of Federal Regulations

state, in relevant part, that a commercial vendor that is not a corporation, and a

corporation in its capacity as a commercial vendor may extend credit to a candidate or

politica[ committee. An extension of credit will not be considered a contribution to the

candidate or political committee provided that the credit is extended in the ordinary

5
course ofthe commercial vendor's business and the tenus are substantially similar to

extensions of credit to nonpolitical debtors that are ofsimilar risk and size of obligation.

Finally, 11 CFR §116.3(c) ofTitle 11 of the Code of Federal Regulations

states that in determining whether credit was extended in the ordinary course of business,

the Commission will consider:

1. Whether the commercial vendor followed its established procedures

and its past practice in approving the extension of credit;

2. Whether the commercial vendor received prompt payment in full ifit

previously extended credit to the same candidate or political

committee; and,

3. Whether the extension of credit conformed to the usual and nonual

practice in the commercial vendor's trade or industry.

During the course offieldwork, the Audit staffreviewed a

reconciling invoice from World Wide Travel Services, Inc. (WWT),2 dated January 23,

1997, which reflected the General Committee had incurred travel expenses between

August 9, 1996 and November 8, 1996' totaling $1,620,521. The total due as ofJanuary

23, 1997 was $775,876.

1. World Wide Travel Services, Inc.

On March 31,1997, the General Committee forwarded for

payment to the Democratic National Committee the total outstanding balance of

$775,876 (see 2 U.S.C. § 441n(d)(2)): At the time, it appeared that approximately

$775,180 ofthe $775,876 had been outstanding for no less than 143 days (November 8,

1996 through March 31, 1997).

In response to the Audit staffs request for documentation which

detailed the airfare costs incurred, the General Committee provided an invoice from

WWT, dated May 31, 1997, which listed charges made to the General Committee's

account from September 18, 1996 through January 29, 1997 and a separate schedule from

WWT entitled "Customer Activity Report, Receivables and Checks Combined"

(Customer Activity Report), dated January 20, 1997, which detailed all airfare charges

between August 9, 1996 and January 10, 1997. During audit fieldwork, the Audit staff

WWT was incorporated on November 30, 1979 and remains incorporated as of April 1998.

The majority ofthe travel was charged during this time period, with the exception of 3 charges

totaling $696 that occurred subsequent to November 8, 1996; most ofthe charges involved the

purchase of airline tickets.

Based on our review of DNC reports filed, as 0[9/30198, the DNC reported $845,461 in 2 U.S.C.

44Ia(d) payments on behalf of the General Committee to WWT.

6
:1,

noted an invoice, dated October 13, 1996, in the General Committee records from WWT;

the ending balance on that invoice did not agree with the beginning balance on the May

31, 1997 invoice. During fieldwork a request was made to the General Committee for all

invoices received from WWT between October 13, 1996, and May 31,1997, and/or

evidence that WWT attempted to collect the debt due during that period. Other than the

aforementioned documents, the General Committee did not provide any additional

invoices or evidence responsive to the Audit staffs request.

As can be noted from the above invoices, no records made

available by the General Committee provided a regularly scheduled (e.g., at the end of

each month), continuous and consistent billing of charges.s

The Audit staff reviewed a Travel Agent Agreement dated August

30, 1996 between the General Committee and WWT which stated, in part, "cash

settlement will occur no later than thirty (30) days after receipt ofinvoice. Each invoice

paid more than thirty (30) days past date ofreceipt will be charged a late fee of 10% per

annum (.833% per month) of the outstanding balance".6

The Audit staff discussed this matter with General Committee

representatives at a conference held at the end offieldwork and provided a schedule

pertaining to the disbursements made to WWT. General Committee officials

acknowledged receipt ofthe schedule, and on April 8, 1998, provided an affidavit from

the General Committee Treasurer which stated, in relevant part:

"On September 30, 1996, after reviewing current bills and anticipating

future ones, the Committee made the decision that all bills from WWT for

expenses incurred after October 1,1996, would be paid for by the

Democratic National Committee (DNC) from §441a(d) funds. This

decision was communicated about the same time to WWT.

After the General Election was over and the bill was assembled, on

January 23, 1997, the Committee received WWT invoice #999999 totaling

$761,650.70 for air and rail travel that occurred after October 1,1996.

Once the Committee reconciled the bill to its own accounting records and

verified that the charges were correct, on March 31, 1997, the Committee

There was no regularly scheduled billing for airfare eosts only. There appeared to be separate,

monthly invoices for lump sum interest charges and transaction fees.

The reconci ling invoice dated January 23, 1997 detailed an application of accrued interest through

January 3, 1997 at .8333 monthly. There was no evidence presented which reflected interest was

billed on outstanding balances prior to January 3, 1997. The General Committee did prOVide

invoices for August 1996, September 1996 and October 1996 pertaining to transaction fees, (also

referred to as client handling fees and/or general handling fees), but the invoices were not specific

concerning how those fees were calculated.

7
forwarded WWT's revised invoice for $775,876.39 to the DNC for

payment. "7

It was noted that no evidence or documentation, other than the

aforementioned affidavit, was provided with which to verify that (a) WWT invoiced the

General Committee (or the DNC) on a monthly basis for airfare costs, (b) the General

Committee informed WWT that the DNC would be paying for al1 expenses incurred by

the General Committee after October 1, 1996,' or (c) any agreement was reached between

WWT and the General Committee or WWT and the DNC regarding the payment by the

DNC oftravel expenses incurred by the General Committee after October 1, 1996.

In the Memorandum the Audit staffrecommended the General

Committee provide additional documentation, to include statements from WWT that

demonstrated that the credit extended was in the normal course ofthe vendor's business

and did not represent a contribution by WWT. The Memorandum advised the General

Committee the information provided from WWT should include examples of other

customers and clients ofsimilar size and risk for which similar services had been

provided and similar billing arrangements had been used. Also, information from WWT

concerning its billing policies for similar clients and work, advance payment policies,

debt collection policies, and billing cycles were to be included.

In response to the Memorandum, the General Committee provided

a duplicate copy ofthe previously discussed Travel Agent Agreement, dated August 30,

1996, along with an affidavit from Mr. Steve Davison, Vice President ofMarketing and

Client Services at WWT. Mr. Davison stated the General Committee advised WWT in

September 1996 that it intended to forward invoices for travel to the Democratic National

Committee (DNC) for payment from 441a(d) funds and that stafftrave1 could accumulate

to as much as $700,000; WWT sought and received an increase in transaction fees to

cover the additional accounting expenses and, in addition, an agreement whereby WWT

would charge interest on an unpaid balance forwarded to the DNC.

Mr. Davison further stated "the volume oftravel that occurred

during the last weeks ofthe general election period was greater and more erratic than

expected, causing a large volume of unused tickets to be reconciled with actual tickets

used," and duc to the extra effort required to reconcile the amount due, WWT did not

issue the Committee a final invoice until January 23, 1997. With respect to col1ection of

The General Committee did not provide a copy ofthe original invoice totaling $761,651. It was

noted the revised January 23, 1997 invoice reflected a balance due of $1,025,393. After the

payments made on February 5, 1997 totaling $249,517 were applied, the total balance due was

$775,876 ($1,025,393 . $249,517). The Audit staff noted, however, that the May 31, 1997

invoice reflected a balance due of$761,651. There was no information which detailed a $14,000

adjustment to the May 31, 1997 invoice. The General Committee did not provide an explanation

concerning this discrepancy.

Between 10/1/96 and 3131197, the General Committee itemized debts incurred totaling $553,200.

As of3/3 1/97, the General Committee's report reflected $0 owed to WWT.

8
n'='='

debt, Mr. Davison related WWT treated each client on an individual basis, and after

January 1997 applied pressure on the General Committee and the DNC to pay and had

even gone so far as to consult an attorney on how to proceed.

Lastly, Mr. Davison stated since WWT received large monthly

payments from the General Committee during the months of August through December

1996, and then again in February 1997,' including interest during those months; it did not

extend credit to the General Committee outside the normal course of business; and, there

was no intention on the pati of WWT to make a contribution to the General Committee.

WWT cited similar billing experience with clients ofsimilar size through its provision of

services to the DNC, the Clinton For President Committee and the Clinton/Gore '92

Committee.

The General Committee also provided an affidavit from its Chief

Accountant, who stated that after receiving the final invoice from WWT in January 1997,

the General Committee began the necessary reconciliation and verification process and on

February 7, 1997 made a payment of $249,517 to WWT for the outstanding balance owed

by the General Committee; the General Committee continued reconciling and verifying

the final invoice, until March 31,1997, when the $775,876 was forwarded to the DNC for

payment; and, after the $775,876 was forwarded to the DNC, received "several telephone

calls a month" from WWT regarding the amount owed by the DNC, and continued to

receive these telephone calls in a regular and persistent manner for over a year.

The General Committee also stated in its response that the Audit

staff overlooked binders which contained September through December 1996 invoices,

and at no time did WWT bill the General Committee less than every 30 days. The

response continued that the General Committee made large monthly payments to WWT

between August and October 1996,10 and when it became apparent that General

Committee travel would exceed $700,000, the General Committee made large payments

in November and Decembel' 1996 to pay the additional charges.

The General Committee's assertion that the Audit staff overlooked

binders which contained September through December 1996 invoices is not correct. The

Audit staff did, in fact, note that the General Committee received monthly invoices for

lump sum transaction fees and interest charges; but these invoices did not detail the actual

10

The Gene..al Committee made the following payments to WWT: September 30, 1996 - $45;

October 16. 1996 - $3,278; November 7,1996 - $300,000; November 15, 1996· $405; December

11, 1996 $100.000; and, February 5, 1997 - $249,517, In addition, between August 3 I, 1996 and

October 15, 1996, the General Committee made payments totaling $325,029 directly to

Transwo.. ld Airlines (TWA), which were booked by and through WWT using a General

Committee credit card.

Between August 1996 and October 1996, the General Committee made 2 payments to WWT

totaling $3,323 (September 30, 1996 - $45 and October 16,1996 - $3,278); also during this period

the General Committee made payments totaling $325,029 directly to Transworld Airlines (TWA),

which were booked by andlhrough WWT using a General Committee credit card.

9
travel expenses. Based upon the documentation provided by the General Committee in

response to the Memorandum, it still appeared WWT issued 3 invoices to the General

Committee which covered travel costs incurred, dated October 13, 1996, January 23,

1997 and May 3 I, 1997. The October 13, 1996 invoice detailed all travel charges

incurred by the General Committee through October 10, 1996, and reflected an ending

balance or amount owed WWT of $497,016. The reconciling invoice, dated January 23,

1997, was apparently supported by a Customer Activity Report dated January 20, 1997,

that consisted of a computerized listing of all charges incurred (including those charges

paid directly to TWA) between August 9, 1996 and January 10, 1997. This Customer

Activity Report reflected that the General Committee incurred total airfare expenses of

$1,620,521 which corresponded to the total travel costs listed on the January 23,1997

invoice.

Finally, an invoice dated May 31,1997, detailed all travel charges

incurred by the General Committee between October 18, 1996 and May 9,1997. In light

ofthe information reviewed to clate, it appears this invoice reflected travel costs to be

assumed by the DNC and paid pursuant to 2 U.S.C. §441a(d). This May 31,1997 invoice

did not reflect any carryover balance from October 17, 1996; however, it did indicate an

ending balance of $761 ,651. Although requested,.the General Committee, as of

September 1, 1998, has not yet provided any additional detail or reconciliation pertaining

to the November and December 1996 invoices."

WWT's explanation that the agreement to transfer the travel

billings after September 1996 (or after October 1, 1996 according to the General

Committee) in exchange for increased transaction fees and interest charges is not borne

out by the evidence presented. Specifically, the Travel Agent Agreement, although

signed October 11, 1996 and October 14, 1996 by the parties involved, was in effect as of

August 30, 1996, at least I month before WWT was advised ofthe proposed DNC

transfer arrangements. It appears WWT was already receiving the increased transaction

fees and interest charges prior to the September 30, 1996 discussion concerning the

transfer to the DNC.

The General Committee response did not contain documentation to

demonstrate the credit extended by WWT to the General Committee was similar to credit

11 In their response, the General Committee referred to a weekly trip report, and stated the Audit

staffshould not have relied on these unreconciled, unverified reports to develop the dates when

travel costs wcre inclirred. The Audit staff did not use any documents entitled "weekly trip

reports" during its testing to develop the dates when travel was incurred, and it was unclear why

the General Committee made this statement in its response. It is possible the General Committee

confused the weekly trip rcports with the Customer Activity Report, however, this report was an

accumulation oCal1 travel expenses incurred by the Committee between August 9,1996 and

January 10. 1997, and the total travel costs incurred according to this report could be traced to the

reconciling invoice dated January 23,1997.

10
WWT extended to other nonpolitical debtors ofsimilar size and risk" especially

. regarding the approximate $775,000 in travel services received prior to the date ofthe

general election and for which assignment to the DNC did not occur until 4 Y2 months

later with payments by the DNC occurring later still. WWT also did not provide any

information concerning advance payment policies, debt collection policies or billing

cycles as it pertained to other nonpolitical debtors. Such documentation is critical in

determining if an extension of credit was made in the ordinary course of business.

In view ofthe above, it is the Audit staffs opinion that the General

Committee did not demonstrate that the extension of credit by WWT conformed to the

usual and normal practice in its business or in its industry as required by 11 CFR §116.3.

As a result, the amount of the contribution made by WWT was at least $775,180." This

amount was outstanding from November 8, 1996 to, at a minimum, March 31, 1997, the

date on which the General Committee forwarded WWT's revised invoice for $775,876 to

the DNC for payment.'"

The Commission voted to receive this finding, without any

determination on the merits of the analysis ofthe facts or the interpretation ofthe law

contained therein.

2. AT&T Uniplan Services

During the course offieldwork, the Audit staffreviewed a copy of

a letter apparently faxed by the AT&T Accounts Payable department, dated March 4,

1997, which stated that the General Committee owed AT&T a total of$342,515,

apparently for telephone usage expenses. The letter stated "after your (sic) make a

payment of$30,000 today, check #: , the new balance will be: $312,515.27." The

General Committee subsequently issued a check to AT&T Uniplan Services (AT&T),

dated March 4, 1997, in the amount of$30,000.

During fieldwork, the Audit staffrequested copies of contracts

between all vendors and the General Committee. There was no contract pertaining to

AT&T made available to the Audit staff. The Audit staff also could not identify any

lJ

14

As previollsly stated, WWT did cite similar billing experience with clients ofsimilar size: the

DNC, Clinton for President, and Clinton/Gore '92 Committee. Documentation in support ofthe

above was not made available. However, based on our review of workpapers relative to WWT

and the Clinton 1992 audits, it appeared that WWT billed and the Clinton 1992 Committees paid

in a timely manner.

Since a description of WWT's normal billing practice has not been made available, this amount is

subject to increase. WWT may have extended credit, not in the normal course ofits business,

with respect to travel costs incurred relevant to the General Committee's payments totaling

$249,517 on February 5, 1997.

The question of whether WWT may have extended credit to the DNC outside its normal course of

business is not within the scope of this audit.

II
r--~

itJ

deposits made to this vendor prior to services being rendered, nor did there appear to be

any Letters ofCredit issued by the General Committee to secure these services.

Between October 16, 1996 and April 16, 1997, the General

Committee made a total ofseven payments to this vendor, totaling $189,267; there was

no evidence of payments being made between April 17, 1997 and September 30, 1997.

The Audit staff could not locate any additional invoice(s) from

AT&T which would identify the dates the General Committee incurred the telephone

charges totaling $342,515 mentioned in the letter. However, a copy of an invoice from

AT&T, dated October 16, 1996, attached to two check tissue copies dated subsequent to

the March 4, 1997 ($30,000) payment, indicated that the General Committee had an

outstanding balance of $204,408. It should be noted that the General Committee paid the

vendor $50,314 (October 16, 1996) which was not reflected on the October 16, 1996

invoice. Therefore, it appeared that the General Committee had an outstanding balance of

at least $154,094 ($204,408 - $50,314) between October 16, 1996 and March 4, 1997 (the

date ofthe letter), or 139 days.

The Audit staff discussed this matter with General Committee

representatives at a conference held at the end offieldwork and provided a schedule

pertaining to the disbursements made to AT&T. General Committee officials

acknowledged receipt ofthe scheclule and on April 8, 1998, provided clocumentation and

a written response in which the General Committee stated that AT&T and itselfwere

involved in a long-running dispute regarding the telephone bills and were in constant

contact by both letter and telephone trying to resolve numerous billing questions. In

addition, the General Committee noted that a disputed debt owed to AT&T was disclosed

on its Schedule D-P filed for the period ending December 31, 1997. A chronology of

events which detailed the telephonic and written contact between the General Committee

and AT&T was also provided, including documentation in SUpp0l1 thereof. One

document was a letter from AT&T Claims Recovery Division dated November 17, 1997,

which advised the General Committee that its delinquent account balance of$86,632 was

in a collection status. Another piece of correspondence from AT&T, dated February 18,

1998, related that the General Committee still owed $36,651 and ifnot paid immediately,

the account would be referred to an outside collection agency. In addition, the General

Committee provided a copy of part ofthe contract between the Clinton/Gore '96 Primary

Committee and AT&T, dated September 26, 1995, which covered a 12 month term and

detailed the schedule offees AT&T would charge for long distance services. This

portion ofthe contract did not appear to specify that AT&T required a deposit or other

form ofsecurity such as a Letter of Credit prior to establishing service. Further, that

portion ofthe contract made available did not address provisions regarding late payments

or disputed charges. There was no evidence or documentation provided that indicated

this contract Was extended and/or assumed by the General Committee. The General

Committee also related in its writtcn response that the contract provided no provisions

regarding late payments or disputed charges.

12
It was the opinion ofthe Audit staff that the explanation and

documentation provided by the General Committee did not support the General

Committee's contention that AT&T's extension of credit was within the normal course of

AT&T's business. In September 1996, the outstanding balance on this account was

$88,154. By October 16, 1996, the balance had increased to $204,408. At this point, it

appeared the 12 month contract between the Primary Committee and AT&T had expired,

however, AT&T allowed additional charges to be incurred against this account,

increasing the total due to $330,187 as of November 16, 1996. As of February 27,1997,

the total due on this account was $342,515, with the last payment ($50,314) being

credited by AT&T on its November 16, 1996 invoice."

In the Memorandum the Audit staffrecommended the General

Committee provide additional documentation, to include statements from AT&T that

demonstrated that the credit extended was in the normal course ofthe vendor's business

and did not represent a contribution by the vendor. The Memorandum advised the

General Committee the information provided should include examples of other customers

and clients ofsimilar size and risk for which similar services had been provided and

similar billing arrangements that had been used. Also, information concerning billing

policies for similar clients and work, advance payment policies, debt collection policies,

and billing cycles should have been included.

In response to the Memorandum, the General Committee provided

the same documentation provided on April 8, 1998 which detailed the telephonic and

written contact between the General Committee and AT&T, including collection action

initiated by AT&T. The General Committee also provided an affidavit from Ms. Kristina

Womack, manager of the General Committee's Accounting Department. Ms. Womack

stated it took a substantial amount of time over a 10 month period to reconcile the AT&T

bills as numerous errors had to be corrected; was in frequent contact with AT&T; and, the

General Committee made "good faith" payments as they were trying to reconcile the bill.

In addition, the General Committee provided an affidavit from

Carol Ford, a Political Markets Manager at AT&T, who stated "[I]n the ordinary course

ofits business, after election day AT&T will discuss billing detail with campaign

accounting staff." Ms. Ford further related AT&T was in periodic telephone

communication with the Committee in the immediate months following the election and

stated "AT&T received a total of$138,953.55 from the Committee during the months of

March and April 1997. This was approximately 42% ofthe total amount owed to

AT&T" and "[d]uring the remainder of 1997, AT&T and the Committee were in regular

telephonic and written communication regarding charges on the final Uniplan service

bilL" In addition, Ms. Ford stated "[d]espite AT&T's diligent efforts to receive prompt

payment, it is our experience, that it often takes more than a year to settle accounts for

presidential campaigns." Lastly, the General Committee's response conveyed that the

Based on documentation made available and disclosure reports filed by the General Committee, it

appears that AT&T received payment in full in May 1998.

13
AT&T affidavit stated "any high volume customer with a good payment record would

have been accorded the same treatment as the [General] Committee."

It should be noted that the General Committee's assertion that the

AT&T affidavit stated "any high volume customer with a good payment record would

have been accorded the same treatment as the Committee" is not accurate. The affidavit

contained no such language. Further, the General Committee stated that significant

portions ofthe bill were disputed, however, a review ofthe documentation made

available indicates that only $7,274 in charges was disputed.

AT&T has documented its efforts to attempt to collect the amount

owed. However, documentation which demonstrates the credit extended the General

Committee, as being similar to credit extended to other nonpolitical debtors ofsimilar

size and risk was not made available. In fact, AT&T specifically addressed its practices

with respect to political campaigns: "In the ordinary course ofits business, after election

day, AT&T will discuss billing detail with campaign accounting staff." The vendor also

did not provide any information concerning advance payment policies, debt collection

policies or billing cycles as it pertained to other nonpolitical debtors. Such

documentation is critical in determining if an extension of credit was made in the

ordinary course of business.

Based upon the above, it is the Audit staffs opinion that the

General Committee did not demonstrate that the extension of credit by AT&T conformed

to the usual and normal practice in its business or in its industry as required by 11 CFR

§116.3. As a result, the amount of the contribution made by AT&T remains at $154,094.

The Commission voted to receive this finding without any

determination on the merits ofthe analysis ofthe facts or the interpretation ofthe law

contained therein.

3. Excelsior Hotel

Lastly, the Audit staff reviewed documentation which indicated the

General Committee incurred expenses totaling $157,209 at the Excelsior Hotel" for an

election night event ($89,763), election night rooms ($54,165) and room service,

including reception, food and beverages ($13,281). These expenses were incurred

November 5, 1996 through November 7, 1996.

On August 19, 1997, the General Committee made the first

payment of $4,500 towards the election night event expenses ($89,763). This payment

was applied to an invoice dated November 6,1996. As ofSeptember 30,1997, the

" According to the Arbnsas Secretary of State, the Excelsior Hotel is a d.b.a. for M.S. Green -

Little Rock Corporntioll, which was incorporated on December 20, 1988 and remained

incorporated as of April 1998.

14
General Committee had made payments totaling $44,500. A debt identified as disputed

with Excelsior Hotel for $45,353 was itemized on the General Committee's Schedule D-P

filed for the period July I, 1997 to September 30, 1997. In response to a request by the

Audit staffduring fieldwork, the General Committee offered the following concerning the

debt with the Excelsior Hotel: the "[i]nvoice was originally thought to include expenses

not incurred by Committee. Documentation has been furnished and invoice will be paid."

With respect to the election night rooms ($54,165) and room

service ($13,281), the only invoices made available for review were dated June 19, 1997.

The General Committee paid these charges on August 19, 1997 and February 10, 1998

respectively. The General Committee appears to have included these debts on its

Schedule D-P covering the period January 1, 1997 through March 31,1997, indicating

the General Committee was aware ofthis debt prior to receiving the June 19, 1997

invoice.

Although the General Committee considered a certain portion of

the amount invoiced by the Excelsior Hotel to represent services it did not receive, no

documentation was made available to the Audit staff which indicated the Excelsior Hotel

initiated collection procedures or communicated with the Committee concerning

payment. The total charges for all expenses were outstanding no less than 287 days

(November 5, 1996 through August 19, 1997), prior to any payments being made by the

General Committee.

The Audit staff discussed this matter with General Committee

representatives at the end of fieldwork and provided schedules pertaining to the

disbursements made to Excelsior Hotel. Committee officials acknowledged receipt ofthe

schedules and on April 8, 1998 provided a written response which stated, in part:

"The Committee was bil1ed by and paid Arkansas' Excelsior Hotel within

its ordinary course of business for costs incurred and services rendered in

connection with the official election night party held on November 5,

1996. The Committee disputed being responsible for the total cost ofthe

bill and Excelsior billed and made repeated attempts to collect payment

from the Committee. In an attempt to resolve the matter, representatives

from the Committee and Excelsior met face-to-face in Little Rock, AR in

June 1997. As a result ofthe meeting, Excelsior re-billed the Committee

for its pOl1ion ofthe total cost. Within 60 days, the Committee began

making payments.

The Committee disputes the accuracy of the auditors' worksheets detailing

review ofthe Excelsior disbursements. The auditors incorrectly list the

date ofthe invoices as being November 6 and 7,1996. These dates were

listed on the invoices as the dates that the costs were incurred. The correct

date on the Committee's invoices is June 19, 1997. This date represents

15
the date that Excelsior re-billed the Committee, two days after the meeting

in Little Rock."

In addition, the Committee provided a written affidavit from the

General Committee's Treasurer which related, in part, the billing from the Excelsior

Hotel was disputed because portions of the total cost were to be paid by other entities,

including the Democratic National Committee, the White House, The Democratic

Governors' Association and state party committees. In addition, the affidavit related that

due to the size ofthe event, numerous hours were required for the General Committee

personnel to determine that they could not identify the General Committee's portion of

the total cost based on the invoices provided, and therefore, the meeting between the

General Committee and Excelsior Hotel representatives was alTanged and conducted on

June 17, 1997. As a result ofthat meeting, the General Committee was subsequently

rebilled on June 19, 1997. According to this affidavit, only after this meeting did the

General Committee receive the revised invoices, totaling $157,209; this amount was paid

in IS installments between August 1997 and February 1998.

Although the General Committee's response appeared to indicate

that other invoices were issued by the Excelsior Hotel and received relative to election

night rooms and room service, albeit for a larger amount, such invoices were not made

available for our review. The Audit staffreviewed two different invoices, one dated

November 6, 1996 and the other dated June 19, 1997. Both invoices reflected the charges

for election night event expenses of $89,763. Based upon the above, it was the opinion of

the Audit staffthat the total charges for all expenses ($157,209) were outstanding no less

than 286 days (November 6, 1996 through August 19, 1997), prior to any payments being

made by the General Committee. At the close of Audit fieldwork no evidence was made

available to show that the Excelsior Hotel attempted to collect the debt totaling $157,209

in a timely manner. Consequently, the Audit staff considered this extension of credit to

be an apparent prohibited contribution of$157,209.

In the Memorandum, the Audit staffrecommended that the General

Committee provide additional documentation, to include statements from the Excelsior

Hotel, that demonstrated the credit extended was in the l10mwl course ofthe vendor's

business and did not represent a contribution by the vendor. The information provided

should have included examples of other customers and clients ofsimilar size and risk for

which similar services had been provided and similar billing alTangements that had been

used. Also, information concerning billing policies for similar clients and work, advance

payment policies, debt collection policies, and billing cycles were also requested.

In addition to the above, the Audit staffrecommended the General

Committee obtain from the Excelsior Hotel all invoices related to the election night

event, including invoices or expenses allocated to other entities. Further, the Audit staff

recommended that if any of the costs related to the event in question were apportioned or

allocated to the other entities, the General Committee should provide detailed information

16
to establish the basis for such allocation with sufficient information to show how the

allocable amounts were derived.

In response to the memorandum, the General Committee, in

conjunction with affidavits from its Chief Accountant and the General Manager ofthe

Excelsior Hotel stated that the invoices received subsequent to the event were disputed.

Further, it is the ordinary course of business for the Excelsior to expect payment within

30 days of having been billed and if prompt remittance is not the case, then the hotel will

follow up with phone calls until full payment is made. Finally, the General Committee

stated "[i]n the case of associations or organizations who pay for their guests, Excelsior

sends billings within 3 days after the date ofthe event." The Excelsior Hotel also

provided copies of7 invoices addressed to various representatives ofthe General

Committee, dated November 14, 1996 through June 19, 1997, which reflected its

continuous billing pertaining to this matter." In the affidavit ofMr. Linus Raines

(General Manager ofthe Excelsior Hotel) he explained that the "[h]otel experienced

having to deal with different and shifting Committee personnel who kept asking the Hotel

to resend invoices." In addition to telephone calls, written demands for payment and

invoices, Mr. Raines related he also requested assistance from Mike Malone, Deputy

Assistant to the President, on this matter. 18 Lastly, Mr. Raines states "the Hotel has

employed similar techniques to collect overdue statements from national and regional

organizations using the Hotel for special events."

Our analysis ofthe invoices made available indicated that the

Excelsior Hotel billed the General Committee by invoice dated November 14, 1996 for an

Election Night Party ($89,763) and room service and equipment charges ($9,900).

Apparently, the General Committee did not dispute these charges - the final bill, dated

June 19, 1997, agreed to by the General Committee included the same amount for event

expenses ($89,763) and an increased amollnt for room service and equipment charges

($13,281). We also noted there was no evidence made available which indicated the

General Committee had been required to make an advance deposit prior to the date ofthe

event (Election Night Party).

Further, based on the invoices made available in response to the

Memorandum, it appears that the Excelsior Hotel did not bill the General Committee for

room charges ($66,324) until February 20, 1997, which does not comport with the

General Committee assertions that the Excelsior Hotel bills within 3 days of an event.

Apparently, the General Committee disputed this bill. The final bill, dated June 19, 1997,

included room charges totaling $54,165.

17

"

Only the last invoice, dated June 19, 1997, was made available to the Audit staff during the

fieldwork phase of the audit.

Although Mr. Raines indicated documentation to support this telephone call was attached in his

response, it was not included in the response to the Memorandum.

17
Even after the General Committee apparently agreed that it owed

the vendor $157,209, it did not start making payments until 60 days later (14 installments

between August 1997 and February 1998). In itself, this payment schedule appears to

conflict with what the General Committee portrays to be the Excelsior Hotel policy "to

expect payment within 30 days of having been billed.""

The Excelsior Hotel provided evidence ofnumerous invoices sent

and telephone calls made. However, documentation which demonstrates the credit

extended the General Committee, as being similar to credit extended to other nonpolitical

debtors ofsimilar size and risk was not made available. The vendor also did not provide

any information concerning advance payment policies, debt collection policies or billing

cycles as it pertained to other nonpolitical debtors. Such documentation is critical in

determining if an extension of credit was made in the ordinary course of business.

Finally, although the General Committee had acknowledged that

other entities were to be billed with respect to the cost of the event, no documentation

with respect to the allocable costs or method of allocation was made available. Absent

such documentation, a determination with respect to the permissibility of other entities

sharing in the cost ofthis event could not be made.

For the reasons cited above, the Audit staff does not consider the

General Committee's arguments on this matter to be persuasive. As a result, the amount

ofthe apparent prohibited contribution made by Excelsior remains at $157,209.

The Commission voted to receive this finding without any

determination on the merits ofthe analysis ofthe facts or the interpretation ofthe law

contained therein.

Ill. AUDIT FINDINGS AND RECOMMENDAnONS - AMOUNTS

DUE TO THE U.S. TREASURY

A. EXPENDITURE LIMITATION

Sections 44] a(b)(l)(B) and (c) of Title 2 of the United States Code, in

relevant parts, state that no candidate for the office of President ofthe United States who

is eligible under section 9003 ofTitle 26 to receive payments from the Secretary ofthe

Treasury may make expenditures in excess of $20,000,000 as adjusted for the increase in

the Consumer Price Index.

Section 9007(b)(2) ofTitle 26 of the United States Code states that if the

Commission determines that the eligible candidates of a political party and their

authorized committees incurred qualified campaign expenses in excess ofthe aggregate

" In its 1997 October Quarterly report, the General Committee reported beginning cash on hand as

ofJuly I, 1997 totaling $155,175.

18
payments to which the eligible candidates of a major party were entitled under section

9004, it shall notify such candidates ofthe amount ofsuch excess and such candidates

shall pay to the Secretary ofthe Treasury an amount equal to such an amount.

Section 9004.4(a) ofTitle 11 ofthe Code of Federal Regulations limits the

use ofsuch payments to expenditures for the following purposes: to defray qualified

campaign expenses; to repay loans or to otherwise restore funds used to defray qualified

campaign expenses; to restore funds expended in accordance with 11 CFR 9003.4 for

qualified campaign expenses incurred prior to the beginning ofthe expenditure report

period; and winding down costs in accordance with 11 CFR 9004.4(a)(4)(i) and (ii).

Section 9003.4(a) of Title 11 ofthe Code of Federal Regulations states, in

relevant part, that a candidate may incur expenditures before the beginning ofthe

expenditure report period ifsuch expenditures are for property, services or facilities

which are to be used in connection with his or her general election campaign. Examples

cited include expenditures for: Establishing financial accounting systems, organizational

planning, and polling.

Further, II CFR §9003.4(b), in relevant part, limits the sources offunds

used to make expcnditures prior to the expenditure report period to: a candidate

obtaining a loan which meets the requirements for loans in the ordinary course of

business; borrowing from his or her legal and accounting compliance fund; use of the

candidate's personal funds up to his or her $50,000 limit; and, for a candidate who has

received federal funding under 11 CFR part 9031 et seq., borrowing from his or her

primary election committee(s) an amount not to exceed the residual balance projected to

remain in the candidate's primary account(s) on the basis ofthe formula set forth at 11

CFR 9038.3(c).

Section 9034.4(e)(l) of Title 11 ofthe Code of Federal Regulations

provides that the general rule applicable to candidates who receive public funding in both

the primary and the general election is that any expenditure for goods or services that are

used exclusively for the primary election campaign are attributable to primary election

limitations; and, any expenditure for goods or services that are used exclusively for the

general election campaign shall be attributed to general election limitations. Sections

9034.4(e)(2) through (7) of Title 11 ofthe Code of Federal Regulations address the

attribution ofthe following expenses between the primary and general campaigns:

Polling costs shall be attributed according to when the results are received.

Ifreceived on or prior to the date of the candidate's nomination, the expenses shall be

considered primary election expenses. Ifresults from a single poll are received both

before and after the candidate's date of nomination, expenditures shall be prorated

between the primary and general election limits based on the percentage received of

results during each period;

19
Overhead expenditures and payroll costs incurred in connection with state

or national campaign offices shall be attributed according to when usage occurs or the

work is performed. Expenses for usage of offices or work performed on or before the

date ofthe candidate's nomination shall be attributed to the primary election, except for

periods when the office is used only by persons working exclusively on general campaign

preparations;

Campaign materials, such as bumper stickers, campaign brochures,

buttons and pens, that are purchased by the primary election campaign committee and

later transferred to and used by the general election committee shall be attributed to the

general election limits. Materials transferred to but not used by the general election

committee shall be attributed to the primary election limits;

for mcdia communications that are broadcast or published before and

after the date of thc candidate's nomination, 50% ofthe media production costs shall be

attributed to the primary clcction limits and 50% to the general election limits.

Distribution costs, such as airtime and advertising space in newspapers shall be attributed

depending whcn the communication is distributed or broadcast;

Campaign communications such as solicitation costs shall be attributed

depending on the purpose of the solicitation. Ifthe solicitation is for both the primary

committee and the GELAC, the costs will be attributed 50% to each. Other campaign

communications shall be attributed based upon the date of broadcast, publishing or

mailing;

Travel costs shall be attributed according to when the travel occurs. Ifit

occurs on or before the date of the candidate's nomination it will be considered a primary

election expense. Travel to and from the convention shall be attributed to the primary

election. Travel by a person who is working exclusively on general election campaign

preparations shall be considered a general election expense even ifit occurs before the

candidate's nomination.

Section 9004.9(d)(I) ofTitle II ofthe Code of Federal Regulations states,

in part, that the tcrm capital asset means any property used in the operation ofthe

campaign whosc purchasc price exceeded $2000 when acquired by the committee. The

fair market value of capital assets may be considered to be the total original cost ofsuch

items when acquired less 40% to account for depreciation.

Finally, 11 CFR §9003.3(a)(2)(ii)(D) provides, in part, that expenditures

for computer scrvices, a portion of which are related to ensuring compliance with Title 2

and Chapter 95 of Title 26, initially paid from the candidate's federal fund account may

later be reimbursed by the compliance fund. A candidate may use contributions to the

compliance fimd to reimburse his or her federal fund account an amount equal to 50% of

the costs (other than payroll) associated with computer services. Such costs include but

20
are not limited to rental and maintenance of computer equipment, data entry services not

performed by committee personnel, and related supplies.

The expenditure limitation for the 1996 general election for the office of

the President ofthe United States was $61,820,000.

From inception through September 30, 1997, the General Committee

reports reflected net operating expenditures [subject to the limitation] of$61,718,608.20

The Memorandum contained an analysis of expenditures subject to the

limitation at 2 U.S.C. §441a (b) (1) (B) which indicated the General Committee had

actually exceeded the limitation by $529,387.21 The Audit staff analysis included

$592,808 in disputed debt. The General Committee was advised that when the disputed

debt was resolved a downward adjustment may be necessary. Further, the Audit staff

identified $2,472,374 in expenditures paid by the General Committee and charged to the

limit that could bave been paid by the GELAC. The GELAC had reimbursed the General

Committee $1,000,000 prior to September 30, 1997. Therefore, as of September 30,

1997, GELAC could have reimbursed the General Committee up to $1,472,374 to bring

the General Committee within the expenditure limitation

In the Memorandum the Audit staffrecommended that General Committee

provide evidence that the expenditure limitation had not been exceeded. Further, the

Audit staff recommended that the General Committee provide complete documentation

with respect to all disputed debts including but not limited to up-to-date documentation

from each vendor confirming the full amount owed and the amount in dispute. The

General Committee was advised, that based upon our review ofthe documentation made

available, expenditures subject to the limit would be acljusted accordingly.

In response to the Memorandum, the General Committee calculated

expenditures subject to the limit up through June 30, 1998. However, no documentation

was provided to support its calculations. Further, no documentation was made available

with respect to any disputed debt. Based upon the General Committee's response and

disclosure reports filed, the Audit staffmade certain adjustments to the expenditures

subject to the limit as deemed appropriate. As calculated, the Audit staff determined that

the General Committee exceeded the limitation at 2 U.S.C. §441a(b)(I)(B) in the amount

of $581 ,910. However, it should be noted that the General Committee provided evidence

that it received reimbursements from GELAC as an offset against this amount. As a

result, the General Committee's spending is within the limitation.

20

"

The General Committee did not report these numbers on FEe Form 3P before the end of audit

fieldwork, therefore the Audit stnff calculated this amount based on reports filed.

The amount in exccss of the limitation was calculated as of9/30/97. GELAC's reimbursements,

totaling £I,000,000, which occurred prior to 9/30/97 have been factored into the calculation.

21
The Commission voted to receive this finding without any determination

on the merits 0 f the analysis of the facts or the interpretation ofthe law contained therein.

Shown below is a presentation ofthe Audit staffs analysis of expenditures

subject to the limitation. In addition, the Audit staffs analysis ofthe General

Committee's financial position as of 12/5/96 may be found at Exhibit #1.

Audit Calculation of Expenditures Subject to Limitation as Reported $61,718,608

Add:

Less:

Accounts Payable at 9/30197

Due to Primary Committee

Accounts Receivable at 9/30197

Due from Primary Committee

897,949 a/

309,447 bl

472,216 cl

51,878 dl

•

Adjusted Expenditures Subject to the Limitation

Less: Expenditure Limitation

Amount over/(under) the Limit as of 9/30/97

62,401,910

61,820,000

581,910el

a/ Includes disputed debt of approximately $592,808 which, according to the General

Committee, a portion has been resolved. However, no documentation has been made

available to substantiate such resolution.

bl Represents an amount due to the Primary Committee for payments it made on an

AT&T telephone lease ($63,736), GTE refund ($439), Bismark Enterprises ($22,984)

and Morris and Carrick ($30,000). Also includes payments made by the Primary

Committee after the Candidate's date ofineligibility for salary and overhead

($192,288) (see Report of the Audit Division on Clinton/Gore '96 Primary

Committee, Inc., at Findings IILB.l.a., b., C., and IILB.2., and III.D.).

cl Represents open receivables at 9130/97.

dI Represents an amount due from the Primary Committee relative to convention-related

and pre-DOl travel ($12,427) (see Finding III.B.l.). Also includes 3 sublease

payments from Dickstein & Shapiro paid to the Primary Committee in error

($39,451). Such payments should have been made to the General Committee (see

Report ofthe Audit Division on Clinton/Gore '96 Primary Committee, Inc., at

Finding III.D.4.).

el The Audit stnffidentified expenditures, totaling $1,472,374 paid by the General

Committee through 9/30/97 that could have been paid by the GELAC. The General

Committee received reimbursements in 1998 from GELAC sufficient to offset the

calculated amount in excess ofthe limit.

22
B. ApPARENT NON-QUALIFIED CAMPAIGN EXPENSES

Section 9002.11 ofTitle II ofthe Code of Federal Regulations states, in

part, that qualified campaign expense means any expenditure, including a purchase,

payment, distribution, loan, advance, deposit, or gift ofmoney or anything of value

incurred to flirther a candidate's campaign for election to the office of President or Vice

President ofthe United States.

Further, I I CFR §9003.5 states, in part, that each candidate shall have the

burden ofproving that disbursements made by the candidate or his authorized committee

are qualified campaign expenses.

In addition, 11 CFR §9034.4(e)(7) states, in part, expenditures for

campaign-related transportation, food, and lodging by any individual, including a

candidate, shall be attributed according to when the travel occurs. Ifthe travel occurs on

or before the date of the candidate's nomination, the cost is a primary election expense.

Travel to and from the convention shall be attributed to the primary election. Travel by a

person who is working exclusively on general election campaign preparations shall be

considered a general election expense even if the travel occurs before the candidate's

nomination.

Lastly, I I CFR §9007.2(b)(2)(i) states, in part, that ifthe Commission

determines that any amount of any payment to an eligible candidate from the Fund was

used for purposes other than to defray qualified campaign expenses, it will notify the

candidate ofthe amount so llsed, and such candidate shall pay to the United States

Treasury an amount equal to such amount.

I. Non-campaign Related Travel

The Audit staff identified General Committee payments totaling

$40,900 made to TWA covering the cost of air travel which occurred between August 21,

1996 and September 6, 1996 relative to individuals traveling to and from Chicago just

prior to or soon after the Democratic National Convention (the Convention). In addition,

the Audit staff identified General Committee payments totaling $5,136 made to White

House Airlift Operations covering the cost of air travel for the Vice President and 1I

individuals from Chicago to Cape Girardeau, MO on August 30, 1996. The Candidate

was nominated on August 28, 1996.

On April 8, 1998, the General Committee provided affidavits and

documentation in support of its position - airfare for employees who were either traveling

to Chicago to attend general election training (in Chicago), or were performing functions

exclusively for the General Committee while in Chicago were general election expenses.
Based on our review ofthe documentation provided by the General

Committee, these expenses may be categorized as airfare costs for:

• Individuals who traveled to and from Chicago prior to the Convention for general

election training. The General Committee paid a total of$II,376 in airfare for

persons in this category;

•

• Individuals who traveled to Chicago prior to the convention to attend general

election training, but elected to remain in Chicago for the Convention (at their

own expense). According to the General Committee's response, return airfare

was provided after completion of the Convention because these individuals would

have been provided return airfare if they had not elected to stay. The General

Committee paid a total of $22,233 in airfare for persons in this category.

Individuals who arrived in Chicago prior to the Convention to work as Primary

Committee employees, but departed after the Convention to perform General

Committee advance duties. These individuals initially received round-trip airfare

to and from Chicago that was paid by the Primary Committee. The General

Committee then purchased an additional one way ticket from Chicago to a

location where General Committee activities would occur. The Primary

Committee apparently received a credit for the unused return airfare. The General

Committee paid a total of$7,291 in airfare for persons in this category.

With respect to the travel from Chicago to Cape Girardeau, MO,

the General Committee provided a written response which stated, in part, that:

" the Vice President did not return to his original place of origin after the

convention. The convention concluded on Thursday, August 29, 1996.

The Vice President remained in Chicago on August 30, 1996 to attend

political events pertaining to the general election. Subsequently, he

traveled (0 Cape Girardeau, MO for General Committee events The

Committee believes this travel is General Committee travel because it

exclusively involved general election activity."

First, as to those individuals who performed Primary Committee

duties during the Convention, but then departed Chicago to participate in general election

activities, including the Vice President and the 11 individuals who departed Chicago for

Cape Girardeau, MO, the Audit staff notes that these exact circumstances are addressed

in the Commission's Financial Control and Compliance Manual for Presidential Primary

Candidates Receiving Public Financing, dated January 1996 (the Manual). The Manual

at Chapter I (C)(2)(c) states, "the costs associated with campaign travel will be attributed

to the primary or general election campaigns depending on the date ofthe travel. The

cost oftravel occurring on or before the date of nomination is a primary expense; after

the date of nomination it is a general election expense. Two exceptions are provided to

24
this general rule; first, travel on or before the date of nomination by a person traveling

for work exclusively on the general election campaign is a general election expense, and

second, travel both to and from the convention is primary election travel. The travel back

from the convention need not be to the point of departure. Therefore, even ifthe

individual is traveling to another campaign stop, the cost oftransportation from the

convention city to that destination will be a primary campaign expense. For purposes of

this section travel shall incl ude transportation, food, lodging and incidentals. When travel

is to be allocated under either ofthese exceptions, it is the committee's responsibility to

maintain documentation that establishes the purpose ofthe trave!." See 11 CFR § 9034.4

(e) (7).

Second, for those individuals who attended general election

training, the General Committee did not provide sufficient documentation to demonstrate

that the individuals, while at the Convention site, did not participate in other activities in

preparation for the Convention. Documentation such as the agenda for the general

election training, including attendees, speakers, and dates and times oftraining sessions

should be made available. Other documentation that demonstrates that these individuals

did not participate in Convention activities, planning, etc., should also be made available.

In the opinion ofthe Audit staff, the General Committee did not

provide, as ofthe end of audit fieldwork, sufficient evidence to substantiate that any

employee was performing duties exclusively for the General Committee. Accordingly,

the Primary Committee should have paid airfare for all employees who arrived and

departed Chicago immediately prior to and subsequent to the Convention. The Audit

stafftherefore considered $46,036 to be a non-qualified campaign expense paid by the

General Committee.

In the Memorandum the Audit staff recommended that the General

Committee demonstrate that the aforementioned expenses were incurred to further the

Candidate's campaign for election to the office of President. Absent such a showing, the

Audit staffrecommended the General Committee obtain a reimbursement from the

Primary Committee of $46,036, representing the value of the airfare expenses paid by the

General Committee on behalf of the Primary Committee.

In response to the Memorandum, the General Committee provided

a copy ofthe Campaign Training Schedule, which detailed training and instruction

conducted on behalf of the General Committee. The schedule indicated training

commenced on Friday, August 23,1996 and concluded on Sunday, August 25,1998.

The General Committee also provided a copy of the Campaign Training

Accommodations Information Form which was to be completed by all trainees. The form

requested that the trainees indicate ifthey were requesting a room reservation at the

Sheraton for the remainder ofthe convention (Sunday, August 25 through Thursday,

August 29). The trainees were advised on this form that the rooms would not be paid for

by "ClintonJGore"; and, that the trainees would be billed for the room personally.

25
•

In addition, the General Committee also disagreed with the Audit

staff's categorization of airfare costs. The General Committee preferred to group the

airfare costs as follows:

I. Individuals who traveled both to and from Chicago prior to the

Convention for General Election Training ($11,376).

2. Individuals who traveled to Chicago prior to the convention for

General Election training, but stayed in Chicago after the completion

ofthe training at their own expense ($22,233).

3. Individuals who traveled to Chicago in an unofficial capacity at their

own expense and then departed Chicago after the convention to

perform General Election duties ($4,265).

4. Individuals who traveled to Chicago at the Primary Committee's

expense and then departed Chicago for a different location to perform

General Election duties ($3,026).

5. The Vice President and eleven staffmembers who departed after the

convention to perform General Election duties ($5,136).

The Audit staff noted the General Committee did not disagree with

the calculation of airfare costs identified by the Audit staff. However, categories 3 and 4

identified by the General Committee had been grouped together by the Audit staff, while

category 5 had been discussed separately.

With respect to the airfare costs in categories 1,2 and 3, the

General Committee contended these individuals were working exclusively on general

election campaign preparation. The General Committee stated with respect to those

travelers in categories 2 and 3, they "had no official role at the Convention. The

Committee did not ask them to attend the convention and indeed, informed them that they

were not needed at the convention and they were not compensated." The General

Committee contended that since the individuals in all 3 categories were working

exclusively on general election activities, either upon arrival or when they departed, the

exception to the travel cost allocation cited under II CFR §9034.4(e)(7) applied, and the

General Committee would be responsible for all airfare costs.

Lastly, the General Committee stated although it did not agree, it

would no longer dispute travel totaling $8,162 which included individuals in category 4

who traveled to Chicago at Primary Committee expense but departed the Convention to

perfonn General Election advance duties ($3,026), and the Vice President and other staff

personnel in category 5 who traveled from the Convention to Cape Girardeau, MO for

general election activities ($5,136).

26
i:

With respect to the airfare costs in category 1 ($11,376), the Audit

staffreviewed documentation pertaining to the General Election training and agrees that

the individuals appear to have been working exclusively on general election activities and

that the airfare costs should have been paid by the General Committee.

With respect to the airfare costs in category 2, based on the

representations included in the General Committee's response, it now appears that the

airfare expense may be borne by the General Committee.

With respect to the airfare costs in category 3, the Audit staff does

not agree with the General Committee's position that these individuals were working

exclusively on general election activities. No documentation was made available that

demonstrated the individuals were working exclusively on behalf of the General

Committee while in Chicago. These individuals did not participate in the General

Election training. No exception concerning the return trip from the convention city for

personnel who attended the convention at their own expense is provided at 11 CFR

§9034.4(e)(7). The fact that these individuals were in Chicago, and apparently attended

the convention, runs counter to the General Committee position that the individuals were

working exclusively on general election activities. In our view, the airfare costs for

individuals identified in category 3 ($4,265) represent an expense ofthe Primary

Committee.

Therefore, the General Committee should seek a reimbursement

from the Primary Committee for airfare costs totaling $12,427 ($46,036-11,376-22,233

[categories 1 and 2]). Ifsuch reimbursement is not made, the amount paid ($12,427) by

the General Committee represents a non-qualified campaign expense.

Recommendation

The Audit staffrecommended that the Commission make a determination that the

General Committee be required to make a repayment of $12,427 to the United States

Treasury, pursuant to 11 CFR §9007.2(b)(2). Should the General Committee provide

evidence that it has been reimbursed by the Primary Committee, the recommended

repayment will not be necessary.

The Commission approved the Staff recommendation.

2. Undocumented Media Disbursements

Payments, totaling $1,001,370, were made to Uniworld Group Inc.,

(Uniworld), a media firm for the stated purpose of purchasing radio and television air

time. The General Committee provided station invoices and copies of checks issued by

Uniworld in response to a Commission subpoena; subsequently in response to the

conference held at the conclusion of audit fieldwork additional information was provided.

27
Based on our review of the documentation made available, $175,162 paid to Uniworld is

not adequately documented; $73,309 in checks issued by Uniworld to broadcast stations

are not supported by station invoices; $3,553, although identified by the General

Committee as a refund due from the media firm, is not supported by documentation from

the firmll

; and the remaining $98,300 which may represent all or a portion ofthe

commission charged by Uniworld carmot be verified since no contract or written

arrangement has been provided to document the amount ofthe commission.

In the Memorandum the Audit staffrecommended that the General

Committee provide information to document the aforementioned $175,162 in media

expenses. Specifically, provide station invoices, an executed copy ofthe contract or

written agreement which set forth the amount ofthe commission relative to the media

time purchased, and evidence in the form of an account reconciliation from Uniworld

establishing the amount of any refund due the General Committee.

In response to the Memorandum, the General Committee provided

evidence to document the $175,162 in media expenses, to include copies ofrequested

station invoices, an affidavit from the Chairman and CEO ofUniworld regarding an

agreement between Uniworld and the General Committee concerning a 10% commission

rate, and an unexecutcd, draft, Consulting Agreement, which also details the 10%

commission rate, and a reconciliation from Uniworld establishing the amount ofrefunds

due the General Committee.

Based upon the records made available, the General Committee

materially documented the $175,162 in media expenses.

The Commission voted to receive this finding without any

determination on the merits ofthe analysis ofthe facts or the interpretation ofthe law

contained therein.

C. INTEREST EARNED

Section 9004.5 ofTitle 11 ofthe Code of Federal Regulations states, in

relevant part, that investment ofpublic funds or any other use ofpublic funds that results

in income is permissible, provided that an amount equal to all net income derived from

such a use, less Federal, State and local taxes paid on such income shall be paid to the

Secretary.

Section 9007.2(b)(4) of Title 11 ofthe Code of Federal Regulations states

that if the Commission determines that a candidate received any income as a result of an

investment or other use of payments from the fund pursuant to 11 CFR 9004.5, it shall so

notify the candidate, and such candidate shall pay the United States Treasury an amount

21 Documcntation supporting a $63,970 rcfund from thc media firm has bccn provided.

28
equal to the amount determined to be income, less any Federal State or local taxes on

such income.

The General Committee reported receiving $3,985 in interest income, the

majority of which represented interest earned on telephone deposits; the interest related to

those deposits was reportedly received in 1998.

Recommendation

The Audit staffrecommended that the Commission make a determination that the

General Committee make a payment of$3,985, less applicable Federal, State and local

taxes due, to the United States Treasury pursuant to 11 CFR §9004.5.

The Commission approved the Staffrecommendation.

D. STALE DATED CHECKS

Section 9007.6 of Title 11 ofthe Code of Federal Regulations states that if

the committee has checks outstanding to creditors·or contributors that have not been

cashed, the committee shall notify the Commission. The committee shall inform the

Commission of its efforts to locate the payees, ifsuch efforts have been necessary, and its

efforts to encourage the payees to cash the outstanding checks. The committee shall also

submit a check for the total amount ofsuch outstanding checks, payable to the United

States Treasury.

During our review ofthe General Committee's disbursement activity, the

Audit staff identified 44 stale-dated checks totaling $12,326 dated between August 26,

1996 and June 3, \997. The Audit staff provided to the General Committee a schedule

ofthe stale-dated checks.

In Memorandum, the Audit staffrecommended that the General

Committee present evidence that the checks were not outstanding (i.e., copies ofthe front

and back ofthe negotiated checks), or that the outstanding checks were voided and/or that

no General Committee obligation exists.

In response to the Memorandum, the General Committee provided

evidence that 5 checks for $1,520 had cleared the bank; 26 checks totaling $7,871 had

been voided, reissued and subsequently cleared the bank; and, 2 checks totaling $1,612

had been voided because the amounts were either not owed to the vendor or represented a

duplicate payment. Information was also provided which indicated action had been taken

regarding the remaining II items ($1,323); however evidence ofresolution was not yet

available.

Based on the information provided, the General Committee has complied

materially with the recommendation.

29
2i

IV. FINDING AND RECOMMENDATION - REPAYMENT MATTER

CLINTON/GORE '96 GENERAL ELECTION LEGAL AND

ACCOUNTING COMPLIANCE FUND

A. STALE-DATED CHECKS

Section 9007.6 ofTitle 11 of the Code of Federal Regulations states that if

the committee has checks outstanding to creditors or contributors that have not been

cashed, the committee shall notify the Commission. The committee shall inform the

Commission ofits efforts to locate the payees, ifsuch efforts have been necessary, and its

efforts to encourage the payees to cash the outstanding checks. The committee shall also

submit a check for the total amount ofsuch outstanding checks, payable to the United

States Treasury.

During our review of the GELAC's disbursement activity, the Audit staff

identified 21 stale-dated checks totaling $3,659 dated between June 28, 1996 and March

3,1997. The Audit staff provided a schedule ofthe stale-dated checks to GELAC

officials.

In the Memorandum, the Audit staffrecommended that, the GELAC

present evidence that the checks were not outstanding (i.e., copies ofthe front and back of

the negotiated checks), or that the outstanding checks were voided and/or that no GELAC

obligation exists.

In response to the Memorandum, the GELAC provided evidence that 7

checks totaling $1,709 had been voided, reissued and subsequently cleared the bank.

Information was also provided which indicated action had been taken regarding the

remaining 14 items ($1,950); however, evidence ofresolution was not yet available.

Based on the above, the GELAC has complied materially with the

recommendation.

V. SUMMARY OF AMOUNTS DUE TO THE U.S. TREASURY

Finding IILB.I.

Finding IILC.

Apparent Non-Qualified Campaign ExpenseConvention related Travel

Interest Earned

Total Due U.S. Treasury

$12,427

3,985"

$16,412

l) Less applicable Federal. Slale and local taxes due

30
in

ru

o

•

MEMORANDUM

TO:

. THROUGH:

FROM:

SUBJECT:

FEDERAL ELECTION COMMISSION

WASHINGTON. D.C. 204(,)

OCtober 1, 1998

Robert J. Costa

Assistant StaffDirector

Audit Division

Delbert K. Rigsby .D

Anomey

Proposed Audit Report on the Clinton/Gore '96 General Committee, Inc.

and Clinton/Gore '96 Ge~eral Election Legal and Accounting Compliance

Fund (LRA #508) --

I. INTRODUCTION

The Office of General Counsel has reviewed the proposed Audit Report on the

Clinton/Gore '96 General Committee, Inc. ("GEC") and Clinton/Gore '96 General Election

Legal and Accounting Compliance Fund ("GELAC") submitted to this Office on September 17,

1998.1 As you note in your cover memorandum transmitting the proposed Report to this Office,

1 Since the proposed Audit Report Concerns the audit of a candidate and his authorized committee that

received public financing in the general election. this Office recommends that the Commission consider this

document in open session in accordance with \\ C.F.R. § 9007.\(e)(1). See also II C.F.R. § 2.4.

31
Memorandum to Raben Casta

Clinton/GaTe '96 GEe AND GELAC Audit Report

(LRA #508)

Page 2

it appears that at this time the Commission seeks to address this matter in early November 1998.

This proposed scheduled necessarily requires an expedited legal review from this Office. In

order to efficiently perform our review and to provide you with time to make our suggested

revisions, this Office intends to provide you with "rolling" comments. The following

memorandum lists sections ofthe proposed Report in which we concur with your findings and

recommendations. This Office has DO comments on such sections. We understand that the

proposed Audit Report was submitted to this Office prior to the completion ofthe referencing

process and, therefore, we request that you alert us to any changes to these sections that may be

made during this process. This Office is drafting comments on sections ofthe proposed Report

that are not listed herein, and will submit those comments in future memoranda. Ifyou have any

questions concerning our comments, please contact Delbert K. Rigsby, "the attorney assigned to

this audit.

II. DISCUSSION

This Office concurs with your findings and recommendations on the following sections

ofthe proposed Report and has no comments on such sections:

Apparent Non-Qualified Campaign Expenses - Undocumented Media Disbursements

(I11.B.2)

Interest Earned (III.C)

Clinton/Gore '96 General Election Legal and Compliance Fund - Stale Dated Checks

(IV.A)

Other Staff Assigned

Delanie Dewitt Painter

Andre D. Pineda

Joel J. Roessner

..

32
•

MEMORANDUM

TO:

THROUGH:

FROM:

SUBJECT:

FEDERAL ELECTION COMMISSION

WASHINGTON. D.C. 1ll4b3

october 21, 1998

Robert J. Costa

Assistant StaffDirector

Audit Division

James A. Pehrkon

Acting StaffDire

Lawrence M. NObl0

General Counsel

Kim Bright-Coleman

Associate General Counsel

Rhonda J. VOSding~ Assistant General Counsel

Proposed Audit Report on the Clinton/Gore '96 General Committee, Inc.

and Clinton/Gore '96 General Election Legal and Accounting Compliance

Fund (LRA #508)

1. INTRODUCTION

The Office of General Counsel is continuing its review of the proposed Audit Report on

the Clinton/Gore '96 General Committee, Inc. ("General Committee") and Clinton/Gore '96

General Election Legal and Accounting Compliance Fund ("GELAC") submitted to this Office

on September 17, 1998. As noted in our October 1, 1998 memorandum, this Office will present

its comments to you as they are prepared. The following memorandum contains our comments

on several sections ofthe proposed Report. We understand that the proposed Audit Report was

submitted to this Office prior to the completion ofthe referencing process and, therefore, we

request that you alert us to any changes to these sections that may be made. This Office is

drafting comments on matter~ that are not included in this memorandum or in our memorandum

dated October 1, 1998. We will submit such comments in a future memorandum. If you have

any questions concerning our comments, .please contact Delbert K. Rigsby or Delanie DeWitt

Painter.

33
Memorandum to Robert Costa

Clinton/Gore '96 General Co=iltee and GELAC

(LRA #508)

Ige 2

II. APPARENT PROHIBITED CONTRIBUTIONS RESULTING FROM

EXTENSION OF CREDIT BY A COMMERCIAL. VENDOR (!l.A)!

The proposed Report concludes that it appears that the General Committee received a

prohibited contribution from World Wide Travel (WWf) because the extension of credit by

WWT did not conform to the usual and normal practice in its business or in its industry as

required by 11 C.F.R. § 116.3. This Office concurs with the Audit staff's finding. However, this

Office disagrees with the language in footnote IS that suggests that WWT's billing experience

with Clinton for President (the 1992 primary committee) is not considered relevant. In

considering whether credit was extended in the ordinary course of business, the Commission will

consider, inrer alia, whether the commercial vendor received prompt payment in full if it

previously extended credit to the same candidate or political committee.2 11 C.F.R.

§ 116.3(c)(2). Since Mr. Clinton was a candidate in 1992 and 1996, this Office believes that

either the phrase "although not considered relevant" should be deleted from this footnote or there

should be a statement that WWT's billing experience with Clinton for President was not similar

to their billing experience with the Clinton/Gore '96 Primary Committee.

III. APPARENT NON-QUALIFIED CAMl'AlGN EXPENSES (lll.B.l)

The proposed Report identifies certain payments by the General Committee for airfare

costs as non-campaign related travel and classifies them into three categories. The Audit staff

determined that these expenses were expenses ofthe Primary Committee. Therefore, the

proposed Report concludes that the General Committee's payment ofsuch airfare costs totaling

$34,660 resulted in a non-qualified campaign expense ofthe General Committee, and states

that the General Committee should seek a reimbursement from the Primary Committee or make

a payment of$34,660 to the United States Treasury. 26 C.F.R. § 9007(b)(4). 11 C.F.R.

§ 9007.2(b)(2). 'This Office concurs with the fmding as it relates to the air fare costs for category

1 and category 3. However, this Office disagrees with the finding as it relates to air fare costs for

category 2. Such costs totaling $22,233 involve individuals who were in Chicago for general

election training prior to the Democratic Nationa1 CQnvention and who decided to remain in

Chicago during the convention at their own expense.

Expenditures for campaign-related transportation, food and lodging by any individual,

including a candidate, shall be attributed based on when the travel occurs. 11 C.F.R.

§ 9034.4(e)(7). Travel by a person who is working exclusively on general election campaign

preparations shall be considered a general election expense even ifthe travel occurs before the

date ofthe candidate's nomination. Id. In regard to the category 2 expenses, the General

Parenlhetical references are to Ihe relevant sections of the proposed GEC audit report.

In detennining whe\her credit was extended in \he ordinary course of business, the Commission also

considers whelher Ihe commercial vendor followed its established procedures and its past practice in approving \he

e"tension of credit. and whelher Ihe extension of credit confonned to the usual and nonnal practice in the

commercial vendor's trade Or industry. See 11 CF.R. § 116.3.

34
Memorandum to Robert Costa

Clinton/Gore '96 General Committee and GELAC

(LRA #508)

\ge 3

Committee paid the airfare costs for the individuals to travel to Chicago to attend the training.

The General Committee also paid their return airfare. In the Exit Conference Memorandum

("ECM"), the Audit staff classified the expense as a non-qualified campaign expense. In its

response to the ECM, the General Committee provided the campaign training schedule for those

individuals, and stated that the airlare costs ofthe individuals in category 2 should be an expense

ofthe General Committee because those individuals "had no official role at the convention. The

Committee did not ask them to attend the convention and indeed, informed them that they were

not needed at the convention and they were not compensated."

In light ofthe General Co=ittee's response to the ECM, there must be some evidence

that these individuals in fact worked on Primary Committee activities. See Robertson v.

Federal Election Commission, 45 FJd 486, 493 (1995)(In case involving primary committee

state expenditure limitations, the court stated that "while recipients of matching funds bear the

burden of accounting for allocation and documentation of campaign expenses, the agency cannot

reject uncontroverted documentation relevant to state expenditure limits"). However, the

proposed Report does not identify any evidence that suggests that they worked or volunteered for

the Primary Committee. Thus, this Office recommends that, absent any evidence that such

individuals worked on Primary Committee activities in either a paid or volunteer capacity, the

proposed Report conclude that they worked exclusively on General Committee activities, and

that the category 2 airfarc costs were a qualified campaign expense of the General Committee.

This Office notes that the Audit staffs recommendation on non-campaign related travel

lists the amount due to the United States Treasury as a payment instead of a repayment. When a

committee accepting pUblic financing makes payments that are considered to be non-qualified

campaign expenses, thc amount ofsuch non-qualified campaign expenses must be repaid to

the United States Treasury because public funds have been spent for impermissible purposes.

11 C.F.R. § 9007.2(b)(2). Thus, this Office recommends that the proposed Report's

recommendation use the term "repayment" instead of "payment" when referring to the amount

due from the General Committee for expenditures on non-campaign related travel.

IV. STALE DATED CHECKS (III.D)

In the ECM, the Audit slIlff identified 44 stale dated checks, and recommended that the

General Committee provide evidence that the checks were not outstanding, were voided and/or

that no obligation existed. The proposed Report identifies IS stale dated checks that are

outstanding, and states that "information was also provided which indicated action had been

taken regarding the remaining 15 items; however evidence ofresolution was not yet available."

Ifthe committee has checks outstanding to creditors or contributors that have not been cashed,

the committee shall notify the Commission. 11 C.F.R. § 9007.6. The committee shall inform

the Commission ofits efforts to locate payees, if such efforts have been necessary, and its efforts

to encourage the payees to cash outstanding checks. Jd. The committee shall also submit a

check for the total amount ofsuch outstanding checks, payable to the United States Treasury. ld.

The proposed Report notes simply that the General Committee has "complied materially" with

3S
.Memorandum to Roben Costa

Clinton/Gore '96 General Committee and GELAC

(LRA #508)

1ge4

the Audit staff's recommendation. Although the General Committee may have complied

materially with the recommendation in the ECM, this Office notes that the General Committee

still has a legal obligation to resolve these matters. 11 C.F.R. § 9007.6. Thus, this Office

recommends that the proposed Report include a recommendation that the General Committee

pay the outstanding amount ofstale dated checks to the United States Treasury.

StaffAssigned: Delanie DeWitt Painter

Delbert K. Rigsby

Andre D. Pineda

Joel J. Roessner

36
FEDERAL ELECTION COMMISSION

WASHINGTON, DC. 20463

III

ru

u

June 10, 1999

The Honorable William J. Clinton

c/o Ms. Lyn Utrecht, Esquire

Ryan, Phillips, Utrecht & MacKinnon

1133 Connecticut Avenue, N,W,

Suite 300

Washington, D,C, 20006

Dear Mr. President:

Attached please find the Report ofthe Audit Division on Clinton/Gore '96 General

Committee, Inc, and Clinton/Gore '96 General Election Legal and Accounting Compliance

Fund. The Commission approved the report on June 3, 1999. As noted on page 5, ofthe

attached report, the Commission may pursue any of the matters discussed in an

enforcement action,

In accordance with II CPR §§9007.2(c)(I) and (d)(I), the Commission has made a

determination that a repayment to the Secretary ofthe Treasury in the amount of$I6,412 is

required within 90 calendar days after service ofthis report (September 13, 1999),

Should you dispute the Commission's determination that a repayment is required,

Commission regulations at 11 CFR §9007,2(c)(2)(i) provide you with an opportunity to

submit in writing, within 60 calendar days after service ofthe Commission's notice

(August 13, 1999), legal and factual materials to demonstrate that no repayment, or a lesser

repayment, is required. Further, 11 CFR §9007.2(c)(2)(ii) permits a Candidate who has

submitted written materials to request an opportunity to address the Commission in open

session based on the legal and factual materials submitted.

The Commission will consider any written legal and factual materials submitted

within the 60 day period when deciding whether to revise the repayment determination,

Such materials may be submitted by counsel if you so elect. If you decide to tile a

response to the repayment determination, please contact Kim 1. Bright-Coleman ofthe

Office of General Counsel at (202) 694-

37
The Honorable William .I. Clinton

Page 2

1650 or toll free at (800) 424-9530. If you do not dispute this determination within the 60

day period provided, it will be considered final.

The Commission approved Audit Report will placed on the public record on or

about June 15, 1999. Should you have any questions regarding the public release ofthis

report, please contact Ron Harris ofthe Commission's Press Office at (202) 694-1220.

Any questions you may have related to matters covered during the audit or in the

audit report should be directed to Mary Moss or Thomas Nurthen ofthe Audit Division at

(202) 694-1200 or toll free at (800) 424-9530.

Assistant StaffDirector

Audit Division

Attachments:

Audit Report

38
FEDERAL ELECTION COMMISSION

WASHINGTON. DC 20463

•

•

ru

ru

June 10, 1999

Ms. JDan Pollitt, Treasurer

Clinton/Gore '96 General Committee, Inc.

Clinton/Gore '96 General Election Legal and Accounting

Compliance Fund

c/o Ms. Lyn Utrecht, Esquire

Ryan, Phillips, Utrecht and MacKim10n

1133 Connecticut Avenue, N.W.

Suite 300

Washington, DC 20006

Dear Ms. Pollitt:

Attached please find the Report ofthe Audit Division on Clinton/Gore '96 General

Committee, Inc. and Clinton/Gore '96 General Election Legal and Accounting Compliance

Fund. The Commission approved the report on June 3, 1999. As noted on page 5 ofthe

attached report, the Commission may pursue any ofthe matters discussed in an

enforcement action.

In accordance with II CFR §§9007.2(c)(1) and (d)(I), the Commission has made a

determination that a repayment to the Secretary ofthe Treasury in the amount of $16,412 is

required within 90 calendar days after service ofthis report (September 13, 1999).

Should the Candidate dispute the Commission's determination that a repayment is

required, Commission regulations at II CFR §9007.2(c)(2)(i) provide the Candidate with

an opportunity to submit in writing, within 60 calendar days after service ofthe

Commission's notice (August 13, 1999), legal and factual materials to demonstrate that no

repayment, or a lesser repayment, is required. Further, 11 CFR §9007.2(c)(2)(ii) permits a

Candidate who has submitted written materials to request an opportunity to address the

Commission in open session based on the legal and factual materials submitted.

The Commission will consider any written legal and factual materials submitted

within the 60 day period when deciding whether to revise the repayment determination.

Such materials may be submitted by counsel ifthe Candidate so elects. Ifthe Candidate

decides to file a response to the repayment determination, please contact Kim L.

39
•

•

•

Ms. Joan Pollitt, Treasurer

Page 2

Bright-Coleman ofthe Office ofGeneral Counsel at (202) 694-1650 or toll free at (800)

424-9530. Ifthe Candidate. does not dispute this determination within the 60 day period

provided, it will be considered final.

The Commission approved Audit Report will be placed on the public record on or

about June 15, 1999. ShOllld you have any questions regarding the public release ofthis

report, please contact Ron Harris ofthe Commission's Press Office at (202) 694-1220.

Any questions you may have related to matters covered during the audit or in the

audit report should be directed to Mary Moss or Thomas Nurthen ofthe Audit Division at

(202) 694-1200 or toll free at (800) 424-9530.

Assistant StaffDirector

Audit Division

Attachments:

Audit Report

40
CHRONOLOGY

CLINTON/GORE '96 GENERAL COMMITTEE, INC

AND

CLINTON/GORE '96 GENERAL ELECTION LEGAL AND

ACCOUNTING COMPLIANCE FUND

Audit Fieldwork

Exit Conference Memorandum to Committee

Response Received to the Exit Conference

Memorandum

Final Audit Report Approved

41

4/28/97 - 03/18/98

5/15/98

7/29/98

6/3/99
Exhibit I

Page 1 on

CLINTONIGORE '96 GENERAL COMMITTEE, INC.

STATEMENT OF NET OUTSTANDING QUALIFIED CAMPAIGN EXPENSES

AS OF 12/5/96

(Determined as of 12/31/97)

•

•

ASSETS

Cash on Hand

Cash in bank

Accounts Receivable

Capital Assets

Due from Primary Committee

Total Assets

LIABILITIES

Accounts Payable

Actual (12/6/96 - 12131/97)

Outstanding at 12/3 1197

Payable to Primary Committee

Payable to US Treasury

Winding Down Expenses

Actual (12/6/96 - 12/31/97)

Estimated (1/1198-12/31/99)

Total Liabilities

Net Outstanding Qualifled Campaign Expenses (Deflcit)

$ 500

1,694,972 at

1,775,709

216,477

51,878 bl

3,739,536

3,472,186 cl

770,924 dl

309,447 el

3,985 fl

801,747

1,200,000

6,558,289

($2,818,753) gl
•

Exhibit I

Page 2 of3

FOOTNOTES TO STATEMENT OF NET OUTSTANDING QUALIFIED CAMPAIGN

EXPENSES

a) Stale-dated checks totaling $5,359, representing expenses incurred on or prior to the

end ofthe Expenditure Report Period have been added back into cash in bank (see

Finding III.D.).

b) Represents $12,427 in convention related and pre-DOl travel paid by the General

Committee that should have been paid by the Primary Committee (see Finding

I1I.B.I.) and $39,45 I in sublease payments received and deposited by the Primary

Committee, whereas such payment should have been deposited by the General

Committee (see Report ofthe Audit Division on Clinton/Gore '96 Primary Committee,

Inc. at Finding III.D.4.b.).

c) Represents payments for qualified campaign expenses.

d) Includes disputed debt of approximately $592,808 which, according to the General

Committee, a portion has been resolved. However, no documentation has been made

available to substantiate such resolution.

e) Represents an amount due the Primary Committee for payments it made on an AT&T

telephone lease ($63,736), GTE refund ($439) and Bismark Enterprises ($22,984) and

Morris and Carrick ($30,000). Also includes payments made by the Primary

Committee after DOl for salary and overhead ($192,288) (see Report ofthe Audit

Division on Clinton/Gore '96 Primary Committee, Inc. at Findings III.B.I.a., b., c.,

and III.B.2. and III.D.).

f) Represents interest income earned (see Finding III.C.).

g) The deficit noted ($2,818,753), once adjusted agrees with the Audit staff's calculation

of expenditures made in excess ofthe limitation ($581,910).
Adjusted NOQCE - Deficit

NOQCE - Deficit

Adjustments

Add: Actual winding down expenses (10/1/97-12/3 1/97)

Estimated winding down expenses (1/1/98-12/31/99)

Transfer from GELAC to General Committee

Audit Adjustment

Less: Unliquidated capital assets ($216,477 - 41,956)'

Exhibit 1

Page 3 of3

($2,818,753)

147,233

1,200,000

1,000,000

64,131

(174,521)

($581,910)

1 The General Committee reported it received $90,605 from the sale of assets subsequent to the close of

the expenditure report period, Although requested, the General Conunitlce did not provide

documentation which demonstrated what portion of the $90,605 represented the sale of capital assets

versus the sale of non-capital assets, Our analysis viewed the reported "sale of assets" in excess of $1 ,200

($2,000 - 40% depreciation)! or $41,956 as related to the sale of capital assets, Accordingly, ifthe actual

sale of capital assets were hi;gher, the unexplained difference would be reduced in a like amount
FEDERAL ELECTION COMMISSION

WASHINGTON. [) C 204".1

June 16, 1999

MEMORANDUM

TO:

FROM:

SUBJECT:

RON M. HARRIS

PRESS OFFICER

PRESS OFFICE

ROBERT 1. COSTA

ASSISTANT STAFF DIRECTOR

AUDIT DIVISION

PUBLIC ISSUANCE OF THE FINAL AUDIT REPORT ON

CLINTON/GORE '96 GENERAL COMMITTEE, INC., AND

CLINTON/GORE '96 GENERAL ELECTION LEGAL AND

ACCOUNTING COMPLIANCE FUND

Attached please find a copy ofthe final audit report and related documents on

Clinton/Gore '96 General Committee, Inc., and Clinton/Gore '96 General Election Legal

and Accounting Compliance Fund which was approved by the Commission on June 3,

1999.

Informational copies ofthe report have been received by al1 parties involved and

the rep0l1 may be released to the public.

Attachment as stated

cc: Office ofGeneral Counsel

Office of Public Disclosure

Reports Analysis Division

FEC Library
" >.'

. ? E[., [::\ .l". : ._. '- _. ' \ '.', r';

i>':' .': " ':: (~ :, ; .... ...., .,'

FEDERAL ELECTION COMMISSION

WASHINGTON. DC. 20463

September 7, 1999

SUBJECT: REPAYMENTS RECEIVED FROM CLINTON/GORE '96 PRIMARY

COMMITTEE, INC. & CLINTON/GORE '96 GENERAL COMMITTEE,

INC.

TO:

THROUGH:

FROM:

THE COMMISSION

ru

f\~ '"'

On August 12,1999 the subject committees submitted their responses to the audit

reports approved by the Commission. In the case ofthe Clinton/Gore 1996 primary

campaign, a check in the amount of$11,180, payable to the United States Treasury, was

included to satisfy the amount due the Treasury related to stale-dated checks.' The

repayment ($114,450) related to non-qualified campaign expenses cited in the audit

report was obviated by virtue ofthe primary campaign having made or received

reimbursements to/from the general campaign as discussed in the audit report.

With respect to the Clinton/Gore 1996 general campaign a check in the amount of

$3,241, payable to the United States Treasury, was included to satisfy the amount due the

Treasury related to interest earned (less applicable taxes). The repayment ($12,427)

related to non-qualified campaign expenses cited in the audit report was obviated by

virtue ofthe general campaign having received a reimbursement from the primary

campaign as discussed in the audit report.

Photocopies of the receipts indicating delivery of the repayment checks to the

United States Treasury are attached. If you have any questions, please contact Ray Lisi

Dr Tom Nurthen at 694-1200.

Attachments as stated

I The amount ($12,230) cited in the audit report was adjusted to aCCQunt for $1.050 in checks which cleared the bank, leaving

SII.180 due the Treasury.
FEDERAL ELECTION COMMISSION

WASHING TON. 0 C ,O·\fd

•

ru

ru

August 31, 1999

RECEIPT FROM THE

UNITED STATES DEPARTMENT OF TREASURY

FORA

PAYMENf TO THE GENERAL FUND OF THE U. S. TREASURY

Received on August 31, 1999 from the Federal Election Commission (by

hand delivery) a check drawn on Nations Bank, N. A. for $3,241.00.

The check represents a payment for interest income on federal funds

from the Clinton/Gore '96 General Committee, Inc.

The payment should be deposited into the General Fund of the

U. S. Treasury.

ClintonlGore '96 General Committee, Inc.

Amount of Payment: $3,241.00

Presented by: Received by:

jJldJ8d!4 for the

United States Treasury
FEDERAL ELECTION COMMISSION

WASIIINGlON. DC :1l"1.,1

. ,

•

August 31, 1999

RECEIPT FROM THE

UNITED STATES DEPARTMENT OF TREASURY

FORA

PAYMENT TO THE GENERAL FUND OF THE U. S. TREASURY

Received on August 31, 1999 from the Federal Election Commission

(by hand delivery) a check drawn on Nations Bank, N. A. for $11,180.

The check represents a payment for stale dated checks from

Clinton/Gore '96 Primary Committee, Inc.

The payment should be deposited into the General Fund ofthe

U. S. Treasury. .

Clinton/Gore '96 Primary Committee, Inc.

Amount of Payment: $11,180

Presented by: Received by:

trkU!l~ for the

United States Treasury
FEDERAL ELECTION COMMISSION

Washington, DC 20463

•

•

MEMORANDUM

TO:

FROM:

DATE:

SUBJECT:

Commissioners

Staff Director Pehrkon

General Counsel Noble

Press Office Ron Harris @~

Mary W. DoveNeneshe Ferebee-Vine

Commission Secretary

JUly 6, 1999

Statement for the Record in Audits of

1996 Clinton/Gore and Dole/Kemp Campaigns

Attached is a copy of the Statement of Reasons regarding

Audits of 1996 Clinton/Gore and DolelKemp Campaigns signed by

Chairman Scott E. Thomas and Commissioner Danny Lee McDonald.

This was received in the Commission Secretary's Office on July 6, 1999

at 11 :42 a.m.

cc: V. Convery

Attachments
FEDERAL ELECTION COMMISSION

W ~SHI"'C TO"- D C ~04b3

•

Statement for the Record in Audits of

1996 Clinton/Gore and Dole/Kemp Campaigns

Chairman Scott E. Thomas

Commissioner Danny L. McDonald '.

Our colleagues, Commissioners Sandstrom, Wold, Elliott and Mason•

recently joined in what must be seen as a very odd Statement of Reasons

regarding the audits of the 1996 Clinton and Dole campaigns. 1 Little is written of

the audits. Instead, the thrust of their statement is a tirade against an innocuous

shorthand reference the Commission coined in Advisory Opinion 1985-142 to

analyze whether party communications are subject to the statutory limits on

support of particular candidates. The energy expended by our colleagues to

savage the Commission's own advisory opinion process is surprising. The -

strangest aspect of the Sandstrom et a/. Statement. though, is that it claims to

abhor vagueness but, in the end, is itself very confusing.

We write this Statement to explain the state of the law in this area, and to

clarify that the Sandstrom et a/. Statement does not effect a 'sea change' when

analyzing which party ~ommunications should be subjected to the statutory limits

on coordinated expenditures. In particular, we wish to emphasize that 'express

advocacy' is not required.

I.

The limits on coordinated expenditures by party committees on behalf of

their candidates have been on the books for over 24 years. They were part of

the Federal Election Campaign Act Amendments of 1974.3 In addition to the

, Statement of Reasons of Vice Chairman Wold and Commissioners Elliott, Mason and Sandstrom

issued June 24, 1999 (hereinafter ·Sandstrom ef al. Statemenr).

2 Fed. Elec. Camp. Fin. Guide (CCH Transfer Binder), 1]5819.

3 Pub. L. 93-443, 88 Stat. 1263, § 101.
55.000 per election contribution limit available to all political commitlees,'parties

have coordinated expenditure allowances permitting additional spending in

connection with the general election campaigns of their candidates. 5

The party coordinated expenditure limits serve an important role in

preventing party donors from having an indirect way of effecting a 'quid pro quo'

arrangement with candidates for federal office- the link between money and

official government action the statute is designed to prevent. If a party

committee is able to undertake only a limited amount of coordinated expenditure

activity on behalf of a particular candidate, donors or groups of donors will not be

able to expect large-scale donations to the party to result in large-scale spending

by the party on behalf of such candidate. For example, ten banking industry

PACs who donate $15,000 each to a party's House campaign committee and

who are close to a particular House committee chairman running for reelection

would not be able to expect $150,000 in coordinated expenditures by the party

on behalf such candidate because the coordinated expenditure limit would

prevent it.

The direct payment of funds to a candidate's campaign has been treated

as a "contributionn6 SUbject to the contribution limit. A party's coordinated

payment to a third party on behalf of a candidate has been treated as either an

in-kind ·contribution" or a coordinated "expenditure,n7 at the option of the

expending committee.s If treated as a coordinated expenditure, the party has to

4 Currently codified at 2 U.S.C. § 441a(a)(2)(A).

511 C.F.R. § 110.7(a)(3). (b)(3). Codified at 2 U.S.C. § 441a(d), the coordinated expenditure

allowance provides:

Notwithstanding any other provision of law with respect to limitations on expenditures or

limitations on contributions, the national committee of a political party and a State

committee of a political party. including any subordinate committee of a State committee.

may make expenditures in connection with the general election campaign of candidates

for Federal office, subject to the limitations contained in paragraphs (2) and (3) of this

subsection.

Subsections (2) and (3) sel forth formulas that in the last presidential election pennitted a national

party committee to spend over $12 million on behalf of its presidential candidate. and that in the

1998 congressional elections permitted a national and state party committee each to spend

$32,550 for a House candidate and each to spend amounts ranging from $65,100 in small stales

like Wyoming to over $1.5 million in California for a Senate candidate.

62 U.S.C. § 431 (8).

72 U.S.C § 431(9}.

B FEe Campaign Guide for Party Committees (1996) at 16. The FEC for many years operated

with a presumption that all party spending was coordinated with the parties' eventual nominees.

11 C.F.R. § 110.7(a)(5). (b)(4) (1996). The Supreme Court invalidated that presumption in

CoIQLa.doJ~~ublican Federal Campaign Committee v. FEC, 518 U.S. 604 (1996) (hereinafter

"Colorado I"). As a result, only party spending that can be sl10wn to meet the legal test of

'coordination' can be subjected to the limits at 2 U.S.C. § 441 a(a)(2)(A) and (d). The legal test for

coordination is set forth at 2 US.C. § § 431(17) and 441a(a)(7)(8) and at 11 C.F.R. § 109.1(b)(4)

and (d)(1).

2
keep within the coordinated expenditure limit, but only the party need report the

transaction. 9

Because party committees are primarily in the business of electing

candidates, the Commission has required virtually all party-building activity to be

at least allocated so that indirect federal candidate support is not paid for with

funds not permitted under federallaw. 10 At the same time, recognizing party

committees sometimes undertake generic party-building activities that may help

their candidates only in a general way- a way that should not result in a

contribution to or coordinated expenditure on behalf of a particular candidatethe Commission has tried to clarify when a party activity need not be sUbjected to

a candidate-specific limitation. Thus, the Commission has specified at 11 C.F.R.

§ 106.1 (c) that an expenditure for rent, personnel, overhead, general

administrative costs, educational campaign seminars, training of campaign

workers, or registration or get-out-the-vote drives need not be attributed to

individual candidates unless the expenditure is "made on behalf of a clearly

identified candidate, and the expenditure can be directly attributed to that

candidate."

\Nhen identifying which party activities fall under the candidate-specific

limits, though, the Commission must deal first and foremost with the underlying

statutory terms. A "contribution" is a payment or gift of value made "for the

purpose of influencing any election for Federal office."'1 A coordinated

"expenditure" is a payment, advance or gift of anything of value made "for the

purpose of influencing any election for Federal office" and "in connection with the

general election campaign" of a candidate for Federal office.12

Over the years, the Commission has grappled with the difficult factual

distinctions that make a party communication a generic party-building

expenditure on the one hand, or an in-kind contribution or coordinated

expenditure on the other. The best-known instances were Advisory Opinion

1984-15'3 and the aforementioned Advisory Opinion 1985-14. In each of those

opinions, the Commission analyzed the facts according to the basic underlying

statutory provisions cited above.

In Advisory Opinion 1985-14, the Commission developed a shorthand

reference to the legal analysis to be used. Instead of repeating the statutory

phrases, "for the purpose of influencing" and "in connection with," the

Commission described the process as a search for whether the communication

9 11 CF.R. § 104.3(a)(3)(iii). 10 11 C.F.R. § 106.5.

11 2 U.S.C. § 431(8). 12 2 U.S.C. §§ 431(9) and 441a(d}.

13 Fed. Elec. Camp. Fin. Guide (CCH Transfer Binder), '115766

3
contained an "electioneering message." 14 The Commission then cited a

Supreme Court decision for further guidance as to what was meant by

"electioneering message."'5 There, the Court simply described its view of the

reach of the corporate and union prohibition at 2 U.S.C. § 441 b: whether a

communication is "designed to urge the public to elect a certain candidate or

party. "16 This phrasing, of course, is virtually indistinguishable from the "for the

purpose of influencing any election for Federal office" language at the heart of

any "contribution" or "expenditure" inquiry. Thus, at most, the Commission in

Advisory Opinion 1985-14 was paraphrasing the statutory language underlying

any coordinated party expenditure analysis.

II.

Our colleagues grossly overstate the significance of the "electioneering

message" phrase and then gyrate into an inappropriate constitutional hypothesis

regarding the vagueness of that phrase and other phrases used in Advisory

Opinions 1984-15 and 1985-14. Along the way, they grumble about perceived

improper rulemaking through the advisory opinion process.

A.

Dealing with the last 'red herring' first, to our knowledge no commissioner

has been confused about the legal effect of advisory opinions. While advisory

opinions clearly have binding consequences, the statute is clear that general

rules of law have to emanate from the statute or from regulations of the

Commission. 17 Nonetheless, our colleagues seem convinced that the

Commission's use in Advisory Opinions 1984-15 and 1985-14 of paraphrases

and synonyms for the statutory test was, in fact, the creation of a new

substantive rule of law. 18 The reality, of course, is that there are only so many

words in the English language, and after citing the underlying statutory

provisions, the Commission simply attempted to explain the legal test in other

helpful ways.19

,. Fed. Elee. Camp. Fin. Guide (CCH Transfer Binder), 'lJ5819 at 11,185.

'5 United States v, United Auto Workers, 352 U.S. 567 (1957) (hereinafter "UAW').

16 Id, At 587.

" 2U.S.C. §437f(b).

'8 At one point our colleagues call the phrases used a "tesf and at other times they refer to them

as an "amalgam.' Sandstrom el al. Statement at 2 and 4.

'9 lest our colleagues be struck down by a bolt of lightning for insinuating they would never stoop

to helpfUl descriptions of the underlying statutory and regulatory provisions, they should concede

that only recently in Advisory Opinion 1999-11, they engineered a description of the statute's

reach that depended on Whether there was "any campaign activity' at the event in question. See

Memorandum from Commissioner Sandstrom, Agenda Doc. No. 99-61-A; Advisory Opinion 1999-

11 (unpublished) at 3.

4
Thus, our colleagues have felled a demon they didn't need to imagine in

the first place. The regulated community has had notice of the underlying

statutory provisions at 2 U.S.C. §§ 431(8) and (9) and 441a(d) all along.

Advisory Opinions 1984-15 and 1985-14 neither expanded nor diminished those

underlying rules of law.

Interestingly, our colleagues do not purport to supersede Advisory

Opinions 1985-14 and 1984-15, but rather disagree with the phrasing of the legal

analysis therein. We take that to mean the Commission's conclusions regarding

specific proposed ads in those opinions still serve as valid legal precedent in

terms of the underlying statute. For example, a party committee that ran ads

under materially indistinguishable circumstances could 'rely upon' the

conclusions reached by a majority of commissioners in those opinions in

determining whether the ads would be a coordinated expenditure or not. 20 This

rightly diminishes the negative impact of our colleagues' statement and suggests

only that the Commission cease using the pesky "electioneering message"

phrase when explaining its interpretations under the statute.

We must address our colleagues' suggestion that an advisory opinion

may not be used as a "sword of enforcement." Sandstrom et al. Statement at 3.

Apparently, they disregard the statutory language quoted in the previous

footnote. Someone who receives an advisory opinion that certain conduct would

be illegal, as well as anyone in materially indistinguishable circumstances, surely

may 'rely on' that legal conclusion to file a complaint against someone else

engaging that conduct. Essentially, that is what happened when Democratic

Party representatives received a response in Advisory Opinion 1985-14 that

certain targeted communications attacking a likely opponent would be

coordinated expenditures subject to limit. Other Democratic Party

representatives then filed a complaint against the Colorado Republican Party

regarding certain ads that attacked the likely Senate nominee, Tim Wirth. That

enforcement case became the SUbject of the Supreme Court's decision in

Colorado I, supra.

Our colleagues may have missed the fact that the 10ltt Circuit in that

case upheld the FEC's use of Advisory Opinion 1985-14 (even its

"electioneering message" phrase) to bolster its c1airn. 21 Although the Supreme

Court vacated the 10th Circuit's opinion on other grounds. Colorado I, this is a

strong indication advisory opinions can be used as a "sword:

20 The statute provides that any advisory opinion rendered by the Commission"may be relied

upon" by the person to whom the opinion is issued or by 'any person involved in any specific

transaction or activity which is indistinguishable in all its material aspects ... ." 2 U.S.C. §

437f(c){ 1).

21 FEe v. Colorado Republican F_ederal CamQ.'i.ign CQmmittee, 59 F. 3d 1015 (10'" Cif. 1995).

5
This proposition is supported by a 9'" Circuit decision, a case our

colleagues cite but misconstrue. 22 There, in a successful enforcement action

against a committee that accepted excessive contributions, the FEC used its

advisory opinion precedent as a 'sword: and the court specifically sanctioned

this approach. 23

The courts have strongly indicated the Commission is bound to apply its

advisory opinion precedent consistently.24 We caution our colleagues not to get

so agitated over the use of paraphrases and shorthand references in prior

advisory opinions that they issue statements undermining the ability of the

agency to enforce the law.

B.

Our colleagues go well beyond their role as commissioners by opining

about the possible unconstitutional vagueness and overbreadth of the words

"electioneering message."25 First, as just explained, everyone should agree that

"electioneering message" is not a rule of law and, hence, it is not the proper

focus of any constitutional debate. Second, even if it were, Commissioners are

not members of the judiciary entitled to render their own rules unconstitutional. 26

It is one thing to interpret the statute in an advisory opinion, or to interpret the

22 FEe v. Ted Haley Congressional Committee, 852 F.2d 1111, 1115 (9'" Cir. 1988) (hereinafter

"Haley") ("interpretation of FECA by the FEC through its regUlation and adVisory opinions is

entitled to due deference and is to be accepted by the court unless demonstrably irrational or

clearly contrary to the plain meaning of the statute').

23 We cannot fathom our colleagues' attempt to distinguish Haley. They appear to argue the

court's reliance on advisory opinions is insignificant because there happened to be a relevant

regulation to apply as well. Sandstrom et al. Statement at 4, n. 9. As our colleagues well know,

the existence of a regulation is not essential 10 the legal value of an adVisory opinion. The law, 2

U.S.C. § 437f(a), specifically contemplates advisory opinions applying the statute as well-- just as

was the case in Advisory Opinions 19B4-15 and 1985-14. As precedent, such opinions may be

"relied upon" just as much as advisory opinions applying a regulation. 2 U.S.C. § 437f(c).

24 See Common Cause v. FEC, 676 F. Supp. 286 (D. D.C. 1986) (certain FEC commissioners,

including Commissioner Elliott, ordered to issue statement of reasons in dismissed enforcement

case where advisory opinion precedent seemingly inconsistent); ~.Qmmon Cause v. FEC, Fed.

Elec. Camp. Fin. Guide (CCH Transfer Binder), 11 9263 (D.D.C. 1988) (related case noting, "The

importance of respect for the Rule of Law ... requires that courts be vigilant to ensure that in the

process 'prior policies and standards are being deliberately changed, not casually ignored.'").

25 Sandstrom et al. Statement at 4.

2l; Commissioners have an obligation to seek compliance with the statute passed by Congress. 2

U.s.C. § 437c(b)(1). The D.C. Circuit /las stated, "[A]dministrative agencies ... cannot resolve

constitutional issues." ~[!)~dfED-.Q.oalili.Q.n for-.Q.9..rr:)Q..~itive Tri!Qe v. Clinton, 128 F.3d 761, 766 n. 6

(D.C. Cir. 1997). See also, .sUbert v. National Transportation Safety Board, 80 F.3d 364, 366-67

(91n Cir. 1996) ('challenges to the constitutionality of a statute or a regUlation promulgated by an

agency are beyond the power or the jurisdiction of an agency").

6
statute through a clarifying regulationY It is altogether different to opine that a

mere shorthand reference used to paraphrase the statute is unconstitutional. 28

That said, we believe it important to note a fundamental flaw in our

colleagues' 'judicial detour.' Their reliance on Supreme Court analysis of

independent spending provisions is simply inapposite, In the area of

coordinated expenditures, there is no basis for applying the "express advocacy"

standard created in Buckley29 and FEC_v. Massachusetts Citizens for Life30

where independent disbursements were at issue. Indeed, Buckley could not

have been clearer that its "express advocacy" test did not apply to coordinated

expenditures. When analyzing former 18 US.C. § 608(e), the independent

expenditure limit struck down by the Court, the per curiam opinion noted:

The parties defending § 608(e)(1) contend that it is necessary to prevent

would-be contributors from avoiding the contribution limitations by the

simple expedient of paying directly for media advertisements or for

other portions of the candidate's campaign activities. They argue that

expenditures controlled by or coordinated with the candidate and his

campaign might well have virtually the same value to the candidate as a

contribution and would pose similar dangers of abuse. Yet such

controlled or coordinated expenditures are treated as contributions

rather than expenditures under the Act. [footnote omitted] Section

27 The D.C. Circuit has noted that the advisory opinion process provides an opportunity "to reduce

uncertainty or narrow the statute's reach" and that "the susceptibility of the [Federal Election

Campaign Act] to challenge on the grounds of vagueness has consequently been reduced."

Martin Tractor Co. v. FEe, 627 F.2d 375, 386 (D.C. Cir.), cert. denied, 449 U.S. 954 (1980).

28 This would apply, as well, to our colleagues' constitutional analysis of other phrases used at one

time or another by the Commission to explain the application of the underlying statutes, such as

whether the communication would "tend to diminish support for one candidate and garner support

for another candidate." Sandstrom et a/. Statement at 4, n. 11. discussing Advisory Opinion 1984-

15.

We are baffled by our colleagues' suggestion that the Supreme Court's phrase in UAW

("designed to urge the public to elect a certain candidate or party") is but "charming" and of little

"practical use" because it dates back to the days of a '57 Chevy. Sandstrom et al. Statement at

5, n. 13 That might explain why the old case of Marbury v. Madison, 5 U.S. 137, 178 (1803) (It is

for Article III judges to consider constitutional disputes and "say what the law is."), is of little value

to them. More importantly, because the phrasing used in J)AW is so close to the current language

of the statute governing coordinated expenditures ("for the purpose of influencing any election for

Federal office"), we hope our colleagues are not suggesting the latter is unconstitutionally vague.

In Buckl~ v. Valeo, 424 U.S. 1(1976), the Court made crystal clear that it viewed the phrase "for

the purpose of influencing" in the context of coordinated expenditures to be free of constitutional

vagueness concerns ("We construed [the term 'contribution' which relies on a 'for the purpose of

influencing' test) \0 include ... expenditures placed in cooperation With or with the consent of a

candidate.... So defined, 'contributions' have a sufficiently close relationship to the goals of the

Act, for they are connected with a candidate or his campaign."). 424 U.S. at 78, referring back to

n 24 at 23.

29 424 U.S. at 42-44, 76-82.

30 479 U.S. 238, 249-50 (1986) (hereinafier "MCFL").

7
•

608(b)'s contribution ceilings ... prevent attempts to circumvent the Act

through prearranged or coordinated expenditures amounting to disguised

contributions. By contrast, § 608(13)(1) limits expenditures for express

advocacy of candidates made totally independently of the candidate

and his campaign. 31

Similarly, in MCFL, the Court made clear that its "express advocacy" construction

need only apply to the provision in 2 U.S.C. § 441b "that directly regulates

independent spending."32

Ill.

We can only hope our colleagues' statement does not get misconstrued

by the regulated community and the courts. We note with interest, for example,

that one business day after our colleagues' statement was circulated at the

Commission, counsel for the defendant in FEC v. Christian Coalition33 filed a

pleading suggesting its relevance to the issue in that case: whether a

corporation made in-kind contributions or independent expenditures prohibited

under 2 U.S.C. § 441 b. In fact, no allegation in that case involves a claim that

depends on the phrase "electioneering message:~

3' 424 U.S. at 46,47. See also Buckley at 78-80 (defining coordinated expenditures as

"contributions' and defining non-coordinated "expenditures' covered by former 2 U.S.C. § 434(e)

to reach only communications containing 'express advocacy').

J2 479 U.S. at 249.

33 No. 96-1761 (O.o.C., filed 1996).

34 Interestingly. the Commission passed a regulation in 1995 that implements 2 U.S.C. § 441b as it

relates to certain voter guides. It uses the phrase 'electioneering message: Specifically, for

voter guides prepared with the candidates' cooperation and participation, the regulation specifies

that such guides ·shall not score or rate the candidates' responses in such way as to convey an

electioneering message." 11 C.F.R. § 114.4(c)(5)(ii)(E). As it post-dates the activities at issue in

FEC v. Christian Coalition. supra. it should nOl enter the debate there, but that has nol stopped

the defendant's counsel. For activities properly SUbject to this regUlation, we can only ponder

what our colleagues will say.

8

.'
The confusion generated by our colleagues is regrettable. While the

Commission's efforts to apply the in-kind contribution and coordinated

expenditure provisions in the statute must focus, as always, on the words of the

statute, surely a great deal of energy now will be expended on what to make of

the banning of the innocuous "electioneering message" phrase. The answer is,

"not much." Sadly, a lot of explaining will be required to get there.

7Alff--_._-

Date

Date

9

~~~- Scott E. Thomas, Chairman

~~oc~~ Danny L~cDonaki.ommissioner ~.;ry4
FEDERAL ELECTION COMMISSION

WASHINGTON. 0 C ~04o)

•

MEMORANDUM

TO:

FROM:

DATE:

SUBJECT:

Commissioners

Staff Director Pehrkon

General Counsel Noble

Mary

Press

W.

Officer

Dove/Lisa

Harris

R. Da

®

is

Acting Commission Secre

June 25, 1999

Statement of Reasons for the Audits of

Clinton/Gore '96 and Dole/Kemp '96.

Attached is a copy of the Statement of Reasons in the Audits of

Clinton/Gore '96 and Dole/Kemp '96 signed by Vice-Chairman Darryl R.

Wold, Commissioner Lee Ann Elliott, Commissioner David M. Mason and

Commissioner Karl J. Sandstrom. This was received in the Commission

Secretary's Office on Thursday, June 24. 1999 at 3:47 p.m.

cc: V. Convery

Attachment
Pursuant to 26 U.S.c. §§ 9038(a) and 9007(a), the Federal Election Commission

("the Commission") audited the "Dole For President Committee, Inc.," the "Clinton/Gore

'96 Primary Committee, Inc.," "DolelKemp '96, Inc.," the "DolelKemp '96 Compliance

Committee, Inc.," the "Clinton/Gore '96 General Committee, Inc." and the "Clinton/Gore

'96 General Election Legal And Compliance Fund." In doing so, our Audit Division and

Office of General Counsel (collectively the "staff') analyzed media advertisements the

Democratic and Republican National Committees (collectively "the parties") ran during

1995 and 1996. The purpose ofthis analysis was to determine whether the cost ofthese

advertisements constituted in-kind contributions (coordinated expenditures) by the parties

on behalf of their respective presidential candidates' committees (which, among other

things, could have caused the presidential committees to exceed their primary or general

election spending limits in violation of2 U.S.c. § 441a(b».

FEDERAL ELECTION COM,\11SSI0N

STATEMENT OF REASONS of

VICE CHAIRMAN DARRYL R. WOLD and

COMMISSIONERS LEE ANN ELLIOTT,

DAVID M. MASON and,

KARL J. SANDSTROM

On The Audits Of

"DOLE FOR PRESIDENT COMMITTEE, INC." (pRIMARY),

"CLINTON/GORE '96 PRIMARY COMMITTEE, INC.,"

"DOLEIKEMP '96, INC." (GENERAL),

"DOLE/KEMP '96 COMPLIANCE COMMITTEE, INC." (GENERAL),

"CLINTON/GORE '96 GENERAL COMMITTEE, INC.," and

"CLINTON/GORE '96 GENERAL ELECTION

LEGAL AND COMPLIANCE FUND"

In analyzing these advertisements, I the staff examined their content for the

presence of two factors to determine whether the advertisement were "for the purpose of

influencing" an election for Federal office, as that phrase is used in 2 U.S.c. § 431 (8)(A)

("contribution") and (9)(A) ("expenditure"): Whether the advertisements referred to a

"clearly identified candidate" and whether they contained an "electioneering message.'"

, See. e.g., "Report of the Audit Division On the Dole For President Conuninee. Inc. (Primary)" ("Report

on DFP"), Agenda Document 98-87, I 1/19/98 at 14 & 50; "Report of the Audit on Clinton/Gore '96

Primal)' Comminee, Inc." ("Report on CGP"), Agenda Document 98-85,11/19198 at 10, 32-35 & 36-38.

2 The sta ff cited Advisory Opinions ("AO") 1984-15 and 1985-14 as the authority for using "electioneering

message" as a test of the content of a communication. Only AO 1985-14 used that phrase, and it did so in

erroneously concluding that the Commission had employed the "electioneering message" test in AO 1984-

15, see AO 1985-15 at 7; in fact, those words never appear in AO 1984-15. See footnote eleven, infra, for

a discussion of the problems with the staffs interpretation ofthese opinions.
Because the staff found that both factors were present,' the staff recommended that the

Commission determine that the costs ofthe advertisements were in-kind conuibutions

fTom the parties to their respective presidential campaign committees: The staff also

recommended that the Commission detelmine that the applicable spending limits were

exceeded based in part on the cost ofthe advertisements, and that the Commission require

a repayment ofpresidential matching funds. For various reasons, the Commissioners

unanimously rejected the staffs repayment recommendations.

We write here to express our disagreement with the use of "electioneering

message" as a test to determine whether conmmnications are "for the purpose of

influencing" elections and, therefore, constitute expenditures or contributions under the

Federal Election Campaign Act ("FECA"). Specifically, we agree that: (1) The phrase

"electioneering message" cannot serve as a substantive test to describe the content of

communications that are "for the purpose ofinfluencing" an election because it is derived

only from advisory opinions and is not found either in the FECA or in regulations

promulgated by the Commission in accordance with the rulemaking procedures specified

in the FECA; and (2) The phrase "electioneering message" cannot be used as a shorthand

expression ofthe Commission's interpretation ofthe statutory standard of "for the

purpose ofinfluencing" an election because the advisory opinions from which the phrase

is drawn do not convey a clear and consistent application ofthe statutory standard, and

the phrase, standing alone, is both too vague and too broad to have a sufficiently definite

meaning. Therefore, we conclude that the phrase "electioneering message" should not be

used to describe the content of communications which the Commission would determine

to be "for the purpose ofinfluencing" an election to Federal office.

Procedural Defects With Employing The "Electioneering Message" Standard

Congress included an express prohibition in the FECA against the Commission

using advisory opinions to establish rules of conduct. Subpart (b) of2 U.S.c. § 437f, the

section governing the use ofsuch opinions, provides that the Commission may employ

rules oflaw that are not set forth in the FECA only if it complies with the procedures set

forth in 2 U.S.c. § 438(d) in promulgating them.s By necessary implication, subpart (b)

of § 437fprohibits the Commission from using advisory opinions as nIles oflaw, for the

'See, e.g., Report on DFP, Agenda Document 98-87, 11119/98 at 50; Report on CGP, Agenda Document

98-85,11/19/98 at 38.

4 See, e.g., Report on DFP, Agenda Document 98-87,11119/98 at 52; Report on CGP. Agenda Document

98-85, 11119/98 at 43.

, See id. at § 437f(b) ("Any rule of law which is not stated in this Act or in chapter 95 or chapter 96 of title

26 may be initially proposed by the Commission only as a rule or regulation pmsuant to procedures

established in section 438(d) of this title."}; United Slates Defense Committee v. Federal Election

Commission, 861 F.2d 765, 771 (2"' Cir. 1988) (USDC) (citing 2 V.S.c. § 438(d)} ("A nJle oflaw may

initially be proposed by the Commission only as a rule or regulation pursuant to very elaborate procedures

involving submission ofthe rule or regulation to the Congress."),

2
=' El

Commission does not follow the requirements of 2 U.S.c. § 438(d) in drafting such

opinions; instead, it follows the requirements of § 437f. 6

As a result, the Commission may not use advisory opinions as a substitute for

rulemaking. Rulemaking is not simply the preferred method for filling in gaps in the

FECA. It is the required method. 2 U.S.C. § 437f(b), note five, supra. Where the law is

of uncertain application, advisory opinions cannot be used as a sword of enforcement.

See generally id. The regulated community can, however, use advisory opinions as

shields against Commission enforcement actions in appropriate circumstances. 2 U.S.C.

§ 437f(c).

Advisory opinions are binding only in the sense that they may be relied on

affirmatively by any person involved in the specific transaction or activity

discussed in the opinion or in any materially indistinguishable transaction or

activity.... On the other hand, to the extent that the advisory opinion does

not affirmatively approve a proposed transaction or activity, it is binding on

no one-not the Commission, the requesting party, 01' third parties.'

This reading ofthe FECA's rulemaking requirements, of course, does not prevent

the Commission from enforcing the FECA in novel or unforeseen circumstances. It only

requires that, absent controlling regulations or the authoritative interpretations of the

courts, the Commission's enforcement standard be the natural dictate ofthe language of

the statute itself.8

The threshold problem with the "electioneering message" standard, then, is that it

is not a rule. It is only a shorthand phrase that purports to describe the Commission's

reasoning in two advisory opinions. See note two, supra. The phrase is not defined in

either ofthose opinions. In fact, it does not appear at all in one ofthem. Rather than

being promulgated pursuant to the requirements ofthe FECA (see 2 U.S.c. §§ 438(d) and

6 See 2 U.S.C. § 437f(b) (u... No opinion of an advisory nature may be issued by the Commission or any

of its employees except in accordance with the provision of this section [i.e., § 437f].").

7 USDC, 861 F.2d at 771 (emphasis added) (citing 2 U.S.C. §§ 438(d) and 437f(b)&(c»; see also Weber v.

Heaney. 793 F. Supp. 1438, 1452 n. 9 (D. Minn 1992) (" ... Commission advisory opinions are binding in

the sense that they may be relied upon affimlatively by any person involved in the specific transaction or

activity discussed in the opinion or in any materially indistinguishable transaction or opinion."), aff'd. 995

F.2d 872 (8~ Cir. 1993); Stockman v. Federal Election Commission. 138 F.3d 144, 149 n. 9 (5'" Cir. 1998)

(same). Some argue that Orloski v. Federal Election Commission. 795 F.2d 156 (D.C. Cir. 1986), supports

the contrary conclusion. Unlike USDC, however, Orloski did not address the FECA's clear prohibitions on

using advisory opinions as rules of conduct. Instead, Orloski analyzed the advisory opinions implicated

there for purposes of detennining whether the Commission's interpretation of the FECA was reasonable

and consistent and thus should be accorded deference. 795 F.2d at 164-167.

g See Sullivan v. Everhart, 494 U.S. 83, 89 (1990) (Scalia, J.) (quoting Chevron U.S.A.. Inc. v. Natural

Resources Defense Council, Me., 467 U.S. 837, 843 (1984) and National Labor Relations Board v. Food

and Commercial Workers. 484 U.S. 112, 123 (1987)) ("'[Ilf the statute is silent or ambiguous with respect

to the specific issue, the question for the court is whether the agency's answer is based on a permissible

construction of the statute,' that is, whether the agency's construction is 'rational and consistent with the

statute. "').

3
437f(b) & (c)), the "electioneering message" standard is an amalgam of these advisory

opinions. Even at that, it is not the most natural, let alone the only reasonable, reading of

those opinions. In fact, it is difficult to draw any clear meaning from a comparison or

combination of AOs 1984-15 and 1985-14 (see "Substantive Difficulties," infra).

As a result, the regulated community most likely does not have lIolice as to how

this standard will govern its conduct, and it certainly did not have an opportunity to

comment on whether it should. Because of its procedural infirmities, the Commission

may not employ the phrase "electioneering message" as expressing a general rule for

determining whether communications are "for the purpose of influencing" a federal

election.9

Substantive Difficulties With The "Electioneering Message" Standard

Apart from its procedural infirmities, the "electioneering message" standard

suffers from serious problems of vagueness and overbreadth. As presented by the staff, a

communication satisfies this standard if it includes statements which are "designed to

urge the public to elect a certain candidate or party, 10 or which would tend to diminish

support for one candidate and garner support for another candidate." See, e.g., Report on

DFP, Agenda Document 98-87,11119/98 at 14 (citing AO 1984-15); Report on CGP,

Agenda Document 98-87, 11/19/98 at 10 (citing AO 1984-15)."

, Democratic Congressional Campaign Committee v. Federal Election Commission. 645 F. Supp. 169

(D.D.C. 1986), aff'd in pan and rev'd in parI. 831 F.2d 1131 (D.C. Cir. 1987) (DCCC) and Federal

Election Commission v. Ted Haley Congressional Commiflee. 852 F.2d 1111 (9" Cir. 1988) (Haley) do not

affect this conclusion, In DCCC, the Commission dismissed a complaint, contrary to the recommendation

of its General Counsel, without providing a statement of reasons for domg so when it appeared the

complaint alleged activity that satisfied the "electioneering message" standard. 645 F. Supp. at 170-171.

The Court, in an action brought pursuant to 2 U.S.C. § 437g(a)(8), was faced with the question of whether

the Commission had acted "contrary to law" for appearing to disregard its "electioneering message" test

without articulating any reason for doing so, id. at 171-174; the Coun was not faced with the issue here:

whether that test, itself, was validly established. In Haley, the Court noted that the Commission's

interpretation of the FECA in its regulations and advisory opinions was entitled to due deference. 852 F.2d

at IllS. But all the advisory opinions to which that Court referred interpreted a Commission regulation,

id. at 1114-1115; they did not attempt to circumvent the FECA's clearrequirement thatfor rules of

conduct, the Commission have a regulation. See also Federal Election Commission v. Legi-Tech, 967 F.

Supp. 523, 529-530 (D.D.C. 1997) [Commission advisory opinions interpreted regulation).

10 The staff cites AO 1984-15 as authority for this phrase. This phrase, however, comes from 1985-14. See

id. at 7 (citing United States v. United Auto Workers, 352 U.S. 567, 587 (1957».

II There is substantial question as to whether the staffs analysis properly characterizes AO 1984-15. While

that opinion uses the phrases "diminish support" and "gamer support," id, at 5, it concludes that

advertisements which clearly identify presidential candidates of one party and include exhortations to

"vote" for another party "effectively advocate the defeat of a clearly identified candidate."!d. Whatever

distinction there may be between "effectively" and "expressly" advocating, the facts presented in that

advisory opinion bear similarities to the facts in Federal Election Commission v. Massachusetts Citizensjar

Life, Inc., 479 U.S. 238 (1986) (MCFL), and the Conunission's conclusion in AO 1984-15 and the court's

conclusion in MCFL can be read consistently. The staff suggests an extremely broad interpretation of AO

1984-15, citing the phrase "dimish [or] garner support." See Reports on DFP & CGP, supra. 11lat

opinion's facts. however, suggest a more narrow. and more natural, consmlction. similar to MCFL.

4
Such fOlmulations, the Supreme Court has held, offend the First Amendment. In

Buckley v. Va leo, 424 U.S. 1, 42-44 (1976), the High Court held as impermissibly vague

the "relative to ... advocating the election or defeat of[a clearly identified] candidate"

standard in 18 U.S.C. § 608(e) (1970) ofthe original FECA. The "diminish support for

one candidate" prong--like the "relative to" standard in the original FECA- is especially

problematic because "the distinction between discussion of issues and candidates and

advocacy ofelectioll or defeat ofcandidates may often dissolve in practical application."

Buckley. 424 U.S. at 42 (emphasis added)."

The factual question of what a particular statement was designed to do also gives

rise to vagueness problems. The fact that the term "electioneering" and the phrase

"designed to urge the public to elect a certain candidate or party" were plucked out of

context from a four-decade old Supreme Court opinion (United States v. Auto Workers,

352 U.S. 567 (1957) (UA W)) does not resolve the question. 13 First, it is clear that UA W

was not enunciating a constitutionally-permissible standard for regulating speech, but

describing a particular communication in the course of an opinion explicitly refusing to

reach a ruling on the constitutionality ofregulating the specific speech so described. See

id. at 591 (internal citation omitted) ("Clearly in this case it is not absolutely necessary to

a decision to canvass the constitutional issues. "). Second, the speech at issue in UAW

included specific endorsements of candidates. Jd. at 584. Third, the per curiam opinion

in Buckley cites the dissent in UA W, see 424 U.S. at 43 (citing UAW, 352 U.S. at 595-596

(Douglas, 1., dissenting)), which had urged that the FECA's predecessor statute be

declared unconstitutional as applied to the electioneering speech at issue in UAW.

The relationship, if any, ofthe two prongs of the "electioneering message" test

underscores the test's vagueness. Read narrowly, "urge the public to elect a candidate,"

AD 1985-14 at 7, could be construed as equivalent to communications "that expressly

"The "relative to" standard, on its face, was thus unhelpful in distinguishing between these two types of

speech. !d. As a result, to allow unfettered issue discussion while tegulating candidate advocacy, the

government, under this standard, had to attempt to divine the speaker's intent. !d. at 43. This, the Coun

noted, would not only be difficult, but dangerous.

Whether words intended and designed to fall shan ofinvitation would miss that mark is a

question both of intent and effect. No speaker, in such circumstances, safely could

assume that anything he might say upon the general subject would not be understood by

some as an invitation. In shan, the supposedly clear-cut distinction between discussion,

laudation, general advocacy, and solicitation puts the speaker in these circumstances

wholly at the mercy ofthe varied understanding of his hearers and consequently of

whatever inference may be drawn as to his intent and meaning. Such a distinction offers

no security for free discussion. In these conditions, it blankets with uncertainty whatever

may be said. It compels the speaker to hedge and trim.

[d. (quoting Thomas v. CoIlins,.323 U.S. 516, 535 (1945)). The second prong ofthe "electioneering

message" test-given its "diminish [candidate] suppon" focus--requires the same difficult and dangerous

subjective inquiry.

IJ Like a '57 Chevy, a dated Supreme Coun opinion may be chalmmg, but often requires substantial

testoration to be of practical use.

5
advocate the election or defeat of a cl;arly identified cal1diJate." Federal Electio/)

Commission v. Massachusetts Citi2ellS Fo!' Life. 1;/,:.. 479 C.S. 238, 249-250 (1986)

(quoting Buckley, 424 U.S. at 80). ln contrast, there is virtually nothing which could be

said about a candidate for federal ortice which might not be interpreted as "diminish[ing]

support for one candidate [or] gamer[ing] support for another candidate." See, e.g..

Report on DFP, Agenda Document 98-87,11/19/98 at 14 (citing AO 1984-15); Report

on CGP, Agenda Document 98-87, 11119/98 at 10 (citing AO 1984-15).

The "electioneering message" test is also unconstitutionally overbroad for related

reasons. As the Buckley Court observed,

[c]andidates, especially incumbents, are intim<l!ely tied to public issues

involving legislative proposals and governmental actions. Not only do

candidates campaign on the basis of their positions on various public

issues, but campaigns themselves generate issues of public interest.

424 U.S. at 42. Regulation of any statement which" diminishes [or garners] support for

[a] candidate," AO 1984-15 at 5, would encompass, then, virtually any meaningful

utterance identifying a candidate.

The vagueness and overbreadth problems ofthe "electioneering message" and

"relative to" standards are thus two sides ofthe same counterfeit coin. They are vague

because it is not clear when they encompass issue discussion and not candidate advocacy.

They are overbroad because, given the nature of campaigning, they will inevitably

encompass both. For the same substantive reasons that the Supreme Court held the

"relative to" standard in the FECA to be unconstitutional, the Commission may not

employ "the electioneering message" standard. Even in the context of coordinated, or

presumably coordinated, communications in which the "electioneering message" test has

generally been proposed (see 11 C.F.R. § 114.4(c)(5)(ii)(B)(2)(E) (regulation of voter

guides), the Commission may not ignore these constitutional requirements.

Conclusion

/ Karl VSandstrom Date

Corhmissioner

Given the procedural and substantive infirmities with the "electioneering

message" standard, the Commission may not employ it in administering the FECA, the

Presidential Primary Matching Payment Account Act, the Presidential Election Campaign

Fund Act, or its own regulations.

HI\ jJ j'I}/ 1 (I 1",:/ /./ 0

JJJwfi1/~frc.;-'v{..; i;.J-j(.fir!

Darryl I{, Wold Date

bll~~_/2';9J

David M. Mason Date

Commissioner

6
March 23, 2000

•

MEMORANDUM

TO:

THROUGH:

FROM:

BY:

FEDERAL ELECTION COMMISSION

WASHINGTON, D.C. 20463

The Commission

James A. Pehrkon

StaffDirector

Lawrence M. Noble

General Counsel

Kim Leslie Bright

Associate General Counsel

1000 MAR 21 P ll: 10

ru

ru SUBJECT: President Clinton and the Clinton/Gore '96 Primary Committee, Inc.

(LRA#529)

Pursuant to the Commission's March 16,2000 discussion and determination in

connection with Agenda Document No. 00-31, attached for your information is a letter to Lyn

Utrecht, counsel for the Clinton/Gore '96 Primary Committee, Inc. The letter summarizes the

Commission's action with respect to the Future Tech disgorgement determination.

Ifyou have questions about this letter, please contact Andre G. Pineda, the attorney

assigned to this matter.

Attachment

Letter from Kim Leslie Bright to Lyn Utrecht
FEDERAL ELECTION COMMISSION

WASHINGTON. DC 20463

Lyn Utrecht, Esq.

Ryan, Phil1ips, Utrecht & MacKinnon

1133 Connecticut Avenue, N.W.

Suite 300

Washington, D.C. 20036

Dear Ms. Utrecht:

Re: Clinton/Gore '96 Primary Committee, Inc.

Disgorgement Payment (LRA #529)

On July 15, 1999, the Commission determined that President Clinton and the

Clinton/Gore '96 Primary Committee, Inc. (col1ectively"the Committee") must disgorge $25,000

to the United States Treasury for contributions that were identified as being part of a corporate

contribution scheme involving Future Tech International ("Future Tech") and its corporate

officers. By letter dated October 8, 1999, the Committee sent the Office of General Counsel a

$25,000 check made payable to the United States Treasury. In addition to enclosing the

disgorgement payment, the letter indicated that the Committee is "somewhat concerned about the

Commission's authority to order the disgorgement, particularly in light of a lawsuit that has been

related to a Commission disgorgement order to another 1996 presidential campaign." The

Committee's letter also stated that "[w]e assume that the Commission would defend [it) should

any legal action be brought against the Committee to seek return of these funds to the

contributor."

Although the letter does not identify the lawsuit, it appears that it is refelTing to Fireman

v. United States, 44 Fed. Cl. 528 (1999), a United States Court ofFederal Claims decision which

granted, in part, and denied, in part, a motion to dismiss that was filed by the Department of

Justice ("DOJ"). The lawsuit, filed by Simon C. Fireman, was a claim against the United States

for $69,000 pursuant to 28 U.S.c. § 1491 ("the Tucker Act"). The amount sought was equal to

the amount of contributions Mr. Fireman and Aqua-Leisure Industries, Inc. made to the Dole for

President Committee, Inc. and the Dole for President Compliance Committee, Inc. (col1ectively

"the Dole Committees"), which were later disgorged to the United States Treasury by the Dole

Committees. On November I, 1999, the United States Court of Federal Claims dismissed Mr.

Fireman's lawsuit.

On March 16,2000, the Commission determined to retain the disgorgement with the

United States Treasury. Please note that any Tucker Act claim filed in the United States Court

(

(.

2'1............ ~.,
•

',-i "I:

•

Lyn Utrecht

Page 2

of Federal Claims by a donor for monies disgorged by the Committee would name the United

States as a party. Accordingly, it appears that the Committee would not properly be named a

party to such a claim.

My Office will keep you apprised of any developments regarding this matter, should any

occur. If you have any questions, please contact Andre G. Pineda, the attorney assigned to this

matter, at (202) 694-1650.

Sincerely,

Kim Leslie Bright

Associate General Counsel

).
•

i ,

I I
FEDERAL ELECTION COMMISSION

Washington, DC 20463

.'.f " ;I .~

i

, ,

/ '.

/

/

Attached is a copy of the Statement of Reasons regarding

Audits of 1996 Clinton/Gore and Dole/Kemp Campaigns signed by

MEMORANDUM

TO:

FROM:

DATE:

SUBJECT:

Commissioners

Staff Director Pehrkon

General Counsel Noble

Press Office Ron Harris f!)~

Mary W. DoveNeneshe Ferebee-Vine ~~ Commission Secretary

July 6,1999

Statement for the Record in Audits of

1996 Clinton/Gore and Dole/Kemp Campaigns

Chairman Scott E. Thomas and Commissioner Danny Lee McDonald.

This was received in the Commission Secretary's Office on July 6, 1999

at 11 :42 a.m.

cc: V. Convery

Attachments
FEDERAL ELECTION COMMISSION

WASHINGTON, DC 20463

•

III

ru

Statement for the Record in Audits of

1996 Clinton/Gore and Dole/Kemp Campaigns

Chairman Scott E. Thomas

Commissioner Danny L. McDonald'

Our colleagues, Commissioners Sandstrom, Wold, Elliott and Mason,

recently joined in what must be seen as a very odd Statement of Reasons

regarding the audits of the 1996 Clinton and Dole campaigns. 1 Little is written of

the audits. Instead, the thrust of their statement is a tirade against an innocuous

shorthand reference the Commission coined in Advisory Opinion 1985-142 to

analyze whether party communications are subject to the statutory limits on

support of particular candidates. The energy expended by our colleagues to

savage the Commission's own advisory opinion process is surprising. The

strangest aspect of the Sandstrom ef al. Statement, though, is that it claims to

abhor vagueness but, in the end, is itself very confusing.

We write this Statement to explain the state of the law in this area, and to

clarify that the Sandstrom et al. Statement does not effect a 'sea change' when

analyzing which party communications should be subjected to the statutory limits

on coordinated expenditures. In particular, we wish to emphasize that 'express

advocacy' is not required.

I.

The limits on coordinated expenditures by party committees on behalf of

their candidates have been on the books for over 24 years. They were part of

the Federal Election Campaign Act Amendments of 1974.3 In addition to the

1 Statement of Reasons of Vice Chairman Wold and Commissioners Elliott, Mason and Sandstrom

issued June 24, 1999 (hereinafter "Sandstrom et al. Statement").

2 Fed. Elec. Camp. Fin. Guide (CCH Transfer Binder), 5819.

3 Pub. L. 93-443, 88 Stat. 1263, § 101.
$5,000 per election contribution limit available to all political committees,· parties

have coordinated expenditure allowances permitting additional spending in

connection with the general election campaigns of their candidates. 5

The party coordinated expenditure limits serve an important role in

preventing party donors from having an indirect way of effecting a 'quid pro quo'

arrangement with candidates for federal office-- the link between money and

official government action the statute is designed to prevent. If a party

committee is able to undertake only a limited amount of coordinated expenditure

activity on behalf of a particular candidate, donors or groups of donors will not be

able to expect large-scale donations to the party to result in large-scale spending

by the party on behalf of such candidate. For example, ten banking industry

PACs who donate $15,000 each to a party's House campaign committee and

who are close to a particular House committee chairman running for reelection

would not be able to expect $150,000 in coordinated expenditures by the party

on behalf such candidate because the coordinated expenditure limit would

prevent it.

The direct payment of funds to a candidate's campaign has been treated

as a "contribution"6 subject to the contribution limit. A party's coordinated

payment to a third party on behalf of a candidate has been treated as either an

in-kind "contribution" or a coordinated "expenditure, "7 at the option of the

expending committee. 8 If treated as a coordinated expenditure, the party has to

4 Currently codified at 2 U.S.C. § 441a(a)(2)(A).

511 C.F.R. § 110.7(a)(3), (b)(3). Codified at 2 U.S.C. § 441a(d), the coordinated expenditure

allowance provides:

Notwithstanding any other provision of law with respect to limitations on expenditures or

limitations on contributions, the national committee of a political party and a State

committee of a political party, including any subordinate committee of a State committee,

may make expenditures in connection with the general election campaign of candidates

for Federal office, SUbject to the limitations contained in paragraphs (2) and (3) of this

subsection.

Subsections (2) and (3) set forth formulas that in the last presidential election permitted a national

party committee to spend over $12 million on behalf of its presidential candidate, and that in the

1998 congressional elections permitted a national and state party committee each to spend

$32,550 for a House candidate and each to spend amounts ranging from $65,100 in small states

like Wyoming to over $1.5 million in California for a Senate candidate.

62 U.S.C. §431(8).

72 U.S.C. § 431(9).

8 FEC Campaign Guide for Party Committees (1996) at 16. The FEC for many years operated

with a presumption that all party spending was coordinated with the parties' eventual nominees.

11 C.F.R. § 110.7(a)(5), (b)(4) (1996). The Supreme Court invalidated that presumption in

Colorado Republican Federal Campaign Committee v. FEC, 518 U.S. 604 (1996) (hereinafter

"Colorado I"). As a result, only party spending that can be shown to meet the legal test of

'coordination' can be subjected to the limits at 2 U.S.C. § 441a(a)(2)(A) and (d). The legal test for

coordination is set forth at 2 U.S.C. § § 431 (17) and 441a(a)(7)(8) and at 11 C.F.R. § 109.1(b)(4)

and (d)(1).

2
keep within the coordinated expenditure limit, but only the party need report the

transaction. 9

Because party committees are primarily in the business of electing

candidates, the Commission has required virtually all party-building activity to be

at least allocated so that indirect federal candidate support is not paid for with

funds not permitted under federallaw. 10 At the same time, recognizing party

committees sometimes undertake generic party-building activities that may help

their candidates only in a general way-- a way that should not result in a

contribution to or coordinated expenditure on behalf of a particular candidate--

the Commission has tried to clarify when a party activity need not be subjected to

a candidate-specific limitation. Thus, the Commission has specified at 11 C.FR.

§ 106.1 (c) that an expenditure for rent, personnel, overhead, general

administrative costs, educational campaign seminars, training of campaign

workers, or registration or get-out-the-vote drives need not be attributed to

individual candidates unless the expenditure is "made on behalf of a clearly

identified candidate, and the expenditure can be directly attributed to that

candidate."

When identifying which party activities fall under the candidate-specific

limits, though, the Commission must deal first and foremost with the underlying

statutory terms. A "contribution" is a payment or gift of value made "for the

purpose of influencing any election for Federal office."11 A coordinated

"expenditure" is a payment, advance or gift of anything of value made "for the

purpose of influencing any election for Federal office" and "in connection with the

general election campaign" of a candidate for Federal office. 12

Over the years, the Commission has grappled with the difficult factual

distinctions that make a party communication a generic party-building

expenditure on the one hand, or an in-kind contribution or coordinated

expenditure on the other. The best-known instances were Advisory Opinion

1984-1513 and the aforementioned Advisory Opinion 1985-14. In each of those

opinions, the Commission analyzed the facts according to the basic underlying

statutory provisions cited above.

In Advisory Opinion 1985-14, the Commission developed a shorthand

reference to the legal analysis to be used. Instead of repeating the statutory

phrases, "for the purpose of influencing" and "in connection with," the

Commission described the process as a search for whether the communication

911 C.F.R § 104.3(a)(3)(iii).

'°11 C.F.R. § 106.5.

11 2 U.S.C. § 431(8). 12 2 U.S.C. §§ 431(9) and 441a(d).

13 Fed. Elec. Camp. Fin. Guide (CCH Transfer Binder), 1[5766

3
contained an "electioneering message." 14 The Commission then cited a

Supreme Court decision for further guidance as to what was meant by

"electioneering message."15 There, the Court simply described its view of the

reach of the corporate and union prohibition at 2 U.S.C. § 441b: whether a

communication is "designed to urge the public to elect a certain candidate or

party."1B This phrasing, of course, is Virtually indistinguishable from the "for the

purpose of influencing any election for Federal office" language at the heart of

any "contribution" or "expenditure" inquiry. Thus, at most, the Commission in

Advisory Opinion 1985-14 was paraphrasing the statutory language underlying

any coordinated party expenditure analysis.

II.

Our colleagues grossly overstate the significance of the "electioneering

message" phrase and then gyrate into an inappropriate constitutional hypothesis

regarding the vagueness of that phrase and other phrases used in Advisory

Opinions 1984-15 and 1985-14. Along the way, they grumble about perceived

improper rulemaking through the advisory opinion process.

A.

Dealing with the last 'red herring' first, to our knowledge no commissioner

has been confused about the legal effect of advisory opinions. While advisory

opinions clearly have binding consequences, the statute is clear that general

rules of law have to emanate from the statute or from regulations of the

Commission. 17 Nonetheless, our colleagues seem convinced that the

Commission's use in Advisory Opinions 1984-15 and 1985-14 of paraphrases

and synonyms for the statutory test was, in fact, the creation of a new

substantive rule of law.1s The reality, of course, is that there are only so many

words in the English language, and after citing the underlying statutory

provisions, the Commission simply attempted to explain the legal test in other

helpful ways.19

14 Fed. Elec. Camp. Fin. Guide (CCH Transfer Binder), 115819 at 11,185.

15 United States v. United Auto Workers, 352 U.S. 567 (1957) (hereinafter "UAW').

'6 Id. At 587.

17 2U.S.C. §437f(b).

18 At one point our colleagues call the phrases used a "test" and at other times they refer to them

as an "amalgam." Sandstrom et al. Statement at 2 and 4.

19 Lest our colleagues be struck down by a bolt of lightning for insinuating they would never stoop

to helpful descriptions of the underlying statutory and regulatory provisions, they should concede

that only recently in Advisory Opinion 1999-11, they engineered a description of the statute's

reach that depended on whether there was "any campaign activity" at the event in question. See

Memorandum from Commissioner Sandstrom, Agenda Doc. No. 99-61-A; Advisory Opinion 1999-

11 (unpublished) at 3.

4
Thus, our colleagues have felled a demon they didn't need to imagine in

the first place. The regulated community has had notice of the underlying

statutory provisions at 2 U.S.C. §§ 431(8) and (9) and 441a(d) all along.

Advisory Opinions 1984-15 and 1985-14 neither expanded nor diminished those

underlying rules of law.

Interestingly, our colleagues do not purport to supersede Advisory.

Opinions 1985-14 and 1984-15, but rather disagree with the phrasing of the legal

analysis therein. We take that to mean the Commission's conclusions regarding

specific proposed ads in those opinions still serve as valid legal precedent in

terms of the underlying statute. For example, a party committee that ran ads

under materially indistinguishable circumstances could 'rely upon' the

conclusions reached by a majority of commissioners in those opinions in

determining whether the ads would be a coordinated expenditure or not. 20 This

rightly diminishes the negative impact of our colleagues' statement and suggests

only that the Commission cease using the pesky "electioneering message"

phrase when explaining its interpretations under the statute.

We must address our colleagues' suggestion that an advisory opinion

may not be used as a "sword of enforcement." Sandstrom et al. Statement at 3.

Apparently, they disregard the statutory language quoted in the previous

footnote. Someone who receives an advisory opinion that certain conduct would

be illegal, as well as anyone in materially indistinguishable circumstances, surely

may 'rely on' that legal conclusion to file a complaint against someone else

engaging that conduct. Essentially, that is what happened when Democratic

Party representatives received a response in Advisory Opinion 1985-14 that

certain targeted communications attacking a likely opponent would be

coordinated expenditures subject to limit. Other Democratic Party

representatives then filed a complaint against the Colorado Republican Party

regarding certain ads that attacked the likely Senate nominee, Tim Wirth. That

enforcement case became the subject of the Supreme Court's decision in

Colorado I, supra.

Our colleagues may have missed the fact that the 10th Circuit in that

case upheld the FEC's use of Advisory Opinion 1985-14 (even its

"electioneering message" phrase) to bolster its c1aimY Although the Supreme

Court vacated the 10th Circuit's opinion on other grounds, Colorado I, this is a

strong indication advisory opinions can be used as a "sword."

20 The statute provides that any advisory opinion rendered by the Commission "may be relied

upon" by the person to whom the opinion is issued or by "any person involved in any specific

transaction or activity which is indistinguishable in all its material aspects ...." 2 U.S.C. §

437f(c)(1 ).

21 FEC v. Colorado Republican Federal Campaign Committee, 59 F. 3d 1015 (101h Cir. 1995).

5
This proposition is supported by a 9th Circuit decision, a case our

colleagues cite but misconstrue.22 There, in a successful enforcement action

against a committee that accepted excessive contributions, the FEC used its

advisory opinion precedent as a "sword," and the court specifically sanctioned

this approach.23

The courts have strongly indicated the Commission is bound to apply its

advisory opinion precedent consistently.24 We caution our colleagues not to get

so agitated over the use of paraphrases and shorthand references in prior

advisory opinions that they issue statements undermining the ability of the

agency to enforce the law.

B.

Our colleagues go well beyond their role as commissioners by opining

about the possible unconstitutional vagueness and overbreadth of the words

"electioneering message."25 First, as just explained, everyone should agree that

"electioneering message" is not a rule of law and, hence, it is not the proper

focus of any constitutional debate. Second, even if it were, Commissioners are

not members of the judiciary entitled to render their own rules unconstitutional.26

It is one thing to interpret the statute in an advisory opinion, or to interpret the

22 FEC v. Ted Haley Congressional Committee, 852 F.2d 1111, 1115 (9'h Cir. 1988) (hereinafter

"Haley") ("interpretation of FECA by the FEC through its regulation and advisory opinions is

entitled to due deference and is to be accepted by the court unless demonstrably irrational or

clearly contrary to the plain meaning of the statute").

23 We cannot fathom our colleagues' attempt to distinguish Haley. They appear to argue the

court's reliance on advisory opinions is insignificant because there happened to be a relevant

regulation to apply as well. Sandstrom et a/. Statement at 4, n. 9. As our colleagues well know,

the existence of a regulation is not essential to the legal value of an advisory opinion. The law, 2

U.S.C. § 437f(a), specifically contemplates adVisory opinions applying the statute as well-- just as

was the case in Advisory Opinions 1984-15 and 1985-14. As precedent, such opinions may be

"relied upon" just as much as advisory opinions applying a regulation. 2 U.S.C. § 437f(c).

24 See Common Cause v. FEC, 676 F. Supp. 286 (D.D.C. 1986) (certain FEC commissioners,

including Commissioner Elliott, ordered to issue statement of reasons in dismissed enforcement

case where advisory opinion precedent seemingly inconsistent); Common Cause v. FEC, Fed.

Elec. Camp. Fin. Guide (CCH Transfer Binder), 119263 (D.D.C. 1988) (related case noting, "The

importance of respect for the Rule of Law ... requires that courts be vigilant to ensure that in the

process 'prior policies and standards are being deliberately changed, not casually ignored.''').

25 Sandstrom et a/. Statement at 4.

26 Commissioners have an obligation to seek compliance with the statute passed by Congress. 2

U.S.C. § 437c(b)(1). The D.C. Circuit has stated, "[A]dministrative agencies ... cannot resolve

constitutional issues." American Coalition for Competitive Trade v. Clinton, 128 F.3d 761, 766 n. 6

(D.C. Cir. 1997). See also, Gilbert v. National Transportation Safety Board, 80 F.3d 364,366-67

(9th Cir. 1996) ("challenges to the constitutionality of a statute or a regulation promulgated by an

agency are beyond the power or the jurisdiction of an agency").

6
statute through a clarifying regulation. 27 It is altogether different to opine that a

mere shorthand reference used to paraphrase the statute is unconstitutional. 28

That said, we believe it important to note a fundamental flaw in our

colleagues' 'judicial detour.' Their reliance on Supreme Court analysis of

independent spending provisions is simply inapposite. In the area of

coordinated expenditures, there is no basis for applying the "express advocacy"

standard created in Buckley29 and FEC v. Massachusetts Citizens for Life30

where independent disbursements were at issue. Indeed, Buckley could not

have been clearer that its "express advocacy" test did not apply to coordinated

expenditures. When analyzing former 18 U.S.C. § 608(e), the independent

expenditure limit struck down by the Court, the per curiam opinion noted:

The parties defending § 608(e)(1) contend that it is necessary to prevent

would-be contributors from avoiding the contribution limitations by the

simple expedient of paying directly for media advertisements or for

other portions of the candidate's campaign activities. They argue that

expenditures controlled by or coordinated with the candidate and his

campaign might well have virtually the same value to the candidate as a

contribution and would pose similar dangers of abuse. Yet such

controlled or coordinated expenditures are treated as contributions

rather than expenditures under the Act. [footnote omitted] Section

27 The D.C. Circuit has noted that the adVisory opinion process provides an opportunity "to reduce

uncertainty or narrow the statute's reach" and that "the susceptibility of the [Federal Election

Campaign Act] to challenge on the grounds of vagueness has consequently been reduced."

Martin Tractor Co. v. FEC, 627 F.2d 375, 386 (D.C. CiL), cert. denied, 449 U.S. 954 (1980).

28 This would apply, as well, to our COlleagues' constitutional analysis of other phrases used at one

time or another by the Commission to explain the application of the underlying statutes, such as

whether the communication would "tend to diminish support for one candidate and garner support

for another candidate." Sandstrom et at. Statement at 4, n. 11, discussing Advisory Opinion 1984-

15.

We are baffled by our colleagues' suggestion that the Supreme Court's phrase in UAW

("designed to urge the public to elect a certain candidate or party") is but "charming" and of little

"practical use" because it dates back to the days of a '57 Chevy. Sandstrom et a/. Statement at

5, n. 13. That might explain why the old case of Marburv v. Madison, 5 U.S. 137, 178 (1803) (It is

for Article III jUdges to consider constitutional disputes and "say what the law is."), is of little value

to them. More importantly, because the phrasing used in UAW is so close to the current language

of the statute governing coordinated expenditures ("for the purpose of influencing any election for

Federal office"), we hope our colleagues are not suggesting the latter is unconstitutionally vague.

In Buckley v. Va/eo, 424 U.S. 1(1976), the Court made crystal clear that it viewed the phrase "for

the purpose of influencing" in the context of coordinated expenditures to be free of constitutional

vagueness concerns ("We construed [the term 'contribution' which relies on a 'for the purpose of

influencing' test] to include ... expenditures placed in cooperation with or with the consent of a

candidate. . .. So defined, 'contributions' have a SUfficiently close relationship to the goals of the

Act, for they are connected with a candidate or his campaign."). 424 U.S. at 78, referring back to

n. 24 at 23. 29 424 U.S. at 42-44, 76-82. 30 479 U.S. 238, 249-50 (1986) (hereinafter "MCFL").

7
608(b)'s contribution ceilings ... prevent attempts to circumvent the Act

through prearranged or coordinated expenditures amounting to disguised

contributions. By contrast, § 608(e)(1) limits expenditures for express

advocacy of candidates made totally independently of the candidate

and his campaign.31

Similarly, in MCFL, the Court made clear that its "express advocacy" construction

need only apply to the provision in 2 U.S.C. § 441 b "that directly regulates

independent spending."32

III.

We can only hope our colleagues' statement does not get misconstrued

by the regulated community and the courts. We note with interest, for example,

that one business day after our colleagues' statement was circulated at the

Commission, counsel for the defendant in FEC v. Christian Coalition33 filed a

pleading suggesting its relevance to the issue in that case: whether a

corporation made in-kind contributions or independent expenditures prohibited

under 2 U.S.C. § 441b. In fact, no allegation in that case involves a claim that

depends on the phrase "electioneering message."34

31 424 U.S. at 46,47. See also Buckley at 78-80 (defining coordinated expenditures as

"contributions" and defining non-coordinated "expenditures" covered by former 2 U.S.C. § 434(e)

to reach only communications containing 'express advocacy'). 32 479 U.S. at 249.

33 No. 96-1781 (D.D.C., filed 1996).

34 Interestingly, the Commission passed a regulation in 1995 that implements 2 U.S.C. § 441b as it

relates to certain voter guides. It uses the phrase "electioneering message." Specifically, for

voter gUides prepared with the candidates' cooperation and participation, the regulation specifies

that such guides "shall not score or rate the candidates' responses in such way as to convey an

electioneering message." 11 C.F.R. § 114.4(c)(5)(ii)(E). As it post-dates the activities at issue in

FEC v. Christian Coalition, supra, it should not enter the debate there, but that has not stopped

the defendant's counsel. For activities properly sUbject to this regulation, we can only ponder

what our colleagues will say.

8
The confusion generated by our colleagues is regrettable. While the

Commission's efforts to apply the in-kind contribution and coordinated

expenditure provisions in the statute must focus, as always, on the words of the

statute, surely a great deal of energy now will be expended on what to make of

the banning of the innocuous "electioneering message" phrase. The answer is,

"not much." Sadly, a lot of explaining will be required to get there.

Date

Date

9

Scott E. Thomas, Chairman

~'ifc~~~ DannyL. cDonalct:Qmmissioner ~.7Y.,,{)
FEDERAL ELECTION COMMISSION

WASHINGTON, DC. 20463

MEMORANPUM

TO:

FROM:

DATE:

SUBJECT:

Commissioners

Staff Director Pehrkon

General Counsel Noble

Press Officer Harris

Mary W. Dove/Lisa R. Da is

Acting Commission Secre

June 25,1999

Statement of Reasons for the Audits of

Clinton/Gore '96 and Dole/Kemp '96.

Attached is a copy of the Statement of Reasons in the Audits of

Clinton/Gore '96 and Dole/Kemp '96 signed by Vice-Chairman Darryl R.

Wold, Commissioner Lee Ann Elliott, Commissioner David M. Mason and

Commissioner Karl J. Sandstrom. This was received in the Commission

Secretary's Office on Thursday. June 24, 1999 at 3:47 p.m.

cc: V. Convery

Attachment
FEDERAL ELECTION COMMISSION

WASH INC TON. 0 C 2U4bJ

STATEMENT OF REASONS of

VICE CHAlRMA.l'l DARRYL R. WOLD and

COMMISSIONERS LEE ANN ELLIOTT,

DAVID M. MASON and,

KARL J. SANDSTROM

On The Audits Of

"DOLE FOR PRESIDENT COMMITTEE, INC." (pRIMARY),

"CLINTON/GORE '96 PRIMARY COMMITTEE, INC.,"

"DOLEIKEMP '96, INC." (GENERAL),

"DOLEIKEMP '96 COMPLIANCE COMMITTEE, INC'~ (GENERAL),

"CLINTON/GORE '96 GENERAL COMMITTEE, INC.," and

"CLINTON/GORE '96 GENERAL ELECTION

LEGAL AND COMPLIANCE FUND"

Pursuant to 26 U.S.C. §§ 9038(a) and 9007(a), the Federal Election Commission

("the Commission") audited the "Dole For President Committee, Inc.," the "Clinton/Gore

'96 Primary Committee, Inc.," "DolelKemp '96, Inc.," the "DolelKemp '96 Compliance

Committee, Inc.," the "Clinton/Gore '96 General Committee, Inc." and the "Clinton/Gore

'96 General Election Legal And Compliance Fund." In doing so, our Audit Division and

Office ofGeneral Counsel (collectively the "staff') analyzed media advertisements the

Democratic and Republican National Committees (collectively "the parties") ran during

1995 and 1996. The purpose ofthis analysis was to determine whether the cost ofthese

advertisements constituted in-kind contributions (coordinated expenditures) by the parties

on behalf oftheir respective presidential candidates' committees (which, among other

things, could have caused the presidential committees to exceed their primary or general

election spending limits in violation of2 U.S.C. § 44Ia(b».

In analyzing these advertisements, I the staff examined their content for the

presence oftwo factors to determine whether the advertisement were "for the purpose of

influencing" an election for Federal office, as that phrase is used in 2 U.S.C. § 431 (8)(A)

("contribution") and (9)(A) ("expenditure"): Whether the advertisements referred to a

"clearly identified candidate" and whether they contained an "electioneering message."2

J See. e.g., "Report of the Audit Division on the Dole For President Committee,lnc. (Primary)" ("Report

on DFP"), Agenda Document 98-87, 11/19/98 at 14 & 50; "Report of the )\udit on Clinton/Gore '96

Primary Committee, Inc." ("Report on CGP"), Agenda Document 98-85, 11/19/98 at 10,32-35 & 36-38.

2 The staff cited Advisory Opinions ("AO")1984-15 and 1985-14 as the authority for using "electioneering

message" as a test ofthe content of a communication. Only AO 1985-14 used that phrase, and it did so in

erroneously concluding that the Commission had employed the "electioneering message" test in AO 1984.

15, see AO 1985-15 at 7; in fact, those words never appear in AO 1984-15. See footnote eleven, infra, for

a discussion ofthe problems with the staffs interpretation of these opinions.
Because the stafffound that both factors were present/ the staffrecommended that the

Commission detennine that the costs ofthe advertisements were in-kind contributions

from the parties to their respective presidential campaign committees. 4 The staff also

recommended that the Commission detennine that the applicable spending limits were

exceeded based in part on the cost ofthe advertisements, and that the Commission require

a repayment ofpresidential matching funds. For various reasons, the Commissioners

unanimously rejected the staff's repayment recommendations.

We write here to express our disagreement with the use of "electioneering

message" as a test to detennine whether communications are "for the purpose of

influencing" elections and, therefore, constitute expenditures or contributions under the

Federal Election Campaign Act ("FECA"). Specifically, we agree that: (1) The phrase

"electioneering message" cannot serve as a substantive test to describe the content of

communications that are "for the purpose ofinfluencing" an election because it is derived

only from advisory opinions and is not found either in the FECA or in regulations

promulgated by the Commission in accordance with the rulemaking procedures specified

in the FECA; and (2) The phrase "electioneering message" cannot be used as a shorthand

expression ofthe Commission's interpretation ofthe statutory standard of "for the

purpose ofinfluencing" an election because the advisory opinions from which the phrase

is drawn do not convey a clear and consistent application ofthe statutory standard, and

the phrase, standing alone, is both too vague and too broad to have a sufficiently definite

meaning. Therefore, we conclude that the phrase "electioneering message" should not be

used to describe the content ofcommunications which the Commission would detennine

to be "for the purpose ofinfluencing" an election to Federal office.

Procedural Defects With Employing The "Electioneering Message" Standard

Congress included an express prohibition in the FECA against the Commission

using advisory opinions to establish rules of conduct. SUbpart (b) of 2 U.S.c. § 437[, the

section governing the use ofsuch opinions, provides that the Commission may employ

rules oflaw that are not set forth in the FECA only ifit complies with the procedures set

forth in 2 U.S.C. § 438(d) in promulgating them.s By necessary implication, subpart (b)

of § 437fprohibits the Commission from using advisory opinions as rules oflaw, for the

3 See. e.g., Report on DFP, Agenda Document 98-87,11/19/98 at 50; Report on COP, Agenda Document

98·85, 11/19/98 at 38.

4 See. e.g., Report on DFP, Agenda Document 98-87, 11/19/98 at 52; Report on COP, Agenda Document

98-85, 11/19/98 at 43.

S See id. at § 437f(b) ("Any rule oflaw which is not stated in this Act or in chapter 95 or chapter 96 of title

26 may be initially proposed by the Commission only as a rule or regulation pursuant to procedures

established in section 438(d) of this title."); United States Defense Committee v. Federal Election

Commission, 861 F.2d 765,771 (2" Cir. 1988) (USDC) (citing 2 U.S.C. § 438(d)) ("A rule oflaw may

initially be proposed by the Commission only as a rule or regulation pursuant to very elaborate procedures

involving submission ofthe rule or regulation to the Congress.").

2
Commission does not follow the requirements of2 U.S.c. § 438(d) in drafting such

opinions; instead, it follows the requirements of § 437f."

As a result, the Commission may not use advisory opinions as a substitute for

rulemaking. Rulemaking is not simply the preferred method for filling in gaps in the

FECA. It is the required method. 2 U.S.C. § 437f(b), note five, supra. Where the law is

of uncertain application, advisory opinions cannot be used as a sword of enforcement.

See generally id. The regulated community can, however, use advisory opinions as

shields against Commission enforcement actions in appropriate circumstances. 2 U.S.C.

§ 437f(c).

Advisory opinions are binding only in the sense that they may be relied on

affirmatively by any person involved in the specific transaction or activity

discussed in the opinion or in any materially indistinguishable transaction or

activity.... On the other hand, to the extent that the advisory opinion does

not affirmatively approve a proposed transaction or activity, it is binding on

no one-not the Commission, the requesting party, or third parties. 7

This reading ofthe FECA's rulemaking requirements, of course, does not prevent

the Commission from enforcing the FECA in novel or unforeseen circumstances. It only

requires that, absent controlling regulations or the authoritative interpretations ofthe

courts, the Commission's enforcement standard be the natural dictate ofthe language of

the statute itself.8

The threshold problem with the "electioneering message" standard, then, is that it

is not a rule. It is only a shorthand phrase that purports to describe the Commission's

reasoning in two advisory opinions. See note two, supra. The phrase is not defined in

either ofthose opinions. In fact, it does not appear at all in one ofthem. Rather than

being promulgated pursuant to the requirements ofthe FECA (see 2 U.S.C. §§ 438(d) and

"See 2 U.S.c. § 437f(b) ("... No opinion of an advisory nature may be issued by the Commission or any

ofits employees except in accordance with the provision ofthis section [i.e., § 4371].").

7 USDC, 861 F.2d at 771 (emphasis added) (citing 2 U.S.C. §§ 438(d) and 437f(b)&(c)); see also Weber v.

Heaney. 793 F. Supp. 1438, 1452 n. 9 (D. Minn 1992) (" ... Commission advisory opinions are binding in

the sense that they may be relied upon affirmatively by any person involved in the specific transaction or

activity discussed in the opinion or in any materially indistinguishable transaction or opinion."), aff'd. 995

F.2d 872 (8'h Cir. 1993); Stockman v. Federal Election Commission. 138 F.3d 144.149 n. 9 (5'" Cir. 1998)

(same). Some argue that Orloski v. Federal Election Commission. 795 F.2d 156 (D.C. Cir. 1986), supports

the contrary conclusion. Unlike USDC, however, Orloski did not address the FECA's clear prohibitions on

using advisory opinions as rules of conduct. Instead, Orloski analyzed the advisory opinions implicated

there for purposes of determining whether the Commission's interpretation of the FECA was reasonable

and consistent and thus should be accorded deference. 795 F.2d at J64-167.

8 See Sullivan v. Everhart, 494 U.S. 83, 89 (1990) (Scalia, J.) (quoting Chevron U.S.A.. Inc. v. Natural

Resources Defense Council. bic.. 467 U.S. 837, 843 (1984) and National Labor Relations Board v. Food

and Commercial Workers, 484 U.S. 112, 123 (1987)) (,"[I]fthe statute is silent or ambiguous with respect

to the specific issue, the question for the court is whether the agency's answer is based on a permissible

construction of the statute,' that is, whether the agency's construction is 'rational and consistent with the

statute. ''').

3
437f(b) & (e), the "electioneering message" standard is an amalgam ofthese advisory

opinions. Even at that, it is not the most natural, let alone the only reasonable, reading of

those opinions. In fact, it is difficult to draw any clear meaning from a comparison or

combination ofAOs 1984-15 and 1985-14 (see "Substantive Difficulties," infra).

As a result, the regulated community most likely does not have notice as to how

this standard will govern its conduct, and it certainly did not have an opportunity to

comment on whether it should. Because ofits procedural infirmities, the Commission

may not employ the phrase "electioneering message" as expressing a general rule for

determining whether communications are "for the purpose ofinfluencing" a federal

election.·

Substantive Difficulties With The "Electioneering Message" Standard

Apart from its procedural infirmities, the "electioneering message" standard

suffers from serious problems of vagueness and overbreadth. As presented by the staff, a

communication satisfies this standard ifit includes statements which are "designed to

urge the public to elect a certain candidate or party,'O or which would tend to diminish

support for one candidate and garner support for another candidate." See, e.g., Report on

DFP, Agenda Document 98-87,11119/98 at 14 (citing AO 1984-15); Report on CGP,

Agenda Document 98-87, 11119/98 at IO (citing AO 1984-15).11

• Democratic Congressional CampaIgn Committee v. Federal Election Commission, 645 F. Supp. 169

(D.D.C. 1986), aff'd in part and rev 'd in part, 831 F.2d 1131 (D.C. CiL 1987) (DCCC) and Federal

Election Commission v. Ted Haley Congressional Committee, 852 F.2d 1111 (9'h CiL 1988) (Haley) do not

affect this conclusion. In DCCC, the Commission dismissed a complaint, contrary to the recommendation

ofits General Counsel, without providing a statement ofreasons for domg so when it appeared the

complaint alleged activity that satisfied the "electioneering message" standard. 645 F. Supp. at 170-171.

The Court, in an action brought pursuant to 2 U.S.c. § 437g(a)(8), was faced with the question of whether

the Commission had acted "contrary to law" for appearing to disregard its "electioneering message" test

without articulating any reason for doing so, id. at 171-174; the Court was not faced with the issue here:

whether thattesl, itself, was validly established. In Haley, the Court noted that the Commission's

interpretation ofthe FECA in its regulations and advisory opinions was entitled to due deference. 852 F.2d

at 1115. But all the advisory opinions to which that Court referred interpreted a Commission regulation,

id. at 1114-1115; they did not attempt to circumvent the FECA's clear requirement that for rules of

conduct, the Commission have a regulation. See also Federal Election Commission v. Legi-Tech. 967 F.

Supp. 523, 529-530 (D.D.C. (997) (Commission advisory opinions interpreted regulation).

'0 The staff cites AO 1984-15 as authority for this phrase. This phrase, however, comes from 1985-14. See

id. at 7 (citing United States v. United Auto Workers. 352 U.S. 567, 587 (1957)).

11 There is substantial question as to whether the staffs analysis properly characterizes AO 1984-15. While

that opinion uses the phrases "diminish support" and "gamer support," id. at 5, it concludes that

advertisements which clearly identif'y presidential candidates of one party and include exhortations to

"vote" for another party "effectively advocate the defeat of a clearly identified candidate." /d. Whatever

distinction there may be between "effectively" and "expressly" advocating, the facts presented in that

advisory opinion bear similarities to the facts in Federal Election Commission v. Massachusetts Citizensfor

Life. Inc.. 479 U.S. 238 (1986) (MCFL), and the Commission's conclusion in AO 1984-15 and the court's

conclusion in MCFL can be read consistently. The staffsuggests an extremely broad interpretation of AO

1984-15, citing the phrase "dimish [or] gamer support." See Reports on DFP & CGP. supra. That

opinion's facts, however, suggest a more narrow, and more natural, construction, similar to MCFL.

4
Such formulations, the Supreme Court has held, offend the First Amendment. ]n

Buckley v. Valeo, 424 U.S. I, 42-44 (1976), the High Court held as impermissibly vague

the "relative to ... advocating the election or defeat of[a clearly identified) candidate"

standard in 18 U.S.C. § 608(e) (1970) ofthe original FECA. The "diminish support for

one candidate" prong--like the "relative to" standard in the original FECA- is especially

problematic because "the distinction between discussion ofissues and candidates and

advocacy ofelection or defeat ofcandidates may often dissolve in practical application."

Buckley, 424 U.S. at 42 (emphasis added)."

The factual question ofwhat a particular statement was designed to do also gives

rise to vagueness problems. The fact that the term "electioneering" and the phrase

"designed to urge the public to elect a certain candidate or party" were plucked out of

context from a four-decade old Supreme Court opinion (United States v. Auto Workers,

352 U.S. 567 (1957) (UA W)) does not resolve the question. 13 First, it is clear that UA W

was not enunciating a constitutionally-permissible standard for regulating speech, but

describing a particular communication in the course of an opinion explicitly refusing to

reach a ruling on the constitutionality ofregulating the specific speech'so described. See

id. at 591 (internal citation omitted) ("Clearly in this case it is not absolutely necessary to

a decision to canvass the constitutional issues."). Second, the speech at issue in UAW

included specific endorsements of candidates. Id. at 584. Third, the per curiam opinion

in Buckley cites the dissent in UAW, see 424 U.S. at 43 (citing UAW, 352 U.S. at 595-596

(Douglas, J., dissenting)), which had urged that the FECA's predecessor statute be

declared unconstitutional as applied to the electioneering speech at issue in UA W.

The relationship, if any, ofthe two prongs ofthe "electioneering message" test

underscores the test's vagueness. Read narrowly, "urge the public to elect a candidate,"

AD 1985-14 at 7, could be construed as equivalent to communications "that expressly

12 The "relative to" standard, on its face, was thus unhelpful in distinguishing between these two types of

speech. Id. As a result, to allow unfettered issue discussion while regulating candidate advocacy, the

government, under this standard, had to attempt to divine the speaker's intent. Jd at 43. This. the Court

noted. would not only be difficult, but dangerous.

Whether words intended and designed to fall short of invitation would miss that mark is a

question both ofintent and effect. No speaker, in such circumstances, safely could

assume that anything he might say upon the general subject would not be understood by

some as an invitation. In short, the supposedly clear-cut distinction between discussion,

laudation, general advocacy, and solicitation puts the speaker in these circumstances

wholly at the mercy ofthe varied understanding of his hearers and consequently of

whatever inference may be drawn as to his intent and meaning. Such a distinction offers

no security for free discussion. In these conditions, it blankets with uncertainty whatever

may be said. It compels the speaker to hedge and trim.

Id. (quoting Thomas v. Collins•. 323 U.S. 516, 535 (1945)). The second prong of the "electioneering

message" test--given its "diminish (candidate] support" focus--requires the same difficult and dangerous

subjective inquiry.

Il Like a '57 Chevy, a dated Supreme Court opinion may be channmg. but often requires substantial

restoration to be of practical use.

5
advocate the election or defeat of a clearly identified candidate." Federal Election

Commission v. Massachusetts Citizens For Life, Inc., 479 U.S. 238, 249-250 (1986)

(quoting Buckley, 424 U.S. at 80). In contrast, there is virtually nothing which could be

said about a candidate for federal office which might not be interpreted as "diminish[ing]

support for one candidate [or] gamer[ing] support for another candidate." See, e.g.,

Report on DFP, Agenda Document 98-87, 11/19/98 at 14 (citing AO 1984-15); Report

on CGP, Agenda Document 98-87, 11/19/98 at 10 (citing AO 1984-15).

The "electioneering message" test is also unconstitutionally overbroad for related

reasons. As the Buckley Court observed,

[c]andidates, especially incumbents, are intimately tied to public issues

involving legislative proposals and governmental actions. Not only do

candidates campaign on the basis oftheir positions on various public

issues, but campaigns themselves generate issues of public interest.

424 U.S. at 42. Regulation of any statement which" diminishes [or garners] support for

[a] candidate," AO 1984-15 at 5, would encompass, then, virtually any meaningful

utterance identifying a candidate.

The vagueness and overbreadth problems ofthe "electioneering message" and

"relative to" standards are thus two sides ofthe same counterfeit coin. They are vague

because it is not clear when they encompass issue discussion and not candidate advocacy.

They are overbroad because, given the nature of campaigning, they will inevitably

encompass both. For the same substantive reasons that the Supreme Court held the

"relative to" standard in the FECA to be unconstitutional, the Commission may not

employ "the electioneering message" standard. Even in the context of coordinated, or

presumably coordinated, communications in which the "electioneering message" test has

generally been proposed (see 11 C.F.R. § 114.4(c)(5)(ii)(B)(2)(E) (regulation of voter

guides», the Commission may not ignore these constitutional requirements.

Conclusion

a~k;;'f-?:J Lel~:m Elliott Date

Co issioner

/-d/~ r;/zfh1

I Karl VSandstrorn Date

Commissioner

Given the procedural and substantive infirmities with the "electioneering

message" standard, the Commission may not employ it in administering the FECA, the

Presidential Primary Matching Payment Account Act, the Presidential Election Campaign

Fund Act, or its own regulations.

/(\'/1//._, / I ,fJJ1v'f11jt1~:/t!tft,; t-~'1!¥1

Darryll{, Wold Date

f1~~ ;)p/1j

David M. Mason Date

Commissioner

6
March 23, 2000

MEMORANDUM

TO:

THROUGH:

FROM:

BY:

FEDERAL ELECTION COMMISSION

WASHING TON, 0 C 20463

The Commission

James A. Pehrkon

Staff Director

Lawrence M. Noble

General Counsel

l.;:im Leslie Bright

Associate General Counsel

/!d~ RECEIVED

FEDERAL ELECTION

COMl11SSION

SECF~ T\RIAT

2000 MAR 21 P lj: 10

SUBJECT: President Clinton and the Clinton/Gore '96 Primary Committee, Inc.

(LRA #529)

Pursuant to the Commission's March 16, 2000 discussion and detennination in

connection with Agenda Document No. 00-31, attached for your infonnation is a letter to Lyn

Utrecht, counsel for the Clinton/Gore '96 Primary Committee, Inc. The letter summarizes the

Commission's action with respect to the Future Tech disgorgement detennination.

If you have questions about this letter, please contact Andre G. Pineda, the attorney

assigned to this matter.

Attachment

Letter from Kim Leslie Bright to Lyn Utrecht
FEDERAL ELECTION COMMISSION

WASHINGTON. DC 20463

Lyn Utrecht, Esq.

Ryan, Phillips, Utrecht & MacKinnon

1133 Connecticut Avenue, N.W.

Suite 300

Washington, D.C. 20036

•

Dear Ms. Utrecht:

Re: Clinton/Gore '96 Primary Committee, Inc.

Disgorgement Payment (LRA #529)

On July 15, 1999, the Commission determined that President Clinton and the

Clinton/Gore '96 Primary Committee, Inc. (collectively "the Committee") must disgorge $25,000

to the United States Treasury for contributions that were identified as being part of a corporate

contribution scheme involving Future Tech International ("Future Tech") and its corporate

officers. By letter dated October 8, 1999, the Committee sent the Office ofGeneral Counsel a

$25,000 check made payable to the United States Treasury. In addition to enclosing the

disgorgement payment, the letter indicated that the Committee is "somewhat concerned about the

Commission's authority to order the disgorgement, particularly in light ofa lawsuit that has been

related to a Commission disgorgement order to another 1996 presidential campaign." The

Committee's letter also stated that U[w]e assume that the Commission would defend [it] should

any legal action be brought against the Committee to seek return ofthese funds to the

contributor."

Although the letter does not identify the lawsuit, it appears that it is referring to Fireman

v. United States, 44 Fed. C1. 528 (1999), a United States Court of Federal Claims decision which

granted, in part, and denied, in part, a motion to dismiss that was filed by the Department of

Justice ("DOJ"). The lawsuit, filed by Simon C. Fireman, was a claim against the United States

for $69,000 pursuant to 28 U.S.c. § 1491 ("the Tucker Act"). The amount sought was equal to

the amount of contributions Mr. Fireman and Aqua-Leisure Industries, Inc. made to the Dole for

President Committee, Inc. and the Dole for President Compliance Committee, Inc. (collectively

"the Dole Committees"), which were later disgorged to the United States Treasury by the Dole

Committees. On November I, 1999, the United States Court of Federal Claims dismissed Mr.

Fireman's lawsuit.

On March 16, 2000, the Commission determined to retain the disgorgement with the

United States Treasury. Please note that any Tucker Act claim tiled in the United States Court

(

(.

2- 'j
F~

fbi ,~ .. '

L,-. Utrecht

Page 2

of Federal Claims by a donor for monies disgorged by the Committee would name the United

States as a party. Accordingly, it appears that the Committee would not properly be named a

party to such a claim.

My Office will keep you apprised of any developments regarding this matter, should any

occur. If you have aD" questions, please contact Andre G. Pineda, the attorney assigned to this

matter, at (202) 694-1650.

Sincerely,

Kim Leslie Bright

Associate General Counsel

I --~--

1 ")-1

_·,~.L".""'Jl':':!~"::'""""
I

i't

~";'''r;;;'"J.l;'''

~'. ;- ...... ",~.

E[i [ .( !\ f : ' ]'~', r;

C:" .,: '.: .. ;: : .

... '":" ."

FEDERAL ELECTION COMMISSION

WASHINGTON. DC 204&3

September 7, 1999

SUBJECT: REPAYMENTS RECENED FROM CLINTON/GORE '96 PRIMARY

COMMITTEE, INC, & CLINTON/GORE '96 GENERAL COMMITTEE,

INC,

THE COMMISSION

FROM:

THROUGH:

TO:

On August 12, 1999 the subject committees submitted their responses to the audit

reports approved by the Commission. In the case ofthe Clinton/Gore 1996 primary

campaign, a check in the amount of$11,180, payable to the United States Treasury, was

included to satisfy the amount due the Treasury related to stale-dated checks.' The

repayment ($114,450) related to non-qualified campaign expenses cited in the audit

report was obviated by virtue ofthe primary campaign having made or received

reimbursements to/from the general campaign as discussed in the audit report.

•

OJ

~"

i Yi '.'-r/

\

With respect to the Clinton/Gore 1996 general campaign a check in the amount of

$3,241, payable to the United States Treasury, was included to satisfy the amount due the

Treasury related to interest earned (less applicable taxes). The repayment ($12,427)

related to non-qualified campaign expenses cited in the audit report was obviated by

virtue ofthe general campaign having received a reimbursement from the primary

campaign as discussed in the audit report.

Photocopies ofthe receipts indicating delivery ofthe repayment checks to the

United States Treasury are attached. If you have any questions, please contact Ray Lisi

or Tom Nurthen at 694-1200.

Attachments as stated

I The aITl()unt (SI2,230) cited in the audit report was adjusted to account for SI,050 in checks which cleared the bank, leaving

SII.180 due the Treasury.
FEDERAL ELECTION COMMISSION

WASHING TON. 0 C /04!> I

n.

=

. August 3 I, 1999

RECEIPT FROM THE

UNITED STATES DEPARTMENT OF TREASURY

FORA

PAYMENT TO THE GENERAL FUND OF THE U. S. TREASURY

Received on August 31, 1999 from the Federal Election Commission (by

hand delivery) a check drawn on Nations Bank, N. A. for $3,241.00.

The check represents a payment for interest income on federal funds

from the Clinton/Gore '96 General Committee, Inc.

The payment should be deposited into the General Fund ofthe

U. S. Treasury.

Clinton/Gore '96 General Committee, Inc.

Amount ~f Payment: $3,241.00

",,--..

Presented by: Received by:

I

!Jl~LL8& for the

United States Treasury

....~---
FEDERAL ELECTION COMMISSION

August 31, 1999

RECEIPT FROM THE

UNITED STATES DEPARTMENT OF TREASURY

FORA

PAYMENT TO THE GENERAL FUND OF THE U. S. TREASURY

Received on August 31, 1999 from the Federal Election Commission

(by hand delivery) a check drawn on Nations Bank, N. A. for $11,180.

The check represents a payment for stale dated checks from

Clinton/Gore '96 Primary Committee, lnc.

The payment should be deposited into the General Fund ofthe

U. S. Treasury.

Clinton/Gore '96 Primary Committee, Inc.

Amount of Payment: $11,180

Federal

Presented by: Received by:

trkL/;Jd!4

for the

United States Treasury
Attached is the revised Notice ofRepayment Determination and Disgorgement

Detennination circulated for infonnational purposes. On June 15, 1999, the Commission

detennined that President Clinton and the Clinton/Gore '96 Primary Committee, Inc.

(collectively "the Committee") must repay $10,948.25 to the United States Treasury for

receiving funds in excess of entitlement. On the same date, the Commission also determined that

the Committee must disgorge $25,000 for contributions that were associated with the Department

ofJustice Campaign Task Force Investigation of Future Tech International, Inc., et al.

MEMORANDUM

TO:

THROUGH:

FROM:

SUBJECT:

FEDERAL ELECTION COMMISSION

WASHINpON. DC 20463

August 4, 1999

The Commission

James A. Pehrkon

Staff Director

Lawrence M.NOb:-t

General Counsel /1.-/

President Clinton and the Clinton/Gore '96 Primary Committee, Inc.

(LRA#529)

At the July 15, 1999 meeting on this malter, the Commission approved a draft Notice of

Repayment Detennination with the condition that this Office add language setting forth the basis

ofthe disgorgement detennination. The attached Notice ofRepayment Determination and

Disgorgement Determination contains this additional language. Stafffrom this Office has been

in contact with the offices ofCommissioners Mason and Thomas regarding this language.

This Office will send the attached Notice ofRepayment Determination and Disgorgement

Detennination to the Committee at the conclusion ofthe circulation period, unless we receive an

objection. If you have any questions, please contact Andre G. Pineda, the attorney assigned to

this malter, at 694-1650.

Attachment

Notice of Repayment Determination and Disgorgement Determination
BEFORE THE FEDERAL ELECTION COMMISSION

In the Matter of )

)

President William J. Clinton )

Clinton/Gore '96 Primary Committee, Inc. )

)

LRA#529

•

•

u

•

NOTICE OF REPAYMENT DETERMINATION AND DISGORGEMENT

DETERMINATION

On July 15, 1999, the Federal Election Commission ("the Commission") determined that

President William J. Clinton and the Clinton/Gore '96 Primary Committee, Inc. (collectively

"the Committee") must repay $10,948.25 to the United States Treasury for receiving funds in

excess of entitlement. 26 U.S.C. § 9038(b)(I). Specifically, the Commission determined that the

Committee must repay payments or portions ofpayments made on the basis ofmatched

contributions later determined to have been non-matchable. 11 C.F.R. § 9038.2(b)(1)(iii). The

Committee is ordered to pay $10,948.25 to the United States Treasury within 90 calendar days

after service ofthis determination. 11 C.F.R. §§ 9038.2(c)(1) and (d)(1). This Notice of

Repayment Determination sets forth the legal and factual basis for the repayment determination.

11 C.F.R. § 9038.2(c)(l).

On July 15, 1999, the Commission also determined that the Committee must disgorge

$25,000 to the United States Treasury for 25 contributions that were associated with the

Department ofJustice CDOJ") Campaign Finance Task Force ("Task Force") investigation of
; -=,

2

Future Tech International, Inc., et al., and the subsequent criminal guilty pleas that were entered

into as a result ofthat investigationl

. See infra, pp. 3-6 and 8-10.

I. BACKGROUND

In 1995 and 1996, President Clinton was a candidate for the Democratic presidential

nomination. On April 14, 1995, the Committee registered with the Commission. On

October 31, 1995, the Commission determined that the Committee was eligible to receive public

funds under the Presidential Primary Matching Payment Account Act ("the Matching Payment

Act,,).2 26 U.S.C. §§ 9031-9042; see also, Memorandum to the Commission entitled

Notification 0/Date a/Ineligibility - President William J. Clinton (LRA#485), dated

August 29, 1996. The Committee received $13,412,198 in public funds pursuant to the

Matching Payment Act.) See Report ofthe Audit Division on Clinton/Gore '96 Primary

Committee, Inc. (approved June 3, 1999) ("the audit report").

The DOJ created the Task Force to investigate alleged violations ofthe Federal Election

Campaign Act of 1971, as amended ("the FECA"), by various individuals and entities that may

have occurred during the 1995-1996 Presidential election cycle. The investigations resulted in

The repayment procedures described at II C.F.R. §§ 9038.2(c) and 9038.5 do not apply to the

disgorgeme'nt determination.

Pursuant to the Matching Payment Act, the Committee was entitled to received public funds for campaign

activity through August 28, J996, the date that President Clinton garnered the Democratic presidential nomination.

26 U.S.c. §§ 9031-9042; see also, 11 C.F.R. §§ 9032.6 and 9033.5.

The Commission conducted an audit and examination of the Committee's receipts, disbursements and

qualified campaign expenses, as provided for in the Matching Payment Act and the Commission's regulations.

26 U.S.C. § 9038(a) and 11 C.F.R. § 9038.1. The findings of the audit and examination are contained in the Report

ofthe Audit Division on Clinton/Gore '96 Primary Committee, Inc. (approved June 3, 1999) ("the audit report").

The faces which are the basis for the additional repayment determination set forth in this Notice of Repayment

Determination and Disgorgement Determination were not included in the audit report. See 11 C.F.R. § 9038.2(f).
3

criminal indictments against individuals and entities for their activity involving contributions to

the Committee.

One ofthe Task Force investigations involved Future Tech International, Inc. ("Future

Tech"); Mark Vision Computers, Inc. ("Mark Vision"); Mark Jimenez, the ChiefExecutive

Officer ("CEO") of Future Tech; and Juan Ortiz, the Chief Financial Officer ("CFO") of Future

Tech (collectively "the Future Tech investigation").4 Another involved Johnny Chung.

One aspect ofthe Future Tech investigation involved 25 contributions to the Committee

totaling $25,000.5 Future Tech was a Miami, Florida based corporation whose primary business

involved the distribution ofcomputer components and related equipment in South America; it

also distributed equipment manufactured by leading United States companies. Attachment Bat

18 and Attachment C at 24. Mark Vision was a Florida corporation that assembled computer

systems. Attachment B at 18 and Attachment C at 26. Mr. Jimenez was CEO ofFuture Tech; he

also exerted "substantial control" over Mark Vision. Attachment B at 17-18 and Attachment C at

24 and 26.

Beginning "at least as early as September 1994, and continuing until in or about

November of 1996," Future Tech, with the knowledge and consent ofMr. Jimenez, "devised and

executed a scheme whereby corporate money belonging to [Future Tech] would be used to make

On September 30, 1998, DOJ filed an indictment against Mr. Jimenez alleging violations of 2 U.S.C.

§ 441fand 18 U.S.C. §§ 2, 371, and 1001. Attachment A at I. On Aprill5, 1999, DOJ filed another indictment

against Mr. Jimenez alleging violations of2 U.S.c. § 441 f, 18 U.S.C. §§ 2, 371, 1001, and 1343 as well as

26 U.S.C. § 7201; the April 15th indictment purportedly incorporates the allegations contained in the September 30th

indictment. Mr. Jimenez reportedly is residing in the Philippines, and the United States has reportedly requested

that Mr. Jimenez be extradited to the United States.

The Future Tech investigation involved contributions to the Committee as well as contributions to other

political committees. See Attachments A-C. This Notice concerns only those contributions to the Committee that

were identified by DOJ as part ofthe Future Tech investigation.
4

secret, disguised and illegal corporate campaign contributions to various federal candidates ...

and their political committees." Attachment C at 30. To execute this scheme, Mr. Jimenez

identified candidates that Future Tech would support, then "solicited or instructed others to

solicit campaign contributions from numerous conduits," including Future Tech and Mark Vision

employees. Id. Future Tech agreed to reimburse these conduits for their contributions with

either Future Tech or Mark Vision funds or with Mr. Jimenez' personal funds. Id. These

reimbursements were disguised in Future Tech and Mark Vision books and records "by coding

the reimbursements as employee wages, bonuses, adjustments to regular wages, or 'other.",6 [d.

Later, at the direction ofMr. Jimenez, Future Tech reimbursed conduit contributors by cash. Id.

at 31. The treasurer of Future Tech "exchanged checks from Jimenez' personal bank account for

id cash available at [Future Tech] and distributed that cash to conduit campaign contributors as

n~ reimbursement for their contributions ... " Id.

fiJ

Around July 1995, Mr. Jimenez pledged to raise $25,000 in connection with a Committee

fundraising event that was held in Miami, Florida on September 19, 1995. [d. at 34. Around

September 1995, Mr. Jimenez informed Mr. Ortiz, as well as Future Tech's President and

Operations Vice-President, "that he needed $25,000 from 25 [Future Tech] employees in

personal $1,000 checks." Id. Mr. Jimenez instructed "certain [Future Tech] employees to solicit

the checks from employees in their departments and that they would be reimbursed." [d. Based

on his past experience, Mr. Ortiz reimbursed the employees who gave checks through Future

Tech and Mark Vision payroll systems. Id.

This scheme included Future Tech and Mark Vision reimbursement to employees through payroll

accounts. Attachment C at 30.
5

In September 1995, Mr. Jimenez arranged for 26 individuals to make contributions to the

Committee and to have Future Tech and Mark Vision reimburse these individuals for their

contributions. Between September 6, 1995 and September 8, 1995, Mr. Jimenez solicited Mr.

Ortiz for a $1,000 personal check payable to the Committee and promised him reimbursement.

Attachment B at 22-23 and Attachment C at 35. On or about September 6, 1995, Mr. Ortiz wrote

a personal check for $1,000 to the Committee. Attachment B at 22. Between September 6, 1996

;£) and September 8, 1995, Mr. Jimenez also "collected or caused to be collected 25 checks payable

to the [Committee] in the amount 0[$1,000." Attachment C at 35.

Shortly after September 6, 1995, Mr. Ortiz was given a list of approximately 23 Future

Tech or Mark Vision employees who were asked to make personal checks payable to the

\:}. Committee. Attachment B at 23. Between September 6, 1995 and September 8, 1995, Mr. Ortiz

"

instructed a Future Tech accounting department employee to contact Automated Data Processing

("ADP"), Future Tech's and Mark Visions' payroll processor, to arrange [or corporate

reimbursement to 15 non-executive and eight executive employees who had contributed $1,000

each to the Committee. Id.; see also, Attachment C at 35. Pursuant to this request, ADP

"executed the requested reimbursements to 23 [Future Tech] and [Mark Vision] employees with

payroll checks or credits in the net amount of approximately $1,000" on or about

September 8, 1995.7 Id. Once these transactions were completed, Mr. Jimenez "delivered or

caused to be delivered 25 [$1,000] checks" on or about September 13, 1995 to the Committee.

Attachment C at 36.

These reimbursements were coded as "bonus" or "other" to "conceal the fact ofreimbursements from

auditors. lawyers and the [Internal Revenue Service]." Attachment C at 35-36.
6

Twenty-five checks submitted by the Committee for matching funds were associated with

Future Tech and Mark Vision.s Attachment D. The Committee received $6,083.25 in matching

funds for these contributions (25 x $243.33).9 Id

Another target ofthe Task Force investigation was Johnny Chung ("the Chung

investigation"). One aspect ofthe Chung investigation involved 20 contributions to the

Committee totaling $20,000. 10 Mr. Chung was the chief executive officer and majority

shareholder ofAutomated Intelligent Systems, Inc. ("AISI"), a California corporation.

Attachment E at 1. On September 21, 1995, Mr. Chung attended a Committee fundraising event

in Century City, California with "approximately twenty guests;" the cost for attending the event

was $1,000 a person. Id at 7. To pay for the attendance ofhis guests at this event, Mr. Chung

and others agreed on September 22, 1995 to an arrangement whereby Mr. Chung would

contribute "at least $20,000 of his own money" to the Committee that he would disguise as

contributions from other persons. Id. at 7-8. Mr. Chung instructed an AISI employee to recruit

conduit contributors "by asking them to write individual checks [for $1 ,000 to the Committee],

drawn on their own checking accounts." Id. at 8. Mr. Chung then directed that cash be

The Audit Division queried the Committee's database and its related matching fund database; based on

these queries, 25 individuals associated with Future Tech, and one individual associated with Mark Vision, were

identified as each making a $1,000 contribution to the Committee. Attachment D at I. In addition, the Audit

Division identified one contributor who had the same address as another contributor who listed his employer as

Future Tech, and another individual whose check to the Committee was returned for non-sufficient funds. Id. The

Commission's repayment determination does not include any matching funds that may have been paid for the

former contribution. Nor does it include the latter contribution, as it was not submitted for matching.

The Committee submitted 25 checks for matching; thus, it sought $250 in matching funds for each

submitted check. See 26 U.S.C. § 9034(a). The total amount ofmatching funds approved was $6,083.25 (25 x

$250 x .9733). Attachment D at 3.

10 Like the Future Tech investigation, the Chung investigation involved contributions to the Committee, as

well as contributions to another political committee. See Attachment C at 6-12. Additionally, the Chung

investigation involved tax evasion and bank fraud. Id. at 1-5. This Notice concerns only those contributions to the

Committee that were identified by DOJ as part of the Chung investigation.
7

withdrawn from two ofhis personal bank accounts and delivered to him and an AlSI employee at

AISI's offices; he also directed an AlSI employee to deliver $1,000 in cash to each of20 conduit

contributors to reimburse them for their contributions. Id. Mr. Chung also directed an AISI

employee to deliver the 20 conduit checks to the Committee. I I Id.

Twenty checks submitted by the Committee for matching funds were associated with

Johnny Chung. Attachment F. The Committee received $4,865 in matching funds for these

'1J contributions (20 x $243.25).12 Id.

II. ANALYSIS

A. LAW

Candidates who are eligible to receive public funding under 26 U.S.C. § 9033 may

submit contributions that they receive from their contributors for matching of up to $250 for each

individual contributors' contribution. 26 U.S.C. § 9034(a). However, certain types of

contributions are not matchable. I I C.F.R. § 9034.3. Contributions from a corporation or

contributions made in the name of another cannot be matched with public funds. 11 C.F.R.

§§ 9034.3(d) and (e); see 2 U.S.C. § 441 band 44If. If a contribution was matched and it is later

determined to be non-matchable, the Commission may seek a repayment to the United States

Treasury for the non-matchable payment. 26 U.S.C. § 9038(b)(I) and I I C.F.R.

§ 9038.2(b)( I)(iii). A committee may be required to make an additional repayment to the United

II Additional details pertaining to the Chung contributions are contained in an Interim Report from the

Committee on Government Reform and Oversight Campaign Finance Investigation and Related Matters, Chapter

IV, Part C (Johnny Chung: His Unusual Access to the White House and His Political Donations).

<http://www.house.gov/reform/reports/fundraising/4c_chung.html>.

12 The Committee submitted 20 checks for matching; thus, it sought $250 in matching funds for each

submitted check. See 26 U.S.C. § 9034(a). The total amount of matching funds approved was $4,865 (20 x $250 x

.9730. Attachment F at I.
8

States Treasury when there exist facts not used as the basis for any previous detennination.

11 C.F.R. § 9038.2(f). Any additional repayment detennination will be made in accordance with

11 C.F.R. § 9038.2. Id.

A guilty plea in a criminal matter "is the equivalent ofadmitting all material facts alleged

in the charge." United States v. Kelsey, 15 Fed. 3'd 152, 153 (loth Cir. 1994). A knowing and

voluntary plea constitutes an admission of all material facts alleged in an indictment and a waiver

j~1

\Q' of all non-jurisdictional defects in the proceeding. United States v. McFarlane, 881 F. Supp.

562, 565-66 (M.D. Fla. 1995), affd, 140 F.3d 1042 (11 th Cir. 1998). Ifa guilty plea is "voluntary

(and entered with effective assistance of counsel), it is conclusive on all factual and legal issues

other than a contention that the very initiation ofthe proceedings violated the Constitution."

Young v. United States, 124 F.3d 795, 797 (7th Cir. 1997), cert. denied, 118 S.Ct. 2324 (1998).

B. DISCUSSION

1. The Future Tech Investigation

The infonnation underlying Future Tech's and Mr. Ortiz's guilty plea is sufficient to

conclude that the related contributions to the Committee were non-matchable. By signing the

plea agreements and factual resumes, Future Tech and Mr. Ortiz have agreed that all ofthe facts

surrounding the pleas are true. See Kelsey, 15 F.3d at l53. The plea agreements and factual

resumes demonstrate that the source ofthe funds used for the contributions to the Committee

were Future Tech monies and the contributions were made by the contributors at the direction of

Future Tech officials. Therefore, the contributions should not have been matched. See 11 C.F.R.

§ 9034.3(d) and (e).

On January 5, 1999, Mr. Ortiz pled guilty to violating 2 U.S.C. § 441ffor his

involvement in the contributions at issue in the Future Tech investigation. Attachment Bat 2-16.
•

9

The factual resume accompanying the plea agreement sets forth the basis for his guilty plea and

includes specific reference to the reimbursement scheme outlined in the DOJ indictment against

Mr. Jimenez. Attachment B at 17-28; see also, pp. 3-6, supra.

On December 17, 1998, Future Tech pled guilty to violating 26 U.S.C. § 7201 for filing

false Federal Income Tax forms stemming, in part, from the Committee conduit contribution

scheme. Attachment C at 4-23. The factual resume accompanying the plea agreement sets forth

the ba~is for the guilty plea and includes specific reference to the reimbursement scheme.

Attachment C at 34-37; see also, pp. 4-6, supra.

The guilty pleas entered into by Mr. Ortiz and Future Tech are "the equivalent of

admitting all material facts alleged in the [indictment]." United States v. Kelsey, 15 Fed. 3'd 152,

153 (lOth Cir. 1994) and United States v. McFarlane, 881 F. Supp. 562, aff'd, 140 F.3d 1042

(3'd Cir. 1998). The plea agreements were entered into voluntarily and there is no indication that

Mr. Ortiz and Future Tech received ineffective assistance of counsel; accordingly, "[the plea

agreements are] conclusive on all factual and legal issues." Young v. United States, 124 F.3d

795, 797 (7th Cir. 1997), cert. denied, 118 S.Ct. 2324 (1998).

The conduit contribution scheme described in the Ortiz and Future Tech plea

agreements and factual resumes clearly indicate that the contributions to the Committee

associated with the Future Tech investigation were in violation ofthe FECA. As a result,

the Committee should not have received matching funds for these contributions and it

should repay $6,083.25 to the United States Treasury.13 11 C.F.R. § 9034.3(e).

1l The factual resumes for Mr. Ortiz and Future Tech collectively refer to 26 contributions. See pp. 4-6,

supra. However, they also refer to a payroll reimbursement scheme involving 23 individuals. Id The

Commission's review ofthe Committee's matching fund submissions identifies 25 contributions that are associated

with Future Tech and Mark Vision. Attachment D. The Commission's repayment determination is based on the

number of contributions that were submitted for matching. See note 8, supra.
10

2. The Chung Investigation

The infonnation underlying Mr. Chung's guilty plea is also sufficient to conclude that the

related contributions to the Committee were non-matchable. By signing a plea agreement, Mr.

Chung agreed that all ofthe facts surrounding the plea are true. See Kelsey, IS F.3d at 153.

Although Mr. Chung's plea agreement was filed under seal and has not been publicly released,

his indictment demonstrates that the source ofthe funds used for the contributions to the

Committee were his own and the contributions were made by the contributors at the direction of

Mr. Chung. Therefore, the contributions should not have been matched. See 11 C.F.R.

§ 9034.3(d) and (e).

On March 16, 1998, Johnny Chung pled guilty to violating 2 U.S.C. §§ 441a, 44lf and

437g(a), 18 U.S.c. §§ 371 and 1344 as well as 26 U.S.C. § 7201. Chung Pleads Guilty (last

modified March 16, 1998) <http://www.cnn.com!ALLPOLITICS/ 1998/03/16/chung.pleads/

index.html>. Although Mr. Chung's plea agreement was filed under seal, his indictment sets

forth the basis for his guilty plea and includes specific reference to the conduit contribution

scheme. Attachment E at 6-9; see also, pp. 6-7, supra.

The guilty plea entered into by Mr. Chung is "the equivalent of admitting all

material facts alleged in the [indictment]." United States v. Kelsey, 15 Fed. 3'd 152, 153

(lO'h Cir. 1994) and United States v. McFarlane, 881 F. Supp. 562, affd, 140 F.3d 1042

(3rd Cir. 1998). The plea agreement was entered into voluntarily and there is no evidence

which indicates that Mr. Chung received ineffective assistance of counsel; accordingly,

"[the plea agreement is] conclusive on all factual and legal issues." Young v. United

States, 124 F.3d 795, 797 (7th Cir. 1997), cert. denied, 118 S.Ct. 2324 (1998).
II

The conduit contribution scheme described in the Chung indictment, as well as

the Interim Report from the Committee on Government Refonn and Oversight Campaign

Finance Investigation and Related Matters, clearly indicate that the contributions to the

Committee associated with the Chung investigation were in violation ofthe FECA. As a

result, the Committee should not have received matching funds for these contributions

and it should repay $4,865 to the United States Treasury. II C.F.R. § 9034.3(e).

W III. DISGORGEMENT

A. LAW

Disgorgement is an equitable remedy which serves "to prevent defendants from profiting

from their illegal conduct." SECv. Bilzerian, 814 F. Supp. 116,121 (D.D.C.1993),ajJ'd,SEC

v. Si/zerian, 29 F. 3d. 689 (D.C. Cir. 1994); see also, SEC v. Tome, 833 F. 2d 1086, 1096 (2nd

Cir. 1987). Disgorgement also prohibits unjust enrichment and deprives the wrongdoer ofillgotten gains. SEC v. First Financial Corp., 890 F.2d 1215, 1231 (D.C.Cir. 1989); SEC v.

Commonwealth Chemical Securities, Inc., 574 F. 2d. 90, 95 (2nd Cir. 1978). Disgorgement does

not constitute punishment. SEC v. Bilzerian, 29 F. 3d. 689, 696 (D.C. Cir. 1994).

Governmental agencies can order disgorgement as an appropriate remedy, even in the

absence of a specific statutory provision, if an agency's enabling statute pennits equitable

relief. I. SEC v. Texas GulfSulphur Co., 446 F. 2d 1301, 1307 (2d Cir. 1971), cert denied, 404

U.S. 1005 (I 971); see also, CFTC v. Hunt, 591 F.2d 121 I, 1222 (7th Cir. 1979). Disgorgement

14 Federal agencies whose enabling statutes do not specifically permit equitable relief can avail themselves of

the disgorgement remedy based on "the traditional equity powers ofa court." CFTC v. Hunt, 591 F.2d 1211, 1222

(7"' Cir. 1979); see also, SEC v. First Financial Corp., 890 F.2d 1215, 1230 (D.C. Cir. 1989).
12

ofill-gotten gains have been made payable to the United States Treasury. See u.s. v. Bonanno

Organized Crime Family, 683 F. Supp. 1411 (E.D.N.Y. 1988), afJ'd, 879 F.2d 20 (2d. Cir. 1989).

B. DISGORGEMENT DETERMINATION

The Commission has required political committees to disgorge excessive and prohibited

contributions to the United States Treasury in a variety ofcircumstances. 15 For example, the

Commission has required publicly-funded committees to disgorge monies to the United States

Treasury for excessive or prohibited contributions in the 1992 and 1996 election cycles. 16 See

Explanation and Justification for 11 C.F.R. § 9007.1,60 Fed Reg. 31863 (June 16, 1995)

(Disgorgement in the public financing context eliminates the need to monitor the refunds of

excessive or prohibited contributions that have not been timely refunded, permits one payment

to be made to United States Treasury, rather than refunding multiple contributions, and is a

practical solution when a sample review has revealed excessive or prohibited contributions).

The Commission has also required the disgorgement of excessive and prohibited

contributions in signed conciliation agreements with political committees. 17 Moreover, the

" In the mid-1970's, the President Ford Committee paid monies to the United States Treasury for apparent

excessive contributions. See Memorandum to Robert 1. Costa from Charles N. Steele entitled Response of the

Mondale for President Committee, Inc. to the Interim Addendum to the Final Audit Report, p. 2. (undated). In the

early 1980's, the Kennedy for President Committee disgorged to a charity an amount equal to the contributions that

the Commission had identified as being legally suspect. ld Finally, in 1987, the Mondale for President Committee,

Inc. disgorged an amount equal to outstanding stale-dated checks to a tax exempt charitable organization based on a

Commission determination. See Memorandum to Robert J. Costa from Lawrence M. Noble and Kim L. BrightColeman entitled Addendum to the Final Audit Report on the Mondale for President Committee, Inc. (LRA 203), p.

4, dated May 26, 1987.

'6 For the 1992 election cycle, the following committees made disgorgements to the United States Treasury:

Buchanan for President, Americans for Harkin, Inc., Tsongas for President Committee, Inc. (disgorgement required,

but never made), Bush-Quayle '92 Primary Committee, Inc. and Wilder for President Committee. For the 1996

election cycle, the Commission required Arlen Specter '96 to disgorge monies to the United States Trea~ury for

excessive or prohibited contributions.

11 See MURs 1704 (Mondale for President Committee, Inc., et al.), 2595 (Populist Party), 2992 (People for

Joseph DioGuardi), 3309 (Dole for President), 3360 (Kemp for President), 347\ (Gantt for Senate Campaign

Committee), 4194 (Mascara for Congress, et al.), 4427 (Elgin Builders, Inc., et al), and 4259 (Lautenberg
13

Commission has recommended disgorgement ofimproper contributions by non- presidential

committees that have been selected for audit pursuant to 2 U.S.c. § 438(b).18 Finally, the

Commission has recommended disgorgement as an appropriate remedy in the advisory opinion

process. 19

The information obtained by the Task Force investigation regarding contributions to the

Committee that were associated with Future Tech is sufficient to conclude that they were legally

suspect. See, supra, p. 3-6 and 8-10. By signing the plea agreements and factual resumes,

Future Tech and Mr. Ortiz have agreed that all ofthe facts surrounding the pleas are true. See

Kelsey, 15 F.3d at 153. The plea agreement and factual resumes demonstrate that the source of

funds used for the 25 contributions identified by the Audit Division were Future Tech monies,

and that the contributions were made by donors at the direction ofFuture Tech officials.

Accordingly, based on past Commission practice, the Committee is required to disgorge $25,000

to the United States Treasury, an amount equal to the 25 Future Tech related contributions. See

Bilzerian, 814 F. Supp. at 121 and First Financial Corp., 890 F.2d at 1231.

Committee, et al). In the 1980's, the Commission also obtained a disgorgement remedy for illegally solicited

contributions in a consent order involving the National Right to Work Committee. See Memorandum to Robert J.

Costa from Charles N. Steele entitled Response of the Mondale for President Committee, Inc. to the Interim

Addendum to the Final Audit Report, p. 2. (undated).

The Commission has also sought disgorgement in the following matters, even though disgorgement was

not included in signed conciliation agreements: MURs 2241 (MondaIe for President Committee, Inc.), 2892

(Waihee, et al.), 4235 (Murkowski for U.S. Senate Committee, et al.), 3460 (Sports Shinko (Pukalani) Co., Ltd., et

al.), and 4582 (Indian-American Leadership Investment Fund, et al.).

" See Report of the Audit Division on the Republican Campaign Committee of New Mexico, p. 18 (approved

July 30, 1996) and Report of the Audit Division on Kemp for Vice President, p. 8 (approved May 13, 1999).

" See Advisory Opinion (HAO") 1991-39 (Friends of Senator D'Amato); AO 1995-19 (Indian-American

Leadership Investment Fund) and AO 1996-5 (Jay Kim for Congress).
•

14

IV. CONCLUSION

For the foregoing reasons, the Commission has determined that President William

J. Clinton and the Clinton/Gore '96 Primary Committee, Inc. must repay $10,948.25

($6,083.25 for the Future Tech-related contributions + $4,865 for the Chung-related

contributions) to the United States Treasury for payments or portions ofpayments made

on the basis ofmatched contributions later determined to have been non-matchable.

II C.F.R. § 9038.2(b)(l)(iii). Accordingly, President William J. Clinton and the

Clinton/Gore '96 Primary Committee, Inc. are ordered repay $10,948.25 to the United

States Treasury. 11 C.F.R. §§ 9038.2(c)(I) and (d)(I).

The Commission has also determined that President William J. Clinton and the

Clinton/Gore '96 Primary Committee, Inc. must pay $25,000 to the United States

Treasury for 25 contributions that were associated with the Department ofJustice

Campaign Task Force Investigation of Future Tech International, Inc., et al.

Attachments

A. Indictment of Mark B. Jimenez filed on September 30, 1998 in the United States District

Court for the District ofColumbia

B. Information, Plea Agreement, and Factual Resume ofJuan M. Ortiz filed on

December 17, 1998 in the United States District Court for the District ofColumbia (with

DO) notations)

C. Information, Plea Agreement, and Factual Resume of Future Tech International, Inc. filed on

December 17, 1998 in the United States District Court for the District ofColumbia

D. Memorandum to the Office ofGeneral Counsel from the Audit Division dated

December 29, 1998

E. Indictment ofJohnny Chung filed on March 5,1998 in the United States District Court for

the Central District ofCalifornia

F. Memorandum to the Office of General Counsel from the Audit Division dated June 16, 1999.
FEDERAL ELECTION COMMISSION

WASHINGTON.O.C 20403

November 5, 1999

Nov 5 4 P:~ ''''l

I I II oJ"

MEMORANDUM

TO:

THROUGH

FROM:

BY:

The Commission

James A. Pehrkon

StaffDirector

Lawrence M. Noble

General Counsel

Kim Bright-Coleman

Associate General Cou,el

Rhonda J. Vosdingh

Assistant General Counsel

Delanie DeWitt Painter

Attorney

SUBJECT: Status ofRepayment Determinations - Clinton/Gore'96 Primary Committee,

Inc., Clinton/Gore '96 General Committee, Inc. and Clinton/Gore '96 General

Election Legal and Accounting Compliance Fund (LRA #485 and #508)

On June 3, 1999, the Commission approved the audit reports on the Clinton/Gore'96

Primary Committee, Inc. ("Primary Committee"), the Clinton/Gore '96 General Committee, Inc.

("General Committee") and the Clinton/Gore '96 General Election Legal and Accounting

Compliance Fund ("GELAC") (collectively, the "Committees") containing the Commission's

repayment determinations and payment determinations. l The audit reports recommended that

most ofthe repayments would not be necessary ifspecific amounts offunds were transferred

among the Committees. The Committees were notified ofthe determinations by letters dated

The repayments and payments arising from the Commission's audits of the Committees are distinct from

the Commission's repayment determination on July 15, 1999, which was based on the Primary Committee's

receipt of matching funds in excess of its entitlement for illegal contributions related to a corporate contribution

scheme involving Future Tech International and its corporate officers and a reimbursement scheme involving

Johnny Chung. See 26 U.S.C. § 9038(b)(l); 11 C.F.R. § 9038.2(b)(l)(iii).
Memorandum to the Commission. -

Status ofRepayment Determinations -

Clinton/Gore'96 Committees (LRA #485 and #508)

Page 2

June 10, 1999. On August 12, 1999, the Committees filed ajoint response and attached payment

and repayment checks for stale-dated checks and interest income, as well of documentation of

several transfers recommended in the audit reports, which obviated the remaining repayments2

Attachment I. Because the checks and documentation submitted resolve all ofthe outstanding

repayment and payment matters for the Committees, these repayment matters are now concluded.

The Committees' response states that the Committees are "providing this information in

order to demonstrate that a lesser repayment is required in each oftheir respective cases."

Attachment I at 1. On September 9, 1999, staff ofthis Office contacted the Committees' counsel

to clarify whether the Committees dispute the repayment determinations and seek an

administrative review pursuant to 11 C.P.R. §§ 9007.2(c)(2) and (3) and 9038.2(c)(2) and (3).

The Committees' counsel stated that it was her understanding that the checks and documentation

submitted by the Committees would resolve the repayment matters and there are no issues

remaining in dispute; therefore an administrative review would not be necessary.

The Commission determined that the Primary Committee must repay $114,450 to the

United States Treasury for non-qualified campaign expenses that were allocable to the general

election pursuant to II c.P.R. § 9034.4(e), including $7,260 for catering services, $20,133 for

equipment, $77,581 for salary and overhead and $9,476 for political consulting services. See

26 Us.c. § 9038(b)(2); 11 c.PR. § 9038.2(b)(2). However, the audit report stated that no

repayment would be required ifthe Primary Committee received reimbursements in the amounts

of: $22,984 from the General Committee for catering services; $63,736 from the General

Committee for equipment; $192,288 from the General Committee and $53,319 from the GELAC

for salary and overhead; and $30,000 from the General Committee for political consulting

services. The audit report also contained a determination that the Primary Committee must pay

$12,230 to the Treasury for unresolved stale-dated checks. See II C.P.R. § 90386.

In response, the Primary Committee provided documentation that it received $309,008 in

wire transfer reimbursements from the General Committee and $53,319 in wire transfer

reimbursements from the GELAC. Attachment 1 at 1, 5-11. Since the Primary Committee has

provided sufficient documentation to demonstrate that the wire transfers have been made, the

repayment determinations are obviated and no further action is required. With respect to the

stale-dated checks, the Primary Committee provided documentation that $1,050 in additional

stale-dated checks have cleared the bank. Attachment 1 at 1, 12-22. The Primary Committee

adjusted the amount ofstale-dated checks to $11,180 ($12,230 - $1,050) and submitted a check

in the amount of$11, 180 made payable to the United States Treasury. Attachment 1 at 3. The

Primary Committee has provided adequate documentation that the stale-dated checks totaling

$1,050 have cleared, and its payment ofthe remaining $11,180 to the United States Treasury

resolves the issue.

On September 7, 1999, the Audit Division circulated a memorandum with the repayment and payment

checks to the Commission.
Memorandum to the Commission. -

Status of Repayment Detenninations -

ClintoniGorc'96 Committees (LRA #485 and #508)

Page 3

The Commission determined that the General Committee must repay $16,412 to the

United States Treasury, including $12,427 for non-qualified campaign expenses related to travel

costs allocable to the primary election, and $3,985 for interest earned on investment of public

funds. See 26 U.S.C. § 9007(b)(4); 11 c.F.R. §§ 9007.2(b)(2); 9004.5. However, the audit

report noted that ifthe General Committee provides evidence that it has been reimbursed by the

Primary Committee for the travel expenses, the $12,427 repayment would not be necessary.

Moreover, the audit report stated that the amount repayable for interest income would be $3,985

less applicable federal, state and local taxes due.

In response, the General Committee provided documentation that it received $12,427 in

reimbursements from the Primary Committee by wire transfer. Attachment 2 at 2, 23-32.

Because the General Committee has provided adequate documentation to demonstrate that the

wire transfers have been made, the repayment determination is obviated and no further action is

required. Moreover, the General Committee calculated the amount ofinterest income net oftaxes

at $3,241, and attached a worksheet, documentation and a repayment check for this amount.

Attachment 1 at 2, 33-43. The General Committee's calculation ofthe amount ofinterest income

net oftaxes appears to be correct and is supported by adequate documentation. Therefore, the

repayment of $3,241 to the United States Treasury resolves this issue.

Attachment

Letter from Lyn Utrecht and Eric Kleinfeld dated August 12, 1999 (with attachments)
•

RYAN, PHILLIPS, UTRECHT & MACKINNONATTORNEYS AT LAW

• NONLAWYER PARTNER

I 133 CONNECTICUT AVENUE, N.W.

SUITE 300

WASHINGTON, D.C. 20036

(202) 293-1177

FACSIMILE (202) 293-341 I

August 12, 1999

Robert J. Costa

Assistant StaffDirector

Audit Division

Federal Election Commission

999 E Street, NW

Washington, DC 20463

Re: Clinton/Gore '96 Primary Committee

Clinton/Gore '96 General Committee

Dear Mr. Costa:

This is the response ofthe Clinton/Gore '96 Primary Committee and the

Clinton/Gore '96 General Committee (the "Committees") to the Final Audit Reports of

the Audit Division. Pursuant to II C.F.R. §9038.2(c )(2), the Committees are hereby

providing this information in order to demonstrate that a lesser repayment is required in

each oftheir respective cases.

Clinton/Gore '96 Primary Committee

With respect to the Clinton/Gore '96 Primary Committee, the Commission made a

determination that a repayment to the Secretary ofthe Treasury of $126,680 would be

required, unless the Primary Committee received certain reimbursements. Accordingly,

per the recommendation ofthe Audit Division, the Primary Committee has received

$309,008 in reimbursements from the General Committee. In addition, the Primary

Committee received $53,319 in reimbursements from the Clinton/Gore '96 General

Election Legal and Accounting Compliance Fund (the "GELAC"). These

reimbursements were made by wire transfer; and the appropriate documentation is

attached hereto as Exhibit 1.

As a result ofthe reimbursements described above, the only remaining repayment

issue in the Audit Report ofthe Primary Committee relates to stale-dated checks.

Attached as Exhibit 2 is documentation demonstrating that an additional $1050 in staledated checks have cleared the bank. Consequently, the amount ofthe repayment due for

stale-dated checks has been adjusted to $11,180 ($12,230 less $1050), and attached is a

repayment to the U.S. Treasury in that amount.

ATTACHMEl-i'l' I

Page --.1_-~"'--O-f--153
•

Clinton/Gore '96 General Committee

With respect to the Clinton/Gore '96 General Committee, the Commission made a

determination that a repayment to the Secretary ofthe Treasury of$16,412 would-be·

required, unless the General Committee received certain reimbursements. Accordingly,

per the recommendation ofthe Audit Division, the General Committee has received

$12,427 in reimbursements from the Primary Committee. These reimbursements were

made by wire transfer, and the appropriate documentation is attached hereto as Exhibit 3.

As a result ofthe reimbursements described above, the only remaining issue in the

Audit Report ofthe General Committee relates to interest income. Attached as Exhibit 4

is a worksheet and other documentation demonstrating that the interest income net of

taxes is $3,241. Attached is a repayment in this amount to the U.S. Treasury.

Conclusion

The Committees respectfully request that the Commission revise the repayment

determinations contained in the Audit Reports to reflect the materials and information

supplied herein.

Respectfully submitted,

r7r.~

Lyn Utrecht

itartr~~ Eric Kleinfeld

2
\,;LIN ION· GORE' 9 6 PRIMARY COMMITTEE. INC. 15395

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ATTA.Cm4C~ ~oL..-f-Lf~.3-_

Page -----",..J,--
AUG 10 1999 10:09 FR NATIONSBANK TO 92636011 P.02/15 .......... _ ........... "', _v ..... u ... "'Ul..;,.,,'-'.LJ."-J.J.v...... .I,.L. ..JJ.Vl\,L uJ,;.jl'1..l.\\...!l .-J.'j'/I..'/l.V ::J~..)I."...l

CON\iERSAT:::ON 0 ENTITY: NDC

ACCOuNT: 001933067562 PRD: BUS

·.lINTON GORE 96

~RIMARY CAMPAIGN COMMI~TEE INC

(C,D,S)

.' PAGE; 1

DESCRIPTION-SCREEN BALANCE

Deposit 76,621.41

ZBA TRANSFER 75,064.38

00001933067559

Check 73,678.20

Deposit 105,497.39

ZBA TRANSFE 104,134.03

00001933067559

ZBA TRANSFE 102,974.04

00001933067559

DATA: ITEM TYPE

1,159.99

1,386.18

31,819.19

1,363.36

TYPE: FABC SEARCH

DATE(S)

AMT(Sj

CK/SER#(S)

401,340.59 TRAN CODE

ITEM AMOUNT CHECK/SER# REFERENCE

601.10 84110564496

1,557.03 00008130608

2000000

15347 83110876341

83310863850

00008130618

20QOOOO

00008130621

2000000

1101*060999

2101*061499

3052*061899

LEDGER BALANCE:

TiC DATE

2101*060799

3052*060899

t,":, 3052*062199

~~~ 0. *** ADDITIONAL TRANSACTIONS ***

FILE DATE 080999

G, PF9=TH MENU PF10=PAGE FORWARD PF11=PAGE BACK PF8=CLEAR SEARCH DATA

0. PF4=MAIN MENU PF5~HELP PF6~lffiW CONVERSATION PF7=OLD CONVERSATION PF12=LINE 24

A·~"I~~'.£~C:!:{:;:21i"r f

,·2.",0 _~_. Df ~3'
AUG 10 1999 10:09 FR NATIONSBANK TO 92636011 P.03/15 &.JV\JoJ J.l,.l.oJL'I. U'J..., ...J J.L'-""'lrrJ,.'lW.,n...... J. .... vJ,." L.L.l..oJJ.V.I,\..l. .JJ.,.,.f"U."...... u ::J:J/ UUj loU :J • ...J I • .J..J

CONVERSATION 0 ENTITY: NDc

*** ADDITIONAL TRANSACTIONS ***

FILE DATE 080999

PF9=TH MENU PFIO=PAGE FORWARD PF11=PAGE BACK PF8=CLEAR SEARCH DATA

PF4=MAIN MENU PF5=HELP PF6=NEW CONVERSATION PF7=OLD CONVERSATION PF12=LINE 24

ACCOUNT: 001933067562 PRD: BUS

CLINTON GORE 96

PRIMARY CAMPAIGN COMMITTEE INC

ITEM TYPE (e,D,S'

. _, PAGE: 2

DESCRIPTION-SCREEN BALANCE

Check 102,733.65

Check 102,720.40

Check 101,634.00

Check 101,625.75

ZEA TRANSFE 100,262.39

00001933067559

Check 99,175.99

ZEA TRANSFER 98,016.00

00001933067559

1,086.40

1,159.99

TYPE: FABC SEARCH DATA:

DATE(S)

AMT(S)

CK/SER#(S)

401,340.59 TRAN CODE

ITEM AMOUNT CHECK/SER# REFERENCE

240.39 15348 83810621222

13.25 15350 83310535425

1,086.40 15351 84010663403

8.25 15349 83710173995

1,363.36 00008130702

2000000

15355 84010566615

00008130706

2000000

1101*070699

3052*070699

LEDGER BALANCE:

TiC DATE

1101*062399

1101*062399

1l0P'063099

1101 *070299

3052*070299
AUG 10 1999 10:09 FR NATrONSBRNK TO 92535011 P.04/1S W\..'\)..,J ';";.JoJl\ :..JV-.JU J.':'~1-..Jrl.."'... .J,.':"V~1 ':".I..J. ..JJ.V.l.\J, .,)L.onJ,\..... ,I.ol. .~.JI VI)/ .... V • ..I' • ..J":

CONVERSATION 0 ENTITY: NDe

1,159.99

PRD: BUS TYPE: FABC SEARCH DATA: ITEM TYPE (C,D,S)

DATE (5)

AMT(S)

CK/SER#(S)

401,340.59 TRAN CODE" PAGE: 3

ITEM AMOUNT CHECK/SER# REFERENCE DESCRIPTION-SCREEN BALANCE

217.00 15353 83210181836 Check 97,799.00

31,601.46 15357 83210680543 Check 66,197.54

5,842.J6 15356 83710573076 Check 60,355.18

39.75 15354 83710578871 Check 60,315.43

432.32 15352 83210518599 Check 59,883.11

1,363.36 00008130716 ZBA TRANSFER 58,519.75

2000000 00001933067559

00008130720 ZBA TRANSFER 57,359.76

2000000 00001933067559

3052*072099

ACCOUNT: 001933067562

LINTON GORE 96

2RIMARY CAMPAIGN COMMITTEE INC

LEDGER BALANCE:

TiC DATE

1101*070999

1101*071299

1101*071399

1l0P'071399

1101*071599

3052*071699

ru

W *** ADDITIONAL TRANSACTIONS *H

FILE DATE 080999 1"'-

~; PF9=TH MENU PFIO=PAGE FORWARD PFll=PAGE BACK PF8=CLEAR SEARCH DATA ~f PF4=MAIN MENU PF5=HELP PF6=NEW CONVERSATION PF7=OLD CONVERSATION PF12=LINE 24

ATTACHMENT~(~-,,~ __

Page 3'. of q;;_
AUG 10 1999 10:09 FR NATIONSBANK TO 92636011 P.05/15 ...,....~v .. ~.l.lv.L\ U\J~.J-..J ..l. .... \.t"U'fvr'l.......... J..V.l.~ ,U.L..,).V"L\.L v.L",J>.J,'''.lJ. ..I •.'/V\)/.J..U ./~ ..)f • ..J"'"

CONVERSATION 0 ENTITY: NDC

. - PAGE: 4

DESCRIPTION-SCREEN BALANCE

Check 56,273.36

Check 55,303.04

Check 55,086.04

Check 55,071.04

Check 55,057.79

Check 53,971.39

ZBA TRANSFER 51,440.59

00001933067559

ACCOUNT: 001933067562 PRD: BUS TYPE:

CLINTON GORE 96

PRIMARY CAMPAIGN COMMITTEE INC

LEDGER BALANCE:

TiC DATE

1101*072199

llOp·073099

1101*073099

1101*073099

1101*073099

OJ 1101*080499

U'j 3052*080499

fABC SEARCH DATA:

DATE(S)

AMT(S)

CK/SER#(S)

401,340.59 TRAN CODE

ITEM AMOUNT CHECK/SER# REFERENCE

1,086.40 15358 84110285029

970.32 15360 83410052882

217.00 15361 83210095363

15.00 15362 83210117371

13.25 15363 83210117370

1,086.40 15359 83210046486

2,530.80 00008130804

2000000

ITEM TYPE (e, D, S

tn

f~ *** ADDITIONAL TRANSACTIONS *** • FILE DATE 080999

PF9=TH MENU PFIO=PAGE FORWARD PFl1=PAGE BACK PF8=CLEAR SEARCH DATA

PF4=MAIN MENU PF5=HELP PF6=NEW CONVERSATION PF7=OLD CONVERSATION PF12=LINE 24 •
RUG 10 1999 113:139 FR NATIONSBANK

::Jvv,J ! u ..:;.!.\. uv...... .,; ..l,. 1.\..("U~~rl."" ol...l. ......... '

CONVERSAEON 0

TO 925351311 p.eS/iS ... "" ~'" I ......... J .... , • .." •

ENTITY: NVC

*** NO MORE TRANSACTIONS ***

. I

\

\

\

\,

I

\

\

I

(C,D,S)

12,427·90

309,008.00

FABC SEARCH DATA: ITEM TYPE

DATE{S)

AMT(S)

CK/SER#(S)

401,340.59 TRAN CODE PAGE: 5

ITEM AMOUNT CHECK/SER# REFERENCE DESCRIPTION-SCREEN BALANCE

53,319.00 00094500806 ACCOUNTTRA 104,759.59

9020021 0002902 NBKOS45

00094500806 FUNDS TRANSF 92,332.59

4460178 NMD 5018446 NBKBISP

00094500809 ACCOUNT TRA 401,340.59

9020002 0002902 NBKOS45

4005 080999

9011'080699

ACCOUNT: 001933067562 PRD: BUS TYPE:

-:LINTON GORE 96

2RlMARY CAMPAIGN coMMITTEE INC

LEDGER BALANCE:

TiC DATE

4005*080699

FILE DATE 080999

'1'·. PF9"'TH MENU l'FIO==PAGE FORWARD PFn=PAGE BACK PF8=CLEAR SEARCH DATA

Q PF4"'~4rN MEm; PF5=HELP PF6=NEW CONVERSATION PF7=OLD CONVERSATION PF12=LINE 24 •

ATTACHMENT

De '~'J l ()
88/11/1999 11:12 5813757777 CLINTON-GORE'96 . RUG 11 1999 : 1 : 17 FR Ef'l'j< OF RME''Il CR m 3.3757777

S013 THSR ** BOSS-~RANSACTION HISTORY SEARCH •• CONVERSATION G

PAGE 82

p.e2/ld2

99/08/11 11.07.59

ENTITY: NAR

ACCOUNT: 000089455841 PRO: BUS TYPE:

CLINTON/GORE '96 GENERAL ELECTION

LEGAL & ACCT COMPLIANCE FUND INC

IC, D,S)

12,000.00

250,000.00

299,490.83

FASC SEARCH DATA: ITEM TYPE

DATE(S) 080699

AMT(S)

CK/SEF."(SJ

94,624.62 T~~ COVE PAGE: 1

ITEM AMOUNT CHECK/SER* REFERENCE DESCRIPTION-SCREEN BALANCE

53,319.00 00094500806 ACCOUNT TRAN 94,624.62

9020020 0002902 NBKOS4S

00094500806 ACCOUNT TRA 147,943.62

9020022 0002902 NBKOS45

00094060806 INVTRN 8919 397,943.62

0001497 EFr DATE: 080699

00094500723 ACCOUNT TRAN 98,~52.79

9020009 0002902 NBKOS45

LEDGER 13ALA."lCE:

Tic DATE

9011 OB0699

9011 080699

4013 080699

9011*072399

I "

: .j *T* ADDITIONAL TR}~SACTIONS ***

FILl!: DATE 081099 Pf9=TR MENC PFI0~PAGE FORWARD PFll=PAGE BACK PFB=CLEAR SEARCH DATA

PF4=MA!N MENu PF5~H~LP pr6.NEW CONVERSATION pr7=OLD CONVERSATION PF12;LINE 24

~* TDTRL PRGE.0Q *~
Exhibit 2
.CLINTON/GORE ·96 PRIMARY COMMITTEE

REPAYMENT TO TREASURY FOR STALE-DATED CHECKS

•

Repayment required per final audit report

Adjust for checks clearing after audit performed:

Check #3094 Mrs. Harry Reasoner

Check #310 I Cantrell Properties, Inc.

Check #3157 Judilh Spaers

Adjusted Repayment required

Copies ofchecks are attached.

$12,230

1,000

25

25

$1},180

f.';'TACHM811T _.-:...1_--.,----

Ps.:re __I of~_
88/11/1999 11:12 . . 5813757777 CLINTON-GORE' 95 PAGE 84

NationsBank"

Nation.Bank, N.1I. Ra~,,",,1 G"utor, VA2-12!Hl4-01

I'.0. ·11.." 'Z702.~

lUchnn",d. VA 23201·702.~

--

-

-

H

A"""nnt Roor..."D"" W .........tioD

hcron,,!. Nmnhcr: 1lO1~:l.'l1l6 7r;GZ

TIL" II> Nambo,r: S2·1ll29232

W 05 0 C Enclo."r"" 3 .1'

StHt.llrUlr.nt ['ur;o,1 GOOnl·

01109199 L1Iroll&1' O!I!Sl99

St.:r.tement Period 01/09/99 through 01115/99

1'I.fumber of Deposita/Credits 0

'U1Ibor of Withdra.walsIDebits 4

CLINTON GORE -!16

PRIMARY CAMPAIGN COMMITTEE INC

PO BOX 2100

LITTLE ROCK AR. 72203

Numbnr of Enclosures

Number of Days in Cyclo

3

18

CastOI11"~ Service:

N'ationsBunk. N.A.

P.O. BOll: 27025

Richmond, Virginia 23261-7025

1-800-289·1299

StlItement Beginning Balance

Amount of DoposiWCl'lldi.ts

Amount of Withch·Q.wllls/Debits

Statement Ending 13 olo.nc~

Average Ledgor Bl11a.nce

Service Chug\!

81,355.45

0.00

1,520.84

80,3M.&:

88,286.111.

Cl.0l

Withdrawals and D..bite

,Jj09

01112

01114

01/15

81,738.00

80,334.64
22 .. 0:;''' .. 025 ,,3S;:tJ7' ...... _,' ._.~ __..:-0lI , _••~.--'" __• __..__ • _., . __ •••.__.,._..

.**********is·DOLCARS nND 00 CENTS

y .... Jallles Loftus ':. ..

325 CDn5titutiori·Av~, NE

Washington DC 20002

15a36

PAV

'to'llff

OF

CUNTON· GORE' 96 PRIMARY . COp,tJ~TTEE. INC.

'PO"1I0l( mas WASHr~GTl)N D.O. 200M-89l13 ,

"

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"'\ .",

\i ..

NAJlONB8ANI(. H.A.

WASHINGTON. D.O.

15-120-540

06/30/98

.), 2600893310L 2 O'H 7 12. 26

AMOlINT

.*********15.00

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11'0' 5 Bl;II' ':051,00 L201,.: Lq :1:101; 7 51; ~M' ,1'000000 Lsao"'

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260059331 0520-0027-6

260059331 01-12-99

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HAT/ONSBANK. N.....

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06/30/98

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3~5 Constitution Ave, NE

Washington .DC ~0002

it·ltH"**~***75 ·!lOL.LARS AND 00 CENfS

CLINTON-GORE '86 PRIMARY

COMMITTEE. INC.

PO BOX lSs.a

WASHINGTON D.C. aOOU.lMl83

PAY

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68/11/1999 11:12 5613757777 CLINTON-GORE' 95 PAGE 63

NationsBank"

NatiousBdUk. N.A.

MOI·8oo·17.09

P.O. Bo" 700251

St. LOI.';', 1<10 63179·02-'1

-

A""D\l1lt Refenmc.. Infol

Acttlunl N'uuber: 0000 894-.

'fa." ID Number: ~O-OOOOOOO

W04 0 C Ene!o.ur.. 1

St4\LQlneJlt PO'riod

17/18108 tlmJIIlh 12/24/08

3.~

.......

-

32,134.29

0.00

32.138.21·

0.00

"'_'''''"'''-I:;~,.~,n 32, .

1

27

Customer Service:

NationsBank. N.A.

P,O. Box 798

Wichita, KS 67201

1-800.551·7050

CLINTON/GORE 9~ PRIMARY COMMITTEE

PO BOX 2100

LITTLE ROCK AR 72203-2100

wnLer of Enclosures

umber of Daye in Cycle

Account Summary Information

tatertlllnt Period 12/18198 through 12/24/98 Statement Beginl1ing Balance

umber of Deposits/Credits 0 AmolUlt or Deposits/Credits

umber of Withdrawals/Debits 1 AmolUlt of Withdl'awalalDebits

Statement EndinG' BallUlce _

Average Ledger Balo.nce

Service Char&"

Witbdrnwals and Debits
P

H

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LD

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AMOUNT

-'51' --.: i'::;; n

,"000000 SOD," .

: . -'.:.1 ..... _.'-. '.,:.: N':':"

B6£09£0~ i~~~nA~ ~~ , SG11.C1l~\r91<l . \'l~~.'Lw\J\l:-L 961.21,1 , BOI7ZIZI I:. ...... .,A.! 2~ ,'&W{~rB& f

06/2G/98

OA1C

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B

I $***'''*****25.1210 J

1 ~P/4~. m

B0A1TIlEN'I

N4nDNALBANKOFARkAHSAI

LITTle flOCK. ARKANSAS

81·7·920

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I

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3101

II·OOj~OLIr· ':0820000731: 00B~.... "'r.~q"'511.

• -------.-•.--..- ,..- ····1.:·

Cantt'l!ll Pt'O~llH'tie5, 1nl':.

320 N. Tenne8nee Ave.

1"1: C1vli\h TN 37::;:'H

HI'**·lt*-H***2S DDU.. /:>RS AND 0\l1 CENTS

_LINTON/GORE '96 PRfMARV COMMITTEE, INC.

P.O,80K2100

LrrrtE FlOCK, AR 72200

PAY

lQTHE

OflOER

OF

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68/11/1999 11:12 5613757777 CLINTON-GORE' 95 PAGE 65

35

-

NationsBanke

t-1alion.Bank. N.I\.

MO\4lOO·\7-o9

P.O. Box 7DOZSI

Sl. LOllis. MO e3179·0251

",

Aee_ Rcl........" .. 1..101 " A.CCG1rnt Number- 0000 ~4. •

T"" II> l'lmnbet': 4O-OOOOOOO

W 04 0 C Endoo"r"" 1

Slalem_ Pllt'lod

UI/III/ll9 thnnJrl. 1Il/07/1l9

-

32.1.

32,105.85

0.00

32.113.21 . "I\()

Average Ledge!' Balance

Serrice Charge

Customer Semce:

NationsBank. N.A..

P.O. Box 798

Wichita, KS 672C1

1-800.551·7050

1

7

CLINTON/GORE 9' PRIMARY COMMITTEE

PO BOX 2100

LITTLE ROCK AR 72203-2100

umber of Enclosures

umber of Daye in Cycle

Account Summary Information

tement Period 01/01/99 through 01/01/99 Statement Beginnins- Balance

umber of Deposits/Cx-edits 0 Amount of Depo&i.te/Credita

umber of Withdrawal.;D"bits 1 Amount of WithdrawaIalDebita

Statement Ending Balance -

Withdrawals lU1d D"bita

l..TTACI{ME~;T _ I

P2 '.:0 ~1_q=-(j:-2 "-9"-1==
.::;-~

rll'_. O::;c

1

,

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",07 N 025 ru 3Slt~1l2

n

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U I I ()- 000 1 -!5

O(;(10950f5.:=J 0 L 10··0001 - 5

I II. .\"(,J~bt'!:.;~'1 0 1 .- O(:i- 9~:1

0a20~1::)13B ellG6m

5i ()i~i5{)5394

;;: ,:.:? :, ~)J~I

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AMOUNT

,

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0612€'/ge

DATE

BOATMEN'S

NATIONAL BANK OF ARl\ANSAS

LlTTU: ROCK, ARKANSAS

8H-Ill!O

,

06009S0S;:l i 0 6600'1tJ:!'~f1i1·U-.t"i~&~~f

~003~5?r I:OB20000?~I: OOBq~~ffi~lqffi5n'

Judi til T•. Sclp!!rs

26 eh esh",,. Rd.

Brocllcllne MA 02145

*********ir'*2'5 DOLl.FlRS AND 00 CENTS

CllNTONlGORE '96 PRIMARY COMMmee, INC.

P.O. aOX2100

lrrTLE ROCK, All 72203

PAY

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08/11/1999 13:43 5013757777 CLINTON-GORE' 96 PAGE 132

NalionsBank~

NationsBank, N.A.

MOj·aOIH7.og

P.O. Bo,", 790251

St. Louis. MO 63179·0251

-

Acr.OQut RrrE!'rent:" hllDr

hCCOIIJJt Number: 0000 8944

T"" CD Numb<!r: 4U·OIlUOOQO

W 1I4 0 C EneJostlNI:I 2 35

5tatomellt Period _'" II/IW~8 t"rough lI(1g/~8

- CLINTON/GORE 96 PRlf'/ARYCDHHITTEE

PO BOX 2100

LITTLE ROCK AR 72203-2100

Customer Service:

NationeBank. N.A.

P.O. Box 798

Wichita. KS 67201

1-800-551·7050

35.138.21

0 00

3.0Q..,,\i;.~;·

32.13

35,032.73

0.00

Page 1 I)( 1

AVC1"o.ge Ledger Balance

Service Charg"

2

19

Ac:co"IDt Swnmary Infonnation

tament Period 11/13/98 thro~gh 11/19/98 Statement Beginning Bala.nce

er of Deposits/Credits 0 Amount of Deposita/CI-edits

er of Withdrawals/Debits 2 Amount of Withclrawa!s/D<lbits

Statement Ending Balance

mber of Enclosures

nber of Days in Cycle

Withdrawals and Debits .

3094 I

..,.,ediAr: ebeck (or "hlteu) ia outrtandinc-. ill Included in -111'7 IidiD... oe b... be.... included iD a 1""''';Q,,"" .tateruont.

,

Daily'Ledger Balances

:.113 35,138.21 11118 33,138.21 11119 32,138.21

ATTACHMENT - \ L(L "Pn~e _.zJ- of_
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"·OO:lO~t.ll· ':0820000?:il: OOBql,t.'"1.'~IN511·

CUNTON/GORE '96 PRIMARY COMMITIEE, INC.

P,O.00)(.2Ioo

ume ROCK, "R 72203

.~no_

3094

P

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Z

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5!

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ill

en

w'"

"

J

i

I

I

I.

I:

m

AMOUNT

,"0000 ~OOOOO.,J

tit***** 1, 001Z', 00

06/26/9f~

.oATil

8OATIaI£)l'S

HA~ONAL8ANKOFARKANSAS

UTTU: ROCK, ARKANSAS

81-7-112D

(.

.

w. i

,I

:'\': .

Ml'S. Harry M. R~a5Dne,'

Vinson & Elkins, LLP

2811'I0 1st City Twl' 1001 Fannin

~Ioultcn TX 7"7002-6760

'**,****** 1,000 DOLLARS AND 00 CENTS PAY

TOlliE

ClIIPEll

OF

"0 - p ::. \.lQ ."': (t, : ..:..:'

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I
Exhibit 3
RUG 10 1999 10:09 FR NATlONSBANK TO 92636011 P.07/1S

oUV'.) In'::''l\ ... oV.:J.:)-J, ..."'\l"'UV.)t'\1".,J.J.V.L\' n.L."'.t.V1'\.l .JC.t1.l\"-'H :7.7 1 VUt;.V .7. _.,.1; • ., tJ

coNVERsATI 01" 0 EN'I'I':'Y: :JDC

ITE!"! TYPE (e,[;,S)

PAGE: 1

DESCRIPTION-SCREEN BALANCE

Deposit 100,984.72

Check 100,969.56

WIRE TYPE:F 123,969.56

DATE:061499 TIME:1725

Check 123,169.56

Check 122,769.56

Check 122,265.62

Check 121,854.91

Check 121,640.41

800.00

400.00

503.94

410.71

214.50

FMC SEA.~CH DATA:

DATE(S)

AM! (5)

CK/SER#(S)

85,123.16 TRAN CODE

ITEM AMOUNT CHECK/SER# REFERENCE

614.00 84110564499

15.16 16147 83110876342

23,000.00 00090410614

0025036

16159 83210146987

16166 83810518990

16162 83110882789

16168 83210878930

16165 83110882790

ACCOUNT: 001933064772 PRO: BUS TYPE:

-LINTON GORE 96

~NERAL COMMITTEE OPERATING

LEDGER BALANCE:

TIC DATE

2101*060799

1101*060999

2011*061499

1101*061699 \~j 1101*061799 g~

ii'J 1101*062199 i::if:

i'"~ 1101*062199

1101*062199

rb~ *** ADDITIONAL TRANSACTIONS ***

U *** FOR EXPANDED DESCRIPTIONS, PRESS PF2 *** FILE DATE 080999

0, PF9=TH MENU PF10=PAGE FORWARD PFl1=PAGE BACK PFB=CLEAR SEARCH DATA

a PF4=MAIN MENU PFS=HELP PF6=NEW CONVERSATION PF7=OLD CONVERSATION PF12=LINE 24

rVi

i"iir

it~::\·"('t·

ATTACHMENT --\-----r~ ___

1'888 _LL of Cf3..
AUG 10 1999 10:09 FR NATIONSBANK TO 92636011 P.08/15 ~v.v.., 1'-'''. w .., - - "~""- --_.. _-- ~"" - -, --

CONVERSATION 0 ENT:TY: KDC

..** ADDITIONAL TRANSACTIONS ***

FILE DATE 080999

PF9=TH MENU PF10~PAGE FORWARD PFll=PAGE BACK PF8=CLEAR SEARCH DATA

PF4;MAIN MENU PF5=HELP PF6=NEW CONVERSATION PF7=OLD CONVERSATION PF12=LINE 24

PAGE: 2

DESCRIPTION-SCREEN BALANCE

Check 121,466.83

Check 121,360.93

Check 121,282.18

Check 113,534.04

Check 107,284.04

Check 106,684.04

Check 106,084.04

Check 105,574.68

Check 105,379.68

FABC SEARCH DATA: ITEM TYPE (e,D,S)

DATE(S)

AMT(S)

CK/SER!t(S)

85,lZ9.16 TRAN CODE

ITEM AMOUNT CHECK/SER# REFERENCE

173.58 16176 83210863118

105.90 16163 83110882788

78.75 16164 83110882791

7,748.14 16170 83110526869

6/250.00 16169 83110526868

600.00 16160 83210063769

600.00 16167 83810764881

509.36 16171 89030003192

195.00 16148 83210548201

ACCOUNT: 001933064772 PRD: BUS TYPE:

CLINTON GORE 96

GENERAL COMMITTEE OPERATING

LEDGER BALANCE:

TiC DATE

1101*062199

1101*062199

1101*062199

1101 "'062299

1101"062299

1101*062299

1101*062399

1101*062499

1101*062499

• oj"..
III FILE DATE 080999

r~\ PF9=TH MENU PFlO==PAGE FORWARD PF11=PAGE BACK PF8=CLEAR SEARCH DATA

,.' PF4==MAIN MENU PF5=HELP PF6=NEW CONVERSATION PF7==OLD CONVERSATION PFl2""LINE 24

j

j

j

j

j

j

j

j

j

j

j

j

j

j

j

j

j

j

j

j

j

j

j

j

ITEM TYPE (C,D,S)

TO 926361311 p. 139/15

ENTI:'Y: l\DC

PAGE: 3

DESCRIPTION-SCREEN BALANCE

Check 105,184.68

Check 105,078.55

Check 105,045.01

Check 100,808.80

Check 100,764.40

Check 100,751.83

Check 100,739.26

Check 100,476.56

Check 100,434.58

ATTACifMS!II' I

--- Page 2(;_ Of~~

***

E'ABC SEARCH DATA:

DATE(S)

AMT(S}

CK/SER#(Sl

85,129.16 TRAN CODE

ITEM AMOUNT CHECK/SER# REFERENCE

195.00 16149 83210548202

106.13 16161 83210548229

33.54 16154 83210520677

4,236.21 16156 83110557928

44.40 16151 83520739157

12.57 16152 83520739490

12.57 16153 83920688562

262.70 16155 83210875684

41.98 16150 84220599537

~UG 10 1999 113:113 FR NATIONSBANK BOO.}' THS?; .... ov.;),,-u.......·w,,~._v •. ------.

VERSATION 0

*** ADDITIONAL TRANSACTIONS

ACCOUNT: 001933064772 PRD: BUS TYPE:

CLINTON GORE 96

GENERAL COMMITTEE OPERATING

LEDGER BALANCE:

TIC DATE

1101 *062499

1101*062499

1101*062499

1101*062599

1101*062599

1101*062599

1101*062599

1101*062899 • 1101 *062899

,..;
.';;~~~•.l';'lt:':"··':;'::"",ll:,.l-,.,._..:_·_... •·..·_ •.-.'

RUG 10 1'399 10: 10 FR NATiONSBANK ..,' TO .9~3~11 . ,-,vV.J H1..:>:\ " ou::.::.- nV\.N:JAI..U'JN til~ ... l)!:'I.r Sl;AACH ".

CONVZRSATION 0

P.14/1S

~~/U~/~(j 9.57.51

ENTI':'Y: NDC

ITEM TYPE (C, D, SI

PAGE: 4

DESCRIPTION-SCREEN BALANCE

Check . 100,402.74

Check 100,349.74

Check 100,321.84

Check 100,308.69

WIRE TYPE:F 120,308.69

DATE:070299 TlME:1729

Check 120,290.79

Check 120,200.79

Check 119,983.79

17.90

90.00

217.00

FMC SEARCH DATA:

DATE(S)

AMT(S)

CK/SER#(S)

85,129.16 TRAN CODE

ITEM AMOUNT CHECK/SER# REFERENCE

31.84 16158 83110774487

53.00 16174 83410471856

27.90 16173 83410471855

13.15 16172 83410490497

20,000.00 00090410702

0027021

16186 84010566614

16177 83210527972

16182 83210181835

LEDGER BALANCE:

TIC DATE

1101*062899

1101*063099

1101*063099

1101*063099

2011*070299

110P070699

1101"070899

1101*070999

ACCOUNT: 0019]306~772 PRD: BUS TYPE:

CLINTON GORE 96

GENERAL COMMITTEE OPERATING _

**" ADDITIONAL TRANSACTIONS ***

*** FOR EXPANDED DESCRIPTIONS, PRESS PF2 *~* FILE DATE 080999

PF9=TH MENU PF10=PAGE FORWARD Pf11=PAGE BACK PF8~CLEAR SEARCH DATA

PF4=MAIN MENU PF5=HELP PF6=NEW CONVERSATION PF7=OLD CONVERSATION PF12=LINE 24
RUG 10 1999 10:10 FR NRTIONSBANK TO 92636011 P.15/15

1.JV'J.) 1n.::>l'\ •• oU::>::>-UV'IJ.~;;'i\l..llUl~ tU::>lUKI ::>tMLh ~~ ';j'j/ Utl/ 1v ';j.::;".:JL

COh~RSATION 0 ENTITY: ~JC

PAGE: 5

DESCRIPTION-SCREEN BALANCE

Deposit 151,585.25

Check 151,572.74

Check 151,560.23

Check 133,991.30

Check 133,972.25

Check 133,462.60

Check 133,421.65

check 133,399.23

CheCk 133,332.30

ITEM TYPE (C,D,S)

_.

PRD: BUS TYPE: FABC SEARCH DATA:

DATE(S)

AMT(S)

CK/SER#(S)

85/12~.16 TRAN CODE

ITEM AMOUNT CHECK/SER# REFERENCE

31,601.46 83210680542

12.51 16178 84120919072

12.51 16179 84120919073

17,568.93 16189 83710573077

19.05 16188 83710490811

509.65 16190 88130025625

40.95 16193 83510010687

22.42 16191 84110241756

66.93 16181 83210517892

ACCOUNT: 001933064772

~LINTON GORE 96

~NERAL COMMITTEE OPERATING

LEDGER BALANCE:

TIC DATE

2101*071299

1101*071299

1101*071299

1101*071399

1101 *071399

W 1101 *071499

W 1101*071499 ~Jji 1101*071499 ~'il

_ 1101 *071599

ru *** ADDITIONAL TRANSACTIONS *** i~ FILE DATE 080999

!~ PF9=TH MENU PFIO=PAGE FORWARD PF11=PAGE SACK PF8=CLEAR SEARCH DATA

r~ PF4=MAIN MENU PF5=HELP PF6=NEW CONVERSATION PF7=OLD CONVERSATION PF12=LINE 24 '0:1.;;;:",

f,

** TOTRL PRGE.1S **
· HUI.J 110 1':1':1':1 110: 110 FR NAT IONSBANK ~UVJ ln~~ --.

CONVERSATION 0

TO 92536011 P. 10/15

an :. y : ,WI.

ITEM TYPE: (C, J, S~

PAGE: 6

DESCRIPTION-SCREEN BALANCE

Check 133,292.69

Check 133,226.99

Check 133,170.50

Check 132,942.50

Check 132,891.74

Check 132,785.61

ACCOUNT TRA 144,785.61

0002902 NEKOS45.

800.00 Check 143,985.61

PRD: BUS TYPE: FABC SEARCH DATA:

DATE(S)

AMT (51

CK/SER#ISl

85,129.16 TRAN CODE

ITEM AMOUNT ~HECK/SER# REFERENCE

39.61 16180 83110169672

65.70 16194 84310106829

56.4~ 16187 83210114979

228.00 16192 83920777400

50.76 16195 83310832511

106.13 16185 83210402939

12,000.00 00094500723

9020010

16199 83210264113

ACCOUNT: 001933064772

CLINTON GORE 96

GENERAL COMMITTEE OPERATING

LEDGER BALANCE:

TiC DATE

1101*071599

1101*071699

11017071699

1101*072099

1101*072199

1"'\ 1101*072299 ~-.f

\I'd' 4005 .... 072399

t1J C *........ ADDITIONAL TRANSACTIONS

FILE DATE 080999

~. PF9=TH MENU PF10=PAGE FORWARD PFI1-PAGE BACK PF8-CLEAR SEARCH DATA

C PF4=MAIN MENU PF5=HELP PF6=NEW CONVERSATION PF7=OLD CONVERSATION PF12=LINE 24
RUG 10 1999 10:10 FR NATIONSBANK BOUj 'l'Ii;;K .... v~~ ••--.----

. CONVERSATION 0

TO 92535011 P.ll/1S

E~':'ITY: N:JC

PAGE: 7

DESCRIPTION-SCREEN BALANCE

Check 143,585.61

Check 142,985.61

Check 142,475.07

Check 141,971.13

Check 141,694.09

Check 141,615.64

Check 141,585.79

Check 141,561.34

Check 141,344.34

PRD: BUS TYPE: FABC SEARCH DATA: ITEM ':Y?E. {C:, IS;

DATE (5)

AMT(S}

CK/SER#(S)

85,129.16 TRAN CODE

ITEM AMOUNT CHECK/SER# REFERENCE

400.00 16196 83210759623

600.00 16184 83110045496

510.54 16204 83210608883

503.94 16200 83210608879

277.04 16210 83110366351

78.45 16203 83210608882

29.85 16201 83210608880

24.45 16202 83210608881

217.00 16198 83210095364

:OUNT: 001933064772

",.uINTON GORE 96

GENERAL COMMITTEE OPERATING

LEDGER BALANCE:

Tic DATE

1101*072799

1101*072899

1101*072999

nj 1101*072999 :F~

,=,' 1101*072999

;j), 1101" 072999

" 1101,1,072999

(j1 1101*072999

i1dJ 11 01-07 3099

"_ H_ ADDITIONAL TRANSACTIONS *** ,'

F< FILE DATE 080999 '=f'

• PF9=TH MENU PF10=PAGE FORWARD PF11=PAGE BACK PF8=CLEAR SEARCH DATA

PF4=MAIN MENU PF5=HELP PF6~NEW CONVERSATION PF7=OLD CONV8RSATION PF12=LlNE 24
• AUG 1111 1999 1111: 1111 FR NATIONSl3AI-I< BOO;, THSR .. - OV,hJ "''''..... u ••_. .•__ :- _ _ TO 92636011 P.12/15

.CONVERSATION a EN':.':T:': ~EJC

PAGE: 8

DESCRIPTION-SCREEN BALANCE

Check 139,951.84

Check 139,766.68

Check 139,582.22

Check 139,567.75

Check 139,545.71

Check 139,45B.30

Check 131,710.16

ACCOUNT TRA 381,710.16

0002902 NBKOS45

PRD: BUS TYPE: FABC SEARCH DATA: ITEM TYPE (e,j),S)

DATE(S}

AMT(S)

CK/SER#(S)

85,129.16 TRAN CODE

ITEM AMOUNT CHECK/SER# REFERENCE

1,392.50 16197 83510472788

185.16 16208 83210623990

184.46 16209 83210623991

14.47 16206 83210735480

22.04 16212 83210046487

87.41 16211 83310455848

7,748.14 16207 83210097554

250,000.00 00094500806

9020023

ACCOUNT: 001933064772

CLINTON GORE 96

GENERAL COMMITTEE OPERATING

LEDGER BALANCE:

Tic DATE

1101*080299

1101*080299

1101*080299

1'1

:i'~ 1101*080299

w 1101*080499 \W

r'"~ 1101*080499

• 1101*080599

u1 4005*080699

*** ADDITIONAL TRANSACTIONS *** FILE DATE 080999

Pf9=TH MENU PFIO~PAGE FORWARD PFll=PAGE BACK PF8=CLEAR SEARCH DATA

PF4=MAIN MENU PF5=HELP PF6=NEW CO~NtRSATION PF7=OLD CONVERSAT!ON PF12=LINE 24
~G 10 1999 10:10 FR NATJONSBANK ~uu~ ln~n - __ .

CONVERSATION 0

TO 92636011 P.13/15

i::NT::::-Y: !\L1L

,COUNT: 001933064772 PRD: BUS TYPE: FABC SEARCH DATA: ITEM TYPS (C/~/SI

CLINTON GORE 96 DATE(S)

GENERAL COMMITTEE OPERATING AMT(S)

CK/SER#(S)

LEDGER BALANCE: 85,129.16 TRAN CODE PAGE: 9

TiC DATE ITEM AMOUNT CHECK/SER# REFERENCE DESCRIPTION-SCREEN BALANCE

4005*080699 12,427.00 00094500806 FUNDS TRANS 394,137.16

4460179 FDES NMD 5018446 NBKBISP

9011 080999 309,008.09 00094500809 ACCOUNT TRAN 85,129.16

9020001 0002902 NBKOS45 ~",".A'

•

tu

\It:I'~.~',,,,

*** NO MORE TRANSACTIONS ***

FILE DATE 080999

PF9=TH MENU PFIO=PAGE FORWARD PFll~PAGE BACK PF8=CLEAR SEARCH DATA

PF4=MAIN MENU PF5=HELP PF6~NEW CONVERSATION PF7=OLD CONVERSATION PF12=LINE 24
Exhibit 4
CLINTON/GORE '96 GENERAL COMMITTEE

PAYMENT DUE TO TREASURY FOR INTEREST INCOME NET OF TAXES PAID OR PAYABLE

!"-"

A

,"";; .

ill

i'i.l...... ,~ ..".- ...

Income Year

1996

1997

1998

Interest Income

$ 28

663

$3,986

Federal Tax

$ 0

97

$ 590

State Tax

$ 0

4

$ 155

Net Due

$ 28

562

$ 3,241
JUN-29-99 TUE 09:39 AM . . .

~or", 1120-POL

Oep:u In'IOI'I\ olU'l1 T,e:l~\uy

Internal f1~C'"ue S",..,..CCI

BAIRD KURTZ DOBSON FAX NO, 5013721250

U.S. Income Tax Returr

for Certain Political Organizations

p, 02

OMS No. 1545-0129

1996

For calondor year 11196 Qrother ta. yoar beginning ,1996, and ending . 19

Note' If you arc a secllon 501 (c) organirallon or a eeparate ~regated fund described In section 527(1)(3) check hem ....••.........•...... r

Nnmo Dt org,nlzolion Employer Idllll\lI1C1l1on numtMlr

CLINTON/GORE '96 GENERAL ELECTION COMMITTEE 52-1988597

Number, .rr...l, and room o<su110 no. or a P.O. boJc, .o.p~" or inllruello<ls.) CMlclkllln tor U.I. CMlJle•• OIlIy

i. P.O. BOX 19100 ~~~=:'~~.~.~~~Y.o = C\l., or lawn, S1:r&a. and ZIP code WIhlI.I' aprincipU~.,comlNrrM. bwrll NOT .. 1h.00000_............ Clloct< • 0

;;: WASHINGTON. D. C. 20036 .""",;;,;;;;_1_1_...-... _.2.1 ......... Check if: (1) r 1 final return (2) 0 Change aladdress (3) n Amended ",tum

1 DMdencls(aUachschedule) " , 1-::-1+ ---,=<=

% Interest , , , 1-::.2+ -..:2:::.:::.8

3 Gross rents , " , , . , .. 1-73+------_

4 Gross royalties , , , , 1-4::-:r----- _

6 capilalgain net income (altach Schedule 0 (fonn 1120)) 1-:.5+ _

6 Net gain or 005S) from Form 4797, Part 1I,Iine 20 (atlacl1 F0lI1'I4797) , 1-6~ _

7 Other Income and noncocempl function elq>lJndilures (see inslrIdions) ..•••••. ,••..•.•.......••...... , t-~7+ --:::-:-

8 Total income. Add lines 1 through 7 , .. . .. . .. .. .. . . .. . • 28

8 Salaries and wages , " , 1-""+ _ '0 Repairs and maintenance ..• , .•...... , , '" 1-""'0+ _

" Renls, , , , • f--o=1,:..'+ _ 12 Ta~esandlicenses , j---J1"'Z+ _

13 Inlerest , , , '" , , \-""'3-1- _

14 DepreciatiM (attach Form 4562) , , \-',,:..'-1--------

15 Other deductions (attach schedulej , , j---J'i::.'+ _

l' Tolal deductions. Add lines 9 through 15 , , , f--'1'"-if-- _

17 T"""blelncome belore specific deduclion at S100 (see InstNcUons). Section 501 (c) organizations show:

a AmClUnt of not investment income. , , " .. _

b Aggregate amount txpended lor on uempt funcUcn (allacllllChedulc) •...... , " 170 •

18 Specific <loduclion Of $100 (not allowed for nlWi5lellor funds denned under section 527(g» , I--!,.=if-----~•.,

l' Taxable Income. Subtraclline 1BIrom line 17e (If line 191s zero or lese, do not file Form 112o-PO!..) ......• f-"""'+ ~u

ZO Income lax (see instrucllons) , r-=-Z0"--'ll- -;;.O

21 Tax credits (AU.ch all applicable forms.) (see instructions) 1-"2'''-11- 0

22 Total lax. Subtract line 21 from line 20 , , ~22~f__-----~O

23 Payment.: a TaxdepositodwilhForm7004 1-"233=1'- --1

....- b Credil 'rom regul.ted Investment companies (altach Form 2439) ...2:;;3;;;b-t- -t

c Credillor Federal tax on luel$ (attach Form 4136) l.-Z~3~c'-l.. -j

d Tetal. Add lines 23illhr.ugh 23c , t--:'23::.:d=t- --;:::

24 Tax due. Subtract line 23d from line 22. See Instruclions on page 3 for deposltory method of payment .....•. p24=:--,1- .;<-0

25 Overpayment. Subtract line 22 trom line 23d . . . . . .. .. . . 25 0

_ c

IQ 0

o

c=ca

.z; E

:a 0 "0 ...

~.E

Please

Sign

Here

1 AI any Ume during \he 1996 calondary.... c>d Iha arganiz.li"" have on inlll~1 in or a ';9n.lur. or olher IlUlharily rml a

rlll3ncial81:GOUllt (~lIdla: 8 bank =unl secutil~ =unl, or other llnar<:i;)1 :ICCOOnt) in a!ot.ign """nll)'1 (S•• i""lruclian•.) ....0 Y.~ 00 No

II "Yes; entarlhc nllme 01 the foreign eounlry~ . _

2 During the Inyear, did the organization receive. distribution from, or tho grantor 01, orIran,faror

la, a foreign 1nJst? , , , .. , ..0 Yes 00 No

II "Yes:see page " for other forms Ihe organization may have III fil•.

Enter the amount or laX_pIlnte~ received or Qccrued dUring the tax yerJI ,...... ,_s=-- N-.,;O_N,.;;Eo.

4 Dale organizalion formed .:n.....1..0", ''19 (P

Sa The bool<s are in care of Stt~NON Tf\NNER b Enternameofcandidale ..WILLIAM J. CLINTON

c The books are Jocated III .. 410 vJ. 3Ab LITll..t Rr;c( AAK.d TelephOneNo.~ 501-375-1290

Und.r p.nalUos 01 p...jll1y, IdOGb,. Jh&II h.....""mined Ihisreturn. including acccmponylng o<hcdlll..Ond oI.1"",cnl~, and 10 tho bool ormy llnowIodg.

.nd llCli.r. II I. INc. corroel, Ind compille. Docllrallon 01 ",opa"" (0''''' Ihln I_I) J:i ......don oIIln1ormalion of .....h prqwothi' any knowl.dge.

1","=,"",,_- Signalu,. 01 alf"",r ColD Till.

Paid Prop""",_ I 0-.1. lchcclc Pllpll1Of·' 50Cial ~c'

olgn>wr. .ell-e,.,ploycd 432- 8 e- 62C Preparer's t--;;,=~~~----r;;~~-~"",;;:;-;;...-c=-,==~c;------~.::.c~:':<:=~"'":fr-m~~'?'7~'="'" Use Only Firm·.nom.(o< BAIRD. KURTZ I> DOBSON I EIN ~4( -UlbU:lbU :~r~~,~'QlTIfJlayacl) -=p;;;'.:::O;;.=:B'::-=O~X;'::":;3;':6:-:6~7=-=-,':::;L';:I':::T:'::'r:'::L:':E';"""R::-O"'-C""""K:-::-AR~--~ Iz::':;IP';",~oda"":"'~~7-'::2:;'2':'0~3-:'-;";3::::::6~6:-;7:---

For PapelWork Reducbon Acl NotICe, see Indructlons on page 2. ISA

STF FCDo1, 1'1F
JUL-26-99 MON 03:55 PM BAIRD KURTZ DOBSON FAX NO. 5013721250 P. 02

FT· • ... r

FOR OFFICE USE ONLY

L

State of Arkansas

'996 CORPORATION INCOME TAX RETURN

AR1100CT

01/01 . '9 .!lP_ .nd "nding __'.....2"-,-1,,,,3,-,',- .,i ~.

-

·n po FEIN • Check if SinD" W.i"htlnQ Soalas F~or

52-1988597

It FEDERAL BUSlNt!lS CODE NAME Type of Colllor.tilln

8980 • CLINTON/GORE '96 GENERAL ELECTiON ~Ot.'MITTEE • 6 00 Domaltic

it DATE OF INconPOnATION ADDRESS

Ju..l.'f ''11:1 (c, 6 nForeign

- P.O. BOX 19100 • _ DATE BEGAN BUSINESS IN CITY STATE ZIP TelEPHONE NUMBER

AR~~'; \q"j ""

- WASHINGTON • DC • '0036

FlUNG STATUS (Check Only One BolC) • 3U MULTI-STATE CORPORATION· DIRECT ACCOUNTING

• ~.~ CORPORATION OPERATING ONLYIN ARKANSAS (Prio. wrillon approval reqund for Dnct Accounling)

• 2 MULTI-STATE CORPORATION ·APPORTIONMENT - 40 CONSOUDATED RETURN. OF CORP. ENTITIES IN An

NOn· AlluA ~.IOlu1.'IttI-.N .tt ..",aJ R.ruIn uri &1tM """-rN RftiWft.IA• ., ID ""_fUItI n.ffIfind-. .." _1.11-' 21¥4 3. c:..o--•...,. TN 80GJIWf I ARKANSAS

7. Gross 5:)18$; (Less rerurns and .Uowant:e~J . · 0

· ·. · · · 7. 00

B. leiS Coat 01 Goods Sold: · · . ·. · · · · e. 00

B. Gro.. Profit: (Uns 71su Lins 8) . · ·. · · 9. 00

10. Dividendi: (S"e Jn~tI'ucrionlpDtJO 6) · . ·····. · ." 10. 00 ...

:;; I 1. Inlo.o.1: (U.S. Obli,p.ion$· S..,ln$rrucrions psge (I) . I 1. 00 · · ·. 0 12. Olhor Interest:. (Se~ In~rrlJdiDn~ p.ge 6) · 12. 28. 00 u

13. Gran Rent': .. · · . 13. DO

'4. Gran Royalties;: · · . · ·· · 14. 00

15. GOI;nli or Lossos: · ·. . · · ·· IS. 00

lG. Othe, Income: la. 00

17. TOTAl. INCOME: IAdd Line$ 9. /6J •

· ·. '7. 28. 00

18. Compenution of Cffie.re: · ·.· · · 18. 00

19. Other Sal,,.,i.,s and Wages: 19. 00

20. RopOJirs: · · . · · 20. 00

21. a.d Dobts: . · ·. · ··· 21. 00

22. Rent on BUlinBu Property: •

· · . ·. · 22. 00

23. T..xe,: . · · .. · · ·. 23. 00

'" 24. Ime'8&1': 24. 00 i!: . ·. · ·· · 0 25. Contributions: · . ·. · 25. 00

G 28. Ocproci::ltion: .. · ·· 26, 00

;)

0 27. Doplolion: 27, 00 · · . ·. w · ·· · · Q 2B. Advertising: . 28. 00 · ... 29. Penlion Profit ShJring: •

· · .. · ·

29. on

30. Employoe Benefit Programs: · ·. ··· · 30. 00

31. O\hor Doduction&: 31. 00

32. TOTAL DEDUCTIONS: (Add IJnl:$ 18.31). · . . ··· .· ···· · 32.· 00

33. T:ul:;)blelnco".,. a.rON N., Op.rating Lo...a: (Lin. 171"u U,.. 32) • I I • .. • •

· ·. · 33. ~~-' Pst

a4 No' 0 ••,.,;". ' ....r fM;u.rforNo'.·..".bleln"""'.-SH>fn$lfUCnOn$ n.... 7Cl •

· 0

··· 3.d,- 00

36. N., T...bls Income: (Urnt 33 Mu Lin. 34 Of Schedul. A C4 ~ge 2) •

· · · ·· · 3511 28. 00

38. T.x from Toblo: (IMtflICtion Book/c/ p./JI18 75 and '8)

· · ·. 3611 NONE 00

37. Busino" & fncantiva C,.odit~ (AtttH:h III origin.' ccrtmcl1tcs)

· ·· · · · 37.- 00

:2 3B. Tox L;"bmty: (Lin~ 36 len U"., 37) · . 36.- NONE on 0 39. EstimOltod T.3x P~id: (Including e5ritn61c r:mryIoIWDrd from pn'or yc.rJ . 00

· · 39.-

40. Paymont With Exronlion Roquo..: (1IolJCJ>et 5. ARI10OfSC7) ·. · · · 40.· 00

;)

c. 41. Overp.ymonC (Line 39 plus Line 40 les. Line 38. en'Of' h~lO) 41~ 00

:a 42. Amount Appli_d 10 1997 Ect'mlllOd Tox: 420 I 100 .. .. '.

0 . " .' . " u 43. AmounT Applied To United 5,,,.. Olvrp;c >::. :... ,. .. .' : ,~. .... "

100J

, .. , "- ;f<· "

'.:::,: :>- .; . Comminee Program: ••••• 43. • <

44. Amount To 80 R.fundod: (Une 41 ",..line 42 IVId 43) R~flJND 44.• Inn

45. T~x Duo (Li". 38 ku~ lJnt1~ 39 lind 40; .••••••• 4 •••••••••••••••••••••••• 45.• NONE100 1-.46. Ponol1y Fo. Und~rp.ymonl.~E'limo,od T.x: (Atloth AR2220) LiS! oxcoplion choekod in Part 3. • 0 46.• 'on

1n~~crp,U1tl&o:1lWf 45 "Iu, W- 41l'J '" •••••••••••••••••••••••• AMOUNT DUE In NONE 00

.. -", ., \ 7

"
1)_II."m"nl of Ihe ft",ur',

Int.rn,,1 1I....nll. ';.",IC.

bhlrtu ~UrtIL UUb~UN rhX NU, bUljlilcbU u.-. 1I1\,;UIIICJ • CiiI"" • , ..... , .......

10....en,din Political Organiza.__.Js

r.an 112D-POL 1\.,.111

'~11lI ..,,.,,, 1'J!J1 ," '11'~":.':""':":'~I:••::''''::''''~Q!.:,::.n":''::":;Q -:-_-:--:--_.__:..'.:.19=:9:::7::.:::::.nd=-..:.;;;n~d.:.in::g--: .:.~._,

For P',porwork Roductlon Act NotlC:•• Qua In:ltructton:1 on p4CJO 4.

Not.: If rn II JIlt ~f1'''l)" !1~QM""'lon u, II ".pAf." "'Qr.""lad I~nd dllterlb,d 1ft uc1tDn 5271IX3L chode ill" ·. .. .-, N..,'" f,' oro:ltuLilhon ItIlIpI_ iIl.m,'lc."on numc.,

..•

I: CI.IIITON r~r.,p.E ' ~J~ 'jElTE?AL t;OMMI'rTEE, lHe. 52-1988597

• "Numbet. :,lfUl. :",d Il)Om 01 ~II. no. In • P.O. boX, I" plgi 4 of ~1,ucuon'\,) ... u.s. c....••• o"'y .. • IN ..»...--, CMl~ CDft'nuU". IrwJ It It lIM LJ 'C ".0. BOlo 1'H 1)1) ONLY ,...icol CO"-". _ Iml •••••••

; CHV Of \D"Nn. -:.Ial., .nd liP cedo WUNJ • a pMClINI e.aMPHII" calftM'U", bed e NOT

i - 1M 0fiItrw' poiticM Cllfl'll'ftll". dMIc¥ "....1tCS :Urach a

WAS1HNGTCU. D.C. 21)1)36 I CoOPt ai ~".tiD" -is•• Iftd'uttio"" an D~. 21 ... n

Cheer 4: 111 Fiul '''''''n f2) I Chongo 01 odd,... 13) : Atnefldod _n

1 Oivitknds (Oll.ch ,chodulol 1 · · · ·· · ·· · · % Im.,.st

· · · · % 663

· . · · · · · ···.· ··· · • 3 Gloss lents . · · · · · · · · 3 · · · ·. E · ·· · · · · · · 4 Gloss rD'{:'ltnlls 4

0 ·······.· ··. u · · · · · ·· · · · 5 CJ:pit.1 oatn net income (anKh Sdlldule o (Fotm t 12011 5 .: ·· ······ ·. ·· ·· 6 Nil Olin or /lDu) Irom Form 4"7. POI1 1I.lino 18 (.\llch F.,m 47971 · · 6

· ·· · ·· , · · 7 OIh.. inctlim. 'tnd noncsempl 1_ D.lplru:lnur'C' ISlII ,"S11UC\Jon~1

· · · · · ···········. 7

8 TotBl incomo. Add lines I through 7 ·· · · ·· · · · ·. ·.·.· ·.··· 8 663

9 ~II,io~ Ind w:agrs .. · · 9

· ··· , · ,

'0 Rcpairs iand milln'~n.nce ·· ·· ··········· · · · · ·· ·· · · · ······ ·· · 10

" Aents .. . · · · · · · · · · · 11

12 T!Il:cs 3na ticcftses · · · ·· · · · · ,

·· · · ·· ········ · ·· · 1% .. · <: 13 1n1.C,,",t 13 .. .. · · ·· ·.·· , · · · ·· ·· 0 · · ·· .£ '4 O~prlu:ialiDn t.n.ch Form ~562)

· · ·· · · · , ·· ··· ·· 14

:l 15 Other deduclions (."och ""hedu", ... • ~T1l-'I,<;II:\F~.-r. .~~. 15 265

0

.. 16 To...' d.-dLletion:.. Add lines 9 through 15 · · ···· · · 16 285 ·. . . . .. .. . ., .... .. ...... t .. · ··· · · 17 TUlb11! Income boafcrc Spoc;frlC: d.duetion 01 S100 (sec irtstruC\lon$). Seelien 5011c) oroO\niuricrns "'- a Amounl 01 nat Investment lncome ·

.- · . ...... ·.. ·.. · · . · b lIgarog"• .lIYlDunl expended for an eltempt fvnt1lon tOl'l'bch schedul.) 17c 378 · . · . '8 Specific deductiDn ot S100 tnol .110_ for OIW'Sielior lunds. derinod under 3ection 5271g11 ....... 18 100

19 T~.bl. irtcem•.o SubttACl - ltne. 1a hom lin. 17c ~I fino 19 is zero or ":c. do not 1i1e Form 11200P0L1 ·· ·· · 19 2'" . 20 Irw:omo t•• /:;ee i1'/llructiDns) · . · .·..... · · · ·· ·· ··· · 20 · · · - 21 TD:lt c:redit4 (Ana ~h .111 applicable fClfml.1 (Soft: iI"lSlIlJCllon:) · · 21 · · · ·· · · · 22 Tot.11 tax. Swbuar:t line 21 from lina 20 .... ·.. · · · · ·· 22 97

" 23 Payment::.: a T~.. depo:l;led with Fotm 7004 23. 100 ...." ·. · · · b Credit rQt lu p:»id on undis.tributed capi~1 gaj~ (:mach Form 24391 %3b

c C,edit for Fedetill Ullil on rucb (an.ach Farm 4136, 2Jc: · . · d T•••1. Add nno. 23. ""oUOI> 23c · .23<1 100 · . · .. ·.· .. ·. · .··.. ·. 24 TIX due. SUb'rL1C1 line 23d hom Ii". 22.. See in&IrUctioM on P.:lge 1 10 r depository m.,hod 01 paymen' · ·· 24

25 Qvorpsym.nt. SublrJC'l lina 22 ham line 23d ·.. ·... · ...... · · . • •• I · .. · · 2S 3

1 ~, :It'iV tim. dun~ lM r997 Rkf'4"r V-M. oiJ rM Dr9"ftlUfiQn h..... lit') in'orl'l in or ,igl'l'«UfO or ether ,au1tloril'y (Wet ,.

lin.."c~1 Account IlI:uch .H • ~nk ICCDUftl. 'Ku,ilie1. aCCOunt. or othllr litlanoa1 ,ccount) in a lonliyl\ COUIItry? (Sn insttuction,.) .. OVos WNo

II 'V...' enter tho nAme or d\I loreign country .- <: .. ...... .... ...................... , ....

a .g 2 Du,ing ,hI!! \Ill 'VGlr, did the crganiDltloft recGive " dflll1bul'Oh ',om. or was IE th. grantOf ot or Ir.nsloror

C

0 10. ;a lo,,'gn. 1_1 OVos WNo '" ....... · ·. • ..... I I · . ·. ·.· .. • • t • .. ...... , .. ·.. . ... ."

:~ E If '""'(n: Ie. page 4 '0' D\Mr I.nM lM o,ganiz.lIMl" m~ kavl 10 lilt• 0 ...

0<{ :5 3 Ent., lhlt .,mounl of .......mpt ime"'" ",,,,ived or Ktrued during the MJI ve~r t ........ I I .. I t · . '-1 S NONE L

4 DiCe' org"nilOlbolt 'ormood ~/22/96

5A Tho bcok. ~. in c::ar. Df .sHANNON"TNmER'" .... b Enle r nam. 01 Clndid..,. ~~J:.g.I.J.'l:l... J..•. CLINTON

c The books ar. located It ~4lii.~: '~ii"i> "i"'I'';;;'? QOr~ Af( 7Zl.CI d T.t.pIIo... w•. .-501-375-1290

Unct.r 1'.11'01111.' 01 pot,.,,.,. ) ~Laf. th~ I h.........mll'lfld U'lil Ill\lm. ItICI\ldll'\g aeeon'p.:lInVlnQ :chodu", oft\J 1U,torMfllt. "ftd \II nIl b." 01 ":tV knowliDdO.

P10"SIl ~md buh.,l. It l~ tru•• c:eI",ct" ,lftd COIllp!lll. Oac:UrJlion of pC'D",.r lOI~.r tl\ol1l\ t~J.P ..ver) II bu.d on wMOrmal:.etn.ttI ""uch P'~'fl1 ltn Iny Ill'low\cldOI.

Sign

S,TJI~~"lht.r I Hero O"to Tit"

PAid "(ttf),llll"'~

_______.__..1 0.'1.

ICho,k d ..II· II Prop.....', ,0CI.1 ,"c""ly ".1.

..nployod .- rli 432-89-620·1 _ Prop.for':::r '1I1911.t11l10 .- "1;;m.~ nomn (or UI\!RO. Kua'r7..' {)O!3:'iON I FIN ·1-\-0\60260 U~n Onlv VI1UI\ II :,.1lI1l l1Inltll1V~un ..- .1111( .'lftlrll:\~ f'l C. p;,.Jx 3,-~, ./ -L\ n \£ a,(){.K A~ ...,2).0," I !.IP CQtl~ 1:~2\)3-.lo6·1

.. - r,:,\

lW',\·'" ' .......1
jUN-29-99 rUE 09:40 AN BAIRD KURTZ DOBSON , ,

CLINTON/GORE '96 GENERAL lMMtTTEE. INC,

FAX NO. 5013721250 P. 04

b2 - 'J ~:H:I~b~ ,

~IlM lito.. 1'Oi-) L..tNc 15 t:>~'J""AI /...

:::==--==--=.=:==:-__-=.=1::1I==::::- -- -_==--.==rc:----==

Line IS - OthQr deduotions

ACCOUNTING FEES

Total

---~~===----=======~~~==~==

285,

285.

---=====a::--===

Statement

."
JUL-26-99 HON 03:56 PH BAIRD KURTZ DOBSON FAX NO. 5013721250 P. 03

FOR OFFICE USE ONLY

L

State of Arkansas

'997 CORPORATION INCOME TAX RETURN

AR1100CT

a1/a1 .15 97 .n<I.ndl.;_......:''-=2...1''''3::...,:.1_. t~ 97 • ·§Chock 1/ Filial Arl<.1...... Ro"""

• Cttnclc. I' I-Illng U FiNincial tna'rinrnon

• P~IN • Chock if Singkl WD~h!ino Sale. F;ctor n I

52-19BB597 • f-:::~-::-::=~=:--~~----------------------,-=----:--:----:-L_..l-I • FEDERAl. BUSINESS cepe NAME Type "f C",po,otion

8980 • CLINTON/GORE '96 GENERAL COMMITTEE INC. • 5 CKJOom.,.tic

• OATI! Pf INCORPORATION ADDRESS

b;i0;;8r.:/:.:;2;:;;2:;;.i;;/m:9i::6=-;;;;--+..;:n:;;P~. O=....:..--=B~O:.:.X:.....1.:...;9;.'.:.;O:.0:.... =n- -=-..-- -I.--..<.i.8dn~i+.Fi::0"'~.i::i:n.:;-_ • DATE BtGAN BUSINeSs IN CITY STATE ZIP . TELEPHONE NUMBER '

ARK6"§t22/96 • WASH JNGTDN • DC .20036

FlUNG STATUS (Ch.ck Only DnD So><) .3U MUL1'J.STATE CORPORATION· DIRECT ACCOUNTING

• , CORPORATION OPERATING ONLY IN ARKANSAS (Prior wrll10ln npprowl required far Di",ct Accounting)

• 2 MULTI·sTATE CORPORATION - JlPPORTIONMENl' .40 CONSOLIDATED RETUnN • OF CORP. ENTITIES IN AR J.,:--:.~"":'::'=:=:':::;':''::::;'::'''::;;::'=:'''':''::'':''':::'':'~=:'~~'':::::::''::::=':':''::::;';';:~::''''':::'''':::::'::':'':::':':':';':':':;':':'::':':''r====f=.~:':':-;'==- I

NOTE: Attach camDiotod CODY of Foderol Aeturn bnd .sian AtkDnsD,'J R-,:urn. fSot frutnlf:tions. JrMon.nr Rtlrnin~1'S. 3. "f'fm 2 .nd 31 ARKANSAS

00

00

00

00

00

00

00

663

7. Gro~ Sala~: (LcU/'CtClrTJ$ Itnd .'Jow."ce~). .".... •• .. .. .. .. .. 7.

8. Less CO$I of Goods Sold: • .. .. .. • .. • • .... """ ,.. .. .. 8.

9. Gress Profit: (line 7 less LinD B). • I • .. .. .. .... ....,.. •• 9.

'0. Dividends: (Se.'n$tnJction~. pil$70 6). • • • .." , • .. .. .. • "" 10.

1 1. Intc"c~t IU.S. ObligArjol'l~" s•• Jn~uUl:rion.r. p;ItJ. 6). ... .,. .. .... "" .... .. ,1.

'2. Olh.r Inlor••t: (Sec InslfllClItmS .p.ge 6t 12.

13. Gro:\s Rent.:.... ••••• I •• I • ... .. .. .. • •••• I .... 13.

,"'. Grc33 ROYQlliCS: ...... .. I • .. 1". 1--------" 1lI''';''-~~'''''Q2

, 5. Gains or Lo$so~; ••••• .. .. .. ...... • .. •• 15.

16. Other Cneome: 10. 00

17. TOTAl. INCOME: IAddLinos9· 761.. • • •• •• • 17.. 663.00

Q:

lB. Compensation of Offieor~: .... ......, • ...... •••• 18. 00

19. Ollter S~I.ri..s and W'e." 19. f-----------llq

20. Rapair.: •• .., _.. •••• •••• 20. t-__.. pD~O

21. Bad D.bt.: • •• • " • • •• 21. 00

22. Renl on Duaino.s:s. Proporty: • .. .. .. .. .. .. .. • f" "" ... 22. f-----------. p~

23. T8X~~... •••• I • • • ... .. .. • • • .. 23. f-----..,.------f9-C!

U) 24. IntCfo..~,t; .. .. .. • I • I .., .... I 24. 00

25. Contribution:s:.......... • • • .. .. .. .. .. • .. .. 25. 00 t 26. Doprcci:nion:. • • .. I • I • 26. 00

E 27. Deplo\ion:.. "" • • ••• I • .." f .... 27. 00

28. AdVflni!.ing~. ...... .. .. .. .... ........ • .. • ... .. 28. 100

29. Olh.rDoduclions: Stmt 1 29. _ .._. ~2".:8~S=-'.¥ln~'0

30. TOTAL DEDUCnONS: (Add Un"" 18· 29t. •••••• • • • • • • • • •••• 30.• ..:::2;.:B=,S~.l""'00

31. T..abloln.omoBeforeNetOp.....~ngLo....:(Un.,71••• Un.jOJ • • • • 31. 378.Il'ltl

32. N.t Ohar••in" I h,.~ fA.II,LOt fa"W.".ro>mblo In""",,, . S•• '""r~~; ;.:..'7C~ . . . . 37.. 00

33. NolT8J<:lbl.ln.ome: (~31J.u Un. 32 evSch.doJ.A C4 p.g<>2t. • • • •• ." •• 33.. 378. 00

34. Tu from T.ble: Ill>ItnIl:tiorlS""kIlrlpnga 15 end /(1).. • • • • • •••••• ••• •• 34.. 4. 00

35. BusinQ::::i; & I"ce",ive Crecltts: (Arr.d1 .11 Qrigin~1 ~I'tificatu). ••• ", .. I '" .... 35.. on

311. Tax Uability; (Una 34103$ Uno 35). • • •• • •••••••••••• ••• ••••• • • 36.. 4 . 00

37. Eatim""l':d Tft,)( Paid: (Including e.ttinl.r. ~rrylcrw.rd/rom prior)"(ttl,). ,........ ....... .." # • •• 37.. :00

5 38. Poymant Wi tit blonsion Raque.r. (VOur:lJOf 5. AR 1700ESCTJ. •••• •••••• 38.. 00

... 39. Ovarp;rymenr. (UnG j 1 pfus Une 38 feR Um 36. ontCf ""'-t • • • . . . 39.• e-- .. . . 00 B40. ArncunlApplied to '998 EatimatadTi1X: •• • I I • ,. 40.-1 00 ,j];.;~~..::...::I.i:i:;':·~f.:.-:'l~· '::/.

4 1. =:~~~~::Pi. Cammin•• Program.. '" 41.... 1 00 ::;~t:;~·:",,:'.~::~:t\:;:.:". '0L 42. ~':~,::~ ~i:"~-:':~:::;::':9 ·1.:;L;n. 40:47~ .nd of ;8t • • 41

D. •I ATT_,~~ ~]{,; ~F:t::~ ~'..."~~.'"~~ ~.:: '".;;"~ • . .. • .•.•• tAL .. IlJ. rax Ouu (Unc3/ild$!l£I""!l 37.n(38). • _ • •• • ..Pa9"-9143 " '1 of ......'> 4.0.0.

44. P.n.ltv For Unc;crp.vmon, 01 E.,im~l.d To" IAnoc~ AR22201 U.. ""ccption chccked in Port 3. • •• L.J 44. • '09..

45 Amaunt nun: 1/ In" 43 ,,/0",In" 44t • AMOUNT DUE 45. 4 . 00
BAIRD KURTZ DOBSON

.....

JUN-29-99 TUE 09:40 AM

1120-POL

lnC ur tne Tn::,l:',;ury

.C'wl8nuCl S~Mc.e

.'

FAX NO, 5013721250

U.S. Income Tax Return

for Certain Political Organizations

'.,.....

p, 05

olAe No. 1545·0129

~®98 =or calendar year 1998 or other tax ye~nnln9 • I998. a~n~d~e::n~d~in~Q . ~19L-,--,

10101.0: If YOU are a section 5011c\ organization or a soparate segregaled fund llesaib<:d in sedlon 527tfl/31 check here.. • •• ,........ •• I I

1 Name of organization Employer IdentlllCllIon number

CLINTON/GORE '96 GENERAL COMMITTEE. INC. 52-1988597 i Number, olreet, and room or suilQ no. (If a P.O. box. see page 3 of InsttuetJ0n5.) CUdld.1oO lor U.S. Cone..... Only

a• P.O, BOX 19100 ONLY Illhili"Principolesnp;li{JncommiUe poU,ioI commilloo, Chock here......• • • • • • ndRI$1II0 0

;; City or town. slate. end ZlP code If tHis I~ • princlpftl camp3l;n commmu, bul " NOT i. W~SRING"ON, no 4 PC 20036 COn", tho onlypoh,icol 01 d.siltonmJanoommill 'S"" JnS1tuetJons ... _heroOndOlla<ha on f'\~ 2 \ • • n

Check If: 11) I I Final r~urn (2' I I enaMeof address 131T T Amended retum

1 Dividends (attach schedule) • • •• ......,..,....., •••••• ,.......,.... •••1--!1'-i-----=--=-=l--

2 Inlete$l.......... ••••• , ••••.••.••• , •••••••••••••• , ..•.• , •• 2 3,295

3 GlOSS rentG •• • .. .. • • .. • .. • • • • I • • .. J • • • • • .. • • • • • • • .. .. • .. • • .. • • • .. .. .. I .. .. • • .~3=--t-----""'::.!..::':::=+-- 4 Gross royaIUes ••••••••••• ,. • .• , ••••• , •• , •••••••••••••• , ••••••••t---:4~l--_- -I-__

5 CapItal gain nellncome (attach SChedule D (Form 1120)) • • , , • • • • • • • • • • • . . • • • • • • , • • ., i--=5'-j ~_

6 Net gain or (loss) from Form 4797. Part II. line I 8lattach Form 4797) • • • • • • • • • • • . • • • • . , • • . • •f-'6:.....f- -1._

U'l 7 Ol11er Income and nonexempt funclion expenditures (sea lnstruc:lions) . • • • • • • • • • • • • • • • . • • • • . •~T~I- -l-__

1~;-~a~_T:':D:2Ia~lwl~nco=m:!le::..!:M=d~lin!.::e::s:..1:.th~rO~U~"lh:.:7....:.. •...:.....~'"':'_':...:.'~':..:.' ":'~':..:.' ..:'~'~' ~.":'~':..:.' ":''';':..:.'..:•..;•..;.:...:.. ..;•..;.:..:,.';''';':..:..'":";';",:..'..:.'.,:·-=-+-=98-+ ...::3~•.:2:.:9:.:5:.t-_

9 Salaries and W39K " • • • • • • • • • • • • • • • • • • • • • • • • • • • • • , ' • • • • • • • • • • • • • •fo-"':c-'f-------_+--

\:j 10 Repairs and rnalnlenance. • • • • • • • . • • • • , • • • • • • , • • • . . • • • • • • ••• , • • • • , • , • ,~1O~f-_' _+-_

, 11 Rent••••••••••. , ...• , .•• .., ••••••••. , •••••••••.. , ••• " •••)-!1.,:'_I- +._

l"~" 12 T;axes and Uc.en'e5. • • • •• ,., ••• ,.",., •••• , ••••••••• , •••••••••••1-1~2"_1:-------_+-- =~. 3 bJ g 1 Interest I .. .. • • .. .. .. .. .. • .. • .. .. .. • .. .. .. • .. .. .. • .. • .. I .. .. .. • .. .. • .. .. .. .. f • • • • • • .. .. • • .. • f-:.'1~"-------_i_-

;; 14 DQprecJalion (attach Forrn 4562). • • • • , , • • • • • • • • • • , . • • • • • • • • • • • . , , • • . • • • • •f-1"'4:!...1!- _i_--

rfJ~ 15 Other deductions (attach schedule).. SiE .S7ATEKER'l. 1 , ••••••..••....••••.•...1-1.:,:5=-t ..;l;:.!.""7;.8;,6;j._

!t~D 16 TQIlII ded..cIIon~. Add lines 9 through 15•••..•••••.•••••••••••••••.•.•••••. , .~16~i- -=1:.!,,,,,7:.:8::..:::61-_

,_. >. Taxable income before "pecine deduction 0' $100 (see inslrucfjons). Seclion SOl(c} organizations show:

• ","ount of net Inveslmenlincorne • . • • • • • • • • • • • • • • • • • • • • •• ...

b Aggregale amount ellpendBd !Of an exempt function (anech schedula). , • • • •. f.!'W1~e,+ ..:1:.!,:.:5~0~9~_

18 Soecific doducl/oll of S100 Inolallowcd ror n~sle\ler funds defined under section 52710\\. . , • . 18 100

19 Taxablo Incomo. SublraCllina 18 from line 17e (Irtine 191s zero or less, do nol file Form 1120.POL) • • , . . " f-1~9~f----....;:1:.J:._1:..0=901--

20 Inco,"e tOlt (.ea In'\rucUons), • . . . •• ......,.,.,............,......... f-2"O,.-1f- 4:..:.:: 9 301-_

21 Tax credits (Altach all applicable form•.) (see InslrucUons), ••••.•••••.••.• , ••• ' , ...•..•""'2.:.1-+- 01-_

=22 Tolallall. Sublract line 21frorn line 20 •• , •••••••••• , • • • . • , ., "..... r-2

=.2=..-f- 4:..::;.3=+_- 9

I- 23 Payments: a Ta.depositedwith Form 7004 •••• , ••..•••••••• , 23a 200

b Credil for tax paid on undistributed capital gains (attach Form 2439) ~2~3~b~ ---4

e Credillor Fcderallaxon rtJels (attach Form 4136)•••••• , , ' • ~2:.:3~C:J- ---4

d Total. Add lines 233 through 23c.•• , .••• , ••••••••... , •...•••.••••.f"2"'3"'d"l-- -:2=.O=.0=+_

24 Tax due. Sublraclline 23d from line 22. See inslructions on paoe 3 for depositO!)' method of payment . • • , • • • f-2...4~f- ....:3::;.O::;.7..:.+__

25 OveroaymenL Subtraclline 22!rom line 23d. , • • .. , •• , •••• , ••.•.•.•••••••••.• 25

DYes !KJNo

-.. '- 0:-

0"

=E :g~

<E

1 At Dny Umo during tho 1liJg8 e3lcndaryvar; did the orgMizatlon haoJI at'1lnunsr W\ or. sign:nuIlI orotnerauUl0tNyowrB

llna"~ ..1CCCunl (such N a bMk iltcount.. &CCUrit1K account, or other fin~1 account) In • Ibroign country7 (Selil in~1ructlon:;..) .. ..

If "yes,' enler the name of the foreign counlly • _

2 ~~;f=:'~i~ ~h~ ~~~~~~ic:" ,r~~i~ ~i~~ib~t~o~ r~,:": ~~s ~t ~~ ~~r:".of: ~n:'~rC>" •••••.• , 0 Yos 0 No

If "Yes,' the organlmUon mllY have to file Form 3520.

3 Enter the amount or tax'ellempl inlefeSlfecelved or lICQlled during the ta>c)'8lll ••••••••• , , • , .~ ~.:N.:.:E"- ..JI_ .. Dale organization formed ~~~~~~~~-- _

5a The books are In caroof ~~~~l:!l:!Q~_~~t!l!~~____ b Enler name 01 candidate ~~!~~;~ _~:. _c:.I:,~T_O~ _

c Thebookssralocale<lat ~1l0 W 3rd. LT'M'T.E TlOCll All dTeleDhcoeNo. ~501-375-1290 Una.r pon;)tue. or perjury. , dcclar. that 1...--. eQm~ thi: I1Ilum. w.eluding ilCtOn'Ipanying sd1etiule$1U'\d :elouunems, and to tile DeS\ or my tel"lQ'llAcdoo Please 3nd balief. It is true. correct. and complete. Oecl."atlon at preporcr(ctMl' th", t:lwp8)'8l') It bastKl on aM inSOtm:tUon of 'fo4'\lcPl pn.:p::trer hlA ony knooMcclgo.

-:qn

re Sign-lure 0' ollie«

L~__ 0:.10

PaId Preparer's .... IDalll jCheck Wself· n. 1Preparer', sodaIsccurily no.

slgnalure ., emDJoved~ 11432-08-6204 prepllror'sI-i~~:-:=:::-:-:_:'------=__-=_--.,_-......,_=___.,...-J'-,..-----..L!:!!.!l~~.::::--LJJ..~::...~~~::..::.- _ Finn's name (or BAIRD, KURTZ & DOBSON IEiN H-0160260 Uat Only yours. If sett-employed) -.;;.::.;.;.-----

"ndoddtcs. P.O. BOX 3667. LITTLE ROCK, AR 72203 IZIPcode~ 72203-3667

~:: Paperwork Reduction Act Noties s•• lnstructions on page 4. ~: .. .~- .-,.. ~. y.z:;L~~-~~1~20.POLI199B
·~UN-29~99 TUE 09:40 AM BAIRD KURTZ DOBSON

CLINTON/GORE '96 GENERAL COMMITTEE, INC.

Form 1120. Page 1 Detail

FAX NO, 5013721250 p, 06

52-1988597

Line 26 - Other deduetions

ACCOUNTING FEES

Total

1,786.

--------------- 1.786,

Statement 1
·.....

.}UN-29:99 TUE 09:40 AN BAIRD KURTZ DOBSON

CLINTONIGORE '96 GENERAL COMMITTEE, INC.

FAX NO. 5013721250 p, 07

52.-1988597

Form 112.0, Page 1 Detail ~=====~=========c==--==_---===~===~==# =-==~~==_==,= --3~==a__==_~====e=~=

Original due date of return: 03/15/1999 Date return filed: 07/15/1999

Extended due date of return: 09/15/1999

Late filing penalty:

Mo nth s f i I j ng I a t a . Late fIling penalty rate %

Amount subject to penalty . Amount of late filing penalty . Late payment penalty:

Mo nth $ pay i ng I at 0 4 . 0

Late paymant penalty rate , ,....... 2.0 %

Amount subject to penalty.. 293.

Amount of late payment panelty ..............•..............

Amount of lato payment Interest Isee detail below) .

Amount of additional penalty and/or Interest .

6.

8.

Totel penalties and/or interest............................. 14.

b) ============~==:;;;=

Revised tax dUe including late penalties and/or interest:

tU Total tax. Page 1, line 31.................................. 493.

'1.·.-.··'Less: Payments, Page 1. Ii ne 32h 200.

Plus: Underpayment penalty, Form 2220 .

Plus: Late payment end filing penalties and/or Interest 14.

Less: Backup withholding .

Total tax to Page 1, line 34 . 307.

~====::=:==a====;;;;;;,===

De t a i I of late payment interest

Amount subject

to Interest From To Days Rate Interest --------------- -------- -------- ------ ----- -------------_ ...

293. 03/16/1999 0313111999 16 8.00 1-

2.94, 03/31/1999 06/30/'999 91 8.00 6.

300. 06/3011999 07/15/1999 15 B.OO 1 .

Tot~1 lete payment interest , , .. , . 8.

==================:::11-

, ATTACHMENT C\ P'~"8 _YZ- of_L

Statement 2
JUL-26-99 MON 03:57 PM BAIRD KURTZ DOBSON FAX HO, 5013721250 P, 05

-

'-

I

lYPEOiiiiusiNESs-----

f10lITIr.AL nAR,

o-2O·..·-·-----·---1-9-9-8-.,I-~-*-*--D-IS-T~R-I-CT-O-F-C-O-L-U-M-B-IA-G-OV-E-R-N-M-E-N-T------,,.----- --_..

~orll.tion_fran(:hiseTax ReturnlJ_--'-==-_O=-F'-F'-IC...:E::....;::O.:..F_T~AX_=_.:..A.;;.N.:..D'__'_R...;;E.:..V"'E.:..N...:..U=E - - DA1'E"RECEIVED<'----

T::IX3blc year beqi"ni,,~ Q 1101 J 1 DS _..;.::n-"d,--e""n-"d~Jn'.:J'OL.. __T __-,I,<,>,:,;",_,',,:,I':''''''''''.I-------J-:-------_ ~~~~~*",.----'-'-'-~~---- NAME OF CORPORATION J ~~...~NES5 TAX #lfPLI et>.fO~ CLINTOH/OO'U! 'fa (J!lt.~~tF.'?!.l!'..!.ll.E"'E"-'!.!"!!>C~--_fc;;~'DA"n1-.....!~~~---....:....:----_----_.

P.o. 00' Ill.. FEDCRAl.I.DI'1 NUMBER

___ •• .. .~ ...._.. _._!"ASHIHurON DC 2.003' - lSz-Uaeen

MAlUNGADDRESS p.o. 50.11100 NUMBER OF BUSINESS LOCATIONS

In tho oUlrcjdo Ih/l WASHINliTbN. OC 20036 Di51rict NON! DhiWct: 1

ID,C. ADD~E5S

Ji_

READ INSTRUCTIONS BeFORE PREPARINCl RETURN -. (t:!e!~!...-~U=SI::;N"'E'-=S:.::S:..:I..:.T:::E:.::M:.::S"T:.;o~e,.E..::A::L:.::L=O=C"'A"Tl!:O:3l-1 , -,._-{

1. GROSS RECEIPTS, LESS RETURNS AND ALLOWANCES ,

2. COST OFGooDs' SOLD "rom Schedule A) AND/OR OPE~.I!9:.::N:.::S,,(J":Att=ac=:h'-'."'I;d"'e::;m-"'c""nt:L....)-------_j---------_l_'2L...j w r-L~o~:;.~QE!!~ SALES AND/OR OPERATIONS .. (Line 1 minus Lin. 2) _. _. -.-----__f-3_

;:! 4. DIVIDENDS (from Sch.dul. C) _ • o

!i 5. INTEREST IAltach .t:ltcmcnl)

;;; 6. GROSS RENTAL INCOME e

7. ROYALTIES (Alt:\ch ..t3t.m.ni)-- ---....-------------I----:-------Jf-7y

CI 8. (al NET C~e!!t..b..Q!.".!~UAttachcopy 01 completed Federal Schedule 0) --1------------1-!!.l!5111

(b) ORDINARY GAIN (LOSS) FROM PART II FEDERAL FORM_."4.7~!J,,,7~',"cA-",lla",c""h-=c",oo=vo,-,'c::;o:::m=ollcl:.::e::.d.:::Fo~r~m"'4t.!.7::.971'-'- _ _j---------+Je!l!"b!!lj

.Jl....9.D:lsR INCOME (Attach clalemont} ---.-------1-------- -=--1-...9--4

10. TOTALGROSSINCOMEIAddLlno.3IhrouQh9) 3 295,10

LO

1.8-...

__ ..... -.__ .. ..._._....__ ~. 1.....

15

. -i -f-!1!.,7_ _. -_.- --.--------------i-----------f-!'~G

11. COMPENSATION OF OFFICERS (from Schedul. E) I' 1-'-'-'-===":===:""':;''='':'='==->-====-=-------------------t--------f!..!-l

12. SALARIES AND WAGES ----••- •.•--------------------------:!------ -4"''-!2-l t-1:..:3"_.-':R"'E"'PA"'I:.:.RS"-:: • . -+__-------f."'.,:!3-i

14. BAD DEBTS (Sec Instructions)

15. REf>IT

D( 16. TMES {(ram Sch;dui;i;-'-'--

We '7. INTEREST II: 1II - •• o 18. CONTRIBUT\ONS.l~~~b..~~\!!!!!!!!l, +-

> t; 19. AMORTIZATION IAt/och coov at comole/ell F.d.rel Form 45gL_....• _. ..••- --_•• - ~.

5~§£·.!l!~!!\TION (Attach copy 01 comple/ed Fedcrnl Form 4562)

21. DEPLETION (All3Ch sl.t.m.nll ,_ -+ -'- 4!.2l.'_

;;: 22. ADVER'nSING ' -.---.------------I- -l£24,2_

23. PEN~J9l:H·J3,.::O"_F:I"Tc·;S::H-" ..."'R"'IN:.:.G=P_"LA=N,.S -----=---:::o-:---: :--;:--j. -:_----::=~-+=-23::....

U 24, OTHER DEDUCTIONS IAlCach .t.t.m.nt) _ ..... __._•._ _ See S tat em e n t 1 1 , 7 B6 . 2.

,5 TOTAL DEDUCTIONS - Add Line. 11 through 24 _ 1 • 7B6 , 25

U ~~~.!.~~COME (Llne'O mlnu. Line 25) .• .1..J...§..~~ __ :

13 27, NETOrERATING LOSS DECUCTIoN 27

28. NET INCOME AFTER NETOPERATING LOSS·DEDUCTION.(~in.26 minus Line 27} 1 509. 2&

<t ~.~,_(~ NON-BUSINI!SS INCOME (Attach .!alemcnl) .. ,. .,.. . '. .~

lbl EXPENSE RELATEO TO NON~SUSJNESSINCOME /Attach ctOltcmcnl) . ." ',' ;'.':' !.....;< ", 20tb

-~!---"(l.::CC=\29::l~(.::'a)l.m=ln:.::u:.:s..:2;::9:l:(tb::l·\-l,:;IIA~it:::a:::;~I~'.::d::::eta::.i:::ied:::.::s:::t.:::l.~me=n:.tlll -+ ~_42!.lQ!lS."c'

130. NET INCOME SUBJECT TO APPORTIONMENT (line 28 minus 29(~))_. 1 5 0 9 . 30

~~ 31. O.C.APPORTIONMENT FACTOR (from LineS. Schedul. K, If none, .nt.r"zero·). 1 .000000"

~5 32NETINCOME FROM TRADE OR BUSINESS APPORTIONED.!.C?.!tt.IU2ISTRICT (Line 30 mulliDlied b'I L1n'-;';' ••- .------1-:50"9-: ~;-

,!~ ;i3. PORTlON OF LINE 29(c) ATTRIBUTABLE TO D.C. (Attach statem.nt) 33

~d TOTAL DISTRICT TAXABLE INCOME· IU"" 32 oIu5 or minus Lin. 33) 1 509.,.

35. TI'.X (9,97~% a' LI~:..!' I.... than S'OO enl.r Sloo 151 . 35

;}~.._(~).:r·M PAID, IFANY. WITH REQUEST FOR EXTENSION OF TIME TO FILE .. .. ...' ... .M.lJ

(b) 1998 EST. TAX PAYMENTS . .. . .. :wtt

(c) ECONOMIC OEVELOPMeNTZONE INCENTIVES CREDIT (from Sch.dul. D) '. : "'.,' " .. , . 3Gce

37 ADD LINES 36(a), 3SJE).c!!1~~~ENTERTOTAL 137

138. TAXDUE(Lin.35minu.Li".37,i'Line35i.gr"'lerthanLine~lL- 151.11~

..~.9,.!''!?;'i~1;l)' 1 INTEREST ITOTAL PENALTY A!:1!1JtLTFREST J.q••

40. TOTAL DUE ADD LINES 38 AND 39 PAY IN ~Uu. 15 1 '9-

4,. OVERPAYMENT (Line 37 min;;;:i~-;35ifLin.37 ;s Qrc:ller lh.n Line3S1 '_

42•• mrnlT TO , 999 ~STII"'ATED TAX I I ~2b, T(; ;;E-;;;~DEO.L". ~1 ""nllO Clno .,. ....:lUJ ~~d~~:\ll,e:; 01 bW, ",CIII~I~~I~ri",I"~ p.,..ltln fcrhiisl ,tal,mlnl, .,.d'u pt.....' p.n.I\I•• Whl" D,C. CQ(I~.!.~a-2I14 and !J~~~1G1••'~Iq..' d,cl:w.lh::at: I hlrll u::llf1ll"Mt 1M, ,"urn Vld.lO "UL!,\U!JL r;o,,,c:L~ . .,' Ot_UulQU'WUD" avauiltll~~ the "'.CpMef. _ SIONI\T\JR~ 01' OIflc:l::n Tln.E , .. ' .'" c', ;•••b. _~_.. , OAY"

Ct.JFII':TE SICNAT\!RE OF PIlEPARER (~OUIClIII;l(I T."P.1yot) IlOORESSp . o. cox '"" : __......'::12. c.c .Y1'__ DATE

O.,RO XURT'. 00.'00 LITTLE ROC~, AR 1.,.,-,GG' MAILING lH!m'UCT'ION!\; M;'Ili:o CMC'Ck or money otClIrJ»fatMe ~el o.c. m:u...,. (includt! a.e. b","'n..,., ,... nllll't/>ef'. D_2;;;.--=... =-·";;":CY:::';;";-:"'=_='t,P'=~=_'::":;;.lf.. ..<i,:-J,,'.C:,.:C,==..;:;um;;:-:!.::n.;-:,:::,::,m:::.:::"''''=-'''''=-'--- 1lr'l'!\'l.I3f\() b C OIl1eo ell Tu :lnd Fl..e....".

'Ul•• etl'l F'''I'l)(11n :;to~n. p 0 eO'll: . __Fi01. vn'''In~rnn •. • 0 c: 2004&.QG01 __ .'__on or b!ronllhe••1St" O:a1 01 tn. !J'lirrJ .. 1TI01'lO'l

__ 1'oItow'ln, ........ 11\0 __efQ$l) .......Oflho ~blfl.,r.:I'