Final Audit Report of the 

Commission on 

Biden for President, Inc. 

December 15, 2006 - April 30, 2008 

Why the Audit 

Was Done 

Federal law requires the 

Commission to audit eveiy 

political committee 

established by a candidate 

who receives public funds 

for the primary campaign.' 

The audit determines 

whether the candidate was 

entitled to all of the 

matching funds received, 

whether the campaign 

used the matching funds in 

accordance with the law, 

whether the candidate is 

entitled to additional 

matching funds, and 

whether the campaign 

otherwise complied with 

the limitations, 

prohibitions, and 

disclosure requirements of 

the election law. 

Future Action 

The Commission may 

initiate an enforcement 

action, at a later time, with 

respect to any of the 

matters discussed in this 

report. 

About the Committee (p. 2) 

Biden for President, Inc. is the principal campaign committee of Joseph R. 

Biden, Jr., a candidate for the Democratic Party's nomination for the 

office of President of the United States. The Committee is headquartered 

in Wilmington, DE. For more information, see chart on the Campaign 

Organization, p. 2. 

Financial Activity (p. 3) 

• Receipts 

o Contributions from Individuals $ 8,210,947 

o Contributions from Political Committees 166,045 

o Transfers from Affiliated Committees 1,900,000 

o Loans Received 1,468,614 

o Matching Funds Received 857,189 

o Offsets to Operating Expenditures 270,611 

o Other Receipts 12,650 

Tota $ 12,886,056 l Receipts 

Disbursements 

o Operating Expenditures 

o Loan Repayments 

o Transfers to Other Authorized 

Committees 

o Contribution Refunds 

Total Disbursements 

Commission Findings (p. 4) 

• Net Outstanding Campaign Obligations (Finding I) 

• Receipt of Contributions that Exceed Limits and Related 

Recordkeeping Requirements (Finding 2) 

• Prohibited In-Kind Contribution (Finding 3) 

• Stale-Dated Checks (Finding 4) 

• Disclosure of Disbursements (Finding 5) 

• Reporting of Debts and Obligations (Finding 6) 

$ 10,656,525 

857,189 

639,408^ 

578,032 

$ 12,731,154 

' 26 U.S.C. §9038(a). 

^ These monies represent general election contributions subsequently redesignated to the Candidate's 

senatorial campaign. 
Final Audit Report of the 

Commission on 

Biden for President, Inc. 

December 15, 2006 - April 30, 2008 
Table of Contents 

Page 

Part I. Background 

Authority for Audit 1 

Scope of Audit 1 

Inventory of Campaign Records 1 

Changes to the Law 1 

Part II. Overview of Campaign 

Campaign Organization 2 

Overview of Financial Activity 3 

Part III. Summaries 

Commission Findings 4 

Summary of Amounts Potentially Owed to the U.S. Treasury 5 

Part IV. Commission Findings 

Finding 1. Net Outstanding Campaign Obligations 6 

Finding 2. Receipt of Contributions that Exceed Limits and Related 

Recordkeeping Requirements 8 

Finding 3. Prohibited In-Kind Contribution 15 

Finding 4. Stale-Dated Checks 17 

Finding 5. Disclosure of Disbursements 19 

Finding 6. Reporting of Debts and Obhgations 20 
Parti 

Background 

Authority for Audit 

This report is based on an audit of Biden for President, Inc. (BFP), undertaken by the Audit 

Division of the Federal Election Conunission (the Commission) as mandated by Section 9038(a) 

of Title 26 of the United States Code. That section states, "After each matching payment period, 

the Commission shall conduct a thorough examination and audit of the qualified campaign 

expenses of every candidate and his autiiorized committees who received payments under section 

9037." Also, Section 9039(b) oftiie United States Code and Section 9038.1(a)(2) oftiie 

Commission's Regulations state that the Commission may conduct other examinations and 

audits from time to time as it deems necessary. 

Scope of Audit 

This audit examined: 

1. The receipt of excessive contributions and loans. 

2. The receipt of contributions from prohibited sources. 

3. The receipt of transfers from other authorized committees. 

4. The disclosure of contributions and transfers received. 

5. The disclosure of disbursements, debts and obligations. 

6. The recordkeeping process and completeness of records. 

7. The consistency between reported figures and bank records. 

8. The accuracy of the Statement of Net Outstanding Campaign Obligations. 

9. The campaign's compliance with spending limitations. 

10. Other campaign operations necessary to the review. 

Inventory of Campaign Records 

The Audit staff routinely conducts an inventory of campaign records before it begins the audit 

fieldwork. BFP records were materially complete and the fieldwork began immediately. 

Changes to the Law 

On September 14,2007, the President signed into law the Honest Leadership and Open 

Govemment Act of2007 (HLOGA), which included many revisions to the ethics rules that 

govem the conduct of U.S. Senators and members of the House of Representatives. One of the 

effects of HLOGA was to establish new rules goveming presidential non-commercial travel after 

September 14,2007. Section 439(a)(c) of Titie 2 oftiie United States Code was amended to 

prohibit Senate and Presidential candidates, and their authorized conunittees, from spending 

campaign funds for travel on non-commercial aircraft, unless they pay their pro-rata share of the 

charter rate. However, in a press release dated September 24,2007, tiie Commission Chairman 

indicated that "until regulations are issued, the Commission would not pursue a political 

conimittee if it operates under a reasonable interpretation of the statute, even if our subsequent 

regulations reach a different interpretation." Since the travel noted in Finding 3, Prohibited InKind Contribution, occurred before September 14,2007, the new travel rules were not 

applicable. 
Part II 

Overview of Campaign 

Campaign Organization 

Important Dates Biden for President, Inc. 

• Date of Registration January 31, 2007 

• Eligibility Period December 3,2007 - January 3,2008 

• Audit Coverage December 15,2006 - April 30,2008 

Headquarters Wilmington, DE 

Bank Information 

• Bank Depositories One 

• Bank Accounts Three checking, one certificate of deposit 

Treasurer 

• Treasurer When Audit Was Conducted Melvyn Monzak 

• Treasurer During Period Covered by Audit Melvyn Monzak 

Management Information 

• Attended FEC Campaign Finance Seminar No 

• Used Commonly Available Campaign 

Management Software Package 

Yes 

• Who Handled Accounting, Recordkeeping 

Tasks and Other Day-to-Day Operations 

Paid staff 

^ The period during which the candidate was eligible for matching funds began on the date of certification of his 

matching fund eligibility and ended on the date the candidate announced his withdrawal fi-om the campaign. See 11 

CFR §9033. 

* Limited reviews of receipts and expenditures were performed after April 30,2008, to determine whether the 

candidate was eligible to receive additional matching fimds. 
Overview of Financial Activity 

(Audited Amounts) 

Cash on faand @ December 15,2006 $0 

o Contributions from Individuals $ 8,210,947' 

o Contributions from Political Committees 166,045 

o Transfers from Affiliated Conimittees 1,900,000 

o Loans Received 1,468,614 

o Matching Funds Received 857,189*" 

o Offsets to Operating Expenditures 270,611 

o Other Receipts 12,650 

Total Receipts $ 12,886,056 

o Operating Expenditures $ 10,656,525 

o Loan Repayments 857,189 

o Transfers to Other Authorized Committees 639,408' 

o Contribution Refunds 578,032 

Total Disbursements $ 12,731,154 

Casfa on faand @ April 30,2008 $ 154,902 

^ Approximately 33,000 contributions received from more than 20,000 individuals. 

^ As of April 30,2008, BFP made 5 matching fund submissions totaling $2,016,725 of which $1,992,225 was 

certified by the Commission; however, BFP had only received $857,189. As of June 30,2009, BFP had submitted 9 

requests totaling $2,070,557 of which $2,033,472 was certified and has been received, representing 10% of the 

maximum entitiement ($21,025,000). 

^ These monies represent general election contributions subsequently redesignated to the Candidate's senatorial 

campaign. 
Part III 

Summaries 

Commission Findings 

Finding 1. Net Outstanding Campaign Obligations 

The Audit staffs review of BFP's financial activity through September 30,2009, and 

estimated vsdnding dovsoi costs indicated that the candidate did not receive matching fund 

payments in excess of his entitiement. The Commission approved this finding. (For 

more detail, see p. 6) 

Finding 2. Receipt of Contributions that E«xceed Limits 

and Related Recordkeeping Requirements 

Unresolved Excessive Contributions 

The Audit staffs review of contributions from individuals suggested that BFP failed to 

resolve a material number of excessive contributions. Based on a sample of 

contributions, the projected dollar value of the unresolved excessive contributions is 

$106,216. In its response to the preliminary audit report, BFP stated it would make a 

payment of $106,216 to the U.S. Treasury after service of the final audit report. The 

Commission approved this finding. 

Records Supporting tfae Resolution of Excessive Contributions 

In addition, the Audit staff identified a separate category of excessive contributions that 

apparently were not resolved in a timely manner, projected to total $1,092,899. These 

contributions were presumptively redesignated to the general election; however, BFP did 

not provide copies of letters sent to contributors as notification of the election 

designation. Subsequently, BFP obtained signed redesignations to the Citizens for Biden, 

the Candidate's senatorial campaign. The staff member who was responsible for 

maintaining the necessary records is now deceased. Given the Committee's unique 

circumstances in this matter; the circumstantial evidence presented by BFP, including a 

declaration from a BFP staffer who attested to sending redesignation notices vsdthin 60 

days of receipt of an excessive contribution; declarations from contributors who recall 

receiving redesignation letters; and sample letters from BFP's forms library, the 

Commission concluded there was information to support BFP's assertions that it sent 

presumptive redesignation letters for these contributions. BFP has not, however, satisfied 

the recordkeeping requirements of 11 CFR §110.1(l)(4)(ii) and (5). Nevertheless, 

because BFP was able to demonstrate that it obtained signed redesignations of the 

contributions to the senatorial campaign. Citizens for Biden, the Commission agreed that 

no payment to the U.S. Treasury for such redesignated contributions is required. The 

Commission approved this finding. (For more detail, see p. 8) 

Finding 3. Prohibited In-Kind Contribution 

The review of campaign travel suggested that one flight by BFP on a private aircraft that 

was reimbursed improperly using the lowest unrestricted and non-discounted first-class 
commercial airfare. Because the plane utilized was certified by the Federal Aviation 

Administration and operated in a manner that required its use be paid at a charter rate, the 

difference between what BFP paid and the charter rate resulted in the receipt of an inkind contribution of $26,889 from a corporation. In response to the preliminary audit 

report recommendation, BFP indicated that it would make a payment to the U.S. Treasury 

after service of the final audit report. The Commission approved this finding. (For more 

detail, seep. 15) 

Finding 4. Stale-Dated Checks 

The Audit staff identified stale-dated checks totaling $137,757 issued by BFP. 

Subsequent to the exit conference, BFP made a payment to the U.S. Treasury for staledated checks in the amount of $8,457, resulting in an imresolved balance of $129,300. In 

response to the preliminary audit report recommendation, BFP provided documentation 

which resolved $43,400 in stale-dated checks, leaving $85,900 unresolved. BFP 

indicated that it would make a payment to the U.S. Treasury after service of the final 

audit report. The Commission approved this finding. (For more detail, see p. 17) 

Finding 5. Disclosure of Disbursements 

The Audit staffs review of disbursements suggested that 49 disbursements, totaling 

$3,779,976, were not adequately disclosed. Problems noted include incorrect or 

inadequate purpose as well as incorrect address. Subsequent to the exit conference, BFP 

filed amended reports that materially corrected the disclosure of these disbursements. 

BFP's response to the preliminary audit report provided no additional comments relevant 

to this matter. The Commission approved this finding. (For more detail, see p. 19) 

Finding 6. Reporting of Debts and Obligations 

The Audit staffs review of BFP's debts suggested tiiat debt totaling $870,296 was not 

disclosed on Schedules D (Debts and Obligations) as required. Subsequent to the exit 

conference, BFP filed amended reports that materially corrected the disclosure of these 

debts. BFP's response to the preliminary audit report provided no additional comments 

relevant to this matter. The Commission approved this finding. (For more detail, see p. 

20) 

Summary of Amounts Owed to the U.S. 

Treasury 

• Finding 2 Receipt of Contributions that Exceed $ 106,216 

Limits 

• Finding 3 Prohibited In-Kind Contribution 26,889 

• Finding 4 Stale-Dated Checks 85,900 

Total Due U.S. Treasury $219,005 
Part IV 

Commission Findings 

Finding 1. Net Outstanding Campaign Obligations 

Summary 

The Audit staffs review of BFP's financial activity through September 30,2009, and 

estimated vsdnding dovsm costs indicated that the candidate did not receive matching fund 

payments in excess of his entitlement. The Commission approved this finding. 

Legal standard 

A. Net Outstanding Campaign Obligations (NOCO). Within 15 days after the 

candidate's date of ineligibility (see definition below), the candidate must submit a 

statement of "net outstanding campaign obligations." This statement must contain, 

among other things: 

• The total of all committee assets including cash on hand, amounts owed to the 

committee and capital assets listed at their fair market value; 

• The total of all outstanding obligations for qualified campaign expenses; and 

• An estimate of necessary winding-dovsni costs. 11 CFR §9034.5(a). 

B. Date of Ineligibility. The date of ineligibility is whichever of the following dates 

occurs first: 

• The day on which the candidate ceases to be active in more than one state; 

• The 30th day follovsdng the second consecutive primary in which the candidate 

receives less than 10 percent ofthe popular vote; 

• The end of the matching payment period, which is generally the day when the 

party nominates its candidate for the general election; or 

• In the case of a candidate whose party does not make its selection at a national 

convention, the last day of the last national convention held by a major party in 

tiie calendar year. 11 CFR §§9032.6 and 9033.5. 

C. Entitlement to Matching Payments after Date of Ineligibility. If, on the date of 

ineligibility (see above), a candidate has net outstanding campaign obligations as defined 

under 11 CFR §9034.5, that candidate may continue to receive matching payments 

provided that he or she still has net outstanding campaign debts on the day when the 

matching payments are made. 11 CFR §9034.1(b). 

Facts and Analysis 

The Candidate's date of ineligibility (DOI) was January 3,2008. The Audit staff 

reviewed BFP's financial activity.through September 30,2009, analyzed estimated 

vsdnding down costs and prepared the Statement of Net Outstanding Campaign 

Obligations that appears on the next page: 
Biden for President, Inc. 

Statement of Net Outstanding Campaign Obligations 

Asof January 3,2008 

Prepared September 30,2009 

Assets 

Primary Election Cash in Bank $ 403,900 [a] 

General Election Cash in Bank 1,213,933 [b] 

Accounts Receivable 173,184 

Capital Assets 38,774 

Total Assets $1,829,791 

Liabilities 

Primary Election Accounts Payable $ 968,572 

General Election Accounts Payable 1,130,333 

Winding Down Costs: 

Paid 1/4/08 - 9/30/09 $ 827,822 

Estimated Winding Down Costs (10/1/09 - 6/30/10) 38,800 866,622 [c] 

Loan Payable at 1/3/08 1, 132,114 

Amounts Payable to U.S. Treasury for: 

Unresolved Excessive Contributions (See Finding 2) $ 106,216 

Prohibited In-Kind Contribution (See Finding 3) 26,889 

Stale-Dated Checks (See Finding 4) 85.900 219.005 

Total Liabilities 4.316,646 

Net Outstanding Campaign Obligations (Deficit) as of January 3,2008 ($2,486,855) 

[a] Adjusted for stale-dated checks totaling $8,457 issued prior to DOI. 

[b] General election contributions received do not affect the NOCO or matching fimd entitiement. This asset is 

offset by equal amounts in the liability section. General Election Accounts Payable $1,130,333 plus $83,600 ofthe 

amount listed as payable to the U.S. Treasury for Stale-Dated Checks. 

[c] The Audit staff will review BFP's disclosure reports to compare actual figures with the estimates and 

prepare adjustments accordingly. 
Shovsni below are adjustments for funds received January 4,2008, through September 30, 

2009: 

Net Outstanding Campaign Obligations (Deficit) as of 1/3/08 ($2,486,855) 

Private Contributions and Other Receipts Received 1/4/08 

through 9/30/09 

358,966 

Matching Funds Received 1/4/08 through 9/30/09 2,033,472 

Remaining Net Outstanding Campaign Obligations 

(Deficit) 

($94,417)" 

As presented above, BFP has not received matching fund payments in excess of its 

entitiement. 

Preliminary Audit Report Recommendation and Committee 

Response 

The Audit staff recommended that BFP document any adjustments it believed were 

required to any component of the NOCO statement or provide any other comments it 

desired. In response to the preliminary audit report recommendation, BFP provided no 

adjustments or comments on the NOCO statement or the Audit staff conclusion. 

Commission Conclusion 

The Commission approved this finding. 

Finding 2. Receipt of Contributions that E«xceed Limits 

and Related Recordkeeping Requirements 

Summary 

Unresolved Excessive Contributions 

The Audit staffs review of contributions from individuals suggested that BFP failed to 

resolve a material number of excessive contributions. Based on a sample of 

contributions, the projected dollar value of the unresolved excessive contributions is 

$106,216. In its response to the preliminary audit report, BFP stated it would make a 

payment of $106,216 to the U.S. Treasury after service ofthe final audit report. The 

Commission approved this finding. 

Records Supporting tfae Resolution of Excessive Contributions 

In addition, the Audit staff identified a separate category of excessive contributions that 

apparentiy were not resolved in a timely manner, projected to total $1,092,899. These 

excessive contributions were presumptively redesignated to the general election; 

however, BFP did not provide copies of letters sent to contributors as notification for the 

election designation. Subsequently, BFP obtained signed redesignations to the Citizens 

for Biden, the Candidate's senatorial campaign. The staff member who was responsible 

" Subsequent to date of ineligibility, BFP incurred and repaid a $161,500 loan. That loan has no effect on 

the analysis and is not included in the above figures. 
for maintaining the necessary records is now deceased. Given the Committee's unique 

circumstances in this matter; the circumstantial evidence presented by BFP, including a 

declaration from a BFP staffer who attested to sending redesignation notices vsdthin 60 

days of receipt of an excessive contribution; declarations from contributors who recall 

receiving redesignation letters; and sample letters from BFP's forms library, the 

Commission concluded there was information to support BFP's assertions that it had sent 

presumptive redesignation letters for these contributions. BFP has not, however, 

satisfied the recordkeeping requirements of 11 CFR §110.1(l)(4)(ii) and (5). 

Nevertheless, because BFP was able to demonstrate that it obtained signed redesignations 

of the contributions to the senatorial campaign. Citizens for Biden, the Commission 

agreed that no payment to the U.S. Treasury for such redesignated contributions is 

required. The Commission approved this finding. 

Legal standard 

A. Autfaorized Committee Limits. An authorized committee may not receive more 

than a total of $2,300 per election from any one person. 2 U.S.C. §441a(a)(l)(A), (c), 

and (f); 11 CFR §§110.1(a) and (b) and 110.9. 

B. Handling Contributions Tfaat Appear Excessive. If a committee receives a 

contribution that appears to be excessive, the conimittee must either: 

• Retum the questionable contribution to the donor; or 

• Deposit the contribution into its federal account and keep enough money on 

account to cover all potential refunds until the legality ofthe contribution is 

established. 11 CFR §103.3(b)(3) and (4). 

The excessive portion may also be redesignated to another election or reattributed to 

another contributor as explained below. 

C. Redesignation of Excessive Contributions. The committee may ask the contributor 

to redesignate the excess portion of the contribution for use in another election. 

• The conimittee must, within 60 days of receipt of the contribution, obtain and 

retain a signed redesignation letter which informs the contributor that a refund of 

the excessive portion may be requested; or 

• Refimd tiie excessive amount. 11 CFR §§110.1(b)(5), 110.1(1)(2) and 

103.3(b)(3). 

Notwithstanding the above, when an authorized political committee receives an excessive 

contribution from an individual or a non-multi-candidate committee, the committee may 

presumptively redesignate the excessive portion to the general election if the 

contribution: 

• Is made before that candidate's primary election; 

• Is not designated in vsnriting for a particular election; 

• Would be excessive if treated as a primary election contribution; and 

• As redesignated, does not cause the contributor to exceed any other contribution 

limit. 
10 

Also, the conimittee may presumptively redesignate the excessive portion of a general 

election contribution back to the primary election if the amount redesignated does not 

exceed the committee's primary net debt. 

The conimittee is required to notify the contributor in writing of the redesignation within 

60 days of the treasurer's receipt of the contribution and must offer the contributor the 

option to receive a refimd instead. For this action to be valid, the committee must retain 

copies of the notices sent. Presumptive redesignations apply only vsdthin the same 

election cycle between the committee's primary and general elections. 11 CFR 

§110.1(b)(5)(ii)(B) & (C) and (l)(4)(ii). 

D. Reattribution of Excessive Contributions. When an authorized conunittee receives 

an excessive contribution, the committee may ask the contributor if the contribution was 

intended to be a joint contribution from more than one person. 

• The committee must, vsdthin 60 days of receipt of the contribution, obtain and 

retain a reattribution letter signed by all contributors; or 

• refimd tiie excessive contribution. 11 CFR §§110.1(k)(3), 110.1(1)(3) and 

103.3(b)(3). 

Notwithstanding the above, any excessive contribution that was made on a written 

instrument that is imprinted vsdth the names of more than one individual may be attributed 

among the individuals listed unless instructed otherwise by the contributor(s). The 

conimittee must inform each contributor: 

• how the contribution vs^as attributed; and 

• the contributor may instead request a refund of the excessive amount. 11 CFR 

§110.1(k)(3)(ii)(B). 

For this action to be valid, the conimittee must retain copies of the notices sent. 11 CFR 

§110.1(l)(4)(ii)and(5). 

E. General Election Contributions. If a candidate is not a candidate in the general 

election, any contributions made for the general election shall be refunded to the 

contributors, redesignated in accordance with 11 CFR §§110.1(b)(5) or 110.2(b)(5), or 

reattributed in accordance vsdth 11 CFR §110.1(k)(3), as appropriate. 11 CFR 

§102.9(e)(3). 

F. Sampling. In conducting an audit of contributions, the Commission uses generally 

accepted statistical sampling techniques to quantify the dollar value of related audit 

findings. Apparent violations (sample errors) identified in a sample are used to project 

the total amount of violations. If a committee demonstrates that any apparent sample 

errors are not errors, the Commission vsdll make a new projection based on the reduced 

number of errors in the sample. Within 30 days of service of the final audit report, the 

committee must submit a check to the United States Treasury for the total amount of any 

excessive contributions not refunded, reattributed, or redesignated in a timely manner; or 

take any action required by the Commission with respect to sample-based findings. 11 

CFR §9038.1(f). 
11 

Facts and Analysis 

The Audit staffs sample review of contributions from individuals indicated that BFP 

apparently received a significant number of excessive contributions that eitiier were 

unresolved or were resolved but not in a timely manner. Each matter is addressed 

separately below. 

A. Unresolved Excessive Contributions 

The projected dollar value oftiie unresolved excessive contributions was $106,016^ An 

additional error of $200 was identified as the result of a separate review of contributions 

not included as part of the sample population. Sample errors included: 

• Check - Attribution Issue - The errors were contributions drawn on single 

account holder checks and attributed to more than one individual vsdthout the 

necessary documentation. Such contributions cannot be presumptively 

reattributed to another individual. 

• Credit Card - Attribution Issue - The documentation provided in support of these 

contributions included credit card authorizations and, if available, solicitation 

response devices. The excessive portion of the contribution was reattributed to 

another individual vsdthout obtaining the signature of the second individual 

acknowledging both the contribution and joint liability for the credit card used to 

make the contribution. 

• Credit Card - Designation Issue - The documentation provided in support of this 

contribution included a credit card authorization and a solicitation response 

device. The response device was not adequate to constitute a designation of the 

contribution to the general election and the excessive contribution was not 

refunded. 

• Online Credit Card - Designation Issue - Contributions were received through 

BFP's intemet website. The website did not provide sufficient notice to the 

contributor to constitute an attribution of a portion of the contribution to another 

person or to designate a portion of the contribution to the general election. BFP's 

online contribution screen stated it could "accept contributions from an individual 

totaling up to $2,300 per election." It did not state that an individual could 

contribute $2,300 to the primary election and $2,300 to the general election or a 

total of $4,600 to both elections; and, it failed to provide an opportunity for the 

contributor to designate a contribution for each election. In addition, the online 

contribution screen did not provide an opportunity for the contributor to attribute 

a contribution to another individual. Accordingly, it was not discemable whether 

a contributor intended to contribute part of his or her contribution to the general 

election or attribute that contribution to another individual. 

At the exit conference, the Audit staff provided BFP representatives vsdth a schedule of 

imresolved excessive contribution errors. 

^ A Monetaiy Unit Sample was used with a 95% confidence level. The estimate is subject to a sampling 

error of $91,693 for unresolved excessive contributions. 
12 

Preliminary Audit Report Recommendation and Committee 

Response 

The Audit staff recommended BFP provide documentation demonstrating that the 

contributions discussed above ($106,216) were not excessive. Such documentation could 

include copies of timely negotiated refund checks or timely signed and dated 

reattribution/redesignation letters. Absent such documentation, the Audit staff 

recommended that BFP make appropriate refunds to contributors or make a payment of 

$106,216 to the U.S. Treasury and provide evidence of such action (copies of the front 

and back of negotiated refund checks). Should documentation be presented that 

demonstrated any sample exceptions were not excessive contributions, it was noted that 

the Audit staff would calculate a revised amount payable to the U.S. Treasury. This 

revised amount or the unrefunded portion thereof, would be payable vsdthin 30 calendar 

days of service of the final audit report. 

In its response to the preliminary audit report, BFP provided no additional documentation 

demonstrating that the identified contributions ($106,216) were not excessive. Rather, 

BFP indicated that it would make all payments to the U.S. Treasury after service of the 

final audit report. 

Commission Conclusion 

The Commission approved this finding. 

B. Records Supporting tfae Resolution of Excessive Contributions 

The Audit staff also identified excessive contributions that were resolved but apparentiy 

not in a timely manner, totaling $1,092,899. The projected dollar value of the excessive 

contributions was $1,055,399*°. Additional errors totaling $37,500 were identified as the 

result of a separate review of contributions not included in the sample population. All of 

these excessive contributions were presumptively designated to the general election; 

however, BFP did not provide copies of letters sent to contributors as notification for the 

election designation. BFP did provide the Audit staff vsdth letters obtaining 

redesignations of these general-designated contributions to the Candidate's senatorial 

campaign, CFB. The letters were all signed by the contributors and mailed after the 

Candidate's date of ineligibility (1-3-08), well after the receipt of these contributions. 

Although these letters were not presumptive redesignations as specified in the 

Conunission's regulations, the Audit staff considered these letters to be an adequate, 

though untimely, substitute to support the "general election" designation of the 

contributions. 

This result is consistent vsdth the notice provision of presumptive redesignations. A 

presumptive redesignation does not require a vsnritten authorization from the contributor. 

Rather, BFP may send a notice of the redesignation to the contributor and inform the 

contributor of his or her option to request that the contribution be refunded. The Audit 

staff determined that the signed forms authorizing the redesignation of Presidential 

'° A Monetary Unit Sample was used with a 95% confidence level. For untimely resolved excessive 

contributions, the estimate is subject to a sampling error of $348,491. 
13 

contributions to the Senate election(s) also served to put the contributor on notice that 

BFP had presumed that the portion of the otherwise excessive Presidential primary 

election contribution was redesignated to the Presidential general election. The 

contributions to the Presidential primary election, however, were excessive until the 

Presidential general election to Senate election redesignation forms were sent. Given that 

these redesignation forms were sent much later than 60 days after the receipt of the 

excessive Presidential primary contributions, the Audit Staff maintained they were 

untimely as to the redesignations ftom the Presidential primary to the Presidential general 

election. 

At the exit conference, the Audit staff provided BFP representatives vsdth a schedule of 

the errors for the untimely resolved excessive contributions. A discussion ensued 

regarding the adequacy of letters used to support redesignations of contributions to the 

general election. 

On September 26,2008, BFP submitted its response to the matters presented at the exit 

conference. The response acknowledged that the imtimely redesignation issue arises 

from BFP's inability to provide presumptive redesignation letters. Although confident 

that such letters were timely sent, BFP staff were unable to locate the letters or evidence 

that they were sent and believe they were inadvertently lost when its location changed in 

the spring of 2008. BFP further explained the letter would have been prepared using a 

template on a BFP computer that was subsequentiy "vsdped clean" and sold when its 

assets were liquidated follovsdng the Candidate's vsdthdrawal from the presidential 

campaign. 

BFP offered the follovsdng circumstantial evidence to support that the letters had, in fact, 

been sent: 

• BFP submitted a complete library of "cure" letters, whether for excessive 

contributions or missing contributor information. In addition, its Contribution 

Review Procedures made reference to presumptive redesignation and/or 

reattribution letters and templates for obtaining redesignations and reattributions 

are provided. BFP files contained other compliance letters sent for problematic 

contributions and those requesting additional information. BFP noted that it is 

unlikely that it would send this array of compliance letters and omit presumptive 

redesignation and/or reattribution letters. 

• The individual primarily responsible for sending the compliance letters, including 

letters to resolve excessive contributions, had specific recollection that 

presumptive redesignation and/or reattribution letters had been sent. However, 

this individual is now deceased; tiierefore, BFP is unable to obtain a signed 

affidavit. BFP staff confirmed her recollections, and that she was meticulous and 

conscientious in performing her duties. 

• BFP has been contacting recipients of presumptive redesignation and/or 

reattribution letters and although some do recollect receiving such a letter, none 

have been able to fumish a copy. Should any be located, copies will be forwarded 

to the Audit staff. No copies have been provided. 
14 

• Finally, BFP concurred vsdth the Audit staffs position that those letters sent to 

redesignate contributions to Citizens for Biden serve to demonstrate that BFP did 

not fail to resolve a material number of excessive contributions. According to 

BFP, these letters reflected an understandmg by the contributor and BFP that the 

excessive portion had been properly resolved and expressed the donative intent of 

the contributor. 

The Audit staff did not believe that BFP's response was sufficient to document that 

presumptive redesignation and/or reattribution letters had been sent. 

Preliminary Audit Report Recommendation 

The Audit staff recommended BFP provide documentation demonstrating that excessive 

contributions ($1,092,899) were timely reattributed and/or redesignated. Such 

documentation was to include evidence that timely presumptive reattribution or 

redesignation letters were sent; copies of timely signed and dated 

reattribution/redesignation letters; or, any other documentation which indicated a timely 

reattribution and/or redesignation was obtained. BFP was invited to provide any other 

conunents it felt were relevant to this issue. 

Committee Response to Preliminary Audit Report 

In its response to the preliminary audit report, BFP provided information reiterating its 

earlier response to this issue. Declarations were submitted from four contributors who 

recalled receiving a presumptive redesignation notice from BFP. The response noted that 

none of these individuals retained a copy of the notice, because, unlike other "cure" 

letters, no action was required by the contributor unless he or she objected to the 

redesignation. In addition, a declaration was submitted from a BFP staff member who 

worked directly for the now deceased individual responsible for managing BFP's sending 

and retention of cure letters. His declaration stated that at the direction of his now 

deceased supervisor, he regularly sent presumptive designation letters to contributors 

who made primary election contributions in excess of $2,300. The response concluded 

by asking the Commission to accept its contention that presumptive designation letters 

had been sent. 

Committee Response to Draft Final Audit Report 

In response to the draft final audit report, BFP submitted a revised attestation from the 

staff member discussed above. His declaration now states that he personally "prepared 

and sent 'presumptive designation' notices to contributors who had contributed in 

aggregate more than $2,300" and that he would send those letters vsdthin 60 days of 

receipt of the contributions. 

Audit staffs Assessment of Committee Responses 

The response to the preliminary audit report reiterated points made in BFP's response to 

the exit conference and included declarations containing information similar to that 

provided in response to the exit conference. In response to the draft final audit report, the 

declaration was revised to address the staff member's personal knowledge and the 

timeliness of the presumptive letters. Though no direct evidence supporting these 
15 

declarations or establishing that the actions were timely was included as part of these 

responses, BFP did produce letters of redesignation to CFB, which the Audit Division 

staff considered adequate but untimely, and therefore, the staff did not recommend a 

payment to the U.S. Treasury. 

Commission Conclusion 

Given the Committee's unique circumstances in this matter; the circumstantial evidence 

presented by BFP, including a declaration from a BFP staffer who attested to sending 

redesignation notices within 60 days of receipt of an excessive contribution; declarations 

from contributors who recall receiving redesignation letters; and sample letters from 

BFP's forms library, the Commission concluded there was information to support BFP's 

assertions that it had sent presumptive redesignation letters for these contributions. BFP 

has not, however, satisfied the recordkeeping requirements of 11 CFR §110.1(l)(4)(ii) 

and (5). Nevertheless, because BFP was able to demonstrate that it obtained signed 

redesignations of the contributions to the senatorial campaign. Citizens for Biden, the 

Commission concluded that no payment to the U.S. Treasury for such redesignated 

contributions is required. The (Commission approved this finding. 

Finding 3. Prohibited In-Kind Contribution 

Summary 

The review of campaign travel suggested that one flight by BFP on a private aircraft that 

was reimbursed improperly using the lowest unrestricted and non-discounted first-class 

commercial airfare. Because the plane utilized was certified by the Federal Aviation 

Administration and operated in a manner that required its use be paid at a charter rate, the 

difference between what BFP paid and the charter rate resulted in the receipt of an inkind contribution of $26,889 from a corporation. In response to the preliminary audit 

report recommendation, BFP indicated that it would mgJce a payment to the U.S. Treasury 

after service of the final audit report. The Commission approved this finding. 

Legal standard 

A. Corporate Contributions Impermissible. A corporation is prohibited from making 

any contribution in coimection with a federal election. 2 U.S.C. §441b(a). 

B. Travel by airplane. Campaign use of an airplane licensed to operate for hire by the 

Federal Aviation Administration (FAA) under 14 CFR part 121,129, or 135 are govemed 

by tiie definition ofa contribution at 11 CFR §100.52(a) and (d). 11 CFR § 100.93(a)(2). 

C. Contribution defined. A gift, subscription, loan (except when made in accordance 

vsdth 11 CFR §§100.72 and 100.73), advance, or deposit of money or anything of value 

made by any person for the purpose of influencing any election for Federal office is a 

contribution. The term anything of value includes all in-kind contributions. 

The usual and normal charge for a service is the conunercially reasonable rate that one 

would expect to pay at the time the services were rendered. 
16 

The provision of services at a charge less than the usual and normal charge results in an 

in-kind contribution. The value of such a contribution is the difference between the usual 

and normal charge for the services and the amount the political conimittee was billed and 

paid. 11 CFR § 100.52(a) and (d). 

D. Contributions by a Limited Liability Company (LLC). An LLC not electing 

treatment as corporation under federal tax law or not having publicly-traded shares may 

make contributions to infiuence federal elections. Such a contribution will be considered 

as having been made by a partnership and govemed by the rules pertaining to 

partnerships. 11 CFR §110.1(b)(1) and (g)(2) and (4). 

Facts and Analysis 

BFP reimbursed GEH Air Transportation, LLC (GEH) $7,911 for first-class airfare for 

three people who made a roundtrip flight between New Hampshire and Iowa in June 

2007. This roundtrip flight was on a plane which was certifled for commercial service by 

the FAA under 14 CFR part 135 and documentation provided by BFP indicated the flight 

took place under this part; thus, it was not eligible for reimbursement at the first class 

rate. 

Payment for this flight should have been made at the charter rate which reflects the usual 

and normal charges for the services. Based on the charter rate and flight time noted on 

BFP's intemal documentation for tiiis trip, BFP should have paid $34,800 ($6,000 per 

hour charter rate x 5.8 hours). By failing to pay a charter rate, BFP received an in-kind 

contribution of $26,889 (tiie $34,800 owed less tiie $7,911 paid) from GEH. 

The entire amount represents a corporate contribution if GEH elected tax treatment as a 

corporation under Intemal Revenue Service rules. However, if GEH elected to be treated 

for tax purposes as a partnership, or if GEH did not elect treatment as a either a 

partnership or corporation, the contribution is considered to have been made by a 

partnership. The partnership would have made an excessive contribution in the amount 

of $24,589 ($26,889 - $2,300). 

Although documentation indicated that the flight was flovsm under 14 CFR part 135, the 

Audit staff provided BFP vsdth an opportunity to obtain additional documentation from 

GEH indicating that the flight was not flovsm under 14 CFR part 135 and, therefore, not 

subject to the charter rate. The required information had not been obtained at the time of 

the exit conference. 

At the exit conference, the Audit staff provided information regarding this item to BFP 

representatives. The representatives were requested to provide documentation 

demonstrating that BFP did not receive a prohibited contribution or make a payment to 

the U.S. Treasury. The representatives agreed to review the matter and respond 

accordingly. 
17 

On September 26,2008, BFP submitted its response. BFP representatives indicated that 

they agreed with the finding and would vsnite a check for $26,889 to the U.S. Treasury. 

Preliminary Audit Report Recommendation and Committee 

Response 

Although BFP's response to the exit conference indicated that it agreed vsdth the Audit 

staff analysis, the Audit staff recommended that BFP provide documentation from GEH 

which showed how GEH elected to be treated under Intemal Revenue Service rules. 

Also, if GEH was treated as a partnership for tax purposes, information should be 

provided shovsdng how the contribution should have been attributed to the various 

partners and that only those partners' profits are decreased or losses are increased as a 

result of the contribution. BFP was also offered the opportunity to produce 

documentation which: 

• Demonstrated a lower charter rate; 

• Established a different minimum flight time requirement; and/or 

• Proved that the plane was not certified for commercial service by 

the FAA at the time the flight occurred. 

Absent such a demonstration, the Audit staff recommended that BFP make a payment of 

$26,889 to the U.S. Treasury. In response to the preliminary audit report, BFP indicated 

that it would make a payment to the U.S. Treasury after service of the final audit report. 

Commission Conclusion 

The Commission approved this finding. 

Finding 4. Stale-Dated Checks 

Summary 

The Audit staff identified stale-dated checks totaling $137,757 issued by BFP. 

Subsequent to the exit conference, BFP made a payment to the U.S. Treasury for staledated checks in the amount of $8,457 resulting in an unresolved balance of $129,300. In 

response to the preliminary audit report recommendation, BFP provided documentation 

which resolved $43,400 in stale-dated checks, leaving $85,900 unresolved. BFP 

indicated that it would make a payment to the U.S. Treasury after service of tiie final 

audit report. The Commission approved this finding. 

Legal Standard 

Handling Stale-Dated (Uncashed) Cfaecks. If a conimittee has issued checks that the 

payees (creditors or contributors) have not cashed, the committee must notify the 

Commission of its efforts to locate the payees and encourage them to cash the 

outstanding checks. The conimittee must also submit a check payable to the U. S. 

Treasury for the total amount of the outstanding checks. 11 CFR §9038.6. 
18 

Facts and Analysis 

During our reconciliation of BFP's bank activity, the Audit staff identified 88 stale-dated 

checks totaling $137,757 dated between January 1,2007 and April 30,2008. 

The Audit staff provided a schedule ofthe stale-dated checks to BFP representatives at 

the exit conference. The representatives were requested to either provide evidence that 

the checks were not outstanding or make a payment to the U.S. Treasury for the amount 

of the stale-dated checks. They agreed to review the schedule and respond accordingly. 

Subsequent to the exit conference, BFP submitted a check for $8,457 to the U.S. Treasury 

for the stale-dated checks issued during 2007. The remaining stale-dated checks 

($129,300) were all refunds of contributions issued during 2008. BFP indicated that 

when it was able to determine the status of these refunds, a final payment would be made 

to the U.S. Treasury for the amount of those checks that had not cleared and for which an 

obligation still exists. 

Preliminary Audit Report Recommendation and Committee 

Response 

The Audit staff recommended that BFP provide evidence that: 

• The checks or reissued checks were not outstanding. Such evidence was to 

include copies of the front and back of the negotiated checks along vsdth bank 

statements; or 

• The outstanding checks had been voided by providing copies of the voided check 

with evidence that no obligation existed. 

Absent such evidence, the Audit staff recommended that BFP make a payment of 

$129,300 to tiie U.S. Treasury. 

In response to the preliminary audit report, BFP provided documentation supporting that 

stale-dated checks totaling $48,400 had been resolved, either by issuance of a 

replacement check (which had been negotiated), or by the contributor's authorization to 

transfer the funds to Citizens for Biden and/or Unite Our States' ^ BFP's response also 

indicated it would make an appropriate payment upon service of the final audit report. 

Audit Staffs Assessment of Committee Response 

The Audit staff verified that stale-dated checks totaling $43,400 had been resolved as 

follows: 

• $20,700was redesignated by contributors to Citizens for Biden; 

• $ 17,100 was redesignated by contributors to Unite Our States; 

• $5,600 was resolved through the issuance of a replacement check that was 

negotiated; and 

" Citizens for Biden was the Candidate's senatorial campaign and Unite Our States was the Candidate's 

leadership PAC. 

BFP submitted redesignation letters from contributors authorizing these transfers to CFB. However, 

based upon previous schedules provided by BFP, $11,900 of this amount did not appear to have been 

included in the actual transfer of funds. Therefore, $11,900 has been included on tiie Statement of Net 

Outstanding Campaign Obligations as a payable. 
19 

• $5,000 was disputed by the Audit staff. These checks were not included among 

the stale-dated checks that make up the $129,300. 

As a result, there remain unresolved stale-dated checks of $85,900 ($129,300 less 

$43,400). 

Commission Conclusion 

The Commission approved this finding. 

Finding 5. Disclosure of Disbursements 

Summary 

The Audit staffs review of disbursements suggested that 49 disbursements, totaling 

$3,779,976, were not adequately disclosed. Problems noted include incorrect or 

inadequate purpose as well as incorrect address. Subsequent to the exit conference, BFP 

filed amended reports that materially corrected the disclosure of these disbursements. 

BFP's response to the preliminary audit report provided no additional comments relevant 

to this matter. The Commission approved this finding. 

Legal Standard 

A. Reporting Operating Expenditures. When operating expenditures to the same 

person exceed $200 in an election cycle, the committee must report the: 

• Amount; 

• Date when the expenditures were made; 

• Name and address of the payee; and 

• Purpose (a brief description of why the disbursement was made—see below). 2 

U.S.C. §434(b)(5)(A) and 11 CFR §104.3(b)(4)(i). 

B. Examples of Purpose. 

• Adequate Descriptions. Examples of adequate descriptions of "purpose" include 

the follovsdng: dinner expenses, media, salary, polling, travel, party fees, phone 

banks, travel expenses, travel expense reimbursement, catering costs, loan 

repayment, or contribution refund. 11 CFR §104.3 (b)(4)(i)(A). 

• Inadequate Descriptions. The follovsdng descriptions do not meet the requirement 

for reporting "purpose": advance, election day expenses, other expenses, expense 

reimbursement, miscellaneous, outside services, get-out-the-vote, and voter 

registration. 11 CFR §104.3 (b)(4)(i)(A). 

Facts and Analysis 

The Audit staffs review of disbursements suggested that 49 disbursements, totaling 

$3,779,976, were not adequately disclosed. Approximately half of these disbursements 

were to BFP's media vendor and the purpose was incorrect or inadequate. The remaining 

disbursements were to the credit card vendor and vendor's address was incorrect. When 

questioned, BFP representatives responded that the person primarily responsible for data 

entry had been dismissed for poor data entry and reporting. 
20 

At the exit conference, BFP representatives were provided a schedule detailing these 

items. The representatives were requested to file amended Schedules B to correct the 

disclosure of these transactions. They agreed to comply vsdth the recommendation. 

Subsequent to the exit conference, BFP filed amended reports that materially corrected 

the disclosure of the disbursements noted above. 

Preliminary Audit Report Recommendation and Committee 

Response 

The Audit staff recommended that BFP provide any additional comments it felt were 

relevant to this matter. BFP provided no additional comments. 

Commission Conclusion 

The Commission approved this findmg. 

Finding 6. Reporting of Debts and Obligations 

Summary 

The Audit staffs review of BFP's debts suggested tiiat debt totaling $870,296 was not 

disclosed on Schedules D (Debts and Obligations) as required. Subsequent to the exit 

conference, BFP filed amended reports that materially corrected the disclosure of these 

debts. BFP's response to the preliminary audit report provided no additional comments 

relevant to this matter. The Commission approved this finding. 

Legal Standard 

A. Continuous Reporting Required. A political committee must disclose the amount 

and nature of outstanding debts and obligations until those debts are extinguished. 2 

U.S.C. §434(b)(8) and 11 CFR §§104.3(d) and 104.11(a). 

B. Separate Schedules. A political committee must file separate schedules for debts 

owed by the conimittee and debts owed to the committee, together with a statement 

explaiiung the circumstances and conditions under which each debt and obligation was 

incurred or extinguished. 11 CFR § 104.11 (a). 

C. Itemizing Debts and Obligations. 

• A debt of $500 or less must be reported on the next regularly scheduled report 

once it has been outstanding 60 days from the date incurred. 

• A debt exceeding $500 must be disclosed in the report that covers the date on 

which tiie debt was incurred. 11 CFR § 104.11 (b). 

Facts and Analysis 

The Audit staffs review of BFP's debts suggested tiiat debt totaling $870,296 was not 

disclosed on Schedules D. These debts consisted of nine transactions to two vendors, all 

of which were more than $500. The debts were typically incunred during the middle of 
21 

the month and paid in full the subsequent month. However, BFP did not disclose them as 

debts in the report covering the date on which the debt was incurred. 

At the exit conference, BFP representatives were provided a schedule detailing these 

items. The representatives were requested to amend the reports to correct the disclosure 

of these transactions. They agreed to comply with the recommendation. 

Subsequent to the exit conference, BFP filed amended reports that materially corrected 

the disclosure of the debts noted above. 

Preliminary Audit Report Recommendation and Committee 

Response 

The Audit staff recommended that BFP provide any additional comments it felt were 

relevant to this matter. BFP provided no additional comments. 

Commission Conclusion 

The Commission approved this finding.