Part I
Background

Authority for Audit

This report is based on an audit of Wynn for Congress (WFC), undertaken by the Audit Division
of the Federal Election Commission (the Commission) in accordance with the Federal Election
Campaign Act of 1971, as amended (the Act). The Audit Division conducted the audit pursuant
to 2 U.S.C. §438(b), which permits the Commission to conduct audits and field investigations of
any political committee that is required to file a report under 2 U.S.C. §434. Prior to conducting
any audit under this subsection, the Commission must perform an internal review of reports filed
by selected committees to determine if the reports filed by a particular committee meet the
threshold requirements for substantial compliance with the Act. 2 U.S.C. §438(b).

Scope of Audit

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

The receipt of excessive contributions and loans.

The receipt of contributions from prohibited sources.

The disclosure of contributions received.

The consistency between reported figures and bank records.

The completeness of records.

Other committee operations necessary to the review.

AYVPYNS

Changes to the Law

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



letters were provided in the response; and WFC received 13 contributor responses to date.
Finally, WFC filed amended reports. However, contributor information received by 6
individuals (2 sample and 4 non-sample items) was not disclosed in the amended reports.
Therefore, it is the opinion of the staff that WFC has not fully complied with the
recommendation with regard to amending its reports to disclose contributor information

obtained.


Part III
Summary

Finding and Recommendation

Disclosure of Contributor Information

Contributions from individuals were reviewed on a sample basis. The review indicated that
WFC failed to disclose the contributor’s occupation and/or name of employer for 51% of the
contributions tested. There was no documentation to indicate that WFC used best efforts to
obtain this information. The Audit staff recommended that WFC contact the contributors,
submit evidence of such contact and file amended reports disclosing the information obtained.
In response WFC provided evidence that it made attempts to contact contributors, but the
amended reports filed failed to disclose all of the information obtained. (For more detail, see p.
4)


Part II
Overview of Campaign

Campaign Organization

Important Dates

Wynn for Congress

© Date of Registration

August 5, 1991

« Audit Coverage

January 1, 2001 - December 31, 2002

Headquarters

Capitol Heights, Md

Bank Information

e Bank Depositories 3

e Bank Accounts 3

Treasurer

e Treasurer When Audit Was Conducted Gregory Holloway
e Treasurer During Period Covered by Audit Gregory Holloway
Management Information

e Attended FEC Campaign Finance Seminar Yes

¢ Used Commonly Available Campaign Yes

Management Software Package

« Who Handled Accounting and
Recordkeeping Tasks

Paid Consultants

Overview of Financial Activity
(Audited Amounts)

Cash on hand @ January 1, 2001 $ 293,228
o From Individuals 203,915
o From Political Party Committees 5,440
o From Other Political Committees 407,648
o Other Receipts 21,709
Total Receipts $638,712
o Operating Expenditures & Other 681,658
Disbursements
Total Disbursements $681,658
Cash on hand @ December 31, 2002 $250,282



Preserving Documents. Committees must preserve these records for 3 years after a report is
filed. 2 U.S.C. §432(d).

Facts and Analysis

Contributions from individuals were reviewed on a sample basis. The review indicated that
WFC failed to disclose the contributor’s occupation and/or name of employer for 51% of
contributions tested. WFC conducted several fundraisers but few response devices from
contributors were evident. One response device observed by Audit staff requested all the
required information, except the contributor’s occupation.

WFC’s made available a draft (unaddressed) form letter that requested the contributor’s
occupation and/or name of employer. However, WFC did not provide evidence that any letters
were generated or sent to the contributors. In addition, several contributor check copies had a
contact information sheet attached, but there was no information recorded on these sheets that
indicated whether the contributor had been contacted. Finally, in some instances, WFC had
maintained the contributor information in its electronic files, but such information was not
disclosed on its reports. As a result, WFC has not demonstrated best efforts to obtain, maintain
and submit the required contributor information.

This matter and a detailed explanation of best efforts requirements were discussed at the exit
conference. The WFC representative had general questions regarding the solicitation cards and
asked whether they should be kept. The Audit staff referred to regulations at 11 CFR §102.9(c)
which requires the treasurer to keep records for three years.

Interim Audit Report Recommendation
The Audit staff recommended that WFC:

e Provide documentation such as the initial solicitation devices, phone logs, returned
contributor letters, completed contributor contact information sheets or other
materials which demonstrate that best efforts were used to obtain, maintain, and
submit the required disclosure information; or

e Absent such a demonstration, make an effort to contact those individuals for which
required information is missing or incomplete; and

e Provide documentation of such contacts, such as copies of letters to the contributors
and/or phone logs; and

« File complete amended electronic reports to disclose any information obtained from
those contacts.

Committee Response to Recommendation and Audit Staff’s Assessment
In response to the recommendation, WFC outlined its efforts to obtain, maintain and submit
missing contributor information. According to its representative, a listing was generated,
consisting of 130 contributors, whose occupation and/or name of employer was missing from
their database; letters were sent to each contributor requesting such information; copies of these



FEDERAL ELECTION COMMISSION

WASHINGTON, D.C 20463

November 7, 2003

MEMORANDUM

TO: RON M. HARRIS
PRESS OFFICER
PRESS OFFICE

FROM: JOSEPH F. STOLTZ
ASSISTANT STAFF CTOR
AUDIT DIVISION

SUBJECT: PUBLIC ISSUANCE OF THE AUDIT REPORT ON WYNN FOR
CONGRESS
Attached please find a copy of the audit report on Wynn for Congress, which was

approved by the Commission on October 28, 2003.

The report may be released to the public on November 7, 2003.

Attachment as stated

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


Part IV
Finding and Recommendation

| Disclosure of Contributor Information

Summary

Contributions from individuals were reviewed on a sample basis. The review indicated that
WFC failed to disclose the contributor’s occupation and/or name of employer for 51% of the
contributions tested. There was no documentation to indicate that WFC used best efforts to
obtain this information. The Audit staff recommended that WFC contact the contributors,
submit evidence of such contact and file amended reports disclosing the information obtained.
In response WFC provided evidence that it made attempts to contact contributors, but the
amended reports filed failed to disclose all of the information obtained.

Legal Standard
Required Information for Contributions from Individuals. For each itemized contribution
from an individual, the committee must provide the following information:

e The contributor’s full name and address (including zip code);
The contributor’s occupation and the name of his or her employer;
The date of receipt (the date the committee received the contribution);
The amount of the contribution; and
The election-to-date (or election cycle-to-date in the case of authorized candidate
committees) total of all contributions from the same individual. 11 CFR §§100.12 and
104.3(a)(4) and 2 U.S.C. §434(b)(3)(A).

Best Efforts Ensures Compliance. When the treasurer of a political committee shows that the
committee used best efforts (see below) to obtain, maintain, and submit the information required
by the Act, the committee’s reports and records will be considered in compliance with the Act.
2 U.S.C. §432(h)(2)(i).

Definition of Best Efforts. The treasurer and the committee will be considered to have used
“best efforts” if the committee satisfied all of the following criteria:
e All written solicitations for contributions included:
o Aclear request for the contributor's full name, mailing address, occupation, and
name of employer; and
©. The statement that such reporting is required by Federal law.
¢ Within 30 days after the receipt of the contribution, the treasurer made at least one effort
to obtain the missing information, in either a written request or a documented oral
request.
¢ The treasurer reported any contributor information that, although not initially provided by
the contributor, was obtained in a follow-up communication or was contained in the
committee’s records or in prior reports that the committee filed during the same two-year
election cycle. 11 CFR §104.7(b).


Table of Contents

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

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

Part III. Summary

Finding and Recommendation

Part IV. Finding and Recommendation
Disclosure of Contributor Information

Page


Report of the
Audit Division on
Wynn for Congress

January 1, 2001 - December 31, 2002



Report of the
Audit Division on

Wynn for Congress
January 1, 2001 - December 31, 2002

Why the Audit

Was Done

Federal law permits the
Commission to conduct
audits and field
investigations of any
political committee that
is required to file reports
under the Federal
Election Campaign Act
(the Act). The
Commission generally
conducts such audits
when a committee
appears not to have met
the threshold
requirements for
substantial compliance
with the Act.' The audit
determines whether the
committee complied
with the limitations,
prohibitions and
disclosure requirements
of the Act.

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

' 2US.C. §438(b).

About the Committee (p. 2)

Wynn for Congress is the principal campaign committee of
Albert R. Wynn, Democratic candidate for the U.S. House of
Representatives from the state of Maryland, 4th Congressional
District and is headquartered in Capitol Heights, Maryland.
For more information, see chart on the Campaign Organization,

p. 2.

Financial Activity (p. 2)

Receipts

o From Individuals $ 203,915
o From Political Party Committees 5,440
o From Other Political Committees 407,648
o Other Receipts 21,709
o Total Receipts $ 638,712

e Disbursements
o Operating Expenditures & Other $ 681,658
Disbursements
o Total Disbursements $ 681,658

Finding and Recommendation (p. 3)

¢ Disclosure of Contributor Information