FEDERAL ELECTION COMMISSION 

WASHINGTON, D.C. 20463 

May 12,2009 

MEMORANDUM 

To: Judith Ingram 

Press Officer 

From: Joseph F. Stoltz 

Assistant Staff 

Audit Division 

Subject: Public Issuance of the Audit Report on Hunter for President, Inc. 

Attached please find a copy of the audit report on Hunter for President, Inc., which was 

approved by the Commission on April 30, 2009. 

All parties involved have received informational copies of the report and the report may be 

released to the public May 12,2009. 

Attachment as stated 

cc:	 Office of General Counsel 

Office of Public Disclosure 

Reports Analysis Division 

FEC Library 

lTD Web 
Why the Audit 

Was Done 

Federal law requires the 

Commission to audit 

every political committee 

established by a candidate 

who receives public funds 

for the primary 

campaign. I 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. 

26 U.S.c. §9038(a). 

Report of the Audit Division on 

Hunter for President, Inc. 

January 1, 2007 - March 31, 2008 

About the Campaign (p. 2) 

Hunter for President, Inc. is the principal campaign committee for 

Congressman Duncan Hunter, candidate for the Republican 

Party's nomination for the office of President of the United 

States. HFP is headquartered in La Mesa, California. For more 

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

Financial Activity (p. 2) 

•	 Receipts 

o	 Matching Funds Received $ 83,885 

o	 Contributions from Individuals 2,369,888 

o	 Contributions from Political 

Committees 77,273 

o	 Loans Received 130,000 

o	 Offsets to Operating 

Expenditures 12,936 

o	 Total Receipts $ 2,673,982 

•	 Disbursements 

o Operating Expenditures	 $ 2,529,502 

o Loan Repayments	 79,915 

o Contribution Refunds	 26,825 

o Other Disbursements	 2,000 

o Total Disbursements	 $ 2,638,242 

Finding and Recommendation (p. 5) 

•	 Net Outstanding Campaign Obligations 

I 
Table of Contents 

Page 

Part I. Background
 

Authority for Audit 1
 

Scope of Audit 1
 

Inventory of Campaign Records 1
 

Part II. Overview of Campaign
 

Campaign Organization 2
 

Overview of Financial Activity 3
 

Part III. Summaries
 

Finding and Recommendation 4
 

Amounts Owed to the U.S. Treasury 4
 

Part IV. Finding and Recommendation 

Net Outstanding Campaign Obligations 5
 
1 

Part I 

Background 

Authority for Audit 

This report is based on an audit of Hunter for President, Inc. (HFP), undertaken by the 

Audit Division of the Federal Election Commission (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 authorized 

committees who received [matching] payments under section 9037." Also, Section 

9039(b) of the United States Code and Section 9038.1(a)(2) of the 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. HFP records were materially complete and the fieldwork began 

immediately. 
2 

Part II 

Overview of Campaign 

Campaign Organization 

Important Dates Hunter for President, Inc. 

• Date of Registration January 23, 2007 2 

• Eligibility Period j December 19,2007 - January 19,2008 

• Audit Coverage January 1, 2007 - March 31, 2008 4 

Headquarters La Mesa, CA 

Bank Information 

• Bank Depositories Three 

• Bank Accounts Six Checking Accounts 

Treasurer 

• Treasurer When Audit Was Conducted Bruce Young 

• Treasurer During Period Covered by Audit Bruce Young 

Management Information 

• Attended FEC Campaign Finance Seminar Yes 

• Used Commonly Available Campaign 

Management Software Package 

Yes 

•	 Who Handled Accounting, Recordkeeping Paid Staff and Volunteers 

Tasks and Other Day-to-Day Operations 

2	 A Hunter exploratory committee registered with the Commission on January 12,2007. HFP registered on January 

23,2007. 

3	 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 from the campaign. See 

11 CFR §9033. 

4	 Limited reviews of receipts and expenditures were performed after March 31, 2008, to determine whether the 

candidate was eligible to receive additional matching funds. 
3 

Overview of Financial Activity
 

(Audited Amounts)
 

Cash on hand @ January 1, 2007 $0 

0 Matching Funds Received 

0 Contributions from Individuals 

0 Contributions from Political Committees 

0 Loans Received 

0 Offsets to Operating Expenditures 

Total Receipts 

83,885 ) 

2,369,888b 

77,273 

130,000 

12,936 

$ 2,673,982 

0 Operating Expenditures 

0 Loan Repayments 

0 Contribution Refunds 

0 Other Disbursements 

Total Disbursements 

2,529,502 

79,915 

26,825 

2,000 

$ 2,638,242 

Cash on hand @ March 31,2008 $ 35,740 

5 As of January 31, 2009, HFP received total matching funds of $453,527; representing 2% of the maximum 

entitlement ($21,025,000). 

6 Approximately 34,000 contributions from more than 22,000 individuals, 
4 

Part III 

Summaries 

Finding and Recommendation 

Net Outstanding Campaign Obligations 

The Audit staff's review of HFP's financial activity through January 31,2009, and 

estimated winding down costs indicates that the candidate did not recei ve matching fund 

payments in excess of his entitlement. (For more detail, see p. 5) 

Amounts Owed to the U.S. Treasury 

At this time, there are no amounts owed to the U.S. Treasury. 
5 

Part IV 

Finding and Recommendation 

INet Outstanding Campaign Obligations 

Summary 

The Audit staff's review ofHFP's financial activity through January 31, 2009, and 

estimated winding down costs indicates that the candidate did not receive matching fund 

payments in excess of his entitlement. 

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-down costs. 11 CPR §9034.5(a). 

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

occur first: 

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

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

recei ves less than 10 percent of the 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 

the calendar year. 11 CPR §§9032.6 and 9033.5. 

C. Qualified Campaign Expense. Each of the following expenses is-a qualified 

campaign expense. 

•	 An expense that is: 

o	 Incurred by or on behalf of the candidate (or his or her campaign) during the 

period beginning on the day the individual becomes a candidate and 

continuing through the last day of the candidate's eligibility under 11 CPR 

§9033.5; 

o	 Made in connection with the candidate's campaign for nomination; and 

o	 Not incurred or paid in violation of any federal law or the law of the state 

where the expense was incurred or paid. 11 CPR §9032.9. 

•	 An expense incurred for the purpose of determining whether an individual should 

become a candidate, if that individual subsequently becomes a candidate, 

regardless of when that expense is paid. 11 CPR §9034.4. 
6 

•	 An expense associated with winding down the campaign and terminating political 

activity. 11 CPR §9034.4(a)(3). 

D. Value of Capital Assets. The fair market value of capital assets is 60% of the total 

original cost of the assets when acquired, except that assets that are received after the date 

of ineligibility must be valued at their fair market value on the date received. A 

candidate may claim a lower fair market value for a capital asset by listing the asset on 

the NOCO statement separately and demonstrating, through documentation, the lower 

fair market value. 11 CPR §9034.5(c)(l). 

E. 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 CPR §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 CPR §9034.1(b). 

Facts and Analysis 

The Candidate's date of ineligibility (DOl) was January 19,2008. The Audit staff 

reviewed HFP's financial activity through January 31, 2009, analyzed estimated winding 

down costs and prepared the Statement of Net Outstanding Campaign Obligations that 

appears on the next page: 
7
 

Hunter for President, Inc.
 

Statement of Net Outstanding Campaign Obligations
 

As of January 19, 2008
 

Prepared Through January 31,2009
 

Assets 

Cash in Bank $152,497 

Accounts Receivable 38 

Capital Asset 1,235 

Total Assets 

Liabilities 

Accounts Payable for Qualified Campaign 

Expenses at January 19,2008 $262,258 

Winding Down Costs: 

Actual (l/20/08 - 1/31/09) $219,780 

Estimated (2/1/09 - 4/30/09) 29,291 249,071 [a] 

Loans Payable 130,000 

Total Liabilities 

Net Outstanding Campaign Obligations (Deficit) as of January 19, 2008 

[aJ Includes storage cost for a three year period. 

$153,770 

641,329 

($487,5592 
8 

Shown below are adjustments for funds received after January 19,2008, through January 

31,2009. 

Net Outstanding Campaign Obligations (Deficit) as of 1119/08 ($487,559) 

Private Contributions and Other Receipts Received 1120108 

through 7/25/08 

21,764 

Matching Funds Recei ved 1120108 through 7/25/08' 453,527 

Remaining Net Outstanding Campaign Obligations 

(Deficit) as of 1131109 

($12,268) 

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

entitlement. 

Preliminary Audit Report Recommendation and Committee 

Response 

The Audit staff recommended that HFP demonstrate an adjustment(s) is required to any 

component of the NaCO statement or provide any other comments it so desires. In 

response, the Treasurer stated that HFP accepts the finding and recommendation in the 

preliminary audit report. 

7 HFP has not received any matching fund payments subsequent to July 25,2008.