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REPORT or THE AUDIT DIVISION

.ON THE

ALAN KEYES FOR PRESIDENT '96,

INC•

ALAN KEYES CO E

AND OTHER AUTHORIZED --

COMMITTEES

Approved Juaa.., 15, 1998

PEDERAL ELEC110N COMMISSION

'"E STREET, N.W.

WASHINGTON, D.C.
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bREPORT OF THE AUDIT DIVISION

ON THE

ALAN KEYES FOR PRESIDENT '96,

INC•

ALAN KEYES COMMITTEE

AND OTHER AUTHORIZED

COMMITTEES

Approved Ja••a.,. 15, 1998

FEDERAL ELECI10N COMMISSION

. 999ESTREET,N.W.

WASHINGTON, D.C.
FEDERAL ELECTION COMMISSION

\\ ,tU~G10' U ( !C~fd

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January 1S, 1998

MEMORANDUM

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TO:

FROM:

SUBJECT:

RON M. HARRIS

PRESS OFFICER

PRESS OFFICE

ROBERT J. COSTA ~L/ ASSISTANT STAFF DIRECTOR

AUDIT DIVISION

PUBLIC ISSUANCE OF THE REPORT OF THE AUDIT DIVISION ON

ALAN KEYES FOR PRESIDENT 696. INC.; ALAN KEYES

COMMllTEE AND OTHER AUTHORIZED COMMllTEES

Attached please find a copy ofthe repon and related documents on Alan Keyes For

President ·96. Inc.; Alan Keyes Comminee and other Authorized Comminees which was

approved by the Commission on January IS. 1998.

Informational copies ofthe report have been received by all parties involved and

the report may be released to the public.

Attachment as stated

cc: Office ofGeneral Counsel

Office ofPublic Disclosure

Reports Analysis Division

FEC Library
·'

TABLE OF CONTENTS

ALAN KEYES FOR P~IDENT 696, INC.

ALAN KEYES COMMl1TEE

q AND OTHER AUTHORIZED COMMllTEES I'

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2 Executive Summary I 5

.. Final Audit Report 3 1

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2 Background 3

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FindiDp 8

LepI ADalysis 29

Transmittal to Committee 35

Transmittal to Candidate 37

CbronoIOl)' 39
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FEDERAL ELECTION COMMISSION

WASHINeTON. 0 C 204bJ

REPORT or TIlE AUDIT DIVISION

ON

ALAN KEYES FOR PRESIDENT '96, INC.

ALAN KEYES COMMl1TEE

AND OTHER AVTIIORIZED COMMl1TEES

EXECUTIVE SUMMARY

Alan Keyes for President 696, Inc. (the Primary Committee) registered with the Federal

Election Commission on May 26, 1995. In IdditioD, the Alan Keyes Committee (the

Exploratory Committee) registered with the Commission on October 24, 1994. Finally, there

were 20 other committees which wen: authorized by the Candidate. With the exception ofthe

Primary Committee. all committees have been terminated.

The audit was conducted pursuant to 26 U.S.C. §9038(a) which requires the

Commission to audit committeesthat receive matching funds. The Candidate received

52,145,766 in matching funds.

The findings ofthe audit were presented to representatives ofthe Primary Committee at

a conference held at the end offieldwork and were addressed in the Exit Conference

Memorandum presented on September 30. 1997. The Committees' responses to those findings

are contained in the audit report. The following is an overview ofthe findings.contained in the

audit report. .

M'SSL\TEMENT OfF'NANOA', AaMTy - 2 U.S.C. §§434(bXI), (2) and (4). Both, the

Primary Committee and the Exploratory Committee misstated fmancial activity on disclosure

repons filed during 1995. Additionally, two authorized committees misstated financial activity

on disclosure reports filed during 1996. The Committees filed adequate amended disclosure

reports.

ITEMIZATION Of D'SIUIWEMENJ'$ - 2 U.S.C. §434(bX5XA). The Primary Committee and

the Exploratory Committee failed to itemi2:e disbursements totaling 549.446 and 585.453,

respectively. Both Committees have filed amended reports disclosing these disbursements.

D,somuuorO<xtJrAnoNINAMI OfEMrLtlYEI - 2 U.S.C. §§434(b)(3) and 431(13)(A).

Exploratory Committee reporlS iDldequately disclosed occupation and name ofemployer for

contributions from individualstotalina $73.666_ in addition. it was also found not to have

demonstrated best efforts to obtain. maintain and disclose this infonnation. The Primary

Committee submiued documentation ofits effonsto obtain the needed infonnation and filed

the necessary amended reports.

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'AUlIB'm 'licE D,saDSUBE Rt;PQBTS - 2 U.S.C. §§432(e) aDd (t). During 1996, three

authorized committees did not file disclosure reports as required. In additiOD, a fourth

committee never registeJed with the Commission and never filed any disclosure reports for

1995. The Primary Committee filed a statement oforganization aDd the requisite disclosure

reports for these other authorized committees.

Bla.nOf ANONDtOIISC""CONTB'Im1ONSIN ExaSS OfTHE LIMITADON 2 U.S.C.

1441g and 11 CFR §110.4(cX3). The review ofcontributions from individuals received by the

Exploratory Committee identified excessive, anonymous cash contributions which totaled

SIO,435. As permitted UDder 11 CPR §IIO.4(cX3), the Primary Committee donated the

excessive, anonymous cash contributionsto anon-profit orpni7Jlfion.

UNRESOLVED rROHll1DpCONTI"lmQNS- 2 U.S.C. 144Jb(a). Testing oftile Primary

Committee's contributions initially indicated that it bad received a number ofprohibited

contributions. However, the Primary Committee provided documentation establishing that it

had not received a material amount ofcorporate contributions.

UNIWiQLYEA EXCESSIVE CONTplllmQNS- 2 U.S.C. 144Ia(aXIXA). Reviews of

contributions from individuals received by the Primary and Exploratol)' Committees identified

unresolved. excessive contributionstotaling 569.271. The Primary Committee provided

documentation resolving one S4,OOO contribution and submitted a payment of565,271to the

U.S. Treasury.

DETERMINADON OfNaOIJDTANQINC CAMPAIGN OI'JGADONS - II CFR §§9034.5(8)

and 9034.I(b). A Statement ofNet Outstanding Campaign Obliptions was prepared based on

a review ofthe Primary Committee'l fmancial activity through September 30•.1997, to include

an analysis ofallowable windina down costs. It was determined that the Primary Committee .

had not received matching funds in excess ofits entidement

NON-QUA' 'OED CAMPAIGN EXPENSU - UNDOOIMENTED- II CFR 1§9032.9(8),

9033.1 I(b) and 9038.2(bX3). Disbursementstotaling S94,469 were identified which lacked

adequate supportina documentation. or for which no canceled check or other payment device

was maintained. The Primary Committee provided sufficient docwnentation for disbursements

totaling 525,141 and made a pro rata repayment. to the U.S. Treasury in the amount 0(58,728

for the remainina non-qualified campaign expenses.

$TAltE-PATEA CoMMJUEE CHECKS - 11 CFR §9038.6. The Primary Committee paid the

U.S. Treasury SIO,737 for unnqotiated. stale-dated checks that had been issued by the

Exploratory Committee.

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REPORTOF THE AUDITDIVISION

ON

ALANKEYES FOR PRESIDENT '96, INC.

ALANKEYES COMMITTEE

AND OTHER AUTHORIZED COMMITTEES'

BACKGROUND

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A. AUDIT Al1THORln'

This repon is based on an audit ofAlan Keyes for President -96. Inc:. r'the

Primary Comminee") the Alan Keyes Comminee ("the Exploratory Comminee·') and

other authorized cornminees. The audit is mandated by Section 9038(8) ofTille 26 ofthe

United States Code. That section Slates that "After each matching payment period. the

Commission shall conduct a thorough examination and audit ofthe qualified campaign

expenses ofe\'er')' candidate and his authorized comminees who received payments under

section 9037." Also, Section 9039(b) ofTitle 26 ofthe United States Code and Section

9038.I(a)(2) ofthe Commission's Regulations state that the Commission may conduct

other examinations and audits from time to time as it deems necessary. .

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

seeks to detennine ifthe campaign has materiall)' complied with the limitations,

prohibitions. and disclosure requirements of L~ Federal Election Campaign Act of 1971

('-FECA") as amended.

The audit ofthe Pri~· Comminee covered the period from its inception

on Mal 26. 1995. through September 30. 1996. The Pri~' Comminee reponed an

opening cash balance ofS.().; total receipts of$4.141.8702

; total disbursements of

In addition 10 the Aa. Keyes Commmec Iftd AIM Keyes for President ·96. Inc.• there were 20

0IMr commiaees which .....ed aslUlhonzed comml1lecs Anachmcnt I is. list orthose

commmces.

2 All fiJum in Ibis "PO" have been rounded 10 Ihc nama dollar.

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54.094,276; and. closing cash balance of547,603.3 In addition, a limited review of

ldivity was conducted (or the period October 1. J996 through September JO. 1997. for

the purpose o(determining the Primary Committee's remaining matching fund

entitlement based on its fananciaJ position.

The audit ofthe Exploratory Committee covered the period from its

inception. October 24, J994. duouah August 7. 1995. The Exploratory Comminee

reponed an opening cash balance of5-0-; lOW receipts 0(S29O.350; total disbursements

ofS252.)44; and a closing cash balance ofS38.006 (or the period October 24. 1994

duough June 30. 1995.'

Tbc audits ofthe other aulhorized comminees covered the period ofeach

committee'5 inception duough the date ofthe clOSlft ofits bank account or termination.

As a poup. these authorized commiaees reponed opening cash balances of S-O-: total

receipts of 5122.574. total disbursements ofSI21.oo5. and a closing cash balance of

SI.569.'

C. CAI'IPAJCN ORCANIZATIO~

I. Primm Commincc

The Primary Comminec maintained its headquaners in Atlanta.

Georgia until July 14. 1995. On July IS. 1995. the Primar')' Committee relocated to

Alexandria. Virainia until January. 1996. Durin, JanWU')·. 1996. the Primar)' Committee

relocated 10 SI. Paul. Minnesota \\iIefe it is currend)·located.

The Primary Comminee rqisacml "ilb the Federal Election

Commission on Ma)' 26.1995. The Trasurcr ofthc Primar')' Committee (rom its

inception has been William G. Spie,el.

J 11Ic repalled Klmcy doa noc fOOl due 10 • ddcrepInc)' • any.,1be cndan. cash on hand

baIMceoraM period 10 die.......repon·s..,....., cash on bMd balance.

nc Explorllorye-...·sJut) Rcpon dtsclosed. clos•• balanec orS31.006 on

June JO. 1995. No _.,...reporu -ere reW (1ft F....III.A) las only bank Kcount "'as

closed .. A...... 7. I"'. nIl c.....IIIft••,.....)·lCnfttUlCd on Nowmbcr 24. 1M'.

11ais ....alii a.IInce ............die NCOIICil....' of&he authonzed

comm-.n -ere conapIacd T••ofaa.nc~ Kcounaed for die SI.569 clos.n, cash

baIMce; dw AIM Ktya ,.Prne*M ...,.,.TCUI OfI".cc 1IIIOUftI. SI49 (sec Flnd.ne

III.D.) atlite Kqa C In 11.420 (1ft F....IIJ.A.). Tbcsc

conunillla 1)' ICIIII NM_~rr s. 1997. Md die cash baJInca were SO.

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To bandle its financial activity. the Primary Committee utilized a

total ofthineen bank accounts. Approximately 89,900 contributions totaling 53.741,000

were received. From these acccunts the campaign made approximately 2.600

disbursements.

In addition 10 contributions. the Primary Committee recei\'ed

$2.145,766 in matching funds from the United States Treasury. This amount represented

about 14% ofthe SI5.455,000 llUlXimum entitlement that any candidate could receive.

. Alan Keyes was determined eligible to receive matching funds on Febnaar)· 13, 1996..

The Primary Comminee made • total ofeleven matching fund requests lotalinl

52.473.035. The Commission ccnified 86.rAt ofthe requested amount. For matching

fund purposes. the Commission detennined dial Alan Keyes candidacy ended March 25.

1996. This determination ,,-as baed 01. the Commission's rqulation at II CFR

§9033.S(b) which states. in pan. that the Cmdidate's date ofineligibility shall be the 30th

cia)· follo,,;n8 the date ofthe second consecutive primary election in "'hich such

indi\'idual receives less than 10% ofthe number ofpopular \'aleS cast (or all candidates of

the same part). for the same office in that prillW)· election. However. the Candidate

continued to campail" until the Republican Part)· nominated its candidate on August 14.

1996. As such. cenain "indina do"'ft and continuing campaiJll expenses "'ere excluded

,,-hen determining the PriIlW)· Committcc·s remaining matching fund entitlement as

pro\·ided b)" II CFR §9034.4(aX3) (see Findina IV.B.).

lbc ExplgmtOO' Cgmmjncc

The Explorato.,· Committee l'CIistered "ith the Federal Election

Commission on October 24. 1994. The Trasurcrofthe ExploralOl)· Committee from its

inception throulth June 23, 1995 WIS John Wilson Wriaht. He ""as succeCded by Elyria .

L. Mackie. "ito sen-cd until he resipcd on September l. 1995. By this time. active

cxploratol')' operations had ccued. The PriIlW)' Committee began operations in Ma)'

1995. No Treasurer ,,-as desilnated 10 replace t.tr. Mackie. The Exploratory Committee

filed a fomal termination repon "ith the Commission on No_ber 24. 1997.

The Exploratol')' Comminee used one bank account.

Approximatel)' 3.380 contributions IOtaJin. S317.649 and other receipts totaling 57.687

were n:cei\·ed. From this accounL the Exploratol')' Committee made approximate')' 390

disbursements thallOIalcd S325.336. The account ".. closed on August 7, 1995.

3. 011," Aytbprized Cgmmillm

There ,,-ere 20 other committees "ilich operated as authorized

committees. All ofthese coauninees. "ilb the exception ofthe Alan Keyes for President

-96· Kansas Committee. rqislcn:d v.ith the FccIeraJ Election Commission. All were

ronnall~' authorized b)' Alan "C)·cs. ThcK authorized comminecs had receipts totalinG

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approximately SI~600. ofwhich $94.225 was n:ceived in the form oftransfers from the

Primary Committee. From their accounts. the other authorized committees made about

260 disbursements totaling approximately $122.600. including S5.120 transfmed to the

Primary Committee. Termination repons have been filed for all other authorized

committees.

II. AUDIT SCOPE AND PROCEDURES

In addition to reviews ofeach committees' expenditures to detennine the qualified

and non-quaJified campaign expenses incum:d b)· the Campaign. the audit ofeach

G committee covered the follo"ing general categories: I

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The receip' ofcontributions from prohibited sources, such as those from

corporations or labor orpnizations (Finding III.F.);

the receipt ofcontributions or loans in excess ofthe statuto!")' limitations

(Findings IV.A. and III.E.);

proper disclosure ofcontributions from individuals. political committees

and other entities. to include the itemization ofcontributions when

required. as "'ell as the completeness and accuraC}· ofthe infonnation

disclosed (Findinglll.C.);

4. proper disclosure ofdisbursements including the itemization of

disbursements "-hen required. as "-ell as the completeness and accurac)' of

the infonnation disclosed (Findinalll.B.);

5. proper disclosure of Campai~ndebts and obligations:

6. the accurK)· oftotal reponed receipts. disbursements and cash balances as

compared to Campailn bank n:cords (Findinls UI.A. and 111.0.);

7. adequate recordkecpin~ for (·ampilil:!n transactions (Finding IV.C.);

8. accuracy ofthe Statement ofNcl OUlSW1din~ Campaign Obligations filed

by Alan Keyes (or President '96. Inc. (the Pri~' Committee) to disclose

its financial condition and estIblish continuing matching fund entitlement

(FindinaIV.8.);

9. the Committee's complaancc ,-"th spmdin,; limitations; and.

10. other audit procedures that ""a'C cIccrned necessaJ)' in the situation

(Findinl: IV.D.).

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As part ofthe Commission·5 standard audit process. an inventory ofcampaign

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

detennine ifthe auditee·srecords are materiall}' complete and in an auditable state.

Based on our review ofrecords presented. it was concluded that the records "'ere not

complete. Among the records missing were bank Slatements; debit and credit

memoranda; copies ofdeposited items; deposit tickets; canceled checks. and \'endor

invoices. Campaign representatives \\-ere presented with wrinen lists detailing these

missing records on August 30. 1996. and granted 30 days to provide the missing records.

At the end ofthat time it was judged that records were sufficientl)· complete to begin

fieldwork. Additional records were pro\ided as the audit process continued,

In addition. the Audit staffnotes that II CFR §9033.1 requires committees that

maintain records in a computerized (onnat to provide elecuonic copies ofthose records in

a fonnat published by the Commission. Among other records. the Primal)' Committee

maintained contribution infonnation in a computerized file. Several attempts "'ere made

to produce a useable file. The file that \\-as eventuall)' pro\'ided \\-as replete "·ith

duplicate entries and did not contain information for all Primary Committee

contributions.

The Audit stafffirst requested a computer file containing Primary Committee

receipt information b)' letter dated March ~8. 1996. This letter included guidelines and

specifications for production ofsuch a file, As p3I1 ofthis process. the Audit staffmet

\\'ith representati\·cs ofthe compan)' \\·hich pro\'ided the computer soft,,'are used by the

Prim3l")' Committee for maintaining its receipt information, In addition. the Audit stafT

discussed and pro\'ided the Primary Committcc·s computerspecialist and computer

soft\\"aI'e \'endor \\;th a format for production ofthe computer file that ,,-as tailored to the

PrimaJ)' Committee·s 5Oft"W'C. .

The audit notification lener. dated Jul~· 26. 1996. a(!ain requested a computer file

for receipts. \\'hich had not yet been pro\·idcd. On Jul~· 29. 1996. the Audit staffreceived

a magnetic tape from the 5Oft\\~ \'endor containing the PrimaJ)' Committec·s

contribution file. Ho\\'e\·ef. it \\-as neitht:r usable nor complete.

Upon completion ofthe in\'entuf)' phase ofthe audit. August :!8. 1996. the

PrimaJ')' Committee \\715 again requested to pro\'idc the required receipts file, In October.

1996. the PrimaJ)' Committee produced another receipts file. The Audit staffdetennined

that this file did not contain approximately S1million in receipts. and also contained

duplicate entries.' Primary Committee rcpresentati\ocs ad\'ised the Audit staffthat a file.

maintained separately for matching funds. of approximatel~'S1.1 million. had not been

included, Rick Freimuth. the Prirnar,.' Committee·s audit consultant. ackno",·ledged that

duplicate entries ,,-ere on the receipts file. In a memorandum. he: indiQted it "'ilS the

• Sued on • companson of &he dale. amounl. balch. and or cheel. num~ for coniribulions from

the same andlvidual. or from I spoulC. n -as appamat thai some contributions had been entered

twICe onto the rcceapcs file.

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result ofhaving many data entry operations around the country which "were not

following a standard9 disciplined methodology... The Phoenix data consolidation

operation attempted to correct this9 but was not completely successful.99

Between December. 1996 and January9 19979the Primary Committee provided

several updated versions ofthe previously submined receipts file. The Audit staff

determined that. based on a preliminar)t reconciliation. the version received on JanWlJ)' 9.

1997 appeared to contain most ofthe previously missing receipt infonnation. However.

it was also evident that the file still contained duplicate entries. \\'hich in man)' cases.

could be easily identified. These omissions and duplications limited some audit

procedures relative to receipts. such as testing for excessive contributions,

The Audit staff used its statistical sample review ofreceipts to estimate the dollar

value ofthe duplicate entries. This in tum \\115 used to estimate the dollar value ofthe

non-duplicate contributions in the file. Using our bank reconciliations and PrimaJ)'

Comminee reponed information. the Audit Slaffdetennined that the receipt file should

have contained contributions totaling about $3.164.000. Based on the results ofthe

sample. the tape \\'as estimated to contain accurate information "'ith respect to

contributions totaling about S3.034.ooo. It ,,-asthis file that was used as the basis ofour

contribution testing.

Unless specificall)' discussed belo,,'. no material non-compliance was detected. It

should be noted that the Commission ma~' pursue funher an)' ofthe matters discussed in

this memorandum in an enforcement action.

III. Al'DIT FINDINGS AND RECOMMENDATIONS; NON .REPA\'MENT

MAnERS

A. ,.tISSTATE~IE~1 OF F""~CIAL ACI'\'ln'

Section 434(a) ofTitJc ofthe United Stales Code stales. in relevant pan.

that each treasurer of a political committee shall file repons ofreceipts and

disbursements.

Sections 434(b)(I). (2) and (4) ofTitle 2 ofthe United States Code stale.

in relevant pan. that each repon shall disclose the amount of cash on hand at the

beginning ofthe reponing period. the: 101:11 amount oftill receipts and the total amount of

aU disbursements for the reponing period and calendar )·e:u.

I. The PDmoo' Commjllcc

The Audit statTs reconciliation ofthe Primary Committee·s

reponed financial acti\'it)· to its bank actl\'it~, (or the period from its inception on Ma)' 30.

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1995 to December 31, 1995, revealed a material misstatement ofits reported

disbursements as well as its reponed ending cash on hand.

The Primary Committee reponed total disbursements of

S1.356,448 for 1995. The Audit staffdetennined that 51.378,446 in disbursements

should have been reported. Therefore. disbursements were understated by 521.998.

Based on our analysis, it appears that the Wlderstatement is the net result of

disbursements amounting to 524.215 not being reponed and the overstating ofreponed

.disbursements by S2.217.

The Primary Committee's reponed ending cash on hand of

549.122 as ofDecember 31. 1995 was overstated b)' SI6,926. The correct ending cash on

hand was 532,195. This overstatement \\'IS caused b)' the understatement of521.998 in

disbursements noted above: S1,046 in receipts that were not reponed: and a $4.026

unexplained difference in receipts.

2. The ExplOmtOD' Cgmmjncc

The Audit staffreconciled the Exploratory Committee's reponed

financial activity for the period JanWU)· I. 1995 through June 30.1995 (no activit)' was

reponed after this date) to its bank aeti\it)· for the period JanuaJ')' 1. 1995 through August

7. 1995. the date the Exploratof)' Committee's bank account was closed. The Audit staff

noted misstatements ofreponed receipts and disbursements as well as reponed ending

cash on hand.

The Exploratol')' Committee reponed receipts ofS2~2,144 for the

period through June 30. 1995. The Audit staffdetennined that 5317.130 in receipts

should ha\'e been reponed through August 7. 1995. Therefore. receipts were understated

b)' 534.986. Based on our analysis. the understatement ofreceiplS \\115 caused. in part. b}'

the Exploratory Committee'5 failure to file a 1995 October Q~erly Repon or a

Tennination Repon; and. as a result. deposits of59.938 in July. and 5729 in August. were

not reponed. In addition. for the 1995 April Quanerl}' Repon. receipts were overstated

b)" S3.099; and. for the 1995 Jul~· QWU1erl~' Repon. receipts were understated by 527.418.

Since ponions of each reponing period·5 receipts "'ere unitemized. and the Exploratol)'

Committee did not provide workpapers to demonstrate ho,,' the reponed receipt figures

were derived. a more exact explanation ofthe misstatement is not possible.

Similarl)'. the Exploratory Comminee reponed disbursements of

5245.547 for the period through June 30. 1995. The: Audit staffdetennined that 5318.238

in disbursements should have been reponed throul:!h Au~ust 7. 1995. Therefore.

disbursements \\'ere understated b~' S7:!.691. Based on our anal)'sis. S1.650 ofthis

understatement resulted from the Explofato"o Committee·5 failure to file a 1995 October

Quanerl)' Repon or a Tennination Repon.

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The Audit staffalso compared reponed disbursements to the

amount that should have been reponed based on bank account records. For the 1995

April and July Quarterly repons. disbursements were understated by $71.136. The

understatement is the net result ofdisbursements amounting to 586.457 not being

reponed and the overstating ofreponed disbursements b)· 5I5.321. As noted above. the

Exploratory Comminee did not provide workpapers to demonstrate how the reponed

disbursement figures were derived.

FinalI)·•on June 30, 1995. the Exploratory Comminee reponed an

ending cash on hand balance of538.006. The Audit stairdelennined that the cash

balance should have been s-o- on August 7, 1995. the date the Exploratol')· Comminee's

bank account was closed. Therefore. ending cash on hand \\1IS o\'erstated b)' 538.006.

This o\'erstatement ofending cash on hand " ..the result ofthe miSS1atements noted

above and the failure to file reportS afterJune 30. 1995.

J- Other Authorized Cgmmjuccs

Thineen ofthe 20 other a..thorized comminees opened b~

accounts. Reconciliations ofthese comminccs' reponed activit)· to their respecti,'e bank

records noted the following material misstatements:

The KC)·es Campai,n in Illinois reponed total receipts of52.500.

UsinB comminee bank records. it ""IS determined that SJ.500 in receipt acti\·it~· should

ha'·e bmI n:poned. Therefore. reponed receiptS "·ere understated b)' S1.000. In

addition. disbursements "·ere understated b~· 530 and ending cash on hand was

understated b)· S970.

The Texans (or Alan KC)'es for President '96 Commiut:e reponed

total receipts ofS2.869 and 10Ia1 disbursements of52.489. Comminee bank records

indicated that S8.784 in receipt and disbursement acti,·it~· should h:I\'c bmI reponed.

TherefofC. reponed receipu "'CfC undcrstlted~·S5.915. and reported disbursements

,,-ere understated b)- S6.295.

The abo\'C missaatc:mcnts"~discussed ,,"ith Campai~n

representatives at a conference held at the end offield,,·ork. At that lime. copies of bank

reconciliations were provided 10 the Campalp. Campai,n repracnwivcs indicated that

the appropriate steps would be taken 10 compl~· "ilh the Audit saaffrecommendations.

In the Exit Conference Memorandum (-abc Memorandum") the

Audit staffrecommended that Ihc Priman·. Committee file ammdcd Summan'. and

Detailed Summar)- Pages. as ,,-ell as Schedules A-P and B-P (as appropriate) to c:om:c:t

the miSSlalemenlS nolcd abo\'C for each committcc. The Audit starrfunher' recommended

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that the Primary Committee file termination repons for the Exploratory Comminee and

all other inactive. authorized committees.'

In response to the Memorandum. the Primary Comminee

submitted lIIIended and termination repons on November S. 1997. which materiall)'

corTeCted the problems noted above.

B. 1T£~tlZAnON OF DIS8URSEI'tENTS

Section 434(bXS)(A) ofTitle 2 oCtile United States Code states that each

repon under this section shall disclose the name and address ofeach person to whom an

expenditure in an agreaate lIIIOunt or \'8lue in excess of5200 within the calendar year is

made b)' the reponina committee to meet I candidate or comminee operating expense.

together \\ith the date. amounL and purpose ofsuch operatina expenditure.

I. The Primm Cgmmjncc

The Audit sWr5 teslina indieatecllhe PrimaJ')· Comnliuee had

failed to properly itemize disburscrncnts associated \\ith one ofilS bank accounts

(Quorum Media Group account at NaaionsBank ofTexas). Therefore. the Audit staff

fe\'ie,,-ed all disbursements from this account and determined that 101 disbursements.

totaling $49.446. ,,-ere not itemized as required.

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Durina our l'e\'iC"· ofall Exploratory Committee di.sbursements.

the Audit stafT noted 71 disbursements. tOlaling 515.453. which were not disclosed on

Schedule B·P as required. The Audit staff,,;as unable 10 determine wh)' these

disbursements "·ere not itemized.

At • conference held at the end offield\\"OI'k. these matters were

discussed \\ith Campai8n represcntati\"CS and copies ofthe schedules detailing these

disbursements ,,-ere pro\·ided. The Campai~nrcprnmtati"e5 indicated that they would

take the appropriate steps to compl)· "ith the Audit stairs recommendation.

In the Memorandum. the Audit staffrecommended that the

PrillW')· Committee file amended Schedules B·P. b). reponing period. to itemize the

noted disbursements for each commincc.

In rnpollse 10 the Memorandum. the Primary Committee filed

amended Schedules B-P. 11Ic Audit staffconcluded that the amended schedules

matmall)· conected the itemization ofdisbursements.

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The Auchlllaft'..dtlC'.,ed Ihe rnoIuI..ofIhae IIIUIS wllh Ihe Rcpons AnalYSiS DivisIOn.

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c. DISCLOSURE OF OCCU'ATIONINAME OF EMPLOYER

Section 434(bX3XA) ofTitle 2 ofthe United States Code states. in pan.

that a political committee repon the identification ofeach person who makes a

contribution to the reponing comminee in an aggregate amount or value in excess of

S200 per calendar year. together with the date and amount ofsuch contribution.

Section 431(13)(A) ofTille 2 ofthe United States Code defines the term

"identification" to mean. in the case ofAn)' individual. the name. the mailing address. and

occupation ofsuch individual. as well as the name ofhis or her employer.

Section 432(hX2)(i) ofTitle 2 ofthe United States Code states. in pan.

when the treasurer ofa political comminec sho\\"S that best efTons have been used to

obtain. maintnin. and submit the information required b)' the Act. an)' repon or an)'

records ofsuch comminee shall be considered to be in compliance ,,·ith the Act.

Section 104.7(b) ofTitle II ofthe Code ofFederal Regulations states. in

pm. that the ueasurer and the committee \\ill onl~' be deemed to have exercised best

effons if all ofthe (ollo"inS are present: all "Tilten solicitations for contributions include

iI clear request (or the contributor-s full name. mailing address. occupation and name of

emplo)'er. and include the statement that such reponinS is required b)' Federalla\\'; the

treasurer makes at least one efTon after th~ receipt oftbe contribution. in eith~r a "Tinen

request or documented oral request. ,,·iahin thin~· cIa)'s ofthe receipt ofthe contribution.

10 obtain the information; and the treasurer repons all contributor information not

I'ro\'ided b~· the contributor. but in the commillee's possession. including infonnation in

contributor records. fundraising records and prc\'iousl)· filed repons. in th.e same two year

election c)·cle. .

The Audit stafT re\·i~\\·c:d 2.a~ contributions from indi\'iduals. totaling

$ 133.844. "'hic:h "·ere itemized on Schedulc:s A-P b~' the Explol6ltol')' Committee, Of

these. there "'cre 135 contributions. IOlaling $73.666. for "i1ich the Exploratory

Comminee did not disclose the occupation and'or name: of emplo)'er ofthe contributor.

The Explofatoa,' Commill~·s records did Ml include copics ofsolicitation devices. In

addition. there \\-ere no records of an~· folio" -up ~fTons 10 obtain the necessary

information. As such. best effons to obtain thiS information "'en: not demonstrated.

AI the conference held al the conclusion offield,,·ork. Campaign

representatives were ad\'iscd ofthis matter. The~' allftd to make requests for the

infonnation and file amended Schedulc:~ A-P for the Explor3toa,· Committee.

In the Memorandum. the: I\udil 5laffrecommended that the Primary

Commillee submit documentation to demonstrate: that best effom "-en: utilized b~' the

Exploratory Commiltee 10 oblaln the: required occup:1tion and name of employer

information related 10 conuibutions from indi\'iduaJs. Absent such a demonstration. the

Audit staffrecommended thaI lhc Pri~· Comminec make an elTon to obtain the

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missina occupation and DIllIe ofemployer infonnation and file Imended Schedules A-P

(by reponill8 period) for the Exploratory Committee to disclose lII1y infonnation

obtained. The Audit stafffunhcr recommended that. \\'here the infonnation could not be

obtained. the PrimaJy Committee submit records ofits eITons-to acquire this information.

In response to the Memorandum. the Primary Committee submitted

documentation ofits etTons to obtain missing occupation and name of emplo~'er

infonnation and. where such in(ormalion \\-as obtained. amended Schedules A-P were

provided. Sued upon our review. the Audit staffdetennincd that although the Primary

Committee has now made best efTons to obtain the required occupation and name of

employer infonnation. it wu not accomplished in a timely manner.

D. FAILVRE TO FILE DISCLOSl'RE REPORTS

Sections 432(e) and <0 ofTitle 2 ofthe United States Code state. in

relevant pan. that each candidate shall designate in \\Titing a political committee to sen'e

as the principal campaian committee ofsuch candidate. A candidate ma~' desi~n:ltc

additional political comminces to scn'e as authorized committees ofsuch candid~te.

Such dcsipation shall be in \\Titinl and filed "ith the principal campaign committee of

such candidate. Each principal campaiJn commince shall recei\'e all desisnations.

statements. and repons required to be filed ,,;th it and shall compile and file such

designations. Slatements. and repons in accordance \\;th the Act.

Seclion 434(a) ofTitle 2 ofthe lfniled Stales Code states. in relevant p3rt.

that each treasurer ofa political commiu~ shall file: rcpons ofreceipts and disbursements

and. Section 434(b) specifies the info~tlon that each .-epon must contain.

Durina 1996. die Alan Kc)·cs for Prcsident-Io\\"a Committee did not file

disclosure repons as required. The Audit staffdetennined that $5.10I in receipt and

disbursement acI5\'it)' should have been reponed, In addition. there ,,·as no

documentation rebued to purpose for 53.261 in disbunanents.

The Alan Kcyes for President .% - Kansas Committee ne\'er registered

\\ith the Commission and nn'er filed an~· disclosure ft1'Ons for 1995.1 The Audit staff

determined that S8.0J7 in receipt and disbursement ac:ti\'il)' oc:cum:d durin~ 1995.

Durinal996.1he Alan KC)'cs for President - Nonhem Texas Office did

not file disclOSUte repons as requiml. The Audn s&afTdetermined that S1.7S0 in receipts.

S1.601in disbursements. Mel an ending cash on hand balance ofSI49 should have been

reponed.

• Dunn. audttr........•cOfllPletH c. of 1M Slaacmcnl ofOrp,nuli. for lhe Kans."

commtllft ... 1ocaIed 1ft ..... nat, llalCmenl-.neyer filed ,,'ath the Commission.

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The Texans for Alan Keyes for President 696 Committee did not file

disclosure repons for January. February and March of 1996. Using available records. the

Audit staffdetennined that S5.915 in receipts and S6.295 in disbursements were not

reponed during this period.

These matters were discussed with Campaign representatives at a

conference held at the end offieldwork. At that time. the Audit staff provided

workpapers relative to these maners. The Campaign manager indicated that appropriate

steps would be taken to comply ",ith the Audit sWrs recommendations.

In the Memorandum. the Audit staffrecommended that the PrimU)·

Committee file a statement oforganization for the Kansu comminee. and file disclosure

repons that include the appropriate supponina schedules for the Kansu. loy/a. Nonhem

Texas. and Texas comminees.

In response to the Memorandum. the Primary Comminee filed the

requested documents.

E. RECEIPT OF ANON'·~101·SCASH CO~TRJ.UTI0NS IN EXCESS

OF THE LI~IITATION

Section IIO.4(c)()) ofTitle II ofthe Code of Federal Regulations states

that a candidate or committee rccei\'inl! an anon)'mous cash contribution in excess ofSSO

shall promptl)' dispose ofthe amount o'·er SSO, The amount over SSO may be used for

an~· la\\1UI purpose unrelated to an)· Federal election. campaign. or candidate.

Section 4411 ofTitle 2 ofthe United States Code states th8t no person

shall make contributions ofCW'I'CIIC)· ofthe United States or currcnc)· ofany foreign

counU)· to or for the benefit of an)' candidate "nich. in aggre,atc. cxceed S100. with

respect to an)· campaign ofsuch candidate for nomination for election. or for election. to

Federal office.

Section 9038.1 (f)(3) ofTitle II ofthe Code of Federal Regulations states.

in pan. that \\ithin 30 days ofsen·icc: ofthe Audit Repon. the committee shall submit n

check 10 the United Slates TreasUf)· (or the lOlal amount of An)· excessive or prohibited

contribution not refunded. reanributed or redcsisnated in a timely manner in accordance

\\;th IJ CFR §103.3(b)(I). (2) or (3).

During oW' revie-· of contributions from individuals received by the

ExploratOf)' Committcc. the Audit stiffidentified all cash listed on deposit tickets and

determined thai the Explorator)· Committee did not maintain an)' records in suppon of

these cash contributions. As such. all deposits ofcash "'Cfe considered anonymous cash

contributions. The Audit staff identifi~d 38 deposits \\ilich contained cash totalin~

S11.41S. Ofthese. 14 deposits listed cash in excess ofSSO and ,,~ considered

excessi\~. anonymous cash contributions. These exccssi,'e amounts totaled SI0.435.

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The Exploratory Committee did not dispose ofany ofthe excessive.

anonymous cash contributions priorto closinl its bank accounL For most ofthe audit

period. the PrimIry Committee maintained sufficient funds to reftmd these contributions.

Campaip representatives were Idvised ofdie excessive. anonymous cash

contributions and provided a schedule ofthese items. They indicated that they would

attempt to resolve the issue.

In the Memorandum. the Audit staffrecommended that the Primary

Committee provide evidence that the noted cash contributions received by the

Exploratory Committee were not excessive. Absent such evidence. the Audit staffwould

recommend that die Commission determine that the Primary Committee would be

required to make a payment to the United States Treasury in the amount of51 0..435.

In its response to the Memorandum. the Primary Committee stated..

"Accordina to II CFR.. JlO.4(c)(3). the (Primary) Committee is

aJlo\\'ed to disburse anonymous cash that exceeds SSO 'may be used for

any lawful purpose unrelated to any Federal election. campaip. or

candidate.'(sic)...When we were informed ofthis fact. we promptly

disbursed the SIO.434(sic) to a501(cX3) (non-profit] educational

group"·

The PrillW)· Comminee included a copy ofthe negotiated check (front

and back) that \\"as used to donate Ihe excessive anonymous cash contributions to The

Declaration Foundation. The Primary Comminee's disposition ofthese ftmcts complies

"ith Ihe provisions of II CFR §IIO.4(c)(J) except that it was not promptly done.

F. UNRESOLVED PROHIBITED CO~"TRJ.UTIONS

Section 441b(a) ofTille 2 ofthe United States Code states. in pan.. that it

is unl.\\1u1 for any national bank. or an~· corporation o'l!anized b)· the authorit)' ofany

1.\\· ofCongress. to make a contribution or expenditure in cOMeclion with an)' election to

any polilical office. or for any corporation or labor Orpnizalion. to make a contribution

or expenditure in connection with any election 10 federal office and that it is unlawful for

any candidate. political comminee or an)- person kno\\ingl)- to accept or receive any

contribution prohibited by this section.

Section IOJ.3(b)( I) ofTille II ofthe Code ofFederaJ Regulations states.

in relevant pan. that the treasurer shall be responsible for euminina all contributions

received for evidence ofilIeptit)', Contributions thai present senuine questions as to

whether they \\'eI'C made by corporations. mal)' be. "ithin len days ofthe treasurer·5

receipt. either deposited into a ampaian depository or returned to the contributor. If any

such contribution is deposited. the ueasum shall make his or her best efTons to detennine

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the legality ofthe contribution. The treasurershall make at least one written or oral

request for evidence ofthe legality ofthe contribution. Ifthe contribution cannot be

determined to be legal. the treasurershall. \\ithin thiny days ofthe treasurer'5 receipt of

the contribution. refund 1be contribution to the conbibutor.

Funher. under II CFR §I03.J(b)(4). any contribution \\ilich appears to be

illegal under II CFR §IOJ.3(bKI) and \\'hich is deposited into a campaign deposito~'

shall not be used for any disbursements until the contribution has been detenninecl to be

legal. The political committee must either establish a separate account in a campaign

depository or maintain sufficient funds to make aI. such refunds.

Section 9OJ8.1(f)(3) ofTitle II ofabe Code ofFederal Regulations states.

in pan. that within 30 days ofservice ofthe Audit Repon. the comminee shall submit a

check to the United States TreasuJ')' for the IOtaI amount ofan)' excessi\'e or prohibited

contribution not refunded. reanributed or redesignated in a timel}· manner in accordance

"ith II CFR §103.3(bXI). (2) or (3).

The Audit sta1TIe\'ie\\ft contributions recei\'ed b)· the Primary

Committee on a sample basis. The sample projected that the total dollar value of

unresol\·ed prohibited contributions recci\-ed b)' the Primary Comminee ,,-as $10.724.

For each apparent prohibited contribution identified. the corporate status ofthe

contributor \\tIS verified ""ith the appropriate~' ofState,

Campaign rcpresenlati\-e5 "-ere nolified ofIhis maner and provided a

schedule ofthe unresolved prohibited contributions identified in the sample, The~·

offered no comment "ith respeciiO this maner.

In the Memorandum. the Audit staffrecommended that the PrimaJ)'

Committee demonstrate that it did not recei\Oe prohibited contributions as noted above,

Absent such a demonstration. it "'as noted a recommendation "'ould be made that the

Commission detennine the PriIlW')· Committee ""Quid be required to make a payment to

the United States Trea5UI)· in the amount ofSI 0.724.

In its response to the Memorandum. the PrillW')' Committee pro\'ided

documentation establishing thai a ponlon ofthe questioned contributions were from

permissible sources and that it had not n:cel\·cd a material amount ofcorporate

contributions.

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IV. AUDIT FINDINGS AND RECOMMENDATIONS; AMOUNTS

DUE TO THE U.S. TREASURy

A. UNRESOLVED EXCESSIVE CONTRIBUTIONS

Section 441a(aXI)(A) orTitle 2 ofthe United States Code states. in pan.

that no person shall make conttibutions to any candidate with respect to any election for

Federal office. which. in the aggregate. exceed $1.000.

Section IIO.I(k) orTitle tI ofthe Code ofFederaJ Regulations states. in

part. that any contribution made by more than one person. except for a contribution made

b)' a pannership. shall include the signature ofeach contributor on the check. mone)'

order. or other negotiable instnunent or in a separate \\Titing. A contribution made by

more than one person that does not indicate the amount to be attributed to each

contributor shall be attributed equall)' to each contributor. If a contribution to a candidate

on its face or \\-hen aggregated with other contributions from the same contributor

exceeds the limitations on contributions. the treasurer rna}' ask the contributor \\'hether

the contribution \\'as intended to be a joint contribution b)' more than one person. A

contribution shall be considered to be reattributed to another contributor ifthe treasurer of

the recipient political comminee asks the contributor \\nether the contribution is intended

to be a joint contribution b)' more than one person. and infonns the contributor that he or

she ma~' request the return ofthe excessi\'e ponion ofthe contribution ifit is not intended

to be a joint contribution; and \\ithin SiXl~' da~'s from the date ofthe treasurer·s receipt of

the contribution. the contributors pro\'ide the treasurer \\ith a \\Titten reattribution ofthe

contribution. \\'hich is si~ncd by each contributor. and \\'hich indicates the amount to be

attributed to each contributor if equal attribution is not intended.

Section 110.1(1) ofTitle II oflhe Code of Federal Regulations states. in

pan. that if a political committee recei\'es a "Titten reanribution ofa contribution to a

different contributor. the treasurer shall retain the "Tinen reattribution sia:ned b)' each

contributor. Ifa political committee does nOl retain the \\Tinen records concerning

reanribution as required. the reattribution shall nOl be effccti"e. and the original

attribution shall control.

Section I03.3(b)(3) ofTitle II ofthe Cod.: of Federal Regulations states.

in pan. that contributions \\llich exceed the contribution limitation ma)' be deposited into

a campaign depositor)". If an)' such contribution is deposited. the treasurer may request

redesignation or reattribution ofthe contribution b~' the contributor in accordance with 11

CFR §IIO.l(k). Ifa redesignation or reattribution is not obtained. the treasurer shall.

\\ithin 60 da~'s ofthe treasurer·s receipt ortile contribution. refund the contribution to the

contributor,

Seclion 9038.1(0(3» ofTitle JJ orthe Code of Federal Regulations states.

in pan. that \\ithin 30 cIa)'s ofscn'ice ofthe Audit Rcpon. the committee shall submit a

check to the United States Treasul)' for the total amount of an~' excessive or prohibited

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contribution not refunded. reattributed orredesignated in • timely manner in accordance

with II CFR §I03.3(bXI). (2) or(3).

I. Ibc primm CommjDcc

In Iddition. the Audit staffre\;e\\'ed all 22 contributions deposited

to a bank account opened b~' the Pri1lW)· Committee. "ilich although designated as a

legal and compliance fund. \\'DS fte\'ft' l'eBistercd as a separate comminee'. Our fe\'ie,,'

identified four excessive contributions. totalinG 53.250. "ilich had not been refunded.

These contributions "'ere from indi,'iduals "'110 had abad)- contributed S1.000 to the

Prim~' Comminee.

The Audit sratrused the Primary Committee·5 computerized

receipts file to identify all individuals who contributed in excess ofS500 and then

researched Exploratory Committee files for additional contributions from those

individuals. In 8ddition. all individuals "ito contribuled in excess of5200 to the

Exploratory Committee were identified and the Primal)- Comminee·5 receipt file were

reviewed for 8dcIitional contributions from those individuals. These reviews identified

unresolved excessive conuibutions to1aling $56.678. No record ofan)' refunds or

reanribution letters could be located in Primal)' Committee or Exploratory Comminee

files.

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Based on our I'e,'ie"" ofcontributions received from indi\'iduals b)'

the Exploratof)' Commincc. the Audit saafTidentified six individuals that ~xceeded their

contribution limitation to the ExploralOf)' Commiltcc h~' a total ofS5.343. No record of

an)' refunds to these indi,;du:als or n:attribution letters could be located in the Exploratory

Comminett·s files.

In addition. the Audit SlafTnoted a S5.000 check reponed as a loan

from the candidale -1Uch "iU dra"ll on a joint checking account held in the name ofthe

candidate and EI)Tia L. Mackie. This check is sit:~ onl)' b~· Mr. Mackie and therefore

appeared to be an additional 54.000 exccssi\'c contribution.

The Pri1lW)· Committee did not deposit excessive or prohibited

contributions into a separate account; ho"·~\·er. there \\-en: sufficient funds 8,-ailable for

most ofthe audit period to refund these contributions.

These matlcrs ""CIC discussed "ith Campaip repn:sentati\'eS al the

conference heJel at die end offacld,,·ork. At thai time. schedules orthe excessive

• 1Mreceapu IIId.........of dw 'cpl Md compilaftCC fund account were reponed by the

PnmIry C...eaee. 11Ieteforc. II a baled .. a ~.Cornminee account rather than a General

Elect..LcpI and Account..CompIlalCe Fund ace....described .. II CFR 19OO3.3(a,.

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conbibutions received from individuals were provided to the Campaign. The

Campaign·5 representatives stated they would research the contributions. In addition. the

Audit staffrequested that the Campaign obtain documentation regarding the unpaid

SS,OOO loan made to the Campaign by Mr. Mackie.

In the Memorandum. the Audit staffrecommended that the

Primary Committee provide evidence that the contributions in question \\'ere not

excessive. Absent such inConnation. the Audit staffstated that it "'ould recommend that

·the Commission determine that the Primary Committee \\'Quld be required to make a

payment to the U. S. Treasuf)' in the amount S69,.271 ($56.678 + 53.250 + 55.343 +

54.000).

In its response to the Memorandum. the Primat)' Committee

provided documentation relarding the $4.000 excC4JSive contribution recch'ed b~' the

Exploratof)' Comminee and attributed to EI)Tia L. Mackie. The documentation included

the follo\\ing: (I) a Jener from the PrirnaJ)' Committee explaining the infonnation

pro\'ided regarding the loan transaction: (:!) a letter from the Prim~' Committee·s

counsel. dated Fcbrual)' 23. 1997. indicating there ""as a S·tOOO loan from the c3ndid:lte

that would be repaid "lth interest: (3) a leiter signed b~' the Candicbtc dated July 29•

1997. stating that he authorized a S5.000 check be dra"n on a Sun Trust Bank account

\\'hich contained funds from honoraria M earned from speaking at \'anous c\'ents. that

EI~'ria Mackic ,,'US a co-signer on the account. and the loan \\'35 still outstandins: and (4)

relevant ponions ofa transcript from the deposition of EI~'ria Mackie on January 24. 1997

\\'hich statcs he maintained an account for Alan "e~'es and a $5.000 check was sent to the

Alan Keyes Comminee as a loan. Thc Pri~' Committee asserts that the 55.000 check

dra\\ll on the account and signed b~' ~tr. t.tackie \\'35 indeed a candidate l~an and not an

excessi\'c contribution from Mr. Mackie. No documentation related to an~' other

cxcessi\"c contribution \\-as pro\·ided. Based on a rc\'ie\\' ofthe c\'idence provided. the

Audit staff concludes that the S5.ooo at issue: ~I'resents the personal funds ofthe

Candidate. not a ~.OOO excessi\'c contribution b~' t.tr. ~tackie. Therefore. excessi\'e

contributions tOlaling $65.271 ($69~71 • $-1.000) mnain unresol\'ed.

On December:!. I9Q7. the Primary Committee submitted n check

payable to the United States Trcasu~' "'hich included J13yment for the unresolved

excessi\'e contributions.

RecommendatioD flJ

The Audit staffrecommmds that the Commission dctennine that 565.271 is

pa)"able to the United States Trasu~' pursu:mt to II CFR §9038.:!(c).

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B. DETERMINAnON OF NET OUTSTANDING CAMPAIGN OBLIGATIONS

Section 9034.5(a) ofTitle I J ofthe Code ofFederal Regulations requires

that within I S calendar days after the candidate·s date ofineligibility. the candidate shall

submit a statement ofnet outslanding campaign obligations which reflects the total ofall

outstanding obligations for qualified campaign expenses plus estimated nece~'

winding down cOSU,

Section 9034.I(b) ofTille II oCthe Code ofFederal Regulations states. in

part. that ifon the date ofineligibilit)· a candidate has net outstanding campaign

obligations as defined under II CFR §9034.5. that candidate may continue to receive

matching payments provided that on the date of payment there are remaining net

outstanding campaign obligations.

Section 9034,4(a)(3)(ii) ofTille JI ofthe Code ofFederal Regulations

states. in pan. that ifthe candidate continues to campaign after becoming ineligible due to

the operation of J1 CFR §9033.S(b). the candidate ma)' ani)' receive matching funds

b3Sed on net oUlSUU1ding campaign oblilltions as ofthe candidate·s date of ineligibilit~·.

The statement of net outstanding campaign obligations shall onl)' include costs incurred

before the candidate·s date ofincligibilit)' for goods and sen'ices to be received before

the date ofineligibilit)O and for \\'hich \\Tinen arrangement or commitment was made on

or before the candidate·s date ofinelil!ibilit}·. and shall not include winding do"" costs

until the: date on \\"hich the candidate qualifies to rccei\'e \\inding dO\\11 costs.

Under 1JCFR §9033.S(b). the Candidate·s date ofineligibilit)' shall be

the 30th da~' follo\\ing the date ofthe second consecuti,'e prim3r)° electio~ in which such

individual receives less then 10-1. ofthe number of popular votes cast for all candidate·5 .

ofthe same p:ut)O for tM same office in that pri~' election.

The Commission detennined that Alan Ke~oes· date ofineligibilit)' \\'as

March ~S. J996. as a result of not ha,oinl! ~ei'°ed ten percent ofthe \'ote in two

consecuti,oe Rqxablican Presidential Pri~· elections. HO\\'e\'er. he continued to

campaign until the Republican Pan~' nominated its candidate for President ofthe United

States on Au~ust 14. 1996. As a result. the Candidate can not claim any winding down

costs incurred on or ben\'een March 26 and Au~usl 14. 1996. The Audit staffreviewed

the Primary Committee·s filWlCial acti\Oil~' through September 30. 1997. armlyzed

allowable \\indin~ down costs. and prepared the S~lement of Net Outstanding Campaign

Obligations (NOCO) which appears bc:lo\\ .

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ALAN KEYES FOR PRESIDENT '96, INC.

STATEMENT OF NET OUTSTANDING CAMPAICN OBUCATIONS

as ofMarch 25. 1996

as determined September 30. 1997

ASSETS

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Cash

Accounts Receivable

Capital Assets:

Total Assets

OBLIGATIONS

Accounts Payable for Qualified

Campaign Expenses

Amounts Payable to the U.S.

TreasUl)·:

Excessive Contributions

Stale • Dated Checks Cb.

\\finding 00\\11 Costs:

03126196 • 9/30/97: Actual

10/1/97 and later: Estimated

Total Obligations

NET OUTSTANDING CAMPAIGN

OBLIGATIONS (Deficit)

S 745.817 cel

2" 925 Cd)

$ 236.209

76.237

14 948 (I)

$ 327.394

1.784.546

65.271

10.737

768 74"

2 6")C~ "96

$(2 30J 90")

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All l ...... Aucu -.or ,alucd. ~.of...... ~tdr4-*' .1 CTR t~).I ~CN.t C~ncetne cIMc I.J~9~) PrIOr to da.i

....I CFR tfJOJ.I secN.t alto-cd .-...01 ,"u..., CllP"alIIUCII • Iatt ....et value. ratkr ..... It 60'.

of CCKI IlIdudccIa one C..... Auct , ......SJ.71U .~.of COil........~cIprIOr 10 &he enecllve cIaIc or.-

........

At ~*cI""II en 1'O).I4(••U•••• kIf. ..... caMlMIn CMIpItp .fter ......... been clctnmlftCd

..................CIDIU ...-d_ 01 -.ct-..)-2"-" I·......,. e "'...... InCltIded In ..........

.......-cIftIIC.II.............Sil.' cat .........*'per"_C.IiI' hen nch*cl. IGfIIC or..hedl be

.......a pl)1Mc If. ., ft ",-.*4*(...-cIn ""'" ~ICCIMft supplied

pnutlo DOl

s.cc csa..-s.CR IMCI.ea-pua.., ,........ tIlIC Attdd ....,..tI.In".-C_auec·, cI.scaowrc rcpuIb and

m:ords 10 ClDIIIPIft Ibc ....r na-.n.......-c _Ubi ...8CClCIIIr)

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Shown below arelldjustments for funds received after March 25. 1996.

based on the most current fiDanciaJ infonnation available:

Based on this audited NOCO. the Primary Comminee has not recei\'ed

matching funds in excess ofits entitlement.

c. No~-ovAunED CAAI'AICS EXPENSES: VNDOCV~IE~TED DIS.l'RSE!'IE~"I'S

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Net Outstanding Campaign

Obligations (Deficit) at of3-25-96

Matching Funds Received

3-26-96 to 9-30-97

Net Private Contributions and Other

Receipts Received

3·26-96109·30-97

Remaining Net Outstanding

Campaign Obligations

(Deficit)

($2.301.902)

2.145.766

131 771

<$ ?4 36-;)

Section 9032.9(8) ofTide II ofthe Code ofFederal Regulations defines.

in pan. tht term "qualified campai.n expense" as a purchase or p:I)·ment incurred b)' or

on behalfofthe candidate or his or ha' authorized commincc made in co~ion with hi.s

or her campaign for nomination: ,,1Iich neither the incurrmc:c nor the payment of\\'hich

constitules a violation ofan)' Ia,,' ofthe United Stites or the Slate in \\ilich the expense is

incurred or paid.

Section 9033.II(b) ofTitle II ofthc Code ofFederal Regulations

pro\·ides that for disbursements in cxcess ofS~OO. Ihe candidate shall present a canceled

check n~otiated b)· the payee and cither: a receipted bill (rom the payee that states the

purpose ofthc disbursement; or ifsuch a receipt is nOI a\·ailable. one ofthc following

documents generated by the payee: a bill. in\·oicc. \·oueller. or contemporaneous

memorandum from the candidate or commincc thai states the purpose ofthe

disbursement. Where the docummlS specified are not a\·ailable. a \'oucher or

contemporaneous memorandum from the candidate or the committee that stales the

purpose ofthe disbursancnt: or ifneithcT a rmeipled bill nor other supponing

documentation is available. a canceled check ftClOliatcd b)· the p:lYCC that Slates the

purpose ofthe disbursement. Where Ihc supponina; documenlation is not available. the

candidate or comminee IIUI~' prc5Cnt a canceled check and collateral evidence to

document the qualified campai~n expense. Such collateral c\'idc:ncc nul}" include but is

not limited to: Evidence dcmonstnuiftl that the expenditure is pan ofan identifiable

proaram or project ,,1Iich is o~ise sufficiently documented such as a disbursement

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I. The PrjmaQ' Commjncc

The Audit stairssample review ofPrimary Committee

disbursements identified a material number ofdisbursements for \\'hich no canceled

checks \\1:Ie maintained. Most ofthese disbursements \\-ere dra\\ll on fi\'e specific

accounts. The Audit SlaWrevie\\-cd all disbursements dra\\ll on those accounts and

identified 29 disbursements. lolalina 531.425. for which no canceled check or other

piI)1'nCnt device. such as a debit memo. \\-ere maintained.

which is one ofa number ofdocumented disbursementsrelating to a campaign mailing or

to the operation ofa campaip office: evidence that the disbursement is covered b}' a preestablished written campaip committee policy. such as a daily travel expense policy.

For disbulsements of$200 or less a canceled check negotiated by the payee that states the

payee. elate. amount and purpose ofthe clisbursemcnL

Section 9038.2(bX3) ofTitle II ofthe Code ofFederal Regulations states

that the Commission ma)' detennine that amount(s) spent by the candidate. the

candidate's authori7.ed comminee(s). or.enl5 were DOt documented in accordance with

JI CFR §9033.11. The amount ofan)' repayment sought under this section shall be

detennined by using the formula set fonh in II CFR §9038.2(bX2Kiii).

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... The ExpIOA10D" Cgmmjncc

As pan ofour Ie\'ie\\' ofall Exploratory Comminee disbursements.

the Audit staffnoted ~7 disbursements. lotaling S27.642. \\llich lacked adequate

supponina documentation, T\\'ent)··I\\"O ofthese disbursements \\-ere for expense

reimbursements 10 Exploratol)' Commiltee staffmembers or commissionS and expense

reimbursements 10 consultants. The onl)· documentation 8\'8ilable 10 suppon any ofthe

disbursements noted \\·ere canceled checks that contained either no purpose or an

inadequate purpose.

3. Other Autbmjzcd CgmmjllCCS

The Audit staff 1'C\"i~-ed all disbursements made by each ofthe

other authorized committees. rn·i~,,"S l'C\uled undocumented disbursmlents.

\\'hich totaled S28.402. as (0110\\'5,

The review ofdisbursements made by Alan Keyes for President •

10\\"8 Ie\'caled that there -rcR four disbursements IOlaIinB 53.261 for \\lIich there \\115 no

documcmation orpurpose. These \\"ere \\ithdra\\"als made from the committee's bank

account Ulilizina COUIUer checks,

The m"ie\\ ofdishursements made h)' Nonhwestem Slates for

Keyes revealed that there were 56 disbuncmcnlS.lolaling 525.141. for which there

no canceled checks or other supponina documentation.

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At the end offieldwork. the Audit staffdiscussed this issue with

Campaign representatives and provided schedules ofthe inadequately documented

disbursements. These disbursements totaled $94.469 ($38.425 + $27.642 + 528.402).

Campaign representatives indicated that the)' "vuld anempt to obtain the missing

documentation.

In the Memorandum. the Audit staffrecommended that the

Primary Committee submit evidence documenting the above expenditures were qualified

campaign expenses. Absent such a demonstration. the Audit staff noted that it would

recommend that the Commission make a detennination that the Pril1l8l')' Comminee

"'ould be required to make a pro-rata rep:l)'ment ofSI 1.893 ($94.469 x .1258931

°) to the

United States Treasury pursuant to Section 9038(b)(3) ofTitle 26 ofthe United States

Code.

In its response to the Memorandum. the Pri~' Committee

pro\'ided canceled checks (front and back) relating to the 56 disbursements. totaling

S~S. J41. made by Nonh,,·estem States for Ke)·es. For most ofthese checks. an adequate

purpose "'as provided on the check. Based on oW" re\'iew ofthe checks and other

a\'ailable documentation. the Audit staffconcluded the purposes ofthese disbursements

"-ere sufficientl)· documented. No documentation related to an)' other non-qualified

campaign expenses addrased above ,,-as pro\·ided. Therefore. the Audit staffconcluded

that there remains non-qualified can1paii!n expenses. totaling $69.328. \\'hich are subject

to pro rata repa)'ment ofS8.728 (S69.3~8 x .125893).

On December :!. 1997. the Prim3J')· Committee submitted a check

p3}Oable to the United Stales TreasUl)· ""hich included a repayment for the" non-qualified .

campaign expenses.

Recommend.tion 112

The Audit stafTrecommends that Ihe Commission make a determination that the

Prim~' Committee is required 10 make a pro-rata fep:tyment of58.728 ($69.328 x

.125893) to the United States TreasUJ)· pursU3l1t to 26 USC §9038(b)(3).

D. STAU-DATED COl'Il'lIn££ CII£CI\S

Section 9038.6 ofride JI ofthe Code of Federal Regulations states. in

pan. that ifthe committee has checks outsaanding 10 creditors that have not been cashed.

the committee shall notify the Commission. The commiuce shall info"" the Commission

ofits efforts to locate the payees. ifsuch efTons ha\'c been nec:essar)". and its effons to

II

nus fisurc (.125193) rCpI'C5Cftb tIw rcpa~mftll ,.110. as calculated pursuanllo II CFR

§9031..'!(b)(2)(iii).

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encourage the payees to cash the outstanding checks. The committee shall also submit a

cbeck for the total amount ofsuch outstanding checks. payable to the United States

Treasury.

Based on our bank reconciliations. the Audit sWTidentified 29 checks.

totaling SI0.737. that had been issued by the Exploratory Committee but had not been

negotiated.

The Audit staffdiscussed this matter \\ilb Campaign representati\'es and

provided them with a schedule ofthe Exploralof)" Committee·s stale-dated checks. The~·

indicated that they would research each ofthe checks on the schedule.

In the Memorandum. the Audit staffrecommended that the Primary

Committee submit evidence that either the checks "'-ere not outstanding b}· pro\"iding

copies ofthe front and back ofthe negotiated checks along \\ith bank statements; or. that

the ouwanding checks "'ere void by pro\"iding either copies ofthe ,"oided checks \\ilh

evidence that no obligation exists; or. pro\"ide copies of negotiated replacement checks.

Absent such infonnation. the Audit Slaffnoted that it "·ould recommend that the

Commission determine S10.737 "'vuld be p:I)"able to the United States TreasUl')·.

The Primar')" Comminee·s response to the Memorandum did not contain

an}" e\'idence regarding stale-dated checks.

On December:!. 1997. the Pri~' Committee submitted a check pa)'able

10 the United Slates TrcasUf)· ","hich included a p3)·ment ofS10.737 for the stale-dated

checks.

RecOmmcad"ion ,]

The Audit staffrecommends th3t the Commission determine that the Prim3f)"

Commiuee is mJuired 10 p:I). the United States Treasul)· S10.737 pursuant to II CFR

§9038.6.

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v. SUMMARy Of AMOUNTS QUE TO THE U.s. DEASIJRY

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Findina IV. A.

Finding IV. C.

Finding IV. D.

Umesolved Excessive Contributions

Non-Qualified Campaign Expenses:

Undocumented Disbursements

Stale - Dated Checks

Amount Due To The U.S. TreasuJ')'

Remainina Amount Due

Page 26

565.271

8.728

10737

584.736

$8; 7]6

so
lrtV1""'O........... U1f"'\.:,fS,'f'" 'Jei)* .."O•..D

Anachment 1

Alan Keyes for President .,., Inc.

Authorized Comml"••,

Comml"•• Date

Reglste,ed City Stale T,eilsu,er Total Total Ending

Wlh Receipts Disbursements Cash Comml~Slon

11 Maryland for Ke,., -,. 12/15195 Gernlantown. MD Terry Turner 000 000 000

12 M.ss.chuI'U, for AI.n Keyes 1/19196 Somerville. MA Patrick lannon 000 000 0.00

13 Michigan for Ke,e. "I ""'96 Ann A,bor. M. Bart l Staker 000 000 000

,. Mlnntlotl for Klyt, 2129/96 Richfield. MN Thomas W Strahan. Sf 2.716 17 2.716 17 000

t 5 Northwest.r" Stlt•• 'or Key.s 10/15/95 Brooks OR Bonnie J Mabon 34.954 55' 34.954 55 000

11) South Clrollnl.nl 'or K.,.s '9' tI19/9'3 Taylo,s. SC Carolyn R RICe 1.69700 1.697 C)O 000

17 South O.kot.nl for Alan K.y., '96 1I JO/96 SIOUX ralls SO Gretchen A Hoftman 3.35044 3.35044 000

1~ T••ans for Alan Key.s 'or Presld.nt 1/""96 Houston. TX Christ.')pher T Kuhlman 8.784 11 8.784 11 000

'9'

19 Wisconsin 'or AI.n K.yes 10/31195 Sheboygan.VVI Matheal J He,nen 000 000 0.00

20 Alan Ke,•• for Pr.sldent '9' . Kansas Never riled Elbing. K5 Kart Poovey 8.01748 8.01748 000

~-------- ~---~------ ..-_..- --------- ~--~~------

S122.57381 $122.57381 so 00

========= ::::::==:=== ====:

Iht act..:tI at"""nt dcr«,~i'td into ,hi~ cornmittct"', hank account \\ a~ '12.1 ~A 77 Iht" amll"n' f«'l'nrtrd "'a\ " ...QS4 ~S "hich inclm't"d '2.79~ 71 in

,rerlr" Ih~.. \\t,t nC'f clt'rn~ittd in Iht committct"', hank accounl hut \\t"ft" instead senlln Iht" I'rim:uy ('umrnilltt"

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Cf"lI1""O...... .fJ1f\..l('S)* .....,JfS). ...D...D

Attachment 1 '\

AI.n Keyes fo, President ·tl,lne.

Authorized CommlUee.

Commln•• Date

R~g.s,p.,ed C.ty. S'itle Treasurer Total Tolal Ending

W.th Receipts Disbursements Cash'

Comrmss.on

Alab.ma Ke," Commltt., 2113/96 Huntsville. Al Amelia C Wsdom S 000 S 0.00 S 0.00

2 Alan K.y•• for Pr••Id.nt "I' • 12/t2195 Colorado Spftngs. CO WH.am V Mote 000 0.00 0.00

Colorado

3 Alan Key•• fot Pr••ldent "98 1130/96 Crescent Spllngs. KY John A Shenon 1.18299 1.18299 000

K.nt.,c.y AHill,'e

• Alan Key•• for Pr,.,dent "'8, 1111196 Greenville. NC Dantel C Morris 1.8'000 t.810oo 000

NC Comm,n,.

S Alan Key•• for P"lldf!nt ",. 1119/96 Denlon. TX James 0 Green 1.750 00 1.75000 000

North.," T•••• Office

6 Alan Key•• for p".Id~nt • low. 1'/15/95 Des Mo.nes. IA Jonathan A Jackson 5. tOt 08 5.101 08 000

7 Arlzon. for AI.n Keyes '98 2/13/96 Tucson AZ Robert A Gentala 000 000 000

8 Californian. 'or Keyes 1/29/96 Ventura. CA Sandy Patrizio 43.518 13 43.518 13 000

9 Commltt.e to Eltct AI.n Keyes 1112/95 Fresno. CA Martan Mosley 6.191 86 6.191 86 000

P,esldent of the United Stites

10 Keyel Camp.ign In illinois 2/13/96 Park Ridge. Il Eugenp. T Carter 3.500 00 3.50000 000

- ......- ....

..'m"un.' \\tftt dtltmtintd "i." inrflnna.inn 3\ail"hlt "ht" .he h"nk rccnncil.... inn~ fur .he Au.hnrtltcl ('nmmi"tc~ "crt ("""drlcd. ","til ", nur

ft\ iC'\\ nf d.,dt"urt rrrl,n-. anti amendtd rtrnn~ filed 'hrough lC'm,inalinn

Page 1 of 2

•
FEDERAL ELECTIO" CO~1~"SSIOS

TO:

FROM:

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Dec:tLtlt»er 23, 1997

MEMQRANDUM

Robcn J. Cosca

Assistant StaffDirector

Audit Divisi

THROVGH: John

StafTDi C.~. , I '

La\\TCIICCM:NobIe ?/

General Counsel" ";

Kim Bripi-Coleman 1AJ 1J./k....

Associate General Counsel

Lorenzo Holloway 1.vi

AssiSWlt General Counsel

Susan L. Kay

Attorney

SVBJECT: Proposed Audit Rcpon on Alan Keyes for President -96. Inc.• Alan Keyes

Committees and other Authorized Committees (LRA 1493)

The proposed Audit Repon on Alan KC)u for President ·96. Inc•• Alan Keyes

Comminee and other Authorized Comminecs(the "Comminee") was submitted to the

Office ofGcneral Counsel on December 16. 1997. The followinG memorandum

summarizes our comments on the proposed n:pon. I We concur with the findinp in the

Audit Repon which lie not discussed in the foiloWina memcnndum. Ifyou lulve any

questions. pleae comact Susan Kay. Ihc atIOIne). assiJftCCI to this audile

We .......ad ..... dleC__ ...tS 11M.. 1M ill......since .... proposed

Audit Report cIoes ...-.1DIIIIn public cIasc...,.S. II C.FeR. t 2.4.
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Memorandum 10 Raben J. Costa

Praposcd Audit Report

Alan Keyes for President -96 Inc.• Alan Keyes Comminees

and other Authorized Committees

Paae2

The proposed Audit repon includes a finding that the Comminee received

anonymous cash contributions that "'ere in excess ofS50. The total amount at issue \\'as

SI0.435. In response to the Exit Conference Memorandum. the Comminee provided a

copy ofa negotiated disbursement check that \\'85 used to donate the excessive

anonymous cash contributions to an entit)· that ,,-as established as a tax exempt

organization under 26 U.S.C. § 50I(c)(3). Pursuant to 11 C.F.R. § 110.4(c)(3).:l

candidate or committee receiving an anon)'mous cash contribution in excess ofS50 shall

promptly dispose ofthe amount o\'cr S50. The amount over S50 may be used for an}'

la\\1ul purpose unrelated to an)' Federal election. campaign. or candidatc. Jd Sincc the

Committee donated the excessi\'e cash to a tax exempt entit)· organized under 26 U.S.C.

§ SOl(c)(3). it ap~ that the Comminee·s disposition ofthe cash YtilS unrelated to a

Fedcral election. However. the Audit Repon does not conclude th:u the Commince·s

disposition ,,-as pennissible. Thc Office ofGeneral Counsel recommends that the Audit

Di\·ision !'e\'ise the proposed Repon to state \"hether the Committee·s disposition ofthe

funds complies \\1th 1J C.F.R. §110..a(c)(3).

In addition. the proposed Audit Repon includes a finding that the Committee

rccei,'cd excessive contributions that "ere not rcsoh·ed. In the Exit Conference

Memorandum. the Audit 5tafT found ~sol\'ed excessi\'c contributions in the ~ount of

S69.~71. A ponion ofthe excessi\'e contributions included a S5.0oo contribution that

\\'as ori~inall~· considered a $4.000 cxccssi\'c contribution from an indi\'idtml. Howe\'cr.

the Primar)' Committee pro,'ided documentation indicating that this was a candidate loan

and not an excessi\Oe contribution from an indi,oid~1 contributor. The proposed Audit

Rc:pon concludes that thc contribution \\'as not an excessi\'c contribution from an

indi\'id~l.

A candidate \\'ho recei\'cs m3tchin~ funds C3n make cxpenditures from his or her

personal funds. or funds ofhis or her Immedl~ll~ family in connection "'ith his or her

campaign for nomination (or election In the: office: of President \\'hich do not exceed

S50.ooo. 11 C.F.R. § 9035,2(a)( I). J Thcn:ftlre. ifthe source: ofthe 55.000 "oas the

candidate·s personal funds. then it is nnt an CXCCSSI"C contrihution from the individual.

Because the check \\"35 signed by an indl\'id~1 othcr t~ the candid:lle. the Audit staff

ori~inall~' considered it an cxcessi\·c contrihullon. If. b3scd on additional information.

the Audit stafffound that thc S5.ooo \\'c:n: the personal funds of the: candidate and

therefore not an cxcessi,·c contribution from the individual. then the Audit Rcpon should

specifically Slate that the funds at issue appc3r to be the pc.-rsonal funds ofthe candidate.

SectIOn IIO.4(cXl) rcqUII'CS a commlneott 10 prompll~ dispose of anon~mouscash conrribullons an

excess ofSSO Howncr.1hc Commmcc dad not dlipCKC o(ahc C'cn~IWC cash until I' was notified during

the audit

, Personal funds melllCk. for ~JLampl(" ~\C~ undt"f the cand.4.llc·s conlrol~ salal')' and other earned

Incomc; procftds from die sale ofSlocL. and IncomC r,um l"'Us estabhshed before candidac\', II C.F.R.

It IIO.IOCb)( l):and (2) •

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..........10RoIIertJ. Colla

......Audia Repon

A_ Keyes f.PraideaI·"1ac.. Alan Keyes Caauniaees

........AudIorizId e-iaees "3

Further. the Audit stafrreviewed contributionsreceived by abe Primal')·

Committee OIl • .-pic buis and projected that Ihc Primary Committee received

unresolved prohibited contributions in the amount orSI0.724. The Exit Conference

Memorandum SlateS that the Auditstaff \~fied that these were contributions from

corporations. However. the proposed Audit Repon SlateS that the Primal')· Committee

provided cIocumen1ation establishina that it had not received a material amount of

corporate contributions. The Repon does not discuss the additional infonnation that "'as

received to show that these not corporate contributions. The Office ofGeneral

Counsel JeCOIIUDeDCIs that the Audit Division revise the proposed Audit Repon to include

a discussion ofthe additional information pro,·idcd in response to the Exit Conference

Memorandum.

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RECE.V£D

Alan Keyes for President '96, IncfEDi::~I~~~g~loN 251S \\'hltc Bar A\c - Sultc IA-301 - 5, Paul \1' ~~ IOQ AUDIT DIYISION

(612) 413.0019 - FAX (612) 41~-9880 u- 5 3"1 DH '97 , ..for AIIft ~CI for PIesedcIIl ~. '-' III'" I i

October ) I. Iqq,

Raben ("ossa

federal Electaon C-ommlSSIOft

qQQ I: !\1IftI

\\ a••nll''''' D C"

\Iftllo...ndulft

The: ~(·\t called (or • tOlal da'FOIFcmcnl to the l.~ 1r~ of5 II:;.(JC)o \\ ha\ "'1I~llbCd

a &:hccL made ~abl~ Itt lhe: l S T~ In aht: ..1&.....1urSlo.....:;

The: d.nCn.-n-:c ........ccn the: rccummcnd~ d''Pu'ttCl''MftI .ft Ih~ r(.,t and Ih~ 3Iununr ttflh&:

~h(-=L "~'I'bana:d kll.."

.~.(JI"'I" a:couna few the kWl tt."" 0\1.. "n~ "h.,h had prnlC'Uil~ been c:1......icd a,.,

~,.:C',I\C Il:tlftmhulNIft

.~IC· -~ ., luppr,,,,".~Cttntnhu"."" _hl(h ha\~ hccn clrorrcd a, emmalenal du~ It' the

.....".11......1...~un I...' pI'I,.deII 'ldee..

,

.~~

')a\&: ka-:rr

'all,tnal ( :unpalt=n \'an8t=~"T

Pat;Je 32
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Alan Keves for President '96, Inc• • 25 JS Y.'hII~ Bear ....\·c - SUlle SA-301 • 5, Paul. ~1' ~~ J(tQ

(612) 483-0079 - F.e\X 1612t 48:;·QI80

Plid for Alan ~cs ftw Pn:sIdcnt ""'. Inc

October 31, 1qq7

Rohen Costa

fc:deral flc.-Cllttll Commlss,,,n

tIQIl.1 ~tr«l

\\ ....Jtln~hlf' I) ( .

The: F:C\t Q11.:d tnr a lalal dl~o"cmcnll"Ihc: t 1,~ "I"SI I ..Jt)u fi~ Ihe: unh,'"C

h.MJ ...""..,...... III.: rC\1. "C: " .."c: ahle' It' rc:du..:.., thc dt~'''Fcn-..n1 al"l1uUftI sll=nlti..:anll\ h\ I'"'' ,d,n~

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'\;.'"

FEDERAL ELECTION COMMISSION

January IS. 1998

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Mr.WillilUD G. Spiegel. Treasurer

Alan Keyes for President '96. Inc.

3585 Nonh Lexington Ave., Suite 172

St Paul. MN 55126

Dear Mr. Spiegel:

Attached please fmel the Audit Repon on Alan Keyes for President ·96. Inc.• Alan

Keyes Committee and Other Authorized Committees. The Commission approved the

repon on January IS. 1998. As noted on page 6. the Commission may pursue an)' ofthe

maners discussed in an enforcement action.

In accordance with II CFR §§90JI.2(c)(l) and (d)(I). the Commission has made a

detennination that • repayment to the Secretary ofthe Treasury in the amount ofS84,736 is

required and notes the receipt ofthis repayment on December 2. 1997.

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

required. Commission regulations at II CFR §9038.2(c)(2) provide the Candidate with an

opponunit)· to submit in writing. within 60 calendar days afterservice ofthe Commission's

notice (March 19. 1991).lepI and factual materials to demonstrate that nO repayment. or".

lesser rep8)1Ilent. is required. Further. II CFR §9038.2(c)(2)(ii) permits a Candidate who

has submined wrinen materials to request an opponunity to address the C'ommission in

open session based on the legal and factual materials submined..

The Commission will consider an)" ,,"linen legal and factual materials submitted

within the 60 day period when deciding \\'hether to fe\ise the repayment determination.

Such materials ma)" be submined by counsel ifthe Candidate so elects. Ifthe Candidate

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

Bright-Coleman ofthe Office ofGeneral Counsel at (202) 2J9·3690 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 Repon was placed on the public record on

January IS. 1998. Should you have ....y questions rqardina the public release ofthis

report. please contact Ron Harris ofthe Commission's Press Office at (202) 219-4155.

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AIry questions you may have related to matters coven:d duriDa the audit or in the

audit report sbouId be directed to Joe Stoltz or Alex Boniewicz oftbe Audit Division at

(202) 219·3720 ortoll free at (800) 424-9530.

~- Assistant StaffDirector

Audit Division

Attachment as swed

Page 36
"t.. __""

FEDERAL ELECTION COMMISSION

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January IS. 1998

Mr. Alan Keyes

clo Mr. Dave Racer

Alan Keyes for President &96. Inc.

3585 Nonh Lexington Ave•• Suite 172

SL Paul. MN 55126

Dear Mr. Spiegel:

Anached please find the Audit Repon on Alan Keyes for President ·96. Inc.• Alan

Keves Committee and Other Authorized Committees. The Commission appro\'ed the

reion on JanuaJ')· IS. 1998. As noted on page 6. the Commission may pursue any ofthe

matters discussed in an enforcement action.

In accordance with II CFR §§9038.2(cXI) and (dXI). the Commission has made a

determination that a rcpa)1Ilent to the Secretary ofthe Treasury in the amount of$84.736 is

required and notes the receipt ofthis rcpa)'ment on December 2. 1997.

Should )'OU dispute the Commission's determination that a repayment is required.

Commission reaulations alii CFR §9038.2(c)(2) pro\'ide you with an opponunity to

submit in "Titing••ithin 60 calendar days aftersen'ice ofthe Commission's notice (MarCh

19. 1998). legal and factual materials to demonstrate that no repayment. or a lesser

rqJ8)~ent. is required. Further. II CFR §9038.2(cK2)(ii) permits a candidate who has

submitted "Tinen materials 10 request an opponunit)· to address the Commission in open

session based on the legal Mel fictual materials submitted.

The Commission \\ill consider an~' "Tinen legal and factual materials submitted

"ithin the 60 day period \\'hen deciding \\nether to revise the repayment determination.

Such materials ma)' be submined b)' counsel if)·OU so elect. If you decide to file a

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

Office ofGeneral Counsel at (202) 219·3690 or loll free at (800) 424·9530. If you do not

dispute this determination within the 60 cia)' period provided. it will be considered final.

The Commission 8ppI'Oved Audit Repon \\. placed on the public record on

JanWU)' IS. 1998. Should you have an)' questions rqarding the public release ofthis

repon. please contact Ron Harris ofthc Commission's Press Office at (202) 219-4155.

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ADy quesIions you may line related 10 matters coWled durina the audit orin the

audit report sbouId be cIirected 10 Joe 510hz or Alex Boniewicz ofthe Audit Division at

(202) 219-3720 ortoO heat (100) 424-9530.

Assistant S1afTDirector

Audit Division

Aaacbment.stated

Page 38

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CHRONOLOGY

ALAN KEYES FOR PRESIDENT '96, INC.

ALAN KEYES COMMIlTEE

AND

OTHER AUTHORIZED COMMIITEES

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Audit Fieldwork

Exit Conference Memorandum

to the Committee

Response Received to the

Exit Conference Memorandum

Audit Report Approved

Page 39

8/19/96 - 3/28197

9130197

IIf2SI97

1/15198
CJo7•o25•1

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...Df:re...D...... VlNlS).'..JC!i)·...D...D

Alln Keye. 'or Pr.,"'enl 'H,lne.

Autho,lzed CommlttH'

( )

A11chmen11

Committe. Date

Registered C.ty. State Treasu,er Tot.. Total Ending

Wth Receipts Disbursements C....• Commesseon

t Alabam. KI,n Committee 2"3198 Huntsvtle.Al AmeIi8 C Nsdom S 000 • 0.00 S 0.00

2 Alan K.,n for Presld.nt '•• • 12/12195 Colorado Sprengs. CO \Wtiam V Mote 000 0.00 0.00

Color.do

3 Alan K.,..for Pre,ldent 'M tl30198 C,escent Sprwtgl. KY John A Shelon t.t82 99 1.112.99 000

ec.nluc" Affiliate

• AI... Ke," 'or P'l.ldent 't', tit 1198 Greenville. NC 0...-C MoniS 1.11000 1.ltOOO 000

NCCommltt••

5 Alan Ie.,••'or P,..'dent .,. 1119196 Denton. TX J.... D Green 1.75000 1.75000 000

Northern , •••• Office

e Alan Ie.,..'or P'I.ldent • Iowa 12/15195 De. Moenes. IA Jonathan A Jackson 5.10108 5.101.08 000

7 ArilOfta '0' Alln Key•• 'I' 2/13196 Tucson. AZ Robert A Genie" 000 000 000

1 C.lllom',,,, for Keye. t129/96 Ventura. CA sandy PatriZio 43.518.13 43.518.13 0.00

9 Commltt.. 1o Elect AI.n Keye. 1112195 Fresno. CA Marian Mosley 8.19188 8.19188 000

Pr••tet.nt of the Untied St.'I.

10 Key., Campaign In IlIlnoll 2/13196 P.,k Ridge. It Eugene T Calter 3.50000 3.50000 000

- -- -_ ... --- ,\m""",, "trt dtltmtined "ilh infmmalinn I,ailahle "htn Ihf hank 'C'tnncili"Iinn, far Iht AUlhnr;1td (·nmm;lItt" "'ere Cnfl1r'tltcl. at "til M nur

It\ it" of diwkKurt ,tf'C'l1' and amtndtd reports flltd Ihroulh lerminalion.

P8ge1012
(S)'J...D...... U1r'\,)(S). 'J(s)-' ...D...D

AI.n k.,•• for Pre,"'.nl •••• Inc.

Authorl,.d CommIH.e.

Altechmenl1

,

Commtttft Dale

R~gtSI~'H Ctfy. Siale Treasurer Total Tolal Ending Wlh

Receipts Disbursements Cash Comme,seon

11M_,,'I"" for lCe,e. ',. 12/15195 Germantown. fAD Terry Turner 000 12 M•••ach...... for A"n Ke,•• 000 0.00

"'1198 ... MA P."ick lennon 000 t3 MIc.....n for Ie.,..'II 000 0.00 2122198 Ann Arbor. M. B..l Staker 000 ,. Mlnn••ota for ICe," 0.00 0.00 2/29198 RtChreeld. UN Thomas W Slrahan, S, 2,718 17 IS Hotthwft'em Stl'e. for K.y•• 2,71817 000 10/15195 Srools. OR 80nnee J Mabon

te Sou," Clro"n'.nl for Kt,t. '•• 34.954 55' 34.9~55 000

1"9196 '-,Iors. SC C.,or,n R Ree 1.61700 ' 7 South D,.ol.n. for AI.n Kt,t. '.1 1,69700 000 1130196 Seoul"ails. SO Gre'c_n A tfoffman 3.35044 3.35044 000 11 'e••nl for AI.nK','I for P',lld.nt 1/'.198 HouSlon. TX Christophe, T Kuhlman 8.784 11 '. 8,784.11 000

II Wllconl'n for A"n K.,•• to/Jtll5 Sheborglln. WI Meche..J Heinen 000 000 0.00 20 AI.n te.... ,or " ..IeI.nt'll .te.n... Never Flied Elbing. kS

Kut Poovey 8.01748 8.01748 000 ::::::::a :::::::=::a a==•• S122.57381 1122.57381 SO 00 ... -- . .. .. ==::=:::: :::::::::::: :=::: - - --- -_.. "

'hr aflua' 3lllnunl dt~ilrd inl.. Ihis cCIlIlmillu's bank KCooIII " .•, SU."I.77. 1••n""ml 'rrnnrd \\"1\ S)4.954 55 which inchlclrd 12,'9~ 7. in

'«coir!' IhaI ..rrr nl'l ck~ilrd in Ihr comminu's bank ICCnunt hul ..crt instrad WIlt 10 Ihr ''rilnlf)' Cnmmillrf.

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