Draft Final Audit Report of the 

Audit Division on the Joe Walsh 

for Congress Committee, Inc. 

(January 1, 2011 - December 31, 2012) •% 

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Draft Final Audit Report of the 

Audit Division on the Joe Walsh 

for Congress Committee, Inc. 

(Januaiy 1, 2011 - December 31, 2012) 

Why the Audit 

Was Done 

Federal law permits the 

Commission to conduct 

audits and field 

investigations of any 

political committee that is 

required to file reports 

under the Federal 

Election Campaign Act 

(the Act). The 

Commission generally 

conducts such audits 

when a committee . 

appears not to ' 

the threshold 

requirements for 

substantial. conmlianc^Siiij. 

dett^i|lhes whethelt^iB. 

cor^|ttee complied wilh.^ 

Ae li^%)^pns, ' 

prohibitioi 

disclosure i irements 

of the Act. 

Future 

The Commission may 

initiate an enforcement 

action, at a later time, 

with respect to any of the 

matters discussed in this 

report. 

About the Cam 

Joe Walsh for Congresj 

campaign commii 

U. S. House of 

(p. 2) 

iittee, Inc. is the principal 

Walsh, Republican candidate for the 

i:from the state of Illinois, 8th 

District, and ia;p^quartered Zurich, Illinois. For more 

information.-.^|;^he Campaign Oi^kj^ization Chart, p. 2. 

Individuals 

ilitical 

its 

Expenditures 

lents^ 

Refunds 

sbursements 

ital Disbursements 

$ 1,321,815 

662,810 

26,455 

S 2,011,080 

$ 1,858,014 

13,400 

22,650 

114,350 

S 2,008,414 

Findings and Recommendations (p. 3) 

Disclosure of Occupation/Name of Employer (Finding 1) 

Receipt of Contributions in Excess of the Limit (Finding 2) 

' 2 U.S.C. §438(b). 

^ These repayments were for loans from the previous election cycle. 
Table of Contents 

Page 

Part I. Background 

Authority for Audit 

Scope of Audit 

Part II. Overview of Campaign 

Campaign Organization 

Overview of Financial Activity 

2 

2 

Part III. Summaries 

Findings and Recommendations 

w 

-w-. 

Part IV. Findings and Recoim^endations 

Finding I. Disclosure of Occupation/Na^i|^^EmplQ^. 

Finding 2. Receipt of Contri|^^tions in Exces%\ . 'c pfMit 

fe-'f:-.. 

w 

•%: 4 

. 5 
Parti 

Background 

Authority for Audit 

This report is based on an audit of the Joe Walsh for Congress Committee, Inc. (JWFC), 

undert^en by the Audit Division of the Federal Election Commission (the Commission) 

in accordance with the Federal Election Campaign Act of 1971, as amended (the Act). 

The Audit Division conducted the audit pursuant to 2 U.S.C. §438(b), which permits the 

Commission to conduct audits and field investigations of ji^^olitical committee that is 

required to file a report under 2 U.S.C. §434. Prior to ^^d&cting any audit under this 

subsection, the Commission must perform an intern|j|i^% of reports filed by selected 

committees to determine if the reports filed by a p^i^ular'=i^ 

requirements for substantial compliance witli iliv /\ct. 2 U.S:i 

ittee meet the threshold 

?s^). . 

Scope of Audit 

Following Commission-approved procedures, i-ic Audit st 

factors and as a result, this audit examined: 

1. the receipt of excessive com 

2. the receipt of contributions 

3. the disclosure of contributions 

4. the disclosure of individual 

5. 

6. thecompli 

7. other commii 

the consistency hpj^i^^^ported 

ious risk 

of employer; 
Part II 

Overview of Campaign 

Campaign Organization 

Important Dates 

Date of Registration January 

Audit Coverage 

Headquarters 

Januaryd^^pn 1 - December 31,2012 

Bank Information Vi' 

SiJL 

Bank Depositories 

Bank Accounts ;^me (six checkin^i^iid^three savings) 

Treasurer 

Treasurer When Audit Was Conducted 

• Treasurer During Period Covere.: A-dit 

Management Information ^ 

• Attended Commission Campaig .!^ 

Seminar 

Who Handled Accoijffl^^;;9nd 

Recordkeeping '% w OviSfview of FiUi^cial Activity 

Cash-iiii-lia^ @ January =1^2011 

Receipts s^SWr-H. 

o ContributioM<fix>m Individi 

o Contributions i^ia.Politica^ii^onimittees 

o Other Receipts 

Total Receipts 

Disbursements 

o Operating Expenditures 

o Loan Repayments 

o Contribution Refunds 

o Other Disbursements 

Total Disbursements 

Cash-on-hand @ December 31,2012 

$ 21,891 

1,321,815 

662,810 

26,455 

$ 2,011,080 

1,858,014 

13,400 

22,650 

114,350 

$ 2,008,414 

S 24,557 
Part III 

Summaries 

Findings and Recommendations 

Finding 1. Disclosure of Occupation/Name of Employer 

A review of all contributions from individuals requiring itemization indicated that 285 

contributions totaling $334,146 lacked disclosure of occup,^|n/name of employer. 

Furthermore, "best efforts" to obtain, maintain and sub^'^^formation had not been 

sufficiently documented for these contributions. submit a response to the 

Interim Audit Report. (For more details, see p. 4.vW ' 

41# Finding 2. Receipt cf Cont^^'lons In of the Limit 

During audit fieldwork, the Audit staff re'^^|^d contributions froni''ii|i^yiduals to 

determine if any contributions exceeded the This ngyiew indicat^jilbat JWFC 

received apparent excessive contributions frorn^ 

errors occurred as a result of 

by forwarding a presumptive lei 

manner. JWFC did not submit a 

(For more details, see p. S.) 

s totaling $92^1^. These 

fssive portions of o^tributions 

ig a refund in a timely 

Report. 
Part IV 

Findings and Recommendations 

I Finding 1. Disclosure of Occupation/Name of Employer 

Summary 

A review of all contributions from individuals requiring itemization indicated that 285 

contributions totaling $334,146 lacked disclosure of occ 

Furthermore, "best efforts" to obtain, maintain and sul 

sufficiently documented for these contributions. 

Interim Audit Report. 

Legal Standard 

A. Itemization Required for Contributio!; 

candidate committee must itemize anj' 

$200 per election cycle, either by itself oi 

lim Individuals. ^ 

ribution from an indr 

. combined with othi 

from the same contributor. 2 U.S.C. §434(b 

B. Required Information for 

contribution from an individi 

information: 

• the contril 

• the con|^i|j|i^6r's 6dg||^ation 

• the date 'lllTOeipt (tll£|ate the 

• the amount bf-^e con 

name anSSgiddress 

wion/name of employer, 

on had not been 

it submit a response to the 

ithorized 

if it exceeds 

itributions 

Ibjil^pns from 

must 

iduals. For each itemized 

iyide the following 

idar ye 

C. llivMirEfforts Ensui 

: the comnS 

information^ 

be conside ^d. in compli 

:On;aiid%. 

all ' 

!L) and' 

ziiy:qeide); 

ie 01 mS50!|[^er employer; 

received'frie contribution); 

ibutions from the same individual. 

:500.12 and 104.3(a)(4)(i). 

impli'a^e.^. When the treasurer of a political committee 

used'H^Mefforts (see below) to obtain, maintain, and 

Act, the committee's reports and records will 

with the Act. 2 U.S.C. § 432(i) and 11 CFR § 104.7(a). 

D. Definition of The treasurer and the committee will be considered to 

have used "best the committee satisfied all of the following criteria. 

• All written solicitations for contributions included: 

o a clear request for the contributor's full name, mailing address, occupation, 

and name of employer; and 

o the statement that such reporting is required by Federal law. 

• Within 30 days of receipt of the contribution, the treasurer made at least one 

effort to obtain the missing information, in either a written request or a 

documented oral request. 

• The treasurer reported any contributor information that, although not initially 

provided by the contributor, was obtained in a follow-up communication or was 
contained in the committee's records or in prior reports that the committee filed 

during the same two-year election cycle. 11 CFR § 104.7(b). 

Facts and Analysis 

A. Facts 

A review of all itemized contributions from individuals indicated that 28S contributions 

totaling $334,146, or 29 percent of the dollar value of individual contributions required to 

be itemized by JWFC, lacked disclosure of occupation/name of employer. Most of the 

contributor entries with missing information were either diseased with the notation "Info 

Requested" or left blank on the Schedules A (Itemized X.-ccps) filed with the 

Coiiunission. •J 

During audit fieldwork, the Audit staff reviewe(j[.j];H^^-«;.-^juments provided by 

JWFC to determine if it had utilized "best effi^'i^io obtain, nm^^n and submit the 

missing information. A JWFC representafif|:explained that the lisiqf contributors to 

whom the follow-up letters requesting the 6qQupation/name of empld$^: information 

were sent, was maintained electronically. ThSigst was it 

of JWFC's computers "crashed.''..:JHowever, 

received from the contributors 

employer information. The Audit 

determined that JWFC maintained i 

106 contributions totaling $111,860. 

information, as: 

"best efforts." 

nded to it^^ 

Ithei 

indivic 

B. Interim Audit 

lended i 

^itDivisioi 

Closure..] 

'If 

fitly de^l^^ed when one 

[ a physical r||;r;for letters it 

: for occupation/n^e of 

ble follow-up letters and 

;^.who made, in aggregate, 

: submit that 

1 thSiilfore did not establish 

mmendation 

is matter with the JWFC representative 

^ occupation/name of employer 

disclosedi'iiilphe JWFC representative agreed to amend 

disclose'l^pissm^l^o 

The InteriSi||udit Report imenilH that JWFC establish "best efforts" by amending 

its reports tc^mijclose the m g information relating to the 106 contributions. 

C. Committee Ri^sjf^ps, 

JWFC did not submit^^f^ 

filed. The Audit staff 

unsuccessful. 

:n ilie Interim Audit Report 

the Interim Audit Report, nor were amended reports 

several attempts to contact the JWFC representative but was 

Finding 2. Receipt of Contributions in Excess of the Limit 

Summary 

During audit fieldwork, the Audit staff reviewed contributions from individuals to 

determine if any contributions exceeded the limit. This review indicated that JWFC 
received apparent excessive contributions from 29 individuals totaling $92,325. These 

errors occurred as a result of JWFC not resolving the excessive portions of contributions 

by forwarding a presumptive letter to the contributor or issuing a refund in a timely 

manner. JWFC did not submit a response to the Interim Audit Report. 

Legal Standard 

A. Authorized Committee Limits. For the 2012 election, an authorized committee may 

not receive more than a total of $2,500 per election from any one person or $5,000 

per election from a multicandidate political committee. 2 U.S.C. §441a(a)(l)(A), 

(2XA) and (f); 11 CFR §§110.1(a) and (b) and 110.9(a) 

B. Handling Contributions That Appear Excessiv; 

contribution that appears to be excessive, the 

• Return the questionable check to the doj 

• Deposit the check into its federal acQg1^>^d: 

" Keep enough money in the;:a 

" Keep a written record explai: 

• Include this explanation on S 

itemized ; - .i- . > - j- '• 

• Seek a re.:' •: PF.: •• .• 

the instructions prd^(|iii;%ithe Coi 

explanations of reat^^tioi 

" If the c^j^ittee does n|t:irecei' 

withji^'^&^^S{^r recdiji 

iilt-to the do 

C. JoiafeCionMbutioniii^i 

! by 

i-'bheck, moti'i 

jo!^.!contribution 

themds should be divided di: 

L committee receives a 

lUst either; 

ipunt to cover all pofemji^ refunds; 

why the contributioiif^^|^ be illegal; 

e A itthb: contribution!^ to be 

c excessive portion, following 

regulations (see below for 

;and 

ution or redesignation 

con1^t>ution, refund the 

.3(b)(3), (4) and (5) and 

,by more than one person (except for a 

the signature of each contributor on 

^Instrument or in a separate writing. A 

ly to each donor unless a statement indicates that 

y. 11 CFR§110.1(k)(l)and(2). 

D. Reattribiii^i^!^ of Exces|[lj|p Contributions. The Commission regulations permit 

committees donoj^^^iif excessive contributions (or contributions that exceed the 

committee's neif|^^ts^]|^taiuling) whether they had intended their contribution to be 

a joint contributidrnlip^'more than one person and whether they would like to 

reattribute the excess'iimount to the other contributor. The committee must inform 

the contributor that: 

• The reattribution must be signed by both contributors; 

• The reattribution must be received by the committee within 60 days after the 

committee received the original contribution; and 

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

§110.1(k)(3). 

Within 60 days after receiving the excessive contribution, the committee must either 

receive the proper reattribution or refund the excessive portion to the donor. 11 CFR 
§§l03.3(b)(3) and 1 l0.1(k)(3)(ii)(B). Further, a political committee must retain 

written records concerning the reattribution in order for it to be effective. 11 CFR 

§110.1(1X5). 

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

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

attributed among the individuals listed unless instructed otherwise by the 

contributor(s). The committee must inform each contributor: 

• How the contribution was attributed; and 

• The contributor may instead request a refund (- -J t^^ssive amount. 11 CFR 

§110.1(k)(3XB). P" 

E. Redesignation of Excessive Contributions. ;^'cr ^t^Aorized candidate 

committee receives an excessive contributi9|!j|(oM conl^^on that exceeds the 

committee's net debts outstanding), the ctjp^ittee may ask^^i^jontributor to 

redesignate the excess portion of the coj^^ution for use in ai^ieg: election. The 

committee must inform the contributof-'i^;^ 

• The redesignation must be signed by ^i^^^ontribi 

• The redesignation must b^ceived by tli&^ 

committee received the i 

The contributor may instes 

§110.1(b)(5). 

ntributiot 

i.refund ot 

1 within 60 da: 

.-xcessive amount. 11 CFR 

i-yt? 

Within 60 day^^p^^c v g the 

receive the p^'» redesi.; tiiion or re: 

§§103.3(b)(3)'%;110.1.-"..i(ii)(A), 

written records J- . .... " sU i 

§ 

committee must either 

i'excessi'v^il^ortion to the donor. 11 CFR 

, a political committee must retain 

order for it to be effective. 11 CFR 

cessive '^hW to a candidate's authorized 

mnptively redesignate the excessive portion to the 

1 an indiviL^^^^ 

... pittee, the carn]|^|j!^ may 

genCM-election if the'-i^|ntribij 

• Is nil^before that ^||;ididate's'primary election; 

• Is not a||^ated in ^ting for a particular election; 

• Would b^%i^|:ssiy^^!^ated as a primary election contribution; and 

• As redesignat^.^6e§mot cause the contributor to exceed any other contribution 

limit. 11 CFR§fi?mi(b)(5)(ii)(B)(l)-(4). 

The committee is required to notify the contributor of the redesignation within 60 

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

option to receive a refund instead. 
Facts and Analysis 

A. Facts 

During audit fieldiwork, the Audit staff identified 29 individuals vdth apparent excessive 

contributions totaling $92,325. 

JWFC resolved $11,000 of the excessive contributions by sending presumptive 

reattributions and/or redesignations letters that were untimely. An additional excessive 

total of $60,125 could still be resolved, albeit untimely, via presumptive leattribution or 

ledesignation letters being sent to the contributors. The remaining excessive 

contributions totaling $21,200 appear resolvable only by refund to the contributors or 

disgorgement to the U.S. Treasury. 

B. Interim Audit Report & Audit Divbion Recommendation 

The Audit staff informed the JWFC representative of this matter at tiie exit conference. 

The Audit staff provided schedules of the apparent excessive contributions along with the 

necessary actions to resolve them. The rqnesentative stated that she planned to review 

all excessive contributions and obtain tiie necessary documents. She also mentioned that 

she would contact the JWFC employees to inquire about the records and reasons the 

excessive contributions occurred. 

Subsequent to the exit conference, the JWFC representative informed die Audit staff that, 

upon tte receipt of the Interim Audit Report, the excessive contributions resolvable only 

by refund to the contributors ($21,200) would be disclosed on JWFC's Schedule D 

(Debts and Obligations) since JWFC has no funds available to make such refunds. In 

addition, the JWFC representative provided a list of contributors, along with their 

addresses, to vdiom presumptive reattribution or redesignation letters were going to be 

sent. 

The Interim Audit Report recommended that JWFC provide evidence that demonstrated 

that the contributions totaling $92,325 were not excessive or that they were timely 

resolved. Absent such evidence, JWFC should have resolved tiiese iq^arent excessive 

contributions by either (1) sending notices for those contributions that were eligible for 

presumptive re^ignation/reatlribution letters, informing contributors about how the 

excessive portion of their ctndributions was resolved and offering a refund, (2) refimding 

the excessive portion of each contribution that was not eligible for presumptive 

redesigoation/reattribiition letters or making a payment to the U.S. Treasury and 

providing documentation or, (3) disclosing the contributions lequiring refund on 

Schedule D if funds were not available to make tire necessary refunds. 

C. Committee Response to the Interim Audit Report 

JWFC did not submit a response to the Interim Audit Report, nor were amended reports 

filed. The Audit staff made several attempts to contact tite JWFC representative but was 

unsuccessful.