FEDERAL ELECTION COMMISSION 

WASHINGTON, D.C. 20463 

November 14, 2008 

Mr. Ronald Gravino, Treasurer 

Tom Kean for U.S. Senate, Inc. 

P.O. Box 225 

Colonia, NJ 07067 

Dear Mr. Gravino: 

Attached, please find the Report of the Audit Division on Tom Kean for U.S. 

Senate, Inc. The Commission approved this report on November 6, 2008. 

The Commission approved Final Audit Report will be placed on the public record 

on November 21,2008. Should you have any questions regarding the public release of 

this report, please contact the Commission's Press Office at (202) 694-1220. 

Any questions you may have related to matters covered during the audit or in the 

report should be directed to Scott Dotzler or Marty Favin of the Audit Division at (202) 

694-1200 or toll free at (800) 424-9530. 

Sincerely, 

X~Cf~

Wanda J. Thomas 

Acting Assistant Staff Director 

Audit Division 

Attachment as stated 
Why the Audit 

Was Done 

Federal law permits the 

Commission to conduct 

audits and field 

investigations of any 

political committee that is 

required to file reports 

under the Federal 

Election Campaign Act 

(the Act). The 

Commission generally 

conducts such audits 

when a committee 

appears not to have met 

the threshold 

requirements for 

substantial compliance 

with the Act. I The audit 

determines whether the 

committee complied with 

the limitations, 

prohibitions and 

disclosure requirements 

of the Act. 

Future Action 

The Commission may 

initiate an enforcement 

action, at a later time, 

with respect to any of the 

matters discussed in this 

report. 

2 U.S.c. §438(b). 

Report of the 

Audit Division on 

Tom Kean for U.S. Senate, Inc. 

April 1, 2005 - December 31, 2006 

About the Campaign (p. 2) 

Tom Kean for U.S. Senate, Inc. (TKFS) is the principal campaign 

committee for Tom Kean, Republican candidate for the United 

States Senate from the state ofNew Jersey. TKFS maintains its 

headquarters in Colonia, New Jersey. For more information, see 

chart on the Campaign Organization, p. 2. 

Financial Activity (p. 2) 

• Receipts 

o From Individuals $ 5,599,272 

o From Political Committees 1,270,892 

o Loans from the Candidate 400,000 

o Transfers from Affiliates 532,690 

o Offsets to Operating Expenditures 45,743 

o Other Receipts 12,910 

o Total Receipts $7,861,507 

• Disbursements 

o Operating Expenditures $ 7,437,300 

o Loan Repayments 200,000 

o Transfers to Affiliates 43,928 

o Contribution Refunds 61,665 

o Total Disbursements $7,742,893 

Finding and Recommendation (p. 3) 

• Disclosure of Memo Entries from Joint Fundraising Activity 

I 
1 

Table of Contents 

Page 

Part I. Background 

Authority for Audit 1
 

Scope of Audit 

Part II. Overview of Campaign 

Campaign Organization 

Overview of Financial Activity 

Part III. Summary 

2

2
 

Finding and Recommendation 3 

Part IV. Finding and Recommendation 

Disclosure of Memo Entries from Joint Fundraising Activity 4 
Part I 

Background 

Authority for Audit 

This report is based on an audit of Tom Kean for U.S. Senate, Inc. (TKFS), undertaken 

by the Audit Division of the Federal Election Commission (the Commission) in 

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

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

Commission to conduct audits and field investigations of any political committee that is 

required to file a report under 2 U.S.c. §434. Prior to conducting any audit under this 

subsection, the Commission must perform an internal review of reports filed by selected 

committees to determine if the reports filed by a particular committee meet the threshold 

requirements for substantial compliance with the Act. 2 U.S.c. §438(b). 

Scope of Audit 

Following Commission approved procedures, the Audit staff evaluated various factors 

and as a result, this audit examined: 

1. The receipt of excessive contributions and loans. 

2. The receipt of contributions from prohibited sources. 

3. The disclosure of contributions received. 

4. The consistency between reported figures and bank records. 

5. The completeness of receipts records. 

6. Other committee operations necessary to the review. 
2 

Part II 

Overview of Campaign 

Campaign Organization 

Important Dates Tom Kean for U.S. Senate, Inc. 

• Date of Registration March 23, 2005 

• Audit Coverage April 1, 2005 - December 31, 2006 

Headquarters Colonia, NJ 

Bank Information 

• Bank Depositories 1 

• Bank Accounts 2 Checking, 2 Investment Accounts 

Treasurer 

• Treasurer When Audit Was Conducted Ron Gravino 

• Treasurer During Period Covered by Audit Ron Gravino 

Management Information 

• Attended FEC Campaign Finance Seminar Yes 

• Used Commonly Available Campaign 

Management Software Package 

Yes 

•	 Who Handled Accounting and Recordkeeping Ron Gravino and Jennifer D'Autrechy 

Tasks 

Overview of Financial Activity 

(Audited Amounts) 

Cash on hand April 1,2005 $0 

0 Receipts From Individuals 5,599,272 

0 Receipts From Political Committees 1,270,892 

0 Loans from the Candidate 400,000 

0 Transfers from Affiliates 532,690 

0 Offsets to Operating Expenditures 45,743 

0 Other Receipts 12,910 

Total Receipts $ 7,861,507 

0 Operating Expenditures 7,437,300 

0 Loan Repayments 200,000 

0 Transfers to Affiliates 43,928 

0 Contribution Refunds 61,665 

Total Disbursements $ 7,742,893 

Cash on hand @ December 31, 2006 $ 118,614 
3 

Part III 

Summary 

Finding and Recommendation 

Disclosure of Memo Entries from Joint Fundraising Activity 

TKFS reported $442,981 as its share of net proceeds from three joint fundraisers but did 

not file memo Schedules A (Itemized Receipts) itemizing 217 contributions totaling 

$187,050. The Audit staffrecommended that TKFS file amended reports to correctly 

disclose these receipts as memo entries. In response to the interim audit report, TKFS 

filed the missing memo Schedules A. (For more detail, see page 4) 
4 

Part IV
 

Finding and Recommendation
 

I Disclosure of Memo Entries from Joint Fundraising Activity 

Summary 

TKFS reported $442,981 as its share of net proceeds from three joint fundraisers but did 

not file memo Schedules A (Itemized Receipts) itemizing 217 contributions totaling 

$187,050. The Audit staff recommended that TKFS file amended reports to correctly 

disclose these receipts as memo entries. In response to the interim audit report, TKFS 

filed the missing memo Schedules A. 

Legal Standard 

Itemization of Contributions from Joint Fundraising Efforts. Participating political 

committees must report joint fundraising proceeds in accordance with 11 CFR 

102.17(c)(8) when such funds are received from the fundraising representative. 11 CFR 

§102.17(c)(3)(iii). 

Each participating political committee reports its share of the net proceeds as a transfer-in 

from the fundraising representative and must also file a memo Schedule A (Itemized 

Receipts) itemizing its share of gross receipts as contributions from the original 

contributors to the extent required under 11 CFR 104.3(a). 11 CFR §102.17(c)(8)(i)(B). 

Facts and Analysis 

TKFS participated in six joint fundraisers. It received and reported net proceeds of
 

$532,690 from these joint fundraising efforts. However, for three of these fundraisers
 

from which TKFS received $442,981,2 it failed to disclose as memo entries on Schedules
 

A the identity of 217 contributors who gave $187,050. The required information was
 

contained in the TKFS contributions database. Most of the missing memo entries
 

occurred in the 2006 Pre-General and Post-General reporting periods.
 

At the exit conference, the Audit staff discussed this matter with TKFS representatives,
 

who offered no explanation.
 

Interim Audit Report Recommendation and Committee Response 

The Audit staff recommended that, TKFS file amended reports to correctly disclose these
 

receipts as memo entries. In response to the interim audit report, TKFS filed the missing
 

memo Schedules A.
 

2	 The shares of proceeds were as follows: $306,628 from the 2006 Kean Majority Committee; $103,903
 

from the 2006 Open Seat and Challenger Fund; and, $32,450 from the 2006 Finish Line.