Draft Final Audit Report of the 

Audit Division on the Nebraska 

Democratic Party 

(January 1, 2009 - December 31, 2010) 

Why the Audit Was 

Done 

Federal law permits the 

Commission to conduct 

audits and field 

investigations of any 

political committee that is 

required to file reports under 

the Federal Election 

Campaign Act (the Act). 

The Commission generally 

conducts such audits when a 

committee appears not to 

have met the threshold 

requirements for substantial 

compliance with the Act.' -« 

The audit determines 4 

whether the committee 

complied with the 

limitations, prohi^i 

disclosure req^rements of 

the Act. 

Future Actio' 

The Commission may 

initiate an enforcement 

action, at a later time, with a, 

respect to any of the matters 

discussed in this report. 

About the Committee (p^ 

The Nebraska Democratic Party i§|^ e ^arty committee 

headquartered in Lincoln, Nebrask^ r more information, see the 

chart on the Committer Orgati^atior 

Financial Acti 

• Receipts 

o Contributions 

o Contributions 

o Tr^fers from A 

o Tr^fere from Non-; 

o Othi 

Total Receipi 

Accounts 

r 

penditur 

itures 

Activity 

iliates 

CoordinSSEd Expenditures 

dependent Expenditures 

T Disbursements 

Disbursements 

dings and Recommendations (p. 3) 

Recordkeeping for Employees (Finding 1) 

Reporting of Debts and Obligations (Finding 2) 

Excessive Coordinated Party Expenditures (Finding 3) 

$ 218,270 

24,202 

1,682,699 

344,901 

185,066 

S 2,455,138 

$ 540,126 

129,323 

1,490,477 

138,967 

114,788 

12,475 

35,174 

$ 2,461,330 

'.2U.S.C. §438{b). 
Draft Final Audit Report of 

the Audit Division on the 

Nebraska Democratic Party 

(January 1, 2009 - December 31, 2010) 
Table of Contents 

Page 

Part I. Background 

Authority for Audit 

Scope of Audit 

Commission Guidance 

Part II. Overview of Committee 

Committee Organization 

Overview of Financial Activity 

Part III. Summaries 

Findings and Recommendations 

Part IV. Findings and Recom 

Finding 1. Recordkeeping for Employees 

Finding 2. Reporting of Debts an^bligations ^ 

Findings. ExcessiveCoordinated^l'.iii> 1 \penditure^ 
Parti 

Background 

Authority for Audit 

This report is based on an audit of the Nebraska Democratic Party^ G^DP), 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 pc^jj^ilsal committee that is 

required to file a report under 2 U.S.C. §434. Prior to conduc 

subsection, the Commission must perform an internal revie 

committees to determine whether the reports filed by a j 

threshold requirements for substantial compliance wU 

Scope of Audit 

Following Commission-approved procedure: 

factors and as a result, this audit examined: 

1. the disclosure of individual contributors' occupatT 

2. the disclosure of disbursements, dete&and obligatioi 

3. the disclosure of expenses allocateicffl^^pn federal ahl 

4. the consistency between reported figwesaro^Mk record 

5. the disclosure of independent and cooEdinatei^^^ditUFes: 

6. the completeness of rg^^s: and 

7. other committee e@«ytior^®cessary to the review. 

iudit under this 

irts filed by selected 

ittee meet the 

. §438(b). 

ivaluated varij^^isk 

d name of employer; 

Jeral accounts; 

Commission Guidam 

Request 

Purs^^o the "Polic 

of EegMMuestions by tHI 

question n^d during the1 

under 11 CFl^l06.7(d)(l 

Consideration of a Legal Question 

smen^^s^lishing a Program for Requesting Consideration 

pmmi^on," NDP requested early consideration of a legal 

lit. >^P questioned whether the monthly time logs required 

applied to employees paid with 100 percent federal funds. 

The Commission cl^elujgld, by a vote of S-1, that 11 CFR § 106.7(d)(1) does require 

committees to keep ^^nthly log for employees paid exclusively with federal funds. 

Exercising its prosemorial discretion, however, the Commission decided it will not 

pursue recordkeeping violations for the failure to keep time logs or to provide affidavits 

to account for employee salaries paid with 100 percent federal funds and reported as 

such. The Audit staff informed NDP Counsel of the Commission's decision on NDP's 

request. This audit report does not include any finding or recommendation with respect 

to NDP's employees paid with 100 percent federal funds and reported as such. 

' The committee's name during the audit period was the Nebraska Democratic State Central Committee 

and was changed subsequently on April 4,2012. 
Part II 

Overview of Committee 

Committee Organization 

Important Dates 

• Date of Registration Decembers, 197S 

• Audit Coverage January 1,2009 - Qgcember 31,2010 

Headquarters Lincoln, Nebrask#®®V 

Bank Information 

• Bank Depositories One 

• Bank Accounts Five and T^^on-federal 

Treasurer 

• Treasurer When Audit Was Conducted j^jbrry Finnbgan 

• Treasurer During Period Covered by Audit Cj^^innp^ jF 

Management Information 

• Attended Commission Campaign Finan^ 

Seminar 

Tasks 

of 

kudlted 

nciaP^ctivity 

If 1 

Cash-on-hand ® January 1^^^9!PI9 JHfeSgaan.. £ r $ 63,195 

Receipts jasgsgsafsax^. 

o ContributidJ^rorS'^Mduais'^^ " 218,270 

o ContribMons from Po!l!i^l|CommTt®es ^ 24,202 

o TranlilS^fem Affiliates "'SiF 1,682,699 

o Transfers"^j^,.Non-federa! ^^ounts^ 344,901 

o Other Receidi^fk 185,066 

Totai Receipts ^ S 2,455,138 

Disbursements 

o Operating Expendituf^^ 540,126. 

o Other Federal Expenditures 129,323 

o Federal Election Activity 1,490,477 

o Transfers to Affiliates 138,967 

o Coordinated Expenditures 114,788 

o Independent Expenditures 12,475 . 

o Other Disbursements 35,174 

Total Disbursements S 2,461,330 

Cash-on-hand @ December 31,2010 5 57,003 
Part III 

Summaries 

Findings and Recommendations 

Finding 1. Recordkeeping for Employees 

During audit fieidwork, the Audit staff noted that NOP did not maintain any monthly 

payroll logs, as required, to document the percentage of time 

federal election activity. For 2009 and 2010, the Audit staff 

employees totaling $300,708^ for which payroll logs wei 

consisted of payroll which was allocated between f< 

payroll paid exclusively with non-federal funds. ^ 

In response to the Interim Audit Report recomga^ation,; 

established procedures to maintain contempofl^^s^doci 

records for employees paid exclusively with non-f 

federal and non-federal funds. 

(For more detail, see p. S.) 

Finding 2. Reporting of 

During audit fieidwork, the Audit staff ndi 

debts and obligations to.t^l^A20,447 

documentation dem 

Schedule D (Del 

debts properly. Inresj 

amended 

(For mor|^Silii?ll^^6.) 

loyee spent on 

payments to NDP 

intained. This amount 

leral funds and 

P stated 

its to certify ^^ayroll 

isSr with an al^cation of 

ions 

illed to correctly disclose 

[udit sta^tfcommended that, absent 

»e expd^itures did not require reporting on 

NDP am^^ts disclosure reports to disclose these 

Audi^^port recommendation, NDP filed 

Its and obligations. 

Exces^ve ^ordinated Party Expenditures 

During a^^eldwork, th^^udit naff identified coordinated party expenditures made by 

NDP for a Homi|c;andidat^at appeared to exceed the 2010 coordinated party 

expenditure lirmtatimi by^4,789. 

In response to the In^im Audit Report recommendation, NDP provided statements and 

documents to support its contention that two expenditures totaling $5,174 should not be 

considered excessive coordinated party expenditures. In addition, NDP acknowledged 

that it received spending authority of only $80,000 from the Democratic Congressional 

Campaign Committee (DCCC) prior to making expenditures on behalf of the House 

candidate. NDP provided a letter from DCCC in which DCCC further ceded, albeit 

' This total does not include payroll for employees paid with 100 percent federal funds and reported as 

such (see Part I, Background, Commission Guidance, Request for Early Commission Consideration of a 

Legal Question, page 1). 
untimely, $6,600 to NDP in 2012. NDP argues that this amount remains available under 

the spending authority and therefore should reduce the amount of excessive expenditures. 

In its response, NDP .also acknowledged that it incorrectly reported expenses for GOTV 

("Get Out the Vote) calls totaling $29,61 S due to a miscommunication with the candidate 

campaign. NDP materially amended its disclosure reports and included these 

expenditures on Schedule F (Coordinated Party Expenditures). 

After considering the Interim Audit Report response, the Audit staff recalculated the 

excessive coordinated expenditures to be $29,615. The revised figure adjusts for $4,596 

which NDP claims as exempt under the volunteer materials exe^pmri and $578 for a 

window sign that NDP indicated was not intended as a publjg^mmunication. 

(For more detail, see p. 8.) 

y 
Partrv 

Findings and Recommendations 

I Finding 1. Recordkeeping for Employees | 

Summary 

During audit fieldwork, the Audit staff noted that NDP did not maintain any monthly 

payroll logs, as required, to document the percentage of time each pmployee spent on 

federal election activity. For 2009 and 2010, the Audit staff identified, payments to NDP 

employees totaling $300,708^ for which payroll logs were nqt'rhaintained. This amount 

consisted of payroll which was allocated between federal a|^'^hpn7&^ funds and 

payroll paid exclusively with non-federal funds. <^1 

In response to the Interim Audit Report recomme.njaation,''NDP stated^f^fe^ has 

established procedures to maintain contemporar^^us documents to certif 

records for employees paid exclusively with fib^i|d,qral fuhds or with an a! 

federal and non-federal funds. 

Legal Standard 

Maintenance of Monthly Logs. Party\cpmn^ittges must keep'^.t|pt>nthly log of the 

percentage of time each employee spendisMrTicb^i^Gfm^^ with ^federal election. 

Allocations of salaries, wages, and fringe qenefitt'aifettai^^ as follows: 

• employees whG^.s^nd.2^ or less d^their compdnTsated time in a given month on 

federal electjpi^ctivities'must be paidjlfither from the federal account or be 

allocated aslad^inistratiyp costs. 

• employees who spend more than 2S% o]p>their compensated time in a given month 

on federial. election activities must^e^p^^^^ only from a federal account; and, 

• emifjibyees'wn^^ of their compensated time in a given month on federal 

Selection activitibsvinay bb paid entirely with funds that comply with state law. 11 

'•"•'•CFR§106.7(d)(i)!j-, V,'' 

Facts and Anal3rsis 

A. Facts 

During fieldwork, the]:Audit staff reviewed disbursements NDP made to employees for 

payroll, totaling $300,708^, for which monthly logs were not provided to document the 

percentage of time the employee spent in connection with federal election activity. These 

logs are required to document proper allocation of federal and non-federal funds used to 

pay these workers. The total of $300,708 consisted of $282,882 for which payroll was 

* This total does not include payroll for employees paid with 100 percent federal iiinds and reported as 

such (see Part 1, Background, Commission Guidance, request for Early Commission Consideration of a 

Legal Question, page 1). 

^ Payroll is stated net of taxes. 
allocated between federal and non-federal funds and $17,826 that was paid exclusively 

with non-federal funds.^ Of the $17,826, NDP paid $14,184 to 32 employees that were 

not reported on either Schedule H4 or Schedule B during the audit period. The remaining 

two individuals were reported as receiving salary payments on either Schedules H4 or 

Schedule B during the report period. 

As part of fieldwork, the Audit staff provided NDP with a schedule of employees with an 

allocation of federal and non-federal funds for which a log was required. An NDP 

representative completed this schedule by inserting the percentage of time each employee 

spent in connection with federal election activity and provided a sjgned affidavit in which 

a NDP representative attested to the accuracy of the informati^p^ided. 

le with NDP 

ad provided 

explained th^l^cause NDP 

lit notificaticiir^M/but 

luded in the P»rim Audit 

B. Interim Audit Report & Audit Division Recommei 

At the exit conference, the Audit staff discussed the 

representatives. They asked whether the schedule 

would resolve the recordkeeping finding. The 

did not create and maintain these documents 

instead prepared them during fieldwork, the (ssui 

Report. 

For NDP employees that were paid ( 

allocation of federal and non-federal ful 

NDP provide and implement a plan to 

percentage of time each employee spends 1 

1 funds or with an 

recommended that 

payi^n logs to track the 

activity. 

C. Committee Resp^se to" 

In response to the^Tn^m Audi! 

already provided the dc 

federal clec^n^^^ty, if 

payroll aciivm^^^^kfutur 

Findi 

rim Audit "Import 

sport recomi|4nj^ation, NDP stated that, while it has 

sflecting l^v much time employees spent on 

such records contemporaneously with 

le Audit^ff considers this matter resolved. 

Debts and Obligations 

.Summary 

During audit field^T^^^e Audit staff noted that NDP had failed to correctly disclose 

debts and obligationpS^ling $120,447. The Audit staff recommended that, absent 

documentation demonstrating that titese expenditures did not require reporting on 

Schedule D (Debts and Obligations), NDP amend its disclosure reports to disclose these 

debts properly. In response to the Interim Audit Report recommendation, NDP filed 

amended reports to materially disclose these debts and obligations. 

The total amount of payroll and payroll paid from non-federal funds figures were adjusted from the 

Interim Audit Report amounts of $293,439 and SI0,SS7, respectively. 
7 

Legal Standard 

A. Continuous Reporting Required. A political committee must disclose the amount 

and nature of outstanding debts and obligations until those debts are extinguished. 

2 U.S.C. §434(b)(8) and 11 CFR §§ 104.3(d) and 104.11(a). 

B. Separate Schedules. A political committee must file separate schedules for debts 

owed by and to the committee with a statement explaining the circumstances and 

conditions under which each debt and obligation was incurred or extinguished. 

11 CFR §104.11 (a). 

C. Itemizing Debts and Obligations. 

• Once it has been outstanding 60 days from the date i 

less must be reported on the next regularly sched 

• A debt exceeding $500 must be disclosed in thererort tha 

which the debt was incurred, except reocci^^ii^ministratr 

rent) shall not be reported as a debt before^ payment due 

11 CFR §104.11(b). ^ 

Facts and Analsrsis 

d, a debt of $500 or 

irs the date on 

ipenses (such as 

A. Facts 

During audit fieldwork, the Audit staff I 

the accounts^ of NDP's 11 largest vendors Tlie 

services such as office spage,.phone bank, | 

)le disburl^^it records to reconcile 

3fs graded NDP mainly with 

ig ahlF^^liance services. 

33^ 

The Audit staff revi^^ the' 

and obligations, to'tolramJ05,4 

were payments totalingi 

throuehoutdiiai^dittDerioc 

are repontaDlear 

llors' invoic€|^mounts and identified unreported debts 

F, owed to 10^^its vendors. Included in this balance 

Lspac»that NDP made more than 30 days late 

irring administrative expenses such as rent 

ds not made by the due date. 

debtsJllcussed above, NDP incorrectly reported debt 

The under-reported debts total $15,000 for the audit 

In addi 

amounts 

period. ® 

B. Interim Audit & Audit Division Recommendation 

The Audit staff presepfed this matter to NDP representatives at the exit conference and 

provided schedules detailing the unreported and under-reported debts for each reporting 

period for the audited cycle. NDP representatives objected to the inclusion of rent, a 

regularly recurring obligation, appearing on the debt schedule. The Audit staff 

The reconciliation consisted of calculating invoiced and paid amounts for individual reporting periods in 

the 2009-2010 campaign cycle. The Audit staff then determined whether any outstanding debts were 

correctly disclosed on Schedule D. Each debt amount was counted once, even if it required disclosure 

over multiple reporting periods. 

The total amount of reportable debt to this vendor was S34,S00. NDP reported only S 19,500 on its 2009 

and 2010 disclosure reports. The underpayment was calculated as follows: $34,500 - $19,500 = $15,000. 
acknowledged that regularly occurring administrative expenses are not debt reportable as 

long as they are paid by the due date; however, NDP had consistently paid its rent more 

than 30 days after the payment was due. 

The Interim Audit Report recommended that NDP provide documentation demonstrating 

that these expenditures did not require reporting on Schedule D. Absent such 

documentation, the Interim Audit Report recommended that NDP amend its reports to 

disclose the outstanding debts. 

C. Committee Response to Interim Audit Report 

In response to the Interim Audit Report recommendation, ND^^led^apiended reports to 

materially disclose these debts and obligations. 

I Finding 3. Excessive Coordinated llaiibr Exi|b,nditures 

Summary ^ 

During audit fieldwork, the Audit staff identified.;icqprdinated party expenditu^s made by 

NDP for a House candidate that appeared to exceed-^i^,C^^^'coordinated paVty 

expenditure limitation by $34,789. 

In response to the Interim Audit Repoi^i.T^ramendation, ^iUpip,vided statements and 

documents to support its contention tha^'W6'%^nditures totajm^ $S,I74 should not be 

considered excessive coordinated party exj^ndituresl"^ NDP acknowledged 

that it received spending authpri^ty of only ^8Q;dbb frbm^e Democratic Congressional 

Campaign Committee^CDCCli:) .prior to makipg expenditures on behalf of the House 

candidate. NDP prov|led a letter-from DCCC^In which DCCC further ceded, albeit 

untimely, $6,600 to T^DP/ jn 2012; NDP argue^ifhit this amount remains available under 

the spending authority and thei^fbr^shpuld reduce the amount of excessive expenditures. 

. " " v.'-

In its re.spOnse, NDP^als0,^ckri(iWle.dged that it incorrectly reported expenses for GOTV 

("Get;t|'Q.t.the Vote) calls':totalingf !Sl9;,6lS due to a miscommunication with the candidate 

campaiinj.v^DP materiali^i^mended its disclosure reports and included these 

expenditure^Jdn Schedule ^jj^Coordinated Party Expenditures). 

After considerin^;^theJntmi^ Audit Report response, the Audit staff recalculated the 

excessive coordin^i3?«xpenditures to be $29,615. The revised figure adjusts for $4,596 

which NDP claims q^xempt under the volunteer materials exemption and $578 for a 

window sign that NDP indicated was not intended as a public communication. 

Legal Standard 

A. Coordinated Party Expenditures. National party committees and state party 

committees are permitted to purchase goods and services on behalf of candidates in the 

general election—over and above the contributions that are subject to contribution limits. 

Such purchases are referred to as "coordinated party expenditures." They are subject to 

the following rules: 
The amount spent on "coordinated party expenditures" is limited by statutory 

formulas that are based on the Cost of Living Adjustment (COLA) and the voting 

age population; 

Party committees are permitted to coordinate the spending with the candidate 

committees; 

The parties may make these expenditures only in connection with the general 

election; 

The party committees—not the candidates—are responsible for reporting these 

expenditures; and 

If the party committee exceeds the limits on coordinatedexpenditures, the 

excess amount is considered an in-kind contribution, sukjfctro>the contribution 

limits. 2 U.S.C. §441a(d) and 11 CFR §§109.30 anc 

B. Assignment of Coordinated Party Expenditure^yiSFit. A pSfilEal party may 

assign its authority to make coordinated party exp^lm^s to anothe^^kical party 

committee. Such an assignment must be made inciting, state the amoo^bf the 

authority assigned, and be received by the asgi^^before\ny coordinat 

expenditure is made pursuant to the assignment. T^jM^cal^arty commif^e that is 

assigned authority to make coordinated party expendit^^must maintain the written 

assignment for at least three years. Pl^FR §§104.14 a^^g9.33(a) and (c). 

C. Volunteer Activity. The payment 

of campaign materials (such as pins, bi 

tabloids or newsletters, 

volunteer activities oi 

provided that the 

1. Such payrfieni 

newspaper, m; 

cotMfiS^StiQn or ] 

ling(s) 

^ portion of 

3m contribj 

3. Suc^^ment is n 

on ben^^ a parti< 

4. Such mai 

5. 

6. 

mittee of'<^p51itical party of the costs 

r sti^gl^^^^uf, brochures, posters, party 

signs) usd^bs^ch committee in connection with 

ly nomine^) of such^rty is not a contribution, 

lions are i 

St incurred in^i^nection with any broadcasting, 

il, or similar type of general public 

1 ad^^i^i^. The term direct mail means any 

vendor or any mailing(s) made from commercial lists, 

aterials allocable to Federal candidates must be 

ns subp6t to the limitations and prohibitions of the Act. 

le from contributions designated by the donor to be spent 

lar candidate for Federal office. 

stributed by volunteers and not by commercial or for-profit 

operations. 

If made by aj^litical committee, such payments shall be reported by the political 

committee as a disbursement in accordance with 11 CFR §104.3 but need not be 

allocated to specific candidates in committee reports. 

The exemption is not applicable to campaign materials purchased by the national 

party committees. 11 CFR §100.87 (a), (b), (c), (d), (e) and (g) and 11 CFR 

§100.147 (a), (b), (c), (d), (e) and (g). 

D. Limits on Contributions Made by State and Local Party Committees. 

State and local party committees must comply with the contribution limits below; 
10 

• $S,000 per election to a Federal campaign if the contributing committee has 

qualified as a multicandidate committee; 

• $2,400 per election to a Federal campaign if the contributing committee has 

not qualified as a multicandidate committee; 

• $5,000 per year to a separate segregated fund (corporate or labor political 

action committee) or a non-connected committee; and 

• unlimited transfers to other party committees. 2 U.S.C. §441a(a). 

Facts and Analysis 

A. Facts 

The coordinated expenditure limit for the 2010 election 

the state of Nebraska was $43,500 each for the state and 

During audit fieldwork, the Audit staff reviewed the 

the DCCC that addressed the coordinated expend! 

transferred its entire coordinated spending limit 

make coordinated expenditures of $87,000 oi 

candidate for the United States House of Represei 

Congressional District (the candidate). Additional 

House candidate in 

committees, 

n NDP and 

May 25:m|0.NDP 

€CC. This perminUfccCC to 

ofT^k^White, D< 

[ebraska's: 

Rotation indicated that DCCC 

authorized NDP to spend no more thgrh$80.000 of its ( 

behalf of the candidate.^ 

lated party spending limit on 

The Audit staffs review of disbursemenf§^inaicMeflt^atND|Mappeared to make 

coordinated exoenditure^rubehalf of the cand@te t^^^ed $114,789, as outlined 

below. 

• NDP reporteja||iree mei^-related exp%ditures totaling $85,174 as coordinated 

expenditufeor^fihalf ^he candidatelp^ecifically, NDP spent $80,000 on a 

^ttgn^^t^andidatejfopponent. $4,596 on production of a 

B578Wc^^ign signage, 

ed ^^ing limit was established, NDP reported two 

oents/^^ifig $29,615, for "generic GOTV ("Get Out the 

! eleci^ activity on its disclosure reports. The scripts 

media ^in opp 

car^ 

er the i 

litional disb 

I calls as fee 

provigjgd by the ver 

candidl^s commit 

cand idat&@^inci 

authorized i 

pr seem to indicate there was possible coordination with the 

I since the scripts contained the message to vote for the 

I a disclaimer that the message was paid for by NDP and 

Candidate. 

In addition to the expenditures discussed above, NDP spent $94,610 to produce a single 

mailer on behalf of the candidate. This amount consisted of the following components: 

layout and production ($92,610) and postage ($2,000). NDP considered the cost of the 

entire mailer to be an exempt activity under the volunteer materials exemption. To 

support its assertion, NDP provided vendor statements and invoices along with 

photographs of the volunteers participating in various duties such as reviewing, sorting, 

and packing the direct mail pieces. 

' DCCC filings disclpsed an additional candidate expenditure in the amount of $353, leaving DCCC with 

available coordinated limit of $6,647; ($87,000 - $80,000 - $353.) 
11 

The Commission has addressed the applicability of the volunteer materials exemption in 

the Final Audit Reports of the Democratic Executive Committee of Florida and the 

Tennessee Republican Party. In these reports, the Commission recognized a lack of 

clarity regarding the application of the volunteer materials exemption. In recognizing the 

lack of clarity, the Commission has attempted to formulate a consensus policy regarding 

what constitutes substantial volunteer involvement for the purpose of applying the 

exemption.'" 

In view of the uncertainty regarding the amount of volunteer invo^ment needed to 

qualify for the volunteer materials exemption, as well as the ai^Siit^f documentation 

required to support such an exemption, the expenditures fort-K^ailer totaling $94,610 

have not been attributed to NDP's coordinated expenditu^ 

The Audit staff concluded that NOP spent $I I4,78&^PIIl^iSi'dinated^^nditures and 

exceeded its authorized coordinated party expei^ure limit by $34.789^^s a result, 

these expenditures are considered an excessiye^kind cohLribution to tho^^djdate. 

B. Interim Audit Report & Audit Division Recoi 

The Audit staff discussed this matter(gjt the exit confei 

detailing the possible excessive in-ki 

candidate. In response, NOP represen 

reported on Schedule F might not actual 

tion 

d provided schedules 

ibutions ND?S^^e on behalf of the 

their befi^^'Sf some of the amounts 

avrgggSieoordina.^ expenditures. 

The Interim Audit Re 

demonstrating that]| 

Candidate.'^ 

Eld not ( 

[tended thl^lbP provj^additional documentation 

I the cooi^ated party expenditure limitation for the 

C. Commht^^^Donse'tlphtc 

In responSF^n^T^^m Ai 

expen^bres totaling^^74 (it 

andwl^e unspent coor^ated ] 

by the DO^t^should furtl^redu^ 

eport 

3rt recommendation, NOP argued that two 

g^nd 2 below) do not represent coordinated activity 

^expenditure limitation of $6,600 (item 3), ceded 

I the amount of the excessive expenditures. 

Regarding the i 

coordinated expeifl 

iditure^nd the Audit staffs calculation of amounts in excess of the 

lit, NOP explained as follows: 

1. The paymenfof $578 to an NDP vendor was merely for a sign that was placed in 

the window of the party's field office during the 2010 general election period. 

10 

12 

Proposed Interim Enforcement Policy, Open Session Agenda document No. 10-16 dated March 10, 

2010, Drafts A through D. 

The amount over the limit was calculated as follows: Total spent by NDP less amount authorized by 

DCCC: SI 14,789 - S80,000=S34,789. NDP made and repotted the maximum allowable contribution to 

the candidate during the 2010 election cycle. 

The authorized committee of Tom White was approved for administrative termination on May 10,2011. 

Therefore, a recommendation to seek refond from the candidate committee is not warranted. 
12 

The sign was not intended as a public communication; it was placed next to the 

sign of many other Nebraska candidates as is commonplace for party offices. 

2. NDP provided a declaration, signed and dated September 16,2013, from its 

Executive Director who oversaw all political and administrative operations of 

NDP during the 2009/2010 election cycle. In the document, the Executive 

Director attested that NDP paid for the printing of the postcards ($4,596) which 

advocated the election of the candidate. According to his recollection, the 

volunteers distributed, hand stamped, and placed the mailing labels on the 

postcards at the party headquarters. NDP incorrectly discjo^ed this payment on 

Schedule F and plans to amend its reports by disclosing,^e'i^penditures as 

Federal Election Activity (Line 30b). 

3. NDP acknowledged that it received spending wthSrity of'i^jy $80,000 from the 

DCCC prior to making expenditures. In ^dition^DP presented an unsigned 

letter from the DCCC dated April 24,20I^m which DCCC d^|nj^ed NDP as 

its agent "...for the exclusive purpose o^aking expenditures pur1u^u6 2 

U.S.C. §441a(d) on behalf of [the CaiidrMj^iip to^^;600." NDP ^%wledged 

this authority was not ceded in a timely fashfon^jMeveraeless, NDP urged the 

Commission to acknowledge ithat this amount remains available under the 

spending authority and shouldWej^ore reduce the^mount of excessive 

expenditures. ^ 

4. In its response, NDP^also acknowl^p;ed^fhat itdhbo reported expenses for 

GOTV ("Get Qpf^h^lYpte) calls tot^r^g $29,615^ue to a miscommunication 

with the candii^ate camp»gn. NDP m||terially amended its disclosure reports and 

included the^ii{B^enditu^s on Schedu]^.;p,-.(Coordinated Party Expenditures). 

The Audit s^ff-eoiisiflered'Np respbnjsei^an^ reviewed the submitted documentation. 

Based on;NDP'Viiddii:ip.n^^ explanation regarding the nature and the location of the 

campai^ sign, the Audif.stafr agrees.that the payment of $578 does not represent a 

cooi^iha^d, expenditure'a%:;the sign Wks not intended as a public communication. Since 

NDP discio^d this expenditure oh Schedule F, the Audit staff recommends that NDP 

amend its 20i(KAugust Moptbly report to disclose this disbursement on Schedule E 

(Independent Exi|^^ditui%s^ince the sign contains express advocacy. 

NDP's Executive Director attested to the volunteers' involvement with the printing of a 

candidate postcard ($4,596). As with the other expenditures noted above, totaling 

$94,610, for which NDP claims the volunteer materials exemptions, the Audit staff 

acknowledges the lack of clarity regarding the level of volunteer involvement needed to 

qualify for the volunteer materials exemption. As with the treatment of those 

expenditures, the Audit staff no longer attributes the $4,596 expenditure toward NDP's 

coordinated limit. NDP is encouraged, however, to provide any further documentation 

NDP used these funds to finance its broadcast television media buy and production and disclosed this 

expenditure on Schedule F of its 2010 Post-General disclosure reports. 
13 

such as photographs of the volunteers participating in the dissemination of the candidate 

postcard for the Commission's consideration of the matter. 

Finally, by presenting the assignment authority letter from the DCCC, NDP demonstrated 

that it was granted additional spending authority ($6,600) beyond $80,000. The Audit 

staff notes that the letter was issued on April 24,2012, well after the November 2,2010, 

general election. As noted in the legal standards above, 11 CFR § 109.33(a) requires that 

an assignment must be made in writing, state the amount of the authority assigned, and be 

received by the assignee before any coordinated party expenditure is made pursuant to 

the assignment. In similar cases, the Commission has rejected asjjimments of spending 

authority after the fact. As a result, the Audit staff did not allow^ronhip additional 

spending authority of $6,600. However, the Audit staff recggh^s that the $6,600 

represents unspent funds under the combined spending autnoriB^f both comniittees. 

As a result of NDP's response to the Interim Audit 

the excessive coordinated expenditures to be $29 

$578 which does not represent a coordinated e^^nditure 

as exempt from the definition of a contribution u^^r^he 

le Audl^iff recalculated 

e revised fig^|adjusts for 

$4,596 whic^^P claims 

iteer material^xemption. 

Calculated as follows: S29,6IS = [($114,789 - SS78 - $4,596) - $80,000].