Draft Final Audit Report of the 

Audit Division on Buddy Roemer 

for President, Inc. 

(February 28, 2011 - December 31, 2013) 

Why the Audit 

Was Done 

Federal law requires the 

Commission to audit 

every political committee 

established by a candidate 

who receives public funds 

for the primary 

campaign.' The audit 

determines whether the 

candidate was entitled to 

all of the matching funds 

received, whether the 

campaign used the 

matching funds in 

accordance with the 

whether the candi 

entitled to additional 

matching funds.Jind 

whether 

otherwysomplied 

the Ji^^^ns, 

prohibitii^and 

disclosure remhrements 

of the election 

Future Acti 

The Commission i 

initiate an enforcement 

action, at a later time, 

with respect to any of the 

matters discussed in this 

report. 

About the Campaign 

Buddy Roemer for President,^ 

committee for Charles E. 

Party's^ nomination for tbjP&ffic 

States. The Commit 

For more informat 

Organization, ^ 

Financial 

• Receipts 

o Ol^tributions from^ 

IS tne principal campaign 

I, a candidate for the Reform 

resident of the United 

in Newport, Kentucky. 

Ljii.- 5 lampaign 

penditures 

lisbursemei 

ating^penditures 

o nssEil^payments 

Contribution Refunds 

il Disbursements 

$ 374,937 

351,961 

25,100 

24,900 

3,997 

$ 780,895 

$671,827 

4,900 

30,412 

S 707,139 

Findings and Recommendations (p. 4) 

Finding 1. Net Outstanding Campaign Obligations 

Finding 2. Reportingof Debts and Obligations 

' 26 U.S.C.§9038(a). 

' Buddy Roemer (the Candidate) originally was afTiiiated with the Republican Party and changed party 

afTiliation during the audit period. 

^ Financial Activity audited from February 28,2011 through July 31,2012; limited review thereafter. 
Draft Final Audit Report 

of tihe Audit Division on 

Buddy Roemer for President, Inc. 

(February 28, 2011 - December 31, 2013) 
Table of Contents 

Page 

Part I. Background 

Authority for Audit 

Scope of Audit 

Inventory of Campaign Records 

Part II. Overview of Campaign 

Campaign Organization 

Overview of Financial Activity 

Part III. Summaries 

Findings and Recommendations 

Part IV. Findings and Recom 

Net Outstanding Campaign Obligations 

Reporting of Debts and Obligati 

5 

7 
Parti 

Background 

Authority for Audit 

This report is based on an audit of Buddy Roemer for President, Inc. (BRFP), undertaken 

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

mandated by Section 9038(a) of Title 26 of the United States Code. That section states, 

"After each matching payment period, the Commission shall conduct a thorough 

examination and audit of the qualified campaign expenses of ev^|gandidate and his 

authorized committees who received [matching] payments un^rsecttbn 9037." Also, 

Section 9039(b) of the United States Code and Section 903M^!2) of the Commission's 

Regulations state that the Commission may conduct othQ^cam^ipns and audits ftom 

time to time as it deems necessary. 

Scope of Audit 

This audit examined: 

1. the campaign's compliance with limitations 

2. the campaign's compliance with limitations for 

3. the campaign's compliance with t^wohibition on 

4. the disclosure of contributions and^P^gceived; 

5. the disclosure of disbursements, deblkanWrneations; 

6. the consistency between reported figuT 

7. the accuracy of the^g^ent of Net Oi^^ding 

8. the campaign's rodpfiaSS^th spendii^imitatioi 

9. the completen^^^^record^hd 

10. other campaign oriSihions iMessary to the^iew. 

and loans^ 

ite contributions and loans; 

ng prohibited contributions; 

lign Obligations; 

Inveni 

The. 

au( 

thereaft^ 

: staff routir 

5rk. BRFP' 

RecSfds 

Trp^entory of campaign records before it begins 

: materially complete and fieldwork commenced 
Part II 

Overview of Campaign 

Campaign Organization 

Important Dates 

• Date of Registration March 3.2011,^|^ii^ 

• Eligibility Period^ February - May 31.2012 

• Audit Coverage® FebruaiTa^r^^ - December 31, 2013 

Headquarters Ng^?&®,Xentucl^-

Bank Information M 

• Bank Depositories 

• Bank Accounts TwSEScking accounts 

Treasurer 

• Treasurer When Audit Was Conduc^^ liaunton Mel^Te 

• Treasurer During Period Covered by %di^ ^^^^^Iville 

Management Informfiion^ \ ^ , 

• Attended Conqdl^ Cam^gn Financed 

Seminar .-••v MiL 1 

On December 29,2011, the Candidate submitted a signed letter to the Commission seeking to become 

eligible to receive Presidential primary matching iiinds and agreeing that he and his authorized 

committee would comply with the conditions set forth in 11 CFR §9033.1(b). A threshold submission 

was submitted on December 30,2011, and the Commission certified the Candidate as eligible to receive 

matching funds on February 3,2012. The period during which the Candidate was eligible for matching 

funds ended on May 31,2012, the date of ineligibility. 

The Audit staff conducted limited reviews of receipts and expenditures after July 31,2012, to determine 

whether the Candidate was eligible to receive additional matching funds. 
Overview of Financial Activity 

(Audited Amounts) 

Cash-on-hand February 28,2011 S 0 

o Contributions from Individuals 374,937" 

o Matching Funds Received 351,961' 

o Contributions from the Candidate 25,100 

o Loans Received from the Candidate 24,900 

o Offsets to Operating Expenditures 3,997 

Total Receipts 780.895 

o Operating Expenditures 1,827 

o Loan Repayments ^i|w.900 

o Contribution Refunds ^ 1 ^^2 

Total Disbursements L V $7073&/ 

Cash-on-hand @ July 31,2012 S 73,? 

' BRFP received approximately 5,900 contributions ftom more than 5,890 individuals. 

^ As of the Candidate's date of ineligibility on May 31,2012, BRFP had received matching funds in the 

amount of $285,470. BRFP received an additional $66,491 on July 5,2012, for a total of $351,961. 
Part III 

Summaries 

Findings and Recommendations 

Finding 1. Net Outstanding Campaign Obligations 

The Audit staffs review of BRFP's financial activity throughJ^i!en^r 31,2013, and 

estimated winding down costs indicated that the Candidate j^i^t receive matching fund 

payments in excess of his entitlement. 

In response to the Preliminary Audit Report recoi 

comment. (For more detail, see p. S.) 

Finding 2. Reporting of Debts arN^M tions 

During audit fieldwork, the Audit staff identified deo^^di $42,097 that were not 

disclosed on Schedule D-P (Debts anlK^^gations) as . Subsequent to the exit 

conference, BRFP clarified the public HpSl&aMith respect to is&debts. 

In response to the Preliminary Audit Rep^n-.^ir 

comment. (For more del^gge p. 7.) 

jded no further 

j£m,'BRFP provided no further 
Part IV 

Findings and Recommendations 

Finding 1. Net Outstanding Campaign Obligations 

Summary 

The Audit staffs review of BRFP's financial activity through December 31,2013, and 

estimated winding down costs indicated that the Candidate did no^ceive matching fund 

payments in excess of his entitlement. 

In response to the Preliminary Audit Report recommenda^ 

comment. 

P provided no further 

Legal Standard 

A. Net Outstanding Campaign Obiigation^ 

candidate's date of ineligibility (see definitiofT 

statement of "net outstanding campaign obligation^ 

among other things: 

• The total of all committee assS^^duding cash i 

committee and capital assets lis^P^g^air marke 

• The total of all outstanding oblig%piis^^^^ified c|^aign expenses; and 

• An estimate of necessary windine^wideos^^l^R §9034.5(a). 

1S daysl 

idate must sH 

:ment must 1 

, amounts owed to the 

B. Dateoflneligil^ 1, : of ineligio^ty is whichever of the following dates 

occurs first: 

• The day on whlS^e cg^d^^^ases^Be active in more than one state; 

The follolj^^thesi^^ primary in which the candidate 

^siel^^m 10 p^|nt of the popular vote; 

ie end of they|^hingp|m^t period, which is generally the day when the 

nominates i^^ndids^ror the general election; or 

In'l^iase of a cai^ate ^^ose party does not make its selection at a national 

conv^m^n, the las^y of the last national convention held by a major party in 

the calei^year. Jf CFR §§9032.6 and 9033.S, 

C. Qualified Camp^fn Expense. Each of the following expenses is a qualified 

campaign expense. 

• An expense that is: 

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

period beginning on the day the individual becomes a candidate and 

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

§9033.5; 

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

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

where the expense was incurred or paid. 11 CFR §9032.9. 
• An expense incurred for the purpose of determining whether an individual should 

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

regardless of when that expense is paid. 11 CFR §9034.4. 

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

activity. 11 CFR §9034.4(a)(3). 

D. Entitlement to Matching Payments after Date of Ineligibility. If, on the date of 

ineligibility (see above), a candidate has net outstanding campaign obligations as defined 

under 11 CFR §9034.5, that candidate may continue to receive matching payments 

provided that he or she still has net outstanding campaign debts oi^he day when the 

matching payments are made. 11 CFR §9034.1(b). 

Facts and Analsrsis 

The Candidate's date of ineligibility (DOT) was May ^,^12. I^Mudit staff reviewed 

BRFP's financial activity through December 31,20^Pb^myzed es^^^ winding down 

costs and prepared the Statement of Net OutstanjJ^Campaign Obliel^lLS that appears 

below. 

Buddy Roemer for Prcsil^ 

Statement of Net Qflj^tanding Campj bligations 

As^^^31,2012 

PreparemlP^^her 31,2013 

Assets 

Cash in Bank ^ 38,987 

Accounts Receivablag IM 

Total Assets ^Hlk. w $ 39,141 

Liabiiitic 

Accoui^l^avable fo?^fedified^^teiDaign Expenses at 5/31/12 $ 2,547 

Winm^gown Costs: 

ActulSm|mding Down'^pensdr Paid (6/1/12 - 12/31/13) 103,304 

EstimateWnding Do^Costs (1/1/14 - 9/30/14) 34.650 lal 

Total Liabiliflik M 140.501 

Net Outstanding Campaign Obligations (Deficit) as of May 31,2012 S (101.3601 

[a] Estimated winding dowii costs will be compared to actual winding down costs and adjusted 

accordingly. 
Shown below are adjustments for funds received after the Candidate's DOI. 

Net Outstanding Campaign Obligations (Deficit) as of May 

31.2012 

($101,360) 

Less: Contributions Received (June 1,2012 to July S, 2012) 245 

Less: Matching Funds Received July S, 2012' 66,491 

Remaining Net Outstanding Campaign Obligations 

(Deficit) as of July 5,2012 

$ (34,624) 

As presented above, BRFP has not received matching fundj 

entitlement. 

I in excess of its 

Audit staff presented a preliminary NOCO statemen^S^^ated wd^^pers to both 

BRFP representatives at the exit conference. A h^er discussion ensueo^^the BRFP 

representatives. Audit staff subsequently prov^^a revised NOCO staterara^^ BRFP's 

representative, who stated that the workpaperawomiaJae r^p^ed and he wjmd provide 

any additional comments as necessary. 

Preliminary Audit Report Recommi 

The Preliminary Audit Report staff recS^fW fe^at BI 

adjustments it believes are required in c^( Mfatkanv | 

or provide any other additional comments^ 

Committee Respoi 

In response to thi 

comment. 

Snstrate any 

^f the NOCO statement 

lendation, BRFP provided no further 

Sum: 

During audit 

disclosed on 

conference, BRFP 

ibts and Obligations 

ludit staff identified debts totaling $42,097 that were not 

[Debts and Obligations) as required. Subsequent to the exit 

I the public record with respect to these debts. 

In response to the Preliminary Audit Report recommendation, BRFP provided no further 

comment. 

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). 

' BRFP's last matching fund payment was deposited on July S, 2012. 
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. 

• A debt of $S00 or less must be reported once it has been outstanding 60 days from 

the date incurred (the date of the transaction); the committee reports it on the next 

regularly scheduled report. 

• A debt exceeding $500 must be disclosed in the reportJ^lff^rs the date on 

which the debt was incurred. 11 CFR § 104.11 (b). 

Facts and Anal3rsis 

During audit fieldwork, the Audit staff reviewed di 

reports for proper reporting of debts and obligatl 

audit period; however, the review identified 

BRFP should have disclosed on Schedule D-l 

provided mainly legal services, website developmi 

the identified debts were greater than^OO and all rei 

reporting period in.which they were i^fesed. These del 

ranging from 31 to 238 days. Further, 

totaling $15,737 were paid within 40 da; 

Preliminary Audit R< 

The Audit staff disc]^%d the^ 

representatives atdn^^confei 

requiring disclosure via^ail 

BRFP repre^ggj^indu 

conferen^^Kpons^^l^d. 

recoi jth respect to^Pe debl 

The Preir 

it considei 

It recoi^^^ disclosure 

P reported nom^ during the 

2.097" to fivifea^rs that 

irds, thesejrvc vendors 

insulting services. Most of 

outstanding during the 

outstanding for periods 

97 in debH^^isclosed, debts 

..•date^ 

,udit Divisllfl^ecomiq^^tion 

jrting of dems and obligations with BRFP 

and provi^^ schedule detailing the transactions 

le exit ^merence. During the exit conference, 

uld be filed during the post-exit 

luent to the exit conference, BRFP clarified the public 

ligations. 

Audit Re;; •: t recdmmended that BRFP provide any additional comments 

Committee Res; 

In response tp the 

comment. 

ssary wi'h -aspect to this matter. 

luminary Audit Report 

inary Audit Report recommendation, BRFP provided no further 

* Each debt in this amount was counted once even if it required disclosure over multiple periods. In order 

for BRFP to correctly file amended reports, schedules were provided that included the amount of each 

debt required to be reported for each reporting period.