AKOOS839

December 29, 1994

MEMORANDUM

TO:

FROM:

RON HARRIS

PRESS OFFICER

PRESS OFFICE 6<::-'- '(I--~/ , \. I('C ROBERT J. COSTA \~

ASSISTANT STAFF DIRECTOR

AUDIT DIVISION

U:

-....... '

SUBJECT: PUBLIC ISSUANCE OF THE FINAL AUDIT REPORT ON

CLINTON/GORE '92 COMMITTEE AND CLINTON/GORE '92

GENERAL ELECTI_ON__C9}'\fLIANCE FUND

Attached please find a copy of the Final Audit Report

and related documents on Clinton/Gore '92 Committee and

Clinton/Gore '92 General Election Compliance Fund, which was

approved by the Commission on December 27, 1994.

Informational copies of the report have been received by

all parties involved and the report may be released to the

public.

Attachment as stated

cc: Office of General Counsel

Office of Public Disclosure·/

Reports Analysis Division

FEC Library
REPORT OF THE ALl>IT DIVISION

0'

-'" " .. , .ClintoO/Gore '!92 Committ-ee~: ',. = . -: . . .' . . ..' ..... . . . .' ...

',. 'anll

~~~:i.~--:-.-..-.::'-t_·,y,~~lint'On/Gore:'9-~£ieneratElectiDnt'"..<~ ~, ..•' '-: . - -------- - .

e- Compliance Fund

December 27, 1994

C'·

. " .... ..".: '." "" ',r \ .. : ••'\. ........ '-'. 0" '_.' _ •

FEDERAL ELECTIO, CO\1\lISSIO'

999 E STREET, '.w.

WASHr-tGTO'. D.C.

TABLE or CONTENTS

CLINTON/GORE '92 COMMITTEE

AND

CLINTON/GORE '92 GENERAL ELECTION COMPLIANCE FUND

Page

Findings

-~_:""·-~~-Le9al·-Mia--rYsi;''';·.(la''te~·~'1i''3I-!L.·.':.~,:·_.:.:."'_'~:'-'~':" 1,OS.' "', : .-: . ," ,.

Executive Summary

Fina.l:· Audi t Repor t

':aack"rounEi ".'

Transmittal to Treasurer

Transmittal to Candidate

Chronology

•. • ': ,,4·. ,"

..

... "...."

1

5

.'" ..

5

8

123

125

127

" ... ".

." .

.. ... .

H DER-\l t~E(1 J(), ,,)\,1\,\1,,",10, AB002386

" .,

FINAL AUDIT REPORT

ON

CLINTON/GORi '92 COMMITTEE

AND

CLINTON/GORE '92 GENERA~ ELECTION COMPLIANCE FUND

EXECUTIVE SUMMARY

The C·linton/Gore '92 Committee (."the Gene~a:l Committee") _ng.ist:e£~., ...ith· tJ1e.. r.ede~i\.l· !;:l.ec1;ion·.C~i,s.siol1- on' J.'+l-y' 17 .• :19n .. . ,

'l:he General.Committee was .the pr.incipal campaign cOl!UltiUee of then. G~vernor Wi11~am ("Bill") Clinton, the 1992 pemocr~tic

pr~Sidential nominee .... In addi tion, as p'ermi tted by 11 CFR

59003.3, the Clinton/Gore '92 General Election _Compliance Fund

'- ~-•. ';'T·'tne.:.'CojjprilfnC1!'·"p'und-"::r·-"rl!11-it5ttfrea'Wi-tb~-'t;be- ...C,..xs• .i.dl'L "pn-_~'Y_ "2~:,"_:-:,' - .-,.:.

1992. !/ - -

The audit was conducted pursuant to 26 U.S.C. S9007(a)

which mandates Commission audits of the qualified campaign

expenses of the candidates of each political party for President

and Vice-President.

On July 17, 1992, the General Committee was certified to

receive $55.24 million in Federal funds.

:

I. • .A.U4i t.- fil\dings· "Wt:.~e:· p~egent~d ·to:-the -Gene ra 1 €ommit tee and . • .•." the Compliance Fund ("th.e Committees."J at an exit conference

held at the conclusion of audit fieldwork (October 6, 1993) and

in the interim audit report approved by the Commission (March

24, 1994). The Committees were given an opportunity to respond

to the findings both after the exit conference and after receipt

of the interim audit report. The Committees' responses to the

audit findings have been included in this report.

In the final audit report, the Commission made an initial

determination that the General Committee was required to pay the

1/ Presidential campaigns receiving Federal funding are

permitted to establish compliance funds, which are special

accounts that are funded by con~ributions and used to pay legal

and accounting expenses incurred to comply with the campaign

finance law.

Page 1, 12/27/94
Clinton/Gore '92 Committee and

Clinton/Gore '92 General Election Compliance Fund

Executive Summary

Page 2 of 3

U.S. Treasury a total of $254,546, consisting of: $112,100,

representing the receipt of apparent prohibited contributions;

$78,625 representing non-qualified campaign expenses in the form

of duplicate payments and for non-campaign related activity;

$6,646 relative to income earned on the Federal funds received

and $57,175 for unresolved stale-dated checks. These and other

matters are summarized below.

Disclosure of Receipts and Debts and Obligations - 2 U.S.C.

S434(b). The interim audit report found that the Compliance

Fund's reports inadequately disclosed occupation and name of

employer and that the Compliance Fund did not demonstrate best

efforts to obtain this information. The Compliance Fund has

since filed amended reports which provide additional disclosures

of occupation and na~e of employe:, I~ addition, t~e interim

audit ~eport found that the General Committee's reports .. ·inadequate·ly.-diS"Cl~sed'refU'Dds- end rebat!!s and, ".

·debts/obligations.. Th~ -Gen-eral Committee has since filed

amended reports which prOVide adequate disclosure of refunds and

rebates.

'~.-.-~-.....-.-- -. 0. .... •.." ,,' ": '".•• :-.• ~.' .-= :,.

r~

cFunds from Non-Allowable Sources - 11 ·CFR S9003.3(a). The

interim audit report identified fundraising expenses benefiting

the Compliance Fund which had been paid by the Primary Committee

(Clinton for president Committee) as a result of a

disproportionate allocation of costs involving a common vendor.

In addition, the interim audit report noted impermissible

transfer of contributions to the Compliance Fund from the

Primary Committee. The Compliance Fund disagrees with these

conclusions and has taken no corrective action. During the

Commission's considera~ion of ~he Fina: Audit Repe:: for the

Clhltofl for-oP-'resident Committ·e~ -'1:-he Primary Commi-tteE!)·, the ,.

Commission considered the question of the application of private

contributions to the Primary Committee's net outstanding

campaign obligations versus treating most post date of

ineligibility contributions as containing no designation and

therefore transferable to the Compliance Fund. A motion to

support the Audit staff's analysis applying private

contributions to the primary Committee's remaining net

outstanding campaign obligations prior to payment of further

matching funds failed. A second motion to consider all post date

of ineligibility contribucions unmatchable unless specifically

designated also failed. As a result of the failed motions, the

Compliance Fund will not be requested to return $1,353,397 to

the Primary Committee.

Apparent Prohibited ConcrlDucion - 11 CFR Sl:6.3. The

interim audit report had questioned whether an extension of

credit by a vendor constituted a prohibited contribution. In

Page 2, 12/27/94
Clinton/Gore '92 Committee and

Clinton/Gore '92 G@neral Election Compliance Fund

Executive Summary

Page 3 of 3

response, the General Committee submitted documentation

demonstrating that the extension of credit was in the normal

course of business and did not result in a contribution.

Apparent Prohibited Contributions - 26 U.S.C. SS9003(b) and

9007(b)(3). The interim audit report noted equipment donated to

the General Committee; payments for. polling services not~made by

General Committee; deposits from unknown sources credited to

General Committee bills; and, amended contracts benefiting the

General Committee. Although the General Committee's response

resolved some of these contributions, in the final audit report

the Commission made an initial determination that apparent

prohibited contributions totaling $112,100 required repayment to

the U.S. Treasury.

. ." ... .~ , .'

Appafent Non-Qualified Campaign Expenses - 26 U.S.C .

.[9.00.7 (b-) (,4.) 4': .Th.e. inte r.I.m· 8udi t : r~po-r.t ·noted .·ap~arent ':.' '.

.nen-qualified· campai.']n expen-ses in the 'form of· disbutsements

paid mor'e than. once ("duplicate paymtlnt.s") and non-campaign

related' paYments, to include' payments ~or lost vehicles. After .~. . ev~luation of.the General Committee's response, the ~ommission

..~~~~;:~:·-;:··-"~,..a""~i.ni-H1!~ '·~~rmift6tio"{nF·,f\oi· "l'neUnd 'auqi'!' rePtfrt. ..fna~:· .3' '..). " repayments to the U.S. Treasury 'totaling $78,.625 were required.

Incom~ Earned' by the General Committee - 11 CFR

S9007.2(b)(4). The interim audit report noted that income was

earned on Federal funds, mainly from deposits to an interest

bearing escrow account. In the final audit report, the

Commission determined that $6,646 had to be paid to the U.S.

Treasury.

Expenditure Limitation - 26 U.S.C. S9007(b)(2). The final

audit report notes that the General Committee has made

expenditures in excess of the spending limitation totaling

$267,840 and recognizes that reimbursements permitted from the

Compliance Fund would eliminate any excessive amount and

resulting repayment. The final audit report recommends that such

a transfer be made and requests documentation be provided .

c

L0.. · .')'

r', ',....

• : f .' '. '. • •• ...... . '. . ... .... . • J • . . .... ..e .'

Stale-dated Committee Checks - 11 CFR 9007.6. Finally, the

Committees are required to pay to the U.S. Treasury $ 57,175,

the total amount of unresolved stale-dated checks.

page 3, 12/27/94
:...':.. ..• --- ,-..: - .. ...

".

.".

..'", ...

: .

.... : . .'

..

.. .

".

.'.

..

Page 4, 12/27/94
fLDtR.-\L ELE(TIO...... (0\\\115510 ......

REPORT OF THE AUDIT DIVISION

ON THE

CLINTON/GORE '92 COMMITTEE

AND CLINTON/GORE '92 GENERAL

ELECTION COMPLIANCE FUND

AK005331

I. Background

A. Auui.e i\uthori ty '.

.;:.., •. 0. •... .... '. .... :..': .•.,: . _" . _.... ... .0:' '~'. -l...... I

.. ' .This report i-s based on an audH:.of· the Cl.inton/Gore '92.

Committee ('~he General Co~ittee=). and the Clinton/Gore '92

.General Election COlllpliance Fund' ("the COlllpliance' Fund"). The

audit is mandated by Section 9007(a) of Title 26 of the United ...:..~:~-~j..~-. '~-St:a:t;etF eoti&;·;:l'lHtQ--"&'e-tion-~st:.te-s·~l1Ii~'!~~ei_ each.>p,.s"idertti.al· -~.

election, the COllllllission shall conduct a thorough- e'XamTna~lon-and---

audit of the qualified call1paign expenses of the candidates of each

political party for President and Vice President."

Also, 26 U.S.C. S9009(b) states, in part, that the

Commission aay conduct other exalllinations and audits as it deems

necessary to carry out the functions and duties imposed on it by

this chapter.

In addition to examining the receipt and use of Federal

··.·~unds-,.:~he audi t .seus;·t6· determine .if .the· t:a!IIpai-g.n has. materiall'y

~omplied with the limitations, prohibitions, and disclosure

requirements of the Federal Election Call1paign'Act of 1971

("FECA"), as amended.

B. Audit Coverage

The audit for the General Commlttee covered the period

from the General Committee's inception ~uly 14, 1992, through June

30, 1993. The General Committee reported an opening cash balance

of $-0-; total receipts of $63,711,645; total expenditures of

$63,683,481, and a closing cash balance of $28,163.1/ In addition,

the General Committee's disclosure reports were revIewed

The reported activity does not foo: due to mlnor

mathematical errors. Figures incl~ded in this report are

rounded to the nearest dollar.

Page 5, 12/27/94

... '
2

through June 30, 1994 for the purpose of determining amounts

applicable to the expenditure limitation.

The audit for the Compliance Fund covered the period

from inception, May 13, 1992, through June 30, 1993. The

Compliance Fund reported an opening cash balance of $-0-; total

receipts of $8,498,699; total disbursements of $4,587,859; and a

closing cash balance of S3,909,840.~/

c. Campaign organization

The General Committee registered with the Federal

Election Commission on July 17, 1992. The Treasurer of the

General Committee during the period covered by the audit was

Robert Farmer. The current Treasurer is J.L. "Skip" Rutherford.

The Compliance Fund registered with the Commission on May 26,

1992. The Treasure: ~~ the Co~~:iance ~und unt~l Au:ust 25, 1992

was David Watkins. The ireasurer from August 25, 1992 through

.;. OctOber. ,14:, ~1~94 .~a1; .R&be-rtl··rar·me-r·.:- ·T·he·-Committee 'find 'an

amended'5taternent CYf'Organization on October' 15, '1994 which

designa;l:eq J.L .."Skip" Ruthel:ford as the current" Treasure-r.Bcsth

committees maintain their headquarters· in Little Rock, Arkansas.

f e ',"- ••••,•••~ ' 'Tne Genedi'l: C"6mJiri·ttee···*arrif.ai~d five'Dank' ac'aolln'ts'at':"

various times to manage its financial activity. Prom these

accounts, the General Committee made approximately 73,000

disbursements. The General Committee was certified to receive

$55,240,000 froa the united states Treasury on July 17, 1992 to

fund its campaign. Other receipts included a $1,900,000 transfer

from the Compliance Fund, $125,000 in loans from the Compliance

Fund to finance expenses incurred prior to receipt of the July 17,

1992 grant, and approximately $6,450,000 in offsets to

expenditures .

. '.- -'- T'o :man~e ·its fil'lanc'iai':activi ty; the CUmpliante Tund

maintained one bank account. Fto~-this account, the Compliance

Fund issued 139 checks in payment for goods and service~ and an

additionai 234 checks for refunds of contributions. Also, the

Compliance Fund received approximately 126,700 contributions from

about 98,000 individuals totaling almost $8,473,000. Of this

amount, approximately $2,443,000 originated from contributors to

the Clinton for President Committee ("the Primary Committee") as

contributions which were redesignated to the Compliance Fund.

D. Audit Scope and procedures

In addition to a review of the committees' expenditures

to determine the qualified and non-qualif:ed campaign expenses

~/ The reported clos:ng cash balance does not foot due to a

51,000 math error in total disbursements cn the Summary

pages of the Year-End, 1992 disclosure report.

Page 6, 12/27/94

..••.. ......
3

incurred by the campaign, the audit covered the following general

categories:

1. The campaign's compliance with statutory limitations

with respect to the receipt of contributions or loans;

2. the campaign's compliance with the statutory

requirements regarding the receipt of contributions from

prohibited sources, such as those from corporations or

labor organizations (see Finding II.B.1.· & ~II.A.)1

3. proper disclosure of receipts, contributions from

indivi~ual5, political committees and other entities, to

include the itemization of receipts when required, as

well as, the completeness and accuracy of the

information disclosed (see Findings II.A.1. & II.B.2.)1

4. proper disclosure of disburse~ents including the . 'i temization of disbursements ,,;hen requi red,' 'as' well 'a~',

" th4!l oompl"1!t.eneS<6 and- 'accura-cy'of t-he' infurlltat'ion ..: .. disclosed fsee Finding I1.B.2.); .

5. proper disclosure of campaign debt~ and obligations (see

;~~:::;:~:7:j;~"'~;-'-.-, -:.-.... :i,n~~ ~.?, II,~ . ~:~ ).\... . i'.~.. '.' . '. '. . .... :: ..•.•• :~,,;"<.~, ..... ,'. '.:.~"~'

6. the accuracy of total reported receipts, disbursements

C' and cash balances as compared to campaign bank records;

7. adequate recordkeeping for campaign transactions;

.-,

t~ :.-

8.

10,

accuracy of the Statement of Net Outstanding Qualified

Campaign Expenses filed by the campaign to disclose its

financial condition (see Attachment 5);

the camp~ign's compliance with spen?ins limit.apons.· (see findin'gt·II.C.·~l and· .':' '.:- : ..: .... :- '" ....

other audit procedures that were deemed necessary in the

situation.

As part of the Commission's standard audit process, an

inventory of the committees' records was conducted prior to audit

fieldwork. This inventory was conducted to determine if the

committees' records were materially complete and in an auditable

state. It was concluded that the records were materially

complete, except as noted below.

Our review of disbursements was hampered by the

campaign's procedures for maintaining disbursement files. The

page 7, 12/27/94
4

campaign ordered its disbursement files by parcel number3/ for its

draft account and by check number for its other accounts~ with

respect to other committees, such files are frequently ordered by

vendor, Ordering files by vendor allows for a more efficient

review of payments made and outstanding balances owed to a

particular vendor.

Unless specifically discussed below, no material

non-compliance with Statutory and Regulatory requirements was

detected, It should be noted that the Commission may pursue

further any of the matters discussed in this report in an

enforcement action.

II. Findings and Recommendations Relative to Non-Repayment

Matters

. ' ..

A. Clinton/Gore '92 General Election Compliance Fund

1;: Disclosure of Occupation and Name of Empl-oyer .:. • ;.. ' .....: .... ". .. ' '0° .. • • .. .. ' ••••• ', •• .. .' . .. ... :

'., 'S~ct1on 434(b)(3'(A1 of Title·T of ~be'~nited'

States Code requlres a political committee to report the

. _ identification 'Of each person who makes a contribution to the

-_,__. c.QJllmi~~e-e_.~I1.an assreaate...all(tlunt. ~r ·va.l~e in e~c~ss of $200 2e.x:. ; . ••••~-: ° ~. r~cat"e""1\"da-r' ~a r :t69\!·fhetwfth·"::t1ie·arte"a'iid·-alliOi1rrt~-df"'afl\r~·sfJch ...... _~.. '0_ ':.'.

contribution.

Section 43l(l3)(A} of Title 2 of the United States

Code defines the term WidentificationW to be, in the case of any

individual, the name, the mailing address, and the occupation of

such individual, as well as the name of his or her employer,

,- Section 432(i) of Title 2 of the United States Code

states, in part, that when the treasurer of a political committee

shows that best effor~s.have been used·to obtain, ma'intain, and

Sllbmi t·· the' fOlo rmatfdn . fequl:-ed by ·tni·s·-AC t :£0"(" ttie pol itic.al

committee, any report of such committee shall be considered in

compliance.with this Act.

Section 104.7(b) of Title 11 of the Code of Federal

Regulations states, in part, with regard to the identification, as

defined at 11 CFR 100.12, of each person whose contribution(s) to

the committee and its affiliates aggregate in excess of $200 in a

calendar year, the treasurer will not be deemed to have exercised

best efforts to obtain the required information unless he or she

has made at least one effort per solicitation either by written

request or by an oral request documented in writing to obtain such

information from the contributor. Such effort shall consist of a

1/ The General Committee sent drafts to personnel in ~he field

in "parcels". A log was maintained for each numbered

"parcel." These "parcels" were numbered sequentially and

documentation was maintained by "parcels."

Page B, 12/27/94

: .-
5

clear request for the information (i.e., name, mailing address,

occupation, and name of employer) which request informs the

contributor that the reporting of such information is required by

law.

The Audit staff reviewed contributions from

individuals on a sample basis. The sa.ple results revealed an

error rate of 50\ with respect to disclosure of occupation and

name of employer. For some of the errors, the receipt

documentation avai.lable for 'review did not contain information

concerning related solicitations. Therefore, the Audit staff

could not determine if best efforts had been employed. In other

instances, the solicitation documentation provided did not contain

a request for name of employer. Other errors resulted from

instances where the information was obtained but not disclosed.

During the course of the audit, the Audit staff

advised the Compliance Fund of the high error rate. The

Complia~ce Fund was a~ain advised of tHfs ~atter at the exit

;... .'_ .~n4:e-rence but-did not·.provi-El~ an-expi..~at±on.·. :'- .-,-,.- ''',._'

Subsequent to the exi t conference, the- CampI i-ance ,

" . :Fund provided a form letter requesting occupation and name of

.--:. .•.__ ,_e~IIIP:+,o.x.er a.l~n~ ~ith ..a,.li~!-,in.~ ,o~. ~aI!'-,e~ ..to, .who1l!.J:he ~7.~t~,r .,!".s.. , .'_ " :." .', 'rt!po-rtedly sent '~Th~"lrtter'ts i1a\:-ei:f·JUly·1'9'''~199l. 'I't:·.ftShot'eCr

that approximately 85% of the names of the individuals included in

the sample errors were contained on the listing provided. The

compliance Fund stated that "amended reports reflecting this

information will be filed in the near future." The Audit staff

was not made aware of this mailing during fieldwork and was not

offered the opportunity to review any responses.

.- .-.... l:

:.0 :

In the Interim Audit Report, the Audit staff

recommended that the Compliance Fund submit documentation to

demonstrate that best 'efforts were utili~ed and file Schedules A-P

to' disc,lose occupatlop' and h.:tme '~f empioj'-et -information i:;~taihed',~'

as a result of the July 19, 1993 mailing 'or contained in

Compliance Fund files but not previously disclosed.

In response to the Interim Audit Report, Counsel

for the Compliance Fund states that the July 19, 1993 mailing

"demonstrates that best efforts were made to obtain the

information. In addition, the Compliance Fund has filed

Amendments to Schedules A-P disclosing the information obtained

from this mailing.

"The Compliance Fund further notes that all

solicitations for contributions to the Compliance Fund were

accompanied by a request for contributor information in compliance

with 11 C.F.R. §104.7 .... The Compliance Fund made best efforts

to request contributor information as required by Sl04.7 at the

time of solicitation, and reported the information received. To

the extent that some information may have been received but not

reported, as speculated in the Interim Report, the omission was

Page 9, 12/27/94

.. -.,
.-::;-. _ ....

6

inadvertent and may have been due to data entry errors." The

Compliance Fund also provided copies of sample contributor cards.

Although sample contributor cards were provided

that contain a request for the necessary information, these

samples do not obviate the fact that some of the contributor

response devices reviewed by the Audit staff during fieldwork did

not contain a request for name of employer. In addition, as

discussed above, the receipt documentation for some of the errors

did not contain information associating them with a particular

solicitation or with the samples submitted. As a result, the

Audit sta:f could not determine if best efforts had been made by

the Compliance Fund. The Audit staff is also of the opinion that

a letter sent eight months after the election, and after the

matter had been discussed with Compliance Fund representatives by

the Audit staff during audit fieldwork, does not demonstrate that

best efforts were made to obtain the information.

Although not submltted with i~s r~sponse to the" .

" Inte-r im ,J\ud:i.t" lil.ep(H.t,". t~ -Compl i anCf! "E'una" has' f i'led amend.ed·"·· .,."

'r,e"ports which provide addi tional "disclosure'S of' o~cupation "and

name of employer. "'

2. Funds from Non-Allowable Sources ---. -...-;.r \.¥ -4 ....::•••••_ ~:~~?~_.,;. :.< i,_•.••r ..... '6·.•• _.,'" ._ ••••• ~.l_•• · • .-o:-.~ .... '." ...'

,Sections 9003.3 (a) (1)( i)" (ii) and (i ii) oCTine

11 of the Code of Federal Regulations state that a major party

candidate may accept contributions to a legal and accounting

compliance fund if such contributions are received and disbursed

in accordance with this section. A legal and accounting

compliance fund may be established by such candidate prior to

being noninated or selected as the candidate of a political party

for the office of President or Vice president of the United

States. Contributions to this fund shall be subject to the

limitations and prohibitions of 11,~FR" parti 110, ll~ ~nd 115. .... . ....:.., ...~. .

Further, funds rece~ved during the matching payment

period that are remaining in a candidate's primary election

account, which funds are in excess of any amount needed to pay

remaining primary expenses or any amount required to be reimbursed

to the Presidential primary Matching Payment Account under 11 CFR

9038.2, may be transferred to the legal and accounting compliance

fund without regard to the contribution limitations and used for

any purpose permitted under this section.

Finally, contributions that are made after the

beginning of the expenditure report period but which are

designated for the primary election, and contributions that exceed

the contributor'S limit for the primary election, may be

redesignated for the legal and accounting compliance fund and

trans:erred to or deposited in s~ch fund if the car.=idate obtains

the contributor's redesignat:on :n accordance with :: eFR 110.1.

Contrib~:ions that do not exceed the contributor'S limit for the

primary election may be redesignated and deposited in the legal

'.

Page 10, 12/27/94
to :."

7

and accounting compliance fund only if the contributions represent

funds in excess of any amount needed to pay remaining primary

expenses; the redesignations are received within 60 days of the

Treasurer's receipt of the contributions; the requirements of 11

CFR 110.1(b)(5) and (1) regarding redesignations are satisfied;

and the contributions have not been submitted for matching.

a. Fundraising Expenses Paid by the Primary

Committee

The Compliance Fund and the Primary Committee

utilized a common vendor for fundraising purposes for a period of

time. The Compliance Fund sent two fundraising letters to donors

of the primary Committee. The mailings included letters that

dealt with general election issues and requested a contribution to

the Compliance Fund. One of these mailings contained a photo of

the presidential and Vice Presidential candidates on the podium at

the convention which had bee~ promised in a~ earlier fundrai~ino

appeal by the Primary eommittee. The other mailing contained a-'

. lapel:· 'pi'no-whfoh had- al6")- °been protJl1s'e'd: in° an earhet' ollfa'Hin~ of 0 0

the primaryo Committeeo' Therefore, 'the mailOings served a function

fQr both the Compliance Fund and the Primary Committ~e. 0 The cost

of these mailings was allocated with the Primary Committee paying

.~,.;'~._~qf.oth.e -:~q~~~.•~~~ o~~e. o~_~~p}.~~nf~o".~~nd.. p.~~.I1,\ ~h~: r:~~aiJl;inog,.1,5\.:0 • ,

Documentation was not available detailing how

the allocation was determined. The Audit staff concluded that a

50% allocation between the two committees would be more

appropriate given the dual function of the mailings. According to

the invoices for these mailings, the total costs were $371,855.

Of these costs, the Primary Committee paid $316,751. If a 50\

allocation is used, each committee should have paid $185,927.

Based on this allocation, the Compliance Fund owes the Primary

Committee $130,824 ($316,751 - $185,927).

• •••••• '. 0 'r"heoCompl:iance Fund repre§entaUv'es1we-re made

. awareo of this matter at the exi t conference. . Subsequentl:y " the

Compliance Fund provided a letter from the vendor dated October

27,1993. This letter states, in part, that "[tlhis allocation

relates to two mailings made during the months August and

September, 1992, as to which the total cost of producing the

mailings were allocated by us based on the respective costs of the

fulfillment information and materials relating to the primary

campaign as compared to the cost of the components related to

GELAC [Compliance Fund] fundraising." However, this response did

not contain any documentation with which to verify that the

respective costs resulted in this 85% and 15% splito

The letter from the vendor also states that

the allocation was done by the vendor "in accordance with standard

accounting practice wit~ regard to allcca~ed c~s~s in accor~a~ce

with the prlnciples set forth by the American Institute of

Certified Public Accountants Statement of Positicn 87-2, relating

to accounting for joint costs of informational materials and

page 11, 12/27/94
8

activities that include a fundraising appeal."

The Statement of Position explains that it

does not specify any allocation method but only provides guidance

concerning when an allocation is appropriate. Further, after

reviewing this publication, it is the Audit staff's opinion, that

the guidance, to the extent that it is relevant to this situation,

could be interpreted to suggest that the Compliance Fund should

pay the entire amount.

Given that: (1) FECA matters are not governed

by this accounting publication, (2) the purpose of the publication

is not wholly on point, (3) the nature of the guidance contained

in the publication, and (4) the dual purpose of the mailing, a 50%

allocation is appropriate.

:....::" .. ~'. ... ." ,

the above, th~ 50%

diffetence between

·e·x.pense .:.. ,. '. " ".

The Interim Audit Report concluded that, given

a:lccation is apprcp~iate. Therefcre, the

50~ and 85~, or,$130,824 i~ a Co&pl~ance Fund . t. ...... •. • .... :- • • • .. :: _.' ..... ... • .......

c

. . . In'..tesponse to-t.he Interim Audit Repo·rt.'! the

,'~ c:ompliimce fund disagreed with the Colll1l1ission's determination that

, a 50% ,allc;>c,atio": wa,!} reasonab~~. ~e Co~plia.~ce Func;1 .stat~s tn~t . ' ~~::~'--~-';"'~EhE!~eo1airf'8'U"On"shouYd--lfoI16w-'l\e~rat'loh-U-Cn"tt06~11'a·Llft\d~·"·· "." ,',

, allocate on the basis 'of "the benefit reasonably expected to be .

C' derived". According to the information obtained by the Audit

staff during fieldwork, the two mailings in question took place

on August 22 and August 28, 1992, over a month after the candidate

received the nomination. The apparent benefit to the Primary

Committee was the fulfillment of a promise to contributors who

were to receive a pin or photograph as the result of having made a

contribution, and to thank contributors for their support. The

Compliance Fund had the opportunity to solicit contributions from

a group of known Clinton .suppprters a~ reduced cost. All . .... c~nt r:i:butitms' W'9 re: 01 r-eabid ':to ·t.he· CampI i a·nee· .f·und ;.' Tl'ius, " .

allocating only 50% 'of the' .cost to the Compliance Committee is a

conservative approach. A larger Compliance Fund allocation could

be supported.

The Compliance Fund is also critical of the

Audit staff not following the American Institute of Certified

Public Accountants Statement of Position 87-2. As stated in the

Interim Audit Report, after reviewing this publication it is the

Audit staff's opinion, that the guidance, to the extent that it is

relevant to this situation, could be interpreted to suggest that

the compliance Fund should pay the entire amount.

The Compliance Fund sent an affidavit from

Mitzi Dudley, the treasurer of Strategic Political Response.

AccordinG to the a:fidavit, the croduction cost for the

fulfillm~nt material for the maiiing with the lapel pin was

$232,346 (88.9% of the total production costs of the mailing) and

the production cost of the reply elements were $28,791, or a total

page 12, 12/27/94
.'

.-,

'-

9

cost of $261,137. The affidavit states that production cost for

the fulfillment material for the mailing containing the photograph

was $106,782 and the General Committee's solicitation expense was

calculated at $17,872, for a total cost $124,654. Neither the

Compliance Fund nor the vendor provided any documentation to

support these amounts. However, on a reconciliation provided by

the vendor at the time of the audit fieldwork the cost of the

mailing that contained the lapel pin was shown at $252,952 and the

cost of the mailing that contained the photograph was $118,903.

There is no explanation for the difference in the amounts in the

affidavit and the documentation supplied during fieldwork.

According to the vendor and the primary Committee, they did

overpay this vendor by $12,558 for these mailings. The vendor may

have included part 'of the overpayment in calculating the $261,137

and the $124,654 totals.

Attachment 1 includes copies of the' actual

mailings in q~esticn. The letters === both mailings are very

simi~ar. Bot~ had return 'envelopes that shbw·t~e Cllnton/Gore

• ,Coapl iance, '''lind as aodt'e-Sgee-.. 'Bdth 'irrc1 ud'e~ ll. 'RlIpid Rl!Spohse' "

'Action !'Iemo, '~ith t;.he- Compliance Fund address, a' reference to

George Bush and pan Quayle, and a solicitation to "Please make

personal check. o~t .to CLINTON/GORE CO!'lPLIANCE FUND". ,The reverse

side qf the memo reque~ts .contr~Qutqr.ipf~rmat~gp, pnc~.~gaip .. . .-----reque s't.s·'~ont-rfbuto d ''t.o{·liii'b, the-fr-'cJrae'k-payab"fet-o-"'-'tne---'......_._ .. '._"'-

Compliance Fund and notes that it wa's authorized and, 'paid by the

Compliance Fund. About 60\ to 70% of the letter deals with the

general election. There are two separate requests within the

letter for contributions to the Coapliance Fund. According to the

vendor, "the General Committee's solicitation expense was derived

by allocating 20 percent of the cost of the letter (roughly

equivalent to the percentage of space that the solicitation took

up within the letter) to the solicitation" .

. Based on the informatiqn provided by the

".' ·Comp.liance ..Fund,···t·ne ;,SO\>· allo·c·a:t.ion.ls more' than Teag01'l.cible and

consistent with the Commission's regulations.

Another project, performed by this vendor at a

cost of $69,660, was paid entirely by the Primary Committee. This

project was for a compilation of contributor information to create

a "Master File." Over 90% of the cost was incurred on invoices

dated after September 16, 1992 according to available records.

The Primary Committee had utilized another vendor to handle the

majority of its receipts processing and to provide the Audit staff

with the required computer tape containing the contributions and

disbursements for the Primary Committee. Also, Compliance Fund

representatives requested and received a magnetic copy of that

information from the Commission. Based on this information, the

Interim Audit Report concluded that the entire amount should have

been paid by the Compliance Fund.

Page 13, 12/27/94
--<,~. "' ..

,...... •_ I

10

In response to the Interim Audit Report, the

Compliance Fund submitted an affidavit from Mitzi Dudley.

~All master file work was performed and invoiced to the

Primary Committee by Strategic Response as contractually

required and in furtherance of our understanding of

primary Committee purposes. A primary purpose of a

master file is to compile in computerized form all

pertinent information on r~sponses to commuftications

sent by a particular entity for the purpose of using

those response [sic] to determine the nature, frequency

and recipients of any further communications. [sic] A

master file is commonly a master record of all donors

and other responders to such communications with a full

history of the time and nature of their responses

including, but not limited to, the date of all :

responses, the amount of dcr.ations [5:=] made (if any),

'.and pertinent other informa~ion about such responses

I'. '" t e _g.~'.,. ·.s..~PPQ r t·, for .,pM t·iclila-r· '-pq.s it-i.ORc,,' '&eIK:ce' .•' .'.. ' .• ',•.,', ' .. . 'info-rma~ion denoting the criqin,ation of' the responder,

and, other demographic and bepa~ioral ~~formatioR

attr'ib'utable ,to a responder as. available). A master

.. ,o--':'<";';'V~;~~~li~~e~~~-ai:-i~~~;~:~;':~·~~iti~f.··~~~i~~·";~~~:~!~·_··~~'··""_ ,"historical document as well as providing an important

record of those people who are most likely to respond

again in the future. The existence of a master list of

potential future responders is crucial to a Primary

Committee who may need to continue soliciting

contributions beyond the candidate's nomination date to

payoff primary debt. In the present case, our

understanding was that the Committee was in fact

concerned that it would have a serious Primary shortfall

and would be forced to raise funds ~ell past the ~ConV'E!'nt~'O,TI.~ , ,:' " , ,',' ,;.• ,'. '..'. '.

The affidavit also explains that responses

from primary solicitations continued to flow into the campaign

through at least November 18, 1992. "After all responses were

keyed as of that date, the master file then needed to be finally

built, cleaned and updated." The processing required to complete

the building of the master file stretched into December and it was

only after the work was complete that the vendor received a bill

from the data processing contractor.

From the information provided during the

fieldwork, the primary Committee's first fundraising mailing by

this vendor was May 18,1992 and the last July 17,1992. The

Primary Committee paid for data entry and caging of the

contributions received. The earliest i~~cice was dated June 3,

1992 and invoices continued through November 25, 1992. The

Primary Committee paid over $140,000 for this activity, of which

$55,000 was invoiced after September 16. In fact, the primary

Page 14, 12/27/94
11

.-

... ...

Committee overpaid by $24,500, which it later recovered as part of

a $49,856 refund. None of these charges are part of the $69,660

for compiling the Master File. From information obtained during

fieldwork, the Compliance Fund's first invoice for data entry and

caging was dated October 21, 1992 and its last fundraising mailing

was on October 9, 1992. The total amount the Compliance Fund paid

for data entry and caging was approxiaately $80,000. The

Compliance Fund did not present information to show that they had

paid for any Master File charge~.

The response does not establish that this

project was part of the original contract, cr was related to any

Primary Committee fundraising effort. Indeed the primary

Committee had concluded that it was solvent in AuguSt of 1992.

However, the information available does not establish the Master

File as a Compliance Fund project and, accordingly, it is not

included in the amount due to the Primary Committee.

The Audit staff id~ntified ano~Her vendor to

" ' ,.., .. -wlt-iah the..,pr imtn;y Committee 'paid $1,7 2Q ~O" ctef-r-ay. ~6mpli,an<:e. Pund -' .

'. - expenses. The Compliance' Fund has acknowl.edged that this 'amount

is owed to the primary Committee .

._., .... '" Therefore, t~e pr~.marY.<;9.~itt~e I:ta.s p.aid a ~'";:"-.' ··..··tb1:al·~f-"'$1.S2·,-54'"4 '( $1.30~'824 , ..."$1 '7-20 l i'Ii'.xpenses ''whtciLsndJll'd~

have been paid by the Coapliance Fund.

, "",'

. '

b. Funds Redesignated from the Primary Committee

'-.

The Compliance Fund received $2,444,557 in

contributions which were redesignated and transferred from the

Primary Committee. The Regulations, as noted above, require that

contributions designated for the Primary Committee and made after

the beginning of the expenditure report period cannot be

transferred to the Compliance Fund unless the contribution is in

ek1:ess 6£ the contrihtf~'r's primary 'limitation; or, rtt~,::,,·: ' contributions are in exce$s o~ funds needed by the Pr-~mary

Committee to pay remaining expenses. The Primary Committee did

not have sufficient funds to pay expenses until receipt of a

Matching Fund payment on September 2, 1992.

The amount transferred from the primary

Committee to the Compliance Fund included $1,519,049 in

contributions received from the Compliance Fund's inception

through September 2, 1992. The Interim Audit Report concluded

that only $222,532 of these transferred contributions represented

either excessive contributions to the Primary Committee or

contributions intended for the general election; $66,846 prior to

July 16, 1992 ar.a $155,686 subsequent to July 15, 1992.

Therefore, the Interim Audit Report stated

that the Complia~ce Fund received $1,296,517 \$1,519,O~9 -

$222,532) in impermissible funds from the primary Committee.

Page 15, 12/27/94
...' ....

12

Subsequent to September 2, 1992, the Primary

Committee received approximately $1,025,000 in contributions. Of

this amount, approximately $924,000 was redesignated to the

Compliance Fund properly under 11 CFR S9003.3(a)(iii) and is not

questioned at this time.

In response to the Primary Committee's exit

conference, primary Committee representatives stated that they

dispute the auditors' assertion that these contributions could not

be redes~gnated to the Compliance Fund. They further stated t~at

this assertion is contrary to law. The contributors properly and

legally designated those contributions in writing for the

Compliance Fun.d pursuant to 11 eFR 5110.1 4/, and the auditors

cannot prohibit the Primary Committee from~maintaining those

contributions in the compliance Fund.

With respect to the propriety of the

redesignation, the !nte~im Audit Report state= that II eFR 5110.1

is not .the tel.evant. regulation. 'That regulation specifles the

_::--. :: ..•. _.: proo.ednres.._d -t>.ime .lim-i·t;a-tions-~at ·apply·t<Na:·.reliesi'g'Ratio'rr·trtnm '.,

. e redesisnation is appropriate:' As sta'teq above, .11 C~R' .'

S-9003 ..3(a)(1)(ii.i) cl:e.arly· states that th-e redesignat:i.ons purs\led··

by the primary eo~ittee were not permissible .. That section

states that only if no remaining primary expl;ln:se.s are to, be f?ai~" . ~,_a....:'-, ..'.' .'fAa:f"p"'?:r'il'IifY:l:orih1bU't: 1oil's--n~~·1n·~tt~s·S';.t~"!:the·· 'tontd-but61i'i1.imf't.:: ..'.:.':,:..

be redesignated to the compliance fund. The de~inition~f

remaining primary expenses is clearly stated in 11 eFR S9034.1(b)

which speaks to remaining matching fund entitlement. That

definition states that remaining net outstanding campaign

obligations is the candidate's net outstanding campaign

obligations on the date of ineligibility less nthe sum of the

contributions received on or after the date of ineligibility plus

matching funds received on or after the date of ineligibility."

The Interim Audit Report also explained that

the defi'niti'on -ang. the calculation' o~' 'remaininq 'enti:tl-e'meht to· .:

which the Primary Committee objects enjoys a long ana consistent

history in Commission regulation and practice. This

interpretation dates.to a December 1976 memorandum to the

Commission proposing an amendment to then section 134.3(c)(2) of

the Commission's regulations. This proposed regulation stated

that "a candidate shall be entitled to no further matching funds

if, at time of any submission for certification, the total

contributions and matching funds received after the ineligibility

date equals or exceeds the net obligation outstanding on the date

of ineligibility."

The 1979 Explanation and Justification of 11

eFR S9034.1 explains that for candidates who have net outstanding

campaign obligations on the date of ineligibility, "lblasical1y,

~/ Although primary Committee representatives cited 11 eFR

SllO.2, the Audit staff presumes they meant 11 CFR 5110.1.

Page 16, 12/27/94
- ......--.;- --..-;-;;.--

...'

c.

c

t.0

c

13

these candidates are entitled to payments only if the private

contributions received between the date of ineligibility and the

date of submission are not sufficient to discharge the net debt."

A simplified example of the calculation follows the explanation.

Finally, it is explained that this regulation "furthers the policy

that the candidate should use private contributions to discharge

campaign obligations wherever possible." The 1983 Explanation and

Justification for the same provision states that the section had

"been revised to state that to receive matchinq funds after the

date of ineligibility, candidates must have net outstanding

campaign obligations as of the date of payment rather than the

date of submission. Thus, if the candidate's financial position

changed between the date of his or her submission for matching

funds and the date of payment reducing the candidate's net

outstanding campaign obligations, that candidate's entitlement

would be reduced accordingly." This revision reinforces the

requirement that private contributions received must be applied to

obligations pr~o~ to the receipt of f~~ther ~a:c~ing f~~ds. The

1991 E:xpfanatidn and Justifica"tion for 11 erR S9003.3 states that

-. "" "ccn-tli.b1itions' tedesignat~d'"must reptesent '!ond" ';'1\ ext"ess o'f'arry:

amount' 'needed .to p~y remaining" prima-ry expenses.. I f this .. " .

'requirement is noe met, the committee would have to make a

transfer back ~o tbe primary account to cover such expenses."

.; .: "'. ....;. ..- ,~ .. ,: ..:.. .." . .. . . ....~. ." .. .. ;: . "" "Final-ly,each . ~dition'of the "Gommissidn'-s-o'-- - --_

"Financial Control and Com liance Manual For Presidential Primar

Candi ates Receiving Pub ic Financing, beginning with the irst in

1979, has, in some form, provided, an explanation and example of

the calculation of a primary committee's remaining matching fund

entitlement applying private contributions first and then matching

funds.

The Interim Audit Report concluded that the

Primary Committee's positio~ is inconsistent with the plain

. me~ning }?f tf:e Commissic;ln's Regulatio,ns cc;:incerning post. '" .' ineli'gibiH"ty date "lIlatching'"fu-nd enti tle'ment as well:- as' the long

established Commission practice and policy~

The Interim Audit Report recommended that the

Compliance Fund provide documentation and any relevant comments to

demonstrate that the above mentioned transfers were permissible.

Absent such a demonstration, the Audit staff recommended that the

Compliance Fund pay $1,296,517 to the Primary Committee.

In response to the Interim Audit Report, the

compliance Fund puts forth several arguments why no repayment is

due. To begin with, the Compliance Fund argues that the

contributions in question were not primary contributions but

rather were for the most part undesignated contributions received

after the date of the primary election and pursuant to the 11 CFR

SllO.1 general election contributions. As general e:e~tion

contributions, the Compliance Fund contends that no redesignations

were necessary to transfer the contributions from the Primary

Committee. The response notes that the primary Committee's

page 17, 12/27/94
14

vendor, who processed these contributions, treated them as

"redesignations" without the primary Committee's knowledge. The

explanation suggests that due to provisions in that vendor's

contract, the vendor stood to gain by sending the redesignation

requests.

,. ...... : .' .

,.

-',

In support of their conclusion that no

repayment is due, the Compliance Fund, using its interpretation of

the provisions 11 eFR SllO.l, submitted calculations of amounts

that could be consider~d general election contributions without

need of redesignations. The calculations included lists by

deposit date and number of any amount that was considered to

represent general election contributions. The lists were divided

into three categories; contribution checks made payable to Clinton

for PresidentSI with an unsigned primary contributor card attached,

contribution checks made payable to Clinton for President without

a contribution card attached, and contribution checks made payable

to other than Clinton for President with or ~itho~t 3 contribution

card ·attache'd. The. Compliance ·Fu"rrd' s 'analys"is includes

:-'-""" .... ·.contJ;.ibut.i.o~s··t.ftt,Ougl1.par;t. Qf··"anu<lr~ ,CJf· ·1·9'3,·; ...~1l· beyon~·,the

relevant per·iod !or ·-determin,ing ·the· amoun't, of eontri:butrons 'that·

IIIlJst be applied to the primaqr" debt,. and conclru'des' that $2,773,327

i~.contributions deposited into primary accounts are actually

general election contributions. The Comp-}iance Fund atated that -'~.-''ctrpi'es"'o"f'-''tlY'r' oon~t'ibution--'ch~lS-.~upplittlh~ tbe]:'("analY'sH 'W'ete' ., ' ..

available for our review at its Counsel's Offices.

The Compliance Fund's response goes on to

state that the redesignations received serve to make clear the

contributor's intent in any case where the contributor's intent is

unclear from the contribution check.

-',

'-

The Audit staff concluded that the Compliance

Fund's analysis was not consistent with the provisions of 11 CFR

S110.1, not consistent with the mat=hins f~nd regu:a~ions and the

post·· da~t! of ineli g i bi lity ;matching fund' ent i tlemen t· sY-Ste1l!;' ahd'

not consistent 'with the primary Committee's treatment of· these

contributions.

As noted, section 110.1 of the Commission's

regulations stat~s that to be considered designated to a

particular election a contribution must clearly indicate the

election with respect to which the contribution is made, In the

view of the Audit staff, the majority of the contributions in

contention are so designated. By the Compliance Fund's

calculation over $2.2 million of the $2.8 million in post date of

~/ Included in this and the following category are checks that

include Clinton for President in the payee. Thus checks

payable tJ Clinton for President Committee, Sill ~l:~ton

for Presldent, Clinton for Preside~~ Campalgn, and other

similar combinations are included.

Page 18, 12/27/94
15

ineligibility contributions were made payable to the Primary

Committee and $1.6 million of that was photocopied with a primary

Committee solicitation attached. The Primary Committee and

Compliance Fund have different and distinctive names, Clinton For

President Committee vs. Clinton/Gore '92 General Election

Compliance Fund. Each entity had its fundraising appeals that

made it clear which committee was soliciting the contributions.

Each committee is a separate entity, has separate accounts, files

separate reports with the Commission and has different funding

sources. Therefore, the Audit staff stated that a check made

payable to Clinton For President is designated in writing for the

primary election and to conclude otherwise would be inconsistent

with other provisions in the matching fund regulations. As

explained above, the Commission's regulations have for many years

held that after the date of ineligibility private contributions

must be applied to a primary campaign's deficit before any

matching funds may be received by the committee. The Audit staff

concluded that to allow ~cnt=ibutio~s. solicitej by, ~ade ~ayable

to, received by, and deposited by the Primary Committee may be .. t-r:ausferred whole&a+l! to'~ Compli'a!'l~e'P'u'nd {s· completely' :

incoo"SiS"tent wi th ·the matching' funtJ· regulations.. Ra~her than

minimize the amount of post !:fate of in~l:i..gi-biltty matching funds

.paid to a candidate suth an interpretation .would encourage

~; .. ' ., C.~P~~ig.~;;~~...t;lo.maniI?,;~.att~'f.~.lieti'~i.'1.0n.trfiba~tit?ns )n,.$.~h. a way a~...to, ... ~-.'._." ~··~-···'···-ma:l... mi'Z...·ctue r- ··t'"ece ...v u·· lila cu::Lng un s. . , ,-.:-~

The Audit staff analysis also concluded that

other sections of the Commission's regulations governing the

matching fund program support the Commission's interpretation. In

11 CFR S9034.8(c)(7)(iv), it is clear that when dealing with joint

fundraising by publicly funded campaigns, contribution checks made

payable to a particular participant are considered to be earmarked

or designated to that participant. The case at hand is similar.

The contribution is made payable to a particular committee. The

difference is that 11 CFR §9003.3(a)(I)(iii) prohibits the . redesii]nrtions .•., , .' ': .....

Section 9034.5(a)(2)(i) of Title 11 of the

Code of Federal Regulations defines cash on hand to include all

contributions dated on or before the date of ineligibility. This

includes checks received on the last day of ineligibility, but

deposited after the date of ineligibility. The Compliance Fund's

analysis of the Primary Committee's contributions includes as

general election contributions some contributions dated on or

before the date of ineligibility. Finally, section 9034.2 of the

Commission's regulations define, in part, a matchable contribution

to be one that is dated, physically received and deposited by the

candidate, or any of the candidate's authorized committees, on or

after January 1 of the year immediately preceding the calendar

year of the Presidential eleccion, but no later than December 31

follo~ing the matching payrne~t pe=iod, and ma8e payable t~ the

candidate or his or her authorized committees. The Audic staff

concluded that follo~ing the Compliance Fund's analysis none of

the contributions dated after the date of ineligibility should

page 19, 12/27/94

.. .: ".
16

have been submitted for matching by the Primary Committee. To

match such contributions would suggest that contributions intended

for the general election and transferable to the Compliance Fund

could be matched for the Primary Committee.

In the opinion of the Audit staff, the

Compliance Fund's own analysis was inconsistent with respect to

these contributions. The lists supporting those contributions

made payable to Clinton For President begin ~ith deposits on

August 6, 1992~ The apparent reason is that the Primary

Committee's final matching fund submission contained contributions

deposited through August 5, 1992. A sample of the contributions

deposited between the date of ineligibility and August 5, 1992,

was selected and examined to determine if those contribution

checks were different with respect to payee or election

designation. No difference was noted. Thus it appears that more

significant to the Compliance Fund's analysis than an express

election desiqnation, is ~~e~he: ~~e Pri~3:Y C~~~:~:ee s~brnit~ed

the contribution ~or matchihg. Even .more reveal~ng was'a reOie~

.. ·of'·:-the, ~on.t".'i.eutionl5 -COQ ~a i rted- on .bhe- '~i.ma-ry..CQ.lIll1li-t te e! s J.·i-lit:' -0 f '. '.•

cont~ibution~- not:made pa~able to cfinton-For President and-now· .. ·c.onsid~re.d general e.lection contributiop.s .. Fit'st, ,a, number of . contributions are dated before the date of inel~9ibility and are, . . therefcire,-considered cash on hand for NOCO purpose~, Second, a -"--'-~""~"'~" ~~s po"t-"6fiec-lt'Of'\:hif contrttnrtfons" .oft.· ~n1 s '1 rs~ tta ted"' ~It·eY'·t1i-e-'d~te.':' •

0'.· of ineligibility and deposited before August 6, 1992 indicates

that the majority of the contributions were submitted for matching

and matched. In the opinion of the Audit staff, the Compliance

Fund cannot have it both ways,

....

,.: ,.'

'J)' " •

The Compliance Fund's response to the Interim

Audit Report goes on to argue that in August of 1992 the Primary

Committee made a calculation of the cut off date beyond which no

further matching funds would be sought. The Compliance Fund

contends that this ~s~imate was r-ade witho~t bene:it c: hindsight

or' the- -r-esul t.s ''of 'the '"crudi t·, .. As' a re-sul t.,·' tbe C"olIlpli·a01:e'.;l"und ,<

states that fewe.r contributions were raised for the Compli<iOce

Fund than would have been the case had the Compliance Fund known

the position that the Commission would take with respect to post

date of ineligibility contributions. The Compliance Fund argues

further that to require the transfer of funds back to the Primary

Committee would result in unfairness to the Compliance Fund

because it may leave an insufficient amount to pay continued

general election winding down costs.

This argument appears to refer back to the

primary Committee's response to this issue at the exit conference

and its la~er response to the exit conference. As explained above

and in the Interim Audit Report, in the opinion of the Audit

staff, the Primary Committee's calculation was not in accordance

with the Commission's current re~u:a~io~5 0: ~O~? standi~g

practice. Therefore, for the Commlssion to forgo the transfer

from the Compliance Fund and the recapture of matching funds in

excess of entitlement from the Primary Committee, would constitute

page 20, 12/27/94
17

a matching fund subsidy for the Compliance Fund. Such a subsidy

would be well beyond the statutory scheme.

The Compliance Fund also objects to the

application of both private contributions and matching funds as

each is received rather than accounting for matching funds at the

time of submission. The Compliance Fund notes two p@rceived

problems with this system. First is the uncertainty of a

committee's rrivate contribution flow between the time a subm~ssion'is made and the time matching funds are paid. The

Compliance Fund contends that it is possible for a candidate's

matching fund entitlement to change significantly between those

tw~ dates making the determination of when no further funds are

needed impossible. The Compliance Fund suggests that a better

approach would be to include matching funds in the calculation at

the time of submission. As explained above and in the Interim

Audit Report, the system in place furthers the goal of having

campaigns, to the exter.t F~ssible, pay debts after the candidate's

date of ineligibility with private contributions. As for knowing

when no furthel.' matching fund's are'· needed~ 'it ig t'h~ colll1ll'it·t·ees ."

·that are in the best position' to know if any matching fund

enti tl,ement remains. I t is' the commi tt.ee,s that know on a current

basis what changes' may have occurred with respect to their NOCO,

.~ what contributions have been rec~~v~d and the amount of ~ny

--"--,,,~._·~·..:..--.-peiidiii'9-"-il~t"ctii~c( fun.d '1di&Di:tssfo'i-i:" .... ~.. . '.: .... ; ..... '. ..' '-<~

'\ .......

,~

.j t .

Secondly, the Compliance Fund suggests that

the current procedure is unfair to the candidate who processes

contributions more slowly. The Compliance Fund uses as an example

a case where contributions received one month are not processed

until the next, causing a delay in the receipt of matching funds

for those contributions. The alleged inequity that the Compliance

Fund addresses occurs if the candidate is able to raise sufficient

private contributions to liquidate his NOCO before having an

oppo~tunity to s~bmit the 'earlier contributions and have them

matdle·d·..' Again ·the Comml·~s±on's long stAhtling pollcy is to .'

encourage committees to use private contributions to pay campaign

debts. The Compliance Fund's suggestion to make the entitlement

calculation at the time of submission rather than at the time of

payment would maximize the receipt of matching funds, while

potentially leaving the candidate with surplus private

contributions received after the last matching fund submission is

made.

As a final point the Compliance Fund includes

a footnote that states:

"The Committee believes that the Commission's approach in

this regard is inconsistent with the legal concept of

'entitlement.' A candidate who qualifies for matching

funds is entitled t~ receive then in a~ a~~unt eGua: to

matchable contributions raised up to 50% of the

expenditure limitation. 26 U.S.C. S9034. The process

would be far less costly and simpler to administer if

Page 21, 12/27/94
18

the Commission, as envisioned by the statutory language,

were to match qualifying contributions up to the 50%

limitation and seek a ratio surplus repayment once all

obligations have been satisfied. 25 U.S.C. S9038(b)(3).

In fact, if the Commission followed the statutory scheme

it may be possible to resolve the audits within the six

months contemplated in the surplus repayment provision.

Id. "

.... -." .",

The Compliance Fund's'Counsel's highly

optimistlc analysis of the benefits of the recommended change in

approach aside, it is noted that the C0~~ission considered and

rejected just such a system in the course of its 1987 amendments

to the Matching Fund Regulations. More recently, a July 8, 1994,

opinion by the u.s. Court of Appeals for the District of Columbia

in Lyndon H. LaRouche and LaRouche Democratic Campaign '88 v.

Federal Election Commission is relevant. In that decision the

Court quotes 12 crR S9034.1 I b\ co~cerr.:~g t~e application of

pri..-ate·.contributlorts to a candidate'~ NOCO and st'ates:

.~ ...

\. :

...... . .'

, . :_'..~".': .'.•."," • ._ .• ' • -:" ....>: .". t: .... '- a.", .•. ' :...,- .,

"This language.would appeax;,·to be db;po~;-itiv·~. ·A······

candidate is entitlep to rece1ve post-DOl ~atching'

payments so ·long as net campaign obligations remain

outstanding; and the regulation defines a candidate'S . ~~ ....;,~.~ .~,' ""'r~lRnrrlng(AOC6P" ~sh~~df!f1!i~n{:~'-'be-tireen'hea-"ouri{'

of his original NOCO and 'the sum of the contributions

received ... plus matching funds received.' ... Whenever

the sum of his post-DOl receipts equal the amount of his

NOCO-whether those receipts be in the form of private

contributions or matching payments from the public

fisc-his entitlement to further matching payments comes

to an end. Even if we were to find the regulation

ambiguous, which we do not, we would still have to

accept the Commission's interpretation of section

903~.1(b) unless. we found i~ 'plai~ly i~consistent ~ith

the word~ng of· the regu-la't·ion·,'·. :.' whi'eh it·'tes· not';;'

"Having concluded that the Commission's

interpretation of its regulations is not merely

reasonable, but compelling, we must determine whether

the regulations, as construed, represent a permissible

interpretation of the Act."

"Here, petitioners have failed to cite anything in

either the language or structure of the Act that would

render the Commission's interpreta~ion of section

9033(c)(2) unreasonable. To the contrary, its

provisions make it clear that Congress wished to

restrict the availability of match:ng payments to

candidates it consider[sl viable. Thus the Act

ex~res51y limits the class of those ~hc are elig:ble for

funds, 26 USC § 9033, and i~ withcraws the eligibility

of candidates who fail to receive at least ten percent

vf the vote in two successive primaries. Id S

Page 22, 12/27/94
c

c

19

9033(c)(1)(B). Under the circumstances we fail to

discern why it is impermissible for the Commission to

adopt a regulation that terminates post-DOl matching

funds as soon as a candidate has received sufficient

funds from private and public sources to liquidate his

NOCO, whether or not they are so used."

Although President Clinton did not become

ineligible due to a failure to receive 10% of the vote in two

consecutive primaries, once he had passed the date of

ineligibility the provisions of 11 CFR S9034.1 are applicable and

as the Court concluded, consistent with the statutory scheme.

After considering the Compliance Fund's

arguments and examining the documentation assembled to support

their calculations, the Audit Staff again reviewed the

composition of the $155,686 allowance for contributions

transferable to the Compliance Fund included in the ~nterim

··Audit Report calculationS. That allowance included $34,585 1n

excess i ve con t r i·boc-ions .rede'Signa ted. to the Compl·iance· FUnd;' ..

$52,357 speci fically desi'gnated to the· CompHance Fund by vi r~ue

of the payee or a. notation on the check's memo ~ine, and $68;744'

. in con~ributions that were made payable to a non-specific payee

(e.g. Bill Clinton, Clinton Team, Clipton Campaign, etc.), dat~d . . . . "':a"fte r--'tl1'Epa-a.te· 0 fine'li rbll'f'ty", ~an'd ·'fiot 'associ a te(1 '"irtri---~ny--'"': -' .,

solicitation. In further review, it was learned that many of

the contributions in the non-specific payee category deposited

after the date of ineligibility and through August 5, 1992 were

submitted for matching by the Primary Committee and matched.

This is in accord with the Commission's Guideline For

Presentation In Good Order and Regulations which state that a

matchable contribution is to be made payable to the candidate or

his or her authorized committees. Thus it was apparent that the

primary Committee treated contributions with such payees as

primary contributions. The Audit Staff could see no re?son to , ·challenge.that tr~atment, The amount ~hat is cal~ula£ed as' ,

trans£erable to. the Compliance Fund from contributions received

and deposited by the primary Committee after the date of

ineligibility and through September 2, 1992 was $99,806. That

amount consists of $34,585 in redesignated excessive

contributions, $56,792 in checks made payable to or otherwise

designated to the general election campaign, and 58,429 in cash

contributions identified during the review of records made

available with the Compliance Fund's response to the Interim

Audit Report,

For the above stated reasons, the Audit staff

concluded that the Compliance Fund owes the Primary Committee

$1,353,397, The Audit staff determined this figure by reducing

the $1,519,049 in contributions included in amounts transferred

from the Prima~y Committee to the Compliance Fund by 566.845.

which represents excessive contributions or contributions intended

page 23, 12/27/94
20

for the General Election received prior to July 16, 1992; and by

$99,806, representing such contributions received between July 16

and September 2, 1992.

During the consideration of the Final Audit

Report for the primary Committee on December 15, 1994, the

Commission considered the question of the application of private

contributions to the Primary Committee's remaining net outstanding

campaign obligations as of the date of each matching fund payment,

versus treating most- post date of ineligibility contributions as

containing no election designation and therefore transferable to

the Compliance Fund.

A motion was made to support the Audit staff

analysis requiring the application of private contributions to the

primary Committee's remaining net outstanding campaign obligations

before the payment of further matching funds. That motion failed

by a vote of three to three ~ith C0mmiss:~~e:s P0tter, ~~liott and

Aikens Vt>tfng iO-'faV"Or' and Comm'issioners McD"onald, McGarry and

. ··'1'h"Qiaas· "o-t-inq·-a'gai:nst,,: -It: ..sec.ond 'raot:i'on' tn",C.bn6i:OIH·:<rlJ: ·pi:isI. "dat~ "':. ., "

~f in~li~ibility contr1butions,unmatchab1e unless specifically ..

oesign.ated fot: ,the pril»<lry elec:tion also failed by the salle vote.

As a result of these Commission votes, the Compliance Fund will

not. be r~gue~ted t~ re~urn $~,~53,397 to Primary Committee as . -. "'rec"ommEmae~~t)y';'~e'AuCii 't~tllf~:' ...•.. ." -, ......'\, '. ' :'.". ,.. , ..r'", •. ,.... '. :'.

B. Clinton/Gore '92 Committee

1. Apparent Prohibited Contribution

Sections 116.3(b) and (c) of Title 11 of the Code

of Federal Regulations state that a corporation in its capacity as

a commercial vendor may extend credit to a candidate, a political

committee or another person on behalf of a candidate or political

commit~ee provided'that the credit rs ex~ended iR the ordinary

,'cout'Se ·Qf· the"oHpota-tibn'lf busines!!:an£l··tne teri:a~' ate'. '" • "

substantially s'imilar 'to extensions of credit to nonpolitical

debtors that are of similar risk and size of obligation. Further,

in determining whether credit was extended in the ordinary course

of business, the Commission will consider whether the commercial

vendor followed its established procedures and its past practice

in approving the extension of credit; whether the commercial

vendor received prompt payment in full if it previously extended

credit to the same candidate or political committee; and whether

the extension of credit conformed to the usual and normal practice

in the commercial vendor's trade or industry.

The Audit staff reviewed an invoice from Chambers

Associates, Inc., in the amount of $117,316 for F~ofessional fees

and expenses. This invoice stated that it was "for services

performed and costs incurred prio: to the Novembe: :992 Genera:

Election." The General Committee paid this in'-'olce on March 19,

1993. It was also noted that this was the only payment made to

this vendor by the General Committee.

Page 24, 12/27/94

"
. .'

21

In response to the exit conference, the General

Committee provided invoices from the vendor to document in more

detail the $117,316 in expenses. According to these invoices,

expenses were incurred beginning in August and continued until the

time of the election. The General Committee also stated that

"Chambers Associates provided services in October related to

economic issues. The original invoice was submitted to someone on

the campaign staff in December or January but was misplaced. When

the ommission [sic] was noted, the Committee requested that the

vendor provide another invoice which was received and paid in

March." However, there was still no documentation from the vendor

to demonstrate when this amount was originally billed and any

subsequent billings or efforts to collect this amount.

Based upon the available information, the Interim

Audit Report concluded that the extension of credit for this

amou~t and length of time did nct aFFea~ :~ ~e in the ordinary

course of business and resulted in a prohibfted contribution

pursuant to'll'CFR S116.:3:;. . ...

The Interim Audit Report recommended that the

General Committee provide documentation, to include but not be

':- l.i}llited."~:C?,_ stat:e!lle~~s a!l~..~n:,<:~.ce~ ..~r.0!l1,~~~ :'El)d.~:;. de.t:~i~.iI).~".~J,,~ .. :. -~ _·_-_.......··: ..b!-11i·n·gs-ana...ef!ortsto col:lect th1s amoun't.; j(nd-.exp!.anat'10ns.:£.o _"

demonstrate that the extension of credit from this vendor was inthe ordinary course of business and did not represent a prohibited

contribution pursuant to 11 CFR SI16.3. The information was to

include examples of other customers or clients of similar size and

risk for which similar services hade been provided and similar

billing arrangements had been used. Also, information concerning

billing policies for similar clients and work, advance payment

policies, debt collection policies, and billing cycles should be

provided.

.".

'--- '_' I '.- .'. In r'esportse to tne'"'Interim Audi t Report·, Hie'

General Committee prOVided an affidavit from the President of

Chamber Associates, Inc., which states that:

"Our firm uses three methods of billing in its

normal course of business. One method is to bill by

project and to submit a bill upon completion of that

project. We are currently involved in two other

projects which are also being billed on a completion of

project basis.

"The bill was prepared and sent in January, 1993,

as soon as practical upon completion of the work we did

for the Campaign Committee, and was carried as an

account receivable along with other client bills which

were prepa~ed and sent at a?proxirnately the same t:rne,

Several factors contributed to the timing of the

billing. First, since so many travel and other

incidental expenses were incurred, we wanted to make

Page 25, 12/27/94

".
22

certain we had received all invoices so a correct

accounting could be made. Second, my assistant and I

took a leave of absence from our firm after this project

was completed for approximately two and one-half months.

I approve all bills before they leave our office, and

because this bill was very detailed, additional time

elapsed before I had the time to review it carefully.

Finally, once satisfied that the bill was accurate and

complete, it was inadvertently sent to the wrong office.

Our office then sent another invoice to the Campaign

Committee which was received and paid in March, 1993.

Accordingly, the billing was paid within 60 days of

issuance of the original invo~ce which is well within

the timeframe for receipt of payment from our

non-political clients and, accordingly, within the

ordinary course of ~ur business.

.. ..- .. •... .: .' ,

"For a billing which is straightforward and

uncomplL~ate~; the issuance of:an invoice wQuld occur nb

.: e a 1'1 iee- ·thaft :the. Don.th wl'lowing" -eolllpl et.i.ort·of- .tne-.· ...... .1. ,',

proje«t· (anytime from the H.rst th'tough ·the middl:e ~f .. '

that, ·.onth.). For.example, ev~n f.or a.pJ:oject C01llple'ted

in November, 1992, which did not requireextensiYe, :

complicated accou~ting of eXQeQses, our inv~j~~ ~ou~~ . . y ~''':.' 'T~~"~ '1i..ve··~i!!il: ·t6~idFe1iI-'IUl'A~itW·lIl:id~~C!'eiib-e.r,~.1'9ln.·. ~s· .... :·..,.··· .. ':' '.'-'-'

noted above, however',' this 'case involved a very complex

billing process because of the number of travel and

incidental expenses and the need to be especially

accurate in order to ensure that all expenses incurred

were properly accounted for and billed. Despite the

complex accounting required for this billing, the

invoice in this case nevertheless was issued within a

short period of time from the earliest possible date of

issuance had it been a straightforward, simple billing."

..... ,

- .....--- -

~J:; .... ;

. . ',' "'Ch-MI~rs Associat.e'$'·did··'!1ot provid,{:the Cam'paign

Committee with an extension of credit outside its normal

course of business. Moreover, as demonstrated above,

·there was no intention by Chambers & Associates to make

a contribution. All aspects of the billing process were

handled within the normal course of business."

'.'

Based upon the documentation submitted, it appears

that the General Committee has demonstrated that this billing did

not constitute an extension of credit outside of the normal course

of business. Chambers Associates, Inc. was able to provide names

of other clients who are billed under a similar arrangement and

was also providing services consistent with its normal business

practices, Given the above, the Audit staff does not believe that

the General Committee received a contribution resulting from an

extension of credit outside of the ordinary course of business.

Page 26, 12/27/94
23

2. Itemization of Refunds and Rebates

Section 434(b)(3)(F) of Title 2 of the United

States Code requires that each report include the identification

of each person who provides a rebate, refund, or other offset to

operating expenditures to the reporting committee in an aggregate

amount or value in excess of $200 within the calendar year,

together with the date and amount of such receipt. Section

431(13) of Title 2 of the United states Code defines, in part, the

term "identification" to be the name and mailing address of such

person. Section 431(11) of Title 2 of the United States Code

defines, in part, the term "person" to include an individual,

partnership, committee, associ~tion, corporation, labor

organization, or any other organization or group of persons.

The General Committee's receipt records were

reviewed by the Audit staff to determine whether offsets to

operating expenditures requiring itemizatic~ were disclosed

properly. The Audit staff noted problems with respect to the

disclE:lsure of ·rece i pts' f.ro~' Wo r ldwide 'l'rave1, _-Inc', (""Wor-ldwi'de·"):

The General Committee utilized Worldwide to handle biilings and

receipts relative to press and U.s. Secret Service travel. As

Worldwide received moneys, it would deduct credit card fees and a

commission for its pervices. The net amount would then be - -,·,--------"'e rahsf-en'ed·-to-"tillf-l;eneialCollllllirte'e. and re~d-r\:~_on~its_.... :--'~ '

'~- disclosure reports as a receipt from Worldwide. There were no

corresponding entries detailing the press organizations who

actually paid for the travel. In addition, credit card fees and

the fee charged by Worldwide for its services were not reported as

a related disbursement.

.,...,. --"

When apprised of this at the exit conference, a

General Committee official stated she thought that they had

received Commission guidance concerning this but said she would

have to check before she could respond .

Subsequent to the exit conference~ th~ General

Committee again stated that "Committee staff was advised by

someone at the FEC that its methods of reporting receipts for

press travel from Worldwide complied with the reporting

requirements of FECA." The General Committee also responded that

its "method of reporting is consistent with the reporting

requirements applicable when refunds and payments are received by

a committee through a commercial vendor."

The Interim Audit Report concluded that, since

Worldwide acted only as a billing/collection service, the amounts

received from each press agency and the Secret Service should be

disclosed on Schedules A-P as a memo entry to support each amount

received from Worldwide. In addition, adjustments for the credit

card fees deducted and commission charged by W~rldwide should have

been disclosed as memo entrles on Schedule B-P.

Page 27, 12/27/94
- ~.. ..

c

c24

The Interim Audit Report recommended that the

General Committee file amended Schedules A-P and B-P to disclose

the offsets to expenditures, credit card fees, and commissions.

In response to the Interim Audit Report, Counsel

for the General Committee states that "the Committee contends that

it properly disclosed these reimbursements as received from

Worldwide Travel and that further itemization is not required by

the Act, regulations or other Commission precedents. The General

Committee'S respons~ states that:

"2 U.S.C. S 434(a) requires committees to file

reports of receipts and disbursements. Generally, all

reporting under the Act, other than debts and

obligations is on a cash basis. The Commission has

addressed a virtually identical'issue to this one as to

disbursements made by presidential committees. In AO

[Advisory Opinior.] 1983-25, the Commis5io~ ccncluded

that t~e itemization of disb~rsemen~requ~remen~swere

-m.et when"a .publicly ·.fiPlanced· eampA.~n,·r-epo-rte-d'pil"ments" ~" '. '

to its ·medi·a vendor, 'and fut:ther' +leld that the committee

was no~ r~q~ired to itemize payments subsequentiy .ade

by the v~ndor on behalf. of the committee. ~hus,

, although co~i ttee vendors aJ;e requi red to maintain. .' " --:-~~-,---<-_." •• '-- .t:docu~h-':;aHo\n"·ot;·~f~ur~mel\t'ri' mau~ t"o':susv:tit1dorS'15ii ...:~ -:._-. ':.'"

behalf or a committee, the committee is'not required to'

report or itemize such disbursements. The collection

and receipt of reimbursements though (sic] a third party

vendor is indistinguishable from the situation in AO

1983-25.

"11 C.F.R. S 104.3(a)(4)(v) requires only that a

committee identify each person who provides a rebate,

refund, or other offset to operating expenditures to the

reporting committee in an aggregate amoun: or value in

"excess··.of $2"OO"wi"thi:n "t!he caleTniar ·yea~. Tne Commi:t-t:~e'

satisfied that requirement by reporting the receipt of

press and secret service r~i~bursements from Worldwide

Travel which was operating as a vendor to the Committee

in billing and collecting press and secret service

reimbursements. All records pertaining to these

collections were made available for audit as in AO

1983-25. The reporting requirements, however, were

fully met by reporting the receipts form [sic]

Worldwide. As in AO 1983-25, the Primary Committee's

travel vendor was a distinct legal entity which entered

into an arm's length commercial arrangement with the

Committee. Worldwide Travel was neither set up by the

prima:y Committee, nor was the primary Committee its

only client. It is and was an ongoing travel business."

"The Committee sought informa~ advice from the

audit staff regarding whether these reimbursements must

be itemized and was advised that they need not be. We

." ...

.. :.:.

page 28, 12/27/94
c

25

believe that advice was fully consistant [sic) with the

requirements of S 434(b)(3)(f), S l04.3(a)(4)(v) of the

regulations and AO 1983-25. The Committee believes that

the auditors now are taking the position that the

Worldwide reimbursements must be itemized simply because

most committees have collected these refunds themselves

and have not used a third party vendor to collect press

and secret service reimbursements.

"Although the Committee believes that its reporting

was in full compliance with the requirements of the Act,

the Committee has prepared amendments as directed by the

auditors itemizing the receipts from each press and

secret service entity to the extent possible, and will

be filing them shortly."

Advisory Opinion ("AO") 1983-25 addresses a media

vendor, contrac:ed by a committee to administer its media

production and media buys, and' who, in the course of performing . its duties' woultd IlI'8ke- disbursements to() various adve.rtising·- -' -

-enti ties. - In the case at hand, the General Commi ttel! paid for the

chartering of aircraft, maintained travel manifests which

identified the number of press, secret service and General

_.:!:o~~t.te.e P.,:r:.s~nn~t ~);~~~~i!l~ .o~, ~.)?arti,::~J,~r t~i~,. ~?d t~~. cqst :" ~-' o~-each- t:~ip. -Th"1.s·-lnforlllatlon-was -subsequertUy-_pro\1l.decLto______ _ -~~. ,

Worldwide Travel which acted as a billing and. collection agent for

the General Committee. The monies received from Worldwide did not

represent a refund of General Committee funds paid to Worldwide

Travel for services rendered. The monies represent refunds for

travel incurred by the various press organizations and Secret

Service personnel.

In AO 1983-25, the following factors were

considered significant in making its determination: (1) the

consultants ha~ a legal existence that was separate and dis:inct

from the- commi,ttee's operations; (2) the consultants' prin:ipals

did not hold any committee staff positions; (3) the committee was

conducting arms-length negotiations with the consultants that

resulted in a formal contract; (4) the consultants were not

required to devote their full efforts to the contract with the

committee, and the consultants expected to have other media

contracts with other committees and business entities during the

campaign period, and (5) the committee had no interest in the

consultants' other contracts.

Based on its responses and documentation provided

to date, the General Committee has not addressed all the factors

noted above.

Therefore, the receipts should have been disclosed

as refunds from the organization which was the actual sour:e of

those funds. The press and Secret Service were the providers of

the refunds to the General Committee. Worldwide Travel was merely

a conduit for the receipts of those refunds.

Page 29, 12/27/94
26

The General Committee also states that "informal

advice" was received from the Audit staff. The Audit staff is

unaware of any advice given i:.o the General Committee concerning

this matter. In addition, the General Committee has been unable to

identify the person who provided this advice.

Although amended Schedules A-P were not submitted

with its response to the Interim Audit Report, the General

Committee has recently filed amended reports that adequately

address this matter.

~. Reporting Gf Debts and Obligati6ns

Section 434(b)(8) of Title 2 of the United States

Code states that each report shall disclose the amount and nature

of outstanding debts and obligations owed by or to such political

committee; and where such debts and c~liq3tio;.s are settled for

less than thei.. ·reported amount or ~alue; a state-me·nt· as' to the

.;;;::'\'.,~". ·c.i.~mst:ance:s and ·CO!)di-t·io1l8·undar ....h.i·oh.·.&tich.dehts ()[·ooli1jat·i.on-s·· .. ,

. we-re' ex·tinqu·is-hed and- th~ 'Consideration t.hetefor: . . . .

c

Section 104.11 of Title 11 of the Code of Federal

.. _}I::~u,laJi~:m~_~:t?~e.;>,,:i~'J'~.:t.,. t~~t. d';!b}.~. _~~d,..o.Q~.i9.~tj.C?ps. o.w!!.d. Q~ 9.r:.

'. to' a 'poli'€1cai~comm1t'\::ee whtch rema1h·out'sl:.andltlg·shall f)e' .. '--

continuously reported.until extinguished. In addition, a debt,

obligation, or written promise to make an expenditure, the amount

of which is $500 or less, shall be reported as of the time payment

is made or no later than 60 days after such obligation is

incurred, whichever comes first. Any loan, debt or obligation,

the amount of which is over $500, shall be reported as of the date

on which the debt or obligation is incurred.

From the Audit staff's review of selected

disbursements, ....·e deten:\ined that the General ·Committee ·did rfot

····met~ti·ali¥ di"sclose'its 'dehts and"obli-gat'ioIls',on 'S<:hl!'dullf [i-Ii;·"

Our review of General Committee invoices and related payments .

indicated outstanding debts and obligations totaling $1,207,730

which were not reported as required on the General Committee's

disclosure reports.

At the exit conference, General Committee

representatives were provided photocopies of schedules deLai1ing

these debts and obligations. General Committee officials provided

no explanations for these omissions.

Subsequent to the exit conference, documentation

submitted by the General CommitLee stated that "the Committee

reported its debts and obligations as of the tIme the check

request was approved and received in the accounting department.

The Committee believes that its method of reporting debts ~as in

full compliance ~iLh the reporting requirements." In addition,

the General CommiLtee provided a detailed schedule listing the

dates on which the invoices were recorded.

Page 30, 12/27/94

.' . . .'.
27

The Audit staff found the General Committee's

response to be without merit. The Regulation determines when a

debt shall be reported. The date the obligation is incurred is

relevant, not the date on which a committee records an obligation.

The Interim Audit Report recommended that the

General Committee file amended Schedules D-P to disclose the

debts and obligations.

In response to the Interim Audit Report, Counsel

for the General Committee states that "subsequent to the exit

conference, the Committee provided the auditors with a schedule

listing the dates on which the invoices questioned by the auditors

were reported. The Committee sees no sense in amending its

reports to disclose information that the Committee did not have in

its possession at the time those reports were originally filed.

"The Committee does not d:s~ute that debts and

obligations in excess of $500 must be reported when the obligation

~s 'inturred.' 11 C.F.R: S 104.11. However, ~he Committee's

accounting staff which was responsible for ent~ring debts and

compiling the information to produce the debt schedules had no

information concerning those debts until such time as the

information Tegarding the debts was submitted oto·the accounting. -o_°'4e-pa rt"m-en"£ 0.- -The' courttee -is "'somewhat'mystified-as-to-howi'i"was

supposed to know about debts prior to the time they were entered

into the accounting system. The only way the Committee could have

done this during the course of the campaign would have been to

amend the prior month's debt schedule each month when the current

month's disclosure report was filed. Certainly it would be a

complete waste of time and serve no purpose to amend the debts

schedules now to move debts from one monthly period to another

monthly period."

In addition, the General Committee states that its

CPAdls~ussed this issue with a member of the Audit staff who

"acknowledged that the Committee could not very well report debts

of which it was unaware." The General Committee then concludes

that no further action regarding this recommendation is

warranted. "

Again, the Audit staff does not find the General

Committee's position to be convincing. While the Audit staff does

understand that something not known to the General Committee can

not be reported, it is noted that reports are not filed the day

after the end of a reporting period. Committees have a reasonable

period of time to insure that reports filed are accurate and

complete. Further, there is nothing to preclude a committee from

filing amended disclosure reports once additional information

becomes known. In addition, the review allowed a period from the

date of the invoice for delivery to the General Committee ~hen

determining which debts were to be reported. Thus, we believe that

the General Committee was allowed ample opportunity to receive

invoices and report them as debts as necessary.

page 31, 12/27/94
28

To date, amended Schedules D-P have not been filed

by the General Committee.

I. Findings and Recommendations - Repayment Matters

A. Apparent Prohibited Contributions

Section 9003(b)(2) of Title 26 of the United States Code

provides that in order to be eligible to receive any payments

under section 9006, the candidate of a major party in a

presidential election shall certify to the Commission, under

penalty of perjury, that no contributions to defray qualified

campaign expenses have been or will be accepted by such candidate

or anv of their authorized committees except to the extent

neces;ary to make up any deficiency in paymen~s received from the

fund.

. Section'9007(b)(31 ot Title 26 of the United Staces eoce"

.. ' .. ··stat.es . tnat if'.tne-' C'o1llmh;:si on ~e termine s· :t.,ha t;· the' .e-l"i-?i.ble : .,.': " "

candidates of· a 'major party o~ any authorized"c<mllli ttee of' soch··

'. candidaJ;.es a.ccepte.Q contr ibu.tions;. (othe r than .cont r ibu-ti.ons .to

. make up deficiencies in payments)' to defray qualified campaign

., _~XP~AS~S, it shall notify such.~andidate.of the ~mount.of the .:,~.:.. ......•. contHbU:tlons:"sO" id:epted·,-··A'tia.... S1.lch <:arfdidates-~sh~i1...pay \'€b·\.h~·--· .:.' .'-. :l

Secretary of the Treasury an amount equal to such amount.

,-..

Section 441b(a) of Title 2 of the United States Code

states, in relevant part, that it is unlawful for any corporation

to make a contribution or expenditure in connection with any

election for federal office or for any candidate, political

committee, or other person knowingly to accept or receive any

contribution prohibited by this section, or any officer or any

director of any corporation to consent to any contribution or

expenditure by the corpo~a:ion Prohibi~ei by this section. : ., !~ _ : "t.',,·· ." _.

In addition, Section lOQ.7(a)(l) of Title 11 of the Code

of Federal Regulations states, in part, that the term contribution

includes a gift, advance or deposit of money or anything of value

made by any person for the purpose of influencing any election for

Federal office.

Section 100.7(a)(1)(iii)(A) of Title 11 of the Code of

Federal Regulations states that for purposes of 11 CFR

100.7(a)(1), the term "anything of value" includes all in-kind

contributions. Unless specifically exempted under 11 CFR

100.7(b), the provision of any goods or services without charge or

at a charge which is less then the usual and normal charge for

such goods or services is a contribution. Examples of such goods

and services include, but are not limited to: Securities,

facilities, equipment, supplies, personnel, advertising services,

membership lists, and mailing lists. :: goods or services are

provided at less than the usual and norcal charge, the amount of

the in-kind contribution is the difference between the usual and

Page 32, 12/27/94
,,'

c

29

normal charge for the goods or services at the time of the

contribution and the amount charged the political committee,

Further, 11 CFR S100.7(a)(1)(iii)(B) defines, in

relevant part, "Usual and normal charge" for goods as the price of

those goods in the market from which they ordinarily would have

been purchased at the time of the contribution.

During the Audit staff's review of disbursements and

offsets to expenditures, we identified nine transactions which

appeared at the time of the Interim Audit Report to result in

prohibited contributions to the General Committee. The total of

those apparent prohibited contributions was $153,625. A

discussion of the circumstances surrounding those transactions

follows:

1. Donated Equipment

Included with invoices to support a payment to a

General Committee vendor were additional invoices which indicate

that the vendor donated sound equipment for use during a rehearsal

for a press conference to be held in Atlanta, Georgia. The stated

value of this donated equipment wa~ $1,070. The General Committee

_~ wa.s J?rovidec?- do~umen1;!ltion r~l~tivfif to. thi.s m?tter. during . . • fYe'ti!worlc.----The-·1Datte r -"'as-a-lso-~dd re~sed" a t_'l:he__ exit __ conh_~ejtc~

Subsequent to the exit conference the General

Committee stated, "as is customary practice for the company, the

equipment for the rehearsal was made available at no charge

because it was not rented for that time."

The Audit staff was not aware of the customary

practice for prOViders of sound equipment. Absent a statement

from the vendor demonstrating that this was indeed customary

practice, it was our opinion that this transaction resulted in an

in-kind contribution of $1,070.

The Interim Audit Report recommended that the

General Committee provide documentation to include a statement

from the vendor addressing this matter, and any relevant comments

to demonstrate that it did not receive an in-kind contribution

totaling $1,070.

In response, the General Committee prOVided an

affidavit from the President of the company. He stated that

"concerning the use in question, I arrived at the event location

and began setting up for the scheduled event. In the course of

doing so, I noticed that the Committee was holding a rehearsal

session. As I have done with many of my non-political clients, I

approached Committee members and asked if they would like to have

sound support for the session. ! informed them that since the

equipment and I were already present and there was no conflicting

engagement, ! would turn the equipment on for the rehearsal. As

this represented no additional financial, resource, or time

Page 33, 12/27/94
.,-) ,--

30

obligation on my part or of my company, I did not require an extra

charge. As is our standard practice, although no charge was

incurred, I prepared an invoice to maintain equipment

accountability." He goes on to name other clients for which he

has behaved similarly and in closing states " ... at no time did I

intend this action to constitute a campaign contribution ... ".

The General Committee has complied with the

recommendation contained in the Interim Audit Report. Upon

revi~wing the additional documentation provided, the Audit staff

is satisfied that a contribution did not occur.

2. Payment Not Made by the General Committee

Upon reviewing documentation for payments to the

General Committee's vendors, the Audit staff identified a payment

credited to the General Committee's account with Opinion Research

Calling ~h:ch could no~ ~e assc~:a~e~ with any payme~ts made by

the-General Committee.' T~is'vendor, along with' Greenberg-Lake,

. 'RMlcUecl ~poll'ing ·for, t:.be· Gen~ral ·.C<J'mlIIi t.t-e.e. . The- ·venQoc· ,provided· an ., ' .,

,invo-lce s\immary which' detail~d -char.ges ·andpaymen-t$·to' the' 'General'

COllllllittee'So acc~nt. Included on'th,is sUlIUIlary was a $13,130',

payment made on 1.0/14/92. 'l'he Audit staff could ·not identify a

related payment from General Committee bank accounts. The matter . ":--... ,'·--..ra$-,adaresse!:i-"'2lt" fftf!'- extt·· connrene'iL :.' ".! • <:,.. :',... ,.'. .'.. :;" :.': " " .:- .. , ,'.

....

c

'Subsequent to the exit conference, documentation

provided by the General Committee states that "the $13,130 came

from Greenberg-Lake to pay for National Poll 119. It was paid for

from funds they had received from Clinton/Gore General account."

Based on documentation reviewed, it was apparent that

Greenberg-Lake and Opinion Research Calling worked together on

polls for the General Committee. The Audit staff reviewed

documentation from Greenberg-Lake which contained an invoice

summary for all chacges a~d pay:::en:s :elat;.e,d to the r,;enera.l.

. . €tiillmittee ," " TheTe was 'no" indicadon· on' t1tfs ··sultlmCl·rY"th:n· tire'

General'Committee was billed rela~ive to National Poll i19. As a

result, the documentation was still not available to demonstrate

that this payment came from Greenberg-Lake and/or the General

Committee.

The Interim Audit Report recommended that the

General Committee provide documentation and any relevant comments

to demonstrate that the payment was not a contribution; document

the $13,130 payment (to include a copy of the negotiated check);

and to explain the relationship between the vendors,

In response, the General Committee stated that

"subsequent to the Exit Confere~ce, the Committee explained to the

auditors that Opinion Research Calling worked with Greenberg-Lake

on general election polls, and advised the auditors that the

vendors informed the Committee that Greenberg-Lake paid Opinion

Research. The Committee has requested additional documentation

regard1ng this and will forward it as soon as it is available."

Page 34, 12/27/94
.,....

31

In a letter subsequently submitted by the General

Committee, the Executive Manager of Greenberg Research, Inc.

(formerly Greenberg-Lake) states that the "poll was neither

performed for nor paid for by Clinton/Gore '92." National poll

#19 was conducted for Victory Fund '92 and "Opinion Research

erroneously listed Clinton for President as payee on its invoice

to [Greenberg Research, Inc. J.n Further documentation provided by

the General Committee to support its explanation included

photocopies of an invoice to Victory Fund '92 and a canceled check

showing the payment was made by D.N.C. Services Corp. - General

Fund.

The General Committee has complied with the

recommendation contained in the Interim Audit Report. Upon

reviewing the additional documentation provided, the Audit staff

is satisfied that a contribution did not occur.

3. Deposits Credited to General Committee Bills

From various reviews conducted throughout the

audit, the Audit staff noted three deposits that were credited to

General Committee bills. The source(s) of the funds used to make

these.deposi~s could not be identifie9 or. ve~i~ied..The total of - .:~ --these-deposits '-was $28,325.____

Two of these deposits involved phone companies.

When reviewing refunds received by the General Committee, we noted

that the General Committee was credited with a $7,800 deposit made

to one company and a $19,525 deposit to another company. However,

from our review of documentation relative to these vendors, it

appeared that the General Committee did not make these deposits.

The remaining deposit related to a vendor that

provided sound and staging to the General Committee.

Documentation from this vendor in support of a General Committee

payment contained a credit for a $1,000 deposit which did not

appear to have been made by the General Committee. These matters

were presented at the exit conference. Subsequent to the exit

conference, the General Committee stated that "the $1,000.00 has

been paid with check 112577 issued on 10-8-93." This response did

not explain the source of payment of the $1,000 deposit credited

on the original invoice from the vendor. Therefore, it still

appeared that a $1,000 payment was made to the vendor by someone

other than the General Committee.

The Interim Audit Report recommended that the

General Committee provide documentation and a statement from each

vendor documenting the source of these funds, and any relevant

comments to demonstrate that the items did not constitute

contributions.

In response, the General Committee provided

documentation to support the deposits paid to the phone companies.

Page 35, 12/27/94
32

With respect to the $7,800 to one of the phone companies, the

General Committee provided documentation for a cashiers check

which demonstrated that the General Committee made the deposit in

question. For the $19,525 in deposits to the other phone company,

the General Committee provided documents demonstrating payment of

the deposits that establishes that $19,100 was paid by the Primary

Committee and that the General Committee has refunded this amount

accordingly. The remaining $425 is not material.

'ALthough, the General Committee demonstrated that

it did not receive contributions relative to the two phone

companies, there was no response to the item for s~und and

staging. As noted above, the General Committee made a $1.,000

,payment to the vendor in Octob~r of 1993 but there has been no

documentation provided to establish the source of the original

deposit. Therefore,. it still appears that the General Committee

received a ~1,000 co~tribution.

a~:"·_'·' '.'

, 4. Amended' Contracts • -. • -." 't ....... ' , ..... . ".. .' '. .... .. ,> .. ' .". "- .- ..""'... " •.• ". _: .. a • ......

~',

\.....'

-..

, ., ouri.ng the course· of the campaign. the- GehE!ra-l'

Cpmmittee enter.ed in\:.o <;ont~acts, with ·four media related vendors.,

that ~alled for'consulting.payments to be made on specific dates.

.-;~::':' . ,. ~':"~~~~~~~~lll~~l/,:: ~~~~~~r~:~~ri~i?:i~~?~&·:~:~~ :_~a~~~~·.F~gni~~~,·· ..'....... the stated reasons for the amended agreements was that the

"Consultant and the Committee recognized that certain of the

services provided by Consultant were for the benefit of the

Democratic National Committee rather than the Committee." The

amended agreements further stated that the Democratic National

Committee ("DNC") and the vendor are entering into separate

contracts "with respect to that portion of the Consultant's

services to be provided to the ONC." The ONC did not report any

payments to these vendors as coordinated party expenditures

p).irsuant.t? 2 U.S:C:. §4~la(d)(2) ~/. General Committe.e.

" .. '.:t"epreserlt~tiv!!"s ·were: ques't:ioned"a"bout thes'e amendments'-9ur:kn9

fieldwork'. They provided no response at that time.

At the exit conference~ General Committee

representatives explained that during the course of the election,

it became apparent that these vendors were also performing

services for the ONC and that it was recognized that the ONC

should pay for part of the services. The Audit staff responded

that more detail was needed to explain why part of the services

provided were the responsibility of the ONC and not of the General

Committee. The portions of the original amount contracted for,

which the General Committee did not pay, total S111,100.

Subsequent to the exit conference, the General

~/ The DNC reported that $9,682,375.38 of its $:C,331,703

National party Limit for the 1992 Presidential (General)

Election had been expended through June 30, 1994.

Page 36, 12/27/94
33

Committee responded that "these contracts were amended to reflect

the services actually performed by the individuals who were also

working for the ONC. Their services for the ONC were on generic

democratic media." This did not provide any more detail than the

General Committee's response at the exit conference.

The Interim Audit Report concluded that, absent

documentation to demonstrate that the services provided related to

the ONC, the General Committee had received contributions totaling

$111,100.

The Interim Audit Report recommended that the

General Committee provide statements and documentation from the

ONC and the media vendors demonstrating the services provided

related to the ONC, and any relevant comments to demonstrate that

the amended contracts do not result in a contribution.

In response, the General C~r.~ittee states that

"according to the terms of the contracts themselves, which were

provided to the auditors during fieldwork, the contracts were

amended because it became apparent that the services required of

the vendors were different than originally anticipated. It is

clear from the terms of the contracts that they were amended

because the four vendors would be providing fewer services to the

--Commi-ttee-tnan--a·nticipated~in-the-ori9inal-contr'acts.-lnstead,----

each of the four vendors also began working for the ONC. The

auditors were specifically advised that the services for the ONC

were on generic media. As the auditors well know, generic media

is that which does not mention any specific candidate and

therefore which does not have to be allocated to any candidate.

There is nothing in the Act or regulations that prevents a

committee from amending its contracts, and it is clear that

generic media need not be allocated to any candidate's campaign

committee. We are, therefore, somewhat at a loss as to what the

auditors think they need or are entitled to concerning the

services provided by these four vendors."

"The Committee believes that it is absurd for the

auditors to allege an impermissible contribution on the basis of

an amended contract that calls for reduced services to the

Committee. However, even though the auditors have no basis for

suggesting that these vendors, the O~C or a~yone else, made

contributions to the Committee amounting to $111,100, we have

obtained from the ONC copies of the four vendors' contracts with

the ONC and a letter from ONC General Counsel regarding the

services provided to the ONC. It is clear from the amended

contracts themselves, and from the additional documentation

provided, that no contribution resulted to the Committee from the

amendment of these contracts."

The letter from the D~C General Counsel states that

the DNC has sent copies of contracts with the four vendors which

"will confirm that, according to our records, these payments were

made for creative and consulting services in connection with the

Page 37, 12/27/94
34

production of generic media, i.e., media which urged support for

the Democratic party and its candidates without mentioning a

specific candidate." The contracts all state that "Consultant

shall provide the ONC with the following services:

o Writing of generic Democratic television advertising

and radio commercials.

o Production of generic Democratic television and radio

commercials.

o Writing, design a~d layout of generic Democratic print

ads."

It is noted that the contracts between the vendors

and the DNC provide for the DNe to pay approximately 2~.4% of the

total amount originally ~o be paid by the General Committee.

These contracts call for the vepdors to provide services fren

September 8,· t'O November· IS.. 1292. Howev~r, the cOI1'trac't.s 'were

0.'" -ncft;.#.~,itJned·,hy,'a-repres~nt:a,tive'of ~he UN.(; ·until'Oc,\:ober·'26,:·l·9"92,

'. and we-re'signed sho1:"try the'reafter by,the ven'dprs'. witJor'respect'

to the amended contracts between the ven~ors and the General

Comm~ttee,.the dates on the amended contracts are October 15,

-_1992~_H,oweyer., t,herf? is, rio., indicatio,n ..0 f when .the, co.ntr.acts \'ier.e., ~. "t,:" .... "at:tu'fO,'lt=-'s:rgiiecfbf'£he-venaotS': ' . ".;;. " ',$" . ", : ., " ...."'.~.. ;'.':' ,-,

There was no documentation provided from the media

vendors detailing the services provided. Although the Audit staff

is aware of what generic media means, there has been no

documentation provided to demonstrate that the services provided

by the vendors to the ONC were different from the services

originally contracted to be provided. Also, there is no

indication how the General Committee and the ONC determined that

approximately 24.4% of the work provided related to the ONC.

Given the timing of the ~ontrac~s betwee~ the D~C and the ~endors .

a-ti well ,as the 'amendments bHw'e-en :tl'le' Genei.al Commit't~e".arrCf·tl\e- ".

vendors, there Is no explanation why the General Committee and ~he

DNC did not realize earlier that the work being performed by the

vendors was related to both committees'. Therefore, sufficient

documentation has not been provided to demonstrate that $111,100

in contributions did not occur.

In conclusion, it appears to the Audit staff that

the General Committee has received $112,100 ($1,000 • Sl11,100) in

prohibited contributions and a repayment to the U.S. Treasury is

warranted.

Recommendation ;1

The Audit staff recommends that the Commission make an

initial determination that the General Committee is required to

make a $112,100 repayment to the U.S. Treasury pursuant to 26

U.S.C. S9007(b I 13).

Page 38, 12/27/94

" .
35

B. Apparent Non-Qualified Campaign Expenses

Section 9002(11) of Title 26 of the United States Code

defines, in part, the term "qualified campaign expense" as an

expense incurred by the candidate of a political party for the

office of President, by the candidate of a political party for the

office of Vice President, by an authorized committee of the

candidates of a political party for the offices of President and

Vice President to further the election of either or both of such

candidates to such qffices. In addition, neither the incurring

nor payment of such expense shall constitute a violation of any

law of the United States or the State in which such expense is

incurred or paid.

Section 9007(b)(4) of Title 26 of the United States Code

states, in part, that if the Commission determines that any amount

of any payment made to the eligible candidates of a political

party was used for any purpose other than to ce:ray the qualified

campaign' expenses with re~pect to which such payment'was mage, tt

s.h~l.l. notify .sugh.l;:and1.dat~s.q.f.,t~e.amoun1:',so·'clsed,.anG· $Uc1l ' .. -

caftdida~es shall pay to ·the Secreta~y o~ the T~ea_ury an amount .

equal to ~uch amou~t.

Section 9003.5(a) of Title 11 of the Cod~ of Federal. ~~..-~·~';-~~;-:-~~~-·Il.e~nirt-i ons·osta~s,··'i.-n ·pnt.;-that' 'ea8i'candiClrte' :shaii"'·trlve ·,t{t~_··<':·· '. ", « . burden of proving that disburse.ents ~ade by the. candidate or his

or her authorized committee(s) are qualified campaign expenses as

defined in 11 CFR 9002.11.

Section 9007.2(b}(2} of Title 11 of the Code of Federal

Regulations states, in relevant part, that if the Commission

determines that any amount of any payment to an eligible candidate

from the Presidential Election Campaign Fund was used for purposes

other than to defray qualified campaign expenses, it will notify

the candidate of the amount so used, and such candidate shall pay

t.o~ the tJni ted States ·Treasury· an amount .equal: 'to such amount. '.

1. Apparent Duplicate Payments

During our review of disbursements, the Audit staff

discovered expenses incurred by the General Committee which

appeared to have been paid more than once by the General

Committee. We identified 28 such payments to 13 vendors totaling

$21,614. The General Committee was made aware of these items

during the course of audit fieldwork and at the exit conference.

Subsequent to the exit conference, the General

Committee provided additional documentation which demonstrated

that some of these payments (about $12,945) had SUbsequently been

refunded. Most of ~hese refunds (about $8,90i) occurred in

September and October of 1993, after the conclusion cf audit

fieldwork.

Page 39, 12/27/94
36

At the time of the Interim Audit Report, there

remained 12 payments to 4 vendors totaling $8,669 which appeared

to be duplicate payments; the funds had not been recovered. For

some of those payments, the General Committee had acknowledged

that a duplicate payment had occurred and that refunds would be

forthcoming. For others, the General Committee stated that the

payments were applied to amounts outstanding. However,

documentation had not been provided to confirm this. The Interim

Audit Report stated that if any of the funds were recovered from

the vendors or the documentation to demonstrate application of

these amounts was provided, the amount subject to repayment would

be reduced accordingly. The amounts of duplicate payments

recovered ($12,945) and outstanding ($8,669) were included on the

NOQCE as accounts receivable due from the respective vendors.

..... - }> --. .4.···~ .. · .... . - .--: - ..-.... .... . .. i ...· .. "," ... -

In the Interim Audit Report, it was recommended

that :~~ General C~~~ittee s~b~it d~~~~e~~atic~ ~~ de~cns:ra:e

that apparent duplicate payments were either applied to other

. _··inv.oices -OT haO·be~n··rl!co'Vered. Absel1't-·such a -demonstration,' the

·Audit staff wou~d r~commend that the Commission make an initial

determination that the General Committee was required to make a

repayment of $8,669 to the U.S. Treasury pursuant to 26 U.S.C.

. ..§9Q07J bl.( 4) . ..... '". -:' - .. ... ..

'C;- •

-

-~ --"_.. : .

r

'.

In response, the General Committee stated that $694

had been refunded to the General Committee, but only submitted

documentation to demonstrate that $340 had been refunded.

Documentation was also provided to demonstrate that an additional

$641 was uncollectible. Finally, Counsel for the General

Committee states that another vendor has acknowledged a credit

balance of $1,496 and the General Committee is still attempting to

resolve the remaining $6,479.

The Audit staf: notes ~~ac the unco:lectible

duplicate payment of'$64l remains a ncn-qualified campaign

expense subject to repayment. Further, although the General

Committee states that a vendor has acknowledged a credit balance

($1,496), it does not appear that the amount has been recovered.

Therefore, based upon the above, $340 has been

resolved, which leaves an unresolved amount of 58,329 (58,669 -

$340) which is repayable to the U.S. Treasury (see Attachment 2).

Recommendation #2

The Audit staff recommends that the Commission make an

initial determination that the General Committee is reqUired to

make a repayment of $8,329 to the U.S. Treasury pu:suant to 26

U.S.C. §9007(b)(4).

Page 40, 12/27/94
37

2. Non-Campaign Related Activity

From our review of disbursements and the associated

documentation made available by the General Committee, the Audit

staff identified 16 disbursements totaling $87,077 which appeared

to be for purposes other than to defray qualified caapaign

expenses.

Of the 16 items, 8 disbursements totaling $70,296

were payments for rerited equipment not returned or lost. Included

was a disbursement of $34,768 to Alamo Rent A Car (~Alamo") for

two missing vehicles. One of these vehicles was rented in Florida

and the other in Texas.

In response to the exit conference, the General

Committee provided an explanation which detailed its attempts to

recover the vehicles. From this documentation, it ~~=e~:ed that

·the campaign staff'who -rented the' veh~cle~ ~llnwed them to be used -r-'~' ...by a. ftmnQe.c. of .peu;:on. '.and.. eyetltually-.];o&.t ..t-cack -l)f "he- had> t'he.

'.- . ,- .vehicle. In both cases,. the General-Co1nlllit-tee ·had -not beel'! able

to determine.who last had possession 'of the vehicles. Without

this information, both Alamo and the General Committee were

_ -__ . precluded. from fi.ling sto~.en vehicle repo_rt~ wi.th the .app_rqp~iat~· .' :~•. ~~--,.-: '~-~---;~fi'lirnorl:n~-s-: "'~Tbe' ~tHe ~e~n' 'payillen'ts--~t"&~'t"·!f~u!."illch··a~·:·,....· . ..... -'~:'

, computers and communication devices which had been lost. The --

C' General Committee also stated in response to the exit conference

that it was self-insured and that it was cheaper to pay for lost

equipment than to maintain insurance.

Lr:

C'.

The remaining 8 items did not appear related to the

general campaign. One was a payment of $350 for business cards

invoiced after the close of the expenditure report period and

another was a $4,351 payment for installation of phones in New

Jersey in 1~93, Three payments totaling $1,100 appeare9. to be

.activitie~~~elated to'the ~o~t-ele~ion tranSttion·and two

payments totaling $2,251 were for .the travel expenses of

individuals attending the inauguration. In response to the exit

conference, the General Committee stated that it has reviewed

these payments and has requested reimbursement from the

appropriate entities.

The remaining item was a $8,730 payment in

February, 1993, to Wright, Lindsey & Jennings. This payment was

for retainer services and expenses incurred by the firm. The

description on the invoices was for "Incorporation & General

Advice." The firm provided invoices to support the incurrence of

the expenses. Two of the expenses were to "file Articles of

Incorporation for Little Rock ' 92 Election Host Co=i ttee, Inc .. "

This was the only documentation available to support the nature of

the incorporation and general advice. The Little R8Ck '92

Election Host Committee was not affiliated with the General

Committee, but was a corporation registered with the Arkansas

Secretary of State. Therefore, it appeared, based on the

Page 41, 12/27/94

.' -
38

documentation made available, this payment was not made to defray

a qualified campaign expense.

The Interim Audit Report recommended that the

General Committee submit documentation which demonstrates that the

expenses noted above were qualified campaign expenses. The

documentation was to include, but not be limited to, information

on factors such as the relative value of the lost equipment and

methods employed by the General Commi~tee to safeguard the

equipment. Absent such a demons~ration, the Interim Audit Report

stated that the Audit staff would recommend that the Commission

make an initial determination that the General Committee is

required to make a repayment. of $67,077 to the U.S. Treasury

pursuant to 26 U.S.C. S9007(b)(4).

In response, the General Committee provided

documentation, memoranda, and made a number of arguments in an

attempt to demonstrate that t~ese disbursements were for qualified

campaign expenses. The General Committee responses to the'

.vat"iou,fi. Ltsms in .questi.on· a.re di·sc\l.s.6ed below,,· ..,

The General Committee provided memoranda,

. . explanations, a letter from its insurance agent, and a written

. ...: .. equipment se.curity. policy in ,its r~ply to the disbursementa

':-:-'::-:;.' -·;-.··;-·~to~Mmr~Oi)95"·fu\'·'!1el>\?$f1Haeht'::'-,;'h~~e·dl_~~Pi·t1:~e sl::'ates':' -' . '. . that -the Committee objects tb treatment of these payments --a-5- - --,- ~, non-qualified campaign expenses."

c

"

-Thoughout [sic] the general election, the

Committee and its members exercised great care in the

maintenance and security of leased equipment, Each

incident cited by the Audit Division was investigated at

the time of loss for both potential recovery of

equipment and to discover any potential misconduct or

gross negligence on the part of a Committee member. It

is·.the Committe.e's po'Sition that there was no evidence

of misconduct or gross negligence on the part of any

Committee member, and thus it was unnecessary to execute

the Committee's policy of withholding salaries upon the

discovery of evidence of misconduct or gross negligence.

As the letter from the the Committee's insurance agent

indicates, it was not comercially [sic] feasible for the

Committee to have purchased insurance to cover such

losses. First, in order to negotiate a deductible low

enough to have permitted loss recovery, the applicable

permium [sic] would have been cost prohibitive (the

Committee's deductible was $5,000). secondly, given the

staff fluctuations associated with typical campaign

environments and the tremendous geographical regions

that would require coverage, the cost for insurance, to

the extent available at all, would have far exceeded its

value to the Commi~tee.

page 42, 12/27/94

..

..
39

"In light of the prohibited cost of commercial

insurance the only commercially reasonable and fiscally

responsible alternative for the Committee was self

insurnace [sic]. A comparison of the losses identified

by the Audit Division to the total monies expended by

the committee for equipment leases in general and as

compared to leases for similar equipment, reveals that

the Committee paid a relatively small amount for the

replacement of lost equipment. (Committee payments for

non-auto rental equipment represented only 1.4% of the

total monies spent on leases while auto rental losses

were only 1.4% of the total as well). Ultimately, not

only was the decision to self insure the only available

option, but also the wisest. As most of these losses

occured [sic] during advance team travel, and were not

revealed until team members had departed the event site,

police reports were not prac~icable. In the case of the

··r2ntal vechicles [si~ 1, the Commi ttee at~.empted but was

.;--....•..." not: pe.~mitied.,to: file. suctl a:- t'el?or4;;.~. Tn-e-.ClOllllll1it·t.ee,.we~.·· ..... ,'.

to 'lJn~at ,'lengths' both to recove'rthe- 'veGhicl-es [sic] ·,and.

to recover their costs from the appropriate insuyance

agencies. However, as explained in the exhibits~' the

Committee was unable to either recover the vehicles or ,:..:,~._~.y.,/,~-. ·,lttibllli.t-"tti!·s-~1'oS5-'fOT"i:JHK1!:~tlief-r·~i-mburseolrent.""·" ' .. .' _.... :.,.~. ~""','

With respect to the two missing vehicles, the

General Committee provided a letter from its insurance agent,

memoranda from a staff person, and a letter from Alamo. Th~ agent

states, in part, that:

:{) "

" ... by requiring that cars leased by advance team

people be covered for liability on a primary basis through

the lease company we transferred the exposure to the lease

company?nd thereby, effectively provided a first layer of

protection. ~ha·t· th~ ·campaign n:ad bet\o1een it and Any' ,.'

claims•.. r would further point out that any number of autos

had accidents during the campaign. Because the rental

company was primary, we did not pay ...Remember we protected

the campaign against catastrophic risk. The campaign chose

to self-insure relatively smaller exposures because it was

prudent business practice and it saved money."

In addition, the letter from Alamo states that:

" ... even though ~e are the owners of these

vehicles, we cannot report them stolen because they were

rented to the Clinton for President Campaign. In the case of

the Dallas rental, the police in Dallas have taken the

position that if a 'permission user' (someone who was given

the keys) is involved, no c:ime has occur(:]ed. Therefore,

they will not take a stolen ~ehicle repc:t.

page 43, 12/27/94
~W"••

,~.

-'

40

"If the vehicle was left in a specific location we

nee[dJ either: (A) A statement from the last person who had

the vehicle as to what happened to the vehicle, OR (B) The

last person who has [sic] the vehicle needs to report it

stolen to the police.

"As to the Miami rental, until we can determine who

last hald] the car, the police will not take a stolen vehicle

report from us. The same things would be required as in A

and B above. Failing that, the only way we could report the

car stolen would be to report it as a failure to return" by

the person who rented the car "which would result in a

warrant being issued jor his arrest."

For the lost equipment other than the automobiles,

the response included another letter from its insurance agent

which discusses Fidelity Coverage and a copy of the General

Committee's "Loss P=eventio~ Policy." . . . ...._...• :" .' .'fA.e', let·tin" .f-com .t.he·±nsul!al"iee a'gent' not€s ·.t.h~t· the ...•-

~ote for ~n insorance·~remiumincluded·t~'~ccounting department'

located in :1.i ttle Rock. The letter st.ates, ·in part, that "as time

, progressed 'and controls were instituted, the issue of fidelity

__.. .__ n!'tj.?n!lFy. b~c~El l~:>s im~<;J;17.ar:t c: ~,.,19ca ~i.o?s ....qtpe r . th~I} .-. ' , .~. ,,', '•.; ",., ........ :, -~.. neiaqua~tets-;"It,1'6e' rRes-quoted-we"t~·based -on·tbe campafgn'--' ." - .-

, self~insuring the first $25,000 of any loss and coverage was

limited to catastrophic loss at the General Committee's primary

location. The General Committee "self-insured small exposure and

minimized the change by designing controls into its organization,

i.e. no cash transaction."

".." ."

With regard to its "Loss Prevention Policy", the

General Committee states that "once each piece of equipment in the

inventory was associated with a department and individual staff

~ember, we sent out departmental·rnventory lists to each

'aepartm~~ head so that 'h~ishe Could verify'the ihfor~ation.

After receiving confirmation from each department head, we issued

a memo to staff and department heads stating our policy.

1. Unreturned equipment was the financial responsibility

of the user (as indicated on the inventory).

2. If the equipment was not returned, the cost of

replacing that equipment was deducted from the user's

final paycheck.

3. The value of the equipment was included as taxable

income on the user's W-2 form.

4. All equipment used by the department in general was the

financial responsibility of the department head.

5. Unreturned general use equipment was ded~cted from the

department head's final paycheck.

.... .

Page 44, 12/27/94
41

6. Unreturned general use equipment was included as

taxable income on the department head's w-2 form.

7. Any individual responsible for any unreturned equipment

had a note made in campaign personnel records, and this

point was included when recommendation requests were

made regarding future employment.

All of these points were made in a memo to staff.

We did not have to penalize many; however, if it was necessary, we

had prOVided the notification required to allow us to do so." The

memo also discusses steps taken to increase security measures in

the building.

The Audit staff does not find the General

Committee's arguments to be persuasive. The 8 disbursements

totaling $70,296 are still considered to be non-qualified campaign

expenses' (see -Attachment 3). With respect to the lost vehicles;

. it. iii a-gpar.e.nt.- that- SQIne tndiv-idoal·s ~oF-kiR.CJ {or· the General' ,-: -

Commi·ttee- did .. not exerci~e due ca-re in keeping track of the

vehicl~s. As not~d in th~ letter from the insurance agept,

primary insurance coverage was aaintained through the rental

__-:.- ._._.a9.~!!c~.and-c.~~t!l.s,tr_<:'~hiS }~o.ss ~as _c:ov.et:,ed..b¥ ,t;~~_,i~suF~nce fomP.f.~i" '. -- ::.... _~, .-:. -How'l!vl!'r-; 'due to ·~b.e e1-I:'cumstlmee'll' su!rt*lnthng'tlie-- crfsapp"ea-rance df'--

the vehicles, neither the General Committee nor the'rental Agency

could file a stolen vehicle report. The General Committee's

subsequent attempts to recover the vehicles do not relieve the

caapaign of its obligation concerning these vehicles. Although

the campaign states it had a "Loss Prevention Policy" to cover

such losses of equipment, "it is the Committee's position that

there was no evidence of misconduct or gross negligence on the

part of any Committee member, and thus it was unnecessary to

execute the Committee's policy." The General Committee provided

no documentation to demonstrate how these determinations were

. made. "The General C~mmit-tee also states that' a "relatively small'-

amount" was paid for the ~ep1acement of lost ~quipment as compared

to total monies spent on equipment leased. The General Committee

again prOVided no documentation to support its calculation.

However, the Audit staff believes that the percentage is

irrelevant. As noted in Attachment 3, the payments for this lost

equipment were not for small dollar items and we believe more

prudent care should have been exercised. Although the General

Committee was responsible for making the payments for lost

equipment, these payments should be considered non-qualified

campaign expenses and subject to repayment.

Finally, the General Committee also provided

documentation for the remaining 8 items involving payments for

other than lost equipment, which did not appear to be related to

the campaign. The Audit staff's review of this documentation

indicates that the payments were for qualified campaign expenses

or the funds have been recovered.

page 45, 12/27/94
42

Thus, it is the Audit staff's opinion that the

General Committee has made 8 payments totaling $70,296 which are

deemed to be non-qualified campaign expenses (see Attachment 3l.

Recommendation 13

The Audit staff recommends that the Commission make an

initial determination that the General Committee is required to

make a repayment of $70,296 to the U.S. Treasury pursuant to 26

U.S.C. S9007(b)(4\. .

C. Expenditure Limitation

-~. '.-.. .".", " '." - . . . :. ..' ..

Sections 441a(b)(ll(B) and (C) of Title 2 of the united

States Code state, in relevant part, that no candidate for the

office of President of the United States who is eligible under

section 9003 of title 26 to receive payments from the Secretary of

the Treasury may ~ake ex~e~citures in ex=ess == $20,000,000 as

'adjusted for ·the· increases in th'e Consumer Price Index.

: ... - .. .... <:•• : •

. Section' 9004 (a) ( 1 l. of "1'i tle' 26 of' th-e Uni t"ea States' Code

states·that the eligible candidates of each major party in a'"

presideJ:ltial election shall be' entitled to equal payments un~er

__~~c_t.io~"~~t9R6._~~_~n. ';lJ!l~un~ ...w.9\cl: ii?- th!l!_ .ag~r.~.gllj~, e~<;!.l. no~ .e~c.t~d. '. tne ~'Xpench~l!r-e'-nihtati:6ns "ap"p:ticaoie to sucl'icandldatesund'er'

Section 441a(bl(1)(B) of Titl~ 2.

.. -'. ..

Section 9007(b)(2) of Title 26 of the United States Code

states that if the Commission determines that the eligible

candidates of a political party and their authorized committees

incurred qualified campaign expenses in excess of the aggregate

payments to which the eligible candidates of a major party were

entitled under section 9004, it shall notify such candidates of

the amount of such excess and such candidates shall pay to the

Secretary of the. Treasury an amount equal to sud,. amount. .. .... .". ". .. ". "p.... . '." ..''.' . '... ... '.. • ' •.' '. .. .... "

Section 900~.4(a) of Title 11 of the Code of Federal'

Regulations limits the use of such payments to expenditures for

the following purposes: to defray qualified campaign expenses; to

repay loans that meet the requirements of 11 CFR 100.7(a)(1) or

lOO.7(bl(ll) or to otherwise restore funds used to defray

qualified campaign expenses; and to restore funds in accordance

with 11 CFR 9003.4 for qualified campaign expenses incurred prior

to the beginning of the expenditure report period.

Section 9003.4(a) of Title 11 of the Code of Federal

Regulations states, in relevant part, that a candidate may incur

expenditures before the beginning of the expenditure report period

if such expenditures are for property, services cr facilities

which are to be used in connection with his or her general

election campaign. Examples given include expenditures for

establishing finan=ial accounting systecs, organizational planning

and polling.

Page 46, 12/27/94
'-

, -

43

Further, 11 CFR S9003,4(b), in relevant part, limits the

sources of funds used to make expenditures prior to the

expenditure report period to: a candidate obtaining a loan which

meets the requirements for loans in the ordinary course of

business; borrowing from his or her legal and accounting

compliance fund; use of the candidate's personal funds up to his

or her $50,000 limit; and, for a candidate who has received

federal funding under 11 CFR part 9031 et seq" borrowing from his

or her primary election committee(s) an amount not to exceed the

residual balance projected to remain in the candidate's primary

account(s) on the basis of the formula set forth at 11 CFR

9038.3(c),

Section 9004.9(d)(1) of Title 11 of the Code of Federal

Regulations states that the term capital asset means any property

used in the operation of the campaign whose purchase price

exceeded $2000 when acquired by the committee. The fair market

value of capital assets may be considered to be the total original

cost of such items when acqu~red less 40% to account for

,-'- ~. -dep1::ec.ia-tion·,-'. , '.' -', .

. Finally, 11 CFR §900i.3(a)(2)(ii) provides, in relevant

part, that expenditures for computer services, a portion of which

__..are__ ~~.-l..~_tJ!? __to ~Ils~r~.n~,. c?~pFi~nc:~w.~~~, Ti t~e ..2 ~n? Ch~.p~,f!.r .~S o,~, ..' _, . ; ..'::'; ',..:' .', . ''1'ftle- Z6',' lnf"t.f:~ny pa'la frOtfl 'the c~dldate's -£e'ae'r)t1 --fund atcount--" L '--

say later be reimbursed by the compliance fund. A candidate say

use contributions to the compliance fund to reimburse his or her

federal fund account an amount equal to 70% of the costs (other

than payroll) associated with computer services. Such costs

include but are not limited to rental and maintenance of computer

equipment, data entry services not performed by committee

personnel, and related supplies,

The expenditure limitation for the 1992 general election

for the· offic;e of President of the United States is $55,240,000. . '

c. Based on our reconciliation of the General Committee's'

bank activity to its reported activity from its inception through

June 30, 1993, and a review of reported activity from July 1,

1993, through June 30, 1994, the Audit staff determined that the

General Committee disbursed $64,920,993. From this figure the

Audit staff deducted loan repayments ($125,000), offsets to

operating expenditures ($7,012,115) and refunds from the

Compliance Fund ($2,595,000) for compliance-related expenditures

to arrive at operating expenditures subject to the limitation of

$55,188,878,

In addition, the Audit staff determined that, with

respect to our analysis of expenditures subject to the limitation,

the following additional adjustments are necessary,

Page 47, 12/27/94
44

1, Amount Due to the General Committee from

the primary Committee

The Audit staff has included as an accounts

receivable $39,104 owed to the General Committee by the Primary

Committee,

This amount includes payments by the General

Committee for: a.reimbursement ($2,255) to Julia Payne for her

convention-related expenses; an overpayment ($7,402; of payroll

taxes applied to amounts owed by the primary Committee; an

expenditure ($7,565) to Ma~att & Phelps for legal services

provided to the Primary Committee; primary Committee payroll taxes

($354); and, AT&T telephone services relative to the Primary

Committee ($21,528),

At the exit confere~ceJ Ge~eral C~~~::tee

representatives nod·limited comments, and stated they would have

'., '.: -no.·.qH~tiofls utttll·they·-hao·· te"lewee- do~ument-eti:on'~· . ll'he A1:Idi"t·'·

staff' did, not reeeive any dboumentat·ion 'in' res'P0nse' to the

presentation of these items at the exit conference.

..

o.

'.-

........ - '-" ,~n ,r:silonl>e~(Lt:,l!e ..Int~;:~ f''id:it Re,gt?Et,t .. 1;.qe ". ". '>:r..• ~": Genetal: ~oll!Drttee' a<l'l"e"W- 't"hat e'h""t'te '1. tems'snould'-be- rncludecf'ibUt-- ., .

believes the correct figure should be $43,726. The .Audit staff

has reviewed the General Committee's calculations and has adjusted

its analysis accordingly.

2. Amount due the Primary Committee from

the General Committee for Payment of General

Election Related Expenses

During the Audit staff's review of the Primary

Committee's vendor fi~es, numero~s. disbur~e~e~ts made by the

P"Ci~ary ·Commi."'ttee·were foundthat:'a~pear to be~for th~ ben~fit of

the ~eneral election· campaign. These expenses'are grouped into

those for equipment and facilities; polling and direct mail; media

services; and miscellaneous.

a. Equipment and Facilities

Near the end of May, 1992, the Primary

Committee began moving into new office space. It was this

location that the General Committee and Compliance Fund used as

their campaign headquarters during the general election campaign.

The new location provided approximately three times the floor

space as the location used during the primary campaign.

As part of the move to their new location at

the Gazette Building, the Primary Committee paid I-K Electric

Company $79,808 for various wiring projects. The invoices were

paid between July 30 and September 2, 1992, and covered a number

of projects. For example the invoices contained notations such as

Page 48, 12/27/94
;v::- .

c

45

"INSTALL DATA CABLING NETWORK FOR NEW HEADQUARTERS (GAZETTE BLDG.)

FOR 150 WORK STATION LOCATIONS", "PROVIDE fu~D INSTALL LANNET DATA

NETWORK ELECTRONICS FOR NEW NETWORK" and "INSTALL VOICE CABLING

FOR 55 TELEPHONE LOCATIONS." Although all of the invoices that

contain the dates of the work indicate that it was completed by

July 16, 1992, it is apparent that such services were in

preparation for the general election campaign.2/

During the primary election period, the

Primary Committee's records reflect the purchase of only small

amounts of computer equipment. Instead, most equipment was

leased. Also, the primary Committee contracted with a Washington,

D.C. firm for computer services. The firm prepared matching funds

submissions including computer tapes, disclosure reports, and

provided the computer tapes required for the audit. The Primary

Committee had a computer terminal linked with the vendor. During

the audit, the primary Committee requested and was provided copies

of the computer files obtained by t~e Audit D:visic~ directly from

the vendpr. Therefore, it dOes not appear that the prim~ry

Commi~tee's.computer files were load~ from' the vendor'S system to

the campaign's computer system until 1993.

Beginning at the end of Kay, 1992, the Primary

_~o~it!~epur~hased a la~ge amount of computer equipmen~, both

pe'rsbhaI- comput:e-r·s·-and'-a·-.targe'r "system'. '. Inmos\i' cases a:aO, _:.

depreciation allowance was taken and the computer equipment was

then sold to the General Committee at 60\ of the purchase price,

net of sales tax.

Between May 28 and July 15, 1992, the Primary

Committee purchased 50 personal computers, software, and supplies

from The Future NOW, Inc .. Between June 1, and August 9, 1992,

the Primary Committee paid The Future Now, Inc. $118,742. The

General Committee purchased this equipment for 60\ of the original

cost, less sales tax.

The same vendor was paid $11,676 for other

equipment invoiced between June 8 and July 15, 1992 with $10,123

of the total invoiced and shipped on July 15, 1992, the

Candidate's date of ineligibility. None of this equipment was

included among the items sold to the General Committee.

As stated above, the primary Committee

purchased a larger computer system. A July 13, 1992 letter to the

"Gov. Clinton Election Campaign" states that "The Clinton campaign

contracted with ICL to provide a comprehensive system and software

on May 28, 1992. IeL delivered and installed the system on June

25th. Between these two occurrences, IeL loaned the campaign a

Power 6/32 system to function as an interim solution." The letter

goes on to explain that ICL personnel visited campaign

2/ Certain electrical work and data installation occurred July

10 through July 16, 1992.

Page 49, 12/27/94
46

headquarters to provide training and expedite conversion to the

new system.

The majority of the invoices for this computer

system were dated June 24, 1992. In total, the vendor was paid

$272,460 in two installments on August 10 and 21, 1992. Again,

the General Committee paid the Primary Committee 60% of this

original cost, less sales tax.

The Primary'Committee also purchased computer

equipment from W.P. Malone. The Primary Committee paid a $104,175

invoice dated June 30, 1992 on August 25, 1992. As with the other

equipment purchased from the Primary Committee, the General

Committee paid 60% of the amount.

:'. "

In addition, W.P. Malone was paid $33,260 on

August 25, and November 9, 1992, by the primary Committee fer

programning. s~rvices and softwa~e support and consulting for

moving t:'hecolllputer operation' to the Gazette BU'ilding ." ThE!

':' , ~Il-v'oices~fl~t:\!, dates"up ·.to. 'aD'd', iRc1.odiOiT 'duly' :lo6;, '1992., '.1fOn-e crf

·the ambuntlt 'we're r~i1l1bursed by th-e O~neral",C<lmmittee:' '

-..-.-

... .

"

c

In response to the ,exit conference discussion , - , '__of this matter, thO\! Prilllary,Committee,.JPubmitt~d .,a4ditional ' .

";":' ";,, :...:.... :In!O''riaHciIi';'''-'1'he"' l'r"l'.aq<:oillllll ¥fe:e'-ob~cte'Q to"'th~-:-A\i~'-:£t""i"tif'L', '..... characterization of these payments as general election expenses.

According to the primary Committee, the expenses for a new

computer system were incurred well before the end of the primary

and were essential to the smooth operation of the daily

responsibilities. The primary Committee stated that the initial

computer system was inadequate for the Primary Committee's needs

in the early months of 1992. The system was unable to accommodate

the Primary Committee's expanding database and volume of

correspondence, as well as to accommodate the primary Committee's

delegate tracking and communications., .- ": ...... '.";. . = . ..... . .'. ... -".' . . ".: : .

The Primary'Committee's response inCluded a

memorandum from the Director of Computer Operations. She stated

that during 'the early months of the spring of 1992, the initial

system used by the primary Committee could not meet its increased

demands. "The initial system could not accommodate the increased

number of users. It would not allow the Committee to link its

personal computers with the network. There were major time lags,

often amounting to two days, in the retrieval of information.

Back-up of the Committee's data required four to five days. This

prolonged back-up process compromised the integrity of the

Committee's information. As demands on the system increased,

there was also an increase in computer equipment failure. In

addition, the sys~em's limited resources were strained with

mailings of 5,000 to 6,000 pieces per day. Furthermore, the

system was not able to accommodate the Committee's extensive

delegate work."

page 50, 12/27/94
\ ...

47

She continues that after a thorough evaluation

of the systems available, the Primary Committee purchased a

comprehensive computer system and software on May 28, 1992 from

ICL, Inc. They also used a programming consultant from W.P.

Malone who helped design software, hardware and networking

packages. The temporary system was installed on May 30, 1992 and

a permanent system was installed less than one month later. "When

a customer purchases a computer system it is the normal courSe of

business that the computer company supplies the customer with a

temporary system at time of purchase until the system purchased is

ready." In addition the primary Committee purchased a software

maintenance contract. and equipment from W.P. Malone and personal

computers and software from Future Now in connection with the new

system. It was also necessary for I-K Electric to install new

wiring to accommodate the new system. The Audit staff notes the

primary Committee originally leased i~s computer system from W.P.

Malone. Invoices associated with ~he lease sugges~ that the

le~sed system was the same model as the system loaned by ICL, Inc.

as:.an ·"interim solution." It· is not known if it was the same

co&puter system and was obtained through W.P. Malone. Further,

the equipment purchased from W.P. Malone at the time the new

system was acquired was equipment that the primary Committee had

le~sed up to that time . .. '- .;- ...-." ....... .._ .....

The total amount paid for computer equipment

and related services described above is $540,313 excluding I-K

Electric. Given that: (a) the Primary Committee contracted with

a washington, D.C. firm for much of its computer work, (b) the

primary Committee leased the majority of its computer equipment,

and (c) the purchases were not made and the temporary system not

installed until nearly all primaries were over, with the permanent

system not installed until well after the last primary and

approximately two weeks before the convention, it is apparent that

this equipment was purchased for use in the general election.

Therefore, in the Interim Audit RepoIt, it was concluded that the

entire amount was considered to be general election expenses. The

General Committee paid the primary Committee $285,923 for the

computer equipment, leaving a balance due of $254,390 ($540,313 -

$285,923), plus $79,808 for rewiring.

In addition to the above, the primary

Committee paid the entire amount of the rent for July 1992. Fifty

percent of the amount. or $12,500, should be reimbursed by the

General Committee.

Listed below is the information requested in

the Interim Audit Report and a description of the information

prOVided in response.

(1) Provide the following information regarding Equipment and

Facilities:

o In chronological order, list the various computer systems

Page 51, 12/27/94
48

and data entry services used by the primary Committee, the General

Committee, and the Compliance Fund at all relevant times during

the campaign. Identify the time periods that the various systems

were used, and how each system was used by General Committee, and

how the systems differed from each other.

In response to the Interim Audit Report, the General

Committee submitted a chronology of the campaign's computer

systems (Attachment 4). The chronology addresses the system used

between August of.1991 and May of 1992; the new.system, with no

distinction between the temporary and permanent systems, used from

May 3D, 1992 to present; and services provided by Public Office

Corporation beginning ~n December of .1991 and continuing to the

present.

o For the listed vendors provide the requested information:

W.P. Malone

':::. , Det.croibe-- tl:le -systie-lll.· (:CC'I6Y3·Z:Supe:rmifti.-computet-·aoo· re:ta~ed' '.' , ....•

items)' leased' (01: purchaseq) ·from t.hrs vendor l:1y the "Primary

. Committee by listing the· hardware, software, and peripheral

dev~ces making up the syseem.

-:~:::··;·?..-;;,.:-;-:;~~:;c~·r·e1;-~orts~~~d"i!s·at"i~s-.fiie·-~~Tpdie1\e-as··a"unfx-·~I--~/~;t....... ·~·;~_ ...;·····,,;:,--,

running up to 128 devices, with 80 simultaneous users."

-Explain and document which primary campaign functions were

actually performed on that computer system, including the

identification of the application (e.g. office automation,

delegate tracking, accounting/general ledger).

c

C---.

The response states that the system ran the office package

including word processing and scheduling, as well as running

the"~olitical data base (including delegate relations) . ... • •.•• °

0

:." • ".-....: - ~. • ....

~Identity the softwar~ usea f~r each function.

-Explain and document which portion of the leased system

(hardware and software) was acquired by the Primary

Committee, the General Committee, or the Compliance Fund and

when these items were moved to the Gazette Building from

their previous locations.

-Explain and document when that portion of the W.P Malone

system acquired by the other committees was: purchased;

delivered; installed; and fully operational.

-For all parts of the leased system not acquired by the

primary Committee or the General Committee, including

software, provide information concerning when the lease was

discontinued, if and when the equipment was moved to the

GazetLe Building, and when it was returned to the vendor.

Page 52, 12/27/94
Pubf /c 1),"sc/oSurl/

(C4pper)

FEDERAL ELECT 10' (,)'I.\''I.\!::;SIO," FE] 0

FEBRUARY 3, 1995

¢-

DIRECTOR

ROBERT J. CO~A

ASSISTANT ST;"FF

AUDIT DIVISiONI

SUBJECT: REPAYMENTS ~ECEIVED FROM THE LAROUCHE DEMOCRATIC

CAMPAIGN, CLINTON FOR PRESIDENT COMMITTEE, AND .

CLINTON-GORE'92 COMMITTEE

FROM:

THROUGH:

TO:

. . This informational memo is to advise you of three repayment .. --~------checks-recei'\led from. three presidential cOllll!littees as follows: .. .. . . .' , - ---- -- -- - -- -- -,-~- ---------------------------- .. -~-

LaRouche Democratic campaign (1988) - $159,790.93

The check represents a final repayment for matching funds

received in excess of entitlement and non qualified caapaign

expenses.

Clinton for president Committee - $1,383,587

'f')

The check represents a final repayment for matching funds

received in excess of entitlement, non-qualified campaign

expenses, and stale dated checks.

Clinton-Gore '92 Committee - $109,061

The check represents a partial repayment for apparent

prohibited contributions, apparent duplicate payments, non

campaign related activity, income earned on the investment of

federal funds, and stale dated checks.

Attached are copies of the checks and the receipts showing

delivery to the Department of the Treasury. Should you ha~e any

questions regarding the repayments, please contact Ray L1Si at

219-3720.

Attachments as stated
FEDERAL ElECTIOi" (0"'115SI0:--'

February 1, 1995

RECEIPT FROM THE

UNITED STATES DEPARTMENT OF TREASURY

FOR A REPAYMENT OF

1988 PRESIDENTIAL PRIMARY MATCHING FUNDS

Re:ei~,:ed on February 1, 1995 , =:-om the Federal Election

Cc~~ission (by hand delivery), a cashiers check drawn on

Burke & Herbert Bank & Trust Co. (Check 1209832) in the amount

of $159,790.93. The check represents a final repayment frcm the

LaRouche Democratic Campaign representing matching funds

received in excess of entitlement and non qualified campaign - -;e]tpenses-.--- -- -

The payment should be deposited into the Matching Payment

Account

LaRouche Democratic Campaign

Amount of Payment: $159,790.93

Presented by: Received by:

for th~

rederal Election Commission

for the

United States Treasury
..

RE"-',77E" Case >I :'I~~ 58 _ Alexandria. Va Januarv 25,

209832

560

* S. Treas., Remitted through the Federal Elect. Co~. S """ -:: --= 8":: E" 0" ~~ '--=.1,,-59.<..1..-','-'9'-"0'-','-'9-=3'--__

Toot1:: "'JPCHASE Of: .. $Ul=I£'!"'" IJC)NC W'fU. BE ~tR£O

_________B,£~~~~'__~ Q!~~~,_~ RE~~_~_EO ~_E_!O Of' LOSS

CASHIER'S CHECK

rc-

£~ /x;2.Jk/.

ulOO 20ClB3 261 1:05\;00 .Obbl : n.;~:%oo I.'" 21'

~! I
FEDERAL ELECTlO' CO,\-\:,1ISSIO:-"

February 1, 1995

RECEIPT FROM THE

UNITED STATES DEPARTMENT OF TREASURY

FOR A

REPAYMENT OF PRESIDENTIAL PRIMARY MATCHING FUNDS

AND A

PAYMENT TO THE GENERAL FUND OF THE U.S. TREASURY

Received on February 1, 1995, from the federal Election

Commission (by hand delivery), a check drawn on Worthen

National Bank (Check 115433) in the amount of $1,383,587. The-check_r:epr~s~nts a final repayment from the Clinton for

President COlllmi tte-e---foC-matc-hing -funds_ rece_ived in excess of

enti tlement ($1,072,34 4), non-qualifi ed campaign--exp-enses--------

($270,384) and stale dated checks ($40,859).

The repayment/payment should be deposited as follows:

Matching payment Account

General Fund of u.s. Treasury

$1,342,728

40,859

$1,383,587

presented by:

for t.he

federal Election Commission

Received by:

for the

United States Treasury
..

'. ,

! , ,

CLINTON FOR PRESIDENT COMMITTEE

PHONE (501) 37!>-12iO

P.O. BOX 2141

liTTlE ROCI<. AR T2203

WORTMVC NATIONAL LUlIt

UT'TU ROCK, AR 72203

61-7.QO

January 30. 1995

15433

Sl, 383, SS"7 .00

, .....

DATE AMOUNT

y'****One million threa hundred eighty-ttfree thousand five hundred

e i;ht y--s ev-en- -co-rl-a-r-s-and-----z-e-ro--c-e-nt-s-~~~ ~~_!_~ __~_~_~~~~~_~_.._<fI:~_~~_~ *_~~_....**'* ..

U. S. Treasury

(

\

/
FEOER-\l HECTIOS CO~t\'\ISSION

February I, 1995

RECEIPT FROM THE

UNITED STATES DEPARTMENT OF TREASURY

FOR A

REPAYMENT TO THE GENERAL FUND OF THE U. S. TREASURY

Received on February I, 1995, from the Federal Election

Commission (by hand delivery), a check drawn on Worthen National

Bank (Check t13222) in the amount of $109,061. The check

represents a partial repayment/payment from the Clinton-Gore '92

Committee for apparent prohibited contributions ($l,OOO),

apparent duplicate payments ($6,479), non campaign related

activity ($70,296), income earned on the investment of federal

funds ($6,646) and stale dated checks ($24,640).

The repayment/payment should be-d-eposTtea--i-nnj-the- ~erreral----------­

Fund of the U. S. Treasury.

Clinton - Gore '92 Committee

Amount of Repayment: $109,061

Presented by: Received by:

-,

..-- ~, -, ~.

for the

United States Treasury

for the

Federal Election Commission
CUNTON . GORE' 92 COMMITTEE

PHONE (SO,) 312·,m

P.O. BOX 214'

LITTl.E FlOCK. "II 722C'l

WOInltVC NATIONAL lAKIC

LITTLE ROCIC. All T.!2Il3

a,-7.aro 13222

January 30, 1995 $109.CS:.OO

••t·····One ~undrec nine thousanc sixty-one dollars and zero cents· •••••••••••

:-'II) '\ME

CI'ItlBl t:. S. Treasury

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

...

/
UJ

c·

49

The General Committee did not provide any of the detailed

information in its response. The response also did not list

this company as a vendor for the General Committee or the

compliance Fund, but the General Committee paid W.P. Malone

almost $52,000.

ICL, temporary system

-Describe the system borrowed from this vendor by listing the

hardware, software, and peripheral devices making up the

system.

-Explain and document which primary campaign functions were

actually performed on that computer system, including the

identification of the application.

~Identify the software used for each function.

-Explain and document when the temporary system was:

delivered; installed; and fully operational.

-Explain and document which hardware and software, and its

function, was available on this system that was not available

o_n_t.t1es¥l>~em leased from W. P • Malone.

-Explain and document which primary campaign functions the

system performed that the previous systems was not

performing.

-Explain and document which campaign functions and files were

transferred to this system from any other system and the

date(s) of the transfer.

ICL, permanent system

-Describe the system purchased from this vendor by listing

the hardware, software, and peripheral devices making up the

system.

-Explain and document which primary campaign functions were

actually performed on that computer system, including the

identification of the application.

-Identify the software used for each function.

-Explain and document when the permanent system was: ordered;

paid for; delivered; installed; and fully operational.

-Explain and document which hardware and software, and its

function, was available on this system that was not available

on the system leased from W.P. Malone, or on the temporary

system.

Page 53, 12/27/94
C-,

so

-Explain and document which primary campaign functions the

system performed that each of the previous systems was not

performing.

-Explain and document which campaign functions and files were

transferred to this system from any other system and the

date(s) of the transfer.

o For any other computer system used by the General Committee

provide the same information and documentation specified for

the systems leased from W.P. Malone or purchased from IeL.

The response describes the permanent system as "DRS 6000, 386

pc's and networks. DRS 6000 was originally configured to

accomodate [sic] 150 simultaneous users. Additional computer

components were added during the General Election to

ultimately take the capacity to 300 users." The response

also states that the new system continued to run the office

package including word processing, scheduling, and the

political data base for the balance of the primary and the

general election. Further, the response states that the

system expansion accommodated the additional needs of

de1egate _tr~cking •..

With respect to transferring of functions the General

Committee states that -[t]he campaign political office

package and correspondence records were immediately

transferred to the new temporary system. They were then

transferred to the permanent system upon its final

installation. Every effort was made to successfully make the

transfer with the minimum of disruption to daily staff

activities." The General Committee further notes that as

part of the wind down operation and as part of the FEC audit,

other primary files were moved to this system.

Little information is provided that distinguishes the

"temporary system" from the ·permanent system".

o Explain and document the delegate tracking functions

performed on each of the computer systems discussed above.

Also provide information showing when the delegate tracking

function and the related files were transferred from one

system to the other. Explain the additional capacity for

delegate tracking provid~d by each successive system.

The response included a memorandum that is entitled

"Evolution of Delegate Operation Clinton Campaign" which

shows levels of staffing and a general description of

computer equipment available. The memorandum states that the

delegate tracking staff used the leased CCl 632 and a

personal computer through most of April of 1992. According

to the memorandum, "[a]t the end of April the delegate

operation moved to a separate bUilding because of increasing

Page 54, 12/27/94
'.

'.0

51

staff pressures and an intensifying work load which required

either a separate or larger computer system because the CCI

632 system was at it's upper user limit of 80 simultaneous

users. The delegate computer consultant, Bill Krause, was

unfamiliar with Unix systems and recommended that the 386 Dos

PC become [sic] server for a Novell network with

approximately 10+ pes which because it was relatively

portable also became the core of the system the campaign put

together at the convention. The DC office retained the 386

unix pc & 4 terminals. Both systems interfaced imperfectly

with the 632 system because of its limitations on the version

of software it could run."

o Explain and document when general election functions began

to be perforaed on the system leased from W.P. Malone, the

ICL temporary system and the ICL permanent system. specify

which functions were performed on each and the date each was

transferred from one system to the other. Estimate and

document the percentage of time that the primary campaign and

the general election campaign used the equipment prior to and

after July 15, 1992.

The General Committee response did not provide any of the

detailed ~nf~rmation requested above.

o Explain why the Primary Committee took a 40\ depreciation

on the computers that were purchased for the primary

campaign.

In the response, it is stated that the General Committee

followed the Commission's regulation and instructions in the

Primary Manual when the equipment was transferred to the

General Committee. According to 11 CFR 59034.5(c)(1), assets

acquired before date of ineligibility may be depreciated by

40\ or more.

o Explain and document how the computers and software

purchased from Future Now, Inc. furthered the Primary

Committee's primary or convention related activity. Bow

specifically did the Primary Committee use the personal

computers and software. Also, provide information on the

$11,676 in equipment purchased from this vendor but not

bought by the General Committee.

The response to the Interim Audit Report did not provide any

of this specific information.

The General Committee repeated many of the arguments made in

response to the exit conference that are addressed above. In

addition, the General Committee makes a number of specific points

that are addressed below.

o The General Committee argues that the Commission adopted

the 40\ depreciation provision at 11 CFR 59034.5 to simplify the

Page 55. 12/27/94
'-..' .

52

transfer of assets between primary and general committees with

knowledge that some assets would be purchased early in the

campaign and others later.~/

The General Committee is correct. However, that regulation

applies to the transfer of primary assets. The regulation does

not authorize campaigns to purchase assets for the general

election and, because the assets are purchased before the date of

nomination, pay 40\ of the cost from primary funds. As noted

earlier, the purchase of assets by the general election campaign,

prior to the beginning of the expenditure report period, is

anticipated by 11 CFR 59003.4(a)(1).

o The General Committee asserts that the equipment was used

during the primary campaign and that the enhanced computer

capacity was critical to respond to the Primary Committee's

increased correspondence needs, for increased delegate tracking,

to support the scheduling operation, for general political support

and for communications. As noted earlier the General Committee

provided little of the specific information requested in the

Interim Audit Report to support its contention. However, the

General Committee did provide a memorandum from Sherry Curry

listing the Bimonthly Correspondence Report from January 1992 to

November 1992. Her memorandum shows the increase in

-correspondence handled-by the -leased CCl 632. According to the

documentation, her department handled 3,000 pieces of

correspondence in January, 1992 and it increased to 6,000 in

February, 1992. It remained at approximately this level

throughout the rest of the primary. She points out this is not all

the correspondence handled by the campaign, only the general

correspondence handled by her department.~/

In fact the documentation indicates that there is not a

significant increase until July, 1992. For the first half of July

the Primary Committee processed over 6,000 pieces of

correspondence, but the number increased to over 9,000 in the

~/

~/

The General Committee continues to argue that it was not

appropriate to include sales tax in the cost of the assets

transferred. In support of this opinion the General

Committee notes Arkansas law concerning when sales tax

would be applicable to a transaction such as the transfer

of capital assets from the primary to the general election

committees. Although the General Committee may be correct

about Arkansas law concerning sales tax, 11 CFR

S9034.5(c)(1) is intended to provide a formula for the

allocation of the cost of assets. Part of the cost of an

asset is any applicable sales or other tax.

Although, in a memorandum submitted by the primary Committee

in response to the exit conference, it states that mailing of

5,000 to 6,000 pieces per day were being handled. The

relationship between these two memoranda is not clear.

page 56, 12/27/94
,,:~., .

,--

'-

53

second half of July, to almost 27,000 pieces in August, and then

it decreased to almost 19,000 in September. In our opinion, the

documentation the General Committee submitted indicates they

accomplished their objectives with their old equipment during the

primary period, but would have definitely needed expanded

capabilities during the general election period.

With respect to delegate tracking, the information provided

indicates that at the end of April 1992, the operation was moved

to a separate location and utilized a personal computer network.

The General Committee also notes that this equipment was then used

at the convention. It is agreed that this equipment is a primary

expense. However, information available does not indicate how

much, if any, of the cost of this equipment is included in the

amount addressed above. Therefore no adjustment has been made.

o The General Committee also argues that the audit analysis

is inconsistent since the equipment is challenged but not

increased levels of staffing. Although the General Committee may

be correct that some staff hired by the primary Committee may have

been working on the general election, Committee records contain no

documentation that provides information to form a basis for such a

challenge.

"-Finallyt:he--Primary -Commi-ttee--note s--that -i nMay-and__June _

1992, it considered alternatives to acquiring a new computer

system. However, it was concluded that an upgrade of the existing

system would cost apprOXimately $400,000 and still be unreliable.

The Primary Committee decided to buy the new system with the

expectation that Wit would be transferred to the General with

depreciation of 40\-, It is not argued that the campaign made the

wrong choice. However the alternative is not relevant to the

issue at hand.

In summary, the General Committee has made it clear

that the leased computer system used in the primary was not wholly

satisfactory, The reporting, some accounting, and the matching

funds processes were being handled by an outside vendor on the

vendor's computer system. Further, an important part of the

primary campaign, delegate tracking, was eventually moved to a

personal computer network at a different location and that network

was also used at the convention. It is also apparent that the

fully burdened leased system was not going to be adequate for the

increased levels of activity in the more intense general election

campaign, particularly given that two separate accounting and

reporting systems were to be moved from an outside vendor to an in

house function. Further, it would seem only logical that a new

system would necessarily be installed before the convention, given

the likely need to test systems and train staff on the new system,

as well as, transfer files before the general election campaign

was officially under way. Therefore, some lead time at a point

when the least disruption of ongoing functions would occur was

critical. It also appears logical that once a system was acquired

Page 57, 12/27/94
'---

54

for the upcoming general election campaign, some of the remaining

needs of the primary campaign would be moved to the new system.

Based on the above, it was concluded that the new

computer system was a general election expense. Although no

information was available to perform an analysis, it was

acknowledged that some allowance for primary campaign use may be

appropriate. Also, as noted earlier, if any portion of the cost

of the personal computer network acquired for the delegate

tracking staff is included in the amount in question, that cost

would be considered a primary campaign expense.

With respect to the $79,708 for wiring the new

campaign office, the General Committee stated that "it was

incurred and used during the primary campaign and thus was a

qualified campaign expense by the Primary Committee." It was

agreed that the cost of the wiring should follow the computer

equipment. However, as explained above the computer equipment was

considered a general election expense.

The General Committee did note that $12,500 in rent

was erroneously paid by the Primary Committee.

b. polling

The Primary Committee conducted a number of

opinion polls between mid-June 1992 and the convention. The

Primary Committee paid two firms, Greenberg-Lake and Opinion

Research Calling, for work in connection with these polls. Four

of the polls were identified on invoices as national polls and

copies of the scripts reviewed by the Audit staff showed that

nearly all of the substantive questions dealt with the then three

candidates in the general election. The remaining polls were

referred to as Convention polls and were conducted during the

Democratic National Convention. As with the national polls, the

questions are general election in nature. The invoices from

Greenberg-Lake that could be associated with these polls totaled

$108,621, including $37,500 in consulting and $12,733 in travel,

and are treated as general election expenses. Opinion Research

Calling received $93,904.

In response to the Audit staff presentation in

the exit conference, the Primary Committee argued that the Audit

Division's position that these are general election expenditures

is without legal and factual basis. The national and convention

polls were conducted in order to ensure delegate support for the

candidate. The Audit staff's position that these polls conducted

in June and July were for the purpose of influencing the general

election is inconsistent with FEC regulations. Under 11 CFR

SI06.4 polls decrease in value and are only worth 50% after 15

days.

The Primary Committee also submitted a

memorandum from the Executive Director of Greenberg Research Inc.

Page 58, 12/27/94
55

(formerly Greenberg-Lake, Inc.) dated November 8, 1993. According

to the memo the majority of the national surveys tested the

viability of different running mates and whether the delegates

would support the potential running mates. The state surveys were

used to maintain delegate support in those states. The convention

tracking monitored support and was used for the delegates and

state party chairs to maintain delegate support.

During the Audit staff's review of the 4

National Surveys, which were comprised of at least 50 questions

each, it was noted that the questions related to comparisons

between the general election candidates and to various issues.

only 2 of the scripts contained a question (one) about

vice-presidential candidates. The General Committee's argument

that the timing of some polls is such that their value would be

significantly diminished before the date of nomination is not

persuasive. It should be noted that one of the types of

pre-expenditure report period expenditures specifically permitted

pursuant to 11 CFR 59003.4(a)(1) is polling. This regulation

gives recognition to the fact that general election planning must

begin before the convention and may include the evaluation of

polling data. Therefore polling data gathered before the date of

nomination concerning general election candidates and issues are ______us_4tful to the general election effort. Also, the General

committee -s-tates--that-polls were-used to -monitorangmaintain

delegate support, but failed to prOVide evidence or documentaH-on--------

which establishes how this was accomplished.

In the Interim Audit Report, the Commission

requested the General Committee provide documentation to establish

how the results of each of the national surveys was used to test

the viability of different running mates, how the results of each

of the state surveys was used to maintain delegate support in

those states, and how the results of each of the convention polls

was used to monitor support and was used for the delegates and the

state party chairs to maintain delegate support. It was also

recommended that the General Committee explain and document any

other use of the polls and provide a breakdown of the costs

associated with each poll, including the Greenberg-Lake consulting

and travel costs. The General Committee was also to provide

information on any use of the polling results by the General

Committee or the Compliance Fund.

The General Committee did not provide the

specific information requested above, but in response to the

Interim Audit Report, the General Committee did submit an

affidavit from Donita Buffalo Hicks, Managing Director of

Greenberg Research, Inc .. According to the affidavit, polls were

performed in order to develop the candidate's message prior to and

during the Convention and present the candidate at the Convention

in order to ensure the necessary delegate support to ensure the

nomination. The General Committee concludes that the

pre-convention period was critical for consolidating the

candidate's support and demonstrating his electability. The

Page 59, 12/27/94
56

General Committee also submitted a letter from Joseph E. Sandler,

General Counsel with the Democratic National Committee (ONC) that

states, as of July 13, 1992, then Governor Clinton had 2,089

delegates formally pledged to him, out of 2,145 delegates needed

to nominate.

The letter does not specify how the DNC

arrived at the number of delegates. According to the publication

presidential Primaries and Caucuses 1992, A Handbook of Election

statistics, copyright 1992, Congressional Quarterly, Inc., the

candidate had a total of 2,078 pledged delegates at the end of all

the primaries, caucuses, and conventions. This total does not

include over 1,000 super delegates and uncommitted delegates.

The affidavit by Ms. Hicks, continues that

"Convention polling was done each night after prime-time and the

results of the Convention polls were presented each morning to the

party leadership in order to rally the delegates, to assure

delegates that Governor Clinton's popularity was strong and,

accordingly, that he was an electable candidate. In fact, all

polling leading to the Convention was designed to ensure delegate

support by determining whether the Candidate's message was being

communicated effectively and in order to demonstrate the

Candidate's electability." She goes on to state that prior to the .. converition,--polTs"testedthe choice of- a -vice presidential.-

nominee by measuring name recognition and public perception of

individual candidates." She also states that polls can be

outdated within a few days.

The candidate was nominated on July 15, 1992.

According to Mr. Sandler's letter to the Primary Committee, the

candidate had nearly a sufficient number of delegates pledged to

him by July 13. The first convention poll was conducted the

evening of July 13. In the opinion of the Audit staff, it is

doubtful whether the polls conducted on the nights of July 13th,

14th, 15th, and 16th with the results available the next day could

have much effect on the outcome of the candidate's nomination.

Most of the democratic candidates that received matching funds

were no longer seeking the nomination at the start of the

convention, the Candidate likely had sufficient delegates to

secure the nomination by the evening of July 13. Further, two of

the polls were conducted after the candidate was nominated.

From the information provided by the General

Committee, the 4 national polls, including state assessments, were

conducted from mid-June, 1992 through July 8, 1992. According to

the documentation obtained during fieldwork there was a formal

announcement of then Senator Gore as the Vice Presidential

candidate in Little Rock on July 9. The Audit staff concluded

that it was doubtful whether the last poll would have had much

effect on his selection.

The General Committee takes the position that

the Audit staff disagrees with 11 CFR 5106.4 or refuses to

page 60, 12/27/94
~I

c:

'-.

c>

58

c. General Election Media Expenses

Both the Primary Committee and the General

Committee utilized the services of the same media firm, Great

American Media, Inc .. One of the services that was provided was

the production of a biographical film about President Clinton

entitled "The Man From Hope".

President Clinton received the Democratic

nomination for President on July 15, 1992. On July 16, prior to

his acceptance speech, the film was shown at the Democratic

National Convention. By virtue of when the film was shown, it was

available for broadcast by several television networks as part of

their convention coverage. According to Primary Committee

records, the total cost of producing the film was $191,273 with

the Primary Committee paying $161,273 and the 1992 Democratic

National Convention Committee, Inc. ("DNCC") paying $30,000. A

revised version of this film was aired by the Democratic National

Committee during the week of August 16-20, 1992. The cost of that

broadcast was considered a coordinated party expenditure pursuant

to 2 U.S.C. S441a(d)(2). A revised version was also aired by the

General Committee during the period October 9-12, 1992.

--The 'Interim-Audit-Report concluded -that__given.. _

no known use of the film during the primary period, all costs

associated with the film are general election expenses. This

transaction has the effect of increasing expenditures subject to

the overall limitation.

The General Committee's response to the

Interim Audit Report makes a number of arguments concerning the

convention film. First, the General Committee states that in the

Interim Audit Report on the Convention Committee, the auditors

took the position that the portion of the cost paid by the

Convention Committee was an excessive contribution to the Primary

Committee. That is incorrect. The referenced report noted only

that the amount paid was considered an impermissible use of public

funds and that the primary Committee had paid the remaining

charges related to the film. As the General Committee correctly

notes, the Commission decided that the portion of the cost paid by

the Convention Committee was an acceptable convention expense.

The response also alleges that the Primary

Committee was told at the exit conference for the General

Committee that the Audit Division's position with respect to the

film was evolving. Although, the staff does not recall using that

term, given that the issue was being considered in three audit

reports only two of which could be discussed at the exit

conference, the staff was limited in what could be said.

The General Committee also argues that the

expense meets the definition of a qualified campaign expense for

the primary Committee. In this regard the General Committee's

Page 62, 12/27/94
59

contention depends on the expense being in connection with the

Candidate's campaign for nomination. As explained in the Interim

Audit Report, in the opinion of the Audit staff, that is precisely

where this expense does not meet the definition. It was not used

until after the nomination had occurred.

The General Committee argues that the purpose

of the film was to introduce the Candidate to the convention and

that it is therefore a proper primary expense. Further, the

General Committee contends that the Commission has always allowed

costs for staff travel back from the convention to be considered a

primary expense even though those expenses are incurred after the

convention. The General Committee is correct concerning allOWing

the expenses for staff travel back from the convention to be

considered primary expenses, although incorrect about those

expenses being incurred after the convention. The expense is

incurred before the individual leaves to attend the convention.

None of this changes the fact that the film was produced to be

shown after the nomination and, in the Audit staff's opinion, is a

general election expense.

The General Committee states that in the past

the Audit Staff has not challenged such expenses. Again the

General Committee is correct. If similar films have been produced by p-rimary-c-ommlttees-they -have -not -been-identifiedduringthe _

course of the audits. The General Committee continues, that if a

restriction is to be placed on the payment for such films to a

particular source, it should be done in the context of a

rulemaking. The Commission'S regulations do not attempt to list

each and every type of expense that a primary committee mayor may

not pay. There is no need or practical way to create such a list.

The regulations state that expenses paid by the primary committee

must be in connection with the candidate's campaign for

nomination. This film was created for use after the nomination

had been awarded. Therefore, the Audit staff concluded that it is

not in connection with the campaign for nomination. It is however

a proper general election expense.

Finally, the General Committee disagrees with

the determination of the Candidate'S date of ineligibility for the

primary matching funds. It is argued that the date of the

acceptance speech rather than the date of the vote is the relevant

date. The Commission's regulations at section 9032.6 define the

end of the matching payment period for a candidate seeking the

nomination of a party which nominates its Presidential candidate

at a national convention as the date on which the party nominates

its candidate. The Code of Federal Regulations at section

9033.5(c) states the ineligibility date shall be the last day of

the matching payment period for the candidate. These provisions

are clear and do not reference the date of an acceptance speech.

Further, the primary Committee was notified of the date of

ineligibility (7/15/92) shortly after the convention and did not

object until the response to the Interim Audit Report.

Page 63, 12/27/94
c:

60

In support of its theory, the General

Committee states that the Commission must defer to party rules on

the date of nomination and submits a letter from the General

Counsel of the Oemocratic National Committee which the General

Committee states establishes the date of ineligibility as July 16,

1992, rather than July 15. In the letter Counsel states the

procedural rules for the 1992 convention provide that "following

the role call vote on selection of the presidential candidate, the

Permanent Chair is to 'appoint a committee to advise the nominee

of his or her selection, to determine if he or she will accept the

nomination and to invite the nominee to deliver an acce tance

speech to the Conventlon' emphasls in origina text.

First, contrary to the General Committee's

statement, the Commission is not required to defer to party rules,

but rather to follow the provisions of the Act. The Commission's

determination has done that. Second, the quoted section of the

Party's procedures do not suggest that the nomination is not

"official" until the acceptance speech. Instead, the language

supports the Commission's determination by referring to the

candidate as the "nominee" in two places within the one sentence.

The General Committee offers a number of other

obse-rvaUonsconcerningthe--timingof-the vote when held late_i_n_

the day which could apply equally to the date on which a candidate

makes an acceptance speech.

For the reasons stated above, the conclusion

contained in the Interim Audit Report was unchanged in the final

audit report presented for Commission consideration.

In addition to the cost of producing the film

discussed above, a number of other general election media expenses

were paid by the primary Committee. An invoice dated July 20,

1992 for $6,109 for work relating to focus groups was identified.

One of two versions of the invoice notes that the focus groups

were "to test general election messages".

Another invoice was for "35mm Film Shoot" at

the oemocratic National Convention on July 15 and 16, 1992. These

dates were the candidate's date of ineligibility and the following

day. The Interim Audit Report concluded that film taken on these

days could have little opportunity to be used in the primary

campaign. The invoice was for $4,950.

A third invoice in the amount of $18,900 is

one of a number billed to the Primary Committee for travel,

administrative costs and fees, and some production related items.

The invoice contains a statement that "THIS INVOICE IS ENTIRELY

FOR EXPENSES INCURRED DURING THE PRIMARY PERIOD". However a

review of the charges shows that the invoice appears to cover the

period July 16, to August 18, 1992 and is apparently a general

election expense.

page 64, 12/27/94
. "

61

Finally, the Primary Committee paid an invoice

dated August 20, 1992, which noted it was for a "Test Response

Spot". The invoice is addressed to the Clinton/Gore '92

Committee. Absent further documentation, the $4,106 is included

as a general election expense.

With respect to the "35mm Film Shoot" ($4,950)

the General Committee points out that one of the mailings

discussed above included a photo of the Presidential and Vice

Presidential candidates on the podium at the convention that had

been promised in an earlier primary solicitation. Although, the

General Committee does not provide any evidence to show that this

expense was for that photo, it is reasonable to conclude that the

two are related. The General Committee's explanation is accepted.

The General Committee provided an affidavit

from Anne Marie Hannon, Controller for Great American Media, Inc.

to address the $18,990 charge for travel, administrative fees, and

production. Ms. Hannon states that with the exception $760 in

travel expenses, all of the charges are for primary work. She

explains that it is not unusual for billings to be delayed due to

the need to gather information from staff and vendors, and await

credit card billings. Ms. Hannon provides no detailed information

-----to.support-the-explanationand- does-notexplain-whytheinvoice__

indicates that the charges relate to a general election period.

The General Committee does not address the

remaining two charges.

The Audit staff concluded that the total

amount of media expenses paid by the Primary Committee is

$190,478. <""

c

d. Miscellaneous General Expenses

A number of other expenses were noted that are

considered to be general election expenses paid by the primary

Committee. Each is discussed briefly below:

o The primary Committee purchased 150,000 copies of the book

Putting People First. The total cost was $110,286 based

on invoices dated July 6 and 10, 1992. The Primary

Committee sold 106,000 copies of the book to the General

Committee for $15,900. The value was determined by

multiplying $.25 per copy times 60%, to arrive at $.15 per

copy times 106,000 copies. There are two errors in this

calculation. First, the cost of the books, using the

lower of the two prices paid by the Primary Committee, was

approximately $.72 per copy. Second, since these books

are not ·capital assets· they are not subject to the

depreciation allowance provided at 11 CFR S9034.5(c)(1).

The General Committee should have paid $.72 x 106,000, or

page 65, 12/27/94
c

62

$76,320. Therefore an additional $60,420 is due from the

General Committee.

In response to presentation of this matter at the exit

conference, the primary Committee stated that it does not

agree that there is a receivable from the General

committee. The Primary Committee stated that the majority

of the publications were used during the primary and the

Democratic National Convention. They also stated, that

the value of the publications was not required to be

transferred as an asset to the General Committee pursuant

to 11 crR S9034.5(c) because they are not capital or other

assets.

In total there was 150,000 copies purchased from the

vendor. Of that total 106,000 were purchased by the

General Committee. If the majority of these books were

used during the primary and convention, it would appear

that 106,000 would not have been available to sell to the

General Committee. No documentation to support the

statement was submitted. Further, the audit analysis did

not characterize the books as either a capital or other

asset, but rather a general election expense paid by the

Primary Committee.

In response to the Interim Audit Report the General

Committee states that "[b]ased on the best information

available to the General Committee at this time, it

appears that the pamphlets sent to and distributed at the

Convention were erroneously counted in the inventory

prepared by the primary Committee". The General Committee

also objects to referring to these pamphlets as books.

The General Committee provided a copy of the booklet at

issue and copies of two brochures of the same name

produced by the General Committee and, an affidavit from

Jann Greenland stating that it was her understanding that

the original booklet was for use in the final stages of

the primary Campaign as well as a promotion piece during

the convention. Further, according to the Primary

Committee, even if some booklets were sold to the General

Committee, since they weren't used in the general

election, they should not be considered a general election

expense and the Committee should refund the General

Committee the $15,900 paid.

The Audit staff used the word "book" because the

documentation submitted by the Primary Committee during

fieldwork used the term. The information provided does

not establish that the booklets were shipped to the

Convention, that they were not used in the general period,

or how the inventory prepared after the Convention could

have concluded that 106,000 booklets that did not exist

were in inventory.

Page 66, 12/27/94
63

At the time the primary Committee presented the inventory

to the Audit staff, there did not seem to be any question

as to the existence of the 106,000 booklets sold to the

General Committee. At a minimum, the General Committee

could supply an affidavit from the primary Committee

personnel responsible for the inventory to explain whether

106,000 booklets existed or not. Absent additional

information the cost of the booklets is considered to be a

general election expense.

o The Primary Committee contracted with Press Association,

Inc. for a news service. The contract was to run from

June 26, to November 30, 1992. The total cost was

$14,753. The primary Committee paid $10,003 of this

amount. This is considered a general election expense.

In response to the Interim Audit Report, the General

Committee agrees that it has overpaid its portion, but

disagrees with the entire amount being a general election

expense. The Response contends that the correct amount of

the overpayment by the primary Committee was $7,687. That

amount was refunded to the primary Committee on June 10,

1994. Neither committee explained how this amount was

arrived at. Absent additional information, the entire -- -$-10 ;lT03-iscons-idered- a--9~n~ral-election-expense_. __

c.

o The Primary Committee chartered aircraft from Air

Advantage. payments via wire transfers were made in

advance and charges were applied as incurred. At the end

of the primary election period (7/15/92) a credit balance

existed that was applied by Air Advantage to general

election charges. The primary Committee performed a

reconciliation and determined that $27,222 was due from

the General Committee. In addition, the Primary Committee

had paid $17,000 for a reconfiguration of the aircraft,

bringing the total amount due from the General Committee,

per the primary Committee's reconciliation, to $44,222.

Subsequently, the Primary Committee concluded that $15,000

of the $17,000 reconfiguration charge could be considered

a primary expense since the work was done on July 10,

1992, prior to the candidate's date of ineligibility. It

is clear that improvements to the aircraft were done in

preparation for the general election campaign. The only

use of the aircraft after July 10, 1992 and before the

Candidate's date of ineligibility was to transport the

Candidate and then Senator Gore to the convention. After

the convention the aircraft was used in the general

election campaign.

In response to the Interim Audit Report, the General

Committee agrees that the $2,000 and the $27,222 were

erroneously paid by the Primary Committee, and notes that

the amounts were reimbursed on January 11 and March 24,

1994. However, it still disagrees with the $15,000

Page 67, 12/27/94
64

reconfiguration charge. Since the reconfiguration costs

were incurred on July 10, 1992 and the airplane was used

in the primary, in the General Committee's opinion, the

entire cost was allocable to the primary. The one time

use of the aircraft before the convention does not justify

the allocation of this cost to the primary.

o The Primary Committee made other payments to various

vendors that appear to be related to the general election

campaign. Some of the items are expenses incurred in the

general election period while others are monthly expenses

that should have been allocated between the Primary

Committee and the General Committee for the month of July,

1992. The total amount is $20,066.

In response to the Interim Audit Report, the General

Committee noted that refunds totaling $14,420 were made on

January 11 and Karch 24, 1994 to the primary Committee and

it was planning to refund the remaining $5,646.

lG

'-- .

In the Interim Audit Report, the amount

owed to the Primary Committee from the General Committee was

$879,361. Prior to the Commission meeting of December 15, 1994, _____th_i_s_~m.ount had been revised, based on the General Committee's

response; -to-~8·n~41L-Of-this-amount,$51,-329-hasbeen--refunded _

by the General Committee as of June 30, 1994. These refunds leave

an outstanding balance of $823,082 due to the Primary Committee.

However, at the Commission meeting of

December 15, 1994, the Commission found many of these expenses

to be similar to the expenses in the Bush-Quayle '92 report

considered at the Commission meeting of December 8, 1992. As a

result, some of the expenses were allocated, 50\ to the Primary

and 50\ to the General Election. The capital assets were

allocated 40\ to the Primary as permitted by 11 CFR S9034.S(c).

These changes are detailed at Attachment IS. As of June 30, 1994,

these refunds leave an outstanding balance of $398,480 due the

Primary Committee. This amount is included in the figure for

accounts payable due from the Primary Committee on the General

Committee's NOQCE Statement at Attachment 16.

3. Executive Jet Management

An internal Primary Committee memorandum dated June

2, 1993 noted an overpayment to this vendor. The vendor sent a

refund check to the General Committee which included $4,778 which

was properly due to the Primary Committee. The Audit staff's

review indicated this was a payable due the primary Committee by

the General Committee. This amount ($4,778) was included as an

offset to expenditures by the General Committee and therefore

reduced expenditures subject to the spending limit. Thus, $4,778

had been added to our analysis of expenditures subject to the

spending limitation.

Page 68, 12/27/94
'.---~

"

'-

c'

65

In response to the Interim Audit Report, the

General Committee agreed that this item should have been refunded

to the Primary Committee and that it should not have been an

offset to the General Committee's expenditures. The amount will

be transferred according to the General Committee's response.

4. Alamo Rent A Car National Contract

In an internal memorandum dated May 18. 1993, the

Primary Committee noted that based upon its analysis a total of

$43,420 should be transferred from the General Committee to the

primary Committee. The amount represented an overpayment by the

primary Committee credited by the vendor to the General Committee.

Accordingly, this amount ($43,420) was not reported as a

disbursement by the General Committee and thus was not included in

expenditures subject to the spending limitation. Therefore, the

Audit staff has included this amount in its analysis of

expenditures subject to the spending limitation.

In response to the Interim Audit Report, the

General Committee agreed that this item should have been treated

as an expenditure subject to the spending limitation. The primary

__Commi_t_t_l!e has been reimbursed.

5. Sprint & C&P Telephone

During fieldwork, the Audit staff identified

overpayments to Sprint. The overpayments, which appear to have

resulted mostly from bills having been paid twice, were made by

both the primary Committee and the General Committee.

Documentation provided by the General Committee

indicated that refunds were received which included amounts

overpaid by both committees. The documentation noted that

refunded amounts totaling $19,198 were moneys due the Primary

Committee. This amount was included as an offset to expenditures

to the General Committee and therefore reduced expenditures

subject to the spending limit.

In response to an exit conference presentation, the

Primary Committee submitted documentation relative to C&P

Telephone which indicated that the primary Committee made

overpayments of $3,606 which were credited to the General

Committee's account. As such, this amount was not reported as a

disbursement and thus was not included in expenditures subject to

the spending limit.

Therefore, the General Committee owed the Primary

Committee a total of $22,804 ($19,198 + $3,606) relative to these

two vendors which the Audit staff had included in its analysis of

expenditures subject to the overall spending limitation.

Page 69, 12/27/94
c.. -

66

In response to the Interim Audit Report, the

General Committee agreed that these amounts were General Committee

expenditures subject to the spending limitation. These amounts

have been reimbursed to the Primary Committee.

6. Adjustment for Duplicate Payments to be Refunded

In the Interim Audit Report, the Audit staff made

an adjustment for duplicate payments recovered from vendors and

those yet to be resolved totaling $21,614 (see Finding III.B.1.

above). In response to the Interim Audit Report, the General

Committee stated this should be adjusted based on its response to

Finding III.B.1. Based upon that response, the Audit staff has

determined that duplicate payments in the amount of $8,329 remain

unresolved (see Attachment 2). Based on the General Committee's

response, the Audit staff's adjustment, as noted above ($21,614),

remains unchanged.

7. Adjustment for Apparent Non-Qualified Campaign

Expenses

In the Interim Audit Report, the Audit staff had

made an adjustment for non-qualified campaign expenses totaling -$-8;i~077(se-eFlndingIII.B~2. ; above).

Based on the General Committee's response to the

Interim Audit Report, Finding III.B.2., the Audit staff has

revised our adjustment for apparent non-qualified campaign

expenses to $70,296 (see Attachment 3).

8. Adjustment for Accounts Payable reported as

Outstanding at June 30, 1993

In the Interim Audit Report, an accounts payable

total of $549,770 was added to operating expenditures. This amount

represented accounts payable reported by the General Committee as

outstanding on June 30, 1993. The General Committee provided a

listing of these accounts payable to support the reported figure.

Included in the listing was a debt owed to the

Primary Committee in the amount of $78,541. However, no

documentation or explanation was provided detailing the nature of

the debt. The Audit staff was concerned that this debt ($78,541)

may duplicate amounts owed to the Primary Committee which we had

identified above (Findings III.C.2., 3., 4., and 5.); and, would

result in an overstatement of expenditures subject to the overall

spending limitation. The Interim Audit Report noted that should

additional documentation indicate an overstatement, the amount

subject to the spending limitation would be adjusted accordingly.

The General Committee's response to the Interim

Audit Report states that the payable to the Primary Committee,

Page 70, 12/27/94
67

included in the Audit staff's adjustment for accounts payable

duplicates the specific adjustments to expenditures subject to the

spending limitation detailed at Findings III.C.2., 3., 4., and 5.

by the amount of $77,942. However, the General Committee's

response fails to provide any documentation detailing those items

composing the $77,942.

The Audit staff has revised the adjustment for

Accounts payable based on disclosure reports filed by the General

Committee. The General Committee reported accounts payable at

June 30, 1994, of $165,536, which included a payable to the

primary Committee in the amount of $13,244. Due to the absence of

documentation noted above, this payable to the Primary Committee

($13,244) could still duplicate amounts also detailed at Finding

IlI.c.2 ..

9. Amount owed to OSCC WIN '92 by the General

Committee

Based on documentation submitted by the General

Committee subsequent to the exit conference, a refund received

from SNET included funds paid by OSCC Win '92 "for additional

service for the coordinated campaign." The General Committee

stated it would "refund the appropriate share to the OSCC"

-($1,-2-19T:--Tnrs--amount was-rlfported -bythe--Gene-r-al-committee-a1>-an

offset to expenditures which reduced expenditures subject to the

spending limit. Thus, the Audit staff included $1,239 on its

analysis as an increase to expenditures subject to the spending

limitation.

The Interim Audit Report recommended that the

General Committee demonstrate that this item should not be

included in the calculation of expenditures subject to the

spending limitation. The General Coamittee's response to that

report states that it agrees that this item should not be included

as an offset to expenditures subject to the spending limitation.

General Committee disclosure reports indicate this amount has been

refunded.

10. Adjustment for Capital Assets

Based on the Audit staff's review of the available

documentation, the cost of computers and related equipment

transferred from the Primary Committee to the General Committee

was determined to be $540,313 (see Finding III.C.2.a.). Based

upon 11 CFR S9003.3(a)(2)(ii), the Audit staff then allocated 70\

of the cost of these assets as compliance related; the remaining

30\, or $162,094 ($540,313 x 30\) were considered capital assets

of the General Committee. Adjusting for depreciation, the value

of the General Committee's capital assets was determined to be

$97,256 ($162,094 x .60).

Page 71, 12/27/94
c'

68

This adjustment recognizes that the sale of assets

would result in a partial recoupment of expenditures made to

procure these assets.

The General Committee's response to the Interim

Audit Report did not altered the Audit staff's position, as such

no adjustment to this figure was made in the report as presented

for Commission consideration.

As a result of the Commission's deliberations as

discussed above in Finding III.C.2.a., the Audit staff determined

the cost of the assets transferred to the General Committee to be

$327,559. Adjusting for that portion of the assets allocable to

the Compliance Fund (70\) and for depreciation (40\), the value of

capital assets for the General Committee was calculated to be

$58,961 ($327,559 x 30% x 60%).

11. Expenditures That May be Reimbursed to the General

Committee from the Compliance Fund

The Audit staff utilized the General Committee'S

disbursement database to identify, at the time of the Interim

Audit Report, $1,829,239 in compliance-related expenditures made

-b:Y-tbeGenetalCommittee through -December 4 T-1992 (-the_ end_ of_tJ1e_

expenditure report period). In addition, a 100\ review of

disbursements made by the General Committee from December 5, 1992

through June 30, 1993 identified an additional $900,414 in

compliance-related expenditures. The Audit staff's review of

disclosure reports filed by the General Committee, which covered

the period July 1, 1993 through June 30, 1994, identified

compliance-related expenditures totaling $645,643. Based upon the

above, expenditures totaling $3,375,296 ($1,829,239 + $900,414 +

$645,643) could have been paid by the Compliance Fund.

After adjusting for $2,595,000 transferred from the

Compliance Fund through June 30, 1994, there remains $780,296

($3,375,296 - $2,595,000) that may be reimbursed.

The General Committee's response states that it

agrees that additional funds may be reimbursed to the General

Committee by the Compliance Fund, but disagrees with the auditors'

numbers as to the amount necessary to remain within the limits.

Shown below is a presentation of the Audit staff's

analysis of expenditures subject to the limitation updated based

upon the General Committee's response and disclosure reports filed

through June 30, 1994:

Page 72, 12/27/94
69

CLINTON/GORE '92 COKKITTEE

Expenditures Subject to the Spending Limitation

as Determined by the Audit Staff at 6/30/94

1. Reportable Disbursements from

Inception through June 30, 1994

Adjustments to Reportable Disbursements

2. Less: Loan Repayment

$64,920,993 10/

($125,000)

3. Less: Offsets to Operating Expenditures ($7,012,115)

4. Less: Accounts Receivable Due

at 6/30/94 11/ $181,812

($2,595,000)

$403,258

($21,614)

($70,295)

($43,726)

8. Less: Duplicate Payments (see Finding III.C.6.)

9. Less: Non-Oualified Campaign Expenses Subject

to Repayment (see Finding III.C.7.)

--.

5. Less: Refunds from the Compliance Fund

6. Less: Amount Receivable from the

Primary Committee (see Finding III.C.1.)

~~::-----------7-;--Add~--Amount--due to the-Primary _ColUlitte_e _

(see Finding III.C.2. and 3.)

c-.

10/ This figure does not include Worldwide commissions and credit

card charges netted from amounts forwarded to the General

Committee. Such an adjustment would also require an

adjustment to offsets received by the General Committee,

resulting in offsetting adjustments and no change in the

final amount of expenditures subject to the spending

limitation.

It should be noted that this figure does not include about

$190,000 in media refunds that were under review by the

General Committee's media vendor to determine if the money

is due the General Committee or DNC as a result of 441a(d)

expenditures. The General Committee has recently submitted

additional documentation. After the Audit staff has

reviewed the documentation, this figure will be adjusted

accordingly. In addition, the Audit staff has made an

allowance for uncollectible reimbursements due from the

Secret Service totaling $108,982. This figure also

excludes the accounts receivable due from the primary

Committee ($43,726) noted in item 6. below.

Page 73, 12/27/94
70

10. Add: Reported Accounts Payable at 6-30-94

(see Finding III.C.8.) $165,536

11. Add: Amount due DSCC Win '92 from The

General Committee (see Finding III.C.9.) $ -0-

12. Less: Adjustment for Capital Assets

(see Finding III.C.10.) ($58,961)

13. Add: Donated Equipment (see Finding III.A.1.) $ -0-

14. Add: Payments Not Made by the General Committee

(see Finding III.A.2.) $ -0-

15. Add: Deposits Credited to General Committee

Bills (see Finding III.A.3.) $1,000

'-

16. Add: Amended Contracts

(see Finding III.A.4.l

17. Add: Repayable Income Earned

(see Finding 111.0.)

-18;-Add~-Income---E~rned-Credited-tc--

vendor Invoices (see Finding III.D.)

Adjusted Expenditures Subject

to the Spending

Limi tation

Less: Limitation (2 U.S.C. S441a(b)(1)(8»

Amount Over/(Under) the Limit

Less: Expenditures that may be Reimbursed

8y the Compliance Fund - Total

Available $780,296

(see Finding III.C.ll.)

Amount in Excess of the Spending Limitation

$111,100

$6,646

$7,830

$55,507,840

($55,240,000)

$267,840

($267,840)

$ -0-

Based on the above analysis, it appears that the

General Committee has exceeded the limitation at 2 U.S.C.

S44la(b)(1)(B) in the amount of $267,840. However, it is

recognized that reimbursements permitted from the Compliance Fund

as noted above would eliminate any excessive amount and resulting

repayment.

The Interim Audit Report recommended that the

General Committee provide evidence that the expenditure limitation

has not been exceeded. Absent such evidence, the Audit staff

recommended that, based on the information available at that time,

Page 74, 12/27/94
71

the Compliance Fund transfer to the General Committee $706,499 for

expenditures that may be paid by the Compliance Fund in order to

reduce General Committee expenditures subject to the expenditure

limitation and provide evidence of such transfer. The evidence

was to include a copy of the front and back of the negotiated

check or a copy of the debit and credit memos.

The General Committee's response to the interim

audit report addressed each of the areas noted above and is

detailed within each of the sub-sections discussed above.

Based upon our analysis of the General Committee's

response, disclosure reports filed and transfers from the

Compliance Fund received to date, the Audit staff recommended in

the report considered by the Commission that the Compliance Fund

transfer an additional $654,146 for expenditures that may be paid

by the Compliance Fund, in order to reduce General Committee

expenditures subject to the expenditure limitation, and provide

evidence of such transfer. The evidence was to include a copy of

the front and back of the negotiated check or a copy of the debit

and credit memos.

As a result of the above noted revisions, ar1s1ng

from the Commission's deliberations on December 15, 1994, the ._- Audit--sta ff--recolll!l1ends--tha~--the-Compl iance- Fund-transfer an

additional $267,840 for expenditures that may be paid by the

compliance Fund, to reduce General Committee expenditures subject

to the expenditure limitation and provide evidence of such

transfer.

D. Income Earned by the General Committee

'J"'

Section 9004.5 of Title 11 of the Code of Federal

Regulations states, in relevant part. that the investment of

public funds or any other use of public funds to generate income

is permissible, provided that an amount equal to all net income

derived from such investments, less Federal, State and local taxes

paid on such income, shall be repaid to the Secretary.

Section 9007.2(b)(4) of Title 11 of the Code of Federal

Regulations states that if the Commission determines that a

candidate received any income as a result of the investment or

other use of payments from the Fund pursuant to 11 CFR S9004.5, it

shall so notify the candidate and such candidate shall pay to the

United States Treasury an amount equal to the amount determined to

be income, less any Federal, State, or local taxes on such income.

The media vendor utilized by the General Committee

maintained an interest bearing escrow account on behalf of the

General Committee. The account was opened on August 14, 1992 and

through April 30, 1993, the General Committee had earned interest

totaling $6,613. As of May 22, 1993, $5,448 of the interest

earned by this account was applied by the vendor against the

General Committee's media buys.

Page 75, 12/27/94
72

In addition, the Audit staff identified $1,217 in

interest credited to a General Committee phone bill from

Southwestern Bell. The interest was earned on a deposit held by

the phone company. Thus, the General Committee earned a total of

$7,830 ($6,613 + $1,217) in interest. It should be noted that the

Audit staff has adjusted our analysis of Expenditures Subject to

the spending Limitation by $7,830. This amount ($7,830)

represents interest totaling $6,665 ($5,448 + $1,127) which was

applied by the vendors against amounts owed by the General

Committee; and $1,165 in interest which, absent evidence to the

contrary, the Audit staff presumes was also applied by the media

vendor against amounts owed.

With respect to our review of this matter, the Audit

staff was unaware of any taxes paid relative to this income.

Therefore, it appeared that a payment to the U.S. Treasury in the

amount of $7,830 was warranted. In addition, the Audit staff had

requested statements for the media escrow account subsequent to

April 30, 1993, in order to determine any additional interest

earned by the General Committee.

The Interim Audit Report recommended that the General

Committee provide documentation, to include but not be limited to ---- ----bank -sta-tements,-that-demonstrated the-amount of interest -earned---

by the General Committee subsequent to April 30, 1993. Further,

it was requested that if any Federal and/or State income tax had

been paid on this income, the General Committee should submit

copies of the relevant tax returns. The Interim Audit Report also

noted that absent a demonstration that the interest should not be

considered income and that taxes had been paid, the Audit staff

would recommend the Commission make an initial determination that

$7,830 was payable to the united States Treasury.

In response the General Committee provided a copy of its

tax return for the fiscal year ended June 30, 1993. This return

indicated $3,529 in interest income with taxes due of $1,184. The

General Committee stated that "the Committee agrees that the

amount of interest earned net of taxes paid is owed to the u.S.

Treasury."

Although the General Committee states that the interest

earned net of taxes is due the u.S. Treasury, no documentation was

provided to demonstrate the amount of interest earned since April

30, 1993. In addition, there is no mention of the discrepancy

between the $7,830 identified by the Audit staff and the $3,529 in

interest reported on the tax return. Although the total interest

earned by the General Committee is not known at this time,12/ it

The Committee's response did not include bank statements for

the media escrow account subsequent to April 30, 1993, which

could show additional interest earned that would increase the

amount payable to the u.S. Treasury.

Page 76, 12/27/94
73

appears that a payment of at least $6,646 ($7,830 - $1,184) to the

U.S. Treasury is warranted.

Recommendation 14

The Audit staff recommends that the Commission make an

initial determination that $6,646 is payable to the United States

Treasury pursuant to 2 U.S.C. S9004.5.

E. Stale-Dated Checks

Section 9007.6 of Title 11 of the Code of Federal

Regulations states that if the committee has checks outstanding to

creditors or contributors that have not been cashed, the committee

shall notify the Commission. The committee shall inform the

Commission of its efforts to locate the payees, if such efforts

have been necessary, and its efforts to encourage the payees to

cash the outstanding checks. The committee shall also submit a

check for the total amount of such outstanding checks, payable to

the United States Treasury.

The Audit staff performed bank reconciliations through

June 30, 1993 for both the General Committee and the Compliance

Fund. The Audit staff identified stale-dated checks relative to

-~ -- ------the General--CommitteetotaHng-$13 i 668 -andstale-datedcheckswith------

~~- respect to the Compliance Fund totaling $3,631.

At the exit conference, representatives for both

committees were provided with photocopies of workpapers detailing

the above noted stale-dated checks.

• I"'

-, ,

As part of the documentation submitted in response to

the exit conference, the General Committee provided a list of the

stale-dated checks annotated with the action taken with respect to

each item; such as, a replacement check was issued or that the

check had been voided. However, no documentation other than bank

statements supporting these actions was provided. Based on the

bank statements provided, the Audit staff was able to determine

that $11,139 in stale-dated checks have either cleared the bank or

been replaced by checks which have cleared the bank. Therefore,

at the time of the Interim Audit Report, $62,529 ($73,688 -

$11,139) in stale-dated checks remained unresolved for the General

Committee.

The Interim Audit Report recommended that the General

Committee and the Compliance Fund provide evidence that:

• the checks were not outstanding (i.e., copies of the front

and back of the negotiated checks and bank statements); or

• the outstanding checks are void (copies of the voided

checks with evidence that no obligation exists, or copies

of negotiated replacement checks); or

Page 77, 12/27/94
74

o inform the Commission of the committees' attempts to locate

the payees to encourage them to cash the outstanding checks

or provide evidence documenting the committees' efforts to

resolve these items.

Absent such information, it was stated that the Audit

staff would recommend that the Commission make an initial

determination that stale-dated checks totaling $66,160 ($62,529 +

$3,631) are payable to the United States Treasury.

In its response to the Interim Audit Report, the General

Committee states that of the $73,668 in stale-dated checks only

$18,824 remain unresolved. The response states that inquiries

have been sent to the recipients and the Audit staff will be

apprised as additional information is received. The response

further states that a listing of additional checks that were

reissued ($27,183), cleared ($1,604), and voided ($26,057), with

accompanying documentation are included. The response did not

address stale-dated checks totaling $3,631 issued by the

Compliance Fund.

Based on a review of the documentation submitted to

date, the Audit staff has determined that stale-dated checks,

totaling $18,674, for which the General Committee mailed

--TnquTrie-s,- -,fie-un[esolved. Tn-additi-on: ,for those stale~dated--­

checks listed by the General Committee as having been voided

($26,057), copies of the voided checks with evidence that no

obligation exists were not provided as recommended and, therefore,

the Audit staff considers these items unresolved. The Audit staff

also notes that, of those stale-dated checKs reissued by the

General Committee, copies of negotiated replacement checks (or

copies of the check and appropriate bank statements) were not

provided for checks totaling $8,560. For one stale-dated check

($253), the General Committee did not provide a bank statement

evidencing the item had been negotiated. As a result of this

analysis, the Audit staff has determined that stale-dated checks

totaling $53,544 ($18,674 + $26,057 + $8,560 + $253) are

unresolved with respect to the General Committee.

Therefore, the Audit staff reduced the amount of

unresolved stale-dated checKs to $57,175 ($53,544 + $3,631). See

Attachments 7 and 8, respectively.

Recommendation #5

The Audit staff recommends that the Commission make an

initial determination that the Committees are required to make a

payment of $57,175 to the United States Treasury pursuant to 11

CFR 59007.6.

Page 78, 12/27/94
75

IV. Recap of Amounts Due to the United States Treasury

Reflected below are the amounts due the United States

Treasury as noted in this report:

Finding III.A., Apparent Prohibited Contributions $ 112,100

Finding III.B., Non-Qualified Campaign Expenses

1. Apparent Duplicate Payments

2. Non-campaign Related Activity

Finding 111.0., Income Earned

Finding III.E., Stale-Dated Checks

Total Amount Repayable

Page 79, 12/27/94

$ 8,329

$ 70,296

$ 6,646

$ 57,175

S 254.546
Page 80, 12/27/94
First C:ass

Attacl"lTlent 1

Page 2 nf 14

IIIII

S:L:

~e:

-

'-

Bill Clinton

CLINTONIOORE COMPLtANCB FlJ'!t"D

Dept. 3224

P.O. Box 8802

IJttle Reek. A.R 72231-8802

page 81, 12/27/94
> ,

:

Number 99430

:J.:.u Loyal Friend.

7:le ar-.ached offici&.l Pre-Convmbon

> C:-~tOn Team ~pt!i pin has been sent I ~= '"ou m ~tiOnOfyour5teaOJast· ---;-->>- I ;=~..tnnmt to our cause. I

I

;! :s a collectible linuted edition and

:s oniy available to those dedicated

;'''ldt",duals who contributed to my

?~onventionampaign.

I "'"l1J never forget your genesC5ity and

s~ friendship.

~~~!~ ......

Page 82, 12/27/94

Attach:rent 1

Page 3 of l~
Att.:lchment 1

Page 4 r: l~

I{ -\1'11) RL"'iI\ r\j:---f _\(. "11\" )~ \H \1\.) .

3:H Cl:nton

=:_:-":=;"'."Go~ Compliance FUI".d

: : : \l,"est 3rd Screet

~.] Box 8802

:':rrle Rock. AR 72!31

From: Rr. Sa.ple A. S••ple

123 Any Street

Anytovn, OS 00000·0000

41 Yes, Bill, we mwt be fully prerared:

i as-ee George Bwh and Dan Quayle have nothmg to run on and. beause of thIS. we can ex;:«t :':'lore

""'';l.:tiite Honon" sryle amen thIS year-and much wone_

! have !".JShei:l my pel'5Onal check made out to the special CLP.-ITONIGORE COMPLlA~CE FL~D

::-. the amount of:

i ] 525 { 1 SSO { 1 S100 { 1 52S0 { 1 Other $ _

123~5.76--316b00010000X

..

Page 83, 12/27/94
Attachment 1

Page 5 r:f 1..

~:- e rederal Electlon Commission requires the followmg information:

-.--......i::rns _

:: __ =."cn EmpIOftr _

? ~3!e make vour ~!'!IOnal check OUt to the Chnton/Gore Compliance Fund. Corporate contTIbutlcns

3~e :-r=r'llblteC by law. Polltlul contnbutlON are not tax deductible.

Page 84, 12/27/94

...
A~~C'lne..-:: 1

Pa;e 6 c~ 1":'

.~_ S&:?le A. SLaple -.:. ~.,y Street

J_• • :...~. US COOOO • ססoo

AUI\U t 21. 1992

7:15 AM

:': ~le.sed to present you vlth your ~tslt~ edition. individually .. ~:e~ed Pre·Conveotlon Teaa lapel pIn.

~.d :hoUih tt c&n't possibly ••~ure up to the debt of t~ I ove you.

;>1n represants tva very i«port&nt tbin(S.

Pirst, it recornize. you for st&ndins v1th .. early &nd invest1ne your ~.::~ l~ our coa=on cause &nd value.. Believe De when I tell you, the poyer

:: jour conviction strenrthened and belped sustain., own faith and beliefs in

'-e !ace of seeeti... (reat adversity these p&st sonths.

~.,d second, it's ,ivan 1n recomition of the ltGerous fin.ncial support y:~ ;>rovided ay pre·convanUon CLapaim. CoAtribuUOAa 11Jta yours tnfused e~r e!fort vith the crit1cal ra.ources va n..ced to caapaim hard throUCh

:"". and aarly July. Tou aade--it possible for .. to c_icate our " ..aa-

:! chance rtcbt up to the ao-.nt Al Gore &nd I j01ned bands tn Mev York City

L-,d officially launched our flIDaral alecUon c.L&paipl. 4ll.d Ybat a lalUleb 1t

------v-&5-1

Ther.'. no douht 111 .., .104. va vould not haft aeb1•.....a the .uccesses ve ~av •• vithout the coaait-.nt and early support of Pre·CoDvention rea. ..-bers

:tite you.

ve vauld not have ret1red our pra'conventioc caapa1c= dabt. Ve ¥Ould not

':e t!lts far &.head ill the publ1c opinton polls. .ud loss Perot's backers would

"et be co«1111 our va,. 111 droY&l the vay they have in rKent day••

But va c.an' t rest euy OIl the p1ns va'va aade. Tou knov ho... volatne

electtons are thase daya and )'Ou knov exactl,. Ybat kiDd of bue. runer

tactics ve c:&Zl a:cpact trOll our Oppol1t10ll " especially nov, when they'u

l:'U.llI1ins s can4.

You pla,. • p1V'Otu role iD our pre·convettoc caapa1c=. Nov, I'.

asitins you to ..u &II even b1aer c.oDtr1buUoc es va 80Ve forward.

This year .,. l1aply e&!l't Afford to allov Georp Jua.b IJld his c.yaic.al

ere., of nepU.. eupa1c= ~u to let tn our vay. Too web t. at ,tu... :00 web n..a. to be dODe to rupatr the the Iu&h 'restdancy has

tnfl1cted OD tht. cOUAtry.

And all 1nd1c.aUODa 'llQUt va C&.ll upoec.t the vont frOll tb.. aDd tben

so... c.orp au.1l Il.u no rKord to run OD &DC 110 pw for AMr1c..a'. future. ~. loy roed 1. tile only road b. c:&Zl tw.

(Nut pqw plea..)

Page 85, 12/27/94
.

Attachment 1 Paqe--7n: 1';

"~ S&m~la A. Saapla ...._5t 21, 1992

;&4t tvo

Ee can't dafend rollin( up the ~iilest budltt d.flcit, and cational debt • '~eriean history••• or breaking his prom:se on tax••••• or l=-ersinr blaself - .:rld affairs vhile Americans lost jobs ~d their hope for the future here

a' ~c=e.

O~r recer.! De=oeratic Presidential No.i~ees learned the lassons of

.'::!e Eorton" and the RepublicL~ attack apparatus the hard vay. Vell. it

.;": happen this ti:e around .. not if you'll help ae nov.

:~at's why I'm askln( you and all your fello.., Pre·Convention T..- aembers

': ass 1st the eamp.im ln develop ins a hieh-tech rapid response and counter

-&::1ca1 operations capability. And one of the key. to this critical campaim

.-:t1atlve 1s fully fundinr the CLlNTON/GOU COKPLIA!ICI PUMIl. That's where ve '~~d your help the aost.

Your donatlon vill help pay for skilled electlon lawyers to defend

a;air.st the nuisance taetles, borus lelal chellenees, and baseless alle,atlons .~-~e coma to expect frol the other sida. And they'll need the co_puter povar

·ecessary to put hura voluaes of key inforaAtlOQ at thelr f1nrlrtlps to f11ht

:aCK vlth the facts, fast, before any d""l ls done.

---- - ---But-ve-lDUst-act _quiekly-,- '_'lie wst be re.dy soon b4!caus. ve kno.., Bush,

:~ayle, and the rest of thea vln be eOllrl(-out-of -thelr-convention on _the _

& : tac.k..

Just reme.ber, Gear.. lush has stated he'll -do vhat.ver it takes to

;rin." And, I thlnk, thls 15 one tl.. when ve c:en talta bl. at his vord.

Please act today and ,lve as aenerously as you can. Ve bav. no tlml to

.ose if ve're truly serlous about v1nninr on tbe third of Noveabe~•

Bll1 Clinton

?S. In additiOD to it. keepsake value, your Pre·Conventlon t ... lapel pin

and individual pin nuaber will serve as a special eredential and secu~1ty pass

:0 a .. tubers only·· 1n.aucural victory celebratlon nut January in

'ashinlton.

b4!for. !! calebrate! '!! ~I And so, Mr. Suple, belp us shut dow ~h. Republican ·attack apparatus· by supportinc our rap1d response capability.

Ple&3e, fill out the enclosed Action Meao and &ail it back vlth your ,enerous

contribution to the C1.lllT'OM/GOU COKl'L.UHCI FUND. Thanbl

Page 86, 12/27/94
'.-;-',:'

Att3c!':len!: :l

Page 8 nf 14

. - J,Il: 5""""" - J .. '\p" «•• '~I..S "2201

\ .,

c== CLI:"'T()~ PRE..(:()?\i\TNTI()N IT:\~t

ENCLOSED: Official 1992 .

'_~ Nomination Acceptance Photograph

:< :.S6-:0

:..a.:: po....;..c'tl III ,.,.,.,

''I ~,_",11"

~. ..:J,

,.... .:.:. ~:~c::

.' I·,

Page.87, 12/27/94

..

I

\
c..:

...-----

,en-... jir

Ait.acnme:-.t. 1

Page 9 of 14

-

E

• --~ --,--------=

8 llS

S~lli U~;Ii!

i~t~3

@,

i \

page 88, 12/27/94
AttAc:!'1t1ent 1

PaCle 10 0: I.:

H:\I'll ) H.I.~I \ "'I .\\ .III.. )\. \ II \ It )

_., C' =:;1 ~\nton

':::.~.:cntGore Compitam:e Fund

. ~: ""est 3rd Street

r ::J. Box 58C2

;:-:reRock.AR i :231

From: "r. Sa.ple A. Sample

123 A:r1y Strut

Anytown , US 00000-0000

:~ Yes, Bill, we must ~e iullv prepared'

! agree George Bush and Dan Quayle have nothing to tun on and. because of thIS, we an expeCt more

";i,:tlhe Horton" sryie arucks thu year-and much worse.

i :-:a ve :"I.l5hed mv pe~nal check made out to the special CLl~iONIGORE COMPLl.~~CE Ft;~ D

,~. :~e amount oi:

[ ] S25 [ J SSO [ I SlOO [ ) S 250 [ J Other $ _

.. Page 89, )2/27/94
-.-,

Attachl:ent 1

Page 11 of 14

T:~e Federal Election Commission requires the following information; ~a~ _

HelM Addre!a: _

O:;c~atlon:-------------~-------- _

f:rue make your penonal check out to the ClintotV'Gore Compliance Fund. Corporate conmbunON

,m ~rohlblted by law. Political conmbutions are not tax deductIble.

Page 90, 12/27/94

....
'f)

A~..ad1me::t 1

P!I<!e 12 c:f 14

BILL CLl~TON

A~t 28. 1992

.- Sa:ple A. Sanple

". My Street ~- 'f ::,.-~ t US 00000 . 0000

:.,: ~r. Saaple,

: hope you'll find a very pro.in~t place lD yoar ho.. to display your

?:.·cenventlon i ... Offlclal Noalnatlon Acceptance 'betOlTaph. Soaeplace

.~.:e all your faal1y, frlends. and nel(bbor. can sea It.

~veryone you knOY sbould recornize, just &I I do, the crltleal role

i:~'ve played In our caspeirn.

'e literally Youldn't ba vbere ve are today Y1tbout tba support and

!~n&.·,,1al bacl:1nc that you and your fllloy Pra-Col!vantlon 'feu _bars have

i~·..en us.

Contributions 11ke yours to ay pre-CCftventlon eaapa!1D lnfused our effort

,,~:1I the cr1tlt&l resourc:es W lieeded to caapallD bard tbroqll JWIe and early

~~:y. You aade it posslble for .. to c~lcate our ....... of c:hanae richt

.------";iI'O· "tile =-tAl-Gore- &lld.-I.Jolned_hands_lnMltY_ T~r1_CltLaad offlc:1ally

launched our Ctfteral eleetlon c:upalrn. And ¥hat a 1a=eb it viil- -----

There's DO doubt 11'1 ay aimS, we would DOt have acbieveQ the SlIc:c:eSSes we

~a'Je without the c:oU1 t-.nt and early SlIilport of he·CODventlO1l 'feu a..bers

11k.e you.

lie vould not have retlred our pre·torlvenUOII c:upa11D debt. Ve YOuld not

be thiS far &bud 111 tbe pvblle op1ll101l polls. AU lou Perot's bacl:ers YOuld

not be c:oalnc our vay 11'1 droyu the vay !My have 1ll reeent days.

!lit our york 1. far boa over. There are leu tllu 100 days to 10. and

thoqh ve're lIA&1l11 ,r-t proar-u and oar _t1I8 1. bu.11dll11, it's no u .. to let up. tIN tDoY Isov "latUe elec:t1Ola are tllese days and you knov

exactly vhat Ir.1Dd of base, rutter tac:tles ve can expeet froe our oppoaltlon

espec:1ally _, vtIea they're ruJlIllac .cared.

Tou played a plvotal role 111 our pre,coDvanUon c:upalrn. Nov, I'a

ukiac you to u.i:a an eve U,...r contrlbutlon as ve eave forvud.

Ve s1aply ~'t afford to alloy Georre lush aDd hl. cynlea1 crew of

Ill.ative caapalcn Ull"ru to pt 1:1 our "y. Too web 11 at Ita1:e. Too wc:h

Ileeds to be dOllC to repalr the duqt the lush pruldellC:Y b.u lnflic:ted 01'1

this cOUlltr,.

And all 1ndlc:atlons S\IIZtIt ". c:&II u~ct the vont frOll tbea uc! tben

so... Georl't Juab bas 00 r-ec::ord to NIl 011 ucI 00 p1&ll for AMrlca'l fu tUrt.

The lov road 1. the 0II1y road be caA tab.

(liat pap pleue)

Page 91, 12/27/94
""'--

•

Attacment 1

Page 13 of 14

~r. Suple A. Saaple &-r~.H 28. 1991

hIe tvo

He can't defODd rolliur up the billest budret deficit. aDd national debt .- A:erican history •••or braakJna his proalse on taxes••• or lmaersiac hiaselt

.orld affairs vbile Aaerieacs lost jobs and their hope for the future h.re ~~ 1':o=e.

Our rec~~t o..ocratlc Presidential Noaia••s learned the lessons of

·':111e Bortoc" and the lepubli~ attack a~P4ratus the hard vay. VeIl, it y:~'t happen this tiaa around Dct 1f you'll h.lp .. nov.

'Tha t's vhy I'. ukiac you and all your fellov Pr.·CoDYUtioc Te...ubers

:0 a3sfst our cupa1,n le deYelopiur a h1rb·t~, rapid response and COUDter·

:ac:lcal operations e&P4bl1ity. ADd on. of the keys to this critical cupa1m

: r: 1: 11. t 1v. is fully f\lZldiur the CLINTOH/GOU COM!L.I..UICZ rtIRD. Tha t's vh.re ve ~eed your help the ~.t.

Your donat1on viII hclp PAY for skilled eleetloe lawyer. to d.fend

.(air.st the nuisanc. taeties, b¢rus l.p.l e.h&llequ. and buel.,. all.ptlons •• 've co•• to a%PCct frca the other sld.. And they'll need the eo.put.r povtr

necessary to put bur- voluaas of key InforaatioD at thelr tina.rtips, 10 that

"01. c.an f1lht back vith the facts. fut, before any daaace 1a dODe.

But on aust act q1ililly;- because-ve tnoY~.Q\layle. aDd the rest of

thea vill be co.iur out of their eoftventlOD CD the at-faa.--

Just r....bar. Georre lusb has stated bc'll "do vhatevar It tak.s to

Yin. - And I think this 1s one ti.. vben v. can taka hl. at hl. "ord.

Pleu. act today, and ,l'Ie u .enerously as you cu. Ve have DO tl" to

lon 1f V. 're truly serious ab¢ut YIlU1iftC on the third of Ho.uber.

Varaest ~rd••

~~Bill Cl1lltoCl

P.S. If r~ent bi.tory bu taucbt WI &tIyth1ur, It's that va INSt be prepared

for our oppocit1CD·. UDlcrupulOWl tacties.

ADd ao. Mr. Supl., balp WI shut doVll the I.epubl1cu -attaek apparatus"

by supportlq oW' rapld rupoase e&~bll1ty. Pl.... fill out the enclosed

Actloll K.-o and ..i1 1t baek II1th your ,.neroWl contributIon to the

CUN'rON/GOU COKP~ PUMIl. Th&ni..s I

Page 92, 12/27/94
Attadmeil

t1

Page 14 of 14

1

/

E

':::l

•

""

::t

"""

l

:t

-;.:::- '=

.~ ...... Q --~-

c~

~~~:=t') - :t "-

~"

t!~ ! ·S

L. l~

~~ ~~J ~~

~~ ~:s~ ~.~

Q

("l

V)~ s
co

....

II ,

:·li ,- of-" , oj 1 j. , U

'f, .\, \, .. h

)-

..

..

)-

n

'":I

..

..

..

.

...

...

...

" •

c: ... n

... •.,. •n

.: = ..

... J

• • .n ' ,. c: ...

• • ...... " .: =..

..

:. CI n

• :r ... " . ..• • n..

..

~ttn

... ·,. ... ..·....

"

... ... ... .. '

co

co.

.., ceo

• ... rc ..........................

.... 0 0 0 _ lIO 'liD ..

.........................

tD to '" lIIO .., IV 'fo,J W

... ... ......

·... ... ...

......

...... ... , ...... " ... U"UlU'''

""lC flO \C \C

... ...

......... Ie 110 "'" ""

VI '" \I' \10 • •••

.... .. ... .. .... ....

_ _ OlD

.... "'" 0 • ""'..... oG U'

"'" w ...J N ..

....... '"

.. CO ... .. '" ... ...

,.. 0 0 _ ....

o tool "'" 0 0 ........................ , ... N ..., i0oi - ..,. \,PI _ _

...... , .................. ..c 04) 04) OlD OlD

... ...

o 0 C 0

GO- cr- "" ....... , , ..... I'.,l ""'

..... N 0'> \J'l C

" .............. , \Co "" ...

"" ""... ""...

...

'"

'"

-

"-

..

,.'"

CO

co

..

"-

... , ...

"-

..

'"

.'

'f

,

>

·'" J .. J

J ...

J '" J ..

•

J

•

J

I

\ )

,

t

1 I 1

I

Page 94, 12/27/94
A:I'OCH"fNT 13

lU7S8 Q4Il9J93

104ll Q4Il4l93

7340 1O/2l,t92

l2l3S 03,/3J,.I93

l2037 ~3

4f1J7 09J24,t92

~.In:.

10250 UI3:lI92 $34,768.00 P"jllB1t flx IIIissin; c:Ila

12,500.00 flx "lriP"'1t

rot t1!t:IJIn!d

2,3&1.00 flx lest ernphr

lO,l22.00 Pf11lB'lt flx eqrlpwnt

rot~

1,3).00 flx lcst eqripnn

3,450.00 flx eqrlP""lt

rot teb.lm!!d

3,296.00 Pf11lB'lt flx eqDP""lt

rot retum!d

--~__~--~Q:m 8;lJj~ J.2l41_ 2,529.61 p!¥!!1t flx lest AJrlpmtt

$70,295..61

Page 95. 12/27/94

...
c

,--.

,

! •......,

c.

- ,.;

COMPtJ1'E.R SYSTEMS U'IUJZATION

CLINTON fOR PRESIDENT COMMl'l'"IEE. CUN'TON/GORE 92

AUiJJSt. 1991-9ctpber 1291

u;uipJDeDt: 386 PC nmNna 8 devices

'\"e.ndor: Malone &. Coropany

Fu.nctioDS Performed: Ran office peckage includin& ward pta crssina and ~"..lin.g; ran

political ckta base. Maintained conm"butor information. Suppc:coed -.ifafl8.

November 1291-May 1992

Equipment: Unix CCI 6(32 runnin& up to 128 devices, 80 use:s.

""endor: Malme &. Company

FWldioas Pu1onDed: Cclatimxd to run office pacbp indudin& ward pre :essin, and

scheduling IS wen IS runnina politic;ll1 data base. Suppcnina 40 work IIaIicns an the nctWcrk. ---- Suppott.eds;affg{49_~Jhc end ofNove:mber which had p:nm. CD 173 by the end ofMay. By

the end ofMay, fortyc:ore staffiiiii appt' 'N jflwely-1OOavxitiary-staff-peaple-WC3-working OIL

delegate n:laticas. 1be QCIIlipU"I:r sysum provided tamina1s for 20" Of dle core staft Mailings

and calls to each de1epte after each sure pdmary were ne ry and CUii1f"''1erized cnckiDa was

mAintained.

General QCIIxesp.edence bad IfOW11 to 1600 letters perweek by the enCI OfMay

and doubled again in June. Govemor Cinton felt it was c:riIical that mt:ry letter be answered.

and in a timely manner. This. CCIIItinual powing lead of conespondence patly axed die

proc es;sing power ofthe CCI 6{32 and iss software.

The overall capecity ofthe CCI 6(32 syscem was physically limited to 128 devices (te:nn.iNJs,

printea. mode'!IS, etC.). Ofthat number ."" IS 4nka could be operated s:imultaneously

without exper:icncibs CX)fljp"lter problems lOCh as tem1ina1lackxNts, system cnsbes, proc:e.ssing

delays of up to 30 minUtlS or JDClft, etc. Backups nqaited manual inwYerlticIl and took up to a

full week to cempl=. 'They were ob&olete before they were C<'JI'IlP'eted A IUI'lDIW'Y ofthe

devices suppcated by the CO 6(32 at various times during UUs time flame is IS follows:

Month Irzrnjn,ls Modems Printers Iegl Devices

Dec:ember, 1991 36 3 10 49

January,l992 S2 3 12 67

February and March, 1992 64 S 14 83

Apri!.I992 88 7 18 113

May, 1992 91 9 18 11'

Service was required on a recurring basis due to system failures. (Copies ofsample service

requirements are attaehed.)

Page 96, 12/27/94
, ,......

Attadillent 4

Page nf 3

.l"be ever-growing youna suff was familiar with the 005 werking environment and needed to be

able to use Novell. Extensive uppades to both the ha.rdwvc and sofcwve were aoin& to be

necessary to~tethe user needs. Quotes were taken reprdina the nee 'ry aPIfIdes to

the existina sysrem wber'e it was detennined that a new system would ...".Uy east less.

(upgrades were projected to CC5t in ex~ of $400.000 and the result wcu.ld have been less

des1l'llble than an entirely DeW system.) SeVeral c:onsultanr:s were involved in the decision

proees:s and all agreed that the new system was the only se:rlSl.Ole ahemative.

Mn 30 1992-pmsmt

E.quipmalt: DRS 6000, 386 pc's and netWorks.. DRS 6000 was ariginalJ:y to

accoroodate 1.50 simultanetlOS users. Additional computer c:aDpC4<Ws were edded durina the

General Election to ultimaWy take the capacity to 300 1*U.

"·endon: la.. Inc.-hardware and 1Oftware, Malone & Compe.ny-ba.rdware and consultina.

future Now and Complete Computina-pezsana1 c:ornputel:S and software.

F UDCtiODS Performed: Cclnrinued to nut office package inc:ludina word prCi : ing and

sehedulin& IS well as nuUiini political data base for bI.1ance ofPrimaly and during General

Election.

System .:.cpans:icn in May, 1992 • cc:xu dated addiriMal user needs of

tnCking delepes for the Democ:ratic Convention, allowina the de1epte operation to interface

using • ~NOYeU ~ark~e for use in New Yark durin& the Ccinve:micla.

. UU_

n

n This ~uipmeD1 (w:,f"DJ"1 systCm) was iilStalleCm-tbe(;ia""e~-(Thenn __--

Committee had ouqrown irs old iJ*::e and made the ftIQYe the the new sp.ce effective June I,

1992.) Installing the new eqaiproeut in the old buildins and IDOYin& itto the Gezeae Building in

just a few days WOI11d DOt have beal< CClSl effective ex se:rlSl."ble CClNiiderina1he tempO of . c:amt-ign operations. A taupcnry system was nee J S ry due to the C iliwinee's waent

c:ornputer needs as indic:aud by the chart above. The pamanentsystem was instaJled lessthan

one roortth later.

The DeW syscem reqaired a new netWOrking system and exteZlSive rewiring. (l-K

Electric provided the wirina.)

The ClImpaip political office peclcage and CUIespobdence records were

immediately transferred to the DeW temporary system. They were then transfemd to the

pentWlem syswn uporl its final j,m:caJ)ltion. Every effort was made to socx fully make the

tnnsfer with the minimmn 01 disnIpc:ion to daily stAffactivities.

Primary ~dswere maintained and functions performed through the

Convention I.fw which tbe Getleral Election began. Primary political records and other

infcmnation were used in the General Elec:tion.. This equipment was sold to the Clin1onIGore '92

Committee effective af't.er the Convention.

CW>.ton for President rec:otds previously maintained by Public Office Ccrporation

as well as detailed tral'lSaCtion files fn:Jm World Wide travel were tranSf=red to the 10..

equipment as pirt ofthe winddown operation. Amendments required by FEe audi10rs related to

press and Secret Service reimbursements &SWell as c:ontinuina data to respond to audit questions

and make quanerly FEe filings have been maintained.

A.c:counrinI records to include vendor information and cash disbwsements have

been mAintaincd by the Canmittee on in-house 386 compute~

Page 97, 12/27/94
Att:ac!Rmt 4

page 3 of 3

n.r.a he ry fot prepuation of amendments hi: C • ry to debtschedules

originally by POe coverinJ incepcion through March. 1993 has been reconstructed bv

:he Comnuttec.. Amended repocu we:e pre~ and filed. '

Many of the Pes and printers were sold to Transition. staff and others at the end

of the General Elec:tion..

December 1991-P.......nt

I.quipmeD1: N/A due to service bareau nature of services

Vendor: Public Office Catpontion (POe)

\

functioDS Performed: Public: Office ~on provided dataycocessinS se:Mces far Cinton

for President in the area of produc:ins required cc:mtribution recucds and related matching fands

submissions. They also maintained iDbmation 01\ cash distut..nents and prep.red the FEe

monthly compliance reports for the periods December. 1991 throup March. 1993. Durin& lale

1992 and early 1993, the Omminee bepn the difficult task ofmovin& the POe mainIaiDed data

to Committee CXJCUpatas in Arlau AS POe bas continued to provide minimalsetYic:es as __ that lime. A1r un:,POe.slilI 'o"!'inrains certain duplicate.reeccds and U1.... lSW-er~s

que:st:ll:mSmativetothe onaoma~ It 1Sann~redthat c:ampleaan ofthe cumnt

phase ofthe FEe audit all ieCXAds in c'QSU)dy of POC-WiIIliemovedtoArbnsu-and---·

the relationship temUMted ether dum on an advisory bIsis as De' c1ed dming the duration ofthe

audit period. . t· .

POe provided no set'Yices to ClintcnIGore '92 arthe ft1ated Compliance

Committee.

July 16 1992=Pment

CllDtoD/Gon 'J2 Committee:: All*""""'1Jttin& related computerseMca were perfoaned inhouse on DetWOrbd PCs. All FEe campliance tepotts were prepared intemally by the

Committee from informarion pnerated em the ac:couruing department eamputers.

Vendors: Future Now, Inc.. Complete Computing. Great Plains, Kmy for President Committee

CompliaDce COmmitt.... All ac:counting related c:c:rnputerservices were performed in-house on

separate netWOrked Pes. Comp1iance Committee computers were separately networked and

maintained sepuau from the ClinlonIGore '92 Committee accounting computers. All FEe

.:cmplianc:e reports were prepared in1emally by the Committee from infonnation generated on

the Compliance accounti.n& computers and manual re:cords.

Vendors: Complete Computing. Aristotle Software

(last updated July 3. 1994)

Page 98, 12/27/94
t,',

l'l j I,t()IJ/C;ore~ ")2 COlllll.i LLec

rinal Audit ••pQrt

Prdundilnv

--------1--

lIttachment #5

'"ve 1 of 2

VIIDoa COST

A/tbUIIT 'AID

Dr GIIIIAL

CPIIU'I"lU ,

,,/tOUNT DUI

,aoll Till

GINEIAL

COIIIIlTTIl

,,/tOUNT DUE

,aoll Till

CO/t'LIANCI

PUIID

--------------~------------------ ----------- --~--------

EQUlf/tEUT AID 'ACILITIIS

;'

','",

Futur. Mow, Inc.

ruture Mow, Inc .•bipped 1/15

Putu .. 110", Inc .•hlpped 1/1 S

leL , Inc.

I-It eJectr&.(.

Llttl. ~ock Hew.papera

W.F. Kalone

rOLL1~~ AND OIKECT HAIL

G[ •• "ber9-Lake

O-L Convenllon ~urv.y I.

opinlon a •••• reh

o-a Conv.utlQO Pol. ,l 7/1S

0-8 Convenlion 'ole '4 1/16

Slrateqlc Pol1tl~.1 a •• pOD ••

G£NE~AL ELECT lOll HEDIA EXflNSIS

'ocus GCOup6

Han froa I'I0V.

r •• t Il ... p. 5pQt

Ad.in 7/1~ thrulf9tl 0/18

111,676

11,616

S,066

272,460

1','0'

104, I H

11.260

99,106

9,1lS

'1, (sO

S,910

4, S94

6,109

161,271

4,106

18,990

65,418

o

2, .94

15S,On

o

62,505

°

°

°

o

o

°

o

o

o

o

°

60'

100\

100\

60\

50\

60'

50'

50'

100\

50'

100\

100\

100\

50'

100\

100'

2,72'

11,616

2,112

',429

19,904

12,SOO 2

16,6JO

°

49,651

9, JlS

41,125

S,910

4, S9f

6,109

'0,617

.,106

11,990

200,48«

....

<71

"

l"-

N

"

N

r-I

0\

0\

III

0"

III

l1<

(, / !i /) • C r' ;

d

i

l (,: (~ U
ClintiJil/Gore •'J2 Cr,ornitLee

rtnal Audtt laport

______

PrOfUD~iIl9 .1.. _

l\Lli:ldllllcnL II S

'090 2 of 2

A"OUIT , 'AJD

III annAL

VIIOOI COST ICO""l.,.,••

--------------------------------- ----------- j----------

,

A"OUIT DUI

rao" TIIS

aniiAL

COHlUTT&&

A"OUIT DUE

rao" TII&

CO"PI.IAICS

rUID

"lSCILLAIIOU. OlllaAL 11'IIS18

At, AdvaDtavo 7/10/'2 aocoDftv_

Worton acotk.,.

Pr••••••oc1at1oD, IDe.

OTUI~

Blu. ClO ••/Dlua Sbl.14

L~ H.rp.-, oteic.

17,000

76,nO

2,000

15,'00

7,617

SUB-TOTAL I ,

,

I

I

100'

lOot

lOot

15,000

60,.20

2,116

1.24' 1

2, H' 1

. 191,"0 200, ...

(7\

"'-

rN

"'-

N

.-l

o

o

.-l

Q)

0'

to

p.,

LESS:

Str.t09tc 'olltle.l aO.pOD •• - " ••tt, rtl. • 69,660

TOTAL' H', ••0 1]0, '24

I

2

)

•

Unpaid •• 1 •• ta ••

A.o~nt ,_pc •••ate ooe balt July reat.

Acknowl.d~.d by Co••itt••.

Thil ••ouot i. Dot CODI1d.,ed due troa the

I

I

I

I

Co.pHaoc.

.......... ....•.....

fund but 10 non-quallflod.

( ,

t I ( '. /

(

-, I' ;
AK005336

Attachment 6

Page 1 of 2

CLINTON/GORE '92 COMMITTEE

STATEMENT OF NET OUTSTANDING QUALIFIED

CAMPAIGN EXPENSES AT DECEMBER 4, 1992 a/

(AS determined by the Audit Staff as of 6-JO-94)

ASSETS

Cash on Band

Accounts Receivable:

Duplicate Payments

Clinton for president

compliance Fund

Refunds Due at

(6/30/94) e/

Reported Refunds Received

(12/5/92 to 6/30/94)

$ 20,973 b/

$ 43,726 c/

$267,840 ~/

$181,812

$3,028,657

$1,325,865

$3,543,008

$4,943,768

~;.-

Non-qualified Campaign

Expenses Pre 12/5/92

---- .. ----Capital-Assets!.! -------

TOTAL ASSETS

LIABILITIES

$

$

15,934

58,961

Accounts payable:

Clinton for President g/

DSCe WIN '92

payments for Qualified

Campaign Expenses

(12/5/92 to 6/30/93)

Reported A/P @ 6/30/94

$505,027

$ 1,239

$2,091,776

$165,536 $2,763,578

Payments for Wind down Expenses Q/

(12/5/92 to 6/30/94)

Prohibited Contributions (Finding III.A.1)

Payable to U.S. Treasury for Income Earned

(Finding III.D.)

Miscellaneous Reconciling Adjustment

TOTAL LIABILITIES

Net Outstanding Qualified Campaign

Expenses (Deficit)

Page 101, 12/27/94

$2,058,944

$ 112,100

$ 6,646

$ 2,500

$4,943,768

-0-
~I

~/

3.1

!!/

Attachment 6

Page 2 of 2

CLINTON/GORE '92 COMMITTEE

FOOTNOTES TO NOQCE STATEMENT

All figures are rounded to the nearest dollar.

This represents amounts paid twice by the General CO"ittee

to various vendors which have been refunded to the General

Committee ($13,285); and those items still to be resolved

($7,688). An uncollectible amount ($641) has been excluded

from the NOQCE presentation (see Finding III.C.7.).

This figure represents primary related expenses paid by the

General Committee (see Finding III.C.l.).

This amount represents a recivable to reimburse the General

Committee for expenditures that could have been paid by the

Compliance Fund as determined by the Audit staff (see Finding

III.C.12.) .

This amount does not include about $190,000 of media refunds

still under review by the General Committee's media vendor.

---In-addition-,--the-Audi tstaff_ has_m~clEt an allowance for

uncollectible reimbursements from the -secret service -EotalTh9- ------

$108,982. Finally, this amount excludes a receivable due

from the primary Committee ($43,726) shown separately.

Based upon the Commission's determinations, the Audit staff

calculated the value of computers and related equipment

transferred to the General Committee to be $327,559. Under

11 C.F.R. 59003.3(a)(2)(ii), 70\ of computer related

equipment and services may be defrayed by the Compliance

Fund. In addition, 11 C.F.R. 59004.9(d)(1) allows for

capital assets to be depreciated and presented on the NOQCE

at 60\ of its fair market value or cost. Based upon the

above, the Audit staff calculated capital assets to be

$58,961 ($327,559 x 30% x 60\).

Based on the Audit staff's review (see Finding III.C.2.,3.,

4.,5. & 6.l, this amount represents expenses relative to the

general election paid by the Primary Committee and other

amounts due the Primary Committee.

This amount has been considered by the Audit staff in its

calculation of the accounts receivable figure above for

remaining expenses that could have been paid by the

Compliance Fund (see Finding III.C.12.).

Page 102, 12/27/94
'92 GOIloAol a-.tt. IlI'D\Ot1Im 17

Bc:I>oclUA at _ _. Iloop<:r-. to INI Page 1 of 5

Ct"MtlOlI bj: .NlII ....1-94 lMst -uod: ....1-94

GlIID:~

~tlI:D

---- Dot<o

- -.u

N:J:Dm DItAo

_. - _ 0IItA> lloop:ne Qlec:k • Qlec:k IWJ. CVlI I!{ a-.ta

'Ill> tho INI Ilou. C1eond (aalool OltAgory

1-"_ CHI< ~-'J2 1(9) ~... <bod< a-Ad ;I"h»l-'J2 $252.88 - $252.88 __ providod

2 W1.lJooo llrotho.. rM:ll 2~'''Jq-92 21.l5 $lOO.OO chod< not-Jod 1270 _-9) $)00.00 t6J .t. lu 1Illt.1W d* (:!...[_1

)_bj.Jod ClOt l5-I'flb.JJl 10877 ~.OO _...- I.lll64 $511.00 rt:J 0CIp!f ot dlk, hal!ln'l cl..r.d

4 Motu- J. O'N011 POlL 1l-ltJq-92 1060 $1,10).79 _.- 4105 O~) $1,103.79 I*> a. 'x.w ..... 'If/III~ PM. 1~2 1337 $1,!Il4.t6 chod<.- tl66 1'l-N:>-93 $I,~.t6 N:;) dlk ~, In .11I~.. 0\

6 Ilirston DIn"!>' P<IIL ~2 1907 $91UI chod<'- 4784 06-000-93 $913.91 I*> a. rx.w

"-

r7 ClIt'oI L. _ltoo PM. 1~-'J2 2!lO7 $1,111.)1 _...- 4713 O~) $I,llle.l1 I*> a. rx.w N

"-

I ~. It. L>tft P<IIL 1~.()<;t,-IJ2 257' $346.90 _.- )J44 09-'bY-'J2 $346.90 c::Nt~. no au.:. N

9 ,. _""" 1'Ia<l. OHbY-92 lOO $317.61 _.- 4806 U-.lIn-94 $)17.61 I*> dlk rx.w .... 10 Jchl J. 'l\l<Ihoy PDQ. 02~2 )2J) $1,057.29 _...- 47'9 ~) $1,0'7.29 I*> a. aw

11 N>tgo,tl L. Mpor.'-"lll I'M. ()t"OH-92 lI46 $30..,6 _.- 4762 09-'bY-'J) $lOt.!6 I*> a. rx.w .

M

12 I'l1clalI<t H. l"'J 1'Ia<l. n·...,.-92 )93' $!14.0II _ ..Uluod 4fOO 1.!Hlo<>-9) $514.08 ,., d •. rx.w 0

$542.22 .... U "" J. 110IJion MO. 11.()00-92 045 $542.22 _...- 4107 ~) I*> a. rx.w

14 _ C. WlI"" I'i1<L 1!>-JM>-9l 019 $1ll.15 <:hod<.- 439) 1&-l'oi>-'J) $)Il,I' $1,560.34 N:> dltl a::A'. no 8t.I!lt.• Cll

0'

l! .lKW{ "'"' - (OW 2~2 4lI7!lo $200.00 0lIZ VllIII2l $200.00 rb dlk OW; 00 \lWd.>r etIIt. '"

16 I.I1.U>:>I.a 11011 CHl< :u""-11-92 10118 $2,700.00 aa VllIII2l; VOrr:b. !lot·dIk lG-I4-93 $2,700.00 ttl ctIk a::pJ: no ...me Ita

17 lILU !Jlooawl <If'< a"hq-92 Uti! $400.00 ClllZ VllIII2l $400.00 ,., all rx.w: lID _r lItlIl:

11 _lltIu..., '"" 1~2 lm $2.llOO.00 aa VllIII2l $2,000.00 ,., dlk rx.w: lID _r lItlIl:

19 bl.d'1Il VIrltUleol, IJY:. <.lU< 11-l<Jq-92 1745 $2 ,000 •00 0lIll VllIII2l $2,000.00 lIJ d* OJP/: M wn::br Ita

20 W.tnoi. 0011 CH'.I< 2~2 Zl5I S'.1IO.00 aa \OIIII); _r!lot 01k S',lIO.oo 1t) cNt ccpf; no .....wr IItJIt

n_llur '"" a1-64lp-92 2639 $160.00 0trB \QI1II) $UO.OO M> (;bk <X'I'Y: no lIWdJe sUIt

22 _llo&r '"" OI~2 :1640 $'45.00 0lIll \QI1II) $945.00 lib dlI< rx.w: lID _r _

n_llur cnl< OI-50p-92 2I64l $410.00 QIIZ \QI1II) $4eO.OO lib dlI< rx.w; lID _r _

24 Cl>U- It£artl./ <l-U< 04J'"..,-92 1927 $!60.00 QIIZ IlQIIID $560.00 It> dlI< aw; lID _. _

25 IIuy COrvant.oll

'"'" l)9.J'"..,-92 l206 $l2O.00 QIIZ IlQIIID $120.00 ,., dlk rx.w: lID _r lItlIl:

26 Tllylo. IW1Ul <I'U' 1(H;0p-92 »17 $76.56 aa_ $76.56 It> c:hk CIl::lLV: no ~r .DC:

27 ....ri ,",I.". (l'l1' 1&~2 4286 $220.00 om:_ $220.00 Ii> dIk rx.w; lID _r.tx

21 Iblldoy 1m ""3' ~)-~~ 471.9 $1.I:'lI>.EO om: IlOIlUl $1,1196.60 tb chk cqJJ; no Ylh:bc stat.

$.' ". I; .;, C (j ,I (, ~; I)
1\\ ' .C'

n

a~<o '92 ....,.,el a:-ittAao Xl'l7£IMNr 11

S<:ho<1U. of ~tAld OlOdls AttAI, IWaponoo to lNI Page 2 of 5

Qw.~ l7f: NlIl 8-2-94 Wit lWYtMd: 8-;1-94

QlJD: ~1'lNI'

Chod! a.:I< a.:I< DlJpooiU"" ...IlIa»d ..._ !lot.

Poyw Hrl:U1r Date ~, - 1'." QIt,o Iloop:lnIo l:hotk

,

• Chodt Chodt liUU -CVlI It{ u-.u

'Ib tho INl ! Data a.nd 1at.llU1 Ootoopl)'

29 Jo,.... Ilon ,., <Jml 2l-Gop-1J2 4815 $200.00 0IDl \\lIDIl -$200.00 lb dlk avt: no WRbr .t:JIt.

30 Swrtm a.rlJ.njtm "''121 2&-~2 !>311 $2,3!lO.04 0IDl \\lIDIl $2,3!lO.04 lb dlk cqJy; 00 wmr titlr.

11 .l<hl Itnt"" G'U< 16-<Jct-92 6a69 $250.00 0IDl \\lIDIl $250.00 pt) dlk c:opJ: 00 YW¥br stDt:

32 .led< Itu<0'/ <.I'D! IF...-<r.t.-92 6914 $240.00 0IDl \\lIDIl $240.00 d1k c:opy: no ywwr lit-.

33 Prt... ~rvicw; urJ <XU< il-<r.t.-92 8!>33 $911.08 0flJl \OIlED $911.08 lb chk c:cpj: no YWXbr sbIt ... 34 Jdn ~roe el'l" 31--.Q;t·-92 a518 $250.00 0lIE \OIlED $250,00 fob chk <::q:y: ro vwr:.tJr stlt C7'I

35 HltriCWl 1l\tQmatHnd CI'l1< lSo-.rtN-9~ 9111 $248.18 0IDl \QlIEll $248.18 ('l) chk cop.{: no YlR,br abrt

'-

rl6 w:>rtl.., Not' I Ildnl< CI'I11 2HtN-92 9TI2 $2.08 0lIE 1.0= $2.08 f'l) d\k ow: 00 \o'WWr stilt N

'- J7 Mhl,,! kl<mt\ r.ft>l ;o."N-92 9912 $165.00 0lIE IotIJDV $165.00 lb cbk cxw: no WIRi::1r ISbIt. N

}.fS~IUf .." QI·~2 1461 $50.00 0IDl IotIJDV $50.00 tb chk CXlpf: 1.:1 \oWd:)( sat. .... )9 SUw Buf I"" ()1-~Jj2 1462 $150.00 0lIE 1.OIlEl> $150.00 ri.l chi< CX0"; r¥'.l vwwr stili..

40 r.-JIlI VUfrH/ '-11' 1~""IJi2 In' $150.00 am: I.OIUD $150.00 chk cq:y; m \W~r II~ ... 41 Jad<. t'\lH11'1 .." 1~,..{.x:t....g2 44211 $15.00 0IDl I.OIUIl $'15.00 R> dlk capJ; l'l(:, ~I _tilt. 0

-42 NrtlW'I.'I PI I b .. 545 $621.32 ~21.12

.... "fl1. 14 "''1Ji2 CMl'E \lUU11l tb ctlk ~; OICI ~r stJllt

U t'lItlyn t'tJl.lQUT/ 11111 If....o ,'nu~ 11"i<Jp-92 1497 $la1.!>3 OIDlW= $18'/.51 dlk tq.¥; III' .,.lCbr nt.JM: Q)

t1'

44 J'9dl K.....H<>ij ('flU, 11..;;"p-92 1156 $1,920,21 0IDl1mJEO $1,920.21 lb chk WW; r¥) ......wr atJllt III

4!) D:n'1a Yo. PattJte....1 PlYL ()J.-!loc.'-92 4106 $101.92 ()llJ; '-OIm) $101.92 $2b,051.18 NJ chk wpy; Ill) \Mtd:lr at#. '"

46 r.ri /W<tU'1 ,....,. 1Ji'.,-1'U1JJ2 1319 $660.00 lAot<o' -.t to Prrt- $660.00 thCfI6Q1VfId

41 st.rJo ..... <.lUl 1'/'-luJJi2 110& $400.00 lAotta< -.t to Prrt- $400.00

_I_

n Bead WlJU' r-<u IHulJi2 lal1 $4.00 lAtta, -.I: to Prrt- $4.00 tonool\.-.i

49 t1Iry ~HJlF.H (..t~ 19--I,uq-42 l!lOS $330.00 LM:tor -.t to Poyw $330,00 lbt_l_

50 ee.tort VVf\oJ·[f.....,.f/bfJ <.ft:l'. 2S,·';ur9'l. :m.& $1,200.00 !.etto, -.I: to Prrt- $1,200.00 ~- 51 "lY C.rv4J'll .... (.:fU ffl'-!Ap-92 32111 $120.00 Lottor _ to I'll)-. $720.00 U\reKQ1.......,

52 1"0<1 Qtt CI'I>'. 11--<;0p-92 3410 $215.00 Lottar _ to Poyw $215.00 lhCeoo1wd

:;] .Aar.ti.I.Il::n 1'1...7.... Iht'11 utJ· 1<-"-"'1>"92 3120 $904.00 !.etta, _ to Poyw $904.00 lbt_l_

.....t.itI H"tol (~U 1"'·!-iep-92 3121 $929.32 lAtta, -.I: to I'll)-. $929.32

_1_

S? Jm,at'h1ln WnJI a111 1')'"-6ep-92 1915 $eO.oo !.etta, _ to I'll)-. $eO.oo Uu_h...:l

56 I1Ittho I'LQ......, ...JI. 1&-liopJi2 U41 $!>3O.oo LoU.., _ to I'll)-. $S30.oo lbt_l_

51 _in V"f>iIo/ "''I'l' 2H i"I>-9J 4""

$300.00 1.0<:__ to Prrt- $300.00 Utr-.o1YIId

ji t, () t,) ,/ \, ... C (j
~~~'

'92 Gonoral ~U- Ja'DIOHJlI' 17

of stal..-llat<ocl <J1odul -.uwv" Attac to IHl Page 3 of 5

a.t44 l7{: NIB 1l-:I-9f Last -...J, 1l-:l-94

-~

<l>od< ChId< ChId< lIUrp>eltla1 :111>-_ 111>-_ !lito

- ..-.oI

I'ol- N:JD:lfr tatAI -.- Porc...~ ChId< • ChId< ChId< lIUll q,s Jl!( 0.0_....

'Ill tllo IHl Dote a-nd lsw.) ClItt1gory

5II_ax* l;HlI lO-llop-92 !lIlI) $),~.oo LKtoor _ to """" - $3,~.00 ll'u:wolwel

59 IlIdA Jm1I (IV. 0l>-0:t-92 60St $200.00 Lotter _ to """" $200.00 lbr-olwel

6OQu:i.o -... (MJ< n·<>::t;-92 141D $10.00 LKttIr MIt to """" $10.00 ll'u:wolwel

61 , ... JQ>loI1{ CIlU< 2J-.<lr;t.-92 76IU $10.00 lMtter _ to $165.00 ,",,-lwei

62 ,... JQ>loI1{ tl'£I< "1h~2 IOt2 $715.00 LKttIr","* to """" $Z'I5.00 lhr-.olwd

63 'llqoa s.r9"l' CIlU< /·/·<>=t-42 ION $lOG.OO LKter","* tD $200.00 lhrNolwel m

... .:JoIIb S11wn-n CII'Dl 30 <lCt-42 IlII6 IU.05 lAttoor _ to IU.05 llll-..olwd

"-

r65 ,... IW1AIl>f au. 1l·<>=t-41 1610 $165.00 IJlttor MIt to $165.00 lhr-ol\-.d N

"-

66 Elle we. 001< 31-=-92 I6U $160.00 Lottor WIt to $160.00 llu-ol_ N

67 Ide III..., em< OHtJ'M/2 0725 $l.Jl6.00 LottAIr "'"'" to $l.Jl6.00 _1_ .... 68Ted~"1 <HJ< "',.·..·"-92 0165 $21.34 IJlttoor _ to $27.)4 _1_

69~Qor. <HJ< I(HlN-'J2 0927 $15.90 Lottor MIt to $15.90 _Ivod II)- 10_~ <Hl' 1HlN-'J2 9066 $UJ.06 Lottor _ to $W,06 lbr_l_ 0

.... 11 I\. <Irn....,ld (fl2< 1Hb'-\U 9090 $451." IJlttor","* to """"" $4511." lllr_lvod

12_ lit...,.., CIU\ IJ.UN-!ll 9m $5.16 14Itttlr -.I; W """"" $5.16 InTMolwel Ql

(7l

11 \IIlIwt:.an-6ll_ lW; " Pat1<.d\lt 2~2 9114 $472.00 lAIttM"'"* to $412.00 lllr-olvod III

14 /lOry 00.- <HI< 02-tloc>'J2 llt19 $5Ol.15 lAIttM IIIIt to $501.15 ,",,-1_ p.,

15_-... <H:J' 1~310322 $44.l.01 Lotter -.I; to """"" $44.l.07 uu.olwel

16 3.Mi<Dol _1O'f, EEq.u roCH]! l<H'ob-'Jl lO459 $9.92 Lotter _ to """" $9.92 lllr-ol_

77 ,... IW1AIl>f lU< 2"hJ.l1-91 lO21 $200.00 __to """" $200.00 uu.olwel

7e ,... "W1ol7{ IU< Qll.-I>uq-92 WlJ $:IS.OO __to $:IS.oo lllr-ol_

19 rnri< "W1ol7{ fU< O~2 1221 $100.00 __to """" $100.00 _1_

10 ,... l'A>1abf

- Qll.-I>uq-92 U22 IU5.00 IJlttM _ to """"" $U5.00 lhrMolYO<!11 ~Ull.:nt ID< OIHu}-92 l..I:16 $U5.00 1AC:tM _ to $U5.00 ll'u:wolYO<!

12 IIo1n Jm1I lU< Ol-60p-92 1454 $175.00 lAtter _ to """"" $115.00 _lwei

IlJ<t>otj... lldnu' 111< Ol~2 1541 $150.00 IAItt.ot _ to """" $150.00 _lvod

14 /lOry 010,-......

- 0!>·&p-92 1m $15.00 Lotter _ to """" i $15.00 ltu-.olwd

15 I'Iory COrvon.... I'U< 00-<lop-92 1710 $25.00 __to """"" $:IS.oo lllr-olwel

16 30hn lbJo 111< 1~2 lOU $I:1S.00 Lotter MIt to """"" $U5.00 _1_

07 stew 8M' l-tJ< 11...-.q-'J2 1069 $US.OO Lotter _ to """"" $U5.00 lbr-olwel

'. " 6 "/ c; \. I t L.. ....... f)
'92 Gohot&l Qalttt.. Ja'I:IOt'fM' 11

at a.:u -.inlng _ Iloopa1oo to u.R Page 4 of 5

Cl"Mtod t¥: mJ ... Lut~: lI-~

<IdIl'~

Olldt 0** 0lM:lc ~tJcrI _111IOI4 _111IOI4 Date

- --..1

....- H:JD.M DatAl -.- Por 0tt.6 IiIIplIlM C!lI<::k • Olodl Olodl 8W.l t\IlI II{ ""'..... 'Il> t),. 1JlIl - C14omod (-.ul ~"-l)'

- 1I.J<rn ..... lUI lI-1uj-'J2 lllG6 IlIlO.OO lAotWr MIlt to ..,.. $100.00 ~1~

a9 Ench 8ctwval. I'D< 1~1 :l1ll2 Il!IO.OO lettAlr MIlt to ..,.. I~.OO Uv.-olWid

110 lCdUor .... 14'"""'1-92 22111 IJ.'O.OO lAtter MIlt to l'ooyM $l!50.00 ....--1-

91 iCdUor .... 1~2 2111 1200.00 IJOtter _ to l'ooyM $200.00 U:u-.olwd

92 Uri< HowlJ.i.n

- 1~t42 2J6O 12!I.OO IJOtter on: to l'ooyM $25.00 ~1_ .... 91 Ede __

""" l1-it..t-42 236a $25.00 IJOttAlr MIlt to PIIyM 12!I.00 U'lr-.olVlld 0\

'-.

94 _Hotor IIDI ~ltqJJl 2411 $1~.00 letter MIlt to PIIyM $17.>.00 \.bt-.01\'lid r95 IIIncy 8o<l1.., IU< 2~1 2!l31 $17.>.00 IJOtter MIlt to ..,.. $17.>.00 uu-lwd N

"

!16 ~rrio Ilc<N:I I'Dl 12-&ip-92 2685 $7.>.00 lM:ter MIlt to PIIyM $7.>.00 ~1_ N

91 !.In:» lUnq It:Il 1+-&Ip.J11 2145 $12!1.oo IJOtter on: to ..,.. $l25.oo ~Iwd ... 98 n"", 1W1ol>{ Al' 1~2 lO28 $l25.OO letter MIlt to ..,.. $l25.OO lhrooolwd

t'J *4' aol<blq 1\1' O>o.--t-'J2 lIll $25.00 lM:tor _ to..,.. $25.00 lbr_h"'CI

100 _rt Sdlif!o, All 12-o.:.t~2 4153 $15.00 Lotter .... \:D ....- $7.>.00 lhrOOObN:f

'"

0

... 101 'r"'" 1Wlol>f I-W l}-o::t~2 4169 $100.00 Lotter MIlt to ..,.. $100.00 lbrooolwd

102 Ou:ia Ja:>r.. .... .......~-91 4911 $l25.oo IMtter MIlt \:D ....- $l25.oo 1)u...1Vllld Q)

0>

103 Ilo.ill CI\I,a I'D1 2,6..-~::et....g-J t91J $125.00 latter _ \:D ....- $125.00 lhc-.olYlld III

104 nIIlk Ig>lob; IU< If.,-~~l t9:lll $l25.oo IMtter MIlt \:D ..,.. $125.00 Utt_lwd P4

lO5l.-~ I'm J()-~~2 51J7 $lIlO.oo latter on: \:D ..,.. $100.00 lhrooolwd

106 rrIIlk 19>1oI'f "'" 11-~~1 = $15.00 IJOtter MIlt to ..,.. $7.>.00 1l1.-1wd

101l.-~ lU 1I-<:rt-92 5149 $7.>.00 MIlt to ..,.. $15.00 _1_

J.Il8 Jill L. Al.prr I'M. 14-&v--92 l27lI $M2.91 latter on: to ....- $942.91 lhrooolwd

109 Jill L. Al.prr I'II<L (~rlbv-!Il 3314 $lOS.'3 t.tt« -*- to l'ooyM $lOS.'3 Ul.-l_

Ul> ....thI..n t1. 1'\.1'.t1 UW'l P'fJU. (~_N-92 3602 121.35 Lotter on: to..,.. $21.35 u...olwd

111 Jottr.,. 9. _I', I'll•• ()(,·ft:N-092 3669 $91. 35 IJOtto< -*- to PIIyM $91.35 _1_

U2 ".tftfl/ S. ~l. I'IRL l-1-rtN-92 3934 $381.6& Lotter _ to PIIyM $381.68 $18,67J.51 \hI:-.olwd

- 1UrAL $SJ.54J.91 $53.543.91 $53,543.91

r: (;.' , , .0 C_! (;
- ------------

1 g

ro i \on _

::> .... ..."

,..~

Page 107, 12/27/94
C1~.. '91_ru

~M<l

'" _t.cl Chorb

_ "', 01/;.. to tho lNl

Ill'DIOt1IJIl' I.

I'lo9o 1 of!

DI~ LIIIt 1loMMd: "l--26-9i

OUtod 1to'1- I

I

Qr:\4, I'NlSlNIIlHDCl I

,

Ilot» OUted: "1--25-94 I

I

I

, a.-Iuu04

0l0CIc 0l0CIc Olodl lllopooit.lal hr Qoto a.-I.uuo<\ a.-INuod 0IIc C1eorod Still

-

tv.I ,

_r IlotAI

- Pw,>oo Iloop to UiIl 0l0CIc1 ! 01k Ilol» (Y CIt WI (stale) '<l"

Q\

1091 10/19.192 $250.00 I:tMrd~1

Iloop to UiIl ____ i " I ,... 1095 10,119.192 250.00 rWJIh tobclol of

Iloop to UiIl ____ , N

" SM'(~ N

lll1 1~~2 :r.;.00 rllltil lMnI.ng Aollp to 1Ml _ oot-. ....

un U/06.m 1.000.00 I<>Clwf ~r

'""'" to 1M ____

119ll U/06,192 100.00 ...mAl_r

Iloop to 1M ____

<X)

1245 11111192 100.00 Dotty Jo l'IIQllot.an Iloop to 1M _ not __ 0

.... 12ii2 11111192 1,000.00 J. a-tar Jd.-J Iloopto IM_ not __

1269 U/11,192 YJ.OO ~JMI.U.[ Iloop to L\Il _ not __ Gl

0-

ms 11/18192 61(,.00 CatJl8r1M lOrd Aollp to 1M _ not __ III

1321 11/23192 200.00 Olarl... Hlynoo ftoop to lNl _ not __ p.,

---- '4btal $3,631.00

C

i (, h,' G,. l) I.

f ..... ~.~ ()
FEDERAL ELECTION COMMISSION

Novew:ber 3, 1994

Robert J. Costa

Assistant St irector

Audit Divis

FROM:

THROUGH: John C. S

Staff Dir ct

Lawrence M. ble~ General coun;el ..V

Kim Bright-C61eman '~ Associate Ge*eral ounsel

-- LorenZOB01.1~waY -h..•'"t:L __ Assistant General Counsel

TO:

Peter G. B1Umber~~ Attorney

Abel Montez MA\'i<r6.~ Attorney {yr"

:..f:

Andre Pined~

Attorney '1OV

SUBJECT: Proposed Final Audit Report on Clinton/Gore '92

Committee and Clinton/Gore '92 General Election

Compliance Fund (LRA t420/AR 194-18)

I. INTRODUCTION

The Office of General Counsel has reviewed the proposed

Final Audit Report on the Clinton/Gore '92 Committee ("the

General Committee") and Clinton/Gore '92 General Election

Compliance Fund ("the GELAC") submitted to this Office on

August 31, 1994. The following memorandum summarizes our

Page 109, 12/27/94
~emorandum to aobeTt J. Costa

Final Audit aeport

Clinton/Gore '92 Comm. and Gen'l Election Compliance Fund

(LRA i 42C/AR 194-18)

Page 2

comments on the proposed report.1/ If you have any questions

concerning our comments, please contact Peter G. Blumberg,

the lead attorney assigned to this audit.

II. ITEMI~TION OF OFFSETS (II.B.3.)~/

The proposed report raises the issue of whether the

General Committee is required to itemize refunds and rebates

made by various entitie. to its travel agent, worldwide

Travel, Inc. (Wworldwid."). The General Committee argues

that it was not required to do so, and cites Advisory Opinion

("AOW) 1983-25 as support for its position. The proposed

report, however, concludes that AO 1983-25 is not relevant,

and further states that AO 1983-25 cannot be extended to

non-media vendors.

In AO 1983-25, the Commission found that a co.-ittee

may report its payments to media consultants as expenditures,

and that payments by media consultants to other persons,

which are then used to purchase services or products used in

connection with the consultants' contract, need not be

separately reported. The Commission noted the following

factors as significant in making this determination: (1) the

consultants had a legal existence that was separate and

-cnst.inct-from -the--co_ittee's_operatj.Qn~;.( 2) the

consultants' principals did not hold any -committee-s~aff-------

positions; (3) the committee vas conducting arms-length

negotiations vith the consultants that resulted in a formal

contract; (4) the consultants vere not required to devote

their wfull efforts W to the contract with the Co.-ittee, and

the consultants expected to have other media contracts with

other committees and business entities during the campaign

period; and (5) the committee had no interest in the

consultants' other contracts.

We disagree with the proposed report's conclusion that

AO 1983-25 is not relevant to itemizations made by Worldwide,

and cannot be extended to non-media vendors. To the

contrary, we believe that AO 1983-25 is relevant to determine

whether the General Committee is required to report refunds

and rebates for travel expenditures. AO 1983-25 contains no

!/ We recommend that the Commission consider this document in

open session since the discussion is not exempt from disclosure

under the Commission's Sunshine Regulations. 11 C.F.R. S 2.4.

Parenthetical references are to the placement of the findings in

the proposed report.

2/ We suggest that you revise the title of this section to

"Itemization of Refunds and Rebates." This is consistent with the

title of the section dealing with the same subject matter in the

proposed Final Audit Report for Clinton for President (the

"primary Committee.")

Page 110, 12/27/94
Memorandum to Robert J. Costa

Final Audit Report

Clinton/Gore '92 Coma. and Gen'l Election Compliance Fund

(LRA t 420/AR 194-18)

Page 3

language limiting its scope solely to media vendors, and AD

1983-25 factors have been applied by the Commission to

determine the legitimacy of a non-media business vendor. See

AD 1994-25. As such, we believe that AD 1983-25 allows the--

General Committee, subject to the above-stated factors, to

=ontract with non-media vendors to perform campaign

activities without requiring the General Committee to itemize

and report vendor payments from third-party sources.

Notwithstanding the applicability of AO 1983-25 to the

General Committee, we note that the General Committee

response states that it satisfied the reporting obligations

of AO 1983-25 without including supporting documentation. We

believe, however, that if such documentation is provided, the

General Committee may be able to satisfy the above-stated

factors.

I I I • APPARENT NON-QUALI FIED CAlU'AIGN EXPENSES (II I.B. 3. )

The proposed report concludes that arguments made by

the General Committee pertaining to the loss of two rental

cars, and lost computer equipment and communication devices,

were unpersuasive, and that General Committee expenditures

for the replacement of these items are non-qualified campaign

--expe-nsell -subject- to-repaymeIl-L 3L_ T1llLproposed report

concludes that the total amount to be repidd-t-o- tne-un!~ed- ---------------- States Treasury for apparent non-qualified campaign expenses

is $78,264. $70,295 of this repayment amount consists of the

above-stated lost equipment.

The General Committee states that it was not

commercially feasible to have purchased insurance to cover

such losses. -Koreover, the General Committee contends that

due to the prohibitive cost of such commercial insurance, its

only alternative was self-insurance. A committee's decision

to purchase or not purchase commercial insurance is a

relevant factor in determining whether a committee made a

"good faith" effort to safeguard its equipment. See

Memorandum to Robert J. Costa, Re: Committee on Arrangements

for the 1992 RepUblican National Convention -- Legal Comments

on proposed Interim Audit Report, at 4-7 (September 17,

1993).i/ Other relevant factors may include a committee's

3/ This equipment includes two lost automobiles from Alamo

Rent-A-Car valued at S34,768, and lost computer and communication

equipment valued at $35,527.

4/ The Interim Audit Report for the Committee on Arrangements

for the 1992 RepUblican National Convention was interpreting

permissible uses for convention expenses. Compare 11 C.F.R.

S 9008.6(a) (permissible use of convention expenses) with

11 C.F.R. S 9002.11(a)(1) (qualified campaign expensesr:-

Page 111, 12/27/94
"" .

"'-.

c

Memorandum to Robert J. Co&ta

rinal Audit Repvrt

Clinton/Gore '92 Comm. and Gen'l Election Compli3nce rund

(LRA*420/AR t94-18)

Page 4

policies and practices promulgated to safeguard campaign

equipment, and the committee's enforcement of such policies.

We recognize the General Committee promulgated policies

to safeguard campaign equipment, including computers,

communication devices, and rental cars. See General

Committee Response, Exhibit 11 ("Loss Prevention Policy," and

policy entitled "Equipment."). The mere existence of such a

policy, hoyever, is not determinative. In this instance, The

General Committee has not not demonstrated that it enforced

these policies. The General Committee provided no evidence

that it Yithheld the last tyO paychecks of the staff persons

responsible for the rental of two lost rental cars, as

required under its "Lost Prevention policy.·~/ Moreover, the

General Committee has failed to prOVide any evidence

indicating what efforts it made to locate the lost computer

equipment and communication deviceo.~/ Therefore, the General

Committee should be required to make a repayment of $70,295

to the united States Treasury for the value of the lost or

missing equipment.

5/ The General Committee states, in part, that because it

believes no committee member engaged in misconduct or gross -rieg~-igen-ce-·it-was- unnecessa ry to execute the _.Commit te.e.'-1>-p.ol i.cy _

of withholding salaries." Nevertheless, the ·Loss Prevention

policy· does not require any finding of misconduct or gross

negligence. See General Committee Response, Exhibit 11.

Furthermore, the General Committee failed to provide any evidence

showing Why the actions taken by the particular staff members

assigned to the rental lost automobiles did not constitute abuse,

misconduct, or gross negligence. See Memorandum to Robert J-.

Costa, Re: Committee on Arrangemen~for the 1992 Republican

National Convention -- Legal Comments on Proposed Interim Audit

Report, at 4-7 (September 17, 1993) (considerations to be examined

include: (1) the value of the lost equipment as a percentage of

the total value of the equipment; (2) whether a committee made a

good faith effort to safeguard its equipment; (3) what efforts, if

any, a committee made to locate the lost equipment; (4) if

applicable, what contractual terms were made between the committee

and its leasing entity; and (5) whether the committee can prove

that no fraud of abuse occurred.).

~I The General Committee states that with respect to the two

lost rental cars, it went to "great lengths" to recover their

losses. For example, Exhibit 11 to the General Committee's

response contains a letter from Alamo Rent-A-Car ("Alamo")

detailing its investigative efforts, as well as an undated and

unsigned memorandum detailing non-Alamo related investigative

efforts. These exhibits show that the General Committee may have

attempted to locate the lost rental cars. Such efforts,

however, must be examined in conjunction with the General

Committee's enforcement of its "Loss Prevention Policy." See

consideration 12, set forth in footnote 45.

Page 112, 12/27/94
MEmorandum to Robert J. Costa

Final Audit Report

Clinton/Gore '92 COmE. and Gen'l Election Compliance Fund

(LRA*420jAR .94-18)

page 5

IV. EXCEEDING EXPENDITURE LIMITATION -- AMOUNT DUE THE

PRIKARY COKKITTEE (III.B.2.)

The finding in the proposed report that the General

Committee exceeded its expenditure limitation by $684,220.

Absent evidence that the General Committee has not exceeded

the expenditure limitation, the report recommends that the

GELAC transfer this amount to the General Committee, but

makes no repayment recommendation. A portion of the amount

subject to the overall expenditure limitation includes an

account payable of $844,913 for expenses that were originally

paid by the primary Committee for setting up a basic campaign

organization for the general election. The report notes that

the primary Committee made expenditures for items such as

computers and polling in the weeks prior to the date of

ineligibility ("DOl") when most or all state primary

elections had been held.7/ The report reasons that

expenditures for certain-goods or services made so late in

V"" the primary campaign could have no other purpose than to be

pre-expenditure report period expenses for the general

election committees. Since these expenses were start-up

costs, they are qualified campaign expenses for the General

Committee, and subject to the overall expenditure limitation.

---Thus,-the expenditu:reres~l.ts_in the General Committee

exceeding its expenditure limitation-~~/

The General Committee urges the application of

essentially a "bright line" test based on the date of a

candidate'S nomination to support its position that the

expenses in question were qualified campaign expenses for the

primary election. The General Committee argues that costs

for goods and services incurred by a primary committee before

DOl and used before 001 are qualified campaign expenses for"

a primary committee. With regard to the expenditures for

equipment and facilities (~, mainframe computers, personal

computers, printers, keyboards, monitors, modems, software),

the General Committee argues that the expenditures were

qualified campaign expenses for the primary election because

the goods were purchased and used before the 001. Thus, the

7/ State primary elections were held through June 9, 1992. The

candidate'S 001 was July 15, 1992.

B/ The Final Au~it Report for the Primary Committee permits the

Primary Committee to collect a reimbursement from the General

Committee for those goods and services paid for by the primary

Committee which were General Committee expenses. The Primary

Committee can also choose to pay the United States Treasury for

these non-qualified expenditures if it chooses not to seek

reimbursement fro~ the General Committee. If the General

Committee does no~ reimburse the Primary Committee, it would not

exceed the expend:ture limit.

Page 113, 12/27/94
"emorandum to Robert J. Costa

Final Audit neport

Clinton/Gore '92 Camm. and Gen'l Election Compliance Fund

(LRA , 420/AR 194-18)

Page 6

General Committee contends that as a primary asset, the

Primary Committee was permitted to .ell the equipment to the

General Committee at a 40\ depreciation, the required price

pursuant to 11 C.F.R. S 9034.5.

With regard to the polling expenditures, the General

Committee argues that the expenditures were qualified

campaign expenses for the primary Committee because the polls

were conducted prior to the DOI and concerned issues related

to the seeking of the nomination. In addition, the General

Committee contends that the polls had a limited shelf life

which had expired by the time the general election campaign

began. The General Committee asserts that the Commission has

acknowledged the limited shelf life of polls in its own

regulations. See 11 C.r.R. S 106.4(g).

We believe that the standard advocated by the General

Committee would enable a primary committee to use private

contributions and public matching funds to pay a portion of

the general election campaign expenses, thus circumventing

the general election expenditure limitation and the law's

prohibition on receipt of private contributions by publicly

funded general election candidates. 2 U.S.C.

S 441a(b)(1)(B): 26 U.S.C. S 9003(b)(1) and (2). Moreover, -- ------ - -----su-ch-an-- i-nterpre-tati-on---i-s--incons-istent--w-it-h--l-l---C-.-F-.-R.--

.~ S 9003.4(a)(1), which permits general election campaigns to

incur expenses prior to the beginning of the expenditure

report period. This regulation would not be necessary if all

expenditures made prior to the primary date of ineligibility

were qualified campaign expenses of the primary committee,

even if the expenditures related to the general election.

However, our analysis differs from that of the Audit

Division because we believe that some of the expenditures may

have had a dual purpose for the Primary Committee and the

General Committee, and those expenditures could be allocated

between the two committees if the purpose is documented. The

central issue raised is whether the expenditures were made

"in connection ... with [the primary] campaign for

nomination" or "incurred to further a candidate's [general]

campaign for election to the Office of President .... "

Compare 11 C.F.R. 5 9032.9(a)(2) (defining qualified campaign

expenses for primary committees) with 11 C.F.R.

5 9002.11(a)(1) (defining qualified campaign expenses for

general committees).

A "bright line" test based solely on the date that an

expenditure is incurred has never been applied by the

Commission to determine whether a particular expense is a

qualified campaign expense for the primary or general

election. Rather, the two key elements for assessing

qualified campaign expenses are timing and the subject matter

requirement of "made in connection with" or "incurred to

further." 11 C.F.R. 55 9032.9(a)(2) and 9002.11(a)(1). It

Page 114, 12/27/94
Memorandum to Robert J. Costa

rinal Audit Report Clinton/Gor~ '92 Comm. and Gen'\ Election Compliance Fund

(LRA*420/AR 194-18)

Page 7

is not sufficient merely for an expenditure to be incurred

prior to the candidate'S date of ineligibility to be

considered a qualified campaign expenditure. Rather, the

correct standard for determining whether an expenditure is a

qualified campaign expense relies on both the timing of the

expenditure and the nature of the expenditure. See AO

1984-15.

The Commission has previously considered the purposes

of expenditures when allocating costs between primary and

general presidential committees. In the Reagan Bush '84

audit, the Commission concluded that certain specific

expenditures for polling, consulting, and voter registration

incurred prior to the candidate's DOl and apparently related

to the general election campaign could be considered

qualified campaign expenses of the primary coaaittee since

the purpose of the expenditures related to "delegate

traeking." Final Audit Report on Reagan Bush '84 Primary

(July 7, 1986). However, the Reagan Bush general committee

also reimbursed the primary committee $64,000 for

telemarketing expenditures incurred prior to the candidate's

date of ineligibility, and the Commission allocated costs

between the committees for advertising production costs

incurred during the primary campaign for certain ----- aove r-t-isements-used-during--both--th~pr-imary and -gener~l------------ -

~, campaigns, thus demonstrating that the timing of the

expenditure alone does not determine whether it is related to

the primary or general election. Id.; Statement of Reasons

supporting Final Repayment Determination in Reagan-Bush '84

General, at 9-12 (July 11, 1988). This precedent supports

examining all of the particular facts surrounding an

expenditure.

"oreover, matters concerning coordinated party

expenditures, which involve publicly-financed presidential

campaigns and expenditure limitations, are analogous to the

issue of qualified campaign expenses presented here. In

situations involving coordinated party expenditures, the

Commission has conside~ed not only the timing, but also the

purpose of expenditures when determining to which election an

expenditure should be attributed. AO 1984-15. For example,

in AO 1984-15, the Commission noted that while "timing is

relevant," coordinated party expenditures are not'restricted

to the time period between the nomination and the general

election, and it would be inconsistent with the purpose of

the limitation on coordinated expenditures to "permit

expenditures made prior to nomination but with the purpose

and effect of influencing the outcome of the presidential

general election to escape this limitation." AO 1984-15.

It is possible that some of the expenditures at issue

were intended, in part, for activities related to securing

the candidate'S nomination. With regard to capital assets

determined to be primary committee assets, we believe the

Page 115, 12/27./94
Memorandum to Robert J. Costa

Tinal Audit Report

Clinton/Gore '92 Comm. and Gen'l Election Compliance Fund

ILRA 1 420/AR 194-18)

Page 8

Commission would have to allocate those expenditures pursuant

to the method used for depreciating capital assets under 11

C.F.R. S 9034.5(c)(1). For the purpose of calculating a

committee's Statement of Net Outstanding Campaign Obligations

("NOCO Statement"), primary committees are permitted to take

at least a 40\ depreciation on "any property used in the

operation of the campaign whose purchase price exceeded

$2,000 when acquired by the committee." 11 C.r.R.

S 9034.5(c)(1).

There is a question whether the expenditures for

computer equipment are qualified campaign expenses for the

primary committee. Many of the Primary Committee's computer

requirements (processing matching fund submissions, preparing

disclosure reports, scheduling travel plans) were handled by

outside vendors such as Public Office Corporation and

Worldwide Travel, Inc. throughout the course of the campaign.

However, the General Committee asserts that the primary

Committee used the computer equipment to: (1) increase its

correspondence capability and activity; and (2) engage in

"delegate tracking" in preparation for the convention.9/

Additionally, the General Committee asserts that the Primary

Committee's previous computer system often malfunctioned

~. because it could not handle all the necessary users, and -the-iiffore-~-a-rel'lacement-wassought. . Finally, the General

Committee notes that all of the Primary Committee'seiIs-tirig--

files were transferred to the new mainframe system once it

came on-line prior to 001.

As documentary support for these arguments, the General

Committee produced three memoranda regarding the computer

system from Sherry Curry, a Primary Committee staff member to

Barbara Yates, the Primary Committee's accountant. One

memorandum, dated June 27, 1994, states that the Primary

Committee purchased the new mainframe computer to increase

user capacity since the leased system could only handle 80

devices (terminals, modems, printers) before suffering

breakdowns, and the General Committee submitted three sample

computer repair work orders from these breakdowns. Once the

new mainframe came on-line, more devices could be operated at

the same time. Similarly, in a June 24, 1994 memoranda from

MS. Curry to Ms. Yates, it is stated that the Primary

Committee's incoming correspondence level was increasing and

because of the need to respond, the Primary Committee needed

greater computer capacity. The memorandum includes a list of

9/ Based on the Primary Committee's descriptions in their

response to the interim report, "delegate tracking" on the

computer system apparently would include using computers to

prepare correspondence to the delegates, and to log phone calls

made to delegates. The Primary Committee response appears to also

indicate that computers were used for general convention

preparation and logistics.

Page 116, 12/27/94
Memorandum to Robert J. Costa

Final Audit Report

C2inton/Gore '92 Comm. and Gen': Election Compliance Fund

(LRA i 420/AR 494-18)

Page 9

the biweekly incoming correspondence amounts demonstrating

that in the last two weeks before the 001, the incoming

correspondence level increased to 6,036 incoming pieces, up

from approximately 3,000 incoming pieces over the previous

biweekly periods dating back to February 1, 1992.10/ primary

Committee Response, Exhibit 21. Finally, a third-memorandum

asserts that delegate tracking and convention operations were

performed on certain unspecified personal computers. It

appears that the primary Committee is referring to the

personal computers purchased from Future Now, Inc.

The General Committee response to the interim report

and the computer vendors' invoices indicate that the ICL,

Inc. mainframe computer came on-line at least on June 25,

1992, and that the Primary Committee files were inserted on

this system. Thus, there is evidence that the Primary

Committee had this equipment prior to 001, during the

timeframe from June 25, 1992 through July 15, 1992.11/

Similarly, it appears that the only peripherals tha~the

primary Committee possessed at the end of the campaign were

the W.P. Malone peripherals it owned from July 11, 1992 on.ll/

10/ However, the memorandum does not indicate the subject matter

Of the incoming correspondence (~ contributions, bills,

letters), whether the Primary Committee answered the

correspondence at the same level that it was incoming, and how the

computer system would be used to process either incoming or

outgoing mail.

11/ We note there is a dispute over when the new system came

on-line. The Primary Committee ordered the new mainframe computer

from ICL, Inc. on May 28, 1992 (invoice date), but the permanent

equipment was only installed on June 25, 1992. The Primary

Committee asserts that ICL, Inc. provided it a loaner during the

interim period, but this assertio~ is undocumented. Thus, it

appears that the new mainframe was installed only two weeks prior

to the start of the convention.

~~r We note that the devices that the Primary Committee appears

to have agreed to purchase on June 30, 1992 (invoice date) from

W.P. Malone for $104,174 were actually being leased by the Primary

Committee up to July 11, 1992 since the purchase invoice and lease

invoices list the exact same equipment. So, it appears that the

Primary Committee only became the owner of these goods at the time

the convention started (or owned and leased the equipment

concurrently).

Page 117, 12/27/94
Memorandum to Robert J. Costa

Final Audit Reoort

Clinton/Gore '92 Comm. and Gen'l Election Compliance Fund

(LRA t 420/AR '94-18)

t'llge 10

Additionally, it appears that the Future Now, Inc. personal

computers were used in the convention operations.13/

The facts at issue present difficult questions

concerning how to distinguish legitimate primary campaign

activity from activity that is geared towards the general

election campaign. In the instant matter, it is clear that

the computer equipment was used extensively throughout the

general election campaign. There is also some evidence that

the Primary Committee had most of the computer equipment in

its possession prior to 001. However, the evidence submitted

to demonstrate the extent to which the primary Committee used

the computer equipment is limited. The documentation

submitted to date consists of unsworn memoranda produced in

response to the interim report. Given the limited

information provided and the questions that remain regarding

the computer system, the General Committee should be required

to provide documentation with more probative value such as

sworn affidavits and contemporaneous documentation or

memoranda. For example, the General Committee could provide

delegate tracking reports produced by the system and

comprehensive computer maintenance records. If the General

Committee can provide additional documentation demonstrating

the primary Committee's use of the computer system, we

-believe -that--the-costsincurred _for th_e_l>yste_m _....ould be

qualified campaign expenses for the Primary Committee-ana-the----

value of the asset determined pursuant to section

9034.5(c)(1) of the Commission's regUlations for purposes of

the Primary Committee's NOCO Statement.

We concur with the proposed report's conclusion that

the polling expenses paid by the Primary Committee to

Greenberg-Lake ($108,622) and Opinion Research Calling

($93,904) are general election campaign expenses. Polling

expenditures are specifically provided for in 11 C.F.R.

S 9003.4(a)(1) as qualified campaign expenses for the general

election. The polls concerned the general election itself in

that they measured the candidate's popularity versus the

other likely candidates in the general election, George Bush

and Ross Perot.!!/ Indeed, two of the polls were taken after

13/ The costs for fifty-one personal computers ordered from

Future Now, Inc. were incurred by the Primary Committee on May 29,

1992 (invoice date). Additional personal computers were ordered

by the Primary Committee from Future NOW, Inc. and delivered on

June 23, 1992. June 29, 1992, and July 15, 1992.

14/ The Commission has in the past viewed the content of the

expenditure to determine the purpose of that expenditure. See AO

1984-15 (after scrutiny of the content of certain television--

commercials, the Commission concludes that "[tlhe clear import and

purpose of the these proposed advertisements is to diminish the

support for any Democratic Party presidential nominee ... ").

page 118, 12/27/94
Memorandum to Robert J. Costa

F~nel Audit Report

Clinton/Gore '92 Comm. and Gen'l Election Compliance Fund

(LRA • 420/AR .94-18)

Page 11

the roll call vote for the nomination was completed at the

convention. With regard to the General Committee's argument

that the polls decrease in value at a rapid rate, we view

this as irrelevant since we view the polls as general

election expenses.

Finally, we concur that all costs associated with the

biographical film about the candidate entitled -The Man From

Hope" are general election expenses. In Reagan-Bush '84, the

Commission specifically addressed the issue of commercial

production costs associated with a television commercial

produced by a primary committee but aired during the general

election. Statement of Reasons supporting Final Repayment

Determination in Reagan-Bush '84 General, at 9-12 (JUly 11,

1988). The Commission concluded that the date of broadcast

for media projects (i.e., the date when commercials, films,

etc. are aired or broadcasted), not the date of production,

determines whether such projects are primary or general

election expenditures.~/ The -Man from Hope- film was shown

at the convention after the candidate was nominated, as well

as on several SUbsequent dates.16/ Therefore, these expenses

are not qualified campaign expenses for the general election.

,. V. FUNDS REDESIGNATED nOM PRIMARY COMMITTEE 'f'O GELAC

--- - --(-II--.A.2.b. )--

The proposed report recommends that the GELAC pay the

Primary Committee $1,296,517, representing funds

impermissibly redesignated to the GELAC. The report notes

lS/ The Commission concluded that the commercial at issue aired

repeatedly during the general election campaign, despite the

Primary Committee's arguments to the contrary. Reagan-Bush '84

Statement of Reasons, p. 11. The Commission rejected the primary

committee's assertion that production costs should only be

allocated to the primary campaign.

16/ The General Committee contests the Commission's determination

that the candidate's 001 is July 15, 1992. The 001 is the -date

on which the party nominates its candidate." 11 C.F.R.

S 9032.6(a). Although the Commission has not defined the word

"nomination," the Commission has previously viewed the completion

of a convention roll call vote which nominates a candidate as the

"nomination." The General Committee's suggestion to defer to a

political party's definition of the term "nomination" will lead to

inconsistent'applications since every party could define it

differently. Moreover, the Commission notified the Primary

Committee by letter dated August 4, 1992 that July 15, 1992 was

the 001, and the Primary Committee did not object to this

determination until now. As a result, we concur with the proposed

report's conclusion that the DOl was July 15, 1992, the date that

the convention roll call vote nominating the candidate was

completed.

page 119, 12/27/94
Memorandum to Robert J. Costa

rinal Audit Report Clinton/Gor~ '92 Corom. and Gen'l Election Compliance rund

(LRA • 420/AR 194-18)

Page 12

that the Primary Committee received certain contributions and

then redesignated the contributions to the GELAC in a manner

inconsistent with the Commission's regulations at 11 C.r.R.

S 9003.3(a)(1)(iii). The report seeks to treat the

contributions as primary contributions, nullifying the

impermissible redesignations.!21

In response to the interim report, the General

Committee argues that the subject contributions were

undesignated, and thus, under 11 C.r.R. S ll0.1(b)(2)(ii),

could be viewed as GELAC contributions since they were

received after the candidate's 001. The General Committee

contends that the redesignations were performed by mistake by

a former vendor. The General committee further asserts that

the primary Committee should not be penalized for setting a

cut-off date for receiving contributions in the belief that

it has no remaini~g debts "without the benefit of hindsight."

General Committee Response, at 6. In this respect, the

General Committee challenges the Commission practice of

applying private contributions against a deficit on the

Primary Committee's NOCO Statement prior to applying matching

funds against the deficit. The General Committee believes

that if anticipated matching funds were applied against the

primary Committee's deficit as reflected on the NOCO

-Statemerit-;-the Primary-Committee would have been permitte_d_to _

make the redesignations.

We concur with the report that the GELAC must transfer

funds to the Primary Committee. The determination of whether

a contribution is designated for a particular election turns

on the contributor's donative intent. See AO 1990-30.

Arguably, the contributions in question-were designated to

the primary Committee since they were made payable to

"Clinton for President" or a similar entity and received when

the Primary Committee had outstanding debts. lSI See 11 C.r.R.

S 110.1(b)(4)(i). The Commission has permitted ---

pUblicly-financed presidential campaigns to treat

contributions received post-DOl as primary receipts and

submit them for matching if they have outstanding debts.

Further, Commission regulations condition redesignations of a

primary committee's contributions on the fact that the

17/ When these contributions are added to the Primary Committee's

Statement of Net Outstanding Campaign Obligations ("NOCO

Statement") as an asset, the funds decrease the Primary

Committee'S net outstanding campaign obligations and results in

the repayment to the United States Treasury based on receiving

funds in excess of the Primary Committee's entitlement.

181 We recommend that you attach to your report an exhibit

oemonstrating the amounts of contributions designated for each

specific entity (~, Bill Clinton, Bill Clinton for President,

Bill Clinton for President Committee, Team Clinton).

Page 120, 12/27/94
Memorandum to Robert J. Costa

Final Audit Report

Clinton/Gore '92 Corom. and Gen'l Election Compliance Fund

(LR~ *420/AR 194-18)

Page 13

contributions represent funds in excess of the amount needed

to pay remaining primary debts, thus, it is anticipated that

a primary committee will continue to receive private

contributions designated to it after 001. See 11 C.F.R. , 9003.3(a)(1)(iii).

The Primary Committee benefited from this approach,

receiving public funds for contributions received post-DOl

that were virtually identical to these at issue here. The

General Committee has not advanced a credible reason for

distinguishing between the post-DOl contributions submitted

for matching by the Primary Committee and those contributions

that it now claims were contributions to the GELAC. We do

not believe that the primary Committee can apply the

designation rules in a manner that will allow it to

arbitrarily claim that certain contributions are primary

contributions that are matchable and reverse its position to

increase its entitlement to public funds by claiming that

similarly designated contributions are designated to the

GELAC. The designation rules do not operate to thus allow a

committee to manipulate its entitlement to public funds.

The General Committee'S argument that matching funds be

counted into the NOCO Statement as of the time of submission, ---- ratner- than-receipt of such -funds, would also allow _the _

primary Committee to manipulate its entitlement to public

funds. The General Committee's claim that the Commission's

NOCO Statement calculation system is unfair is based solely

on the fact the Primary Committee miscalculated its remaining

entitlement and expenditures. The Commission's regulations

account for the fact that there may be miscalculations in the

NOCO Statement because the Primary Committee is required to

submit a revised NOCO Statement with each submission for

matching funds after 001 and the primary Committee will be

reqUired to make a repayment if it it later determined that

the payments exceeded the Primary Committee's net outstanding

campaign obligations. 11 C.F.R. SS 9034.5(f)(1) and

9038.2(b)(1)(i).

Further, while treating future matching funds as an

accounts receivable to eliminate its debts, the Primary

Committee nevertheless submitted a NOCO Statement indicating

that it was in a deficit position so that it would be

entitled to receive the anticipated matching funds. This

places the Primary Committee in the contradictory position of

asserting that it has debts and does not have debts in order

to obtain the maximum benefits of the public financing

process. The Commission's regulations do not contemplate

treating future matching funds as an accounts receivable on

the NOCO Statement. The accounts receivable (or amounts

owed) that can be listed as assets on the NOCO Statement

generally include credits, refunds of deposits or rebates

from qualified campaign expenditures. 11 C.F.R.

S 9034.5(a)(2)(iii) (discussing calculation of NOCO

Page 121, 12/27/94
Me1Do'i'andum'£d ltobei:t J .'"Co~'t.a ..... rinalAudit Report

Clinton/Gore '92 Comm. and Gen'} Election compliance Fund

(LRA t 420/AR t94-18)

Page 14

statements). The result of including anticipated matching

funds as an asset i.that the Primary Co_ittee is able to

increase its entitlement based on speculation that the

contributions will in fact be matched. 11 C.F.R.

S 9034.5(a).

Page 122, 12/27/94
FEDERAL ELECTIO' CO\.\.\.1I5510'

AK005799

'-.--

December 27, 1994

Mr. J.L. "Skip" Rutherford, Treasurer

Clinton/Gore '92 COmmittee

Clinton/Gore '92 General Election

compliance Fund

c/o Ms. Lyn Utrecht

oldaker, Ryan & Leonard

818 Connecticut Ave., N.W., Suite 1100

Washington, D.C. 20006

Dear Mr. Rutherford:

Attached please find the Final Audit Report on the

Clinton/Gore '92 Committee and Clinton/Gore '92 General

Election Compliance Fund. The Commission approved this report

on December 27, 1994. As noted on page 4 of this report, the

-Commission-may·pursue--any-o£.the_mfl.t.t,rs discussed in an

enforcement action.--- .....-.-

In accordance with 11 CrR S9007.2(c)(1) and (d)(l), the

Commission has made an initial determination that the Candidate

is required to repay to the Secretary of the Treasury $254,546

within 90 days after service of this report (Karch 30, 1995).

Should the Candidate dispute the Commission's

determination that a repayment is required, Commission

regulations at 11 crR S9007.2(c)(2) provide the Candidate with

an opportunity to submit in writing, within 30 calendar days

after service of the Commission's notice (January 30, 1995),

legal and factual materials to demonstrate that no repayment,

or a lesser repayment, is required. Further, 11 CFR

S9007.2(c)(3) permits a Candidate who has submitted written

materials to request an opportunity to make an oral

presentation in open session based on the legal and factual

materials submitted.

The Commission will consider any written legal and factual

materials submitted by the Candidate within the 30 Day period

in making a final repayment determination. Such materials may

be submitted by counsel if the Candidate so elects. If the

Candidate decides to file a response to the initial repayment

determination, please contact Kim L. Bright-Coleman of the

Office of General Counsel at (202) 219-3690 or toll free at

(800) 424-9530. If the Candidate does not dispute this initial

Page 123, 12/27/94
MR. J.L. "S~IP" RUTHERFORD, TREASURER

Page 2

dete~mination within the 30 day pe~iod p~ovided, it will be cQnside~ed final.

The Commission app~oved Final Audit Repo~t will be placed

on the public ~eco~d on Decembe~ 29, 1994. Should you have any

questions ~ega~ding the public ~elease of this ~epo~t, please

contact Ron Ha~~is of the Commission's P~ess Office at (202)

219-4155.

Any questions you may have related to matte~s covered

during the audit or in the audit report should be directed to

Alex Boniewicz or Joe Stoltz of the Audit Division at (202)

219-3720 or toll free at (800) 424-9530.

?L!

Robert J. osta

Assistan Staff Director

Audi E- DIvision

Attachment as stated

Page 124, 12/27/94
FEDERAL ELECTIO' (0"1."'15510'

AK005802

c

December 27, 1994

The Honorable William J. Clinton

c/o Ms. Lyn Utrecht

Oldaker, Ryan & Leonard

818 Connecticut Ave., N.W., Suite 1100

Washington, D.C. 20006

Dear Mr. President:

Attached please find the Final Audit Report on the

Clinton/Gore '92 Committee and Clinton/Gore '92 General

Election Compliance Fund. The Commission approved this report

on December 27, 1994. As noted on page 4 of this report, the

Commission may pursue any of the matters discussed in an

enforcement action.

--- -- -- - In -acco-rdance--....ithlL C!'RS90_07.~CcJ(1) and (d)( 1), the

Commission has made an initial determinat1on-thaE-you--ar-e

reqUired to repay to the Secretary of the Treasury $254,546

within 90 days after service of this report (March 30, 1995).

Should you dispute the Commission's determination that a

repayment is required, Coaaission regulations at 11 eFR

S9007.2(c)(2) prOVide you with an opportunity to submit in

writing, within 30 calendar days after service of the

Commission's notice (January 30, 1995), legal and factual

materials to demonstrate that no repayaent, or a lesser

repayment, is required. Further, 11 crR S9007.2(c)(3) permits

a candidate who has submitted written materials to request an

opportunity to make an oral presentation in open session based

on the legal and factual materials submitted.

The Commission will consider any written legal and factual

materials submitted by you within the 30 Day period in making a

final repayment determination. Such materials may be submitted

by counsel if you so elect. If you decide to file a response

to the initial repayment determination, please contact Kim L.

Bright-Coleman of the Office of General Counsel at (202)

219-3690 or toll free at (800) 424-9530. If you do not dispute

this initial determination within the 30 day period provided,

it will be considered final.

Page 125, 12/27/94
THE HONORABLE WILLIAM J. CLINTON

Page 2

The Commission approved Final Audit Report will be placed

on the public record on December 29, 1994. Should you have any

questions regarding the public release of this report, please

contact Ron Harris of the Commission's Press Office at (202)

219-4155.

Any questions you may have related to matters covered

during the audit or in the audit report should be directed to

Alex Boniewicz or Joe Stoltz of the Audit Division at (202)

219-3720 or toll free at (800) 424-9530.

Robert . Costa

Assistant Staff Director

Audit Division

page 126, 12/27/94
AB002383

CHRONONLOGY

CLINTON/GORE '92 COMMITTEE

AND

CLINTON/GORE '92 GENERAL ELECTION COMPLIANCE FUND

c

Pre-audit Inventory Commenced

Audit Fieldwork

Interim Audit Report to

the Committee

Response Received to the

Interim Audit Report

Final Audit Report Approved

Page 127, 12/27/94

5/3/93

6/6/93 - 8/31/93

4/4/94

7/6/94

12/27/94
PlEPlORANDU!'l

June 13. 1993

TO:

FROM:

SUBJECT:

Ronald M. Harris

Chief, Press Office, /'

Kim B::ight-Coleman \L;'~~ Assoclate General Co~nsel

Lorenzo Holloway -( >r

Assistant General Counsel

Public Issuance of the Statement of Reasons

for the Final Repayment Determination for

Clinton/Gore '92 Committee

Attached please find a copy of the above-referenced

Statement of Reasons which the Commission approved on June 1,

1995.

Informational copies of the Statement of Reason have

been received by all parties involved and the document may be

released to the public.

Attachment as stated.

cc: Audit Division

FEe Library

Public Disclosure

Reports Analysis Division
FEDERAL ELECTION COM,""15510N

June 2. 1995

Lyn Utrecht

Oldaker, Ryan' Leonard

818 Connecticut Ave., N.W.

Suite 1100

Washington, D.C. 20006

RE: Statement of Reasons for

Clinton/Gore '92 Committee

Dear Ms. Utrecht:

The Commission has considered the response filed on behalf of

the Clinton/Gore '92 Committee (Wthe Committee·) to the

Commission's initial repayment determination contained in the

Report of the Audit Division on the Committee issued on December

--------27--;-1-9-94 ;--Oil-Juntfl;199S,-the Coni ~~t onma-de· a-fnfal-- _.---.-

determination that the Committee must repay $84,421 to the United

States Treasury for: 1) the use of contributions to defray

qualified campaign expenses, 2) the use of public funds to defray

non-qualified expenditures and 3) income received on the

investment of public funds. 26 U.S.C. 5 9007(b); 11 C.F.R.

55 9007.2(b)(2), (4), and (5). The Commission also concluded

that, in order to comply with 11 C.F.R. 5 9007.6, the Committee

must pay $24,640 to the United States Treasury for stale-dated

checks.

Enclosed is the Statement of Reasons in support of the

Commission's final repayment determination. 11 C.F.R.

5 9007.2(c)(4). Judicial review of the Commission's determination

is available pursuant to 26 U.S.C. 5 9041, if the petition is

filed with the United States Court of Appeals for the District of

Columbia Circuit within thirty (30) days from June 1, 1995, the

date of the Commission's final determination.

Under 11 C.F.R. S 9007.2(d)(2), repayment must be made within

thirty (30) days from the date of service of this notice. We note

that the Committee submitted a check for the repayment and payment

amounts on January 30, 1995, payable to the United States
~,_.-

Letter to tyn Utrecht

Page 2

Treasury. Please contact me at (202) 219-3690, if you have any

questions.

i{;'Pw' 'im .'i9ht-C~.~ Associate General Counsel

Enclosure

Statement of Reasons

cc: J.t. "Skip" Rutherford, Treasurer
BEFORE THE FEDERAL ELECTION COMMISSION

In the Matter of

President William v. Clinton

Vice President Albert Gore, Jr. and

Clinton/Gore '92 Committee

STATEKENT OF REASONS

On June 1, 1995, the Commission made a final determination

that President William J. Clinton, Vice President Albert Gore,

Jr., and the Clinton/Gore '92 Committee ("the Committee") must

repay $84,421 to the United States Treasury for: 1) the use of

contributions to defray -qualiTiea campaigrcexpens-es,-2-j-the use-of---

public funds to defray non-qualified expenditures and 3) income

received on the investment of public funds.!1 26 U.S.C.

S 9007(b); 11 C.F.R. SS 9007.2(b)(2), (4), and (5). The

Commission concluded that, in order to comply with 11 C.F.R.

S 9007.6, the Committee must pay $24,640 to the United States

Treasury for stale-dated checks. On January 30, 1995, the

Committee submitted a check in the amount of $109,061 ($84,421 +

$24,640) to the United States Treasury. Therefore, the Committee

does not owe any amount to the United States Treasury. This

Statement sets forth the legal and factual bases for the

Commission'S final repayment determination. See 11 C.F.R.

§ 9007.2(c)(4'.

!I All figures have been rounded to the nearest dollar amount.
-2-

I . BACKGROUND

The Clinton/Gore '92 Committee was the principal campaign

committee for the presidential general election campaign of

William J. Clinton and Alb@rt Gore, Jr.~/ The Committee received

$55,240,000 in federal funds for this purpose under 26 U.S.C.

S 9006. Pursuant to 26 U.S.C. S 9007(a), the Commission conducted

an audit and examination of the Committee's receipts,

disbursements, and expenses.

The Commission approved the Interim Audit Report on March 24,

1994. Attachment 1. The Committee responded to the Interim Audit

Report on July 6, 1994.~/ Attachment 2. The Commission approved

the Final Audit Report on December 27, 1994. Attachment 3. The

-- --- - - -- ---- ----

-::;:- Final Audi t Report included an ini tialQetermlnat.ron-~hatthe-----

C, Committee make repayments to the United States Treasury totaling

$197,371. Attachment 3, p. 75. Specifically, the Commission

made an initial determination that the Committee must repay

$112,100 because it received contributions of that amount to

defray qualified campaign expenses. 26 U.S.C. S 9007(b)(3); 11

C C.F.R. S 9007.2(b)(5). Additionally, the Commission made an

initial determination that the Committee must repay $6,646 for

income earned on the investment of public funds. 11 C.F.R.

S 9007.2(b)(4). The Commission also determined that the Committee

must repay $78,625 for public funds used to defray non-qualified

2/ The Committee registered with the Commission on July 17,

1992.

3/ On May 3, 1994, the Commission granted the Committee a

50-day extension of time to respond to the Interim Audit Report.
,....,

, .'

------_.~

-3-

campaign expenses. 26 U.S.C. S 9007(b)(4); 11 C.F.R.

S 9007.2(b)(2). The Final Audit Report recommended that the

Clinton/Gore 1992 General Election Compliance Fund ("Compliance

Fund") transfer $267,840 to the Committee to reduce the amount

subject to the expenditure limitation and, therefore, avoid a

repayment to the United States Treasury for exceeding the

expenditure limitation. ld. at 70. The Final Audit Report also

included an initial determination that the Committee must make a

payment to the United States Treasury in the amount of $57,175 for

stale-dated checks. Id.

The Committee submitted its written response to the Final

Audit Report on January 30, 1995, and included a check to the

--Unit:ed-State-s-Tteasury-in - the-amount- of-$H)9,061-;--Atta~hment4-~.!1-

The Committee did not dispute a $1,000 contribution from a sound

and staging vendor. Attachment 3, p. 31-32; Attachment 4, p. 2-5.

Nor did the Committee dispute the repayment of $70,296 for

non-qualified campaign expenses for lost and stolen equipment and

the $6,646 repayment for income earned on the investment of public

funds. Id. at 6. In addition, the Committee did not dispute the

Final Audit Report recommendation that the Compliance Fund

transfer $267,840 to the Committee in order to avoid exceeding the

expenditure limitation. The Compliance Fund transferred $660,000

to the Committee on January 27, 1995.

4/ This Office requested that the Audit Division review the

Committee's response. The Audit Division submitted its analysis

on April 21, 1995. Attachment 5.
-~-

Since the Committee did not dispute the initial

determinations that it repay $1,000 for the use of a contribution

to defray qualified campaign expenses, $70,296 for lost and stolen

equipment and $6,646 for income earned on the investment of public

funds, the Commission has made final determinations that the

Committee repay these amounts totaling $77,942 ($1,000 + $70,296 +

$6,646). 11 C.F.R. S 9007.2(c)(1).

II. CONTRIBUTIONS USED TO DEFRAY QUALIFIED CAMPAIGN EXPENSES

The Committee and the Democratic National Committee ("DNC")

coordinated their respective media expenditures during the 1992

general election campaign. The Committee noted that the same

"creative team" under the apparent supervision of Mandy Grunwald

and Greer;-Mar-Cj61is;Mitchel:landGrunwald- &-Associat~sr-InG.----

("GMMG") was engaged to produce "campaign media" for the Committee

as well as "441a(d) media" and "other DNC generic media" for the

DNC. Attachment 4, p. 2; see Attachment 6, p. 1. The

Committee had entered into contracts with four media vendors under

the supervision of the Committee and Ms. Grunwald for media

services for the period July 1992 through November 1992. See,

~, Attachment 6, p. 6. The contracts between the Committee and

the media vendors required the Committee to make monthly retainer

payments in amounts varying from $20,000 to $50,000. See, e.g.,

Attachment 6, p. 6. The Committee paid the first retainer

installment amounts to the vendors starting in August 1992, and

paid one to two additional retainer installment amounts per

vendor.
-5-

In late October 1992, the contracts were amended so that the

ONC would assume the Committee's obligations. See Attachment 4,

p. 25-33; Attachment 7. These obligations were set forth in new

contracts between the ONC and the four media vendors which were

signed in October 1992 for the period between September 15, 1992

to November 15, 1992. Attachment 4, p. 25-33.~1 Pursuant to the

new contracts, the ONC paid the vendors $111,100, which amounted

to a portion of the final retainer installments to be paid

originally by the Committee. The amount paid by the ONC totaled

24.4% of the original Committee-vendor contract amounts. The

Final Audit Report contained an initial determination that the

Committee repay $111,100 to the United States Treasury for the

.... -- ----receipt--of--contributions used-to -defray- qualif-ied-campa-ign .~

expenses since it appeared that the ONC made in-kind contributions

to the Committee by assuming the Committee's remaining contractual

obligations to the media vendors. Attachment 3, p. 34.

In response to the Final Audit Report, the Committee argues

that the contract amendment did not result in a contribution

\,.. '.

because the amendment was properly executed and justified due to a

change in the type of media services to be produced. Attachment

4, p. 2. The Committee and ONC stated that the contracts were

51 The new contracts never referenced the initial or the amended

contracts with the Committee. See Attachment 4, p. 25-33. The

amended contracts between the vendors and the Committee note that

one reason for the amendment was the fact that certain services of

the vendors "were for the benefit of the Democratic National

Committee '" rather than the Committee." Attachment 7, p. 1.

The Committee acknowledges that the new contracts entered into by

the ONC and the media vendors memorialized the ONC's assumption of

the Committee's contractual obligations to the media vendors.

Attachment 4, p. 1-2.
c-.

-6-

amended because 24.4\ of the contemplated work would be for

general issues media, rather than candidate-specific media. Id.,

p. 2 and p. 16. The Committee stated that due to the change in

media focus, it was more appropriate for the ONC, rather than the

Committee, to pay for such expenses. Id., p. 2-5. By a letter

dated July 5, 1994, Joseph E. Sandler, ONC General Counsel, stated

that the work the ONC paid for was "generic media, i.e. media

which urged support for the Democratic Party and its candidates

without mentioning a specific candidate." Id., p. 18. Therefore,

an alteration to the contracts was justified and provided no

contribution from the ONC to the Committee.

To demonstrate that a shift was made in media strategy, the

that supervised the project, explaining that the media made

pursuant to the vendors' contract with the DNe was for "generic

media." Attachment 4, p. 10-11. The vendor attached a videotape

to the affidavit containing four advertisements named in the

affidavit as examples of generic media. The advertisements

encouraged voters to support Democratic candidates in general, and

did not feature a specific candidate or a specific elective

office. The Committee stated that it could not provide

documentation on all the projects covered by the contract, and

thus, could not explain the basis for the ONe specifically

assuming 24.4% of the Committee's contract obligations. Id. at 5.

The Committee also submitted some invoices for production costs
c

0'.

-/-

associated with the advertisements at issue.~/ The Committee

argued that amending the contracts just prior to the contracts'

expiration ~ad no legal relevance. Id. at 2-5.

A contribution is a gift, advance, deposit of money or

anything of value made by a person.for the purpose of influencing

any election for federal office. 11 C.F.R. S 100.7(a)(1); 11

C.F.R. S 9002.13. The term -anything of value" includes all

in-kind contributions. 11 C.F.R. S 100.7(a)(1)(iii). If goods or

services are provided to a committee without charge or for a

charge that is less than the usual and normal charge, the

committee will receive a contribution. Id. Goods and services

include, inter alia, securities, facilities and advertising

services.- -XeL --A-s--a-condi-tion-pTecedent-to-receiv-ing--publi~­

funds, the candidate must certify that no contributions have been

or will be accepted. 11 C.F.R. S 9003.2(a)(2). However, if the

Commission determines that a candidate of a major party accepted

contributions to defray qualified campaign expenses, it shall

notify the candidate of the amount of contributions so accepted,

and the candidate shall pay to the United States Treasury an

amount equal to such amount. 26 U.S.C. S 9007(b)(S); 11 C.F.R.

S 9007.2(b)(S); see also 11 C.F.R. S 9003.2(a)(2).

The Commission concludes that fees paid by the ONC to the

media vendors are not in-kind contributions to the Committee. The

Committee, the ONe and the vendors have provided information

demonstrating that a shift in media strategy occurred and they

6/ The invoices were submitted to GMMG and do not indicate

whether the media project was for the Committee or the ONC.
c

-8-

provided examples of the resulting advertisements generated from

this change in strategy. Thus, it appears there was a legitimate

basis for the ONC to have assumed the Committee's original

contract obligations. Therefore, there were no media services

provided to the Committee without charge or for a charge that was

less than the usual and normal charge as a result of the contract

amendments. 11 C.F.R. S 100.7(a)(1)(iii)i cf. Advisory Opinion

(~AO~) 1981-42 (Commission states that contribution to a political

committee results if a third-party corporation pays a political

committee's obligation to a vendor supplying services to the

political committee). Moreover, even if the Committee and the ONC

did not shift the media strategy and continued to produce

"candidate':specifn:"-media~-the-DNe·could -nave-paid-fe-r-suchmedia_

without making an in-kind contribution to the Committee by

reporting the expenditures as coordinated party expenditures under

2 U.S.C. S 441a(d). See AO 1984-15.21 Therefore, the Commission

has made a final determination that the Committee does not owe a

repayment to the United States Treasury as a result of the

contract amendments with the ONC.

III. USE OF PUBLIC YUNDS FOR NON-QUALIFIED CAKPAIGN EXPENSES

The Final Audit Report contained an initial determination

that the Committee make a repayment of $8,329 for goods and

7/ In AO 1984-15, the Commission concluded that a national

committee expenditure for media that depicts a clearly identified

presidential candidate and conveys an electioneering message

should be reported as a coordinated party expenditure or as an

in-kind contribution to th~ identified candidate. AO 1984-15.

An expenditure for media that references all candidates of a party

or no specific candidates of a party should be reported as an

"operating expenditure." AO 1984-15.
"

-9-

services that the Committee paid twice. Attachment 3, p. 75. The

Committee's response to the Final Audit Report included

documentation demonstrating that one of its vendors, Southwestern

Bell, refunded $1,850 for goods or services that had been paid

twice by the Committee. Attachment 4, p. 6. However, the

Committee's response did not address duplicate payments totaling

$6,479 for services that the Committee paid twice to other

vendors. Id.

If the Commission determines that any amount of any payment

made to an eligible candidate of a political party is used for any

purpose other than to defray qualified campaign expenses, it shall

notify the candidate of the amount so owed, and the candidate will

pay-tne--Se-cre-tary-oftne--TreaSU1"y-t:nac-amount;---26U;S~C-;--------- - --

S 9007(b)(4). A qualified campaign expense is an expense incurred

by the candidates of a political party for the offices of

President and Vice president, or by their authorized committee, to

further the election of either or both such candidates to such

offices. 26 U.S.C. S 9002(11).

A qualified campaign expense does not include additional

payments to a vendor for goods and services that have already been

paid. Such payments do not further the election of a political

party's candidate for President and Vice president because the

authorized committee receives no additional goods and services

from the vendor. See 11 C.F.R. S 9002.ll(a)(l). As a result of

the refund from Southwestern Bell, the Committee only made one

payment to this vendor for goods or services to further the

election. See 26 U.S.C. S 9002{ll). However, the Committee
-10-

submitted no documentation demonstraeing that the remaining $6,479

in additional payments had been refunded. Therefore, the

Commission nas made a final determination that the Committee must

repay $6,479 ($8,329 - $1,850) to the United States Treasury for

non-qualified campaign expenditure~ in the form of duplicate

payments to vendors for goods and services.

IV. STALE-DATED CHECKS c.

c>

Pursuant to 11 C.F.R. § 9007.6, if a committee has checks

outstanding to creditors or contributors that have not been

cashed, the committee shall notify the Commission. A committee

shall inform the Commission of its efforts to locate the payees,

if such efforts have been necessary, and its efforts to encourage

the payees-tocasn-tne--out-standingchecks; --11-C.F-.R.-§-9007_6. A__

committee shall also submit a check, made payable to the United

States Treasury, for the total amount of such outstanding checks.

Id.

The Final Audit Report concluded that the Committee had

unresolved stale-dated checks totaling $57,175. Attachment 3, p.

73-74. In response to the Final Audit Report, the Committee

submitted documentation demonstrating that stale-dated checks

totaling $32,534.76 have been resolved and checks totaling

$24,640.15 remain unresolved. Attachment 4, p. 6.

The Commission has made a final determination that the

Committee has unresolved stale-dated checks totaling $24,640.15.

Therefore, pursuant to 11 C.F.R. S 9007.6, the Committee must pay

$24,640 to the United States Treasury for stale-dated checks.
-11-

V. FINAL DETERMINATION

The Commission has made a final determination that President

William J. Clinton, Vice President Albert Gore, Jr., and the

Clinton/Gore '92 Committee must repay $84,421 to the United States

Treasury. This repayment consists of $1,000 for the unlawful

acceptance of a contribution, and $6,646 earned on the investment

of public funds. 11 C.F.R. SS 9007.2(b)(4) and (5). This

repayment also consists of $76,775 for non-qualified campaign

expenditures, including $70,296 for lost and stolen equipment, and

$6,479 for additional payments to vendors for goods and services

that had already been provided to and paid for by the Committee.

11 C.F.R. S 9007.2(b)(2). In order to comply with 11 C.F.R.

-S-9007.6,--the-Comm40ss-ionconc-ludes -that--the-{:()mmi-tteemus~-pay------ ---- --

$24,640 to the United States Treasury for stale-~ated checks. On

January 30, 1995, the Committee submitted check in the amount of

C' $109,061 ($84,421 + $24,640) payable to the United States

Treasury. Therefore, the Committee has no outstanding amounts

owed to the United States Treasury.

c

Attachments

1. Interim Audit Report approved March 24, 1994.

2. Response from the Clinton/Gore 1992 Committee to the

Interim Audit Report dated July 6, 1994.

3. Final Audit Report approved on December 27, 1994.

4. Response from the Clinton/Gore 1992 Committee to the

Final Audit Report dated January 30, 1995.

5. Audit analysis dated April 25, 1995 of the Clinton/Gore

1992 Committee response to the Final Audit Report.
c'

-12-

6. Contract between Clinton/Gore '92 and valerie Graves.

7. Amended contract between Clinton/Gore '92 and Valerie

Graves.
,'. \~.... "

,JDS001369

r

'-

INTERIM REPORT or THE AUDIT DIV!SION

ON THE

CLINTON/GORE '92 COMMITTEE

AND CLINTON/GORE '92 GENERAL

ELECTION COMPLIANCE FUND

I. Background

A. Audit Authority

··_·----'l'l'fisreport- isbased-· onanaudit--of-the--e-l-intonlGore ·.1.92--- ---

Committee ("tbe General Committee") and the Clinton/Gore '92

General Election Compliance Fund ("tbe Compliance Fund·). Tbe

audit is mandated by Section 9007(a) of Title 26 of the United

States Code. That section states that "after each presidential election, tbe Commission sball conduct a thorougb examination and

audit of tbe qualified campaign expenses of the candidates of each

political party for President and Vice President.·

Also, 26 U.S.C. S9009(b) states, in part, that the

Commission may conduct otber examinations and audits as it deems

necessary to carry out the functions and duties imposed on it by this chapter.

In addition to exam~n~n9 the receipt and use"of Federal

funds, tbe audit seeks to determine if the campaign bas materially complied witb the limitations, prohibitions, and disclosure

requirements of the Federal Election Campaign Act of 1971

( .. FECA" ), as amended.

B. Audit Coverage

The audit for the General Committee covered the period from the General Committee's inception July 14, 1992, through June

30, 1993. The General Committee reported an.opening casb balance

ll'uc:mo:n__fr-.-_

Pap / ~--..l_
2

of 5-0-; total receipts of 563,711,645; total expenditures of

563,683,481: and a closing cash balance of 528,163.11

The audit for the Compliance Fund covered the period from inception, May 13, 1992, through June 30, 1993. The

Compliance Fund reported an opening cash balance of S-O-; total

receipts of 58;498,699; total disbursements of 54,587,859; and a

closing cash balance of 53,909,840.~/

C. Camoaign Organization .. The General Committee registered with the Federal

Election Commission on July 17, 1992. The Treasurer of the

General Committee during the period covered by the audit was

Robert Farmer who is also the current Treasurer. The Compliance Fund registered with the Commission on Hay 26, 1992. The

Treasurer of the Compliance Fund until August 25, 1992 was David

Watkins. The Committee filed an amended Statement of Organization

on August 25, 1992 which designated Robert Farmer as Treasurer.

Hr. Farmer is also the current Treasurer. Both committees

maintain their headquarters in Little Rock, Arkansas •

.. _ The General Committee maintained five bank accounts at .- various ti..llles-to manag-e It-s -{{nanaa! activity. - From-the-se

accounts, the General Committee made approximately 73,000

disbursements. The General Committee was certified to receive

$55,240,000 from the United States Treasury on July··17, 1"992 to

fund its campaign~ other receipts included a $1,900,000 transfer

from the Compliance Fund, $12!,000 in loans from the Compliance Fund to finance expenses incurred prior to receipt of the July 17,

1992 grant, and approximately $6,450,000 in offsets to

expenditures.

To manage its financial activity, the Compliance Fund

maintained one bank account. From this account, the Compliance Fund issued 139 checks in payment for goods and services and an

additional 234 checks for refunds of·contributions. Also, the

Compliance Fund received approximately 126,700 contributions from

about 98,000 individuals totaling almost $8,473,000. Of this

amount, approximately $2,443,000 originated from contributors to

the Clinton for President Committee ("the Primary Committee-) as

contributions which were redesignated by the contributors to the

compliance Fund.

II The reported activity does not foot due to minor

mathematical errors. Figures included in this report are

rounded to the nearest dollar.

21 The reported closing cash balance does

Sl,OOO math error in total disbursements on

the Year-End, 1992 disclosure report.

not foot due to a

the Summary pages of

ATTAC.lU!EllT _2.1-,"...-_ 1"\ n

Page""-': c~ a"--

..
s . .-.

....

'-.. 6.

(-

tn 7.

r- 8. ,-

3

D. Audit Scope and Procedures

~n addition to a review of the committees' expenditures

to determine the qualified and non-qualified campaign expenses incurred by the campaign, the audit covered the following general categories:

1. The campaign's compliance with statutory limitations

with respect to the receipt of contributions or loans

(see Finding II.B.l , III.A.);

2. the campaign'S compliance with the statutory

requirements regarding the receipt of contribution, from

prohibited sources, such as those from corporations or

labor organizations (see Finding II.B.l. , III.A.);

3. proper disclosure of receipts, contributions from

individuals, political committees and other entities, to

include the itemization of receipts when required, as

well as, the completeness and accuracy of the

information disclosed (see Findings II.A.l. , II.B.2.);

. "- - ---- 4.-proper--disc1osure-of-disburseJlle.Ilt_$.._j_nc:lu.~iJ1.g the

itemization of disbursements when required, Atwell c-as;--- - the completeness and accuracy of the information

disclosed (see Finding II.B.2.);

proper disclosure of campaign debts and obligations (see Finding II.B.3.);

the accuracy of total reported receipts, disbursements

and cash balances as compared to campaign bank records;

adequate recorakeeping for campaign transactions

accuracy of the Statement of Net OUtstanding Qualified

campaign Expenses filed by the campaign to disclose its

financial condition (see Attachment 1);

9. the campaign'S compliance with spending limitations (see

Finding IILC. ).; and

10. other audit procedures that were deemed necessary in the

situation.

As part of the Commission's standard audit process, an

inventory of the committees' records was conducted prior to audit

fieldwork. This inventory ~a~ conducte~ to determine.if ~he

committees' records were materially complete and in an auditable

state. It was concluded that the records were materially

complete, except as noted below.

OUr review of disbursements

campaign'S procedures for maintaining

was hampered by the

disbursement files.

,L"""....tml"n: ,

The
4

campaign ordered its disbursement files by parcel numberll for its

draft account and by check number for its other accounts. With

respect to other committees, such files are frequently ordered by vendor. Ordering files by vendor allows for a more efficient

review of payments made and outstanding balances owed to aparticular vendor.

Unless specifically discussed below, no material

non-compliance with Statutory and Regulatory requirements was

detected. It should be noted that the Commission may pursue further any of the matters discussed in this report in an

enforcement action. Finally, this report constitutes notice of

potential funds repayable pursuant to 11 CFR $9007.2(a)(2).

II. Findings and Recommendations Relative to Non-Repayment

Matters

A. Clinton/Gore '92 General Election Compliance Fund

1. Disclosure of OCcupation and Name of Employer

Section 434(b)(3)(A) of Title 2 of the United

States Code requires a political committee to report the ----- - identHication-of-each-person-who-makes-a-contribution--tot.he--- - committee in an aggregate amount or value in excess of 5200 per calendar year together with the date and amount of such

contribution.

Section 431(13)(A) of Title 2 of the United States

Code defines the term "identification" to be in the case of any individual, the name, the mailing address, and the occupation of

such individual, as well as the name of his or her employer.

Section 432(i) of Title 2 of the United States Code

states, in part, that when the treasurer of a political committee

shows that best efforts have been used to obtain, maintain, and

submit the information required by this Act for the political committee, any report of such committee shall be considered in compli~nce with this Act.

Section 104.7(b) of Title 11 of the Code of Federal

Regulations states, in part, with regard to the identification, as

defined at 11 CFR 100.12, of each person whose contribution(s) to

the committee and its affiliates aggregate in excess of 5200 in a

calendar year, the treasurer will not be deemed to have exercised

best efforts to obtain the required information unless he or she

has made at least one effort per solicitation either by written

request or by an oral request documented in writing to obtain such

3/ The General Committee sent drafts to personnel in the field

In "parcels". A log was maintained for each numbered "parcel."

These "parcels" were numbered sequentially and documentation was

maintained by "parcels." /

~:~~~_.L__~_

rl:LfSa ( a: it
5

information from the contributor.

clear request for the information

occupation, and name of employer) contributor that the reporting of

law.

Such effort shall consist of a

(i.e., name, mailing address,

which request informs thesuch information is required by

IJj

c>

The Audit staff reviewed contributions from

individuals on a sample basis. The sample results revealed an

error rate of 50\ with respect to disclosure of occupation and

name of employer. For some of the errors, the receipt documentation available for review did not contain information

concerning related solicitations. Therefore, the Audit s~ff

could not determine if best efforts had been employed. In other

instances, the solicitation documentation provided did not contain

a request for name of employer. Other errors resulted from

instances where the information was obtained but not disclosed.

During the course of the audit, the Audit staff

advised the Compliance Fund of the high error rate. The

Compliance Fund was again advised of this matter at the exit

conference but did not provide an explanation.

SUbsequent to the exit conference, the Compliance

Fund provided a form letter requesting occupation and name of

employer along with a listing of names to whom the letter was

reportedly sent. The letter is dated July 19, 1993. It is noted

that approximately 85\ of the names of the individuals included in

the sample errors are contained on the listing provided. The

Compliance Fund states that "amended reports reflecting this

information will be filed in the near future." The Audit staff

was not made aware of this mailing during fieldwork and was not

offered the opportunity to review any responses.

Recommendation 11

The Audit staff recommends that·.within 30 calendar days of

service of this report, the Compliance Fund submit documentation

to demonstrate that best efforts were utilized and file Schedules

A-P to disclose occupation and name of employer information

obtained as a result of the July 19, 1993 mailing or contained in

Compliance Fund files but not previously disclosed.

2. Funds from Non-Allowable Sources

Section 9003.3(a)(1)(i), (ii) and (iii) of Title 11

of the Code of Federal Regulations states that a major party candidate may accept contributions to a legal and accounting compliance fund if such contributions are received and disbursed

in accordance with this section. A legal and accounting

compliance fund may be established by such candidate prior to

being nominated or selected as the candidate of a political party for the office of President or Vice President of the United

States. Contributions to this fund shall be subject to the

limitations and prohibitions of 11 CFR parts 110, 114 and 1151 Ui'J.~ ,

=
L0

6

Further, funds received during the matching payment period that are remaining in a candidate's.primary election

account, which funds are in exce~s of any amount needed to pay remaining primary expenses or any amount required to be reimbursed

to the Presidential Primary Hatching Payment Account under 11 crR

9038.2, may be transferred to the legal and accounting compliance fund without regard to the contrlbution limitations and used for

any purpose permitted under this section.

Finally, contributions t~t are made after the

beginning of the expenditure report period but which are . designated for the primary election, and contributions that exceed

the contributor's limit for the primary election, may be

redesignated for the legal and accounting compliance fund and transfe~red to or deposited in such fund if the candidate obtains

the contributor's redesignation in accordance with 11 crR 110.1.

Contributions that do not exceed the contributor's limit for the

primary election may be redesignated and deposited in the legal and accounting compliance fund only if the contributions represent funds in excess of any amount needed to _pay remaining primary expenses~ the redesignations are received within 60 days of the - ---- -Trea-surer's-rece-ip1;-of--the-contributions; the-requi-rements-of~1l

crR 1l0.1(b)(5) and (1) regarding redesignations are satisfied;

and the contributions have not been submitted for matching.

a. Fundraising Expenses Paid by the Primary Committee

The Compliance Fund and the Primary Committee

utilized a common vendor for fundraising purposes for a period of

time. The Compliance Fund sent two fundraising letters to donors

of the Primary Committee. The mailings included letters that

dealt with general election issues and requested a contribution to

the Compliance Fund. One of these mailings contained a photo of

the Presidential and Vice Presidential candidates on the podium at

the convention which had been promised in an earlier fundraising appeal by the Primary Committee. The other mailing contained a

lapel pin which had also been promised in an earlier mailing of

the Primary Committee. Therefore, the mailings served a function

for both the Compliance Fund and the Primary Committee. The cost

of these mailings was allocated with the primary Committee paying 85\ of the cost and the Compliance Fund paying the remaining 15\.

Doc~~entation was not available detailing how

the allocation was determined. It is our opinion that a 50\

allocation between the two committees would be more appropriate given the dual function of the mailings. According to the

invoices for these mailings, the total costs were $371,855. Of

these costs, the Primary Committee paid $316,751. If a 50\

allocation is used, each committee should have paid $185,928.

Based on this allocation, the Compliance Fund owes the Primary

Committee $130,823 ($316,751 - $185,928). I

~:~~C~- c,
7

The Compliance Fund representatives were made

aware of this matter at the exit conference. Subsequently, the

Compliance Fund provided a letter from the vendor dated October

27, 1993. This letter states, in part, that "(t)his allocation

relates to two mailings made during the months August and

September, 1992, as to which the total cost of producing the

mailings were allocated by us based on the respective costs of the

fulfillment information and materials relating to the primary campaign as compared to the cost of the components related to

GELAC (Compliance Fund) fundraising." However, this response does

not contain any documentation with which to verify that the

respective costs resulted in this 85\ and 15\ split.

The letter from the vendor also states that

the allocation was done by the vendor "in accordance with standard

accounting practice with regard to allocated costs in accordance

with the principles set forth by the American Institute of

Certified Public Accountants Statement of Position 87-2, relating

to accounting for joint costs of informational materials and

activities that include a fundraising appeal." The statement

explains that it does not specify any allocation method but only ·--provides-guidance-concernin9_~1lJ!rl.an allocation is appropriate. - ----- ----. - - . After reviewing this publication, it 1-5 -the-Audit--staff-< s--opinionjthat the guidance, to the extent that it is relevant to this

situation, could be interpreted to suggest that the Compliance Fund should pay the entire amount.

(1) FECA matters are not governed (2) the purpose of the publication

nature of the guidance contained

dual purpose of the mailing, we

50\ allocation is appropriate.

which the

expenses.

is owed to

Another project, performed by this vendor at a

cost of $69,660, was paid entirely by the Primary Committee. This

project was for a compilation of contributor information to create

a "Master File." Over 90\ of the cost was incurred on invoices

dated after September 16, 1992 according to available records.

The Primary Committee had utilized another vendor to handle the

majority of its receipts processing and to provide the Audit staff

with the required computer tape containing the contributions and

disbursements for the Primary Committee. Also, Compliance Fund

representatives requested and received a magnetic copy of that

information from the Commission. Based on this information, the

Audit staff is of the opinion that the entire amount should have

been paid by the Compliance Fund.

The Audit staff identified another vendor to

Primary Committee paid $1,720 to defray Compliance Fund

The Compliance Fund has acknowledged that this amount

the Primary Committee by the Compliance Fund.

Given that:

by this accounting publication, is not Wholly on point, (3) the

in the pUblication, and (4) the

are still of the opinion that a

Vi
tn

8

Therefore, it is our opinion that the Primary

Committee has paid a total of S202,203 (S130,823 + S69,660 +

S1,720) in expenses which should have been paid by the Compliance

Fund.

Recommendation 12

The Audit staff recommends that within 30 calendar days of

service of this report, the Compliance Fund provide documentation

to demonstrate that the amounts paid by each committee were

appropriate. Absent such a demonstration, the Audit staff

recommends that the Compliance Fund reimburse 5202,203 to the

Clinton for President Committee and provide evidence of such

reimbursement (i.e., copies of the front and back of the canceled

check) •

b. Funds Redesignated from the Primary Committee

The Compliance Fund received S2,444,557 in

contributions which were redesignated and transferred from the

Primary Committee. The Regulations, as noted above, require that

contributions designated for the Primary Committee and made after

the beginning of the expenditure report period cannot be -~r-ans-feI"I'ed--to-the-Compliance_Fund unles s_the._contribution_is~in_

excess of the contributor's primary limitation~ or, the

contributions are in excess of funds needed by the Primary Committee to pay remaining expenses. The primary Committee did

not have sufficient funds to pay expenses until receipt of a

Matching Fund payment on September 2, 1992.

The amount transferred from the Primary

Committee to the Compliance Fund included 51,519,049 in

contributions received from the Compliance Fund's inception through September 2, 1992. Only 5222,532 of these transferred

contributions represented either excessive contributions to the

Primary Committee or contributions intended for the general election~ 566,846 prior to July 16, 1992 and $155,686 subsequent

to July 16, 1992.

Therefore, the Compliance Fund received

$1,296,517 ($1,519,049 - $222,532) in impermissible funds from the

Primary Committee.

Subsequent to September 2, 1992, the Primary

committee received approximately $1,025,000 in contributions. Of

this amount, approximately $924,000 was redesignated to the

compliance Fund properly under 11 eFR 59003.3(a)(iii) and is not

questioned at this time.

In response to the Primary Committee's exit

conference, Compliance Fund representatives stated that they dispute the auditors' assertion that these contributions could not

be redesignated to the Compliance Fund. They further state that

this assertion is contrary to law. The contributors properly and

~:cy oflcr
9

legally designated those contributions in writing for the

Complianoe Fund pursuant to 11 eFR SllO.l!/, and the auditors

cannot prohibit the Primary Committee from maintaining those

contributions in the Compliance Tund.

With respect to the propriety of the

redesignation, 11 erR Sl10.1 is 'not the relevant regulation. That

regulation specifies the procedures and time limitations that

apply to a redesignation when aredesignation is appropriate. As

stated above, 11 eFR S9003.3(al(ll(iii)eclearly states that the

redesignations pursued by the Committee were not permissible. That section states that only if no remaining primary expenses are

to be paid, may primary contributions not in exces~ of the

contributor's limit be redesignated to the compliance fund. The defini~ion of remaining primary expenses is clearly stated in 11

CFR S9034.1(bl which speaks to remaining matching fund

entitlement. That definition states that remaining net

outstanding campaign obligations is the candidate's net

outstanding campaign obligations on the date of ineligibility less

"the sum of the contributions received on or after the date of

ineligibility plus matching funds received on or after the date of

ineligibHi ty.'!

The definition and the calculation of

remaining entitlement to which the Primary Committee objects enjoys a long and consistent history in Commission regulation and

practice. This interpretation dates to a December 1976 memorandum

to the Commission proposing an amendment to then section

134.3(c)(2) of the Commission's regulations. This proposed regulation stated that "a candidate shall be entitled to no

further matching funds if, at time of any submission for

certification, the total contributions and matching funds received

after the ineligibility date equals or exceeds the net obligation outstanding on the date of ineligibility."

The 1979 Explanation and Justification of 11

eFR 59034.1 explains that for candidates who have net outstanding campaign obligations on the date of ineligibility, "{b]asically, these candidates are entitled to payments only if the private contributions received between the date of ineligibility and the

date of submission are not sufficient to discharge the net debt. ,. A simplified example of the calculation presented above follows

this explanation. Finally, it is explained that this regulation "furthers the policy that the candidate should use private contributions to discharge campaign obligations wherever

possible." The 1983 Explanation and Justification for the same

provision states that the 'section had "been revised to state that

to receive matching funds after the date of ineligibility, , . candidates must have net outstanding campaign obligations as of

the date of payment rather than the date of submission. Thus, if

4/ Although the Compliance Fund cited 11 CrR 5110.2, the Audit

staff presumes the Compliance Fund meant 11 CFR jl.~O.1. / 4W.=~_('---"'5__
10

the candidate's financial position changed between the date of his

or her submission for matching funds and the date of payment reducing the candidate's net outstanding campaign obligations, that candidate's entitlement would be reduced accordingly."- This

revision reinforces the requirement that private contributions

received must be applied to obligations prior to the receipt of

further matching funds. The 1991 Explanation and Justification

for $9003.3 states that "contributions redesignated must represent funds in excess of any amount needed to pay remaining primary

expenses. If this requirement is not met, the committee would

have to make a transfer back to the primary account to cover such

expenses."

_ Finally, each edition of the Commission's

Financial and Compliance Manual For Presidential Primary Candidates Receiving Public Financing, beginning with the first in

1979, has, in some form provided, an explanation and example of

the calculation shown above.

It is the opinion of the Audit staff that the

Primary Committee's position is inconsistent with the plain meaning of the Commission's Regulations concerning post .... inE!li9i.biUtLQ.~t_E!_mat_~hingfund entitlement as well as the l:..ong _ established Commission pract-ice--ancf pol-iCY-.-- --- - ---------

Recommendation 13

The Audit staff recommends that within 30 calendar days of

service of this report, the Compliance Fund provide documentation

and any relevant comments to demonstrate that the above mentioned

transfers were permissible. Absent sucb a demonstration, the

Audit staff recommends that the Compliance Fund pay $1,296,517 to

the Primary Committee.

B. Clinton/Gore '92 Committee

1. Apparent PrOhibited Contribution

Sections 116.3(b) and (C) of Title 11 of the Code

of Federal Regulations state that a corporation in its capacity as

a commercial vendor may extend credit to a candidate, a political committee or another person on behalf of a candidate or political committee provided that the credit is extended in the ordinary

course of the corporation's business and the terms are

substantially similar to extensions of credit to nonpolitical debtors that are of similar risk and size of obligation. Further,

in determining whether credit was extended in the ordinary course

of business, the Commission will consider whether the commercial

vendor followed its established procedures and its past practice in approving the extension of credit; whether the commercial

vendor received prompt payment in full if it previously extended

credit to the same candidate or political committee; and whether

the extension of credit conformed to the usual and normal practice

in the commercial vendor'S trade or industry. / J.T1'.1C~T _ ...__~_

P~e 10ot-io
c

11

The Audit staff reviewed an invoice from Chambers

Associates, Inc., in the amount of S117,316 for professional fees

and expenses. This invoice stated that it was "for services

performed and costs incurred prior to the November 1992 General

Election." The General Committee paid this invoice on March 19,

1993. It is also noted that this is the only payment made to this

vendor by the General Committee.

In response to the exit conference, the Gen~ral

Committee provided more invoices from the vandor to document in

more detail the S117,316 in expenses. According to these

invoices, expenses were incurred beginning in August and continued

until the time of the election. The General Committee also states

that "Chambers Associates provided services in OCtober related to

economic issues. The original invoice was submitted to someone on

the campaign staff in December or January but was misplaced. When

the ommission [sic) was noted, the Committee requested that the

vendor provide another invoice which was received and paid in

Karch." However, there is still no documentation from the vendor

to demonstrate when this amount was originally billed and any -·.subsequentbillings.or..eU()n:,s.tocollect .th~S amount.

Based upon the available information, it is our

0p1n1on that the extension of credit for this. amount and this

length of time does not appear to be in the ordinary course of

business and results in a prohibited contribution pursuant to 11

CFR 5116.3.

Recommendation 14

The Audit staff recommends that within 30 calendar days of

service of this report, the General Committee provide

documentation, to include but not be limited to, statements and

invoices from the vendor detailing all billings and efforts to

collect this amount; and explanations to demonstrate that the

extension of credit from this vendor was in the ordinary course of

business and does not represent a prohibited contribution pursuant

to 11 crR S116.3. The infonaation provided should include

examples of other customers or clients of siailar size and risk I.... ;.

for which similar services have been provided and similar billing La

arrangements have been used. Also, information concerning billing r

policies for similar clients and work, advance payment policies, debt collection policies, and billing cycles should be in~lUded~

2. Itemization of Offsets to Operating Expenditures

Section 434(b)(3)(F) of Title 2 of the United

States Code requires that each report include the identification

of each person who provides a rebate, refund, or other offset to

operating expenditures to the reporting committee in an aggregate

amount or value in excess of 5200 within the calendar year,

together with the date and amount of such receipt. Section

431(13) of Title 2 of the United States Code de~~H~Jiin partrthe
12

term n identification" to be the name and mailing address of such

person. Section 431(11) of Title 2 of the United States Code

defines, In part, the term "person" to include an individual,

partnership, committee, association, corporation, labor

organization, or any other organization or group of persons.

The General Committee's receipt records ~ere

reviewed by the Audit staff to determine ~hether offsets to

operating expenditures requiring itemization were disclosed

properly. The Audit staff noted problems, ~ith respect to the

disclosure of receipts from Worldwide Travel, Inc. ("World~ide").

The General Committee utilized Worldwide to handle billings and

receipts relative to press and U.S. Secret Service ~ravel.· As World~ide received moneys, it ~ould deduct credit card fees and a

commission for its services. The net amount ~ould then be

transferred to the General Committee and reported on its

disclosure reports as a receipt from Worldwide. There ~ere no

corresponding entries detailing the press organizations ~ho

actually paid for the travel. In addition, credit card fees and

the fee Charged by- World~ide for its services were not reported as

a related disbursement.

- ---------

When apprised of thiS -at the exit conference, a

General Committee official stated she thought that they had

received Commission guidance concerning this but said she would

have to-check before she could respond.

Subsequent to the exit conference, the General

Committee again states that "Committee staff was advised by

someone at the FEC that its methods of reporting receipts for

press travel from World~ide complied with the reporting requirements of FECA." The General Committee also responds that

its "method of reporting is consistent with the reporting requirements applicable when refunds and payments are received by

a committee through a commercial vendor."

It is the Audit staff'-s opinion that, since World~ide acted only as a billing/collection service, the amounts

received from each press agency and the Secret Service should be

disclosed on Schedules A-P as a memo entry to support each amount

received from Worldwide. In addition, adjustments for the credit

card fees deducted and commission charged by Worldwide should be

disclosed as memo entries on Schedule B-P.

Recommendation 15

The Audit staff recommends that within 30 calendar days of

service of this report, the General Committee file amended

Schedules A-P and B-P to disclose the aforementioned offsets to

expenditures, credit card fees, and commissions.

l'I'TACIDlEHT /

Page 1t9-----:;~-2.,.4~~
c

13

3. Reporting of Debts and Obligations

Section 434(b)(8) of Title 2 of the United States

Code states that each report shall disclose the amount and nature

of outstanding .debts and obligations o~ed by or to such political committee; and ~here such debts and obligations are settled for

less than their reported amount or value, a statement as to the

circumstances and conditions under which such debts or obligations ~ere extinguished and the consideration therefor.

Section 104.11 of Title 11 o~ the Code of Federal

Regulations states, in part, that debts and Obligations owed by or

to a political committee which remain outstanding shall be

continuously reported until extinguished. In addition, a debt,

obligation, or written promise to make an expenditure, the amount

of which is $500 or less, shall be reported as of the time payment is made or no later than 60 days after such obligation is

incurred, whichever comes first. Any loan, debt or obligation, the amount of which is over $500, shall be reported as of the date

on which the debt or obligation is incurred.

----- - --Frolll--theAuditstaff's reY'iew of_s_elected . ' .. disbursements, we determined that the General Committee--did -not

materially disclose its debts and obligations on Schedule D-P.

Our review of General Committee invoices and relateq payments indicated outstanding debts and obligations totaling Sl,20',730

which were not reported as required on the General Committee's

disclosure reports.

At the exit conference, General Committee

representatives were provided photocopies of schedules detailing

these debts and obligations. General Committee officials prOVided

no explanations for these omissions.

Subsequent to the exit conference, documentation

submitted by the General Committee states that -the Committee

reported its debts and obligations as of the time the check

request was approved and received in the accounting department. The Committee believes that its method of reporting debts was in

full compliance with the reporting requirements.- In addition,

the General Committee provided a detailed schedule listing the

dates on ~hich the invoices were recorded.

The Audit staff finds the General Committe~'s

response to be without merit. The Regulation determines when a

debt shall be reported. The date the obligation is incurred is

relevant, not the date at which a committee records an obligation.

Recommendation 16

The Audit staff recommends that within 30 calendar days of

service of this report, the General Committee file amended

Schedules D-P to disclose the aforementioned debts and I

obligations. ~~_~_~~~_

'P&.cre , i ,... I .::5
" '

.,..., w,

C'.

14

III. Findings and Recommendations - Repayment Matters

A. Apparent Prohibited Contributions

Section 9003{b){2) of Title 26 of the United States

Code provides that in order to be eligible to receive any payments under section 9006, the candidate of a major party in a

presidential election shall certify to the Commission, under

penalty of perjury, that no cont:ibutions to defray qualified campaign expenses have been or wlll be accepted by such candidate

or any of their authorized committees except to the extent

necessary to make up any deficiency in payments received from the

fund.

Section 9007(b)(3) of Title 26 of the United States

Code states that if the Commission determines that the eligible candidates of a major party or any authorized committee of such

candidates accepted contributions (other than contributions to

make up deficiencies in payments) to defray qualified campaign

expenses, it shall notify such candidate of the amount of the ..... - -----contributions- so-accepted( -and such candidates- shall- pay- to-the--

Secretary of the Treasury an amount equal to such amount.

Section 441b(a) of Title 2 of the United States

Code states, in relevant part, that it is unlawful for any corporation to make a contribution or expenditure in connection

with any election for federal office or for any candidate,

political committee, or other person knowingly to accept or

receive any contribution prohibited by this section, or any

officer or any director of any corporation to consent to any contribution or expenditure by the corporation prohibited by this

section •

In addition, Section iOO.7(a)(1) of Title 11 of the

Code of Federal Regulations states, in part, that the term

contribution includes a gift, advance or deposit of money or

anything of value made by any person for the purpose of

influencing any election for Federal office.

Section 100.7(a)(1)(iii)(A) of Title 11 of the Code

of Federal Regulations states that for purposes of 11 CFR

lOO.7{a)(1), the term -anything of value- includes all in-kind

contributions. Unless specifically exempted under 11 CFR

lOO.7(b), the provision of any goods or services without charge or

at a charge which is less then the usual and normal charge for

such goods or services is a contribution. Examples of such goods and services include, but are not limited to: securities,

facilities, equipment, supplies, personnel, advertising services,

membership lists, and mailing lists. If goods or services are

provided at less than the usual and normal charge, the amount of

~:N a/.J¥
15

the in-kind contribution is the difference between the usual and

normal charge for the goods or services at the time of the

contribution and the amount charged the political committee.

Further, 11 CFR 5100.7(a)(1)(iii)(8) defines, in

relevant part, "Usual and normal charge" for goods as the price of

those goods in the market from which they ordinarily would have

been purchased at the time of the contribution.

During the Audit staff's review of disbursements

and offsets to expenditures, we identified nine transactions which

appear to result in prohibited contributions to the General

Committee, The total of these apparent prohibited contributions

is $153,625 (see Attachment 12). A discussion of the

circumstances surrounding these transactions follows:

1. Donated Equipment

Included with invoices to support a payment to

a General Committee vendor were additional invoices which indicate

that the vendor donated sound equipment for use during a rehearsal

--for-a-press-conferenceto_be__held _il)_l\j:.lallt~_,J:;!!lJ_r"9!~~_ The_ stated

value of this donated equipment was $1,070. The General Commfttee---

was provided documentation relative to this matter during

fieldwork. The matter was also addressed at the exit conference.

Subsequent to the exit conference the General

Committee states, "as is customary practice for the company, the

equipment for the rehearsal was made available at no charge because it was not rented for that time."

The Audit staff is not aware of the customary

practice for providers of sound equipment. Absent a statement

from the vendor demonstrating that this was indeed customary

practice, it is our opinion that this transaction results in an

in-kind contribution of $1,070.

2. Payment Not Made by the General Committee

Upon reviewing documentation for payments to

the General Committee's vendors, the Audit staff identified a

payment credited to the General Committee'S account with Opinion

Research Calling which could not be associated with any payments

made by the General Committee. This vendor, along with GreenbergLake, handled polling for the General Committee. The vendor

provided an invoice summary which detailed charges and payments to

the General Committee's account. Included on this summary was a

$13,130 payment made on 10/14/92. The Audit staff could not

identify a related payment from General Committee bank accounts.

The matter was addressed at the exit conference.

Subsequent to the exit conference,

documentation provided by the General Committee states that -the

S13,130 came from Greenberg-Lake to pay for Nat~~~r.YJRll/1l9•..E _. '--,-C --'. Ie -
16

was paid for from funds they had received from Clinton/Gore

Generil account." Based on documentation reviewed, it is apparent that Greenberg-Lake and Opinion Research Calling worked together

on polls for the General Committee. The Audit staff reviewed

documentation from Greenberg-Lake which contained an invoice

summary for all, charges and payments related to the General

Committee. There is no indication on this summary that the

General Committee was billed relative to National Poll 119. As a

result, the documentation is still not available to demonstrate

that this payment came from Greenberg-Lake and/or the General

committee. .'

3. Deposits Credited to General Committee Bills

From various reviews conducted throughout the

audit, the Audit staff noted three deposits that were credited to

General Committee bills. The source(s) of the funds used to make

these deposits could not be identified or verified. The total of

these deposits is $28,325.

Two of these deposits involved phone companies. When reviewing refunds received by'the General --G~it-t.eerwe-notedthat - the -General--Committee-w,n--eredited-",itiia

$7,800 deposit made to one company and a $19,525 deposit to

another company. However, from our review of documentation

relative to these vendors, it appears that the'General Committee

did not make these deposits.

,

During the course of tbe campaign, the General

Committee entered into contracts with four media related vendors,

that called for consulting payments to be made on specific dates.

Prior to the last payment date, the General Committee entered into

amended media services agreements witb these four vendors. One of

the stated reasons for the amended agreements was that the

"Consultant and the Committee recognized that certain of the

,

The remaining deposit related to a vendor that

provided sound and staging to the General Committee.

Documentation from this vendor in support of a General Committee

payment contains a credit.for a $1,000 deposit which does not

appear to have ,been made by the General Committee. These matters

were presented at the exit conference.

Subsequent to the exit conference, the General

Committee provided no explanation or additional documentation

relative to the two phone companies. With respect to the other

vendor, the General Committee states that -tbe $1,000.00 bas been

paid with check 112577 issued on 10-8-93.- This response does not

explain the source of payment of the $1,000 deposit credited on

the original invoice from the vendor. Therefore, it still appears that a $1,000 payment was made to tbe vendor by someone other than

the General Committee.

4. Amended Contracts
C'

C-,

17.

services provided by Consultant were for the benefit of the

Oemocratie National Committee rather than the Committee." The

amended agreements further stated that the nemocratic National

Committee ("ONC") and the vendor'are entering into separate

contracts "with respect to that portion of the Consultant's

services to be provided to the ONC." The ONC did not report any

payments to these vendors as cootdinated party expenditures

pursuant to 2 U.S.C. S441a(d)(2)11. General Committee

representatives were questioned about these amendments during fieldwork. They provided no response ate that time.

At the exit conference, General Committe~

representatives explained that during the course of the election,

it became apparent that these vendors were also performing services for the ONe and that it was recognized that the ONC

should pay for part of the services. The Audit staff responded that more detail was needed to explain why part of the services

provided were the responsibility of the ONC and not of the General

Committee. The portions of the original amount contracted for,

which the General Committee did not pay, total $111,100.

__ Subsequent to the exit conference, the General

Committee-responded tnat---"tnese-contracts were amended-to -reflect

the services actually performed by the individuals who were also

working for the ONC. Their services for the ONC were on generic

democratic media." This does not provide any more detail than the

General Committee's response at the exit conference.

It is our opinion that, absent such

documentation to demonstrate that the services provided related to

the ONC, the General Committee has received contributions totaling

S111,100.

Recommendation 17

The Audit staff recommends that within 30 calendar days of

service of this report, the General Committee provide documentation to include but not be limited to the following:

•

•

With respect to subsection 1, a statement from

the vendor addressing this matter, and any relevant comments to demonstrate that it did

not receive an in-kind contribution totaling $1,070.

With respect to subsection 2, provide documentation and any relevant comments to

demonstrate that the payment is not a

contribution; document the $13,130 payment (to

51 The ONe reported that 510,014,544.24 of its $10,331,703 National

Party Limit for the 1992 Presidential Election had been expended

through June 30, 1993. l'l'TACEKEll'I I

/ '7'~_-A--)r:,...:r,-
18

include copy of the negotiated check); and to

explain the relationship between the vendors.

•

•

With respect to subsection 3, provide documentation and a statement from each vendor

documenting the source of these funds, and any relevant comments to demonstrate that the

items do not constitute contributions.

With respect to subsection 4, statements and

documentation from the ONC and the media

vendors demonstrating the services provided related to the ONe, and any relevant comments

to demonstrate that the amended contracts do

not result in a contribution.

o • Absent a demonstration that the above items

are not prohibited contributions, the Audit

staff will recommend that the Commission make

an initial determination the General Committee __ _ makt! _H ~~,62~ repayment to the U. S. Treasury pursuant to 26 U~S:C:-S9007(bH3)-.--- --------

B. Apparent Non-Qualified Campaign Expenses

Section 9002(11) of Title 26 of the United States

Code defines, in part, the term "qualified campaign expense" as an

expense incurred by the candidate of a political party for the

office of President, by the candidate of a political party for the

office of Vice President, by an authorized committee of the

candidates of a political party for the offices of President and

Vice President to further the election of either or both of such

candidates to such offices. In addition, neither the incurring

nor payment of such expense shall constitute a violation of any law of the United States or the State in which such expense is

incurred or paid.

Section 9007(b)(4) of Title 26 of the United States

Code states, in part, that if the Commission determines that any

amount of any payment made to the eligible candidates of a

political party was used for any purpose other than to defray the

qualified campaign expenses with respect to which such payment was

made, it shall notify such candidates of the amount so used, and

such candidates shall pay to the Secretary of the Treasury an

amount equal to such amount.

Section 9003.5(a) of Title 11 of the Code of

Federal Regulations states, in part, that each candidate shall

have the burden of proving that disbursements made by the

candidate or his or her authorized committee(s) are qualified

campaign expenses as defined in 11 erR 9002.11. d:zr

uucmn

Pap /8' __ at
19

Section 9007.2(b)(21 of Title 11 of the Code of

Federal Regulations states. in relevant part, that if the

Commission determines that any amount of any payment to an . eligible candidate from the presidential Election Campaign Fund

was used for purposes other than to defray qualified campaign

expenses, it will notify the candidate of the amount so used, and

such candidate shall pay to the United States Treasury an amount

equal to such amount.

1. Apparent Duplicate Payments

During our review of disbursements, the Audit

staff discovered expenses incurred by the General Committee which

appear to have been paid more than once by the General Committee.

We identified 27 such payments to 11 vendors totaling 521,614.

The General Committee was made aware of these items during the

course of audit fieldwork and at the exit conference.

Subsequent to the exit conference, the General

Committee provided additional documentation which demonstrated ... that-esomeof-t:.hese-payments_( a~~~_~1)~?_45) had subsequently been

refunded. Most of these refunds (about $8;9-07r·occ:urred-in~- .. September and OCtober of 1993, after the conclusion of audit

fieldwork.

There remains 12 payments to 4 vendors

totaling $8,669 which appear to be duplicate payments; the funds

have not been recovered (see Attachment 13)_ For some of these

payments, the General Committee has acknowledged that a duplicate

payment did occur and that refunds will be forthcoming_ For

others, the General Committee states that the payments were

applied to amounts outstanding. However, documentation has not

been provided to confirm this. If any of the funds are recovered

from the vendors or the documentation to demonstrate application of these amounts is provided, the amount subject to repayment will

be reduced accordingly. The amounts of duplicate payments recovered ($12,945) and outstanding ($8,669) are included on the

NOQCE as accounts receivable due from the respective vendors.

Recommendation IS

The Audit staff recommends that within 30 calendar days of

service of this report, the General Committee submit documentation

to demonstrate that apparent duplicate payments were either

applied to other invoices or have been recovered. Absent such a

demonstration, the Audit staff will recommend that the Commission

make an initial determination that the General Committee make a

repayment of $8,669 to the U.S. Treasury -pursuant··to··Z6 -U.S.C.

S9007(b)(4) •

J.TTA~ j__~_

Page -I..Z.- 19
,

In

20

2. Non-Campaign Related Activity

From our review of disbursements and the

associated documentation made available by the General Committee,

the Audit staff identified 16 disbursements totaling $87,077 which

appear to be for purposes other than to defray qualified campaign

expenses (see Attachment 14). . Of the 16 items, 8 disbursements totaling $70,295 were payments for rented equipment not returned or lost.

Included is a disbursement of S34,768 to Alamo Rent A Car

("Alamo") for two missing vehicles. One of these vehicles was

rented in Florida and the other in Texas.

In response to the exit conference, the

General Committee provided an explanation which detailed its

attempts to recover the vehicles. From this documentation, it

appears that the campaign staff who rented the vehicles allowed

them to be used by a number of persons and eventually lost track

of who had the vehicle. In both cases, the General Committee has

not been able to determine who last had possession of the

vehicles. Without this information, both Alamo and the General C~IllI'lIi.~~eeare_prlacludedfrom filing stolen vehicie reports with

the appropriate authorities-~ - Tne- othl!r-seven-paymentswere-foritems such as computers and communication devices which had been

lost. The General Committee also stated in response to the exit

conference that it waS self-insured and that it was cheaper to pay for lost equipment than to maintain insurance.

The remaining 8 items do not appear related to

the general campaign. One is a payment of $350 for business cards

invoiced after the close of the expenditure report period and

another is a $4,351 payment for installation of phones in New

Jersey in 1993. Three payments totaling $1,100 appear to be

activities related to the post-election transition and two

payments totaling $2,251 were for the travel expenses of

individuals attending the inauguration. In response to the exit

conference, the General Committee stated that it has reviewed

these payments and has requested reimbursement from the

appropriate entities.

The'remaining item was a $8,730 payment in

February, 1993, to Wright, Lindsey' Jennings. This payment was

for retainer services and expenses incurred by the firm. The

description on the invoices was for "Incorporation , General

Advice." The firm provided invoices to support the incurrence of

the expenses. Two of the expenses were to "file Articles of

Incorporation for Little Rock '92 Election Bost Committee, Inc •• " This is the only documentation available to support the nature of

the incorporation and general advice. The Little Rock '92

Election Host Committee is not affiliated with the General

Committee, but is a corporation registered with the Arkansas

.1TTA~- / -

p~e...da-~
21

Secretary of State. Therefore, it appears, based on the

documentation made available, this payment was not made to defray qualified campaign expenses.

Recommendation 19

The Audit staff recommends that within 30 calendar days of

service of this report, the General Committee submit documentation

which demonstrates that the expenses noted above are qualified campaign expenses. This documentation should include, but not be

limited to, information on factors such as the relative value of

the lost equipment and methods employed by the General Committee

to safeguard the equipment. Absent such a demonstration, the

Audit staff will recommend that the Commission make an initial

determination that the General Committee make a repayment of

$87,077 to the U.S. Treasury pursuant to 26 U.S.C. S9007(b)(4).

C. Expenditure Limitation

Sections 441a(b)(1)(B) and (C) of Title 2 of the United

States Code state, in relevant part, that no candidate for the -. ---- of-f-iceofPI"esident_oL~hl!Unit!!_d_§t;~tes who is eligible under

section 9003 of title 26 to receive paymelit$-frolll-tlie--Sect'et;a~ry--of-----­

the Treasury may make expenditures in excess of $20,000,000 as

adjusted for the increases in the Consumer Price Index.

Section 9004(a)(1) of Title 26 of the United States Code

states that the eligible candidates of each major party in a

presidential election shall be entitled to equal payments under

section 9006 in an amount which in the aggregate shall not exceed

the expenditure limitations applicable to such candidates under

Section 441a(b)(1)(B) of Title 2.

Section 9007(b)(2) of Title 26 of the United States Code

states that if the Commission determines that the eligible candidates of a political party and their authorized committees

incurred qualified campaign expenses in excess of the aggregate

payments to which the eligible candidates of a major party were

entitled under section 9004, it shall notify such candidates of

the amount of such excess and such candidates shall pay to the

Secretary of the Treasury an amount equal to such amount.

Section 9004.4(a) of Title 11 of the Code of Federal

Regulations limits the use of such payments to expenditures for

the following purposes: to defray qualified campaign expenses; t_o . repay loans that meet the requirements of 11 CFR 100.7(a)(1) or

100.7(b)(11) or to otherwise restore funds used to defray qualified campaign expenses; and to restore funds in accordance

with 11 crR 9003.4 for qualified campaign expenses incurred prior

to the beginning of the expenditure report period. ~\I

Section 9003.4(a) of Title 11 of the Code of Federal i~ . Regulations states, in relevant part, that a candidate may incur

expenditures before the beginning of the expenditure report period5 l
'I)

22

if such expenditures ~re for property, services or facilities

which are to be used 1n connection with his or her general election campaign. Examples given include expenditures fo(

establishing financial accounting systems, organizational planning and polling.

Further, 11 eFR S9003.4(b), in relevant part, limits the

sources of funds used to make expenditures prior to the

expenditure report period to: "a candidate obtaining a loan which

meets the requirements for loans in the ordinary course of

business; borrowing from his or her legal and accounting

compliance fund; use of the candidate's personal funds up to his

or her $50,000 limit; and, for a candidate who has received

federal funding under 11 CFR part 9031 et seq., borrowing from his

or her primary election co~~ittee{s} an amount not to exceed the

residual balance projected to remain in the candidate's primary account(s} on the basis of the formula set forth at 11 eFR

903S.3(c).

Section 9004.9{d}(1) of Title 11 of the Code of Federal

Regulations states that the term capital asset means any property used in the operation of the campaign whose purchase price --------- ---exc-ee-cre-d----S200-0--when---acquired---by-the---committ-ee. - -The---fair---ma-rket-------

value of capital assets may be considered to be the total original

cost of such items when acquired less 40\ to account for

depreciation.

Finally, 11 CFR S900J.3{a)(2)(ii) provides, in relevant

part, that expenditures for computer services, a portion of which

are related to ensuring compliance with Title 2 and Chapter 9S of

Title 26, initially paid from the candidate's federal fund account

may later be reimbursed by the compliance fund. A candidate may

use contributions to the compliance fund to reimburse his or her

federal fund account an amount equal to 70\ of the costs (other

than payroll) associated with computer services. Such costs

include but are not limited to rental and maintenance of computer equipment, data entry services not performed by committee

personnel, and related supplies.

The expenditure limitation for the 1992 general election

for the office of President of the United States is S55,240,OOO.

Based on our reconciliation of the General Committee's

bank activity to its reported activity from its inception through

June 30 1993, the Audit staff determined that the General

Committee disbursed S63,684,037. From this figure the Audit staff

deducted loan repayments (S125,OOO), offsets to operating expenditures ($6,446,645) and a refund from the Compliance Fund

(S1,900,000) for compliance-related expenditures to arrive at

operating expenditures subject to the limitation of $55,212,392.

In addition, the Audit staff determined that, with

respect to our analysis of expenditures subject to the limitation,

the following additional adjustments are necessaryiTTA~ / _

I) ') _~ _'J~
2.

23

1. Amount Due to the General Committee from

the Pn.mary COnUllJ.ttee ,

The Audit staff has included as an accounts

receivable 539,104 owed to the General Committee by the primary Committee.

This amount includes payments by the General

Committee for: a reimbursement ($2,255) to Julia Payne for her

convention-related expenses; an overpayment ($7,402) of payroll

taxes applied t~ amounts owed by the Primary Committee; an

expenditure ($7,565) to Manatt • Phelps for legal services

provided to the Primary Committee; Primary Committee payroll taxes

($354); and, AT&T telephone services relative to the Primary Committee (521,528). ,

At the exit conference, General Committee

representatives had limited comments, and stated they would have

no questions until they had reviewed our documentation. The Audit

staff has not received any documentation in response to these

items.

Amount due the Primary CommIttee from--'"

the General committee for Payment of General

Election Related Expenses

During the Audit staff's review of the Primary Committee's vendor files, numerous disbursements made by the

Primary Committee were found that appear to be for the benefit of

the general election campaign. ,These expenses are grouped into

those for equipment and facilities: polling and direct mail: media

services; and miscellaneous.

a. Equipment and Facilities

Near the end of May, 1992, the primary Committee began moving into new office space. It was this

location that the General Committee and Compliance Fund used as

their campaign headquarters during the general election campaign. The new location provided approximately three times the floor

space as the location used during the primary campaign.

As part of the move to their new

location, the Primary Committee paid I-K Electric Company $79,808

for various wiring projects. The invoices were paid between July 30 and September 2, 1992, and covered a number of projects. For

example the invoices contained notations such as -INSTALL DATA

CABLING NETWORK FOR NEW HEADQUARTERS (GAZETTE BLDG.) FOR 150 WORK

STATION LOCATIONS·, "PROVIDE AND INSTALL LANNET DATA NETWORK

ELECTRONICS FOR NEW NETWORK" and "INSTALL VOICE CABLING FOR 55

TELEPHONE LOCATIONS AND TERMINATE AS DIRECTED BY ANDY AULTZ.-

Although all of the invoices that contain the dates of the work

uur:ma~.I----:~_ p.,. ~;.. P143
c"-

24

indicate that it was completed by July 16, 1992, it is apparent that such services were in preparation for the general election

campaign.6/

During the primary election period, the

Primary Committee'S records reflect the purchase of only small

amounts of computer equipment. Instead, most equipment was

leased. Also, the Primary Committee contracted with a Washington, D.C. firm for computer services. The firm prepared matching funds

submissions including computer tapes, disclosure reports, and

provided the computer tapes required for the audit. The Primary Committee had a computer terminal linked with the vendor. It does

not appear that the Primary Committee's computer files were loaded

from the vendor's system to the Primary Committee's computer

system until 1993. During the audit of the primary Committee,

copies of the computer files were obtained by the Audit Division

directly from the vendor. Further, during audit fieldwork, the

General Committee requested and was provided copies of the

computer tapes that the vendor supplied to the Commission.

Beginning at the end of May, 1992, the

Primary Committee purchased a large amount of computer equipment, _both_.personal.computers _and_lLlarger__system._In_most_cases ... _~o,_. _ depreciation allowance was taken and the computer equipment was

then sold to the General Committee at 60\ of the purchase price,

net of sales tax.

Between Kay 28 and July 15, 1992, the

Primary Committee purchased 50 personal computers, software, and

supplies from The Future Now, Inc.. Between June 1, and August 9,

1992, the Primary Committee paid The Future Row, Inc. S118,~42.

The General Committee purchased this equipment for 60\ of the

original cost, less sales tax.

The same vendor was paid S11,676 for

other equipment invoiced between June 8 and July 15, 1992 with

$10,123 of the total invoiced and shipped on July 15, 1992, the

Candidate'S date of ineligibility. None of this equipment was

included among the items sold to the General Committee.

As stated above, the Primary Committee

purchased a larger computer system. A July 13, 1992 letter to the

"Gov. Clinton Election Campaign" states that "The Clinton campaign contracted with ICL to provide a comprehensive system and software

on Hay 28, 1992. !eL delivered and installed the system en June

25th. Between these two occurrences, ICL loaned the campaign a

Power 6/32 system to funC"tion ~s an interim solution." The letter

goes on to explain that ICL personnel visited campaign headquarters to provide training and expedite conversion to the

new system.

6/ Certain electrical work and data

To through July 16, 1992.

installation occurred July

~TTAC~~ C. /

l'age Qo£ 7 C)~ 51..,
25

The majority of the invoices for this

computer system were dated June 24, 1992. In total, the vendor

was paid 5272,460 in two installments on August 10 and 21, 1992.

Again, the General Committee paid the Primary Committee 60\ of

this original cost, less sales tax.

The Primary Committee also purchased

computer equipment from W.P. Halone. The Primary Committee paid a

5104,175 invoice dated June 30, 1992 on August 25, 1992. As with

the other equipment purchased from the Prim4ry Committee, the

General Committee paid 60\ of the original cost, less sales tax.

In addition, W.P. Malone was paid 533 260

on August 25, and November 9, 1992 for programming services and

software support and consulting for moving the computer operation

to the Gazette Building. The invoices reflect dates up to and

including July 16, 1992. None of the amounts were re~ursed by the General Committee.

In response to the exit conference ----disc\rs1iionof this-matter,- the-Primary CO_lDJIlj.~tee submitted

additional information. The Primary Committee-oDject!> to-ene'--

Audit staff characterization of these payments as general election

expenses. According to the Primary Committee; the ~xpenses for a

new computer syst~ were incurred well before the end of "the

primary and were essential tQ the smooth operation of the daily responsibilities. The primary Committee states that the initial

computer system was inadequate for the Primary Committee'S needs

in the early months of 1992. The system was unable to accommodate

the Primary Committee's ~xpanding database and volume of

correspondence, as well as to accommodate the Primary Committee'S

delegate tracking and communications.

pe

~8,~ , • III - .....

She continues that after a thorough

evaluation of the systems available, the Primary Committee

purchased a comprehensive computer system and software on May

The primary Committee included a

memorandum from the Director of Computer Operations. She stated

that during the early months of the spring of 1992, the initial

system used by the Primary Committee could not meet the

Committee'S increased demands. "The initial system could not . accommodate the increased number of users. It would not allow the

Committee to link its personal computers with the network. There

were major time lags, often Amounting to two days, in the

retrieval of information. BaCK-Up of the Committee's data

required four to five days. This prolonged back-up proc~ss

compromised the integrity of the Committee's information, As

demands on the system increased, there was also an increase in

computer equipment failure. In addition, the system's limited

resources were strained with mailings of S,OOO to 6,000 pieces day. Furthermore, the system was not able to accommodate the

Committee's extensive delegate work.-

c.

tJI
L·

In

26

1992 from IeL, Inc. They also used a programming consultant from

W.P. Malone who helped design software, hardware and networking

packages. The temporary system was installed on May 30, 1992 and

a pennane.nt system was installed less than one month later. "When

a customer purchases a computer system it is the normal course of

business that the computer company supplies the customer with a

temporary system at time of purchase until the system purchased is

ready." In addition the Primary Committee purchased a software

maintenance contract, and equipment from W.P. Malone and personal

computers and software from Future Now in connection with the new

system. It was also necessary for I-K Electric to install new

wiring to accommodate the new system. T~e Audit staff notes the

primary Committee originally leased its computer system from W.P.

Malone. Invoices associated with the lease suggest that the'.

leased system was the same model as the system loaned by ICL, Inc.

as an "interim solution." It is not known if it was the same

computer system and was obtained through W.P. Malone. Further,

the equipment purchased from W.P. Malone at the time the new

system was acquired was equipment that the Committee had leased up

to that time.

The total amount paid for computer equipment and related services described above is $540,313 - e~G-I-uding -I-K-Electric. -Civen_that:(a )_the_PriD!ary__COllllllit_t~t!! . contracted with a Washington, D.C. firm for much of its computer work, (b) leased the majority of its computer equipment, and (C)

the purchases were not made and the temporary system not installed

until nearly all primaries were over, with the permanent system

not installed until well after the last primary and approximately

two weeks before the convention, it is apparent that this

equipment was purchased for use in the general election.

Therefore, the entire amount is considered to be general election

expenses. The General Committee paid the primary Committee

5285,923 for the computer equipment, leaving a balance due of

$254,390 ($540,313 - $285,923), plus $79,808 for wiring.

In addition to the above the Primary Committee paid the entire amount of the rent for July 1992. Fifty

percent of the amount, or $12,500, should be reimbursed by the

General Committee.

b. polling

The Primary Committee conducted a number

of opinion polls between mid-June 1992 And the convention. The

Primary Co~~ittee paid two firms, Greenberg-Lake and Opinion Research Calling, for work in connection with these polls. The

invoices that could be associated with these polls indicated

Greenberg-Lake was paid $108,621 including $37,500 in consulting and $12,733 in travel, and are treated as general election

expenses. In addition, Opinion Research Calling was paid $93,904.

Four of the polls were identified on invoices as national polls and copies of the scripts reviewed by the Audit staff showed that

nearly all of the substantive questions dealt with the ~~en three

ATTA~L·. Page -.L\# c~ :;;L~_
0.

27

candidates in the general election. The remaining polls were

referred to as Convention polls and were conducted during the

Democratic National Convention. As with the national polls the

questions are general election in nature. -

In response to the Audit staff

presentation in the exit conference, the Primary Committee argues that the Audit Division's position that these are general election

expenditures is without legal and factual basis. The national and

convention polls were conducted in order to ensure delegate

support for the candidate. The Audit staff', position that these

polls conducted in June and July were for the purpose of

influencing the general election is inconsistent with FEC

regulations. Under 11 CFR 5106.4 polls decrease in value and are

only worth 50\ after 1S days.

The Primary Committee also submitted a

memorandum from the Executive Director of Greenberg Research Inc.

dated November 8, 1993. According to the memo the majority of the

national surveys tested the viability of different running mates

and whether the delegates would support the potential running mates~ -_'1'he_state__suryJi!ys~e_reused to maintain delegate support in those states. The convention- tra-i::kincrmonitored -supportand-------

was used for the delegates and state party chairs to maintain

delegate support.

ouring the Audit staff's review of the 4

National Surveys, which were comprised of at least SO questions each, it was noted that the questions related to comparisons between the general election candidates and to various issues.

Only 2 of the scripts contained a question (one) about

vice-presidential candidates. The Primary Committee's argument that the timing of some polls is such that their value would be

significantly diminished before the date of nomination is not

persuasive. It should be noted that one of the types of

pre-expenditure report period expenditures that is specifically permitted pursuant to 11 CFR 59003.4(a)(1) is polling. This

regulation gives recognition to the fact that general election

planning must begin before the convention and may include the

evaluation of polling data. Therefore polling data gathered before the date of nomination concerning general election

candidates and issues are useful to the general election effort.

Also, the Primary Committee states that polls were used to monitor

and maintain delegate support, but failed to provide evidence or

documentation which establishes how this was accompliShed:

c. General Election Media Expenses

Both the primary Committee and the

General Committee utilized the services of the same media firm,

Great American Media, Inc •• One of the services that was provided

was the production of a biographical film about President Clinton

entitled "The Man From Hope".
President Clinton received the Democratic

nomination for President on July 15, 1992. On July 16; prior to

his acceptance speech, the film was shown at the Democratic

National Convention. By virtue of when the film was shown, it was

available for broadcast by several television networks as part of

their convention coverage. According to Primary Committee

records, the total cost of producing the film was $191,273 with

the Committee paying $161,273 and the 1992 Democratic Convention

Committee, Inc. ("ONCe") paying $30,000. A revised version of

this film was aired by the Democratic National Committee during the week of August 16-20, 1992. The cost of that broadcast was

considered a coordinated party expenditure pursuant to 2 U.S.C.

S44la(d)(2). A revised version was also aired by the General

Committee during the period October 9-12, 1992.

Given no known use of the film during the

primary period, all costs associated with the film are general election expenses. This transaction has the effect of increasing expenditures subject to the overall limitation.

In addition to the cost of producing the

film discussed above, a number of other general election media

expenses were paid by the Primary Committee. An invoice dated -JulY20~-199-2for $6-;109 for work-relating ~o-focus~roups-wasidentified. One of two versions of the invoice notes that the

focus groups were -to test general ele~ion messages-.

Another invoice was for -3Smm Film Shoot"

at the Democratic National Convention on July 15 and 16, 1992.

These dates were the candidate'S date of ineligibility and the

following day. Film taken on these days could have little

opportunity to be used in the primary campaign. The invoice was

for $4,950.

A third invoice in the amount of $18,889

is one of a number that billed the Primary Committee for travel,

administrative costs and fees, and some production related items.

The invoice contains a statement that -THIS INVOICE IS ENTIRELY

FOR EXPENSES INCURRED DURING THE PRIMARY PERIOD-. However a

review of the charges shows that the invoice appears to cover the

period July 16, to August 18, 1992 and is apparently a general

election expense.

Finally, the Primary Committee paid an

invoice dated August 20, 1992, noted as for a -Test Response Spot". The invoice is addressed to the Clinton/Gore '92

Committee. Absent further documentation, the $4,106 is included

as a general election expense.

In summary, the Audit staff identified

$195,427 in media expenses paid by the Primary Committee which,

based on the information available, appear to have benefited the

J.TUC.lU£EHT -"-/--::"'"""'_

~e 41 o! .IUS
that are considered

Primary committee.

29

Candidate's general election campaign. As such, these expenses should have been defrayed by the General Committee. No additional

information has been received concerning these expenses.

d. Miscellaneous General Expenses

A number of other expenses were noted

to be general election expenses paid by the

Each is discussed briefly belowl

..r:

• The Primary Committee purchased 150,000 copies of the book Putting People First. The total

cost was $110,286 based on invoices dated JUly 6 and 10, 1992. The-Primary Committee sold

106,000 copies of the book to the General

Committee for $15,900. The value was

determined by multiplying $.25 per copy times

60\, to arrive at $.15 per copy times 106.000

copies. There are two errors in this

calculation. First, the cost of the books,

using the lower of the two prices paid by the

--PriJl1ary__Committee, _~_a_s _~ppr()~~a~e:l.}' $.72 per

copy. Second, since these books are -not-- --- "capital assets" they are not subject to the

depreciation allowance provided at 11 CFR S

9034.S(c)(1). The General Committee should

have paid $.72 x 106,000, or $76,320.

Therefore an additional $60,420 is due from

the General Committee.

In response to presentation of this matter at

the exit conference, the Primary Committee

states that it does not ·agree that there is a

receivable from the General Committee. In

their opinion the majority of the publications

were used during. the primary and the

Democratic National Convention. They also

state, that the value of the publications was

not required to be transferred as an asset to

the General Committee pursuant to 11 CFR

S9034.5(c) because they are not capital or

other assets.

If the majority of these books were used

during the primary and convention, it would

appear that 106,000 would not have been

available to sell to the General Committee.

No documentation to support the statement was

submitted. Further, the audit analysis does

not characterize the books as either a capital

or other asset but rather a general election

expense paid by the Primary committei'

~~dt
•

c

c.

•o

30

The Primary Committee contracted with Press

Association, Inc. fora news service. The

contract was to run from June 26, to November

30, 1992. The total cost was 514,753. ~he

Primary Committee paid $10,003 of this amount.

This is considereda general election expense.

The Primary Committee chartered aircraft from

Air Advantage. Payments via wire transfers

were made in advance and charges were applied

as incurred. At the end of the primary

election period (7/15/94)a credit balance

existed that was applied by Air Advantage to

general election charges. The Primary

Committee performeda reconciliation and

determined that $27,222 was due from the

General Committee. In addition, the Primary Committee had paid S17,000 for a

reconfiquration of the aircraft, bringing the

total amount due from the General Committee,

per the Primary Committee's reconciliation, to

$44,222. Subsequently, the Primary Committee

concluded that S15,000 of'the $17,000 ..... - ree-Onfi9Url'1t-ioncharge--could be-cons-idered a------

primary expense since the work was done on

July 10, 1992 prior to candidate's date of

ineligibility. It is clear that" improvements ". to ""the aircraft wert! done in 'preparation for

the general election campaign. The only use

of the aircraft after July 10, 1992 and before

the Candidate'S date of ineligibility was to

transport the Candidate and then Senator Gore

to the convention. '1\fter the convention the

aircraft was used in the general election

campaign.

The Primary Committee made other payments to

various vendors that appear to be related to

the general election campaign. Some of the

items are expenses incurred in the general

election period while others are monthly

expenses that should have been allocated

between the Primary Committee and the General

Committee for the month of July, 1992. The

total amount is $20,066.

Attachment 15 depicts all items discussed

above with an amount due to the Primary Committee from the General Committee of

$879,361. This figure is also included on

General Committee'S NOQCE statement at

Attachment 11.

the
c-.

---'<~:- ~- - ~~

~:~

31·

3. Executive Jet Manacement

An internal PrimafY Committee memorandum dated June

2, 1993 notes an overpayment to this vendor. The vendor sent a

refund check to the General Committee which included $4,778 which

was properly due to the Primary ~ommittee. The Audit staff's

review indicates this is a payable due the Pr~ary Committee by the General Committee. This amount ($4,778) was included as an

offset to expenditures by the General Committee and therefore

reduced expenditures subject to the spending limit. Thus, 54,778

has been added to our analysis of expenditures subject to the

spending limitation. .

4. Alamo Rent A Car National Contract

In an internal memorandum dated May 18, 1993, the

Primary Committee notes that based upon its analysis a total of

543,420 should be transferred from the General Committee to the

Primary Committee. The amount represents an overpayment by the

Primary Committee credited by the vendor to the General Committee. _____AgI;9r'dinglYLthis amount ($43,420) was not reported as a

disbursement -by- tlfeGeneralCommitteeand-~hus--was--not--included in _ expenditures subject to the spending limitation. Therefore, the

Audit staff has included this amount in its analysis of

expenditures subject to the spending limitation.

S. Sprint' C'P Telephone

During fieldwork, the Audit staff identified

overpayments to Sprint. The overpayments, which appear to have

resulted mostly from bills having been paid twice, were made by

both the Primary Committee and the General Committee.

Documentation provided by the General Committee

indicates that refunds were received whicb included amounts

overpaid by both committees. The documentation notes that

refunded amounts totaling 519,198 were moneys due the Primary Committee. This amount was included as an offset to expenditures

to the General Committee "and therefore reduced expenditures

subject to the spending limit.

In response to an exit conference presentation, the

Primary Committee submitted documentation relative to C'P

Telephone which indicated that the primarj Committee made

overpayments of 53,606 which were credited to the General

Committee's account. This amount was not reported as a

disbursement and thus was not included in expenditures subject to

the spending limit.

Therefore, the General Committee owes the Primary

Committee a total of $22,808 ($19,198 + $3,606) relative to these

two vendors which the Audit staff has included in its analysis of

expenditures SUbject to the overall spending limitation./

,A.TUcmwrr _ )

'tl. -0 I /"-- 3/
o.

32

6. Adjustment for Duolicate Payments to be Refunded

The Audit staff has made an adjustment for

duplicate payments recovered from vendors and those yet to be

resolved totaling 521,614 (see Finding III.B.l. above).

7. Adjustment for Apparent Non-Qualified Campaign Expenses

The Audit staff has made an adjustment for

non-qualified campaign expenses totaling $87,077 (see Finding

111.8.2., above.)

8. Adjustment for Accounts Payable reported as

OUtstanding at June 30, 1993

An accounts payable total of 5549,770 is added to

operating expenditures. This amount represents accounts payable reported by the General Committee as outstanding as of June 30,

1993. The General Committee provided a listing of these accounts

payable to support the reported figure.

.. -------- ---Includedin-the-l-is-ting-isadebt owed -to- -the ---- Primary Committee in the amount of $78,541.07. However, no do~ntation or explanation was provided detailing the nature of

the debt. The Audit staff is concerned this debt ($78,541) may duplicate amounts owed to the primary Committee which we have

identified above (Finding III.C.2., 3, 4, and 5)1 and, would

result in an overstatement of expenditures subject to the overall

spending limitation. Should additional documentation indicate an

overstatement, the amount subject to the spending limitation will

be adjusted accordingly. .

9. Amount owed to OSCC WIN '92 by the General

Committee

Based on documentation submitted by the General

Committee subsequent to the exit conference, a refund received

from SNET included funds paid by osec Win '92 -for additional

service for the coordinated campaign.- The General Committee

states it ·will refund the appropriate share to the OSCC-

(S1,239). This amount was reported by the General Committee as an

offset to expenditures which reduced expenditures subject to the

spending limit. Thus, the Audit staff has included Sl,239 on its

analysis as an increase to expenditures subject to the spending

limitation.

10. Adjustment for Capital Assets

Based on the Audit staff's review of the available

documentation, the cost of computers and related equipment

transferred from the Primary Committee to the General Committee

was determined to be $540,313. (See Finding III.C.2.a.) Based

upon 11 CFR 59003.3(a)(2)(ii), the Audit staff then allocat~d~70\

j..,.'U.~ !J- ""._.~~ ... 3 _
C-,

33

of the cost of these assets as compliance related; the remaining

30\, or S162,094 (S540,313 x 30\) were considered capital assets

of the General Committee. Adjusting for depreciation, the value

of the General Committee's capital assets was determined to be

S97,256 (S162,094 x .60).

This adjustment recognizes that the sale of assets

would result in a partial recoupment of expenditures made to

procure these assets. .

11. Expenditures That May be Reimbursed to the General

Committee from the compliance Fund

The Audit staff utilized the General Committee's

disbursement database to identify S1,829,239 in compliance-related expenditures made through December 4, 1992 (the end of the

expenditure report period). In addition, a 100\ review of

disbursements made by the General Committee from December S, 1992

through June 30, 1993 identified an additional $900,414 in

compliance-related expenditures. Based upon the above,

expenditures totaling $2,729,653 ($1,829,239 + $900,414) could

·--nave--1::feenpaidby-theeompl-iance -Fund.

After adjusting for a $1,900,000 transfer from the

Compliance Fund on November 2, 1992, there remains $829,653

($2,729,653 - $1,900,000) that may be reimbursed.

Shown below is a presentation of the Audit staff's

analysis of expenditures subject to the limitation:

CLINTON GORE ' 92 COMMITTEE

Expenditures Subject to the Spending Limitation

as Determined by the Audit Staff at 6/30/93

1. Correct Reportable Disbursements from

Inception through June 30, 1993

Adjustments to Correct Reportable Disbursements

2. Less: Loan Repayment

3. Less: Offsets to Operating Expenditures

S63,684,037 2/

(S125,000)

(S6,446,64S)

1/ This figure does not include Worldwide commissions and credit

card charges netted from amounts forwarded to the General

Committee. Such an adjustment would also require an adjustment to

offsets received by the General Committee, resulting in offsetting adjustments and no change in the final amount of expendi~res

sub;ect to the spending limitation. ~A~~~__;=~~

• - - hie 33 i of 6-
34

51,239

5950,365

5549,770

($21,614 )

(587,077 )

e

8. Less: Duplicate Payments (See Finding III.C.6.)

9. Less: Non-Qualified Campaign Expenses Subject

to Repayment (See Finding III.C.7.)

10. Add: Reported Accounts Payable at 6-30-93

(See Finding III.C.B.)

11. Add: Amount due DSCC Win '92 from The

General Committee (See Finding III.C.9.)

4. Less: Reported Accounts Receivable Due

at 6/30/93!/ (5683,671)

S. Less: Refund from the Compliance Fund ($1,900,000)

6. Less: Amount Receivable from the

Primary Committee (See Finding III.C.l.) (539,104)

7. Add: Amount due to the Primary Committee

(See Finding III.C.2.,3.,4 •• S.)

57,830

'-.-

12-.· Less:-Ad-justment for Capital Assets _ (See Finding III.C.10.) (597,2561

13. Add: Donated Equipment (See Finding III.A.I.) $1,070

14. Add: Payments Not Made by the General Committee

(See Finding III.A.2.) 513,130

1S. Add: Deposits Credited to General Committee

Bills (See Finding 111.11..3.) 528,325

16. Add: Amended Contracts

(See Finding III.A.4.) 5111,100

17. Add: Income Earned Credited to

Vendor Invoices (See Finding 111.0.)

8/ It should be noted that this figure does not include about

$190,000 in media refunds still under review by the General

Committee's media vendor. The vendor is still reviewing these

items to determine if the money is due the General Committee or

to the ONC as a result of 441a(d) expenditures. After the

determination is made and the Audit staff has reviewed the

documentation, this figure will be adjusted accordingly. /

ATUcmIEliT ----;f-..,...- Paze .31f o~ -3 q
35

Adjusted Expenditures Subject

to the Spending Limitation

Less: Limitation (2 U.S.C. S441a(b)(l)(B)

Amount Over/(Under) the Limit

Less: Expenditures that may be Reimbursed

By the Compliance Fund - Total

Available $829,653

(See Finding III.C.ll.)

Amount in Excess of the Spending Limitation

S55,976,499

(S55,240,OOO)

$706,499

($706,499)

$-0-

Based on the above analysis, it appears that the

General Committee has exceeded the limitation at 2 U.S.C.

S44la(b)(l)(B) in the amount of $706,499. Bowever, it is

recognized that reimbursements permitted from the Compliance Fund

as noted above would eliminate any excessive amount and resulting - ---repa-yment. _

At the exit conference, these matters were

presented to the representatives of the General Committee and the

Compliance Fund who disagreed with the Audit staff's treatment of

many of these items.

Recommendation. 110

The Audit staff recommends that, within 30 calendar days of

service of this report, the General Committee provide evidence

that the expenditure limitation has not been exceeded and provide details with respect to the debt to the Primary Committee

($78,541) reported at June 30, 1993.

It is further recommended that -the General COIIIIIlittee provide the ~olloving information regarding Bquipaent and Facilities:

• In chronological order, list the various computer systems and data entry services used by the primary Comaittee, the Genera

Committee, and the COIIIpliance Fund at all relevant times during the campaign. Identify the tiJlle periods that the various systems

were used, and bow each system was used by the General COllIIIIittee,

and bow the systems differed frOlll eacb other.

• For the listed vendors provide the requested information:

W.P. Malone

-Describe the system (CCI6/32 SupeI'1Rinicomputer and related~ items) originally leased (or purchased) froa this vendor by listing the hardware, software, and peripheral devices lIl4king

up the system. .1TUcmwrr I

c: -:::::> Pa8e 3 of atel '
election campaign

each of the the previ~

.1T'U,CHlWi7 ! P~e ~.h C'# 3l...

36

-Explain and document which general campaign functions were

actually performed on that computer system, including the

identification of the application (e.g. office automation,

delegate tracking, accounting/general ledger). . -Identify the software used for each function.

-Explain and document which portion of the leased system

(hardware and software) was acquired by the PriJD.ary

COllll1littee, the General Committee, or the COIIlpliance Fund and

when these items were IIlOVed to the Gazette Building from the

campaign's previous locations.

-Explain and document when any portion of the W.P Malone

system acquired by the General COIIZIIlittee and COlipliance Fund

was: purchased; delivered; installed; and fully operational.

ICL, temporary system

-Describe the system boIrowed by the caapaiqn from this

vendor prior to the installation of the peJ:'llll1J1ent system by

listing the hardware, software, and peripheral devices makin

up the system.

-Explain and document which general election campaiqn

functions were perforaaed on that computer system, including . ----theidenti£icationof ~~.~ic.!l~ion.

-Identify the software used for eaCh-function;; ---._-~--

-Explain and document when the temporary systell was:

delivered: installed; and fully operational.

-Explain and document which hardware and software, and its

function, was avai1e.ble on this systes that was not available

on the systea leased frea W.P. Malone.

-Explain and document which general election campdqn

functions the systea perfonaed that the previous system was

not perforaing.

-Explain and document which campaiqn functions and files were

transferred to this systea frca any other systea and the

date(s) of the transfer.

ICL, permanent Systes

-Describe the system originally purchased fI'Clii this 'rendor by:

listing the hardware, software, and peripheral devices making

up the system.

-Explain and document wbicb general election campaign

functions were actually performed on that computer system,

including the identification of the application.

-Identify the software used for each function.

-Explain and document wben the permanent system was: ordered;

paid for; delivered; installed; and fully operational.

-Explain and document whicb bardware and software, and its

function, was available on this system that was not available

on the system leased from W.P. Malone, or on the temporary

system.

-Explain and document wbicb general

functions the system performed that

systems was not performing.
37'

• Explain why the Primary Committee took a 40\ depreciation

on the colDputers that were purchased for the primAry campaiqn.

Wit.b reSpect to-the -Pollirigexpenses-discussedabove,-provide--.. documentation to establish how the results of each of the national

surveys was used to test the viability of different running I14tes,

how the results of each of the state surveys was used to lIAintain

deleqate support in those states, and how the results of each of

the convention polls was used to IIOnitor support and vas used. for

the delegates and the state party chairs to lIIlintain delegate

support. Explain and dOC1DleJ1t any other use of the polls. Provide a breakdown of the costs associated with each poll,

including the Greenberg-Lake consUlting and travel costs. Also

provide infOr1llAtion on any use of the pollinq results by the

General Committee or the Campllance Fund.

Further, the Audit staff recommends that the General

Committee provide documentation to demonstrate that the other

items noted above should not be included in the calculation of

expenditures subject to the spending limitation.

Absent such evidence, the Audit staff recommends that the

Compliance Fund transfer to the General Committee $706,499 for

expenditures that may be paid by the Compliance Fund in order to

reduce General Committee expenditures subject to the expenditure limitation and provide evidence of such transfer. The evidence

is to include a copy of the front and back of the negotiated check

or a copy of the debit and credit memos.

D. Income Earned by the General Committee

Section 9004.5 of Title 11 of the Code of Federal

Regulations states, in relevant part, that the investment of

public funds or any other use of public funds to generate income

is permissible, provided that an amount equal to all net.income

!!,!lMlVl'_ /

-~~)' . -:t:;~

-Explain and document which campaign functions and files

transferred to this system from any other system and the \

date(s) of the transfer.

For any other computer system used by the General Committee

provide the same information and documentation specified for

the systems originally leased from W.P. Malone or originally purchased from IeL.

• Explain and dOCUlllent when qeneral? election functions began

to be perfoI"llled on the system leased frOli W.P. Malone, the tCL

temporary system and the ICL permanentsystea. Specify which

functions were performed on each and the date each was transferred

from one system to the other. Estimate and document the

percentage of time that the primary ca.paign and the general

election campaign used the equipment prior to and after July 15,

1992.

c
c.

.,-,

- .'

C"-

3B

derived from such investments, less Federal, State and local taxes

paid on such income, shall be repaid to the Secretary.

Section 9007.2(b)(4) of Title 11 of the Code of Federal

Regulations states that if the Commission determines that a

candidate received any income as a result of investment or other

use of payments from the Fund pursuant to 11 eFR 9004.5, it shall

so notify the candidate and such candidate shall pay to the United

States Treasury an amount equal' to the amount determined to be

income, less any Federal, State, or local taxes on such income.

The media vendor utilized by the General Committee

maintained an interest bearing escrow account on behalf of the

General Committee. The account was opened on August 14, 1992 and

through April 30, 1993, the General Committee had earned interest

totaling $6,613. As of May 22, 1993, $5,448 of the interest

earned by this account was applied by the vendor against the

General Committee's media buys.

In addition, the Audit staff identified $1,217 in

interest credited to a General Committee phone bill from

Southwestern Bell. The interest was earned on a deposit held by - -the phone company. ··Thus,the-General Committeeeal"l\~d__~_total of

$7,830 ($6,613 + 51,217) in interest.

with respect to our review of this matter, the Audit

staff is unaware of any taxes paid relative to this income.

Therefore, it appears that a payment to the 0.5. Treasury in the

amount of $7,830 is warranted. In addition, the Audit staff bas

requested statements for the media escrow account subsequent to

April 30, 1993, in order to determine any additional interest

earned by the General Committee •

Recommendation 111

The Audit staff recommends that,within 30 calendar days of

service of this report, the General Committee provide documentation, to include but not be limited to bank statements,

that demonstrates the amount of interest earned by the General

Committee subsequent to April 30, 1993. Further, if any Federal

and/or State income tax has been paid on this income, the General

Committee should submit copies of the relevant tax returns.

Absent a demonstration that the interest should not be considered

income and that taxes have been paid, the Audit staff will reco"~end the Commission make an initial determination that $7,830

is payable to the United States Treasury.

E. Stale-Dated Checks

Section 9007.6 of Title 11 of the Code of Federal

Regulations states that if the committee has checks outstanding to

creditors or contributors that have not been cashed, the committeE

shall notify the Commission. The committee shall inform the

Commission of its efforts to locate the payees, if such,efforts

"&'TfA.CW~ --.0::-/~ 'np.J7Q 3i ,..__. r- Q'
..... ..

r

,

'n" .

39 •

have been necessary, and its efforts to encourage the payees to

cash the dUtstanding checks. The committee shall also submit a

check for the total amount of such outstanding checks, payable to

the United States Treasury. .

The Audit staff performed bank reconciliations through

June 30, 1993 ~or both ~he G~n~ral Committee and the Compliance Fund. The Aud~t staff ldent~fled stale-dated checks relative to

the General Committee totaling $73,668 (See Attachment 16)~ and

stale-dated checks with respect to the Cempliance Fund totaling S3,631 (See Attachment 17).

At the exit conference representatives for both

committees were provided with photocopies of workpapers detailing the above noted stale-dated checks.•

AS part of the documentation submitted in response to

the exit conference, the General Committee provided a list of the

stale-dated checks annotated with the action taken with respect to

each item~ such as, a replacement check was issued or that the

check had been voided. However, no docUmentation other than bank _. -sl:at.ement!f -s·upporting-these-aetions-was· providech- -Based--on-thebank statements provided, the Audit staff was able to determine

that S11,139 in stale-dated checks have either cleared the bank or

been replaced by checks whicb bave cleared the bank. Therefore,

S62,529 (S73,688 - S11,139) in stale-dated checks remain for the

General Committee.

Recommendation 112

The Audit staff recommends that, within 30 calendar days of

service of this report, the General Committee and the Compliance Fund provide evidence that:

• the checks are not outstanding (i.e., copies of the front

and back of the negotiated checks and bank statements)~ or

• the outstanding checks are void (copies of the voided

checks with evidence that no obligation exists, or copies of

negotiated replacement checks); or

• inform the Commission of the Committees' attempts to locate

the payees to encourage them to cash the outstanding checks or

provide evidence documenting the Committees' efforts to resolve

these items.

Absent such information, the Audit staff will recommend that

the Commission make an initial determination that stale-dated

checks totaling $66,160 (562,529 + S3,631) are payable to the

United States Treasury.

/
40

S 8,669

S 87,077

5',830

S 66,160

S323,361

Finding 111.0., Income Earned

Finding III.E., Stale-Dated ChecKs

Total Recommended Repayment

IV. Recao - Amounts Repayable to the United States Treasury

Presented below is a recap of the amqunt recommended by the

Audit staff as subject to the repayment provisions of 11 CFR

SS9007.6 and 9007.2(b}(2} and 26 U.S.C. S9007(b}(3):

Finding III.A., Apparent Prohib~ted Contributions $153,625

Finding III.B., Non-Qualified Campaign Expenses

1. Apparent Duplicate Payments c

2. Non-campaign Related Activity
BEFORE THE FEDERAL ELECTIO~ COMMISSION

July 6. 1994

RESPONSE OF CLINTO~(GORE '92 COMMITTEE

Al"'D CUl"'TON/GORE '92 GE~ERAL ELECTION COMPLIANCE FUND

TO THE INTERIM REPORT OF mE AUDIT DMSION

This response is filed on behalf of Clinton/Gore '92 Comminee (the ·General

Committee") and Climon/Gore '92 General Eiection Compliance Fuoo (the "Compliance

Fund") to the Interim Report of the Audit Division ("Interim Report"). The Committees'

response is numbered according to the proposed findings of the Audit Division as set forth in

the Interim Report. For the Commission's convenience we have also included a summary of

the major issues contained in the Report and a guide to the Committees' responses thereto.

1. Summary

___IhJ:~~l"l:_~...~@ljss!les rnis~iRthe Interim Report thalmerilspeciaLanentionby----

the Commission because they each have a significant impact on the Committee's NOQCE or

repayment determination.

The Compliance Fynd'

o The auditors' recommendation that a joint Primary fulfillment/Compliance Fund

solicitation should have been allocated 50/50 instead of 85/15. as reasonably allocated by the

vendor. is factually and legally unsupported. and its adoption would result in an improper

decrease of $130.823 in the Primary Committee's entitlement. Section I1.A.2.a. below.

o The auditors' recommendation thath the compliance Fund must reimburse the

Priamry Comminee for $1,296.517 is contrary to the Commission's regulations at 11 C.F.R. §

llO.1(b) and § 9003.3(a)(1)(iii). and its adoption would result in an improper decrease of

$1,296.517 1 in the Primary Committee's entitlement. Section I1.A.2.b. below.

: The General CQmmjnee

o The auditors' recommendation that amended contracts entered into with four

:This number could be as high as 52.444.557. Section n.A.2.b. below.
Vi

committee vendor; should be considered prohibited contributions is without legal support. is

contrary to the records provided by the Committee. and its adoption would result in an

improper repayment deterrnin:ltion of S111.100. Section III.A.4. below.

o The auditors' recommendation that the Committee should repay 570.295.61 for

the cost of lost and stolen equIpment paid to the Committee vendors would unfairly penalize

the Committee which made substantial effortS 10 locate the missing items and which would

have been unable to obtain reasonablY'priced l!1surance against such losses. Section

rn.B.2. below.

o The auditOrs' recommendation that lhe General Committee should reimburse the

Primary Committee for tl'.e full cost of 5540.313 of equipment purchased by and used by the

Primary Committee is directly contraary to the Commission's regulations at 11 C.F.R §

9034.5(c)(l), and its adoption would improperly decrease the Primary Committee's entitlement

by 5254,390. 2 Section III.B.2. below.

o The auditOrs' recommendation that polling costs of 5202.525 incurred prior to

the Primary date of ineligibility should be reimbursed by the General Committee is

unsupported by the Commission actions. and its adoption would improperly decrease the

_PrimaryComminee'BntitiementbyS202,525. Sectionill.C.2_b.below.------- ._

o The auditors' recommendation that the costs of the biographical film introducing

Bill Clinton to the Convention should have been paid by the General Committee is contrary to

the Commission's regulations at 11 C.F.R. § § 9032.9(a). 9033.5(c). 9032.6(a). i.ncoosistant

with prior Commission actions. and its adoption would improperly decrease the Primary

Committee's entitlement by $161,273. Section m.C.2.e. below.

o The auditors' recommendation that the General Committee should reimburse the

Primary Committee $60,420 for pamphlets printed for use in the primary and not used in the

general is contrary to the Commmission's regulations at 11 C.F.R.§ § 9032.9 and

9034.5(c)(l), and its adoption would improperly decrease the Primary Committee's entitlement

by 560,420. Section 1II.C.2.d. below.

The Committees' arguments on these issues are set out fully below and supported by

additonal documentation and testamentary evidence. Even a cursory glance at these issues

strongly suggests that the auditors' efforts in these audits were to seek out specific

disbursements made by the Primary and create arguments as to why these items should have

been paid by the Generai Corrunittee. for the sole purpose of decreasing the Primary

·This amount is further increased in the InterIm Report by an additional S79,808 for

related wiring.
Committee's entitlement and creating high an artificially Primary repayment.

n. Findinl:s and Recommendation< Relative [Q \;oo-Repayment Maners

A. Clinton/Gore 'Q2 General Ejection Compliance Fund

1. Di<clo<ure of Occupation and "arne of Emplover

As noted in the Interim Report. the Compliance Fund sent a mailing on July 19. 1993

requesting occupation and employer infonnation from those contributors from whom the

Compliance Fund had not previously received the infonnation. As further noted in !he

Report. the Compliance Fund has previously submitted a copy of the lener and a lis~ of the

addressees to the Audit Division. This mailing demonstrates that best efforts were made to

obtain the information. In addition. the Compliance Fund has filed Amendments to its

Schedules A-P disclosing the information obtained from this mailing.

The Compliance Fund further nOles that all solicitations for contributions to the

Compliance Fund were accompanied by a request for contributor information in compliance

'._ with 11 C.F.R. § 104.7. Copies of sample contributor cards are attached to this response.

-- -------Exhibit 1,The-Compliance-Fund made besteffomto request contributor information as- - ---

required by § 104.7 at the time of solicitation. and reported the information received. To the

extent that some information may have been received but not reported. as speculated in the

Interim Report. the omission was inadvertent and may have been due to data entry errors.

2. Funds from Non-Allowable Sources

The Interim Report raises two issues under this heading: payment of certain

fundraising expenses by the Primary Commillee which the auditors allege should have been

defrayed from the Compliance Fund. and contributions received after the primary date of

ineligibility which were treated as contributions to the Compliance Fund. As set forth below.

the Compliance Fund disagrees with the auditors' recommendations on these maners. The

fundraising expenses in question were properly allocated between the two committees, and the

contributions in question were properly considered contributions to the Compliance Fund.

a. Fundraisinl: Expense< Pajd bv the Primary Committee

The auditors have questioned allocation of payments for three fundraising maners:

allocation of costs between pnmary fulfillment and Compliance Fund solicitations for joint

mailings conducted by Strategic Political Response ("SPR"); payment by the Primary

Committee for creation of a "~1aster File" by SPR; and paymem by the Primary Committee of

$1,720 to defray Compliance Fund expenses. As noted in the Interim Report, the Committee

does not dispute that the S1,720 should have been paid by the Compliance Fund. That amount

3
c>.

was refunded to the Primary Committee on June 10. 1994.

Primary Fulfillment and Compliane;; Fund Solicitation bv SPR - During August and

September 1992. SPR sent two jOlOt mailings on behalf of the Primary Committee and the

Compliance Fund. The purpose of these mailings was dual: primary fulfillment and

solicitation of contributions to the Compliance Fund SPR. the direct mail vendor, determined

the appropriate COSt allocation to be S5~ Primary and 15% Compliance Fund. based on

generally accepted accounting standards applicable to dual purpose mailings by oonproft

organizations "

Anached is an affidaVIt from SPR detailing again the basis on.which the allocation was

determined. Exhibit 2. In addition, SPR has provided information regarding what the costs

would have been had separate mailings been sent. This information clearly supports the

allocation used by SPR, as well as supponing the reasonableness of the standa....d accounting

practice followed by SPR.)

The auditors. on the other hand. give no basis for their proposed division of the costs

on a 50150 basis other than the fact that there are two committees involved. This position is

contrary to the Commission's allocation regulations which provide that expenses should be

allocated 00 the basis of "the benefit reasonably expected to be derived" "from the activity. 11

c:F:R:-n06:1(a):----------

The auditors, oothe other hand. give no basis for their proposed division .of the

on a 50150 basis other than the fact that there are two comminees involved. This position is

contrary to the Commission's ailocation regulations which provide that expe~ should be

aloocated on the basis of "the benefit reasonable expected to be drived" from the activity. 11

C.R.F. § 100.1(a).

As the Strategic Response affidavit details. Strategic Response deterimined the 85-15

allocation using generally accepted accounting principles as well as a reasonable, common

sense approach to the matter. The principal purpose of both mailings was to fulfill promises

made in earlier Primary solicitations. As a matter of efficiency and conservation, the

mailings served a secondary function by including a Compliance Committee solicitation as

well. Faced with determining a cost allocation between the two Committees, Strategic

Response relied on the approach esposed by the American Instirute of Cenified Public

Accountants. Postion 87-2. and approach widely used throughout the direct mail fundraising

:; The auditors suggest that the American InStiiute of Certified Public AccouDLaDts

Statement of Position 87-2 relied on by SPR in allocating the costs of the mailing is irrelevant

because "FECA maners are not governed by this accounung publication.· Interim Repon p. 7.

It appears. however, that the auditors rely on what they call standard accounting practice

whenever that produces a result they like. but reject it when it does not.
community 00 the A.ICPA discussion contained in the Strategic response affidavit paragraph

4). As embraced by the A.ICPA and mandated by reason. Strategic Response estimated the

relative costs associated with each separate issue Their estimates proved to be extrememly

accurate.

The produciton cost of the fulfillment materIal for the pin fulfillment was $232,345.79

(88 % fo the IOLlI prodUCtion COSt of the mailing). The production cost of the solicitation letter

and assocaited components (reply device and envelope) was $28. i91.05 (11.1 % of the total

production COSt of the mailing). The production cost of the fulfillment material for the PhOto

fulfillment was Sl06.782.40 (85.7% of the total production cost of the mailing). The photo

fulfillment mailing contained no separate solicitation material. but rather a lerter expressing the

Primary Committee's gratitude for the earlier contribution. Included in the lerter of gratiOJde

was a line encouraging a contribution to the Compliance Committee. Strategic Response

derived the appropriate COSt allocation by assigning 20 percent of t.~ cost of the letter

(roughly equivalent to the space that the contribution request occupied) to the Compliance

Committee - $17.872 (14.3 % of the total production cost of the mailing).

The Commission has previously taken the position that a Committee, and in this case

the Committee's professional vendor. must be allowed wide discretion to use their best

_~ jl1<i~ent under the circumst.ances to determine the proper allocation of costs between primary

and geDeIal-electiori-compliance-futlds:- ThewTsdom of this position'recognizesthe-difficulties----

0.. faced by both the Committees and the vendors that serve them during an election cycle.

Additionally, this approach recognizes that upon a showing of reasonalbe methods, the Audit

Divisions' ex poste preferences should not override a reasonable method used at the time of

allocation.

The Audit Division funher contends that invoices totaling 569,660 submitted by SPR

for work performed on the Primary Committee's Master file are general election expenses. As

the SPR affidavit demonstrates, the invoices reflect expenses incurred in connection with and

properly charged to the Primary Comminee. Pursuant to the Strategic Response - CoIIJID.inee

Agreement dated May 11, 1992. paragraph 12. the master file is the ·property of the

Committee". Additionally. under the terms of the the Agreement. Strategic Response was

required to fully process the contributor information. This obligaiton did not conclude upon

nomination of the candidate at the Democratic National Convention. On the contrary.

responses from solicitations mailed during the primaries continued to flow into the campaign.

After these responses were keyed into the system. the file then had to be cleaned and merged

into a variable length master file which is a database as opposed to a string of unrelated data.

This updating and processing continued well beyond the date that the last donation was

received from the Priruary mailings and well beyond the Democratic National Convention.

:"ot only does the processing of a master file continue beyond the Democratic National

Convention. but its usefulness does so as \\.el1. As the Strategic Response affidavit explains

"A master file may be of sigruficant surVIving value [Q the entity which owns it. as it serves a
crucial function as both a historical cocument as well as providing an important record of

those people who are most likely to contribute again in the future." In additon to appreciating

its immense historical value. the Committee was panicularily concerned that the master me be

completed and available as a potential source of future Primary contributions. There was

signifICant concern in May. 1992. that the Primary Committee was going to fall considerably

short of fundraising goals. requiring etTorts beyond the Convention to retire the debt. A

complete master file was crucial to any future debt retirement fundraising effort.

As noted previously. the Compliance Fund has reImbursed the Primary Comminee

SI.720. The additional S200,483 were properly paid by the Primary Committee and no

additional reimbursement is owed.

b. Funds Redesj~nated from the Primaor Committee

The Interim Repons for both the Primary Committee and the Compliance Fund seek

reimbursement from the Compliance Fund to the Primary of $1.296.517 in contributions

deposited in the Compliance Fund. The auditors argue that these amountS were improperly

redesignated from the Primary Commmiuee to the Compliance Fund and therefore should be

transferred back to the Primary and mcluded as assets of the Primary Committee.

This position is incorrect for numerous reasons set out more fully below, including the

following: first, under 11 C.F.R. § llO.1(b)(2(ii) over S2,444,557 of these contributions

were in fact contributions to the Compliance Fund and no redesignation was necessary;

second. the Comminee obtained timely statements from the contributors that these

contnbutioDS were to the Compliance Fund: third, after the date of ineligibility, the

Committee made the best calculation it could based on the information available to it at the

time to determine the date after which the candidate would have no remaining entitlement, and

the Committee should not now be penalized for having to make that calculation without the

benefit of hindsight.

o Under II C.F.R. § llO.I(b)(2)(i). a contribution not designated in writing is

considered a contribution for the ne.~ election after the contribution is made. Thus,

contributions received after the date of the primary or nominating convention. as applicable,

are considered for the general election. In order to be considered designated in writing for a

panicular election. a contribution must meet one of the following tests: (1) the check or other

negotiable instrument itself must clearly indicate the panicular election with respect to which

the contribution is made; (2) the contribution must be accompanied by a writing signed by the

conLributor which clearly indicates the particular election with respect to which the

contribution is made; or (3) the contribution is properly redesignated. 11 C.F.R. §

110. 1(b)(4).

Under II C.F.R. § lOO.2(b). "election" means a "general" election, "primary"

6
election. "runoff' election. "caucus". "convention' or "special" election. The other relevant

statutory provision to this is 11 C. F.R. § 9003 .3(a)( 1)(iii) which states UJ relevant part that

"contributions that are made after the beginning of [he expenditure report period but which are

designated for the primary election...may be redesignated for the legal and accounting

compliance fund .... Contributions that do not exceed the contributor's limit for the primary

election may be redesignated ...only if- (A) The contributions represent funds in excess of any

amount needed to pay remaining primary expenses: (8) The redesignations are received

within 60 days of the Treasurer's receipt of the comnbu\:ons: (C) The requirements of 11

C.F.R. § 110.1 are satisfied; and (D) The contributions have not been submitted for

matching .• (emphasis added)

The auditors focused here on whether these contributions were properly redesignated to

the Compliance Fund, but in fact, in order to have been considered primary contributions in

the first instance. the regulations required that they be designated in writing for the primary.

Very few of them were so designated. The Comminee's vendor who processed these

contributions treated them as "redesignations" even though they were not. That vendor's

contract had been negotiated early in the campaign by the Committee's original counsel and

included an incentive for the vendor to treat contributions as though additional documeDWion

, ' or affidavit was necessary. Under the comract. the vendor received an additional amount per

-~- ------contribution for which additionaLdJ)(:Jl[11~nr.atlQl1()J"~ll !f!i~a~jt wa.sobtaine<:l. _The Cortl_miltee _

staff did not see these contributions until well after the election. but relied solely on the

vendor's expertise to handle the contributions appropriately.

Since receipt of the Interim Report, staff have reviewed each contribution received after

the date of ineligibility and the accompanying documentation. In its' review. the Committee

has concluded that only those contributions received after July 16. 1992 which specifically

have 'primary" or ·primary debt" written on the check. or have an accompanying signed

contributor card designating their contribution to the primary should have been treated as

primary contributions for which redesignations for the Compliance Fund were required. This

is the opposite approach to that taken by the auditors. but the Committee believe its approach

is in compliance with the requirements of 11 C.F.R. § 1l0.1(b)(4). That seclion presumes

that contributions received after the date of ineligibiliry are for the next election unless

designated iJa writing for the preceding election. Instead of followiJag that rule. the auditors

made up their own rule which was that all of these contributions were for the primary unless

they were designated in writing for the Compliance Fund.

The total amount noted by the auditors as "redesignated" from the Primary to the

Compliance Fund is 5:2.444.557. After September 2.1992. the auditors indicate that

5924.000 was properly redesignated to the C;:0mpliance Fund. The auditors do not include this

in the funds that should be transferred to the Primary Comminee because they contend that the

Conunittee received its full entitlement with the September 2 matching fund receipts. SiD::e

the Committee disagrees with this contention and believes that it was entitled to the match

received on October 2. 1992. and because the Committee believes that the Commission's
".

c.

analysis will change based on this response. this response analyzes the entire $2.444.557 in

question.

To the extent that they were not tOtally supert1uous. the "redesignations" sought and

obtained by the Committee's vendor merely serve as (ontirmation that the contributors

intended lhese contributions to be made to the Compliance Fund since there may have been

some ambiguity in the way in which the checks were made om or in t....le unsigned cards that

were artached to the checks.

No contributions received after August 6. 1992 were submitted for matching. Of the

contributions received after the date of ineligibility and not submitted for matching.

$2.773.327' was neither clearly designated for the primary or primary debt nor accompanied

by a signed written designation for the primary or primary debt. The Committee's analysis of

these contributions is attached as Exhibit 3. These contributions were not. therefore. primary

contributions because they did not meet the requirements of 11 C.F.R. § llO.l(b)(4). This

number accounts for the 52.444.557 transferred from the Primary Committee and the Suspense

account to the Compliance Fund. and thus. these funds are not properly considered primary

contributions redesignated to Compliance. None of these contributions were submitted for

matching.

o No funds were transferred to Compliance when the contributor's intent was unclear.

The "redesignations" obtained by the Committee's vendor. although redesignation was a

misnomer. serve as documentation of the contributors' intent to make contributions to the

Compliance Fund. In every instance. the additional clarifying documentation was received

within 60 days.

o It became clear during August of 199: that the campaign was receiving sufficient

funds that it would be necessary to calculate a cut-off date after which no further matching

funds would be sought. However. the Committee. at the time it had to make this calculation.

did not have the advantage of hindsight. nor could it in any way anticipate the adjustments that

the auditors would make to its accounts payable or post-election costs. many of which an:

vigorously disputed by the Primary Committee in its response to the Interim Repon. Had the

Committee been able to foresee that the auditors would consider the funds transferred to the

Compliance Fund as primary contributions after the fact. it would have been necessary for the

Committee to make up for these funds by raising more funds for the Compliance Fund than

were raised. If the Commission were to require transfer of these funds to the Primary

Comminee now it would result in unfairness to the Committee because it may leave an

insufficient amount in the Compliance Fund to pay continued general election winding down

costs.

'This number has not been adjusted for contribution refunds. so the actual number is very

close to the 2.444.557 actually transferred.

!TTACEllpl~- .

Page -r- at fJ.'l .
r"'

o In making their calculations as to remaining entitlement, the auditors

COUnt private contributions as they are received. but count the matching funds that correspond

to those contributions not when they are submitted for matching but when they are receiVed.

This leads to two problems. First. it is impOSSible then. to calculate the date after which no

funher matching funds are needed. because at the lime a committee makes a matching fund

submission. it cannot possibly predict how much 10 private contributions will be received

between the date of the submission and the date of receipt of the matching funds. It would

thus be far more sensible and fair to the candidate to include matching funds in the calculation

as of the time of submission.

Second, this method results in unfairness to a candidate who processes contributions

more slowly. For example. if contributions received during one month are not processed fast

enough to be included the submission at the beginning of the following month, then there can

be a two month delay in receiving L'1e funds. This method is also likely to discriminate against

candidates with a broader contributor base. i.e .. a greater number of smaller contributors,

because each contribution no matter whether it is S1 or 5250. takes the same amount of time to

process. It would be far more consistent with the Statutory entitlement scheme and would

result in more equitable ueaunent of candidates for the Commission to consider the matching

funds at the time of submission in making the entitlement calculation.5

--- - ----

--- TIlIls-: for the reaSons set forth above. the Comminee disagrees with the audiiOrs'-· - -----

recommendation that these funds should be transferred from the Compliance Fund to the

Primary Committee.

B. Cljnton/Gore'92 Committee

1. Apparent Prohibited Contribution

The Interim Report questions whether the billing by Chambers Associates, Inc., for

C'"':'--

SThe Committee believes that the Commission's approach in this regard is inconsistant with

the legal concept of "entitlement". A candidate who qualifies for matching funds is entitled to

receive them in an amount equal to matchable contributions raised up to 50% of the expenditure

limitation. 26 U.S.C. § 9034. The process would be far less costly and simpler to administer if

the Commission. as envisioned by the statutory language. were to match qualifying contributions

up to the 50% limitation and seek a ratio surplus repayment once all obligaitoDS have been

satisfied. 26 U.S.C. § 9038(b)(3). In fact. if the Commission followed the statutory scheme it

may be possible to resolve the audits within the S1.\ months contemplated in the surplus repayment

provision. Id.

9
services it provided to the Committee was done in the ordinary course of business and in

compliance with II C.F.R. §116.3 As set torth In the attached affidavit from Letitia

Chambers of Chambers Associates. Inc .. the billing was clearly with the ordinary course of

business therefore was fully consistent with the requtre:ments of II C.F.R. § 116.3.

The audItors have listed Ch.1mbers Associates. Inc as an apparent prohibited corporate

contribution resulting from an extension of credit outSide the ordinary course of business in the

amount of $117.316. The auditors' poSHion IS without mem. As the affidavit from Letitia

Chambers. President of Chambers Associates contirms. Chambers Associates handled the

Committee's billing in a manner entirely consistent w Ilh the billings of all of its other nonpolitical clients and. accordingly, such billing does not represent an extension of credit outside

the ordinary course of business. See Exhibit 4. Chambers Associates billed the Committee

after the end of the project which is within its ordinary course of business. Chambers &

Associates cites other non-political clients for which it has also billed at the conclusion of a

project. In addition. the Committee's bill was quite complex because oftbe large number of

incidental and travel expenses incurred. Chambers Associates expended extra effon to ensure

that all charges were properly accounted for and billed in order to fully comply with applicable

election laws. In addition. Ms. Chambers. who is responsible for reviewing all invoices

issued by the firm. as well as her assistant. were on a leave of absence from the fum after the

-------conclusion of the project for-two and one-halfmonths. - ----- --- - ----

c:

C-,

Moreover, after preparation and issuance of the invoice in January, 1993, the invoice

was inadvenently sem to the wrong office. The Committee received another invoice in

March. 1993 and paid such invoice promptly thereafter. Notwithstanding the confusicn. the

invoice was paid within 60 days from the date of issuance which is well within the timeframe

for payment by Chambers Associates' non-political clients.

Most imponantly. not only was payment received by Chambers Associates within its

ordinary course of business. but the issuance of the invoice \Vas also within its ordinary course

of business. Had the Committee's billing been simple and straightforward. the earliest an

invoice would have been issued for a project completed by November. 1992 would have been

early to mid-December, 1992. This invoice. which was extremely complex and required extra

care. was issued within a short period after when it would have been issued had it been a

simple. straightforward billing. Chambers Associates' financial records and accounts

receivables records confum that such billing was treated in the ordinary course of business and

that Chambers Associates clearly did not intend nor consider that this was a loan or

contribution. Accordingly. the auditors' position that an invoice issued in January, 1993 for

work completed in November. 1992 and paid WllhlD 60 days thereafter constirutes a prohibited

contribution is baseless. Chambers Associates' treated all aspects of the Committee's billing

consistent with its normal course of business and in accordance with II C.F.R. 116.3.

~. Itemization of Off,et, to Qperatln~ hpendjrures

ATTACJD[EN'I -

}lage /a~
The Interim report contends that the Committee was required by 2 U.S.C.§ 434(b)(F)

to itemize each reimbursement received by Worldwide Travel for press and secret service

travel. The Committee contends lhal il properly disclosed these reimbursements as received

from Worldwide travel and lhal funher ilemizJtion is not required by the Act, regulations or

other Commission precedents.

:2 l'.S C. § .t34(a) requries commiaees w file reports of receipts and disbursements.

Generally. all reponing under the AC1, olher than debts and obligations is on a cash basis.

The Commission has addressed a virtually identical issue fO this one as to disbursements made

by presidential committees. In AO 1983-25, the Commission iOncluded that the itemization of

disbursement requirements were met when a publicly financed campaign reponed payments,to

its media vendor, and further held that the committee was DOl required to itemize payments

subsequently made by the vendor on behalf of the corrunitlee. Thus, although'committee

vendors are required 10 maintain documentalion of disbursements made to subvendors on

behalf of a committee, the committee is not required [0 repon or itemize such disbursements.

The collection and receipt of reimbursements though a third party vendor is indistinguishable

from the siruation in AO 1983-25.

11 C.F.R. § 104.3(a)(4)(v) requires only that a committee identify each person who

~~ provid_~_aJ~lJate.~fund-,--or: otll_~Loff~~()_OIJC=rali!1g~_x~D<ll!llt'eSt()the rep<>I!in&_C()mmi~_ ._ .

•::- in an aggregate amount or value in excess of 5200 within the calendar year. The Committee

satisfied that requiremem by reponing the receipt of press and secret service reimbursements

from Worldwide Travel which was operating as a vendor to the Committee in billing and

collecting press and secret service reimbursements. All records pertaining to these collections

were made available for audit as in AO 1983-25. The reporting requirements. however. were

fully met by reporting the receipts form Worldwide. As in AO 1983·25. the Primary

Committee's travel vendor was a distinct legal entity which entered into an arm's length

commercial arrangement with the Committee. Worldwide Travel was neither set up by the

Primary Committee, nor was the Primary Committee its only client. It is and was an ongoing

travel business.

.:; .

The Committee sought informal advice from the audit staff regarding whether these

reimbursements must be ilemized and was advised that they need not be. We believe that

advice was fully consistant with the requirements of § 434(b)(3)<O, § 104.3(a)(4)(v) of the

regulations and AO 1983-25. The Comminee believes that the audilors now are taking the

position that the Worldwide reimbursements must be itemized simply because most co!llIIlittees

have collected these refunds themselves and have nO[ used a third pany vendor to collect press

and secret service reimbursements.

Although the Committee believes that iLS reponing was in full compliance with the

requirements of the Act, the Committee has prepared arnendmenLS as directed by the auditors

itemizing the receipts from each press and secret service emity 10 the extern possible. and will

be filing them shonly. This process was extremely time-consuming and costly, as the

1:
computer records to prepare the amendments had to be reconstructed. Since the Committee

was operating under the assumption that it did nOI have to itemize this information, the

information was not maintained in a computer r"orm:u lhat made it readily available for

itemization.

, RepQnjn~ oj Debt, aDd Qbli~ilt)L\n<

The Imerun Repon questions the General Committee's process for recording

and reporting debts and obligations and requests that the Comminee me amended Schedules D.

P. As noted in the Interim Report, subsequent to the exit conference, the Committee provided

the auditors with a schedule listing the dates on which the invoices questioned by the auditors

were reported. The Committee sees no sense in amending its reports to disclose information

that the Committee did not have in its possession at (he time those reports were originally

filed.

The Comminee does not dispute that debts and Obligations in excess of $500 must be

reported when the obligation is "incurred.' 11 C.F.R. § 104.11. However, the Committee's

accounting staff which was responsible for entering debts and compiling the information to

produce the debt schedules had no information concerning those debts until such time as the

information regarding the debts was submiued to [he accounting depanmem. The Committee

i~.-somewhat·mystifiedasto hoW-it was supposed-U:fKfiOw-aooutdebtspriClt-tClffie-tfinCmeywere entered into the accounting system. The only way the Committee could have done this

during the course of the campaign would have been to amend the prior month's debt schedule

each month when the current month's disclosure report was filed. Certainly it would be a

complete waste of time and serve no purpose to amend the debts schedules now to move debts

from one monthly period to another monthly period.

Finally, Barbara Yates, the Committee's CPA. discussed this issue with Joe Stoltz.

Deputy Assistant Staff Director for the Audit Division. when he was in Little Rock during the

Audit and Mr. Stoltz acknowledged to Ms. Yates that the Committee could not very well

report debts of which it "'-as unaware. Thus, no further action regarding this recommendation

is warranted.

ill. Eindin~s and Recommeodatioo' - Repa"mem \1a[[ers

A. Apparem Prohibited Comrjbutions

The Lrlterim Report identifies nine transactions totalling $153,625 which. according to

the auditors, appear to result in prohibited comributions to the General Committee. Based on

the infonnation provided in this response, none of these amounts were prohibited

contributions, and only one of these issues is not yet fully resolved, i.e. the reconciliation of

the deposits from Southwestern Bell.

lTTAC~_ PB&e ct (;!ot
1. Donated EQuipment

The General Committee contracted with Atlama Sound & Lighting for sound equipment

for a rally and a press conference in Atlanta. Georgia on October 12 and 13. 1992. Because

the equipment was already in place. and as IS their customary practice. Atlanta Sound &

Lighting permitted the Comminee {Q use the equipmem at no charge for the rehearsal. The

auditors have alleged that this resulted in a prohibited contribution. As made clear in the

attached affidavit from the vendor. however. this was the company's customary practice and

resulted in no contribution to the General Committee. Exhibit 5. As evidence of their

customary practice. the vendor provided in its affidavit several examples of notable political

and non-political clients for which Atlanta Sound provided similar service: The Bush '88 and

92' Committees. the Salvation Army. the Georgia Special Olympics and the Georgia Games.

2. Payment Not Made bv the General Committee

At the Exit Conference the auditors questioned the Committee concerning a paymem

credited to the Committee's account with Opinion Research Calling in the amount of $13.130

on October 14. 1992. Subsequent to the Exit Conference. the Committee explained to the

auditors that Opinion Research Calling worked with Greenberg-Lake on general election polls.

andas!v~ tiJ.eall<!}t()rs_that the vendors informed the Committee that Greenberg-Lake paid.

Opinion Research. The Committeehas requestecfaddillollaI documentauon-regIDtiDg dils-ana----

will forward it as soon as it is available.

3. Deposits Credited tQ General Commiuee Bms

The Interim Report has questioned the origin of three deposits credited to General

Committee bills. 1)()Cumentation of the $7.800 deposit made to Wisconsin Bell was provided

to the auditors after the Exit Conference. but the auditors apparently overlooked it. A copy of

that documentation is attached as Exhibit 6. It includes a copy of a check in the lUDOUD1 of

$11,425 dated 8/6/92 to Worthen National Bank to obtain a cashiers check as required by

Wisconsin Bell; a copy of the cashiers check: a copy of the Committee's Ch~k Request Form

and a handwritten memorandum to Matt Moore (Committee staff) on Wisconsin Bell stationery

providing a "Breakdown of Certified Check Required". The frrst eotry on the Wisconsin Bell

breakdown is "Deposit S200.00/per line x 39 lines -- $7800.00'. This documents the $7.800

deposit paid to Wisconsin BelL

Southwestern Bell - The General Committee refunded the Primary Committee $19.100

on June 30. 1994. The Committee disagrees that the additonal deposits of $425 were primary

expenses. According to Southwestern Bell. the $425 were deposits made during the general

election period. Exhibit 7.

4. Amended Contracts

:3

lTTACBl{E!I'1' _,,__ZT"'!""'_

Page / c~ J-t
The auditors have questioned four media contracts that were amended during the

general election. According to the terms of the contracts themselves. which were provided to

the auditors durin$ fieldwork. the contracts were amended because it became apparent that

the services required of the vendors were diiierem than originally anticipated. The Committee

explained this to the auditors during fieldwork and ;it the Exit Conference. It is clear from the

terms of the contracts that they were amended !:-ecJuse the four vendors would be providing

fewer services to the Cvmminee than anticipated lO,the original contracts. Instead. each of the

four vendors also began working for the D\'C The Juditors were specifically advised that the

services for the DNC were on generic media. As the auditors well know. generic media is

that which does not mention any specific candidate and therefole which does Dot have to be

allocated to any candidate. There is nothing in the Act or regulations that prevents a .

cormnittee from amending its contracts. and it is clear that generic media need. not be allocated

to any candidate's campaign committee. We are. therefore. somewhat at a loss as to what the

auditors think they need or are entitled to concerning the services provided by these four . . vendors.

The Committee believes that it is absurd for the auditors to allege an impermissible

contribution on the basis of an amended comract that calls for redUCed services to the

Committee. However. even though the auditors have no basis for suggesting that these

~. yengoI'S ,-tb<:_D~C: OfilnYQtle ~lse. Il1~de!=ontribuliol1Sto the ColIlIIlittee aII!()ul'Pl]gto

-e::- 5111, 100. we have obtained from the DNC copies of the four vendors' contracts with the

DNC and a letter from DNC General Counsel. Joseph Sandler, regarding the services

provided to the DNC. Exhibit 8. It is clear from the amended contracts themselves, and

from the additional documentation provided. that no contribution resulted to the Committee

from the amendment of these contracts.

B. Apparent NQn-Oualified Campai~n E:spen~e~

r,

c

The Interim Report listed a total of S8.669.~8 in apparent duplicate payments and

S87 .077.40 in apparent non-<:ampaign related activity. The Committee has received refunds

or credits or other resolution of alI but $6.479.20 which remains outstanding at this time.

1. Apparent Duplicate Payments

Of the 58.669.28 noted by the auditors as apparent duplicate payments. $694.11 has

been refunded to the Committee. The Furure Now. Inc. refunded 5340.24 to the Committee

on November 5. 1993. Copies of the documentation for the refunds are attached as 8Ju'bit 9.

Southwestern Bell Telecom has acknowledged J credit balance of $1.496. The Committee is

still attempting to resolve the remaining 56,479 20.

The Committee has made numerous attempts to collect the amount of $640.64 from

Radisson Legacy. The Committee has been nOtified that the hotel has changed ownership and

that the current owner has not assumed the liabilites of the previous owner. Accordingly.
pursuant to II CF.R. § 9()()4.9(e). this amount is uncollectible. Ex.hibit 10.

:.. Non-Campaj~D Related Activjt\'

Of the $87.077.40 in apparent non-campaign related expenses identified by the

auditors. $70.295.61 represent payments for equlpmem lost or stolen from the Committee.

The Committee objects 10 treatment of these payments as non-qualified campaign expenses.

Thoughout the general election. the Committee and ItS members exercised great care in

the maintence and security of leased equipment. See the written equipment Security polil;)'

promulgated during the general Campaign. Exhibit 11. Each incidet'lt cited by the Audit

Division was investigated at the time of loss for both potential recovery of equipment and to

discover any potential misconduct or gross negligence on the part of a Committee member. It

is the Committee's position that there was no evidence of misconduct or gross negligence on

the part of any Committee member. and thus it was unnecessary to execute the Committee's

policy of withholding salaries upon the discovery of evidence of misconduct or gross

:--..... negligence. As the letter from the Committee's insurance agent. Bill Lambright, Exhibit 11.

:--, indicates. it was not comercially feasible for the Committee to have purchased insurance to

. cover such losses. First. in order to negotiate a deductible low enough to have permitted loss

_,,· ~oyeO'LU1eJlppllcable_permiu!U_~ould have been cost prohibitive (the Committee's

~': deductible was $5.000.00) Secondly~lveniliestiilflucrua.tions associate(rwith-tYi>icar- - ----

0.. campaign environments and the tremendous geographical regions that would require coverage,

the cost for insurance. to the extent available at all. would have far exceeded its value to the

Comminee.

In light of the prohibited cost of commercial insurance the only commercially

reasonable and fiscally responsible alternative for the Committee was self insurnace. A

comparison of the losses identified by the Audit Division to the total monies expended by the

comminee for equipment leases in general and as compared to leases for similar equipment,

reveals that the Comminee paid a relatively small amount for the replacement of lost

equipment. (Comminee payments for non-auto rental equipment represented only 1.4% of the

total monies spent on leases while auto rental losses were only 1.4% of the total as

well). Ultimately. not only was the decision to self insure the only available option, but also

the wisest. As most of these losses occured during Jd\'ance team travel. and were not revealed

until team members had depaned the event site. police reports were not practicable. In the

case of the rental vechicles as explained in Exhibit 11. (he Committee attempted but was not

permined to file such a repon. As the statement from Committee member Richard Williams

anests. Exhibit II, the Committee went to great lengths both to recover the vechicles and to

recover their cOSts from the appropriate insurance agencies. However. as explained in the

exhibits. the Committee was unable to either reco\er the vehicles or submit this loss for

insurance reimbursement.

Five of the disbursements noted. Honon Brothers. Tom Tuchman. Monica Breedlove.

:5

!TTACIDLLJIT _":';;-::-l~­ l'age IS ot ~./1
Best Western and M.I. Lozano, amounting to 53.331.01. were reimbursed by the

ClintonfGore Presidential Transition Planning Foundation on ~1ay 14, 1993 and November 23,

1993. Copies of the reimbursement checks and Lioc:umentation are attached as Exhibit 12.

The final disbursement in question. to Wright. Lindsey & Jennings, was a bill to the

Genera! Comminee in the total amount of 58.i29 79. Cpon inquiry to Wright, Lindsey &

Jennings, they reviewed the bill and discovered that there were two charges totalling $145.38

erroneously included on the invoice. These charges were for another client of the Firm. The

remainder of charges on the invoice totalling 58,584.41 were for services provided the

Committee. The vendor has credited the Committee in the amount of $145.38 on the bill

covering their services (0 the Committee for April 1994. A copy of their letter explaining the

error and the invoice showing the credit are attached as Exhibit 13.

The disbursement (0 Kyle Michel on January 14. 1993 was payment for moving Vice

President-Elect Gore's files from the General Committee office in Little Rock. Arkansas to

Washington, D.C.. This was a legitimate winding down expenditure by the General

Committee.

Finally. as to New Jersey Bell. attached you will find a letter from New Jersey Bell

_____ ._.cJarifying.thatJhepaymentjn_question_~·asJorseryicesJrom.10129rol1J2192__The original

documentation had been misleading because the charges were posted in February and March

of 1993. Exhibit 14.

Therefore. the Committee has provided documentation resolving each of these issues

and no repayment is owing related (0 these disbursements.

C. Expendirure I imitation

The Committee concurs with the auditors' conclusion that the Committee did not

exceed the general election expenditure limit of 555.240,000. The Committee disagrees with

the auditors' numbers however, and believes that they should be adjusted per the infommation

provided in this response.

The Comittee addresses the auditors' specific adjustments as follows:

1. Amount pue to [he General Committee from

the Primary Committee

The Interim Repol1 includes a receivable owed the General Committee from the

Primarv Committee of $39.104. The Committee aflrees with this, but believes that the . - Primary Comminee owes the General a total of 543.726.20. Exhibit 15.

2. Amount due the Primary Commjttee from the

:6
o.

, ,--. '.\ I

L·

General Comillee for p:lvment or Gs:neral Election

Related Expen~es

The Committee disagrees with [he audnors' ~ontention regarding the bulk of these

payments allegedly owed to the Primary Commiuee as set forth below.

a. Equipment and Facili[ies

Future Now Inc ICL Inc and W p 1I.lalone - The Interim Repon contends that

computer equipment purchased by the Primary Comminee for a total of $540.313 should have

been purchased by the General Commillee. with the Primary paying no share of the costs.

This contention is contrary to the Ac[. regulations and prior Commission precedents regarding

the purchase of equipment. Because of the dramatic increase in demand on the Primary

Committee's computer systems in the Spring of 1992. the Committee made the purchases

noted in the Interim Repon from Future Now. Inc.. ICL. Inc. and W.P. Malone. This

equipment was purchased for and used by the Primary Committee. As requested in the

Interim Repon. details of the acquisition and usage of each computer purchase is included in

Exhibit 16. The Primary Committee followed the Commission's regulations and instnJctions

in the Primary Manual and transferred this equipmem to the General. after depreciating it by

_<lO%.6__

As noted above. the regulations specify the method by which a primary committee must

transfer capital assets to the general election. 11 C.F.R. § 9034.5(cXl). This regulation

distinguishes between assets acquired prior to the date of ineligibility (which may be

depreciated by 40% - or more if documented by the committee) and those acquired after the

date of ineligibility (faT which the general must pay fair market value at the time of

acquisition). Id. In the Interim Repon. the auditors seek to ignore this regulation by

assening that this equipment was really only purchased because it would also be needed in the

general election. They apparently do not argue that it was not used in the primary. The

Commission must reject this argument for the following reasons:

o The Commission adopted this formula in order to simplify the transfer of assets

6 When transferring the equipment. the Commiuee calculated the value of the assets by

taking the full COSt of the equipment purchased. and did not include the amount of the sales tax

paid on the equipment. The audiwrs funher contend [hat the value of the equipment transferred

should have included [he amoum paid in sales [ax. This contention is similarly incorrect for the

following reasons: [he amount paid in sales [ax does not increase the fair market value of

equipment purchased; including sales [ax 10 such a calcula[ion is contrary to standard accounting

practice; Arkansas recognizes no sales lax on resales of equipment. and therefore. no sales tax

was owed by the General to the Pnmary. See the Pnmary Response regarding Arkansas law on

this point.

.

-'
between primary and general cammiaees. The 60 -10 split was adapted with the full

knowledge that in fact some capital purchases acquired early in the campaign will have

depreciatedte a greater extent than 40%. while others purchased later may have depreciated

less. Rather than requiring each cammiuee to document the depreciation of each asset, the

Commission adopted the approach in § 90345 and intended ta allow each committee to apply

the 40% depreciation without 3ddttional docurnem.lllon. The auditors seek to undennine this

bright line approach. by imposmg an ad hoc. post hoc. and subjective reevalution of tile timing

of the use and purchase of each asset.

o As set forth in Exhibit 16. all of thIS equipment was used during the Primary

campaign. The enhanced compurer capability was CrItical to responQ to the Committee's

increased correspondence needs, for the increased needs of delegate tr.ICDng, to support the

scheduling operations. for general political support and for communications. The summary of

the usage of each computer system, and the memoranda from Monica Breedlove and Sherry

Curry, explain in detail how this computer support was critical to the primary efforts and how

the Committee's systems were inadequate by February and March. In addition, we have

included copies of some sample repair call invoices rrom March and May showing that the

Committee's system was crashing. Exhibit 16. Rather than the purchases being timed to

justify payment by the Primary as the auditOrs contend, the aquisition of the needed equipment

_____\\I~~OI!~()_vc:rdl.le.

o The auditors' position on this equipment is also internally inconsistent. While they

question the need for the increased equipment in the primary, they do DOt challenge the .

Committee's increased expenditures fer staff and overhead which necessitated the i.ncn:ased

computer capability. Thus, they apparently do nm dispute that the Primary Committee bad

dramatically increased staffing requirements during this period, but rather would disallow only

the Committee's purchase of equipment to support th3t staff.

o The information contained in the Committee Exhibit 16 also demonstrates that the

Committee considered alternatives to purchase of new equipment during May and June. 1992.

The Committee's computer consultant looked into the possibility of upgrading the Committee's

existing system to accommodate the increased usage, but determined that upgrades would cost

approximately $400,000 and would still be unreliable. Thus, it was more cost effective for the

Primary Comminee to purchase the new equipment for a total of 5540,000 with the

expectation that it would be transferred to the General with depreciation of 40%.

In summary, these equipment purchases wen: made by the Primary Committee during

the rrultching payment period. \\'ere for equipment used during the priInary campaign, and

were transferred to the General Commiuee in compliance with and reliance on the

Conunission's regulations at 11 C.F.R. § 9034.5 and the Primary Manual. Thus, no further

:8
amount is owed the Primary from the GeneralComminee. 7

I-K Electric - This expenditure of $79.808 was necessary to upgrade the wiring at the

Committee's headquarters. It was incurred and useJ during the primary campaign. and thus

was a qualified campaign expense by the Primary Committee. This wiring would have been

necessary to accommodate either an upgrade to the Committee's existing system or the

purchase of the new equipment. and was necessary to support the increased usage during the

primary campaign for uncontroverted primary purposes Thus. the Primary Committee

properly paid these costs.

I jnle Rock New~papers - The Primary Committee agrees that this amount. $12,500.

was erroneously paid by the Primary and should have been paid by the General COmmittee.

b. Pol!in~ and Dirro Mail

Greenben:-l.ake and Opinion Re~earcb - The auditors contend that polling costs of

S93.904 paid to Opinion Research and S108.622 paid to Greenberg-Lake for polls conducted

between mid-June and the convention should have been allocated to the general election. This

position is inconsistent with the facts concerning the purpose and usage of the polls, as well as

'" _____ 1heAct1regulatiQ~._~Il4l'rior_<:()~sslo_1ltreatmen~ofexpenses paid by prior primary committees during this period of time. ---------------------.- -

As the Committee adVised the auditors at the E'tit Conference and as set forth in the

memorandum from the Executive Director of Greenberg Research. Inc. dated November 8.

1993. these polls were related to delegate tracking and support functions and vice-presidential

selection. Since the auditors apparently mistakenly believe that they can discern the purpose of

polls by reading the questions. the Committee has obtained and attached additional

documentation and information concerning the purpose and use of these polls.- Exhibit 17.

Although then-Governor Clinton had a clear majority of delegates and looked certain to obtain

the nomination. he did not have sufficient committed delegates going into the Convention to

secure the nomination. letter from Joseph Sandler. DNe General Counsel. Exhibit 18.

Thus, this pre-<:onvention period was critical for demonstrating his electability.

, Once again. the auditors' sole motivation seems to be to try to fmd "''3ys to decrease the

primary's qualified campaign expenses to increase the amount the auditors allege that the

Primary Committee received in excess of entitlement.

Spoiling is a professional field requiring expen knowledge. If the average individual could

perceive in each instance the purpase of poll questions. the results would be far less reliable - or

there would be no need to retain the services of professional pollsters to conduct the polls. Thus.

inasmuch as the auditors are not professional pollsters. their opinion as to the purpose of the polls

in question is not persuasive.

:9
c

As the anached affidavit from Greenberg Re~e;lr;;h confinns, the polls which the

auditors cite as general election polls ....·ere conducted in order to develop and hone the

Candidate's message prior to and during the Convention and to successfully present the

Candidate at the Convention in order to ensure the necessary delegate suppon to obtain the

pany nomination. In addition. these polls were conducted to enable the Comminee to

maximize media coverage at the Convention in order to effectively preseot the candidate at the

Convention. For example. WIth respect to the Convention polls, convention polling was done

each night after prime-time and the results of the Convention polls were presented each

morning to the pany leadership in order to rally the delegates, to assure delegates that

Governor Clinton's popularity was strong and. accordingly, that be was an electable candidate.

In fact. all polls leading to the Convention were designed to ensure delegate suppon by

determining whether the Candidate's message was being communicated effectively and in

order to demonstrate the Candidate's eiectability.

Furtller, an essential part of the presidential nomination process is the selection of a

vice-presidential running mate. Accordingly. some of the polls conducted prior to the

Convention tested the choice of a vice presidential nominee by measuring name recognition

and public perception of individual candidates. As Greenberg Research's affidavit provides,

survey research done for the Committee in June and JUly measured the effectiveness of the

. -t-aD<ild3.ie'smessageat-IliaCparticulai-mornentof time.·Apollis a-snapshotofwbar-' - -

people are thinking at that particular moment in time. - Polls quite often are outdated within a

few days, especially those dealing with political campaigns and issues because daily events can

dramatically affect the effectiveness of a candidate's message." Accordingly, it is clear that

payments made for these polls which were arbirrarily selected by the auditors were made in

connection with the candidate's nomination and that such obligations were incurred prior to the

date of inelegibility.

Not only is the auditors' position contrary to factual authority. it is also blatantly

contrary to legal authority. A "qualified campaign expense" is defined as a -purchase.

payment, distributions, loan, advance. deposit. or gift of money or of anything of value - (A)

incurred by a candidate, or by his authonzed committee. in connection with his campaign for

nomination for election, and (B) neither the incurring nor payment of which constitutes a

violation of any law of the United States or of the State in which the ex.pense is incurred or

paid.· These obligations clearly were incurred prior to the end of the primary and as

confrrmed by Greenberg Research were for polling in connection with the primary.

In addition, the auditors' treatment of the Committee's payment of primary polling

expenses is inconsistent with prior COl'nmission actions The Commission. in the Reagan-Bush

'84 audit determined that polling expenses for polls conducted before the end of the primary

but after all of the state primaries or caucus~s had been held. as well as political consulting

work perfonned with respect to a specllic state after the r~spective primary or caucus and

paymentS to vendors for voter registration serVIces used in a state after the date of the caucus

",

lTTACID!ENT

Page M-ot:-'(5L-r-
, ..... " .

or primary were made in connection with the candidate's campaign for nomination for election

and were. therefore. qualified campaign e.'penses. These expenses totalled $2.072.283,83,

Conversely, when committees have argued that certain expendirures incurred prior'to

the date of the nominating convention were for general election purposes, the Commission has

rejected such a position. For example. the Commission determined in the Bush/Quayle '88

audit that S30,101.26 in payments for campaign trips which were taken prior to the convention

were not permissible general election pre-period expenses. Similarly, in the Dukakis for

President Committee audit the Commission rejected the Dukakis' Committee's position that it

halted its primary election fundraising effortS in June 1988 because it was likely to raise more

than it could legally spend and it was evident that after the California primary (June 7, 1988),

Governor Dukakis was assured of the Democratic Party presidential nomination. Finally, in

the Jack Kemp for President audit, the Audit Division rejected the Kemp Committee's position

that it was entitled to exclude office rent, utilities, equipment lease payments and related

services for periods following the date of a state's primary election. The Audit Staff in

rejecting the Kemp Committee's position that expenses are incurred after the date of the state

primary and that these costS are part of the costs of establishing and maintaining the state

office. Furthermore. the Commission stated that "activity at State offices does not cease the

day after the primary election. Some activity will be necessary to finish the office's business

.- in the days following-me-primary. -These expenses are also part oLtbe cost of maintaining tbe .

office the purpose of which is to influence the primary election in that State.·

It is apparent from Commission determinations and the underlying rationale in the

above-noted matters, that the auditors' current position regarding the Committee's polling

expenses directly contradicts Commission policy. Moreover, it is evident from the abovenoted cases, that the auditors in an effort to increase the Committee's repayment will adopt the

opposite position from the Committee's, no matter what the circumstances. rather than adopt

the position consistent with the explicit legal ;;uthority and the Commission's long-standing

policy that expenses incurred prior to the Convention are primary expenses, It is

clear based on the affidavit from Greenberg Research that the focus and purpose of the polls

in question was for the primary.

The auditors also seem to suggest that the Committee was required to pay for polls

conducted during June from general election funds since the regulations identify polling as

a permissible pre-general election e~penditure. 11 C.F.R. § 9003.4(a)(1), This regulation.

while permining general election polling prior to the beginning of the expenditure report

period. does not in any way require comrniuees to pay for polls conducted prior to the dare of

ineligibility from general election funds.

In fact, it is unlikely that polis conducted prior to the date of ineligibility would be in

connection with the general election. As acknowledged in the Commission's regulations, polls

devalue very quickly. and are worth only SOC;:;- 16 days after theny are conducted. 11 C.F.R.

§ 106.4. The auditors apparently disagree with the Commission'S regulations since they fllld
the fact that polls diminish rapidly in value "nol persuasive." Notwithstanding !.he auditors'

opinion. it is difficult [0 perceive how polls which are of virtually no value by the date of

ineligibility are for the purpose of intluencing the generai election.

~toreover. the auditors have included In the amount of expenses which they asssert are

general election expenses. travel expenses lh:ll do nor ev~n correspond to the polls which the

auditors have listed as general eleclion polls See E:.;hibH 19. Accordingly. even if one

accepts the auditors' posilion lhat the polls lhey iden!Jtied are general election polls. these

expenses in the amount of 55,985.45 relating to focus group travel. do not constitute general

election expenses.

The invoices for travel COSts associated with focus groups are 3293 (incorrectly labeled

3184).3688.3695.3781, 3782. and 3882. Please nOle. in addition. that invoices 3540,3687,

3688 were not for travel associated with any poll identified by the auditors as the auditors

assert in thier worlcpapers. Rather. these invoices represented travel costs associated with

various focus groups.

c. General Election Medja Expenses

The Man from Hope - A biographical film of President Clinton. entitled "the Man

------f!"omHope"-was afrediiiihe -f992DeinocraiicCo-riveniion-pnoi to-PresidemCliDton's-------

acceptance speech on July 16, 1992. According to the auditors, the cost of producing the

film was S191,273. The Primary Committee paid $16l.273 ofth.is amount and the 1992

Democratic Convention Committee ("Convention Committee-) paid S30,OOO. The purpose of

the fllm was to introduce Clinton to the Convemion prior to his acceptance of the nomination.

In the Interim Audit Report issued to the Convention Comminee for the 1992

Convention. the auditors took the position that the S30.000 paid by the Convention Comminee

was an excessive contribution to the Primary Committee. Subsequently, on October 6, 1993,

at the Exit Conference for the General Committee audit. the auditors contended that the

payment by the Convention Committee was an excessive conlribution not to the Primary

Committee but to the General Committee. At the General Committee Exit Conference.

Committee attorneys questioned Joe Stoltz. Deputy Assistant Staff Director of the Audit

Division. regarding the apparent change of position. and were advised that the Audit

Division's position on this issue was "evolving". In issuing the Final Audit Report on the

Convention Committee. the Commission rejected the audilors' position that the payment of the

$30,000 by the Convention Commiuee was impermissible. The issue of whether the costs of

the film were properly paid by the Primary Commiuee was not addressed.

For the reasons set forth below. the Committee contends tluu the payment for costs

of the film was properly a primary expense in that it was incurred during the matching

payment period and was made in connection with the candidate's campaign for nomination.

J.T'!'AC~Nl~

P~e~ot~
11 C.F.R. § 9032.9(a).

o The payment for the costs of the producing The ~tan from Hope meets the defUlition

of "qualified campaign expense." !"otwllhstanding the audilOrs' assenion that the purpose of

the biographical film of President Clinton \\ as lor the general election. the payments for the

costs of producing the tilm squarely meet the definition of qualified campaign expense. The

obligations were incurred prior to the date of ineligibillly and they were made "in connection

with his campaign for nomination." since the purpose of the film was to introduce him to the

Convention prior to the time he accepted its nomination. Thus. the costs of the film were

properly considered a primary expense. since they were in connection with his norni.nation by

the Convention9 .

o The showing of the film was for the purpose of introducing the candidate to the

Convention. thus it was a proper primary expense. Generally, all convention-related expenses

paid by candidates' comminees have been considered legitimate primary expenses. The

Commission has not routinely singled OUl some convention expenses and considered them

for the purpose of securing the nomination while others are considered for the purpose of the

general election. Indeed. the Commission has always considered travel expenses back from

the convention to be primary expenses even though those expenses- unlike the costs of

._producing the Man from Hope are usually incurred afteLthedatc.ofineligibility.__. _

o The auditors have never in the past singled oUl a convention fl1m for special

consideration or treatment. The only reason they have done so here because this film bears a

separate and readily identifiable name. The Comminee believes the auditors, if asked, would

be unable to tell the Commission how such films have been paid for in the past, even though

there has been a comparable film at every major pany convention in the recent past. Thus, it

is grossly unfair to single out this film to establish a new rule. panicuIarly one that makes DO

sense. to If the Commission wishes to make rules restricting the payment for convention films

to a panicular source, it should do so in a rulemaking proceeding and not for the first time in

the context of a committee audit. The auditors' -evolving- position on this issue funher

emphasizes the inappropriateness of making a new rule in the course of an audit. The

auditors' change of position on this issue is a clear demonstration that their entire purpose in

arguing that it should be a general election expense is because they discovered that making it a

general election expense results in disadvantage to the Committee.

9 When portions of the film were adapted for use in the general election, those additional

costs were paid by the General Committee and the DNC.

10 It is difficult to perceive any harm in permitting a candidate to choose whether a

convention film will be produced by a primary committee. a convention committee, or a general

election committee. Indeed. it is likely that since the tim publicly funded campaign in 1976,

some combination of all of these sources have been used to produce convention films.
Lr,

o The auditors are incorrect that the c:lOdida[e's date of ineligibility was July 15,

1992. Although the Committee believes that it is immaterial [0 the Commission's

detennination on whelher this film was a proper primary expense. the date of ineligibility is

key to the auditors' current argument as to why the film should be considered a general

election expense. The auditOrs contend that the showing of lhe film on the last day of the

convention renders it a general elec[ion expense. since they have concluded lhat July 15. 1992

was the candidate's date of ineligibility. While it does not matter whelher the candidate's date

of ineligibility was July 15 or 16. since the payments for the costs of lhe film meet the

deftnition of qualified campaign expense, the Committee disagrees wilh the auditors contention

!hat the date of ineligibility was July 15.

o The auditors' assertion that the date of ineligibility is July 15 is inconsistent with

DNC rules. 11 C.F.R. §9033.5(c) provides that a candidate's date of ineligibility is the

last day of the matching payment period. The last day of the matching payment period for

a candidate seeking the nomination of a party which nominates its candidate at a national

nominating convention is lhe date on which the pany nominates its candidate. 11 C.F.R.

§ 9032.6(a). As set fonh in the attached opinion letter from Joseph E. Sandler. General

Counsel of the Democratic National Committee. under the Call to the Convention. the

pany rules on nomination of the presidential candidate. the date on which the party nominates

its candidate is the date on which the nomination is accepted. Exhibit 20. Tbe Commission

must deferto lhepany-on'ihisquestiori.siilce the regtlllitionsoefIiie'lliiS'date'ofineligilftlity as

"the date on which the party nominates its candidate. " The regulations do not specify a

particular day of a convention. such as the "second to last day of the convention.· as the

auditors would like the regulations to read.

o Indeed. for a litany of reasons. it makes no sertse for the date of ineligIl>ility to

be the date of the vote. and not the date of the acceptance. Because the votes at conventions

frequently take place late into the evening. this interpretation would require the Commission

to determine the precise time at which the vote is concluded. Since the votes often occur after

midnight. under the auditors' interpretation. the date would not be the date on which the roll

call was scheduled. but the date on which it was concluded. In fact. in 1992, both the

Republican and Democratic conventions held their roll call votes for the presidential nominee

on the second to last day of their respective conventions. The Democratic Convention roll call

concluded at 11:54 p.m.. while the Republican Convention roll call concluded at 12: 11 a.m.

the following day. Exhibit 21. The auditors interpretation of the date of nomination requires

the Commission to consider the timing of the Vote and, as illustrated by the 17 minute interval

above. could result in disparate treatment of the two major pany nominees. This makes no

sense. The Commission has not previously had to address the potential absurdity of this

exercise. because the auditors have never previously singled out a convention-related expense

and argued that it should have been paid for by the general election. The Couunission should

avoid this absurdity by simply rejecting the :Iud itors' assertion lhat the film was a general

election expense.
C'-.

o The st:ltute itself contemplates that the last day of the convention is the date of

ineligibility. In §9032.6(b)(2), for example, for candidates not nominated at a convention.

the last day of the matching payment period is the last day of the convention of the last

major party convention. not the second to last day of the convention of the last major pany

convention. as the auditors would like to read the d3;te of ineligiblity for major party

candidates. Finally. the Commission has never certified a major party nominee as eligible to

receive the general election funds until aiter that candidate has accepted the nomination of his

party. See 11 C.F.R. § 9002:<a)(1) and § 9003.1(a)(2).

Thus, for the reasons set forth above. the Commission should reject the auditors'

contention that the costs attributable to production of the biographical fUm of President

Clinton shown at the 1992 Democratic National Convention were required to have been

paid for by the General Committee.

In addition to the costs related to production of.the Man from Hope. the auditors

have questioned four additional media expenditures totalling 534.155.

35 m.rn PhOlo Shoot - The Audit Division has chosen to challenge a charge for a "35

rom photo shoot" at the Democratic National Convention as a general election expense. The

___ Au<1itJ~ivisioI!lll3iIltains"Film taken on these days could have little opportunity to be used in

the primary campaign". Pronusesofcampaign memotaoilia-byaprUnary-comminee-canhave--

a powerful fundraising effect. The Audit Division musst be aware of this potential. as they

have pointed out the use of this item in question for such a purpose in the Interim Report of

the Audit Division on the Clinton/Gore '92 Committee and OintonlGore '92 General Election

Compliance Fund. In the Compliance/General Committees Report. the auditor's note that

"One of these mailings contained a photo of the Presidential and Vice Presidential candidates

on the podium at the convention which had been promised in an earlier mailing fundraising

appeal by the Primary Committee.· See also Exhibit 2. paragraph 3.

We do not believe that there is any question that the production of primary fulfillment.

by a primary committee. is an accepLable primary committee expense. However. even in the

absence of such clear evidence supporting our assertion, we maintain that the Commission

should not endorse the Audit Division's approach to convention expense allocation. To classify

an expense during the convention as a general committee expense merely because it occurs a

moment beyond the candidate's date of ineligibility leads to absurd results. Regardless of the

exact moment that the photograph of the nominee/candidate is taken. this should be an

unquestioned primary committee expense. :\ pany's nominating convention has dedicated all

of its time and effortS to deliver its candidate to this partiCUlar event. Not only does a

photograph of the nominees have significant fundraising drawing power, but more simply, it is

a means of memorializing the event for both the committee and the party.

As to the $18.889 in expenses from Great American Media. as the affidavit of

Annemarie Hannon. Exhibit 22. demonstrates. the charges questioned as potential general
election expenses are. except as discussed helo\\'. valid primary committee expenses, incurred

in connection with primary commminee work prior [0 [he Convention or in furtherance

Comminee work after the convention. As the affidavit points our. Great American Media has

identified one charge for $760.00. out of the 518.889 of charges reported on the invoice, that

may have been mischarged 10 the pnmar: Greal American \1edia and the Committee are

curreently investigating this charge.

d. Miscellaneous General EJeCjjoD E:speD<es

Punjn2 People First - The Primary Committee records indicate that 106.000 copies

of Punin2 Pe0J2le First pamphlets were transferred to the General Committee. At the time of

transfer. the Comminee treated the pamphlels as capital assets and transferred them at a cost of

$.15 per copy (60% of S.25). The audilOrs correclly note that the actual cost of these

pamphlets originally was $.72 each.

Punj02 People First was an outline of the Clinton economic plan prepared for and

used during the primary campaign. II The 150.000 copies invoiced on July 6 and 10. 1992

were ordered for distribution at the Convention. As the auditors were advised at the Exit

Conference. at the conclusion of the primary campaign. the Committee erro~IYJ)Clie_ved _

that i06.000copiesoftlre pamplUettemainMaoo wouldoe use(Oii-ihe geoerat-election.

Therefore. the Committee treated them as a capital asset and transferred them to the General

Committee. The auditors dispute the Comminee's calculation of the value and take the

position that full cost of the pamphlets transferred should have been paid by the General

Committee. The Committee disagrees with this conclusion for the following reasons.

o The pamphlets were not used in the general election. and, therefore, there was

no need for the General Committee to pay any ponion of the cost of producing them.

Based on the best information available to the Committee at this time. it appears that the

pamphlets sent to and distributed at the Convention were erroneously counted in the inventory

prepared by the Primary Committee. While there may have been some copies left over from

the Primary, there is no indication mat they were distributed during the general election.

o Even if some of the pamphlets were used in the general election. they are not

l~ Purring People First is referred 10 in the audit report as a "book." It should be noted

that it was published in 3 different forms, all of which resemble a booklet or brochure more than

a "book." The copy of Purring People First mat was invoiced on July 6 and 10 is attached for

your information. Exhibit 23. As the CommiSSion can see, me format was seventeen 81/2 x 11"

pages folded over in me middle. It was hardly a 'book" and. moreover, it was clearly intended

for use in the primary. as it is marked Clinton for Primary and includes the Primary Committee

·isclaimer. There is no referen:e to Vice Presidential runnlDg mate. Senator AI Gore.

26 !TT.t.C~ll; - :91-r: ta.ie~O.
-'.

"::-.

the type of asset that the General Committee was required to purchase from the Primary

Committee. or that the Committee was required to include as an asset on the NOCO. The

regulations divide assets into two types: ·capital- and "other assets.· II C.F.R. §

9034.5(c)(I). ·Capital assets· are those such as office equipment, furniture, vehicles and

fixtures acquired for use in the operation of the campaign. Id. ·Other assets" are property

acquired for use in fundraising or for collateral as campaign loans. Items which are neither

"capital· Dar ·other· assets. such as leftover campaign materials (buttons. bumperstickers.

brochures. signs) need not be included on the NOCO, and there is no requirement in the

regulations that they be valued and transferred as an asset between the primary and the general

election.

o The auditors concede that the pamphlets were not capital or other assets. but

contend that they were general election expenses paid by the primary. That is DOt the case.

Ptmin2 People Fica was developed for use in the primary campaign. The last orders [mvoiced

July 6 and 10) were placed specifically for the Convention. Since lhe expense of printing these

copies was incUrred prior to the general election expenditure report period. the pamphlets

would be qualified campaign expenses for the general election only if they were for use during

the general election period. They were not. They were clearly marked ·Clinton for

President" and, as noted above. there is no known use of these copies during the general

election. The Commiuee erroneously counted them asan asset transferr~_tQ_tbe General-and

the-GeiteiifCorrunfttee-shouTdnoi-hive paid al1~:thing for them~ A-reVised version of PunjD2

People First was printed for the general election. A copy of that is attached as Exhibit 24.

The Primary should. therefore. refund the 515,900 paid by the General Committee.

Press Association Inc - The Committee agrees that the Primary overpaid for its

ponion of the S14,753. but disagrees wilh the auditors' contention that the entire amount

was a general election expense. The correct amount owed by the General Committee is

$7,687.45. This amount was refunded on June 10, 1994.

Air AdvaD!a~e - The Committee agrees that 52,000 and the S27,222.07 were

erroneously paid by the Primary Committee. 529.222.07 was reimbursed by the General

Comminee on January 11, 1994 and March 24. 1994. As to the S15,ooo in reconfiguration

costs on July 10, 1992. the airplane was used in the primary and thus was properly allocated

to the Primary.

The Air Advantage bill is another instance of the auditors contending that expenses

for items for things that were used ill the primary should have been paid 100% by the

general. There is no support or rationale for this. It simply reflects lhe auditors' attempt

to increase the amount of the Comminee's repayment.

Mandarjch & Ac:c:ocjares - As noted 10 the audit report the Committee recognizes

that this amount should have been paid by the Compliance Fund. It was refunded on June

10. 1994.

27
Other expenses - The auditors have 3150 nOled addilional expenses amounting 10

S20,066 that should have been paid by the General Committee. On January 11, 1994 and

March 24, 1994. S14,420 was refunded by the General Conuninee. The remaining $5,646 is

being transferred this week.

3. Executive let :-'1aoa~erneDl

The General Comminee agrees that the $4.778 refund from.:ExeOltive Jet should

have been applied to the Primary. That amount is being transferred to the Primary this

week. We further agree that il should oot have been an offset to General Committee

expenditures.

4. Alamo Rent A Car National Comract

The $43,419.91 was transferred to the Primary Comminee on January 11. 1994

and March 24, 1994. The Committee agrees that this amount should be tn:ated as an

expenditure by the General Committee SUbject to the spending limitation.

5. Sprint and C&P TelephgDe.,

<:' The General Comminee transferred 10 Primary $19.198.36 (relative to Sprint)

0-. January 11, 1994 and March 24. 1994. On the same dates, the Geoeral transferred

..... the PrimarY $9,405.87 (relative to C&P Telephone) which included the $3,606 DOted

- in the Report. The Comminee agrees that these amounts were General Committee

c expenditureS subject to the spending limitation.

6. AdjusuneDls for Duplicate Payments

c

. The Committee's expenditures should be adjusted per the Committee's response to

enFinding m.B.I.

e

7. Adjustment for Apparem Non-Qyalified Campaj~ Expenses

The Committee's expenditure lotal should be adjusted in the amount of $3.476.39

-efunded to the Comminee. There should be no adjustment in the amount of the lost and

.tolen equipment ($70.295.61). or for the 513.305.40 which were questioned by the auditors

'ut were legitimate General Election expenses.

8. Adjustment for ACCQUO!~ Pavable Reponed As

QUlstandjne at June 30 1993

The Comminee notes that the S549.770 accounts payable figure includes $17,942 of the

28
--'-'-',t'I3i

,"'

misnomer. serve as documentation of the contributors' intent to malee contributions to the

Complian.:e Fund. In every instance, the additional clarifying documentation was receiVed

within 60 days.

o It became clear during August of 1992, that the campaign was receiving sufficient

funds that it would be necessary to calculate a cut-off date after which no further matching

funds would be sought. However, the Committee, at the time it had to make this calCUlation,

did not have the advantage of hindsight, nor could it in any way anticipate the adjustments that

the auditors would make to its a~ounts payable or post~lection costs, many of which are

vigorously disputed herein. Had the Committee been able to foresee that the auditors would

consider the funds transferred to the Compliance Fund as primary contributions after the fact.

it would have been necessary for the Comminee to make up for these funds by raising more

funds for the Compliance Fund than were raised. If the Commission ~ere to require transfer

of these funds to the Primary Committee now it would reIt11fcm:-unf~toi&: Committee

beca~ it may leave an insufficient amount in the Compliance Fund to pay ~ed general

election winding down costs.

o In malcing their calculations as to remaining entitlement, the auditors count private

contributions as they are received, but count the matching funds that correspond to those

conO'1'butions not when they are submined for matching but v.1Ien they are received. This

leads to twO problems. FU'St. it is impossible then. to calculate the date after which no further

matching funds are needed. because at the time a conlmj~~_!_~tehiTlg fIma _ -::.::. ----- Submission. it cannotPosSibfypmriCiliow much-in-private contributions will be received

between the date of the submission and the date of receipt of the matching funds. It would

thus be far more sensible and fair to the candidate to include matching fw1ds in the -calculation

as of the time of submission.

Second. this method results in unfairness to a candidate who processes contributions

more slowly. For example. if conO'1Dutions received during ODC month are not processed fast

enough to be included the submission.at the beginning of the following month. then there can

be a two month delay in receiving the funds. This method is also likely to discriminate against

candidates with a broader contributor base. i.e.. a greater number of smaller COntrl'butors.

because each contribution no matter whether it is $1 or S2SO takes the same amount of time to

process. It would be far more consistent with the statutory entitlement scheme and would

result in more equitable treatment of candidates for the Commission to consider the matching

funds at the time of submission in making the entitlement calculation. 17

;;The Corruninee believes that the Corrunission's approach in this regard is inconsistent with

(he legal concept of "entitlement.· A candidate who qualifies for matching funds is entitled to

receive them in an amount equal to matchable contributions raised up to 50% of the expendifure

limitation. 26 U.S.C. §9034. The process would be far less costly and simpler to administer if

the Corrunission, as envisioned by the ~tan.ltory language, were to match qualifying contributions

42
.', \ .. _", ~1"""" :

AKOOS799

'"" ".

c.

December 27, 1994

Mr. J.L. ·SKlp· Rutherford, Treasurer

Clinton/Gore '92 Committee

Clinton/Gore '92 General Election

Compliance Fund

c/o Ms. Lyn Utrecht

OldaKer, Ryan & Leonard

B18 connecticut Ave., N.W., Suite 1100

Washington, D.C. 20006

Dear Mr. Rutherford:

Attached please find the Final Audit Report on the

Clinton/Gore '92 Committee and Clinton/Gore '92 General

Election Compliance Fund. The Commission approved this report

on December 27, 1994. As noted on page 4 of this report, the

--Co1Dllri.sion-maypursue-any__of__the_~atters discuued in an

enforcement action. -- ---

In accordance with 11 CFR S9007.2(c)(1) and (d)(l), the

Commission has made an initial determination that the Candidate

is required to repay to the Secretary of the Treasury $254,546

within 90 days after service of this report (Rarch 30, 1995).

Should the Candidate dispute the Coaaission's

determination that a repayment is required, Commission

regulations at 11 CFR S9007.2(c)(2) provide the Candidate with

an opportunity to submit in writing, within 30 calendar days

after service of the Cosaission's notice (January 30, 1995),

legal and factual materials to demonstrate that no repayment,

or a lesser repayment, is required. Further, 11 CFR

S9007.2(c)(3) permits a Candidate who has submitted written

materials to request an opportunity to make an oral

presentation in open session based on the legal and factual

materials submitted.

The Commission will consider any written legal and factual

materials submitted by the Candidate within the 30 Day period

in making a final repayment determination. Such materials may

be submitted by counsel if the Candidate so elects. If the

Candidate decides to file a response to the initial repayment

determination, please contact Kim L. Bright-Coleman of the

Office of General Counsel at (202) 219-3690 or toll free at

(BOO) 424-9530. If the Candidate does not dispute this initial

Page 123, 12/27/94 .!TTACmaJr!_3_

Page / LO&-
MR. J.L. RSKlp R RUTHERFORD, TREASURER

Page 2

determination within the 30 day period provided, it will be

considered final.

The Commission approved Final Audit Report will be placed

on the public record on December 29, 1994. Should you have any

questions regarding the public release of this report, please

contact Ron Harris of the Commission's Press Office at (202)

219-4155.

Any questions you may have related to matters covered

during the audit or in the audit report should be directed to

Alex Boniewicz or Joe Stoltz of the Audit Division at (202)

219-3720 or toll free at (800) 424-9530.

J!!ZA Robert J. osta

Assistan Staff Director

Audit-o-fvfsTon- -

Attachment as stated

Page 124, 12/27/94
AKOOS802

December 27, 1994

The Honorable William J. Clinton

c/o Ms. Lyn Utrecht

Oldaker, Ryan. Leonard

81B Connecticut Ave., N.W., Suite 1100

Washington, D.C. 20006

Dear Mr. president:

Attached please find the Final Audit Report on the

Clinton/Gore '92 Committee and Clinton/Gore '92 General·

Election compliance Fund. The Commission approved this report

on December 27, 1994. As noted on page 4 of this report, the

Commission may pursue any of the matters discussed in an

enforcement action.

________ 1:n accordance with 11 CFR S9007.2(c)(1) and (d)(l), the

Commi 55ion--tl&S-Dlade an -Iifit1..rane r-1ll1nat-i:on ~tra-t- you-arerequired to repay to the Secretary of the Treasury $254,546

within 90 days after service of this report ("arch 30, 1995).

Should you di5pute the Commission's determination that a

repayment is required, Commission regulations at 11 eFR

S9007.2(c)(2) provide you with an opportunity to aubmit in

writing, within 30 calendar days after &ervice of the

Commission's notice (January 30, 1995), legal and factual

materials to demonstrate "that no repayaent, or a lesser

repayment, is required. Further, 11 eFR S9007.2(c)(3) permits

a candidate who has submitted written materials to request an

opportunity to make an oral presentation in open session based

on the legal and factual materials submitted.

The Commission will consider any written le9al and factual

materials submitted by you within the 30 Day period in making a

final repayment determination. Such materials may be submitted

by counsel if you so elect. If you decide to file a response

to the initial repayment determination, please contact Kim L.

Bright-Coleman of the Office of General Counsel at (202)

219-3690 or toll free at (800) 424-9530. If you do not dispute

this initial determination within the 30 day period provided,

it will be considered final.

Page 125, 12/27/94
0_

THE HONORABLE WILLIAM J. CLINTON

Page 2

The Commission approved Final Audit Report will be placed

on the public record on December 29, 1994. Should you have any

questions regarding the public release of this report, please

contact Ron Harris of the Commission's Press Office at (202)

219-4155.

Any questions you may have related to matters covered

during the audit or in the audit report should be directed to

Alex Boniewicz or Joe Stoltz of the Audit Division at (202)

219-3720 or toll free at (800) 424-9530.

Robert • Costa

Assistant Staff Director

Audit Division

- --- -At-~achm~n-t- -.sst-a-t~d

page 126, 12/27/94
FEDERA.L ELE(TIO' (0\\,,115510,

REPORT or THE AUDIT DIVISION

ON THE

CLINTON/GORE '92 COMMITTEE

AND CLINTON/GORE '92 GENERAL

ELECTION COMPLIANCE FUND

AKOOS331

I. Background

A. Audit Authority

This report is based on an audit of the Clinton/Gore '92

Committee (Wthe General Committee W) and the Clinton/Gore '92

General Election compliance Fund (Wthe Compliance FundW). The

audit is mandated by Section 9007(a) of Title 26 of the United

S_t_,t~s __~()d~ ... That section states that Wafter each presidential

election, the CClmmisslonShall conduct:- IctnoTou-gtr,nc-alll~-n-ati-on-and-­

audit of the qualified campaign expenses of the candidates of each

political party for President and Vice President.·

Also, 26 U.S.C. S9009(b} states, in part, that the

Commission may conduct other examinations and audits as it deems

necessary to carry out the functions and duties imposed on it by

this chapter.

In addition to examlnlng the receipt and use of Federal

funds, the audit seeks to determine if the campaign has materially

complied with the limitations, prohibitions, and disclosure

requirements of the Federal Election Campaign Act of 1971

(-FECA-), as amended.

B. Audit Coverage

The audit for the General Committee covered the period

from the General Committee's inception July 14, 1992, through June

30, 1993. The General Committee reported an opening cash balance

of $-0-; total receipts of $63,711,645; total expenditures of

$63,683,481; and a closing cash balance of $28,163.1/ In addition,

the General Committee's disclosure reports were reviewed

.Y The reported activity does not foot due to minor

mathematical errors. Figures included in this report are

rounded to the nearest dollar.

Page 5, 12/27/94 .3 <

of /12?6
2

through June 30. 1994 for the purpose of determining amounts

applicable to the expenditure limitation.

The audit for the compliance Fund covered the period

from inception. May 13. 1992. through June 30. 1993. The

Compliance Fund reported an opening cash balance of $-0-; total

receipts of $8.498.699; total disbursements of $4.587.859; and a

closing cash balance of $3,909,840.~/

C. Campaign Organization

The General Committee registered with the Federal

Election Commission on July 17. 1992. The Treasurer of the

General Committee during the period covered by the audit was

Robert Farmer. The current Treasurer is J.L. ·Skipw Rutherford.

The Compliance Fund registered with the Commission on May 26.

1992. The Treasurer of the Compliance Fund until August 25. 1992

waS David Watkins. The Treasurer from August 25. 1992 through

october 14. 1994 was Robert Farmer. The Committee filed an

amended Statement of Organization on October 15. 1994 which

designated J.L. wSkipw Rutherford as the current Treasurer. Both

committees maintain their headquarters in Little Rock. Arkansas.

------------ The_GeneraLCommittee maintained five bank accounts at

various times to manage i ts- ifnanciai-act-ivIty-~ r-iom-t&-ese--

accounts. the General Committee made approximately 73.000

disbursements. The General Committee was certified to receive

$55,240.000 from the United States Treasury on July 17, 1992 to

fund its campaign. Other receipts included a $1,900,000 transfer

from the Compliance Fund, $125,000 in loans from the Compliance

Fund to finance expenses incurred prior to receipt of the July 17,

1992 grant, and apprOXimately $6,450,000 in offsets to

expenditures.

To manage its financial activity, the compliance Fund

maintained one bank account. From this account, the Compliance

Fund issued 139 checks in payment for goods and services and an

additional 234 checks for refunds of contributions. Also, the

Compliance Fund received approximately 126,700 contributions from

about 98,000 individuals totaling almost $8,473,000. Of this

amount, approximately $2.443,000 originated from contributors to

the Clinton for President Committee (-the Primary Committee·) as

contributions which were redesignated to the Compliance Fund.

D. Audit Scope and Procedures

In addition to a review of the committees' expenditures

to determine the qualified and non-qualified campaign expenses

The reported closing cash balance does not foot due to a

$1,000 math error in total disbursements on the Summary

pages of the Year-End, 1992 disclosure report.

page 6. 12/27/94
3

incurred by the campaign, the audit covered the following general

categories:

1. The campaign's compliance with statutory limitations

with respect to the receipt of contributions or loans;

2. the campaign's compliance with the statutory

requirements regarding the receipt of contributions from

prohibited sources, such as those from corporations or

labor organizations (see Finding !I.B.l. & III.A.);

3. proper disclosure of receipts, contributions from

individuals, political committees and other entities, to

include the itemization of receipts when required, as

well as, the completeness and accuracy of the .

information disclosed (see Findings II.A.l. & II.B.2.);

4 • proper disclosure of disbursements including the

itemization of disbursements when required, as well as,

the completeness and accuracy of the information

disclosed (see Finding II.B.Z.);

5. proper disclosure of campaign debts and obligations (see

Finding II.B.3.);

6. -the-accuiacyo-rtot-ar-ie-poTted .re-ceipts;-disbursemerits··

and cash balances as compared to campaign bank records;

7. adequate recordkeeping for campaign transactions;

8.

9.

10.

accuracy of the Statement of Net Outstanding Oualified

Campaign Expenses filed by the campaign to disclose its

financial condition (see Attachment 5);

the campaign'S compliance with spending limitations (see

Finding III.C.); and

other audit procedures that were deemed necessary in the

situation.

As part of the Commission's standard audit process, an

inventory of the committees' records was conducted prior to audit

fieldwork. This inventory was conducted to determine if the

committees' records were materially complete and in an auditable

state. It was concluded that the records were materially

complete, except as noted below.

Our review of disbursements was hampered by the

campaign'S procedures for maintaining disbursement files. The

Page 7, 12/27/94
4

campaign ordered its disbursement files by parcel number1/ for its

draft account and by check number for its other accounts. With

~espect to other committees, such files are frequently ordered by

vendor. Ordering files by vendor allows for a more efficient

review of payments made and outstanding balances owed to a

particular vendor.

unless specifically discussed below, no material

non-compliance with Statutory and Regulatory requirements was

detected. It should be noted that the Commission may pursue

further any of the matters discussed in this report in an

enforcement action.

II. Findings and Recommendations Relative to Non-Repayment

Matters

A. Clinton/Gore '92 General Election Comoliance Fund

1. Disclosure of Occupation and Name of Employer

Section 434{b)(3)(A) of Title 2 of the United

States Code requires a political committee to report the

identification of each person who makes a contribution to the

committee in an aggregate amount or value in excess of $200 per ca-lend~- year_t-ogetheLwith_the__da_t~_~l1Q_alB()JJn to~_~m' __~u_ch

contribution.

Section 431(13){A) of Title 2 of the United States

Code defines the term -identification- to be, in the case of any

individual, the name, the mailing address, and the occupation of

such individual, as well as the name of his or her employer.

Section 432{i) of Title 2 of the United States Code

states, in part, that when the treasurer of a political committee

shows that best efforts have been used to obtain, maintain, and

submit the information required by this Act for the political

committee, any report of such committee shall be considered in

compliance with this Act.

Section 104.7(b) of Title 11 of the Code of Federal

Regulations states, in part, with regard to the identification, as

defined at 11 CFR 100.12, of each person whose contribution(s) to

the committee and its affiliates aggregate in excess of $200 in a

calendar year, the treasurer will not be deemed to have exercised

best efforts to obtain the reqUired information unless he or she

has made at least one effort per solicitation either by written

request or by an oral request documented in writing to obtain such

information from the contributor. Such effort shall consist of a

1/ The General Committee sent drafts to personnel in the field

in "parcels". A log was maintained for each numbered

"parcel." These "parcels" were numbered sequentially and

documentation was maintained by "parcels."

page 8, 12/27/94 '~~o!:tJ
5

clear request for the information (i.e., name, mailing address,

occupation, and name of employer) which request informs the

contributor that the reporting of such information is required by

law.

The Audit staff reviewed contributions from

individuals on a sample basis. The sample results revealed an

error rate of 50% with respect to disclosure of occupation and

name of employer. For some of the errors, the receipt

documentation available for review did not contain information

concerning related solicitations. Therefore, the Audit staff

could not determine if best efforts had been employed. In other

instances, the solicitation documentation provided did not contain

a request for name of employer. Other errors resulted from

instances where the information was obtained but not disclosed.

During the course of the audit, the Audit staff

advised the Compliance Fund of the high error rate. The

Compliance Fund was again advised of this matter at the exit

conference but did not provide an explanation.

c-.

Subsequent to the exit conference, the Compliance

Fund prOVided a form letter requesting occupation and name of

employer along with a listing of names to whom the letter was

...r.epo_rt.!!cl1.ys.eIl"t;-"_ ':l"he letter is dated July 19, 1993 ..It was noted

that approximately 8 srorthe-iiam-e-sof·fheinaivTduaTs- inCl·uded-Tn--·

the sample errors were contained on the listing provided. The'

Compliance Fund stated that "amended reports reflecting this

information will be filed in the near future." The Audit staff

was not made aware of this mailing during fieldwork and was not

offered the opportunity to review any responses.

In the Interim Audit Report, the Audit staff

recommended that the Compliance Fund submit documentation to

demonstrate that best efforts were utilized and file Schedules A-P

to disclose occupation and name of employer information obtained

as a result of the JUly 19, 1993 mailing or contained in

Compliance Fund files but not previously disclosed.

In response to the Interim Audit Report, Counsel

for the Compliance Fund states that the July 19, 1993 mailing

"demonstrates that best efforts were made to obtain the

information. In addition, the Compliance Fund has filed

Amendments to Schedules A-P disclosing the information obtained

from this mailing.

"The Compliance Fund further notes that all

solicitations for contributions to the Compliance Fund were

accompanied by a request for contributor information in compliance

with 11 C.F.R. 5104.7 .. ,. The Compliance Fund made best efforts

to request contributor information as required by 5104.7 at the

time of solicitation, and reported the information received. To

the extent that some information may have been received but not

reported, as speculated in the Interim Report, the omission was

page 9, 12/27/94
,-

6

inadvertent and may have been due ~o data entry errors." The

Compliance Fund also provided copies of sample contributor cards.

Although sample contributor cards were provided

that cont~in a request for the necessary information, these

samples do not obviate the fact that some of the contributor

response devices reviewed by the ~udit staff during fieldwork did

not contain a request for name of employer. In addition, as

discussed above, the receipt documentation for some of the errors

did not contain information asso~iating them with a particular

solicitation or with the samples submitted. As a result, the

Audit staff could not determine if best efforts had been made by

the Compliance Fund. The Audit staff is~lso of the opinion that

a letter sent eight months after the election, and after the

matter had been discussed with Compliance Fund representatives by

the Audit staff during audit fieldwork, does not demonstrate that

best efforts were made to obtain the information.

Although not submitted with its response to the

Interim Audit Report, the Compliance Fund has filed amended

reports which prOVide additional disclosures of occupation and

name of employer.

2. Funds from Non-Allowable Sources

cn

Sections 9003.3(a)(1)(i), (ii) and (iii) of Title

11 of the Code of Federal Regulations state that a major party

candidate may accept contributions to a legal and accounting

compliance fund if such contributions are received and disbursed

in accordance with this section. A legal and accounting

compliance fund may be established by such candidate prior to

being nominated or selected as the candidate of a political party

for the office of President or Vice President of the United

States. Contributions to this fund shall be subject to the

limitations and prohibitions of 11 CFR parts 110, 114 and 115.

Further, funds received during the matching payment

period that are remaining in a candidate's primary election

account, which funds are in excess of any amount needed to pay

remaining primary expenses or any amount required to be reimbursed

to the Presidential Primary Matching Payment Account under 11 CFR

9038.2, may be transferred to the legal and accounting compliance

fund without reQard to the contribution limitations and used for

any purpose per~itted under this section.

Finally, contributions that are made after the

beginning of the expenditure report period but which are

designated for the primary election, and contributions that exceed

the contributor's limit for the primary electicn, may be

redesignated for the legal and accounting compliance fund and

transferred to or deposited in such fund if the candidate obtains

the contributor's redesignation in accordance with 11 CFR 110.1.

Contributions that do not exceed the contributor'S limit for the

primary election may be redesignated and deposited in the legal

Page 10, 12/27/94 3.
tJ1

7

and accounting compliance fund only if the contributions represent

funds in excess of any amount needed to pay remaining primary

expenses; the redesignations are received within 60 days of the

Treasurer's receipt of the contributions; the requirements of 11

crR 110.I(b)(S) and (1) regarding redesignations are satisfied;

and the contributions have not been submitted for matching.

a. Fundraisinc Expenses Paid bv the Primary

Committee

The Compliance Fund and the Primary Committee

utilized a common vendor for fundraising purposes for a period of

time. The Compliance Fund sent two fundraising letters to donors

of the Primary Committee. The mailings included letters that

dealt with general election issues and requested a contribution to

the Compliance Fund. One of these mailings contained a photo of

the presidential and Vice Presidential candidates on the podium at

the convention which had been promised in an earlier fundraising

appeal by the Primary Committee. The other mailing contained a

lapel pin which had also been promised in an earlier mailing of

the primary Committee. Therefore, the mailings served a function

for both the Compliance Fund and the Primary Committee. The cost

of these mailings was allocated with the Primary Committee paying

85\ of the cost and the Compliance Yund paying the remaining 15\.

Documentation was not available detailing how

the allocation was determined. The Audit staff concluded that a

50\ allocation between the two committees would be more

appropriate given the dual function of the mailings. According to

the invoices for these mailings, the total costs were $371,855.

Of these costs, the Primary Committee paid $316,751. If a 50\

allocation is used, each committee should have paid $185,927.

Based on this allocation, the Compliance Fund owes the Primary

Committee $130,824 ($316,751 - $185,927).

The Compliance Yund representatives were made

aware of this matter at the exit conference. Subsequently, the

Compliance Fund provided a letter from the vendor dated October

27, 1993. This letter states, in part, that "It)his allocation

relates to two mailings made during the months August and

September, 1992, as to which the total cost of producing the

mailings were allocated by us based on the respective costs of the

fulfillment information and materials relating to the primary

campaign as compared to the cost of the components related to

GELAC [Compliance Fund) fundraising." However, this response did

not contain any documentation with which to verify that the

respective costs resulted in this 8S\ and 1S\ split.

The letter from the vendor also states that

the allocation was done by the vendor "in accordance with standard

accounting practice with regard to allocated costs in accordance

with the principles set forth by the American Institute of

Certified Public Accountants Statement of Position 87-2, relating

to accounting for joint costs of informational materials and

page 11, 12/27/94
L0

8

activities that include a fundraising appeal."

The Statement of Position explains that it

does not specify any allocation method but only provides guidance

concerning when an allocation is appropriate. Further, after

reviewing this publication, it is the Audit staff's opinion, that

the guidance. to the extent that it is relevant to this situation,

could be interpreted to suggest that the Compliance Fund should

pay the entire amount.

Given that: (1) FECA matters are not governed

by this accounting publication, (2) the purpose of the publication

is not wholly on point, (3) the nature of the guidance contained

in the publication, and (4) the dual purpose of the mailing, a 50\

allocation is appropriate.

The Interim Audit Report concluded that, given

the above, the 50\ allocation is appropriate. Therefore, the

difference between 50\ and 85\, or $130,824 is a Compliance Fund

expense.

In response to the Interim Audit Report, the

Compliance Fund disagreed with the Commission's determination that

a 50\ allocation was reasonable. The Compliance Fund states that

theCommi-ss-ion should follow B.equ~atLon_ll_ CrR§]. OEi-"-!J~J _!nd

allocate on the basis of Wthe benefit reasonably expected to-be

derived", According to the information obtained by the Audit

staff during fieldwork, the two mailings in question took place

on August 22 and August 28, 1992, over a month after the candidate

received the nomination, The apparent benefit to the Primary

Committee was the fulfillment of a promise to contributors who

were to receive a pin or photograph as the result of having made a

contribution, and to thank contributors for their support. The

Compliance Fund had the opportunity to solicit contributions from

a group of known Clinton supporters at a reduced cost. All

contributions were directed to the Compliance Fund. Thus,

allocating only 50\ of the cost to the Compliance Committee is a

conservative approach. A larger Compliance Fund allocation could

be supported,

The Compliance Fund is also critical of the

Audit staff not follOWing the American Institute of Certified

Public Accountants Statement of Position 87-2. As stated in the

Interim Audit Report, after reviewing this publication it is the

Audit staff's opinion, that the guidance, to the extent that it is

relevant to this situation, could be interpreted to suggest that

the Compliance Fund should pay the entire amount.

The Compliance Fund sent an affidavit from

Mitzi Dudley, the treasurer of Strategic Political Response.

According to the affidavit, the production cost for the

fulfillment material for the mailing with the lapel pin was

$232,346 (88.9\ of the total production costs of the mailing) and

the production cost of the reply elements were $28,791, or a total

Page 12, 12/27/94

~GRJ/.'a. j 2 t?

_" -'-__ "CIt /0 0
tn

9

cost of $261,137. The affidavit s~ates that production cost for

the fulfillment material for the mailing containing the photograph

was $106,782 and the General Committee's solicitation expense was

calculated at $17,872, for a total cost $124,654. Neither the

Complianc~ Fund nor the vendor provided any documentation to

support these amounts. However, on a reconciliation provided by

the vendor at the time of the audlt fieldwork the cost of the

mailing that contained the lapel pin was shown at $252,952 and the

cost of the mailing that contained the photograph was $118,903.

There is no explanation for the aifference in the amounts in the

affidavit and the documentation supplied during fieldwork.

According to the vendor and the Primary Committee, they did

overpay this vendor by $12,558 for these~ailin9s. The vendor may

have included part of the overpayment in calculating the $261,137

and the $124,654 totals.

Attachment 1 includes copies of the actual

mailings in question. The letters for both mailings are very

similar; Both had return envelopes that show the Clinton/Gore

Compliance Fund as addressee. Both include a Rapid Response

Action Memo, with the Compliance Fund address, a reference to

George Bush and Dan Quayle, and a solicitation to "Please make

personal check out to CLINTON/GORE COMPLIANCE FUND". The reverse

side of the memo requests contributor informatio~, once again

___ re_quests cQl\tr:il:lut~)t:s_t_o_JIlalt~__thei r check. payable to the

Compliance Fund and notes that ffwas-authodzed-andpaid-oy- ihe--------

Compliance Fund. About 60\ to 70\ of the letter deals with the

general election. There are two separate requests within the

letter for contributions to the Compliance Fund. According to the

vendor, "the General Committee's solicitation expense was derived

by allocating 20 percent of the cost of the letter (roughly

equivalent to the percentage of space that the solicitation took

up within the letter) to the solicitation".

Based on the information provided by the

Compliance Fund, the 50\ allocation is more than reasonable and

consistent with the Commission's regulations.

Another project, performed by this vendor at a

cost of $69,660, was paid entirely by the Primary Committee. This

project was for a compilation of contributor information to create

a "Master File." Over 90\ of the cost was incurred on invoices

dated after September 16, 1992 according to available records.

The primary Committee had utilized another vendor to handle the

majority of its receipts processing and to provide the Audit staff

with the required computer tape containing the contributions and

disbursements for the primary Committee. Also, Compliance Fund

representatives requested and received a magnetic copy of that

information from the Commission. Based on this information, the

Interim Audit Report concluded that the entire amount should have

been paid by the Compliance Fund.

page 13, 12/27/94
10

In response to the Interim Audit Report, the

Compliance Fund submitted an affidavit from Mitzi Dudley.

"All master file work was performed and invoiced to the

Primary Committee by Strategic Response as contractually

required and in furtherance of our understanding of

Primary Committee purposes. A primary purpose of a

master fil~ is to compile in computerized form all

pertinent information on responses to communications

sent by a particular entity for the purpose of using

those response [sic] to determine the nature, frequency

and recipients of any further communications. [sic] k

master file is commonly a master recordeof all donors

and other responders to such communications with a full

history of the time and nature of their responses

including, but not limited to, the date of all

responses, the amount of donations [sic] made (if anYIJ

and pertinent other information about such responses

(e.g., support for particular positions, source

information denoting the origination of the responder,

and other demographic and behavioral information

attributable to a responder as available). A master

file may be of significant surviving value to the entity

-------whi-ch--O-wtla-it_As__ i_t serves a crucial function as both l!l

historical document-a-s well a-Ii prov1d1nq-an -important--

record of those people who are most liKely to respond

again in the future. The existence of a master list of

potential future responders is crucial to a Prlmary .

Committee who. may need to continue soliciting

contributions beyond the ~andidate's nomination date to

payoff primary debt. In the present case, our

understanding was that the Committee was in fact

concerned that it would have a serious primary shortfall

and would be forced to raise funds well past the

Convention."

The affidavit also explains that responses

from primary solicitations continued to flow into the campaign

through at least November 18, 1992. - "After all responses were

Keyed as of that date, the master file then needed to be finally

built, cleaned and updated." The processing required to complete

the building of the master file stretched into December and it was

only after the work was complete that the vendor received a bill

from the data processing contractor.

From the information prOVided during the

fieldwork, the primary Committee's first fundraising maili~g by

this vendor was May 18, 1992 and the last July 17, 1992. The

Primary Committee paid for data entry and caging of the

contributions received. The earliest invoice was dated June 3,

1992 and invoices continued through November 25, 1992. The

Primary Committee paid over $140,000 for this activity, of which

$55,000 was invoiced after September 16. In fact, the Primary

Page 14, 12/27/94

_ 7",3<'

C_ f'
c

11

Committee overpaid by $24,500, which it later recovered as part of

a $49,856 refund. None of these charges are part of the $69,660

for compiling the Master File. From information obtained during

fieldwork, the Compliance Fund's first invoice for data entry and

caging was dated October 21, 1992 and its last fundraising mailing

was on October 9, 1992. The total amount the Compliance Fund paid

for data entry and caging was approximately $80,000. The

Compliance Fund did not present information to show that they had

paid for any Master File charges.

The response does not establish that this

project was part of the original contract, or was related to any

Primary Committee fundraising effort. Indeed the Primary

Committee had concluded that it was solvent in Auaust of 1992.

However, the information available does not establish the Master

File as a Compliance Fund project and, accordingly, it is not

included in the amount due to the Primary Committee.

The Audit staff identified another vendor to

which the Primary Committee paid $1,720 to defray Compliance Fund

expenses. The Compliance Fund has acknowledged that this amount

is owed to the Primary Committee.

Therefore, the Primary Committee has paid a

total of $132,544 ($130,824 + $1,720) in expenses whichs!loul~ __ have- been-paid -by-the -coiilpHanceFund .-------- --

b. Funds Redesignated from the primary Committee

c>

The Compliance Fund received $2,444,557 in

contributions which were redesignated and transferred from the

Primary Committee. The Regulations, as noted above, require that

contributions designated for the Primary Committee and made after

the beginning of the expenditure report period cannot be

transferred to the Compliance Fund unless the contribution is in

excess of the contributor'S primary limitation: or, the

contributions are in excess of funds needed by the Primary

Committee to pay remaining expenses. The Primary Committee did

not have sufficient funds to pay expenses until receipt of a

Matching Fund payment on September 2, 1992.

The amount transferred from the Primary

Committee to the Compliance Fund included $1,519,049 in

contributions received from the Compliance Fund's inception

through September 2, 1992. The Interim Audit Report concluded

that only $222,532 of these transferred contributions represented

either excessive contributions to the Primary Committee or

contributions intended for the general election; $66,846 prior to

July 16, 1992 and $155,686 subsequent to July 16, 1992.

Therefore, the Interim Audit Report stated

that the Compliance Fund received 51,296,517 (51,519,049 -

5222,532) in impermissible funds from the Primary Committee.

Page IS, 12/27/94
'..

.-.

12

Subsequent to September 2, 1992, the Primary

Committee received approximately $1,025,000 in contributions. Of

this amount, approximately $924,000 was redesignated to the

Compliance Fund properly under 11 CFR S9003.3(a)(iiil and is not

questioned at this time.

In response to the Primary Committee's exit

conference, Primary Committee representatives stated that they

dispute the auditors' assertion that these contributions could not

be redesignated to the Compliance Fund. They further stated that

this assertion is contrary to law. The contributors properly and

legally designated those contributions in writing for the

Compliance Fund pursuant to 11 crR Sll0.1 ~/, and the auditors

cannot prohibit the Primary Committee from maintaining those

contributions in the Compliance Fund.

With respect to the propriety of the

redesignation, the Interim Audit Report stated that 11 crR 5110.1

is not the relevant regulation. That regulation specifies the

procedures and time limitations that apply to a redesignation when

a redesignation is appropriate. As stated above, 11 crR

S9003.3(a)(1)(iiil clearly states that the redesignations pursued

by the Primary Committee were not permissible. That section

states that only if no remaining primary expenses are to be paid,

-may-prima-ry contributions-not--in e-xc~s&--o-f-t.he-~ont.r-i-butor-'-s-l-imit.----­

be redesignated to the compliance fund. The definition of

remaining primary expenses is clearly stated in 11 crR S9034.1(b)

which speaks to remaining matching fund entitlement. That

definition states that remaining net outstanding campaign

obligations is the candidate'S net outstanding campaign

obligations on the date of ineligibility less -the sum of the

contributions received on or after the date of ineligibility plus

matching funds received on or after the date of ineligibility."

The Interim Audit Report also explained that

the definition and the calculation of remaining entitlement to

which the Primary Committee objects enjoys a long and consistent

history in Commission regulation and practice. This

interpretation dates to a December 1976 memorandum to the

Commission proposing an amendment to then section 134.3(c)(2) of

the Commission's regulations. This proposed regulation stated

that "a candidate shall be entitled to no further matching funds

if, at time of any submission for certification, the total

contributions and matching funds received after the ineligibility

date equals or exceeds the net obligation outstanding on the date

of ineligibility."

The 1979 Explanation and Justification of 11

eFR 59034.1 explains that for candidates who have net outstanding

campaign obligations on the date of ineligibility, "[bJasically,

~/ Although Primary Committee representatives cited 11 crR

Sll0.2, the Audit staff presumes they meant 11 CFR 5110.1.

Page 16, 12/27/94 3 ptM'ift_-~~Vl':l'- 16 of ttJl)
13

these candidates are entitled to payments only if the private

contributions received between the date of ineligibility and the

date of submission are not sufficient to discharge the net debt."

A simplified example of the calculation follows the explanation.

Finally, it is explained that this regulation "furthers the policy

that the candidate should use private contributions to discharge

campaign obligations wherever possible." The 1983 Explanation and

Justification for the same provision states that the section had

"been revised to state that to receive matching funds after the

date of ineligibility, candidates must have net outstanding

campaign obligations as of the date of payment rather than the

date of submission. Thus, if the candidate's financial position

changed between the date of his or her submission for matching

funds and the date of payment reducing the ca~didate's net

outstanding campaign obligations, that candidate'S entitlement

would be reduced accordingly." This revision reinforces the

requirement that private contributions received must be applied to

obligations prior to the receipt of further matching funds. The

1991 Explanation and Justification for 11 CFR 59003.3 states that

"contributions redesignated must represent funds in excess of any

amount needed to pay remaining primary expenses. If this

requirement is not met, the committee would have to make a

transfer back to the primary account to cover such expenses."

_ __ Finally, each edition of the Commission's

Finane ial Cont-iol--an-d-CompHiiice-Manual- F-or-PresTdentiarPr1matyCandidates ReceiVing Public Financing, beginning with the first in

1979, has, in some form, provided, an explanation and example of

the calculation of a .primary committee's remaining matching fund

entitlement applying private contributions first and then matching

funds.

The Interim Audit Report concluded that the

Primary Committee's position is inconsistent with the plain

meaning of the Commission'S Regulations concerning post

ineligibility date matching fund entitlement as well as the long

established Commission practice and policy.

The Interim Audit Report recommended that the

Compliance Fund provide documentation and any relevant comments to

demonstrate that the above mentioned transfers were permissible.

Absent such a demonstration, the Audit staff recommended that the

Compliance Fund pay $1,296,517 to the Primary Committee.

In response to the Interim Audit Report, the

Compliance Fund puts forth several arguments why no repayment is

due. To begin with, the compliance Fund argues that the

contributions in question were not primary contributions bu~

rather were for the most part undesignated contributions received

after the date of the primary election and pursuant to the 11 crR

Sl10.1 general election contributions. As general election

contributions, the Compliance Fund contends that no redesignations

were necessary to transfer the contributions from the Primary

Committee. The response notes that the Primary Committee'S

Page 17, 12/27/94
vendor, who processed these contributions, treated them as

"redesignations" without the Primary Committee's knowledge. The

explanation suggests that due to provisions in that vendor's

contract, the vendor stood to gain by sending the redesignation

requests.

In support of their conclusion that no

repayment is due, the Compliance Fund, using its interpretation of

the provisions 11 CFR SllO.l, submitted calculations of amounts

that could be considered general election contributions without

need of redesignations. The calculations included lists by

deposit date and number of any amount that was considered to

represent general election contributions. The lists were divided

into three categories; contribution checks made payable to Clinton

for PresidentS/ with an unsianed primary contributor card attached,

contribution checks made payable to Clinton for President without

a contribution card attached, and contribution checks made payable

to other than Clinton for President with or without a contribution

card attached. The Compliance Fund's analysis includes

contributions through part of January of 1993, well beyond the

relevant period for determining the amount of contributions that

must be applied to the primary debt, and concludes that $2,773,327

in contributions deposited into primary accounts are actually

general election contributions. The Compliance Fund stated that

--- copies-of -the-contr-ibu-t-ion-checks--suppor-ting -their--analysis__were

available for our review at its Counsel's Offices. .

The Compliance Fund's response goes on to

state that the redesignations received serve to make clear the

contributor's intent in any case where the contributor'S intent is

unclear from the contribution check.

The Audit staff concluded that the Compliance

Fund's analysis was not consistent with the provisions of 11 CFR

SllO.l, not consistent with the matching fund regulations and the

post date of ineligibility matching fund entitlement system, and

not consistent with the Primary Committee's treatment of these

contributions.

AS noted, section 110.1 of the Commission's

regulations states that to be considered designated to a

particular election a contribution must clearly indicate the

election with respect to which the contribution is made. In the

view of the Audit staff, the majority of the contributions in

contention are so designated. By the Compliance Fund's

calculation over $2.2 million of the $2.8 million in post date of

~/ Included in this and the following category are checks that

include Clinton for President in the payee. Thus checks

payable to Clinton for President Committee, Bill Clinton

for president, Clinton for President Campaign, and other

similar combinations are included.

Page 18, 12/27/94
15

ineligibility contributions were made payable to the Primary

Committee and $1.6 million of that was photocopied with a Primary

Committee solicitation attached. The Primary Committee and

Compliance Fund have different and distinctive names, Clinton For

President Committee vs. Clinton/Gore '92 General Election

Compliance Fund. Each entity had its fundraising appeals that

made it clear which committee was soliciting the contributions.

Each committee is a separate entity, has separate accounts, files

separate reports with the Commission and has different funding

sources. Therefore, the Audit staff stated that a check made

payable to Clinton For President is designated in writing for the

primary election and to conclude otherwise would be inconsistent

with other provisions in the matching fund regulations. As

explained above, the Commission's regulations have for many "'ears

held that after the date of ineligibility private contributions

must be applied to a primary campaign's deficit before any

matching funds may be received by the committee. The Audit staff

concluded that to allow contributions SOlicited by, made payable

to, received by, and deposited by the Primary Committee may be

transferred wholesale to the Compliance Fund is completely

inconsistent with the matching fund regulations. Rather than

minimize the amount of post date of ineligibility matching funds

paid to a candidate such an interpretation would encourage

candidates to manipulate their contributions in such a way as to

'. ~~x~~~_ze ttl~JJ __!~~~j._p~_~f__JI1.at_~_t)_~I'!9 _~~n~~_· __ _ _

The Audit staff analysis also concluded that

other sections of the Commission's regulations governing the

matching fund program support the Commission's interpretation. In

11 CFR 59034.8(c)(7)(iv), it is clear that when dealing with joint

fundraising by publicly funded campaigns, contribution checks made

payable to a particular participant are considered to be earmarked

or designated to that participant. The case at hand is similar.

The contribution is made payable to a particular committee. The

difference is that 11 CFR 59003.3(a)(I)(iii) prohibits the

redesignations.

c. Section 9034.5(a)(2)(i) of Title 11 of the

Code of Federal Regulations defines cash on hand to include all

contributions dated on or before the date of ineligibility. This

includes checks received on the last day of ineligibility, but

deposited after the date of ineligibility. The Compliance Fund's

analysis of the Primary Committee's contributions includes as

general election contributions some contributions dated on or

before the date of ineligibility. Finally, section 9034.2 of the

Commission's regulations define, in part, a matchable contribution

to be one that is dated, physically received and deposited by the

candidate, or any of the candidate's authorized committees, on or

after January 1 of the year immediately preceding the calendar

year of the Presidential election, but no later than December 31

following the matching payment period, and made payable to the

candidate or his or her authorized committees. The Audit staff

concluded that following the Compliance Fund's analysis none of

the contributions dated after the date of ineligibility should

page 19, 12/27/94
L::

16

have been submitted for matching by the Primary Committee. To

match such contributions would suggest that contributions intended

for the general election and transferable to the Compliance Fund

could be matched for the Primary Committee.

In the opinion of the Audit staff, the

Compliance Fund's own analysis was inconsistent with respect to

these contributions. The lists supporting those contributions

made payable to Clinton For President begin with deposits on

August 6, 1992. The apparent reason is that the primary

Committee's final matching fund submission contained contributions

deposited through August 5, 1992. A sample of the contributions

deposited between the date of ineligibility and August 5, 1992,

was selected and examined to determine if those contribution

cheCKS were different with respect to payee or election

designation. No difference was noted. Thus it appears that more

significant to the Compliance Fund's analysis than an express

election designation, is whether the Primary Committee submitted

the contribution for matching. Even more revealing was a review

of the contributions contained on the Primary Committee's list of

contributions not made payable to Clinton For President and now

considered general election contributions. First, a number of

contributions are dated before the date of ineligibility and are,

therefore, considered cash on hand for NOCO purposes. Second, a

spot ~he-ck- of-~he-contr ibuUonsonthis _1 i st_dated __a_ft~ L tltt!da_t~_

of ineligibility and deposited before August 6, 1992 indicates"

that the majority of the contributions were submitted for matching

and matched. In the opinion of the Audit staff, the Compliance

Fund cannot have it both ways.

The Compliance Fund's response to the Interim

Audit Report goes on to argue that in August of 1992 the primary

Committee made a calculation of the cut off date beyond which no

further matching funds would be sought. The Compliance Fund

contends that this estimate was made without benefit of hindsight

or the results of the audit. As a result, the Compliance Fund

states that fewer contributions were raised for the Compliance

Fund than would have been the case had the Compliance Fund known

the position that the Commission would take with respect to post

date of ineligibility contributions. The Compliance Fund argues

further that to require the transfer of funds back to the primary

Committee would result in unfairness to the Compliance Fund

because it may leave an insufficient amount to pay continued

general election winding down costs.

This argument appears to refer back to the

Primary Committee's response to this issue at the exit conference

and its later response to the exit conference. As explained above

and in the Interim Audit Report, in the opinion of the Audit

staff, the Primary Committee's calculation was not in accordance

with the Commission's current regulations or long standing

practice. Therefore, for the Commission to forgo the transfer

from the Compliance Fund and the recapture of matching funds in

excess of entitlement from the Primary Committee, would constitute

page 20, 12/27/94
page 21, 12/27/94

a matching fund subsidy for the Compliance Fund. Such a subsidy

would be well beyond the statutory scheme.

The Compliance Fund also objects to the

application of both private contributions and matching funds as

each is received rather than accounting for matching funds at the

time of submission. The Compliance Fund notes two perceived

problems with this system. First is the uncertainty of a

committee's private contribution flow between the time a

submission is made and the time matching funds are paid. The

Compliance Fund contends that it is possible for a candidate's

matching fund entitlement to change significantly between those

two dates making the determination of when no further funds are

needed impossibl~. The Compliance Fund suggests that a better

approach would be to include matching funds in the calcula~ion at

the time of submission. As explained above and in the Interim

Audit Report, the system in place furthers the goal of having

campaigns, to the extent possible, pay debts after the candidate's

date of ineligibility with private contributions. As for knowing

when no further matching funds are needed, it is the committees

that are in the best position to know if any matching fund

entitlement remains. It is the committees that know on a current

basis what changes may have occurred with respect to their NaCO,

what contributions have been received and the amount of any

_______ ._. pt!J'l.Q.i_ng_ll!.a_t~ni_n.9 __fund.s.~bJll.!~Ls.;.Q_n. _ __

Secondly, the Compliance Fund suggests that

the current procedure is unfair to the candidate who processes

contributions more slowly. The Compliance Fund uses as an example

a case where contributions received one month are not processed

until the next, causing a delay in the receipt of matching funds

for those contributions. The alleged inequity that the Compliance

Fund addresses occurs if the candidate is able to raise sufficient

private contributions to liquidate his NOCO before having an

opportunity to submit the earlier contributions and have them

matched. Again the Commission's long standing policy is to

encourage committees to use private contributions to pay campaign

debts. The Compliance Fund's suggestion to make the entitlement

calculation at the time of submission rather than at the time of

payment would maximize the receipt of matching funds, while

potentially leaving the candidate with surplus private

contributions received after the last matching fund submission is

made.

As a final point the Compliance Fund includes

a footnote that states:

"The Committee believes that the Commission's approach in

this regard is inconsistent with the legal concept of

'entitlement.' A candidate who qualifies for matching

funds is entitled to receive them in an amount equal to

matchable contributions raised up to 50\ of the

expenditure limitation. 26 U.S.C. S9034. The process

would be far less costly and simpler to administer if

__•..mId!. J.. - ~-of jOt:

~-
· -=" • ~- -

18

the Commission, as envisioned by the statutory language,

were to match qualifying contributions up to the SO\

limitation and seek a ratio surplus repayment once all

obligations have been satisfied. 26 U.S.C. S9038(b)(3).

In fact, if the Commission followed the statutory scheme

it may be possible to resolve the audits within the six

months contemplated in the surplus repayment provision.

Id. "

The Compliance Fund's Counsel's highly

optimistic analysis of the benefits of the recommended change in

approach aside, it is noted that the Commission considered and

rejected just such a system in the course of its 1987 amendments

to the Matching Fund Regulations. More recently, a July 8, 1994,

opinion by the U.S. Court of Appeals for the District of Columbia

in Lyndon H. LaRouche and LaRouche Democratic Campaign '88 v.

Federal Election Commission is relevant. In that decision the

Court quotes 11 crR 59034.1(b) concerning the application of

private contributions to a candidate's NOCO and states:

',,-

t.n

ftThis language would appear to be dispositive. A

candidate is entitled to receive post-DOl matching

payments so long as net campaign obligations remain

outstanding; and the regulation defines a candidate's

.---- ..- '.remaining! NOCO J.'-_. as.the_diffe rence_be.tween.the__amount._

of his original NOCO and 'the sum of the contributions

received ••• plus matching funds received.' ... Whenever

the sum of his post-DOl receipts equal the amount of his

NOCO-whether those receipts be in the form of private

contributions or matching payments from the public

fisc-his entitlement to further matching payments comes

to an end. Even if we were to find the regulation

ambiguous, which we do not, we would still have to

accept the Commission's interpretation of section

9034.1(b) unless we found it 'plainly inconsistent with

the wording of the regulation,' .•. which it is not.

ftHaving concluded that the Commission's

interpretation of its regulations is not merely

reasonable, but compelling, we must determine whether

the regulations, as construed, represent a permissible

interpretation of the Act."

Page 22, 12/27/94

ftHere, petitioners have failed to cite anything in

either the language or structure of the Act that would

render the Commission's interpretation of section

9033 (c) (2) unreasonable. To the contrary, its

provisions make it clear that Congress wished to

restrict the availability of matching payments to

candidates it consider[s] viable. Thus the Act

expressly limits the class of those who are eligible for

funds, 26 USC 5 9033, and it withdraws the eligibility

of candidates who fail to receive at least ten percent

of the vote in two successive primaries. Id S
19

9033(c){l){B). Under the circumstances we fail to

discern why it is impermissible for the Commission to

adopt a regulation that terminates post-DOl matching

funds as soon as a candidate has received sufficient

funds from private and public sources to liquidate his

NOCO, whether or not they are so used."

Although President Clinton did not become

ineligible due to a failure to receive 10\ of the vote in two

consecutive primaries, once he had passed the date of

ineligibility the provisions of 11 CFR S9034.l are applicable and

as the Court concluded, consistent with the statutory scheme.

After considering the Compliance Fund's

arguments and examining the documentation assembled to support

their calculations, the Audit Staff again reviewed the

composition of the $155,686 allowance for contributions

transferable to the Compliance Fund included in the Interim

Audit Report calculations. That allowance included $34,585 in

excessive contributions redesignated to the Compliance Fund,

$52,357 specifically designated to the Compliance Fund by virtue

of the payee or a notation on the check's memo line, and $68,744

in contributions that were made payable to a non-specific payee

(e.g. Bill Clinton, Clinton Team, Clinton Campaign, etc.), dated

after the date of ineligibility, and not associated with any .. SOrrel tatTcln-:--lnfurtner-teview-,-i t-was learned-that-many()f- -

the contributions in the non-specific payee category deposited

after the date of ineligibility and through August S, 1992 were

submitted for matching by the Primary Committee and matched.

This is in accord with the Commission's Guideline For

Presentation In Good Order and Regulations which state that a

matchable contribution is to be made payable to the candidate or

his or her authorized committees. Thus it was apparent that the

Primary Committee treated contributions with such payees as

primary contributions. The Audit Staff could see no reason to

challenge that treatment. The amount that is calculated as

transferable to the Compliance Fund from contributions received

and deposited by the primary Committee after the date of

ineligibility and through September 2, 1992 was $99,806. That

amount consists of $34,585 in redesignated excessive

contributions, $56,792 in checks made payable to or otherwise

designated to the general election campaign, and $8,429 in cash

contributions identified during the review of records made

available with the Compliance Fund's response to the Interim

Audit Report.

For the above stated reasons, the Audit staff

concluded that the Compliance Fund owes the Primary Committee

$1,353,397. The Audit staff determined this figure by reducing

the $1,519,049 in contributions included in amounts transferred

from the Primary Committee to the Compliance Fund by $66,846,

which represents excessive contributions or contributions intended

page 23, 12/27/94
20

for the General Election received prior to July 16, 1992; and by

$99,806, representing such contributions received between July 16

and September 2, 1992.

During the consideration of the Final Audit

Report for the primary Committee on December 15, 1994, the

Commission considered the question of the application of private

contributions to the Primary Committee's remaining net outstanding

campaign obligations as of the date of each matching fund payment,

versus treating most post date of ineligibility contributions as

containing no election designation and therefore transferable to

the Compliance Fund.

A motion was made to support the Audit staff

analysis requiring the application of private contributions to the

Primary Committee's remaining net outstanding campaign obligations

before the payment of further matching funds. That motion failed

by a vote of three to three with Commissioners Potter, Elliott and

Aikens voting in favor and Commissioners McDonald, McGarry and

Thomas voting against. A second motion to consider all post date

of ineligibility contributions unmatchable unless specifically

designated for the primary election also failed by the same vote.

As a result of these Commission votes, the Compliance Fund will

not be requested to return $1,353,397 to Primary Committee as re~ommended -by__the_Audi_t__s_taJ_f:.

B. Clinton/Gore '92 Committee

1. Apparent Prohibited Contribution

tf)

Sections 116.3(b) and (c) of Title 11 of the Code

of Federal Regulations state that a corporation in its capacity as

a commercial vendor may extend credit to a candidate, a political

committee or another person on behalf of a candidate or political

committee provided that the credit is extended in the ordinary

course of the corporation's business and the terms are

substantially similar to extensions of credit to nonpolitical

debtors that are of similar risk and size of obligation. Further,

in determining whether credit was extended in the ordinary course

of business, the Commission will consider whether the commercial

vendor followed its establiShed procedures and its past practice

in approving the extension of credit; whether the commercial

vendor received prompt payment in full if it previously extended

credit to the same candidate or political committee; and whether

the extension of credit conformed to the usual and normal practice

in the commercial vendor's trade or industry.

The Audit staff reviewed an invoice from Chambers

Associates, Inc., in the amount of $117,316 for professional fees

and expenses. This invoice stated that it was "for services

performed and costs incurred prior to the November 1992 General

Election." The General Committee paid this invoice on March 19,

1993. It was also noted that this was the only payment made to

this vendor by the General Committee.

Page 24, 12/27/94
In response to the exit conference, the General

Committee provided invoices from the vendor to document in more

detail the S117,316 in expenses. According to these invoices,

expenses were incurred beginning in August and continued until the

time of the election. The General Committee also stated that

"Chambers Associates provided services in October related to

economic issues. The original invoice was submitted to someone on

the campaign staff in December or January but was misplaced. When

the ommission [sic] was noted, the Committee requested that the

vendor provide another invoice which was received and paid in

March." However, there was still no documentation from the vendor

to demonstrate when this amount was originally billed and any

subsequent billings or efforts to collect this amount.

Based upon the available information, the Interim

Audit Report concluded that the extension of credit for this

amount and length of time did not appear to be in the ordinary

course of business and resulted in a prohibited contribution

pursuant to 11 crR 5116.3.

The Interim Audit Report recommended that the

General Committee provide documentation, to include but not be

limited to, statements and invoices from the vendor detailing all

-- billings -and-efforts--to--collect--this--amount ;--and-expl-ana-t-ions- -to--

demonstrate that the extension of credit from this vendor was in

the ordinary course of business and did not represent a prohibited

contribution pursuant to 11 CFR 5116.3. The information was to

include examples of other customers or clients of similar size and

risk for which similar services hade been provided and similar

billing arrangements had been used. Also, information concerning

billing policies for similar clients and work, advance payment

policies, debt collection policies, and billing cycles should be

provided.

In response to the Interim Audit Report, the

General Committee prOVided an affidavit from the President of

Chamber Associates, Inc., which states that:

"Our firm uses three methods of billing in its

normal course of business. One method is to bill by

project and to submit a bill upon completion of that

project. We are currently involved in two other

projects which are also being billed on a completion of

project basis.

"The bill was prepared and sent in January, 1993,

as soon as practical upon completion of the work we did

for the Campaign Committee, and was carried as an

account receivable along with other client bills which

were prepared and sent at approximately the same time.

Several factors contributed to the timing of the

billing. First, since so many travel and other

incidental expenses were incurred, we wanted to make

Page 25, 12/27/94
22

certain we had received all invoices so a correct

accounting could be made. Second, my assistant and I

took a leave of absence from our firm after this project

was completed for approximately two and one-half months.

I approve all bills before they leave our office, and

because this bill was very detailed, additional time

elapsed before I had the time to review it carefully.

Finally, once satisfied that the bill was accurate and

complete, it was inadvertently sent to the wrong office.

Our office then sent another invoice to the Campaign

Committee which was received and paid in March, 1993.

Accordingly, the billing was paid within 60 days of

issuance of the original invoice which is well within

the time frame for receipt of payment from our

non-political clients and, accordingly, within the

ordinary course of our business.

"For a billing which is straightforward and

uncomplicated, the issuance of an invoice would occur no

earlier than the month following completion of the

project (anytime from the first through the middle of

that month.) For example, even for a project completed

in November, 1992, which did not require extensive,

complicated accounting of expenses, our invoice would

-have--been-issued--no-ear-li.er--t.hanmi-d-Oecember,-1992- _As _

noted above, however, this case involved a very complex

billing process because of the number of travel and

incidental expenses and the need to be especially

accurate in order to ensure that all expenses incurred

were properly accounted for and billed. Despite the

complex accounting reqUired for this billing, the

invoice in this case nevertheless was issued within a

short period of time from the earliest possible date of

issuance had it been a straightforward, simple billing."

"Chambers Associates did not prOVide the Campaign

Committee with an extension of credit outside its normal

course of business. Moreover, as demonstrated above,

there was no intention by Chambers & Associates to make

a contribution. All aspects of the billing process were

handled within the normal course of business."

Based upon the documentation SUbmitted, it appears

that the General Committee has demonstrated that this billing did

not constitute an extension of credit outside of the normal course

of business. Chambers Associates, Inc. was able to provide names

of other clients who are billed under a similar arrangement and

was also providing services consistent with its normal business

practices. Given the above, the Audit staff does not believe that

the General Committee received a contribution resulting from an

extension of credit outside of the ordinary course of business.

page 26, 12/27/94
tJ;

c.

23

2. Itemization of Refunds and Rebates

Section 434(b)(3)(F) of Title 2 of the United

States Code requires that each report include the identification

of each p~rson who provides a rebate, refund, or other offset to

operating expenditures to the reporting committee in an aggregate

amount or value in excess of S200'within the calendar year,

together with the date and amount of such receipt. Section

431(13) of Title 2 of the united States Code defines, in part, the

term "identification" to be the rrame and mailinq address of such

person. Section 431(11) of Title 2 of the United States Code

defines, in part, the term "person" to include an individual,

partnership, committee, association, corRPration, labor

organization, or any other organization or group of persons.

The General Committee's receipt reco~ds were

reviewed by the Audit staff to determine whether offsets to

operating expenditures requiring itemization were disclosed

properly. The Audit staff noted problems with respect to the

disclosure of receipts from Worldwide Travel, Inc. ("Worldwide").

The General Committee utilized Worldwide to handle billings and

receipts relative to press and u.s. Secret Service travel. As

Worldwide received moneys, it would deduct credit card fees and a

commission for its services. The net amount would then be

_t ransf-eIIed_to__ the__G~nera_l_Commi_tt_e_e __a_nd_ rep-0_C~f!_d_o_n __i~s_

disclosure reports as a receipt from Worldwide. There were no

corresponding entries detailing the press organizations who

actually paid for the travel. In addition, credit card fees and

the fee charged by Worldwide for its services were not reported as

a related disbursement.

When apprised of this at the exit conference, a

General Committee official stated she thought that they had

received Commission guidance concerning this but said she would

have to check before she could respond.

Subsequent to the exit conference, the General

Committee again stated that "Committee staff was advised by

someone at the FEC that its methods of reporting receipts for

press travel from Worldwide complied with the reporting

requirements of FECA." The General Committee also responded that

its "method of reporting is consistent with the reporting

requirements applicable when refunds and payments are received by

a committee through a commercial vendor."

The Interim Audit Report concluded that, since

Worldwide acted only as a billing/collection service, the amounts

received from each press agency and the Secret Service should be

disclosed on schedules A-P as a memo entry to support each amount

received from Worldwide. In addition, adjustments for the credit

card fees deducted and commission charged by Worldwide should have

been disclosed as memo entries on Schedule B-P.

Page 27, 12/27/94
'J")

24

The Interim Audit Report recommended that the

General Committee file amended Schedules A-P and B-P to disclose

the offsets to expenditures, credit card fees, and commissions.

In response to the Interim Audit Report, Counsel

for the General Committee states that "the Committee contends that

it properly disclosed these reimbursements as received from

Worldwide Travel and that further itemization is not required by

the Act, regulations or other Commission precedents. The General

Committee's response states that:

"2 U.S.C. S 434{a) requires committees to file

reports of receipts and disbursements. Generally, all

reporting under the Act, other than debts and

obligations is on a cash basis. The Commission has

addressed a virtually identical issue to this one as to

disbursements made by presidential committees. In AO

[Advisory Opinion] 1983-25, the Commission concluded

that the itemization of disbursement requirements were

met when a publicly financed campaign reported payments

to its media vendor, and further held that the committee

was not required to itemize payments SUbsequently made

by the vendor on behalf of the committee. Thus,

although committee vendors are required to maintain

docUlIlentation-of disbursements made to subvendors on

behalf of a committee, the committe-e1s--not- req-uirecrto'-

report or itemize such disbursements. The collection

and receipt of reimbursements though [sic) a third party

vendor is indistinguishable from the situation 'in AO'

1983-25.

"11 C.F.R. S 104.3(a)(4)(v) requires only that a

committee identify each person who provides a rebate,

refund, or other offset to operating expenditures to the

reporting committee 'in an aggregate amount or value in

excess of $200 within the calendar year. The Committee

satisfied that requirement by reporting the receipt of

press and secret service reimbursements from Worldwide

Travel which was operating as a vendor to the Committee

in billing and collecting press and secret service

reimbursements. All records pertaining to these

collections were made available for audit as in AO

1983-25. The reporting requirements, however, were

fully met by reporting the receipts form [sic]

Worldwide. As in AO 1983-25, the Primary Committee's

travel vendor was a distinct legal entity which entered

into an arm's length commercial arrangement with the

Committee. Worldwide Travel was neither set up by th~

primary Committee, nor was the Primary Committee its

only client. It is and was an ongoing travel business."

"The Committee sought informal advice from the

audit staff regarding whether these reimbursements must

be itemized and was advised that they need not be. We

Page 28, 12/27/94
25

believe that advice was fully consistant [sic] with the

requirements of S 434{b)(3)(f), S l04.3(a)(4){v) of the

regulations and AD 1983-25. The Committee believes that

the auditors now are taking the position that the

worldwide reimbursements must be itemized simply because

most committees have collected these refunds themselves

and have not used a third party vendor to collect press

and secret service reimbursements.

"Although the Committee believes that its reporting

was in full compliance with the requirements of the Act,

the Committee has prepared amendments as directed by the

auditors itemizing the receipts from each press and

secret service entity to the extent possible, and will

be filing them shortly."

Advisory Opinion ("AD") 1983-25 addresses a media

vendor, contracted by a committee to administer its media

production and media buys, and who, in the course of performing

its duties would make disbursements to various advertising

entities. In the case at hand, the General Committee paid for the

chartering of aircraft, maintained travel manifests which

identified the number of press, secret service and General

Committee personnel traveling on a particular trip, and the cost

Qteach trAp-"__ T_hJs~f~r:lIlllticm",~s__s\lbseq:uently provided to

Worldwide Travel which acted as a billing-and collectionagent-for

the General Committee. The monies received from Worldwide did not

represent a refund of General Committee funds paid to Worldwide

Travel for services rendered. The monies represent refunds for

travel incurred by the various press organizations and Secret

Service personnel.

In AD 1983-25, the following factors were

considered significant in making its determination: (1) the

consultants had a legal existence that was separate and distinct

from the committee's operations; (2) the consultants' principals

did not hold any committee staff positions; (3) the committee was

conducting arms-length negotiations with the consultants that

resulted in a formal contract; (4) the consultants were not

required to devote their full efforts to the contract with the

committee, and the consultants expected to have other media

contracts with other committees and business entities during the

campaign period, and (5) the committee had no interest in the

consultants' other contracts.

Based on its responses and documentation provided

to date, the General Committee has not addressed all the factors

noted above.

Therefore, the receipts should have been disclosed

as refunds from the organization which was the actual source of

those funds. The press and Secret Service were the providers of

the refunds to the General Committee. Worldwide Travel was merely

a conduit for the receipts of those refunds.

page 29, 12/27/94
.. ~-

26

The General Committee also states that "informal

advice" was received from the Audit staff. The Audit staff is

unaware of any advice given to the General Committee concerning

this matter. In addition. the General Committee has been unable to

identify the person who provided this advice.

Although amended Schedules A-P were not submitted

with its response to the Interim Audit Report. the General

Committee has recently filed amended reports that adequately

address this matter.

3. Reporting of Debts and Obligations

Section 434(b)(8) of Title 2 of the United States

Code states that each report shall disclose the amount and nature

of outstanding debts and obligations owed by or to such political

committee; and where such debts and obligations are settled for

less than their reported amount or value, a statement as to the

circumstances and conditions under which such debts or obligations

were extinguished and the consideration therefor.

Section 104.11 of Title 11 of the Code of Federal

Regulations states, in part, that debts and obligations owed by or

. ------ --t.o-a-political- commi ttee- which remain- outstanding shall be- ------

continuously reported until extinguished. In addition, a debt,

obligation, or written promise to make an expenditure, the amount

of which is $500 or less, shall be reported as of the time payment

is made or no later than 60 days after such obligation is

incurred, whichever comes first. Any loan, debt or obligation,

the amount of which is over $500, shall be reported as of the date

on which the debt or obligation is incurred.

From the Audit staff's review of selected

disbursements, we determined that the General Committee did not

materially disclose its debts and obligations on Schedule D-P.

Our review of General Committee invoices and related payments

indicated outstanding debts and obligations totaling $1,207,730

which were not reported as required on the General Committee's

disclosure reports.

At the exit conference, General Committee

representatives were provided photocopies of schedules detailing

these debts and obligations. General Committee officials provided

no explanations for these omissions.

Subsequent to the exit conference, documentation

submitted by the General Committee stated that "the Committee

reported its debts and obligations as of the time the check

request was approved and received in the accounting department.

The Committee believes that its method of reporting debts was in

full compliance with the reporting requirements," In addition,

the General Committee provided a detailed schedule listing the

dates on which the invoices were recorded.

Page 30. 12/27/94
2i

The Audit staff found the General Committee's

response to be without merit. The Regulation determines when a

debt shall be reported. The date the obligation is incurred is

relevant, not the date on which a committee records an obligation.

The Interim Audit Report recommended that the

General Committee file amended Schedules D-P to disclose the

debts and obligations.

c

In response to the Interim Audit Report, Counsel

for the General Committee states that "subsequent to the exit

conference, the Committee provided the auditors with a schedule

listing the dates on which the invoices questioned by the a~ditors

were reported. The Committee sees no sense 1n amending its

reports to disclose information that the Committee did not have in

its possession at the time those reports were originally filed.

"The Committee does not dispute that debts and

obligations in excess of $500 must be reported when the obligation

is 'incurred.' 11 C.F.R. S 104.11. However, the Committee's

accounting staff which was responsible for entering debts and

compiling the information to produce the debt schedules had no

information concerning those debts until such time as the

information regarding the debts was submitted to the accounting

. c1e~r t:.me~t.. The_CoD1lllit_t.e.!._.i.1\_.r;.0.!De",~at_IDYIi.ti Ut!(t!S_t().J'1()1o'. U",cls.

supposed to know about debts prior to the time they were entered

into the accounting system. The only way the Committee could have

done this during the course of the campaign w~ld have been to

amend the prior month's debt schedule each month when the 'current

month's disclosure, report was filed. Certainly it would be a

complete waste of time and serve no purpose to amend the debts

schedules now to move debts from one monthly period to another

monthly period."

In addition, the General Committee states that its

CPA discussed this issue with a member of the Audit staff who

"acknowledged that the Committee could not very vell report debts

of which it was unaware." The General Committee then concludes

that no further action regarding this recommendation is

warranted."

Page 31, 12/27/94

Again, the Audit staff does not find the General

Committee's position to be convincing. While the Audit staff does

understand that something not known to the General Committee can

not be reported, it is noted that reports are not filed the day

after the end of a reporting period. Committees have a reasonable

period of time to insure that reports filed are accurate and

complete. Further, there is nothing to preclude a committee from

filing amended disclosure reports once additional information

becomes known. In addition, the review allowed a period from the

date of the invoice for delivery to the General Committee when

determining which debts were to be reported. Thus, we believe that

the General Committee was allowed ample opportunity to receive

invoices and report them as debts as necessary.
28

To date, amended Schedules D-P have not been filed

by the General Committee.

I. Findinqs and Recommendations - Repayment Matters

A. Apparent Prohibited Contributions

Section 9003(b)(2) of Title 26 of the United States Code

provides that in order to be eligible to receive any payments

under section 9006, the candidate of a major party in a

presidential election shall certify to the Commission, under

penalty of perjury, that no contributions to defray qualified

campaign expenses have been or will be accepted by such candidate

or any of their authorized committees except to the extent.

necessary to make up any deficiency in payments received from the

fund.

Section 9007(b)(3) of Title 26 of the United States Code

states that if the Commission determines that the eligible

candidates of a major party or any authorized committee of such

candidates accepted contributions (other than contributions to

make up deficiencies in payments) to defray qualified campaign

expenses, it shall notify such candidate of the amount of the

-----contributions so-- accepted i--and--suchcandidate~--shall-pay-to--the--------

Secretary of the Treasury an amount equal to such amount.

Section 441b(a) of Title 2 of the United States Code

states, in relevant part, that it is unlawful for any corporation

to make a contribution or expenditure in connection with any

election for federal office or for any candidate, political

committee, or other person knowingly to accept or receive any

contribution prohibited by this section, or any officer or any

director of any corporation to consent to any contribution or

expenditure by the corporation prohibited by this section.

In addition, Section 100.7(a)(1) of Title 11 of the Code

of Federal Regulations states, in part, that the term contribution

includes a gift, advance or deposit of money or anything of value

made by any person for the purpose of influencing any election for

Federal office.

Section 100.7(a}(1}(iii)(A} of Title 11 of the Code of

Federal Regulations states that for purposes of 11 CFR

100.7(a}(1), the term "anything of value" includes all in-kind

contributions. Unless specifically exempted under 11 eFR

lOO.7(b), the provision of any 900ds or services without charge or

at a charge which is less then the usual and normal charge for

such goods or services is a contribution. Examples of such goods

and services include, but are not limited to: Securities,

facilities, equipment, supplies, personnel, advertising services,

membership lists, and mailing lists. If goods or services are

provided at less than the usual and normal charge, the amount of

the in-kind contribution is the difference between the usual and

Page 32, 12/27/94 _UIBGft 3

;;: 2- o! /6
..... ······;El

\-- .

29

normal charge for the goods or services at the time of the

contribution and the amount charged the political committee.

Further, 11 crR S100.7(a)(1)(iii}(B) defines, in

relevant part, ~Usual and normal charge~ for goods as the price of

those goods in the market from which they ordinarily would have

been purchased at the time of the contribution.

During the Audit staff's review of disbursements and

offsets to expenditures, we identified nine transactions which

appeared at the time of the Interim Audit Report to result in

prohibited contributions to the General Committee. The total of

those apparent prohibited contributions was $153,625. A

discussion of the circumstances surrounding those transactions

follows:

1. Donated Equipment

Included with invoices to support a payment to a

General Committee vendor were additional invoices which indicate

that the vendor donated sound equipment for use during a rehearsal

for a press conference to be held in Atlanta, Georgia. The stated

value of this donated equipment was $1,070. The General Committee

___ __ was provided documentation relative to this matter during --fi ilaw-orK-.--Tnematr;e r-was- a-lso--addr-essed-a-t-the-e.xi.t-_conb re_llCe .

Subsequent to the exit conference the General

Committee stated, Ras is customary practice for the company, the

equipment for the rehearsal was made available at no charge

because it was not rented for that time. R

The Audit staff was not aware of the customary

practice for providers of sound equipment. Absent a statement

from the vendor demonstrating that this was indeed customary

practice, it was our opinion that this transaction resulted in an

in-kind contribution of $1,070.

The Interim Audit Report recommended that the

General Committee prOVide documentation to include a statement

from the vendor addressing this matter, and any relevant comments

to demonstrate that it did not receive an in-kind contribution

totaling S1,070.

In response, the General Committee provided an

affidavit from the President of the company. He stated that

"concerning the use in question, I arrived at the event location

and began setting up for the scheduled event. In the course of

doing so, I noticed that the Committee was holding a rehearsal

session. As I have done with many of my non-political clients, I

approached Committee members and asked if they would like to have

sound support for the session. I informed them that since the

equipment and I were already present and there was no conflicting

engagement, I would turn the equipment on for the rehearsal. As

this represented no additional financial, resource, or time

Page 33, 12/27/94
30

obligation on my part or of my company, I did not require an extra

charge. As is our standard practice, although no charge was

incurred, ! prepared an invoice to maintain equipment

accountability." He goes on to name other clients for which he

has behaved similarly and in closing states " ... at no time did I

intend this action to constitute a campaign contribution ... ".

The General Committee has complied with the

recommendation contained in the Interim Audit Report. Upon

reviewing the additional documentation provided, the Audit staff

is satisfied that a contribution did not occur.

'". '- .

2. Payment Not Hade by the General Committee

Upon reviewing documentation for payments to the

General Committee's vendors, the Audit staff identified a payment

credited to the General Committee's account with Opinion Research

Calling which could not be associated with any payments made by

the General Committee. This vendor, along with Greenberg-Lake,

handled polling for the General Committee. The vendor provided an

invoice summary which detailed charges and payments to the General

Committee's account. Included on this summary was a $13,130

payment made on 10/14/92. The Audit staff could not identify a

related payment from General Committee bank accounts. The matter .-- --was-addre.ss.ed--at-the--exi t-conference.-- _

tf)

c·

Subsequent to the exit conference, documentation

provided by the General Committee states that "the $13,130 came

from Greenberg-Lake to pay for National Poll 119. It was paid for

from funds they had received from Clinton/Gore General account."

Based on documentation reviewed, it was apparent that

Greenberg-Lake and Opinion Research Calling worked together on

polls for the General Committee. The Audit staff reviewed

documentation from Greenberg-Lake which contained an invoice

summary for all charges and payments related to the General

Committee. There was no indication on this summary that the

General Committee was billed relative to National Poll t19. As a

result, the documentation was still not available to demonstrate

that this payment came from Greenberg-Lake and/or the General

Committee.

The Interim Audit Report recommended that the

General Committee provide documentation and any relevant comments

to demonstrate that the payment was not a contribution; document

the $13,130 payment (to include a copy of the negotiated check);

and to explain the relationship between the vendors.

Page 34, 12/27/94

In response, the General Committee stated that

"subsequent to the Exit Conference, the Committee explained to the

auditors that Opinion Research Calling worked with Greenberg-Lake

on general election polls, and advised the auditors that the

vendors informed the Committee that Greenberg-Lake paid Opinion

Research. The Committee has requested additional documentation

regarding this and will forward it as soon as it is available."

-3 L

:::N of la~
31

In a letter subsequently submitted by the General

Committee, the Executive Manager of Greenberg Research. Inc.

(formerly Greenberg-Lake) states that the ·poll was neither

performed for nor paid for by Clinton/Gore '92.· National poll

#19 was conducted for Victory Fund '92 and ·Opinion Research

erroneously listed Clinton for President as payee on its invoice

to [Greenberg Research. Inc.l." Further documentation provided by

the General Committee to support its explanation included

photocopies of an invoice to Victory Fund '92 and a canceled check

showing the payment was made by D.N.C. Services Corp. - General

Fund.

The General Committee has complied with the

recommendation contained in the Interim Audit Report. Upon

reviewing the additional documentation provided, the Audit staff

is satisfied that a contribution did not occur.

3. Deposits Credited to General Committee Bills

From various reviews conducted throughout the

audit, the Audit staff noted three deposits that were credited to

General Committee bills. The source(s} of the funds used to make

these deposits could not be identified or verified. The total of _______these_de_posi_ts__was_S2_B_,_32S-. - ---------

Two of these deposits involved phone companies.

When reviewing refunds received by the General Committee, we noted

that the General Committee was credited with a S7,800 deposit made

to one company and a S19,525 deposit to another company. However,

from our review of documentation relative to these vendors, it

appeared that the General Committee did not make these deposits.

The remaining deposit related to a vendor that

provided sound and staging to the General Committee.

Documentation from this vendor in support of a General Committee

payment contained a credit for a Sl,OOO deposit which did not

appear to have been made by the General Committee. These matters

were presented at the exit conference. Subsequent to the exit

conference, the General Committee stated that "the Sl,OOO.OO has

been paid with check i12577 issued on 10-8-93." This response did

not explain the source of payment of the $1,000 deposit credited

on the original invoice from the vendor. Therefore, it still

appeared that a $1,000 payment was made to the vendor by someone

other than the General Committee.

The Interim Audit Report recommended that the

General Committee provide documentation and a statement from each

vendor documenting the source of these funds, and any relevant

comments to demonstrate that the items did not constitute

contributions.

In response, the General Committee provided

documentation to support the deposits paid to the phone companies .

Page 35, 12/27/94 ..3 . ot (0 g"
----::~------ , " <:-i;

32

With respect to the $7,800 to one of the phone companies, the

General Committee provided documentation for a cashiers check

which demonstrated that the General Committee made the deposit in

question. For the $19,525 in deposits to the other phone company,

the General Committee provided documents demonstrating payment of

the deposits that establishes that $19,100 was paid by the Primary

Committee and that the General Committee has refunded this amount

accordingly. The remaining S425 is not material.

Although, the General Committee demonstrated that

it did not receive contributions relative to the two phone

companies, there was no response to the item for sound and

staging. As noted above, the General Committee made a $1,000

payment to the vendor in October of 1993 but there has been no

documentation provided to establish the source of the original

deposit. Therefore, it still appears that the General Committee

received a $1,000 contribution.

4. Amended Contracts

During the course of the campaign, the General

Committee entered into contracts with four media related vendors,

that called for consulting payments to be made on specific dates.

Prior to the last payment date, the General Committee entered into

---alllended -lIediaser~ices-agr~ements--with-the se -- four--vendors.__One _0 f _

the stated reasons for the amended agreements was that the

"Consultant and the Committee recognized that certain of the

services prOVided by Consultant were for the benefit of the

Democratic National Committee rather than the Committee." The

amended agreements further stated that the Democratic National

Committee ("ONC") and the vendor are entering into separate

contracts "with respect to that portion of the Consultant's

services to be provided to the ONC." The ONe did not report any

payments to these vendors as coordinated party expenditures

pursuant to 2 U.S.C. S441ald)12) 6/. General Committee

representatives were questioned about these amendments during

fieldwork. They provided no response at that time.

At the exit conference, General Committee

representatives explained that during the course of the election,

it became apparent that these vendors were also performing

services for the ONC and that it was recognized that the ONC

should pay for part of the services. The Audit staff responded

that more detail was needed to explain why part of the services

provided were the responsibility of the ONC and not of the General

Committee. The portions of the original amount contracted for,

which the General Committee did not pay, total $111,100.

Subsequent to the exit conference, the General

The ONe reported that $9,682,375.38 of its S10,331,703

National party Limit for the 1992 Presidential (General)

Election had been expended through June 30, 1994.

Page 36, 12/27/94
tIl

33

Committee responded that "these contracts were amended to reflect

the services actually performed by the individuals who were also

working for the ONC. Their services for the ONC were on generic

democratic media." This did not provide any more detail than the

General Committee's response at the exit conference.

The Interim Audit Report concluded that, absent

documentation t~ demonstrate that the services provided related to

the ONC, the General Committee had received contributions totaling

$111,100.

The Interim Audit Report recommended that the

General Committee provide statements and documentation from the

ONC and the media vendors demonstrating the services provided

related to the ONC, and any relevant comments to demonstrate that

the amended contracts do not result in a contribution.

In response, the General Committee states that

"according to the terms of the contracts themselves, which were

provided to the auditors during fieldwork, the contracts were

amended because it became apparent that the services required of

the vendors were different than originally anticipated. It is

clear from the terms of the contracts that they were amended

because the four vendors would be providing fewer services to the

______ c()aun~tt~~_~tlalL~nUcip3l~~d_1n~he__()J."tgillal __ c:.Q.ntrac~s . __ :Inl>t~~(L _ each of the four vendors also began working for the ONC. The

auditors were specifically advised that the services for the ONC

were on generic media. As the auditors well know, generic media

is that which does not mention any specific candidate and

therefore which does not have to be allocated to any candidate.

There is nothing in the Act or regulations that prevents a

committee from amending its contracts, and it is clear that

generic media need not be allocated to any candidate's campaign

committee. We are, therefore, someWhat at a loss as to what the

auditors think they need or are entitled to concerning the

services provided by these four vendors."

"The Committee believes that it is absurd for the

auditors to allege an impermissible contribution on the basis of

an amended contract that calls for reduced services to the

Committee. However, even though the auditors have no basis for

suggesting that these vendors, the ONC or anyone else, made

contributions to the Committee amounting to $111,100, we have

obtained from the ONC copies of the four vendors' contracts with

the ONC and a letter from ONC General Counsel regarding the

services provided to the ONC. It is clear from the amended

contracts themselves, and from the additional documentation

provided, that no contribution resulted to the Committee from the

amendment of these contracts."

The letter from the ONe General Counsel states that

the ONe has sent copies of contracts with the four vendors which

"will confirm that, according to our records, these payments were

made for creative and consulting services in connection with the

Page 37, 12/27/94
34

production of generic media, i.e."media which urged support for

the Democratic Party and its candidates without mentioning a

specific candidate." The contracts all state that "consultant

shall provide the DNC with the following services:

o

o

o

writing of generic Democratic television advertising

and radio commercials. '

Production of generic Democratic television and radio

commercials.

Writing, design and layout of generic Democratic print

ads."

It is noted that the contracts between the vendors

and the DNC provide for the DNC to pay apprOXimately 24.4\ of the

total amount originally to be paid by the General Committee.

These contracts call for the vendors to provide services from

Septemb'er 8, to November 15, 1992.' However, the contracts were

not signed by a representative of the ONC until October 26, 1992,

and were signed shortly thereafter by the vendors. with respect

to the amended contracts between the vendors and the General

C': Committee, the dates on the amended contracts are October 15,

1992. However, there is no indication of when the contracts were

____ ~ct~alJ.y_~1gn~d-by--t-ne-ye-Il-d~u-. . . _

tf)

There was no documentation provided from the media

vendors detailing the services provided. Although the Audit staff

is aware of What generic media means, there has been no

documentation provided to demonstrate that the services provided

by the vendors to the ONC were different from the services

originally contracted to be provided. Also, there is no

indication how the General Committee and the ONC determined that

approximately 24.4\ of the work provided related to the ONC.

Given the timing of the contracts between the ONC and the vendors

as well as the amendments between the General Committee and the

vendors, there is no explanation why the General Committee and the

ONC did not realize earlier that the work being performed by the

vendors was related to both committees. Therefore, sufficient

documentation has not been provided to demonstrate that $111,100

in contributions did not occur.

In conclusion, it appears to the Audit staff that

the General Committee has received $112,100 (51,000 + $111,100) in

prohibited contributions and a repayment to the U.S. Treasury is

warranted.

Recommendation _1

The Audit staff recommends that the Commission make an

initial determination that the General Committee is required to

make a $112,100 repayment to the U.S. Treasury pursuant to 26

U.S.C. S9007(b)(3).

Page 38, 12/27/94
35

B. Apparent Non-Qualified Campaign Expenses

Section 9002(11) of Title 26 of the United States Code

defines, in part, the term "qualified campaign expense" as an

expense incurred by the candidate of a political party for the

office of President, by the candidate of a political party for the

office of Vice President, by an authorized committee of the

candidates of a political party for the offices of President and

Vice President to further the election of either or both of such

candidates to such offices. In addition, neither the incurrinq

nor payment of such expense shall constitute a violation of any

law of the United States or the State in which such expense is

incurred or paid.

Section 9007(b)(4) of Title 26 of the United States Code

states, in part, that if the Commission determines that any amount

of any payment made to the eligible candidates of a political

party was used for any purpose other than to defray the qualified

campaign expenses with respect to which such payment was made, it

shall notify such candidates of the amount so used, and such

candidates shall pay to the Secretary of the Treasury an amount

equal to such amount.

Section 9003.5(a) of Title 11 of the Code of Federal

_" Ye9~l,at:~~ns states, in part, that each candidate shall have the

burden of -pro-"fn-g- that--cffsbursemen-fs- -.-a-de-- ny--the- candlcfate--or-hfs-- -- ------ or her authorized committee(s) are qualified campaign expenses as

defined in 11 crR 9002.11.

Section 9007.2(b)(2) of Title 11 of the Code of Federal

Regulations states, in relevant part, that if the Commission

determines that any amount of any payment to an eligible candidate

from the Presidential Election Campaign Fund was used for purposes

other than to defray qualified campaign expenses, it will notify

the candidate of the amount so used, and such candidate shall pay

to the United States Treasury an amount equal to such amount.

c·... 1. Apparent Duplicate Payments

During our review of disbursements, the Audit staff

discovered expenses incurred by the General Committee which

appeared to have been paid more than once by the General

Committee. We identified 28 such payments to 13 vendors totaling

$21,614. The General Committee was made aware of these items

during the course of audit fieldwork and at the exit conference.

Subsequent to the exit conference, the General

Committee prOVided additional documentation which demonstrated

that some of these payments (about $12,945) had subsequently been

refunded. Most of these refunds (about $8,907) occurred in

September and October of 1993, after the conclusion of audit

fieldwork.

Page 39, 12/27/94
36

At the time of the Interim Audit Report, there

remained 12 payments to 4 vendors totaling $8,669 which appeared

to be duplicate payments; the funds had not been recovered. For

some of those payments, the General Committee had acknowledged

that a duplicate payment had occurred and that refunds would be

forthcoming. For others, the General Committee stated that the

payments were applied to amounts outstanding. However,

documentation had not been provided to confirm this. The Interim

Audit Report stated that if any of the funds were recovered from

the vendors or the documentation to demonstrate application of

these amounts was provided, the amount subject to repayment would

be reduced accordingly. The amounts of duplicate payments

recovered ($12,945) and outstanding ($8,669) were included on the

NOQCE as accounts receivable due from the respective vendors.

In the Interim Audit Report, it was recommended

that the General Committee submit documentation to demonstrate

that apparent duplicate payments were either applied to other

invoices or had been recovered. Absent such a demonstration, the

Audit staff would recommend that the Commission make an initial

determination that the General Committee was required to make a

repayment of $8,669 to the u.s. Treasury pursuant to 26 U.S.C.

S9007(b)(4).

In response, the General Committee stated that"$694

had been refunded to the General Committee, but only submitted

documentation to demonstrate that $340 had been refunded.

Documentation was also prOVided to demonstrate that an additional

$641 was uncollectible. Finally, Counsel for the General

Committee states that another vendor has acknowledged a credit

balance of $1,496 and the General Committee is still attempting to

resolve the remaining $6,479.

The Audit staff notes that the uncollectible

duplicate payment of $641 remains a non-qualified campaign

expense subject to repayment. Further, although the General

Committee states that a vendor has acknowledged a credit balance

($1,496), it does not appear that the amount has been recovered.

Therefore, based upon the above, $340 has been

resolved, which leaves an unresolved amount of $8,329 ($8,669 -

$340) which is repayable to the U.s. Treasury (see Attachment 2).

Recommendation .2

The Audit staff recommends that the Commission make an

initial determination that the General Committee is required to

make a repayment of $8,329 to the u.s. Treasury pursuant to 26

U.S.C. S9007(b)(4).

Page 40, 12/27/94 . :3,

=~Of ftt:
In

C'·

37

2. Non-Campaign Related Activity

From our review of disbursements and the associated

document&tion made available by the General Committee, the Audit

staff identified 16 disbursements totaling'S87,077 which appeared

to be for purposes other than to'defray qualified campaign

expenses.

Of the 16 items, 8 disbursements totaling S70,296

were payments for rented equipment not returned or lost. Included

was a disbursement of S34,768 to Alamo Rent A Car ("Alamo") for

two missing vehicles. One of these veh~les was rented in Florida

and the other in Texas.

In response to the exit conference, ,the General

Committee provided an explanation which detailed its attempts to

recover the vehicles. From this documentation, it appeared that

the campaign staff who rented the 'vehicles allowed them to be used

by a number of persons and eventually lost track of who had the

vehicle. In both cases, the General Committee had not been able

to determine who last had possession of the vehicles. Without

this information, both Alamo and the General Committee were

precluded from filing stolen vehicle reports with the appropriate ___authori.ties• __ The__ other __seven__ payments__were_for_~tems_such as-- _

computers and communication devices which had been lost. The

General Committee also stated in response to the exit conference

that it was self-insured and that it was cheaper to pay for lost

equipment than to maintain insurance.

The remaining 8 items did not appear related to the

general campaign. One was a payment of S350 for business cards

invoiced after the close of the expenditure report period and

another was a $4,351 payment for installation of phones in New

Jersey in 1993. Three payments totaling Sl,lOO appeared to be

activities related to the post-election transition and two

payments totaling $2,251 were for the travel expenses of

individuals attending the inauguration. In response to the exit

conference, the General Committee stated that it has reviewed

these payments and has requested reimbursement from the

appropriate entities.

The remaining item was a S8,730 payment in

February, 1993, to Wright, Lindsey' Jennings. This payment was

for retainer services and expenses incurred by the firm. The

description on the invoices was for "Incorporation' General

Advice." The firm provided invoices to suooort the incurrence of

the expenses. Two of the expenses were to'~file Articles of

Incorporation for Little Rock '92 Election Host Committee, Inc .. "

This was the only documentation available to support the nature of

the incorporation and general advice. The Little Rock '92

Election Host Committee was not affiliated with the General

Committee, but was a corporation registered with the Arkansas

Secretary of State. Therefore, it appeared, based on the

Page 41, 12/27/94
If)

38

documentation made available, this payment was not made to defray

a qualified campaign expense.

The Interim Audit Report recommended that the

General Committee submit documentation which demonstrates that the

expenses noted above were qualified campaign expenses. The

documentation was to include, but not be limited to, information

on factors such as the relative value of the lost equipment and

methods employed by the General Committee to safeguard the

equipment. Absent such a demonstration, the Interim Audit Report

stated that the Audit staff would recommend that the Commission

make an initial determination that the General Committee is

required to make a repayment of $87,077 to the U.S. Treasu~y

pursuant to 26 U.S.C. S9007(b)(4). •

In response, the General Committee provided

documentation, memoranda, and made a number of arguments in an

attempt to demonstrate that these disbursements were for qualified

campaign expenses. The General Committee responses to the -

various items in question are discussed below.

The General Committee provided memoranda,

explanations, a letter from its insurance agent, and a written

equipment security policy in its reply to the 8 disbursements

-----t-ot-a-ling.$70 ,2.95_.forlost_e_qYi.PIII~rll:.._,!,h.'!General Committee states

that "the Committee objects to treatmentof-tne-sepayme-nts as

non-qualified campaign expenses."

"Thoughout {sic] the general election, theCommittee and its members exercise~ great care in the

maintenance and security-of leased equipment. Each

incident cited by the Audit Division was investigated at

the time of loss for both potential recovery of

equipment and to discover any potential misconduct or

gross negligence on-the part of a Committee member. It

is the Committee's position that there was no evidence

of misconduct or gross negligence on the part of any

Committee member, and thus it was unnecessary to execute

the Committee's policy of withholding salaries upon the

discovery of evidence of misconduct or gross negligence.

As the letter from the the Committee's insurance agent

indicates, it was not comercially [sic] feasible for the

Committee to have purchased insurance to cover such

losses. First, in order to negotiate a deductible low

enough to have permitted loss recovery, the applicable

permium [sic] would have been cost prohibitive (the

Committee's deductible was $5,000). Secondly, given the

staff fluctuations associated with typical campaign •

environments and the tremendous geographical regions

that would require coverage, the cost for insurance, to

the extent available at all, would have far exceeded its

value to the Committee.

Page 42, 12/27/94
.....:::-

39

"In light of the prohibited cost of commercial

insurance the only commercially reasonable and fiscally

responsible alternative for the Committee was self

insurnace [sic]. A comparison of the losses identified

by the Audit Division to the total monies expended by

the committee for equipment leases in general and as

compared to leases for similar equipment, reveals that

the Committee paid a relatively small amount for the

replacement of lost equipment. (Committee payments for

non-auto rental equipment represented only 1.4\ of the

total monies spent on leases while auto rental losses

were only 1.4% of the total as well). Ultimately, not

only was the decision to self insure the only available

option, but also the wisest. As most of these losses

occured [sic] during advance team travel, and were not

revealed until team members had departed the event site,

police reports were not practicable. In the case of the

rental vechicles [sic], the Committee attempted but was

not permitted to file such a report. The Committee went

to great lengths both to recover the vechicles [sic] and

to recover their costs from the appropriate insurance

agencies. However, as explained in the exhibits, the

Committee was unable to either recover the vehicles or

-submit-this-loss-for- insurance_reimbursement." __ _

With respect to the two missing vehicles, the

General Committee provided a letter from its insurance agent,

memoranda from a staff person, and a letter from Alamo. The agent

states, in part, that:

" ••• by requiring that cars leased by advance team

people be covered for liability on a primary basis through

the lease company we transferred the exposure to the lease

company and thereby, effectively provided a first layer of

protection that the campaign had between it and any

claims ..• I would further point out that any number of autos

had accidents during the campaign. Because the rental

company was primary, we did not pay ...Remember we protected

the campaign against catastrophic risk. The campaign chose

to self-insure relatively smaller exposures because it was

prudent business practice and it saved money."

In addition, the letter from Alamo states that:

" ... even though we are the owners of these

vehicles, we cannot report them stolen because they were

rented to the Clinton for President Campaign. In the case of

the Dallas rental, the police in Dallas have taken the

position that if a 'permission user' (someone who was given

the keys) is involved, no crime has occur[r]ed. Therefore,

they will not take a stolen vehicle report.

Page 43, 12/27/94 -3 ::~-o-t-.~J.~~I"'&"'-"'"
c:

40

"If the vehicle was left in a specific location we

nee[d] either: (A) A statement from the last person who had

the vehicle as to what happened to the vehicle, OR (B) The

last person who has [sic) the vehicle needs to report it

stolen to the police.

"AS to the Miami rental, until we can determine who

last ha[d] the car, the police ~ill not take a stolen vehicle

report from us. The same things would be required as in A

and B above. Failing that. the only way we could report the

car stolen would be to report it as a failure to return" by

the person who rented the car "which would result in a

warrant being issued for his arrest."

For the lost equipment other than the automobiles,

the response included another letter from its insurance agent

which discusses Fidelity Coverage and a copy of the General

Committee'S "Loss Prevention pOlicy."

The letter from the insurance agent notes that the

quote for an insurance premium included the accounting department

located in Little Rock. The letter states, in part, that "as time

progressed and controls were instituted, the issue of fidelity

nationally became less important at locations other than

- headquarters.-"-The -rates__ quoted_ ....e~e__ b~j;~_tion tl1e campaign

self-insuring the first $25,000 of any loss and coveragewas-------------

limited to catastrophic loss at the General Committee's primary

location. The General Committee "self-insured small exposure and

minimized the change by designing controls into its organization,

i.e. no cash transaction."

With regard to its "Loss Prevention Policy", the

General Committee states that "once each piece of equipment in the

inventory was associated ....ith a department and individual staff

member, ....e sent out departmental inventory lists to each

department head so that he/she could verify the information.

After receiving confirmation from each department head, we issued

a memo to staff and department heads stating our policy.

1. Unreturned equipment was the financial responsibility

of the user (as indicated on the inventory).

2. If the equipment ....as not returned, the cost of

replacing that equipment ....as deducted from the user's

final paycheck.

3. The value of the equipment was included as taxable

income on the user's W-2 form.

4. All equipment used by the department in general was the

financial responsibility of the department head.

5. Unreturned general use equipment was deducted from the

department head's final paycheck.

Page 44. 12/27/94
41

6. Unreturned general use equipment was included as

taxable income on the department head's W-2 form.

7. Any individual responsible for any unreturned equipment

had a note made in campaign personnel records, and this

point was included when recommendation requests were

made regarding future employment.

All of these points were made in a memo to staff.

We did not have to penalize many; however, if it was necessary, we

had provided the notification required to allow us to do so." The

memo also discusses steps ~aken to increase security measures in

the building. &

The Audit staff does not find the General

Committee's arguments to be persuasive. The 8 disbursements

totaling $70,296 are still considered to be non-qualified campaign

expenses (see Attachment 3). With respect to the lost vehicles,

it is apparent that some individuals working for the General

Committee did not exercise due care in keeping track of the

vehicles. As noted in the letter from the insurance agent,

primary insurance coverage was maintained through the rental

agency and catastrophic loss was covered by the insurance company.

----Howeverr due- tCLthe_circumst.llnCeS_Sur r.o_u(1ding__tl\~_d_i s~pp~~_r~llce. __ e>.( _

the vehicles, neither the General Committee nor the rental agency

could file a stolen vehicle report. The General Committee's

subsequent attempts to recover the vehicles d~ not relieve the

campaign of its obligation concerning these vehicles. Although

the campaign states it had a "Loss Prevention Policy" to cover

such losses of equipment, "it °is the Committee's position that

there was no evidence of misconduct or gross negligence on the

part of any Committee member, and thus it was unnecessary to

execute the Committee's policy." The General Committee provided

no documentation to demonstrate how these determinations were

made. The General Committee also states that a "relatively small

amount" was paid for the replacement of lost equipment as compared

to total monies spent on equipment leased. The General Committee

again provided no documentation to support its calculation.

However, the Audit staff believes that the percentage is

irrelevant. As noted in Attachment 3, the payments for this lost

equipment were not for small dollar items and we believe more

prudent care should have been exercised. Although the General

Committee was responsible for making the payments for lost

equipment, these payments should be considered non-qualified

campaign expenses and subject to repayment.

Finally, the General Committee also providea

documentation for the remaining 8 items involving payments for

other than lost equipment, which did not appear to be related to

the campaign. The Audit staff's review of this documentation

indicates tha~ the payments were for qualified campaign expenses

or the funds have been recovered.

Page 45, 12/27/94
42

Thus, it is the Audit staff's opinion that the

General Committee has made 8 payments totaling $70,296 which are

deemed to be non-qualified campaign expenses (see Attachment 3).

Recommendation t3

The Audit staff recommends that the Commission make an

initial determination that the General Committee is required to

make a repayment of $70,296 to the U.S. Treasury pursuant to 26

U.S.C. S9007(b)(4).

C. Expenditure Limitation

Sections 441a(b)(1)(B) and (c) of Title 2 of the United

States Code state, in relevant part, that no candidate for. the

office of President of the United States who is eligible under

section 9003 of title 26 to receive payments from the Secretary of

the Treasury may make expenditures in excess of $20,000,000 as

adjusted for the increases in the Consumer Price Index.

Section 9004(a)(1) of Title 26 of the United States Code

states that the eligible candidates of each major party in a

presidential election shall be entitled to equal payments under

section 9006 in an amount which in the aggregate shall not exceed

-----the--expemditu re-limitations _applicable_to sUCh c~n_dJ_gate!_~_unde r

Section 441a(b)(1)(B) of Title 2. ---

Section 9007(b)(2) of Title 26 of the United StateS Code

states that if the Commission determines that the eligible

candidates of a political party and their authorized committees

incurred qualified campaign expenses in excess of the aggregate

payments to which the eligible candidates of a major party were

entitled under section 9004, it shall notify such candidates of

the amount of such excess and such candidates shall pay to the

Secretary of the Treasury an amount equal to such amount.

Section 9004.4(a) of Title 11 of the Code of Federal

Regulations limits the use of such payments to expenditures for

the following purposes: to defray qualified campaign expenses; to

repay loans that meet the requirements of 11 CFR 100.7(a)(1) or

100.7(b)(ll) or to otherwise restore funds used to defray

qualified campaign expenses; and to restore funds in accordance

with 11 CFR 9003.4 for qualified campaign expenses incurred prior

to the beginning of the expenditure report period.

Section 9003.4(a) of Title 11 of the Code of Federal

Regulations states, in relevant part, that a candidate may incur

expenditures before the beginning of the expenditure report period

if such expenditures are for property, services or facilities

which are to be used in connection with his or her general

election campaign. Examples given include expenditures for

establishing financial accounting systems, organizational planning

and polling.

Page 46, 12/27/94
43

Further, 11 CFR S9003.4(b), in relevant part, limits the

sources of funds used to make expenditures prior to the

expenditure report period to: a candidate obtaining a loan which

meets the requirements for loans in the ordinary course of

business; borrowing from his or her legal and accounting

compliance fund; use of the candidate's personal funds up to his

or her 550,000 limit; and, for a candidate who has received

federal funding under 11 eFR part 9031 et seq., borrOWing from his

or her primary election committee(s) an amount not to exceed the

residual balance projected to remain in the candidate's primary

account(s) on the basis of the formula set forth at 11 CFR

9038.3(c).

Section 9004.9(d)(1) of Title 11 of the Code of Federal

Regulations states that the term capital asset means any property

used in the operation of the campaign whose purchase price

exceeded $2000 when acquired by the committee. The fair market

value of capital assets may be considered to be the total original

cost of such items when acquired less 40\ to account for

depreciation.

Finally, 11 CFR S9003.3(a)(2)(ii) provides, in relevant

part, that expenditures for computer services, a portion of which

are related to ensuring compliance with Title 2 and Chapter 95 of

... _- T-i·~le~6i-in·itially- paidfrom.the.candidate's.fede raLfund ..A.!=_C;Qu.nt,._.

may later be reimbursed by the compliance fund. A candidate may

use contributions to the compliance fund to reimburse his or her

federal fund account an amount equal to 70\ of the costs (other

than payroll) associated with computer services. Such costs

include but are not limited to rental and maintenance of computer

equipment, data entry services not performed by committee

personnel, and related supplies.

The expenditure limitation for the 1992 general election

for the office of president of the United States is $55,240,000.

Based on our reconciliation of the General Committee's

bank activity to its reported activity from its inception through

June 30, 1993, and a review of reported activity from July 1,

1993, through June 30, 1994, the Audit staff determined that the

General Committee disbursed $64,920,993. From this figure the

Audit staff deducted loan repayments ($125,000), offsets to

operating expenditures ($7,012,115) and refunds from the

Compliance Fund (52,595,000) for compliance-related expenditures

to arrive at operating expenditures subject to the limitation of

$55,188,878.

In addition, the Audit staff determined that, with

respect to our analysis of expenditures subject to the limitation,

the folloWing additional adjustments are necessary.

Page 47, 12/27/94
2.

44

1. Amount Due to the General Committee from

the Primary Committee

The Audit staff has included as an accounts

receivable $39,104 owed to the General Committee by the Primary

Committee.

This amount includes payments by the General

Committee for: a reimbursement ($2,255) to Julia Payne for her

convention-related expenses; an overpayment ($7,402) of payroll

taxes applied to amounts owed by the Primary Committee; an

expenditure ($7,565) to Kanatt & Phelps for legal services

provided to the primary Committee; Primary Committee payroll taxes

($354); and, AT&T telephone services relative to the Primary

Committee ($21,528).

At the exit conference, General Committee

representatives had limited comments, and stated they would have

no questions until they had reviewed our documentation. The Audit

staff did not receive any documentation in response to the

presentation of these items at the exit conference.

In response to the Interim Audit Report, the ------- Genera~_Committee_agre_ed_t_h_a_t_tbel>e_it~Jlls__sho\l~d_ be~nc 1uded , but

believes the correct figure should be $43,726. The Audlt--sta-ff- -------

has reviewed the General Committee's calculations and has adjusted

its analysis accordingly.

Amount due the Primar Committee from

the Genera Committee or Payment 0 General

Election Related Expenses

During the Audit staff's review of the primary

Committee's vendor files, numerous disbursements made by the

Primary Committee were found that appear to be for the benefit of

the general election campaign. These expenses are grouped into

those for equipment and facilities; polling and direct mail; media

services; and miscellaneous.

a. Equipment and Facilities

Near the end of May, 1992, the primary

Committee began moving into new office space. It was this

location that the General Committee and Compliance Fund used as

their campaign headquarters during the general election campaign.

The new location provided approximately three times the floor

space as the location used during the primary campaign.

As part of the move to their new location at

the Gazette Building, the Primary Committee paid I-K Electric

Company $79,808 for various wiring projects. The invoices were

paid between July 30 and September 2, 1992, and covered a number

of projects. For example the invoices contained notations such as

Page 48, 12/27/94
4S

"INSTALL DATA CABLING NETWORK FOR NEW HEADQUARTERS (GAZETTE BLDG.)

FOR 1S0 WORK STATION LOCATIONS", "PROVIDE AND INSTALL LANNET DATA

NETWORK ELECTRONICS FOR NEW NETWORK" and "INSTALL VOICE CABLING

FOR S5 TELEPHONE LOCATIONS." Although all of the invoices that

contain the dates of the work indicate that it was completed by

July 16, 1992, it is apparent that such services were in

preparation for the general election campaign.}/

During the primary election period. the

Primary Committee's records reflect the purchase of only small

amounts of computer equipment. Instead, most equipment was

leased. Also, the Primary Committee contracted with a Washington,

D.C. firm for computer services. The firm prepared matching funds

submissions including computer tapes, disclosure reports, and

provided the computer tapes required for the audit. The Primary

Committee had a computer terminal linked with the vendor. During

the audit, the Primary Committee requested and was provided copies

of the computer files obtained by the Audit Division directly from

the vendor. Therefore, it does not appear that the Primary

Committee's computer files were loaded from the vendor's system to

the campaign's computer system until 1993.

Beginning at the end of May, 1992, the Primary

Committee purchased a large amount of computer equipment, both

·pe rsonal--compute rs.anda--large r--system. I n-mo.st -casesa-40\----- --------

depreciation allowance was taken and the computer equipment was

then sold to the General Committee at 60\ of the purchase price,

net of sales tax.

Between May 28 and July 1S, 1992, the Primary

Committee purchased 50 personal computers, software, and supplies

from The Future Now, Inc •. Between June 1, and August 9, 1992,

the Primary Committee paid The Future Now, Inc. $118,742. The

General Committee purchased this equipment for 60\ of the original

cost, less sales tax.

The same vendor was paid $11,676 for other

equipment invoiced between June 8 and July 1S, 1992 with $10,123

of the total invoiced and shipped on July 15, 1992, the

Candidate's date of ineligibility. None of this equipment was

included among the items sold to the General Committee.

As stated above, the Primary Committee

purchased a larger computer system. A July 13, 1992 letter to the

"Gov. Clinton Election campaign" states that "The Clinton campaign

contracted with ICL to provide a comprehensive system and software

on Mav 28. 1992. ICL delivered and installed the system on June

2Sth.- Between these two occurrences, ICL loaned the campaign a

Power 6/32 system to function as an interim solution." The letter

goes on to explain that ICL personnel visited campaign

}/ Certain electrical work and data installation occurred July

10 through July 16, 1992.

Page 49, 12/27/94
46

headquarters to provide training and expedite conversion to the

new system.

The majority of the invoices for this computer

system were dated June 24, 1992. In total, the vendor was paid

5272,460 in two installments on August 10 and 21, 1992. Again,

the General Committee paid the Primary Committee 60\ of this

original cost, less sales tax.

The Primary Committee also purchased computer

equipment from W.P. Malone. The Primary Committee paid a $104,175

invoice dated June 30, 1992 on August 25, 1992. As with the other

equipment purchased from the primary Committee, the General

Committee paid 60\ of the amount.

In addition, W.P. Malone was paid $33,260 on

August 25, and November 9, 1992, by the Primary Committee for

programming services and software support and consulting for

moving the computer operation to the Gazette BUilding. The

invoices reflect dates up to and including July 16, 1992. None of

the amounts were reimbursed by the General Committee.

In response to the exit conference discussion

of this matter, the Primary Committee submitted additional

. ·information •.-The.Pri.maI·y_Commi_t_t_e~__tlQjt!'_~~~Q~~_J~he Audit staff

characterization of these payments as general electionexpeilses~

According to the Primary Committee, the expenses for a new

computer system were incurred well before the end of the primary

and were essential to the smooth operation of the daily

responsibilities. The primary Committee stated that the initial

computer system was inadequate for the Primary Committee's needs

in the early months of 1992. The system was unable to accommodate

the primary Committee's expanding database and volume of

correspondence, as well as to accommodate the Primary Committee'S

delegate tracking and communications.

The Primary Committee's response included a

memorandum from the Director of Computer Operations. She stated

that during the early months of the spring of 1992, the initial

system used by the primary Committee could not meet its increased

demands. ftThe initial system could not accommodate the increased

number of users. It would not allow the Committee to link its

personal computers with the network. There were major time lags,

often amounting to two days, in the retrieval of information.

Back-up of the Committee'S data required four to five days. This

prolonged back-up process compromised the integrity of the

Committee'S information. As demands on the system increased,

there was also an increase in computer equipment failure. In

addition, the system's limited resources were strained with

mailings of 5,000 to 6,000 pieces per day. Furthermore, the

system was not able to accommodate the Committee's extensive

delegate \Jork."

Page 50, 12/27/94
:..:;

47

She continues that after a thorough evaluation

of the systems available, the primary Committee purchased a

comprehensive computer system and software on May 28, 1992 from

ICL, Inc. They also used a programming consultant from W.P.

Malone who helped design software, hardware and networking

packages. The temporary system was installed on May 30. 1992 and

a permanent system was installed less than one month later. "When

a customer purchases a computer system it is the normal course of

business that the computer company supplies the customer with a

temporary system at time of purchase until the system purchased is

ready." In addition the Primary Committee purchased a software

maintenance contract. and equipment from W.P. Malone and personal

computers and software from Future Now in connection with the new

system. It was also necessary for I-~ Electric to install new

wiring to accommodate the new system. The Audit staff notes the

Primary Committee originally leased its computer system from W.P.

Malone. Invoices associated with the lease suggest that the

leased system was the same model as the system loaned by ICL. Inc.

as an "interim solution." It is not known if it was the same

computer system and was obtained through W.P. Malone. Further,

the equipment purchased from W.P. Malone at the time the new

system was acquired was equipment that the Primary Committee had

leased up to that time.

--------- The total amount paid for computer equiplll.entand related services described above is $540,313 excluding I-K

Electric. Given that: (a) the Primary Committee contracted with

a Washington, D.C. firm for much of its computer work, (b) the

Primary Committee leased the majority of its computer equipment,

and (c) the purchases were not made and the temporary system not

installed until nearly all primaries were over, with the permanent

system not installed until well after the last primary and

approximately two weeks before the convention, it is apparent that

this equipment was purchased for use in the general election.

Therefore, in the Interim Audit Report, it was concluded that the

entire amount was considered to be general election expenses. The

General Committee paid the Primary Committee $285,923 for the

computer equipment, leaving a balance due of $254,390 ($540,313 -

$285,923), plus $79,808 for rewiring.

In addition to the above, the Primary

Committee paid the entire amount of the rent for July 1992. Fifty

percent of the amount, or $12,500, should be reimbursed by the

General Committee.

Listed below is the information requested in

the Interim Audit Report and a description of the information

provided in response.

(1) Provide the following information regarding Equipment and

Facilities:

o In chronological order, list the various computer systems

Page 51, 12/27/94
':8

and data entry services used by th~ Primary Committee, the Genera)

Committee, and the Compliance Fund at all relevant times during

the campaign. Identify the time periods that the various systems

were used, and how each system was used by General Committee, and

how the s~stems differed from each other.

In response to the Interim Audit Report, the General

Committee submitted a chronology of the campaign's computer

systems (Attachment 4). The chronology addresses the system used

between August of 1991 and May of 1992; the new system, with no

distinction between the temporary and permanent systems, used from

May 30, 1992 to present; and services provided by Public Office

Corporation beginning in December of 199~ and continuing to the

present.

G For the listed vendors provide the requested information:

W.P. Malone

-Describe the system ICCI6/32 Superminicomputer and related

items) leased lor purchased) from this vendor by the Primary

Committee by listing the hardware, software, and peripheral

devices making up the system.

______ Tbe_reJ~PQnse_describes the equipment as a Unix cel 6/32

running up to li8-devi.ces-;--withBO-STmtiltaIHH~usu-s-ers~

-Explain and document which primary campaign functions were

actually performed on that computer system, including the

identification of the application (e.g. office automation,

delegate tracking, accounting/general ledger).

The response states that the system ran the office package

including word processing and scheduling, as well as running

the political data base (including delegate relations).

-Identify the software used for each function.

-Explain and document which portion of the leased system

lhardware and software) was acquired by the primary

Committee, the General Committee, or the Compliance Fund and

when these items were moved to the Gazette Building from

their previous locations.

-Explain and document when that portion of the W.P Kalone

system acquired by the other committees was: purchased;

delivered; installed; and fully operational.

-For all parts of the leased system not acqUired by the

primary Committee or the General Committee, inclUding

software, provide information concerning when the lease was

discontinued, if and when the equipment was moved to the

Gazette Building, and when it was returned to the vendor.

Page 52, 12/27/94
C>·

49

The General Committee did not provide any of the detailed

information in its response. The response also did not list

this company as a vendor for the General Committee or the

Compliance Fund, but the General Committee paid W.P. Malone

almost 552,000.

ICL, temporary system

-Describe the system borrowed from this vendor by listing the

hardware, software, and peripheral devices making up the

system.

-Explain and document which primary campaign functions were

actually performed on that computer system, including the

identification of the application.

-Identify the software used for each function.

-Explain and document when the temporary system was:

delivered; installed; and fully operational.

-Explain and document which hardware and software, and its

function, was available on this system that was not available

on the system leased from W.P. Malone.

-- - - --

-Explain and document which primary campaign functions the

system performed that the previous systems was not

performing.

-Explain and document which campaign functions and files were

transferred to this system from any other system and the

date(s) of the transfer.

ICL, permanent system

-Describe the system purchased from this vendor by listing

the hardware, software, and peripheral devices making up the

system.

-Explain and document which primary campaign functions were

actually performed on that computer system, including the

identification of the application.

-Identify the software used for each function.

-Explain and document when the permanent system was: ordered;

paid for; delivered: installed; and fully operational.

-Explain and document which hardware and software, and its

function, was available on this system that was not available

on the system leased from W.P. Malone, or on the temporary

system.

Page 53, 12/27/94

3
If)

50

-Explain and document which primary campaign functions the

system performed that each of the previous systems was not

performing.

-Explain and document which campaign functions and files were

transferred to this system from any other system and the

date(s) of the transfer.

C For any other computer system used by the General Committee

provide the same information and documentation specified for

the systems leased from W.P. Malone or purchased from ICL.

The response describes the permanent system as "DRS 6000, 386

pc's and networks. DRS 6000 was originally configured to

accomodate [sic] 150 simultaneous users. Additional computer

components were added during the General Election to

ultimately take the capacity to 300 users." The response

also states that the new system continued to run the office

package including word processing, scheduling, and the

political data base for the balance of the primary and the

general election. Further, the response states that the

system expansion accommodated the additional needs of

_~~!!~ate tracking.

With respect to transferring of functions the General

Committee states that "[t)he campaign political office

package and correspondence records were immediately

transferred to the new temporary system. They were then

transferred to the permanent system upon its final

installation. Every effort was made to successfully .ake the

transfer with the minimum of disruption to daily staff

activities." The General Committee further notes that as

part of the wind down operation and as part of the FEC audit,

other primary files were moved to this system.

Little information is provided that distinguishes the

"temporary system" from the "permanent system".

o Explain and document the delegate tracking functions

performed on each of the computer systems discussed above.

Also provide information showing when the delegate tracking

function and the related files were transferred from one

system to the other. Explain the additional capacity for

delegate tracking provided by each successive system.

The response included a memorandum that is entitled

"Evolution of Delegate Operation Clinton campaign" which

shows levels of staffing and a general description of

computer equipment available. The memorandum states that the

delegate tracking staff used the leased CC! 632 and a

personal computer through most of April of 1992. According

to the memorandum, "[alt the end of April the delegate

operation moved to a separate building because of increasing

Page 54, 12/27/94
l0

51

staff pressures and an intensifying work load which required

either a separate or larger computer system because the CCl

632 system was at it's upper user limit of 80 simultaneous

users. The delegate computer consultant, Bill Krause, was

unfamtliar with Unix systems and recommended that the 386 Dos

PC become (sic) server for a Novell network with

approximately 10. PCS which because it was relatively

portable also became the core of the system the campaign put

together at the convention. The DC office retained the 386

Unix pc & 4 terminals. Both'systems interfaced imperfectly

with the 632 system because of its limitations on the version

of software it could run."

• Explain and document when general election functions began

to be performed on the system leased from W.P. ~alone, the

ICL temporary system and the ICL permanent system. Specify

which functions were performed on each and the date each was

transferred from one system to the other. Estimate and

document the percentage of time that the primary campaign and

the general election campaign used the equipment prior to and

after July 15, 1992.

The General Committee response did not provide any of the

detailed information requested above.

- - ---

D Explain why the Primary Committee took a 40\ depreciation

on the computers that were purchased for the primary

campaign.

In the response, it is stated that the General Committee

followed the Commission's regulation and instructions in the

Primary Manual when the equipment was transferred to the

General Committee. According to 11 CFR S9034.S(c)(1), assets

acquired before date of ineligibility may be depreciated by

40\ or more.

D Explain and document how the computers and software

purchased from Future Now, Inc. furthered the primary

Committee's primary or convention related activity. How

specifically did the primary Committee use the personal

computers and software. Also, provide information on the

S11,676 in equipment purchased from this vendor but not

bought by the General Committee.

The response to the Interim Audit Report did not provide any

of this specific information.

The General Committee repeated many of the arguments made in

response to the exit conference that are addressed above. In

addition, the General Committee makes a number of specific points

that are addressed below.

• The General Committee argues that the Commission adopted

the 40\ depreciation provision at 11 crR 59034.5 to simplify the

page 55, 12/27/94
52

transfer of assets between primary and general committees with

knowledge that some assets would be purchased early in the

campaign and others later.~/

The General Committee is correct. However, that regulation

applies to the transfer of primary assets. The regulation does

not authorize campaigns to purchase assets for the general

election and, because the assets are purchased before the date of

nomination, pay 40\ of the cost from primary funds. As noted

earlier, the purchase of assets by the general election campaign,

prior to the beginning of the expenditure report period, is

anticipated by 11 CFR 59003.4(a)(1).

• The General Committee asserts that the eqUipment was used

during the primary campaign and that the enhanced computer

capacity was critical to respond to the Primary Committee's

increased correspondence needs, for increased delegate tracking,

to support the scheduling operation, for general political support

and for communications. As noted earlier the General Committee

provided little of the specific information requested in the

Interim Audit Report to support its contention. However, the

General Committee did provide a memorandum from Sherry Curry

listing the Bimonthly correspondence Report from January 1992 to

November 1992. Her memorandum shows the increase in

-co-rTespondence--:handled·· by--the-leased -CCL632 According_.to_J;!l.t!._

documentation, her department handled 3,000 pieces of -

correspondence in January, 1992 and it increased to 6,000 in

February, 1992. It remained at approximately ,this level

throughout the rest of the primary. She points out ~his is not all

the correspondence-handled by the campaign, only the general

correspondence handled by her ·departlllent.~/

In fact the documentation indicates· that there is not a

significant increase until July, 1992. For the first half of ~uly

the primary Committee processed over 6,000 pieces of

correspondence, but the number increased to over 9,000 in the

~/ The General Committee continues to argue that it was not

appropriate to include sales tax in the cost of the assets

transferred. In support of this opinion the General

Committee notes Arkansas law concerning when sales tax

would be applicable to a transaction such as the transfer

of capital assets from the primary to the general election

committees. Although the General Committee may be correct

about Arkansas law concerning sales tax, 11 CFR

59034.5(c)(1) is intended to provide a formula for the

allocation of the cost of assets. Part of the cost o~ an

asset is any applicable sales or other tax.

Page 56, 12/27/94

Although, in a memorandum submitted by the Primary Committee

in response to the exit conference, it states that mailing of

5,000 to 6,000 pieces per day were being handled. The

relationship between these two memoranda is not clear.

3 U'U1!JQfJft--~-=

'P889 50 of Lf2K

.Y
53

second half of July, to almost 27,000 pieces in August, and then

it decreased to almost 19,000 in September. In our opinion, the

documentation the General Committee submitted indicates they

accomplished their objectives with their old equipment during the

primary period, but would have definitely needed expanded

capabilities during the general election period.

With respect to delegate tracking, the information provided

indicates that at the end of April 1992, the operation was moved

to a separate location and utilized a personal computer network.

The General Committee also notes that this equipment was then used

at the convention. It is agreed that this equipment is a primary

expense. However, information available does not indicate how

much, if any, of the cost of this equipment is included in the

amount addressed above. Therefore no adjustment has been made.

° The General Committee also argues that the audit analysis

is inconsistent since the equipment is challenged but not

increased levels of staffing. Although the General Committee may

be correct that some staff hired by the primary Committee may have

been working on the general election, Committee records contain no

documentation that provides information to form a basis for such a

challenge.

~-----~~--- --o-Finally--the-Primary Commit_te~_I}Ql:_e~__t_h~_t in May and June

1992, it considered alternatives to acquiring ane-w--co-mputer----

system. However, it was concluded that an upgrade of the existing

system would cost approximately $400,000 and still be unreliable.

The Primary Committee decided to bUy the new system with the

expectation that "it would be transferred to the General with

depreciation of 40\". It is not argued that the campaign made the

wrong choice. However the alternative is not relevant to the

issue at hand.

In summary, the General Committee has made it clear

that the leased computer system used in the primary was not wholly

satisfactory. The reporting, some accounting, and the matching

funds processes were being handled by an outside vendor on the

vendor's computer system. Further, an important part of the

primary campaign, delegate tracking, was eventually moved to a

personal computer network at a different location and that network

was also used at the convention. It is also apparent that the

fully burdened leased system was not going to be adequate for the

increased levels of activity in the more intense general election

campaign, particularly given that two separate accounting and

reporting systems were to be moved from an outside vendor to an in

house function. Further, it would seem only logical that a new

system would necessarily be installed before the convention, given

the likely need to test systems and train staff on the new system,

as well as, transfer files before the general election campaign

was officially under way. Therefore, some lead time at a point

when the least disruption of ongoing functions would occur was

critical. It also appears logical that once a system was acqUired

page 57, 12/27/94
54

for the upcoming general election campaign, some of the remaining

needs of the primary campaign would be moved to the new system.

Based on the above, it was concluded that the new

computer system was a general election expense. Although no

information was available to perform an analysis, it was

acknowledged that some allowance for primary campaign use may be

appropriate. Also. as noted earlier, if any portion of the cost

of the personal computer network acquired for the delegate

tracking staff is included in the amount in question, that cost

would be considered a primary campaign expense.

With respect to the $79,708 for wiring the new

campaign office, the General Committee stated that "it was

incurred and used during the primary campaign and thus was a

qualified campaign expense by the Primary Committee." It was

agreed that the cost of the wiring should follow the computer

equipment. However, as explained above the computer equipment was

considered a general election expense.

The General Committee did note that $12,500 in rent

was erroneously paid by the Primary Committee.

b. polling

to

The Primary Committee conducted a number of

opinion polls between mid-June 1992 and the convention. The

primary Committee paid two firms, Greenberg-Lake and Opinion

Research Calling, for work in connection with these polls. Four

of the polls were identified on invoices as national polls and

copies of the scripts reviewed by the Audit staff showed that

nearly all of the substantive questions dealt with the then three

candidates in the general election. The remaining polls were

referred to as Convention polls and were conducted during the

Democratic National Convention. As with the national polls, the

questions are general election in nature. The invoices from

Greenberg-Lake that could be associated with these polls totaled

$108,621, including $37,500 in consulting and $12,733 in travel,

and are treated as general election expenses. Opinion Research

Calling received $93,904.

In response to the Audit staff presentation in

the exit conference, the primary Committee argued that the Audit

Division's position that these are general election expenditures

is without legal and factual basis. The national and convention

polls were conducted in order to ensure delegate support for the

candidate. The Audit staff's position that these polls conducted

in June and July were for the purpose of influencing the general

election is inconsistent with FEC regulations. Under 11 CFR

5106.4 polls decrease in value and are only worth 50\ after 15

days.

The primary Committee also submitted a

memorandum from the Executive Director of Greenberg Research Inc.

Page 58, 12/27/94
ss

-(formerly Greenberg-Lake, Inc.) dated November 8, 1993. According

to the memo the majority of the national surveys tested the

viability of different running mates and whether the delegates

would 'support the potential running mates. The state surveys were

used to maintain delegate support in those states. The convention

tracking monitored support and was used for the delegates and

state party chairs to maintain delegate support.

During the Audit staff's review of the 4

National Surveys, which were comprised of at least 50 questions

each, it was noted that the questions related to comparisons

between the general election candidates and to various issues.

Only 2 of the scripts contained a question (one) about

vice-presidential candidates. The General Committee's argument

that the timing of some polls is such that their value would be

significantly diminished before the date of nomination is not

persuasive. It should be noted that one of the types of

pre-expenditure report period expenditures specifically permitted

pursuant to 11 CFR S9003.4(a)(1) is polling. This regulation

gives recognition to the fact that general election planning must

.~ begin before the convention and may include the evaluation of

polling data. Therefore polling data gathered before the date of

nomination concerning general election candidates and issues are

useful to the general election effort. Also, the General

- ----Gomm-i-t-tee-stateJ>-that _polls_...._er_e__useti_~Q_IllQni~_Of __ ll!'ld ma i ntain

"::- delegate support, but failed to provide evidence or--documentildonwhich establishes how this was accomplished.

In the Interim Audit Report, the Commission

requested the General Committee provide documentation to establish

ho.... the results of each of the" national surveys was used to test

the viability of different running mates, how the results of each

of the state surveys was used to maintain delegate support in

those states, and how the results of each of the convention polls

was used to monitor support and was used for the delegates and the

state party chairs to maintain delegate support. It was also

recommended that the General Committee explain and document any

other use of the polls and provide a breakdown of the costs

associated ....ith each poll, including the Greenberg-Lake consulting

and travel costs. The General Committee was also to provide

information on any use of the polling results by the General

Committee or the Compliance Fund.

The General Committee did not provide the

specific information requested above, but in response to the

Interim Audit Report, the General Committee did submit an

affidavit from Donita Buffalo Hicks, Managing Director of

Greenberg Research, Inc .. According to the affidavit, polls were

performed in order to develop the candidate's message prior to and

during the Convention and present the candidate at the Convention

in order to ensure the necessary delegate support to ensure the

nomination. The General Committee concludes that the

pre-Convention period was critical for consolidatlng the

candidate'S support and demonstrating his electability. The

Page 59, 12/27/94 -3

;uucman --"7":"""'"

Pll89 59 of Ie; J?'
56

General Committee also submitted a letter from Joseph t. Sandler,

General Counsel with the Democratic National Committee (DNC) that

states, as of July 13, 1992, then Governor Clinton had 2,089

delegates formally pledged to him, out of 2,145 delegates needed

to nominate.

The letter does not specify how the DNC

arrived at the number of delegates. According to the publication

Presidential Primaries and Caucuses 1992, A Handbook of Election

Statistics, copyright 1992, Congressional Ouarterly, Inc., the

candidate had a total of 2,078 pledged delegates at the end of all

the primaries, caucuses, and conventions. This total does not

include over 1,000 super delegates and uncommitted delegates.

The affidavit by Ms. Hicks, continues that

"Convention polling was done each night after prime-time and the

results of the Convention polls were presented each morning to the

party leadership in order to rally the delegates, to assure

delegates that Governor Clinton'S popularity was strong and,

accordingly, that he was an electable candidate. In fact, all

polling leading to the Convention was designed to ensure delegate

support by determining whether the Candidate's message was being

communicated effectively and in order to demonstrate the

Candidate's electability." She goes on to state that prior to the

---Convention,_poll.s_"~~I>_t~~~_~echoice of a vice preSidential

nominee by measuring name recocini-tfofl-afldpublic-perception-of o--

individual candidates." She also states that polls can be

outdated within a few days.

The candidate was nominated on July 15, 1992.

According to Mr. Sandler's letter to the Primary Committee, the

candidate had nearly a sufficient number of delegates pledged to

him by July 13. The first convention poll was conducted the

evening of July 13. In the opinion of the Audit staff, it is

doubtful whether the polls conducted on the nights of July 13th,

14th, 15th, and 16th with the results available the next day could

have much effect on the outcome of the candidate's nomination.

Most of the democratic candidates that received matching funds

were no longer seeking the nomination at the start of the

convention, the Candidate likely had sufficient delegates to

secure the nomination by the evening of July 13. Further, two of

the polls were conducted after the candidate was nominated.

From the information provided by the General

Committee, the 4 national polls, including state assessments, were

conducted from mid-June, 1992 through July 8, 1992. According to

the documentation obtained during fieldwork there was a formal

announcement of then Senator Gore as the Vice Presidential

candidate in Little Rock on July 9. The Audit staff concluded

that it was doubtful whether the last poll would have had much

effect on his selection.

The General Committee takes the position that

the Audit staff disagrees with 11 CFR 5106.4 or refuses to

page 60, 12/27/94 3
c

.....

w ,

57

acknowledge that poll results decrease in value over a short

period of time. According to the General Co~ittee, Nit is

difficult to perceive how polls which are of virtually no value by

the date of ineligibility are for the purpose of influencing the

general election." The Audit staff does acknowledge that polling

results depreciate very qUickly. The General Co~ittee, however,

appears not to acknowledge that the general election campaign

begins before the date of nomination. It is the Audit staff's

opinion that these polls have little to do with obtaining the

nomination, but rather appear to relate to the campaign for

election. Instead, the General Co~ittee takes the position that

none of these polls have any value to the General Co~ittee, when

in fact, two of the polls were conducted after the candidate

received the nomination.

The General Co~ittee also contends that the

conclusion in the Interim Audit Report is at odds with past

Co~ission decisions. Specifically, the General Co~ittee cites

the Reagan-Bush '84 audit where the Co~ission determined that

some polling and voter registration expenses incurred after a

state's primary were primary expenses. In that case a number of

polls were challenged beginning as much as three months before the

convention. Further, that report does not deal with the content

of the polls. Although the General Committee asserts that the -- -questions_ asked_can_not_b_e_usect_to_Q~t:~r~irl_e_t_h_epurpose of a

poll, it is the only indication available. In the-case-a-tnaria-,---

the polls are conducted very shortly before the convention and the

questions are indicative of a general election expense.

Therefore, the Co~ission's action in the Reagan-Bush '84 audit

does not dictate the result in this case.

The General Committee also references the

Bush/Quayle '88 audit where certain pre-convention travel expenses

were determined to be primary expenses rather than, as that

committee contended, general election expenses. In that case, the

expenses were for campaign appearances before the convention which

are not covered by 11 CFR 59003.4(a)(I) and therefore are not

relevant. The remaining cases referenced by the General Co~ittee

are the Dukakis and Kemp committees dealing with fundraising and

state allocation of office expenses. Neither of these examples

are relevant to the issue at hand.

The General Committee also disagreed that

$5,985 assigned to the cost of these polls is accurate. The

General Co~ittee did not provide any documentation on the cost of

each poll as requested in the Interim Audit Report. An attachment

to the General Committee's narrative response provides no specific

information. No adjustments have been made absent the requested

information. The Audit staff concluded that the General Co~ittee

had not responded to the reco~endations in the Interim Audit

Report sufficiently to establish that these polls did not

primarily benefit the General Co~ittee.

Page 61, 12/21/94
c

56

c. General Election Media Expenses

Both the Primary Committee and the General

Committee utilized the services of the same media firm, Great

American Media, Inc .. One of the services that was provided was

the production of a biographical film about President Clinton

entitled "The Man From Hope".

President Clinton received the Democratic

nomination for President on July 15, 1992. On July 16, prior to

his acceptance speech, the film was shown at the Democratic

National Convention. By virtue of when the film was shown, it was

available for broadcast by several television networks as part of

their convention coverage. According to Primary Committee

records, the total cost of producing the film was $191,273 with

the Primary Committee paying $161,273 and the 1992 Democratic

National Convention Committee, Inc. ("DNCC") paying $30,000. A

revised version of this film was aired by the Democratic National

Committee during the week of August 16-20, 1992. The cost of that

broadcast was considered a coordinated party expenditure pursuant

to 2 U.S.C. S441a(d)(2). A revised version was also aired by the

General Committee during the period October 9-12, 1992.

The_IrLt!!J:illL~J.1cij.~_Report concluded that given

no known use of the film during the pr(ma-ry-pe-riod~-an-cost:s------

associated with the film are general election expenses. This

transaction has the effect of increasing expenditures subject to

the overall limitation.

The General Committee's response to the

Interim Audit Report makes a number of arguments concerning the

convention film. First, the General Committee states that in the

Interim Audit Report on the Convention Committee, the auditors

took the position that the portion of the cost paid by the

Convention Committee was an excessive contribution to the Primary

Committee. That is incorrect. The referenced report noted only

that the amount paid was considered an impermissible use of public

funds and that the Primary Committee had paid the remaining

charges related to the film. As the General Committee correctly

notes, the Commission decided that the portion of the cost paid by

the Convention Committee was an acceptable convention expense.

The response also alleges that the Primary

Committee was told at the exit conference for the General

Committee that the Audit Division's position with respect to the

film was evolving. Although, the staff does not recall using that

term, given that the issue was being considered in three audit

reports only two of which could be discussed at the exit

conference, the staff was limited in what could be said.

The General Committee also argues that the

expense meets the definition of a qualified campaign expense for

the Primary Committee. In this regard the General Committee's

Page 62, 12/27/94
~::..-

If)

59

contention depends on the expense being in connection with the

Candidate's campaign for nomination. As explained in the Interim

Audit Report, in the opinion of the Audit staff, that is precisely

where this expense does not meet the definition. It was not used

until after the nomination had occurred.

The General Committee argues that the purpose

of the film was to introduce the Candidate to the convention and

that it is therefore a proper primary expense. Further, the

General Committee contends that the Commission has always allowed

costs for staff travel back from the convention to be considered a

primary expense even though those expenses are incurred after the

convention. The General Committee is correct concerning allowing

the expenses for staff travel back from the convention to be

considered primary expenses, although incorrect about those

expenses being incurred after the convention. The expense is

incurred before the individual leaves to attend the convention.

None of this changes the fact that the film was produced to be

shown after the nomination and, in the Audit staff's opinion, is a

general election expense.

The General Committee states that in the past

the Audit staff has not challenged such expenses. Again the

General Committee is correct. If similar films have been produced

by·· primary-commi.ttees_they_haYLnotb.eJ!n_.JJ:i~nt Hie!.c:Ld.Jl!"i.nq th.e

course of the audits. The General Committee continues, that ief-a-·

restriction is to be placed on the payment for such films to a

particular source, it should be done in the context of a

rUlemaking. The Commission's regulations do not attempt to list

each and every type of expense that a primary committee mayor may

not pay. There is no need or practical way to create such a list.

The regulations state that expenses paid by the primary committee

must be in connection with the candidate'S campaign for

nomination. This film was created for use after the nomination

had been awarded. Therefore, the Audit staff concluded that it is

not in connection with the campaign for nomination. It is however

a proper general election expense.

Finally, the General Committee disagrees with

the determination of the Candidate's date of ineligibility for the

primary matching funds. It is argued that the date of the

acceptance speech rather than the date of the vote is the relevant

date. The Commission'S regulations at section 9032.6 define the

end of the matching payment period for a candidate seeking the

nomination of a party which nominates its Presidential candidate

at a national convention as the date on which the party nominates

its candidate. The Code of Federal Regulations at section

9033.5(c) states the ineligibility date shall be the last day of

the matching payment period for the candidate. These provisions

are clear and do not reference the date of an acceptance speech.

Further, the primary Committee was notified of the date of

ineligibility (7/15/92) shortly after the convention and did not

object until the response to the Interim Audit Report.

Page 63, 12/27/94
c

60

In support of its theory, the General

Committee states that the Commission must defer to party rules on

the date of nomination and submits a letter from the General

Counsel of the Democratic National Committee which the General

Committee states establishes the date of ineligibility as July 16,

1992, rather than July 15. In the letter Counsel states the

procedural rules for the 1992 convention provide that "following

the role call vote on selection of the presidential candidate, the

Permanent Chair is to 'appoint a committee to advise the nominee

of his or her selection, to determine if he or she will accept the

nomination and to invite the nominee to deliver an acceptance

speech to the Convention' [emphasis in original text]."

First, contrary to the General Committee's

statement, the Commission is not required to defer to party rules,

but rather to follow the provisions of the Act. The Commission's

determination has done that. Second, the quoted section of the

Party's procedures do not suggest that the nomination is not

"official" until the acceptance speech. Instead, the language

supports the Commission's determination by referring to the

candidate as the "nominee" in two places within the one sentence.

The General Committee offers a number of other

observations-~oncerningthe-timing_of_thev_~te\oll,-en held late in

the day which could apply equally to the date on whic}l- a--cand1<fate -- ------- makes an acceptance speech.

For the reasons stated above, the conclusion

contained in the Interim Audit Report was unchanged in the final

audit report presented for Commission consideration.

In addition to the cost of producing the film

discussed above, a number of other general election media expenses

were paid by the Primary Committee. An invoice dated July 20,

1992 for $6,109 for work relating to focus groups was identified.

One of two versions of the invoice notes that the focus groups

were "to test general election messages".

Another invoice was for "3Smm Film Shoot" at

the Democratic National Convention on July 15 and 16, 1992. These

dates were the candidate's date of ineligibility and the following

day. The Interim Audit Report concluded that film taken on these

days could have little opportunity to be used in the primary

campaign. The invoice was for $4,950.

A third invoice in the amount of $lB,900 is

one of a number billed to the Primary Committee for travel,

administrative costs and fees, and some production related items.

The invoice contains a statement that "THIS INVOICE IS ENTIRELY

FOR EXPENSES INCURRED DURING THE PRIMARY PERIOD". However a

review of the charges shows that the invoice appears to cover the

period July 16, to August lB, 1992 and is apparently a general

election expense.

Page 64, 12/27/94
.~

, '

61

Finally, the primary Committee paid an invoice

dated August 20, 1992, which noted it was for a "Test Response

Spot". The invoice is addressed to the Clinton/Gore '92

Committee. Absent further documentation, the $4,106 is included

as a general election expense.

With respect to the "35mm Film Shoot" ($4,950)

the General Committee points out that one of the mailings

discussed above included a photo of the Presidential and Vice

presidential candidates on the podium at the convention that had

been promised in an earlier primary solicitation. Although, the

General Committee does not provide any evidence to show that this

expense was for that photo, it is reasonable to conclude that the

two are related. The General Committee's explanation is accepted.

The General Committee prOVided an affidavit

from Anne Marie Bannon, Controller for Great American Media, Inc.

to address the $18,990 charge for travel, administrative fees, and

production. Ms. Hannon states that with the exception $760 in

travel expenses, all of the charges are for primary work. She

explains that it is not unusual for billings to be delayed due to

the need to gather information from staff and vendors, and await

credit card billings. Ms. Hannon prOVides no detailed information

to_os uppo-£ t--the -e-xplana t i on-.and--does_no t_exp1a i n_why_the__ invQLcf! _

indicates that the charges relate to a general election period.

The General Committee does not address the

remaining two charges.

The Audit staff concluded that the total

amount of media expenses paid by the Primary Committee is

$190,478.

d. Miscellaneous General Expenses

!..[)

c-'

A number of other expenses were noted that are

considered to be general election expenses paid by the Primary

Committee. Each is discussed briefly below:

o The primary Committee purchased 150,000 copies of the book

Putting People First. The total cost was $110,286 based

on invoices dated July 6 and 10, 1992. The Primary

Committee sold 106,000 copies of the book to the General

Committee for $15,900. The value was determined by

multiplying $.25 per copy times 60\, to arrive at $.15 per

copy times 106,000 copies. There are two errors in this

calculation. First, the cost of the books, using the

lower of the two prices paid by the Primary Committee, was

approximately $.72 per copy. Second, since these books

are not "capital assets" they are not subject to the

depreciation allowance provided at 11 CFR S9034.5(c)(1).

The General Committee should have paid $.72 x 106,000, or

Page 65, 12/27/94
62

$i6,320. Therefore an additional $60,420 is due from the

General Committee.

In response to presentation of this matter at the exit

conference, the Primary Committee stated that it does not

agree that there is a receivable from the General

Committee. The Primary Committee stated that the majority 0: the publications were used during the primary and the

Democratic National Convention. They also stated, that

the value of the publications was not required to be

transferred as an asset to the General Committee pursuant

to 11 CFR S9034.5(c) because they are not capital or other

assets.

In total there was 150,000 copies purchased from the

vendor. Of that total 106,000 were purchased by the

General Committee. If the majority of these books were

used during the primary and convention, it would appear

that 106,000 would not have been available to sell to the

General Committee. No documentation to support the

statement was submitted. Further, the audit analysis did

not characterize the books as either a capital or other

asset, but rather a general election expense paid by the

Primary Committee.

In response to the Interim Audit Report the General

Committee states that "[blased on the best information

available to the General Committee at this time, it

appears that the pamphlets sent to and distributed at the

Convention were erroneously counted in the inventory

prepared by the Primary Committee". The General Committee

also objects to referring to these pamphlets as books.

The General Committee provided a copy of the booklet at

issue and copies of two brochures of the same name

produced by the General Committee and, an affidavit from

Jann Greenland stating that it was her understanding that

the original booklet was for use in the final stages of

the Primary Campaign as well as a promotion piece during

the convention. Further, according to the primary

Committee, even if some booklets were sold to the General

Committee, since they weren't used in the general

election, they should not be considered a general election

expense and the Committee should refund the General

Committee the $15,900 paid.

The Audit staff used the word "book" because the

documentation submitted by the Primary Committee during

fleldwork used the term. The information provided does

not establish that the booklets were shipped to the

Convention, that they were not used in the general period,

or how the inventory prepared after the Convention could

have concluded that 106,000 booklets that did not exist

were in inventory.

Page 66, 12/27/94
Page 67, 12/27/94

......

.... ; .

c

o

63

At the time the Primary Committee presented the inventory

to the Audit staff, there did not seem to be any question

as to the existence of the 106,000 booklets sold to the

General Committee. At a minimum, the General Committee

could supply an affidavit from the Primary Committee

personnel responsible for the inventory to explain whether

106,000 booklets existed or not. Absent additional

information the cost of the booklets is considered to be a

general election expense.

The Primary Committee contracted ~ith Press Association,

Inc. for a news service. The contract was to run from

June 26, to November 30, 1992. The total cost was

$14,753. The primary Committee paid $10,003 of this

amount. This is considered a general election expense.

In response to the Interim Audit Report. the General

Committee agrees that it has overpaid its portion, but

disagrees with the entire amount being a general election

expense. The Response contends that the correct amount of

the overpayment by the Primary Committee was $7,687. That

amount was refunded to the primary Committee on June 10,

1994. Neither committee explained how this amount was

arrived at. Absent additional information, the entire . $.1-0 ,.003-is-.considered.a .genera.Lelection. expense_.. _

The Primary Committee chartered aircraft from Air

Advantage. Payments via wire transfers were made in

advance and charges were applied as incurred. At the end

of the primary election period (7/15/92) a credit balance

existed that was applied by Air Advantage to general

election charges. The Primary Committee performed a

reconciliation and determined that $27,222 was due from

the General Committee. In addition, the Primary Committee

had paid $17,000 for a reconfiguration of the aircraft,

bringing the total amount due from the General Committee,

per the Primary Committee's reconciliation, to $44,222.

SUbsequently, the Primary Committee concluded that $15,000

of the $17,000 reconfiguration charge could be considered

a primary expense since the work was done on July 10,

1992, prior to the candidate's date of ineligibility. It

is clear that improvements to the aircraft were done in

preparation for the general election campaign. The only

use of the aircraft after July 10, 1992 and before the

Candidate's date of ineligibility was to transport the

Candidate and then Senator Gore to the convention. After

the convention the aircraft was used in the general

election campaign.

In response to the Interim Audit Report, the General

Committee aarees that the $2,000 and the 527,222 were

erroneously' paid by the primary Committee, and notes that

the amounts were reimbursed on January 11 and March 24,

1994. However, it still disagrees with the S15,000

~GR)(J:!iT_....:.3_;--'7OP" a;; e-,Z ot /1) K •
64

reconfiguration charge. Since the reconfiguration costs

were incurred on July 10, 1992 and the airplane was used

in the primary, in the General Committee's opinion, the

entire cost was allocable to the primary. The one time

use of the aircraft before the convention does not justify

the allocation of this cost to the primary.

o The Primary Committee made other payments to various

vendors that appear to be related to the general election

campaign. Some of the items are expenses incurred in the

general election period While others are monthly expenses

that should have been allocated between the Primary

Committee and the General Committee for the month of July,

1992. The total amount is $20,066.

In response to the Interim Audit Report, the General

Committee noted that refunds totaling $14,420 were made on

January 11 and March 24, 1994 to the Primary Committee and

it was planning to refund the remaining $5,646.

In the Interim Audit Report, the amount

owed to the primary Committee from the General Committee was

$879,361. prior to the Commission meeting of December 15, 1994,

this amount had been revised, based on the General Committee's

r-esponse, _to_ $8'H._41l._0f _this_aJI19~n~,_~?J.,~~_9__l'I~s})f!en refunded

by the General Committee as of June 30, 1994. These refundsleave--

an outstanding balance of $823,082 due to the Primary Committee.

However, at the Commission meeting of

December 15, 1994, the Commission found many of these expenses

to be similar to the expenses in the Bush-Quayle '92 report

considered at the Commission meeting of December 8, 1992. As a

result, some of the expenses were allocated, 50\ to the Primary

and 50\ to the General Election. The capital assets were

allocated 40\ to the Primary as permitted by 11 CFR 59034.5(cl.

These changes are detailed at Attachment t5. As of June 30, 1994,

these refunds leave an outstanding balance of $398,480 due the

Primary Committee. This amount is included in the figure for

accounts payable due from the Primary Committee on the General

Committee's NOQCE Statement at Attachment .6.

3. Executive Jet Management

An internal primary Committee memorandum dated June

2. 1993 noted an overpayment to this vendor. The vendor sent a

refund check to the General Committee which included $4,778 which

was properly due to the Primary Committee. The Audit staff's

review indicated this was a payable due the Primary Committee by

the General Committee. This amount ($4,778) was included as an

offset to expenditures by the General Committee and therefore

reduced expenditures subject to the spending limit. Thus, $4,77B

had been added to our analysis of expenditures subject to the

spending limitation.

Page 68, 12/27/94
65

In response to the Interim Audit Report, the

General Committee agreed that this item should have been refunded

to the Primary Committee and that it should not have been an

offset to the General Committee's expenditures. The amount will

be transferred according to the General Committee's response.

4. Alamo Rent A Car National Contract

In an internal memorandum dated May 18, 1993, the

Primary Committee noted that based upon its analysis a total of

$43,420 should be transferred from the General Committee to the

Primary Committee. The amount represented an overpayment by the

Primary Committee credited by the vendor to the General Committee.

Accordingly, this amount ($43,420) was not reported as a

disbursement by the General Committee and thus was not included in

expenditures subject to the spending limitation. Therefore, the

Audit staff has included this amount in its analysis of

expenditures subject to the spending limitation.

In response to the Interim Audit Report, the

General Committee agreed that this item should have been treated

as an expenditure subject to the spending limitation. The Primary

Committee has been reimbursed.

S. Sprint & C&P Telephone

During fieldwork, the Audit staff identified

overpayments to Sprint. The overpayments, which appear to have

resulted mostly from bills having been paid twice, were made by

both the Primary Committee and the General Committee.

Documentation prOVided by the General Committee

indicated that refunds were received which included amounts

overpaid by both committees. The documentation noted that

refunded amounts totaling $19,198 were moneys due the Primary

Committee. This amount was included as an offset to expenditures

to the General Committee and therefore reduced expenditures

subject to the spending limit.

In response to an exit conference presentation, the

primary Committee submitted documentation relative to C&P

Telephone which indicated that the Primary Committee made

overpayments of $3,606 which were credited to the General

Committee's account. As such, this amount was not reported as a

disbursement and thus was not included in expenditures subject to

the spending limit.

Therefore, the General Committee owed the Primary

Co~ittee a total of $22,804 (S19,198 • $3,606) relative to these

two vendors which the Audit staff had included in its analysis of

expenditures subject to the overall spending limitation.

Page 69, 12/27/94 ~rTJ.CmlJlil.__..3_7=_

~..JctL_ of log"
8.

Page 70, 12/27/94

66

In response to the Interim Audit Report, the

General Committee agreed that these amounts were General Committee

expenditures subject to the spending limitation. These amounts

have been reimbursed to the Primary Committee.

6. Adjustment for Duplicate Payments to be Refunded

In the Interim Audit Report, the Audit staff made

an adjustment for duplicate payments recovered from vendors and

those yet to be resolved totaling $21.614 (see Finding IIl.B.l.

above). In response to the Interim Audit Report, the General

Committee stated this should be adjusted based on its response to

Finding III.B.l. Based upon that response, the Audit staff has

determined that duplicate payments in the amount of $8,329 remain

unresolved (see Attachment 2). Based on the General Committee's

response, the Audit staff's adjustment, as noted above 1$21,614).

remains unchanged.

7. Adjustment for Apparent Non-Qualified Campaign

Expenses

In the Interim Audit Report, the Audit staff had

made an adjustment for non-qualified campaign expenses totaling

----$-a?, 077--(see--Finding _I I1.B.2_.• _aboye }._

Based on the General Committee's response to the

Interim Audit Report, Finding III.B.2., the Audit staff has

revised our adjustment for apparent non-qualified campaign

expenses to $70,296 (see Attachment 3).

Adjustment for Accounts Payable reported as

Outstanding at June 30, 1993

In the Interim Audit Report, an accounts payable

total of $549,770 was added to operating expenditures. This amount

represented accounts payable reported by the General Committee as

outstanding on June 30, 1993. The General Committee provided a

listing of these accounts payable to support the reported figure.

Included in the listing was a debt owed to the

Primary Committee in the amount of $78,541. However, no

documentation or explanation was provided detailing the nature of

the debt. The Audit staff was concerned that this debt ($78,541)

may duplicate amounts owed to the Primary Committee which we had

identified above (Findings III.C.2., 3., C, and 5.); and, would

result in an overstatement of expenditures subject to the overall

spending limitation. The Interim Audit Report noted that should

additional documentation indicate an overstatement, the amount

subject to the spending Ilmltation would be adjusted accordingly.

The General Committee's response to the Interim

Audit Report states that the payable to the Primary Committee,

ATTACm/:E1:'! _3:.--.....,~~ Page ZO of lOt"'
"C--

'-.

67

included in the Audit staff's adjustment for accounts payable

duplicates the specific adjustments to expenditures subject to the

spending limitation detailed at Findings III.C.2., 3., 4., and 5.

by the amount of $77,942. However, the General Committee's

response fails to provide any documentation detailing those items

composing the $77,942.

The Audit staff has revised the adjustment for

Accounts payable based on disclosure reports filed by the General

Committee. The General Committee reported accounts payable at

June 30, 1994, of $165,536, which included a payable to the

primary Committee in the amount of 513,244. Due to the absence of

documentation noted above, this payable to the Primary Committee

($13,244) could still duplicate amounts also detailed at Finding

III.C.2 ..

9. Amount owed to DSCC WIN '92 by the General

Committee

Based on documentation submitted by the General

Committee subsequent to the exit conference, a refund received

from SNET included funds paid by OSCC Win '92 "for additional

service for the coordinated campaign." The General Committee

stated it would "refund the appropriate share to the OSCC"

LSl_L 2_39l. This amount was reported by the General COllllllittee as an

offse t--t-oexpe-ndltur-e-s- wni cn- r-educed-ejfpenditUres-subj ect-to the----

spending limit. Thus, the Audit staff included $1,239 on its

analysis as an increase to expenditures subject to the spending

limitation.

The Interim Audit Report recollllllended that the

General Committee demonstrate that this item should not be

included in the calculation of expenditures subject to the

spending limitation. The General Committee's response to that

report states that it agrees that this item should not be included

as an offset to expenditures subject to the spending limitation.

General Committee disclosure reports indicate this amount has been

refunded.

10. Adjustment for Capital Assets

Based on the Audit staff's review of the available

documentation, the cost of computers and related equipment

transferred from the Primary COllllllittee to the General Committee

was determined to be $540,313 (see Finding III.C.2.a.). Based

upon 11 CFR S9003.3{a}(2}(ii}, the Audit staff then allocated 70%

of the cost of these assets as compliance related; the remaining

30%, or 5162,094 (5540,313 x 30%) were considered capital assets

of the General COllllllittee. Adjusting for depreciation, the value

of the General Committee'S capital assets was determined to be

$97,256 (5162,094 x .60).

Page 71, 12/27/94
c.

68

This adjustment recognizes that the sale of assets

would result in a partial recoupment of expenditures made to

procure these assets.

The General Committee's response to the Interim

Audit Report did not altered the Audit staff's position, as such

no adjustment to this figure was made in the report as presented

for Commission consideration.

As a result of the Commission's deliberations as

discussed above in Finding III.C.2.a., the Audit staff determined

the cost of the assets transferred to the General Committee to be

5327,559. Adjusting for that portion of the assets allocable to

the Compliance Fund (70\) and for depreciation (40\), the value of

capital assets for the General Committee was calculated to be

$56,961 ($327,559 x 30\ x 60\).

11. Expenditures That May be Reimbursed to the General

Committee from the Compliance Fund

The Audit staff utilized the General Committee's

disbursement database to identify, at the time of the Interim

Audit Report, $1,829,239 in compliance-related expenditures made

-------by the-Gene ral--Committee -th rough-DecembeL_4, 1992_Lthe__eJld_ot _t:h_~ _

expenditure report period). In addition, a 100\ review of

disbursements made by the General Committee from December 5, 1992

through June 30, 1993 identified an additional $900,414 in

compliance-related expenditures. The Audit staff's review of

disclosure reports filed by the General Committee, which covered

the period July 1, 1993 through June 30, 1994, identified

compliance-related expenditures totaling $645,643. Based upon the

above, expenditures totaling $3,375,296 ($1,829,239 + $900,414 +

$645,643) could have been paid by the Compliance Fund.

After adjusting for $2,595,000 transferred from the

Compliance Fund through June 30, 1994, there remains $780,296

($3,375,296 - $2,595,000) that may be reimbursed.

The General Committee's response states that it

agrees that additional funds may be reimbursed to the General

Committee by the Compliance Fund, but disagrees with the auditors'

numbers as to the amount necessary to remain within the limits.

Shown below is a presentation of the Audit staff's

analysis of expenditures subject to the limitation updated based

upon the General Committee's response and disclosure reports filed

through June 30, 1994:

Page 72, 12/27/94

ATTACHllEUT 3

Page 751---

0

-"-~7'lZ""j'<'!~": , ----
69

CLINTON/GORE '92 COMMITTEE

Expenditures Subject to the Spending Limitation

as Determined by the Audit Staff at 6/30/94

1. Reportable Disbursements from

Inception through June 30, 1994

Adjustments to Reportable Disbursements

2. Less: Loan Repayment

3. Less: Offsets to Operating Expenditures

4. Less: Accounts Receivable Due

at 6/30/94 11/

5. Less: Refunds from the Compliance Fund

6. Less: Amount Receivable from the

Primary Committee (see Finding III.C.l.)

$64,920,993 10/

($125,000)

($7,012,115)

$181,812

($2,595,000)

($43,726)

7. -Add:---Amountdue--to-the--primary -Gommit-t-ee--------

(see Finding III.C.2. and 3.)

8. Less: Ouplicate Payments (see Finding III.C.6.)

9. Less: Non-Oualified Campaign Expenses Subject

to Repayment (see Finding III.C.?)

$403,258

($21,614)

($70,295)

r"- '..

10/

11/

This figure does not include Worldwide commissions and credit

card charges netted from amounts forwarded to the General

Committee. Such an adjustment would also require an

adjustment to offsets received by the General Committee,

resulting in offsetting adjustments and no change in the

final amount of expenditures subject to the spending

limitation.

It should be noted that this figure does not include about

S190,OOO in media refunds that were under review by the

General Committee's media vendor to determine if the money

is due the General Committee or DNC as a result of 44la(d)

expenditures. The General Committee has recently submitted

additional documentation. After the Audit staff has

reviewed the documentation, this figure will be adjusted

accordingly. In addition, the Audit staff has made an

allowance for uncollectible reimbursements due from the

Secret Service totaling $108,982. This figure also

excludes the accounts receivable due from the primary

Committee ($43,726) noted in item 6. below.

Page 73, 12/27/94
70

10. Add: Reported Accounts payable at 6-30-94

(see Finding III.C.S.l

11. Add: Amount due DSCC Win '92 from The

General Committee (see Finding III.C.9.l

12. Less: Adjustment for Capital Assets

(see Finding III.C.I0.)

S165,536

$ -0-

(S58,961)

13. Add: Donated Equipment (see Finding III.A.l.) S -0-

14. Add: Payments Not Made by the General Committee

(see Finding III.A.2.) $ -0-

15. Add: Deposits Credited to General Committee

Bills (see Finding III.A.3.l S1,OOO

16. Add: Amended Contracts

(see Finding III.A.4.) $111,100

17. Add: Repayable Income Earned

(see Finding III.D.)

---------1 a.- Add-:-Income--Ea rned_Credited_to_

vendor Invoices (see Finding 111.0.)

Adjusted Expenditures Subject

to the Spending

Limitation

Less: Limitation (2 U.S.C. S441a(b)(1)(B»

Amount Over/(Under) the Limit

Less: Expenditures that may be Reimbursed

By the Compliance Fund - Total

Available S780,296

(see Finding III.C.ll.)

Amount in Excess of the Spending Limitation

S6,646

-- - -- - --

$7,830

$55,507,840

($55,240,000)

$267,840

($267,840)

$ -0-

Based on the above analysis, it appears that the

General Committee has exceeded the limitation at 2 U.S.C.

S441a(b)(1)(B} in the amount of S267,840. However, it is

recognized that reimbursements permitted from the Compliance Fund

as noted above would elimlnate any excessive amount and resulting

repayment.

The Interim Audit Report recommended that the

General Committee provide evidence that the expenditure limitation

has not been exceeded. Absent such evidence, the Audit staff

recommended that, based on the information available at that time,

Page 74, 12/27/94
the Compliance Fund transfer to the General Committee 5706,499 for

expenditures that may be paid by the Compliance Fund in order to

reduce General Committee expenditures subject to the expenditure

limitation and provide evidence of such transfer. 7he evidence

was to include a copy of the front and back of the negotiated

check or a copy of the debit and credit memos.

The General Committee's response to the interim

audit report addressed each of the areas noted above and is

detailed within each of the sub-sections discussed above.

Based upon our analysis of the General Committee's

response, disclosure reports filed and transfers from the

compliance Fund received to date, the Audit staff recommended in

the report considered by the Commission that the Compliance Fund

transfer an additional 5654,146 for expenditures that may be paid

by the Compliance Fund, in order to reduce General Committee

expenditures subject to the expenditure limitation, and provide

evidence of such transfer. The evidence was to include a copy of

the front and back of the negotiated check or a copy of the debit

and credit memos.

--~-

As a result of the above noted revisions, arising

from the Commission's deliberations on December 15, 1994, the

- -Audi-t---s-toaff-recommends that__the__C()jIIplt~~e Fund t ransfe r an

additional $267,840 for expenditures that- maybepaio-bytne------

Compliance Fund, to reduce General Committee expenditures subject

to the expenditure limitation and provide evidence of such

transfer.

D. Income Earned by the General Committee

Section 9004.5 of Title 11 of the Code of Federal

Regulations states, in relevant part, that the investment of

public funds or any other use of public funds to generate income

is permissible, prOVided that an amount equal to all net income

derived from such investments, less Federal, State and local taxes

paid on such income, shall be repaid to the Secretary.

Section 9007.2(b)(4l of Title 11 of the Code of Federal

Regulations states that if the Commission determines that a

candidate received any income as a result of the investment or

other use of payments from the Fund pursuant to 11 crR 59004.5, it

shall so notify the candidate and such candidate shall pay to the

United States Treasury an amount equal to the amount determined to

be income, less any Federal, State, or local taxes on such income.

Page 75, 12/27/94

The media vendor utilized by the General Committee

maintained an interest bearing escrow account on behalf of the

General Committee. The account was opened on August 14, 1992 and

through April 30, 1993, the General Committee had earned interest

totaling 56,613. As 0: May 22, 1993, 55,448 of the interest

earned by this account was applied by the vendor against the

General Committee's medla buys.
::::-,

-.,

I ..

In addition, the Audit staff identified $1,217 in

interest credited to a General Committee phone bill from

Southwestern Bell. The interest was earned on a deposit held by

the phone company. Thus, the General Committee earned a total of

57,830 (56,613 + 51,217) in interest. It should be noted that the

Audit staff has adjusted our analysis of Expenditures Subject to

the Spending Limitation by $7,830. This amount (57,830)

represents interest totaling 56,665 (55,448 + 51,127) which was

applied by the vendors against amounts owed by the General

committee; and 51,165 in interest which. absent evidence to the

contrary, the Audit staff presumes was also applied by the media

vendor against amounts owed.

With respect to our review of this matter, the Audit

staff was unaware of any taxes paid relative to this income.

Therefore, it appeared that a payment to the U.S. Treasury in the

amount of $7,830 was warranted. In addition, the Audit staff had

requested statements for the media escrow account subsequent to

April 30, 1993, in order to determine any additional interest

earned by the General Committee.

The Interim Audit Report recommended that the General

Committee provide documentation, to include but not be limited to - -bank-s tate~ents.--that-demonst ra ted_thealltounto_f__i nte rest earned

by the General Committee subsequent to April 30, 199f:--Furt:.h-er~­

it was requested that if any Federal and/or State income tax had

been paid on this income, the General Committee should submit

copies of the relevant tax returns. The Interim Audit Report also

noted that absent a demonstration that the interest should not be

considered income and that taxes had been paid, the Audit staff

would recommend the Commission make an initial determination that

$7,830 was payable to the United States Treasury.

In response the General Committee provided a copy of its

tax return for the fiscal year ended June 30, 1993. This return

indicated $3,529 in interest income with taxes due of $1,184. The

General Committee stated that "the Committee agrees that the

amount of interest earned net of taxes paid is owed to the U.S.

Treasury. "

Although the General Committee states that the interest

earned net of taxes is due the U.S. Treasury, no documentation was

prOVided to demonstrate the amount of interest earned since April

30, 1993. In addition, there is no mention of the discrepancy

between the $7,830 identified bv the Audit staff and the $3,529 in

interest reported on the tax return. Although the total interest

earned by the General Committee is not known at this time,12/ it

12/ The Committee's response did not include bank statements for

the media escrow account subsequent to April 30. 1993, which

could show additional interest earned that would increase the

amount payable to the U.s. Treasury.

Page 76, 12/27/94
~.

-

73

appears that a payment of at least $6,646 (57,830 - 51,184) to the

U.S. Treasury is warranted.

Recommendation #4

The Audit staff recommends that the Commission make an

initial determination that $6,646 is payable to the United States

Treasury pursuant to 2 U.S.C. S9004.5.

E. Stale-Dated Checks

Section 9007.6 of Title 11 of the Code of Federal

Regulations states that if the committee has checks outstanding to

creditors or contributors that have not been cashed, the committee

shall notify the Commission. The committee shall inform the

Commission of its efforts to locate the payees, if such efforts

have been necessary, and its efforts to encourage the payees to

cash the outstanding checks. The committee shall also submit a

check for the total amount of such outstanding checks, payable to

the United States Treasury.

The Audit staff performed bank reconciliations through

June 30, 1993 for both the General Committee and the Compliance

Fund. The Audit staff identified stale-dated checks relative to

the General Committee totaling $73,668 and stale-dated checks with

---Lespect--t~-the-Gompliance--Fund-totaling__ $3, 631.

At the exit conference, representatives for both

committees were provided with photocopies of workpapers detailing

the above noted stale-dated checks.

As part of the documentation submitted in response to

the exit conference, the General Committee provided a list of the

stale-dated checks annotated with the action taken with respect to

each item, such as, a replacement check was issued or that the

check had been voided. However, no documentation other than bank

statements supporting these actions was provided. Based on the

bank statements provided, the Audit staff was able to determine

that 511,139 in stale-dated checks have either cleared the bank or

been replaced by checks which have cleared the bank. Therefore,

at the time of the Interim Audit Report, $62,529 ($73,688 -

$11,139) in stale-dated checks remained unresolved for the General

Committee.

The Interim Audit Report recommended that the General

Committee and the Compliance Fund provide evidence that:

o the checks were not outstanding (i.e., copies of the front

and back of the negotiated checks and bank statements); or

o the outstanding checks are void (copies of the voided

checks with evidence that no obligation exists, or copies

of negotiated replacement checks); or

page i7, 12/27/94
c::

74

• inform th~ Commission of the committ~es' attempts to locate

the payees to encourage them to cash the outstanding checks

or provide evidence documenting the committees' efforts to

resolve these items.

Absent such information, it was stated that the Audit

staff would recommend that the Commission make an initial

determination that stale-dated checks totaling 566,160 (562,529 +

53,631) are payable to the United States Treasury.

In its response to the Interim Audit Report, the General

Committee states that of the S73,668 in stale-dated checks only

518,824 remain unresolved. The response states that inquiries

have been sent to the recipients and the Audit staff will be

apprised as additional information is received. The response

further states that a listing of additional checks that were

reissued (S27,183), cleared (Sl,604), and voided ($26,057), with

accompanying documentation are included. The response did not

address stale-dated checks totaling $3,631 issued by the

Compliance Fund.

Based on a review of the documentation submitted to

date, the Audit staff has determined that stale-dated checks,

totaling S18,674, for which th~ Gan:ral Committee mailed

inqui ri~s,-ar~--unreso-lved.. In·addi tion,forthose.sta.l~dated.

checks listed by the General Committee as having been voided

($26,057), copies of the voided checks with evidence that no

obligation exists were not prOVided as recommended and, therefore,

the Audit staff considers these items unresolved. The Audit staff

also notes that, of those stale-dated checks reissued by the

General Committee, copies of negotiated replacement checks (or

copies of the check and appropriate bank statements) were not

prOVided for checks totaling $8,560. For one stale-dated check

($253), the General Committee did not provide a bank statement

evidencing the item had been negotiated. As a result of this

analysis, the Audit staff has determined that stale-dated checks

totaling $53,544 ($18,674 + $26,057 + $8,560 + $253) are

unresolved with respect to the General Committee.

Therefore, the Audit staff reduced the amount of

unresolved stale-dated checks to $57,175 ($53,544 + $3,631). See

Attachments 7 and 8, respectively.

Recommendation i5

The Audit staff recommends that the Commission make an

lnitial determination that the Committees are required to make a

payment of 557,175 to the United States Treasury pursuant to 11

CFR 59007.6.

Page 78, 12/27/94
F~:-.:::.ns .r..

Tc~al .~oun: Repayable

2. ~or.-=ampaigD Re:atec Activity

c

Finding

r:.nding

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

- - !"\ .... __ .--., :n:.:cme Earned

S~a:e-Dated Checks

$ E ~-.

."-:'

S 7O, 295

S 6 ,6~5

$ 57,175

S 2~~ , ;"y -.

?a:;e i9,
- I~lrh' !_ If ..

i

0

g.. ......... , Q

0 .. Q ... '.-, • • 0

'U • Q

.... .. e -----.., -~-= ~.

-. 1: .. Q --------- • - ... 0. .... c _ 1 ..... .... -"':: .. ... ;1

-. 'U ... ". - ..... -- ~~ \- • cc :.::-~-i; l- .e " ,.-....

Co') ... • \.....

.; ::.. v "'-:1: .. ... , ......... ."" .. .. .... c "- - - CO) It ....

I- r.

,.

cn

c-..

Co, --

Page 80. 12/27/94 Al'·u.c~

Pa86 00
--c:''''-~--

-:~s: :;2.55

::..:h7CS'GC?.E ::1!?:.:A,."CE i ",t.":'

~~ 3224

? 0, Bcx ee:,

L;:-..le ROClt. A;=. 72231·88::;2

\ \

... -

II, ..1.. 1.1.. 1.1 .. 11 •••• 111 •• 1,1.,1.11., ... 1.11" .il

?a;e e:,
='iumber 99430

-:-:... a:-..lc:hed offic:l&l ~nvention

L ~"'ton Tum lapel ptn has been 5e'I\t !

~------': ,;'oul1\~nonof-your-madIast· ---~

:==-..::-,;::,:,ent toouraU5e.

:: :s a coU~bl~ limned edicon and

:s C:U~· aval1lbl~ to those dedicated

_",C:I",duals who contnbuted to my

;:-~olwennonam~lgn.

! w-.ll nrvrr forgrt yow genetllity and

spt!CL! fnmdslup.

~~~!~

Page 82, 12/27/94

..

A":'tae."':me:1~ 1

Page 3 r:'! :..;
.. "- ...... -'"

-:::-_,-,=:-e - \-=:7.;-.~ - ....-.:.e

- , i;

~XJ:...-~:-...

'to .:>, B"ll 1 ". -"Co· ..... - , '--, ,-- ... _-. -- .~ ...

~:. Sa:ple ~" SA=~le

::"~3 My S~:e.t

~~y~o~, ~S :::~O·::::

- _. .- - .,. . . .. . ;~:: -......:~:::~~ =~r. a~c l.....a_~ ~"'-4\ l~ :-.3VC: :-.c~:-.::-.~ :~ :-";!". Or':. L-"\C. ~~ ot :...... :.5. we :a:-. ex;:-~: 7:=:-e

.~ .. :-:=~:r.·· S:'V1e ~::aco :::u \"e3.!-a::: .... :~ v..on.e,

- :~.~ 2~.:'-:'"'.: .:=

s:o s:co S:50 J O:he: $ __

-- -
A':~::~;.':. 1

Page r:: 14

- t :=e3eral Ele:t1on CommISSIon requtres the followmg mfonnation:

. .:-~

---t ....:.:rn> _

. _~.,.::r. Em;IO'tW'r _

- ~3~e m.ice "OUf penonal check OUt to the Clmton/Gore Complla.nce Fund. CoTporate contnbutlcm

l-~ :'~: nl::lteC 0... law. Pohtlca.l CDntnbutiON not tax deductible.

Page 84, 12/27/94

..
~U:~I J... Sa.:;~c

.'" J.-. ~::- e-t :

-:'- ... :::::.::~

••__ :"-. L...--

....

-'- ::~.St: :: ::t~t~: rc~ •. -- :~_.

::t:-::::._.e.:.::.:::",. 7tu ~1;C_ ~:~

....... ,.. '::-.:'';i:': :: ~c': ;:ss~::y tCL!:.::t .,;, :0 '::~8 citbt c~ ':=-..a-.....u : ~"t y:"..

~" :fp:tS~:S ,:vo V.~ ~&~e::&:~ :~~~,.

r~:s:. ~: :t:=~~:.S yo~ !c: s:a..~1:\1 ... ~':.~ H 8..:1y &.::C 1::vts::::-:1 yo;,;r

•. "... : ..., : ..: :~:..:o~ ca:.::st L"':.e ....A: .... S" ~: ~t:v. m_ ~ar. : tall y=~ I :!"l.t ~C"t:

:: ::.. : cc~v~:.:~~t: S::"L.... :~&.O..c a..:.e ha:;>c:e s\';'s:ta~:.y ow !&1t~ a.r.C: bt:~I.!s ~::

--t :.1.:.' :~ 5=:.::"2t:,- r=t&: "C ... t:1~ty :~-es§. f)U': =:c~t~"

A,..... ":. s.cc~::.. ~,:', r~vc:.~:: :t':e~~t~o:': ef :he I'C.=OUI f1~-'le~..: s:.:;;c::

__ ;:ev~e.e ay ;r.·conv&::~oc e&:~~~~ Ccn:t~bu:lo~ ~lt. ycu:s ~~~~s.d

__ t~!C:~ y~~~ t~. c:~:~:~l :.sc~rc.s v. =•.e~ te e&a~tr= hAte :~:=~i~

•• ~t L~C .arly July. You &aCI ~t poss~::. !or SI to c~1cate o~t a.ssaze :~ :~L~i_ t~(~~ u~ to t~_ COa&ct ~l Got. L~C I ,clned h&oes in NlY Tot~ ~~,y

Lao.: :!~~::a.lly l&\:.ee.hed 0\::' rc«ra.l .:.et~oc c:.up.a1rn. A.nc! vt'tat a :a:,;.-::.... ~~

.. a._~~

~.t.'s 00 ccu:~ i~ ZT .1nt!, VI vou~c not have ach1eved thl SUCCISSI' "'I

~&Ve. v~:~e~~ :~. ~o..~t.c:t ~C early s~pport of Prt·Convtnt1on ~.&a ••:=t~S

... 1.t ye:.;.

'. VO\;:d. nc~

::e :~~ s !a: &head

~e CO&~:1I cur

~avi rat~ted our prl-conver.t1on caapalfD el~t. ~e vou:'c not

10 tbe pub11~ op1nlon pells. ~c aoss Plrot'S bauats youlc

vay 1n erov., the yay thlY havi 10 r.cant cays.

!~, v. ~~'t rlst a&31 CD the ra1a1 va've &&da. You knOY hoy volatl:1

t:.:t~o~s at. these dar- &nd you knOY exactly Yhat LiDd of bLae. (Uttar

a:tl:s "'I can ~t frca our oppcs1t101:1 - - upedLl.l,. nov, vhlll they'u

t -.::.::1t\I • cued •

!~U ?la,.o a p1~tal role in our pr.·convantlon caapa1fD. Moy, I'a

&5"'::>1 you to -.t..II Ul «TU b1Ulr ~octr~lNt1011 U VI IIOVI fOl"YUd.

~:s r-u ....lapl,. can't L!ford to Llloy c.orre lusb aDd bis cy:1cal

,elV ct :-ret:.. c.upaic: ~rtJ to (It In our yay. too well 1. at stLU.

:"'" r"~ =~I to tIC con. to tlp.air ttl. e~ t~e PrulC&llcy !:.Ls

~~!:~ct~ oc t~~s co~t~.

/0:., L:': ~:>cf:.&tlo~ sUU'Ut V'I c~ ~t t~. ~tlt frOB thu &D.c! the

,oat, ~rre a:.:.l: DC rKOtC to n::l Oil &AC! ec pw for ~lU'. btua_

7':':1 :01( :'~" it :ht Del,. ro.a.t a. e.u tLU.
c

•. Su;:le A. Suple

# ..._S~ ;:. :~92

5e can't defano rol11n( up the :~iie5t bud,.t def1c~ts azc nat1c~1 dtbt . #:er~can histor/ .•. or b:tAtini nis prc:~se on taxel ... or t:aersina h1aself .. ~~:e a~~airs v~lle ~erlc~s les: ~Ob5 ~~d the1r hope for the future here #. -::e.

:~r :ece~t :e:ccratlc Presle~t1a: So.i~ees learned the 1e5sons of

•. :::e Sortor." &nd the RepublicL~ at~a~ apparatus the hard vay. Wei:, it . '0': ~a;:pen t~ls :i:e a:o.md - - root 1f you':: help •• nov.

~~a~'s why I'm aS~ln( you ar.d all your ftlloy Pre-Convention Teas .~bers

.: assist the ca:pairn in developl~~ a hlih-t.eh rapid response &DC co~ter

-':1:oa1 op.rations capability. ~~d one of the keyl to this erltlcal cupa~an

-:~:a~lv. is fully fundine the ~~ON/CORJ COKPLIANCI FUND. That's vhlrt ve .~~~ you: help the eost.

~our donat10n vill help pay fer s~ill.c elect10n lawyers to defend ,;a1~st the nuisanc. tactlc5. ber~s leial chall'nres, and baseless alllratlons .~·~e come to expect fro. the other sld,. And they'll need the co.puttr pover 'e~essary to put hUie voluees of key InforaatioD at thelr f1nrertlps to fliht

:a:x with the facts, fast, before any O&&&le 1s cOal.

--------Sut-ve:usLact_qu_l_cJ4y. We aust bl t"eady soon because ve knov Bush,

:_ay:e. and the rest of thu-Yl11bi'-co-.lnr--out of-their conven-t1oft-onth. _

a: ad..

Just r••••bar. Ceorre lush has stated he'll -do wbatever It takes to .i~_· ~~d. I think, thls 11 onl tl.e vhaa ve can take hi. at hls vord.

Please act today and rlve as I.nerously as you can. Ve have no tlae to

:cse ~! ve're truly serlous about v1nn1nl on the third of Noveaber.

Ull Cl1nton

?S. !n additioc to 1tl ~pa&ka value. your Pr.·Conyant1oc t ... lapel pin

and ind1v1dual pin nuaber w111 serve as a spec1al eredeAtial and security pass

to a . - ...bers only •• ID&~ral v1ctory cele~rat1oD nut JanUAry in ...,hinatoo.

before !! celebrltl! !! ~I ~d 10, Mr. Saaple, help ua shut down ~h. Republican O'ttac£ apparatus· by support1nr our rap1d response capability.

?le&3I, f111 out thl eAcloleG Act10n ".-0 and &&11 1t back vlth your renerous

contribution t~ the ClJll'TO'tlCOU COIUUAMCI nlMD. Tha.Us1

Page 86, 12/27/94

..
-< -:~"

- - • " If =- ..// .f - ;.II: !'!'r" -_~.'-.~""::i'e'

.'

L1,...Thl"()~ }'RE-L'"()N\1NFIllN-rEM!

ENCLOSED: Officia11992

::'\omination Acceptance Photograph

C,-=========================- .:- !~::::"

:...~: -=~. _.: =-w:.:c

'. ;:~"\~.:3:1j

po__ ' A.c:.~~'

I ~INV""'\t;.f"\·

AiiEt,r!::oN "'01' BEND. pLE,.ASt:. DO l'l

\

. l' ,. , "::... .. " .. ~. ,

..

Page 67, l2,/27/9C
:~-

i~

A~::.ac.-..-.e:-.:. "'

Page 9 :-:: .~

Page 88, 12/27/94
:.

- :-.:'::"".. C=~e ::~:-:-:,r~:6:.:e :=:'''::'''.: - .,. - .. _ ... es: .:r.: ~~~e:

- - - --...... .. _ xx ~~~.:

_~: ~~-~ocx.. -.':""R 7::_;:

........._. .. _.... ~r. S&&ple A. Sa:?~e

:23 A.... y Stre.t

A....yteYn, us cecoo-ooco

,-,

;,-'ee Ge::~ge 3'.J.Sh ;l!"•.:i I:'3:". Q-wavic :-.•vc :-.C:"~I:1g to 1"..1'\ en and. be--...2U5e ef th..s. we ca.~ ex;:'C:: :":'.::~C

;:.. ... ;e ~=;:=:""... s~·te a::acu :nu \·ear-a..."l": :":"i~C~ \Wot"'S<.

c:--

... SSO SlOO 5250 J Ct~.r 5 __

-_....- ....-
.........

lIi

~. - - -

At.ta...:•.E::-.t 1

Page :1 ,.: 1':

7:-.e Federal Election Commission requires the following infonnation:

..... K:""" ..,,, ....----------------------------------- .:lclresl. _

:~:_~at>On.--------------Employn:--------- _

Ltout make your personal checlt out to the OintonJGore Cornphance Fund. Corporate COnmbutlON

art ;:rof\1imed by law. Polmc:al cOntributION are nOt tax deductible.

......-__..... 0 c_c:.-.....

page 90, 12/27/94

...
5c:~~.

: ~=~. y:~':: ~~~e • v.~r ;r::~~e~t placi in your ho•• to

:.~ ::~ve~~~e~ :cas C~~~:~&: SC&:~&:~~r. ~~:I;t~e. PhOtcr:aph.

.-e:! &:: yc~: ~&:~:Y. ~~:~~es. L~: ne:i~~ts c&n s.. ~t.

c!~s~lI.Y yc-,,;:

Soce;:&:e

c'

!vc~y:~t y~~ L~OV s~e~:c rc::~l%., ~ust LS : do, the cri~~c&~ :01.

'of ;:ayt< ~~ c~: ~~~a:~..

~. :~~e:&::y vc~::~·~ ~~ w~c:. VI a:. :ee~y v~thout the sup~:: L~C

::;L;::&: ~&cx:~1 :~&: yc~ ~C yo~~ t.:loy P:.·Conv~t1oQ 1.&& =e:OI:' have

.:"e~~3.

:=~~r~~~t~c~~ l~~. you:, to Iy pr.·eonveat10a e&&paica iaf~s~ our .ffort

.::~ :~. =:~t~=~l re,o~:ee, va n• .ced to e&&P&1rn h.. thro~b Jun. and early

...:. You ~oa 1t poss~bla for •• to eoaaun1eate our ....&(. of chanra ::iht ._-.~;.._:.c._~.=o:.r..:._~lj~(H.e.L"ldl_Jo~n.oh&."lOS 1n "-V York (;1 ty L'td off1=~.::y

:a""~c:\lt= :;;r ia:>ea: eiecHoa e&:?:rn.-·AncfYh&t'-J:iUZl~-Ir"air-

~crc's no doubt ~n ay .~nd, ve vould not have achi••.o the suc:.sscs vc

-a~c y::~:_: :~c :o&a~t.er.t L~d early su~port of Pre·Conyent10n T.aa e••De:s ::..e yo~.

'c vo~:d not have ret1red our pre·~onYent1OD caapa1ca debt. We Yould ~ot

~c :~:, far anead iD the pub11e oplnion ~olls. And loss Perot's ba~k.:s vou:o

~c: COC:DC o~r Yay 1n dro... tae vay tb.y have 1a recant days.

!u: cur york is far frca o.er. Th.re arc 1... tbaD 100 da,. to ro, and

:~ourb vc':. Mk.1D( (Teat pro(Tus a.nd our lIOM!lt\18 is llIlllcliD(, H's no U ••

:0 lc: up. Tov Coy boy yolatHe cl.~t10~ are tb... c1aY1l Uld you t.nOy

cEac:ly vh&t tlDd of b&s., fUtt.r ta:tl:S ve e&D ex~t trca our oppos1tion .-

CS~ct:a::y ~, Yb&a tb.,'re runAiD( seared.

!t~ ;ll~ a p1.otLl role 1a our pr.·~OnYeDt1OD C&&pa1,u. Noy, I'.

a'~~~, yo~ :0 a&£e aD eYeD blt1't eontr1DutiOD &I "e .ey. forva:d .

•• s:.;::- CLe': afford to alloy ~rrt tlab aDd b1l :yu1c.Ll :r" of

nCfl:: va C&&llo&:,u u:pcrts to rtt in our .... y. Too ~cll 1s at Ita.ka. Too ~cll

n~s :0 be OOCI to r.pa~r tb. ~e tb. 8usb pr&lioCDe, bAa 1c!11~:ed OD

::.:, ccu::::-y.

;...,c .:: lo':1eaUons ".:au:

'0". :Ae:rt ..... b l:.u DC rKon! ~c 0" rO&': II tbe 0::.1,. rC>6ll b4

;:..

--

Page

". c.u Cl'poiot

to n.ul OD Uld

ta.ka.

ib« vo:-; t tree t.bo: t~e

DO pl&a for Aa&:1~'s future.
A ';:.a ::.-::-e:,':.

Page ::; :-:: .~

-r· S&aple A. Saaple

A-r"~ t 28, 1991

Pa.re tvO

Be can't defacd rollin( up the birr.st bud"t deficit. and cation&! d.bt

'. A:er1can h1.t~.•.or braakinr h1s pro.lse 00 t&Xes ..• ~r imaers1nr hiaself

.cr1d a!fa1rs vhile 4aerieans lost jobs and their bope for the future here ~. ~c=e,

Our recL~t Deaocratie Presidential Moeicees ltArDed the lessons of

·':ll:e Bortoo· and the ~epub11C&D attack ap~ratus the hard vay. ~ell. it ~:~': tappen this ti.. around cot if you'll help .. OOY.

-:"l'lat's vhy I'. uk1nr you and all your felloY he·CoDvutloD Tus ...bers

:0 assist our caapa1,n io de.aloplnr a hlrb·teeh, rapid rasponse and count.r·

:ac:1cal operations capabllity. ~d oDe of tbe keys to thi. critlcal caap&i~

:~1:1at1v. is fully fundin( tb. CLINTOH/COlJ COMP~ PUND. That's vb.re v. ~eee your help the eost.

Your dOD&tlon v111 h.lp pay for skilled el.et10D lavyers to defend aia1~st the nuisance tactics, borua leral ch&ll~, aDd basel.ss aller-tions •• 've co.e to ~ct fro. tha other side. Acd tbey'll Deed the co.puter pover ~ecessary to put hue- vol~ of key 1cforaat100 at the1r fincartips, so that

.e can fllht back vith the facti, f&St, before any daaare 11 dooe.

- --------- But -v.-ault-act.-qu1.ckl.Y,__ be«~_e__ ...e bOY Iuab, Quayl., and the rut of t~ea v1l1 be co.1nc out of th.ir con.ct1OD:on-th.-.ttac.t.-~ --- -

Just r••••ber, Geer.. luah bas .tated he'll 8do Ybat••ar 1t takes to

vin,· And I think th1. 11 one ti.. vban v. CaD taa. h1e at h11 verd.

Pl.ue act today, and .iv. u ,c.rousl)' as you cu. Ve have no t1.. to

lese if v.'re truly s.rious about vinnlnr on th. third of Noveaber.

P. S. If r~act h1storT b.u tau,fbt \l.I a.nythinr, 1t 'I that .. lI\l.It be prepare<!

for our oppolit10D'. ~crupulo\l.l taeti~.

Acd 80, tIr. ~le, help us shut cow the "publ1cu ·attack apparatus·

by supportUlc our r&l'id rullOCS. capablli ty. Pl..... fill out the enuose<!

A:t1on ".-0 aDd ..11 1t back Y1tb your ~.roua contribution to the C~"TOHICOU COKPLUNa lUMtl. T'h&.n.U I

•

page 92, 12/27/94
;..-::-J.::::-n:::-.-.

?~e :.; == ....

"-

t:----.'-

:--

.....

....

t::::--

l::::: -0:::-

0:::

l

f ::t .:::. - -f----~ ---.-..,;- -

"-

'=::-

.::::

I

- (J\.

..

...

...

.

:::t ~'--

4 -- ::

'..z:: :2"\

~,

'--

-

-:::t

"

,

:I

.§-

"

t.;~ l:"oo

~'. '-- ""

~~s ~-~~~ • ::t '-S

S::l - :::t "6

;:;."

~~~

.3
ATTACH HE liT 'J o

.,

0>

10

p.,

....

'"

....

'""'-

r-

....

"-

N

...

t1D

"'l Ql

Eo< llD

Eo< al 4lp.,

II/I~/'/

II/H/ll

II/I~/Il

II/H/'2

11/10/1/

OJ/H/Il

04/16/11

06////11

06////91

10/H/I/

.-

IIH

IU'

lUI

IIH

01/04/12

OI/OI/IJ

OI/ot/IJ

OI/II/IJ

~Ul."!uoo

H'.U!lllt

ILto IIIJ

lIO .• 1 lUI

11 • . 11, .HI 10/JI/I2 9tH

HI.'lill" 10/11/12 10H.

I ,Oll.61, lOtH 0//1)/11 11111

.. ~.~O! 10lH 02/1)/'1 I JJ I~

H~.II.H" 10/JI/I2 IJiH

!

640." ." 6 L Ol/JI/I/ II)I

H,la.OI:

.............

"""'1 (. ) I 1 f ...~,

Southw.tt.rn ~.ll

.

\

C~.~toA/OOr. 'IJ a.norAI COllllltt••

S~~!~~l. ot Unr •• olved Duplicate •• y••nt. -,.........,... _. I

... :;~~.--~~ ..~;~~~~~~~~;~~~ •................. .. ••.•...............--~ - , .,,'t . :t .._. . ~,,; I' r ,,<- " . I

'_'1"_ ........ 1'_0"1.' ~-....~.·__ ·:1..... ! Check etaeck Cbeck Check .... "' .~"'. :

....) .,t~,.••-. :=,. _J!,_~~ic~ .~' IAYoice Dup14catel .u.b.r Oat. Mu.b.r Oale

, .. --: '_lOr" .• _,J,..:._~~~~.".<.- V.... A.ounl ,lal pay. l.t. pAy. Jnd p.y. :lnd pay.

~.~:~.~~~;~~.. ;;::~~,~~~~~~~~~.~::~~:~ •••...•........••.•••.•••••.••••..•.•.•....•..•...... - ..:..:_= - .-.. ' .,.. I • ..:......-=-...::"i'~"':

•._._IQ~b.. ~~~~•.'L •• u.;.;.:" "'~H" ~~;::. ,.;OII'IO/Il

..1el..... · _,;,:""~H'l'; ;..;;., ~l/n/Il

",:,. I D "fn.:?~~'t'oi'lF:'l"qtq Ol/n/IJ

-- ... _- _·~.-.,-..........it.;':~.. · ," •.::.nJI1/J1/IJ

~"'-~~'=~:-'"....-r'. ~'1

..- ... 1' <~

;;.;...

- ....." '-

"-.. '..

~~~~~~.-..

,- \. ~.

'."" ... .. ..;.,,,- .. ," ,..-",-

-

,"

.' .......

',. ...;' . , . ...-.-..... -" , ....:.~~.

~-- - ""~--."''''' .~:.,. , .. 1', '4;- ~'.~~ :~..

, . ,

.;"1 . v 6 u I l; C:.J <)
"'-~- - r __'""\....:~ __ :r~

:::..:...""="". (::::'e , s: Qn!~ -:-...ee

s... po ; .".. ==: t~:n...;) e" =, D::e lSeS :

NT. ::x:;:=s;r. ~.

L'"T.:u::'. $.

lc:::a 02.1.9 '93

lDCl 02Il4;93

~:; 10;2l!9:

:..::J5 03,'3:.'93

1203':" 03,'10.'93

45.:":' 09/24.'9:

r:.5lX.',OO P\:~ t:r

/ !tt re""...:m::

(2.r:.c.00 ~~ t:r lest m:p!tp~

10.122.00 ::r. 81:j~

!tt~

, 1.2l3C.00 f:r lest "1"'pntt

J.e.OJ t:r "1:j~

. !tt re':lCB:l

:;.:<95.OC ~~ ==- "1 "';n-t:

!tt re""..m-e:J

?ace 9::,
tn

- -",

Atuc:nnent <I

Peqe 1 ('If :!

COMPtrrER SYSTEMS UTn..IZAnON

C'1...n'oo'TON FOR PRESIDENTCO~CLINTON/GORE 92

August. 1991.Qc;obcr 1991

[.quipme.D1: 386 PC nmnins 8 devices

"'~ndor: Malone & Company

Functions Performed: Ran office package inc1udina won:I prccessins and rW'llins; ran

political d&.lll t:.se. Maintained contl:ibuter information. Suppan.ed caff 0118.

r-;ovembq 1991-May 1m

E.quipmeD1: Una CO 6{32 nmnina up to 128 devices, 80 simultaneous UIe1'S.

Vendor: Malone at Company

FunctioDS Puformed: Ccmi1mecl to nm office pac:b&e inc:ludin& ward pre ins and

scheduling as well as nmnin& politic;al dala hue. Sl1ppOftina40 work starims on the network. __ Suppe:I!'t~~:t~troH9~me end of NO'YCItlbcr which had p;lWD to 173 by the CDd of May. By

the end of May, forty cere sWf and apprrmm'tely-rOOaUiilWYiiUf peo91e W~ wori:ing On ...

delegate relaticns. The 0».'4"'''' syszem provided tamiJWsfar 20~ Olcbe care caff. M,mnp

and callsto each deleprc after each swe primary weft\ ne: ry and CCllDf"'deriZed tnekins was

rnain1ained.

Gener.l CJlIOp" "'ence bad pown to 1600 lettas perweek by the end of May

and doubled &pin in June. Govemot Cinton feh it was cri1ic:al1hat fINef'1 Jeue.r be answered.,

and in • timely manner. This canIinual srowinI kad ofccmspondence patIy!aXed the

proe:cssiA& power of the CO 6(32 and its

The ove:rall c:apKity of the CO 6(32 system was physically limited CD 128 devices (tem:Un.als.

printets. modems.. etC-). OfUlalllumber."" '0 umu coWd be openled s:imultIneously

v.rithout experienciq compulC1' problems such as temUnallockcuts, sysum c:nshas, ptlJCtSSing

delays of up to 30 minutes Cl'more. etc. Bac!cnps required manual inIeM:m:ian and took up to a

full week to canplete. They were before they WeftI cc:mpleled. A su:ramary of the

devices supported by the CCI 6(32 at various times durin& this time frame is IS follows:

Month Iem4v MMcms Printm Tgq! Devices

December. 1991 36 3 • 10 49

January. 1992 52 3 12 67

February and March, 1992 64 5 14 83

April. 1991 88 7 18 113

May. 1992 91 9 18 11&

Service was required an a rec:r...ng basis due to sysu:m failU1"lS- (Copies ofsample service

reqwrements are anac:h.ed.)

Page 96, 12/27/94

ATTACID!EllT --=3=-~~,,=, Page 1b of /~?
- .......... - - .... - V--~"r" f"'*~= \t.... : - -,-~ ..~_ -, ..... , w-~-- .- ---__-. .. -~ "" ..... ~._ . • :"l_"'''-~-r---''''''l.''''-.t-· _ .. .t..: __ ' _. __ .. ;- ...........t.. ....!" ..-._-_..... &.:.- ...c:::.....:.- ..\.~

r.~.~ S~e:.:- E:~:1S:ve l.~o.:..s :.= X--:':. :"ie :-.L~':...-e co": s::~~ we:e i:lmg tc be

~-)~:' :..: a..::::oo.:C.a.:..e the ~:- nee:::::s.. C!"..:::>tes -"e:-= ~. r:~...:.ni t..~ n.t:=es;..;;' uppade:s :c

.... e~ib ~:": \Il·h::o:. i: \VIS ~~~~e:: t:-..a~ I r.~"'· w~c: L--ut ;i~':::::S: lc:s.s.

':...:~p:i=s we:": p:"Oj~ to ::::J$: t:'. ex~ of S.:..oc.CXX' L-"= the r:s-..41t wot:l: :-.ave bee:1- less

~:....::ie &.a::. e:-..::.:"'ej~' new sys:.:::...! 5ev~~ ~::s.;la...~ we:-e i..,voiv=C 1:'. the Ce=~on

==c.."\:: a.:.: .~ :.';.c :.he ne'" S'ys:::~ \I;as :."e orJy SC'sible ~-U::~·e.

Lquipmc:.nt: DRS 6000.386 pc's L'lC ne......·ori:s. DRS 6000 was orip;na.lly con."ir-;:red to

a::::oi:::lOCau: ~SO simulu..."\eous =:s.. Addioor.a..l =p~r were addec during the

Ge:1e:o.: Eieccon to ulo.ma1ely au the c::a~::ity to 300 use.-s.

Ve.Ddors· Ia.... L"l::.-ha.rd~ and softwan:. Malone &. Compa.ny-~"'e L"\d consulting.

F:J:1.:."': ~ow 1J'.c Complete Computing-pe:sona.l =pute:5 and software.

FW1~..iOn.s Performed: Cor.:inue::! to l"Un office pe::bge including word p.cussing and

~l'le::::u:i."\g as wei: as running politic:a1 datll base for of Pnmary and cr.::ing General

E,e:::c:-~

5ysten: expLnSion in May. 199: aecomc:xiated addition.&1 user needs of

c-a:c"\g delegates fOf the DertXX:1'Uie Convention. allowing the delegate opemoon to interlace

=.-:g a sez::e..~te Novell networX-pcxtable for use in New York during the Convention.

This equipment (tempon.ry syst.em) was insWled in the Ga.:ette Building. (The

Cc:-:...-:J.i:tee had outgrown its old sr-.ee and made the move the the new space effective June 1.

t )19::.) L'lStalli."lg the new eqWpro:m in the old building and moving it to the Guette Building in

j-.:.s: a few days would net have been c::as:t effective or sensible considering the tempo of

=pe.ign operuions. A tempora."'Y system was rec=sery due to the Camminee's urgent

com?~r needs as indie::a.ted by the chan abc::Jo.ie. The pe.nnanent system was insulled less than

one month Iatef,

The new sysu:m required a new networking system and extenSive rewiring. (l-K

Eie=-=ic provided the wirina.)

The c::ampairn politic:al office pacbge and c::oa-espondeno recol'ds were

C'. i:'lmediately transfem:d to the new tempcn.ry syswn. They were then transferred to the

?=:-rnanen: system upon its final insuIlation. Every effort was made to successfully make the

C"anSfer with the miniII:run:l of disnlprion to ci&ily staff activities.

Priroa.ry n=x:h were maintained and func:ions performed through the

Gnvention L"~ whici: the General Election begL.... P:im.try political ~as and other

lJ"J';)~:Jon w= useC ir, the GcN::raJ E1eetlor~ D.is ~Ulpmcn: was sold to the CintonIGore '9:

Gr:::n.l:lee e:fe:::ve &roe the Convention.

CE.-,L:r., for P1t:slO:.l'l! ree<JI:is pnvlO\.:S)v m&in~ bv Public Office Coroontior.

as we:: as de:C;e:::: :n.nsacrior. files from Worid V.'ide travel were tra.nsfeC"ed to the ICL .

ec::;:J:tlen: as or.r. 0: the win.ddcrwn epe:ulor~ Amendro.ents re>:nllred by FEe auditorS related Ie

L""': ~ce rei.~~J.S &SWell as cor.tlnuing d&tlI to to audit ques:lons

a:.:: er~...::-:~· FEe fij"1hS luve bee:r~ r:w.n~.a,:"leC..

A=l....-ci.."\g re=.:i>:.o incluci.e ve~~ ;"-jomarior. and ash Qs~have

:>=:-. ~-.:.z.:.."\eC b;o'L'le Cu.:1ml::= or. lrl-ho'use 386 =p\.'t.e~

,.,~

Page c;-

-, .
Dua no ry for preparuion of amendments neceswy to debt schedules

or:ginaUy by POe coverina inception through Mart:h. 1993 has been recons:ttueted by

:.he COr'QlU1ttee. Amended n:pa t'S were prepared and filed.

Many of the PCI and printers were sold to Tnnsition. staff and others at the end

of the Genenll Election.

December 199!-Pn;:gnt

[.quipme.u.t: N/A due to KMce bureau nature ofseMces

Vendor. Public: Office Carp::nrion (POe) ,

f Wlc:tiODS Performed: Public Office ~tian provided datalocessinl smticcs for Clinton

for Prcside:nt in the area of pmduc:ina rc:quind ccntribution reccx and related matc:bing funds

submissions. They also nWntainecl information on cash disbmse:uxnts aDd prepared the FEe

month.ly compliance repans for the periods Oec:cmber. 1991 throqh Man:h. 1993. Durinrlatr:

1992 and early 1993, the Cortuuiaee bepn the diffie:uh rask ofmovm, the POe maimained data

to Committee eaupuu:s in Arbnsu. POe has continued tc pn:l¥ida minimal Rt'Y'ices u

requested since tha1 time. AI. POC still maintains certain dupIicase NCOicis and answezs .. - qucstions_n=latiYe_to~.~ aud,it..Jt.i! anti~ip"t"!tha:t upon ofthe currcD1

phase ofthe FEe audit allleccxds rema.ininc in c:u:SiiiijI ~Willl:ii moveatcMiinSiS indthe relationship tem:Iinaud ether than on an buis u JW' ded duri:n& the duration ofthe

audit period.

Committee.

lulv 16 1992-Ptt;sen1

ClintoD/Gore 'n Committee. All ac:=rantinI related computer seMccs were performed inhouse on nerworked PCs. All FEe ccmpliance repous WC'l: prepued in1emally by the

Committee from infClnD'rinn JenCftted on the ac::oumin& depenmcm computerSVendors: F~Now, Inc.. Complete Computin,. G!at Plains. Kez:ry for President Cornminee

Compliance Committee: AlllC:OUnling related c:cmputet services were performed in-house on

separate netWorked PCs. Compliance Commiaee COl'llpUtetS were seperately nerworked and

ma.inta.ined separue flom the ClintonIQorc '92 Cc:numiaee acx:ounrin& computers. All FEC

c:ornpliance reportS were prepared internally by the Cornminee from information generated on

the Compliance a.c:countin& 0epanmen1 c:ort1puterS and manual teCOlds..

'Vendors: Caroplete Computina. Aristotle Software

(as: updated luly 3. 1994)

Page 98, 12/27/94
,.

"

:

"

"

-

"

: t: .. '- . "" .. .. " " .. r - ,.. "

" .. .. r - .. .. - - - ., " - ,. • .. =- " · - • . " ,.. "" .. " .. " . .. .. ,. • < < .. :: z :: " , • " · ,. , '- .. " .. · '" < , - • - · , ,. - · . =- " ., · , .. 0- " e .. " .. '" " '" • " .. c .. '" .. ., "' .. .. ,. .. , c " " ... It

=-

" ..

·

•

·

g .. - • • < " :: .,. r- .. e • " •

-

r '" ,. 'C 'C .. ,. • 'C 'C .. - ,.. • • .. r

'"

,

k

C "-· '"

" '" .,

..

· ..,. "- "- It • '" ..,. .. " '"

~.

'"

c r: .. ..,. '" . '" " C

'" ..

" ..,. '"

--

-

.

0 .. .. ..

I

'"

0

" '"

-."" ...

C ... ...

"

•

•

" .. '"

·

0

'" ..,. ...

0 ..,. ..

0 .. .. ..

,,

-"

, --------- --r- IO 7-- -----r-~ , r: " , - • C '" C c;:': - • - • '" '" C , .,. " ... • '" Z " " .. .. C'- .. It v 0 .. .. ., .. c . '" .. .. >- " co co " 0 0 0 0 " '" ..,. .. c 0 .. .. >-

rc

... ::

" V""

"

0

" co V" '- ..,. .. V"

0C

. .. :: c c :: co c co co " co co :: " co 0 co .. .. .. .. .. -.. ..

" ... >- " .. ,. C

'" ..

C

C ..

- '" ..

C c: :: .. ..,. '" ... '" '" Z ,. ., Z

.. '" - .. " '" ... ... V"

'" .. ..- .. .. .. .~ " co c ... - ..,. - co c - - .. >-

C :: .. ... co ..,. ..,. co co c .. -· .. .. r- .. P- c:

.. .. :::-

C· ..

'" ,., >- • C ..

- :z

" "'

" .. ..

C co c: r- :z

-

"

c :z .. c ,. .. " e .. .. C

'" ..

?aqe 00--

. 12/2"7/9<

3 __ , /C,O c. _"-=

C:':N70N/GORE '92 CO~~::-7EE

£7A7E~E~: 0: N~7 OV~STA~D:~G O~A::~:E2

:A~?A:G~ EXPENSES A~ DECE~BER ~, :9~: a

'nS de~e=~:ned by ~he Audit Sta:: as c: E-3~-~~\

ASSE':S

53,028,657

Cash or. H.a~:'

Accoun~s Receivable:

Duplicate Payments

Clin~on :or President

Compliance Fune

Refunds Due at

(5/30/94) e/

Repo=ted Refunds Received

112/5/92 to 6/30/94)

S 20,9-:3

S 43,-:26

S267,840

S18::',812

c/

a/~

Sl,3:S,BE:'

53,50,008

Non-qualified Campaign

Expenses Pre 12/5/92 s 15,934

TOTA:' ASSETS

LIABILI:-:ES

Accounts Payable:

Clinton for President ~/

OSCC ~IN '92

Payments for Qualified

Campaign Expenses

(12/5/92 to 6/30/93)

Reported A/P @ 6/30/94

5505,027

5 1,239

52,091,776

S165,536

S4,943,768

S2,763,578

payments for Wind down Expenses ~/

{l:/S./92 to 6/30/941

P=ohibited Cont=ibutions (Finding II!.A.11 S 112,100

Payable to ~.S. :-reasury for Income Earned

'F:n:::ng ::1.D.'

~:s=e::a~eous Reconc:ling AdJustm€n~

5

s

6,646

2,50C

~e: O~~s:a~:':~s Q~a::::ed Cam?aign

Ex?e~ses ~e:~=:~

S4,9':3,768

-1::-

?ace 12/27/94 ~T'l''''C~~ 3 P~e / QL c~ /c:?

---
a/

Attachment 6

Page 2 of 2

CLINTON/GORE '92 COMMITTEE

FOOTNOTES TO NOQCE STATEMENT

All figures are rounded to the nearest dollar.

This represents amounts paid twice by the General Committee

to various vendors which have been refunded to the General

Committee ($13,285}i and those items still to be resolved

($7,688). An uncollectible amount ($641) has been excluded

from the NOQCE presentation (see Finding III.C.7.).

This figure represents primary related expenses paid by the

General Committee (see Finding III.C.l.).

This amount represents a recivable to reimburse the General

Committee for expenditures that could have been paid by the

Compliance Fund as determined by the Audit staff (see Finding

IILC.12.).

!/ This amount does not include about $190,000 of media refunds

still under review by the General Committee's media vendor. -----------~n_-_add-~ion,-Ule-Auditstaff-- has-made--an-allowance-f-Or ---- -------

uncollectible reimbursements from the Secret Service totaling

$108,982. Finally, this amount excludes a receivable due

from the Primary Committee ($43,726) shown separately.

y

c.

'-

~-'-

1.(')

<>

3/

£1./

Based upon the Commission's determinations, the Audit staff

calculated the value of computers and related equipment

transferred to the G~neral Committee to be $327,559. Under

11 C.F.R. S9003.3(a}(2}(ii}, 70\ of computer related

equipment and services may be defrayed by the Compliance

Fund. In addition, 11 C.F.R. S9004.9(d}(l} allows for

capital assets to be depreciated and presented on the NOQCE

at 60\ of its fair market value or cost. Based upon the

above, the Audit staff calculated capital assets to be

$58,961 ($327,559 x 30\ x 60\).

Based on the Audit staff's review (see Finding III.C.2.,3.,

4.,5.*6.), this amount represents expenses relative to the

general election paid by the Primary Committee and other

amounts due the Primary Committee.

This amount has been considered by the Audit staff in its

calculation of the accounts receivable figure above for

remaining expenses that could have been paid by the

Compliance Fund (see Finding III.C.12.).

Page 102, 12/27/94
- i --

~~ - I _

•

,.

= •

= -

,.

-

t _

t

__-=t.;

;

1

• !.

c

·

•

o

z:

l i

! "

! I ...

o e

WJ: e

:::: <V\ • ClIo..,..

:: ;: I: i I... :::~~~~:!

=g~;~:i:~~o~~ g g g

·.. L-

~-;:~

i-§§i~~

888888

;:

- - - - - - - - ; - -

.-o

e-

• ; ;: • i t :; c ); ..

,-,.. 1;".' v 0:.. '"

iLL 1 L 1 1 i 1 ill 1 1

.. • ,.. to f- ;

c

r

.'

:;

,.

=-

0-

!.

?age ~2/27/9~
a~. "1 ......'01 ~U_ ~Il

~. oC SUl...(ated o.:b Attar to 1M Paye 2 of 5

cr.ted ....: _ '-/-94 Wt -...s: "/--94 rf) \<

l¥IJ): _£IlrIJaHNT C)

Olood< lhocIJ lhocIJ ~IUcn

---- Dote

P,.- HUUlt Dote ....r - - ~r OIU""'" lhocIJ I 0l0d0 0l0d0 llt.lll !Vol IIV c-.

'ft> Ulo 1M Dote QMAd ISt.U. , Oot.o<pry v ___._ II>

2t ....,..., ... ,. <MJl Il-&oj>-9l U1!l $lllO.oo au_ $lllO.oo ft) o::vt: 00 ~r ItJIlt I"

lO ....tu'). &.u 1UlrJl:a'l (I..,. ~I 51U $1.m.04 on \QIIIJ) $2,:190.04 fit) ct* aw: no....-dlc II~

)1 ..km tu'liroe (I..,. 1&<tl--9l 1161 $~.oo am:_ $~.oo ft) a-. cq;aJ; no YWdlC .ut.

II Jed< It"r"l' (lUt 1&·<tl--91 6914 $2to.oo am: wum $2to.oo It;) d. cxw; no \lWd:)r aUll:.

)) Pr... $Iorv1.(:ao!j U d a,,. lHlct--9l IS)) $111.00 am: IAllIDl $111.01 rtJ d. ot:JW'; m wrd>r .bIt ... 54 Jrj.. tu\loe ....... JI·<k."t-92 1S1I $~. 00 OCIZ IAllIDl $l!lO .00 ttJ d1k WW; 00 ~r alllt l7\

)!J ,...lC*\ tnt. ••nat ,,,.vl "'- ...'" IH«'M'I 9171 $2U.78 on IAllIDl $1".11 A:J dlk OOW'; no \oWdJr aUll:. r-

)6 ~rU... Nit' 1 fWnk 'JUt U~I 9711 $2.01 oaJ: WIIID $2.011 I*) dlk ~; no ~f aUll N

"'- 11 H.hl..,..- ...... » ftN-'JI 9911 $115.00 am: IAllIJD $115.00 It;) CXlP/; 00 loWd;)r alilt N

11 Dwr ,... OI-&0p-91 Itll $50.00 lJlIZ WIIID $50.00 t*I d. a.w; no wnbr .tat ... )9 !.'\..... Bwr IUt Ol~l 14ll $150.00 om: I.OII1J) $150.00 PI;) CXlP/: no ~r aua

40 ""'IJ\ v"rr-.y lUi U 1U1-91 Inl $150.00 am: WlUD $150.00 N;) d. cx.w; ''Q ....dn .UIl ... 41 .Mdt t1u c~ It>! IlrQ1;--9l 4UI $1!l.00 om: IAllIDl $7:1.00 tkl # cqJI/: no Wl'dlr 0

... tl Iint.hcnV Pllt:> ..."". 14 ""1"-91 ~5 $/ill.)l om: WIIID $/ill.)l ttl ct* CCVf; no ....~{ .~

41 L"'-lyn trq.llrl t'tJlll:,.l.('l I"tl<L 14-&0p-91 1t9l $111.5) om: IOIIIJ) $111.5) 1m dtk a.w; 1oWd:>r alllt CIJ

0> .. ~nl •. HoI1'.),' 1'tJ<I. 11601p-9l 1156 $1,920.1'1 om: IlWWl $l,IlO.ll 1m tq%'; B) ....U)( Ita 10

.~ tbma I. Pall.I .......' I"il<L ni»<."""l 4106 $101.91 am: IAllWl $101.92 $16.05l.11 ft) cHJ. cq¥; I¥) U.Oll" lUll. Il.

66 ' ..nk 'Well>{ '...... oa ;"'1-'11 WI $660.00 ""to. _ to $660.00 lht~lwd

.f;1 SIt...,. e... CAt}!: 1 J ".,-91 11111 $4llO.oo ""ter _ to I'OJV- $4llO .00 ......,1_ .. lIrod Ill•• (AUI l~ "",-91 1111 $4.00 Lotter _ to I'OJV- $4.00 lht--.llMlJ

49 ....tY CM*'".,I..H UUI 1'; ,,,,~2 IW-> $))0.00 ""ter _ to I'iIri- $))(1.00 llll..-olwd

50 O:JII(urt VltfW 1.I.I.1"11N 1..,11 6 ..ltejJIl llll $I,lOO.OCl I"'-te. _ to I'OJV- $I.lllO.00 ....-01_

~j ,...ry (ArvMlllrl. IA'Jo 0'1 G41p-4Z llO1 $1lO.00 Letter _ to I'OJV- $TlO.OO llu-.olwd

~l 10d c..n tAUI II r..p-92 1610 $m.oo Lotto. _ to I'iIri- $m.oo ltu.-ul~

SJ a.JiS8U'l VI.u '''Jl.' <>01 14 -r..p-92 11lO $904.00 Lottor _ to I'iIri- $1104.00 UU'M01~

54 ....untVt.l fA")! H~I 1m $929.12 Lottor _ to I'OJV- $I29.Jl l.)u..eo11Md

!6 JanaU... Sdnu (jUt l~ r..p-91 jll5 $10.00 Lotter _ to I'iIri- $10.00 llu-.ol....J

S6 ,.rtha I't..cJ••"'1I lJI'Ul 16..:..p-91 UU $5)(1.00 lAtter .-1l to PWfee $1lO.OO ll'lI-..o1wd

~1 a.vJ.n v••rwy uu, loa ~-92 4114 $lllO.OO Lottor .... to I'iIri- $)00.00 Uu-.ul..,.t

c l. ,I I, 6 .' u ! u S 0
J

i

~~ ~~-~~ ~-~ ~- ~-~ ---~-~ 5 S ; ; 5 E ; i t

E e 8 e 8 8 e e £ 8 8 g : i g 8 8 5 8 8 8 888

i i i iii iii iiiiii iii iii iii i

! ! ! ! ! ! ! ! ! ! f ! ! ! i ! ! ! ! i ! ! ! i ! ! ! !

I ! l l ! ! i ! i Ei i ! i ! ! ! I ! ! ! ! ! ! ! ! ! ! ! !

c e ; t e r t S t SSt e £ e t S t Set £ : t t t f E

1fiififlfffffifliflilffflflfif

,-..

= _ .i .i- _ _

- - . . . , ,. .

• e • j .. I

;; ..

!

i \;

I

: J• 1- i '!l :: • S

f

-- -- ---.----I

c i

i - !.

f

" f . ;; [

..

...

C:'. ~~ ~---~~~ ~~~ ~~--~~~~-~~~-~- 5 & ; ; i g E S 8 & , 8 8 8 8 8 8 £ 8 8 8 8 8 : i 8 g 8 8 &8 8 8 8 8 8

o

!

!.

I

.

"-

.

• .• .• I

!

! U·l.

•

r

"' .!l 10 I

! I

I

I

!

•

--

Pace
";1,

" ",

a~fO '91 Gono,o! ~ttao JlI'lKJtGG' 11

SdloWlo 01 st&Io.Qto.:! o.dl.o -..un, 1Itto, .....,.,... to IHl Page 4 of 5

"""to<! br: He .·1--94 Uoot ~: '-).44

GIW>:~ ff\ .... 0

0l0dc 0l0dc 0l0dc ~ltJan

---- Data

- au.toul

1"'1- /UIU« 1»... -, -... l'o'OOU ......... 0_, aw q.1I IIV a-.u

:z<<o;;:)

", U. IHl IlIlt.o aoorod Illt.o.lol Q~ry

r.:> CI>

.. J<hI!Iuo IU lI-1Lq-92 1Oi6 $1011.00 Lot......... t.o ........ $100.00 ~1.-1

':l ~~ t9 a:c-.ta SCr.....,.l. It>< 1)...,-92 215.1 $150.00 ........, .... to ........ $150.00 Ihr_l-:I

'lO cu." Ild>lo, It>< U·.-II_,-42 2211 $150.00 ""..., .... to ........ $150.00 ltv-.olwd

91 euqt ~.r lUI 1~~2 UI1 $200.00 Lotl.o' .... to ........ $200.00 ~I-:I

92 f.~rll lW\l&.n lUI 1~2 2J6O $l!>.OO ""..., .... to ........ S2S.oo ~I-:I .... 9) Eric 1Nr_ 1fJ< 11""""'2 1l4I $l!>.oo ........, .... to ........ $2S.oo '"-1-:1 0\

...... 'H 91. I*.'.r 1fJ< I'H.q-91 2tTl $11'!l.00 Lotl.o' .... to ........ $11'!l.00 ltv..alwd rHIlLy 8ojl"l' lUI 1....,-92 l!>11 $11'!l.00 1"'1.0' _ to """" $11'!l.00 _1-:1 <'I

...... 96 c.ru. 8((~, ''1>< 12'6op-92 261S $1'!l.00 Lotl.o' _ La """" $1'!l.00 UU_I-:I <'I

9) I.4nJo I<u>j lUI 14 6op-91 214S $Il!>.oo Lot..., _ to """" $12S.oo UU_Iwd ....

'II , .... ~""'''' ,,,. 166op-92 lO26 $12S,00 LotLor Mnl. to """" $12S.oo UU.clwd

W WIn\! GolliNt lJ lUI O~ C.I.<t .~J 1111 $~.oo Lotl.o' .... t.o ........ $25.00 _Iwd

tOO I\'Ult $dt!'fcu lUI IJ (l..t-9J 61'!ll '" $'1:1,00 Lot..., .... to """" $'1:1.00 UV'IIMQlwd 0

.... 101 , ..... ...'" I". H (...t~lJl .1119 $100.00 l.-t.tAr ... tD $100.00 _,-:1

ll)l (luu Mo... ''1>< JII <).1.--92 4916 $12S.oo ""to..... t.o """" $US.OO uu-..olwd CII

0>

10) BAut Un.. I..,. It, (....1.-92 4919 $I2S. 00 ""..., _It to """" $Il!>.oo uu_Iwd 10

104 " ... ~"I.bf 14:1< lf, (~"t JjJl 6910 $12S,00 Lotto, .... to ........ $12S.oo It\l.-olwd p..

1v.. .... ~I.. )U~ !'J o.t-'ll SI91 $100,00 Lot..., ..... ." """" $100,00 _Iwd

106 , .... ""101,,, 14:1< )1 (....t..J}2 S2S2 $1'!l.00 I......' _ to """" $1'!l.00 UU-Iwd

101 ... ~1... 14:1< .11 0'."t~2 5JI9 $'1:1.00 LotLor _ W """" $1'!l.00 ltV'flIIQlwd

SOl Jlll L. ~ll.1 l'(VJ. 14 ""V-91 1111 5'42.91 Lot.... _w ........ $942.9" UU-.lwd

109 J'll L. IJIJ'I!'( I"iI<l. OOl4N-91 ln6 $lOS.n 1AIt..., ..... tD ........ $lOS.'1 _Iwd

110 ..W.-. K. t1 t4"'lhMI .'fHl. I)I,.t<N-'/l )602 $21.I~ 1Aot.., ..... t.o ........ $21.1S uu-.lwd

111 ".Ur-V S. "'-"'''1':. i'(JIJ. ",• ..",..gl lU9 $91.n 1AItLor""" t.o ........ $91.1~ ....-1>••

III ..-ttc"" S ".krl '. l'(..i. lJ,.~l 19)4 $111.61 Lot..., ...... t.o ........ $Jl7.61 SU.''').!>! U1",..".I",...

---- 1UtN.. SSI.S41.91 $S1.S41,91 $S1.S4l.91

I / !; 6 l) / L S (~
~~.-,

.-

,.

.-

i!

••

.

;.

.

=- '" - " <: e - .. :r.-- "

;:,

.

•!

.

0

c Ii'

rI ..

'--

! ~'- I

I

,-

.!.

,~

w~ I'

I

:...., .'

I l: •

c,

l .. f -< .!. L!

, -:; i!!

t

tr

-

,

t -=.-- '"'::

• ::.- r , - "
::; ; ;; -i -- § i Ji - ;]I .. -. ... - '" -...

-- ---- - - §~~~~ii~ ~~ ~~~~~~~~ ~~ ----- --- -- ::: \ - - 10-1 '" 51--' I = 8 8 § l 8 I 8 888 8 888 I I

Page 108, 12/27/94

~I:
.-

r

'.

January 30, 199~

RES?O~SE OF CLP.\lO~iGORE '92 CO!\C\1ITTEE

:\..'\U CLr-."TO~'GORE'9: GE~~RAL ELECTIO~ COMPLLAu"CE f'l;;"'U

TO THE P.\lTIAL REPA'l:i\lE~l DETE~\.flNATION SET FORTH f.'; TIiE FNAL

AUDIT REPORT

This response is filed on behalf of Clinton/Gore '92 Committee (the ~General

Comr:linee") arid Clinton/Gore '92 General Election Compliance Fund ("GELAC'")

(collectively, the "Committees") to the Final Audit Report and initial repa~ment

detelTl'ination contained in such report in accordance with 11 C.F.R- 9007.2(c)(2), The

General Committee is not requesting an oral presentation in connection with the initial

repayment detennination, and believes that the Commission can make a final repa~ment

detennination based on the attached documentation alone.

The General Committee disputes the Commission's initial repayment detennination

of 5254.54600 In pa.rticular, the Committee objects to Finding rnA Apparent

Prohibited Cor.tributions; Finding III B I, and Finding III, E. Stale-Dated Cbeck:s Based

on these objections disc..:ssed below, the General Committee contends that the correct

repa~mem number is S109,061 A check for that amount payable to the C,S Treasury is

attached I

, Tne Co::-.r,":aee has placec S145,485 (S254.561 .. $109,061) in a separate bank account

pendL'1£ Com.mission iss:;a.,ce of a final repa~ment determination. .~ .. , _~ : ',_ Y

:.::'-5 :_-:-~L-/:-1'""';"'/~~
1. Apparent Prohibited Contribution CFinding ill A )

The General Committee vehemently objects to the audit di"ision's position that the

Gen~a1 Committee received SIll,I00 in prohibited contnbutions in connection with four

media contracts that Were amended during the general e1ecti~ As we noted in our

response to the interim audit report, the contracts were amended because it became

apparent that the services required of the vendors were different than originally

anticipated. The overall media plan for the ONC was developed during the general

election period. Essentially. a creative team was established to work on ONC 441(a)(d)

media, campaign media and other ONC generic media. The original coatraCts with the

team vendors were entered into based on the original expectations" for the media plan and "

the anticipated services by those vendors to the DNC 'and the campaign respectively, As

the overall media pIan was refined, the contracts were amended to re6ec:t the actual

services provided based on a shift in focus and increased DNC use of generic advertising.

Itls clear from the terms of the amended contracts that they wa'e amended because the

four vendors would be providing fewer services to the Committ~ than anticipated in the

original contracts,

The auditors note that the contracts with the Committee were not signed until

October 15. 1992 and contracts with the DNC until October 26, 1992 although the DNC

contracts covered a period from September 8, 1992 through November 15, 1992.

However. this has no legal relevance, Although the amended contracts and DNC

contracts were not executed in final until October. the terms of such contracts had been

J.TTACRll!jt _

Pase ---iI:::=~ - - 72f.7

2
\\ e:-e ;...,Il:1o.- .... .......... 0:- the

',...r)

r-o.. ......

reduced their se;""'.l~es for the Cor.uninee and were working for the D~C pr,widing

generic :ned:a The ""Tiner. contracts signed in October 1992 simply memorialized that

arrangement In additiol"~ the audItors have questioned how the amounts to be paid by the

ONe for the generic media were determined ..0\5 the anached affidavit (Exhibit A) from

Greer, Margolis, Mitchell, Bums & ..0\5sociates, the media consultant for the Committee

during 199:, pro.ides, by the time the amended contracts with the Committees and the

contracts \I.;th the ONC were executed, the firm had a well-developed overall media

strategy, and, accordingly, had determined what emphasis would be placed on generic

media versus media for the candidate. On that basis, the amounts to be paid by the DNC

for generic media were determined.

In response to the Interim Audit Report. the Committee provided copies of the

four vendors' contracts v.;th the DNC and a lener from the DNC General CounseL Joe

Sandler, which confirm that the services provided to the ONC were for generic media.

(Copies of these documents are anached to this response.) Despite this conclusive

e.idence, the final audit report states that in the audit division's opinion the amount ofthe

amended contracts (S 111,1OO) constitutes a prohibited contn'bution. Such a position is

locicalh - untena~le and lell.allv baseless AII.ain. the Comminee reiterates that it is absurd . .... . ....

for the auditors to allege an impermissible contn'bution on the basis of an amended

contrac: that calls for reduced services to the Comminee Moreover, the auditors did not

a..:::ura:e:\ re:::rese:1: to the Cornrrusslon the documentation pro.ided by the General
Committee. The auditors specifically stated to the Commission in open session that they

had no evidence that these vendors were paid by the ONC or by anyone for the amended

contracts In fact, the Committee obtained from the ONe and attached IS ExhIbit 8 to its

Response to the Interim Audit Report copies of the canceled ONC checb paying ~e

vendors." We do not see how the auditors could have overlooked this documentation.

Nevertheless, the Committee has provided further evidence to demonstrate that the

services provided to the Democratic National Committee (the "Committee") were

different from those provided to the Committee - that the services provided to the DNC

were for generic media. Attached as Exlubit A is an affidam from the ONC's media

(formerly, Greer, Margolis, Mitchell, Grunwald & Associates, Inc.) ("GMMG&A") which

states that Deutch, Inc. Michael Donilon, Valerie Graves and Squier Eskew Knapp Ochs,

were part ofa creative team organized and directed by GMMG&A during 1992 to provide

generic media for the ONC GMMG&A acted as lead agency in a collaborative effort with

, these vendors to develop and produce television and radio advertising for the DNe. The

creative team participated in regular strategy discussions, creative developmem. scripting.

filming and producing ofgeneric television and radio advertising.

Deutsch, Inc., Michael Donilon, Valerie Graves and Squier Eskew Knapp Oclts all

drafted television and radio scripts fer the DNe. The affidavit provides specific examples

of some of the media spots created and used as a result of these efforts. For example,

Valerie Graves worked on radio targeted to African-American voters such as the Magic

A!'l:A.C~'TN_

'Page

4
'.

'..

,...

...

c·

strate£:-, :::eSS2~e devei.J;:~e~t a:l~ s'::-:y:i~f 0: radio Spots tc De broadcas1 in ~ficrjgan

and a nurr.:Ce, c; southerr. states. es?e~;:lJi: as pa:< of the Get-Out-The-Vote (GOT\I

camp3Jgn In addItIon.. Deuts.:h. In~ '''Tote an': produced to\,\ television spots - "Gina"

and "Jonathon r for wruch \ideos are pro\ided. At this late date, GMMG&A could not

possibly provide the Committee \\1th complete records concerning ali of the specific spot~

- -. -----"_. . ..

worked on by these indi\;duals, but the information pro\;ded more than amply supports

the pre";ous statement of DNC General Counse!, Joseph Sandler, that they performed

generic media services and were compensated for those seMceS pursuant to the amended _

contracts. Tnerefore, based upon the evidence pro\.ided by the Committee, there is

absoluteiy no basis for the auditors' position that the amount or-the reauced seMces-tothe Committee be considered a prohibited contnoution Accordingly, the initial repayment

determination should be reduced by $111,1 00.

At the Commission meeting on December 15, the question was raised as to

whether these expenditures could be allocated to the 441(a)(d) limit by the DNC.

Although the Committee believes that there is absolutely no basis for ordering such a

result, both the DNC and the Committee would be ....;nrng to take whatever steps are

necessary to make that allocation if the Commission finds the information presented

insufficient to resolve this maner
r

,

2. Apparent Duplicate PaYment (Finding mB 1 )

In the Final Audit Report, the auditors listed $8,329.04 as unresolved duplicate

payments. Of that amount, $1.850.00 in duplicate payments to Southwestern Bell

Telecom have been refunded and are, therefore, resolved. (See Exfubit B.)

3. Stale-Dated Checks (Finding m.E.)

The Final Audit Report stated that there are $57,175.00 in unresolved stale-<iated

checks. Of that amount $32.534.76 have been resolved and .C?~_s24:tf40.1.S·remaih

, . .

unresolved. A listing oftbe additional checks that ~~JS9,761.82); a~C!..~

- -------- -- -------------- - --

voided ($22,772.94) with documentation is attached aSExlnbitC:-- -

4. Overall Spending Limit

Finally. attached as Exhibit D is documentation ofthe-iriDSfcr_~~~ELAC to the

General Committee to bring the General Committee under the spendirig limitat!on.

CONCLUSION

The Committees respectfully submit that, based upon this response and

accompanying documentation, the Commission must reduce the initial repayment

determination of $254.546.00 set forth in the Final Audit Report by S145,485 to a final

repayment determination of S109.061

ATTACID1l~: - ~. Page -¥Z- of If?

6
--T .~~.-'- J' /" . ...',.oo......c',.....,..<--

L,oh l'tre.:ht

Oldaker. Ryan & Leonard

c

'...r:

c·

~~Laura A Ryan L-Vt

Counsel

Clinton/Gore '9: Committee and Clinton/Gore '92 General Election Compliance Fund
CLINTON· GORE '92 COMMITTEE 1322

~------------------------------------------ ';UNTON - GORE '92 COMMITTEE

PHONE (501)372.1112

P.O. BOX 2741

UTT\.e ROCK. All 72203

WORTKEM NAnOHAL IlAHIC

Ull\.E ROCK. All l2203

11·7~

1322c

January 30, 1995 $109,061.00

DAlI AMOUNT'

~~

y····'···One hundred nine thousan~ sixty-one dollars and zero cents.·.··.·•••••

ONE

0EIl u. S. Trea sury

., : ....
c

EXlllBITA

c: If'! 1

-- -._';-~~~
·--

..........,

AFFIDAVIT OF Al''NIE BURNS

I. Annie Bums. hereby declare the following:

1. I am a corporate officer in the media consulting flflIl of G~r. Margolis.

Mitchell. Bums & Associates. Inc.• formerly G~r. Margolis. Mitchell. Grunwald

& Associates. Inc. (GMMG). ~2. I was Chief Operating Officer of GMMG.

This affidavit is made on this -- day ofJanuary. 1995 regarding generic media

work performed by Deutsch. Inc.• Michael DonHon. Valerie Graves. and Squier

Eskew Knapp Oehs for the Democratic National Committee.

2. In the general election period of 1992. a creative team was retained by the

DNC. The DNCs retainer covered the creative team's time and expertise to

participate in regular strategy discussions. creative development. scripting. ftlming

and producing of generic television and radio advertising for the Democratic

National Committee. GMMG acted as the lead agency through this period.

coordinating the efforts of the creative team members as well as producing spots

ourselves. In addition. by October.GMMG had a fairly well-devel<>ec:<Lovera1! __

-media strategy.and. accordingW:naa-detemuneowl'iat emphasis-would be placed

on generic media versus media for the candidate.

3. Typically. television and radio scripts go through several generations before

production. Deutsch. Inc.• Mike Danilon. Valerie Graves and Squier Eskew

Knapp Ochs all drafted television and radio scripts for the DNC during the general

election. Some of the creative team's draft scripts evolved into spots that w~

eventually produced either by a team member or by GMMG. Because scripts are

constantly being re-drafted and revised prior to production. we only retained final

spots produced.

4. In addition to the creative team's efforts on behalf oftbe overall strategy

and thrust of the DNCs generic campaign. their work is also exemplified by the

following television spots:

DNC-92l7

DNC-9222

DNC-9225

DNC-9227

WOinawJonathan 3"

"Second StreetW

wSpeak./Squeezed"

Written and Produced by Deutsch. Inc.

Written and Produced by Deutsch,lnc.

Written and Produced by Valerie Graves

Written and Produced by Squier Eskew

Knapp Oehs .-

,
5. The ~J..T, r.::::T.::"e~s we~e also very involved in L~e dls.:ussions of tru:ssage

anc sc:ltefY for the D~C's generic radio ad\e:-.lsinf ca..~paign. E.a=h of these four

entities (ie Deutsch. Inc .. ~1ike Donilon. \·.:Gene Graves. an': Squier Eskew

Knapp Ochs) also pa.nicipa~d in the creative developmenL scripting and

producing of indiVIdual radio spots or sets of spots. For instaIlce. Valerie Graves

worked on radio urge~c to Afric:lJl-/vnerican voters, such as the ~1agic Johnson

radio SpoL Mike Donilon and Squier Eske\\ Knapp Ochs were involved in the

strategy, message development :lJld scripting of radio spots to be broadcast in

Michigan and a number of southern states. especially as pan of the Get-Out-theVote (GOTV) campaign.

6. We have enclosed a VHS tape of the television spots mentioned in

paragraph 4, as well as a budget for the ~Reality Check" spots entitled "Gina~ and

"Jonathan 3" and an invoice for production expenses incurred for the

"Speak/Squeezed" spoL We had budgets for "Second Street" and

"Speak/Squeezed" prior to production but were unable to obtain copies of these

budgets at this time.

I declare under penalty of perjury that the foregoing is true and correct. -- ----------- --------

Executed this ~~ay of January. 1995

Anme Bums
• 10( Be 'se 16:83 ATt.T F'R< 9B35 PUS

ASSOClATlON OF INDEPENDENT COMMERCIAL EDITORS

POST PRODUcnON COST SUMMARY

P.3 "......

U:Q:U

'tSPASNVC

2t~S--7500

2t 21853·01&1 "il8aI. NalIcJMlPo

SCHEDUlE

~1In; on.:

O·m.·

Edt 0alK:

OueDalK:

Lb:na R~

Tlm.:

A;.nc.,:

Addre.-;

Telephone:

Agettt;:y FAX

cx,,:. • Product:

AgetIq' Job .-:

f"n)ducer:

"'ge~ BIz Mgt':

Allencr Writer:

Agencr An Olredor.

202f3.31·870012~ Fax

t 092·090

Ellen Fraw1ey

tt·02·U82

RadCw

t90" ~r

New Ven. NoY. l00t2

(2t2) 982-65$5 fu 982-7118

" Roe Brassan

Te&ephane:

CoMMIt:

Ed.or:

.klb •

Production Co:

,,"reM:

T"lphorlll:

Cofttaclt:

DfQctor.

COMMERCIAL IOENTIACATION

T1tJe: l~lh:

-SUMMARY OF EsnMATED POST PRODUCTION COSTS

- - - ---- -- ------------- -- --- -- ----- -- --- ---- ------- ------ .ESTlr.tATE - ---- - -- --- .ACIUAL. -------

.·1oon Prep Total A 0 0

2' Sound Total B 250 500

C)" Optica.Je Total C 0 0

-4000 laboratory Total 0 360 360

~O VIdeotape Total E 2535 4842

'sOOO Mtseenaneou8 Total F 550 1205

7000 labor (When appficable) Total G 0 0

(8100 DIRECT.COST: SUB-TOTAl 3695 6907

l-§.200 Mat1<-up (S5 129S 2417

d300 labor To~G 6130 8441

3000 TOTAL TOTAL 10118 17786

)100 SaJes Tax (0 0 0

~RANOTOTAL GRANO TOTAL 10118 11786

...
'C1Q

0:0

~e30

1040

1050

PR£:F

Sync 0.1.;;;0$

$.::re,ri,,, R.:xlcr,

Code Oaitiss

$»::XF OOlAQO!l• F_

Supplie6 AJ Ma.:cNJ on V..:;.o

IfHR

600

600

880

...

250

250

SlJ6-TOTAlO 360

sue-TOTAi.B

iJl.80t'tATORY

NlOIJd.... t'repI Confoon

Neg~ DlNeJq;i PMt

ReprtrU

Rewn;af Oupel

<JrO:;a' Track F'roce"t~

PMI35mm

Arrswar Print 16mtn

8Smm SAleI)'I D\:pleation Element

,8mrn s.."'1)'I D~:-llon El~

Rokl a.oo 3Smn\

Peleue PrIn: 16mm

Prt1: BrNkdown

Latl \lern In

U:s.ee!!oroilO'.J8 Lab hem 1'2

J",C.$06 rlenao<Jl; Ub nern #3

SOUND

NarraJion Roccnling

OWogue RapI~t

Lb-ouy M..JSic SGarch ..F..

Sound Etlecla Traresfer.s • 9toclI

SC:fateh Mix

F"~ Mb:

M1X.c1 Mag(s)

0pCIC&1 "Traci<.ll

VlcfoeoO SoundTransfel'll

VJd8:l Sound t.Gx

Vk»o Sound Stocj(

Audlo Relra~I Relay

,&,ddltlonal Sound T~ll$1er

Msc:. Sound t1emQ

-4000

"~10

~~'U

~030

40"0

4050

4080

4070

",080

4000

4100

4110 " UtO

4130

':1.0

":160

......,)

.1070

S~o

:soto

HOO

1110

a-tto

S180

~Oa115

0

c·

:000

tOl0

2020

2030

2040

2050

20110

2070

20ao

2090

2100

2110

2120

2130

2~140

2150

3QOO OP'TICAL

3010 Aftworlt

-:s-0-20- P-rofectlOll3 - - ---- fe30 TllSe Prep .. Phol09rs;ily

M&nIJ Prep .. f'hotogra;::ny

Color $land F'hotogra.phy

~:.;"Il

lnt~osltlve

CyneJCJW~es

Optbal Te:sUng

Pre-Oplicalll

0pIlc:aI N&g a.l/veJEfI'ecla

Dupln~w-upc

AnJma1SOn

a.o.c. 0pUctJ IIem ..,

I&c:. 0pGcal It8m
100

fOO

US

$00

-

o

o

•

"0!:ie:~-e~2i"""- -~~ ~; .... ;"IlNlIM: .. -.1-.. .- -'. -. . .' .' ".15'·' ..

4

2

1

o

jO'O

5020

S020

5040

10SO

SOia

1070

riolO

1100

IttO

IUD

1110

1140

1150

1110

1170

Ii1to

"eo 1200 ~,,1Z2O

. 'IUO

1140 -11:50

··180

. ·.·.II~. ... SHO

jIt: ::: Jjj'f2 "oR 16:84 An.T f"Al< 9835 fIl..US °

RE!)e:.tI'

_'* •.eEI ' AHEOUS

1010 Ihl lMe + 'hlll~

~IOIO eUrr'll ~. IOSO EAiatII

'. 1040 DIs:Iai.. TNIplillal:lPl<'!ocIlt-,lA

IMO WI Sf If ......... Face..

c-lOtO M we

1070 ...... :_01OM All $1\' ,•• Rentsl

10M In 'I~ IWn (No UaIt~

;:""00 t':."FIOI. """' ,., 1"1 t": .1,",,_ IIIlm 12

.1111 In I. IOC. bllm IS

LMow

""""'oduetlo"

....

1i.-ar0T

""' EdlIot ...., Edt:lt OT

y-.! l1cnI

~T... ,.

SUa-lOTALF

to thO 45

to HrtO ea

SUB-lOTAlQ

til

t21

71

20t

551

410

no

4000

5110

284 It.

o

1205

'.

:;....
'. ,

et-.....t M.url1slMlt~h~lJCrun"lld

2~ Pa:uu)'lvula A\'~QC, N.\\'.

Washlnrtoll, D.C. 10037

FOB g-!YJrF..f; Tn PRODUCE;

INVOICE' 10t-9il

c

(1) :6() TV Spot, jiJr the DNC

'"Squ~'

1()/)1/92 ~------- --

NARRATION:

IncludinS Nura:.or and ~rdiDi

Studio

(d.1f'lo rot.)

MUSIC,.':

1tIcludins NnTlItor lWl R~.(£n£

Sb.Idio

(daIV me)

hlc;h1.::iinS ~J I Swr.liu

and engino=-

-t-,

I

I

I 1.spot @ lS5

! -

I

.

J

I,

cut 8104

I

?br @ 200

3$$.00

1G4.00

100.00

•.

I,

I S112NI)~w Nt. O.c.ZlXm

202~ W-wlO m 5oOo69U

-I

./J

~~:~~1: ~; /9'1
-

.' INVOICE' 402=941 (coadAued)

ptlBBINQ:

One 314- and 3 VIiS

(mctll4ing tItodt)

1)1\1 ~LJT (Audio Mix)

BCT·IOM (B-Itoll: Work Tap:)

Suasch Truk 114-

! • Blaelced Edit Mute

3/4 (,Music: Dub)

BCT lTot. MUUlr

P6-120MP (Audio Saclt-up)

10S.00

"'.00-

22.00

1$.00

2!.0CI

2!.00

40.00

13.00

ON.mJ: £DIT:

- ----- -5P SoureetD-ll1-Mastc:r --- ---------3,hn@-300-------900.oo -- --- - - - - - ------

ADO: 2 Channel 3! bn (i 300 900.00

AdditimAl Vl"R 311hn. 66 191.00

Still &1m 3 btl @ 75 215.00

c>

•

M1§Q4! 41''EOUS: ~.OO
RESPONSE TO THE INTERIM REPORT

-

- ------- - ----------------- -EXHIBIT8----------------

c:
c'

July 5, 199'

Lyn Utrecht, Esq., Counsel

Clinton for Presidant Committee

clo Oldaker, Ryan (, IAonard

818 Connecticut Ave., N.W. # 1100

Washington, D.C. 20006

Dear Lyn:

We have sent you under separate cover copies of checks

representing payments lIlade during October 1992 to Michael C.

ooni10n; Valerie Craves; the lira of squier Eskew Knapp 0Ch8i and - the-fi.rmof- Deutsch-,Inc.----------- ------ -- ---- -- - -- -

This vill confirm that, according to our records, these

payments ",ere made for creative and consultinq services in

connection with the production of qeneric lIIedi&, i.e., media which

urqed support for the Democratic Party and its candidates without

mentioninq a specific candidate.

:If you have any questions or need further infonaation

concerning the above, please let •• know. With kind regards,

Sincerely yours,

~.(...

General Counillel

0:/9'7
() L- ,\ :J ' / n-"J 9 ,,' , I i ',)'.

\. .....L. .. ",~ ....................... 1 ......-..-......_.~._~.__.--.__• __._...._. ._.~"_._.__ ....··f. 1

'.4 : .f

f~~~'!!.~!!:n.a'kJn.l'D,Ink, •• ..........

", _1 --.

..."u ..

DNC SERVICES CORPORATION

AUOCATIOH ACCOUMr

4:10 SOUTH CAPlIOl ""EET, SE.

WASHIHQTOH. DC 2OOO:l

(~~

10m I!L2 2

7 ~l :i !)

I" 1(,1.".0

"

*~_ .... ~J

OOlLAns $21, 100.lltl ---------_.,-

'a.'.I. '.? _ :.1' ;.;, " 1\ ...

twO .IO HilA". ftrouln,o

9th fIr.

Deutllch, Inc.

215 Park J\venue South,

New York, NY 1000)

10

1U.

OfIOfll

or

rAY Twenty four thousand four hundred :" 00/100

r , \ r" ~...rJ b. r.. , 'c~ ....

c'~--=~3~~:;::;~ -------::;>o'....c. -- .-..." . Tt ;- --------'- - -.J_____ /1 6 ..... '(f J i{/

.·OO?qSq.· ':05 1.001[,20 1:1 210 12101,.·0 1 ,,'[JfHl ll,I.()f)(JlJ." I.... I ,

,t........·---."-·....-~. ............~. • __.---=---a.~.~....r'=':::-...,._:-r:_.W"":":",· .... _r-•.

•• fl-

.1' • J 11'1 • I

r r..

~~

W
c--

."~ .

....•

..

.

llfOOOTfO ., »Ml lI1.l.S'o1'Pl.LS'1Al 'MIOU.W l.Y ~t~tze 'rr;N

"tiiiI "QlvtXlS$Y H$JIl3G alA'Wa

C1NO JJSOoBO IIOlI

1

1

1

1

1

1

1

1

1

-~, 1 .~

.. I 1

1 .

1

1

1

1

1

1

1

1

1

1

1

!TT!CRlWI:

Page '10 ~Pt7 1 ...

1
n C 'j ,)

- j ()

\ i

·t':

C)

, , \

'1 I ') iJ

I : I j I','

\' \""I I

l .d

1'..-.•..___............... •........-.-........•..-.. ..... I..---.---~---~ •.........,.,~,

j'~ ~J

ONC SERVICES CORPORATION

AllOCATION ACCOUNT

00 aouflt OAPIIOl IInur. II.

WMIfINOlON. DC IOOOJ

(~',~ ~.I.!..~~tt,n,"nnlf ''In''. -. ••

\ ..... .......,._"' ..... I~---

-"~ Jl>l~

.............

1.912 0 _19.2.1.

7~60

IS IlHf\.tQ

DOllARS rtlL.2.fLQ....QL rAVi!~ e i,ht thou,and nine hu"dye: ,'";o~ I,~~, " '.; ." ",,,1' <" <c" '..'

TO ; _. Squier, Escew, Knapp, Oells I lWO SlGHAlUAU nroullI.o n'f " _.---_._

OIIor" • I Conununlcations , .- o. 511 2nd Street, NE I,' __ ~_ ._

Washington, DC 20002 t...;;;;;;.;-

.~Ir..--...---..-.,,~ •

.'007Qr.0.·

.....-.~.

':05&.00 ......-...-..-.. lr. WI:

............_

Z lO t

.............

I

llOI~~ __• A"'l:::~~~" • .--....................... "

'" :,. I" " t, . I

If) /'

'kh

~;I

l)

~~

~~

\""1

.....i. . .J
•

.-

l.

......

1,

.1

•... ~-

III

v-I

III Q,

..

..

r-- -. -D- - '" ~. e .l: - -

-.
.,- -'- .~ - ~, - .... - .. - ... - .,- ., - .,- --- ..... _,.... - _.. --'-

s::::: 'v'!CES C=n~~::\;"'7"!:'" :-:;.~.~~ ;':~:,-,,,~

.: ....... : 0 .:~ s-:~=:-

- ..<, ..: ::: ;:~.:.

- .=: .; ::

::1":

..'

_~'.:..;,_........~·.:;A.:;.,--_~; -,"'~>-,,'-,..;'""',,....-,,- ..-,=C~;-,~,-,,:..:!·e,-----,_~·"'--"~'-'''''-.~_ ::.-.",'-"-x"'x-.o.=..::_-_-_-_-_-_-_-_-_-_-_-_-_-_-_-_-_-_-_-_-_:CLJ. PS S, . 5CC . 00

s:z: S:A~ey ~~a~

A:'e'C.1:1c:-:,a. \"A. ~:;C5

-- ----

:;00l.71., _ >oW "'- Y.6 _ ...... _ ..... _ '.i:Z _ \011 _ _ .'.: _ ..... _..=a _ \&;I - -:I' _ u.I' _ q.a _ ... - __ ,.., - u.6 - , ... - "'-1 - ... - - '-Lr _ •• '

, .,1 __ - - --. - ~J't _ ":."1. - .;::y, - _ _ ..... ........ _ _.~ _ .:.a _ :=6 _ C"I - _ .... - __ 0.'" _ ,_" _ .... _ ....'\ _ ..... __ ..... _ ..... _ "t"lI

~c SERVICES CORPORATION ~L.OCAnON ACCOUNT

~.scun. CAP'>"'~ S.,-;:lE=:7 S c:

·"S>;"'G70N. CC- ------ <=- --- -

NaflonsBGnk

_.....:...1C~/,-'3"'0=-- •SiL

0-..

E::'g:::ee:'l e:~ousan<:! c::ae ::u::,::ec " xx/tCO ---------:...----------:QOLLARS,Si 18.300.00

-:.'-=;-;--~ -. _.-:. - -

I/o

VOlle:: ie GrOlves - ... 32 '..lese: lOSch Sc

Ape ~2

lie'" Yo::k.. IlY 10025

... _ .. - - .'0000 - -=-' - L 237.' 1:051.,00 ... L 201.,1: 300l., _=_: _ _.._.... 71., 0" -.- ..'DOD LB

"0000r' - "",t

c>

~E)ROER

(Of

I

-iJ
,

~.=\ ... ._0· '7-:"'\ . v :. "'< - ,,·s 7

i ..... ..r.

:

:

::

·;)5-·...... .; .~.::: 73S7 -~:~

... .- -... ~;,

c·

,..

'\

V

,
,.. .

~-'

A G R E E XES

This con~:::-ac,,; is en':.e:-ed in':.c by and be':.·...een Squie=, Eske.... , Knapp,.

Ochs COm::3unica~ior:.s, he=-ei:1a~~e~ :-e~e:.-=ec to as nConsul~an:,ft

located i:1 the D:s~=:ct:. o~ Colu=.bi.a, and DNC Services Corpo::-ation,

hereina!'~e= :-e~e==ec to as n~NC," lcca':.ec in the Dis~ric~ of

Colu~ia. 7~':'s cor:t.=ac~ a::'o-..s DNe ':0 obt.a:'~ t.he speci~ic

co~sulting se~Ji~es, cet.ai:ed be:c~, of Cons~lta~t.

1. Desc:::-ip':.icn of Services: Eeginning on Septe::l::le= S, 1992, and

--endi-..,g----on ~_c~""_e-.,..._~_~ _i~_~ ~_~_~_2, ~::e Co~st.:: t.a:-.t. shall p:-ov .:.c.e ~he.-

serv ices sue:: as ':.::e :JNC dee:::s ~es:.-:,ab l.-e-i:1-c::~":-t;eC':.i-on- ..... i ':.hthe ONe--

Gene:-:"c ~edia ?=og:::-a:::.

Consultant sha1.1 provide the ONC ....ith the following services:

o W=it::':lg c~ gene=ic Ce~oc=a'tic te:'evisio:1 acve~ising and

radio cc~e=c:als.

o P:::-oduct.ion of gene:-ic De!:locrat.ic t.elevision and radio

co=ercials.

o Writing, design and layout of generic Democratic print ads.

Consultant shall provide the se:::-vices described above in solely in

coope:::-a tion lIi':.h G:-eer, Margolis, Hitchell, Grunwald & Associates,

Inc. (he:::-eina~~e:::- refer:::-ed to as "GMMG, Inc."). All placement of

such advertising and coomercials shall be carried out solely by

GMMG, Inc.

2. Fee Str-,",c-:-.::-e: Consul.tant ....ill be paid a tal o! $48'9~O'nY

Consul':.ant ...-ill be paid $48,900 on Nove!:ilier , 1992. " f\~\'

i Jlc..Ci2- ,..,. . Ot .flo'-

J . P=-e-3:::-oac.cas~ Apprcval: A....y advertisemen':.s p=oduced under t!l.:..S :rJf.

ag:::-eeoent ~c= tte DNe by CO:1s-,:: t.ant shall req'-lire the IIritten -

approval o! Ronald n. Bro....n, Chai:::-=an o! the DNC, or his delegated

rep:::-~sentative, prio~ to the p~lishing, public dist:-ibution~,or

publiC b:::-oac.cast. a! such adver':.~se=ents. _

. L::~:o,,~:;~ IZ7.

;-:0..,,, #-2- c_ .J--y..f-.o-.-r-.

4;0 South ~i~~. 5.£. ~~hji\gtOn. D.C- 2OCC3 {~2)!6;-ao()O

?1.ac! !Or bT th< Oe~OC~t:: 'Q.:.:~ c.c~....~it'tl:'e c...-v.:~.~:-:C'~.: L~ ~~:Y~~ 'b,.:'CX':1-' Cx==__ .~ ~- -- -_- ~-: _.. ·~t ..
- .

Agreement bet~een ONC/Squier, Eskew, Knapp. Ochs

Page Two

4. Disclaimers: Any commercials or advertisements produced under

this agreement shall include the disclaimer "Paid for by the

Democratic National Committee."

5. Effective Dates and Ter:nination: This agreement shall be"

deemed effective. as ot September 8: 1992, and shall expire on

November IS, 1992. Either party may ter.:inate this Agreement at

any time. Upon termination, Consultant shall receive a pa~ent on

date of tennination equal to the total tee due Consultant under

paragraph 2.

6. Expenses: Consultant will not be rei~ursed for any expenses

incurred in perfonnance of this contract. The fees paid under

paragraph 2 constitute the total amount due to Consultant unde-:-

this agreement.

7. Work Product: All products resulting (rom this con~r~<::_l;_an~f_

---any materia-ls produced in- com-pl1:ahce--"'-ith -t.>1i-s-contract~ - including

but not limited to all video, audio, and photographic images, shall

be the sole property of the DNC.

8. Confidentiality: All parties involved, inclUding the DNC and

its consultants, agree to keep infonnation concerning the terms of

this Agreement confidential, subject to applicable law, inclUding

FEC audit procedures.

"9. Liability to DNC:

contractor, without any

liability or expense to

The Consultant shall be an independent

express or implied authority to incur any

or for the DNC.

10. Resolution of Disputes: This agreement and any task assigned

hereunder shall be qovemed by the laW's of the District of

Colu.m.bia. It is agreed that any court action involving this

aqreement, or any taSk assigned hereunder, shall be brought only in

the District of Columbia.

11. Amendments: This aqreement constitutes the entire Agreement

be":.....een the parties concerning the su.bj ect matter hereof. Any

ch-nges, modifications, or amendments to this Agreement must be in

vriting and executed by both parties hereto.
;'.~-:-€€:::E.. ..... :. ~€::~...·ee~. :~~·:::s::;-..::'€:-, :::ske.", ::~a;p, :,c::s

::a~E :~.:-eE;

:s: 5e:-,",·:.~es c=~:::.-a~:'c:-.

4~O SCU~~ Ca;~~c: S~=ee~, S.E.

~as~~~g~o~, o.c. :OCCJ

=y:

Squ:e=, Eskew, Ka?p, Ochs Co~~unicat:ons

511 2nd St=eet, ~.E.

Washington, D.C. 20002

T!N: 52-088-5671

Dat:e: /"!Z-;'/C,7

f
•

Democratic Nacionll Committee

AGREEMENT

~-~..... .

This contract is entered into by and bet..een valerie J .. Graves,-

hereinafter referred to as "Consultant," located in the State of

New York, and ONC Services Corporation, hereinafter referred to as

"DNC," located in the District of ColUmbia. This contract allows

DNC to obtain the specific conSUlting services, detailed below, of

Consultant.

1. Description of Services: Beginning on September 8, 1992,:an¢

ending on November 15, 1992, _~he __Cons.ult~nt .Ji1t~_ll_provide-th&'--­

----------services-sl,fch-as-the-ONCceems- oesirable in connection with the ONC

".- Generic Media Program.

Consultant shall provide the ONC with the following services:

o Writing of generic De!llocratic television advertising and

radio commercials.

o Production of generic Democratic television and radio

commercials.

o Writing, design and layout of generic Democratic print ads.

Consultant shall provide the services described above in solely in

cooperation with Greer, Margolis, Mitchell, Grunwald' Associates,

Inc. (hereinafter referred to as "CMMG, Inc.·). All placement of

such advertising and commercials shall be carried out solely by

GMMC, Inc.

2. Fee Structure: 'Consultant will be paid a total of $18,300.

Consultant will be paid $18,300 on November 15, 1992.

3. Pre-Broadcast Approval: Any advertisements produced under this

agreement for the ONC by Consultant shall require the written

approval of Ronald H. Brown, Chairman of the ONC, or his delegated

representative, prior to the publishing, public distribution, or

public broadcast of such advertisements. i

ATTACIDlENT ... 74"7 page~o_~~

.t}O Soouh CaIlitol $croft. S.E. Wuhio!toft, D.c. 20003 (202) 86}-!ooo ~d 10, bor ,}w, O<",ocr>,ic COmmit(.., COft,rib<J,i"r.s '0 ,I'>< D."lOC=ic :-la,~ ~",iro;~ =

"'" ru ~~uCt11*
Fa:;e

4. ~:s~:a~~e~s: ~~: ::~~E~~~a:s C~ a~~e~~:se~e~:s ~~=c~:ec ~~ce=

~l"'.:.s as':."'ee::.e:'"'.:' s:-.a __ i:",;c:,-..:c.e ~~e c~s::::'a~=.e= "?a:.:' ~,::- by -:::e Ce~.::c:"'a~:.c ~a:':..::-.a:" :::::..:::.::.ee. 't

5. E~~ec~':"ve :a~es a~c. 7e::-=ina~ion: T~:"s as:-ee::er;~ s~all be

cee:ned ef!ective as of Septe::l.ber 8, 1992, and shall expire 0:1

Nove=be::- 15, 1992. ::::"::he~ party may te:::-:n:":1ate this Ac;~ee::le~t at

any ~i=e. Upo~ ~e==:~a~:o~, Co~sultan~ shall receive a ~ai~ent O~

date of te::'!:linatic:-: equal -:0 ~he t.o~al fee due Consultant: unce:-

pa::-ag::-aph 2.

6. Expe:1ses: Consu1':ant '.. :'11 not be re:":r.bu::-sed fo~ a:'1y expenses

incu::-red in pe ~~c:-::ance 0 t.n is contract. The !ees pa:'o under

pa :-ag-::-aph 2 co:'.s~:. ~·\':::.e t~e t:o-=.a!.. a:iOl::1': c·..:.e t.::: C=:-:Sl..:.~ tant: U:1ce-:-

t:h~s a<;:.-ee::e:1:'.

--7~-~c::-k--?-:-oduct::-- -11:1.1--p7oc\.:c;:s- e Su.tt:"-r:g-- ::oc-tI':i-s- cor.~-::act -ar:C!--

any ~a~e=~als ~=occcec :~ cc~pliance wi~~ t~:s contrac~, including

but not 1 ic:" ted to a1;' v:.cec, a·..ldic, an': photcs:-a;:hic i:::ages, sha 11

be the so!. e prope::-ty c t::'e ONC.

8. confidentiality: All pa::-ties involved, including the ONC and

it.s cor:sultants, ac;ree to keep infor-:nation conce:-ning t.he ter.:lS of

this Ag=ee~ent confidential, SUbject t.o applicable law, including

FEC audit p::-ocedures.

9. Liabilit.y to DNC:

contractor, without any

liabilit.y or expense to

The Consultant shall be an independent

express or implied authority to incur any

or tor the DNC.

10. Resolution of Disput.es: This ag::-eecent and any task assigned

hereunder shall be governed by the lalo{s of the Dist::-ict of

Columb ia • ! t. :'s ac;::eed that any court action involving t.his

ag::-eement, 0::- a~;, task assigned hereunder, shall be brought only in

the District o! Col\·~~ia.

11. A=e~c=e~ts: 7h~s ac~ee~en~ ccnsti~u~es the enti~e Agreeoen~

bet10leen the pa:-t.:"es conce::-ninc; the sct:ject ll:.at.te::- he::-ecf. Ar:Y cha~g€s, mod.ificat.ions, or a::lenc~ents to ~~is Agree~ent must be 1n

-Titing anc exec~~ec by bo~h parties he=eto.
~;=ee=e~: ~e:~eE~ :~:, ~=~~es

r:a:;€ :-:-.:-~e

:)NC Se:-..":'ces C:::-::c:-a~ic:1

~JG Sc~~~ Ca~:~=: S~~ee~, s.~.

y..;'as::':":-:q"":.=:"'., .......... ::003

By: ~.

c·

Vale=ie G=aves

32 West l05t~ St. A?t ;~

Ne~ York, NY lOO~5

SSN: 364-52-.H'67

BY,A..,,jd £/0- ~7

"

.--. ":.'~~'"

~:~~-~P
·.1l...

.

\ This cc~~~ac~ is en~e~ec ~n~o by anc be~~een Deutsch Inc.;

he=e~~a~~e= =e~e~re~ to as "Co~sultan:,'t locaced in the State of

New Yc=k, a~d ONe Se=vices co~porationJ he=e:~after refe~=ed to as

"ONe, n :cca~ed ~~ t~e Dis~:;:'c~ o~ Co!.~~ia. nis contract allows

ONe tc c=tain t~e s~eci~ic cc~sulting se~ices, detailed below, of Cor:su::a~t.

1. Cesc==-.,ticr. of Se~:ces: 5e<;inning on Septeml:le= S, 1992,

ending C~ NoveC:Oe: 15,1992, t!':e Co~s\.:.:tan: shall p=;:vide

se:::'"Vices such as ~he ONe cee::s ces':'~a=le in con:1ec':ior. \{:::~ ~he

Gene:- i::~ec.i-a?:-c<;::.-a:::Land '

the ,_

ONC..'

c ;.;==- ti:1<; of ge:1e=ic Ce~cc~atic television adve=tising and

=acio co~e=cials.

c ?~cduction of gene=ic Oecoc:-atic television and radio

cc=e~cia1s.

" o ;';~iting, design and layout ot generic Democ:-atic print ads.

Consultant shall provide the services described above in solely in

c- cooperation with Greer, Margolis, Mitchell, Grun....ald" Associates,

Inc. (he=eina!ter refer~ed to as "GMMG, Inc.-). All placement of

such adve~tising and co~ercials shall be carried out solely by

GHMG, :nc.

2. Fee 5 t:::-..lct:.:=e: Consul tant will be pa id a total 0 $ 2 4,400.

Consl::~ar.~ _ili be pald $24,400 on Nove:be= 2, 1992.

3. ?~e-=~ca~cas~ A?p=oval: ~~y advertise:ents produced ~~der this

ag~ee=e:-.~ f:::= -:::e ON:: by Consultant shall require the \Written

app~:::va: :::f Rona:d E. B=:::l,o,-:'., Cr.ain:lan of the ONe, 0= his celegated

~e~=ese~~ative, p=ic= to t~e publishins, public distribution, or

pub:i~ ==~ac~as~ o~ suc~ a~v€~isemen~s.

--
4. J':'s:::'a:~e:-s: ;":-.y ==::..~e:":::'2.:'s C~ a='·/e=-:':'se=e~~s ~:-OCt;Ce~ ·..;:-.::e:-

~h':'s ag=ee~e:-.~ s:--.c:': :nc1.uce ~he -=:sc:2:::le:- "Paid fc:- by ~~e

:e::loc~a-::.= ~a-::~:-.a:' :::::7-~:..:.:.ee. It

5. E!!ec'::':'ve ;)ates and Te:-::linaticn: This ag:-ee::ent shal: l:e

deemed to take e~tect as o! Septe~e= 6, 1992, a~d shall expi=e C~

~ove~~er 15, 1992. Eithe~ party ~ay ~e~ina~e this Ag~eecen~ a~

any time. Upo~ ~e~.:~a~ion, Consulta~~ shall receive a pai~e~: C~

date of te:-;:l':'naticn eq--lal to the to'::al ~ee due Consul'::ant u:1c.e=

paragraph 2.

<;;") 9

6. Expens es : Consul '::ant wi 11 ..... be =e i:n=u:-sed [or iIoIII'! expenses

i ncur::-ed ':'n pe=~o:"'::'lance c th is con~=-ac~ T'::.s!z:; e _ 2-d. _.;Q.,ac ~_':Il,..._,_\.o, ---C:-;-"-e -:1-. ... _ ':._: _ SUR: :1'Q ....---.. ,---- .. ei:

,H' :,,-. flD..\ 'qpuy.tA ,,'0

____7. _ \oi_orlc ~roduct:__ Al:_p:;-oduc~~_ ~~~u:tir.g ~ic'Ctract and:

any ::a ~e:,,:"a:'5 o::-odu~ed in eeoc 1 :ance "i-~h- ~h:s--c-o-ni=a.c~-: fncfu~i:1c------ bu t not 1 i:::li. te;: :0 all v ideo, ·aud io, and photographic i::lages, s:-.ali.

be the scle p=o~erty c~ the ONC.

a. Con!identia:ity: All part:ies involvec., incluc.ing the DNC anc

its consultants, ag=ee to keep info~ation concerning the te~s o~

this ~gree:::lent con~idential, SUbject to applicable law, incluci~g

FEe audit procedures.

In 9. Liability t.o ONC:

contractor, wit.hout any

liability or expense to

The Consultant shall be an independent

express or implied authority to incur any

or for the ONC.

10. Resolut.ion of Disput.es: This ag:-eement and any task assigned

hereunde= shall be governed by the laws of the District o~

Coluwia. :t is ag;:oeed that any court action involving this

agreeI:lent., or any taSK assigned hereunder, shall be brought only in

the Dist.rict o! Col\l~bia.

11. ~en~en~s: ~h~s agreecent cc~stitu~es the entire Ag=ee=en~

bet1o'een t!-.e pa.::ties cO:lcerninq the subject catter hereof. Any

c:-.anc;es, l::odi!ications, or a::lendI:lents to this Ag=ee;::ent must be in

.riti.nc; an= executec by bot.h parties he.::eto.
o '_., •

.-,i

;'.g=eE=.~:-.:. =€:':·..·€e:-. :::: :€"::'S:;:-.

t:a;e :~.=Ee

~NC Se~~:=es c=~c~a=:c~

430 SC~~~ CaF:~~: S~~ee~, S.E.

Washi.~g':.::::"., :.C. :~OCJ

Da ';: e : __-"-/...:t>::..L;:...:-':::-:....:r:..'·L/--:"i_·.::-=- _

Deutsch Inc.

2:5 Pa~k Ave., SOU~~

9<>:.h Floo~

Ne.... York, NY 10003 JJ 9[I I)

Tax I~ Nu:ber:~~-+-~~~L. fX) 1

Da';:e: (Ubcrhl
EXHIBIT R-------
fuji

Nt,.:--,

•

I

t• .. ...

•

"

"

•

• · ·

•

·

·

• ..

. .. .. .. ..

tt ..

I "- "- "- "- "- "- "- "- "- "- "- "-

•

• .. .. .. .. .. ..

"

" .. ..

• ..:

•

I

t

"

""

" '" C "0

t

•I "- "- "- "- "- "- "- ..

"- ..

"- "- "- "- " ..

•

t ..

0 ., .,

0 .. "- t I • .. · ... I I • • t • .. I .. .. · .. t • • I .. · · .. I " , "0 I .. ".. .. ".. ".. • " .. • " C I .. .. .. 0 .. I I .. • .. • · I I I --... I ... C .--.. I - .. • • --...-----.,..-. - ..-.-.. - ---._--~- .. · I • • I "- "- "- "- "- "- "- "- "- "- "- --, ---- • I • .. I .. • .. .. .. - .. ... • ... I ..: • I .. ., ., _.. • • I

'"

"

"

"

- .. • .... .... .... "- .... "- "- .... "- "- .... 0- "- - .. I · • .. .. .. .. .. .. " ~_ . .. - I I ., ., .. .. .. .. .. • I I • .. I .. · ... I • • I • • I

1tt

•

• '" ..•

"

"

I

•

•

I ..

" .. .. .. ~.

........_,.

• '" ..

I

i~ .. ... .. ..

" .. .. .. .. " • • .. -., .. ... ..

•

, -,

I .. ... .. .. .. ..

· Cl

I to

<

•

,

•

•

•

..- .. ...

C

- .. .. .. ..

•

" .. ..

•

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

•

-

•

"

•

• \; .. • U

•

C

t .. ... .. '" .. ... .. ..

•

,

t .. .. .. ,. ... .. .. ... .. .. ..

I

•

•

• ..

f

-... .. .. '" .. .. .. .. .. • t .--

•• ~n .. • .. • .. .. .. • ... •t • • • • " '- .. .. • • .?; .. .. .. .. .. ... .. I • , .. .. .. .. .. .. .. .... .... • , • .. • " C I , .... , , .... , , .... .. "'". ... .. '" .... .. ... .... .. • • .. , -ta£ .. .. 0 ... .. .. .. .. .. I • • , "- , , , , c .... ..... • • I C Cl t .. .. .. .. .. J: I , io"':- -;0 .. .. .. U I , , V .. I I .. I I

• • .. .. .. .. I • .. .. • .. • • ".. • • · .. ... .. .. I U • I I I .. ... I • .c .. .. .. .. I • .. .. .. .. ... " .. I • .. " ... .. ... I C : .. .. .. . • • .. · . I = 0 '= • or .. " " •

•

C

-

•

•

·-

•

•

""

• ..

•

• "-

· ... • .. ... • • " .. • "- • . .. •

•

•

..

• Cl

·•

" ..·

" .. .. J."'''''-3C _ ... .c....

•......:~

"

• .. !'a~;,- :35 _:~ _ _

, ..

,

•

•

"

" .. .. ..• '"
:....:~ •• "~1Of" :~-.-...

S'~s ;. ;1;'(:,. " ..,.. ..... U~ .... itO'-. :-,:. ::"'C:

_"'" \of~'lU

: ....~.U.lO' I

U:.- .:::lI~MO""'o -,-:"':-;'::-'~~;:;M.5:::'~--------­ -0 .,... $:1I".-c:

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

,.- . -'"', ...

'. =~ __......".,: .~:. \It" ''It;,

':':".:c=..J:;c:-e 1.9: Cc=::'::ee

, ... , !) A.""_LJ~7 OF .~" ;>.">::>r. 'or tf\. Ourx,", o! ",q::"n~ c:r.~"::: .....,,on. QC '0' =mm.·::,' ""~: 0:.....' , rM=t-·t~·~~ , E.A:h R,,:EIF7 i tt..!"1 UJlt"\C; tN: t\.a:"':1t: JnC ,c.:~'U: :~ u' .... :>oti~IQ' c::m..~.~ ~c $oCiic,: =r.t;":::"::;or,s ~r'Qm I :AY. I

! v:..AFU I 7'klS PEnlOC R.;C=-; c:.omr.·u nrc.

NAM:......:::AESS. C:~. s~ ...7!. :.:- :::~E i

SAMe ~~ ;).u>'-c ...... =.?:

R~i:btJ=s e=en; ,

07-:5-94 1.J,726.20 C:'::::o:::: fo= ?,::,eside::::: :::-=':::::ee ; I I C"C:"- P A. 7i0 .... I Af;=~;.l"- ~A.

2741 : 1............ .....-.· !

P O. Sox ! In~~ !

ti.::le ReCK, AA 7:: 20..; j A~~~:~, .... ~~. 7"0:t5...75 fT.G..-w !

S-- A7::AC'EED DETA!!. I . . I 0 ! I"..... E. ADOAUS. CITY. 57'"7;'.41' cooe \ NAME :)~ ~Ct~Oy~~ I ! Cig::::a Insurance C=pany Refunc of ove::'Ja'r.lent 07-19-9/0 141.00 i , P.O. Box 371311 oc.C''';PA.TiCI'C RE::8P7 ;::OR :

-- I

Pic:::sbu::-gn, PA 15250 n i'ri.....,

I AV,,;>'CC.>A, Y~" v..::A,'BG..-...

H...a.M!:. AOCAESS. Oi"Y. 57"'"T":.. Z::,. =£ I "'.>.ME OF ~""'\.OY~ I

S:acl! of Lou:!.s:tana· , 'il!runc of ove:-oa'r.lent 07-22-94 149.55 I O::ice of Emp lOY'men::: Sec\:~i::y oc:;.;,A71ON I'"'O:=P, ~OR

3a:o~ Rouge, LA --0 ,.,.......", AGGi'lE~, YE.AfI.,:;,..0A7. (Jl Gcncn< I 10

NAME. AOORESS. eli""':". S'7..a.-:~.!1~ c~oe

~_s~:~__::~ __:~_:o ~_~ I -----825~O4-1- - - --- - - - ----

Soucl::~-es::e-::'1:iBeII-Tel.c~OI:--- , :te_uuc o. ove:-oavmen::--' ------- 07-12-'9'4- ...

-, 51 ~. Collios Blve. cc-~...nOH l"'~I" FOil -- i .cha:-dsoQ, 'IX 75080 i'ri~ l",vG"~': y~;;-,:;..oA'"} G..-al

10 I

N.,I..\,4E• .a.,C::lRESS. CI7Y. S'7A ~a. ZtP COOE IN.>.ME OF :,t,U':.CYS]!

~or1d ~1de Travel ........ 'll',..i..."",.

, 08-01-94 2,428,66

2228 Coe condale Lane ~"'710N I"~'-·~I\

Little Rock, All 72202 -- AGGi'le;;.A,. YEA!'-'O-VA ,c

"""*"

Got-1Il SEE ATTACHED DETAIL

N.....e. AOORESS. CITY. SOA~ Z~ c.ooe NAMe OF !!MPI.OYE}l

Vorld . Vide Travel Press Rlkl!ivable 08-04-94 711. 76

2228 Cottonda.le" Lane OCOJP...nON I~':':'~ Little Rock, U 72202 ' OP'riftWT

SEE AnACEED DETAIL

AGCi"~,"",_1 y l:.AJ'•• 0-0'"n

N.......e. ADCIIESS. CTY. 57"'~. Zlf COOf . N.UlE EW'UlY"J\

S<:)lJt~-stern ~ell , . hfund of ove:-oaV1llen:: 08-09-94 ''-672'83":lJ"l. .. 1651 N. Collins !llve: . 0:::::.,9"'71 ON IRE~" FOil

Richardson, n 75060 'I I

--0 "''''"'Y . AG;;R=-:.A.: YEA!'- 7O-VAl G-.l I

1

, : NAME. AOCRess. CIT"'T". S7.... 7'E. ZlP cooe . /<AMe OF EMP:.cYEJ\ I I

Sou cb"oJes :e~ Bell I Re !\::lC 08-09-94 3,570.19 I

c! ov e:-;: av:Den t

.. 1651 N. ec:'lins O'l""e: . ' =..,.... ';'lON r~~1'T FOIl

'"~ -:). Ric~..a:-cso~ , TI: 7505: I

! -.- __ <_ = __• I'ri---r

1

",G,,~_"", < YEAA-.:;..o .. ~I Gcr-><

~'E'CTALO"REC<:IPTS-H'<P"'--( r I 57.835.53 ...,; '_ I I ._ """ c CC"tlOr-•.a I ••. _ •••••••••• _ ••••••••••••••••••••

--

'OTAl ';MIS PE~IOO (lut c:.o<;c :l>i: Ii". numt>c- on",,). , .....• '" •. , •. , ...............1 ..,-

:..0

: ....,
..:'.'

. -::-;

'.: '.

-';-:. ..... -:-

. ':.;-

",,:...~;: . ... ' ....:. ...;......:
. . '

. .. -'

.....- :..::::...- ~:..:"": ..

@ Southwestern Bell Telecom

7-15-94 REF'lJl'{D477637 .00

•

~'AIiIII .~Afe ----:---

TOTALS·... .00

-~SIX THOUSAND T\oIO HUNDRED AND EIGHTY THREE .---********

..!!:!!!.

..

@ Southwestern Bell Telecom 7-27-94 319730

,.,II.ee...-.

m dwc..1'X 7SiOM'

•. _ . __.·.__•• __ .·,;,_,: __ t~':'

'" - _0·. .._•.. __ . . 0·.":. _,,::"". - - .-.0 _.::. ~_ :...-::'"'•. __

_TO.... CLINTON-GORE WINDDOWN

_e-o 124 101. CAPITOL, STE 1105

LITTLE 1'.-00< AA

7220:3-

lIT110o'3'_J' ....,.t:ttr~... - - -. .• - .-" .. ........---- .- ., .

. ..
-zi .'9"'21 7/'9'95 INVOICE .51•• " "I'S.is·~ 21 ."""1 7"9'" A~l CR D~'477"7 11.....· 'I ."""1 7'l"'S 'AYH(NT lll'... 7'•.•• 'I .""'21 ""/'5 'AYHEN' ~EA~~Y 7'1.'1 21 ."'''21 ./06,n ~AYHEIIT IIIA~~ Y ":"'Il!t~'ll 21 .""'21 .,••/,. 'AYH(N7 IIEA'~Y r-t. ,. 11 """Ia '/"/9' ~AYHIN' ~EA~'LY ",.,24" 11 """11 ./••/,. 'AYHINT IIIA~rLY II"," II .....,n .,.61,. 'AYtltNT IItAl'rL't .,'.'11.... "

11 """21 .,••/,. 'AYHINT III~L't 1'7'.4'

11 .""'11 ./••". 'AYHEN' IIIA'rLY .1•• "

11 ."""1 ""'"'AYMINT ••Ar'lY Ill."

I lun.. ClllfTOIt-IO'1 lflHDllOWll

Orde,. J«I, thaoWI'O

lC .........,. ..,. Tw. .........

'j

',>

1

'J /j

"

" IJ 9

,.1_.

,)c n

AIIll'"

Mil'"

(,

:

In.'',,,, A_'

CMDl'·C.l1 "" Wn4w

AI' "'.11 1_1,.,

1nft1.. 11epl.,

cnDl.·C.ll..'llIne

'tl

'm Il-

~§I~

..... ,. lei..,

4111l~

7,n.'7

,,.~,.I-''''r·'~ '.1.... Onlr

,-.j
•

-• r-..------j-----j---1

:::: !-------t-----l---1 •

004'" _-':;zs...._'-'- _

... _ __• _ _.a. ..................,__

-~ ..-... -'."..-~

NAACE CUdcrtmt'9:< Ccm~-+k. AOORESS Ro. 56i 271/: I

__I.iJ:l.(1 eoc.-':, Ag. '72=O?>

I' . I

I·ft:•

", .

rt

,

•

.-

(

I

•

I

,--'

".

'.'-.
·.

~~~~

Non-Neootiable Draft SlUb • DetaCh and ~etain for Your Fleet

@ Southwestern BellTelephone

DISK OVE~A6E REFUND.

31' 231 0311 ._....-et

\... -

CLINTON-60RE 9%

ATTN SHANNON

P a lOX 2741

LITTLE ROCK, AR 72203

031122

• -....:..

........ 1 ...... .,....

--

r:U07194

380311Z2

\
, ,

-'

EXHIBITCu _
CLDI'l'O_/G01il. 'ta eo;wvlnu

BTALB DA'n:D cncx.

HO. 4 p. 2

Pv CO_Uy.

11,17~.'l

< .,'11.12> Cl_ar" <22,722,'4~ Vold w\ reaSOD

Par PI<:

$1,175 st&l, Date4 Ch.ck.

<11,"4> OUtstan41D,

<2.,052> vo14

< 1,5'0> .eiaau.4

< 253> Cl_ar"

< J, '31> GBU.C

<57,175> '!'ot&l etale Data« 24,'40.1.$ 'fotal Sul_ Dat'4
( I

(

~ecoun: NUI"'t>e,

008941-91S- c

.s!.Jt.~~~ ~:t

11/13/92

Plge Iiu"'oe<

299 1

SPECIAL lUND, • • • • • • * • •

DATE •• CHECK NO ••••••••••• AHOUN

11/09 2857. 1,007.5,

11/09 28S8 1,797.5 .:"

11/10 2860* 707.S " 11/10 28'4* 884.; :c

11/12 28"* 778.3 l~ 11/12 2868* 764.0 tei

11/13 28'" 1,110.9." 11/0' 2870 803.1- ,e 11/12 zan 767.5 1; 11/12 za72 595.4 :

11/12 2873 1,084.S :

11/12 2874 712.8 ~£ 11/12 2881* 1,121.4 .,' 11/12 2882 672.2 2:

11/13 :::c:? 1. 64'>.: 3'

11/10 2893* 707.0 O·

ll/12 28"* 1,653.£ 4

11/09 2897 797.; 1

11/13 2906. 707.£ " 11/09 2920. 1,034.C .3'

11/12 2924. 1,084.1 1'9

11/12 2926. 586.6 ~'

11/10 2928* 129.4/5 :

11/10 2930* 894.' l'

11/09 2932* 387.6 q'

11/12 294311 941.: 5'

11/13 2947* 1,026.; /9

11/13 2950. 1.162.£ 4'

11/10 2951 412.6 ~: 11/13 2952 1,448.6 8'

11/13 2958* 996.: 8'

11/13 2964* 1,07'.~ 6'

11/09 2967. 1,742.2

11/13 2972* 409.£

·11/12 2979* 941.: /9 11/10 2982* )./ 1,782.2 6

11/10 2983 L 808.£ 8

~~~C~f of 7n

72203

WORTHEN

NATIONAl BANK

OF ARKANSAS

P.O BOX 1681

LITTLE ROCK • .toR

(501) 375-2265

CLINTON-GORE '92 COHHITTEE PAYROLL ACCOUNT . PO BOX 615

LITTLE ROCK AR 72203-0615

* * • • • • * * • • CHECKING ACCOUNT SUHHARY

POlEVHlll'i SAt-ANCE 315,431.43

+ 1 CREDITS 98,000.00

,91 OEBIT~ ~02,774.~$ SERVICE CHARGES .00

+ INTEREST PAID .00 YTD INTEREST PAID ENDING BALANCE 210,656.77 .00

• • • • • • • • • CHECKING ACCOUNT TRANSACTIONS ••••• * ••

DEPOSITS AND OTHER CREDITS

DATE •••••••••• AHOUNT.TRANSACTION DESCRIPTION

11/09 98,000.00 CUSTOMER DEP •

. _.-CRECKS'

DATE •• CHECK NO ••••••••••• AHOUNT

11/09 165 1,084.'6 11/12 1532* 661.68

11/10 1807* 1,188.76

11/12 1832* 712.87

11/12 1857* 1,653.89

11/13 1992* 328.35

11/12 20". 661. U

11/12 208S* 779.23

11/09 2183* 1,617.'8 11/12 226S. 1,364.3'

11/09 2326* 1,080.38

11/10 2328* 1,188.7'

11/12 2352* 712 .87

11/10 2376* 707.04

11/:2 2~79* 1,6S~.t~ 11/10 2510* 281.37 !1/1~ ,j2iw I,S42.77

11/12 2556* 692.67

11/10 2582* 1,027.61

11/12 2590* 661.68

11/13 73.88

11/10· 346.90

11/13 2669* 1,000.00

11/10 2673* 1,742.25

11/12 2675* 567.71

11/12 2678* 124.32

11/10 2698* 1,120.67 11/10 2712* 1,617.98

11/13 2733. 1,856.50

11/09 2766* 850.41

11/12 2797* 1,364.39

11/12 2800* 1,110.96

11/12 2823* 930.56

11/09 2850. 1,948.35 11/09 2853* 1,080.38 11/10 2854 674.96

11/10 2855 1,188.76 ~:!... :a~: :~
•

0-0

252'S'

+

387·6S

+

.53S-'"

+

3t3 - I

+

30"'55

+I

1.057'29

+

1.,8S-:"

+

346·90+

'''03'79

+

542'22

+

913'91

+

514• as

+

50-00

+

942-97

+

305-63

+

i

9.761·S2

I

0

1

1.896'60

+

6.380'00

•

2.700-00

+

2.')00'00

+

2.000'00

+

-----2 ~.~ -9C~04

911-08

24S·78

+

2-08

+

18i'53

+

1.920'27

+

200'00

+

240'00

+

75'00

+

165'00

+

250-00

+

250'00

+

200'00

+

120'00

+

560'00

+

76·56

+

32.53.$·76

"

:~

.:..:

.... .. '.' .' ::::- .::, :;:::: :.;-;.-;-....::; :;;.:..~_.~ ..,: .:;;;: ..

:::.~f:F· ~~~~. ·.-:~~~~~~;::~~;~:J;.,j~~:i;it~;~~~ii~\~~l~~j~~~~;§;:~4!~~~:

:.'.

I

• J'"'i

"10" ::-..~..~,!::..=";"~~~~~~""'.-J:~~~~:NPi ••~!'~~~,~~~~.J~.)I-..~ \

0-

,,!PI 57,174'91

+

ATTAC~ 32.534·76

g1

9

9

5 se LI Page ~tfe55 1 ; • ~HJ {t1~ ,-
,""

"
•

•

i~!ii~~gi5i~ .; , . , J , i _. ...

iiiii~i.;s:il iiii:8isiiiJii

·i"iii;:i;:i;:iii

! r ! iii iii iii

III 1111III 11

r , , , r r r i i r r r

f{lillflfffl

iiiii~i.i1:it =

iisi::iiiiiiii

111111([1111

1 111 1 ! I ! II! I

I

I

, I

i~!!§~!i~2;;~!i!= II -~-a - - -- - --:~-~- (9 §;5=iiii5:iicaill I ~~~i::iiiiii~iiiJi2i

iii iii iii i i ! i ! I ! I

I\Pl'tPH'~\IP ilL

!f

III

III

~tlf:!!=t4l!1!!ti IfI

1-\\ \\ \"\~W~~ rII , , , , • , , • • I I • • , , • • I

ttttttttttttttttt

II!!IIIIII!IIIIII

iiiiiiiiiiiiiiiii I

I I I I i I I I I i I I I I I I I

r

i

...

114 •• •
c

'..n

!f

III

ill

: gg;;i;;&i;i~iia~ie;;iii;i~5iii J I iii8iiiiiii~s~i~iia~iiisiiiiii -t

W'I

111111111111111111111111111111 ~I 111111111111111111111111111111 _I

-J

HS

ATTAC~ _ J-/ _ Page -::t-a-
";' ,~- ---- - .

• .

. . ===i i i si ! ! ! i 1 S : • 3 t == as.

~~I~~ililJ~ifJifIJ~~fJJ!r Ji ~~!i~lt{tJft!itji!'I!llil &. Jill. .tl.t .tiI.t -l rill I

If ,. j ;

i i ; a ; a; ; a; i i ; iii I ..

ii

iiiiIIlliiiifillilflIIf!t I I i - - w w N _ N W _ W _ N w w w J i I - ~Ili~~~l~!"!ii!~~!g~~~~~~~ II ,. Ii l~ t - -1 ----- -~ -. --- • II f • --!= w ----------------'-i- 3 3 I 8 3 3 3 3 • I

= 8 i i • 8 8 8 8 iii 8 iii iii • i

==' iiii iiiillliiliiiliiiilillltl ii iii iiii i f I iii11111I 1III I 1I I 1I 1I 1III f , R r

i r r r r f r r r r r r r r f r r r r r r r r r r r fft ---fJJJ iJll1f11 {fIf1f f f f f f f f i f ~~,. ,-

0-

- !f .......,

IrI ,--."

.,

,-

itl ,

L!")

I·i C'" - r~ ".it ----- -- -- -ii- . . J I~II ~~.Dtl ••••• a"I"'I"'II' -

Ii • ~'Irfl c I II

1illilllllllillIIIIIIIIIli .I ii

...... ' ..

J

0&...

OJ'

lib

~TTAC~~~

.age~Of~
!

!i

::lt ....
-

---

WORTHEN

NATIONAL BA.NK

OF ARK.ANSA.S

P.O BOX 16lH

LITTlE ROCK.. U

(SOl) 375-Z265

7Z203

• • • •

Aca>unl NulftW

008941-916-2; -Slltl""tftt ~. •

07/27/')2 !

Page NutnOef I

1 ' 1& H:"99999H.

SPECIAL HAHDL:

• •• • * • • • • *:I

I

}

yrD INTEREST PAID

.00

72203-0615

9Z COI1MITTEE

CHECKING ACCOUNT SUI1I1ARY

CLINTON - GORE

GEHERAL ACCT

PO BOX 615

LITTlE ROCK. .u

• • • • • * • • • •

PREVIOUS BAlANCE 54,641,584.75

+°CREDITS .00

Ii DEBI,S 58,57~.C'

~~KV1~C CHA~&t5 .GO

+ INTEREST PAID .00

ENDING BALANCE 54,583,008.66

••••••••• CHECKING ACCOUNT TRAHSACTIONS ••••• .. - ---------t-----_

I DATE •• CHECt NO •••••••••••AMOUHT, 07/27 1051* 210.00 1 07/27 1081* 270.00.

07/27 108U 150.00.. 07/27 lOa,. 10,OOO.00~

07/27 1091. 1,403.15'

07/27

g~~H ~.;--::~n~:~it

07/27 10'5 12,000.00

CHECKS

DATE •• CHECIC. HO ••••••••••• AMOUNT

07/27 1003 2,598.04 07/27 1004 1,060.00 07/27 1010* IS0.00

07;,7 1014* 3'0.00

07/27 1024* 270.00

07/27 102'." 210.00

07/27 1028* 150.00

07/27 1030* 120.00

07/27 1037* 425.00

OTHER DEBITS

DATE •••••••••• AMOUHT.TRANSACTIOH DESCRIPTION

07/27 18,114.'4 ZBA DEBIT

TRANSFER TO CHECKING ACCT 0086075402 _. _ r'

••••• * * •• * CUSTOMER BALAHCE SUMMARY ••••• * ••••!

OATE .•••••.•• BAlANCE DATE •••••••••BAlAHCE

07/24 54,641,584.75 07/27 54,583,008.66

.. I

I

•

"lTT!C~ • )j _ "

'Page ,,~ ;;.;2

,

i

t

!
i

I

--1 __ •

.... ==

'"Ir1

'"ooooo

....

M

eno

....

0-

~Sf~J:~~t.!il(k!lflitI; .:.·.,...." ...,;.U.i!1.

"

1'1'1

er- e-o

t'I I:· .:>,. I ~.. ..

e,,: meoeoNe=

-.-

I

......

....

... III

~II U--'"

C'lI5~~ O,....,IIC

•

• -ill<

I 1IJa::.!.g .OC

10z':. C' 0 ... . • zL l:_

:Z ...

'0

... . Z::J ,CJ

• "0. 0;. ~.'

.-;-
CLINTON-GORE '92 COMMITTEE

PAYROLL ACCOUNT

PO BOX 2741

LITTLE ROCK AR 72203

"CCO\J~'" NVWlta.

008941-915-9

JTAT"Ott.NT OAn

01/31/94

'ACt S'\1l1tlU

1

8

SPECIAL HANDL WORTHEN'S VISA OR MASTERCARD OFFERS JUST ABOUT THE LOWEST

INTEREST RATE AROUND - ONLY 8X! ·APPLY TODAY AT THE WORTHEN

NEAREST YOU. OR CALL 375-BANK OR 1-800-477-2264 .

• • • • • • • • • • CHECKING ACCOUNT SUMMARY ••••••••••

YTD INTEREST PAID

.00

c

.~.~.-..

~"J'"

PREVIOUS BALANCE .00

+ 7 CREDITS 7,665.62 8 DEBITS 7,665.62 SERVICE CHARGES .00

+ IHTEREST PAID .00

ENDING BALANCE .00

••• * * * * • * CHECKING ACCOUNT TRANSACTIONS.

________ tt~_OSH~_ANDJ)Tti~~CR~DIT~ _

DATE •••••••••• AMOUNT.TRANSACTION DESCRIPTION

01/03 1,210.04 ZBA CREDIT

TRANSFER FRO" CHECKING ACCT 0089419162

OliOS 669.54 ZBA CREDIT

TRANSFER FROM CHECKING ACCT 0089419162

01/11 387.68 ZBA CREDIT

TRANSFER FROM CHECKING ACCT 0089419162

01/13 1,210.04 ZBA CREDIT

TRANSFER FROM CHECKING ACCT 0089419162

01/14 1,154.37 ZBA CREDIT

TRANSFER FROM CHECKING ACCT 0089419162

01/24 66'.54 ZBA CREDIT

TRANSFER FRO" CHECKING ACCT 0089419162

01/31 2,364.41 ZBA CREDIT

TRANSFER FROM CHECKING ACCT 0089419162

CHECKS

i

I

..... '--'-'-1

!

I

I

DATE •• CHECK NC •••••••••••J.J:;CI.ilOT uATE •• CH:CK HC ••••••••••• AKotmT

01/03 4795 1,210.04 01/05 4819. 669.54

01/13 4804* 1,210.04 01/14 4826* 1,154.37 01/11 4806* 387.68 :'r 01/24 4827 669.54

01/31 4811* 1,210.04 01/31 4830. 1,154.37

* • * * * • • * • * CUSTOMER BALANCE SUMMARY •• * • * • • * • *

DA TE •••..••.. BALANCE DA TE .•..•.••. BALANCE

12131 .00 01/13 .00

01/03 .00 01/14 .00

01/05 .00 011Z4 .00

01111 .00 01/31 .00

:::-.--:,.':'....... -... _ ... _..... -. - _.-
, , ------.,,------_._--- .. ,_ _w~,... . .. I' ..,.• _.... ..- -_.••- - ••.. _ -~ -. -,_.

'..

•

4806

12/1/93

"'OOOOO~8?b8'"

~Q~~~ u

AMOUNT 387.68

WOIllMU IIAnolUlL aAIllt

lJ11'UI flOCK. NI n:aoa

11-7...

i

"00..80£••• 1:08i!OOOO?31: OOaq.. ...rUS...q..

CUNTON· GORB " 2 ,COMMITTE!

PAYItOLL ACCOUNT

PItON' (elll) 1r',IIea

'.0. IIOX J741

LITTLE IIOCK. All 7l2Oa

,

~:~ three hundred e1llhty .eveR dollu. endo6)6~~'\l,)\)"'Z'a~~V-:~I1"Z~"'CJ,...---------

CftlBIC1I . Janie lCearney

2217 Vancouver Or.

LIttle Itock. Alt .)2204

:'

"

·.. ··f· •• .••• '-'''' _~ - - -" _•

.h

ilIl " '.

.

" '

.", .,

..

t, .:/?,.. I.,

'.. ,',

"'*~ x'.,:

:'r~

.. ,

;I.r

~:.

:t.

ii

~,~,

'jl,:"

;j;.

i:JI,

.~;:

'f:;j

,.

f

',:::

s: \i, 6 I , I

U ,t

:/,

.:': :;'

.~:.

:5

1

;:.

)r '

\,; :'~..; (J

i .. ,

..
•

WORTHEN

N.lTIONAL BAN~

OF AU.lNS.lS

P.O. BOX 1681

LITTLE ROCK I U

(501) 375-2265

72203

CLINTON-GORE "2 COMMITTEE

PAYROL L ACCOUNT

PO BOX 2741

LITTLE ROCK AR 72203

A.ce:'\l"" l ·,,"';tl~

00~'41-91S-' : ::I~.mctn· ~'.!1

02..119/93

~~-­1

26

SPECIAL IUHOL

EFFECTIVE MARCH 1, 1993. NEW SECURITY CODE TO .lCCESS 24-HOUR

TELEPHONE BANKING. PLEASE SEE ENCLOSURE FOR SECURITY CODE & MORE INFORMATION ON THE CONVENIENCE OF WORTHEN'S 37S-B.lNK .

• • • • • • • • • • CHECKING ACCOUNT SUH~.lRY •••••••••

PREVIOUS BALANCE

+ 3 CREDITS

26 DEBITS

SERVICE CHARGES

+ INTEREST PAID

ENDING BALANCE

.00

15.653.22

15,653.22 .00

.co

.00

YTn INTEREST PAID

.00

•• * * •••• * CHECKING ACCOUNT TiANSACTIONS M M M

. -. II • • •• *

." .. -.- ...

.;:'.

DEPOSITS AND OTHER CREDITS

DATE •••••••••• A"OUNT.TRANSACTIOH DESCRIPTION

02/16 4.a37.2a ZBA CREDIT

TRANSFER FRO" CHECKING ACCT 008941'162

02/17 6,102.79 ZBA CREDIT

TRAHSfER FRO" CHECKING ACCT 00a941'162

02/18 ~.713.1S ZBA CREDIT

TRAHSFER FRO" CHECKING AeCT 0089419162

CHEClS

DATE •. CHECK HO ••••••••••• AHOUHT DATE •• CHECK HO ••••••..••• AMOUNT

OU17 Y;.f1 502.71 OU18 4384 191.6S

02/18 4cr6S 1,267.34 .02/16 438U 397.71

02/17 '''366.-, 1,538.4'; 02/16 4388* 672.67

02/17 4373* 1,344.04 02'16 43ln 553.Z3

02/16 4374 463." OU17 4390 764.02

02/18 4375 856.86 .02/16 4Ht 495.&4

"'-""! ~3"S c,. "'~ -e:/~e e. ....~3'!.· '=:·3.1·~;: oi/is . 4377 ;i3:H OU17 4394 311.&3

02/17 4378 554.10 02/17 4397* 204.30

OU16 437' H3;n OU16 4398 30l.i?

OU17 4380 &83.33 OU16 4399 361.30

02/16 438l* 175.0Z OU18 4400 "90.13

OU16 4383 500.'4 OU18 4401 138.52

* • • • • • * • • * CUSTOMER BALANCE SUHMARY ••••••• * •• DATE ••••••••• BALANCE DATE •••••••.• BAlAHCE

OU12 .00 02/17 .00

OU16 .00 OUHI .00

.-- --.,,:,,~-- -._ ... - .......-
- - -.

... . . ~~.

: ;::"~.:.

- ..

"

D"

!

U'I

-

D"

!

..r -

D"

co

o

o

--

••

-. '". C'- :

O'

0: O'

o

'"=o

••-

!I

;i

~~2.. c"":' ZU.:. o. zc

...

=....... c .. 0-

....

; i

-----. ._----- . ---_..._-

..;.

, . ,

,

I

•

!

I ;

I

I .

I ;

I ;

• I •

I •

I I

I

I

I \

, ,

.I

! :

•

Ii

I I t ,

U _ I

I .

I :

q
. .".:,::;:"

() c () / () I 9 .' 6 J , ; i ) , .. i " .. ,

,,','

.'./.'

...•-"-----------, .:

"_.- _.---.------ - -_..-_...• -.. ' .._-_ _.- , -.. . '

.... .:.

~\

.'

CLINTON - GORe •9 2 COMMlnEE

'AYIIOlL ACCOUNT

'HOHI (eol) '7"'"2

',0, lOll .n,

lITTLI "OCK, "" 7J2OI

WOlnH.N NATlOHAl UHK

LITTl. lIoeK, All mOJ

",1-120

,.,.._----._,..-.--,

4393 :

,

02/16/?3

I

1/tOzulldJdili;- I

':OSi!0000:?31: OOnq1d'''CJ1S... q.. I ".0000031315 " "' ' - -' , _..,_.- _ --.__ --~ - - _.

::... :

,',

J,'.

::'

.:::

...•.

.....

~f ··:..i·

'.".'

,~..

I \

'"

..'

..' ......

t~

:~::' ,;..

PAY

TOM

0IIl8I0I'

••••••313 DOLLARS AND 1~

Tho••• C. Walton

11417 Ethan AII.n Dr.

LItt 11 Rock, AR

"00a.3 IH"

CENtd' br.:'i.',)(; (.~.::

I

II

:l.\:.O., ••..;... .... ;, .. <:/;. I- 0~,' '.~ ••i.313.

• I

.. :.'

::.':

" ,

,'.... . ... ";'::

,'"

','

....

. ~;£'" "'.' ~" , ·i" ••

iii I ~l, ,

J ~~, /.

"1 .. ~.

·N.

...'

,!i

,',

xi

".",
•

WORTHEN

NATIONAL BANK

OF A.RKANSAS

P.O. BOX 1651

LItTLE ROCK. All

(SOl> 375-2265 72203

YTO INTEREST P.ID

.00

DATE .. CHECa: NO .........•• AMOUNT

11/05 t,794_ "9.54 11~16 479'. 761.3'

11/18 4797 "9.5 11~15 4798 1.a38.'~

11~2, 47" 1.154.37 11~,4 4800 8S'.a, 11/26 4802. 80.1'

1.Z10.0ft

304.55

495.84-

1.057.2'-

1.210.04

1.188.3'.-

1,210.0t,

CLINTON-GORE '92 COMMITTEE

PAYROLL ACCOUNT

PO BOX 2741

LITTLE ROCK AR 72203

4c:eov'u :;.".;::,..'t:

008941-915- ~l;:~~:"e

1V30/'3

-It;- NVtP:lff

14 1

SPECUL HANDl -EFFECTIVE J.NU.RY 1.1994. OVERDR.FT AND IHSUFFIC1EHT

FUNDS CHARGES WILL BE CHANGED TO t19.50 PER ITEM.-

• • • • • • • • • • CHECKING ACCOUNT SUMMARY ••••••••••

PREVIOUS B.LANCE .00

+ 13 CREDITS 11.'06.88

14 DEBITS 11.906.88 SERVICE CHARGES .00

+ INTEREST P.ID .00

ENDING B.LANCE .00

• • * • • • • • * CHECKING ACCOUNT TRANSACTIONS •••••••••

DEPOSITS AND OTHER CREDITS ~- -~-- ------ ------ -- - ---------- -- ---

DATE ••••••.••••HOUNT.TRANSACTION DESCRIPTION 11~01 1.,10.04 ZBA CREDIT

TRANSFER FROH CHECKING ACCT 0089419162

11/02 495.&4 ZBA CREDIT

TRANSFER FROM CHECKING ACCT 00a941'162 11~03 1~1&&.31 ZBA CREDIT

TRANSFER FROH CHECKINg ACCT 0089'1916, 11/05 1.7,6.83 lBA CREDIT

TRANSFER FROH CHECKING ACCT 00&941'162

11/0' 304.55 lBA CREDIT

TRANSFER FROH CHECKING ACcT 008'41'162 11~12 1.'10.04ZBA CREDIT

TRANSFER FROH CHECKING ACCT 008'41'16, 11/15 1.03&.'4 ZBA CREDIT

TRANSFER FROH CHECKING ACCT 008'41916, 11~1' 761.3' lBA CREDIT

TRANSFER FROH CHECKING ACCT 008'41'162 11~la 669.54 ZBA CREDIT

TRANSFER FROM CHECKING ACCT ~08'41'1', 11/22 1.154.37 ZBA CREDIT

TRANSFER FROM CHECKING ACCT 00a'41'1" 11~24 aSC.a6 ZBA CREDIT

TRANSFER FROH CHECKING ACCT 008'41'16, 11~,' aO.16 ZBA CREDIT

TRANSFER FROM CHECKING ACcT 008'4191', 11/30 1.210.04 ZBA CREDIT

TRANSFER FROM CHECKING AceT 008941'162

CHECKS

DATE •• CHECK NO •.•..••.... AMOUNT 11~01 4750 1l~0' 47'2.:

11/02 4763 5li?o

11/05 . 47". ~z..1>~ 11~12 4774_

11/03 .4783* U;oT 11~30 478511

c
.-

.. *:.::-

i

. !•t- --------

_

... o

".

I'"C>j<

II ..

~N> =- .. • NO" • • N'" • ::- N"

...

• =- ::l ...... c:

. ClIl ... ::l .. co ll. o ... t'" .. :I •

Cl.

>

z- .... t:I ":J C

CO)

a c: .. .. .... NN" eo-a 0 0 ....... ... w :I .- .... •..a

--- ------- ------a __

:I

0.

oo

Cb

.a

,r

...I

.a

...

U1I

.a"

iE"-

""0

"'0 ""t . t

or.

~:

t

0

1

rOt (\I:1

01

I\ll1

01

I\ll

J:I 0 1I

.... rJl o nil • 0 1 : 0 0'

• 0 VI: I : I 0 I '00 r 1 "- :I "- ..... 1 '00 ! . ~-- .. __I:... ~_..~.- -- --

.....

--~._------ o"o.-

••o

Cb

l'\I

------- ------- --1'-- -0o . ... ; 0

'~"'" .::,,:..~:.. " ! '"

••-

- - --- -----------------

c

c>c

~~;;: ,- ':":'j.<.~:: ':'. ;::':·...I·~::.,::~::~:;:~·_;;~~:>_:"~);>~. ~"-'c.~'~~){":;':'
I:J

;, ,..,

AMOUNT I, OS 7. 29 '

PAY one thouland f ift Y .even dol'lu'. and 29/100---------------------------------

m~ I

_Of John Toohey o.o"o,",,"e? Oil,\ Oit"liL& ott.. " it'it. 091

~B04 Herton Court

Ale ••ndria, VT 22311

CLINTON - GORE "2 COMMITTEE I

PAYIlOn ACCOUNT

....ON. (101) 112,1'"

".0. lOll 1141

LlTn. Il00K. All 1220.

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

•(

\

I

WOllntlll NATIONAL lANK

lmll Il00K. All fUllJ ...,... 9/27/93

- 4169

!

.~

'"'l CD

lI!J

~~

...

~OOI,7~q~ ':08l0600?31: 008q~L·qL5· 'OOOOL05?Zqt ,. -"',,__ _t _... I ._._ _ -.- ----- -

•

........ 'W

li":~ ,

,I.' ' ;~ '~ l.~ . 'I. \, .' . ,

.'i-:~

:;;;

~:' ,I

.'A· .:'.-.

'/'

,~

~{

,;~ "p

~h .f

.;

/.,.'.

'"

::~

• «

f

A

r.: • I / I f ft-", , L ... LJ \) \, '.t:"1 \) ". ,

.. " "
..

.... _---.

.~.

....1 .... 1

"'I C=. c=j

.....

....1

01OJ 0, o

.....1•I!

••

- J rft

C'- ooooN

c=o

••-

,,-

rr!

U'I

...

rr!

....

oZ'

rrc=' oo

IIIIIIIII

f'JI

r'

t".1' i<'" P

t-, I

r'

c~

a) -

..

-;."

...

..

>- AI

-it

...•

."•..

."

c:

oS

....

co

co

-o

"

rft

c=

C'-

• c: oZ

c:00l

o .. 0 •

-\7 ::= l- i

;l

-:e it

i ~~II

j ~IIII .. 1'-- ....1.1 .... '.; .' ..

~-~ -----t------·

I

•

....:~

c-

~~n ~'-::;:;:~'" :.:..0;

!f'
rnr ~~~T~N~AJ{iEN l!!!J ~!\ ck. AR 72203

( In S·2 63

CL IHTON-GORE • 92 COMMITTEE

PAYROLL ACCOUNT

PO BOX 2741

LITTLE ROCK AR 72203

ACCOU>tT PII1><UIl

008941-915-9

STAT'U<V<T Do.n.

12/31/93

'ACll'iV'OtIl

1

18

SPECIAL HANDL PLEASE READ THE ENCLOSED INFORMATION ON REVISED

DEPOSIT ACCOUHT FEES AND SERVICE CHARGES EFFECTIVE

FEBRUARY 1, 1994. FOR HORE INFORMATION CALL 37S-BAHK..I • • • • • • • • * • CHECKING ACCOUNT SUMMARY •• * •••••• * ,

PREV IOUS BALANCE .00 + 11 CREDITS 15,386.59

18 DEBITS 15,386.59 YTD INTEREST PAID SERVICE CHARGES .00 .00

+ INTEREST PA 10 .00

ENDING BALANCE .00

*-JLJLJf--··_'--.--.-CHEC~-INS--ACCOUNT-TRANSACT! ONS • • • • • • • • •

~- DEPOSITS AND OTHER CREDITS

DATE ••••••••••AMOUNT.TRANSACTION DESCRIPTION

12/07 2,315.55 ZBA CREDIT

TRANSFER FROM CHECKING ACCT 0089419162

12/08 913.91 ZBA CREDIT

TRANSFER FROM CHECKING ACCT 0089419162

c: 12/09 1.210.04 ZBA CREDIT

TRANSFER FROM CHECKING ACCT 0089419162 '- 12/14 1,154.37 ZBA CREDIT

TRANSFER FROM CHECKING ACCT 0089419162

C' 12/15 1.370.94 ZBA CREDIT

TRANSFER FROM CHECKING ACCT 0089419162 , 12/16 428.42 ZBA CREDIT

.n ., TRANSFER FROM CHECKING ACCT 0089419162 :;';;"."'::"'::"~;'~: 12/17 1.672.89 ZBA CREDIT ,':.~"

C· TRANSFER FROM CHECKING ACCT 0089419162

12/23 764.02 ZBA CREDIT

TRANSFER FROM CHECK INS ACCT 0089419162

12/.~~ANSFER FR~~8C~~C~¥~Gc~ggfTw089419162 12/28 2,011.23 ZBA CREDIT . . TRANSFER FROM CHECKING ACCT 0089419162

12/30 3,116.80 ZBA CREDIT

TRANSFER FROM CHECK INS ACCT 0089419162 -.L.. I< ~Aa....

CHECKS ,+7~ IJ.,. Jo.£-~ . q -,-~-cn 1"lo1 10 • - _._._(

iI· DATE .• CHECK HO.·A.· •••••• AHOUNT DATE .• CHECK NO ..•••...••. AKOUNT

12/08 .' . ~784 '.,etr·· 913.9~. 12/17 4814* 500.79

12/09 4792* 1,210.04 12/17 4815 502.56

12/07 4803. 669.54 12/23 4816 764.02

12/07.. ~~~-S""2=~...l,~~. 9 12/16 4817 428.42 .l2L07_»7 '~allJ:;' __ ;r",,- - 12/24 4818 428.42

12/1S·a:·r. . - .r~. 12/28 4821* 1,154.37

12/15 856.86 12/28 4822 856.86

12/17 4810 669.54 12/30 4823 1,558.40 12/14 4812_ 1,154.37 12/30 4824 1,558.40

MEMBER FDIC MEMBER WORTHai BANK!NG CORPOP.ATlCN lTUC%,lJT. _..:."f-+;77""l_- p~ -",,_:t _... 1/"9' 7
three dollar. and 79/100---------------------------------------

4t

U/l/i3

10000 110:' ?lll v

AMOUNT 1103.79

______:~/l~/JA., Q9~

WOllTHIN HAnoNAl. IIAHK

urn. IIOOK. All 7ll2OI

II·Nao

.:oa~OOOO?31: OOaq"1-q15·q~

\

\

hundred \

\

O~129

\

\

\

\

,·oo&.aos.-

'.'

.,

'...

\

,

CUNTON - GORI! '.,12 COMMITTBI!

!'''YIIOLL ACOOUHf

mOHR (eo.) ~.1I.lIm

1'.0. 1011 1741

unl.l II0eK, '"' ,..

!

PAY onll thouund ooe

TOM

0NlIII0l' Hatt O· Neill

23 Cro... Sr; •

CIl.rIc.town, HA

................'......,."" ....... ' ..... I

._-------------!-----_.

.

•

I

\

I

I

".':." .."..'

~->,

;~ ,

.':"

\

\:

\

(

I

\,

I

\

\

:j' . ":.. , ..

.:~ ,./

·Il.

•Ao;

.~...

'''~ I"';:.

i,:.

..f

J

.::':

':-j

t

:\ 'I, (' 'Ii 6 \ D I

..~~

u ~, I)

..

',1,
.:~

:.

.~..:"".., ::

o"or=r

"L

••-o=N

;0ooo • UI

••-

,I,,.... '0'01 0 ;0

10,.0

I-• YI ;.0

i-

....

~,'

I

I~ ... I:I

i?<

I

!

=' (')

· t: ... ... =' !i ., :

.

•

•

!

0

" :T • C(. :l :l

Z

0 ...

Q, :!~.

•

=' Q,• -,

~c=Q ZlIIO

:l ~O"C::a

'<•

::r" 0-,. SF III ... • ... )C ....S tD " .=:».;:0 .. N •• _.:.c n

='

ei !!i

i

o i: ...

...

a

•...•

III

- --- ..

;

='

Q,

>0

....-

l

8- : I

I I

I

n

,I 11 .. I

~J

I ...

:I

I

•

I

oJi

tI

I

i:

tI

·;

,

*~

4

I, · I , J I I I

ItOI . 0 II II I .J 0 I I

• I I 0 ' I I ! I 0"lf'.J I >0 ... • I I II -I e:::> (:lL II -oJ~ I, .... ,I O"l~ I .A' \01 ,, bo -oJ 0 -.I I 00'" (I) II

~o &0- .~

lTTJ.CB:!!E'.'T

f

Page_ 'Zt::; )0

>
-... ...... -....._-... _-._- ... _.~ ....-- .' .-_... _....__..._-....._.._-_... _-_.-.._- ------_._-----

CLINTON· GORE 'e 2 COMMITTEE

'ATllOLl. ACCOUKf

'"ONE (1101) m·,ttz

'.0. lOX 214'

UTT\.E 1l0Clt. AA n:m.

PAY five hundred fourteen dollars and 08/100~--­ 1VnE

OfIlBIOF Michelle nay

66 ll.o<:kcrest

llockv11le. MD 20851

"'Olm4EM lolAnONAl. s..ucx

unu 1l0Clt. AA 722llS

".1-«20

• :=:'$ ~.;~ Cc~~? ~~ )?~f :.;~.t9:! ~9

~-Z; ~~:.\ ':!:-\.:E

4aOE

. 12/9/93

- .

-_...--.- ..._-----_.....-..---...-._--.__.---------...------._----

~.

........:;~..:....-._.

. :.

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

,

!TU~_ 'I . Page at ZiZ
;.1:;"'£;1

;-..;. ~!."~,,.

CLINTON - GORE 92 COMMITTEE GENERAL ACCT

PO BOX 2741

LITTLE ROCK AR 72203

ACCOC,.". N'CW'U

008941-916-2

IT..TU<L"tT D4n

06/30/94

rAct 1<\.')(10.

1

23

SPECIAL HANDl WORTHEN'S VISA OR MASTERCARD OFFERS A lOW 8.5X RATE (APR)! APPLY TODAY AT THE WORTHEN lOCATION NEAREST YOU. OR

CALL 375-BANK OR 1-800-477-2264 FOR AN APPLICATION.

* If If If If If If If If • CHECKING ACCOUNT SUMMARY If ••• If If If • If If

0.=..

YTD INTEREST PAID

.00

DATE •. CHECK NO ••••••••••• AMOUNT

06/15 12971 10,160.88 06/15 12972 164.10

06/20 12973 1,080.93 06/15 12974 535.41 O';~~ 12~;7~ ~"a~,'e 06/30 12979. 925.50

06/30 12981. 1,785.58 06/30 12985* 41.38 I

06/30 12989* 394.00

06/30 12993* 155.00

06/30 12999. 877.53

~REVIOUS BALANCE 34,239.76 + 9 CREDITS 138.907.39

23 DEBITS 43.223.18

SERVICE CHARbES .00 + INTEREST PAID .00

ENDING BALANCE 129,923.97

; If If If If If If If If CHE_CKIHG_ACCOUJolT TRA~SACTIONS- If ••--.- •• If. If ------ ------------------------

DEPOSITS AND OTHER CREDITS

nATE ••.••••••• AHOUHT.TRAHSACTIOH DESCRIPTION

06/01 379.80 CUSTOMER DEP.

:6/01 30,276.93 CUSTOMER DEP.

·6/08 129.00 CUSTOMER DEP • .6/08 375.53 CUSTOMER DEP.

6/21 15.51 CUSTOMER DEP.

6/23 4,724.08 CUSTOMER DEP.

16/28 100,000.00 CUSTOMER DEP.

06/29 2,294.78 CUSTOMER DEP.

06/30 711.76 CUSTOMER DEP.

CHECKS ~Q"!~ ~~:~:~; ..~:.::.: . DATE •• CHECK NO ••.•••••••• AMOUHT

06/10 ~~~~ 7,687.45 06/17 12814 95.80

06/01 12943. 19.79

06/01 12946* 12.58

06/17 :~9<'8. 2.9l! • '-06/13 12964.. 50.00, 0~/01 12965 8,133.39 06/03 12966 715.71

06/02 12967 1,080.93 06/02 12968 159.00

06/24 12969 666.84

06/06 12970 797.20

If If • • If If If If If If CUSTOHER BALANCE SUMMARY • If If If If * * • If *

DATE .•..•.... BALANCE DATE ..•••.•.. BALANCE

05/31 34,239.76 06/17 35,785.80 06/01 56,730.73 06/20 34,704.87 06/02 55,490.80 06/21 34,720.38 06/03 54.775.09 06/23 39,444.46 06/06 53,977.89 06/24 38,771.62 06/08 54,482.42 06/28 138,177.62 06/l 0 46 , 794 • 97 06/29 141 ,072 .40

06/13 46,744.97 06/30 129,923.97 J.T'r.AC-;;V::h~,__"""b7"'"

06/15 35,884.58 Page '-'7 ~EWS:" w~;:;7",;::H B'\Hi<U,G COilllO:v.T1Cl-l
I.I,IIIItII•iI

II

IIIII <&

\10 .' 0'- o

...

z:- .

..-.-

QiS~

~i"<..

..

..

..•

..

..

..

..

..

..

..

..

..

..

..

..

..

....

....

,..

'<

e-o

....

.... •... a

:J•

C.

-0- ------ o

.....

.... oo.•..••••••••

.'•,.

,.

,.

,.••..

,.

,.

,.

..,.

....

..

..

..

..

..

..

..

..

..

..

..

..

..

..

..

..

..

..

..

..:

..

"ooo

.0oo

LI1 ooo

....

1e5 ...

l~

I~

••

••-o

,=

.!i~ ---- i- 0----- :0...:

I~!l; 1.0

I~

11

..

lf1I

rv"

-...

~~'";-t.:;:~;.~,:~!"~

~...:.-~:-,:. "?'.~::~ :.:*O':::~· ..::t... ~~...~~:;~::;-:::.. :~~~:~":...~~~~_.~ :~~~~~'::::~-'

'-
c

-. - - - - ~- --

STALE DATED CHECK

Clinton/Gore '92 Committee

Check 13374 was reissued with check 113181· dated December 16, 1994.

This check cleared the bank on Januarylq, 1995

•

ATTACn'· If 7-

Page c~ a..
Re"bc_ellll Chtlck 'or Ch.cll ,jJ74

,

I

I

I

I

I

I

I

I

I

I

I

I

I

I

I

I

I

I

I

I

I

.. . - CLlfHOfl - aOJU! '{. 2 c.or/IMln::::.: , _ -_ __ _ -- ..

$305.6:1

1:JJ. 0 J,

u

"'l GI f< ... f< cd ,....11-

I

I

I

I

I

I

I

I

I

I .

,

I

I

I

CLINTON·OOAE 'f) 2 COMMIHI!! • 1'1t01l1 (!AI) 'U·l~O'l

r.o. OO( au I

I"Il" 110C,.. I'll IU1:'

WOantllN HAll0NAL tAt/IC

L1J1 L' noell, Itn 12;10)

.,·7 ..0

1J10!-

t.l'i: .. W &" t:m~ 1"'Jr,\, .:'.,~ ooatl.. '''''l H,';, ?:"

-

.'.....~"~, ... ,.,...... ,.._:....,... I i! '."I!'-~ ;-:. "~i"?-'--! ±n 1. ....1.-,""'l-, _d ------------ •• • __

$305.'"

fJ,UU IIMOVllr

D••e~b.r 16, 1994

"'0 51Q1U\1Uilii nlQUllltO II" 0"111 "0"."

._..... .." .... . .......-_..-..._._-_.- ~IM~~I!JE

Jill Alper

121H Unddocll Ill'ad

Apartment ~U

~lex.ndrla. VA 22314

I

I

I

I

I

.... ""'"""""""""""''' ..'''1·hr•• hundred ,.". dolbr••nd 63/10n'••"."'''''''''''''''''#l#l~''''#l"*''''uu""",,,*,,",,uuu,,II

I

I

I

I

I

I

I

I

I

I

rAY

lOnl1.

001)111

I

I

I

I

I

I

I

I

I

I
JA,.I{-24-9S T\l£ 17: 03 UNION Hl\T10HAL BANK FAX If:). 5013751023 P. 02

r,..::~ 01/~4!9S :~ A':':~')~IT MT:HOR':' 15.46.40 ~AGc. J.

000-COO-OooO-~Oe9hIS16~

CNTL2 000 CNTL3 oeQ ~NTL4 0000 ACCTN 008~41916~

35i.1 2!30~ 0047

202 2301 ti 004 I

e •.

~.

..-. -~.~.' --- . :--" "-;." _.:: - ---

."ll"l'JI'NT oe: ~.-:R I,:lTION /SOURCE

1;4.66C~ aDA C~ECK

::: GIJR':e : 00000003' , 0425..

~'S.34CK ODA ~I;ECK

SOURCE: 0000000221011i3

~"~.9;~K OOA CHf~~

$OUR~€: 000000025002896

305.~3CK DCA CHECK -:·OI.IF.~E : 000000025002895

:O~~.il~K DDA CHECK

~OI"~C~: . 000000020305456

scs.ooc~ DOA ~HeCK

~QU~~;: OC00000202~361S

1 .J I .0 H:C DCA CHECK

SOYRca: 0000000~IS24094

s~,.~aCK DCA CHECK

ZOUKCE: 000000035421605

~:.o T~AN

SO. (.OOE:

4~~<o 00.. ?

" 33 0041

~9S6 Ol.i41

28S5 00107

64S5 00'

,1

P!=2 - PAGe: cKlIlO

203

:?50

SE~1M PuS T eA ;':1;

~UMS~R OATc NO. 13~10 01/17 311

13~14 01/11

131ao o Ina

,'J 3 ~.a t 01/19

1 n1S 01,'20

132 19 01/20

13189 01/23

.:-:-' 13::16 01/23

FlFl .. !=oA'SE FWQ

. ~.' ." k"_. .. __ "

, .

. ,

:. . :~

.. ".~ -.

'\ ~,-:'

'. t·

'.

. ,- : .. '; . f.

'..-- ;..... -::; ".. : _4./~~~ .. .: :,.,:....~.-.•':-_:-.:.o1._·o.·'.·.'" . :::.•;-'.~!.-..:. - _ 0-

. .\. ~_: '-.",:' .,",:-.
STALE DATED CHECK

Clinton/Gore '92 Committee

Check 11278 "'as reissued "'ith check 113180 dated December 16, 1994.

This check cleared our account on .:ranuary,q, 1995.

J.TTAC~_ 'I '1

Page .-L.i:I= ot 79
0,

t.

I

t

t

I

I

I

I

I

I

I

I

" o. _. _ 00 Hoi 0_ •

Cl.INTOU· Gom: '\.I:! COMMln '..:r. I

!

I

n.."hcernent check for Cle , 1,278 $942.97

1')180

I

I

I

I

I

I

I

Ir-- I __CLINTON· ----------r----------------. aORB 't 2 COrJIMIHf.1! II WOIlT"11l ,I""ONAL 'Alilt II

I PilON. (DO') 371·1101 , • L1ffLI flOCK. Aft mo. 1310!) I roo. IIOK 2741 ".1-e~ • I

I 11111 E nOI;I(. 1'.1' 121U' I

I I

I I

I I I D"CeNber 16. 199~ $9~2.97 I

I I I PAll! ,\MOUIH I

I t I PAY uuuuu",ulHne hundred forty-t." od<ll1.n end 97/100'.__ ""'._.""'_""'u."",u uu_uu_,,*u I

I lUll. I

I Offllin Jill"Il,er I I

I 01' 1201 haddod Itoad : TWO IIGUATun•• lIeaUIAID I' ovan ,~oo... I

! ~~:::~~~~n~le" 22314 ! ...... 'iMmlNllE~~1r~~[M'--" !

I I

I 11"' :,~, '·I'O~· ':011 ·'f.'l'f.JO '/31: O(lorll, :,'M'lI'b'lI ZI,I I

f t. , t,. S ()
STALE DATED CHECK

Clinton/Gore '92 Committee

.

,- '

Check I 4719 ~as void as there ~as a printer error. The check ~as

never released from the accounting department and has been in the

files.

\
g

-T;

::J=:n

. -l

':)

..,

...

..,

,.,

.

. .,

•

·

\ ': . :-• , , r . , -"

.:

• ,.".,

:'" •"':.

. ..

--;

--~~------;;'1

":-:

••1

...; ..

.-' '.' - "

(7',.•

•

-

-so"

'

'-•••-

o!;.

; :~

-'

.. -j 'J : w ::J ;,

........ "" - - "; ..e;, -- ..: :J

.":"'1, '1

.;'

ii

-.

~.I

- 0! j~ j I 2; . 8z

l'I

0I

i

l!!

z.

'"1

o

!!

I)i

:a:

:a!c

!it

lioiii

-

EI":I i

"" j"i IIIIII

..•aar

-;J -

"i

II ••-• a ij

""=

!

aa

,

0

I

0 ___ 1 -;J 1 I,l.I I ••-I 0 I 0 ,I =Ir-I

" ,,." ' •• > r

ATTACliYE1IT _i-----

:'age 75 of /iZ
c-·

STALE DATED CHECK

Clinton/Gore '92 Committee

Checks # 1088 and #2258 were voided and returned by the vendor as

the Committee's accounts were paid in full.

•

lTUCliYEJLTl ~#7 Page __OJIt:t c'!: .AZ:.......L<--l__'-
mieritech .......... --

October 14,1993

Cathleen Cavender,

Per our conversation ofOetol>er 12, 1993, I am returning two outdated checks from the

Clinton Committee and Clinton· Gore Committee. After checking the status ofboth

accounts, I found aD charges paid in full..

Listed is a breakdown of payments and the dates, on the foDowing accounts:

Account Payments Date

'..n 217K096n4 2302.83 6-8-92

.. 217K096773 500.58 6-8-92 ,. 312443·1992 1726.75 4-23-92

Total 4530.84

The check in the amount ofS6380.00 is also being returned. I couldn't find any telephone

numbers for the press phones associated with this check. However. because there was DO

outstanding balance for this amount, I wiD have to conclude that this amount is paid in

full..

Ifthere are any additional questions, you may call our office on 312-750-6877. Monday

through Friday, 8:30 - 5:00.

S:__I., f ......... _}.

~~~ Stacy Harris

Political Accounts
.NTON· GORE '92 COMMITTEE 225E

~f. Inv. Number Inv. Date Inv. Amount

9680 62492 08/25/92 6.360.00

TRX DESCRIPTION: Phone Lines In Chicago

Amount Paid

6.380.00

56,380.00 ___._••__••_._ ... .,._. -_....._-...- .. ... "'_"_.' r _

--~-----

"00 2 2sa" 1:0820000? 31:

----- 2 2513 WORnfEJl N.1T101W. aAIOt

-UTriE-ROCK. iA-722IlS

81-7-1120

._-----.-

60606

---~------

Chicago, IL

Illi nois Bell

200 West Madison

CUNTON-GORE'92COMMniCE ------- ---Pli(JHE--<$lffJ372~-_-

,,-:- P.O. lOX 27e1

LITTU ROCK. AI'. 722llS

.----
I~tl 't :' '., I

I

i

, R.I, In., ••'~r lu. 011, lu. A_I hood :'114

'It '711'li •'7121"1 '.7..... 2.7".II

TRX r,£O::'~RIPTllllll "',·..n~ 1'"11 tOil Phn';.. in II

..I. U"

'.."

~?.7AQl.Vl"

~.

-4 CI> l'" l,' f-4 (,\l

"" p,

•'00 lOaa.' ,:oa WOOO,? :\': OOaqa. L'Mq H.·.. ~.,

1088'

DAn!

071?1IQ2

Gh lCOIqo•

CLINTON· GORI! •• 2 COMMlnEE

PHONe (1101) In·'''2

P.O. BOX 214'

LITTLE ROCK. All \ 12203

PAY

10M

OODEJI

Of

,I 6 I }

,

f I, ) c.' (-.I
.'

"

STALE DATED CHECK

Clinton - Gore '92 Committee

~Ck. 11745 -HoAloha - Printer error.

Ck. 11685 - Karen sullivan - Payee requested the committee to make

all consulting checks payable to her company, HoAloha. This check

was payment for the period 8-01-92 to 8-15-92 and was replaced with

ck. 11783 dated 8-18-92 .
1"(4

TWO IIGHATU"" "IQUI"ID IP OYl!" U ......

PAY

lO lHI!

0IIDlII

01

..... t'"-_

0-101-6150-000 ~Compuler 000.00 a,ooo.OO

0-10J-6151-000 poe

000.00 25,000.00

0-101-6152-000 G~I

"

"

I

Equip.! L' '8 W.P. Mal

000.00

25.000.00

DATI

.00

8,000.00

.00

25.000.00

o a,Qvo.

15,0

25,000.

1746

AMOUNT

f'

u I

oOll Q) I.-< !Il,

I.-< ,"

oOll n"

",

~OOL?~5~·I:0820000?i31: 008q~L~qL~~2~ ____. ._. -, _or--t, - _.._._- ~_ --J

,....

",

:.::. ".

;."

\' (; ~ , "" u /

i

.:,'

"

'I! .

, it \~/ .(," ; t)

';<;':.

.:

,
It.>UtJ

I~

<>

~~-4 (J)

::l'

.... '"

1686lt

.2,000.00

.******2.000.0~

AMOUNT

.;:::

Amount PaId

2,000.00

08/16/92

OAT!

II

Inv. Amount

I 2,000.00

Le.der

I

. ~!.'. \(lU~\.Y .~~ A\jyJ J -,- .y(;

'\i

,~

y.9':-

.~r/ La

~;"l \v1\'1,

ja. ''--_''_..• a...._ ... __._ .... _...........

I

t

I

l

I

I

I

PAY

TOM

, OfClEII Karen Su 111 i 802 Hokapu

I

I KaIlua. HI

I •

u'OO 11;8 SU- I 1:08 WOOD? :11: 008 q __• ~_. __ .-.__'_'.' __ _ _ •• I _ __._.. _ .. ••• _ •••

I ••• __ • .•• .. .... ..' •• _

.~; .. ',' ::::;:.

IR.f..,~ I nv. Number I nv. Date

• ~342 I 081592 08/15/92

! TRx'OESCRIPTION: We.tern Cluster 1

I

'. '. .....

:.> " .~

'.'

......:.:. ;':;::-'-:"

.

("o ) 1(,'\6

I

u f

'/

I /!!. Ci C, \.i;; 0,
·. '-, -:;.-'(fl 't :/l.J

C'LIBTOH POR PltSIDENT

;' ... New ltire / Papoll ChUlge For.ll

r/ New Hi::e d- 11c,! Title Change

___ sal~ C:lanc;e Qb Dept T':"ansfe::

_____ Pe::sonal !n~o Change ____ Wit~olding ~~ange

(

ft1

12fl, L

25'i/· - 2// f

/ 92

f)l2fN

LAfi

5t/LL/UAI

8 I I

F i=st Name:

_ ,'1

Last Nallle: 7'-

Middle Na.me:

?er:nane.':'It

Add.=ess:

". :-::. .-'

... y .....

-End- Da-te :-- . '.. '.af -

N~W -Dept/Title:

..""~,,,:

Old Dept/Title:

---------(- ----- 1--92 (it-priol;' to!:l73/92) .

nfl' I WI.ffrn'J (IvrltJ LtJltf?j/

/

'- Payrol~ S~tus: __ S&la..-y MonUly Sala.--y: .... S _

51(, - 'it 'J:

Socia~ Sec No:

__ itou=ll' Hourlv Rate: ....s__~_~. _

1 Consu.!.tant Mon~y :ee: -"-s__.;.:,!I.-F-r...;./)()..;;..::.o........:,,_c__ - 1

1355'

'Federal Tax ID: (if consultant)

E:mergency

Contact:

Phone:

"signature: :.- .

Date:

( fag 1 ZfLf -

f I f I 92

2//1
"

, ··-_.....~·tI

~,

.;:.

0:

0·:

OJ

. =I',;:- .-

..'

,.. ..,

,'I -j

=.::>- 'J - .... -..":;t •

f .,

- .' f1 -:. t ..... Z I - ~,

~., .~ .1.

.,i, .;. .... .. '=' ::; .- '.. <: :.~ ~.

I:l '-, .... ::"

.;, .~ :. =".' .- 'I .l C

.~

------~--

.:'1

"o

I

,;"

!1_bJ~t. • 1 • "01

,;)I

'::>II

.,-

,....

-0:!S.. Z.. ~~: ' ... > -:-"':1

e~O °:OZ

it• .. ,. 8z

'"

It

If

..o•:D".

-------- ----

., ..

.;

,... :l>

!! .:::

,

.'

C

.\.

- ::':' :

c.. :: .-, .... " ..... :~ ,

;:.

.'

.

::-

:::;

.:;,

,:;.

,")

:-.

.... .

,J

'.,

a0

cg: !!g

..

<:

:a

cg~

"•

:a ffi; c• @. <:

:; §j ...

<>

:;

~I li '-

@! .. ~: ..8

!'"

II ..- I

,.

.....

'-

,,-

...

r----~========.::.:;-------- ----------.. -.-----

"

·-1,f!

::.,."

;f

.:.:::: "":JI, ------ ----- ,I ¥ • J

'~'!lZIi@"•

"->

,-~

~.,

)
-; ..

'0

STALE DATED CHECK

Clinton/Gore '92 committee

Check I 5311 was reissued to the vendor with check #12562. This

check was returned to the Committee on OCtober 8, 1993. The vendor

noted on a postit that the rooms had already been paid and returned

the check.

iTTA""',!! - page~ ot -
BILL CLINTON • AL GORE

August 6. 1993

\o~~'h.~~~ Vendor Name

~""")a w·,\.\:....~ Q-e\

Address

~.~~~~.~\

In reviewing our records, we have discovered that this check is

still outstanding. Please check your records to see if you have

received this payment. If you have not received this check, please

contact the accounting office so that we may issue a replacement

check. If you are holding this check for any reason, please let us

know.

Thank you for your assistance.

Thank you,

Cathleen

~~~~ Cavender

Accounts Payable

J.TTACID!lHT 1

Page ? ~--'-of-2--""'9;J11'~~

P.O. BOX 2m • lJTl'U ROCX, ARKANSAS 722Il3 • 501·37>1290 • FAX !-ll1·371>-R..."96

l'-.W!.'r "!t 'M C/i,,'mtlVor< '!'2 C>mrlw":r r.,.j

Contn1>ulioM Ie tM OinlN'l/Con '92 Complla,," Fund an IlCl bx dtdu<libl..
..

'.

tlJII"=t! i ......." '-J,.".~.__ .

-'--'-'---i--~-------'--:-'-~~----'-

.....

-. ( I I. 6 .I (," ", S" ~-) " I v iJ ,/·'U·. (J

•

fI

-<4 G)

f'" ~l l-1 oJ .... p.
!iL....,UL

r ... &...,.,1 .........

Rlrf.•.•, Iny. Nu.bl'r

cU0B4 92492

TRK DESCRIPTI ON I Ad

0-_M,';l(

A&l.Y.()\,) "hlJJ,lI'

cJ-1\.(()..~ 1$(1

yx.u.cl blJ 1 .

Jny. iA-ount

2,390.04

hI! Fo~ DC

A.ount Paid

2,390.04

12,390.04

t.>-4 <II """" .d1',

CLINTON· aOnE '92 COMMlnEE ....0 ... (1101) 172·1ON

P.O. BOX 2741

LITTLE ROCI<. AR 72203

WO","." NATIONAL IIANK

UTTLI ROCK. Aft 12201

1l·7-e20

12562-

PAY

10ntI Shlrr.ton Burli

0Illl0I 870 Will iston.

Of

So Burlington,

"Ol~Sb~" .:08 WOOD? :II: I

I

,

I

I

008£1 .. L,,,q HI'" ~il'

AMOUNT

S' , ,

,

'-.

6 u / u <- •.J h
.' :'"

L0

(

:. .-. .

" .'

. .:.

.. .',

. "

::-

:0U-

~l....

.

f"'.

c.
Ul o (/\ .. c:-:

c:', s=. "(

.J

':-

0-

-~y-&Q 3:= ._. -~-

.-- r-- .

I -+-

-."

~JP~g "-

-'-i.fj

~-

+ -- ~'r'

vi

Ui

0:.>

,.

o- -4.0 -"

C

I -.

AI

.J ::D..r.. ('

I- 7'J - \ ...

(;"1

-;

-4-!

Q

'0

'=-<C

UI

.toC

..-

..-w....,

is

..- 0"0

-::4,

. 1•.0

....

......

lTTAC~i

;=,

:>:'

:c

Page of27
STALE DATED CHECKS

Clinton/Gore '92 Committee

Check I 8533 was voided because it had already been paid by Steve

Siegler. He was re~ursed for the expense with check 110140.

ATTACIDj;N1- i . pageJJ-~
I - _. -_._....- -

':'1l)'J~.:

? ~. ·?S

1:;10"0'; ~l~ci

-= ~. ~a

\

..

,:jf----"""'i----------------------------- WOll:1'l'i:!W IolATlOK.U. t.A:."lt

~..!. roc:'.• All :-~

)l·1-cL'

.j, J.£) STOP PAYMENT REQUEST

ENiS

_ ·1,. k-" ,~ . ;' ,/"'.). I il..o.._

Pria. Se~ et, L~~

1~ !'IOUI'': I:lv~nul

C:.JN N• SC,,:; •S 2 CO?U.il I I = Ps~ !5Ir.) ;7'&.:-=

".C'. ~ex ::.,

\.rr·-'-! ;;:a;;:t.. AA ,_)

. • ST'OI' .&YloIO<T _ '*as......:>E y, e::::-- 00I:lID' rr SlG>OG~1":;llW"ncSI'__ • .

_IHJ l'O_~T,-' OIV.L~ '''_CIf'ICEJ\ IS~ 1O'l0000T'. 00a.\"S.... , ,. (,u:: _ llEl.OW IH:J TMS 'OI'W 1'0~~ N5'n1\ITION. ncs sYtlI' ...'fWIi)lT _ ...... l-....~;.....;......- •..:.'i-,..;;.:'---:;.;.;.....;;.:;.;;...J-......:...:=..:

"='" ~.oi'T£lO'riC:>&~ rr- ...-owu.AUT'ClIOATl:AUy -- "i.' -; " i ,.,....T~.$UIIIIo..JEC:''T01'')E~~~s:''CJ't.a.TW&ttON'1''I'eQoEC:lqSlUEsr eoClllTMSS'I'CP .. J_,,, ...._~OCIOOW. . '.. 1--'-------=---------

,;;. ," .'.

;

,'. . !oj /

." )." , .

CUSTOMEl'I COpy

,. ,.. - - ~;. ) 1'~ ":

I

'" "~ ..

; • I ....

I '. I" .. ': • ....!... • 1 ."

.. .. .-

J .

. I "

." , ,;

.. .' :

"'/..",

- .,.-. .;,:;f

./':- ... / _.. ~. :.'

::,..... -

/.j.. ,.
• t..c«: II I t-< I. t-< I' I ... jl

I

I

I

I

I

I

I

I

I

I

I

I

1 1'.0

. AMIlUNr

.....-......... '

10H0

H, 8e:l. 23

..............,'

.......I,80:5.2J

.,

llA11!

Aaounl: Paid

Ii 8":1. e3

12111/92

W()11mill tlATlONM. ""NK

1lI1LI! nor.le, "" JUIlS

''''·':0

_, t.;M." ....._--_..

,. '" ...- , ...

..

I;

Inv. AaOllnt

1,80:1.23

),:

{:

;,

..

,

;;.

:~ ."':':

,.

'/

Inll, nAte

let10/92

R,I.b

01

\

•••••••• 1,80:5 DOLLAns AND 23 CENTS!I

ClINTOtl· GORE '02 CO""MITTEI!

PIlUN. hOI) sa· 1110'

P.O. pox U41

1111tr""oc,;. 1\11 Ino)

CLINTON', nonE 'iJ COMMI(CE(!

R,,Ir.,

-'=. I nil. NIl.b,,'

J0~6Je 111292

TUX DESCRIPTION'

I

I

,

I

I

I

. I

i

.--------------+----------~-------"II

1('1/.°... 11

I

I

I

I

i

I

I

I

I

I

I ,. I

: I

I

. I

t

I

I

I

.(

I

I

I

I

I

I

I

I

\

"",'"'''' /1", '

~,

I

(.,

I'AY

lumE

nlUIUl

H'

Shll' S.IUI.r

IJ3 Hountaln AII,nu, 1\'10 IIICIIIA1Un.. nlQUllIDO IP oVln .u..... I

,,,- ~.rrfn. NJ . 070~9

I . ,

,', N"': II' p. /"I" i·rt~1 "n""'1 ( G ;)

~_... I "t",~r(iMlE@l~fo£®n ~--_.

t '>oJ -
:--~' -" - ,- -~--

Steven Werbal Siegler

19, rue Montorgueil

75001 Paris France

tel:331 /4580-01 52 lax:33114887·80' 5

Ms. Michelle Day

C~nton Gore '92 Committee

Little Roel< AR 72203 USA

BY Fed Ex

Dear Michelle,

November 12, 1992

• It was good speaking with you yesterday. Here is all the papelWOrK I

promised, and more. Before we get to the fun stuff, I have one question· Have you

folks produced a directory of Advance personnel yet? If so, I would greatly

appreciate a copy ... and if not, please consider doing so. (Mera) Enclosed are the

following, with thanks:

Michelle ... thanks for all of your help. It was great to finally meet you, however

briefly. Have a happy Birthday, and enjoy the mountains, but try to stay out of nasty

bars.

J'

,

, I

I

1.

2-

3.

4.

5.

6.

Unused draft #100-83349

Draft receipts pertaining to the GOTV Meadowlands Rally' NJ 11/01192

Prima invoice for consulting fees and reimbursement of expenses

-Copy-of laSt'Pnmainvoice'and'receipts forunreimbursedexpensestotalfing

$911.08

Form ONe..1

Thank you forms from GOTV Meadowlands ~Ily
Clinton· Gore '92 Committee

P.O. Box 2741

Little Rock: Arkansas 72203

Attention: Matt Moore· Accounting

INVOICE

October 6, 1992

For Consulting Services rendered during the period

August 28· October 2,1992 / lL gu1fL.-

Ref: CG1/92 ~.,k.. ..

31 days advance work at $105.00

31 days pld at $ 25.00

(2idays pld at $ 25.00 paid)

Expenses (receipts enclosed)

telecommunications :=

travel :=

fabric •

fuel :=

--toilS •

miscellaneous •

Total Amount Due

:=

•

:=

38.74

644.47

123.28

35.04 -------

14.15

55.40

=

US$

US$

US$

US$'

US$ 4416.08

Payable upon receipt - Please make payment by cheCk or by wire transfer to the

following account:

L,-,

',,-

C )

tD

C

Bank:

Branch:

Account Name:

Account Number:-

Chase Manhattan Bank N.A

302 West 12th Sl NYNY 10014 USA

Prima Services Ud

• 219-1-110481

Thank you

Prima Services Ltd. I 133 Mountain Avenue- I Warren NJ 07059 USA

tei: (908) 647-3354 Federal Tax ID 51 ·0339160
~~~, - ..>-, ":0-,

STALE DATED CHECK

Clinton/Gore '92 Committee

Check # 9171 ~as voided as it represented payment for car rental

that had previously been paid for by vouchers.

lTTAClIlgi1_ r

Page -..:L.!2.- ot /£Z
/'

/.

I'"

., ~I I I

•

.

a

l~I~...

..a

ttl

""aoaa

--1;- I..

'0a

ttl

IT' a

""i

Ln

rIo.

I~

.

i.

./"

02'

> ~- "C :<i _0 > :::l~ l ;,;:: -e ~.'8 "'" '" t:: Iii

C" -'" c::

C"

ii"

"'0

= ;;; • '" 0 ... m .- ><

.lJ "i 0 :::l r :s:

CO I. ..- r '0

'j-C• I'\,l

I

-_0

II
dl ..

"'111<

o

AMOUNT

,>,~ i-....t.;0-A ~)

.9171

J.1.'J.

'31 11

.2/08.78

/,

'" ), c.~ ".' .' I, (J

n.OfJnt Paid

248.78

WOIllTttIN NAnOIlAl .ANIC

UTTLI /lOCK. All n20I

11-1·1:10

), 6

I

I

,

I , ,

Inv, A.nunt

~48.78

R.nta 1 017192

(

/

.·OoqL?L'· I:08WOOO?:i1: 008q.. 1.·"qU;.... ~··

Aul'i Cllrl I nttrnt1l

737 Brilty Parkw

N.. ~hvill., TN

CLINTON· GORE '92 COMMITTEE

PHONI (1101) 112·11112

P.O. BOll 2141

lITTll! flOCK. All 72203

··········Z48

lid, Inv. N'.'.',lt,- Inv. Dllt.

,,;113(/172 . ~c17:H h'l/c?4/32

TRX DESCRIPTIONI EHptnu FOI' C,w

PAY 10.,.. • OIIJOI

Of
-(>..

'J)

I i PAYI.ESS~

I~CAR RENTAL

CATHLEEN CAVENDER

ACCOUNTS PAYABLE

BILL CLINTON/AL GORE

OCTOBER 19, 199

DEAR MS CAVENDER,

IN REGARDS TO YOUR RECENT LETTER, WE ARE SENDING YOUR CHECR

BACK. THIS WAS AN OVERPAYMENT TO US DURING THE CAMPAIGN. ___ THJ:SRENTAL-WAS -- P-AID-W-I-'l"H- -VOUG-E-R'S--A-'1'--TH£--T-IME--OF--THE-RENTllr;-~---

SORRY THIS WASN"T CLEARED UP EARLIER, BUT WE HAD NO CURRENT

ADDRESS TO SEND THIS TO. WE HAVE BEEN HOLDING IT IN OUR

FILES.

PLEASE LET US KNOW IF WE CAN BE OF ANY ASSISTANCE TO YOU.

THANR YOO CHOOSING PAYLESS CAR RENTAL FOR MR CLINTON AND MR

GORES CAMPAIGN.

SINCERELY,

ANITA GARRISON

ADMINSTATIVE ASSISTANT

AIRAe d/b/a Pay/ess Car Rental

797 Briley Pkwy@ 1-40 (Rodeway Inn) • P.O. Box 290261 • Nashville, TN ~.~229 t/.

Telephone (615) 361-8896· Fax {615} 367-0339 :~~,,_
<.

.~­

~.2 •

STALE DATED CHECK

Clinton/Gore 'P2 Committee

Check #9712 was void at the instruction of Lena Rennie from Worthen

National Bank. The Statement indicates that our account was

charged $2.08, not that we owe the fee. It is merely a statement

not a bill.
\

-.J

011 .,eq 84i ell WJOi aN'

uAad dolS ~I 01

orm •0 l,;OMMlrf=f.

:-' .. fInv. Nu.bar -Inv. Dat.

869 103192 11/20/92

DESCRIPTION. Servlva F.a.

Inv. A.ount

2.08

9712

A80unt Paid

2.08

~712 '1

t'

~~I "'"f-. u' Ill,

""' 'u ""'11<

<,

:1:

<

I

I

I

I

I

I

I

I

I

I

I

I

I

I

P;./~ epcR~ C)~\ leI«-\-

CLINTON· GORE '02 COMM,rree

PHONI holl 172·1882

P.O. 10K U.l

1.11 lit noeK, All Fa~~)

.2.08

WOIIY"IN "_YIONAL IlAI/II

LII nI roGell. An Fa;,»

01·''-'0

971:!

••••••••••••2 DOLLARS AND 08 CENTS

11/23/9i!. •••••••••••a.lIla

Wilt! IIMourrr

PAV

'0 'Ii!

(lfUIUt

Of

Worth.n National aank

200 We.t Capitol Ava

Little Rock, AR 72201

.'CI-' 'l I, ~~\ i:U/l1 mr)r~, . . --_..._--.,.

TWO IICJUATUIIU IIBOUlI:l.) II' uvrn 1700'.01

•• •••• " •• .,•• , '. 4 __ ...__ ....__ ...

INJ~@~!ID~ , I (; !~:L~BO ~f ~~ ,;~f',Ir')~I.•
:> I A I CIVIC:." I uaDEPOSITS AND FEES

MONTH OF OCTOBER DATE: 10/31/92

/:J-4700

WORTHEN NATIONAL BANK

POBOX 1081

LITTLE ROCK AR 72203

4680060160 5430130160

POSTAGE INDICATOR: M

MERCHANT: 019987494

CFP INC 4700

ATTN W DAVID WATKINS

POBOX 615

LITTLE ROCK AR 72203-0615

=.. :'.~J ... ~~. .: ..

. ........-

TOTALS

I I

I

~EPOSIT SUMMARY TOTAL ••

. IYOUR ACCOUNT

PAGE 1 OF 1

I'ID , 0Tr0 (SE! BAO:) •••••••• I

CIXl)():al9(l32S. BAS BEEN CHARGED, I

Z.06

2,06
STA TEMENT OF

DEPOSITS AND FEES

MONTH OF OCTOBER DATE: 10/31/92

--,.

~.

=H

c

I salVlCE FEES I I 2.Ql I

I I

.

• '.::.

TOTALS 2.Ql

TEAR TO DATE

~~

V!SA

141.27 I 1 100. DO 7! ll,lSO.Ol '-46.40

1.).(.70 1.SZ 2O,475.Ol W.Ol

2l? I 31,635.Ol 1.2£5.40

PAGe

IYOUR ACCOUNT HAS BEEN CHARGW

AT'IACEl!.Eld /""L /

?age /();) of • { {
: -.> ,.', _.~'"':, "

. -

<

STALE DATED CHECK

Clinton/Gore '92 Committee

Check I 1497 was voided and replaced with check I 1768 •

•
~. u

6111l.119

41.36

6.ell

1101.17

1I ••e

~,(6e

IJ9/Jr./97

\'fAlI TO UAIE

*·*·**2:lfj,1;9

-------_._--

EAIltJlNG5

FJ.C.A. Will

rED. WIll

liT1\IEVilli

locr.lW/II

--'.--_......_---'---

rNI@1r rNI~@@1rO~!ID[L~

WOIIT"!!tI IIAl'ONAL lANK

Lint. nocll. All 11201t

e'·'·~20

.' ,

19.111

HOMAl.

It. "2

SlATfAR

4.311

I

~DO~?&;'~ .:oa~ooo6?~,:

······226 DOLLARS ANO b9 C~NrS

LIttle Rook. I\R ·I2Z19

E. l. Kop.rlly-"urrl~oll

'1 01ftok Oak Court

currrON· GORE •0 2 CO:t.MITII!E

PAYJlOLL IICCOUNT

PIIOlle (001) 312·.,:t

".0. DOX "41

LHTUl nOCll, All n~o~

:'.

AY

TO".

0II001:Jr.,

(j)

._--_. -,--._-..-_..,,--- ,...--_..__ ..- -'-'._--"'-'-'

104 ?C. FRATE ,n

F

, HOLlIS I ~~u.u ~::~~JJ:._~~ ":J.4;)~2..-:3li-:IOAO_ •• _.

".36" Ii 7 • to" 268713 F.IC.I\. --_.---

VI\CI\TlON AVAIl.

".00 1I01l"S

SICK llHf I\VJ(Il

........ ·---,-··-··--a--·--·-·--t·------'''-''1- - a ..lf.-.-HpURIO---. rAY U I U /92 I_...rl!~~~ __ .. _..2.;:!:~I:..i-.. .__.. ...:!~~':'.!:.. __. :~.C!~.'..'.•._..... .• _ ~.!!'E _._ I I

'-4' .ell/l ~(~~...".J. _~~~.~.!._.l.._ ...:.~~.: ~.~_ . .~." _ ..."... ~~_L !!.~.:.~9 __1
1497

1\'16.'1'1

:HI. A;>

C..A6

9.0ft

M.llil

YIWlTOOATE

EARNINGS

fJ.C.A.W/H

fED. W/H

STATEW/H

LOCALW/H

IlEDUCTIOH8

'i. ;"(1

TAlCU WIl'HHfU)

,J.C.....

ilL n 1

f£DEIlAL

lL IIA

aTATI\R

?Mr..Ii:1

IIOUIIlI

" • :H,A 117.hA

'AY

I'IATI

'\j)

~~l ~~u

"" o. .... .0

£MPtOYEU KOrfa!> EMI'lOYEENAMI n'llrtI'IIV' Mill'! 1""11. fvpl VII I SStll:':' 1(, 7n~r.

TYI'£

CLINTON· GORE '82 COMMlnEE

11011' I Y

1497 .....J / 1 1\ /";'

HEHAY

VAf:ATTON /lVATI

11.1\0 ItllIIU~

STCK 11MI' /lVA'1

1l."I~ ItOllR<;

AMOUNT •••• • " 1 II 7 • 5 :i

UNIl 0/ r2l{ddJlJ4~

--'~

TOTAL

47.fofl

"'')/'''\/9':'

1'I')/lft/C)':'

I 11:1.1 (l 1I0GI•• 1\11 72189

f.volyn I. I<nflor~-Morr!"o

., nl~ck 04lk COIJrt

CLINTON· GORe '.2 COM

',"TROU. ACCOUNT

p,HON' (alII) an·l_

o. eox rr41

LlTll..'tIOCK. All

,loy

I'lIllOO

PAY

TOTHE

OIUJICW

"00 1.. cn"!71:0a aop~ 0 :ll~ 0.08."" ,,..Cfls.,q.. I
STALE DATED CHECK

Clinton/Gore '92 Committee

Check I 1756 was voided and replaced by check 14767. This check

cleared the bank on october 8, 1993.

..TACY I,

Page fl7 of .2&.
WORTHEN

NATIONAL B~NK

OF A.RKANSAS

P.O. BOX 1681

LITHE ROCK • .u

(501) H5-2265

72203

2

SPECUL HANDL

TER/'1S. FEES

TRUTH IN

CLINTON-GORE '92 COMMITTEE

PAYROLL ACCOUNT

PO BOX 2741

LITTLE ROCK A.R 72203

YOU "A.Y REQUEST ACCOUNT DISCLOSURES CONTAINING

AND RATE INFORMATION AS IN COP1PLIA.NCE WITH THE

SAVINGS ACT BY CA.LLING 501-37S-BANK.

Ace....""vnt " .·.·,l·..• 008941-91S-.9 :-:':I~"~!:,"~,"" 10/14/93

p.q.Hvm~e'

1

• ••••••••• CHECKING ~CCOUNT SU~~ARY * * •••• * * ••

PREVIOUS BALA.NCE

+ 2 CREDITS

2 DEBITS

SERVICE CHARGES

+ INTEREST PAID

ENDING BAUNCE

. 00

3.130.31

3.130.:n

.00

.00

.00

YTD INTEREST PAID

.00

,

"-_ ..... ".: -.....,:... ;.-

In

• •••••••• CHECKING ACCOUNT TRANSACTIONS •••••••••

_~_E F'O_S_US,lND__ OTH EacREDl-tS

DATE •••••••••• A/'10UNT.TRANSACTION DESCRIPTION

10/08 1.920.27 ZBA CREDIT

TRANSFER FROH CHECKING ACCT 0089419162

10/11 1.210.04 ZBA CREDIT

TRANSFER FROH CHECKING ACCT 008941'162

CHECKS

DATE •• CHECK NO ••••••••••• A/'10UNT DATE •• CHECK HO ••.•....•.. AHOUNT

10/11 4714 1.210.04 10/08 4767. 1.920.27

• ••••••••• CUSTOHER BALANCE SUMMARY •••••••••• DATE ••••••••• BALANCE DA TE ••••••••• BALANCE

10/07 .00 10/11 .00

10/08 .00

MEMBER r:OIC MEI.I6E" WORTHEN BANKING CORPORATION
--------------------

",., ------ _....._--_....._._. -~------------_ ..

9/2 7/93

CUNTON·OORE "2 COMMITTEE

'I.t'JIIOLL ACOOUNT

PHONll (60') '12·'"2

'.0. lOX 1141

unu, ROCK. AR 12203

... , ..... ........_ ... ' to· ... _ ..__•• _.__ ... ...... ,...... _.

WOIIT"I" "ATIOHAL 'ANK

UT1\1 ROCK. AR n20S

"-H2O

4161 ;

I

•

j

"MOUNT 1,920.27

I

dollara and 27/100------------------------

~00~7~7~ l:oa~OOOO?~:

t.>

-4 <1l (-.. tlil

Eo' oJ

"" P.

fiJJ~a<

- - ..

022 a2~b a~s\ ~2' os

ooaqa. L''''q Ls...q;'- ...0000 Lq W 2U .: "'--' .... \ • j ... _ •••••• 0......r,

1

i

t)11~ In·J. "1 ) b b

\

twenty

\

April Hellody I

430 S. Capitol St SE

Wa.hington, DC 20003

one thou. and nine hundred PAY

TOllll

0lUII0'

i

I

I

(

I,

,

"c.

oj ,~

<t

I diM ~,,,",.,

,~ . .~',

~;t'

:-~"

<.f:::

,','.

I,',

~;.

1).

,

,.

.;,

•J.

'..

"

.:;.

";

'"

<.::~.

.~~

,/,

'..

'"

, .

"

:,',

';"

I ,

,. \.

" 6 i ) ,j ,{ \ " c; -", .. "

( , •.1

~'" ~.

1',< '
STALE DATED CHECK

Clinton/Gore '92 Committee

Check I 4875 was void and found in the check files.

been released. The individual was issued payment for

ME trip on October 22, 1992 with check #7535.

It had never

the Portland,
o

E~"'114

'i !) 3 ti

"/ti35

'7~J5

U15.00

Auunt Paid

31:5.00

WO"T"IN NATIONAL .",1tC

UTILIi 1I0'lK. Ilfl ,,~n

n'·liP

,J

CLiNTOU • GORS '02 COMMlnEI!

'110NI (Gal) au· IIDl

",0. 1l0;c a,u

II/II ROCII, /11\ 71:03

,'.. R.r. loy. Nu.b.r loy. D.t. loy. A.aunt 28115~ 1171C 10/22/ge 315100

TRX DESCRIPTION, 9/e~-9/26

'. CUNTON ;GORe-;O~' evr~Mrii::f.\ ..- _ -- ., .

I

t

I

I

I

I

I

I

I

I

I

I

I

I

I

I

I

I ir---------------~\.....----------------.I

I

I

'/

I," ,

':.,

.. ,

"

T\\'O 1IIQII"';UIIU keQUIHiII I' Clven UO~'.1II

.. - . " .. .. .. .... .... ..

!M(O)i !Ml!~@m~fID~

I

I

I

I

I'I rAY TUlltl!

I lll\llfll

I III

I

I

..........31:5 DOLLARS AND 00 CEN'fa

Jeruv Beo Ad

200 ~. 70th St .1~"

New York, NY 10e23

10/C!~/9~ 11-',,'........315.00 ;\MOUIH

't. .'! Ift"!i:\ 5u' I:Oll wpon" N ',~ (: ~'~ fl LJ"'·'l·-~; () >'---'---"-- 1-'
.,\.

CITY:-:Vod-/,,~ EVENT DATE: q I~ l,p PRINe: f) c...

RON: TRIP N'tl'MBER: 6/7!

P£R DIEK 108-6103

NAKE:.J, (!!..rJ,=, ~a'1 A. "1 \ DATES: 'lki -'7 IJ... (,c AMOUNT: 7.5

I

NAKE: DATES: _

NAME: DATES: _

NAME: DATES: --------- ----- NAME: D.ATES : _

NAHE: DATES: _

KAME: DATES:----- NAME: DATES: _

NAME: DATES:----- - ---NAME:-- - - --- --- - • - - -UXTES:-----

AMOUNT: _

AHOONT: _

AKOONT: _

AKOONT: _

AKOONT: _

AMOONT:----- AMOUNT:---- AMOUNT:

.----

----- ------

AMOUNT:-----

'tOTAL: "25

KAXZ:: DA~zs: _

DKE: DA~: _

nn: DA~ES: _

nxB: UA~ES: _

AKOtnrf: _

UOtnrf, _

AKOtlVf: _

AKOtlVf: _

nKE: _

NJ.KE:--------

DATES: _

DATl:S: _

AKoom: _

AKOtJNT: _

H>.XE: DATES: _

NJ.KE : DATES : _

n.KE: DATES: _

AHOtlln': _

),HOtnr!':----- AMOtJNT:-----

TOTAL: 2:> 15

ATTACEYENT .

Fage //:JO..Ot Iff1
lnv. Amount

$200.00

jf}J

Ref. lnv.

1171

TRX DESCRIPTION:

Number lnv. Date

09/24/92I

Exp. Advance-Portland.HE

lnv. Amount Paid

$200.00

.. UI.>

~I~

""l Cil

t.: :: ~p.,

'-"-'---- .••.••....•. "." ..•..•... ,•.j-_•..•..

CUNTON ·OORE 't 2 COMMITTEE I

PHON' (aol) '12·"182 I

P.O. BOX 21.1

limE ROCK. AR 12203

WOIlTHIN NAnONAL lANK

urn. ROCK. Aft 12201

11-7·120

4875

TWO IIQHATURII RIQUIRID " OVIIl tzOCHl."

•• /) '/J.I I~

PAY

101llI

0IIl0I

WI

_···.·•••·._.200 Dollara and 00 Cente

Jeremy Ben-AlII!

200 w. 70th 8 t.

New York. NY 10023

ttO" 0A~·-**···200.00 AMCXMT

"00..a75" I:Oa200007,:lI: DOa r

........._ ... __...... __.. _*_ .• _ .• "'-'. '••. --•.•_.._._.•"..••• 1

1

" ... _ ....* -

I

!

I

J¥.

I V 6 U I l.. ~, I)
STALE DATED CHECK

Clinton/Gore '92 Committee

'ChecK I 6914 was voided as it represented payment for a trip that

the recipient did not take.

Per Diem check 14428 was also voided as it represented per diem for

the same trip. As the recipient did not make the trip, it was not

owed.

ATTAC~llk' /?/2

Page -'L..t- c. ----
BILL CLINTON • AL GORE

August 6, 1993

Vendor Name

....~~~t~

-the--Cli-n~on-Gore--'-92- ---- ---

in the amount of

Dear

----

On

C;:omm:t ttee-

~~~~ ~sslTed -l:.6---

$ ~,\,-o for

In reviewing that this check is

ur records to see if you have

received this payment. ot received this check, please

contact the accounting office s at we may issue a replacement

check. If you are holding this check for any reason, please let us

know.

Thank you for your assistance.

Cathleen Cavender

Accounts Payable

1'.0 !lOX 2741 • um.!' ROCK. ARKAN!'>AS nJll3 • S/ll·~7f>.12'10 • FAX ~1.~7(..Il.~W\

r""J ,.tt 1"'1 Iht' t:llfllt~ ~z U1Ii/J;"uu r,..,J

Contribution.' to the ainitlnJCn~ --n Comrlia~ F!lM an:' ~n: t,;;'i Gi6uciibie.
,

.- -..

--_.,... -'--~..--.. ,-

:.~ ."

-.

691-
STOP PAYMENT REQUEST- _.
c

en

Statement of Cathleen Cavender

I, Cathleen Cavender, declare the following:

1. On or about September, 1993, I had a telephone conversat~on

....ith Jack Murray concerning check numbers 4428 and 6914..He

told me he did not take the trip associated with-the payments.

Therefore, the checks ....ere voided.

2. On or about September, 1993, I spoke with John Monroe on the

telephone concerning check #6869 and #8578. He told me he was

not entitled to the perdiem payments for the month of October.

Therefore, the checks ....ere voided.

I hearby declare, under penalty of perjury, that the foregoing is

true and correct to the best of my information and belief.

\-ro\·~ Date
C.~

c-·

STALE DATED CHECK

Clinton/Gore '92 Committee

Check I 9972 was voided because there was a computer printer error.

The original check was stapled to the pink check copy and filed

with the checks. This check was never released. It was replaced

with check #9996.

---------- ----J- - ----- - /r'

.."

o'
li~a~

I

:011"<

I r- t./J:>

•

I 0''''

•

-::

•

,I --

•

•

•

• "'-e

•

i

0 .... :II '" J:> .,

I

0

" Co

•

" "S ..

I

r .... 0 •

Q'\-- :0 .... - Ul

'0 J:>

!.,a

::a I:'

-~ l.,a 'r-

.,a ..... .. :tl

IT' ro 2l

II;)

•

S '~" --" • ..... i ~.

••

c

0 s' = s

I",

n -------- -------- 10_ m --z---- '-=~. '0

'0 en

'0- -,:-~.... !o

I~

I'"" • - ,., I •• f' j ~. ,-... 0 ,., 1...-. 0 CII = 0 .

..... .:l

,_.. r-

.. .."'-

.......-

;

;

w .~. .:l '5l

~"...., .;.- ....... .. 0

r13 IT' •

Co .. .' ; I '" C! ~'" " :01 0. •• ""-- I :It ,.,: 0• "'- Ci I - I "': ow I

"-.

0 ala :; I~ a 0 J' 0 c

•

• "'~

I

a :01 0 -..

·..

I

l

IT'

I \J1a

·

a

I

....
:~," , '-J':J.';:"

..J J , ,

,

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

V~"ch~,· No. Inv~je. No. Invole. D~~e Due Oat. Ol,count Oat. Dlic/FC Avallabl

-----------------------------------------~--------------------------------------------------------

'"rr, 1",/. N'I.bo,' lnv. Oat,

",':,:,/,11 II 31i'32 " 111J1Il/9'!

12/'~~~OESCRIPTION: Advanco

12: I I : Sf,

Inv,Allo'Jnt t;U~IAgUu~pRp~f!jSlOENl COMNI rIFe;

165.1i'0 165 00 AIr Vondor sta'~J R'Dort In Detail

12/10/'32

Vondo.· : 5483 - I !j F'JRN !TURE RENTAL

oJ U65.00

99121

NllOt.t«

TWO 1I0NATUIIU ".QU,".0 IP OVII! __I...

NTB

liI t I. Rock, AR 72c07

CUNTON • GORE "2 COMMITTEE

PHONe (eod .72·1.

P.O. epx 17.,

LITTLE Roclc. All '" 72203

PAY

11)~

0IlDfJI

01'

l'

I

I

I

.'00 q q? 2" ':08 WOODI? 3': 008 q Ie ~." q H,'" ~II"

(, ," (; [i , . c; () / \, -
STALE DATED CHECK

Clinton/Gore '92 Committee

Check #8578 was 'void as the individual was not entitled to the

payment.
CLINTON-GORE ' 92 COMMITTEE Open/Cl

Commitment/Check Request Form

COMMITMENT I I

CHECK REQUEST I'i- I

(Check request ~cst have invoice attached, and commitment form if applicable

"0

/1 ua toe - .....

, - (G""'- ,.- ~..!:lount__.:J,')~- .....~.a.;:.,,:):;..;: ........ :.- _

P~y~ble to: Na.me lA/\.Qy,l"\'..c::.. 1>.ddress _

Phone

"

Purpose of Expenditure:

(Describe fUlly and a~t~~~~ationand/or invoice)

Siqnature Q~(-J '£;J!f/ 'pprov.' ----:-=-~--:---:o-------­ (Dept. Head)

-------------------------ACCOUNTINGOSEONLY---------------------------------- ':'

Cleared I /

Cleared I /

/ Rejected

/ Rejected

/ Rejected

I Rejected . ,,- ',- _- '___ i; V: " ....... V

APPROVALS

BU4get director' / / Accepted I

'_. 1I./P 1I.ssistant , / / Accepted I

Document Clerk ::::= / / Accepted /

1I./P Manager / / Accepted I

::XCZP'!'IOliS

Does not meet bUdget / /

Missing infor~ation / /

List: -;----;" ~===:-;:-=-::====_---_

Not QCE / / REQOEST REJECTED

Duplicate request / / REQOEST REJECTED

----..----------,~m~~7 . '\... .... - 'Page~....,,- - /' I

---------------------

I :.

. rJ<

it L

Date

--

Initials

/07-(; /00 I

'OUNT CODES

(, AMOUNTS

:NDOR NUMBER

ROCESSING

Posted to commitments

Posted/transferred to A/P

Selected to Pay

Check prepared

Compliance review

Check Released
statement ot Cathleen Cavender

I, Cathleen Cavender, declare the following:

1. On or about September, 1993, I had a telephone conversation

with Jack Murray concerning check numbers 4428 and 6914. He

told me he did not take the trip associated with the payments.

Therefore, the checks were voided.

2. On or about September, 1993, I spoke with John Monroe on the

telephone concerning check 16869 and #8578. He told me he was

'I not entitled to the perdiem payments for the month of OCtober.

Therefore, the checks were voided.

I hearby declare, under penalty of perjury, that the foregoing is

true and correct to the best of my information and belief.

\:. ~""\,~~ ca leen vender~\ .- \-'O\.~ Date
--"

I

I .

&J2!

..:

tr: I

I

--_.... __:

oZ'

tr:

a:s:

O! O ··

.

••-•. '" . ~!

0' O!

Oi

O!

~.

a:sl o.

~l

I

'lti

~I

~i

I

I•·

c

:: f·' .' -. • .r

~"':.r. ~7 '''J

"-

(.,

,

-.

.......

. -_.._-~.~ .........--,-p
:.r:

STALE DATED CHECK

Clinton/Gore '92 Committee

Check #4875a' listed in the amount of $200.00 represents a duplicate

entry in the accounting system. The check never existed. As it

was a duplicate check number, once the original check was voided in

the system the duplicate could not be voided as the computer

believed it was already void.
STALE DATED CHECK

Clinton/Gore '92 Committee

Check 16869 was void as this individual was not entitled to the

payment.
/

Statement of Cat~leen Cavender

I, Cathleen Cavender, declare the following:

L

1. On or about September, 1993, I had a telephone conversation

with Jack Hurray concerning check numbers 4428 and 6914. He

told me he did not take the trip associated with the payments.

Therefore, the checks were voided.

2. On or about September, 1993, I spoke with John Monroe on the

telephone concerning check -#6869 and #8578. lie told me he was

not entitled to the perdiem payments for the month ot october.

Therefore, the checks were voided.

I hearby declare, under penalty of perjury, that the foregoing i.

true and correct to the best of 1ll.y infor1llation and beliet.

\:Ih~~~~~t\~.\ Ca leen vender

\-'O\-~ Date
-

.:

.- .... , '.. - .,

, . -.... ....

=-,..~.- ...

=~!":-.•

..... .;.e-.e'..·. ....... !

'"r .... :n~ ..·-. _-::e12'. C'~

:.00'::.0>?

50l<\. C·~

~.0Ql

500.00 N/~

-.;.-. -

15 ;:;'OLI!iCAL

c. EMPLOye::: P~WROLL CONSU'_TANT F::E

Dorval, ChristODhe~

Ei"lr.an, Sar.

B.~. Wills & !=Issoc.

(Charl~s Duncan>

0.00

121.00

0.00

2,500.00

1.500.00

3,800.00

N/A

N/A

N/A

)

;

120 STA7E ACTiVITIES - PRESS

EMPLOYEE PAYROLL CONSUL7ANT FEE BENEFITS

Glll, Jonathan P. 0.00 N/A
.. -' ..... ... _..--..-... _. . "'-_."-"'---'.. --_.... ---,

~w

I ;p;, )P\,'. IJllrr."P.I' 1n'l. t:'.t. Jnv. Cl~f1\.nt:

,. :",,'U 11."161.~ I'll, lli/9c: ':'::;1/I.0~)

TlIY n(C,I:Rlf'rH'tl: h'''! TI"", 11'1/15 PI-I- Di~'

r

-.'--" ." ...---I. ....... -. I

CLiNTON·OORE '92 COMMITTEE

PHON. (110') 11I-ltf12

P.O. BOX 27.'

• lInLE ROCK. AR 72203

I:.U£'.'

p~ ~'.'nt P,\l rI

2~"".ll'f.~

.;::~.\'I. !/I'"

WOIITHIN NATlOMA&. BANK

L1TTU ROOK, All 7lI2OI

1I·7·t:!O

6869 I

I

I

I

I

I

I

I

I

I

k I t

I

I ~~

I

I ~,~ u I "'l ttl I E" '>ll I E-. ol

I ""l II,

I

I

6869

PAY

TOM

0IlDEIl

or

John Mom'ol

I Ii> I.l ].'d St

L ! ttl florl,. 011 12cltol

AMOtNr

dJtk5#~ .·OOf.Bf.q.· ':OB 20000 }.: OOBQa. ... q ~b'" 2"

,

r.I, ()

\- .

i/ 6 u / L) ..

C; G
CLIh~ON-GORE '92 COMMITTEE Commit~ent/Cbeck Request Porm

Open/Clr..,_c

COMMITMENT I 1,/

CHECX REQUEST I "'1

(CheCK request must have invoice attached, and co~~it~ent form if applicable

.- c::... I ...::..

Amount ,:::;> -~

Payable to: Name ~~:r:.... \.>=~-..".;.::' L

Address _

Pbone

Purpose of Expenditure: \0\\ --\.r::.,\'E::. \:>\.,~t\,v\ (Describe fully and attach documentation and/or invoice)

"'"

_Siqnature Approved

(Dept. Head)

--ALL -OF-THE-ABOVE-ITEHS--MUSTBE -COMPLETED BEFORE THIS -REQOEST-w-tU;-BS-PROCESt"-"'I.

------------,------- ------ACCOUNTING USE ONLY---------------------------------- -

APPROVALS

_~ BUdqet director

A/P Assistant

Document Clerk

A/P Manaqer

/ !/Accepted / v1 Accepted

/ / Accepted

/ / Accepted

/ ! Rejected

/ / Rej ected 1L-"c.j?3

/ / Rejected ') ';)

/ / Rejected

EXCEPTIONS

Does not meet bUdqet .' I I

Kissinq information I I

List:

Not QCE I I

Duplicate request I I

Cleared / /

Cleared / /

REQUEST REJECTED

REQUEST REJECTED

PROCESSING

Posted to commitments

Posted/transferred to AlP

Selected to Pay

Cbeck prepared

Compliance review

Check Released

Initials

(-- C

Date

'{:'\~

\'-'~c

~OUNT CODES , AMOUNTS

VENDOR NUMBER
c

STALE DATED CHECK

Clinton/Gore '92 Committee

Ck I 3206 - This checK was issued on 9/08/92 as payment for

consulting for the period 8/21 - 8/27. On 9/14/92 the individual

was issued another check as payment for consulting for the period

8/20 8/27. This checK was cashed. The first check was misplac~d. When the individual received a letter from the campaign concern~ng the outstanding payment, it was brought to the

Committee's attention that this check represented a duplication and

the individual was not entitled to the payment. Therefore, in

September of 1993 a stop payment was issued on Ck #3206. i
/

3?f)6

..

.

,

"

--:- ...

1'.?0. ~'"

.:~

/')2 f H"" It lC:l~. ~l

MlOlJNr

IlllOunt I'a 1,1

120. (,i'

~o"'".,, "AnOHAL "'Ilk " lit n II nOCK. An r:",

lI·l·lr>

~... -,""'-

. ', ' 'I C I II

....'JII",t

12f/l,~

I

)

In'l.

n ')' ,/

tny, Doth

~'l/GIIJr,.! I}/.~ I . flI i':1

('I

l"y, N'lI"I'" II~IC

1l1,!;I:/l1PIJflU.

CLINTON .. OOAB'~ 2 COI'\'1MI1'TEI!

'1(1)141 (10') ~1J· ..,a

P.O. /lOX 1741

UTILI! flOC'I. An ,,:!On

. II,r.

-J 1.17'>

1I1~

\

I

I

I

I

I

I

I

,

I

I

I

I !

I I,

I

\ ~', St~ (\IV\!;'< v.'b

I \J'"' .!:>..~ J~ ~i I \; '" I I I , , I

I

I

I

I

I

I

I

I

I

I I, / •

I my l<I111I! \J ;/ I

I "~IK" "'A' Y t:.,"y",,,hl ntO t10IlATUnl!l /Il!QUlnt.O ,~ 0.,." ,....... I.. "."....._... .' '1 C'I' :\1 7 ...I Gt Il;~c I

I , ,.... ... _ _._.._.. . 'j

I llt·"uldy". NY Ili!l~ lMm lMlE~(o)'11'O~IB3!UE, I

I I I , I

I ,

.•• , ,•••.•••, ••) f.. "11'\"(1 •• 01 ••• lr,'n',' "., (IP[!.'~Jj .. I ,',''''I.'.(','''?'' "

I. . .- ---_ -_ ". ' -'" --- , '---_ ..- \'" .-.._-.. rr-'--'"'' _... .. .. -._._ ..

"

. "..

, ....

H

H

",.

,~)

~3;:1
"-

RON: _ ~.:U:? N'UH3U.: \ n J 0 I

PER DI:EX 109-6103

NAME: DA'P"-S : ~OtlN"l':

NAHE: OA.T::5: A.'!OtlN"l' :

N'AKE: OAT::S: AMOUNT:

HAKE: OA.T::S: AMOUNT:

NAKE: OU::S: AHOON"r :

~: OA:l'::S : ~OON"r:

N'~"!E: : OA'!'::5: ..'!omrr: -'!

N'iU!E: DATT-S: ;"''!OUNT:

- ----- -- - ---- --

NJ..:.!E: OA~~:- ;;.MOO'NT:

N'~: DATT-S: :.lo!OtiNT:

0"- TOT'::"":':

r .(COSsvr.=o

l. :;"(' .."l:(, (";..0

N:Ua:: m"''"''I LIM"""""'''' ·OA~~:

r-..... 10t-U.C~ ;>

nKE: OATU: _

nKE: DUES : _

N:i\K!:: OA~: _

Al!tOtnrr: _

AHOtniT: _

NAKE: _ DAn:s : _ AHOtniT : _

!i1l.KE: 0A'r"-S : _ AHOtni'l':----- HAKE: _

L\KE: _

CUES:------ DATES:------

AKotnr:: _

AHOONT: _

TO'!AL:-----
'.

.,'"',

STALE DATED CHECK

Clinton/Gore '92 Committee

ChecK 12927 This check was for consulting for the period 9/2 -

9/8 as indicated on the check stub. The individual was not

entitled to the entire payment. Another consulting request for the

period 9/3 - 9/7 was entered into the system and paid with ex 12928

(period was noted on the check stub). Per Diem for the period Was

paid with Per Diem exl 1666. As the checks had been distributed, a

stop pay request was initiated on Ck 12927 therefore avoidinq a

duplicate payment to the individual.
c

-::

::J

o

c;::

•

'.
-, -,'

..~'

... 1 ;6

co ,

,~;oC' _:

_________;_!- 1_

> • c:-.

'"'"

"

'.

. "

.rj,

. ~.

-"""~.. :

. ..,. -.. - .,. ".;~ i·

~. .. ,

I,

I;:: ''1

.; 1-: . . ..

I

I

I

I'

T

I

I

I

I

!TTAC~Z ~,. ,,..

Page
'.

.~ .1' .. •

16e

'I' .,. i . ;" ...'''jo'

I ~';!'~I":'J:'fj,,";1 """••........ . , ' ~~"1 ".. ',' 41 ,.' . :. '. ;....;.;~~;,.,~.~~~., I

~. ,"'~I:'l:;f .• ,,1 '~'I'('f•'.~" " ',1. '. 1

.,~,,.,,., f' ',. . . '1

, ;i"'.'·~ " " ;. ~~~~.:. i{1 I!. 1,\'.'·fl i)i"~}?: '.':1 • " , I ~I, .... '.. ~f; ~'f..:..l\'''

:.' . '" ;',;:' '; ti;J·,S;I',!l./~~ . . '.'...~\. !'. :>,,~.j .•••- • '" . \' { J"" t,; ...... s • ,I...... II' "I.' c • "~ 1,." ....... "'... 'h·\. T". . .'~I'.I"'t, y . I ",:~,,~4..: ...y\~.[(, .. , I . .• . J~'~:"•.•~t " , .11" ".h "',". ...i ~., '" '~'" '. "t':' ••..~".':.t.

.' ... ,',' ··• ~I~".;.~ .... '1· ~..,. " I" . . '.1" .. , •

..,._ • .".~!~. !~JI;.~." '

" it~Y~)\"'I~ ; . . ,~:'t~ ,~.~~.;t:.•\' ,.. . "".)~,.·:cJ# \1.:J!"':~:'t I -------------':"'. ,..~; ,-"'..t.' ,~~\

"1-..... ·~",.·I d,/ll;\·J::, ....

• --1;.01..... ,;.~' .:!~ ,.. 4-'.....'i~.t' .'. ". '.3,. .', , ,,. . ,(

t • 1.4 .J'i,: ,"t.. "'i)' .:,.,' .1f•. 1 ~,:,~,

. ~".'. -. '-': - -;j

..

• . • 'J, :

Cf\~1!

.. : ~;.)' ;"'.£).;

Auunt Paid

. " 12:i. 00

¥l9/"'~/'J2

\. ':

f j

"

0' M'I(~N~"i':'

L1nu flOCK. Mt(AHaAa 72JOQ

1\·7·"'" ,. "/' ...... -j": .' ' ••

. ,i

I

A8o"n\

·tat5.00 .

,..

..'

')

,......

......

Inv.

I :.:, :

''\;'....

(',

.'

,

I

., ......... _ ••• N'

,. i:;, " .4: ,,'

IJ.,').

" ..II. I VI'4 - \:IVI\j;, ~"\'VIIIlWIl''.~a.:U ' I" •

., ,I:. of

.... .., ~'..... I .' ,

<,'l r1"~t. ..,.. ~~~tI11. . :JA,';r'::: Inv.·Nulb.r Inv. Dolt.

~~~~1~f~ r,~, .?~6.J~:·;r:.:!~ 1.17P , _. IIJ~/~V·?~I' •

'if1&6tN:/~'~'~~T.~k~~~~R~P!,ION I 9l3-9./7 :.. flf!l.'i~.l',.,....•, : ··O~I., ~ll., ...•., ·.·f. 1'" • ... ;."'tL~/""~.I· 'd""R .If·:: .. I 1... I' ",.' ;. )

'lr~.:.·~' '.; .',f(: .It ., : r..- :~.~ " , . 0 .. ,' '''If'·~\.,,,, ",:, l"~" ,.' 't' ., .• ,.' •

",aC • l -.j',. ~\' ." I, ,'. ..,. ,,'•.,.. " •

.".,~.' .• ;." I~~ ".,~ ,. ,. ;,': I "... ,.

~;I(ii,~::J~\tlk'ti;?,,',:i·l: '.' .' ...• .

./ '~"~II"'.J..,.•'(· .•. ,:I.. ,.. t

~~~"~'1A;4'~'J''''~INMU''1 . 1.;.9:'\ " H' l..'''·,L :!';o: . .,.. "'.,'I(r.~ 1 't.,,', ,'....... 1_'·····A.~.... '.4' .. ",,").llf-:l ..·:!,,' ,',':,' ..~.' " " 'I" ',. •

·((~"t"":,/".... -: <'i' 4JIlU-"~'r 'V. "1" .\ :.'1' "i''' /.~,:, . t,,4""'" .. ",~.. •.•... ..' ~~~\'I:F ~::~'~;~'::~\;'~\ ~~f";' ", ';"': . ,~ ..e··:·.:.·· .1 ,,11111 a: ; n \'.! \

.;;~;;;,::.I .,'. .... ... ,.....',·r.l'o:t,'

l '.' . t.' I

1 '1.' '11 .~. ,

!~ .. ~.:. '. ",',.f, .: I ;"

'''''':''t~'I' ,i/.:· l\·~~f.~': : . ,'\ 'I' vI" I .. ". " • '.' , \ ••

i

r

•.:~'.f.-··,,~.~-, ..;-..•~(:~U':":'N':'=T=-=O~N. aORe to 2 COMMmw: " ,.:.,J,,"'.!:':'. '''''I1'IClAL'"1t DIIIU ACCOUNT '" .. ... . ,.1 tJ.. . ~I/j... ,. : .. :'. . •• , ".0. "OX ".t , ,~.,~.. ., '"H :. ~./" .' :'x LI'f,{l,Il:"?OI<•. Nt wnaot_.. 'M.:"",,' !.t..;". . ~. . '.' , .•4i{I,····.: './ ~1~11Fl 1't(',~·. ,':,,~:'.1. ',~, 't.: ••' J .. -

"'·'1~,:",1.j'·~I~·,·; I·,::'·:·.. ·"

,"I. ,'\00 ~'''I'' ~1(#.,jli/r·'J""II.J IU J..::_._ .•_-_......_..- ... ..... "\ 1~~J.iI,' ',l.t.' ', . '

:~~\~IN:~';J.\.:,:i;:{J~ ~~:.... I?? .DOLLn~9 AND 00 ClONTS

PAY' 1~1f.'~t/.('!I":c:1 J". " .•••,' .;..'.. ". '.' . ,~, I." rl~'\' i I • .... '11111' .,,' :Joo,;J,'J '., '.'.1 'l" . I . .., . , • JV '~~ '1;;'''' .. '. ' ~~·..,'~v~.:;·:Cpll ..n McC.rthy Of:: /' !'. ...li~. i\~ J I Orloh Strut ~.,~ ...:,,'.: . ·i". ... . , :i.( i;:':;~·I!~ .<,.;'.' ,;'. Ru"ord.· RI . e~'J 16

~r{(.:.~..(.'.il •..~·: If}Jol.1;i: ...~ll,.i.,.-.rI.:....-'.:.'.! ..~,c" '\'" I,"

~i~~"~~;~:11,i~~.~.~.:I·;::'·..~· " '. , Z..i:~ ·~t~.i:.·,f~"\"N~:··'· 0"\ . 1'1,. " ". . .

lF~: Jrl~~~·: .. ,.!,.,tP... .~~~.~.r.,:"iI.;Oa ~.oOOO" 31

:

~,..c-Tt~. i ' ••• .••.~~,~.~.~,---l""T1""O,~~-..--_..,.' 0_.-!-.-.-.-, -7-.-.-, .~,-- ~--r:--T~~...,

"

·,1' , j:
(

STALE DATED CHECK

Clinton/Gore '9~ Committee

Check 13317 was void and located in the check files. It was never

released. The vendor states the account has been paid in full.

ATTACliYEH!

Fage ../3"9 of .712
L:lIN roN - GORE' 92 COMMITTEE ------~--_._---------"

3317

~\'a

(J Q)

'.:4 p.

RUtlnt Paid

76.56

\s~S

, \'p\.~\

Jnv. Auunt

76~56

~~\d50

to, J7}t)":> \\ • I 'i)u'() ",,0-. ." \J

R.f. Inv. Nueb,r Inv. Oat,

It&S4 090292 09/02/92

TRX DESCRIPTIONI R,ieb.

i'

,

t76.!56

! PAY

lOlHE

(lIID[II

0tF

CLINTON·OORE '82 COMMITTE!

PHON! (lIOl) 172·INa

P.O. eox 1741

U TTL E ROCK. loR ll120J

Tavlo,' R.ntal (P

235 Eut !'lald,n

WashIngton, PA

WO","IN "AnOHAL .ANIl

LlTTLI flOCK, All l'22OI Ij;oJ __

. _. 1

33171

AMOUNT

U'OO I :I L1" .:08 2000013': i 008 q.. L.II q H,'" 2"

( I

I 6 : ; j I, i

(' ! )
J3!O W,,"SHING70N ROAD, ,",cMU"lRAY. PA 15.317

TEL (412) 9."5000

amt<~·Gvrc "92 CCllIlIllit~

PO Box on.. l

UttJe Rock. AR T'..2D3

1(5()1 )37)· 1M

ATT'N: S!:IaDnon Tanner

Te> ...iItun It cnay ~:

::3~ ~ST MA,OEN SiREEi, W"S~INGTON.PA 15.30'

JmIWY 25. 1995 rev (412l22~oo

Our records indj~ th.u )'OUT organiza!i.llI bas no Iiabilit).. Witb '1Uf company as of lb.is daz.

Please COIlt3Ct our ste're ljtbw: ;m: any disaepe.DCies,

YOUIS U\ll)'.

.

."

of IfZ

-- Things to rent jur e~'uy e~·OIt·:.-------=~ _
EXHIBITD
- ---

tROft CLINTON/GORE '92 81,38,1995 16:19 NO, 4

----~

P, 2

CLINTON CAMPAIGN GENERAL ELECTION

LEGAL AND ACCOUNTING COMPLIANCE FUND

POBOX ~741

LITTLE ROCK AR 72203

..-.. ,J,

ACCOl.'1'<T W>olIU

008&07-535-0 "'ATt..~"".DAn

08/31/94

P"Gll'fUI.lU.k

4 1

SPECaL HANOI.

WORTHEN'S VISA OR ~ASTERCARD OFFERS A LOW 8.5X RATE (APR)! APPLY TODAY AT THE WORTHEN LOCATION NEAREST YOU. OR

CALL 375-BANK OR 1-800-477-2264 FOR AN APPLICATION.

• w •••••• * CHECK INS ACCOUNT SUMMARY •••••••• w •

PREVIOUS BALANCE 108 , 691.91

+ 0 CREDITS .00

4 DEBITS 101,126.93 YTO INTEREST PAID

SERVICE CHARGES .00 867.84

+ INTEREST PAID 26.44 ENDIN~ BALANCE 7,591.42

• * * •••••• CHECKING ACCOUNT TRANSACTIONS ••• * •••·w •

_DE;,.osI]'S AHD OTHER CREDITS

DATE •••••••••• AHOUNT.TRANSACTION DESCRIPTION ... -.,,.,.' .,'..- 08/31 26.44 INTEREST PAID

CHECKS

DATE .• CHECIC NO •••••.•.•.• AMOUNT DATE •• CHECK NO ••••••.•••.AHOUNT

08/03 100,000;00 08/17 1421 4.15

08/12 1420 973.78 08/30 1422 149.00

• • • • * • • • • • CUSTOMER BALANCE SUMMARY •••••••••• DATE ••••••••• BALANCE DATE .•••••••• BALANCE

01/31 10S,."1.91 08/17 7,713.98 OS/03 8,691.91 08/30 7,564.98 08/12 7,718.13 08/31 7 , 591.42

•. ~. .•••_~ •• INTEREST RATE SUMHARY ••••••••••

INTEREST EARNED

EFFECTIVE UP TO .2,499- DATE $2,498 .49,999

08-02-94 2.050 2.050

INTEREST EARNED THIS PERIOD

ANNUAL PERCENTAGE VIELD EARNED

DAVS IN PERIOD

$50,000-

$9',999

2.150

uoo,ooo-

.499,999

2.250

$500,000

AND ABOVE

2.500

26.44

2.17"

31

I

I

•I

,

. I

,

~O!!t:e: S~~ ~~E~S~ SiDE ANo .lC=O~J.?~~r!~~~~ S~.:-!"JI~\.f-·~·, ':~c I,"'~""':::-~"-'" ':"--~ .. _-
FRon ClIHTON/60RE '92 81,38,1995 16:19 NO. 4 P. 3

"I.lIUlkNf

::

......

?"

...._..

CLINTON - GORE

GENERAL .lCCT

PO BOX 27~1

LITTLE ROCK· AR

92 COHMITTEE

72203
FROK CLIHTOH/GORE '92 91,39.1995 16:21 NO, 4 p. 4

$500,000·

AND AIOVE

2.750

48.40

2.17"

31

VTn INTEREST PAID

1,177.57

• • • • • • • • • •

$100.000-

$499,999

2.500

C~INTOH CAMPAIGN GENERA~ ELECTION ~EGA~ AND ACCOUNTING COMPLIANCE FUND

P 0 lOX 2741 lITT~E ROCK AR 72203

NO •••••••••••AMOUHT DATE •• CHECK HO ••••••••• :.AHOUNT·

30,000.00 10/28 " 1'24 499.88

• • • • • • • CUSTOMER IALANC! SUMMARY •••••••••• I

DATI' ••••••••• BALANCE DA TE ••••••••. BALANCE I

09/30 59,152.57 10/28 8.652,"" Ii

10/19 9,152.57 10/31 ',701.09 "',::,:::

I

.

• • • • • • • • • • • INTEREST RATE SUMKARY

INTEREST EARNED

EFFECTIvE UP TO _2.49'- $50,000- DATE '2,498 $49,999 .99,999

10-Q7-94 2.150 2.150 2.250

INTEREST EARNED THIS PERIOD ANNUAL PERCENTAGE YIELD EARNED

DAYS 1M PERIOD

• • •

ACeoll><t HltWUA 008607-535-0

n"TU<OlT D"1'I 10/31/94

PACZ'NU'IiC.D

2 1

SPECIAL HANOI.. APPLY FOR A TRUE BLUE YONDER LOAN TODAY! WITH YOUR

LOAH, YOU COULD RECEIVE TWO ROUND-TRIP TICKETS TO

PLACES LIKE HAWAII OR ORLANDO. RESTRICTIOHS APPLY.

• If •••••••If .. CHe"1;JC1NG ACCOUNT SUHKARY ••••••••••

PREVIOUS BALANCE 39,152.51

+ 0 CREDITS .00

2 DEBITS 30.499.88

SERVICE CHARGES .00

+ INTEREST PAID 48.40

ENDING BALANce 8,701.09

• ••••••• I CHECKING ACCOUNT TRANSACTIONS. If •• .!I__I ••-

DEP_OSITS AND OTHeR CREDITS

DATE •••••••••• AHOUNT.TRAHSACTIOH DESCRIPTION

10/31 48.40 INTEREST PAID

CHECKS

DATE •• CHECK

10/19

J.TTAClDlH? $L

Page ..Li...5 of /0/Z
f~O" CLINTON/GORE '92 81.38,1995 16:21 NO, • p. 5 ... '~", ....,.....

92 COHI1 ITTH

·PREVIOUS CHECK NU/,lBER(S) MISSING

.

..

. I

. '--. ..-.. __..... -.

-:..:..'

CLINTON - SORE

GENERAL AeeT

PO BOX 27111

LI TTl E ROCK AR 722D3

. NOTICE: SE£!\~ SiOS AHO ACCO,,"PANYlHG

STATEMENT(S)!"OR lMPORT"""I~OIll"'A"'"''''

~;.~;:,

~S', -

~~: .~":'.-'

.... :-;' ..
-- ,--- .- ---.-

- COIN --.. CHEOCS

--.-- o..,a 6J' . L.l.r,\~ 0'0

• ,

•

-

&>0<

.-

•

- TOTAl. ul.f'\,r:rn - -=-

TOTAl.

O£POSIT Vtoo.n~ -

I

I

i I

~I

! NAME r A;n1co{60Cf l1d CODY'Y'

: ADORESS €OPto:t ~7Y:.l....1 _

I L. e., l A;t2-

I 12.2.!:l:>

I I: 500 ~"00001:

.....__I . •.. _""'" .•........... _ ..._.__. _ ....•, .•..__••.•. _ . .•., .... .•...........__ .

1430

CUNTON CAMPAIGN GENERAl ELECTION

Ll!CAL a. ACCOIJImNG FUND ~.Q. sox",

IJT'TI.£ IlOQ(, M 1ZillD January 27

~.x bundred sixty thousand dollars and %ero cents •••••••••***•••••••

DOLLARS

535-0"

·"'OR _

.. 00 1t.. 30" -1:08 cOOOO B ': 008 E.

t.n .~

c·
AK006173

FEDERAL ELECTION COMMISSION

W.<SHt"GTO,,", 0 C 20~b3

April 25, 1995

MEMORANDUM

TO:

THROUGH:

FROM:

o

o

o

c

'--

SUBJECT: ANALYSIS 0 RESPONSE TO THE FINAL AUDIT REPORT ON

CLINTON/GO '92 COMMITTEE AND CLINTON/GORE '92 ....... ··GENERAL ELECTION-COMPLIANCE FUND---- .--- -- -----

As requested by your memorandum, dated February 2, 1995,

the Audit staff has reviewed the response to the Final Audit

Report ("FAR") submitted by the Clinton/Gore '92 Committee (the

"General Committee") and the Clinton/Gore '92 General Election

Compliance Fund (the "Compliance Fund") on January 30, 1995.

OUr analysis of these documents is presented below.

The Committee's response addresses the following matters as

presented in the FAR:

Apparent Prohibited Contributions (Finding III.A.);

Non-qualified Campaign Expenses as a result of Apparent

Duplicate Payments (Finding III.B.1.); and,

Stale-Dated Checks (Finding III.E.).

With respect to Finding III.A., Apparent Prohibited

Contributions, the General Committee states that it objects to

the Audit Division's position contained in the FAR that the

General Committee received $111,100 in prohibited contributions

in connection with four media contracts that were amended during

the general election period. The Committee argues that the four

vendors were part of a creative team which worked on DNC media

pursuant to 2 U.S.C. S441a(d), campaign media and other DNC

generic media. The campaign further argues that as the

C~I~~tm8 II><- C"",m,ss"",', 10th Ann~'Y

YESTERDAY. TODAY AND TOMORROW

DEDICATED TO KEEPING THE PUBLIC INFORMED

lTTAcmlENT _?'~.---::"7""-

Page I of 31<
-2-

overall media plan was refined, the contracts were amended to

reflect the actual services provided based on a shift in focus

and the in~reased DNC use of generic advertising.

To support its arguments, the Committee provided

documentation supporting the DNC payments for the amended

portions of the contracts and an affidavit from a corporate

officer of Greer, Margolis, Mitchell, Burns, , Associates, Inc.

("GHMB")!/, the media consultant for the General Committee during

the 1992 election cycle. In addition, a videotape was presented

which shows examples of four commercials .n which three of the

four vendors (Deutsch, Inc., Valerie Graves, and Squier Eskew

Knapp Ochs) apparently worked. .

The affidavit from GMMB states that all four vendors

participated in the creative development, scripting and

producing of individual radio spots or sets of spots. It states

that Valerie Graves worked on radio targeted to African-American

voters. She wrote and produced one of the commercials contained

on the Videotape. The affidavit further states that Michael

oonilon and Squier Eskew Knapp Ochs were involved in strategy,

message development and scripting of radio spots to be broadcast ___in_llichigan-anda-number -of southem states,-especi-a-l-ly -a8-part---~---­

of the Get-Out-the-Vote campaign. Further, Squier Eskew Knapp

Ochs wrote and produced one of the spots on the videotape. For

Deutsch, Inc., the affidavit states that they wrote and produced

the remaining two spots on the videotape.

The affidavit also states that by October of 1992, GMMB had

a fairly well-developed overall media strategy, and accordingly,

had determined what emphasis would be placed on generic media

versus media for the candidate. The General Committee states

that on that basis, the amounts to be paid by the DNC for

generic media were determined.

However, the Committee provided no affidavits from the

individual vendors and no documentation to support the

percentages developed by the DNC and the General Committee or

that the services performed were any different than what was

originally expected to be performed. The General Committee

stated that at this late date GHMB could not provide complete

records concerning all specific spots worked on by these

vendors.

The videotape21 provided contains four separate 30 second

televisions spots.- One is titled "Gina," another is "Jonathan

3," another is "2nd Street," and the final one is "Speak." None

II Formerly Greer, Margolis, Mitchell, Greenwald & Associates,

Inc.

"£1 The videotape is maintained in the Audit Division for

review. ATTACHYENT \5'" -o~ f"c. :.l- of' ri"
-3-

of these spots contains mention of a specific candidate and

includes generic appeals from different individuals to the

effect that Republicans don't understand their problems,

"trickle-down economics· doesn't work, vote for a change,

Democrats understand their problems, the Democratic plan makes

the most sense, and average income has gone down over the past

12 years. We do not know for certain that this is the exact

format that the spots appeared or what percentage of total work

this comprises. However, it is evident that the spots provided

are for generic media and are not candidate specific.

Although complete documentation to support the above

contentions was not provided, it does appear that the four media

vendors provided services related to generic media as well as

services for the General Committee. Documentation to support

the accuracy and correctness of the percentages paid has not

been provided to the Audit staff. Given that it appears these

vendors worked on generic media for the ONC, which paid for a

certain portion of the original contracts, the Audit staff does

not believe that repayment to the U.S. Treasury for prohibited

contributions is warranted.

_______The__Committeehas stated that if- the documentation is- not--

considered adequate, the ONC and the General Committee would be

willing to take whatever steps are necessary for allocating this

amount as an expenditure pursuant to 2 U.S.C. 441a(d). This

would also reduce the amount payable to the U.S. Treasury. As

of June 30, 1994, the DNC had reported that $9,682,375.38 of its

$10,331,703 National Party Limit for the 1992 Presidential

General Election had been expended.

With respect to the non-qualified campaign expenses, the

General Committee provided documentation which demonstrated that

$1,850 in duplicate payments to Southwestern Bell had been

refunded. As a result, the amount repayable to the U.S.

Treasury relative to duplicate payments is reduced from $8,329

to $6,479.

With respect to Finding III.E., Stale-Dated Checks, the

General Committee's response to the FAR included documentation

to resolve stale-dated checks totaling $32,535. As a result,

the General Committee's payment obligation under the provisions

of 11 CFR S9007.6 has decreased to $24,640, which represents the

remaining, unresolved stale-dated checks.

Finally, the Audit staff is in the process of revising the

NOQCE and Expenditures Subject to Limit analyses based upon the

General Committee's response and recently filed disclosure

reports. It appears that the General Committee is now in a

surplus position as the result of excessive transfers from the

Compliance Fund.

.A.T'l'ACHllEh'T _S=-~ __

Page -::;' gt 'l.
r

\.

-4-

Our analysis will t~ forwarded to your office under

separate cover upon its completion.

Should you have any questions, call Alex Boniewicz or Joe

Swearingen at 219-3720.

lTUCHllElIT --=:S=::.----:_

Page 'i of 1
.=::

'--'-c .. -

L'- .... ,.~ \

. \

7~:S AG~EE}E~~ :s entered :~to as 0: July ' :992

between t~e C~:NTON/GORE GENE~ ELZC7ION COMMIT7EE, :~C., an

A=kansas ~on-profit co~?oration (the ·Commit~ee·), havi~g

offices at 112 West Third Street, Little Rock, Arkansas 77201,

and (WConsultant-), ~n indiv~dual res icing at 32

West 105t~ Street, Apart~ent 2, New?ork, New York 10e25.

Services. ~he Comrnit~ee he~eby engages

Consultan~ to provide, a~d C~nsulta~: ag~ees to orovice, media consulti~g, production and rela:ec =er~ices :0= the C::nton

general election campai~n, as more ~?ecifically provided in

Exhibit A hereto.

2. Compensation and Expe~ses. For all services

pursuant to this Agreement and all ~ssociated expen~es. the

Committee shall pay to Consultant u~ to the amount provided in

EXhibi; A hereto. The Committee shall also reimbur~e

Consultant for travel expenses (coac~ airfare, hotels. meals

and ground transportation) reasonab17 incurred by Consultant in

performing services under this Agreement and not included

within production costs pursuant to Exhibit 0, provided that

Consultant shall not be reimbursed for expenses which in the

aggregate exceed the amount set for~~ in Exhibit A hereto

-'--- ---unless,-prior -to incur::ing sllche;penses. Consultanthas _

=eceived from the Committee or from Mandy Grunwald of Great

Ame::ican Media (-Ms. Grunwald-) written authorizat~on for such

expenses. Payment to Consultant fo~ fees and expen~es under

this Agreement shall be due upon su=mission of Consultant'S

statements therefor in accordance with the schedule set forth

in Exhibit A hereto and not later t=an November 15, 1992.

itemized in such detail as the Committee may reasonably

request. Consultant shall maintain books and records adequate

for the confirmation of all such fees and expenses, which shall

be available for inspection by the ~mmittee upon :easonable

request. No payment of fees or rei:bursement of espenses by

the Co~~ittee shall be due for any ~tivities of consultant

outside the scope of this Agreement.

3. personnel and Fad'i~·". Consultant shall

furnish al_ personnel. services, ~~1lities. equipeent and

supplies required in connection Wl~ performance under this

Agreement, including obtaining s.rT~ces and materials from any

authorized subcontractors as needed. Consultant snaIl work

under the direction 0: Ms. Grunw.l~ or David Watki~5 and/or

other reoresentatives designated or the Committee ~r MS.

Grunwald~ Consultant shall provi~e all services u~der :~is

Agreement, and shall acccr= such pr:ority to servi~es hereunder
·5 necessary to assure full and time y performance by ~ns~l~a~~ u~cer ~~~s Ag=eeme~~. Consu ~a~t shall not enter

~nto· a~y cont=acts or co~~it~ents with ~i=d parties for serv~ces or oroduc~s to be provided oursuant to this Agreement,

without the prior written approval of the Committee or Ms.

Grunwald.

4. Committee Suppc;;. 7he Co~~ittee and Ms.

Grunwald shall provide to Consul~ant information and

coordination as reasonably requested by Consultant and needed

to enable Consultant to pe=:orm its services pursuant to this

Agreement.

5. ~. The term 0: this Agreement shall extend

through November 15, 1992. The Committee may, by~ritten

notice to Consultant, terminate this Agreement at an earlier

date, provided, however, that the Committee shall nevertheless

pay Consultant the minimum fee provided in Exhibit; (if

applicable) and any other amounts becoming due prior to the

date of termination, including any charges of authorized

subcontractors properly incurred by Consultant as a result of

any such termination. To the extent practicable, Consultant

shall include like termination provisions in any agreements

with subcontractors. All rights and obligations of the oarties

arising prior thereto shall survive the termination of this

Agreement.

6. CQntent. Ownership and Confidentiality. The

content of all media strategies, plans, advertiseme~ts or other

public communications shall be subject to prior approval bY the'

Committee's representative. All right, title and interest in

all completed and partially completed work product (the -Work r- PrQduct-) of CQnsultant developed pursuant to this Agreement

shall automatically vest in the Committee, and.exclusive

, possession thereof shall be delivered to the Committee

forthwith upon request by the Committee. Consultant hereby

acknowledges that she has obtained and will continue to obtain

,., knowledge of and access tQ confidential, sensitive and valuable

information cQncerning the Work Product and other informatiQn ~'relating to the Committee (-Rest=icted Information-), which may

include but is ~ot limited to political and media st=ategies

and plans, cont=acts and financial information, pertaining to,

used by Qr k~own to the Committee, and any and all other

i~fQrmation concerning the affai=s and finances of the

Committee 0= i~s membe=s, which information (a) is not

generally known by 0= available to the general public (without

fault of Consultant), (b) was not available to CQnsultant on a

nonconfidential basis ?rior to receipt from the Committee and

:5 net :ece:vec :~e=ea:~er ::om a thi=d party without

- L. -

-- .~-::=:': ~&:::-_~-- . _ c:: ~Co _
_~:c:~on and withou~ breach c: ~his Ag~eement, and (c) is

~C disc~osed pursuan~ ~o a :e~ui:ement of a government agency

0: legal process. Consultant t~erefore a~rees at all times

after the date hereof (x) to keep a:l such Restric~ed

:n:crmation confidential, (y) to disclose Restric~ed

Information only to those subcontractors and agents of

Consultant who (i) reasonably need to have access to the

Restricted Information, (ii) have been approved in advance in

writing by the Co~~ittee or ~s. G:~nwald and (iii) have agreed

to be bound by the te~~s 0: ~~is Sec~ion 6, a~c (z) ~ot to use

(and to cause any persons to whom Consultant discloses such

Res~=ic~ed !nfc=mation to a~ree ~ot to use) such Res~=~cted

Information on its own behalf or on behalf of any other person,

firm or entity. Upon request by the Committee, Consultant

shall deliver to the Committee forthwith all copies of

Restric~ed Information. In the event of a breach or threatened

breach by Consultant or any person to whom Consultant has

disclosed Restricted Information of the provisions of this

paragraph, the Committee shall be entitled to an injunc~ion

restraining Consultant or such person from using or disclosing,

in whole or in part, any such Restricted Information. Nothing

herein contained shall be construed as prohibiting the

Committee from pursuing any other available remedy for such

breach or threatened breach, including the recovery of damages.

7. Representations and War~anties. Consultant -- -----hereby--=epresents--and- warrants-as-fol-lows: -- All--services----------------

furnished under this Agreement will be in accordance with the

terms of this Agreement. Information and materials furnished

by the Consultant will not violate the proprietary or other

legal rights of any other party. Consultant is an individual

having full capacity, power and authority to enter into and to

perform this Agreement. Execution, delivery and performance of

this Agreement by Consultant will not violate the terms of any

other employment relationship or other obligation of

Consultant. This Agreement constitutes a legal, valid and

binding obligation of the Consultant, enforceable in accordance

with its terms. Consultant has not paid or agreed to pay any

commission, percentage or fee of any kind to any other person

or entity, contingent upon or resulting from entering into or

performing services under this Agreement. In the performance

of t~is Agreement, Consultant shall comply with all applicable

laws and regulations.

7he Co~~ittee hereby represents and warrants as

follows: :nformation and materials :~rnished by the Committee

will not violate the proprietary or other legal rights of any

ot~er party. 7he Committee is a corporation duly organized and

in aood standine under the laws of Arkansas and has full power

and-authority t; enter into ane :0 ?erform t~is Agreement:
J Ag~eement ccnst:t~~es a :egal, valid and binding

~:iga~icn of t~e Commi:~eel e~fc:ceable :~ acco=dance wit~ its ~er~s. :~ ~he performance 0: t~is Agreemene, the Co~mittee

shall comply wie~ all applicable laws and regulations.

S. Liabi'i~v and :ndemnitv. Nothing in this

Agreement shall be conscr~ed to conseitute either party a

partner, employee or agene 0: the other, nor shall either party

have author~ty to bind t~e other :n any =espect, it ~eing

intended that each party shall remain an independent contractor

solely responsible for i':s own aCtions. :'he Committee sha'll

not be liable under any contrac,:s or obligations of Consultant,

apart from this Agreement, or for any acts or omissions of

Consultant and its subcontractors and agents. Consultant

agrees to indemnify and hold ha~less the Committee and its

members, officers, employees and agents from any and all

claims, losses, damages and expenses (including attorney fee5)

in any manner resulting from or arising oue of any contracts or

obligations of Consultant or the performance or breach of

Consultant'S obligations under this Agreement, except as

expressly contemplated herein. ~either Consultant nor her

subcontactors or agents shall be liable under any contracts or

obligations of the Committee. apart from this Agreement, or for

any acts or omissions of the Committee and its members,

officers. employees and agents. The Committee agrees to

"-::ndemnif-y-andhol.d harmle_s_~_Consultant and her subcontractorS

and agem::s from any and all cial.ins,los~;es;;damagesand

expenses (including attorney fees) in any manner resulting from

or arising out of any contracts or obligations of the Committee

or the performance or breach of the Committee's obligations

under this Agreement, except as expressly contemplated herein.

9. Miscellaneous. This instrument contains the

entire agreement of the parties and supersedes all other

agreements or understandings between them. This instrument may

not be changed orally, but only by an agreement in writing

signed by the party against whom enforcement of any waiver,

change, extension or discharge is sought. All covenants,

agreemencs, representations, warran~ies and indemnities made

herein by either party shall survive the execution and delivery

of the Agreemen~ and shall bind and inure to the benefit of

their respec=ive successors and assigns, provided that the

rights and obligations of a ?ar~y to this Agreement shall not

be assignable wi~hout the prior writ~en consent of the other

par,:y hereco. ~esc=ip~ive headings in this Agreement are for

convenience only and shall not affect the construc~ion of ~his

Agreement. ~:: commun~cations and notices made under this

Agreement shall be delivered to the par~ies ac their respective

addresses set foreh aoove. :he Agreement shall be governed by

- 4 -

(; l :-:- ;.:~~::' _

_ __i.{__ 0:' _ ...(...0 _
\ . ;'aws of Arkansas (net incluc.ing the chcice-of-law rules

,llereo:) .

:~ WIT~ESS WHEREOF, the parties hereto have duly exec~~ed this Ag=eement as c: ~he date :i~s: he:einabove set

/:'" _'J r-'" __ .....

C~:~70N/GORE GENERAL E~EC7:0N C~MMr~EE, INC.

3y:

DavlO Wa :l.ns

Vice President and ~eputy Campaign Manager

JC03f

;...::-l.:;"=\J7lTT

::::2 _S-=<-_-_-_-_-_-c-!-(,~a---
(

Ui

2.

---- 3;

4 .

0003f

::..x.."iI BIT A

SERVICES AND CQMPENSA7ION

Se~vices. Consultan~ shall ?rovide advice and assistance

in the develo?ment and exec~tion 0: an overall media

strategy and plan :or the Committee and the design and

production of television and radio advertisements

consistent with such strategy, and shall participate in

associated meetings and telephone conferences on a

regular basis, all subject to the direction of the

Committee and Ms. Grunwald and in conjunction and

coordination with other firms and persons providing media

advice and assistance to the Committee. Consultant

acknowledges that ?ortions of Consultant's work Product

may be combined and used with the Work Product of other

media advisors to the Committee.

Production. Media production services may be provided

directly or through the use of subcontractors, subject to

prior written approval by the Committee or Ms. Grunwald

of any such services and subcontractor.

Compensation. 7he Committee shall pay Consultant three

installments of $25,000 each on August 1, September 15,

and November 15, 1992, provided that if the Agreement is

terminated prior to the end of its term, the Committee

shall pay a minimum fee of $25,000 if terminated without

breach of the Agreement by Consultant on or before August

1 and, thereafter, an additional amount prorated

according to the number of days since the previous

installment was due. All production services shall be

billed, and paid i~ an amount equal to Consultant's

direct cost therefor, without mark-up or commission of

any kind.

Expenses. Actual expenses not to exceed $1,000.

:.::;..:::--p';;: _if:::;!:..'__ _

::'fS G c~ .......G~Q_--
AMENDED AND RESTATED

MEDIA SERVIqS AGREEMDIT

THIS AME:IDED A..."ID RESTATED MEDIA SERVICES AGREEMENT

(the ·Restated Agreement-) is entered into as of October 15,

1992 between the CLINTON/GORE GENERAL ELECTION COMMI'l'TEE, INC.,

an Arkansas non-profit corporation (the ·Committee·), having

offices at 112 West Third Street, Little Rock. Arkansas 77201,

and VALERIE GRAVES (·Consultant·), an individual residing at 32

West lOSth Street, Apartment 2. New York, New York 10025.

WHEREAS. the Committee anc Consultant entered into an

Ag=ee~ent dated as of July __ , 1992 (the ·Original Agreement"),

relating to the provision oy Consultant of certain creative

~edia services;

WHEREAS, follo~ng the date of the Original Agreement,

Consultant and the Committee recognized that certain of the

se~i=es provided ~y Co~sultant were for the benefit of the

~emoc=atic National COrnl~~~=e (:~e ·~NC·) :at=e= t~an ~~e

Coanit~ee;

WHEREAS, the ~ar~ies recognize and agree that the

Co~ittee and the ONC should pay separately for services

provided to each;

WHEREAS. the Co~ittee and Consultan~ desire to amend ______~nc;~_gEt_ett1eOrigina:'Ag;e_efllent .to. _inc:lud? only t __'lose _

se~ices to be provided =y Consultant to the Committee; and

WHEREAS. conc~r=ently with the execu~icn and delivery

of t~~S Restated Agreement, the ONC and Consu:tant are entering

into a separate cont=ac~ with :espe=~ to that ?ortion of C~~sultant's services to be provided to the esc;

NOW, THERE=ORE, in conside:ation of t~e foregoing and

of ~~e mutual agreements sec fort~ herein, t~e parties agree as

:o::ows:

.."'"')

, Services. ~he Committee hereby engages

Consultant to orovide. and Consultant agrees to provide, media c=~sulting, produc~ion a~d :elated services for the Clinton

ge~eral election campaign, as more specifical:y provided in

Ex~iOi~ A hereto.

2. Compensation and Expenses. For all services

pursuant to t~is Agreement and all associated expenses. the

Commit~ee shall pay to Consultant up to the amount provided in

EX;'O'~ A hereto. ~he Committee shall also reimburse

Consultant for t:avel expenses (coach ai:fare, hotels, meals

tr""'<""t,..~~~ /

- -.--------'-, ..----;---- - c~r.o
in

and ground transportation) reasonably incurred by Consultant in

performing services under this Agreement and not included

within production costs pursuant to Exhibit A, provided that

Consultant shall not be reimbursed for expenses which in the

aggregate exceed the amount set forth in Exhibit A hereto

unless, prior to incurring such e:penses, Consultant has

received from the Committee or from Mandy Grunwald of Great

American Media (-Ms. Grunwald-) written authorization for such

expenses. Payment to Consultant for fees and expenses under

this Agreement shall be due upon sutmission of Consultant's

stat~~ents t~erefor in accordance with the schedule set forth

in Exhibit A hereto and not later than November :5. 1992,

itemized in such detail as the Committee may reasonably

request. Consultant shall maintain books and records adequate

for the confi~ation of all such fees and expenses, which shall

be available for inspection by the Committee upon reasonable

request. No payment of fees or reimbursement of expenses by

the Committee shall be due for an~ activities of Consultant

outside the scope of this Aqreeme~t.

3. ?Arsonne' and :aci:;-·As. Consultant sha~l

furnish all :ersonnel, services, =acilities, equipment and

supplies req;ired in connection wi~h performance under ~his

Agreement, i:cluding ob~aining se~ices and materials f=om ar.

authorized s~=contrac~ors as neece~. Consultant shall ~ork

under the di==c~ion of Ms. Grunwa:= or David Watkins a~~/or

_~J:_~E!L r_epresent at~ves-desig::ated-::y- ~he·· Commit~ee- orMs-:;------

. Grunwald. C=nsultant shall provi== all services under ~his

Agreement, a:d shall accord such ;riority to services ~e=eunde=

as is necess~ry to assure full ar.= timely per:or.nance

Consultant ~:=er :~is Agreement. :onsultant shall not e::ter

into any con~=ac~s or commi~~ents .ith third parties f==

services or ;roducts to be provided pursuant to this Agreement,

without the ;rior written approva: of the Committee or ~.

Grunwald.

4. Comm;,':,:g" Supper'.:. The Committee and Ms.

Grunwald shall provide to Consultant information and

coordination as reasonably reques~ed by Consultant and needed

to enable Co::sultant to perform i~s services pursuant t: this

Aqreement.

5. ;o~. ~~e ~er~ of ~~~s Agreement shall extend

through Nov~er 15, :992. ~he C=rnmittee may, by written

notice to Consultant, ter~inate t~is Agreement at an ea=lier

date, provlced, however, that the Committee shall nevertheless

pay Consultant the minimum fee provided in Exhib;,; 0 (i:

applicable) and any other amounts ~ecoming due prior to the

=ate of te~nation, including any charges of authorized

0595f
-_:-= . ....... _.:z~

.~~-

,.~

subcontractors properly incurred by Consultant as a result of ~~

any such termination. To the extent practicable, Consultant -'-.:-

shall include like termination provisions in any agreements ,__ with subcontractors. All rights and obligations of the parties~

arising -prior thereto shall survive the termination of this _~_

Agreement. .~~:

6. Content, Ownership and Conf;deotialitv • The

c:>ntent of all media strategies, plans, advertisements or other"

pUblic communicat~ons shall be subject to prior approval by the

Committee's representative. All right, title and interest in

all completed and partially completed wor~ product (the -Work

product-) of Consultant developed pursuant to this Agreement

shall automatically vest in the Committee, and exclusive

possessioa thereof shall be delivered to ~e Committee

forthwith upon request by the Committee, Consultant hereby

acknowledges that she has Obtained and ~i:: continue to Obtain

<now ledge of a~d access to confidential, sensitive and valuable

information concerning the Work Product a~ other information

relating to the Committee (-Restricted :n:ormation-), Which may

inclUde but is not li=ited to political ac: media strategies ~nd plans, contracts :~d financial in:o~a~ion, pertaining to, ~sed by or known to ~=e Committee. anc an: and all ot~er

i~:ormation concerni~g the affairs and :i~ances of t=e

:=mmittee or its mem=ers, whic~ info~a~~~= (a) is net

. - ·~enera l-ly·knownbyo=-avai-l able to the -ge::.-::!~aT·p·1.lolic- (w1.thout

:ault of Consultant), (b) was not availab:e to Consultant on a ~onconfidential basis prior to receipt f==~ the Committee and

is not received thereafter from a thi=~ party without. =estricti~ without breach of this Agreement, and (c) is ~Ct disclosed pursuant to a requ~rement 0= a government agency

~r legal process. Consultant therefore a~rees at all times

after t~e date hereof (x) to keep all suc::. ~estricted

:n:ormation confidential, (y) to disclose ~estricted

:n:ormation only to ~hose subcontractors a~d agents of

:onsultant who (i) reasonably need to have access to the ~estricted Information, (ii) have been ap~=oved in advance in ~riting by the Committee or Ms. G~~nwald a:d (iii) have agreed

:0 be bound by the terms of this Section 5, and (:) not to use

(and to cause any persons to whom Consultant discloses such ~estricted Information to agree not to use) such Restricted

Information on its own behalf or on behal= of any other person,

:irm or entity. Upon request by the Committee, Consultant

shall deliver to the Committee forthwith all copies of

Restricted Information. In the event c: a breach or threatened

breach by Consultant or any person to whom Consultant has

=isclosed Restricted Information of the p=~visions of this

paragraph. the Committee shall be entitled to an injunction .

restraining Consultant or such person :roo using or disclosing,

- .: - aS9Sf
c>

,-

,-

in whole or in part, any such Restricted Information. Nothing"'v,,,

herein contained shall be construed as prohibiting the

Committee from pursuing any other available remedy for such

breach or threatened breach, including the recovery of damages;

7. Representations and Warranties. Consultant

hereby represents and warrants as follows: All services

furnished under this Agreement ~ll be in accordance with the

terms of this Agreement. Information and materials furnished

by the Consultant will not violate the proprietary or other

:egal rights of any other party. Consultant is an individual

having full capacity, power and authority to enter into and to

perform this Agreement. Execution. delivery and performance of

this Agre~nt by Consultant will not violate the te~ of any

other employment relationship or other obligation of

Consultant. This Agreement constitutes a legal, valid and

binding ob:igation of the Consultant, enforceable in accordance

with its t~~. Consultant has not paid or agreed to pay any

commission, percentage or fee of any kind to any other person

or entity, contingent upon or resulting from entering into or

?erforming services under this ~;reement. :n the per=ormance

of this Agreement. Consultant s:all cocp17 with all a~plicable

laws and regulations.

The Committee hera=y represents and warrants as

--follows: :::l£onnationandmater:',;l.sfur:lXsh,ed_ by the Committee

will not v:'olate the proprietar:: or other legal r:i.ght-s--o-f-any

other par~7. The Committee is a c~rporation duly organized and

in good s~=nding under the laws ~f Arkansas and has f~ll power

and autho=:'~y to enter into and ~o perform this Agre~ent.

~~is Agre~ent constit~tes a le~=l. valid and binding

obligacior. of the Committee, en=~:ceable in accordance with its

terms. Ir. ~he performance of t:is Agreement. the Co~ittee

shall com;:y with all applicable laws and regulations.

e. LiabilitY and :nda~nity. Nothing in this Agreemen~ snaIl be construed to constitute either par~y a

partner, ~ployee or agent of t~e other. nor shall either party

have authority to bind the othe: in any respect. it being

intended ~at each party shall =~~ain an i~dependent ~ontractor

solely res?onsible for its own ac:ions. ~he Committee shall

not be li~le under any contrac~s or obligations of C~nsultant,

apart from this Agreement, or for any acts or omissions of

Consultant and its subcontracto=s and agents. Consultant

agrees to indemnify and hold har.:less the Committee and its

members. officers, employees and agents from any and all

claims. losses. damages and exp~ses (including atto~ey fees)

in any manner resulting from or ar:sing out of any contracts or

obligations of Consultant or the performance or breach of

-~'.,~~~,

;~

- 4 - OS9Sf
" ,.

-:'-\1

Consultant·s obligations under this Agreement. except as

expressly cont~~plated herein. Neither Consultant nor her

subcontactors or agents shall be liable under any contracts or

obligations of the Committee. apart from this Agreement, or for-·

any acts or omissions of the Committee and its members,

officers, employees and agents. The Committee agrees to __ indemnify and hold harmless Consultant and her subcontractors

and agents from any and all claims, losses# damages and ~.

expenses (including attorney fees) in any manner resulting from~

or arising out of any contracts or obligations of the Committee

or the performance or breach of the Committee'S obligations

under this Agreement, except as expressly contemplated herein.

9. Miscellaneous. This instrwnent contains the

entire agreement of the parties and supersedes all other

agreements or understandings bet~een them. This inst~~nt may ~ot be changed orally. but only =y an agree=ent in writing signed by the party against whom enforcement of any waiver,

=hange, extension or ~ischarge is sought. All covenants,

agreements, representations, warranties an~ indemnities made ~erein by either party shall survive the e~ecution and delivery

== the Agreement and shall =ind and inure t~ the benefit of ~heir respective successors and assigns, ?=~vided that the

rights and obligations of a ?ar~y t~ t~is A;=eement shall not

=e assignable withou~ the prior written c=~sent of the other

?arty hereeo. Desc:i-;:-:ive headings in ::lisAgre~ltlent_ilI'e__for _ ::onveni.ence-only--and--snalT -nota:fect :~e c::onstruc~ion of this ~greement. All co~ications and notices ~ade under this ~greement shall be de:iverec to the parties at their respective

addresses set forth a:ove. ~he Agreement shall be governed by ~he laws 0: Arkansas (not including the c~=ice-of-law rules

thereof).

:~ WITNESS ~~-REOF. the parties ~ereto have duly ~xecuted this Ag=eeme~t as of the date first hereinabove set =:J=':~.

~INTON/GCRE G~~

ELECTION COMMITTEE. INC.

3y: r(~.IJ!Uf!!1i) aVld WatJuns

Vice President and

Deputy Campaiq~ Manager

OS9Sf

7 ---- --T ------:;----- -- of (0 ~-=-_
EXHIBIT A

SERytc;:S AND COMP'£'5SbT!ON

1. Services. Consultant shall provide advice and assistance

in the development and e:e~~t~on of an overall media

strategy and plan for the Committee and the design and

production of television and radio advertisements

consistent with such strategy, and s~ll participate in

associated meetings and telephone conferences on a

regular basis. all subject to t~e direction of the Commit~ee and Ms. Grunwald and in conjunction and

coordination with other fir=s and persons providing media

advice and assistance to the Committee. Consultant

acknowledges that portions of Consultant's Work ?roduct

may be combined and used with the Work Product of other

media advisors t~ the Committee.

.,

..

3 •

4.

Ppoduc;icn. Media production services may be provided

di=ec~:y or through the use of subcontractor~, s~ject to

prior <t;ittell__approval by. t::'eCommittee orMs .-G~wald-

... -of any such services and subconl:ractor.

Compe~sation. The Committee shall pay Consultan~ an

aggre~ate of $56.700. in i~stallments as follows: on

Auguse~l...-1.992 ~S25..000; o%k-cSeptembe7::=l.S ..:~.l9Ur'«$2~

ana- OIt"'Nov~PI992:;.."$~1011: provided tnat if the

Agree=ent is terminated prior to the end of its term. the

Committee shall pay an amount prorated according to the

numbe: of days since the previous installment was due.

All p=:d~ction services shatl be billed. and paid in an

amount equal to Consultant's direct cost therefor,

without ~ark-up or commission of any kind.

~xperSAS. Actual e:penses not to e:ceed Sl.000.

- 6 - OS9Sf

_'. ~:-l.:Br-""':r

:::.-;, ~(o"__ -------- of en
February 1, 1995

RECEIPT FROM THE

UNITED STATES DEPARTMENT OF TREASURY

FOR A

REPAYMENT OF PRESIDENTIAL PRIMARY MATCHING FUNDS

AND A

PAYMENT TO THE GENERAL FUND OF THE U.S. TR~~SURY

Received on February 1, 1995, from the Federal Election

Commission (by hand delivery), a check drawn on Worthen

National Bank (ChecK '15433) in the amount of $1,383,587.

-The--che-ck-represent~ c1__!ina1 repayment from the Clinton for

President Committee formatch-ing-funds-r-eceived_inex_c~ssof

entitlement ($1,072,3441, non-qualified campaign expenses -

($270,384) and stale dated checks ($40,859).

The repayment/payment should be deposited as follows:

Matching Payment Account

General Fund of u.S. Treasury

$1,342,728

40,859

$1,383,587

Presented by:

fo r the

Federal Election Comm{sslon

Received by:

for the

Un:red States Treasury
·.

! ! ,.

CUNTON FOR PRESIDENT COMMITTEE

PHo"e (so,) 37~'290

P.O. BOX 2H,

LITTLE ROCK. AR 72203

WOIfTHE)I NAtlONAL UHJ(

LITTLE ROCK, All 72203

5,·7-820

January 30. 1995

15433

S1.383.5Si.OQ

DATE AMOUNT

······One ~illion thre~ hundred eighty-tHree thousand five hundred

e i;":1 t y- sev~n dOi-l.a·i-s and·ze-ro·cents·* *~*"** **  " ** " * **-** *-***" ._*-**-*_••.•_-

=("'

u. S. Treasury

(

\

/
FEOER.-\l £lECTIO'- (0·\.\.\.\15510'-

February 1,1995

RECEIPT FROM THE

UNITED STATES DEPARTMENT OF TREASURY

FOR A

REPAYMENT TO THE GENERAL FUND OF THE U. S. TREASURY

Received on February 1, 1995, from the Federal Election

Commission (by hand delivery), a check drawn on Worthen National

Bank (Check 113222) in the amount of $109,061. The check

represents a partial repayment/payment from the Clinton-Gore '92

Committee for apparent prohibited contributions ($1,000),

apparent duplicate payments ($6,479), non campaign related

activity ($70,296), income earned on the investment of federal

funds ($6,646) and stale dated checks ($24,640).

T~e repayment/payment should be deposited into the General

Fund of the U. S. Treasury.

Clinton - Gore '92 Committee

Amount of Repayment: $109,061

Presented by: Received by:

\>-- " '

for the

United States Treasury

. -. for the

Federal Election Commission
CUNTON • GORE' 9 2 COMMITTEE

PHONE (SO,) 372,'"2

P.O. BOX 27.'

LITTLE ROCK. "'R 72203

WOInMVC N...nO~ UInC

LITTLE ROCK, AA 722C3

1,·7-&20

13222

PIi'I "·One 'lund red

:.."111«

CIIIlSI U.S. 7reasury

Of

'J)

January 30. 1995 $109.C5:.00

nine thousane sixty-one dollars and zero cents·· ....... • .......

-------.----
FEO(R>\L ELECTI\)' CO\\\\i5510' FE; u ::.l

FEBRUARY 3, 1995

DEMOCRATIC

DIRECTOR

JOHN C. SU

STAFF DIRE

FROM: ROBERT J. CO~TA

ASSISTANT STAFF

AUDIT DIVISION

SUBJECT: REPAYMENTS lECEIVED FROM THE LAROUCHE

CAMPAIGN, CLINTON FOR~PRESIDENT COMMITTEE, AND

CLINTON-GORE'92 COMMITTEE

THROUGH:

TO:

This informational memo is to advise you of three repayment

-cheeks-reeeived-frollLthreepresi_dent.i_a.l com.mi_t!ee~ _as JOllOW5 :

LaRouche Democratic Campaign (1988) - $159,790.93

The check represents a final repayment for matching funds

received in excess of entitlement and non qualified campaign

expenses.

Clinton for President Committee - $1,383,587

The check represents a final repayment for matching funds

received in excess of entitlement, non-qualified campaign

expenses, and stale dated checks.

Clinton-Gore '92 Committee - $109,061

The check represents a partial repayment for apparent

prohibited contributions, apparent duplicate payments, non

campaign related activity, income earned on the investment of

federal funds, and stale dated checks.

Attached are copies of the checks and the receipts sho~ing

delivery to the Department of the Treasury. Should you ha~~ any

questions regarding the repayments, please contact Ray L:s: a:

219-3720.

Attachments as stated
Februar-y 1, 1995

RECEIPT FROM THE

UNITED STATES DEPARTMENT OF TREASURY

FOR A REPAYMENT OF

1988 PRESIDENTIAL PRIMARY MATCHING FUNDS

Received on Febr-uar-y 1, 1995 , from th~ Federal Election

Commission (by hand delivery), a cashiers check drawn on

Burke & Herbert Bank & Trust Co. (Check t209832) in the amount

of $159,790.93. The check represents a final repayment from the

LaRouche Democratic Campaign representing matching funds

received in excess of entitlement and non qualified campaign

--expenses~--- ------ ---- ------------

The payment should be deposited into the Matching Payment

Account

LaRouche Democratic Campaign

Amount of Payment: $159,790.93

Presented by: Received by:

for th~

Federal Election Commission

". -

for the

United States Treasury
...

,

..;.

Ale,;arCf'a. Va januarV' 25, 1922

209832

P ..v-:J-.... E::"::E"OF_*_l_:_._S~. Treas., Remitted through the federal Elect. Co=. S 159.790.93

:It

CASHIER'S CHECK 'r>-E DoI... pC,......se .. ~~ 90-"0 wn..l e.e PS'OUIQEO

-----Bf~ ~~SCH_EQl._~~;lII-.AC€C_OU£_:rO J:H£FT_OR-l.OSS- _

/

-,
Feb::uary 1, 1995

RECEIPT FROM THE

UNITED STATES DEPARTMENT OF TREASURY

FOR A

REPAYMENT OF PRESIDENTIAL PRIMARY ~~TCHING FUNDS

AND A

PAYMENT TO THE GENE~~L FUND OF THE U.S. TREASURY

Received on February 1, 1995, from the Federal Election

Commission (by hand delivery), a check drawn on Worthen

National Bank (Check ~15433) in the amount of $1,383,587. The--che-ck-r~p'[esentsa£inal_rep<iyment from the Clinton for

Pre s ident Commi t tee for ma tchi ng fu-rid-s--receT,Yed-fn-exce-ss- ~f--­

entitlement ($1,072,344), non-qualified campaign expenses

($270,384) and stale dated checks ($40,859).

The repayment/payment should be deposited as follows:

Matching payment Account

General Fund of U.S. Treasury

$1,342,728

40,859

$1,383,587

Presented by:

:0: the

Federa: Elec:icn Comm:ss:~~

Rece i ved by:

. -- - ---,

for t.he

~~:ted States Treasury
.*.**.*.*One rn..i.~lion thre",,_hundred eighty-tHree thousand five hundred

ei;hty-s2ven collars and zero cents*+,*,*******,**- -·** -*-*·-*-*-*-*-*i:~-**,*-

15433

S:,333,:S-.OC'

WORTHEN NATIONAL BANK

LITTLE ROCK. AR 72203

8~·T·82()

January 30, 1995

u. S. Yreasury

(

.'

CLINTON FOR PRESIDENT COMMITTEE

P,"ONE (501) 375-'290

P_O. 80X 27.'

... ;TiLE ~OCK. A,q 72203
Feb::uary 1, 1995

RECEIPT FROM THE

UNITED STATES DEPARTMENT OF TREASURY

FOR .:..

REPAYMENT TO THE GENERAL FUND OF THE U. S. TREASURY

Received on February 1, 1995, from the Federal Election

Commission (by hand delivery), a check drawn on Worthen National

Bank (Check ~13222) in the amount of $109,061. The check

represents a partial repayment/payment from the Clinton-Gore '92

Committee for apparent prohibited contributions ($1,000),

apparent duplicate payments ($6,479), non campaign related

activity ($70,296), income earned on the investment of federal

funds ($6,646) and stale dated checks ($24,640).

T~e repayment/payment should be deposited into the General

Fund of the U. S. Treasury.

Clinton - Gore '92 Committee

Amount of Repayment: $109,061

\, ,

Presented by:

for the

Federal Electlon Commission

Received by:

x --.,.,-

for the

united States Treasury
CUNTON· GORE' 9 2 COMMITTEE

PHONE (501) 372·11192

po. BOX 2741

Lln'lE ROCK. AR 12203

WOIlTHEN NATlONAl. !lANK

lITTLE ROCK, AR =

8'.7-820

January 30. : 995

•

13222

S:09.C'~:.OC'

PAv***'**'***Orle "lundre:: :i:'~2 ':~ot1san;:: sixty-one ~all3.r-s and ze:-o cen:,s+-lr"lt**"*"'t"*TT"

c. 54 7reasury