FEDEIBL ELECTION COMMiSSION 

WASHINGTON, D.C. 20463 

October 11,2011 

MEMORANDUM 

To: The Commission 

Through: Alec Palmer 

StaffDirector 

From: Patricia CarmonaJi^ PC* 

Chief Compliance Officer 

Thomas Hintermister -v*^ 

Assistant StaffDirector 

Audit Division 

Alex BoniewiczJP] 

Audit ManagerC-/ 

By: Marty Kuest/'^S^ 

Lead Auditor 

Subject: Audit Division Recommendation Memorandum on Obama for America 

(A09-06) 

Pursuant to Commission Directive No. 70 (FEC Directive on Processing Audit Reports), 

the Audit staffs recommendation is presented below and the finding is discussed in the 

attached Draft Final Audit Report (DFAR). Please note OFA did not request an audit 

hearing and only provided mitten comments in response to the DFAR, 

The Office of General Counsel has reviewed this memorandum and concurs with the 

recommendation. The Office of General Counsel has also suggested the following edits 

on page 4 section B, paragraph 2 Df the DFAR to improve clarity regardinjg the OFA's 48-

hour notice submissions. 

"Subsequent to the exit conference, OFA provided printouts of contributions that it 

believed had been reported on its 48-hour notice submissions. There were numerous 

contributions on the printouts that were not found on the public record. The difference 

between the sum of die printout totals and the total for all 48-hour notices appearing on 

the public record was approximately $1,020,000. Records regarding these submissions 

indicate that the Commission placed all the data transmitted by OFA on the public record. 

Further, there are no filters in place that would restrict any data submitted." 
The edits suggested by the Office of General Counsel will be incorporated into the finding 

as presented in the Proposed Final Audit Report. 

Apparent Failure to File 48-Hour Notices 

The Audit staff recommends that the Commission find that Obama for America 

failed to file required 48-hour notices in 2008. 

If this memorandum is approved, a Proposed Final Audit Report will be prepared within 

30 days of the Commission's vote. 

Should an objection be received. Directive No. 70 states that the Audit Division 

Recommendation Memorandum will be placed on the next regularly scheduled open 

session agenda. 

Documents related to this audit report can be viewed in the Voting Ballot Matters folder. 

Should you have any questions, please contact Marty Kuest or Alex Boniewicz at 694-

1200. 

Attachment: 

- Draft Final Audit Report on Obama for America, 

cc: Office of General Counsel 
Draft Final Audit Report of the 

Audit Division on 

Obama for America 

(January 16, 2007 - December 31, 2008) 

Why the Audit 

Was Done 

Federal law permits the 

Commission to conduct 

audits and field 

investigations of any 

political committee that is 

required to file reports 

under the Federal 

Election Campaign Act 

(the Act). The 

Commission generally 

conducts such audits 

when a committee 

appears not to have me| 

the threshold 

requirements for 

substantial compliance^ 

with the ActJjSits^udit 

determine 

comn^mQ complied^ 

the liflnbns, 

prohibitiSB^d 

disclosure iShcements 

ofthe AcL 

Future Actioi 

The Commission m ^ 

initiate an enforcement 

action, at a later time, 

with respect to the matter 

discussed in this report. 

About the Campaign 

Obama for America (OFA) is th^^cipal campaign committee for 

Barack Obama, a candidate £|mS|Bemocratic Party's nomination for 

the office of President of ibmmte&l^es. OFA is headquartered in 

Chicago, Illinois. For nMffe%formatioBfeee the chart on the Campaign 

Organization, p. 2. 

Financial Ai 

• Receipts 

o distributions frdi 

o H^^jjautions from^ 

HtiM|kiDmittees 

o Tri^sfers 

CoAnpees 

o OffseEto Operatlhg 

Expenclbires 

o Other Rflp$ts 

^^irfts 

DisDi^Kients 

Operating Expenditures 

contribution Refimds 

Other Disbursements 

Total Disbursements 

$ 664,642,527 

14,075 

86,950,000 

25,131,132 

1,675,373 

$ 778,413,107 

$ 706,559,330 

5,756,081 

47,944,663 

$ 760,260,074 

Finding and Recommendation (p. 3) 

• Apparent Failure to File 48-Hour Notices 

2 U.S.C. §438(b). 
Draft Final Audit Report of the 

Audit Division on Obama for 

America 

(January 16, 2007 - December 31, 2008) 
Table of Contents 

Part I. Background 

Authority for Audit 

Scope of Audit 

Part II. Overview of Campaign 

Campaign Organization 

Overview of Financial Activity 

Part III. Summary 

Finding and Recommendation 

Part IV. Finding and Recomi 

Apparent Failure to File 48-Hour Notices' 

Page 
Parti 

Background 

Authority for Audit 

This report is based on an audit of Obama for America (OFA), undertaken by the Audit 

Division of the Federal Election Commission (the Commission) in accordance with the 

Federal Election Campaign Act of 1971, as amended (the Act). The Audit Division 

conducted the audit pursuant to 2 U.S.C. §438(b), which penni|9R?)Sommission to 

conduct audits and field investigations of any political comn|d|Ke that is required to file a 

report under 2 U.S.C. §434. Prior to conducting any audUdmcRfta^ subsection, the 

Commission must perform an intemal review of repoils ^td by se^^d committees to 

determine if the reports filed by a particular commj^Rli^et the thresQ^ requirements 

for substantial compliance with the Act. 2 U.! 

Scope of Audit 

Following Commission-approved procedures, the 

factors and as a result, this audit exai^iEied 

1. the receipt of excessive contributi 

the receipt of contributions from pn 

the disclosure of contributions receiv 

the disclosure of indivi^i^ contribute] 

the consistency b 

the completene 

other committee 

ff evaluated various risk 

name of employer; 

ords; 
Part II 

Overview of Campaign 

Campaign Organization 

Important Dates 

• Dateof Registration January 16,2007 

• Audit Coverage Januaiy 16,2007 - December 31,2008 

Headquarters Chicago, Illinois' 

Bank Information 

• Bank Depositories Four J^fck 

• Bank Accounts Sixteen 4^ ^|^ ^ 

Treasurer 

• Treasurer When Audit Was Conducted M^^nS^esbitt Ma^k2007 - Present 

• Treasurer During Period Covered by Audit Egbert R. Bauer January ilfe|2QQ»7 - May 

•Sjfe^^^g^. Nesbit ^'To, 2007 

Management Information 

• Attended FEC Campaign Finance Senk|L^ Yes ^fc^ 

Recordkeeping Tasks 

Ovej of Ffl 

Ldited 

LnciqjrActivity 

Lounts) 

Cash-on-hand ^ January'V^Q^B^^g^^ r $ 0 

Receipts j-^i^l] ^ mi|H|||pF 

o Contribi^^s fron7^^^duaIM|k 664,642,527 

o ^^^^I'^'t^^^^ f^om Otnlk^liticS^^^ 

14,075 

o Transfers E^^kAuthorizedB>mmittees 86.950,000 

o Offsets to OpiSBhos Expenlitures 25.131,132 

o Other Receipts ^^l^j^^ 1.675,373 

Total Receipts $ 778,413,107 

Disbursements ^ 

o Operating Expenditures 706,559.330 

o Contribution Refunds 5,756.081 

o Other Disbursements 47.944.663 

Total Disbursements $ 760,260,074 

Cash-on-hand @ December 31,2008 $ 18,153,033 

^ Originally registered as the Obama Exploratory Committee, headquartered in Washington, DC; the committee's name was 

changed to Obama for America and the headquarters was relocated to Chicago, Illinois, according to an amended statement of 

organization filed on February 12,2007. 
Part III 

Summary 

Finding and Recommendation 

Apparent Failure to File 48-Hour Notices 

Based on audit fieldwork, OFA did not file required 48-hour notices for 1,312 

contributions totaling $ 1,972,266 received prior to the general^liion. In response to 

the Interim Audit Report, OFA stated that it had no further infivmation to add at this 

time. 

(For more detail, see page 4.) 
Part IV 

Finding and Recommendation 

I Apparent Failure to File 48- Hour Notices 

Summary 

Based on audit fieldwork, OFA did not file required 48-hour notices for 1,312 

contributions totaling $ 1,972,266 received prior to the general election. In response to 

the Interim Audit Report, OFA stated that it had no further infqpi0lian to add at this 

time. 

Legal Standard 

Last-Minute Contributions (48-Hour Notice). Ca[Au^commi!^ynust file special 

notices regarding contributions of $1,000 or mor^^eived less than zl^^s but more 

than 48 hours before any election in which th^^^idate i^^^imning. Thi^Q^^gpplies to 

all types of contributions to any authorized cgmnMtee of tdlsandidate. 11 

§ 104.5(f). 

Facts and Analysis 

A. Facts 

During audit fieldwork, a comparison Wi 

contributions of $1000 

notice filing period^^^us re 

which OFA failed^^fc^the re 

arose from a transfer repBled 

a joint fundr^»|^k£pmmi 

Committ^^RQ|B|itrib 

disclos^ reports fiiSH&QV 

and^^^sr 23. 

hour notices filed to 

hich had B^TreportedppEceived during the 48-hour 

identified j|312 contnbutions totaling $1,972,266 for 

ed notices.^Lmajority of the missing 48-hour notices 

ber 24,2||8 from the Obama Victory Fund (OVF), 

ts were OFA and the Democratic National 

attribute? to the October 24 transfer were traced to the 

that they had been received between October 16 

B. Interiml^J|it Report Bi Audit Division Recommendation 

Prior to the en^mudit fiefllwork, and again at the exit conference. Audit stafif provided 

OFA with scheduiR|£^fftributions for which 48-hour notices were not filed. At the 

exit conference, the^^ representative stated that the schedule was being reviewed and 

that comments or cd^ections would be forthcoming. 

Subsequent to the exit conference, the OFA provided copies of what it believed were the 

complete batches for each of its seventeen 48-hour notice submissions. Some of the 

batches contained contributions not found among the contributions listed on the public 

record. The difference between the sum of the batch totals and the total for all 48-hour 

notices appearing on the public record was approximately $1,020,000. Records regarding 

' The 48-hour report period ran from October 16* through November 1". 
these submissions indicate that the Commission placed all the data transmitted on the 

public record. Further, there are no filters in place that would restrict any data submitted. 

Since the Audit staff has been assured that all data submitted is routinely posted to the 

public record, OFA was asked whether some filter might have been inadvertently applied 

by its data processing vendor. No response to this query has been received from OFA to 

date. 

The Audit staff recommended that OFA provide: 

• documentation to demonstrate that the 48-hour notices wes&filed 

for the contributions in question; or, 

documentation establishing the contributions were nflAlbject to 

48-hour notification; and/or, 

any written comments it considers relevant. 

C. Committee Response to Interim Audit 

In response to the Interim Audit Report, OFi 

add at this time. 

ation to