FEDERAL ELECTION COMMISSION

WASHINGTON, D.C. 204&3

December 15, 1999

MEMORANDUM

SUBJECT: PUBLIC ISSUANCE OF THE FINAL AUDIT REPORT ON

DENNIS NEWINSKI FOR CONGRESS

TO:

FROM:

RON M. HARRlS

PRESS OFFICER

PRESS OFFICE

ROBERT 1. COSTA H

ASSISTANT STAFF DI~dr;;;­ AUDIT DIVISION

Attached please find a copy ofthe final audit report on Dennis Newinski For

Congress which was approved by the Commission on December 9, 1999.

Informational copies ofthe 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

VOffice ofPublic Disclosure

Reports Analysis Division

FEC Library
REPORT OF TBKAUDIT DIVISION

ON

Dennis Newinski for Congress

Approved December 9, 1999

FEDERAL ELECTION COMMISSION

999 E STREET, N.W.

WASHINGTON, D.C.
TABLE OF CONTENTS

DENNIS NEWINSKI FOR CONGRESS

~'1

t!1 Page F~

['1

• Executive Summary p~

y~

fU Final Audit Report 3

Q

,"- Background 3

;"::

=

U Findings 5

flJ

ru Legal Analysis 12

Transmittal to Committee 15

Chronology 16
FEDERAL ELECTION COMMISSION

WASHINGTON. D.C 2040)

REPORT OF THE AUDIT DIVISION

ON

DENNIS NEWINSKI FOR CONGRESS

EXECUTIVE SUMMARY

DNFC registered with the Clerk ofthe U.S. House ofRepresentatives on

February 22, 1994 as the principal campaign committee of Dennis R. Newinski,

Republican candidate for the U.S. House ofRepresentatives from the State ofMinnesota,

4th District. Mr. Newinski filed a Statement ofCandidacy for the 1998 election on June

11,1997.

The audit was conducted pursuant to Section 438(b), which states that the

Commission may conduct audits of any political committee whose reports fail to meet the

threshold level of compliance set by the Commission.

The findings ofthe audit were presented to the DNFC at an exit conference held

at the completion offieldwork on June 3, 1999 and later, in an interim audit report. The

DNFC's responses to those findings are included in this final audit report.

The following is an overview ofthe findings contained in the final audit report.

Apparent Excessive Contributions - 2 U.S.C. §441a(a)(I)(A) and (a)(2)(A)

DNFC accepted 51 contributions from 36 individuals which exceeded the contribution

limits by $33,075. In addition, to date, DNFC never refunded nor did it report on

Schedules D, $14,775 in refunds payable for excessive contributions accepted during the

1995 - 1996 election cycle.

DNFC also accepted excessive contributions in the amount of$5,710 from local

party committees.

DNFC filed amended Schedules D (debt schedules) which listed all but two

excessive contributions.
Misstatement ofFinanci~\1 Activity - 2 U.S.C. §434(b)(l),(2) and (4). DNFC

understated its 1998 receipts by a net amount of $6,455. The majority of the problem

stemmed from in-kind contributions not reported and a net underreporting of

contributions during the period between 8/27/98 and 11/30/98. Disbursements for 1998

were understated by a net amount of $4,848. This resulted in large part from an addition

error on the Pre-Primary report and from Pre and Post-Primary disbursemcnts not

reported.

The ending cash on hand was misstated due to the errors noted for receipts and

disbursement and a math error in the cash summary.

DNFC filed an amended Summary and Detailed Summary page which reported

materially corrected numbers.

ltemization of Contributions from Individuals - 2 U.S.C. §434(b)(3)(A).

DNFC failed to itemize contributions in the amount of$27,350. The majority ofthe

itemization errors occurred during the fourth quarter of 1998 and appear to be related to

contributors who had made multiple contributions.

DNfC filed amended Schedules A which corrected all itemization errors.

Debts and Obligations - 2 U.S.C. § 434(b)(8); 11 CFR Section 104.11 (a) and

(b). DNFC failed to itemize obligations totaling $27,135. This amount was comprised of

debt which was current for the 1997 - 1998 election cycle ($12,380) as well as refundable

excessive contributions ($14,755) made during the 1995 - 1996 election cycle.

DN FC filed amended Schedules D for all 1995 - 1996 refundable excessive

contributions ($14,755), and all but two excessive contributions from the current cycle

($39,210). DNFC also filed amended Schedules D for debt originally reportcd but not

itemized. DNFC did not file schedules for debt amounting to $12,380 from the 1997 -

1998 election cycle and dropped a total of $1 0,041 which had previously been correctly

reported on the 1997 Year-end report.

2
FEDERAL ELECTION COMMISSION

WASHINGTON. DC. 20463

AR#99- 3

I.

REPORT OF THE AUDIT DIVISION

ON

DENNIS NEWINS[(J FOR CONGRESS

BACKGROUND

A. AUDIT AUTHORITY

This report is based on an audit of Dennis Newinski for Congress (DNFC),

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

in accordance with the provisions of the Federal Election Campaign Act of 1971, as

amended (the Act). The audit was conducted pursuant to Section 438(b) ofTitle 2 of the

United States Code which states, in part, that the Commission may conduct audits and

field investigations of any political committee required to file a report under Section 434

of this title. Prior to conducting any audit under this subsection, the Commission shall

perf01111 an intemal review of reports filed by selected committees to determine if the

reports filed by a particular committee meet the threshold requirements for substantial

compliance with the Act.

B. AUDIT COVERAGE

The audit covered the period from January I, 1997 through December 3 I,

1998. DNFC reported a beginning cash balance of$133 1

; total receipts for the period of

$374,795; total disbursements for the period of$374,167; and an ending cash balance of

$2,356."

C. CAMPAIGN ORGANIZATION

DNFC registered with the Clerk ofthe U.S. House ofRepresentatives on

Febmary 22, 1994 as the principal campaign committee of Dennis R. Newinski,

RepUblican candidate for the U.S. House ofRepresentatives from the State ofMinnesota,

The begiIming balance represents funds remaining from the 1995/1996 bid for Congress.

All amounts in this report have been rounded to the nearest dollar. These amounts do not total

due to mathematical discrepancies.

3
4th District. Mr. Newinski filed a Statement of Candidacy for the 1998 election on June

1J, 1997.

The Treasurer ofDNFC for the period is Richard C. Reiner. DNFC

maintains its headquarters in St. Paul, Minnesota.

To manage its financial activity, DNFC used one bank account and one

savings account. Approximately 300 disbursements were made from the bank account.

DNFC received about 5,300 contributions from individuals, totaling approximately

$326,127 which represented about 85% oftotal receipts. In addition, DNFC received

about 42 contributions from political action committees and other committees, such as

party committees and candidate committees, totaling approximately $55,123 (or 15% of

total receipts).

D. AUDIT SCOPE AND PROCEDURES

The audit included testing of the following general categories:

1. The receipt of contributions or loans in excess ofthe statutory

limitations (see Finding n.A.);

2. the receipt of contributions li'Oln prohibited sources; such as those

from corporations or labor organizations;

3. proper disclosure of contributions from individuals, political

committees and other entities, to include the itemization of

contributions when required, as well as, the completeness and

accuracy ofthe infonnation disclosed (sec Finding II.C.);

4, proper disclosure of disbursements including the itemization of

disbursements when requirel!, as well as, the completeness and

accuracy of the information disclosed;

5. proper disclosure of Committee debts and obligations (sec Finding

IID.);

6. the accuracy oftotal reported receipts, disbursements and cash

balances as compared to Committee bank records (sec Finding

II.B.);

7. adequate recordkeeping of Committee transactions, and;

8. other audit procedures that were deemed necessary in the situation.

4
Unless specifically discussed below, no material non-compliance was

detected. It should be noted that the Commission may pursue any ofthe matters

discussed in this report in an enforcement action.

II. AUDIT FINDINGS AND RECOMMENDATIONS

A. ApPARENT EXCESSIVE CONTRIBUTIONS

Sections 44 1a(a)(l)(A) and (a)(2)(A) ofTitle 2 ofthe United States Code

state, that no person shall make contributions to any candidate and his authorized political

committees with respect to any election for Federal office which, in the aggregate, exceed

$1,000 and that no multi-candidate political committee shall make contributions to any

candidate and his authorized political committees with respect to any election for Federal

office which, in the aggregate, exceed $5,000.

Sections 110.1 (b)(5)(i) and (ii) ofTitle II ofthe Code of Federal

Regulations state, in relevant part, that the treasurer of an authorized political committee

may request a written redesignation of a contribution by the contributor for a different

election if:

o

o

o

o

the contribution was designated in writing for a particular election and the

contribution, either on its face or when aggregated with other contributions

from the same contributor for the same election, exceeds the limitation on

contributions set forth in 11 CFR 110.1(b)(I);

the contribution was designated in writing for a particular election and the

contribution was made after that election and the contribution cannot be

accepted under the net debts outstanding provisions of 11 CFR

IIO.1(b)(3);

the contribution was not designated in writing for a particular election, and

the contribution exceeds the limitation on contributions set forth in 11

CFR 1l0.I(b)(I); or

the contribution was not designated in writing for a particular election, and

the contribution was received after the date of an election for which there

are net debts outstanding on the date the contribution is received.

Additionally, a contribution shall be considered to be redesignated for

another election ifthe treasurer of the recipient authorized political committee requests

that the contributor provide a written redesignation of the contribution and inforn1s the

contributor that the contributormay request the refund ofthe contribution as an

alternative to providing a written redesignation and within sixty days from the date ofthe

treasurer's receipt ofthe contribution, the contributor provides the treasurer with a written

redesignation ofthe contribution for another election, which is signed by the contributor.

5
Section 110.I(k) ofTitle 11 ofthe Code of Federal Regulations states, any

contribution made by more than one person shall include the signature of each contributor

on the check, money order, or other negotiable instrument or in a separate writing.

Furthenl1ore, a contribution made by more than one person that does not indicate the

amount to be attributed to each contributor shall be attributed equally to each contributor.

If a contribution to a candidate on its face or when aggregated with other

contributions from the same contributor exceeds the limitations on contributions set f0l1h

in 11 CFR II 0.1 (b) or (d), as appropriate, the treasurer may ask the contributor whether

the contribution was intended to be ajoint contribution by more than one person. A

contribution shall be considered to be reattributed to another contributor ifthe treasurer of

the recipient political committee asks the contributor whether the contribution is intended

to be a joint contribution by more than one person, and informs the contributor that he or

she may request a return ofthe excessive portion ofthe contribution ifit is not intended

to be ajoint contribution; and within 60 days from the date ofthe treasurer's receipt of

the contribution, the contributors provide a written reattribution ofthe contribution,

which is signed by each contributor, and which indicates the amount to be attributed to

each contributor if equal attribution is not intended.

The Audit staff reviewed DNFC's receipts data file, available check

copies, deposit tickets and disclosure reports relating to contributions from individuals

and identified 51 contributions from 36 individuals which exceeded the contribution

limitation by $33,075. Two excessive amounts totaling $150 related to the general

election. The remaining 49 contributions totaling $32,925 related to the primary election.

Many ofthese result from the receipt of amounts in excess ofthe primary election

contribution limitation prior to the primary election, with no designation ofthe excessive

amount to the general election. No evidence was found in DNFC's files that any attempt

was made to obtain or maintain any written reattribution or redesignation documentation.

DNFC also served as Mr. Newinski's principle campaign committee for

his campaign for the same office in the 1996 election and was audited for that election

cycle. That audit report was released by the Commission on November 10, 1997. The

report contained a finding that 16 individuals made 24 contributions that exceeded the

contribution limitations by $14,775. In the interim audit report it was recommended that

absent a showing that the contributions were not in excess of the limitation, refunds be

made or that the excessive amounts be reported as debts until funds were available to

make the necessary refunds. DNFC's response did not provide such evidence, nor did it

refund the contributions or list them on a debt schedule. Six ofthe contributors who

made excessive contributions to the 1996 campaign also made excessive contributions to

the 1998 campaign.

The review also identified apparent excessive contributions from state and

local party committees and an excessive contribution from one political action

committee. DNFC received $10,710 from various statc and local party committces for

the Primary election. Of this amount, $5,710 was excessive. The majority of

contributions came from the 4th District Republican Committee. DNFC also received

6
$2,050 for the general election from the Taxpayer League PAC, a political committee that

had not attained multi-candidate status. This resulted in an excessive contribution of

$1,050. The total amount of excessive contributions from committees is $6,760.

At the Exit Conference DNFC was provided a schedule ofthe excessive

contributions from individuals and was advised that the receipt of excessive contributions

was a material problem. The Treasurer stated that he was very surprised at the number of

excessive contributors. No other comment was made. Subsequent to the Exit

Conference, workpapers were provided to the DNFC listing the excessive party

committee contributions and up-dating excessive contributions from individuals.

In the interim audit report the Audit staffrecommended that DNFC

provide evidence demonstrating that the contributions in question are not excessive.

Absent such evidence, it was recommended that DNFC refund $54,610 ($39,835 from the

1998 election and $14,775 from the 1996 election) and provide evidence ofsuch refunds

(copies ofthe front and back of the negotiated refund checks) for review. Iffunds are not

currently available to make the necessary refunds, it was recommended that those

contributions requiring refunds be disclosed as debts on Schedule D (Debts and

Obligations) until such time that funds become available to make the refunds.

DNFC responded to the Interim Audit repmi on November 9, 1999,

approximately two weeks after its response date of October 29,1999. It should be noted

that the original response date was October 14, 1999, but DNFC requested and received

an additional 15 days in which to file its response. The response was comprised of

revised debt schedules which listed all but two excessive contributions.

B. MISSTATEMENT OF FINANCIAL ACTlvrrv

Sections 434(b)(1), (2) and (4) ofTitle 2 ofthe United States Code state,

in part, that a political committee shall disclose the amollnt of cash on hand at the

begirming of the reporting period and (he total amount of all receipts and all

disbursements for the reporting period and calendar year.

A reconciliation ofDNFC's repOlied rnancial activity to amounts

reflected in its bank records for calendar years 1997 and 1998 revealed the following

misstatements of financial activity for calendar year 1998:

7
Receipts

For 1998, DNFC's receipts were understated by $6,455. The components

ofthe misstatement are as follows:

Reported Receipts $294,064

Addition Error - Pre-Primary Report ($1,311)

In-kind contribution not repolied 2,154

if~

~'iff Bank Error Correction Reported ( 1,685) ? :,

H£ in Receipts - Pre-Primary f;l

lJ~

Net underrepOlied contributions 7,274

n~ 8/27/98 - 11/30/98

U Reconciling Item $23 $ 6,455

it..

E "',

W COITect Reportable Receipts $300,519 ,

r~ Disbursements

111

DNFC's reported disbursements were understated a net amount of $4,848.

The components ofthe misstatement are as follows:

Reported Disbursements

Addition Error - Pre-Primary Report

In-kind contribution not reported

RepOlied Voided checks

July Quarterly over-reported amounts

Pre-primary disbursements not reported

Post-general disbursements not reported

Reconciling Item

Correct RepOliable Disbursements

$4,249

2,154

(6,770)

( 340)

3,139

2,431

(~)

$324,932

$ 4,848

$329,780

Due to the errors noted above and a math error in the cash summary,

ending cash on hand was misstated by only $13. During the Entrance conference the

8
Treasurer informed the Audit staff that he had prepared the disclosure reports until around

the cnd ofJune 1998 and after that time, fundraising personnel had taken ovcr the

reporting. He also stated that at the end of 1998, he had reconciled the ending cash on

hand total and adjusted the disclosure report so that it would more accurately reflect the

true cash balance.

At the Exit conference and subsequent to the end offieldwork the

Treasurer was provided with schedules detailing both the bank activity and the noted

adjustments. The Treasurer made no comment on this matter.

In the interim audit report it was recommended that DNFC file

comprehensive Summary and Detailed Summary pages for calendar years 1997 and 1998,

correcting the misstatements noted above.

DNFC filed amended Summary and Detailed Summary pages listing

materially conect reported figures.

Section 434(b)(3 )(A) ofTitle 2 ofthe United States Code states that each

report filed by a committee, shall disclose the identification of each person (other than a

political committee) who makes a contribution to the reporting committee during the

reporting period, whose contribution or contributions have an aggregate amount or value

in excess of$200 within the calendar year, or any lesser amount if the reporting

committee should so elect, together with the date and amount of any such contribution.

c. ITEMIZATION OF CONTRIBUTIONS FROM INDIVIDUALS

Section 431(13) ofTitle 2 of the United States Code defines the

identification in the case of any individual, as the name, the mailing address, and the

occupation ofsuch individual, as well as the name of his or her employer.

The testing of contributions from individuals identified contributions

totaling $27,350 that aggregated in excess of $200 but were not itemized. Although

itemization problems occurred during both 1997 and 1998, many ofthe problems

appeared to be related to the fourth quarter of 1998 and related primarily to contributors

that had made multiple contributions.

At the Exit conference, the Treasurer seemed surprised at the number of

items which had not been itemized and stated that he felt sure that the contributions

named were itemized. The Audit staff noted that all reports and itemized contributions

had been reviewed, but urged the Treasurer to review the list and reports for himself.

In the interim audit report it was recommended that DNFC file amended

Schedules A, by report period, for calendar years 1997 and 1998 to correct the

itemization errors noted above.

9
DNFC filed comprehensive amended Schedules A that cOlTected all ofthe

itemization elTors noted above, although not all the required contributor information was

disclosed on the schedules.

D. REPORTING AND DISCLOSURE OF DEBTS AND OBLIGATIONS

Section 434(b)(8) ofTitle 2 ofthe United States Code states, in part, that

each report filed under this section shall disclose the amount and nature of outstanding

debts and obligations owed by a political committee.

Sections 104.1 I(a) and (b) ofTitle II ofthe Code ofFederal Regulations

state, in pali, that debts and obligations owed by or to a political committee which remain

outstanding shall be continuously reported until extinguished. These debts and

obligations shall be reported 011 separate schedules together with a statement explaining

the circumstances and conditions under which each debt and obligation was inculTed or

extinguished. A debt or obligation, the amount of which is $500 or less, shall be reported

as ofthe time payment is made or not later than 60 days after such obligation is inculTed,

whichever comes first. A debt or obligation which is over $500 shall be reported as of

the date on which the debt or obligation is inculTed, except that any obligation inculTed

for rent, salary or other regularly reoccurring administrative expense shall not be reported

as a debt before the payment due date.

DNFC disbursements were reviewed to determine ifit had correctly

reported debts and obligations owed to vendors. An initial review of all disbursements

revealed that approximately 46% ofDNFC's disbursements related to administrative type

expenses and were generally not reportable as debts. The remaining disbursements

(54%), relate to 4 vendors who provided telemarketing and fundraising services and also

provided printing and campaign materials. Although minimum recordkeeping

requirements relating to these 4 vendors were met, more than 10% ofthe invoices relating

to these payments were not available for review. Thus, the Audit staffs calculation of

possible debts and obligations as relates to these vendors was limited to documentation

available.

From this limited review, it was determined that debts and obligations

totaling $18,438 should have been reported on Schedules D for one ofthe telemarketing

firms. DNFC had reported a total of$6,057 for this firm on its 1997 Year End report.

No other debt was repOlied until the 1998 year-end report, when $8,518 was reported on

line 10 ofthe Summary Page. No Schedule D was provided as to the breakdown ofthis

debt, thus it was not possible to detelT11ine if any ofit relates to the vendor mentioned

above. During fieldwork and at the Exit conference, an itemized schedule was requested.

To date, no schedule has been supplied. Absent this information, the Audit staff must

assume that the remaining $12,380 was not reported.

In addition, as was noted in finding II.A. above, DNFC was audited during

the 1995/1 996 election cycle. During that audit, it was determined that DNFC had

received a total of 24 contributions from 16 contributors which resulted in excessive

10
contributions totaling $14,755. In the interim audit report a recommendation was made

to either provide evidence that the contributions in question were not excessive, to make

refunds to contributors, or if no funds were available, to report the refunds on a debt

schedule. DNFC neither refunded the excessive contributions nor reported them as

outstanding debts.

Based upon the information noted above the Audit staffs calculation of

debt not reported on Schedules D totals $27,135, ($12,380 + $14,755).

Subsequent to the end offieldwork, DNFC was provided with a schedule

detailing the debts that should have been reported.

In the interim audit report, the Audit staffmade a recommendation that

DNFC file amended Schedules D by report period for the calendar years 1997 and 1998.

DNFC filed amended Schedules D by calendar year and itemized the

contributors who are due refunds for excessive contributions for both the 1995/1996 and

1997/1998 election cycles. However, for 1997, debts amounting to $10,041 at year end,

which had previously been reported, were not listed on these amended schedules or

summary pages.

For 1998, DNFC filed amended Schedules D which carried forward

1995/1996 contribution refunds due as well as all but two excessive contribution refunds

due noted during the current audit. In addition, a schedule was included for previously

reported but unitemized debt for four vendors. Because amended schedules filed were for

the entire year as opposed to per report period as recommended, $12,380 in debt that

should have been reported at the close of the Pre-Primary through Pre-General periods

was not properly itemized or reported.

11
FEDERAL ELECTION COMMISSION

WASHINGTON. D.C. 20463

September 1, 1999

MEMORANDUM

Lawrence M. Noble

General Counsel

Kim Bright-Coleman tu~ Associate General Counsel

Robert J. Costa

Assistant StaffDirector

Audit Division

BY:

FROM:

THROUGH: James A. Pehrkon

Staff Director

TO:

'ii:

Lorenzo Holloway '1.. j(j-..

Assistant General Counsel

Tracey L. LigonCW

Attorney

SUBJECT: Interim Audit Report on Dennis Ncwinski for Congress

1. INTRODUCTION

The Office of GeneraL Counsel has reviewed the proposed Interim Audit Report on

DelU1is Newinski for Congress ("the Committee") dated August 6, 1999. This Office submits the

following comments on the Report. To the extent that this Office has not made specific

comments on sections ofthe Report, we concur with the Audit Division's analysis and

conclusions. If you have any questions concerning our comments, please contact Tracey L.

Ligon, the attorney assigned to this audit.\

The Office of General Counsel recommends that the Commission consider this document in closed session

since the Commission may eventually decide to pursue an investigation of matters contained in the Report.

See II C.F.R. §§ 2.4(a) and (b)(6).

12
Memorandum to Robert J. Costa

Proposed Interim Audit Report On Dennis Newinski for Congress

Page 2

II. APPARENT EXCESSIVE CONTRIBUTIONS (ILA.)

The audit covered:J;he period January I, 1997 through December 31,1998. The cover

memorandum to the draftlleport requests comments on the Apparent Excessive Contributions

finding, and specifically, the fact that the Report addresses not only the excessive contributions

from the 1998 election cycle, but also excessive contributions from the 1996 election. The

Conunittee was audited for the 1996 election cycle and the excessive contributions identified in

that audit were the subject of an audit finding. During that audit, the Audit Division

recommended that the Committee refund the excessive contributions or, iffunds were not

available, report the refunds due as debts until funds became available. The Committee did

neither.

The Audit Division referred the Committee's 1996 excessive contribution improprieties

to this Office for enforcement. Audit RefetTaI1l97-01. However, the audit referral was identified

as a low rated matter under Enforcement Priority System II; on that basis, the Commission

exercised its prosecutorial discretion and declined to open a MUR, decidcd to take no action, and

closed the file with respect to the referral. The instant Report recommcnds that the 1996

excessive contributions be refunded, along with an amount froIll the 1998 clection cycle, llt

reported as debts until funds are available The Report also concludes that th!:. Committe!:. l':\iled

to report the 1996 cycle excessive amounts "s debts dllling the 1998 election cycle. The Report

notes that the same committce served ,1S the candidate's Ixincipal campaign cOll1mittee in both

the 1996 and 1998 elections;2 the candidate having simply ftled " new statement of e,lIldidacy for

the 1998 election.'

While I I C.F.R. § l03.3(b) specifically requires that comrnitt!:.es refund excessive

contributions that are neither redesignated nor rcaltributed, within sixty days of receipt of the

contributions, and the Committee faikd to do so within that timeframe, the Committee remains

obligated to refund the excessivt'. contributions:' Section I03.3(b) clearly contemplates that

excessive contributions that are neither redesignated nor reattributed, be refunded. Nothing in

the Federal Election Campaign Act of 1971, as amended CFECA"), or the Commission's

regulations absolves committees of the obligation to refund excessive contributions based on the

Six ofthe contributors who made excessive contributions to the 1996 election also made excessive

contributions to the Committee for the 1998 election cycle.

The Committee reported a beginning cash balance of $133 for the 1998 election cycle. These funds were

remaining from the 1996 election cycle.

This Office notes that the sixty-day period provided by Section I03.3(b) for refunding excessive

contTibutions that are neither redesignated nor reattributed is a window within which political committees are

pennitted to cure the receipt of excessive contributions with impunity. Section 103.3(b). however, does not operate

to relieve committees ofthe obligation to refund such contributions after the sixty-day period has elapsed.

13
Memorandum to Robert J. Costa

Proposed Interim Audit Report on Dennis Newinski for Congress

Page 3

passage of time or a change in election cycles. Ifso, it would indeed provide a disincentive for

conunittees to comply with the contribution Iimitations ofthc FECA, see 2 U.S.C. § 44 Ia(a).'

Furthcnnore, the dommission is not precluded from addressing unremedied 1996

excessive contributions inasmuch as they constitute an obligation ofthe Committee that

remained with the Conunittee into the 1998 election cycle. The Commission's regulations

contemplate that debts and obligations could remain with a committee indefinitely. This is

reflected in Section 104.1I(a) of the regulations, which states that debts and obligations owed by

or to a political conmlittee which remain outstanding shall be continuously reported until

extinguished. 11 C.F.R. § 104.11(a). Therefore, consistent with the Commission's audit

authority to ensure compliance with the limitatio.ns and disclosure requirements of the FECA,

this Office concurs with the Audit Division's recommendation that the Committee be required to

refund, inter alia, the 1996 excessive contributions and to report all umefunded excessive

conlributions as outstanding debt. See 2 U.S.C. § 438(b).

In advisory opinions, tile Commission has recognized the enduring obligation of political committees to

refund impermissibly received funds despite the change of election cycles. Although it was not in the context of an

audit, in Advisory Opinion 1984-52, the Commission required a political committee to refund corporate

contributions made in a prior election cycle from campaign contributions received by the same candidate in a

subsequent election cycle. Advisory Opinion 1984-52; see Advisory Opinion [985-8; see also Advisory Opinion

1977-40 (If two committees were determined to be affiliated committees for purposes ofsharing same contribution

limits under Section 441 a(a), campaign would be obligated to retum excessive contributions made over a year

earlier); Audit Report ofLandrieu for Senate 96.

14
FEDERAL ELECTION COMMISSION

W"SHINGTON. DC 204&]

"

Deccmber 13, 1999

Mr. Richard C. Riener, Treasurer

Dennis Newinski for Congress

3468 Rice Street

St. Paul, MN 55126

Dear Mr. Riener:

Attached please find the Report ofthe Audit Division on Dennis Ncwinski For

Congress. The Commission approved the report on December 9, 1999.

111e Commission approvcd Final Audit Report will be placed on the public record

on December 1S, 1999. Should you have any questions regarding the public release ofthe

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

you have related to matters covered during the audit or in the report should be directed to

Rhonda Simmons or Russ Bruner ofthe Audit Division at (202) 694-1200 or toll free at

(&00) 424-9530.

Sincerely,

Robert 1. Costa

Assistant Staff Director

Audit Division

Attachment as stated

15
CHRONOLOGY

DENNIS NEWINSKI FOR CONGRESS

•

Audit Fieldwork

Interim Audit Report to

the Committee

Response to the Interim

Audit Report Due

Response Received

Final Audit Report Approved

16

May 17 - June 3,1999

September 13, 1999

October 29,1999

November 9,1999

December 9, 1999
I ,

•