10

The NOQCE Statement presented above reflects a $0 balance indicating
that the General Committee has neither exceeded the expenditure limitation nor has
unexpended funds. That conclusion is dependant on, among other things, the
assumption that amounts that are due to the Primary Committee for winding down costs
will be paid using Federal funds rather than funds of the GLCF. Those w: inding down
costs could be permissibly paid from either source.

IV. SUMMARY OF AMOUNTS DUE TO THE UNITED STATES

TREASURY
Finding III.A. Interest Earned 11,625
Finding III.B. Stale Dated Checks

1. General Committee 1,042
2. GLCF 2.22
Total Due United States Treasury $14,887

Less:
Paid to date (11,625)
Amount Due United States Treasury $3,262

Page 12 of 17
Approved December 12. 2002


these services and facilities and seeking reimbursement for them, shall be Teported as
expenditures in accordance with 11 CFR §104.3(b)(2)(i). Any reimbursement received
by such committee shall be reported in accordance with 11 CFR 104.3(a)(3)(ix).

Sections 104.3(a)(3) and (b)(2) of the Title 11 of the Code of Federal
Regulations, require an authorized committee of a candidate for Federal office to Teport
the total amount of activity within several categories of receipts, including offsets to
operating expenditures, and within several categories of disbursements, including
operating expenditures.

Section 434(b)(3)(F) of Title 2 of the United States Code states, in
relevant part, that each report shall disclose the identification of each person who
provides an 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. Subsection (5)(A) of this section also requires the name and
address of each person to whom an expenditure in an aggregate amount or value in
excess of $200 within the calendar year is made together with the date, amount and
purpose of such expenditure. In addition, 2 U.S.C. 431(13) defines “identification” for
other than an individual, as the full name and address of such person.

The General Committee contracted with Flighttime Inc. (Flighttime) to
arrange aircraft for Senator Joseph Lieberman, Mary Gore and other campaign staff; to
prepare airline and operator schedules; to order and setup catering, ground handling and
crew transportation; to track the hours of operation and associated expenses; to bill the
Press, the USSS and the Office of Vice President (OVP); to receive reimbursements
from these entities and provide a full accounting of the program. According to the
contract, the General Committee was responsible for paying all costs associated with the
charters. A payment schedule was setup by Flighttime to cover the total anticipated
costs of the charter program. As the USSS. the OVP and the Press were invoiced their
pro-rata share by Flighttime the payments were applied as a credit to the General
Committee’s account balance.

Flighttime was paid a total of 3.747.185 for these goods and services.
The General Committee paid $3,147,775. the USSS and the OVP paid $274,792 and the
Press paid $324,618, directly to Flighttime. The total cost of the charter programs was
$3,365,753. As stated above, payments made by the USSS. the OVP and the Press were
credited against the General Committee's account balance. The payments totaled
$599,410. Therefore, the final cost to the General Committee was
$2,766,343($3,365,753 - $599,410). Since the General Committee paid Flighttime
$3,147,775, it received a refund of $381.432 ($3,147,775 - $2,766,343). The General
Committee reported this amount as a refund received from Flighttime.

? This amount is the total Paid to Flightume by the USSS, the OVP and the Press
($274,792+$324,618).

Page 6 of 17
Approved December 12. 2002


The Commission approved report will be placed on the public record on January 7,
2003. Should you have any questions regarding the public release of the Teport, 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 Teport
should be directed to Erica D. Lee or Russ Bruner of the Audit Division at (202) 694-1200
or toll free at (800) 424-9530.

Sincerely,
r

i a

( 7] Joseph F. Stoltz
Assistant Staff Director

Audit Division

Attachment as stated

Page 16 of 17
Approved December 12, 2002



REPORT OF THE AUDIT DIVISION
ON

Gore/Lieberman Inc. and
Gore/Lieberman General Election Legal
& Accounting Compliance Fund

Approved December 12, 2002

FEDERAL ELECTION COMMISSION
999 E STREET, N.W.
WASHINGTON, D.C.



FEDERAL ELECTION COMMISSION
WASHINGTON DC 2046:

November 13, 2002

MEMORANDUM

TO: Joseph F. Stoltz
Assistant Staff Director

Audit Division
THROUGH: James A. Pehrkon ge
Staff Director Le

Robert J. Costa TR
Deputy Staff Director

FROM: Lawrence H. Norton
General Counsel van

1/>
Gregory R. Baker“
Acting Associate General Counsel

Peter G. Blumberg YAK
Acting Assistant General Counsel

Delbert K. Rigsby D&Ks, E

Attomey

Delanie DeWitt Painter 4)
Attomey

SUBJECT: Final Audit Repon on Gore
General Election Leva! ang Acc

. Inc. and the Gore Ligherman
¢ Comphance Fund (LRA 594)

The Office of General Counsel ha J
Gore ‘Lieberman. Inc. (the “General Commu the Gor
Legal and Accounting Compliance Fund ( .
2002. This memorandum summanzes ou
concur with any findings not specificalis ad

Final Audit Repon on
eberman General Ejection
to tnis Office on October §.
¥ Proposed report.’ Gene:

y. we

' This Office recommends that the Commission consider
because this document does not include maners e\

* proposed Fina! Audit Repon in open session
Seoli GFR :24

Page 13 of 17
Approved December 12. 2002


FEDERAL ELECTION COMMISSION
WASHINGTON. DC 204m

January 3, 2003

The Honorable Albert J. Gore, Jr.

c/o Mr. Eric Kleinfeld

Ryan, Phillips, Utrecht & MacKinnon
1133 Connecticut Avenue, N.W.
Suite #300

Washington, D.C. 20036

Dear Mr. Gore:

Attached please find the Report of the Audit Division on Gore/Lieberman. Inc. and
Gore/Lieberman, Inc. General Election Legal & Accounting Compliance Fund. The
Commission approved the report on December 12, 2002. As noted in the report, the
Commission may pursue any of the matters discussed 1n an enforcement action.

In accordance with 1] CFR §§9007.2(c)(1) and (d)(1), the Commission has
made a determination that a repayment to the Secretary of the Treasury in the amount of
$3,262 is required within 90 calendar days after service of this report (Apmil 7, 2003).

Should the Candidate dispute the Commission's determination that a
repayment is required, Commission regulations at 11 CFR $9007.2(c)(2)(i) provide the
Candidate with an opportunity to submit in wniting, within 60 calendar days after service of
the Commission's notice (March 7, 2003). legal and factual materials to demonstrate that
no repayment, or a lesser repayment, is required. Further. 11 CFR §9007.2(c)(2 Nii)
permits a Candidate who has submitted wntten matenals to request an opportunity: to
address the Commission in open session based on the legal and factual materials submitted

The Commission will consider an written legal and factual matenals
submitted within the 60 day period when deciding whether to revise the repayment
determination. Such materials may be submitted by counse! if the Candidate so elects. If
the Candidate decides to file a Tesponse to the repayment determination. please contact
Greg Baker of the Office of General Counsel at (202) 694-1650 or toll free at (800)
424-9530. If the Candidate does not dispute this determination within the 60 day penod
provided, it will be considered final.

Page 15 of 17
Approved December 12. 2002


additional refund checks totaling $66,835. Asa result of receiving these refunds, the
overpayment has been refunded.

In the Preliminary audit report, the Audit staff recommended no further
action. The General Committee did not comment on this finding.

D. DETERMINATION OF NET OUTSTANDING QUALIFIED CAMPAIGN
EXPENSES

Section 9004.9(b) of Title 11 of the Code of Federal Regulations, requires
that within 30 calendar days after the end of the expenditure reporting period, the
candidate shall submit a statement of net outstanding qualified campaign expenses. The
statement shall contain all outstanding obligations for qualified campaign expenses as
the date of the election, an estimate of the winding down costs and any campaign
expenses that will be incurred by the end of the expenditure report period.

The statement of net outstanding qualified campaign expenses is dated as
of December 7, 2000, which is the end of the expenditure report period. While preparing
the Statement of Net Outstanding Qualified Campaign Expenses that appears on the
following page, the Audit staff reviewed the General Committee’s financial activity
through September 30, 2002.

Page 10 of 17
Approved December 12. 2002


In response to the preliminary audit report, the General Committee delivered to
the Audit Division a check payable to the United States Treasury in the amount of
$11,625.

STALE DATED CHECKS — 11 CFR §9007.6. The Audit staff identified stale-dated checks
totaling $1,042 for the General Committee and $2,220 for the GLCF.

The Audit staff recommended that the Commission determine that the General
Committee and the GLCF must pay the United States Treasury $1,042 and $2.220,
respectively to cover the total outstanding stale-dated checks.

The Commission approved the Staff recommendation.

APPARENT NON-QUALIFIED EXPENSES — |] CFR § 9002.11(a)(1); 11 CFR § 9003.5(a);
26 U.S.C. §9007(b)(4). The General Committee made duplicate payments to Clearwing
Production Services, Inc. totaling $89,735. Prior to the preliminary audit report, the
General Committee received checks from Clearwing Production Services, Inc. refunding
this amount in total.

NET OUTSTANDING QUALIFIED CAMPAIGN EXPENSES — 1] CFR § 9004.9(b). The
Statement of Net Outstanding Qualified Campaign Expenses shows the General
Committee had neither a federal funds surplus nor had exceeded the spending limitation.

Page 2 of 17
Approved December 12. 2002



TABLE OF CONTENTS

GORE/LIEBERMAN, INC. AND GORE/LIEBERMAN GENERAL
ELECTION LEGAL & ACCOUNTING COMPLIANCE FUND

Page

Executive Summary 1
Final Audit Report 3
Background 5
Findings 5
Legal Analysis 13
Transmittal to Candidate 15

Chronology 17




Gore/Lieberman, Inc.

Statement of Net Outstanding Qualified Campaign Expenses
As of December 7. 2000
As Determined at September 30, 2002

Assets
Cash In Bank’ 351,699,646
Accounts Receivable-REALIZED 4.276.857
Accounts ReceivableeOUTSTANDING? 328,772
Due from the Primary Committee
For Winding Down Expenses’ 521,828
For Primary Expenses Paid before 12/7/00 103,560
Capital Assets 19.978
TOTAL ASSETS $6,950,641
Obligations
Accounts Payable
Actual thru 09/30/02 $5,104,557
Due to the Primary Committee 902,865
Winding down cost;
Actual thru 09/30/02 848,423
Estimated thru 12/31/03¢ 93,754
Stale-Dated Checks 1,042
TOTAL LIABILITIES 6,950,641
Net Outstanding Qualified Campaign Expenses S_

FOOTNOTES TO THE NOCQE

Cash in Bank was increased to reflect stale-dated checks

This number includes a receivable from Campaign Company of $621.947($300,000 15
included in Accounts Receivable-REALIZED). which 1s $2% of the excess amount of funds
in the media account. The media account received money from both the General Commitee
and the Democratic National Committee (for 2 L.S.C s441aid) Purposes). The Audit staff
allocated the excess funds on the ratio of General Committee and DNC funds deposited into
the account. The General Commines allocated the excess funds on 2 $0°S0 ratio

The Primary Commitee owes the Genera! Comminee for a portion of the total winding
down costs ($902,865) paid for bs the General Commune but incurred by both

The General Committee's share of estumated wind:ng down cost totals $605.224. To avoid
exceeding the expenditure limitation. 11 1s assumed the remainder of this estimated wind
down $511,470($605,224-93.754) would be paid by the GLCF.

Page 11 of 17
Approved December 12, 2002


FEDERAL ELECTION COMMISSION
WASHINGTON, DC 204¢

REPORT OF THE AUDIT DIVISION
ON
GORE/LIEBERMAN, INC.
AND
GORE/LIEBERMAN GENERAL ELECTION LEGAL AND ACCOUNTING
COMPLIANCE FUND

EXECUTIVE SUMMARY

Gore/Lieberman, Inc. (General Committee) registered with the Federal Election
Commission (the Commission) on August 18, 2000 as the principal campaign committee
for Vice President Al Gore, candidate for the office of the President of the United States
and Senator Joseph Lieberman for the office of the Vice President of the United States.
The Gore/Lieberman General Election Legal and Accounting Compliar.ce Fund (GLCF)
registered with the Federal Election Commission on January 11, 1999.

The audit was conducted pursuant to Section 9007(a) of Title 26 of the United
States Code, requiring that after each presidential election, the Commission conduct a
thorough examination and audit of the qualified campaign expenses of the candidates of
each political party for President and Vice President. The General Committee received
federal funds totaling $67,560,000 from the United States Treasury on August 18, 2000.

The findings of the audit were presented to the General Committee and the GLCF
at an exit conference held on March 4, 2002 and in the Preliminary Audit Report. The
Committees’ responses to those findings are contained in the audit Teport.

The following is an overview of the findings contained in the audit report

DISCLOSURE OF AIR CHARTER ACTIVITY — 1] CFR $9004.6(e); 11 CFR §104(a)(3)
and (b)(2); 2 U.S.C. §434(b)(3)(F). The General Committee failed to disclosure
payments from the United States Secret Service. the Press and the Office of the Vice
President totaling $599,410, as well as. disbursements to Fhghume, Inc. for $217,978.

In response to the preliminary audit report. the General Committee filed the
requested schedules.

INTEREST INCOME RECEIVED — |] CFR $9004.5: }] CFR §9007.2(b)(4). The General
Committee received after tax interest totaling $11,625 trom certificates of deposits and
certain vendor deposits. Absent documentation of additional taxes paid, $11,625, was
payable to the United States Treasury.

Page 1 of 17
Approved December 12. 2002


CHRONOLOGY

GORE/LIEBERMAN, INC. AND GORE/LIEBERMAN GENERAL
ELECTION LEGAL AND ACCOUNTING COMPLIANCE FUND.

Audit Fieldwork February 21, 2001 -
March 1, 2002

Preliminary Audit Report to
the Committee June 27, 2002

Response Received to the
Preliminary Audit Report September 13, 2002

Final Audit Report Approved December 12, 2002

Page 17 of 17
Approved December 12, 2002


FEDERAL ELECTION COMMISSION
WASHINGTON, D.C 20463

January 8, 2003

MEMORANDUM

TO: RON M. HARRIS
PRESS OFFICER
PRESS OFFICE

FROM: JOSEPH F. STOLTZ |
ASSISTANT STAFF! CTOR
AUDIT DIVISION j

SUBJECT: | PUBLIC ISSUANCE OF THE AUDIT REPORT ON
GORE/LIEBERMAN, INC. AND GORE/LIEBERMAN GENERAL
ELECTION LEGAL & ACCOUNTING COMPLIANCE FUND

Attached please find a copy of the audit report on Gore/Lieberman, Inc. and
Gore/Lieberman General Election Legal & Election Compliance Fund, which was
approved by the Commission on December 12, 2002.

All parties involved have received informational copies of the report and the report
may be released to the public.

Attachment as stated

ce: Office of General Counsel
Office of Public Disclosure
Reports Analysis Division
FEC Library


[on CAMPAIGN ORGANIZATION

The General Committee registered with the Federal Election Commission
(the Commission) on August 18, 2000 as the principal campaign committee for then
Vice President Al Gore, candidate for the office of the President of the United States.
GLCF registered with the Federal Election Commission on January 11, 1999. The
Treasurer of both the General Committee and the GLCF during the audit period and
currently is Jose Villarreal. Both committees currently maintain their offices in
Washington, D.C.

The General Committee maintained depositories in Washington, D.C. To
handle its financial activity, the General Committee used three bank accounts and made
approximately 19,000 disbursements.

The General Committee received $67,560,000 in funds from the United
States Treasury on August 18, 2000. Additional receipts received by the General
Committee through September 30, 2001 included $491,841 from Press and United States
Secret Service (USSS) travel reimbursements; $1,704,421 from the GLCF and the
Gore/Lieberman Recount Committee (Recount Committee) for reimbursement of
expenses paid by the General Committee; $19,081' from interest income; $1,098,816
from vendor refunds and rebates; and $94,075 in proceeds from the sale of assets.

During the audit period, the GLFC maintained depositories in
Washington, D.C.; Charlotte, North Carolina; Atlanta, Georgia; and Nashville,
Tennessee. To handle its financial activity, GLFC used four bank accounts. From these
accounts, GLCF made approximately 600 disbursements. Approximately 90,000
contributions were received from individuals. These contributions totaled approximately
$11,420,000.

D. AUDIT SCOPE AND PROCEDURES

In addition to a review of expenditures made by the General Committee
to determine if they were qualified or non-qualified campaign expenses, the audit
covered the following general categories

1. The receipt of contributions or loans in excess of the statutory
limitations;

2. the receipt of contributions from prohibited sources, such as those
from corporations or labor organizations;

' The General Committee received interest of $1,445 that should have been deposited by the
Gore 2000, Inc. (the Primary Commitee)
Page 4 of 17
Approved December 12, 2002


FEDERAL ELECTION COMMISSION
WASHINCTON, DC 20404

REPORT OF THE AUDIT DIVISION
ON
GORE/LIEBERMAN, INC.
AND
GORE/LIEBERMAN GENERAL ELECTION LEGAL &
ACCOUNTING COMPLIANCE FUND

1 BACKGROUND
A. AUDIT AUTHORITY

This report is based on the audits of Gore/Lieberman, Inc. (General
Committee) and Gore/Lieberman General Election Legal & Accounting Compliance
Fund (GLCF). The audit is mandated by Section 9007(a) of Title 26 of the United States
Code. That section states “after each presidential election, the Commission shall
conduct a thorough examination and audit of the qualified campaign expenses of the
candidates of each political party for President and Vice President.” Also, Section
9009(b) of Title 26 of the United States Code 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 examining 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 of the General Committee covered the period from its
inception, August 18, 2000, through September 30. 2001 Dunng the audit period, the
General Committee reported an opening cash balance of $-U-. total receipts of
$70,973,854, total disbursements of $70.637.199 and a closing cash balance of
$336,655. In addition, the Audit staff conducted limited reviews of financial and
reported activity through September 30. 2002

The audit of GLCF covered the period from its inception, January: 8, 1999
through September 30, 2001. During this penod, the GLCF reported an opening cash
balance of $-0-, total receipts of $11,723,482, total disbursements of $4.301.546 anda
closing cash balance of $7,421,936. In addition, the Audit staff conducted limited
reviews of financial and reported activity through September 30, 2002.

Page 3 of 17
Approved December 12. 2002




Memorandum to Joseph F. Stoltz
Proposed Final Audit Report
Gore/Lieberman, Inc. (LRA 594)
Page 2

This Office acknowledges the Audit staff's opinion in the cover memorandum
accompanying the proposed report that changes to shared winding down costs in the Gore 2000
audit report are unlikely to have a “practical effect” on the General Commitee. Even if the
shared winding down costs are allocated differently. the General Committee would not have a
Tepayment result because the GELAC could reimburse that portion of winding down on the
General Committee’s behalf. We address the winding down costs allocation in our comments to
the proposed report on Gore 2000, Inc.. and incorporate those comments herein by reference.

With Tespect to the disclosure of air charter activity (section II.A.), we note that the
General Committee has complied with the preliminary audit Teport’s recommendation that the
General Commitee report reimbursements totaling $599.410 received from the United States
Secret Service (“USSS”), the Office of Vice President ("OVP") and representatives from press
organizations for expenses on charter flights operated by Flighttime. Inc.. Additionally, pursuant
to the preliminary audit report, the General Committee Teported its previously undisclosed
disbursements to Flighttime, Inc. totaling $217.637. The documents disclosing these
reimbursements to USSS, OVP and press organizations and disbursements to Flighttime have
been designated as miscellaneous Teports of the Committee for the year 2002. They are on the
public record and available for review.

We agree that the Commission should make a repayment determination that the General
Committee repay interest income of $11,625 (section ITI.A.). 11 C.F.R. §§ 9004.5 and
9007.2(b)(4). The fact that one certificate of deposit has not been tedeemed and may be earning
additional interest could require that these funds also be repaid. For closure purposes, it would

of deposit in the Tepayment determination contained in the Audit Report. Perhaps. the

. Committee could be encouraged to redeem the certificate immediately or the Audit Division
Could estimate the interest the certificate will earn and include the estimate in the repayment
determination. The Commission is enutled to make additional repayment determinations
through the end of the three-year notification penod CUCF.R § 9007.2(f)). and it is likely the
Committee would make the Tepayment informally without an additional repayment
determination. but if the Audit Report could close ou: the issue. that would be preferable

Page 14 of 17
Approved December 12. 2002




According to 11 CFR §9004.6(e) the total amount of cost incurred to
administer the program shall be reported as an expenditure and the reimbursements from
the above noted entities shall be reported as offsets as described in 1] CFR
104.3(a)(3)(ix). The General Committee failed to report $217,978 ($3,365,753-
$3,147,775) of the cost of charter programs, as well as, $217,978 ($599,410-S381,432)
of the amount received from the USSS, the OVP and the Press. Additionally, the
General Committee failed to correctly disclose all facets of the charter program,
specifically the payments made directly to Flighttime by the Press, the USSS and the
OVP. The General Committee should have disclosed the amounts received totaling
$599,410.

At the exit conference, the General Committee was provided with a
schedule detailing the issues discussed above. The General Committee had no comment.

In the Preliminary audit report, the Audit staff recommended that the
General Committee either provide documentation demonstrating that the amounts noted
above should not be reported and itemized or file a schedule itemizing the payments
from the USSS, the OVP and the Press totaling $599.410 as memo entries, as well as,
the memo disbursement to Flighttime totaling $217,978.

Although the General Committee did not “concede” that the above
amounts should have been reported, they did file the requested schedule.

Ill. AUDIT FINDINGS AND RECOMMENDATIONS - AMOUNTS DUE TO
THE UNITED STATES TREASURY

A. INTEREST EARNED

Section 9004.5 of Title 11 of the Code of Federal Regulations states. in
relevant part, that investment of public funds or any’ use of public funds that results in
income is permissible, provided that an amount equal to all net income derived from
such use, less Federal, State and local taxes paid on such income, shall be paid 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 an
investment or other use of payments from the fund pursuant to 1] CFR 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 General Committee received interest totaling $14,793 from
certificates of deposits. Additional interest of $5.487 was eamed from certain vendor
deposits. The General Committee paid $6.332 in federal taxes and $1,935 in
Washington, D.C. taxes. Therefore, it appears a repayment to the United States Treasury
in the amount of $12,013 ($14,793 — $5.487 - $6.332 - $1,935) is warranted.

Page 7 of 17
Approved December 12. 2002


Recommendation #1

The Audit staff recommends that the Commission determine that the General
Committee and the GLCF pay the United States Treasury $1,042 and $2,220,
respectively to cover the total outstanding stale-dated checks.

Cc. APPARENT NON-QUALIFIED CAMPAIGN EXPENSES

Section 9002.11(a)(1) of Title 11 of the Code of Federal Regulations
states that qualified campaign expense means any expenditure, including a purchase,
payment, distribution, loan, advance, deposit, or gift of money or anything of value
incurred to further a candidate’s campaign for election to the office of President or Vice
President of the United States.

Section 9003.5(a) of Title 11 of the Code of Federal Regulations states
that each candidate shall have the burden of proving that disbursements made by the
candidate or his authorized committee(s) or persons authorized to make expenditures on
behalf of the candidate or authorized committee(s) are qualified campaign expenses as
defined in 11 CFR 9002.11. The candidate and his or her authorized committee(s) shall
obtain and furnish to the Commission on request any evidence regarding qualified
campaign expenses made by the candidate. his or her authorized committees or agents or
persons authorized to make expenditures on behalf of the candidate or committee.

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 to an eligible
candidate from the 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 Secretary of the Treasury an amount equal to such amount.

During the review of disbursements, the Audit staff identified three
payments to Clearwing Production Services, Inc. that appeared to be duplicate payments
for the goods and services rendered. These payments totaled $89,735. General
Committee representatives were made aware of these payments during fieldwork. As a
result, they stated they were seeking a refund from Cleanwing Production Services. Inc
and disclosed the outstanding receivable on the Year End disclosure report for 2001

This matter was discussed at the exit conference. General Committee
representatives acknowledged the overpayment and stated that they were still seeking a
refund from the vendor.

During the response penod allowed after the exit conference. the General
Committee submitted a copy of a refund check from Cleanving Production Services. Inc
in the amount of $22,900.

Subsequent to this response period, the General Committee received

Page 9 of 17
Approved December 12, 2002








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 of the information disclosed (see Finding II.);

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.);

5. proper disclosure of campaign debts and obligations;

6. the accuracy of total reported receipts. disbursements and cash
balances as compared to campaign bank records;

7. adequate recordkeeping for campaign transactions;

8. accuracy of the Statement of Net Outstanding Qualified Campaign
Expenses filed by the General Committee to disclose its financial
condition (see Finding III.D.);

9. compliance with spending limitations; and,

10. other audit procedures that were deemed necessary in the situation
(see Findings III.A., II].B.. and III.C.).

On November 14, 2000, the Recount Committee registered with the
Internal Revenue Service. The Audit staff reviewed expenditures made by the Recount
Committee, through June 30, 2001. to ensure disbursements were made only for the
purpose of supporting the recount effort

The Audit staff did not analyze issue ads paid for by the national or state
party committees or review payments made to media vendors by the national or state
party committees

Il. AUDIT FINDING AND RECOMMENDATION ~ NON-REPAYMENT
MATTER

DISCLOSURE OF AIR CHARTER ACTIVITY

Section 9004.6(e) of Title 11 of the Code of Federal Regulations requires
that the total amount paid by an authonzed committez for the cost of transportation,
ground services or facilities (including air travel, ground transportation, housing, meals,
telephone service, typewriters and computers) provided to media personnel and Secret
Service personnel, plus the administrative costs incurred by the committee in providing

Page 5 of 17
Approved December 12. 2002


At the exit conference, the Audit staff provided General Committee
Tepresentatives with a schedule of the interest income. Representatives had no comment
on this matter.

In the Preliminary audit report, the Audit staff recommended that the
General Committee either provide documentation to demonstrate that the amounts noted
above should not be considered income or that additional income tax has been paid on
the income. Absent such a demonstration, $12,013 would be repayable to the United
States Treasury.

In response, the General Committee submitted adequate documentation to
demonstrate that the amount of interest income should be $11,625, as well as. a check
for the same amount.

B. 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, repayable to the
United States Treasury.

The Audit staff identified six stale-dated checks totaling $14,314 issued
by the General Committee. Nine stale-dated checks totaling $3,738 issued by the GLCF
for refunds of excessive contributions were also identified.

This matter was discussed at the exit conference and Tepresentatives were
provided with a detailed schedule of stale-dated checks. Representatives of the General
Committee and the GLCF stated they were trying to resolve this issue.

One General Committee check for $2.755 and two GLCF checks for
$1,000 cleared the bank after the response period. thus reducing the stale-dated check
totals to $11,559 and $2,738, respectiv ely

In the Preliminary audit repon. the Audit staff recommended that the
General Committee and the GLCF either provide evidence that the checks are not
outstanding or that they are voided and no obligation exists or repay the United States
Treasury $11,559 from the General Committee funds and $2.738 the GLCF funds.

In response to the Preliminary audit report. the General Committee and
the GLCF submitted documentation demonstrating that the remaining amount of stale-
dated checks for the General Committee and the GLCF should be $1,042 and $2.220,
respectively.

Page § of 17
Approved December 12. 2002