Preliminary Report of the 

Audit Division on 

Nader for President 2008 

January 4, 2008 - August 31, 2008 

Why the Audit 

Was Done 

Federal law requires the 

Conmiission to audit 

every political committee 

established by a candidate 

who receives public funds 

for the primary 

campaign.' The audit 

determmes whether the 

candidate was entitled to 

all of the matching funds 

received, whether the 

campaign used the 

matching fiinds in 

accordance with the law, 

whether the candidate is 

entitled to additional 

matching funds, and 

whether the campaign 

otherwise complied with 

the limitations, 

prohibitions, and 

disclosure requu-ements 

of the election law. 

Future Action 

The Commission may 

initiate an enforcement 

action, at a later time, 

with respect to any of the 

matters discussed in this 

report. 

About the Campaign (p. 2) 

Nader for President 2008 is the principal campaign committee for 

Ralph Nader, a candidate for the Independent Party's nomination 

for the office of the President of the United States. The 

committee is headquartered in Washington, DC. For more 

mformation, see the chart on the Campaign Organization, p. 2. 

Financial Activity (p. 3) 

• Receipts 

o Contributions from Individuals 

o Matching Funds Received 

o Candidate Contributions 

o Loans Received 

o Offsets to Operating Expenditures 

o Total Receipts 

• Disbursements 

o Operatmg Expenditures 

o Transfers to Nader General 

o Fundraising Disbursements 

o Loan Repayments 

o Refunds of Contributions 

o Total Disbursements 

$1,761,530 

753,535 

40,000 

300,000 

4,339 

$2,859^04 

$2,058,691 

103,408 

85,606 

300,000 

13,485 

$2^61,190 

Findings and Recommendations (p. 4) 

• Net Outstanding Campaign Obligations (Finding 1) 

• Misstatement of Financial Activity (Finding 2) 

• Disclosure of Loans (Finding 3) 

26U.S.C. §9038(a). 
Preliminary Report of the 

Audit Division on 

Nader for President 2008 

January 4, 2008 - August 31, 2008 
Table of Contents 

Page 

Part I. Background 

Authority for Audit 1 

Scope of Audit 1 

Inventory of Campaign Records 1 

Part II. Overview of Campaign 

Campaign Organization 2 

Overview of Financial Activity 3 

Part III. Summaries 

Findings and Recommendations 4 

Sununary of Amounts Owed to the U.S. Treasury 4 

Part IV. Findings and Recommendations 

Finding 1. Net Outstanding Campaign Obligations 5 

Finding 2. Misstatementof Financial Activity 11 

Finding 3. Disclosure of Loans 13 
Parti 

Background 

Authority for Audit 

This report is based on an audit of Nader for President 2008 (NFP), undertaken by tfae 

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

Section 9038(a) of Tide 26 of the United States Code. That section states "After each 

matching payment period, the Commission shall conduct a thorough examination and 

audit of the qualified campaign expenses of every candidate and his authorized 

committees who received [matching] payments under section 9037.*' Also, Section 

9039(b) ofthe United States Code and Section 9038.1(a) (2) of the Commission's 

Regulations state that the Commission may conduct other exammations and audits ftom 

time to time as it deems necessary. 

Scope of Audit 

This audit examined: 

1. The receipt of excessive contributions and loans. 

2. The receipt of contributions from prohibited sources. 

3. The receipt of transfers from other authorized committees. 

4. The disclosure of contributions and transfers received. 

5. The disclosure of disbursements, debts and obligations. 

6. The recordkeeping process and completeness of records. 

7. The consistency between reported figures and bank records. 

8. The accuracy of the Statement of Net Outstanding Campaign Obligations. 

9. The campaign's compliance with spending limitations. 

10. Other campaign operations necessary to the review. 

Inventory of Campaign Records 

The Audit staff routmely conducts an inventory of campaign records before it begins the 

audit fieldwork. NFP records were materially complete and the fieldwork began 

immediately. 
Part II 

Overview of Campaign 

Cainpaign Organization 

Important Dates Nader for President 2008 

• Dateof Registration March 4,2008 

• Eligibility Period^ July 15,2008 - September 4,2008 

• Audit Coverage January 4, 2008 - August 31, 2008 

Headquarters Washington, DC 

Bank Information 

• Bank Depositories Four 

• Bank Accounts Seven checking accounts 

Treasurer 

• Treasurer When Audit Was Conducted Carl J. Mayer 

• Treasurer During Period Covered by Audit Carl J. Mayer 

Management Infonnation 

• Attended FEC Campaign Finance Seminar No 

• Used Commonly Available Campaign 

Management Software Package 

Yes 

• Who Handled Accounting and 

Recordkeepmg Tasks 

Paid staff 

^ The period during which the Candidate was eligible for matching funds, beginning on the date of certification of 

eligibility and ending on the date the Candidate announced his withdrawal from the campaign. See 11 CFR 

§9033. 
Overview of Financial Activity 

(Audited Amounts) 

Cash on hand @ January 4,2008 $0 

o Contributions from Individuals 1,761,530 

o Matching Funds Received 753,535^ 

o Candidate Contributions 40,000 

o Loans Received 300,000 

o Offsets to Operating Expenditures 4.339 

Total Receipts $2359,404 

o Operating Expenditures $ 2,058,691 

o Transfers to Nader General 103,408 

0 Fundraising Disbursements 85,606 

o Loan Repayments 300,000 

o Refunds of Contributions 13,485 

Total Disbursements $2,561,190 

Cash on hand @ August 31,2008 $298,214 

^ NFP received an additional $127,959 aftier September 4,2008 for a total of $881,494. This represents 4% of the 

maximum entitlement ($21,025,000) a Presidential candidate was eligible to receive in 2008. 
Part III 

Summaries 

Findings and Recommendations 

Finding 1. Net Outstanding Campaign Obligations 

The Audit staffs review of NFP's financial activity through August 31,2008, and 

estimated winding down costs, mdicated that the Candidate received matching funds of 

$62,698 in excess of his entidement. The Audit staff recommends that NFP provide 

evidence that the Candidate did not receive matching fund payments in excess of 

entidement. Absent this evidence, the Audit staff will make a recommendation that the 

Commission determines that $62,698 is repayable to the U.S. Treasury. 

(For more detail, see p. 5) 

Finding 2. Misstatement of Financial Activity 

A comparison of NFP's reported flgures to its bank records revealed that from January 4, 

2008 through August 31,2008, receipts were overstated by $17,106; disbursements were 

understated by $74,599; and, ending cash was overstated by $91,705. The majority of the 

disbursements understatement was due to transfers NFP made to its General committee 

which were not reported. The Audit staff recommends that NFP amend its disclosure 

reports to correct die misstatements. 

(For more detail, see p. 11) 

Finding 3. Disclosure of Loans 

NFP secured a line of credit m the amount of $500,000 on June 25,2008, but did not file 

the required Schedule C-P-1, or a copy of the line of credit agreement, until November 

21, 2008, after tfae Audit staff made NFP officials aware of this omission. The Audit 

staff recommends that NFP provide any relevant comments it has on this issue. 

(For more detail, see p. 13) 

Summary of Amounts Owed to the U.S. 

Treasiuy 

Finding 1 Federal Funds Received in Excess of Entidement $62,698 

Total Due U.S. Treasury $62,698 
Part IV 

Findings and Reconmiendations 

Finding 1. Net Outstanding Campaign Obligations 

Summaiy 

The Audit staff's review of NFP's financial activity through August 31,2(X)8, and 

estimated winding down costs, indicated that die Candidate received matching funds of 

$62,698 in excess of his entidement. The Audit staff recommends that NFP provide 

evidence that tfae Candidate did not receive matching fund payments m excess of 

entitlement. Absent this evidence, the Audit staff will make a recommendation that the 

Commission determines that $62,698 is repayable to die U.S. Treasury. 

Legal Standard 

A. Net Outstanding Campaign Obligations (NOCO). Widim 15 days after the 

candidate's date of ineligibility (see definition below), the candidate must submit a 

statement of "net outstanding campaign obligations." This statement must contain, 

among odier things: 

• The total of all committee assets including cash on hand, amounts owed to the 

conunittee and capital assets listed at their fair market value; 

• The total of all outstanding obligations for qualified campaign expenses; and 

• An estimate of necessary winding-down costs. 11 CFR §9034.5(a). 

B. Date of Ineligibility. The date of ineligibility is whichever of the following dates 

occur first: 

• The day on which the candidate ceases to be active in more than one state; 

• The 30di day following the second consecutive primary in which tfae candidate 

receives less than 10 percent of the popular vote; 

• The end of die matching payment period, which is generally the day when the 

party nominates its candidate for the general election; or 

• In the case of a candidate whose party does not make its selection at a national 

convention, the last day of the last national convention held by a major party in 

the calendar year. 11 CFR §§9032.6 and 9033.5. 

C. Qualified Campaign Expense. Each of the following expenses is a qualified 

campaign expense. 

• An expense that is: 

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

period beginning on die day die individual becomes a candidate and 

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

§9033.5; 

o Made in coimection widi the candidate's campaign for nomination; and 

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

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

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

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

• An expense associated witfa winding down tfae campaign and terminating political 

activity. 11 CFR §9034.4(a)(3). 

D. Value of Capital Assets. The fair market value of capital assets is 60% of the 

total original cost of die assets wfaen acquired, except that assets that are received 

after the date of ineligibility must be valued at their fair market value on the date 

received. A candidate may claim a lower fair market value for a capital asset by 

listing the asset on tfae NOCO statement separately and demonstratmg, dirougjh 

documentation, the lower fair market value. 11 CFR §9034.5(c)(l). 

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

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

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

payments provided tfaat he or she still faas net outstanding campaign debts on tfae day 

wfaen the matcfaing payments are made. 11 CFR §9034.1(b). 

F. Allocation of Primary and General Election Winding Down Costs. A 

candidate wfao runs in botfa tfae primary and general election may divide wmdmg 

down expenses between fais or her primary and general election committees using any 

reasonable allocation method. An allocation method is reasonable if it divides the 

total winding down costs between die primary and general election committees and 

results in no less than one third of total winding down costs allocated to each 

committee. A candidate may demonstrate diat an allocation method is reasonable 

even if eidier tfae primary or tfae general election committee is allocated less dian one 

diird of die total winding down costs. 11 §CFR 9034.11(c) 

G. Primary Winding Down Costs During the General Election Period. A primary 

election candidate who does not run in the general election may receive and use 

matching funds for diese purposes either after he or sfae faas notified die Commission 

in writing of fais or faer withdrawal from the campaign for nomination or after the date 

of the party's nommating convention, if he or she has not withdrawn before tfae 

convention. A primary election candidate wfao runs m tfae general election, regardless 

of wfaetfaer the candidate receives public funds for the general election, must wait 

until 31 days after tfae general election before using any matching funds for windmg 

down costs related to tfae primary election. No expenses incurred by a primary 

election candidate who runs in the general election prior to 31 days after the general 

election shall be considered primary winding down costs. 11 CFR §9034.11(d). 
Facts and Analjrsis 

The Candidate registered with the Commission on March 4,2008 and received fais first 

matcfamg funds payment on July 17,2008. Tfae Candidate's date of ineligibility (DOT) 

was September 4,2008.* After becoming ineligible due to tfae application of 11 C^FR 

§9033.5(b), tfae Candidate continued to campaign for the general election. For purposes 

of determinmg Net Outstandmg Campaign Obligations (NOCO), tfae Audit staff only 

considered winding down costs incurred after December 5,2(X)8, the end of the general 

expenditure report period, 31 days after die general election, in which NFP was eligible 

to use matching funds for winding down costs related to tfae primary election, as specified 

at 11 CFR §9034.11(d). Winding down costs were allocated between NFP (Primary 

Committee) and Nader for President 2008 General Committee (Nader General) using a 

70/30 ratio, respectively, as proposed by NFP and verified for reasonableness by tfae 

Audit staff. The Audit staff reviewed NFP's financial activity through March 31,2009, 

analyzed estunated winding down costs and prepared die Statement of Net Outstanding 

Campaign Obligations tfaat appears on tfae next page: 

* This was the last day of the last national convention held by a major party. 
Nader for President 2008 

Statement of Net Outstanding Campaign Obligations 

As of September 4,2008 

Prepared on December 31,2009 

Assets 

Cash on Hand 

Cash in Bank 

Accounts Receivable 

Capital Assets 

Inventory - Merchandise 

Total Assets 

Liabilities 

Accounts Payable for Qualified Campaign Expenses 

9/4/08 

Winding Down Costs (9/S/08 - 12/4/08) 

Actual Winding Down Costs (12/S/08 - 12/31/09) 

Estimated Winding Down Costs (1/1/10 - 9/30/10) 

Total Uabilities 

$ 893 [a] 

123.908 

8.921 

10.298 

SOO 

$ 98.884 

0 

77,898 

[b] 

36.665 [c] 

$144,520 

$ 213.446 

Net Outstanding Campaign Obligations (Deficit) as of September 4,2008 ($68.926) 

Footnotes to NOCO Statement! 

[a] Amount includes contributions dated prior to DOI and deposited after DOI. 

[b] Winding down costs were not allowed during this time period because a candidate running in the general 

election must wait until 31 days after the general election (12/5/08) before using any matching fimds for 

winding down costs related to the primary election, pursuant to 11 CFR §9034.11(d). 

[c] Estimated winding down costs will be compared to actual winding down costs and adjusted accordingly. 
Shown below are adjustments for funds received after September 4,2008, through 

December 31,2009, based on tfae most current fmancial information available at die close 

of fieldwork: 

Net Outstanding Campaign Obligations (Deficit) as of 9/4/08 ($68,926) 

Private Contributions and Other Receipts Received 9/5/08 

dirough 10/3/08 

3.665 

Matching Funds Received on 10/3/08 127.959 

Federal Funds Received in Excess of Entitlement $62,698 

As presented above, NFP received matching funds totaling $62,698 in excess of die 

amount which the Candidate was entitied. 

The Audit staff prepared a Statement of Net Outstanding Campaign Obligations and 

provided it to NFP at the exit conference. In response, tfae NFP Counsel stated diat NFP 

takes issue witfa die NOCO statement because of faow die Commission currentiy 

interprets tfae wmding down rules as applied to a candidate wfao receives primary 

matching funds, goes on to the general election, but does not receive general election 

public funding. He noted tfaat tfae bright line cut-off mle regarding post-DOI 

expenditures does not count primary expenditures from DOI durou^ die end of tfae 

general expenditure report period (December 5,2008) was unfair to a minor party 

candidate wfao received primary matcfaing funds and wfao faad to go througfa ballot access 

faurdles, even after tfae major parties faeld dieir nominating conventions. Counsel added 

tfaat primary-related expenses incurred after DOI are disqualified solely on wfaen they 

were incurred but tfaat state-determined ballot access requirements for minor party 

candidates result in the incurrence of indisputably primary-related expenses, i.e. ballot 

access expenditures, after the nomination date of the last major party to hold its 

convention. 

Counsel points out that the Nader 2000 Primary Committee argued this issue in its 

response to die Preliminary Audit Report, whicfa tfae Commission rejected in part at tfae 

time, but diat if tfae Commission were to reconsider its bright line mle, NFP can identify 

and submit documentation for expenses that were incurred during the period September 5 

througfa November 4 tfaat sfaould be considered primary expenses. 

As noted in the Legal Standard section above, the Commission's regulations specify that 

qualifled campaign expenses must be incurred between tfae date tfae individual becomes a 

candidate and the last day of tfae candidate's eligibility under 11 CFR §9033.5. In Mr. 

Nader's case, he has been given the benefit of the longest possible primary period. 

Therefore, expenses between September 5, and November 4,2008, cannot be considered 

primary election expenses. 

Counsel also notes tfaat NFP followed 11 CFR 9034.11(d), and as a result, no primary 

matcfaing funds or private monies were used for any expenses mcurred in tfae "general 

election" period througfa December 5 but tfaat "clearly-identifiable primary winding down 

expenses were incurred during tfais period, especially after November 4 and tfarougfa 

December 5." He stated tfaat even if NFP is not given credit for any primary expenses 

through November 4, it should be given credit for obvious winding down expenses 
10 

incurred November 5 through December 5,2008 and that the expenses incurred related to 

the Commission's audit on NFP's premises from November 13 througfa December 9, 

2008 were undeniably primary winding down expenses. 

NFP calculated at least $88,137 in wmdmg down expenses from November 5 dirougfa 

December 5,2008 wfaich it believes should be considered legitimate winding down 

expenses and apart from its request for the Commission to reconsider the bright line mle 

in NFP's situation, proposed two solutions to adjust tfae NOCO: (1) Apply full credit in 

tfae amoimt of $88,137 for the period November 5 dirough December 5,2008 for 

expenses NFP can document as primary windmg down expenses, due to tfae timing of tfae 

audit. And at a minimum, 70%, or $61,696, sfaould be allowed. (2) If proposal #1 is not 

accepted, tfaen all actual expenses from December 5 tfarougfa termination sfaould be 

credited on the NOCO 100% as primary expenses, as opposed to the 70/30% 

Primary/General allocation. Coimsel states that based on 11 CFR 9004.11(c) [note: 

identical to 11 CFR 9034.11(c)], die Audit staff has the flexibility to allow a candidate 

who runs m botfa tfae primary and general to divide windmg down expenses between tfae 

primary and general using any reasonable allocation metfaod and tfaere is notfaing in 11 

CFR 9034.11(d) tfaat profaibits crediting NFP as faaving its general election wmding down 

costs during the post-general election period within 31 days of the general election. He 

adds that the regulation solely refers to not using primary matching fimds for windmg 

down costs related to the primary election. 

The Audit staff notes diat die Explanation and Justification for 11 CFR 9034.11(d) -

Candidates Who Run in Both Primary and General Elections states tfaat: 

.. .a candidate wfao runs in tfae general election must wait until tfae day 

following die date 30 days after tfae general election before using matcfaing 

fimds for primary wmding down costs, regardless of wfaetfaer the candidate 

receives public fimds for the general election. This rule clarifies that no 

expenses incurred prior to 31 days after tfae general election by candidates 

who run in the general election may be considered primary winding down 

costs or paid with matching fimds. 

The Explanation and Justification also notes tfae followmg: 

Altfaough tfais revised rule may result m general election campaigns 

incurring a small amount of administrative costs related to terminating tfae 

primary campaign during tfae general election period, in practice, these 

expenses are offset by general election start up costs that are incurred and 

paid by tfae primary committee prior to tfae candidate's DOI. This 

approach is also consistent witfa tfae Commission's brigfat line mles for 

allocating expenses between primary and general campaigns at 11 CFR 

9034.4(e), whicfa allow some primary related expenses to be paid by tfae 

general election committee and vice versa. 

Widi respect to the 70% primary 30% general election allocation ratio, it is already less 

than die suggested minimum ratio m tfae regulation and was tfae allocation suggested by 

tfae Audit staff. It recognizes tfaat tfae primary wind down effort was tfae major sfaare of 
11 

tfae effort, but also recognizes tfaat tfaere was a general election campaign tfaat required 

attention at the same time. 

Counsel's fmal point was that. .public policy sfaould not penalize a political committee 

through the application of the FEC's regulations for being extraordinarily efHcient, for 

being prepared for immediate audit, for paying its bills in a timely fashion, and for being 

able to terminate quickly." Botfa NFP Counsel and tfae Audit staff agree tfaat applying tfae 

regulations as written to NFP's situation, allowing no primary winding down costs until 

December 6,2008, and considering all expenses mcurred after September 4,2008, to be 

general election expenses, produce tfae result sfaown on the NOCO presented above. 

Preliminary- Audit Report Recommendation 

The Audit staff recommends that, witfain 60 days of service of tfais report, NFP provide 

evidence that it did not receive matching fund payments in excess of entitiement. Absent 

such evidence, die Audit staff will make a recommendation tfaat tfae Commission 

determines tfaat $62,698 is repayable to tfae U.S. Treasury. 

Finding 2. Misstatement of Financial Activity 

Summary 

A comparison of NFP's reported figures to its bank records revealed tfaat from January 4, 

2008 through August 31,2008, receipts were overstated by $17,106; disbursements were 

understated by $74,599; and, ending cash was overstated by $91,705. The majority of tfae 

disbursements understatement was due to transfers NFP made to its General committee 

which were not reported. Tfae Audit staff recommends tfaat NFP amend its disclosure 

reports to correct die misstatements. 

Contents of Reports. Each report must disclose: 

• The amount of cash on hand at the beginning and end of the reporting period; 

• The total amount of receipts for tfae reportmg period and for tfae calendar year; 

and 

• Tfae total amount of disbursements for tfae reporting period and for tfae calendar 

year; 

• Certain transactions tfaat require itemization on Schedule A (Itemized Receipts) or 

Schedule B (Itemized Disbursements). 2 U.S.C. §434(b)(l). (2), (3). (4) and (5) 

Facts and Analysis 

Tfae Audit staff reconciled NFP's reported financial activity to its bank records and 

determined tfaat tfaere was a misstatement of casfa on hand, receipts, and disbursements. 

The following chart outiines the discrepancies and succeeding paragraphs explain, to the 

extent possible, the reasons for tfae misstatements. 
12 

2008 Activity 

Reported Bank Records Discrepancy 

Opening Cash Balance 

©January 4,2008 

$0 $0 $0 

Receipts $2,977,570 $2,960,464 $17,106 

Overstated 

Disbursements $2,587,452 $2,662,051 $74,599 

Understated 

Ending Cash Balance 

@ December 31,2008 

$390,118 $298,413 $91,705 

Overstated 

The overstatement of receipts resulted from tfae following: 

• Earmarked contributions double-counted in 

receipts total 

• Over reported receipts 

• In-kind contributions not reported on Schedules A 

• Unexplained difference 

Net Overstatement of Receipts 

Tfae overstatement of disbursements resulted from tfae following: 

• Uiu-eported transfers to Nader General 

• Net reported bank debit adjustments, never adjusted 

(voided cfaecks; contributions retumed for insufficient 

funds; stop payments; over/under reported items) 

• In-kind contributions not reported on Schedules B 

• Unexplained difference 

Net Understatement of Disbursements 

(13,725) 

( 4,225) 

838 

6 

^( 17.106^ 

101,391 

(15,306) 

251 

(11.737^ 

$ 74.599 

The overstatement of ending casfa on hand in the amount of $91,705 resulted from tfae 

misstatements described above. 

NFP did not report the majority of transfers of contributions in excess ofthe limitations it 

made to the Nader General committee, m the amount of $101,391. These transfers were 

mainly contributions to NFP wfaere tfae contributors faad exfaausted tfaeu: contribution 

limitation to NFP and tfae excessive portion of tfae contribution was properly redesignated 

to tfae Nader General. 

At tfae exit conference the Audit staff explained the misstatements and subsequentiy 

provided NFP representatives with schedules detailing these discrepancies. In response, 

the NFP representatives agreed to amend its reports. 

Preliminary Audit Report Recommendation 

The Audit staff recommends tfaat, witfain 60 calendar days of service of diis report, NFP: 

• Amend its 2008 reports to correct tfae misstatements; and 
13 

Amend tfae casfa balance on its most recentiy filed report with an explanation that 

it resulted from audit adjustments from a prior period. It is fiirther recommended 

that NFP reconcile the cash balance on its most recent report to identify any 

subsequent discrepancies tfaat may impact adjustments recommended by die 

Audit staff. 

I Finding 3. Disclosure of Loans 

Summary 

NFP secured a line of credit in tfae amount of $500,000 on June 25, 2008, but did not fde 

tfae required Scfaedule C-P-1, or a copy of the line of credit agreement, until November 

21,2008, after the Audit staff made NFP ofticials aware of this omission. The Audit 

staff recommends tfaat NFP provide any relevant comments it faas on tfais issue. 

Legal Standard 

Loans. When a political committee obtams a loan from, or establishes a line of credit at, 

a lendmg institution as described mi l CFR 100.82(a) dux>ugh (d) and 100.142(a) 

tfarougfa (d), it sfaall disclose in tfae report covering die period wfaen die loan was obtained, 

tfae following information on Schedule C-1 or C-P-1: 

(i) The date and amount of tfae loan or line of credit; 

(ii) Tfae interest rate and repayment schedule of tfae loan, or of each draw on tfae line 

of credit; 

(iii) The types and value of traditional collateral or odier sources of repayment tfaat 

secure tfae loan or the line of credit, and if that security interest is p^ected;. 

(iv) An explanation of the basis upon wfaicfa tfae loan was made or tfae luie of credit 

establisfaed, if not made on the basis of either traditional collateral or tfae otfaer 

sources of repayment described mi l CFR 100.82(e)(1) and (2) and 

100.142(e)(1) and (2); and 

(v) A certification firom tfae lending institution tfaat tfae borrower's responses to 

paragrapfas (d)(l)(i)-(iv) of this section are accurate, to tfae best of tfae lending 

institution's knowledge; tfaat tfae loan was made or the line of credit established 

on terms and conditions (includuig interest rate) no more favorable at die time 

than those imposed for similar extensions of credit to other borrowers of 

comparable credit worthiness; and that tfae lending institution is aware of tfae 

requirement tfaat a loan or a Ime of credit must be made on a basis wfaicfa assures 

repayment and tfaat tfae lending institution has complied with Commission 

regulations at 11 CFR 100.82(a) dirough (d) and 100.142(a) dirough (d). 

llCFR§104.3(d)(l). 

In addition, a political committee shall submit: (1) a copy of tfae loan or line of credit 

agreement wfaicfa describes the terms and conditions of the loan or line of credit when it 

files Schedule C-1 or C-P-1; and, (2) a Schedule C-1 or C-P-1 each time a draw is made 

on a line of credit. 11 CFR § 104.3(d)(2) and (3) 
14 

Facts and Analysis 

NFP secured a line of credit totalmg $500,000 on June 25,2008. The loan agreement 

stipulated that repayment was due by September 3,2008. A total of $300,000 was drawn 

against this line of credit, and disclosed on Schedules C-P, in amounts of: $200,000 on 

June 27,2008; $50,000 on July 10,2008; and. $50,000 on August 22,2008. The furst 

two draws were repaid with interest on July 18,2008 and the tfahd draw was repaid witfa 

interest on August 29,2008. 

NFP filed Schedules C-P for each of the tfaree line of credit draws but did not file tfae 

required Schedule C-P-1, or a copy of die line of credit agreement, until November 21, 

2008, after tfae Audit staff made NFP officials aware of tfais omission. No fiirtfaer 

amendments will be necessary for tfae line of credit disclosure. 

Preliminary Audit Report Reconmiendation 

The Audit staff recommends that, witfain 60 calendar days of service of tfais report, NFP 

provide any relevant comments it faas on tfais issue.