Final Audit Report of the 

Commission on the Committee 

for Charlotte/Charlotte DNC 

Host Committee 

(April 1, 2011 - December 31, 2012) 

Why the Andit 

Was Done 

The Commission audits 

each host committee or 

municipal fiind that 

fcpreseuts a city where a 

publicly financed 

was held. The audit 

sedcs to determine 

whether the committee 

has materially complied 

with the proldbitions and 

disclosure requiiements 

of the election law.' 

Future Aetlon 

The Commission iruy 

initiMte an enfiyrccnMriit 

action, at a later time, 

with le^rect to any of the 

matters discussed in this 

leport 

About the Committee (p. 2) 

The Committee for Charlotte/Charlotte DNC Host Committee (CFCX 

headquartered in Charlotte, North Carolina, is a committee responsible 

for hmting the 2012 Democratic National Convention. Formore 

infomudion, see the chart on the Committee Organization, p. 2. 

Financial ActMty (p. 2) 

• Receipts 

o Contributions to Defii^ Convention 

Expenses 

o Loaru Received 

o Refunds, Rebates, Returns of Dqx»its 

o Other Income^ 

Total Recdpti 

Diiborsements 

o Convention Expenditures 

O Trangfiew tn Afflliatwl rnmmitteai 

o Loan Repayments Made 

o Other Ditiwraements 

Total Dtsbniseiiiciits 

S 24,428337 

13,000,000 

31 

(2,709) 

S37«42S,6S9 

8 32,532,958 

8,783 

4,000,000 

93,592 

836,635333 

Commlaaion Flndinfi (p. 3) 

• Recordkeepmg fin in-Kind Conlributions (Finding 1) 

• Disclosure of Diahuraeiiients (Finding 2) 

' liCFR §9008.54. 

* This unoimt VMS remit from lea on InvertaieDti. 
Final Audit Report of the 

Commission on the Committee 

for Charlotte/Charlotte DNC Host 

Committee 

(April 1, 2011 - December 31, 2012) 
Table of Contents 

Fafe 

Part I. Backfronnd 

Authority for Audit I 

Scope of Audit 1 

Inventocy of Committee Records 1 

Audit Hearing 1 

Partn. Overview of Committee 

Committee Organization 2 

Overview of Financial Activity 2 

Pert m. Summaries 

Commission Findings 3 

Pert IV. Commission Findings 

Finding 1. Recordkeeping fiar In-Kind Contributions 4 

Finding 2. Disclosure of Disbursements 6 
Parti 

Background 

Authority for Audit 

This report is based on an audit of the Committee for Charlotte/Charlotte DNC Host 

Committee (CFC), undertaken by the Audit Division of die Federal Election Commission 

(the Commission) as by Section 9008.54 of Title 11 of the Code of Federal 

Regulations. That Mgrimi ihm PnimiiiiMrinifi m\uX\ cwndiiet an Mraminarinn and audit 

of each host committee registered under 11 CFR §9008.51. 

Scope of Audit 

This Audit examined: 

1. the receipt of contributions fiom prohibited sources; 

2. the disclosure of contributions and other receipts; 

3. the disclosure and nature of disbursements; 

4. the disclosure of debts and obligations; 

5. the completeness of records; 

6. the consistency between reported figures arxl bank records; and 

7. other committee operations necessary to tiw review. 

Inuentofy of Committee Reeorde 

The Audit staff routinely conducts an inventory of committee records before it begins the 

audit fieldwork. CFC records were materially complete and the ficldworic began 

immediately. 

Audit Hearing 

CFC declined the opportunity fin* a hearing before the Commission on the matters 

presented in this report 
PartU 

Overview of Committee 

Committee Organisation 

Important Dates 

• Date of Resislntion February 16,2011 

• Audit Coverase April 1,2011 - December 31,2012 

Hcadanartm Charlotte, North Carolina 

Bank InfbnnatioB 

0 Bank Depositories Two 

e Bank Arrnnnta Three Acmuntsi 

Treasurer 

• Treasurer When Audit Was Conducted Harvey Oantt 

• Treasurer Durina Period Covered by Audit Harvey Oantt 

Management Information 

• Attended Commission Campaign Finance 

Seminar 

No 

• Who Handled Accounting and Recordkeeping 

Tasks 

Paid Staff 

Overview of Financial Activity 

(Audited Amouuts) 

Caah-on-hand (S April 1,2011 S 0 

Reedpti 

o Contributions to Defiay Convention Expenses 24.428,337 

o Loans Received 13,000,000 

o Refunds, Rebates, . of Deposits 31 

o Other Income 0.709) 

Total Receipts $37^425,659 

Diibnricmcnti 

o Convention Expenditures 32,532,958 

p TffOfiufim tn AffilSafMl fnmmiffwwe g7R^ 

4,UUU,UUU 

o Other Disbursements 93,592 

TotalDisbiuicmcnti $36,635,333 

Cash-on-hand @ December 31« 2012 $ 790326 
Partm 

Summaries 

Commission Findings 

Finding 1. Rncordkeepiiig fbr In-Kind ContrlbatioiM 

The Audit staif identified 23 in-kind contributions provided by coipontions, commeccial 

vendors, and individual contributors totaling $2,878,882 that lacked the requiied 

siqiporting documentation. InieqxinaetotfaePieliininaiyAuditRqxntreconnnendation, 

crc provided some internally de^oped siqiporting documentation for aportion of its 

in-kind contributions, but the reported amounts still remained unverified md the finding 

unresolved. In leaponse to the Draft Final Audit Rqioct, a CFC rqxesentative stated tiiat 

he was trying to obtain and provide additional in-kM documentation. 

The Coimnission qqiroved a finding that CFC failed to wiaintwin appropriate 

documentation to sqyport reported in-kind contributions totaling $2,878,882. (Formore 

detail, see p. 4.) 

Finding 2. Diselorare of Dlsbnnements 

The Audit staff identified 43 disbursements totaling $12,580,995 that were either missing 

or did not adequately provide required disclosure infomiation. Inreqxxnsetothe 

Preliminary Audit Re^ recommendation, CFC filed amended disclosure reports that 

materially corrected disbursement disclosure errors. Ihe Draft Final Audit Rqxnt 

also adoiowledged that CFC amended its reports and materially corrected the 

disbursement disclosure errors. 

The Commission approved a finding that CFC did not adequately disclose the required 

infiffmafion tor disbursements totaling $12,580,995. (For more detail, see p. 6.) 
Part IV 

Commission Findings 

Finding 1. Recordkwepiiig for in-Bnd CoBtrflmtloM | 

SoBuuuy 

The Audit stuff identified 23 in-kind contributiQiis provided by corpoiations, commercial 

vendors, and individual comributois totaling $2,878,882 that lacked the required 

supporting documentation. In reqxmse to the Prelizriinary Audit Report recommendation, 

CFC provided some internally developed supporting documentation fiir a portion of its 

m-land contributions, but the reported amounts still remaiiied unverified die finding 

unresolved. In reqxmse to the Draft Final Audit Rqiort, a CFC rqnesentative stated that 

he was trying to obtain and provide additional in-ldnd documentation. 

The Commission approved a finding that CFC foiled to mwintiiin appropriate 

documentation to siqqxirt reported in-kind contiibutioiis totaling ^,878,882. -

Lefal Btudaid 

A. Receipts and dIsbniicmcDii of municipal fbnds. Municipal flmds nu^ accept 

goods or services fixnn commerdai vendors for convention uses under the same 

terms and conditions (including icpmUng requiiemeiits) set fintfa at 11 CFR 

9008.9 for convention committees. Busiiiesses (inciuding banksX labor 

organizntions, and other organizations and individuals nuy donate funds or make 

in-ldnd donations to a municipal flmd to pay for expenses listed in 11 CFR 

9008.S2(b). 11 CFR §9008.53. 

B. Recordkeeping for goods and services ftvmcommereial vendors for 

promotional considenitlDn. Cammerdal vendors imqf sell, lease, rent or provide 

their goods or services to the national committee wifo respect to a presidential 

nominating convention at reduced or discounted rates, or at no charge. Die 

CQiivention conuiiittee diall inaiiitain documentation showmg; 

• the goods or services provided; 

• the date(s) on vdiich foe goods or services were provided; 

• the terms and conditions ofthearxangemen^ and 

• what promotional consideration was provided. 11 CFR §9008.9(bX4). 

C. Valnation of In-Kind Contilbntlons. The amount of an in-ldnd contributfon 

diall be equal to the usual and normal value on the date received. 11 CFR 

§104.13(aXl). 

D. Foimal Requirements Regarding Reports and Statements. Each political 

committee diall maintain records wifo leqiect to die matters required to be 

reported which shall provide in sufficient detail the necessary infinmation and 

data from vdiich the filed reports may be verified, explained, clarified, and 

checked for accuracy and comideteness. 11 CFR§104.14(bXl)> 
E. RmrdkccplBg Rcqulrananti Ibr Recdpti. The treasurer of a political 

committee shall keep an account of: 

• All contributions received by or on behalf of the committee; 

• The name and address of ai^ person who makes a contribution in excess of 

SSO, together with the date and amount of the conlribution; and 

• The occupation and name of enqtloyer of any individual whose contributions 

aggregate more than $200 during a calendar year, together with the date and 

amount of any such contributions. 11 CFR§102.9(a). 

F. Preserving Documents. Committees must preserve these records fiv 3 years 

after a report is filed. 11 CFR§102.9(c). 

Facta and Aulyslu 

A. Facts 

The Audit staff identified 23 in-kind contributions totaling $2,878,882 that lacked the 

required supporting documentatioiL The in-ldnd contributions consisted of goods and 

services provided by commercial vendors, corporations, and individuals. Approximately 

half of the in-kind contributions totaling $1,557,053 originated fiom one corporation. 

Documentation siqypoiting the amount of in-kind contributions reported were receipt and 

disbursement databases and a few internal tracking forms that stated the amount of the 

contribution, the liiw item to be "tiiigwH in hs recording, and in one case, a contract 

reference.^ However, no internal corrqratational worksheets or documentation fiom 

contributors was provided that would allow firr verification of the amounts lepoiled. 

Also, in-kind contributions having some promotumal considention were not specifically 

identified or valued. During fieldwork, ita Audit staff adced CFC rqnesentatives for 

additioiul in-ldnd documentation. CFC slated h was availabte and wotdd be provided, 

but no additiotud documentation was sent 

B. Prdlrataiary Audit Report A Audit Dtvishm Recommendation 

At the exit conference, the Audh staff discussed and provided a list of in-kind 

contributions fixr which CFC had not provided supporting documentation. CFC 

rqaesentatives acknowledged the support fixr in-ldnd contributions and stated 

tfa^ would locate and provide the required documentation. 

The Preliminary Audit Rqxort leconunended that CFC obtain and provide documentation 

to support the u-ldnd contributions. 

C. Committee Response to Preilmlnaiy Audit Report 

In response to the P^iminary Audit Rep^ recommendation, CFC provided in-kind 

contribution documentation. The in-ldnd documentation consisted of four internally 

generated ''tracking forms,"* totaling $1,264,477, and an internal draft schedule that 

' The conlzKtiiilmfbnnatlon did not provide the type taitteBHtiaD needed to verity the imouiiliicpoftecL 

* Thh tiacking form provided mouly infemution that wMiimilartotfaeinibmMtton ftmnd in CFC'i 

Amtmhmfm infimiiatloo oftfao fbUowfaig: doDoriiifbnDttloo,adeicriptioiioftfaeit8inor 

•ervice provided, the proposed value,! budget line item, 14 a pime Ibr difltewitcominltleeiipwtum. 

All tncking ibmia were unsigned. 
totaled $2,121,206. In addition, a CFC repreacntativc stated that he was trying to work 

with fimer staff to provide additional inrkind documentation, hut ultimately he said 

additional documentation could not be located. 

The schedules and fonns CFC provided did not include any documentation from the 

contributors, wockdieet calculations, or any other details tto would allow fisr verification 

of the in-ldnd contributions rqairted. In action, $757,676, still remains without 

siqiporting documentation. Because the documentation CFC provided did not allow fin 

the verification of the in-ldnd contributions iqxnted, along with the absence of 

documentation fin the remaining in-kind contributions reported, this finding remains 

unresolved. 

D. Draft Final Audit Heport 

The Draft Final Audit Report acknowledged that CFC provided in-kind contribution 

documentation, but stated the documentation was insufficient to resolve the fiwHing 

E. Committee Response to the Draft Final Audit Report 

In response to the DaSt Final Audit Report, a CFC representative stated that he was 

trying to obtain and provide additional in-kind docunwntation. 

Commission Conclusion 

On Sqitember 17,2015, the Commission considered the Audit Division 

Recommendation Memorandum in which the Audit staff recommended that the 

Commission adopt a finding that CFC failed to maintain qipropriate documentation to 

support reported in-kind contributions totaling $2,878,882. 

The Commission qgaoved the Audit staffs recommendation. 

I Finding 2, PtocloftniD of PislmiRementR 

gnmmniy 

The Audit staff identified 43 disbursements totaling $12,580,995 that were eitiier missing 

or did not adequately provide required disclosure infiwmation. In response to the 

Preliminary Audit Report tecomnmndation, CFC filed amended disclosure reports that 

materially CQrreGtedtedidiurseineiit disclosure errors. The Draft Final Au^ Rqxnt 

also ackriowledged that CFC its reports and materially corrected the 

disbursement disclosure errors. 

The Commission approved a finding that CFC did not adequately disclose the required 

infiirmation for disbursements totaling $12,580,995. 

Logpl Stendaid 

A. Reporting Eipcndltnres. When expenditures to die same person exceed $200 in 

a calendar year, the committee must report the: 

• Amount; 

• Date when the expenditures were made; 
• Name and address oftfaepi^; and 

• Pinpose (a hriefdescriptionofwfay the disbunement was made-see below). 

52 U.S.C. §30104(bXSXA) and 11CFR §104.3(bX3Xi)-

B. Repordiig Credit Card Transaetloiis. A committee imistitenuze a iNQmieDt to 

a credit card company if the payment exceeds the $200 aggregate thre^ld fixr 

itemization. The committee must also itemize, as a memo enlzy, any specific 

transaction charged on a credit card if the payment to the actual vento exceeds 

the $200 threshold. The memo entry must include the name and address of the 

vendor, the purpose ofthe disbursement, and the amount of the didnirsemenL 11 

CFR §102.9(bX2) and 104.9. 

C. Reporting RdmburMments to iBdividnals. When an individual who is not 

acting as a vendor advances his or her personal ftinds (or uses a personal credit 

card) to pay fin goods or services on bdialf of a politi^ committee, the 

reimbursement must be reported as fi>llows; 

• Nontiavel Advances. Report the individual as payee, and report the payments 

aggregating over S200 to any one vendor as memo entries on Schedule B; and 

• Travel and Subsistence Advimces. Iftfae total amount reimbursed is SSOO or 

less, the committee diould report the individual as payee. Ifthe total amount 

exceeds $500 and payments to ai^ one vendor used to die expenses total 

over $200 for the calendar year, lepon the individual as payee, and report the 

payments aggregating over $200 to any one vendor as memo entries on 

Schedule B. Each memo entry must include the name and address of the 

vendor, as well as the date, amount and purpose of the pqnnenL 11 CFR 

§104.3(bX3Xi) and 104.9. 

Fneta and Annljsin 

A. Facts 

The Audit staff identified 43 disbursements totaling $12,580,995 that were missing or did 

not adequately provide required disclosure infimnation. The migority of disclosure 

errors, totaling $12,319,532, involved inadequate purposes disclosed to pi^ents to a 

single vendor. Additional irifimnation is provided in the table below. 

]>escriptlon Number of 

Transactloiu Dollar Value 

Pigments to coipontioiiB or other enthiei whh inadequate 

or wHh no stated purpose disclosed. 38 $12^987 

Payment with an incomntete address discloaed. 1 $48J6S 

Credit card pqaneot with no memo entries disclosing 1 $28,487 

auui reiinDuncmeiiui wim maoequan purposes ano no 

memo entriea disclosing payments made to the uftimale 

vendor. 

3 $13,156 

Total $12480,995 
B. Prellmfaiaiy Audit Report A Audft DMdon Reeomaiendatlon 

At the exit conference, the Audit staff diecussed the missing or disdosuie 

hems with CFC representatives and provided a schedule detailing these items. CFC 

lepresentstives stated they would amend their rqxyrts in reqxmse to the PreliminaEy 

Audit Report. 

The Preliminary Audit Report recommended that CFC amend its reports to conectly 

disclose these disbursements on Schedule B (Itemized Disbursements). 

C. Committee Response to Preilmfaiuy Audit Report 

In reqxmse to the Preliminary Audit Report recommendation, CFC filed amended 

disclosure reports that materially corrected the disbursement disclosure errors. 

D. Draft Final Audit Report 

The Draft Final Audit Repert acknowledged that CFC amended its reports and materially 

corrected the disbursement disclosure errors. 

E. Committee Response to the Draft Final Audit Report 

CFC had no additional coirunents in reqxnise to the Draft Final Audit Report 

Commission Conclusion 

On Sqitember 17,2015, the Commission considered the Audit Division 

Recommendation Memorandum in which the Audit staff recommended the Commission 

adopt a finding that CFC did not adequately disclose the required infinmation fiv 

disbursements totaling $12,580,995. 

The Commission iqqnoved the Audit staff's recommendatiotL