Draft Final Audit Report of the 

Audit Division on the 

Maine Republican Party 

January 1, 2007 - December 31, 2008 

Why the Audit 

Was Done 

Federal law permits the 

Commission to conduct 

audits and field 

investigations of any 

political committee that 

is required to file 

reports under the 

Federal Election 

Campaign Act (the 

Act). The Commission 

generally conducts such 

audits when a 

committee appears not 

to have met the 

threshold requiremei 

for substantial 

compliance with the 

Act'Theamlir-. 

determin^Khether thj 

commi^^omplied 

with^^^^^tions, 

prohibitioiis 

disclosure req^l^ents 

of the Act. 

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 Committee (p 

The Maine Republican Party is a s 

headquartered in Augusta, Maini 

chart on the Committee Orgamzai 

Financial Activ: 

• Receipts ^ 

o Contributions trd 

o Contributions from 

Coi^ittees 

o Conl|fe|tions from 

Politi^P^toittees 

o Transf^fioS^^bfederal 

Account 

All Otiier ^|g^ts 

^al Receipts 

lursements 

Disj^sements 

^ojymm^^^aity Expenditures 

[ederal Election Activity 

o ^^ilgepQndent Expenditures 

TotaBl^bursements 

committee 

information, see the 

48,381 

887 

$ 1,422,584 

$ 806,455 

12,500 

519,305 

56,601 

$ 1,394,861 

fndings and Recommendations (p. 3) 

[isstatement of Financial Activity (Finding 1) 

Reporting of Debts and Obligations (Finding 2) 

• Disclosure of Disbursements (Finding 3) 

• Failure to File Notices and Properly Disclose Independent 

Expenditures (Finding 4) 

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

Audit Division on the 

Maine Republican Party 

January 1, 2007 - Decejaber 31, 2008 
Table of Contents 

Page 

Part I. Background 

Authority for Audit 

Scope of Audit 

Part II. Overview of Committee 

Committee Organization 

Overview of Financial Activity 

Part III. Summaries 

Findings and Recommendations 

Part IV. Findings and Recommenda 

Finding 1. Misstatementof Financial Activity 

Finding 2. Reporting of Debts and (^ligations 

Finding 3. Disclosure of Disbursem 

Finding 4. Failure to File Notices and 

Expenditures 

isclose Int 

4 

6 

7 

12 
Part I 

Background 

Authority for Audit 

This report is based on an audit of the Maine Republican Party (MRP), undertaken by the 

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

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

conducted the audit pursuant to 2 U.S.C. §438(b), which permits tib^ltonmission to 

conduct audits and field investigations of any political committe#Eat irrequu:ed to file a 

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

Commission must perform an intemal review of reports ^ 

determine if the reports filed by a particular committee 

for substantial compliance with the Act. 2 U.S.C. 

Scope of Audit 

Following Commission-approved procedures, 

factors and, as a result, this audit examined: 

committees to 

requirements 

the disclosure of disbursements, debts and obliga1io:i 

the disclosure of expenses alloca^mg^een federal 

the disclosure of individual contripM^fejBcupation 

the consistency between reported fi^esl^P|pp^ records: 

the completeness of records; and 

other committee ois^giG^ necessary tll£^review. 

-federal accounts; 

employer; 
Part II 

Overview of Committee 

Committee Organization 

Important Dates 

• Date of Registration April 19,1976 

• Audit Coverage January 1,2007 - December 31, 2008 

Headquarters Augusta, Maine^P**^ 

Bank Information 

• Bank Depositories One m ^ifc k 

• Bank Accounts TwQ^^raKand FouH^^-federal 

Treasurer 

Treasurer When Audit Was Conducted 

• Treasurer During Period Covered by Audit 

Management Information 

• Attended Commission Campaign Fina!^H|^ LYCS 

Seminar 

Who Handled Accounting and 

Recordkeeping Tasks 

rvi 

staff and accounting firm 

Finl Lcial Activity 

lunts) 

Cash-o^pmd ® J^P^l , 20l^k $ 1,888 

Receij^S. 

o €bi?i^|jons from Ind^Sjials 422,772 

o ContriSl^^s from Polit^^ Party Committees 778,500 

o ContributiS^^pm OtherK>litical Committees . 172,044 

o Transfers froH^^n-fed^S Account 48,381 

o All Other Recei^9^^ff^ 887 

Total Receipts JP^ $ 1,422,584 

Disbursements 

o Operating Disbursements 806.455 

o Coordinated Party Expenditures 12,500 

o Federal Election Activity 519,305 

o Independent Expenditures 56,601 

Total Disbursements $ 1,394,861 

Cash-on-hand @ December 31,2008 $ 29,611 
Part III 

Summaries 

Findings and Recommendations 

Finding 1. Misstatement of Financial Activity 

During audit fieldwork, a comparison of MRP's reported figures with bank records revealed a 

misstatement of receipts, disbursements and cash-on-hand in both 

MRP overstated beginning cash-on-hand by $5,636, understated rei 

disbursements by $29,346 and overstated ending cash-on-hand 

overstated receipts, disbursements and ending cash-on-hand 

respectively. In its response to the Interim Audit Report, 

reports as requested. However, those amendments did 

(For more detail, see p. 4.) 

Finding 2. Reporting of Debts al 

During audit fieldwork, the Audit staff noted that MRP^ 

totaling $103,721. In its response to thejnterim Audit Ref 

materially conect the disclosure of theseltl-ln- i For more del 

2008. For 2007, 

>22,461, understated 

,521. For 2008, MRP 

S46,985 and $19,263, 

amended its 

misstatements. 

^repdrt debts and obligations 

[RP amended its reports to 

;ep.6.) 

Finding 3. Disclosure of Dis 

During audit fieldwork, the Audit staff identf 

appeared to be improperl)^.^sji^ed. MRP mi 

($94,019), which may 

coordinated expendi|^j^pn behi 

election activity ($7l9|5^k In it 

in locating documentation 

^tS 

seme reports disci 

(For morj 

Fi] 

Indepe! 

During audit 

printed materials 

disclosed as operati! 

that these are indepenJ 

conect the disclosure 

amended reports. 

(For more detail, see p. 12.) 

d dis^BM^ji^tSu telling $625,824, which 

bursem^^&om a non-federal account 

ature. In aMition, MRFoid not properly disclose 

if a federal c^didate ($12,500) and payments for federal 

sponse to the^^m Audit Report, MRP cited difficulties 

-federa^aature of some expenses, but filed amended 

ccorom^^^^chedules provided by the Audit staff. 

FileiRo fotices and Properly Disclose 

tur€s 

it staff reviewed disbursements and noted expenditures for 

01, which appeared to be independent expenditures that MRP 

itures. In its response to the Interim Audit Report, MRP agrees 

penditures; however, citing software issues it has been able to 

these payments only partially. To date, MRP has not filed any additional 
Part IV 

Findings and Recommendations 

Finding 1. Misstatement of Financial Activity 

Summary 

During audit fieldwork, a comparison of MRP's reported figures with bank records revealed a 

misstatement of receipts, disbursements and cash-on-hand in both 2007^d 2008. For 2007, 

MRP overstated beginning cash-on-hand by $5,636, understated rec|^^^$22,461, understated 

disbursements by $29,346 and overstated ending cash-on-hand b\|||g,521. For 2008, MRP 

overstated receipts, disbursements and ending cash-on-hand b^^3^^L$46,985 and $19,263, 

respectively. In its response to the Interim Audit Report, MI^Btated^B|Ht had amended its 

reports as requested. However, tiiose amendments did nj^batSaally corHS^e misstatements. 

Legal Standard 

Contents of Reports. Each report must disclos 

• The amount of cash-on-hand at the beginning 

• The total amount of receipts for the reporting period 

• The total amount of disbursements fS^tfae reporting peri 

• Certain transactions that require itemi^^^iiii Schedule A 

B (Itemized Disbursements). 2 U.S.C. 

Facts and Analsrsis 

rting period;^ 

the calendar year; 

for the calendar year; and 

ze^ Receipts) or Schedule 

(5). 

A. Facts 

During audit field> 

calendar years 2007 and^ 

cash balances.xesdpts, 

paragraphs 

Audit ^i.iffreconciled 

lu igUgwing ch 

iiJii 

le misstaP 

's reported activity with bank records for 

^tline the discrepancies for the beginning 

ash balances for each year. Succeeding 

ents, if known. 

^^pksCommittee AcMty fir 

Reported Bank Records Discrepancy 

Begimi^^Cash Balanc^P^ 

January C^^^ M 

$7,524 $1,888 $5,636 

Overstated 

Receipts ^^'^^^,^0^ $223,515 $245,976 $22,461 

Understated 

Disbursements 4^ $209,782 $239,128 $29,346 

Understated 

Ending Cash Balance @ 

December 31,2007 

$21,257 $8,736 $12,521 

Overstated 

MRP overstated beginning cash-on-hand by $5,636, and is unexplained, but the overstatement 

likely resulted from prior-period discrepancies. 
The understatement of receipts was the result of the following: 

• Receipts reported, not supported by a credit or deposit 

• Deposited receipts, not reported 

• Interest from non-federal account reported 

• Unexplained difference 

Net Understatement of Receipts 

The understatement of disbursements was the result of the following: 

• Disbursements not reported 

• Disbursements reported, not supported by check or debit 

• Disbursement from non-federal account reported in enor 

• Disbursement amounts inconectly reported 

• Unexplained difference 

Net Understatement of Disbursements 

The $12,521 overstatement of the ending cash-ondescribed above. 

(186) 

22,533 

(28) 

142 

$ 22.461 

36,506 

(4,006) 

(3,165) 

227 

$19,263 

Overstated 

MRP OVJ 

endi: 

The overs 

• Receipts 

• Unexplai 

Overstatemenf 

id by $12,521, a carryover ofthe misstatement of 

ssultea from the following: 

ited in non-federal account 52,353 

1.374 

The overstatement of ^bursements resulted from the following: 

Disbursements reported, not supported by check or debit 

Disbursements not reported 

Disbursement from non-federal account reported in enor 

Debit to reverse deposited contribution reported . 

Disbursement reported twice 

Disbursement amount inconectly reported 

Unexplained difference 

Net Overstatement of Disbursements 

$ (32,736) 

26,881 

(42,916) 

(5,000) 

(56) 

(1,200) 

8.042 

$ 46.985 
The $19,263 overstatement of the ending cash-on-hand resulted from the misstatements 

described above. 

Prior to the audit, MRP made the Commission aware that an employee of the accounting firm it 

used had embezzled $48,000. The individual, who had kept MRP's books for both its federal 

and non-federal accounts, and prepared the reports to the Commission, pleaded guilty to the 

embezzlement. As of the time of the audit, the individual had paid restitution of $39,531 and 

MRP had filed reports disclosing the embezzlement. MRP conducted a full audit of its books 

and intemal controls and, as recommended by its auditor, has institute^^proved intemal 

controls. In addition, MRP has hired a different accounting firm. 

The Audit staffs 2008 reconciliation included adjustments relj 

Specifically, the adjustment for imreported disbursements of 

disbursements that were associated with the embezzlemeji^d 

addition, the adjustment for disbursements reported 

($32,736), includes disbursements of $14,316 thai iici 

B. Interim Audit Report & Audit Division Recom 

The Audit staff discussed the misstatements for 2007 

the exit conference and provided copies%^jelevant workpa] 

MRP representatives stated that necessai^Btea|ded reports 

IRP: 

ot supporte 

ed with the ei 

embezzlement, 

es $5,997 in 

MRP. In 

check or debit 

nt. 

with MRP representatives during 

the misstatements. The 

d. 

The Interim Audit Report recommended thai 

• Amend its reports to conect the misst^ni^S^fd^^^Q^d 2008 as noted above; and, 

• Amend its most rfiag^S|||ed report to ^^ct the ca|l^n-hand balance with an 

explanation thaye chanMjesulted fronmprior period audit adjustment. Further, MRP 

should havQai^miled the^sh balance or^most recent report to identify any 

subsequent discrq^ijes tffl|ffl|g^y have aff^ed the adjustment recommended by the 

Audit «!taff. 

Respimsv^ Int^^^udit Report 

se to the IntefM^udit K^felCMRP stated it had amended its reports as requested. 

amendmen^^d not ^iterially conect the misstatements. The Audit staff has 

____ ; addition^^onections that need to be made. To date, no additional amended 

reports have 

I Finding 2. Reporting of Debts and Obligations 

Summary 

During audit fieldwork, the Audit staff noted that MRP failed to report debts and obligations 

totaling $103,721. In its response to the Interim Audit Report, MRP amended its reports to 

materially conect the disclosure of these debts. 
Legal Standard 

A. Continuous Reporting Required. A political committee must disclose the amount and 

nature of outstanding debts and obligations until those debts are extinguished. 2 U.S.C 

§4340))(8) and 11 CFR §§104.3(d) and 104.11(a). 

B. Itemizing Debts and Obligations. 

• A debt of $500 or less must be reported once it has been outstanding 60 days from the 

date incuned (the date of the transaction); the committee reports it on the next regularly 

scheduled report. 

• A debt exceeding $500 must be disclosed in the report that co^^^the date on which the 

debt was incuned. 11 CFR §104.11(b). 

Facts and Analysis 

A. Facts 

During audit fieldwork, the Audit staff identified deb| 

tiiat MRP did not report on Schedule D (Debts & 

Altiiough MRP did report debt totaling $45,669 relativ 

audit period, the reported amounts did not accurately refi 

with tiie 2008 July Quarterly Report, th^tgi^t reporting for 

inaccurate for the remainder of 2008. M^^^^aot report debt 

)wed to four vendor 

Rations): 

ing $103,721^ 

"^t use four vendo^ during the 

outstanding debt. Beginning 

ree vendors continued to be 

resnect to the fourth vendor. 

B. Interim Audit Report & Audit DivisioiKecoi 

The Audit staff presented this matter during t^ex^oni 

provided them with worl^p^^fa^ailing the d^pT The rep| 

would file the necessa^mendeSSports. 

MRP's representatives and 

sentatives indicated that MRP 

The Interim Audit Repoi 

and obl-igationsjoaJSchedule 

RespiiiiM* 

se to the Int? 

ese debts. 

Ludit 

that MRP P^amended reports to disclose these debts 

Ludit Report 

£f MRP amended its reports to materially conect the 

lof^e of Disbursements 

Summary 

During audit fieldwork, tiie Audit staff identified disbursements, totaling $625,824, which 

appeared not to be properly disclosed. MRP made disbursements from a non-federal account 

($94,019), which may be federal in nature. In addition, MRP did not properly disclose 

coordinated expenditures on behalf of a federal candidate ($12,500) and payments for federal 

election activity ($519,305). In its response to the Interim Audit Report, MRP cited difficulties 

^ Each debt in this amount was counted once, even if it required disclosure over multiple reporting periods. In order 

for MRP to file amended reports correctly, the schedule provided included the amount of each debt required to be 

reported for each reporting period. 
in locating documentation to clarify the non-federal nature of some expenses but filed amended 

reports disclosing disbursements according to the schedules provided by the Audit staff. 

Legal standard 

A. Reporting Allocable Expenses. A political committee that allocates federal/non-federal 

expenses must report each disbursement it makes from its federal account (or separate allocation 

accoimt) to pay for a shared federal/non-federal expense. Committees report these kinds of 

disbursements on Schedule H-4 (Joint Federal/Non-federal Activity Schedule). 11 CFR 

§104.17(b)(3). 

B. Allocation Ratio for Administrative & Non-Candidate Specifi^Rli^ Drive Costs. State 

and local party committees must allocate their administrative expeg^ and non-candidate 

specific voter drive costs according to the fixed percentage ratifly^B|a: this method, if a 

Presidential candidate and Senate candidate appear on the ba^|, the (Wjmittees must allocate at 

least 36 percent of expenses to their federal fimds. 11 C^^l0^7(d)(2)^^|id (3)(ii). 

C. Coordinated Party Expenditures. A political 

behalf of a federal candidate must report the nanv^ 

the name ofthe candidate for which the expenditure is 

imittee ^at coordinates^^^gndibires on 

^ss, dat^mount and piu^^^s well as 

§434(b)(61P)(iv). 

D. Federal Election Activity Expenditures. For each sua^^bursement, the committee must 

report the full name and address, date, ai^^^igd purpose of^^febursement. Committees 

report these kinds of disbursements on ScflB!li8to[j|gmized Dis^^^ents), which provides 

space for the disclosure of the candidate's n^e to^ii^^ihc activj^elates, if applicable. 11 

CFR §300.36(b)(2). 

E. Salaries and Wai 

employee spends h 

of tiieir compensated tii 

connection with a Federal 

their salarie.^^Hlt\l.;i« .m al 

;s must keepk monthly ibg ofthe percentage of time each 

Federal elel^n. Employees who spend 25 percent or less 

lonth on Fed^prelection activity or on activities in 

ud only from the Federal account or have 

istrativTtSW^ll CFR § 106.7(d)(1). 

Fact^&d Analysis^ 

A. PavmgfEl^ifrom Non-fedi'ral Acifbunts 

1. Facts 

MRP made^^ae|^ totaling $94,019 (see Chart A), from its non-federal accounts for 

activity that im^e federal in natiu-e. Payments totaling $48,520 from MRP's nonfederal accoiinjTappear to be for allocable administrative expenses that should have been 

paid from a federal account. Also, payments totaling $45,499 were made from the nonfederal account and sufficient records were not available to clarify the nature of the 

expense or to demonstrate that the expense was solely non-federal. Below is a discussion 

of these expenses. As calculated at the end of the two-year audit period, MRP did not 

fund federal activity with non-federal fimds. 

• Administrative Costs: MRP paid expenses totaling $48,520 from a non-federal 

account for postage, consulting, travel reimbursements, printing, and accounting 

fees that appear to be allocable administrative costs. Available documentation 
does not indicate that any of these pa3mients were solely for non-federal activities. 

As allocable administrative expenses, MRP should have paid these from a federal 

accoimt and reported on Schedule H-4 using an allocation ratio of at least 36 

percent federal and 64 percent non-federal in accordance with 11 CFR 

§ 106.7(d)(2)(ii) and (3)(ii). MRP should provide documentation to demonstrate 

that these were solely non-federal expenses. 

• Payroll and Associated Costs: MRP paid expenses totaling $14,999 from a nonfederal account for payroll and associated costs. MRP has not provided monthly 

logs, timesheets or affidavits demonstrating that costs vgjjg solely non-federal in 

nature. It is noted that MRP did provide affidavits 

no time was spent relative to federal activity. ?ay. 

with those employees were excluded by the Auj 

amounts presented above. MRP should proyi 

the payroll and associated expenses of $1 

mployees indicating 

d related costs associated 

payroll costs in the 

to demonstrate 

•federal. 

$19,000 pavfflesife|to 'Rational 

; and, the ava^^e invoice 

lumentation toindicate that 

e, MRP should disclose these 

Voter Identification: MRP's databi 

Republican" on April 25,2008, ai 

noted "volunteer connect." Unless 

these expenditures are solely non-federal 

transactions on its federa^^closure reports. 

\ " 

Printed Materials: MRP dis^si^^kiOO from a E|Ptederal account for printed 

materials for which copies w^not^^^^|^ass^ the nature of these 

expendituresQiJo demonstrate^^ were solely for non-federal 

activities^^^fflpio-ild provide^^cient do^mentation to clarify the nature of 

these ei^ases. 

2. Interim Audit ,^|j|LPiy^^^o'^ FpSeommendation 

At the exitxifflference. flljBlimr!^^^[|gi§^this matter and provided a schedule 

identifa^^W^fetaction^muestion^^'t representatives. MRP representatives stated 

thatJ^ would loS^^thesl^ms and send documentation to try to resolve the proper 

;ation of the t^^^tions!^S^pFrepresentatives subsequently provided materials, 

mcluE^^ffidavits ad^^ing tiipeemployees spent on non-federal election activity that 

resolvel^^e of the iteir^hat the Audit staff considered in its analysis. 

The Interim /^^kRepo^ecommended that MRP demonstrate that the identified 

disbursements p^|^^the non-federal account were solely non-federal expenses. MRP 

should have provi^omonthly logs, timesheets or affidavits demonstrating that payroll costs 

were solely non-fi^eral in nature. In addition, MRP should have obtained and provided 

samples of printed materials ($11,500). As necessary, MRP should have amended its reports 

to disclose, as memo entries, the above disbursements on Schedules B or H-4. 

B. Payments from the Federal Account 

1. Facts 

MRP inconectly disclosed payments, totaling $531,805 (See Chart B, Page 1), made from 

its federal account. MRP disclosed these payments on FEC reports but they appear to have 
10 

been reported on the inconect line number and itemized on the wrong schedule. These 

payments were for apparent non-allocable FEA ($519,305) or apparent coordinated party 

expenditures ($12,500). As indicated below, in some cases, the Audit staff did not have 

sufficient records to determine the proper classification. It is also noted that for 

approximately $330,000 of these disbursements MRP coded the disbursements on its 

database as FEA. 

Possible Federal Election Activity: MRP reported payments totaling $326,688 

as federal operating expenditures, but they appear to have been made for nonallocable FEA, which should have been reported on Scj[^jle B for Line 30(b). A 

discussion of these expenditures by category follows 

Get-Out-the-Vote (GOTV)/Public Communicate 

were made for printed materials, of which 

FEA. The remaining $95,506 was not c^ 

However, an MRP representative stai 

vendor was FEA on behalf ofthe 

copies of the printed materials suj 

public commimications in support of a ^ 

such, the Audit staff considered all these 

A.) 

Payroll Expenses: MRP iii.id*,' 

$142,941 from its federal acc^t. 

individual's times that related mfe 

^: i^^ents totaling $183,747 

oded^^^l on its database as 

RP's d^fege as FEA. 

leldwork th^^mctivity with this 

idential candi^^k^jMiddition, 

LC for GOTV a^^ty or were 

d federal cajfdidate. As 

ts FEA. (See Chart B, Page 1, 

affidavits 

with femlil elec! 

one pi^pimt that 

classifiec 

^een its 

itted indical 

^during 2001 

coded on it! 

res as FE 

res for pay^Pexpenses totaling 

itation .^tailing the percentage ofthe 

ll agjSBpgHs not available; however, 

the indiv^lals worked solely in connection 

^In addition, these individuals received at least 

)ase as FEA. As such, the Audit staff 

[RP should explain the discrepancy 

Tcords. (See Chart B, Page 1, B.) 

Docuiif^^^on IiM||cient to Determine Nature of Expense: Pa3anents 

totaling $r^^7 we^^prted by MRP as federal operating expenditures, but 

documentatiSb^as in^Rnficient to determine the nature of these expenses. Most 

(^these expe^tures were coded on MRP's database as FEA. 

Tenses: Although consulting expenses ($20,000) were coded FEA 

on ME^^^tabase, MRP has not provided any affidavit or other documentation. 

The Ai^Pstaff classified these expenditures as potential FEA since MRP coded 

these expenditures on its database as FEA. MRP should explain the discrepancy 

between its reports and its intemal records. (See Chart B, Page 1, B.) 

Travel and Per Diem Expenses: MRP made expenditures for travel ($38,192) and 

per diem ($3,050). Documentation was not available detailing the activities the 

individuals were involved with and whether these activities were related to a 

clearly identified federal candidate. The Audit staff classified these expenditures 

as potential FEA since MRP coded these expenditures as such on its database. 
11 

MRP should clarify the discrepancy between its reports and its intemal records. 

(See Chart B, Page 2, A. & B.) 

Equipment and Miscellaneous Costs: MRP made expenditures for equipment 

($36,933) and miscellaneous costs ($3,702). MRP's records detailed tiiat, for tiie 

most part, the equipment consisted of computers and phone equipment, as well as 

copier rental. Documentation detailing how the equipment was used was not 

available. Most of the miscellaneous costs were for shipping, with no indication 

of what was shipped. However, MRP coded these expenditures as FEA in its 

database. The Audit staff considered tiiese potential FE^expenses and 

recommends that MRP clarify the discrepancy betw^g^Obports and its intemal 

records. (See Chart B, Page 2, C. & D.) 

Printed Materials. Copies Not Available: M 

for printed materials. Copies.of these prii 

review by the Audit staff. Of these pa^^Ents, MRP coded 

these payments were for such purpos^as Votei^ ($11,228) 

($13,189). The remaining $43.294^iWlftimients ^are for apparentl^TV-related 

activities, although none of them were ci^^J^ST^ee Chart B, l^ge 2, E.) 

totaling $67,711 

available for 

as FEA, and 

Telemarketing Expenses.^^^^^ made expenc 

telemarketing totaling $23? 

FEA. MRP disclosed tiie p 

Voter ID ($3,117), state cam] 

Although MRP made invoices ^ai 

scripts/priji^Si^^als that woi 

expend^lres werH^ available. 

le of which 

to FLS Connect for 

de^ on MRP's database as 

se expenaiT^fas: GOTV ($6,097), 

ac1^ldh^^460)^d telemarketing ($9,355). 

e tcn^RpSit staff, copies of 

elp to d^Rmine the nature of these 

ee Chart B, Page 2, F.) 

Payment ordinatedp^rty Expenditures: MRP made payments 

ctober 30-31,2008, for a television 

lie SumflfSrs for Congress. The advertisement appears to 

on tiiat refers to a clearly identified House candidate and 

semif^^^ the candidate's jurisdiction within 90 days of the 

dida|^ppears in the advertisement and the advertisement states 

ed by the candidate. MRP reported these payments on Schedule 

ursements) as other federal operating expenditures ratiier. than on 

ized Coordinated Party Expenditures) as coordinated party 

ee Chart B, Page 3.) 

2. Interim Audit Report & Audit Division Recommendation 

At the exit conference, the Audit staff addressed this matter and provided a schedule 

identifying the transactions in question to MRP representatives. MRP representatives stated 

that they would look into these items and send documentation to tiy to resolve the proper 

classification of the transactions. MRP representatives subsequently provided materials, 

including affidavits addressing time employees spent on federal election activity, which 

resolved some of the items that the Audit staff considered in its above analysis. 
12 

The Interim Audit Report recommended that MRP demonstrate that the payments from the 

federal account were conectly reported as federal operating expenditures. Further 

information was needed for the Audit staff to verify the classification of disbursements 

totaling $192,617. MRP should have explained the discrepancies between expenditures 

coded on its database as FEA and its reportmg of those expenditures as operating 

expenditures. In addition, MRP should have obtained and provided monthly logs, 

timesheets or affidavits ($20,000), samples of printed materials ($67,711) and telemarketing 

scripts ($23,029). MRP should have amended its reports to disclose the noted 

disbursements on Schedule B or Schedule F, as necessary. 

C. Committee Response to Interim Audit Report 

In its response to the Interim Audit Report, MRP amended its idi&ff^^disclose one ofthe 

payments from its non-federal account (Part A above) identifM^by tiielS^t staff. MRP's 

response stated that they were unable to locate documenfa^n twdemonslBB^any of these 

expenditures were solely non-federal in nature, to inx^^the one pavment rMfegter id that was 

disclosed in its amended reports. With respect to p^^l l and a^ciated costs pSitoop nonfederal accounts, MRP explained that no federal ^^^^es we AM I the ballot inMSf and 

therefore the payroll and associated costs were properl^^^ynipn^ederal disbu^ments; and, 

as such, MRP did not amend its reports to disclose these^^Kctions For payments from its 

federal account (Part B above), MRP fil^gaamended reports^^^sing disbursements as FEA or 

coordinated party expenditures accordingW||||Schedules provlM[|[by tiie Audit staff. Although 

MRP has amended its reports, the nature omp^^fehursements ril^^Ss unclear because of a 

lack of documentation. As a result, the Aud^taffa^^^jy^ej^sis for determining whether 

either the audited reports or the amended rep(mfil^are 

Finding 4. Fi 

Independent Exj 

ie Notice%and Properly Disclose 

Summi 

Duringgdit fieldwork, 

prinlrol^ferials totaling 

disclosed^^kerating expei 

that these arg^jspendent ex] 

conect the discT^he of thesi 

additional amendel^borti 

udii "'••j^gi^^sd disbursements and noted expenditures for 

01, w^pPappeared to be independent expenditures that MRP 

ires, ^its response to the Interim Audit Report, MRP agrees 

ditures; however, citing software issues, it has been able to 

ayments only partially. To date, MRP has not filed any 

Legal standard 

A. Definition of Independent Expenditures. The term "independent expenditure" means an 

expenditure by a person for a communication expressly advocating the election or defeat of a 

clearly identified candidate that is not made in coordination with any candidate or authorized 

committee or agent of a candidate. 11 CFR § 100.16. 

B. Disclosure Requirements - General Guidelines. An independent expenditure shall be 

reported on Schedule E (Itemized Independent Expenditures) if, when added to other 

independent expenditures made to the same payee during the same calendar year, it exceeds 

$200. Independent expenditures made (i.e., publicly disseminated) prior to payment should be 
13 

disclosed as "memo" entries on Schedule E and as a reportable debt on Schedule D. Independent 

expenditures of $200 or less do not need to be itemized, though the committee must report the 

total of tiiose expenditures on line Qol) on Schedule E. 11 CFR §§104.3(b)(3)(vii), 104.4(a) and 

104.11. 

C. Last-Minute Independent Expenditure Reports (24-Hour Notices). Any independent 

expenditures aggregating $1,000 or more, with respect to any given election, and made afier the 

20* day but more than 24 hours before the day of an election must be reported and the report 

must be received by the Commission within 24 hours after the expenditure is made. A 24-hour 

notice is required each time additional independent expenditures 

date that a communication is publicly disseminated serves as the da| 

use to determine whether the total amount of independent expem 

reached or exceeded the threshold reporting amount of $1,00Q| 

104.5(g)(2). 

$1,000 or more. The 

committee must 

has, in the aggregate, 

[§ 104.4(f) and 

D. Last-Minute Independent Expenditure Reports^l^-Hd!kr Notices). 'Xi^^dependent 

expenditure aggregating $10,000 or more with respffiio any ^e n election, iS^fe^mg during a 

calendar year, up to and mcluding the 20th day bi^^^^electi^jiust be discloS^within 48 

hours each time the expenditures aggregate $10,000 or^^^^^Rn^tices must bomled with the 

Commission within 48 hours after the expenditure is ma^^WCFR §§ 104.4(f) and 104.5(g)(1). 

E. AUocation of Expenses Between Cai 

one clearly identified federal candidate sha!f 

benefit expected to be derived. In the case 

attribution shall be determinedby theproporti 

method shall be used to 

and one or more clearl 

^. Expenditun 

ited to each^ 

puprfg^^kor bro£ 

ojE^ace 

kde on behalf of more than 

!andidate according to the 

last communication, the 

levoted to all candidates. This 

lents invoi 

m-federal a 

ig both cl^Ty identified federal candidates 

lidates. 11 CFR §106.1(a). 

Facts and Analysi? 

A. Facts -«-»sa«. 

Duringa^mtfieldwcBIIS^ reviewed MRP's disbursements and identified a payment 

of $8^^g^for printed irS^yls repc^^jg^ an operating expenditure. Of this amount, it was 

calculatl^^^ $56,601 appBjcil to bjl^parent independent expenditures. A review of the 

printed mal^^^revealed the rc«llowing: 

The "Ab^^ e Ballo^ \pplication Self Mailer" invoice billed MRP for two mailers. Both 

mailers picr^&^^^dential candidate Senator John McCain and Vice-Presidential 

candidate Govl^ ^ Sarah Palin on a sample absentee ballot with checked boxes below 

their pictures, aovocating their election. 

In addition, one sample mailer also pictured Susan Collins, candidate for the U. S. Senate 

and Charlie Summers, candidate for the U. S. House of Representatives. The other 

sample provided a picture only of Susan Collins, but provided space for a congressional 

candidate. 

Both mailers had space provided for a state senate candidate and a state house candidate. 

Above the pictures of the candidates, both samples state "Good Jobs. A Strong Economy. 

Independence from Foreign Oil." In addition, the mailers state, "Help Team Maine 

Today by Signing Up to...Canvass a local precinct door to door." 
14 

Since the documents contain a statement of the candidates' positions on several issues and 

include the solicitation of volunteer canvassing, they go beyond the limitations ofthe slate card 

exemption^. As a result, the Audit staff concluded tiiat a portion of each mailer was an 

independent expenditure that should have been reported as such and that appropriate 24/48-hour 

notices should have been filed. The amount of independent expenditures ($56,601) was 

determined by the space allotted to federal candidates versus non-federal candidates on the 

mailers. The remaining $28,301 ($84,902 - $56,601) should have been reported as FEA. 

B. Interim Audit Report & Audit Division Recommendation 

At an exit conference, the Audit staff addressed this matter, having 

with the materials for discussion. MRP representatives stated th; 

matter, examine the materials, and address the "slate card" exi 

conference, MRP's Treasurer stated that the materials in que 

were exempt from independent expenditure rules. j^fk. 

The Interim Audit Report recommended that MRP i:ik«; the foi 

y provided MRP 

would look into this 

response to the exit 

.iij cards and, as such. 

Provide evidence that would demonstrate that independent 

expenditures and therefore did not require disclos 

Absent such a demonstration, MML^ould have ame 

disbursements of $56,601 as indep^^^penditures 

remaining $28,301 on Schedule B 

Submit and implement revised procel^es w\ rx.v\"iaBBizing afid reporting independent 

expenditures, to allowJor timely filin^^^J l>-!H^^^ng notices, as required. 

reports to disclose 

le E; and, disclosed the 

C. Committee ResDQ|gfe to Int^gn Audit Re| 

In its response to thf^^Mm AudiKeport, MRP ^i^dthat the expenditure in question was an 

"Absentee Ballot Applic^ffikSelj|»ib^^ which i^mded at least three federal and non-federal 

candidates prev^^m^^WiBijgB^^ believed this qualified for the "slate card" 

exemptioiyl^PB^R^^f th^B||aterialsrM!RP now agrees that tiie "slate card" exemption 

does no^^ly. MR?1IHhmende!B^j to disclose part of these independent expenditures. 

MRM^fejts software's^Btaitv tof^^^s the requured disclosure information for the 

remaininM^dependent exp^Bitures.^RP data staff is working on the problem. To date, MRP 

has not.file^^Htional ameiJ^ents disclosing the remaining independent expenditures. 

^ Seell C.F.R. §§ 100.80,100.140, Advisory Opinions 2008-06 (Democratic Party of Virginia), 1978-89 (Withers 

for Congress), 1978-9 (Republican State Central Committee of Iowa). 
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