Interim Audit Report of the 

Audit Division on the Joe Walsh 

for Congress Committee, Inc. 

(January 1, 2011 - December 31, 2012) 

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 

requirements for 

substantial compliance 

with the Act.' The audit 

determines whether the 

comnuttee complied with 

the limitations, 

prohibitions and 

disclosure requirements 

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 Campaign (p. 2) 

Joe Walsh for Congress Committee, Inc. is the principal 

campaign committee for Joe Walsh, Republican candidate for the 

U. S. House of Representatives from the state of Illinois, 8th 

District, and is headquartered in Lake Zurich, Illinois. For more 

information, see the Campaign Organization Chart, p. 2. 

Financial Activity (p. 2) 

Receipts 

o Contributions from Individuals $ 1,321,815 

0 Contributions from Political 

Conunittees 662,810 

o Other Receipts 26,455 

Total Receipts $ 2,011,080 

Disbursements 

o Operating Expenditures $ 1,858,014 

o Loan Repayments^ 13.400 

o Contribution Refunds 22,650 

o Other Disbursements 114,350 

Total Disbursements $2,008y414 

Findings and Recommendations (p. 3) 

• Disclosure of Occupation/Name of Employer (Finding I) 

• Receipt of Contributions in Excess of the Limit (Finding 2) 

' 2 U.S.C. 1438(b). 

' These repayments were for loans from the previous election cycle. 
Interim Audit Report of the Audit 

Division on the Joe Walsh for 

Congress Committee, Inc. 

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

Page 

Parti. Background 

Authority for Audit 1 

Scope of Audit 1 

Part II. Overview of Campaign 

Campaign Organization 2 

Overview of Financial Activity 2 

Part III. Summaries 

Findings and Recommendations 3 

Part IV. Findings and Recommendations 

Finding 1. Disclosure of Occupation/Name of Employer 4 

Finding 2. Receipt of Contributions in Excess of the Limit 5 
Parti 

Background 

Authority for Audit 

This report is based on an audit of the Joe Walsh for Congress Conunittee, Inc. (JWFC), 

undert^en 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 the 

Commission to conduct audits and field investigations of any political committee that is 

required to file a report under 2 U.S.C. §434. Prior to conducting any audit under this 

subsection, the Commission must perform an internal review of reports filed by selected 

committees to determine if the reports filed by a particular committee meet the threshold 

requirements for substantial compliance with the Act. 2 U.S.C. §438(b). 

Scope of Audit 

Following Commission-approved procedures, the Audit staff evaluated various risk 

factors and as a result, this audit examined: 

1. the receipt of excessive contributions and loans; 

2. the receipt of contributions from prohibited sources; 

3. the disclosure of contributions received; 

4. the disclosure of individual contributors' occupation and name of employer; 

5. the consistency between reported figures and bank records; 

6. the completeness of records; and 

7. other committee operations necessary to the review. 
Part n 

Overview of Campaign 

Campaign Organization 

Important Dates 

• Date of Registration January 13.2010 

• Audit Coverage January 1,2011 - December 31,2012 

Headquarters Lake Zurich, IL 

Bank Information 

• Bank Depositories Two 

• Bank Accounts Nine (six checking and three saving) 

Treasurer 

• Treasurer When Audit Was Conducted HeleneM. Miller-Walsh 

• Treasurer During Period Covered by Audit HeleneM. Miller-Walsh 

Management Information 

• Attended PEG Campaign Finance Seminar No • 

• Who Handled Accounting and 

Recordkeeping Tasks 

Paid Staff 

Overview of Financial Activity 

(Audited Amounts) 

Cash-on-hand @ January 1,2011 $21,891 

Receipts 

o Contributions from Individuals 1,321,815 

o Contributions from Political Committees 662,810 

o Other Receipts 26,455 

Total Receipts $2,011,080 

Disbursements 

o Operating Expenditures 1,858,014 

o Loan Repayments 13,400 

0 Contribution Refunds 22,650 

o Other Disbursements 114,350 

Total Disbursements $ 2,008,414 

Cash-on-hand @ December 31,2012 $24,557 
Part III 

Summaries 

Findings and Recommendations 

Finding 1. Disclosure of Occupation/Name of Employer 

A review of all contributions from individuals requiring itemization indicated that 28S 

contributions totaling $334,146 lacked disclosure of occupation/name of employer. 

Furthermore, "best efforts" to obtain, maintain and submit information had not been 

sufficiently documented for these contributions. 

The Audit staff recommends that JWFC establish "best efforts" by amending its reports 

to disclose the missing information. 

(For more details, see p. 4.) 

Finding 2. Receipt of Contributions in Excess of the Limit 

During audit fieldwork, the Audit staff reviewed contributions from individuals to 

determine if any contributions exceeded the limit. This review indicated that JWFC 

received apparent excessive contributions from 29 individuals totaling $92,325. These 

errors occurred as a result of JWFC not resolving the excessive portions of contributions 

by forwarding a presumptive letter to the contributor or issuing a refund in a timely 

manner. The Audit staff recommends that JWFC provide documentation demonstrating 

that these contributions were not excessive or, if excessive, were resolved in a timely 

manner. Absent such documentation, JWFC should resolve the apparent excessive 

contributions either through refunds to the contributors, disgorgement to the U.S. 

Treasury or by issuance of presumptive redesignation or reattribution letters. 

(For more details, see p. 5.) 
Part IV 

Findings and Recommendations 

I Finding 1. Disclosure of Occnpation/Name of Employer | 

Summary 

A review of all contributions from individuals requiring itemization indicated that 285 

contributions totaling $334,146 lacked disclosure of occupation/name of employer. 

Furthermore, "best efforts" to obtain, maintain and submit information had not been 

sufficiently documented for these contributions. 

The Audit staff recommends that JWFC establish "best efforts" by amending its reports 

to disclose the missing information. 

Legal Standard 

A. Itemization Required for Contributions from Individuals. An authorized 

candidate conunittee must itemize any contribution from an individual if it exceeds 

$200 per election cycle, either by itself or when combined with other contributions 

from the same contributor. 2 U.S.C. §434(b)(3)(A). 

B. Required Information for Contributions from Individuais. For each itemized 

contribution from an individual, the committee must provide the following 

information: 

• the contributor's full name and address (including zip code); 

• the contributor's occupation and the name of his or her employer; 

• the date of receipt (the date the conunittee received the contribution); 

• the amount of the .contribution; and 

• the calendar year-to-date total of all contributions from the same individual. 

2 U.S.C. § 434(b)(3)(A) and 11 CFR §§ 100.12 and 104.3(a)(4)(i). 

C. Best Eflbrts Ensure Compliance. When the treasurer of a political committee 

shows that the committee used best efforts (see below) to obtain, maintain, and 

submit the information required by the Act, the committee's reports and records 

will be considered in compliance with the Act. 2 U.S.C. § 432(i) and 11 CFR 

§ 104.7(a). 

D. Definition of Best Efforts. The treasurer and the conunittee will be considered to 

have used "best efforts" if the committee satisfied all of the following criteria. 

• All written solicitations for contributions included: 

o a clear request for the contributor's full name, mailing address, occupation, 

and name of employer; and 

o the statement that such reporting is required by Federal law. 
• Within 30 days of receipt of the contribution, the treasurer made at least one 

effort to obtain the missing information, in either a written request or a 

documented oral request. 

• The treasurer reported any contributor information that, although not initially 

provided by the contributor, was obtained in a follow-up communication or was 

contained in the committee's records or in prior reports that the committee filed 

during the same two-year election cycle. 11 CFR § 104.7(b). 

Facts and Aaal3rsis 

A. Facts 

A pre-audit review of all itemized contributions from individuals indicated that 28S 

contributions totaling $334,146, or 29 percent of the dollar value of individual 

contributions required to be itemized by JWFC, lacked disclosure of occupation/name of 

employer. Most of the contributor entries with missing information were either disclosed 

with the notation "Info Requested" or left blank on the Schedules A (Itemized Receipts) 

filed with the Commission. 

During audit fieldwork, the Audit staff reviewed the receipt documents provided by 

JWFC to determine if JWFC had utilized "best efforts" to obtain, maintain and submit the 

missing information. JWFC explained that the list of contributors to whom the follow-up 

letters requesting the occupation/name of employer information were sent, was 

maintain^ electronically. That list was inadvertently destroyed when one of JWFC's 

computers "crashed." However, JWFC maintained a physical file for letters it received 

from the contributors who responded to its request for occupation/name of employer 

information. The Audit staff reviewed the available follow-up letters and determined that 

JWFC maintained records for 88 individuals who made, in aggregate, 106 contributions 

totaling $111,860. Nevertheless, JWFC did not submit that information, as required, in 

amended disclosure reports and therefore did not establish "best efforts". 

B. Interim Audit Report & Audit Division Recommendation 

At the exit conference, the Audit staff discussed this matter with the JWFC representative 

and presented a list of 88 individuals for whom the occupation/name of employer 

information was available but not disclosed. The JWFC representative agreed to amend 

the reports to materially disclose the missing information. 

The Audit staff recommends that, within 30 calendar days of service of this report, JWFC 

establish "best efforts" by amending its reports to disclose the missing information 

relating to the 106 contributions. 

I Finding 2. Receipt of Contributions in Excess of the Limit 

Summary 

During audit fieldwork, the Audit staff reviewed contributions from individuals to 

determine if any contributions exceeded the limit. This review indicated that JWFC 

received apparent excessive contributions from 29 individuals totaling $92,325. These 
errors occurred as a result of-JWFC not resolving the excessive portions of contributions 

by forwarding a presumptive letter to the contributor or issuing a refund in a timely 

manner. The Audit staff recommends that JWFC provide documentation demonstrating 

that these contributions were not excessive or, if excessive, were resolved in a timely 

manner. Absent such documentation, JWFC should resolve the apparent excessive 

contributions either through refunds to the contributors, disgorgement to the U.S. 

Treasury or by issuance of presumptive redesignation or reattribution letters. 

Legal Standard 

A. Authorized Committee Limits. For the 2012 election, an authorized committee may 

not receive more than a total of $2,5.00 per election firom any one person or $5,000 

per election from a multicandidate political committee. 2 U.S.C. §441a(a)(l)(A), 

(2)(A) and (f); 11 CFR §§ 110.1(a) and (b) and 110.9(a). 

B. Handling Contributions That Appear Excessive. If a conunittee receives a 

contribution that appears to be excessive, the committee must either: 

• Return the questionable check to the donor; or 

• Deposit the check into its federal account and: 

" Keep enough money in the account to cover all potential refunds; 

• Keep a written record explaining why the contribution may be illegal; 

" Include this explanation on Schedule A if the contribution has to be 

itemized before its legality is established; 

• Seek a reattribution or a redesignation of the excessive portion, following 

the instructions provided in the Commission regulations (see below for 

explanations of reattribution and redesignation); and 

• If the committee does not receive a proper reattribution or redesignation 

within 60 days after receiving the excessive contribution, refund the 

excessive portion to the donor. 11 CFR §§103.3(b)(3), (4) and (5) and 

110.1(k)(3)(ii)(B). 

C. Joint Contributions. Any contribution made by more than one person (except for a 

contribution made by a parmership must include the signature of each contributor on 

the check, money oider, or other negotiable instrument or in a separate writing. A 

joint contribution is attributed equally to each donor unless a statement indicates that 

the fimds should be divided differently. 11 CFR § 110.l(k)(l) and (2). 

D. Reattribution of Excessive Contributions. The Commission regulations permit 

conunittees to ask donors of excessive contributions (or contributions that exceed the 

conunittee's net debts outstanding) whether they had intended their contribution to be 

a joint contribution from more than one person and whether they would like to 

reattribute the excess amount to the other contributor. The committee must inform 

the contributor that: 

• The reattribution must be signed by both contributors; 

• The reattribution must be received by the committee within 60 days after the 

committee received the original contribution; and 
• The contributor may instead request a refund of the excessive amount. 11 CFR 

§110.1(k)(3). 

Within 60 days after receiving the excessive contribution, the committee must either 

receive the proper reattribution or refund the excessive portion to the donor. 11 CFR 

§§103.3(b)(3) and 110.1(k)(3)(ii)(B). Further, a political committee must retain 

written records concerning the reattribution in order for it to be effective. 11 CFR 

§110.1(1X5). 

Notwithstanding the above, any excessive contribution that was made on a written 

instmment that is imprinted with the names of more than one individual may be 

attributed among the individuals listed unless instructed otherwise by the 

contributor(s). The committee must inform each contributor: 

• How the contribution was attributed; and 

• The contributor may instead request a refund of the excessive amount. 11 CFR 

§110.1(k)(3)(B). 

E. Redesignation of Excessive Contributions. When an authorized candidate 

committee receives an excessive contribution (or a contribution that exceeds the 

committee's net debts outstanding), the committee may ask the contributor to 

redesignate the excess portion of the contribution for use in another election. The 

committee must inform the contributor that: 

• The redesignation must be signed by the contributor; 

• The redesignation must be received by the committee within 60 days after the 

committee received the original contribution; and 

• The contributor may instead request a refund of the excessive amount. 11 CFR 

§110.1(b)(5). 

Within 60 days after receiving the excessive contribution, the committee must either 

receive the proper redesignation or refund the excessive portion to the donor. 11 CFR 

§§103.3(b)(3) and 110.1(b)(5)(ii)(A). Further, a political committee must retain 

written records concerning the redesignation in order for it to be effective. 11 CFR 

§110.1(0(5). 

When an individual makes an excessive contribution to a candidate's authorized 

committee, the campaign may presumptively redesignate the excessive portion to the 

general election if the contribution: 

• Is made before that candidate's primary election; 

• Is not designated in writing for a particular election; 

• Would be excessive if treated as a primary election contribution; and 

• As redesignated, does not cause the contributor to exceed any other contribution 

limit. 11 CFR§110.1(b)(5)(ii)(B)(l)-(4). 

The committee is required to notify the contributor of the redesignation within 60 

days of the treasurer's receipt of the contribution, and must offer the contributor the 

option to receive a refimd instead. 
Facts and Analysis 

A. Facts 

During audit fiddwork, the Audit staff identified 29 individuals with apparent excessive 

contributions totaling $92,325. 

JWFC resolved $11,000 of the excessive contributions by sending presumptive 

reattributions and/or redesignations letters that were untimely. An additional excessive 

total of $60,125 could still be resolved, albeit untimdy, via presumptive reattribution or 

redesignation letters being sent to the contributors. The rexnaining excessive 

contributions totaling $21,200 appear resolvable only by refund to the contributors or 

disgorgement to the U.S. Treasury. 

B. Interim Audit Report & Audit Division Recommendation 

The Audit staff informed JWFC representative of this matter at the exit conference. The 

Audit staff provided schedules of the apparent excessive contributions along with the 

requested response necessary to resolve them. The representative stated that she plans to 

review all excessive contributions and obtain the necessary documents. She also 

mentioned that she will contact the committee employees to inquire about the records and 

reasons the excessive contributions occurred. 

Subsequent to the exit conference, JWFC informed the Audit staff that, upon the receipt 

of the Interim Audit Report, the excessive contributions resolvable only by refund to the 

contributors ($21,200) will be disclosed on JWFC's Schedule D (Debts and Obligations) 

since JWFC has no funds available to make such refunds. In addition, JWFC provided a 

list of contributors along with their addresses to whom presumptive redistribution or 

redesignation letters were going to be sent. 

The Audit staff recommends that, within 30 calendar days of service of this report, 

JWFC: 

• Provide evidence demonstrating that the contributions totaling $92,325 were not 

excessive or were timely resolved. This evidence should include documentation 

that was not made available to the Audit staff during the audit including copies of 

solicitation cards completed by the contributors at the time of their contribution 

and that clearly inform the contributors of the limitations; timely notifications sent 

to contributors eligible for presumptive redesignation and/or reattribution; or, 

timely refunds (copies of the front and back of negotiated refund checks), 

redesignations, or reattributions for excessive contributions. 

• Absent such evidence, JWFC should send notices to those contributors that are 

eligible for presumptive redesignation and/or reattribution ($60,125) and inform 

them how their contributions were designated and/or attributed. JWFC should 

ofrer the contributors the option of receiving a refund of the excessive amount. 

Absent the contributor's request for a refund, these notices obviate the need to 

refund the contributions or disgorgement to the U.S. Treasury. 

• Refund the excessive contributions that are not eligible for presumptive 

reattribution or redesignation to the contributors or pay the amount to the U.S. 
Treasury ($21,200). If refimds are made, JWFC must provide evidence of such 

refunds (for example, copies of the front and back of negotiated refund checks). 

If funds are not available to make the necessary refunds, disclose the 

contributions requiring refunds on Schedule D until fimds become available to 

make such refunds. 

Any disgorgements made by JWFC are appropriate in instances when JWFC is either unable to contact 

the contributor to refund the excessive contributions, or when the contributor has foiled to cash JWFC's 

check in a timely nuinner.