REPORT OF THE AUDIT DIVISION
Perot 96 (the Committee) registered with the Federal Election Commission on August 15, 1996. The Committee was the principal campaign committee of Ross Perot, the 1996 Reform Party candidate for the office of President of the United States.
The audit was conducted pursuant to 26 U.S.C. §9007(a), requiring the Commission to audit committees authorized by candidates who receive Federal Funds. The Committee received $29,055,400 from the Presidential Election Campaign Fund.
The findings of the audit were presented to the Committee at an exit conference held on August 7, 1997 and in the Exit Conference Memorandum. The Committee responses to those findings are contained in the audit report.
The following is an overview of the findings contained in the audit report.
Apparent Excessive Contributions Resulting from Staff Advances 2 U.S.C. §441a(a)(1)(A) and 11 CFR §116.5(b). The Audit staff identified one individual who advanced funds on behalf of the Committee in excess of the $1,000 contribution limitation. This individual paid the transportation, travel, and other campaign expenses incurred by other individuals, including the Vice Presidential candidate, using a personal credit card. The highest excessive balance for this individual was $26,293. In response to the Exit Conference Memorandum, the Committee stated they were unable to locate a credit card company willing to offer credit cards and, therefore, the use of this individuals personal credit card was the only alternative. Furthermore, the Committee contended that it would have been impractical for the presidential and vice-presidential nominees to stand in hotel cashier lines to pay their bills.
Disclosure of Occupation and Name of Employer
2 U.S.C. §§434(b)(3)(A), 431(13)(A), and 432(i). The Committee did not disclose the donors occupation and employer for a material number of itemized contributions. All of the missing information was in the Committees records but had been received after the Committee filed its regularly scheduled disclosure report. During fieldwork, the Audit staff questioned why amended Schedules A-P (Itemized Receipts) disclosing this information had not been filed. In response, the Committee stated that it was instructed in 1992 by the Federal Election Commission Reports Analysis Division to hold the contributor information and file a cumulative amendment. The Committee continued this practice during the 1996 election cycle. In 1994, the Commission revised the regulation governing the filing of amendments containing the aforementioned contributor information which specified that any contributor information received after the contribution has been disclosed on a regularly scheduled report, should be disclosed on or before the due date of the next regularly scheduled report. See 11 CFR §104.7. The Committee filed amended Schedules A-P which corrected the public record.
Amount Received in Excess of Entitlement 26 U.S.C. §9007(b)(1),
11 CFR §§9007.2(a)(2), 9007.2(b)(3), and 9004.9(b). The Audit staff calculated that the Candidate received Federal funds in excess of his entitlement totaling $2,310,127. This amount resulted primarily from the exclusion of $1,447,000 in projected litigation expenses from the Committees Statement of Net Outstanding Qualified Campaign Expenses. The Committee had included $1,447,000 in expenses related to possible litigation and other legal services to challenge the debate criteria used for the 1996 Presidential debates. In its response to the Exit Conference Memorandum, the Committee contended that the aforementioned expenses were directly related to the Candidates 1996 campaign and should be viewed as qualified campaign expenses payable with Federal funds.
The Audit Report concluded that these projected litigation expenses were not incurred prior to the close of the expenditure report period nor were they valid winding down costs pursuant to 11 CFR §9004.4(a), and accordingly were not viewed as qualified campaign expenses. On December 4, 1997, the Commission made a determination that $2,310,127 in surplus funds is repayable to the United States Treasury.