report of the audit division

on

1996 committee on arrangements

for the republican national convention

 

EXECUTIVE SUMMARY

 

1996 Committee on Arrangements for the Republican National Convention (the Committee) registered with the Federal Election Commission on May 5, 1994, as a National Convention Committee of the Republican Party.

 

The audit was conducted pursuant to 26 U.S.C 9008(g) which directs the Commission to conduct an examination and audit of the payments for presidential nominating conventions no later than December 31 of the calendar year in which the presidential nominating convention is held. The Committee received $12,364,000 in federal funds under 26 U.S.C. 9008(b).

 

The findings of the audit were presented to the Committees at an exit conference held on June 25, 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.

 

In-Kind Contributions From the Host Committee and The City of San Diego— 11 CFR 9008.7(a)(4)(ix), 11 CFR 9008.52(c)(1), and 11 CFR 9008.12(b)(3). The staff the San Diego Host Committee/Sail to Victory ’96 (Host Committee) made in-kind contributions to the Committee in the amount of $2,128,122. The transactions involved three vendors: Weldon Williams and Lick for convention badges and tickets; AT &T for an electronic voting system; and, David Nash, Inc for the production of the live event and the related television coverage. The Commission determined that amounts paid to Weldon, Williams and Lick, and AT&T were permissible Host Committee expenditures. In addition, amounts totaling $1,096,979 paid to David Nash, Inc. were determined to be permissible Host Committee expenditures, while amounts totaling $892,489 were impermissible. This amount is to be repaid to the U.S. Treasury and should be itemized as an in-kind contribution on an amended disclosure report.

 

In-kind Contributions from the Republican National Committee (RNC)— 11 CFR 9008.12(b)(3). The staff concluded that the payments to National Media, Inc. for air time on the USA Network from Monday, August 12, 1996 through Thursday, August 15, 1996, represented an in-kind contribution from the RNC of $90,000. In addition, the payments to Creative Broadcast Techniques, Inc. by the RNC totaling $1,177,910 were questioned. The Commission decided that the broadcast costs on the USA Network and $424,470 paid to Creative Broadcast Techniques, Inc., representing a portion of the cost of providing a basic television feed, were permissible RNC expenses. However, $729,994 representing an allocable portion of the production costs of programs aired by the Committee were not permissibly paid by the RNC, but were an in-kind contribution from the RNC to the Committee. The Commission determined the $729,994 was repayable to the U.S Treasury and should be itemized as an in-kind contribution on an amended disclosure report.

 

 

In-Kind Contribution-Promotional Considerations

Mitsubishi Consumer Electronics America, Inc. (MECA) — 11 CFR 9008.9 (b)(1) and (4). The staff initially questioned whether $35,192 of lost equipment was properly included as part of MECA’s cost of providing equipment and services in exchange for promotional considerations. The Committee submitted an affidavit from the President of MCEA stating that he expected some damage, loss, or theft of equipment either at a political or non-political event. The staff recommended no further action on this matter and the Commission concurred.

 

Determination of Net Outstanding Convention Expenses and Amounts Subject to the Spending Limitation — 11 CFR 9008.8(a)(1) and 9008.12(c) of the Title 11 of the Code of Federal Regulation. The Net Outstanding Convention Expenses amount of ($1,772,643) represents convention expenses incurred in excess of the spending limitation. The majority of this amount consists of the previously mentioned in-kind contributions, while the remaining $150,160, is convention expenses and estimated winding down costs incurred in excess of the limitation. The Commission determined that $150,160 is repayable to the United States Treasury.