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For Immediate Release
April 28, 2005
Contact:
Kelly Huff
Bob Biersack
Ian Stirton
George Smaragdis

REPUBLICAN PARTY OF ARKANSAS TO PAY $360,000 CIVIL PENALTY

WASHINGTON -- The Federal Election Commission (FEC) today announced a conciliation agreement with the Republican Party of Arkansas in which the party agreed to pay a civil penalty of $360,000 and to submit to annual independent financial audits at the committees’ expense in each of the next five years.  Reports on those audits, must be certified by a CPA and be submitted to the FEC each year.

            This agreement stems from FEC findings of multiple violations of the Federal Election Campaign Act (FECA) during the 1999-2000 election cycle including acceptance of excessive and prohibited contributions, failure to maintain required records and submit required disclosure information to the FEC, and improper allocation of activity between funds permissible under federal law and those to be used for state or local purposes only.  The case was initiated following an FEC audit.

            The FEC found that the party had failed to properly account for more than $2 million in media and other expenses during the 2000 campaign which resulted in excessive use of nonfederal or “soft money” for those expenses.  The party also failed to disclose specific information about a significant proportion of its contributions and spending during the 2000 election cycle.  It also failed to properly report more than $600,000 in transfers received from Republican national party committees.  The committee also received $28,500 during the period in excessive contributions from individuals and $11,500 in contributions that were from sources prohibited under the FECA.

            The committee has amended its disclosure reports and refunded excessive and prohibited contributions.  They have also hired a certified public accountant and implemented new written financial policies and procedures.  Full payment of the $360,000 civil penalty must be completed within six months.  

1. MUR 5428  
     
  RESPONDENTS:

(a)  Republican Party of Arkansas, Charles Mazander, treasurer

(b) Potlatch Corporation

(c) Lloyd E. Lindsey, former treasurer of Republican Party of Arkansas
  COMPLAINANT:

FEC Initiated (Audit)

  SUBJECT: Excessive contributions; corporate contributions; misstatement of financial activity; failure to maintain records; failure to report and accurately itemize contributions, transfers and disbursements; use of impermissible funds from non-federal accounts to pay for federal expenses; failure to pay federal and allocable expenses from a federal account; failure to allocate certain expenses; failure to report or correctly report federal and allocable expenses; failure to itemize outstanding debts and obligations; failure to file amended Statement of Organization to disclose bank depositories
  DISPOSITION:

(a)   Conciliation Agreement: $360,000 civil penalty*

(b)   Conciliation Agreement: $2,500 civil penalty*

       [re: corporate contributions]

       Respondent will disgorge to the U.S Treasury $5,000, an equal amount to the refunded corporate contribution.

(c)   Reason to believe, but took no further action*

            [re: excessive contributions; corporate contributions;   misstatement of financial activity; failure to report and accurately itemize contributions, transfers and disbursements; use of impermissible funds from non-federal accounts to pay for federal expenses; failure to pay federal and allocable expenses from a federal account; failure to allocate certain expenses; failure to report or correctly report federal and allocable expenses; failure to itemize outstanding debts and obligations]
  DOCUMENTS ON PUBLIC RECORD: Documents from this matter are available from the Commission's web site at http://www.fec.gov by entering 5428 under case number in the Enforcement Query System. They are also available in the FECs Public Records Office at 999 E St. NW in Washington.

*There are four administrative stages to the FEC enforcement process:

1. Receipt of proper complaint 3. "Probable cause" stage
2. "Reason to believe" stage 4. Conciliation stage

It requires the votes of at least four of the six Commissioners to take any action. The FEC can close a case at any point after reviewing a complaint. If a violation is found and conciliation cannot be reached, then the FEC can institute a civil court action against a respondent.

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