Handling a questionable contribution to a nonconnected PAC

Depositing questionable contributions

If a committee receives a contribution that appears to be excessive or prohibited, the committee may have to refund it to the donor. Within 10 days, the treasurer must either return the questionable check to the donor or deposit it. Once the contribution is deposited, the treasurer must:

• Avoid spending the questionable funds by keeping enough money in the committee’s account to cover all potential refunds;
• Keep a written record explaining why the contribution may be illegal and include this explanation on its report if the contribution has to be itemized before its legality is established;
• If a check appears to come from a prohibited source, confirm its legality or return it.

Questionable source

If a committee treasurer deposits a contribution that appears to come from a prohibited source, he or she has 30 days to:

• Confirm the legality of the contribution; or
• Refund the contribution.

As evidence of legality, the treasurer should obtain a written statement from the contributor explaining why the contribution is legal. Alternatively, the treasurer may obtain an oral explanation by telephone and keep a record of the conversation.

Late discovery of prohibited contribution

If the treasurer discovers that a previously deposited contribution came from a prohibited source, he or she must refund the contribution within 30 days of making the discovery. This situation might arise, for example, if the treasurer learned that a past contribution was made by a foreign national.

If the committee does not have sufficient funds to refund the contribution to the donor when the illegality is discovered, the treasurer must use the committee’s next receipts.