MUR 5675: Improper financial reporting

On July 20, 2006, the Commission announced that Americans for a Republican Majority (ARMPAC) agreed to pay a $115,000 civil penalty for misstating its financial activity, failing to report debts and obligations, and improperly allocating expenses between federal and nonfederal accounts. ARMPAC has also agreed to repay a debt owed to its nonfederal account.

Background

The Act requires all committees to file accurate reports of all receipts, disbursements, debts and obligations. An FEC audit report covering ARMPAC’s activity between January 1, 2001 and December 31, 2002 showed that ARMPAC failed to disclose $322,306 in debts owed to 25 vendors. Additionally, ARMPAC inaccurately reported $74,295 of financial activity in 2001 and $166,340 in 2002. Furthermore, the Act requires committees with separate accounts for federal and nonfederal activities allocate expenses for shared activities between the accounts to ensure that the federal account pays its share of the costs associated with that activity. While ARMPAC had two accounts, it did not allocate expenses between the accounts properly. ARMPAC’s nonfederal account paid $203,483 of allocable expenses for administrative costs, generic get-out-the-vote drives and fundraising events that should have been paid from its federal account.

Conciliation agreement

ARMPAC admitted all violations and agreed to transfer any receipts of $5,000 or more to its nonfederal account. The Committee also agreed to not make any expenditures in excess of $5,000 until the debt to its nonfederal account has been paid in full.