After a six-month review of Brown’s bank statements and receipts, the audit concluded that he had failed to account for 221 contributions, plus other revenue, totaling $133,701. The campaign also never reported 53 expenditures totaling $169,431, according to the report.
Despite a District law barring campaigns from using cash for purchases of $50 or more, the audit found that Brown’s committee issued eight checks totaling $31,590.70 that were made out to cash. Auditors were initially unable to determine how the money was spent, but Brown’s election committee provided documentation two weeks ago that showed that the cash was spent on campaign-related purchases.
“We have determined that the reports, statements and responses filed by the Committee to Re-Elect Kwame R. Brown are not in substantial compliance with the District of Columbia Campaign Finance Reform and Conflict of Interest Act,” the report concludes.
In an interview Tuesday, Brown apologized for what he deemed “administrative errors” but stressed that there is “no missing money.”
“We always had every receipt and every check,” said Brown, who gave up his at-large seat after he was elected council chairman last year. “It was just errors in getting it in the [Office of Campaign Finance] system the right way.”
According to documentation released by Brown on Tuesday, more than than $50,000 of the previously unreported expenses went to Banner Consulting, a firm run by Charles D. Hawkins, who served as Brown’s treasurer during his 2004 campaign.
In all, Brown paid Banner Consulting $379,654. After auditors discovered that the campaign had failed to “substantiate the amounts and regularity of the payments” to Banner Consulting, the Office of Campaign Finance requested all of the firm’s bank records.
According to the report, the records revealed that Banner had been forwarding a large chunk of the money to a company called Partners in Learning for consulting services in support of Brown’s campaign. Partners in Learning, a sales-coaching firm, was owned and operated by Brown’s brother, Che Brown.
Che Brown’s firm received $239,663 through its subcontracting agreement with Banner Consulting, even though Kwame Brown never initially reported those expenditures publicly. The payments to Che Brown’s firm account for about 30 percent of the $824,000 that Kwame Brown raised for a 2008 race in which he faced minimal opposition.
“It was . . . noted that the payments and/or transfers made by the Committee to Re-Elect Kwame R. Brown to Banner Consulting were paid and/or transferred to Partners in Learning on the same dates or in close proximity,” the audit states.