Amid Audit, DeLay PAC Revises FEC Filings
Friday, May 20, 2005
An interim federal audit of House Majority Leader Tom DeLay's (R-Tex.) principal fundraising committee has found that the group engaged in some inappropriate accounting of receipts and expenditures, prompting it to revise all campaign reports for 2001 and 2002, according to a knowledgeable government official and public records.
The group, Americans for a Republican Majority (ARMPAC), is a giant among committees established by House and Senate lawmakers to finance their own political campaigns and the campaigns of colleagues. Several thousand individual and corporate contributors have given a total of $13.2 million to ARMPAC since 1999; the committee has in turn spent millions of dollars to help DeLay and fellow Republicans win reelection.
DeLay's aides have not detailed what ARMPAC did wrong in its filings to the Federal Election Commission or explained why the group made the revisions this week, before the commission's audit is completed. A spokesman for DeLay, Dan Allen, said yesterday that he could not comment, and Donald McGahn II -- a lawyer for the National Republican Congressional Committee who Allen said is representing ARMPAC -- did not return several telephone calls.
The New York Times first disclosed the existence of the audit in a story in yesterday's editions. Ian Stirton, a spokesman for the Federal Election Commission, declined to comment, stating that officials are barred from discussing even whether an audit is under way. The government official who confirmed the audit requested anonymity for the same reason.
But the committee's revised filings, published Wednesday by the FEC, omitted $15,523 in contributions it had previously listed and included $51,755 in expenditures that it did not previously report, according to a comparison by The Washington Post. Those amounts represent, respectively, less than 1 percent of the $1.746 million in itemized contributions that ARMPAC collected during those years and 1.5 percent of the $3.298 million in federally regulated funds that it spent on election races.
For the first time, the revised filings also listed as short-term debts some items previously listed as expenditures. One example is a postponed $5,732.90 payment in 2002 for food and drinks at a fundraiser held by DeLay at a resort in Puerto Rico owned by a contributor, Charles Hurwitz.
FEC regulations require that all such debts be reported promptly to ensure a public accounting of sums that amount to short-term gifts and loans, even if the debts are eventually paid.
The revised filings also for the first time list a debt of $121,456 from ARMPAC's regulated campaign account to a separate ARMPAC account that took in unregulated donations in those years.
Jan Baran, a Republican lawyer who specializes in campaign law, said the listing of this debt evidently means that ARMPAC improperly used unregulated campaign contributions to finance certain expenses during those years and now must pay that sum back to comply with the rules.
Unregulated contributions are typically those donated directly by corporations, unions or other wealthy donors, often in excess of the limits imposed on contributions to regulated funds. The use of unregulated contributions by federal lawmakers was prohibited by a campaign finance law enacted in late 2002, forcing ARMPAC and similar committees to disband them.
That circumstance adds a wrinkle to the issue of how ARMPAC can now redress its mistake. Essentially, its debt is to an entity that no longer exists.
Baran says he could not assess whether any of the revisions made by ARMPAC represent serious mistakes until the FEC releases a final audit report and he sees whether the errors have attracted the interest of its office of general counsel, which can bring legal action and assess financial penalties.
Melanie Sloan, executive director of Citizens for Responsibility and Ethics in Washington, said her group has "long believed that Tom DeLay and his PAC play fast and loose with reporting requirements," and the revisions substantiate this view. "FEC requirements don't distinguish between large amounts of money and small amounts," she said. "It all has to be disclosed."
Audits by the FEC of groups such as ARMPAC are rare. A commission official could point yesterday to only 11 opened in the past two years that involved political action committees, and only one in recent years that involved a senior lawmaker's committee -- a 2002 audit of the Volunteer PAC affiliated with Senate Majority Leader Bill Frist (R-Tenn.).
The FEC noted in the Frist audit that, generally, the commission orders such inquiries only "when a committee appears not to have met the threshold requirements for substantial compliance" with federal reporting requirements. It concluded that Volunteer PAC had misstated some receipts and disbursements, failed to report certain contributions it passed to others and improperly used $166,047 in unregulated funds to pay expenses.
The committee was able to resolve those problems, all identified in an interim report, by revising its reports to the FEC and repaying the unregulated funds to a separate account.