Federal Election Commission auditors have alleged that President Carter's 1976 general election campaign failed to disclose a $134,000 debt to the Gerald Rafshoon Advertising Agency, which handled the Carter media effort.
It is unclear what action the commission might take in connection with the auditor's findings, though the matter has apparently been referred to the office of the FEC general counsel.
The Carter committee, acording to FEC documents, disputed the auditorhs contention that the $134,000 actually constituted a debt.
If it was a debt, the committee could be accused of violating the law requiring public reporting of all campaign debts. In addition, such a finding would raise questions about whether the committee accepted a private contribution - in the form of a Rafshoon loan - in violation of the law that governed the federally financed general election campaign.
The Rafshoon funds were not mentioned in an adult report on the Carter campaign released yesterday by the FEC, 2 1/2 years after the election.
That public report called on the campaign to repay $50,202 to the U.S. Treasury because of other, unrelated campaign reporting violations, including spending about $15,000 in "get out the Vote" (walk-around) money dispensed by the campaign on election day.
A footnote to the audit report stated, however, that "certain issues relating to the committee's reporting of debts and oblications' had been deleted because the general counsel was looking into them, a process which requires secrecy under FEC law.
The Rafshoon matter - to which the footnote evidently referred - appeared to have been inadvertenly included among 5,000 pages of work papers accompanying that audit report.
In the work papers, the auditors gave the exact amount of the debt as $134,482.85. They reported that it had not been disclosed "on any report filed" under federal election law. The auditors recommended that the FEC order the committee to amend its campaign finance reports to reflect the debt "until that amount is extinguished." No one would comment yesterday on what became of that recommendation by the auditors.
Two years after the election, according to work papers, the committee sid amend its reports. Having apparently "extinguished" most of the Rafshoon debt, it reported only $16,115 stilll owen to the Rafshoon agency.
The auditors stated that the Carter campaign disputed their determination that the $134,000 was a debt. The Carter committee based this contention on the claim that Rafshoon would eventually be repaid the $134,000 not by the committee buy by television stations and other media outlets as they refunded to the agency overpayments made by the Rafshoon agency for advertising during the campaign.
Such overpayments commonly occur when a station cannot provide all the advertising time paid for by and ad agency and must refund money.
The auditors were further concerned because, they said, the campaign committee told them it would allow the Rafshoon agency to keep all such credits from media outlets, even such credits from India outlets, even beyond that $134,000. The auditors suggested that this extra money should go back to the U.S. Treasurer, from which the Carter Campaign drew $21 million for its campaign.
One document included among the FEC work papers tended to question the committee's explanation for the debt. At internal, undated campaign memo stated that the campaign intended to "write off the unpaid balance" owed Rafshoon.
Rafshoon - now Carter's White House media adviser - was reported out of his country yesterday. Howard Rothchild, who recently purchased the Rafshoon Advertising Agency, said he was unfamiliar with the campaign operation. He said, however, that it was not uncommon for the agency to extend credit - either by forestalling its demand for a commission or by getting credit from its own suppliers - and then outlets refunded overpayments directly to the agency.
The Rafshoon agency is currently the subject of a Justice Department inquiry because of the $645,000 in credit it extended to Jimmy Carter's primary campaign. However, the primary campaign committee reported that credit as debts to Rafshoon.
The $50,000 repayment requested by the FEC sought $27,000 of the amount because Carter's Democratic Presidential Campaign Committee, Inc., earned that much interest on telephone deposits made with federal funds. Gerald Ford's campaign paid a $33,000 refund for similar $8000 was sought because of miscellaneous expenditures for which the FEC found insufficient documentation.
The balance stemmed from the Carter committee's inability to document how it spent thousands of dollars dispensed on or aground election day to numeros local politicians and precinct officials for "Get Out The Vote" efforts, commonly known as "walk-around money."
The auditors originally sought $82,000 in repayments for this. But the three commission Democrats blocked a demand for the higher amount. Federal election commissioners are appointed along party lines.