The District’s Office of Campaign Finance is weighing penalties against the D.C. Democratic State Committee for its failure to file financial reports related to its trip to the 2008 convention in Denver, among other potentially costly violations.
The Democrats’ committee faces thousands of dollars in fines, perhaps enough to bankrupt the organization, several members said. Each alleged violation, investigators said in a final audit issued this week, will be referred to the OCF general counsel “for any action deemed appropriate.”
The committee drastically understated its accounts, failed to file its required Jan. 31, 2008, financial statement, and did not report any receipts or expenditures related to the August 2008 Denver convention, auditors say.
Political action committees that fail to file reports are subject to a $50 per day penalty, up to $2,000 per violation.
The DCDSC has argued that “D.C. Denver Convention 2008” was a separate and distinct organization free from reporting requirements because it was not organized to support a D.C. politician or political campaign. Not so, auditors said.
“Overall, the audit findings are devoid of any substantial documentation upon which to conclude that the D.C. Denver Convention 2008 intended or attempted to operate independently of the DCDSC,” OCF concluded. “In fact, the activity was integrated to the extent that the D.C. Denver Convention 2008 is indistinguishable as a separate entity and bares absolutely no independent identity.”
Seventeen Denver contribution checks were earmarked to the DCDSC, for example, and the Denver convention bank account was established in the name of the state committee.
Between January 2007 and January 2009, auditors found, the DCDSC understated receipts by $163,968 and disbursements by $93,964. The committee also accepted seven Denver-related contributions in excess of the $5,000 statutory maximum — each of which is subject to a $2,000 penalty, plus a refund of the portion of any gift in excess of $5,000.
Those contributions included a $10,000 gift from Comcast solicited by D.C. Council Chairman Vincent Gray on council letterhead. Gray has since acknowledged that “he probably should not have” used council stationery.
Anita Bonds, DCDSC chairwoman, did not return calls for comment. At the Dec. 3 committee meeting, members voted to accept most OCF audit findings but to challenge those involving the Denver reporting requirements.
Philip Pannell, the Democratic committee member who filed the original complaint, said Thursday the problems “start at the top.” That there were checks written and never reported, he said, “was just reprehensible.”
“I don’t think this was just people being sloppy,” Pannell said. “I think this was intentional and deliberate.”
Errors in bookkeeping
» Understated receipts: $163,968.79
» Understated disbursements: $93,964.23
» Understated ending cash balance: $13,919.64
