the recount fund

[Doug Henwood]

>Public Citizen issued the following press release and letter, Aug. 1
>
>Thousands of Errors and Omissions Plague Bush-Cheney
>Recount Fund Disclosure Forms
>
>Recount Fund May Face $850,000 in Fines
>
>WASHINGTON, D.C. - The Bush-Cheney recount fund, which evaded soft 
>money disclosure laws for 18 months, filed disclosure reports with 
>the Internal Revenue Service (IRS) containing thousands of errors 
>and omissions and could be fined $850,000, Public Citizen has 
>determined.
>
>The Bush-Cheney 2000, Inc-Recount Fund, a 527 political group 
>created after the November 2000 election, filed disclosure reports 
>with the IRS on July 15, 2002. The reports were submitted at 3:25 
>p.m. on the last day of an IRS amnesty program that allowed 
>out-of-compliance groups to turn in reports and avoid millions of 
>dollars in potential fines.
>
>But the Bush-Cheney recount fund disclosure reports are incomplete, 
>and the group could be subject to IRS fines in the thousands of 
>cases where it did not disclose the employer and occupation of 
>individual contributors and recipients of expenditures. Also, the 
>recount fund apparently did not disclose to the IRS more than 600 
>donors that it listed on the Bush campaign's Web site. In a letter 
>to IRS Commissioner Charles O. Rossotti, Public Citizen urged the 
>IRS to "use the Bush-Cheney recount fund as an example to send a 
>strong signal to other 527 groups that violations of the law will 
>not be tolerated." The letter, which was sent today, is available at 
>http://www.citizen.org/congress/campaign/legislation/section527/articles.cfm?ID=8116.
>
>  "It is unacceptable for the Bush-Cheney recount fund to dodge 
>disclosure for 18 months and then arrogantly suggest, as did the 
>fund's lawyer when speaking recently to reporters, that the law does 
>not apply to them," said Joan Claybrook, president of Public 
>Citizen. "They must take responsibility for the tardy filings and 
>they owe the public an apology, not lame excuses."
>
>Findings from Public Citizen's examination of the disclosure reports include:
>
>§ The Bush-Cheney recount fund did not list the employer and 
>occupation for 2,456 contributors who gave more than $200, as 
>required by law. This information is critical to understanding which 
>special interests were attempting to influence the election process 
>and curry favor with Bush. These omissions totaled $2 million; the 
>IRS can fine the fund 35 percent of these disclosure failures. 
>Potential IRS fines for these omissions total $711,000.
>
>§ The fund's disclosure reports filed with the IRS show 6,806 
>contributors who gave more than $200. But a database of contributors 
>provided on the Bush-Cheney campaign Web site lists 7,421 
>contributors who gave more than $200. If the Web site is accurate, 
>this leaves a disparity of 615 contributors that the fund apparently 
>did not report to the IRS. The IRS can assess fines of 35 percent 
>for these undisclosed contributors; this fine could reach $43,000 if 
>each contributor gave the $200 minimum.
>
>§ The Bush-Cheney recount fund did not list the employer and 
>occupation for individual recipients of 143 expenditures greater 
>than $500 and totaling $272,050 - as required by the IRS. The IRS 
>can levy fines of 35 percent on these disclosure omissions, which 
>could total $95,000.
>
>§ The Bush-Cheney recount fund failed to file five disclosure 
>reports during the 18-month period. Ultimately, the fund reported 
>$10.2 million in contributions and $13.8 million in expenditures. 
>Fines for 527 groups that do not comply with the disclosure law can 
>total 35 percent of a group's total contributions and expenditures. 
>Based on that percentage, fines of $8.47 million could have been 
>assessed against the group had it not filed with the IRS on the last 
>day of the amnesty program.
>
>§ The public can see how the recount fund spent $13.8 million in the 
>battle over Florida's 25 electoral votes 
>(http://eforms.irs.gov/pac_list.asp?irs_pac_key=742966394 ). These 
>expenditures include money to Enron ($28,281), Halliburton ($2,407) 
>and Reliant Energy ($1,724) for use of their private jets. All three 
>companies are under investigation by the Securities and Exchange 
>Commission for cooking their books.
>
>The fund continues to brazenly dismiss the disclosure rules. 
>Benjamin Ginsberg, a lawyer for the fund, told The Washington Post 
>on July 27, 2002, "We don't think we have an obligation to file 
>this. We still think we are exempt, but the truth is: Why not take 
>the issue off the table."
>
>In fact, the 527 group disclosure rules are clear: The Bush-Cheney 
>recount fund was required to file disclosure reports with the IRS. 
>The law clearly states that a 527 political organization must file 
>if it was created "primarily for the purpose of directly or 
>indirectly accepting contributions or making expenditures . . . to 
>influence the selection, nomination, election, or appointment of any 
>individual to any Federal, State, or local public office . . . or 
>the election of Presidential or Vice-Presidential electors" [26 
>U.S.C. 527(e)(1) & (2)].
>
>Despite more than a thousand disclosure errors, it is possible the 
>IRS will not penalize the Bush-Cheney recount fund for the 
>compliance failures. The IRS has yet to create a compliance program 
>for 527 groups and may not be equipped to investigate or fine any 
>527s, including those affiliated with a presidential campaign.
>
>"The Bush-Cheney campaign had 18 months to comply with the law, and 
>the IRS has had two years to create a compliance program," said 
>Frank Clemente, director of Public Citizen's Congress Watch. 
>"Neither has met its obligation to the law and the public."