July 26, 2002

Bush-Cheney Campaign Violated Soft Money Disclosure Law

Soft Money Fund for Recount Narrowly Escapes $7 Million Fine by Filing Disclosure Statements Hours Before Deadline; Forms Still Not Publicly Available

WASHINGTON, D.C. ? The recount fund created by the Bush-Cheney 2000 presidential campaign evaded a soft money campaign finance disclosure law for 18 months and did not file required forms until the last day of an Internal Revenue Service (IRS) "amnesty" program for out-of-compliance groups, Public Citizen has discovered.

The Bush-Cheney 2000, Inc-Recount Fund, a 527 political group created shortly after the November 2000 election to pay for the legal and political activities in Florida and other contested areas, apparently did not file at least four ? and perhaps as many as six ? required disclosure forms until 3:25 p.m. on July 15, 2002 ? meeting the deadline to avoid millions of dollars in potential fines by less than nine hours.

"On its contribution form, the Bush-Cheney recount fund promised full disclosure, but trustees have evaded the soft money law for 18 months and just narrowly escaped nearly $7 million in fines," said Joan Claybrook, president of Public Citizen. "The 527 disclosure law was designed to shed light on this type of ?stealth PAC? but the recount fund trustees flouted that law and didn?t begin to comply until the last possible moment."

Republican National Committee (RNC) official Jim Dyke confirmed to Public Citizen that the recount fund is a 527 group that first filed its statement of organization and contribution and expenditure reports with the IRS just before the amnesty program ended. However, the information has not yet appeared on the IRS Web site, and the IRS has not confirmed to Public Citizen that that the Bush-Cheney recount fund?s contribution and expenditure forms have been filed. IRS spokesman Tim Harms told Public Citizen that if the group submitted its forms by July 15, as the recount fund claims, it would be "in compliance" and would not be subject to fines.

Public Citizen?s investigation found that:

  • The recount fund was required by law to submit a statement of organization to the IRS within 24 hours of the group?s formation (believed to be Nov. 10, 2000) and file at least four ? and perhaps as many as six ? periodic reports detailing contributors and expenditures under a "527 group disclosure" law passed in July 2000 (PL 106-230). The recount fund?s statement of organization was filed on July 15, 2002   18 months late. The RNC official said contributions and expenditures forms were also filed around this time.
  • The IRS announced a 527 group amnesty and compliance program on May 2, 2002, and said that failure to file by July 15 could result in "the assessment of taxes, penalties and interest." The financial penalties 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 $6.92 million could have been levied against the recount fund had it not submitted its reports in time.
  • While the recount fund did voluntarily make a list of contributors to the recount fund available online, the information is incomplete and possibly misleading. Recount fund trustees failed to provide information that is required from 527 groups such as expenditures, the employer and occupation of contributors who gave more than $200, the full address of contributors, summary data on total contributions and expenditures, and the fund?s address, connected committees and directors.

Public Citizen has been stymied in its attempts to obtain the contribution and expenditure disclosure reports. The law requires that disclosure forms be made available for public inspection during normal business hours, but the fund has not complied with Public Citizen?s request to review the documents.

"For several days, the Bush-Cheney campaign and administration figures have stonewalled our requests to review the disclosure forms they claim to have filed," said Frank Clemente, director of Public Citizen?s Congress Watch. "This is unacceptable. From Harken Energy and the attempt to hide Reagan-Bush presidential records to the Cheney energy policy consultations and the Bush-Cheney recount fund, there appears to be a pattern of failing to disclose what the law requires."

Click here to view a?copy of Public Citizen?s findings.

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