Obama '08 campaign failed to report last-minute funds

WASHINGTON Thu Apr 19, 2012 5:52pm EDT

U.S. President Barack Obama delivers remarks on job creation at Lorain County Community College in Elyria, Ohio, April 18, 2012. REUTERS/Jason Reed

U.S. President Barack Obama delivers remarks on job creation at Lorain County Community College in Elyria, Ohio, April 18, 2012.

Credit: Reuters/Jason Reed

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WASHINGTON (Reuters) - U.S. President Barack Obama's 2008 election campaign failed to properly report nearly $2 million in last-minute donations to the juggernaut that swept him into the White House, but that was the only violation found in a Federal Election Commission audit of Obama's $778 million campaign.

The audit, posted online on Thursday, shows Obama's campaign did not file notifications on time for 1,312 donations totaling $1,972,266, received before the November vote.

The law requires campaigns to submit notices to the FEC about contributions of $1,000 or more received less than 20 days but more than 48 hours before an election.

"Overall, this is a very clean audit report for the Obama campaign. The FEC spent two years picking over $750 million in contributions and expenses and found one violation," said Michael Toner, a former FEC chairman and now a lawyer at Wiley Rein in Washington.

According to the FEC tally, Obama's campaign that year raised $778 million. It did ultimately report the donations in question, most of which came through a transfer from the joint fund it shared with the Democratic National Committee, but not on time, according to the audit file.

The findings will now go to the FEC general counsel and then to FEC commissioners to determine whether, and how much, to fine Obama For America. The FEC administrative fine calculator estimates a fine of $197,336, or 10 percent of the amount improperly reported.

For now, the audit only indicates the FEC "may initiate an enforcement action, at a later time," but given the size of the violation, an enforcement is likely, said David Mason, also a former FEC chairman who now advises campaigns on FEC rule compliance at Aristotle, a campaign services firm in Washington.

Compliance lawyers said the "Obama For America" campaign group - which bridges both Obama's 2008 and 2012 election bids - would be the recipient of any fine. A fine could be paid out either from any funds leftover from the 2008 campaign or from 2012 re-election campaign funds.

"The FEC conducted a routine review of the 2008 campaign as it did with the McCain campaign and many others," said Ben LaBolt, an Obama campaign spokesman. He noted that of all of donations the FEC only "found one reporting issue involving a fraction of those contributions."

The FEC took up the audit voluntarily - such action is mandatory only for campaigns that rely on public financing. Obama became the first candidate since the advent of matching public funds in presidential campaigns to decline them for the general election, and raise money entirely himself.

Campaigns that accept public money face fund-raising rules not imposed on those that decline it

During the auditing process, the FEC had notified the Obama campaign of the apparently missing reports, asking whether it was an accidental filing error by the campaign's vendor. The campaign has not responded, the audit said.

The FEC audit of Obama's 2008 rival McCain campaign is pending, and is mandatory because of the McCain campaign's use of public funds.

(Reporting by Alina Selyukh and Alexander Cohen; editing by Todd Eastham)

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