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LNC’s FEC Financial Filings Are Strange

Readers will have noted that we have not recently posted as much on LNC finances, as revealed in their Federal Election Commission filings.  The end-of-year report is not due until the end of the month. The prior report covers the period around the general election.  The LNC has now filed an original report and two amended reports.  An amended report is a full report, but with different information in it.  The original report and the two amendments are so different from each other that  we are waiting to see if the numbers settle down, before we do a further analysis.

How different? Consider the cash on hand at the start of the reporting period. The three numbers differ by more than a quarter of a million dollars:

Original report
(b) Cash on hand at Beginning of Reporting Period $90,795

Amendment 1
(b) Cash on hand at Beginning of Reporting Period $92,295

Amendment 2
(b) Cash on hand at Beginning of Reporting Period $376,027

There is also the claimed cash on hand at the end of the reporting period, which follows a roller-coaster ride, first falling by almost $400,000, and then climbing back by $280,000.

Original
8. Cash on Hand at Close of Reporting Period $432,518

Amendment 1
8. Cash on Hand at Close of Reporting Period $36,597

Amendment 2
8. Cash on Hand at Close of Reporting Period $320,329.

With these numbers in mind, the LNC motion requiring the Chair and the Treasurer to review future FEC filings appears to make sense.

 

 

5 Comments

  1. Arthur Ketchen Arthur Ketchen January 9, 2025

    Obviously they want the FEC (and everybody else) to take this on faith. Ha Ha The apple falls not far from the tree!

  2. Robert Kraus Robert Kraus January 9, 2025

    The books of the committee must by law & bylaws be kept in accrual form. The FEC requires cash reporting. You would think cash would be simple. The overpriced CPA firm they’ve been using for 1.5 years – found via a Google search – is not a specialist in either nonprofit accounting nor federal FEC filing requirements.

    Apparently they can’t balance a check book. The FEC filing consultant they use can only go by the data the CPA firm is providing. The treasurer (a CPA themselves who has FEC Filing experience from running his own federal campaigns) should fire the CPA firm, take over or give the FEC consultant full control over the accounting.

    Provided they are properly closing each period & reconciling the cash accounts – the beginning & ending numbers should be consistent. My gut tells me they are way behind on doing proper reconciliation and the FEC consultant is simply filing whatever they can by the deadline to avoid a penalty for late filing. Then updating reports as they get more / better information.

    Obviously repeated amended filings raises red flags with the FEC & subjects the committee to fines & penalties – which they can not afford.

    • George Phillies George Phillies Post author | January 9, 2025

      Consider the possibility that one of the accountants is using GAAP accounting in which money through the door is not money through the door. By the way, I believe Bylaws say GAAP, not accrual.

      • Robert Kraus Robert Kraus January 9, 2025

        George Phillies GAAP requires Accrual. BOTH however are required by law – the government doesn’t make sense of course. The IRS requires one way of reporting books & the FEC another. My understanding – reading staff reports – is a former ops director of 18.5 years used to provide to the FEC Consultant & Treasurer a sheet that reconciled the two reporting methods to show everything is balanced. They also supplied another report that showed that cash in the bank reconciled with cash in the accounting software & with the FEC Report. Both these reconciliations were developed & required by the FEC Consultant so I read in various staff reports back in the day when the LNC had these issues previously around 2005-2006. Obviously neither staff nor the CPA firm are doing their due diligence. The treasurer should insist this gets fixed ASAP – do it himself, hire the FEC Consultant to do it – or quit.

  3. Damian Damian January 9, 2025

    These numbers make no sense but you should be able to get some rough idea. First has the Kennedy Victory Fund amended its filings? If so are any of the conflicted transactions affected? What are the LNC’s normal monthly expenses minus normal donations plus excess from the HFC? McAddled claimed in July (?) that they would make 100k a month so if that number is correct would that account for this?

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