Federal Election Commission auditors have concluded that the 2002 campaign of Rep. Rick Renzi (R-Ariz.) received $369,100 in “apparent corporate contributions” from two companies controlled by Renzi — a finding that the Renzi campaign vigorously disputes.

Calling the FEC’s audit report “off the mark,” Renzi’s campaign insists that the Congressman did nothing wrong and was merely utilizing his own personal funds to make loans to his campaign — a practice that is legal and appropriate.

“The FEC has accepted an audit report that incorrectly characterizes personal loans Congressman Rick Renzi made to his 2002 campaign,” the Renzi campaign said in a statement issued Friday.

Between December 2001 and June 2002, the Renzi campaign received several loans totaling $585,100 from Renzi & Co. Inc. and the Fountain Reality Development Inc., two companies that the Arizona lawmaker owns and runs, according to the 24-page FEC audit report.

After a lengthy inquiry — which included an examination of selected bank statements, canceled checks, as well as portions of the 2001 tax returns for both Renzi and the corporations — the FEC concluded that $359,100 of the total appeared to have been made “using impermissible corporate funds.”

But Renzi aides insist that the money was Renzi’s all along.

“Federal law permits candidates to use personal funds to make loans to their campaign, and that’s what happened here,” Renzi spokesman Matthew Ash said.

At the heart of the dispute between the Renzi campaign and the FEC is whether the money that came from Renzi’s two subchapter S corporations constituted prohibited corporate contributions, or whether they were in fact his own personal funds, to use as he saw fit.

A subchapter S corporation is a general corporation that has elected a special tax status with the Internal Revenue Service. They are typically used by small business owners and entrepreneurs who want to be taxed as if they were sole proprietors or partners.

In defending Renzi’s transactions to the FEC, the Renzi campaign maintained that the money Renzi transferred from his two companies to his campaign represented repayments of loans he had previously made to the corporations.

Ash said Renzi had made the “made these loans with the advice of his expert accountants,” said Ash, who provided a letter from Robert Scott, a Maryland-based Certified Public Accountant, attesting to the fact that Renzi had never received any sort of personal loans from any of his companies.

The letter states that Renzi may draw money out of so-called “S” corporations at any time once it has been reported to the IRS.

“The money loaned to the campaign came personally from Congressman Renzi,” Ash said. “It’s as simple as that.”

The FEC audit staff concluded that $216,000 in loans “likely were made with permissible funds, while loans totaling $369,090 were made using impermissible corporate funds.”

The FEC auditors supported their conclusions with a detailed flow chart and a chart analyzing the dates, amounts and permissibility of the various transfers of funds from the companies to the Renzi, and subsequently his campaign.

The audit report also suggested several other potential problems, including a misstatement of financial activity, a failure to itemize 13 contributions totaling $20,475, a failure to disclose $134,500 in transfers of joint-fundraising proceeds and inadequate disclosure of the occupations and employee information for 200 contributions totaling $132,800.

The Renzi campaign emphasized that the report “does not constitute a finding of violation” and noted that Renzi’s legal team did not have the opportunity to testify before the FEC to prove that the loans were appropriate.

The FEC audit report notes that the FEC “may initiate an enforcement action, at a later time, with respect to any of the matters discussed in this report.”