CBC’s Political Action Committee Amends Reports, Pays Fine

Posted June 23, 2011 at 5:33pm

Having been cited for irregular record keeping by the Federal Election Commission, the political action committee run by the Congressional Black Caucus has paid a $5,000 fine and recently filed close to two dozen amended campaign finance reports in a bid to clear up its books.

The CBC PAC, which raised and spent about $750,000 in the 2010 election cycle, on Tuesday filed 22 amended reports dating as far back as early 2006. The filing was the conclusion of a yearlong internal audit by the election compliance consulting firm Evans & Katz, which the CBC PAC retained in response to an FEC inquiry.

The CBC’s troubles with the FEC started last year, when the commission contacted the PAC’s longtime treasurer, Earl Jenkins, to point out discrepancies in its 2009 year-end disclosure reports. The FEC ultimately pursued an enforcement action, known in commission parlance as an alternative dispute resolution.

In its recent settlement with the CBC, the commission concluded that on two occasions in 2009 and 2010, the PAC underreported its receipts by more than $100,000. In both cases, the CBC later filed amended reports to correct the record. The settlement notes that PAC officials “acknowledge inadvertent reporting errors.”

“We have no reason to believe there was anything untoward happening,” said Neil Reiff, a partner with Sandler, Reiff, Young & Lamb who is counsel to the CBC. He attributed the problem to “miscommunications” between the PAC’s staff and the outside vendor filing its reports at the time.

“It was not a very large fine,” Reiff said. “We were very happy with the settlement. And that was a good way to realize that it was a good time to make a change.”

As part of its settlement with the FEC, the PAC has agreed to develop a compliance operations manual and improve its internal controls and communications, among other steps. In the wake of ethics controversies involving both its members and its affiliated nonprofit, the CBC Foundation, the caucus has good reason to stay on the right side of the FEC.

“We are now 100 percent confident that these amended reports are financially accurate,” Reiff said.