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Breaking: Orly to be investigated by the FEC over Senate campaign irregularities.

Contributor turns up prematurely dead

More details at The Fogbow.

In a nutshell, the story is that Orly Taitz procured advertising at a Los Angeles radio station. It was paid for by a contributor in the amount of $2,500. The problem is that the named contributor was deceased. One presumes that the contribution really came from the husband of the deceased person, who also donated $2,500 to pay for the ads. Since the limit for an individual contribution is $2,500, Orly was obligated to refund the excess contribution. The FEC notified Orly by certified letter of the problem, and allegedly Orly did nothing.

Some commenters elsewhere suggest that the reporting of the contributions looks fishy, but I disagree. The reporting is correct. The non-refunding is wrong.

For reference:

FEC definition of “in-kind contributions”

Donated Items and Services

The donation of office machines, furniture, supplies–anything of value–is an in-kind contribution. The value of the donated item (the usual and normal charge) counts against the contribution limits. A donation of services is also considered an in-kind contribution. For example, if you pay a consultant’s fee or a printing bill for services provided to a campaign, you have made an in-kind contribution in the amount of the payment.

FEC instructions for reporting “in-kind contributions”

How do I report an in-kind contribution received by our committee from an individual?

In order to avoid inflating/deflating the cash on hand amount, the amount of an in-kind contribution from an individual should be disclosed as a receipt on Line 11(a)(i) of the Detailed Summary Page (Contributions from Individuals/Persons) and a disbursement on Line 21(b) of the Detailed Summary Page(Other Federal Operating Expenditures)
If the in-kind contribution must be itemized on Schedule A, supporting Line 11(a)(i) (i.e. individual’s aggregate contributions are greater than $200 during the calendar year), then it must also be itemized on Schedule B. (11 CFR §104.13(a))

11 Responses to Breaking: Orly to be investigated by the FEC over Senate campaign irregularities.

  1. avatar
    Paul December 15, 2012 at 5:50 pm #

    HA! Can I get a “WOOT WOOT”?!?!

  2. avatar
    donna December 15, 2012 at 5:54 pm #

    FEC Investigating Orly Taitz Senate Campaign Finances–$2500 Donated by Dead Woman

    Taitz made at least one mention of the contribution in question on her blog in this posting on June 6, 2012:

    Thank you Mr. and Mrs. Ladian [sic] and Mr. Schmidt for your generous combined donation to KFI of $7,500 to promote my candidacy. unfortunately, sladerous [sic]remarks by host John kobylt [sic] destroyed all value in these donations and caused damage

    http://rcradioblog.wordpress.com/2012/12/15/fec-investigating-orly-taitz-senate-campaign-finances2500-donated-by-dead-woman/

  3. avatar
    LW December 16, 2012 at 12:52 am #

    Are there airchecks or transcripts of the sladerous remarks? Are they awesome? Are they Evil Roy sladerous?

  4. avatar
    TheEuropean December 16, 2012 at 2:02 am #

    Here you have Orlys Report of Receipts and Disbursements for July 2012:

    http://images.nictusa.com/pdf/527/12020621527/12020621527.pdf#navpanes=0

    At first glance it looks like she returned the $ 5000 to the “Ladians”.

    I am sure this is only bad bookkeeping and nothing more (like money laundering or worse):

    she did not know how to properly document the “in kind” donation. As beneficiary of the payments she had of course to name the radio-station and not the “Ladians”.

    Orly is an astonishing lawyer. She must be a card-holding member not only of the GOP but of the KnowNothings too, also (if the two are not the same).

    Of course this does not change the fact that she received a donation from a dead person.

  5. avatar
    Dr. Conspiracy December 16, 2012 at 2:33 am #

    It doesn’t look like that to me. I don’t know that there is anything wrong with Orly’s reporting of the contribution. FEC rules say:

    “In order to avoid inflating/deflating the cash on hand amount, the amount of an in-kind contribution from an individual should be disclosed as a receipt on Line 11(a)(i) of the Detailed Summary Page (Contributions from Individuals/Persons) and a disbursement on Line 21(b) of the Detailed Summary Page(Other Federal Operating Expenditures)
    If the in-kind contribution must be itemized on Schedule A, supporting Line 11(a)(i) (i.e. individual’s aggregate contributions are greater than $200 during the calendar year), then it must also be itemized on Schedule B. (11 CFR 104.13(a))”

    Her attributing the disbursement to the contributor may well be right. The problem; however, is that the contribution wasn’t legal in the first place. I can see that a campaign is obligated to refund excess donations, but it’s hard to refund something you never got, and in-kind contributions like this aren’t money the campaign ever had.

    TheEuropean: At first glance it looks like she returned the $ 5000 to the “Ladians”.

  6. avatar
    Bob December 16, 2012 at 5:36 am #

    Did she keep campaign donations separate from the non-campaign donations? And are the non-campaign donations she frequently mentions reported to the IRS as income?

  7. avatar
    ObiWanCannoli December 16, 2012 at 11:50 am #

    Since this was an in-kind donation, Orly never received the cash. The Ladians directly paid the radio station for ads on behalf of her campaign. She obviously has no control over the contribution after learning the fraud. I doubt the radio station will honor her request to refund the $2500 to Kimbell. Does the FEC expect Orly to pay Kimbell Ladian his $2500, which she never had in possession, back? Shouldn’t her only obligation be reporting the fraud? She cleared has failed to report the fraud.

  8. avatar
    Birther Weary December 16, 2012 at 12:20 pm #

    While I doubt very much that anything will come of this, at least the FEC isn’t a fictional organization like the California State Bar Association.

  9. avatar
    Dr. Conspiracy December 16, 2012 at 1:46 pm #

    I think they do. While she never had the money, it was a payment for a campaign expense that she incurred. That means that it freed up received dollars that she then could spend elsewhere.

    In order for Orly to have reported it as a contribution, the expenditure had to be “coordinated.” I think that’s the key to why she’s on the hook to refund it.

    ObiWanCannoli: Does the FEC expect Orly to pay Kimbell Ladian his $2500, which she never had in possession, back?

  10. avatar
    TheEuropean December 16, 2012 at 3:19 pm #

    Dr. Conspiracy:
    It doesn’t look like that to me. I don’t know that there is anything wrong with Orly’s reporting of the contribution. FEC rules say:

    “In order to avoid inflating/deflating the cash on hand amount, the amount of an in-kind contribution from an individual should be disclosed as a receipt on Line 11(a)(i) of the Detailed Summary Page (Contributions from Individuals/Persons) and a disbursement on Line 21(b) of the Detailed Summary Page(Other Federal Operating Expenditures)
    If the in-kind contribution must be itemized on Schedule A, supporting Line 11(a)(i) (i.e. individual’s aggregate contributions are greater than $200 during the calendar year), then it must also be itemized on Schedule B. (11 CFR 104.13(a))”

    Her attributing the disbursement to the contributor may well be right. The problem; however, is that the contribution wasn’t legal in the first place. I can see that a campaign is obligated to refund excess donations, but it’s hard to refund something you never got, and in-kind contributions like this aren’t money the campaign ever had.

    Doc, I am a Knownothing on FEC rules. I know something about bookkeeping. Books (financial ones) must give a true picture of the things that happened. If you were right, the books would not show the beneficiant!

    In this case – because there seems to be no way to book payments by donors to third parties directly – the right way, which gives a true picture and inflates not the money on hand, is as follows:

    1.: Itemized receipt page 1A as done by Orly Taitz, even better if under “in-kind-advertising” the name of the Radio-station had been mentioned;

    2.: Itemized disbursements Page 2C:
    under “Full name” pp the radio station;
    under “purpose” = “in-kind-advertising, see itemized receipt page 1A”

  11. avatar
    Paul Pieniezny December 16, 2012 at 4:28 pm #

    Having done some book-keeping myself, I would tend to agree with Doc C (and with Orly, in this case). A (re)imbursement is not the same thing as a refund (note that number 20 gives nil in that document). The in kind contribution must be in the books as a contribution, but should not be deducted as contribution when (re)imbursed. Orly’s attribution to the Ladiens is probably correct, since there was no business relationship between her campaign and the radio station. She was in fact spending the “virtual” money by virtually re-imbursing the Ladiens for a service they rendered her: getting that ad on the radio.

    Of course, I firmly believe that whenever I wrote Orly in the preceding paragraph, it is her secretary or some FM helping out as a book keeper that was meant. I do not really believe Orly is capable of interpreting the FEC rules correctly and logically.

    Of course, Orly is the one who needs to refund the money. She probably thinks the radio station should (after all, they continued to mock her in their regular programme), but the radio station cannot be blamed for the illegal business relationship between Orly and the Ladiens. They performed the service that was expected from them – if everyone providing services to election candidates had to be afraid that he was paid illegally and would therefore have to refund, how many businesses would still provide services to candidates? Orly is claiming her campaign never got that sort of money? Come on, we know she loaned her campaign a lot of money (from a pension fund perhaps?)

    Well, that is my take on it, but IANAL.