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Gramm Seeks to Prevent Federal Audit

August 1, 1985

AUSTIN, Texas (AP) _ A preliminary investigation of U.S. Sen. Phil Gramm’s 1984 campaign spending showed evidence of discrepancies in fund-raising and spending, the Federal Election Commission said in a report.

Gramm has filed suit in federal court in Dallas to prevent the FEC from conducting an audit.

Larry Neal, Gramm’s press secretary, said Wednesday there were minor, clerical errors in the voluminous campaign finance report. But there were no major violations of election law, said Neal and attorney James Schoener, who filed suit on behalf of Gramm’s campaign committee.

″There were what amounted to clerical errors in the course of dealing with 50,000 and more individual contributions,″ Neal said. ″We had a lot of volunteers doing a lot of work on an enormous report.″

Gramm’s reports show he spent $9.8 million to beat Democrat Lloyd Doggett last year. The reports came to the FEC’s attention after Donna Mobley of Austin, former director of Texas Common Cause, filed a complaint in October, before the election.

The commission staff convinced the commission there was ″reason to believe″ there were violations. A full audit was ordered.

But Gramm filed suit June 19 in U.S. District Court in Dallas, alleging the deadline had passed for the FEC to audit his 1984 campaign books. The FEC’s preliminary report is not made public by the agency, but Gramm included it as part of his lawsuit.

The campaign committee will respond to specific questions, but it doesn’t believe a full audit is proper, Schoener said.

″An audit is terribly expensive, probably somewhere between $60,000 to $70,000. They want to rummage through things. That’s too costly and too wasteful of the taxpayers’ money and the campaign’s money,″ he said.

FEC officials say they are bound by confidentiality requirements and cannot discuss the case in detail before it is concluded. The agency’s response to Gramm’s lawsuit is to be filed by Aug. 19. No hearing date has been set.

The allegations against the Gramm campaign include charges that it mishandled donations to a joint fund-raiser breakfast at the Republican National Convention in Dallas last year.

An FEC staff report said at least one contributor did not realize that some money from the Presidential Nomination Breakfast Ball would go to Gramm’s campaign.

Schoener said one ″sweet lady″ misunderstood that some of her money would go to Gramm. ″You can’t help that at a joint fund-raiser. The tickets clearly said there was more than one sponsor.″

Some individuals gave the Friends of Phil Gramm committee $2,000 for the general election, according to the FEC report. That is twice the limit allowed by federal law.

Schoener also denied allegations that the campaign improperly took post- election contributions after reporting it had no outstanding debts. Some bills came in late, he said.

″We admit we failed to disclose debt, but a lot of it wasn’t known at the time,″ he said.

Accidental violations of federal election finance laws carry a $5,000 fine. Willful violations can be punished by a fine of up to 200 percent of the money collected improperly.

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