Campaign Finance Audits
The Wisconsin Ethics Commission ("Commission") is required to audit campaign finance reports to check for violations under WIS. STAT. § 19.49(2g). This statute requires making note of the possible violation, and informing the committee of the issue, but does not detail procedures for resolving the possible violations. The Commission has adopted the campaign finance audit schedule provided below.
Overview of Statutory Requirements
Audit Procedures
WIS. STAT. § 19.49(2g) provides:
(2g) AUDITING. In addition to the facial examination of reports and statements required under s. 11.1304 (9), the commission shall conduct an audit of reports and statements which are required to be filed with it to determine whether violations of ch. 11 have occurred. The commission may examine records relating to matters required to be treated in such reports and statements. The commission shall make official note in the file of a committee, as defined in s. 11.0101 (6), of any error or other discrepancy which the commission discovers and shall inform the person submitting the report or statement. The board [commission] may not audit reports, statements, or records beyond the 3−year period for which a committee must retain records under ch. 11.
Restrictions on Release of Records
The Commission is prohibited under WIS. STAT. § 19.50(1) from releasing or allowing inspection of certain records including information related to an investigation or prosecution under Ch. 11, subch. III of Ch. 13, subch. III of Ch. 19, or any other law specified in WIS. STAT. § 978.05(1) or (2). Under WIS. STAT. § 19.55(3), records not subject to inspection include anything obtained or prepared by the Commission in connection with an investigation, including the full text of any complaint received by the Commission. While audits are separated from the confidentiality
provisions that specifically apply to complaints, they still may result in an
investigation or prosecution. Typically, only very general information, such as
the number of possible violations identified in an audit, is released. Information identifying a committee, individual,
violation, or settlement amount is only released if it is contained within a
signed settlement agreement.
Overview of Audit Procedures
1. Staff will initiate an audit based on the schedule listed below. Some audits, like timely filing of campaign finance reports or payment of filing fees, will occur shortly after a report or payment is due. Others require more data analysis, and will occur as time permits.
2. When conducting an audit, staff will perform a global analysis of all committees or individuals subject to a particular law. For example, staff will audit all committees required to report cash balances for cash balance discrepancies. Staff will also audit all candidates on the ballot during the previous election cycle for contribution limits violations.
3. Most data will be pulled from the CFIS database. For lobbying audits, data is also pulled from the Eye on Lobbying website, and for audits of contribution limit violations, staff will pull a list of candidates on the ballot in a specific election from WisVote.
4. Audit data and documents for each committee or person contacted will be saved on the Commission's internal SharePoint site.
5. When possible violations are identified, staff will notify the committee or individual. The notification will request a response within 30 days. The notification will identify the issue and either request that it be fixed or request that the committee or person admit that the violation occurred. This initial communication may refer to the Commission's standard settlement schedules and settlement amounts but it will not include settlement agreements.
6. On an ongoing basis, staff will work with committees to correct erroneous reports. If a mistake is corrected within 30 days, staff will close the audit for that committee or person.
7. If a committee or person admits that a violation occurred, the matter will be added to the agenda for the next Commission meeting. Committees may appear before the Commission through a written submission, by phone, or in person. Any committee or person that wants to appear in person must request to appear in advance of the meeting. The Chair and Vice Chair will decide whether to allow the requestor to appear.
8. Once 30 days have passed since the initial communication:
- If the committee or person has not responded, staff will send a second communication with a reminder of the issue;
- Staff will add the audit item to the audit database for tracking; and
- The matter will be added to the agenda of the next Commission meeting for the Commission to consider whether to offer a settlement consistent with the standard settlement schedule.
9. At its next meeting, the Commission may direct staff to offer a settlement or close the audit as appropriate for each committee or person. Once a settlement offer is issued, the committee or person shall have 30 days to return the signed settlement agreement together with payment in the amount offered.
10. If the registrant or individual refuses to accept the Commission's settlement offer or does not respond, the Commission may direct staff counsel to commence a civil action to collect a forfeiture of at least the amount of the settlement offer.
11. The Commission may place some registrants on administrative suspension rather than pursue civil action. This will generally apply to registrants with little activity that cannot be contacted. If staff believes a registrant should be placed on administrative suspension, staff will present the circumstances to the Commission for authorization to suspend the registration. If a registrant on administrative suspension wants to become active again, staff will request payment for all incurred penalties and request all reports to be filed or corrected. If the registrant does not comply, staff may request authority from the Commission to initiate a civil action.
12. Commission staff will inform the Commission of all late reports, settlement offers, paid settlements and administrative suspensions, and will compile an annual summary for each calendar year.
Termination Audits
Period: Up to three years from the date of the most recent election in which the committee participated through termination
Start Date: Ongoing
Termination audits cover a number of issues, such as whether the committee has $0 cash on hand, whether the committee has $0 in outstanding debts and loans, whether there is an outstanding filing fee, whether there are cash balance discrepancies, and other issues. These audits are conducted on an ongoing basis as committees request to terminate. If time and other work priorities permit, staff will contact unsuccessful candidates and advise them of their options regarding continued reporting, exemption, and termination. Committees identified through this audit could be subject to any of the applicable sections of the Campaign Finance Settlement Schedule. WIS. ADMIN. CODE ETH § 26.02.
Campaign Finance Filing Fees
Period: Annually
Start Date: January 15
Annual filing fees are due the same date the January Continuing campaign finance report is due, between the 15th and 17th of January. Notices are sent by email approximately one month before the fee is due. Reminder emails are sent one week and one day before the deadline. Committees that have not paid are contacted within a few days of the deadline. Committees identified through this audit could be subject to WIS. ADMIN. CODE ETH § 26.02(3).
Timely Filing of Campaign Finance Reports
Period: Each Required Campaign Finance Report
Start Date: Each Filing Deadline
Notices to file campaign finance reports are sent by email approximately one month before the report is due. Additional reminder emails are sent one week before the deadline and again one day before the deadline. Committees that have not filed are contacted the day after the deadline (for election related reports) or within a few days of the deadline (for continuing reports). Committees identified through this audit could be subject to WIS. ADMIN. CODE ETH § 26.02(1) or (2).
Pending Transactions Review
Period: Each Required Campaign Finance Report
Start Date: Semiannually, after January and July Continuing Reports
Committees have the ability to save transactions in the CFIS website and then file them all together when a continuing report or election related report is due. If a committee saves a transaction but does not file it, it is visible to staff. However, it is not visible on the official report available to the general public. Since unfiled transactions may impact other audit results, staff generally reviews pending transactions as soon as all 6-month continuing reports are officially filed in the CFIS database. Staff will notify committees and advise that they have 30 days to either file the pending transactions or delete them if they are duplicates.
Cash Balance Audit
Period: Each Required Campaign Finance Report
Start Date: Semiannually, after January and July Continuing Reports
If a committee has a discrepancy of $100 or more within a report, or a discrepancy between the ending balance and beginning balance of subsequent reports, staff will contact the committee and ask that the discrepancy be resolved within 30 days. Committees identified through this audit could be subject to WIS. ADMIN. CODE ETH § 26.02(8).
Anonymous Contributions Audit
Period: Annually
Start Date: March or April
Wisconsin campaign finance law allows committees to retain anonymous contributions of up to $10.00. If a committee receives an anonymous contribution over $10.00, the excess must be donated to the Common School Fund or to a charity. Multiple anonymous contributions of $10 or less may be lumped together and reported as one amount ONLY if the committee provides a comment explaining the nature of the contributions and confirming that all contributions were $10 or less. Staff will audit for anonymous contributions over $10 that have not been properly reported or disposed of. Committees identified through this audit could be subject to WIS. ADMIN. CODE ETH § 26.02(6).
Corporate/Union/COOP Contribution Audit
Period: Annually
Start Date: March or April
Once a year, staff audits for contributions to candidates, party committees, legislative campaign committees, or PACs from businesses to identify unlawful corporate contributions. We also audit for contributions identified as coming from individuals containing business identifiers like "Corp," "Inc," or "LLC." Committees that appear to have received unlawful contributions are contacted and asked to respond within 30 days. Committees identified through this audit could be subject to WIS. ADMIN. CODE ETH § 26.02(10).
Name/Address/Occupation Information Audit
Period: Annually
Start Date: March or April
Campaign finance statutes require committees collecting non-anonymous contributions of any amount to report the name and address of the contributor. Committees must also report the occupation of any contributor giving more than $200 in a calendar year. Committees must also report the name and address of the payee for any expense greater than $20. In 2020, staff will examine campaign finance data covering calendar year 2019, and alert committees to potential violations, but no enforcement action will be taken. Beginning in 2021, staff will audit for transactions missing the required information, and ask committees to provide the missing information within 30 days. Committees identified through this audit could be subject to WIS. ADMIN. CODE ETH § 26.02(6).
Contribution Limits Audit – Spring/Fall
Period: Annually/Biannually
Start Date: Following April after April Election/August after November Election
The campaign period for spring candidates (judges) runs until July 31. Therefore, the final report of the campaign period for spring candidates is the January Continuing Report which is due in January of the following year. The campaign period for fall candidates runs until the first Tuesday in January. Therefore, the final report of the campaign period for fall candidates is the July Continuing Report of the following year.
After all reports from those periods are entered, and annual audits have been started, staff audit the campaign period for each office for violations of the contribution limits by individuals or committees. Staff conducts an annual audit of the $12,000 annual contribution limit to parties and segregated funds at the same time as the audit of the spring election cycle from the previous year.
Committees identified through this audit could be subject to WIS. ADMIN. CODE ETH § 26.02(9).
Lobbyist Contribution Audit
Period: Annually
Start Date: July or August
Once a year, staff compares a list of campaign contributions to partisan candidates with a list of registered lobbyists. If any matches are found, staff checks to see if the contribution was given before the lobbyist registered or after they surrendered their license. Staff checks for returned contributions and attempts to eliminate false matches. For example, staff will compare lobbyists' registration information with the contribution information to determine whether the person identified is the lobbyist. Lobbyists who appear to have made unlawful contributions are contacted and asked to respond within 30 days. Committees identified through this audit could be subject to WIS. ADMIN. CODE ETH § 26.02(11).
Lobbying Audits
The Commission is required to audit lobbying reports to check for violations under WIS. STAT. § 13.74. That statute requires making note of the possible violation, and informing the person submitting the report of the issue, but does not detail procedures for resolving the possible violations. The Commission has adopted the lobbying audit schedule provided below.
Late Statements of Lobbying Activities and Expenditures (SLAEs) Audit
Period: Each Required Statement of Lobbying Activities and Expenditures Report
Start Date: Each Filing Deadline
Registered lobbying principals must file a Statement of Lobbying Activities and Expenditures (SLAE) for each reporting period. Reporting periods are from January through June and from July though December. SLAEs for the reporting periods are due on July 31 and January 31, respectively. WIS. STAT. § 13.68. The SLAE reports the amount of time, expenditures, allocation of effort, and identities of anyone engaging in lobbying on behalf of the principal.
Late Reports of Lobbying Interest ("15-Day" Reports) Audit
Period: Each Required Statement of Lobbying Activities and Expenditures Report
Start Date: Each Filing Deadline
Lobbying principals must report to the Commission each bill, budget bill subject, administrative rule, or topic on which the principal has made or intends to make a lobbying communication. This report must be made to the Commission within 15 days of the initial lobbying communication. These reports of lobbying interests are commonly referred to as "15 Day Reports." WIS. STAT. § 13.67.
Fully and accurately auditing reports of lobbying interests requires information about when communications occur and what was communicated. This information can be found either in lobbyists' and principals' records or in the information filed in a Statement of Lobbying Activities and Expenditures Report (SLAE"). Staff audits for late reports of lobbying interests after an SLAE deadline using the information in the SLAE. Using this method, staff can determine whether a report of lobbying interests was filed late. The Commission would also investigate any formal complaints related to late reporting.
Late Payment of Lobbying Related Fees
Period: Continual
The lobbyist is responsible for the payment of their lobbyist license fee while the principal is responsible for the fees associated with the principal registration and lobbyist authorization. WIS. STAT. §§ 13.63, 13.75.
An applicant for a lobbying license or principal registration is required to submit with his or her application the applicable fee provided in WIS. STAT. § 13.75(1g). Fees for a lobbyist authorization are also considered to be due at the time of adding the authorization to the principal's registrations tatement. If fees are not submitted within 30 days of the date of the application, the applicant may be found to have violated WIS. STAT. §§ 13.63, 13.64, 13.65, 13.75.
Lobbying Prior to Authorization Audit
Period: Each Required Statement of Lobbying Activities and Expenditures Report
Start Date: Each Filing Deadline
When a lobbyist begins lobbying before the principal has authorized the lobbyist in accordance with the law, this is referred to as lobbying prior to authorization. WIS. STAT. § 13.62(11), 13.65. There are two different lobbying communications thresholds that depend on the scope of a lobbyist's duties on behalf of the principal:
- Lobbyists whose duties on behalf of a principal are exclusively related to lobbying may not engage in any lobbying communications prior to obtaining principal authorization; or
- Lobbyists whose duties on behalf of a principal are not exclusively related to lobbying may have 4 days of lobbying communications prior to obtaining principal authorization within a six-month reporting period.
After every SLAE filing period deadline, staff uses a query which cross-references data self-reported by the lobbyist which shows what dates they had communications, and the date of authorization by the principal.