Gramm Maneuvers in FEC Dispute Told

Sen. Phil Gramm (R-Tex.) employed unusual tactics, including a lawsuit, to fight attempts by federal auditors to review his 1984 campaign’s financial records, government documents show.

Gramm, who agreed to end the five-year dispute with the Federal Election Commission by paying a $30,000 fine, gave his version of the events last month in a move that preempted public release of documents in the case.

Gramm released the settlement to news organizations on Friday night, after the FEC had closed and before the settlement was final.

Gramm spokesman Larry Neal said the FEC had made the “final offer and it was ours to accept or reject. That was the final action as far as we were concerned.”

While acknowledging errors and blaming them on the inexperience of volunteers, Gramm described them as technical reporting violations.

Corporate Contributions

Although many of the instances did involve reporting errors, an FEC audit also found that the campaign apparently accepted 151 separate contributions from corporations totaling $10,890.

Corporate contributions to political campaigns are forbidden under Texas and federal laws.

FEC documents in the case also reveal that the Friends of Phil Gramm committee fought the agency’s investigation of federal campaign violations with tactics that included a lawsuit against the commission in U.S. District Court in Dallas and its members as individuals.

The committee also questioned subpoenas issued by the FEC to obtain key papers.

In one instance, the campaign committee insisted on a piece-by-piece inventory of more than 500,000 committee documents sought by the FEC.

“This procedure would have been more expensive and time-consuming than the audit itself,” a report by the FEC’s general counsel said.

Neal said disputes early in the auditing process were largely caused by “a bureaucratic procedure that the general counsel’s office attempted to impose.”

Challenged Agency

He said the agency at one point sent a letter that simply said: “ ‘Please send half a million documents to Washington immediately. Thank you.’ Obviously, we felt inventories were appropriate and necessary and challenged them on points such as that.”

In a written statement accompanying the release of the settlement, campaign treasurer Donald R. White said: “The campaign has made a consistent and very costly effort over five years to comply fully with the spirit and substance of the FEC’s regulations.”

White said the crush of 70,000 individual contributions totaling $10 million “defeated the efforts of our volunteer campaign workers to adequately screen and process the incoming mail.”

FEC spokesman Scott Moxley described the fine as one of the largest ever in a congressional race.

Of the 151 prohibited contributions, 127 appear not to have been refunded within 30 days, the FEC counsel’s report said.

Auditors said they found one instance in which the campaign committee “made a refund of an apparent corporate contribution, and voided this refund check when the contributor stated he had intended to write the check from a personal account rather than a corporate account.”