Vice President Joe Biden's campaign has been fined for sloppy record-keeping and accepting over-the-limit contributions. Biden '08 campaign fined $219K

The Federal Election Commission has penalized Vice President Joe Biden’s 2008 presidential campaign $219,000 for accepting over-the-limit contributions and a discounted flight on a jet owned by a New York hedge fund. His campaign was also charged with sloppy record-keeping.

Biden’s campaign has indicated it will pay the penalty to the U.S. Treasury to resolve the campaign finance compliance issues, which were revealed in an audit report released Friday by the commission.


Elizabeth Alexander, a spokeswoman for Biden in the vice president’s office, called the FEC-ordered repayment “relatively small” and said “some repayment is commonplace after presidential campaign audits.”

Biden was subject to the audit as a condition of accepting taxpayer funds for his presidential campaign through the public financing system. In all, Biden, who dropped out of the race after coming in fifth in the Iowa caucuses and was tapped eight months later to be Barack Obama’s running mate, received $857,000 in taxpayer money for his campaign, which raised $8.2 million from individual contributions, according to the report.

It found that the campaign accepted an illegal corporate contribution in the form of a round-trip flight between New Hampshire and Iowa in June 2007 for three people (the report does not indicate whether Biden, then a Delaware senator, was among the passengers) on a private jet owned by GEH Air Transportation. Federal Aviation Administration records show that GEH is owned by the Clinton Group, a New York hedge fund controlled by George E. Hall.

Biden for President reimbursed GEH Air Transportation $7,911 for the flight — the estimated cost of first-class airfare for three on a comparable commercial flight. But the FEC determined that the flight should have been reimbursed at a charter rate of $34,800.

FEC auditors concluded: “By failing to pay a charter rate, BFP received an in-kind contribution of $26,889 (the $34,800 owed less the $7,911 paid) from GEH,” which is illegal, since corporations are barred from contributing to federal campaigns. Biden’s representatives “indicated that they agreed with the finding and would write a check for $26,889 to the U.S. Treasury,” the auditors wrote.

Neither Alexander, Biden’s spokeswoman, nor Biden’s campaign lawyer or treasurer could immediately answer questions about Biden’s relationship with Hall or whether Biden was on Hall’s corporate plane during the flight in question.

The fund run by Hall, a major Democratic donor who has contributed more than $180,000 to Democratic candidates and causes since 1999 (including $19,000 to Biden’s various committees), has been implicated — but not charged — by Attorney General Andrew Cuomo in a New York state pension fund kickback investigation into a joint venture that paid the Clinton Group $750 million in state funds.

In October 2008, with the probe under way, Cuomo returned a $10,000 donation from Hall.

The FEC audit also found that Biden’s campaign failed to quickly return or otherwise rectify at least $106,000 in contributions beyond the $2,300 maximum donation for individuals during the 2008 election cycle. That was based on an analysis of a sample of contributions, FEC auditors wrote, projecting that the actual total of excessive contributions could exceed $1 million.

It appears that most of the excess contributions stemmed from individuals who donated $4,600 to Biden’s campaign, which would have been the maximum allowable contribution had Biden won the Democratic presidential nomination and progressed to the general election ($2,300 for the primary and an additional $2,300 for the general).

Biden’s campaign told the FEC it would repay the $106,000 to the Treasury for the excessive contributions. But it also stressed that it had previously attempted to contact each of the maxed-out donors to properly dispense with their excess contributions, partly by redesignating some of that money for Biden’s still-operational Senate campaign committee and leadership political action committee, Unite Our States.

Yet the report states that Biden’s campaign “staff was unable to locate the letters or evidence that they were sent,” attributing the confusion to records lost when the campaign moved offices, as well as to the death of the staffer “primarily responsible for sending the compliance letters, including letters to resolve excessive contributions.”

The FEC also ordered Biden’s presidential campaign to pay the Treasury $86,000 for stale-dated checks it issued, including for contribution refunds.

In February, Biden’s representatives had requested a hearing before the FEC to address the findings, but they withdrew the request in April, setting the stage for the release of the report.

Alexander said, “We withdrew our request for a hearing because we concluded we could present all relevant information in writing, as we did.”

Campaign lawyers and operatives dread FEC audits, which can be embarrassing, expensive and arduous — and which typically drag on for months, if not years.

Obama’s presidential campaign, which raised a record-shattering $750 million, is unlikely to be subject to such an audit because it did not participate in the public financing program, which automatically triggers an audit.